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Ambush v. Engelberg

United States District Court, District of Columbia

October 10, 2017

JOSHUA M. AMBUSH Plaintiff,
v.
MICHAEL ENGELBERG,. Defendants.

          MEMORANDUM OPINION

          Emmet G. Sullivan United States District Judge

         Pending before the Court is plaintiff Joshua Ambush's motion to disqualify Neal Sher and Charles Both as counsel for defendants Eliezer Perr, Yedidiah Perr, American Center for Civil Justice, Inc. ("ACCJ"), American Center for Civil Justice, Religious Liberty and Tolerance, Inc., American Center for Recovery, LLC, American Center for Freedom of Religion, and Neal Sher (collectively, "Center Defendants"). Plaintiff asks the Court to disqualify Mr. Sher and Mr. Both from representing the Center Defendants because of purported conflicts between counsel and their current and former clients in violation of D.C. Rules of Professional Conduct ("D.C. Rules") 1.7 and 1.9. Plaintiff also asserts that disqualification of Mr. Sher is necessary under D.C. Rule 3.7, which prohibits a lawyer from acting as an advocate at a trial in which the lawyer is likely to be a necessary witness. Having carefully considered the parties' written submissions, including supplemental memoranda and responses, plaintiff's motion is DENIED at this stage of the proceedings, without prejudice to being refiled should the circumstances warrant.

         I. BACKGROUND

         On May 30, 1972, three members of a Japanese terrorist organization attacked passengers at the Lod Airport located near Tel Aviv, Israel, killing and wounding dozens of individuals. In 2006, ACCJ, a non-profit organization that "advocate[s] for individuals who have been victims of foreign terrorist attacks, " and Mr. Ambush, an attorney, began working together to seek compensation for various claimants injured as a result of the Lod Airport massacre. Compl. ¶¶ 10, 33, 54-56. As part of his work with ACCJ, Mr. Ambush filed a lawsuit - Franqui v. Syria, No. 06-0734 (RBW) (D.D.C 2006) - on behalf of certain Puerto Rican individuals and estates against those purportedly responsible for the attack. Id. ¶¶ 54-55.

         In the summer of 2008, the governments of Libya and the United States negotiated a treaty pursuant to which Libya, one of the defendants in the Franqui action, agreed to create a settlement fund to compensate victims of state-sponsored terrorism, including victims of the Lod Airport massacre. Id. ¶¶ 61-62. Shortly thereafter, Mr. Ambush and the ACCJ became "embroiled in a dispute as to the management and control of the pending claims before the Department of State and Ambush's compensation, " and ACCJ sued Mr. Ambush in an action captioned American Center for Civil Justice v. Ambush, No 09-233 (PLF) (D.D.C. 2011) ("Attorneys' Fees Litigation"). Id. ¶¶ 69-70, 75. Attorneys Mr. Sher and Mr. Both, among others, represented ACCJ in that proceeding and were involved in negotiating the settlement agreement that resolved that case in 2012. See Pl.'s Mot. to Disqualify Counsel ("Mot."), ECF No. 11 at 1-2; Defs.' Opp. to Pl.'s Mot. to Disqualify Counsel ("Opp."), ECF No. 14 at 2. Along with ACCJ, Michael Engelberg, who was then president of ACCJ, and Eliezer Perr, a member of the board of directors of ACCJ, were parties to the settlement agreement. Compl. Ex. 1.

         The instant suit stems from a purported breach of that settlement agreement. Plaintiff alleges that ACCJ, Dr. Engelberg, Mr. Perr, Mr. Sher, and others interfered with his efforts to seek compensation from his former clients and engaged in other activity in violation of both the settlement agreement and the Racketeering and Corrupt Organizations Act, 18 U.S.C. § 1962. See generally id. Attorney Efrem Schwalb is lead defense counsel in this action and represents all of the Center Defendants. Opp. at 2. On August 26, 2015, Mr. Sher and Mr. Both entered an appearance on behalf of the Center Defendants by signing a motion in which they requested additional time to answer or otherwise respond to the complaint. See ECF No. 9; see also D.C. Local Civil Rule 83.6(a) ("An attorney eligible to appear may enter an appearance in a civil action by signing any pleading described in Fed.R.Civ.P. 7(a)[.]"). In addition to serving as counsel in this case and being a co-defendant, Mr. Sher is ACCJ's General Counsel. Opp. at 2. Dr. Engelberg is represented by separate counsel.

         In this motion, plaintiff seeks to disqualify Mr. Sher and Mr. Both from representing the Center Defendants. According to plaintiff, Mr. Sher's role in this litigation as both counsel and defendant violates D.C. Rule 1.7 because it presents opportunities for "multiple conflicts of interest" to arise between Mr. Sher's own personal interests and the interests of the Center Defendants. Plaintiff also asserts that Mr. Sher and Mr. Both cannot represent the Center Defendants in this litigation because the interests of the Center Defendants are materially adverse to the interests of Dr. Engelberg, who is a former client of Mr. Sher and Mr. Both. Finally, because Mr. Sher was allegedly "involved in the RICO conspiracy" and negotiating the settlement agreement underlying this suit, plaintiff insists that Mr. Sher will be a necessary witness, thus requiring disqualification under D.C. Rule 3.7.

         II. STANDARD OF REVIEW

         A motion to disqualify counsel is committed to the sound discretion of the district court. Palumbo v. Tele-Commc'ns, Inc., 157 F.R.D. 129, 131 (D.D.C. 1994); see also Groper v. Taff, 717 F.2d 1415, 1418 (D.C. Cir. 1983) ("the district court bears responsibility for supervising the members of its bar and its exercise of this supervisory duty is discretionary"). The disqualification of a party's chosen counsel, however, is a "drastic measure that is disfavored by the courts." Konarski v. Donovan, 763 F.Supp.2d 128, 135-36 (D.D.C. 2011) (citations and internal quotation marks omitted). Accordingly, "disqualification motions should be subject to particularly strict judicial scrutiny." Id. Strict scrutiny is warranted because disqualification "negates a client's right to freely choose his counsel, " Headfirst Baseball LLC v. Elwood, 999 F.Supp.2d 199, 204 (D.D.C. 2013) (internal quotation marks and citation omitted), and because such motions may be "used as 'procedural weapons' to advance purely tactical purposes, " In re Rail Freight Fuel Surcharge Antitrust Litig., 965 F.Supp.2d 104, 110 (D.D.C. 2013) (citation omitted).

         The District of Columbia Rules of Professional Conduct govern the practice of law - and the qualification of counsel - in this District. See LCvR 83.15(a) (adopting the Rules of Professional Conduct as adopted by the District of Columbia Court of Appeals); D.C. Rules Prof. Conduct 8.5(b)(1) ("[f]or conduct in connection with a matter pending before a tribunal, the rules to be applied shall be the rules of the jurisdiction in which the tribunal sits"); see also Paul v. Judicial Watch, Inc., 571 F.Supp.2d 17, 20 (D.D.C. 2008). In considering a motion to disqualify counsel, the district court must conduct a two-step inquiry: first, it must determine "whether a violation of an applicable Rule of Professional Conduct has occurred or is occurring, " and second, "if so, whether such violation provides sufficient grounds for disqualification." Headfirst Baseball, 999 F.Supp.2d at 204-05 (citation and internal quotation marks omitted). The D.C. Circuit has cautioned that, even where a violation is found, disqualification is warranted only "rarely" in cases where there is a "serious question as to counsel's ability to act as a zealous and effective advocate for the client" or the "substantial possibility of an unfair advantage to the current client because of counsel's prior representation of the opposing party[.]" Koller By & Through Koller v. Richardson-Merrell Inc., 737 F.2d 1038, 1056 (D.C. Cir. 1984), vacated on other grounds, 472 U.S. 424 (1985).

         III. ANALYSIS

         Plaintiff seeks to disqualify Mr. Sher and Mr. Both based on two primary theories: (1) conflicts of interest under D.C. Rules 1.7 and 1.9; and (2) D.C. Rule 3.7's prohibition against a lawyer acting as an advocate when the lawyer is also a necessary witness. The Court addresses each argument in turn.[1]

         A. ...


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