Steel v. General Motors Corp.

Majority - Kugler, United States Magistrate Judge

Yes, New Jersey's Rules of Professional Conduct require the disqualification of Kimmel & Silverman because attorney Jay M. London's prior representation of General Motors (GM) in substantially related lemon law matters creates an impermissible conflict of interest and appearance of impropriety, and New Jersey law does not recognize the effectiveness of an "ethics screen" in such private practice contexts. The court applied New Jersey's RPC, noting that local rules mandate strict compliance and resolve doubt in favor of disqualification. It found that the cases were "substantially related" under RPC 1.9(a)(1), interpreting the test from Reardon v. Marlayne, Inc. to mean that a substantial relationship exists when "the adversity between the interests of the attorney’s former and present clients has created a climate for disclosure of relevant confidential information" and where the issues are "practically the same." London's five years of extensive involvement with GM's legal and settlement strategies, despite varying factual details of individual vehicle defects, established this climate for potential disclosure. Furthermore, the court concluded that Mr. London would be disqualified under RPC 1.9(a)(2) for possessing and potentially using "information relating to the representation" to GM's disadvantage that is not "generally known." While general lemon law strategies might be public, specific knowledge of GM’s internal decision-making processes, personnel personalities, negotiating techniques, and claims handling procedures is protected. An "appearance of impropriety" also mandated disqualification under RPC 1.9(b) and RPC 1.7(c). The court stressed that New Jersey strictly adheres to this doctrine to bolster public confidence in the legal profession. London's extensive past representation of GM, coupled with his new employment at a firm primarily suing GM (and from whose revenues his salary is drawn), creates a strong public perception of knowledge of GM confidences, regardless of actual disclosure. Critically, the court rejected Kimmel & Silverman's reliance on their ethics screen. It found that New Jersey law, particularly RPC 1.10 (imputed disqualification), does not recognize such screening mechanisms for private attorneys in this context. The court distinguished this from RPC 1.11, which permits screens for former government attorneys, and from Opinion 525 on asbestos litigation, highlighting that lemon law cases lack the unique, pervasive characteristics justifying screens in those specific, limited contexts. Balancing the competing interests, the court determined that the public interest in maintaining the highest ethical standards outweighed the clients' right to chosen counsel, especially since lemon law cases are not overly complex and alternative representation is available. Thus, Mr. London's disqualification was imputed to the entire firm of Kimmel & Silverman.