YAU v. HE CHENG RESTAURANT CORP. et al, No. 2:2012cv06754 - Document 98 (D.N.J. 2015)
Court Description: OPINION. Signed by Magistrate Judge Joseph A. Dickson on 6/1/15. (DD, )
Download PDF
<![CDATA[
YAU v. HE CHENG RESTAURANT CORP. et al Doc. 98 NOT FOR PUBLICATION IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY CHI MING YAU, Civil No. 12-6754 (MCA) (LDW) Plaintiff, vs. OPINION HE CHENG RESTAURANT CORP., et al., Defendants. -----------------------------· I JOSEPH A. DICKSON, U.S.M.J. This matter comes before the Court upon Plaintiff Chi Ming Yau ("Plaintiff') d Defendants He Cheng Restaurant Corp., John Doe, and Jane Doe I to X's ("Defendants"') er ss applications to disqualify counsel. 1 The Court heard oral arguments on March 25, 2015. A er having considered the parties' submissions, oral arguments, and for the reasons stated below d on the record, both applications to disqualify are DENIED. I. BACKGROUND On October 26, 2012, Plaintiff commenced this action against the Defendants alle violations of the Fair Labor Standards Act ("FLSA"), as amended, 29 U.S.C. § 201. (Amen Compl., ECF No. 22, if 1). Plaintiff further contends that pursuant to the FLSA and the New Jer Wage and Hour Law, he is entitled to recover unpaid overtime, liquidated damages, attome s' 1 While the parties never filed formal cross Motions to Disqualify, this Court will treat t ir applications as such. 1 Dockets.Justia.com fees, and costs. (Id. ~ ~ 1, 2). Plaintiffs application to disqualify was filed as a result pf Defendants' counsel, Benjamin Xue's ("Xue's"), prior representation of Plaintiff on three pr pr FLSA actions. (ECF No. 84). Defendants' application is predicated on Plaintiffs previ< us counsel, Brendan Nolan's ("Nolan's"), motion to withdraw as counsel, (ECF No. 66), which v as later withdrawn by Jonathan E. Glaser ("Glaser"), a member of the same firm, the law office iof Stephen K. Seung, who continues to represent Plaintiff. (ECF No. 75). Although the Complaint was filed on October 26, 2012, (ECF No. 1), and Xue file1 a Notice of Appearance on November 27, 2012, (ECF No. 5), it appears the potential conflict of is representation was not brought to the Court's attention until November 18, 2013. (See Min te Entry for proceedings held before Magistrate Judge Michael A. Hammer: Miscellaneous Hear !lg re deposition held on 11118/2013). On that day, the Court conducted a hearing with the parties ia telephone during Plaintiffs deposition, where Nolan alleged that Xue was "'exploit O.g information adduced from the plaintiff, Chi-Ming Yau, during the course of [Xue's] pr or representation' of plaintiff, and [Nolan thereby] requested leave to file a motion to disqua fy [Xue's firm]." (ECF No. 59, at 1) (citing Tr. 146:9-12). Specifically, Nolan took issue with Xu 's line of questioning "regarding whether or not [Plaintiff] accurately declared his income on his ax returns and his Medicaid applications was an exploitation of confidential information discloi f;':d during the course of the prior representation." (Id.). Following that hearing, the Honora •le Michael A. Hammer, U.S.M.J. set the dates by which Plaintiff was to file a motion to disquaL y, along with the date for any opposition and/or cross-motion. (ECF No. 55). Xue contests whether such information constitutes confidential information at all, ' ud further argues, Even assuming they are confidential, however, at no time during [Xue's] prior representations did [P]laintiff disclose the information in question. Two of the 2 matters settled by agreement with confidentiality provisions before the summons and complaints were filed, and the third was discontinued before an answer was filed. Therefore, no fact discovery was ever conducted in any of [Xue's firm's] prior representations of plaintiff, and the specific information regarding tax reporting and Medicare application was moreover never discussed or disclosed. (ECF No. 59, at 1). Xue further notes that his office provided Plaintiff with a complete copy f his case files. (Id.). a. Plaintiff's Counsel's Motion to Withdraw In a letter dated February 26, 2014, Nolan indicated that he intended to withdraw as cou and requested an extension of time to file the motion to disqualify. (ECF No. 62). The case s then reassigned to this Court on March 13, 2014. On April 24, 2014, Nolan moved to withd the law office of Stephen K. Seung as Plaintiffs counsel. (ECF No. 66). Nolan noted t at withdrawal is authorized pursuant to New Jersey Rule of Professional Conduct l.16(b), wh provides in relevant part, "a lawyer may withdraw from representing a client if: (1) withdra can be accomplished without material adverse effect on the interests of the client; ... (6) . . . s been rendered unreasonably difficult by the client; or (7) other good cause for withdrawal exis " Nolan further explained that he and the Plaintiff "have encountered irreconcilable difference in e prosecution of this action", (ECF No. 66, at 2), which were not disclosed in order to prot ct attorney-client privilege. (Id. at 4). A hearing on Plaintiffs motion to withdraw was set for May 21, 2014. (ECF No. 69). r the reasons stated on the record, Plaintiffs counsel's motion for leave to withdraw, (ECF No. was denied without prejudice. (ECF No. 70). Plaintiffs counsel was Ordered to "prepar a declaration detailing the reasons for his request to withdraw" and "confidentially submit both 1s declaration and his client's response, if any" to Chambers. (Id.). In accordance with this Co 's Order, Nolan submitted a confidential declaration explaining why he sought to be relieved as 3 counsel, along with his client's response. A hearing for plaintiff's motion to withdraw was set r October 8, 2014. (ECF No. 73). On September 29, 2014, however, Glaser, also from the 1 w office of Stephen K. Seung, filed a notice of appearance on Plaintiff's behalf. (ECF No. Glaser then moved to withdraw Nolan's application to be relieved as counsel and sought to continue representing Plaintiff. (ECF No. 75). On October 1, 2014, this Court granted Glas 's request and the pending motion, (ECF No. 66), was withdrawn. (ECF No. 76). Pursuant to his request, this Court permitted Nolan's withdrawal of appearance for Plaintiff and allowed Glaser, counsel at the same firm, to continue representing Plaintiff. (E No. 80). Xue, however, requested that this Court conduct a conference to discuss the law of e of Stephen K. Seung's continued representation of Plaintiff following Nolan's motion to withdr (ECF No. 79). Xue wrote to the Court requesting that the nature of the "irreconcilable differenc " referenced in Nolan's motion to withdraw, (ECF No. 66), be explored in order to determ e whether or not Nolan's "withdrawal from this action cures the conflict so as to allow Law Of e of Stephen K. Seung to continue representing the Plaintiff." (ECF No. 82, at 2). b. Plaintiff's Motion to Disqualify Defendant's Counsel Following a telephone status conference on November 5, 2014, Plaintiff's counsel file a letter in support of Plaintiff's application to continue representing Plaintiff and moved to disqua fy Xue on the grounds that he has represented Plaintiff on three prior FLSA actions. (ECF No. 4, at 1). With regard to Plaintiff's continued representation, Glaser contends that Nolan's reques to withdraw as counsel was not material to the instant case. (Id. at 2). In addition to other argume s, Glaser posits that there "are no compelling reasons to require counsel to withdraw fr m representing the Plaintiff." (Id. at 3). 4 Glaser also argues that Xue should be disqualified as Defendants' counsel. (Id. at 4- ). Glaser notes that Xue has "represented [P]laintiff in three prior FLSA cases and even consul with Plaintiff in the instant case" and, therefore, "the danger of Xue using confidential informaf n against Plaintiff is too great to allow him to continue to represent Defendants." (Id. at ). Ultimately, Glaser accuses Xue of violating New Jersey Rules of Professional Conduct 1.6, 1 , 1.16, and 8.4. 2 (Id. at 6). On November 24, 2014, Defendants' counsel opposed, denying Plaintiffs allegations t at Xue consulted with Plaintiff regarding this action. (ECF No. 85). Additionally, Xue denies t at he exploited any privileged information. (Id. at 1). With regard to Nolan's withdrawal, Xue no s that the "credibility issue" in Nolan's initial motion to withdraw, (ECF No. 66), was ne r addressed. The issue, therefore, remains outstanding because if Nolan's withdrawal is impute o Plaintiffs counsel law firm, then the Plaintiffs inability to find substitute counsel is insuffici t to prevent withdrawal. (Id. at 2). Next, Xue argues that Plaintiff has "waived his right to file a motion to disqualify d should not be allow[ ed] to file [said motion] two years after the commencement of the case." (I ). Defendants' counsel notes Plaintiff has waived his right because, 1) Plaintiff delayed two years in bringing the motion to disqualify; 2) Plaintiff has known of the undersigned's representation of Defendants since my appearance on their behalf on November 27, 2012; 3) Plaintiff was represented by counsel during the delay; 4) there was no reasonable excuse for the delay; and 5) disqualification would result in significant prejudice to Defendants given the length of this litigation. (Id. at 3). 2 RPC 8.4(a) states, "[i]t is professional misconduct for a lawyer to violate or attempt to viol te the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so thro the acts of another". This Court need not address this Rule specifically, as the remaining Ru s, and Xue's compliance of them, are discussed in detail below. 5 On March 25, 2015, the Court held an in person status conference and a hearing on parties' cross applications to disqualify. For the reasons stated on the record, this Court den Defendants' motion to disqualify Plaintiff's counsel. (Tr. 4:16-17). The Court further Orde Xue to submit a letter confirming that "when requested for the case files by Mr.Yau and/or attorneys," Mr. Yau signed a waiver and the complete file was turned over. (Tr. 21 :3-14). Court also gave Glaser an opportunity to reply and restate why this Court should consi r disqualifying Xue and his firm. (Tr. 21: 17-19). Subsequently, Defendants' counsel submitted a letter on March 26, 2015, confirming t at their office had submitted the complete case files as to Xue's prior representations of Plaintif to Plaintiff's attorney on January 20, 2014, and February 7, 2014. (ECF No. 91, at 1). On Apri 2, 2015, Glaser submitted a reply, merely restating that "in order for defense counsel to have prop represented [P]laintiff in the three prior action[s], Mr. Xue would have obtained confidential d privileged information that could unfairly prejudice Mr. Yau in the instant case." (ECF No. 92 1). Defendants' counsel submitted a letter on April 7, 2015, reiterating the waiver argumen light of the amount of time between when the initial complaint was filed and when the motio disqualify was first mentioned. (ECF No. 93). II. LEGALSTANDARD a. Disqualification New Jersey courts are the primary authority when applying the Rules of Professio al Conduct to controversies. Strategic Envtl. Partners, LLC v. Bucco, No. 13-5032, 2014 6065816, at *2 (D.N.J. Nov. 12, 2014). Local Civil Rule 103.l(a) provides that the Rules of Professional Conduct ("RPC'') of the American Bar Association, as revised by the New Jer y 6 Supreme Court, shall govern the conduct of members of the bar admitted to practice in the Dist t. See L. Civ. R. 103.l(a). In New Jersey, "[d]isqualification of counsel is a harsh discretionary remedy which m st be used sparingly." Cavallaro v. Jamco Prop. Mgmt., 760 A.2d 353, 361 (N.J. Super. Ct. A p. Div. 2000). Thus, the movant bears the burden of proving that disqualification is appropriat light of the RPCs. Id. Motions to disqualify, however, are "viewed with 'disfavor' disqualification is considered a 'drastic measure, which courts should hesitate to impose exc when absolutely necessary."' Alexander v. Primerica Holdings, Inc., 822 F.Supp. 1099, 11 4 (D.N.J. 1993) (quoting Schiessle v. Stephens, 717 F.2d 417, 420 (7th Cir. 1983)). Further, the Third Circuit has held that "[a]Ithough disqualification ordinarily is the re of a finding that a disciplinary rule prohibits an attorney's appearance in a case, disqualificat n never is automatic." United States v. Miller, 624 F.2d 1198, 1201 (3d Cir. 1980). Moreover, e Third Circuit has observed that "courts should disqualify an attorney only when it determines, n the facts of the particular case, that disqualification is an appropriate means of enforcing e applicable disciplinary rule." Id. In consideration should be the ends "that the disciplinary rul designed to serve and any countervailing policies, such as permitting a litigant to retain the cou of his choice and enabling attorneys to practice without excessive restrictions." Id. Furtherm "a motion for disqualification calls for [courts] to balance competing interests, weighing the n d to maintain the highest standards of the profession against a client's right freely to choose is counsel." Id. b. Rule of Professional Conduct 1.6 - Confidentiality Confidentially between attorneys and their clients is governed by RPC 1.6. states, "[a] lawyer shall not reveal information relating to representation of a client unless the cli t 7 consents after consultation, except for disclosures that are impliedly authorized in order to ca rY out the representation, and except as stated in paragraphs (b), (c), and (d)." Although, "[d]isclos [e of client information is permissible if the client consents after consultation." Id. Further, n.e protections of the rule encompass "confidentiality to any information relating to the representat m of a client." Id. at 614. The Rule governing confidentiality, is therefore, not absolute. c. Rule of Professional Conduct 1.9 - Conflicts RPC 1.9(a) states "[a] lawyer who has represented a client in a matter shall not therea er represent another client in the same or substantially related matter in which that client's intere its are materially adverse to the interests of the former client." Furthermore, RPC 1.9(c) states, A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client. If such a conflict exists, that conflict extends to the attorney's firm ''unless the prohibition is ba: ed on a personal interest of the prohibited [attorney] and does not present a significant risk of materially limiting the representation of the client by the remaining [attorneys] in the firm." R ~c 1.lO(a). New Jersey analyzes Rule 1.9 conflicts under a multi-prong test. Citv of Atl. Cih v. Trupos, 201 N.J. 447 (2010). In Trupos, the Supreme Court of New Jersey established that, or purposes of RPC 1.9, matters are deemed to be "substantially related" if"( 1) the lawyer for wh m disqualification is sought received confidential information from the former client that can be u ed 8 ----------------------------------------------------- against that client in the subsequent representation of parties adverse to the former client, or facts relevant to the prior representation are both relevant and material to the subsequ t representation." Id. at 451-52. The New Jersey Supreme Court reasoned that this standard adopted because it protected confidentiality while also requiring a fact sensitive inquiry to se an attorney could proceed against a former client. Id. In Trupos, the Supreme Court ofNew Jersey decided the issue of whether a law firm wh had previously represented a municipality in defense of tax appeals could later represent reside ts in their tax appeals against the municipality. Id. at 461. After applying the two-part "substanti related" test, the Supreme Court held that the "individual property owners' real estate tax app [were] not substantially related to the law firm's earlier terminated representation of e municipality." Id. at 452. Although the Supreme Court in Trupos noted that both matters involved the same subj ct matter of tax assessments, it did not find them substantially related because the first representat n involved casinos and large entities while the subsequent matter involved residential tax appe Id. at 467-468. Moreover, the Supreme Court found the record "too slender" as to whether co had obtained confidential information from the municipality that the firm could later use aga· it. Id. at 468. d. Rule of Professional Conduct 1.16 - Mandatory Withdrawal RPC 1.16 governs the termination of an attorney-client relationship. Specifically, 1.16(a)(l) states that a lawyer shall withdraw from representing a client "where the representat n will result in violation of the Rules of Professional Conduct or other law." In addition, RPC 1.1 ) permits a "lawyer [to] withdraw from representing a client if withdrawal can be accomplis without material adverse effect on the interests of the client, or if any of the criteria enumerate in 9 (b)(l)-(6) is met." Id. However, the Rule "provides that withdrawal is entirely within e discretion of the court and a court may refuse to allow withdrawal despite a showing of g d cause." Haines v. Liggett Grp., 814 F. Supp. 414, 422 (D.N.J. 1993). e. Waiver In Alexander v. Primerica Holdings, Inc., this Court held that a "[w]aiver is a valid b for the denial of a motion to disqualify." 822 F. Supp. 1099, 1115 (D.N.J. 1993). In Alexan the Court listed the factors used in determining if waiver was warranted: "(l) the length of e delay in bringing the motion to disqualify, (2) when the movant learned of the conflict, (3) whet er the movant was represented by counsel during the delay, (4) why the delay occurred and 5) whether disqualification would result in prejudice to the non-moving party." Id. at 1115. The Court also looked to see if the delay in bringing the motion to disqualify was strate Id. Ultimately the Court found that a motion seeking disqualification due to a former atto representing an adversary that was filed three years after the litigation began was untimely. d. See also Rohm & Haas Co. v. Am. Cyanamid Co., 187 F. Supp. 2d 221, 230 (D.N.J. 20 1) (Although a conflict of representation existed, the Court held that the filing of the motio to disqualify after two years and five months was an undue delay that constituted a waiver). III. DISCUSSION Under Trupos and RPC 1.9, in order to successfully disqualify Xue, Plaintiffs cou el must show that Xue's representation of Plaintiff in the prior FLSA matters and the present c se are "substantially related." This matter is "substantially related" if: (1) Xue received confiden al information from Plaintiff in the prior FLSA actions that can be used against him in this action or (2) facts relevant to the prior FLSA representations are both relevant and material to the pres nt case. See Trupos, 201 N.J. 447, 451-52 (2010). 10 Xue argues that Plaintiff failed to prove the elements required by Trupos and RPC 1 (ECF No. 85, at 5). Specifically, Xue argues that "Plaintiff's counsel failed to indicate how prior action and the present action are 'substantially related', and how the confidential informati n disclosed by Plaintiff in the prior action, if any, is 'both relevant and material' to the pres action." (Id.). While Plaintiffs counsel maintains that Xue discussed the present case Plaintiff, (ECF No. 84), Plaintiff's counsel fails to inform the Court of exactly what informaf n was exchanged between Plaintiff and Defendants' counsel. In fact, Xue maintains that his t representations of Plaintiff were simple, none of which advanced to the discovery phase beca e two resulted in settlement before the summons and complaint were filed, and one was discontin before an answer was filed. (ECF No. 59, at 1). Plaintiff's counsel seems to argue that because Xue represented Plaintiff in three previ s FLSA matters, and the present matter is a FLSA case, that in itself is sufficient to deem the p representation as "substantially related." (ECF No. 84). However, the mere fact that the subj ct matter is the same is not enough to deem a case "substantially related." See Trupos, 992 A.2d 7 2. In order to disqualify Xue, Plaintiff's counsel would need to provide this Court with m e information as to how the previous FLSA cases and the current matter are substantially rela under the test established by Trupos. Plaintiff, however, has failed to provide the Court with t at information. Moreover, it remains unclear to the Court what information Xue has used against Plain ff during his November 18, 2013 deposition, or what information Xue can use in the future. e may have merely been questioning Plaintiff with the same due diligence as any counsel wo Id during a deposition, instead of inquiring into confidential matters learned from ear er representations of Plaintiff. Xue has denied that he had any such information from Plaintiff 11 d Plaintiff has provided no information or affidavit to rebut this denial. The fact that Plaintiff ca identify any confidential information imparted to or used by Xue confirms Xue's denial ofhavi g received any such information. Additionally, this Court finds that Plaintiff has waived his right to disqualify Xue. first prong of the five-factor waiver test is the length of delay in bringing the motion to disquali Alexander, 822 F. Supp. at 1117. Here, Plaintiffs motion comes over a year after commencement of this litigation. Plaintiff himself was presumably aware ofXue's representaf n of Defendants from the outset of the case. (See Tr. 10:21-11 :3). This still unexplained length delay supports the denial of Plaintiffs application to disqualify Xue as a result of a valid waiv The second factor to consider is when the movant learned of the conflict. The Compl was filed on October 26, 2012. (ECF No. 1). Defendants' counsel entered an appearance n November 27, 2012. (ECF No. 5). As a result, Plaintiff, and perhaps his counsel, were presuma aware of the conflict one month after the initiation of this action. On November 18, 2013, o r one year later, Plaintiff raised the issue of filing a motion to disqualify for the first time since e inception of the case. (ECF No. 55). While this Court is aware that the disqualification of was triggered by the Plaintiffs deposition on November 18, 2013, that does not alter the tim which Plaintiff and arguably his counsel learned of the conflict. The arguments that Plaintiff n w makes to disqualify Xue are the very same arguments Plaintiff could have made to disqualify at the start of the case, with the exception of the events that unfolded during the deposition. factor also weighs in favor of finding Plaintiff has waived his right to move to disqualify Xue. The third factor is whether the movant was represented by counsel during the del y. Plaintiff has been represented by the same firm since the Complaint was filed in October 20 2. The fourth factor is why the delay occurred, which remains unclear. Plaintiff has yet to prov e 12 this Court with an explanation as to why it took over a year to move to disqualify Xue. Both e third and fourth factors, therefore, weigh in favor of finding a waiver has occurred. The final factor is whether disqualification would result in prejudice to the nonmovi g party. "When that prejudice would be great, courts have not granted motions to disquali ." Alexander, 822 F. Supp. at 1117. Xue has handled all aspects of this case since its inception n 2012. Disqualifying Defendants' counsel would greatly prejudice Defendants, especially in li t of the timing of the application. Ultimately, these five factors weigh in favor of denying Plainti s application to disqualify Defendants' counsel, as it appears a waiver has occurred. This Court's ruling does not preclude Plaintiff from raising the issue of disqualification n the future if Plaintiff can demonstrate to this Court that Defendants' counsel has in some utilized information that could have only come from his prior representation of Plaintiff. f course, a finding by this Court that Defendants' counsel exploited such information after expres having denied the possession of such confidential information will most likely result n extraordinary sanctions. IV. CONCLUSION For the foregoing reasons and the reasons stated on the record, the cross applications o disqualify are DENIED. An appropriate form of Order accompanies this Opinion. SO ORDERED cc: Hon. Madeline C. Arleo, U.S.D.J. 13
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
