Crypto law firm Roche Freedman fights to stay in bitcoin case after videos surface

(Reuters) – A hotly contested disqualification battle at the 11th U.S. Circuit Court of Appeals should give a good indication of how much damage crypto law firm Roche Freedman is facing after last month’s revelation of secret video recordings of name partner Kyle Roche.

The anonymous website Crypto Leaks published video clips of Roche, a well-known crypto litigator, last month. In the clips, as my Reuters colleague Jody Godoy has reported, Roche appears to boast of a lucrative financial stake in blockchain company Ava Labs Inc and suggest he filed a class-action lawsuit against Ava competitors to benefit the blockchain company. Roche also appears in the video clips to disparage class-action lawsuits as “100,000 idiots out there” and to criticize jurors as “idiots.”

Roche, who did not respond to a question I sent to him and partner Velvel Freedman, has denied any judicial misconduct, claiming in an Aug. 29 Medium post that the videos were illegally recorded by an operator working for a defendant in a class action. submitted by Roche Freedman. Roche also said the clips were selectively edited, that he was intoxicated when the recordings were made and that Ava had no say in Roche Freedman’s crypto class action lawsuit.

The firm itself has acknowledged that Roche’s comments about class members and jurors were “inappropriate,” though it has also reiterated Roche’s claim that he was illegally recruited into a “setup orchestrated by a defendant.” The firm claims that Roche’s boasts about using class action lawsuits to advance Ava’s interests were “clearly false,” describing Roche’s statements as a misguided attempt to impress the purported venture capitalist 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 “unfortunate distraction” the videotapes have caused.

That action has not raised any critics. Roche Freedman is facing disqualification claims in the Tether case not only from the defendants, but also from its own co-counsel at Selendy Gay Elsberg and Schneider Wallace Cottrell Konecky. U.S. District Judge Katherine Polk Failla of Manhattan has scheduled an Oct. 3 hearing on the disqualification motions, which claim, among other things, that Roche Freedman’s continued involvement in the class-action lawsuits will cause the discovery trials of Roche’s conduct to collapse.

But in the meantime, Roche Freedman is also fending off a disqualification motion at the 11th Circuit by Craig Wright, the self-proclaimed Bitcoin inventor who was hit earlier this year with a $143 million judgment in a case Roche Freedman sought on behalf of the estate of Wright’s former business partner David Kleiman. I would argue that the outcome of the 11th Circuit disqualification will tell us even more than the Tether case about the extent of damage to the firm from the Roche ties.

Roche Freeman’s client, seeking hundreds of billions of dollars from Wright, launched the 11th Circuit appeal, despite winning a $143 million judgment from the district court. Roche Freedman and Boies co-counsel Schiller Flexner argued in the opening brief that the trial judge made several critical errors before and during Wright’s 2021 trial, which ended in a $100 million jury verdict on one of the estate’s claims, but a defense. judgment on a dozen other claims. Wright has not cross-appealed the sentence.

The timeline is significant. Roche and Freedman began representing the Kleiman estate back in 2018, before even leaving Boies Schiller to found their own firm. Ava Labs did not exist when they first filed the estate’s lawsuit against Wright. And according to Roche Freedman, the two named partners were almost two years into the estate’s case against Wright before they were engaged to do any legal work for Ava.

So what does the Wright case have to do with Roche’s videotaped comments about his relationship with Ava?

There is only one direct link, according to the Sept. 6 disqualification motion filed by Wright’s lead attorney Andrés Rivero of Rivero Mestre. Roche allegedly referred to Wright in one of the video clips on Crypto Leaks as a “nemesis” of Ava’s founder, suggesting a motive to push hard against Wright. The disqualification motion also theorized that Roche’s boasting of his own wealth suggests he does not feel compelled to put his clients’ interests ahead of his own. In this case, Wright’s motion argued, Roche Freedman blew off a potential settlement that would have benefited the estate.

But mostly, the brief is an opportunity for Wright and Rivero to highlight Roche’s unsavory comments, including his claim that jurors and class members are “idiots.” The filing effectively invites the 11th Circuit to join Wright’s disapproval.

“[Roche’s] admissions of wrongdoing demonstrate the firm’s illegal ‘business plan’ and its ongoing efforts to subvert the fair administration of justice, bringing into disrepute the legal profession and every court (including this one) in which the firm has appeared,” Rivero argued. .

Roche Freedman’s September 19 response emphasized that the Wright lawsuit was well underway before Ava existed and was being tried months before Roche was filmed.

“Wright’s suggestion that this action was brought for an improper purpose defies logic,” Roche Freedman said. “To state the obvious, this lawsuit was filed because the plaintiffs — who have never met anyone from and have no affiliation with Ava Labs — believed in good faith that Wright was converting their valuable bitcoin and blockchain-related intellectual property.”

Freedman elaborated via an email response to the question I sent to him and Roche. “Wright’s motion is frivolous,” he said. “While we understand that he has a personal dislike for the firm, we had hoped that this would not be reflected in his records. Unfortunately, we were wrong.”

Wright’s counsel Rivero responded: “Your response does not even begin to address your admitted misconduct.”

Freedman said he doesn’t expect other Roche Freedman opponents to follow Wright’s lead. I’ve written 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 the firm’s litigation against Wright, we can expect Roche Freedman opponents to pursue their own disqualification. movements.

The 11th Circuit motion is basically a test of whether judges can tolerate Roche’s behavior. If they can’t, Roche Freedman could be in big trouble.

Read more:

Law firms seek to remove Roche Freedman from Tether crypto case

Judgment against self-proclaimed Bitcoin inventor balloons to $143 million

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