Issue
In City and County of San Francisco v. Cobra Solutions, Inc., (2004 Daily Journal D.A.R. 6962, Cal.App. 1 Dist., June 10, 2004), the California Court of Appeal addressed the issue of whether a city attorney and his entire office should be disqualified from representing the city in a fraud lawsuit against a company that the city attorney had previously represented in private practice.
Facts
Cobra Solutions, Inc. retained attorney Dennis Herrera in September 2000 to represent it in various business matters, including dealings with the City of San Francisco and its Department of Building Inspections. In November 2001, Herrera was elected San Francisco City Attorney. Prior to Herrera taking office, the City Attorney began an investigation into City’s technology contracting. In March 2003, the City sued Cobra after it uncovered evidence that Cobra had made payments to fictitious business entities set up by the department head of the Department of Building Inspection. Cobra asked the trial court to disqualify Herrera and the entire City Attorney’s office from representing City in the lawsuit against it. The trial court granted Cobra’s request and City appealed the decision.
Appellate Court Decision
The Court of Appeal held that where an attorney leaves private practice to become the head of a public law office, the entire public law office must be disqualified from participating in matters that are substantially related to the head of the office’s private representations. However, the Court specifically limited its holding “to cases in which the conflicted civil attorney is the head of a public law office.”
The Court noted that professional ethics require an attorney to avoid conflicts of interest where duties owed to different clients are in opposition. Successive representation of clients who have adverse interests raises ethical concerns over confidentiality. In private practice, a substantial relationship test is used to determine if an attorney must be disqualified. If there is a substantial relationship between the subjects of the prior and the current representation, “access to confidential information by the attorney in the course of the first representation (relevant, by definition, to the second representation) is presumed and disqualification of the attorney’s representation of the second client is mandatory.” A disqualification in such a case extends to the attorney’s entire firm.
Previous California case law has established that where an attorney moves from a public law office to the private sector, or from one public law office to another public law office, disqualification of a disqualified attorney’s entire law office is not automatic. Instead, an “ethical screen” may be implemented to exclude the disqualified attorney from any involvement in the matter giving rise to the conflict of interests.
However, the Court rejected City’s argument that the entire City’s office should not be disqualified because Herrera had been screened from participation in the Cobra matter. The Court concluded that where “the disqualified attorney is the head of a public law office, it raises special concerns that an ethical screen cannot adequately address.” It reasoned that Herrera, as the head of the City Attorney office, retained the power to set agency policy and influence and review the other attorneys who will handle the Cobra case. Because the civil fraud lawsuit involved matters substantially related to Herrera’s representation of Cobra, the Court concluded that Herrera and the entire City Attorney’s office is disqualified from representing City in the lawsuit.
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