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Reardon v. Marlayne Inc.

Decided: October 31, 1978.

MARGARET REARDON AND DANIEL REARDON, PLAINTIFFS,
v.
MARLAYNE, INC. T/A BEAR BRAKE PALISADES AND GENERAL MOTORS CORPORATION, DEFENDANTS



Bilder, J.s.c.

Bilder

This is a motion by a defendant in a product liability suit to force the removal of plaintiffs' attorney (and his firm) from the case on the ground that he is disqualified by virtue of confidences made known to him at an earlier time as an attorney representing that defendant in defense of similar suits.

Defendant General Motors Corporation (GM) is represented by Carpenter, Bennett & Morrissey (CBM), a firm averaging some 19 members and 23 associates, in the defense of a product liability case involving allegations of a faulty automobile braking system. Plaintiffs are represented by the firm of Gaccione, Pomaco, Patton & Beck, one of whose members, John E. Patton (respondent), was employed as an associate of CBM for a period of some ten years, during which time CBM represented GM in the defense of numerous other product liability suits. Respondent left CBM in April

1976. The present suit, in which respondent is playing a significant part, was instituted in May 1978.

It is the position of defendant that respondent acquired, or at least that there was a substantial likelihood that he acquired, confidential information such that it would make it improper for him to undertake a representation adverse to GM. Respondent, on the other hand, denies that he received any confidences and contests the propriety of his disqualification. At issue is the extent to which a former associate of a relatively large law firm is disabled from undertaking representations adverse to clients of the former employer.

Although the matter is a novel one in this State, it has been fully treated in other jurisdictions (see, e.g., Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp. , 370 F. Supp. 581 (E.D.N.Y. 1973), aff'd 518 F.2d 751 (2 Cir. 1975); Richardson v. Hamilton International Corp. , 469 F.2d 1382 (3 Cir. 1972), cert. den. 411 U.S. 986, 93 S. Ct. 2271, 36 L. Ed. 2d 964 (1973); American Can Co. v. Citrus Feed Co. , 436 F.2d 1125 (5 Cir. 1971); Westinghouse v. Kerr-Mc Gee Corp. , 580 F.2d 1311 (7 Cir. 1978); Fred Weber, Inc. v. Shell Oil Co. , 566 F.2d 602 (8 Cir. 1977), cert. den. 436 U.S. 905, 98 S. Ct. 2235, 56 L. Ed. 2d 403 (1978); Gas-A-Tron of Arizona v. Union Oil Co. of California , 534 F.2d 1322 (9 Cir. 1976), cert. den. sub nom. Shell Oil Co. v. Gas-A-Tron of Arizona , 429 U.S. 861, 97 S. Ct. 164, 50 L. Ed. 2d 139 (1976)), and the principles of law upon which the foreign decisions have been based are well recognized by us.

The obligation of an attorney to preserve the confidences and secrets of a client stands as a bedrock principle of the Anglo-American legal system. It is universally recognized by Canon 4 of the ABA Code of Professional Responsibility and has been codified by our court rules. D.R. 4-101. The resolution of the instant case depends upon its application to the particular facts herein involved, viewed in the light of the further admonition of the Canon that attorneys

must avoid even the appearance of impropriety. Canon 9 of the ABA Code of Professional Responsibility.

It is clear that an attorney may not appear against a former client in the same litigation. In re Blatt , 42 N.J. 522 (1964). And this is so even where the new representation is by his firm and not the disqualified attorney personally. Opinion No. 313, 98 N.J.L.J. 753 (1975). The application becomes more difficult however when the new representation involves a different case and here the rule has been laid down that an attorney may not appear in substantially related matters. Emle Industries, Inc. v. Patentex, Inc. , 478 F.2d 562, 570 (2 Cir. 1973); American Roller Company v. Budinger , 513 F.2d 982, 984 (3 Cir. 1975). The standard was best articulated in T.C. Theatre Corp. v. Warner Bros. Pictures , 113 F. Supp. 265 (S.D.N.Y. 1953) where the court said:

"I hold that the former client need show no more than that the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him, the former client. The Court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent. Only in this manner can the lawyer's duty of absolute fidelity be enforced and the spirit of the rule relating to privileged communications be maintained." (Id. at 268-269)

In the instant case the problem is compounded not only by the existence of the issue of substantial relationship as to the matters involved, but the further complication that the relationship between the attorney and the supposed former client is unclear, for respondent was not GM's attorney nor a member of the firm which respresented it, but rather a young associate. While the standards applicable to associates in large firms are no less stringent than those ...


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