Pepper Hamilton
()

After two other courts found an FBI affidavit of probable cause to search union leader John J. Dougherty’s home was appropriately in the public domain, a Philadelphia judge has thrown out Dougherty’s legal malpractice suit against Pepper Hamilton for using the affidavit in a separate defamation action.

In a one-paragraph order Wednesday, Philadelphia Court of Common Pleas Judge Mark I. Bernstein granted Pepper Hamilton summary judgment in the suit Dougherty v. Pepper Hamilton.

The ruling comes despite an argument from Dougherty that other courts’ rulings on whether the affidavit should be under seal have no relevance to his claims that Pepper Hamilton is civilly liable for its alleged “disloyalty.”

The case is part of a string of litigation involving an FBI affidavit that arguably never should have been made public, but that, two courts ruled, became public through no fault of the parties who ended up using it to their advantage in litigation.

Pepper Hamilton represented Dougherty for a brief time through early 2007 when he was facing an FBI investigation and a search of his home. No charges were ever filed against Dougherty and the investigation and the firm’s representation ended.

The FBI affidavit of probable cause to search Dougherty’s home was mistakenly attached to a federal docket in the Eastern District of Pennsylvania in a criminal case against an unrelated person, Donald Dougherty. That mistakenly attached affidavit was also mistakenly left accessible to the public despite the document being ordered sealed in 2006, according to several court filings.

The affidavit sat unviewed for several years until 2012 when Pepper Hamilton, representing the owners of The Philadelphia Inquirer in a defamation suit John Dougherty filed against the newspaper in the Philadelphia Court of Common Pleas, attached the affidavit to a motion for summary judgment to have the defamation suit dismissed. The newspaper was using the affidavit as evidence that it didn’t defame Dougherty by writing articles about him being under investigation.

The affidavit then became the subject of news articles in 2012, but was soon ordered sealed by a Philadelphia trial judge.

Dougherty argued in the defamation case that Pepper Hamilton should be disqualified from representing the Inquirer for allegedly using information from its time representing Dougherty against him now that the firm had a different client. Dougherty also initiated the legal malpractice suit against Pepper Hamilton in February 2013, alleging similar claims. Pepper Hamilton was disqualified from representing the newspaper in the defamation case.

In April 2014, Philadelphia Court of Common Pleas Judge Lisa Rau granted the Inquirer’s motion for summary judgment in the defamation case and simultaneously ordered the affidavit be unsealed. She denied a request from Dougherty to reconsider unsealing the document.

Dougherty, through his attorneys at Sprague & Sprague, went to federal court, asking U.S. District Judge Gene E.K. Pratter of the Eastern District of Pennsylvania to order the state court to reseal the affidavit given a federal court initially ordered it sealed in 2006. Dougherty argued leaving the order unsealed in state court would eviscerate the federal court’s powers and would allow this otherwise-sealed document to be brought into any present or future litigation involving Dougherty.

Last week, Pratter denied the motion, finding the federal seal order didn’t extend beyond the federal court. She also noted the order was already in the public domain and questioned what effect resealing it would have.

The team of Dechert lawyers representing Pepper Hamilton in the malpractice case quickly seized on Pratter’s order, informing Bernstein of the ruling in a filing July 25. The lawyers had also previously informed Bernstein, in support of their motion for summary judgment, that Rau held the affidavit was not confidential, Pepper Hamilton was free to take it off of the court’s Pacer system and use it in pleadings, that the affidavit did not contain confidential information and that there was no evidence Pepper Hamilton obtained the affidavit in violation of the attorney-client relationship, according to the filing.

Pepper Hamilton moved for summary judgment in the malpractice case after Rau ruled for the Inquirer in the defamation case.

“Judge Pratter’s decision confirms Judge Rau’s ruling that there was nothing impermissible with defendants’ use of the FBI affidavit as a summary judgment exhibit in the defamation action,” Pepper Hamilton said in its supplemental memorandum in support of summary judgment.

Pepper Hamilton said any other lawyer representing the Inquirer would have done exactly what the Pepper Hamilton lawyers did—attach the affidavit as an exhibit given its “direct relevance” to the defamation claim.

Pepper Hamilton further argued in a footnote to its memorandum that Rule of Professional Conduct 1.9(c) allows a lawyer to use information relating to the representation of a former client to the disadvantage of that client if the information has become generally known.

Dougherty argued in his response that neither Rau nor Pratter’s decisions on procedural matters precluded the civil action against the law firm. He argued the issue in the malpractice case of whether Pepper Hamilton breached its fiduciary duties to Dougherty by its representation of an adverse party was never before Rau or Pratter.

“Our view is that good things take time and we believe that, following appellate review, we will secure the result that we think that Mr. Dougherty is entitled to,” said Dougherty’s attorney, Joseph R. Podraza Jr. of Sprague & Sprague, in response to Bernstein’s order.

Dechert partner Robert C. Heim, an attorney for Pepper Hamilton, declined to comment.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.