McCaffery Drops Lawsuit Against Inky, Daily News

Papers agree to report that FBI found no wrongdoing in referral fees issue.

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Pennsylvania Supreme Court Justice Seamus McCaffery has dropped his defamation lawsuit against the Inquirer and Daily News, the Legal Intelligencer reported Tuesday night.

As part of the settlement agreement, the newspapers agreed to report on a statement issued Tuesday by the U.S. Attorney’s Office for the Eastern District of Pennsylvania that said the office and the FBI closed their investigation of McCaffery and Rapaport, finding no criminal charges should be filed. “The United States Attorney’s Office and the Federal Bureau of Investigation conducted an investigation with respect to Pennsylvania Supreme Court Justice Seamus McCaffery and his wife, Lise Rapaport, in connection with referral fees paid to Ms. Rapaport in civil cases,” the U.S. Attorney’s Office said in a statement sent to The Legal on Tuesday. “On the basis of this investigation, these agencies concluded that federal criminal charges should not be filed, and have therefore closed their investigation.”

McCaffery and his wife, Lise Rapaport, sued the Inquirer in March, a year after a front-page article by investigative reporter Craig McCoy detailed how Rapaport — who also served from time-to-time as McCaffery’s chief judicial aide — had received hefty case referral fees from firms that later appeared before McCaffery and the state court. The articles produced an FBI investigation and the overhaul of some ethics rules at the court, but McCaffery and his wife denied any wrongdoing in the matter. (The Daily News was included in the suit because of an editorial cartoon that appeared after the Inquirer story.)

McCaffery, of course, was relieved of his court duties on Monday pending the outcome of an investigation by the Judicial Conduct Board. McCaffery’s involvement in the ever-widening “Porngate” scandal was cited as one cause of the action, but so was possible wrongdoing in connection with the referral fees. The U.S. Attorney’s Office may put that issue to rest for McCaffery, at least.