APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (D.C. Crim. No. 79-00084)
Before Seitz, Chief Judge, and Weis and Higginbotham, Circuit Judges.
The defendant in this criminal prosecution for violations of the Internal Revenue Code appeals from a pretrial order disqualifying the law firm that had been representing him. The district court disqualified the firm because one of its partners had been an assistant United States attorney, with general responsibilities for tax matters, while the case was under investigation in the U. S. Attorney's office. This court has jurisdiction under 28 U.S.C. § 1291 (1976), because the district court's disqualification order is a final decision on a collateral issue. IBM v. Levin, 579 F.2d 271, 278 (3d Cir. 1978).
The appellant, William G. Miller, is charged with four counts of attempted income tax evasion, 26 U.S.C. § 7201 (1976), and seven counts of making and signing false income tax returns, 26 U.S.C. § 7206(1) (1976). For his legal counsel, Miller hired the Newark, New Jersey, law firm of Zuckerman, Aronson, & Horn. One of the firm's partners, Lawrence S. Horn, had been an assistant U. S. attorney in the District of New Jersey for several years prior to joining the firm.
The government moved to disqualify the Zuckerman firm on the ground, inter alia, that Horn had participated in the government's preparations of its case against Miller while an assistant U. S. attorney. It relied on DR 9-101(B) of the ABA's Code of Professional Responsibility: "A lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee."
The record then before the district court showed that much of the government's preparation occurred while Horn was with the U. S. Attorney. The case was prepared within the U. S. Attorney's office by a unit of the Department of Justice known as the Organized Crime and Racketeering Section, Newark Strike Force. Horn was not a member of the Strike Force. However, the Strike Force attorney who was assigned to the Miller case, Michael B. Himmel, submitted an affidavit in which he recalled discussing with Horn a legal question relevant to the case. The issue was "the difference between specific item and net worth theories of income tax prosecution." Himmel could not recall whether he had discussed any of the specific facts of the Miller case with Horn. Horn stated in response that he could not recall this discussion but that he was sure that he had never discussed the facts of the Miller case with anyone in the U. S. Attorney's office.
The district court initially denied the motion. Relying on an advisory opinion issued by the Supreme Court of New Jersey, In re Advisory Opinion on Professional Ethics no. 361, 77 N.J. 199, 390 A.2d 118 (1978), which applied DR 9-101(B) to the situation of a former prosecutor, the district court ruled that a prosecutor could be disqualified under DR 9-101(B) only if as a prosecutor he obtained actual knowledge of the case or held responsibility over the subject matter. Horn's conversation with Himmel, according to the district court, showed neither fact.
The government moved for reconsideration, directing its arguments this time to New Jersey's interpretation of the disciplinary rule. The government submitted evidence to show that the Miller case fit within the subject matter of Horn's former responsibilities. An affidavit by the U. S. Attorney, Robert J. Del Tufo, described these responsibilities. Horn was the resident expert on tax law. He handled most of the criminal tax prosecutions in the office and advised other prosecutors on tax issues. The U. S. Attorney expected his assistants to consult with Horn on any tax questions. The affidavit also stated that when Horn joined the Zuckerman firm, the firm announced that he had been "Chief of the Criminal Tax Fraud Unit within the United States Attorney's Office."
The U. S. Attorney's affidavit also discounted the significance of the distinction between cases assigned to Strike Force attorneys and cases assigned to regular assistant U. S. attorneys. The U. S. Attorney has ultimate responsibility for cases in both categories. Attorneys in the office freely exchange information and assume responsibilities without regard to this distinction. On tax cases assigned to Strike Force attorneys, Horn often provided the U. S. Attorney with evaluations and assisted the Strike Force attorneys with their preparations.
Horn testified that his responsibilities in tax cases were informal, nothing more than a specialization and a pattern of assignments and consultations. He stressed that he had no general responsibility for supervising tax cases. He repeated that he had no direct involvement in the preparation of the case against Miller.
After considering this additional evidence, the district court granted the government's motion. The court again relied on the interpretation of DR 9-101(B) in the advisory opinion of the Supreme Court of New Jersey. That interpretation holds that a prosecutor's "responsibility, whether exercised or not, over the subject matter" of a case pending in his office precludes him from a subsequent appearance as a private defense attorney in the case. In re Advisory Opinion, supra, 390 A.2d at 120. The district court held that the present case fell within the dictates of ...