The opinion of the court was delivered by: Young B. Kim United States Magistrate Judge
Magistrate Judge Young B. Kim
MEMORANDUM OPINION and ORDER
Before this court is the defendants' motion to disqualify Phillip Aaron ("Aaron") and Phillip Aaron Law Firm, P.C. from representing the plaintiffs in this case. The defendants argue that Aaron must be disqualified because he has a personal conflict of interest that will impair his ability to zealously represent his clients. They also argue that Aaron should be disqualified because he is a fact witness to the events underlying the current claims. For the following reasons, the defendants' motion to disqualify plaintiffs' counsel is granted.
On December 10, 2009, attorney Phillip Aaron filed this multi-count lawsuit on behalf of 73 plaintiffs who identify themselves as African American and Hispanic survivors of sexual abuse perpetrated by priests in the Catholic Archdiocese of Chicago ("the Archdiocese"). Each of the plaintiffs has mediated or litigated prior claims against the Archdiocese stemming from that alleged abuse. In the current suit, the plaintiffs claim that in the course of the previous legal and mediation proceedings, the Archdiocese, Cardinal Francis E. George, and Bishop Raymond Goedert violated the plaintiffs' civil and constitutional rights by, among other things, injecting "discriminatory conditions" into the mediation proceedings and settling their abuse claims for less money than they offered to white sexual-abuse victims. (R. 14, Am. Compl. at 25-26.) The plaintiffs also claim that the defendants' conduct violated the Federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, et seq., and numerous state laws. (Id. at 27-35.) The complaint demands $8.5 million in damages for each of the 73 plaintiffs (a total of $620.5 million). (Id. at 35-36.)
On March 1, 2010, the Executive Committee for the United States District Court for the Northern District of Illinois referred this case to the assigned magistrate judge to conduct hearings and enter appropriate orders on all nondispositive pretrial motions. Two weeks later the defendants filed the current motion to disqualify Aaron, along with a motion to dismiss the complaint in its entirety. The motion to disqualify falls within the scope of the referral to this magistrate judge. The motion to dismiss is currently pending before the presiding district judge.
In support of their motion to disqualify Aaron and his law firm, the defendants submitted documents showing that he represented most of the current plaintiffs in the mediation and settlement proceedings that gave rise to the current allegations. (R. 26, Mot. to Disqualify, Group Exs. A-D.) Aaron negotiated settlements on behalf of 47 of those plaintiffs. (Id. Group Exs. B & C.) He signed each of the 47 settlement agreements, which include language releasing the Archdiocese and Cardinal George from any known or unknown claims arising from any matter prior to the date of the agreements. (Id.) Six of the settlement agreements go further than releasing future claims; they include the following indemnification language:
Phillip Aaron, individually and on behalf of The Law Office of Phillip Aaron, and [Doe], agree to hold harmless, defend and indemnify the Released Parties their agents, attorneys and insurers, from payment and satisfaction of any and all liens, claims, or causes of action related to this Agreement or any tax related liabilities or responsibilities related to this Agreement. (Id. Group Exs. B & C, Settlement Agreements of Jane Does 1-4, John Does 14 & 35, ¶ 17.)
Although the current complaint is lengthy and includes a number of factual assertions that seem untied to any legal claims, all of the allegations relate to the course of the prior litigation and mediation in which Aaron participated as counsel for the claimants. For example, the plaintiffs allege that in the course of mediation the defendants: forced only minority abuse victims to submit to polygraph examinations, subjected them to demeaning treatment, tried to force them to remain silent regarding their claims, concealed evidence from them to cause them to settle their claims for less than they are worth, and refused to settle with some of them because of racial prejudice. (R. 14, Am. Comp. at 25-26, 29.) Whether those allegations state a federal claim is a question that is currently pending before the district judge. (See R. 28, Mot. to Dismiss.)
In the current motion to disqualify, the defendants argue that Aaron cannot serve as the plaintiffs' attorney without violating this court's local rules regarding attorney conflicts of interest and attorneys serving as witnesses. See L.R. 83.51.7 (Conflicts of Interest); L.R. 83.53.7 (Lawyer as Witness). According to the defendants, Aaron's conflict stems from what they say is his agreement to personally indemnify the defendants from liability for the claims described in the current complaint. They also argue that because he was present throughout the mediation proceedings which are the subject of this lawsuit, Aaron will be an essential fact witness in this case.*fn1 In response, the plaintiffs argue that Aaron has no conflict of interest because, they say, the indemnification clauses were never meant to cover the current allegations. Alternatively, they argue that because many (but not all) of the plaintiffs have consented to the cited conflict, disqualification is unnecessary. Finally, the plaintiffs argue that even if Aaron eventually becomes a witness, it is premature at the pleading stage to disqualify him based on the attorney-witness rule.
The Seventh Circuit has long viewed attorney disqualification as a "drastic measure," and warned that motions for disqualification "should be viewed with extreme caution" given their potential misuse as "techniques of harassment." Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 721-22 (7th Cir. 1982); see also Owen v. Wangerin, 985 F.2d 312, 317 (7th Cir. 1993). Nonetheless, there are situations where disqualification is "both legitimate and necessary," Freeman, 689 F.3d at 722, and this court has broad discretion to determine whether disqualification is proper in a particular case, Whiting Corp. v. White Mach. Corp., 567 F.2d 713, 715 (7th Cir. 1977). In making that determination, this court must balance the clients' interest in retaining the counsel of their choice against this court's interest in upholding the ethical standards set forth in its local rules. See Hutchinson v. Spanierman, 190 F.3d 815, 828 (7th Cir. 1999) (discussing attorney-witness conflict under similar Indiana rules); Whiting, 567 F.2d at 715.
This court begins its analysis with the weaker of the defendants' arguments in favor of disqualification: that Aaron should be disqualified because he may serve as a necessary fact witness in this case. The relevant ...