Andrews v. Verner

Background

Peter Andrews and several limited liability companies he controlled were engaged in arbitration with Andrews’s former business partner, Gregory Palmer, and Rockingham Capital Group LLC, which the opinion says Palmer controlled. The plaintiffs moved for a preliminary injunction—a temporary court order issued before final resolution—preventing Paul W. Verner from appearing as Palmer’s and Rockingham’s counsel in the arbitration. The court held a hearing on February 19, 2020.

Court’s reasoning

The court stated that the plaintiffs had shown a likelihood of success on their New York-law claim seeking Verner’s disqualification. It found evidence of a prior attorney-client relationship because Verner had been general counsel and litigation counsel for some of the plaintiff companies and had represented Andrews personally. The court also found that the former and current representations were adverse and substantially related, based on connections between the arbitration and matters on which Verner had provided legal advice or litigation representation.

The court further found irreparable harm, meaning harm that money damages or later relief could not adequately remedy. It identified the likely use of confidential information and violation of counsel’s duty of loyalty to former clients as the relevant harms.

Ruling

At the hearing, the court granted the plaintiffs’ motion for a preliminary injunction. For the duration of the action, Verner was enjoined from representing parties adverse to the plaintiffs in American Arbitration Association Case Number 01-19-0002-2485 and from representing Gregory Palmer or Rockingham Capital Group LLC in any capacity concerning the matters at issue in that arbitration. The plaintiffs were not required to post a bond because Verner had not sought one and had not shown that he was likely to suffer harm without one.

Judge Torres also denied Verner’s motion to dismiss and directed the Clerk of Court to terminate that motion at ECF No. 61.