## Facts

- The United States sued Tate & Lyle North American Sugars, Inc. to recover $1,526,100.60 in interest the IRS alleged it erroneously paid to the company.
- Since at least 1990, the law firm Burt, Maner & Miller (BM & M) had represented Tate & Lyle and related entities in IRS tax audits.
- In December 1990, Tate & Lyle’s tax director sent the IRS a letter with a $6,497,710 remittance, requesting it be treated as a “cash bond.”
- The IRS later returned the remittance and mistakenly paid interest, despite the IRS position that no interest is owed on the return of a cash bond.
- Tate & Lyle refused to return the interest, contending the remittance was not a cash bond as a matter of law.
- Before trial, the Government moved to disqualify BM & M, asserting it intended to call BM & M attorneys as witnesses on matters tied to the remittance and an alleged “ratification” theory based on counsel’s failure to object.
- Tate & Lyle argued the Government did not identify specific necessary testimony, could obtain evidence from documents or other sources, and did not show substantial prejudice warranting disqualification.

## Issues

1. Whether the advocate–witness rule and governing professional-responsibility standards required disqualification of BM & M from representing Tate & Lyle at trial.

## Decision

- The court denied the Government’s motion to disqualify BM & M.
- The Government did not meet its burden to show BM & M attorneys were likely to provide necessary testimony on a significant factual issue.
- The Government did not show that continued representation by BM & M would substantially prejudice Tate & Lyle.
- The court emphasized strict scrutiny of disqualification motions due to the risk of tactical misuse and the client’s interest in counsel of choice.

## Legal Principles

- Disqualification is an extraordinary remedy and disqualification motions receive particularly strict scrutiny.
- Under advocate–witness standards, the movant must show:
  - counsel is likely to be a witness on a significant issue of fact;
  - the testimony is necessary because the evidence is unavailable from other sources; and
  - continued representation would substantially prejudice the client.
- A generalized proffer of anticipated attorney testimony is insufficient where the relevant evidence is available through documents or other witnesses.
- Courts are reluctant to disqualify where prejudice and necessity are speculative and less disruptive trial management options exist.

## Conclusion

The court refused to disqualify Tate & Lyle’s long-time counsel because the Government did not identify specific indispensable attorney testimony or demonstrate substantial prejudice sufficient to override the strong preference for a party’s chosen representation.


United States v. Tate & Lyle N. Am. Sugars, Inc., 184 F. Supp. 2d 344 (S.D.N.Y. 2002)