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BofA’s attempt to disqualify AIG law firm rejected

Judge says partner’s minimal involvement outweighs conflict of interest

Mired in legal woes, Bank of America (BofA) suffered another blow when its attempt to disqualify the law firm representing American International Group Inc. (AIG) in its $10 billion mortgage fraud lawsuit was rejected Tuesday by a federal judge.

U.S. District Court Judge Barbara Jones ruled the alleged conflict of interest had “no meaningful showing” of any impact on the trial process for the lawsuit.

BofA raised the question in October against a partner of the law firm Quinn Emanuel Urquhart & Sullivan, aiming to remove the law firm from the case. The partner in question, Marc Becker, had previously defended BofA’s subsidiaries Merrill Lynch & Co. and its First Franklin Financial Corp. unit against similar charges of mortgage fraud. At the time, Becker was a partner at Munger, Tolles & Olson and moved to Quinn in 2008.

Though Quinn Emanuel removed Becker form the AIG case after just 5.8 hours of work, BofA argued that Becker’s involvement broke crucial ethical rules, as Becker could release confidential information.

However, Jones ruled that Becker’s minimal involvement in the case and AIG’s established relationship with the law firm offset the possibility of disclosure of confidential client information.

“Screens erected immediately upon discovery of the conflict weigh against disqualification,” Jones explained in her ruling.

She also cited Becker’s physical distance from the case, as he is based in the firm’s London office, and the size of Quinn Emanuel, with more than 500 lawyers, as reasons for her decision.

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