Fundamental Administrative Services, LLC v. Anderson

Filing 41

MEMORANDUM AND PRELIMINARY INJUNCTION. Signed by Judge James K. Bredar on 10/9/2013. (aos, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
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FUNDAMENTAL ADMIN. SERVS., LLC,

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Plaintiff

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v.

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KRISTI ANDERSON,

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Defendant
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CIVIL NO. JKB-13-1708

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MEMORANDUM AND PRELIMINARY INJUNCTION
Pending before the Court is a motion filed by Plaintiff Fundamental Administrative
Services (“FAS”) entitled Emergency Motion for Temporary Restraining Order and Preliminary
Injunction and Sanctions against Kristi Anderson, Steven N. Leitess and Leitess Friedberg PC.
(ECF No. 28.)

This Court earlier granted this motion in part by entering a Temporary

Restraining Order (“TRO”), the second of two entered in this case. (TRO, 9/27/2013, ECF
No. 32.) Pursuant to this Court’s authority under Federal Rule of Civil Procedure 65, and as
necessary in aid of its jurisdiction, see 28 U.S.C. § 2283, the Court will grant in part Plaintiff’s
motion and enter this Preliminary Injunction.
The Court incorporates its earlier opinions and does not repeat the facts here except as
necessary to explain its ruling. In earlier orders, this Court granted in part FAS’s first request for
a TRO to prevent Defendant Anderson from violating her ethical and contractual obligations to
FAS (ECF No. 5), dissolved the TRO after further proceedings (ECF No. 13), and denied
Anderson’s motions for sanctions against FAS and its attorneys (ECF Nos. 13, 24). As has been
noted, these orders were all against the backdrop of Anderson’s and FAS’s participation in

bankruptcy and related adversary proceedings that involve many different and sometimes related
parties in other courts. The Court ruled that any issues regarding Anderson’s conduct in relation
to privilege and confidentiality concerns of FAS were to be resolved by the bankruptcy judge.
(Mem. & Order, 6/24/2013, ECF No. 13.)

In its most recent TRO, the Court found that

Anderson had unnecessarily included apparently privileged and confidential communications in
a Maryland state court complaint in which Anderson sought redress for harm allegedly caused to
her in connection with FAS’s termination of her employment as its former general counsel.
(TRO, 9/27/2013.) Thus, a TRO was justified to prevent Anderson from violating her ethical
and professional obligations to her former client.
On October 9, 2013, this Court conducted a hearing and heard arguments from both sides
on the question of whether to order preliminary injunctive relief. In Winter v. Natural Resources
Defense Council, Inc., 555 U.S. 7 (2008), the Supreme Court set forth the following standard for
preliminary injunctive relief:
A plaintiff seeking a preliminary injunction must establish that he is likely
to succeed on the merits, that he is likely to suffer irreparable harm in the absence
of preliminary relief, that the balance of equities tips in his favor, and that an
injunction is in the public interest.
Id. at 20. Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear
showing that the plaintiff is entitled to such relief.” Id. at 22. Courts are called upon to balance
a plaintiff’s claims of injury against the burdens to be imposed upon the defendant, and they
must “pay particular regard for the public consequences in employing the extraordinary remedy
of injunction.” Id. at 24.
The Court’s prior analysis in its September 27th order is still valid. Applying the Winter
standard to these circumstances, the Court finds that Plaintiff has met the standard. FAS is likely
to succeed on the merits of the issue of whether Anderson can reveal without permission from
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FAS that entity’s privileged and confidential information. Further, FAS is likely to suffer
irreparable harm in the absence of preliminary relief, and the balance of equities tips in its favor.
It is unquestionable that an injunction is in the public interest given the important purpose,
deeply ingrained in our society and our system of justice, of requiring an attorney to protect a
client’s confidences.
As before, the Court intends to provide appropriate protection to FAS while leaving
Anderson free to conduct her state court litigation without unreasonable restraints. It is also the
Court’s intent to be the arbiter of the question of FAS’s privileges and confidences only in
relation to the lawsuit now before it; to the extent another court has competent jurisdiction to
entertain such questions in the context of other proceedings, then this Court will not intrude upon
another court’s determination of matters properly before it. Thus, the order being entered is
calculated to respect other courts’ jurisdiction while protecting the jurisdiction of this Court to
decide the case and issues that are properly before it. Furthermore, in ruling on September 27th
that Anderson was to withdraw her original state court complaint, the Court specifically provided
that Anderson’s “right to file a suitably redacted/amended complaint that does not reveal FAS’s
privileged or confidential information but still provides the minimum basis for her claims for
relief under Maryland law” was without limitation.

In so ruling, the Court had and has no

intention to create any difficulty for her with regard to statutes of limitation, and the Court was
assured by both parties’ counsel in the October 9th hearing that an amended pleading based upon
the same nexus of facts as the original pleading relates back to the time of filing the original
pleading under governing Maryland procedure.

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Accordingly, it is hereby ORDERED:
1. Plaintiff’s motion (ECF No. 28) is GRANTED IN PART and this Preliminary Injunction
is ENTERED.
2. Defendant and her counsel and anyone acting at Defendant’s or Defendant’s counsel’s
direction ARE HEREBY ENJOINED from violating Defendant’s ethical obligations to
respect her former client FAS’s privileges and confidences.
3. Excepted from the scope of this Temporary Restraining Order are any proceedings in
other courts in which a court has made a determination as to FAS’s privileges and
confidences in the context of those other proceedings. Otherwise, Defendant SHALL
OBTAIN FAS’s permission or an order from a court of competent jurisdiction BEFORE
disclosure by any means to anyone of FAS’s privileged or confidential information.
4. Defendant SHALL NOT FILE any document in her state court proceeding (Anderson v.
Fulchino et al., Baltimore County Circuit Court Case No. 13-10459) or any other
proceeding that reveals FAS’s privileged or confidential information other than as
specified in Item 3 of this Preliminary Injunction. Defendant MAY FILE a suitably
redacted/amended complaint that does not reveal FAS’s privileged or confidential
information but still provides the minimum basis for her claims for relief under Maryland
law.
5. Defendant SHALL RETURN to FAS any document, whether in electronic or paper form,
that Defendant obtained through her employment and representation of FAS and that is in
her or her counsel’s possession, custody, or control, EXCEPT FOR any document that
pertains to Defendant’s compensation or other benefit while employed with FAS.

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6. Plaintiff’s motion is DENIED IN PART to the extent it seeks relief different from what is
specifically awarded here and in the prior Temporary Restraining Order (ECF No. 32).
Defendant’s pending motion to dismiss the Verified Amended Complaint (ECF No. 27)
shall be addressed separately. Plaintiff’s request for attorney’s fees associated with filing
this motion is DENIED without prejudice to Plaintiff’s ability to file any such motion for
the same in the Baltimore County Circuit Court.
DATED this 9th day of October, 2013.

BY THE COURT:

/s/
James K. Bredar
United States District Judge

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