SMRH

Introduction

In 1990, plaintiff American Airlines, Inc. (American) retained defendants Gregory A. Long (Long) and his law firm, Sheppard, Mullin, Richter & Hampton (SMRH), to represent it regarding a specific model of aircraft it contracted to purchase from McDonnell Douglas Corporation (MDC). After 1990, ADO Finance A.G. (ADO), another purchaser of the same model of aircraft from MDC, commenced suit against MDC asserting the aircraft did not meet specifications. In pursuit of its claims against MDC, ADO initiated discovery to obtain production of documents related to American’s contract with MDC. American engaged defendants to represent it in connection with the discovery proceeding in the ADO/MDC lawsuit. Defendants, over American’s objection, accepted employment with ADO whereby Long would serve as ADO’s designated deposition witness. American participated in the deposition, objected to Long’s involvement, and Long was eventually disqualified.

American sued defendants on various theories, contending that defendants accepted representation that was adverse to American. The matter ultimately was tried, and a jury found defendants liable for breach of fiduciary duty and…