Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-01770/USCOURTS-caed-2_13-cv-01770-9/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

U.S. LEGAL SUPPORT, INC., 

A Texas corporation, 

Plaintiff, 

v. 

AMEEN HOFIONI, an individual,

MORGAN ALBANESE, an 

individual, THE LIT GROUP, 

a Nevada corporation, 

HUTCHINGS COURT REPORTERS, 

LLC, a California 

corporation, LITIGATION 

SERVICES, a Nevada 

corporation, 

Defendants. 

No. CIV. S-13-01770 LKK/AC 

ORDER 

Plaintiff U.S. Legal Support, Inc. alleges that defendants 

Ameen Hofioni and Morgan Albanese, its former employees, 

misappropriated certain trade secrets, confidential information, 

and personal property, both for their own benefit and for the 

benefit of their new employer, defendant The LIT Group, and its 

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affiliated entities, defendants Hutchings Court Reporters, LLC 

and Litigation Services.1 

 Defendants’ attorneys, from the law firm of Squire Patton 

Boggs (US) LLP2 (“Squire Patton”), have moved to withdraw as 

counsel for defendant Hofioni. (ECF No. 50.) Hofioni opposes this 

motion, and moves in turn to disqualify Squire Patton as counsel 

for all defendants. Daniel L. Baxter and George A. Guthrie of the 

law firm of Wilke Fleury Hoffelt Gould and Birney LLP (“Wilke 

Fleury”) represent Hofioni for the purposes of these motions. 

Having thoroughly considered the matter, the court has 

determined that Squire Patton committed at least three breaches 

of its duty of loyalty to Hofioni, each of which is sufficient, 

in and of itself, to disqualify Squire Patton as counsel for all 

defendants herein. Accordingly, the court will disqualify Squire 

Patton as counsel for all defendants, for the reasons set forth 

below. 

I. PROCEDURAL BACKGROUND 

The court heard Squire Patton’s motion to withdraw on April 

21, 2014. After considering the parties’ arguments, the court 

issued an Order directing Squire Patton to provide notice as to 

whether the firm would consent to turn over to Wilke Fleury 

copies of any communications with the Non-Hofioni Defendants 

regarding “(i) the circumstances leading up to Squire Patton’s 

 

1 Hereinafter, the term “Entity Defendants” collectively means The 

LIT Group, Hutchings Court Reporters, LLC, and Litigation 

Services. The term “Non-Hofioni Defendants” collectively means 

Morgan Albanese and the Entity Defendants. 

2 On June 1, 2014, the firm’s name changed from “Squire Sanders 

(US) LLP” to “Squire Patton Boggs (US) LLP.” 

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decision to withdraw from representing Hofioni, including, but 

not limited to, settlement discussions with plaintiff, and 

efforts to obtain Hofioni’s signature on the Common 

Representation Agreement . . . and (ii) any agreement to pay the 

costs of Hofioni’s legal representation and/or to indemnify him 

for damages herein.” (Order, ECF No. 57.) The Order further 

provides that if Squire Patton refused to turn over these 

documents, then the court would disqualify Squire Patton as 

counsel for all of the defendants. (Id.) 

On May 7, 2014, Squire Patton notified the court that it 

would turn over the documents in question to Wilke Fleury. (ECF 

No. 59.) On May 9, 2014, Mr. Baxter filed a declaration averring 

that he would “submit an additional statement and/or declaration 

regarding Squire Patton’s motion to withdraw” no later than May 

23, 2014. (ECF No. 60.) 

On May 23, 2014, Hofioni filed a brief, which, together with 

a declaration from Mr. Baxter, argue for Squire Patton’s 

disqualification as counsel for all defendants herein. (ECF 

No. 61.) After reviewing these filings, the court gave Squire 

Patton fifteen days to file either an opposition or a statement 

of non-opposition thereto. (ECF No. 62.) 

On June 13, 2014, Squire Patton filed an opposition, along 

with a declaration by attorney Stacie D. Yee. (ECF No. 65.) As 

the latter contains as exhibits a number of communications 

covered by the attorney-client privilege, the court granted 

Squire Patton’s request to seal this filing. (ECF No. 66.) 

After further considering the matter, the court ordered 

Hofioni to file a declaration “describing in detail the 

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confidential information, if any, that he has disclosed to Squire 

Patton since the commencement of this action, and his view of how 

this disclosure might prejudice him in these proceedings or other 

litigation between any of the parties.” (Order, ECF No. 70.) On 

July 14, 2014, Hofioni submitted this declaration to the court 

via email and served it on Squire Patton. (ECF No. 72.) Upon 

receipt of this declaration, Squire Patton requested leave to 

file a response, which the court granted. (Order, ECF No. 75.) On 

July 23, 2014, Squire Patton submitted its response, and also 

served it on Wilke Fleury. (ECF No. 78.) 

II. STANDARDS 

A. Standard re: withdrawal 

Under Local Rule 182(d), “an attorney who has appeared may 

not withdraw leaving the client in propria persona without leave 

of court upon noticed motion and notice to the client and all 

other parties who have appeared.” The Local Rule also provides 

that withdrawal as counsel is “governed by the Rules of 

Professional Conduct of the State Bar of California, and the 

attorney shall conform to the requirements of those Rules.” 

California Rule of Professional Conduct 3-310(C) forbids, 

absent consent, the concurrent representation of clients with 

adverse interests. It provides that “[a] member shall not, 

without the informed written consent of each client: (1) Accept 

representation of more than one client in a matter in which the 

interests of the clients potentially conflict; or (2) Accept or 

continue representation of more than one client in a matter in 

which the interests of the clients actually conflict . . . .” 

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Under the Rule, “informed written consent” means “the client’s or 

former client’s written agreement to the representation following 

written disclosure,” and “disclosure” means “informing the client 

or former client of the relevant circumstances and of the actual 

and reasonably foreseeable adverse consequences to the client or 

former client.” Cal R. Prof. Conduct 3-700(A)(1), (2). 

Additionally, “the duties to which an attorney in 

[California] are subject are not exhaustively delineated by the 

Rules of Professional Conduct, and . . . these rules are not 

intended to supersede common law obligations.” Santa Clara Cnty. 

Counsel Attys. Ass'n. v. Woodside, 7 Cal. 4th 525, 548 (1994), 

overruled by statute on other grounds as recognized in Coachella 

Valley Mosquito & Vector Control Dist. v. Cal. Pub. Emp’t 

Relations Bd., 35 Cal. 4th 1072, 1077 (2005). One such duty is 

the duty of loyalty, which encompasses “an attorney’s duty to 

protect his client in every possible way[;] it is a violation of 

that duty for him to assume a position adverse or antagonistic to 

his client without the latter’s free and intelligent 

consent . . . .” Anderson v. Eaton, 211 Cal. 113, 116 (1930). The 

California Supreme Court has elaborated as follows: 

The most egregious conflict of interest is 

representation of clients whose interests are 

directly adverse in the same litigation. Such 

patently improper dual representation 

suggests to the clients — and to the public 

at large — that the attorney is completely 

indifferent to the duty of loyalty and the 

duty to preserve confidences. However, the 

attorney’s actual intention and motives are 

immaterial, and the rule of automatic 

disqualification applies. The rule is 

designed not alone to prevent the dishonest 

practitioner from fraudulent conduct, but 

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also to keep honest attorneys from having to 

choose between conflicting duties, or being 

tempted to reconcile conflicting interests, 

rather than fully pursuing their clients’ 

rights. The loyalty the attorney owes one 

client cannot be allowed to compromise the 

duty owed another. 

People v. SpeeDee Oil Change Sys., Inc., 20 Cal. 4th 1135, 1147 

(1999) (internal citations and quotations omitted). 

 California Rule of Professional Conduct 3-700 governs 

termination of employment as counsel. Withdrawal is mandatory if 

“[t]he member knows or should know that continued employment will

result in violation of these rules or of the State Bar 

Act . . . .” Cal R. Prof. Conduct 3-700(B)(2) (emphasis added). 

Withdrawal is permissive if “[t]he continued employment is likely

to result in a violation of these rules or of the State Bar 

Act . . . .” Cal R. Prof. Conduct 3-700(C)(2) (emphasis added). 

Withdrawal is also permitted if “[t]he member believes in good 

faith, in a proceeding pending before a tribunal, that the 

tribunal will find the existence of other good cause for 

withdrawal.” Cal. R. Prof. Conduct 3-700(C)(6).3

 In any case, 

“[a] member shall not withdraw from employment until the member 

has taken reasonable steps to avoid reasonably foreseeable 

prejudice to the rights of the client, including giving due 

 

3 Squire Patton also notes that withdrawal is permitted where 

“[t]he client . . . by other conduct renders it unreasonably 

difficult for the member to carry out the employment 

effectively.” Cal. R. Prof. Conduct § 3-700(C)(1)(d). As the 

conflict presented was raised by plaintiff’s refusal to settle 

with Hofioni, it does not appear that Hofioni’s conduct is 

implicated. Accordingly, this basis for withdrawal has been 

disregarded herein. 

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notice to the client, allowing time for employment of other 

counsel, complying with rule 3-700(D) [addressing transfer of 

client papers and property and refund of fees], and complying 

with applicable laws and rules.” Cal. R. Prof. Conduct 3-

700(A)(2). 

 Whether to allow withdrawal is a decision within the court’s 

discretion. U.S. v. Carter, 560 F.3d 1107, 1113 (9th Cir. 2009). 

B. Standard re: disqualification 

Motions for disqualification are governed by state law. In 

re Cnty. of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000). 

When a law firm simultaneously represents clients who 

(i) have potentially- or actually-conflicting interests and 

(ii) have not each provided their informed, written consent to 

the representation, “[w]ith few exceptions, disqualification 

follows automatically, regardless of whether the simultaneous 

representations have anything in common or present any risk that 

confidences obtained in one matter would be used in the other.” 

SpeeDee Oil Change, 20 Cal. 4th at 1147. Accord Flatt v. Superior 

Court, 9 Cal. 4th 275, 284 (1994) (“Indeed, in all but a few 

instances, the rule of disqualification in simultaneous 

representation cases is a per se or ‘automatic’ one”). This 

prohibition against simultaneous representation extends to all 

members of the firm, under the rationale “that attorneys, working 

together and practicing law in a professional association, share 

each other’s, and their clients’, confidential information.” 

SpeeDee Oil Change, 20 Cal. 4th at 1153-54. 

Because motions to disqualify are often tactically 

motivated, they are strongly disfavored and, accordingly, are 

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subject to “particularly strict judicial scrutiny.” Optyl Eyewear 

Fashion Intern. Corp. v. Style Cos., Ltd., 760 F.2d 1045, 1050 

(9th Cir. 1985) (citation omitted). The party seeking 

disqualification bears the burden of establishing the existence 

of a disqualifying conflict of interest by a preponderance of the 

evidence. H.F. Ahmanson & Co. v. Salomon Bros., Inc., 229 Cal. 

App. 3d 1445, 1452 (1999). 

III. ANALYSIS 

As many of the relevant acts and communications are 

protected by the attorney-client privilege, the court will refer 

to the evidence on which it has based its decision in a more 

oblique fashion than normal. 

A. Despite the existence of a potential conflict, 

Squire Patton failed to obtain Hofioni’s consent 

to common representation at the outset of 

litigation. 

 This case was filed on August 26, 2013. That Hofioni and the 

Non-Hofioni Defendants had a potential conflict of interest 

should have been apparent from the outset. Yet Squire Patton 

failed to secure Hofioni’s written consent to the common 

representation until January 27, 2014. (Hofioni Decl. ¶ 9, ECF 

No. 53.) In so doing, Squire Patton violated California Rule of 

Professional Conduct 3-310(C)(1), which provides, in pertinent 

part, that “[a] member shall not, without the informed written 

consent of each client . . . [a]ccept representation of more than 

one client in a matter in which the interests of the clients 

potentially conflict.” A delay of a few days or weeks might be 

excusable given the circumstances of this case: Hofioni had 

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started his job with the Entity Defendants scarcely a month 

before its filing, and plaintiff had just moved for a complex 

temporary restraining order and preliminary injunction. But a 

five-month delay, in the court’s view, is a sufficient breach of 

the Rules of Professional Conduct to “automatically” warrant 

disqualification. SpeeDee Oil Change, 20 Cal. 4th at 1147. 

B. Despite the existence of an actual conflict, Squire 

Patton continued to represent all of the 

defendants without Hofioni’s written consent. 

Confidential emails submitted to the court reveal that, at 

some point between January 7 and January 15, 2014, Squire Patton 

should have been aware that an actual conflict of interest had 

arisen between Hofioni and the Entity Defendants. But subsequent 

emails show that Squire Patton failed to verify whether it had 

obtained Hofioni’s consent to the common representation until 

January 23 or 24, 2014. By so delaying, Squire Patton failed to 

comply with California Rule of Professional Conduct 3-310(C)(2), 

which provides, in pertinent part, that “[a] member shall not, 

without the informed written consent of each client . . . 

continue representation of more than one client in a matter in 

which the interests of the clients actually conflict . . . .” 

While eight to seventeen days’ delay may – may – be excusable 

under some circumstances (e.g., an omission by a sole 

practitioner facing a personal emergency and the press of 

multiple cases), no such exculpatory circumstances are present 

here. Squire Patton is a multinational, highly-sophisticated 

entity and ought to have processes in place to prevent the sorts 

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of omissions implicated herein. That the firm became aware of an 

actual conflict and failed to promptly verify that it had 

Hofioni’s consent in place is sufficient grounds for 

disqualification as a breach of the Rules of Professional Conduct 

and the broader duty of loyalty. 

Squire Patton may object that its failure was merely a 

clerical oversight rather than any sort of deliberate tactic or 

omission. A federal bankruptcy case, In re Jaeger, 213 B.R. 578, 

586-87 (C.D. Cal. 1997), is instructive in this regard. The court 

therein disqualified the law firm of Greenberg Glusker Fields 

Claman & Machtinger LLP for failing to obtain written, informed 

consent from multiple defendants before representing them in 

litigation. In reaching this decision, the court noted: 

The beginning of an attorney’s file for a new 

matter should contain three types of 

documents to implement these rules. First, 

there should be the engagement letter, which 

spells out the scope of the representation 

that the attorney is to undertake for the 

client. Second, there should be a memo 

disclosing the results of the internal 

conflicts check at the law firm. Third, if 

the engagement involves the representation of 

more than one client, the file should contain 

the informed written consent of each client 

in the engagement. These documents should be 

at the beginning of the file, so that there 

is never any doubt that they have been 

obtained and preserved, in case any question 

should later arise about them. 

The standard of practice outlined here is sound, and the 

requirements of California Rule of Professional Conduct 3-

310(C)(1) and (2) are plain; they ought to be followed by 

attorneys in every conceivable practice setting. Squire Patton’s 

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failure to follow them, and its concurrent representation of 

clients with potential, and then actual, conflicts warrants 

disqualification.

C. Squire Patton failed to provide Hofioni with 

adequate disclosures when it ultimately sought his 

consent.

Squire Patton belatedly sought Hofioni’s consent by 

prompting him via email for his signature on January 24 and 27. 

(Hofioni Decl. ¶ 9, ECF No. 53.) Yet the firm did not supplement 

the written disclosures that it had provided to him at the 

commencement of litigation. The relevant Rule of Professional 

Conduct defines “disclosure” as “informing the client or former 

client of the relevant circumstances and of the actual and 

reasonably foreseeable adverse consequences to the client or 

former client.” Cal R. Prof. Conduct 3-700(A)(1) (emphasis 

added). Courts generally interpret these phrases to mean written 

disclosures of the sort that Squire Patton initially sent 

Hofioni. See, e.g., Sharp v. Next Entertainment, Inc., 163 Cal. 

App. 4th 410, 431 (2008) (“The written waivers demonstrated that 

the Guild and plaintiffs understood and acknowledged the presence 

of all purported conflicts of interests and the material risks of 

continued representation by the Rothner firm. Plaintiffs and the 

Guild made rational choices armed with full disclosures and 

provided informed written consent to the simultaneous 

representation by the Rothner firm.”) Such disclosures are 

entirely appropriate at the commencement of litigation, when a 

conflict is one among many possibilities that could arise. But 

the litigation herein had progressed for five months. The 

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“relevant circumstances” and/or “actual and reasonably 

foreseeable adverse consequences” for Hofioni included Squire 

Patton’s imminent termination of its representation of him. While 

the earlier disclosures contemplate termination, they do so as an

ex ante possibility rather than as an imminent certainty. 

There appear to be no cases directly on-point, but the 

California appellate opinion cited above approvingly quotes 1 

Geoffrey C. Hazard & W. William Hodes, The Law of Lawyering § 

10.4 (3d ed. 2008 supp.) for the proposition that “The concept of 

informed consent is a familiar one. It signifies that a person 

making an important decision does so on the basis of adequate 

knowledge of the facts and an awareness of the consequences of 

decision.” Sharp, 153 Cal. App. 4th at 430. Squire Patton knew 

of, but failed to disclose, the existence of an actual, existing 

conflict between Hofioni and the Non-Hofioni Defendants. As such, 

Hofioni lacked “adequate knowledge of the facts” and “an 

awareness of the consequences” when he gave his written consent 

to common representation in late January. 

 The court does not reach the question of what disclosures 

would have been adequate under these circumstances. Complex 

issues obviously arise from the firm’s duty of confidentiality to 

the Non-Hofioni Defendants – which only reinforces the importance 

of having obtained Hofioni’s consent at the outset. But it is 

sufficiently clear that presenting Hofioni with disclosures more 

appropriate to the commencement of litigation, and failing to 

supplement these disclosures in any way, was insufficient to meet 

the standards of the Rules of Professional Conduct and the firm’s 

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broader duty of loyalty to Hofioni. Under these circumstances, 

disqualification of Squire Patton is, again, warranted. 

IV. CONCLUSION 

 The court does not reach this conclusion lightly. 

Disqualification motions are a low-cost means for unscrupulous 

litigants to inflict maximum confusion on their opponents, and as 

such, are strongly disfavored. That said, attorneys bear a duty 

of undivided loyalty to each of their clients, regardless of any 

particular client’s contribution to the bottom line. This 

principle is of central importance to the proper, ethical 

functioning of the profession. As outlined above, Hofioni has 

borne his burden of showing that Squire Patton violated this duty 

and the relevant Rules of Professional Conduct, justifying 

disqualification. 

 Also pending before the court is Hofioni’s newly-filed 

motion for a temporary restraining order and a preliminary 

injunction enjoining the Entity Defendants from discontinuing the 

payment of attorney’s fees and costs incurred by Hofioni in 

defending against plaintiff’s claims herein. Hofioni has failed 

to demonstrate that he would suffer irreparable harm from nonissuance of the temporary restraining order. Moreover, given the 

confusion that disqualification will engender for the Non-Hofioni 

Defendants, it would be highly inequitable for the court to force 

these Defendants to brief the merits of the requested preliminary 

injunction while simultaneously locating new counsel and allowing 

that counsel to familiarize itself with the contours of the 

litigation to date. Finally, as the undersigned will be assuming 

inactive status on September 30, 2014, and his cases reassigned 

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to other judges, the issuance of such an injunction is moreproperly the province of the judge who succeeds to this case. 

Having prevailed in this motion, the Wilke Fleury firm can decide 

for itself whether to bear the risk of continuing to represent 

Hofioni for a few more months until its motion may be 

reconsidered. 

 In light of the foregoing, the court hereby orders as 

follows: 

[1] Hofioni’s motion to disqualify Squire Patton as counsel 

for all defendants herein (ECF No. 62) is GRANTED. 

[2] This matter is STAYED to permit the Non-Hofioni 

Defendants time to retain new counsel and allow that counsel 

to familiarize itself with this case. The Non-Hofioni 

Defendants are DIRECTED to file a status report no later 

than sixty (60) days from docketing of this Order. Upon this 

filing, the stay will be lifted. 

[3] Squire Patton’s motion to withdraw as counsel for 

Hofioni (ECF No. 50) is DENIED as moot. 

[4] Wilke Fleury and Squire Patton are each DIRECTED, no 

more than seven (7) days after docketing of this order, to 

submit for the record every document that it had previously 

submitted to chambers via email in response to the Orders 

docketed at ECF Nos. 70 & 74. To this end, documents should 

be emailed to ApprovedSealed@caed.uscourts.gov. These 

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documents will thereafter remain under seal and accessible 

only to necessary court personnel. 

[5] Hofioni’s application for a temporary restraining order 

and motion for a preliminary injunction (ECF No. 77) are 

both DENIED without prejudice to their renewal upon the 

lifting of the stay herein. 

IT IS SO ORDERED. 

DATED: July 25, 2014. 

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