Court Opinion

ID: 9470712
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:14:04.856458+00
Date Added: 2024-06-11T17:42:04.331572
License: Public Domain

COFFEY, Circuit Judge,
dissenting.
I am compelled to write separately and dissent as I believe the majority inexplicably refuses to accept or follow the mandates of the court’s three most recent decisions on the subject of attorney disqualification. The majority’s decision casts aside, without a valid legal basis, this court’s reasoning set forth in the recent cases of LaSalle National Bank v. County of Lake, 703 F.2d 252 (7th Cir.1983), Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir.1982), and Novo Terapeutisk, etc. v. Baxter Tra-venol Lab, 607 F.2d 186 (7th Cir.1979), in which this court took a more enlightened perspective, contemporaneous with the modern practice of law, on the law of attorney disqualification, rejecting the irrebutta-ble presumption that the knowledge of one attorney in a law firm is shared with the entire firm, and holding that the presumption of intra-firm sharing of confidences is rebuttable. The majority has incorrectly distinguished the holdings of LaSalle National Bank, Freeman and Novo and instead has reverted to the same over-simplified analysis that existed prior to our three most recent decisions in the area of attorney disqualification. By attempting to distinguish rather than applying the thoughtful rationale of LaSalle National Bank, Freeman and Novo, the majority’s analysis in this case unnecessarily creates a conflict with our prior precedent and therefore can only generate problems and confusion for our district courts and for law firms as they attempt to deal with and reconcile our most recent pronouncements.
*1271Prior to LaSalle National Bank, Novo and Freeman, the accepted analysis in attorney disqualification matters was summary in nature, and thus if a substantial relationship existed between the prior representation and the present litigation, disqualification would and must automatically follow. See Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir.1978). This harsh iron-clad rule, however, was modified in Novo and Freeman. In Novo, this court agreed that the presumption that every attorney in the law firm has knowledge of the confidences and secrets of the firm’s clients is rebuttable. Novo, 607 F.2d at 197. This conclusion is necessary, as we noted in Freeman, just four and a half months ago, because “the possible appearance of impropriety ... is simply too weak and too slender a reed on which to rest a disqualification order . . . . ” 689 F.2d at 723. We went on in Freeman to address the question of the quality of proof required to rebut the presumption and held that “if an attorney can clearly and effectively show that he had no knowledge of the confidences and secrets of the client, disqualification is unnecessary .... ” Disqualification motions, as we noted, are drastic measures which courts should hesitate to impose except when absolutely necessary. 689 F.2d at 721.
A review of the facts and holding of this court’s most recent decision on attorney disqualification, LaSalle National Bank, clearly demonstrates, contrary to the majority’s interpretation, that that case does not support an irrebuttable presumption of shared confidences. In LaSalle National Bank, the defendant County of Lake brought a motion seeking disqualification of the plaintiff’s law firm, on the grounds that one of the firm’s associates had formerly been employed as a State’s Attorney in Lake County. After determining that there was a “substantial relationship” between the present litigation and the associate’s previous work for the County, this court properly determined that the individual associate was precluded from representing the plaintiff according to the guidelines reaffirmed in this opinion. The court then turned to the question of whether the disqualification of one associate automatically required the disqualification of the whole firm,
“Having found that Mr. Seidler was properly disqualified from representation of the plaintiffs in this case, we must now address whether this disqualification should be extended to the entire law firm of Rudnick & Wolfe. Although the knowledge possessed by one attorney in a law firm is presumed to be shared with the other attorneys in the firm, Schloet-ter, 546 F.2d at 710-11, this court has held that this presumption may be rebutted. Novo Terapeutisk, 607 F.2d at 197. The question arises here whether this presumption may be effectively rebutted by establishing that the ‘infected’ attorney was ‘screened’, or insulated, from all participation in and information about a case, thus avoiding disqualification of an entire law firm based on the prior employment of one member.”
Id. at 257 (emphasis added). The court went on to hold that a law firm defending against a disqualification motion may rebut the presumption of intra-firm sharing of confidences by demonstrating that a timely and effective “Chinese Wall” has been established to insulate against the flow of confidences from the tainted lawyer to his colleagues in the law firm,
“The screening arrangements which courts and commentators have approved, . . . contain certain common characteristics. The attorney involved in the Armstrong v. McAlpin [625 F.2d 433 (2d Cir. 1980) ] case, for example, was denied access to relevant files and did not share in the profits or fees derived from the representation in question; discussion of the suit was prohibited in his presence and no members of the firm were permitted to show him any documents relating to the case; and both the disqualified attorney and others in his firm affirmed these facts under oath. 625 F.2d at 442-43. The screening approved in the Kesselhaut [v. United States, 555 F.2d 791 (Ct.Cl.1977)] case was similarly specific: all other attorneys in the firm were forbid*1272den to discuss the case with the disqualified attorney and instructed to prevent any documents from reaching him; the files were kept in a locked cabinet, with the keys controlled by two partners and issued to others only on a ‘need to know’ basis. 555 F.2d at 793. In both cases, moreover, as well as in Greitzer & Locks, the screening arrangement was set up at the time when the potentially disqualifying event occurred, either when the attorney first joined the firm or when the firm accepted a case presenting an ethical problem.”
Id. at 259.
The court in LaSalle National Bank concluded that the law firm had failed to rebut the presumption of shared confidences under the facts of that case since “no specific institutional mechanisms were in place to insure that that information was not shared, even if inadvertently,” prior to filing of the disqualification motion.
Contrary to the majority’s assertion, La-Salle National Bank does not support the majority’s reliance on an irrebuttable presumption of shared confidences. Rather, the court in LaSalle National Bank expressly held that the presumption of shared confidences is rebuttable, and that the presumption may be rebutted if the law firm is able to demonstrate that a timely and effective “Chinese Wall” has been established to prevent disclosure of confidences. The LaSalle National Bank decision, like Freeman and Novo, mandates that Schwartz & Freeman be afforded the same opportunity to rebut the presumption of shared confidences.
The majority seeks to ignore the clear import of the LaSalle National Bank case in two ways, both of which are entirely without merit. First, the majority claims that the LaSalle National Bank holding is inapplicable to this case because in LaSalle National Bank a lawyer switched employment from one firm (or government agency) to another law firm, while in this case a law firm switched sides by representing interests adverse to a former client. However, the LaSalle National Bank opinion fails to make a distinction between a lawyer changing employment and a law firm switching sides, nor does it limit its holding to fact situations involving individual attorneys changing employment, but the majority in this ease reads these distinctions into the LaSalle National Bank opinion, in a manner which strains the limits of logical legal reasoning. Significantly, both Freeman and the en banc opinion in Novo also fail to allude to the factual distinction which the majority argues is so critical.
Second, the majority contends that Schwartz & Freeman must be disqualified since LaSalle National Bank held that, in order to avoid disqualification, a firm must demonstrate that an effective “Chinese Wall” or other safeguard was established early enough to prevent even an inadvertent intra-firm disclosure of a former client’s confidences. The fallacy of the majority’s reliance on LaSalle National Bank is patently obvious — how is a judge supposed to determine whether or not timely and effective safeguards have been established if the law firm is afforded no opportunity to rebut the presumption of shared confidences? The critical point made in LaSalle National Bank is that there must be an opportunity to rebut the presumption of shared confidences, and thus LaSalle National Bank is diametrically opposed to the majority decision in this case. Ignoring this critical aspect of the LaSalle National Bank holding, the majority concludes that Schwartz & Freeman must be disqualified since “Schwartz & Freeman has never offered to prove — has never so much as intimated — that any institutional mechanisms were in place in this case.” It is obvious why the record is silent on whether in fact Schwartz & Freeman had established, or even attempted to establish, effective safeguards, such as a “Chinese Wall” — the district court based its disqualification order on an irrebuttable presumption of intra-firm sharing of confidences and emphatically blocked Schwartz & Freeman from presenting their full case to rebut the presumption, much less to even address the question of whether or not a “Chinese *1273Wall” was in effect at that time or, whether any safeguards were in effect or even contemplated. In fact, the court at one point even went so far as to threaten to strike on its own motion the sparse rebuttal evidence it did allow Schwartz & Freeman to present, and frustrated Schwartz & Freeman’s attempt to preserve their attorney-client relationship and their professional reputation, by imperiously stating: “The point is we are dealing with an irrebuttable presumption....” The facts in the record should not be misconstrued to achieve the desired result. The case law of this circuit mandates that Schwartz & Freeman must be afforded an opportunity to rebut the presumption of shared confidences by demonstrating, if possible, that (1) none of the confidences of NPD (the former clients) have been shared with the Schwartz & Freeman attorneys handling the monopolization suit and (2) that effective safeguards, such as a “Chinese Wall,” were instituted as soon as the attorney or law firm became aware, or as soon as a reasonable attorney should have been aware, of the possible conflict of interest. The crucial point is that they should at least be given an opportunity to rebut the presumption of shared confidences.
Furthermore, the majority’s extensive reliance on Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1321 (7th Cir.1978) is clearly unfounded. As we recently recognized in LaSalle National Bank, the Kerr-McGee case involved “simultaneous representation of adverse interests” by the Washington and Chicago offices of a large law firm, and disqualification of the law firm was required since no firm, no matter how large, can represent two sides in a controversy at the same time, (emphasis added). Thus, Kerr-McGee is inapposite to this case involving subsequent representation of adverse interests. The time elapsed since the prior adverse representation should be one factor to consider in deciding whether the presumption of shared confidences has been rebutted. See Lieb-man, The Changing Law of Disqualification: The Role of Presumption and Policy, 73 Nw.U.L.Rev. 996, 1016 (1979). By analogy, a judge who formerly was a member or associate of a law firm is not barred for life from hearing cases involving his former firm; rather the length of time elapsed since his former employment is one factor the judge must reflect upon and consider in determining if and when to recuse himself.
Applying the LaSalle National Bank, Freeman and Novo analysis to the facts of this case, I agree with the majority that Attorney Fine (the Schwartz & Freeman attorney acting as ostensible counsel for NPD in the stock transfer matter) had access to confidential financial and operating data which would be vital information in the monopolization suit. I disagree, however, with the majority’s conclusion that since Attorney Fine had confidential financial information, the entire Schwartz & Freeman law firm should automatically be disqualified because of an irrebuttable presumption that the confidences acquired in the prior representation were necessarily shared with Page, and with other Schwartz & Freeman attorneys involved in the monopolization suit. Rather, the ease law of this circuit mandates that the Schwartz & Freeman firm be afforded the opportunity to rebut the questionable “irrebuttable” presumption that the knowledge of one individual attorney, Fine, was imputed to the entire firm, including Page. In the disqualification hearing, Schwartz & Freeman sought to rebut the supposed irrebuttable presumption by introducing the sworn testimony of Page stating that Fine never in fact did reveal any of NPD’s confidences to him (Page) nor to the best of his knowledge to any other member of the firm. The district court emphatically refused to consider this sworn testimony to rebut the questionable irrebuttable presumption, stating that it would allow Schwartz & Freeman to introduce such testimony only as an offer of proof for the limited purpose of making a record for appeal:
“Q. You are aware, are you not, from hearing the testimony of Todd Johnson [President of NPD] that he claims to have communicated to Richard Fine in 1976 information generally concerning *1274NPD’s future plans and strategies, NPD’s position in the industry, NPD’s prospects for success, NPD’s future business investments, and the manner in which NPD carries on its business. Are you aware of that testimony?
“A. I recall the testimony generally.
“Q. Was any such claimed information communicated to you by Mr. Fine?
“Mr. Fornaciari: Objection, your Hon- or, relevance.
“By The Witness:
“A. No.
“The Court: The objection is sustained, and I should state again in case I have not made it clear for the record that I am simply not going to consider that testimony of Johnson.
“If I were going to consider that testimony of Johnson then obviously I would consider the testimony of Mr. Fine and Mr. Page. But my belief is that I made a mistake in receiving that testimony in the first instance, and I suppose the proper thing for me to do, if a motion were made, is to strike it. No one has made such a motion. Maybe I should strike it on my own motion.
“Mr. Elson: Your Honor, under our theory of the case we would want this in the record anyway.
“The Court: All right. But in any case I want to make it clear that my ruling is simply that this testimony on both sides is irrelevant.”
In refusing to consider Page’s sworn testimony, the district court relied solely on the Kerr-McGee holding of an irrebuttable presumption that the knowledge of one individual attorney, Fine, was imputed to the entire law firm, including Page, to justify disqualifying the Schwartz & Freeman law firm.
“The Court: The point is we are dealing with an irrebuttable presumption that there were confidences.”1
The irrebuttable presumption that all information is shared among every attorney in a firm ignores the practical realities of modern day legal practice. The practice of law has changed dramatically in recent years, with many lawyers working in firms consisting of 20, 30, 60, 100 or even 300 or more attorneys, and with some firms having offices located throughout the country or even throughout the world. Additionally, the trend within law firms has been toward greater specialization and departmentalization. Surely, it defies logic and common sense to establish a presumption, with no opportunity for rebuttal, that every individual lawyer in such a multi-member and multi-specialized firm has substantial knowledge of the confidences of each of the firm’s clients. Recognizing these realities of the modern practice of law, we must continue to take a more realistic view toward the law of attorney disqualification by allowing the presumption that confidences have been shared throughout a firm to be rebuttable, as we have held in Freeman and Novo. The district court’s decision to automatically disqualify the entire law firm based on an irrebuttable presumption is unreasonable and unrealistic and is directly contrary to our holdings in LaSalle National Bank, Freeman and Novo.
Recognizing that the district court’s decision directly contradicts the mandates of the LaSalle National Bank, Freeman and Novo holdings, the majority feebly attempts to distinguish those cases and states that they do not apply when the firm itself opposes a prior client and, in effect, “changes sides”, but apply only to situations where an individual member of a law firm changes employment. This is “poppycock,” a distinction without a difference and one which defies both logic and the practical realities of our modern legal system. First, reason tells us that a law firm is indeed nothing more than a group of individual attorneys who have formed an association to further the practice of law. A clear understanding of LaSalle National Bank, Novo and Freeman establishes that once *1275the appearance of impropriety has arisen, the law firm, as well as an individual attorney, must be given the opportunity to demonstrate an absence of professional impropriety or misconduct. The point the majority overlooks is that it is irrelevant when analyzing the allegations of impropriety whether the potential conflict emanates from one new associate or from several partners or even, for that matter, the entire law firm. The governing legal principle must be the same regardless of whether the alleged conflict arises from the firm itself changing sides or from an individual attorney changing employment; a lawyer or law firm must be given an opportunity to rebut the inference of professional impropriety by demonstrating that the former client’s confidences have not been shared with the individuals involved in the current litigation. Why must a lawyer or law firm be disqualified if in fact, they have no substantial knowledge of the former client’s confidences because of the out-dated irrebutta-ble presumption? The mere existence of a possible conflict of interest is of such serious magnitude that the trial judge must afford the litigants (law firms) a hearing and explore the ethical questions in their entirety, unless there are unrebutted facts in the pleadings on file supporting disqualification.
More importantly, however, the majority’s analysis ignores a basic principle of law, fairness to all litigants. I believe that fairness requires that any law firm and/or individual lawyer accused of professional impropriety, questionable ethics, or misconduct be given the opportunity to rebut any and all adverse inferences which may have arisen by virtue of a prior representation, and this court so held in LaSalle National Bank and Freeman. A law firm should not be disqualified with only a summary proceeding conducted by a judge on a sparse factual record such as in this case. To disqualify a lawyer or law firm, and besmirch their professional reputation, based on a sparse and inadequate factual record and an antiquated irrebuttable presumption is to trip lightly through the valley of due process since due process guarantees, at the very least, fundamental fairness to litigants. See e.g. Lassiter v. Dept. of Social Services, 452 U.S. 18, 24, 101 S.Ct. 2153, 2158, 68 L.Ed.2d 640 (1981).
The right to rebut allegations of impropriety is necessary because of the immediate and often irreparable ramifications as to both client and counsel alike that a disqualification order carries with it. I believe counsel and, in this instance, the law firm should not only be allowed to protect their relationship with their present client but also their good name and reputation for high ethical standards. After all, an attorney’s and/or a law firm’s most valuable asset is their professional reputation for competence, and above all honesty and integrity, which should not be jeopardized in a summary type of disqualification proceeding of this nature. As court proceedings are matters of public record, a news media report concerning a summary disqualification order, based on a scant record of this type, can do irreparable harm to an attorney’s or law firm’s professional reputation. We must recognize that the great majority of lawyers, as officers of the court, do conduct themselves well within the bounds of the Code of Professional Responsibility.
Moreover, as we recognized in Freeman, disqualification of an attorney may also adversely affect the client as disqualification deprives the individual of the representation of the attorney of his choice and “it may also be difficult, if not impossible, for an attorney to master ‘the nuances of the legal and factual matters’ late in the litigation of a complex case.” 689 F.2d at 720. However, the majority dismisses this important consideration again citing a supposed “fact” which is nothing more than a bald assumption, without any basis in the record, that “Analytica appears content with whatever substitute counsel it has procured .... ” A court should order a lawyer or law firm disqualified only after a factual inquiry allowing for subsequent appellate review, if necessary, in the absence of a clear and unrebutted factual basis supporting disqualification. See General Mill Supply Co. v. SCA Services, Inc., 697 F.2d 704 (6th Cir.1982).
*1276A summary procedure, premised upon an irrebuttable presumption founded on a mere appearance of professional impropriety, is wholly inadequate when ruling on the question of an attorney’s or a law firm’s professional ethics. We give every defendant in a criminal case the opportunity to be heard, to confront his accusers and to contest all allegations made against him; in fact, in a criminal case we allow the defendant the additional safeguard of a prosecutor’s review before even holding a hearing or grand jury prior to filing an information or indictment. We must provide counsel suspected of a violation of the Code of Professional Responsibility with at least a similar opportunity to defend himself and/or explain any and all allegations of impropriety, unless there is a clear unrebut-ted factual basis contained in the pleadings on file, if we believe in the fairness doctrine. Today, unfortunately, the majority holds the principle of fairness applies only where “a member or associate of a law firm changes jobs” and not where “the firm itself changed sides.” Such a distinction is unwarranted and no doubt opens the door to future confusion and possible unjust results.
Assuming Schwartz & Freeman were unable to rebut the presumption that Attorney Fine had access to the confidences and secrets of NPD, and it appears that they were not, the conclusion that Fine himself would not be allowed to represent Analytica is correct. I do not believe and refuse to accept that his disqualification should automatically carry over to the entire firm. It is often times true that knowledge of one or more attorneys in a firm has been imputed to other members of that firm. See, e.g., Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1321 (7th Cir.1978); Laskey Bros, of W. Va., Inc. v. Warner Bros. Pictures, 224 F.2d 824, 826-27 (2d Cir.1955), cert. denied, 350 U.S. 932, 76 S.Ct. 300, 100 L.Ed. 814 (1956). ' The time has come to abandon this “irrebuttable” presumption, since the principles of LaSalle National Bank, Freeman and Novo are equally applicable in this situation. Fairness requires that a law firm, as well as any partner or associate, must be given the opportunity to rebut this presumption. A rebuttal may be accomplished by demonstrating that the presence of a “Chinese Wall” or some other method will effectively insulate against any flow of confidences and/or secrets from the tainted attorney to any other member of the firm. This rebuttal requires a case-by-case factual determination, but in any event, the fairness doctrine mandates that the opportunity to rebut the presumption must exist.2
I wish to stress that the fact finding process of the trial court can indeed be based on objective and verifiable factors. In determining whether a devised plan can effectively prevent disclosures, the trial court should consider a wide variety of factors. For example, the court should consider the size of the law firm, its structural divisions, the likelihood of contact between a “screened” attorney and one handling an adverse representation, and the existence of a rule prohibiting the “tainted” attorney from sharing in the fees derived from the representation in question. The effectiveness of a plan also depends on what type of routine internal safeguards have been developed in the firm for handling confidential information, such as curtailing access to files by keeping files in a locked file cabinet, with the keys controlled by two partners and issued to others only on a “need to know” basis. LaSalle National Bank, at 258-259. The court should also look at the steps the firm has taken to make all members of the firm aware of the ban on exchange of information as well as any steps taken to enforce this ban. LaSalle National Bank, at 258-259. Finally, the court must *1277keep in mind what should be the lawyer’s and the law firm’s most valuable assets, their reputations for honesty and integrity, along with competence. While some may argue that this final factor is more subjective than objective in nature, it merely requires an evaluation which district court judges are qualified to make, especially in light of the fact that they make credibility determinations in other cases daily. Only after considering the above factors can a district court make a determination as to whether a devised plan can effectively shield a tainted attorney. Reliance upon antiquated notions of disqualification such as irrebuttable presumptions simply will no longer suffice in today’s specialized practice of law.
My concern in this area lies in the effect a disqualification motion has on both a law firm as well as a newly hired individual in a firm. In LaSalle National Bank, Novo and Freeman we gave the newly hired attorney the opportunity to rebut all adverse inferences arising out of his former employment and to prove to the court that he in fact did not have prior knowledge sufficient to disqualify his firm. In LaSalle National Bank this court set forth the reasoning requiring the presumption of shared confidences to be rebuttable:
“If past employment in government results in the disqualification of future employers from representing some of their long-term clients, it seems clearly possible that government attorneys will be regarded as ‘Typhoid Marys.’ Many talented lawyers, in turn, may be unwilling to spend a period in government service, if that service makes them unattractive or risky for large law firms to hire. In recognition of this problem, several other circuits have begun either explicitly or implicitly to approve the use of screening as a means to avoid disqualification of an entire law firm by ‘infection.’ The Second Circuit has expressed its approval of the use of screening in a situation where the law firm’s continued representation of a client results in no threat of a taint to the trial process. Armstrong v. McAlpin, 625 F.2d 433, 445 (2d Cir.1980) (en banc), vacated on other grounds, 449 U.S. 1106 [101 S.Ct. 911, 66 L.Ed.2d 835] (1981). The Fourth Circuit, similarly, has approved an arrangement under which a former Justice Department attorney’s new employer was not disqualified, on the basis that the disqualified individual was denied access to all the relevant files and did not participate in fees from the barred litigation. Greitzer & Locks v. Johns-Manville Corp., No. 81-1379, slip op. at 7 (4th Cir. Mar. 5,1982). Similarly, the Court of Claims has held that a former government attorney’s entire firm need not be disqualified where screening procedures insure that he did not consult with the other attorneys about the case or share in fees derived from it. Kessel-haut v. United States; 555 F.2d 791 (Court of Claims 1977).”
This reasoning is equally apt in situations involving a law firm representing interests adverse to a former client. If prior representation of a particular client will irrebutt-ably disqualify an entire firm from handling certain cases, the result could easily be whole law firms of “Typhoid Marys.” This would have a drastic impact on the careers of attorneys in entire firms, would impede clients’ rights to be represented by attorneys of their choice and would discourage attorneys with expertise in a particular field of law from handling cases in their respective specialties. Just as in cases of individual attorneys changing employment, such a result must be avoided by allowing the presumption of shared confidences to be rebutted. Fairness demands that we now do no less for the law firm itself.
The majority infers that under my analysis a law firm could conceivably represent opposing sides in the same case. Such a conclusion conflicts with this court’s maxim that judges should not “stifl[e] the promptings of common sense.” See Planned Parenthood Association of Chicago v. Kempiners, 700 F.2d 1115, 1137 (7th Cir.1983). In the absence of stipulated facts supporting disqualification, decisions to disqualify counsel should be made only after a factual inquiry has been undertaken allowing law*1278yers an opportunity to rebut all inferences of unethical conduct. The opportunity to rebut inferences of professional misconduct or impropriety must exist, whether the disqualification motion is directed toward an individual lawyer or an entire firm. The majority’s irrebuttable presumption is a relic from days long ago past, ignoring the realities of the modern practice of law. “[Ejquity demands, and the pragmatics of emerging specialization inherent in contemporary legal practice dictates, that this presumption be rebuttable.” City of Cleveland v. Cleveland Elec. Illuminating, 440 F.Supp. 193, 209 (N.D.Ohio), aff’d mem.; 573 F.2d 1310 (6th Cir.1977), cert. denied, 435 U.S. 996, 98 S.Ct. 1648, 56 L.Ed.2d 85 (1978). The time has come to abandon the irrebuttable presumption that the knowledge of one attorney is the knowledge of the entire firm since, as this court recently stated, we should look to the living law, not to that of the dead. See Norris v. United States, 687 F.2d 899, 904 (7th Cir.1982).
The majority attempts to justify the irre-buttable presumption by stating “clients will not ... trust firms that switch sides as nimbly as Schwartz & Freeman.” If we accept this as true, the “test of the market” and the law of economics will prevail. A fair and just result will be obtained since the concerned client will select other counsel if he does not trust the present firm. Cf. Merritt v. Faulkner, 697 F.2d 761 at 769-770 (7th Cir.1983) (Posner, J., concurring in part and dissenting in part); McKeever v. Israel, 689 F.2d 1315, 1325 (7th Cir.1982) (Posner, J., dissenting).
The majority makes a second attempt to justify the irrebuttable presumption of in-tra-firm sharing of confidences by stating that a law firm’s “interest not only in retaining a client but in denying a serious breach of professional ethics might outweigh any felt obligation to ‘come clean’ ”. Evidently, the majority believes that lawyers generally are not to be trusted to hon- or their ethical obligations. I, on the other hand, believe that the great majority of attorneys, as officers of the court, will and do live up to their ethical duties and “come clean” if given an opportunity to do so. See generally, Hazard, The Lawyer’s Obligation to be Trustworthy when Dealing with Opposing Parties, 33 S.C.L.Rev. 181 (1981). As for those attorneys who chose not to “come clean,” the district court distinguishes between the meritorious and the frivolous on a regular basis in other types of cases, and I see no reason why the courts cannot perform that task equally well in the context of attorney disqualification, without relying on an ancient out-dated irrebuttable presumption.
I wish to emphasize there are indeed situations where orders of disqualification are both legitimate, necessary and proper. The attorney-client relationship has been most properly described as sacrosanct and “[i]t is part of a court’s duty to safeguard the sacrosanct privacy of the attorney-client relationship.” Freeman, 689 F.2d at 721. However, the majority’s irrebuttable presumption that all confidences are shared among every lawyer in a law firm, even a large multi-office firm, ignores the fact that in many firms, particularly large firms, there is little exchange of confidences between, for example, the antitrust, personal injury, tax, patent, securities or corporate sections of a firm because of the work load and the varied nature of the different department’s practices. The majority’s analysis fails to give Schwartz & Freeman or even contemplate in the future giving other law firms, large or small, the opportunity to demonstrate to the court the absence of impropriety. By analogy, the solution I advocate has worked well in our jury selection procedure for years. Where a juror states that he/she has information concerning a case, they are not automatically disqualified, but it is a trigger for further questioning to ascertain the degree of involvement, potential relationships or formed opinions in the matter. In essence, we are trusting the judge to perform a fact finding process that has been performed successfully for years. Why in our legal system is a juror entitled to more protection than an officer of the court who has dedicated himself to the highest ideals of our legal profession? Why should not a judge *1279conduct a meaningful factual inquiry rather than merely relying on an antiquated irre-buttable presumption?
Finally, I disagree with the majority’s imposition of fees and expenses upon Schwartz & Freeman as a penalty for defending against the disqualification motion. The majority concludes that Schwartz & Freeman’s arguments are without “a color-able basis in law” and are “so unreasonable” as to be in “bad faith.” In so holding, the majority denegrates the logic employed by this court in its three most recent decisions pertaining to attorney disqualification, LaSalle National Bank, Freeman and Novo; all three of these cases expressly hold that the presumption of intra-firm sharing of confidences is rebuttable. Obviously, Schwartz & Freeman’s legal argument that they should be allowed to rebut the presumption of shared confidences had at the very least a “colorable basis in law” and was not “so unreasonable as to be in bad faith.”
The majority paints a totally inaccurate picture of Schwartz & Freeman’s behavior in the trial court, a picture which once again is without support in the record. The majority casts Schwartz & Freeman as nothing but a group of pettifogging attorneys set on running up their fees without concern for truth or moral obligation. An examination of the record, however, discloses a sharply different image as Schwartz & Freeman did at one point move, as the majority puts it, to “gracefully bow out” by withdrawing from the case.
“Your Honor, we advised the court by letter that after discussion of the situation in depth with our client, that we would come to court this morning and ask the court for leave to withdraw as counsel for plaintiff. The request was made on behalf of all the lawyers at Schwartz & Freeman and on behalf of Mr. Futter-man and any lawyers in his firm. We do so with a couple of convictions in mind: that it is in the best interests of our client that we withdraw. The motion to disqualify has become a major dispute, is occupying the court’s time, is occupying counsel’s time, a terrific amount of energy and effort is being spent on it, and we believe that this is working a terrible hardship on our client and, therefore, that that process is just not productive. We have taken the step of waiving our fee to our client in order to make sure that the motion to disqualify, to the best of our ability, does not cause the effect that such a motion can have on a client. We have done everything that we can to help our client get the case back on track and those are our motives.”
After the district court had granted the motion to withdraw, the defendants petitioned the court to assess fees and costs of $65,000 against Schwartz & Freeman. Faced with the onerous prospect of not only losing a client but also being penalized $65,-000, Schwartz & Freeman rolled up their sleeves and decided to fight for their cause, rather than rolling over and playing dead. Is a decision to stand up for one’s rights the kind of behavior that one should be punished for in our American system of justice?
The district court’s order assessing fees against Schwartz & Freeman cannot stand in light of our recent decision in Overnite Transp. Co. v. Chicago Indus. Tire Co., 697 F.2d 789 (7th Cir.1983). In Ovemite Transp., the plaintiff brought suit based on a novel interpretation of the Interstate Commerce Act, not previously addressed in published case law. The district court granted the defendant’s motion to dismiss, and on appeal this court affirmed. Subsequent to this court’s affirmance of the dismissal order, the district court granted the defendant’s motion for an order assessing attorney’s fees against the plaintiff’s attorneys, finding that the attorneys had acted vexatiously in instituting the lawsuit. On appeal from the attorney fee award, this court held that the district court had abused its discretion, stating:
“It is the law of this circuit that the power to assess costs on the attorney involved ‘is a power which the courts should exercise only in instances of a serious and studied disregard for the orderly process of justice.’ ... Since there *1280was a legal basis for Overnite’s original position, even though that position was found to be legally incorrect, we hold Overnite’s claim for C.O.D. charges cannot be characterized as ‘lacking justification,’ and therefore the district court abused its discretion when finding the attorney’s conduct was vexatious.”
Id. at 795 (emphasis in original).
The order assessing fees against Schwartz & Freeman must be reversed since, in defending against the disqualification motion, they obviously did not exhibit a “serious and studied disregard for the orderly process of justice.” Rather, Schwartz & Freeman presented a legal argument which not only had a colorable basis in law, but which I believe is a correct interpretation of this court’s three most recent pronouncements on the law of attorney disqualification. The majority’s draconian decision to assess fees against Schwartz & Freeman is a harsh blow to our adversarial process as it “will have a profound chilling effect upon litigants and [will] further interfere with the presentation of meritorious legal questions .... ” Overnite Transp., 697 F.2d at 795, and is nothing less than an insult to the doctrine of stare decisis and a slap in the face of the adversary process. In an idealized world, Schwartz & Freeman might indeed have “gracefully” bowed out, but reality dictates that with a client’s interest in being represented by the attorney of his choice, an attorney’s professional reputation as well as $65,000. in costs on the line, the proper course was to have proceeded exactly as Schwartz & Freeman did. To conclude otherwise is ridiculous.
In short, the distinction the majority has drawn in this case unnecessarily deviates from the standard we set forth in LaSalle National Bank, Novo and Freeman. I believe the distinction advocated by the majority is unwarranted, unworkable, and will only confuse the law of attorney disqualification, a developing area of fundamental importance not only to the legal community, but to our society. We are not in a position, based on the incomplete record developed in the trial court, to decide conclusively whether or not Schwartz & Freeman should be disqualified. Accordingly, I would remand this case to the district court to allow Schwartz & Freeman an opportunity to demonstrate, if possible, that (1) Fine has not disclosed NPD’s confidences to any Schwartz & Freeman attorney involved in the monopolization suit; and (2) that some meaningful effective plan has been instituted to ensure that such a disclosure will not occur in the future. Finally, I would not assess attorney’s fees against Schwartz & Freeman.

. It should be noted that the district court ruled on the disqualification motion without the benefit of the Freeman opinion, which was not decided until sometime after the district court’s disqualification order was issued.

. See, Murphy, Vicarious Disqualification of Government Lawyers, 69 A.B.A.J. 299 (March 1983) criticizing perfunctory disqualification of an entire law firm based on the knowledge of one firm attorney, in situations involving former government lawyers entering private practice. The author urges rejection of “the presumption in favor of vicarious disqualification”, instead advocating a factual inquiry into the existence of a “screening procedure” within the law firm employing the former government attorney.