Wilson P. Abraham Const. Corp. v. Armco Steel Corp.

• Decision Date: 14 September 1977
• Docket Number: No. 76-3750,76-3750
• Parties: 1977-2 Trade Cases 61,625 WILSON P. ABRAHAM CONSTRUCTION CORPORATION, Plaintiff-Appellee, v. ARMCO STEEL CORPORATION, the Ceco Corporation, and Laclede Steel Company, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 250

559 F.2d 250

1977-2 Trade Cases 61,625

WILSON P. ABRAHAM CONSTRUCTION CORPORATION, Plaintiff-Appellee, v. ARMCO STEEL CORPORATION, the Ceco Corporation, and Laclede Steel Company, Defendants-Appellants.

No. 76-3750.

United States Court of Appeals Fifth Circuit.

Sept. 14, 1977.

Raymond J. Salassi, Jr., Charles W. Lane, New Orleans, La., for Armco Steel Corp.

Cicero C. Sessions, Burt K. Carnahan, New Orleans, La., for Ceco Corp.

Charles Kadish, New York City, Lawrence K. Benson, Jr., M. Hampton Carver, New Orleans, La., for Laclede Steel Co.

Stephen D. Susman, Gary V. McGowan, William E. Wright, Houston, Tex., Moise S. Steeg, Jr., New Orleans, La., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before GOLDBERG and FAY, Circuit Judges, and DUMBAULD ^*, District Judge.

PER CURIAM:

This is an appeal from an order of the district court denying the defendants' motion to disqualify counsel for plaintiff. Though the appeal is not from a final judgment in the traditional sense under 28 U.S.C. § 1291, we take jurisdiction of it as a collateral matter severable from the underlying suit, and too important to be denied review at this time. See In re Yarn Processing Patent Validity Litigation, 530 F.2d 83 (5th Cir. 1976).

This dispute centers around exactly what relationship cocounsel for the plaintiff, a Mr. Stephen D. Susman, had with the various defendants in this suit in a prior legal matter. The factual background which leads up to this current dispute is somewhat detailed and complicated. It begins in 1972 when Mr. Susman was associated with the firm of Fulbright and Jaworski in Houston, Texas. At that time, he undertook to represent Whitlow Steel Company, Inc., an independent rebar ¹ fabricator in Houston. This representation was in connection with a Federal Grand Jury investigation of the rebar steel industry in Texas. In August 1973, charges of antitrust violations were levied against Whitlow, Armco Steel Corp., The Ceco Corp., and Laclede Steel Company. ² Armco, Ceco, and Laclede are the defendants in the present action before this court. As counsel for Whitlow, Mr. Susman met on more than one occasion with the representatives of Armco, Ceco, and Laclede. At these meetings some efforts allegedly were made to develop a cooperative defense. Exactly what information was exchanged, and the importance of that information, is hotly disputed. Mr. Susman contends that the meetings were disorganized and nothing of substance was ever discussed. The defendants contend that documents were in fact discussed and disseminated, grand jury witness lists were prepared, and reports were given as to exactly what testimony was being presented before the grand jury by the various witnesses. The gist of the defendants' argument is that Mr. Susman was privy to a substantial amount of confidential information. Mr. Susman flatly denies this.

At the same time of the grand jury investigation of the Texas steel industry, a separate grand jury investigation of the Louisiana steel industry was underway. In April 1974, four mills (including Armco, Ceco, and Laclede), an independent fabricator, and five individuals were indicted for "bid rigging". All defendants except one pled nolo contendere to the Louisiana indictment. After Armco, Ceco, and Laclede were sentenced in Louisiana, they filed motions to dismiss the Texas indictment. They argued that because of the close relationship of the Texas case to the Louisiana case, the double jeopardy clause prevented further prosecution. The Texas district court refused to rule on the defendants' motion at that time saying that the motion presented such a close factual question that it could not be ruled on until the court heard all the evidence at trial. This ruling prompted the defendants to enter pleas in order to avoid trial.

The final fact which needs to be brought out to fully understand the controversy before this Court is that some time after the Texas grand jury investigation, a civil suit was filed in Texas against Whitlow and the defendants in this suit. The counsel for the plaintiff in that suit was a Mr. William E. Wright. That civil suit is still pending, but at the time it was filed Mr. Susman was still counsel for Whitlow. Mr. Susman, however, denies that anything of substance was done in connection with the defense of that case where he represented Whitlow.

We are now in a position to set forth exactly what the present controversy involves. The plaintiff in the present suit, Wilson P. Abraham Construction Corporation, has filed a civil suit in Louisiana based primarily upon some facts which led to the Louisiana indictments. Counsel for the plaintiff in this suit is William E. Wright, the same person who had been counsel for another party in the Texas civil suit in which Mr. Susman represented Whitlow Steel Company. The defendants allege that the complaint in this case is virtually identical to the Texas complaint in which they were also party defendants. In any event, Mr. Wright has sought to engage Mr. Susman as co-counsel in this case. The defendants are challenging this alleging basically that Mr. Susman has a conflict of interest because of his previous relationship with them when he represented Whitlow Steel Company.

The law in this Circuit is fairly straightforward. This Court has recently reaffirmed with regards to attorney disqualification that a former client seeking to disqualify an attorney who appears on behalf of his adversary, need only to show that the...