Attorney Must Be Disqualified from Representation in Opposition to a Former Client If Current Case Bears a "Substantial Relationship" to the Former Representation

The Court of Appeal for the 5th Appellate District has revisited the standards to be applied when an attorney represents the opponent of a former client and the forme client moves to disqualify the attorney. Reversing a trial court ruling that allowed the attorney to continue in the case, the appellate court determined that the lower court had not applied a correct standard in ruling on the motion to disqualify. The court remanded the case for application of the "substantial relationship" test. The court articulated that test as follows:

[T]he question whether an attorney should be disqualified in a successive representation case turns on two variables: (1) the relationship between the legal problem involved in the former representation and the legal problem involved in the current representation, and (2) the relationship between the attorney and the former client with respect to the legal problem involved in the former representation.

The decision in Jessen v. Hartford Casualty Ins. Co., (Aug. 25, 2003) Case No. F041425, can be found at these links in PDF and Word formats.

A factual summary and other comments will be found in the Continuation of this post:

Continuation

FACTS: During his employment at another firm, attorney Wilkins had represented Hartford Casualty Insurance in insruance coverage litigation. Wilkins later formed his own firm, and that firm took on the representation of one of Hartford's insureds in a suit against Hartford seeking damages for alleged breach of contract and "bad faith." Hartford moved to disqualify Wilkins' firm based on its former attorney-client relationship with Wilkins. The trial court denied the motion, relying on two earlier federal cases in which Hartford had moved unsuccessfully to disqualify the Wilkins firm. The Court of Appeal concluded [in a portion of its decision that will not be officially published] that the trial court should not have felt itself bound by the federal rulings. Because the trial court had not engaged in and analysis specific to the case before it -- and therefore had not attempted to apply the two prongs of the "substantial relationship" test -- the Court of Appeal reversed and remanded the case with instructions to the trial court to revisit the issue and to apply the appropriate standard.

COMMENTS: The Court emphasized that because the client's confidential communications in the prior representation must be protected, attorney disqualification motions must not inquire into the attorney's subjective state of mind: to do so would always risk the disclosure of the protected confidences, which is the very harm that the disqualification would be intended to avoid. Accordingly, when the conditions of the "substantial relationship" test are met, there is a conclusive presumption that the attorney possesses and can use confidential information in a manner that will impair the former client's interests.

If the relationship between the attorney and the former client is shown to have been direct -- that is, where the lawyer was personally involved in providing legal advice and services to the former client -- then it must be presumed that confidential information has passed to the attorney and there cannot be any delving into the specifics of the communications between the attorney and the former client in an effort to show that the attorney did or did not receive confidential information during the course of that relationship. As a result, disqualification will depend upon the strength of the similarities between the legal problem involved in the former representation and the legal problem involved in the current representation. This is so because a direct attorney-client relationship is inherently one during which confidential information “would normally have been imparted to the attorney by virtue of the nature of [that sort of] former representation,” and therefore it will be conclusively presumed that the attorney acquired confidential information relevant to the current representation if it is congruent with the former representation. [Citations.]

Acknowledging that the test it was applying might lead to the disqualification of attorneys who did not, in fact, possess information that might harm the former client, the Court concluded that the risk of overinclusion of attorneys in the disqualified class was outweighed by the goal of" preservation of public trust in the scrupulous administration of justice and the integrity of the bar.