New Jersey: Concurrent Conflict of Interest Not Enough to Disqualify Law Firm

Wyeth v. Abbott Laboratories, 692 F.Supp.2d 453 (D.N.J. 2010). Found on www.legalmalpracticelawreview.com website.

Facts: U.S. District Judge Joel Pisano reversed a magistrate judge's decision disqualifying international law firm Howrey, LLP from representing Boston Scientific Scimed, Inc. (“BSC”) in an underlying patent infringement action. Wyeth alleged a conflict of interest existed in this representation against Wyeth as Howrey was simultaneously representing Wyeth in a patent matter in Europe. Wyeth contended that Howrey’s conduct was in violation of RPC 1.7(a)(1). The lower court interpreted applicable case law as requiring mandatory disqualification for a violation of RPC 1.7. Howrey appealed.
Issue: Can a law firm represent an adversary to a current client in an unrelated matter?
Rule of Law: RPC 1.7(a)(1) 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 in writing after consultation and a full disclosure of the material facts (following authorization from the other client to make such a disclosure).
Holding: The Court determined that since there was a client-attorney relationship, Howrey was in violation of RPC 1.7. The Court found that disqualification is never automatic citing U.S. v. Miller, 624 F.2d 1198, 1201 (3d Cir.1980). The facts of any particular case necessarily determine whether disqualification is warranted. The Court set 12 factors to consider in determining whether or not disqualification is needed: 1) prejudice to plaintiff; 2) prejudice to third party client; 3) whether representation of the plaintiff would allow third party client access to any confidential information; 4) the cost in terms of both time and money for the third party client to retain new counsel; 5) the complexity of the issues in the case and the time needed to take new counsel to acquaint themselves with the facts and issues; 6) which party, if either, was responsible for creating the conflict; 7) whether the two matters at issue are related in substance; 8) whether both matters are presently active; 9) whether any attorneys from the firm have been involved in both matters; 10) whether the matters are each being handled from offices in different geographic locations; 11) whether the attorneys from the law firm work with different client representative(s) for each matter; and 12) the relative time billed by the law firm to each matter.
The Court found no evidence that Howrey’s independent professional judgment would be impaired if permitted to continue as counsel for BSC, since the matters were completely unrelated and Howrey had put up an “ethical wall” with regard to the attorneys working on the matters, as well as the confidential information with regard to each matter. The Court determined that depriving BSC of Howrey’s depth of experience and expertise in the complex technologies at issue and the delay in litigation needed to obtain new counsel would be too great a hardship for them. Wyeth did not identify any prejudice that it would suffer if Howrey was not disqualified. As a result, the Court allowed Howrey to continue as counsel for BSC in the underlying patent litigation.