The opinion of the court was delivered by: I. LEO GLASSER
GLASSER, United States District Judge:
This is a motion by defendant The Port Authority of New York and New Jersey (the "Port Authority") to disqualify the attorney of record for plaintiff British Airways, PLC ("British Airways"), pursuant to Federal Rule of Civil Procedure 7(b)(1). For the following reasons defendant's motion should be granted.
This is an action by British Airways to recover damages to one of its aircraft, allegedly due to the negligence of the Port Authority, an entity responsible for the care and maintenance of taxiways at John F. Kennedy International Airport ("JFK") in New York City. The complaint alleges that on or about 9:00 p.m. on March 1, 1992, the engine of a British Airways' aircraft was damaged because the defendant allegedly "negligently, carelessly, and/or recklessly failed to maintain" a certain taxiway at JFK. Complaint, P 26. The complaint sets forth two causes of action and seeks four million dollars in damages. Affidavit of Keith E. Harris, April 27, 1994 ("Harris Aff'd"), Ex. A.
Plaintiff British Airways is represented in this action by the firm of Condon & Forsyth which filed a notice of claim on its behalf on or about May 6, 1992. Affidavit of Stephen J. Fearon, June 10, 1994 ("Fearon Aff'd), P 15, Ex. E. The complaint was filed on or about September 30, 1992. The Port Authority, which is representing itself via its own in-house counsel, answered the complaint on or about December 4, 1992, and asserted two affirmative defenses, two counterclaims and seeks approximately $ 22,000 from plaintiff in damages allegedly caused by plaintiff's breach of certain agreements between British Airways and the Port Authority. Harris Aff'd, Ex. B.
On or about March 11, 1994, the Port Authority served a third-party complaint against third-party defendant The United States of America by and through the Department of Transportation and the Federal Aviation Administration (the "United States"). Harris Aff'd, Ex. D. In short, the Port Authority alleges that any damage to the British Airways' aircraft on March 1, 1992, which was not caused by plaintiff's own culpable conduct, was due to the negligence of the third-party defendant due to its allegedly negligent performance in operating the Air Traffic Control Tower. Third-Party Complaint, P 13. The United States answered the third-party complaint on or about May 11, 1994.
Discovery in this action has included the following: two sets of interrogatories and requests for the production of documents has been served on the Port Authority by British Airways; The Port Authority has served two sets of interrogatories and requests for the production of documents on British Airways; the Port Authority has noticed fourteen depositions; the discovery requests have been responded to; to date, four employees of British Airways have been deposed; and British Airways produced an Incident Report and Extended Delay Worksheet regarding the March 1, 1992 incident. Condon & Forsyth has been preparing for the case via investigations and has made at least one trip to the United Kingdom and both parties have appeared at status conferences before Magistrate Judge John L. Caden. See Fearon Aff'd, PP 15-51.
B. Condon & Forsyth's Concurrent Representation of the Port Authority
The firm of Condon & Forsyth also represents the Port Authority in a number of personal injury actions, all of which are on-going. Condon & Forsyth represents the Port Authority in these actions because of certain lease agreements airlines such as British Airways have with the Port Authority by which the airlines agree to represent and indemnify the Port Authority "when a person is injured at JFK in an area within the airline's respective leaseholds." Fearon Aff'd, P 3.
It is undisputed that, pursuant to the lease agreement, the Port Authority is not billed for the firm's services. While British Airways contends that the Port Authority is not responsible for the satisfaction of any judgment or settlement which may be entered in these actions, the Port Authority states that "there are situations where the Port Authority may be held directly liable," Def.'s Reply Mem. at 4, if, for example, it is discovered that the accident did not occur in an area leased to the airline. British Airways also contends that the Port Authority does not "direct" these litigations and that the firm maintains no private communications with the Port Authority in these personal injury actions. See Fearon Aff'd, PP 4-7. It is also undisputed, however, that the Port Authority retains the right to review papers to be filed on its behalf by Condon & Forsyth. See, e.g., Doran Aff'd, Ex. 2 (letter of March 16, 1994, from Stephen J. Fearon of Condon & Forsyth to the Port Authority requesting comments on papers to be submitted in support of defendants' motion for summary judgment in Cohen v. The Port Authority, et al., No. 92 Civ. 6284 (CSH)). See also Fearon Aff'd, Ex. D (December 4, 1992 facsimile from Condon & Forsyth to the Port Authority attaching a draft answer for its review in Meyers v. The Port Authority, et al.).
At the end of 1993, the Port Authority "discovered" that Condon & Forsyth was representing the Port Authority in these personal injury actions, Harris Aff'd, P 10, and sent the firm a letter on December 30, 1993, informing the firm of the conflict and stating that "the General Counsel for the Port Authority is not in a position to waive such conflicts and will not do so." Harris Aff'd, Ex. F. There is no written response in the record from Condon & Forsyth to this letter. Three months later, on March 28, 1994, at a conference before Magistrate Judge Caden, the court instructed the Port Authority to make a motion to disqualify Condon & Forsyth within thirty days. This motion followed.
The Port Authority contends that because Condon & Forsyth is presently representing the Port Authority in other on-going actions, a "per se" rule of disqualification should be applied in this action since, as a general rule, the courts disfavor lawyers suing their own clients without the client's consent. British Airways, however, essentially makes three arguments in opposition to the motion: (1) because Condon & Forsyth only represents the Port Authority in the personal injury actions pursuant to the lease/indemnification agreement discussed above, the Port Authority is a vicarious, or attenuated client, and hence a less stringent "substantial relationship" test should be applied and, because there is no connection between the personal injury actions and the property damage action before the court, disqualification would be inappropriate; (2) even if the "per se" rule is adopted, British Airways has met its "heavy burden" of establishing that the trial of this action would not be tainted if Condon & Forsyth remained as its counsel, thus obviating the need for disqualification; and (3) even if it is improper for Condon & Forsyth to sue its own client in an ongoing unrelated action without the client's consent, the Port Authority has waived any conflict and has impliedly consented to British Airway's choice of counsel due to its silence regarding any alleged conflict prior to its December 30, 1993 letter, and this motion.
I. The "Per Se" Rule of Disqualification
Any discussion of the potential disqualification of counsel in a civil action in this circuit must begin with Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976). In Cinema 5, two actions were proceeding simultaneously against Cinerama, Inc. ("Cinerama"), a distributor of motion pictures and the operator of several large theater chains. In one action, Cinerama was the defendant in a federal antitrust suit in Buffalo and was represented by the Buffalo firm of Jaeckle, Fleischmann and Mangel. In the second action, brought in federal court in New York City, the plaintiff alleged that Cinerama was part of a conspiracy to acquire control of the plaintiff corporation through stock acquisitions, with the intention of creating a monopoly and restraining competition in New York City's motion picture theater market. In the New York action, the plaintiff was represented by the New York firm of Webster, Sheffield, Fleischmann, Hitchcook and Brookfield. An attorney, Manly Fleischmann, was a partner in both firms and divided his time between New York City and Buffalo. The district court in the New York action disqualified the plaintiff's counsel and the plaintiff appealed; the Second Circuit affirmed.
The Second Circuit rejected the plaintiff's argument that the district court should have used the "substantial relationship" test by which a court looks to see if there is a substantial relationship between the two actions in order to determine if disqualification is appropriate. "The 'substantial relationship' test is indeed the one that we have customarily applied in determining whether a lawyer may accept employment against a former client." Id. at 1386 (emphasis added). As in the case before this court, however, the Second Circuit noted that the situation involved an existing client, not a past client, and hence the "substantial relationship" test was not appropriate: "The propriety of this conduct [one firm in which an attorney is a partner is suing an actively represented client of another firm in which the same attorney is a partner] must be measured not so much against the similarities in litigation, as against the duty of undivided loyalty which an attorney owes to each of his clients." Id.
Using the ethical yardstick of "undivided loyalty," the court held that Ethical Considerations 5-1 and 5-14 of the American Bar Association's Code of Professional Responsibility required that the plaintiff's attorney must be disqualified.
The court wrote:
Under the Code, the lawyer who would sue his own client, asserting in justification the lack of "substantial relationship" between the litigation and the work he has undertaken to perform for that client, is leaning on a slender reed indeed. Putting it as mildly as we can, we think it would be questionable conduct for an attorney to participate in ...