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SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized.)

Twenty-First Century Rail Corporation, et al. v. New Jersey Transit Corp., et al. (A-101-10) (067652)

Argued January 31, 2012 -- Decided May 7, 2012

HOENS, J., writing for a unanimous Court.

The Court considers whether an attorney who was retained to provide advice to a client in connection with a dispute over delays on a construction project violated RPC 1.9 by subsequently undertaking the representation of another party involved in the construction dispute whose interests were adverse to those of the former client.

This lawsuit concerns the construction of a portion of the Hudson-Bergen Light Rail Transit System--the N30 Project. The N30 Project required the enlargement and rehabilitation of an existing tunnel, construction of a station within the tunnel, construction of an above-ground plaza, and other work. Defendant New Jersey Transit owns the overall project. Defendant PB Americas, Inc., served as the project engineer and was responsible for project design and engineering. Plaintiff Twenty-First Century Rail Corporation served as the prime contractor.

30 Project. In 2004, FKSB retained Bruce Meller, Esquire, a partner with the law firm of Peckar & Abramson, in connection with FKSB's work on the N30 Project. FKSB sought advice about its rights and obligations relating to a series of delays that were impeding its completion of the work assigned to it under its contract. The law firm provided a letter opinion, dated March 24, 2004. The letter reveals that FKSB was concerned that Washington Group would hold FKSB solely responsible for the delays. The letter also indicates that FKSB identified "design and constructability issues" as a cause of the delays. The law firm sent a bill to FKSB reflecting approximately twenty hours of work on the representation.

Approximately a year later, Meller received a phone call from Paul Killian, Esquire. Killian told Meller that he was representing FKSB and wanted Meller's impressions of Washington Group because FKSB was considering whether to enter into an agreement with it. Meller asserts that during their conversation Killian acknowledged the prior representation of FKSB by Meller's firm. Killian disputes awareness or discussion of that prior representation. Thereafter, the lawsuit at issue in this appeal was filed. Twenty-First Century, for which Washington Group was the contracting affiliate, and FKSB alleged that PB Americas was responsible for the N30 Project delays and the resulting costs due to defective project designs and slow responses to requests for corrections. Meller's law firm, Peckar & Abramson, represents PB Americas.

PKSB filed a motion to disqualify Peckar & Abramson based on the prior representation. The trial court denied the motion, concluding that many of the documents that would have been provided to the law firm for its use in preparing the March 24, 2004 opinion letter were publicly available, the 2004 representation was insignificant and immaterial, and the matters were not substantially related.

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The Appellate Division affirmed. 419 N.J. Super. 343 (App. Div. 2011). Although the panel disagreed with some of the trial court's reasoning, it determined that the record did not demonstrate an alignment between the nature of the confidences purportedly revealed in Peckar & Abramson's prior representation of FKSB and the issues involved in the current litigation, therefore the facts fell short of meeting the test for disqualification articulated by the Supreme Court in City of Atlantic City v. Trupos, 201 N.J. 447 (2010). Although the panel conceded that the N30 Project was the same project for both of Peckar & Abramson's representations, and that the parties, contracts, and delay issues were the same, it found those facts insufficient to constitute materiality or relevance. The Supreme Court granted FKSB's motion for leave to appeal. 206 N.J. 37 (2011).

HELD: Disqualification of the attorney for PB Americas is warranted in this case because details relating to the construction project, the relationship among the parties, and the attorney's prior representation of an adverse party, FKSB, demonstrate that the subsequent representation was prohibited by RPC 1.9(a).

1. RPC 1.9(a) provides that unless a former client consents in writing, the lawyer cannot later represent another client in the same or a substantially related matter if the clients' interests are materially adverse. A motion for disqualification pursuant to RPC 1.9(a) requires that the court balance the need to maintain high standards within the profession against the client's right to freely choose his or her counsel. However, a person's right to counsel of his or her choice is limited; there is no right to demand to be represented by an attorney disqualified because of an ethical requirement. (pp. 13-14)

2. In Trupos, the Court considered an attorney who had previously been retained by a municipality to represent it in tax appeals and who, in subsequent years, represented individual taxpayers in their tax appeals. The Court set forth a two-part test to determine whether matters were "substantially related" for the purposes of RPC 1.9. Under the Trupos test, matters are substantially related if (1) the lawyer for whom disqualification is sought received confidential information from the former client that could be used against the client in the subsequent representation of parties adverse to the former client; or (2) facts relevant to the prior representation are both relevant and material to the subsequent representation. The Court concluded in Trupos that the matters were not substantially related, explaining, in part, that there was nothing in the earlier litigation that was relevant to the subsequent representation, the similarities between the initial engagement and the challenged representation were only superficial, and the record did not demonstrate that the former client revealed any confidences to the lawyer. (pp. 14-16)

3. Although the parties in this case focus on the two-part Trupos test, RPC 1.9(a) begins with clear language prohibiting an attorney from engaging in the representation of an adverse client in the same matter unless the former client consents in writing. Therefore, if the prior and subsequent matters are indeed the same, the representation, absent written consent of the former client, is prohibited, and there is no need to conduct the inquiry into whether the matters are substantially related, or to apply the two-part Trupos test. (pp. 16-18)

4. Here, the matters are the same, involving the same discrete phase of the overall construction project, the same parties, and the same dispute. The March 24, 2004 letter prepared by Peckar & Abramson makes plain that counsel was aware of and considered the adverse positions of FKSB and PB Americas. Additionally, Meller admits that he informed PB Americas about the former work he had performed for FKSB. That, however, was not his obligation under RPC 1.9(a); instead, once he recognized that he had previously represented his new client's adversary in the same matter, it was his obligation to seek the former client's permission in writing. Nothing in the record suggests that this duty was discharged. It is not necessary to determine whether FKSB revealed confidences in the prior representation because disqualification, if the matter is the same rather than substantially related, does not turn on the identification of a revealed confidence. (pp. 18-21)

5. The clear proscription in RPC 1.9(a) against undertaking representation, in the same matter, of a client whose interests are materially adverse to a previously-represented client requires that the motion to disqualify be granted. (p. 22)

The judgment of the Appellate Division is REVERSED, and the matter is REMANDED to the Law Division for further proceedings consistent with this opinion.

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CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, ALBIN, and PATTERSON; and JUDGE WEFING (temporarily assigned) join in JUSTICE HOENS's opinion.

SUPREME COURT OF NEW JERSEY A- 101 September Term 2010 067652

TWENTY-FIRST CENTURY RAIL CORPORATION,

Plaintiff,

and

FRONTIER-KEMPER/SHEA/BEMO, JOINT VENTURE,

Plaintiff-Appellant,

v.

NEW JERSEY TRANSIT CORP.,

Defendant,

and

PB AMERICAS, INC., f/k/a PARSONS BRINCKERHOFF QUADE & DOUGLAS, INC.,

Defendant-Respondent.

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Argued January 31, 2012

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New Jersey Law