Paul v. Judicial Watch, Inc., Civil Action No. 07-279(RCL).
| Decision Date | 16 July 2008 |
| Docket Number | Civil Action No. 07-279(RCL). |
| Parties | Peter F. PAUL, Plaintiff, v. JUDICIAL WATCH, INC., et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Larry Klayman, Miami, FL, for Plaintiff.
Richard Wayne Driscoll, Juli Z. Haller Simonyi, Driscoll & Seltzer, PLLC, Alexandria, VA, for Defendants.
Now comes before this Court defendants' Motion to Disqualify Opposing Counsel [Klayman] [21]. Upon consideration of defendants' motion [21], plaintiff's opposition [29], plaintiffs supplemental memorandum [30] and defendants' reply [31], all applicable law and the entire record herein, plaintiffs' motion [21] will be GRANTED.
Plaintiff Peter Paul ("Paul") filed the instant suit against Judicial Watch and the named defendants on February 6, 2007, alleging breach of contract, breach of fiduciary duty, violations of the standards of professional conduct, unjust enrichment violation of the Lantham Act and appropriation of name and likeness. (See Compl.) After this Court's order of February 6, 2008, granting in part and denying in part defendants' Motion to Dismiss [2], the remaining counts are limited to breach of contract against Judicial Watch and breach of fiduciary duty and violations of the standards of professional conduct with respect to Judicial Watch and defendant Paul Orfanedes. (See Ct. Order [9].) These remaining counts are all related to the legal services provided by Judicial Watch to Paul in connection with various legal proceedings. Judicial Watch provided these legal services pursuant to a legal representation agreement signed by the parties on March 20, 2001 and amended by the parties in April, 2002. It is undisputed that Mr. Larry E. Klayman, present counsel for plaintiff, signed the agreement and subsequent modification thereto (the "legal representation agreement," collectively) as "Chairman and General Counsel" of Judicial Watch.
In the case at bar, the Court must consider two questions in turn: first, whether a violation of an applicable Rule of Professional Conduct has occurred or is occurring, and if so, whether such violation provides sufficient grounds for disqualification.
Disqualification of counsel is uncommon, as evidenced by the relative paucity of case law directly on point. However, it is clear that "a federal court has the power to control admission to its bar and to discipline attorneys who appear before it." Chambers v. NASCO, Inc., 501 U.S. 32, 43, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) ). "[T]he district court bears responsibility for supervising the members of its bar and its exercise of this supervisory duty is discretionary." Groper v. Taff, 717 F.2d 1415, 1418 (D.C.Cir.1983). In addition,
[m]otions to disqualify are governed by two sources of authority. First, attorneys are bound by the local rules of the court in which they appear. Federal district courts usually adopt the Rules of Professional Conduct of the states where they are situated. Second, because motions to disqualify counsel in federal proceedings are substantive motions affecting the rights of the parties, they are decided by applying standards developed under federal law.
Cole v. Ruidoso Mun. Schools, 43 F.3d 1373, 1383 (10th Cir.1994) (citing In re American Airlines, Inc., 972 F.2d 605, 610 (5th Cir.1992) cert. denied sub nom. Northwest Airlines, Inc. v. American Airlines, 507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993)). See also Herrmann v. GutterGuard, Inc., 199 Fed.Appx. 745, 752 (11th Cir.2006). Courts must also "recognize of course that disqualification motions may be used as `procedural weapons' to advance purely tactical purposes." American Airlines, 972 F.2d at 611.
The District of Columbia Rules of Professional Conduct govern the practice of law in this District. See LCvR 83.15.
Rule 1.9 of the District of Columbia Rules of Professional Conduct provides that "[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 consent" (emphasis added). Based on the language of the rule, for this, Court to find a violation of Rule 1.9 in the present circumstances, three questions must be answered affirmatively.1 The first is whether the attorney accused of the violation is a "former attorney" with respect to a party presently before the court. If so, the second question is whether the subject matter of the former representation is the same as, or substantially related to, the present matter on which the alleged violation of Rule 1.9 is based. If so, the third question is whether the interests of the former client are adverse to the interests of the party represented by the attorney who is accused of violating Rule 1.9. These questions are essentially factual in nature and require careful review in each instance.
In many instances, including the case at bar, the answers to the first and third questions will be clear. With respect to whether a present matter is "the same or a substantially related" to the prior representation, the District of Columbia Rules of Professional Conduct provide additional guidance.
Rule 1.0(h) defines "matter" as: "any litigation . . . the drafting of a contract, a negotiation . . . or any other representation, except as expressly limited in a particular rule" (emphasis added). Comment [2] to Rule 1.9 explains that, while "[t]he scope of a `matter' for purposes of this rule may depend on the facts of a particular situation or transaction . . . [t]he underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question" (emphasis added). Comment [3] to Rule 1.9 provides that "matters are `substantially related' for purposes of [Rule 1.9] if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter" (emphasis added).
Applying the plain language of Rule 1.9, it is clear that Mr. Klayman's representation of Mr. Paul in the present case is an unambiguous violation thereof. It is uncontested that Mr. Klayman previously served as General Counsel of Judicial Watch and is no longer serving Judicial Watch in that capacity. Paul does not contest defendants' assertion that "Klayman directed and supervised negotiation and drafting of the Legal Representation Agreement." (Def.'s Mem. Ex. 10, 1-2.) Klayman is thus a former attorney with respect to Judicial Watch.
It is also plain that the interests of Paul and the defendants are materially adverse. One is a plaintiff who has named the other as a defendant. And, as is clear from the existence of the underlying motion, the defendants have not consented to Klayman's representation of Paul.
Turning to the second question above, it is clear to the Court that Mr. Paul's present action is at least substantially related to, if not the very same as, a matter in which Mr. Klayman previously represented Judicial Watch. As the complaint makes clear, each of Paul's remaining claims arise out of the legal representation agreement. The agreement is the very subject of Paul's breach of contract claim in Count I. (See Compl. ¶¶ 56-57.) The agreement is the source of the duty Paul alleges in his breach of fiduciary duty claim in Count II. (See Compl. ¶ 62.) And, the gravamen of Count III is that the defendants' actions which were undertaken pursuant to the legal representation agreement constituted a violation of the standards of professional conduct. (See Compl. ¶¶ 68-75.) This same agreement was negotiated at a time when Klayman served as General Counsel of Judicial Watch—and was signed by him in that capacity. The Court is thus satisfied that Mr. Klayman is attempting to represent Paul in a matter that is substantially related to a matter in which he represented Judicial Watch.
Succinctly put, Mr. Klayman is representing the current plaintiff in a matter directly arising from an agreement he signed in his capacity as General Counsel for the current defendant. Klayman's present representation of Paul is the very type of "changing of sides in the matter" forbidden by Rule 1.9 of the Rules of Professional Conduct.
Having found a clear violation of Rule 1.9 on the part of Mr. Klayman, the Court turns to whether this violation should result in the granting of defendants' motion to disqualify. A survey of relevant case law in this and other circuits reveals some ambiguity with respect to the standard for disqualification in the face of a violation of Rule 1.9 (or its equivalent).
Though not directly on point, in its most recent case on the subject our Circuit Court expressed agreement with the proposition "that disqualification is warranted only rarely in cases where there is neither a serious question as to counsel's ability to act as a zealous and effective advocate for the client, nor a substantial possibility of an unfair advantage to the current client because of counsel's prior representation of the opposing party." Koller v. Richardson-Merrell Inc., 737 F.2d 1038, 1056 (D.C.Cir.1984) (emphasis added) (internal citations omitted) ( other grounds). Discussing this standard in a different context from the case at bar, the Court indicated it was agreeing ...
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