NM Supreme Court: Motion to disqualify lawyer must be resolved before agency or court hears the merits

When a motion to disqualify a lawyer is filed, a court or administrative agency must decide that motion before allowing the lawyer to participate in any proceedings on the merits. That’s essentially what the New Mexico Supreme Court held yesterday in Living Cross Ambulance Service, Inc. v. New Mexico Public Regulation Commission.

Lawyer W. Ann Maggiore defended Living Cross Ambulance Service in a wrongful death lawsuit where the plaintiff claimed that Living Cross’s delay in arriving at the scene contributed to a child’s death. Ms. Maggiore also defended the company when the Public Regulation Commission (PRC) ordered it to show cause why it should not be fined in connection with the child’s death.

Later, in 2013, American Medical Response applied to the PRC for permission to provide ambulance services in Valencia County, where Living Cross operates. Living Cross objected to AMR’s application, saying an additional ambulance company wasn’t necessary.

AMR, now represented by Ms. Maggiore, argued that another ambulance operator was necessary for Valencia County because Living Cross was providing deficient service, and that there had been occasions when Living Cross’s ambulances were either unavailable or had taken too long in responding to an emergency.

Living Cross moved to disqualify Ms. Maggiore and her firm because they had previously represented the company in a substantially related matter, and pointed out that a PRC hearing examiner had previously disqualified Ms. Maggiore from representing AMR in a dispute over an operating certificate in Bernalillo County. (N.B., the opinion does not describe the arguments, if any, that Ms. Maggiore made in response to this motion).

Living Cross also asked the PRC to stay the hearing on the merits until the disqualification issue was resolved, but the PRC declined to do so. Instead, Ms. Maggiore was allowed to participate in a hearing on the merits, present the testimony of AMR witnesses on direct examination, and cross-examine Living Cross witnesses. Later, a PRC hearing examiner disqualified Ms. Maggiore, but the PRC still considered the evidence she had developed, and granted AMR leave to operate in Valencia County.

In a strongly-written opinion by Justice Chavez, a unanimous Supreme Court reversed, holding that the PRC should have resolved the disqualification issue before allowing Ms. Maggiore to participate in any merits proceedings. Courts and agencies should proceed in this way not just for efficiency’s sake, but also because allowing the challenged lawyer to participate in a trial or hearing on the merits risks the very disclosure of client confidences that the Rules of Professional Conduct are intended to prevent.

In addition, one gets the sense that the Supreme Court is a bit frustrated with the PRC. The opinion points out that in its December 2012 opinion in Roy D. Mercer, LLC v. Reynolds, the Court had already said that motions to disqualify should be first. The Court also characterized the PRC’s failure to do so here as “especially egregious” because a PRC hearing examiner had already disqualified Ms. Maggiore from representing AMR against Living Cross’s interests in another case.

And finally, the Court emphasized that it meant what it said in Mercer: “It is essential that a tribunal determine whether an attorney or a law firm is disqualified from a case immediately upon being alerted to a potential conflict of interest. Until that determination is made, no further proceedings may take place.”

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