United States District Court, N.D. New York
MEMORANDUM-DECISION and ORDER
RANDOLPH F. TREECE, Magistrate Judge.
In this breach of contract lawsuit, the current issue before the Court is whether recent developments have created a non-waivable conflict of interest for the City of Schenectady's recently retained lawyers. More specifically, the Court must determine whether the confluence of its former law clerk's presence during a settlement conference presided over by this Court and his freshly minted employment by Schenectady's new attorneys consequently lead to the disqualification of the law firm in this matter.
A. Relevant Case History
Responding to the parties' respective Requests, see Dkt. Nos. 29 & 30, on January 10, 2014, the Court issued an Order setting up a settlement conference for February 7, 2014. Dkt. No. 33. At the moment this Order was issued, Schenectady was represented by its Corporation Counsel, John Polster, Esq., American Tax Funding, LLX (hereinafter American Tax) was represented by the Camardo Law Firm, and Daniel S. Rubin, Esq., served as this Court's term law clerk. Just prior to the Conference, Schenectady filed on the Case docket a Letter-Brief serving as a settlement proposal, while American Tax did not. Dkt. No. 34, Def.'s Lt.-Br., dated February 3, 2014. A Settlement Conference was held on February 7, 2014.
During the Settlement Conference, all parties were present and accompanied by their respective attorneys. Also present during the Settlement Conference were the Court's two law clerks including Daniel Rubin, the courtroom deputy clerk, and possibly a student intern. As a long-held practice, interns and law clerks are permitted to shadow the Court during settlement conferences, and such occurred on February 7, 2014. With the exception of a very brief separation between the parties, the Conference was exclusively an extended, face-to-face negotiation between the parties. With the understanding that nothing said between the parties would constitute an admission against interest, the parties openly and candidly discussed the issues while endeavoring to arrive at an agreement. After nearly two hours of discussion, the Court adjourned the Settlement Conference and issued an Order staying the case. Dkt. No. 35, Text Order, dated Feb. 7, 2014. That stay remained active for approximately three months while the parties filed monthly status reports. The stay was lifted on May 13, 2014, and the Scheduling Order was amended. Dkt. No. 45, Text Order. However, another stay of the litigation was invoked while the Honorable Mae A. D'Agostino, United States District Judge, determined whether the Court had subject matter jurisdiction. Dkt. No. 50, Text Order, dated July 15, 2014. After ruling that the Court has subject matter jurisdiction, the second stay was lifted on September 29, 2014. Dkt. No. 59, Text Order.
In the interim, Schenectady's Corporation Counsel and attorney of record, John Polster, retired on or about August 30, 2014. In his stead, Schenectady retained the law firm of Girvin and Ferlazzo, PC to represent it in this matter, and a Stipulation seeking Substitution of Attorney was filed on September 24, 2014. Dkt. Nos. 57. Def.'s Stip., dated Sept. 24, 2014, & Consent Order, dated Sept. 24, 2014. Coincidentally, on or about September 8, 2014, Daniel S. Rubin became an associate of the Girvin Ferlazzo law firm. Shortly after filing a notice of appearance, Christopher P. Langois, Esq., of counsel to Girvin Ferlazzo, reported, "in the interest of full disclosure, " Rubin's employment status with the firm, and further stated that "in accordance with Canon 3(D) of the Code of Conduct for Judicial Employees" and "Advisory Opinion 109 of the Judicial Conference Committee on Codes of Conduct, " Attorney Rubin "understands that he may not disclose any confidential information received in the course of his official duties as a former law clerk" nor will he "in any way participate or assist, directly or indirectly, in this case." Dkt. No. 60, Def.'s Lt.-Br., dated Sept. 30, 2014.
This revelation, among other issues, provoked the Court to convene another telephone conference. During the Conference, which was held on October 10, 2014, the potential conflict of interest relative to Schenectady's new counsel was discussed. Rather than having the parties engage in an extended motion practice on the issue, the Court issued an Order directing the parties to simultaneously file Letter-Briefs and further advising that the Scheduling Order will not be amended until the conflict of interest matter is resolved. Dkt. Nos. 61, Text Order, dated Oct. 14, 2014, & 62, Clarification Text Order, dated, Oct. 14, 2014. As directed, the parties timely filed their respective Letter-Briefs. Dkt. Nos. 63, Def.'s Lt.-Br., dated Oct. 31, 2014, & 64, Pl.'s Lt.-Br., dated Oct. 31, 2014.
B. The Parties' Letter-Briefs
Other than what has been revealed via the Case docket, the parties' respective Letter Briefs disclose very few other salient facts, except to note that Girvin and Ferlazzo is a law firm of twenty approximately (20) lawyers and that American Tax's CEO recognized Rubin from a photograph as one of the persons who attended the Settlement Conference Def.'s Lt.-Br. at p. 2; Pl.'s Lt.-Br. at p. 2, ¶¶ 3 & 4. Regarding the potential conflict, Attorney Langlois provides that his September 30th Letter was shared with Attorney Rubin who "confirmed his knowledge and acceptance of the restriction" and that he would not participate nor assist in the representation of Schenectady in this case. Def.'s Lt.-Br. at p. 2. More importantly, Attorney Langlois states stating that he
advised each of he firm's other attorneys and staff members in writing that Mr. Rubin is precluded from participating in, working on, or discussing this case, and that he should not be engaged on the matter by an attorney or staff member.... With the exception of research performed by an associate (not Mr. Rubin) in connection with this letter brief, no [Girvin and Ferlazzo] attorney other than myself has had any involvement in this matter or the related proceeding currently pending in the New York Supreme Court, Schenectady County. All of the files pertaining to this matter are separately located and maintained in my office, and no other [Girvin and Ferlazzo] attorney or staff member has reviewed or been given access to those files.... [N]o [Girvin & Ferlazzo] attorney or staff member has had any communication whatsoever with Mr. Rubin regarding this matter.
Def.'s Lt.-Br. at p. 2.
Both parties concur that Canon 3D of the Code of Conduct for Judicial Employees mandates that current and former judicial employees should never disclose any confidential information received in the course of official duties and that Advisory Opinion 109 continues to state that former law clerks should isolate themselves from pending matters and refrain from working on all cases in which he participated during the clerkship. The parties differ as to whether, in this case, Girvin and Ferlazzo should be disqualified as well. Although there is no formal motion, American Tax submits that Girvin and Ferlazzo should be disqualified as Schenectady's Counsel. Pl.'s Lt.-Br. at p. 7. Obviously deliberating upon a possible disqualification is a "factintensive endeavor." Zalewski v. Sherloc Homes, LLC, 856 F.Supp. 426 (N.D.N.Y. 2012) (citing Miness v. Ahuja, 762 F.Supp.2d 465, 478 (E.D.N.Y. 2010)).
A court's authority to disqualify an attorney is derived from its inherent authority to preserve the integrity of the adversarial process, thus bestowing it with broad discretion. Hemsptead Video, Inc. v. Inc. Vill of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005); Purgess v. Sharrock, 33 F.3d 133, 134 (2d Cir. 1994). Because disqualification may dangerously imperil a client's right to the counsel of his choosing, it should only be imposed when there is a significant risk of taint upon the trial. Glueck v. Jonathan Logan, Inc., 653 F.2d 746, 748 (2d Cir. 1981). Since motion to disqualify are viewed with disfavor, the party seeking disqualification must meet a high standard of proof before ...