The opinion of the court was delivered by: HERMAN
Plaintiffs, stockholders in Keystone Coca-Cola Bottling Company ("Keystone"), bring this action against that corporation and its directors individually, alleging various acts of corporate mismanagement. Jurisdiction is based on the Securities Exchange Act of 1934, 15 U.S.C. § 78aa, and on diversity and amount in controversy. 28 U.S.C. § 1331. Although the case is of relatively recent origin, it has already produced a voluminous file and some degree of procedural complexity.
Keystone is represented by Albert H. Aston, Esquire, who is also a defendant. Albert H. Aston is in turn represented by his son and law partner, Albert H. Aston, Jr. Defendants Asa Day, Sr., Asa Day, Jr., and Alan W. Day ("the Days") are represented by the firm of Nanovic and McKinley. An answer to the original complaint has been filed on behalf of defendant Aston, while motions to dismiss and for a more definite statement have been filed on behalf of all other defendants. These motions have been fully briefed and were argued on January 5, 1977. On January 28, 1977, before the court had ruled on the motions, plaintiffs filed an amended complaint which attempts to meet defendants' objections as to specificity and also sets forth a new derivative cause of action. Under Federal Rule of Civil Procedure 15(a) the amended complaint is effective as of course as to Keystone and the Days, who have not as yet answered the original complaint. As to defendant Aston, plaintiffs have filed a motion for leave to amend.
Thus, as the matter now stands, there is an original complaint which is still effective as to defendant Aston and an amended complaint which supersedes the original as to all other defendants. Since defendant Aston has failed to oppose plaintiffs' motion to amend as to him within the time prescribed by Local Rule 301.01(e),
and because it will greatly facilitate the further conduct of this action to have all parties pleading to the same complaint, the motion will be granted. The granting of this motion renders the original complaint void as to all defendants, and accordingly the motions directed to that complaint will be denied as moot. See LOUX v. RHAY, 375 F.2d 55 (9th Cir. 1967); MILLER v. AMERICAN EXPORT LINES, INC., 313 F.2d 218 (2d Cir. 1963).
As the motions to dismiss the amended complaint are largely restatements of defendants' earlier motions which have been fully briefed and argued, counsel for plaintiffs and the Days have indicated a willingness to have the court decide these issues without further briefing. Since more than ten days have elapsed since the filing of Keystone's motion to dismiss the amended complaint without a supporting brief being submitted,
we assume that Keystone also wishes to rely on its previous brief. Defendant Aston has of course filed no response to the amended complaint because leave to amend as to him has heretofore not been granted. While we do not require the filing of further briefs on the motions of Keystone and the Days, we will defer decision thereon until Mr. Aston has promptly responded to the amended complaint so that the preliminary motions of all defendants can be disposed of at one time.
Another issue which should be decided before this action proceeds further is plaintiffs' motion to disqualify defendant Aston as counsel for Keystone. This motion is based on Disciplinary Rules (hereinafter DR) 5-101 and 5-102 of the Code of Professional Responsibility,
which proscribe the appearance of an attorney as both counsel and witness in the same case.
Aston contends that his testimony will not be required in behalf of Keystone, and thus DR 5-101 and 5-102 do not apply. We agree with Aston that the mere fact that he may be called as a witness by plaintiffs does not compel his withdrawal.
There is the additional problem, however, of Aston's being a defendant in the action. Aston does not deny that he will be required to take the stand in his own defense. He also indicates that he and his client will rely on the common defense that no wrongdoing has occurred.
Aston's close connection with Keystone, as a Director alleged to have taken part in the corporate decisions that are the basis of this suit, renders it inevitable that any testimony he gives in his own defense will also be integral to the defense of his client. Thus, while not technically testifying in behalf of his client, he will nonetheless be in the position that DR 5-101 and 5-102 are designed to avoid -- that of being both advocate and witness in behalf of the same legal position.
If, on the other hand, later developments were to prove that Aston and his client could not rely on a common defense, he would be in the equally untenable position of giving testimony in his own behalf which might prejudice the position of his client. DR 5-102(B). In short, we feel that Aston's intimate connection with Keystone, both as Director and co-defendant render it highly unlikely that he will be able to try this case with the degree of detachment required by the Code of Professional Responsibility, and that he must therefore be disqualified.
Another ethical question is presented by the presence in the case of Albert H. Aston, Jr. as counsel for his father.
It cannot be disputed that if Aston, Sr. is to testify in his own behalf, his son's role as counsel will be a technical violation of DR 5-102(A), which prohibits a lawyer from serving as counsel in litigation in which another member of his firm is called as a witness. Mr. Aston's role in this litigation, however, is more than that of a witness. He is a party-defendant, and as such could represent himself if he so chose. 28 U.S.C. § 1654. Implicit in the right to represent oneself is the right to be represented by counsel of one's own choosing. We know of no authority which says that a party forfeits this right merely because he is an attorney. Nor do we perceive any actual or potential impropriety if an attorney who might properly represent himself instead selects a member of his firm to serve as his counsel. See INTERNATIONAL ELECTRONICS CORP. v. FLANZER, 527 F.2d 1288, 1295 (2d Cir. 1975). In the absence of some showing that the presence of Albert H. Aston, Jr. in the case will actually give rise to a breach of professional ethics, we will not disturb defendant Aston's choice of counsel.
An appropriate order will be entered.
R. Dixon Herman, United States District Judge
[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 428 F. Supp.]
AND NOW, this 9th day of March 1977, IT IS ORDERED that plaintiffs' motion to disqualify Albert H. Aston, Esquire, as counsel for Keystone Coca-Cola Bottling Company be and is hereby granted and Albert H. Aston, Esquire, is given twenty (20) days within which to withdraw his appearance as counsel.
IT IS FURTHER ORDERED that plaintiffs' motion to amend the complaint as to defendant Albert H. Aston ...