Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Fundamental Admin. Servs., LLC v. Anderson

United States District Court, Fourth Circuit

September 27, 2013



James K. Bredar United States District Judge

Pending before the Court is Plaintiff’s Emergency Motion for Temporary Restraining Order and Preliminary Injunction and Sanctions against Kristi Anderson, Steven N. Leitess and Leitess Friedberg PC. (ECF No. 28.) Pursuant to this Court’s authority under Federal Rule of Civil Procedure 65, and as necessary in aid of its jurisdiction, see 28 U.S.C. § 2283, the Court will grant in part Plaintiff’s motion.

Plaintiff, Fundamental Administrative Services, LLC (“FAS”), had earlier filed a three-count complaint seeking declaratory and injunctive relief and damages against FAS’s former general counsel, Kristi Anderson. (Compl., ECF No. 1; Am. Compl., ECF No. 8.) In the first count, Plaintiff asserts that Anderson has divulged or will divulge privileged and confidential information she acquired during her employment with FAS, which was terminated in April of this year. In the second count, FAS seeks a judicial declaration that it is not liable to pay Anderson’s legal expenses in connection with other legal proceedings in other courts. In the third count, FAS seeks restitution of $400, 000 that Anderson had authorized to pay her legal expenses while she was still employed with FAS.

In earlier orders, this Court granted in part FAS’s first request for a TRO to prevent Anderson from violating her ethical and contractual obligations to FAS (ECF No. 5), dissolved the TRO after further proceedings (ECF No. 13), and denied Anderson’s motions for sanctions against FAS and its attorneys (ECF Nos. 13, 24). These orders were all against the backdrop of Anderson’s and FAS’s participation in bankruptcy and related adversary proceedings that involve many different and sometimes related parties in other courts.

The Court’s only focus in the prior TRO proceeding was Anderson’s anticipated conduct in those bankruptcy and related adversary proceedings. Any issues regarding her conduct in relation to privilege and confidentiality concerns of FAS were to be resolved by the bankruptcy judge. (Mem. & Order, 6/24/2013, ECF No. 13.) In a later order, the Court emphasized that the determinative factor for denying injunctive relief in this Court “was not any lack of stated merit, but the availability of an adequate forum for FAS to raise its concerns regarding privilege and confidentiality and the Court’s desire not to intrude unnecessarily into the proceedings of that forum.” (Mem. & Order 2 n.1, 8/22/2013, ECF No. 24.) Given what the Court took as the focus of FAS’s request—the bankruptcy and related proceedings—the Court believed FAS’s concerns were being addressed.

But a new twist has occurred that shows the Court’s prior narrow focus may no longer be appropriate. Anderson has filed suit in Maryland state court against FAS and various individuals associated with FAS. This, in itself, is not problematic. Nor is it problematic for her to use that lawsuit as a vehicle for redress for what she alleges was an improper termination of employment. In doing so, however, she included within her complaint a number of allegations that detail apparently privileged conversations and other communications pertaining directly to her employment with FAS. (Balt. Cnty. Cir. Ct. compl., sealed ex., ECF No. 30.) And therein lies the problem.

It was never this Court’s intention in its prior rulings to give license to Anderson to reveal privileged and confidential information outside of the bankruptcy court and related proceedings. Although FAS has pending in the state court an emergency motion to seal Anderson’s complaint, Anderson herself did not take such a protective measure.[1] Her insertion into public records of privileged and confidential information, not pursuant to court order, may effectively nullify FAS’s ability to protect such information from disclosure. Despite the adversarial relationship that has developed between Anderson and FAS, Anderson continues to owe FAS ethical obligations; those obligations survive the termination of her employment with FAS.

In Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), the Supreme Court set forth the following standard for preliminary injunctive relief:

A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.

Id. at 20. Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Id. at 22. Courts are called upon to balance a plaintiff’s claims of injury against the burdens to be imposed upon the defendant, and they must “pay particular regard for the public consequences in employing the extraordinary remedy of injunction.” Id. at 24. The same standard applicable to preliminary injunctive relief is applicable to the question of whether a TRO should issue. Long v. Bd. of Educ., Dist. 128, 167 F.Supp.2d 988, 990 (N.D. Ill. 2001); Perdue Farms, Inc. v. NLRB, 927 F.Supp. 897, 904 (E.D. N.C. 1996).

Applying this standard to these circumstances, the Court finds that Plaintiff has met the standard. FAS is likely to succeed on the merits of the issue of whether Anderson can reveal without permission from FAS that entity’s privileged and confidential information. Further, FAS is likely to suffer irreparable harm in the absence of preliminary relief, and the balance of equities tips in its favor. It is unquestionable that an injunction is in the public interest given the important purpose, deeply ingrained in our society and our system of justice, of requiring an attorney to protect a client’s confidences.

While the restraining order the Court will enter will be appropriately tailored so that Anderson’s ability to litigate her state court lawsuit will not be impaired, the Court observes that Anderson’s current state court complaint is 53 pages long (excluding exhibits) and goes substantially beyond what is necessary to state viable claims of relief. See Md. Rule 2-303(b) (“A pleading shall contain only such statements of fact as may be necessary to show the pleader’s entitlement to relief or ground of defense.”). The seemingly unnecessary inclusion of so much apparently privileged and confidential material raises the question of whether this filing is a retributive salvo in an ever escalating battle between two parties whose disagreements have now involved at least three different courts, including this Court and now the Baltimore County Circuit Court.

As was true in the Court’s prior orders, the Court does not wish to intrude upon another court’s determination of matters properly before it, and the order being entered is calculated to respect other courts’ jurisdiction while protecting the jurisdiction of this Court to decide the case and issues that are properly before it. Furthermore, although Anderson has submitted to the Court transcripts of her still unfinished Bankruptcy Rule 2004 examination, this Court is not basing its ruling on any matter occurring in the bankruptcy and related proceedings.[2] The Court has duly noted Anderson’s additional submission of the declaration by counsel for the bankruptcy trustee that neither he nor his client has been provided with a copy of the state court complaint or ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.