Marcum v. Hon. Ernesto Scorsone

Paul R. Plante, Jr. brought a shareholder derivative suit against Appellants, directors of Arthrodynamic Technologies Animal Health Division, Inc. (ADT), alleging that Appellants had violated various provisions of ADT’s shareholder agreement with respect to sales of stock. The law firm Miller, Griffin & Marks, PSC (MGM) was retained to represent Appellants. Plante moved to disqualify MGM as the counsel for Appellants, alleging that MGM’s participation in the action created a conflict of interest or at least an appearance of impropriety due to MGM’s representation of two Appellants in another suit and its representation of the board of directors, which included Plante, in giving advice on other litigation. The trial court concluded that disqualification of MGM was required based on the appearance of impropriety. Appellants subsequently sought a writ of prohibition to bar enforcement of the trial court’s order. The Court of Appeals denied the writ because Appellants had not shown irreparable injury. The Supreme Court reversed, holding (1) the trial court applied a disqualification standard that is no longer appropriate under the Rules of Professional Conduct; and (2) the trial court’s factual findings were insufficient to allow disqualification under the proper standard of a showing of actual conflict. View "Marcum v. Hon. Ernesto Scorsone" on Justia Law