Superior Court reverses Phila. judge's denial of labor leader's request disqualifying firm in defamation case

A state appellate court panel has found that a Philadelphia judge

improperly denied a request by a prominent labor leader seeking to disqualify a city law firm from representing journalists in a lawsuit brought by the plaintiff over claims that he was defamed in news coverage while he was running for elected office.

Three judges on the Pennsylvania Superior Court on Feb. 11 reversed a Dec. 26, 2012, order by a Philadelphia Common Pleas Court judge that denied John J. Dougherty’s motion to disqualify the law firm of Pepper Hamilton and its attorneys from serving as counsel to any “party, witness or participant” in Dougherty’s defamation action against Philadelphia Newspapers LLC and a handful of its employees.

Dougherty, the business manager of Local 98 of the International Brotherhood of Electrical Workers, is suing over claims that the defendants engaged in a “continuous and systematic campaign to harm [Dougherty’s] reputation by publishing a series of articles and editorials disparaging [him],” according to court papers.

Dougherty argued that Pepper Hamilton had a conflict of interest because the firm previously represented Dougherty in similar legal matters.

Specifically, the firm’s attorneys acted as Dougherty’s legal counsel in a federal investigation involving the U.S. Attorney’s Office in Philadelphia, the appellate opinion states.

Dougherty argued that the firm was privy to confidential communications, advised Dougherty concerning a grand jury subpoena, and was present during a search of his home.

He maintained that a conflict of interest exists because the firm intends to pursue numerous discovery requests, including files from the federal investigation, while simultaneously representing the defendants in the defamation case.

A Common Pleas Court judge denied both Dougherty’s request and a subsequent motion for reconsideration.

In its decision, the Superior Court panel determined that the subject matter of Pepper Hamilton’s prior representation of Dougherty is “substantially related” to the defamation case, and that a lawyer or lawyers with the firm had previously acquired confidential information from Dougherty, thus creating a conflict.

In the defamation case, Dougherty, who was running for a state Senate seat at the time of the alleged defamatory news articles, claimed that the defendants compared him to former State Sen. Vince Fumo, who was tried and convicted on public corruption charges.

In an April 13, 2008, editorial published by the defendants, it was said that Dougherty “denies sending goons to intimidate people whenever it suits his union’s interests. He denies accepting valuable favors from a lifelong friend and union colleague, as outlined in a federal criminal indictment against the friend. He denies that the feds found anything incriminating when they searched his home …”

Dougherty also asserted that that same month, the defendants published an editorial implying that Dougherty had accepted a bribe from a developer.

In the fall of 2012, the appellate ruling states, Pepper Hamilton attorney Michael E. Baughman stated that he intended to take action to obtain from the U.S. Attorney’s Office files related to alleged investigation into Dougherty, according to the Superior Court ruling.

“Dougherty averred, and Pepper confirmed, that Defendants would explore the subject of Pepper’s representation of Dougherty, i.e. the federal investigation, as part of its defense,” the ruling states. “Thus, Dougherty has established that during Pepper’s prior representation, a Pepper attorney ‘might have acquired confidential information related to the subsequent representation.”

The appellate panel determined that under the Pennsylvania Rules of Professional Conduct, Pepper Hamilton and its lawyers are barred from representing the media defendants in the defamation case.

The Superior Court panel was made up of Judges John T. Bender, Christine L. Donohue and John L. Musmanno, who wrote the decision.

In a concurring decision, Donohue wrote that contrary to the trial judge’s suggestion, Pepper Hamilton’s use of an “ethical screen” that would allow them to proceed in representing the defendants in the defamation case “is essentially irrelevant in these circumstances.”

“As Pepper Hamilton acknowledges, the existence of an ethical screen does not overcome a conflict of interest under Rule 1.9,” Donohue wrote.