Palumbo v. Tele-Communications, Inc.

157 F.R.D. 129, 1994 U.S. Dist. LEXIS 12786, 1994 WL 487862
CourtDistrict Court, District of Columbia
DecidedAugust 26, 1994
DocketCiv. A. No. 94-0245
StatusPublished
Cited by13 cases

This text of 157 F.R.D. 129 (Palumbo v. Tele-Communications, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Palumbo v. Tele-Communications, Inc., 157 F.R.D. 129, 1994 U.S. Dist. LEXIS 12786, 1994 WL 487862 (D.D.C. 1994).

Opinion

MEMORANDUM OPINION AND ORDER

SPORKIN, District Judge.

This matter comes before the Court on defendants’ motion to disqualify Stephen L. Snyder as counsel for the proposed plaintiff class. Also before the Court is defendants’ motion to dismiss.

On February 8, 1994, plaintiffs filed this class action employment discrimination suit against Tele-Communications, Inc. (“TCI”) and two of its senior officers. TCI is a Colorado-based company whose more than 300 subsidiaries and affiliates own and operate local cable television systems nationwide. Defendant John Malone is President and Chief Executive Officer of TCI and a major stockholder of that corporation. Defendant J.C. Sparkman is an Executive Vice President of TCI. The complaint alleges that TCI operated under a “system-wide employment policy of race-based disparate treatment” that was practiced “throughout [its] national system.” Amended Complaint at ¶¶ 3, 29. Plaintiffs have asked this Court to certify a nationwide class consisting of all past, present, and future black employees of, or applicants for employment with, TCI. Plaintiffs’ Motion for Class Certification at 1. The request for class certification covers “any job at any facility owned, managed, operated or otherwise existing under the control and authority of Defendant TCI. Id. at 2.

Motion to Disqualify

Defendants’ motion to disqualify plaintiffs’ counsel stems from the fact that plaintiffs’ lead counsel in this litigation, Mr. Stephen L. Snyder of the law firm of Stephen L. Snyder & Associates, was until recently a part owner of the Baltimore cable system and a director of its general partner. The Baltimore Cable system is an affiliate system of TCI. Defendants in their memorandum in support of the motion to disqualify outline the following facts:

From June 20, 1990 to September 15, 1993, Mr. Snyder served as a director of UCTC of Baltimore, Inc. UCTC of Baltimore, Inc. is, in turn, a general partner of United Cable Television of Baltimore Limited Partnership—the partnership that holds the cable franchise for the City of Baltimore.

Defendant TCI indirectly owns 75 percent of UCTC of Baltimore, Inc.

From February 15, 1990 to early 1993, either Mr. Snyder, as an individual, or his law firm owned a 7.8 percent limited partnership interest in UCTC of Baltimore, Inc.

The lawsuit filed on plaintiffs’ behalf by Mr. Snyder’s law firm alleges improprieties by TCI and all of its affiliates, specifically including the Baltimore affiliate on whose Board of Directors Snyder sat.

The complaint makes specific allegations of wrongdoing against four of Snyder’s co-directors on the UCTC of Baltimore, Inc. Board.

Defendants allege that Mr. Snyder’s position on the UCTC of Baltimore, Inc. Board placed him in an oversight role over the activities of the Baltimore cable franchise and also gave him access to proprietary and confidential information relating to the Baltimore cable system’s business practices, including employment nondiscrimination and affirmative action obligations. Defendants’ Memorandum in Support of Defendants’ Motion to Disqualify at 3-4.

As a basis for their motion to disqualify, defendants rely primarily on District of Columbia Rule of Professional Conduct 1.7(b)(4) which provides that a lawyer may not represent a client if that representation “will be or reasonably may be adversely affected” as a result of (1) “the lawyer’s own financial, business, property, or personal interests,” or (2) [131]*131the lawyer’s responsibilities to a third party.1 Defendants argue that Mr. Snyder has what can only be termed a “double-edged” conflict of interest. First, as a former director of one of TCI’s affiliates, he has a director’s duty of loyalty to that affiliate, and should not be permitted to act as plaintiffs’ counsel where he could perhaps use against TCI confidential information gleaned during the course of the director relationship. Second, if the Baltimore cable system did have corporate policies embracing racial discrimination while Mr. Snyder sat on the Board, then Snyder has a personal interest in steering “the litigation in such a way as to limit his own potential responsibility and exposure to the claims of third parties.” Memorandum in Support at 7. Defendants argue that the possibility that Mr. Snyder would tend to minimize his own personal culpability means that Mr. Snyder cannot adequately represent the members of the putative class. Mr. Snyder admits to a past ownership interest in the Baltimore cable franchise and to having sat on UCTC’s Board of Directors for a short time.

Mr. Snyder outlined how he came to own part of the cable franchise in an affidavit submitted to the Court on July 8, 1994. On February 15, 1990, Snyder obtained 788.04 Class A units of a limited partnership interest in the United Cable Television of Baltimore Limited Partnership. These units were paid to him as a legal fee, earned while representing two black plaintiffs against United Cable Television Corporation. See Elder, et al. v. United Cable Television Corporation, et al. No. 86218012/CE 53979 (Circuit Court for Baltimore City). United Cable was a Denver, Colorado based major cable system that had been granted the cable franchise for Baltimore. The case was settled in February, 1990, by which time TCI (the defendant in the instant case) had a controlling interest in United Cable. The settlement terms of the Elder case included the transfer of 2189 partnership units to the Elder plaintiffs. Mr. Snyder’s fee of 788.04 units was derived from the settlement. Included in the settlement was a provision by which Mr. Snyder and Mr. Elder were added to the Board of Directors of the general partner, UCTC of Baltimore, Inc. The agreement also allowed United Cable to add four more members to keep their two-thirds control.

According to Snyder’s affidavit, the Board of Directors of UCTC met only twice while Mr. Snyder was a Director; the meetings lasted no more than thirty minutes. The meetings which Mr. Snyder attended included only the election of officers, approval of the minutes of the last meeting and the discussion of audited financial statements. Snyder affidavit ¶¶ 9-12.

Decision

The Court has within its inherent supervisory power the discretionary authority to oversee the professional attitudes of lawyers who appear before it. Groper v. Taff, 717 F.2d 1415, 1418 (D.C.Cir.1983). This supervisory power includes the authority to disqualify counsel when appropriate. Motions to disqualify are committed to the trial court’s sound discretion. Id; E.E.O.C. v. Orson H. Gygi Co., Inc., 749 F.2d 620, 621 (10th Cir.1984); Trust Corp. of Montana v. Piper Aircraft Corp., 701 F.2d 85, 87 (9th Cir.1983).

In considering a motion to disqualify, the District Court is charged with evaluating all the relevant circumstances and evidence. The Court must decide the issue in a manner that does no violence to the administration of justice and simultaneously “main-taints] in the public mind a high regard for the legal profession.” Silver Chrysler Plymouth, Inc. v. Chrysler Motor Corp.,

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Cite This Page — Counsel Stack

Bluebook (online)
157 F.R.D. 129, 1994 U.S. Dist. LEXIS 12786, 1994 WL 487862, Counsel Stack Legal Research, https://law.counselstack.com/opinion/palumbo-v-tele-communications-inc-dcd-1994.