Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, In re

• Decision Date: 23 November 1981
• Docket Number: Nos. 80-5970,s. 80-5970
• Citation: 658 F.2d 1355
• Parties: 1981-2 Trade Cases 64,323 In re COORDINATED PRETRIAL PROCEEDINGS IN PETROLEUM PRODUCTS ANTITRUST LITIGATION. The CITY OF LONG BEACH, as Trustee for the State of California; State of California, on behalf of itself and all political subdivisions and special districts within the state similarly situated; State of Florida, ex rel. Jim Smith, Attorney General; State of Oregon, on behalf of itself, its residents and all political subdivisions within the state similarly situated; State of Washington, on behalf of itself and its public entities and residents; and State of Arizona, Plaintiffs-Appellees, v. STANDARD OIL COMPANY OF CALIFORNIA; Amerada Hess Corporation; Cities Services Company and Cities Service Oil Company; Conoco, Inc.; Getty Oil Company; Gulf Oil Corporation; Powerline Oil Company; Standard Oil Company of Indiana and Ohio; Sun Oil Company, Inc.; Atlantic Richfield Company; Mobil Oil Corporation; Phillips Petroleum Company; Exxon Corporation; Shell Oil Company; Texaco, Inc.; and Union Oil Company of California, Defendants-Appellants, and Leroy K. Cheney; Charles F. Temme; Milford E. Tracy; Clinton E. Kelley; L. John Gandsey; and Ralf Eckles, Third Party Deponents-Appellants. MOBIL OIL CORPORATION; Exxon Corporation; Leroy K. Cheney; Ralf Eckles; L. John Gandsey; Clinton E. Kelley; Charles F. Temme; Milford E. Tracy; Union Oil Company of California; Howard K. Said; and Brobeck, Phleger and Harrison, Petitioners, v. The UNITED STATES DISTRICT COURT FOR the CENTRAL DISTRICT OF CALIFORNIA, Respondent, State of California; et al., Real Parties In Interest. to 80-6028, 80-7669, 80-7756, 81-7013 and 81-7029.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1355

658 F.2d 1355

1981-2 Trade Cases 64,323

In re COORDINATED PRETRIAL PROCEEDINGS IN PETROLEUM PRODUCTS ANTITRUST

LITIGATION. The CITY OF LONG BEACH, as Trustee for the State

of California; State of California, on behalf of itself and

all political subdivisions and special districts within the

state similarly situated; State of Florida, ex rel. Jim

Smith, Attorney General; State of Oregon, on behalf of

itself, its residents and all political subdivisions within

the state similarly situated; State of Washington, on behalf

of itself and its public entities and residents; and State

of Arizona, Plaintiffs-Appellees, v. STANDARD OIL COMPANY OF CALIFORNIA; Amerada Hess

Corporation; Cities Services Company and Cities Service Oil

Company; Conoco, Inc.; Getty Oil Company; Gulf Oil

Corporation; Powerline Oil Company; Standard Oil Company of

Indiana and Ohio; Sun Oil Company, Inc.; Atlantic Richfield

Company; Mobil Oil Corporation; Phillips Petroleum Company;

Exxon Corporation; Shell Oil Company; Texaco, Inc.; and

Union Oil Company of California, Defendants-Appellants,

and

Leroy K. Cheney; Charles F. Temme; Milford E. Tracy; Clinton

E. Kelley; L. John Gandsey; and Ralf Eckles, Third

Party Deponents-Appellants.

MOBIL OIL CORPORATION; Exxon Corporation; Leroy K. Cheney;

Ralf Eckles; L. John Gandsey; Clinton E. Kelley; Charles F.

Temme; Milford E. Tracy; Union Oil Company of California;

Howard K. Said; and Brobeck, Phleger and Harrison, Petitioners, v. The UNITED STATES DISTRICT COURT FOR the CENTRAL DISTRICT OF

CALIFORNIA, Respondent,

State of California; et al., Real Parties In Interest.

Nos. 80-5970 to 80-6028, 80-7669, 80-7756, 81-7013 and 81-7029.

United States Court of Appeals Ninth Circuit.

Argued and Submitted July 6, 1981.

Decided Oct. 13, 1981.

As Amended on Denial of Rehearing Nov. 23, 1981.

Maxwell M. Blecher, Blecher, Collins & Hoecker, Los Angeles, Cal., for City of Long Beach, et al.

Andrew J. Kilcarr, Donovan, Leisure, Newton & Irvine, Washington, D. C., for Mobil and Getty Oil Corps.

Michael I. Spiegel, Deputy Atty. Gen., San Francisco, Cal., for all plaintiff States.

Appeal from the United States District Court for the Central District of California.

Before GOODWIN and NELSON, Circuit Judges, and PRICE, ^* District Judge.

GOODWIN, Circuit Judge.

The district court, on the motion of the plaintiffs, entered an order disqualifying defense counsel from representing former employees of the defendants and their present employees (other than corporate executives) in connection with discovery depositions in several consolidated multi-district antitrust cases. The defendant corporations and the employee witnesses appeal. We find that we have jurisdiction of this appeal and vacate the order of disqualification. 502 F.Supp. 1092.

I. JURISDICTION.

The proliferation of interlocutory appeals seeking review of orders entered at various stages of litigation has produced sometimes conflicting decisions among the circuits on the jurisdictional basis for appellate review. Denial of a motion to disqualify counsel is not an appealable order under the test set forth in Cohen v. Beneficial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981). Firestone reserved the question of the appealability of orders granting a motion to disqualify counsel. 449 U.S. at 372, n.8, 101 S.Ct. at 672, n.8.

The position of this circuit on the pending question is not clear. Even prior to Firestone, the Ninth Circuit did not hear appeals from denials of motions to disqualify. See Chugach Elec. Ass'n v. United States D. C. For Dist. of Alaska, 370 F.2d 441 (9th Cir. 1966), cert. denied, 389 U.S. 820, 88 S.Ct. 40, 19 L.Ed.2d 71 (1967). But this court has reviewed at least one order granting disqualification without discussing whether it was taking jurisdiction under the Cohen exception to 28 U.S.C. § 1291 or via mandamus. See Gas-A-Tron of Arizona v. Union Oil Co. of California, 534 F.2d 1322 (9th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976). Since Firestone the Fifth Circuit has held a disqualification order appealable under Cohen and Firestone. Duncan v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 646 F.2d 1020 (5th Cir. 1981).

We agree that this order granting disqualification is appealable under Cohen's three-part test. Firestone summarized the Cohen test as follows:

"... '(T)he order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment.' (citation omitted)." 449 U.S. at 375, 101 S.Ct. at 674.

Under the first prong, we note that the Firestone Court, with two justices dissenting, found that even "(a)n order denying a disqualification motion meets the first part of the 'collateral order' test. It 'conclusively determine(s) the disputed question,' because the only issue is whether challenged counsel will be permitted to continue his representation...." 449 U.S. at 375-76, 101 S.Ct. at 674 (emphasis added). This consideration becomes stronger in cases where a disqualification motion has been granted, because once those affected by the order have acted on it bringing in new counsel, for instance the effect of the order is fairly irreversible. ¹ It is not, as a practical matter, "subject to reconsideration from time to time," Cohen, supra, 337 U.S. at 546-47, 69 S.Ct. at 1226, because once a person's chosen attorney has been barred from representing that person, the person must then and there materially change his or her position in retaining another attorney or choosing to forego representation. Cf. Firestone, 449 U.S. at 380, 101 S.Ct. at 677 (Rehnquist, J., concurring in result only) (denial of disqualification motion does not conclusively determine disputed question where court may reconsider issue as trial progresses). The effect here is immediate and conclusive.

Second, the grant of a motion to disqualify counsel serves to "resolve an important issue completely separate from the merits of the action," Firestone, supra, 449 U.S. at 375, 101 S.Ct. at 674. It is not merely a step toward a final judgment into which it will merge. Cohen, supra, 337 U.S. at 546, 69 S.Ct. at 1225. The question whether counsel should be disqualified is a legal issue distinct and separate from the underlying antitrust issues involved in this case. It is not so enmeshed in the factual and legal issues comprising the plaintiff's cause of action, nor of such a nature as to permit fair assessment only after trial, as to militate against review at this time. Rather, given the magnitude of these consolidated pretrial proceedings, the number of attorneys already involved, and the seriousness of the question presented, we feel that this claim falls into the "small class (of cases) ... too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Cohen, supra, 337 U.S. at 546, 69 S.Ct. at 1225, 1226.

Third, if this court withholds review at this time, the order of disqualification will be unreviewable on appeal from final judgment. The rights involved will be lost irreparably in a manner where, unlike the situation in Firestone, see 449 U.S. at 376-77, 101 S.Ct. at 675, remedy of a new trial after appeal from final judgment would not adequately redress any injury. See Duncan, supra, 646 F.2d at 1027. Furthermore, litigants facing a disqualification order do not have available to them the protection cited by the Firestone Court as a rationale for denying review of most pretrial discovery orders: "(I)n the rare case when appeal after final judgment will not cure an erroneous discovery order, a party may defy the order, permit a contempt citation to be entered against him, and challenge the order on direct appeal of the contempt ruling." 449 U.S. at 377, 101 S.Ct. at 675. An attorney choosing to defy a disqualification order faces not only contempt sanctions but direct disciplinary action for an ethical violation. This differs markedly from the case where an attorney in good faith takes the position that his client should not be required to comply with a discovery order; at least in that instance, the lawyer is not required to engage in what amounts to an act of civil disobedience with personal consequences in order to obtain review.

This court has held that an order disqualifying defense counsel in a criminal case is not appealable under the collateral order exception to the final judgment rule. United States v. Greger, 657 F.2d 1109, 1112 (9th Cir. 1981). That holding, however, was specifically limited to the context of a criminal case, and reserved the question presented here. Id. at 1113.

Distinct reasons for a different result apply in this civil case. The special policies which counsel against piecemeal appeals in criminal cases have no counterpart here. Cf. Greger, supra, at 1112. An appeal of a disqualification order in a civil case does not necessarily disrupt the litigation because activity must be postponed in any case while new counsel is obtained. Furthermore, in a civil case an order disqualifying attorneys for nonparties is effectively unreviewable by appeal from a final judgment. Finally, in a civil case, the presumption of prejudice which would mandate a new trial if error were established under the criminal law does not exist. Cf. Greger, supra, at 1113; Slappy v. Morris, 649 F.2d 718 at 723 n.4 (9th Cir. 1981).

It would place an almost insurmountable burden on a person who is not a party to the litigation to vindicate a right to counsel of his choice. Even a party would face serious difficulties if he were required to show on appeal from the final judgment that he had lost the case because he had been improperly forced to change counsel. Duncan v. Merrill Lynch, Pierce,...