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In re Fine Paper Antitrust Litigation

February 21, 1980

IN RE: FINE PAPER ANTITRUST LITIGATION, KIMBERLY-CLARK CORPORATION, APPELLANT


APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. MDL No. 323)

Author: Hunter

Before: ALDISERT, HUNTER and VAN DUSEN, Circuit Judges

Opinion OF THE COURT

HUNTER, Circuit Judge.

1. Kimberly-Clark moved to disqualify Harold E. Kohn, H. Laddie Montague, Lowell E. Sachnoff, Guido Saveri and Granvil Specks, Esqs., and their firms from acting as counsel for the class in the Fine Paper Antitrust Litigation. The trial judge denied the motion to disqualify and Kimberly-Clark seeks immediate review of the order denying disqualification. Appellees have moved to dismiss the appeal for lack of appellate jurisdiction. Because this appeal does not satisfy the criteria for collateral appealability the motion to dismiss is granted.

I

FACTS

2. The Fine Paper Antitrust Litigation ws filed in July 1977. Eleven months later in May 1978, Kimberly-Clark was named a party defendant. After a vigorous contest, the plaintiffs' class was certified on February 16, 1979. Kimberly-Clark played an active role before the district court in opposing the class certification. Yet, at no time during the nearly year long proceeding did Kimberly-Clark challenge the class certification on the ground that class counsel was acting under a conflict of interest.

3. The facts upon which Kimberly-Clark predicated its disqualification motion ere known by Kimberly-Clark throughout the period of contesting class certification. Immediately after losing the class certification issue, Kimberly-Clark presented the district court with a motion to disqualify class counsel from conducting the action, predicated on a conflict of interest or, at minimum, an appearance of impropriety.*fn1

4. Messrs. Kohn, Montague, Schnof, Saveri, Specks and their firms represent the plaintiff-classes in the Folding Carton Antitrust Litigation and the Corrugated Container Antitrust Litigation. Kimberly-Clark is not a named party in either case but is one of the several hundred thousand absent class members in both actions. Thus, as an absent class member, Kimberly-Clark's interests are being advanced by Messrs. Kohn, Montague, Schnoff, Saveri, Specks and their firms in those two cases. Both of those cases were filed prior to commencement of the Fine Paper action. The alleged conflict of interest arises from the fact that the counsel suing Kimberly-Clark as a named defendant in the Fine Paper action, also represent Kimberly-Clark's interest as absent class members in the two other cases. The three actions are, however, unrelated.

5. Although Kimberly-Clark enjoyed absent class member status in the Folding Carton and Corrugated Container actions before being named a party defendant in Fine Paper, it never communicated in any fashion with the class attorneys or attempted to do so. No information, confidential or otherwise, was provided by Kimberly-Clark to the class attorneys whom it seeks here to disqualify.*fn2

6. The district court denied the motion to disqualify. In the words of the trial judge, Kimberly-Clark "stood by while plaintiffs' counsel participated most actively in every phase of the litigation from the inception of the cases prior to transfer date, including the MDL [multidistrict litigation] proceedings; the extensive discovery proceeding; the long series of settlement negotiations; and trial preparation." The district court believed that to disqualify counsel at this stae of the proceedings "would seriously jeopardize the positon of the plaintiff class;... and lead inevitably to an indefinite postponement of trial." The court thought that Kimberly-Clark's delay in moving to disqualify evinced a motive that is "less concerned about enforcing the Code of Professional Responsibility than it is in gaining a tactical advantage over its adversaries in these cases." Upon addressing the merits, the district court concluded that "mere membership of a defendant in a nationwide plaintiff's class represented by counsel in one proceeding" is not "sufficient grounds to disqualify that same counsel in an unrelated suit." The controlling reason to the district court was the total lack of any disclosures made in confidence by Kimberly-Clark to the attorneys it here seeks to disqualify.

7. Pertinent to this appeal are: Canon 4, "A lawyer should preserve the confidence and secrets of a client"; Canon 5, "A lawyer should exercise independent professional judgment on behalf of a client"; Canon 9, "A lawyer should ...


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