On appeal from the Superior Court, Appellate Division.
For modification -- Justices Clifford, Handler, O'Hern and Stein and Judges Antell and King. Opposed -- None. The opinion of the Court was delivered by Clifford, J.
[109 NJ Page 204] This is an action for damages based on theories of products liability and fraud. Plaintiff claims that her husband's death was caused by his cigarette smoking. Defendants are several tobacco and cigarette companies, including Brown & Williamson Tobacco Corporation. The appeal arises from Brown & Williamson's motion to disqualify one of the two firms that represent plaintiff, because of that firm's conflict of interest. The
trial court concluded that there was in fact a conflict. We now review that conclusion in keeping with the provisions of our previous order granting leave to appeal, 108 N.J. 198 (1987). See infra at 208-209.
The question presented is one of first impression under the Rules of Professional Conduct (RPCs) adopted by this Court in 1984. Resolution of the issue requires us to balance "the need to maintain the highest standards of the [legal] profession" against "a client's right freely to choose his counsel." Government of India v. Cook Indus., Inc., 569 F.2d 737, 739 (2d Cir.1978). We have engaged in the required "painstaking analysis of the facts," Reardon v. Marlayne, Inc., 83 N.J. 460, 469 (1980) (quoting United States v. Standard Oil Co., 136 F. Supp. 345, 367 (S.D.N.Y.1955)), and conclude that although counsel's disqualification ordinarily would be required, such a drastic result in this case would produce undue prejudice to the plaintiff as well as to the judicial system in general. Therefore, despite the most unfortunate departure from the requirements of the RPCs, we order that the challenged representation will be allowed to continue.
Plaintiff, Claire Dewey (Dewey), individually and as executrix of her husband's estate, brought this action against several tobacco and cigarette companies, including defendant Brown & Williamson. As indicated, the gist of the action is that Dewey's husband, Wilfred, died of lung cancer, having developed the disease as a result of smoking the defendants' cigarette products.
The complaint was filed in August 1982 by the law firm of Budd, Larner, Gross, Picillo, Rosenbaum, Greenberg & Sade (the Budd, Larner firm). Subsequently, the firm of Wilentz, Goldman & Spitzer (the Wilentz, Goldman firm) became co-counsel with Budd, Larner. At all relevant times, Alan Darnell, a shareholder of the Wilentz firm, has been the attorney
primarily responsible for representing plaintiff's interest. A third firm, Porzio, Bromberg & Newman (the Porzio, Bromberg firm), also became co-counsel at the same time, although its involvement ended when the attorney in that firm who was responsible for this case left Porzio, Bromberg and became affiliated with Budd, Larner. These three firms, as co-counsel, have filed eight actions against tobacco companies in the state and federal courts in New Jersey. Brown & Williamson is named as a party in some but not all of those lawsuits.
The instant matter has been actively litigated, including the pursuit of a partially successful motion for summary judgment by Brown & Williamson, see 216 N.J. Super. 347 (Law Div. 1987), and an interlocutory appeal therefrom. As of September 30, 1986, attorneys in the Wilentz, Goldman firm had devoted over 1,100 hours to the preparation of this case for trial, and the firm's paralegals had devoted more than 700 additional hours.
As a third-party defendant in two other products liability actions venued in New Jersey, Brown & Williamson previously had been represented by the firm of Rosen, Weiss, Slattery & Burstein (the Rosen firm, since dissolved). In September 1982 Brown & Williamson retained the Rosen firm to represent it in this, the Dewey case. That law firm was also retained to represent Brown & Williamson as a defendant in a second case with allegations similar to those made in this one, and to monitor and assist in the defense of other tobacco cases in which it was not a party.
As of September 1982, the Rosen firm consisted of four partners -- Howard Rosen, Sidney Weiss, William Slattery, and George Gelman -- and twelve associates. Although it appears that Gelman produced Brown & Williamson as a client initially, Slattery eventually assumed responsibility for this and the other tobacco cases. Weiss primarily handled corporate and commercial transactions, as well as administrative law and
utilities cases. As Slattery admits, Weiss "had no direct responsibility for the smoking and health litigations."
During the period 1982 through 1985, the Rosen firm employed a total of twenty-one attorneys. At any one time, the firm consisted of no more than sixteen and no fewer than eight attorneys. Fifteen attorneys, including Weiss, billed time for legal services to Brown & Williamson during that period, as did six law clerks and five paralegals. Of those fifteen attorneys, four partners and four associates had "significant involvement" with Brown & Williamson files. At least two attorneys devoted a "substantial amount" of time to Brown & Williamson files at all times. There is nothing in the record before us to indicate what is meant by "significant involvement" or a "substantial amount" of time, other than Slattery's certification indicating that he devoted more than half of his time to Brown & Williamson matters in 1984, and more than three-quarters of his time to that client in 1985.
From March 1981 through November 1985, Brown & Williamson paid the Rosen firm substantial fees. During the calendar years 1983, 1984, and 1985 the Brown & Williamson billings represented approximately five, ten, and twenty per cent, respectively, of the firm's revenues. The firm divided its net profits among its members, and Weiss shared accordingly in those profits.
On November 15, 1985, more than three years after the instant litigation was commenced, Slattery left the Rosen firm and became a partner at the firm of Norris, McLaughlin & Marcus (the Norris, McLaughlin firm), taking Brown & Williamson with him as a client. Appropriate Substitutions of Attorneys were filed, and the Norris, McLaughlin firm has remained as defense counsel for Brown & Williamson in this and other cases since that date.
In May 1986 Weiss left the Rosen firm and became a partner in the Wilentz, Goldman firm. Since joining that firm, Weiss has had no involvement in tobacco cases, nor has he had any
discussions with anyone in the firm regarding the merits of any tobacco cases.
There is some dispute about whether Slattery learned of Weiss's intended affiliation with the Wilentz, Goldman firm prior or subsequent to Weiss's relocation. At no time did Weiss or anyone at the Wilentz, Goldman firm seek Brown & Williamson's consent to the Wilentz, Goldman firm's continuing as counsel for plaintiff.
On September 3, 1986, New York counsel for Brown & Williamson sent a letter to Darnell requesting that the Wilentz, Goldman firm voluntarily withdraw as counsel for plaintiff because of Weiss's affiliation with that firm. Following Wilentz, Goldman's refusal to withdraw, Brown & Williamson moved for that firm's disqualification. After oral argument on the motion the trial court ruled that an evidentiary hearing was required.
After granting Brown & Williamson's motion for leave to appeal, the Appellate Division summarily affirmed, directing that the evidentiary hearing proceed but that "any inquiry be limited to determine whether the former client [Brown & Williamson] has established the requisites of criteria (2) and (3)" set forth in Reardon v. Marlayne, Inc., supra, 83 N.J. at 474. In Reardon we devised a three-part test for determining whether an attorney should be disqualified from successive representation of an adverse interest. We summarized the disqualifying circumstances as follows:
(1) a prior attorney-client relationship between the former client and the attorney sought to be disqualified;
(2) a substantial relationship or a reasonable perception, from the public's perspective, of a substantial relationship between the subject matter of the present suit and that of cases worked on during the former representation;
(3) access to relevant confidences of the former client, which may be proved by other than direct evidence, leading to a conclusive presumption of the attorney's knowledge of such confidences. [ Ibid. ]
Thereafter the trial court, without a hearing, ordered the disqualification of the Wilentz, Goldman firm. Plaintiff obtained leave to appeal in the Appellate Division, and a different
panel of that court remanded the matter to the trial court for factual findings on "whether Mr. Weiss * * * had actually acquired information protected by confidentiality which is material to the matter. See RPC 1.10(b)." The Appellate Division granted Brown & Williamson's motion to stay its order remanding the case, after which this Court granted Brown & Williamson's motion for leave to appeal. 108 N.J. 198 (1987). (It is for that reason that despite the trial court's ultimate conclusion favoring Brown & Williamson's position, which is the subject of review here, Brown & Williamson is nevertheless denominated the appellant in this Court.)
We remanded the case once again to the trial court for its "factual determinations regarding the disqualification motion[ ] before this Court * * * with the trial court's determination to include whether Attorney Weiss, during the time he and Slattery were partners, had actually acquired confidential or privileged information" about this case, 108 N.J. at 199, those findings to be filed with this Court, with opportunity for the parties thereafter to file "any exceptions to or comments [thereon]." Ibid. On July 6, 1987, both Weiss and Slattery testified at an evidentiary hearing. Several documents, primarily bills and memoranda from the Rosen firm, were admitted into evidence.
The trial court found that Weiss had some "peripheral exposure" to the tobacco cases as follows: (1) after attending a tobacco litigation seminar, Slattery told Weiss that he had learned a new word -- "epidemiology" -- and "commented that there were flaws in statistical evidence and that there appears to be lack of proof of causation"; (2) the only pleading signed by Weiss was the Substitution of Attorney at the time Slattery joined the Norris, McLaughlin firm; (3) Weiss participated in discussions regarding "the feasibility of purchasing a computer for [the Rosen firm's] use and for aid in the Brown & Williamson cases"; (4) Slattery, a member of a special committee of tobacco company defense lawyers, spoke with Weiss in connection with two of that committee's projects: (a) Slattery asked
Weiss for assistance in communicating with a potential witness, and (b) Slattery discussed with Weiss the availability of another Rosen partner to assist Slattery in preparing a memorandum to be submitted to the committee; and (5) Slattery told ...