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UNITED STATES v. RMI CO.

March 14, 1979

UNITED STATES of America
v.
RMI COMPANY, Crucible, Inc., Lawrence Aviation Industries, Inc., Martin Marietta Aluminum, Inc., J. William Price, Jr., Andrew N. Eshman, Robert E. Thomas, Gerald Cohen and George Herman



The opinion of the court was delivered by: SNYDER

In this proceeding, we are required to consider the Government's Motion to Disqualify Counsel, including their respective law firms, from all further participation in these proceedings, or, in the alternative from further representation of three individuals, Nancy Beatty, Dorothy A. Smith, two secretaries employed by Defendant RMI Company, and Robert N. Geisinger, RMI's Secretary-Treasurer and Comptroller, each of whom the Government states it plans to call at trial. The Government also moves for disqualification of RMI's counsel from representing any other RMI employees who are later subpoenaed to be witnesses for the Government. In opposition of this Motion, counsel have filed affidavits by these individuals that they believe no conflict in fact exists among them, or between any of them and RMI, and asking counsel to oppose the Motion. Counsel have also filed their own affidavits that many RMI employees have been interviewed by them and that all were advised of their right to retain independent counsel, as RMI's former President, William J. Price, and former Vice President-Marketing, Andrew N. Eshman, had already done, and that, in fact, no conflict exists.

Concluding that counsel's joint representation of the Defendant RMI and its employees who will be called as Government witnesses creates a conflict of interest, such joint representation will be prohibited, and the Government's Motion will be granted to that extent.

 I.

 The instant proceeding arises out of an indictment returned by a grand jury in the Western District of Pennsylvania charging a combination and conspiracy to fix, maintain, and stabilize artificially and at noncompetitive levels, titanium mill products *fn1" in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, as amended, *fn2" which is the statement of Congress' intent to extend its powers to the furthest reaches of the Commerce Clause to mandate a competitive business economy. Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S. 186, 95 S. Ct. 392, 42 L. Ed. 2d 378 (1974); U. S. v. Finis P. Ernest, Inc., 509 F.2d 1256 (7th Cir.), Cert. denied 423 U.S. 893, 96 S. Ct. 191, 46 L. Ed. 2d 124 (1975); Rasmussen v. American Dairy Association, 472 F.2d 517 (9th Cir. 1972), Cert. denied 412 U.S. 950, 93 S. Ct. 3014, 37 L. Ed. 2d 1003 (1973).

 An examination of the grand jury proceedings and the affidavits herein indicates that the named individuals were counseled throughout by the attorneys who persist in demanding a right to represent RMI and any of its employees, including the three individuals who have already been granted immunity and who, by affidavit, state they are willing to be questioned at trial, both on cross and direct examination, by counsel acting for RMI who at the same time represent each of them. Furthermore, James L. Daniell, President of RMI, has, by affidavit, indicated that he has read the Government's Motion and remains "convinced that its present counsel is best capable of preparing and presenting RMI's defense", and stated that "RMI wants its present counsel to continue to represent it." It is contended further that if the Government does not call the three individuals in the course of its case, "RMI will do so in its own defense." Thus, counsel assert in their brief that "(t)he Government's assertions of "conflict' not only wars with the facts, but are without support in precedent." We emphasize that after the witnesses were called before the grand jury, on advice of present counsel, immunity was sought and after testifying, the witnesses reviewed the grand jury proceedings with counsel.

 At the hearing held by this Court on the Government's Motion, neither the Government nor the Defendant's counsel requested a hearing be held to advise the named individuals of potential conflict of interest Inter sese and to apprise them of their right to retain separate, independent counsel, although offered the opportunity by the Court. Counsel opposing the Motion took the position that the affidavits submitted on behalf of the named individuals showed that each had intelligently, knowingly, and voluntarily waived their Sixth Amendment constitutional right to effective counsel. The Government took the position that, as shown by the grand jury's record and indictment, and by the individuals' own affidavits, an intolerable conflict had been demonstrated.

 The Government contends it is concerned about the effect that joint representation will have on its case. It points to United States ex rel. Hart v. Davenport, 478 F.2d 203, 210 (3rd Cir. 1973), where our Circuit stated:

 
"(U)pon a showing of a possible conflict of interest or prejudice, however remote, we will regard joint representation as constitutionally defective."

 The court also quoted In re Abrams, 56 N.J. 271, 276, 266 A.2d 275, 278 (1970), where it was held:

 
"It is inherently wrong to represent both the employer and the employee if the employee's interest may, and the public interest will, be advanced by the employee's disclosure of his employer's criminal conduct."

 478 F.2d at 209. The Government argues the conflict cannot be countenanced because "when placed in a situation where the employee will testify against the employer, they will be in a position adverse to one another, thus compromising both the Sixth Amendment rights of the employer and the rights of the employee to conflict free representation without fear of disclosure of confidences." They also point to Pirillo v. Takiff, 462 Pa. 511, 341 A.2d 896, Aff'd 466 Pa. 187, 352 A.2d 11 (1975), Appeal dismissed and cert. denied 423 U.S. 1083, 96 S. Ct. 873, 47 L. Ed. 2d 94 (1976), holding that the Government may request judicial interference with private arrangements for multiple legal representation of witnesses called to testify before a grand jury where the multiple representation impedes the effectiveness of the grand jury investigation. The Government argues that under the immediacy of trial, now scheduled for April 9, 1979, the principle involved in Pirillo is even more cogent, citing In re Grand Jury Empaneled January 21, 1975, 536 F.2d 1009 (3rd Cir. 1976).

 Counsel for RMI insist on their right to represent all employees of RMI, and the individuals granted immunity as well, because RMI's defense will concede the truth of the witnesses' grand jury testimony. It becomes equally important, they argue, that counsel thoroughly familiar with the grand jury proceeding be able to aid witnesses in offering testimony that is consistent with their statements before ...


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