Two interesting cases came down last week from the California appellate courts.
The first case involved a plaintiff who moved to disqualify the defense attorney because the attorney was also a named defendant. The court rejected the motion on standing grounds: “Before a complaining party can bring a motion to disqualify an attorney, the complaining party must have or have had an attorney-client relationship with that attorney, or some sort of confidential or fiduciary relationship must exist or have existed, and there is a threat of disclosure of the complaining party’s confidential information.” The court begrudgingly conceded that a litigant may nevertheless have standing where the attorney’s ethical violation might taint the proceedings, but “even if it were found that [the attorney] breached his ethical duties by representing co-defendants without obtaining the co-defendants’ written consent (although there is no evidence of such a breach), [the plaintiff] has failed to show that any alleged breach would have any impact on the just and lawful determination of [the plaintiff’s] claims.” The full, unpublished opinion is available here: Thakar v. Smitray Inc. (Cal. Ct. App. May 21, 2015).
The second case involved a law firm that had jointly represented a division of a church (which the court treated as a corporate entity) in a bitter dispute over control. The church was eventually dismissed from the suit, but at trial with the remaining factions, the law firm needed to cross-examine the church’s reverend (whom the court deemed to be in the church’s “control group”). The opposing party moved to bar the cross-examination, relying on cases and principles establishing a “bright-line” rule that cross-examining a former client in the same or substantially related matter warrants disqualification. The law firm defended its prospective cross-examination on a number of theories, each partly or fully resting on the fact that it had obtained very little, if any, confidential information from the church. Indeed, the law firm pointed out that it had jointly represented the church and the (now) adverse party, and the attorney-client privilege would generally not apply to disputes between jointly represented parties.
The court was unpersuaded with the firm’s arguments and upheld the trial court’s refusal to permit the cross-examination for the following reasons (among others): (1) because the former and current matters were the same, the law firm was presumed to have received the church’s confidential information; (2) the law firm argued that “the prohibition against continuing representation of one client when the representation is adverse to a former client does not apply where the attorney jointly represented the parties in the prior matter,” but “[a]s thoroughly examined and explained in Fiduciary Trust International of California v. Superior Court (2013) 218 Cal.App.4th 465, 482-486 (Fiduciary Trust), this purported exception to the bar against adverse successive representations has been widely rejected, and its continued viability has been called into question;” (3) unlike Cornish v. Superior Court, 209 Cal. App. 3d 467 (1989), in which “the court held that disqualification was not required where the attorney had jointly represented a contractor and his subcontractor, but the attorney did not agree to defend the contractor until he had obtained the contractor’s informed written waiver of any objection to attorney’s continued representation of subcontractor if a conflict arose between the two parties,” the law firm here “has provided no evidence that the [the church] gave written consent to [the law firm] continuing to represent appellants should the interests of the two parties diverge;” and (4) “[t]he ethical bar against acting in a manner adverse to a former client’s interests implicates not just the duty to maintain client confidences, but the duty of loyalty, which counsel would have violated by cross-examining a representative of their former client. (See Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)”
The full opinion is available here: Kim v. True Church Members of the Holy Hill Cmty. Church (Cal. Ct. App. May 21, 2015).