Arenson Office Furnishings, Inc. v. Kopelman

Background

Arenson sued Michael Kopelman, its former employee, for breach of contract, unjust enrichment, and declaratory relief. The dispute includes Arenson’s allegations that Kopelman violated an eighteen-month non-solicitation provision in his employment agreement after joining a competitor. Arenson also alleges that Kopelman owed approximately $1,120,000 under the compensation arrangement, although the merits of those claims were not decided in this order.

Before the case was removed to federal court, Arenson served Brach Eichler LLC with a subpoena seeking testimony and documents about Kopelman’s alleged violation of the non-solicitation provision. After removal, Arenson moved to disqualify Brach Eichler from representing Kopelman, arguing that Brach Eichler was a necessary witness and that its testimony would prejudice Kopelman.

Kopelman opposed the motion. He argued that John D. Fanburg, the Brach Eichler lawyer involved in the underlying communications, was a corporate attorney rather than Kopelman’s litigation counsel and did not have information adverse to Kopelman. Declarations from Fanburg and Kopelman stated that Fanburg contacted Kopelman about buying a chair for Fanburg’s assistant to use at home and that Kopelman did not solicit Brach Eichler’s business.

Legal standard

The court described attorney disqualification as a drastic remedy that courts view disfavorably because disqualification motions can cause delay, expense, and the loss of a lawyer chosen by a client. The party seeking disqualification has a heavy burden.

The court applied New York Rule of Professional Conduct 3.7. Subsection (a) generally prevents a lawyer from acting as an advocate before a jury in a matter in which the lawyer is likely to be a significant fact witness. Subsection (b) can prevent a law firm from representing a client when another lawyer in the firm is likely to testify on a significant issue, outside the client’s behalf, and the testimony may harm the client. Under the court’s cited standard, disqualification under subsection (b) requires clear and convincing evidence that the testimony will be harmful to the client and that the integrity of the judicial system will suffer.

The potential testimony must also be necessary, not merely relevant or useful. The party seeking disqualification must specifically show how the testimony would harm the client; speculation is not enough.

Court’s analysis

The court held that Rule 3.7(a) did not apply because Fanburg was not representing Kopelman in the case, was not serving as trial counsel, and would not advocate before a jury. The court therefore found no basis for disqualification under that subsection.

The court considered Arenson’s arguments under Rule 3.7(b), even though Arenson first raised that subsection in its reply brief, because Kopelman had discussed the subsection in his opposition. The court assumed for purposes of the analysis that Brach Eichler’s testimony might be necessary, but found that Arenson had not shown the testimony would be harmful to Kopelman. Arenson’s argument depended on its expectation that Kopelman would deny soliciting Brach Eichler and that Brach Eichler’s testimony would contradict him. The court characterized that argument as speculation.

The declarations submitted by Kopelman also indicated that Fanburg’s testimony would at least partly support Kopelman’s account. In addition, the case was at an early stage: Kopelman had not answered the complaint, no pretrial conference or scheduling order had occurred, and neither Kopelman nor Fanburg had been deposed. The court found that the existing record did not support disqualification.

Disposition

The court denied Arenson’s motion to disqualify Brach Eichler LLC without prejudice to renewal after discovery and any summary-judgment motion practice, if the case was not resolved before trial. The court directed Arenson to request a pre-motion conference if it sought to renew the motion. It also directed Kopelman to answer or otherwise respond to the complaint by May 11, 2021, and requested that the clerk terminate docket entry 5.