United States District Court, E.D. Pennsylvania
SANTANDER SECURITIES LLC, et al. Plaintiffs,
GARY GAMACHE, Defendant.
S. DIAMOND, J.
Santander Securities LLC and Santander Bank, N.A. allege that
former employee Gary Gamache misappropriated their
confidential information and improperly solicited their
customers after taking a position with non-party Citizens
Securities, Inc. Acting at the direction of his new employer,
Gamache moves to disqualify Belcher Fitzgerald LLP,
Santander's counsel, alleging that the firm had
previously represented Citizens against its former employees
in similar restrictive covenant litigation. Even if Gamache
has standing to seek disqualification, because Belcher
Fitzgerald's prior representation of Citizens is not
substantially related to the present dispute, I will deny the
2009 to November 2016, Santander (and its corporate
predecessors) employed Gamache as a financial advisor.
(Verified Compl., Doc. No. 1, ¶ 5.) As a condition of
his employment, Gamache executed Santander's
“Enterprise-Wide Code of Conduct and Ethics” and
“Representative Employment Agreement.” (Verified
Compl. ¶¶ 15, 23 & Exs. A, B.) Both documents
required Gamache to keep Santander's corporate
information confidential, prohibited the information's
personal use, and obligated the return of confidential
information upon Santander's request. (Id., Ex.
A, §§ 8.2, 8.3; Ex. B, § 7.) The
Representative Agreement also prohibited Gamache from
soliciting former clients for twelve months after the
termination of his Santander employment. (Id., Ex.
B, § 8(b).)
November 2016, Gamache resigned from Santander and began work
as a financial advisor at Citizens, Santander's direct
competitor. (Verified Compl. ¶¶ 38-39.) Santander
alleges that Gamache kept proprietary customer lists and
other confidential information and improperly solicited his
Santander clients once he began at Citizens. (See
Verified Compl. ¶¶ 41-55). Accordingly, on January
23, 2017, Santander brought the instant five-count Complaint
against Gamache, alleging breach of the Code of Conduct and
the Representative Agreement, breach of fiduciary duty, trade
secret misappropriation, unfair competition, and violation of
the Defend Trade Secrets Act. (Verified Compl. ¶¶
58-78); 18 U.S.C. § 1836; 12 Pa. C.S. § 5302. That
day, Santander also initiated Financial Industry Regulatory
Authority arbitration proceedings, bringing the same claims
against Gamache as well as trade secret misappropriation,
unfair competition, tortious interference, and unjust
enrichment claims against Citizens. (See Belcher
Aff., Doc. No. 18-1, Ex. 1.)
initially asked me to enjoin Gamache from using its
confidential information and soliciting its clients pending
the resolution of the FINRA arbitration. (Doc. No. 4.) On
February 1, 2017, the Parties resolved the preliminary
injunction request and agreed to stay this litigation and
proceed with the FINRA arbitration after I determined whether
Belcher Fitzgerald should be disqualified. (Doc. No. 17.)
MOTION TO DISQUALIFY
Citizens is not a party before me, it readily acknowledges
its displeasure with Belcher Fitzgerald. According to
Citizens' “Senior Employment Counsel, ”
“[t]his is the first instance [the Belcher firm] has
appeared in a matter in an adversarial position to
[Citizens].” (Peterson Aff., Doc. No. 15-2,
¶¶ 1, 21.) Disavowing any “tactical”
motivation, Citizens directed its counsel, Jackson Lewis-the
same firm that represents Gamache-“to bring the instant
motion [to disqualify].” (Id. ¶¶ 23,
25.) On February 1, 2017 (the same day the Parties resolved
the injunction), Gamache moved to disqualify the Belcher
firm. (Doc. No. 15.) The matter has been fully briefed. (Doc.
Nos. 18, 19.)
material facts are undisputed. From 2009 to February 2015,
the Belcher firm represented Citizens in “non-customer
litigation matters (including all TRO and FINRA
matters)” that were similar to the instant dispute.
(Peterson Aff. ¶¶ 5, 8; Belcher Aff. ¶ 3.)
Between 2013 and 2015, the Belcher firm represented Citizens
in some ten FINRA noncompetition arbitrations. (Peterson Aff.
¶ 10.) The firm also authored numerous cease-and-desist
letters that did not lead to litigation. (Id. ¶
15.) Through their representation of Citizens in restrictive
covenant litigation, the firm acquired “intimate
knowledge of [Citizens'] processes and proprietary
information, ” including information regarding its
“trade secrets, ” “customer lists, ”
“corporate recruitment, ” “counseling of
new employees relative to their non-competition agreements,
” “financial reports, ” and related
information. (Id.¶ 12.) The firm also learned
Citizens' “methods of negotiating settlements,
” “litigation strategies, ” and its
litigation “playbook.” (Id. ¶¶
12, 26.) Citizens terminated the firm in mid-2015.
(Id. ¶ 18.)
does not contend that the Belcher firm ever represented him
or obtained any confidential information from him. Nor does
he contend that the firm had access to confidential
communications between Gamache and Citizens or any
confidential information concerning Citizens' decision to
hire him. Gamache does not contend that during its
representation of Citizens the firm acted adversely to
Santander. On the contrary, the Belcher firm represented
Santander in restrictive covenant matters at the same time it
represented Citizens. (Belcher Aff. ¶ 4.)
courts have inherent authority to supervise the conduct of
attorneys appearing before them.” Jordan v. Phila.
Hous. Auth., 337 F.Supp.2d 666, 671 (E.D. Pa. 2004). I
will apply the Pennsylvania Rules of Professional Conduct,
which this Court has adopted. Id. (quoting Henry
v. Del. River Joint Toll Bridge Comm'n, No. 00-6415,
2001 WL 1003224, at *1 (E.D. Pa. Aug. 24, 2001)); Local R.
Civ. P. 83.6(IV)(B).
is a harsh measure and is generally disfavored by the
court” because a party's “choice of counsel
is entitled to substantial deference” and because
motions to disqualify are often brought for tactical reasons.
AgSaver LLC v. FMC Corp., No. 11-997, 2011 WL
2274178, at *3 (E.D. Pa. June 9, 2011); Com. Ins. Co. v.
Graphix Hot Line, Inc., 808 F.Supp. 1200, 1203 (E.D. Pa.
1992). “[A] court should disqualify an attorney only
when it determines, on the facts of the particular case,
” after “consider[ing] the ends that the
disciplinary rule is designed to serve and any countervailing
policies, ” that “disqualification is an
appropriate means of enforcing the applicable disciplinary
rule.” Graphix Hot Line, 808 F.Supp. at 1203
(quoting United States v. Miller, 624 F.2d 1198,
1201 (3d Cir. 1980)). “To disqualify opposing counsel,
the moving party must clearly show that continued
representation would be impermissible.” AgSaver
LLC, 2011 WL 2274178, at *3 (quoting Reg'l
Employers' Assur. Leagues Voluntary Employees'
Beneficiary Ass'n ex rel. PennMont Ben. Servs., Inc. v.
Castellano, No. 03-6903, 2005 WL 856928, at *2 (E.D. Pa.
Apr. 12, 2005)). “Nonetheless, doubts regarding the
existence of an ethical rule violation should be construed in
favor of disqualification.” Id.
Professional Conduct Rule 1.9, which governs
disqualification, provides as follows:
A lawyer who has formerly represented a client in a matter
shall not thereafter represent another person in the same or
a substantially related matter in which that person's
interests are materially adverse to the interests of the
former client unless the former client gives informed
Pa. R.P.C. 1.9(a).
prevail here, Gamache must show: “(1) that a past
attorney/client relationship existed which was adverse to a
subsequent representation by the law firm of the other
client; (2) that the subject matter of the relationship was
substantially related; and (3) that a member of the law firm,
as attorney for the adverse party, acquired knowledge of
confidential information from or concerning the former
client, actually or by operation of law.” Estate of
Pew, 655 A.2d 521, 545-46 (Pa. Super. 1994); accord
Jordan, 337 F.Supp.2d at 672 (party seeking
disqualification must show: “(1) the former
representation is the same or substantially related to the