Reardon v. Marlayne, Inc.

• Decision Date: 31 October 1978
• Parties: Margaret REARDON and Daniel Reardon, Plaintiffs, v. MARLAYNE, INC. t/a Bear Brake Palisades and General Motors Corporation, Defendants.
• Court: New Jersey Superior Court

Page 529

163 N.J.Super. 529

395 A.2d 255

Margaret REARDON and Daniel Reardon, Plaintiffs, v. MARLAYNE, INC. t/a Bear Brake Palisades and General Motors

Corporation, Defendants.

Superior Court of New Jersey, Law Division.

Oct. 31, 1978.

Thomas L. Morrissey, Newark, for defendant moving party (Carpenter, Bennett & Morrissey, Newark, attorneys).

John E. Patton, Belleville, for respondent (Gaccione, Pomaco, Patton & Beck, Belleville, attorneys).

BILDER, J. S. C.

This is a motion by a defendant in a product liability suit to force the removal of plaintiffs' attorney (and his firm) from the case on the ground that he is disqualified by virtue of confidences made known to him at an earlier time as an attorney representing that defendant in defense of similar suits.

Defendant General Motors Corporation (GM) is represented by Carpenter, Bennett & Morrissey (CBM), a firm averaging some 19 members and 23 associates, in the defense of a product liability case involving allegations of a faulty automobile braking system. Plaintiffs are represented by the firm of Gaccione, Pomaco, Patton & Beck, one of whose members, John E. Patton (respondent), was employed as an associate of CBM for a period of some ten years, during which time CBM represented GM in the defense of numerous other product liability suits. Respondent left CBM in April 1976. The present suit, in which respondent is playing a significant part, was instituted in May 1978.

It is the position of defendant that respondent acquired, or at least that there was a substantial likelihood that he acquired, confidential information such that it would make it improper for him to undertake a representation adverse to GM. Respondent, on the other hand, denies that he received any confidences and contests the propriety of his disqualification. At issue is the extent to which a former associate of a relatively large law firm is disabled from undertaking representations adverse to clients of the former employer.

Although the matter is a novel one in this State, it has been fully treated in other jurisdictions (see, E. g., Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 370 F.Supp. 581 (E.D.N.Y.1973), aff'd 518 F.2d 751 (2 Cir. 1975); Richardson v. Hamilton International Corp., 469 F.2d 1382 (3 Cir. 1972), Cert. den. 411 U.S. 986, 93 S.Ct. 2271, 36 L.Ed.2d 964 (1973); American Can Co. v. Citrus Feed Co., 436 F.2d 1125 (5 Cir. 1971); Westinghouse v. Kerr-McGee Corp., 580 F.2d 1311 (7 Cir. 1978); Fred Weber, Inc. v. Shell Oil Co., 566 F.2d 602 (8 Cir. 1977), Cert. den. 436 U.S. 905, 98 S.Ct. 2235, 56 L.Ed.2d 403 (1978); Gas-A-Tron of Arizona v. Union Oil Co. of California, 534 F.2d 1322 (9 Cir. 1976), Cert. den. Sub nom. Shell Oil Co. v. Gas-A-Tron of Arizona, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976)), and the principles of law upon which the foreign decisions have been based are well recognized by us.

The obligation of an attorney to preserve the confidences and secrets of a client stands as a bedrock principle of the Anglo-American legal system. It is universally recognized by Canon 4 of the ABA Code of Professional Responsibility, and has been codified by our court rules. D.R. 4-101. The resolution of the instant case depends upon its application to the particular facts herein involved, viewed in the light of the further admonition of the Canon that attorneys must avoid even the appearance of impropriety. Canon 9 of the ABA Code of Professional Responsibility.

It is clear that an attorney may not appear against a former client in the same litigation. In re Blatt, 42 N.J. 522, 201 A.2d 715 (1964). And this is so even where the new representation is by his firm and not the disqualified attorney personally. Opinion No. 313, 98 N.J.L.J. 753 (1975). The application becomes more difficult however, when the new representation involves a different case and here the rule has been laid down that an attorney may not appear in Substantially related matters. Emle Industries, Inc. v. Patentex, Inc., 478 F.2d 562, 570 (2 Cir. 1973); American Roller Company v. Budinger, 513 F.2d 982, 984 (3 Cir. 1975). The standard was best articulated in T. C. Theatre Corp. v. Warner Bros. Pictures,113 F.Supp. 265 (S.D.N.Y.1953) where the court said:

"I hold that the former client need show no more than that the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him, the former client. The Court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent. Only in this manner can the lawyer's duty of absolute fidelity be enforced and the spirit of the rule relating to privileged communications be maintained." (Id. at 268-269)

In the instant case the problem is compounded not only by the existence of the issue of substantial relationship as to the matters involved, but the further complication that the relationship between the attorney and the supposed former client is unclear, for respondent was not GM's attorney nor a member of the firm which represented it, but rather a young associate. While the standards applicable to associates in large firms are no less stringent than those applied to the members of the firm having actual charge of litigation, the applicability of the rule must be examined in the light of the realities of the associate's relationship to the alleged former representation. This problem was reviewed with some care by Judge Weinstein in Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., supra.

Silver Chrysler was a suit by a dealer against a manufacturer alleging coercion with respect to the leasehold term in a dealership agreement. Defendant was represented in that matter, and had for many years been represented in dealership matters, by a large firm in which plaintiff's attorney had previously been employed as an associate. In denying a motion to disqualify plaintiff's attorney (and his firm) on the ground he had previously represented defendant in a related matter, the trial judge recognized the realities of an associate's function in a large firm and the relationship of associates with clients. 370 F.Supp. at 588. He also recognized that the use of associate status as a training ground for young lawyers should not result in unnecessary restrictions to those attorneys or their future clients. Id. at 589-590. Rejecting the notion that the mere association should create an imputed knowledge such as would bar future adverse representation, the judge undertook a pragmatic review of the associate's actual participation in the earlier Chrysler representation.

Each case must rest on a close analysis of the facts in the light of the sometimes conflicting policies favoring protection of former client confidences and freedom of new clients to retain attorneys of their choice. (at 587)

Actual activities on specific cases by (the associate) must be demonstrated which would make it reasonable to infer that he gained some information about his former client of some value to his present client. (at 589)

Finding that the associate's involvement in arguably related matters had been peripheral researching specific points of law and that the matters in which he had a more significant role involved unrelated issues, the judge found disqualification unwarranted.

In affirming Judge Weinstein the Court of Appeals similarly recognized the role of an associate and of the appropriateness of distinguishing such attorneys from the firm members.

* * * we do not believe that there is any basis for distinguishing between partners and associates on the basis of title alone both are members of the bar and are bound by the same Code of Professional Responsibility. See Consolidated Theatres v. Warner Bros. Circuit Management Corp., 216 F.2d 920, 927 (2d Cir. 1954). But there is reason to differentiate for disqualification purposes between lawyers who become heavily involved in the facts of a particular matter and those who enter briefly on the periphery for a limited and specific purpose relating solely to legal questions. In large firms at least, the former are normally the more seasoned lawyers and the latter the more junior. This is not to say that young attorneys in large firms never become important figures in certain matters but merely to recognize that some of their work is often of a far more limited variety. Under the latter circumstances the attorney's role cannot be considered "representation" within the meaning of T. C. Theatre Corp. And Emle so as to require disqualification. Those cases and the Canons on which they are based are intended to protect the confidences of former clients when an attorney has been in a position to learn them. To apply the remedy when there is no realistic chance that confidences were disclosed would go far beyond the purpose of those decisions. (Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751, 756-757 (2 Cir. 1975)).

The principles enunciated in Silver Chrysler are persuasive indeed compelling. They are fully consistent with the holdings of our courts in cases where the subject of disqualification has been dealt with in different contexts. See In re Braun, 49 N.J. 16, 227 A.2d 506 (1967); State v. Rizzo, 69 N.J. 28, 350 A.2d 225 (1975); In re Advisory Opinion on Professional Ethics No. 361, 77 N.J. 199, 390 A.2d 118 (1978); State v. Lucarello, 135 N.J.Super. 347, 343 A.2d 465 (App.Div.1975), aff'd o.b. 69 N.J. 31, 350 A.2d 226 (1975). Their exposition is so thorough as to render their further discussion redundant. The appropriateness of their application to the instant case is patent.

Application of the Law to the Instant Case

Application of these principles of law requires the determination of two questions...