the removal of the trusteeship imposed by the International over Local 280 and the restoration of certain plaintiffs as officers of the Local. However, under Local 280 bylaws, officers become trustees of the Funds automatically by reason of their status as officers. Therefore, whatever action is taken by the court in resolving the dispute over control of the Local will also determine who will be trustees of the Funds. For this reason the case must be considered in its entirety, and not piecemeal.
Plaintiffs say that there is not and never has been any attorney-client relationship between Herrmann and defendants Knapp and Scrufari in their capacities as Fund trustee and plan manager, respectively, so these defendants have no standing to move on the basis of attorney-client privilege. They maintain that Herrmann's clients were and are the participants and beneficiaries of the Funds, and not the Funds' trustees or fiduciaries.
Defendants Knapp and Scrufari respond, however, that they have standing to bring their motion since, as well as being fiduciaries of the Funds, they are also participants and beneficiaries. As such, they are clients of Mr. Herrmann by virtue of his being the Funds' attorney. As attorney for the Funds, Herrmann owes an undivided duty of loyalty to all of the participants of the Funds. Helt v. The Metropolitan District Commission, 113 F.R.D. 7, 9-10 (D. Conn. 1986); Washington-Baltimore Newspaper Guild, Local 35 v. Washington Star Co., 543 F. Supp. 906, 909 (D.C.D.C. 1982). In this dispute he may not represent one group against another, because of his duty to all. Defendants also cite DR 5-108.
Mr. Herrmann is not a disinterested attorney attempting to provide information in this case, but rather is an attorney whose partner, LeBlanc, is representing individual plaintiffs who are seeking to replace certain defendants from Union positions and from positions as officers of the Funds. Herrmann's past and present representation of the Funds is substantially related to this litigation, and the plaintiffs' interests are, at least arguably, materially adverse to the interests of Knapp and Scrufari as participants and beneficiaries. In aligning himself with the plaintiffs, Herrmann, through his partner LeBlanc, may be improperly representing the interests of some of the Fund participants and beneficiaries against the interests of others. As the Funds' attorney, Mr. Herrmann has a fiduciary responsibility to represent the interests of all the beneficiaries; and neither he nor LeBlanc, his law partner, may ethically represent some beneficiaries against others in a matter that is inextricably linked to his role as legal counsel to the Funds. See Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977); Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1386 (2d Cir. 1976); Hull v. Celanese Corp., 513 F.2d 568 (2d Cir. 1975).
On January 18, 1994, Robert Doren, Esq., appeared in court and said that for the purpose of this litigation his firm would represent the Funds, but beyond sending a letter to the court on February 17 (Item 32), he has not participated at all in the present dispute. In his letter, he does not take a position on whether LeBlanc should continue as attorney for the plaintiff, but says that his firm represents the Funds as an entity and does not represent individual participants or beneficiaries. He suggests that the court on its own authority appoint an independent fiduciary. No action may be taken on this suggestion until an appropriate motion is filed.
The motion to disqualify Mr. LeBlanc is granted on the basis of his close association with Mr. Herrmann, and Herrmann' s continuing fiduciary duty, as the Funds' attorney, to all of the participants and beneficiaries of the Funds.
From the allegations in the complaint, it appears that serious questions remain. As soon as plaintiffs obtain substitute representation, the court shall be notified so that this case may progress to resolution as quickly as possible.
JOHN T. CURTIN
United States District Judge
Dated: February 25, 1994