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.  

HUGE Development Regarding Ethical Walls: Court of Appeal rules that in the private firm to private firm context, a firm might be able to save itself from vicarious disqualification by using an ethics screen around the tainted attorney.
 
We have previously addressed the use of ethical walls/screens in both the governmental and private firm context in a three part series. (See Ethics Corner, 10/26/09, 11/09/09, and 11/23/09.) Now, the court in Kirk v. First American Title Insurance Company (filed April 7, 2010) holds that when an attorney who has confidential information relocates from one private firm to another, and the second firm is defending the matter from which the attorney obtained confidential information, the presumption that generally calls for vicarious disqualification of the entire firm is a rebuttable presumption. (See opinion here from Court of Appeal webpage.) Therein, Attorney-A, while at Firm-1, was given confidential information by plaintiffs’ counsel on various class actions for the purpose of Attorney-A possibly serving as a consultant. Attorney-A declined and thereafter moved to Firm-2. Attorneys-B, C, and D, while at another firm, were defending the class actions. They then relocated to Firm-2 as well. Plaintiffs’ counsel successfully moved to disqualify Firm-2. The trial court relied on the generally understood rule that despite Firm-2’s attempt to keep an ethics screen around Attorney-1, such a screen will not save a firm from disqualification in this factual context. Indeed, no published California case holds to the contrary where an attorney in private practice switches to another private firm. 
 
However, in Kirk, the court traces the history and justification for the general rule of vicarious disqualification and holds that the presumption calling for vicarious disqualification is not irrebuttable but rebuttable by the showing that the attorney holding confidential information was appropriately screened from the attorneys working on the case. In very general terms, the court reasoned that the categorical prohibition is no longer supportable in light of modern law firm mergers and common attorney relocation, that the California Supreme Court has not definitively ruled on the availability of ethics screens to defeat vicarious disqualification, and that judicial acceptance of ethics screens in other contexts (e.g., government lawyer switching to private firm) supports the conclusion that it can be done in the private firm to private firm switch as well. The court stressed that in certain circumstances vicarious disqualification is still mandatory (i.e., where the attorney holding confidential information switches sides in the very same lawsuit). In cases like the present, however, trial courts, on a case by case basis, should consider various factors including whether a screen was timely raised when the conflict arose and whether it is sufficient to prevent the disclosure of confidential information to the non-tainted attorneys.
 
Kirk is a must-read, and must-reread, for any firm seeking to represent clients where one or more of its attorneys has confidential information. Many eyes will be watching for possible depublication and/or grant of review.
 
--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.**