Secret Moonlighting, by Attorney in Plaintiff’s Law Firm, as a Document Reviewer for Defendant, Does Not Result in Disqualification of Plaintiff’s Firm

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In Troyce Manassa v. National Collegiate Athletic Association, 2022 WL 2176334 (S.D. Ind. June 16, 2022), a motion to disqualify counsel was denied.  Plaintiffs are represented by the law firm of “FeganScott.”  They sued the NCAA.

“Upon learning that a FeganScott staff attorney moonlighted as a document reviewer for the NCAA in this case, the NCAA has moved to disqualify FeganScott from representing Plaintiff and the putative class.”  The motion was denied:

In light of the fact that there is no evidence whatsoever that any of the NCAA’s client confidences were actually shared with any FeganScott employee by Mr. Sakthivel, the Court must exercise its discretion to deny the NCAA’s motion to disqualify.

The specific and unique factual predicate is important.  After suit was filed, NCAA’s e-discovery vendor, Proteus Discovery Group, LLC, began retaining document reviewers.  Unbeknownst to FeganScott, one of its attorneys applied to Proteus.  The resume he submitted to Proteus omitted reference to his employment with FeganScott, nor did he tell FeganScott about his application to Proteus.

Proteus hired Mr. Sakthivel as a reviewer for the NCAA matter.  He signed a conflict of interest form with Proteus and had a similar agreement with FeganScott.  He did not disclose his conflict to either entity.

The court wrote:

Working for Proteus, Mr. Sakthivel was given access to several resources and databases relating to this case, and he attended at least four meetings regarding the NCAA’s litigation strategy…. From March 3, 2022, through April 4, 2022, Mr. Sakthivel billed 183.7 hours for his review, analysis, and coding of 6,622 NCAA documents relating to this case…. This work resulted in at least 640 documents that were reviewed and tagged as responsive by Mr. Sakthivel being produced to FeganScott.

When Proteus learned – in some unspecified way – of the reviewer’s dual employment, it notified the NCAA’s counsel. The NCAA demanded that the attorney be isolated.  Instead, he was terminated by FeganScott.

The parties’ positions were clear and polar opposites.  The NCAA moved to disqualify FeganScott asserting an irreconcilable conflict of interest.  “In response, FeganScott unequivocally condemns the actions of Mr. Sakthivel, but argues that his conflict of interest should not be imputed to FeganScott, and thus disqualification is inappropriate, for several reasons.”

The court began its analysis by stating that “there is no dispute whatsoever that Mr. Sakthivel committed serious ethical violations….”  It pointed out that neither party consented to the concurrent representation and that the covert employment constituted a concurrent conflict of interest.

It then analyzed whether the conflict was imputable to FeganScott.  Because “the circumstances clearly indicate that Mr. Sakthivel knew or should have known that his employment with Proteus was directly adverse to his employment with FeganScott,” the conflict was imputable to the law firm.  To give only one example, Proteus provided Mr. Sakthivel with a copy of the Complaint against the NCAA.  The Complaint was signed by FeganScott.

However, “[a]s detailed below, numerous additional considerations underscore that disqualification of FeganScott as Plaintiff’s counsel in this matter is unwarranted.”  The court noted that FeganScott and Mr. Sakthievel had differing interests:

FeganScott has remained single-mindedly dedicated to the interests of its clients, including Plaintiff. Conversely, Mr. Sakthivel objectively violated his loyalty to FeganScott by furthering his own interests in pursuing outside employment.

The court wrote that “FeganScott has demonstrated that Mr. Sakthivel did not have access to any of its litigation files or other information relating to this case.”  Mr. Sakthivel was a remote worker and did not work on the NCAA case. Further:

There is no evidence to suggest that he shared any information he learned from the NCAA with FeganScott. As Ms. Fegan attests, Mr. Sakthivel “completely hid the fact that he was doing any work outside the firm.”…  Moreover, FeganScott’s firm software tracks employee access to client files, and software reports verify that Mr. Sakthivel was entirely isolated from this case.

The court wrote:

Mr. Sakthivel’s self-gratifying secret employment with Proteus should not be used to punish FeganScott via imputed disqualification…. Additionally, to the extent that Mr. Sakthivel’s conduct was preventable, FeganScott had appropriate policies in place that explicitly forbade him from undertaking outside employment or any other acts that could constitute a conflict of interest. [emphasis added].

Finally, the court recognized a “duty to Google”:

Proteus had the last/best chance to prevent the situation that unfolded. To be perfectly clear, the fault lies at Mr. Sakthivel’s feet—he is the one who acted unethically and covertly accepted conflicting employment. However, Proteus had several opportunities that could have uncovered Mr. Sakthivel’s employment with FeganScott before his hiring.

For example, “[a] routine internet search of Mr. Sakthivel would have populated [his] LinkedIn profile, as well as the FeganScott website wherein he was listed as a staff attorney….” While the court did not suggest wrongdoing by Proteus, “it would be fundamentally unfair to Plaintiff to deprive him of his counsel of choice when greater diligence in the hiring of Mr. Sakthivel by Proteus could have avoided this situation entirely.”

Some “lessons learned” are:

  • FeganScott had a solid paper trail. It required attorneys to sign agreements that, for example, prohibited conflicts.
  • FeganScott had software that tracked employee access to client files, and software reports verified that Mr. Sakthivel was entirely isolated from this case.
  • The NCAA and Proteus also had a solid paper trail.
  • The court was critical of the fact that internet searches had not been done of a prospective employee. For a discussion of the “Duty to Google,” see 40th State Adopts a Duty of Technological Competence – Is It a Good Idea?

One excellent resource is The Sedona Conference, “Guidance for the Selection of Electronic Discovery Providers,” 18 Sedona Conf. J. 55 (2017).  The Guidance states: “The Provider should have an adequate process for determining conflicts of interest.”  Id. at 85. Sedona writes that:

Personnel security is just as important [as physical security]. What kind of security checks do they use to ensure the reliability of their own personnel, such as background and conflict checks? … What procedures are in place when an employee leaves the Provider? Can they work for your client’s adversary?

Id. at 98.

Sedona suggests that vendors should be asked about “procedures for checking for conflicts” and “[a]greements not to work with opposing parties without both party’s consent.”  Id. at 102.  Sedona notes:

General background information about a Provider is one thing, but a background check should include, more specifically, information about the people who work there and those who may work on the project at hand or as part of your relationship engagement. What is the experience level of the personnel, both generally and specifically, with your requested service? Will the team assigned be dedicated to you and your project?
Will they staff your matter with the appropriate skill set? Have personnel been appropriately screened for security? … Will the Provider need to hire new, possibly inexperienced or temporary staff to handle the work? It is important to have the ability to approve personnel working on your project and the ability to retain the same personnel for the length of a project. Will they need to subcontract any part of the work?

Appendix A to the Sedona paper contains a sample non-disclosure agreement.  In short, Sedona suggests that:

Before choosing a Provider, it is important to have an adequate understanding of the  Provider’s conflict check process and any related policies in order to ensure that potential conflicts are identified and disclosed…. We recommend that any service agreement to be ultimately executed by the parties contain a clause memorializing the parties’ agreement concerning conflicts. This is especially important in light of the fact that Providers are not bound to the rules of ethics that preclude attorneys from representing parties who are adverse to their clients. [emphasis added].