The District Court of the Virgin Islands recently addressed, albeit briefly, the dueling standards as to whether screening incoming lateral lawyers will avoid the imputation of their conflicts of interest to the new firm.  The district court’s local rules (like many others) adopt verbatim the ABA Model Rules of Professional Conduct as the rules governing attorneys before the court.  A few years ago, the ABA changed positions and agreed that screening will indeed avoid imputation of lateral lawyers’ conflicts.  Notwithstanding the ABA’s decision to embrace screening for lateral moves, the jurisdictions are split.  Indeed, the majority of state jurisdictions still embrace no such screening or embrace it only in more limited situations.  (As examples of these limited situations, the Restatement permits screening to avoid imputation only if “any confidential client information communicated to the personally prohibited lawyer is unlikely to be significant in the subsequent matter,” an approach Minnesota and North Dakota essentially follow,[1] and many states permit screening only if the personally disqualified lawyer did not have “primary responsibility for” or a “substantial role in” the matter while at the previous firm.[2])

Here, the plaintiff filed a motion to disqualify the opposing firm (i.e., the plaintiff’s former lawyer’s new firm), using two main arguments: (1) that the superior court of the Virgin Islands (which applies the Virgin Islands Rules of Professional Conduct, not the Model Rules) had earlier disqualified the same firm in another matter despite the firm’s screening; and (2) even if screening could avoid imputation in the district court, the Model Rules require notice of the screening to be sent “promptly” to the lawyer’s former client, and the firm failed to send that notice until more than two weeks after the lawyer had joined the firm.  After finding that the firm had timely and adequately screened the incoming lawyer before he began employment at the new firm, the district court noted that its ethical rules (i.e., the Model Rules) do not call for imputation of the lawyer’s conflict to the members of the new firm.  The Virgin Islands “Supreme Court Rule 211.1.10 – in contrast to MRPC 1.10—does not contain a provision for screening a lawyer who transfers from one firm to another.”  The court also rejected plaintiff’s second argument without much analysis; the court simply “conclude[d] that the notification and certification letter was timely under the circumstances” and denied the motion.

The full opinion is available here: Denero v. Palm Horizons Mgmt., Inc., No. CV 2013-73, 2015 WL 1004672 (D.V.I. Mar. 4, 2015).

 

[1]         See Minn. Rules of Prof’l Conduct R. 1.10(b)(1); N.D. Rules of Prof’l Conduct R. 1.10(b)(1)-(2); Restatement (Third) of Law Governing Lawyers § 124(2)(a) (2000).

[2]        See, e.g., Ind. Rules of Prof’l Conduct R. 1.10(c)(1) (permitting screening only if “the personally disqualified lawyer did not have primary responsibility for the matter that causes the disqualification under Rule 1.9”); Mass. Rules of Prof’l Conduct R. 1.10(d)(2).