Wu v. O'Gara Coach Co. LLC ( 2019 )

Filed 8/22/19 (unmodified opn. attached)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
THOMAS WU, B289698
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC675388)
v.
ORDER MODIFYING
O’GARA COACH COMPANY OPINION
LLC et al., (No change in judgment)
Defendants and
Respondents.
THE COURT:
It is ordered that the opinion filed herein on August 21,
2019 be modified as follows:
1. Delete the entire first paragraph of the opinion and
replace it with the following:
In O’Gara Coach Co., LLC v. Ra (2019) 30 Cal.App.5th
1115 (Ra) this court reversed the trial court’s order denying
O’Gara Coach Company LLC’s motion to disqualify Richie
Litigation, P.C. and its attorneys from representing former
O’Gara Coach senior executive Joseph Ra in litigation that
included cross-actions between O’Gara Coach and Ra. We held
O’Gara Coach was entitled to insist that Darren Richie, its
former president and chief operating officer and a principal of
Richie Litigation, honor his ethical obligation as a member of the
California State Bar to maintain the integrity of the judicial
process by refraining from representing former O’Gara Coach
employees in litigation against O’Gara Coach when Richie
possessed confidential attorney-client privileged information
materially related to the matters at issue, even though that
information had been obtained by Richie in his capacity as an
officer of the client, not its lawyer. (See id. at pp. 1128-1129.)
2. There is no change in the judgment.
__________________________________________________________
PERLUSS, P. J. SEGAL, J. FEUER, J.
2
Filed 8/21/19 (unmodified version)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
THOMAS WU, B289698
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC675388)
v.
O’GARA COACH COMPANY
LLC et al.,
Defendants and
Respondents.
APPEAL from an order of the Superior Court of
Los Angeles County, Robert Leslie Hess, Judge. Reversed.
Brown, Neri, Smith & Khan, Ethan J. Brown,
Rowennakete P. Barnes, James F. Warren IV for Plaintiff and
Appellant.
Fisher & Phillips, Wendy McGuire Coats, Christopher J.
Boman and Sean T. Kingston for Defendants and Respondents
O’Gara Coach Company, LLC and Llewyn Jobe.
In O’Gara Coach Co., LLC v. Ra (2019) 30 Cal.App.5th
1115 (Ra) this court reversed the trial court’s order denying
O’Gara Coach Company LLC’s motion to disqualify Richie
Litigation, P.C. and its attorneys from representing former
O’Gara Coach senior executive Joseph Ra in litigation that
included cross-actions between O’Gara Coach and Ra. We held
O’Gara Coach was entitled to insist that Darren Richie, its
former president and chief operating officer and a principal of
Richie Litigation, honor his ethical obligation as a member of the
California State Bar to maintain the integrity of the judicial
process by refraining from representing former O’Gara Coach
employees in litigation against O’Gara Coach when Richie
possessed confidential attorney-client privileged information
materially substantially related to the matters at issue, even
though that information had been obtained by Richie in his
capacity as an officer of the client, not its lawyer. (See id. at
pp. 1128-1129.)
Unlike the trial court in Ra, the trial court in the case at
bar granted O’Gara Coach’s motion to disqualify Richie Litigation
and its attorneys from representing Thomas Wu, a former sales
advisor at O’Gara Coach Bentley, in Wu’s lawsuit against O’Gara
Coach for race discrimination in violation of the California Fair
Employment and Housing Act (FEHA) (Gov. Code, § 12900
et seq.) and other employment-related misconduct. The trial
court found that Richie, as the former president and chief
operating officer of O’Gara Coach, had significant responsibility
in the formulation and implementation of the company’s anti-
discrimination and anti-harassment policies and it was “more
likely than not that in those roles he consulted with outside
counsel for O’Gara.” In addition, the court ruled it appeared
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highly probable Richie would be an important percipient witness
at trial not only on the issue of the promulgation and
enforcement of the policies at issue in the lawsuit but also as to
whether Wu’s complaints were made known to Richie and what
actions, if any, Richie took in response to those complaints.
On appeal Wu argues the order disqualifying Richie
Litigation should be reversed because, unlike the situation in Ra,
O’Gara Coach failed to present evidence that Richie possessed
confidential attorney-client privileged information material to the
employment dispute between Wu and O’Gara Coach. Wu also
argues Richie’s potential role as a witness does not justify
disqualification because Wu gave his informed consent to Richie
being called as a witness and, in any event, Richie would not act
as both advocate and witness because other attorneys in the firm
are representing Wu. We agree with Wu and reverse the order.
FACTUAL AND PROCEDURAL BACKGROUND
1. Wu’s Lawsuit
On September 12, 2017 Wu, represented by Robert K. Lu of
Richie Litigation, sued O’Gara Coach and several of its senior
management employees for unlawful discrimination based on
race in violation of FEHA; failure to prevent unlawful
discrimination; wrongful termination; defamation; harassment;
intentional and negligent infliction of emotional distress;
negligent hiring, retention and supervision; and workplace
intimidation. A first amended complaint, filed December 21,
2017, contained the same causes of action except defamation and
workplace intimidation and named as defendants only O’Gara
Coach and Llewyn Jobe, Wu’s former supervisor at O’Gara Coach
Bentley.
3
According to the amended complaint, Wu worked for
approximately six years, from 2010 to February 10, 2016, as a
sales advisor at O’Gara Coach Bentley in Beverly Hills, one of
O’Gara Coach’s family of dealerships. Wu alleged Jobe, Tim
O’Hara, the general manager at O’Gara Coach Bentley, and
Thomas O’Gara, the owner and principal of O’Gara Coach,
created a hostile work environment and routinely harassed Wu
based on his race and ethnicity. Specifically, Wu alleged Jobe
called him and his Chinese friends “chinks” and referred to him
as “Buddha” or “sumo wrestler” because of his weight and ethnic
heritage. Wu complained about the offensive comments to his
supervisors, including Jobe, and to more senior executives at
O’Gara Coach Bentley, but nothing was done to correct the
situation.
Wu alleged he was a model employee during his tenure at
O’Gara Coach Bentley and had never been reprimanded for his
performance or other work-related issues. Beginning in early
2016 Wu suspected his employment at the dealership might be in
jeopardy and began exploring opportunities at other dealerships
in Los Angeles. Following an interview at one of those
dealerships on February 10, 2016, Wu was fired. No explanation
was given to Wu for O’Gara Coach’s decision to terminate his
employment.
2. The Motion To Disqualify Richie Litigation
O’Gara Coach and Jobe jointly answered the first amended
complaint on January 22, 2018 and several days later moved to
disqualify Richie Litigation and each of its attorneys from
representing Wu. The motion argued disqualification was
appropriate because Richie is a key percipient witness whose
testimony would be adverse to the interests of his client and
4
because he had been privy to confidential and privileged
documents and information during his employment at O’Gara
Coach that were directly related to the issues in the lawsuit.
a. 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.
According to the declaration of Thomas O’Gara in support
of the motion to disqualify, as president and chief operating
officer Richie was charged with creating, implementing and
enforcing workplace policies and practices for all of the company’s
various dealership locations, including O’Gara Coach Bentley
where Wu worked; and one of his job responsibilities was to
ensure a workplace environment free of unlawful harassment
and discrimination. In addition, Richie was one of two
individuals to whom employee complaints were to be reported,
including violations of the company policy against harassment
1
and discrimination. Several O’Gara Coach employees submitted
declarations in support of the motion stating the office culture
1
Christine Rogers, the company’s controller during the
relevant time period, was the other employee to whom complaints
were to be reported. Rogers stated in her declaration that she
was not aware of any employee complaints made during Richie’s
tenure that were not brought to his attention or that he was not
involved in investigating and resolving. She also declared she
was not aware of any complaints made by Wu about workplace
conditions. Lance Westerlund, general manager of preowned
vehicles for O’Gara Coach, similarly declared he was not aware of
any complaints by Wu.
5
and work environment at the company resulted directly from
Richie’s hands-on approach to management.
In his declaration Thomas O’Gara also explained 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
subjects, the development, implementation, and enforcement 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
2
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 10, 2016. In his declaration Thomas O’Gara stated
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
2
Richie successfully sat for the California bar examination
in February 2017, a year after he left O’Gara Coach. He was
admitted to the bar on August 27, 2017 and formed Richie
Litigation that same summer.
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document, which is described as subject to confidentiality
provisions, was not filed with the trial court, but counsel offered
to make it available to the court for in camera inspection.
b. Richie’s communications with outside counsel
Usama Kahf, a partner with Fisher & Phillips LLP,
submitted a declaration in support of the motion to disqualify
stating his firm has provided labor and employment advice to
O’Gara Coach for many years. According to Kahf, “[b]etween
November 2014 and February 2016, Richie was my primary point
of contact with [O’Gara Coach] on various litigation and non-
litigation employment matters, because he was the President and
Chief Operating Officer during that period.” Kahf exchanged
more than 600 emails and took part in at least 50 telephone
conversations with Richie relating to Fisher & Phillips’s
representation of the company during that period.
Kahf described the matters he discussed with Richie as
including strategy and activity in pending litigation pertaining to
former and current employees; compliance with wage and hour
laws and regulations; termination and severance issues related to
O’Gara Coach employees; “responding to various complaints
made by [O’Gara Coach] employees about a litany of workplace
issues”; and “investigations of employee misconduct and
complaints.”
Kahf’s declaration also stated Richie directed Kahf and his
law firm regarding the development, drafting and/or revision of
the O’Gara Coach policy prohibiting discrimination and
harassment. “As my primary point of contact at [O’Gara Coach],
and due to his direct involvement in policy drafting and
implementation and in his role of decision-maker, Richie had
direct knowledge and possession of [O’Gara Coach’s] confidential,
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business proprietary, and trade secret information, attorney-
work product, and attorney-client privileged communications.
Moreover, Mr. Richie, as [O’Gara Coach’s] President and COO,
was the primary individual responsible for implementing and
enforcing [O’Gara Coach’s] workplace policies and procedures.”
Halbert Rasmussen, formerly a partner at Arent Fox LLP,
stated in his declaration in support of the motion that between
November 2014 and February 2016 he “regularly communicated
with Mr. Richie in the course of my representation of O’Gara
Coach in various legal matters, as did other attorneys at Arent
Fox LLP who were assisting me with our representation of
O’Gara Coach.” Rasmussen had at least 40 telephone calls with
Richie during that period, virtually all of which in his view
constituted communications subject to the attorney-client
privilege in favor of O’Gara Coach.
Keith D. Kassan, who serves as outside general counsel to
O’Gara Coach, in his declaration in support of the motion
described Richie as a “primary point of contact” for O’Gara Coach
on 28 litigated and nonlitigated matters affecting its sales and
service departments. Kassan exchanged more than 300 emails
and at least 40 telephone conversations with Richie relating to
his representation of O’Gara Coach.
According to Kassan, due to Richie’s “direct involvement in
policy drafting, implementation, and enforcement, and in his role
as decision-maker, Richie had direct knowledge and possession of
O’Gara Coach’s confidential, business proprietary, and trade
secret information, attorney-work product, and attorney-client
privileged communications.” In addition, “Richie was the
primary person responsible for developing, implementing and
8
enforcing O’Gara Coach’s workplace policies and practices, during
which time Plaintiff Thomas Wu’s allegations arose.”
c. The grounds advanced for disqualification
O’Gara Coach advanced three grounds in support of its
motion to disqualify Richie Litigation and the three lawyers then
affiliated with the firm from representing Wu: First, citing
3
former rule 5-210 of the State Bar Rules of Professional Conduct,
O’Gara Coach argued Richie would be a key percipient witness in
the case and permitting him (or another attorney in his firm) to
serve as an advocate, while Richie was also a witness, would
result in a clear detriment to O’Gara Coach. Second, implicitly
referring to former rules 3-100 and 3-310 requiring protection of
a client’s confidential information and avoiding the
representation of adverse interests, O’Gara Coach argued Richie,
during his employment at the company, had been directly
involved with, and oversaw, matters substantially related to the
claims Wu was asserting and had been privy to confidential and
privileged documents and information. As a result,
3
Effective November 1, 2018, former rule 5-210 was replaced
by rule 3.7 as part of a comprehensive revision of the State Bar
Rules of Professional Conduct. Both former rule 5-210(C) and
rule 3.7(a)(3) permit a lawyer to act as an advocate in a trial in
which he or she is likely to be a witness with the informed
written consent of the client. Rule 3.7(b) allows a lawyer to act as
advocate in a trial in which another lawyer in the lawyer’s firm is
likely to be called as a witness unless precluded from doing so by
the rules relating to duties owed to current clients (rule 1.7) or
former clients (rule 1.9).
All references to rules and to former rules are to the State
Bar Rules of Professional Conduct unless otherwise stated.
9
disqualification was necessary to protect O’Gara Coach’s
privileged information. Finally, as a former senior executive of
O’Gara Coach, Richie owed continuing fiduciary duties to the
company, including a duty to maintain the confidentiality of its
privileged information.
3. Wu’s Opposition to the Motion To Disqualify
Wu’s opposition to the motion to disqualify emphasized,
first, that Richie never had any type of attorney-client
relationship with O’Gara Coach, either during his tenure at the
company (which was before he had been admitted to the State
Bar of California) or after he left its employ; and second, that
Richie was not Wu’s lawyer or otherwise personally involved in
his representation in this case.
With respect to the specific grounds for disqualification
advanced by O’Gara Coach, Wu explained he had been fully
informed about Richie’s potential role as a percipient witness and
had already consented to it. Accordingly, O’Gara Coach’s reliance
on the advocate-witness rule for disqualification of Richie
Litigation was misplaced.
Disqualification because of the purported relationship
between Richie’s work at O’Gara Coach and the subject matter of
Wu’s lawsuit was similarly unwarranted, Wu argued.
Disqualification based on a duty of loyalty (avoiding conflicts of
interest, current or successive) or the duty to protect confidential
information is dependent on the existence of an attorney-client
relationship between the individual (or law firm) to be
disqualified and the party moving for disqualification. Here,
Richie had never represented O’Gara Coach in any legal capacity.
In a declaration in opposition to the motion, Richie
explained, while he was president and chief operating officer of
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O’Gara Coach, Thomas O’Gara provided him with information
regarding workplace and EEOC policies in place at the company.
According to Richie, “[w]hile I did not develop these policies, I
had input into them as I believed that a fair and harassment-free
workplace was critical to success of a business and, more
importantly, the well-being of the employees.” O’Gara, however,
did not abide by those policies, “either in spirit or in fact.” To the
contrary, O’Gara routinely fostered an atmosphere of exclusion,
specifically at the Beverly Hills dealership where Wu worked,
and often referred to Asians as “chinks.”
Finally, that Richie might have some form of continuing
fiduciary duties to O’Gara Coach, Wu contended, is not a
cognizable ground for disqualification of a nonlawyer; the
existence of an attorney-client relationship is essential.
4. The Trial Court’s Ruling
At the March 20, 2018 hearing, after listening to argument
of counsel, the court granted the motion to disqualify Richie and
Richie Litigation. The court explained it was persuaded Richie
“had significant responsibility for the formulation and
implementation of the anti-harassment and anti-discrimination
policies for O’Gara [Coach], and it is more likely than not that in
those roles he consulted with outside counsel for O’Gara [Coach].
[¶] In addition, it appears highly probable that Mr. Richie may
be an important principal witness to the issues of promulgation
and enforcement policies/practice in this suit, that he has
personal knowledge whether plaintiff complained to him or
whether any of plaintiff’s complaints were communicated to him
and what action he took or did not take.”
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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; 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, Ra, supra, 30 Cal.App.5th at p. 1124; 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.)
2. Ra
In Ra, supra, 30 Cal.App.5th 1115 we reviewed O’Gara
Coach’s unsuccessful motion to disqualify Richie Litigation in a
different lawsuit involving claims between O’Gara Coach and one
of its former employees, Joseph Ra. At the outset of our analysis,
quoting the Supreme Court’s decision in SpeeDee Oil, supra,
20 Cal.4th at p. 1145, we explained, “When deciding a motion to
disqualify counsel, ‘[t]he paramount concern must be to preserve
12
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.’” (Ra, at p. 1124;
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’”].)
Recognizing, as had the trial court, that Richie had never
acted as counsel for O’Gara Coach and, therefore, that the
general rules regarding disqualification based on successive
representation did not apply (Ra, supra, 30 Cal.App.5th at
4
p. 1128), we considered cases in which disqualification had been
based on the acquisition of an adversary’s privileged
communication by means other than a prior attorney-client
relationship. (Id. at pp. 1126-1127.) In particular, we discussed
In re Complex Asbestos Litigation (1991) 232 Cal. App. 3d 572, in
which the court had held disqualification was proper because
counsel’s newly hired paralegal had access to confidential
information relating to pending litigation while working for
4
Disqualification is required in successive representation
cases 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 and the current representation
(SpeeDee Oil, supra, 20 Cal.4th at p. 1146; Flatt v. Superior Court
(1994) 9 Cal. 4th 275, 283).
13
opposing counsel, and Shadow Traffic Network v. Superior Court
(1994) 24 Cal. App. 4th 1067, in which the court held
disqualification was warranted when an expert witness hired by
a law firm had previously consulted with, and obtained
confidential information from, opposing counsel regarding the
pending litigation.
We also analyzed Rico v. Mitsubishi Motors Corp., supra,
42 Cal. 4th 807, in which the Supreme Court held, when a lawyer
comes into possession of materials that clearly appear to be
protected by the attorney-client privilege or work product
doctrine and it is reasonably apparent the materials were
disclosed without the holder of the privilege intending to waive it,
the lawyer receiving the material is prohibited from using them.
Instead, the lawyer may examine the materials no more than
necessary to ascertain their privileged status and then must
immediately notify the party entitled to the privilege about the
situation. (Id. at pp. 816-818.) It is proper to disqualify counsel
who fails to act in accord with these ethical responsibilities and
makes use of the inadvertently disclosed confidential
information. (Id. at pp. 810, 819; accord, McDermott Will &
Emery LLP v. Superior Court (2017) 10 Cal.App.5th 1083, 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 (2011) 196 Cal. App. 4th
37, 43-44, 54-55 [attorney received opponent’s privileged
documents from his own client, who had stolen them when fired,
rather than through inadvertent production by opposing party or
its counsel; disqualification was proper prophylactic remedy
14
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].)
Applying the principles articulated in these cases, we
reversed the order denying the motion to disqualify Richie
Litigation and its attorneys, holding disqualification 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 the pending litigation. (Ra,
supra, 30 Cal.App.5th at pp. 1128-1129; see Roush v. Seagate
Technology, LLC (2007) 150 Cal. App. 4th 210, 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”].)
We explained that O’Gara Coach had presented evidence to
the trial court, undisputed by Ra, that Richie, while employed as
a senior executive at the company, participated in meetings,
phone calls and email communications with outside counsel
investigating Ra’s activities “that developed theories material to
O’Gara Coach’s defense and forming the basis for its cross-claims
[against Ra] in this litigation and that are protected by the
lawyer-client privilege.” (Ra, supra, 30 Cal.App.5th at p. 1129.)
That privilege belonged to O’Gara Coach; and Richie, even
though no longer an officer of the company, had no right to
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disclose the protected information without O’Gara Coach’s
consent. (Ibid., citing Costco Wholesale Corp. v. Superior Court
(2009) 47 Cal. 4th 725, 732 [“‘[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”’”].) Now that Richie was a member of the California
State Bar, we concluded, “O’Gara Coach is entitled to insist that
he honor his ethical duty to maintain the integrity of the judicial
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.” (Ra,
5
at p. 1129.)
3. O’Gara Coach Failed To Present Evidence Richie
Possessed Privileged Information Materially Related to
the Pending Litigation
Central to our holding in Ra was undisputed evidence,
based on the declaration of one of O’Gara Coach’s outside
attorneys, that Richie possessed attorney-client privileged
information directly related to O’Gara Coach’s defense of the
claims being asserted against it in the litigation then before us
and to O’Gara Coach’s prosecution of its cross-claims against Ra
in that lawsuit. In contrast, the declarations in this case
demonstrate, at most, that Richie possesses presumptively
5
In the final section of our opinion in Ra, we observed no
evidence had been presented that Richie had been screened from
any of the attorneys at Richie Litigation who had worked on the
case and held that Richie Litigation, not just Richie, must be
disqualified under established rules for vicarious disqualification.
(Ra, supra, 30 Cal.App.5th at pp. 1131-1132.)
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privileged information regarding O’Gara Coach’s development,
implementation and enforcement of its workplace polices, as well
as knowledge of other confidential information regarding the
company, its operations and its general litigation strategies.
None of the declarations suggests Richie was involved in any way
in investigating Wu’s complaints of a hostile work environment
or had any discussions with O’Gara Coach’s outside counsel
regarding Wu’s claims.
Whether the principles articulated in Ra are properly
extended to justify disqualification of Richie Litigation under the
circumstances here raises the problem of what has sometimes
been referred to in case law and scholarly literature as “playbook”
information. (See, e.g., Khani v. Ford Motor Co. (2013)
215 Cal. App. 4th 916, 921-922; Fremont Indemnity Co. v. Fremont
General Corp. (2006) 143 Cal. App. 4th 50, 69 (Fremont
Indemnity); Painter, Advance Waiver of Conflicts (2000)
13 Geo. J. Legal Ethics 289, 319; Wolfram, The Vaporous and the
Real in Former-Client Conflicts (1996) 1 J. Inst. for Study of
Legal Ethics 133, 138.)
As described by Professor Charles Wolfram, the typical
playbook problem involves a claim by a former client that the
lawyer learned confidential information of a general kind during
the prior representation: “Common variants on the claim are
assertions that the lawyer learned the former client’s settlement
strategy and philosophy, or what sequence of demands or other
tactics the former client uses in negotiating business deals, how
the former client generally conducts its business, how the client
deals with the stresses of litigation, what quirks of personality
the client possesses or suffers from, or, in general, what ‘hot
buttons’ can be pushed to cause panic or confusion to the former
17
client. Confidential information about any one of those elements,
it is claimed, would give the lawyer significant advantage if it
were permissible to represent an adversary against the former
client, regardless of the factual dissimilarities between the two
representations in other respects. Hence, it is claimed,
confidential information protected by the substantial relationship
test should include such playbook information.” (Wolfram,
Former-Client Conflicts (1997) 10 Geo. J. Legal Ethics 677, 723,
fns. omitted).
Under California law a law firm is not subject to
disqualification because one of its attorneys possesses
information concerning an adversary’s general business practices
or litigation philosophy acquired during the attorney’s previous
relationship with the adversary. (Banning Ranch Conservancy v.
Superior Court (2011) 193 Cal. App. 4th 903, 918 [“[m]erely
knowing of a former client’s general business practices or
litigation philosophy is an insufficient basis for disqualification
based upon prior representation”].) To be protected through a
disqualification order, “‘the information acquired during the first
representation [must] be “material” to the second; that is, it must
be found to be directly at issue in, or have some critical
importance to, the second representation.’” (Fremont Indemnity,
supra, 143 Cal.App.4th at p. 69; accord, Khani v. Ford Motor Co.,
supra, 215 Cal.App.4th at pp. 921-922 [attorney’s acquisition of
general information about Ford’s policies, practices and
procedures while defending the company in lemon law cases did
not require his disqualification in a lemon law case against Ford
on behalf of the purchaser of a defective Lincoln Navigator]; see
Farris v. Fireman’s Fund Ins. Co. (2004) 119 Cal. App. 4th 671,
680; see generally ABA Model Rules Prof. Conduct, rule 1.9,
18
comment [3] [“[i]n the case of an organizational client, general
knowledge of the client’s policies and practices ordinarily will not
preclude a subsequent representation; on the other hand,
knowledge of specific facts gained in a prior representation that
are relevant to the matter in question ordinarily will preclude
such a representation”]; Rest.3d Law Governing Lawyers, § 132,
com. (d)(iii), p. 382 [only when information concerning a former
client’s policies and practices “will be directly in issue or of
unusual value in the subsequent matter will it be independently
relevant in assessing a substantial relationship”].)
The trial court’s disqualification order in this case
necessarily rests on implied findings that Richie acquired
confidential and privileged information as a result of his prior
position at O’Gara Coach that is material to his law firm’s
current representation of Wu. Yet, separating what Richie may
know simply because he participated as a nonlawyer executive in
events at the company from confidential information he possesses
based at least in part on attorney-client privileged
communications, and focusing our analysis on the latter category,
the declarations submitted by O’Gara Coach describe only classic
playbook information. Nowhere does O’Gara Coach demonstrate
the required material link between Richie’s knowledge of the
development and implementation of the company’s workplace
policies and the issues presented by Wu’s lawsuit. While O’Gara
Coach argues Richie was the primary point of contact at the
company for its outside general labor and employment counsel
regarding the handling of employee complaints, it identifies no
category of information gained by Richie as a result of those
contacts that is directly at issue in, or has some unusual value or
critical importance to, Richie Litigation’s representation of Wu.
19
Unlike the situation in Ra, Richie did not assist O’Gara Coach’s
lawyers in their investigation of Wu’s harassment and
discrimination claims. To be sure, Richie possesses potentially
relevant information about O’Gara Coach’s formal
antidiscrimination and anti-harassment policies and whether
they were properly implemented. That knowledge, however, is
based on Richie’s role at the company as a nonlawyer senior
executive. How those policies were actually developed, on the
other hand, may include information protected by O’Gara’s
attorney-client privilege; but the origins of the company’s policies,
as opposed to their enforcement or lack of enforcement, is not
material to Wu’s lawsuit.
Whether viewed as a lack of substantial evidence to
support its implied findings of fact or as an erroneous
determination of the appropriate legal standard to apply in these
unusual circumstances, the trial court’s order disqualifying
Richie Litigation and its attorneys based on Richie’s knowledge of
6
confidential and privileged information must be reversed.
6
Although, based on the evidence submitted in support of
O’Gara’s motion to disqualify, we conclude the confidential
attorney-client information Richie may possess is not material to
the issues in Wu’s lawsuit, Richie Litigation’s apparent decision
not to screen Richie from any participation in Wu’s
representation is troublesome. (See generally rule 1.10(a)(2).)
20
4. Richie’s Likely Testimony as a Percipient Witness Does
Not Justify Disqualification of Richie Litigation or Other
Attorneys at the Firm Under the Advocate-witness Rule
Whatever their other shortcomings, the declarations filed
in support of, and opposition to, the motion to disqualify fully
support the trial court’s finding that Richie will likely be called as
a percipient witness at trial: O’Gara Coach intends to call Richie
to discuss his role in the development, implementation and
enforcement of the company’s anti-harassment and anti-
discrimination policies and to describe the workplace culture at
its Beverly Hills dealership when he and Wu worked there; Wu
might call Richie to testify to Thomas O’Gara’s statements
regarding preferential treatment for white employees and
O’Gara’s frequent use of racially offensive epithets. However,
that Richie might testify at trial does not warrant
disqualification of other lawyers at Richie Litigation under the
advocate-witness rule.
Under rule 3.7(a)(3) a lawyer is prohibited from acting as
an advocate in a trial in which that lawyer is likely to be a
witness unless “the lawyer has obtained informed written
consent from the client.” That exception is applicable here; for,
as discussed, Wu submitted a declaration in the trial court
averring he had given his informed consent to Richie Litigation’s
representation of him, recognizing that Richie would likely be
called as a witness at trial. (See Maxwell v. Superior Court
(1982) 30 Cal. 3d 606, 619, fn. 9 [“the State Bar has concluded that
a fully informed client’s right to chosen counsel outweighs
potential conflict or threat to trial integrity posed by counsel’s
appearance as witness”], disapproved on another ground in People
v. Doolin (2009) 45 Cal. 4th 390, 421, fn. 22.)
21
While this exception does not necessarily preclude
disqualification of an attorney who may act as both advocate and
witness when there has been “‘a convincing demonstration of
detriment to the opponent or injury to the integrity of the judicial
process’” (Smith, Smith & Kring v. Superior Court (1997)
60 Cal. App. 4th 573, 579; see Lyle v. Superior Court (1981)
122 Cal. App. 3d 470, 482)—a finding not made by the trial court
here—rule 3.7(b) now provides a lawyer may act as advocate in a
trial in which another lawyer in the lawyer’s firm is likely to be
called as a witness unless that representation is barred by
separate ethical rules relating to a lawyer’s duties to current or
7
former clients. (See also ABA Model Rules Prof. Conduct,
rule 3.7(b) [“[a] lawyer may act as advocate in a trial in which
another lawyer in the lawyer’s firm is likely to be called as a
witness unless precluded from doing so by Rule 1.7 [‘Conflict of
Interest: Current Clients’] or Rule 1.9 [‘Duties to Former
Clients’]”].)
As to Wu, Richie Litigation’s current client, his informed
written consent eliminates any potential conflict prohibition that
7
Rule 3.7 states in full, “(a) A lawyer shall not act as an
advocate in a trial in which the lawyer is likely to be a witness
unless: [¶] (1) the lawyer’s testimony relates to an uncontested
issue or matter; [¶] (2) the lawyer’s testimony relates to the
nature and value of legal services rendered in the case; or
[¶] (3) the lawyer has obtained informed written consent from the
client. If the lawyer represents the People or a governmental
entity, the consent shall be obtained from the head of the office or
a designee of the head of the office by which the lawyer is
employed. [¶] (b) A lawyer may act as advocate in a trial in which
another lawyer in the lawyer’s firm is likely to be called as a
witness unless precluded from doing so by rule 1.7 or rule 1.9.”
22
might otherwise exist because Richie’s testimony may, in some
respects, be adverse to Wu’s interests. (See rule 1.7(b) [a lawyer
shall not, without the informed written consent from each
affected client, represent a client if there is a significant risk the
lawyer’s representation will be materially limited by the lawyer’s
responsibilities to a former client]; see also Rest.3d Law
Governing Lawyers, § 108, com. f & i, pp. 152 & 153 [other
lawyers in a testifying lawyer’s firm may serve as advocates for a
party in the proceeding, despite disqualification of one or more
firm lawyers as advocates, if the representation would not involve
a conflict of interest with the client; if testimony adverse to the
client is anticipated, the client must consent to the firm
continuing as advocate].) As to O’Gara Coach, Richie’s former
employer, but not his “former client,” as discussed, Richie’s
ethical obligations as a current member of the State Bar,
recognized in Ra, supra, 30 Cal.App.5th 1115, do not preclude
Richie Litigation’s continuing role as Wu’s counsel.
DISPOSITION
The order disqualifying Richie Litigation and its attorneys
other than Darren Richie from representing Wu is reversed. Wu
is to recover his costs on appeal.
PERLUSS, P. J.
We concur:
SEGAL, J. FEUER, J.
23