Professional Liability: Don’t Overlook the Trees for the Forest

December 20, 2021

December 20, 2021

Professional Liability: Don’t Overlook the Trees for the Forest

A March 2021 decision in the U.S. District Court in Nevada illustrates how focus on the merits of a lawsuit can misdirect one from important procedural details. The plaintiff in the case, a Nevada-based importer of luxury vehicles from China, made some solid allegations of legal malpractice against a global law firm. Plaintiff had hired the firm to conduct an internal investigation, during which the firm allegedly required employees in the plaintiff’s office in China to hand over personal electronic devices in breach of Chinese law. After plaintiff’s employees complained to Chinese authorities, a police investigation caused many executives to resign, and the plaintiff missed important regulatory deadlines.  

The plaintiff asserted that the actions of the defendant, who was neither licensed in China nor bothered to associate with local counsel familiar with Chinese law and customs, subjected the plaintiff to potential criminal and civil liability.  

Even though the actions at issue seemed like clear malpractice, the court granted the defendant’s motion to dismiss the suit for lack of personal jurisdiction in Nevada.  

Apart from the alleged malpractice conduct taking place in China, not Nevada, the defendant did not own property, had no employees or offices, and had not solicited business in Nevada. Although the plaintiff noted that the firm had represented several clients in Nevada courts, had participated in Nevada transactions exceeding billions of dollars for Nevada clients, and employed eleven attorneys barred in Nevada, the court found that these connections were not sufficiently continuous or systematic to establish that the defendant was "at home" in Nevada for general personal jurisdiction purposes, especially considering it was neither registered in Nevada, nor had its principal place of business there. As to specific personal jurisdiction, the court found that simply agreeing to provide legal services to a company with ties to Nevada was not “purposeful availment” of the benefits of doing business in the state; the case, at its core, involved a Nevada resident that hired an out-of-state law firm to conduct an out-of-state investigation.  

Cases like these are an important reminder to professional liability practitioners to consider whether a defendant law firm can raise a viable jurisdictional defense, even when the law firm has a global presence.  

Other important details that you will want to have nailed down before filing your case include how you will fund the lawsuit or whether you can recoup your case cost investment if your case is unsuccessful. Let LevelEsq help you cover these bases so you can focus on the procedural and evidentiary aspects of your case.  

LevelEsq offers superior lawsuit financing featuring quick and seamless access to capital to fund your case, low rates, an easy-to-use portal, and funds available as needed. With our Litigation Cost Protection (LCP), your firm can take on expensive cases while still retaining the funds it needs to grow and expand as a business.  

Our Lawsuit Cost Financing (LCF) covers case expenses up to $500,000 in the event of a loss at trial, allowing your firm the freedom to focus on pursuing justice with confidence and peace of mind rather than fretting over ever-increasing out-of-pocket costs.

Which of these solutions is best for you? Why choose? Using both in combination will be the ultimate way to level the playing field while raising the bar of profitability for your firm.  

China Auto Logistics, Inc. v. DLA Piper, LLP

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