Opinion ID: 2145153
Heading Depth: 1
Heading Rank: 6

Heading: substantially related test

Text: Our first inquiry, and to a great extent the resolution of this action, involves a determination of what is meant by the phrase substantially related subject matter. In State ex rel. Freezer Servs., Inc. v. Mullen, 235 Neb. 981, 987, 458 N.W.2d 245, 249-50 (1990), this court announced the rule that `[a]n attorney, after receiving the confidence of a client, may not enter the service of others whose interests are adverse to such client, in the same subject-matter to which the confidence relates, or in matters so closely allied thereto as to be, in effect, a part thereof.' In State ex rel. FirsTier Bank v. Buckley, 244 Neb. at 45, 503 N.W.2d at 844, this court expanded the rule announced in State ex rel. Freezer Servs., Inc., by stating that an attorney must avoid the present representation of a cause against a client of a law firm ... which he or she ... formerly [represented], and which cause involves a subject matter which is the same as or substantially related to that handled by the former firm while the present attorney was associated with that firm. See, also, State ex rel. FirsTier Bank v. Mullen, supra . However, this general rule arose, and has only been applied, in the context where an attorney or attorneys ceased working for a law firm that represented a particular client and then began working for another law firm in a position adversarial to that client. See, id.; State ex rel. FirsTier Bank v. Buckley, supra . In the instant case, no attorneys switched law firms. Instead, Smith of Van Steenberg formerly defended Wal-Mart, and Petitt of Van Steenberg is now suing Wal-Mart. Nonetheless, this court has made it patently clear that confidences and secrets possessed by an attorney are presumptively possessed by other members of the attorney's firm. State ex rel. FirsTier Bank v. Mullen, 248 Neb. at 389, 534 N.W.2d at 579. Accord, State ex rel. Freezer Servs., Inc. v. Mullen, supra . As such, an attorney or law firm must avoid the present representation of a cause against a client that the attorney or law firm formerly represented, and which cause involves a subject matter which is the same as or substantially related to that formerly handled by the attorney or law firm. In State ex rel. FirsTier Bank v. Buckley, 244 Neb. at 44, 503 N.W.2d at 843, we stated that [i]n defining `substantially related,' the court looked at whether counsel may have received confidential information from the former client that could be used against it in the subsequent representation. However, it is now necessary to further define what constitutes a substantially related subject matter. In fashioning a substantially related subject matter test, a court must balance several competing considerations, including the privacy of the attorney-client relationship, the prerogative of a party to choose counsel, and the hardships that disqualification imposes on parties and the entire judicial process. State ex rel. Creighton Univ. v. Hickman, 245 Neb. 247, 512 N.W.2d 374 (1994); State ex rel. FirsTier Bank v. Buckley, supra . However, the preservation of client confidences is given greater weight in that balancing. State ex rel. FirsTier Bank v. Buckley, supra . Mindful of these competing interests, we determine that the subject matters of two causes are substantially related if the similarity of the factual and legal issues creates a genuine threat that the affected attorney may have received confidential information in the first cause that could be used against the former client in the present cause. Simply stated, if the court determines that the unique factual and legal issues presented in both cases are so similar that there exists a genuine threat that confidential information may have been revealed in the previous case that could be used against the former client in the instant case, then disqualification must ensue. A nonexhaustive list of the factors a court may consider in making this determination includes: whether the liability issues presented are similar; whether any scientific issues presented are similar; whether the nature of the evidence is similar; whether the lawyer had interviewed a witness who was a key in both causes; the lawyer's knowledge of the former client's trial strategies, negotiation strategies, legal theories, business practices, and trade secrets; the lapse of time between causes; the duration and intimacy of the lawyer's relationship with the clients; the functions being performed by the lawyer; the likelihood that actual conflict will arise; and the likely prejudice to the client if conflict does arise. Clearly, the appearance of impropriety and attempted screening procedures (Chinese Walls) do not address whether two causes are substantially related and, thus, are not factors that may be considered in determining whether or not to disqualify an attorney or firm.