Bottaro v. Hatton Associates

680 F.2d 895, 1982 U.S. App. LEXIS 18764
Court of Appeals for the Second Circuit·Decided June 2, 1982·No. No. 955, Docket 82-7025·Published·Cited by 22 cases

Opinion

WINTER, Circuit Judge:

Plaintiffs appeal from an Order of the United States District Court, for the Eastern District of New York, Edward R. Neaher, J., disqualifying the firm of Finkelstein, Thompson & Levenson (FT&L) from representing plaintiffs in this securities fraud action, 528 F.Supp. 1116. Judge Neaher or[896] dered FT&L disqualified in light of Disciplinary Rule DR5-102(A) of the American Bar Association (ABA) Code of Professional Responsibility, the so-called lawyer-witness rule. We reverse.

BACKGROUND

Plaintiffs, holders of limited partnership interests in defendant Hatton Associates, filed their complaint on August 31, 1979, alleging violation of various provisions of the federal securities laws. The crux of the complaint is that defendants induced plaintiffs to purchase their interests by falsely representing that Hatton Associates was operating a coal mine. FT&L have been their attorneys of record throughout this litigation.

One of the plaintiffs, Alfred P. Bergner, a tax lawyer, entered into discussions in the fall of 1979 with FT&L concerning possible affiliation with the firm. On January 1, 1980, he became “of counsel” to FT&L. On January 1, 1981, he became a member of the firm.

On April 24, 1981, Bergner was deposed in this action. He testified that defendant Morris Silver admitted to him that Hatton Associates knew the mine was not operating at the relevant time. Silver has denied these statements. On August 14, 1981, almost four months after Bergner’s deposition and near the end of the discovery stage of the case, defendants moved to disqualify FT&L as attorneys for plaintiffs. Judge Neaher granted the motion.

At the outset he ruled that any doubt should be resolved “in favor of disqualification.” 528 F.Supp. at 1117. He noted that Bergner was “(1) a plaintiff, (2) a partner in plaintiffs’ law firm, and (3) a potential witness” who ought to be called. Id. at 1117. Conceding that “plaintiffs’ right to freely choose counsel is of paramount importance,” id. at 1118, Judge Neaher nevertheless deemed this right outweighed by the need to maintain “the ethical integrity of the Bar.” Id. He found a threat to that integrity in “plaintiffs’ trial advocate [being] placed in the objectionable position of arguing the credibility of an attorney in his firm.” Id. at 6. He concluded that the lawyer-witness rule disqualified FT&L from representing any plaintiffs in this litigation. Id. at 1119.

DISCUSSION

On appeal, defendants advance a position substantially different from that taken in the District Court. Their motion to disqualify FT&L applied to its representation of all plaintiffs, including Bergner. On appeal, defendants now concede Bergner’s right as a party plaintiff to select his own counsel, including FT&L.1 Since FT&L’s presence in the litigation is now conceded at least as to representation of one plaintiff, the issue before us is radically different from that raised by the motion before Judge Neaher.

Before turning to that issue, however, we note that Judge Neaher did not apply the correct test for disqualification of counsel. This Court has adopted “a restrained approach,” Armstrong v. McAlpin, 625 F.2d 433, 444 (2d Cir. 1980), which calls for disqualification only upon a finding that the presence of a particular counsel will taint the trial by affecting his or her presentation of a case. Board of Education v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979); McAlpin, 625 F.2d at 444-446. We have conceded that this test will not “correct all possible ethical conflicts,” McAlpin, 625 F.2d at 445, but have also noted that this laudable goal cannot be attained through rulings in the course of litigation without inviting the wholesale filing of motions for tactical reasons. The result would be needless disruption and delay of litigation, thereby impairing the efficient administration of justice. See id. at 438, 446. Where a threat of tainting the trial does not exist, therefore, the litigation should proceed, the [897] remedy for unethical conduct lying in the disciplinary machinery of the state and federal bar. Id.

The present case demonstrates the inadvisability of encouraging motions to disqualify. The motion was filed late in the discovery stage and well after defendants knew of Bergner’s possible testimony. They now concede that at least in one critical aspect their motion was baseless, a concession we regard as dispositive as to its entirety. Nevertheless, months of delay in the progress of this litigation has resulted.

Defendants’ concession as to Bergner’s right to choose to be represented by FT&L is well taken in light of 28 U.S.C. § 1654 (1976),2 and our decision in International Electronics Corp. v. Flanzer, 527 F.2d 1288, 1295 (2d Cir. 1975). Members of the bar have, like all litigants, a right to select their own counsel. While the right may not be absolute, it can be overridden only where compelling reasons exist.

Free access — add to your briefcase to read the full text and ask questions with AI

Bottaro v. Hatton Associates, 680 F.2d 895, 1982 U.S. App. LEXIS 18764 (2d Cir. 1982).

680 F.2d 895 (Bottaro v. Hatton Associates) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Ardemasov v. Citibank, N.A.
14 F. Supp. 3d 39 (D. Connecticut, 2014)
Lankler Siffert & Wohl, LLP v. Rossi
287 F. Supp. 2d 398 (S.D. New York, 2003)
Farrington v. Law Firm of Sessions, Fishman
674 So. 2d 448 (Louisiana Court of Appeal, 1996)
DeCamp v. Douglas County Franklin Grand Jury
752 F. Supp. 340 (D. Nebraska, 1990)
Liess v. General Electric Co.
659 F. Supp. 979 (N.D. Illinois, 1987)
Culebras Enterprises Corp. v. Rivera Rios
660 F. Supp. 540 (D. Puerto Rico, 1987)
Huntington v. Great Western Resources, Inc.
655 F. Supp. 565 (S.D. New York, 1987)
Mansur v. Drage
484 So. 2d 618 (District Court of Appeal of Florida, 1986)
Chaudhry v. Ksenzowski (In Re Ksenzowski)
56 B.R. 819 (E.D. New York, 1985)
In Re the Civil Contempt Proceedings Concerning Richard
373 N.W.2d 429 (South Dakota Supreme Court, 1985)
Skeen v. Chase Manhattan Bank
768 F.2d 1194 (Tenth Circuit, 1985)
Hicks v. State
468 So. 2d 1045 (District Court of Appeal of Florida, 1985)
Elizabeth D. Duncan v. David B. Poythress
750 F.2d 1540 (Eleventh Circuit, 1985)
Freschi v. Grand Coal Venture
564 F. Supp. 414 (S.D. New York, 1983)
Bottaro v. Hatton Associates
680 F.2d 895 (Second Circuit, 1982)