Aaron Brett Charney v. Sullivan & Cromwell, LLP, 2007 WL 1240422 (N.Y. Sup. 2007)

Brief Summary
The court concluded that the plaintiff-former associate did not breach a fiduciary or ethical duty and did not improperly disclose client confidences in a complaint he filed against his former law firm. The court did strike plaintiff’s entire complaint for other reasons, but it gave plaintiff a chance to replead.

Complete Summary
Plaintiff Aaron Brett Charney had been an associate at defendant Sullivan & Cromwell LLP. Mr. Charney sued the firm for discrimination based on his sexual orientation and for retaliation. Sullivan & Cromwell moved to dismiss the complaint on the ground that it improperly disclosed client confidences in breach of Mr. Charney’s ethical obligations and that it also breached his contractual obligations to Sullivan & Cromwell. Id. at *1.

Mr. Charney’s complaint identified nine corporate clients of Sullivan & Cromwell, as well as five corporate deals involving clients. The complaint identified the Sullivan & Cromwell attorneys who worked on some of those deals and included statements by clients praising Sullivan & Cromwell associates for their good work. Id. at *1. The complaint also: alleged that Sullivan & Cromwell removed a lawyer from a matter involving a named client and replaced him with an attorney that the firm intended to fire; alleged that Sullivan & Cromwell tried to persuade a named client to deny employment to a person who witnessed alleged acts of discrimination against Mr. Charney; included an internal Sullivan & Cromwell email that quoted a Sullivan & Cromwell partner describing a named client’s deal as “lengthy and cumbersome”; and referred to a named client’s ongoing concerns about Sullivan & Cromwell’s legal fees. The complaint also alleged discrimination against attorneys of Canadian national origin and included Sullivan & Cromwell’s partnership agreement as an attachment.

The court noted that DR 4-101 of New York’s Code of Professional Responsibility provides that a lawyer shall not knowingly reveal a confidence or secret of a client or use it to the detriment of the client. For purposes of this rule, confidences include information protected by the attorney-client privilege and secrets include information gained in a professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would likely to be detrimental to the client. Sullivan & Cromwell objected to every reference to Sullivan & Cromwell’s clients in the complaint and the attachment of the partnership agreement and internal emails. The court noted that not all communications with an attorney are privileged and that it had to be shown that the information was a confidential communication made to the attorney for the purpose of obtaining legal advice or services. See Matter of Priest v. Hennessy, 51 N.Y. 2d 62 (1980). The court noted, for example, that fee arrangements are generally held not to be protected by the attorney client privilege because they are not considered directly relevant to legal advice given. See In re Nassau County Grand Jury Subpoena Duces Tecum Dated June 24, 2003, 4 NY3d 665 (2005).

The court applied the principles to the instant facts and concluded that nothing in the complaint was attorney-client privileged material. 2007 WL 1240422 at *3. In-house counsel’s request that the attorneys keep their fees down on a legal matter, and conversations between a Sullivan & Cromwell attorney and a client praising an associate, are not “directly relevant to legal advice.” Id. at *3. The court held that a “client secret” is not broad enough to include the identity of clients or particular deals the attorneys were involved with, especially when that same information is readily available on the firm’s website. Sullivan & Cromwell was unable to offer any explanation as to how disclosure of the information in Mr. Charney’s complaint would be detrimental or embarrassing to its clients. Id. at *3. The court concluded that, as a matter of law, there was no basis to strike the information from Mr. Charney’s complaint. The court did however, strike the entire complaint and grant Mr. Charney leave to replead because some of the allegations were irrelevant; because some did not comply with the requirement that allegations be stated briefly and concisely; and because some arguably could be said to implicate DR 4-101.

Significance of Case
This is only a trial court opinion on a pleading motion, so it remains to be seen what will happen in the case. On its face, however, the opinion would appear to take a broader view of when or on what basis former associates may sue their firms than at least some lawyers would have anticipated.

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