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A New Jersey appeals court has affirmed a ruling disqualifying a plaintiffs lawyer and his firm in a whistleblower suit against a medical device company.

The Appellate Division upheld the disqualification of Kevin Barber and his firm, Niedweske Barber Hager of Morristown, New Jersey, from representing the plaintiff in Sanchez v. Maquet Getinge Group. The ruling affirmed a 2016 decision by an Essex County judge who cited Barber's failure to promptly disclose that his client had obtained privileged documents from the company. Judges Jose Fuentes, Harry Carroll and Greta Gooden Brown affirmed the decision May 23, rejecting the plaintiff's claim that the defendant had waived any privilege for the documents. The appeals court also ruled that the judge below did not commit plain error by disqualifying Barber and his firm without holding an evidentiary hearing.

Barber's client, Oscar Sanchez, was chief quality, regulatory and compliance officer for Maquet Getinge Group, a German company, from 2013 until his termination in April 2015. He filed a whistleblower suit against the company in July 2015, and in October 2015 the company served Sanchez with a request for production of confidential or proprietary documents he took from the premises while working there.

Sanchez responded to the defendant's request for documents in February 2016, and the defendant claimed that many of the items produced were improperly taken from Maquet by Sanchez while he worked for the company but without its knowledge or consent. What's more, Maquet contended that many of the items were subject to attorney-client privilege, and that they included correspondence between Maquet employees regarding Food and Drug Administration compliance issues, results of third-party audits, budgeting issues and quality processes and procedures.

Barber conceded that he had produced communications between his client and the company's in-house counsel, Abraham Ronai, but argued that the attorney-client privilege between Sanchez and Ronai had been waived when Ronai gave a deposition in an unrelated arbitration hearing. Maquet moved to preclude the plaintiff from using the documents as evidence in his whistleblower case and to remove Barber and Niedweske Barber from continuing to represent the plaintiff.

The judge found Maquet had not waived attorney-client privilege, citing case law invoking the privilege to protect communications expressed though its agents. The judge ruled for disqualification of Barber and his firm, finding they “knew or should have known the material was privileged,” and that plaintiff's counsel failed “to promptly notify the opposing side that they had received its privileged information.”

The Appellate Division panel noted that Sanchez signed an agreement not to disclose confidential information when he was hired by the company. He agreed to return any confidential information on his separation from the company.

Two months before he was dismissed, Sanchez received a written disciplinary warning as a result of an investigation into complaints about his deportment and conduct with colleagues and employees who report to him, the appeals court said. After receiving these complaints, he told Senior Vice President of Marketing Philip Freed that he had retained “all kinds of Maquet-owned documentation,” including two executives' hard drives and a binder of emails and documents. Freed said Sanchez told him he intended to use those files to carry out retribution on Maquet if they took any action against him.

Sanchez claimed the documents in question were not subject to attorney-client privilege because they did not include any advice, input or opinions from the company's in-house lawyer. He also said that merely including a “cc” with Ronai's name on communications did not bring them under the purview of attorney-client privilege.

The motion judge applied the multifactor test established by the N.J. Supreme Court in a 2010 decision, Quinlan v. Curtiss-Wright. On appeal, Sanchez claimed the motion judge should have conducted an evidentiary hearing to properly apply the Quinlan factors. But the appeals court called that argument “both untimely and legally unnecessary.”

The judge below did not commit plain error by disqualifying plaintiff's counsel without first conducting an evidentiary hearing, the panel said. Recognizing that the Supreme Court has directed that a motion to disqualify calls for the court to balance the need to maintain the highest standards of the profession against a client's right to freely choose his counsel, the appeals court said that “a party's possession of its opponent's privileged material weighs in favor of disqualification because '[l]ess severe remedies such as assessments of expenses or counsel fees fail to adequately address'” the violation of RPC 4.4(b), which says lawyers who receive documents that may have been inadvertently sent must stop reading immediately and contact the sender.

“Plaintiff's counsel's unreasonable delay in disclosing this information rendered futile any attempt to mitigate this harm,” Fuentes wrote for the court. “This case is still in its early stages. The only way left to salvage this cause of action is to permit plaintiff a reasonable time to obtain substitute counsel.”

Ashley Brightwell of Alston & Bird in Atlanta, who represented Maquet, said of the ruling, “The appellate court obviously agreed with the trial court that on this record, the misappropriation and misuse of both confidential and internally privileged documents was something that could not be countenanced.  We are very pleased with the decision.”

Barber did not return a call about the case. Nor did Cindy Vogelman of Chasan Lamparello Mallon & Capuzzo in Secaucus, New Jersey, who represented Barber and his firm.