REPLY TO SHERMAN RESPONSE TO MOTION TO DISQUALIFY [DOC 172] - Page 1
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., § Civil Action No. 3-09CV0988-F
MANILA INDUSTRIES, INC., and §
MUNISH KRISHAN, §
Plaintiffs. §
§
v. §
§
JEFFREY BARON, and §
ONDOVA LIMITED COMPANY, §
Defendants. §
REPLY TO SHERMAN RESPONSE TO MOTION TO DISQUALIFY
[DOC 172]
TO THE HONORABLE ROYAL FURGESON, U.S. DISTRICT COURT JUDGE:
COMES NOW, Jeffrey Baron, Appellant, and subject to the pending motion
to strike such response, respectfully replies to the response to Motion to Disqualify
Mr. Urbanik [DOC 172].
I. SUMMARY
Mr. Urbanik’s conduct is unethical because his position as an advocate
before this Court was used to interfere with the fair, unbiased hearing of evidence
at issue before the Court. The ethical rule prohibits an attorney from doing exactly
that—being both an advocate and a fact witness to establish essential facts on
behalf of his client.
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II. THE ETHICAL RULE IS MANDATORY, NOT OPTIONAL
Texas Disciplinary Rules of Professional Conduct are mandatory in
character because they establish the minimum level of conduct below which no
lawyer can fall. Koch Oil Co. v. Anderson Producing, Inc., 883 SW 2d 784, 787
(Tex.App. Beaumont–1994).
III. THE EVIDENCE TESTIFIED TO BY MR. URBANIK WAS ESSENTIAL
The evidence Mr. Urbanik claimed to testify to in his declaration included
essential facts such as that Mr. Baron had taken steps had to transfer 300,000
internet domain names, to a foreign entity outside of the jurisdiction of the federal
courts. Although the fact itself is suspect— no attempt was made to change the
ownership of the names, and the names are serviced ultimately by a US company,
Mr. Urbanik never-the-less injected himself as a fact witness as to those facts.
Similarly Mr. Urbanik claims personal knowledge that entities located in the Cook
Islands are controlled by Mr. Baron, etc. These are clearly essential facts, and Mr.
Urbanik clearly is offering claims of personal knowledge as to them.
IV. THE STATE ETHICS RULE
In his response, Mr. Sherman makes reference to the comments of the state
ethics rules, but noticeably omits mention of the relevant comment, Comment 4.
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Comment 4 to Rule 3.08 (Lawyer as Witness) explains the application of the rule
in this circumstance:
[T]he principal concern over allowing a lawyer to serve as both an advocate
and witness for a client is the possible confusion that those dual roles could
create for the finder of fact. Normally those dual roles are unlikely to create
exceptional difficulties when the lawyer's testimony is limited to the areas set
out in sub-paragraphs (a)(1)-(4) of this Rule. If, however, the lawyer's
testimony concerns a controversial or contested matter, combining the
roles of advocate and witness can unfairly prejudice the opposing party. A
witness is required to testify on the basis of personal knowledge, while an
advocate is expected to explain and comment on evidence given by others. It
may not be clear whether a statement by an advocate-witness should be taken as
proof or as an analysis of the proof.
Mr. Sherman also neglects to fully cite the content of Comment 10:
This Rule may furnish some guidance in those procedural disqualification
disputes where the party seeking disqualification can demonstrate actual
prejudice to itself resulting from the opposing lawyer's service in the dual roles.
… [A] lawyer should not seek to disqualify an opposing lawyer by
unnecessarily calling that lawyer as a witness. Such unintended applications of
this Rule, if allowed, would subvert its true purpose by converting it into a mere
tactical weapon in litigation.
Notably, Mr. Baron did not intend to call Mr. Urbanik as a witness. Mr.
Urbanik injected himself into the case as a fact witness with personal
knowledge and filed a sworn declaration in opposition to Mr. Baron’s motion to
stay pending appeal. Mr. Urbanik’s testimony was the only declaration testimony
offered in opposition to the motion to stay. Accordingly, the attempt to call Mr.
Urbanik’s as a witness was not done by Mr. Baron (as some litigation ploy), it was
done purposely by Mr. Urbanik. Moreover, counsel for Mr. Baron attempted to
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give all benefit of the doubt to Mr. Urbanik, and treated him as a party in interest
who had filed on his own behalf, thus avoiding any ethical issue. It was only
when Mr. Urbanik insisted and made clear that under no circumstances was he in
any way a party to the proceedings, that the ethical issue became acute.
As explained in a recent opinion of the Fourteenth District Court of Appeals
in Houston (IN RE: GEORGE E. GUIDRY, DWIGHT W. ANDRUS, III AND
DWIGHT W. ANDRUS INSURANCE, INC., No. 14-10-00464-CV):
In denying the motion to disqualify, the trial court may have determined that
allowing Jefferson to occupy dual roles as trial lawyer and fact witness would
not cause the Brokers actual prejudice. To the extent that the trial court made
this determination, we conclude that the court clearly abused its discretion. See
In re Bahn, 13 S.W.3d at 874 (concluding that lawyer's dual roles as trial
lawyer and fact witness would cause actual prejudice to opposing party).
V. FEDERAL, NOT STATE APPLICATION OF ETHICAL VIOLATION
The majority of Mr. Sherman’s offered cases are not relevant to the motion
to disqualify because “ [A] District Court is obliged to take measures against
unethical conduct occurring in connection with any proceeding before it. Sanders
v. Russell, 5 Cir. 1968, 401 F.2d 241, 246 ”. Woods v. Covington Cty. Bank, 537
F.2d 804, 810 (5th Cir. 1976). Motions to disqualify are substantive motions
affecting the rights of the parties and are determined under federal law. In re
Dresser Industries, Inc., 972 F.2d 540, 543 (5th Cir. 1992).
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The consideration in disqualification is not a state remedy. While state
ethics violation is key, the Court must consider the motion governed by the ethical
rules announced by the national profession and in the light of the public interest
and the litigants' rights. In Re Dresser, and see Brennan's Inc. v. Brennan's
Restaurants, Inc., 590 F.2d 168, 171 (5th Cir. 1979).
VI. OBLIGATION TO THE COURT AND PROCESS, NOT TO CLIENT
Rule 3.08 protects against two diverse interests— (1) To protect the client being
represented by preventing his own attorney from acting against the client’s
interests as a witness and (2) To protect the fairness of the judicial process.
In our case, the second interest is invoked.
As explained by the Fifth Circuit:
“A motion to disqualify counsel is a proper method for a party-litigant to
bring the issues of conflict of interest or a breach of ethical duties to the attention
of the court.” Indeed “a District Court is obliged to take measures against
unethical conduct occurring in connection with any proceeding before it.”
McCuin v. Texas Power & Light Co., 714 F. 2d 1255, 1264 (5th Cir. 1983)
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VII. CONCLUSION
Pursuant to Texas Disciplinary Rules of Professional Conduct 3.08, it is
unethical for Mr. Urbanik to be both an advocate before the Court and a fact witness
of facts essential to the relief requested by him as an advocate. Because Mr.
Urbanik injected himself as a fact witness as to essential substantive allegations
against Mr. Baron, Mr. Urbanik must be disqualified as counsel in this case.
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
State Bar No. 00791608
Drawer 670804
Dallas, Texas 75367
(214) 210-5940
(214) 347-4031 Facsimile
APPELLATE COUNSEL FOR
JEFFREY BARON
CERTIFICATE OF SERVICE
This is to certify that this was served on all parties who receive notification
through the Court’s electronic filing system.
/s/ Gary N. Schepps
Gary N. Schepps
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