In Enzo Life Sciences, Inc. v. Adipogen Corporation, C.A. No. 11-88-RGA (D. Del. Nov. 20, 2013), Judge Richard G. Andrews granted defendants’ motion to disqualify plaintiff’s counsel. An attorney that had previously worked on the case for defendants was now a named partner of plaintiff’s new counsel. Id. at 3.
It was clear that the named partner was disqualified; the Court considered whether the conflicted attorney’s firm had complied with ABA Model Rule of Professional Conduct 1.10(a)(2), which outlines what steps a firm can take to avoid a conflict being imputed to it. The Court concluded that the firm had not established an effective screen and had not shown that no part of the fee for this action would be apportioned to the conflicted attorney. Id. at 6.
As to the adequacy of the screen, several factors weighed in favor of disqualification. The Court cited the conflicted attorney’s past involvement in the defendants’ representation, which included drafting confidential mediation statements and signing various discovery documents. Id. at 7-8. While this attorney did not have a “pivotal role” in the case while working for defendants, and while he “may now have a ‘limited recollection’ of this case, at the time he was working on the case he surely was aware of the defense strategies.” Id. at 8. Furthermore, he had been an attorney of record for defendants and now his name appeared on firm correspondence, which created “a constant appearance of a continuing imputed conflict.” Id. Finally, the small size of this firm detracted from the efficacy of a screen. Id. at 9.
While the firm had implemented a screen in a timely fashion, the screen also lacked “key aspects.” Id. First, while it prohibited firm members from talking about the case with the conflicted attorney, it lacked a “prohibition regarding discussing the matter in the presence of [this attorney], or in locations from which [he] could still hear the conversations.” Id. This was a particularly important issue for a small firm. Second, the screen had no enforcement mechanism as it provided “no warning to employees as to what would occur if the screen were not followed.” Id.
As to the fee issue, “no evidence was provided to the Court to assess whether [plaintiff’s counsel’s firm] has sufficient funds, considering the firm’s small size, to satisfy the firm’s partner share agreement without any of the funds from this case being used to pay [the conflicted attorney’s] share. While the court is mindful that [the attorney’s] partnership share would not fluctuate based upon the success of their client, because of the nature of a small firm it is likely that his actual pay would be affected.” Id. at 11.
Finally, the Court concluded that a balancing of the equities favored disqualification, emphasizing that the “strong interest in preserving the integrity of the judicial system” was particularly strong here, where the potential for use of confidential information would be in the same matter. “This court must protect against even the appearance of impropriety.” Id. at 12-13.