Continuing our discussion of Decker v. Nagel Rice LLC, 09 Civ. 9878 from yesterday, we see the proposed plaintiff’s attorney, Mr. Lowy, being denied admission pro haec vice. One reason for the denial by judge Scheindlin was the Advocate-Witness Rule.  But that was  only one reason.

A second reason was the announcement that Mr. Lowy was to become a third-party defendant.  A strongly held belief in the world of litigation is that when an attorney sees something wrong, he/she looks for someone to blame. Third-party actions in legal malpractice are all about blame., sometimes after trying to fix a problem.

Here, Mr. Lowy will also be disqualified as plaintiff’s attorney should he become a third-party defendant.  This situation perennially arises when the eventual plaintiff’s attorney in a legal malpractice case earlier tries to fix the problem [contra to the attorney rule] tries to fix the underlying problem, but fails.  After this failure, plaintiff turns to legal malpractice with that attorney.  Problems ensue.

"Defendants oppose the foreign plaintiffs’ pro haec vice motion on the grounds that Lowy should be disqualified from representing plaintiffs. According to Defendants, Lowy (1) is a material fact witness; (2) will be named as a third-party defendant for contribution and/or indemnification; and (3) was sued by one of the plaintiffs in this action for legal malpractice in connection with the In re Ski Train Litigation and made sworn statements adverse to that plaintiff. For all three reasons, Lowy is disqualified.

First, Lowy is disqualified under the advocate-witness rule. The malpractice allegedly occurred when Defendants failed to move to certify the foreign plaintiffs as an opt-out class in either 2004, 2005, or 2006 or move this Court for relief from its judgment dismissing Siemens AG. As co-counsel to the foreign plaintiffs in 2005 and responsible for the foreign plaintiffs’ unsuccessful appeal, Lowy had direct, personal, involvement in the alleged acts of malpractice. Even counsel for the foreign plaintiffs recognizes that Lowy had at least some involvement arguing only that "he was not involved in the case at all at the time when most of the acts of malpractice occurred." 

In addition, the advocate-witness rule is intended to address four concerns. All are present here. Lowy declares that he will testify that Defendants engaged in malpractice while he and his co-counsel attempted to rectify those mistakes.  Given Lowy’s involvement with the underlying lawsuit and the prior malpractice action brought against him, this testimony may cause jurors and this Court to fear that he is distorting the truth as a result of bias in favor of plaintiffs or to protect his own interests. Defendants’ counsel will vigorously cross-examine Lowy regarding the actions he took or failed to take as the foreign plaintiffs’ counsel in the In re Ski Train Litigation. Defendants’ counsel will seek to impeach Lowy’s credibility with regard to whether it was Defendants or Lowy that caused the foreign plaintiffs’ alleged harm. Such cross-examination places opposing counsel in a difficult situation and will require Lowy to vouch for his own credibility. Lowy’s simultaneous representation of plaintiffs and his need to defend his own conduct will "’blur the line between argument and evidence [such] that the jury’s ability to find facts [will be] undermined.’"

Furthermore, Lowy’s testimony is both necessary and prejudicial.  Lowy did not merely play a passive role in the In Re Ski Train Litigation. Instead, Lowy was one of only three attorneys — one of which was disqualified in 2007 — that zealously represented the foreign plaintiffs during the precise time when the alleged malpractice was ongoing. Lowy will need to explain why he did not take steps to minimize plaintiffs’ alleged harm, such as by seeking certification of the foreign plaintiffs as an opt-out class in the wake of the Second Circuit opinion or pursuing a judgment on appeal with regard to the dismissal of the claims against Siemens AG. Any such testimony will necessarily be adverse to plaintiffs’ position and undermine their claim that Defendants’ malpractice caused their harm. Because his testimony is both necessary and prejudicial, I find that Lowy must be disqualified under the advocate-witness rule. 

Second, I find that Lowy’s presence as both an attorney and a third-party defendant presents a conflict of interest in violation of Rule 1.7 and Canons 5 and 9. Defendants intend to name Lowy as a third-party defendant for contribution and/or indemnification. 45 Defendants contend that Lowy should be disqualified from representing plaintiffs due to the conflict of interest presented by his position as both plaintiffs’ counsel and a third-party defendant. Plaintiffs attempt to rebut disqualification on this ground by asserting that whether Lowy will be named a third-party defendant is "mere speculation." 46 I disagree. Given Lowy’s prior involvement in this case during the time period in question and Defendants’ stated intention to name him as a third-party defendant, I find that it is a near certainty, and not merely speculative, that he will be named as a third-party defendant."