Wednesday, July 31, 2002
C.A. Overturns Order Disqualifying Lawyer in Discrimination Case
Panel Says Attorney for Opponent’s Ex-Legal Secretary Not Presumed to Have Accessed Privileged Information
By KENNETH OFGANG, Staff Writer/Appellate Courts
An attorney who was retained to represent a former legal secretary for a company he was suing should not have been disqualified in the absence of proof he actually obtained and used confidential information, this district’s Court of Appeal ruled yesterday.
Resolving what Presiding Justice Paul A. Turner called a “very, very close and difficult case,” Div. Five reinstated Los Angeles sole practitioner Michael S. Traylor as counsel for Khybrette Neal in her employment discrimination/wrongful discharge case against Health Net, Inc.
Neal was, prior to her termination, a human resources manager at Health Net. Among her duties was the investigation of employee discrimination complaints, including one by Cynthia Brockett, secretary to an in-house attorney who worked on managed care litigation.
After Neal was fired and retained Traylor as her lawyer, Brockett accessed a computer file that contained information on Neal’s case against the company. Upon learning that Brockett had accessed the file, Health Net suspended—and later fired—her.
Brockett later met with and retained Traylor to sue Health Net. After Traylor notified Health Net he represented Brockett, the company moved to disqualify him from representing Neal.
The company cited a computer record indicating that Brockett had access to the file, which included scanned notes subject to the attorney-client privilege, for more than two hours. Brockett, Neal and Traylor all signed declarations denying that any confidential information had been shared.
Brockett said she only looked at the file for five minutes, only did so because she wanted to obtain Traylor’s name in order to find out if he could represent her, and never saw any lawyer’s or investigator’s notes. The reason the computer indicated she had access to the file for a long time, she explained, is that she forgot to log out.
Traylor said he never received confidential information from Brockett, that Brockett never claimed to have any such information, that he told Brockett that she could not give him information about Neal, and that his discussions with Brockett were confined to her case and did not involve Neal’s.
Los Angeles Superior Court Judge Victor Person granted the motion to disqualify, basing his ruling in part on the company’s evidence that Brockett had accessed a file containing confidential information.
But Turner, writing for the Court of Appeal, said that while it could be inferred from the evidence that Brockett had access to confidential information, the trial judge exceeded his discretion in presuming that the information was passed on to Traylor.
“The [California] cases have consistently concluded that mere exposure to confidential information of the opposing party does not require disqualification,” the presiding justice wrote.
Health Net, he elaborated, failed to show that Brockett gave Traylor any information of any kind about Neal. And even if Traylor had received information, and it was confidential, that alone would not have been enough to justify disqualification, Turner said.
In the absence of misconduct by the attorney, the presiding justice explained, a litigant’s need to preserve confidences must be balanced against the opposing party’s right to sue. Thus, Turner said, the trial court must consider less drastic means of protecting confidentiality, such as protective orders, limiting admission of evidence, sealing records, monetary sanctions, and disciplinary referrals to the State Bar.
The jurist distinguished In re Complex Asbestos Litigation, 232 Cal.App.3d 572 (1991), which upheld the disqualification of an attorney from several lawsuits after he hired a paralegal who had worked for opposing counsel in those cases.
The court, in an opinion by then-Court of Appeal Justice Ming Chin, now of the state Supreme Court, held that where an employee who has confidential information is hired by an adversary to work on matters to which the confidential information relates, there is a rebuttable presumption that the information was conveyed to the new employer.
Neal’s case differs, Turner explained, because Brockett did not work for Health Net on the Neal litigation, and her relationship with Traylor was that of client, not employee. Thus, the presumption discussed by Chin does not apply, Turner said.
“Both Ms. Brockett and Mr. Traylor unequivocally deny she conveyed any confidential information to him,” the presiding justice elaborated. “And, no presumption is available to assist defendants that she transmitted confidential information to Mr. Traylor, which in any event, as a client, she had a right to do….No doubt, if there was evidence Ms. Brockett was in possession of confidential information and she was hired by Mr. Traylor in her capacity as a legal secretary or assistant and worked on this case, then under Complex Asbestos Litigation, disqualification would have been appropriate; but these are not the facts before us.”
Justice Margaret Grignon joined in Turner’s opinion, while Justice Richard Mosk concurred separately.
Mosk agreed that the disqualification order was an abuse of discretion under the precedents cited by Turner, since there was no proof that Traylor actually received or used confidential information. But he said a broader rule should be considered.
“I believe the law ought to be that access to an opposing party’s confidential information without proof of actual knowledge of the confidential information, can, in the discretion of the trial court, be a basis for disqualification of counsel—at least in situations such as the instant case,” he wrote. “The trial court is in the best position to determine whether the access is such that the integrity of the judicial process would be compromised absent disqualification.”
The case was argued by Traylor for the plaintiff and Christine T. Hoeffner of Ballard Rosenberg Golper & Savitt for Health Net.
The case is Neal v. Health Net, Inc., B153290.
Copyright 2002, Metropolitan News Company