Opinion
No. 01 Civ. 2739 (CSH)
February 3, 2003
MEMORANDUM OPINION AND ORDER
This long-standing feud between plaintiff Herbert Feinberg and his former business partner, Norman Katz ("Norman"), has spawned a veritable frenzy of litigation embodied in three consolidated cases that pit Feinberg against Norman, Norman's son Stephen Katz ("Stephen"), and their business associate Jose Peschard. The background of these disputes is described in the Court's opinion in a related case filed by Norman Katz to confirm an arbitration award issued in his favor against Feinberg. See Katz v. Feinberg, 167 F. Supp.2d 556 (S.D.N.Y. 2001), aff'd, 290 F.3d 95 (2d Cir. 2002) (the "Arbitration Opinion"), familiarity with which is assumed. This case is currently before the Court on a motion of plaintiff Feinberg to disqualify Alvin B. Davis, Esq. ("Davis"), counsel to defendants Norman and Stephen Katz (collectively "the Katzes").
This opinion was issued upon Norman's petition to confirm the arbitration award under docket number 99 Civ. 11705, which the Court partially vacated for reasons not relevant to the issue at bar. There is currently a motion pending under this docket number to lift the stay placed on the enforcement of the arbitration award pending the outcome of related litigation. The Court issued an order pursuant to Davis's request removing him from the notice of appearance for the case docketed under 99 Civ. 11705. This order of removal has no bearing on the present motion.
Procedural History
A brief recitation of the related matters currently before this Court and the motions pending within them helps understand the nature of the plaintiff's present motion. A complaint was originally filed under docket number 99 Civ. 45 by Feinberg and his company, I. Appel Corporation ("I. Appel"), now known as I.A. Alliance Corp. ("Alliance"), on January 5, 1999 against Stephen Katz. The complaint alleged common law fraud, arising out of Stephen's purported misappropriation of Alliance's assets, and falsification of its financial statements. Feinberg and Alliance filed another complaint on January 31, 2000 under docket number 00 Civ. 17 against Norman, Stephen, and Jose Peschard, alleging breach of their fiduciary duties to Alliance and misappropriation Alliance's assets and business opportunities by scheming to take over one of Alliance's Mexican subsidiaries. The third complaint was filed by Alliance as assignee of the claims of I. Appel's bankruptcy creditors under docket number 01 Civ. 2739. It asserts breach of fiduciary duty and fraud against the Katzes for allegedly obscuring Alliance's true financial condition from its creditors.
The Court's Arbitration Opinion prompted the plaintiffs to amend all three complaints and delete claims that would have been barred by collateral estoppel. As a result, on October 5, 2001, the first complaint (99 Civ. 45) was amended to delete certain claims and incorporate some of the claims in 00 Civ. 17. Because the complaint in 00 Civ. 17 was so incorporated, that second complaint is now essentially obsolete. The Amended Complaint in 99 Civ. 45 survived, in part, a motion to dismiss, yielding a Second Amended Complaint that prompted yet another motion to dismiss currently pending before this Court.
The specific procedural disposition of the Amended Complaint of 99 Civ. 45 is as follows. Pursuant to a motion filed by the defendants to dismiss the Amended Complaint in 99 Civ. 45, the Court dismissed the RICO claim in its entirety, but allowed the claims for breach of fiduciary duty, conversion, unjust enrichment, and constructive trust to be brought under certain limitations. 2002 WL 1751135 (S.D.N.Y, July 26, 2002). In response this Order, the plaintiffs filed a Second Amended Complaint on September 10, 2002, and the defendants promptly filed a motion to dismiss the Second Amended Complaint that is currently pending before this Court. Nothing in this opinion will affect, or should be construed to affect, the outcome of that motion.
The third complaint, 01 Civ. 2739, was amended on March 19, 2002 and now advances fraud, RICO and breach of fiduciary duty claims by Feinberg and Alliance as assignees of the claims of I. Appel's creditors. Defendants brought a motion to dismiss the Amended Complaint in 01 Civ. 2739, and herein lies the focus of the procedural labyrinth described thus far. Plaintiffs contend that because the motion to dismiss argues in part that the Arbitration Award precludes litigation of certain claims, Davis, who served as a party arbitrator in the tripartite panel that produced the Arbitration Award, should be disqualified from representing the party who selected him.
The Court presently expresses no view on the merits of this motion to dismiss, which is currently pending. This Opinion and Order recites the background of the motion to dismiss only insofar as it is necessary to make an informed decision on the motion to disqualify counsel. Nothing in this opinion will affect, or should be construed to affect, the outcome of that motion.
Counsel for Feinberg makes an eleventh hour effort in the Reply Memorandum in Support of the Motion to Disqualify ("Reply Brief") to argue that because Davis is a potential witness in this case, according to DR § 1200.21, he should be disqualified. Reply Brief at 6. Since this argument was made for the first time in the plaintiff's Reply Brief, no responsive briefing has been filed on this matter, and no evidence was present that indicated his likelihood of appearing as a witness, the Court will not consider this argument in deciding this motion to disqualify.
The Court is presented with what may be a question of first impression: whether an attorney who served as an arbitrator appointed by a party on a tripartite arbitration panel is the arbitral process has been completed, to serve as counsel in a related matter for that party.
Factual Background
On July 1, 1996 Norman sold his interest in I. Appel Co., a women's lingerie company, to Feinberg pursuant to a written purchase agreement (the "Purchase Agreement"). Disputes arose between the two over the calculation of the purchase price, the valuation of the company at that time, and allegedly fraudulent statements that induced Feinberg to buy. Memorandum in Opposition to the Motion to Disqualify Alvin B. Davis ("Opposition Brief") at 2-3. The Purchase Agreement required "all disputes" between the parties to be arbitrated, and in relevant part, the arbitration provision stated:
Arbitration may be commenced at any time by either party hereto giving written notice to the other party. . . . One of the arbitrators shall be selected by the Seller [Norman], one shall be selected by the Buyer [Feinberg] and the third shall be selected by the other two arbitrators. If such arbitrators cannot agree on the third arbitrator, the selection shall be made by the rules of and from the panels of arbitrators maintained by the [American Arbitration] Association. . . . Each party shall pay its own expenses of arbitration and the expenses of the arbitrator appointed by such party; the expenses of the third arbitrator shall be equally shared.
Declaration of Alvin Davis (August 26, 2002) ("Davis Decl."), Ex. A, Purchase Agreement ¶ 14(g).
As per this provision, Norman chose Alvin B. Davis, a partner at the Miami law firm of Steel Hector Davis, as his arbitrator, and Feinberg selected Jerome S. Boros, an attorney at Robinson Silverman Pearce Aronsohn Merman LLP in New York. Dana H. Freyer, a member of Skadden Arps Slate Meagher Flom, was selected as the third arbitrator. Opposition Brief at 3. Davis and Boros questioned witnesses during hearing sessions and acted as advocates on behalf of the parties that had chosen them. Davis Del. ¶ 3. Neutral arbitrator Freyer stated in a declaration that she "understood throughout the Arbitration that Messrs. Davis and Boros were partisan arbitrators who did not purport to act as neutrals." Declaration of Dana H. Freyer (August 21, 2002) ("Freyer Del.") ¶ 2. Furthermore, Freyer makes clear that she "was the principal author of the Panel's Award;" she completed the Award draft, sent it to the two other arbitrators for comments, and incorporated their comments into the final version of the Award. Id. ¶ 3.
Plaintiff Feinberg argues that Davis was in fact the primary author of the Arbitration Award because of a letter Davis sent to the Katzes, signing himself as their "scrivener." Storch Decl., Ex. A. Davis counters and argues that he meant "scrivener" only insofar as that letter was concerned. Declaration of Alvin B. Davis (Aug. 26, 2002) ("Davis Decl.") ¶ 5. Given that both Davis and Freyer stated in their declarations that Freyer was the primary author of the award, the Court will not upset such a declaration on the basis of one interpretation of a term used in an isolated piece of correspondence. Furthermore, the Court concludes that authorship of the draft is irrelevant to the motion to disqualify, as will be made evident later in this opinion.
Once the arbitration was complete, Davis began to represent the Katzes in their continued disputes with Feinberg. As noted supra, Feinberg commenced three new lawsuits against the Katzes in federal court, and additionally commenced a lawsuit against Norman in state court, as well as a second arbitration against Norman before the AAA. Davis Decl. ¶ 6. Davis is representing or has represented the Katzes in (1) certain settlement discussions with Feinberg and his counsel, (2) the new arbitration before the AAA, (3) the federal lawsuit docketed under 00 Civ. 17, which as noted supra is functionally obsolete, and (4) the above-captioned action. Id. Feinberg made no objection to Davis's long representation of the Katzes until the filing of this motion on August 1, 2002.
To rebut the allegation that the late filing of such an objection amounts to nothing more than a tactical maneuver, Feinberg contends that the ethical violation of DR 9-101 "was not clear until June 2002, when Mr. Davis, in papers filed on behalf of the Katz Defendants, began arguing the applicability of the 1999 Arbitration Award. . . . The unseemliness of permitting Mr. Davis to argue the collateral estoppel effect of his own Award was of sufficient concern that the plaintiff felt it was appropriate to take action." Reply Brief at 2.
Discussion
"Whether to disqualify counsel is a matter subject to the trial court's sound discretion." Blue Cross and Blue Shield of New Jersey, et al. v. Philip Morris, Inc., 53 F. Supp.2d 338, 342 (E.D.N.Y. 1999) (citing among others Cresswell v. Sullivan Cromwell, 922 F.2d 60, 72 (2d Cir. 1990)). However, there is a general aversion to motions to disqualify in the Second Circuit. Felix v. Balkin et al., 49 F. Supp.2d 260, 267 (S.D.N.Y. 1999); Stratavest Ltd. v. Rogers, 903 F. Supp. 663, 666 (S.D.N.Y. 1995); Bennet v. Silvershein Associations v. Furman, 776 F. Supp. 800, 802 (S.D.N.Y. 1991); Blue Cross and Blue Shield, 53 F. Supp.2d at 346; Society for Good Will to Retarded Children, Inc. v. Carey, 446 F. Supp. 722, 724 (E.D.N.Y. 1979).
This reluctance to disqualify results from two factors. First, disqualification separates the client from his counsel of choice, Blue Cross and Blue Shield, 53 F. Supp.2d at 346 (citing Board of Education of the City of New York v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979)). Second, motions to disqualify "are often tactically motivated; they cause delay and add expense; they disrupt attorney-client relationships sometimes of long standing; in short, they tend to derail the efficient progress of litigation," Felix, 49 F. Supp.2d at 267 (citing Evans v. Artek Systems Corp., 715 F.2d 788, 791 (2d Cir. 1983)). Thus parties moving for disqualification of counsel carry a heavy burden and must satisfy a high standard of proof to succeed on the motion. Id. However, the Second Circuit counsels that any doubts that exist "should be resolved in favor of disqualification." Cheng v. GAF Corp., 631 F.2d 1052, 1059 (2d Cir. 1980), vacated on other grounds, 450 U.S. 903 (1981). Reading these admonitions together, it seems a "balance must be struck between being `solicitous of a client's right freely to choose his counsel, ' and protecting the `need to maintain the highest standards of the profession' and the `integrity of the adversary process.'" Felix, 49 F. Supp.2d at 267 (citing Evans, 715 F.2d at 782).
It is against this legal backdrop that Feinberg advances three arguments in favor of disqualifying Davis. Plaintiff cites the New York Code of Profession Responsibility ("New York Code"), EC 5-20 ("EC 5-20"), which prohibits an attorney who has acted as an "impartial arbitrator or mediator" from representing any of the parties involved in that dispute. Memorandum in Support of Motion to Disqualify ("Support Brief") at 6. Feinberg also calls upon the New York Code, Disciplinary Rule § 1200.45 ("DR 9-101(A)"), which states that "[a] lawyer shall not accept private employment in a matter upon the merits of which the lawyer has acted in a judicial capacity." Support Brief at 5. Finally, he relies most heavily on the injunction against the appearance of impropriety embodied in Canon 9 of the New York Code, and as articulated in General Motors Corp. v. City of New York, 501 F.2d 639, 649 (2d Cir. 1974): "We must act with scrupulous care to avoid any appearance of impropriety lest it taint both the public and private segments of the legal profession."
In assessing these arguments, federal district courts in New York can look for guidance in, though are not obliged to follow, the ABA Model Rules of Professional Conduct ("Model Rules"), the ABA Model Code of Professional Conduct ("Model Code"), and the New York Code. Blue Cross and Blue Shield, 53 F. Supp.2d at 342. Where the Model Rules and the Model Code conflict, New York federal courts should defer to the latter, since the New York State Bar has never adopted the A.B.A Model Rules. Id. (citing among cases Cresswell, 704 F. Supp. at 400-01 n. 7).
I. EC 5-20
EC 5-20, which appears in both the New York Code and the Model Code that New York has adopted, states in full:
A lawyer is often asked to serve as an impartial arbitrator or mediator in matters which involve present or former clients. The lawyer may serve in either capacity after disclosing such present of former relationships. A lawyer who has undertaken to act as an impartial arbitrator or mediator should not thereafter represent in the dispute any of the parties involved.
(emphasis added). In assessing whether or not this provision applies, I must consider whether a party-appointed arbitrator such as Davis is impartial within the meaning of EC 5-20, and if Davis is not impartial, whether EC 5-20 applies to partisan arbitrators as well. Three questions arise.
A. Whether a party-designated arbitrator in a tripartite panel is impartial within the meaning of EC 5-20.
In a case that now has some age, the New York Court of Appeals grappled with the question of arbitrator partiality as it impacted the parties going into arbitration. Astoria Medical Group v. Health Insurance Plan of Greater New York, 11 N.Y.2d 128 (N.Y. 1962). While that court dealt with maintaining the integrity of the arbitral process, and the case at bar is concerned with the integrity of litigation arising out of the arbitration, the opinion still sheds light on the neutrality of a party-designated arbitrator. In Astoria Medical Group, one of the party-arbitrators chosen had an interest in, and previous association with, the party who chose him; the opposing side argued that because of this he should be disqualified and replaced with an impartial arbitrator. 11 N.Y.2d. at 132-134. The court reasoned that each party contractually bargains for an arbitration clause which allows selection of one arbitrator to ensure his "`side' will, in a sense, be presented on the tribunal." Id. at 134. It went further to state that "[t]he right to appoint one's own arbitrator, which is of the essence of tripartite arbitration . . . would be of little moment were it to comprehend solely the choice of a `neutral.'" Id. at 135.
The Court of Appeals' rationale in Astoria Medical Group suggests that if in fact Davis was chosen as a party-arbitrator in a tripartite system, he would not have acted in a neutral capacity nor have been expected to do so. Furthermore, if the arbitration process itself is not de facto corrupted by the designation of an interested arbitrator who acts as an advocate for his chosen side, such an arbitrator would not be betraying his, or any other, interest in acting as the same advocate after the arbitral process was complete.
Cases like Astoria Medical Group indicate that
Although only scant case law exists on the subject of arbitrator bias in the tripartite context, "there has grown a common acceptance of the fact that the party-designated arbitrators are not and cannot be `neutral', [sic] at least in the sense that the third arbitrator or judge is."Metropolitan Prop. and Casualty Ins. Co. v. JC Penny Casualty Ins. Co., 780 F. Supp. 885 (D. Conn. 1991) (citing Astoria Medical Group, 11 N.Y.2d at 134); see also Carey, 466 F. Supp. at 728. Thus if Davis was in fact appointed to such a tripartite panel, he could not be considered an impartial arbitrator within the meaning of EC 5-20 and would not be prohibited from representing the Katzes.
B. Whether the arbitral panel established in the case at bar was a tripartite arbitration.
"In all arbitrations in which there are two or more party-appointed arbitrators . . . the two party-appointed arbitrators should be considered non-neutrals unless both parties inform the arbitrators that all three arbitrators are to be neutral," or unless the contract or governing law states otherwise. Metropolitan Prop. and Casualty Ins. Co., 780 F. Supp. at 891-892 (citing Code of Ethics for Arbitrators in Commercial Disputes). In this case, the Court concludes that because both the Seller and the Buyer had the right to choose their own arbitrators, no language in the arbitration clause neutralized the partiality of these party-designated arbitrators, and that this was a commercial dispute, Davis was not "impartial" within the language of EC 5-20. This conclusion is reinforced by the Freyer Decl. ¶ 2, where third arbitrator Dana Freyer states that she "understood throughout the Arbitration that Messrs. Davis and Boros were partisan arbitrators who did not purport to act as neutrals."
C. Whether the impartiality of the party-appointed arbitrator is important in deciding the applicability of EC 5-20.
Having decided that Davis was not impartial, there is still the question of whether EC 5-20 also reaches partisan arbitrators. The language of EC 5-20 an "impartial arbitrator or mediator" from representing a party in the dispute after arbitration is complete, but says nothing about whether a party-designated arbitrator may do so. The adjective impartial is a significant modifier of the nouns arbitrator and mediator.
Furthermore, there is a Model Rule that fills in the interpretive gap left by EC 5-20. While New York has adopted the Model Code but not the Model Rules, both sources provide guidance and deference should be afforded the former only in the face of conflict. Blue Cross and Blue Shield, 53 F. Supp.2d at 342. Model Rule 1.12(d) states that "[a]n arbitrator selected as a partisan of a party in a multimember arbitration panel is not prohibited from subsequently representing that party." The Comment accompanying Rule 1.12 cites EC 5-20 as its Model Code companion, but specifically states that the Code does not contain any contrary or relevant counterpart to 1.12(d). I conclude that Model Rule 1.12(d) thus remedies any ambiguity created by EC 5-20. While this Rule is not binding on the Court, it suggests that the modifier, "impartial," is too important to be read out of EC 5-20.
This Court concludes that, because party-appointed arbitrators in a tripartite panel are not impartial or neutral and Davis was such a non-neutral arbitrator. Since EC 5-20 prohibits only impartial arbitrators from representing parties, it does not work to disqualify Davis as counsel to the Katzes in the present matter.
II. DR 9-101(A)
Disciplinary Rule 9-101(A) of the New York Code states that "[a] lawyer shall not accept private employment in a matter upon the merits of which the lawyer has acted in a judicial capacity" (emphasis added). The most obvious question then, in assessing the applicability of this provision to the case at bar, is whether Davis acted in a judicial capacity as a partisan arbitrator. That Feinberg has not cited any case in his briefs that applies DR 9-101(A) to partisan arbitrators is not surprising for the following reasons.
Arbitrators are not judges. The court in Astoria Medical Group stated that "party-designated arbitrators are not and cannot be `neutral,' at least in the sense that the third arbitrator or a judge is." 11 N.Y.2d at 134 (emphasis added). If a partisan arbitrator is not expected to be neutral, he cannot then be acting in a "judicial capacity," at least insofar as the obligation of judges to remain impartial and disinterested is concerned. The tendency to analogize arbitration to trial, and to judge, should thus be avoided. See In the Matter of John T. Meehan, 243 A.D.2d 12, 16 (N.Y.App.Div. 1998).
That neutrality is one cornerstone of what constitutes a judge's role should be beyond dispute. In a recent Supreme Court case, involving the free speech rights of judges, the Court reiterated that there is a "judicial obligation to avoid prejudgment," which "corresponds to the litigant's right, protected by the Due Process Clause of the Fourteenth Amendment, to `an impartial and disinterested tribunal in both civil and criminal cases.'" Republican Party of Minnesota v. White, 122 S.Ct. 2528, 2555 (U.S. 2002) (quoting Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980)).
Feinberg contends that because the doctrine of arbitral immunity protects Davis from liability, and arbitral immunity is comparable to judicial immunity, Davis should be regarded as having acted "in a judicial capacity" within the meaning of DR 9-101(A). The immunity of commercial arbitrators is well established; the Second Circuit articulated the doctrine in a case Feinberg cites, Austern v. Chicago Board Options Exchange, 898 F.2d 882, 886 (2d Cir. 1990):
Based primarily on the functional comparability of the arbitrator's role in a contractually agreed upon proceeding to that of his judicial counterpart, the Courts of Appeals that have addressed the issue have uniformly immunized arbitrators from civil liability for all acts performed in their arbitral capacity. . . . We are persuaded by these policy concerns and agree that the nature of the function performed by arbitrators necessitates protection analogous to that traditionally accorded to judges.
But Feinberg's effort to morph Davis, a commercial arbitrator, into a DR 9-101(A) judge strains the rationale of cases like Austern too far. That arbitrators and judges are functionally comparable underscores the fact that they are not identical. No reported case holds that an arbitrator acts in a "judicial capacity" for purposes of DR 9-101(A), and this case will not be the first.
Finally, the Model Rules help flesh out the meaning of the term "judicial capacity" by exclusion. While Rule 1.12 states that "a lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer, arbitrator or law clerk to such person," it specifically carves out an exception for partisan arbitrators, stating they are "not prohibited from subsequently representing that party." Model Rule 1.12(d). This quite clearly indicates that whatever "judicial capacity" might greater scheme of things, it does not mean partisan arbitrator.
For these reasons I decide that DR 9-101(A) prohibiting lawyers who have acted in a "judicial capacity" from accepting private employment from parties in the matter does not disqualify Davis from serving as counsel to the Katzes.
III. Appearance of Impropriety
Canon 9 of the New York Code states that "[a] lawyer should avoid even the appearance of professional impropriety." However, where "`there is no claim that the trail will be tainted, appearance of impropriety is simply too slender a reed on which to rest a disqualification order except in the rarest of cases.'" Carey, 466 F. Supp. at 724-25 (emphasis added) (quoting Board of Education of the City of New York v. Nyquist, 590 F.2d 1241, 1247 (2d Cir. 1979)). "Only in rare cases is disqualification for the mere appearance of impropriety desirable." Blue Cross and Blue Shield, 53 F. Supp.2d at 346 (citing Nyquist, 590 F.2d at 1247; Gleason v. Zocco, 941 F. Supp. 32 (S.D.N.Y. 1996); Softel v. Dragon Medical Scientific Communications Ltd., 1995 WL 75490 (S.D.N.Y. Feb. 23, 1995)).
The court in Blue Cross and Blue Shield went on to note that in order for the appearance of impropriety to be sufficient to support disqualification, a "violation of either the duty to preserve client confidences or the duty to exercise independent judgment on the client's behalf is generally also required." 53 F. Supp.2d at 345. Furthermore, such violations must be alleged with "specific facts." Carey, 466 F. Supp. at 742 (citations omitted) ("Specific facts must point to a marked danger that the perceived evil, either prejudice to the attorney's client, or to an adversary, will result."). Because the mere appearance of impropriety cannot stand alone, the Court must evaluate, pursuant to the test set forth in Blue Cross and Blue Shield, whether plaintiff alleged, with "specific facts" a violation of client confidence, independent judgment on the client's behalf, or any other trial taint.
A. The Appearance of Impropriety in Blue Cross and Blue Shield
Plaintiff relies solely on the Blue Cross and Blue Shield opinion to advance his argument that Davis should be disqualified solely to avoid the appearance of impropriety. But Blue Cross and Blue Shield does not apply to the circumstances of the case at bar. In Blue Cross and Blue Shield, Judge Weinstein dealt with mass tobacco litigation where two of the twenty-one plaintiffs were represented by Winston Strawn on a matter unrelated to tobacco. Blue Cross and Blue Shield, 53 F. Supp.2d at 340. However, the firm was simultaneously representing the defendant Philip Morris in other tobacco litigation. Id. Although Winston Strawn did not represent the two plaintiffs, Empire and National, in a tobacco action, concern existed that the firm could access and transfer information to Philip Morris's New York counsel for use against them in the New York tobacco litigation. Id. While the "chances of an actual conflict [were] insignificant," id., Judge Weinstein nonetheless did disqualify Winston Strawn from acting as Philip Morris's counsel in the New York tobacco litigation. Id. at 347.
However, Feinberg cannot rest his claim on this case alone because the factual circumstances between the two diverge so greatly. In a mass tort situation, the implications of possible conflicts and informed consent are very different than in a smaller suit. "What might be acceptable in a simple one-client case is not appropriate in massive cases where it is impossible to explain to each person involved the technical points of ethics that support the lawyers' legal positions." Blue Cross and Blue Shield, 53 F. Supp.2d at 340. Furthermore, the high impact nature of the litigation weighed in the court's calculus: "Moreover, the appearance of impropriety is enhanced here due to the high profile of the case and the fact that it concerns the health care of millions of people." Id. at 346. Judge Weinstein also noted that "[c]ourts must be particularly sensitive to the feelings of law people about what constitutes justice in these mass cases that are widely discussed." Id. at 347.
In contrast, the dispute between the Katzes and Feinberg involves the same small cast of characters that has been with the suit since arbitration began in 1996. One could assume they have had adequate access to question and understand the nature of their representation. Also, this dispute does not impact the lay public, which intensified the need in Blue Cross and Blue Shield to guard against the appearance of impropriety. Finally, in Blue Cross and Blue Shield, the nature of the conflict and appearance of impropriety was very different. Since Winston Strawn was counsel for both the defendants and the plaintiffs, albeit in different matters, there was a real, however remote, possibility that client confidences could seep from one side to the other. In the case at bar, Davis has always represented the Katzes, and so there is no allegation that he could use confidential information obtained from Feinberg to the Katzes' unfair disadvantage.
In Blue Cross and Blue Shield, there was also an agreement between the parties that Winston Strawn would not represent Philip Morris in the New York tobacco actions that the court found to be valid. However, the court stats that "[i]n the instance case the appearance of impropriety alone would support disqualification even absent an enforceable contract of disqualification," which is why I have not addressed this as a distinguishing factor relevant to this Opinion. 53 F. Supp.2d at 347.
Feinberg asks this Court to believe that Blue Cross and Blue Shield counsels the absolute avoidance of impropriety, even when the actual likelihood of conflict is unlikely. However, there are factors present in Blue Cross and Blue Shield that soften the ostensibly hardline approach and make it too dissimilar to the case at bar to be controlling.
B. Whether Davis's involvement will result in a trial taint. Blue Cross and Blue Shield, among others, advises that in order for an attorney to be disqualified, the moving party must allege with some specificity that either the attorney's ability to represent his client has been compromised, or that some confidentiality has been breached. 53 F. Supp.2d at 345. Not only has plaintiff Feinberg failed to allege either litigation taint with specificity, he has failed to allege any such harm at all.
In response to defendants contention that plaintiff "does not allege that Davis's involvement in the case would cause him any harm," Opposition Brief at 1, Feinberg states first that Davis's role as arbitrator prohibits him from arguing the applicability of his own arbitration award, and second that "an attorney can be disqualified solely upon the fact that the lawyer's involvement casts the appearance of impropriety." Reply Brief at 7. I have already rejected the second argument as a matter of law. As for the first argument, Feinberg simply asserts that to argue the scope of an arbitral opinion an advocate helped author as a partisan arbitrator creates a per se trial taint when that same arbitrator-turned-counsel asserts the collateral estoppel effect of an arbitration award. Support Brief at 2-3. I do not agree.
Model Rule 1.12(d) specifically allows a partisan arbitrator ro represent a party in a related matter, and no conflicting provision exists in either the New York or Model Codes. The Model Rules must contemplate that such an arbitrator at some point in his representation of such party on a related matter will reference whatever document emerged from the arbitral process. That doing so is (a) specifically allowed by the Model Rules and (b) not prohibited by any statutory or case law indicates that there is no presumption of a trial taint.
Furthermore, the Court cannot identify a specific trial taint that could emerge in this situation. Davis would be estoppel claim based on the record, and shaping his interpretation of the record and the Award in to best suit his client's position. I cannot imagine that opposing counsel would not do the same. Davis's former incarnation as a partisan arbitrator gives him no insight into being an interpretive advocate that opposing counsel does not share.
Plaintiff Feinberg can point to no specific situation that would compromise the integrity of the litigation process if Davis was to continue his representation of the Katzes, and even if his representation were to cast a shadow of impropriety, the appearance of impropriety alone is insufficient to disqualify counsel. Thus Canon 9 of the New York Code does not disqualify Davis.
Conclusion
Because (1) EC 5-20, which bars impartial arbitrators from representing parties, does not apply to partisan arbitrators, (2) Model Rule 1.12(d) specifically allows partisan arbitrators to represent clients in related matters, (3) DR 9-101(A) does not apply to the situation at hand because Davis did not act in a "judicial capacity," and (4) the appearance of impropriety cannot stand alone to merit disqualification, the motion to disqualify Alvin B. Davis, Esq., as counsel to the defendants is denied.
It is SO ORDERED.