In an asbestos cases which was partially litigated as part of an MDL proceeding in the Eastern District of Pennsylvania before being transferred back to the Eastern District of Louisiana, the plaintiff appealed, among other things, the imposition of sanctions for ex parte communications stemming from a telephone conversation plaintiff’s counsel had with Richard Smith, the plaintiff’s former supervisor at Lockheed Martin, and who was still working for Lockheed Martin when Didriksen interviewed him via telephone. Lockheed Martin moved to disqualify Didriksen and his firm for improper ex parte communications under Rule 4.2 of the Pennsylvania Rules of Professional Conduct, which prevents a lawyer from communicating about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.  The magistrate judge determined that Smith was a no-contact employee under Rule 4.2 because, as Williams’s supervisor, Smith was a person whose acts or omissions in connection with Mr. Williams’s asbestos exposure could be imputed to Lockheed Martin. The magistrate judge also determined that the court could infer that Didriksen knew that Smith was a Lockheed Martin employee because Rule 4.2 obligates attorneys to determine whether an individual is represented by counsel before engaging in any substantive ex parte communications. As a result of this violation, the magistrate judge granted Lockheed Martin $10,000 in partial attorney’s fees and costs but declined to disqualify Didriksen and his firm. The magistrate judge also noted that apart from the violation of Rule 4.2, Didriksen’s contact with Smith amounted to litigation misconduct, which independently supported the sanction she imposed. The district court overruled Plaintiffs’ objections to the magistrate judge’s order. Plaintiffs challenge both the determination that Didriksen violated Rule 4.2 and the particular sanction imposed, but the U.S. Fifth Circuit Court of Appeals affirmed.

“The Eastern District of Pennsylvania has adopted the Pennsylvania Rules of Professional Conduct. The interpretation and application of those rules is governed by federal law. The district court’s power to disqualify an attorney derives from its inherent authority to supervise the professional conduct of attorneys appearing before it. We review for abuse of discretion orders imposing sanctions pursuant to the court’s inherent authority.

“The district court’s determination that Didriksen violated Rule 4.2 was not based on an erroneous view of the law or a clearly erroneous assessment of the evidence. However, a violation of Rule 4.2 does not automatically authorize the assessment of $10,000 in attorney’s fees. When acting pursuant to its inherent powers, a court can shift attorney’s fees only in a few circumstances. The narrow exceptions to the American Rule effectively limit a court’s inherent power to impose attorney’s fees as a sanction to cases in which a litigant has engaged in bad-faith conduct or willful disobedience of a court’s orders. Examples of bad faith include when the party practices a fraud upon the court or delays or disrupts the litigation or hampers a court order’s enforcement. Here, the district court was not empowered to impose sanctions in the form of attorney’s fees absent a finding of bad faith, or a finding that Didriksen willfully disobeyed the court’s orders. In concluding that Didriksen violated Rule 4.2, the magistrate judge noted that neither willful conduct, nor bad faith, is necessary to establish a Rule 4.2 violation. Although that is true, it does not follow that the court can assess a sanction of attorney’s fees without either of those findings. The standard for finding a Rule 4.2 violation is not the same as the standard for shifting attorney’s fees. To exercise the court’s inherent power to assess attorney’s fees as a sanction, the magistrate judge was required to make a finding that Didriksen acted in bad faith, vexatiously, wantonly, or for oppressive reasons.

“The magistrate’s findings that Didriksen acted intentionally and closed his eyes to the obvious are sufficient to find that Didriksen acted knowingly for purposes of Rule 4.2, and they are tantamount to findings that Didriksen acted in bad faith. The district court did not abuse its discretion in awarding $10,000 in attorney’s fees.”


Williams v. Lockheed Martin, No.18-31162, 2021 WL 868529 (5th Cir. March 9, 2021).