United States District Court for the District of Columbia
April 6, 2004.
UNITED STATES OF AMERICA, Plaintiff,
PHILIP MORRIS INCORPORATED, et al., Defendants
The opinion of the court was delivered by: GLADYS KESSLER, District Judge
MEMORANDUM OPINION Redacted
This matter is before the Court on the United States' Motion to Quash
Subpoenas Issued by Counsel for Neil H. Koslowe, Shearman & Sterling,
and BATAS,*fn1 the Opposition and Reply ("Motion to Quash"), as well as
the United States' Motion to Disqualify Neil H. Koslowe and Shearman
& Sterling from Representing BATAS, the Opposition and Reply ("Motion
to Disqualify"). Because of the interrelationship between the factual and
legal issues in both Motions, the Court is considering them together and
will issue one Opinion. There will be separate Orders for each Motion.
Upon consideration of all the pleadings and exhibits, the applicable case
law, and the entire record herein, the Court concludes that the Motion to
Quash should be granted and the Motion to Disqualify should be
granted. I. PROCEDURAL BACKGROUND
The United States has been attempting to compel BATCo. to produce
certain documents in the possession of its Australian affiliate, BATAS,
for almost two years. On April 14, 2003, after litigation regarding two
United States Motions to Compel, the Court issued Order #343 granting
those Motions and ordering BATCo. to produce or log the documents in
issue by May 14, 2003 (later extended to June 1, 2003 in Order #354). On
October 20, 2003, after further litigation, the Court found BATCo. in
contempt of Court due to its continued failure to produce a privilege log
for documents covered by Order #343, which BATCo. alleged were withheld
on privilege grounds. Order #419, United States v. Philip Morris USA
Inc., No. 99-cv-2496 (GK), 2003 WL 22462167 (D.D.C. October 20,
Sometime in October 2003, although the precise date is not clear from
the record, BATAS retained as its counsel in this matter Shearman &
Sterling, a prominent New York City-based law firm, and Neil H. Koslowe,
one of the partners in its Washington, D.C. office. On October 23, 2003,
counsel for BATAS, including Mr. Koslowe, and the Government met and
conferred to discuss BATAS' intention to file a Motion for Leave to
Intervene. On December 5, 2003, after filing of the Motion and litigation
over its merits, the Motion to Intervene was granted in Order #449. On December 11, 2003, Government counsel wrote a letter to Mr. Koslowe,
formally raising the issue of his disqualification based on his prior
representation of the United States in tobacco. matters.*fn2 On December
16, 2003, Mr. Koslowe responded, and on December 23, 2003, the United
States replied with more specific information regarding the number of
hours he reported working on tobacco. matters and reminding him that he
had worked on highly confidential documents. In this letter, the
Government requested a meet and confer on its anticipated Motion to
Disqualify Mr. Koslowe and Shearman & Sterling from continuing to
represent BATAS in this law suit.
On December 29, 2003, Mr. Koslowe responded by requesting numerous
documents from the Government. No previous mention had been made of the
need for discovery on the part of Mr. Koslowe or Shearman & Sterling
in previous conversations with the Government. The United States replied
that same day, providing copies of certain time records showing the hours
that Mr. Koslowe reported working on the tobacco. matters, but refusing
to provide any privileged documents or formal discovery. On December 30,
2003, the United States again requested an expedited meet and confer.
Because of Mr. Koslowe's unavailability, it was not possible for the meet and confer to take place until January 6, 2004.*fn3 At
that meet and confer, the Government indicated it had no objection to Mr.
Koslowe's efforts to use informal discovery by contacting Department of
Justice lawyers with whom he had worked.
On January 12, 2004, Mr. Stephen J. Marzen, who represented Mr. Koslowe
and Shearman & Sterling at the January 6, 2004 meet and confer,
telephoned the Government and reported that neither Mr. Koslowe nor
Shearman & Sterling would be voluntarily withdrawing, and that they
anticipated filing a cross-motion for discovery shortly. No such motion
for discovery has ever been filed. On January 21, 2004, the Government
filed its Motion to Disqualify.
On January 26, 2004, the parties met and conferred regarding the
proposed motion of Mr. Koslowe and Shearman & Sterling for an
additional 10 days to respond to the disqualification Motion; the
Government would consent to only an additional seven days. Two days
later, on January 28, 2004, Koslowe, et al., filed a motion
seeking an additional 17 (not 10) days to answer the disqualification
Motion.*fn4 In that motion they mentioned, for the first time, a need to
conduct discovery. The motion for extension of time was granted by Minute
Order on January 29, 2004. On February 3, 2004, Mr. Marzen requested a meet and confer with the
Government about a proposed motion to take depositions. That meet and
confer was scheduled for February 4, 2004 at 5:00 p.m. Less than 10
minutes before the start of the 5:00 p.m. meet and confer, the United
States received copies of subpoenas, attached to notices of depositions,
requiring the attendance of four government attorneys as witnesses at
depositions on February 9 and 10, 2004, and production of documents by
February 10, 2004. At the February 4, 2004, meet and confer, Mr. Marzen
stated that he intended to file a motion seeking the discovery that had
already been served, on behalf of Koslowe, et al., No such
motion has ever been filed.
On February 6, 2004, at a regularly scheduled status conference with
the Court, the Government raised the subpoena issue. The Court
established a briefing scheduling, pursuant to which the United States
filed its Motion to Quash. All subpoenas were stayed pending resolution
of that Motion.
II. THE PARTIES' FACTUAL ALLEGATIONS*fn5
Mr. Koslowe was a long-time Department of Justice attorney who served
there for 28 years. For the last 22 of those years, he was Special Litigation Counsel*fn6 for the Department in the Federal
Programs Branch of the Civil Division and a member of the Senior
Mr. Koslowe was assigned to work on particularly important, sensitive
and difficult legal disputes by the Civil Division's Assistant and Deputy
Attorneys General, as well as by its Branch Directors. It is clear from
the materials submitted that he handled especially challenging issues and
that he performed his own work. According to Mr. Koslowe, one of his
specialities was defending Justice Department attorneys accused of
violating the rules of professional conduct.
In recognition of his 28 years of service, Mr. Koslowe received from
the Attorney General the John Marshall Award for Outstanding Professional
Achievement by a Litigator and from the President the Presidential Rank
Award of Distinguished Executive for exceptional service to the American
people over an extended period of time.
In the spring or summer of 1995, Mr. Koslowe was assigned, with other
Civil Division lawyers, the task of assisting the Food & Drug
Administration ("FDA") and the Department of Health & Human Services
with the Youth Tobacco. Rulemaking, in which FDA proposed to assert its
jurisdiction over the tobacco. industry. See Regulations Restricting the Sale and Distribution of Cigarettes
and Smokeless Tobacco. to Protect Children and Adolescents, 60 Fed.
Reg. 41,314 (Aug. 11, 1995) (notice of proposed rulemaking); 61 Fed. Reg.
44,396 (Aug. 28, 1996) (final regulations). It is undisputed that Mr.
Koslowe worked extremely closely with the then-FDA Commissioner, Dr.
David Kessler,*fn7 and that his assignment was "to help protect the
administrative record from subsequent challenge in court." Koslowe Decl.
¶ 16. Mr. Koslowe advised the FDA on legal issues relating to the
compilation of the administrative record, helped draft portions of the
FDA's basis-and-purpose statement, and helped respond to public comments.
He also reviewed notes of interviews with confidential informants to the
FDA, as well as other privileged and confidential documents that were
used and/or relied upon during the rulemaking.
On August 10, 1995, the day before actual publication of the FDA's
notice of proposed rulemaking in the Federal Register,
litigation was commenced against the FDA in North Carolina challenging
its actions. See Coyne Beahm, Inc. v. FDA, 966 F. Supp.2d 1374
(M.D.N.C. 1997), rev'd sub nom, Brown & Williamson Tobacco.
Corp. v. FDA, 153 F.3d 155 (4th Cir. 1998), aff'd,
529 U.S. 120 (2000); and its companion case, American Advertising
Federation v. Kessler, 966 F. Supp.2d 1374 (M.D.N.C. 1997),
rev'd sub nom, Brown & Williamson Tobacco. Corp. v. FDA,
153 F.3d 155 (4th Cir. 1998), aff'd, 529 U.S. 120 (2000) (collectively the "FDA
Litigation"). In addition to challenging the legal basis for the FDA's
assertion of jurisdiction over the tobacco. industry, the defendants in
those two cases argued that the rulemaking was invalid under the
Administrative Procedure Act, 5 U.S.C. § 701, et seq.,
because the FDA relied upon documents that were not included in the
public administrative record.
The time records submitted by Mr. Koslowe to his superiors at DOJ
indicate that he worked a total of 382 hours on the Coyne Beahm
and American Advertising cases. Mr. Koslowe admits submitting
such time statements but vigorously denies that he ever actually worked
on the FDA tobacco. Litigation. Instead, he says that to the best of his
recollection, he allocated the time he worked on the Youth Tobacco
Rulemaking "as a matter of administrative convenience to the `case names'
and `case numbers' for the litigation, even though [he] did not work on
the litigation personally and substantially." U.S. Ex. 8, 12/30/04 ltr.,
Koslowe to Eubanks at 2.
In 1997, Mr. Koslowe also submitted time records documenting his
participation in DOJ's analysis of a June 1997 version of what ultimately
became the Master Settlement Agreement ("MSA") between the states and the
tobacco. industry.*fn8 As part of that analysis, Mr. Koslowe and Anne Weismann, an Assistant Director in the Civil
Division, wrote a September 12, 1997 memorandum entitled "Access to
Privileged Tobacco. Company Documents." U.S. in camera Ex. 9,
9/12/97 mem., Koslowe & Weismann to Grindder.*fn9 Mr. Koslowe's
Id. at 11.
In early 2000, the Deputy Attorney General, pursuant to Case Management
Order #6 in this case, wrote all DOJ component heads requesting that they
identify any tobacco-related materials in their offices. Mr. Koslowe
identified numerous responsive documents in his office, including various
litigation-related documents that the United States had withheld from
production on grounds of privilege. U.S. in camera Ex. 1,
2/14/00 mem., Kovakas to Honigberg at 2-3. These materials included
[text redacted] Id. at 3. These materials included: [text redacted]
Id. at 2. In 2001, Mr. Koslowe left the Department of Justice
to join Shearman & Sterling.
III. MOTION TO QUASH
A. Courts Have Substantial Discretion to Grant or Deny
Discovery in Proceedings to Disqualify Counsel
The case law is clear that courts have broad discretion to decide
whether to grant any formal discovery in disqualification proceedings
and, if so, how much. Lefrak v. Arabian American Oil Co.,
527 F.2d 1136, 1140 (2d Cir. 1975). As the Second Circuit noted in
Certainly the method of conducting the inquiry is
within the discretion of the judge charged with
the responsibility of supervision. . . . Whether
discovery is permissible is clearly within [her]
discretion in any event.
Id; see also The European Community v. RJR Nabisco, Inc.,
134 F. Supp.2d 297, 309 (E.D.N.Y. 2001) ("The quantum of discovery required
in connection with such a [disqualification] motion is left to the
discretion of the trial judge."). Moreover, the courts have focused on
the need for an adequate record for appellate review, rather than any
precise form or scope of discovery. See General Mill Supply Co. v.
SCA Services, Inc., 697 F.2d 704, 710 (6th Cir. 1982) (stating that
"an evidentiary hearing need not occur in every such [disqualification]
motion," but that the factual inquiry must be conducted in a manner which
will allow appellate review); McKinney v. McMeans, 147 F. Supp.2d 898,
900 (W.D. Tenn. 2001) (finding that "although it need not hold an
evidentiary hearing, the court must satisfy itself that an adequate
evidentiary record exists permitting later appellate review").
In short, as long as the trial court concludes that there will be an
adequate record for appellate review, whether in the form of affidavits,
documents, or submissions in camera, the court may in its
discretion decide whether discovery is either warranted or inappropriate.
Indeed, as far back as 1869, the Supreme Court ruled that in proceedings
charging unprofessional conduct, the manner in which the proceeding was
to be conducted, "so that it was without oppression or unfairness, was a
matter of judicial regulation." Randall v. Brigham,
74 U.S. 523, 540 (1869).
In this case, Koslowe, et al., have had the benefit of
informal discovery, i.e., discussions with other attorneys in the Justice
Department who served at the same time that Mr. Koslowe did, data and
records provided by the Justice Department, and information contained in
Mr. Koslowe's own files and memory. The various declarations, documents,
and in camera submissions provided by the Government and
Koslowe, et al., will unquestionably be sufficient "to allow
Given the fact that this massive litigation is less than six months
from trial, opening discovery on this satellite issue would unduly divert all parties from what must be their central focus
getting prepared for the September 13, 2004 trial.
B. The Discovery Sought Will Not Be Material to Resolving The
Koslowe, et al., in their discovery requests seek information
which is either irrelevant to the issues which must be decided in the
Motion to Disqualify, is plainly privileged, or is already in their
possession, as the following three examples demonstrate:
1. Koslowe, et al., have subpoenaed the testimony of four
government attorneys who also worked on the FDA Litigation, arguing that
they might testify that Mr. Koslowe had not worked with them in that
Litigation. Whether they would so testify is pure speculation. One of
them, Mr. Kell, has already given a declaration to the contrary. Another,
Ms. Autor, has indicated that she does not remember Mr. Koslowe being
involved in the litigation, but admits she "could be mistaken." U.S. Ex.
13, 1/20/04 e-mail, Autor to Koslowe. Obviously, memories fade over time
and documentary evidence is more reliable. Questions that Koslowe,
et al., wish to pose to Mr. Kell as to whether Mr. Koslowe
appeared at any hearings in the Tobacco. Litigation in North Carolina or
exactly what type of work Mr. Koslowe performed on that Litigation cannot
refute his own time reports of the 382 hours he spent on the Litigation. 2. Koslowe, et al., seek various kinds of information about
the two challenges raised to the FDA regulations in the Middle District
of North Carolina. However, they have already received the court filings
they requested directly from the Clerk of Court's office in the Middle
District of North Carolina.*fn10 In addition to the public court files,
Koslowe, et al., also seek the Justice Department's "entire
litigation files from the Middle District of North Carolina litigation."
There can be little doubt that those files are privileged and protected
by the attorney work product doctrine.
3. Koslowe, et al., have requested additional categories of
documents from the Department, but have failed to demonstrate the need
for them. Whether other DOJ attorneys did or did not work on the FDA
Tobacco. Litigation cannot undercut or contradict the fact that Mr.
Koslowe himself reported that he spent 382 hours on that Litigation.
Similarly, the request for compilation of all time reported by other DOJ
attorneys attributed to both the FDA Rulemaking and the FDA Litigation
cannot prove what hours Mr. Koslowe himself did, or did not, spend on the
Koslowe, et al., argue that if there are significant
differences in the number of hours that Mr. Koslowe worked on the
Litigation and the number of hours that other DOJ attorneys worked on the Litigation, it would help show that Mr. Koslowe spent those
hours on the FDA Youth Tobacco. Rulemaking rather than the FDA
Litigation. This is sheer speculation and would not logically prove
anything. Moreover, because Mr. Koslowe admittedly worked alone reviewing
confidential FDA records, the hours spent by other DOJ attorneys on the
Litigation would not be probative of what work Mr. Koslowe was doing and
how much, on either the Rulemaking or the Litigation.
In short, what work other DOJ attorneys performed on either the Youth
Tobacco. Rulemaking or the FDA Litigation is simply unrelated to the
relevant issue in the Motion to Disqualify: whether Mr. Koslowe
participated "personally and substantially" in the Litigation.
Finally, Koslowe, et al., seek five years' worth of original
time sheets from 1994 to 1998. Even if those time sheets still exist (and
they may well not), there is certainly no proffer as to what they might
show, and there is no proffer that they would contradict Mr. Koslowe's
own personal report of the 382 hours he spent on the FDA Litigation.
In short, it is clear that there is no logical connection between the
justifications offered for the discovery sought and the issues which are
material to resolving the Motion to Disqualify. What is clear is that
Koslowe, et al., are intent on engaging in a diversionary fishing expedition based on sheer speculation. This
the Court is not going to permit.*fn11
C. The Subpoenas Must Be Quashed for Violation of the Federal
Rules of Civil Procedure, the Local Rules of the United States District
Court for the District of Columbia, and Order #51
Fed.R.Civ.P. 30(b)(1) requires that "reasonable notice" be provided
to any witness served with a subpoena. The witnesses in this case
busy Department of Justice attorneys with other professional and personal
commitments were served with subpoenas three business days, or
less, before the scheduled depositions. Needless to say, notice of three
business days, especially to busy litigators who need to prepare to
testify about events occurring six to nine years previously, does not
constitute "reasonable notice." The violation of Rule 30(b)(1) by
Koslowe, et al., is clear.*fn12 Fed.R.Civ.P. 45(b)(1) requires prior notice before issuing and
signing document production subpoenas. No such prior notice was provided.
The violation of Rule 45 by Koslowe, et al., is clear.
LCvR 30.1 requires five business days' notice for a deposition. As
earlier noted, only three business days' notice, or less, was given in
this case. The violation of Local Rule 30.1 by Koslowe, et al.,
Order #51 requires a 30-day consultation period and 14 days' notice
before a deposition is scheduled. No consultation whatsoever was held
and, as noted, the depositions were noticed only three business days, or
less, in advance of the actual scheduled date. The violation of Order #51 by Koslowe, et
al., is clear.*fn13
Order #197, later redesignated as Order #204, requires that all fact
witness depositions are to be concluded by July 1, 2002. Under that
Order, any fact witness deposition scheduled after July 1, 2002 may be
conducted only with the permission of the Court after the filing of
motions. No motion for leave to conduct a fact witness deposition after
July 1, 2002, regarding the Motion to Disqualify, has ever been filed. The violation of Order #197 by
Koslowe, et al., is clear.
Finally, Fed.R.Civ.P. 45(b)(1) requires personal service of
deposition subpoenas. Here, several of the deposition subpoenas were
simply left at the mail room at DOJ or with support staff, but were not
personally served on Deborah Autor, Douglas Letter, or Gerald Kell. The
violation of Rule 45(b)(1) by Koslowe, et al., is clear.
These flagrant violations of the Federal Rules, this Court's Local
Rules, and this Court's Case Management Orders to say nothing of
common courtesy and civility is astounding. With full knowledge
that the subpoenas being served were in violation of the rules and orders
already cited, counsel for Mr. Koslowe, et al., purposefully
and deliberately served patently faulty subpoenas on four busy DOJ
attorneys with a mere three, or less, business days' of advance notice.
The failure to give Government counsel, with whom counsel for Koslowe,
et al., was in constant contact, any advance notice of the
service of the subpoenas is particularly stunning.
* * *
For all the foregoing reasons, the Court concludes that the Motion to
Quash will be granted. IV. MOTION TO DISQUALIFY
A. The Applicable Law
The District of Columbia Rules of Professional Conduct have been
adopted by this Court and are applicable to all lawyers who handle
litigation in this District. LCvR 83.15(a). District of Columbia
Rule 1.11(a) provides:
A lawyer shall not accept other employment in
connection with a matter which is the same as, or
substantially related to, a matter in which the
counsel participated personally and substantially
as a public official or employee. Such
participation includes acting on the merits of a
matter in a judicial or other adjudicatory
This rule of professional conduct, modeled in part on the ABA's Model
Rule of Professional Conduct 1.11, is often referred to as the "revolving
door" or "side-switching" rule. See Brown v. D.C. Board of Zoning
Adjustment, 486 A.2d 37
, 43 (D.C. 1984) (en banc)
("Brown") (describing the "revolving door" context as one in
which "a government attorney who leaves to join a private firm and begins
to represent clients against, or before an agency of, the former
All parties agree that the major authority in this jurisdiction for
interpretation of D.C. Rule 1.11 is the comprehensive opinion of the D.C.
Court of Appeals in Brown.*fn14 In that case, the Court of Appeals explained that it "must be
especially careful" in cases involving former Government attorneys who
have allegedly violated Rule 1.11(a) for the following reasons:
First, because government attorneys may have had
access to more kinds of information in connection
with the prior representations than private
attorneys typically do, there is a greater
potential for misuse of information
including information that is not necessarily
confidential in nature . . . in the
revolving door context. Second, the public is
generally more concerned about government
improprieties than about private improprieties.
Thus, the appearance problem is more severe
because the public is likely to be more critical
of this potential misuse of information.
486 A.2d at 49.
For those reasons, the Court of Appeals held:
[I]n cases where the complainant's evidence shows
that the factual contexts of the two (or more)
transactions overlap in such a way that a
reasonable person could infer that the former
government attorney may have had access to
information legally relevant to, or otherwise
useful in, the subsequent representation, we
conclude that the complainant will have
established a prima facie showing that the
transactions are substantially related. The burden
of producing evidence that no ethical impropriety
has occurred will then shift to the former
government attorney, who must rebut complainant's
showing by demonstrating that he or she could not
have gained access to information during the first
representation that might be useful in the later
representation. Absent sufficient rebuttal, the complainant will have
carried the burden of persuasion as the moving
Id., 486 A.2d at 49-50.
Finally, the Court of Appeals concluded with the following admonition:
It is important to stress that the attorney cannot
meet this rebuttal burden simply by
claiming that no useful information was, in fact,
received in the first matter. If the factfinder is
persuaded that two matters are substantially
related i.e., that it is reasonable to
infer counsel may have received information during
the first representation that might be useful to
the second there arises a conclusive
inference that useful information was, in fact,
Id., 486 A.2d at 50 (emphasis added).
Since deciding Brown, the Court of Appeals has further
cautioned that "[t]he `substantially related' test . . . is meant to
induce a former government lawyer considering a representation to err
well on the side of caution." In re Sofaer, 728 A.2d 625,
628 (D.C. 1999).
Keeping in mind these principles, the Court will now address the
1. Did Mr. Koslowe participate "personally and substantially" in any
2. If so, is that matter "substantially related" to the pending
litigation over the BATAS privilege logs? B. The Legal Work that Mr. Koslowe Performed on Tobacco-Related
Issues During 1995-1996 Constitutes a "Matter" Within the Meaning
of Rule 1.11
The parties agree that any work by a government lawyer defending a
legal challenge to an administrative regulation constitutes a "matter"
for purposes of disqualification, and that the term "matter" excludes
administrative rulemakings. See Rule 11.1(g), Comment 3,
limiting "matter" to "matters involving a specific party or parties."
Thus, while Mr. Koslowe's work on the Youth Tobacco. Rulemaking is not
deemed a "matter," his work on the FDA Tobacco. Litigation is.
In this instance, we have clear record evidence that Mr. Koslowe
reported working 382 hours on the FDA Litigation that challenged the FDA
Youth Tobacco. Rulemaking. Mr. Koslowe now denies the accuracy of those
records, which he himself submitted. He claims that somehow
the hours he reported were improperly allocated to the Litigation
when in fact he spent those hours on the FDA Youth Tobacco. Rulemaking.
It is, of course, irrelevant whether, as Mr. Koslowe argues, he ever
entered an appearance or formally represented the federal defendants in
that Litigation. He may well not have. The issue, of course, is not
whether he entered an appearance, but whether he worked personally and
substantially in any capacity on the Litigation.
It is very difficult to credit this explanation. After 28 years of
working at the Department of Justice, it is hard to believe that Mr. Koslowe would not know how to accurately fill out
a time sheet and allocate hours to the proper descriptive activity
category. Moreover, it is significant that his report of 245 hours spent
on the Coyne Beahm case began with 8 hours of work on August 9,
1995, the day before that case was filed, and his report of 137 hours
spent on the American Advertising Federation case began with 8
hours of work on August 10, 1995, the same day that case was filed.
Finally, it is particularly significant that Mr. Koslowe reported
spending 83 hours in the Litigation after the final Regulations
were issued in August 1996; he offers no explanation of how those 83
hours could have been devoted to anything but the Litigation.
Koslowe, et al., seem to be arguing that Mr. Koslowe
attributed all the time he spent on the FDA Rulemaking to the DOJ
category for the FDA Litigation because the Rulemaking was challenged in
that Litigation. Again, it is difficult to credit such an explanation
from a 28-year veteran of DOJ. More substantively, he seems to be arguing
that the DOJ categories would have permitted such allocation.
However, he admits, and the in camera documents demonstrate,
that the precise reason he was assigned to work on the Rulemaking was to
fend off the litigation challenges that were anticipated. According to privileged Government records, he and his superior, George
Phillips, Acting Deputy Assistant Attorney General, believed
U.S. in camera Ex. 4, circa 12/14/95 "Memo to File," footer
"KOSLLTR."*fn15 These DOJ concerns about the difficulties in defending
the FDA administrative record were reiterated in a May 1996 document
entitled "Major Tobacco. Litigation Issues," as well as a draft letter
from Mr. Phillips to the FDA Chief Counsel Margaret Porter. U.S. in
camera Ex. 10; U.S. in camera Ex. 6.
There is no question, and Mr. Koslowe does not deny, that he worked
closely with Dr. Kessler and personally reviewed substantial amounts of
confidential government information in connection with defending the
Rulemaking in the FDA Litigation. A draft letter from Mr. Phillips to the
Chief Counsel at the FDA indicates that Mr. Koslowe [text
redacted] U.S. in camera Ex. 7, undated draft letter (circa Dec.
1995), Phillips to Porter, cc. Blumberg, Koslowe and Thiroff, footer
"KOSLOWE." The letter refers to Mr. Koslowe having personally reviewed
In fact, the concerns of the Department were confirmed when both the
initial complaint and the amended complaint in the North Carolina FDA
Litigation did in fact challenge the adequacy of the FDA's administrative
record. Thus, it is clear that the high level review, analysis and advice
that Mr. Koslowe provided to FDA Commissioner Kessler were all directly
related to, and inextricably intertwined with, defense of the FDA
Litigation which the Department of Justice firmly, and accurately,
predicted would be forthcoming, after the proposed Youth Tobacco
Regulations were issued.
Consequently, it is clear that whatever work Mr. Koslowe performed on
the FDA Rulemaking was intimately tied to the ensuing litigation which
DOJ was virtually certain would be brought. When the lawsuit was filed,
the day before the FDA's Notice of Proposed Rulemaking was actually
published in the Federal Register, it did indeed attack the
adequacy of the administrative record: FDA's assertion of jurisdiction relies upon
materials not in the public administrative record,
and thereby deprives plaintiffs of their
fundamental right to provide meaningful comment
and, thus, violates the Administrative Procedure
Act and the Fifth Amendment of the U.S.
Constitution. For example, FDA's assertion of
jurisdiction is based on facts and data that have
not been disclosed to the plaintiffs.
First Am. Compl. ¶ 82, U.S. Ex. 25. Therefore, even though
rulemakings are not ordinarily deemed "matters" within the scope of
Rule 1.11, the specific nature of Mr. Koslowe's work on the FDA Rulemaking was
directly connected to the Litigation.*fn16
Moreover, the fact that Mr. Koslowe continued to report hours worked on
the litigation (he reported an additional 62 hours on the litigation in
December 1995) is further corroboration of his substantial and personal
participation in the FDA Litigation, not just the Rulemaking.
It is true that the FDA Litigation ultimately narrowed its focus to the
single core issue of the FDA's rulemaking authority over tobacco.
However, that does not mean that DOJ, as a zealous defender of the FDA's
interests, would not have been preparing to adequately respond to
all arguments that plaintiffs might raise in the North Carolina
Litigation, especially to those arguments which they had explicitly
presented in their initial and amended complaints. In sum, the record demonstrates that the work Mr. Koslowe personally
and substantially performed on the FDA Youth Tobacco. Rulemaking was an
integral part of preparing a defense to the FDA Litigation which DOJ knew
was imminent, and in particular to addressing the legal weakness that DOJ
perceived in the FDA's Rulemaking proceedings. Whether one considers only
the 83 hours Mr. Koslowe recorded working on the FDA Litigation
after issuance of the final FDA regulations in August 1996, or
whether one considers the additional 166 hours Mr. Koslowe recorded
working on matters that were unquestionably part of the FDA
Litigation,*fn17 or whether one considers the entire 382 hours that Mr.
Koslowe recorded working on the FDA Litigation, it is clear that all of
his advice, analysis, and review were for the sole purpose of defending
the FDA against the challenge raised to its administrative record in the
Litigation. Mr. Koslowe was indeed "part of the litigation team defending
the FDA's rulemaking" in that Litigation. U.S. Ex. 19, 1/20/04 Kell Decl.
As such, he participated personally and substantially in a "matter" as
defined in D.C. Rule 1.11. C. Mr. Koslowe's Substantial and Personal Involvement in the
FDA Rulemaking Litigation Is Substantially Related to the Litigation over
the BATAS Privilege Logs
The District of Columbia Court of Appeals in Brown, set forth
the test for whether two matters are "substantially related" for purposes
of the side-switching prohibition in Rule 1.11. That test is whether it
can "reasonably be said that during the former representation, the
attorney might have acquired information related to the subject matter of
the subsequent representation." Id., 486 A.2d at 48 (quoting
Cannon v. U.S. Acoustics Corp., 398 F. Supp. 209, 233 (N.D.
Ill. 1975), affd, in relevant part, 532 F.2d 1118 (7th Cir.
1976)). Elaborating on this test, the court went on to say that the
revolving door rule
is designed to address "at least a reasonable
possibility that some specifically identifiable
impropriety" would occur [quoting Woods v.
Covington County Bank, 537 F.2d 804, 813 (5th
Cir. 1976)] . . . only if specific information (as
distinguished from general agency expertise or
contacts) that a former government attorney
may have had access to in one matter is
likely to be useful in a subsequent
matter, will there be a reasonable possibility of
the particular improprieties that [D.C. Rule 1.11]
is intended to forestall.
486 A.2d at 48-49 (emphasis added).
The District of Columbia Court of Appeals went out of its way to point
out that the attorney whose disqualification is being sought cannot meet
his rebuttal burden by simply claiming that in fact he received no useful
information while working on the government matter. The court stated that [i] f the factfinder is persuaded that two matters
are substantially related i.e., that it is
reasonable to infer counsel may have received
information during the first representation that
might be useful to the second there arises
a conclusive inference that useful
information was, in fact, received.
486 A.2d at 50 (emphasis added)(citations omitted).
On the facts presented in this Motion, it is clearly reasonable to
infer that Mr. Koslowe, in the course of providing extensive and extended
legal representation to the FDA,*fn18 "may have received information"
that might be useful in defending BATAS' privilege logs. Mr. Koslowe does
not deny that during that representation, he had access to numerous
privileged and confidential government documents, including memoranda
memorializing informant interviews and documents produced by informants.
In terms of whether the information received during his "first
representation" (defense of the FDA Litigation) might be useful in now
representing BATAS, the usefulness of that access, the United States
points out in its Motion that it may well argue during the briefing of
BATAS' privilege claims that because of its "substantial need" for the
documents in issue, any assertion of qualified protection, such as work
product, may be overcome under Fed.R.Civ.P. 26(b)(3). The Government
is correct that the extensive knowledge that Mr. Koslowe acquired during
the course of his participation in the FDA Litigation will assist him in
fashioning strategy and arguments to rebut the Government's "substantial
need" claim. For example, the Government may well claim substantial need
for a particular privileged BATAS document; in response, Mr. Koslowe may
be able to identify resources at the Government's command which
demonstrate the absence of substantial need.
It is no response at all to argue as Mr. Koslowe, et al., do
that the risk that he would use confidential information in such a manner
is "virtually non-existent, since in order to so do, he would have to
disclose that confidential information to the Court, thereby exposing
himself to sanctions." Koslowe, et al., Opp. at 37. Under
District of Columbia Rule 1.11 the Government is not left to the tender
mercies of Mr. Koslowe's conscience. Disciplinary rules exist to protect
former clients from the risk of questionable ethical decisions by their
former lawyer. If we could safely rely on the ethical judgment of all
counsel, we would have no need for a Code of Professional Conduct or
Mr. Koslowe also argues that "it is not reasonable to infer that [he]
had access to confidential information in the course of the prior
matter." Id. at 36. That statement flies in the face of
reality. Mr. Koslowe does not deny that he spent several days with the
FDA Commissioner carefully reviewing confidential documents. The Government also argues that because it may wish to raise the
crime-fraud exception in order to overcome privileges that BATAS may
assert, Mr. Koslowe's access to confidential client information which he
acquired while representing the United States would clearly benefit
BATAS, his current client. Again, Koslowe, et al., respond that
even if he had such knowledge, it would only be useful "if the Government
makes unfounded privilege challenges." Id. at 38
(emphasis in original).
If it is reasonable to infer that Mr. Koslowe obtained such
confidential information in the course of personal and substantial work
on the FDA Litigation, then he is not permitted to use that information
on behalf of BATAS whether the Government's privilege challenges are
founded or unfounded. Mr. Koslowe's insights into the strengths and
weaknesses of the Government's evidence regarding alleged tobacco. fraud
is exactly the kind of "information [received during the first
representation] . . . that might be useful to the second
[representation]." Brown, 486 A.2d at 50. Finally, it must be
remembered that there is a joint defense agreement which may make Mr.
Koslowe's strategic advice particularly valuable.
Based on the specific facts of this case, the personal and substantial
work that Mr. Koslowe did on the FDA Litigation, and the type of issues
that BATAS will be raising in its limited intervention, there is no
question that "it is reasonable to infer counsel may have received information during the first
representation that might be useful to the second." Brown, 486
A.2d at 50. Once that conclusion is reached, the "burden of producing
evidence that no ethical impropriety occurred will then shift to the
former government attorney." Id. In other words, "there arises
a conclusive inference that useful information was, in fact, received."
Id. In this case, Koslowe, et al., have failed to
rebut that conclusive inference, because they have failed to demonstrate
that Mr. Koslowe "could not have gained access to information during the
first representation that might be useful in the later representation."
D. Disqualification Is an Appropriate Remedy
This Court is well aware that disqualification of counsel is "a drastic
measure which courts should hesitate to impose except when absolutely
necessary," Freeman v. Chicago Musical Instrument Co.,
689 F.2d 715, 721 (7th Cir. 1982), and that each case must
be considered on its own merits and in its own particular factual
context, Silver Chrysler-Plymouth, Inc. v. Chrysler Motor Corp.,
518 F.2d 751, 754 (2d Cir. 1975).
There is no question that "a party's choice of counsel is entitled to
substantial deference" under our system of justice. Indeed, it is one of
our most cherished privileges. For that reason permitting a litigant to
retain its chosen counsel is a vitally important interest to be evaluated
against disqualification and violation of ethical rules. Moreover, courts have recognized
the sad reality that disqualification motions have become increasingly
popular and must be viewed "with cautious scrutiny" given their use for
"purely strategic purposes." Laker Airways Ltd, v. Pan American
World Airlines, 103 F.R.D. 22, 27-28 (1984).
For the following reasons, the Court concludes, after weighing the
different interests enumerated by Judge Green in Laker Airways,
that disqualification is in fact the only appropriate remedy in this
case. First, Mr. Koslowe, on the basis of his own time records, worked a
total of 382 hours on the FDA Litigation. In the course of that
representation, upon which he worked personally and substantially, he had
extensive access to confidential information that could be of use to him
in representing BATAS in its efforts to insulate certain documents from
discovery by the Government. Work performed on the FDA Litigation
constitutes a "matter" within the meaning of D.C. Rule 1.11. Thus, it is
reasonable to infer that knowledge he gained during the course of that
work could be useful to him in his representation of BATAS, in clear
violation of the disciplinary rules of this jurisdiction.
Second, the Court concludes that the Government has not filed this
Motion as a diversionary litigation tactic. Quite the contrary.*fn19 In
fact, the Government actually stands to win a Pyrrhic victory by prevailing on the Motion to Disqualify. The
Government has been attempting to get the BATAS documents for close to
two years, and BATAS has fought all those attempts. By obtaining the
disqualification of BATAS' present counsel, the Government's efforts to
obtain the documents in question will only be further delayed as BATAS
seeks new counsel, obtains new counsel, and then educates that new
counsel, as it must, about the issues in dispute.*fn20
Third, the District of Columbia Court of Appeals recognized that "the
public is generally more concerned about government improprieties than
about private improprieties. Thus, the appearance problem is more severe
because the public is likely to be more critical of this potential misuse
of information." Brown, 486 A.2d at 49. As this case has
already been the subject of extensive attention in the media,*fn21 as
one of the largest civil cases ever brought in our federal system, any alleged ethical
violation is likely to come under particularly acute scrutiny given the
public interest in both the subject matter of the case and the huge
amount of resources devoted to the litigation.
Finally, as the court made clear in Brown, "where there is a
close question as to whether particular confidences of the former client
will be pertinent to the instant case, an attorney should be disqualified
to avoid the appearance if not the actuality of evil." Id., 486
A.2d at 43-44 (quoting U.S. v. Standard Oil, 136 F. Supp. 345,
364 (S.D.N.Y. 1995)). In addition, any doubts are to "be resolved in
favor of disqualification." Westinghouse Electric Corp. v. Gulf Oil
Corp., 588 F.2d 221, 225 (7th Cir. 1978).
In this case, the Court has no such "doubts." Mr. Koslowe spent 382
hours working on a "matter" which was substantially related to the issues
he would be handling in the BATAS privilege litigation. By his own
admission, he had sustained access to many confidential and privileged
government documents. This is precisely the scenario addressed by D.C.
Rule 1.11. This Court has an obligation under its own Code of Judicial
Conduct to ensure that the disciplinary rules of the legal profession are
complied with. See Code of Conduct for United States Judges,
Canon 3B(3). Accordingly, the Motion for Disqualification of Neil H. Koslowe will be
E. Disqualification of Mr. Koslowe Is Imputed to Shearman
District of Columbia Rule 1.11(b) provides that the disqualification of
a former government attorney because of his personal and substantial
participation in a matter requires the concomitant disqualification of
the law firm by which he has become employed. Imputed disqualification
may be avoided if the disqualified lawyer's present law firm has followed
the provisions of Rule 1.11(c) and (d). Those paragraphs of
Rule 1.11 require that the individually disqualified attorney notify the
former government agency and all parties to the case of his or her personal
disqualification, and that he will be screened off from any participation
in the currently pending matter. Such notice of personal disqualification
and screening must be issued before the current representation
begins. See D.C. Bar Legal Ethics Committee Ethics Opinion 279
(1998); In re Abestos Cases, 514 F. Supp. 914 (E.D. Va. 1981).
There has been no compliance with Rule 1.11(c) and (d) in this case. No
notices have been sent to the Department of Justice or any parties to
this case that Mr. Koslowe is personally disqualified and that he will be
screened off from any participation in litigation over the BATAS
documents. Since the opposition brief of Koslowe, et al., does
not address the imputation issue, the Court concludes that it is not seriously
contested.*fn22 Therefore, the Motion to Disqualify Shearman &
Sterling will be granted.
* * * *
For all the foregoing reasons, the Motion to Quash is granted
and the Motion to Disqualify is granted.