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Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Counsel Not Disqualified for Representing Former Executives of Corporate Client at Deposition — Anti-Solicitation Rule — Waiver by Not Objecting Despite Advance Knowledge of Representation

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From Zarrella v. Pacific Life Ins. Co., 2011 U.S. Dist. LEXIS 108229 (S.D. Fla. Sept. 22, 2011):

During the course of this litigation, Plaintiff Zarrella's counsel advised Defendant Pacific Life's counsel of record, Enrique D. Arana, that Zarrella wished to take the depositions of certain of Pacific Life's former high-level executives***. Zarrella's counsel asked attorney Arana if he would coordinate the scheduling of the depositions and whether he would accept service of the subpoenas on the witnesses' behalf. Stephen J. Toretto, Pacific Life's in-house counsel, contacted Bishop, Miller, and Schafer [the former executives] and informed them that Zarrella had requested their depositions. Toretto Dec. at ¶ 4 (DE 139-1). Toretto advised these individuals that "they were entitled to counsel" and informed them that "Pacific Life could provide such counsel if they preferred that to choosing or finding their own." Id. Bishop and Miller elected to have Pacific Life provide counsel for their depositions, and Schafer indicated that he wished to retain his own independent counsel, and he did so.***

Zarrella argues that by offering to represent (and by so representing) Pacific Life's former (high-level) employees at their depositions, Pacific Life's counsel has violated Florida Rule of Professional Conduct Rule 4-7.4(a), which provides in pertinent part:

(a) Solicitation. Except as provided in subdivision (b) of this rule [which pertains to an attorney's unsolicited written communications to prospective clients], a lawyer shall not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship, in person or otherwise, when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. A lawyer shall not permit employees or agents of the lawyer to solicit on the lawyer's behalf. A lawyer shall not enter into an agreement for, charge, or collect a fee for professional employment obtained in violation of this rule. . . .

Florida Rule of Professional Conduct Rule 4-7.4(a) (footnote added). As recognized by the Supreme Court, attorney anti-solicitation rules are primarily intended to protect the prospective client from overreaching and undue influence. Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 464-65 (1978).

Pacific Life states that its motivation for offering its former employees representation at deposition by its defense attorney was not for pecuniary gain (as required for a violation of the anti-solicitation rule); rather, because the former employees had been high-level executives, Pacific Life offered to provide them counsel "to accommodate them for the inconvenience of being deposed relating to their former employment with the Company." Toretto Dec. at ¶ 4 (DE 139-1). Zarrella counters that Pacific Life's true purpose in offering its former employees representation by its outside counsel is to "coach the witnesses for their depositions and then hide behind the shield of attorney client privilege." Reply at 3 (DE 144). ***

Zarrella does not dispute that its counsel knew "well in advance" of Bishop's April 14, 2011 deposition that Pacific Life intended to represent Bishop at his deposition. Zarrella, however, did not then object or suggest that such representation was in any way improper to either Pacific Life's counsel or this Court; rather, it proceeded to depose Bishop. Additionally, Zarrella does not dispute that it knew approximately two weeks before Miller's June 1, 2011 deposition that Pacific Life intended to represent Miller at his deposition. Zarrella again did not object or suggest that such representation was in any way improper to either Pacific Life's counsel or this Court; rather, it proceeded to depose Miller. Zarrella first objected to the representation of Pacific Life's former high-level executives by Pacific Life's counsel when it filed the instant Motion on June 15, 2011. Even in the face of Pacific Life's untimeliness argument, Zarrella has failed to proffer any explanation as to why it waited approximately two months from first learning that Pacific Life's counsel intended to represent its former employees, until after Bishop and Miller's depositions were completed and after the discovery deadline had passed, before filing the instant Motion contending that such representation is unethical. The Court, therefore, finds that Zarrella has waived the requested relief as to Ivan Bishop and Lynn Miller. Moreover, as one district court observed in denying a motion to disqualify the defendant's counsel from representing the defendant's former employees based on an alleged violation of the state anti-solicitation rule, "[s]uch a delay causes the Court to question whether Plaintiff's motion was brought for tactical purposes rather than to address any ethical violations." Wells Fargo Bank, N.A. v. LaSalle Bank Nat'l Ass'n, No. CIV-08-1125-C, 2010 WL 1558554, at *2 (W.D. Okla. April 19, 2010).

The Court also declines to disqualify Pacific Life's counsel from representing Daragh O'Sullivan at his deposition because it does not find that Pacific Life's counsel (either its in-house attorney or its outside attorney) improperly solicited O'Sullivan. ***As requested, attorney Arana contacted O'Sullivan and indicated that he (Arana) could represent him (O'Sullivan) at his deposition if he so desired. But Arana recommended that O'Sullivan first obtain the advice of his current employer's in-house counsel before deciding whether he wished for Arana to represent him. Id. at ¶ 5. Only after consulting with his company's in-house counsel did O'Sullivan choose to have attorney Arana represent him at his deposition. Id. at ¶6. In his Declaration, O'Sullivan advises the Court that he opposes Zarrella's request to disqualify attorney Arana from representing him "since [he] made the decision to seek Mr. Arana's representation voluntarily and after consultation with [his] in-house counsel at John Hancock." Id. at ¶ 7. Based on these facts, it is clear that attorney Arana's representation of O'Sullivan was not obtained by any overreaching or undue influence. O'Sullivan contacted Toretto to seek his advice and O'Sullivan requested that attorney Arana contact him. Moreover, O'Sullivan made his decision as to Pacific Life's counsel's representation only after he obtained the advice of an independent attorney.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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