A Question Of Access

A decision issued today from the New Jersey Appellate Division

This interlocutory appeal involves a delicate and difficult conflict-of-interest issue that arose after plaintiffs’ attorney, who had filed and dismissed the underlying professional negligence action while at Weiner Lesniak, LLP, recommenced the action after joining Riker, Danzig, Scherer, Hyland & Perretti, LLP (“Riker”), the firm that had defended the Estate of Joel Shoobe, Esq. (“the Estate”) in the previous action. Meanwhile, the attorneys who had defended the Estate while at Riker had left Riker and joined a new firm, taking with them the Estate’s paper file but leaving electronically stored documents (“the electronic file” or the “electronic documents”), including a privileged memorandum outlining the defense. When Riker recommenced the action on behalf of plaintiffs, the Estate moved to disqualify Riker, asserting a conflict of interest.

The trial court granted the Estate’s motion. On leave granted, plaintiffs and Riker appealed. Having considered the parties’ arguments in light of applicable legal principles, and having further considered certain amendments to the Rules of Professional Conduct (“RPCs”) and related Official Comments that became effective after the trial court’s decision, we vacate the order disqualifying Riker, but do so conditionally, as will be discussed infra.

 The case involves allegations of CPA malpractice

Nineteen months after dismissing the action, on March 23, 2016, plaintiffs, through Loalbo, now at Riker, commenced the current action by filing a complaint, alleging essentially the same causes of action that had been alleged in the previous complaint. On April 11, 2016, Sylvester, now at Sherman Wells, contacted Riker concerning the conflict of interest. The next day, Riker established an internal “ethical wall” to prevent Loalbo and his staff from accessing the Estate’s electronic file stored in the firm’s electronic management database. Riker had until then taken no action to prevent the firm’s personnel from being able to access the Estate’s electronic files.

In addition to establishing the so-called ethical wall, the same day, April 12, 2016, a senior attorney at Riker, assisted by IT personnel, reviewed some part of the electronic file to determine, among other things, whether anyone at Riker had ever accessed any of the Estate’s electronic documents. The senior attorney determined from that review that no attorney, other than those who left Riker and joined Sherman Wells, had accessed the electronic documents.

The court

 Here, Sylvester and other lawyers terminated their association with Riker and continued to represent the Estate. Riker now represents plaintiffs. Under the conflicts standards expressed in RPC 1.10(b), Riker is not disqualified unless both subsections (1) and (2) apply. The parties do not dispute the applicability of subsection (1), namely, the previous and current actions are the same or substantially related, nor do they dispute the Estate’s electronic file contains protected material. Rather, they dispute the applicability of subsection (2), that is, whether, after Sylvester and the others left, “any lawyer remaining in the firm has [the] information” that is protected and material to the matter (emphasis added). Plaintiffs and Riker argue the phrase “has information” means “has actual knowledge”; the Estate argues the phrase “has information” means “has access to”; and, alternatively, once a Riker senior partner actually accessed the analysis, he “had information” within the meaning of RPC 1.10(b)(2)…

Here, the Riker senior attorney needed to access the Estate’s electronic file to determine whether any Riker attorney who remained after Sylvester left the firm had accessed the file, and possibly to determine from a review of the document titles whether any documents were protected. Reviewing anything more than the metadata concerning when the file was accessed, and perhaps a title to a document, would have unreasonably exceeded the need to determine the existence of a conflict. In such case, there would certainly be a doubt under RPC 1.10(b) as to the propriety of Riker’s continuing representation of plaintiffs, and that doubt would be resolved in favor of disqualification. Herbert, supra, 292 N.J. Super. at 438-39. That brings into focus Riker’s procedural non-compliance with Rule 1:6-6, which hinders our informed resolution of the access issue.

 Back to the trial court

Riker shall arrange to again access the Estate’s electronic file, within thirty days, but in the presence of Sylvester and Sylvester’s designated IT person, to determine whether anyone has accessed the file since Sylvester left Riker, other than the senior attorney who attempted to determine the existence of a conflict. The result of this joint exercise, if it confirms Riker’s representations, will presumably provide some assurance to the Estate that no Riker attorney has confidential information material to the substantive issues in the underlying litigation. If the protected information can be deleted, it should be deleted, unless for some reason Sylvester does not already have it. We expect the parties will agree as to what will be deleted, and urge them to do so. Absent agreement on deletion, the trial court shall resolve the issue.

 If this process reveals that the Riker senior attorney actually reviewed the substantive content of confidential information, such as the substantive content of the Analysis, then the matter shall be remanded to the trial court for the limited purpose of reinstating the disqualification order. On the other hand, if there remains a bona fide factual dispute about this issue, the matter shall be remanded to the trial court for the limited purpose of conducting a hearing, if necessary, and disposing of the dispute.

(Mike Frisch)