Kassis v. Teachers Insurance and Annuity Association

In Kassis v Teacher's Ins. & Annuity Assn., 93 N.Y.2d 611 [1999], the Court of Appeals re-stated the general rule that when an attorney working in a law firm is disqualified from undertaking a subsequent representation opposing a former client, all the attorneys in that firm are likewise precluded from representation. The rule of imputed disqualification reinforces an attorney's ethical obligation to avoid the appearance of impropriety, protects client confidences from misuse in substantially related and adverse litigation, frees the former client from any anxiety that matters disclosed will later be used against it, and provides a clear and readily administered test, thereby encouraging self-enforcement among members of the legal profession. (Id.) In Kassis, the moving lawyer, a first-year associate, played "an appreciable role as counsel for plaintiff" at his previous law firm. (Id. at 618.) He conducted depositions that resulted in extensive transcripts, appeared as sole counsel for the client in two court-ordered mediation sessions, and conversed regularly with the client before switching to join the law firm of his client's current adversary. The Kassis Court found particularly heavy defendants' burden in rebutting the presumption that the moving lawyer acquired material confidences and thus disqualified the firm. (See 93 N.Y.2d at 618-619.) The Kassis Court noted that "imputed disqualification is not an irrebuttable presumption." (93 N.Y.2d at 617, citing Solow v W.R. Grace & Co., 83 N.Y.2d 303, 309, 632 N.E.2d 437, 610 N.Y.S.2d 128 [1994].) The party seeking to avoid disqualification must prove that any information the disqualified lawyer acquired is unlikely to be significant or material in the litigation. (Id.) The Court of Appeals stated in no uncertain terms that the ethical and professional considerations in poten-tial conflicts in representation require close scrutiny, as attorneys owe a continuing duty to former clients not to reveal confidences learned in the course of professional legal representation. It is this duty that provides the foundation for the well-established rule that a lawyer may not represent a cli-ent in a matter and thereafter represent another client with interests materially adverse to interests of the former client in the same or substantially related matter. In Kassis v Teacher's Ins. & Annuity Assn. the associate, at his prior firm, "conducted five depositions," "attended two court-ordered mediation sessions as sole counsel for the client, appeared as [the client's] attorney at a physical examination ... , and conversed with [the client] on a regular basis" (Id. at 614). The Court, referring to the applicable Code of Professional Responsibility (22 NYCRR 1200 [repealed eff Apr. 1, 2009]) provisions then in effect, found that: " 'side switching' clearly implicates the policies both of maintaining loyalty to the first client and of protecting that client's confidences. These same principles give rise to the general rule that, where an attorney working in a law firm is disqualified from undertaking a subsequent representation opposing a former client, all the attorneys in that firm are likewise precluded from such representation (id. at 295) In 1999, the New York Court of Appeals held, in Kassis v Teacher's Ins. & Annuity Assn. (93 NY2d 611, 717 NE2d 674, 695 NYS2d 515 [1999]), that screening was ineffectual to save a law firm from disqualification when an attorney "side-switches," i.e., begins employment with the law firm after having worked for an ad-versary on the same matter, and when that attorney had acquired significant and material confidential infor-mation at the first firm. Notwithstanding Kassis, Rule 1.11 of the New York Rules of Professional Conduct (22 NYCRR part 1200 [eff Apr. 1, 2009]) permits a private law firm to avoid disqualification by timely and effective screening when a government official leaves public service to work at the firm even where: (1) the official had acquired confidential government information which could be used to the material disad-vantage of an adverse party; (2) the official has participated personally and substantially in the same matter. The question arises whether Kassis precludes a law firm from continuing to represent a client in a matter, where the government is not a party, after hiring a prosecutor who has acquired significant and material con-fidential government information and has personally participated in connection with the same matter, if the firm complies with the screening and notice provisions of rule 1.11. In Kassis the Court declared that "even the appearance of impropriety must be eliminated" (Kassis, 93 NY2d at 618). This, in part, was a reiteration of Canon 9 of the repealed Code which provided that "A Lawyer Should Avoid Even the Appearance of Professional Impropriety." The current rule 1.11, as adopted in New York, specifically adds, after authorizing screening for government officers, there must be "no other circumstances in the particular representation that create an appearance of impropriety" (Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.11 [b] [2]). Notably, the ABA Model Rules do not use the term anywhere within the rules. The addition of this language in the New York Rules, aside from being a carryover from the predecessor DR 9-101 (b), is an apparent nod to the caution in Kassis against appearances of impropriety and thereby acts as an additional restraint upon screening, which as explained above, does not generally enjoy wide ac-ceptance in New York.