The opinion of the court was delivered by: CURTIN
This is a dispute which has arisen during the process of taking non-party depositions of former employees of defendant Occidental Chemical Corporation [Occidental]. These depositions relate to activities which took place several years ago and which may be highly relevant to a major environmental lawsuit brought by the federal and state governments against Occidental.
Counsel for Occidental have already provided legal assistance to one former Occidental employee, and the company plans on sending letters to other former employees extending offers to absorb the costs of having Occidental's present counsel provide legal assistance to any ex-worker who is asked to appear for a deposition. The United States, the State of New York, and defendant City of Niagara Falls have asked the court to enter an order prohibiting Occidental's attorneys from representing any former Occidental employee during these discovery proceedings.
Occidental's attorneys in this case are the law firms of Wald, Larkrader & Ross of Washington, D.C., and Phillips, Lytle, Hitchcock, Blaine & Huber of Buffalo, New York. For the reasons stated below, the court will not enjoin these firms from representing former Occidental employees. However, neither Phillips/Wald nor Occidental shall send these people any notice of the offer to retain Phillips/Walk as their attorneys.
Since the relief sought here is rather sweeping, it is necessary to state the facts in some detail. Non-party depositions of persons who lived or worked at Love Canal in the 1940s and 1950s were commenced in November 1984. Depositions of three former residents were completed in November. On December 10, 1984, counsel met in Niagara Falls, New York, to take the deposition of John W. Gibson, who worked for Occidental for 33 years before retiring in 1980. In the course of his employment with Occidental, Mr. Gibson took part in the disposal of chemical wastes at Love Canal between 1947 and 1952.
December 12, 1984, was the third day of Mr. Gibson's deposition. The day began with questioning by an attorney from the United States Department of Justice. Mr. Gibson testified about various chemical dumping activities for about an hour before Occidental's attorney (David K. Floyd) suggested that a recess be taken. Tr. III, p.263.
When the deposition resumed, Mr. Floyd informed counsel that Mr. Gibson had mentioned during the recess that, in his testimony, he had omitted a detail not material to the present motion. Mr. Floyd suggested that Mr. Gibson offer to correct the omission. The attorney representing the United States agreed to pursue this, but first he wanted to inquire into the conversation Mr. Gibson had with Mr. Floyd during the recess. Floyd claimed that the conversation was privileged, citing Upjohn Co. v. United States, 449 U.S. 383, 66 L. Ed. 2d 584, 101 S. Ct. 677 (1980). As the lawyers debated this issue, Gibson was asked to leave the room "briefly." The attorneys' inability to resolve the problem raised by the objection prevented Mr. Gibson from returning. The deposition did not resume until almost a month later on January 7, 1985. Tr. III, pp.263-66.
Floyd stated during the December 12 deposition that he had never advised Gibson about the possibility of obtaining an attorney,and he indicated that Gibson was not his client. Tr. III, pp.275, 279.
Gibson became a client of the law firms representing Occidental on the morning of January 7, 1985, the day he resumed his deposition testimony. Floyd, who is a member of the Phillips, Lytle firm representing Occidental, stated that it was he who suggested to Gibson that Gibson might utilize the services of Occidental's attorneys during the deposition. Mr. Floyd requested Occidental's assent to the proposition that the corporation absorb the legal costs of having its counsel represent Mr. Gibson at the deposition. Occidental agreed to this. Floyd then offered this arrangement to Gibson, and he accepted. Tr. IV, p.301.
As the proceedings began on January 7, Floyd announced that he was withdrawing his objection to the inquiry into the conversation he had with Gibson on December 12. This was consistent with what he had stated in a letter he sent to the other attorneys on January 2. However, counsel were surprised when they heard Floyd announce that Gibson was now his client.
The Justice Department lawyer asked Gibson about the conversation he had with Floyd during the recess of the proceedings of December 12. Gibson answered without any objections. He was then asked how the arrangement with Occidental's lawyers had come about. Floyd objected and then advised Gibson that the answer sought was privileged. After he advised Gibson that he could waive the privilege if he wished, Gibson waived his privilege. Tr. IV, pp.305-08.
Gibson reiterated the substance of what Floyd had previously told counsel. He said that Floyd telephoned him sometime during the week of January 1 and for the first time told him that his firm might represent Gibson during the deposition free of charge. He told Gibson that this had to be approved by Occidental but that such an arrangement would probably be acceptable and said that he could get another lawyer if he wished. Tr. IV, pp.308-11.
Gibson did not think he "needed" a lawyer. However, "as we went along and . . . I though about that and then when they talked to me, they [told] me that there was a probability that they could represent me so I said, yes, okay. Let's do that." Id. at 308.
The attorney-client relationship between Phillips/Wald and Gibson was finalized on the morning of January 7, after Floyd received final approval from Occidental. Floyd handed a letter to Gibson when Gibson gave his final assent to the arrangement. The contents of the letter, written on Phillips, Lytle stationery, are set forth in the margin.
Among other things, Gibson was informed that if the interests of himself and Occidental conflicted, Occidental's attorneys would no longer represent him.
Gibson was questioned further about his agreement with the Phillips/Wald firms. Counsel for New York State brought out the fact that Gibson never told Floyd or anyone else that he needed a lawyer. However, Mr. Gibson had an interesting response ...