International Business Machines Corp. v. Levin

579 F.2d 271
CourtCourt of Appeals for the Third Circuit
DecidedJune 19, 1978
DocketNos. 78-1064, 78-1065, 78-1074, 78-1113 and 78-1114
StatusPublished
Cited by62 cases

This text of 579 F.2d 271 (International Business Machines Corp. v. Levin) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Business Machines Corp. v. Levin, 579 F.2d 271 (3d Cir. 1978).

Opinion

OPINION OF THE COURT

MARIS, Circuit Judge.

This petition for a writ of mandamus and these appeals and cross-appeals seek our review of an interlocutory order of the United States District Court for the District of New Jersey entered in this private antitrust suit directing Carpenter, Bennett & Morrissey (herein “CBM”), counsel for the plaintiffs, Howard S. Levin (herein “Le-vin”) and Levin Computer Corporation (herein “LCC”), to withdraw from the case and allowing CBM to turn over its past work on the case to substitute counsel for the plaintiffs with consultation with such counsel to effect the turnover permitted for a period of sixty days.

The plaintiffs’ lawsuit against the International Business Machines Corporation (herein “IBM”), alleging violations of sections 1 and 2 of the Sherman Act, 15 U.S. C.A. §§ 1 and 2, and of the laws of the State of New Jersey, was filed about ten months after Levin caused LCC to be incorporated under the laws of New Jersey for the purpose, stated in the complaint, of engaging in the business of purchasing for lease certain data processing equipment manufactured by IBM, known as the 370 series or IBM fourth generation computer equipment. When IBM refused to extend installment credit to Levin and LCC on other than terms which the latter considered to be unfair and unreasonable, this action was filed, on June 23, 1972, in the Superior Court of New Jersey, Chancery Division, Essex County. The suit was subsequently removed to the district court.

The amended complaint filed in the district court asserts that IBM illegally perpetuates a monopoly position in the manufacture, distribution and ownership of computers and in particular of fourth generation or 370 series computers in New Jersey and throughout the United States by maintaining policies and practices which discourage sales of that equipment and force users to lease it directly from IBM at arbitrarily high rentals. The relief sought is an injunction against IBM’s further use of alleged anticompetitive and discriminatory practices with respect to the distribution of its fourth generation computers as well as damages, an order directing IBM to grant the plaintiffs installment credit on reasonable terms which would permit their purchase of the computers, related items and services and an order directing IBM to sell [275]*275its fourth generation computers to LCC by installment sale.

Shortly after the filing of the amended complaint, the plaintiffs applied to the district court for a preliminary injunction directing IBM to extend installment credit to LCC for the purchase of IBM computer equipment. The motion was denied. An appeal was taken to this court at our No. 72-1843 and on June 4, 1973, we entered an order affirming the district court’s decision.

In December 1973 the plaintiffs moved in the district court for partial summary judgment or in the alternative for a preliminary injunction ordering IBM to rent certain components of IBM computer equipment to LCC for integration into computers not owned by IBM. This motion also was denied by the district court. On appeal to this court at our No. 74-1304, we affirmed by an order entered October 31, 1974. Thereafter, both parties undertook extensive discovery in the district court and trial before the court was set for September 1977.

In June 1977 IBM moved for an order disqualifying CBM from further participation in the case on the ground that the law firm had represented both the plaintiffs and IBM during the pendency of the action in the district court in violation of the disciplinary rules of the Code of Professional Responsibility of the American Bar Association which had been adopted by the district court as the standards of ethical conduct which practitioners before the court are required to observe.

The district court, on the basis of depositions, affidavits and briefs filed with it and after hearing arguments of counsel for IBM and CBM and new counsel for the plaintiffs, disqualified CBM from further representation of the plaintiffs in the case but permitted CBM to turn over its past work product on the case to the plaintiffs’ new counsel and allowed consultation between CBM and the plaintiffs’ substitute counsel with respect thereto for a period of sixty days. The order of disqualification was entered in the district court by Judge Meanor December 28, 1977. An amended order which clarified CBM’s right to appeal from the order of disqualification was entered January 9, 1978. Since the latter contains all the significant provisions of the original order, we confine our discussion to it.

IBM petitioned this court for a writ of mandamus directing Judge Meanor to prohibit the turnover of CBM’s past work product and consultation between CBM and the plaintiffs’ substitute counsel for a period of sixty days following disqualification. IBM, in addition, appealed from the portions of the district court’s order which permit such turnover of work product and consultation. IBM also moved to stay the portions of the order concerning which it seeks review, to consolidate its appeals and petition for mandamus for review purposes and to expedite briefing.

CBM and the plaintiffs cross-appealed from the district court’s order disqualifying CBM. Their appeals raise questions concerning the applicability to CBM of the ban of the American Bar Association’s Code against a lawyer’s dual representation of adversaries and the appropriateness of the sanctions of disqualification and total withdrawal after sixty days in the circumstances of this case. CBM and the plaintiffs moved this court to dismiss IBM’s appeals and petition for mandamus for lack of jurisdiction and for IBM’s failure to demonstrate any prejudice or injury to its rights by reason of the portions of the order sought by it to be reviewed.

We granted the stay pending review requested by IBM, deferred IBM’s petition for mandamus and CBM’s motion to dismiss IBM’s appeals and petition for consideration with the merits of the appeals and cross-appeals, ordered consolidation of the related cases and directed an expedited schedule of briefing. The case has now been argued and is before us for decision.

We turn then to outline the facts out of which this controversy arose. It appears that CBM had represented both Levin and the corporation with which he was then associated, Levin Townsend Computer Corporation (herein “LTC”), a computer leasing corporation, from 1965 to 1969. From 1966 to 1969 CBM performed considerable work [276]*276for LTC including representing the corporation in several disputes with IBM in connection with IBM’s installment sale to LTC of IBM computer equipment. In January 1970 when Levin terminated his association with LTC, CBM withdrew as attorneys for LTC but continued to represent Levin sporadically in matters unrelated to LTC. In the latter part of 1971 CBM resumed an active attorney-client relationship with Levin. At that time CBM arranged for the incorporation of LCC on behalf of Levin. One of the firm’s partners, Stanley Weiss, became a director of LCC and another, David M. McCann, assumed the office of secretary of the corporation.

LCC’s effort in late 1971 and 1972 to secure installment credit on terms acceptable to it for the purchase of IBM equipment was handled by McCann dealing with Joseph W. S. Davis, Jr., counsel for IBM’s Data Processing Division located in White Plains, New York.

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

Related

Davila v. Peralta, Sr.
D. New Jersey, 2025
Sheppard, Mullin, Richter & Hampton, LLP v. J-M Mfg. Co.
425 P.3d 1 (California Supreme Court, 2018)
Bensel v. Allied Pilots Ass'n
675 F. Supp. 2d 493 (D. New Jersey, 2009)
Century Indemnity Co. v. Congoleum Corp.
426 F.3d 675 (Third Circuit, 2005)
Commonwealth Insurance v. Stone Container Corp.
178 F. Supp. 2d 938 (N.D. Illinois, 2001)
Rohm and Haas Co. v. American Cyanamid Co.
187 F. Supp. 2d 221 (D. New Jersey, 2001)
Essex County Jail Annex Inmates v. Treffinger
18 F. Supp. 2d 418 (D. New Jersey, 1998)
In Re Cleveland Trinidad Paving Co.
218 B.R. 385 (N.D. Ohio, 1998)
Essex Chemical Corp. v. Hartford Accident & Indemnity Co.
975 F. Supp. 650 (D. New Jersey, 1997)
ILA, Local Union 1332 v. ILA
909 F. Supp. 287 (E.D. Pennsylvania, 1995)
British Airways v. Port Authority of NY and NJ
862 F. Supp. 889 (E.D. New York, 1994)
Parkinson v. Phonex Corp.
857 F. Supp. 1474 (D. Utah, 1994)
Alexander v. Primerica Holdings, Inc.
822 F. Supp. 1099 (D. New Jersey, 1993)
Manufacturers Hanover v. Stamford Hotl., No. Cv91 0116971s (Nov. 4, 1992)
1992 Conn. Super. Ct. 11122 (Connecticut Superior Court, 1992)
Kaselaan & D'Angelo Associates, Inc. v. D'Angelo
144 F.R.D. 235 (D. New Jersey, 1992)
In Re Dresser Industries, Inc.
972 F.2d 540 (Fifth Circuit, 1992)

Cite This Page — Counsel Stack

Bluebook (online)
579 F.2d 271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-business-machines-corp-v-levin-ca3-1978.