DLA Piper, a prominent law firm, succeeded in persuading a U.S. judge to impose sanctions against a shareholder involved in a failed $180 million malpractice lawsuit against the firm. The lawsuit emerged from DLA Piper’s representation of the Chinese software company Link Motion.

Background

The U.S. District Judge Victor Marrero in Manhattan upheld a recommendation made by a magistrate judge in July, which suggested sanctions against China AI Capital Limited and its legal representatives for initiating the lawsuit against DLA Piper. The lawsuit alleged malpractice on the part of DLA Piper regarding their work for Link Motion.

Sanctions Imposed

Judge Marrero ruled that China AI and its legal representatives at Felicello Law are obligated to cover the reasonable costs and attorney fees incurred by DLA Piper throughout the litigation process. This decision reinforced the magistrate judge’s determination that the case lacked merit and was frivolous.

Response from Involved Parties

Kevin Rosen, a partner at Gibson Dunn representing DLA Piper, expressed satisfaction with the court’s decision, emphasizing that the case was baseless and the plaintiffs and their legal representatives should be held accountable.

However, Rosanne Felicello of Felicello Law, representing China AI, disagreed with the ruling and announced plans to appeal.

Legal Background

DLA Piper had faced allegations of negligence in defending Link Motion against a 2018 lawsuit brought by shareholder Wayne Baliga, resulting in the company being placed into receivership. Despite withdrawing as Link Motion’s counsel four months after the lawsuit was filed, DLA Piper continued to face legal challenges, including the lawsuit initiated by China AI.

Ongoing Legal Proceedings

Apart from the lawsuit by China AI, DLA Piper is also entangled in another legal malpractice case filed by Link Motion. However, Judge Marrero dismissed this case in favor of DLA Piper in May, and it is currently under review by the 2nd Circuit U.S. Court of Appeals.

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