University Patents, Inc. v. Kligman, Civ. A. No. 89-3525

• Decision Date: 07 May 1990
• Docket Number: 90-0422.,Civ. A. No. 89-3525
• Citation: 737 F. Supp. 325
• Parties: UNIVERSITY PATENTS, INC. v. Albert M. KLIGMAN, Johnson & Johnson Baby Products Company and Ortho Pharmaceutical Corporation. The TRUSTEES OF the UNIVERSITY OF PENNSYLVANIA v. JOHNSON AND JOHNSON BABY PRODUCTS COMPANY, Ortho Pharmaceutical Corporation and Albert M. Kligman.
• Court: U.S. District Court — Eastern District of Pennsylvania

737 F. Supp. 325

UNIVERSITY PATENTS, INC. v. Albert M. KLIGMAN, Johnson & Johnson Baby Products Company and Ortho Pharmaceutical Corporation.

The TRUSTEES OF the UNIVERSITY OF PENNSYLVANIA v. JOHNSON AND JOHNSON BABY PRODUCTS COMPANY, Ortho Pharmaceutical Corporation and Albert M. Kligman.

Civ. A. Nos. 89-3525, 90-0422.

United States District Court, E.D. Pennsylvania.

May 7, 1990.

Arthur M. Lieberman, New York City, Shelley Green, Neil J. Hamburg, Howard D. Scher, Philadelphia, Pa., Paul Martin Wolff, Washington, D.C., for plaintiffs.

William J. Taylor, Jr., Philadelphia, Pa., Thomas C. Morrison, David McIntyre, New York City, for defendants.

MEMORANDUM

WALDMAN, District Judge.

Plaintiffs, The Trustees of the University of Pennsylvania and University Patents, Inc., commenced this action to recover royalties allegedly owed to them by defendant Dr. Albert Kligman for his development and licensing of a medication for photoaged (sun-damaged) skin.

Presently before the court is plaintiff University's motion to disqualify the lawyer representing defendants Johnson & Johnson and Kligman based on certain ex parte contacts between that lawyer and various present and former employees of the University of Pennsylvania. Plaintiff also seeks to bar defendants from using any information obtained from these contacts against plaintiff, and to compel the production of any statements obtained during the contacts. Defendants in response have filed a cross-motion to prevent the University from interfering with future ex parte contacts of this sort.

An opportunity for hearing and argument was provided on April 27, 1990. For the reasons that follow, plaintiff's motion will be granted in part and denied in part, and defendants' cross-motion will be denied.

I.

Plaintiff contends and defendants do not dispute that during the fall of 1989 their attorney, Thomas C. Morrison, engaged in ex parte verbal communications concerning this litigation with three current University employees: Dr. Edward Stemmler, Professor of Medicine, Dean Emeritus and a former University Executive Vice President; Dr. Gerald Lazarus, Professor and Chairman of the Department of Dermatology; and Dr. Robert M. Lavker, Research Professor of Dermatology. Mr. Morrison also contacted Harvey Miller, an Associate University Trustee and member of the Board of Overseers of the University's Nursing School. He also initiated ex parte contact with at least two former University employees who were colleagues of defendant Kligman, Drs. Margaret Wood and Walter Shelley.

Dr. Stemmler states that, after an interview by Mr. Morrison in December 1989, the latter attempted to secure Dr. Stemmler's signature on an affidavit purportedly documenting this interview that contained "inaccurate and argumentative statements which I never made to Mr. Morrison, and failed to include other statements which I did make to him." He declined to execute this affidavit and rejected counsel's invitation to revise it.

On November 14, 1989, Neil Hamburg, counsel for the University of Pennsylvania, met with Mr. Morrison and informed him of the University's intent to join in this action which had been initiated by University Patents, Inc. On December 5, 1989, upon learning of Mr. Morrison's meeting with Dr. Stemmler, Mr. Hamburg wrote to Mr. Morrison, objecting to this ex parte communication. Two days after a December 18, 1989 meeting with Mr. Hamburg, at which Mr. Morrison promised to cease ex parte communications with University employees, a letter over Dr. Kligman's signature was sent to University Provost Michael Aiken and Medical School Dean William Kelley. The letter asks these gentlemen to meet with Dr. Kligman, "Mr. Morrison and the folks from Johnson & Johnson to discuss the issues raised by this lawsuit." Mr. Morrison acknowledges that he authored this letter.

II.

Because this present dispute concerns questions of professional ethics and the conduct of discovery, federal law applies. Even if the dispute in this diversity action were viewed as substantive in nature, however, the result would be the same upon application of Pennsylvania law.

Rule 14 of the United States District Court for the Eastern District of Pennsylvania provides in relevant part:

"The Code of Professional Responsibility adopted by this court is the Code of Professional Responsibility adopted by the Supreme Court of Pennsylvania as amended from time to time by this state court, except as otherwise provided by specific Rule of this court after consideration of comments by representatives of bar associations within the state."

The Supreme Court of Pennsylvania has adopted Rule 4.2 of the Model Rules of Professional Conduct, which states:

In representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.

(Emphasis added).

Courts and commentators have noted that Rule 4.2 is designed "to prevent situations in which a represented party may be taken advantage of by adverse counsel; the presence of the party's attorney theoretically neutralizes the contact." Frey v. Department of Health and Human Services, 106 F.R.D. 32, 34 (E.D.N.Y.1985); Kurlantzik, The Prohibition on Communication with an Adverse Party, 51 Conn.Bar J. 136, 145-46 (1977). See also Leubsdorf, Communication with Another Lawyer's Client: The Lawyer's Veto and the Client's Interest, 127 U.Pa.L.Rev. 683 (1979). The Official Comment to Rule 4.2, which explains what is meant by a "party" where, as here, an institutional defendant is involved, provides:

In the case of an organization, this Rule prohibits communications by a lawyer for one party concerning the matter in representation with persons having a managerial responsibility on behalf of the organization, and with any other person whose act or omission in connection with that matter may be imputed to the organization for purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organization.

(Emphasis added). Just as an adversary's attorney may take advantage of an individual party either by extracting damaging statements from him, by dissuading him from pursuing his claim, or by negatively influencing his expectations of succeeding on the merits, the same may occur in the case of an institutional or corporate party.

The court is unpersuaded by plaintiff's assertion that Rule 4.2 shrouds every custodian, cafeteria worker and receptionist simply in light of their mantle as "corporate employee." Plaintiffs rely on Cagguila v. Wyeth Laboratories, 127 F.R.D. 653 (E.D.Pa.1989), the only precedent applying Pennsylvania law. In Cagguila, the court found that, while it did not "seem clear" that the employee who was contacted ex parte fell under the prohibitions in the Comment, because his conduct involved "the matter in representation" the contact was inappropriate. Id. at 654. This court agrees that there may be cases in which conduct is inappropriate even though the letter of the Official Comment is not violated.

At the same time, the court is not persuaded that the drafters intended to restrict the application of the Rule to those cases where an officer, "alter ego" or "control group" member of the organization is contacted ex parte. Compare Monahan v. Johnson, 128 F.R.D. 659 (N.D.Ill.1989) (adopting such an "alter ego" theory), and Frey v. Dept of Health and Human Services, supra (same). Defendants also rely on Morrison v. Brandeis University, 125 F.R.D. 14 (D.Mass.1989) (balancing need to gather informal information against need for effective representation), and Mompoint v. Lotus Development Corp., 110 F.R.D. 414, 419-20 (D.Mass.1986) (same), as well as two recent cases in which Magistrate Collings' balancing approach was employed. See Lizotte v. NYCHHC, 1990 U.S.Dist. LEXIS 2747 (S.D.N.Y. March 13, 1990); Siguel v. Trustees of Tufts College, 1990 WL 29199, 1990 U.S.Dist. LEXIS 2747 (D.Mass. March 12, 1990). Even if this court were inclined to adopt the case-by-case balancing test utilized by the magistrates in those cases, it notes emphatically that it was the court, not counsel, that did the balancing. See Morrison, 125 F.R.D. at 18 n. 1. In this case, counsel acted unilaterally.

Moreover, in Lizotte and Siguel, the court defined and significantly limited the scope of permissible communications by requiring counsel first: (1) to disclose his representative capacity to the interviewee; (2) to state his reasons for seeking the interview; (3) to inform the individual of his or her right to refuse to be interviewed; and (4) to inform the person that he or she could have their own counsel present. There has been no showing that counsel here complied with all of these requirements.

The underlying policy and Official Comment to the Rule make clear that it was intended to forbid ex parte communications with all institutional employees whose acts or omissions could bind or impute liability to the organization or whose statements could be used as admissions against the organization, presumably pursuant to Federal Rule of Evidence 801(d)(2)(D). See Chancellor v. Boeing Co., 678 F.Supp. 250, 251-53 (D.Kan.1988). As such, the prohibition does not appear generally to encompass former employees, although some courts have found that it does if they held "confidential" positions or their conduct is the subject of the litigation in question. See id. at 253; Amarin Plastics, Inc. v. Maryland Cup Corp., 116 F.R.D. 36, 40 (D.Mass.1987). There has been no showing here regarding the status or conduct of the former employees contacted ex parte by counsel.

It clearly appears, however, that at least some of the individuals contacted ex parte by Mr. Morrison are "parties" within the meaning of Rule 4.2. Even under the "control group" test, deans, trustees, department...