Adler, Barish, Daniels, Levin & Creskoff v. Epstein
393 A.2d 1175, 1 A.L.R. 4th 1144, 482 Pa. 416 (1978)
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Rule of Law:
An attorney's systematic solicitation of his former firm's clients, for whom the attorney handled active cases, constitutes an improper and tortious interference with the firm's contractual relationships, and an injunction preventing such contact is a constitutionally permissible regulation of commercial speech.
Facts:
- Alan Epstein and other appellees were salaried associate attorneys at the law firm of Adler, Barish, Daniels, Levin and Creskoff (Adler Barish).
- While still employed at Adler Barish, the appellees decided to form their own law firm, retaining counsel and signing an office lease.
- To secure a $150,000 bank line of credit for their new firm, the appellees provided the bank with a list of 88 active cases they were working on for Adler Barish, with anticipated fees exceeding $500,000.
- Upon terminating his employment with Adler Barish, Epstein began directly contacting the firm's clients whose active cases he had handled.
- Epstein advised these clients that he was leaving the firm and that they could choose to be represented by him, Adler Barish, or another attorney.
- Epstein mailed form letters to these clients which, if signed, would discharge Adler Barish, hire his new firm, and establish a new contingent fee agreement; he also included stamped envelopes for returning the forms to him.
- The other appellees were aware of Epstein's actions and engaged in similar client solicitation upon their own departures from Adler Barish.
Procedural Posture:
- Adler, Barish, Daniels, Levin and Creskoff (Adler Barish) sued its former associates in the Court of Common Pleas of Philadelphia, a trial court, seeking an injunction.
- The trial court entered a final decree granting a permanent injunction against the associates, finding they had tortiously interfered with Adler Barish's contractual relations.
- The associates, as appellants, appealed this decision to the Superior Court of Pennsylvania, an intermediate appellate court.
- A divided panel of the Superior Court reversed the trial court, dissolving the injunction and dismissing Adler Barish's complaint.
- Adler Barish, as appellant, then appealed to the Supreme Court of Pennsylvania, the state's highest court, which granted the appeal.
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Issue:
Does an associate attorney's systematic solicitation of his former law firm's clients, using information and contacts gained during his employment on those clients' active cases, constitute an improper interference with the firm's contractual relations that may be enjoined by a court?
Opinions:
Majority - Roberts, Justice.
Yes, such systematic solicitation constitutes an improper interference with the firm's contractual relations. The court held that the appellees' conduct was not protected commercial speech under the First Amendment. Citing Ohralik v. Ohio State Bar Association, the court reasoned that this form of direct solicitation posed a great risk of overreaching and undue influence on clients, whose informed decision-making was frustrated, distinguishing it from general advertising protected by Bates v. State Bar of Arizona. The court adopted the standard from the Restatement (Second) of Torts § 766, which holds that one who 'intentionally and improperly interferes' with a contract is liable for tortious interference. The conduct was deemed 'improper' because it violated ethical rules against self-recommendation (DR 2-103(A)), took advantage of a confidential relationship built while the appellees were fiduciaries of Adler Barish, and exploited confidential information for personal gain.
Dissenting - Manderino, Justice,
No, the conduct was a form of protected speech that should not have been enjoined. The majority misapplies the precedent of Ohralik v. Ohio State Bar Association, which condemned coercive in-person solicitation, not written communication. The appellees used mailings that contained no false information, allowed clients ample time for reflection, and did not pressure them for an immediate decision. The injunction wrongly prohibits attorneys from truthfully informing clients of their legal rights and options regarding representation. The communications were a protected form of direct solicitation under the First Amendment, and the Superior Court's decision to dissolve the injunction should have been affirmed.
Analysis:
This decision clarifies the line between permissible competition and tortious interference in the context of departing law firm associates. It establishes that while associates are free to compete after leaving, they cannot use their fiduciary position and confidential client information to actively solicit the firm's existing clients with pending cases. The court's adoption of the 'improper' standard from the Restatement (Second) of Torts § 766, and its balancing of commercial speech rights against the state's interest in regulating the legal profession, provides a key framework for future disputes. The ruling emphasizes the primacy of professional ethics and fiduciary duties over purely commercial interests in the legal field.
