In Re Carey
89 S.W.3d 477, 2002 Mo. LEXIS 106, 2002 WL 31655336 (2002)
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Rule of Law:
An attorney engages in professional misconduct by representing a client in a matter that is "substantially related" to the representation of a former client, where the relationship is determined by the overlap in facts, legal issues, and strategic knowledge gained. Knowingly providing false discovery responses and withholding material information in a subsequent lawsuit constitutes separate, severe professional misconduct.
Facts:
- Attorneys John Carey and Joseph Danis, while at the law firm Thompson & Mitchell, were part of a team that defended Chrysler Corporation in product liability and consumer class action cases.
- During their representation of Chrysler, Carey and Danis became privy to Chrysler's confidential litigation strategies, internal analyses, witness strengths and weaknesses, and a strategic 'blueprint' for defending class action suits involving its minivans.
- The specific cases they worked on for Chrysler involved minivan door latches and heater coils.
- In January 1995, Carey and Danis left their firm to start Carey & Danis, L.L.C.
- In August 1995, Carey & Danis were approached by a client with problems concerning the anti-lock brake system (ABS) on his Chrysler minivan.
- Carey & Danis initially arranged for another firm to file a class action suit against Chrysler regarding the ABS issue but remained involved by participating in strategy meetings and providing advice.
- Carey & Danis later formally entered their appearance as counsel for the plaintiffs in the class action suit against their former client, Chrysler, without seeking or obtaining Chrysler's consent.
- After withdrawing from the case under pressure, Joseph Danis sent a letter (the 'Grossman letter') to another attorney discussing the consolidation of class actions against Chrysler and proposing an attorney's fee allocation.
Procedural Posture:
- Chrysler Corporation sued its former attorneys, Carey and Danis, in the U.S. District Court for the Eastern District of Missouri for breach of fiduciary duty.
- During discovery in the federal lawsuit, Chrysler moved for sanctions, alleging Carey and Danis had provided false and misleading sworn answers and had failed to produce responsive documents.
- The federal district court found that Carey and Danis engaged in egregious discovery abuse, struck their answer as a sanction, and entered a default judgment against them for $850,000.
- Carey and Danis appealed the federal district court's judgment to the U.S. Court of Appeals for the Eighth Circuit, which affirmed the lower court's decision.
- Following the federal proceedings, the Chief Disciplinary Counsel of Missouri filed an information with the Supreme Court of Missouri, initiating a disciplinary proceeding against Carey and Danis.
- A Disciplinary Hearing Panel heard the case and issued advisory findings, conclusions, and recommendations to the Missouri Supreme Court.
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Issue:
Do attorneys commit professional misconduct when they represent plaintiffs in a product liability class action against a former corporate client in a matter deemed 'substantially related' to their prior defensive work, and subsequently provide false and misleading sworn answers during discovery in a lawsuit brought against them by that former client?
Opinions:
Majority - William Ray Price, Jr.
Yes, the attorneys committed professional misconduct. Representing plaintiffs in the ABS class action against Chrysler violated Rule 4-1.9(a) because the matter was 'substantially related' to their prior work defending Chrysler, and their subsequent false and misleading discovery responses in the lawsuit filed by Chrysler were a separate violation of their duties of candor and honesty. The court found that despite the different component parts (brakes vs. latches), the new representation was substantially related because it involved the same client (Chrysler), the same type of litigation (product liability class action), the same vehicle model (minivan), and allowed the attorneys to use the confidential strategic knowledge they had gained at Chrysler's expense. The court determined that this constituted an impermissible 'changing of sides.' Furthermore, the court held that Carey and Danis knowingly and intentionally provided false answers to interrogatories and withheld numerous documents, including the critical 'Grossman letter,' during the breach of fiduciary duty lawsuit Chrysler filed against them. The court rejected their excuses of inadvertence and attempts to blame their own counsel, finding their conduct to be an 'egregious abuse' of the discovery process and an affront to the principle of candor toward the tribunal.
Dissenting - Richard B. Teitelman
Although the attorneys' conduct violated the rules of professional conduct, the appropriate discipline is a public reprimand, not suspension. The purpose of disciplinary actions is remedial, not punitive. Several mitigating factors support a lesser sanction: neither attorney had prior disciplinary actions, the Chief Disciplinary Counsel conceded they were unlikely to repeat the misconduct, they have already satisfied a substantial civil judgment of $850,000 for their actions, and both have records of community and pro bono service. Suspending their licenses years after the conduct is unduly punitive when they no longer pose a threat to the public or the integrity of the profession.
Analysis:
This case provides a crucial interpretation of the 'substantially related' test for former-client conflicts of interest, establishing that strategic and procedural knowledge gained from a prior representation can create a conflict even when the specific factual subject matter differs. It solidifies the principle that an attorney's duty of loyalty prevents them from 'switching sides' where they can exploit a former client's litigation playbook. The decision also serves as a stark warning about the severity of discovery abuse, affirming that attorneys, even when they are litigants themselves, are held to the highest standard of candor. The court's use of collateral estoppel based on a federal court's discovery sanction finding demonstrates how misconduct in civil litigation can have direct and severe consequences in a state disciplinary proceeding.
