SER Verizon West Virginia v. Hon. James A. Matish, Judge, etc. , 230 W. Va. 489 ( 2013 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2013 Term
FILED
March 7, 2013
released at 3:00 p.m.
RORY L. PERRY II, CLERK
No. 12-1209 SUPREME COURT OF APPEALS
OF WEST VIRGINIA
STATE OF WEST VIRGINIA EX REL. VERIZON WEST VIRGINIA, INC.;
ANDREA L. CUSTIS; VICTORIA L. BOSTON; ROBERT ANDERSON;
JUDY ISNER; MARY FREDERICK; DAWN WATSON;
BARBARA TERWILLIGER; AND JODI DENNIS,
Petitioners
V.
HONORABLE JAMES A. MATISH,
JUDGE OF THE CIRCUIT COURT OF HARRISON COUNTY;
STEPHANIE SNOW-MCKISIC; RITA L. KNIGHT;
DANNY KNIGHT, SR.; DAVID MICHAEL BROSIUS;
DANNY KNIGHT, JR.; SARAH KNIGHT; RYAN P. BARKER;
LYNET WHITE; KIMBERLY A. RAY; JEFFREY L. RAY;
LISA M. THARP; TRAVIS N. THARP, AND
CHARLES R. BYARD,
Respondents
Petition for a Writ of Prohibition
WRIT DENIED
Submitted: February 5, 2013
Filed: March 7, 2013
Richard W. Gallagher Larry J. Rector
E. Ryan Kennedy Amy M. Smith
Robinson & McElwee, PLLC Steptoe & Johnson PLLC
Clarksburg, West Virginia Bridgeport, West Virginia
Thomas E. Spahn, Pro Hac Vice Attorneys for the Respondents,
McGuireWoods LLP Plaintiff Employees Below
Tysons Corner, Virginia
Jonathan P. Harmon, Pro Hac Vice
Tennille J. Checkovich, Pro Hac Vice
McGuireWoods LLP
Richmond, Virginia
Attorneys for the Petitioners
G. Thomas Smith
Smith, McMunn & Glover PLLC
Clarksburg, West Virginia
Attorney for Corby Miller,
Co-Defendant Employer Below
JUSTICE DAVIS delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “A party aggrieved by a lower court’s decision on a motion to
disqualify an attorney may properly challenge the lower court’s decision by way of a petition
for a writ of prohibition.” Syllabus point 1, State ex rel. Bluestone Coal Corp. v. Mazzone,
226 W. Va. 148, 697 S.E.2d 740 (2010).
2. “A circuit court, upon motion of a party, by its inherent power to do
what is reasonably necessary for the administration of justice, may disqualify a lawyer from
a case because the lawyer’s representation in the case presents a conflict of interest where
the conflict is such as clearly to call in question the fair or efficient administration of justice.
Such motion should be viewed with extreme caution because of the interference with the
lawyer-client relationship.” Syllabus point 1, Garlow v. Zakaib, 186 W. Va. 457, 413 S.E.2d
112 (1991).
3. Pursuant to Rule 1.7(b) of the West Virginia Rules of Professional
Conduct, a lawyer may represent a client even though there appears to be a conflict between
the interests of the client and the lawyer him/herself if the lawyer reasonably believes that
his/her representation will not be affected thereby and if the client, who has been informed
of the conflict, agrees to continued representation.
i
4. Rule 1.9(b) of the West Virginia Rules of Professional Conduct has
three primary objectives: (1) to safeguard the sanctity of the attorney-client relationship and
the confidential information that is shared by a client during the course of an attorney-client
relationship; (2) to protect from disclosure the confidential information revealed by a client
to his/her attorney during the course of an attorney-client relationship; and (3) to prohibit an
attorney from using such confidential information adversely to his/her former client.
5. Pursuant to Rule 5.6 of the West Virginia Rules of Professional
Conduct, a protective order or confidential settlement agreement may not be construed or
enforced to preclude an attorney from representing a client in a subsequent matter involving
similar facts and/or parties based solely upon the attorney’s obligations to maintain the
confidentiality of information subject to such protective order or confidential settlement
agreement.
ii
Davis, Justice:
The petitioners herein, Verizon West Virginia, Inc., and various of its
employees (hereinafter collectively “Verizon”),1 request this Court to issue a writ of
prohibition to prevent the Circuit Court of Harrison County from enforcing its August 24,
2012, and October 1, 2012, orders. By the August order, the circuit court permitted Steptoe
& Johnson PLLC (hereinafter “Steptoe”), counsel for the individual respondents herein,2 to
continue in its representation of the Plaintiff Employees in their wrongful termination cases
against Verizon. In its October order, the circuit court refused Verizon’s motion for
clarification and/or reconsideration of its August order. Before this Court, Verizon requests
the issuance of a writ of prohibition disqualifying Steptoe as counsel for the Plaintiff
Employees based upon Steptoe’s prior representation of other former employees of Verizon
in substantially related matters that were settled and dismissed. Upon a review of the parties’
arguments, the appendix record, and the pertinent authorities, we deny the requested writ of
prohibition. In summary, we find that Verizon is not entitled to prohibitory relief because
1
The individual employees referred to in this opinion collectively as “Verizon”
are managerial and similarly-positioned employees of Verizon who were named as
defendants in the underlying wrongful termination proceedings. An additional defendant
from the proceedings below, Corby Miller, has filed a response in the case sub judice taking
no position as to the propriety of the writ of prohibition requested by Verizon herein.
2
The individually named respondents are former employees of Verizon who
have filed wrongful termination claims against Verizon based upon alleged violations of the
West Virginia Human Rights Act, W. Va. Code § 5-11-1 et seq. They all have retained
attorneys from the Steptoe law firm to represent them in those proceedings. For ease of
reference, these respondents will be referred to collectively as the “Plaintiff Employees.”
1
Steptoe’s successive representation of its former and current clients does not constitute a
conflict of interest under either Rule 1.7 or Rule 1.9 of the West Virginia Rules of
Professional Conduct. Moreover, the relief requested by Verizon would impermissibly
restrict Steptoe’s right to practice law in contravention of West Virginia Rule of Professional
Conduct 5.6.
I.
FACTUAL AND PROCEDURAL HISTORY
The facts underlying this original jurisdiction proceeding are straightforward
and not disputed by the parties. In 2009, Steptoe filed a lawsuit (hereinafter “Rowh”) against
Verizon on behalf of a former Verizon employee alleging wrongful termination and violation
of the West Virginia Human Rights Act, W. Va. Code § 5-11-1 et seq. Thereafter, in 2010,
Steptoe filed a similar lawsuit (hereinafter “Radcliff”) on behalf of another Verizon
employee. Both of these individuals had worked at Verizon’s call center in Clarksburg, West
Virginia.
During the course of the Rowh litigation, the parties entered into an agreed
protective order to secure the confidentiality of certain documents disclosed in discovery.
A similar agreed protective order was entered in the Radcliff proceedings, with the additional
stipulation that documents produced in Rowh, and subject to the protective order therein,
2
nevertheless could also be used in Radcliff in an effort to avoid unnecessary costs of
duplication. In essence, the protective orders restricted the use of the confidential
information subject thereto to the proceedings in which the documents were produced;
prohibited their use for other purposes (with the exception of the caveat in Radcliff); and,
required that, upon the conclusion of the litigation, the documents must be returned to their
producer or may be retained as long as their continued confidentiality is ensured. The orders
did, however, permit the disclosure of the protected information in response to a court order
or as required by operation of law.3 Although the terms of the protective orders were drafted
primarily by Steptoe, it appears that counsel for Verizon also contributed substantially to the
language ultimately used.
Both the Rowh and Radcliff lawsuits were resolved through the entry of
confidential settlement agreements. The terms of these agreements prohibited the parties
from divulging the nature, substance, or amount of the settlements and further prohibited the
plaintiff employees from disparaging Verizon in the future. As with the agreed protective
orders, the confidential settlement agreements further permitted the parties to reveal
protected information as necessary to comply with a court order or other obligation imposed
3
See Section III.A.2, infra, for further treatment of the Rowh and Radcliff
agreed protective orders.
3
by law.4 Upon the conclusion of these cases, Steptoe decided to retain the documents
safeguarded by the agreed protective orders subject to its continuing duty to maintain their
confidentiality and guard against their further use or disclosure.
While the Radcliff litigation was concluding, Steptoe filed lawsuits on behalf
of nine other former Verizon employees, the Plaintiff Employees herein, who also had
worked at its Clarksburg call center, alleging that Verizon had engaged in employment
discrimination against them based upon their disabilities or perceived disabilities. Steptoe
additionally filed two class action lawsuits alleging the same claims. Thereafter, the circuit
court consolidated all of these cases. During the beginning stages of the current lawsuits, Mr.
Rector, a Steptoe attorney who had represented the plaintiffs in the two prior, settled cases
against Verizon, indicated that he might use some of the documents produced in discovery
in the Rowh proceedings in the current cases. It appears that Mr. Rector believed that the
parties would enter an agreed protective order in the current lawsuits similar to the one
entered in the Radcliff case that had permitted the parties to use the Rowh discovery in the
Radcliff case to avoid the substantial costs of duplication. Verizon, however, did not agree
to the entry of a protective order with provisions similar to those contained in the Radcliff
4
For further discussion of the Rowh and Radcliff confidential settlement
agreements, see Section III.A.2, infra.
4
order.5 On September 28, 2011, Verizon moved for Steptoe’s disqualification as the Plaintiff
Employees’ counsel based upon Mr. Rector’s stated intention to use the Rowh discovery
documents in his representation of the Plaintiff Employees and his additional indication that
he might call the former plaintiff employees as witnesses in the current Plaintiff Employees’
cases.6 Steptoe responded to Verizon’s motion, attaching an affidavit from attorney Rector
in which he vowed that he has not violated any of the confidential provisions of the agreed
protective orders or confidential settlement agreements and that he had not planned to use
information obtained in the two earlier cases unless and until it is produced in the current
cases. Steptoe also attached affidavits to its response from each of the Plaintiff Employees
in the current cases in which they stated that they understood that Mr. Rector’s representation
of them may be limited by his prior representation of the initial two plaintiff employees in
the Rowh and Radcliff cases but that they nevertheless want to continue to be represented by
Steptoe.
5
Nevertheless, it appears that the circuit court entered an agreed protective
order in the cases sub judice on November 14, 2011, and that several documents that had
been produced in the prior litigation have been produced again in the current litigation
subject to this protective order.
6
It appears, though, that the parties nevertheless commenced discovery in the
new cases and that Mr. Rector referred to Bates numbers of documents he had obtained
during the Rowh discovery. Without objecting to such references, Verizon responded to said
discovery requests, also with Bates number references. Neither party, however, disclosed the
contents or substance of the referenced documents.
5
The circuit court held a hearing on Verizon’s disqualification motion. By order
entered February 24, 2012, the circuit court held in abeyance its ruling on Verizon’s
disqualification motion until Steptoe had consulted with the Rowh and Radcliff plaintiffs and
obtained their consent to its continued representation of the Plaintiff Employees. In
summary, the circuit court addressed its concerns regarding a potential conflict of interest
under Rule 1.7(b) of the West Virginia Rules of Professional Conduct,7 which prohibits an
attorney from representing a client where such representation would be materially limited by
the attorney’s obligations to a former client. However, the circuit court found Steptoe was
not disqualified on this basis because Mr. Rector and the Plaintiff Employees had submitted
affidavits allaying these concerns and reflecting the Plaintiff Employees’ consent to
continuing representation by Steptoe in the current lawsuits.
Next, the circuit court considered Rule 1.9,8 which requires an attorney wishing
to represent a subsequent client in a substantially related matter in which the interests of the
former and subsequent clients are materially adverse to consult with and obtain the consent
of the former clients before continuing with such representation. Because Steptoe had
neither consulted with its former plaintiff employee clients nor obtained their consent to its
7
See Section III.A., infra, for the text of Rule 1.7 of the West Virginia Rules
of Professional Conduct.
8
For the text of West Virginia Rule of Professional Conduct 1.9, see infra
Section III.B.
6
continued representation of the Plaintiff Employees, the circuit court held its ruling on
Verizon’s motion to disqualify in abeyance for twenty days to permit Steptoe to consult with
its former clients and obtain their consent to the continued representation.
Finally, the circuit court contemplated Steptoe’s argument that disqualifying
it from representing the Plaintiff Employees would violate Rule 5.6(b)9 and expressed its
concern that granting Verizon’s disqualification motion might infringe upon attorney
Rector’s right to practice law.
Steptoe thereafter filed a motion requesting the circuit court to reconsider its
rulings. However, Steptoe did not obtain or file consents from its two former clients as
directed by the circuit court in its February 24, 2012, order. By order entered August 14,
2012, the circuit court granted Verizon’s motion to disqualify Steptoe as the Plaintiff
Employees’ counsel based upon Steptoe’s failure to obtain its former clients’ consent to its
continued representation of the Plaintiff Employees. In its order, the circuit court granted
Steptoe an additional ten days within which to obtain such consents in order to avoid
disqualification. On August 20, 2012, Steptoe filed consents from its two former clients
agreeing to Steptoe’s representation of the current Plaintiff Employees. As a result, the
9
See Section III.C., infra, for the text of Rule 5.6 of the West Virginia Rules
of Professional Conduct.
7
circuit court, by order entered August 24, 2012, denied Verizon’s motion to disqualify
Steptoe as counsel for the Plaintiff Employees. Verizon then filed a motion requesting the
circuit court to clarify or reconsider its ruling, which motion the circuit court denied by order
entered October 1, 2012. From these adverse rulings, Verizon now seeks a writ of
prohibition from this Court.
II.
STANDARD FOR ISSUANCE OF WRIT
Verizon requests this Court to issue a writ of prohibition to prevent the Circuit
Court of Harrison County from enforcing its August 24, 2012, order permitting Steptoe to
continue its representation of the Plaintiff Employees. We previously have held that “[a]
party aggrieved by a lower court’s decision on a motion to disqualify an attorney may
properly challenge the lower court’s decision by way of a petition for a writ of prohibition.”
Syl. pt. 1, State ex rel. Bluestone Coal Corp. v. Mazzone, 226 W. Va. 148, 697 S.E.2d 740(2010). Nevertheless, prohibition remains an extraordinary remedy, and “[a] writ of
prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only
issue where the trial court has no jurisdiction or having such jurisdiction exceeds its
legitimate powers. W. Va. Code 53-1-1.” Syl. pt. 2, State ex rel. Peacher v. Sencindiver,
160 W. Va. 314, 233 S.E.2d 425 (1977). The following factors guide our consideration of
the propriety of prohibitory relief in a particular case:
8
In determining whether to entertain and issue the writ of
prohibition for cases not involving an absence of jurisdiction but
only where it is claimed that the lower tribunal exceeded its
legitimate powers, this Court will examine five factors: (1)
whether the party seeking the writ has no other adequate means,
such as direct appeal, to obtain the desired relief; (2) whether the
petitioner will be damaged or prejudiced in a way that is not
correctable on appeal; (3) whether the lower tribunal’s order is
clearly erroneous as a matter of law; (4) whether the lower
tribunal’s order is an oft repeated error or manifests persistent
disregard for either procedural or substantive law; and (5)
whether the lower tribunal’s order raises new and important
problems or issues of law of first impression. These factors are
general guidelines that serve as a useful starting point for
determining whether a discretionary writ of prohibition should
issue. Although all five factors need not be satisfied, it is clear
that the third factor, the existence of clear error as a matter of
law, should be given substantial weight.
Syl. pt. 4, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996). With these
guidelines in mind, we will consider whether Verizon is entitled to the writ of prohibition it
has requested from this Court.
III.
DISCUSSION
In the underlying proceedings, the circuit court denied Verizon’s motion to
disqualify Steptoe from representing its current clients, the Plaintiff Employees, in their
pending wrongful termination case despite Steptoe’s prior representation of former clients
who alleged the same claims against the same employer, Verizon. We previously have held
that
9
[a] circuit court, upon motion of a party, by its inherent
power to do what is reasonably necessary for the administration
of justice, may disqualify a lawyer from a case because the
lawyer’s representation in the case presents a conflict of interest
where the conflict is such as clearly to call in question the fair
or efficient administration of justice. Such motion should be
viewed with extreme caution because of the interference with
the lawyer-client relationship.
Syl. pt. 1, Garlow v. Zakaib, 186 W. Va. 457, 413 S.E.2d 112 (1991). In denying Verizon’s
motion to disqualify Steptoe, the circuit court found that Steptoe’s representation of its
former and current clients did not present a conflict of interest under either Rule 1.7 or 1.9
of the West Virginia Rules of Professional Conduct where both the former and current clients
consented, after consultation, to Steptoe’s continued representation of its current clients, the
Plaintiff Employees. The circuit court also expressed concern that the disqualification of
Steptoe would constitute an impermissible restriction on the right to practice law in
contravention of West Virginia Rule of Professional Conduct 5.6. We will examine each of
these rules to determine whether Verizon is entitled to the writ of prohibition it has requested
in this case.10
10
We would be remiss if we did not note that, following oral argument of this
case, Steptoe counsel for the Plaintiff Employees moved to file a supplemental brief in
response to the Court’s inquiry as to why Steptoe had not sought extraordinary relief from
this Court when first faced with Verizon’s motion to disqualify Steptoe. The supplemental
brief explains that Steptoe felt the need to develop a full record before presenting the matter
to this Court and relies upon Syllabus point 5 of Garlow v. Zakaib, 186 W. Va. 457, 413
S.E.2d 112 (1991), wherein this Court did, in fact, request that a full record be developed in
attorney disqualification matters. See Syl. pt. 5, Garlow v. Zakaib, 186 W. Va. 457, 413
S.E.2d 112 (1991) (“Before a circuit court disqualifies a lawyer in a case because the
(continued...)
10
A. Rule 1.7
Rule 1.7 of the West Virginia Rules of Professional Conduct addresses general
rules regarding conflict of interest. In its entirety, Rule 1.7 provides:
(a) A lawyer shall not represent a client if the
representation of that client will be directly adverse to another
client, unless:
(1) the lawyer reasonably believes the representation will
not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
(b) A lawyer shall not represent a client if the
representation of that client may be materially limited by the
lawyer’s responsibilities to another client or to a third person, or
by the lawyer’s own interests, unless:
(1) the lawyer reasonably believes the representation will
not be adversely affected; and
(2) the client consents after consultation. When
representation of multiple clients in a single matter is
undertaken, the consultation shall include explanation of the
implications of the common representation and the advantages
and risks involved.
W. Va. R. Prof’l Conduct 1.7.
10
(...continued)
lawyer’s representation may conflict with the Rules of Professional Conduct, a record must
be made so that the circuit court may determine whether disqualification is proper.
Furthermore, this Court will not review a circuit court’s order disqualifying a lawyer unless
the circuit court’s order is based upon an adequately developed record. In the alternative, if
the circuit court’s order disqualifying a lawyer is based upon an inadequately developed
record, this Court, under appropriate circumstances, may remand a case to the circuit court
for development of an adequate record.”). We appreciate counsel’s candor and thoroughness
in responding to this Court’s inquiry.
11
1. Rule 1.7(a). Verizon does not contend that Steptoe’s representation of its
current clients herein violates Rule 1.7(a) and, indeed, we find that Rule 1.7(a) does not apply
to the facts of the case sub judice because Steptoe’s representation of its current clients is not
“directly adverse” to its representation of its former clients. W. Va. R. Prof’l Conduct 1.7(a).
Rather, the interests of both Steptoe’s former and current clients are aligned insofar as they
all are former employees of the same employer and they all have alleged the same wrongful
termination claims against that employer. “By definition, no violation of Rule 1.7(a) can
occur if representation of one client will not be directly adverse to another client.”
Committee on Legal Ethics v. Frame, 189 W. Va. 641, 643, 433 S.E.2d 579, 581 (1993).
Because Steptoe is not acting as an “advocate against” its former clients in representing the
Plaintiff Employees, this subsequent representation is not adverse, and Rule 1.7(a), by its
own terms, does not apply to the facts of this case. See Frame, 189 W. Va. at 643, 433
S.E.2d at 581 (observing that, “[w]ith regard to the interpretation of the phrase ‘directly
adverse,’ the comment to Rule 1.7(a) provides the following guidance: ‘Thus, a lawyer
ordinarily may not act as advocate against a person the lawyer represents in some other
matter, even if it is wholly unrelated. Paragraph (a) applies only when the representation of
one client would be directly adverse to the other.’” (quoting W. Va. R. Prof’l Conduct 1.7
cmt. Loyalty to a Client)).
12
2. Rule 1.7(b). Rather, the crux of Verizon’s complaint in this regard is that
Steptoe’s representation of its current clients constitutes a conflict of interest under Rule
1.7(b). More specifically, Verizon opines that Steptoe’s representation of its current clients
will be compromised by its obligations to its former clients, particularly Steptoe’s duty to
maintain the confidentiality of information subject to the agreed protective orders and
confidential settlement agreements entered in the Rowh and Radcliff cases. For its part,
Steptoe denies that a conflict exists under Rule 1.7(b) and further asserts that it has not
revealed any of the information subject to the orders or agreements in the prior cases and that
it does not intend to improperly use such information in the instant proceedings. Moreover,
Steptoe represents that it will use only information and documents that is obtains through
discovery in the case sub judice. Applying the language of Rule 1.7(b) to the facts of this
case, we conclude that no conflict of interest exists that would require Steptoe’s
disqualification on this basis.
Pursuant to the express language of West Virginia Rule of Professional
Conduct 1.7(b), a lawyer is prohibited from representing a client if such representation “may
be materially limited by the lawyer’s responsibilities to another client or to a third person, or
by the lawyer’s own interests . . . .” W. Va. R. Prof’l Conduct 1.7(b). We previously have
interpreted this rule and now hold it to mean that, pursuant to Rule 1.7(b) of the West
Virginia Rules of Professional Conduct,
a lawyer may represent a client even though there appears to be
a conflict between the interests of the client and the lawyer
him/herself if the lawyer reasonably believes that his/her
13
representation will not be affected thereby and if the client, who
has been informed of the conflict, agrees to continued
representation.
Lawyer Disciplinary Bd. v. Artimez, 208 W. Va. 288, 300, 540 S.E.2d 156, 168 (2000) (citing
W. Va. R. Prof’l Conduct 1.7(b)). We also have construed this rule as cautioning that “[a]n
attorney should ‘not be permitted to put himself in a position where, even unconsciously, he
will be tempted to “soft pedal” his zeal in furthering the interests of one client in order to
avoid an obvious clash with those of another.’” Barefield v. DPIC Cos., Inc., 215 W. Va.
544, 557, 600 S.E.2d 256, 269 (2004) (quoting Committee on Legal Ethics v. Frame, 189
W. Va. 641, 645, 433 S.E.2d 579, 583 (1993) (citation omitted)). Nevertheless, we do not
find that, based upon the facts presently before us, a disqualifying conflict of interest exists
that must be cured because there is no material limitation upon Steptoe’s representation of
its current clients, the Plaintiff Employees, resulting either from Steptoe’s loyalty to its
former clients or its obligations arising from such representation. W. Va. R. Prof’l Conduct
1.7(b). Nor, as we noted in the preceding section, is there an “obvious clash” between the
interests of Steptoe’s former and current clients. Barefield, 215 W. Va. at 557, 600 S.E.2d
at 269 (internal quotations and citations omitted).
At issue are the obligations imposed upon Steptoe by the agreed protective
orders and confidential settlement agreements entered in the Rowh and Radcliff cases.
However, Verizon has not demonstrated that Steptoe has violated either of these provisions,
and the terms of these documents simply do not restrict Steptoe’s representation of
subsequent clients in substantially related matters. Neither do they prohibit Steptoe, in the
14
current litigation, from requesting the same information through discovery that Verizon
disclosed in the prior cases or from obtaining a new protective order to protect this
information once it has been disclosed within the confines of the case sub judice. Moreover,
to the extent that Verizon has expressed concern that Steptoe may call its former clients as
witnesses in support of its current clients’ claims, such concern is unfounded. Both of the
confidential settlement agreements entered into in the underlying proceedings expressly
permit the employee to disclose the terms thereof “to the extent that she . . . has been
subpoenaed or otherwise ordered to make such disclosure by a Court . . .” or “as compelled
by law or Court Order.”
In summary, we conclude that neither Steptoe’s representation of its former
clients nor its agreement to be bound by the protective orders and confidential settlements
entered in conjunction with such representation disqualify Steptoe from representing its
current clients, the Plaintiff Employees, in their wrongful termination claims against Verizon.
B. Rule 1.9
West Virginia Rule of Professional Conduct speaks to conflicts of interests
involving an attorney’s former client. Rule 1.9 states in full that
[a] lawyer who has formerly represented a client in a
matter shall not thereafter:
(a) represent another person in the same or substantially
related matter in which that person’s interest[s] are materially
adverse to the interests of the former client unless the former
client consents after consultation; or
15
(b) use information relating to the representation to the
disadvantage of the former client except as Rule 1.6[11] or Rule
3.3[12] would permit or require with respect to a client or when
the information has become generally known.
W. Va. R. Prof’l Conduct 1.9 (footnotes added).
1. Rule 1.9(a). As to this basis for the issuance of its requested writ, Verizon
argues that Steptoe may not represent its current clients herein because the instant proceeding
is substantially related to the matter in which Steptoe represented its former clients. Verizon
additionally contends that Steptoe should be disqualified because the interests of Steptoe’s
current clients, the Plaintiff Employees, are materially adverse to those of its former clients.
Finally, Verizon asserts that the consents that Steptoe has obtained from its former clients to
permit it to continue to represent its current clients are facially defective insofar as, in
Verizon’s opinion, such consents do not fully disclose the extent to which the former clients,
and information pertaining to their cases, might be involved in the litigation of the current
clients’ claims. Steptoe, however, disputes Verizon’s assertions and states that the interests
of its former and current clients are aligned, and not adverse, insofar as they are all former
employees of the same employer and all have alleged the same claims of wrongful
termination against that same employer. Moreover, Steptoe represents that the consents it
11
Rule 1.6 of the West Virginia Rules of Professional Conduct addresses
confidentiality of information. See generally W. Va. R. Prof’l Conduct 1.6. This exception
is not implicated by the facts of the case sub judice. See Section III.B.2, infra.
12
West Virginia Rule of Professional Conduct 3.3 concerns candor toward the
tribunal. See generally W. Va. R. Prof’l Conduct 3.3. This exception is not at issue under
the facts of the instant proceeding.
16
obtained from its former clients resulted from full disclosure of the scope of its current
representation of the Plaintiff Employees, and, accordingly, the consents are valid.
Rule 1.9(a) of the West Virginia Rules of Professional Conduct precludes an
attorney, who previously has represented a client, from representing a subsequent client “in
the same or substantially related matter” in which the subsequent client’s interests are
“materially adverse” to the former client’s interests “unless the former client consents after
consultation.” W. Va. R. Prof’l Conduct 1.9(a). Accord Syl. pt. 2, State ex rel. McClanahan
v. Hamilton, 189 W. Va. 290, 430 S.E.2d 569 (1993) (“Rule 1.9(a) of the Rules of
Professional Conduct, precludes an attorney who has formerly represented a client in a matter
from representing another person in the same or a substantially related matter that is
materially adverse to the interest of the former client unless the former client consents after
consultation.”). Thus,
[t]o disqualify an attorney pursuant to Rule 1.9(a) of the
West Virginia Rules of Professional Conduct, five criteria must
be satisfied: (1) the existence of an attorney-client relationship
between the attorney and the former client; (2) the existence of
an attorney-client relationship between the attorney and the
subsequent client; (3) the subject matter of the subsequent
client’s representation either is the same as or is substantially
related to the subject matter of the former client’s
representation; (4) the subsequent client’s representation is
materially adverse to the interests of the former client; and (5)
the former client has not consented, after consultation, to the
subsequent representation.
Syl. pt. 5, State ex rel. Bluestone Coal Corp. v. Mazzone, 226 W. Va. 148, 697 S.E.2d 740(2010). The facts of the instant case squarely satisfy the first three of these disqualification
17
criteria: attorney representation of a former client, attorney representation of a subsequent
client, and both representations involve the same subject matter. Id. However, as we noted
with respect to our analysis finding no direct adversity between the interests of Steptoe’s
former and current clients under Rule 1.7(a), in Section III.A.1., supra, we likewise conclude
that the interests of Steptoe’s former and current clients also are not “materially adverse” and,
thus, disqualification is not required by Rule 1.9(a).
The Comment to Rule 1.9, itself, explains precisely what the material adversity
criterion contemplates: “‘The underlying question is whether the lawyer was so involved in
the matter that the subsequent representation can be justly regarded as a changing of sides
in the matter in question.’” Bluestone Coal, 226 W. Va. 162, 697 S.E.2d at 754 (quoting
W. Va. R. Prof’l Conduct 1.9 cmt.). Thus, to constitute “materially adverse” interests under
Rule 1.9(a), the interests of an attorney’s former and current clients must be so diametrically
opposed as to require the attorney to adopt adversarial or opposite positions in the two
representations. Clearly, such diversity of interest is not present in this case where both sets
of clients have a common background of employment by the same employer at the same
employment location and have asserted the same wrongful termination cause of action
against that same employer. Rather than changing sides between the former and subsequent
clients, Steptoe has remained steadfast in its representation of, loyalty to, and advocacy for
parties plaintiff. Where the interests of an attorney’s subsequent client are identical to those
of the attorney’s former client, by definition there simply cannot be material adversity
between the two clients’ interests. Absent the satisfaction of this element of the Rule 1.9(a)
18
test, disqualification cannot lie under this rule. Therefore, we deny Verizon’s request for a
writ of prohibition under Rule 1.9(a) because the factors for disqualifying an attorney
thereunder have not been satisfied in this case.
2. Rule 1.9(b). Verizon next proposes that disqualification is required under
Rule 1.9(b) because Steptoe has indicated an intention to use confidential information that
it obtained during its representation of Rowh and Radcliff, and that is protected by the agreed
protective orders and/or confidential settlement agreements in those clients’ cases, in its
representation of its current clients, the Plaintiff Employees. Furthermore, Verizon contends
that Steptoe has not provided adequate assurances that it will not improperly use this
protected information in the instant proceedings. Steptoe rejects Verizon’s inferences and
states that it has not, and will not, use the information subject to the agreed protective orders
and the confidential settlement agreements in the Rowh and Radcliff cases in the case sub
judice. Moreover, Steptoe suggests that the information Verizon attempts to protect by
seeking its disqualification under Rule 1.9(b) is not the type of information contemplated
thereby. Rather, Steptoe proposes that Rule 1.9(b) preserves and protects information
disclosed by a client to his/her attorney that, thus, is privileged and secured by the attorney-
client privilege and not information that otherwise would not be confidential were it not for
its denomination as such under the agreed protective orders and confidential settlement
agreements.
19
The purpose of Rule 1.9(b) is to preclude an attorney from using information
that he/she has obtained while representing a client from later using such information to the
former client’s detriment. W. Va. R. Prof’l Conduct 1.9(b).
Information acquired by the lawyer in the course of
representing a client may not subsequently be used by the lawyer
to the disadvantage of the client. However, the fact that a
lawyer has once served a client does not preclude the lawyer
from using generally known information about the client when
later representing another client.
W. Va. R. Prof’l Conduct 1.9 cmt. Thus, Rule 1.9(b)
“prohibits lawyers from disclosing or adversely using a former
client’s confidence . . . . The rule is concerned, first and
foremost, with insuring that a former client will be protected
against . . . the unfair advantage a lawyer could take of her client
by using information he communicated in confidence during the
course of the earlier representation.”
Bluestone Coal, 226 W. Va. at 158, 697 S.E.2d at 750 (quoting Richard E. Flamm, Lawyer
Disqualification: Conflicts of Interest and Other Bases § 7.3, at 126 (2003 & Cum. Supp.
2010) (footnotes omitted)) (emphasis added). In other words, “‘[t]he rule concerns itself
with the unfair advantage that a lawyer can take of his former client in using adversely to that
client information communicated in confidence in the course of the representation.’” State
ex rel. Ogden Newspapers, Inc. v. Wilkes, 198 W. Va. 587, 591 n.9, 482 S.E.2d 204, 208 n.9
(1996) (per curiam) (hereinafter “Ogden I”) (quoting Ullrich v. Hearst Corp., 809 F. Supp.
229, 236 (S.D.N.Y. 1992)) (emphasis added).
It is apparent, then, and we so hold, that Rule 1.9(b) of the West Virginia Rules
of Professional Conduct has three primary objectives: (1) to safeguard the sanctity of the
20
attorney-client relationship and the confidential information that is shared by a client during
the course of an attorney-client relationship; (2) to protect from disclosure the confidential
information revealed by a client to his/her attorney during the course of an attorney-client
relationship; and (3) to prohibit an attorney from using such confidential information
adversely to his/her former client. From the record before us, however, we conclude that the
facts and circumstances of the case sub judice do not warrant the disqualification of Steptoe
under the tenets of Rule 1.9(b).
First, the protected information about which Verizon has expressed concern
in these proceedings is the information that is secured by the agreed protective orders and
confidential settlement agreements entered in the Rowh and Radcliff cases. Neither of these
documents pertains to information that Steptoe’s former clients divulged to it during the
course of their attorney-client relationship, and, in fact, Verizon is not privy to such
information insofar as it is protected by the attorney-client privilege. Rather, the source of
Verizon’s concern is information that would be public knowledge but for the protections
provided by the aforementioned instruments. Because the record does not evince any
indication that Steptoe has violated the trust and confidences of its former clients, we do not
find a violation of this element of Rule 1.9(b).
Second, the record does not suggest that Steptoe has disclosed the confidential
information it obtained during the course of its representation of its former clients, nor that
it intends to do so. The only representations Steptoe has made regarding protected
21
information concern those items protected by the agreed protective orders and confidential
settlement agreements in the prior cases. And, to that end, Steptoe has averred that it will not
use this information in the case sub judice. As we previously observed, to the extent the
impetus for Verizon’s disqualification motion is its fervent desire to safeguard the
information already secured by the agreed protective orders and the confidential settlement
agreements entered in the prior cases, Rule 1.9(b) does not provide any measure of protection
therefor. Rather, should Verizon believe that these former agreements have been breached,
its proper remedy would be to seek their enforcement in accordance with their own terms.
The protections of Rule 1.9(b) are concerned with information that is obtained within the
confines of the attorney-client relationship and not with safeguards that are implemented
upon the agreement of litigating parties and ratified by the presiding tribunal.
Finally, assuming, arguendo, Steptoe did, or expressed an intention to, divulge
information it had received in confidence from Rowh and Radcliff, it is unlikely that Steptoe
would use such information adversely to them insofar as their interests are aligned with the
interests of Steptoe’s current clients. Having found, however, that Verizon has failed to
establish a foundation, under Rule 1.9(b), upon which to base its disqualification motion, we
find it unnecessary to further hypothesize as to how, or in what capacity, Steptoe may
improperly utilize information that is not at issue in this case.
22
C. Rule 5.6
Rule 5.6 of the West Virginia Rules of Professional Conduct concerns
impermissible restrictions upon an attorney’s right to practice law. In its entirety, Rule 5.6
directs:
A lawyer shall not participate in offering or making:
(a) a partnership or employment agreement that restricts
the right of a lawyer to practice after termination of the
relationship, except an agreement concerning benefits upon
retirement; or
(b) an agreement in which a restriction on the lawyer’s
right to practice is part of the settlement of a controversy
between private parties.
W. Va. R. Prof’l Conduct 5.6.
1. Rule 5.6(a). Neither Verizon nor Steptoe argues that subsection (a) of Rule
5.6 is implicated in the case sub judice and rightfully so: Rule 5.6(a) is wholly inapplicable
to the present case because the nature of Steptoe’s attorneys’ partnership and/or employment
agreements is not at issue herein. Rather, the arguments made during the course of these
proceedings implicate Rule 5.6(b).
2. Rule 5.6(b). During the underlying proceedings, Steptoe suggested that
granting Verizon’s motion to disqualify would infringe upon its right to practice law under
Rule 5.6(b). The circuit court took notice of this contention and expressed its hesitancy to
grant Verizon’s motion because it did not want to restrict either Steptoe attorney Rector’s
23
right to practice law or infringe upon the rights of the Plaintiff Employees to be represented
by counsel of their choosing. Before this Court, Steptoe has renewed its contentions
regarding Rule 5.6. We appreciate and share those concerns.
Rule 5.6(b) of the West Virginia Rules of Professional Conduct prohibits
restrictions on an attorney’s right to practice law: “A lawyer shall not participate in offering
or making . . . (b) an agreement in which a restriction on the lawyer’s right to practice is part
of the settlement of a controversy between private parties.” W. Va. R. Prof’l Conduct 5.6(b).
The Comment to this rule further explains that “Paragraph (b) prohibits a lawyer from
agreeing not to represent other persons in connection with settling a claim on behalf of a
client.” As with several of the other rules we have considered in our decision of this case,
we find Rule 5.6(b), on its face, to be inapplicable to the instant proceeding insofar as the
confidential settlement agreements entered into in the Rowh and Radcliff cases do not, by
their express terms, preclude Steptoe from representing the Plaintiff Employees herein.
Nevertheless, we are concerned by the manner in which these confidential
settlement agreements have been construed during the course of these proceedings and the
arguments that have been advanced by Verizon that would, in effect, interpret these
agreements as imposing precisely this type of prohibited restriction. Agreed protective orders
have been employed in a myriad of cases in this State, and their use has been approved
repeatedly by this Court. See, e.g., Syl. pt. 8, State ex rel. State Farm Mut. Auto. Ins. Co. v.
Marks, ___ W. Va. ___, ___ S.E.2d ___ (Nos. 12-0304 & 12-0210 Nov. 15, 2012) (“As part
24
of a court’s exclusive authority to manage discovery in its tribunal, a court also may enter
protective orders to safeguard the confidentiality of materials disclosed in discovery and to
regulate the manner in which such information may be used.”); Syl. pt. 4, State ex rel. State
Farm Mut. Auto. Ins. Co. v. Bedell, 228 W. Va. 252, 719 S.E.2d 722 (2011) (“Rule 26(c) of
the West Virginia Rules of Civil Procedure requires a showing of good cause to support the
issuance of a protective order. The party requesting the protective order bears the burden of
demonstrating good cause by establishing particular and specific facts; mere conclusory
statements are not sufficient to demonstrate good cause.”). Likewise, litigation frequently
is resolved and concluded through the entry of confidential settlement agreements, and this
Court has expressed its preference that cases be resolved through settlement. See, e.g., Syl.
pt. 1, Sanders v. Roselawn Mem’l Gardens, Inc., 152 W. Va. 91, 159 S.E.2d 784 (1968)
(“The law favors and encourages the resolution of controversies by contracts of compromise
and settlement rather than by litigation; and it is the policy of the law to uphold and enforce
such contracts if they are fairly made and are not in contravention of some law or public
policy.”). While this Court has noted with approval the entry of both agreed protective
orders and confidential settlement agreements, it does not follow that the terms of either of
these instruments may later be assigned such a tortured and contorted construction as to have
them say something that they simply do not and, ethically, cannot vis-à-vis an attorney’s right
to practice law.
We are gravely concerned that the impetus for the underlying motion to
disqualify appears to be the use and existence of agreed protective orders and confidential
25
settlement agreements in the litigation between Verizon and Steptoe’s former clients. We
are more troubled, however, that these seemingly innocuous documents, whose singular
purpose is to attribute confidential status to the information subject thereto and to secure such
confidentiality, has, instead been used as a poisoned dart to target Steptoe and to preclude
it from representing the clients who have chosen Steptoe’s attorneys to represent them. The
express terms of Rule 5.6(b) expressly prohibit the inclusion of such restrictive language in
any type of settlement agreement between parties. However, were we to adopt Verizon’s
interpretation of these documents’ provisions and condone their use to disqualify Steptoe
from representing its current clients, we would undoubtedly be affording a construction to
the confidential settlement agreements that most certainly would violate the pronouncements
of Rule 5.6(b). Such a result would not have only a chilling effect on the practice of law in
this State; it would completely annihilate the practices of any and all attorneys who specialize
in any area of the law, from workers’ compensation and products liability to insurance
litigation and employment discrimination, and all areas of the law in between, in which
attorneys who specialize in a particular field represent numerous, different clients. That is
not to say that the Rules of Professional Conduct must not be followed. Let us be crystal
clear that they must be diligently adhered to in order to maintain the integrity of the legal
profession and to protect both clients and the public at large. See generally W. Va. R. Prof’l
Conduct Preamble and Scope. Nevertheless, agreed protective orders and confidential
settlement agreements simply cannot, and will not, be construed as imposing restrictions
upon an attorney’s right to practice law in violation of Rule 5.6(b). Accordingly, we hold
that, pursuant to Rule 5.6 of the West Virginia Rules of Professional Conduct, a protective
26
order or confidential settlement agreement may not be construed or enforced to preclude an
attorney from representing a client in a subsequent matter involving similar facts and/or
parties based solely upon the attorney’s obligations to maintain the confidentiality of
information subject to such protective order or confidential settlement agreement.13
13
Our decision of the case sub judice is consistent with the decisions of other
courts that have, upon similar facts, declined to find that a confidentiality provision in prior
litigation precludes an attorney from representing clients in subsequent, similar litigation.
For example, in TradeWinds Airlines, Inc. v. Soros, No. 08 Civ. 5901(JFK), 2009 WL
1321695 (S.D.N.Y. May 12, 2009), the court concluded that an attorney who had participated
in a prior case against the same defendant was not disqualified where she did not use
information that was subject to a protective order in the prior case but rather used public
information contained in the court’s record and opinion in the prior case to prepare pleadings
in the subsequent matter. In short, the court ruled that “[t]he Protective Order does not
restrict its signatories from engaging in future litigation that would involve overlapping
discovery.” Id. at *7. The court also “decline[d] to interpret a standard confidentiality
provision [in the Settlement Agreement] as an implied restriction on counsel’s ability to
represent other clients, especially as such a restrictive covenant would itself violate ethical
rules.” Id. at *9 (footnote omitted) (citing ABA Model Rule 5.6(b) prohibiting inclusion in
a settlement of restrictions upon an attorney’s right to practice law).
Similarly, in Hu-Friedy Manufacturing Co., Inc. v. General Electric Co., No.
99 C 0762, 1999 WL 528545 (N.D. Ill. July 19, 1999), the defendant moved to disqualify the
plaintiff’s counsel because the same counsel had represented another client in litigation
against the same defendant in which a protective order and cooperation agreement had been
entered. The court rejected the defendant’s arguments, concluding that adopting such
rationale effectively would “turn[] any protective order barring future use of confidential
information that is independently relevant and discoverable in a subsequent action into a
restriction on an attorney’s right to practice law.” Id. at *3. Additionally, the court found
that such an interpretation of the protective order is contrary to Rule 5.6(b) and disingenuous
insofar as “any reasonably competent attorney would routinely obtain [the same information]
in discovery” thus affording counsel “no unfair advantage in this action due to its previous
exposure to the confidential information.” Id. at *3 (emphasis in original).
Finally, the court in First Impressions Design and Management, Inc. v. All That
Style Interiors, Inc., 122 F. Supp. 2d 1352, 1354 (S.D. Fla. 2000), declined to disqualify
defense counsel based upon the appearance of impropriety where defense counsel previously
had represented the same defendant in a substantially similar matter against the same plaintiff
(continued...)
27
13
(...continued)
and where an agreed protective order and a confidential settlement agreement had been
entered in the prior litigation. Ruling that disqualification was not warranted, the court
observed that the plaintiff “could not point to a specifically identifiable impropriety, i.e., any
wrongful use of confidential or trade secret information” by defense counsel; that the two
prior agreements did not prohibit defense counsel’s participation in the instant proceedings;
and that “Plaintiff’s counsel has not shown that there is a reasonable possibility that there will
be a prospective violation of such agreements.” Id. at 1354 (footnote omitted). But see Blue
Cross & Blue Shield of New Jersey v. Philip Morris, Inc., 53 F. Supp. 2d 338 (E.D.N.Y.
1999) (disqualifying counsel based upon appearance of impropriety where counsel had
agreed to refrain from representing defendant in instant proceeding in exchange for adverse
party’s promise not to oppose counsel’s representation of other parties in related litigation).
Other courts also have ruled consistently with our decision in this case. See,
e.g., Earnings Performance Grp., Inc. v. Quigley, 124 Fed. Appx. 350 (6th Cir. 2005)
(determining that, if attorney had signed agreement to refrain from representing parties in
future litigation against employer, such agreement most likely would not be enforceable
under Michigan Rule of Professional Conduct 5.6(b)); Wolt v. Sherwood, 828 F. Supp. 1562(D. Utah 1993) (construing settlement agreement as not precluding settling defendant’s
counsel from later representing nonsettling defendant against same plaintiff and opining that
if settlement agreement contained such a restriction, it would violate Utah Rule of
Professional Conduct 5.6(b)); Life Care Ctrs. of America v. Smith, 298 Ga. App. 739, 681
S.E.2d 182 (2009) (finding no basis for disqualification of plaintiff’s counsel based upon
counsel’s prior representation of another party plaintiff against same defendant in litigation
that was resolved through the entry of a confidential settlement agreement and referencing
Georgia Rule of Professional Conduct 5.6(b)). Accord Syl., Jarvis v. Jarvis, 12 Kan. App. 2d
799, 758 P.2d 244 (1988) (“An agreement which limits the freedom of a party to choose an
attorney is void and unenforceable as against public policy.”); Cardillo v. Bloomfield 206
Corp., 411 N.J. Super. 574, 576, 988 A.2d 136, 137 (App. Div. 2010) (“Attorneys may not
circumvent the import of RPC 5.6(b) by stating that the settlement of litigation is separate
from the agreement to restrict the practice of law where the agreements were negotiated
contemporaneously and are interconnected.”). See also McPhearson v. The Michaels Co.,
117 Cal. Rptr. 2d 489, ___, 96 Cal. App. 4th 843, 848 (2002) (rejecting court’s reasoning in
Gilbert in concluding that attorney was not disqualified from representing additional
employee against same employer, particularly where both former client employee and
subsequent client employee waived any potential conflict and confidentiality clause in former
client’s settlement agreement did not preclude him from testifying as “percipient witness”
for subsequent client). But see Gilbert v. National Corp. for Hous. P’ships, 84 Cal. Rptr. 2d
204, 71 Cal. App. 4th 1240 (1999) (disqualifying attorney from representing current client
employee in litigation against same employer against which attorney had represented former
(continued...)
28
The fact that the instant matter has been presented to us for decision upon these
facts and advancing these arguments indicates our need to reiterate our prior cautionary
words regarding the filing of disqualification motions:
We have expressed with concern when a party uses the
disqualification rule as a sword in a disqualification proceeding
that is designed as a method of harassment and an abusive
litigation tactic:
[D]isqualification, 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 of their own choosing. . . . [S]uch
motions should be viewed with extreme caution
for they can be misused as techniques of
harassment.
Ogden I, 198 W. Va. at 591 n.10, 482 S.E.2d at 208 n.10 (quoting Garlow v. Zakaib, 186
W. Va. 457, 461, 413 S.E.2d 112, 116 (1991)) (additional citations omitted). “[T]he purpose
of the [West Virginia] Rules [of Professional Conduct] can be subverted when they are
invoked by opposing parties as procedural weapons.” W. Va. R. Prof’l Conduct Scope.
While cases warranting the disqualification of counsel do arise, the instant matter, simply,
is not one of them. Counsel are reminded to faithfully abide by the Rules of Professional
Conduct and to refrain from using these ethical guides to engender and perpetuate hostility
between adversaries in litigation.
13
(...continued)
client employees based upon confidential settlement agreement entered in former clients’
case).
29
IV.
CONCLUSION
For the foregoing reasons, the requested writ of prohibition is hereby denied.
Writ Denied.
30