Rennie v. Hess Oil Virgin Islands Corp.

• Decision Date: 18 September 1997
• Docket Number: 95–104M.,Civ. Nos. 94–82
• Parties: Lloyd RENNIE, et al., Plaintiffs, v. HESS OIL VIRGIN ISLANDS CORP., and Amerada Hess Corp., Defendants. Bernard GRIFFITH, Wilberforce Charles, et al., Plaintiffs, v. HESS OIL VIRGIN ISLANDS CORP., and Amerada Hess Corp., Defendants.
• Court: U.S. District Court — Virgin Islands

37 V.I. 323

Lloyd RENNIE, et al., Plaintiffs,

v.HESS OIL VIRGIN ISLANDS CORP., and Amerada Hess Corp., Defendants.

Bernard GRIFFITH, Wilberforce Charles, et al., Plaintiffs,

v.HESS OIL VIRGIN ISLANDS CORP., and Amerada Hess Corp., Defendants.

Civ. Nos. 94–82, 95–104M.

District Court of the Virgin Islands, Division of St. Croix.

Sept. 18, 1997.

In employment discrimination action, defendants moved to disqualify attorney who served as Commissioner of Department of Labor and plaintiffs' law firm that employed attorney. The District Court, Resnick, United States Magistrate Judge, held that: (1) attorney did not personally and substantially participate in related cases while serving as Commissioner; (2) disqualification of attorney was warranted on basis of appearance of impropriety; and (3) attorney's disqualification would not be imputed to firm.

Motion granted in part and denied in part.

Lee J. Rohn, Christiansted, VI, for Plaintiffs.

Beth Moss, Christiansted, VI, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISQUALIFY LISA MOORHEAD, ESQ. AND DENYING THE MOTION TO DISQUALIFY THE LAW OFFICES OF ROHN & CUSICK

RESNICK, United States Magistrate Judge.

THIS MATTER is before the Court on a motion filed by defendants Hess Oil Virgin Islands Corp. [“HOVIC”] and Amerada Hess Corporation [“AHC”] seeking the disqualification of Attorney Lisa Moorhead [“Moorhead”] and the Law Offices of Rohn & Cusick [“Rohn & Cusick”] in the above- captioned matters. ¹ Plaintiffs Rennie et al. and Griffith et al., represented by Rohn & Cusick, filed an opposition. The plaintiffs in Civ. Nos. 1994–81 and 1995–66, also filed an opposition [Dema plaintiffs]. Defendants HOVIC and AHC moved to strike the opposition filed by the Dema plaintiffs and that motion was granted. Defendants then filed a Reply.

A hearing on this motion was held on Tuesday, August 19, 1997. At that hearing defense counsel stated that she was unaware that the hearing was evidentiary in nature, that she was not prepared, and sought a continuance. Over plaintiff counsel's objections, the Court entered an Order continuing the hearing to September 8, 1997. The Order also provided that by September 4, 1997, defendants would indicate whether they wished to proceed with the hearing or opt to rest on their pleadings and the record.

The defendants have indicated that they no longer wish a hearing and seek to rely solely on the record and moving papers. Thus, this matter is ripe for adjudication.

RELEVANT FACTS

The Rennie complaint was filed in July 1994, and the Griffith complaint in August 1995, in the aftermath of layoffs of workers at the Hess Oil Refinery in St. Croix, Virgin Islands. In their complaints, the plaintiffs claim that they were terminated from their employment, because they were black West Indians, and replaced by white, stateside employees. They claimed discrimination based on race, age, and national origin. They also claimed disruption of their pension benefits. The claims were predicated on the Civil Rights statutes and ERISA.

Attorney Moorhead was appointed Commissioner of the Department of Labor on February 1, 1995. She was hired by Rohn & Cusick on September 9, 1996. Moorhead left the Department of Labor in February of 1997. The defendants claim that Attorney Moorhead and the Law Offices of Rohn & Cusick should be disqualified from these cases based on Moorhead's simultaneous employment as the Virgin Islands Commissioner of Labor and private attorney with Rohn & Cusick, and her subsequent full time employment with Rohn & Cusick.

Defendants' motion asserts two major arguments. First they argue that Moorhead's role as head of the Department charged with investigating allegations of discrimination in employment, conflicted with her simultaneous and subsequent role as a private attorney in the firm which represents plaintiffs in employment discrimination cases, and violates the ABA Model Rules of Professional Conduct. In support of their argument defendants claim that Moorhead has actually participated in hearings, meetings and depositions in substantially related cases, and that confidential information reportedly gathered at those hearings “jeopardized the confidentiality” of these cases and presents an “overwhelming appearance of impropriety”. Second, defendants argue that by virtue of Moorhead's violations, the Law Offices of Rohn & Cusick should be disqualified from this matter as well.

DISCUSSION

The ethical considerations of attorneys who leave government service, and are hired by private firms, embrace not only protection of the interests of their clients, but also the interests of society and the integrity of government. Cody, Michael W.J., Special Ethical Duties for Attorneys Who Hold Public Positions, 23 Mem.St.U.L.Rev. 453 (1993). These attorneys are governed by standards which convey the importance of ensuring that the government functions efficiently and attracts the most capable individuals to assist in that pursuit. Id. Courts are sensitive to the fact that a bright line rule screening all government attorneys from subsequent private practice will adversely affect the government's ability to attract qualified attorneys; on the other hand there is the danger of government attorneys conducting their offices with an eye toward future private employment. Lampert, A.M., Disqualification of Counsel: Adverse Interests and Revolving Doors, 81 Colum.L.Rev. 199 (1981). These considerations must be balanced against the use of disqualification motions as a litigation tactic, and a client's right to counsel of his choosing. Powell v. Alabama, 287 U.S. 45, 53, 53 S.Ct. 55, 58, 77 L.Ed. 158 (1932).

The Model Code of Professional Responsibility addresses these concerns in Rule No. 1.11(a) [Successive Government and Private Employment], and Rule 1.12 [Former Judge or Arbitrator]. The rules provide that an attorney shall not represent a private client in connection with a matter in which the attorney or judge participated “personally and substantially” as a public employee or officer. The predecessor to the Rules authorized disqualification if the attorney had “substantial responsibility” over the matter in dispute. ABA Model Code Disciplinary Rule DR 9–101.

In the present motion, defendants assert that, while serving as Commissioner of the Department of Labor (from February 1, 1995), Moorhead was hired by Rohn & Cusick on September 9, 1996. They allege that on October 9, 1996, Moorhead attended a meeting in which the hiring practices of a HOVIC subcontractor were discussed ², and that Moorhead also assumed the role of material witness before the Virgin Islands Legislature in early 1997, with regard to the same subcontractor. Both proceedings, they claim, “involved the alleged discriminatory hiring practices ... which form a substantial foundation for the plaintiffs' discrimination theory in the present matter.” Moreover, Mr. Bernadin Bailey, a Department of Labor employee, was allegedly seen in possession of documents and discovery materials obtained from these cases, implying that they were obtained by Moorhead from Rohn & Cusick files. Defendants' most strenuous argument, however, is the overwhelming appearance of impropriety presented by the present situation.

Generally, a determination of “personal and substantial” participation requires presentation of facts (generally through sworn testimony) establishing actual and personal involvement in the matter in question. City of Philadelphia v. District Council 33, 503 Pa. 498, 469 A.2d 1051 (1983). In City of Philadelphia an attorney who was a city director, was later hired by a private firm. He was disqualified from participating in the same matter that he participated in as a city employee. Despite the attorney's claims that he could not recall the details of his involvement, testimony at a hearing revealed that he had prepared notes prior to and during the meetings; and that, as the director, had “substantial responsibility” for negotiating the agreement. The Court found that, under the factual circumstances of the case, the attorney's substantial and personal participation required his disqualification. His law firm was also disqualified.

The Court in Armco Inc. v. United States, 520 F.Supp. 1220 (CIT 1981) also found personal and substantial involvement, and disqualified an attorney who had previously worked for the United States International Trade Commission during a preliminary investigation, and who later became employed with a private firm representing parties in the same matter. The Court relied on ABA Disciplinary Rules Canon 9 which states the same prohibition against private employment subsequent to public employment, and requires an examination of whether the attorney had substantial responsibility in the matter. The Court found that as an adviser to the one of the commissioners, the attorney had substantial responsibility, i.e., access to confidential information, regarding the preliminary investigation of the same matter. Because of the degree of his involvement, both he and his firm were disqualified.

The Court notes that Moorhead had statutory responsibility including the authority to investigate complaints of employment discrimination and enforce laws protecting employees. V.I.Code Ann. tit. 3, § 356. However, in the context of the cases before us, her role appears to be in name only, with no actual participation therein. Defendants point to a letter dated August 22, 1995, from the Department of Labor which informed these same defendants that “[p]ursuant to the powers vested in the Commissioner of Labor to investigate, ascertain, gather data, depose witnesses, issue subpoenas, and enter and inspect places of employment, an officer [of the Department] will be contacting you to gather information relative to the charge filed against you or your business.” However, the letter was issued by a department employee, and not signed by Moorhead.³

Additionally, defendants'...