On February 15, 2024, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Zomongo.TV USA Inc. v. Capital Advance Servs., LLC, 2024 NY Slip Op. 30508(U), refusing to disqualify counsel because of insufficient similarity of past and current engagements, explaining:
It is well settled that a party in a civil action maintains an important right to select counsel of its choosing and that such right may not be abridged without some overriding concern. Therefore, the party seeking disqualification of an opposing party’s counsel must present sufficient proof supporting that determination.
The former client conflict of interest rule is codified in the New York Rules of Professional Conduct, Rule 1.9 (22 NYCRR 1200.0 et. seq.). Specifically, Rule 1.9(a) provides: “a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client. Although a hearing may be necessary where a substantial issue of fact exists as to whether there is a conflict of interest, mere conclusory assertions are insufficient to warrant a hearing.
Thus, a party seeking disqualification of counsel must demonstrate that: (1) there was a prior attorney client relationship; (2J the matters involved in both representations are substantially related; and (3J the present interests of the attorney’s past and present clients are materially adverse. Once the moving party demonstrates that these three elements are satisfied an irrebuttable presumption of disqualification follows.
Thus, in interpreting the prior rule DR 5~108(A) (1) which is substantially. the same in import, disqualification would be proper where it is established that there is a substantial relationship between the current litigation and the prior one. Thus, concerning this substantial relationship prong, in Spano v. Tawfik, 271 AD2d 522, 705 NYS2d 659 [2d Dept., 2000], the court held disqualification improper where the plaintiff’s attorney suing defendant for breach of contract once represented the defendant in a trademark infringement action when plaintiff and defendant were the sole shareholders of the corporation that settled that trademark action. The court noted there was insufficient evidence the matters were substantially related. Indeed, for the two matters to be viewed as substantially related they must be identical to each other or essentially the same
. . .
In order to demonstrate the prior and current representations are substantially related the movant must present facts supporting any disqualification. . . .
In this action, the defendants do not explain how any prior representations of plaintiff’s counsel are substantially similar to this action to demand disqualification. It is true that prior matters where counsel represented Yellowstone involved merchant cash funding, however, other than that generalization, there is no specific evidence the matter-s are related at all. Merely because this action concerns a merchant cash funder and the previous matters also involved merchant cash funders does not mean the cases are related without any evidence demonstrating the similarities. Thus, there is no evidence the issues in this litigation are identical to or essentially the same as the prior representations. There is further no evidence the plaintiff’s counsel received specific, confidential information substantially related to the present litigation.
(Internal quotations and citations omitted).