A Devilishly Daring Gambit: A Partial Roadmap Through the Federal Common Law of Disqualification in a Newly Modeled World
By
By
Amir Shachmurove[1]*
“Hitherto I have been but the witness, little more; and I should hardly think now to take another tone, that of your coadjutor, for the time, did I not perceive in you,—at the crisis too—a troubled hesitancy, proceeding, I doubt not, from the clash of military duty with moral scruple—scruple vitalized by compassion.”[2]
The very idea elicits jitters from lawyers and misgivings from judges. In the eyes of all but the most nakedly partisan, to move for another lawyer’s disqualification and force a court to deprive a party of a chosen counselor amounts to so aggressive a request and so radical a tonic as to be justified only by the most irresistible reasons. The ethical lapse threatened, some seemingly imply, must strike a reasonable observer as sufficiently grotesque and fateful as to induce a blush from even jaded barristers before a lawyer should even entertain the launching of such a portentous attack. The authority to do so may be “incidental to all [c]ourts,” as Chief Justice John Marshall opined in 1824,[3] and a chosen lawyer’s ejection may be a “prophylactic device for protecting the attorney-client relationship,” as Judge John Louis Coffey discoursed in 1982.[4] But, in zealously opinionated hands, an adversarial posture once treasured by the profession’s foremost guardians[5] yet excoriated by the more recent versions of the Federal Rules of Civil Procedure,[6] an entreaty for another’s disqualification is but a baneful and baleful effort, poorly-camouflaged as a moral imperative, to delay proceedings or remove otherwise competent counsel. Merely by its broaching the odds of a trial’s delay surge within an already besieged system,[7] as the conduct of the parties forfeits its status as every participant’s singular concern, and the alleged actions and biases of the actors themselves become the most pressing subject of litigation. With any litigant’s cause ejected from its original limelight, all now turn to parsing past connections and possible exposures and drawing reasonable extrapolations—a court duty-bound to ascertain the existence of a “compelling” justification[8] or a lawyer’s galling deployment of one of the law’s more nefarious “technique[s] of harassment.”[9]
Riven by such discordant filaments and reliant on federal common law, the Model Rules produced and published by the American Bar Association (“ABA”), and more than fifty jurisdictions’ idiosyncratic iterations, the federal courts’ disqualification jurisprudence exhibits a bewildering opacity. This is especially true as to one of the most frequently asserted—and, as a logical consequence, most readily abused and deflected—grounds: conflict of interest between a lawyer’s former client and his or her current one, an increasingly common occurrence due to the legal world’s recent hyper-lateral flurry.[10] Indeed, between 1969 and 1989, the professional standards governing conflicts of interest have only grown “longer,” “more restrictive,” and “more complex.”[11] In spite of the resulting cacophony, however, guidelines can still be derived, a foundation for analyzing cases thereby laid, and a bit of advice dispensed for the brave few tempted to wander through this booby-trapped landscape.
After graduating from law school, Vere Rolland Forester (“VRF”) joined the law firm of Sindri & Víkngr (“S&V”) as a labor and employment associate. After years of impressive billing totals and a handful of courtroom victories, VRF cemented his position as the firm’s most experienced employment litigator, winning partnership within a decade. In 2001, the firm’s management committee naturally assigned VRF to monitor the work of a team of lawyers and paralegals (“Team One”). As requested, VRF attended many, but not all, of the weekly meetings during which this coterie’s attorneys spoke about their ongoing projects. During this period, one associate, soon joined by other S&V attorneys, embarked upon a compliance audit and employment law review for a local home improvement company (“Company”) and its affiliates, including a troubled gutter fabrication and installation business (“Affiliate”). In ensuing conferences, she divulged details about her multiday interviews with officers and managers at the Company’s facilities. Apparently, neither this associate nor Team One’s nominal leader could remember whether VRF attended the few meetings focused upon the Company’s internal data and mounting travails, and VRF repeatedly affirmed his ignorance regarding S&V’s investigation and representation of its longtime client.
In 2002, VRF left S&V and set out to represent defendants and plaintiffs in his area of special expertise: labor and employment law. In January 2004, a crew chief for the Affiliate called several law firms to discuss a dispute he had with his employer about overtime pay; only VRF’s new firm showed even a modicum of interest in his case, enough to set up an initial meeting for January 27, 2008. Apparently, only once VRF visited the Affiliate’s remodeled website after this meeting’s scheduling did he discover its affiliation with the Company. Still, ascribing little import to this fact, VRF opted to arrange a lunch with a recently retired S&V partner, one with an extensive knowledge of wage and hour law, on January 26, 2008. At this prandial colloquy, these two friends debated wage and hour law and an employer’s possible defenses, including the motor carrier exemption to the Fair Labor Standards Act (“FLSA”).[13] Upon meeting the crew chief and two of his colleagues on January 27, 2008, VRF agreed to serve as their lead counsel. Within two weeks, twenty employees, through VRF, filed a putative class action against the Company.
VRF’s prior association with S&V’s large stable of lawyers, however, had not yet ended. Instead, in March 2004, VRF received a brochure advertising a June wage and hour law forum. The proposed presenters included a former colleague with whom VRF was close—and S&V’s lead counsel for the Company and Affiliate in the crew chief’s just-filed suit. For an undisclosed reason, VRF spoke to the former, allegedly without soliciting any theories, opinions, or advice.
After the plaintiffs, through VRF, filed a motion for conditional certification of the action as a collective action in which S&V’s alleged advice prominently featured, the Company and Affiliate demanded VRF’s withdrawal. When he indignantly refused, these defendants sought his disqualification. The district court honored their plea in a decision unanimously affirmed on appeal.
A native of Minnesota, the young attorney, commonly known as “AJ,” established himself as a defense attorney with a nationwide practice in Chicago. From February 1998 through March 2017, he defended sundry debt collection agencies, credit furnishers, banks, credit card-based independent service providers and other businesses from “countless” class actions predicated on such federal statutes as the Fair Credit Reporting Act (“FCRA”), the Fair Debt Collection Practices Act (“FDCPA”), and the Telephone Consumer Protection Act (“TCPA”). As he did so, he rose from associate to partner at his first law firm before jumping ship to another shop, one with a similar repertoire of clients and hodgepodge of cases. Unexpectedly, after a single season’s tenure, this once rising defense star switched sides and joined a plaintiffs’ law firm with a thriving consumer practice in the fall of 2017. Invigorated by this change, he soon enrolled as counsel in a putative class action against BMS, one of the nation’s newer online-only banks, for various violations of the TCPA.
As soon emerged, both of AJ’s firms had previously represented BMS in similar cases, and AJ himself had previously dealt with BMS as an unofficially aligned defendant’s lead counsel. BMS had retained AJ’s first firm on seventy (70) matters, including consumer cases, and in several states, over the prior decade. Lessening the sting of this fact, BMS’ main contract sat in another office, and it used the firm’s Chicago-based attorneys, but not AJ, on only twelve analogous cases. Even so, as a brief investigation promptly revealed, AJ had represented one of BMS’ third-party debt collectors in 2012, regularly conferring with BMS’ internal counsel and technicians so as to craft an effective defense for his client and defending a BMS employee during one acrimonious deposition at its request due to his steady exposure to such closely-held knowledge. In addition, despite its brevity, AJ’s months at the second law firm featured his representation of another one of BMS’ contractors and, due to an indemnity provision, BMS itself. Although this relationship lacked any obvious personal depth or warmth, regular emails and calls between AJ and BMS hinted at more than a perfunctory association.
Having confirmed this fact, consternation seized BMS’ general counsel—and impelled him to place a short call to his company’s long-term outside counsel. Several weeks later, in accordance with BMS’ blunt request, its attorney had prepared a rather overlong motion to disqualify. Once provided a copy, AJ exploded. By phone and email, he angrily denied any knowledge of BMS’ internal procedures or confidential data. To a befuddled judge at an unrelated hearing, he defended his integrity and emphasized his unfamiliarity with his former employers’ BMS cases. Even as AJ thusly thundered, however, manic negotiations, once resisted by the determined plaintiffs, finally commenced. Months later, with little fanfare, the parties filed an agreed stipulation of dismissal with prejudice. Probably relieved at this motion’s submission, the seized jurist signed within the hour.
Within years of its emergence in the reign of England’s Edward I (1272-1307),[15] the medieval law of lawyering discerned a pressing need to sanction a cavalcade of conflicted counselors.[16] Over the next few centuries, two statutes—the Statute of Westminster I, Chapter 29 (1275) (“Chapter 29”),[17] and the Statute 4 Henry IV, Chapter 18 (1402) (“Chapter 18”)[18]—and an ordinance—the London Ordinance of 1280 (“1280 Ordinance”)[19]—provided the regulatory anchor for any judicial punishment of a lawyer deemed to be blithely indifferent to an apparent conflict of interest. The first fiduciary rule applicable specifically to lawyers, Chapter 29 specifically criminalized “ambidexterity,” then defined as the act of taking retainers from opposing sides in the same case,[20] as well as “deceit or collusion” of the court or a party at court.[21] A lawyer who perpetrated or consented to any such malevolence, Chapter 29 sternly promogulated, would be imprisoned for a year and a day and barred from further court appearances.[22] Adopted five years later, the 1280 Ordinance regulated admission to practice law in London’s courts and censured a variety of then-prevalent misdeeds, including ambidexterity.[23] “[P]erhaps the earliest antecedent of modern lawyer ethics codes,”[24] this detailed enactment explicitly expanded Chapter 29’s prohibition against taking money from both sides in litigation to include representations adverse to former client.[25] Although its language could also be read as authorizing punitive measures against ethically challenged lawyers, Chapter 18 chiefly focused on the admission of attorneys and on assuring their competence and integrity and never proved useful as a means of regulating conflicts of interest or other forms of lawyer misconduct.[26] Unwilling to limit themselves to these fonts of authority, royal and local courts insisted upon their intrinsic ability to discipline their own officers, including wayward counselors.[27] By Sir William Blackstone’s time, these customs and regulations had led to the propagation of binding ethical commands derived from the woeful tales of Simon of Cley and John of Mutford, of William of Wells and John of Upton.[28]
By operation of the same process execrated by a notoriously pragmatical jurist,[29] as medieval courts debated these and similar men’s misdeeds, some of their conclusions assumed the kingly guise of venerable obligations.[30] Some, like the rules regarding classic ambidexterity, quickly transformed into ironclad prohibitions whose contravention would henceforth merit swift and harsh castigation, while others endured as norms, often contractually and consensually imposed, for decades, if not centuries.[31] In time, at least a handful of the latter, such as the lawyer’s “fiduciary” relationship to a client, won first codification and then sanctification.[32] Ultimately, this haphazardly developed ethical paradigm migrated to Britain’s fledging American colonies. To this day, the influence of these old customs on the ethics of this nation’s legal establishment remains “ubiquitous,”[33] old and new schematics linked by the desire to protect clients from a lawyer’s “fraudulent and deceitful conduct.”[34] Crucially, despite these migrations and metamorphoses, one proscription traceable to Chapter 29—that on conflicts of interest—never lost its status as a most blameworthy form of misconduct within the law’s ethical canons.
Today, the authority of a federal court[35] to disqualify an attorney rests on three primary sources: (1) the rules of the particular federal district in which an attorney appears, if any; (2) the relevant jurisdiction’s ethical rules to the extent, if any, incorporated into these local codes; and (3) federal common law.[36] The first source—a district’s local rules—effectively compels courts to invoke the Model Rules,[37] which have now replaced the Canons of Professional Ethics (“Canons”).[38] Courts often consult a second source—the various states’ ethical rules—because many local rules’ explicitly assimilate state-based standards,[39] and any practicing lawyer, whether appearing in state or federal court, must be barred in the state in which he or she practices.[40] Apart from any such incorporation, two longstanding legal principles—first, “motions to disqualify are substantive motions affecting the rights of the parties”;[41] and second, “a federal court’s authority to regulate lawyer conduct in its own cases” arises “from its inherent power, not from a particular state rule”[42]—have long ensured the overall primacy of federal common law.[43] In fact, “[w]hether considered statutory or inherent in derivation,” federal courts have always possessed the broadly discretionary “power of erecting reasonable prophylactic rules to regulate perceived abuses by attorneys appearing before the[m],” including strictures as to disqualification,[44] assuming the prerequisites of due process are met.[45] In practice, since appellate courts “grant substantial deference to a district court in the interpretation and application of local district court rules,”[46] and three opinions by the Supreme Court—Firestone Tire & Rubber Co. v. Risjord;[47] Flanagan v. United States;[48] and Richardson-Merrell, Inc. v. Koller[49] (“Firestone Trilogy”)—circumscribed review of disqualification orders,[50] a trial court’s decision as to this volatile issue seldom suffers reversal, heightening the significance of its initial determination as to the necessity of a particular lawyer’s ouster to counsel and party.
For all this law’s variability, these disparate sources’ verifiable existence should not obscure two truths relevant to any disqualification motion’s appraisal. First, the extant federal standard is “informed by multiple sources, including state ethical rules.”[51] As such, although federal common law still independently supplies the regnant standard,[52] its juridical formulation almost perfectly echoes the Model Rules.[53] Tellingly, this strong correlation in elements and exposition has transformed into near perfect substantive congruence after the adoption of Model Rule 1.9 in certain jurisdictions, collapsing a once well-policed, if winding, doctrinal border.[54] Second, most states have chosen to incorporate the Model Rules into their own ethical compendiums.[55] Even where not, courts look upon the Model Rules and their drafters’ official comments as “instructive” when interpreting the relevant state’s “analogous” provisions.[56] Perhaps for these reasons, the federal judiciary still struggles with determining to what extent violations of ethical rules ought to be dispositive or even relevant in litigation,[57] still regularly frustrated at the “blurry” contours endemic within this “area of law and ethics.”[58]
If a party-litigant desires to bring the issue of conflict of interest or breach of an ethical duty to a court’s attention, a motion to disqualify is the axiomatic and principal method.[59] Procedurally, the filing of such an explosive application triggers a two-step process in which a court considers whether (1) an ethical violation has actually occurred and (2) disqualification is the appropriate remedy.[60] Even if a movant proves a decided violation, disqualification does not automatically follow under either federal law[61] or the Model Rules.[62] Instead, loath to wade into any ethically charged morass, courts only reluctantly levy this “drastic measure”[63] and evade both “speculation”[64] and treating disqualification as merely an anodyne form of punishment or discipline.[65] Due to this diffidence, judicial disfavor tends to greet these increasingly popular motions, especially if filed after the passing of an extended period or on the eve of trial.[66]
In this analytical battlefield, equally sacred precepts duel.[67] “[D]isqualification of counsel” may occasionally be “both legitimate and necessary,” critically essential for protecting the attorney–client relationship by preventing “the potential breach of . . . confidences.”[68] For this reason, “the threat or potential threat that confidences may be disclosed” can be “enough” to justify such a decision.[69] Yet, this selfsame medicine “serves to destroy a relationship by depriving a party of representation of their own choosing” and leads to inevitable postponements,[70] while “a litigant should not be permitted to utilize a disqualification issue as part of his [or her] trial strategy.”[71] After all, “a party is presumptively entitled to the counsel of his choice.”[72] Accordingly, such motions “must be viewed with extreme caution . . . , for their use can serve tactical or harassment purposes as opposed to the more righteous goal of protecting the attorney–client relationship.”[73] In general, the balance between these conflicting ends is a delicate one: while all reasonable doubts must be resolved in favor of disqualification,[74] the party seeking disqualification bears the heavy burden to conclusively demonstrate the facts which compel that end.[75] Distilled, this body of law impels a court to resolve a motion to disqualify by weighing “the need to maintain the highest standards of the [legal] profession,” “a client’s right to freely choose his counsel,” and “the public’s interest in the scrupulous administration of justice” upon some nontangible scale.[76]
As these admonitions suggest, “[d]isqualification questions are intensely fact-specific.”[77] This cautious methodology aligns with the general axiom that, “[w]hen dealing with ethical principles, . . . [courts] cannot paint with broad strokes.”[78] Because the situations subject to these commands “do not arise in a vacuum,”[79] the law’s “ethical rules should not be blindly applied without consideration of relative hardships.”[80] With disqualification in particular, “it is essential to approach such problems with a keen sense of practicality as well as a precise picture of the underlying facts,”[81] “painstaking analysis of the facts”[82] and a “cautious scrutiny”[83] demanded. In light of these factors, any decision to disqualify “may not be rested on mere speculation that a chain of events whose occurrence theoretically could lead counsel to act counter to his [or her] client’s interests might in fact occur.”[84] Rather, “some stronger objective indicator . . . than simple judicial intuition is needed,”[85] some certain proof that “the independent professional judgment of the lawyer is likely to be affected.”[86] Standing alone, even though a “lawyer’s duty of loyalty long has precluded the representation of conflicting interests”[87] and the assessment required for ruling upon disqualification motion cannot be made with “hair-splitting nicety,”[88] neither “judicial intuition”[89] nor “surmise”[90] suffice in light of “the ever-present threat of human cupidity in all the affairs of life”[91] and the undammed flood of disqualification motions first noticed in 1975.[92]
Over the last forty years, federal and state courts have recognized ten grounds for a counselor’s disqualification: (1) concurrent client conflicts of interest; (2) personal interest conflicts; (3) former client conflicts of interest; (4) receipt of confidential, privileged, or stolen information; (5) imputed misconduct, including conflicts of interest; (6) lawyers as witnesses; (7) contact with a represented party; (8) misconduct with witnesses; and (9) any unspecified misconduct deemed bothersome or troubling. The first three constitute the cynosure of conflicts jurisprudence, with both the fourth and fifth subsumed therein.[93] A tenth ground—(10) appearance of impropriety—has lost much of its efficacy in recent years, perhaps due to its absence from the Model Rules’ operative text.[94] Despite this official extirpation,[95] however, many tribunals consider themselves “entitled to consider the entire course of counsel’s conduct in applying the relevant rules of professional conduct” and thus treat “the appearance of impropriety . . . [as] an important consideration.”[96] To them, this amorphous notion remains crucial “to protecting the integrity of the judicial system,”[97] liable to reemerge in unexpected places[98] and trigger extended, if esoteric, exposition.[99] Practically speaking, none of the foregoing bases are mutually exclusive.[100] Certainly, in an evidentiary sense, the same facts can support more than one ground.[101]
In recent years, most cases in which conflicts have been found fall into two inexact categories. Generally, a cognizable conflict exists whenever “there is a significant risk that the representation . . . will be materially limited by the lawyer’s responsibilities to another client, a former client, or a third person.”[102] Cases within the first agglomeration suggest counsel’s inattentiveness or spotty due diligence, more often than not as to matters handled at the same firm long ago or work performed by laterals in the past and at other firms. This frequent inattentiveness leads to a corresponding failure to react promptly after the issue has become known. Not infrequently, this jurisprudence’s strict imputation rule[103] only exacerbates the consequences of this unhappy chain reaction.[104] The second common class encompasses cases in which courts exhibit unease, only occasionally fatal, with a single firm undertaking concurrent representation of multiple subsidiaries of a single corporate entity in separate cases. As one such court conceded, “modern business practices in this age of parent companies with worldwide subsidiaries, mergers and acquisitions” have made “this . . . issue one of great importance.”[105]
The types of conflicts confronted by courts in these cases can be placed into one of four categories: (1) positional conflicts; (2) concurrent client conflicts; (3) former client conflicts; and (4) prospective client conflicts. Rarely-deemed problematic outside of the criminal context,[106] a “positional conflict” arises whenever an attorney takes a formal position in a matter not involving a client that may nevertheless be contrary to a position deemed important to the client in other matters.[107] “Ordinarily,” however, “a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients” unless concrete and discernible harm can be shown.[108] Regnant everywhere but Texas, the rule applicable to “concurrent client conflicts” bars a lawyer from acting adversely to a current client on any matter.[109] Under the Model Rules, this prohibition is triggered whenever “there is a significant risk that the representation . . . will be materially limited by the lawyer’s responsibilities to another client, a former client, or a third person.”[110] Notably, as this doctrine derives from the duty of loyalty, its proponents[111] ascribe no relevance to whether the matters at hand are entirely unrelated to the work the lawyer is doing for the client and whether the representation involves no possible exploitation of a client’s confidence. Instead, “[e]ven though the simultaneous representations may have nothing in common, and there is no risk that confidences to which counsel is a party in the one case have any relation to the other matter, disqualification may nevertheless be required.”[112] With respect to former clients, based primarily on the duty of confidentiality and secondarily on the duty of loyalty, the prevailing rule discerns a conflict whenever a substantial relationship exists between matters or the attorney once enjoyed access to confidential information material to his or her current litigation. Prospective clients, i.e., persons who consult with an attorney about the possibility of forming a client-lawyer relationship but ultimately decide otherwise,[113] benefit from a similar, albeit more liberal, variant of this common law and regulatory decree.[114] Simply put, that attorney cannot “represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter,”[115] subject to exceptions specified in Model Rule 1.18(d).[116] To wit, “[r]ather than merely receive confidential information, as is necessary for disqualification in the former client context, . . . [a] lawyer must have received information that is ‘significantly harmful’ to . . . [a] former prospective client” to face the prospect of disqualification.[117]
The sixth, seventh, eighth, and ninth common bases for disqualification have yielded little doctrinal controversy.[118] According to a broad consensus, the prohibition on lawyers serving as both advocates and witnesses (#6) applies only to the extent that the attorney possesses otherwise unavailable testimony as to “an essential element” or qualifies as a “necessary witness.”[119] The no-contact rule’s adjudication (#7) requires little more than confirmation of a lawyer’s attempt to reach out to the opposing party or its employees.[120] Misconduct with witnesses (#8) includes an endless expanding catalogue of horrors, including promising monetary incentives or outright bribery, rarely tricky in application. The final catch-all category (#9)—“other misconduct”—can include bribery of jurors and even judges, its flexibility preventing its reduction into a workable standard. As to conflicts between a lawyer and a former client, however, two tests and two bases dominate most disqualification disputes.
Rooted in a lawyer’s duties of loyalty and confidentiality, and derived from the venerable T.C. Theatre Corp. v. Warner Bros. Pictures,[121] the “substantial relationship test” appears in Model Rule 1.9(a),[122] having been limned by several circuits as federal common law prior to its promulgation.[123] Distilled to its quiddity, this test grew from the broad desire to avert a lawyer from “switch[ing] sides in substantially related representations”[124] but serves at least three identifiable purposes: (1) preventing disclosure of client confidences, (2) protecting a client’s interest in the loyalty of counsel, and (3) preventing the “unsavory appearance of conflict of interest that is difficult to dispel in the eyes of the lay public—or for that matter—the bench and bar.”[125] In its most commonly utilized version, the substantial relationship approach pays heed to two elements.
Naturally, a movant must first prove the existence of an attorney–client relationship. Notably, such an association may be predicated on the performance of sundry types of legal work, including “the representation of a client in court proceedings, advice to a client, and any action on a client’s behalf that is connected with the law.”[126] With no formal contract required, “[t]he attorney–client relationship can be express or implied through formal or informal consent.”[127] In particular, a party establishes an implied attorney–client relationship if it shows that (1) it submitted confidential information to a lawyer and (2) that it did so with the reasonable belief that the lawyer was acting as the party’s attorney; the client’s belief is key.[128] Of course, a court can find an implied relationship after considering any number of other factors, such as the nature of the work performed, the circumstances in which confidential information was exchanged, and the attorney’s pattern of conduct.[129] By custom, no requirement for mutual consent yet exists.[130]
Next, the movant must show that the lawyer could have obtained confidential information in the first that would have been relevant in the second.[131] For purposes of this second factor, “[r]elevance must be gauged by the violations alleged in the complaint and an assessment of the evidence useful in establishing those allegations.”[132] In such cases, a court simply looks to whether “the potential avenues of proof,” rather than “the expected” ones, intersect for purposes of establishing any past communication’s instant relevance.[133] Thusly viewed, the rule “does not necessarily involve any inquiry into the imponderables involved in the degree of relationship between the two matters but instead involves a realistic appraisal of the possibility that confidences had been disclosed in the one matter which will be harmful to the client in the other.”[134] Logically and realistically, evidence establishing the likelihood that confidential information was once communicated satisfies both prerequisites of the substantial-relationship test.
Upon proving the foregoing elements, “a presumption arises that the lawyer received confidential information during his or her prior representation” in most circuits.[135] In fact, “[i]mplicit in a finding of substantial relationship is a presumption that particular individuals in a law firm freely share their client’s confidences with one another.”[136] Irrebuttable in certain circuits and per certain state codes,[137] this presumption may be negated in others if “the lawyer whose change of employment created the disqualification issue was not actually privy to any of the confidential information that his or her prior law firm received from the party now seeking disqualification of his or her present firm.”[138] As such, uncontroverted affidavits stating that other lawyers in the former firm entirely handled the firm’s representation or “clearly and effectively show[ing] that . . . [the relevant attorney] had no knowledge of the confidences and secrets of the client” will defeat the presumption.[139] In evaluating rebuttal evidence, courts commonly consider the size of the lawyer’s firm, his or her area of specialization and position within the firm, and the demeanor and credibility of witnesses at any evidentiary hearing held.[140] Assuming this test’s threshold is passed, “it is unnecessary for the movant to prove that the attorney in question actually received during the course of his former employment confidential information relevant to matters involved in the subsequent representation.”[141] A genuine threat, not even an actual materialized disclosure, satisfies its requirements.[142]
“[E]stablishing a substantial relationship between the attorney’s former and current representations is not the only way a former client can disqualify his former attorney.”[143] Instead, under Model Rule 1.9(c),[144] disqualification may be warranted if the former attorney actually possesses relevant confidential information, a scenario which threatens to undercut a lawyer’s equally sacred duty to protect client confidences.[145] Stated somewhat differently, “a lawyer representing a client in a matter may not use confidential client information if doing so will adversely affect a material interest of the former client, even though that matter is not substantially related to a former representation.”[146]
In these kinds of cases, this test both echoes and diverges from the substantial-relationship one. Unlike the latter, no rebuttable presupposition attaches, and the accused can only satisfy this touchstone by conclusively pointing to specific confidences related during the prior representation and how they could be used to the disadvantage of the accused in the subsequent representation.[147] Proof of “secrets gained in prior employment,” no more and no less, will be enough.[148] Arguably, in those circuits in which the mere possibility of confidential information’s transfer is insufficient to justify disqualification, the two tests have been merged into one.[149] Conversely, as with the substantial relationship test, a lawyer’s disqualification upon demonstration of actual confidences’ exchange leads to his or her current law firm’s ouster, one’s stigma sufficient to taint a firm in toto.[150]
Perhaps due to this issue’s fact-intensive focus, even cases ostensibly addressing one type of conflicts evidence similar defects. Seemingly, two reasons explain these weaknesses’ perpetration. First, ambiguity stubbornly clings to certain terms, inducing repeated denotational confusion and potentially explaining many inconsistencies. Second, how a court chooses to define a prior matter or honor corporate distinctions between subsidiaries can often be the product of happenstance than clear rules. Regardless of the test employed, the same four issues must be mastered by court and counsel whenever the possibility of disqualifications rears its ghoulish head.
Perhaps unsurprisingly, the question of whether representation of an entity amounts to representation of another of its parts (or vice versa) has occasionally proven wholly determinative. A “lawyer for an organization is not barred from accepting representation adverse to an affiliate in an unrelated matter,” the Model Rules proclaim, “unless the circumstances are such that the affiliate should also be considered a client of the lawyer, there is an understanding between the lawyer and the organizational client that the lawyer will avoid representation adverse to the client’s affiliates, or the lawyer’s obligations to either the organizational client or the new client are likely to limit materially the lawyer’s representation of the other client.”[151] With no other detail appended, the Model Rules effectively proffer only “limited guidance regarding when an attorney or firm that undisputedly has an attorney–client relationship with one entity . . . also has an attorney–client relationship with an affiliate of that” artificial person.[152] Conversely, one of the more comprehensive elaborations of this standard offered by a state bar enumerates several specific factors, but does so in an eminently equivocal fashion.[153] As a result, the factors stressed within the few cases bedeviled by this issue frequently vary, though the at least six—(1) whether the subsidiaries were “inextricably intertwined” with its parent company; (2) whether the parent controlled the legal affairs of the subsidiary; (3) whether the subsidiaries have similar management; (4) whether they share headquarters, corporate principals and business philosophy; (5) whether they have the same legal department; and (6) whether senior officers have the same titles in the different subsidiaries—reappear in case after case.[154] At present, “whether a lawyer represents a corporate affiliate of his client, for purposes of [Model] Rule 1.7, depends not upon any clear-cut per se rule but rather upon the particular circumstances” to which a court accords significance,[155] their hesitance amplified by today’s world of “national or multi-national public corporations owning or partially owning subsidiaries which may also be national or multi-national.”[156]
Problematically, no single definition of “confidential information,” a standard relevant to both tests, exists.[157] Certainly, the term is not coterminous with the more loaded phrase “privileged information,”[158] even if the former clearly subsumes the latter.[159] The Restatement, for one, broadly defines it to include “information relating to representation of a client, other than information that is generally known.”[160] It thus does not include data previously made available to the general public, such as information contained in court filings, documents previously produced in discovery in prior litigation, or readily available from corporate shareholder reports or websites.[161] At the same time, client information communicated from a client to an attorney is always “confidential” within the meaning of Model Rule 1.9(c) even “if otherwise disseminated or already in the public domain.”[162] To a limited extent, the definition utilized in the leading expert disqualification cases[163] can help in this lexicographical exercise.[164]
The assumption “that particular individuals in a law firm freely share their client’s confidences with one another” governs regardless of the test at issue.[165] This hoary presumption makes it “unnecessary . . . to prove that the attorney in question actually received during the course of his former employment confidential information relevant to matters involved in the subsequent representation.”[166] Instead, disqualification must follow if screening devices were not fully or timely employed;[167] at that point, only a truly insurmountable barrier to the passage of information, one whose erection predates the lawyer’s involvement, can save the law firm from this presumption’s operation.[168] In the absence of such institutional mechanisms, attorneys whose former law firms once represented their current opponents must be removed.[169]
“Disqualification does not necessarily require counsel to have previously represented the same entity.”[170] Instead, so long as a party submitted confidential information to a lawyer and did so with the reasonable belief that this attorney was acting on its behalf or to advance its interests in the course of a relationship marked by indicia of high trust, the requisite bond arose.[171] In these cases, “the deciding factor” is not what a contract said or a lawyer thought, then or now, but “what the prospective client [or party] thought when he[, she, or it] made the disclosure.”[172] A clear record that demonstrates “a longstanding series of interactions” between one or more attorneys and one or more former firms’ clients “which have more likely than not coalesced to create a basic understanding of [the objecting party’s] modus operandi, patterns of operations, decision-making process, and the like” will be enough to establish the kind of “fiduciary relationship” required for either test’s utilization.[173] The very existence of “a climate for the disclosure of relevant confidential information” will suffice,[174] the requisite “professional relationship . . . not dependent on the payment of fees nor . . . the execution of a formal contract.”[175]
Whatever the test employed, courts habitually pore over the same factors. Most will first analyze the movant’s: (1) standing to challenge the lawyer’s conduct; (2) diligence in bringing the motion; (3) knowledge of the circumstances; (4) fault or misconduct; (5) motive in bringing the motion; and (6) potential prejudice if the motion is denied.[176] They will then turn to the relevant lawyer’s: (1) knowledge about the conflict of interest or other misconduct; (2) motives; (3) ethical violation or appearance of impropriety; (4) violation’s severity; and (5) occasionally, potential prejudice (flowing to the lawyer or lawyer’s firm) should the court grant the disqualification motion.[177] In contrast to this panoply, the elements centering on a lawyer’s client, the very person who faces the loss of their chosen attorney, number two: the client’s (1) knowledge; and (2) even more critically, potential prejudice should the court grant the disqualification motion.[178] Despite their paucity, courts treat these two factors as decisive.[179] Finally, in many disqualification cases, courts examine various characteristics of the lawyer’s firm, mostly focusing on the effectiveness of the relevant firms’ screening mechanism. The features assessed in determining the necessity and/or effectiveness of any screen include both the past and present firms’ (1) size, (2) physical layout, (3) hierarchy or structure, (4) knowledge, and (5) devices themselves, including their timeliness, strength, and notice.[180]
Based on the foregoing, assuming an attorney–client relationship can be established,[181] an attorney striving to disqualify another per the substantial-relationship or confidential-information test faces a two-part challenge.
First, a close relationship akin to that between an attorney and a client must be established[182] by reliance on an endlessly variable menagerie.[183] In general, as noted above,[184] proof of “a climate for the disclosure of relevant confidential information” will prove enough.[185] Importantly, the finding of such “a professional relationship is not dependent on the payment of fees nor . . . the execution of a formal contract.”[186] Even adversity between the interests of current plaintiffs and a former aligned party, if represented by the same law firm, can be cited as support for the prior existence of a climate whereby relevant confidential information was probably disclosed so as to ensure plaintiffs’ effective representation.[187]
Second, the kind of representation must be precisely, yet vaguely, delineated. In general, a party seeking an attorney’s disqualification must show that the latter did not represent its current opponent “in a narrowly-defined, single-issue lawsuit or . . . simply assisted a client in settlement discussions in a small number of cases.”[188] As such, a record demonstrating “a longstanding series of interactions” between past counsel and a former client will easily satisfy either test’s predicate requirement.[189] Hence, if a former client can demonstrate that the relevant attorney’s extensive involvement in at least one case may have made him or her aware of its underlying problems or trial strategy, information that could bear on the present matter, it can satisfy its burden despite a law firm’s size, the limited exposure to internal data enjoyed by that attorney’s former office, and his or her own limited caseload.[190] This principle applies even if the attorney represented an aligned, yet separate, co-defendant[191] or obtained the information after the striking of a joint-defense agreement, whether formally or informally;[192] prior demonstrable involvement in a “joint venture” can serve.[193] In other words, the kind of relationship that yoked party and counselor, both “the nature of the work performed” and “the circumstances” which held when the relevant information was divulged, matter most,[194] its apparent depth more important than its demonstrable length.
Third, the general types of information that one or more of a client’s agents could have conveyed to that counselor or could have been discovered by the latter must be specified, e.g., tax information, financial data, corporate organizational formation, etc., and heir relevance to the pending litigation must be explained.[195] “[G]eneral knowledge of . . . [a] client’s policies and practices” will always be deemed irrelevant,[196] but not front-row access to a former client’s internal deliberation over “hot button issues,” including how it had structured its policies and procedures to comply with current (and still binding) law and minimize its liability;[197] knowledge of its private “business methods,” including “who in the company has what information;”[198] or any of “the particular practices and procedures which are the subject matter of [the pending] suit.”[199] More likely than not, possible access to the business strategies of a former client that might put the attorney in a position to acquire “knowledge casting light on the purpose of later acts and agreements” which underlie another action will be branded sufficiently confidential to trigger disqualification,[200] as would exposure to “domestic distribution strategies”[201] and even “knowledge of private matters gained in confidence” that could reasonably impart “greater insight and understanding of the significance of subsequent events in a . . . [similar] context and offer a promising source of discovery.”[202] Such evidence can prove the kind of substantial involvement essential to satisfying not just that test but also the confidential information one.[203] One need not be too specific—“the inquiry into the issues involved in the prior representation should be as specific as possible without revealing the confidential client information itself or confidential information concerning the second client”[204]—but must still adduce the general categories of data that were disseminated and explain their potential yet cognizable import.[205]
By raising the specter of disqualification in the midst of promotion practice, a lawyer unavoidably provokes drama and invites invective. In weighing the propriety of such loaded appeals, federal courts have turned to the ABA’s standards for proper conduct[206] but have also relied upon principles of trustee, fiduciary, and agency law.[207] Today’s resulting common law both pledges fealty to presumptions regarding “disclosed confidences” and “shared confidences” and pays heed to dissonant threads of ratiocination and policy. Perhaps as a result, beginning with 1953’s T.C. Theatre Corporation v. Warner Brothers Pictures,[208] confusion over the proper standard has only deepened. As large and small law firms consolidate into behemoths, lateral transfers multiply, and more lawyers enter (and depart) their government apprenticeships at a maddening clip, the resulting miasma is only more likely to confound those attempting to chart a path in accordance with this jurisprudence’s few identifiable stars. With disqualification such a potent tool for preserving a client’s hallowed confidences, no practicing lawyer can afford such ignorance, for although the power to disqualify “ought to be exercised with great caution”[209] and “restraint,”[210] disqualification is sometimes “necessary for the preservation of decorum and for the respectability of the profession” itself.[211] Else, nightmares do foretell, a poisoned stain will spread, further befouling an oft-damned profession in fact as in myth.[212]
[a]ll lawyers practicing before this court shall be governed by and shall comply with the specific rules of practice adopted by this court and, unless otherwise provided, with the Georgia Rules of Professional Conduct contained in the Rules and Regulations of the State Bar of Georgia and with the decisions of this court interpreting these rules and standards;
N.D. Ill. L.R. 83.50 (“[A] lawyer admitted to practice in Illinois is governed by the Illinois Rules of Professional Conduct” whenever the Model Rules are silent or are inconsistent with the latter code); Paul v. Judicial Watch, Inc., 571 F. Supp. 2d 17, 20 (D.D.C. 2008) (noting that “[f]ederal district courts usually adopt the Rules of Professional Conduct of the states where they are situated.” (quoting Cole v. Ruidoso Mun. Sch., 43 F.3d 1373, 1383 (10th Cir. 1994))). ↑
[a] lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.
Model Rules of Prof’l Conduct r. 1.9. In essence, “Rule 1.9 is merely a codification of the T.C. Theatre test.” Exterior Sys., Inc. v. Noble Composites, Inc., 175 F. Supp. 2d 1112, 1115 (N.D. Ind. 2001). Indeed, the only notable difference between the two standards is that the Model Rule adds a requirement that the former client had not consented. See Apeldyn Corp. v. Samsung Elecs. Co., 660 F. Supp. 2d 557, 561 (D. Del. 2009). However, because courts typically look to consent as a factor, this formal difference matters not at all in practice. See Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 228 (7th Cir. 1978) (discussing Canon 4); Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225, 230 (2d Cir. 1977) (considering consent of the client). ↑
[O]ur task is to concentrate on the factual contours of the transactions or matters at issue and to ask whether the lawyers would have or reasonably could have learned confidential information in their work . . . [for their previous client] that would be of significance in their representation of their present clients.
State ex rel. Ogden Newspapers, Inc. v. Wilkes, 482 S.E.2d 204, 208 (W. Va. 1996). ↑
[a] lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.
Model Rules of Prof’l Conduct r 1.9(c) (Am. Bar Ass’n 2017). ↑
[t]he Sixth Circuit applies a three-part test for attorney disqualification: (1) a past attorney-client relationship existed between the party seeking disqualification and the attorney it seeks to disqualify; (2) the subject matter of those relationships was substantially related; and (3) the attorney acquired confidential information from the party seeking disqualification.
125 F. Supp. 2d 219, 222 (W.D. Mich. 2000) (citing Dana Corp. v. Blue Cross & Blue Shield of N. Ohio, 900 F.2d 882, 889 (6th Cir. 1990))); Note, supra note 136, at 591–92 (discussing this approach). ↑
[c]onfidential information, in the context of expert disqualification, includes: ‘discussion of the [retaining party’s] strategies in the litigation, the kinds of expert [the party] expected to retain, [the party’s] views of the strengths and weaknesses of each side, the role of each of the [party’s] witnesses to be hired, and anticipated defenses.’
994 F. Supp. 244, 250 (D.N.J. 1997) (alterations in original) (quoting Koch Ref. Co. v. Jennifer L. Boudreaux MV, 85 F.3d 1178, 1182 (5th Cir. 1996)). ↑