Corpac v. Rubin & Rothman, LLC

Citations: 10 F. Supp. 3d 349; 2013 U.S. Dist. LEXIS 110408; 2013 WL 3992954Docket: No. 10-CV-4165 (ADS)(GRB)

Court: District Court, E.D. New York; August 1, 2013; Federal District Court

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John T. Corpac, representing himself and a potential class, initiated a lawsuit against Rubin, Rothman, LLC under the Fair Debt Collection Practices Act (FDCPA), alleging false representation regarding attorney involvement in debt collection communications. The court, on January 28, 2013, ordered co-defense counsel Robert L. Arleo to withdraw due to a lack of court-approved settlement, citing potential conflicts stemming from Arleo's previous association with the plaintiffs' attorney in similar cases. Arleo subsequently sought reconsideration of this order, not disputing his exclusion from negotiations and trial but requesting permission to serve as co-counsel if a new class notice plan were approved. The court denied Arleo’s motion, emphasizing that motions for reconsideration in the Eastern District of New York are strictly governed by Local Rule 6.3 and generally require the moving party to present new, controlling information or identify clear errors in the court's prior ruling. Such motions should not serve as a platform to reargue previous positions or introduce new theories and are considered an extraordinary remedy to ensure judicial efficiency. The court maintains discretion over these motions.

Arleo’s motion to reconsider the January 28, 2013 Order was denied by the Court, which found that Arleo failed to demonstrate grounds for reconsideration. Arleo claimed the Order contained clear errors by not considering controlling legal precedents and argued it resulted in manifest injustice by hindering his right to choose legal counsel. He contended the Order was contradictory regarding his appearance after the negotiation of a class settlement agreement. However, the Court clarified that it never deemed Arleo's appearance likely proper; rather, it suggested that it would have been permissible only if the settlement had been approved. The Court emphasized that its ruling on Arleo's withdrawal was justified, given the potential for conflict of interest due to his prior co-counsel relationship with Horn in related FDCPA cases. Furthermore, Arleo's cited cases were deemed inapplicable, as they addressed different issues than those relevant to the January 28 Order. The Court confirmed it had acknowledged the need for careful analysis of ethical issues, aligning with the principles outlined in the Second Circuit's jurisprudence.

The Court applied Second Circuit precedent in its January 28, 2013 Order, considering the co-counsel relationship of Arleo and Horn in FDCPA cases and relevant case law, including Hull v. Celanese Corp., General Motors Corp. v. City of New York, and Filippi v. Elmont Union Free School District Board of Education. Arleo's reliance on W.T. Grant v. Haines and Ceramco, Inc. v. Lee Pharmaceuticals was deemed misplaced as those cases involved disqualification issues not relevant to the January 28 Order. Arleo also cited In re Austrian and German Bank Holocaust Litig. and In re Agent Orange Product Liability Litig. to argue that traditional attorney representation rules do not apply in class action settlements. The Court disagreed, finding Austrian and German Bank inapplicable since it dealt with a forfeiture claim, not disqualification, and noted that Agent Orange presented a distinct situation. In Agent Orange, the Second Circuit emphasized that disqualification motions in class actions require a nuanced balancing of interests, citing factors such as the length of litigation, potential conflicts among class counsel, extensive discovery, and the risk of delaying compensation for class members.

The case does not feature unique circumstances that would warrant reconsideration of the January 28, 2013 Order. The Defendant has been represented by Joseph Latona throughout the litigation, while co-counsel Arleo only joined the case over a year after it began. Unlike other complex cases, such as the Agent Orange litigation with multiple law firms turning adversarial, Arleo and Horn have consistently been opposing counsel. Arleo’s argument for reconsideration, claiming a denial of the Defendant's right to choose legal counsel, was found to lack merit. The Court acknowledged the Defendant's right but determined that ethical rules necessitated Arleo's disqualification. The concept of “manifest injustice” was discussed, highlighting that it requires a clear and observable error by the trial court. The Court concluded that no such error occurred in its prior ruling and stated that extraordinary circumstances justifying reconsideration were absent. Consequently, Arleo’s motion for reconsideration was denied.

Arleo submitted a letter to the Court on February 26, 2012, claiming that the Objector, Patrick Sejour, and his counsel made false allegations against him in their opposition to Arleo's motion for reconsideration. The alleged false claims included characterizations of Arleo’s motion as "frivolous," accusations of making a "mockery of Court rules," and other derogatory remarks questioning his professionalism. Arleo requested that the Court require the Objector's counsel to justify these accusations. The Court determined that Arleo’s motion for reconsideration was not frivolous and disapproved of the derogatory language used by the Objector's counsel. However, the Court denied Arleo’s request for further action against the Objector’s counsel but cautioned all attorneys involved to refrain from using inflammatory language in future filings, warning that failure to comply could lead to judicial action. Ultimately, Arleo's motion for reconsideration was denied.