Picker International, Inc. v. Varian Associates, Inc.
Citation
869 F.2d 578 (6th Cir. 1989). United States Court of Appeals for the Sixth Circuit.
Facts
A law firm (Isham, Lincoln & Beale) had represented Varian Associates. The firm merged with another firm that represented Picker International, which was adverse to Varian in related patent litigation. Varian moved to disqualify the merged firm, arguing the merger imputed conflicts from each constituent firm to the other.
Issue
Does a law firm merger automatically impute the conflicts of each constituent firm to the merged entity, and must the merged firm be disqualified even if it implements ethical screens?
Holding
The court held that firm mergers impute conflicts from each firm to the other, and the merged firm was disqualified from representing Picker against Varian. Post-merger screening measures were found insufficient to cure the imputed conflict.
Rule / Doctrine
Under the imputation principle (now codified in Model Rule 1.10), when a firm merges, each lawyer’s conflicts become the conflicts of all lawyers in the new firm. The question is whether screening — establishing a “cone of silence” around the conflicted attorneys — is timely and adequate to cure the imputed conflict. Courts are generally skeptical of post hoc screens erected after the merger has already exposed confidential information from both sides. The case directly influenced the drafting of MR 1.10(d), which now addresses firm merger situations.
Significance
Picker is a key case on firm merger conflicts and the limits of screening as a remedy for imputed disqualification. It teaches that law firms must conduct rigorous conflict checks before merging to avoid disqualification from ongoing representations.