Moving swiftly, a two-judge panel of the 2nd U.S. Circuit Court of Appeals on Thursday heard an appeal of an order issued on the eve of trial disqualifying Debevoise & Plimpton as counsel for MetLife in an $8 billion class action.
Eastern District of New York Judge Thomas C. Platt on Tuesday issued the order disqualifying Debevoise, which represented MetLife during its conversion in 2000 from a mutual company to a publicly traded stock company, and has handled litigation arising from the conversion ever since.
Jury selection in In re MetLife Demutualization, 00 cv 2258, had been scheduled to start next Tuesday. But the panel Thursday, after a half-hour argument, gave lawyers for the 8.6 million holders of MetLife policies before the conversion until noon on Sept. 11 to file a more thoroughly prepared brief.
John Calagna, a spokesman for MetLife, stated in an e-mail that the company expects the disqualification issue "to be decided in its favor on appeal, so that the case can proceed promptly to trial." Neither the company nor Debevoise will have any further comment because the litigation is pending, the statement advised.
MetLife filed a 21-page brief appealing Platt's one-sentence Tuesday ruling before the start of the next work day. The lawyer for the class who argued the appeal, Jared B. Stamell, said in an interview that his firm, Stamell & Schager, had filed a brief with the circuit on only four hours' notice.
Under the schedule set by 2nd Circuit Judges Jose A. Cabranes and Peter W. Hall, the start of the trial will be pushed back at least one week until the court considers MetLife's reply briefs, which must be filed by 3 p.m. on Monday, Sept. 14. The third member of the panel, Judge Guido Calabresi, recused himself.
In disqualifying Debevoise, Platt agreed with the class's arguments that the firm had an impermissible dual representation because it was counsel to MetLife and the policyholders prior to the conversion, but afterwards, when the two became adversaries, it continued to represent MetLife.
The class also contended that disqualification was required because the class had listed four Debevoise lawyers, three of whom had worked on the conversion litigation, as possible witnesses.
Debevoise has been MetLife's counsel for more than nine years. It has handled nine lawsuits raising claims arising from the conversion. Seven of those lawsuits have been dismissed. Aside from the case before Platt, there is one other suit that raises claims based on violations of New York state insurance law, rather than federal securities laws, and is pending in state court in Manhattan. None of the plaintiffs in those suits had sought Debevoise's dismissal.
At Thursday's argument, Judge Hall pressed MetLife's senior litigation trial counsel, Teresa Wynn Rosenborough, who argued the appeal, with regard to the "lawyers-as-witnesses" argument.
Hall queried whether there is any case law permitting MetLife to waive any potential conflict that might arise during the Debevoise's lawyers' testimony.
Rosenborough parried the question by saying that there is "no likelihood" that any of the potential Debevoise witnesses would deliver testimony damaging to MetLife, but if the lawyers were "compromised" during trial, the problem could be "dealt with then."
That approach, Hall noted, might put attorneys "in a position where they would have problems with the disciplinary committee."