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In re Plasma-Derivative Protein Therapies Anitrust Litigation

April 7, 2010

IN RE: PLASMA-DERIVATIVE PROTEIN THERAPIES ANITRUST LITIGATION


The opinion of the court was delivered by: Judge Joan B. Gottschall

MDL No. 2109

THIS ORDER RELATES TO ALL ACTIONS

MEMORANDUM OPINION & ORDER

On September 16, 2009 Detroit Medical Center ("Detroit") filed a complaint in the Eastern District of Pennsylvania against Baxter International, Inc., CSL Limited, and CSL Behring LLC. See Detroit Med. Ctr. v. CSL Ltd., No. 09 C 4216 (E.D. Pa. Sept. 16, 2009). Pursuant to a consolidation order issued by the United States Judicial Panel on Multidistrict Litigation, Detroit's complaint is pending before the court for disposition of all pre-trial proceedings. See Dec. 12, 2009 Order (Doc. No. 1). In the court's initial order, applicable to all of the consolidated actions, the court indicated that it would appoint attorneys to a plaintiffs' steering committee (the "Committee") and would review applications for that committee prior to the initial status conference. See Jan. 13, 2010 Order (Doc. No. 12). Detroit subsequently filed an objection to the Committee application of Cohen, Milstein, Sellers & Toll PLLC ("Cohen"), asserting that Cohen has a conflict of interest with Detroit because Cohen is prosecuting an action against Detroit in the Eastern District of Michigan styled Cason-Merendo v. Detroit Medical Center, No. 06 C 15601 (E.D. Mich.). Detroit raised the issue again at the initial status conference and the court ordered further briefing on the alleged conflict.

I. ANALYSIS

A court evaluates the merits of a disqualification motion by determining first whether an ethical violation occurred and then considering whether disqualification is the appropriate remedy. See Alex Munoz Gen. Contractor, Inc. v. MC3D, Inc., No. 98 C 4489, 1998 WL 831806, at *2 (N.D. Ill. Nov. 25, 1998). It is the moving party's burden to show facts meriting disqualification. Lanigan v. Resolution Trust Corp., No. 91 C 7216, 1992 WL 350688, at *1 (N.D. Ill. Nov. 23, 1992). Disqualification is a drastic remedy that courts should hesitate to impose. See Schiessle v. Stephens, 717 F.2d 417, 420 (7th Cir. 1983).

Detroit moves to disqualify Cohen contending that its appointment to the Committee would violate Local Rule 83.51.7, which provides in relevant part:

(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:

(2) each client consents after disclosure.

L.R. 83.51.7. Detroit maintains that this rule bars Cohen's appointment to the Committee because Cohen is directly adverse to Detroit in Cason-Merendo and Detroit will not consent to Cohen's representation of it in this action. In opposition, Cohen urges that its appointment to the Committee would create no conflict because Detroit would never become Cohen's "client" within the meaning of the rule, as the client of the Committee is the putative class, not individual class members. Accordingly, Cohen contends that its "representation" of Detroit as a member of the Committee would be analogous to its representation of other absent class members. Such conflicts, Cohen submits, do not bar counsel's representation pursuant to the American Bar Association's (the "ABA"'s) Model Rules of Professional Conduct and in the view of a number of district courts that have considered the issue.

Both Detroit and Cohen appear to agree that Rule 83.51.7 would operate as a bar to Cohen's direct representation of Detroit, and also concur that Cohen would be able to represent the purported class in this matter had Detroit not filed a complaint.*fn1 The crux of the dispute, then, is whether Cohen's membership on the Committee would create a relationship between Cohen and Detroit that is more analogous to class counsel's relationship with an absent class member (Cohen's position) or to the classic attorney-client relationship (Detroit's position).

In support of the attorney-client analogy, Detroit directs the court to the court's own order outlining the responsibilities of the Committee, which include "conducting all pre-trial discovery on behalf of plaintiffs in all actions" and filing motions on behalf of plaintiffs in all actions. See Jan. 13, 2010 Order 7-8. From this directive Detroit reasons that Cohen would be acting as Detroit's attorney and Detroit as Cohen's client.

While the Committee's review of discovery does suggest that the relationship between Detroit and Cohen would differ from the relationship between class counsel and an absent class member, the signing of legal documents on Detroit's behalf strikes the court as indistinguishable from class counsel's role with respect to all putative class members whether actually involved in these consolidated proceedings or absent from them. Moreover, though Detroit has raised the issue of the Committee's review of documents generally, and relied on that role to support its position that Cohen would enter into an attorney-client relationship with it if appointed to the Committee, Detroit has not articulated how Cohen's review of its documents would prejudice it. All that Detroit offers in this regard is an assertion that it could not fully trust Cohen with its confidential information, failing to specify what kind of discovery is likely to arise in this action and why Detroit could not trust Cohen with that particular kind of information. Such precision is important, as courts consider these factors highly relevant to the disqualification analysis in class actions. The district court in Lewis v. National Football League, 146 F.R.D. 5 (D.D.C. 1992), for example, declined to certify a class under Rule 23(a)(4) of the Federal Rules of Civil Procedure after finding counsel inadequate because it was adverse to nearly ten percent of the plaintiff class in another lawsuit and discovery in Lewis might require disclosure of "confidential information [which] could be used to [plaintiffs'] detriment" in the adverse action. Id. at 11. Detroit has not provided the court with any reason to believe that discovery would pose the same problem here and it is not obvious how it would. An action alleging that a hospital unlawfully suppressed the wages of its nurses seems completely unrelated to the claims at issue here: that hospitals and other entities purchased plasma-derivative products at supra-competitive prices. The court also rejects Detroit's contention that the prejudice to it from Cohen's appointment and the relationship between the instant suit and Cason-Merendo are irrelevant to the analysis under L.R. 83.51.7, as the authority Detroit cites in support of these assertions arose outside the class context. See, e.g., H.G. Gallimore, Inc. v. Abdula, No. 85 C 7190, 1987 WL 5940, at *2 (N.D. Ill. Jan. 29, 1987) (finding overlap between subject matter of lawsuits creating conflict irrelevant because "duty of loyalty, not the need to protect attorney-client confidences," is the policy driving the prohibition against simultaneous adverse representation).

For its part, Cohen bolsters its position that absent class members do not create conflicts by looking to the ABA's Model Rules of Professional Conduct (upon which this district's local rules are patterned, see L.R. 83.50.1), focusing in particular on Comment 25 to Model Rule 1.7 (analogous to L.R. 83.51.7), which provides "that unnamed members of the class are ordinarily not considered to be clients of the lawyer for purposes of applying... this rule." ABA Model R. of Prof'l Conduct 1.7, Comment No. 25. Other courts have similarly exempted attorneys whose adverse positions to absent class members would have violated Model Rule 1.7 and its progeny if the rule were ...


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