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Hull v. Celanese Corp.

decided: March 26, 1975.

JOAN HULL, ON BEHALF OF HERSELF AND OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
CELANESE CORPORATION, CELANESE FIBERS MARKETING CO.; JOHN W. BROOKS, VERNON E. JORDAN, GRAYSON M.-P. MURPHY, AND DR. JEROME B. WIESNER, OFFICERS AND DIRECTORS OF CELANESE CORPORATION; AND ALLAN R. DRAGONE, PRESIDENT OF CELANESE FIBERS MARKETING CO., DEFENDANTS-APPELLEES



Appeal by plaintiff Joan Hull from the order of July 12, 1974, of the United States District Court for the Southern District of New York, Richard Owen, J., disqualifying plaintiff's counsel. Affirmed.

Oakes and Gurfein, C.j.j. and Tenney,*fn* D.j.

Author: Tenney

TENNEY, J.

This Court today hears the appeal from an order of disqualification of plaintiff's counsel, the law firm of Rabinowitz, Boudin & Standard ("the Rabinowitz firm").*fn1 The question at issue is whether a law firm can take on, as a client, a lawyer for the opposing party in the very litigation against the opposing party. Factually, the case is novel and we approach it mindful of the important competing interests present. It is incumbent upon us to preserve, to the greatest extent possible, both the individual's right to be represented by counsel of his or her choice and the public's interest in maintaining the highest standards of professional conduct and the scrupulous administration of justice.

The complaint in this action was brought by plaintiff-appellant Joan Hull ("Hull"), an employee of Celanese Corporation ("Celanese"), against Celanese alleging sex-based discrimination in employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e. In its answer, Celanese denied the material allegations of the complaint. Thereafter, the Rabinowitz firm filed a motion seeking leave for five other women to intervene as plaintiffs in the action.*fn2 One of the proposed intervenors was Donata A. Delulio, an attorney on the corporate legal staff of Celanese. Celanese opposed the proposed intervention and additionally sought the disqualification of the Rabinowitz firm based on the risk that confidential information received by Delulio as Celanese's attorney might be used by the Rabinowitz firm against Celanese in the prosecution of the joint Hull-Delulio claims.*fn3

The trial court denied Delulio's motion to intervene*fn4 and subsequently ordered the disqualification of the Rabinowitz firm.*fn5

Judge Owen premised the denial of intervention on the fact that Delulio had been active in the defense of this very action, thus raising a serious risk of disclosure of confidential information. He found the opportunity for even inadvertent disclosure to be ever-present.*fn6

In granting the motion to disqualify the Rabinowitz firm, Judge Owen clearly recognized three competing interests: (1) Hull's interest in freely selecting counsel of her choice, (2) Celanese's interest in the trial free from the risk of even inadvertent disclosures of confidential information, and (3) the public's interest in the scrupulous administration of justice. In balancing these competing interests, the trial court acknowledged the right of Hull to counsel of her choice, but held the interests of Celanese and the public to be predominant. Based upon the relationship between Delulio and the Rabinowitz firm, the preparation by the Rabinowitz firm on the motion to intervene, supporting affidavits, and amended complaint, and the contents of those documents, Judge Owen concluded:

"The foregoing contents of affidavits prepared by Delulio and the Rabinowitz office are some evidence, in my opinion, of the possibility that Delulio, unquestionably possessed of information within the attorney-client privilege, did in fact transmit some of it to the Rabinowitz firm, consciously or unconsciously."*fn7

The trial court felt that the continued retention of the Rabinowitz firm would create at least the appearance of impropriety due to the on-going possibility for improper disclosure.*fn8 For the reasons stated infra, we must affirm.

The unusual factual situation presented here bears repetition in some detail. Hull's employment by Celanese began in 1963; Delulio's employment there began in July 1972. In September of 1972, Hull filed charges with the Equal Employment Opportunity Commission ("EEOC") against Celanese alleging sex-based discrimination in employment. Delulio was assigned to work on the defense of the Hull case in February of 1973 and her work on the case continued until September 1973.*fn9 In the interim, the complaint herein was filed.*fn10

It was during September of 1973 that Hull and Delulio met socially for the first time. Two months later Delulio approached Hull to ascertain the name of the law firm representing Hull. As a result of this conversation, Delulio contacted the Rabinowitz firm on November 9, and on November 15, 1973 the Rabinowitz firm filed sex discrimination charges on behalf of Delulio with the EEOC. Delulio thereafter consulted with the Association of the Bar of the City of New York regarding, inter alia, the propriety of her intervention in the Hull action. By letter dated March 12, 1974, the Association of the Bar of the City of New York advised Delulio against intervention.*fn11 Subsequently, the motion herein seeking intervention on behalf of Delulio and four other women was filed. Two weeks later Celanese cross-moved to deny intervention and to disqualify the Rabinowitz firm.

Jurisdiction

The order of disqualification has been held by this Court to be a "final order" and hence appealable pursuant to 28 U.S.C. § 1291. Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2d Cir. 1974) (en banc). See also General Motors Corporation v. City of New York, 501 F.2d 639, 644 (2d Cir. ...


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