National Union Fire Insurance v. Alticor, Inc.National Union Fire Insurance v. Alticor, Inc.
Finally, it is worth noting that interpreting the MCS-90 as Kline suggests raises other public policy concerns. The federal government balanced the need to compensate victims with the needs of industry and determined the appropriate minimum compensation for members of the public. In essence, Kline is asking us to rewrite the minimum compensation provisions, something we are unwilling to do given the language of the MCS-90 and the public policy directives already in place. In addition, Kline‘s interpretation of the MCS-90 would force insurance companies to evaluate the insured‘s financial well-being before issuing secondary policies. Doing so generates additional costs. See Cont‘l Marble & Granite Co., Inc. v. Canal Ins. Co., 785 F.2d 1258, 1259 (5th Cir.1986).
As all of Kline‘s claims are dependent on her interpretation of the MCS-90, the district court properly dismissed those claims. The judgment below is AFFIRMED.
Charles W. Browning, Jeffrey C. Gerish, Plunkett & Cooney, Bloomfield Hills, MI, for Plaintiffs-Appellees.
James D. Wilson, Wilson Young PLC, Detroit, MI, for Defendants-Appellants.
Before GILMAN and GRIFFIN, Circuit Judges; GWIN, District Judge.*
ORDER AND OPINION
GRIFFIN, Circuit Judge.
Both plaintiffs-appellees, National Union Fire Insurance Company of Pittsburgh, Pennsylvania, and Illinois National Insurance Company (collectively “plaintiff National Union“) are represented by the Michigan law firm of Plunkett & Cooney, P.C. (“Plunkett“). All three defendants-appellants, Alticor, Inc., Amway Corporation, and Quixtar, Inc., are represented by the Michigan law firm of Wilson Young PLC (“Wilson Young“).
Attorney John Egan was employed by plaintiff National Union‘s law firm, Plunkett, from September 2003 until July 11, 2006. During that time, Egan represented this same plaintiff in this very case and in other insurance-related matters involving defendant Alticor. Specifically, Egan spent forty percent of his billable time representing plaintiff in insurance-coverage disputes against defendant Alticor; he participated in depositions, document production and strategy sessions, and he
National Union now moves to disqualify the Wilson Young firm from representing Alticor. National Union‘s motion proceeds on the theory of imputed disqualification, under which an attorney‘s conflict of interest may be imputed to his law firm under certain circumstances. Specifically, National Union relies on two Michigan Rules of Professional Conduct (“MRPC“),
Previously, the ethics rules for attorneys practicing in our court were largely governed by our common-law precedent. See, e.g., Manning v. Waring, Cox, James, Sklar & Allen, 849 F.2d 222 (6th Cir.1988). However, with the wide-spread acceptance of the American Bar Association‘s Model Rules of Professional Conduct,1 we now look to the codified Rules of Professional Conduct for guidance. See, e.g., Duggins v. Steak ‘N Shake, Inc., 195 F.3d 828, 835 (6th Cir.1999) (referring to and following the ABA‘s Model Rules of Professional Conduct and Model Code of Professional Responsibility). We conclude that applying these accepted rules will lead to greater uniformity and predictability with regard to the ethical code of conduct that we
Application of the Rules of Professional Conduct are particularly applicable to the present dispute involving Michigan-based law firms and attorneys, who, as members of the State Bar of Michigan, are subject to the Michigan Rules of Professional Conduct.2
As an initial matter, we conclude that it is appropriate for this court to entertain National Union‘s motion and order whatever relief is warranted. In this regard, we agree with the following observations made by the Michigan Court of Appeals:
Plaintiff‘s argument appears to be that judges have no ethical oversight regarding their court officers and that the Attorney Grievance Commission is the exclusive authority regulating the ethical obligations of attorneys.
In this regard, the plaintiff fails to understand the proper role of the court regarding the ethical conduct of its officers. Starting with In re Mills, 1 Mich. 392 (1850), Michigan has a long tradition of judicial oversight of the ethical conduct of its court officers.....
The more recent cases in which our courts have taken affirmative action to enforce our ethical standards and rules regarding counsel are Schlossberg v. State Bar Griev. Bd., 388 Mich. 389, 200 N.W.2d 219 (1972), Attorney General v. Public Service Comm., 243 Mich.App. 487, 625 N.W.2d 16 (2000), In re Norris Estate, 151 Mich.App. 502, 391 N.W.2d 391 (1986), [etc.] ... Such a practice is consistent with the Michigan Code of Judicial Conduct Canon 3(B)(3), which provides in part: “A judge should take or initiate appropriate disciplinary measures against a judge or lawyer for unprofessional conduct of which the judge may become aware.”
Evans & Luptak, PLC v. Lizza, 251 Mich.App. 187, 650 N.W.2d 364, 368-69 (Mich.App.2002).
The Supreme Court has noted our inherent power to discipline attorneys who violate our standards of ethical conduct:
The Court of Appeals stated that the standard of professional conduct expected of an attorney is defined by the ethical code adopted by the licensing authority of an attorney‘s home state, 734 F.2d, at 336, n. 4, and cited the North Dakota Code of Professional Responsibility as the controlling expression of the conduct expected of petitioner. The state code of professional responsibility does not by its own terms apply to sanctions in the federal courts. Federal courts admit and suspend attorneys as an exercise of their inherent power; the standards imposed are a matter of federal law. Hertz v. United States, 18 F.2d 52, 54-55 (C.A.8 1927).
The Court of Appeals was entitled, however, to charge petitioner with the knowledge of and the duty to conform to the state code of professional responsibility. The uniform first step for admission to any federal court is admission to a state court. The federal court is entitled to rely on the attorney‘s knowledge of the state code of professional conduct applicable in that state court; the provision that suspension in any other court of record creates a basis for a show cause hearing indicates that Rule 46 anticipates continued compliance with the state code of conduct.
In re Snyder, 472 U.S. 634, 645 n. 6, 105 S.Ct. 2874, 86 L.Ed.2d 504 (1985).
Accordingly, we exercise our authority to enforce the Rules of Professional Conduct with respect to counsel who appear before this court, and turn to the substance of the MRPC cited by National Union.
(a) A lawyer [Egan] who has formerly represented a client in a matter [plaintiff National Union] shall not thereafter represent another person [defendant Alticor] in the same or a substantially related matter in which that person‘s interests are materially adverse to the interests of the former client unless the former client consents after consultation.
(b) Unless the former client consents after consultation, a lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated has previously represented a client....
Both common sense and the Comment to
(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.9(a) or (c), or 2.2.
Therefore, we GRANT plaintiffs-appellees’ motion to disqualify the law firm of Wilson Young PLC from representing defendants-appellants in this matter. Alticor and the other defendants-appellants must secure new counsel if they wish to proceed with this appeal. The court orders that oral argument scheduled for November 1, 2006, is cancelled. New counsel shall be retained within 28 days. New counsel shall file an appearance with the Clerk of this court immediately upon being retained.
It is so ORDERED.