Summary
In Skidmore, the plaintiff sued his former employer for age discrimination, alleging in relevant part that one of the defendant's senior managers had said he wished to "lower the age of the sales force."
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99 Civ. 10525 (NRB)
May 11, 2001
OPINION AND ORDER
Plaintiff James Skidmore (hereinafter "plaintiff" or "Skidmore") has brought this suit against Warburg Dillon Read, his former employer, under the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq. Now pending is defendant's motion to disqualify plaintiff's counsel because of counsel's prior representation of an individual who is a witness in this matter. For the following reasons, the motion is denied.
FACTUAL BACKGROUND
A district court deciding a disqualification motion must give particularly detailed attention to the factual record. See United States Football League v. National Football League, 605 F. Supp. 1448, 1451 (S.D.N.Y. 1985). See also NCK Organization, Ltd. v. Bregman, 542 F.2d 128, 131 (2d Cir. 1976) ("[I]n this field of ethical judgments, turning as it does upon the precise activities of the lawyer vis-a-vis adverse clients, a detailed consideration of the record is in order."). Accordingly, we summarize the factual circumstances that gave rise to this motion.
From 1991 until his termination in May, 1998, Skidmore was employed by UBS Securities ("UBS") as a corporate bond salesman. Skidmore alleges that his termination by UBS after its merger with Swiss Bank Corporation in 1998 violated the ADEA. Plaintiff supports his charges of age discrimination with statistical and anecdotal evidence. For the purposes of this motion, however, we are primarily concerned with one specific allegation in plaintiff's complaint. Skidmore alleges that a senior manager at UBS, Robert Wolf, indicated that he sought to "lower the age of the sales force." The complaint states, at paragraph 15:
After a subsequent merger, the successor in interest to UBS is now Warburg Dillon Read, the named defendant.
Upon information and belief, Wolf was greatly concerned with what he perceived to be the high "average age" of the sales force in the Corporate Bond Department. Thus, for example, during the course of several manager's meetings in 1997 and 1998, Wolf stated that he intended to "lower the average age of the sales force."
At his deposition, Skidmore stated that he learned of these alleged statements from conversations with Hiram Matthews ("Matthews"), another corporate bond salesman. See Brickman Decl., Exh. B, at 128-29. Skidmore stated that Matthews, who sat near him when they were employed at UBS and with whom he had frequent and extended contact, mentioned Wolf's alleged comments several times, as late as in 1998. See id. Additionally, in response to defendant's interrogatories plaintiff stated that his sole source of knowledge underlying these allegations were the statements of Hiram Matthews. See Parella Decl., Exh. B, at 5-6.
When deposed, however, Matthews disputed every aspect of Skidmore's account. Matthews testified first that his recollection of Wolf's comments regarding age in the workforce differed from what is stated in the complaint; second, that the comments he did recall took place in 1996, not 1998; and third, asserted that he never discussed any such comments with Skidmore. See Parella Dec., Exh. C, at 67-69, 81-85.
The ethical question raised by this motion stems from the fact that plaintiff counsel's law firm, the Law Offices of Neal Brickman ("Brickman"), represented both Matthews and Skidmore in connection with their terminations from UBS. In May, 1998, Matthews contacted Brickman about representation in negotiating a severance package from UBS or, in the alternative, filing a contemplated age discrimination claim. See Brickman Decl., ¶¶ 4, 7. Shortly thereafter, Skidmore also contacted the Brickman firm about essentially the same representation — negotiation of a severance package, or the filing of an ADEA lawsuit. See id., ¶¶ 5, 7. On August 28, 1998, Matthews settled his potential ADEA claim with UBS, and Brickman's representation of Matthews was effectively finished. See id., ¶ 8. In contrast, Skidmore's claim did not settle and the instant lawsuit was filed in October, 1999. See id., ¶ 9.
DISCUSSION
A. Background Principles
As an initial matter, we note that in this Circuit motions to disqualify counsel have long been generally disfavored. See, e.g., Evans v. Artek Sys. Corp., 715 F.2d 788, 791-92 (2d Cir. 1983) (summarizing reasons why disqualification motions are in disfavor); Bennett Silvershein Assoc. v. Furman, 776 F. Supp. 80, 802 (2d Cir. 1991) ("The Second Circuit has indeed been loathe to separate a client from his chosen attorney. . . ." (citations omitted)) Disqualification motions are often made for tactical reasons, and thereby unduly interfere with a party's right to employ counsel of his choice. See Board of Educ. v. Nyquist, 590 F.2d 1241, 1246 (2d. Cir. 1979) (hereinafter "Nyquist"). "[E]ven when made with the best of faith," as we assume to be the case here, disqualification motions inevitably entail often-unnecessary delay. Government of India v. Cook Industries. Inc., 569 F.2d 737, 739 (2d Cir. 1978). Accordingly, these policy considerations create "particularly trenchant reason[s] for requiring a high standard of proof" from one who moves to disqualify counsel. Id.; see also Silvershein, 776 F. Supp. at 802 (collecting cases holding that the burden on a movant is quite high).
As an additional preliminary matter, we note that we look to the Model Code of Responsibility as promulgated by the American Bar Association (hereinafter "the Code"), and as adopted with slight modifications by the New York State Bar Association, as the most helpful sources of law in assessing the merits of this motion. However, in a technical sense the only truly binding authority on disqualification issues is Circuit precedent, because our authority to disqualify an attorney stems from the Court's inherent supervisory authority to "preserve the integrity of the adversary process. . . ." Nyquist, 590 F.2d at 1246. Thus, although the various ethical codes that have been promulgated are highly persuasive authority, see Gleason v. Zocco, 941 F. Supp. 32, 35 (S.D.N.Y. 1996), our decision must ultimately be guided by the goal of a trial process that lacks any hint of a taint. See Paretti v. Cavalier Label Co., 722 F. Supp. 985, 986 (S.D.N.Y. 1989) (holding that the Model Code does not have the force of law, but does "provide guidance on issues of professional conduct.").
B. Standing
One of the grounds for defendant's motion is that Brickman's continued representation of Skidmore violates Canon 4 of the Model Code of Professional Responsibility, which states that "A lawyer should preserve the confidences and secrets of a client." An attorney may be disqualified for a violation of Canon 4 if the three-part test established by the Court of Appeals in Evans v. Artek Sys. Corp., 715 F.2d 788, 791-92 (2d Cir. 1983) is satisfied. The first element of that inquiry requires that "the moving party is a former client of the adverse party's counsel." Fernandez v. City of New York, No. 99 Civ. 0777, 2000 WL 297175, *1, n. 1 (S.D.N.Y. March 21, 2000) (citing Evans, 715 F.2d at 791)
That test has its roots in Judge Weinfeld's "seminal" opinion inT.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265 (S.D.N.Y. 1953), which established the general rule that an attorney may only be disqualified in a later representation there exists a "substantial relationship" between the subject matter of the two representations. See Allegaert, 565 F.2d at 248, n. 3.
Plaintiff contends that because UBS is not a former client of the Brickman firm, UBS lacks standing to make the instant motion. The only proper movant for disqualification under Canon 4, plaintiff argues, would be Hiram Matthews.
This argument, however, is insufficient to defeat the motion. Ample precedent indicates that a party who is not part of the alleged conflict has standing to make a disqualification motion. See, e.g., Planning Control, Inc. v. MTS Group. Inc., No. 91 Civ. 2763, 1992 WL 51569, at *2 (S.D.N.Y. Mar. 11, 1992) (holding that a party, although not a former client, has standing to move to disqualify an attorney based on an alleged Canon 4 violation); Altschul v. Paine Webber, 488 F. Supp. 858, 860 n. 1 (S.D.N Y 1980) ("Competence to raise disqualification is not limited to former or aggrieved clients. Ethical misconduct is a matter of public concern implicating the integrity of the bar . . . (citations omitted)). Although this standing question has not been addressed directly by the Second Circuit, other circuits have found standing on the part of non-clients. See, e.g., Kevlik v. Goldstein, 724 F.2d 844 (1st Cir. 1984). Because our ultimate concern is with the integrity of the trial process, and our authority to disqualify an attorney stems from our supervisory power to maintain that integrity, we believe that a good-faith belief that an ethical violation exists should be brought to us by any party with the opportunity to observe such a possible lapse. We therefore reject the proposition that standing under Canon 4 is limited merely to an attorney's former clients.
Defendant makes much of a letter submitted by Hiram Matthew's new counsel in connection with this motion, which defendant portrays as supporting its position on this motion. See Parella Decl., Exh. D. Defendants go so far in their reply papers as stating that "Matthews joins in this motion and supports the relief sought by defendant." Def't. Reply Mem. at 5. This is a very generous reading of Matthew's counsel's letter, and one we decline to adopt. However, because we find UBS has standing to make the instant motion, we need not ascertain the legal significance of that letter.
C. Canon Four Claims
As discussed supra, Canon 4 embraces the requirement that an attorney not reveal his client's confidences, and, as noted, the Court of Appeals has established a test to adjudicate disqualification motions brought because of an alleged violation of this Canon. However, before that inquiry is implicated at all it must first be shown that "the attorney was in a position where he could have received information which his former client might reasonably have assumed the attorney would withhold from his present client." Allegaert v. Perot, 565 F.2d 246, 250 (2d Cir. 1977). The context of Brickman's representation of both Matthews and Skidmore in their age discrimination claims against UBS dictates that under the rule of Allegaert, disqualification is inappropriate here.
We first note that in a sworn declaration submitted in connection with this motion, attorney Neal Brickman stated that "I have never disclosed any confidences I received from Matthews. The allegations in this action are premised exclusively upon my discussions with Skidmore." Brickman Decl., ¶ 10 (emphasis in original). None of defendant's arguments cause us to question counsel's sworn representation to the Court.
However, even if facts learned as a result of the Matthews representation are being used in counsel's representation of Skidmore, we cannot say that under Allegaert this would violate Canon 4. It remains the case that Matthews retained Brickman's law firm in May, 1998, and shortly thereafter Skidmore retained the same firm, a fact of which Matthews was at the very least aware. It may even be the case that Matthews referred Skidmore to Brickman: Brickman's affirmation states this to be the case, see Brickman Decl., ¶ 5, while Matthew's deposition reflects a lack of memory on this point.
Matthews stated at his deposition that "The most I recall on that topic [of retaining counsell of discussions with Mr. Skidmore was sharing with him names of those who I plan[ned] to talk to. And likewise, he did the same, because neither one of us had a good feel for who we should retain." Brickman Decl., Exh. A, at 39.
Defendant argues that the Allegaert rule does not apply because Matthews and Skidmore did not consent to dual representation in a technical sense. It is apparent from the record that neither of the former UBS employees wanted such a relationship. However, whether or not Matthews and Skidmore technically consented to dual representation, the facts remain that: (1) Brickman represented the two clients against the same defendant, (2) each client's claims were ADEA claims arising out of contemporaneous terminations after the same corporate merger, (3) each client worked in the same (relatively small) department at UBS, and (4) each client was aware that the other was being represented by the same counsel for a period of months (until Matthews settled his case). It would be unreasonable for neither Matthews nor Skidmore to assume that their shared counsel did not learn facts about the context of the Warburg Dillon Read/Swiss Bank Corp. merger in one client's case that would prove useful in the other case.
Given these circumstances, and the harshness of the disqualification remedy, defendant's motion on these grounds is denied.
D. Canon Five Claims
Defendant also moves for disqualification based on an alleged violation of Canon 5 of the Model Code. That ethical guide is codified in the New York Code of Professional Responsibility as DR 5-108(a)(1):
[A] lawyer who has represented a client in a matter shall not, without the consent of the former client after full disclosure:
(1) Thereafter represent another person in the same or a substantially related matter in which that person's are materially adverse to the interests of the former client.
Defendant also makes an argument regarding breach of confidentiality based on the second subsection of this provision, not quoted here. However, there is no significant difference between that argument and the Canon 4 argument discussed supra.
It seems apparent that the two representations at issue here are "substantially related" for the purposes of this analysis. See Fernandez, 2000 WL 297175, at *2. However, Brickman's representation of Skidmore can not be considered "materially adverse" to Matthews under any possible interpretation of that term. Matthews's settlement with UBS has long been completed, and no argument has been made that any aspect of the ongoing Skidmore litigation can harm the resolution of Matthews's case in any way.
The sole support for an argument that this representation is "materially adverse" to Matthew's interests is the assertion that if this matter goes to trial, Brickman will need to cross-examine Matthews. If Matthews's trial testimony is consistent with his deposition testimony, then it is indeed likely that Brickman would attempt to impeach Matthews's credibility. This may be embarassing to Matthews; it may even be unseemly to treat a former client as a hostile witness. However, there is no tangible prejudice that would result, and an "appearance of impropriety is simply too slender a reed on which to rest a disqualification order except in the rarest cases." Nyguist, 590 F.2d at 1247. Thus, defendant's motion is denied on these grounds as well.
CONCLUSION
For the foregoing reasons, defendant's motion to denied. A pre-trial conference is scheduled in this matter on May 23, 2001 at 3:00 p.m. in courtroom 21A. The parties are directed to confer prior to that conference and to attempt to establish a timely schedule for the remainder of discovery in this case.