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Fredericks v. Atlantic City Board of Education

August 26, 2010

CAROL FREDERICKS AND KENNETH SCHLOESSER, PLAINTIFFS,
v.
ATLANTIC CITY BOARD OF EDUCATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Joel Schneider United States Magistrate Judge

[Doc. No. 102]

OPINION

This Opinion addresses the motion of defendants The Atlantic City Board of Education and Frederick P. Nickles to disqualify John M. Donnelly and his law firm Levine, Staller, Sklar, Chan, Brown & Donnelly, P.A., from representing plaintiffs.*fn1 For the reasons to be discussed the Board's motion is DENIED.*fn2

Background

Plaintiff filed her complaint on June 20, 2008 against the Atlantic City Board of Education ("ACBOE"), its Superintendent of Schools, Fred Nickles, and its Assistant Superintendent for Human Resources, Thomas Kirschling. Plaintiff claims that her employment contract as the Atlantic City School District's Assistant Business Administrator was wrongfully not renewed. Plaintiff was employed by the ACBOE from September 2003 to June 30, 2007. Plaintiff's complaint alleges her contract was not renewed because, inter alia, she complained about the Board's unlawful fiscal practices and false claims. Plaintiff allegedly complained about the Board's cell phone usage, parent program, and the school lunch program. Plaintiff also alleges she complained about Nickles' inappropriate fund-raising activity for Board members. See Complaint at ¶¶112-117. In addition, plaintiff alleges she was retaliated against because she testified at the bribery trial of former Board President Cornell Davies, who was an "ally" of Nickles and Kirschling. See Complaint at ¶¶118-135. Plaintiff also alleges defendants retaliated against her because of her association with Nickles' "political adversary." Id. at ¶¶127-133.

From the outset of the case plaintiff has been represented by Donnelly. Effective February 1, 2010, the Levine, Staller law firm merged with Kelley and Callahan, P.C. The Board argues that Glenn P. Callahan, Esquire, a principal in Keeley & Callahan, represented the Board before its merger. The Board argues that Callahan provided "legal services and advice" to the Board in connection with the Board's "E-Rate investigation."

Earlier in the case the Court addressed a privilege issue involving Callahan that is germane to the present motion. On February 7, 2006, the Board passed a resolution authorizing the retention of an "independent professional" to investigate the terms and conditions of the Year Six E-Rate proposals submitted to the federal government for the elementary schools of the City of Atlantic City. The Board selected Callahan to do the investigation. As noted in Callahan's written report, he "was engaged to investigate and report to the Board with respect to problems and issues which related to the Board's participation in the Year Six E-Rate program." Report at 1. Callahan noted that the issues he addressed fell into two major categories. One category related to the circumstances surrounding the planning and execution of the Year Six E-Rate bid process. The second category related to the termination of Jonathan Jones, the former Data Center Manager for the district and his subsequent successful lawsuit against the Board and certain individuals. Without relaying all of the conclusions in Callahan's report, suffice it to say that the report was critical of the Board. Callahan discussed how the bidding and ultimate awarding of the Year Six E-Rate contract was flawed. He also discussed Jonathan Jones and the fact that some of the accusations against him were unfounded. Callahan also discussed the deterioration of the personal and professional relationship between Nickles and Jones and how that contributed to problems with the E-Rate program.

On October 1, 2009, the Court held oral argument on the Board's Motion for Protective Order. The Board argued, inter alia, that Callahan's report did not have to be produced to plaintiffs because it was protected by the attorney-client privilege and work-product doctrine. See Transcript of Oral Argument ("Tr.") at 2-17, Doc. No. 52. In its oral opinion the Court denied the Board's motion and directed the Board to produce Callahan's report. Id. On October 2, 2009, the Court issued a formal Order denying the Board's motion.

The Board argues Donnelly should be disqualified pursuant to New Jersey's Rules of Professional Conduct ("R.P.C.") 1.9 and 1.10. According to the Board, Donnelly should be disqualified because:

R.P.C. 1.9 dictates that an attorney cannot switch sides to represent a party adverse to a former client for whom the attorney previously performed work without an express waiver, and absent waiver, an attorney attempting to do so must be disqualified. Rule 1.9 further states that a public entity is unable to consent to waiving such conflict.

Board's Memorandum ("Memo") of Law at 9. The Board argues the Levine, Staller law firm should be disqualified because:

Rule 1.10... provides that any attorney disqualification is imputed to any law firm with which the attorney is associated, the disqualification of the law firm being mandatory where screening cannot cure the disqualification of the attorney due to that attorney having acquired confidential materials relating to the case.

Id.

The Board contends that plaintiffs' lawyers should be disqualified to prevent them from taking "unfair advantage [of the Board] through the use of confidential information gained in relationship with a client's adversary." Memo. of Law at 14-15. In addition, the Board argues that the "time and effort expended by counsel and current client does not outweigh the ...


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