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GOVERNMENT OF INDIA v. COOK INDUS.

November 19, 1976

The GOVERNMENT OF INDIA and the Food Corporation of India, Plaintiffs,
v.
COOK INDUSTRIES, INC. and Cook and Company, Defendants


Robert J. Ward, District Judge.


The opinion of the court was delivered by: WARD

ROBERT J. WARD, District Judge.

Defendants Cook Industries, Inc. and Cook and Company ("Cook") move to disqualify the law firm of Delson and Gordon and Frederick W. Meeker, an associate in the firm, from continuing to represent plaintiffs in this action. For the reasons hereinafter discussed, the disqualification motion is granted.

 I. The Basis of the Present Action

 The Government of India has purchased grain from Cook for a number of years. During 1975 and 1976, substantial publicity implicated Cook in a "grain scandal" involving alleged deliberate shortweighing and issuing of false inspection certificates whereby the grain actually shipped by Cook and other sellers was of less quantity and/or quality than indicated on the bills of lading and weight certificates. Ultimately Cook was indicted for its alleged role in the fraudulent scheme and pleaded nolo contendere to this indictment.

 Subsequent to the public disclosures, on May 3, 1976 Delson and Gordon, on behalf of the Government of India and The Food Corporation of India ("Government of India"), filed a complaint in this Court against Cook, *fn1" alleging breach of contract and fraud in the delivery of grain of "inferior and . . . lesser value than the grain specified in the respective contracts in that they were short weight, of lower grade and quality, and were infested or contaminated." Complaint para. 9. Plaintiffs ask for at least $25,500,000 compensatory damages and $10,000,000 punitive damages, plus interest, costs and disbursements.

 II. The Prior Actions

 Defendants' motion to disqualify Delson and Gordon, the Government of India's general counsel in the United States, and its associate attorney Mr. Meeker, from this multi-million dollar suit against Cook is based upon Mr. Meeker's defense of two similar claims against Cook just prior to his employment at Delson and Gordon.

 Upon graduation from law school in 1972, Mr. Meeker became associated with Hill, Rivkins, Carey, Loesberg and O'Brien ("Hill, Rivkins"), a twenty-two member law firm specializing in admiralty law. In 1973, Mr. Meeker was assigned to defend two actions against Cook. Shui Fa Oil Mill Co., Ltd. et al. v. M/S "Norma" & Austin Navigation Corp. Ltd. v. Cook Industries, Inc., 73 Civ. 250 and Shui Fa Oil Mill Co., Ltd. et al. v. Cook Industries, Inc., 73 Civ. 251 (hereinafter "Soybean Actions"). *fn2"

 The Soybean Actions arose out of an alleged breach of contract wherein a shipment of soybeans to plaintiffs was 254 tons short of the amount listed on the bills of lading and weight certificates. *fn3" Plaintiffs, alleging that they did not know whether the shortage was caused by Cook or the carrier, instituted one action against the carrier and a separate action against Cook. The carrier impleaded Cook and alleged that if there was a shortage it was due to Cook. The two actions were consolidated, and on February 20, 1976 the claims against the carrier and Cook were dismissed. Mr. Meeker commenced his association with Delson and Gordon on April 5, 1976 and was immediately assigned to this case in which the complaint was filed on May 3, 1976. *fn4"

 III. The Law

 The law is clear that if the former action and the present action are "substantially related" and the attorney's involvement in the former case was more than peripheral, *fn5" then there is an irrebuttable presumption that the attorney had access to confidential information. Silver Chrysler Plymouth v. Chrysler Motors Corp., 518 F.2d 751, 756-57 (2d Cir. 1975); see The NCK Organization Ltd. v. Bregman, 542 F.2d 128, 132-134 (2d Cir. 1976); Note, The Second Circuit and Attorney Disqualification -- Silver Chrysler Steers In A New Direction, 44 Fordham L.Rev. 130 (1975). In other words, should the Court determine that there is a substantial relation between the two actions, then it will not require the movants to come forward with proof that Mr. Meeker had access to confidences, *fn6" nor will it give any weight to Mr. Meeker's vehement assertions that he did not have access to and does not now possess confidential information about Cook. See T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265, 268-69 (S.D.N.Y. 1953); accord, The NCK Organization Ltd., supra at 134-135; Hull v. Celanese Corp., 513 F.2d 568, 572 (2d Cir. 1975); Motor Mart, Inc. v. Saab Motors, Inc., 359 F. Supp. 156, 157 (S.D.N.Y.1973). Furthermore, if a substantial relationship is established, the presumption of access to confidences prevails even though the "confidential" information may be publicly available. The NCK Organization Ltd., supra at 133; Emle Industries, Inc. v. Patentex, Inc., 478 F.2d 562, 572-73 (2d Cir. 1973); United States v. Standard Oil Co., 136 F. Supp. 345, 348 (S.D.N.Y.1955). The rationale for this irrebuttable presumption is that to allow the litigants, attorneys and Court to become embroiled in a controversy over whether confidences have been reposed and whether the attorney is consciously or subconsciously making use of such confidences would thwart Canon 4's *fn7" ultimate objective of promoting an attorney-client relationship of trust and candor through preservation of clients' and former clients' confidences. Emle Industries, Inc., supra at 570-71; Standard Oil Co., supra at 355; T.C. Theatre Corp., supra at 269.

 The issue before this Court, then, is whether the former and present actions against Cook are substantially related. To determine this

 
the Court must ask whether it can reasonably be said that in the course of the former representation the attorney might have acquired information related to the subject of his subsequent representation. If so, then the relationship between the two matters is sufficiently close ...

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