This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
The Pampered Chef, et al.,
Filed April 26, 2005
Robert H. Schumacher, Judge
Hennepin County District Court
File No. PI 04-4306
Alfred M. Stanbury, Stanbury Law Firm, P.A., 2209 St. Anthony Parkway, Minneapolis, MN 55418 (for appellant)
James L. Haigh, Sarah L. Sanville, Cousineau, McGuire & Anderson, Chartered, 600 Travelers Express Tower, 1550 Utica Avenue South, Minneapolis, MN 55416-5318 (for respondents)
Considered and decided by Halbrooks, Presiding Judge, Schumacher, Judge, and Hudson, Judge.
ROBERT H. SCHUMACHER, Judge
As the plaintiff in an underlying products-liability lawsuit, appellant Christine Helgemo challenges the district court's disqualification of her attorney. Helgemo argues the district court abused its discretion because the evidence did not support the disqualification and the court failed to balance the equities when making its determination. We affirm.
In February 2003, attorney John Dehen commenced a products-liability action in federal court against respondents The Pampered Chef and Global Contracting Manufacturing, LLC. The case—which is not the direct subject of this appeal—alleged claims of negligence and strict liability for defective design and failure to warn consumers about dangers inherent in one of the company's products, a knife sharpening case. Petron v. The Pampered Chef & Global Contracting Mfg., LLC, No. 03-CV-T518 (D. Minn. filed Feb. 25, 2003). In response to various discovery disputes, the parties stipulated to a protective order whereby Pampered Chef and Global Contracting agreed to "provide the Requested [discovery] Information on the understanding that the Requested Information be subject to a Protective Order pursuant to [Fed. R. Civ. P. 26(c), subd. 7], relating to trade secrets and confidential commercial information." The information requested by Helgemo was to be "securely maintained" and "kept confidential" in accordance with the terms of stipulation and protective order. In pertinent part, those terms included:
1. The Requested Information shall not be used for any purpose other than for use in the litigation of this case, and the parties . . . and their counsel, shall not give, show or otherwise divulge The Requested Information, or the contents or substance thereof, or any copies, prints, negatives, listings or summaries thereof, to any person or other entity except their employees, experts or consultants employed and retained by them in connection with this specific action.
2. The Requested Information . . . consists of documents produced in response to [Petron's] discovery requests . . . and shall be marked as "CONFIDENTIAL" by counsel for [Pampered Chef and Global Contracting].
. . . .
5. It is specifically understood the Requested Information marked "CONFIDENTIAL" is not to be used to contact or communicate with present or past persons identified as having claims or suits absent a court order.
. . . .
9. The terms of this Stipulation and Protective Order shall remain in effect until otherwise ordered by the Court.
A federal magistrate entered the order on October 30, 2003. In responding to a motion that the protective order be declared null and void, the magistrate reminded the parties in December that "any documents produced shall be used exclusively for [the Petron] litigation." (Emphasis added.)
The Petron suit was eventually settled, and on February 10, 2004, Dehen filed a complaint in state district court on behalf of Helgemo. Thatcase alleged nearly identical claims against Pampered Chef and Global Contracting of negligence and strict liability, as well as claims of misrepresentation and fraud, negligence per se, and failure to properly notify the Consumer Products Safety Commission of a product defect.
Pampered Chef and Global Contracting soon learned that Dehen had been sending letters to certain customers identified in confidential documents produced by Pampered Chef and Global Contracting under Petron's protective order. For example, on February 11, 2004, just one day after filing the Helgemocomplaint, Dehen sent correspondence to Salvatore Greco of Monongahela, Pennsylvania. In pertinent part, the Greco letter reads:
Dear Mr. Greco:
I am an attorney representing a woman in Minnesota who severely cut her hand and wrist in December, 2001 when a Pampered Chef knife she had purchased would not properly release from the case. . . . You were identified as having a similar problem and injury with your Pampered Chef knife/case and we have your incident report.
. . . .
We have sued the distributor . . . and the manufacturer of the knife cases [(Pampered Chef and Global Contracting)] . . . on behalf of our client under various legal theories . . . .
In proceeding with the lawsuit, we alarmingly learned, through access to [Pampered Chef's] incident report records forwarded to [Pampered Chef's] customer service by injured persons like yourself, that since early 2000, there were numerous (well over 100) other incidents of knife/case failures resulting in injuries to innocent persons such as yourself.
. . . .
We need your help. As a significant witness in this matter, we are attempting to contact all those persons who were similarly injured to find out among other things details of your incident and what you may have told [Pampered Chef] or their representatives about the release issues. A five or ten minute conversation is all we need. . . .
A second reason for this contact is that we are looking to represent the group of injured persons. If you were injured in any respect, you are entitled to receive compensation for your injuries . . . . Understand that no injury is too insignificant. Our representation is on a "contingent fee" basis that essentially means that we take a percentage of a settlement or recovery. If there is no settlement or recovery, you owe us no fee. . . .
If you are interested in pursuing either by settlement or lawsuit against [Pampered Chef and Global Contracting], please sign the enclosed CONTRACT OF RETAINER form and return it to us A.S.A.P. . . . However, regardless of your interest in obtaining compensation for your injuries, we need to speak with you. We look forward to your anticipated assistance.
Pampered Chef and Global Contracting moved the federal magistrate for an order compelling compliance with terms of the protective order and imposing sanctions on Dehen. On April 9, the magistrate found that Helgemo's
counsel is not prohibited from communications and contact with persons identified in incident reports obtained in discovery from [Pampered Chef and Global Contracting], though counsel is prohibited from disclosing information designated confidential which was obtained from defendants through discovery in this action. This prohibition is ongoing and survives the resolution of this case.
(Emphasis added.) Other motions relating to Dehen's representation of prospective plaintiffs were taken under advisement "pending the Court's receipt of database material from plaintiff and determination on final disposition of the database materials," as previously ordered by the court.
On April 20, in denying Pampered Chef and Global Contracting's postmotion request for specific sanctions against Dehen, the magistrate stated that
Dehen is prohibited from initiating direct contact for purposes of client solicitation as to any individual(s) whose identity as an injured person was revealed to him through discovery responses and document productions provided by [Pampered Chef and Global Contracting]. The Court finds that [the Petron case] is now resolved and recognizes no justification for further communications with such individuals as possible witnesses in this matter.
(Emphasis added.) Moreover, Dehen was specifically prohibited from "avail[ing] himself of information or materials contained in the database [submitted to the court] in any subsequent legal action or proceedings, or otherwise, except as the materials may be independently obtained in discovery in such matters." The database materials were filed with the court under seal, "along with an affidavit certifying that all database documents and copies are submitted to the Court, no originals or copies have been retained by counsel or experts, and all other confidential documents have been returned to defendants in compliance with the Court's [April 9] order."
As in Petron, Pampered Chef and Global Contracting moved the state district court for a protective order pursuant to Minn. R. Civ. P. 26.03. In the May 2004 motion, Pampered Chef and Global Contracting requested protection of confidential, trade secret, proprietary, and commercial information sought by Helgemo's interrogatories and requests for production of documents. Pampered Chef and Global Contracting also moved to disqualify Dehen as counsel, based on Dehen's violation of the protective order in Petron. In response, the district court specifically found that Pampered Chef and Global Contracting
have produced evidence that Mr. Dehen has been engaged in the solicitation of individuals included in the confidential documents disclosed in the [Petron] federal case. Although Mr. Dehen claims that he obtained the information from independent, non-confidential sources, he has not revealed where he obtained the information. There has been enough evidence adduced to raise the inference that Mr. Dehen has solicited [Helgemo] for representation in an improper fashion. Mr. Dehen has not presented evidence to counter that inference convincingly.
The court disqualified Dehen as counsel for Helgemo and prohibited him from "aid[ing] or assist[ing] [Helgemo] in her search for new counsel."
In their brief, Pampered Chef and Global Manufacturing requested this court to strike portions of Helgemo's brief. Because the highlighted language is not relevant to the issue presented here and given our decision today, it need not be addressed.
Helgemo argues that the district court abused its discretion by disqualifying her attorney in the underlying products-liability action. In reviewing a district court's order granting a motion for disqualification of an attorney, this court determines whether the district court abused its discretion. See Jenson v. Touche Ross & Co., 335 N.W.2d 720, 731 (Minn. 1983); M.M. v. R.R.M., 358 N.W.2d 86, 90 (Minn. App. 1984). Interpretation of court orders present questions of law, which we review de novo. Anderson v. Archer, 510 N.W.2d 1, 3 (Minn. App. 1993).
Helgemo argues the evidence presented to the district court did not support the disqualification of her counsel. She claims the protective order issued in the Petron case did not preclude Dehen from contacting or communicating with persons identified in the incident reports produced by Pampered Chef and Global Contracting in Petron. In addition, Helgemo claims the federal magistrate's orders of April 2004 contradicted each other and that even though the later order of April 20 did prohibit "direct contact for purposes of client solicitation," it was issued over two months after Dehen mailed the Greco letter.
Rejecting Helgemo's arguments, the district court found the evidence presented by Pampered Chef and Global Contracting and Helgemo's own failure to rebut that evidence resulted in the conclusion that "[t]here has been enough evidence adduced to raise the inference that Mr. Dehen has solicited [Helgemo] for representation in an improper fashion." The district court granted the motion of Pampered Chef and Global Contracting for Dehen's disqualification and prohibited him from assisting Helgemo in finding new counsel.
Courts recognize the seriousness of the disqualification of a party's attorney. See, e.g., Jenson, 335 N.W.2d at 732 ("A court should be conscious of its responsibility to preserve a reasonable balance between the need to ensure ethical conduct on the part of lawyers appearing before it and other social interests, which include the litigant's right to freely chosen counsel."(citation omitted)). Because of the potential for abuse by opposing counsel, disqualification motions are subjected to strict judicial scrutiny. Olson v. Snap Prods., Inc., 183 F.R.D. 539, 541-42 (D. Minn. 1998). The party moving for disqualification must satisfy a high standard of proof, but "any legitimate doubts, which are created by the movant's proffer, must be resolved in favor of disqualification." Id. at 542. In addition, defendants have an interest in a trial free from even the risk that confidential information has been unfairly used against it. Williams v. Transworld Air Lines, Inc., 588 F. Supp. 1037, 1046 (W.D. Mo. 1984).
The Minnesota Supreme Court has articulated a three-part test to evaluate attorney disqualifications:
(a) Considering the facts and the issues involved, is there a substantial, relevant relationship or overlap between the subject matters of the two representations?
(b) If so, then certain presumptions apply: First, it is presumed, irrebutably, that the attorney received confidences from the former client and he or she will not be heard to claim otherwise. Second, it is also presumed, but subject to rebuttal, that these confidences were conveyed to the attorney's affiliates.
(c) Finally, at this stage, if reached, the court weighs the competing equities.
Lennartson v. Anoka-Hennepin Indep. Sch. Dist. No. 11, 662 N.W.2d 125, 129 (Minn. 2003) (quoting Jenson, 335 N.W.2d at 731-32). The Jenson test remains viable, but with the specific limitation that the Minnesota Rules of Professional Conduct control in the event of a conflict between the rules and Jenson. See Lennartson, 662 N.W.2dat 134-35 (concluding, in context of imputed disqualifications of attorneys in private sector, that Jenson test was inconsistent with and therefore superceded by Minn. R. Prof. Conduct 1.10(b)). While Pampered Chef and Global Contracting cite the general language of Minn. R. Prof. Conduct 3.4(c), that a lawyer shall not "knowingly disobey an obligation under the rules of a tribunal," that language is not inconsistent with Jenson.
First, applying the Jenson test, it is clear that the subject matter of the Petron and Helgemocases is nearly identical. Thus, the first prong of the Jenson test is easily satisfied. Following the second prong, we presume (1) without an opportunity for rebuttal, that Dehen received confidences from the discovery conducted in Petron and (2) subject to rebuttal, that such confidences were shared with Dehen's affiliates. Lennartson, 662 N.W.2d at 129. Because whether or not such confidences were shared with Dehen's colleagues is not at issue here, we assume that Dehen received confidences revealed to him in the course of discovery in the Petron case. Finally, we are to weigh the competing equities present in disputes over attorney disqualification. Lennartson, 662 N.W.2d at 129. Thus, the central issue here is whether Dehen improperly used the discovery obtained in Petron for his and his client's benefit in violation of the federal court's protective order.
The language of the October 2003 protective order is determinative, plainly ordering that the requested information "not be used for any purpose other than for use in the litigation of this case." Moreover, it was "specifically understood [that] the Requested Information marked "CONFIDENTIAL" [was] not to be used to contact or communicate with present or past persons identified as having claims or suits absent a court order." (Emphasis added.) But on February 11, 2004, Dehen sent the Greco letter regarding "The Pampered Chef Litigation." The letter unabashedly offered to represent Greco when Dehen wrote, "We are looking to represent the group of injured persons." Dehen enclosed a retainer contract and in the concluding paragraph of the letter invited Greco to sign the retainer if he was "interested in pursuing either by settlement or lawsuit against" Pampered Chef and Global Contracting.
Given this violation of the federal court's protective order, we determine that the district court's decision to disqualify Dehen was not an abuse of discretion. In balancing the evidence and equities, the district court found the evidence presented to be sufficient "to raise the inference that Mr. Dehen has solicited [Helgemo] for representation in an improper fashion." According to the district court, Dehen did not explain how he received the contact information for persons solicited such as Greco. As such, "any legitimate doubts . . . must be resolved in favor of disqualification." Olson, 183 F.R.D. at 542. The district court did not abuse its discretion by finding that Dehen received the specific contact information through discovery conducted in the separate Petron case in violation of the federal court's protective order which was specifically not to be used "for any purpose other than for use in the litigation of" that case.
Helgemo argues that the federal magistrate's orders of April 9 and 20, 2004 contradict each other. In the April 9 order where Pampered Chef and Global Contracting sought to compel compliance with the terms of the protective order, the court stated that Dehen was "notprohibited from communications and contact with persons identified in incident reports obtained in discovery from defendants," although he was prohibited from disclosing confidential information obtained in the discovery. Then, in the April 21 order addressing a request for specific sanctions against Dehen, the court prohibited him "from initiating direct contract for purposes of client solicitation as to any individual(s) whose identity as an injured person was revealed to him through discovery responses and document productions provided by [Pampered Chef and Global Contracting]."
Despite an apparent contradiction between the April 2004 orders, the fact remains that Dehen mailed the Greco letter and violated the terms of the operative document—the Petron federal protective order—on February 11, 2004, two months before either of these orders were issued by the federal magistrate. Notably, in November 2003, Dehen moved the federal court to compel discovery and for other relief, including a declaration that the protective order be declared "null and void." The court denied the motion and again specifically reminded Dehen that "any documents produced shall be used exclusively for [the] litigation" in Petron. (Emphasis added.)
Finally, Helgemo argues the magistrate's law clerk informed him the "intent" of the two orders was, in Dehen's words, "not . . . to prevent contact with those witnesses but that the intent of the order was to prevent the dissemination of documents to third persons to protect their privacy." But we cannot accept this argument when both the magistrate's protective order and a subsequent discovery order make clear that Dehen was not to use the requested information for any purpose other than for use in the litigation of the federal Petron case. We conclude it was not an abuse of discretion for the district court to disqualify Helgemo's counsel.