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Law Firms Denied Permission to Leave Sex Bias Suit
New York Law Journal
December 02, 2008
Two law firms defending an attorney accused of sexual harassment cannot withdraw as his counsel days before trial, a Manhattan judge has ruled.
Pennsylvania-based Stradley Ronon Stevens & Young is lead counsel and Patterson Belknap Webb & Tyler local counsel for Oppenheimer & Co. Inc. and its former in-house general counsel, Eric J. Shames, in an employment discrimination dispute brought by Irina Alter, who worked at the investment boutique as a paralegal from 2002 to 2003.
Noting in Alter v. Oppenheimer & Co. Inc., 121188/03, that Shames had raised "legitimate concerns" that allowing both firms' withdrawal would hamper his ability to defend himself, Acting Supreme Court Justice Judith J. Gische in Manhattan refused to disqualify Patterson Belknap or Stradley Ronon.
Neither firm has shown that the attorney-client relationship with Shames has been irrevocably broken or that it has become "unreasonably difficult" to carry out its employment effectively, the judge wrote and directed that the case be "restored ... to its rightful place on the trial calendar."
Alter began working at Oppenheimer in March 2002 as a paralegal under Shames' supervision. According to Alter's complaint, her former boss made "unwelcome sexual comments and inquiries" and engaged in "sexually oriented physical contact" with her, but ultimately fired her in September 2003 after discovering she was pregnant.
In December 2003, Alter sued Shames and Oppenheimer for sexual harassment and discrimination.
Two months later, Shames signed a joint representation letter sent to him by Patterson Belknap, which provided that if a conflict arose, the firm "would no longer represent" Oppenheimer and another company officer, but "could" continue to represent Shames.
While Shames left the company shortly after Alter initiated her action, Oppenheimer has paid its former employee's legal fees throughout the litigation, according to the decision.
Around April 2008, Oppenheimer and Alter reached a preliminary settlement agreement, which was finalized after the motion to withdraw was brought. Shames, on the other hand, failed to settle with the plaintiff.
With only four days to go before trial, Stradley Ronon and Patterson Belknap moved to withdraw as Shames' counsel.
STRAINED RELATIONSHIPS
Stradley Ronon maintained that its continued representation of Shames amounted to a conflict of interest in violation of Disciplinary Rule 5-105 of the Code of Professional Responsibility, which bars an attorney from continuing with a multiple representation if "the exercise of independent professional judgment on behalf of a client will be or is likely to be adversely affected by the lawyer's representation of another client, or if it would be likely to involve the lawyer in representing different interests."
"[A] trial attorney for Shames who also represents Oppenheimer may very well be faced with the prospect of defending Shames at the expense of Oppenheimer," Stradley Ronon wrote in a brief.
The firm further claimed that its relationship with Shames, who accused its attorneys of pressuring him to settle with Oppenheimer and fabricating conflicts of interest at the "eleventh hour" to serve their corporate "paying" client, had become increasingly "strained" and was "nothing short of dysfunctional."
Patterson Belknap, which sought to withdraw pursuant to DR-210, also argued that Shames' "baseless attacks" on its professional integrity and "manifest distrust" of the firm made it "unreasonably difficult" to represent him.
Moreover, as local counsel, the firm contended in court papers that its expected role at trial was to "serve as a base of operations and possibly conduct some ad hoc research."
"Our firm has virtually no knowledge of the claims, defenses or evidence in this case," Patterson Belknap wrote in arguing that its disqualification would not have a "material adverse effect" on Shames' interest.
Justice Gische disagreed.
Patterson Belknap's "role thus far as counsel has not been marginal or limited, as the firm now claims," the judge wrote.
Noting that the firm had assisted in opposing a prior "complicated" motion made by Alter for consolidation and previously stated that it would work closely with Stradley Ronon attorneys, if the Pennsylvania firm was admitted pro hac vice, the judge characterized Patterson Belknap's involvement as "important, if not pivotal in this case."
Addressing the conflict issue, the judge observed that "Oppenheimer is no longer a defendant in this action and has no role to play at trial other than to have its people testify truthfully as to relevant facts." Further, the letter of joint representation, provides that "in the event of a conflict PBWT cannot continue to represent Oppenheimer but it can continue to represent Shames," Gische wrote.
Neither Patterson Belknap nor Stradley Ronon "has shown that the attorney-client relationship with Shames is irrevocably broken or that it has become 'unreasonably difficult' for either firm to carry out its employment effectively," she added.
Finally, the judge concluded that Shames had "raised legitimate concerns" that he would suffer material adverse effects if she permitted the firms to withdraw "at this stage of the case."
Alter supported Stradley Ronon and Patterson Belknap's motions to withdraw.
Russell Bogart and Steven G. Storch of Storch Amini represent Alter. Bogart declined to comment on the decision.
Ellen M. Martin from Patterson Belknap declined to comment.
Shames could not be located for comment.
William E. Mahoney Jr. of Stradley Ronon did not return a call for comment.
