Biocore Medical Technologies, Inc. v. Khosrowshahi

181 F.R.D. 660, 42 Fed. R. Serv. 3d 581, 1998 U.S. Dist. LEXIS 16169, 1998 WL 724003
CourtDistrict Court, D. Kansas
DecidedSeptember 4, 1998
DocketNos. Civ. A. 98-2031-KHV, Civ. A. 98-2175-KHV
StatusPublished
Cited by38 cases

This text of 181 F.R.D. 660 (Biocore Medical Technologies, Inc. v. Khosrowshahi) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Biocore Medical Technologies, Inc. v. Khosrowshahi, 181 F.R.D. 660, 42 Fed. R. Serv. 3d 581, 1998 U.S. Dist. LEXIS 16169, 1998 WL 724003 (D. Kan. 1998).

Opinion

MEMORANDUM AND ORDER

VRATIL, District Judge.

This matter comes before the Court on plaintiffs’ Motion To Disqualify Attorney Timothy F. Butler (Doc. # 140) filed June 29, 1998 and plaintiffs’ Supplement To Motion and Memorandum In Support Of Motion To Disqualify Attorney Timothy F. Butler (Doc. # 155), filed July 2, 1998. Plaintiffs allege that Butler has violated Rules 3.4(b), 4.2 and 8.4(g) of the Kansas Model Rules of Professional Conduct (“MRPC”), Canon 9 of the Canons of Professional Responsibility (“CPR”); Rules 5(d) and 45(b)(1) of the Fed[664]*664eral Rules of Civil Procedure; and D.Kan. Rules 26.3 and 83.5.4.

STANDARD OF REVIEW

The Court has the power to disqualify counsel at its discretion for violations of professional standards of ethics. E.E.O.C. v. Orson H. Gygi Co., Inc., 749 F.2d 620, 621 (10th Cir.1984); Brown Mackie College v. Graham, 1989 WL 48478 (D.Kan. Apr. 25, 1989) (NO. CIV.A.88-2220-S). Ethical violations do not automatically trigger disqualification. Chapman Engineers v. Natural Gas Sales Co., 766 F.Supp. 949, 954 (D.Kan.1991). Because disqualification affects more than merely the attorney in question, the Court must satisfy itself that this blunt remedy serves the purposes behind the ethical rule in question. Koch v. Koch Indus., 798 F.Supp. 1525, 1530 (D.Kan.1992).

The Federal Rules of Civil Procedure permit disqualification of counsel as a sanction for violations of the Federal Rules. See Lelsz v. Kavanagh, 137 F.R.D. 646, 655 (N.D.Tex.1991). At its discretion, for violations of local rules, the Court can also apply the sanctions authorized under the Federal Rules of Civil Procedure. D.Kan. Local Rule 11.1(b), (c). In addition, the Court’s inherent power to disqualify counsel at its discretion is not supplanted by the federal rules. Chambers v. NASCO, Inc., 501 U.S. 32, 50, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991).

The Court must determine a motion to disqualify counsel by measuring the facts of the particular case. Beck v. Board of Regents of State of Kan., 568 F.Supp. 1107, 1110 (D.Kan.1983). The moving party must show proof that is more than mere speculation and sustains a reasonable inference of a violation. Koch, 798 F.Supp. at 1530-31. The essential issue is whether the alleged misconduct taints the lawsuit. Id. The Court should not disqualify unless “the offending attorney’s conduct threatens to ‘taint the underlying trial’ with a serious ethical violation.” Field v. Freedman, 527 F.Supp. 935, 940 (D.Kan.1981). Because the interests to be protected are critical to the judicial system, the Court should resolve doubts in favor of disqualification. Id. The Court must balance several factors, however, including society’s interest in ethical conduct, defendants’ right to choose their counsel, and the hardship which disqualification would impose on the parties and the entire judicial process. Lansing-Delaware Water Dist. v. Oak Lane Park, Inc., 248 Kan. 563, 571, 808 P.2d 1369, 1375 (1991).

FACTS

Plaintiffs research, develop and market medical products which are used to promote the healing of wound injuries. Defendants, who previously worked for plaintiffs, now work for plaintiffs’ rival. Plaintiffs filed suit on January 16, 1998, claiming that defendants acted wrongfully while employed by plaintiffs and revealed confidential information when they left. Defendants themselves filed suit in the Southern District of New York, shortly thereafter, alleging that their employer had committed various wrongful acts in the course of their employment.1 The court in New York transferred the second ease to this judicial district and this Court later consolidated the actions. On April 8, 1992, we entered an order which allowed Timothy Butler to appear pro hac vice, with Ruth Benien as local counsel.

In April of 1998, Butler contacted Tim Metz, former corporate secretary and legal counsel for plaintiffs, without the consent of plaintiffs’ counsel. As an officer of plaintiffs, Metz saw numerous confidential documents and information. He also reviewed and drafted legal documents and provided legal advice to plaintiffs. Butler asserts that he did not ask Metz any questions regarding Metz’s involvement in the case, and that he only attempted to set up Metz’s deposition.

In April of 1998, on two occasions, Butler also contacted Melanie Brown. Brown was the former personnel director for plaintiffs, and Butler contacted her to discuss dates for her deposition Plaintiffs claim that he did so [665]*665without the consent of plaintiffs counsel. Butler disagrees, asserting that he contacted plaintiffs’ counsel before contacting Brown.

Butler also contacted Sam Campbell, a former director at plaintiffs’ corporations, without the consent of plaintiffs’ counsel. Butler subpoenaed Campbell for a deposition but first called him on the telephone. Butler claims that he only discussed setting up a deposition. Campbell testified, however, that Butler discussed a letter in which Khos-rowshahi voiced concerns about plaintiffs’ operations during the time that he worked for plaintiffs. Campbell testified that Butler referred to the contents of the letter and made derogatory comments about high-ranking employees of plaintiffs.

Shortly after filing suit for defendants in New York, Butler contacted Marilyn Johnson, a former employee of plaintiffs. Johnson had worked as the executive administrative assistant for various high-ranking officers of plaintiffs: the president, the chief executive officer, the chairman of the board, and the chief financial officer. Khosrowshahi was her immediate supervisor. While employed for plaintiffs, Johnson maintained corporate files, customer lists, expense reports, grant submissions, and information about sales, accounts receivable, and pricing structures. While general faxes went to a fax machine in a general location, faxes for high-ranking employees went to a fax machine in Johnson’s office. Johnson received confidential faxes, opened confidential mail, pulled confidential information from files in her office, typed confidential correspondence, and had confidential information on computer disks. Johnson took to her home certain computer disks which contained information on sales, customer lists, medicare, and sales representatives’ agreement letters and logs. Both parties originally listed Johnson as a potential witness in the case.

Defendants requested vast documentation regarding plaintiffs’ operations. When plaintiffs turned over the documents, Butler learned that they were disorganized and unlabeled. Butler states that he contacted Johnson to help organize the documents. Johnson, however, claims that he contacted her before plaintiffs ever turned over the documents. Butler asserts that he did not ask Johnson the extent of her knowledge and experience about plaintiffs. Johnson testified that Butler did ask her about her knowledge, position and job tasks.

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181 F.R.D. 660, 42 Fed. R. Serv. 3d 581, 1998 U.S. Dist. LEXIS 16169, 1998 WL 724003, Counsel Stack Legal Research, https://law.counselstack.com/opinion/biocore-medical-technologies-inc-v-khosrowshahi-ksd-1998.