# Michael F. Armstrong v. Clovis McAlpin

> Court of Appeals for the Second Circuit · June 20, 1980 · 625 F.2d 433

URL: https://www.frixlaw.com/law-library/cases/9466870

## Case

- **Full name:** Michael F. ARMSTRONG, Et Al., Plaintiffs-Appellees, v. Clovis McALPIN, Et Al., Defendants-Appellants
- **Court:** Court of Appeals for the Second Circuit
- **Decided:** June 20, 1980
- **Citations:** 625 F.2d 433; 51 A.L.R. Fed. 646; 1980 U.S. App. LEXIS 16419
- **Precedential status:** Published
- **Opinion:** Concurring in part by Mulligan
- **Judges:** Mulligan, Meskill, Van Graafeiland, Newman, Kaufman, Feinberg, Mansfield, Oakes, Timbers
- **Cited by:** 206 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Vacated on other grounds by McAlpin v. Armstrong, 449 U.S. 1106 (1981).
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9466870

## How later opinions describe it (automated extraction)

- stating that “we continue to believe that possible ethical conflicts surfacing during a litigation are generally better addressed by the comprehensive disciplinary machinery of the state and federal bar”
- noting that “Code’s Disciplinary Rules were drafted for use in disciplinary proceedings and were not intended [by the drafters] to be used as rules governing disqualification motions,” although such Rules provide guidance in deciding whether attorney’s participation will taint…
- recognizing appellate jurisdiction over orders granting disqualification motions in civil cases

## Opinion text

MULLIGAN, Circuit Judge,
concurring in part and dissenting in part.
I concur in that part of the majority opinion which holds that no attorney disqualification was required in this case but I respectfully dissent from the majority’s overruling Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2d Cir. 1974) (en banc).
The position of this court on this subject has been one of tergiversation. In Harmar Drive-In Theatre, Inc. v. Warner Bros. Pictures, Inc., 239 F.2d 555 (2d Cir. 1956), reh. den., 241 F.2d 937 (2d Cir. 1977), cert. denied, 355 U.S. 824 , 78 S.Ct. 31 , 2 L.Ed.2d 38 (1957) Judge Swan, with the concurrence of Judge Learned Hand (Clark, C. J., dissenting), held that denials of motions to disqualify counsel fall within the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 , 69 S.Ct. 1221 , 93 L.Ed. 1528 (1949). Harmar was implicitly overruled by Fleischer v. Phillips, 264 F.2d 515 (2d Cir. 1959), cert. denied, 359 U.S. 1002 , 79 S.Ct. 1139 , 3 L.Ed.2d 1030 (1959) but was resurrected by our unanimous decision en banc in Silver Chrysler in 1974. Today we inter Silver Chrysler but I refuse to participate in the sepulture.
In addition to our own agonizing over this problem, the conflict of opinion among the circuits 1 attests to the difficulties *447 which are inherent in reaching a solution. The issue is whether or not the denial of a motion to disqualify counsel is appealable within the so-called “collateral order” exception to the final judgment rule first announced in Cohen . My disagreement with the majority is based upon several of its premises.
I
The majority has the clear impression that the availability of an immediate appeal has contributed to the proliferation of disqualification motions and the use of such motions for delay and other purely tactical purposes. The only available evidence on this question is the opinions which this court has issued in response to interlocutory appeals under Silver Chrysler. It seems there have been eleven such opinions. In six of these we affirmed the court below. I cannot characterize this as a serious problem of calendar congestion. The majority contends that a prior ruling in favor of disqualification will give some assurance that appeals of grants of disqualification raise nonfrivolous issues, but that “there is no similiar assurance that appeals from denials of disqualification motions will raise a substantial question.” (maj. op. p. 441) It should be noted, however, that the af-firmance rates of the two categories of published opinions — appeals from grants and appeals from denials — are not significantly different. 2
*448 But more to the point, a proliferation of appeals, if such there be, has no logical bearing on the test set forth in Cohen . Appealability under Cohen does not depend upon the quantum of appellate business which might be generated by a holding in favor of appealability. This point was addressed recently in Abney v. United States, 431 U.S. 651 , 662 n. 7, 97 S.Ct. 2034 , 2041 n. 7, 52 L.Ed.2d 651 (1977). There a unanimous Court held that pretrial orders rejecting claims of former jeopardy were final decisions within Cohen and thus immediately appealable. The Solicitor General had argued that such a holding might encourage dilatory appeals. Mr. Chief Justice Burger rejected this argument, noting that it is “well within the supervisory powers of the courts of appeals to establish summary procedures and calendars to weed out frivolous claims of former jeopardy.” Id.
Aside from this observation, in appeals from denials of disqualification we have the power to award counsel fees and costs, which provide ample sanctions against those whose intention is to create delay. See, e. g., 28 U.S.C. §§ 1912 , 1927; Fed.R.App.P. 38. I conclude that the majority has failed to provide any empirical support for the premise which it believes requires a reexamination of Silver Chrysler; that conceptually this premise, even if true, is irrelevant; and that practically, if abuse occurs, there are means to curtail it better tailored to the abuse than the draconian alternative of denying all interlocutory appeals.
II
Cohen established three criteria for determining when an order is a “final decision” under 28 U.S.C. § 1291 . The order must (1) involve an important issue entirely collateral to the merits; (2) have been conclusively decided by the court below; and (3) be effectively unreviewable after final judgment. Id. at 546-47 , 69 S.Ct. at 1225-26 .
The majority concedes that rulings on disqualification motions are collateral within the meaning of Cohen . Nor is there any doubt that such orders are conclusive. Although the original dispute in this court over this question was framed in terms of finality, compare Harmar Drive-In Theatre, Inc. v. Warner Bros. Pictures, Inc., supra, with Fleischer v. Phillips, 264 F.2d 515 (2d Cir. 1959), it seems clear that such denials are no less conclusive than other orders which the Court has found appealable under Cohen. See, e. g., Stack v. Boyle, 342 U.S. 1 , 72 S.Ct. 1 , 96 L.Ed. 3 (1951) (motion for reduction of bail); Abney v. United States, 431 U.S. 651 , 97 S.Ct. 2034 , 52 L.Ed.2d 651 (1977) (motion to dismiss on double jeopardy grounds). The facts which are relevant to a decision whether to disqualify will generally be fully available at the outset of litigation. There is no particular reason to anticipate a reversal of position by the district court.
The majority finds that denials of disqualification motions do not satisfy two aspects of the Cohen criteria. It argues that the harm caused by an erroneous denial of a *449 disqualification motion is usually not irreparable because this court retains its traditional power to grant a new trial if the district court’s ruling is found after final judgment to be incorrect, (maj. op. p. 438) We respectfully disagree.
I do not read Silver Chrysler as the majority does, to permit appealability in all cases where there has been a denial of disqualification. We suggested in Lefrak v. Arabian American Oil Co., 527 F.2d 1136, 1139-40 (2d Cir. 1975) and W. T. Grant v. Haines, 531 F.2d 671, 678 (2d Cir. 1976) that for an order to be appealable under Silver Chrysler, it is necessary that the issue appealed from relate to a taint of the trial. If issues not involving the integrity of the trial are involved, there should be no appeal under Silver Chrysler. See, e. g., Lefrak v. Arabian American Oil Co., supra (improper solicitation of a client); W. T. Grant & Co. v. Haines, supra (improper communication with an adverse party). 3 The ethical problems involved in such cases can be handled by a bar association grievance committee or by the courts in separate proceedings. Where there is a conflict of interest, however, and counsel sought to be disqualified is in possession of privileged information which may be utilized against a former client, I cannot agree that an appeal from the final judgment and the granting of a new trial protect the interests of the client, much less the public interest in the integrity of the judicial process. We have supported an order of disqualification, in the words of Chief Judge Kaufman, because “[t]he stature of the profession and the courts, and the esteem in which they are held, are dependent upon the complete absence of even a semblance of improper conduct.” Em le Industries, Inc. v. Patentex, Inc., 478 F.2d 562, 575 (2d Cir. 1973). If on appeal from final judgment this court determines that counsel for the successful party had a conflict which contaminated the trial, the interests of the unsuccessful party are probably irremediably injured. The record has been made and it is a public record. The extent to which it has been poisoned by the use of privileged information may not be readily apparent. Retrial with new counsel becomes the empty ritual act which is characteristic of attempts to remedy the effects of erroneously decided Cohen-type orders after final judgment. Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 688-89 , 70 S.Ct. 861, 864-65 , 94 L.Ed. 1206 (1950). Moreover, the integrity of the judicial process has been sacrificed and that certainly is not redeemed by a second trial with qualified counsel. These are the elements of irreparable harm which are involved. The harm is not simply, as the majority would have it, the need “to bear the time and expense involved in a trial that may possibly be tainted.” (maj. op. p. 438)
In urging that orders granting disqualification do involve irreparable harm and therefore are appealable under Cohen , the majority suggests that the trial will be delayed until new counsel is obtained, the client will be separated from counsel of his choice and counsel himself will be stigmatized. We are of course dealing with imponderables, but even assuming all of these eventualities, they are less weighty than those which may well afflict the litigant forced to trial where his opponent is represented by an attorney who may have been privy to privileged information which can be now utilized against him. 4
*450 III
The majority also contends that Silver Chrysler, in permitting interlocutory appeals from orders denying disqualification, offended the Cohen requirement that the issue on appeal be “too important to be denied review.” Cohen v. Beneficial Industrial Loan Corp., supra, 337 U.S. at 546 , 69 S.Ct. at 1226 . The majority reads Cohen to be directed to those interlocutory appeals “raising potentially decisive legal, as opposed to factual, questions. In contrast, most disqualification motions involve primarily factual, rather than legal determinations [which] do not present ‘serious and unsettled question[s].’” (maj. op. p. 439) Assuming this to be a correct analysis of Cohen , how then can the majority at the same time argue that orders granting disqualification are appealable under Coheríl There is no question that such orders are appealable as Cohen exceptions to 28 U.S.C. § 1291 . See Emle Industries, Inc. v. Paten-tex, Inc., supra, at 570 n. 5. Precisely the same factual and legal issues are involved whether the district court grants or denies the motion to disqualify. The majority cannot have it both ways. If, as my brothers contend, disqualification motions do not raise any potentially decisive legal issues in unsettled areas of the law then they cannot reasonably contend that orders granting disqualification are appealable under Cohen .
Whether Cohen does in fact require that the order sought to be appealed involve a serious legal question which has not been settled has not been as clear as a mountain lake in springtime. The statement of the Cohen criteria which we have recited above and which has been repeated in Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 , 98 S.Ct. 2454, 2457 , 57 L.Ed.2d 351 (1978) and Abney v. United States, 431 U.S. 651, 658 , 97 S.Ct. 2034, 2039 , 52 L.Ed.2d 651 (1977) simply provides that the issue be “important” or “too important to be denied review.” The Court in Cohen did state that the issue in that case presented a serious and unsettled question. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. at 547 , 69 S.Ct. at 1226 . That this created a requirement beyond the normally stated criteria apparently was first suggested by Judge Friendly in Donlon Industries, Inc. v. Forte, 402 F.2d 935, 937 (2d Cir. 1968) and again in Weight Watchers of Philadelphia, Inc. v. Weight Watchers Int'l., Inc., 455 F.2d 770, 773 (2d Cir. 1972). It was applied also in International Business Machines Corp. v. United States, 480 F.2d 293, 298 (2d Cir. 1973) (en banc) (Mulligan, J.), cert. denied, 416 U.S. 980 , 94 S.Ct. 2413 , 40 L.Ed.2d 777 (1974).
This so-called “public importance” gloss on Cohen , however, has not been applied consistently in this circuit. Thus it has been noted that “many collateral order cases, including recent decisions from the Second Circuit, allow appeals that will not settle general questions, and that threaten to invite a large number of similar appeals. The recent ruling [citing Silver Chrysler] that orders granting or denying motions to disqualify counsel are appealable provides ample illustration” (emphasis supplied). Wright, Miller & Cooper, Federal Practice and Procedure § 3911 at 496. See also Note, The Appealability of Orders Denying Motions for Disqualification of Counsel in the Federal Courts, 45 U.Chi.L.Rev. 450, 461 (1978).
Having found no post-Cohen Supreme Court authority which has turned upon this *451 “public importance” factor or indeed has even mentioned it, I am now compelled to conclude that it is not a Cohen requirement. In Abney v. United States, supra, the Court held that there was a right to appeal from an order denying a motion to dismiss an indictment on double jeopardy grounds under Cohen . Whether or not double jeopardy applies in a particular case, however, will depend upon its facts. Id. 431 U.S. at 664 , 97 S.Ct. at 2042 . It is now apparent that such orders are all within Cohen despite the fact that they will normally involve no unsettled issues of law on appeal but rather will primarily require a factual determination. The issue of whether a litigant should be required to go to trial where his opponent is represented by counsel who is privy to confidential and privileged information presents a serious issue too important to be denied review and is thus within Cohen . So long as the unethical conduct exposes the trial to taint there is a public as well as a private interest that this collateral matter be given prompt appellate review. Appeal from the denial of such disqualification presents an even stronger case for Cohen treatment than an order granting disqualification, which precludes any possibility of a tainted trial.
The suggestion that § 1292(b) certification or mandamus will adequately protect the party who has lost the motion to disqualify is not persuasive. If these were sufficient remedies then they would equally bar resort to Cohen where disqualification is ordered. Appeal under § 1292(b) requires certification by the district court that an order involves a controlling question of law. But the majority argues that this seldom occurs because cases such as the one which we have today decided on the merits involve primarily the application of facts to established law. See also Trone v. Smith, 553 F.2d 1207 (9th Cir. 1977) (§ 1292(b) is not a proper avenue for review of denials of disqualification). Mandamus provides even less assurance of protection. Will v. United States, 389 U.S. 90, 95 , 88 S.Ct. 269, 273 , 19 L.Ed.2d 305 (1967) makes it plain that error, even gross error, as distinguished from a calculated and repeated disregard of governing rules, does not suffice to support issuance of the writ.
For these reasons we should adhere to Silver Chrysler. In any event, if the majority is correct that the “public importance” factor is inherent in Cohen , then we must also refuse to hear appeals from motions granting disqualification. We conclude that it is not an inherent factor and that both the grant and the denial of disqualification motions are appealable under Cohen .
. Interlocutory appeals of denials of disqualification are permitted under Cohen in five circuits: the Third Circuit, see Akerly v. Red Barn System, Inc., 551 F.2d 539 (3d Cir. 1977); Kramer v. Scientific Control Corp., 534 F.2d 1085 (3d Cir.), cert. denied, 429 U.S. 830 , 97 S.Ct. 90 , 50 L.Ed.2d 94 (1976); Greene v. Singer Co., 509 F.2d 750 (3d Cir. 1971), cert. denied, 409 U.S. 848 , 93 S.Ct. 54 , 34 L.Ed.2d 89 (1972) (adopting a case-by-case approach to appealability); the Fourth Circuit, see Aetna Casualty & Surety Co. v. United States, 570 F.2d 1197 (4th Cir.), cert. denied, 439 U.S. 821 , 99 S.Ct. 87 , 58 L.Ed.2d 113 (1978) (grants of disqualification also appealable); MacKethan v. Peat, Marwick, Mitchell & Co., 557 F.2d 395 (4th Cir. *447 1977) (per curiam); the Fifth Circuit, see Brown & Williamson Tobacco Corp. v. Daniel Int’l Corp., 563 F.2d 671 (5th Cir. 1977); the Seventh Circuit, see In re Special February 1977 Grand Jury, 581 F.2d 1262 (7th Cir. 1978); Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir.), cert. denied, 439 U.S. 955 , 99 S.Ct. 353 , 58 L.Ed.2d 346 (1978); and the Tenth Circuit, see State of New Mexico v. Aamodt, 537 F.2d 1102 (10th Cir. 1976), cert. denied, 429 U.S. 1121 , 97 S.Ct. 1157 , 51 L.Ed.2d 572 (1978); Fullmer v. Harper, 517 F.2d 20 (10th Cir. 1975).
The Sixth Circuit has recently held that: “where a District Court has heard a motion to disqualify an opposing party’s counsel, has denied said motion on the merits after [sic] evidentiary hearing, and has (as here) entered a finding to the effect that the moving party cannot be injured by the challenged representation,”
it will dismiss appeals from denials of disqualification. Melamed v. ITT Continental Baking Co., 592 F.2d 290, 295 (6th Cir. 1979) (motion to disqualify based on prior representation of a competitor). See also General Electric Co. v. Valeron Corp., 608 F.2d 265 (6th Cir. 1979), cert. denied, 445 U.S. 930 , 100 S.Ct. 1318 , 63 L.Ed.2d 763 (1980). Although the court in Me-lamed considered itself to be departing from Silver Chrysler, Melamed v. I.T.T. Continental Baking Co., supra, at 295, the rule announced in Melamed seems identical to this court’s clarification of Silver Chrysler in W. T. Grant & Co. v. Haines, 531 F.2d 671 (2d Cir. 1976).
In addition to this court, three circuits now do not permit interlocutory appeals of denials of disqualification: the D.C. Circuit, see Community Broadcasting of Boston, Inc. v. FCC, 546 F.2d 1022 (D.C. Cir. 1976); the Eighth Circuit, see In re Multi-Piece Rim Products Liability Litigation, 612 F.2d 377 (8th Cir. 1980), cert. granted sub nom. Firestone Tire & Rubber Co. v. Risjord,-U.S.-, 100 S.Ct. 2150 , 64 L.Ed.2d-(1980); and the Ninth Circuit, see Chugach Elec. Ass'n v. United States District Court for the District of Alaska, 370 F.2d 441 (9th Cir. 1966), cert. denied, 389 U.S. 820 , 88 S.Ct. 40 , 19 L.Ed.2d 71 (1967) (stating that denials are not appealable but granting petition for mandamus without citing Cohen); Cord v. Smith, 338 F.2d 516 (9th Cir. 1964), clarified, 370 F.2d 418 (9th Cir. 1966) (stating that denials are not appealable without citing Cohen but granting petition for mandamus).
. The eleven appeals from denials of disqualification are In the Matter of Bohack Corp., 607 F.2d 258 (2d Cir. 1979) (order denying disqualification reversed); Armstrong v. McAlpin, 606 F.2d 28 (2d Cir. 1979) (order denying disqualification reversed); In re Hartford Textile Corp., 588 F.2d 872 (2d Cir. 1978) (per curiam) (order affirmed), cert. denied, 444 U.S. 975 , 100 S.Ct. 473 , 62 L.Ed.2d 392 (1979); Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977) (order reversed); Allegaert v. Perot, 565 F.2d 246 (2d Cir. 1977) (order affirmed); SEC v. Sloan, 535 F.2d 679 (2d Cir. 1976) (per curiam) (order affirmed), cert. denied, 430 U.S. 966 , 97 S.Ct. 1646 , 52 L.Ed.2d 357 (1977); W. T. Grant & Co. v. Haines, 531 F.2d 671 (2d Cir. 1976) (order affirmed); Lefrak v. Arabian American Oil Co., 527 F.2d 1136 (2d Cir. 1976) (order affirmed); J. P. Foley & Co. v. Vanderbilt, 523 F.2d 1357 (2d Cir. 1975) (case remanded); Ceramco, Inc. v. Lee Pharmaceuticals, 510 F.2d 268 (2d Cir. 1975) (order affirmed); General Motors Corp. v. City of New York, 501 F.2d 639 (2d Cir. 1974) (order reversed). Counting the reversal in Armstrong which this court now vacates, six of eleven appeals from denials of disqualification resulted in affirmance.
There are nine opinions arising from appeals of grants of disqualification. United States v. *448 Ostrer, 597 F.2d 337 (2d Cir. 1979) (order granting disqualification affirmed); Board of Education v. Nyquist, 590 F.2d 1241 (2d Cir. 1979) (order reversed); In re Taylor, 567 F.2d 1183 (2d Cir. 1977) (order reversed and remanded as premature); Government of India v. Cook Industries, Inc., 569 F.2d 737 (2d Cir. 1978) (order affirmed); NCK Organization, Ltd. v. Bregman, 542 F.2d 128 (2d Cir. 1976) (order affirmed); Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976) (order affirmed); International Electronics Corp. v. Flanzer, 527 F.2d 1288 (2d Cir. 1975) (order reversed); United States v. Armedo-Sarmiento, 524 F.2d 591 (2d Cir. 1975) (order reversed); Hull v. Celanese Corp., 513 F.2d 568 (2d Cir. 1975) (order affirmed). Five of nine appeals of grants of disqualification resulted in affirmance.
Any conclusions drawn from the above facts are obviously subject to several caveats. The sample may be too small to reveal a statistically significant difference. Grants of disqualification in criminal cases, see, e. g., United States v. Armedo-Sarmiento, supra, may result in a higher percentage of reversals because Sixth Amendment values are implicated, see Faretta v. California, 422 U.S. 806 , 95 S.Ct. 2525 , 45 L.Ed.2d 562 (1975). That there are equal percentages of affirmances among published opinions does not necessarily imply that there are equal percentages of affirmances without opinions. Nevertheless, considering the information available to us, it is fair to say that the existence of roughly equivalent percentages of affirmances of grants and denials does not support the majority’s premise.
. This restriction on appealability does not involve this court in any elaborate consideration of the merits in order to determine appealability or in any elaborate factual inquiry such as that necessitated by the “death knell” approach to the appealability of class certification denials which was recently disapproved in Coopers & Lybrand v. Livesay, 437 U.S. 463 , 98 S.Ct. 2454 , 57 L.Ed.2d 351 (1978). In many cases it will involve little more than a consideration of which Disciplinary Rule is implicated. It is much more akin to the inquiry we must make in applying 28 U.S.C. § 1292 (a)(1) which facially permits interlocutory appeals from orders refusing injunctions. In Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478, 480 , 98 S.Ct. 2451, 2453 , 57 L.Ed.2d 364 (1978) the Court construed the section to be limited to those orders involving “serious, perhaps irreparable, consequences.”
. We have, of course, noted our reluctance to separate a client from counsel of his choice and will not where the professional misconduct *450 charged does not prejudice the opposing party or taint the litigation. W. T. Grant & Co. v. Haines, 531 F.2d 671 (2d Cir. 1976). However, where the conflict of interests exposes a former client to prejudice and this taints the trial, we have not hesitated to order disqualification. In the Matter of Bohack, 607 F.2d 258 (2d Cir. 1979). See also Hull v. Celanese Corp., 513 F.2d 568 (2d Cir. 1975). In cases involving bankrupts or debtors-in-possession it has become routine to appoint prior counsel as counsel in the proceedings in bankruptcy. This creates a clear danger of conflict of interest. In Bohack we depended upon Silver Chrysler for appellate jurisdiction. Today’s opinion is particularly regrettable in that it shields these cases from immediate review. The affront to the integrity of the judicial process is especially serious since appointment of counsel has been routinely approved by the bankruptcy court. See In re Arlan’s Department Stores, Inc., 615 F.2d 925 (2d Cir. 1979).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9466870. Public record. Not legal advice.