Burch v. Hon. myers/hon. bassett/lund

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

BURCH & CRACCHIOLO, P.A.; MICHELLE A. LUND; KRISTEN LUND

OLSON; KAREN PAGE, Petitioners,

v.

THE HONORABLE ROBERT D. MYERS and THE HONORABLE

EDWARD BASSETT, Judges of the SUPERIOR COURT OF THE STATE

OF ARIZONA, in and for the County of MARICOPA, Respondent Judges,

BRADFORD D. LUND, Real Party in Interest.

No. 1 CA-SA 15-0013

FILED 6-4-2015

Petition for Special Action from the Superior Court in Maricopa County

No. PB2009-002244

The Honorable Robert D. Myers, Judge Retired

The Honorable Edward W. Bassett, Judge

JURISDICTION ACCEPTED; RELIEF DENIED

COUNSEL

Osborn Maledon PA, Phoenix

By Mark I. Harrison, Chelsea Sage Durkin, Nathan Arrowsmith

Counsel for Petitioners

Shumway Law Offices PLC, Scottsdale

By Jeff A. Shumway

Counsel for Real Party in Interest

BURCH v. HON. MYERS/HON. BASSETT/LUND

Opinion of the Court

OPINION

Judge Kenton D. Jones delivered the opinion of the Court, in which

Presiding Judge John C. Gemmill and Judge Samuel A. Thumma joined.

J O N E S, Judge:

¶1 Burch and Cracchiolo (B&C), along with its clients, Michelle

Lund, Kristen Lund Olson, and Karen Page (collectively, Petitioners), bring

this special action challenging the trial court’s order disqualifying B&C

from continuing to represent Petitioners in the underlying action seeking

the appointment of a guardian and conservator for the real party in interest,

Bradford Lund. We are asked to address a question left unresolved by our

supreme court in Lund v. Myers, 232 Ariz. 309, 313, ¶ 20 (2013): whether a

party moving to disqualify opposing counsel, premised upon opposing

counsel’s knowing use of documents containing privileged information

inadvertently disclosed to him, waives the attorney-client privilege with

respect to those documents. Holding the moving party does not, we accept

jurisdiction but deny relief.

FACTS AND PROCEDURAL HISTORY

¶2 The ongoing litigation between these parties includes a

baker’s dozen of special actions, one direct appeal, and two petitions for

review. The relevant facts, however, are largely uncontested.

¶3 In February 2006, Bradford filed a petition to create a

guardianship for himself. In April 2006, the law firm of Jennings, Strouss

& Salmon (JS&S) appeared on behalf of Bradford and withdrew the

petition.

¶4 In October 2009, Petitioners, through B&C, filed the

underlying action seeking the appointment of a guardian, conservator,

guardian ad litem, and next friend for Bradford. Bradford, along with his

father and stepmother, opposed the petition.

¶5 On September 19, 2011, B&C, through attorney Bryan

Murphy, served JS&S with a subpoena duces tecum, seeking the production

of all non-privileged information relating to, among other things,

Bradford’s 2006 guardianship petition. In response to the subpoena, and

premised upon the erroneous assumption of JS&S that Murphy was taking

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over as Bradford’s counsel,1 JS&S delivered a copy of its entire client file to

Murphy the next day without first conducting a privilege review of its

contents. Upon receipt of the client file, Murphy briefly scanned the

materials, made a copy of a diagram related to a proposed trust, and turned

the file over to his paralegal.

¶6 On October 3, 2011, Jeff Shumway, Bradford’s then-current

counsel, learned of JS&S’s disclosure. He immediately emailed Murphy to

say the client file contained at least two, but possibly more, privileged

documents and to request their return. Shumway further advised he would

review the remainder of the client file to determine if it contained other

privileged materials. Murphy quickly responded that he had not “studied

the materials with an eye toward privilege issues” and would await word

from Shumway regarding any other privileged documents. Shumway

ended the email exchange by telling Murphy he believed the documents he

had identified were privileged, and would follow up with Murphy about

“any other documents once [he saw] the file.”

¶7 Nearly three weeks later, having heard nothing further from

Shumway, Murphy distributed the entire client file, including the

documents Shumway had identified as privileged, to all parties to the

action as part of a supplemental disclosure statement.2 See Ariz. R. Civ. P.

26.1(a)-(b). Murphy also used the trust diagram he had copied in support

of two separate discovery motions.

¶8 On November 14, 2011, Bradford moved to disqualify B&C

from representing Petitioners, claiming B&C had gained an unfair and

improper advantage in the litigation by reviewing and using the privileged

materials contained in the client file. Bradford also filed a motion seeking

to prevent B&C from submitting the inadvertently disclosed documents to

the trial court for an in camera review pursuant to Arizona Rule of Civil

Procedure 26.1(f)(2).

1 The trial court found this mistake resulted from excusable oversight.

2 The Discovery Special Master, discussed infra ¶ 11, specifically noted

“the ‘other parties’ in the 2009 case were basically aligned with Bradford

against the Petitioners who[m B&C] represents.” Therefore, there is no

apparent concern as to any other parties’ receipt of the privileged

documents.

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¶9 In preparation for his defense against Bradford’s motion to

disqualify, and in apparent disregard of the asserted privilege claim,

Murphy reviewed, in detail, the entire client file, making handwritten notes

and preparing an index. Meanwhile, the trial court ordered JS&S to create

and file a privilege log, briefly describing each document in the client file

believed to be privileged and the basis for each privilege claim. JS&S

ultimately identified nearly fifty documents, representing more than 100

pages of the approximately 250 pages disclosed, which were subject to a

claim of attorney-client privilege or work-product protection.3 The court

also ordered JS&S to file the specified documents with the court to facilitate

resolution of the privilege claims.

¶10 In Lund v. Myers, our supreme court held that a party

erroneously receiving documents for which a later privilege claim is made

may present the information to the court under seal to resolve the privilege

dispute. 232 Ariz. at 311-12, ¶ 13 (citing Ariz. R. Civ. P. 26.1(f)(2)). Once

filed, the court should then “determine[], as to each document, [whether] in

camera review is necessary to resolve the privilege claim. Such review may

be required if the receiving party makes a factual showing to support a

reasonable, good faith belief that the document is not privileged.” Id. at 312,

¶ 15 (citing United States v. Zolin, 491 U.S. 554, 572 (1989), and Kline v. Kline,

221 Ariz. 564, 573, ¶ 35 (App. 2009)). Therefore, on remand, the trial court

was to allow B&C to respond to the privilege log and “consider[] the

parties’ arguments regarding privilege and waiver to determine whether in

camera review was warranted for particular documents.” Id. at 312, 313,

¶¶ 18, 21. The supreme court declined to comment upon “whether, by

seeking disqualification, Bradford waived the attorney-client privilege.” Id.

at 313, ¶ 20. In the interim, and before the supreme court’s decision, B&C

returned the physical client file to JS&S, along with a compact disc

containing an electronic copy that was apparently prepared by or at the

direction of B&C.

¶11 In August 2013, JS&S filed an updated privilege log with the

trial court, and the court appointed a Special Master to determine whether

in camera review of the documents was necessary, and, if so, whether the

documents contained privileged information. See generally Ariz. R. Civ. P.

53(a)(1). The Special Master first determined Bradford’s motion to

disqualify acted as a limited waiver of privilege as to the client file that

3 Although some of the documents were protected only by the work-

product doctrine, the sole question presented in this special action is

whether the motion to disqualify waives Bradford’s ability to assert

attorney-client privilege over the documents.

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allowed the court (and its agent, the Special Master), to view the documents

and determine the merits of the motion, but concluded the motion did not

waive Bradford’s privilege as to B&C. Then, after considering the parties’

positions, the Special Master identified certain documents that did not

require in camera review because B&C had not made a proper showing “to

support a reasonable, good faith belief that [certain] document[s were] not

privileged,” id. at 312, ¶ 15, effectively sustaining the claim of privilege for

a significant number of the documents without resorting to in camera

review. Over the parties’ objections, see Ariz. R. Civ. P. 53(h), the court

adopted and affirmed the Special Master’s findings and reports.

¶12 In June 2014, the trial court transferred the motion to

disqualify to Judge Edward Bassett for ruling.4 The Special Master

conducted an initial in camera review of the documents that remained in

dispute, and in July 2014, issued his report setting forth findings of privilege

as to each document. Then, following oral argument, review of the Special

Master’s reports, and an independent review of the documents submitted

in camera, Judge Bassett found B&C had violated Arizona Rule of Civil

Procedure 26.1(f), and that its receipt and review of the documents had

prejudiced Bradford by providing it with a tactical advantage in the

litigation. Specifically, while acknowledging some of the privileged

documents did not confer any advantage to B&C, Judge Bassett concluded

the client file included notes of conversations between Bradford and his

former counsel that “contain[ed] assessments of strengths as well as

weaknesses in his litigation position,” and provided an “obvious and

significant” advantage to B&C. Judge Bassett explicitly rejected Petitioners’

argument that they were unable to defend against the prejudice claim

without further access to the documents, concluding instead that “[t]he

determination of prejudice can and should be made by the Court through

its own in camera review of the privileged documents.” Noting neither

party had identified any other adequate remedy, Judge Bassett granted

Bradford’s motion to disqualify B&C from further representation of

Petitioners in this matter. This special action followed.

4 Our supreme court stated a trial judge, at each stage, “should

consider whether another judicial officer should conduct the review [or rule

on the motion to disqualify] in light of the possibility that a review of

privileged materials may be so prejudicial as to require the judge’s recusal.”

Lund, 232 Ariz. at 312, ¶ 19.

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Opinion of the Court

JURISDICTION

¶13 An appellate court’s decision to exercise special action

jurisdiction is highly discretionary. State Comp. Fund of Ariz. v. Fink, 224

Ariz. 611, 612, ¶ 4 (App. 2010) (citing Snyder v. Donato, 211 Ariz. 117, 119,

¶ 6 (App. 2005)). Here, we accept special action jurisdiction because

Petitioners have no equally plain, speedy, and adequate remedy by appeal.

See Sec. Gen. Life Ins. Co. v. Superior Court, 149 Ariz. 332, 333-34 (1986) (noting

a disqualification order is not a final, appealable order and may therefore

be appropriate for special action review).

DISCUSSION

¶14 The question before us is whether Bradford impliedly waived

his attorney-client privilege to the inadvertently disclosed client file by

bringing the motion to disqualify and using the client file documents to

support the motion. We review the trial court’s ruling upon a motion to

disqualify counsel for an abuse of discretion. Simms v. Rayes, 234 Ariz. 47,

49, ¶ 8 (App. 2014) (citing Smart Indus. Corp., Mfg. v. Bradshaw, 179 Ariz. 141,

145 (App. 1994)). But “whether a party has impliedly waived the attorney-

client privilege poses a mixed question of law and fact, which we review de

novo.” Empire W. Title Agency, L.L.C. v. Talamante ex rel. Cnty. of Maricopa,

234 Ariz. 497, 498-99, ¶ 8 (2014) (citing Twin City Fire Ins. Co. v. Burke, 204

Ariz. 251, 254, ¶ 10 (2003)).

I. Background Principles

¶15 Under Arizona Rule of Civil Procedure 26.1(f)(2), if a lawyer

or party believes privileged information has been inadvertently disclosed,

it “may notify any party that received the information of the claim [of

privilege] and the basis for it.” Once notified, a receiving party “must

promptly return, sequester, or destroy the specified information and any

copies it has made and may not use or disclose the information until the

claim is resolved.” Ariz. R. Civ. P. 26.1(f)(2). If there is a dispute between

the parties over the privilege claim, the “receiving party may promptly

present the information to the court under seal for a determination of the

claim.” Id.; Myers, 232 Ariz. at 311-12, ¶ 14.

¶16 Arizona’s ethical rules provide further guidance, directing an

attorney who receives a document he “knows or reasonably should know”

was inadvertently sent to “promptly notify the sender and preserve the

status quo for a reasonable period of time in order to permit the sender to

take protective measures.” Ariz. R. Sup. Ct. ER 4.4. At that point, the

recipient lawyer must “down tools,” which is to say he must “stop reading

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the document, . . . make no use of the document, and . . . promptly notify

the sender.” Id. cmt. 2; see also Ariz. R. Civ. P. 26.1(f)(2).

II. The Motion to Disqualify Did Not Act as an Implied Waiver of the

Attorney-Client Privilege.

¶17 The attorney-client privilege safeguards the “communication

between the attorney and client made in the course of the attorney’s

professional employment.” State v. Sucharew, 205 Ariz. 16, 21, ¶ 10 (App.

2003) (citing State v. Holsinger, 124 Ariz. 18, 22 (1979)). The privilege belongs

to the client and may not be breached without the client’s consent. Id.

(citing Holsinger, 124 Ariz. at 22); Ariz. Rev. Stat. § 12-2234(A) (2015).

Although a client’s waiver of privilege is usually explicit, State v. Cuffle, 171

Ariz. 49, 51 (1992), it may also be waived impliedly. Accomazzo v. Kemp ex

rel. Cnty. of Maricopa, 234 Ariz. 169, 172, ¶ 8 (App. 2014) (citing Elia v. Pifer,

194 Ariz. 74, 82, ¶ 40 (App. 1998)).

¶18 In State Farm Mutual Automobile Insurance Co. v. Lee, our

supreme court adopted the Hearn test for examining claims of implied

waiver of privilege:

(1) [whether the] assertion of the privilege was a result of

some affirmative act, such as filing suit, by the asserting party;

(2) [whether] through this affirmative act, the asserting party

put the protected information at issue by making it relevant

to the case; and (3) [whether] application of the privilege

would have denied the opposing party access to information

vital to his defense.

199 Ariz. 52, 56, ¶ 10 (2000) (quoting Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D.

Wash. 1975)); see also Talamante, 234 Ariz. at 499, ¶ 9 (acknowledging

adoption of Hearn test).

¶19 Essentially, Petitioners argue Bradford’s motion to disqualify

placed the documents “at issue,” and that it would be unfair to allow

Bradford to withhold documents they believe contain information vital to

their defense of that motion. Stated otherwise, Petitioners argue Bradford

may not rightfully use the privilege as both a sword in bringing the motion

and a shield in protecting the documents from Petitioner’s review. See

Ulibarri v. Superior Court, 184 Ariz. 382, 385 (App. 1995) (“The [attorney-

client] privilege may not be used as both a sword and a shield.”) (citing

Buffa v. Scott, 147 Ariz. 140, 143 (App. 1985)); see also State v. Wilson, 200 Ariz.

390, 396, ¶ 16 (App. 2001) (noting a party may not “assert[] a particular

factual position and then invok[e a] privilege” that allows him “not only to

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‘buttress such a position’ but also to prevent the opposing party from

impeaching or otherwise challenging” the factual position asserted)

(citations omitted). Although Petitioners’ basic premise is sound, it has no

application to the immediate facts.

¶20 Implied waiver can occur where a party advances a claim or

affirmative defense premised upon otherwise privileged information, such

as the reasonableness of its evaluation of the law, which directly relates to

the heart of the litigation. See State Farm, 199 Ariz. at 62, ¶ 28 (finding

insurance company impliedly waived attorney-client privilege by asserting

as a defense to bad faith litigation that it acted in good faith based upon its

interpretation of the law, where its knowledge of the law was gained, at

least in part, through communications with counsel); Cuffle, 171 Ariz. at 51-

52 (determining defendant implicitly waived attorney-client privilege by

moving to set aside a plea agreement on the basis that his attorney failed to

fully explain the nature of the offenses such that he could make a knowing

or informed decision about accepting the plea); Elia, 194 Ariz. at 81-82,

¶¶ 35-40 (finding implied waiver of attorney-client privilege regarding

communications with a subsequently retained attorney in a malpractice

action against a previous attorney where those communications were

relevant to a determination of the original attorney’s misconduct); Hearn,

68 F.R.D. at 581 (finding defendants impliedly waived attorney-client

privilege by asserting a good faith immunity defense to civil rights

violations).

¶21 As opposed to a party’s efforts to advance a substantive claim

premised upon privileged documents, a motion to disqualify neither

establishes a cause of action nor defeats a claim of liability; it is not a claim

or affirmative defense and does not have any apparent direct impact upon

the merits of the underlying litigation. Reliance upon privileged

information in support of a motion to disqualify does not place that

information “at issue relevant to the case,” as the phrase is contemplated

under Arizona law, and does not impliedly waive privilege as to the

opposing party. Petitioners cite no authority to the contrary, and we have

found none which suggests the mere filing of a motion to disqualify,

premised upon the improper review and use of inadvertently disclosed

information, constitutes an implied waiver of the attorney-client privilege.

¶22 Although Petitioners rely upon In re Marriage of Perry, 293

P.3d 170 (Mont. 2013), and O Builders & Assocs., Inc. v. Yuna Corp. of N.J., 19

A.3d 966 (N.J. 2011), to support their position that the motion for

disqualification puts the documents “at issue,” these cases are unhelpful.

In Perry, a wife moved to disqualify her husband’s attorney in a dissolution

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proceeding, asserting an appearance of impropriety and conflict of interest

arising from a divorce consultation between the attorney and wife two

years earlier. 293 P.3d at 172-73, ¶¶ 8-11. The trial court overruled the

wife’s objections to the submission by the attorney of purported attorney-

client communications in consideration of the motion, and ordered the

attorney to file, under seal, all the relevant materials generated through

communications with the wife. Id. at 173-74, ¶¶ 13-14. After reviewing the

materials, the court denied the motion, finding no attorney-client

relationship existed between the wife and attorney. Id. at 174, ¶ 14. The

Montana Supreme Court, applying the Hearn test, found no error in the trial

court’s reliance upon the documents because “[the attorney]’s defense

against [the wife]’s claim required examination of the protected

communications,” and the wife’s motion placed the communications “at

issue,” thereby waiving any attorney-client privilege. Id. at 179, ¶ 39 (citing

Dion v. Nationwide Mut. Ins. Co., 185 F.R.D. 288, 294-95 (D. Mont. 1998)).

¶23 Perry is unpersuasive for three reasons. First, the discussion

relied on is dicta, as the court had already determined the wife failed to

establish an attorney-client relationship that would give rise to a claim of

privilege. Id. at 177, ¶ 27. Second, the issue in Perry was whether the wife’s

claim of privilege prevented the court from considering the documents, id.

at 179, ¶ 36 — not whether she had waived privilege with respect to the

opposing party, who in that case had created the documents at issue. Finally,

Perry addressed a motion to disqualify based upon a purported conflict of

interest, not upon the improper use of inadvertently disclosed documents

by B&C.

¶24 O Builders also involved a motion to disqualify premised

upon an alleged conflict of interest arising from a party’s preliminary

consultation with an attorney now representing the opposing party. 19

A.3d at 968. The trial court denied the motion, finding the moving party

failed to carry her burden of proving she had provided confidential

information to the attorney or that an attorney-client relationship was

created. Id. at 971. The failure came about, at least in part, as a result of the

moving party’s refusal to articulate the confidential information she

believed the opposing attorney obtained during the consultation for fear of

disclosing the information to the opposing attorney a second time. Id. at

977-78. The New Jersey Supreme Court acknowledged the “theoretical

quandary” facing the party seeking disqualification: “in order to sustain

[her] burden seeking disqualification, [the moving party] must disclose the

very confidential information she claims not only deserves protection, but

also triggers counsel’s disqualification.” Id. at 978. It nevertheless held the

moving party could not “refuse to make those disclosures to the court for

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fear of disclosing confidential information” to the opposing side where its

disclosure was necessary to allow the court to “grapple fairly with the

issues.” Id. (emphasis added).

¶25 Even where disclosure was necessary to prove

disqualification appropriate, however, the moving party was not deemed

to have waived her privilege to the information as to the opposing party;

rather, the court specifically identified means to protect the confidentiality

of the information, including an in camera review. Id. at 978 (citations

omitted). Thus, the court in O Builders ultimately approved the very

procedure employed by the trial court here.5

¶26 Moving to disqualify based upon the improper use of

privileged materials provided to opposing counsel through an inadvertent

disclosure does not place the privileged information “at issue relevant to

the case,” and therefore does not implicate an implied waiver of privilege

as to the opposing party. However, the party seeking disqualification bears

the burden of demonstrating why the disqualification is warranted, Simms,

234 Ariz. at 50, ¶ 8 (citing Alexander v. D’Angelo, 141 Ariz. 157, 161 (1984)),

which requires a limited waiver of privileged communications to the court

so it may decide the issue of prejudice. See Part III infra.

5 Other jurisdictions have approved similar approaches in ruling

upon motions to disqualify. See Barragree v. Tri-County Elec. Coop., Inc., 950

P.2d 1351, 1361-62, 1365 (Kan. 1997) (holding party seeking disqualification

waives attorney-client privilege as to the court so the court may assess the

contents of allegedly confidential information, and the party may present

the information either in “a hearing out of the presence of the party against

whom confidentiality is to be protected or in camera inspection”); Keith v.

Keith, 140 So.3d 1202, 1211-12 (La. Ct. App. 2014) (noting procedures for

determining a motion to disqualify should “not penalize the plaintiff for

asserting his right to the attorney-client privilege,” and directing the trial

court to use certain methods to protect privileged information including in

camera inspection, while being cognizant of the opposing side’s inability to

challenge certain evidence); Faughn v. Perez, 51 Cal. Rptr. 3d 692, 699 (Ct.

App. 2006) (noting the “present[ation of] direct evidence of facts to support

a motion to disqualify related to confidential information is constrained, of

course, by the need to avoid the disclosure of the former client’s confidences

and secrets,” and identifying, as one method for protecting confidences, the

ability “to file the documents with the court under seal for in camera

review”).

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III. Proper Approach for Determining Whether Disqualification is

Warranted When Based Upon the Improper Use of Inadvertent

Disclosure

¶27 Having determined the attorney-client privilege was not

impliedly waived, we next consider whether the trial court made improper

assumptions regarding the prejudicial nature of the disclosure in the

absence of an opportunity for B&C to “educate the trial court about the

issue of prejudice.” Because we adopt an objective test of prejudice, we find

no error in the court’s consideration of the inadvertently disclosed materials

without the benefit of Petitioners’ argument.

¶28 Generally, when ruling on a motion to disqualify opposing

counsel, the trial court is directed to consider four factors:

(1) whether the motion is being made for the purposes of

harassing the [opposing party], (2) whether the party bringing

the motion will be damaged in some way if the motion is not

granted, (3) whether there are any alternative solutions, or is

the proposed solution the least damaging possible under the

circumstances, and (4) whether the possibility of public

suspicion will outweigh any benefits that might accrue due to

continued representation.

Alexander, 141 Ariz. at 165. This test has been applied to disqualification

motions arising from an appearance of impropriety or conflict of interest.

See id. at 160; see also Gomez v. Superior Court, 149 Ariz. 223, 226 (1986); Sellers

v. Superior Court, 154 Ariz. 281, 286-90 (App. 1987). But no Arizona case has

applied Alexander in the context of disqualification based upon an opposing

party’s review of privileged materials inadvertently disclosed. In light of

the lack of direct authority, Judge Bassett turned to Florida cases addressing

similar disqualification claims — those arising from violation of an ethical

rule analogous to ER 4.4(b) — for guidance.

¶29 The Florida courts have crafted an objective two-part test for

determining whether disqualification is warranted following inadvertent

disclosure, considering (1) whether the inadvertently disclosed information

was privileged, and (2) whether the receiving party possibly gained an

“unfair” informational advantage as a result of the inadvertent disclosure.

Moriber v. Dreiling, 95 So.3d 449, 454 (Fla. Dist. Ct. App. 2012). Where both

prongs are met, counsel should be disqualified. Id.; see also Abamar Hous. &

Dev., Inc. v. Lisa Daly Lady Décor, Inc., 724 So.2d 572, 574 (Fla. Dist. Ct. App.

1998) (affirming disqualification after considering “the effects of the

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inadvertent disclosure, the [opposing party’s] recalcitrance in rectifying the

disclosure, and the unfair tactical advantage gained from such disclosure”).

The court thereby considered the contents of the inadvertent disclosure,

coupled with the actions of the receiving attorney, in determining “whether

any informational advantage was obtained ‘unfairly.’” Moriber, 95 So.3d at

454.

¶30 We believe this approach appropriately addresses the

competing Alexander factors in the context of inadvertent disclosure and

strikes a proper balance between the parties’ interests. First, instead of

focusing upon actual prejudice, which is difficult to quantify, the test

requires the trial court to consider whether prejudice may occur. Id.

Limiting the discussion in such a manner both avoids the practical difficulty

in determining “how and to what extent” the receiving party “reviewed,

copied, or disseminated the inadvertent disclosure,” id., and accounts for

the public perception considerations articulated in the fourth Alexander

factor. We are persuaded by the Florida court that disqualification should

be granted sparingly, but:

Like so many other ethical considerations in the practice of

law, perceptions are of the utmost importance. Thus, how

much of an advantage, if any, one party may gain over

another we cannot measure. However, the possibility that

such an advantage did accrue warrants resort to this drastic

remedy for the sake of the appearance of justice, if not justice

itself, and the public’s interest in the integrity of the judicial

process.

General Accident Ins. Co. v. Borg-Warner Acceptance Corp., 483 So.2d 505, 506

(Fla. Dist. Ct. 1986). We are also mindful that this approach provides relief

to a client, whose rights may have been breached through no fault of his

own, without requiring that he waive the very privilege sought to be

protected.

¶31 Further, this approach emphasizes the ethical obligation of

the receiving attorney to “down tools” when made aware, either by the

disclosing party as occurred here, or by review of the documents, that

privileged materials have been inadvertently disclosed. In proceeding in

this fashion, we simply reiterate the expectation that, when an attorney

knows or has reason to know he has received privileged materials

inadvertently, he apply the procedures articulated in ER 4.4(b) and Rule

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26.1(f)(2).6 If he does so, he cannot be disqualified for the mere receipt of

inadvertently disclosed documents. Abamar, 724 So.2d at 574 n.2 (noting an

attorney who follows his ethical obligation to notify the party and return

inadvertently produced documents without taking any further action “will

not be subject to disqualification”); Moriber, 95 So.3d at 454; see also State

Comp. Ins. Fund v. WPS, Inc., 82 Cal. Rptr. 2d 799, 808 (Ct. App. 1999) (“Mere

exposure to the confidences of an adversary does not, standing alone,

warrant disqualification. Protecting the integrity of judicial proceedings

does not require so draconian a rule. Such a rule would nullify a party’s

right to representation by chosen counsel any time inadvertence or devious

design put an adversary’s confidences in an attorney’s mailbox.”) (internal

quotation omitted).

¶32 In adopting the Florida approach, we reject Petitioners’

argument that the party moving to disqualify must demonstrate specific

prejudice, rather than “the mere possibility of an unfair advantage.” The

cases cited by Petitioner do not support their argument, and merely confirm

that the moving party has the burden to show disqualification is warranted,

and cannot meet that burden through unfounded allegations of harm or a

remote appearance of impropriety alone. See Gomez, 149 Ariz. at 225 (“It

does not necessarily follow that [the appearance of impropriety] must

disqualify [an attorney] in every case. Where the conflict is so remote that

there is insufficient appearance of wrongdoing, disqualification is not

required.”) (citing United States v. Washington, 782 F.2d 807, 812-13 (9th Cir.

1986)); Alexander, 141 Ariz. at 165 (vacating disqualification order where

moving party failed to show it would be damaged by continued

representation); Amparano, 208 Ariz. at 377, ¶¶ 26, 29 (affirming denial of

motion to disqualify where no evidence demonstrated a conflict of interest

and the appearance of impropriety was too remote in nature to illustrate

sufficient wrongdoing). The approach we adopt is not in conflict with this

basic premise. The movant still must demonstrate sufficient reason to

disqualify opposing counsel, Amparano, 208 Ariz. at 377, ¶ 24 (citing

Alexander, 141 Ariz. at 161), and may not do so solely upon conclusory or

6 Although the Preamble to Arizona’s ethical rules cautions that a

“violation of a[n Ethical] Rule does not necessarily warrant any other

nondisciplinary remedy, such as disqualification of a lawyer in pending

litigation[, t]he Rules are designed to provide guidance to lawyers.” Ariz.

R. Sup. Ct. 42, pmbl. ¶ 20. And Arizona courts look “to the ethical rules for

guidance on disqualification issues.” Amparano v. ASARCO, Inc., 208 Ariz.

370, 376, ¶ 22 (App. 2004) (citing Towne Dev. of Chandler, Inc. v. Superior

Court, 173 Ariz. 364, 368-69 (App. 1992)).

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Opinion of the Court

vague allegations of perceived harm, United States v. Stewart, 294 F. Supp.

2d 490, 494 (S.D.N.Y. 2013), as the mere receipt of inadvertently disclosed

documents is an insufficient basis for disqualification.

¶33 Moreover, one of the cases relied upon by Petitioners

acknowledges the moving party may meet his burden by showing only a

possibility of harm occurring in the event the disqualification motion is not

granted. See Gabianelli v. Azar, 777 P.2d 1167, 1169 (Alaska 1989) (vacating

order disqualifying counsel where the moving party failed to “demonstrate

[] at least a reasonable possibility that [counsel] acquired privileged

information . . . which could be used to [the moving party’s] disadvantage”)

(emphasis added). And Arizona courts have long recognized that the

possibility of future harm may warrant disqualification. See Bicas v. Superior

Court, 116 Ariz. 69, 74 (App. 1977) (“Where it can reasonably be said that in

the course of former representation an attorney might have acquired

information related to the subject matter of his subsequent representation,

the attorney should be disqualified.”).

¶34 To summarize, when faced with a motion to disqualify

premised upon the abuse of privileged information disclosed

inadvertently, the trial court must: (1) determine whether the documents at

issue are in fact privileged; (2) determine whether the receiving party

exercised an unfair advantage over the documents, such as reviewing,

copying, or distributing them in violation of Rule 26.1(f)(2) and ER 4.4(b);

and (3) review the privileged information objectively, in light of the context

of the case, to determine whether the receiving party possibly gained an

unfair tactical advantage over the moving party. In reviewing the

information, the court may consider certain mitigating factors, such as

whether the privileged information might have already been known by the

receiving party, see United States v. Chong, 58 F. Supp. 2d 1153, 1160 (D. Haw.

1999) (declining to order disqualification based upon inadvertent

disclosure of privileged information where the receiving party was already

in possession of the information prior to its disclosure), or whether the

information may be insignificant to the issues before the court, United States

v. Skeddle, 989 F. Supp. 890, 899 (N.D. Ohio 1997) (finding disqualification

unwarranted where review of allegedly privileged documents did not

provide the receiving party with insight into “the strategies, theories, and

tactics of the lawyers representing the [party claiming privilege]”). And

because disqualification motions are disfavored, State v. Serna, 163 Ariz.

260, 268 (1990) (citations omitted), the trial court should always consider

alternative solutions that will adequately address the purported harm,

Alexander, 141 Ariz. at 165.

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¶35 Turning to the immediate case, the parties do not dispute the

trial court’s findings that multiple documents in the client file were

privileged and that Murphy’s actions violated Rule 26.1(f)(2). Judge Bassett

reviewed the privileged documents in camera, and determined the

advantage gained by Murphy in reviewing the client file was “obvious and

significant.” He noted that no other alternative, such as suppression of the

inadvertently disclosed documents, would provide an adequate remedy,

and disqualified B&C from representation of Petitioners. In reviewing the

record, we cannot conclude Judge Bassett abused his discretion in reaching

this ruling.

IV. No Due Process Violation Occurred Here.

¶36 Finally, Petitioners argue their due process rights were

violated by not being granted further access to the privileged documents to

defend against the motion to disqualify. Even assuming, without deciding,

that a motion to disqualify counsel in a civil case implicates due process

considerations, Petitioners received adequate due process.

¶37 Procedural due process requires a party receive notice and an

opportunity to be heard in a meaningful manner at a meaningful time.

Emmett McLoughlin Realty, Inc. v. Pima Cnty., 212 Ariz. 351, 355, ¶ 17 (App.

2006). Before the trial court’s ruling, Petitioners submitted written briefs

and participated in oral argument. Although they did not have access to

the privileged documents at the time of oral argument, Murphy had

admittedly reviewed the entirety of the client file and had taken detailed

notes. The record does not disclose whether those notes, developed for the

express purpose of defending against the motion to disqualify, were

destroyed or otherwise unavailable to the Petitioners during these

proceedings. Thus, on this record, Petitioners’ due process rights were not

violated.

CONCLUSION

¶38 Bradford did not waive the attorney-client privilege by

seeking disqualification of Petitioners’ counsel based upon B&C’s use of

inadvertently disclosed privileged materials. Thereafter, Judge Bassett

correctly reviewed the documents in camera, considered the propriety of

B&C’s decision to undertake a detailed review of the documents after

learning of Bradford’s claim of privilege, and determined, based upon the

contents of the documents, that B&C had gained a potential unfair tactical

advantage. Accordingly, we accept jurisdiction, affirm the trial court’s

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disqualification order, and vacate the stay of the trial court proceedings

previously entered by this Court.

:ama

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