Legal Ethics Corner
Ethics Corner is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

 
Ethical Walls: Normally, They Will Not Save a Firm from Vicarious Disqualification
(Part One of Three) 
           
 Per the Rules of Professional Conduct, “[a] member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment.” (Rule 3-310(E).)  “Where 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.” (People ex rel. Department of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1146.) Although not addressed by Rule 3-310(E), California has a long established policy of vicarious disqualification of the conflicted attorney’s entire law firm. (Ibid.) Naturally, this leads to the thought of saving the firm from disqualification by erecting an ethical wall around the conflicted attorney. However, given the state of the law, do not bother with the brick and mortar; it will be for naught.
 
 In the context of an attorney already in civil practice who has relocated to another private firm that is now adverse to the attorney’s former client, no published California case holds that an ethical wall suffices to defeat the rule of vicarious qualification of the entire firm. To the contrary, the courts have held that there is simply “no gray area” and that “the entire firm must be vicariously disqualified even if [the attorney] has been ethically screened from day one.” (Henriksen v. Great Am. Sav. & Loan (1992) 11 Cal.App.4th 109, 115-116.) As noted by another court, “[c]learly, the California precedent has not rushed to accept the concept of disqualifying the attorney but not the firm, nor has it enthusiastically embarked upon erecting Chinese walls.” (Klein v. Superior Court (1988) 198 Cal.App.3d 894, 912-913; see Peat, Marwick, Mitchell & Co. v. Superior Court (1988) 200 Cal.App.3d 272, 293-294 (concurring opn. by Low, P.J.) [objecting to the term “Chinese wall” and recommending “ethics wall” as a more suitable phrase].)   
 
Faithfully enforced ethical walls have been recognized as adequate where a former government attorney joins a private firm. (Chambers v. Superior Court (1981) 121 Cal.App.3d 893, 900-903 [exception to automatic vicarious disqualification warranted by policy of encouraging attorneys to work for government]; Higdon v. Superior Court (1991) 227 Cal.App.3d 1667, 1678-1681 [same conclusion with respect to a judicial officer who joins a firm that is handling a matter previously before the judicial officer].)  However, where the switch runs in the other direction, e.g., where the attorney moves from private practice to become the head of a governmental law office, even a complete ethical wall will not save the governmental law office from vicarious disqualification. (City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 843 [noting, at p.850, fn.2, that it was not deciding what the outcome would be if the attorney in question were a “senior supervisory attorney” instead of the head of the office].) An ethical wall has also been approved where the disqualification of the individual attorney was not the result of a prior representation but because of inappropriate contact with an opposing party represented by counsel. (Mills Land & Water Co. v. Golden West Refining Co. (1986) 186 Cal.App.3d 116, 137 [although not calling the trial court’s “suppression order” an “ethical wall”, its function was to prevent the disqualified attorney from sharing inappropriately obtained information with the rest of his firm while allowing the firm to remain in the case].)
 
However, as noted above, even complete ethical walls will not save a firm from vicarious disqualification in the common civil practice relocation context. A particularly striking example of this is Hitachi Ltd. v. Tatung Company (N.D. Cal. 2006) 419 F.Supp.2d 1158. The firm at issue had represented the defendant in 17 prior matters. However, it had hired an attorney who had formerly worked on a nearly identical case for the plaintiff against a different defendant while an associate at the opposing law firm. Despite acknowledging that the defendant’s firm had erected the most effective ethical screening procedures possible, the court noted that “[n]o California case...has yet expressly altered the established rule” of mandatory vicarious disqualification. Naturally, every firm would do well to fully screen all candidates (whether associate or lateral partner) for conflicts as the governing rule will call for complete vicarious disqualification.
 
In parts two and three of the current topic, we will look at certain additional nuances to the vicarious disqualification rule and the pressures being exerted against it.  
 
--Luis E. Ventura
 
**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**