Lawyer Team Removed for ‘Troubling’ Lack of Loyalty, Judge Says

• Judge explains disqualification of Pillsbury team in Education protest • Firm should have known companies’ interests could diverge, judge says • New counsel request approved for protester

A contract protest team from Pillsbury Winthrop Shaw Pittman LLP violated its duty of loyalty to the winner of a $400 million contract by representing a rival seeking to get that award vacated, which demanded the team’s disqualification, the U.S. Court of Federal Claims said.

Representing Continental Service Group Inc. in a protest of Performant Recovery Inc.'s award—despite Pillsbury having represented Performant in other matters since 2011—created a “troubling” conflict of interest, Judge Thomas C. Wheeler said.

Wheeler, who issued the disqualification March 23, dismissed as “ignorant and careless” Pillsbury’s claim that it couldn’t have foreseen that the two companies could be aligned against each other in a bid protest of multiple student debt collection awards under an Education Department competition.

Pillsbury’s plethora of government contract protest experience should have made it aware that Continental’s and Performant’s interests could easily diverge at some point in the case, Wheeler said.

Therefore, Wheeler disqualified Pillsbury as counsel for Continental, but also granted Continental’s request to rely upon Edward H. Meyers of Stein Mitchell Cipollone Beato & Missner LLP in the award protest going forward.

Performant is enjoined from performing the contract following a Feb. 26 rulingin the protest. The government is considering its next move, but is “unlikely” to pursue continued litigation, the court said.

Misleading and Puzzling

Attorneys from Pillsbury’s Los Angeles and Northern Virginia offices represented Continental, one of 19 plaintiffs, in a protest of student debt collection awards to Pillsbury and Windham Professionals Inc. that commenced in January.

Performant, represented by attorneys from Hogan Lovells in Washington, asserted that Pillsbury’s representation of Continental caused a conflict demanding disqualification, and Wheeler agreed.

Pillsbury’s representation of Continental violated American Bar Association conflict rules, Wheeler said.

Pillsbury never obtained or attempted to obtain Performant’s consent to representing Continental, and failed to inform Performant of a possible conflict, Wheeler said.

To assert that Performant waited too long to challenge the conflict of interest is “dubious, misleading, and puzzling,” Wheeler stated.

The case is FMS Investment Corp. v. United States, Fed. Cl., No. 18-204C, 3/29/18.

To contact the reporter on this story: Daniel Seiden in Washington atdseiden@bgov.com To contact the editors responsible for this story: Paul Hendrie atphendrie@bgov.com ; jkirkland@bgov.com