References, Confidentiality: Law Firm May Be Disqualified If It Substitutes Into Case In Which One Of Its Attorneys Participated As A Court Appointed Settlement Officer

The Disqualification Outcome Hinges On Whether The Attorney-Settlement Officer Received Confidential Information

     Bird’s-eye view of the Great Wall of China.  Jean E. Norwood, photographer.  1979.  Library of Congress.

     Attorney Banuelos participated as a settlement officer on a “CRASH” panel mediating an employee-employer dispute in Los Angeles Superior Court.  “CRASH” stands for “Civil Referee Assisted Settlement Hearing,” and the CRASH panel consisted of two attorneys and one judge.  A little less than six months after the mandatory settlement conference, Banuelos’ law firm substituted in to represent the employer in the dispute, and the employee moved to disqualify Banuelos’ law firm.

     The trial court denied the disqualification motion, holding that even if Banuelos received confidential information – an issue the court did not decide – adequate screening measures could be established to ensure Banuelos did not discuss the case with anyone at the firm.  The employee filed a writ.  Castaneda v. Superior Court (Perrin Bernard Supowitz, Inc., Real Party in Interest), No. B259950 (2/8 June 24, 2015) (Rubin, Flier Grimes) (published).

      The employee’s petition was granted, with directions.  The trial court must now consider whether Banuelos participated in ex parte communications with the employee’s representatives.  If ex parte communications occurred, then it will be presumed that confidential information was exchanged, and the law firm will be vicariously disqualified.  No ethical wall will prevent vicarious disqualification if the attorney received confidential information.

     COMMENT:  I have participated as a “mediator” in a settlement conference program in LASC.  The status of attorneys who participated in the program was not clearly defined.  Participants were informed that the formal mediation privilege did not apply, because these were settlement conferences ordered under rule 3.1380.  However, as the Court of Appeal points out in Castaneda, its concern is not with the laws of mediation confidentiality, but rather with “the law of attorney disqualification based on confidential communications, wherever they may occur.”