8-27-13 case 1-90-cv-05722-rmb-thk document 1374 endorsed letter addressed to judge richard m....

7/27/2019 8-27-13 Case 1-90-cv-05722-RMB-THK Document 1374 ENDORSED LETTER addressed to Judge Richard M. Berman

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Chrysler Center666 Third l \venue

New York, NY 10017MINTZ LEVINBridget M. Rohde I 2126926883 [email protected]

MEMO ENDORSEDBY HAND S.ef1Hon. Richard M. Bennan United States District Court

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Southern District ofNew YorkUnited States Courthouse500 Pearl StreetNew York, NY 10007Re: 90 Civ. 5722 (SDNY) (RMB)Conflict of Interest Question CHAMBERS OF -RICHARD M. BERMAN U.S.D.J.

Dear Judge Bennan:We write in response to the Court's request for the parties and the Review Officer toaddress whether any conflicts arise from the dual representation by Kauff McGuire & MargolisLLP ("KMM") of the Taft-Hartley fringe benefit funds of the New York City District Council ofCarpenters ("Benefit Funds") and the Contractors Association of Greater New York("CAGNY").We respectfully submit that we do not believe that there were any actual conflictspresented due to KMM's prior simultaneous representation of both the Benefit Funds andCAGNY. Our belief is based both on our independent analysis of the facts available to us as

well as on Mr. McGuire's representations in his letter of August 22. See Letter by Raymond G.McGuire dated August 22, 2013 at 2. (Of course, we do not have all of the facts that KMM hasand, for exanlple, we cannot independently know whether confidential infonnation from theBenefit Funds could have been used in the negotiations), Additionally, now that KMM hasceased representing CAGNY in any matter, the possibility of a conflict has further dissipated.As to any remaining possibility of potential conflict due to CAGNY being a fonner client ofKMM, Mr. McGuire has represented that he will decline to provide advice to the Benefit Fundson any matter involving CAGNY, See id. 11As background, since late 2010, KMM has represented the Benefit Funds as its generaloutside counsel. KMM has also represented CAGNY, including in its negotiation for a new

collective bargaining agreement with the District Council. The Benefit Funds are not a party to

We further note that KM M polled each of the Funds' trustees and received a waiver of any actual or potentialconflict arising from the dual representation. See id. at l. Rule l.7(b) of the New York Rules of ProfessionalConduct provides that if there is no impediment to the clients providing informed consent, see Rule 1.7(b)(1-3), andboth affected clients provide informed consent and that consent is confirmed in writing, see Rule 1.7(b)(4), a lawyermay represent a client notwithstanding a concurrent conflict of interest.Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

BOSTON I LOl'4DON I Los AN(;EU:S I NEW YORK I SAN DJEl;O I SAN FRANCISCO I STAMl'ORD I WASHINGTON

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August 26,2013Page 2

any of the District Council's CBAs including the one with CAGNY and counsel for the BenefitFunds do not participate in the CBA negotiations.

One aspect of the collective bargaining agreement negotiated by the parties is thecompensation package for union members. This package contains both wages and benefits. Thebenetit contributions are made to the Benefit Funds on behalf of the union members rather thanto the members directly, such that the Funds might be considered a third party beneficiary. That,however, is not direct adversity. A related issue is that it is possible that confidential informationin an attorney's possession from representing the Benefit Funds could be utilized in negotiatingon behalf of the contractors' association or vice versa. Of course, that is a very fact specificinquiry. There is no per se adversity because of the mere existence of this possibility.With respect to the compensation package for the union members, it is important to note

that the contributions are made by individual contractors to each of the benefit funds - pension,welfare et cetera. One problem that can arise during the period of a CBA is that an individualcontractor may fail to pay, or fall behind in paying, contributions. When that occurs, collectioncounsel for the Funds, here, Virginia & Ambinder and not KMM, pursues the money that is inarrears. We additionally note that these actions are against the individual contractors, not therelevant contractors' association.Under Rule 1.7 of the New York Rules of Professional Conduct, it does not appear thatany actual conflict of interest has been presented by KMM's representation of the Benefit Fundsand CAGNY. We have no reason to believe that KMM has represented differing interests of theBenefit Funds and CAGNY, as precluded by Rule 1.7(a)(1).21 It is our understanding that the

Benefit Funds and CAGNY have not been directly adverse. I f adversity were to arise, it wouldmost likely be between the Funds and an individual contractor who fails to make any or someportion of his benefit contributions. KMM would not handle such a representation for the Funds,Virginia & Ambinder would. It is reasonable for KMM and its lawyers to conclude that theirjudgment would not be impaired and their loyalty to the Benefits Funds and CAGNY would notbe divided by the continued representation of both of these clients as long as no single matterinvolved both the Benefit Funds and CAGNY.Additionally, as indicated in Mr. McGuire's letter of August 22, despite the absence ofany conflict and despite obtaining a waiver from the Funds' trustees, KMM has ceasedrepresenting CAGNY in all matters. New counsel, Dennis Lalli, Esq., of Bond Schoeneck &

We note that All Star Carts & Vehicles, Inc. v. BFI Can. Income Fund, 2010 U.S. Dist. LEXIS 53290 at *11- 17(June 1, 2010, E.D.N.Y.), provides a discussion of conflicts of interest law in the disqualification context in theSecond Circuit. In comparing actual and potential conflict of interests, the Court therein stated: "An attorney has anactual, as opposed to a potential, conflict of interest when, during the course of the representation, the attorney's and[the client'S] interests diverge with respect to a material factual or legal issue or to a course of action .. .In contrast,'[a] potential conflict of interest exists if the interests of the defendant may place the attorney under inconsistentduties at some time in the future' ... The 'possibility that future conflicts may arise does not require'disqualification." Id. at *17-18 (internal citations omitted).

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King PLLC, has entered his appearance for CAGNY. (We understood Mr. McGuire to mean,when he stated that he has not withdrawn as counsel for CAGNY, that he was not withdrawing anotice of appearance because he had not filed one). This significantly reduces even thepossibility of any conflict.

Respectfully submitted,~ : . ~ By Emailcc: Raymond McGuire, Esq.AUSAs Benjamin Torrance and Tara LaMorte

James Murphy, Esq.

22202052v. )

8-27-13 case 1-90-cv-05722-rmb-thk document 1374 endorsed letter addressed to judge richard m....

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