BARBARA JEAN BOWERS, M.D., Plaintiff-Appellant, v. THE OPHTHALMOLOGY GROUP, Defendant-Appellee.
No. 12-6129
United States Court of Appeals for the Sixth Circuit
October 25, 2013
13a0309p.06
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b). Appeal from the United States District Court for the Western District of Kentucky at Paducah. No. 5:12-cv-00034—Joseph H. McKinley, Jr., Chief District Judge. Argued: June 21, 2013.
Before: MOORE and GRIFFIN, Circuit Judges; SARGUS, District Judge.*
COUNSEL
MOORE, J., delivered the opinion of the court, in which SARGUS, D. J., joined. GRIFFIN, J. (pp. 12–16), delivered a separate dissenting opinion.
KAREN NELSON MOORE, Circuit Judge. When a prior attorney-client relationship exists between a party and an opposing party‘s counsel, the opposing party‘s counsel must be disqualified if confidential information was shared in the prior matter and that matter is substantially related to the current one. In this appeal, we consider the meaning of “substantially related.”
Plaintiff-Appellant, Barbara Jean Bowers, M.D., is an ophthalmologist in Paducah, Kentucky. From 2002 to 2010, Bowers was a partner of The Ophthalmology Group LLP, defendant-appellee. After being expelled from the partnership in 2010, Bowers filed the instant suit, seeking relief for gender discrimination and retaliation under both
The district court granted summary judgment in favor of defendant because Bowers, as a former partner of The Ophthalmology Group, was not an “employee” under Title VII. As a result, the district court dismissed without prejudice Bowers‘s state-law claims, declining to exercise supplemental jurisdiction. Lastly, the district court denied Bowers‘s motion to disqualify M&L “as moot.” Bowers appeals those decisions of the district court and asks this court to disqualify M&L on appeal, a request that was previously denied in a single-judge order from this court. Finding that M&L‘s prior representation of Bowers is substantially related to the present case, we GRANT Bowers‘s motion to disqualify M&L on appeal, VACATE the district court‘s grant of summary judgment, and REMAND the case for further proceedings with instructions to disqualify M&L on remand.
I. BACKGROUND
Bowers joined The Ophthalmology Group as an employee in 1999. In 2002, she became one of six partners of The Ophthalmology Group after buying into the partnership and signing a partnership agreement. On November 9, 2009, Bowers tendered a resignation letter to her partners. Although Bowers did not give a date of departure, the partnership agreement required a one-year notice. On March 4, 2010, the partners voted to expel Bowers from the partnership. The following day, Bowers was given notice of her expulsion and the reason behind it: her “Chapter 7 bankruptcy and the creditors’ proceedings associated with such bankruptcy and other personal conduct . . . which the Partnership, in its opinion, finds detrimental to the Partners and the Partnership.” R. 7-8 (Expulsion Letter at 1) (Page ID #114).
After exhausting her administrative remedies, Bowers filed the instant suit on March 5, 2012. In her amended complaint, Bowers alleged: (Count 1) gender discrimination under Title VII; (Count 2) wrongful termination in breach of contract and/or in violation of public policy under Kentucky common law; (Count 3) gender discrimination under
On May 16, 2012, Bowers filed a motion to disqualify defendant‘s counsel. R. 24 (Pl. Mot. to Disqual.) (Page ID #1349–55). Bowers pointed to two instances where a past attorney-client relationship existed between her and defendant‘s counsel, an attorney at M&L.1 First, another attorney at M&L represented Bowers when she attempted to establish an additional ophthalmology practice in Louisville, Kentucky in 2008. Second, M&L counseled and advised The Ophthalmology Group regarding the potential expulsion of a male partner in 2005. The Ophthalmology Group responded to Bowers‘s motion to disqualify, attaching confidential documentation to support its argument that there was no conflict from the prior attorney-client relationship between M&L and Bowers. R. 29 (Def. Resp. to Pl. Mot. to Disqual.) (Page ID #1752–1864).
In an order filed August 22, 2012, the district court converted defendant‘s motion to dismiss into a
II. DISQUALIFICATION OF DEFENDANT‘S COUNSEL ON APPEAL
Bowers argues that defendant‘s counsel must be disqualified on appeal because of a
As adopted in Dana Corp. v. Blue Cross & Blue Shield Mutual of Northern Ohio, disqualification of counsel is appropriate if “(1) a past attorney-client relationship existed between the party seeking disqualification and the attorney it seeks to disqualify; (2) the subject matter of those relationships was/is substantially related; and (3) the attorney acquired confidential information from the party seeking disqualification.” 900 F.2d 882, 889 (6th Cir. 1990). Our decisions have not made clear how the Dana analysis operates in conjunction with this court‘s rule that attorneys are “subject to the rules of professional conduct or other equivalent rules of the state where the attorney‘s principal office is located.” 6TH CIR. R. 46(b); compare Dana, 900 F.2d 882 (involving federal and state-law claims), with Nat‘l Union Fire Ins. Co. of Pittsburgh, Pa. v. Alticor, Inc., 472 F.3d 436 (6th Cir. 2007) (applying the Michigan Rules of Professional Conduct to disqualify an attorney on appeal). Regardless, the effect of using the Kentucky Rules of Professional Conduct in place of or in conjunction with our Dana analysis is minimal at best because the relevant Kentucky Rule is essentially the same: “A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in . . . a substantially related matter in which that person‘s interests are materially adverse to the interests of the former client.”
Applying this framework to M&L‘s representation of Bowers in her efforts to establish an additional practice in Louisville, there is no dispute that a past attorney-client relationship between Bowers and M&L existed during that representation and that M&L acquired confidential information. Therefore, our resolution turns on whether M&L‘s representation of Bowers in her attempt to establish a practice in Louisville is “substantially related” to the present case. We have not explored previously the contours of what constitutes “substantially related,” so we take this opportunity now to do so.
Complicating matters slightly is that the comments to Rule 1.9 make clear that the “former client is not required to reveal the confidential information learned by the lawyer in order to establish a substantial risk that the lawyer has confidential information to use in the subsequent matter.”2
The comments to Rule 1.9 state that “[m]atters are ‘substantially related’ . . . if they involve the same transaction or legal dispute or if there is otherwise a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client‘s position in the subsequent matter.”
In determining whether a substantial relationship exists, the court evaluates the similarities between the factual bases of the two representations. A commonality of legal claims or issues is not required. At a functional level, the inquiry is whether the attorneys were trying to acquire information vitally related to the subject matter of the pending litigation. To accomplish this inquiry, the court must be able to reconstruct the attorney‘s representation of the former client, to infer what confidential information could have been imparted in that representation, and to decide whether that information has any relevance to the attorney‘s representation of the current client. What confidential information could have been imparted involves considering what information and facts ought to have been or would typically be disclosed in such a relationship. Consequently, the representations are substantially related if they involve the same client and the matters or transactions in question are relevantly interconnected or reveal the client‘s pattern of conduct.
Koch v. Koch Indus., 798 F. Supp. 1525, 1536 (D. Kan. 1992) (quotation marks and citations omitted); see Charles W. Wolfram, Former Client Conflicts, 10 Geo. J. Legal Ethics 677, 716 (1997) (describing the Koch standard as “the most apt delineation of how ‘substantial relationship’ should be determined“). The analyses under the Kentucky Rules, the Model Rules, and Koch are essentially the same: the court must look to the general type of information that the potentially conflicted lawyer would have been exposed to in a normal or typical representation of the type that occurred with the now-adverse client. See GEOFFREY C. HAZARD & W. WILLIAM HODES, THE LAW OF LAWYERING § 13.5 (3d ed. 2013). Admittedly, this approach has its difficulties, most notably that reconstructing a representation using generalities is less exact than examining what actually happened. Nonetheless, this method presents a necessary alternative to engaging with the specific—perhaps confidential—facts surrounding a potentially conflicted attorney‘s prior representation of a now-adverse client.3 See RESTATEMENT
Applying this approach, we conclude that M&L‘s representation of Bowers in her attempt to establish an additional practice in Louisville is substantially related to the present case. In a normal or typical representation of this type, M&L likely would have obtained confidential information regarding Bowers‘s relationship with her partners at The Ophthalmology Group. When a partner seeks to establish an additional practice separate from her partnership, it seems very likely that the partner would discuss her confidential motivations for doing so with her attorney. For example, in the present case Bowers could have disclosed to M&L that she was not establishing an additional practice because she felt powerless at The Ophthalmology Group but simply because she wanted to make more money. This would be detrimental to Bowers‘s Title VII claim because she alleged that The Ophthalmology Group discriminated against her by not giving her powers that were otherwise accorded to full partners. It seems equally likely that an attorney in this type of representation would want to understand whether there could be backlash from the partnership towards her client for establishing an additional, separate practice. Imagine a scenario that could have happened in the present case in which Bowers communicates to M&L:
Given these scenarios, there is a substantial risk that confidential information as would normally or typically have been obtained in M&L‘s prior representation of Bowers would materially advance The Ophthalmology Group‘s position in the present case. Therefore, the matters are substantially related under Dana. For this reason, we grant Bowers‘s motion to disqualify M&L from representing The Ophthalmology Group on appeal. Given this ruling, we need not address whether M&L‘s counseling of The Ophthalmology Group (which included Bowers at the time) when it considered expelling one of its male partners requires disqualification under Dana. Likewise, we have no occasion to address any other issues presented on this appeal. We remand the case to the district court for further proceedings with instructions to disqualify M&L on remand.
III. DISQUALIFICATION OF DEFENDANT‘S COUNSEL AT THE DISTRICT COURT
As this case illustrates, when counsel is disqualified, a court should not reach the other questions or motions presented to it through the disqualified counsel. Here, however, the district court first granted summary judgment in favor of The Ophthalmology Group and then dismissed Bowers‘s motion to disqualify “as moot.” On appeal, The Ophthalmology Group asserts that “[t]here is nothing extraordinary about a district court denying ‘as moot’ a motion to disqualify counsel when it has decided to dismiss the underlying case.” Appellee Br. at 58. We disagree and observe that the cases cited by The Ophthalmology Group in support of its position do little to convince us otherwise because none offer any analysis on the issue. See Bardsley v. Powell, Trachtman, Logan, Carrle & Bowman, P.C., 916 F. Supp. 458, 465 (E.D. Pa.) (denying plaintiff‘s motion to disqualify counsel as moot after granting summary judgment in favor of defendants), aff‘d, 106 F.3d 384 (3d Cir. 1996) (table); Shanley v. Hanna, No. 97-CV-1849(NPM), 1998 WL 146250, at *4 (N.D.N.Y. March 24, 1998) (unpublished decision) (“Inasmuch as the court grants defendants [sic] motion [to dismiss], it need not address the defendants [sic] remaining contentions nor defendants [sic] motion to disqualify [plaintiff‘s] attorney.“); In re Hildreth, 165 B.R. 429 (Bankr. N.D. Ohio 1994) (dismissing debtors’ Chapter 12 bankruptcy case and holding moot creditor‘s motion to disqualify debtor‘s counsel).
A district court must rule on a motion for disqualification of counsel prior to ruling on a dispositive motion because the success of a disqualification motion has the potential to change the proceedings entirely. This is especially important when a district court rules on a
IV. CONCLUSION
For the reasons set forth in this opinion, we GRANT Bowers‘s motion to disqualify M&L, The Ophthalmology Group‘s counsel on appeal, VACATE the district court‘s grant of summary judgment, and REMAND the case for further proceedings with instructions to disqualify M&L on remand.
BARBARA JEAN BOWERS, M.D., Plaintiff-Appellant, v. THE OPHTHALMOLOGY GROUP, Defendant-Appellee.
No. 12-6129
United States Court of Appeals for the Sixth Circuit
DISSENT
GRIFFIN, Circuit Judge, dissenting. I respectfully dissent. While I agree with the majority that the district court erred in failing to rule on the merits of plaintiff Bowers‘s motion for disqualification of counsel prior to ruling on defendant The Ophthalmology Group‘s dispositive motion, any error in this regard was harmless in light of Bowers‘s failure to establish a conflict of interest—specifically, that McMurry & Livingston PLLC‘s (“M&L‘s“) prior and current representations are “substantially related” as required by the applicable rules of professional conduct. Because the district court did not otherwise err in determining that defendant was entitled to summary judgment as a matter of law with regard to Bowers‘s Title VII claims, I would affirm.
“Motions to disqualify are viewed with disfavor and disqualification is considered a drastic measure which courts should hesitate to impose except when absolutely necessary.” Valley-Vulcan Mold Co. v. Ampco-Pittsburgh Corp., 237 B.R. 322, 337 (B.A.P. 6th Cir. 1999), aff‘d 5 F. App‘x 396 (6th Cir. 2001) (citation and internal quotation marks omitted). A party seeking disqualification carries a heavy burden and must meet a high standard of proof. Id. (citation omitted). Under the analogous requirements of
As the basis for her motion for disqualification, Bowers points to two prior instances in which M&L represented her: (1) defendant‘s potential expulsion of a male partner in 2005, and (2) her attempt to establish a practice in Louisville, Kentucky in 2008. The existence of an actual past attorney-client relationship stemming from these consultations is not in dispute in this case. However, contrary to Bowers‘s assertions, disqualification is not required because these matters bear no “substantial relationship” to the present Title VII action.
In 2005, defendant‘s partners became concerned about rumors of inappropriate relations between one of their physicians and non-parties to this case. Defendant‘s partners engaged in joint discussions, where all partners (including Bowers) were present, with M&L‘s attorneys regarding the prospect of expelling the physician. In the course of these consultations, M&L prepared a draft indemnification agreement that inured to the benefit of defendant; however, the agreement was never signed or executed because the offending physician rectified his conduct to the satisfaction of defendant‘s partners.
This 2005 matter obviously does not involve “the same transaction or legal dispute” as the present case, which entails issues of alleged gender discrimination and retaliation, and Bowers‘s subsequent bankruptcy, insolvency, and purported diversion of business to a competitor. Moreover, since the 2005 legal consultations transpired in the context of group partnership meetings with M&L‘s attorneys, no communications were made by Bowers to counsel that were unknown to the other physicians and hence there was not “a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance [defendant‘s] position in the subsequent matter.”
Nor is the present case “substantially related” to M&L‘s 2008 representation of Bowers on an individual basis in her aborted attempt to establish a practice in Louisville. Bowers sought to perform refractive surgery on a once-a-week basis in Louisville while overseeing her restaurant there, a franchise of the Mongolian Grill. In 2008, defendant‘s practice manager referred Bowers to an attorney with M&L, for the purpose of creating a corporate entity known as Refractive Surgery of Louisville, PLLC. Bowers‘s activities in Louisville would have no competitive effect on defendant‘s medical practice in Paducah, over 200 miles away, and her proposal was made with the knowledge and consent of defendant‘s partners. However, Bowers‘s plans never materialized because she ultimately decided, for various reasons, including the failure of her restaurant business, not to perform medical procedures in Louisville. Bowers‘s PLLC was never used, and it was administratively dissolved in 2009.
The events underlying the present litigation started in late 2009 and early 2010. On November 9, 2009, Bowers tendered a resignation letter to defendant‘s partners. Although her partnership agreement required a one-year notice, she did not state when she intended to depart. Bowers allegedly began secret discussions with a direct competitor, Eyecare Associates,
On February 25, 2010, Bowers filed a Chapter 7 bankruptcy petition to resolve her restaurant debt. That same month, she unilaterally added the office location of Eyecare Associates to malpractice insurance coverage paid for by defendant. Shortly thereafter, defendant‘s partners learned that Bowers intended to work with Eyecare Associates. On March 4, 2010, after consulting with an M&L attorney, they unanimously voted to expel Bowers from the partnership, citing “your Chapter 7 bankruptcy and . . . other personal conduct on your part which the Partnership, in its opinion, finds detrimental to the Partners and the Partnership . . . .” In March 2012, Bowers filed the instant action against defendant, alleging gender discrimination and retaliation under Title VII, and violations of state law. A state-court action is also pending. Defendant is represented by M&L in these cases.
Unlike the majority, I simply cannot conclude that M&L‘s limited 2008 transactional work for Bowers for the narrow purpose of forming a now-defunct company, with the full knowledge and consent of defendant, is substantially related to the present matter, so as to justify the disqualification of M&L in this case. The majority‘s opinion is rife with speculative scenarios regarding confidential information that Bowers may have shared with M&L regarding her relationship with her partners in The Ophthalmology Group. But Bowers‘s conclusory assertions that issues in the former and current representations are related and that confidences were imparted to M&L in the 2008 consultations that would unfairly advance defendant‘s cause herein do not suffice to fulfill the heavy burden on Bowers to justify disqualification. M&L‘s assistance in setting up a corporation, and the personal financial information imparted by Bowers that predominated this task, have little or no relationship to her current claims of discrimination and retaliation in violation of federal and state law. Bowers‘s failure to establish this essential element dooms her argument that a conflict of interest exists.
Reaching the merits of defendant‘s dispositive motion to dismiss, I would affirm the district court‘s grant of summary judgment in favor of defendant for the reasons stated in its well-reasoned decision below. As the district court properly determined, Bowers was a partner of The Ophthalmology Group, not an “employee” afforded protection under Title VII.
“The determination of whether a plaintiff qualifies as an employee under the Act ‘is a mixed question of law and fact’ that a judge normally can make as a matter of law.” Weary v. Cochran, 377 F.3d 522, 524 (6th Cir. 2004) (quoting Lilley v. BTM Corp., 958 F.2d 746, 750 n.1 (6th Cir. 1992)). In making this determination, this court looks to the common-law agency test, in which “appellate consideration reviews numerous factors impacting the employment relationship to be judged in arriving at a decision with no one decisive factor.” Simpson v. Ernst & Young, 100 F.3d 436, 443 (6th Cir. 1996); see also Shah v. Deaconess Hosp., 355 F.3d 496, 499 (6th Cir. 2004). The district court correctly held that the relevant indicia of being an “employee” are not present in this case; instead, the evidence of record clearly demonstrates that Bowers enjoyed partnership status through a partnership agreement, engaged in decision-making with her partners, and was compensated according to a partnership formula. Defendant was therefore entitled to judgment as a matter of law with regard to Bowers‘s Title VII gender discrimination and retaliation claims, and the district court did not abuse
For the foregoing reasons, I would affirm the district court‘s judgment.
Notes
R. 29-1 (Def. Memo in Resp. to Pl. Mot. to Disqual. at 8 n.3) (Page ID #1760). Contrary to what M&L argued at the district court, the commentary to Rule 1.6 makes it absolutely clear that Rule 1.6 “governs the disclosure by a lawyer of information relating to the representation of a client during the lawyer‘s representation of the client” and instructs the reader to see “Rule 1.9(c)(2) for the lawyer‘s duty not to reveal information relating to the lawyer‘s prior representation of a former client.”The use of otherwise confidential file material related to Dr. Bowers is permissible pursuant to
Ky. SCR Rule 3.130[1.6(b)(3)] (Model Rule 1.6(b)(3)) (“A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary. . . to respond to allegations in any proceeding . . . concerning the lawyer‘s representation . . .“).