Opinion
CASE NO. 5:20-CV-00470
2020-12-23
Ashley Nicole Miceli FLOWERS v. HEARD, MCELROY & VESTAL, L.L.C.
Allison Anne Jones, Pamela R. Jones, Downer Jones et al., Shreveport, LA, for Ashley Nicole Miceli Flowers. Elizabeth M. Carmody, Bernard S. Johnson, Cook Yancey et al., Shreveport, LA, for Heard McElroy & Vestal LLC.
Allison Anne Jones, Pamela R. Jones, Downer Jones et al., Shreveport, LA, for Ashley Nicole Miceli Flowers.
Elizabeth M. Carmody, Bernard S. Johnson, Cook Yancey et al., Shreveport, LA, for Heard McElroy & Vestal LLC.
MEMORANDUM ORDER
Karen L. Hayes, United States Magistrate Judge Before the undersigned magistrate judge, on reference from the District Court, is a motion to disqualify plaintiff's counsel [doc. # 7] filed by defendant Heard, McElroy & Vestal, L.L.C. The motion is opposed. For reasons assigned below, the motion is DENIED.
As this motion is not excepted within 28 U.S.C. § 636(b)(1)(A), nor dispositive of any claim on the merits within the meaning of Rule 72 of the Federal Rules of Civil Procedure, this order is issued under the authority thereof, and in accordance with the standing order of this court. Any appeal must be made to the district judge in accordance with Rule 72(a) and L.R. 74.1(W).
Background
On April 15, 2020, Ashley Nicole Miceli Flowers, through her attorneys of record, Allison Jones and Pamela Jones of the Downer, Jones, Marino, & Wilhite law firm (the "Downer Firm"), filed the instant suit against her former employer, Heard, McElroy & Vestal, L.L.C. ("HMV"). (Compl.). Flowers asserted gender-based claims for pay discrimination, failure to promote, disparate treatment, wage disparity, and retaliation under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq. ; and the Equal Pay Act, 29 U.S.C. §§ 201, et seq. Id. She also asserted a state law tort claim for defamation. Id. Flowers seeks compensatory damages, liquidated damages under the Equal Pay Act, plus punitive damages under 42 U.S.C. § 1981a. Id. She further requested declaratory and injunctive relief, costs, and attorneys’ fees. Id.
On May 21, 2020, HMV filed the instant motion to disqualify Allison Jones and the entire Downer Firm from representing plaintiff in this suit because in late 2014 and into early 2015, HMV briefly engaged Jones in a matter that it contends is substantially related to the claims made by Flowers in this suit. HMV also argues that because it likely intends to call Ms. Jones as a necessary witness, she is prohibited from acting as an advocate at the trial of this matter, pursuant to Rule 3.7(a) of the Louisiana Rules of Professional Conduct.
On June 22, 2020, plaintiff filed her opposition to the motion, wherein she emphasized that HMV had been well aware of Ms. Jones's representation of plaintiff for over two years, yet never complained about an alleged conflict of interest until now. [doc. # 13]. Plaintiff, via counsel, maintained that Jones's lone engagement to provide a seminar to HMV employees did not constitute a legal service such that there never was an attorney-client relationship between HMV and Jones. Id. Furthermore, HMV never provided any confidential information to Jones, or any information at all regarding its pay and promotion practices. Id. Jones asserted that any similarity between the subject of the seminar that she gave to HMV personnel in 2015 and the instant lawsuit is superficial, rather than "substantially" related. Id. Finally, Jones stated that she would not be a witness at trial because the instant lawsuit does not concern HMV policies that were taught to, and to be followed by "employees." Id. Rather, this suit focuses upon HMV's "decisionmakers," who were "members" of the firm. Id.
On July 6, 2020, defendant filed its reply brief. [doc. # 17]. Plaintiff filed a sur-reply brief on July 8, 2020. [doc. # 20].
On October 23, 2020, the undersigned set this matter for an evidentiary hearing for purposes of addressing the following issues: "the conflicting impressions between HMV principals and Ms. Jones regarding the scope of Ms. Jones's prior engagement by HMV, and the reason(s) for HMV's delay in bringing the conflict to Ms. Jones's attention." (Oct. 23, 2020, Order [doc. # 21]).
The court held the hearing on December 16, 2020, and received testimony from the following witnesses: Allison Jones, Robert L. Dean, Angela Phares, and Ashley Nicole Flowers. (Witness List [doc. # 28]). A lone exhibit was admitted into evidence: an invoice form Davidson, Jones, & Summers to Slattery Co., Inc. from December 2014. (Exhibit List [doc. # 29]). At the conclusion of the hearing, the court took the matter under advisement.
Plaintiff showed other exhibits to witnesses and the court at the hearing. However, she did not seek to admit them into evidence.
Disqualification Principles and Rules
Motions to disqualify counsel are substantive motions; thus, they are decided pursuant to federal law. F.D.I.C. v. U.S. Fire Ins. Co. , 50 F.3d 1304, 1311-12 (5th Cir. 1995). "Depriving a party of the right to be represented by the attorney of his or her choice is a penalty that must not be imposed without careful consideration." Id. The court can render a decision on disqualification "only after painstaking analysis of the facts and precise application of precedent." Brennan's, Inc. v. Brennan's Restaurants, Inc. , 590 F.2d 168, 174 (5th Cir. 1979). Courts must consider disqualification motions in the context of the "ethical rules announced by the national profession in the light of the public interest and the litigant's rights." FDIC, supra. (citation omitted).
In this district, the relevant ethical canons include "(1) the local rules for the Western District of Louisiana; (2) the American Bar Association's ("ABA's") Model Rules of Professional Conduct; (3) the ABA's Model Code of Professional Responsibility; and (4) the state rules of conduct." Horaist v. Doctor's Hosp. of Opelousas , 255 F.3d 261, 266 (5th Cir. 2001). Beyond the ethical precepts adopted by the profession, the court also must weigh the social interests at stake, including, "whether a conflict has (1) the appearance of impropriety in general, or (2) a possibility that a specific impropriety will occur, and (3) the likelihood of public suspicion from the impropriety outweighs any social interests which will be served by the lawyer's continued participation in the case." F.D.I.C., supra (citation omitted).
The Western District has adopted the Louisiana Rules of Professional Conduct as promulgated by the Louisiana Supreme Court. See LR 83.2.4W.
In addition to the rules of professional conduct, the Fifth Circuit employs the "substantial relationship" test, which provides that "[a] party seeking to disqualify opposing counsel on the ground of a former representation must establish two elements: 1) an actual attorney-client relationship between the moving party and the attorney he seeks to disqualify and 2) a substantial relationship between the subject matter of the former and present representations." In re Am. Airlines, Inc. , 972 F.2d at 614. The test is categorical in requiring disqualification once it is met. Id. "[T]he substantial relationship test is concerned with both a lawyer's duty of confidentiality and h[er] duty of loyalty to a former client." Perillo v. Johnson , 205 F.3d 775, 801 (5th Cir. 2000) (internal quotation marks and citation omitted) (emphasis added).
"The substantial relationship test, as applied in this circuit and elsewhere, does not have its source in disciplinary rules. To the contrary, the test was developed at common law." In re Am. Airlines, Inc. , 972 F.2d 605, 617 (5th Cir. 1992).
Once it is established that the prior matter is substantially related to the present matter, "the court will irrebuttably presume that relevant confidential information was disclosed during the former period of representation." Id. (citation omitted). Another irrebuttable presumption is that confidences obtained by an individual lawyer will be shared with other members of the firm. In re Am. Airlines, Inc., supra .
The Louisiana Rules of Professional Conduct provide that, "[a] lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules." LA. RULES OF PROF'L CONDUCT 1.8(B). Furthermore,
The ABA rule is all but identical to Louisiana's rule. See ABA Model Rules of Prof'l Conduct 1.8(B).
(a) 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.
* * *
(c) 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.
LA. RULES OF PROF'L CONDUCT 1.9.
The ABA rule is all but identical to Louisiana's rule. See ABA Model Rules of Prof'l Conduct 1.9.
The following facts are taken from the evidence submitted by the parties with their memoranda, plus testimony and the lone exhibit admitted into evidence at the hearing.
I. HMV's 2014-2015 Engagement of Ms. Jones
In December 2014 and January 2015, HMV's managing partner, Robert Dean, directed HMV's firm administrator, Angela Phares, to arrange a training session on illegal discrimination and harassment in the workplace for HMV members, managers, and all staff. (Robert Dean Declaration; Def. Reply Brief, Exh. [doc. # 17-1]). Dean testified at the hearing that the firm engaged Ms. Jones because it wanted someone to review the firm's policies and procedures on sexual harassment and discrimination and to make any suggestions or modifications that needed to be made. The firm also wanted her to conduct a training session of HMV's policies and procedures to communicate them to all personnel and to make sure that everyone understood them.
In his declaration, Dean stated that HMV engaged Ms. Jones because of her expertise in the field of employment law, and it was his understanding that she was acting as a lawyer by imparting legal assistance and advice to HMV. (Dean Decl.).
Because the matter was specialized, Mr. Dean wanted to have a lawyer conduct this exercise, preferably one who ordinarily handled plaintiffs’ cases. Dean, however, conceded that he was not involved with making the arrangements with Ms. Jones. Moreover, he never personally spoke with Ms. Jones. Apart from some emails between Ms. Phares and Ms. Jones, Dean was not aware of any communication from his firm to Ms. Jones explaining to her what the scope of her engagement was. On cross-examination, plaintiff's counsel showed Mr. Dean some emails from Ms. Phares to Ms. Jones. Upon review of the emails, Dean admitted that the emails did not reference anything besides training.
Dean further testified that he was not involved with the negotiation of Ms. Jones's rate. Ms. Jones never advised Mr. Dean that she was not acting as a lawyer in the work that she was performing. She also did not provide HMV with an engagement letter. According to Dean, Ms. Jones did not advise HMV that its policies and procedures were deficient.
Dean was shocked when he read the claims made by Flowers against HMV in this lawsuit because he thought that HMV had hired her to help review HMV's policies and procedures. The lawsuit, however, claimed that HMV's policies and procedures were inadequate, inappropriate, or even non-existent.
According to her declaration, in December 2014 and January 2015, HMV's administrator, Angela Phares, made arrangements with Allison A. Jones, a local attorney with a strong reputation in the field of discrimination and harassment, "to review HMV's policies and procedures in that area, to make suggestions concerning any changes, and to provide a training session for all personnel in both the Shreveport and Monroe offices. Ms. Jones agreed to do so, and billed the firm for her work, following the training sessions, in an amount that exceeded $5,000.00." (Angela Phares Declaration; Def. Reply Brief, Exh. [doc. # 17-2]).
At the hearing, however, Phares testified that her understanding regarding why HMV engaged Ms. Jones was so she could use her expertise in the area of employment law to make sure that HMV's personnel was trained with regard to discrimination and harassment. According to Phares, HMV agreed to pay Ms. Jones at her regular hourly rate as a lawyer. Jones ultimately billed HMV at an hourly rate of $365. Phares testified that she transmitted HMV's personnel policies and procedures to Ms. Jones. According to Phares, Jones never indicated that she would not be acting as a lawyer. She also never delivered an engagement letter.
Phares testified that all substantive communications with Ms. Jones were conducted via email. In a November 14, 2014, email, Phares confirmed with Jones that she had agreed to conduct sexual harassment training for the firm. The email did not discuss anything else regarding the scope of Jones's services. Two subsequent emails between Phares and Jones discussed the dates for the sexual harassment training. Phares confirmed at the hearing that the scope of Jones's engagement was for her to provide training, as discussed in the emails. Phares also believed that attorney, Price Barker, had reached out to Ms. Jones to facilitate the training.
Insofar as there is a conflict between the Dean and Phares's declarations and their testimony at the hearing, the court credits the latter.
According to both Dean and Phares:
Ms. Jones did not suggest any changes to the policies and procedures manual other than to incorporate a separate Sexual Harassment Policy statement into the manual in the section on Inappropriate
Workplace Conduct. She also suggested that we have each of the attendees at the session sign a copy of that Sexual Harassment Policy to document that it had been provided to them.
(Dean and Phares Decls.).
On January 8 and 9, 2015, Ms. Jones provided training to all personnel in HMV's Shreveport and Monroe offices. (Phares Decl.). Phares testified that the training sessions were held in Monroe and Shreveport – one for supervisory personnel and one for non-supervisory employees in each office. Jones prepared and delivered to the attendees a handout explaining how the policies and procedures worked, and discussed the law applicable to issues of discrimination and harassment in the workplace. Id.
Specifically, HMV's Employee Polices, Procedures & Benefits Manual states, in pertinent part, that "[p]romotions are based solely on merit." [doc. # 17-2, pg. 17]. Furthermore, "[a]ll decisions about hiring, promotion, compensation, training or other terms and conditions of employment are made without regard to race, creed, color, age, religion, gender, national origin, physical condition, veteran status or any other status protected by law. All job-related decisions will be based on objective criteria." Id. , pg. 18. Also, "[w]hile all forms of harassment are prohibited, it is the policy of HMV to emphasize that sexual harassment is specifically prohibited. Each partner/supervisor has a responsibility to maintain the workplace free of any form of sexual harassment." Id. , pg. 33.
The Manual further states that "[t]he Firm compensates according to skill, experience, responsibility, professional standing and the degree of effectiveness of performance. Each staff member's performance is carefully evaluated, and the rate of compensation is reviewed annually on a date set by the Firm." Id. , pg. 28. Employees are expected to "[a]void discussion of individual compensation with other HMV employees." Id.
Jones's presentation to HMV personnel was entitled Heard, McElroy, & Vestal Discrimination and Harassment Training, presented by Allison A. Jones, Davidson Jones & Summers, APLC. (M/Disqualification, Exh. 2). In her presentation to HMV personnel, Jones incorporated a true or false quiz, explained discrimination and harassment in layman's terms, and gave examples of factual scenarios that would constitute either discrimination or harassment based upon a protected characteristic. Id.
Davidson, Jones, & Summer was Ms. Jones's prior law firm.
In the introductory section of her presentation to HMV, Ms. Jones emphasized that, " The Firm wants to prevent both discrimination and harassment ." Id. She further informed the employees, again in boldfaced type, that "HMV values diversity and the uniqueness each person brings to the Firm. Valuing the differences that exist in all of us makes the Firm stronger. All decisions about hiring, promotion, compensation, training or other terms and conditions of employment are made without regard to ... gender ... or any other status ." Id.
Jones also advised supervisors that
[d]iscrimination and harassment cases can cost big money. Even if the person who sues doesn't win, the defending Firm still is going to have paid out a lot in legal fees by the time the case is over. That's why it is so important that everyone knows what discrimination and harassment mean ... For example, you can use your influence as a supervisor to get someone fired, or to prevent someone from getting hired, or to get someone
demoted. If you do any of those things because of one or more of those protected characteristics we discussed earlier -- race, color, religion, sex, national origin, age, disability -- the Firm is almost automatically going to be held liable for your illegal discrimination.
Id.
In an invoice dated February 5, 2015, that utilized a Davidson, Jones, & Summers letterhead, Ms. Jones charged HMV for her "Professional Services," associated with "Discrimination and Harassment Training." (M/Disqualification, Exh. 1). Ms. Jones billed HMV for three hours of her time for work on training materials, reviewing all polices of HMV, preparing materials, and preparing and revising PowerPoint. Id. She also billed four and one-half hours for preparing paperwork, conducting training, and presentation of the training. Id. Ultimately, Ms. Jones billed HMV for a total of 13.5 hours of her time, at a rate of $365.00 per hour, for a total of $4,927.50, plus $112.20 in travel expenses. Id.
In conjunction with her opposition brief, Ms. Jones submitted a declaration whereby she acknowledged that in late 2014, HMV asked her "to present a training seminar for laymen to its workforce on harassment and discrimination and the applicable provisions of HMV's employee handbook." (Allison Jones Declaration; Pl. Opp. Memo., Exh. [doc. # 13-1]). The subject matter of her seminar was workplace discrimination and harassment, with the focus on harassment. Id.
Prior to the seminar, HMV gave Jones a copy of the employee handbook and asked her to teach the handbook and the legal concepts it promoted in laymen terms. Id. Jones stated that she was "not asked to review HMV's employee handbook for purposes of providing any legal opinion on the wording, inclusion or omission of any policy or procedure." Id. Jones did not provide HMV members with an opinion regarding the employee handbook or any other employment policies or procedures. Id. Nonetheless, Jones incorporated excerpts from the HMV handbook into her presentation materials. Id.
Jones maintains that she provided no legal advice to HMV and received no confidential information; she simply presented a training seminar to HMV's workforce. Id. HMV did not provide Jones with any information concerning its pay policies or its policy and procedure for admission to membership in the limited liability company. Id. She also "never represented HMV in any administrative proceeding, legal conflict, or court case in any matter, much less an employment law matter." Id.
Jones testified at the hearing that she understood that HMV had asked her to conduct a sexual harassment training seminar for the firm's partners and staff. HMV provided Jones with two documents: its policies and procedures manual and its sexual harassment policy. No one at the firm ever provided Jones with any confidential information about any particular problem in the firm. Furthermore, Jones never spoke to Robert Dean about any of the training. Jones testified that she reviewed the policies and procedures manual only for purposes of incorporating the sexual harassment section and maybe one other equal employment section into the training materials. She added that she never made any recommendations with respect to policies and procedures. However, she did recommend to Ms. Phares that the firm have an acknowledgement in the personnel files that each employee had received a copy of the policies and procedures and that there was some record that employees and/or partners had attended the training seminar.
Jones testified that she did not seek a waiver of conflict from HMV before filing the EEOC charge on Ms. Flowers’ behalf. She added that she did not think a waiver was necessary because she had not represented HMV as a lawyer. Jones also testified that if HMV had sought her disqualification from the Schmidt case that she would have filed an opposition and abided by the court's ruling.
Jones further testified that the work she performed for HMV was "professional services," but not "legal services." Jones did not know whether the use of "professional services," on the invoice was intentional or not. She knew, however, that she was providing professional services for the purposes of sexual harassment training. Jones did not know whether her former firm of Davidson, Jones, and Summer routinely used the descriptive phrase, "professional services," on all of its bills. The $365 per hour rate that Jones billed the firm was the rate that she charged as a lawyer, as a consultant -- for any service that she rendered. The billing invoice reflected that HMV was enrolled as client number 1620.
The invoice from Davidson, Jones, & Summers to Slattery Co., Inc. also used the term, "Professional Services."
At the time that she was hired, Jones did not consider whether there was an attorney-client relationship between her and HMV. The only thing that she knew was that she had been asked to conduct sexual harassment training. Jones testified that it was always made clear to Ms. Phares that she was conducting a sexual harassment training only. Jones stated that she never communicated to anyone at HMV that she was not acting as a lawyer because she did not think that it ever was an issue. She thought that they always understood that she was conducting sexual harassment training. Insofar as Jones might have prepared a letter to define the scope of her engagement, she did not retain it.
II. The Flowers and Schmidt Representation
From January 2006 until her resignation on May 31, 2018, Ashley Nicole Miceli Flowers was employed by HMV as a certified public accountant. In June 2018, Allison Jones, an attorney retained by Flowers, wrote a letter to HMV "demand[ing]" that the firm cease and desist: 1) from using and opening Flowers’ former email address that was associated with the firm's domain name, and 2) making false, destructive, and defamatory statements about Flowers in the community. (June 28, 2018, Letter from A. Jones to HMV; Pl. Opp. Memo., Exh. A). Jones threatened to pursue all available legal remedies on Flowers’ behalf, in the event that HMV failed to meet this demand. Id.
Two months later, on, or about August 13, 2018, Flowers, with the assistance of Ms. Jones, filed a charge of sex discrimination against HMV with the Equal Employment Opportunity Commission ("EEOC"), alleging that
[t]hroughout the course of [her] employment [Flowers] experienced discrimination because of [her] gender. This discrimination includes, but is not limited to, disparate pay from [her] similarly situated male comparators, denial of promotions to partnership, all of which was because of her gender.
In addition, [she] was continually subjected to a hostile work environment due to [her] gender.
(EEOC charge and letter; Pl. Opp. Memo., Exhs. B & C).
Mr. Dean testified that he did not recall ever writing a letter to Ms. Jones advising her that HMV believed that she had a conflict of interest regarding the representation of Ms. Flowers.
Furthermore, during the early stages of Ms. Jones's representation of Flowers, HMV sued a former member of the firm, John C. Schmidt, and his business, John C. Schmidt CPA, L.L.C. (collectively, "Schmidt"), on the basis that Schmidt had violated provisions of the HMV operating agreement. See Heard, McElroy & Vestal, L.L.C. v. John C. Schmidt, et al. , No. 610,442-C (1st JDC La); (Decl. of Allison Jones; Pl. Opp. Mem., Exh.). Ms. Jones enrolled as counsel on behalf of Schmidt. Id. Mr. Dean testified that Schmidt violated HMV's policy and procedure manual by performing impermissible outside work. However, HMV never sought to disqualify Ms. Jones in that matter.
On October 22, 2018, Flowers, with Ms. Jones's assistance, amended her EEOC charge to add a retaliation claim. (Amend. EEOC charge and letter; Pl. Opp. Memo., Exh. C). Flowers alleged that after she filed her "complaint," HMV began contacting and visiting her customers and other professionals making false and defamatory statements against her, including that she and Schmidt had engaged in inappropriate conduct and that Flowers was not capable of handling the customers’ business. Id.
Ms. Jones forwarded a copy of the amended charge to counsel for HMV, and asked him to notify his client of same and to ensure that his client ceased and desisted from its retaliatory conduct. (Oct. 22, 2018, Letter from A. Jones to B. Johnson; Pl. Opp. Memo., Exh. C). By separate letter, Ms. Jones again advised counsel for HMV that she was representing Ms. Flowers, and "demand[ed]" that his client preserve all relevant evidence. (Oct. 22, 2018, Letter from A. Jones to B. Johnson; Pl. Opp. Memo., Exh. D).
On December 7, 2018, counsel for HMV confirmed that it would comply with the "litigation hold" demands in the Schmidt case and for purposes of the EEOC complaint. (Dec. 7, 2018, Letter from B. Johnson to A. Jones; Pl. Opp. Memo., Exh. D). The letter did not raise any conflict of interest issues. Id.
On April 10, 2019, HMV filed a second supplemental and amending petition in the Heard, McElroy & Vestal, L.L.C. v. John C. Schmidt, et al. matter to join Flowers and her business, Pelican Tax and Consulting, CPA, L.L.C., as additional defendants. (Jones Decl.). In August 2019, Jones enrolled as counsel on behalf of Flowers and her business. Id. Although HMV alleged that Flowers tried to solicit HMV clients away from the firm, HMV did not seek to disqualify Ms. Jones in that matter.
III. Allegations in the Present Suit
In the instant complaint, Allison Jones, acting on behalf of her client, Flowers, alleged that, despite eleven years of employment at HMV as a highly experienced manager, with a history of stellar performance, exemplary employment evaluations, and client revenue generation, Flowers was not nominated for partner. (Compl., ¶ 16). In the fall of 2017, HMV announced that three young men had been nominated for, and promoted to partner, despite the fact that they had less accounting experience than Flowers, less seniority at HMV, and less generation/production than Flowers. (Compl., ¶ 18).
Plaintiff contends that the mechanism by which a manager becomes a partner at HMV perpetuates sex discrimination because under the HMV Operating Agreement, a manager must be nominated by an existing partner to be considered for partnership. Id. , ¶ 26. In April 2014, only four out of HMV's sixteen active partners were female. See HMV Employee Policies, Procedures & Benefits Manual. (Def. Reply Brief [doc. # 17-2]). Plaintiff also decried the evaluation system, which is subject to vague or subjective criteria, and rests with the judgment of one or two persons to whom the other partners acquiesce. (Compl., ¶¶ 32-34).
As it relates to gender equity, Flowers further alleged that HMV failed to do any of the following:
• HMV has made no open commitment to gender equity.
• HMV does not track promotion and hiring decisions to ensure gender equity.
• HMV does not conduct regular compensation analyses to ensure that men and women are paid equally for equal work.
• HMV has not made managers responsible for ensuring that the women they supervise advance at the same rate as the men.
(Compl., ¶ 30).
According to the complaint, "HMV discriminated against Flowers in violation of Title VII by subjecting her to different treatment on the basis of her gender and engaged in intentional disparate treatment by maintaining policies and practices having an adverse disparate impact upon female employees. " Id. , ¶ 63 (emphasis added). Further, "HMV's conduct has been intentional, deliberate, willful, malicious, reckless, oppressive and conducted in callous disregard of the rights of Flowers, entitling Flowers to punitive damages." Id. , ¶ 59.
Analysis and Findings
I. There was not an Attorney-Client Relationship between HMV and Ms. Jones in 2014-2015
The existence of an attorney-client relationship is determined by reference to state law. Hopper v. Frank , 16 F.3d 92 (5th Cir. 1994). Under Louisiana law, the existence of an attorney-client relationship "turns largely on the client's subjective belief that it exists," but that belief must be reasonable under the circumstances. Carter v. Keil , No. 06-0335, 2006 WL 2193168, at *7 (W.D. La. June 30, 2006) (citations omitted). Thus, although the court gives "great deference to the client's subjective belief whether an attorney-client relationship exists ... the overarching question is whether there is a reasonable, objective basis to determine that an attorney-client relationship has formed." In re: Austin , 943 So.2d 341, 348 (La. 2006).
To help discern the existence of an attorney-client relationship, the Louisiana Supreme Court has looked to the Restatement, which provides that,
[a] relationship of client and lawyer arises when:
(1) a person manifests to a lawyer the person's intent that the lawyer provide legal services for the person; and either
(a) the lawyer manifests to the person consent to do so; or
(b) the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services ...
In re: Austin, supra (citing THE RESTATEMENT ( THIRD ) OF THE LAW GOVERNING LAWYERS § 14 (2000) ).
Dean testified at the hearing that the firm engaged Ms. Jones because it wanted someone to review the firm's policies and procedures on sexual harassment and discrimination and to make any suggestions or modifications that needed to be made. The firm also wanted Jones to conduct a training session of HMV's policies and procedures to communicate them to all personnel and to make sure that everyone understood them.
However, Dean never communicated directly with Jones. Furthermore, Phares testified that HMV engaged Jones so she could use her expertise in the area of employment law to make sure that HMV personnel were trained with regard to discrimination and harassment. In other words, HMV never actually told Jones that it wanted her to do anything other than teach a discrimination/harassment seminar to its personnel, using, at least in part, some of its own policies and procedures.
Although one of the stated purposes for the hearing was to learn why HMV waited almost two years before notifying Ms. Jones about her alleged conflict of interest, HMV never explained the reason for the delay. While HMV might not have been able to file a disqualification motion pertaining to the instant matter until after the instant suit was filed, no reason was proffered why the conflict was not raised and brought to Jones's attention earlier. It stands to reason that if HMV actually believed that it had an attorney-client relationship with Jones arising out of the 2014-2015 engagement, it would have raised the issue much earlier than it did. The fact that it did not raise the issue previously, undermines the vitality of its present argument.
Even if HMV subjectively believed that it had an attorney-client relationship with Ms. Jones in 2014-2015, that belief was not objectively reasonable when the only substantive communications that it conveyed to Ms. Jones was to the effect that HMV had engaged her for the purpose of conducting training seminars for its personnel. Furthermore, there is no evidence that Ms. Jones recommended any substantive changes to HMV's discrimination and harassment policies or otherwise issued HMV an opinion regarding the sufficiency of those policies. Rather, the only evidence presented was that she was engaged to provide a teaching seminar for HMV personnel. However, even the Administrative Office of the United States Courts does not consider teaching or lecturing by a judge to constitute the practice of law. See CODE OF CONDUCT FOR UNITED STATES JUDGES , CANON 4.
Furthermore, in Capacchione v. Charlotte-Mecklenburg Bd. of Educ. , the court held that no attorney-client relationship resulted from an educational seminar where no confidential information was exchanged. Capacchione v. Charlotte-Mecklenburg Bd. of Educ. , 9 F.Supp.2d 572, 581 (W.D. N.C. 1998). Likewise, here, there is no indication that HMV's policies and procedures on discrimination and harassment were confidential. To the contrary, they were filed in the court record in the Schmidt case.
Once it is determined that an attorney-client relationship existed, it is presumed that confidential information was disclosed. See In re Am. Airlines, Inc., supra. Here, however, the absence of any evidence that confidential information was disclosed further undermines a finding that there was an attorney-client relationship at all.
In sum, the court finds that HMV has failed to establish that it had an actual attorney-client relationship with Ms. Jones. In the absence of a prior attorney-client relationship by HMV with opposing counsel in this case, the court cannot reach the substantial-relationship prong of the disqualification analysis, which requires the court to compare the former representation with the present representation. Furthermore, consideration of the social interests at stake do not support disqualification where, as here, there was no prior attorney-client relationship. Rather, plaintiff's interest in retaining counsel of her choosing remains paramount. II. Waiver
Plaintiff contends that HMV waived disqualification by failing to raise the issue earlier. The Ninth Circuit has held that "[i]t is well settled that a former client who is entitled to object to an attorney representing an opposing party on the ground of conflict of interest but who knowingly refrains from asserting it promptly is deemed to have waived that right." Trust Corp. of Montana v. Piper Aircraft Corp. , 701 F.2d 85 (9th Cir. 1983). In Trust Corp. , the court found that plaintiff had waived its right to object to its former attorney's conflict of interest where it waited for two and one-half years after notice of the conflict before it lodged an objection and then filed a motion for disqualification. Id.
Similarly, the Fifth Circuit has recognized that
[t]he underlying rules relating to attorney conflicts of interest are designed to allay any apprehension a client may have in frank discussion of confidential information with his attorney. Public confidence in the privacy of this discussion should not be impaired where the former client, having every opportunity to do so, fails to object to a new relationship involving his former attorney, and where the unethical nature of the attorney's change of sides is not manifest but would need to be shown.
In re Yarn Processing Patent Validity Litig. , 530 F.2d 83 (5th Cir. 1976).
Accordingly, "[w]hen considering an equitable defense based on waiver, the Court considers when the movant learned of the conflict, why the delay occurred, whether the motion was delayed for tactical reasons, and whether disqualification would result in prejudice to the nonmoving party." Zichichi v. Jefferson Ambulatory Surgery Ctr., LLC , No. 07-2774, 2008 WL 2859232, at *6 (E.D. La. July 22, 2008) (citations omitted).
Applying the foregoing considerations here, the court finds that HMV learned of Ms. Jones's potential conflict by August 2018, when she filed the EEOC complaint on behalf of Flowers. While HMV might not have been able to file a motion for disqualification until this suit was filed, there was no reason why it could not have advised Jones of the potential conflict so that she could have sought a waiver or otherwise mitigated Flowers’ exposure to the cost of the potential conflict. There is no evidence that the delay was for tactical reasons. (Indeed, there was no explanation for the delay at all). However, it is clear that Ms. Flowers would suffer prejudice if Ms. Jones and her firm were disqualified from representing her in this matter. Ms. Jones testified that she was intimately familiar with the details of this case. Moreover, it would take a new attorney a significant amount of time to get up to speed in this case. Finally, Ms. Flowers already has expended between $50,000 to $150,000 on attorney fees in advancing this matter and defending the Schmidt case.
In sum, the court finds that HMV waived any alleged conflict of interest by Ms. Jones by waiting almost two years before raising an objection.
III. Lawyer as a Witness
HMV alternatively contends that under Rule 3.7(a) of the Louisiana Rules of Professional Conduct, Jones is ineligible to serve as an attorney at the trial in this matter because it intends to call her as a witness to show, inter alia , that it took its Title VII obligations seriously by engaging her to provide a training seminar to its personnel on discrimination and harassment.
The ABA's Model Rules of Professional Conduct provide, in pertinent part, that
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.
ABA MODEL RULES OF PROF'L CONDUCT 3.7( A ) (emphasis added).
Louisiana's rule is all but identical to the ABA rule. Compare La. Rules of Prof'l Conduct 3.7(a).
The foregoing rule is not implicated, however, unless the lawyer is "likely to be a necessary witness ... [i.e.] one whose testimony is relevant, material, and unobtainable elsewhere." Painter v. Suire , No. 12-0511, 2014 WL 3858510, at *2 (M.D. La. Aug. 5, 2014) (citation omitted). Likewise, if a lawyer's testimony is cumulative, then he or she is not a necessary witness. Horaist, supra .
In addition, the ABA's Model Code of Professional Responsibility states that,
(A) - If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue the representation in the trial, except that he may continue the representation and he or a lawyer in his firm may testify in the circumstances enumerated in DR 5-101(B) (1) through (4).
(B) - If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client.
ABA MODEL CODE OF PROFESSIONAL RESPONSIBILITY DR5-102.
Testimony is considered prejudicial if it is so adverse to the client's side that the client might have an interest in discrediting the testimony. Horaist, supra (addressing prejudice under former Rule 3.7(c) of the ABA and Louisiana rules of professional conduct) (citation omitted). Nevertheless, "when the attorney's participation as both lawyer and witness stands to prejudice only his own client, the opposing attorney should have no say in the matter." Horaist , 255 F.3d at 267.
Applying the foregoing considerations here, HMV has not established that Ms. Jones will be a necessary witness at trial. Certainly, Mr. Dean and Ms. Phares may testify about their engagement of Ms. Jones to provide a seminar for HMV's personnel. In other words, the testimony that HMV seeks to elicit from Ms. Jones is readily obtainable from another source. Furthermore, there is no indication that Ms. Jones's testimony will be prejudicial to her client, as contemplated by the ABA's Model Code of Professional Responsibility where, as here, the information is obtainable from another source. In any event, plaintiff herself is well aware of any potential prejudice that she may suffer as a result of Ms. Jones's continued representation and is in the best position to either insist on withdrawal or to waive the conflict.
In short, the various ethical standards do not require disqualification of plaintiff's counsel because of the possibility that she might be called a witness at trial. Moreover, defendant has not advanced any social interests that would compel a different outcome.
Conclusion
For the above-stated reasons,
IT IS ORDERED that the motion to disqualify counsel [doc. # 7] filed by defendant Heard, McElroy & Vestal, L.L.C. is hereby DENIED.