Opinion
No. IP 98-0687-C-T/G.
May 5, 1999
John H. Haskin, Craig Wiley, Haskin Lauter Cohen Larue, Indianapolis, IN, for plaintiff.
Pamela V. Keller, Ice Miller Donadio Ryan, Indianapolis, IN, for defendants.
Entry On Motion to Disqualify Defense Counsel
The Plaintiff Robert D. Speedy filed a Motion to Disqualify Defense Counsel, seeking to disqualify the Defendant's law firm, Ice Miller Donadio Ryan ("IMDR"), from this matter because Bradley J. Wilson, an attorney previously associated with the Plaintiffs counsel's law firm, is now associated with IMDR. The Defendant filed its Brief in Opposition to Plaintiffs Motion to Disqualify Defense Counsel on April 28, 1999, with the affidavits of Bradley Wilson, Michael D. Marine, and Pamela V. Keller.
The Plaintiff moves to disqualify IMDR pursuant to Rule 1.10(a) and (b) of the Rules of Professional Conduct adopted by the Indiana Supreme Court, contending that the rule is one of "imputed disqualification" which requires no showing of bad faith and operates to avoid the appearance of impropriety. He asserts that Attorney Bradley J. Wilson was a former associate with the law firm of Haskin Lauter Cohen LaRue (the "Haskin firm"), which represents the Plaintiff in the instant action; that Wilson had worked on the instant case since August 1998; and that Wilson left the Haskin firm to join the labor and employment department of IMDR. The Plaintiff argues that under Rule 1.10 Attorney Wilson would be prohibited from representing the Defendant in this case and, therefore, IMDR may not represent the Defendant in this matter.
The Rule provides:
(a) While lawyers are associated in a firm, none of them shall represent a client if he knows or should know in the exercise of reasonable care and diligence that any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.8(k), 1.9, or 2.2.
(b) When a lawyer becomes associated with a firm, the firm may not represent a person in the same or a substantially related matter if it knows or reasonably should kno w that that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(b) that is material to the matter.
As the Defendant contends, the Seventh Circuit has recognized that the imputed disqualification of a law firm may be rebutted by implementation of "specific institutional mechanisms" which prevent the flow of confidences from a "tainted" attorney to his new law firm. See Cromley v. Board of Educ. of Lockport Twnshp. High Sch., 17 F.3d 1059, 1065 (7th Cir. 1994). Courts in the Seventh Circuit should apply a three-part test when determining whether an attorney should be disqualified. See Cromley, 17 F.3d at 1064. The court must first determine "whether a substantial relationship exists between the subject matter of the prior and present representations." Id. If so, then it must determine "whether the presumption of shared confidences with respect to the prior representation has been rebutted." Id. If this presumption has not been rebutted, then the court must determine "whether the presumption of shared confidences has been rebutted with respect to the present representation." Id. Disqualification is appropriate if this second presumption is not rebutted. See id.; see also LaSalle Nat'l Bank v. Lake County, 703 F.2d 252, 255-56 (7th Cir. 1983).
For purposes of this motion the court assumes that the first and second parts of the Cromley test have been satisfied and considers whether the presumption of shared confidences has been rebutted with respect to the present representation. This presumption can be rebutted by a demonstration "that `specific institutional mechanisms' (e.g., `Chinese Walls') had been implemented to effectively insulate against any flow of confidential information from the `infected' attorney to any other member of his present firm." Cromley, 17 F.3d at 1065. Types of institutional mechanisms that have been found to be sufficient for this purpose are:
(1) instructions, given to all members of the new firm, of the attorney's recusal and of the ban on exchange of information; (2) prohibited access to the files and other information on the case; (3) locked case files with keys distributed to a select few; (4) secret codes necessary to access pertinent information on electronic hardware; and (5) prohibited sharing in the fees derived from such litigation.Id.; see also LaSalle Nat'l Bank, 703 F.2d at 259 (describing other approved screening mechanisms). Such mechanisms must be employed "as soon as the `disqualifying event occurred.'" Id.
In moving for IMDR's disqualification the Plaintiff erroneously relies on Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir. 1983). There, the Seventh Circuit held that the presumption of shared confidences was irrebuttable when an entire law firm changed sides. Analytica, 708 F.2d at 1267. The court rejected a per se rule of disqualification, recognizing that an individual attorney who moves to the firm retained by an adversary could "avoid disqualification by showing that effective measures were taken to prevent confidences from being received by whichever lawyers in the new firm are handling the new matter." Id. at 1266. In this case only one attorney, Bradley Wilson, has changed firms; thus, Analytica is not controlling. See Cromley, 17 F.3d at 1065 n. 3.
The Defendant has rebutted the presumption of shared confidences in the instant case by proving, through the sworn af fidavits of Attorneys Wilson, Marine, and Keller, that effective screening procedures were timely employed and fully implemented. See Cromley, 17 F.3d at 1065 (stating "Uncontroverted affidavits are sufficient rebuttal evidence.") On March 24, 1999, before Attorney Wilson joined IMDR on March 29, 1999, IMDR's Special Counsel, Art Kalleres, sent every member of IMDR an electronic message, entitled "Conflicts Screening System for Bradley Wilson." (Marine Aff. ¶¶ 5, 6 Ex. A; Keller Aff. ¶¶ 5, 6, Ex. A.) The message advised of Wilson's employment and explained the procedures to be followed to prevent the disclosure of any client confidences relating to Wilson's prior representation. (Id., Ex. A.) All members of IMDR were directed to "strictly observe" the screening system; not to discuss with Wilson any matter in which the Haskin firm is involved, regardless of whether Wilson had been personally involved in the case while at the Haskin firm; and not to discuss in Wilson's presence anything related to any case involving the Haskin firm. (Id.) Kalleres instructed that Wilson was not to discuss, be involved with, or have access to any information relating to any matter that is or was handled by the Haskin firm. All files involving matters in which the Haskin firm is or was involved were to be maintained in a confidential manner. Such files were to be placed in a file cabinet at the end of each day, Wilson was not allowed access to any information in such files, and the persons working on such files were to take steps to ensure against inadvertent disclosure to Wilson. (Id.) The message directed that all persons were to comply with Indiana Rules of Professional Conduct, particularly Rules 1.9 and 1.10.(Id.)
The IMDR attorneys personally representing the Defendant in this case, Attorneys Marine and Keller reviewed the message from Special Counsel Kalleres. (Marine Aff. ¶ 4; Keller Aff. ¶ 4.) They have abided by all of the mechanisms established by IMDR to screen Attorney Wilson. (Marine Aff. ¶¶ 5-9; Keller Aff. ¶¶ 5-10.)
In addition, on his first day of employment with IMDR, Attorney Wilson was advised of and agreed to follow IMDR's mechanisms implemented to screen him from cases involving the Haskin firm. (Wilson Aff. ¶¶ 5-9.) He has fully complied with these mechanisms. (Id. ¶ 16.) No member of IMDR has discussed with him any matter relating to the Haskin firm; (id. ¶ 12); no discussions relating to any case in which the Haskin firm is involved have taken place in his presence; (id. ¶ 13); he has had no access to any files involving the Haskin firm; (id. ¶ 14); and he has not been involved with or had access to any information relating to any matter handled by the Haskin firm. (Id. ¶ 15.) Wilson also has been and is denied access to computerized files and folders on IMDR's computer system which were generated by the labor and litigation sections, unless Byron Myers, a partner in the labor section, or Phil Whistler, a partner in the litigation section, first determines that Wilson may have access in accordance with the "Conflicts Screening System." (Id. ¶ 10.) Because Attorney Wilson is paid on salary, he does not directly receive any fees derived from this case. (Id. ¶ 11.)
Assuming that while employed with the Haskin firm Attorney Wilson gained any of the Plaintiffs confidences, IMDR timely implemented institutional mechanisms that effectively shield any flow of that information from Attorney Wilson to any other member of IMDR (and effectively shield any flow of confidential information gained through IMDR's representation of the Defendant in this case to Attorney Wilson). Thus, the presumption of shared confidences with respect to IMDR's present representation of the Defendant has been rebutted. The Plaintiffs motion to disqualify counsel is DENIED.