Not what you're
looking for? Try an advanced search.
Buy This Entire Record For
FELIX v. BALKIN
May 7, 1999
PASCALE FELIX, PLAINTIFF,
SHARON BALKIN, SAKS FIFTH AVENUE AND PARFUMS GIVENCHY, DEFENDANTS. IRIS NUNEZ, PLAINTIFF, V. SHARON BALKIN, SAKS FIFTH AVENUE, CLARINS U.S.A., INC. AND THIERRY MUGLER PARFUMS, DEFENDANTS. KETLY CALIXTE, PLAINTIFF, V. SHARON BALKIN, SAKS FIFTH AVENUE, THE DONNA KARAN COMPANY, DONNA KARAN NEW YORK AND THE DONNA KARAN BEAUTY COMPANY, DEFENDANTS. LOURDES MORALES, PLAINTIFF, V. SHARON BALKIN, SAKS FIFTH AVENUE, CLARINS U.S.A., INC. AND THIERRY MUGLER PARFUMS, DEFENDANTS. DENISE FELIX, PLAINTIFF, V. SHARON BALKIN, SAKS FIFTH AVENUE, THE DONNA KARAN COMPANY, DONNA KARAN NEW YORK AND THE DONNA KARAN BEAUTY COMPANY, DEFENDANTS. KRISTA LORN POWELL, PLAINTIFF, V. SHARON BALKIN, SAKS FIFTH AVENUE, CLARINS U.S.A., INC. AND THIERRY MUGLER PARFUMS, DEFENDANTS.
The opinion of the court was delivered by: Hellerstein, District Judge.
I resolve in this decision issues of disqualification of
counsel, raised by plaintiff Lourdes Morales' motion to
disqualify and by my own enlargement of the issues. I have
jurisdiction to do so because of the court's responsibility
concerning the obligations of professionalism in the matters
coming before it. See Ceramco, Inc. v. Lee Pharmaceuticals,
510 F.2d 268, 271 (2d Cir. 1975) ("Courts have not only the
supervisory power but also the duty and responsibility to
disqualify counsel for unethical conduct prejudicial to his
adversaries."); see also Hull v. Celanese Corp., 513 F.2d 568,
571 (2d Cir. 1975) ("The district court bears the responsibility
for the supervision of the members of its bar."); Red Ball
Interior Demolition Corp. v. Palmadessa, 908 F. Supp. 1226, 1245
(S.D.N.Y. 1995) ("A trial judge has the inherent authority to
regulate lawyers' professional conduct.").
Three of the six plaintiffs, Lourdes Morales, Iris Nunez and
Krista Lorn Powell, were employees or subordinate supervisors who
worked at the Thierry Mugler Parfums counter at Saks. The three
sue Balkin, Saks, Thierry Mugler, and Thierry Mugler's parent
company, Clarins U.S.A. Inc.*fn1, alleging violations of
federal, state and New York City laws; see, e.g., 42 U.S.C. § 2000e,
et seq.; N.Y.Exec.Law §§ 296.1, 296.6 and 296.7;
N YComp. Codes R. & Regs. § 8-107. Plaintiff Pascale Felix's
complaint against Balkin, Saks and Parfums Givenchy, and
plaintiffs Ketly Calixte's and Denise Felix's complaints against
Balkin, Saks, The Donna Karan Company, Donna Karan New York and
The Donna Karan Beauty Company, make similar allegations.
Thornton & Tanenhaus and the Law Office of Michael S.
Lamonsoff, Esq. ("Lamonsoff"), represent all six plaintiffs, and
Epstein Becker & Green, P.C. represents Balkin and Saks in each
of the six actions. Clarins is represented by Jones Hirsch
Connors & Bull P.C. ("Jones Hirsch") in the Nunez and Powell
actions, and by Wilson, Elser, Moskowitz, Edelman & Dicker, LLP
("Wilson Elser") in the Morales action. Other counsel represent
the perfume companies sued in the other three actions.
The defendants have denied liability and alleged affirmative
defenses. A joint motion to dismiss, a motion for summary
judgment, and a motion for judgment on the pleadings are pending
before me and are being resolved separately. Discovery has just
begun, pursuant to the terms of the Stipulation and Order
referred to above, only to be halted by the motion of plaintiff
Lourdes Morales to disqualify Jones Hirsch from representing
Clarins in the companion Nunez and Powell actions.
I. MORALES' DISQUALIFICATION MOTION
Plaintiff Morales contends that the Jones Hirsch law firm
should be disqualified because its partner, Richard L. Steer, had
represented her as well as Clarins in defense of a related sexual
harassment and discrimination complaint brought by another
employee who worked at the Thierry Mugler perfume counter,
Michael A. Blake. Morales contends that Steer and Jones Hirsch
gained "secrets and confidences" from her during the dual
representation, and can use them against her interests. For the
reasons discussed below, I find that Morales' argument lacks
merit. However, there are additional grounds for disqualification
that I must consider, of both Steer and, of counsel for Morales,
Thornton & Tanenhaus and Lamonsoff. I hold, in the interests of
justice and incident to the district court's supervisory
responsibility with regard to maintaining proper professional
standards in the matters before it, and for the reasons discussed
below, that Steer and Jones Hirsch, and Thornton & Tanenhaus and
Michael S. Lamonsoff, should be disqualified from representing,
respectively, defendant Clarins, and plaintiffs Nunez, Powell and
Morales, and I so order.
A. The Employment Structure at Saks:
The employees of the various perfume vendors lacked authority
to operate Saks' cash register and ring up sales of perfume.
(Id. at ¶ 18). They were required to bring their sales to a
Saks employee assigned as liaison to the perfume vendors.
(Id.). Defendant Balkin was the Saks liaison to the Thierry
Mugler, Givenchy and Donna Karan perfume counters. (Id. at ¶
In November 1996, Michael A. Blake, a sales assistant employed
by Thierry Mugler at Saks, filed a charge of discrimination with
the New York City Commission on Human Rights (the "Blake
Proceeding"). (Affidavit of Richard L. Steer, dated January 18,
1999, at ¶ 4 ("Steer Aff., at ___")). Blake alleged that Balkin
sexually harassed him, between July 17, 1996 and August 17, 1996,
by unwanted and unwelcome touchings and suggestive comments, and
that he was paid less than similarly situated Hispanic employees.
(Blake v. Thierry Mugler, et al., NYCCHR Complaint No.:
N-E-S-97-1003233E ("Blake Complaint") at ¶¶ 6, 7). Blake alleged
that he reported the acts of harassment to Lourdes Morales, his
Thierry Mugler supervisor, and to Saks; that no one remedied his
complaint; and that, on or about August 23, 1996, Morales
terminated Blake's employment. (Id. at ¶¶ 8, 9). Blake alleged
that Thierry Mugler, Saks and Morales "discriminated against him
by subjecting him to disparate treatment and sexually harassing
him and terminating his employment . . . in violation of Section
S-107.1(a) of the Administrative Code of the City of New York . .
. [and in] violat[ion of] Title VII of the Civil Rights Act of
1964. . . ." (Id. at ¶¶ 10-11).
Clarins' insurer retained Richard L. Steer, a partner of Jones
Hirsch and a specialist in the field, to represent it and Morales
jointly, in November 1996. Steer, based on a "thumbnail" sketch
of the issues by Clarins' Manager of Human Resources, Lily
Babler, expressed the view that he could represent both Clarins
and Morales jointly, without conflict. (Transcript of Argument,
April 14, 1999 (hereafter, "Tr.Arg.")), pp. 27-28; (Letter from
Richard L. Steer responding to Court Ordered Interrogatories,
dated March 23, 1999, at ¶ 1(a-c) ("Jones Hirsch Response")).
Steer, during an ensuing meeting with Babler and Morales in
January 1997, told Morales that she "could get her own counsel if
she wanted," but that he could represent her, except if there was
a conflict, and "I didn't see any conflict." (Tr. Arg.p.28).
Morales responded that "she didn't think there was a conflict
either" (Tr. Arg. p. 28), and that "she had no objection to
[Steer] representing her." (Jones Hirsch Response, at ¶ 1 (a-c)).
Steer, however, did not speak to Morales individually. Nor did he
question her to ascertain if, in fact, a conflict existed or
might potentially arise, or explain the consequences of dual
representation and potential conflicts, or come to his own
reasoned opinion with regard to the issues of conflict and
separate representation. (Tr. Arg. pp. 29-30). Steer also failed
to enter into an engagement letter with either of his clients, or
even prepare a memorandum for his files, covering the possibility
of conflict and defining what might happen if a conflict between
his two clients were to arise. After these meetings, Steer filed
a joint verified answer denying Blake's allegations, verified by
both Morales and Clarins on January 9, 1997, and, after meeting
with Morales on May 8, 1997 to review discovery and production
issues; filed a joint response to a document request on May 9,
1997. (Steer Aff., at ¶ 6).
During this very same period, as early as February 1997,
Morales began counseling with Thornton & Tanenhaus and Lamonsoff
to develop her own claim of a sexually hostile work environment
Thierry Mugler perfume counter at Saks. (Tr. Arg. p. 36; Response
of Thornton & Tanenhaus to Court Ordered Interrogatories, dated
March 22, 1999 ("T & T Response"), at ¶¶ 1, 3). She did not tell
Steer, her lawyer, or Clarins, her employer, about her
consultation. Nor did she tell them that she was about to
contradict the verified answer which she, herself, had sworn as
the truth on January 9, 1997, that Blake's allegation of a
sexually hostile work environment at the Thierry Mugler perfume
counter at Saks was not true. (Steer Aff., Ex. A, at ¶¶ 9, 10
(Joint Verified Answer of Clarins and Morales)). Counseled by
Thornton & Tanenhaus and co-counsel Lamonsoff, she was about to
allege the very opposite.
Thornton & Tanenhaus and Lamonsoff argue that they did not
learn about the Blake Complaint until April, May or June 1997.
(Tr. Arg. p. 37; T & T Response, ¶ 3; Letter from Edward
Tanenhaus supplementing T & T Response, dated March 29, 1999
("Tanenhaus Supplemental Letter")). They were unable to say
exactly when because, they assert, they had "nothing in the
file." (Tr. Arg. p. 37). They acknowledge that they learned that
Balkin was "harassing Blake and other people," but they claim not
to have known until June 1997 that Morales had been sued by
Blake, and was already represented by counsel. (Tr. Arg. pp.
If Thornton & Tanenhaus and Lamonsoff did not know these
essential facts about their client, and I find it hard to believe
that they were as completely ignorant as they claim, they
certainly should have found out, and they concede that "in
hindsight, we should have [investigated]." (Tr. Arg. p. 38).
Thornton & Tanenhaus and Lamonsoff made no effort to learn if
Morales had counsel, or was implicated in some fashion in the
Blake Proceeding. Had they inquired, they would undoubtedly
have learned that Morales was already a respondent; that she was
represented by counsel who also represented Clarins; that she had
sworn to denials of sexual harassment which she was about to
contradict; and ...