The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Lloyd Kadish ("Kadish") and Peter Berman ("Berman") sue
Commodity Futures Trading Commission ("CFTC") for a
declaratory judgment authorizing Silets & Martin, Ltd.
("Silets & Martin") to represent Kadish and Berman in a
separate subpoena enforcement action CFTC has brought against
them.*fn1 CFTC has moved for summary judgment, seeking
disqualification of Silets & Martin as a matter of law. For
the reasons contained in this memorandum opinion and order,
CFTC's motion is denied.
On Sunday, October 26, 1980 John Dolkart ("Dolkart"), a
senior trial attorney with CFTC, was working in its Chicago
offices, preparing for a business trip the following day. CFTC
Regional Counsel Constantine Gekas ("Gekas") came in and told
Dolkart Chicago Discount Commodity Brokers ("CDCB") was in
financial difficulty. Gekas then invited Dolkart into his
office and introduced Dolkart, via speaker phone, to John
Cotton and an unidentified staff attorney at CFTC's
Washington, D.C. Division of Enforcement.
Later the same day Gekas again visited Dolkart's office,
this time to ask that Dolkart prepare an injunctive complaint
for use by CFTC against CDCB. Dolkart prepared a "boilerplate"
complaint by "cutting and pasting" portions of pleadings in
prior CFTC cases. Although his draft Complaint contained no
factual information as to CDCB, Dolkart told Gekas the
relevant facts could be gleaned from public filings in CFTC's
office and then aided Gekas in obtaining those files (though
Dolkart did not review them before giving them to Gekas).
CFTC's subsequent order of investigation in the CDCB matter,
a private document not available to the public, named Dolkart
as one of three regional employees designated to conduct an
investigation of CDCB's activities.
After that initial activity, Dolkart was not in any way
involved in the later CDCB investigation. However, in April
1981 Dolkart assisted another CFTC staff attorney, Adrianne
Harvitt ("Harvitt"), in CFTC's subpoena enforcement action
against CDCB's accountant David B. Dahl. Dolkart's activity
took two forms:
1. Dolkart briefly discussed with Harvitt the
federally recognized accountant-client privilege,
though not in relation to specific facts
regarding Dahl and CDCB.
2. Dolkart accompanied Harvitt to court for her
April 29, 1981 argument of a motion in the CDCB
matter. Dolkart did not participate in Harvitt's
preparation or argument. Instead he was with
Harvitt solely to "hold her hand," because she
was both new to the Division of Enforcement and
Dolkart left CFTC June 12, 1981 and began work as an
associate with Silets & Martin three days later. In December
1981 Kadish and Berman, who had received CFTC administrative
subpoena duces tecum in its CDCB investigation, retained
Silets & Martin to represent them.
Before meeting with Kadish and Berman, Royal Martin, Jr.
("Martin") asked Dolkart to work on the matter. Dolkart
described his earlier "peripheral exposure" to Martin. Martin
then decided Silets & Martin could represent Kadish and Berman
but "pursuant to our general firm policy, Dolkart should not be
involved in the matter." Martin invited another associate,
Shelly Kulwin ("Kulwin"), into his office (with Dolkart still
present) and said (1) Martin and Kulwin would work on the
Kadish and Berman matter and (2) Dolkart "was to be completely
excluded from participation in the case." Martin, Dolkart and
other firm members and associates have filed affidavits
attesting to their adherence to that exclusion. Of course
Dolkart, as an associate, does not share in the firm's fees
from representing Kadish and Berman.
Standards Governing Disqualification
In the decision of any disqualification motion, this Court's
first line of inquiry is addressed to the American Bar
Association ("ABA") Code of Professional Responsibility (the
"Code"). This District Court has adopted the Code as an
appropriate guideline for the conduct of attorneys admitted to
practice before it (General Rules 6(a)(i)), and our Court of
Appeals has regularly relied upon it in the disqualification
area. See, e.g., Novo Terapeutisk Laboratorium A/S v. Baxter
Travenol Labs, Inc., 607 F.2d 186, 189 (7th Cir. 1979);
Westinghouse Electric Corp. v. Gulf Oil Corp., 588 F.2d 221,
224, 228 (7th Cir. 1978).
Under the circumstances of this case a two-level analysis is
called for. First this Court must determine whether Dolkart
could represent Kadish and Berman. If not — and this opinion
concludes that he cannot — it must be separately decided
whether Dolkart's disqualification extends vicariously to
Silets & Martin.
Dolkart's Individual Disqualification
Little difficulty is posed by the first issue of Dolkart's
personal disqualification. Code Disciplinary ...