United States ex rel. Bahsen v. Boston Scientific Neuromodulation Corp.

147 F. Supp. 3d 239, 2015 U.S. Dist. LEXIS 160030, 2015 WL 7720485
CourtDistrict Court, D. New Jersey
DecidedNovember 30, 2015
DocketCivil Action No. 11-1210
StatusPublished
Cited by3 cases

This text of 147 F. Supp. 3d 239 (United States ex rel. Bahsen v. Boston Scientific Neuromodulation Corp.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Bahsen v. Boston Scientific Neuromodulation Corp., 147 F. Supp. 3d 239, 2015 U.S. Dist. LEXIS 160030, 2015 WL 7720485 (D.N.J. 2015).

Opinion

OPINION

Hon. Madeline Cox Arleo, United States District Judge

This matter comes before the Court on Defendant Boston Scientific Neuromodulation Corporation’s (“Boston Scientific”) appeal of Magistrate Judge Steven C. Mann-ion’s decision denying Boston Scientific’s Motion to Disqualify Blank Rome, Plaintiffs counsel, for an imputed former client conflict under New Jersey Rules of Professional Conduct 1.10 and 1.9. The central dispute concerns whether an attorney who is held by a law firm out as having a general and continuing relationship with it is “associated with” that firm for conflicts purposes under Rule 1.10. The Court finds the attorney here is associated with the firm, and so reverses the magistrate judge’s decision.

I. Background

In this case, relators Wendy Bahnsen and Carolina Fuentes allege that Boston Scientific perpetrated a fraudulent billing scheme and defrauded various health care programs from 2006 through the present. Both relators claim that they were unlawfully terminated because they complained to management about the fraudulent billing.

Ritu Hasan was employed as in-house corporate, counsel and compliance counsel for Boston Scientific from March 2009 through February 2011. While employed there, she was engaged in internal investigations conducted by Boston Scientific in direct response to many of the allegations made by relators here regarding billing improprieties and retaliation. She was also involved in crafting Boston Scientific’s findings and strategies to respond to these allegations. Ms. Hasan subsequently left Boston Scientific and began work at an unnamed client (“Client”) of Blank Rome in April 2011. In April 2013, the Client approached Blank Rome and requested assistance with a personnel matter. Allison Friend Deck, Dkt. No. 164-1. On September 10, 2013, Blank Rome hired Ms. Hasan and immediately “seconded” her back to the client. Friend Dep. Tr. 26:8. Blank Rome and the Client executed a Secondment Agreement, which provided that Ms. Hasan “shall not continue to work on behalf of the Firm during the Term” of the secondment.

On March 3, 2013, relators, represented by Blank Rome, brought this case against Boston Scientific. Compb, Dkt. No. 1. In early 2014, Boston Scientific discovered that Ms. Hasan had been hired by Blank Rome as an associate in its Los Angeles office. Boston Scientific de'manded Blank Rome’s withdrawal from the case due to former client conflicts under Rules 1.9 and 1.10. Blank Rome declined to withdraw.

Boston Scientific’s motion to disqualify was heard by Magistrate Judge Mannion on March 17, 2015. Hr’g Tr., Dkt. No. 174. During that hearing, Magistrate Judge Mannion read into the record his opinion denying Boston Scientific’s motion to disqualify. Tr. 23:21-34:6. Ms. Hasan was disqualified from representing Plaintiffs under Rule 1.9. She had worked as in-house counsel for Defendant Boston Scientific [243]*243from March 2009 to February 2011. Tr. 29:2-4. The current matter is substantially related to prior matters of Ms. Hasan’s, Magistrate Judge Mannion found, because Ms. Hasan (1) “worked on matters that involved similar allegations by. 5 relators concerning billing improprieties and retaliations” which had facts “relevant and material to the instant matter;” (2) she was “involved with Boston Scientific’s internal investigation regarding many of the same allegations as in this suit;” and (3) “her name appears on privilege logs [produced] in the instant case where she is listed as a participant in privileged communications regarding relators and many of their allegations.” Tr. 29:8-24. Plaintiffs’ interest is clearly adverse to Boston Scientific’s interests. Tr. 29:24-30:1.

Next, Magistrate Judge Mannion'found that Ms. Hasan’s conflict could not bp imputed to Blank Rome because, .under Rule 1.10, she was not “associated with” the firm. In his analysis, the magistrate judge applied New Jersey Superior Court Advisory Committee on Profession Ethics Opinion Number 632’s standard; .which establishes that association between a temporary lawyer and a law firm turns on a functional analysis of the facts and circumstances involved. Tr. 31:1-23. Conducting this functional analysis, the magistrate judge concluded that Ms. Hasan did not have access to confidential information. Tr. 32:1-23. There was also no evidence of a risk of improper disclosure. Tr. 32:24-33:21. As a result, the magistrate'judge found that Ms. Hasan’s conflict could not be imputed to the firm. He did not analyze whether Blank Rome had, or held out itself as having, a general and continuing relationship with Ms. Hasan.

Boston Scientific now appeals the magistrate judge’s decision and seeks to disqualify Blank Rome from representation of Plaintiffs based on an imputed conflict under Rule 1.10.

II. Legal Standard

A. Standard of Review of Magistrate Decision

A district court judge may only reverse a magistrate judge’s opinion on pretrial matters if it is . “clearly erroneous or contrary to law.” Fed. R. Civ. P. 72(a); L. Civ. R. 72.1(c)(1)(A); see also Exxon Corp. v. Halcon Shipping Co., Ltd., 156 F.R.D. 589, 591 (D.N.J.1994). A finding is' clearly erroneous when “although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” South Seas Catamaran, Inc. v. M/V Leeway, 120 F.R.D. 17, 21 (D.N.J.1988); see also United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). A ruling is contrary to law if the magistrate judge has misinterpreted or misapplied applicable law. Gunter v. Ridgewood Energy Corp., 32 F.Supp.2d 162, 164 (D.N.J.1998).

B. Motions to Disqualify

“The district court’s power to disqualify an attorney derives from its inherent authority to supervise the professional conduct of attorneys appearing before it.” United States v. Miller, 624 F.2d 1198, 1201 (3d Cir.1980); accord In re Corn Derivatives Antitrust Litig., 748 F.2d 157, 161 (3d Cir.1984). “As a general rule, the exercise of .this authority is committed to the sound discretion of the district court. . ." Miller, 624 F.2d at 1201.

Although motions to disqualify a party’s counsel are viewed with disfavor and parties seeking to disqualify opposing counsel carry “a heavy burden and must satisfy a high standard of proof,” any “doubts are to be resolved in favor of disqualification.” Essex Chem. Corp. v. [244]*244Hartford Accident & Indem. Co., 993 F.Supp. 241, 246 (D.N.J.1998) (citations omitted). When deciding motions to disqualify, courts “must balance the hardships to the client whose lawyer is sought to be disqualified against the potential harm to the adversary should the attorney be permitted to proceed.” Id. at 254 (citations omitted). Courts, must also consider their “obligation to preserve high professional standards and the integrity of the proceedings.” Id. (citations omitted).

C. Relevant Ethical Rules

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147 F. Supp. 3d 239, 2015 U.S. Dist. LEXIS 160030, 2015 WL 7720485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-bahsen-v-boston-scientific-neuromodulation-corp-njd-2015.