United States District Court, N.D. Alabama, Southern Division
DAVID PROCTOR UNITED STATES DISTRICT JUDGE
Wonder Years was an award-winning comedy-drama broadcast on
ABC television from 1988 to 1993. Set in a turbulent time in
our nation's history, the late 1960s and early 1970s, the
show portrays the life and perspectives of Kevin Arnold, a
typical teenager raised by stereotypical parents in Anytown,
USA. In one particular episode, “Dance with Me, ”
Kevin's relationship with Lisa Berlini is blossoming
(ever since their four-minute phone call). As they joke
around together in homeroom, the upcoming school dance is
announced over the PA system. Kevin decides it is time to
take his burgeoning relationship with Lisa to the next level.
So, he asks her to the dance (in the most intimate form of
communication known to twelve year olds-by passing a note in
great glee, Lisa writes “OKAY!” (including a
smiley face in the “o”). Kevin cannot believe it.
Lisa Berlini, who has “the best smelling head of hair
in the seventh grade, ” is going to the dance with him;
after all, he has it in writing. But soon after the bell
rings, as Lisa and Kevin are filing out of class, the taller,
cooler Brad Gaines arrives on the scene. To Kevin's
surprise, he asks Lisa to attend the dance with him. And to
his dismay, mere minutes after saying yes to Kevin, Lisa
accepts Brad's offer. After Brad smiles and walks off,
Kevin, obviously confused, confronts Lisa: “But you
just said you'd go [to the dance] with me.” Lisa is
uncomfortable, but puts up a defense: “That was before
Brad asked me. . . . I didn't know he was gonna ask me
when I said ‘yes' to you.” Red Diamond, Inc.,
the defendant in this case, may have some sympathy for Kevin.
Red Diamond and the law firm Bradley Arant Boult Cummings
(“Bradley”) have been to several dances over the
years. Over the better part of a decade, from 2009 to 2018,
Bradley represented Red Diamond in various small matters from
time to time. But on December 23, 2018, Bradley began
representing Southern Visions, LLP in this significant patent
infringement lawsuit against Red Diamond. Bradley knew that
its client Red Diamond objected strenuously to the
representation, but, much like Lisa Berlini, it was happy to
accept what it doubtless viewed as a substantial upgrade.
Three days after saying “yes” to Southern
Visions, on December 26, 2018, Bradley withdrew from all
matters in which it was representing Red Diamond.
Diamond has moved to disqualify Bradley from representing
Southern Visions against it in this lawsuit. (Doc. # 76).
Among other things, Red Diamond claims Bradley violated
Alabama Rule of Professional Conduct 1.7(a), which generally
forbids the simultaneous representation of two directly
adverse clients, when it began representing Southern Visions
in this lawsuit. The court held a hearing on the matter on
February 11, 2019. After careful consideration of the
parties' submissions and argument at the hearing, and for
the reasons explained below, the court agrees with Red
Diamond. Bradley violated Rule 1.7(a) when it began
representing Southern Visions, and disqualification is an
appropriate sanction for the violation. Red Diamond's
motion to disqualify (Doc. # 76) is accordingly due to be
provide relevant context, the court first summarizes
Bradley's prior representations of Red Diamond and then
reviews the circumstances that gave rise to Red Diamond's
Bradley's Prior Representations of Red Diamond
Bradley began representing Red Diamond in January 2009. (Doc.
# 76-1 at 1, ¶ 2). At that time, Bradley attorney Ray
Gibbons sent a letter to Red Diamond CEO William A. Bowron,
Jr. confirming “our engagement as legal counsel to
provide general representation” to Red Diamond.
(Id. at 6). Since 2009, Bradley's work for Red
Diamond has been light and sporadic.
2011, pursuant to that “general representation”
agreement, Red Diamond sought Bradley's assistance during
the divorce of Tom Bowron. (Id. at 2, ¶ 3). Tom
Bowron is the brother of Red Diamond CEO William Bowron and a
part owner of Red Diamond. (Id.). Because Tom
Bowron's ownership interest in Red Diamond was at issue,
Red Diamond's financial records were subpoenaed and
several Red Diamond executives were deposed. (Id.).
Bradley attorney Stewart Cox was involved in objecting and
responding to the financial subpoenas and representing Red
Diamond at the depositions of Red Diamond's CEO William
Bowron and its CFO Sherman Pitts. (Docs. # 85-7 at ¶ 3;
76-1 at 2, ¶ 4).
sealed deposition transcripts, submitted by Red Diamond for
the court's in camera review (Doc. # 86), show
that Bradley received certain confidential, nonpublic
information about Red Diamond during the course of this
representation. The information includes, broadly,
information about Red Diamond's board of directors,
director fees, distributions to owners, ownership interests
in the company, shareholder voting rights, audits,
facilities, income, loans and guarantees, family trusts,
corporate structure, operating divisions, annual reports,
customer identities, company expenses, employee salaries,
charitable giving, and other financial information including
debt, liabilities, total cost of goods sold, and total sales.
March 2014, Red Diamond engaged Bradley to advise it on
employee benefit matters, including the company's
retirement and welfare benefit plans. (Docs. # 76-1 at 2,
¶ 6; 85-5 at ¶ 3). Bradley attorney David Joffe was
principally responsible for handling these matters. (Doc. #
85-5 at ¶ 3). Over the four years (2014-2018) that Joffe
provided occasional advice to Red Diamond about employee
benefit matters, he billed only 26.5 hours for a total of
$10, 295. (Doc.# 85-5 at 3, ¶ 6).
December 2014, Red Diamond engaged Bradley to advise it on
tax matters. (Doc. # 76-1 at 2, ¶ 5). Bradley attorney
Bruce Ely was principally responsible for this
representation, and he handled three tax matters for Red
Diamond. In the first matter, Ely provided Red Diamond advice
about a pending tax audit by a private auditing company.
(Doc. # 85-3 at ¶ 3). That matter concluded in 2015.
(Id.). In the second matter, which occurred in 2017,
one of Red Diamond's tax officers was a witness in a
proceeding before the Alabama Tax Tribunal relating to a
state audit of one of Red Diamond's vendors.
(Id. at ¶ 4). Bradley billed 13.25 hours to Red
Diamond on this matter. (Id.). Finally, Ely also
billed fifteen minutes to Red Diamond in 2018 for his review
of Red Diamond's coffee-maker lease agreement for
potential Alabama rental tax issues. (Id. at ¶
in February 2016, Red Diamond engaged Bradley attorney Ethan
Tidmore to represent it in various debt collection matters.
(Doc. # 76-1 at 3, ¶ 7). These matters involved
restaurants, food marts, or day cares that had purchased food
supplies from Red Diamond on credit and then defaulted on
payment. (Doc. # 85-4 at ¶ 4). None of these debts
exceeded $25, 000, and most were under $5, 000. (Id.
at ¶ 5). Some of these debt collection matters remained
pending when Red Diamond filed its motion to disqualify.
(Doc. # 76-2 at 2, ¶ 4). As recently as December 12,
2018, Tidmore met for lunch with Red Diamond's Vice
President of Finance to discuss the status of these matters.
(Id. at ¶ 5; Doc. # 85-4 at ¶ 14).
outset of most of the engagements described above, Red
Diamond signed an engagement letter purporting to provide Red
Diamond's prospective consent to Bradley undertaking
future representations of other clients “in any matter
that is not substantially related” to Bradley's
work for Red Diamond, “even if the interests of such
clients in those other matters are directly adverse” to
Red Diamond, and “even if such representations would be
simultaneous.” (Doc. # 76-1 at 10, 15, 26). Bradley did
not advise Red Diamond to seek independent legal counsel
about these advance conflict waivers, and Red Diamond did not
seek independent counsel about the waivers. (Doc. # 76-1 at
The Current Dispute
September 2018, one of Red Diamond's competitors,
Southern Visions, filed a major patent infringement action
against it in the Northern District of Georgia. (Doc. # 1).
Southern Visions claims one of Red Diamond's products --
a device for simultaneously brewing and sweetening tea --
infringes several of Southern Visions' patents.
(Id. at 5-17). The action was transferred to this
court on December 11, 2018. (Doc. # 58).
December 18, 2018, Bradley attorney Matthew Lembke received a
call from one of Southern Visions' owners, Paul Stewart.
(Doc. # 85-2 at ¶ 4). Stewart told Lembke that, in light
of the transfer to this court, Southern Visions planned to
hire a lawyer in Birmingham to work on this case and that
Lembke was under consideration. (Id.). Lembke
responded that he would need to check for potential
that call, Lembke asked his legal assistant, Amy Hersey, to
run a conflicts check with Southern Visions as the potential
client and Red Diamond as the adverse party. (Id. at
¶ 6). Before coming to Bradley, Hersey had worked as a
legal assistant at the law firm Lightfoot, Franklin &
White (“Lightfoot”), which represents Red Diamond
in this patent infringement suit. (Id. at ¶ 3;
Doc. # 76-3 at ¶ 2). When asked to run the conflicts
check, Hersey immediately informed Lembke that she had worked
on the case while at Lightfoot. (Doc. # 85-2 at ¶ 6).
Lembke had another legal assistant run the conflicts check
instead of Hersey, and she was immediately screened from any
involvement in the conflicts review process. (Id. at
¶¶ 6-7). Hersey left the office for scheduled
vacation from December 22-30, 2018 and was placed on paid
administrative leave (where she remains) on December 31,
2019. (Id. at ¶ 14; Doc. # 85-1 at ¶ 13).
after running the conflicts check, on December 19, 2018,
Lembke called Lightfoot attorney Harlan Prater to determine
whether Hersey had obtained confidential information about
this case. (Doc. # 85-2 at ¶¶ 8-9). If she had,
Lembke wanted to know whether Red Diamond would consent to an
ethical screen around Hersey to cure any conflict created by
her employment with Bradley. (Id.). At the hearing
on February 11, 2019, counsel for Red Diamond represented
that this was the first time Red Diamond learned Bradley was
considering representing Southern Visions in this lawsuit.
afternoon of December 21, 2018, after completing the
conflicts check and learning that Red Diamond was a current
client of Bradley's, Lembke met with Southern Visions
personnel. (Id. at ¶ 11). At the hearing,
Lembke described the meeting as a “beauty
contest.” While in the meeting, Lembke learned that Red
Diamond had earlier that day told Bradley it did not consider
itself to have consented to any conflict created by
Bradley's representation of Southern Visions, and that in
any event Red Diamond revoked any such consent, effective
immediately. (Id. at ¶ 12; Doc. # 76-1 at
33-34). At the end of that meeting, at about 4:00 pm,
Southern Visions decided it wanted Bradley to represent it as
lead counsel in this case. (Docs. # 85-2 at ¶ 11; 92-1
at ¶ 3).
in the day on December 21, at 12:53 pm, Red Diamond CEO
William Bowron had sent an email to Bradley attorney Stewart
Cox expressing his dismay that Bradley was considering
representing Southern Visions in this case. (Doc. # 76-1 at
33-34). Though Bowron is not a lawyer, the email contains
classic legalese. In the email, Bowron explained that he was
“frankly shocked” Bradley believed the general
advance conflicts waivers Red Diamond had signed entitled
Bradley to sue Red Diamond while it continued to represent
Red Diamond in other matters. (Id. at 33-34)
(internal quotation marks omitted). In his view, Bowron
explained, the advance conflict waivers did not permit
Bradley to sue Red Diamond while it simultaneously
represented Red Diamond in other matters. (Id. at
34). But, Bowron went on, “[t]o the degree that
[Bradley] or any other relevant party, board, agency, or
court could conclude that Red Diamond has consented to
[Bradley] representing Southern Visions in the Patent
Lawsuit, I want to be clear that Red Diamond unequivocally
revokes that consent.” (Id.). Bowron also
expressed his view that Bradley's attempt to represent
Southern Visions was nothing “less than a violation of
the trust I placed in your firm.” (Id.).
morning of December 23, 2018, Lembke asked Bradley's
general counsel, John Watson, to have the firm's business
review committee determine whether to approve Bradley's
representation of Southern Visions in this lawsuit. (Doc. #
92-1 at ¶ 4). A few hours later, Watson notified Lembke
that the Southern Visions representation had been approved.
(Id.). In Lembke's view, “Bradley
represented Southern Visions beginning on December 23, 2018,
following approval of the representation by the firm.”
(Id. at ¶ 8). December 23 “was the first
day on which Bradley billed any time for work in connection
with” this lawsuit. (Id.). A review of
Bradley's invoice to Southern Visions, submitted for the
court's in camera review (Doc. # 93), shows that
Bradley lawyers performed about six hours of work on this
case on December 23 and 24, the two days before Christmas.
days after Bradley lawyers began work on this case for
Southern Visions, on December 26, 2018 at 11:18 am,
Bradley's general counsel sent an email to Red Diamond
withdrawing from its current representations of Red Diamond,
effective immediately. (Doc. # 85-1 at 7-8). The email stated
that Bradley believed it could represent Southern Visions in
this case because of Red Diamond's advance conflict
waivers. (Id. at 7). Bradley explained that it
routinely requires large companies like Red Diamond to agree
to such waivers in advance when it handles relatively small
matters for them, so that Bradley is not precluded from
undertaking more substantial representations on behalf of
other clients in the future. (Id.). Bradley stated
it would not have agreed to represent Red Diamond in the few,
small matters that it did without the advance conflict
waivers, and that the waivers were an express condition of
Bradley's representation of Red Diamond. (Id.).
The email closed by listing three pending debt collection
matters Bradley was handling for Red Diamond, noting that
those matters had no pending deadlines, and explaining that
Red Diamond would need to obtain other legal counsel if it
wished for any further action to be taken in those matters.
(Id. at 8).
minutes after Bradley withdrew from representing Red Diamond,
Bradley attorney Matthew Lembke entered an appearance on
behalf of Southern Visions in this case. But, to be clear, it
is undisputed that Bradley's representation of Southern
Visions began on December 23, not December 26.
a party is presumptively entitled to the counsel of his
choice, that right may be overridden only if
‘compelling reasons' exist.” In re
BellSouth Corp., 334 F.3d 941, 961 (11th Cir. 2003). One
compelling reason to deny a client counsel of its choice is
counsel's violation of an applicable rule of professional
conduct. See Banque de Rive, S.A. v. Highland Beach Dev.
Corp., 758 F.2d 559, 561 (11th Cir. 1985);
Miccosukee Tribe of Indians of Fla. v. Cypress, 686
Fed.Appx. 823, 825-26 (11th Cir. 2017); McGriff v.
Christie, 477 Fed.Appx. 673, 677-79 (11th Cir. 2012);
Herrmann v. GutterGuard, Inc., 199 Fed.Appx. 745,
747, 755-57 (11th Cir. 2006).
party moving to disqualify counsel bears the burden of
proving the grounds for disqualification.” Id.
“A disqualification order is a harsh sanction, often
working substantial hardship on the client and should
therefore be resorted to sparingly.” Herrmann,
199 Fed.Appx. at 752 (quoting Norton v. Tallahassee
Mem'l Hosp., 689 F.2d 938, 941 n. 4 (11th Cir.1982))
(internal quotation marks omitted).
sources of law govern motions to disqualify: the local rules
of this court and federal common law. Herrmann, 199
Fed.Appx. at 752.
Rule 83.1(f) provides that attorneys appearing before this
court are governed by: (1) this court's local rules; (2)
the Alabama Rules of Professional Conduct (to the extent they
are not inconsistent with the court's local rules); and
(3) the American Bar Association Model Rules of Professional
Conduct (to the extent they are not inconsistent with either
the court's local or Alabama rules). N.D. Ala. L.R.
83.1(f). The local rules also provide that violations of
those standards may result in a variety of sanctions,
including “removal from a particular case.”
state-court interpretations of the Alabama Rules of
Professional Conduct are not binding on a federal court
tasked with determining whether an attorney should be
disqualified based on a violation of the Rules, they are
persuasive authority concerning the Rules' meaning.
See Clark v. Alfa Ins. Co., No. CIV.A. 00-AR-3296-S,
2001 WL 34394281, at *5 n.1 (N.D. Ala. Feb. 7, 2001) (Acker,
deciding whether to grant a motion to disqualify, a district
court must first “identify a specific rule of
professional conduct applicable to that court and determine
whether the attorney violated that rule.”
Herrmann, 199 Fed.Appx. at 755; see also
Schlumberger Techs., Inc. v. Wiley, 113 F.3d 1553, 1561
(11th Cir. 1997) (“[W]here the district court's
disqualification order is based on an allegation of ethical
violation, . . . [t]he court must clearly identify a specific
Rule of Professional Conduct which is applicable to the
relevant jurisdiction and must conclude that the attorney
violated that rule.”). A district court “may not
disqualify an attorney on the basis of some transcendental
code of conduct that existed only in the subjective opinion
of the court, of which the attorney had no notice.”
Schlumberger, 113 F.3d at 1561 (cleaned up).
violation of an ethical rule is found, disqualification may
be an appropriate sanction. See Herrmann, 199
Fed.Appx. at 747 (affirming disqualification order where
district court found violation of Georgia Rule of
Professional Conduct). Upon finding a violation of an
applicable ethical rule, a district court must then,
“considering binding and persuasive federal case law,
decide whether or not the ethical lapse warrants
disqualification.” Clark, 2001 WL 34394281, at
Diamond's motion to disqualify requires the court to
resolve two distinct issues. First, the court must determine
whether Bradley violated a rule of professional conduct
applicable in this court by undertaking representation of
Southern Visions in this lawsuit. Second, if such a rule
violation occurred, the court must decide whether
disqualification is an appropriate sanction.
local rules of this court are silent on attorney conflicts of
interest, but they do incorporate by reference the Alabama
Rules of Professional Conduct and require attorneys
practicing in this court to abide by those rules.
See N.D. Ala. L.R. 83.1(f). As explained below, the
court concludes (1) that Bradley violated Alabama Rule of
Professional Conduct 1.7(a) and (2) that disqualification is