stating that they will not reveal at trial the lawyers' former association with LeBoeuf.
Given that LeBoeuf has not met its burden of showing that Dettmer and Streisfeld will give testimony adverse to their client and that the jury will not know of their past employment at LeBoeuf, I decline to disqualify plaintiff's counsel on the ground that Dettmer and Streisfeld will be either actual or unsworn witnesses at trial.
Defendant's Fourth Ground: Counsel's Fiduciary Duty
LeBoeuf's final ground for disqualification centers on plaintiff's counsel's fiduciary duty to their former firm. LeBoeuf asserts that Dettmer and Streisfeld possess information that they learned at LeBoeuf upon which they will rely during the course of this litigation. The information concerns both the internal workings of the firm and events underlying this action. LeBoeuf argues that the attorneys cannot use this information because 1) the information is confidential and 2) even if the information is not confidential, the attorneys' fiduciary duty prevent them from using information that they learned at the firm even if that information is available to others, for example, through discovery.
LeBoeuf is correct in its argument that former employees owe a continuing duty to refrain from revealing an employer's trade secrets or other confidential information. See Great Lakes Carbon Corp. v. Koch Indus., Inc., 497 F. Supp. 462, 469-70 (S.D.N.Y. 1980) (Pollack, J.). LeBoeuf is mistaken, however, in the second prong of its argument, that Dettmer and Streisfeld are prohibited even from using information from the firm that is not confidential. Their argument stems from LeBoeuf's reliance on two Second Circuit cases, Franke v. Wiltschek, 209 F.2d 493 (2d Cir. 1953) and ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F.2d 988 (2d Cir. 1983). These cases are inapposite, however, as a finding of bad faith in securing the alleged private information was critical to their outcome.
In Franke, defendants, in the guise of salesmen, tricked a manufacturer into revealing to them his trade secrets and preceded to make a similar product and undersell the manufacturer. The district court granted an injunction permanently prohibiting defendants from selling their product. The Second Circuit affirmed, and in response to defendants' argument that they should be allowed to sell the product because the technology involved was publicly available, the court said, "The essence of their action is not infringement, but breach of faith." Franke, 209 F.2d at 495. Franke does not, as defendant contends, stand for the proposition that where agents gain nonconfidential information from a principal via their normal relationship, the agents incur a duty not to use it to the principal's detriment after the agency relationship ends, and even though the agents could have gained the knowledge from public sources. Because Dettmer and Streisfeld did not obtain any of their general knowledge of the firm as a result of bad faith, Franke does not bar them from representing Matthews.
Likewise, LeBoeuf's reliance on ABKCO Music is misplaced. As the Second Circuit noted, the facts in ABKCO were "not only novel, but unique." 732 F.2d at 995. The court did not allow Allen Klein, the former business manager of the Beatles, to profit from his purchase of the stock of a company to whom George Harrison lost a copyright infringement case because Klein had initially participated in settlement discussions in the case on Harrison's side and subsequently had covertly furnished confidential royalty information to Harrison's adversary. The court held that Klein had breached his fiduciary duty to Harrison; the decision turned on various acts committed in bad faith by Klein. I find no bad faith on the part of Dettmer and Streisfeld in their employment relationship with LeBoeuf or their present representation of Matthews, and the holding in ABKCO is therefore inapplicable to the case before me.
Because I reject the prong of LeBoeuf's argument which rests upon the use of nonconfidential information, I need address only whether Dettmer and Streisfeld possess confidential information learned at LeBoeuf that they could use to the firm's detriment, and thereby breach their fiduciary duty. I fail to see why the information LeBoeuf puts forward as reasons for counsel's disqualification is confidential. For example, defendant argues that Dettmer and Streisfeld may not litigate this action due to their knowledge of the internal practices of LeBoeuf. Specifically, defendant contends that Dettmer and Streisfeld's knowledge about the duties and responsibilities of the Managing Clerk's Office, Streisfeld's familiarity with LeBoeuf's settlement practices, and Dettmer's knowledge of the firm's financial reports warrant their disqualification. I disagree. Dettmer and Streisfeld's knowledge of the duties and responsibilities of the Managing Clerk's Office is not confidential information -- most large law firms have similar offices, and Matthews himself knows the duties and responsibilities of the Managing Clerk's Office.
Furthermore, I do not understand how Streisfeld's participation in settlement negotiations for two or three LeBoeuf matters unrelated to this action could have given her any information relevant to this action. A similar argument was addressed and persuasively rejected in Vestron, Inc. v. National Geographic Society, 750 F. Supp. 586 (S.D.N.Y. 1990), where defendant moved to disqualify a law firm from representing plaintiff because the firm had received "sensitive and confidential information concerning ... National Geographic's approach to and strategy in litigation matters...." Id. at 595. The Vestron court held that an understanding of "general litigation thinking" cannot form the basis for a disqualification motion. Id. Finally, I fail to see why Dettmer's knowledge about LeBoeuf's financial data would give him an unfair advantage.
Any other attorney who might represent Matthews could obtain through discovery any financial information relevant to this action, such as the firm's realization rates and Matthews' hourly rate.
Potentially more persuasive was LeBoeuf's argument that Dettmer and Streisfeld must be disqualified because while employed by LeBoeuf, they learned confidential information about this case itself. Defendant, however, failed to meet its burden of proving that the attorneys received any relevant information about the events giving rise to this action. LeBoeuf found it significant, for example, that Streisfeld had conversations with three LeBoeuf employees concerning Matthews' job performance. I, however, consider such conversations mere gossip, and LeBoeuf has not demonstrated how these conversations are material to this action. Additionally, Lawrence Pollack, a LeBoeuf partner, contended in an affirmation that Dettmer was privy to discussions, "both in and out of partnership meetings," about "Matthews and the Managing Clerk's Office." Aff. Lawrence W. Pollack at 2. Pollack further alleged that Dettmer had complained to Pollack "about Matthews' inefficient administration of the Managing Clerk's Office." Id. Dettmer denies participating in or being privy to such discussions. Aff. Frederick R. Dettmer at 2. Moreover, Dettmer states that he complained to Pollack about "certain members of the managing clerk's office other than Matthews....[and was] quite explicit in stating that Richard Matthews was not one of the individuals I was concerned about." Id. at 3. I invited defendant to submit further affidavits regarding the precise subject matter of the discussions and how those conversations were material to the issues to be addressed in this litigation, but defendant failed to do so. I therefore deem this objection waived, and find that defendant has not adequately shown that Dettmer and Streisfeld possess confidential information about LeBoeuf or this action, the use of which would breach their fiduciary duty to the firm, warranting their disqualification from this action.
Because I find that LeBoeuf did not meet its burden of demonstrating that Dettmer and Streisfeld would be adverse witnesses to their client, and because I do not find that either attorney will breach any fiduciary duty to LeBoeuf by representing Matthews in this litigation, I deny defendant's motion to disqualify counsel.
I direct the Clerk of the Court to enter judgment denying defendant's motion to disqualify counsel for the reasons set forth above and on the record of oral argument held on June 23, 1995.
Dated: New York, New York
September 14, 1995