Judge: Mark H. Epstein, Case: 24SMCV05544, Date: 2025-02-06 Tentative Ruling

Case Number: 24SMCV05544    Hearing Date: February 6, 2025    Dept: I

This is a motion to disqualify counsel.  The motion is DENIED.

Plaintiff has filed a Song-Beverly case.  He retained The Lemon Pros, a law firm specializing in representing plaintiffs in Song-Beverly cases.  One of the attorneys in that firm is Greco.  Greco used to be an attorney at Squire Patton Boggs, of one of the major firms that Volkswagen had retained to defend it in Song-Beverly cases.  No one claims that Greco ever worked for Volkswagen in any matter involving plaintiff Barnes, and Greco is apparently not working on or assigned to Barnes’ case at Lemon Pros.  Even so, Volkswagen seeks to disqualify the law firm claiming that Greco’s prior work gave him access to confidential information pertinent to the instant case and that Lemon Pros’ screening promises are inadequate.  Preliminarily, both parties sought judicial notice of various documents.  Volkswagen requests judicial notice of complaints in two cases.  That request is granted.  The court also grants the request for Greco’s profile on the State Bar website.  The request for judicial notice of the two deposition transcripts is denied in that a deposition transcript is not subject to judicial notice.  But the court can nonetheless treat it as evidence establishing who was present at the deposition.  The court grants plaintiff’s request for judicial notice of exhibits 1-21 other than exhibit 7 as evidence of the records and any jural effect they might have.  The request for judicial notice as to exhibit 7 is denied, as it is a transcript of a hearing and the court cannot judicially notice it.  The court also notes that whether or not Greco was disqualified at other hearings is not binding on this court.  The court disregards the relevance objections.  In a way, this is an objection that can never be waived (for motion purposes).  If the evidence is not probative, then it will not form the basis for this court’s ruling.  If it is probative, then it is relevant.  Either way, the objection need not be made.  Plaintiff’s objections to the Conboy declaration are overruled.  He is attesting to his view of Greco’s role and his understanding of what Greco would have learned while at Squire—his former firm.  He would have that knowledge and his testimony is competent.  As to objection 18, it is a statement that Lemon Law Pros sent a letter to Volkswagen concerning Greco’s employment in early December 2024.  While one might claim it runs afoul of the secondary evidence rule, the court will accept it for these purposes.  But it is strange that Volkswagen did not actually attach that letter.  There are a number of exhibits; one would have thought that this letter, which is a critical item, would have been included in the motion.  Lemon Pros did attach the letter, and it gives some pretty significant details as to how Greco has been screened off from Volkswagen cases.  None of those specifics was discussed in the moving papers.  The court cannot help but believe that the omission was deliberate and tactical. 

Tangentially, the court notes that the moving papers exceed the page limit.  The court does not know why the papers could not have been somewhat trimmed or, if necessary, why leave to file an overlength brief was not sought.  Plaintiff also skirted the rules.  On January 28, which was after the opposition was due, plaintiff filed a second request for judicial notice.  The reason it is late is because the document as to which notice was requested came in late, but the right answer would have been to seek leave.  That said, the document is not really necessary to the court’s decision.  In any event, the court will overlook these issues.

Disqualification motions affect two fundamental aspects of the representation function.  On the one hand, the ability of a client to choose her or his lawyer is fundamental.  The attorney/client relationship can be a personal one.  Lawyers are not fungible and the court will not lightly interfere with that relationship, let alone tell a client that the chosen lawyer must be disqualified.  On the other hand, lawyers have ethical duties to justice and to clients that are also paramount.  As to a client, a lawyer has two critical duties: loyalty and confidentiality.  The former largely ends with the representation, but the latter continues even after the attorney/client relationship is over.  Thus, a lawyer who obtains confidential information about a client during a representation is obligated to keep the confidence even after the representation has concluded.  These fiduciary duties will, in an appropriate case, overcome a client’s right to a lawyer of the client’s choosing.  Moreover, courts have a role in policing this.  Courts have the inherent power to control the conduct of ministerial officers connected with judicial proceedings, and that includes disqualifying counsel where appropriate.  (People ex rel. Department of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135.)  This includes, when necessary, disqualifying counsel from successive cases.  The first question in deciding whether disqualification is appropriate is to determine whether the earlier case bears a “substantial relationship” to the later case.  (Lynn v. George (2017) 15 Cal.App.5th 630.)

The usual situation in which there is a substantial relationship is where, for example, the lawsuits involve the same transaction or occurrence or people such that the lawyer would have received specific factual information while engaged in the earlier case that would have a direct effect on the second case.  It is up to the former client to establish the substantial relationship.  In doing so, however, the former client is not required to disclose privileged material, nor provide such granularity that the privileged information could be discerned.  Further, while usually it will be a specific underlying fact that is at issue, there is a doctrine in which what the attorney knows is not something specific about the particular case, but rather more general information about the client.  This is sometimes called a “playbook” relationship.  The theory is that the attorney is given access to the client’s thinking at the highest levels such that the attorney has confidential information about how a client approaches cases and what sorts of things might be used to obtain an improper advantage.  For example, suppose that a lawyer representing a client learned that the general counsel of the former corporate client’s compensation was tied to the amount of money spent on outside counsel and that as a result, the general counsel always wanted to settle cases early and never wanted to incur the expense of litigation.  While that might have nothing to do with the new case in which the attorney is representing a client suing the former client, it would be the kind of information that the new client could use to obtain an unfair advantage during settlement talks or the like.  There are a myriad of other hypotheticals one might imagine where it is the way the entity approaches litigation that might matter even though there is no particular fact that is germane to the merits of the new case.  That is the gist of Volkswagen’s argument.  It claims that at his prior firm Greco obtained high level information and access to Volkswagen’s policies, practices, and procedures in dealing with Song-Beverly Act cases.  He spoke at high level litigation strategy meetings and spoke with Volkswagen’s experts on the subject.  He also spearheaded and advised as to the strategies to be employed in litigating or settling cases.  He also had access to many executives.  According to Volkswagen, that kind of information is priceless and confidential.  Knowing that confidential information allows Lemon Pros to litigate against Volkswagen unfairly, even though there might be no specific knowledge concerning the particular defect allegedly at issue.  That said, playbook type disqualification is a rarity.  The information obtained must be closely tethered to an actual confidence that has a very direct effect on the subsequent case.

The problem is that the more generic the information learned, the harder it will be to satisfy the material relationship test.  It is one thing to know that the general counsel’s bonus is tied to outside counsel’s fees; it is another to know that the general counsel does not generally like jury trials or that the company tends to be litigation averse.  It is one thing to know that a particular defendant has a policy and strategy of not making a PMK witness available until compelled to do so by a court; it is another thing to know that PMK witnesses are very busy.  In both cases, the former might be the sort of “playbook” information that is confidential within the doctrine’s meaning; the latter less so.  And that is at least some of the problem here.  Volkswagen’s showing is not specific enough in the playbook context to get through the first gate.  The court recognizes, as set out above, that Volkswagen is not required to disclose the confidential information to make its showing, so at some level the showing will be general by necessity.  But the sorts of general things here do not seem to be directly at issue or have a critical importance to the instant case, or at least if they are, Volkswagen has not adequately explained how.  (Wu v. O’Gara Coach Co., LLC (2019) 38 Cal.App.5th 1069.)  But all of that said, the case is at least close to the cusp as to this element, and the court’s view is neither firm nor final as to this.  Greco was not a junior attorney who attended a seminar or two.  He did have access to a number of privileged meetings where general strategy and tactics were discussed.  There is no showing that those specific strategies and tactics are at issue in the instant case or that they rose to the level of policies, but it hardly takes a gigantic leap of imagination to see that there could well be some overlap.

But Greco is not really the issue.  Lemon Pros, wisely, has not put Greco on the case.  As a result, the issue is not whether he personally ought to be disqualified.  If it were him personally, the court would hesitate long and hard before saying “no.”  The issue is whether the entire firm must be disqualified.  If the first showing is made, then the firm can escape disqualification by showing that it has taken timely and appropriate action to screen the compromised attorney from the case.  The doctrine is one of imputation: does Greco’s knowledge and potential conflict get imputed to the entire firm.  There is reason to believe that attorneys talk to one another, and that even attorneys not assigned to a particular case might have conversations about it.  And that is often what former clients fear.  They might well believe that their former lawyer will not be counsel of record, for if that is the case, the client will surely know it.  It is what the former client does not know that scares the client.  The client does not know, and likely will never know for sure, what informal communications take place or what information is given to those who work on the case.  Law firms can often be quite collaborative where attorneys help one another even with cases for which they bill no time.  Indeed, absent the instant context, that is generally a good thing for both the firm and the client.  That kind of information passing is precisely the sort of ill of which the SpeeDee Court worried.  But that said, vicarious, or imputed, disqualification is not automatic.  (California Self-Insurer’s Security Fund v. Superior Court (2018) 19 Cal.App.5th 1065.)  Instead, the court must analyze a number of factors to see whether there has been an actual violation of the duty of confidentiality or the appearance of one such that to protect the profession’s integrity vicarious imputation is required.  The general way to avoid imputation is to do two things: (1) impose a timely screening protocol; and (2) establish preventive measures to be sure that there is no violation.  The burden is on the firm being challenged to establish these points.  This process is often referred to as building an ethical wall.  Generally, that will have a number of features, including physical separation of attorneys; express prohibitions against, and sanctions for, discussing the confidential matters in violation of the protocol; established rules and procedures preventing access to the confidential information and files; procedures to prevent the disqualified attorney from sharing in the profits from the representation; and continuing education in professional responsibility.  (Kirk v. First American Title Ins. Co. (2010) 183 Cal.App.4th 776.)  The foregoing features not only establish the formal separation of the potentially conflicted attorney with the rest of the firm, but they also establishe the necessary preventive measure to enforce that separation. 

This is in part where Volkswagen’s failure to put in the letter has some bite.  The letter from Lemon Pros to Volkswagen is where Lemon Pros sets forth its ethical wall and the components thereof.  True, Volkswagen does not have the burden of proving that the ethical wall is not effective, but given that it knew what the wall was, it is surprising that it did not put the letter into evidence.  Here, the ethical wall seems adequate.  The letter states that before Greco began working at the firm or had access to any files, a partner was instructed to restrict his (and his paralegal’s) access to any files involving Volkswagen, including the blocking of access even to settled or closed cases.  As such, Greco was unable even to view any such files.  He and his paralegal were screened from Volkswagen cases and this rule was put into effect before Greco started work at the firm.  An email was also sent to all staff informing them of the rules and barring them from discussing Volkswagen cases with Greco.  Further, Greco has a private office and so he cannot hear any conversations.  The Saeedian declaration confirms that any such conversations are carried out far enough away from Greco’s office that he cannot hear them.  And further, Greco is not allowed to share in any compensation resulting from any Volkswagen case.  The court cannot think of a weakness in this screen, other than the fact that those at Lemon Pros are humans and humans are imperfect.  But that is not enough.  And Volkswagen does not specify any shortcomings either.  What Volkswagen does do is question the letter’s timing.  Greco was hired on October 14.  Suit was filed on November 12, 2024.  Service was accomplished on Volkswagen on November 26, 2024.  The letter was sent on December 4, 2024.  Volkswagen complains that the letter was too long in coming.  The court cannot agree.  First, while the letter’s date is not irrelevant, far more relevant to the court is when the ethical wall was erected, and the answer is that it was erected before Greco started work at the new firm.  And while one might have wished the letter had been sent earlier, service was made the Tuesday before Thanksgiving and the letter was sent the following Monday.  The court cannot really say that a two business day delay is so slow as to disqualify the firm.  The court notes in passing that Volkswagen has brought a number of these motions, and it appears all of them have been unsuccessful.  The court would not even mention that fact, but Volkswagen is the party who brought it up, noting that it had filed many disqualification motions along these lines, but not noting that none had succeeded.

In short, the motion is DENIED.  The court is not confident that there has been an adequate showing of a substantial relationship between Greco’s prior work and the instant case, although the court admits that the question is close.  However, even if there had been such a showing, Lemon Bros’ ethical wall is sufficient to overcome disqualifying the firm.  The court emphasizes that it would be a mistake to assume that the result would have been the same had Greco actually worked on any Volkswagen matters.