The opinion
Filed1/7/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
O’GARA COACH COMPANY, B286730
LLC,
(Los Angeles County
Cross-complainant and Super. Ct. No. SC125609)
Appellant,
v.
JOSEPH RA,
Cross-defendant and
Respondent.
APPEAL from an order of the Superior Court of
Los Angeles County, Gerald Rosenberg, Judge. Reversed and
remanded.
Brown, Neri, Smith & Khan, Ethan J. Brown,
Rowennakete P. Barnes and James F. Warren IV for Joseph Ra.
Greines, Martin, Stein & Richland, Marc J. Poster and
Jonathan H. Eisenman for O’Gara Coach Company, LLC.
_______________________
Darren Richie, the former president and chief operating
officer of O’Gara Coach Company, LLC, is a principal of Richie
Litigation, P.C. O’Gara Coach moved to disqualify Richie
Litigation from representing its former senior executive Joseph
Ra in litigation, including cross-actions between O’Gara Coach
and Ra, arising from allegations by Marcelo Caraveo that O’Gara
Coach and Ra had committed fraud in connection with Caraveo’s
acquisition of luxury vehicles from O’Gara Coach. In support of
its motion O’Gara Coach relied on evidence that, while president
of O’Gara Coach, Richie had been a client contact for outside
counsel investigating the charges of fraudulent conduct that
ultimately led to Caraveo’s lawsuit. The trial court denied the
motion. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
1. Caraveo’s Lawsuit, Ra’s Cross-complaint and O’Gara’s
Cross-complaint
In March 2016 Caraveo and two related limited liability
companies filed a complaint, and in June 2016 a first amended
complaint, against O’Gara Coach, Ra and several other entities
asserting causes of action for fraud, conversion and unfair
business practices based on their allegedly wrongful conduct with
respect to Caraveo’s acquisition of luxury vehicles from O’Gara
Coach.
In October 2016 Ra filed a cross-complaint for defamation,
intentional interference with contractual relations and indemnity
against O’Gara Coach, its principal owner and chief executive
officer Thomas O’Gara and various other individuals. Ra claimed
O’Gara Coach was obligated to indemnify him because the
allegations in Caraveo’s complaint arose from his actions as an
employee of the company. As for his tort claims, Ra alleged, in
2
part, that shortly after he was forced to resign from his position
with O’Gara Coach in early 2016, the cross-defendants “all
repeated the same thing: that Ra stole vehicles, stole money
from O’Gara Coach, improperly rented O’Gara Coach’s cars and
stole the revenues from those rentals, and committed other
criminal acts that resulted in both the Federal Bureau of
Investigation and the Los Angeles District Attorney in search of
Ra for prosecution.”
In January 2017 O’Gara Coach filed its own cross-
complaint, and on March 27, 2017 a first amended cross-
complaint, against Caraveo, Ra, Thomas Wu, another former
employee of O’Gara Coach, and others for breach of contract,
fraud and related torts, and as to Ra and Wu for breach of
fiduciary duties arising from employment. O’Gara Coach’s cross-
complaint alleged that Caraveo and Ra were the primary
architects of a multi-pronged fraudulent scheme involving the
sale, leasing and financing of vehicles from unsuspecting
automobile dealerships.
2. Richie’s Role at O’Gara Coach
O’Gara Coach hired Richie in September 2013 as general
manager for its Westlake Village location. He was subsequently
promoted to director of sales operations for the company and then
in November 2014 to president and chief operating officer.
In his declaration in support of O’Gara Coach’s motion to
disqualify Richie Litigation, Thomas O’Gara stated O’Gara Coach
does not employ in-house lawyers and, while serving as
president, Richie was a primary point of contact for the
company’s outside counsel on many legal matters: “Mr. Richie
would regularly engage and direct legal counsel on O’Gara
Coach’s behalf, regarding day-to-day advice on a litany of
3
subjects, the development and implementation of policies and
procedures, and on all aspects of pending litigation, and pre and
post-litigation functions.”
When Richie was initially hired by the company, Thomas
O’Gara knew Richie had graduated from law school and had
experience overseeing legal matters. (Richie graduated from law
school in 2003.) According to O’Gara, it was this “legal education
and professed experience that provided me comfort in assigning
to him decision-making authority during his tenure, including
without limitation engaging outside legal counsel and overseeing
(on a companywide basis) all legal matters affecting the
company.”
Richie’s employment with O’Gara Coach was terminated on
February 2016. In his declaration Thomas O’Gara states O’Gara
Coach and Richie executed a severance agreement in which
Richie agreed not to file claims against O’Gara Coach or to assist
others in bringing claims against the company. That document,
which is described as subject to confidentiality provisions, was
not filed with the trial court, but counsel offered to make it
1
available to the court for in camera inspection.
1
As part of a request for judicial notice in this court, O’Gara
Coach included a copy of the complaint for injunctive and
equitable relief (misappropriation of trade secrets and breach of
contract) it had filed against Richie in Los Angeles Superior
Court on November 13, 2017 (L.A.S.C. no. BC683108). That
pleading quoted portions of the parties’ severance agreement
including Paragraph 9(B): “Obligation Not to Cooperate.
Employee and Employer agree that they will not counsel or assist
any attorneys or clients in the presentation or prosecution of any
disputes and/or differences by any third party against Employee
or Released Parties unless pursuant to a lawfully issued
4
3. Ra’s Retention of Richie Litigation; Richie’s Admission to
the California Bar
When he filed his answer to Caraveo’s first amended
complaint and his own cross-complaint in October 2016, Ra was
represented by Ethan J. Brown of the law firm of Brown Neri
Smith & Khan LLP.
Richie sat for the California bar examination in February
2017. On May 19, 2107 Richie filed articles of incorporation of a
professional corporation for Richie Litigation, P.C. with the
California Secretary of State. A statement of information for
Richie Litigation, P.C. filed on June 26, 2017 with the Secretary
of State identified Robert K. Lu as the sole officer and director, as
well as the agent for service of process of the professional
corporation. Richie was admitted to the State Bar in August
2017. A new statement of information for Richie Litigation, P.C.,
filed on September 13, 2017 with the Secretary of State,
identified Richie as the sole officer, director and agent for service
2
of process for the professional corporation.
subpoena or other order by a court or agency of competent
jurisdiction, or in response to an official inquiry of a
governmental agency.”
2
O’Gara Coach’s May 16, 2018 request for judicial notice,
which includes the three documents filed with the Secretary of
State identified in this paragraph, as well as O’Gara Coach’s
complaint against Richie for misappropriation of trade secrets
and breach of contract, is granted. The court also grants Ra’s
June 15, 2018 request for judicial notice of Richie’s cross-
complaint against O’Gara Coach in LASC no. BC683608 for
wrongful termination, breach of contract and fraud. O’Gara
Coach’s supplemental request for judicial notice, filed
December 11, 2018, is denied as unnecessary.
5
On June 8, 2017, two months before Richie was admitted to
practice in California, Robert Lu of Richie Litigation substituted
for Ethan J. Brown as counsel of record for defendant and cross-
complainant Ra in this lawsuit. Richie Litigation also appeared
as counsel for Jorge Loera and Thomas Wu, two other former
O’Gara Coach employees, in lawsuits they filed against O’Gara
Coach.
4. The Motion To Disqualify Richie Litigation
On October 11, 2017 O’Gara Coach moved to disqualify
Richie Litigation. O’Gara Coach asserted, even though Richie
was not a member of the California bar while serving as
president and chief operating officer of the company, given his
role in coordinating legal matters for O’Gara Coach, including
interfacing with outside counsel, the court should apply the rule
requiring disqualification of attorneys representing adverse
parties in successive representations when, as here, the matters
are substantially related, as well as the rule that, when a former
client’s confidential information is known to any attorney at a
law firm, the entire firm must be disqualified. O’Gara
alternatively argued, even if no attorney-client relationship
existed between Richie and O’Gara Coach, Richie Litigation
should be disqualified because Richie was privy to the company’s
privileged information while employed as one of its most senior
executives. As such, whether or not Richie has a continuing
fiduciary obligation to O’Gara Coach, Richie Litigation is not
entitled to exploit that information in litigation adverse to the
company.
In support of its motion O’Gara Coach submitted the
declaration of Halbert Rasmussen, who was a partner at the
Arent Fox law firm when Richie was president of O’Gara Coach.
6
Rasmussen stated he had regularly communicated with Richie in
the course of his representation of O’Gara Coach “in various legal
matters, as did other attorneys at Arent Fox LLP who were
assisting me with the representation of O’Gara Coach.” In
January 2016 Rasmussen and his firm were retained to conduct
an internal investigation concerning the activities of Joseph Ra
and Thomas Wu. In the course of the investigation, Rasmussen
explained, he sent attorney-client communications and attorney
work product to Richie through email, included Richie in phone
calls and meetings during which attorney-client communications
pertaining to the investigation occurred and sought Richie’s
assistance in discovering the nature of Ra’s and Wu’s activities
and “his view on the propriety of their conduct.” According to
Rasmussen, the internal investigation uncovered facts used as
the basis for O’Gara Coach’s cross-claims in this action and
developed legal issues that “greatly informed O’Gara Coach’s
strategy in defending the claims filed against it, and prosecuting
the cross-claims in the above captioned action.”
O’Gara Coach’s motion papers also included declarations
from Keith D. Kassan, who acted as outside general counsel to
O’Gara Coach, and Usama Kahf of Fisher & Phillips LLP, O’Gara
Coach’s labor and employment counsel. Both men described
interacting with Richie on legal matters, both litigation and
nonlitigation, on an ongoing basis while he was president of
O’Gara Coach.
In his opposition to the motion to disqualify, Ra argued the
case law regarding successive representation was inapplicable
because Richie had never been an attorney while an executive of
O’Gara Coach and no attorney-client relationship existed
between him and the company, either while he was employed by
7
O’Gara Coach or afterward when he became a licensed attorney.
Ra also argued, even if Richie owed a continuing fiduciary duty to
O’Gara Coach, a non-lawyer’s fiduciary obligation to an employer
or former employer is different from a lawyer’s and cannot
provide the basis for disqualifying a law firm with which that
individual becomes affiliated. The opposition papers included a
brief declaration from Richie establishing the basic facts
regarding the timing of his employment at O’Gara Coach and his
subsequent admission to the California State Bar. Richie stated
he had never acted as legal counsel for O’Gara Coach or its
principal Thomas O’Gara, either while employed by the company
or afterward. However, Richie did not deny he had participated
in discussions and received communications protected by the
lawyer-client privilege while an executive at O’Gara Coach. Ra
presented no evidence indicating Richie Litigation had
established any internal screening procedures or “ethical walls”
between Richie and the attorneys at Richie Litigation
representing Ra.
The trial court denied the motion on November 14, 2017
after hearing argument from the parties. Adopting its tentative
ruling as its final order, the court explained that O’Gara Coach
had failed to establish there was an attorney-client relationship
between it and Richie. “The fact that he might have received
confidential information about O’Gara [while he] was employed
there is not enough.” The court also stated, “There is no
authority cited to disqualify a former employee who then becomes
an attorney.”
8
DISCUSSION
1. Standard of Review
A trial court’s decision to grant or deny a motion to
disqualify counsel is generally reviewed for abuse of discretion.
(People v. Suff (2014) 58 Cal.4th 1013, 1038; In re Charlisse C.
(2008) 45 Cal.4th 145, 159 (Charlisse C.); People ex rel. Dept. of
Corporations v. SpeeDee Oil Change Systems, Inc. (1999)
20 Cal.4th 1135, 1143 (SpeeDee Oil).) “As to disputed factual
issues, a reviewing court’s role is simply to determine whether
substantial evidence supports the trial court’s findings of
fact . . . . As to the trial court’s conclusions of law, however,
review is de novo; a disposition that rests on an error of law
constitutes an abuse of discretion.” (Charlisse C., at p. 159; see
Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712.)
While the trial court’s “‘application of the law to the facts is
reversible only if arbitrary and capricious’” (Charlisse C., at
p. 159), “where there are no material disputed factual issues, the
appellate court reviews the trial court’s determination as a
question of law.” (SpeeDee Oil, at p. 1144; accord, California Self-
Insurers’ Security Fund v. Superior Court (2018) 19 Cal.App.5th
1065, 1071; Castaneda v. Superior Court (2015) 237 Cal.App.4th
1434, 1443.)
When deciding a motion to disqualify counsel, “[t]he
paramount concern must be to preserve public trust in the
scrupulous administration of justice and the integrity of the bar.
The important right to counsel of one’s choice must yield to
ethical considerations that affect the fundamental principles of
our judicial process.” (SpeeDee Oil, supra, 20 Cal.4th at p. 1145;
see Clark v. Superior Court (2011) 196 Cal.App.4th 37, 47-48.)
9
2. Governing Law
a. Protecting client confidences: disqualification based
on successive representation
It is well-established that an attorney, after severing his or
her relationship with a client, “may not do anything which will
injuriously affect his former client in any manner in which he
formerly represented him nor may he at any time use against his
former client knowledge or information acquired by virtue of the
previous relationship.” (Wutchumna Water Co. v. Bailey (1932)
216 Cal. 564, 573-574; accord, People ex rel Deukmejian v. Brown
(1981) 29 Cal.3d 150, 155; Fiduciary Trust Internat. of California
v. Superior Court (2013) 218 Cal.App.4th 465, 485.) This
prohibition is grounded in both the California State Bar Rules of
Professional Conduct—rule 3-310(E) in effect until November 1,
2018, and rule 1.9, effective November 1, 2018—and governing
case law. (See City National Bank v. Adams (2002)
96 Cal.App.4th 315, 323-324.)
The disqualification standards applicable in these cases of
successive representation “focus on the former client’s interest ‘in
ensuring the permanent confidentiality of matters disclosed to
the attorney in the course of the prior representation.’”
(Charlisse C., supra, 45 Cal.4th at pp. 159-160; see Neal v. Health
Net, Inc. (2002) 100 Cal.App.4th 831, 840 [“at the core of
California’s disqualification jurisprudence is a concern for the
confidentiality of lawyer-client communications”].)
Disqualification is required if the current representation involves
the legal services performed by the attorney for the former client
(e.g., Henriksen v. Great American Savings & Loan (1992)
11 Cal.App.4th 109, 111; Dill v. Superior Court (1984)
158 Cal.App.3d 301, 306) or, even if not the same matter, if a
substantial relationship exists between the former representation
10
and the current representation (SpeeDee Oil, supra, 20 Cal.4th at
p. 1146 [“[w]here an attorney successively represents clients with
adverse interests, and where the subjects of the two
representations are substantially related, the need to protect the
first client’s confidential information requires that the attorney
be disqualified from the second representation”]; Flatt v. Superior
Court (1994) 9 Cal.4th 275, 283 [“[w]here the requisite
substantial relationship between the subjects of the prior and the
current representations can be demonstrated, access to
confidential information by the attorney in the course of the first
representation (relevant, by definition, to the second
representation) is presumed and disqualification of the attorney’s
representation of the second client is mandatory”]; M’Guinness v.
Johnson (2015) 243 Cal.App.4th 602, 614).
Through the doctrine of vicarious disqualification, the
Supreme Court has extended the rules developed to protect a
former client’s confidences to include the disqualified attorney’s
entire law firm: “‘The rule of vicarious disqualification is based
upon the doctrine of imputed knowledge,’ which posits that the
knowledge of one attorney in a law firm is the knowledge of all
attorneys in the firm. [Citation.] By ‘recogniz[ing] the every day
reality that attorneys, working together and practicing law in a
professional association, share each other’s, and their clients’,
confidential information’ [citation], the vicarious disqualification
rule ‘safeguards clients’ legitimate expectations that their
attorneys will protect client confidences.’” (Charlisse C., supra,
45 Cal.4th at p. 161; accord, SpeeDee Oil, supra, 20 Cal.4th at
pp. 1153-1154; see Kirk v. First American Title Ins. Co. (2010)
183 Cal.App.4th 776, 800-801 [although the presumption that
knowledge of a client’s confidences should be imputed to all
11
members of a tainted attorney’s law firm might be refuted by
evidence that ethical screening will effectively prevent the
sharing of confidences in a particular case, “vicarious
disqualification should be automatic in cases of a tainted attorney
possessing actual confidential information from a representation,
who switches sides in the same case”]; see also Castaneda v.
Superior Court, supra, 237 Cal.App.4th at p. 1449 [“no ethical
wall could overcome the imputation of shared knowledge when an
attorney who formerly represented—and therefore possessed
confidential information regarding—a party switched sides in the
same case”].)
b. Protecting client confidences: disqualification based
on the acquisition of an adversary’s privileged
communications by means other than a prior
attorney-client relationship
Attorney disqualification to support the fundamental
principle of protecting client confidences is not limited to
situations in which an adversary’s privileged communications
have been acquired through a prior attorney-client relationship:
“A law firm that hires a nonlawyer who possesses an adversary’s
confidences creates a situation, similar to hiring an adversary’s
attorney, which suggests that confidential information is at risk.”
(In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572,
593 (Complex Asbestos).)
In Complex Asbestos, supra, 232 Cal.App.3d 572 the court
of appeal held disqualification was proper because counsel’s
newly hired paralegal had access to confidential information
relating to pending litigation while working for opposing counsel.
The court explained disqualification was warranted, not because
the disqualified attorney had a duty to protect the adverse party’s
confidences, but because the situation implicated the attorney’s
12
ethical duty to maintain the integrity of the judicial process:
“[T]he integrity of judicial proceedings was threatened not by
attorney misconduct, but by employee misconduct neither
sanctioned nor sought by the attorney.” (Id. at p. 592; see Rico v.
Mitsubishi Motors Corp. (2007) 42 Cal.4th 807, 818 [“‘[a]n
attorney has an obligation not only to protect his client’s interests
but also to respect the legitimate interests of fellow members of
the bar, the judiciary, and the administration of justice’”] (Rico);
see also Roush v. Seagate Technology, LLC (2007)
150 Cal.App.4th 210, 219.)
Similarly, in both Shadow Traffic Network v. Superior
Court (1994) 24 Cal.App.4th 1067 and County of Los Angeles v.
Superior Court (1990) 222 Cal.App.3d 647 the court held
disqualification was warranted when an independent contractor
(an expert witness) hired by a law firm had previously consulted
with, and obtained confidential information from, opposing
counsel regarding pending litigation. (See also Toyota Motor
Sales, U.S.A. v. Superior Court (1996) 46 Cal.App.4th 778, 782.)
A lawyer and his or her law firm may also be disqualified
for intentionally making use of an opposing party’s confidential
information acquired through improper means. (Clark v.
Superior Court, supra, 196 Cal.App.4th at p. 55 [“disqualification
is proper as a prophylactic measure to prevent future prejudice to
the opposing party from information the attorney should not have
possessed”]; Gregori v. Bank of America (1989) 207 Cal.App.3d
291, 309 [“disqualification is proper where, as a result of a prior
representation or through improper means, there is a reasonable
probability counsel has obtained information the court believes
would likely be used advantageously against an adverse party
13
during the course of the litigation”]; see McDermott Will & Emery
LLP v. Superior Court (2017) 10 Cal.App.5th 1083, 1120.)
In the context of inadvertently disclosed attorney-client
communications, the Supreme Court in Rico, supra, 42 Cal.4th
807 adopted the rule articulated in State Comp. Ins. Fund v.
WPS, Inc. (1999) 70 Cal.App.4th 644 (State Fund), holding, when
a lawyer comes into possession of materials that clearly appear to
be protected by the attorney-client privilege and it is reasonably
apparent the materials were made available through
inadvertence (that is, without the holder of the privilege having
waived it), the lawyer receiving the materials must refrain from
examining the materials any more than is necessary to ascertain
their privileged status and then must immediately notify the
party entitled to the privilege about the situation. (Rico, at
pp. 816-818; see State Fund, at pp. 656-657.) Applying the State
Fund rule to confidential material protected by the attorney work
product doctrine, as well as the attorney-client privilege, the Rico
Court held the trial court had properly disqualified counsel who
not only failed to conduct himself as required under State Fund
but also acted unethically in making full use of a confidential
document. (Rico, at pp. 810, 819; accord, McDermott Will &
Emery LLP v. Superior Court, supra, 10 Cal.App.5th at p. 1120
[“‘[d]isqualification is proper as a prophylactic measure to
prevent future prejudice to the opposing party from information
the attorney should not have possessed’; an affirmative showing
of existing injury from the misuse of privileged information is not
required”]; see Clark v. Superior Court, supra, 196 Cal.App.4th at
pp. 43-44, 54-55 [attorney who received opponent’s privileged
documents from his own client, who had stolen them when fired,
rather than through inadvertent production by opposing party or
14
its counsel, subject to the State Fund rule; disqualification was
proper prophylactic remedy based on evidence attorney had
reviewed the documents more than minimally necessary to
determine their privileged nature and had affirmatively used
some of the substantive information in the privileged
documents].)
3. Richie Could Not Act as Ra’s Counsel Because He
Obtained Privileged Information Relating to the Pending
Litigation as O’Gara Coach’s President and Chief
Operating Officer
Because Richie never had an attorney-client relationship
with O’Gara Coach while employed as its president and chief
operating officer, the trial court correctly rejected O’Gara Coach’s
argument for disqualification of Richie and Richie Litigation
based on a theory of improper successive representation.
However, the court erred in failing to consider O’Gara Coach’s
alternate argument that disqualification of Richie and his law
firm was required as a prophylactic measure because the firm
was in possession of confidential information, protected by
O’Gara Coach’s attorney-client privilege, concerning Ra’s
allegedly fraudulent activities at issue in this litigation. (See, e.g,
Roush v. Seagate Technology, LLC, supra, 150 Cal.App.4th at
p. 219 [although the “classic disqualification case involves the
attorney switching sides, . . . [¶] [i]n other cases, counsel may be
disqualified where counsel has obtained the secrets of an adverse
party in some other manner”; “[d]isqualification is warranted in
these cases, not because the attorney has a duty to protect the
adverse party’s confidences, but because the situation implicates
the attorney’s ethical duty to maintain the integrity of the
judicial process”].)
15
As discussed, based on the principles established by Rico,
supra, 42 Cal.4th 807, Clark v. Superior Court, supra,
196 Cal.App.4th 37 and McDermott Will & Emery LLP v.
Superior Court, supra, 10 Cal.App.5th 1083, if the holder of the
attorney-client privilege has not waived the privilege, lawyers
representing an adverse party who have received such
information knowing it is privileged have an ethical duty not to
use it. It does not matter whether the information has been
provided deliberately or inadvertently (e.g., McDermott Will &
Emery, at p. 1109 [“[a]lthough the State Fund rule originated in
the context of one attorney inadvertently producing his client’s
privileged documents to the opponent’s attorney during litigation,
neither the statement of the rule nor the policy underlying it
supports limiting the scope of the rule to that one circumstance”];
see Clark, at pp. 43-44, 52 [applying State Fund rule to stolen
documents]) or by an employee of the opposing party’s counsel or
the opposing party itself (compare Complex Asbestos, supra,
232 Cal.App.3d at pp. 587-588 [information disclosed by opposing
counsel’s nonlawyer employee] with DCH Health Services Corp. v.
Waite (2002) 95 Cal.App.4th 829, 832 [foundation would have
standing to seek disqualification of opposing counsel following
disclosure of privileged information by former foundation board
member “based on the duty of confidentiality [former board
member] owed to it despite the absence of attorney-client
relationship between [opposing counsel] and the foundation”]).
Nor is it necessary for the party seeking to protect its privileged
information to make an affirmative showing of existing injury
from the misuse of the privileged information; the threat of such
use is sufficient to justify disqualification. (McDermott Will &
Emery, at p. 1120; Clark, at p. 55.)
16
Here, O’Gara Coach presented evidence, undisputed by
3
Ra, that Richie, as president and chief operating officer of
O’Gara Coach through February 2016, participated in meetings,
phone calls and email communications with outside counsel
investigating Ra’s and Thomas Wu’s activities that developed
theories material to O’Gara Coach’s defense and forming the
basis for its cross-claims in this litigation and that are protected
by the lawyer-client privilege. The privilege belongs to O’Gara
Coach. Richie, even though no longer an officer of O’Gara Coach,
has no right to disclose information protected by that privilege
without O’Gara Coach’s consent. (See Evid. Code, § 954; Costco
Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 730
[“[t]he attorney-client privilege, set forth at Evidence Code
section 954, confers a privilege on the client ‘to refuse to disclose,
and to prevent another from disclosing a confidential
communication between client and lawyer . . .’”]; see also Chubb
& Son v. Superior Court (2014) 228 Cal.App.4th 1094, 1103
[“[u]nless otherwise specified, it is the client who holds the
privilege and controls disclosure of the confidential
communication”].) And now that Richie is a member of the
California State Bar, O’Gara Coach is entitled to insist that he
honor his ethical duty to maintain the integrity of the judicial
3
In argument in the trial court and again in his appellate
briefs, Ra has questioned the nature and extent of privileged
information Richie obtained that is material to the pending
litigation. However, in his short, six paragraph declaration in
opposition to the motion to disqualify, Richie did not dispute
former Arent Fox partner Halbert Rasmussen’s description of his
interactions with Richie in early 2016 as they related to this
matter.
17
process by refraining from representing former O’Gara Coach
employees in litigation against O’Gara Coach that involve
matters as to which he possesses confidential information. (See
Rico, supra, 42 Cal.4th at p. 818; Complex Asbestos, supra,
232 Cal.App.3d at p. 592.)
Maruman Integrated Circuits, Inc. v. Consortium Co. (1985)
166 Cal.App.3d 443, relied upon by Ra to argue that a former
employee has no duty to maintain the confidentiality of his
employer’s attorney-client privileged communications, does not
require a different result. Maruman involved a lawsuit by a
corporation against its former president. The assistant to the
corporation’s secretary, who had access to attorney-client
privilege communications between the corporation and its
litigation counsel, left the corporation and went to work for the
former president. (Id. at pp. 445-446.) After the assistant
revealed during her deposition that she had spoken to the former
president’s current counsel concerning her prior conversations
with the corporation’s lawyers and had delivered to them two
letters between the corporation and its lawyers, the corporation
moved to disqualify the former president’s law firm. (Id. at
p. 446.) The trial court denied the motion, and the court of
appeal affirmed, holding the corporation could not complain that
the former president’s current counsel “breached its duty to
maintain its confidences, where the attorney-client privilege
never existed between them.” (Id. at p. 449; see Cooke v.
Superior Court (1978) 83 Cal.App.3d 582, 592 [“we know of no
case where disqualification of an attorney or his firm was
imposed purely as a punitive or disciplinary measure, and where
there was no prior representation or confidential professional
18
relationship between the complaining party and the attorney or
4
law firm who sought to be disqualified”] (Cooke).)
The unequivocal statements in Maruman and Cooke,
echoed by the trial court in its ruling denying O’Gara Coach’s
motion to disqualify Richie Litigation, that disqualification was
never appropriate based on exposure to privileged information
absent an attorney-client relationship between the party moving
for disqualification and the attorney or firm sought to be
disqualified, are simply inconsistent with more recent authority,
as discussed, including Rico, supra, 42 Cal.4th 807, McDermott
Will & Emery LLP v. Superior Court, supra, 10 Cal.App.5th 1083
and Clark v. Superior Court, supra, 196 Cal.App.4th 37.
Moreover, as the court of appeal in Complex Asbestos,
supra, 232 Cal.App.3d 572 explained in distinguishing Maruman
and Cooke, the person who had disclosed the adverse party’s
attorney-client communications in those cases was the attorney’s
own client or an employee of the client: “If the disclosure is made
by the attorney’s own client, disqualification is neither justified
nor an effective remedy. A party cannot ‘improperly’ disclose
information to its own counsel in the prosecution of its own
lawsuit.” (Complex Asbestos, at p. 591; but see Clark v. Superior
Court, supra, 196 Cal.App.4th at pp. 54-55 [disqualifying counsel
who received stolen documents from his client and affirmatively
used information from the documents in the lawsuit against
4
In Cooke, supra, 83 Cal.App.3d 582 the client in a
dissolution proceeding had given her attorney copies of attorney-
client privileged documents belonging to her husband that had
been surreptitiously copied and delivered to the wife by her
husband’s butler. (Id. at p. 592.)
19
5
client’s former employer].) But, as discussed, a far different rule
applies when the confidential information comes into an
attorney’s possession through a former employee of the adverse
party who is now an employee (or principal) of that attorney’s law
firm: “A law firm that hires a nonlawyer who possesses an
adversary’s confidences creates a situation, similar to hiring an
adversary’s attorney, which suggests that confidential
information is at risk.” (Complex Asbestos, at p. 593.) It is this
rule, which applies a presumption of shared confidences
rebuttable by a showing that the tainted employee has been
effectively screened from the relevant matters, that was utilized
in the Complex Asbestos litigation and in Shadow Traffic Network
v. Superior Court, supra, 24 Cal.App.4th 1067. Under the
applicable legal standards, therefore, Richie Litigation might
properly represent Richie in his ongoing litigation with O’Gara
5
In General Dynamics Corp. v. Superior Court (1994)
7 Cal.4th 1164, 1190, the Supreme Court held an in-house
counsel could sue a former employer for wrongful termination as
long as confidential information was not publicly disclosed. In
Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th
294, 304, 310, this court held, based on the principles articulated
in General Dynamics, that a former in-house counsel may disclose
employer-client confidences to his or her own attorneys to the
extent they may be relevant and necessary to the preparation
and prosecution of the former counsel’s wrongful termination
action against the former client-employer. Client confidences in
such circumstances can be protected from unwarranted public
disclosure by use of protective orders, limiting the admission of
evidence, in camera proceedings and the use of sealed records.
(See, e.g., General Dynamics, at p. 1191; Neal v. Health Net, Inc.,
supra, 100 Cal.App.4th at p. 844; see also Fox Searchlight, at
pp. 309-310.)
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Coach, notwithstanding Richie’s possession of relevant
confidential information protected by O’Gara Coach’s attorney-
client privilege (an issue not presented by this appeal); but, given
Richie Litigation’s failure to demonstrate any screening of Richie
from other O’Gara Coach litigation matters, the firm may not
continue to represent Ra in the instant matter.
4. Richie Litigation, Not Just Richie, Must Be Disqualified
Under Established Rules for Vicarious Disqualification
Emphasizing that Robert Lu of Richie Litigation
substituted into this lawsuit as his counsel and insisting that
Richie has not been involved in the pending case at any time, Ra
argues, even if Richie were disqualified, the rules of vicarious
disqualification should not be applied to Richie Litigation.
However, the law is now well-established that, once a showing
has been made that someone at the adverse party’s law firm
possesses confidential attorney-client information materially
related to the proceedings before the court, a rebuttable
presumption arises that the information has been used or
disclosed in the current employment. (Complex Asbestos, supra,
232 Cal.App.3d at p. 596.) “The presumption is a rule by
necessity because the party seeking disqualification will be at a
loss to prove what is known by the adversary’s attorneys and
legal staff.” (Ibid.) Moreover, “disqualification does not require
evidence of an existing injury . . . .” (McDermott Will & Emery, at
p. 1124.) “[D]isqualification is proper as a prophylactic measure
to prevent future prejudice to the opposing party from
information the attorney should not have possessed.” (Clark v.
Superior Court, supra, 196 Cal.App.4th at p. 55.)
As discussed, Ra provided no evidence in opposition to
O’Gara Coach’s motion that Richie had been screened from
Robert Lu or any of the several other lawyers at Richie Litigation
21
who have worked on the pending litigation. (See Kirk v. First
American Title Ins. Co., supra, 183 Cal.App.4th at p. 801
[presumption that knowledge of a client’s confidences should be
imputed to all members of a tainted attorney’s law firm might be
refuted by evidence that ethical screening will effectively prevent
the sharing of confidences in a particular case].) In these
circumstances the doctrine of imputed knowledge requires the
vicarious disqualification of the entire Richie Litigation firm.
(Charlisse C., supra, 45 Cal.4th at p. 161.)
DISPOSITION
The order denying the motion to disqualify Richie
Litigation is reversed. The trial court on remand shall issue a
new order granting O’Gara Coach’s motion. O’Gara Coach is to
recover its costs on appeal.
PERLUSS, P. J.
We concur:
ZELON, J.
SEGAL, J.
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