The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge
Currently pending before the Court is a motion to disqualify the law firm of Lewis Johs Avallone Aviles, LLP and one of its attorneys, James F. Murphy (collectively the "Lewis Johs Attorneys"), from representing Plaintiffs in this putative antitrust class action on the grounds of an alleged conflict of interest. The motion, filed by Defendants BFI Canada Income Fund, IESI Corporation, IESI NY Corporation,*fn1 Winters Bros. Recycling Corp. and Winters Bros. Waste Systems, Inc.'s (collectively "Defendants"), argues that by reason of their representation of a non-party witness Jet Sanitation Service Corp. ("Jet"), a competitor of Defendants, the Lewis Johs Attorneys have an impermissible conflict of interest mandating disqualification.
In reaching a decision on the instant motion, I have considered the applicable case law, the relevant rules of professional conduct, the parties' written submissions, including the declarations and memoranda of law and the contentions proffered by counsel at oral argument. After thorough review, for the reasons set forth below, Defendants' motion for disqualification is DENIED, without prejudice. The parties are, however, directed to complete all discovery with respect to non-party Jet on an expedited basis. At the conclusion of such discovery, I will entertain a renewed motion, in the event Defendants believe they have a good faith basis for such renewal.
In May 2008, All Star Cars and Vehicles, H.B. Millwork, Inc. and Kussmaul Electronics Company, Inc. (the "Named Plaintiffs") brought this action on behalf of a proposed class of "[a]ll persons and entities . . . who contracted with and purchased directly from the Defendants at any time during the period of May 5, 2004 through the present for small containerized waste disposal services . . ." (Compl. ¶ 53). Plaintiffs alleged that Defendants violated the antitrust laws with respect to the small containerized front-load waste disposal market in Long Island through their use of contracts containing anti-competitive provisions. Plaintiffs asserted claims for conspiracy to restrain trade in violation of the Sherman Act, 15 U.S.C § 1, and willful attempt to monopolize in violation of the Sherman Act, 15 U.S.C. § 2. Defendants moved to dismiss all claims against them and on February 4, 2009, Judge Wexler dismissed Plaintiffs' claim pursuant to Section 1 of the Sherman Act. As to Section 2 of the Sherman Act, Judge Wexler dismissed any claim of conspiracy and allowed Plaintiffs to move forward on the sole remaining claim of monopolization pursuant to Section 2 of the Sherman Act.
In the instant motion, Defendants assert that the Lewis Johs Attorneys, in addition to representing Plaintiffs, are regular counsel for Jet, one of Defendants' largest competitors on Long Island, and also represent Jet in a state court action commenced by one of the Defendants. Defendants' Memorandum of Law ("Defs.' Mem."), at 1. According to Defendants, this dual representation is a conflict of interest in violation of Canon 5 of the New York State Code of Professional Responsibility because the Lewis Johs Attorneys will be unable to provide undivided loyalty to each client. Defendants contend that there is a conflict because: (1) on behalf of the class, the Lewis Johs Attorneys will not aggressively pursue discovery from Jet relating to the size of the small containerized front-load waste disposal market; or (2) on Jet's behalf, the Lewis Johs Attorneys will fail to follow the evidence where it leads because of the possible implication of Jet as a participant in the monopolization of the small containerized front-load waste disposal market. Defendants further argue that the conflict cannot be waived since the Lewis Johs Attorneys seek to represent absent class members as well as the Named Plaintiffs.
The Lewis Johs Attorneys, in opposing the motion, argue that there is no basis under federal law that would necessitate disqualification. Lewis Johs Memorandum of Law ("Lewis Johs' Mem.") at 4. They maintain that, since there is no conflict between Defendants and Lewis Johs, case law does not support Defendants' contention that they should be disqualified, id. at 5-6, and because there is no adversity between the Plaintiffs and Jet, there is no risk of taint at the trial. Id. To further support their position that disqualification is unnecessary, the Lewis Johs Attorneys have provided declarations from representatives of each of the Named Plaintiffs consenting to Lewis Johs' continued representation of the Class and waiving any conflict. See DE 74, 75 and 77. Non-party Jet also filed a declaration consenting to Lewis Johs' concurrent representation of Plaintiffs and Jet and waiving any conflict. See DE 76.
A motion to disqualify is left to the sound discretion of the district court. See Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72 (2d Cir. 1990); Applied Tech. Ltd. v. Watermaster of America, Inc., No. 07 CV 6620, 2009 WL 804127, at *4 (S.D.N.Y. Mar. 26. 2009); Team Obsolete Ltd. v. A.H.R.M.A., Ltd., No. 01-1574, 2006 WL 2013471, at *4 (E.D.N.Y. July 18, 2006); Human Elecs. v. Emerson Radio Corp., 375 F. Supp. 2d 102, 105 (S.D.N.Y. 2004). Notwithstanding a trial court's discretion, disqualification of counsel is a "drastic measure," requiring a careful balancing of competing interests. See Reilly v. Computer Assoc. Long-Term Disability Plan, 423 F. Supp. 2d 5, 8 (E.D.N.Y. 2006).
Historically, the Second Circuit has shown considerable reluctance to disqualify attorneys "despite misgivings about the attorney's conduct." Bd. of Educ. v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979) (citing W.T. Grant Co. v. Haines, 531 F.2d 671 (2d Cir. 1976)); Ceramco, Inc. v. Lee Pharm., 510 F.2d 268 (2d Cir. 1975)). Disqualification has an "immediate adverse effect on the client by separating [it] from counsel of [its] choice. . . ." In re Methyl Tertiary Butyl Ether Products Liab. Litig., 438 F. Supp. 2d 305, 307 (S.D.N.Y. 2006) (quoting Nyquist, 590 F.2d at 1246). Courts must also be mindful that disqualification motions can often be "interposed for tactical reasons." Nyquist, 590 F.2d at 1246.
The paradigm for evaluating motions to disqualify in this Circuit is Board of Education v. Nyquist, 590 F.2d 1241 (2d Cir. 1979). In Nyquist, Judge Feinberg laid out the standard to be applied in considering such motions:
Our reading of the cases in this circuit suggests that we have utilized the power of trial judges to disqualify counsel where necessary to preserve the integrity of the adversary process in actions before them. In other words, with rare exceptions disqualification has been ordered only in essentially two kinds of cases: (1) where an attorney's conflict of interest in violation of Canons 5 and 9 of the Code of Professional Responsibility 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, for example, in violation of Canons 4 and 9, thus giving his present client an unfair advantage.
Nyquist, 590 F.2d at 1246 (internal citations omitted). Therefore, "unless an attorney's conduct tends to 'taint the underlying trial' by disturbing the balance of the presentations" in one of these two ways, "courts should be quite hesitant to disqualify an attorney." Id. (quoting W. T. Grant Co. v. Haines, 531 F.2d 671, 678 (2d Cir. 1976)). The circumstances here fall within the first category set forth in Nyquist - - Defendants contend that the Lewis Johs Attorneys have a conflict of interest arising from their dual ...