Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County Nos. 05CC09331, 05CC09333, 05CC09332, Corey S. Cramin, Judge.
Bander Law Firm, Joel R. Bander, and Cathe L. Caraway-Howard for Objector and Appellant, Bander Law Firm.
Law Offices of C. Joe Sayas, Jr., C. Joe Sayas, Jr., and Matthew B. Hayes for Defendants and Respondents, Taleenvi, Inc., Le Vien Homes, Inc., Taliavi Enterprises, Inc., Le Vien-Hall Homes LLC, and Vivien Fermin.
Arkin & Glovsky, Sharon J. Arkin and Scott C. Glovsky for Moving Parties and Respondents, Rey Inarin, Dolores Juguan, Lanie Tubang, George Lanuzga, Edwin T. Dela Cruz, Teresita Vallo, Julius Ortaliz, Divinia De Leon, Melicio Salazar, Alez De Guzman, and Twinkle De Guzman.
OPINION
IKOLA, J.
The Bander Law Firm (the Bander firm) appeals from the court’s order disqualifying it as plaintiffs’ counsel in three consolidated cases for unpaid wages brought by plaintiff employees against defendant employers. (Meehan v. Hopps (1955) 45 Cal.2d 213, 216 [order disqualifying counsel is appealable].) The court’s order granted motions brought by defendants and by former clients of the Bander firm to disqualify the Bander firm as plaintiffs’ counsel based on the Bander firm’s breach of the duties of loyalty and confidentiality. We affirm the court’s order disqualifying the Bander firm from continuing to represent plaintiffs in these consolidated actions.
FACTS
In January 2005, the Bander firm filed eight cases in the Los Angeles County Superior Court on behalf of 37 plaintiff employees. The parties to this appeal agree that all eight complaints made similar allegations and claims against the same defendants and that the eight cases were deemed related in January or February. Defendants operated “several facilities throughout Southern California . . . provid[ing] shelter and care for developmentally disabled clients” and employed “numerous caregivers to run” the facilities. Plaintiffs worked (or had formerly worked) at various of these facilities; at least some plaintiffs were live-in employees. Plaintiffs alleged they were current and former “employees of defendants hired to work as caregivers” providing “everyday monitoring and care giving” for “adults with special needs.” Plaintiffs sought payment of overtime compensation, minimum wages and penalties.
All dates refer to 2005 unless otherwise stated.
On various dates between December 2004 and February 2005, eleven employees advised the Bander firm they “no longer wished to pursue any claims against [their] employer.” (Herein we refer to these 11 employees as Bander’s former clients.) These employees had settled their claims with defendants, were “paid back wages,” and continued working for defendants. Six of these employees retracted their claims against defendants after the complaints were filed; five did so before such filing.
On March 28, Joel Bander of the Bander firm refused to sign substitution of attorney forms for 10 of these 11 employees who wished “to stop [him] from representing [them].” Bander’s stated reason for refusing to sign the forms was that he “did not accept at face value the assertions of some of [Bander’s former clients] that their decisions were of their own free will” and he therefore “refused to sign a substitution or dismiss their cases unless they could, individually, persuade [him] of the soundness of their decision.”
At some point, the Bander firm noticed the depositions of at least 10 of Bander’s former clients and sent at least six of them a March 17 letter stating the employee could “be subject to ‘monetary penalties, and even a possible contempt citation’” if he or she did not appear for the taking of the deposition and “‘could be prosecuted for perjury’” for failing to tell the truth. The Bander firm also noticed the depositions of two immigration attorneys and demanded they produce all “application[s] for any immigration benefit” for 41 individuals, including Bander’s former clients. The Bander firm sought these depositions and immigration records for the purpose of proving defendants “had caused [Bander’s former clients] to retract their claims through intimidation and retaliation.”
Despite the apparent March 17 date of the Bander firm’s letters to the six employees, the record does not reflect the date the employees’ depositions were first noticed. On April 12, the Bander firm noticed continuances of the depositions. The parties to this appeal refer to April 12 as the date the depositions were noticed.
On April 20, Scott Glovsky, new counsel for Bander’s former clients, advised the Bander firm that Bander’s former clients did not wish to have their immigration documents disclosed to anyone and did not want to be deposed since they had shared privileged information with the Bander firm while represented by the firm. On April 22, Joel Bander replied: “Regardless of whether these individuals want to have their depositions taken or not is of little consequence to me. . . . They are witnesses in this case on a multitude of issues.” In an April 22 letter to Glovsky and defense counsel, Joel Bander explained that the Bander firm had served subpoenas on the immigration attorneys in order to obtain information “relevant to prove that defendants have a pattern or practice of offering immigration benefits, and threatening to withhold them, in violation of the Labor Code, to force or cajole employees to withdraw or not make wage claims.” Bander further stated that “a number of employees are H1b beneficiaries of defendants but are not working at those positions or at those rates. . . . Moreover, these employees have been lead [sic] to believe that they are in status, and that they are actually receiving an immigration benefit from defendants when in fact they are receiving an immigration detriment. Whenever they apply for a new immigration benefit to Homeland Security it will be discovered that they are not working in the position or rate of pay of their visa application. The new visa will be denied, and the beneficiary will be put into removal proceedings for failing to maintain status.” Glovsky replied to Bander that Bander’s letter acknowledged that the Bander firm sought “documents that can potentially jeopardize your former clients’ immigration status and otherwise cause your former clients serious damage.”
On April 26, Glovsky was substituted in as new counsel for Bander’s former clients, after Joel Bander finally cooperated by signing the necessary forms. The next day the six employees who had retracted their claims against defendants after the filing of the complaints (and who were therefore plaintiffs in the filed cases) dismissed those claims.
On April 27, the Bander firm amended the complaints by adding a claim for defendants’ alleged violation of Labor Code section 206.5. The plaintiffs alleged defendants acted as their “employer-sponsors for immigration purposes,” “threatened to or actually withdr[ew] their sponsorship . . . to force their employees to retract their wage claims against defendants,” and “sought to require certain of their employees, including [plaintiffs] to execute releases of their claims for wages due without payment of said wages . . . .” The Bander firm subsequently prepared second amended complaints on June 17 replacing the Labor Code section 206.5 cause of action with claims for violation of Labor Code section 98.6 based on alleged intimidation and blacklisting, as well as claims for fraudulent inducement of contract and conspiracy against defendants and an immigration lawyer and his paralegal. The fraudulent inducement of contract claim alleged one of the individual defendants promised to sponsor immigration petitions or to otherwise assist Bander’s former clients to obtain legal immigration status in the United States in exchange for Bander’s former clients’ retracting their wage claims and dismissing their lawsuits, and also alleged that this defendant knew “she could not demonstrate the financial wherewithal required to support the petitions she promised to file for the Plaintiffs since prior petitions had been denied for that reason.”
Labor Code section 206.5 provides: “No employer shall require the execution of any release of any claim . . . on account of wages due . . . unless payment of such wages has been made. Any release required or executed in violation of . . . this section shall be null and void as between the employer and the employee and the violation of the provisions of this section shall be a misdemeanor.”
Labor Code section 98.6, subdivision (a) prohibits an employer from discharging or discriminating against an employee because the employee filed a bona fide claim or instituted a proceeding relating to his or her rights. Third amended complaints containing the same causes of action were prepared on December 9. The record contains no evidence of the actual date of filing of any of the amended complaints.
On May 10, Bander’s former clients moved for a protective order “to prohibit plaintiffs’ counsel from damaging [them] by deposing them and their immigration counsel.” In opposition, Joel Bander filed a declaration, declaring: “It is not my intention to depose my former clients about our attorney-client privileged communications. I would never divulge privileged attorney client communications unless waived, authorized or compelled to do so, i.e. crime-fraud exception. I certainly would not ask a question such as ‘didn’t you tell me that . . . .’ in a deposition or other setting. [¶] My confidential communications with my former clients are no impediment to deposing those individuals. If that were the case, then I could never ask a question in my own client’s deposition or at trial once the deposing attorney has completed his examination. In addition, the issues that plaintiffs seek discovery about do not require knowledge of any confidential communications with my clients. The fact is that the pattern of intimidation that I have described herein is not unique in this case and I regularly encounter it in wage and hour cases involving non-U.S. citizens or non-Legal Permanent Residents.”
At the hearing on the motion on June 23, Bander argued before the court: “I have a responsibility to keep my confidential communications confidential. There is nothing out there that shows that I’m going to go and breach that. The rules are there to protect these people.” The Los Angeles County Superior Court denied the motion of Bander’s former clients for a protective order, saying: “[The Bander firm] can proceed on the proposed depositions. Again, I just don’t think there is enough in here for me to grant a protective order. Almost, but not quite.” The court also noted the discovery statutes are very liberal and “just because information or evidence is discoverable does not necessarily mean that it is admissible.”
The court also denied defendants’ motion to quash the subpoenas issued by plaintiffs for immigration files.
The next day the Bander firm deposed two of Bander’s former clients, Julius Ortaliz and Dolores Juguan. At the outset of Ortaliz’s deposition, Glovsky stated for the record his client’s position that the Bander firm was deposing Ortaliz in violation of the firm’s “ethical duties of loyalty and confidentiality.”
During the Ortaliz deposition, Cathe Caraway-Howard of the Bander firm asked Ortaliz, over Glovsky’s objection, questions related to Ortaliz’s immigration status, eliciting information that: (1) Defendants had filed on Ortaliz’s behalf an H1B immigration petition for the job position of computer programmer; (2) Ortaliz has a degree in computer programming; and (3) Ortaliz has never worked as a computer programmer for defendants although he sometimes performs practical tasks like fixing the internet.
During another exchange, Caraway-Howard asked Ortaliz the dollar amount of his unpaid wage claim in his dismissed lawsuit. After some disagreement between the lawyers as to whether that figure ($40,000) represented Ortaliz’s own estimate of wages owed him, as opposed to simply a number stated in the complaint prepared by the Bander firm, Caraway-Howard asked Ortaliz, “Sir, is it your estimate that your claim was $40,000 or so,” to which Ortaliz replied, “The last time Bander Law Firm gave me letter, I think it’s $40,000 plus.” Caraway-Howard then asked Ortaliz whether he had doubted the accuracy of the estimate in the letter. When Glovsky pointed out that Caraway-Howard had just asked Ortaliz about “attorney-client privilege[d] information from [the Bander firm],” Caraway-Howard replied, “He brought it up.” “I let him give his full answer. I didn’t open that door. Okay? You were supposed to have prepared your client to avoid opening doors. If he’s going to step in it, that’s not my problem.” When Caraway-Howard subsequently showed Ortaliz the letter and asked him about it, Glovsky again objected based on attorney-client privilege, but Joel Bander argued Ortaliz had waived the privilege as to that subject matter.
Later in the deposition, as though impeaching Ortaliz’s testimony that he never discussed his claims with an employee of defendants named Zylnna Andaya, Caraway-Howard showed Ortaliz a declaration he had signed at the office of the Bander firm on January 11. Caraway-Howard read aloud a paragraph from that declaration as follows: “Upon learning of the impending lawsuit against [a defendant] for unpaid wages . . ., Ms. Andaya approached me on or about January 4, 2005. Ms. Andaya asked me whether I think [defendants] would continue my immigration petition should I decide to pursue my lawsuit for unpaid wages against [defendants]. Ms. Andaya also informed me that, if I was to withdraw my claims for unpaid wages against [defendants], the company will continue my labor certification.” Caraway-Howard proceeded to question Ortaliz about the declaration. Ortaliz testified that he phoned Andaya because he wanted her to help him withdraw the case; it was he who approached Andaya, not Andaya who approached him. Caraway-Howard asked whether it was a misstatement in the declaration that Andaya approached Ortaliz, to which Ortaliz replied, “Bander did it.” When Caraway-Howard asked Ortaliz whether he understood that he made the declaration “under penalty of perjury,” Ortaliz explained the circumstances under which he signed the declaration: “[A]t that time I was totally mess[ed] up. I came to Mr. Bander. Honestly, I wanted to withdraw my case. . . . I told him that whatever . . . service that he gave to me, I’ll just pay it on my own money. . . . Mr. Bander told me that, . . . ‘[Y]our life is miserable. I’m not going to make it more miserable.’ [¶] So I thought it was okay to him. So when I sit here in this place, Attorney Wang approached me and gave me this declaration. I almost cried that day. I said to Attorney Wang, ‘Attorney, please I don’t want to be in the lawsuit anymore.’ . . . [¶] Attorney Wang put something on the note. . . . Attorney Wang told me that, ‘Let’s put it this way . . . you’re planning to go back to the Philippines if your [immigration] case is not . . . approved, the H1B.’ [¶] . . . [¶] . . . I’ll just put a note there that you want to continue the lawsuit . . . if you’re out of America, if you’re at home already.’”
Caraway-Howard continued to depose Ortaliz, asking if he was testifying that he had not told the truth when he signed the declaration. In reply, Ortaliz stated the declaration was untrue in the following respects: (1) Andaya had not approached him and did not state defendants would continue his “labor certification” if he withdrew the lawsuit, and (2) although the declaration states Ortaliz did not prepare the letter retracting his lawsuit against defendants and “felt compelled to sign the letter because of [his] immigration petition,” the statement was untrue. Ortaliz then gave a more detailed description of the circumstances under which he signed the declaration: He and five coworkers had come to the office of the Bander firm “planning to talk to Mr. Bander [as] a group,” but Joel Bander wanted to talk with them individually. Ortaliz met with Bander in Bander’s own office. Ortaliz said he wanted “to be out of this lawsuit” and that he had decided to withdraw from the lawsuit of his own free will. Ortaliz had brought his personal check to pay the Bander firm for their services if necessary. Later, in the Bander firm’s conference room, Ray Wang, an attorney with the Bander firm, asked Ortaliz to sign the declaration. Ortaliz told Wang he did not want to sign the declaration; he just wanted “to get out.” He then told a person he thought was a secretary he did not want to sign the document. Someone “approached Mr. Bander. Then Mr. Bander explained it again.” Ortaliz felt intimidated into signing the document: “Actually, I almost cried that day when . . . they showed it to me.” Wang then “put” on the declaration a handwritten note that the lawsuit would proceed if Ortaliz was in the Philippines; Ortaliz “countersigned it.” Ortaliz told Rey Inarin, another of Bander’s former clients, about the note Wang “put” on the declaration.
Joel Bander, in his declaration submitted in December in opposition to defendants’ disqualification motion, offered his version of events: “On January 11, 2005, JULIUS ORTALIZ came into the office to meet with me. He was with a group of people who wanted to [meet] with me as a group. I insisted on meeting with each client alone to protect their confidentiality. Mr. Ortaliz agreed to meet with me alone. Mr. Ortaliz told me what happened when he was approached by Zylnna Andaya and pressured to withdraw from his lawsuit. I sent Mr. Ortaliz to the conference room while I prepared a declaration based on his words. I printed it and had my associate Ray Wang, take it to Mr. Ortaliz to read it. Mr. Wang brought me the signed declaration. Mr. Ortaliz never told me that anything in the declaration was not true. I did not threaten Mr. Ortaliz or force him to sign anything. Mr. Ortaliz signed the declaration without comment to me. I did not [see] him after I sent him to the conference room. It is an absurdity to think that I would obtain a declaration under penalty of perjury to be kept in confidence. The only reason I ever have anyone sign such a document is to use it in court. Even more outlandish is to claim that not only was I told not to use it, but I was told it was false. In fact, I intended to obtain a number of these declarations, but [defendants] moved so vigorously to scare the retractors I was only able to get one more. [¶] I also obtained the declaration of Teresita Vallo. I followed the same procedure with Ms. Vallo as I followed with Mr. Ortaliz. In fact, Ms. Vallo asked for revisions which we made. How [Ms. Vallo] can now claim that she was pressured when the declaration was revised at her instance is just inexplicable.” The declaration of Ray Wang, former attorney with the Bander firm, also contradicts Ortaliz’s deposition testimony.
At the deposition Ortaliz expressed doubt that the declaration before him was the original document. Joel Bander stated the document was the original but the firm had “not put the other document into evidence.” Caraway-Howard asked Ortaliz if he understood the word “perjury” when he signed the declaration. Caraway-Howard later criticized Ortaliz’s speech as being unintelligible: “I don’t know how this guy orders lunch. Okay? Everything he says is unintelligible.”
After Ortaliz’s deposition ended and before Juguan’s commenced, Glovsky asked for a copy of the Bander firm’s files on Ortaliz and Juguan. Joel Bander replied he had “certain problems in terms of [whose] interest” Glovsky was really representing “in terms of [his] close relationship . . . with defense counsel,” and that although the Bander firm had an obligation “to give clients’ files to clients,” the firm had “obligations to other clients as well.” Glovsky wanted to receive the files before Juguan’s deposition started, but Bander stated it might take many hours to separate Juguan’s file from other files in the case. At the outset of Juguan’s deposition, Glovsky argued that during Ortaliz’s deposition the Bander firm had asked Ortaliz “questions about documents that were in his case file that no one else was privy to.” The Bander firm did not give Juguan a copy of her case file and proceeded to take Juguan’s deposition.
Under rule 3-700(D) of the State Bar Rules of Professional Conduct, an attorney must “promptly release to [a former] client, at the request of the client, all the client papers and property,” including “correspondence, pleadings, deposition transcripts, exhibits, physical evidence, expert’s reports, and other items reasonably necessary to the client’s representation.”
On July 1 and 12, respectively, defendants and Bander’s former clients separately petitioned the Second District Court of Appeal for a writ of mandate directing the trial court to reverse its June 23 order permitting the Bander firm “to depose and subpoena the immigration files of its former clients . . . .” The Court of Appeal “raised sua sponte the issue of whether Plaintiffs’ counsel must be disqualified from this action due to a conflict of interest with [Bander’s former clients] and specifically ordered Plaintiffs’ counsel to address this issue in its response to the writ petition.” In his declaration submitted in opposition to the writ petitions, Joel Bander explained, as “an expert in Immigration Law,” that “H-1B is a temporary visa permitting aliens in specialty occupations to work in the U.S. for the petitioner.” Bander further declared, “In the deposition of Julius Ortaliz, deponent testified that he was petitioned by [defendants] and approved for an H-1B position as a computer programmer (Deposition, P.26:3-6). However, Ortaliz further testified that he had never worked as a computer programmer for [defendants] (Deposition, P.27:3-6). Mr. Ortaliz performed duties other than the duties normally performed by a computer programmer, which constituted a material change to the terms and conditions of the approved LCA. The employer’s failure to amend or file a new LCA at the commencement of its employment relationship with Mr. Ortaliz[] had already made him an out of status and deportable alien. (8 C.F.R. § 214.2 et seq., 8 U.S.C. § 1227(a)(1)(C)).” Thus, in a public document, Bander opined Ortaliz was a deportable alien.
In July, the Los Angeles County Superior Court consolidated five of the eight cases and transferred the other three to the Orange County Superior Court.
On December 6, the Second District Court of Appeal “issued an order, providing, ‘it appears to this court that current counsel for [Plaintiffs] may have a conflict of interest which could preclude counsel from continuing to represent [Plaintiffs] in this action.’” The court “then deferred further ruling on the issue for 60 days to first allow ‘any party that wishes to do so an opportunity to file, in the trial court, a motion to disqualify counsel, or to allow the trial court to consider the issue sua sponte.’”
In response to the Court of Appeal’s invitation, defendants and Bander’s former clients filed motions in the Los Angeles County Superior Court and the Orange County Superior Court to disqualify the Bander firm from acting as plaintiffs’ counsel. In January 2006, a trial judge of the Los Angeles County Superior Court disqualified the Bander firm from representing plaintiffs in the five consolidated cases before that court.
In February 2006, a trial judge of the Orange County Superior Court granted the motions of defendants and Bander’s former clients to disqualify the Bander firm from continuing to represent the plaintiffs in the three consolidated cases that are the subject of this appeal. The court found “[t]here is a conflict of interest between the former clients and present clients of the Bander Law Firm, that the firm has performed discovery and taken other actions that are adverse to the wishes and interests of the former clients for the benefit of the present clients and that the Bander Law Firm has a continuing incentive to use confidential information to the detriment of former clients, such that the conflict will have a continuing effect on the litigation.” The court’s explicit findings also included: The Bander Law Firm did not dispute “that it amended the complaint to put former clients’ settlements with defendants at issue, force[d] their former clients to testify about their settlements and attempted to impeach a former client by referring to a declaration [prepared by] the Bander Firm . . . which the former client now disavows as stating the truth.” The Bander firm’s knowledge of confidential communications placed it “in an unfair position to discredit and impeach [the] former clients, if the former clients’ testimony is adverse to the current clients.” The Bander firm created the conflict of interest. Bander’s “former clients believed that the settlements were in their own best interests.” The Bander firm cited “no authority for the proposition that an attorney may take a position that is adverse to a former clients’ decision to settle, based on the attorney’s own belief as to whether the former clients acted in their own best interest.” The Bander firm’s “previous conduct establishes the potential that the Bander Law Firm will continue to perform activities that are detrimental to the wishes and interests of the former clients.” Relying on American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal.App.4th 1017 (American Airlines), the court ruled “[d]isqualification is proper even if there is no showing of past disclosure of the confidential information if the moving papers show that an attorney has an incentive to use and/or disclose confidential information for the benefit of a current client.” The court further found the Bander firm had “displayed a willingness to prefer the interests of current clients over the interests of former clients and [had not] disavowed their attempts to attack the settlements between the former clients and defendants,” and ruled “the Bander Firm cannot require the former clients to trust that further action will not be taken in the future.”
The court did not base its ruling on defendants’ allegation the Bander firm acquired illegal evidence in the form of two secretly recorded audiotapes and that such acquisition would undermine the integrity of the judicial process. Therefore we do not recite the facts surrounding the acquisition of those audiotapes.
DISCUSSION
The Bander firm contends that “deposing [Bander’s former clients] with prior court approval was not an ethical violation and not worthy of disqualification.” It further argues the court erred by disqualifying it because the firm did not acquire an unfair advantage by deposing Bander’s former clients. Finally, the firm disputes defendants’ standing to bring a disqualification motion.
“‘Generally, a trial court’s decision on a disqualification motion is reviewed for abuse of discretion.’” (City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 848 (San Francisco).) “‘When substantial evidence supports the trial court’s factual findings, the appellate court reviews the conclusions based on those findings for abuse of discretion.’” (Ibid.) But “‘where there are no material disputed factual issues, the appellate court reviews the trial court’s determination as a question of law.’” (Ibid.) Here, the trial court resolved material disputed factual issues. The disputed factual issues on which the court made express and implied findings included whether Ortaliz in his deposition accurately described the circumstances under which he signed the January 11 declaration and whether Bander’s former clients disclosed confidential immigration information to the Bander firm. We therefore review the court’s factual findings for substantial evidence and its ruling for an abuse of discretion.
In support of their disqualification motion, Bander’s former clients declared they had shared confidential information, including information about their immigration status, with the Bander firm while represented by the firm. In Caraway-Howard’s declaration submitted in opposition to defendants’ disqualification motion, she states: “The immigration status of . . . the claimants was . . . common knowledge among the Plaintiffs and the Retractors. . . . Therefore, none of these people, including the retractors, had a reasonable expectation that their immigration status was confidential at all.” (See Toyota Motor Sales, U.S.A., Inc. v. Superior Court (1996) 46 Cal.App.4th 778, 783 [“Credibility, even when based upon conflicting declarations, is determined by the trial court”].)
“‘It has long been established in civil cases that the court has the power, on motion of a party, to disqualify an opposing attorney from participating in a trial when, for example, the attorney improperly seeks to proceed against a former client.’” (City National Bank v. Adams (2002) 96 Cal.App.4th 315, 323.) “Ultimately, disqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility.” (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145 (SpeeDee).) In the end, the “concern [for preserving] public trust in the scrupulous administration of justice and the integrity of the bar” is “paramount” and the “important right to counsel of one’s choice must yield to ethical considerations that affect the fundamental principles of our judicial process.” (Ibid.)
An attorney bears two distinct ethical duties to a client: (1) a duty of confidentiality, “which fosters full and open communication between client and counsel” (San Francisco, supra, 38 Cal.4th at p. 846), and (2) a duty of loyalty, whereby an attorney devotes his or her “‘entire energies to his client’s interests’” (Flatt v. Superior Court (1994) 9 Cal.4th 275, 289, italics omitted). The duty of confidentiality promotes “‘“the right of every person to freely and fully confer and confide in one having knowledge of the law, and skilled in its practice, in order that the former may have adequate advice and a proper defense.”’” (SpeeDee, supra, 20 Cal.4th at p. 1146.) The duty of confidentiality is broader than the attorney-client privilege (Goldstein v. Lees (1975) 46 Cal.App.3d 614, 621) and “survives the termination of the attorney’s representation” (San Francisco, supra, 38 Cal.4th at p. 846).
Business & Professions Code, section 6068, subdivision (e)(1) requires an attorney to “maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.” Rule 3-310(E) of the State Bar Rules of Professional Conduct (rule 3-310(E)) prohibits an attorney from accepting, without a current or former client’s consent, “employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment.” “For the most part, rule 3-310(E) has been invoked in two situations — where the attorney successively represents clients with potential or actual adverse interests and where the attorney simultaneously represents clients with potential or actual adverse interests.” (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 705, italics added.) Because the disqualification motions at issue here were filed at a time when the Bander firm no longer represented Bander’s former clients, we treat this as a case of successive representation. This analysis is particularly appropriate because the adversity between the Bander firm’s continuing clients and its former clients arose from the nature of the allegations in the amended complaints filed after the former clients withdrew from the lawsuits.
Rule 3-310(E) requires a former client seeking disqualification of previous counsel to show (1) the attorney’s current employment is “adverse” to the former client and (2) the attorney, while representing the former client, “obtained confidential information material to the employment.” Here, the Bander firm’s employment by the continuing plaintiffs is adverse to Bander’s former clients’ interests because the Bander firm amended the complaints to dispute the validity of Bander’s former clients’ settlements with defendants and because the Bander firm, in an effort to support the continuing plaintiffs’ claims, has impugned the integrity, honesty under oath, and legal presence in the United States of Bander’s former clients. Indeed, the interests of the continuing plaintiffs (who dispute the compensation terms of their employment) are directly contrary to the interests of Bander’s former clients (who have accepted the conditions of their employment), much like the interests of striking employees diametrically diverge from those of employees who cross the line. (The Bander firm asserts Bander’s former clients “abandon[ed] co-Plaintiffs.”)
As to the second requirement — that the attorney has obtained material confidential information — “access to confidential information by the attorney in the course of the first representation . . . is presumed and disqualification of the attorney’s representation of the second client is mandatory” if the former client demonstrates “a ‘substantial relationship’ between the subjects of the antecedent and current representations.” (Flatt v. Superior Court, supra, 9 Cal.4th at p. 283.) Such a substantial relationship “is said to exist ‘“‘when it appears by virtue of the nature of the former representation or the relationship of the attorney to his former client [that] confidential information material to the current dispute would normally have been imparted to the attorney . . . .’”’” (Pour Le Bebe, Inc. v. Guess? Inc. (2003) 112 Cal.App.4th 810, 823.) Here, the Bander firm directly represented Bander’s former clients in the very same case in which the Bander firm continues to represent plaintiffs. In Zador Corp. v. Kwan (1995) 31 Cal.App.4th 1285, 1294, the court stated that where an attorney jointly represents two clients in the same matter and then ceases to represent one due to a conflict of interest between the two clients, a substantial relationship between the former and current representations inherently exists. (The Zador court, however, reversed a disqualification order because the former client consented to a law firm’s continued representation of its current client.) (Id. at p. 1301.) Here, because the ongoing litigation is adverse to the interests of Bander’s former clients and because a substantial relationship exists between the subject matter of the Bander firm’s representation of Bander’s former clients and its current representation of the continuing plaintiffs, the disqualification of the Bander firm as plaintiffs’ counsel was mandatory.
In challenging the court’s order, the Bander firm asserts that the court based its ruling entirely “upon depositions previously approved by the [Los Angeles] court.” But the court’s lengthy order reveals its ruling was based not simply on the taking of the depositions, but rather on the position in which the Bander firm placed itself, i.e., at a necessary terminus where the interests of its current and former clients collided and where the Bander firm acted against the wishes and interests of its former clients and was motivated to continue doing so. Although the Bander firm asserts the “records unquestionably establish that Appellant never acted adversely to their former clients’ interests,” the court found to the contrary. The Bander firm even asserts it acted in the best interests of Bander’s former clients by seeking to disclose defendants’ “intimidation pattern.” But as the court’s ruling points out, the Bander firm offers no support for its assertion that an attorney knows better than a former client what lies in the former client’s best interests. Indeed, this assertion implies that a client in a civil case, simply by retaining an attorney, elevates counsel to a controlling position akin to the client’s guardian or conservator in legal matters.
We note an attorney does not have an unfettered right to depose a former client simply because that individual is a percipient witness. In Kraus v. Davis (1970) 6 Cal.App.3d 484, 491, an attorney who sought to depose allegedly former clients was not disqualified from representing his current clients because the evidence showed he “was never an attorney for any of the complaining parties, and that he never acquired . . . any knowledge of [their] confidential affairs . . . .” (Id. at p. 491.) Thus, the attorney could “fairly and honorably” represent his current clients. (Id. at p. 492.)
The Bander firm asserts “[t]o date, there is no evidence that any of the [former clients] have been subject to adverse action by the federal government based on their immigration status.” Nonetheless, the Bander firm has cavalierly made its critique of Ortaliz’s immigration status a matter of public record.
It is no answer that the Bander firm was seeking to “zealously” advance the interests of the continuing plaintiffs and promote the “public policy interest . . . to rectify the unfair business practices of employers who underpay their employees to take unlawful profits.” An attorney caught between the conflicting interests of current and former clients cannot adequately protect the interests of either. In this respect, the continuing plaintiffs will be better served by new counsel: “Clients are entitled to vigorous and determined representation by counsel. It is difficult to believe that a counsel who scrupulously attempts to avoid the revelation of former client confidences — i.e., who makes every effort to steer clear of the danger zone — can offer the kind of undivided loyalty that a [current] client has every right to expect and that our legal system demands.” (American Airlines, supra, 96 Cal.App.4th at pp. 1040-1041.)
Next, the Bander firm claims the court “erred in its finding that [the Bander firm] used confidential information to discredit and impeach [Bander’s former clients] when their testimony was adverse to [the continuing plaintiffs’] case.” Not so. Substantial evidence supported this finding, including the Bander firm’s use of Ortaliz’s immigration information and January 11 declaration. The Bander firm strenuously argues that Ortaliz’s January 11 declaration was not confidential, as it was signed under penalty of perjury and Joel Bander intended to use it “in court to protect all plaintiffs from Respondent-employers’ ongoing retaliation plan.” But Ortaliz had an expectation the declaration would be kept private because he authorized its use and release only upon his return to the Philippines. Moreover, it is the client, not the attorney, who holds the attorney-client privilege and has the right to waive it. (Evid. Code, § 953.) Furthermore, an attorney need not actually divulge any confidential information to violate rule 3-310(E). Simply by placing himself in a position “‘where he may be required to choose between conflicting duties, or . . . to reconcile conflicting interests,’” he breaches the rule. (American Airlines, supra, 96 Cal.App.4th at p. 1043.) “[T]he subsequent representation of another against a former client is forbidden not merely when the attorney will be called upon to use confidential information obtained in the course of the former employment, but in every case when, by reason of such subsequent employment, he may be called upon to use such confidential information.” (Galbraith v. The State Bar (1933) 218 Cal. 329, 332-333, italics in original [construing the predecessor to rule 3-310(E)].) The Bander firm attempts to distinguish American Airlines because the attorney there did not act as counsel for the current client, but rather as its witness/agent. But as the American Airlines court made clear, agents and counsel are both fiduciaries; therefore the attorney, as a witness/agent of the current client, stood “in a position of trust where he could be compelled to choose which of two conflicting loyalties he would honor” and was subject to the conflict-of-interest rule. (American Airlines, supra, 96 Cal.App.4th at p. 1035.) The Bander firm also tries to distinguish American Airlines because that case involved successive representation, i.e., after the attorney ceased to represent one client, he accepted employment as a witness by a subsequent client. In contrast, the Bander firm argues, it was retained by the continuing plaintiffs before Bander’s former clients withdrew their claims. Nevertheless, this case is analogous to a successive representation situation because the Bander firm chose to continue representing the plaintiffs even after the interests of the former and current clients clashed.
The attorney was a Federal Rules of Civil Procedure rule 30(b)(6) witness whose function was “to testify on behalf of a corporation or other organization as to matters known or reasonably available to the organization, and specifically as to those matters described in the deposition notice.” (American Airlines, supra, 96 Cal.App.4th at p. 1025, fn. 3.)
This case also involves simultaneous representation because the Bander firm for a period of time concurrently represented the 11 employees who withdrew their claims and the plaintiffs who continued in the lawsuit. Subdivisions (C)(1) and (C)(2), respectively, of rule 3-310 prohibit an attorney, absent the written consent of each client, from accepting “representation of more than one client in a matter in which the interests of the clients potentially conflict” or accepting or continuing “representation of more than one client in a matter in which the interests of the clients actually conflict.” The Bander firm does not contend it obtained the consent of its clients to potential or actual conflicts of interest. From the outset, a potential conflict of interest arguably existed between current and former employees of defendants. And certainly, after the 11 employees retracted their claims, their interests conflicted with those of the continuing plaintiffs, yet the Bander firm continued to represent the 11 employees against their wishes, refusing to sign substitution of counsel forms. “The primary value at stake in cases of simultaneous or dual representation is the attorney’s duty — and the client’s legitimate expectation — of loyalty, rather than confidentiality.” (Flatt v. Superior Court, supra, 9 Cal.4th at p. 284.) “In evaluating conflict claims in dual representation cases, the courts have accordingly imposed a test that is more stringent than that of demonstrating a substantial relationship between the subject matter of successive representations” and disqualification is often “per se or ‘automatic.’” (Ibid, fn. omitted.) Thus, the Bander firm does itself no favors by seeking to characterize this case as one of simultaneous representation.
The Bander firm points out that attorney disqualification is a harsh remedy and a trial court must therefore exercise its discretion carefully. Given the court’s lengthy ruling in this case, we are satisfied the court exercised its discretion very carefully. The Bander firm also contends it did not gain an unfair advantage over Bander’s former clients; however, the trial court found to the contrary. The Bander firm further argues defendants and Bander’s former clients unreasonably delayed in the filing of their disqualification motions. This argument is meritless. During the five months following Ortaliz’s and Juguan’s depositions, defendants and Bander’s former clients waited for the Second District Court of Appeal to rule on their petitions for a writ of mandate preventing further discovery. The defendants and Bander’s former clients filed their disqualification motions with the Orange County Superior Court less than seven weeks after the Second District Court of Appeal invited them to do so.
Finally, the Bander firm disputes defendants’ (not Bander’s former clients’) standing to bring a disqualification motion, arguing defendants were never in an attorney-client relationship with the Bander firm. The Bander firm does not, however, dispute the standing of Bander’s former clients to bring their motion. We need not address this issue because the trial court issued a separate disqualification order based solely on the motion of Bander’s former clients. The court’s orders granting the disqualification motions of defendants and Bander’s former clients are essentially identical, with the exception that the order granting the motion of Bander’s former clients specifies it is not based on the Bander firm’s role in the acquisition of two audiotapes that violated defendants’ privacy right. (See fn. 9, ante.)
It appears from the record that the Bander firm has demonstrated its insensitivity to its obligations of confidentiality and loyalty. Its former clients must not be further exposed to this risk for the benefit of its current clients. The court did not abuse its discretion.
DISPOSITION
The order disqualifying the Bander firm is affirmed. Respondents shall recover their costs on appeal.
WE CONCUR: MOORE, ACTING P. J. FYBEL, J.