Kala v. Aluminum Smelting & Refining Co.

688 N.E.2d 258, 81 Ohio St. 3d 1
CourtOhio Supreme Court
DecidedJanuary 21, 1998
DocketNo. 96-1283
StatusPublished
Cited by117 cases

This text of 688 N.E.2d 258 (Kala v. Aluminum Smelting & Refining Co.) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kala v. Aluminum Smelting & Refining Co., 688 N.E.2d 258, 81 Ohio St. 3d 1 (Ohio 1998).

Opinions

Lundberg Stratton, J.

The issue before the court is whether a law firm should be automatically disqualified from representing a party when an attorney leaves his or her former employment with a firm representing a party and joins the law firm representing the opposing party, or whether that law firm may overcome any presumption of shared confidences by instituting effective screening mechanisms. Although this issue has been dealt with in many other jurisdictions, this is a case of first impression for Ohio. To fairly decide this issue, we must consider the Disciplinary Rules and Ethical Considerations in the Ohio Code of Professional Responsibility, competing public policy interests, and the guidance provided by federal case law.

I. FINAL APPEALABLE ORDER

As a preliminary matter, although not raised by counsel, we must decide whether this matter is a final appealable order. We conclude that it is, and adopt the well-reasoned decision in Stevens v. Grandview Hosp. & Med. Ctr. (Oct. 20, 1993), Montgomery App. No. 14042, unreported, 1993 WL 420127. See, also, Russell v. Mercy Hosp. (1984), 15 Ohio St.3d 37, 42-43, 15 OBR 136, 140-141, 472 N.E.2d 695, 698-700.

[4]*4II. ETHICAL PRINCIPLES

As a starting principle, a court has inherent authority to supervise members of the bar appearing before it; this necessarily includes the power to disqualify counsel in specific cases. Morgan v. N. Coast Cable Co. (1992), 63 Ohio St.3d 156, 161, 586 N.E.2d 88, 92.

A fundamental principle in the attorney-client relationship is that the attorney shall maintain the confidentiality of any information learned during the attorney-client relationship. A client must have the utmost confidence in his or her attorney if the client is to feel free to divulge all matters related to the case to his or her attorney.

DR 4-101, Preservation of Confidences and Secrets of a Client, sets forth the following requirements for an attorney-client relationship:

“(A) ‘Confidence’ refers to information protected by the attorney-client privilege under applicable law, and ‘secret’ refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client.

“(B) Except when permitted under DR 4-101(C), a lawyer shall not knowingly:

“(1) Reveal a confidence or secret of his client.

“(2) Use a confidence or secret of his client to the disadvantage of the client.

“(3) Use a confidence or secret of his client for the advantage of himself or of a third person, unless the client consents after full disclosure.” See, also, Canon 4 of the Code of Professional Responsibility.

The obligation of an attorney to preserve the confidences and secrets of the client continues even after the termination of the attorney’s employment. EC 4-6.1 In addition, DR 5-105 establishes when an attorney must refuse to accept or continue employment if the interests of another client may impair the independent professional judgment of the attorney and also speaks to imputed disqualification:

[5]*5“(A) A lawyer shall decline proffered employment if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, except to the extent permitted under DR 5-105(C).

" * * *

“(D) If a lawyer is required to decline employment or to withdraw from employment under DR 5-105, no partner or associate of his or his firm may accept or continue such employment. ” (Emphasis added.) See, also, American Bar Association Model Rules of Professional Conduct (1994), Rule 1.10; American Bar Association Standing Committee on Ethics and Professional Responsibility, Formal Opinion No. 33, 1931.

In addition, an attorney should avoid even the appearance of impropriety. Canon 9 of the Code of Professional Responsibility; see, also, DR 9-101. Because of the importance of these ethical principles, it is the court’s duty to safeguard the preservation of the attorney-client relationship. See Am. Can Co. v. Citrus Feed Co. (C.A.5, 1971), 436 F.2d 1125, 1128; Freeman v. Chicago Musical Instrument Co. (C.A.7, 1982), 689 F.2d 715, 721. In doing so, a court helps'to maintain public confidence in the legal profession and assists in protecting the integrity of the judicial proceeding. United States v. Agosto (C.A.8, 1982), 675 F.2d 965, 969.

When an attorney leaves his or her former employment and becomes employed by a firm representing an opposing party, a presumption arises that the attorney takes with him or her any confidences gained in the former relationship and shares those confidences with the new firm. This is known as the presumption of shared confidences. Some courts have held that such a change of employment results in an irrebuttable presumption of shared confidences that necessitates the disqualification of the attorney (primary disqualification) and the entire new firm (imputed disqualification). Cardona v. Gen. Motors Corp. (D.N.J.1996), 942 F.Supp. 968, 969; G.F. Industries, Inc. v. Am. Brands, Inc. (1990), 245 N.J.Super. 8, 583 A.2d 765.

III. CLIENT’S RIGHT TO CHOOSE COUNSEL

Balanced against the former client’s interest in preventing a breach of confidence is the public policy interest in permitting the opposing party’s continued representation by counsel of his or her choice. Disqualification interferes with a client’s right to choose counsel. Manning v. Waring, Cox, James, Sklar & Allen (C.A.6, 1988), 849 F.2d 222, 224. In Freeman, the court recognized the serious consequences of disqualification:

[6]*6“[Disqualification, as a prophylactic device for protecting the attorney-client relationship, is a drastic measure which courts should hesitate to impose except when absolutely necessary. A disqualification of counsel, while protecting the attorney-client relationship, also serves to destroy a relationship by depriving a party of representation of their own choosing.” Freeman, 689 F.2d at 721.

This issue has become increasingly important as the practice of law has changed. A review of the historical development of disqualification issues reveals the early conflicts created by the clash of the above principles.

IV. HISTORY OF MOTIONS TO DISQUALIFY

Many of the early disqualification cases arose out of charges of conflict of interest where government attorneys left the public service and went into private practice.2

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Cite This Page — Counsel Stack

Bluebook (online)
688 N.E.2d 258, 81 Ohio St. 3d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kala-v-aluminum-smelting-refining-co-ohio-1998.