Tuesday, June 26, 2012

California Decision Challenges Ethical Screening

BNA provides an extensive summary of: Beltran v. Avon Products Inc., C.D. Cal., No. 2:12-cv-02502-CJC(ANx), 6/1/12, which it aptly summarizes: "Use of Ethics Screen Does Not Prevent Imputation of Conflict to Lawyer’s New Firm" --
  • "Key Holding: Screening measures do not prevent a firm's imputed disqualification under California law for a conflict arising from a lawyer's prior practice at another firm."
  • "Holding indicates that courts in California continue to reach varying conclusions on whether screening can prevent imputation of lateral conflicts... U.S. District Court for the Central District of California June 1 ejected a law firm--and its co-counsel--from representing the plaintiff in a putative class action because a member of the firm was privy to the defendant's confidential information in his earlier work at another firm."
  • "Applying California law, Judge Cormac J. Carney ruled that an ethics screen does not prevent a firm's imputed disqualification when a lawyer in the firm has key confidential information from work at another firm."
Conflicts expert Bill Freivogel weighs in:
  • "First, in rejecting a screen, the court ignored the recent history of screening in California, including Kirk and Openwave Systems.  Why didn't the court discuss those cases?"
  • "Second, the court disqualified co-counsel without a finding that the originally disqualified lawyer shared confidential information with co-counsel.  The majority rule requires such a finding before co-counsel is disqualified."
  • " Next, the court found that the lateral lawyer's billing a total of some 300 hours over several years on several diverse matters (not this one) created way too much playbook information to bring to his new firm."
  • "Last, the court held that the disqualified firms were too small for a screen to work.  We question the notion that a screen cannot work in a small firm while it can work in a 1,000-lawyer firm.  It seems to us that an argument could be made that a potential breach of a screen may be more easily detected (and prevented) in a smaller firm than in a huge global one."

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