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 ...