Risk Update

Conflicts & Disqualification News — “Partial” DQ of Parent-Child Lawyers v. Client, AG Legal Advice Pre Investigation

Court of Appeal: Ethics Rule Didn’t Justify Total Disqualification of Lawyers” —

  • “The two members of a father-and-son law firm were properly barred from representing the firm in its fraud/breach-of-contract action against two former clients who failed to pay for services and a lawyer, the Fifth District Court of Appeal held yesterday, but declared that there was no reason to order that they play no role in the trial preparation.”
  • “Presiding Justice Brad Hill said in an unpublished opinion: ‘We hold the trial court acted within its discretion in disqualifying the Firm’s attorneys from representing the Firm at trial because they will likely be called as witnesses, carrying a significant risk of juror confusion and prejudice to the defendants. However, the trial court abused its discretion by disqualifying the Firm’s attorneys from representing the Firm in all pretrial phases of the litigation without making any findings as to how their continued behind-the-scenes activities preceding trial would undermine the purposes of the advocate-witness rule.'”
  • “It was Stanislaus Superior Court Judge John D. Freeland who barred Michael J. Dyer and Dustin J. Dyer from doing any legal work for their Stockton firm, The Dyer Law Firm, in its action against ex-clients Karla Sam-Sin and Fernando Sam-Sin and Modesto attorney Mark S. Nelson. The Dyer Law Firm was representing the San-Sins in litigation. Nelson was allegedly in complicity with the San-Sins in causing the Dyers to change a portion of their retainer agreement with the Sam-Sins to mirror the arrangement the clients supposedly had with their previous lawyer not to charge for a certain portion of the work, although there was no such arrangement.”
  • “In his opinion partially reversing and partially affirming the order, the presiding justice said: ‘[T]his is not a matter of the Dyers representing themselves, as Nelson often puts it; nor is this a matter of the Firm representing itself, as the Dyers sometimes frame it. Despite the Firm being a closely held corporation owned and directed exclusively by the Dyers, this is still a case with a client (the Firm) being represented by counsel (the Dyers). This is not a case of self-representation. The distinction matters because, if the Dyers were truly representing themselves in propria persona, there would be a good argument that the advocate-witness rule would not apply. Various appellate courts around the country—though none in California, to our knowledge—have held that a ‘lawyer-litigant’ has a right to appear pro se and should not be disqualified from doing so under the advocate-witness rule.'”
  • “Hill noted that when Nelson represented himself, he did so as a ‘lawyer-litigant.'”
  • “Rejecting the contention that Nelson waived a disqualification motion by waiting 21 months before bringing it, the jurist said that ‘[a]bsent a prima facie showing of extreme prejudice caused by the delay, there was no waiver of the right to seek ‘ and no such showing was made. He remarked: ‘This was not an eleventh-hour, eve-of-trial motion (nor a midtrial motion…).New counsel will have plenty of time to get up to speed, and the Firm will not be duplicating any expenses in the process of replacing counsel because the Dyers had been representing the Firm for free.'”
  • “He declared that Nelson’s motion ‘clearly has merit with respect to protecting the integrity of the judicial process at the forthcoming trial” because “having the Dyers serve as both attorneys and witnesses at trial carries an unnecessary risk of confusing the jury and biasing the jury.'”

‘Conflict of interest’: Idaho AG gave officials legal advice, then investigated them” —

  • “An Ada County judge ruled Thursday that Idaho Attorney General Raúl Labrador had a “notable conflict of interest” when his office began investigating officials with the Idaho Department of Health and Welfare over how it distributed federal child care grants.”
  • “The health officials were the attorney general’s clients. And a lawyer under Labrador had advised them that the grants in question were legally distributed.”
  • “‘The attorney general provided an opinion to a client and cannot now seek to investigate whether… the client violated the law on the same issue,’ 4th Judicial District Judge Lynn Norton wrote in Thursday’s ruling.”
  • “Labrador’s office demanded that the health officials hand over records related to the program around the same time Idaho lawmakers approved an audit of the grants, amid concerns that the federal funds weren’t distributed properly. Lawmakers dictated that the funding go to programs serving kids 5 to 13. Labrador previously told the Idaho Statesman that he’s investigating whether those directions were followed.”
  • “Central to the health officials’ case are two legal opinions, written by former deputy attorney general Daphne Huang, who advised health department officials that the child care grants were distributed legally.”
  • “Huang issued one opinion in November, during former Attorney General Lawrence Wasden’s tenure, and a nearly identical opinion in January, after Labrador assumed office and lawmakers questioned Jeppesen about the grants.”
  • “But the legal advice created ‘a client relationship’ with health department officials and a “duty to act in protection” of the department’s interests, Norton wrote. Idaho State Bar ethical rules prohibit attorneys from advocating against their clients’ interests.”
  • “Norton also wrote that an attempt by Labrador’s aides to seize the work phone of a former attorney assigned to the department shows that the attorney general’s office failed to create a sufficient ethical firewall between investigating attorneys and the lawyers advising the Department of Health and Welfare.”
  • “Thursday’s ruling is the first time a judge has publicly analyzed the unique conflict between the executive branch officials and their own attorney. It’s among a handful of clashes between Labrador and state agencies that have marked the Republican’s first term in office.”