Debevoise had represented MetLife in all nine lawsuits that were spurred by the conversion. Aside from the Eastern District litigation, only one other case remains pending in Supreme Court in Manhattan. The other seven suits have been dismissed.
In addition, Jacobs noted that the class waited roughly two years to bring its disqualification motion although Judge Platt two years earlier had rebuffed MetLife's efforts to shield documents from discovery on the ground of attorney-client privilege. In that ruling, Platt had rejected the privilege claim, finding that Debevoise had represented the policy holders prior to the conversion, 495 F. Supp. 2d 310 (2007).
Under those circumstances, Jacobs concluded, "plaintiffs have failed to establish the clear and convincing evidence of prejudice necessary to justify the extreme remedy of disqualification by imputation."
Under the New York Rules of Professional Conduct, a firm must be disqualified if any of its lawyers are "likely" to be called by an adversary "on a significant issue" and "it is apparent that the testimony may be prejudicial" to its client, Rule 3.7(b)(1).
TRIAL COURT'S LOGIC REJECTED
Judge Jacobs also rejected the class's effort to rely on Platt's holding in the 2007 discovery ruling that Debevoise had represented the policyholders prior to the conversion.
Judge Platt erred in reaching that conclusion, Jacobs wrote, because "it is well-settled that outside counsel to a corporation represents the corporation, not its shareholders or other constituents" (emphasis in the original).
New York case law, which controls the outcome, has viewed mutual companies as no different from corporations for purposes of defining who is the client in decisions dating back to 1888, Judge Jacobs observed.
In that regard, Jacobs quoted the New York Court of Appeals' 1888 ruling in Uhlman v. New York Life Insurance Co., 17 N.E. 365: a policyholder "even in a mutual company, [is] in no sense a partner of the corporation which issued the policy, and ...the relation between the policy holder and the company [is] one of contract, measured by the terms of the policy."
David S. Mandel, of Miami-based Mandel & Mandel, declined to comment for the class. The class is also represented by Jared Stamell of Stamell & Schager.
MetLife was represented by Theresa Wynn Roseborough and Duncan J. Logan of its in-house staff, and Michael B. Mukasey, Mary Jo White and Bruce E. Yannett of Debevoise.