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(Reuters) – A hotly contested disqualification fight in the 11th U.S. Circuit Court of Appeals should provide a good indication of the extent of the damages that crypto law firm Roche Freedman faces after the revelation on last month of clandestine video recordings of his partner Kyle Roche.
The anonymous website Crypto Leaks published video clips of Roche, a well-known crypto litigant, last month. In the clips, as reported by my Reuters colleague Jody Godoy, Roche appears to brag about a lucrative financial stake in blockchain company Ava Labs Inc and suggest it has filed class action lawsuits against competitors of Ava for the benefit of the blockchain company. Roche also appears in the video clips to disparage class action plaintiffs as “100,000 idiots over there” and criticize jurors as “idiots.”
Roche, who did not respond to a question I sent to him and his partner Velvel Freedman, denied improper litigation conduct, saying in an Aug. 29 post on Medium that the videos were illegally recorded by an agent working for a defendant in a class action. filed by Roche Freedman. Roche also said the clips were selectively edited, he was intoxicated while making the recordings, and Ava had no say in Roche Freedman’s crypto class actions.
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The firm itself acknowledged that Roche’s comments about band members and jurors were “inappropriate”, although it also echoed Roche’s claim that it had been recorded illegally in a “mise stage orchestrated by an accused”. The company argues that Roche’s boasts about using a class action lawsuit to advance Ava’s interests were “patently untrue”, describing Roche’s statements as a misguided attempt to impress the alleged venture capitalist who he thought he was meeting.
Roche Freedman nevertheless removed Roche from its class action practice, including ongoing cases against stablecoin creator Tether Ltd and crypto exchange Bitfinex, citing the “regrettable distraction” the videotapes have caused.
This action did not appease some critics. Roche Freedman is facing calls for disqualification in the Tether case, not only from the defendants, but also from his own co-counsel at Selendy Gay Elsberg and Schneider Wallace Cottrell Konecky. U.S. District Judge Katherine Polk Failla of Manhattan has scheduled a hearing for Oct. 3 on the disqualification claims, which argue, among other things, that Roche Freedman’s continued involvement in the class actions will bog down litigation in uncovering the conduct Rock.
But in the meantime, Roche Freedman is also rejecting a motion for disqualification to the 11th Circuit by Craig Wright, the self-proclaimed Bitcoin inventor who was hit with a $143 million judgment earlier this year in a case Roche Freedman argued. on behalf of the estate of Wright’s former business partner, David Kleiman. I would say that the result of the 11th Circuit disqualification will tell us even more than the Tether case about the extent of the damage done to the company by the Roche tapes.
The Roche client Freeman, who was seeking hundreds of billions of dollars from Wright, filed the 11th Circuit appeal, despite winning a $143 million trial court judgment. Roche Freedman and Boies co-lawyer Schiller Flexner argued in their opening brief that the trial judge made several critical errors before and during the 2021 trial against Wright, which ended with a verdict of $100 million jury on one of the estate’s claims, but a defense verdict on a dozen other claims. Wright did not cross-appeal the judgment.
The timeline is important. Roche and Freedman began representing the Kleiman estate in 2018, even before leaving Boies Schiller to found their own company. Ava Labs did not exist when they first filed the estate lawsuit against Wright. And according to Roche Freedman, the two named partners were nearly two years into the estate case against Wright before they were hired to do legal work for Ava.
So what does the Wright case have to do with Roche’s video comments about his relationship with Ava?
There is only one direct connection, according to the motion for disqualification filed Sept. 6 by Wright’s lead attorney, Andrés Rivero de Rivero Mestre. Roche allegedly referred to Wright in one of the Crypto Leaks music videos as a “sworn enemy” of Ava’s founder, suggesting a motive to push hard against Wright. The motion for disqualification also theorized that Roche’s bragging about his own wealth suggests he doesn’t feel pressured to put his clients’ interests ahead of his own. In this case, according to Wright’s petition, Roche Freedman blew up a potential settlement that would have benefited the estate.
Importantly, the brief is an opportunity for Wright and Rivero to point out Roche’s unsavory comments, including his assertion that jurors and band members are “idiots.” The filing, in effect, invites the 11th Circuit to join in Wright’s disapproval.
“[Roche’s] admissions of wrongdoing demonstrate the firm’s illegal “business plan” and continued efforts to subvert the fair administration of justice, which bring contempt and discredit to the legal profession and to all courts (including the -ci) before which the firm appeared,” Rivero said. .
Roche Freedman’s Sept. 19 response pointed out that the Wright litigation was well underway before Ava existed and went to trial months before Roche was videotaped.
“Wright’s suggestion that this action was brought for an improper purpose defies logic,” Roche Freedman said. “To state the obvious, this action was brought because plaintiffs — who have never met anyone and have no affiliation with Ava Labs — had a good faith belief that Wright converted their valuable bitcoin-related intellectual property and to the blockchain.”
Freedman elaborated via an email response to the query I sent to him and Roche. “Wright’s motion is frivolous,” he said. “While we understand that he has a personal animus against the company, we would have hoped that this would not be reflected in his documents. Unfortunately, we were wrong.
Wright’s attorney, Rivero, retorted, “Their response doesn’t even begin to address their admitted misconduct.”
Freedman said he did not expect other opponents of Roche Freedman to follow Wright’s lead. I’ve been writing about litigation long enough to predict that if the 11th Circuit grants Wright’s motion, despite the relatively tenuous connection between Roche’s recorded comments and his firm’s litigation against Wright, we can expect the Roche Freedman’s opponents are piling up with their own disqualification moves.
The 11th Circuit’s motion is essentially a test of whether the judges can stand Roche’s conduct. If they can’t, Roche Freedman could be in big trouble.
Law firms seek to oust Roche Freedman from Tether Crypto case
Verdict against self-proclaimed Bitcoin inventor climbs to $143 million
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Crypto Law Firm Roche Freedman Fights To Stay In Bitcoin Case After Video Releases
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