Murray v. Metropolitan Life Insurance Compan

583 F.3d 173 (2nd Cir. 2009)

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Nature of the Case

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Facts

In 1915, D converted from a stock life insurance company to a mutual insurance company. On April 7, 2000, D completed a months-long process of demutualization back to a stock insurance company. Debevoise served as D's corporate counsel in that transaction. On April 18, 2000, Ps filed this class action lawsuit alleging that D violated federal securities laws by misrepresenting or altogether omitting certain information from the materials provided to its policyholders during the demutualization process. D invoked the attorney-client privilege to prevent Ps' discovery of particular communications between D and its in-house and outside counsel. The district court denied a protective order. It reasoned that Ps were the owners of the mutual company and were, therefore, clients of Debevoise during the demutualization. The trial was set to begin on September 8, 2009. Ps moved to disqualify Debevoise on July 31, 2009--more than nine years after the action was commenced, more than two years after the court ruled that Ps were clients of Debevoise, and five weeks before trial. Ps argued that Debevoise had been counsel to Ps in the demutualization and cannot now jump sides to become adverse to Ps at trial. Ps also argued the witness-advocate rule, because four Debevoise lawyers are scheduled to testify about disclosures and documents related to the demutualization. D argued laches, that Ps were the clients of that company's corporate counsel and denied that the testimony of the Debevoise lawyers would be adverse to D (or even significant). D also charged that the motion was made for improper tactical purposes. The district court granted the motion and disqualified Debevoise. D appealed.