Mary Gallagher
Corporate Counsel, OCT-2003

Lawyers have many tactics at their disposal, but bribery isn't one of them. That's the reassuring message from the New Jersey Disciplinary Review Board, which this summer recommended that a former in-house attorney be suspended because he "essentially bribed" two plaintiffs' lawyers not to sue his company.

Karel Zaruba worked in the law department of Warner-Lambert Company until his retirement in 1999. (The drug manufacturer has since merged with Pfizer Inc.) According to the disciplinary board, Zaruba made a secret deal in 1997 with plaintiffs' lawyers Mark Hager and John Traficonte that they would drop a planned class action against Warner-Lambert over the effectiveness of its head lice product, Nix. Under the settlement, Hager and Traficonte received $225,000 in "fees and expenses," while their 90 clients got a maximum of $10,000 in refunds. The two lawyers agreed not to disclose the deal, even to their clients.

The New Jersey disciplinary board voted 5 to 4 to recommend a one-year suspension for Zaruba. The majority wrote in its July 29 opinion that efforts "to buy off plaintiffs' counsel by secret agreements . . . will be viewed as extremely serious." The board's dissenters had sought a tougher three-year suspension. The case is one of only a few involving a breach of Rule of Professional Conduct 5.6(b), which bars settlement agreements that restrict the right to practice law.

The case went directly to the board after Zaruba waived a hearing. The 71-year-old attorney, who did not retain counsel, admitted to the charges. In his written response to the board, he said he would "accept any appropriate sanction." Zaruba could not be reached for comment for this story. The suspension order will be automatically adopted by the state supreme court.

Hager, who formerly taught at the American University law school in Washington, D.C., was suspended for three years in December 2002 by the D.C. Court of Appeals. No formal ethics complaint has been filed yet against Massachusetts-based Traficonte, according to an official with the state's Board of Bar Overseers.

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