Chemcraft Holdings Corp. v. Shayban, 2006 NCBC 13 (N.C. Super. Ct. Oct. 5, 2006)(Tennille)

Plaintiff's counsel had verbal discussions with the defendant, before litigation began, about the possibility of representation against his former employer. In the course of those discussions, the defendant sent counsel an email containing confidential information about the potential litigation. Plaintiff's counsel had never looked at the contents, and thereafter represented the employer.

Defendant moved to disqualify plaintiff's counsel. The Court granted the motion, notwithstanding its finding that there had been no unethical conduct and no violation of the Rules of Professional Conduct. It held that the attorney had an obligation of determining that he had no conflict at the outset of the representation, that he was responsible for having read what was sent to him, and that "the goal of maintaining public confidence in our system of justice demands that courts prevent even the appearance of impropriety and thus resolve any and all doubts in favor of disqualification."

The Court also considered Rule 1.18 of the North Carolina Rules of Professional Conduct, which deals with duties of attorneys to prospective clients. It held that "[t]he aim of Rule 1.18 is to prevent a lawyer who acquires strategic information from a prospective client from using that information against the client. On the battlefield, stumbling upon an opponent’s secret plans may determine the outcome of an engagement; but in the courtroom, Rule 1.18 protects litigants from this fate by prohibiting an attorney from using confidential information to the detriment of a prospective client. The type of information prohibited by Rule 1.18 is exactly the type of information to which [the lawyer] has had access since receiving [the] email—a client’s personal thoughts and impressions regarding the facts of his case and possible strategies for a lawsuit. The Court cannot allow Plaintiffs to be represented by counsel who has had access to such potentially damaging information."

Full Opinion

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