Judge refuses to dismiss suit against Southland law firm

Irell & Manella, a prominent Southern California law firm, must face a lawsuit by Charter Communications Inc. for $150 million in damages over claims the firm mishandled the acquisition of a cable system in 1999.

U.S. District Judge Andrew Guilford, in a ruling filed late Tuesday in Santa Ana, denied Irell’s request to dismiss the case. The firm had argued that it couldn’t defend itself adequately because Charter Chairman Paul Allen, Microsoft Corp.’s co-founder, is one of its clients.

Allen isn’t a party to the suit.

During the acquisition of a business unit, an Irell associate mistakenly deleted two paragraphs from a contract, which resulted in Allen obtaining a different type of stock in the unit than had been intended.

The cable TV firm paid Allen “millions of dollars” to rectify the mistake, according to the ruling.

Guilford said in his ruling that Irell “must show that it will not be able to mount a full defense without violating its obligations to Allen.”

Thomas Malcolm, a lawyer for Irell, couldn’t be reached for comment. But in April, when Charter filed the lawsuit, Irell partner David Gindler said: “If Charter suffered any loss at all, our firm was not the cause.”

Charter alleges that the law firm made “critical errors” and concealed its mistakes for as long as nine months in 2002.