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Finding that an attorney-client privileged letter that contained a “blueprint” of the defense strategy had been “leaked” to the plaintiff in an employment discrimination case, a federal judge has ruled that a Bucks County, Pa., plaintiff’s lawyer must be disqualified because she and her co-counsel failed to adhere to the duty to “cease, notify and return” the privileged document. In his 47-page opinion in Maldonado v. State of New Jersey, U.S. District Judge Joseph H. Rodriguez rejected attorney Carmen R. Matos’ argument that she did nothing wrong in retaining the letter since it was given by her client to his first lawyer and was included in the official file of the New Jersey Division on Civil Rights. Instead, Rodriguez concluded that both Matos and her co-counsel, David S. Hodulik of Moorestown, N.J., should have known that the letter was privileged and therefore should have immediately returned it. “The privileged nature of the letter is clear on its face and both attorneys are charged with the knowledge of that fact,” Rodriguez wrote. Rodriguez concluded that “both Matos and Hodulik did not adhere to the ‘cease, notify and return’ mandate” of the New Jersey Rules of Professional Conduct. Although he found that the sanction of disqualifying counsel was a “drastic” one, Rodriguez found that “in disqualification situations any doubt is to be resolved in favor of disqualification.” Rodriguez found that the letter was a “blueprint to merits of plaintiff’s case, as well as defendants’ defenses; therefore, its significance cannot be overstated.” As a result, Rodriguez concluded that the letter’s disclosure resulted in “substantial prejudice” to the defendants. “The bell cannot be unrung here; hence, return of the documents will not mitigate the prejudice. This factor strongly supports disqualification,” Rodriguez wrote. “Unquestionably, Maldonado will be deprived of the counsel of his choice. However, when chosen counsel strains the limits of ethical conduct, that choice has to yield to the preservation of a fair and just litigation process,” Rodriguez wrote. In a recent interview, Matos said she was “disappointed” by the judge’s decision and that she believed she acted ethically at every step. Since the letter was included in the official file of her client’s administrative claim, Matos said, she believed that it was proper to use it in drafting his complaint. The defense complaint about the disclosure, she said, came many months later when defense lawyers finally noticed that the letter was mentioned in the original complaint. In the suit, Lionel Maldonado, a Puerto Rican probation officer in Camden, N.J., claims that he was subjected to a hostile work environment in which his bosses made fun of his accent and made numerous demeaning remarks about Latinos. In the first round of litigation, before the New Jersey Division on Civil Rights, Maldonado won a “finding of probable cause” in his favor. Soon after that finding was handed down, two of the defendants named in Maldonado’s complaint — Assistant Superintendent Richard Mason and Senior Probation Officer Harry Costello — drafted a letter to New Jersey Deputy Attorney General Karen Griffin. In the letter, Mason and Costello provided Griffin with information about the credibility of witnesses who were interviewed in Maldonado’s case. Maldonado claims the letter was placed in his mailbox and that he immediately turned it over to his lawyer. Months later, Maldonado said he hired new lawyers — Matos and Hodulik — to pursue the case in federal court. Matos said that when she received the file from the New Jersey Division on Civil Rights, it included the Mason-Costello letter, and that she believed it was a proper part of the administrative record. When Matos drafted a complaint, she included a quote from the letter. Lawyers in the New Jersey Attorney General’s Office said they first learned that Matos was in possession of the letter when they reviewed her amended complaint in April 2004, and that when they demanded that it be returned, Hodulik refused. Hodulik stated that the letter was part of the NJDCR file, and that because the defendants had not yet filed an answer to the complaint, he was not required to produce the file. The New Jersey Attorney General’s Office responded by filing a motion for a protective order and demanded that the entire case be dismissed on the grounds that Maldonado must have stolen the letter from Costello’s office. Now Rodriguez has ruled that there is no evidence that Maldonado stole the letter. “There has been no direct evidence offered by either party explaining how the letter appeared in Maldonado’s mailbox,” Rodriguez wrote. As a result, Rodriguez was forced to address the tricky ethical question of how to deal with a “leaked” disclosure of a privileged document. “Maldonado argues that defendants waived their privilege as to the letter because the letter was ‘leaked.’ Conversely, defendants assert that their privilege remains intact because they took reasonable precautions to safeguard the letter,” Rodriguez wrote. ‘INVOLUNTARY’ DISCLOSURE Rodriguez found that while there is significant case law on “inadvertent” disclosures of privileged material, Maldonado’s case was different since the disclosure was “involuntary” since the letter had “inexplicably” ended up in the plaintiff’s hands. Siding with the defense, Rodriguez found that the authors of the letter took “reasonable precautions to avoid disclosure.” The prejudice factor also weighed in favor of the defense, Rodriguez found, since the letter offered a blueprint of the defense strategy in the case. Turning to the factor of the plaintiff’s lawyers’ delay in turning over the letter, Rodriguez found that there was a “double-edged sword” because the plaintiffs had the letter before they filed the suit, but that since the letter was quoted in the federal complaint, the defense should have been immediately aware of that fact. “Defendants knew that opposing counsel had the letter since Oct. 3, 2003, the filing date of the original complaint, yet did nothing to rectify the disclosure. After all, it was not until the amended complaint was reviewed on April 15, 2004, that defendants first notified Hodulik of the disclosure,” Rodriguez wrote. But Rodriguez concluded that the defense delay was excusable since the defendants were not afforded counsel from the Attorney General’s Office until sometime in March 2004. Defense lawyers urged Rodriguez to dismiss the entire case, arguing that Maldonado himself knew the letter was privileged and had an ethical duty to give it back instead of giving it to his former lawyer. Rodriguez disagreed, saying “such legal sophistication, however, cannot be imputed to Maldonado merely because he has a law enforcement background. … Maldonado certainly knew that the contents of the letter were useful to his case, but he appears unaware of any ethical issues concerning the continued possession of the letter.” But Rodriguez sided with the defense on its next request — that Matos and Hodulik must be disqualified for their failure to return the letter as soon as they discovered it. The plaintiff’s lawyers insisted that they were unaware that the document was privileged because it was contained in the NJDCR file. Rodriguez rejected that argument, finding that the “privileged nature of the letter is clear on its face” and that both plaintiff’s lawyers therefore had a duty to follow the ethical rule to “cease, notify and return” the privileged document. The only possible cure, Rodriguez found, was to disqualify both plaintiff’s lawyers. “Although plaintiff’s counsel has gone to great lengths and argued stridently that no confidences were revealed or used, the undisputed facts demonstrate that counsels’ possession of the October 7th letter creates a substantial taint on any future proceedings. Simply returning the letter and removing the possibility of any future impingement on defendants’ attorney-client privilege will not remove the taint,” Rodriguez wrote. Matos said she has not yet discussed with her client whether to challenge the ruling by seeking the right to file an immediate appeal before the 3rd U.S. Circuit Court of Appeals.

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