Logan v. Cooper Tire and Rubber Company
Filing
338
OPINION & ORDER: IT IS ORDERED that Cooper Tire's 300 SEALED MOTION to revoke pro hac vice admission for Kyle Wayne Farrar and Wesley Todd Ball and to disqualify Farrar & Ball LLP from further participation in this lawsuit is GRANTED. Signed by Judge Karl S. Forester on 8/9/2011.(GLD)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
CIVIL ACTION NO. 5:10-CV-3-KSF
KIM LOGAN, et al.
PLAINTIFF
and
KENTUCKY CABINET FOR
HEALTH & FAMILY SERVICES, et al.
vs.
INTERVENING PLAINTIFFS
OPINION AND ORDER
COOPER TIRE & RUBBER COMPANY
DEFENDANT
********
This matter is before the Court on the motion of Defendant Cooper Tire & Rubber Company
(“Cooper Tire”) to revoke the pro hac vice admission of plaintiff’s counsel, Farrar & Ball LLP, and
disqualify them from further participation in this lawsuit. The matter having been fully briefed by
the parties, it is ripe for consideration.
I.
BACKGROUND
Cooper Tire asks this Court to disqualify two of plaintiff’s counsel (“Logan’s counsel”)
because they wrote a July 19, 2011 letter to Steve Zamansky, Vice President, General Counsel
and Secretary of Cooper Tire, proposing a meeting to discuss settlement in seven cases against
Cooper Tire in six states, including this case. [DE 300]. The letter recommends that any meeting
not include Cooper Tire’s outside counsel in any of the listed cases. [DE 300-3].
In support of the motion to disqualify, Cooper Tire relies on Logan’s counsel’s pro hac vice
status, which required them to agree to be subject to the jurisdiction and rules of the Kentucky
Supreme Court governing professional conduct. [DE 33, 34]. It argues that the letter to Cooper
Tire’s General Counsel is a deliberate violation of Supreme Court Rule (“SCR”) 3.130(4.2). Rule
4.2 provides:
In representing a client, a lawyer shall not communicate about the subject of the
representation with a person the lawyer knows to be represented by another lawyer
in the matter, unless the lawyer has the consent of the other lawyer or is authorized
to do so by law or a court order.
Cooper Tire relies on Comment (7), which provides in part:
In a case of a represented organization, this Rule prohibits communications to a
constituent of the organization who supervises, directs or regularly consults with the
organization’s lawyer concerning the matter or has authority to obligate the
organization with respect to the matter....
Cooper Tire also relies on Shoney’s, Inc. v. Lewis, 875 S.W.2d 514 (Ky. 1994), in which counsel
was disqualified for initiating and meeting with the defendant’s managerial employees while
knowing that the defendant was represented by counsel.
Logan’s counsel does not dispute the factual basis for the motion. Instead, they respond
that several authorities have addressed the same issue and said that General Counsel do not fall
within the prohibition of Rule 4.2. [DE 324]. Logan’s counsel argue the primary purpose of the Rule
is to protect lay parties from overreaching by a person with superior legal knowledge and to prevent
inadvertent disclosure of privileged information by the layperson. Id. at 6. Additionally, Logan’s
counsel argue that the communication did not involve the subject matter of the litigation and,
therefore, is outside the prohibition of Rule 4.2.
Cooper Tire replies that there is no exception for general counsel stated in Kentucky’s Rule
4.2 or the Comments adopted in 2009. [DE 331]. Moreover, it argues that Mr. Zamansky is more
than simply in-house counsel; he is part of Cooper Tire’s executive leadership team. Id. at 2.
Cooper Tire also distinguishes Logan’s case of In re: Grievance Proceeding, 2002 WL 31106389
(D. C. Conn. 2002), because outside counsel was not responding to plaintiff’s requests and
because the commentary relied upon in that case is no longer applicable in Kentucky.
II.
ANALYSIS
Logan’s counsel is subject to the Kentucky Rules of Professional conduct and the judicial
decisions interpreting those rules.
Umphenour v. Mathias, 2008 WL 2785609 at *2 (E.D. Ky.
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7/16/2008). A district court has inherent authority to disqualify an attorney as a sanction for
professional unethical conduct. Id. However, “motions to disqualify ‘should be viewed with extreme
caution for they can be misused as techniques of harassment.’” Republic Services, Inc. v. Liberty
Mutual Ins. Co., 2006 WL 3004014 at *4 (E.D. Ky. 10/20/2006) (quoting Freeman v. Chicago
Musical Instrument Co, 689 F.2d 715, 722 (7th Cir. 1982)). The court must balance the interests
of the public in the proper safeguarding of the judicial process together with the interests of each
party to the litigation. General Mill Supply Co. v. SCA Services, Inc., 697 F.2d 704, 715 (6th Cir.
1982).
Kentucky courts have not addressed the specific issue raised by Cooper’s motion, although
Rule 4.2 has been addressed in other factual contexts. In Shoney’s, Inc. v. Lewis, 875 S.W.2d 514
(Ky. 1994), counsel for a sexual harassment plaintiff was told who would be representing the
defendant Lee’s and he talked with Lee’s counsel. Subsequently, plaintiff’s counsel “met with and
procured sworn statements from two of Lee’s employees, a general manager and a relief manager,
without consent from or notice to Lee’s counsel.” Id. at 514-5. Plaintiff’s counsel admitted that the
statements were about the subject of the representation. Id. at 515. Lee’s promptly moved to
disqualify plaintiff’s counsel and to suppress the statements. The court affirmed the disqualification
and suppression of the evidence.
The Shoney’s court relied on Comment 2 to Rule 4.2, which said in part:
In the case of an organization, this Rule prohibits communications by a lawyer for
one party concerning the matter in representation with persons having a managerial
responsibility on behalf of the organization....
Id. It also relied on Canon 9 of the Canons of Professional Ethics, which said: “A lawyer should not
in any way communicate upon the subject of controversy with a party represented by counsel, but
should deal only with his counsel.” The court noted that “Canon 9 is to be construed literally and
does not allow a communication with an opposing party, without the consent of his counsel, though
his purpose be merely to investigate the facts.” Id. at 516. It also relied on Kentucky Bar
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Association (“KBA”) Ethics Opinion E-65 which noted that the “materiality or the immateriality of the
information which the attorney might obtain from the adverse party in a statement would have no
bearing on the question of ethics involved.” KBA E-65, p. 2.
A similar KBA Ethics Opinion considering the same prohibition on communicating with a
represented person is E-95. There, the attorney representing a personal injury plaintiff proposed
to send a demand letter to defendant’s attorney and also to send a copy to defendant’s insurance
company. The Opinion stated that it would be an ethics violation to send the copy to the insurance
carrier. It noted, “the only purpose of sending a copy to the carrier would be to bypass defendant’s
attorney in relating directly to the company plaintiff’s demand.”
In 2009, the Supreme Court of Kentucky amended Rule 4.2 (and others) to adopt official
commentary. Comment (1) to Rule 4.2 provides:
This Rule contributes to the proper functioning of the legal system by protecting a
person who has chosen to be represented by a lawyer in a matter against possible
overreaching by other lawyers who are participating in the matter, interference by
those lawyers with the client-lawyer relationship and the uncounseled disclosure of
information relating to the representation.
SCR 3.130(4.2) Comment 1. Comment 7 states in part: “In the case of a represented organization,
this Rule prohibits communications to a constituent of the organization who supervises, directs or
regularly consults with the organization’s lawyer concerning the matter or has authority to obligate
the organization with respect to the matter....” SCR 3.130(4.2) Comment (7). Plaintiff does not
dispute that Mr. Zamansky supervises, directs and regularly consults with outside counsel
concerning the matter and has authority to obligate the organization with respect to the matter.
Accordingly, the communication is prohibited under the plain language of SCR 3.130(4.2).
Plaintiff’s argument that Rule 4.2 does not apply to communications with lawyers and is
simply to protect lay persons from overreaching by lawyers creates an exception that would
swallow the Rule. Many corporate executives today are lawyers. Is it permissible to discuss a case
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with the president of a company simply because he or she had legal training in the past? Surely,
that is not authorized. Nothing in SCR 3.130(4.2) supports such an exception.
Logan’s counsel argues that the communication “sought nothing more than to continue to
mend a broken relationship and to help cooler heads prevail.” [DE 324, p. 3]. They argue this is
not a communication “about the subject of the representation.” In support, they cite American
Centennial Ins. Co. v. Handal, 901 F. Supp. 892 (D. N.J. 1995), where the court describes the
communication as “with regard only to acceptance of service, and had no bearing to the subject
matter of the action.” Id. at 900. While the July 19, 2011 letter from Logan’s counsel did not
mention specifics about Logan’s case, it expressly solicited an ex parte meeting for the very
purpose of discussing the subject of the representation. “I believe that if we discussed settlement
of the cases we would find that our evaluations on many, if not all, of the cases are very similar.”
[DE 300-3]. It is impossible to discuss evaluations and settlement without discussing the “subject
of the representation.”
When considering a motion to disqualify counsel, “courts must be sensitive to the competing
public interests of requiring professional conduct by an attorney and of permitting a party to retain
counsel of his choice.” Carlsen v. Thomas, 159 F.R.D. 661, 664 (E.D. Ky. 1994). See also Pioneer
Resources Corp. v. Nami Resources Co., LLC, 2006 WL 1464785 at *4 (E.D. Ky. 5/22/2006). The
right to counsel of one’s choice is not absolute, but it is an important right. United States v.
Krzyske, 836 F.2d 1013, 1017 (6th Cir. 1988).
In this case, Logan has had co-counsel, Bruce R. Kaster and Skip Edward Lynch of Ocala,
Florida, actively involved since October 2010. [DE 51]. Co-counsel R. Frank Melton and C. Richard
Newsome of Orlando, Florida, have been involved since February 2010. [DE 11]. Fred Peters has
also been involved as local counsel since June 2010. [DE 40]. While the trial of this case is very
close at hand, disqualification of Farrar and Ball will not leave Plaintiff without counsel of her
choice. She will have five of her attorneys of choice still representing her.
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The countervailing consideration here is the public interest in requiring professional conduct
by an attorney. While defense counsel are not without sin, much of the acrimony in this case is
attributable to counsel Ball and Farrar. As Magistrate Judge Wier noted in his recent opinion
denying Plaintiff’s motion for sanctions against Cooper Tire, the case is “filled with metaphorical
bomb-throwing.” [DE 334, p. 2]. In response to a recent settlement offer that is not insubstantial
under the facts, plaintiff’s counsel Wesley Ball found “no good-faith intentions” and said:
Therefore, I and my co-counsel will not respond to any further offers which you
extend personally. I have neither the time nor inclination to deal with your
antagonistic communications, written or otherwise. Should Cooper wish to engage
in meaningful negotiations through other counsel of its choice I will gladly
reciprocate. Consider this my last correspondence to you regarding the settlement
of this matter.
[DE 300-5]. Less than two weeks later, Mr. Farrar made the ex parte contact with Mr. Zamansky
to discuss settlement. As in KBA E-95, the only purpose of such improper contact would be to
bypass defendant’s attorney in relating plaintiff’s demand directly to the company.
The intervening plaintiffs in this case, University of Kentucky Medical Services Foundation,
Inc. and Medicaid, are simply attempting to recover medical expenses they incurred relating to
Plaintiff’s injuries. Despite their intervention in March 2010, Logan’s counsel this month would not
enter into a stipulation with the intervening plaintiffs for the amount of medical expenses. [DE 319].
A cursory review of the docket totaling 335 entries through August 8, 2011, reveals many instances
in which intervention by the court was necessary to resolve minor discovery disputes and the like.
These examples do not involve unethical conduct, but they do reflect the lack of professionalism
exhibited by Logan’s counsel.
Finally, there appears to be a history of Logan’s counsel violating court protective orders
in other cases. In Bradley v. Cooper Tire & Rubber Co., No. 4:03cv94 (S.D. Miss.), Bruce Kaster
was found to possess Cooper Tire’s confidential documents subject to a protective order after
certifying that he had returned all documents. [DE 1967-1, p. 7]. The record reflects that the
documents were provided to Mr. Kaster by Kyle Farrar, who was not counsel in the Bradley case.
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[DE 197-2, p. 6]. Mr. Farrar, at first, insisted the documents were obtained by “my assistant from
the Court file” and were not in the sealed portion of the file. [Id. at 9]. The court held that all of the
documents were clearly stamped “CONFIDENTIAL SUBJECT TO PROTECTIVE ORDER” and
were marked with Bradley bates’ numbers. The court granted Cooper Tire’s request for discovery
regarding the source of the documents. [Id. at 10-22]. Thereafter, Mr. Farrar said that the person
who obtained the documents was not his “assistant,” that he did not know when the documents
were obtained, and that he had lost the receipt for the copies. [Id. at 26-27].
In Johnson v. Hankook Tire Mfg. Co., No. 10-422 (S.D. Texas), the court found that Wesley
Ball failed to return confidential information produced pursuant to a protective order after he had
represented that he was going to deposit the documents with the court. [DE 19704]. In court later,
he testified that the documents were destroyed, but no one could remember doing it. With respect
to Ball’s earlier representations, the court said: “You weren’t vague. You are just now saying it
doesn’t mean what it clearly means.” [Id. at 16]. Later, the court said: “I don’t think sloppiness can
count for all the inconsistencies.” [Id. at 37]. It concluded: “And Hankook has my permission to
disclose in other confidential information discussions that I don’t believe Mr. Ball should be confided
with information that is proprietary. Its preservation and its return will be unknowable.” [Id. at 50].
In Toe v. Cooper Tire, No. LACL106914 (Iowa District Court for Polk County), the court
admonished both Farrar and Ball for distributing a trial deposition transcript when they “knew or
should have known” that the information was confidential. [DE 197-7, p. 3]. Finally, in the present
case, Mr. Ball filed in the open record documents that were subject to a protective order in the case
of Pierson v. Cooper Tire, Case No. CV 2006-007392, Superior Court of Maricopa County, Arizona.
After months of denying the documents were confidential, he finally admitted that he was wrong
and that the confidential documents were improperly filed in the public record. [DE 197, Exs. H, I].
The documents referenced above are part of a motion to maintain confidentiality. [DE 197].
Logan’s counsel’s response to the motion does not disagree with any of the facts set forth in the
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motion. Instead, it pounds on the First and Sixth Amendment rights to public trial and claims
Cooper “seeks to close the courthouse and try this case in secret.” [DE 249]. This Opinion should
not be taken as any ruling on the motion to maintain confidentiality. Instead, the Court is merely
demonstrating a continuing pattern of unprofessional conduct by Ball and Farrar. The letter to Mr.
Zamansky, after refusing to discuss settlement in this case with outside counsel, is the last straw.
In this case, the public interest of requiring professional conduct by an attorney outweighs the
Plaintiff’s interest in having all seven of her counsel of choice participate in the trial.
The facts surrounding the letter to Mr. Zamansky and the facts regarding the violations of
protective orders have not been disputed, despite opportunities for Ball and Farrar to brief the
issues. The only issue before the Court is a question of law regarding disqualification. No one has
asked for a hearing on the legal question. It is the Opinion of this Court that Cooper Tire has met
the requirements for disqualification of counsel Ball and Farrar.
III.
CONCLUSION
IT IS ORDERED that Cooper Tire’s motion to revoke pro hac vice admission for Kyle
Wayne Farrar and Wesley Todd Ball and to disqualify Farrar & Ball LLP from further participation
in this lawsuit [DE 300] is GRANTED.
This August 9, 2011.
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