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WILHELM v. CITY OF CALUMET CITY

May 11, 2005.

YOLANDA WILHELM, Plaintiff,
v.
THE CITY OF CALUMET CITY, ILLINOIS, a unit of Local Government, and MICHELLE QUALKINBUSH, in her individual and official capacities as Mayor of the City of Calumet City, Illinois, Defendants.



The opinion of the court was delivered by: MARTIN ASHMAN, Magistrate Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Yolanda Wilhelm moves to disqualify and strike the appearance of Defendant Michelle Qualkinbush's attorney Dana L. Kurtz, claiming that Kurtz's former association with Wilhelm's counsel Andreou & Casson, Ltd. creates an impermissible conflict of interest. Kurtz objects to Wilhelm's motion and argues that her former association with Andreou & Casson does not disqualify her from representing Qualkinbush in the current litigation. This matter comes before this Court pursuant to 28 U.S.C. § 636(b)(1)(A) and Local Rule 72.1. For the reasons that follow, the Court grants Wilhelm's motion and disqualifies Kurtz.

  I. Background

  On August 6, 2002, Kurtz, an attorney licensed to practice law in the State of Illinois, became associated with the law firm of Andreou & Casson. From August 6, 2002 until December 2002, Kurtz was one of three attorneys associated with Andreou & Casson — the other two attorneys being Frank J. Andreou and Luke A. Casson. (Casson Aff. ¶ 19.) A fourth attorney joined the firm in December 2002. (Id.)

  In December 2002, Wilhelm became a client of Andreou & Casson. On December 11, 2002 and December 12, 2002, Wilhelm sought to retain Andreou & Casson in relation to employment discrimination she was experiencing based upon her national origin and political affiliation. (Casson Aff. ¶ 6; Wilhelm Aff. ¶ 3; Pl.'s Reply at 3.) An Andreou & Casson "New Case Assignment Form," dated December 13, 2002, indicates that Wilhelm was pursuing claims of employment and civil rights violations against Calumet City and Michelle Qualkinbush, in her capacity as Calumet City's city clerk. (Pl.'s Reply at Ex. B.) On December 24, 2002, Luke A. Casson wrote a letter on behalf of Wilhelm to the attorneys of Fioretti, Des Jardins and Reda, Ltd., who were representing Calumet City and Qualkinbush. (Pl.'s Reply at Ex. D; Kurtz's Sur-Reply at Ex. 4.) The December 24, 2002 letter clearly purports to represent Wilhelm and states that: (1) Wilhelm would not submit to an interview, (2) Wilhelm would not waive her rights to proceed with her claims in state or federal court, (3) Fioretti, Des Jardins and Reda, Ltd. may have a conflict of interest that prevents them from participating in the matter, and (4) Wilhelm would like to initiate settlement discussions. (Kurtz's Sur-Reply at Ex. 4.) Records and affidavits also indicate that Wilhelm paid Andreou & Casson at least a portion of her retainer in late 2002 and early 2003. (Andreou Aff. ¶ 14; Pl's Reply at Ex. G.) In her briefs, Kurtz repeatedly suggests that Wilhelm was not a client of Andreou & Casson prior to March 10, 2003. At oral argument, however, all parties finally agreed that Wilhelm was a client of Andreou & Casson as early as December 2002, while Kurtz was associated with the law firm. Kurtz continues to claim, however, that she never actually knew that Wilhelm was a client of the firm before March 2003 and never had any knowledge of Wilhelm's claims against Calumet City and Qualkinbush. (Kurtz's Sur-Reply at 3-7.)

  On January 13, 2003, Wilhelm filed an EEOC charge alleging employment discrimination by Calumet City and Qualkinbush, in her capacity as city clerk. (Pl.'s Reply at Ex. F.) Wilhelm claims that she ultimately decided not to prosecute the EEOC charge because of representations made to her by her attorneys. (Wilhelm Aff. ¶ 8.)

  On March 10, 2003, Kurtz ceased to be associated with Andreou & Casson. The events surrounding that dissociation are the subject of a lawsuit pending in the Circuit Court of Cook County, Illinois and have infected this proceeding with hostility and ill-will.

  In April 2003, Qualkinbush was elected mayor of Calumet City. Wilhelm alleges that a series of events which led to the basis of the current complaint before the Court began shortly after the April 2003 election. (Wilhelm Aff. ¶ 9.)

  In June 2004, Wilhelm filed the complaint now before the Court, alleging discrimination and retaliation based on her sex, national origin and political affiliation by Calumet City and Qualkinbush, this time in her capacity as mayor. (Am. Compl. at 1-2.) On March 23, 2005, Kurtz was granted leave to file an appearance of counsel on behalf of Defendant Qualkinbush. On March 24, 2005, Wilhelm claimed that Kurtz was not permitted to appear on behalf of Qualkinbush due to conflicts of interest and moved to disqualify Kurtz. On April 29, 2005, this Court heard oral argument on the matter. II. Discussion

  The Rules of Professional Conduct governing attorneys practicing law in the Northern District of Illinois were adopted by the District Court effective September 1, 1999. Wilhelm, citing to Local Rule 83.51.9 of the Local Rules of the Northern District of Illinois,*fn1 argues that Kurtz cannot represent Defendant Qualkinbush in the current matter without violating her duty of loyalty and confidentiality to a former client. (Pl.'s Reply at 4.)

  Local Rule 83.51.9(b) states in relevant part:
A lawyer shall not knowingly represent a person in the same or a substantially related matter in which the firm with which the lawyer formerly was associated had previously represented a client, (1) whose interests are materially adverse to that person, and (2) about whom the lawyer had acquired information protected by LR 83.51.6 and LR 83.51.9(c) that is material to the matter, unless the former client consents after disclosure.
Local Rule 83.51.6 protects a client's confidences or secrets during or after termination of the professional relationship. Local Rule 83.51.9(c) protects a former client's information when that information is not "generally known."
  In the Seventh Circuit, a motion for disqualification of counsel is considered a drastic measure that interferes with an existing attorney-client relationship. Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 721-22 (7th Cir. 1982). Courts are directed to view these motions with "extreme caution." Id. at 722. The moving party bears the burden of proving the facts necessary for disqualification. Guillen v. City of Chicago, 956 F.Supp. 1416, 1421 (N.D. Ill. 1997). Thus, Wilhelm has the burden of showing that disqualification is required. In Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1266 (7th Cir. 1983), the Seventh Circuit stated:
For rather obvious reasons a lawyer is prohibited from using confidential information that he has obtained from a client against that client on behalf of another one. But this prohibition has not seemed enough by itself to make clients feel secure about reposing confidences in lawyers, so a further prohibition has evolved: a lawyer may not represent an adversary of his former client if the subject matter of the two representations is "substantially related," which means: if the lawyer could have obtained confidential information in the first representation that would have been relevant in the second. It is irrelevant whether he actually obtained such information and used it against his former client, or whether — if the lawyer is a firm rather than an individual practitioner — different people in the firm handled the two matters and scrupulously avoided discussing them.
  To determine whether the subject matter of the two representations is substantially related, the Court engages in a three-level inquiry. First, the Court makes a "factual reconstruction of the scope of the prior legal representation." LaSalle Nat'l Bank v. County of Lake, 703 F.2d 252, 255 (7th Cir. 1983). Next, the Court must determine "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." Id. at 255-56. This determination does not depend upon actual evidence showing that confidential information was shared — receipt of such information may be presumed. Analytica, Inc., 708 F.2d at 1266; LaSalle Nat'l Bank, 703 F.2d at 256; Safe-T-Products, Inc. v. Learning Res., Inc., No. 01 C 9498, 2002 WL 31386473, at *4 (N.D. Ill. Oct. 23, 2002). Finally, the Court must determine "whether that information is relevant to the issues raised in the litigation pending against the former client." LaSalle Nat'l Bank, 703 F.2d at 256. If the Court finds that a substantial relationship exists, we are entitled to presume that the attorney received confidential information during her prior representation. Id. The presumption of shared confidences can be rebutted by "demonstrating that `specific institutional mechanisms' (e.g., `Chinese Walls') had been implemented to effectively insulate against any flow of confidential information from the `infected' attorney to any other member of his present firm." Schiessle v. Stephens, 717 F.2d 417, 421 (7th Cir. 1983). See also LaSalle Nat'l Bank, 703 F.2d at 256; Novo Terapeutisk Lab. A/S v. Baxter Travenol Labs., Inc., 607 F.2d 186, 197 (7th Cir. 1979). Doubts as to the existence of a conflict of interest should be resolved in favor of disqualification. Novo Terapeutisk Lab. A/S, 607 F.2d at 189-90.

  A. Scope of Prior Legal Representation

  The scope of Andreou & Casson's prior legal representation of Wilhelm included claims against Calumet City and Qualkinbush, in her capacity as city clerk, for employment discrimination based upon sex, national origin and political affiliation. In December 2002, Wilhelm sought to retain Andreou & Casson in relation to employment discrimination. As mentioned above, Andreou & Casson wrote at least one letter to Calumet City and Qualkinbush on Wilhelm's behalf, setting out her legal position and her openness to settlement negotiations. On January 13, 2003, following the advice of Andreou & Casson, Wilhelm filed a charge of discrimination with the EEOC and Illinois Department of Human Rights. (Pl.'s Reply at Ex. F.) In the January 2003 charge, Wilhelm accused Qualkinbush and Calumet City of ongoing harassment and discrimination based on her Mexican national origin, beginning in July 2002. (Id.) While Andreou & Casson were representing her in this matter, Wilhelm advised the firm of potential sources of information, grievances filed with her union (Teamsters Local 726) and documents relating to her employment. (Casson Aff. ¶¶ 7, 11; Wilhelm Aff. ¶¶ 4-5.) Documents turned over to the firm included, among other things: Wilhelm's personal notes on her workplace conditions dating back to May 2002, which describe instances of harassment and discrimination based on sex, national origin and political affiliation; documentation from her union grievance, including the names of fourteen potential witnesses; and a report on the union's investigation and rejection of her claim. (Casson Aff. ¶¶ 7, 11; Wilhelm Aff. ¶¶ 4-5; Pl.'s Reply at Ex. D.) Wilhelm ultimately decided not to prosecute the EEOC charge in light of representations ...


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