Risk Update

Playbook Conflicts and Anesthesiologists v. Hospital DQ Dust-up

Posted Dan Bressler

(Hat tip back to Karen Rubin for additional analysis, including a quote from Bill Frievogel, to further connect some of my best sources): “No DQ for company exec-turned-lawyer; “playbook” theory doesn’t play” —

  • “The California court of appeals has denied a bid by an employment discrimination defendant to disqualify the plaintiff’s legal team. The name partner in the law firm representing the plaintiff was formerly the employer’s chief operating officer — but the court rejected the assertion that his firm should be disqualified merely based on his knowledge of the employer’s ‘playbook.'”
  • “Based on Ritchie’s former role with the company, defendant O’Gara Coach moved to disqualify his firm, asserting that in his former role Ritchie was directly involved in policy-making, discussed strategy in pending employment claims with the company’s outside counsel, and was responsible for workplace policies when Wu’s claims arose.”
  • “But under California law, said the appeals court, a law firm is not subject to disqualification merely because ‘one of its attorneys possesses information concerning an adversary’s general business practices or litigation philosophy acquired during the attorney’s previous relationship with the adversary.'”

“As ethics authority Bill Freivogel puts it at his always-useful Freivogel on Conflicts site, the issue in the playbook analysis is ‘when does a lawyer learn enough about the former client’s thought processes and procedures that the new representation may be deemed ‘substantially related’ to the former one,’ thus requiring disqualification under Model Rule 1.9(a) and its state counterparts.”

“Anesthesiology Company Wants Hospital Attys DQ’d” —

  • “A Michigan-based anesthesia service has asked a federal court to disqualify attorneys representing a group of local hospitals in a dispute over an alleged violation of a noncompete clause, saying the law firm representing the hospitals advised the company on the business strategy at the heart of the suit.”
  • “Anesthesia Associates of Ann Arbor, or A4, argued Friday that Honigman LLP advised the company in 2018 on whether a potential strategy for pursuing payment from third parties based on an implied contract would violate the terms of a noncompete agreement with Trinity Health Corporation.”
    “As a result, A4 argued, Honigman should not be allowed to represent Trinity in its suit over that same strategy, especially since the law firm worked for A4 for months before disclosing that it also represented Trinity.”
  • “‘Honigman was engaged to and directly provided legal advice to A4 on the exact negotiation strategy that it now alleges is a material breach of A4’s agreements with Trinity, without first disclosing that the firm’s representation of A4 may be materially limited by its obligations to Trinity,’ the motion said.”
  • “In a motion to disqualify filed Friday, however, A4 said that during the process of reevaluating its relationship with Aetna and Blue Cross, Honigman advised the company on a potential “implied in fact” contract strategy that would allow A4 to collect balances directly from third-party payors without having to bill patients. Honigman began advising on this strategy in May 2018, according to the motion. In August 2018, however, the law firm told A4 for the first time that it also represented Trinity. Afterward, A4 decided to part ways with Honigman, according to the motion.”