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GREATER ROCKFORD ENERGY v. SHELL OIL CO.

October 28, 1991

GREATER ROCKFORD ENERGY AND TECHNOLOGY CORP., ET AL., PLAINTIFFS,
v.
SHELL OIL COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, District Judge:

OPINION

Antitrust case — 17 Plaintiffs — 11 Defendants — 69 lawyers — and literally a half-ton of pleadings.

First of all, Plaintiffs' counsel accepted this case with a foreseeable conflict.

But Defendants waited until 3 years into this major antitrust action before moving to disqualify Plaintiffs' lead counsel (and his firm) on the grounds that Defendants intend to call him as a witness to give testimony that is prejudicial to his clients.

Motion denied.

I. FACTS

Bob Wright is a senior partner for the firm of Domengeaux and Wright, counsel for Plaintiffs. Mr. Wright is also the president and 85% shareholder of Plaintiff Alpebo, Inc. Alpebo entered into a joint venture to produce ethanol with Shepherd Oil, Inc., and Celerol Oil and Gas Company. When the ethanol industry began to struggle, the Department of Agriculture decided to subsidize many of the grain-based ethanol producers. Alpebo, Shepherd, and Celerol were not subsidized, however, because their ethanol was not produced from grain.

In June of 1986, Alpebo, Shepherd and other firms filed a suit against the United States Secretary of Agriculture seeking a declaratory judgment and a permanent injunction which would require the Secretary of Agriculture to include the Plaintiffs in the subsidy program. In that action, Bob Wright appeared as attorney for Alpebo and Shepherd. In the complaint against the Secretary of Agriculture, the Plaintiffs asserted that they "will be irreparably injured as a result of the Secretary's decision to selectively subsidize only a part of the ethanol industry." Plaintiffs then stated: "This situation will exascerbate the economic plight the plaintiffs face and will increase the danger that the plaintiffs will be forced out of business." In September of 1986, the district court for the Western District of Louisiana granted summary judgment in favor of the Secretary of Agriculture. Alpebo, Inc. v. Richard E. Lyng, U.S. Secretary of Agriculture, No. 86-1431 (W.D.La., Ruling of Sept. 29, 1986).

Defendants in the instant case claim that they intend to call Mr. Wright as a witness to testify as to matters concerning the prior litigation with the Secretary of Agriculture. Specifically, Defendants claim they need Mr. Wright to testify to the validity of documents from the suit against the Secretary of Agriculture. Defendants further assert that Mr. Wright, as president and attorney for Alpebo, is in the best position to testify as to the prior suit and as to the financial and competitive situation of Alpebo.

It is the Defendants' contention that Wright's testimony will be prejudicial to the Plaintiffs and he should therefore be disqualified. In support of their motion, Defendants initially cited the ABA model code of professional responsibility. However, the applicable law is the Illinois rules of professional conduct which became effective in August of 1990. These rules are very similar to the ABA code. The pertinent section of the Illinois Rules of Professional Conduct is Rule 3.7 which reads as follows:

Rule 3.7. Lawyer As Witness

  (b) If a lawyer knows or reasonably should know
  that the lawyer may be called as a witness, other
  than on behalf of a client, the lawyer may accept
  or continue representation until the lawyer knows
  or reasonably should know that the lawyer's
  testimony is or may be prejudicial to the client.
  (c) Except as provided by Rule 1.7 or Rule 1.9 a
  lawyer may act as an advocate in a trial in which
  another lawyer in the lawyer's firm may be called
  as a witness.

Plaintiffs have offered several valid reasons why Mr. Wright should not be disqualified. First, they contend that the suit against the Secretary of Agriculture represented only one of the several reasons why their business failed. Thus, they argue Defendants may still be liable even if they were harmed by the actions of the Secretary of Agriculture. Second, Plaintiffs contend that Mr. Wright should not be ...


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