Judge: David A. Hoffer, Case: 30-2021-1185632, Date: 2023-01-09 Tentative Ruling
Defendant Costco Wholesale Corporation’s (“Costco”) Motion to Disqualify (“Motion”) plaintiff Caroline Park’s (“Plaintiff”) current counsel of record, Downtown L.A. Law Group (“DTLA”), is DENIED.
The court first notes Costco did not unreasonably delay in filing the present motion and therefore has not “impliedly waived” the present issue. (Liberty Nat'l Enterprises, L.P. v. Chicago Title Ins. Co. (2011) 194 Cal. App. 4th 839, 845.)
“A motion to disqualify counsel brings the client's right to the attorney of his or her choice into conflict with the need to maintain ethical standards of professional responsibility. [Citations.] The paramount concern is the preservation of public trust in the scrupulous administration of justice and the integrity of the bar. [Citations.] ... [Citation.]” “A trial court's authority to disqualify an attorney derives from the court's inherent power to ‘control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.’” (Costello v. Buckley (2016) 245 Cal. App. 4th 748, 753.) “‘The obligation to represent the client with undivided fidelity does not end with the matter in which the lawyer may have been employed. Thenceforth the lawyer must refrain not only from divulging the client's secrets or confidences, but also from acting for others in any matters where such secrets or confidences or knowledge of the client's affairs acquired in the course of the earlier employment can be used to the former client's disadvantage.’” [Citation.] In short, an attorney may never “use against his former client knowledge or information acquired by virtue of the previous relationship.” ‘ “ (Id.)
In determining whether disqualification is appropriate, the court should, “focus 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. As part of its review, the court should examine the time spent by the attorney on the earlier cases, the type of work performed, and the attorney's possible exposure to formulation of policy or strategy.” (H. F. Ahmanson & Co. v. Salomon Bros., Inc. (1991) 229 Cal. App. 3d 1445, 1455.)
Werbin states he has never worked on a Costco case while employed with DTLA, nor has he ever consulted with, instructed, or advised any other DTLA attorney or staff regarding any aspect of a Costco case. (Werbin Decl. ¶¶ 11, 20-21; Morgan Decl. ¶ 14.) Werbin states he never represented Costco in the present matter, and he has not been assigned to this matter nor does he have an information regarding Plaintiff, her injuries, the mechanism of her injury or even the date of the injury. (Werbin Decl. ¶ 15.) He does not recall working on any Costco matter involving the Park Avenue Costco nor does he have any information regarding the location. (Werbin Decl. ¶¶ 16-17.) The firewall prohibits Werbin from accessing the case files and it is DTLA’s policy to not assign any Costco matters to the team Werbin is assigned to. (Werbin Decl. ¶¶ 23-25.)
There is no evidence Werbin was an attorney in a case that involved the Park Avenue Costco where the incident is alleged to have occurred. There is also no evidence Werbin represented Costco in any matter with similar facts as the present one. Werbin is alleged to have represented Costco in slip-and-fall or trip-and-fall matters; whereas here, Plaintiff has alleged a stack of tires collapsed and struck Plaintiff causing her injuries. (Complaint p. 4.) While these matters involve premises liability with some overlap in the underlying law, the factual situations are very different. However, Werbin does appear to have extensive experience regarding Costco’s confidential litigation strategies and legal policies and procedures. Costco has produced evidence Werbin was very involved in 20+ cases over a period of 2.5 years, which accounted for an estimated 23% of Werbin’s billable hours during that time. (Johnston Decl. ¶ 8; Morgan Decl. ¶ 4.) Involvement included everything from discovery up to and including representation of Costco at trial. Werbin appears to have been exposed to Costco’s California defense strategies both by interaction with staff and claims management for the cases Werbin worked on, but also due to attendance at the workshop on Costco’s California defense strategies. (Tsao Decl. ¶ 3; Johnston Decl. ¶ 7, Ex. 1.) Costco has likely shown Werbin individually should be disqualified at this time as opposing counsel on Costco matters similarly related to those wherein Werbin represented Costco. The next question is whether Werbin’s disqualification extends to the entire DTLA law firm.
“Under California law a law firm is not subject to disqualification because one of its attorneys possesses information concerning an adversary's general business practices or litigation philosophy acquired during the attorney's previous relationship with the adversary.” (Wu v. O'Gara Coach Co., LLC (2019) 38 Cal. App. 5th 1069, 1083.)
Costco cites to Hitachi, Ltd. v. Tatung Co. (N.D. Cal. 2006) 419 F.Supp.2d 1158 (“Hitachi”), for the premise that an “ethical wall” is insufficient in “substantially related” matters and therefore mandatory automatic disqualification is required. Hitachi was called into doubt by Sierra v. Costco Wholesale Corp. (2022), No. 22-CV-01444-JSW, 2022 WL 4454359, at *5 (“Sierra”), wherein the court noted Hitachi pre-dated the matter of literalism Kirk v. First Am. Title Ins. Co. (2010) 183 Cal. App. 4th 776 (“Kirk”). (Sierra, supra, 2022 WL 4454359 at fn. 2.) Kirk discussed in-depth the issues related to “ethical walls” and noted the changing reality of representation and attorneys moving from firm to firm made automatic rule on vicarious disqualification outdated. (Kirk, supra, 183 Cal. App. 4th at 801-02.)
For vicarious disqualification of an entire firm, “[o]nce the moving party in a motion for disqualification has established that an attorney is tainted with confidential information, a rebuttable presumption arises that the attorney shared that information with the attorney's law firm. The burden then shifts to the challenged law firm to establish “that the practical effect of formal screening has been achieved. The showing must satisfy the trial court that the [tainted attorney] has not had and will not have any involvement with the litigation, or any communication with attorneys or [ ]employees concerning the litigation, that would support a reasonable inference that the information has been used or disclosed.” (Kirk, supra, 183 Cal. App. 4th at 809–10.)
“The specific elements of an effective screen will vary from case to case, although two elements are necessary: First, the screen must be timely imposed; a firm must impose screening measures when the conflict first arises. It is not sufficient to wait until the trial court imposes screening measures as part of its order on the disqualification motion. [Citations.] Second, it is not sufficient to simply produce declarations stating that confidential information was not conveyed or that the disqualified attorney did not work on the case; an effective wall involves the imposition of preventive measures to guarantee that information will not be conveyed. [Citation.] “To avoid inadvertent disclosures and establish an evidentiary record, a memorandum should be circulated warning the legal staff to isolate the [tainted] individual from communications on the matter and to prevent access to the relevant files.” (Id., at 810.) “The typical elements of an ethical wall are: [1] physical, geographic, and departmental separation of attorneys; [2] prohibitions against and sanctions for discussing confidential matters; [3] established rules and procedures preventing access to confidential information and files; [4] procedures preventing a disqualified attorney from sharing in the profits from the representation; and [5] continuing education in professional responsibility.” (Id., at 810-11.)
Regarding timely screening, DTLA instituted its present FileVine system in December 2021, well prior to taking over as attorneys in this matter in August 2022. (Rezkallah Decl. ¶ 3.) Though Costco argues this was well after the time when Werbin’s employment with DTLA began, that timeline does not appear to be relevant as screening implemented before undertaking the challenged representation is proper to prevent any confidences from being disclosed.” (In re Complex Asbestos Litig. (1991) 232 Cal. App. 3d 572, 594.) What matters is that Werbin and his team are and always have been prohibited from accessing this casefile. The FileVine system sets up password protected firewalls that prohibit anyone who is not directly assigned to a case from searching for a case and accessing that casefile. (Rezkallah Decl. ¶¶ 4-5; Morgan Decl. ¶ 12.) Neither Werbin or his team are assigned to Costco cases and therefore are not permitted to access Costco cases. (Rezkallah Decl. ¶ 6; Morgan Decl. ¶¶ 8-10; Werbin Decl. ¶¶ 23-25.) During his employment with DTLA, Werbin has not worked on any Costco cases nor has he ever consulted with, instructed, or advised any other DTLA attorney or staff regarding any aspect of a Costco case. (Werbin Decl. ¶¶ 11, 20-21; Morgan Decl. ¶ 14.) Werbin states he never represented Costco in the present matter, and he has not been assigned to this matter nor does he have an information regarding Plaintiff, her injuries, the mechanism of her injury or even the date of the injury. (Werbin Decl. ¶ 15.) He does not recall working on any Costco matter involving the Park Avenue Costco nor does he have any information regarding the location. (Werbin Decl. ¶¶ 16-17.) The screen was timely imposed as it pre-dates this matter and it appears to involve preventative measures to guarantee information will not be conveyed.
DTLA has also shown there is a separation of attorneys into teams that do not overlap, there are prohibitions to sharing confidential matters, and there are established rules and procedures for preventing access to confidential information and files. Finally, continuing education does not appear to be a major factor as “California requires compliance with mandatory Minimum Continuing Legal Education requirements.” (Kirk, supra, 183 Cal. App. 4th at 811 and fn. 32.)
DTLA has provided evidence of an effective “ethical wall” between Werbin and Costco matters. DTLA cannot be vicariously disqualified in this matter.
The Motion is, therefore, denied.
Plaintiff is ordered to give notice of this ruling.