## Facts

- Kevin So, a Hong Kong resident and PRC citizen who did not speak English, lost $30 million through an investment later revealed as a Ponzi scheme.
- So had authorized Lucy Yan Lu to act as his investment agent; litigation in London followed after the loss, including claims that documents related to the transfer were fraudulent.
- Leonard J. Suchanek, a Washington, D.C. attorney, was retained through Lu to help recover So’s funds; Suchanek had also represented Land Base, an entity connected to the investment transaction.
- Suchanek undertook overlapping representations of So, Lu, and (initially) Land Base in related matters despite diverging interests, including allegations implicating Land Base-related actors and misconduct by Lu.
- So later told Suchanek that Lu had exceeded her authority; Suchanek advised So to maintain existing arrangements.
- After Lu falsified So’s witness statement in the London proceeding, Suchanek advised So to revoke Lu’s authority but continued joint representation of So and Lu for months.
- So placed substantial funds in a trust account controlled by Suchanek; the trial court found Suchanek assured So the funds would not be used to pay Suchanek’s services but Suchanek paid himself from the trust account.
- Suchanek ended the representation while retaining about $400,000 from So’s trust account without providing an invoice or full accounting and refused So’s demands for return and an accounting.
- So sued for malpractice, breach of contract, breach of fiduciary duty, and replevin; after a bench trial, the district court found a fiduciary-duty breach and ordered partial fee disgorgement plus interest (about $455,933.52).
- Suchanek appealed the liability and remedy; So cross-appealed seeking broader disgorgement.

## Issues

1. Whether Suchanek breached fiduciary duties by representing clients with materially adverse interests without obtaining So’s informed consent after full disclosure.
2. Whether the district court erred by limiting fee disgorgement to discrete periods rather than ordering broader disgorgement for conflicted representation.

## Decision

- The D.C. Circuit affirmed the finding that Suchanek breached fiduciary duty through conflicted representation without informed consent.
- The court held the district court had equitable authority to require disgorgement of fees as a remedy for the breach.
- The court concluded the district court’s disgorgement analysis was too narrow given the nature and persistence of the conflicts.
- The judgment was affirmed as to liability but remanded for reconsideration of the appropriate scope of disgorgement.

## Legal Principles

- Concurrent representation creating a material limitation on loyalty or independent judgment violates conflict-of-interest rules unless the lawyer provides full disclosure of material facts and obtains informed consent.
- Informed consent requires genuine understanding by the client; courts scrutinize consent where the client is vulnerable or communication is mediated through a conflicted intermediary.
- Conflict-of-interest violations by an attorney constitute breaches of fiduciary duty.
- Courts sitting in equity have broad discretion to order fee disgorgement from attorneys who breach fiduciary duties; disgorgement may extend beyond isolated episodes if the conflict taints the representation.

## Conclusion

The D.C. Circuit upheld liability for breach of fiduciary duty based on conflicted representation without informed consent and held that equitable fee forfeiture may be broader than the limited periods selected by the trial court, remanding to reassess the proper extent of disgorgement.


So v. Suchanek, 670 F.3d 1304 (D.C. Cir. 2012)