*

The Honorable James S. Gwin, United States District Judge for the Northern District of Ohio, sitting by

designation.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 06a0380p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

NATIONAL UNION FIRE INSURANCE COMPANY OF

PITTSBURGH, PENNSYLVANIA and ILLINOIS

NATIONAL INSURANCE COMPANY,

Plaintiffs-Appellees,

v.

ALTICOR, INC., AMWAY CORPORATION, and

QUIXTAR, INC.,

Defendants-Appellants.

X

-

-

-

-

>

,

-

-

-

-

-

-

N

No. 05-2479

Appeal from the United States District Court

for the Western District of Michigan at Grand Rapids.

No. 05-00015—Richard A. Enslen, District Judge.

Decided and Filed: October 18, 2006 

Before: GILMAN and GRIFFIN, Circuit Judges; GWIN, District Judge.*

_________________________

ORDER AND OPINION

_________________________

GRIFFIN, Circuit Judge. Both plaintiffs-appellees, National Union Fire Insurance Company

of Pittsburgh, Pennsylvania, and Illinois National Insurance Company (collectively “plaintiff

National Union”) are represented by the Michigan law firm of Plunkett & Cooney, P.C. (“Plunkett”).

All three defendants-appellants, Alticor, Inc., Amway Corporation, and Quixtar, Inc., are represented

by the Michigan law firm of Wilson Young PLC (“Wilson Young”).

Attorney John Egan was employed by plaintiff National Union’s law firm, Plunkett, from

September 2003 until July 11, 2006. During that time, Egan represented this same plaintiff in this

very case and in other insurance-related matters involving defendant Alticor. Specifically, Egan

spent forty percent of his billable time representing plaintiff in insurance-coverage disputes against

defendant Alticor; he participated in depositions, document production and strategy sessions, and

he drafted pleadings, motions briefs, and reports for plaintiff. Indeed, in this very action, Egan

drafted plaintiff’s complaint for declaratory judgment and the FED.R.CIV. P. 26 initial disclosures.

In July 2006, Egan left the employ of Plunkett and, on July 17, 2006, became an associate with

defendants’ law firm, Wilson Young. The final briefs in this case were filed by the parties on

June 1, 2006. 

1
No. 05-2479 Nat’l Union Fire Ins., et al. v. Alticor, Inc., et al. Page 2

1

The ABA Model Rules of Professional Conduct have been adopted, at least in substantial part, by forty-five

states, the District of Columbia, the Virgin Islands, and numerous United States District Courts, including the Western

District of Michigan (W.D.MICH. LCIVR 83.1(j)), and the Eastern District of Michigan (E.D.MICH. LR 83.20(j))

(adopting MRPC).

2

With only minor changes not pertinent to this appeal, the MRPC is identical to the ABA’s Model Rules of

Professional Conduct.

National Union now moves to disqualify the Wilson Young firm from representing Alticor.

National Union’s motion proceeds on the theory of imputed disqualification, under which an

attorney’s conflict of interest may be imputed to his law firm under certain circumstances.

Specifically, National Union relies on two Michigan Rules of Professional Conduct (“MRPC”),

MRPC 1.9 and MRPC 1.10. 

 Previously, the ethics rules for attorneys practicing in our court were largely governed by

our common-law precedent. See, e.g., Manning v. Waring, Cox, James, Sklar & Allen, 849 F.2d 222

(6th Cir. 1988). However, with the wide-spread acceptance of the American Bar Association’s

Model Rules of Professional Conduct,1

 we now look to the codified Rules of Professional Conduct

for guidance. See, e.g., Duggins v. Steak ‘n Shake, Inc., 195 F.3d 828, 835 (6th Cir. 1999) (referring

to and following the ABA’s Model Rules of Professional Conduct and Model Code of Professional

Responsibility). We conclude that applying these accepted rules will lead to greater uniformity and

predictability with regard to the ethical code of conduct that we demand from the attorneys who

practice before us.

Application of the Rules of Professional Conduct are particularly applicable to the present

dispute involving Michigan-based law firms and attorneys, who, as members of the State Bar of

Michigan, are subject to the Michigan Rules of Professional Conduct.2

As an initial matter, we conclude that it is appropriate for this court to entertain National

Union’s motion and order whatever relief is warranted. In this regard, we agree with the following

observations made by the Michigan Court of Appeals: 

Plaintiff’s argument appears to be that judges have no ethical oversight regarding

their court officers and that the Attorney Grievance Commission is the exclusive

authority regulating the ethical obligations of attorneys.

In this regard, the plaintiff fails to understand the proper role of the court regarding

the ethical conduct of its officers. Starting with In re Mills, 1 Mich. 392 (1850),

Michigan has a long tradition of judicial oversight of the ethical conduct of its court

officers. . . . .

. . . .

The more recent cases in which our courts have taken affirmative action to enforce

our ethical standards and rules regarding counsel are Schlossberg v. State Bar Griev.

Bd., . . . 200 N.W.2d 219 (1972), Attorney General v. Public Service Comm., . . . 625

N.W.2d 16 (2000), In re Norris Estate, . . . 391 N.W.2d 391 (1986), [etc.] . . . Such

a practice is consistent with the Michigan Code of Judicial Conduct Canon 3(B)(3),

which provides in part: “A judge should take or initiate appropriate disciplinary

measures against a judge or lawyer for unprofessional conduct of which the judge

may become aware.”

Evans & Luptak, PLC v. Lizza, 650 N.W.2d 364, 368-69 (Mich. App. 2002). 
No. 05-2479 Nat’l Union Fire Ins., et al. v. Alticor, Inc., et al. Page 3

The Supreme Court has noted our inherent power to discipline attorneys who violate our

standards of ethical conduct: 

The Court of Appeals stated that the standard of professional conduct expected of an

attorney is defined by the ethical code adopted by the licensing authority of an

attorney’s home state, 734 F.2d, at 336, n.4, and cited the North Dakota Code of

Professional Responsibility as the controlling expression of the conduct expected of

petitioner. The state code of professional responsibility does not by its own terms

apply to sanctions in the federal courts. Federal courts admit and suspend attorneys

as an exercise of their inherent power; the standards imposed are a matter of federal

law. Hertz v. United States, 18 F.2d 52, 54-55 (CA8 1927).

The Court of Appeals was entitled, however, to charge petitioner with the knowledge

of and the duty to conform to the state code of professional responsibility. The

uniform first step for admission to any federal court is admission to a state court.

The federal court is entitled to rely on the attorney’s knowledge of the state code of

professional conduct applicable in that state court; the provision that suspension in

any other court of record creates a basis for a show cause hearing indicates that Rule

46 anticipates continued compliance with the state code of conduct.

In re Snyder, 472 U.S. 634, 645 n.6 (1985).

Accordingly, we exercise our authority to enforce the Rules of Professional Conduct with

respect to counsel who appear before this court, and turn to the substance of the MRPC cited by

National Union.

MRPC 1.9 is entitled “Conflict of Interest: Former Client” and its first two subsections

provide,

(a) A lawyer [Egan] who has formerly represented a client in a matter [plaintiff

National Union] shall not thereafter represent another person [defendant Alticor] in

the same or a substantially related matter in which that person’s interests are

materially adverse to the interests of the former client unless the former client

consents after consultation.

(b) Unless the former client consents after consultation, a lawyer shall not knowingly

represent a person in the same or a substantially related matter in which a firm with

which the lawyer formerly was associated has previously represented a client. . . .

MRPC 1.9(a) and (b). It is only MRPC 1.9(a) that applies here, because Egan himself formerly

represented National Union in this very matter. MRPC 1.9(b) does not apply; by its terms, it

governs situations where the lawyer’s former firm – but not the lawyer himself – represented the

now-opposing party.

Both common sense and the Comment to MRPC 1.9 make clear that the interests of Egan’s

present client (Alticor) and former client (National Union) are adverse in this matter. MRPC 1.9

Comment ¶ 2 provides, in pertinent part, “[w]hen a lawyer has been directly involved in a specific

transaction, subsequent representation of other clients with materially adverse interests clearly is

prohibited.” Plaintiff National Union expressly refuses to consent to Egan representing defendant

Alticor, so by the plain terms of MRPC 1.9(a), Egan himself could not represent Alticor (and indeed

he does not personally represent Alticor).

The question is whether Egan’s new firm, Wilson Young, must suffer imputed

disqualification even though Egan is not personally counsel for Alticor in this matter. MRPC 1.10,
No. 05-2479 Nat’l Union Fire Ins., et al. v. Alticor, Inc., et al. Page 4

entitled “Imputed Disqualification: General Rule,” squarely governs the instant situation. It

provides, in pertinent part,

(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, 1.8(c), 1.9(a) or (c), or 2.2.

MRPC 1.10(a) (emphasis added). Our inquiry ends here. As discussed above, MRPC 1.9(a)

prohibits Egan from representing Alticor or the other defendants-appellants against his former client

National Union in this same matter. Therefore, MRPC 1.10(a) states without qualification that no

lawyer in Egan’s new firm may represent Alticor or the other defendants-appellants against National

Union in this matter. Under these circumstances, Wilson Young cannot avoid imputed

disqualification by “screening” Egan from this matter, no matter how diligently. See generally,

Manning, 849 F.2d at 226-27.

Therefore, we GRANT plaintiffs-appellees’ motion to disqualify the law firm of Wilson

Young PLC from representing defendants-appellants in this matter. Alticor and the other

defendants-appellants must secure new counsel if they wish to proceed with this appeal. The court

orders that oral argument scheduled for November 1, 2006, is cancelled. New counsel shall be

retained within 28 days. New counsel shall file an appearance with the Clerk of this court

immediately upon being retained. 

It is so ORDERED.

ENTERED BY ORDER OF THE COURT

 /s/ Leonard Green

___________________________________ Clerk