the attorney in fact received confidential information, because the receipt of such information will be presumed.'" Host Marriott Corp. 891 F. Supp. at 1007 (quoting Bagdan v. Beck, 140 F.R.D. 660, 668 (D.N.J. 1991)); see Wilson P. Abraham Construction Corp v. Armco Steel Corp., 559 F.2d 250, 252 (5th Cir. 1977). The court must not inquire whether the attorney actually received such information or whether the attorney is planning to use the damaging disclosures in a manner detrimental to his former client. Emle Industries, Inc. v. Patentex, Inc., 478 F.2d 562, 571 (2d Cir. 1973).
Here, I find a similarity between the factual bases of both the present action and Skadden's prior representation of Essex. The information and confidences to which Skadden had access while representing Essex throughout the 1988 takeover attempt and acquisition process substantially relates to the subject matter of the firm's representation of Home in the instant action. In preparing for the litigation that arose from the takeover attempt, Skadden became privy to the events surrounding the takeover and Essex's position as a party to the suit. In preparing for the white knight shows, Skadden had access to Essex's confidential documents as these related to Essex's past practices at its plant sites. Finally, during the negotiations with Dow for the acquisition of Essex, Skadden had worked closely with the investment banker and senior personnel of Essex.
In defending the present action, defense counsel inquired into the environmental status of the Essex properties and the past practices of Essex which potentially led to the property damage. For instance, during the depositions of former Essex employees, defense counsel questioned former Essex employees about aspects of the white knight shows of 1988 and the circumstances surrounding the Dow acquisition. Walsh Cert., P 10. The purpose of such questioning was to determine the extent of Essex's knowledge, if any, concerning site contamination and when Essex first obtained such information. Walsh Cert., P 10.
Hartford has certified that such inquiries are commonly made in cases where the underlying claims concern ECRA sites or sites which were acquired by an outside entity prior to the report of such claims. Walsh Cert., P 10. While this may be true, such a practice still demonstrates that the matters are substantially related, thus satisfying the third prong of the RPC 1.9(a)(1) test and compelling the disqualification of Skadden under RPC 1.9(a)(1).
B. Conflict Arising From Membership in a Joint Defense Group
Essex asserts that the creation of the Joint Defense Agreement by all defense counsel compels the disqualification of the remaining defense counsel. Presumably, as members of the defense group defense counsel had access to confidential information to which Skadden was privy from its prior representations of Essex. The presumed sharing of such confidential information raises a conflict of interest for all defense counsel. In any event, Essex claims that participation in the Joint Defense Agreement creates an appearance of impropriety.
In support of its motion, Essex relies on decisions which granted a motion to disqualify co-counsel. See, e.g., Putnam Resources, Ltd. v. Sammartino, Inc., 124 F.R.D. 530 (D.R.I. 1988): Cheng v. GAF Corp., 631 F.2d 1052 (2d Cir. 1980), vacated on other grounds, 450 U.S. 903 (1981). For example, in Putnam Resources, a claim was brought by a creditor against a debtor and a competing creditor. The plaintiff-creditor was represented by two firms, the lead counsel having previously represented the defendant-creditor in a prior loan transaction with the defendant-debtor. 124 F.R.D. at 531. As a result of this former representation, the defendants moved to disqualify both plaintiff's lead counsel and co-counsel in the subsequent action on the grounds that co-counsel effectively "stood in the shoes of Roberts-Carroll [lead counsel]" for purposes of the later suit. 124 F.R.D. at 531. The court granted defendants' motion to disqualify plaintiff's lead counsel on the grounds that the two representations were substantially related. 124 F.R.D. at 532. The court then determined whether co-counsel should be disqualified.
Focusing on the relationship between plaintiff's lead and co-counsel, the court concluded that the nature of such a relationship "places the former in a position to receive confidences regarding Shawmut [the defendant-creditor] and moreover gives the appearance of impropriety." 124 F.R.D. at 533. The court presumed that lead counsel shared this earlier acquired information with co-counsel. 124 F.R.D. at 533. Allowing co-counsel to continue would create a risk that confidential information obtained during the former representation of the defendant-creditor could be used against it. 124 F.R.D. at 533.
I find there exists a risk that the confidential information acquired by Skadden during its prior representation may be used to the detriment of Essex. I also presume that such confidential and privileged information has been shared between all participants to the Joint Defense Agreement, despite defense counsel's certifications to the contrary. Allowing all defense counsel to remain indirectly creates the same risk that the representation by Skadden posed directly, despite the lack of a prior direct attorney-client relationship between Essex and the defense counsel.
Melito & Adolfsen ("Melito"), counsel for Hartford, asserts that absent an attorney-client relationship between Essex and it, Essex must show that defense counsel actually received confidential information from Skadden. However, assuming Melito correctly states the law, I deem it appropriate to decide the pending motion as if an implied attorney-client relationship exists between Essex and all defense counsel in light of the Joint Defense Agreement entered into by all defense attorneys.
To protect the sharing of confidential information, courts have determined that "an attorney who serves his or her client's codefendant for a limited purpose becomes the codefendant's attorney for that purpose." Ageloff v. Noranda, Inc., 936 F. Supp. 72, 76 (D.R.I. 1996); see Wilson P. Abraham Construction Corp., 559 F.2d at 253; United States v. McPartlin, 595 F.2d 1321, 1337 (7th Cir. 1979).
Defense counsel assert that any communications shared pursuant to the Joint Defense Agreement is protected by the joint defense privilege. The privilege was designed to protect communications shared when individuals with separate attorneys consult together on issues of common legal interest. Haines v. Liggett Group, Inc., 975 F.2d 81, 84 (3d Cir. 1992). Courts have recognized a 'fiduciary obligation' or 'implied professional relation' between codefendants and their legal counsel. Ageloff v. Noranda, Inc., 936 F. Supp. 72, 76 (D.R.I. 1996); see Glueck v. Jonathan Logan, Inc., 653 F.2d 746, 748-49 (2d Cir. 1981); Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1319 (7th Cir.), cert. denied, 439 U.S. 955, 58 L. Ed. 2d 346, 99 S. Ct. 353 (1978);.
To establish the joint defense privilege, defendants must show that (1) the communications were exchanged during a joint defense effort; (2) the communications were designed to further the effort; and (3) the privilege was not waived. In re Bevill, Bresler & Schulman Asset Manag., 805 F.2d 120, 126 (3d Cir. 1986). I am satisfied that all of the elements have been met, thus establishing that a joint defense privilege exists as to communications arising under the Joint Defense Agreement.
Defense counsel maintain that there have been no substantive discussions between Skadden and the other defense counsel concerning Essex. However, defense counsel assert that Essex's proposed interrogatories violate the joint defense privilege, attorney-client privilege, and/or work product doctrine because the interrogatories seek to obtain "privileged joint defense communications." Melito Brief, at 11. Defendants cannot enjoy the benefits of the privilege without accepting its burdens. In other words, defendants cannot claim that Skadden did not share any confidential information about Essex while maintaining that joint communications are protected by a recognized privilege, and so cannot be inquired into by Essex. I decline to compel defense counsel to respond to interrogatories pertaining to their relationship with Skadden. I find that the joint defense privilege is applicable. I find that an actual conflict of interest exists, justifying the disqualification of all defense counsel.
C. Appearance of Impropriety
Essex further asserts that all defense counsel should be disqualified on the grounds that there exists an "appearance of impropriety" in violation of RPC 1.7(c)(2) and RPC 1.9(b). RPC 1.7(c)(2) provides:
In certain cases or situations creating an "appearance of impropriety" rather than actual conflict, multiple representation is not permissible.
The New Jersey Supreme Court added a new paragraph to RPC 1.9 which now applies the provisions of RPC 1.7(c) to successive representation problems covered by RPC 1.9.RPC 1.9(b); see Dewey, 109 N.J. at 214. Under an appearance of impropriety analysis, a court must focus on whether "an ordinary knowledgeable citizen acquainted with the facts" would conclude that all the defense counsel's continued representations pose "substantial risk of disservice to either the public interest or the interest of one of the clients." RPC 1.7(c)(2); Dewey, 109 N.J. at 215-16.
"The maintenance of public confidence in the propriety of the conduct of those associated with the administration of justice is so important a consideration that we have held that a court may disqualify an attorney for failing to avoid even the appearance of impropriety. Levin, 579 F.2d at 283; Kramer v. Scientific Control Corp., 534 F.2d 1085, 1088-89 (3d Cir. 1976). Mindful of these considerations, I am satisfied that an ordinary citizen would conclude that an appearance of impropriety exists here. The Joint Defense Agreement, under which all defense counsel have participated, creates a presumption that Skadden shared, or could have shared, with them confidential information obtained from Skadden's prior representation of Essex.
By their participation in the Joint Defense Agreement, all of the defense counsel have created a relationship with Skadden such that it placed them in a position to have access to confidences regarding Essex. Such a relationship creates an appearance of impropriety. Accordingly, under RPC 1.7(c)(2) and 1.9(b), a sufficient showing has been made which warrants disqualification of all the defense counsel.
For the reasons set forth above, the motion of plaintiffs to disqualify all the defense counsel is GRANTED. An appropriate Order accompanies this Opinion.
RONALD J. HEDGES
United States Magistrate Judge
DATED: May 22, 1997
This matter having come before the Court on the motion of plaintiffs to disqualify all defense counsel; for the reasons set forth in the accompanying Opinion;
IT IS on this 22nd day of May, 1997
ORDERED that the motion is GRANTED.
RONALD J. HEDGES
UNITED STATES MAGISTRATE JUDGE