[For the issue of attorney-client privilege when the complainant is an attorney, see Privileges]
DISQUALIFICATION OF COUNSEL; CHOICE OF LAW; CONFLICT OF INTEREST; LAWYERS CALLED AS WITNESSES; MISCONDUCT IN OTHER FORUMS; LACK OF GOOD FAITH IN FILING OF MOTION
In Gallagher v. Granada Entertainment USA, 2004-SOX-74 (ALJ Oct. 19, 2004), the Complainant moved to disqualify the Respondents' trial counsel, as well as that counsel's law firm based on a variety of alleged conflicts of interest, misrepresentations, and violations of state professional responsibility rules. The most prominent charges were that the Complainant had served as the Respondent's in-house counsel supervising matters assigned to the Respondents' law firm as outside counsel, and that he intended to call the Respondent's trial counsel and other lawyers from her firm as trial witnesses.
The ALJ easily disposed of the conflict of interest issue finding the Complainant had not alleged facts showing that he personally was a client of Respondent's law firm. The other grounds asserted for disqualification, however, were more difficult.
The ALJ initially addressed the question of determining the applicable standards, OALJ being an administrative court with nationwide jurisdiction and without DOL regulations adopting a detailed ethics code for lawyers who litigate at OALJ nor a choice of law provision for lawyers who practice before OALJ. The ALJ reviewed relevant statutory, regulatory and decisional law, and concluded that the rules for the federal district court where the matter would be litigated should be applied in a SOX whistleblower case. In the instant case, that court would be the federal district court for the Central District of California, which has by local rule adopted standards of professional conduct which incorporate California law and the ABA Model Rules of Professional Conduct as guides.
In regard to the lawyer as witness issue, the ALJ determined that the California rule distinguishes between cases tried before a jury and those tried before a judge; the California rule does not disqualify a lawyer who testifies before a judge. Moreover, the rule does not apply to lawyers in an advocate's firm.
The Complainant also alleged several instances of purported misconduct by the Respondent's lawyers before OSHA or in other forums. The ALJ held, however, that "[e]xclusion under 29 C.F.R. § 18.36(b) ought to be limited to instances of ethical misconduct that prejudiced the movant at OALJ, or that cause the lawyer to have been disciplined by another court or agency. * * * A disqualification motion under 29 C.F.R. § 18.36(b) is not an occasion to examine the ethics of selected members of a law firm for actions they took as counsel in other cases, or in ... corporate restructuring."
Finally, the ALJ noted that the motion for disqualification had not been supported by any proof, failed to acknowledge relevant California law despite arguing that California law applied, and cited non-existent ethics rules -- which in concert led the ALJ to conclude that the motion had not been filed in good faith.
ALJ AUTHORITY TO CONTROL LITIGATION; IMPOSITION OF REQUIREMENT OF CERTIFICATION OF GOOD FAITH ATTEMPT TO RESOLVE DISPUTES BEFORE SEEKING INTERVENTION OF THE ALJ
In Davis v. The Home Depot, 2006-SOX-17 (ALJ Dec. 19, 2006), the ALJ found it necessary to impose rules of behavior in regard to the filing of motions based on the manner in which the litigation had proceeded, with almost any dispute resulting in the filing of a motion and several counter-motions. The ALJ ordered that, prior to the filing of a motion, counsel must first contact opposing counsel and attempt, in good faith, to reach a resolution without the intervention of the court. Then, only if that attempt failed, would the ALJ entertain a motion. Such a motion, however, was required to include an explicit statement of the steps taken by the party in an attempt to resolve the matter and a certification that the all good faith measures were taken in an attempt to avoid the filing of the motion. Finally, the ALJ quoted the Ninth Circuit in Mattel, Inc. v. MCA Records, 296 F.3d 894, 908 (9th Cir. 2002): "The parties are advised to chill."
