Citizens Development Corporation, Inc. v. San Diego, County of et al, No. 3:2012cv00334 - Document 161 (S.D. Cal. 2015)
Court Description: ORDER Granting 156 Motion to Withdraw; Denying Ex Parte Motion 156 to Shorten Time on Motion to Withdraw; Denying 144 Motion to Disqualify Counsel; Granting 149 and 154 Motions to File Under Seal: CDCs motion to disqualify, ECF No. 144 , is denied. However, WS is ordered to send CDC the complete litigation file if they have not already done so. The hearing scheduled for December 17, 2015 is vacated. Signed by Judge Gonzalo P. Curiel on 12/17/15. (dlg) (sjt).
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Citizens Development Corporation, Inc. v. San Diego, County of et al Doc. 161 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CITIZENS DEVELOPMENT CORPORATION, INC., a California corporation, 12 Plaintiff, 13 14 17 20 21 22 23 24 25 26 27 28 (1) GRANTING MOTION TO WITHDRAW (3) DENYING MOTION TO DISQUALIFY COUNSEL 16 19 ORDER: (2) DENYING EX PARTE MOTION TO SHORTEN TIME ON MOTION TO WITHDRAW v. 15 18 CASE NO. 3:12-cv-0334-GPC-KSC COUNTY OF SAN DIEGO, a California municipal corporation, CITY OF SAN MARCOS, a California municipal corporation, CITY OF ESCONDIDO, a California municipal corporation, VALLECITOS WATER DISTRICT, a California municipal corporation, HOLLANDIA DAIRY, INC., a California corporation, and DOES 1 through 100, inclusive, (4) GRANTING MOTIONS TO FILE UNDER SEAL (5) VACATING HEARING DATE [ECF Nos. 144, 149, 154, 156] Defendants. Before the Court is Plaintiff Citizens Development Corporation, Inc.’s (“Plaintiff”) motion to disqualify counsel, ECF No. 144, and related motions to seal, ECF No. 149, 154; and non-parties Wood, Smith, Henning & Berman LLP (“Wood Smith” or “WS”) and David F. Wood’s (“Wood”) motion to withdraw as counsel, and -1- 3:12-cv-0334-GPC-KSC Dockets.Justia.com 1 related ex parte motion to shorten time on motion to withdraw as counsel, ECF No. 2 156. The motion to disqualify has been fully briefed. WS Opp., ECF No. 148; Pl. 3 Reply, ECF No. 152. The motion to withdraw has been opposed. Pl. Opp., ECF No. 4 159. Upon review of the moving papers and the applicable law, the Court hereby 5 GRANTS WS’s motion to withdraw, DENIES WS’s ex parte motion to shorten time 6 on their motion to withdraw, DENIES Plaintiff’s motion to disqualify counsel, 7 GRANTS the motions to seal, and VACATES the December 17, 2015 hearing on the 8 motion to disqualify. 9 10 BACKGROUND This motion arises out of a Comprehensive Environmental Response, 11 Compensation, and Liability (“CERCLA”) cost recovery action filed by Plaintiff 12 CDC against Defendants the County of San Diego, the City of San Marcos, the City 13 of Escondido, Vallecitos Water District, and Hollandia Dairy. Compl., ECF No. 1. 14 The case has been stayed pending mediation between the parties since January 8, 15 2014. Order Granting Joint Mot. to Stay Action Pending Mediation, ECF No. 94. 16 On September 2, 2015, the Court granted CDC’s motion to lift the stay, ECF 17 No. 122, for the limited purpose of filing a motion to disqualify WS, which had 18 been appointed to represent CDC in this action by Fireman’s Fund Insurance 19 Company (“FFIC”), which is one of CDC’s insurance carriers in this case. Order 20 Granting Motion to Lift Stay, ECF No. 133. 21 On September 16, 2015, CDC attempted to file their entire motion to 22 disqualify, as well as related documents, as attachments to a motion to file 23 documents under seal. ECF No. 137. On October 2, 2015, FFIC motioned for leave 24 to file a limited objection to CDC’s Motion to File Documents Under Seal as well as 25 for related ancillary relief, including permission to participate in litigation 26 concerning the disqualification motion. FFIC Mot. 7, ECF No. 139-1.1 On October 27 28 1 All pagination refers to that created by the CM/ECF system, not the parties’ own page numbers. -2- 3:12-cv-0334-GPC-KSC 1 28, 2015, the Court issued an Order denying CDC’s motion to file documents under 2 seal, directing CDC to file a redacted version of their motion to disqualify, denying 3 FFIC’s motion for leave to file a limited objection to CDC’s motion to disqualify, 4 and indicating that WS, not FFIC, would be in the best position to respond to the 5 allegations against it lodged by CDC. Sealing Order, ECF No. 143. The Court also 6 reviewed the allegations CDC lodged against WS and found that if CDC’s 7 allegations were found to be true, WS would have violated its ethical duties to its 8 client. See id. at 9–10. 9 On October 30, 2015, CDC filed a redacted version of their motion to 10 disqualify. Pl. Mot, ECF No. 144. On November 13, 2015, WS filed a response. 11 WS Opp., ECF No. 148. On November 20, 2015, CDC filed a reply. On December 12 9, 2015, WS filed a motion to withdraw as counsel, as well as an ex parte motion to 13 shorten time on the motion to withdraw as counsel. WS Mot., ECF No. 156. On 14 December 14, 2015, CDC filed a response. Pl. Opp., ECF No. 159. 15 16 LEGAL STANDARD The disqualification of counsel because of an ethical violation is a 17 discretionary exercise of the trial court’s inherent powers. See United States v. 18 Wunsch, 84 F. 3d 1110, 1114 (9th Cir.1996); see also Visa U.S.A., Inc. v. First Data 19 Corp., 241 F. Supp. 2d 1100, 1103–04 (N.D. Cal. 2003). However, disqualification 20 is a drastic measure that is disfavored. Visa U.S.A., Inc. v. First Data Corp., 241 21 F.Supp.2d at 1104. Because they are often tactically motivated, motions to 22 disqualify “should be subjected to particular judicial scrutiny.” Optyl Eyewear 23 Fashion Int’l Corp. v. Style Cos., 760 F.2d 1045, 1050 (9th Cir. 1985) (internal 24 citations omitted). However, “the paramount concern must be the preservation of 25 public trust both in the scrupulous administration of justice and in the integrity of 26 the bar.” State Farm Mut. Auto. Ins. Co. v. Federal Ins., 72 Cal. App. 4th 1422, 27 1428 (1999). Motions to disqualify counsel are governed by state law. See W. Sugar 28 Coop. v. Archer-Daniels-Midland Co., 98 F. Supp. 3d 1074, 1080 (C.D. Cal. 2015) -3- 3:12-cv-0334-GPC-KSC 1 (citing Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 967 (9th Cir. 2009)); see also 2 Civil Local Rule 83.4(b). 3 State law also governs motions for permissive withdrawal. See Estate of 4 Przysiecki v. Eifert, No. 07CV39 WQH RBB, 2010 WL 99075, at *1 (S.D. Cal. Jan. 5 6, 2010); see also Civil Local Rule 84.3(b) (requiring counsel to “comply with the 6 standards of professional conduct required of members of the State Bar of 7 California”). In turn, California Rule of Professional Conduct 3–700 provides: 8 9 10 11 12 13 (C) Permissive Withdrawal. If rule 3-700(B) is not applicable, a member may not request permission to withdraw in matters pending before a tribunal, and may not withdraw in other matters, unless such request or such withdrawal is because (1) The client . . . (d) by other conduct renders it unreasonably difficult for the member to carry out the employment effectively, or . . . (3) The inability to work with co-counsel indicates that the best interests of the client likely will be served by withdrawal. 14 Before withdrawing, the attorney must have “taken reasonable steps to avoid 15 reasonably foreseeable prejudice to the rights of the client, including giving due 16 notice to the client, allowing time for employment of other counsel, complying with 17 rule 3-700(D), and complying with applicable laws and rules.” Id. at 3-700(A)(2). 18 Counsel must seek permission from the Court in order to withdraw. Civil Local 19 Rule 83.3.f.3. 20 DISCUSSION 21 I. 22 CDC moves to disqualify WS, alleging that WS has acted unethically in: (1) CDC’s Motion to Disqualify 23 illicitly obtaining a copy of CDC’s confidential mediation brief and forwarding it to 24 FFIC against the express written instructions of CDC, CDC’s lead counsel, and the 25 mediator; (2) disclosing CDC’s confidential communications to FFIC against 26 CDC’s express instructions; (3) refusing to produce a copy of its litigation file to 27 CDC; (4) slanting facts in the ongoing litigation in memoranda to FFIC in order to 28 bolster FFIC’s coverage position against CDC; (5) submitting briefing to the -4- 3:12-cv-0334-GPC-KSC 1 mediator that argued for an allocation of liability advantaging FFIC at CDC’s 2 expense in their ongoing coverage dispute; and (6) only agreeing to withdraw from 3 the representation if they are not required to admit to ethical violations. Pl. Mot. 4 4–10. 5 WS denies that they have breached their ethical duties to CDC, arguing that: 6 (1) WS did not send CDC’s confidential mediation brief to FFIC; (2) WS made no 7 improper disclosures to FFIC; (3) CDC is already in possession of all relevant 8 litigation documents; (4) WS did not misrepresent facts in its communications with 9 FFIC in order to bolster FFIC’s coverage positions against CDC; (5) WS did not 10 submit a mediation brief to the mediator; and (6) WS will not admit to ethical 11 violations WS has not committed in order to be permitted to withdraw by CDC. WS 12 Opp. 3–7. 13 In the Court’s October 28, 2015 sealing order, this Court found that: 14 In the tripartite relationship between insurer, insured, and counsel, counsel has rights and obligations founded not only upon contract, but upon the Rules of Professional Conduct. Am. Mut. Liab. Ins. Co. v. Superior Court, 38 Cal. App. 579, 592 (1974). As alluded to above, pursuant to rule 3-310 of the California Rules of Professional Conduct, the California State Bar’s Standing Committee on Professional Responsibility and Conduct has provided guidance on the rights and obligations of counsel in the tripartite relationship. [See Issue: To Whom Does an Attorney Owe Duties When He or She Acts As Ins. Def. Counsel [hereinafter “CA Bar Guidance”], CA Eth. Op. 1995139 (Cal. St. Bar. Comm. Prof. Resp.), 1995 WL 255397.] Under this guidance, counsel owes duties of loyalty and confidentiality to the insured/client. See id. at *3 (noting that “the attorney is obligated at all times to protect the insured/client and may not act in any way which prevents devoting his entire energies to his client’s interest,” and that “[i]t is also the duty of any attorney to maintain inviolate the confidences of a client and to preserve at every peril to himself or herself the client’s secrets” (internal quotation marks omitted)). The guidance continues, This means that, even where the attorney has a close ongoing relationship with an insurer, and from a business perspective considers insurer an important “client,” in any particular representation it is the obligation to protect the insured’s confidences and secrets which is paramount. Thus, if, for example, the attorney gains information during the course of representation which the attorney believes demonstrates that the insured is actually not entitled to coverage, the attorney nevertheless owes a duty to the insured/client not to reveal this information to the insurer. This is true even where the attorney comes to believe that the insured has fraudulently created a 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- 3:12-cv-0334-GPC-KSC 1 2 3 4 situation in which coverage appears to exist where it actually does not. For example, an insured might claim to be driving a vehicle when the actual driving was done by a friend or family member who was not insured. Even in these relatively extreme situations, the requirements of Business and Professions Code section 6068, subdivision (e) prevent disclosure to anyone, including the insurer, of material harmful to the insured. 5 Sealing Order 9–10. Based on this standard, this Court found that if CDC’s 6 allegations were found to be true, WS would have violated its ethical duties to 7 CDC. Id. at 10. The Court will examine each of CDC’s allegations in turn. 8 9 A. WS sending CDC’s confidential mediation brief to FFIC CDC alleges that WS “[i]llicitly [o]btained a [c]opy of CDC’s [c]onfidential 10 [m]ediation [b]rief and [f]orwarded [i]t to [FFIC] [a]gainst the [e]xpress [w]ritten 11 [i]nstructions of CDC, CDC’s [l]ead [c]ounsel, and the [m]ediator.” Pl. Mot. 4. For 12 evidence, CDC submitted a declaration from its lead counsel, Jeffrey L. Caufield, 13 that “the mediator instructed all counsel that the mediation briefs were to be 14 confidential, for the mediator’s eyes only, and not to be provided to the insurance 15 carriers.” Caufield Decl. 1, ECF No. 144. CDC also submitted an e-mail sent from 16 David F. Wood to Scott Osmus, a claim adjuster at FFIC, in which Wood stated that 17 WS “have now obtained a copy of the preliminary mediation brief submitted by 18 Caufield & James, and this report will summarize that brief.” Pl. Mot. Ex. 1. The e19 mail was cc’d to Mathew McMillan, an attorney at lead counsel’s firm Caufield & 20 James, LLP (“C&J”), as well as Jade Tran, attorney at WS. Id. The e-mail 21 summarized the liability percentages that the mediation brief argued for and the 22 reasoning for those percentages. Id. The discussion of CDC’s liability in the e-mail 23 consisted of one paragraph stating the following: 24 25 26 27 28 -6- 3:12-cv-0334-GPC-KSC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pl. Mot. Ex. 1, at 2. WS responds that it never sent a copy of the mediation brief to FFIC, and that the e-mail, which was sent seven months after the mediation brief was submitted to the mediator, only disclosed information that FFIC was entitled to as CDC’s insurer in order to assess potential exposure, not information that FFIC could use against CDC. WS Opp. 3–4. Upon review of the record, the Court is inclined to agree with WS. The only evidence CDC provides is the e-mail from Wood to Osmus, which is not evidence that WS sent a copy of the mediation brief to FFIC. Instead, the portion of the email pertaining to CDC appears to summarize why CDC believed that CDC was responsible for a relatively small portion of the liability for the cleanup costs. See Pl. Mot. Ex. 1, at 2–3. Some of this information is already publicly available. For example, the statement that CDC owns approximately 252 acres of the watershed is also available in CDC’s publicly lodged Complaint. See Compl. 1, ECF No. 1. But more importantly, CDC has not concretely explained how the rest of the information in this paragraph would actually disadvantage CDC in any subsequent coverage dispute with FFIC. Moreover, it is difficult to see how the sending of this e-mail from Wood to Osmus could be described as “illicit” or “surreptitious,” given that Wood cc’ed the e-mail to McMillan, an attorney at C&J. Instead, WS’s summarizing of the mediation brief, sent seven months after the brief was initially submitted to the mediator, would appear to fulfill their “obligation of any attorney to keep clients ‘reasonably informed about significant developments’ relating to the case.” See CA Bar Guidance, 1995 WL 255397. B. WS disclosing CDC’s confidential communications to FFIC CDC alleges that on September 15, 2014, Mr. Wood copied FFIC’s claims adjuster, Scott Osmus, on an e-mail chain with CDC’s lead counsel, Caufield, such that FFIC received copies of prior emails between Caufield and Wood, “which -7- 3:12-cv-0334-GPC-KSC 1 included privileged and confidential discussions of coverage issues.” As evidence, 2 CDC attaches the purported e-mail chain between Wood and Caufield, stretching 3 from August 22, 2014 to September 15, 2014, see Pl. Mot. Ex. 3, as well as an e4 mail chain between Wood and Caufield on September 18, 2014, in which Wood 5 stated: 6 7 8 “I . . . realize that I may have inadvertently forwarded one or more emails from you that I did not intend to send to Scott Osmus. I didn’t realize that you had in fact copied every past email you sent to me whenever you sent me a new one. I apologize for that and will make sure it doesn’t happen in the future.” 9 Pl. Mot. Ex. 4. 10 WS concedes that it forwarded the e-mail chain to FFIC, but contends that the 11 disclosure was both accidental and harmless, since it did not alter FFIC’s limited 12 reservation of rights. WS Opp. 4–5. 13 Upon review of the e-mail chain, the Court agrees with WS that its contents 14 do not appear to prejudice CDC. The e-mail chain consists of a number of e-mails 15 between Wood and Caufield where the latter demanded that WS provide its legal 16 opinion as to a number of coverage disputes between CDC and FFIC and advanced 17 numerous speculations as to considerations that could affect those coverage 18 disputes, to which Wood repeatedly responded that WS was retained to defend CDC 19 with regards to liability, not either CDC or FFIC with regards to coverage. See Pl. 20 Mot. Ex. 3. Although it may be the case that Wood ought not have sent these e21 mails on to Osmus, CDC has not identified, and the e-mails do not appear to 22 contain, any of the type of secrets specified by the CA Bar Guidance that would 23 have an adverse impact on CDC in any subsequent coverage dispute with FFIC. 24 Indeed, the Court observes that Caufield placed Wood in a difficult position 25 by sending what as far as the Court can discern were lengthy and irrelevant, if not 26 inappropriate, messages to the latter—as well as by adopting an adversarial, 27 confrontational tone in his communications which the Court would find uncivil if 28 used when addressing opposing counsel, much less co-counsel. It is surprising that -8- 3:12-cv-0334-GPC-KSC 1 CDC’s lead counsel relies on this e-mail chain to indict WS’s professionalism, since 2 the contents of the e-mails reveal a lack of the type of courtesy and civility that the 3 Court expects the parties to show each other. 4 5 C. WS refusing to produce a copy of its litigation file to CDC CDC claims that WS “has failed and refused to produce a copy of its 6 litigation file to CDC, despite numerous requests.” Pl. Mot. 7. Under California law, 7 “an attorney has a duty to promptly surrender any communicated work product 8 contained in an attorney’s litigation file upon request of the client.” In re Ramirez, 9 183 B.R. 583, 587 (B.A.P. 9th Cir. 1995), dismissed on other grounds, 201 F.3d 10 444 (9th Cir. 1999) (citing Rose v. State Bar, 49 Cal. 3d 646, 655 (1989)). 11 Moreover, the California State Bar’s Standing Committee on Professional 12 Responsibility and Conduct recommends that “when a lawyer represents multiple 13 clients in the same matter, each client usually is entitled to review information in the 14 client file that any one of the clients is entitled to receive . . . absent a special 15 circumstance, retained counsel should honor Insured’s request to examine the entire 16 file, subject to retained counsel’s right to assert the work product doctrine.” CA Eth. 17 Op. Interim No. 96-0012, at 3 [hereinafter “CA Bar Guidance 2”] (Cal. St. Bar. 18 Comm. Prof. Resp.) (citing Lasky, Haas, Cohler & Munter v. Superior Court, 172 19 Cal. App. 3d 264 (1985)). However, “[i]f retained counsel is unsure whether 20 permitting Insured to review the file will violate retained counsel’s duty of 21 confidentiality to the Insurer, then retained counsel should decline to permit Insured 22 to review the portions of the file over which retained counsel believes Insurer might 23 be able to assert confidentiality.” Id. 24 CDC and WS dispute whether WS has produced the complete litigation file. 25 WS contends that CDC’s request is “misleading” because CDC already has “the 26 case documents” and “[a]ll of [WS]’s reports to [FFIC] regarding the defense of this 27 case,” and all “pleadings and discovery.” WS Opp. 5. CDC replies that WS cannot 28 have turned over the whole file, because “[a]fter four (4) years of litigation in the -9- 3:12-cv-0334-GPC-KSC 1 case, Wood turned over a paltry three (3) memos including one or two e-mails from 2 the Wood firm to the insurance carrier as the purported entirety of the file. 3 Regarding four (4) years of litigation, we are to believe that he had no written 4 communications with the carrier (or anybody), except for the three memos and one 5 or two e-mails?” Pl. Reply 8. CDC also argues that WS’s refusal to allow CDC to 6 participate in oral communications between WS and the insurer, as well as any 7 consultant retained in the case, amounts to a refusal to produce the complete 8 litigation file. Id. 9 At issue appears to be what is meant by the “complete litigation file.” CDC’s 10 lead counsel appears to take the position that the “complete litigation file” includes 11 “a full and complete copy of ALL communications between your respective firms 12 and the insured’s carriers,”as well as the participation of C&J in “ALL future oral 13 and/or written communications between your law firms and the insurance carriers.” 14 See Pl. Reply, Ex. 12, at 2. The Court finds that CDC overstates the meaning of 15 “complete litigation file.” First, CA Bar Guidance 2 contemplates that the litigation 16 “file” refers to physical or written records, including records of oral 17 communications, but not the oral communications themselves. See generally CA 18 Bar Guidance 2. It does not appear to contemplate that the insured should have the 19 right to participate in all oral communications between the counsel and the insurer. 20 Second, CA Bar Guidance 2 states that “[a]ny communication between the insurer 21 and the retained attorney concerning the defense of insured’s claim is a matter of 22 common interest to both insured and insurer [to which] insured has a right.” See id. 23 at 1 (emphasis added). Thus, WS is not required to turn over communications 24 between itself and the insurer that are unrelated to the case. 25 The Court finds that it is unclear whether there is any information in WS’s 26 client file for the case to which FFIC, but not CDC, has been privy. CDC questions 27 the likelihood that “[a]fter four (4) years of litigation,” the litigation file could be so 28 thin. However, the Wood firm was only appointed as counsel on January 7, 2014. - 10 - 3:12-cv-0334-GPC-KSC 1 ECF No. 93. Hence, CDC’s suggestion that WS has been involved in the litigation 2 for four years is misleading. Moreover, this case has been in mediation since 3 January 8, 2014, the day after WS was appointed, during which time the Court has 4 chided the parties for a number of delays. See, e.g., Transcript of April 3, 2015 5 Status Hearing 5–6, ECF No. 121. Thus, the Court does not find it altogether 6 improbable that WS would have only communicated with other parties regarding 7 the case a limited number of times. However, to the extent that WS has withheld 8 from CDC any communications relating to the case to which FFIC has been privy, 9 WS is ORDERED to send copies of these communications to CDC. 10 11 12 D. WS slanting facts in its litigation memoranda to FFIC in order to bolster FFIC’s coverage position against CDC CDC alleges that WS “has made material misrepresentations in writing to 13 CDC and FFIC which directly impact CDC’s potential liability and coverage 14 position.” Pl. Mot. 8. Specifically, CDC alleges that in a litigation report to FFIC 15 dated September 5, 2014, WS misrepresented the timeframe of CDC’s ownership of 16 the Lake and when the pollution occurred in order to support FFIC’s position that 17 the pollution occurred outside of FFIC’s coverage period. See id. WS responds that 18 the e-mail was simply a status report to FFIC about the case which does not impact 19 coverage in any way. WS Opp. 6. While WS may have misstated some portions of 20 the relevant history, these factual errors could easily have been remedied by CDC. 21 Id. 22 Upon review of the e-mail in question, the Court finds that WS’ factual errors 23 do not amount to “material” misrepresentations. The e-mail appears to be a report to 24 FFIC about the status of the case. In the section entitled “historic background,” 25 Wood states that 26 and that 27 28 Pl. Mot., Ex. 6., at 1. While those factual assertions may be - 11 - 3:12-cv-0334-GPC-KSC 1 incorrect, as WS points out, they are also easily remedied. CDC’s lead counsel was 2 copied on the e-mail and could have corrected Wood’s misstatements. Moreover, 3 information such as the and the 4 is readily verifiable. Thus, the Court cannot see how WS’s unsupported 5 misstatements would materially disadvantage CDC were they to later contest those 6 facts with FFIC. 7 8 E. WS submitting briefing to mediator disadvantaging CDC Finally, CDC alleges that WS secretly submitted a separate brief to the 9 mediator arguing for a “[s]trikingly [h]igh [p]ercentage of [l]iability [a]gainst 10 CDC,” as part of WS’s ongoing effort to bolster FFIC’s coverage position against 11 CDC. Pl. Mot. 9. WS argues that this never happened—instead, CDC decided not to 12 use the mediation brief that WS drafted, but it was never shared with the mediator 13 or the other parties. WS Opp. 7. 14 The Court finds that CDC has presented no evidence that WS actually sent 15 any briefing to the mediator. 16 17 F. WS refusing to withdraw Finally, CDC argues that WS refused to withdraw from the representation “in 18 a manner consistent with its ethical obligations to CDC.” Pl. Mot. 9. By CDC’s own 19 admission, what CDC means by this is that “the Wood firm has explained that it will 20 withdraw, but only if it is not required to admit any conflict of interest or breach of 21 ethical duties.” Id. at 10. As WS explains, WS asked FFIC to select new counsel and 22 on December 1, 2015, FFIC’s new counsel sent a substitution of attorney to CDC’s 23 lead counsel. WS Mot. 3. However, CDC’s lead counsel refused to sign the 24 substitution and stated that he would not stipulate to WS’s withdrawal unless Wood 25 admitted that he had engaged in unethical conduct. Id. 26 At the same time, CDC accuses WS of breaching their duty of loyalty to CDC 27 by describing CDC’s disqualification motion to a legal publication as “groundless 28 and disingenuous.” Pl. Reply 4. CDC argues that WS should be subject to sanctions - 12 - 3:12-cv-0334-GPC-KSC 1 for “going into the details of the particular issues with the Court,” admonishing WS 2 that for the purposes of a motion to withdraw “it will be sufficient to state words to 3 the effect that ethical considerations require withdrawal or that there has been an 4 irreconcilable breakdown in the attorney-client relationship.” Pl. Opp. 6 (citing CA 5 Bar Guidance 10). 6 CDC’s request for sanctions is inappropriate given that the Court explicitly 7 directed WS to respond to CDC’s allegations in the October 28, 2015 Sealing 8 Order. But furthermore, the Court rejects the view that an insured can level largely 9 meritless accusations of unethical conduct against appointed counsel and then place 10 that counsel in a position where they are unable either to defend themselves or to 11 gracefully exit the situation by withdrawing as counsel without admitting to 12 unethical conduct that they did not engage in. 13 Thus, the Court finds that WS’s actions in this case do not rise to the level 14 that would satisfy the “strict judicial scrutiny” this Court is required to apply to 15 motions to disqualify counsel. Accordingly, CDC’s motion to disqualify is 16 DENIED. 17 II. 18 For the reasons discussed in Part I, the Court finds that WS has easily met the Motion to Withdraw 19 standard for withdrawal whereby a client has rendered it “unreasonably difficult for 20 [counsel] to carry out his employment effectively.” Accordingly, WS’s motion to 21 withdraw is GRANTED. 22 III. 23 Pursuant to this Court’s October 28, 2015 Sealing Order, parties publicly Motions to Seal 24 filed redacted versions of their motions and now seek to file sealed, unredacted 25 versions of same. Accordingly, parties’ motions to file under seal are GRANTED. 26 CONCLUSION 27 For the foregoing reasons, IT IS HEREBY ORDERED that: 28 1. CDC’s motion to disqualify, ECF No. 144, is DENIED. However, WS - 13 - 3:12-cv-0334-GPC-KSC 1 is ORDERED to send CDC the complete litigation file if they have not 2 already done so. 3 2. WS’s motion to withdraw, ECF No. 156, is GRANTED. 4 3. Parties’ motions to file under seal, ECF Nos. 149, 154, are 5 GRANTED. 6 4. The hearing scheduled for December 17, 2015 is VACATED. 7 5. WS’s ex parte motion to shorten time on the motion to withdraw, ECF 8 9 No. 156, is DENIED as moot. IT IS SO ORDERED. 10 11 DATED: December 17, 2015 12 13 HON. GONZALO P. CURIEL United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 14 - 3:12-cv-0334-GPC-KSC
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