U.S. Equal Employment Opportunity Commission v. Bay Club Fairbanks Ranch, LLC et al, No. 3:2018cv01853 - Document 61 (S.D. Cal. 2019)
Court Description: ORDER Granting Plaintiff's Motion to Disqualify Counsel (Doc. 40 ). Signed by Judge Thomas J. Whelan on 11/6/2019. (jdt)
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U.S. Equal Employment Opportunity Commission v. Bay Club Fairbanks Ranch, LLC et al Doc. 61 1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 14 U.S. EQUAL EMPLOYMENT OPPORTUINITY COMMISSION, v. 18 BAY CLUB FAIRBANKS RANCH, LLC d/b/a FAIRBANKS RANCH COUNTRY CLUB, INC., 19 Defendants. 17 ORDER GRANTING PLAINTIFF’S MOTION TO DISQUALIFY COUNSEL [DOC. 40] Plaintiff, 15 16 Case No.: 18-cv-1853 W (BLM) 20 21 Pending before the Court is Plaintiff U.S. Equal Employment Opportunity 22 Commission’s (“EEOC”) motion to disqualify one of Defendant Bay Club Fairbanks 23 Ranch, LLC d/b/a Fairbanks Ranch Country Club’s (“Bay Club”) attorneys. Bay Club 24 opposes. The Court decides the matter on the papers submitted and without oral 25 argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS the 26 motion [Doc. 40]. 27 28 1 18-cv-1853 W (BLM) Dockets.Justia.com 1 I. INTRODUCTION 2 Defendant Bay Club is represented in this lawsuit by attorneys from Buchalter 3 APC, and attorney Mark Koorenny of the Koorenny Law Group. Koorenny has served as 4 Bay Club’s general counsel since 2009. (Koorenny Decl. [Doc. 49-2] ¶ 2.) 5 In its motion, Plaintiff EEOC seeks to disqualify Koorenny under California Rule 6 of Professional Conduct 3.7(a), which restricts an attorney’s ability to act as an advocate 7 in a case where the attorney will also be a witness. (P&A [Doc. 40-1] 1:7–9.) Bay Club 8 opposes the motion on the basis that (1) the EEOC unreasonably delayed in filing the 9 motion, (2) Bay Club will suffer substantial prejudice, (3) it is unclear whether Koorenny 10 will testify at trial, and (4) it has consented to Koorenny’s dual role as attorney and 11 witness. For the reasons that follow, the Court will grant the EEOC’s motion. 12 13 II. 14 LEGAL STANDARD “A trial court’s authority to disqualify an attorney derives from the power inherent 15 in every court ‘[t]o control in furtherance of justice, the conduct of its ministerial officers, 16 and of all other persons in any manner connected with a judicial proceeding before it, in 17 every matter pertaining thereto.” Kennedy v. Eldridge, 201 Cal.App.4th 1197, 1204 18 (2011) (alterations in original). “[D]isqualification motions involve a conflict between the 19 clients’ right to counsel of their choice and the need to maintain ethical standards of 20 professional responsibility.” Id. “The paramount concern must be to preserve public trust 21 in the scrupulous administration of justice and the integrity of the bar.” Id. “The 22 important right to counsel of one’s choice must yield to ethical considerations that affect 23 the fundamental principles of our judicial process.” Id. 24 25 26 27 III. ANALYSIS The EEOC moves to disqualify Koorenny under California Rule of Professional Conduct 3.7(a), which provides: 28 2 18-cv-1853 W (BLM) 1 2 3 4 A lawyer shall not act as an advocate in a trial in which the lawyer is likely to be a witness unless: (1) The lawyer’s testimony relates to an uncontested issue or matter; (2) The lawyer’s testimony relates to the nature and value of legal services rendered in the case; or (3) The lawyer has obtained informed written consent from the client . . . . 5 Although the rule allows continued representation where the client consents to the 6 attorney’s dual role, a trial court has discretion to disqualify counsel. Lyle v. Superior 7 Court, 122 Cal. App. 3d 470, 482 (1981). However, “in exercising that discretion, the 8 court must weigh the competing interests of the parties against potential adverse effects 9 on the integrity of the proceeding before it and ‘should resolve the close case in favor of 10 the client's right to representation by an attorney of his or her choice . . . .’” Smith, Smith 11 & Kring v. Superior Court, 60 Cal.App.4th 573, 580 (1997) (quoting Lyle, 122 12 Cal.App.3d at 482). 13 In Smith, 60 Cal.App.4th 573, the California Court of Appeal explained that in 14 evaluating a motion to disqualify under Rule 3.7(a), courts should consider three factors. 15 First, “the combined effects of the strong interest parties have in representation by 16 counsel of their choice, and in avoiding the duplicate expense and time-consuming effort 17 involved in replacing counsel already familiar with the case.” Smith, 60 Cal.App.4th at 18 581. “[I]t must be kept in mind that disqualification usually imposes a substantial 19 hardship on the disqualified attorney’s innocent client, who must bear the monetary and 20 other costs of finding a replacement.” Id. (quoting Gregori v. Bank of America, 207 21 Cal.App.3d 291, 300 (1989)). 22 Second, “‘whenever an adversary declares his intent to call opposing counsel as a 23 witness, prior to ordering disqualification of counsel, the court should determine whether 24 counsel’s testimony is, in fact, genuinely needed.'” Smith, 60 Cal.App.3d at 581 (quoting 25 Reynolds v. Superior Court, 177 Cal.App.3d 1021, 1027 (1976) (citation omitted)). “In 26 determining the necessity of counsel’s testimony, the court should consider ‘the 27 significance of the matters to which he might testify, the weight his testimony might have 28 in resolving such matters, and the availability of other witnesses or documentary 3 18-cv-1853 W (BLM) 1 evidence by which these matters may be independently established.’” Id. (quoting 2 Comden v. Superior Court, 20 Cal.3d 906, 913 (1978)). 3 Third, courts should consider the possibility the moving party is using the motion 4 to disqualify for purely tactical reasons. Smith, at 581 (quoting Comden v. Superior 5 Court, 20 Cal.3d at 915). This consideration is important because if counsel was “able to 6 disqualify opposing counsel simply by calling them as witnesses, it would ‘pose the very 7 threat to the integrity of the judicial process that [motions to disqualify] purport to 8 prevent.” Id. (citation omitted). 9 Here, the record does not support a finding that Bay Club would suffer the “usual” 10 hardship imposed on clients by disqualification. To begin, there is no evidence indicating 11 that Koorenny’s disqualification would result in the duplication of litigation expenses or 12 effort. While Bay Club relies on Koorenny’s “decade long” role as its lawyer “who is 13 familiar with its employment practices, procedures, investigations, employees, litigation 14 as well as resolutions of cases” (Opp’n [Doc. 49] 10:12–15), Bay Club provides no 15 information regarding the extent to which Koorenny has been involved in this lawsuit. 16 Although Koorenny is listed as “co-counsel” on Bay Club’s filings, all of its pleadings 17 and briefs, as well as joint motions with the EEOC, have been signed by Buchalter 18 attorneys, and all of Bay Club’s filings are on Buchalter pleading paper. (See e.g. Notice 19 of MTD. [Doc. 7]; P&A [Doc. 7-1]; Corp. Disclosure State. [Doc. 8]; Reply to MTD 20 [Doc. 10]; Answer [Doc. 16]; Notice of Related Case [Doc. 28]; Opp’n to Mot. to Compel 21 [Doc. 47]; Notice of Mot. to Compel [Doc. 56-1], Mot. to Compel [Doc. 56]; Opp’n to 22 Mot. to Disqualify [Doc. 49]; Jt. Mot. Re. ENE [Doc. 26]; Jt. Stip. Re. Protective Order 23 [Doc. 53]; Jt. Disc. Plan [Doc. 29].) Similarly, Buchalter attorneys prepared all 24 declarations concerning discovery issues, appeared in discovery proceedings before 25 Magistrate Judge Schopler, and are involved in the communications with the EEOC and 26 co-defendant Fairbanks Ranch Country Club, Inc. (“FRCCI”) regarding this litigation. 27 (See e.g. Crosby Reply Decl. [Doc. 52-1], Ex. A [Doc. 52-1] p. 1, Ex. B [Doc. 52-1] p. 1, 28 4 18-cv-1853 W (BLM) 1 Ex. C. [Doc. 52-1] Ex. D. [Doc. 52-1]; Boulton Reply Decl. [Doc. 52-3], Ex. A [Doc. 52- 2 3], Ex. B [Doc. 52-3].) 3 In contrast, the only document signed by Koorenny is his declaration filed in 4 support of Buchalter’s opposition to the present motion. In that declaration, Koorenny 5 simply repeats that he has served as Bay Club’s general counsel since 2009, well before 6 the lawsuit was filed. (Koorenny Decl. ¶ 2.) Nowhere does Koorenny provide any 7 indication regarding the amount of work or type of work he has performed in this 8 litigation. (See Id.) Also significant is Koorenny’s appearance at the Early Neutral 9 Evaluation (“ENE”) conference as the client representative, not litigation counsel. 10 In short, the current record strongly suggests Koorenny has had an extremely 11 limited role as an attorney in this litigation and, therefore, Bay Club would not incur the 12 duplicative costs and time-consuming effort that clients usually incur when counsel is 13 disqualified. Additionally, as the EEOC points out, because Koorenny is being 14 disqualified under the attorney-witness rule, he may continue to consult with the 15 Buchalter attorneys and Bay Club regarding the litigation, further ameliorating any 16 potential harm to Bay Club. Accordingly, the Court finds Bay Club would not suffer 17 significant hardship if Koorenny is disqualified. 18 The record also supports a finding that Koorenny’s testimony is needed. Bay Club 19 acknowledges that during the ENE, Koorenny “represented to the Court and counsel for 20 all parties that . . . he would likely be a witness in this case.” (Opp’n 4:22–24; Warren 21 Decl. ¶ 4.) In his declaration, Koorenny admits his “involvement as investigator,” during 22 which he met with Shant Karian, the alleged harasser. (Id. ¶ 8.) In correspondence with 23 the EEOC before the lawsuit was filed, Koorenny also represented that he talked to other 24 staff regarding Claimant’s allegations. (Crosy Decl. ¶ 6, Ex. C [Doc. 40-3] p. 2.) 25 Koorenny also admits he is familiar with Bay Club’s personnel, policies and procedures 26 (Koorenny Decl. ¶ 2), which are also potentially relevant. See Star v. West, 227 F.3d 27 1036 (9th Cir. 2001) (“Once an employer knows or should of [coworker] harassment, a 28 remedial obligation kicks in. [Citation omitted.]”); Hardage v. CBS Broadcasting, Inc., 5 18-cv-1853 W (BLM) 1 427 F.3d 1177 (9th Cir. 2005) (explaining relevance of an employer’s adoption of anti- 2 harassment ‘policy and its efforts to disseminate the policy to its employees….’ [Citation 3 omitted.]”). Based on these facts, the Court is satisfied that Koorenny’s testimony is 4 necessary in this case. 5 The next consideration is whether there is any indication the EEOC filed the 6 motion to disqualify as a litigation tactic. As an initial matter, the above findings— 7 Koorenny’s limited role in this lawsuit and the need for his testimony—suggests that the 8 EEOC’s motion is based on legitimate concerns and is not a litigation tactic. Bay Club, 9 however, argues the EEOC’s “unreasonable” delay in filing the motion is proof that it is a 10 litigation tactic. In support of this argument, Bay Club relies on River West, Inc. v. 11 Nickel, 188 Cal.App.3d 1297 (1987). (Opp’n [Doc. 49] 10:8–10.) 12 But the delay and prejudice present in River West was significantly greater than 13 exists here. In River West the defendant waited 47 months from the filing of the lawsuit 14 to seek disqualification. By then, plaintiff’s attorney had spent 3000 hours in the case 15 and plaintiff had incurred $387,000 in legal fees. In contrast, here, the EEOC “delayed” 16 12 months from the filing of the complaint. 1 And as discussed above, the record 17 demonstrates Koorenny has spent a limited amount of time litigating this case. 18 Additionally, unlike River West, Bay Club is represented by another law firm that is not 19 the subject of the disqualification motion and that firm appears to have taken the leading 20 ore in this case. 21 22 23 1 24 25 26 27 28 The Court rejects Bay Club’s contention that the EEOC delayed two and a half years. Bay Club’s argument is based on the date the EEOC first communicated with Koorenny regarding the Charge of Discrimination, December 5, 2016. (Opp’n 9:22–24.) But this lawsuit was not filed until August 2018. (Compl. [Doc. 1].) Until the lawsuit was filed, the EEOC could not file a motion to disqualify. Moreover, the ENE took place on May 16, 2019. (Minute Entry [Doc. 30].) The EEOC’s motion was filed less than three months after the ENE. See Liberty National Enterprises, L.P. v. Chicago Title Ins. Co., 194 Cal.App.4th 839, 846 (2011) (The stage of the litigation is a consideration in evaluating reasonableness of delay). 6 18-cv-1853 W (BLM) 1 Bay Club also asserts the motion may not yet be ripe because “there is no trial at 2 issue, no testimony at trial by Koorenny or any risk of confusing a jury.” (Opp’n 13:6– 3 7.) In other words, Bay Club seems to be suggesting that Koorenny’s disqualification can 4 be delayed until the parties are closer to trial. The Court is not persuaded for at least two 5 reasons. First, delaying Koorenny’s disqualification would potentially increase the 6 amount of harm Bay Club would suffer to the extent Koorenny would become active in 7 the case. This argument is also at odds with Bay Club’s early argument that the EEOC 8 waited too long to file the motion. (Opp’n10:8–10.) 9 Second, the Court is concerned that Koorenny’s different roles in this case, and 10 confusion concerning which role he is in at any point in the litigation, adversely effects 11 the integrity of these proceedings. For example, while listed as co-counsel on pleadings 12 and identified as a potential witness, Koorenny attended the ENE before Judge Schopler 13 as the client representative. After attending the ENE, Koorenny / Bay Club then 14 disputed—both in the opposition to this motion and apparently in discovery hearings 15 before Judge Schopler—that Koorenny attended the ENE as a client representative. This 16 “confusion” was cleared up by Judge Schopler: “[A]t the ENE, Mr. Koorenny signed in 17 as a party representative, and he represented himself to me as a client representative. It 18 was something that I clarified.” (Crosby Reply Decl., Ex. B at 23:8–10.) 19 The Court is at a loss as to how Koorenny could “forget” that he attended the ENE 20 as the client representative. This is particularly true given the order scheduling the ENE 21 required the personal appearance of the parties. (ENE Order [Doc. 17] ¶ 2.) The incident 22 lends support to the EEOC’s contention that Bay Club has been using the confusion 23 regarding Koorenny’s true role in this case as a litigation tactic, particularly during 24 discovery. Regardless, the Court agrees that Koorenny’s continued roles as counsel, 25 client representative and witness create the appearance of impropriety and threaten the 26 integrity of these proceedings. 27 28 7 18-cv-1853 W (BLM) 1 2 3 4 5 IV. CONCLUSION & ORDER For the reasons set forth above, the Court GRANTS the EEOC’s motion to disqualify Koorenny [Doc. 40]. IT IS SO ORDERED. Dated: November 6, 2019 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 18-cv-1853 W (BLM)
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