An Attorney Disqualification Mess

Estate of Francis P. Kennedy v. Rosenblatt, 447 N.J. Super. 444 (App. Div. 2016).  Judge Nugent’s decision for the Appellate Division in this case today encapsulated in its opening paragraph the messy fact pattern that presented itself:

“This interlocutory appeal involves a delicate and difficult conflict-of-interest issue that arose after plaintiffs’ attorney, who had filed and dismissed the underlying professional negligence action while at Weiner Lesniak, LLP, recommenced the action after joining Riker, Danzig, Scherer, Hyland & Perretti, LLP (“Riker”), the Estate of Joel Shoobe, Esq. (“the Estate”) in the previous action.  Meanwhile, the attorneys who had defended the Estate while at Riker had left Riker and joined a new firm, taking with them the Estate’s paper file but leaving electronically stored documents (“the electronic file” or the “electronic documents”), including a privileged memorandum outlining the defense.  When Riker recommenced the action on behalf of plaintiffs, the Estate moved to disqualify Riker, asserting a conflict of interest.”

The Law Division granted the motion to disqualify.  Riker sought leave to appeal, which was granted.  Today, the Appellate Division, after applying “de novo plenary appellate review,” as mandated by City of Atlantic City v. Trupos, 201 N.J. 447 (2010), regarding disqualification of counsel issues, vacated the disqualification, but did so conditionally.

After detailing the facts and citing some generally applicable legal principles, Judge Nugent focused on Rule of Professional Conduct 1.10(b).  That rule states that hen a lawyer leaves a firm, the firm is not disqualified from representing a client with interests adverse the formerly associated lawyer unless both “(1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has information protected by RPC 1.6 and 1.9(c) that is material to the matter.”  Since the two cases here were unquestionably related, the issue was whether any lawyer at Riker had material, protected information.

The panel concluded that the requirement that a Riker lawyer “has” information in fact meant “has actual knowledge or has accessed the electronic file,” rather than meaning “has access to” the information, as presumably all lawyers at Riker did since the information was on the firm’s electronic system.  The case then came down to the fact that an unnamed senior attorney at Riker had accessed the electronic file, but it was not clear what the senior attorney had reviewed or how extensive that review was.  The only evidence of what the senior attorney did was contained in a sworn certification by another person, and that evidence was not valid under Rule 1:6-6, which requires that certifications be made only on personal knowledge.

Judge Nugent then had to deal with another wrinkle.  The Law Division had dismissed the entire case after the Appellate Division granted leave to appeal on the disqualification issue.  Plaintiffs wanted to appeal that dismissal, but needed to know whether Riker could file the appeal.  Accordingly, Judge Nugent fashioned a creative solution.  He permitted Riker to file a notice of appeal, but then directed that the appeal be suspended until the disqualification issue was resolved.  On that issue, the panel ordered the senior attorney to submit a certification regarding the extent to which the electronic file had been accessed.  The parties were also to determine, jointly, whether anyone other than the senior attorney had accessed the electronic file, and to attempt to agree on deletion of that file.

Judge Nugent summarized that if the senior attorney “actually reviewed the substantive content of confidential information” when accessing the electronic file, the Law Division’s disqualification order would have to be reinstated.  If not, the Law Division would have to resolve the disqualification issue anew, perhaps with a hearing.

The panel’s solution fit the facts, based on the interpretation of RPC 1.10(b) that the panel adopted.  But the better outcome, and one more easy to implement, in this case and future matters, might have been to rule that Riker “has information” that is protected, and was therefore properly disqualified, because the information was accessible to any Riker attorney through its electronic system.  As an important issue relating to the meaning of a Rule of Professional Conduct in the context of electronic files, which are becoming more prevalent in this computer age, this could be an issue for the Supreme Court, should plaintiffs decide to seek leave to appeal to that Court.