DocketNumber： Supreme Court Case No. 12SA83
Citation Numbers： 296 P.3d 108, 2013 CO 8
Judges： Bender, Eid, Hobbs
Filed Date： 2/4/2013
Status： Precedential
Modified Date： 1/2/2022
delivered the Opinion of the Court.
T1 We granted this petition for original jurisdiction under C.A.R. 21 to review the trial court's order denying a law firm's motion for pro hac vice admission to represent the plaintiff where an attorney at that same law firm had previously consulted with defense counsel about the case.
1 2 This is a personal injury case against a restaurant resulting from an alleged food-borne illness. The plaintiff sought to have a small out-of-state law firm that specializes in food-borne illness claims admitted pro hac vice to aid in the preparation and presentation of the case. The defendant objected on grounds that defense counsel had previously consulted with an attorney at the out-of-state firm about the case and her trial strategy.
18 The trial court denied the out-of-state law firm's motion for pro hae vice admission, thus disqualifying the firm from representing the plaintiff. In support of its ruling, the trial court found that the consultation between defense counsel and the out-of-state firm's attorney concerned confidential information that included defense counsel's theory of the case and her trial strategy, which created a conflict under Colo. RPC 1.7(3)@). The conflict, the trial court concluded, was nonwaivable under Colo. RPC 1.7(b) because allowing the consulted attorney to represent the plaintiff would undermine the fairness of the proceedings. The trial court then imputed the conflict to the out-of-state firm under Colo. RPC 1.10 and denied the motion, thus disqualifying the firm from representing the plaintiff,
T4 On appeal to us, the plaintiff argues that Colo. RPC 1.7 applies only to situations where an attorney-client relationship is established, and that the trial court's disqualification of the out-of-state law firm was an abuse of discretion. Our review of Colo. RPC 1.7(a)(2) reveals that the rule expressly applies not only to attorney-client relationships but also to attorneys' relationships with third persons. Accordingly, we hold that the trial court did not abuse its discretion in finding (1) that the consultation between defense counsel and the out-of-state firm's attorney concerned confidential information that included defense counsel's theory of the case and her trial strategy, which created a conflict under Colo. RPC 1.7(a)(2); and (2) that the conflict is nonwaivable under Colo. RPC 1.7() because allowing the consulted attorney to represent the plaintiff would undermine the fairness of the proceedings. We further hold that the trial court did not abuse its discretion by imputing the consulted attorney's conflict to the rest of his law firm under Colo. RPC 1.10 and denying the motion, thus disqualifying the firm from representing the plaintiff. Hence, we discharge the rule and remand the case to the trial court for proceedings consistent with this opinion.
I. Facts and Procedural History
1[ 5 This case involves a child who allegedly became ill from E. coli after eating salad at the defendant restaurant. After the case was filed, defense counsel contacted lawyer Drew Falkenstein at a small law firm in Seattle, Washington that specializes in food-borne illness cases. Defense counsel and Falkenstein had been opposing counsel in a previous Colorado case and had maintained a cordial relationship. Before discussing the case with defense counsel, Falkenstein first determined that his law firm was not already
T6 In their telephone conversation and email exchange, defense counsel and Falken-stein discussed three aspects of the case. First, they talked about defense counsel's planned theory of the case, which at that time was that the child's illness had resulted from visiting a petting zoo rather than from eating salad at the restaurant. Falkenstein advised defense counsel against that theory. Second, defense counsel asked Falkenstein for advice on a trial expert, and Falkenstein recommended an expert. Falkenstein stated that the recommended expert would "work [the] file hard and well" and "may ... help to dig up documents." Third, Falkenstein ree-ommended adding a lettuce distributor as a nonparty defendant after researching E. coli outbreaks for defense counsel using his law firm's publicly accessible database and finding an E. coli outbreak at another local restaurant chain. Although defense counsel did not take Falkenstein' s advice to add that particular distributor as a nonparty, she did consider other lettuee distributors and lettuce growers as nonparty defendants instead. She abandoned her initial petting zoo strategy as Falkenstein had advised and hired the expert whom Falkenstein had recommended.
T7 Several months after the consultation between defense counsel and Falkenstein, plaintiff's counsel contacted another attorney at Falkenstein's law firm to discuss the case. The record is unclear whether that attorney checked to see if Falkenstein or anyone else at the firm had been involved in the case. Soon after, it was agreed that the out-of-state law firm would join plaintiff's counsel in the case, and this firm filed a motion for admission pro hac vice. The defendant objected to the firm's admission because of defense counsel's earlier consultation and email exchange with Falkenstein, an associate in this firm. In support of the defendant's objection to the motion, defense counsel submitted an affidavit stating that she had disclosed "confidential facts about the case" to Falkenstein. Nothing in the record indicates that defense counsel had consulted Falken-stein for the purpose of disqualifying him or his firm from later representing the plaintiff.
{8 In its ruling the trial court reasoned that when defense counsel sought advice from Falkenstein about the case, she had divulged confidential information that she would not have shared with opposing counsel, including discussing her theory of the case, asking for a recommendation about an expert witness, and requesting research assistance to identify potential nonparty defendants. The trial court concluded that because Falk-enstein had "recommended a particular course or theory for [the] [dlefense counsel, researched and provided [dlefense [clounsel with the information that now forms the basis for their trial strategy and also provide[d] them with an expert for whose credibility they vouch for in writing," Falkenstein was placed in a "position of divided loyalties" that would compromise the fairness of the proceedings if he were allowed to represent the plaintiff. As such, the trial court concluded that Falkenstein' s consultation with defense counsel created a nonwaivable conflict of interest that would prohibit him from representing the plaintiff under Colo. RPC 1.7. Imputing the conflict to the out-of-state firm under Colo. RPC 1.10, the trial court denied the firm's motion for pro hae viee admission and disqualified the firm from representing the plaintiff. Plaintiff then petitioned this court under C.AR. 21 to review the trial court's order. We granted the petition and now discharge the rule.
II. Preliminary Matters
Original Jurisdiction
19 Before we begin our review of the trial court's order, we first address whether an original proceeding is the proper method to review the trial court order challenged by the plaintiff. This court's choice to exercise its original jurisdiction is "entirely within its discretion." Vinton v. Virzt, 2012 CO 10, 19, 269 P.3d 1242. "This court may exercise original jurisdiction under C.A.R. 21 where a trial court proceeds without or in excess of its jurisdiction or to review a seri
110 Here, if the trial court's ruling disqualifying the out-of-state law firm from representing the plaintiff were overturned on appeal after disposition of the case, the parties would have to incur the significant and additional expense of a retrial with the full participation of the disqualified firm. We therefore conclude that ordinary appellate remedies are inadequate, and it is appropriate to exercise our original jurisdiction and proceed with our analysis.
Review of Claimed Ethical Violation
T 11 Next, we address whether it is proper for this court to consider the alleged conflict involving Falkenstein and his law firm under the Colorado Rules of Professional Conduct when the law firm's potential client, the plaintiff, has not raised the issue. Generally, courts do not consider claimed violations of ethics rules raised by nonelients. Mercantile Adjustment Bureau, L.L.C. v. Flood, 2012 CO 838, 15, 278 P.3d 348. However, "where the Rules of Professional Conduct become intertwined with litigation and a potential ethical violation threatens to prejudice the fairness of the proceedings," a court may consider an ethical violation within the context of the litigation. Id. at TMM16-17 (holding that defendant had grounds to raise the potential ethical violations of the plaintiffs attorney where defendant would have had to pay attorney fees incurred as part of the agreement alleged to be unethical); see also In re Appeal of Infotechnology, Inc., 582 A.2d 215, 219 (Del.1990) (a court may consider a violation of the ethics rules when the moving party "proves a personal detriment or misconduct which taints the fairness of the proceeding"). Whether there is a conflict under Colo. RPC 1.7 that would prohibit the firm from representing the plaintiff and would impact the fairness of the proceedings in this case is a matter intertwined with the litigation and is therefore proper for us to examine.
Standard of Review
112 The plaintiff asks us to review the trial court's order denying pro hac vice admission of the out-of-state law firm and disqualifying the law firm from representing the plaintiff.
118 By itself, a violation of the Colorado Rules of Professional Conduct may or may not be sufficient grounds for disqualification. Taylor v. Grogan, 900 P.2d 60, 63 (Colo.1995). "The critical question is whether the litigation can be conducted in fairness to all parties." Id. The Colorado Rules of Professional Conduct concerning conflicts of interest ensure fairness to the parties and protect the integrity of the process. In addition, they serve as guidelines to a court deciding disqualification. Estate of Myers, 130 P.3d at 1025-26. Ultimately, it is within the exclusive province of the trial court to determine whether a violation of the rules regarding conflict harms the fairness of the proceedings and warrants disqualification. Id.; Taylor, 900 P.2d at 63. This "inherent power to disqualify counsel may be exercised only when necessary to avoid unfairness to a party or protect the integrity of the proceedings, and not to discipline or punish." Estate of Myers, 130 P.3d at 1026.
114 When a trial court disqualifies counsel, we review the basis for disqualification under an abuse of discretion standard.
III Analysis
[ 15 In support of this appeal, the plaintiff makes three arguments. First, the plaintiff contends that because the Colorado Rules of Professional Conduct apply only to attorney-client relationships, and because no attorney-client relationship was formed between Falk-enstein and defense counsel or between Falk-enstein and the defendant, the trial court improperly applied Colo. RPC 1.7 in this case. Second, the plaintiff argues that even if Colo. RPC 1.7 does apply, the consultation between defense counsel and Falkenstein created no conflict because the consultation did not include confidential information and would not materially limit Falkenstein' s future ability to represent the plaintiff. Third, the plaintiff argues that even if there is a conflict, the conflict is waivable, and that irrespective of waivability, no conflict should be imputed to Falkenstein' s law firm.
{16 In considering the plaintiffs arguments, we first discuss whether Colo. RPC 1.7 applies to an attorney-client relationship and conclude that it does. We then determine whether the trial court abused its discretion in finding that the consultation here created a conflict under Colo. RPC 1.7 on grounds that defense counsel divulged confidential information to Falkenstein, such as her theory of the case and her trial strategy, and conclude that it did not. We last examine whether the trial court abused its discretion in determining that the conflict was not waivable and then imputing the conflict to the out-of-state law firm and disqualifying the firm. Again, we conclude that it did not.
Application of Colo. RPC 1.7
$17 The plaintiff first argues that Colo. RPC 1.7 does not apply in the absence of an attorney-client relationship. However, Colo. RPC 1.7(a) states in pertinent part that a lawyer shall not represent a client if there is a significant risk that the lawyer's representation could be materially limited by the lawyer's responsibilities to another client, former client, or third person:
*115 Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest, A concurrent conflict of interest exists if:
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(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
Colo. RPC 1.7(a) (emphasis added). Thus, Colo. RPC 1.7 expressly applies not only to attorney-client relationships but also to attorneys' relationships with third persons. The comments to the rule reflect this point: "Concurrent conflicts of interest can arise from the lawyer's responsibilities to another client, a former client or a third person." Colo. RPC 1.7, emt. 1 (emphasis added); id. emt. 9 ("[A] lawyer's duties of loyalty and independence may be materially limited by ... the lawyer's responsibilities to other persons." added).
118 Although the Colorado Rules of Professional Conduct do not define the term "third person," there is no limitation on Colo. RPC 1.7's application to situations in which one lawyer consults another lawyer about a client matter. The American Bar Association (ABA) has considered this very situation.
T19 ABA Opinion 98-411 is persuasive and applicable where, as here, one lawyer has consulted another lawyer and has revealed confidential information about her case, including her theory of the case and trial strategy, that could materially limit the consulted attorney's ability to represent the opposing party in this case due to the consulted attorney's potential responsibility to keep the information confidential. Because Colo. RPC 1.7 applies expressly to third persons and because those third persons can be lawyers, we disagree with the plaintiffs argument and conclude that the trial court did not err in applying Colo. RPC 1.7 to this case.
Falkenstein's Responsibilities to Defense Counsel
T 20 The plaintiff next contends that, even if Colo. RPC 1.7 applies here, the consultation between defense counsel and Falken-stein created no conflict under that rule.
121 A conflict occurs under Colo. RPC 1.7(a)(2) when a lawyer's responsibilities to another person create a significant risk that the lawyer will be materially limited in his representation of a client. When a lawyer learns confidential information from another, the lawyer's knowledge of the information creates a significant risk of materially limiting the lawyer's representation of his own present or future client. See ABA Op. 98-411 at 7; see also Mitchell v. Wilmore, 981 P.2d 172, 173 (Colo.1999) (hold
€22 Conversely, information that is "mere[ly] technical" or that is "routinely discoverable" does not meet a party's burden to show that confidential information was exchanged. Mitchell, 981 P.2d at 176; Nikkal Indus., Ltd. v. Salton, Inc., 689 F.Supp. 187, 191-92 (S.D.N.Y.1988) (information on market research was nothing more than technical information exchanged in an "employment style interview"); Palmer v. Ozbek, 144 F.R.D. 66, 67-68 (D.Md.1992) (medical records that would have been revealed through discovery did not constitute confidential information where only the records, not litigation strategy, were exchanged). The plaintiff contends that no conflict was created here, arguing that the exchange of information between defense counsel and Falkenstein was not confidential but rather wholly technical or discoverable, and the exchange would not limit representation of the plaintiff, For instance, the plaintiff argues that defense counsel's theory of the case would have been disclosed during discovery. The plaintiff further argues that any research leading to the identities of potential nonparty defendants was a technical matter that anyone could have located through the out-of-state law firm's publicly accessible database, and, in any event, the names of the other nonparty defendants are required to be disclosed. The plaintiff also contends that the defendant's choice of an expert witness based on Falken-stein' s recommendation in no way undermines the fairness of the proceedings because the plaintiff believes her counsel can still effectively cross-examine the expert.
123 The trial court disagreed with the plaintiff's arguments, finding that defense counsel altered her theory of the case and shaped her trial strategy based on Falk-enstein' s suggestions. First, the trial court found that defense counsel did not pursue her original theory that the child's illness was caused by a visit to a petting 200, but instead sought to determine whether another outbreak made the child ill. Second, the trial court found that defense counsel chose the expert witness Falkenstein recommended. Last, the trial court found that Falkenstein conducted research for defense counsel to identify potential nonparty defendants who were other restaurants, lettuce distributors, and lettuce growers. In short, defense counsel confided in Falkenstein in a way that gave him insight into the way she approached this case, and he provided her with feedback that caused her to change her approach. Despite plaintiff's argument that Falkenstein does not remember the specifics of the consultation, Falkenstein' s affidavit to the court contradicted that assertion and shows that he recalled defense counsel's original planned theory of defense. Although the plaintiff argued that the defendant could be prevented from mentioning that Falkenstein recommended the defense expert witness, the trial court ruled that it would not be possible for Falkenstein to cross-examine the expert without the jury hearing about his recommendation.
T 24 The trial court reasoned that because Falkenstein had a hand in defense counsel's theory of the case and her trial strategy, his
125 Given the evidence before the trial court and the nature of its findings as being grounded in that evidence, we hold that the trial court was not manifestly arbitrary, unreasonable, or unfair, and therefore did not abuse its discretion in finding that there was a conflict under Colo. RPC 1.7(a).
Waiver of the Conflict and Imputation to the Firm
T 26 Last, we examine the plaintiff's arguments (1) that even if there is a conflict, it is waivable by the plaintiff under Colo. RPC 1.7(b); and (2) that irrespective of whether the conflict is waivable, the trial court abused its discretion when it imputed the conflict to the small law firm. The plaintiff represents that she would waive any conflict in order to allow continued representation by the out-of-state law firm. Although the plaintiff has not yet made a formal waiver, the record reveals that the plaintiff would waive any conflict and we accept this representation and turn to analyze these issues.
127 Even if a conflict exists under Colo. RPC 1.7(a), the lawyer may continue to represent the client if the lawyer "reasonably believes that the lawyer will be able to provide competent and diligent representation" to his client and if the client waives the conflict. Colo. RPC 1.7(b)(1). Although Colo. RPC 1.7(b) permits conflicts under the rule to be waived, the trial court must still decide whether such waiver would impact the fairness of the proceedings. As such and in order to protect the integrity of the proceedings, it is within the trial court's power to disqualify counsel, even if the party is willing to waive the conflict. See Estate of Myers, 180 P.3d at 1026. "[Clourts have the inherent power to ensure both the reality and appearance of integrity and fairness in proceedings before them." Id. at 1025. Trial courts balance the need to protect the integrity of the trial with the countervailing importance of the party's continued representation by counsel of choice when deciding whether to disqualify counsel even in the presence of a valid waiver. Id.; Fognam, 115 P.3d at 1272. The critical question that governs whether disqualification is necessary is whether the litigation can be conducted in fairness to all parties. Estate of Myers, 130 P.3d at 1025; Harlan, 54 P.3d at 876. Here, we look to the Colorado Rules of Professional Conduct to review whether the trial court abused its discretion when it ruled that the conflict under Colo. RPC 1.7(a) was nonwaivable and imputed Falkenstein' s conflict to the entire firm because otherwise the proceedings would be unfair.
128 Colo, RPC 1.10 prohibits lawyers associated in the same firm from representing a client if any one of the lawyers is prohibited from doing so by a conflict: "While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9." Colo. RPC 1.10(a). "[A] firm of lawyers is essentially one lawyer" for purposes of the rules governing client conflicts. Colo. RPC 1.10 emt. 2. "The treatment of attorneys in a firm as one attorney for purposes of loyalty and confidentiality is based on the presumption that those attorneys have access to confidential information about each other's clients." People ex rel. Peters v. Dist. Court, 951 P.2d 926, 980 (Colo.1998).
129 The trial court concluded that the consultation between Falkenstein and defense counsel resulted in a nonwaivable conflict that would compromise the fairness of
130 Similarly, the trial court imputed the conflict to the rest of Falkenstein' s law firm, following the same reasoning. The trial court ruled that under Colo. RPC 1.10 and Colorado caselaw, every lawyer at the small out-of-state firm is presumed to have access to the confidential information defense counsel divulged to Falkenstein. The law firm has a single office, specializes in one practice area, and has a small membership. In addition, we note there is no indication in the record that defense counsel contacted Falkenstein as a trial tactic in an effort purposely to disqualify the out-of-state law firm.
IV. Conclusion
{31 For the reasons stated above, we discharge the rule and remand this case to the trial court for proceedings consistent with this opinion.
. The trial court's denial of the motion for pro hac vice admission resulted in the law firm's nonparticipation in the case and is effectively the same as a disqualification. We use this characterization of the trial court's ruling interchangeably.
. See also Hempstead Video, Inc. v. Incorporated Village of Valley Stream, 409 F.3d 127, 132 (2d Cir.2005) (the ethical rules provide guidelines, but courts look to the fairness of the underlying trial when deciding disqualification); Schuff v. A.T. Klemens & Son, 2000 MT 357, 135, 303
. The result of a trial court's denial of a motion seeking pro hac vice admission is effectively the same as a disqualification, and our caselaw sets forth the standard of review for a disqualification as abuse of discretion. Harlan, 54 P.3d at 877. While Colorado has not addressed the standard of review for a denial of a motion for admission, other jurisdictions review a trial court's denial of a motion for pro hac vice admission under an abuse of discretion standard. See People of State of N.Y. v. Epton, 248 F.Supp. 276, 277 (S.D.N.Y.1965) ("In New York the admission of out-of-state attorneys to practice in a given case is left to the discretion of any court of record."); Miyashiro v. Roehrig, Roehrig, Wilson & Hara, 122 Hawai'i 461, 228 P.3d 341, 354 (Haw.Ct.App.2010) ('This court ... reviews the denial or limitation of pro hac vice status for an abuse of discretion."); PCG Trading, LLC v. Seyfarth Shaw, LLP, 460 Mass. 265, 951 N.E.2d 315, 318 (2011) (" [The degree of discretion accorded a judge in deciding whether to admit an out-of-State attorney is broad.").
. Although ABA Opinion 98-411 analyzes Model Rule of Professional Conduct 1.7, not Colo. RPC 1.7, the two rules are identical.
. A lawyer is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation. Colo. RPC 1.6 emt. 5. Appropriate disclosures can include disclosure of confidential information when the lawyer reasonably believes the disclosure will further her representation of the client because the lawyer will gain expertise that will help her present the client's case. ABA Op. 98-411 at 3. Consultations between lawyers are important for testing ideas about complex cases or helping lawyers gather the information necessary to competently represent a client. See ABA Op. 98-411 at 2; Colo. RPC 1.1 emt 2 ("Competent representation .. can be provided through the association of a lawyer of established competence in the field in question."). However, such consultations may create "unanticipated consequences" for the consulting lawyer and the consulted lawyer, such as conflicts of interest. ABA Op. 98-411 at 2.
. In Mitchell, both parties consulted the same expert on traffic accidents. Mitchell, 981 P.2d at 173-79. Here, both plaintiff and defendant consulted the same law firm with expertise in food-borne illness cases. Mitchell is therefore analagous because the circumstances of the lawyer-lawyer consultation here are similar to those of the lawyer-expert consultation in Mitchell. Mitchell recognizes that experts and attorneys play different roles in litigation and that those roles justify a heightened standard for attorneys. Id. at 175.
. Consulting with a lawyer likely to represent an adverse party for the deliberate purpose of disqualifying a potential adversary would violate the Rules of Professional Conduct, which prohibit conduct involving dishonesty and fraud. ABA Op. 98-411 at 5 n. 8.