Risk Update

Bulk Risk Management — Costco Conflicts Contest Checked by Ethical Screen

Posted Dan Bressler

“L.A. Firm Beats Costco’s Bid to Disqualify It Based on Conflict” —

  • “Costco Wholesale Corp. can’t disqualify the plaintiff’s firm litigating a California woman’s slip-and-fall suit merely because one of its law clerks worked for the discount retailer’s counsel, according to a state appellate court ruling.
  • “Federico Stea worked at Yukevich Cavanaugh as a law clerk while in school, and while waiting for results from the California Bar exam. During that time, he was assigned to the team of litigators handling the defense of Costco in several different cases, the company said. Yukevich left Stea and later accepted a law clerk job at the Los Angeles-based Vaziri Law Group.”
  • “Stea asserted that his work at Yukevich didn’t include confidential attorney-client information and that he only performed menial tasks on Costco files. Costco failed to explain how that explanation was insufficient, Justice Judith Ashmann-Gerst wrote in the unpublished opinion.”
  • “Vaziri’s screen was implemented before Stea started work—he was explicitly told he would not be working on any Costco-related cases—and included the creation of separate email distribution lists to prevent Stea from receiving Costco-related emails. There also were locked file cabinets he didn’t have access to, Ashmann-Gerst said.”

“Costco Can’t Disqualify Shopper’s Attys In Injury Case” —

  • “A California appeals court has refused to disqualify attorneys representing a woman suing Costco for slip-and-fall injuries, saying a staffer working for the plaintiff’s counsel, who previously worked on similar Costco cases for defense counsel, was properly prevented from working on Costco cases.”
  • “Costco had argued that because Federico Stea, a nonattorney staff member employed by Devora’s counsel, Vaziri Law Group, had previously worked for defense counsel Yukevich Cavanaugh on at least 20 Costco slip-and-fall cases, Stea possessed confidential attorney-client information that may have been disclosed in the current case.”
  • “On appeal, Costco argued that plaintiff’s counsel should be disqualified because Vaziri Law Group did not implement proper ethical screening procedures before Stea was hired. The panel on Wednesday disagreed, however, saying Vaziri Law Group and Stea’s supervising attorney, David Shay, took reasonable and timely measures to implement screening. The firm told Stea before he was hired that he would not be allowed to work on any Costco cases, and the panel said ‘there would have been no rational reason to implement any other screening procedures until Stea had accepted employment,’ according to the opinion.”
  • “‘These declarations, and the reasonable inferences arising from them, supported the trial court’s findings and implied findings that VLG implemented various screening procedures both before and as soon as Stea began working for VLG, and that those procedures were in fact effective in ensuring that Stea never worked on Costco matters or communicated anything he may have learned at the Yukevich firm to VLG,’ the panel said in an unpublished opinion.”