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Westinghouse Elec. Corp. v. Gulf Oil Corp - 588 F.2d 221 (7th Cir. 1978)

Rule:

The determination of whether there is a substantial relationship turns on the possibility, or appearance thereof, that confidential information might have been given to the attorney in relation to the subsequent matter in which disqualification is sought. The rule thus does not necessarily involve any inquiry into the imponderables involved in the degree of relationship between the two matters but instead involves a realistic appraisal of the possibility that confidences had been disclosed in the one matter which will be harmful to the client in the other. The effect of the ABA Code of Prof'l Responsibility Canons 4 and 9 is necessarily to restrict the inquiry to the possibility of disclosure; it is not appropriate for the court to inquire into whether actual confidences were disclosed.

Facts:

A number of parties having interests in the mining of uranium filed an action against defendant Gulf Oil Company, alleging that there was an international cartel that had fixed and increased the price of uranium to United States’ purchasers. Another defendant in a suit was represented by a law firm that previously performed legal work for Gulf and the latter moved to disqualify the law firm. The district court denied the request, after finding that there was not a substantial relationship between the matters encompassed by the prior representation and the pending price fixing case. Gulf appealed.

Issue:

Did the district court err in not granting the motion to disqualify the law firm of the other defendant?

Answer:

Yes.

Conclusion:

The appellate court reversed and remanded, finding thatwhile the district court had invoked the proper test, it erred in its application. concluding that counsel could have obtained confidential information through its prior representation of defendant Gulf that could compromise defendant's current defense. The court also rejected an argument that Gulf had waived its right to move for disqualification.

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