Equal Employment Opportunity Commission v. Hora, Inc. , 239 F. App'x 728 ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
6-29-2007
EEOC v. Hora Inc
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-5393
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-5393
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION;
MANESSTA BEVERLY,
Plaintiff/Intervenor in District Court
v.
HORA, INC. d/b/a DAYS INN; MARSHALL MANAGEMENT, INC.
JANA R. BARNETT,
Appellant pursuant to F.R.A.P. 12(a)
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 03-cv-01429)
District Judge: The Honorable Gene E.K. Pratter
Argued: May 21, 2007
Before: BARRY, CHAGARES and TASHIMA*, Circuit Judges.
(Filed June 29, 2007)
OPINION OF THE COURT
TASHIMA, Circuit Judge:
*Honorable A. Wallace Tashima, U.S. Circuit Judge for the Ninth Circuit, sitting by
designation.
Jana R. Barnett, Esq., appeals an order of the district court finding her in violation of
the Pennsylvania Rules of Professional Conduct (“PRPC” or “Rules”) and therefore
disqualifying her from representing Manessta Beverly in a lawsuit against Beverly’s former
employer, HORA, Inc., d/b/a Days Inn, and Marshall Management (together “Defendants”),
the management company for Days Inn. The Equal Employment Opportunity Commission
(“EEOC”) filed suit against Defendants, alleging that Beverly’s supervisor, Nelson Garcia,
created a sexually-hostile working environment by harassing Beverly and other female
employees, and that Defendants retaliated against Beverly by firing her when she complained
about Garcia’s conduct. The district court disqualified Barnett from representing Beverly
in the EEOC action, based on Barnett’s allegedly improper contact with another HORA
employee, Debbie Richardson.1 We have jurisdiction pursuant to 28 U.S.C. § 1291, and we
reverse.
I.
In reviewing an attorney disqualification issue, this court first exercises “plenary
review to determine whether the district court's disqualification was arbitrary – ‘the product
of a failure to balance proper considerations of judicial administration against the right to
counsel.’” United States v. Stewart, 185 F.3d 112, 120 (3d Cir. 1999) (quoting United States
v. Voigt, 89 F.3d 1050, 1074 (3d Cir. 1996)). If we conclude that the district court's decision
1
We assume without deciding that Richardson was neither a client of Barnett nor
consulted Barnett for the purpose of deciding whether to then become a client of hers.
2
was not arbitrary, we then determine whether the district court abused its discretion in
disqualifying the attorney. Id.II.
The district court relied primarily on Rule 4.2 of the PRPC in deciding to disqualify
Barnett.2 Rule 4.2 provides:
In representing a client, a lawyer shall not communicate about the subject of the
representation with a person the lawyer knows to be represented by another lawyer in
the matter, unless the lawyer has the consent of the other lawyer or is authorized to
do so by law or a court order.
PRPC 4.2. “The rationale behind Rule 4.2 is ‘to prevent . . . a represented party . . . [from]
be[ing] taken advantage of by adverse counsel; the presence of the party's attorney
theoretically neutralizes the contact.’” Inorganic Coatings, Inc. v. Falberg, 926 F. Supp. 517,
519 (E.D. Pa. 1995) (quoting Univ. Patents, Inc. v. Kligman, 737 F. Supp. 325, 327 (E.D. Pa.
1990)) (alterations in original); see also Carter-Herman v. City of Phila., 897 F. Supp. 899,
901 (E.D. Pa. 1995) (“The purpose of Rule 4.2 is to prevent lawyers from taking advantage
of uncounselled lay persons and to preserve the efficacy and sanctity of the lawyer-client
relationship.”). The explanatory comment provides that,
[i]n the case of a represented organization, this Rule prohibits communications with
2
We write only for the parties and therefore do not state the facts separately.
3
a constituent of the organization who supervises, directs or regularly consults with the
organization's lawyer concerning the matter or has authority to obligate the
organization with respect to the matter or whose act or omission in connection with
the matter may be imputed to the organization for purposes of civil or criminal
liability.
Id., cmt. 7. Rule 4.2, therefore, would have prohibited communication between Barnett and
Richardson if Richardson were an employee who regularly consulted with Defendants’
lawyer regarding the matter, or if she had authority to obligate Defendants with respect to the
matter, or if her acts in connection with the harassment claim could be imputed to Defendants
for liability purposes.
We conclude that Richardson’s role at Days Inn did not bring her within the scope of
Rule 4.2. “The underlying policy and Official Comment to the Rule [4.2] make clear that it
was intended to forbid ex parte communications with all institutional employees whose acts
or omissions could bind or impute liability to the organization or whose statements could be
used as admissions against the organization, presumably pursuant to Federal Rule of
Evidence 801(d)(2)(D).” Univ. Patents, 737 F. Supp. at 328; see also McCarthy v. Se. Pa.
Transp. Auth., 772 A.2d 987, 993 (Pa. Super. Ct. 2001) (“The key information needed by the
trial court to determine if an employee qualifies for protection from ex parte communication
with opposing counsel is what status that employee has within the employee's organization,
4
i.e., whether, by virtue of the employee's status, a statement made by this employee could
impute liability to the company.”). There is no evidence in the record to support the
conclusion that Richardson regularly consulted with Defendants’ lawyer regarding the matter
or that her acts or omissions could obligate or impute liability to Defendants with respect to
the matter.
Richardson’s role as an administrative assistant is different from that of the employees
in cases in which Rule 4.2 has been found to apply. For example, in Weeks v. Indep. Sch.
Dist. No. I-89, 230 F.3d 1201 (10th Cir. 2000), counsel for the plaintiff, a former bus driver
for a school district, engaged in ex parte communications, on matters relevant to the case,
with an operations supervisor for the school district and with the plaintiff’s immediate
supervisor. Both employees had managerial authority over issues in the underlying litigation
and could have made statements that would bind the school district and therefore came
within the scope of Rule 4.2 of the Oklahoma Rules of Professional Conduct.3 Id. at 1210-
11; see also Carter-Herman, 897 F. Supp. at 903 (examining “the written job descriptions of
the various ranks of the Philadelphia Police Department for the purpose of determining who
has managerial responsibility”); McCarthy, 772 A.2d at 993-94 (concluding that the trial
court erred in removing counsel where “the trial court did not make a finding of fact or even
state on the record that the witnesses were employees whose statements may constitute
admissions for the purposes of [Rule 4.2]”). Defendants, in fact, did not rely on Rule 4.2 in
3
Oklahoma Rule 4.2 is essentially the same as Pennsylvania’s.
5
their motion to disqualify Barnett because they conceded that Richardson had no managerial
authority in the company.4
Moreover, even if Richardson were covered by Rule 4.2, the district court did not
indicate how Defendants were prejudiced by Barnett’s communications with Richardson.
See Univ. Patents, 737 F. Supp. at 329 (stating that, “[i]n determining the proper sanction or
remedy [in the case of a Rule 4.2 violation], the court must consider the client’s right to be
represented by the counsel of his choice, as well as the opposing party’s right to prepare and
try its case without prejudice,” and concluding that there was “not sufficient evidence . . . to
conclude that plaintiff has been so severely prejudiced that the draconian measure of
disqualification of counsel” was warranted) (internal quotations omitted). Defendants
conceded at the hearing on the motion to disqualify Barnett that all of the information that
Barnett received from Richardson was disclosed during discovery. Because Defendants
accordingly were not prejudiced by Barnett’s communications with Richardson, the
draconian measure of disqualification was not warranted.
The district court’s reliance on Rule 4.4, which prohibits a lawyer from using methods
of obtaining evidence that violate the legal rights of a third person, similarly suffers from a
lack of evidence of prejudice to Defendants. To repeat, all of the evidence that Barnett
received from Richardson was produced during discovery, and there is no indication that
4
The EEOC also took the position that Rule 4.2 did not apply in these
circumstances.
6
Defendants were prejudiced by Barnett’s receipt of the evidence. Moreover, Barnett
specifically stated in her verified statement that she did not rely on information she had
received from Richardson regarding a conversation between Defendants and their counsel,
because Barnett knew that the information was privileged. There is no evidence to the
contrary. Nor is there evidence to support the district court’s conclusion that Barnett
encouraged Richardson to disclose to her all the information she learned through her
employment.5
The district court also relied on Rule 3.7, which forbids a lawyer from “act[ing] as
advocate at a trial in which the lawyer is likely to be a necessary witness.” PRPC 3.7(a).
The district court reasoned that Barnett’s testimony might be necessary to Defendants’ theory
of the case that the information provided to the EEOC resulted from Barnett’s “fueling” a
personal vendetta by a disgruntled Richardson, who was angry with management and did not
get along with her supervisor. If this was Defendants’ defense – that they did nothing wrong,
and that the EEOC claim was nothing more than a personal vendetta by Richardson – it is
possible that Barnett would be a necessary witness. However, it is highly unlikely that this
would be their defense, in light of the fact that Beverly and several other women named
numerous specific incidents of sexual harassment by Garcia and of management doing
nothing in response. Moreover, Rule 3.7 provides an exception if the disqualification of the
5
For substantially the same reasons, we conclude that Barnett’s conduct also did not
violate Rule 8.4.
7
lawyer would work substantial hardship on the client, an issue that the court barely discussed.
Because of the highly speculative nature of the theory that Barnett manipulated Richardson
into acting, and the hardship to Beverly of disqualifying her attorney, Rule 3.7 does not
provide a sufficient basis on which to disqualify Barnett.
For the foregoing reasons, we conclude that the district court abused its discretion in
imposing the severe sanction of disqualification.6
6
Because we reverse on the grounds set forth above, we need not reach Barnett’s
argument that Rule 4.2 is unconstitutionally vague.