UNITED STATES OF AMERICA, Plaintiff-Petitioner, v. PREVEZON HOLDINGS LTD., PREVEZON ALEXANDER, LLC, PREVEZON SOHO USA, LLC, PREVEZON SEVEN USA, LLC, PREVEZON PINE USA, LLC, PREVEZON 1711 USA, LLC, PREVEZON 1810 LLC, PREVEZON 2009 USA, LLC, PREVEZON 2011 USA, LLC, Defendant-Respondent, v. HERMITAGE CAPITAL MANAGEMENT LTD., Movant-Petitioner.
Docket No. 16-132-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
October 17, 2016
August Term, 2015 (Argued: June 9, 2016)
Appeal from United States District Court for the Southern District of New York (Thomas P. Griesa, J.) from the denial of Hermitage Capital Management Ltd.’s motion to disqualify counsel for Prevezon Holdings Ltd., Prevezon Alexander, LLC, Prevezon Soho USA, LLC, Prevezon Seven USA, LLC, Prevezon Pine USA, LLC, Prevezon 1711 USA, LLC, Prevezon 1810 LLC, Prevezon 2009 USA, LLC, and Prevezon 2011 USA, LLC.
This case presents the “extraordinary circumstances” necessary to grant a writ of mandamus. We hold that the district court abused its discretion in denying the motion to disqualify. Accordingly, we grant the petition for a writ of mandamus and instruct the district court to enter an order disqualifying John Moscow and BakerHostetler LLP.
Writ granted.
JACOB W. BUCHDAHL (Cory S. Buland, on the brief), Susman Godfrey LLP, New York, NY, for Movant-Appellant Hermitage Capital Management Ltd.
MICHAEL B. MUKASEY (Jennifer F. Mintz, Jarrod L. Schaeffer, on the brief), Debevoise & Plimpton, LLP, New York, NY, for Defendants-Appellees Prevezon Holdings Ltd., Prevezon Alexander, LLC, Prevezon Soho USA, LLC, Prevezon Seven USA, LLC, Prevezon Pine USA, LLC, Prevezon 1711 USA, LLC, Prevezon 1810 LLC, Prevezon 2009 USA, LLC, and Prevezon 2011 USA, LLC.
POOLER, Circuit Judge:
Appeal from United States District Court for the Southern District of New York (Thomas P. Griesa, J.)2 from the denial of Hermitage Capital Management Ltd.’s (“Hermitage”) motion to disqualify counsel for Prevezon Holdings Ltd., Prevezon Alexander, LLC, Prevezon Soho USA, LLC, Prevezon Seven USA, LLC, Prevezon Pine USA, LLC, Prevezon 1711 USA, LLC, Prevezon 1810 LLC, Prevezon 2009 USA, LLC, and Prevezon 2011 USA, LLC (together, “Prevezon”). This case presents the “extraordinary circumstances” necessary to grant a writ of mandamus, as Hermitage is without other viable avenues for relief and
BACKGROUND
I. The underlying fraud.
The underlying litigation arises out of a 2013 civil forfeiture action (the “Forfeiture Action”) brought by the United States alleging that Prevezon received the proceeds of a complex, sweeping scheme that defrauded the Russian treasury of roughly $230 million (the “Russian Treasury Fraud”). The government alleges Prevezon laundered portions of the fraud proceeds in New York by buying various real estate holdings in Manhattan. We draw much of the background section from the second amended complaint, and note that the accuracy of the government’s allegations remains untested.
Hermitage, an investment advisory firm, is a victim of the Russian Treasury Fraud. Hermitage advised the Hermitage Fund, an investment fund that focused on investments in Russia. A group of corrupt Russian officials and other individuals known as the “Organization” raided Hermitage’s Moscow
The fraudulent legal proceedings yielded judgments worth roughly $973 million for the Organization. The Organization then used the sham judgments to apply for tax refunds on behalf of the portfolio companies on the ground that the judgments represented losses that were equal to the profits reported by the portfolio companies in the previous tax year. Since the faked losses fully offset the profits, the portfolio companies were entitled to a refund of the taxes paid on those profits. Two days after the refund applications were filed, refunds of roughly $230 million were paid out by the Russian treasury to bank accounts
II. Hermitage’s involvement with BakerHostetler.
When Hermitage learned of the fraud, it hired attorneys in Russia to investigate, including Sergei Magnitsky. Magnitsky conducted an investigation that discovered the fraud, and Hermitage ultimately filed six criminal complaints with the Russian authorities. Hermitage and its lawyers instead found themselves the focus of the criminal investigation. After Russian authorities opened up a criminal case against two Hermitage lawyers who drafted several of the legal complaints, the lawyers fled Russia. Russian authorities also pursued criminal proceedings against Hermitage’s chief
Magnitsky, who gave testimony against corrupt public officials alleged to be members of the Organization, was arrested in November 2008. After 358 days of pre-trial confinement, Magnitsky became ill and died. Russia’s Human Rights Council determined that Magnitsky’s arrest and detention were illegal, that on the last day of his life Magnitsky was beaten by guards wielding rubber batons, and that necessary medical care was withheld. The Public Oversight Commission for the City of Moscow for the Control of the Observance of Human Rights in Places of Forced Detention issued a report stating: “The members of the civic supervisory commission have reached the conclusion that Magnitsky had been experiencing both psychological and physical pressure in custody, and the conditions in some of the wards of [the prison] can be justifiably called torturous.”3
In this engagement, we expect to perform the following: extensive analysis of the factual and legal background of the events in question; examination and analysis of evidence in both testimonial and documentary form, including the testimony of expert witnesses; preparation and presentation of prosecution memoranda, if appropriate, to the United States Department of Justice (or other law enforcement agency); and cooperation and support to the United States Department of Justice if an investigation is pursued by them.
App’x at 107.
BakerHostetler and Moscow represented Hermitage for roughly nine months. During that time, Moscow and his colleagues reviewed non-public documents from Hermitage related to the Russian Treasury Fraud, which allowed the firm to create a case timeline and chronology, and discussed “potential individuals for depositions in connection with the prosecutions in Russia.” App’x at 116. Moscow met with staff at the U.S. Attorney’s Office for the
BakerHostetler also drafted a twenty-five page declaration in anticipation of Hermitage seeking a Section 1782 subpoena, which allows a federal court to order discovery in the United States “for use in a . . . foreign . . . tribunal,”
Hermitage paid BakerHostetler and Moscow nearly $200,000 in fees. Hermitage terminated the relationship after roughly nine months and retained new counsel. Its new counsel continued the investigation into tracing the proceeds of the alleged Russian Treasury Fraud and provided its results to the United States government. The government, in turn, conducted its own investigation which led to it filing a civil forfeiture and money laundering action against Prevezon in September 2013. Prevezon hired Moscow and BakerHostetler to defend it against the government’s charges.
Hermitage filed a complaint with the Southern District of New York’s Grievance Committee against Moscow and BakerHostetler, protesting Moscow and BakerHostetler’s representation of Prevezon in light of their prior representation of Hermitage. On August 7, 2014, the Grievance Committee notified Hermitage it would take no action in the matter, without prejudice to Hermitage pursuing the issue in district court. On September 29, 2014, Hermitage moved for BakerHostetler’s disqualification, on the ground that BakerHostetler and Moscow “switched sides” by first pursuing the perpetrators
Following the close of discovery, the government moved for partial summary judgment against Prevezon, seeking to establish that (1) the Russian Treasury Fraud took place and (2) it qualified as a “specified unlawful activity” to establish liability under federal law.4 In opposing the motion, Prevezon argued
The version of the fraud on the Russian Treasury (the “Treasury Fraud”) told in the first, second and third complaints has been exposed by discovery to be false. It was contrived and skillfully sold by William F. Browder to politicians here and abroad to thwart his arrest for a tax fraud conviction in Russia. This public relations narrative was swallowed whole by the Government, which incorporated it into its complaint without investigation, a situation this Court has described as “troubling.” When placed under oath, however, Browder‘s own witnesses revealed that he authorized the supposedly unauthorized acts alleged in the three complaints and knew about the events that the complaints allege he was unaware of. From this discovery, it is plausible Browder stole the money from the Russian Treasury or, at least, knew about the fraud before it occurred. . . . This case is about fraud on the Russian Treasury; it is not about fraud on an investor or trustee of Browder’s Hermitage Fund. Shortening the trial by relieving the Government of its obligation to prove a Specified Unlawful Activity would deprive Defendants of an important, meritorious defense.
The district court denied the partial summary judgment motion, explaining that:
In my view the government‘s motion for partial summary judgment presents some points that are very well taken. In other words, there are certain things that are not in dispute. There are a lot of things that are hotly in dispute. But some things are not in dispute. And I keep referring and I‘ll refer to it again: the basic fraud in Moscow is not in dispute. It was committed. And $216 million was stolen from Russia. That is not in dispute. Now, the problem is, in trying to eliminate issues by granting partial summary judgment, the problem with that is, it isn‘t that the government‘s motion is not well taken, but it seems to me at the trial it will be necessary to put on evidence of that background. I cannot see a
trial that does not start with the basic evidence about what occurred in Moscow.
App’x at 517-18.
With the litigation headed for trial, on December 15, 2015, Hermitage again sought BakerHostetler’s disqualification. The district court granted the motion on December 18, 2015, without allowing Prevezon an opportunity to brief the issue, stating that:
It is now clear that one of BakerHostetler’s primary defense strategies in the present case involves asserting that Hermitage had substantial responsibility for what is well known as the Russian Treasury Fraud. This is significant because the level of Hermitage’s involvement in fraudulent activity may make the difference between proving or not proving the commission of certain alleged specified unlawful activities as a foundation for showing money laundering, which is at the heart of the present case. Hermitage’s involvement was not previously at issue. Indeed, Moscow, who formerly represented Hermitage, took the position that Hermitage had “nothing to do” with the Russian Treasury Fraud. The case has now changed, in that it appears that BakerHostetler, and thus Moscow, is asserting that “the evidence points that Hermitage” was substantially involved in the Russian Treasury Fraud. BakerHostetler’s change in defense strategy now makes the subjects of its former and current representation “substantially related.” There is now a very real possibility that BakerHostetler will be in a position
where it would be trying to show that its current clients (the Prevezon defendants) are not liable and showing this by attacking its former client (Hermitage) on the very subject of BakerHostetler’s representation of that former client.
Special App’x at 1-2 (internal citations omitted).
On December 21, 2015, Prevezon moved to certify an interlocutory appeal of the disqualification order pursuant to
Prevezon filed a brief opposing the disqualification motion. Hermitage filed a reply brief and a supporting declaration from Bruce A. Green, a legal ethics professor at Fordham University School of Law, who opined that disqualification was proper. The government filed a brief advocating disqualification, highlighting the risk of retaliation against Hermitage-related individuals from Russian authorities. The government noted that Browder, after being barred from Russia, was prosecuted in absentia by Russia on charges of a
On January 8, 2016, the district court reversed its decision and denied Hermitage’s motion for disqualification, concluding that “Moscow’s representation of Prevezon does not pose a significant risk of trial taint.” United States v. Prevezon Holdings Ltd., No. 13-cv-06326, 2016 WL 96170, at *1 (S.D.N.Y. Jan. 8, 2016). The district court determined that there was no “substantial relationship” between the subject matter of the two representations because the Russian Treasury Fraud was “merely background information.” Id. at *4. The district court explained:
As an initial matter, it is important to clarify what this case is not about. This case is not about Hermitage, nor is this case centrally focused on the Russian Fraud. Even if it were, to the court’s knowledge, Hermitage was never the target of a U.S. investigation for the Russian Fraud, let alone an actual lawsuit. In this way, Moscow did not “switch sides,” nor is he now accusing a former client of the “same crime” that he was “retained to defend against.”
Moreover, the Russian Fraud is an ancillary issue in this suit. The Government does not allege that Prevezon committed the Russian Fraud. Rather, the Government has accused Prevezon of laundering proceeds of the Russian Fraud through the United States. The Russian Fraud is merely background information and Hermitage cannot be held liable as a result of this lawsuit. Not only is the Russian Fraud a side issue in this matter, but Hermitage is also a mere spectator to this litigation. Hermitage is not a party to this suit and its rights are not directly at stake. Though Hermitage may be interested in the outcome of the case and in how its name is used at trial, these concerns do [not] warrant the drastic relief they seek.
Id. at *4-5. Although the district court acknowledged the risk of legal action against Hermitage and its officers by Russian authorities, it deemed that risk both speculative and irrelevant to its consideration of the disqualification motion because Hermitage was not a party to the instant litigation, and thus the district court saw no risk of “potential taint to this trial.” Id. at *5.
Hermitage moved for a stay and sought to certify an interlocutory appeal on January 11, 2016. The district court denied the motion on January 15, 2016. With the government’s support, Hermitage then moved in this Court for a stay pending appeal, or, in the alternative, a petition for a writ of mandamus. This Court granted the stay motion on January 25, 2016.
I. Collateral order doctrine.
We start, as we must, with the threshold question of subject matter jurisdiction. Generally, “[t]he courts of appeals . . . have jurisdiction of appeals from all final decisions of the district courts of the United States . . . .”
Hermitage first argues that this appeal falls under the collateral order doctrine, which allows interlocutory appeals from a “small class” of district court
While in this case “the possibility of reconsideration by the trial judge cannot be dismissed as theoretical,” Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 381 (1981) (Rehnquist, J., concurring), we need not decide whether a disqualification motion satisfies the “conclusive determination” requirement. Nor need we consider whether Hermitage’s status as a nonparty renders the order at issue “effectively unreviewable.” Instead, we find that the collateral order doctrine does not apply here because the denial of a disqualification order does not resolve an “important issue completely separate from the merits.” Id. at 375.
The final judgment rule “serves the important purpose of promoting efficient judicial administration,” Firestone, 449 U.S. at 374, and avoids “unreasonable disruption, delay, and expense” caused by multiple interlocutory
II. Mandamus.
We turn to Hermitage‘s alternate request for relief: that if we find the collateral order doctrine does not apply, we treat its appeal as a petition for a writ of mandamus. See SEC v. Rajaratnam, 622 F.3d 159, 169 (2d Cir. 2010) (“Even though we lack interlocutory jurisdiction to review the district court‘s order, a writ of mandamus may still be appropriate.“). The Firestone Court noted that mandamus may be appropriate in “situations in which a party will be irreparably damaged if forced to wait until final resolution of the underlying litigation before securing review of an order denying its motion to disqualify opposing counsel.” Firestone, 449 U.S. at 378 n.13. Indeed, our sister Circuits will issue writs of mandamus to direct a district court both to disqualify counsel and to allow counsel to proceed. See, e.g., Matter of Sandahl, 980 F.2d 1118, 1122 (7th Cir. 1992) (granting writ and directing district court to vacate disqualification order); In re Am. Airlines, Inc., 972 F.2d 605, 609 (5th Cir. 1992) (“American claims that immediate review of its disqualification motion is appropriate. . . . We agree.“); Christensen v. U.S. Dist. Ct. for Cent. Dist. of Cal., 844 F.2d 694, 697 (9th Cir. 1988) (noting that the effect of an order disqualifying counsel “is irreversible“); In re Am. Cable Publ‘ns, Inc., 768 F.2d 1194, 1197 (10th Cir. 1985) (granting writ and directing district court to vacate disqualification order).
The All Writs Act provides that “all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”
All three requirements are satisfied here. Hermitage lacks an adequate alternate means to obtain relief, the issue involved is significant and will aid in the administration of justice, and the district court committed clear error in
A. Adequate means of obtaining relief.
Even assuming arguendo Hermitage possesses standing to challenge the denial in a post-trial appeal, such a challenge would come too late to provide any effective relief. Unlike a party, Hermitage cannot escape the harm of allowing its former counsel to represent Prevezon by moving to vacate a final judgment. Prevezon‘s trial strategy calls for it to demonstrate “that Browder and his agents engaged in a series of misrepresentations to execute the fraud, to distance themselves from it, and to pin it on the Russian officials investigating Browder for a separate tax fraud his companies committed.” App‘x at 449. Absent disqualification, there is a real risk of Hermitage‘s confidences being misused. “As Judge Kearse has succinctly explained, ‘a remedy after final judgment cannot unsay the confidential information that has been revealed.‘” City of New York, 607 F.3d at 934 (quoting In re Sims, 534 F.3d 117, 129 (2d Cir. 2008)). Indeed, “the concern that a remedy after final judgment cannot unsay the confidential information that has been revealed may account for the liberal use of mandamus in situations involving the production of documents or testimony claimed to be
Prevezon argues that there are other tools available to provide Hermitage with relief against the potential misuse of its confidences, such as a protective order. But protective orders are inadequate where, as here, the concern is not simply the disclosure of confidential information but the use of that information in shaping trial strategy and questioning. Ullrich v. Hearst Corp., 809 F. Supp. 229, 236 (S.D.N.Y. 1992) (“Adverse use of confidential information is not limited to disclosure. It includes knowing what to ask for in discovery, which witnesses to seek to depose, what questions to ask them, what lines of attack to abandon and what lines to pursue, what settlements to accept and what offers to reject, and innumerable other uses.“). The danger here is not limited to BakerHostetler
B. Appropriate under the circumstances.
The writ is appropriate in the circumstances of this case, because this case implicates a significant and novel question of law regarding the rights of nonparty clients, and because resolving that issue will aid in the administration of justice. City of New York, 607 F.3d at 942-43. We confront a question of first impression in this Circuit: disqualification of counsel on the basis of a conflict of interest posing a potential harm to a nonparty non-witness. Addressing this unusual set of circumstances will offer useful guidance to the district courts.
Further, as discussed in detail below, the district court committed clear error in its analysis of the substantial relationship between the representations. The preservation of the confidences between lawyer and client “touch[es] upon vital concerns of the legal profession and the public‘s interest in the scrupulous administration of justice.” Emle Indus., Inc. v. Patentex, Inc., 478 F.2d 562, 564 (2d Cir. 1973). A client cannot fully and candidly discuss its situation with counsel if
The petition here also implicates the government‘s ability to procure assistance from crime victims. If crime victims fear that the attorneys they hire may turn against them, they may be less likely to assist government in its investigations. See, e.g., City of New York, 607 F.3d at 942 (“If we were to decline to
C. “Clear and Indisputable” Right to the Writ.
i. Substantial relationship.
The classic test in this Circuit for whether disqualification is warranted in successive representation cases is set forth in Evans v. Artek Sys. Corp: disqualification is warranted where: “(1) the moving party is a former client of the adverse party‘s counsel; (2) there is a substantial relationship between the subject matter of the counsel‘s prior representation of the moving party and the issues in the present lawsuit; and (3) the attorney whose disqualification is
“A ‘substantial relationship’ exists where facts pertinent to the problems underlying the prior representation are relevant to the subsequent representation.” Agilent Techs., Inc. v. Micromuse, Inc., No. 04-cv-3090, 2004 WL 2346152, at *10 (S.D.N.Y. Oct. 19, 2004) (citation omitted); see also N.Y. Rules of Prof‘l Conduct 1.9 cmt. 3 (subsequent representations are substantially related if, among other things, they “involve the same transaction“). The district court found the two representations here were not substantially related because (1) “[t]his case is not about Hermitage, nor is this case centrally focused on the Russian Fraud,” (2) the “Russian Fraud is merely background information and Hermitage cannot be held liable as a result of this lawsuit,” and (3) “Hermitage is [] a mere spectator in this litigation . . . and its rights are not directly at stake.” Prevezon, 2016 WL 96170, at *4-*5.
We disagree. The district court‘s statement that the Russian Treasury Fraud is an “ancillary issue in this suit” cannot be reconciled with Prevezon‘s own representation that “[t]he manner in which the Treasury Fraud was carried
Prevezon states that at trial, it intends to introduce evidence that Hermitage‘s “Browder and his agents engaged in a series of misrepresentations to execute the fraud, to distance themselves from it, and to pin it on the Russian officials investigating Browder for a separate tax fraud his companies committed.” App‘x at 449. Prevezon told the district court that “every step of the alleged fraud . . . has been disputed with very specific facts. And what it comes down to, Judge, is, the government alleges there was an organization, unnamed, mysterious organization that did all this, and the evidence points that Hermitage and Mr. Browder did it. That is the heart of the dispute.” App‘x at 516. Plainly, Prevezon‘s trial strategy turns on proving Hermitage is not the victim of the Russian Treasury Fraud, but the perpetrator.
Moreover, the record makes clear that BakerHostetler‘s prior
The district court also erred in determining that “Hermitage is [] a mere spectator to this litigation. . . . and its rights are not directly at stake.” Prevezon, 2016 WL 96170, at *5. Hermitage is not a “mere spectator.” It is the putative victim. The courts recognize that crime victims, as well as witnesses, possess legitimate interests in criminal proceedings that may support disqualification. In United States v. James, 708 F.2d 40 (2d Cir. 1983), we upheld the disqualification of a defense attorney who previously represented a witness scheduled to testify for the government in a criminal trial. The James court noted that “[t]he
ii. Confidences.
Once a substantial relationship between the cases is established, “where the same individual lawyer participated in the prior and current representation, the movant is not required to make a specific showing that confidences were passed to counsel. Instead, the movant is entitled to the benefit of an irrebuttable presumption that confidences were shared.” DeFazio v. Wallis, 459 F. Supp. 2d 159, 164-65 (E.D.N.Y. 2006) (collecting cases). As our Court explained in Gov‘t of India v. Cook Indus., Inc.:
In order to grant a disqualification motion, a court should not require proof that an attorney actually had access to or received privileged information while representing the client in a prior case. Such a requirement would put the former client to the Hobson‘s choice of either having to disclose his privileged information in order to disqualify his former attorney or having to refrain from the disqualification motion altogether.
The district court erred in shifting the burden to Hermitage to identify confidences it had shared with its counsel. The district court faulted Hermitage for failing to “concretely show[] that any of its confidences had anything to do with how, why, or when Prevezon allegedly laundered Russian Fraud proceeds into the United States, or how its confidences would be relevant in the case against Prevezon, in which the Russian Fraud is mere background.” Prevezon, 2016 WL 96170, at *5. The substantial relationship test removes the need for courts to make direct inquiry into whether confidential information was actually transmitted. See U.S. Football League v. Nat‘l Football League, 605 F. Supp. 1448, 1461 (S.D.N.Y. 1985). After finding a substantial relationship exists:
The Court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent. Only in this manner can the lawyer‘s duty of absolute fidelity be enforced and the spirit of the rule relating to privileged communications be maintained.
Emle, 478 F.2d at 570 (quoting T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265, 268-69 (S.D.N.Y. 1953)).
iii. Trial taint.
“The authority of federal courts to disqualify attorneys derives from their inherent power to preserve the integrity of the adversary process.” Hempstead Video, Inc. v. Inc. Vill. of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005) (internal quotation marks and citation omitted). In exercising this power, the Court must “be solicitous of a client‘s right freely to choose his counsel—a right which of course must be balanced against the need to maintain the highest standards of the profession.” Gov‘t of India, 569 F.2d at 739. Thus, disqualification is called for only where “an attorney‘s conduct tends to taint the underlying trial,” because federal and state disciplinary mechanisms suffice for other ethical violations. Nyquist, 590 F.2d at 1246.
Generally, where, as here, the Evans factors are satisfied, trial taint is
The Eighth Circuit found disqualification proper in circumstances similar to those here in Zerger & Mauer LLP v. City of Greenwood, 751 F.3d 928, 929-30 (8th Cir. 2014). There, a law firm represented the City of Greenwood in a case against a local quarry. Id. In settlement negotiations, Greenwood agreed to route truck traffic along a specific road and stipulated that the traffic would not create a nuisance. Id. Greenwood‘s lawyers later sued the same quarry on behalf of a number of property owners along the truck route who argued it was a nuisance. While Greenwood was not a party, the Eighth Circuit found such representation improper and ordered disqualification:
Not only do plaintiffs have an interest in collecting
substantial damages, they also naturally have an interest in otherwise disrupting [the quarry‘s] use of Second Avenue, even if they have not sought an injunction. . . . . Greenwood may demand that its former counsel not advocate positions that pose the serious threat of once again embroiling Greenwood in protracted litigation.
Id. at 934 (footnote omitted). In a similar vein, courts will disqualify lawyers who switch sides from representing a crime victim to representing the perpetrator. See, e.g., United States v. Gordon, 334 F. Supp. 2d 581, 597 (D. Del. 2004); United States v. Fawell, No. 02 CR 210, 2002 WL 1284388, at *7-*8, *11 (N.D. Ill. June 10, 2002); United States v. Alex, 788 F. Supp. 359, 365 (N.D. Ill. 1992). Because Prevezon‘s defense is predicated on proving Hermitage committed the Russian Treasury Fraud, this is a situation where “an attorney‘s conduct tends to taint the underlying trial.” Nyquist, 590 F.2d at 1246 (internal quotation marks and citation omitted).
CONCLUSION
In granting the petition, we are sensitive to the fact that the motion to disqualify came late in the litigation, on the eve of trial after several years of pretrial discovery and motion practice and while several million dollars of property remains under pretrial restraint. However, Prevezon shares in the responsibility
The circumstances leading to our grant of the writ, moreover, truly are extraordinary: it is rare that a nonparty, nonwitness will face the risk of prosecution by a foreign government based on the potential disclosure of confidential information obtained during a prior representation. That real risk, however, coupled with the misapplication of the law by the district court, outweighs the delay and inconvenience to Prevezon of obtaining new counsel.
We have examined the remainder of the arguments raised by the parties and find them to be without merit. For the reasons given above, we grant the petition for a writ of mandamus and instruct the district court to enter an order disqualifying Moscow and BakerHostetler from representing Prevezon in this litigation. Prevezon‘s motion for clarification, filed in this Court on February 17, 2016, is denied as moot.