Counsel for Partnership Disqualified Based Upon “Substantially Related” Work on Behalf of a Partner

Counsel for Partnership Disqualified Based Upon

“Substantially Related” Work on Behalf of a Partner

 

      As described by the Sixth Circuit, this case is about the meaning of “substantially related” in the context of the rule disqualifying counsel from being adverse to a former client as to a “substantially related” matter.  Bowers v. The Ophthalmology Group, __ F.3d __, 2013 WL 5763173 (6^th Cir. Oct. 25, 2013).

      Bowers was a partner in The Ophthalmology Group, LLP; she was expelled from the partnership in 2010.  She filed suit over that expulsion under Title VII and Kentucky law.  She moved to disqualify the partnership’s attorney on the basis that another attorney in the same firm (M&L) had previously represented Bowers on a substantially related matter.  Specifically, she referenced assistance from the firm on an ultimately uncompleted effort to open an ophthalmology practice in Louisville and counsel provided the partnership several years prior on the expulsion of another partner.

      The trial court dismissed the Title VII claim as Bowers was a partner and not covered thereby, determined to not exercise supplemental jurisdiction over the state law claims, and dismissed as moot the motion to disqualify counsel.  This appeal followed.

      The Sixth Circuit held (i) the motion to disqualify counsel should have been addressed before considering the merits of Bower’s claims and (ii) the counsel should have been disqualified.  As to the first point it wrote “A district court must rule on a motion for disqualification of counsel prior to ruling on a dispositive motion because the success of a disqualification motion has the potential to change the proceedings entirely.”  2013 WL 5763173, *6.

      As to the substance of the disqualification, the burden is not upon the objecting former client to divulge the previously disclosed confidential information, and the court is to look to the type of information “as would normally have been obtained in the prior representation.”  2013 WL 5763173, *4, quoting Ky. S. Ct. R. 3.130 (1.9 comment 3).  For similar formula the court also cited the Hazard & Hodes treatise and the Restatement (3^rd) of the Law Governing Lawyers.  Addressing only the representation as to opening another practice in Louisville, the Court created hypothetical disclosures that Bower’s might have made and then explained how they might be detrimental to her in this case, acknowledging them to be “scenarios.”  2013 WL 5763173, *5.  Still, these hypothetical scenarios were enough to disqualify M&L.

      Judge Griffin filed a dissent to the majority’s determination that a conflict existed and that M&L should have been disqualified.  Beginning from the rule that motions to disqualify are viewed with disfavor, she would have found there to be no conflict as there was no “substantial relationship” to the earlier matters.  As to the earlier partner expulsion, the discussions were between all of the partners and M&L as its counsel.  On that basis she found there to be no possibility of confidential communications between Bowers and M&L.  2013 WL 5763137, *7.  As for opening a Louisville practice, those plans were disclosed to the partnership’s other partners and never materialized.  Judge Griffin was unable to see those earlier efforts as being substantially related to defending the partnership against Bower’s discrimination claims, characterizing the majority opinion as “rife with speculative scenarios.”