New Theories for Non-Clients to Seek Disqualification of Counsel
LACBA Update, February 2013
By Robert K. Sall, who practices with The Sall Law Firm APC in Laguna Beach and is a past chair of the LACBA Professional Responsibility and Ethics Committee. His practice focuses on business litigation, legal malpractice litigation, and attorney-client fee disputes. He can be reached at rsall@Sall-Lawoffice.com. The opinions expressed are his own.
Most disqualification cases arise from a conflict of interest involving disclosure or the threat of disclosure of confidential information.1 On occasion, a disqualification motion will be made upon the alleged unethical conduct of adverse counsel. In some cases, courts have held that a litigant may have standing to assert a basis for disqualification of the opposing counsel even where there was no pre-existing attorney-client relationship between that counsel and the moving party, and confidential information was not involved.
However, a 2011 decision, Kennedy v. Eldridge, from the Third District Court of Appeal, suggests an unusual approach considerably different than prior California law to support an attorney’s disqualification.2 In Kennedy, the court found a basis for disqualification arising from an appearance of impropriety—a standard that has not been applied to attorney disqualification in California for quite some time—and the prospect that the lawyer might have to testify as a witness, even though the proceeding did not involve a jury, and the circumstances would not have violated Rule 5-210 of the Rules of Professional Conduct.
Although most motions to disqualify counsel are based upon conflicts of interest arising from legal representation that is adverse to a former client or a current client, in Kennedy, the party moving to disqualify opposing counsel was neither a present or former client, and the case did not involve loyalty or disclosure of confidential information. Kennedy was based upon a convoluted set of facts that are greatly simplified here. In what was characterized by the court of appeal as “a plethora of family entanglements,” Richard Eldridge, a lawyer, represented his son, Tyler Eldridge, in a custody and paternity matter relating to Tyler’s son, Calvin. The adverse party in the proceedings was Calvin’s mother, Kayla Kennedy. According to the record, Richard’s wife, Deborah, with whom Richard had practiced law, previously represented Kayla’s father, Alan Kennedy, in a child custody matter. In that former proceeding, Richard had obtained a declaration from Kayla on her father’s behalf. Kayla’s stepmother was employed as a legal secretary at the Eldridge law firm and allegedly had a role in obtaining the declaration from Kayla. Kayla asserted in her motion to disqualify Richard that she had worked as a process server for the firm, that the firm had represented her father, that her stepmother was an employee of the firm, that the firm had obtained a declaration from her in connection with her father’s case, that Richard and Deborah were both “emotionally involved” in the case involving their grandson, and that they had access to Kayla’s confidential information.
Richard Eldridge denied—without dispute—that any attorney-client relationship with Kayla ever existed. Richard’s opposition claimed that Kayla lacked standing to bring the motion because she was not a former client, and he owed Kayla no duty of confidentiality or loyalty that would be breached if Richard continued to represent his son. Thus, the case presented one of the unusual circumstances where a motion to disqualify was brought by a non-client to whom no duties of confidentiality or loyalty were owed.
The court of appeal, referring to the trial court’s written ruling, noted that “no California case has held that only a client or former client may bring a disqualification motion.”3 Citing to other California authorities, the Kennedy court stated that the reason for this is simple: A trial court’s authority to disqualify an attorney derives from the power inherent in every court 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. Again quoting prior decisions, the court further stated that disqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility. The 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.4
While noting that federal courts generally limit standing to bring disqualification motions to clients or former clients, Kennedy concluded that is not the case in California courts. Where a lawyer’s ethical breach is “manifest and glaring” and so “infects the litigation in which disqualification is sought that it impacts the moving party’s interests in a just and lawful determination of [his or] her claims, a non-client might meet the standing requirements to bring a motion to disqualify based upon a third party conflict of interest or other ethical violation.”5
We have seen previous cases in which a party had standing to move to disqualify opposing counsel based upon an ethical transgression other than a breach of duty. One example of this is Cal Pak Delivery Services, Inc. v. United Parcel Service, where a disqualification was sought by a non-client when counsel for a class allegedly took a position that was in favor of his own personal interests and detrimental to the class that he represented.6 In that case, the attorney for Cal Pak and the alleged class contacted the defendant’s counsel and proposed that the sole class representative would release its claims against the defendant, and that class counsel would abandon and dismiss the action. In return, the attorney wanted the defendant to pay the sum of $8 million to $10 million to him personally; the class would receive nothing. In this context, the defendant’s motion to disqualify was granted based upon the conclusion that counsel’s conduct was inimical to the client he was trying to represent, being an attempt to “sell out” the class. The court concluded that disqualification was appropriate because the “unethical conduct is likely to have a continuing effect in this litigation adverse to the interests of the class he purports to represent.”7
In Kennedy, however, the conduct of Richard Eldridge was not nearly so egregious. He had a personal interest in the litigation in that the object of the custody dispute was his grandchild. He had knowledge of facts that could lead to him being a witness in the non-jury case. He possibly had limited confidential information obtained from the adverse party in her role as a witness in a prior litigation but not in the context of an attorney-client relationship. The trial court disqualified Eldridge, and the disqualification was upheld by the court of appeal.8
The principal bases cited for affirming the disqualification give some cause for concern in their long-term implications. The court made its determination on two primary grounds, one being that there was an appearance of impropriety in Eldridge’s role as counsel in light of all his entanglements with the family, and the second being that his knowledge of the facts was likely to trigger ethical concerns from his being both an advocate and a probable witness in the case. An excellent County Bar Update article published in October 2012 by Michael Strub has addressed the implications of the “Advocate-Witness Rule” arising from Kennedy, and reference is made to that for further particulars.9 Suffice it to say that it was unusual for the court of appeal to rely upon ABA Model Rule 3.7 as a basis for disqualification when California has a distinctly different rule—Rule 5-210 of the Rules of Professional Conduct—that would not reach the same result. On its face, Rule 5-210 is applicable only to jury trials and would not prohibit a lawyer acting as both an advocate and a witness in non-jury case. Yet, Kennedy now stands for the proposition that a lawyer may potentially be disqualified in any case, even a court trial, where it is likely that he or she will have to testify as a witness. The court recognized the differences between the ABA rule and the California rule, and chose to apply the ABA rule as a basis for disqualification.
The Kennedy court also breathed new life into a discredited standard for disqualification, an “appearance of impropriety,”10 even where there is no breach of an ethical rule or a fiduciary duty. Here, the court found the appearance of impropriety because that Richard wore “several different hats” in the controversy, had relations with each of the parties and their family members, and was “the grandfather of the child whose best interests are at the center of this controversy.”11 Does this suggest that lawyers may no longer represent family members in controversies where there are emotional relationships in play? The court explained that it was giving great weight to the interests of the minor child.
Twenty-three ethics lawyers and one professional association signed on to a letter to the California Supreme Court in February 2012, unsuccessfully seeking depublication of the Kennedy decision based upon its application of ABA Model Rule 3.7 where the California rule would reach a contrary result, and upon its apparent revival of the appearance of impropriety standard. Despite that effort, the case was not depublished and remains good law.
1 Cal Pak Delivery, Inc. v. United Parcel Service, Inc., 52 Cal. App. 4th 1, 10 (1997).
2 Kennedy v. Eldridge, 201 Cal. App. 4th 1197 (2011).
3 Id. at 1204.
4 Id., citing to Great Lakes Construction, Inc. v. Burman, 186 Cal. App. 4th 1347, 1355 (2010), and quoting People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal. 4th 1135, 1143 (1999).
5 Kennedy, 201 Cal. App. 4th at 1204.
6 Cal Pak Delivery, Inc. v. United Parcel Service, Inc., 52 Cal. App. 4th 1 (1997).
7 Id. at 10-12.
8 Kennedy, 201 Cal. App. 4th at 1201-02, 1213.
9 Michael H. Strub Jr., “Lawyer as Witness,” County Bar Update, October 2012, Vol. 32, No. 9, available at https://www.lacba.org/news-and-publications/lacba-update/past-ethics-articles/2012-oct-ethics-strub.
10 In re Jasmine S., 153 Cal. App. 4th 835, 843 (2007); Oaks Management Corporation v. Superior Court, 145 Cal. App. 4th 453, 471 (2006).
11 Kennedy, 201 Cal. App. 4th at 1211.