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Balaban v. Philip Morris USA Inc.

Florida Court of Appeals, Fourth District

April 18, 2018


          Petition for writ of certiorari to the Circuit Court for the Seventeenth Judicial Circuit, Broward County; John J. Murphy, III, Judge; L.T. Case No. 14-24204(19).

          Juan P. Bauta, II, and James L. Ferraro of The Ferraro Law Firm, Miami, for petitioner.

          Frances Daphne O'Connor and Geoffrey J. Michael of Arnold & Porter Kaye Scholer LLP, Washington, D.C., for respondent Philip Morris USA Inc.

          Jason T. Burnette of Jones Day, Atlanta, GA, for respondent R.J. Reynolds Tobacco Company.


          PER CURIAM.

         We grant respondents' motions for rehearing. We further vacate our order denying petitioner's motion for clarification and grant that motion. As a result, we are withdrawing our original opinion and substituting the following opinion.

         Dolores Balaban seeks certiorari review of a trial court order granting a motion to disqualify the Ferraro Law Firm ("the Ferraro firm") from representing her in a pending civil action against Philip Morris USA, Inc. (PM USA) and R.J. Reynolds Tobacco Company (RJR). Certiorari lies to review this order granting disqualification. See Philip Morris USA Inc. v. Caro, 207 So.3d 944, 949 (Fla. 4th DCA 2016).

         The trial court granted the motion based on this Court's recent decision in Caro, where we quashed a trial court order denying PM USA's motion to disqualify the Ferraro firm and its attorney Paulo Lima ("Attorney Lima"). Id. at 951. However, the circumstances in this case distinguish it from Caro and compel an expanded analysis, potentially including application of a different provision of the Rules Regulating the Florida Bar. The trial court departed from the essential requirements of law in finding Caro dispositive, in failing to hold an evidentiary hearing to make the required findings of fact, and in failing to rule on the issue of RJR's standing to join in the motion to disqualify. We thus grant the petition, quash the trial court's order, and return the case to the trial court for further proceedings consistent with this opinion.

         Briefly stated, petitioner sued PM USA, RJR, and other defendants in 2014 in one of many Engle-progeny[1] cases involving cigarette smokers who suffered injury or died. PM USA moved to disqualify Attorney Lima and the Ferraro firm from representing petitioner, alleging that Attorney Lima had previously represented PM USA while employed by Hunton & Williams, LLP ("the Hunton firm") from 2005-15. The motion to disqualify included allegations that Attorney Lima billed more than 1, 500 hours on PM USA matters including more than 1, 300 hours defending PM USA in smoking and health litigation while working at the Hunton firm, with nearly 375 hours spent specifically on Engle tobacco-related issues. PM USA also alleged Attorney Lima had access to PM USA's litigation databases and had reviewed its internal documents, including those that were highly confidential and privileged. PM USA therefore claimed Attorney Lima and the Ferraro firm had an impermissible conflict of interest precluding representation of petitioner as the plaintiff in this case against it. RJR joined in the motion.

         The motion cited Rule Regulating The Florida Bar 4-1.10(b) on imputation of conflicts of interest, which provides as follows:

(b) Former Clients of Newly Associated Lawyer. When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by rules 4-1.6 and 4-1.9(b) and (c) that is material to the matter.
Petitioner pointed out in her opposition to this motion that Attorney Lima had terminated his nearly two-year employment with the Ferraro firm shortly before the motion to disqualify was heard in this case. She argued that this event distinguished the facts in this case from those in Caro. In Caro, this Court concluded that Attorney Lima's "extensive prior representation of PM [USA] in defending and strategizing about Engle progeny cases" while with the Hunton firm was "substantially related to at least some of the issues" in Caro's lawsuit against PM USA. Caro, 207 So.3d at 949. We applied Rule 4-1.10(b) and concluded that the movant, PM USA, had demonstrated that Attorney Lima had "actual knowledge of material confidential information." Id. at 950. We then ruled that the plaintiff's attorney in that case had not met the burden to prove that Attorney Lima had not actually acquired such information, and the trial court was directed to grant PM USA's motion for disqualification of the Ferraro firm. Id. at 950-51.

         In the instant case, Petitioner argued that because Attorney Lima was no longer associated with the Ferraro firm at the time the motion to disqualify was heard, this was no longer a case involving a former client of a newly associated lawyer. Rather, the case now involved the client of a formerly associated lawyer and therefore Rule 4-1.10(c) controlled. That Rule provides as follows:

(c) Representing Interests Adverse to Clients of Formerly Associated Lawyer. When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client ...

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