When a court orders disqualification, the court obviously has authority to enjoin the attorney or law firm from appearing before the court on behalf of a party.  It is also fairly uncontroversial that the court’s authority extends to so-called ancillary proceedings, such as depositions, in the same matter (even if the judge is not physically present).  But does this disqualification authority extend to bar the lawyer from, for example, counseling (but not appearing for) the client?  And can it bar the lawyer from appearing for the client in a related matter before a different tribunal?  These questions can be difficult to answer, in part because proof of the disqualified attorney’s continuing-but-behind-the-scenes advice is difficult to obtain and because courts take differing views over the extent of their authority, as discussed below.

In a recent North Carolina business matter, after the court disqualified a law firm whose deceased partner had advised the defendant in a substantially related matter, the court later clarified that its order also disqualified the firm from acting as “outside general counsel” to the plaintiff in the matter and as litigation counsel to a co-defendant (because the co-defendant was closely aligned with the formerly represented defendant and acting adversely to the co-defendant would effectively be acting adversely to the defendant).  The court cited several in- and out-of-state cases in support of disqualifying attorneys who continue to play a “behind-the-scenes” or other role in the litigation.[1]  The original opinion disqualifying the law firm is available here: Kingsdown, Inc. v. Hinshaw et al. (N.C. Sup. Ct. March 25, 2015), and a National Law Review article on the original disqualification is available here (“Dead Partner and Disqualification”).  The opinion clarifying and extending the disqualification order is available here: Kingsdown, Inc. v. Hinshaw et al. (N.C. Sup. Ct. April 22, 2015), and commentary on the decision is available here (“NC Business Court: What Part of Disqualification Do You Not Understand”).

The same month, however, a federal court in Arizona arguably, but perhaps understandably, took a narrower view of its authority.  There, the court had earlier disqualified a law firm because its new partner had previously represented the adverse party in a substantially related matter.[2]   After winnowing down the remaining issues, the court concluded that the heart of the dispute was whether the disqualified firm could continue to represent the party before the state department of environmental quality (ADEQ) in a related matter.  The court refused to enjoin the representation: “ADEQ is an independent administrative agency of the State of Arizona. It is neither a party nor has any involvement in the matter before this Court. Additionally, well-established principles of comity and Federalism instruct this Court to refrain from overreaching.”  The court thus refused to disqualify the firm before ADEQ. To the extent that, contrary to the court’s original order, the law firm was still advising the party with respect to the litigation before the district court, “the proper mechanism then would be a formal Order to Show Cause, thereby providing [the law firm] the ‘opportunity to present evidence and to cross-examine its accusers. . . .’ Alternatively, Moving Defendants could institute disciplinary proceedings against [the law firm], or file a breach of contract claim against” the law firm for a breach of duties owed to its former client.  Here, however, the court concluded that the law firm was not working behind the scenes in the litigation and therefore distinguished Rella v. N. Atl. Marine, Ltd, 2004 WL 2480409 (S.D.N.Y. 2004), which “sanctioned attorneys who were working behind the scenes ‘with another attorney who takes on the public face of the representation.'”  The court’s opinion is available here: Roosevelt Irrigation Dist. v. Salt River Project Agric. Improvement & Power Dist. (D. Ariz. April 23, 2015).

[1]           The court cited the following cases:

Byrd v. Hopson, 108 F. Appx. 749, 754, n.1 (4th Cir., Aug. 9, 2004) (district court properly “insulated” disqualified attorney from further involvement in case where attorney “was attempting to continue representing [the client] despite the earlier disqualification order”) (unpublished); First Wisc. Mortg. Trust. v. First Wisc. Corp., 584 F.2d 201, 207 (7th Cir. 1978) (observing that “disqualified attorney, once disqualified, should not act by way of consultation or advice outside the court to the former client, a result of disqualification which would seem logically to follow and which would not seem to be arguable”); Quark, Inc. v. Power Up Software Corp., 812 F. Supp. 178, 180 (D. Colo. 1992) (disqualifying a litigant’s “longstanding counsel” and ordering that “no member of the [firm] may work on this litigation ‘behind the scenes’ and that no work-product may be turned over to successor counsel”); . . . Williams v. Williams, 746 S.E.2d 319, 323 n.3 ([N.C. Ct. App.] 2013) (noting trial court’s “inherent authority” to disqualify attorneys “[even in] matters which are not pending in the particular court exercising the authority”) (quotation and citation omitted); see also Swenson v. Thibaut, 39 N.C. App. 77, 109, 250 S.E.2d 279, 299, (1978) (noting that “the court’s inherent power is not limited or bound by the technical precepts contained in the Code of Professional Responsibility”).

[2]           See Roosevelt Irrigation District v. Salt River Project Agricultural Improvement & Power District, 810 F. Supp. 2d 929, 948 (D. Ariz. 2011).