Judge rejects request to seal malpractice lawsuit against Katten Muchin

SANTA ANA -- Calling it "not a close call," an Orange County Superior Court judge on Wednesday rejected a defense bid to seal a new malpractice complaint against Katten Muchin Rosenman LLP.

Judge William D. Claster said Katten's lawyers at Munger, Tolles & Olson LLP didn't identify true overriding interests to support keeping secret a typically public court filing, calling concerns about ruined reputations "candidly, run of the mill."

"While the Court appreciates that no person (especially a lawyer) wants to be accused of fraud, such accusations are simply not enough to warrant preventing those claims from being available in the public record," Claster wrote in his single-page ruling.

The judge added that if the defense "theory of sealing were accepted, then there would be no end to sealing motions."

Plaintiff attorneys at Keller/Anderle LLP filed the complaint, which is the third amended, a few hours later. It broadens an already detailed case against Katten on behalf of lender CashCall, Inc., which blames Washington D.C.-based partner Claudia Callaway for advising a doomed tribal lending program that wrecked the company and exposed it to lawsuits across the country. With legal malpractice, fraud and deceit, breach of contract and breach of fiduciary duty claims already pending, the new complaint adds Callaway as an individual defendant. It also pegs damages at "more than $1 billion" while the previous complaint said upwards of $500 million.

Keller/Anderle attorneys drafted the new complaint after depositions exposed what they described as broader wrongdoing than previously described.

In the motion to seal, Munger's Bethany W. Kristovich said the new damages figure is "extortionate" and said the amendment is aimed at generating "clickbait," which she described as "headline-grabbing soundbites."

Claster rejected the motion tentatively on Tuesday then finalized his order after hearing argument on Wednesday from Munger chair Brad D. Brian and Keller/Anderle's Reuben C. Cahn and Jennifer L. Keller. CashCall, Inc. v. Katten Muchin Rosenman LLP, 2017-00914968 (O.C. Super. Ct., filed April 14, 2017).

"I'm not sure there's anything to balance here, other than the fact that your client Ms. Callaway is going to be embarrassed," Claster said. "Doesn't that happen in almost every case where someone gets sued, and they're accused of bad things? They're embarrassed."

Brian said he respects his opposing counsel and said he's "not trying to besmirch anyone's motives or ethics at all." But he also lamented the new complaint as an example of "a proliferation of these long what I call long, closing argument briefs."

"In their opposition, they trumpeted that they added 50 pages of factual allegations -- as if that's a plus," Brian said. "One has to wonder what the purpose of doing that is. And I would argue that's not what complaints are supposed to be."

But, the judge responded, "I'm not sure there's anything wrong with that under the rules of court."

Brian referenced a Daily Journal article about the motion to seal and said he doesn't "know how it got there."

"That's exactly the kind of thing I worry about when you have allegations that are of this type. Unnecessary, inflammatory allegations," Brian said.

In his argument, Cahn said the sealing request is "classic prior restraint" of the First Amendment. He called "preposterous" the argument that "mere commercial embarrassment" is an overriding interest on the level of national security and diplomatic concerns.

"What Mr. Brian essentially complains about is that they don't believe these allegations are true and that's what a jury trial is for," Cahn said.