The opinion of the court was delivered by: GREEN
A federal grand jury has indicted the defendants in this case, the FMC Corporation (FMC) and two of its employees, David C. Landgraf and Ernest C. Ladd for violations of 18 U.S.C. §§ 371, 1001, and 1505.
The indictment alleges the following facts. From approximately 1974 to 1977, a South Charleston, West Virginia chemical manufacturing plant operated by defendant FMC manufactured a chemical known as carbon tetrachloride (CTC). As a result of this manufacturing process, FMC purportedly discharged wastewater, containing various chemicals including CTC, into the Kanawha River. As a consequence of this discharge, it is alleged, the public drinking water supplies of various cities down river from FMC's South Charleston plant contained CTC, allegedly a toxin and carcinogen. The government contends that the defendants entered into a conspiracy to prevent the United States Environmental Protection Agency (EPA) from carrying out its duties to protect the "chemical, physical and biological integrity" of the Nation's waters as required by 33 U.S.C. § 1251 et seq. In effect, the indictment charges that the defendants failed to submit certain information regarding the discharge of CTC from the FMC plant into the Kanawha River, thereby hindering or obstructing the proper administration of the law by the EPA.
Now before the Court is the government's motion to disqualify the law firm of Schnader, Harrison, Segal and Lewis (Schnader) from representing FMC or any other defendant in this matter. After considering the various affidavits and arguments advanced by the parties in their memoranda as well as the testimony of the witnesses at the evidentiary hearing on the motion, I find that the government has not established the necessity of disqualifying the Schnader firm. Therefore, I will deny the motion.
This motion to disqualify arises out of the following undisputed facts. FMC retained Joseph A. Tate, Esquire, a member of the Schnader firm, to represent certain FMC employees as well as members of a law firm which had served as the corporation's outside counsel when they appeared as witnesses before the grand jury which handed down the indictment in this case.
During the grand jury investigation, Thomas A. Bergstrom, Esquire, dealing primarily with the grand jury subpoenas for corporate documents, represented FMC as a corporation. After FMC, Messrs. Ladd and Landgraf were indicted, the corporation retained Schnader to represent it in the trial of this matter. The government now argues that the Schnader firm must be disqualified from representing any defendant in this case because its former representation of FMC employees during the grand jury investigation creates a conflict between the interests of FMC and the interests of the FMC employees who will be called to testify at the trial as government witnesses. Schnader asserts, and the government has not challenged this assertion, that at present the government plans to call only one FMC employee, Mr. Festus Roseberry, who was represented by Schnader during the grand jury proceedings. The government has also identified three other employees formerly represented by Schnader as potential witnesses at trial: Richard B. Carroll, Thomas E. Epley and Douglas E. Kliever.
It is the contention of the government that permitting Schnader to continue its representation of FMC will create an irresoluble conflict of interest. As attorney for FMC, so it is argued, the law firm will be required on cross-examination to undermine the credibility and recollection of witnesses formerly represented by it on matters identical to those at trial. According to the government, Schnader will have to choose either to provide FMC with effective assistance of counsel and divulge the confidences of its former clients or to protect those confidences at the cost of giving FMC inadequate representation.
In response, Schnader and FMC maintain that no such conflict exists because none of the four potential government witnesses have disclosed any confidential information to any member of the Schnader firm. The testimony of the four people given at the fact-finding hearing on this motion supports this position. Responding to questions posed by the Court, the government and attorneys for FMC, Messrs. Roseberry, Carroll, Epley and Kliever all testified that they did not give any information to the Schnader lawyers which they considered confidential or which they believed could be used against them during cross-examination at trial in this case. In addition, all four stated they were willing to waive any rights of confidentiality owed them by Schnader as their former attorney. After questioning the witnesses regarding their decisions to make such waivers, I am satisfied that the waivers were voluntarily and knowingly made. All four men are well-educated and hold professional positions involving considerable responsibility.
I believe that they understand both what constitutes confidential information and the implications of their waiver of the attorney-client privilege.
First, addressing the Court in its role as a supervisor of members of the bar, the government argues that disqualification of Schnader is required by Canons 4, 5 and 9 of the Code of Professional Responsibility.
Canon 4 states that a "lawyer should preserve the (confidential communications) of his client." This Canon prohibits an attorney from disclosing confidences divulged by a client; this duty continues even after the relationship has ended. Ethical Consideration 4-1. Under certain limited circumstances a lawyer may reveal the confidences of a former client, but she may not use such confidential information in a manner that would disadvantage that client. Ethical Consideration 4-5.
The rationale underlying Canon 4 is that an individual should be encouraged to reveal all pertinent information to his lawyer. A client would be reluctant to confide in his lawyer if he thought his confidences might later be used against him. Consequently, a lawyer should not accept employment that might result in a misuse of confidential information entrusted to her by a client. In the case now before me, however, the moving party has failed to show that there exists any confidential information to be disclosed. The uncontradicted testimony of the four former Schnader clients who may be called as government witnesses is that they never imparted confidences to their lawyers. Therefore, there is no reasonable basis to conclude that any violation or potential violation of Canon 4 would necessitate the disqualification of the Schnader firm in this case.
Canon 9 of the Code of Professional Responsibility states: "A lawyer should avoid even the appearance of professional impropriety." The purpose of Canon 9 is to preserve public confidence in the bar and in the legal process. Therefore, a lawyer can be disqualified from representing a party if circumstances would suggest some impropriety. In the present case, the government argues that the fact of Schnader's prior representation of FMC employees who may now be called to testify against FMC creates an appearance of impropriety.
I am mindful of my duties to supervise the conduct of members of the bar who appear before me and to help maintain public confidence in the legal profession. Richardson v. Hamilton International Corporation, 469 F.2d 1382, 1385 (3d Cir. 1972). However, I do not believe that the facts of this case necessitate a disqualification of counsel for FMC on the basis of an appearance of impropriety. At the fact-finding hearing on this motion, the four former clients of Schnader testified that they had not divulged confidences to the Schnader lawyers. This testimony, coupled with the fact that it is the government rather than any interested present or former client of the Schnader firm who has brought this motion to disqualify, convinces me that no genuine appearance of impropriety exists.
The most substantial claim raised by the instant motion to disqualify current counsel for FMC is one based on the Sixth Amendment of the United States Constitution. The Sixth Amendment's guarantee that a criminal defendant have assistance of counsel "contemplates that such assistance be untrammeled and unimpaired." Glasser v. United States, 315 U.S. 60, 70, 62 S. Ct. 457, 465, 86 L. Ed. 680 (1942). That is, an attorney cannot provide effective assistance of counsel as required by the Sixth Amendment unless her undivided loyalties lie with her client. The government, appropriately concerned that this matter be decided before trial, contends that Schnader's prior representation of some potential government witnesses creates a conflict of interest which will hinder the law firm's ability to give effective representation to FMC. Specifically, the government argues that Schnader will not be able to thoroughly cross-examine witnesses who have previously been clients of the firm.
Relying primarily upon the recent decision of the Third Circuit in United States v. Dolan,
the government claims that the facts of this case present a serious and actual conflict of interest, that any waiver offered by FMC is not valid and that the Court need not accept that waiver because the conflict of interest involved in the case will impair Schnader's ability to conform with the Code of Responsibility and necessarily will result in inadequate representation of FMC.