Opinion
Case No. 00-2146-JWL
January 23, 2002
MEMORANDUM AND ORDER
Plaintiff filed this race discrimination suit on behalf of himself and other current and former African-American employees of defendant City of Junction City, Kansas. In July 2001, Magistrate Judge Waxse granted defendants' motion for protective order prohibiting ex parte communications between plaintiff's attorneys and the City's director of human relations. See Hammond v. City of Junction City, 167 F. Supp.2d 1271 (D. Kan. 2001). In granting the motion, Judge Waxse held that the ex parte communications violated the Kansas Rules of Professional Conduct and that the violation warranted disqualification of plaintiff's attorneys and their law firm (the "Law Firm"). Thereafter, the Law Firm secured its own counsel to represent it in connection with its motion for reconsideration of Judge Waxse's disqualification order a motion that Judge Waxse denied in October 2001. See Hammond v. City of Junction City, 168 F. Supp.2d 1241 (D. Kan. 2001).
This matter is presently before the court on the Law Firm's and plaintiff's motions for review (docs. #61 and 63, respectively) of Judge Waxse's orders pursuant to Federal Rule of Civil Procedure 72(a). The National Employment Lawyers Association has also been granted leave to file papers as amicus curiae and those papers are before the court for consideration as well. For the reasons set forth more fully below, the motions are denied.
I. Background
Plaintiff filed this race discrimination suit against his former employer on behalf of himself and other current and former African-American employees of the City. Plaintiff has yet to file his motion for class action determination and, thus, the action has yet to be certified as a class action.
In February 2001, plaintiff filed a motion for extension of time to file his motion for class certification based, in part, on information learned from Al Hope, Sr., the City's current Director of Human Relations. Upon receiving the motion for extension and believing that plaintiff had engaged in ex parte contact with one of its current managers, the City immediately filed a motion for protective order regarding the ex parte communication. In response to the motion, the Law Firm admitted that various communications had occurred with Mr. Hope but contended that Mr. Hope was not a managerial employee for purposes of Rule 4.2.
Magistrate Judge Waxse received extensive briefing from the parties on the motion and, in addition, held a full-day evidentiary hearing on the motion. After considering the parties' papers and the evidence presented at the hearing, Judge Waxse issued an order granting the motion in substantial part. Specifically, Judge Waxse concluded that the Law Firm had communicated with Mr. Hope about the subject matter of this case and that Mr. Hope was a managerial employee for purposes of Rule 4.2. Based on his determination that the Law Firm had violated Rule 4.2, Judge Waxse, inter alia, disqualified the Law Firm from representing plaintiff Marcus Hammond or any other individual (including any class members) in this case and further disqualified the Law Firm from representing any class of individuals in any other action based on the class allegations asserted in this case. Judge Waxse noted, however, that the Law Firm would be permitted to represent Mr. Hope in a separate, individual action against the City. Pursuant to Judge Waxse's order, however, if Mr. Hope desires to represent a class of employees or to opt in to this action should it be certified, then the Law Firm would not be permitted to represent Mr. Hope. Judge Waxse also awarded defendant the attorneys' fees and costs associated with preparing its motion for protective order and preparing for and attending the evidentiary hearing.
II. Standard of Review
The threshold issue presented by the parties' papers is the appropriate standard of review and, more specifically, whether the magistrate's orders should be considered dispositive or nondispositive. The Law Firm and plaintiff contend that the court should apply a de novo standard of review because the magistrate judge's orders are, in effect, dispositive. According to plaintiff, the magistrate's orders "for all practical purposes, . . . end all litigation, thus disposing of the case." Plaintiff contends that the orders effectively dispose of plaintiff's class action complaint because counsel has been disqualified and preclude Mr. Hope from obtaining legal representation of his choice should he choose to file a class action. Similarly, the Law Firm argues that Judge Waxse's orders are dispositive, requiring a de novo standard of review, because the orders prevent Mr. Hope from serving as a class representative through his chosen counsel and effectively ends the class aspect of this case.
The movants' arguments are unpersuasive. As an initial matter, the Tenth Circuit has held that the disqualification of counsel is a nondispositive pretrial matter. See Hutchinson v. Pfeil, 105 F.3d 562, 565 (10th Cir. 1997) (a motion to disqualify is simply a request for a sanction, which is among the nondispositive matters which a magistrate judge may decide). Moreover, there is simply no evidence to support the movants' contention that the disqualification of class counsel will effectively end this litigation. The Law Firm has not shown itself to be especially, let alone uniquely, qualified to handle this case. Without any showing to the contrary, the court believes that any number of lawyers would be willing and able to represent Mr. Hammond and pursue the class certification effort. Moreover, while Mr. Hope will not be able to pursue a class action with the Law Firm as his counsel (he is permitted to pursue his individual claims with the Law Firm as his counsel), he may pursue a class action with any other counsel of his choosing. In short, there is simply no reason for the court to believe that the disqualification of the Law Firm will have the practical effect of terminating the class certification effort or that such a ruling will otherwise hinder the rights of Mr. Hammond or Mr. Hope.
The Law Firm also argues that the orders should be considered dispositive as Judge Waxse assessed "post-judgment" attorneys' fees. See Colorado Building Constr. Trades Council v. B.B. Andersen Constr. Co., 879 F.2d 809, 811 (10th Cir. 1989) ("Section 636 does not expressly authorize a district court to designate a magistrate judge to handle post-judgment matters."). Of course, judgment has not been entered in this case and the argument, then, lacks merit.
Because the order disqualifying counsel is not dispositive of this case or any case Mr. Hope might pursue, the court applies applies a more deferential standard by which the moving party must show that the magistrate judge's order is "clearly erroneous or contrary to law." Hutchinson, 105 F.3d at 566; Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1462 (10th Cir. 1988). The clearly erroneous standard "requires that the reviewing court affirm unless it on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Ocelot Oil, 847 F.2d at 1464 (quoting United States v. United States Gypsum Co., 333 U.S. 364 (1948)).
III. Discussion
Having determined the appropriate standard of review, the court turns to the merits of the motions for review. As set forth above, the magistrate judge found that the Law Firm violated Rule 4.2 of the Model Rules of Professional Conduct. Rule 4.2, as adopted by the Kansas Supreme Court, prohibits a lawyer from communicating "about the subject of the representation with a party 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 by law to do so." Kan. S.Ct. Rule 226 at Rule 4.2.
The District of Kansas, in turn, has adopted the Model Rules of Professional Conduct as adopted by the Kansas Supreme Court. See D. Kan. R. 83.6.1(a).
Rule 4.2 of the American Bar Association's Model Rules of Professional Conduct and Rule 4.2 as adopted by the Kansas Supreme Court are identical in all but one respect. In August 1995, the ABA House of Delegates amended Rule 4.2 to prohibit communications with a "person" rather than a "party." See ABA Compendium of Professional Responsibility Rules and Standards 84 n. 13 (1997). The purpose of this amendment is to clarify that Rule 4.2's coverage extends to any represented person who has an interest in the matter to be discussed and who is represented with respect to that interest, regardless of whether the person is a "party" in a formal sense to the proceeding or transaction. Id. at 116, 463-66. The Kansas Supreme Court has not adopted this amendment.
The movants and NELA set forth numerous objections to the magistrate's orders. They contend that the contacts between the Law Firm and Mr. Hope were "authorized by law" within the meaning of Rule 4.2; that the communications were not about "the subject of the representation" for purposes of Rule 4.2; that an attorney-client relationship existed between the Law Firm and Mr. Hope; that the City waived its right to object or impliedly consented to any ex parte contacts with Mr. Hope; and that no confidential attorney-client relationship existed between the City and Mr. Hope. The Law Firm also challenges the specific award of attorneys' fees. As set forth in more detail below, each of these objections is overruled.
A. "Authorized by Law"
The Law Firm, plaintiff and NELA each object to the magistrate's order on the grounds that the communications between the Law Firm and Mr. Hope were "authorized by law" and, thus, constitute an exception to Rule 4.2's applicability or fall outside of Rule 4.2's ambit altogether.
1. Mr. Hope's Status as a Potential Plaintiff in the Class
The primary argument advanced by the Law Firm, plaintiff and NELA is that the Law Firm's communications with Mr. Hope were "authorized by law" by virtue of Mr. Hope's status as a potential class member. Stated another way, the movants and NELA contend that the magistrate judge erred by failing to evaluate the communications in the context of Rule 23 and, instead, by employing a mechanistic and rigid application of Rule 4.2. In a related vein, the movants and NELA maintain that the magistrate judge disregarded the Supreme Court's decision in Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981).
As an initial matter, it is clear that Judge Waxse recognized the class action context of the relevant communications and the import of Gulf Oil:
This case presents special issues because it involves a putative class action. The United States Supreme Court has set forth a special standard for addressing when a court should grant an order limiting communications between counsel and potential class members. See Gulf Oil Co. v. Bernard, 452 U.S. 89, 101-02 (1981). According to Gulf Oil, an order limiting communications between class counsel and potential class members must be "based on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties." Id. at 101. The record must show the particular abuses that have occurred or that are threatened, and the court's analysis "should result in a carefully drawn order that limits speech as little as possible, consistent with the rights of the parties under the circumstances." Id. at 102. In making its determination, the court must take into account "that the rules of ethics properly impose restraints on some forms of expression." Id. at 104 n. 21 (citing ABA Code of Professional Responsibility DR 7-104).Hammond, 167 F. Supp.2d at 1275. Bearing the Gulf Oil directives in mind, Judge Waxse proceeded to make detailed factual findings and legal conclusions. Moreover, the magistrate judge considered the argument that Mr. Hope's status as a potential class member authorized the contacts at issue. In rejecting the argument, Judge Waxse stated:
To accept Plaintiff's argument, the Court would have to find that an attorney-client or other special relationship (which Plaintiff's counsel characterize as a fiduciary relationship) existed between Mr. Hope and Plaintiff's counsel so as to take their communications outside the scope of Rule 4.2. Here, the class has yet to be certified. It is fairly well-settled that prior to class certification, no attorney-client relationship exists between class counsel and the putative class members. See, e.g., Garrett v. Metropolitan Life Ins. Co., No. 95CIV2406 PKL, 1996 WL 325725, *6 (S.D.N.Y. June 12, 1996); Montgomery v. Aetna Plywood, Inc., No. 95C3193, 1996 WL 189347 (N.D. Ill. Apr. 16, 1996), op. on reconsideration, at *3 (July 21, 1996); Fulco v. Continental Cablevision, Inc., 789 F. Supp. 45, 46-47 (D. Mass. 1992); Bower v. Bunker Hill Co., 689 F. Supp. 1032, 1033 (E.D. Wash. 1985); Resnick v. American Dental Ass'n, 95 F.R.D. 372, 376-77 n. 6 (N.D. Ill. 1982). Cf. Manual for Complex Litigation § 30.2 at p. 234 (3d ed. 1995) (once class is certified, the ethical rules governing communications apply because each class member is deemed a client of class counsel). Here, no attorney-client relationship existed between Plaintiff's counsel and Mr. Hope by virtue of his being a potential member of the putative class.
Furthermore, it is only speculation at this point in time that a class will be certified. Even if a class is eventually certified, the class might be defined so as not to include Mr. Hope. It is also possible that Mr. Hope might decide to opt-out of the class.Hammond, 167 F. Supp.2d at 1286.
In support of their argument that ex parte contacts with putative class members is permissible, the movants and NELA rely on a number of cases — all of which are easily and significantly distinguished from this case. The Law Firm and NELA, for example, direct the court to Blanchard v. EdgeMark Financial Corp., 175 F.R.D. 293 (N.D. Ill. 1997). This reference is puzzling at best, as the Blanchard class had already been certified (no class has been certified here) and the relevant issue before the court was whether class counsel should be disqualified for adopting a position contrary to the interests of the class representative, allegedly in violation of Rule 1.7. See id. at 305-07. Ultimately, the court determined that disqualification was not appropriate because "all that can be expected of class counsel is that he seek to protect the best interests of the class as a whole." Id. at 307.
NELA also refers the court to Dondore v. NGK Metals Corp., 152 F. Supp.2d 662 (E.D. Pa. 2001) for the proposition that Rule 4.2 prohibits only defense counsel, as opposed to class counsel, from contacting putative class members. In Dondore, defense counsel in a toxic tort suit sought to conduct interviews with fact witnesses who were also potential class members. See id. at 663-664. In denying defense counsel's request, the court held that "if defense counsel or counsel otherwise adverse to their interests is allowed to interview and take statements from often unsophisticated putative class members without the approval of counsel who initiated the action, the benefits of class action litigation could be seriously undermined." Id. at 666. Dondore in no way suggests that it is permissible for plaintiff's counsel to interview current managerial employees of the defendant. At the most, it suggests that the City's counsel could be restricted, in certain circumstances, with respect to their communications with potential members of the class about the subject of the suit. See, e.g., Bublitz v. E.I. duPont de Nemours Co., 196 F.R.D. 545, 549 (S.D. Iowa 2000) (any communication by the defendant to the putative class members — all current managerial employees of the defendant — relating to the merits or settlement of the action or participation in the action must be in writing with a copy of the writing filed with the court); Bower v. Bunker Hill Co., 689 F. Supp. 1032, 1033-34 (E.D. Wash. 1985) (once class is certified, defense counsel cannot contact class members, including current employees — about the subject of the suit without consent of class counsel). But that issue is simply not before the court.
Unlike the Law Firm, defense counsel in Dondore filed a motion seeking a ruling on the issue before they engaged in communications with putative class members.
The Law Firm suggests that Judge Waxse erred in not limiting defense counsel's communications with putative class members such as Mr. Hope. The court has not been pointed to any reference in the record, however, to any request by plaintiff or his counsel to limit such communications.
The movants and NELA also direct the court to a case from this district, Hoffman v. United Telecommunications, Inc., 111 F.R.D. 332 (D. Kan. 1986). Their reliance on this case is misplaced. In Hoffman, an EEOC direct-enforcement action, the EEOC moved for leave to communicate with current and former employees of the defendant, including current managerial employees, by way of letter and questionnaire. See 111 F.R.D. at 333. Judge Rushfelt denied the motion, finding that the proposed need for the information (particularly when much of the information had already been produced or was available through alternative means) did not outweigh the risk of harm to the defendant. See id. at 335-36. Judge Rushfelt also expressed concern about the proposed questionnaire and letter to the extent the solicitation was to be mailed to current managerial employees. See id. at 336. While Judge Rushfelt also denied the defendant's request for a broad protective order, he held that the EEOC could not contact current managers of the defendant unless the defendant agreed to the approach and to the guidelines governing any communications. See id. at 337.
Finally, the movants and NELA rely on a case from the Northern District of Georgia — Abdallah v. Coca-Cola Co., 186 F.R.D. 672 (N.D. Ga. 1999). Abdallah is, indeed, the only case that, at least at first blush, appears to support the argument that the Law Firm can engage in ex parte contacts with putative class members who are also current managerial employees of the defendant. In Abdallah, the plaintiffs filed a race discrimination suit individually and as class representatives. See id. at 673. In resolving the plaintiffs' motion for leave to interview prospective class members, see id., the court held that the plaintiffs and their counsel "are entitled to speak freely about this lawsuit with any potential class member that contacts them." Id. at 677. The court reasoned that "[s]uch communications, when initiated by potential class members and not Plaintiffs' counsel, are neither widespread nor injurious." Id.
The court specifically held that its ruling included the right of plaintiffs' counsel to speak freely with current supervisory and managerial employees. Rejecting the defendant's argument that such contacts would violate Georgia's equivalent of Rule 4.2, the court stated:
[U]pper level employees of Coca-Cola have a right to bring a discrimination claim against their employer. Therefore, to the extent that these employees wish to pursue employment claims against Coca-Cola, they may communicate freely with Plaintiffs and their counsel. However, communications concerning any other matters relevant to this lawsuit — including but not limited to privileged information — are not permitted.Id. Of course, Judge Waxse found that Mr. Hope and the Law Firm communicated not just about Mr. Hope's potential claims against the City, but other matters relevant to the lawsuit, such as the alleged shredding of relevant documents and Mr. Hope's participation in document production for this case. Thus, the Law Firm's contacts are significantly different from those at issue in Abdallah.
In any event, the court in Abdallah purported to rely on the Eleventh Circuit's decision in Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999 (11th Cir. 1997). In Jackson, the district court permitted the plaintiffs' counsel to communicate ex parte with potential class members except for Motel 6 management or supervisory employees. See Abdallah, 186 F.R.D. at 676. Even with that exception in place, the Eleventh Circuit held that the court abused its discretion, in part because a certification decision was not imminent. See id.
In short, a reading of the cases proffered by the movants and NELA clearly suggests that if the Law Firm desired to speak with Mr. Hope or any other potential class member, then the Law Firm should have filed a motion with the court seeking guidance on that issue before engaging in any communications. This reasoned approach would have permitted the court, consistent with Gulf Oil, to assess the need for any limitation on such communications, the potential for any abuse, and any interference with the rights of the parties. By engaging in such communications without first seeking guidance from the court — communications that the Law Firm clearly knew were at least potentially violative of Rule 4.2 — the Law Firm ran the risk that its conduct would be challenged and, ultimately, the basis for appropriate sanctions.
According to an affidavit provided by one of the Law Firm's associates, Glenn Brown, Mr. Brown initially did not return Mr. Hope's phone call because he could not determine whether Mr. Hope was a managerial employee. Moreover, once Mr. Hope did get Mr. Brown on the phone, Mr. Brown discussed with Mr. Hope his concerns that Mr. Hope was a City employee with managerial responsibility. Clearly, then, the Law Firm knew the implications and restrictions of Rule 4.2.
2. Mr. Hope's Status as a "Government Official"
The Law Firm also argues that its contact with Mr. Hope was "authorized by law" because Mr. Hope serves as a government official. In support of this argument, the Law Firm relies on the comment to Rule 4.2 and, apparently, the Kansas Open Meetings Act, K.S.A. § 75-4317 et seq., and the Kansas Open Records Act, K.S.A. § 45-215 et seq. As an initial matter, it is undisputed that this argument was never presented to the magistrate judge. Accordingly, the Law Firm has waived this argument. See Marshall v. Chater, 75 F.3d 1421, 1426 (10th Cir. 1996) (theories and issues raised for the first time in objections to the magistrate judge's decision are deemed waived).
Official comment to Rule 4.2 notes: "Communications authorized by law include, for example, the right of a party to a controversy and a government agency to speak with government officials about the matter."
Even if the court were to consider this argument, it would reject the same. As interpreted by the American Bar Association, counsel may ethically engage in ex parte contact with an employee of a government agency only when the employee has "authority to take or to recommend action in the matter;" when the sole purpose of the communication is to address a policy issue, including settling the controversy; and when the lawyer for the party gives government counsel reasonable advance notice of the intent to communicate with the official. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 97-408 (1997) ("Rule 4.2 would generally forbid a lawyer representing a private party in a controversy with the government from making an ex parte contact with government officials who are not authorized to take or recommend action in the matter, or where the purpose of the communication is to develop evidence. . . ."). Of course, the purpose of the communications between Mr. Hope and the Law Firm was not to address any policy issue. Moreover, it is uncontroverted that the City did not receive any notice that the communications were going to take place. For these reasons, and in the absence of any persuasive argument from the Law Firm suggesting that its communications with Mr. Hope fall within "governmental official" exception to Rule 4.2, the objection is overruled.
B. Subject of the Representation
In its amicus brief, NELA contends that Rule 4.2 is simply not applicable because the communications between the Law Firm and Mr. Hope were not about "the subject of the representation." According to NELA, the communications concerned Mr. Hope's efforts to hire the Law Firm in connection with his individual claims against the City and the mere fact that Mr. Hope discussed other facts "which might overlap with those involved in the Hammond lawsuit" is irrelevant.
The magistrate judge carefully considered — and ultimately rejected — this argument. As Judge Waxse emphasized in his order, the Law Firm has conceded that subjects of discussion with Mr. Hope included Mr. Hope's participation in document production with respect to the Hammond case as well as the alleged shredding of documents relating to the case. The Law Firm and Mr. Hope also discussed Mr. Hope's ability to elect not to be a member of the Hammond class action and discussed the claims of other potential class members. Simply put, NELA has not shown that the magistrate judge's determination that the Law Firm and Mr. Hope had several discussions about the "subject of the representation" within the meaning of Rule 4.2 is clearly erroneous. See Biocore Medical Techs., Inc. v. Khosrowshahi, 181 F.R.D. 660, 671 (D. Kan. 1998) (The "subject matter of the representation" in a litigated matter is not limited to the merits of the various claims; it includes the entire litigation process.").
C. Attorney-Client Relationship Between the Law Firm and Mr. Hope
Both NELA and the Law Firm maintain that Rule 4.2 is inapplicable to the communications between the Law Firm and Mr. Hope because an attorney-client relationship existed between the Law Firm and Mr. Hope by virtue of the fact that Mr. Hope contacted the Law Firm at the end of January 2001 and requested representation. According to NELA and the Law Firm, "plaintiff's counsel cannot be logically accused of having ex parte communications with their own client." The magistrate judge soundly rejected this argument:
Admittedly, Mr. Hope and Plaintiff's counsel did eventually form an attorney-client relationship in connection with Mr. Hope's individual claims of race discrimination. But that relationship was only created as a result of the improper ex parte communications with Mr. Hope. From the very first conversation with Mr. Hope, [the Law Firm] knew, or at the very least, should have known, that Mr. Hope had managerial responsibilities on behalf of the City that rendered him off-limits. At that point, no further ex parte communications should have ensued. Had no further ex parte communications taken place, no attorney-client relationship would have been created.Hammond, 167 F. Supp.2d at 1287 (emphasis in original). In essence, then, Judge Waxse found that Mr. Hope was not represented by the Law Firm at the time of the initial ex parte communication.
The Law Firm suggests that Judge Waxse's ruling is clearly erroneous when viewed in light of Amatuzio v. Gandalf Systems Corp., 932 F. Supp. 113 (D.N.J. 1996). This case, however, simply does not support the proposition that an attorney-client relationship existed between Mr. Hope and the Law Firm at the time of the initial communication or that the communications were otherwise permissible. In Amatuzio, a former employee (and former Director of Human Resources) contacted class counsel for representation only after his discharge from employment. The sole issue before the court was "to what extent can a former employee reveal to his own attorney, in connection with pending litigation between that employee and his former corporate employer, confidential communications with the employer's corporate attorney which occurred while the former employee was still employed?" Id. at 117. Obviously, the factual setting and legal issue of Amatuzio is significantly different from the circumstances present here. In short, Amatuzio in no way excuses the Law Firm's contacts with a current managerial employee of the City and in no way suggests that an attorney-client relationship existed between the Law Firm and Mr. Hope at the time of the initial contact.
In the absence of any persuasive argument that the magistrate judge's finding is erroneous, the objection is overruled.
D. The City's Alleged Waiver of Right to Object or Implied Consent to Ex Parte Contacts
The Law Firm also contends that even if no attorney-client relationship existed between it and Mr. Hope, the City nonetheless waived its right to object to any communications between the Law Firm and Mr. Hope or impliedly consented to such communications. In support of this argument, the Law Firm relies solely on Ed Miniat, Inc. v. Globe Life Insurance Co., No. 84-C-9781, 1989 WL 26838 (N.D. Ill. Mar. 20, 1989). In that case, the court found that an insurance company consented to ex parte contact with its former employee when the company expressly advised the employee that it intended to sue him. Id. at *4 ("If one states his intention to sue another he cannot expect that his adversary will respect former confidences."). Of course, Mr. Hope is not a former employee and, more significantly, the City never threatened to sue Mr. Hope. To the extent the Law Firm is suggesting that the City consented to ex parte contacts because it knew or should have known that Mr. Hope was an "adversary," the argument is not persuasive. Indeed, it would be unjust on the part of the City (and potentially discriminatory in and of itself) if the City assumed that its African-American managers suddenly became "the enemy" just because a class action race discrimination suit was filed against it. In short, Ed Miniat simply does not excuse the Law Firm's conduct here. As the Law Firm has not shown that the City waived its right to object to ex parte contacts or otherwise consented to such contacts, the objection is overruled.
While the Law Firm contends that Mr. Hope advised the City attorney prior to assisting with document production in this case that he "believed he would be involved in the lawsuit," such a statement is still insufficient to show that the City somehow consented to the Law Firm's ex parte contacts with Mr. Hope.
E. Attorney-Client Relationship Between the City and Mr. Hope
In its papers, the Law Firm maintains that the magistrate judge's sanctions are unjustified (and that the contacts at issue were permissible) because the City has not established that a confidential attorney-client relationship exists between the City and Mr. Hope. According to the Law Firm, the "adversity" demonstrated between Mr. Hope and the City indicates that "Mr. Hope never should have been identified as a `client' by the City's attorneys." The Law Firm also contends that it is "the client who determines what is privileged" and, thus, Mr. Hope, as the purported "client" of the City, could lawfully choose to disclose privileged information to opposing counsel.
The Law Firm's argument, however, completely loses sight of the language of Rule 4.2 and the application of that Rule in the corporate party context. In those cases in which a "party" is a corporation or other organization (such as a government agency), Rule 4.2
prohibits communications by a lawyer for one party concerning the matter of representation with persons having a managerial responsibility on behalf of the organization, and with any other person whose act or omission in connection with that matter may be imputed to the organization for purposes of civil or criminal liability or whose statements may constitute an admission on the part of the organization.
Kan. S.Ct. Rule 226 at Rule 4.2 cmt. Thus, the Rule dictates that individual managerial employees constitute a "party" for purposes of the rule without regard to whether any particular individual manager is "adverse" to the corporate employer. It is beyond dispute, then, that the Law Firm was prohibited under Rule 4.2 from communicating with City employees with managerial responsibility and City employees whose acts or omissions may be imputed to the City or whose statements may constitute an admission on the part of the City. The magistrate judge specifically found that Mr. Hope was an employee with managerial responsibilities and with "speaking authority" so as to bind the City. Hammond, 167 F. Supp.2d at 1284-86. While the Law Firm acknowledges Judge Waxse's findings, it now contends that Mr. Hope did not have "relevant and significant managerial authority or responsibility in the matter in question." Even ignoring the fact that the standard articulated by the Law Firm is not the appropriate test for determining who is a party for purposes of Rule 4.2, a reading of Judge Waxse's order clearly reveals that Judge Waxse determined that Mr. Hope has relevant and significant managerial responsibility with respect to employment-related issues — the very issues involved in this case.
The Kansas Supreme Court has adopted in principle the comments accompanying Rule 4.2 "[t]o the extent that they are not inconsistent with" the Model Rules as adopted by the Kansas Supreme Court and Kansas statutory and case law. See Kan. S.Ct. Rule 226 (prefatory rule). The comment to Rule 4.2 is consistent with the rule to the extent the comment explains which people involved with an organizational party constitute "parties" for purposes of the rule.
As the Law Firm has failed to demonstrate any error in Judge Waxse's application of Rule 4.2 to Mr. Hope, the objection is overruled.
F. Attorneys' Fees Sanction
Finally, the Law Firm complains that the magistrate judge awarded defendant reasonable expenses and attorneys' fees incurred in obtaining the disqualification order without citing any statutory basis for doing so. This argument is without merit. The court has broad discretion in fashioning an appropriate penalty or sanction to remedy the problems caused by an attorney's improper ex parte contacts. See Weeks v. Independent Sch. Dist. No. I-89, 230 F.3d 1201, 1211 (10th Cir. 2000) (quoting Faison v. Thornton, 863 F. Supp. 1204, 1215 (D. Nev. 1993)), cert. denied, 121 S.Ct. 1959 (2001). Moreover, it is well settled that federal courts have the inherent power to assess attorneys' fees against counsel in appropriate circumstances. See Chambers v. NASCO, Inc., 501 U.S. 32, 44-45 (1991); Roadway Express, Inc. v. Piper, 447 U.S. 752, 764-67 (1980). IT IS THEREFORE ORDERED BY THE COURT THAT the Law Firm's motion for review (doc. #61) and plaintiff's motion for review (doc. #63) are denied.
IT IS SO ORDERED.