Carlos J. Cuevas

A motion to disqualify counsel is often made as tactical gambit to delay litigation. A motion to disqualify is disfavored because it denies a litigant its choice of counsel. The purpose of this article is to discuss under what circumstances should an attorney be disqualified from representing another party that is adverse to a present or former client of a former law firm for which the attorney was affiliated.

An important case concerning attorney disqualification and the adoption of the rebuttable presumption test is Solow v. W.R. Grace & Co., 83 N.Y.2d 303 (1994). There, a motion was made to disqualify the law firm of Stroock & Stroock & Lavan. Stroock represented the plaintiffs in a civil action to recover damages for asbestos contamination against W.R. Grace & Co (Grace). Stroock had previously defended Grace in a civil action titled City of Enterprise v. Grace & Co. (Cir. Ct., Coffee County, Ala., Civ No. 85-87), which also involved asbestos contamination. Stroock had represented Grace for a period of approximately six months in the City of Enterprise litigation. The partner responsible for the City of Enterprise matter was no longer at Stroock. Grace had retained Stroock for the limited purpose of preparing Dr. Seaton, an independent expert retained by Grace, for deposition and possible testimony. The Appellate Division, First Department, relying upon Cardinale v. Golinello, 43 N.Y.2d 288 (1977), held that there was an irrebuttable presumption that all the firm’s attorneys had knowledge of confidential information learned during its prior representation of Grace in the City of Enterprise litigation.

The New York Court of Appeals held that Stroock was permitted to represent the plaintiffs. A litigant seeking to disqualify an attorney or a law firm, must establish (1) the existence of a prior attorney-client relationship and (2) that the former and current representations are both adverse and substantially related. The irrebuttable presumption test is employed to fully protect client confidences and secrets, to offer a clear test which is easy to administer and to avoid an appearance of impropriety on the part of the attorney or the law firm.

The New York Court of Appeals thought that the irrebuttable presumption test was problematic because it led to unwarranted disqualifications. The court stated:

Thus, this per se rule of disqualification protects all of the ethical concerns implicated by successive representations. It does so, however, at a substantial cost to current clients, to the public-at-large and to the legal profession. It is unnecessarily preclusive because it disqualifies all members of a law firm indiscriminately, whether or not they share knowledge of former client’s confidences and secrets. As a result the rule may cause a current client to face significant hardships when the chosen attorney is disqualified, thus depriving the client of the specialized knowledge of counsel of choice and forcing the client to familiarize a new attorney with the matter.

Id. at 309-10. The court was also concerned that the irrebuttable presumption rule encouraged disqualification motions as a litigation tactic.

The Court of Appeals examined Cardinale v. Golinello, 43 N.Y.2d 288 (1977). In Cardinale, Halperin, Somers & Goldstick, P.C., had represented defendant Golinello in connection with a stock purchase transaction. After the stock purchase transaction had been effectuated, attorney Charles Schiller joined the Halperin firm. The Halperin firm continued to represent defendant Golinello after Schiller’s arrival, but Schiller did not render legal services on Golinello’s behalf. Schiller subsequently left the Halperin firm and became associated with the law firm of King & King. Thereafter, plaintiffs engaged the King firm in connection with claims against Golinello and members of the Halperin firm emanating from the stock purchase. When defendant Golinello learned that Schiller had been retained by the King firm to handle the matter, defendant Golinello moved to disqualify both the King firm and Schiller. Disqualification was of the King firm and Schiller was appropriate. The court stated:

We began our analysis by noting that Halperin was “a small firm whose activities were characterized by an understandable informality” in which “there was a ‘constant cross-pollination’” and “‘cross current of discussion and ideas’” among the employees (Cardinale, supra, 43 N.Y.2d at 292, 401 N.Y.S.2d 191, 372 N.E.2d 26).

Id. at 311.

Given the atmosphere of a small law firm it was likely that Schiller had become aware of confidential information. There was also concern over the appearance of impropriety, for if Schiller were allowed to represent plaintiffs in the current action, laypersons might well believe that he was being hired not only because of his legal talent, but also because of confidential information that he possessed.

The New York Court of Appeals also examined Silver Chrysler Plymouth v. Chrysler Motors, 518 F.2d 751 (2d Cir. 1975). In Silver Chrysler Plymouth, an attorney had worked for the law firm of Kelly, Drye & Warren as an associate. Chrysler Motors was a major client of Kelly Drye. The attorney subsequently worked for another law firm that sued Chrysler concerning the termination of a Chrysler franchise. Chrysler sought to disqualify the attorney and his law firm. The Second Circuit held that the attorney and his law firm were not disqualified from representing the plaintiff. The Second Circuit adopted a rebuttable presumption test. Kelly Drye had 80 attorneys and had different departments. The Court of Appeals stated:

The court reasoned from this that it would be “absurd” to assume that upon entry into the firm an attorney, by “osmosis,” became aware of every client of the firm and shared in all of the client confidences and secrets which the firm, as a whole, possessed. Because of this the Second Circuit held that the presumption of disqualification should be a rebuttable one; quite simply, it said, there are valid reasons for differentiating “between lawyers who become heavily involved in the facts of a particular matter and those who enter briefly on the periphery”

Id. at 312-13. There was sufficient evidence that the attorney had rebutted the presumption that he had received confidential information, and therefore, should be disqualified.

The facts in the case at bar were distinguishable from Cardinale, and the Court of Appeals stated:

In this matter, however, Stroock seeks to represent plaintiffs and Ms. Billauer, who handled the Grace matter while at Stroock, has moved to another firm. Under these circumstances the ethical considerations which support a per se disqualification rule have considerably less force and may be overridden by competing policy concerns. In this situation the court must presume that the rights of the former client are jeopardized by Stroock’s subsequent representation of plaintiffs, but Stroock should be allowed to rebut that presumption by facts establishing that the firm’s remaining attorneys possess no confidences or secrets of the former client.

Id. at 313.

The fundamental issue in a motion to disqualify is the access to a client’s confidential information. If the attorney worked on the prior matter, then he or she had access to confidential information and should be disqualified. The Second Circuit’s approach in Silver Chrysler Plymouth, which strongly influenced the New York Court of Appeals in Solow, is the correct approach because the inference that an attorney received confidential information is an inference that is rebuttable. Since Cardinale, which was decided more than 50 years ago, the practice of law has undergone a radical transformation. The practice of law has evolved in which medium and large law firms with multiple departments in multiple cities are now common. The law governing the practice of law should evolve with the practice of law. As Silver Chrysler Plymouth reflects, the concept of a client in a medium or large law firm is different. An attorney should be able to rebut the presumption that he or she has had access to confidential information. It is the access to confidential information that an attorney is required to protect. As in Solow, it is counter-productive to disqualify a lawyer or law firm that never worked on the particular matter and never had access to a client’s confidential information because the policies underlying the Code of Professional Conduct are not being effectuated.

The rebuttable presumption approach allows a court to review affidavits from the movant and the attorney in question to ascertain whether the attorney actually did work for the client and whether the former matter and current matter are substantially related. The rebuttable presumption approach also enables the court to examine the time sheets that were interposed in the former matter to ascertain whether the attorney actually did work for the client and what matters the attorney worked on for the client. The rebuttable presumption test allows a court to protect a client’s confidential information and while taking into consideration a client’s right to select an attorney of his or her own choice.

Carlos J. Cuevas is a solo practitioner in Yonkers and a research associate with the University of Houston School of Law.