Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02302/USCOURTS-ca10-88-02302-0/pdf.json

Parties Involved:
Charles Graham
Appellee
Michelle Graham
Appellee
Tammy Graham
Appellee
Wyeth Laboratories
Appellant

Document Text:

PUBLISH 

FI LED 

Uoited. States Court of Appeals 

Tenth Circuit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

· ~JUN 2 5 1990 

.ROBERT L. HOECKER 

Clerk 

MICHELLE GRAHAM, an infant under 

the age of eighteen who sues by 

HER parents, guardians and next 

friends, Charles Graham and 

Tammy Graham, 

Plaintiff-Appellee, 

v. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

WYETH LABORATORIES DIVISION OF ) 

AMERICAN HOME PRODUCTS CORPORATION,) 

Defendant-Appellant. 

) 

) 

Nos. 88-1337 

88-2302 

89-3066 

89-3121 

Appeal from the United States District Court 

for the District of Kansas 

(D.C. No. 85-1481) 

Wayne C. Dabb, Jr. of Baker & Hostetler, Cleveland, Ohio (Debra J. 

Arnett and Alvin D. Herrington of McDonald, Tinker, Skaer, Quinn & 

Herrington, P.A., Wichita, Kansas; Albert J. Knopp, Mary M. 

Bittence, and J. Jeffrey Zimmerman of Baker & Hostetler, 

Cleveland, Ohio; James M. Clark and Fred M. Winner of Baker & 

Hostetler, Denver, Colorado; and Hedy M. Powell of Wyeth-Ayerst 

Laboratories, Philadelphia, Pennsylvania, with him on the brief), 

for Defendant-Appellant. 

Marlys A. Marshall of Michaud & Hutton of Wichita, Kansas (Andrew 

w. Hutton of Michaud & Hutton, Wichita, Kansas; and Ted M. 

Warshafsky of Warshafsky, Rotter, Tarnoff, Gesler, Reinhardt & 

Bloch, Milwaukee, Wisconsin, with her on the brief), for 

Plaintiff-Appellee. 

Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 1 
Before SEYMOUR, MOORE, and GARTH,* Circuit Judges. 

SEYMOUR, Circuit Judge. 

Defendant Wyeth Laboratories moved pending appeal to 

disqualify plaintiff Michelle Graham's counsel from further 

representing her in this products liability litigation because of 

a purported conflict of interest. We disqualified counsel at oral 

argument and announced our intention to state our analysis in a 

published opinion. Upon further study, we now hold that 

dispositive factual issues remain unresolved on the 

disqualification issue, necessitating an evidentiary hearing. 

Because we have reversed on the merits of the appeal in a separate 

opinion, 1 we remand the disqualification motion to the district 

court for further proceedings in conjunction with the new trial we 

have ordered on the merits. 

I . 

The underlying dispute arose from Michelle Graham's 

innoculation with Wyeth's DPT vaccine, which allegedly caused her 

severe injuries. Graham retained the law firm of Michaud, Hutton 

& Bradshaw (Michaud), along with co-counsel Warshafsky, Rotter, 

* The Honorable Leonard I. Garth, Senior United States Court of 

Appeals Judge for the Third Circuit, sitting by designation. 

1 See Graham ex rel. Graham v. Wyeth Labs., __ F.2d Nos. 

88-1337, 88-2302, 89-3066, 89-3121 (10th Cir. June , 1990). 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 2 
Tarnoff, Gesler, Reinhardt & Bloch (Warshafsky), to represent her. 

Wyeth retained the law firm of McDonald, Tinker, Skaer, Quinn & 

Herrington, P.A. (McDonald, Tinker), along with Baker & Hostetler, 

to defend it. 

In April 1985, Graham filed a diversity action against Wyeth 

in the Kansas federal district court alleging negligence and 

strict liability. The case proceeded to trial, and the jury 

entered its verdict in favor of Graham. Wyeth appealed on various 

grounds. While the appeal was pending, Randall Fisher, previously 

a litigation partner with Wyeth's counsel McDonald, Tinker, joined 

the Michaud firm as an associate. Wyeth refused to waive any 

potential conflict created by Fisher's association with the 

Michaud firm. Instead, Wyeth filed the instant motion under 

Fed. R. App. P. 28 to disqualify the entire Michaud firm from any 

future representation of Michelle Graham in her DPT case against 

Wyeth. 

Wyeth argued in its motion that Randall Fisher's involvement 

in various matters for Wyeth while he was at McDonald, Tinker not 

only requires Fisher's disqualification, but that Fisher's 

conflict should be imputed to the entire Michaud firm. In support 

of this argument Wyeth referred us to the district court's 

conclusions of fact in Geisler ex rel. Geisler v. Wyeth Labs., 716 

F. Supp. 520 (D. Kan. 1989), a similar DPT case involving a 

different plaintiff in which Michaud and McDonald, Tinker are 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 3 
again on opposite sides of the counsel table. As in the instant 

motion, Wyeth sought disqualification of Michaud in Geisler 

because of Fisher's prior involvement while at McDonald, Tinker. 

Indeed, both parties agree that the facts of both cases are in all 

pertinent respects identical. 

The court in Geisler suggested to the lawyers that they agree 

on the basic facts in an effort to avoid an evidentiary hearing. 

The parties did so, and the court made findings based on those 

facts. In lieu of repeating the somewhat lengthy conclusions of 

fact in Geisler, we refer the reader to 716 F. Supp at 521-23 and 

incorporate the factual conclusions set out there into this 

opinion. On the basis of those facts, the district court in 

Geisler ruled that Randall Fisher is disqualified from 

representing the plaintiff against Wyeth. See id. at 521. In so 

holding, the court found that the Geisler DPT litigation was 

"substantially related'' to matters Fisher had worked on for Wyeth 

while at McDonald, Tinker. The court then concluded that "(o]nce 

a substantial relationship has been found, a[n irrebuttable] 

presumption arises that a client has revealed facts to the 

attorney which require his disqualification. 112 Id. at 525 (citing 

Smith v. Whatcott, 757 F.2d 1098, 1100 (10th Cir. 1985). 

2 After the court in Geisler issued its ruling, it certified 

the issue for appeal. Wyeth then filed a motion for an 

interlocutory appeal under 28 u.s.c. § 1292(b) (1988). Geisler 

subsequently moved to remand the appeal to the district court for 

further proceedings. These motions currently are under 

submission. 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 4 
In determining whether Fisher's disqualification should 

extend to the entire Michaud firm, the court invoked Model Rule of 

Professional Conduct l.lO(a), see infra at 7, applicable to 

lawyers in the same firm, which operates to disqualify the entire 

firm from representing a client if any one lawyer practicing alone 

would be so disqualified. Because Fisher individually was 

disqualified, the court held that the entire Michaud firm was also 

disqualified unless it could show that it had adequately screened 

Fisher from involvement in the Geisler DPT case. The court then 

found that Fisher had been adequately screened, and concluded that 

Michaud could continue representing Geisler. See Geisler, 716 F. 

Supp. at 527. 

After the instant motion had been fully briefed and just 

prior to oral argument on Wyeth's appeal, the Kansas Supreme Court 

decided Parker v. Volkswagenwerk Aktiengesellschaft, 245 Kan. 580, 

781 P.2d 1099 (1989), another case concerning Randall Fisher's 

move from McDonald, Tinker to Michaud. In Parker, the court held 

that Rule l.lO(b), see infra at 7, rather than Rule l.lO(a) as 

applied in Geisler, provides the correct analysis when a lawyer 

changes firms and disqualification of the lawyer's newly adopted 

firm is sought. See 781 P.2d at 1106. The court held further 

that before the lawyer's new firm is disqualified, the court must 

determine as a factual matter whether the moving lawyer acquired 

actual knowledge of client confidences. 

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See id. Finally, the 

Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 5 
Kansas court rejected screening as a means by which an otherwise 

disqualified firm may continue with its representation. See id. 

at 1106-07. 

At oral argument, we asked counsel for both sides to address 

the impact of Parker on the instant motion and to state why the 

facts in Geisler should not be adopted for purposes of deciding 

the identical issue in the instant motion. After hearing argument 

on the disqualification issues, we recessed temporarily to 

consider how to proceed with oral argument on the merits of the 

appeal. We noted that in addition to being represented at oral 

argument by the Michaud firm, Graham was also represented by 

co-counsel Ted Warshafsky, who informed us that he was prepared to 

argue the merits of the appeal. On the basis of the Geisler 

conclusions of fact, but without briefing on the impact of Parker, 

we determined that the most prudent course under the circumstances 

would be to issue a bench ruling disqualifying Michaud from 

representing Graham in oral argument, pending issuance of a formal 

explanatory ruling after further study of the newly-issued Parker 

decision. 

II. 

We start our analysis with the Model Rules of Professional 

Conduct adopted by the Kansas Supreme Court as "general standards 

of conduct and practice required of the legal profession in 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 6 
Kansas." Kan. s. Ct. Rule 226, Prefatory Rule, Kan. Court Rules & 

Proc. (West 1990); see also Rule 407 of the Local Rules of the 

District of Kansas, Kan. Court Rules & Proc. (West 1990) (adopting 

Kansas Supreme Court version of Model Rules as standards of 

professional conduct in Kansas federal district court). The 

Kansas Supreme Court has also adopted a modified form of the 

comments accompanying the Model Rules to the extent that they are 

not inconsistent with the Rules themselves or the statutory or 

case law of Kansas. See Kan. s. Ct. Rule 226, Prefatory Rule. 

Rule 1.10, concerning the disqualification of an entire firm, 

provides in part as follows: 

"(a) While lawyers are associated in a firm, none of 

them shall knowingly represent a client when any 

one of them practicing alone would be prohibited 

from doing so by Rules 1.7, l.8(c), 1.9, or 2.2. 

"(b) When a lawyer becomes associated with a firm, the 

firm may not knowingly represent a person in the 

same or a substantially related matter in which 

that lawyer, or a firm with which the lawyer was 

associated, had previously represented a client 

whose interests are materially adverse to that 

person and about whom·the lawyer had acquired 

information protected by Rules 1.6 and l.9(b) that 

is material to the matter. 

"(c) When a lawyer has terminated an association with a 

firm, the firm is not prohibited from thereafter 

representing a person with interests materially 

adverse to those of a client represented by the 

formerly associated lawyer unless: 

(1) the matter is the same or substantially 

related to that in which the formerly 

associated lawyer represented the client; and 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 7 
(2) any lawyer remaining in the firm has 

information protected by Rules 1.6 and l.9(b) 

that is material to the matter." 

Kan. S. Ct. Rule 226, Rule 1.10 (emphasis added). The emphasized 

language suggests that the analysis differs according to whether 

the conflicted lawyer remains with the same firm throughout the 

prior and current representations, or changes firms. The comment 

to Rule 1.10 states that "[p]aragraph (a) operates only among the 

lawyers currently associated in a firm. When a lawyer moves from 

one firm to another, the situation is governed by paragraphs (b) 

and (c)." Id., comment to Rule 1.10. The emphasized language 

also indicates that paragraph (b) applies when disqualification of 

the moving lawyer's new firm is sought, while disqualification of 

the lawyer's old firm after his departure is controlled by the 

principles of paragraph (c). Since Wyeth seeks to disqualify 

Randall Fisher's new firm, Rule l.lO(b) governs our analysis~ See 

Parker, 781 P.2d at 1106 (motion to disqualify Michaud because of 

Randall Fisher's involvement in adverse party's matter while at 

McDonald, Tinker "clearly falls under MRPC l.lO(b)''). 

When parsed into its elements, Rule l.lO(b) will disqualify a 

lawyer's new firm when: (1) the moving lawyer, or his or her 

prior firm, had represented a client whose interests are 

materially adverse to the client at the new firm; (2) the matter 

in the new firm is the same or substantially related to the 

previous representation; (3) the lawyer had acquired information 

protected by Rules 1.6 and l.9(b) that is material to the matter 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 8 
in the new firm; and (4) the new firm knows of the conflict 

arising from its representation. The satisfaction of elements (1) 

and (4) is not in dispute. Michelle Graham's interests are 

clearly adverse to Wyeth's and Michaud is fully aware of any 

potential conflict. Elements (2) and (3) call for more analysis. 

Element (2) requires that the prior and current 

representations concern the same or substantially related matters. 

While Fisher's work for Wyeth at McDonald, Tinker was not on the 

same matter involved in Michelle Graham's case, Wyeth argues that 

the matters are ''substantially related." 3 Although the term 

''substantially related" is not defined in either the Rules, the 

comment, or the Kansas case law, it has acquired the status of a 

term of art in the general law of attorney conflicts of interest. 

See,~, Smith, 757 F.2d at 1100. We have defined this term 

previously to mean that the "'factual contexts of the two 

representations are similar or related.'" Id. (quoting Trust 

Corp. v. Piper Aircraft Corp., 701 F.2d 85, 87 (9th Cir. 1983)). 

Applying this test to basically identical facts, the court in 

the Geisler DPT case concluded that: 

"(T]he litigation in Taylorl 4 l parallels the litigation 

3 It is undisputed that Fisher was a member of the McDonald, 

Tinker firm throughout much of the proceedings below in Graham, 

although Wy~th does not claim that he actually worked on the case. 

4 · In Taylor v. Wyeth Labs., Case No. 84-1474-C (D. Kan), Fisher 

represented Wyeth in a matter involving an oral contraceptive 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 9 
in the instant case in many respects. Taylor alleges 

personal injuries arising from the use of a prescription 

drug manufactured by Wyeth; Geisler alleges injuries 

resulting from a DPT vaccine manufactured by Wyeth. 

Both cases allege strict liability ~n tort and 

negligence. More importantly, Wyeth's medical director, 

whom Fisher personally interviewed, plays a key role in 

both types of cases. The court therefore finds that 

under MRPC 1.9, Fisher's former representation of Wyeth 

in the oral contraceptive litigation is 'substantially 

related' to the instant [DPT] litigation." 

Geisler, 716 F. Supp. at 525. We agree with this analysis, and we 

believe it is equally applicable to the DPT litigation here in the 

context of firm-wide disqualification under Rule l.l0(b). 5 

Element (2) is therefore satisfied. 

Element (3) mandates an inquiry into whether the lawyer 

acquired information at the old firm protected by Rules 1.6 and 

l.9(b) that is material to the matter. Rule 1.6 prohibits 

revelation without consent of "information relating to 

representation of a client," while Rule l.9(b) prohibits its use 

to a former client's disadvantage. See Kan. S. Ct. Rule 226, 

Rules 1.6 & l.9(b). The Kansas Supreme Court in Parker quoted 

product. See conclusions of fact in Geisler, 716 F. Supp. at 522. 

5 Wyeth argues that our decision in Smith v. Whatcott, 757 F.2d 

1098 (10th Cir. 1985), requires that we disqualify Michaud solely 

on the basis of the "substantial relationship" between the matters 

in which Fisher was involved for Wyeth while at McDonald, Tinker 

and the present case. Our decision in Smith, however, arose out 

of a Utah diversity action involving Utah law firms. The present 

case, by contrast, arose in Kansas, where the Model Rules of 

Professional Conduct, and Kansas case law construing them, 

control. 

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Appellate Case: 88-2302 Document: 01019880110 Date Filed: 06/25/1990 Page: 10 
with approval that portion of the comment explaining the operation 

of this requirement: 

"Preserving confidentiality is a question of access 

to information. Access to information, in turn, is 

essentially a question of fact in particular 

circumstances, aided by inferences, deductions or 

working presumptions that reasonably may be made about 

the way in which lawyers work together. A lawyer may 

have general access to files of all clients of a law 

firm and may regularly participate in discussions of 

their affairs, it should be inferred that such a lawyer 

in fact is privy to all information about all the firm's 

clients. In contrast, another lawyer may have access to 

the files of only a limited number of clients and 

participate in discussion of the affairs of no other 

clients; in the absence of information to the contrary, 

it should be inferred that such a lawyer in fact is 

privy to information about the clients actually served 

but not those of other clients. 

"Application of paragraphs (b) and (c) depends on a 

situation's particular facts. In any such inquiry, the 

burden of proof should rest upon the firm whose 

disqualification is sought. 

"Paragraphs (b) and (c) operate to disqualify the 

firm only when the lawyer involved has actual knowledge 

of information protected by Rules 1.6 and l.9(b). Thus, 

if a lawyer while with one firm acquired no knowledge of 

information relating to a particular client of the firm, 

and that lawyer later joined another firm, neither the 

lawyer individually nor the second firm is disqualified 

from representing another client in the same or a 

related matter even though the interests of the two 

clients conflict." 

Parker, 781 P.2d at 1105 (emphasis added) (quoting comment to Rule 

1.10). 

Parker, like Geisler and the instant litigation, involved a 

potential conflict created by Randall Fisher's move from McDonald, 

Tinker to the Michaud firm. While at McDonald, Tinker, Fisher had 

performed some legal research for the defendant, Volkswagen, which 

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was to be used in the Parker case. See id. at 1103. As in the 

present case, moreover, Fisher had attended weekly litigation 

meetings where information relating to representation of 

Volkswagen could have been discussed. See id. at 1102. Finally, 

Fisher's wife was the legal assistant who maintained the Parker 

files at McDonald, Tinker and worked on the case daily. Fisher 

would visit her often in her office and, occasionally, she would 

take some of the files to the Fisher home to work on them. Id. at 

1102. 

On the basis of the above, the trial judge in Parker 

disqualified the Michaud firm, and the plaintiff brought an 

interlocutory appeal to the Kansas Supreme Court. The Kansas 

Supreme Court noted that while both Randall Fisher and his wife 

testified in the disqualification proceedings in Parker, the trial 

judge made no findings as to whether Randall Fisher actually 

acquired protected information. The court remanded the 

disqualification issue to the district court for a "full hearing," 

reasoning as follows: 

"Where a motion to disqualify based on MRPC l.l0(b) 

has been filed, the district court must have a full 

hearing to determine whether the attorney in question 

acquired material and confidential information during 

the course of his former employment. To support a 

disqualification order, the district court must make a 

specific factual finding that the attorney had knowledge 

of material and confidential information. The model 

rules define knowledge as actual knowledge of the fact 

in question, but state that knowledge can be inferred 

from the circumstances. 

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"In the case at bar, only Mr. and Mrs. Fisher 

testified. That testimony was not sufficient to make a 

determination as to whether Randall Fisher acquired 

material and confidential information during the course 

of his employment with McDonald, Tinker. The district 

court must determine motions for disqualification on a 

case-by-case basis, remembering that the burden of proof 

lies with the attorney or firm who is sought to be 

disqualified. If it is determined that the attorney 

gained material and confidential information during the 

course of his or her previous employment, then both the 

attorney and the firm with whom he or she is presently 

associated are disqualified." 

Id. at 1106 (emphasis added). 

The motion in the instant case presents us with a nearly 

identical situation. The fact-findings we have adopted from the 

Geisler opinion lack a finding that Randall Fisher acquired 

material and confidential information while at McDonald, Tinker. 

Indeed, the court in Geisler specifically found it "unnecessary" 

to resolve the issue of actual knowledge because it erroneously 

applied the analysis in Rule l.lO(a) covering prior and current 

representations occurring in the same firm. See Geisler, 716 F. 

Supp. at 526. While the facts do present some circumstantial 

evidence from which actual knowledge could be inferred, inferences 

of fact should be made in the first instance by the fact-finder 

after the benefit of a full hearing in which the presence or 

absence of actual knowledge is in controversy. The court in 

Parker had comparable circumstantial evidence before it, but 

remanded the issue in lieu of making an inference of actual 

knowledge. We do so as well. 

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III. 

Although we disqualified the Michaud firm from oral argument 

on appeal, we now realize that we did so based on insufficient 

fact-findings. Given our reversal on the merits of Graham's 

appeal and our remand for new trial, we also remand Wyeth's 

disqualification motion to the district court for further 

proceedings in accordance with this opinion. 

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