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Canta v. Philip Morris USA, Inc.

Florida Court of Appeals, Third District

December 27, 2017

David Canta and Corazon Canta, Petitioners,
Philip Morris USA, Inc. and R.J. Reynolds Tobacco Co., Respondents.

         Not final until disposition of timely filed motion for rehearing.

         On Petition for Writ of Certiorari from the Circuit Court for Miami-Dade County, Rodolfo A. Ruiz, Judge. Lower Tribunal No. 07-46972

          The Ferraro Law Firm and James L. Ferraro and Juan P. Bauta, II, for petitioners.

          Arnold & Porter Kaye Scholer and Frances Daphne O'Connor and Geoffrey J. Michael, (Washington, D.C.), for respondent Philip Morris USA, Inc.; Carlton Fields Jorden Burt and Jeffrey A. Cohen, Benjamine Reid and Douglas J. Chumbley; Jones Day and Jason T. Burnette (Atlanta, GA), for respondent R.J. Reynolds Tobacco Company.

          Before SALTER, EMAS and LOGUE, JJ.

          SALTER, J.

         David and Corazon Canta, plaintiffs in an Engle-progeny[1] tobacco case, petition for a writ of certiorari quashing a trial court order disqualifying their counsel. Concluding that the Cantas have not shown a departure by the trial court from the essential requirements of law-in this case, the provisions of applicable Rules Regulating The Florida Bar-we deny the petition.

         I. Facts and Procedural History

         A. The Alleged Conflict; Early Disqualification Motions

         The Cantas retained The Ferraro Law Firm ("Ferraro Firm") to represent them regarding their claims for injuries and damages from smoking cigarettes manufactured by the defendants/respondents, Philip Morris USA, Inc. ("PM") and R.J. Reynolds Tobacco Co. ("RJR"). The Cantas' lawsuit against PM and RJR commenced in 2007.

         In 2015, the Ferraro Firm hired attorney Paulo Lima, who had previously been employed as an associate attorney at the New York and Miami offices of Hunton & Williams, LLP ("Hunton Firm"). Importantly, Lima worked for the Hunton Firm from 2005 through his 2015 departure, and during that period he performed legal work on behalf of PM, a client of the Hunton Firm. Lima's legal work, detailed in his timekeeping records, included legal research and drafting memoranda to assist PM in the defense of other Engle-progeny tobacco cases. As part of that work, Lima had access to PM's litigation databases and confidential PM documents, and he attended meetings regarding PM's legal strategy and defenses in tobacco cases. Ultimately, the time records disclosed almost 375 hours billed by Lima to PM regarding Engle-progeny cases, and over 1500 billable hours on PM matters in total.

         After Lima joined the Ferraro Firm in May 2015, he immediately began to represent clients of that firm in pending Engle-progeny cases, including several appeals in this Court. In his deposition taken in connection with another Engle-progeny case, [2] Lima testified that "one of the things I discussed with Mr. Ferraro here when I was discussing my employment, " was that Lima would handle Engle-progeny cases. Lima went on to testify, however, and to substantiate in an affidavit, that (a) no one at the Ferraro Firm ever asked him to disclose any confidential information belonging to PM or RJR, and (b) at no time did Lima ever discuss any confidential information pertaining to PM or RJR with any employee or member of the Ferraro Firm.

         In March 2016, PM and RJR began seeking the disqualification of the Ferraro Firm in pending Engle-progeny cases throughout Florida. The initial motions lacked significant details that were later obtained by PM and incorporated in subsequent motions in other cases. While several of the initial motions were denied (and petitions for certiorari directed at the denial orders were denied without elaboration), subsequent motions for disqualification of the Ferraro Firm in other pending Engle-progeny cases were granted. It is noteworthy, however, that the unsuccessful March 2016 motions to disqualify placed the Ferraro Firm on notice that Lima's former client, PM, claimed Lima had worked on confidential, Engle-related legal issues and strategy. Nonetheless, Lima continued to work on Engle-progeny cases after the Ferraro Firm became aware of Lima's work at PM and PM's objections.

         Three months later, in June 2016, a trial court in the Orange County Circuit Court granted PM's motion to disqualify Lima and the Ferraro Firm in an Engle-progeny case styled Hall v. R.J. Reynolds Tobacco Co., No. 2014-CA-005690-O. Lima and the Ferraro Firm did not seek appellate review of that decision, which included detailed findings of the work done by Lima for PM as reflected on his time records. That court found that, among other things, Lima "researched cigarette design defect issues raised in Engle and the law of alternative causation, both of which are litigated in Engle progeny cases to this day, including . . . many Ferraro cases." The court also determined that "The affidavit of Kimberly Harlowe submitted by [PM] and not contested by the Ferraro Firm establishes that Mr. Lima had access to, and did access, [PM's] litigation databases and reviewed internal [PM] documents, including highly confidential and privileged documents."

         B. Caro

         In December 2016, a Florida appellate court reached the same conclusion as the trial court in Hall, quashing a Broward County Circuit Court order denying PM's motion to disqualify Lima and the Ferraro Firm in another Engle-progeny case. Philip Morris USA Inc. v. Caro, 207 So.3d 944 (Fla. 4th DCA 2016). In Caro, the Fourth District rigorously analyzed the "two-prong test for determining whether disqualification is warranted, " id. at 948, and applied the test to Lima's work for PM and his move to the Ferraro Firm.

         Applying Rule Regulating The Florida Bar 4-1.9(a) and the first prong of that test, the court agreed with the trial court's analysis that there had been an attorney-client relationship between Lima and PM, creating an "irrefutable presumption that confidences were disclosed during the relationship." Id. (quoting State Farm Mut. Auto. Ins. Co. v. K.A.W., 575 So.2d 630, 633 (Fla. 1991)). As to the second prong, however-whether the matter in which Lima or the Ferraro Firm[3]represented Caro regarding claims against PM "is the same or substantially related" to the matter in which Lima represented PM-the Fourth District disagreed with the trial court:

We disagree with the trial court's conclusion that Lima's work for PM was not substantially related to the issues in Caro's lawsuit against PM in which Lima is now Caro's counsel. In so ruling, the trial court departed from the essential requirements of law. While there are some issues relating to Caro's case, and indeed in every plaintiff's case involving Engle litigation, that are unique to, and distinct from, defense matters on which Lima previously worked, we cannot conclude that Lima's extensive prior representation of PM in defending and strategizing about Engle progeny cases was not substantially related to at least some of the issues here. As PM has argued, each Engle progeny case includes a plaintiff's expert witness who testifies about the defendant company's conduct relating to concealment of information about the health risks of smoking and defective design of cigarettes. This expert testimony is said to vary little from case to case. This reaches beyond a unique plaintiff's issue.

Id. at 949.

         Concluding that PM's petition for certiorari should be granted, the Fourth District granted the petition, quashed the order denying PM's motion for disqualification, and directed the trial court to grant the motion. Caro moved for rehearing en banc, which was denied in January 2017.

         C. This Case, and Lima's Termination of Employment

         On March 1, 2017, citing Caro and other authorities, PM moved to disqualify Lima and the Ferraro Firm from further representation in the present case. The following day, RJR filed a similar motion, incorporating PM's recitation of the facts and law, but adding that RJR had a joint defense agreement with PM. RJR's motion attached an affidavit stating that, while employed at the Hunton Firm, Lima had access to confidential information about RJR and its defense of Engle-progeny lawsuits through a jointly-maintained tobacco litigation database.

         Effective the next day, March 3, 2017, the Ferraro Firm terminated Lima's employment with the law firm. In its opposition to the PM and RJR motions for disqualification in this case (Canta) and other then-pending cases, the Ferraro Firm relied upon the previously-described affidavits of Lima and every lawyer in the Ferraro Firm disclaiming knowledge or discussion regarding any confidences of PM or RJR. The Ferraro Firm's opposition to disqualification in this case, filed March 6, 2017, also contended that the ...

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