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NORFOLK SOUTHERN RAILWAY v. READING BLUE MOUNTAIN & N. R.R.

October 25, 2005.

NORFOLK SOUTHERN RAILWAY COMPANY, Plaintiff,
v.
READING BLUE MOUNTAIN & NORTHERN RAILROAD COMPANY, Defendants.



The opinion of the court was delivered by: JAMES MUNLEY, District Judge

MEMORANDUM

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.

I. Background

  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 RBMN;
(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 RBMN [Reading];
(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.)

  I. Discussion

  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 confidentiality.

 
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 disqualified attorneys
4. the nature of the disqualified attorney's involvement
5. the timing of the wall.
Dworkin v. General Motors Corporation, 906 F. Supp. 273, 279 (E.D. Pa. ...

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