Law firm Jackson Walker hit with new lawsuit over lawyer's romance with judge

By David Thomas

Nov 4 (Reuters) - Law firm Jackson Walker is facing another lawsuit stemming from an undisclosed romance between one of its lawyers and a U.S. bankruptcy judge, this time from two technology company executives who claim the firm abused its influence over the judge to block them from suing their former employer.

Bardia and Bahar Dejban alleged they were stymied from pursuing valid employment and tort claims against e-commerce company Volusion in California by U.S. Bankruptcy Judge David Jones in Houston, who was overseeing Volusion's Chapter 11 bankruptcy proceedings.

Volusion was represented in the bankruptcy by Jackson Walker and its then-partner Elizabeth Freeman, who was in a secret relationship with Jones, the Dejbans alleged in their lawsuit, filed Monday in Los Angeles County Superior Court.

The Dejbans said they were "forced to relinquish their claims after the Lothario judge threatened sanctions at the behest of his lover and her law firm who shamelessly used the judge as their enforcer under the guise of being a judge."

The lawsuit names Jackson Walker as well as its current partner Matthew Cavenaugh and former partner Freeman as defendants.

A spokesperson for Jackson Walker and Cavenaugh declined to comment. Lawyers for Freeman did not immediately respond to a request for comment.

Jones was not named as a defendant in the lawsuit. A spokesperson for law firm Boies Schiller Flexner, which is representing Jones in at least two civil lawsuits, did not immediately respond to a request for comment.

Bardia Dejban was the CEO of Volusion and Bahar Dejban was the company's general counsel until 2020. That same year, the company hired Jackson Walker and filed for bankruptcy in the Southern District of Texas, Jones' court. The Dejbans alleged that Freeman, who was a key adviser to Volusion, deliberately steered the case to Jones.

The Dejbans brought two lawsuits against members of Volusion's board of directors, alleging discrimination and employment claims.

Jones ordered the first lawsuit, originally filed in California state court, to be dismissed. When the Dejbans filed a second, similar lawsuit in July 2021, Jones accused them of violating his orders and threatened them with sanctions.

The Dejbans said in their lawsuit against Jackson Walker that they were forced to forgo their claims, even against "separate, non-bankrupt parties."

"Plaintiffs had no reason to suspect that the bankruptcy court’s threats of contempt or the coercive release and dismissal process were the product of collusion between defendants and the presiding judge," the lawsuit said.

Jones was once the busiest bankruptcy judge in the U.S. and presided over the bankruptcies of JCPenney, Neiman Marcus, Party City, Chesapeake Energy and many others. He resigned from the bench in October 2023 after his relationship with Freeman became public.

Jackson Walker is facing lawsuits from others claiming the relationship harmed their investments in companies whose cases Jones oversaw. The firm has moved to dismiss those lawsuits.

The firm is also fighting an effort by the U.S. Trustee, the U.S. Justice Department's bankruptcy watchdog, to force Jackson Walker to disgorge all of the fees it was awarded by Jones.

(Reporting by David Thomas)