## Facts

- McKenzie Construction (a lumber retailer) leased warehouse space from St. Croix Storage at Sun Commercial Park under a written lease restricting storage outside the leased premises and requiring written modifications.
- A dispute arose after McKenzie stored lumber outside the leased bay; defendants denied any oral permission and treated the outside storage as unauthorized.
- Defendants’ principal directed that a “free lumber” sign be placed, and McKenzie sued alleging conversion and related claims.
- The court ordered mediation and appointed attorney Lisa Moorehead as mediator; defendants asserted they disclosed confidential information to Moorehead in private sessions, while plaintiffs disputed that confidential caucuses occurred.
- After mediation failed, Moorehead later joined plaintiffs’ counsel’s firm, Rohn & Cusick, as “of counsel”; plaintiffs asserted the firm implemented a “cone of silence” to screen her from the case.
- After joining the firm, Moorehead met with a private investigator working for defendants regarding attempted settlement contact with a represented party; defendants argued this showed Moorehead’s continued involvement.
- Defendants moved to disqualify Rohn & Cusick; plaintiffs opposed and sought sanctions against defendants.

## Issues

1. Whether a law firm must be disqualified when it hires a court-appointed mediator from the same case while the litigation is ongoing.
2. Whether screening measures and the claim that no mediation confidences were exchanged can prevent firm-wide disqualification.
3. Whether defendants’ motion to disqualify warranted sanctions.

## Decision

- The court granted defendants’ motion to disqualify Rohn & Cusick from representing plaintiffs.
- The court treated the mediator’s prior neutral role and potential access to confidential mediation information as creating an impermissible conflict and appearance of impropriety.
- The court rejected screening (“cone of silence”) as an adequate cure, particularly in light of Moorehead’s post-employment contact related to the case.
- The court denied plaintiffs’ motion for sanctions, finding the disqualification request raised substantial, good-faith ethical concerns.

## Legal Principles

- A court-appointed mediator’s neutrality and confidentiality obligations require strict protection; the risk that a mediator obtained confidential information can justify disqualification to preserve confidence in court-ordered mediation.
- When an attorney’s conflict stems from prior service as a neutral in the same matter, the conflict may be imputed to the attorney’s firm, warranting firm-wide disqualification.
- Unilateral internal screening may be insufficient where the conflict implicates mediation integrity and where circumstances suggest the neutral is not fully isolated from case activity.
- Sanctions are inappropriate where a disqualification motion presents legitimate professional-responsibility concerns supported by concrete facts.

## Conclusion

The court disqualified plaintiffs’ law firm after it hired the case’s former court-appointed mediator, concluding that the mediator’s prior neutral role and potential exposure to confidential mediation information created a firm-wide conflict that could not be cured by screening, and it denied sanctions because the disqualification motion was not frivolous.


McKenzie Constr. v. St. Croix Storage Corp., 961 F. Supp. 857 (D.V.I. 1997)