Opinion
No. CV10-8116 PCT-DGC.
May 9, 2011
ORDER
Plaintiffs move to disqualify Defendants' counsel in part (Doc. 37), Defendants oppose (Doc. 40), and Plaintiffs did not file a reply. For the reasons that follow, the Court will deny the motion.
Defendants' request for oral argument is denied because the issues have been fully briefed and oral argument will not aid the Court's decision. See Fed.R.Civ.P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).
Defendants include the Town of Prescott Valley, sixteen municipal officials, and other unknown parties. Doc. 12. Individual defendants are sued in both their official and individual capacities. Id. at 2:11-13 ("The conduct . . . of the Town and its agents (hereinafter `the Town' and/or the `Defendants') . . . included acts of the Agents in both their `individual' and `official' capacities."); id. at 3-8. The complaint alleges two counts: RICO claims under federal and state law, and civil rights violations. Id. at 61-65. All defendants are represented by the same two attorneys who are part of the same law firm. Doc. 40.
Plaintiffs assert that some of the defendants are being sued in part in their individual capacities. Doc. 37 at 2:23-24. For example, it is argued the individual defendants have RICO liability that is distinct from the liability of defendants as municipal officials. Id. at 3. As a result, Plaintiffs move to disqualify Defendants' attorneys from representing them as to claims where they are sued in their individual capacities. Id. at 2. Plaintiffs argue that under the Arizona Constitution, public funds may not be used to pay for litigation of non-public defendants. Id. at 8. Plaintiffs also argue that an irreconcilable conflict of interest exists between defendants as public officials and some or all defendants as private persons. Id. at 3-4. As an example, Plaintiffs assert that the Town would be presumed to have ratified co-defendants' RICO actions if it pays for their defense, thereby making it liable for private defendants' conduct. Id. at 9.
Defendants respond that Plaintiffs have no standing to challenge how the municipality spends its money. Doc. 40 at 4. Defense counsel also assert that they have met with all defendants and certify there is no basis for concluding that representation of any defendant is adverse to any other defendant. Id. at 3.
Plaintiffs rely on the Arizona Constitution art. 9, § 7 ("Gift Clause") for the proposition that the municipality may not pay defendants' private litigation costs. Doc. 37 at 8. Plaintiffs also cite to Turken v. Gordon, 224 P.3d 158, 165 (Ariz. 2010). Id. at 9. In Turken, the Arizona Supreme Court reaffirmed that taxpayers may sue under the Gift Clause, and clarified the elements of the cause of action. The complaint in this case does not appear to assert a claim under the Gift Clause, and Plaintiffs cite no case for the proposition that the Gift Clause may serve as a basis for disqualifying attorneys.
As to the conflicts argument, Plaintiffs cite three cases: In re County of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000), Optyl Eyewear Fashion v. Style Companies, LTD., 760 F.2d 1045, 1050 (9th Cir. 1985), and IBM Corp. v. Levin, 579 F.2d 271, 279 (3d Cir. 1978). County of Los Angeles and Levin involve conflicts that were alleged to prejudice the party seeking disqualification. Plaintiffs make no such argument here. Optyl Eyewear involved testimonial conflicts where the moving party asserted opposing counsel might be called to testify against their clients. The Ninth Circuit upheld the district court's denial of the motion to disqualify and also upheld the grant of sanctions against the moving party for seeking disqualification in bad faith. Optyl Eyewear, 760 F.2d at 1052. Plaintiffs also cite Ethical Rule 1.7, but provide no case law applying ER 1.7 to facts similar to this case.
As the moving party seeking to disqualify, Plaintiffs have the burden of providing the Court with sufficient legal and factual arguments to support their position. They have failed to do so.
IT IS ORDERED that Plaintiffs' motion to disqualify (Doc. 37) is denied.