United States District Court, E.D. Missouri, Eastern Division
GLENN WILLIAMS, on behalf of himself and all others similarly situated, Plaintiff,
CENTRAL TRANSPORT INTERNATIONAL, INC., Defendant.
MEMORANDUM AND ORDER
CAROL E. JACKSON, District Judge.
This matter is before the Court on defendant's motions to disqualify plaintiff's counsel and to strike plaintiff's declaration. Plaintiff has filed a response in opposition, and the issues are fully briefed.
On October 9, 2013, plaintiff Glenn Williams filed this action on behalf of himself and others similarly situated, claiming that defendant Central Transport International, Inc., willfully violated the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201, et seq., by maintaining improper overtime policies and record keeping practices. Plaintiff alleges that defendant had a uniform policy of providing overtime compensation for hours worked in excess of fifty-five hours per week, instead of the required forty hours per week, and that its electronic timekeeping system did not record all hours actually worked. Plaintiff seeks to recover unpaid overtime wages, liquidated damages, costs and attorney's fees.
On November 27, 2013, plaintiff filed an action against defendant and Bill Kincaid in the Circuit Court for the City of St. Louis, Missouri based on the same underlying facts as in the federal lawsuit, but asserting different legal claims, including: (1) violation of the Missouri wage and hour laws for failure to calculate wages at the requisite overtime rate; (2) breach of contract based on failure to compensate employees for all hours worked; (3) unjust enrichment by retaining the benefits of uncompensated work by employees; and (4) injunctive relief. Williams v. Central Transport Int'l, Inc., Cause No. 1322-CC10027 (Mo. Cir. Ct. Nov. 27, 2013) [Doc. #42-1]. The state court action was initially removed to this district court, but it was later remanded.
The same attorneys represent the plaintiffs in both cases. Defendant argues that plaintiff's counsel should be disqualified for committing ethical violations and because they cannot serve as class counsel in both pending lawsuits.
II. Legal Standard
Attorney disqualification rests in the discretion of the court. Petrovic v. Amoco Oil Co. , 200 F.3d 1140, 1154 (8th Cir. 1999) (quoting Harker v. Commissioner , 82 F.3d 806, 808 (8th Cir. 1996)). Motions to disqualify counsel are subject to particularly strict judicial scrutiny given the potential for abuse by opposing counsel. Droste v. Julien , 477 F.3d 1030, 1035 (8th Cir. 2007). This is because "[d]isqualification often results in increased expenses, delay in resolution of the proceedings, and always deprives a party of its choice of counsel." Commonwealth Land Title Ins. Co. v. St. Johns Bank & Trust Co., No. 4:08-CV-1433 (CAS), 2009 WL 3069101, *4 (E.D. Mo. Sept. 22, 2009) (citation omitted). "[T]he extreme measure of disqualifying a party's counsel of choice should be imposed only when absolutely necessary." Macheca Transp. Co. v. Philadelphia Indem. Ins. Co. , 463 F.3d 827, 833 (8th Cir. 2006) (internal quotations and citations omitted). "Disqualification is appropriate where an attorney's conduct threatens to work a continuing taint on the litigation and trial." Gifford v. Target Corp. , 723 F.Supp.2d 1110, 1116 (D. Minn. 2010) (citation omitted). Factors to be considered include a court's "duty to maintain public confidence in the legal profession and its duty to insure the integrity of the judicial proceedings." Id . at 1116-17 (citation omitted). The party seeking disqualification bears the burden of showing that such a sanction is warranted. A.J. by L.B. v. Kierst , 56 F.3d 849, 859 (8th Cir. 1995).
A. Alleged Ethical Violations
Defendant first contends that plaintiff's counsel have engaged in conduct that violates this Court's ethics rules. Pursuant to Local Rule 12.02, the professional conduct of attorneys practicing in this district is governed by the Missouri Rules of Professional Conduct. E.D. Mo. L.R. 12.02. ("The Rules of Professional Conduct adopted by this Court are the Rules of Professional Conduct adopted by the Supreme Court of Missouri, as amended from time to time by that Court"). The Supreme Court of Missouri adopted the ABA Rules of Professional Conduct (Model Rules) effective January 1, 1986. See Mo. Sup. Ct. R. 4. This Court has determined that the local rule intends to apply the Model Rules. Commonwealth Land Title Ins. Co., 2009 WL 3069101 at *3; see also Harker , 82 F.3d at 807.
Defendant alleges that plaintiff's counsel violated Rule 4-1.4 of the Missouri Supreme Court Rules, which states that "[a] lawyer shall... keep the client reasonably informed about the status of the matter" and "explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." Defendant claims that plaintiff's deposition testimony establishes that he does not understand that a class action has been filed in his name, he is unaware of the existence of two separate proceedings in state and federal court, he does not understand the fee agreement with his counsel, his attorneys do not regularly communicate with him, and his attorneys failed to communicate defendant's settlement offer to him.
Upon review of the deposition transcript, the Court does not agree with defendant's estimation of plaintiff's knowledge and awareness of the status of the two lawsuits and his attorney's actions. See Williams Dep. 159:20, 166:17, 168:25 (testifying he had filed two lawsuits against defendant in total, he had "most copies of most things, " and he spoke with his attorneys approximately once a month) [Doc. #42-5]. Also, a motion to disqualify may not be the proper vehicle for addressing an attorney's alleged ethical violations. Williams v. Trans World Airlines, Inc. , 588 F.Supp. 1037, 1046, n.4 (W.D. Mo. 1984) (stating that "alleged ethical violations should be left to federal or state disciplinary machinery unless the integrity of the judicial process is threatened"). Further, a potential violation of the Model Rules does not lead to automatic disqualification. See Cent. Milk Producers Co-op. v. Sentry Food Stores, Inc. , 573 F.2d 988, 991 (8th Cir. 1978) ("Although the Code of Professional Responsibility establishes proper guidelines for the professional conduct of attorneys, a violation does not automatically result in disqualification of counsel.").
In the case relied upon by defendant, Deadwyler v. Volkswagen of Am., Inc., the court imposed sanctions for plaintiff's counsel's conduct after counsel admitted to failing to transmit settlement offers, admitted that none of the plaintiffs in the certified class had ever extended or defined any authority to settle the case, and made "flagrant misrepresentations" to induce plaintiffs to participate in the action. 134 F.R.D. 128, 138-41 (W.D. N.C. 1991). Here, plaintiff's attorneys assert that they have kept the plaintiff reasonably apprised of the ongoing status of the lawsuit. Also, in a declaration attached to the response to the instant motion plaintiff attests to ...