Dumbo Moving & Storage, Inc. v. Piece of Cake Moving & Storage LLC
- Edgardo Ramos
- 1:22-cv-05138
- U.S. District Court · Southern District of New York
- 9
In Dumbo Moving v. Piece of Cake, Judge Ramos denied Dumbo’s motion to disqualify Rubin and Morrison Cohen after finding an effective ethical wall protected confidential information.
Dumbo’s request to remove Steven Rubin and Morrison Cohen LLP from the case was unsuccessful. The motion was found moot as to Rubin because he had left Morrison Cohen, and the court denied disqualification of Morrison Cohen, allowing the firm to continue representing the defendants it represented.
What happened
Dumbo Moving & Storage, Inc. v. Piece of Cake Moving & Storage LLC concerns Dumbo’s request to remove attorney Steven Rubin and Morrison Cohen LLP as counsel for opposing defendants. Dumbo alleged that the defendants improperly copied and took its software and related trade secrets.
Rubin had previously worked for Dumbo on this litigation, including its litigation strategy, complaint, software copyright registration, and settlement discussions. He later joined Morrison Cohen, which represented most of the defendants. Dumbo argued that Rubin’s prior work created a conflict and that Morrison Cohen should also be removed.
Judge Edgardo Ramos found the request moot as to Rubin because he had left Morrison Cohen. Judge Ramos denied the motion to disqualify Morrison Cohen, concluding that the firm’s ethical wall, declarations, and file audits showed that Dumbo’s confidential information had not been shared and that removing the firm would be unduly harmful.
The detailed version
- Dumbo Moving & Storage, Inc. v. Piece of Cake Moving & Storage LLC · No. 1:22-cv-05138
- Edgardo Ramos
- June 20, 2024
Background
Dumbo Moving & Storage, Inc. alleged that Piece of Cake Moving & Storage LLC, Simply Moving LLC, Simply Moving & Storage LLC, and individual defendants Vojin Popovic, Stefan Marcali, and Volodymyr Plokhykh improperly reproduced and misappropriated Dumbo’s proprietary software and related trade secrets.
Dumbo moved to disqualify attorney Steven Rubin and Morrison Cohen LLP from representing the defendants. Rubin had served as counsel for Dumbo in connection with this litigation from May 2022 through February 2023. The opinion states that he participated in discussions about Dumbo’s litigation strategy, commented on a draft complaint, helped prepare a copyright registration and response to a copyright examiner, worked on an amended complaint, assisted with settlement negotiations, and received communications containing legal analysis and advice.
Rubin joined Morrison Cohen in June 2023. Morrison Cohen represented the defendants in this case, except for Plokhykh. After Rubin informed the firm in August 2023 that he had previously provided legal services to Dumbo, Morrison Cohen created an ethical wall within forty-eight hours. An ethical wall is a set of restrictions designed to prevent a lawyer from accessing or sharing information about a matter. The restrictions barred Rubin from accessing the case’s electronic and paper files and barred lawyers working on the case from discussing it with him. Rubin left Morrison Cohen on December 31, 2023. Dumbo filed its disqualification motion on January 10, 2024.
Legal standard
The court explained that New York’s professional-conduct rules generally prohibit a lawyer from representing a new client against a former client in the same or a substantially related matter when the interests are materially adverse, unless the former client gives written consent. But violating a professional rule does not automatically require disqualification. The court’s main concern is protecting the fairness and integrity of the litigation, while balancing a client’s choice of counsel against professional standards.
For a successive-representation disqualification motion, the relevant considerations are whether the moving party was the lawyer’s former client, whether the prior and current matters are substantially related, and whether the lawyer had access to, or was likely to have accessed, relevant confidential information.
Court’s analysis
As to Rubin, the court found the motion moot because Rubin no longer had any affiliation with Morrison Cohen.
As to Morrison Cohen, the court assumed, for purposes of its analysis, that Rubin would have been disqualified from representing the defendants. Ordinarily, a lawyer’s conflict is presumed to extend to the lawyer’s firm because lawyers at the same firm are presumed to share client confidences. The court held, however, that the defendants rebutted that presumption by showing that Morrison Cohen established and maintained an effective ethical wall.
The court relied on several facts: the wall was created within forty-eight hours after the firm learned of Rubin’s prior relationship with Dumbo; Rubin did not work on the case at Morrison Cohen; declarations from Rubin and the lawyers who worked on the case stated that Dumbo’s information and materials were not shared; and electronic audits showed that Rubin had never created, viewed, deleted, or uploaded materials related to the case. The court also held that the delay between Rubin’s hiring and the wall’s creation did not by itself make the wall ineffective because the wall was implemented promptly after the conflict was discovered.
The court found no reason to doubt the declarations that no confidential information had been shared. It concluded that there was no meaningful indication that the litigation had been tainted. Given Morrison Cohen’s substantial work on the case and the costs of requiring the defendants to obtain new counsel, the court found that disqualification would be unduly harmful.
Disposition
The court denied Dumbo’s motion to disqualify counsel. The Clerk of Court was directed to terminate the motion.
Read the full 9-page opinion on CourtListener, the free public archive maintained by the Free Law Project.