Dougherty, J. v. Pepper Hamilton
44 Media L. Rep. (BNA) 1506, 133 A. 3d 792, 2016 Pa. Super. 23 (2016)
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Rule of Law:
A law firm may breach its fiduciary duty to a former client by using information against that client that, while technically available in a public court record, is not 'generally known.' The mere fact that information is publicly available does not automatically permit an attorney to use it to the disadvantage of a former client.
Facts:
- In 2003, John J. Dougherty retained the law firm Pepper Hamilton to represent him in a federal matter involving a grand jury subpoena.
- During the representation, an FBI Affidavit was filed under seal to secure a search warrant for Dougherty's residence, and Pepper Hamilton was privy to confidential information about the matter.
- In January 2008, the FBI Affidavit was inadvertently and mistakenly attached to a public court filing in an unrelated criminal case involving a different person.
- In 2009, Dougherty sued the Philadelphia Inquirer for defamation.
- In 2011, Pepper Hamilton began representing the Inquirer in the defamation lawsuit brought by its former client, Dougherty.
- In December 2012, Pepper Hamilton, on behalf of the Inquirer, filed a motion for summary judgment and attached a copy of the FBI Affidavit concerning Dougherty as an exhibit.
- Two days later, the Inquirer published a front-page article with detailed references to the contents of the FBI Affidavit.
Procedural Posture:
- John J. Dougherty filed a civil complaint against Pepper Hamilton LLP and several of its attorneys in a Pennsylvania state trial court, alleging breach of fiduciary duty and breach of contract.
- Pepper Hamilton filed Preliminary Objections, which the trial court overruled.
- After discovery commenced, Pepper Hamilton filed a Motion for Summary Judgment.
- The trial court granted the Motion for Summary Judgment in favor of Pepper Hamilton.
- Dougherty, as the appellant, appealed the trial court's order granting summary judgment to the Superior Court of Pennsylvania.
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Issue:
Does the fact that information related to a former client's representation has become publicly available, though not generally known, preclude a claim for breach of fiduciary duty when the law firm uses that information against the former client?
Opinions:
Majority - Shogan, J.
No. A law firm is not shielded from a claim for breach of fiduciary duty simply because the information it used against a former client was publicly available; the critical inquiry is whether the information was 'generally known.' The court reasoned that the duty of loyalty and confidentiality an attorney owes to a former client is a core fiduciary obligation. Citing Pennsylvania Rule of Professional Conduct 1.9 and the Restatement (Third) of the Law Governing Lawyers § 59, the court distinguished between information that is merely 'publicly available' and information that is 'generally known.' Information is not 'generally known' if obtaining it requires special knowledge, substantial difficulty, or expense, such as knowing about an inadvertent filing in an unrelated case not indexed under the client's name. Because there was a genuine issue of material fact as to whether the FBI Affidavit was 'generally known,' summary judgment was improper, as a jury could find that Pepper Hamilton breached its duty by using this obscure information against Dougherty.
Analysis:
This decision clarifies the scope of a lawyer's continuing duty of confidentiality to a former client in the digital age. It establishes that the exception for publicly available information is narrow, formally adopting the 'generally known' standard from the Restatement into Pennsylvania common law. The ruling serves as a strong warning to law firms that they cannot exploit procedural mishaps or obscure public filings to weaponize information against former clients. This precedent strengthens client protections by ensuring the duty of loyalty survives the termination of representation in a meaningful way, preventing attorneys from using specialized knowledge gained during the representation to later harm that client.
