CONFLICTS OF INTEREST – state attorney’s role in criminal probe bars his later involvement in a related civil suit
An attorney must discontinue his defense of a health care facility in a civil lawsuit closely related to a criminal probe where the lawyer was instrumental in his previous job as a state attorney (United States v. Villaspring Health Care Center Inc., E.D. Ky., Civ. No. 3:11-43-DCR, 11/7/11). The court found that the lawyer, Christopher A. Melton, an assistant attorney general in the Medicaid Fraud Control Unit inKentucky, had participated personally and substantially in the criminal investigation of abuse and neglect at Villaspring Health Care Center. Though no criminal charges were filed, the matter was forwarded to theU.S. attorney’s office.
Finding that the current civil action is the same ‘matter’ as the criminal probe in analyzing Rule 1.11 on successive government and private employment, the conflict was imputed to Melton and his firm but co-counsel was not disqualified. Nor did an opinion from an ethics hotline insulate Melton from being disqualified.
Judge Danny C. Reeves observed that “there is no standing requirement in Rule 1.11,” which the court said obviated any extended discussion of whether the issue of the attorney’s conflict was properly before the court, for under Rule 1.11 any party to a proceeding may move for an attorney’s removal even if the party is not a former client.
Upon leaving the attorney general’s office, Melton joined Weber & Rose, when a lawyer representing Villaspring asked him to assist in defending Villaspring in a False Claims Act lawsuit brought by the federal government. Thereupon Melton contacted the Kentucky Attorney General’s Office to assure that the investigation into Villaspring was inactive. He also consulted with the ethics officer at his firm, and received a hotline opinion from the Kentucky Bar Association stating that the representation did not constitute a conflict.
Petitioning to disqualify Melton, his firm, and all of his co-counsel in the False Claims Act action, the government applied the Kentucky Rules of Professional Conduct as directed by the federal court’s local rules. Judge Reeves ruled that Melton and his firm must step down as counsel
Melton’s conflict did not arise from federal employment, but Judge Reeves observed “there is no standing requirement in Rule 1.11, so theUnited Statesdoes not need to be a former client of Melton’s to seek disqualification.” An issue of standing would be needed only if the court were relying on Rule 1.9 to disqualify Melton.
Judge Reeves noted that Rule 1.11(a)(2), which prohibits a former government attorney from representing a client in connection with a matter in which the lawyer participated “personally and substantially” as a public officer or employee, has as a caveat, “unless the agency gives informed consent, confirmed in writing.” The state attorney general’s office neither consented to Melton’s representation of Villaspring nor did it render its informed consent in writing.
The court concluded that Melton must be disqualified due to this violation “and the appearance of impropriety that it creates.”