## Facts

- Advanced Manufacturing Technologies, Inc. (AMT) sued Motorola, Inc. in federal court in Arizona; the case had been litigated for about three years at the time of the order.
- Motorola was represented by Douglas L. Irish of Lewis and Roca, LLP, beginning no later than the case’s removal to federal court in 1999.
- Merlin Dean Corley, a long-time Motorola employee who had retired, was an important factual witness regarding events connected to Motorola’s machine shop and AMT’s claims.
- In advance of Corley’s depositions, Corley had multiple private conferences and phone calls with Irish.
- Corley appeared for videotaped depositions noticed by AMT’s counsel on September 20, 2001 and November 27, 2001; Irish attended and stated on the record that he represented Motorola.
- During the first deposition, when asked whether he was represented, Corley testified that he was represented by Irish and Lewis and Roca; Irish did not correct or qualify the statement on the record.
- Later, facts emerged suggesting Corley’s interests could be adverse to Motorola’s, including information that could support a potential claim by Motorola against Corley tied to an alleged “secret agreement” relating to AMT and the machine shop transaction.
- Corley, as a non-party, moved under Rule 26(c) for a protective order and also moved to disqualify Irish and Lewis and Roca from continuing to represent Motorola, arguing their prior dealings created a conflict.
- The district judge referred the motion to the magistrate judge for resolution as a pretrial matter.

## Issues

1. Whether the magistrate judge had authority under 28 U.S.C. § 636(b)(1)(A) to decide a motion to disqualify counsel.
2. Whether Irish’s pre-deposition communications with Corley, combined with Irish’s silence when Corley testified Irish represented him, created an attorney–client relationship or a reasonable appearance of one.
3. If a conflict existed, whether the proper remedy was complete disqualification of counsel from the case or narrower limits and protective measures.

## Decision

- The court held that a motion to disqualify counsel is a non-dispositive pretrial matter that a magistrate judge may decide under 28 U.S.C. § 636(b)(1)(A).
- The court granted the motion in part and denied it in part.
- The court declined to disqualify Lewis and Roca from representing Motorola in the entire litigation.
- The court imposed restrictions aimed at preventing Motorola’s counsel from acting directly adverse to Corley in connection with the dispute and from taking unfair advantage of the prior contacts with him.
- The court granted Rule 26(c) relief in part, using protective limitations rather than a full attorney substitution.

## Legal Principles

- A magistrate judge may resolve a disqualification motion as a non-dispositive pretrial matter under 28 U.S.C. § 636(b)(1)(A).
- Conflicts principles (including Restatement (Third) of the Law Governing Lawyers § 121) bar representation when there is a substantial risk the lawyer’s work for a client would be materially and adversely affected by duties to another client, a former client, or a third person, absent required consent.
- An attorney–client relationship may be found based on objective manifestations and a reasonable person’s understanding, not solely on a signed retainer; conduct that creates an appearance of personal representation can trigger duties even in the corporate-witness setting.
- When a lawyer interacts privately with a corporate employee or former employee who is a witness, the lawyer must clearly identify whom the lawyer represents and must correct statements that would reasonably mislead the witness into thinking the lawyer is the witness’s lawyer.
- Disqualification is not automatic; courts may use narrower remedies—such as limiting counsel’s ability to examine a witness or act against the witness—when that addresses the conflict while reducing unnecessary prejudice to the represented party.

## Conclusion

The court found that Corley’s dealings with Motorola’s counsel, together with counsel’s failure to correct Corley’s on-the-record assertion of representation, created at least a reasonable appearance of an attorney–client relationship that became problematic once Corley’s interests diverged from Motorola’s; rather than removing Motorola’s counsel from the entire case, the court granted the motion only in part and imposed targeted restrictions and limited protective-order relief to address the conflict and fairness concerns.


Advanced Manufacturing Technologies, Inc. v. Motorola, Inc., 2002 WL 1446953 (2002)