Law firm Quinn Emanuel accused of turning on ex-client in fintech case

A financial technology provider previously represented by Quinn Emanuel accused the law firm of betraying its loyalties and violating ethics rules by taking the case of a former executive suing the company over his termination.

In a filing in the case in California federal court on Thursday, Pagaya Technologies PGY asked a judge to disqualify Quinn Emanuel from representing Hugh Edmundson in the lawsuit he filed in June.

In the new filing Pagaya and its hedge fund affiliate Theorem Technology accused Quinn Emanuel of breaking attorney ethics rules in its new work for Edmundson, a former top executive at Theorem. Pagaya had acquired Theorem last year.

“The firm is a repeat offender, having been disqualified multiple times for this exact misconduct,” lawyers for Pagaya and Theorem at law firm Gibson Dunn wrote. Pagaya said Quinn Emanuel had “brazenly violated its ethical obligations by turning around and suing its own client.”

Quinn Emanuel in a statement on Friday said "Pagaya is no longer a client, and our current work is not related to what we did for them before."

In a statement on Friday, a spokesperson for law firm Gibson Dunn said "Quinn Emanuel is suing its former client over matters about which it previously advised — a clear conflict of interest that courts have not hesitated to disqualify firms for in the past."

Last year, Quinn Emanuel was disqualified from representing Elon Musk's social media platform X in a lawsuit accusing data-scraping company Bright Data of illegally copying and selling content. The law firm had previously represented Bright Data in another lawsuit.

In an April letter from Quinn Emanuel to Edmundson's attorneys, which was included in the court file, the firm had said the "suggestion of a conflict on the part of Quinn Emanuel is false and inaccurate."

The firm also said it had set up "appropriate ethical screens out of an abundance of caution" to separate its prior work for Pagaya with its representation of Edmundson.

Edmundson's lawsuit accused Pagaya and Theorem of wrongful termination, retaliation and other claims stemming from his firing in April from Theorem, where he was chief investment officer. Edmundson founded Theorem in 2014.

Edmundson alleged that “almost immediately after the merger closed, defendants began systematically dismantling Theorem’s independence and strategic decision-making authority.”

Quinn Emanuel provided legal work last year to Pagaya on non-compete and non-solicitation provisions related to Theorem employees, Pagaya said.

It further alleged that Quinn Emanuel's prior work for the company has created a "direct and incurable conflict of interest."

In Thursday’s court filing, Pagaya said that Edmundson’s lawsuit was baseless and that its claims are governed by a binding arbitration agreement.

The case is Hugh Edmundson v. Pagaya Technologies et al, U.S. District Court, Northern District of California, No

For plaintiff: Diane Doolittle and Michael Liftik of Quinn Emanuel

For defendants: Brian Ascher, Katherine Smith and George Adams III of Gibson, Dunn & Crutcher

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