Schatzki v. Weiser Capital Management
U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Judge Robert Sweet
Other than pretrial motions, the parties' litigation, begun in June 2010, is trial ready. Plaintiffs Schatzki and BPP Wealth Inc. sought to disqualify law firm Stark & Stark PC from acting as trial counsel for defendants. They argued that Stark & Stark shareholder Giachetti—named a witness by both sides—will be compelled to give testimony prejudicial to defendants. At deposition in 2012 Giachetti testified about the events giving rise to litigation. The court held that Giachetti could not testify about what advice he gave defendants at the time of Shatzki's termination. Assertion of the attorney-client privilege prevented plaintiffs' exploration of that issue during deposition. The court denied Stark & Stark's disqualification. Discussing New York Rules of Professional Conduct 3.7(b) and 1.7—and noting that Rule 3.7 lends itself to "opportunistic abuse"—the court found the testimony offered by Giachetti was not prejudicial to defendants. Noting that over 15 depositions had been taken in the more than three-years-old lawsuit, the court concluded that plaintiffs did not provide "clear and convincing evidence" that the integrity of the judicial system would suffer by allowing Stark & Stark to serve as trial counsel.