Frederick J. Fein v. Marlos L. Chenault , 330 Ga. App. 222 ( 2014 )

THIRD DIVISION
BARNES, P. J.,
BOGGS and BRANCH, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules/
October 22, 2014
In the Court of Appeals of Georgia
A14A0925. FEIN et al. v. CHENAULT et al. BA-046
BARNES, Presiding Judge.
Florida attorney Frederick J. Fein and his client Continental Tire The Americas,
LLC (Continental), filed a direct appeal of the trial court’s order in this personal
injury case finding that Fein violated the Georgia Rules of Professional Conduct but
declining to revoke his pro hac vice status. Instead, the court restricted Fein’s
advocacy by designating local counsel as lead counsel for defendant Continental and
directing Fein not to prepare or file pleadings, contact the court or its staff, or present
argument or evidence at any future court proceeding. The court noted that Fein would
be permitted to attend all future proceedings, confer with his client and local counsel,
and sit at counsel table during court. Because this court lacks jurisdiction to consider
this issue on direct appeal while the case remains pending in the trial court, we must
dismiss the appeal.
The underlying case arose when Marlos Chenault and his wife filed suit against
multiple defendants after Chenault was involved in a car wreck, allegedly caused by
a defective tire, that resulted in his paralysis. The Chenaults brought product liability
and negligence claims against Continental and General Motors Corporation (GM).
GM is not involved in the issue before this court now. Discovery disputes regarding
the disclosure of certain rubber compound formulas and other information
Continental Tire deemed to be trade secrets led to a telephone conference with the
trial court, which resulted in the court ordering Continental on May 23, 2013, to
disclose certain information pursuant to a protective order by June 11, 2013.
On May 31, 2013, Continental filed an “Emergency Motion for
Reconsideration or, in the Alternative, Request for a Certificate of Immediate Review
of the Court’s Order of May 23, 2013,” arguing that the telephonic hearing was
inadequate to provide the trial court with the necessary case law and evidence, that
the information was “highly proprietary trade secrets that are not subject to
disclosure,” that its production would cause irreparable harm, and that Chenault had
not shown sufficient need for the information. It argued that “courts across the county
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have repeatedly found that tire companies’ rubber compound formulas . . . are trade
secrets whose secrecy and value in being maintained as secrets justify excluding them
from the discovery process,” even with a protective order. Continental attached an
affidavit from its director of product analysis, who averred that the company’s rubber
compound formulas are so highly protected they “are not disclosed even pursuant to
a protective order.”
Chenault responded on May 31, 2013, and argued that the information sought
was not a trade secret and was crucial to his claim. He further argued that the cases
cited by Continental for the proposition that courts have refused to allow discovery
of the information sought actually dealt with different information, and that “a
number of other courts have in fact ordered both the disclosure of halobutyl content
in tires, as well as the full formulas.”1 Chenault attached orders from Missouri,
Florida, and New York courts directing Cooper Tire Company to disclose information
regarding the content or existence of halobutyl in the inner liner of the subject tires,
and an order from a Montana court directing Continental to disclose tire compound
formulas.
1
Halogenated butyl (halobutyl) rubber is an expensive synthetic rubber
compound used to make a tire’s inner liner less permeable to air. Chenault sought to
discover the percentage of halobutyl in the inner liner of the tire that blew on his car.
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The ten-day window for issuing a certificate of immediate review passed
without a ruling from the trial court. On June 4, 2013, Continental filed an emergency
motion to stay that portion of the trial court’s May 23 order directing it to produce
certain information by June 11, 2013. Chenault opposed the stay, noting in a brief
filed on June 10, 2013, that Continental was citing to a legal standard inapplicable in
Georgia, which required movants to show that the disclosure of confidential
information was “necessary.” Chenault also pointed out that while Fein represented
that a court had never required his clients to produce rubber compound information,
he was lead counsel in a Florida case and a DeKalb County, Georgia, case, in which
the tire manufacturer he represented was ordered to disclose that information.
On June 11, 2013, the trial court denied Continental’s motion to stay and for
reconsideration, reminding the parties of the existing protective order and giving
Continental until June 14, 2013, to produce the documents and information
previously ordered. On June 13, 2014, Continental requested a certificate of
immediate review of the court’s June 11 order, which the court denied later that same
day.
On June 14, 2013, Continental filed a notice of appeal from the court’s
discovery orders of May 23, 2013 and June 11, 2013, and also filed an application for
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interlocutory appeal with this court. This court dismissed the interlocutory appeal on
July 11, 2013, and dismissed the direct appeal on August 20, 2013, finding in both
cases that the discovery issue was neither an exceptional one reviewable absent a
certificate of immediate review, nor subject to the collateral source exception to the
final judgment rule.
Meanwhile, on June 22, 2013, the trial court sua sponte issued a rule nisi,
placing the parties “on notice that it is considering revoking the pro hac vice status
of Frederick J. Fein, Esq., based upon material false statements made to the Court
regarding legal authority and factual matters during his representation[,] which
misstatements may be detrimental to the prompt, fair and efficient administration of
justice in this case.” It ordered Fein and all other counsel for Continental to appear
on September 4, 2013, for a hearing on the issue.
On June 26, 2013, Continental moved to vacate the rule nisi, arguing that Fein
did not know what false statement the court referred to, that the court appeared to
have already determined his culpability, and that the court had entered the order
without giving him a chance to refute it. All previous pleadings had been signed only
by local counsel, but the motion to vacate was the first one that also included Fein’s
signature as counsel for Continental. All subsequent pleadings included Fein’s
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signature until the trial court’s October 2013 order at issue here. The trial court
denied the motion to vacate the rule nisi order on July 26, 2013.
Both parties filed motions on July 29, 2013, with Chenault moving to compel
Continental to provide the discovery the trial court had previously ordered it to
produce and Continental filing a motion to recuse the trial court. On July 30, 2013,
Continental filed a Rule 5.2 certificate of service of discovery of supplemental
answers and objections to Chenault’s interrogatories and requests for production of
documents.
On July 31, 2013, the trial court issued an order denying Continental’s motion
to recuse, finding the motion timely but lacking a basis as a matter of law. On August
1, 2013, the court ordered Continental to respond to Chenault’s motion to compel by
August 16, 2013, and the next day Chenault filed a motion seeking sanctions for
discovery abuse. On August 6, 2013, Continental requested a certificate of immediate
review of the court’s order denying its motion to recuse.
On August 8, 2013, the trial issued an amended rule nisi, directing that
defense counsel, including pro hac counsel, should be prepared to
address the question of whether or not pro hac counsel violated Georgia
Rule of Professional Conduct 3.3 during a telephone conference with the
Court regarding Plaintiff’s Interrogatories and Request for Production
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of Documents in May of 2013. Specifically, the Court is concerned that
pro hac counsel made false statements regarding the law to the tribunal,
failed to disclose legal authority contrary to his position which was
known to him, and failed to disclose material facts to the tribunal which
were in direct contradiction of his statements made on personal
knowledge regarding the production of evidence in this case. If proven,
these misstatements may be detrimental to the prompt, fair and efficient
administration of justice in this case and may be grounds for a
revocation of Mr. Fein’s pro hac status pursuant to Rule 4.4 (d) (4) and
4.4 (f) (1) (b).
(Emphasis supplied.)
On August 14, 2013, Fein filed a renewed Motion to Vacate Rule Nisi of June
22, 2013 (the first rule nisi), arguing that, although the trial court added qualifying
language in its amended rule nisi, it had not vacated its initial rule nisi, which had
already been cited by opposing counsel in other cases as proof that Fein had been
found to have exhibited a “pattern of deception” in representing his client. Fein also
objected to and moved “to clarify” the amended rule nisi, contending that he still did
not know what he failed to disclose or misrepresented to the court.
Two days later, Continental filed an opposition to Chenault’s motion to compel
and for attorney fees, arguing that it had “bent over backwards to produce hordes of
information about the tire” at issue in this case. Continental included affidavits from
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company engineers stating that Chenault’s discovery requests were too broad to
comply with and that because this particular unique tire had been developed with GM
for this particular vehicle, information about other tires was irrelevant.
Continental also responded to Chenault’s motion for sanctions on August 14,
2013. Its brief began, “According to Plaintiffs, no good deed should go unpunished,”
and asserted that the company had gone above and beyond its required duty to locate
certain information, the late production of which had resulted in Chenault’s motion
for sanctions. Continental accused Chenault of trying to turn the case into one about
a “discovery tort,” rather than a “ 7[-]year-old, used, worn-out tire, which never
should have been in service on the day of this accident. . . .” Attached to the motion
were affidavits from Fein’s local counsel attesting to the parties’ agreement about
Continental’s deadline in supplementing its discovery responses and from
Continental’s senior counsel regarding the company’s efforts to locate the
information sought.
An attorney made an entry of appearance on Fein’s behalf, and on August 28,
2013, Fein filed a supplement to his objection to the trial court’s amended rule nisi
and another motion to clarify it, noting that in a discussion with the court’s staff
attorney, Fein’s counsel had been referred to a specific page in one of Chenault’s
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pleadings. In that pleading, Chenault argued that Fein said he had never been
required to produce rubber compound information and submitted orders from other
courts. Fein argued in his supplemental objection that what he actually said during
the telephone conference was that “he has never produced such information in any
case he has handled, a statement which remains true to this day,” because the orders
directing Continental to produce that information were later vacated. Therefore,
Continental did not produce the information, he concluded, and his statement to the
trial court in this case was accurate. Fein submitted an affidavit attesting to those
facts, and attached the court orders vacating the previous orders requiring Continental
to produce the disputed information.
In reply, on September 3, 2014, Chenault argued that Fein’s response was
“disingenuous.” First, he contended, whether or not Fein used the word “required”
during the telephone conference was not controlling, because his argument left the
court with the “clear impression” that a order directing Continental to produce the
halobutyl information would be “completely ‘out of left field’” and that “ordering its
production would be totally unheard of.” Chenault quoted from a hearing transcript
in a DeKalb County case in which Fein similarly argued he had never been required
to produce this information, and that transcript is included in this record on appeal.
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Chenault further argued that Fein’s brief was misleading because the orders to
produce were vacated solely as a condition of settlement.
After the September 4, 2013, hearing, the court found that Fein had
intentionally made statements to the court that were “deliberately calculated to cause
the Court and opposing counsel to infer a fact that was not true so as to gain
advantage for his client.” The trial court found that these statements violated the
Georgia Rules of Professional Conduct, but declined to revoke Fein’s pro hac vice
status. Instead, the court restricted Fein’s advocacy by designating local counsel as
lead counsel for defendant Continental. The trial court also directed that Fein was not
allowed to prepare or file pleadings, contact the court or its staff, or present argument
or evidence at any future court proceeding, although he would be permitted to attend
all future proceedings, confer with his client and local counsel, and sit at counsel
table during court.
Fein first asked the trial court to issue a certificate of immediate review of its
order, which the court denied. Fein nevertheless filed an application for interlocutory
appeal, which this court dismissed on November 26, 2013, Case Number A14I0051.
We held that an appellate court generally will not review a trial court’s exercise of its
discretion to grant or deny a certificate of immediate review, citing Scruggs v.
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Georgia Dept. of Human Resources, 261 Ga. 587, 588 (1) (408 SE2d 103) (1991); B
& D Fabricators v. D. H. Blair Investment Banking Corp., 220 Ga. App. 373, 376 (3)
(469 SE2d 683) (1996). We further held that this is not one of those extraordinary
cases described in Waldrip v. Head, 272 Ga. 572 (532 SE2d 380) (2000), that qualify
for an exception to the certificate requirement because the trial court’s actions would
preclude appellate review of a substantive issue. We thus dismissed the application
due to Continental’s failure to comply with the interlocutory procedures of OCGA §
5-6-34 (b).
Fein also filed a direct appeal of the trial court’s order, and contends that the
trial court’s order infringes on Continental’s fundamental right to counsel of its
choosing and is an “unwarranted disqualification” based on a misrepresentation that
never occurred. After this appeal was docketed, Chenault moved to dismiss it on
jurisdictional grounds, arguing that the trial court’s order regarding Fein’s status as
pro hac vice counsel is neither final nor otherwise appealable, citing Board of Regents
of the Univ. System of Ga. v. Canas, 295 Ga. App. 505 (672 SE2d 471) (2009). In
Canas, we held that
A necessary prerequisite for a direct appeal is that the judgment or order
appealed from be final or otherwise appealable. A judgment is directly
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appealable as a final judgment where the case is no longer pending in
the court below, except as provided in Code Section 5-6-35 (concerning
cases requiring an application for appeal). . . . Generally, where an
appellant fails to comply with the interlocutory appeal procedures set
forth in OCGA § 5-6-34 (b) and an interlocutory ruling is not otherwise
appealable, this Court lacks jurisdiction over a direct appeal filed from
an interlocutory ruling and must dismiss it.
(Citation and punctuation omitted.) Id. at 506 (1).
Besides final judgments, OCGA § 5-6-34 allows “the direct appeal of
judgments or orders that may have an irreparable effect on the rights of parties, such
as rulings in contempt, injunction, and mandamus actions.” In re Paul, 270 Ga. 680,
682 (513 SE2d 219) (1999). See OCGA § 5-6-34 (a) (2)-(12). Additionally, parties
may directly appeal a “collateral order,” even if the case remains pending in the trial
court, if “the issue is substantially separate from the basic issues presented in the
complaint, an important right may be lost if review had to await final judgment, and
nothing further in the underlying action can affect the issue on appeal.” In re Paul,
270 Ga. at 682-683.
Fein stated in his response to Chenault’s motion to dismiss that “Appellants do
not contend that the Disqualification Order is a collateral order and will not address
Appellees’ arguments regarding the collateral order doctrine.” Instead, he argues, he
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has a right to direct appeal based on Stevens v. Thomas, 257 Ga. 645 (361 SE2d 800)
(1987). The Georgia Supreme Court in Stevens found untimely the appeal of an order
disqualifying an attorney from representing two plaintiffs in a class action suit
because of disciplinary rules violations, reasoning that the disqualification was a
sanction that took place immediately, and also noting that the court had subsequently
affirmed a contempt citation related to the sanction in Brown v. Thomas, 257 Ga. 68(354 SE2d 830) (1987). Stevens, 257 Ga. at 647 (1). The court then remanded the case
for the trial court to determine whether an attorney fee award was imposed “as a
penalty for contempt or as a penalty for violations of the disciplinary rules.” Id.2
In contrast, Chenault argues that the disqualification order is not directly
appealable per Cherry v. Coast House, Ltd., 257 Ga. 403 (359 SE2d 904) (1987), a
case from the same term as Stevens. In Cherry, the Supreme Court held that an order
disqualifying an attorney from representing a client would ordinarily require an
application for interlocutory appeal pursuant to OCGA § 5-6-34 (b). Cherry, 257 Ga.
2The only two grounds on which the Supreme Court in Stevens could have
relied in holding that the disqualification order was immediately appealable were
either: (1) as an exception to the final order requirement, which are listed in OCGA
§ 5-6-34 (a), none of which are applicable here, or (2) as a collateral order reviewable
before the trial court entered a final judgment or order in the case. For purposes of
this analysis, however, whether Fein is actually arguing the collateral order doctrine
or not is irrelevant.
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at 405 (2). In that case, however, because summary judgment grants were before the
court on direct appeal, the Supreme Court also considered the disqualification orders.
Id.
Fein argues that the Supreme Court’s pronouncement in Stevens controls this
appeal, being the latest on the issue of whether an order disqualifying a lawyer is
directly appealable before a final order or judgment is entered in the trial court. This
court attempted to reconcile the conflicting cases in Settendown Public Utility v.
Waterscape Utility, 324 Ga. App. 652, 654 (751 SE2d 463) (2013), writ of cert. and
motion for reconsideration denied (Supreme Court Number S14C0436, March 3,
2014, March 28, 2014) and Lassiter Properties v. Davidson Mineral Properties, 230
Ga. App. 216, 217-218 (495 SE2d 663) (1998). In addition to Settendown and
Lassiter, this court has held in other cases that attorney disqualification orders must
be brought by application for interlocutory appeal after the issuance of a certificate
of immediate review and are not directly appealable. See Amado v. City of Atlanta,
228 Ga. App. 791 (492 SE2d 761) (1997); Ewing Holding Corp. v. Egan-Stanley
Investments, 154 Ga. App. 493, 496 (1) (268 SE2d 733) (1980).
In considering whether this court has jurisdiction to address the direct appeal
of the trial court’s order regarding Fein’s pro hac vice status, however, we need not
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determine whether an order disqualifying an attorney from representing a client is
directly appealable or not under Stevens, because Fein was not disqualified. Rather,
the trial court decided not to revoke Fein’s pro hac admission to practice in this case,
finding that to do so “would be too harsh of a remedy for the harm incurred.” Instead,
the trial court designated the two local counsel as lead counsel and directed that only
those attorneys “prepare and file pleadings, contact the Court, or present evidence or
argument at any future motions, hearings, or trials.” The court further found that Fein
would be permitted to attend any proceedings, confer with local counsel and his client
at will, and sit at counsel table, but would not be allowed to prepare or file any
documents, deal directly with the court of its staff, “or otherwise act as lead counsel.”
Finally, we note that important public policy considerations compel against
allowing a direct appeal in this context. In holding that an attorney’s disqualification
was not subject to the collateral order docrine exception to the requirement of a final
judgment or order under the Federal Rules of Civil Procedure, the United States
Supreme Court observed,
We also decline to view the disqualified attorney’s personal desire for
vindication as an independent ground for interlocutory appeal. An
attorney who is disqualified for misconduct may well have a personal
interest in pursuing an immediate appeal, an interest which need not
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coincide with the interests of the client. As a matter of professional
ethics, however, the decision to appeal should turn entirely on the
client’s interest.
Richardson-Merrell v. Koller, 472 U.S. 424, 434-435 (III) (A) (105 SCt 2757; 86
LE2d 340) (1985). The Supreme Court further held that “orders disqualifying counsel
in civil cases are not completely separate from the merits of the action,” because
“[a]ppellate review of orders disqualifying counsel for misconduct may be entwined
with the merits of the litigation as well.” (Citation and punctuation omitted.) Id. at
439 (III) (B). While acknowledging that an order disqualifying counsel may impose
significant hardship on litigants and “tempt courts of appeals to assert jurisdiction,”
the Supreme Court quoted the following from a Third Circuit case addressing the rule
that only final judgments are reviewable in the federal courts:
It would seem to us to be a disservice to the Court, to litigants in general
and to the idea of speedy justice if we were to succumb to enticing
suggestions to abandon the deeply-held distaste for piecemeal litigation
in every instance of temptation. Moreover, to find appealability in those
close cases where the merits of the dispute may attract the deep interest
of the court would lead, eventually, to a lack of principled adjudication
or perhaps the ultimate devitalization of the finality rule as enacted by
[the legislature].
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(Citations and punctuation omitted.) Id. at 440 (IV).
Chenault’s motion to dismiss is hereby GRANTED. His motions for sanctions
and to supplement the record are DENIED.
Appeal dismissed. Boggs and Branch, JJ., concur.
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