The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
EDUCATIONAL BROADBAND
CORPORATION,
Plaintiff,
vs. No. 24-1206-STA-jay
RURAL CONNECT, LLC,
Defendant.
ORDER AFFIRMING DECISION OF MAGISTRATE JUDGE
GRANTING DEFENDANT’S MOTION TO DISQUALIFY PLAINTIFF’S ATTORNEY
On April 25, 2025, Defendant Rural Connect, LLC, filed a motion to disqualify counsel
for Plaintiff Educational Broadbrand Corporation based on Plaintiff’s counsel’s prior
representation of Defendant in other matters. (ECF No. 26.) Plaintiff filed a response in
opposition to the motion. (ECF No. 29.) The Court referred the motion to the Magistrate Judge
for determination on May 13, 2025. (ECF No. 30.) On June 25, 2025, the Magistrate Judge
issued an order granting the motion to disqualify. (ECF No. 31.) Plaintiff has appealed that
decision (ECF No. 32), and Defendant has responded to the appeal. (ECF No. 33.) For the
reasons set forth below, the decision of the Magistrate Judge is AFFIRMED.
Standard of Review
Pursuant to 28 U.S.C. § 636(b), a district court shall apply a “clearly erroneous or
contrary to law” standard of review for nondispositive preliminary matters. United States v.
Curtis, 237 F.3d 598, 603 (6th Cir. 2001) (citing United States v. Raddatz, 447 U.S. 667, 673
(1980)). A district judge “shall consider” objections to a magistrate judge’s order on a
nondispositive matter and “shall modify or set aside any portion of the magistrate judge’s order
found to be clearly erroneous or contrary to law.” Bell v. Int’l Bhd. of Teamsters, 1997 WL
103320 *4 (6th Cir. 1997) (quoting Fed. R. Civ. P. 72(a)). “The clearly erroneous standard
applies only to factual findings made by the Magistrate Judge, while legal conclusions will be
reviewed under the more lenient contrary to law standard.” E.E.O.C. v. Burlington N. & Santa Fe
Ry. Co., 621 F. Supp.2d 603, 605 (W.D. Tenn. 2009) (citation omitted). Under the clearly
erroneous standard for findings of fact, the Court need only consider whether any evidence or
showing exists to support the Magistrate Judge’s findings and whether the findings were
reasonable. See Tri–Star Airlines, Inc. v. Willis Careen Corp. of Los Angeles, 75 F. Supp.2d 835,
839 (W.D. Tenn. 1999) (citations omitted) (explaining that the clearly erroneous “standard does
not permit the reviewing court to substitute its own conclusion for that of the magistrate judge.
Rather, the clearly erroneous standard only requires the reviewing court to determine if there is
any evidence to support the magistrate judge’s finding and that the finding was reasonable.”)
“When examining legal conclusions under the contrary to law standard, the Court may overturn
any conclusions of law which contradict or ignore applicable precepts of law, as found in the
Constitution, statutes, or case precedent.” Doe v. Aramark Educ. Res., Inc., 206 F.R.D. 459, 461
(M.D. Tenn. 2002) (citing Gandee v. Glaser, 785 F. Supp. 684, 686 (S.D. Ohio 1992)), aff’d, 19
F.3d 1432 (6th Cir. 1994).
The party filing the objections or appeal has the burden of proving that the decision was
clearly erroneous or contrary to law. See 12 Fed. Prac. & Proc. Civ. § 3068.2 (2d ed.) (citing
Lopez v. Metropolitan Gov’t of Nashville and Davidson Cty, 646 F. Supp. 2d 891, 921 (M.D.
Tenn. 2009)); see also Delk v. CoreCivic, 2023 WL 5867861, at *2 (W.D. Tenn. Sept. 11, 2023)
(“The burden of demonstrating that the magistrate judge’s decision was clearly erroneous or
contrary to law rests on the shoulders of the objector.”)
Background/Analysis
The Magistrate Judge summarized the events leading up to this lawsuit as follows.
This case concerns a contract dispute. Specifically, a lease, which was originally
entered into between EBC and Wisper, LLC in 2012. The lease concerns
telecommunication services commonly referred to as “spectrum.” EBC holds a
license with the FCC permitting them to use specific spectrum, and EBC may
lease out excess capacity spectrum to third parties. Under the lease at issue, EBC
leased its excess capacity spectrum to Wisper via a “Long Term De Facto
Transfer Lease Agreement” on March 9, 2012 (“Spectrum Lease”).
In 2013, Wisper filed for Chapter 11 bankruptcy through attorneys that are not
involved in the present case. In the course of that bankruptcy, a surviving business
entity, Wisper II, LLC, emerged. Wisper II acquired all assets and liabilities of
Wisper. Relevant in the present case, Wisper II emerged as a board-managed
LLC, including EBC’s sole shareholder, Tom Farrell. Therefore, Tom Farrell
became a manager of both Wisper II and EBC. The Spectrum Lease was then
amended and undertaken by Wisper II independent of legal advice from Glankler
Brown attorneys.
In 2016, Wisper II filed for Chapter 11 bankruptcy with Glankler Brown attorney
Michael P. Coury as counsel of record. Under the confirmed Chapter 11 plan, the
Spectrum Lease was assumed by Wisper II and then consensually amended by
Tom Farrell as “the manager of both entities . . . on behalf of both entities.”
Farrell purportedly advised Coury of “how the plan should treat the Spectrum
Lease” and “there were no actual negotiations between Wisper II and EBC.”
Wisper II changed its name to Rural Connect, LLC in 2019. Rural Connect filed
for Chapter 11 bankruptcy in 2021 with Glankler Brown attorneys Coury and
Ricky Hutchens as counsel of record. In the course of Rural Connect’s
bankruptcy, the principal adverse creditor, Ally Finance, purchased “the
membership interest of all the non-Ally related members.” As part of the Chapter
11 plan, “EBC agreed to allow [Rural Connect] to defer the annual payments
otherwise due to be paid” under the Spectrum Lease through a “Payment Deferral
Agreement.” Farrell ceased management of Rural Connect in June 2022 when
Ally purchased the remaining membership interests. Notably, the Glankler Brown
attorneys’ representation of Rural Connect raised an adversarial conflict issue,
given that the Glankler Brown attorneys also represented an entity with a minority
membership interest in Rural Connect. Bankruptcy Court Judge Croom provided
the following conclusion:
In the case at bar, the Court concludes that neither Coury nor Glankler
Brown currently hold an interest adverse to Rural Connect or the estate
within the meaning of 11 U.S.C. §§ 101(14) or 327(a). The Court also
concludes that there is no actual conflict of interest at this time in Rural
Connect’s case. Ally’s objection concerned Coury and Glankler Brown’s
indirect relationship with Broadband Properties and Farrell. As stated
supra Coury does not represent either entity. Neither entities are creditors
of Rural Connect. Rural Connect’s largest secured creditor is Ally, who is
not represented by Coury or Glankler Brown. The Court finds neither
Coury nor Glankler Brown possess, at this time, a predisposition which
would render bias against Rural Connect. However, the Court cautions
Coury and Glankler Brown that they have a continuing obligation to
assess their disinterestedness under Bankruptcy Rule 2014. Should a
conflict arise as this case progresses, the Court reserves its right to
reexamine this issue.
In re Rural Connect, LLC, Case No. 21-10872, at 2.
(Mag. J. Ord. pp. 1-3, ECF No. 31 (record citations omitted)).
The Magistrate Judge then discussed the arguments of the parties.
Rural Connect now seeks to disqualify Coury and Hutchens “[d]ue to [their] prior
representation of Rural Connect and its predecessor in previous proceedings
involving the Spectrum Lease.” Rural Connect believes that the Glankler Brown
attorneys’ representation of EBC in the present matter violates Rules 1.8 and 1.9
of the Tennessee Rules of Professional Conduct and must be excluded under
Bowers v. Ophthalmology Grp., 733 F.3d 647, 651 (6th Cir. 2013). Additionally,
Rural Connect claims that the Glankler Brown attorneys are likely to testify in the
present matter and are in violation of Rule 3.7 of the Tennessee Rules of
Professional Responsibility.
EBC claims that the Glankler Brown attorneys’ prior representation of Rural
Connect does not involve the same or substantially related matters as presented in
this case. Relevant to the present case, the Spectrum Lease was “neither drafted
nor negotiated by Glankler Brown.”
…
EBC counsel notes that “Glankler Brown dealt exclusively with Tom Farrell in
connection with Wisper II and [Rural Connect]’s Chapter 11 plans and Farrell, as
manager of both [Rural Connect] and EBC, could not maintain confidential
information from himself.” EBC argues that any purported confidential
information provided by Farrell will simply be provided to any subsequent
counsel, meaning that disqualification will not prevent EBC from using any
alleged confidential information.
(Id. at pp. 3-4 (record citations omitted)).
Both parties agree that the Magistrate Judge correctly relied on Bowers in making his
decision. “[D]isqualification of counsel is appropriate if (1) a past attorney-client relationship
existed between the party seeking disqualification and the attorney it seeks to disqualify; (2) the
subject matter of those relationships was/is substantially related; and (3) the attorney acquired
confidential information from the party seeking disqualification.’” Bowers, 733 F.3d at 651
(citing Dana Corp. v. Blue Cross & Blue Shield Mut. of N. Ohio, 900 F.2d 882, 889 (6th Cir.
1990)). (Mag. J. Ord. p. 5.) The three-prong Bowers test “may be used in place of, or in
conjunction with, any relevant rules of professional conduct of the state where the attorney’s
principal office is located because the rules, if based on the Model Rules of Professional
Responsibility, are essentially the same.” (Id. (citations omitted)). The parties also agree that the
Magistrate Judge correctly stated that the “party seeking disqualification bears the burden of
proving that disqualification is necessary, and this burden of proof is high.” (Id. (citations
omitted)).
The Magistrate Judge looked at the first Bowers prong and found that a past attorney-
client relationship existed between Defendant (the party seeking disqualification) and Glankler
Brown (the attorney it seeks to disqualify). In its appeal, Plaintiff acknowledges that Defendant
has met the first prong – Glankler Brown did, in fact, previously represent Defendant. However,
Plaintiff argues that the Magistrate Judge incorrectly determined that Defendant had met the
second Bowers prong because Glankler Brown’s representation does not involve the same or
substantially related matter. As for the third Bowers prong, Plaintiff argues that no confidential
information could have been acquired by Glankler Brown.
According to Plaintiff,
RC can point to no “confidential information” that Glankler Brown would have
acquired in carrying out instructions to draft a Chapter 11 plan provision to
assume a Spectrum Lease which it neither drafted, negotiated, or modified. As
Tom Farrell was manager of both EBC and RC in connection with any
modifications to the Spectrum Lease, this is a situation where Farrell functionally
“negotiated” with himself and there is no information which could be considered
confidential. Stated differently, Farrell, wearing his RC hat, could not keep
information he learned as manager of RC, confidential from himself, wearing his
hat as manager of EBC. Moreover, rather than there being a conflict of interest
between RC and EBC, there was an identity of interests between RC and EBC in
having the Spectrum Lease assumed and modified. As the current lawsuit
involves issues surrounding a default of the assumed Spectrum Lease which
occurred nearly two years after Farrell departed RC and long after Glankler
Brown’s representation of RC ceased, disqualification should be denied since
under the facts at hand it is legally impossible for confidential information to have
been conveyed to Glankler Brown in the prior matter.
(App. p. 14, ECF No. 32.)
The Court finds that, in its appeal, Plaintiff has not shown that the Magistrate Judge’s
rejection of its second prong argument was clearly erroneous or contrary to law. The Court
agrees with the Magistrate Judge’s determination and with Defendant’s position that the subjects
of the current dispute — the Spectrum Lease and Payment Deferral Agreement — were central
to the bankruptcy plans that Glankler Brown helped craft on Defendant’s behalf, even though the
“scope of the bankruptcy proceedings and this current contract dispute are distinct.” (Mag. J.
Ord. p. 9.) The bankruptcy reorganization plan’s assumptions, deferral terms, and lease
compliance were negotiated and implemented during Glankler Brown’s representation. As the
Magistrate Judge determined, “[u]ltimately, this case is substantially related to the prior
representation because ‘the matters or transactions in question are relevantly interconnected or
reveal the client’s pattern of conduct.’” (Id. at p. 10 (citing Bowers)). Thus, Defendant has
established the second Bowers prong for disqualification.
As for the third prong, the Magistrate Judge correctly rejected Plaintiff’s argument that
no information could have been confidential because Tom Farrell controlled both entities. As
discussed by Defendant, Glankler Brown’s duty of confidentiality was owed to it and not to
Farrell individually. “This attorney-client relationship was with the business entities and not with
Tom Farrell, as an attorney’s loyalty lies with a business and not any individual shareholder,
manager, or member.” (Mag. J. Ord. p. 9 (citations omitted)). The fact that Farrell held
overlapping management roles does not nullify the privilege between Defendant and its attorney.
See, e.g., Santander Sec. LLC v. Gamache, 2017 WL 1208066, at *3 (E.D. Pa. Apr. 3, 2017)
(citing In re Yarn Processing Patent Validity Litigation, 530 F.2d 83, 89 (5th Cir. 1976) (“[T]he
Fifth Circuit had long held that once the moving party showed that the prior and present matters
were substantially related, this triggered a presumption that ‘confidences potentially damaging to
the client’ were disclosed to the challenged attorney in the prior matter, and that the attorney’s
firm shared those confidences, compelling its disqualification.”) The rule aims to “aid the frank
exchange between attorney and client” because the mere perception that an attorney could use a
former client’s confidential information without its consent “will tend to undermine public
confidence in the legal profession and the judicial process.” Coates v. Brazoria Cnty. Tex., 2012
WL 2568129, at *1 (S.D. Tex. June 29, 2012) (quoting In re Yarn, 530 F.2d at 89).
The Magistrate Judge defined “confidential information” in accordance with the
Tennessee Rules of Professional Conduct and Bowers. “Regarding the third element of Bowers,
‘confidential information’ is generally regarded as information that is gained during or related to
the representation of a client in a matter.” Tenn. S. Ct. Tr. 9, RPC 1.6(a), cmts. 2, 4; see Bowers,
733 F.3d at 650–51.” (Mag. J. Ord. p. 7.) He then determined that, despite Plaintiff’s argument to
the contrary, “a former client need not specify the confidential information that was revealed in
the prior representation” and that a “court must review the confidential information inquiry from
a cruising altitude ‘using generalities’ rather than ‘examining what actually happened.’” (Id.
(citations omitted)).
The Magistrate Judge pointed out that there was “a reasonable argument that the Glankler
Brown attorneys cannot wield any pre-possessed knowledge to Rural Connect’s detriment, as
Farrell will likely imbue any new attorneys with the same information.” (Id.) But he then
acknowledged that “this circumstance is not contemplated by the rigid rules before the Court. As
such, there appears to be no alternative to disqualification.” (Id.)
In this case, Glankler Brown necessarily gained insight into Defendant’s financial status,
lease compliance risks, and internal legal positions in connection with the Spectrum Lease — all
relevant to the present dispute.
Rural Connect, through Farrell, provided the Glankler Brown attorneys with
information on “how the [2016 bankruptcy] plan should treat the Spectrum
Lease.” This information clearly extends beyond general information about
business practices and instead reveals the client’s pattern of conduct. Under the
generalized view, it is clear that confidential information related to the Spectrum
Lease would ordinarily, and perhaps necessarily, be disclosed in the course of the
prior representation.
(Mag. J. Ord. p. 1 (record and case citations omitted)).
This Court finds that the Magistrate Judge’s decision that “[a]ll three elements of the
Bowers analysis have been met and the Tennessee Rules of Professional Conduct similarly point
toward disqualification; thus, Rural Connect has satisfied its burden in proving that the Glankler
Brown attorneys must be disqualified,” (id. at p. 12) is neither clearly erroneous nor contrary to
law. Thus, the decision of the Magistrate Judge must be affirmed.
Summary and Conclusion
Upon consideration of the Magistrate Judge’s order, the objections of Plaintiff,
Defendant’s response, and the entire record, the Court finds that the Magistrate Judge correctly
set forth the applicable law and cogently applied it to any disputed issues; thus, his decision was
not “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); see Fed. R. Civ. P. 72(a).
Accordingly, the Court hereby OVERRULES Plaintiff’s objections and AFFIRMS the
Magistrate Judge’s order in its entirety.
Plaintiff will have twenty-eight (28) days from the entry of this order in which to inform
the Court of its new attorney.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: September 18, 2025.