Wednesday, November 30, 2016

Client Conflicts Confound Counsel on Class Claims

Walker vs. _________, No. D069713 (D4d1 Oct. 28, 2016)

Counsel represents plaintiffs in two wage-and-hour class actions against the same Employer. The class in the first case is certified. A non-exempt Employee who is a member of the class in Case #1 subsequently got promoted to an exempt position as a low-level manager. She’s now a potential Employer witness in this second—yet-to-be-certified—class case. Indeed, she fired some of the employees in Class #2. So Employer moves to DQ Counsel in Case #2 on the grounds that he might have to cross examine his own client. The trial court agreed.

Counsel raises three issues on appeal: 1. an unnamed member of a certified class like Employee shouldn’t be considered a client for conflicts purposes; 2. even if so, there was no conflict; and 3. even if there’s a conflict, DQ shouldn’t be automatic.

As to the first issue, there’s no doubt that pre-cerification, class members don’t have an attorney-client relationship with the lawyer bringing a class action. But in a number of contexts—such as the no-contact rule and rules concerning privilege—courts have found that there are attorney-client (or at least attorney-client-ish) relations between a lawyer and the members of a certified class. A couple of courts have extended that rationale to conflicts. The court here doesn’t want—or need—to go that far.

Instead, the Court finds it sufficient that the record reflected that Counsel knew that Employee was to have an active defense-side role in Case #2. For some reason, the court finds that to be dispositive as to the creation on an attorney-client relationship in Case #1.

I’m not really following the logic on that. For the conflicts analysis, the salient issue is whether Employee is Counsel’s client in Case #1. If she is, under the current-client conflicts rule, Cal. R. Prof. Cond. 3-310(C), Counsel can’t be adverse to her, including by cross examining her in a depo or at trial in Case #2. But it doesn’t really make any sense why Counsel’s knowledge of Employee’s role in Case #2 makes her a client for conflicts purposes in Case #1, where her role seems to be as an ordinary passive member of a certified class.

I don’t have a super-strong opinion as to whether certification creates an attorney-client relationship between Class counsel and everyone in the class for conflicts purposes. Class member/counsel relations in certified classes present a bunch of perplexing and unresolved issues. It seems that reasonable arguments could be made for categorical no, categorical yes, and also “sometimes.”

The Court here clearly wants to land on “sometimes.” But even in a sometimes regime, I just don’t understand why Employee’s role in the later case should be outcome-determinative regarding whether she was a client in the earlier one. If you weren’t going to draw a bright line rule, it seems like the degree of actual contact or a sharing of confidential information or work product between Attorney and Employee in Case #1 should be a key factor.

Once it is decided that Employee was a client in Case #1, however, the other issues are easier. If someone is your current client, you can’t (absent a waiver) examine her as a hostile witness. As the court explains, “The spectacle of an attorney skewering her own client on the witness stand in the interest of defending another client demeans the integrity of the legal profession and undermines confidence in the attorney-client relationship.” Given that the evidence showed the likely role of Employee in Employer’s defense strategy in Case #2, the conflict was real, not merely speculative.

Finally, the trial court didn’t err in holding that a DQ was essentially automatic. While some recent federal cases say that DQ might not be automatic when class action-specific questions give rise to issues where the interests of parts of a class or certain class members and counsel might diverge, these cases all address issues particular to class actions. The conflicts in this case isn’t like that. If Counsel currently represents Employee in Case #1, he simply can't be adverse to his client by crossing her in Case #2. That’s a regular old conflicts problem, not one somehow intrinsic to the class action context.


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