WEINFELD, District Judge.
This is a motion by the defendant Universal Pictures Company, Inc. and Universal Film Exchanges, Inc. (both of which are hereafter referred to as Universal) for an order (1) to disqualify Thomas Turner Cooke from acting as counsel for the plaintiff and from associating himself in any capacity with any attorney for the plaintiff in the pending action as long as Universal is a party defendant; (2) to disqualify Alexander Kahan from acting as counsel for plaintiff; and (3) to disqualify Gorfinkle & Adler, the attorneys of record for the plaintiff, from continuing to represent the plaintiff in this action.
Although Cooke is not the attorney of record for the plaintiff, it is not disputed that thus far he has been actively associated with, and has played an important role in, the litigation.
The motions stem from the prior representation by Cooke of Universal in another matter.
In July 1946, Cooke was retained to represent Universal's interests in the well-known Paramount case after the Statutory Court had filed its opinion.
In May 1948, the Supreme Court rendered its opinion affirming in part and reversing in part the decree of the Statutory Court. Cooke then worked on a proposed petition for rehearing and on the order of mandate.
Cooke's representation of Universal ended, according to the latter, on July 7, 1948; according to him, on or about February 14, 1951. Subsequently, on October 17, 1951, Cooke brought suit against Universal for a claimed balance due him on account of services rendered in the Paramount litigation. In that suit, which is still pending, he is represented by Mr. Kahan. The controversy as to dates is important here only to the extent that if we accept the date fixed by Cooke it narrows the gap between his former representation of Universal and his present representation of plaintiff against his former client Universal to less than a year. This gap is further narrowed when we consider that some of the complaints, admittedly prepared by Cooke, were in the process of preparation over an extended period of time.
The cases out of which this motion grew were commenced between January 23, 1952 and May 15, 1952. The motion presently relates to but one pending case.
At this point it is noted that the conspiracy so charged is substantially the same nation-wide conspiracy which was found to exist on the part of the defendants in the Paramount case. All the eight distributor-defendants therein are named as distributor-defendants in this action.
The plaintiff here alleges, more specifically, that from 1937 until the filing of the complaint, its Biltmore Theatre in Mt. Vernon, New York, was barred from receiving "feature picture benefits"; that the theatre would have been able substantially to increase its revenue had it been granted a prior run; that the unreasonable
Universal seeks to disqualify Cooke from now acting as attorney against it upon two separate grounds: (1) that the causes of action asserted by the plaintiff against Universal are based substantially on the identical charges made against it and the other distributor-defendants in the Paramount case, so that as present counsel for the plaintiff he will necessarily be called upon to prove against Universal, his former client, the very charges against which he had earlier defended it. Cooke's disqualification is urged irrespective of any showing that actual confidential information relating to the case had been received by him during the former representation; (2) that, in fact, matters of confidence were disclosed to Cooke while he acted as Universal's counsel in the Paramount litigation which are related to the issues at bar; and that his current representation of the plaintiff involves, or may involve, the disclosure or use of such confidences.
Cooke disputes that the Paramount litigation and the present triple damage suit involve the same matters. As to Universal's second ground for his disqualification, he contends that he received no confidential communications from Universal, that there was no necessity therefor; that his services as appeal counsel in the Paramount case were based upon the "cold record" and that prior to his entry into the case the government had fully exposed and made publicly available all the defendants' files and records, including, of course, Universal's. Finally, no attempt is made, he says, to relate any confidential communications allegedly received by him to any use which might be made of them in T. C.'s triple damage suit against Universal and others.
A lawyer's duty of absolute loyalty to his client's interests does not end with his retainer. He is enjoined for all time, except as he may be released by law, from disclosing matters revealed to him by reason of the confidential relationship. Related to this principle is the rule that where any substantial relationship can be shown between the subject matter of a former representation and that of a subsequent adverse representation, the latter will be prohibited.
This salutory principle is summed up in Canon 6 of the Canons of Professional Ethics adopted by the American Bar Association,
It is upon this Canon that movant places its principal reliance. I agree that if Cooke's present retainer by T. C. falls within this Canon, he is disqualified to represent it.
I am not in accord with Mr. Cooke that Universal is required to show that during the Paramount litigation it disclosed matters to him related to the instant case. Rather, I hold that the former client need show no more than that the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him, the former client. The Court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent. Only in this manner can the lawyer's duty of absolute
To compel the client to show, in addition to establishing that the subject of the present adverse representation is related to the former, the actual confidential matters previously entrusted to the attorney and their possible value to the present client would tear aside the protective cloak drawn about the lawyer-client relationship. For the Court to probe further and sift the confidences in fact revealed would require the disclosure of the very matters intended to be protected by the rule. It would defeat an important purpose of the rule of secrecy—to encourage clients fully and freely to make known to their attorneys all facts pertinent to their cause.
It is true that in the Paramount suit the government was the plaintiff, whereas here an independent exhibitor is the plaintiff; that the exhibitor-defendants in the Paramount case did not include some of the exhibitor-defendants named here; that the Paramount case was concerned with a nation-wide conspiracy, whereas plaintiffs charges here relate mainly to its local situation. In these respects it may be acknowledged that the two actions are not identical. But a comparison of the plaintiff's complaint with the findings of fact, conclusions of law and decree in the Paramount case shows beyond peradventure that the plaintiff charges and relies upon the same conspiracy which the government established against the defendants in the Paramount case. The same distributor-defendants are named in both suits. The conspiracy charged in the two cases traverse substantially the same periods. Cooke in opposing a motion to dismiss the original complaint (drafted by him) categorically stated that the essential allegations charging a conspiracy by Universal and others against independent exhibitors, such as the present plaintiff, were pleaded in haec verba from the opinion and decree in the Paramount case. Thus, charges now made by Cooke on behalf of his present client against Universal parallel those against which he previously had defended Universal. The only difference is that plaintiff here asserts that it was the victim of the conspiracy, whereas in the government suit specific individuals were not identified.
A government suit, while primarily in the public interest, if successful, also accrues to the immediate benefit of those injured by the wrongful conduct. Section 5
The defendants and their counsel were not unaware of the importance of the decree to possible future triple damage suits. For example, while the appeal was pending, Cooke in a letter to his client, Universal, stressed the importance of the decree, stating "* * * the decree, if unreversed, makes you prima facie guilty of violating the Sherman Act, in triple damage suits * * *."
The findings of fact and conclusions of law which are incorporated by reference in the decree, insofar as they are pertinent to the plaintiffs situation, may also be made use of to further the attack against Cooke's former client. Cooke replies, however, that these are matters of public record, available to all.
In sum, enough appears to show that Mr. Cooke's present representation deals with matters as to which his former client reposed confidence in him. Hence, I hold that Mr. Cooke is disqualified from acting as counsel for the plaintiff in this case in any capacity so long as Universal is a party defendant, and the motion is granted to this extent.
I am willing to assume that Cooke in undertaking to act as counsel for plaintiffs in the current triple damage suits believed that these cases did not bring him into conflict with his former representation of Universal.
I next consider the application made by the other defendants for the same relief. During the pendency of the current motion, Universal's co-defendants in this action, who were its co-defendants in the Paramount action, joined to obtain similar relief. No professional relationship existed between them and Cooke. They contend, however, that Cooke participated in conferences with their counsel, during the course of which various confidential matters were considered. But I am satisfied on the papers and examination of the deposition which was submitted as part of the proof before me that the nature of these conferences was not such as to involve any disclosure of confidential information. The conferences related essentially to procedural matters in connection with the pending appeal common to all the defendants. Further, with respect to at least a number of Universal's co-defendants, he took a position adverse to them on the appeal and in connection with findings, and in consequence, the relationship appears to have been a guarded rather than a confidential one. Hence, the motion is denied as to the movants other than Universal.
Finally, there is the application to disqualify Messrs. Kahan and Gorfinkle & Adler. Kahan, as already noted, is the attorney for Cooke in the suit to recover the balance of fees and has also been engaged as trial counsel for the plaintiff in this case. Here I will assume that confidential information material to T.C.'s case was actually imparted to Cooke during the Paramount litigation. Universal contends that it must be presumed that Cooke has passed it on to those with whom he is associated in this suit. Universal admits that there is no direct evidence that this has been done, but asserts that because Kahan is Cooke's lawyer in the fee suit, it necessarily follows that Cooke in enumerating his services to him made full disclosure of all that Universal told him.
I have fully reviewed the deposition taken by Universal of Cooke in connection with that suit and nothing therein warrants such an inference and I am unwilling to draw it upon this record.
Cooke's right to recovery of additional fees, if any, does not depend upon the disclosure of confidential communications, but, rather, upon the nature, extent and importance of the services performed by him. He could enumerate the various conferences
There is even less basis for the claim against Messrs. Gorfinkle & Adler. Movant again presses upon the Court a "presumption" that they must have retained Cooke in order to make use of confidential information he received in the course of his former employment. It is not clear why it should presume the attorneys have acted unethically. On the contrary, I would presume that Messrs. Gorfinkle & Adler had no such motivation. Cooke was probably retained for the same reason that Universal retained him in the Paramount case—because of his special experience in antitrust matters.
The motion with respect to Messrs. Kahan and Gorfinkle & Adler is denied.
Settle order on notice.