Cox v. American Cast Iron Pipe Co.

• Decision Date: 16 June 1988
• Docket Number: No. 87-7485,87-7485
• Citation: 847 F.2d 725
• Parties: 47 Fair Empl.Prac.Cas. 141, 57 USLW 2099 Annette COX, Mary Jane Seabury, Karen Williams, Brenda Morgan, Beverly Walker, Judy Lockard, Joyce Pandelis, Rebecca Self, Velma Waldrop, Martha (Beth) Earley, Glenda Glenn, Glenda Duncan, Daphne Johnson, Joyce Crane, Patricia Terry, Bernice Huffman, Jewell Smith, Jerri Ogletree, Belinda Black, Rhonda Edwards, Julia Womble, Mary Diane Lee, individually and on behalf of all other class members, et al., Plaintiffs-Appellants, v. AMERICAN CAST IRON PIPE COMPANY, a corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 725

847 F.2d 725

47 Fair Empl.Prac.Cas. 141, 57 USLW 2099

Annette COX, Mary Jane Seabury, Karen Williams, Brenda Morgan, Beverly Walker, Judy Lockard, Joyce Pandelis Rebecca Self, Velma Waldrop, Martha (Beth) Earley, Glenda Glenn, Glenda Duncan, Daphne Johnson, Joyce Crane, Patricia Terry, Bernice Huffman, Jewell Smith, Jerri Ogletree Belinda Black, Rhonda Edwards, Julia Womble, Mary Diane Lee individually and on behalf of all other class members, et al., Plaintiffs-Appellants, v. AMERICAN CAST IRON PIPE COMPANY, a corporation, Defendant-Appellee.

No. 87-7485.

United States Court of Appeals Eleventh Circuit.

June 16, 1988.

Robert L. Wiggins, Jr., Birmingham, Ala., for plaintiffs-appellants.

Robert G. Tate, J. Patrick Logan, F.A. Flowers, III, Burr & Forman, Birmingham, Ala., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before VANCE and EDMONDSON, Circuit Judges, and TUTTLE, Senior Circuit Judge.

TUTTLE, Senior Circuit Judge:

This case presents an appeal from an order disqualifying the plaintiffs' attorney, Robert L. Wiggins, Jr. We find that we have jurisdiction ¹ and reverse.

STATEMENT OF FACTS

Fifteen years ago Annette Cox and others sued the American Cast Iron Pipe Company (ACIPCO) for sex discrimination under Title VII. Following an adverse ruling in 1984, see Cox v. American Cast Iron Pipe Co., 585 F.Supp. 1143 (N.D.Ala.1984), rev'd in part and vacated in part, 784 F.2d 1546 (11th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 274, 93 L.Ed.2d 250 (1986), the original counsel for the plaintiffs withdrew and Wiggins was hired to prosecute the appeal to this court. He has continued to represent the plaintiffs after the successful appeal and remand to the district court.

ACIPCO is represented by the law firm of Burr & Forman. ² Between 1972-1980 Burr & Forman employed a lawyer named Robert F. Childs, Jr., first as an associate and then as a partner. While Childs worked for the firm, ACIPCO was involved in a substantial amount of Title VII litigation. Chief among the cases was Pettway v. American Cast Iron Pipe Co., 721 F.2d 315 (11th Cir.1983), cert. denied sub nom. Daniel v. Pettway, 467 U.S. 1243, 104 S.Ct. 3515, 82 L.Ed.2d 824 (1984), a lawsuit involving claims of race discrimination that reached this court six times during its 18 year career. Between 1978-1980 Childs worked extensively on the Pettway case, and in 1980 he negotiated a consent decree with Wiggins, who also represented the Pettway plaintiffs. In addition, Childs billed ACIPCO for 52 hours of work on this (the Cox ) case in 1980. Childs instructed ACIPCO management on the procedures for conducting a pre-certification poll and filed a motion requesting the district court to continue the class certification hearing.

On October 16, 1980, Childs left Burr & Forman and for the next five years practiced law by himself. On October 15, 1985, Childs merged his practice with that of Wiggins, both lawyers becoming partners in the firm of Gordon, Silberman, Wiggins & Childs. Shortly before the merger, with the initial Cox appeal pending, Wiggins and Childs asked Burr & Forman if it objected to the merger. The firm indicated that it did not. Gordon, Silberman then adopted a policy segregating Childs from all aspects of the Cox litigation, denying him access to meetings, communications, documents, and fees, and completed the merger.

In 1986, the ever present Wiggins became plaintiffs' counsel in Beavers v. American Cast Iron Pipe Co., No. CV 86-AR-1982-S (N.D.Ala. filed Oct. 24, 1986), a sex discrimination case brought by several male employees of ACIPCO. Shortly thereafter, the district court sua sponte "raised the possibility of a conflict of interest by Mr. Wiggins' firm ... occasioned both by Mr. Wiggins' association with Mr. Childs and by the potential for conflict between Beavers and his putative male class and Cox and her certified female class." Cox v. American Cast Iron Pipe Co., No. CV 74-AR-469-S, mem. op. at 3 (N.D.Ala. May 7, 1987) [Cox II ]. ACIPCO addressed the conflict issue in a December 19, 1986 letter to the district court. The letter did not mention any conflict problems arising from the partnership of Wiggins and Childs and specifically stated that "it does not appear that [Wiggins'] representation of employee classes and individuals in employment discrimination litigation against [ACIPCO] presents an actual conflict of interest with respect to [ACIPCO]." (R 1-8 App. H). Nevertheless, in order to alleviate the district court's concerns, Wiggins and his firm withdrew from representing the male plaintiffs in Beavers.

Following the May 5, 1986 remand in this case, both sides began preparing for the re-trial on "back pay" mandated by this court. See Cox, 784 F.2d at 1562-63. Discovery commenced on June 3, 1986 and a pre-trial conference was held approximately three weeks later. Formal settlement negotiations began in January 1987. Because the negotiations proved unsuccessful, the district court set the cause for trial on May 18, 1987. On April 16, 1987, however, Burr & Forman filed a motion to disqualify Wiggins as counsel for the Cox plaintiffs because of his partnership with Childs. The district court, after holding an evidentiary hearing, granted the disqualification motion. From this decision the plaintiffs appeal.

DISCUSSION

We review this case by "applying the 'clearly erroneous' test to issues of fact while carefully examining a [d]istrict [j]udge's application of relevant legal standards." Woods v. Covington County Bank, 537 F.2d 804, 810 (5th Cir.1976) ³; see also United States v. Hobson, 672 F.2d 825, 827 (11th Cir.), cert. denied, 459 U.S. 906, 103 S.Ct. 208, 74 L.Ed.2d 166 (1982). As is the situation in many disqualification cases, the pertinent facts here are largely undisputed. "Consequently, we are empowered in this case to determine whether the [d]istrict [c]ourt's disqualification order was predicated upon a proper understanding of applicable ethical principles." Woods, 537 F.2d at 810.

Canon 4 of the American Bar Association's Code of Professional Responsibility ⁴ obligates an attorney to preserve the confidences and secrets of both current and former clients. The purpose of the rule, of course, is to encourage communication between the client and attorney. "Whenever an attorney seeks to represent an interest adverse to that of the former client, the possibility arises that the attorney, whether intentionally or inadvertently, will reveal to his present client confidential information entrusted to him during his previous representation." Duncan v. Merrill Lynch, Pierce, Fenner & Smith, 646 F.2d 1020, 1027 (5th Cir. Unit B), cert. denied, 454 U.S. 895, 102 S.Ct. 394, 70 L.Ed.2d 211 (1981). Thus, whenever an attorney opposes a former client, the attorney-client relationship sought to be promoted by Canon 4 is implicated.

The ethical rules do not preclude an attorney from ever representing an interest adverse to that of a former client, however. Using Canon 4 as a guide, this court has developed a two-prong test for disqualification of counsel: first, the party seeking disqualification must prove that it once enjoyed an attorney-client relationship with the opposing lawyer; and second, the movant must " 'show that the matters embraced within the pending suit are substantially related to the matters or cause of action wherein the attorney previously represented [it].' " Id. at 1028 (quoting Wilson P. Abraham Constr. Corp. v. Armco Steel Corp., 559 F.2d 250, 252 (5th Cir.1977). This test recognizes that many times there exists no genuine threat that any confidences of the former client would be disclosed to its adversary. At the same time, however, it prevents the client from being forced to reveal the confidences as a prerequisite to disqualification of its former attorney.

Because the test developed under Canon 4 seeks to protect the former client, that client may either explicitly or implicitly waive its benefits. As the court stated in In re Yarn Processing Patent Validity Litigation, 530 F.2d 83, 89 (5th Cir.1976):

A former client may consent to the employment of the attorney by an adverse party even where the former client is involved in the case as a party.... [T]his might typically occur where the former client realizes that any prior disclosures will not prejudice him in the new case. Such consent will prevent the disqualification of the attorney even in a criminal case.

Moreover, a failure to make a timely objection may also result in a waiver. See id. at 90; see also Trust Corp. v. Piper Aircraft Corp., 701 F.2d 85, 87-88 (9th Cir.1983); Redd v. Shell Oil Co., 518 F.2d 311, 316 (10th Cir.1975); Glover v. Libman, 578 F.Supp. 748, 760 (N.D.Ga.1983).

A motion to disqualify should be made with reasonable promptness after a party discovers the facts which lead to the motion. A litigant may not delay filing a motion to disqualify in order to use the motion later as a tool to deprive his opponent of counsel of his choice after substantial preparation of the case has been completed.

Jackson v. J.C. Penney Co., 521 F.Supp. 1032, 1034-35 (N.D.Ga.1981) (citations omitted).

Canon 9 of the ethical rules states that "[a] lawyer should avoid even the appearance of professional impropriety." ⁵ Under its strictures lawyers may be disqualified if the court finds (1) some specifically identifiable appearance of improper conduct and (2) that "the likelihood of public suspicion or obloquy outweighs the social interest which will be served by a lawyer's continued participation in a particular case." Woods, 537 F.2d at 813 & n. 12. Canon 9 is designed not to protect the former client but to preserve the public's confidence in the judicial system and the legal profession. See id. at 813. Because the benefits of the rule extend to the public at large, a party to litigation cannot waive its violation. See Hobson, 672 F.2d at 829.

The district...