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Keywords

plaintiffdefendantattorneyappealtrialtrustcorporationantitrustgrand jury
defendantattorneyappealmotiongrand jurypiracy

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Wilson P. Abraham Const. Corp. v. Armco Steel Corp., 559 F.2d 250, 1977-2 Trade Cases P 61,625

Facts

The dispute arose from Mr. Susman's prior representation of Whitlow Steel Company during a Federal Grand Jury investigation into the rebar steel industry, which involved defendants Armco, Ceco, and Laclede. During this time, Mr. Susman met with representatives from these companies to discuss a cooperative defense. The defendants argued that Mr. Susman had access to confidential information that could be detrimental to them in the current case, while Mr. Susman denied any significant exchanges of information. The current case involves a civil suit filed by Wilson P. Abraham Construction Corporation, which the defendants claim is nearly identical to a previous Texas civil suit where Mr. Susman was involved.

The factual background which leads up to this current dispute is somewhat detailed and complicated. It begins in 1972 when Mr. Susman was associated with the firm of Fulbright and Jaworski in Houston, Texas. At that time, he undertook to represent Whitlow Steel Company, Inc., an independent rebar fabricator in Houston. This representation was in connection with a Federal Grand Jury investigation of the rebar steel industry in Texas.

Issue

Whether Mr. Susman should be disqualified from representing the plaintiff due to a conflict of interest stemming from his previous representation of a co-defendant in a related antitrust case.

The defendants allege that the complaint in this case is virtually identical to the Texas complaint in which they were also party defendants.

Rule

An attorney should not be allowed to represent a party against a co-defendant of a former client if the subject matter of the current case is substantially related to the matters in which the attorney was previously involved, especially if confidential information was exchanged.

This Court has recently reaffirmed with regards to attorney disqualification that a former client seeking to disqualify an attorney who appears on behalf of his adversary, need only to show that the matters embraced within the pending suit are substantially related to the matters or cause of action wherein the attorney previously represented him.

Analysis

The court analyzed the relationship between Mr. Susman's prior representation of Whitlow Steel Company and the current case involving the defendants. It emphasized that the inquiry should focus on whether the matters in the present suit are substantially related to the prior representation. The court noted that the defendants' argument hinged on the potential for Mr. Susman to have been privy to confidential information during his previous representation, which could impact the current case.

The defendants here contend that in a case alleging conspiracy, such as the case at bar, the defendants have a right to consult together about the case, and that all information derived by any of the counsel from such consultation is necessarily privileged.

Conclusion

The Court of Appeals remanded the case for the trial court to make specific factual findings regarding the content of the information exchanged and whether the current controversy is substantially related to the prior representation.

Consequently, we set aside the district court order denying the defendants' motion for disqualification and remand for the entry of formal findings of fact and conclusions of law dealing with these issues.

Who won?

The defendants prevailed in the sense that the court agreed to remand the case for further factual findings regarding the disqualification of Mr. Susman.

The Court of Appeals held: (1) an attorney should not be allowed to proceed against a codefendant of a former client where the subject matter of the present controversy is substantially related to matters in which the attorney was previously involved and where confidential exchanges of information took place between the various codefendants in preparation of a joint defense.

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