A federal judge not only shut down efforts to hold dozens of law firm partners liable for a managing partner’s alleged multimillion-dollar fraud scheme but also determined the plaintiffs firms should face sanctions for casting such a wide net.
The plaintiffs, who were all clients of Messner Reeves, argued that all of the firm’s attorneys with the title of “partner” had created an unregistered general partnership that could be held vicariously liable for the conduct of Torben Welch, managing partner of the firm’s Salt Lake City office, who they alleged misled them into a more than $10 million scheme. In total, the plaintiffs raised Racketeering Influenced and Corrupt Organizations Act claims against more than 75 current and former partners, 10 equity partners and one associate.