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United States District Court, Northern District of Illinois, E.D

December 6, 1982


The opinion of the court was delivered by: Shadur, District Judge.


This is one of three class actions*fn1 charging 22 piping construction companies and 36 individuals with bid-rigging, price fixing and job allocation in the Chicago area from 1956 to 1977 in violation of the Sherman Act. As a result of information learned during the course of the litigation, the State of Illinois ("Illinois") has moved to disqualify attorney Edwin C. Thomas ("Thomas") and his law firm Bell, Boyd & Lloyd ("Bell Boyd") from further participation in Illinois' action.*fn2 For the reasons stated in this memorandum opinion and order Illinois' motion is granted.


One of the many previous motions in these actions was defendants' seeking summary judgment because limitations allegedly barred all pre-January 31, 1975 claims by Illinois. See 94 F.R.D. 300 (N.D.Ill. 1982). Illinois responded the statute of limitations had been tolled until Illinois actually discovered defendants' alleged wrongs. But defendants contended Illinois had actual or constructive knowledge before January 31, 1975 of facts suggesting the existence of its claims. Such knowledge, if established as a matter of law, would have defeated Illinois' effort to reach back of the limitations period. This Court found defendants had not established Illinois' knowledge beyond factual dispute (94 F.R.D. at 302-03, emphasis in original, footnote and citations omitted):

  What defendants have rather done is to offer bits
  and pieces of evidence purportedly showing
  Illinois had "direct knowledge of facts
  supporting its claim long before the January 31,
  1975 limitation date." . . . But those bits and
  pieces do not prove as a matter of law even
  "constructive" knowledge on Illinois' part — they
  were not enough as a matter of law to "have aroused
  suspicion or curiosity on the part of plaintiff" as
  to the wrongs asserted in the Complaint. That is so
  because almost without exception the evidence
  adduced by defendants really involves bid-rigging
  conspiracies by mechanical contractors in downstate
  Illinois, not in the Chicago area with which
  Illinois' Complaint is exclusively concerned. . . .

  . . . No demonstration that Illinois knew about
  bid-rigging among principally downstate
  contractors and on downstate projects can
  establish the necessary "suggestion" as to the
  present defendants and their Chicago projects as
  a matter of law. Nor can one-sentence references
  to one Chicago project or to rumors of statewide
  illegality bear the weight defendants seek to
  place on them. It must be remembered that on the
  present motion all reasonable factual inferences
  are drawn in favor of Illinois and not

For purposes of their summary judgment motion defendants sought to assimilate downstate bid-rigging to Chicago bid-rigging. Illinois urged the two matters were entirely separate, so its extensive earlier investigation of the downstate conspiracy would not imply pre-1975 knowledge of any Chicago conspiracies. On the present motion, the parties have virtually traded positions.*fn3

Illinois is spurred to that exchange by the fact Thomas directed the downstate investigation and related antitrust litigation as an Assistant Illinois Attorney General from 1970 to 1977 or 1978.*fn4 More precisely, Illinois' present motion was triggered by defendants' use of Thomas' former position and activities as an important part of defendants' "bits and pieces" to evidence Illinois' pre-1975 knowledge of facts suggesting Chicago area bid-rigging.*fn5 Defendants' summary judgment motion argument on Thomas' implicit role as a conduit of knowledge has come home to roost as Illinois' argument for Thomas' disqualification.

In particular, on the summary judgment motion defendants argued (Mem. 6; R. Mem. 20-22) the downstate investigation conducted by Thomas provided Illinois with knowledge of Chicago-area bid-rigging before January 1975. What is more important,*fn6 Thomas' own deposition testimony admitted he learned of possible (or even probable) Chicago bid-rigging during his downstate investigation in the early 1970's (Dep. 51, 55, 58, 74-77, 82-84, 88-90, 98-99, 210-12, 215-16), and he explained Illinois' failure to act then on that knowledge as the result of a conscious policy of inaction (Dep. 67-68, 70, 104, 113-14, 179, 182-83). That explanation of inaction was sought to be used to turn Illinois' ostensible ignorance of specific Chicago-area conspiracies into collateral "proof" of Illinois' knowledge of the general existence of such conspiracies. In any case, Thomas himself connected his prior public duties to the Chicago-area bid-rigging that is the subject of these consolidated actions.

Disqualification: Legal Principles

Our Court of Appeals has adopted the "clearly settled" legal test in disqualification matters:

  [W]here an attorney represents a party in a
  matter in which the adverse party is that
  attorney's former client, the attorney will be
  disqualified if the subject matter of the two
  representations are "substantially related."

Westinghouse Electric Corp. v. Gulf Oil Corp., 588 F.2d 221, 223 (7th Cir. 1978) ("Westinghouse II"). See also Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1322 (7th Cir.), cert. denied, 439 U.S. 955, 99 S.Ct. 353, 58 L.Ed.2d 346 (1978) ("Westinghouse I"). That test embodies the substance of Canons 4 and 9 of the (1978) ABA Code of Professional Responsibility (the "Code").*fn7 Contrary to Economy's assertion (Ans. Mem. 8), the concerns of Canon 4 are necessarily implicated when a party seeks disqualification under Canon 9, as Illinois does here. See Westinghouse II, 588 F.2d at 224.

Illinois urges Thomas should now be disqualified because his continued participation in this action would violate DR 9-101(B):

  A lawyer shall not accept private employment in a
  matter in which he had substantial responsibility
  while he was a public employee.

DR 9-101(B) reflects the Code's general concerns underlying disqualification and applies them to the special case of former government attorneys. See General Motors Corp. v. City of New York,
501 F.2d 639, 648-49 (2d Cir. 1974).

As n. 4 and its accompanying text reflect, Thomas indisputably had "substantial responsibility" over all aspects of Illinois' investigation of downstate bid-rigging in the 1970's. Thus the Westinghouse-defined question becomes whether there is a "substantial relationship" between the "matter" of this action and the "matter" over which Thomas exercised public responsibility. Westinghouse II mandates a three-part analysis of that issue (588 F.2d at 225):

  Initially, the trial judge must make a factual
  reconstruction of the scope of the prior legal
  representation. Second, it must be determined
  whether it is reasonable to infer that the
  confidential information allegedly given would
  have been given to a lawyer representing a client
  in those matters. Finally, it must be determined
  whether that information is relevant to the
  issues raised in the litigation pending against
  the former client.

Were it not for the statute-of-limitations/fraudulent-concealment issue in this action, the relevant inquiry into the "matter" of Thomas' prior public representation (its "scope" in Westinghouse II terms) would be narrower. Then the sole question might be whether Thomas learned, while a public official, of possible Chicago-area conspiracies involving Economy (they are after all his present clients). In fact Thomas' testimony (Dep. 99) suggested he had received at least some such information in December 1970. But in that case, the fact Thomas had opted not to involve Illinois (or himself) in Chicago matters might then negate the inference he actually delved into the Economy "matter" as a public employee.*fn8

However, Illinois' fraudulent concealment claim has broadened any such possibly limited perception of the relevant "matter" within the scope of Thomas' prior public representation. Defendants countered Illinois' claim by alleging Illinois had knowledge of pre-1975 Chicago-area bid-rigging. Although this Court held (94 F.R.D. at 302) Illinois' knowledge had not been established as a matter of law (after inferences were drawn in Illinois' favor), that factual issue remains open in this action. See 94 F.R.D. at 303 n. 5. Economy's contrary assertion (Ans. Mem. 2 n. 1, 19) is simply wrong.

Moreover, Thomas himself has acknowledged his central role in sifting the information garnered in the downstate investigation and in determining what "leads" would and would not be pursued. Such activities establish Thomas' clear professional involvement in the very "matters" at issue in the current dispute over defendants' alleged concealment and Illinois' alleged knowledge.

Thomas' admittedly key role in Illinois' downstate investigation makes it "reasonable to infer" Thomas was privy to Illinois' confidences on these matters,*fn9 so the second part of the Court of Appeals' analysis poses no difficulty.*fn10 Finally, Thomas himself has admitted (Dep. 29) Economy may benefit substantially if Illinois' pre-1975 claims are barred, and so the third part of the analysis is satisfied. Thomas' information is clearly relevant to a critical issue raised by Economy and other defendants against Illinois in this action.

Thus Thomas himself has established he had "substantial responsibility" as a public official over a "matter" at the core of the present litigation. It will not do for Economy to argue (Ans. Mem. 18-20) Thomas' downstate activities were unrelated to the Chicago-area matters in this litigation, for that position wholly ignores Thomas' deposition testimony and the relevance of defendants' defense to Illinois' fraudulent concealment claim. Thomas has placed himself in direct collision with DR 9-101(B)*fn11 by providing the nexus between his prior public duties and his present private representation. He has established the "striking similarity" between his former responsibilities as Illinois' lawyer and crucial issues in the present action. See General Motors, 501 F.2d at 649.

Because DR 9-101(B) is dispositive it is unnecessary to decide Illinois' independent claim that Thomas must withdraw from representation because of DR 5-102(A):

  If, after undertaking employment in contemplated
  or pending litigation, a lawyer learns or it is
  obvious that he or a lawyer in his firm ought to
  be called as a witness on behalf of his client,
  he shall withdraw from the conduct of the trial
  and his firm, if any, shall not continue
  representation in the trial, except that he may
  continue the representation and he or a lawyer in
  his firm may testify in the circumstances
  enumerated in DR 5-101(B)(1) through (4).

Illinois argues (Mem. 15) Thomas "ought to be called as a witness" on the fraudulent concealment issue.

That contention cannot be resolved without inquiry into other related questions. For one thing DR 5-102(A) may well leave to the present client (Economy) the initial determination of who "ought to be called as a witness." See J.D. Pflaumer, Inc. v. United States Department of Justice, 465 F. Supp. 746, 747-48 (E.D.Pa. 1979). Moreover, even if Thomas were a "pivotal" lawyer-witness whom defendants "ought to call" in some mandatory sense, see MacArthur v. Bank of New York, 524 F. Supp. 1205, 1208-09 (S.D.N.Y. 1981), DR 5-102(A) contains an escape clause allowing continued representation and testimony in cases of substantial hardship to a client. See Rule 5-101(B)(4). There is simply no point in reaching out to treat with issues that require further exploration, given the clear applicability of DR 9-101(B).

In sum Thomas must be disqualified from representation of Economy in this action because of the mandate of DR 9-101(B). No finding of deliberate professional misconduct is implied by this holding.

Disqualification of Bell Boyd

Coupling strict enforcement of DR 9-101(B) with an automatic application of vicarious disqualification would turn many former government attorneys into professional pariahs. Courts have therefore struggled to find ways to balance the public interest in the integrity of the legal profession with fairness to former government employees and their new employers or partners. This is the world of "Chinese walls" and "rebuttable presumptions" about the flow of information within law firms. See Kadish v. CFTC, 548 F. Supp. 1030, 1034-35 (N.D.Ill. 1982).

Once again the circumstance here is simpler. Thomas himself has established he served as a key Illinois lawyer on a matter substantially related to the present litigation. That representation carries with it the conclusive presumption of access to confidences and secrets, Westinghouse II, 588 F.2d at 224, a presumption confirmed in fact by Thomas' deposition testimony.*fn12

In turn Thomas both presumptively and actually carried relevant Illinois confidences and secrets to Bell Boyd, even if his involvement in the present litigation developed gradually and innocently. See Sept. 7, 1982 Thomas Affidavit ¶¶ 6-9. And while it might have been possible in the beginning to insulate Thomas from his colleagues at Bell Boyd on the piping litigation matter, that opportunity has passed.*fn13 Quite to the contrary, Thomas has been an active litigator in this case for over two years, working with others in the firm. Firm disqualification is mandated. See Westinghouse I, 580 F.2d at 1321.

Any such belated disqualification is of course regrettable. But as this opinion's discussion makes plain, the timing flowed from defendants' own arguments and Thomas' own deposition on defendants' summary judgment motion.


For the reasons stated Thomas and Bell Boyd are disqualified from further participation in this action (but not from the other actions consolidated for discovery purposes).

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