On Friday, September 20, 2024, U.S. Bankruptcy Judge Marvin Isgur referred law firm Jackson Walker LLP to Randy Crane, chief judge of the U.S. District Court for the Southern District of Texas, for disciplinary action due to alleged ethical breaches. This referral, made under Rule 6 of the Disciplinary Rules, highlights concerns regarding the firm’s conduct in relation to a former partner’s intimate relationship with a bankruptcy judge.
The referral stems from findings related to Elizabeth Freeman, a partner at Jackson Walker, who was disclosed to have had a secret relationship with Judge David Jones. According to Judge Isgur’s letter, the relationship itself is not the primary concern; rather, it is Jackson Walker’s failure to disclose this relationship to clients and the court that raises significant ethical issues.
Judge Isgur noted that on March 6, 2021, Jackson Walker was informed of allegations regarding Freeman’s relationship with Judge Jones. The following day, Freeman acknowledged a prior relationship but denied any ongoing connection. Despite this acknowledgment, the firm allegedly did not inform its clients or the court about the relationship, failing in its ethical obligations.
After retaining ethics counsel, Jackson Walker continued to withhold information from affected clients and the court, even after learning of an ongoing relationship on February 1, 2022. The firm reportedly billed approximately $11 million in fees on cases where Judge Jones served in a judicial capacity without disclosing the relationship.
The referral letter outlines a series of undisputed facts concerning Jackson Walker’s actions. Following the initial allegation, the firm forwarded an email to Judge Jones’ chambers but did not notify its clients, opposing counsel, or the court about the relationship’s implications. This lack of transparency persisted despite ongoing discussions regarding disclosures and potential conflicts of interest.
In one instance, Judge Isgur pointed out that Freeman’s counsel had urged Jackson Walker to amend disclosures to include references to her “close personal relationship” with Judge Jones. However, the firm ultimately decided against making any such disclosures, which Judge Isgur characterized as a deliberate failure to fulfill its ethical duties.
The letter also detailed specific cases where Jackson Walker operated without informing clients about the relationship. In several bankruptcy proceedings, the firm submitted disclosure statements and plans that did not mention the relationship, allowing the firm to secure releases and exculpations potentially shielding it from future liability.
Judge Isgur criticized Jackson Walker for prioritizing its interests over its clients’ and the court’s, describing the firm’s decision to withhold information as an ethical breach that could not be excused. The referral also indicates that Jackson Walker’s actions may have violated Texas Disciplinary Rules concerning a lawyer’s duty to uphold the integrity of the judicial process.
The judge expressed concerns regarding the implications of these breaches, noting that they could undermine the public’s trust in the legal system and the integrity of bankruptcy proceedings. He recommended that an inquiry be initiated under Rule 6 to investigate the firm’s conduct thoroughly.
A copy of the original filing can be found here.
