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October 30, 2008

In Re Charlisse C. (2008) 45 Cal.4th 145

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The Supreme Court holds that in the context of a public law office, a flexible case-by-case inquiry into whether client confidences are protected will apply to disqualification motions in cases of successive representation. 

 The Los Angeles County Department of Children and Family Services (DCFS) filed a petition alleging that six-day-old Charlisse came within the juvenile court’s jurisdiction because the condition of her 19-year-old mother Shadonna’s mental and physical health interfered with her ability to care for Charlisse and Charlisse’s sister and they had been neglected by Shadonna.  The juvenile court appointed a Children’s Law Center (CLC) attorney to represent Charlisse.

CLC is a publicly funded, nonprofit legal services organization that provides statutorily required legal representation to parents and children in the dependency court.  It was originally structured to enable it to represent as many as three separate parties in a dependency proceeding, even if they had conflicting interests.  It had three separate offices of comparable quality with separate administration.  Each office maintained separate case files; staff attorneys assigned to one office could not have access to the case files of another office; attorneys could not be transferred between offices; and staff attorneys could be disciplined or promoted only upon the recommendation of that attorney’s office administrator.  Precedent approved this structure for representing separate parties with potentially adverse interests in a single dependency proceeding.

The structure later changed such that there were three litigation units: a “core” unit, known as Unit 1, and two “conflict” units, known as Units 2 and 3.
                                                                                                                                                                                                                                      The CLC attorney the juvenile court appointed to represent Charlisse was with Unit 3.  Shadonna objected because she was a former client of Unit 1.  In her disqualification motion Shadonna argued that she was represented by CLC’s Unit 1 as both a dependent child and as an adult parent.  Shadonna claimed that CLC’s prior representation of her substantially related to CLC’s current representation of Charlisse.  She asserted that the current structure of CLC did not maintain ethical walls among the three units, and that the authority of CLC’s administration in staffing decisions created a conflict of interest for every client with an adverse interest to another client within the organization.

Former CLC employees submitted declarations stating that the new structure under a particular executive director violated the ethical walls separating CLC’s units and provided specific factual examples.  Shadonna submitted a copy of the new structure’s operating procedures.  CLC argued that Shadonna’s evidentiary showing was insufficient to warrant disqualification and that CLC’s structure and operating procedures closely complied with the standards set forth in precedent.
The maligned executive director stated that CLC strictly adhered to its Revised Operating Procedures and enforced existing ethical walls, and denied many of the facts asserted by the former employees.  The executive director stated that the current employment practices were in place under the prior structure and had been approved in precedent.  The executive director had authority over promoting, terminating, or disciplining CLC lawyers or staff members; the budget; hiring; and assignment of attorneys to Units.  Secretaries moved between Units as they always had, but were advised of the need for confidentiality.  Current employee declarations also denied the factual allegations concerning ethical breaches asserted by the former employees.

The Supreme Court reviewed the juvenile court’s ruling granting disqualification.  Although finding no specific instances of confidentiality breaches, the juvenile court determined that the evidence submitted by Shadonna was of more convincing force and that the new structure led to a gradual erosion of ethical walls.
Conflicts of interest commonly arise in two factual contexts: (1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client of the attorney; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests.

The disqualification standards developed for the first scenario focus on the former client’s interest in ensuring the permanent confidentiality of matters disclosed to the attorney in the course of the prior representation.  In the second scenario the primary value at stake is the attorney’s duty of loyalty, rather than confidentiality.  Because a conflict involving an attorney’s duty of loyalty is the most egregious kind of conflict, the standards are more stringent than those that apply in successive representation cases and, with limited exceptions, disqualification is automatic.  The Supreme Court concluded that the juvenile court applied a more stringent standard than required in cases of successive representation.

While the new structure might not withstand a challenge in cases of simultaneous representation, the more lenient standards of successive representation may have been met.

In cases of successive representation the correct legal standard requires disqualification if a former client demonstrates a substantial relationship between the subjects of the antecedent and current representations.  This can extend to an entire law firm through the rule of vicarious disqualification.  CLC conceded the substantial relationship between the former and current representations.

However, there are court-created limitations to the vicarious disqualification rule, which itself was judicially created.  In the context of public law firms, courts decline to apply an automatic and inflexible rule of vicarious disqualification.  Rather, the question is whether the public law office has adequately protected, and will continue to adequately protect, the former client’s confidences through appropriate screening measures or structural safeguards.

The different standard is justified because public sector lawyers do not have a financial interest their matters and have little or no incentive to breach client confidences.  They do not recruit clients or accept fees and thus there is no financial incentive to favor one client over another.  In the public sector vicarious disqualification imposes different burdens on the affected public entities, lawyers and clients, including the difficulty public law offices would have recruiting competent lawyers if public employment could preclude an attorney’s future private employment.  Disqualification increases costs for public entities and litigation decisions may be driven by financial considerations rather than by the public interest.  Public law offices may have a special area of expertise.  Courts have more readily accepted the use of screening procedures or ethical walls as an alternative to vicarious disqualification in cases involving public law offices.

Screening is not always sufficient to avoid vicarious disqualification of the entire office.  Where an attorney representing a criminal defendant became the assistant district attorney in a county district attorney’s office, disqualification was proper.  The attorney’s job duties created an appearance of possible impropriety that rendered the trial court’s decision reasonable because the attorney attended weekly meetings of the office’s executive staff, which meant he could, “quite innocently” participate in a decision that could affect the prosecution of his former clients and his membership on the office’s promotions committee might impact how attorneys in the office handled cases against his former clients.  Vicarious disqualification is often appropriate when the affected attorney is the head of the entire public office.
In the public sector context a trial court should make a factual inquiry into the supervisor’s actual duties with respect to those attorneys who will be ethically screened, and responsibility for setting policies that might bear on the subordinate attorneys’ handling of the litigation.  In addition, the trial court should consider whether public awareness of the case, or the conflicted attorney’s role in the litigation, or another circumstance, is likely to cast doubt on the integrity of the governmental law office’s continued participation in the matter.

In the instant case, the juvenile court should have determined whether CLC, a publicly funded non profit, had adequately protected, and will continue to adequately protect, Shadonna’s confidences.  The evidentiary burden is on CLC to show that, through timely, appropriate, and effective screening measures and/or structural safeguards, the confidential information acquired during Unit 1’s prior representation of Shadonna has been, and will be, adequately protected during Unit 3’s proposed representation of Charlisse.  This burden was appropriately on CLC because it has unique access to the relevant information.  In general, the attorney resisting disqualification has the burden of showing effective screening of employee with confidential information from former employment.

The matter was remanded to the juvenile court for rehearing of the disqualification motion based on the standards announced.

Comment: The Supreme Court, aware of the practicalities imposed by limited resources, continues to apply a more flexible disqualification standard in the context of public law offices.

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