Second Circuit Reverses Order Disqualifying Defense Counsel In Suit Over Demutualization Of Insurance Company

In Murray v. Metropolitan Life Ins. Co., No. 09-3716-CV, 2009 WL 3080462 (2d Cir. Sept. 29, 2009), the United States Court of Appeals for the Second Circuit reversed an order by the district court disqualifying defense counsel for a life insurance company in an action alleging fraud in connection with the demutualization of defendant life insurance company. The Court held that the law firm did not have an attorney-client relationship with the policy holders (plaintiffs) by reason of counsel’s representation of the insurance company in the demutualization process several years earlier. The Second Circuit’s decision provides clear guidance as to whether constituents of a mutual company have a direct attorney-client relationship with counsel for the company, slamming shut the door opened by the district court in this case.