The opinion of the court was delivered by: THEODORE KATZ, Magistrate Judge
MEMORANDUM OPINION AND ORDER
Presently before the Court is an application to disqualify Plaintiffs'
counsel and for sanctions to be imposed on him. Defendants contend that,
on May 6, 2004, Plaintiffs' attorney, David J. Lansner, Esq., telephoned
Defendant HeartShare's in-house counsel, Mia Higgins, Esq., without
seeking the permission of HeartShare's counsel, Murphy & Higgins, LLP,
and "told her that because Murphy & Higgins was being paid by
HeartShare's insurance company, their (Murphy & Higgins') interests in
resolving a coverage dispute with the excess insurer may be adverse to
HeartShare's, and that in this instance the interests of HeartShare and
the plaintiffs may be aligned." (Letter from John B. Higgins, Esq., to
Judge Marrero, dated May 13, 2004 ("May 13 Letter"), at 1.)*fn1
Defendants argue that Mr. Lansner violated Disciplinary Rule 7-104(A)(1)
("DR 7-104") of the New York State Lawyers' Code of Professional Responsibility, which prohibits lawyers from communicating
with represented parties without the prior consent of the party's
counsel. Defendants have requested that the Court disqualify Mr. Lansner
and his law firm from representing Plaintiffs in the action, and that
sanctions be imposed on Mr. Lansner personally.
Mr. Lansner does not deny the communication with Ms. Higgins. Rather,
he responds that his communication with her was justifiable, because
Murphy & Higgins's failure to challenge the denial of coverage by
HeartShare's liability insurance carrier raised his concern "about Murphy
& Higgins' apparent loyalty to the insurance company, in contravention
to their duty to HeartShare." (Letter from David J. Lansner, Esq., to
Magistrate Judge Katz, dated May 17, 2004, at 2.) Further, Mr. Lansner
contends that Ms. Higgins is not a "party" to the litigation under DR
7-104, and that, in any event, the communication did not raise any of the
concerns which DR 7-104 seeks to address. (See Letter from David J.
Lansner, Esq., to Magistrate Judge Katz, dated May 20, 2004.)
Defendants' request for disqualification and sanctions was referred to
this Court, pursuant to 28 U.S.C. § 636(b)(1)(A). For the following
reasons, the request is denied.
DR 7-104(A)(1) provides that:
During the course of the representation of a client a
lawyer shall not: . . . Communicate or cause another
to communicate on the subject of the representation
with a party the lawyer knows to be represented by
a lawyer in that matter unless the lawyer has the
prior consent of the lawyer representing such
other party or is authorized by law to do so.
22 N.Y.C.R.R. § 1200.35.*fn2
Primarily, DR 7-104 serves to protect the
attorney-client relationship, and to prevent an attorney from taking
advantage of a party in the absence of the party's counsel, for
instance, by eliciting "unwarranted concessions or liability-creating
statements or disclosures . . . [or] protected information, most
particularly attorney-client communications." Miano v. AC & R Adver.,
Inc., 148 F.R.D. 68, 75 (S.D.N.Y. 1993); see also Gidatex v. Campaniello
Imports, Ltd., 82 F. Supp.2d 119, 122 (S.D.N.Y. 1999) (quoting Opinion of
N.Y. St. Bar Ass'n Comm. Prof. Eth. 607 (1990) at 1)("the purpose of DR
7-104(A)(1) is to preserve the proper functioning of the attorney-client
relationship'"). Where the represented party is an individual,
application of the ethical rule is straightforward. Cf. In re: Grievance
Proceeding, No. 3:01GP6 (SRU), 2002 WL 31106389, at **2-3 (D. Conn. July 19, 2002). Here, however, the "represented party" is a
corporate entity, and the parties dispute whether DR 7-104's prohibition
applies to communications with its in-house counsel.
The Court need not resolve this issue because, even if Mr. Lansner's
unauthorized communication with Ms. Higgins ran afoul of DR 7-104, it is
nevertheless insufficient to warrant the drastic remedy of
Generally, courts are reluctant to resolve disputes over ethical
violations that arise during the course of litigation. As the Second
Circuit has explained: "The business of the court is to dispose of
litigation and not to act as a general overseer of the ethics of those
who practice here unless the questioned behavior taints the trial of the
cause before it." See W.T. Grant Co. v. Haines, 531 F.2d 671
, 677 (2d
Cir. 1976). Motions to disqualify counsel are particularly disfavored for
the additional reasons that "disqualification has an immediate adverse
effect on the client by separating him from counsel of his choice, and
that disqualification motions are often interposed for tactical reasons."
Board of Educ. of the City of New York v. Nyguist, 590 F.2d 1241
(2d Cir. 1979); see also Armstrong v. McAlpin, 625 F.2d 433
, 444 (2d
Cir. 1980); Frontline Communications Int'l, Inc. v. Sprint Communications
Co., 232 F. Supp.2d 281, 287-88 (S.D.N.Y. 2002); Bennett Silvershein
Assocs. v. Furman, 776 F. Supp. 800
, 802 (S.D.N.Y. 1991). To date, only
two "rare exceptions" to this general rule have been recognized; disqualification may be warranted:
(1) where an attorney's conflict of interests.
undermines the court's confidence in the vigor of the
attorney's representation of his client . . . or more
commonly (2) where the attorney is at least
potentially in a position to use privileged
information concerning the other side through prior
representation, . . . thus giving his client an unfair
Nyguist, 590 F.2d at 1246 (internal citations omitted); see also
Rocchigiani v. World Boxing Counsel, 82 F. Supp.2d 182, 186 (S.D.N.Y.
2000). Neither ethical dilemma exists here.
Further, the moving party bears a "heavy burden of proving facts
required for disqualification." Evans v. Artek Sys. Corp., 715 F.2d 788,
794 (2d Cir. 1983); see also Eisinger v. Garrick-AUG Assocs. Store
Leasing, Inc., No. 92 Civ. 8500 (AGS), 1994 WL 86403, at *2 (S.D.N.Y.
Mar. 14, 1994); Bennett Silvershein Assocs., 776 F. Supp. at 802.
Defendants have not met their burden. Defendants have made no showing
that Mr. Lansner's communication with HeartShare's in-house counsel has u
taint [ed] the underlying trial." Nyquist, 590 F.2d at 1246. Indeed, the
issue of HeartShare's insurance coverage, which was the only issue
broached by Mr. Lansner during the unauthorized conversation, does not
relate to any substantive aspects of the litigation and will not
prejudice the defense of the action. The communication was not intended
to, nor did it, solicit any potential admissions or other evidence from
in-house counsel, which could be utilized by Plaintiffs to Defendants' detriment. Defendants do
not argue otherwise. Rather, Defendants contend that Mr. Lansner's
"statements to Ms. Higgins may have jeopardized the integrity of the
client relationship in that the client may now have concern about [Murphy
& Higgins's] loyalty." (Letter from John B. Higgins, Esq., to Magistrate
Judge Katz, dated May 21, 2004, at 2) (emphasis added). This unsupported
contention is insufficient to demonstrate that Mr. Lansner's
communication with Ms. Higgins has indeed impacted the attorney-client
relationship, let alone that Defendants have suffered any prejudice.
Furthermore, Mr. Lansner and his law firm have invested significant
time, energy, and resources in pretrial activity since commencing this
action over two-and-one-half-years ago. Plaintiffs would suffer severe
prejudice should Mr. Lansner or his law firm be disqualified as counsel.
See W.T. Grant Co., 531 F.2d at 677 ("we cannot lightly separate
[plaintiff] from the counsel of its choice. Counsel here has been engaged
for well over a year in the investigation and preparation of this
lawsuit. Disqualification of present counsel and the substitution of a
new attorney unfamiliar with the facts and the law will inevitably result
in further harmful delay and expense to [plaintiff].").
Although Defendants have failed to show that Mr. Lansner's
communication with Ms. Higgins warrants the drastic measure of
disqualification, Defendants are free to raise any purported ethical violation with this Court's Committee on Grievances, see
S.D.N.Y. Local Civil Rule 1.5, or the appropriate state disciplinary
body. See, e.g., W.T. Grant Co., 531 F.2d at 677 ("If the [law] firm is
guilty of professional misconduct, as to which we express no view, the
appropriate forum is the Grievance Committee of the bar association.");
Nyguist, 590 F.2d at 1246 ("Given the availability of both federal and
state comprehensive disciplinary machinery, . . . there is usually no
need to deal with. . . . ethical violations [other than those that taint
the litigation] in the very litigation in which they surface.");
Frontline Communications Int'l, 232 F. Supp.2d at 287 ("The question of
whether [the law firm] committed an ethical violation should be referred
to the Grievance Committee.").
Finally, the Court denies Defendants' request that it impose sanctions
on Mr. Lansner personally. Defendants fail to specify what sanctions they
seek, and cite to no legal authority in support of their application.
Moreover, because the Court has found no discernable impact of Mr.
Lansner's unauthorized communication on this action, it concludes that
the issue of sanctions would be more appropriately raised before a
disciplinary body. In denying sanctions, however, the Court does not
intend to suggest that it condones Mr. Lansner's ...