Court Opinion

ID: 9658669
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:07:49.045291+00
Date Added: 2024-06-11T18:13:57.714471
License: Public Domain

GILBERT, Justice
(dissenting).
I respectfully dissent from the majority opinion and would affirm the court of appeals. The majority opinion improperly uses the Minnesota Rules of Professional Conduct in its analysis; its interpretation of Rule 1.10(b) is overly broad. While the Rules of Professional Conduct have been used in prior disqualification cases, the use has been limited in scope and always has been accompanied by the application of equitable principles. The majority now eliminates our long-established test of balancing of the equities when considering whether to disqualify a law firm from continued representation. However, there is nothing in the rules or comments that would indicate that the Minnesota Rules of Professional Conduct governs our decision making to the exclusion of Jenson v. Touche Ross & Co., 335 N.W.2d 720, 731 (Minn.1983). In fact, in Production Credit Ass’n v. Buckentin, 410 N.W.2d 820, 825 (Minn.1987), we indicated that although Jenson may have been codified in the rule, we still used our equitable principles to apply the rule to the facts in a disqualification case.
The preamble to the Rules of Professional Conduct notes “the Rules simply provide a framework for the ethical practice of law.” Minn. R. Prof. Conduct pmbl. It further provides that the “[fjailure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process.” Id. However, these rules are not to be used in civil proceedings for a tactical advantage sought by one party over another. In fact, the scope of the rules specifically states that:
*136Violation of a Rule should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached. * * * They are not designed to be a basis for civil liability. Furthermore, the purpose of the rules can be subverted when they are invoked by opposing parties as procedural weapons. The fact that a Rule is a just basis for a lawyer’s self-assessment, or for sanctioning a lawyer under the administration of a disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the Rule. Accordingly, nothing in the Rules should be deemed to augment any substantial legal duty of lawyers or the extradisciplinary consequences of violating such a duty.

Id.

The use of Minn. R. Prof. Conduct 1.10(b) to disqualify Rider Bennett exceeds the scope of the Rules of Professional Conduct by giving appellant standing to seek enforcement of Rule 1.10(b) in a collateral proceeding involving appellant’s sexual harassment claim against respondent. The majority’s decision improperly allows Rule 1.10(b) to be invoked by an adversary as a procedural weapon on the eve of trial. While the comments to the Rules are not binding on us, we have adopted those principles in our decisions. We have long held that a violation of the Rules of Professional Conduct cannot give rise to a private cause of action against an attorney, nor should it create any presumption that a legal duty has been breached, nor should the rules be used to augment extradisciplinary consequences of violating such a duty. See L & H Airco, Inc. v. Rapistan Corp., 446 N.W.2d 372, 380 (Minn.1989); In re Proposed Petition to Recall Hatch, 628 N.W.2d 125, 128 (Minn.2001). Here, Rule 1.10(b) has been used to augment a substantive legal duty of lawyers in a collateral proceeding.
Additionally, the scope of the rules has been ignored by the majority in another important manner. The portion of the Rules of Professional Conduct addressing the scope of the rules states the following:
The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and of the law itself. Some of the Rules are imperatives, cast in the term “shall” or “shall not.” These define proper conduct for purposes of professional discipline. Others, generally cast in the term “may” are permissive and define areas under the Rules in which the lawyer has professional discretion. No disciplinary action should be taken when the lawyer chooses not to act or acts within the bounds of discretion.
Minn. R. Prof. Conduct pmbl.
The rule in issue uses the word “may” and thus delineates permissive conduct and defines an area in which the lawyer has professional discretion. Even assuming the appellant had standing to use these rules as a sword, no disciplinary action would result from these actions taken within the bounds of the lawyer’s discretion. The specific rule in issue provides “[w]hen 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 * * * had previously represented a client whose interests are materially adverse to that person.” Minn. R. Prof. Conduct 1.10(b) (emphasis added).
The majority’s use and interpretation of Minn. R. Prof. Conduct 1.10(b) violates the rule of reason contained within the scope of the rules. The majority has created a per se rule that whenever one lawyer in a firm has a conflict, that lawyer’s conflict *137will be imputed to the entire firm and the entire firm will be disqualified unless the information communicated to the lawyer is not significant in the same or substantially related matter, appropriate screening is implemented, and appropriate notice is given. This per se rule ignores the equitable balancing test that we have traditionally used to analyze imputed disqualification cases and has an unnecessarily harsh result. The majority’s rule applied here results in the disqualification of an entire law firm that has worked on respondent’s case for over 3 years just because they laterally hired a new lawyer who had performed some work on the case. In the process, respondent’s interests on the eve of trial have been totally ignored by the majority’s decision and there has been no weighing of competing equities.
As the majority points out, Rule 1.10(b) does identify three dependent clauses to be considered if we assume this disciplinary rule is to be used in a civil suit context. It states that the conflicted firm should be disqualified
unless there is no reasonably apparent risk that confidential information of the previously represented client will be used with material adverse effect on that client because: (1) any confidential information communicated to the lawyer is unlikely to be significant in the subsequent matter; (2) the lawyer is subject to screening measures adequate to prevent disclosure of the confidential information and to prevent involvement by that lawyer in the representation; and (3) timely and adequate notice of the screening has been provided to all affected clients.
Minn. R. Prof. Conduct 1.10(b).
However, it is not appropriate for the majority to adopt a per se test for evaluating the implication of a disqualification of a lawyer in the private sector by relying solely on the Rules of Professional Conduct without applying the equitable balancing test that has been traditionally used in this analysis. It is true that we stated that the Jenson test is now codified in Minn. R. Prof. Conduct 1.9 for a lawyer’s direct conflict of interest with a former client. Production Credit Ass’n, 410 N.W.2d at 825. However, our reasoning in Jenson is even more compelling in an imputed disqualification analysis where we instructed the courts to weigh the competing equities. Jenson, 335 N.W.2d at 732. We implemented this weighing of the equities after presuming that the attorney received confidences from the former clients and that the confidences were conveyed to the attorney’s affiliates, subject to rebuttal. Id. at 731. It is at this last stage in the analysis where we find ourselves in this case. Here, there has been unchallenged rebuttal evidence indicating that these confidences were not conveyed by the lawyer to the new law firm.
Since the Rules of Professional Conduct were adopted in 1985, we have repeatedly cited to the Jenson decision, as has the court of appeals. Its equitable rationale is still viable, especially in this day and age when there appears to be more and more movement by lawyers between firms than has ever occurred in the past. The employment mobility of lawyers might be dictated in part by economics, including the consolidations and mergers of law firms and law firms going out of business and/or downsizing with lawyers then seeking professional employment with other firms. Based on the limited scope of Minn. R. Prof. Conduct 1.10(b), Jenson can indeed coexist with the rule. The rule may be used to help guide the balancing of the equities, but the consideration of the equities of all the parties is still not only viable but essential.
The grammatical exercise done by the majority in isolation of the facts presented ignores the governing principles set *138forth in the Rules of Professional Conduct’s preamble and departs with many years of practice and precedent. Indeed, the comment accompanying Rule 1.10 has a specific section entitled “Lawyers Moving Between Firms.” It points out the complications associated with such mobility and states the following:
There are several competing considerations. First, the client previously represented must be reasonably assured that the principle of loyalty to the client is not compromised. Second, the rule of disqualification should not be so broadly cast as to preclude other persons from having reasonable choice of legal counsel. Third, the rule of disqualification should not unreasonably hamper lawyers from reforming new associations and taking on new clients after having left a previous association. * * * If the concept of imputed disqualification were defined with unqualified rigor, the result would be radical curtailment of the opportunity of lawyers to move from one practice setting to another and of the opportunity of clients to change counsel.
Minn. R. Prof. Conduct 1.10, 1985 comment.
In Jenson, we recognized the “countervailing interests” in a similar lateral hire situation. In balancing the equities we focused on the “economic hardship” and “greater fairness.” Jenson, 335 N.W.2d at 731-32.
The section of the comment entitled “Lawyers Moving Between Firms” ends with a common sense recommendation for resolving these issues in a disciplinary context. It states, “A rule based on a functional analysis is more appropriate for determining the question of vicarious disqualification. Two functions are involved: preserving confidentiality and avoiding positions adverse to a client.” Minn. R. Prof. Conduct 1.10, 1985 comment. Furthermore, there is nothing in the comments to indicate that the rule was either intended to eliminate the court’s equitable powers or that Jenson had somehow been replaced or voided by this rule of disciplinary conduct. The disqualification of a lawyer or law firm, as requested by the appellant in this case, is in the nature of equitable relief. In Jenson, we pointed this out and stressed that competing interests must be weighed and the equities must be balanced. This is especially true where judgment and discretion are involved.
Under these facts, there does not appear to have been any reasonably apparent risk that any of the confidential information of the appellant had been or will be used for any purpose whatsoever by either the respondent or its law firm. In fact, the district court specifically found the attorney in question had not worked on the case with the new law firm and that “[n]o evidence exists that client secrets or other information has been shared by Ms. Fischer with other Rider, Bennett attorneys.” This factual finding has not been challenged and has ample support in the record.
The record reflects that the law firm blocked out the laterally hired lawyer from any contact or communication relating to this file or either client. Both Fischer and the staff working under her direction were instructed that they could have no contact with the Lennartson file materials and that they must not discuss this case with any of the attorneys or staff who are engaged in the school district’s defense.
Likewise, the school district’s defense lawyers were instructed not to have any discussion with any staff members working under Fischer’s supervision. The law firm also took steps to physically screen Fischer from the case. Case files were stored in a separate storage cabinet just outside the lead counsel’s office and on the doors of this cabinet were placed prominent advi*139sories stating as follows: “AN ETHICAL WALL HAS BEEN IMPOSED ON LEN-NARTSON VS. ANOKA-HENNEPIN SCHOOL DISTRICT NO. II, 10924/ R21611 WITH RESPECT TO ATTORNEY SUSANNE FISCHER.” A similar sticker was placed on each subfile folder. Moreover, the files were located on a different floor than Fischer’s office. There was no allegation or proof that there was in fact any breach of confidentiality or collusion within the approximately 140 member Rider Bennett law firm. Accordingly, the purpose of the rule has been satisfied. “[T]here is no reasonably apparent risk that confidential information of the previously represented client will be used with material adverse effect on [appellant].” Minn. R. Prof. Conduct 1.10(b).
Finally, this underlying lawsuit has been proceeding since November of 1999. The initial lawyer representing the appellant withdrew from any further representation of the appellant. The court granted the motion of appellant’s former law firm to withdraw from further representation on December 15, 2000 and reset a trial date for March 5, 2001. Then, pursuant to appellant’s request, the court set a new trial date for June 1, 2001. The court also ordered sanctions against the appellant and emphasized that there would be no further continuances of this trial date.1 Subsequent to the withdrawal of appellant’s counsel and after two continuances of trial dates, Ms. Fischer was hired by Rider Bennett as an associate lawyer on March 26, 2001. If the original trial had gone ahead as scheduled on March 5, 2001, this predicament would have been avoided. The district court did exercise its equitable power to allow Ms. Fischer’s law firm to withdraw from representing the appellant on the eve of trial and then further exercised its equitable powers by granting one more continuance to the appellant. Now the majority opinion will force the respondent school board to seek a new law firm after spending years preparing for trial with the assistance of the Rider Bennett law firm. The countervailing interests of the respondent school board have been totally ignored by the majority, including the significant economic hardship they will incur, as well as the further needless delays and uncertainties that will occur by forcing the board at this late date to hire replacement counsel to represent its interests. In weighing the competing interests of the respondent and the appellant and balancing the equities between the parties and in consideration of the lack of harm demonstrated in this record, in greater fairness, the Rider Bennett law firm should not be disqualified.

. The respondent was granted a senior lien on any recovery by the appellant in the amount of $4,000.