06-cv-611 Silicon Graphics, Inc., v. ATI Technologies, Inc.

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Professional Responsibility
Choice of law

Wisconsin’s rules governing conflicts of interest do not apply in federal court.

“Despite the lack of a clear holding in this circuit, I agree with defendants that federal law is controlling. As a general matter, federal courts apply state law to ‘substantive’ questions when state law created the underlying cause of action. Bevolo v. Carter, 447 F.3d 979, 982 (7th Cir. 2006). In addition, federal courts may ‘borrow’ state law principles when federal law is silent on a particular question. E.g., Owens v. Okure, 488 U.S. 235, 239 (1989) (federal courts may refer to statute of limitations under state law when federal law does not provide one). However, the Supreme Court has held that ‘[t]he state code of professional responsibility does not by its own terms apply to sanctions in the federal courts.’ In re Snyder, 472 U.S. 634, 645 (1985). This is because a federal court’s authority to regulate lawyer conduct in its own cases comes from its inherent power, not from a particular state rule. Id. See also In re Finkelstein, 901 F.2d 1560, 1564 (11th Cir. 1990)(‘It is axiomatic that federal courts admit and suspend attorneys as an exercise of their inherent power.’). If decisions whether to sanction a lawyer for misconduct are decided under federal law, it follows that ‘[m]otions to disqualify are . . . decided under federal law’ as well. FDIC v. United States Fire Insurance Co., 50 F.3d 1304, 1311-12 (5th Cir. 1995). See also United States v. Miller, 624 F.2d 1198, 1200-01 (3d Cir. 1980)(‘Supervision of the professional conduct of attorneys practicing in a federal court is a matter of federal law.’); 30 Moore’s Federal Practice § 808.06[2][b], at 808-80 (3d. ed. 2010) (‘Screening is a good example in which courts tend to refer to the emerging body of federal law rather than to the state law.’). If that were not the case, district courts could not grant motions filed by lawyers who are not admitted to the state bar to practice in federal court.”

06-cv-611 Silicon Graphics, Inc., v. ATI Technologies, Inc.

W.D.Wis., Crabb, J.