Friday, January 28, 2011

Law Firm Disqualified for Failure to Erect Timely and Effective Ethical Screen for "Side Switching" Lawyer

[h/t to Bill Freivogel]. The US District Court in Montana just disqualified plaintiff's counsel in a litigation matter where a lawyer who previously worked on matters for the defendant switched firms. [Stimson Lumber Co. v. International Paper Co., 2011 U.S. Dist. LEXIS 3769 (D. Mont. January 14, 2011).]

The firm representing the plaintiff argued that it set up an ethical screen in accordance with applicable rules and should not be disqualified:
  • "Notwithstanding the imputed disqualification, Stimson and Garlington assert they have since screened Brown from any participation in this litigation and, therefore, Garlington should be permitted to continue to represent Stimson. Consequently, the Court must consider whether an ethical screen is permissible under the circumstances of this case."
Importantly, the decision calls out the fact that had a screen been established in a more timely manner, and had the prescriptive measures been more effective (including physical separation), the firm in question would not necessarily have been disqualified. In its decision, the court referenced state rules of professional conduct as well as the recently-updated ABA Model Rule 1.10 and several recent screening/disqualification decisions across multiple jurisdictions:
  • "...the Court concludes Stimson and Garlington have not timely screened Brown from participation in this litigation, and have not established that its screening mechanisms are effective."
  • "Because Brown has represented Stimson and has actively participated in this litigation since some time prior to July 26, 2010, the ethical screen erected at the end of November, 2010, was not timely. Where screening mechanisms are not immediately implemented, and are instead instituted only after the conflicted attorney's former client asserts the existence [*14] of a conflict, the ethical screen is not timely implemented."
  • "Second, despite the ethical screen Stimson and Garlington have erected, Brown continues to work within the Garlington office building. Brown's close proximity to Zlatnik and all other Garlington attorneys who may work on this litigation, supports a conclusion that the ethical screen Garlington has created is ineffective."

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