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August 12, 1985


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


Plaintiff, who recently died, suffered from various illnesses allegedly caused by long-term exposure to asbestos. He claimed that these illnesses were caused by the defendants in violation of their legal obligations to him in that he was exposed to asbestos during and because of his employment with defendant Atchison, Topeka & Santa Fe Railway (Railway). Defendant Celotex allegedly manufactured certain asbestos products with which plaintiff worked. Currently before the court is Celotex' motion to disqualify Railway's counsel because of their access to information confidential to Celotex and other defendants in this action.

In 1982 Celotex and other asbestos manufacturers and distributors formed the Asbestos Defense Group (ADG) to coordinate discovery, plan strategy and facilitate the settlement of asbestos cases in state and federal court litigation. Celotex, Owens-Corning Fiberglass, Eagle-Picher Industries, Inc., Owen-Illinois, Nicolet, Inc. and Raymark Industries are both members of ADG and defendants in the present action. Standard Asbestos Manufacturing & Insulating Company (Standard Asbestos) is a member of ADG but is not a defendant here.

Late in 1984, the Railway filed a cross claim against all the defendants in the case. Since then the Railway has hired the law firm of Jacobs, Williams and Montgomery as additional counsel in the case. The same law firm, now called Williams and Montgomery, has represented and continues to represent Standard Asbestos in state court asbestos litigation and in meetings of the ADG.

Celotex has moved to disqualify the Williams firm from representing the Railway in its cross claim because of its involvement in the ADG. Celotex claims that confidential information was exchanged during ADG meetings that Williams can now use in litigating the Railway's cross claim against defendants. If confidences were exchanged, Williams and Montgomery's use of these confidences would be in violation of Canons 4 and 9 of the Code of Professional Responsibility.


Ill.Rev.Stat. ch. 10A, Canon 4, states: A lawyer shall preserve the confidences and secrets of a client.*fn1 Canon 9 states: A lawyer should avoid even the appearance of professional impropriety. If Canon 4 were read literally, Celotex might not have standing to assert this violation because it has never been a client of the Williams firm.*fn2 However, the concept of "client" has been broadened by the Seventh Circuit in Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1318-1320 (7th Cir. 1978), to include a relationship between an attorney and another entity (person or corporation) which involves a fiduciary obligation resulting from "the nature of the work performed and the circumstances under which confidential information is divulged." Id. at 1320. Such a fiduciary relationship has been found to exist between counsel for co-defendants in a criminal case. See Wilson P. Abraham Construction Corporation v. Armco Steel Corporation, 559 F.2d 250, 253 (5th Cir. 1977), cited with approval in Westinghouse Electric Corp. v. Kerr-McGee Corp., at 1319.

Canon 4 read broadly was meant to protect confidences obtained in the setting of such a fiduciary relationship. Judge Hart of this court has recently refused to read Canon 4 so expansively, requiring at least an "express or implied attorney-client relationship" to allow a disqualification under the canon. International Paper Co. v. Lloyd Manufacturing Co., Inc., 555 F. Supp. 125, 132-33 (N.D.Ill. 1982). He recognized a fiduciary obligation, however, and the right of a co-defendant to assert the violation of that obligation, and he was primarily concerned with how an alleged violation of that obligation should be determined. Tests for standing are different from tests which go to the merits. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970). Rather than look at the "legal interest" created by the canon, the test for standing is whether Celotex' claim comes within the "zone of interest to be protected or regulated by the statute. . . ." Id. Because Celotex claims a breach of confidence within the zone of confidential relationships protected by Canon 4, Celotex has standing under this canon to bring this claim although, as Judge Hart recognized, the manner of determining the merits of that claim differs when the party asserting the claim is a co-defendant rather than a client.

There can be little doubt that Celotex has standing under Canon 9, which addresses even the "appearance" of impropriety. Canon 9, as a rule of conduct, is directed as much to ensuring public confidence in the legal profession as it is to requiring certain conduct on the part of attorneys. See Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1269 (7th Cir. 1983), Freeman v. Chicago Musical instruments Co., 689 F.2d 715, 721 (7th Cir. 1982). Thus, Canon 9's zone of interest is as broad, if not broader, than Canon 4's, and Celotex has standing to assert a violation of Canon 9.


"The standard for disqualification of an attorney who undertakes litigation against a former client is the so-called `substantial relationship' test." LaSalle National Bank v. County of Lake, 703 F.2d 252, 255 (7th Cir. 1983). In the case where a law firm switches sides, the test means the firm may not represent an adversary of its former client

  if the lawyer [or law firm] could have obtained
  confidential information in the first representation
  that would have been relevant to the second. It is
  irrelevant whether he [it] actually obtained such
  information. . . .

Analytica, Inc. v. NPD Research, Inc., supra at 1266. Using the Analytica approach, there would be an irrebutable presumption that actual confidences were disclosed between the Williams firm and Standard Asbestos that would preclude Williams from representing the Railway.

The Railway does not (nor could it) dispute the fact that the issues in its cross claim are substantially related to the issues discussed at the ADG meetings. However, this case differs from that presented in Analytica in one important respect: the disqualification motion is raised here by co-defendants, not by a former client against a present client. While an irrebutable presumption that the former client exchanged confidences with its attorney that it would like kept secret from the present client and adversary makes sense given the nature of the attorney-client relationship, such a presumption does not fit ...

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