In 2014, Fluidmaster hired E-STET to help it with the discovery in the class actions. That discovery entailed production of some 140,000 pages of Fluidmaster documents, plus the withholding of another 10,000 pages of documents claimed by Fluidmaster to be privileged. Elizabeth Pollock was E-STET's lead attorney on the project but, in January 2016, she found other employment.

Ms. Pollock changed jobs again in July 2017. She began working for Crowell's Los Angeles office as a “discovery attorney.” She later explained that she had been approached by an outside recruiter in March and had been asked “extensively about potential conflicts” by a recruiting lawyer at Crowell in April. In late April she completed a questionnaire about past employment and identified four companies that had engaged one of her previous employers. One was Fluidmaster. She then was contacted by Crowell's professional responsibility “counsels” (two attorneys at Crowell) but did not volunteer and was not asked about “any facts or communications regarding Fluidmaster that would be considered confidential.”

On the day she began work for Crowell, the firm sent out an “ethics wall notice” to all personnel prohibiting any communication with her on the Fluidmaster plumbing products litigation, and specifically prohibiting attorneys working on the Fluidmaster litigation from using her services. Crowell also sent a courtesy letter to Fluidmaster's general counsel to notify Fluidmasater of Ms. Pollock's hiring and the ethical screen.

Fluidmaster almost immediately sought disqualification of the entire Crowell firm.

In September 2017, the trial court ordered Crowell disqualified. The trial court did not believe automatic vicarious disqualification was required but decided that, given Ms. Pollock's continued employment at Crowell, the balancing of factors augured against the efficacy of Crowell's ethical screen.

Fireman's Fund and Crowell appealed, and the coverage litigation was put on hold.

Then, in February 2018, during the pendency of the appeal, Ms. Pollock left Crowell.

The appellate court asked the parties whether there was any evidence before the trial court on the disqualification motion that showed that Ms. Pollock had shared any of Fluidmaster's confidential information with any person at Crowell; Fluidmaster conceded that there was no such evidence.

The Appellate Court's Decision

The appellate court reversed the disqualification order and returned the case to the trial court with directions to reevaluate its disqualification decision in light of Kirk v. First American Title Ins. Co., 183 Cal.App.4th 776 (2010) – specifically the Kirk factors as to whether any confidential information actually had been disclosed.

In its decision, the appellate court assumed, without deciding, that Ms. Pollock was conflicted out of representing Fireman's Fund in the coverage litigation brought by Fluidmaster given the “substantial relationship” between her work for E-STET on Fluidmaster's behalf and Crowell's work on Fireman's Fund's behalf against Fluidmaster.

The appellate court then explained that the fact that there was no evidence that Ms. Pollock had actually shared any confidences was important because, under Kirk, once a disqualified attorney has left the disqualified firm, the “only real question” was whether any confidences had been shared with that firm.

The appellate court said that, given the lack of evidence at the original hearing of any shared confidences, it had to decide whether the case should be returned with directions to vacate the disqualification order outright and reinstate Crowell or whether the case should be sent back for reconsideration. It decided that the case should be sent back to the trial court for a “retroactive evaluation of any possible sharing” during which the trial court “may consider the elements of the ethical wall constructed” by Crowell and the likelihood that confidential information actually had been conveyed.

To guide the trial court on remand, the appellate court recounted the factors from Kirk bearing on evaluating the retroactive “strength” of the ethical wall:

(1) Size, or lack thereof. (The appellate court explained that an “overarching factor is the size of the target firm” because the “large law firm of the early 21st Century can effectively isolate a disqualified lawyer from its attorneys working on the disqualified attorney's former client's matter.” Conversely, the smaller the firm, the stronger the case for a rule of vicarious disqualification, if only because in such a context “it takes no imagination” to perceive the ease by which a former client's confidences might be disclosed.)

(2) The geographical, physical, and departmental distance between the disqualified attorney and the attorneys working on matters affecting the disqualified attorney's former client.

(3) The nature, if any, of the target law firm's prohibitions against the discussion of confidential information.

(4) The existence, if any, of rules and procedures to prevent access to confidential information and files.

(5) Whether the disqualified attorney has some financial incentive in regard to the representation against the former client.

(6) The existence if any of any supervisorial relationship between the disqualified attorney and the attorneys working on any former client matters.

(7) The speed with which the former client was notified of the target firm's employment of the disqualified attorney.

The case is Fluidmaster, Inc. v. Fireman's Fund Ins. Co., No. G055469 (Cal. Ct.App. June 26, 2018). Attorneys involved include: Grignon Law Firm and Margaret M. Grignon for Defendants and Appellants. Pillsbury Winthrop Shaw Pittman, Robert L. Wallan and Mariah L. Brandt for Plaintiff and Respondent.