## Facts

- Cinema 5, Ltd. filed an antitrust action in the Southern District of New York alleging that Cinerama, Inc. and others conspired to acquire control of Cinema 5 through stock purchases to monopolize and restrain competition in New York City’s first-run theater market.
- Cinerama was a motion picture distributor and operator of theater chains.
- Attorney Manly Fleischmann simultaneously was a partner in two firms: Jaeckle, Fleischmann & Mugel (Buffalo) and Webster, Sheffield, Fleischmann, Hitchcock & Brookfield (New York City), dividing his time between them.
- The Buffalo firm was then representing Cinerama in two pending antitrust cases in the Western District of New York involving alleged discriminatory and monopolistic motion picture licensing and distribution practices in the Rochester and Buffalo areas.
- The New York City firm undertook to represent Cinema 5 against Cinerama in the Southern District action.
- Cinerama moved to disqualify Cinema 5’s New York counsel based on the conflict created by Fleischmann’s overlapping partnerships and the firms’ concurrent adverse representations.
- The district court granted disqualification to prevent inhibited confidential communications and to avoid even the appearance of professional impropriety; Cinema 5 appealed.

## Issues

1. Whether a district court may disqualify a firm representing a plaintiff when a partner of that firm is also a partner in another firm concurrently representing the defendant in other, related litigation.
2. Whether, in concurrent-representation conflicts, disqualification may rest on the duty of undivided loyalty and the appearance of impropriety without proof of actual misuse of confidences.
3. What standard of appellate review applies to a district court’s disqualification order in these circumstances.

## Decision

- The Second Circuit affirmed the disqualification order.
- The court found no actual wrongdoing and expressed no criticism of counsel, but held there was no abuse of discretion in ordering disqualification.
- The court accepted the district court’s conclusion that the overlapping partnerships and related matters risked inhibiting client communications and created an appearance of impropriety warranting prophylactic relief.

## Legal Principles

- A lawyer’s duty of undivided loyalty generally bars concurrent representation adverse to a current client in a related matter, even if the representations occur through different firms connected by a common partner.
- In concurrent-representation conflicts, the former-client “substantial relationship” analysis is not sufficient; loyalty and public confidence concerns justify a stricter approach.
- Conflicts and loyalty obligations are imputed through partnership relationships; a partner’s concurrent obligations can disqualify the firm opposing that partner’s client.
- Disqualification decisions are committed largely to the trial court’s discretion and are reviewed on appeal for abuse of discretion; prophylactic disqualification may be appropriate without showing actual prejudice or misuse of confidential information.
- Avoiding the appearance of professional impropriety may independently support disqualification in concurrent-conflict settings.

## Conclusion

The Second Circuit upheld disqualification of plaintiff’s counsel because a partner’s simultaneous partnerships caused concurrent representation of directly adverse parties in related antitrust disputes, violating the duty of loyalty and creating an appearance of impropriety; the district court acted within its discretion even absent proof of actual misuse of confidences.


Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976)