United States District Court, M.D. Pennsylvania
October 25, 2005.
NORFOLK SOUTHERN RAILWAY COMPANY, Plaintiff,
READING BLUE MOUNTAIN & NORTHERN RAILROAD COMPANY, Defendants.
The opinion of the court was delivered by: JAMES MUNLEY, District Judge
Presently before the Court for disposition is Defendant Reading
Blue Mountain & Northern Railroad Company's motion to disqualify
Janssen & Keenan, P.C. as counsel for Plaintiff Norfolk Southern
Railway Company in the present case. This matter has been fully
briefed and is ripe for disposition. For the following reasons,
we will grant the motion and disqualify Janssen & Keenan.
On May 1, 2003, Jansen & Keenan filed the Complaint on behalf
of Norfolk against Reading in the instant action. On June 3,
2003, Charles Howard Esq. of Gollatz, Griffen, & Ewing, P.C.
entered his appearance as defense counsel and filed a Motion to
Dismiss the Complaint. Howard signed the Brief in Support, and
subsequently signed a notice to the Court withdrawing the motion
and submitting the case to arbitration. On August 11, 2003,
Reading submitted the Answer with Howard's signature.
On April 23, 2004, Reading filed a Motion to for Partial
Summary Judgment signed by Howard. Howard also signed Reading's
Brief in Support and Reply Brief. At oral argument, Howard represented Reading. On December 2, 2004, this Court
granted Reading's Motion for Partial Summary Judgment, and
Norfolk responded by filing a Motion for Reconsideration. Howard
submitted Norfolk's Brief in Opposition.
On May 19, 2005, while this Court's resolution of Norfolk's
Motion for Reconsideration was pending, Howard spoke on the phone
with Norfolk's lead counsel, Jeffrey Cohen, and indicated that he
was interested in obtaining a position with Janssen & Keenan.
(Pl. Ex. B. Howard Aff. ¶ 3.) Cohen referred him to Paul Keenan.
(Id. at ¶ 4.) On May 25, 2005, Howard received an offer for
employment from Janssen & Keenan. (Id. at ¶ 5.) On May 26,
2005, Howard spoke with Eric Hocky, the lead partner at Gollatz,
Griffen, & Ewing about his offer of employment, and Hocky
explained that he would ask Reading if it had an objection to
Howard's employment with Janssen & Keenan. (Id. at ¶ 6.)
On June 3, 2005, Keenan called Hocky to discuss the screening
measures he would implement at Janssen & Keenan. (Def. Ex. A
Hocky Aff. ¶ 6.) Later that day, Keenan sent Hocky a letter
outlining the screening procedures. (Def. Ex. A, Hocky Aff. ¶ 8;
Pl. Ex. D, June 3, 2005 Letter from Keenan to Hocky.) These
procedures were as follows:
(i) Mr. Howard will, while employed by this firm,
never represent any party in a matter adverse to
(ii) Mr. Howard will have no access to any files in
any way related to pending litigation, or any other
matter, which involves both Norfolk Southern and the
(iii) All personnel of this firm are under strict
written instructions not to discuss or reference any
matter involving RBMN with Mr. Howard;
(iv) Mr. Howard will not work on any matters on
behalf of Norfolk Southern which involve Norfolk
Southern's relations with short line railroads.
(Pl. Ex. D, June 3, 2005 Letter from Keenan to Hocky.) In addition, Keenan assured Hocky that he instructed Howard to
immediately notify him if he inadvertently became involved in a
matter adverse to Reading, and Keenan promised to relay this
information to Hocky. (Id.)
Wayne A. Michel, president of Reading was out of town between
June 2 and June 6, 2005. (Def. Ex. B. Michel Aff. ¶ 2.) Had he
been informed of Howard's potential employment with Janssen &
Keenan, he would have objected. (Id. at ¶ 6.)
By June 6, 2005, Howard had not received an objection from
Hocky or Reading, and began work for Janssen & Keenan. (Howard
Aff. at ¶ 8.) Since Howard began working at the Janssen & Keenan,
the firm's files relating to this case have remained in a locked
cabinet separate from all other files. (Pl. Ex. C, Keenan Aff. ¶
8.) Keenan and the firm administrator possess the only two keys
to this cabinet. (Id.) The firm also circulated written
instructions to all personnel to refrain from discussing with
Howard any matter involving Reading. (Id.) Cohen and Keenan are
the only individuals in the firm who possess information about
the file of this case. (Id.)
This Court has adopted the Rules of Professional Conduct
("Rules") as adopted by the Pennsylvania Supreme Court. UNITED
STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
LOCAL RULE 83.23.2. Rule 1.10(b) provides that conflicts of
interests of an attorney transferring to a new law firm are
imputed to the firm, unless the firm can adopt appropriate
screening measures to ensure the preservation of client
When a lawyer becomes associated with a firm, the
firm may not knowingly represent a person in the same or
substantially related matter in which that lawyer, or
a firm with which the lawyer was associated, had
previously represented a client whose interests are
materially adverse to that person and about whom the
lawyer had acquired information protected by Rule 1.6
and 1.9(b) that is material to the matter unless:
(1) the disqualified lawyer is screened from any
participation in the matter and is apportioned no
part of the fee therefrom; and
(2) written notice is promptly given to the
appropriate client to enable it to ascertain
compliance with the provision of this rule.
Rules of Professional Conduct 1.10(b) .
The firm whose disqualification is sought bears the burden to
demonstrate compliance with Rule 1.10(b).*fn1 Dworkin v.
General Motors Corp., 906 F. Supp. 273, 279 (E.D. Pa. 1995).
Norfolk argues that it has met its burden to establish compliance
with Rule 1.10(b). It argues that Howard promptly provided
Reading with written notice of his proposed employment action and
the ethics screen. It argues that the relatively small size of
Janssen & Keenan does not preclude an effective screen.*fn2
Janssen & Keenan has not met its burden to establish compliance
with Rule 1.10(b). As an initial matter, nowhere in the
affidavits opposing disqualification does it assert that Howard
will receive no part of the fee from its representation in this
case. This failure alone warrants disqualification. Furthermore, it has not established that the
screen will be effective. The effectiveness of an ethics screen
is determined by the following factors:
1. The substantiality of the relationship between the
attorney and the former client
2. the time lapse between the matters in dispute
3. the size of the firm and the number of
4. the nature of the disqualified attorney's
5. the timing of the wall.
Dworkin v. General Motors Corporation, 906 F. Supp. 273, 279
(E.D. Pa. 1995) (quoting Maritans GP, Inc. v. Pepper, Hamilton &
Scheetz, 602 A.2d 1277, 1289 (Pa. 1992) (Nix. J., dissenting)).
In addition, the wall itself must satisfy the following criteria,
1. the prohibition of discussion of sensitive matters
2. restricted circulation of sensitive documents
3. restricted access to files
4. strong firm policy against breach, including
sanctions, physical and/or geographical separation
A thorough review of these factors establishes that the screen
is ineffective in the present circumstances. First, and foremost,
there is no time lapse whatsoever between Howard's representation
of Reading and his employment with Janssen & Keenan. Howard left
his client after the Court granted partial summary judgment and
before trial. Additionally, the substantiality of the
relationship between Howard and Reading, the nature of Howard's
involvement in the present case, and Janssen & Keenan's size all
weigh in favor of disqualification. Howard was the lead counsel
for Reading. He filed the answer, a partial motion for summary
judgment, a brief in support, and a reply brief, a brief in
opposition to a motion for reconsideration, and appeared at oral
argument on behalf of Reading. Thus, he had a substantial
relationship with Reading and a significant role in this case.
Furthermore, Janssen & Keenan have ten attorneys in one office, certainly qualifying
as a small firm.
Some elements of the screen weigh against disqualification.
First, it was implemented immediately upon Howard's transfer to
Janssen & Keenan. Furthermore, the screen's prohibition of
discussion of sensitive matters, restricted circulation of
sensitive documents, and restricted access to files weigh against
disqualification. The screen prevents members of the firm from
discussing any matter involving Reading with Howard. It limits
access to documents relating to this case to Keenan and Cohen. It
also precludes Howard from accessing files related to this case
or any other matter involving Norfolk and Reading.
The final quality for an effective screen, however, is not
present. An effective screen should have a "strong firm policy
against breach, including sanctions, physical and/or geographical
separation." Dworkin, 906 F. Supp. at 279. In Dworkin, the
court found a screen effective because it provided, "There is an
absolute prohibition of any conversations with, around, near, or
in the presence of the screened attorney concerning or relating
to the screened files, and/or matters. Any employee who violates
this policy will be terminated and will be subject to
disciplinary proceedings." Id. at 280. Janssen & Keenan's
screen included no such strong policy. The screen provides, "All
personnel of this law firm are under strict written instruction
not to discuss or reference any matter involving [Reading] with
Mr. Howard." (Pl. Ex. D, Keenan Letter to Hocky, June 6, 2005).
This screen does not include the prospect of termination or
disciplinary proceedings for violators. This is significant
because it is imperative that all Janssen & Keenan employees
understand the importance of compliance and that Reading be
assured that non-compliance will be severely punished.
Additionally, unlike the screen in Dworkin, Janssen & Keenan's screen fails to
expressly prohibit discussing sensitive matters around, near, or
in the presence of Howard, and merely prohibits discussing them
with Howard. This is no small distinction, as Janssen & Keenan
has only ten attorneys in a single office, and the close working
environment presents the distinct possibility that Howard could
be nearby and overhear a sensitive discussion.
In James v. Teleflex Inc., No.CIV.A.97-12306, 1999 WL 98559,
at * 1 (E.D. Pa. Feb. 24, 1999) attorney Edward Dunham was the
lead counsel for Teleflex, and in the midst of the litigation,
his firm merged with Duane Morris, the firm representing the
Plaintiff James. Id. at *1. Dunham then withdrew as counsel for
the defense, and Duane Morris continued to represent the
plaintiff. Id. Teleflex moved to disqualify Duane Morris,
arguing that Dunham's conflict of interested was imputed to the
entire firm and his employment there warranted disqualification.
Id. at *1-2. The court found that Duane Morris implemented a
facially sufficient screen, but held that other factors weighed
in favor of disqualification. Id. at *6. It noted that the lack
of a time lapse between the representations, the nature of the
disqualified attorney's involvement in the case, and his
substantial relationship with Teleflex all weighed in favor of
disqualification. Id. It concluded, "the Court's interest in
protecting the integrity of the proceedings and maintaining
public confidence, as well as Teleflex's interest in attorney
loyalty, would best be served by disqualification in this case."
Id. at 7. These interests outweighed the plaintiff's risk of
prejudice because the disqualification had no effect on the
summary judgment motion, the trial date had not yet been set, and
the court allowed the plaintiff sufficient time to retain
counsel. Similarly, we find that the competing concerns behind Rule
1.10(b) warrant disqualification under the present circumstances.
See U.S. v. Miller, 624 F.2d 1198, 1201 (3d Cir. 1980)
(holding that courts should consider "the ends that the
disciplinary rule is designed to serve an any countervailing
policies" in determining whether disqualification is an
appropriate means of enforcing an ethics rule).
There are several competing considerations. First,
the client previously represented must be reasonably
assured that the principle of loyalty is not
compromised. Second, the rule of disqualification
should not be so broadly cast as to preclude other
persons from having reasonable choice of legal
counsel. Third, the rule of disqualification should
not unreasonably hamper lawyers from forming new
associations and taking on new clients after having
left a previous association.
Rule 1.10(b) cmt.
Reading's interest in attorney loyalty weighs heavily in favor
of disqualification, because the present situation severely
undermines the integrity of the attorney-client relationship. If
a client believes his attorney is free to abandon him in for
employment with opposing counsel without fear of disqualification
of opposing counsel, the client would have no reason to be
assured that his attorney would be loyal, and the candor between
the client and attorney would be severely compromised. In such a
situation, clients would be wise to provide as little information
as possible to their attorneys for fear that the next day they
would work for the opposition. Furthermore, Janssen & Keenan's
screen provides no internal punishment for those who violate the
screen, further undermining Reading's confidence in Howard's
Under the second consideration, disqualification would not
preclude other persons from having a reasonable choice of legal counsel. The
circumstances here are unique and hopefully rare. In the middle
of a pending litigation, the law firm representing the plaintiff
hired the defendant's lead counsel. Disqualification would affect
only this litigation and the parties presently involved. While
Norfolk may not employ Janssen & Keenan, we do not feel that
Norfolk will be deprived of a reasonable choice of counsel
because they are free to obtain any other counsel. Norfolk's
interests in this litigation will not be prejudiced because
summary judgment had already been decided when the disqualifying
event occurred and the disqualifying event had no impact on this
Court's resolution of the motion for reconsideration. The trial
date is not yet set, and we will allow Norfolk sufficient time to
obtain replacement counsel and for replacement counsel to prepare
Finally, disqualification under these circumstances would not
unreasonably hamper lawyers from forming new associations and
taking on new clients after having left a previous association.
Rather, it would prevent lawyers from switching sides in the same
litigation. Under our holding, Howard's limitations are narrowly
circumscribed to the present circumstances, and he would be free
to work for any other firm, and even free to work for Janssen &
Keenan. However, he is not free to work for Janssen & Keenan
while Janssen & Keenan continue to represent Norfolk in the same
case where he previously was the lead opposing counsel.
In conclusion, in the facts presently before the Court, the
interests in client loyalty and the integrity of court
proceedings outweigh Norfolk's interests in counsel of its choice
and Howard's interests in mobility within the legal
profession.*fn3 Therefore, we will disqualify Janssen &
Keenan from representing Norfolk in the instant case. An
appropriate order follows.
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