As district judges always tend to presume “there is plenty of time for new counsel to get up to speed” between now and the June 2009 trial. So, to speed the plow, the Judge granted thirty days for new counsel to enter its appearance.
After some 350 docket entries, a firm that was representing certain opt-out plaintiffs in the DRAM antitrust case was disqualified in Unisys Corp. v. Hynix Semiconductor, Inc., 3:06-CV-2915 (N.D. Cal. 12/18/2008). The D.C. firm had merged in a California firm in Oct. 2008, which brought in as a partner an attorney who had represented an executive of one defendant in the DOJ investigation of the DRAM market.Â
The arguments against disqualification were that no attorney-client relation existed between the attorney and the corporate defendant, that an “ethical wall” was in place, and that a waiver provision in an earlier joint-defense agreement trumped prospective conflicts.Â
Â The ruling was that California requires disqualification when an attorney possesses confidential information, even if that was accessed without having an attorney-client relation with the current adverse litigant. Where the litigant has a reasonable expectation of continued confidentiality, and where the attorney has information with the “requisite substantial relationship” between the prior and current representations – based on similitude of facts, legal issues, and whether attorney was “exposed” to the litigant’s strategies – then a conflict is presumed and disqualification is mandatory.Â That disqualifying knowledge by one attorney “extends vicariously to the entire” law firm.Â
The contentions about the efficacy of the “ethical wall” failed because “California rejects ethical walls,” even though the “law in California might well be headed in that direction.” Finally, while a joint defense agreement can waive prospective, even undescribed, conflicts, the waiver must be “fully informed.” Here, the JDA did not effectively obtain the company’s consent to the specific conflict situation that had arisen.