United States Court of Appeals for the Sixth Circuit · 2013 · Civil Procedure
Civil ProcedureDisqualification of counselConflicts of interestSummary judgmentDana testsubstantially relatedformer clientconfidential information
Facts
Bowers was a partner of The Ophthalmology Group and later sued the partnership for gender discrimination and retaliation after being expelled. The defendant was represented by McMurry & Livingston, a firm that had previously represented Bowers in connection with her attempt to establish an additional ophthalmology practice in Louisville. There was no dispute that an attorney-client relationship had existed in that prior matter and that the firm had acquired confidential information from Bowers. The dispute on appeal centered on whether that prior representation was substantially related to the present litigation.
Issue
Whether the defendant's law firm had to be disqualified because it had previously represented Bowers in a substantially related matter in which it would normally have obtained confidential information that could materially advance the defendant's position. Also, whether the district court could grant summary judgment before deciding the motion to disqualify.
Rule
Disqualification is appropriate when (1) a past attorney-client relationship existed between the party seeking disqualification and the attorney to be disqualified, (2) the prior and current matters are substantially related, and (3) the attorney acquired confidential information from the former client. Matters are substantially related if they involve the same transaction or legal dispute, or if there is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the new client's position in the later matter. A district court must decide a motion to disqualify counsel before ruling on a dispositive motion because conflicted counsel's use of confidential information may infect the proceedings.
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In Nashville, attorney Lena Ortiz of Cumberland Square Law previously represented Dr. Mira Shah in negotiating the terms under which Shah would open a satellite clinic apart from her existing physician group. Two years later, another lawyer in the same firm appears for the physician group in Shah’s federal suit alleging the group denied her real managerial authority and treated her as a mere nominal owner. The firm admits the earlier representation and that it received confidential information from Shah.
Should the court most likely disqualify the firm?
Explanation. Disqualification is appropriate when there was a prior attorney-client relationship, the matters are substantially related, and counsel acquired confidential information. Matters are substantially related not only when they involve the same transaction or legal dispute, but also when there is a substantial risk that confidential factual information normally obtained in the prior representation would materially advance the new client’s position. In a representation about opening a separate clinic, counsel would normally learn confidential information about the client’s motivations, authority, and relationship with co-owners, which could materially aid the group in disputing her later claims about status and treatment. (Derived from Bowers v. Ophthalmology Group (n.d.).)