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The federal judge in Washington overseeing the Department of Justice’s litigation against cigarette makers has issued a blistering opinion disqualifying a former government lawyer and his present law firm, New York’s Shearman & Sterling, for running afoul of “revolving door” ethical restrictions. U.S. District Court Judge Gladys Kessler had particularly harsh words for Shearman’s request for discovery relating to the disqualification motion. “These flagrant violations of the Federal Rules, this Court’s Local Rules, and this Court’s Case Management Orders — to say nothing of common courtesy and civility — is astounding,” she wrote. Shearman & Sterling was retained in October 2003 by British American Tobacco Australia Services Ltd., the Australian subsidiary of the British American Tobacco Co., one of the defendants in the federal government’s suit to recover the costs of public health-care expenditures on tobacco-related illnesses. The government had been litigating to compel the production of documents in the subsidiary’s possession that the parent company had claimed were privileged. Neil H. Koslowe, a counsel in Shearman’s Washington office, headed the representation. Before joining the firm in 2001, Koslowe had been a lawyer with the Justice Department for 28 years. For 22 of those years, he had been a special litigation counsel with the federal programs branch of the Civil Division. Justice Department lawyers wrote to Koslowe last December informing him of their intent to move the court to disqualify him. The government cited as grounds for Koslowe’s disqualification his 1995 assignment to assist the Food & Drug Administration and the Department of Health & Human Services in devising federal rules giving the FDA jurisdiction over the tobacco industry. The FDA rule-making was subsequently challenged in a series of suits by cigarette companies, and contemporary time records submitted by Koslowe indicated he devoted 382 hours to work on this litigation. According to Rule 1.11, the D.C. rule of professional conduct addressing the “revolving door” between government and private practice, a lawyer cannot take on a matter “which is the same as, or substantially related to, a matter in which the counsel participated personally and substantially as a public official or employee.” A litigation would be considered a “matter” under the rule though an administrative rule-making would not. Koslowe, represented by Shearman partner Stephen Marzen, refused to withdraw from the case. He responded to the government’s letter and a subsequent disqualification motion by first requesting documentation of his tobacco-related work at the Justice Department and issuing on Feb. 4 subpoenas to four government lawyers who also worked on the FDA litigation directing their attendance at depositions on Feb. 9 and Feb. 10. Koslowe claimed that deposing the other attorneys would demonstrate he did not actively participate in the FDA litigation. He said he had listed the litigation on his time records for purely administrative reasons, even though he had only advised on the rule-making. But Judge Kessler quashed Koslowe’s subpoenas and castigated the firm for “engaging in a diversionary fishing expedition based on sheer speculation.” She said the subpoenas had been improperly served, provided the parties with insufficient notice and violated her previous order that witness depositions held after July 1, 2002, required leave from the court. In ruling to disqualify Koslowe, the judge said she found it difficult to credit his explanation for the 382 hours. “After 28 years of working at the Department of Justice, it is hard to believe that Mr. Koslowe would not know how to accurately fill out a time sheet and allocate hours to the proper descriptive activity,” the judge wrote. BASIS FOR DISQUALIFICATION Citing records redacted from the published opinion, Kessler found that Koslowe had been assigned to the FDA specifically to advise the agency on litigation risks arising from its rule-making. She also noted that close questions in such matters should be decided with an eye to avoid any appearance of impropriety, with any doubts resulting in disqualification. But there were no such doubts in this case, said Kessler. “Mr. Koslowe spent 382 hours working on a ‘matter’ which was substantially related to the issues he would be handling in the BATAS privilege litigation,” she wrote, referring to British American Tobacco Australia Services. “By his own admission, he had sustained access to many confidential and privileged government documents. This is precisely the scenario addressed by D.C. Rule 1.11.” The judge imputed Koslowe’s disqualification to Shearman, noting that the firm had taken no steps to screen Koslowe from any participation in the British American litigation. In a statement responding to Kessler’s decision, Shearman & Sterling said, “We respectfully disagree with the Court’s ruling. We continue to believe that Mr. Koslowe’s limited representation of a non-party in discovery matters in this case was consistent with the rules of ethics. We further believe disqualification of the firm is unwarranted.” SWITCHING SIDES Law firms’ growing appetite for hiring government lawyers and other officials has raised concerns in the past. In January, White House Medicare advisor Thomas A. Scully drew criticism for joining Atlanta’s Alston & Bird as a senior counsel in the firm’s health care practice. Scully had obtained an ethics waiver from the Health and Human Services Department allowing him to negotiate his new job while working for the government. The White House ordered agencies to stop issuing such waivers shortly after Scully’s departure. Thomas D. Morgan, a professor of legal ethics at George Washington University Law School, said the professional conduct rules’ exclusion of rule-making as a matter triggering ethical restrictions allowed most government lawyers in administrative positions to move relatively freely between government and firms. On the other hand, he said, government litigators are generally subject to more restrictions than private sector lawyers when moving to firms. He said he had not reviewed Koslowe’s case but said it appeared Koslowe was in an unusual position, that of a litigator arguing he was participating in a purely administrative process. “The line is not completely restrictive of switching sides,” he said, “but there is a line.”

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