Opinion
Case No. EDCV 08-420-VAP (JCx).
September 16, 2008
Defendant Libby's Motion to Disqualify Counsel Steven Brock and the law firm Lackie, Dammeier McGille APC came before the Court for hearing on September 15, 2008. The parties chose not to advance arguments at the hearing, and submitted on the Court's tentative ruling to grant the Motion. After considering all papers filed in support of, and in opposition to, the Motion, the Court GRANTS the Motion.
I. BACKGROUND
On February 28, 2008, Plaintiff Peter Holm filed his Complaint ("Compl.") in the California Superior Court for the County of San Bernardino, naming as Defendants the City of Barstow and three individual defendants, including Keith Libby ("Libby"), both individually and as the Sergeant for the Barstow Police Department. Plaintiff alleged the following claims: (1) "whistleblower retaliation," Cal. Lab. Code § 1102.5; (2) "whistleblower retaliation," Cal. Gov. Code § 53298; (3) wrongful termination in violation of public policy; (4) civil harassment; and (5) violation of 42 U.S.C. § 1983. Defendants removed the case to the U.S. District Court on March 28, 2008 on the basis of federal question jurisdiction, 28 U.S.C. § 1331.
On August 21, 2008, Libby filed a motion to disqualify counsel Steven Brock and the law firm of Lackie, Dammeier McGill APC ("Mot."), the declaration of Keith D. Libby ("Libby Decl."), and the Declaration of G. Arthur Meneses ("Meneses Decl."). Plaintiff filed his Opposition ("Opp'n") on August 29, 2008 and attached the Declarations of Steven J. Brock ("Brock Decl.") and Dieter Dammeier ("Dammeier Decl."). Libby filed his reply on September 9, 2008, as well as the Declaration of G. Arthur Meneses ("Meneses Reply Decl.") and objections to the Dammeier and Brock Declarations.
II. Libby's Evidentiary Objections
Libby filed several evidentiary objections to the Brock and Dammeier Declarations.
A. Objections to Brock Declaration
In his first objection, Libby objects to lines 1-4, 26-28 of ¶ 19 of Brock's declaration, regarding the facts underlying Libby's 2003 case, on the grounds of: (1) "lack of foundation, including failure to demonstrate personal knowledge;" (2) "speculative;" (3) "conclusory;" and, (4) "irrelevant and immaterial." The Court overrules this objection.
In his second objection, Libby objects to lines 8-17 of ¶ 28 of Brock's declaration, which elaborate on Lackie's legal field of specialization, on the grounds of: (1) "argumentative;" (2) "conclusory;" (3) "improper legal conclusion;" and (4) "lack of foundation, including failure to demonstrate personal knowledge." The Court sustains this objection.
In his third objection, Libby objects to lines 18-26 of ¶ 29 of Brock's declaration, which recount Lackie's legal experience, on the grounds of: (1) "argumentative;" (2) "conclusory;" (3) "improper legal conclusion;" and (4) "lack of foundation, including failure to demonstrate personal knowledge." The Court sustains this objection.
In his fourth objection, Libby objects to lines 1-4, 27-28 of ¶ 30 of Brock's declaration, which states the prejudice to Plaintiff if Lackie is disqualified, on the grounds of: (1) "argumentative;" (2) "conclusory;" (3) "improper legal conclusion;" and (4) "lack of foundation, including failure to demonstrate personal knowledge." The Court sustains this objection.
In his fifth objection, Libby objects to line 5 of ¶ 31 of Brock's declaration, which states that Libby is not a current client of Lackie's, on the grounds of: (1) "argumentative;" (2) "improper legal conclusion;" (3) "lack of foundation, including failure to demonstrate personal knowledge." The Court overrules this objection.
In his sixth objection, Libby objects to lines 14-18 of ¶ 33 of Brock's declaration, which states that Lackie does not represent Libby on any matter through the Legal Defense Fund, on the grounds of: (1) "improper legal conclusion;" (2) "argumentative;" (3) "lack of foundation, including failure to demonstrate personal knowledge." The Court overrules this objection.
B. Objections to Dammeier Declaration
In his first objection, Libby objects to lines 19-21 of ¶ 6 of Dammeier's declaration, which state Dammeier did not possess confidential information regarding Libby's 2003 case, on the grounds of: (1) "irrelevant and immaterial;" (2) "lack of foundation, including failure to demonstrate personal knowledge;" and, (3) "improper legal conclusion." The Court overrules this objection.
In his second objection, Libby objects to lines 22-24 of ¶ 7 of Dammeier's declaration, which state that he had spoken with Libby in the past, on the grounds of: (1) "irrelevant;" and (2) "lack of foundation, including failure to demonstrate personal knowledge. . . ." The Court overrules this objection.
In his third objection, Libby objects to lines 25-27 of ¶ 8 of Dammeier's declaration, which state Mr. Brock did not have contact with Libby's former counsel at Lackie, on the grounds of: (1) "lack of foundation, including failure to demonstrate personal knowledge;" (2) "improper legal conclusion;" (3) "speculative;" and, (4) "argumentative." The Court overrules this objection.
In his fourth objection, Libby objects to lines 1-6 of ¶ 9 of Dammeier's declaration, which state that Dammeier is unaware of the facts or legal issues regarding Libby, on the grounds of: (1) "irrelevant;" (2) "lack of foundation, including failure to demonstrate personal knowledge . . .;" (3) "argumentative;" and, (4) "improper legal conclusion." The Court overrules this objection.
In his fifth objection, Libby objects to line 9 of ¶ 11 of Dammeier's declaration, which states that Libby is not a current client of Lackie's, on the grounds of: (1) "argumentative;" (2) "improper legal conclusion;" and (3) "lack of foundation, including failure to demonstrate personal knowledge." The Court overrules this objection.
In his sixth objection, Libby objects to lines 18-22 of ¶ 13 of Dammeier's declaration, which states that Lackie does not represent Libby on any matter through the Legal Defense Fund, on the grounds of: (1) "improper legal conclusion;" (2) "argumentative;" (3) "lack of foundation, including failure to demonstrate personal knowledge." The Court sustains this objection.
In his seventh objection, Libby objects to lines 5-13 of ¶ 15 of Dammeier's declaration, which elaborates on Lackie's legal field of specialization, on the grounds of: (1) "argumentative;" (2) "conclusory;" (3) "improper legal conclusion;" and (4) "lack of foundation, including failure to demonstrate personal knowledge." The Court sustains this objection.
In his eighth objection, Libby objects to lines 14-19 of ¶ 16 of Dammeier's declaration, which states the prejudice to Plaintiff if Lackie is disqualified, on the grounds of: (1) "argumentative;" (2) "conclusory;" (3) "improper legal conclusion;" and (4) "lack of foundation, including failure to demonstrate personal knowledge." The Court sustains this objection.
III. DISCUSSION
The Central District of California has adopted the Rules of Professional Conduct of the State Bar of California, and the decisions construing them, as the governing standards of professional conduct. See L.R. 83-3.1.2.
A. California Rule of Professional Conduct 3-310(C)
Under Rule of Professional Conduct 3-310(C), "[a] member shall not, without the informed written consent of each [current] client: . . . (2) [a]ccept or continue representation of more than one client in a matter in which the interests of the clients actually conflict. . . ." Even if the simultaneous representations are unrelated, disqualification may be required. See Flatt v. Superior Court, 9 Cal.4th 275, 284 (1994); Fremont Indem. Co. v. Fremont Gen. Corp., 143 Cal. App. 4th 50, 64 (2006); Truck Ins. Exchg. v. Fireman's Fund Ins. Co., 6 Cal. App. 4th 1050, 1060 (1992).
The parties dispute whether Libby is a current client of Lackie, Dammeier McGill APC ("Lackie"). Libby claims he is presently a client of the firm because, as a Barstow police officer, he pays dues to the Barstow Police Officer's Association, which uses the dues paid to obtain legal representation for its members through the Legal Defense Fund of the Police Officer's Research Association of California, and Lackie is a panel law firm that routinely provides services to members of the Association. (Mot. at 7, 8; see also Libby Decl. at ¶¶ 2, 9.) Libby is not currently using the firm's legal services but he "continues to be entitled to representation by Lackie through the Legal Defense Fund." (Mot. at 8.) Lackie claimS that Libby is not a client at the present time and that the firm "does not have a current attorney-client relationship, a retainer, or any other obligation to represent Libby." (Opp'n at 13.)
When there is conflicting evidence about whether an attorney-client relationship exists, the Court must evaluate the evidence of the factual basis for the determination. See Chapman v. Superior Court, 130 Cal. App. 4th 261, 272 (2005). Evaluating the evidence in the record here, the Court finds Libby's belief that he is presently a client of Lackie's an unreasonable one. As a dues-paying member of the Barstow Police Officer's Association, Libby has not sought legal advice and secured that advice from Lackie. See Gulf Ins. Co. v. Berger, Kahn, Shafton, Moss, Figler, Simon Gladstone, 79 Cal. App. 4th 114, 126 (2000). Relying only on his continued payment of dues to the Barstow Police Officer's Association, Libby has not presented enough evidence to demonstrate that he has a continuing attorney-client relationship with Lackie. Thus, the Court finds this is not a basis upon which Lackie should be disqualified.
B. California Rule of Professional Conduct 3-310(E)
Under Rule of Professional Conduct 3-310(E), "[a] member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment."
It is undisputed that Libby did not consent in writing or otherwise to Lackie's representation of Holm in the present action. (Mot. at 5; Libby Decl. ¶ 11.)
In California, "[a] former client may seek to disqualify a former attorney from representing an adverse party by showing the former attorney actually possesses confidential information adverse to the former client. However, it is well settled actual possession of confidential information need not be proved in order to disqualify the former attorney. It is enough to show a `substantial relationship' between the former and current representation. If the former client can establish the existence of a substantial relationship between representations, the courts will conclusively presume the attorney possesses confidential information adverse to the former client." H. F. Ahmanson Co. v. Salomon Brothers, Inc., 229 Cal. App. 3d 1445, 1452 (1991);see also Flatt v. Superior Court, 9 Cal. 4th 275, 283 (1994) ("Where the requisite substantial relationship . . . can be demonstrated, access to confidential information . . . is presumed and disqualification . . . is mandatory."). Disqualification on this basis "extends vicariously to the entire firm." Flatt, 9 Cal. 4th at 283-84.
1. Substantial Relationship Test
The "substantial relationship" test focuses on the "similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases." H.F. Ahmanson Co., 229 Cal. App. 3d at 1455 (quoting Silver Chrysler Plymouth, Inc. v. Chrysler Motor Corp., 518 F.2d 751, 760 (2d Cir. 1975) (Adams, J., concurring)); see also Morrison Knudsen Corp. v. Hancock, Rothert Bunshoft, LLP, 69 Cal. App. 4th 223, 234 (1999). "If the former client can establish the existence of a substantial relationship between representations, the court will conclusively presume the attorney possesses confidential information adverse to the former client." H.F. Ahmanson Co., 229 Cal. App. 3d at 1452; see also In re County of Los Angeles, 223 F.3d 990, 994 (9th Cir. 2000) ("If there is a reasonable probability that confidences were disclosed [in an earlier representation] which would be used against the client in [a] later, adverse representation, a substantial relationship between the two cases is presumed." (quoting Trone v. Smith, 621 F.2d 994, 998 (9th Cir. 1980).); Styles v. Mumbert, 164 Cal. App. 4th 1163, 1167 (2008); Fox Searchlight Pictures, Inv. v. Paladino, 89 Cal. App. 4th 294, 300 (2001).
Libby argues that the 2003 case in which he was represented by Lackie is substantially related to the current action, where Lackie represents Plaintiff Holm, who is suing Libby. According to Libby, "[t]he matters are substantially related because they both involve the alleged application of the City of Barstow's policies, practices and procedures in responding to Barstow Police Officers' exercise of free speech regarding alleged wrongful conduct by senior management in the Barstow Police Department." (Reply at 1.) Lackie argues the two cases are unrelated and do not arise from the same events. (Opp'n at 12.)
It is undisputed that Plaintiff Holm's case does not arise from the identical facts or legal issues as did Libby's former case. The cases, however, do share similar facts and legal claims. (See Def.'s Ex. A; Compl.)
a) Factual Similarities
In 2003, Libby retained Lackie to represent him in his case against the Barstow Police Department and the City of Barstow. (Libby Decl. at ¶ 7; Def.'s Ex. A.) Libby claimed that the defendants had "wrongfully retaliated against [him] and took action to suppress [his] civil rights as a result of statements [he] made on behalf of the Barstow Police Officers Association." (Libby Decl. at ¶ 8.) Specifically, Libby alleged that he had "distributed a confidential memorandum to members of the Barstow Police Officers Association" that expressed concerns about the "temporary appointment of rank and file officers [who had not received adequate training] to the position of supervisor in the absence of an on duty corporal or sergeant." (Def.'s Ex. A ¶ 12.) For this act of "inciting insubordination," Libby was disciplined and allegedly suffered "various acts of intimidation, reprisal, retaliation, suppression and extreme exercise;" that discipline was the basis for Libby's claims. (Id. at ¶¶ 13, 22)
The facts of Holm's claims differ somewhat. Holm alleges he wrote a report after a traffic accident involving the Chief of Police's son-in-law concluding the son-in-law was at-fault for the accident. (Compl. at ¶¶ 11-13.) Allegedly, Holm's supervisors, including Libby, repeatedly instructed Holm to change his report to reflect that the Chief's son-in-law was not at fault. (Id. at ¶¶ 15-26.) Holm allegedly stated his objections to changing the report but the changes were made anyway. (Id. at ¶ 21.) Holm filed an internal complaint with the City of Barstow regarding the incident and allegedly has suffered negative consequences, including harassment, as a result. (Id. at ¶¶ 27-39.)
The facts of Libby's claims and those of Holm are similar. Both allegedly arise out of a police officer's alleged exercise of his First Amendment right to free speech. Furthermore, both arise from alleged wrongful discipline and retaliation imposed as a result of the officer's exercise of his free speech rights. Finally, and most critically, both Holm's case and Libby's case involve the same law enforcement agency, the City of Barstow's police department. "The facts of cases are never entirely alike" but these facts are sufficiently similar to satisfy the fact prong of the substantially related test. See Morrison Knudsen Corp., 69 Cal. App. 4th at 235 (substantial relationship found between two successive cases about soil issues: (1) former case concerned with "placement of a clay pad in an unstable location" and (2) present case about "whether corrosive sand could be used above metal culverts that pass under a roadway.").
b) Legal Similarities
Libby's 2003 case sought damages and injunctive relief for injury suffered "as a result of the wrongful retaliation for lawful exercise of individual civil rights and liberties, free expression and association, labor organizational, social, and political activities." (Def's Ex. A.) In this case, Holm seeks money damages and injunctive relief for the alleged retaliation, harassment, and wrongful termination he suffered because he exercised his free speech rights. (See Compl.) These claims are nearly identical, and both assert the alleged wrongdoer is the same entity. Thus, the Court finds the legal claims satisfy the similarity prong of the substantial relationship test.
c) Attorney Involvement
Lackie argues that its former representation of Libby resulted in no confidential information being conveyed to the firm and that no information adverse to Libby was communicated either. (Opp'n at 9.) Alternatively, the firm argues that, if confidential information was imparted to the attorneys representing Libby in 2003, it was not conveyed to Plaintiff Holm's current lawyer, Steven J. Brock ("Brock"), because of the firms's screening methods. (Id. at 13; Brock Decl. at ¶¶ 2, 14, 16, 19, 20, 24-27.)
In Rosenfeld Construction Co. v. Superior Court, 235 Cal. App. 3d 566, 573 (1991), the California Court of Appeal held that "knowledge obtained by one member of a firm of lawyers is imputed to all the other members." Moreover, the California Supreme Court has indicated the presumption of shared confidences in this context is not rebuttable. See Flatt, 9 Cal. 4th at 283-84 ("[W]here an attorney is disqualified because he formerly represented and therefore possesses confidential information regarding the adverse party in the current litigation, vicarious disqualification of the entire firm is compelled as a matter of law.") (quoting Henriksen v. Great Am. Sav. Loan, 11 Cal. App. 4th 109, 117 (1992)). Accordingly, knowledge and confidences obtained by the associates who represented Libby in his former case are imputed to the entire Lackie firm.
The cases Lackie cites do not support a contrary conclusion. (See Opp'n at 13-14 (citing cases).)
In San Gabriel Basin Water Quality Authority v. Aerojet-General Corp., the court reasoned that "[i]n cases where the disqualification request is not based on an attorney-client relationship. . . . the better approach is to examine the circumstances of each case." 105 F. Supp. 2d 1095, 1103 (C.D. Cal. 2000) (citations and quotation marks omitted). That case, however, confirmed that "[v]icarious disqualification of a firm is required where an attorney is disqualified because he represented the adverse party." See id.
Similarly, the court in Adams v. Aerojet-General Corp., did not question this rule. See 86 Cal. App. 4th 1324, 1333 (2001).
Given the factual and legal similarity between Libby's 2003 case and Holm's present case, a presumption arises that the law firm "possesses confidential information about [Libby] which would be compromised if [the firm] were allowed to take an adverse position after the representation ended." Styles v. Mumbert, 164 Cal. App. 4th 1163, 1167 (2008); see also Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 294, 300 (2001).
That Brock did not work at Lackie until after the departure of the attorneys who had previously represented Libby is immaterial. The law firm had an imputed conflict by nature of its 2003 representation of Libby; that imputed conflict did not dissolve once the lawyers who personally had performed the work left the firm. Since Lackie's 2003 representation of Libby and its current representation of Holm are substantially related factually and legally, the Court presumes the firm was privy to confidential information and must be disqualified; by nature of Brock joining Lackie, he too is disqualified as a member of the firm, from representing Holm in the present action.
On this point, the Court finds persuasive ABA Model Rule 1.10(b), which states: "When a lawyer has terminated an association within a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has information protected by [confidentiality] rules that is material to the matter."
The parties contest whether Lackie in fact received confidential information. While the firm insists that it did not, Libby declares that he did impart such information. Libby states in his declaration: "I consulted with attorneys Michael Morguess and Saku Ethir of th[e] [Lackie] firm. In those consultations I provided these attorneys with confidential information concerning my employment and in particular my knowledge, understanding and involvement in the development and implementation of Barstow Police Department policies, practices, and procedures." (Libby Decl. at ¶ 3.) Because the Court finds a substantial relationship between the two representations, it need not resolve this question.
C. Canon 9 of American Bar Association's Model Code of Professional Responsibility
Canon 9 of the American Bar Association's Model Code of Professional Responsibility states: "a lawyer should avoid even the appearance of professional impropriety." As Libby correctly points out, the Ninth Circuit has held that the violation of Canon 9 is an independent basis for disqualification. See In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 658 F.2d 1355, 1360 (1981) ("If Canon 9 were not separately enforceable, it would be stripped of its meaning and significance."). Canon 9 violations, alone, will be grounds for disqualification when "[t]he impropriety affect[s] the public's view of the judicial system or the integrity of the court." Id.
The Court finds Lackie's representation of Holm in this case gives a strong and clear "appearance of professional impropriety." Lackie represented Libby five years ago and now has turned around and sued him on a substantially related matter. Lackie has violated Canon 9 and this presents further evidence of grounds for disqualifying Lackie from representing Holm in this case.
D. Prejudice to Plaintiff Holm
The Court is aware that disqualification of Lackie will prejudice Plaintiff Holm to some degree. Balancing the equities, however, the Court must grant Libby's motion to disqualify Lackie.
Lackie argues that Libby delayed unnecessarily in bringing this Motion. (See Opp'n at 5-7.) The Court will deny disqualification motions brought for purely strategic purposes to dely the litigation, harass the opposing party, or pressure a more favorable settlement. See H.F. Ahmanson Co., 229 Cal. App. 3d at 1454; River West, Inc. v. Nickel, 188 Cal. App. 3d 1297, 1308-09 (1987) (undue delay in bringing disqualification motion may foreclose former's client's claim of conflict of interest). In evaluating the effect, if any, of a party's delay in bringing a motion to disqualify, a court considers when the client obtained knowledge of the conflict. See River West, Inc., 188 Cal. App. 3d at 1309, 1311.
The Court finds Lackie's argument unpersuasive. Holm filed this action on February 29, 2008 and Libby's counsel, Mr. Meneses ("Meneses"), first raised the subject of a possible conflict of interest with Plaintiff's counsel on May 21, 2008. (See Reply at 2.) According to Meneses' declaration, he first learned of the potential conflict of interest from his client on May 20, 2008. (See Meneses Reply Decl. at ¶ 7.) From May until July, counsel met and conferred regarding the conflict of interest. Meneses filed his motion on August 12, 2008.
Apparently, there was a forty day delay between Meneses's request for a copy of Libby's 2003 complaint and his receipt of said complaint, due to the file being misplaced. (See Reply at 3; Meneses Reply Decl. at ¶ 9.)
Meneses did not unduly delay before bringing the disqualification motion. In fact, after continuous communications with Lackie regarding the issue, Libby's counsel appears to have put off filing his motion out of professional courtesy. (Id. at ¶ 13 ("I told Mr. Brock in my email that because of his vacation plans, I would attempt to accommodate him by not setting the hearing on the motion to disqualify at a time where he would be unavailable to either prepare an opposition or attend the hearing.").) Thus, Lackie's argument that Libby delayed filing his disqualification motion as some sort of gamesmanship is disingenuous.
In light of the substantial relationship between the two representations; the fact that Mr. Meneses did not delay bringing his motion to disqualify; the fact that Lackie did not obtain a waiver despite Rule 3-310(E); and the harm that will result to Libby if Lackie is not disqualified, the Court finds disqualification is appropriate here.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Libby's Motion to Disqualify Lackie. Lackie is directed to cease all representation of Plaintiff and to turn over all files relating to the prosecution of Plaintiff's action.