Blackwater's Legal Malpractice Claim Is Thrown Out Again

I’ve chronicled the suit filed by Blackwater against its law firm, Wiley Rein. After losing a suit brought by the families of four employees who were killed in Iraq, Blackwater sued the firm saying that the firm committed legal malpractice by not invoking the proper statute in an effort to remove the suit from state court to federal court.

In a blog post made when the suit was filed, I wrote:

The reports on the suit are limited so it’s difficult to know the exact substance of Blackwater’s claims. But it’s hard to see from the information available how Blackwater can prove that it would have prevailed on the matter in federal court but lost in state court.

It turns out I was right.  On December 29, the legal malpractice claim was thrown out for the second time.  The cited article noted:

Two judges have now dismissed the case, concluding that Blackwater’s argument that a federal court would have ruled differently than the state court is purely speculative because the federal court might well have ruled that the private security company’s employees were not federal officers.

The case is a good example of showing the need to prove causation. It’s not enough that a plaintiff show that the lawyer made an error; the plaintiff must also show that the error caused harm to the plaintiff. In the litigation context, as in the Blackwater case, that is usually proven by proving the “case within a case.” If the lawyer represented a defendant in the underlying litigation, the client must prove that absent the lawyer’s error, it would have prevailed in the suit or at least been hit with a smaller judgement. Because Blackwater couldn’t prove that they would have prevailed in the absence of the error, they couldn’t make a legal malpractice claim. If the lawyer represented a plaintiff in the underlying litigation, the client must prove that absent the lawyer’s error, the client would have obtained a judgment and that the judgment would have been collectible. If the client can’t prove the case within a case then the client can’t win a legal malpractice claim.

Having said that, there is a growing trend among some jurisdictions, inlcuding Texas (though it’s not well settled), that allow a client to prove causation by presenting evidence that the lawyer’s conduct affected the settlement value of the case. This certainly makes sense given the falling number of trials.