Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-04432/USCOURTS-cand-3_05-cv-04432-14/pdf.json

Parties Involved:
AutoZone, Inc
Defendant
Bailey Pinney PC
Miscellaneous
Michele Medrano
Plaintiff
Claudia Moreno
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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 Issues of attorney discipline raised by the conduct described in this order remain under submission and, to the

extent necessary, will be addressed by further order of the Court.

2

 Ms. Moreno’s claims were dismissed without prejudice by this Court on April 6, 2007. (Docket No. 109.)

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MORENO ET AL,

 Plaintiff,

 v.

 AUTOZONE, INC,

Defendant. /

No. C05-04432 MJJ

ORDER DISQUALIFYING BAILEY

PINNEY FIRM

INTRODUCTION

Before the Court is AutoZone’s Motion To Disqualify Plaintiff’s Counsel And Impose

Related Discipline. (Docket No. 181.) Plaintiffs’ counsel, the Bailey Pinney P.C. firm, opposes the

motion. For the following reasons, the Court GRANTS the Motion and DISQUALIFIES the

Bailey Pinney firm from further representation of Plaintiffs, putative class members, or any other

persons or entities involved in this matter.1

FACTUAL BACKGROUND

A. This Action.

In the putative class action complaint filed in this action on November 1, 2005, Plaintiffs

Michele Medrano and Claudia Moreno2, former employees of Defendant Autozone Inc.

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3

 Messrs. Bailey and Pinney are both members of the Oregon and Washington state bars. They are not members

of the California State Bar.

4

 Shelby L. Clark withdrew as counsel of record on October 17, 2007 (Docket No. 201.), after AutoZone’s instant

Motion To Disqualify Plaintiff's Counsel And Impose Related Discipline had been filed and fully briefed.

5

 On November 14, 2007, after the hearing on AutoZone’s instant Motion, California attorneys Marc Primo and

Joseph Cho of the Initiative Legal Group, LLP associated in as additional attorneys of record for Plaintiff Medrano. (Docket

No. 207.)

2

(“Autozone”), sought remuneration for a series of claimed wage and hour law violations. Plaintiffs’

attorneys of record were originally James A. Krutcik and A. Nicholas Georggin, both members of

the California State Bar and members of the law firm then known as Bailey, Pinney, Georggin &

Krutcik, LLP. (Docket No. 1.) In February 2006, this Court granted the pro hac vice applications

of two additional members of that firm, A.E. Bud Bailey, and J. Dana Pinney. (Docket Nos. 20,

23.)3

 Upon the dissolution of that firm, this Court on September 25, 2006 granted a motion to

withdraw attorneys Georggin and Krutcik, and the law firm Bailey, Pinney, Georggin & Krutcik,

LLP, as attorneys of record for Plaintiffs. (Docket No. 72. ) The Court’s September 25, 2006 order

substituted the newly-constituted Bailey Pinney P.C. firm (“Bailey Pinney”), in which A.E. Bud

Bailey and J. Dana Pinney were partners, as attorney of record for Plaintiffs, based upon Bailey

Pinney’s representation that Bailey Pinney lawyer Bonnie Mac Farlane, a member of the California

State Bar, would serve as local counsel. (Docket Nos. 68-71.) On February 7, 2007, Bailey Pinney

added another of its lawyers, Shelby L. Clark, a member of the California State Bar, as an additional

attorney of record in the case. (Docket No. 100.)4

 On June 13, 2007, Bailey Pinney added another

of its lawyers, Jose R. Mata, a member of the California State Bar, as an additional attorney of

record in the case. (Docket No. 120.) AutoZone’s instant Motion was heard on October 25, 2007.5

B. The Ellison Action.

In a putative class action complaint filed in this district on December 7, 2006, Plaintiff

Jimmy Ellison sought remuneration for a series of claimed wage and hour law violations against

AutoZone, the same defendant as in this action. (Case No. 06-7522, Docket No. 1.) Ellison’s 

attorneys of record were originally Shelby L. Clark and Bonnie Mac Farlane of Bailey Pinney PC,

both members of the California State Bar. (Case No. 06-7522, Docket No. 1.) On January 30, 2007,

this Court granted the pro hac vice applications of two additional members of Bailey Pinney, A.E.

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Bud Bailey, and J. Dana Pinney, to appear in the Ellison action. (Case No. 06-7522, Docket Nos.

20 & 21.) On June 13, 2007, Bailey Pinney added another of its lawyers, Jose R. Mata, a member of

the California State Bar, as an additional attorney of record in the case. (Case No. 06-7522, Docket

No. 40.) On October 17, 2007, Shelby L. Clark withdrew as counsel of record for Ellison. (Case

No. 06-7522, Docket No. 65.) 

C. The Martinez Action.

In March 2004, three former employees initiated a putative class action against AutoZone in

Los Angeles Superior Court, styled Martinez, et al. v. AutoZone. The Martinez plaintiffs asserted,

among other things, that AutoZone allegedly failed to authorize and permit employees to take

statutory meal breaks and rest breaks. After negotiations, the parties reached a classwide settlement

and presented it to the Martinez court for preliminary approval on June 6, 2005. The Martinez court

entered preliminary approval and ordered notice of the settlement by first class mail. Only three

class members objected to the settlement, including Michele Medrano and Claudia Moreno, the

original Plaintiffs in this action.

On behalf of Medrano and Moreno, the Bailey Pinney firm asserted numerous objections to

the settlement and class notice. The Martinez court overruled these objections and granted final

approval of the settlement by order dated December 13, 2005. Medrano and Moreno appealed the

Martinez judgment through their counsel, the Bailey Pinney firm. On May 14, 2007, the California

Court of Appeal affirmed the settlement amount, terms of the settlement agreement, content and

manner of providing the class notice, and the final approval order. See Martinez v. AutoZone, Inc.,

2007 WL 1395477 (Cal. App. May 14, 2007). The Court of Appeal remanded the case for the

limited purpose of amending the judgment to conform to the settlement agreement and class notice. 

The Bailey Pinney firm subsequently filed objections to an amended judgment before the Martinez

trial court. 

LEGAL STANDARD

Motions to disqualify counsel are decided under state law. See In re County of Los Angeles,

223 F.3d 990, 995 (9th Cir. 2000). Ultimately, however, the decision to disqualify counsel for

conflict of interest is within the trial court's discretion. See Trone v. Smith, 621 F.2d 994, 999 (9th

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Cir.1980). Disqualification motions are subject to strict judicial scrutiny given the potential for

abuse. See Optyl Eyewear Fashion International Corp. v. Style Companies, Ltd., 760 F.2d 1045,

1049 (9th Cir.1985).

ANALYSIS

AutoZone’s Motion requests that this Court consider at least eleven different alleged ethical

violations by the Bailey Pinney firm as a basis for disqualification. Upon review, the Court

concludes that much of the alleged misconduct does not present a basis for disqualification or

discipline. Some of Autozone’s allegations are not substantiated by the record before the Court. 

Other alleged conduct, although perhaps an example of overzealous advocacy, does not rise to the

level of ethical violations justifying disqualification or discipline. Indeed, AutoZone’s kitchen-sink

approach to its disqualification motion underscores the concern, reflected in the caselaw, that

disqualification motions are“often tactically motivated” and “tend to derail the efficient progress of

litigation.” Visa U.S.A., Inc. v. First Data Corp., 241 F.Supp.2d 1100, 1104 (N.D. Cal. 2003).

Nonetheless, separating the wheat from the chaff, there are three specific allegations of

misconduct raised in the Motion that this Court finds are fully supported in the record and that raise

serious questions as to whether the Bailey Pinney firm should be allowed to continue its

representation of Plaintiffs, witnesses, and the putative class in this litigation. In particular, as

discussed in more detail below, the Court finds that the record demonstrates that Bailey Pinney has

breached its ethical obligations by: (1) failing to secure informed consent for concurrent

representation of conflicting interests, (2) initiating unauthorized contact with represented parties,

and (3) submitting inaccurate or misleading information regarding its local counsel when seeking

pro hac vice admission. Bailey Pinney has offered no adequate explanation or excuse for these

ethical breaches. After careful consideration, the Court finds that disqualification of the Bailey

Pinney firm is appropriate.

A. The Record Demonstrates That Bailey Pinney Has Failed To Act Consistently With Its

Ethical Obligations.

The Court finds that Bailey Pinney has not acted consistently with its ethical obligations in

three ways, as described below.

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1. Concurrent Representation Of Conflicting Interests In The Martinez And

Moreno Actions.

AutoZone contends that Bailey Pinney, without obtaining written informed consent, has

engaged in concurrent representation of clients in connection with this action, where such clients

have an actual conflict of interest in light of the pending Martinez class action settlement. The Court

agrees.

a. Bailey Pinney’s Representation of Medrano And Moreno.

Bailey Pinney represents Plaintiff Michele Medrano, and former Plaintiff Claudia Moreno

(whose claims have now been dismissed without prejudice), in this action. Bailey Pinney has also 

represented Medrano and Moreno since at least late 2005 in connection with their efforts to

challenge the settlement reached in the state court Martinez class action. After the Martinez court

preliminarily approved a classwide settlement, 4534 (21.37%) class members submitted timely claim

forms, 214 (1.01%) opted out of the class (1.01%, and only three class members objected to the

settlement. See Martinez, 2007 WL 1395477 at *4-5. Medrano and Moreno are two of the three

class members that objected to the Martinez settlement. See id. at *4-5.

The record before the Court demonstrates, and Bailey Pinney does not dispute, that through

the efforts of their counsel, Medrano and Moreno have mounted a series of challenges to the

settlement and the judgment entered in the Martinez class action from late 2005 through the present. 

Medrano and Moreno asserted numerous objections to the settlement and class notice in 2005,

including objections that:

(1) the settlement amounts were too low; (2) the notice did not specify

the precise amount each class member would receive; (3) the notice

did not adequately advise class members of their rights; (4) the parties

did not provide the court with sufficient information to assess the

merits of the settlement; (5) the notice did not state Rudy (the

mediator) endorsed the settlement; (6) the release is overbroad; and (7)

the proposed settlement did not address many issues.

2007 WL 1395477 at *5; see also Docket No. 16, Exh. 10. The Martinez court overruled these

objections and granted final approval of the settlement on December 13, 2005. (Docket No. 16, Exh.

4.) Medrano and Moreno then appealed the Martinez judgment in January 2006, and continued to

challenge the settlement on appeal. (Docket No. 16, Exh. 11.) On May 14, 2007, the California

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 Bailey Pinney’s privilege log indicates that McDaniel and Bailey Pinney were working on a draft of this declaration

as early as March 15, 2007. (Hoffman Decl., Exh. 25, Entry No. 676.) 

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Court of Appeal affirmed the settlement amount, the terms of the settlement agreement, the content

and manner of providing the class notice, and the final approval order; the Court of Appeal

remanded for the limited purpose of amending the judgment to conform to the settlement agreement. 

See Martinez, 2007 WL 1395477 at *7-11. As recently as August 2007, after the disqualification

motion was filed, Medrano and Moreno continued to challenge the amended judgment issued by the

Martinez trial court upon remand. (Reply Hoffman Decl., ¶ 6.) 

b. Bailey Pinney’s Representation Of Declarants Knox, McDaniel And

Veloz.

Bailey Pinney’s privilege log indicates that Burt Knox has been a client of Bailey Pinney for

purposes of this litigation since at least October 30, 2006 (Hoffman Decl., Exh. 25, Entry No. 632;

see also Entry Nos. 633, 637, 654, 668, 694-695), that James McDaniel has been a client since at

least November 2, 2006 (Hoffman Decl., Exh. 25, Entry No. 635; see also Entry Nos. 644, 670, 672,

676), and that Martin Veloz has been a client since at least November 16, 2006 (Hoffman Decl.,

Exh. 25, Entry No. 643; see also Entry Nos. 666, 687, 688.) After Bailey Pinney submitted

declarations in July 2007 from Knox, McDaniel and Veloz (Hoffman Decl., Exhs. 17-19) in support

of Plaintiffs’ motion for class certification in this action, AutoZone issued subpoenas to take

deposition of these individuals.6

 Bailey Pinney represented each of these declarants in connection

with their depositions. (Hoffman Decl., Exh. 3 at 7:22-24; Exh. 4 at 14:3-5; Exh. 5 at 6-9.)

McDaniel, Knox and Veloz are also non-objecting class members in the Martinez action;

each of them submitted claim forms and agreed to the settlement. (Malana Decl., Exh. 2.)

c. Moreno And Medrano, As Objectors To The Martinez Settlement, Have

An Actual Conflict Of Interest With Non-Objecting Class Members Awaiting Payment.

A conflict of interest exists when a lawyer’s duty on behalf of one client obligates the lawyer

to take action prejudicial to the interests of another client, i.e., “when in behalf of one client, it is his

duty to contend for that which duty to another client requires him to oppose.” Flatt v. Sup. Ct., 9

Cal. 4th 275, 282 (1994). An “adverse” interest is one that is “hostile, opposed, antagonistic . . .

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detrimental, unfavorable” to one’s own interests. See Ames v. State Bar, 8 Cal. 3d 910, 917 (1973).

The Court finds that Moreno and Medrano, as objectors to the Martinez settlement, have an

actual conflict of interest with, and adverse interest to, declarants McDaniel, Knox and Velox, each

of whom is a Martinez class member that has not objected to the settlement and has submitted a

claim form for payment. Bailey Pinney’s representation of Moreno and Medrano from late 2005 to

the present has obligated the law firm to advocate that the settlement and judgment in Martinez

should not be approved – a position that Bailey Pinney has zealously advanced before the state trial

and appellate courts. This advocacy is adverse to the interests of McDaniel, Knox and Velox, also

clients of Bailey Pinney since at least November 2006, as they are Martinez class members who

have approved the settlement, submitted claim forms, and await payment. Cf. Georgine v. Amchem

Products, Inc., 160 F.R.D. 478, 495 n.25 (E.D. Pa. 1995) (noting that objectors often have adverse

interests to class members approving settlement); In re Corn Derivative Antitrust Litig., 748 F.2d

157, 162 (3d. Cir. 1984) (affirming disqualification of attorney representing objector to class

settlement on appeal because his firm had previously represented class members who supported the

settlement). 

Bailey Pinney’s assertion that no actual conflict of interest has existed because “[h]ow

adamantly plaintiffs and declarants do or do not oppose the settlement is unknown” (Opp. at 9:13-

14) flies in the face of the positions taken by the declarants and the Plaintiffs in the Martinez action. 

Contrary to Bailey Pinney’s representations in its opposition brief and at oral argument, Moreno and

Medrano challenged not merely the scope of the release created by the Martinez settlement, but the

substance of the Martinez settlement itself. See Martinez, 2007 WL 1395477 at *5; see also Docket

No. 16, Exh. 10. Accordingly, the Court rejects Bailey Pinney’s assertion that the interests of Knox,

McDaniel, Veloz, Medrano and Moreno have all aligned during the relevant time periods where

there has been concurrent representation. Since at least November 2006 (when Bailey Pinney began

representing Knox, McDaniel and Veloz in this matter), Bailey Pinney has represented clients with

an actual conflict of interest with respect to the outcome of the Martinez settlement. 

///

///

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d. Bailey Pinney’s Conduct Does Not Comply With Rule of Professional

Conduct 3-310(c)(3) And Requires “Per Se” Disqualification.

This Court follows California ethical standards. In re County of Los Angeles, 223 F.3d 990,

995 (9th Cir. 2000) (“Because we apply state law in determining matters of disqualification, we must

follow the reasoned view of the state supreme court when it has spoken on the issue.); Civil Local

Rule 11-4(a)(1). The applicable standards of professional responsibility are found in the Rules of

Professional Conduct of the State Bar of California. The applicable standard of conduct is set forth

in Rule 3-310(c)(3), which provides as follows:

A member shall not, without the informed written consent of each

client . . . [r]epresent a client in a matter and at the same time in a

separate matter accept as a client a person or entity whose interest in

the first matter is adverse to the client in the first matter.

Here, Bailey Pinney represents Medrano and Moreno in this matter and in the Martinez

matter, and at the same time has accepted as a client in this matter three declarants whose interest in

the Martinez matter is adverse to the interests of Medrano and Moreno. Rule 3-310(c)(3) required

Bailey Pinney to obtain informed written consent to proceed with such concurrent representation. 

See also Flatt, 9 Cal. 4th at 284. Accordingly, Bailey Pinney had a duty to advise all five clients –

Knox, McDaniel, Veloz, Medrano, and Moreno – of all of the relevant facts and circumstances

pertaining to the conflict so that they could make an informed decision about whether to consent to

the concurrent representation, despite the conflict. 

The Court finds, based on the record before it, that Bailey Pinney did not take the requisite

steps to obtain informed written consent. McDaniel and Knox both testified at their depositions that

the Bailey Pinney firm did not advise them of any settlement in the Martinez action, and did not

advise them of a pending appeal aimed at defeating the Martinez settlement, when Bailey Pinney

initially contacted them and obtained their affidavits. (Hoffman Decl., Exh. 3 at 12:5-8, 14:6-17;

Exh. 4 at 21:5-20.) Veloz testified that he was notified of other pending lawsuits against Autozone

“two days” before his deposition, well after Bailey Pinney began representing him. (Hoffman Decl.,

Exh. 5 at 7-9.) The record is silent as to whether any disclosures were made to Moreno or Medrano. 

Bailey Pinney has introduced no evidence that it obtained informed written consent from any of

these five individuals that it currently represents in this matter.

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 The fact that Plaintiffs Moreno’s and Medrano’s interests, on the one hand, and the interests of declarants Knox,

McDaniel, Veloz, on the other hand, may not be different with respect to the outcome of this litigation does not prevent

operation of the per se disqualification rule in this matter. When applying this rule, the adversity in positions between two

concurrently-represented clients need not be attributable to the dispute raised by the litigation in which disqualification is

sought. Indeed, dual representation that violates Rule 3-310(C)(3) leads to automatic disqualification even where “the

simultaneous representations may have nothing in common, and there is no risk that confidences to which counsel is a party

in the one case have any relation to the other matter.” Flatt, 9 Cal. 4th at 282. In other words, Bailey Pinney would be

subject to automatic disqualification from representing Medrano and Moreno in this matter even if it merely simultaneously

represented another client with interests that actually conflicted with those of Medrano and Moreno due to an unrelated

dispute, even if that other client had no interest or stake in the outcome of this case. 

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Absent each client’s informed written consent, dual representation of clients whose interests

actually conflict is prohibited and results in “per se or automatic” disqualification. Flatt, 9 Cal. 4th

at 284. Moreover, under the “hot potato rule”, dual representation conflicts cannot be cured by the

expedient of severing the relationship with one of the clients. Id. at 288; see also Truck Ins.

Exchange v. Fireman’s Fund Ins. Co., 6 Cal. App. 4th 1050, 1056 (1992). Accordingly, the Court is

required to disqualify the Bailey Pinney firm from further representation in this matter.7

Bailey Pinney argues that the “per se” disqualification rule should not apply here because

Medrano and Moreno, having lost their challenge to the Martinez settlement before the California

Court of Appeal in May 2007, now only challenge the scope of the amended judgment in the

Martinez case, and therefore are no longer actually adverse to the interests of Knox, McDaniel, and

Veloz. In essence, Bailey Pinney argues that even if they once concurrently represented adverse

interests, the passage of time has rendered those interests no longer adverse. The Court rejects this

argument for two reasons. First, the Court finds that, even as of the time of the hearing on

AutoZone’s disqualification motion, the interests of Knox, McDaniel, Veloz and other non-objecting

Martinez class members, who seek prompt entry of judgment and payment of their portion of the

settlement, remain actually adverse to those of Medrano and Moreno, who continue to litigate

against the trial court’s amended judgment and thereby delay final resolution of the Martinez matter. 

 Second, the same principles that motivate the “hot potato” rule – which prevents an attorney from

curing dual representation conflicts by the expedient of severing the relationship with a preexisting

client – apply here to prevent the Bailey Pinney from avoiding the effect of the “per se”

disqualification rule here merely by exhausting the full course of Medrano’s and Moreno’s options

for challenging the Martinez settlement before the California state courts (to the detriment of the

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non-objecting Martinez class members that it also represented). See Truck Ins. Exchange, 6 Cal.

App. 4th at 1056. Bailey Pinney’s conduct has irretrievably undermined its ability to fulfill its duty

of loyalty to its current clients. See id. Moreover, Bailey Pinney should not now be allowed to

profit from a conflict of interest situation which it created. See id.

Bailey Pinney also contends that conflicts rules cannot be mechanically applied to class

action lawsuits, citing several out-of-circuit cases acknowledging that disqualification rules must

take account of the fact that class counsel’s duties frequently diverges from the opinion of either the

named plaintiff or other objectors. See, e.g., Walsh v. Great Atl. & Pac. Tea Co., 726 F.2d 956, 964

(3d Cir. 1983); Lazy Oil Co. v. Wilco, Corp., 166 F.3d 581, 589 (1999); In Re: “Agent Orange”

Prod. Liab. Litig., 800 F.2d 14, 18-19 (2d Cir. 1986). But Bailey Pinney’s reliance on these

authorities is entirely unconvincing. The circumstances here are distinguishable from these cases,

which involved counsel that had first represented the class, and then had sought to represent only a

portion of the class, once various class members newly took adverse positions. That is not the

situation here. Bailey Pinney simultaneously represents two different sets of clients that actively

have adverse interests in the Martinez action. The cases cited by Bailey Pinney do not intimate, let

alone hold, that such concurrent representation of adverse interests could be appropriate. To the

contrary, one of these authorities expressly recognizes that objectors “become adverse parties to the

remaining class representatives (and the rest of the class).” Lazy Oil, 166 F.3d at 589. 

California’s stringent approach to conflicts involving representation of absent class members

supports the Court’s finding that Bailey Pinney should be disqualified. “[I]n a class action context,

disqualification is more likely because putative class counsel are subject to a ‘heightened standard’

which they must meet if they are to be allowed by the Court to represent absent class members.” 

Huston v. Imperial Credit Commercial Mortgage Invest. Corp., 179 F. Supp. 2d 1157, 1167 (C.D.

Cal. 2001). In the class action context, the Court has an obligation to closely scrutinize the

qualifications of counsel to assure that all interests, including those of as yet unnamed plaintiffs, are

adequately represented. See Cal-Pak Delivery, Inc. v. United Parcel Serv., 52 Cal. App. 4th 1, 11-

12 (1997). “[W]here there is reason to doubt the loyalty of counsel or the adequacy of counsel’s

representation, serious questions arise concerning the preclusive effect of any resulting judgment.” 

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 From the limited record before the Court, it appears possible that the Bailey Pinney’s concurrent representation

of adverse interests goes beyond representation of the five specific individuals discussed above. According to Bailey Pinney's

privilege log (Hoffman Decl., Exh. 25), since October 2006, Bailey Pinney has engaged in attorney-client communications

with hundreds of unidentified current or former Autozone employees that are putative class members in this case. There

is a significant likelihood that at least some of these employees are Martinez class members that have not objected to the

settlement had have submitted claim forms. However, the degree to which Bailey Pinney has asserted attorney-client

privilege with respect to these communications – including by withholding even the identities of most of these individuals

– leaves the Court unable to make specific findings of fact at this time regarding whether these situations involve the

concurrent representation of adverse interests, and if so, whether Bailey Pinney has obtained informed written consent. 

Because the Court has already determined that disqualification is required, the Court makes no further specific factual

findings with respect to these issues at this time, but may find it necessary to do so in connection with attorney discipline

issues in a later order.

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Id. Given that Bailey Pinney seeks to represent a large and unidentified group of putative class

members in this action – many of which are undoubtedly also non-objecting members of the

Martinez settlement class – conflict of interests concerns loom large with respect to Bailey Pinney’s

request to represent the putative class. As a practical matter, Bailey Pinney can not obtain written

waiver of the actual conflicts of interest that exist from the absent class members. See id. 

Moreover, the conflict of interest issues are further heightened by the fact that Bailey Pinney has had

a pecuniary interest in defeating the Martinez settlement and limiting the preclusive effect of any

Martinez judgment so that it can proceed with a broader suit here for alleged meal and rest period

violations here and recover larger attorney’s fees. These additional considerations persuade that

court that no exception to the per se disqualification rule should be made in this case.8

2. Contacting Represented Martinez Class Members.

AutoZone contends that Bailey Pinney, in litigating this matter, have breached their ethical

obligations by initiating unauthorized contact with represented parties. The Court finds that the

record evidence confirms this ethical breach. 

The subject of the Martinez action and settlement were alleged meal and rest break

violations. Bailey Pinney does not dispute that in the Martinez class action, the court granted final

approval of the settlement on December 13, 2005, and appointed Gould & Associates and the Law

Offices of Daniel Emilio as class counsel. (Docket No. 16, Exh. 4.) Upon final approval, every

Martinez class member who declined to opt-out or object to the settlement formed an attorney-client

relationship with the court-appointed counsel. See Parks v. Eastwood Ins. Serv., Inc., 235 F. Supp.

2d 1082, 1083 (C.D. Cal. 2002). Bailey Pinney was clearly aware that the Martinez court granted

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 Three of these declarants – Knox, Veloz, and McDaniel – have since been deposed in this litigation.

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final approval and appointed class counsel, as it represented Medrano and Moreno in their efforts to

challenge the Martinez settlement before both the trial and appellate courts.

It is also undisputed that in October 2006, Bailey Pinney initiated contact with various

declarants in the Martinez case by sending them letters. (Mac Farlane Decl, ¶ 17.) The actual letters

are not in evidence, as Bailey Pinney has asserted attorney-client privilege with respect to their

contents. However, Bailey Pinney has provided a mail-merge version of the letter that indicates the

letter was captioned with both the Martinez and Moreno actions. (Mac Farlane Decl., Exh. A.) The

letter was, according to Bailey Pinney, sent for the purpose of procuring declarations to support

Plaintiff’s motion for class certification. Bailey Pinney ultimately submitted five percipient witness

declarations in support of its motion for class certification in 2007, each of whom is also Martinez

class member that submitted a claim form.9

 The Martinez class counsel was unaware of these

communications by Bailey Pinney and did not authorize them. (Gould Decl., ¶ 6.) 

Bailey Pinney takes the position that its communications with these five Martinez declarants

concerned solely the subject of this litigation, and not the subject of the Martinez litigation, and/or

that these individuals originally reached to Bailey Pinney rather than the other way around. The

record does not support Bailey Pinney’s contentions in this regard:

• Knox testified at deposition that Bailey Pinney initiated contact with him by phone,

that they discussed the contents of an affidavit for him to sign, that the only topic he

could recall discussing with the Bailey Pinney investigator was “breaks”, and that he

understood the Moreno litigation to concern “breaks.” (Hoffman Decl., Exh. 4 at

9:10-11:3, 15:5-20, 19:19-24.) Mr. Knox’s declaration submitted in support of the

class certification motion in this action discusses rest breaks (Hoffman Decl., Exh. 18

at ¶ 5) – the very issue in dispute in the Martinez litigation. 

C Similarly, Velox testified at deposition that Bailey Pinney initiated contact with him

by phone, that they discussed the contents of an affidavit for him to sign, and that the

topics discussed included “how some of the policies work in regards to meal times

and break times.” (Hoffman Decl., Exh. 5 at 4-6.) Mr. Velox’s declaration submitted

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in support of the class certification motion discusses meal and rest breaks. (Hoffman

Decl., Exh. 19 at ¶¶ 5-6.) 

C Mr. McDaniel testified at deposition that Bailey Pinney initiated contact with him by

phone, that he was not aware of any lawsuit against Autozone other than the Moreno

lawsuit, that he understood the Moreno lawsuit to be about “unpaid meal and rest

periods.” (Hoffman Decl., Exh. 3 at 8:25-9:9; 11:9-20.) Mr. McDaniel’s declaration

submitted in support of the class certification motion discusses meal and rest breaks.

(Hoffman Decl., Exh. 19 at ¶¶ 6-8.)

C The declarations of Messrs. Hernandez and Riepe, which were also submitted in

support of the class certification motion by Bailey Pinney, also discuss meal and rest

breaks. (Hoffman Decl., Exh. 20 at ¶¶ 4-5; Exh. 21 at ¶¶ 4-5.) These declarants are

also Martinez class members that have submitted claim forms.

 The applicable standards of professional responsibility are found in the Rules of Professional

Conduct of the State Bar of California. Rule 2-100(A) provides as follows:

While representing a client, a member shall not communicate directly

or indirectly about the subject of the representation with a party the

member knows to be represented by another lawyer in the matter,

unless the member has the consent of the other lawyer.

However, subsection (C) of the Rule indicates that it does not prohibit “[c]ommunications

initiated by a party seeking advice or representation from an independent lawyer of the party's

choice” or “communications otherwise authorized by law.”

The Court finds that the Bailey Pinney firm violated Rule 2-100 by initiating contact with

Martinez class members regarding the subject matter of that pending appeal (meal and rest breaks),

despite knowing that all of the Martinez class members were at that time represented by the courtappointed designated class counsel. Bailey Pinney’s conduct is particularly problematic given that,

at the same time, it represented Medrano and Moreno and was actively pursuing an appeal adverse

to the interests of the Martinez class members that it contacted. Moreover, to the extent the contents

of these communications are in the record, there is nothing to indicate that Bailey Pinney took steps

to reduce or mitigate the harms caused by such unauthorized contact. The Court finds that the mailCase 3:05-cv-04432-CRB Document 212 Filed 12/06/07 Page 13 of 26
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10 Bailey Pinney contends that the mail-merge letter adequately safeguarded against abuse of communications with

represented parties, and negated any harm caused by violation of Rule 2-100(A), because it contained the following language:

“If you are represented by an attorney in regarding a case against AutoZone, please have your attorney contact us.” (Mac

Farlane Decl., Exh. A.) The Court disagrees with this analysis, particularly given the misleading nature of the letter and the

lack of any explanation of Bailey Pinney’s adverse interests to non-objecting Martinez class members. Bailey Pinney knew

that all of the Martinez class members were represented by class counsel, and cannot avoid their obligation to adhere to Rule

2-100 by using such a disclaimer.

11 As with the conflict-of-interest issue discussed above, the record before the Court suggests that the scope of Bailey

Pinney’s contact with represented parties may be even larger than its contact with these five Martinez declarants. Plaintiff’s

privilege log shows that the Bailey Pinney Firm initiated contact with numerous unidentified current or former Autozone

employees by sending hundreds letters or emails in October 2006. (Hoffman Decl., Exh. 25.) There is a significant

likelihood that many of these recipients were non-objecting Martinez class members as well. Though the contents of these

letters are not in the record, the privilege log indicates that these were “letters sent to potential clients/putative class

members/witness requesting information and/or contact with a questionnaire enclosed.” One apparent recipient of such a

letter produced a copy of the letter at his deposition. (Hoffman Decl., Exh. 14.) The letter is different in content from the

mail-merge letter put into the record by Bailey Pinney. The degree to which Bailey Pinney has asserted attorney-client

privilege with respect to these communications leaves the Court unable to make specific findings of fact at this time regarding

whether any of these communications listed on Bailey Pinney’s privilege log constitute additional violations of Rule 2-100.

The Court may find it necessary to make such findings in connection with attorney discipline issues in a later order.

14

merge letter that Bailey Pinney indicates it sent to at least the Martinez declarants would have been

confusing to recipients, as it contained both the Martinez and the Moreno case captions at the top,

and did not explain that Bailey Pinney represented adverse interests to non-objecting class members

. (Mac Farlane Decl, Exh. A).10 Moreover, such confusion apparently materialized, as the

deposition testimony of Messrs. McDaniel and Knox cited above reflects their mistaken beliefs that

the Moreno and Martinez actions are one and the same.11

Bailey Pinney defends its conduct, in part, by asserting that the information and testimony

that it sought was solely for use in the Moreno action. This is too rigid an interpretation of Rule 2-

100. Though Ms. Mac Farlane represents that the purpose of the letters was “to obtain witnesses

regarding the issues of unpaid wages, off the clock work, and late pay”, and that the letters “did not

include any statements regarding rest and/or meal periods” (Mac Farlane Decl., ¶ 18), Bailey Pinney

clearly engaged in communications regarding rest and meal breaks (the subject of the Martinez

action) with these witnesses, as the declarants’ affidavits discuss such issues in detail. Given that

Bailey Pinney also represented Medrano and Moreno in the Martinez action, such communications

violated Rule 2-100.

Bailey Pinney, citing Community Bank of N. Virginia Second Mortgage Loan Litig., 418 F.3d

277, 313 (3d. Cir. 2005) and In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1245

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(N.D. Cal. 2000), contends that Rule 2-100 does not apply with the same force in the class action

context because class counsel in Martinez did not possess a traditional attorney-client relationship

with absent class members. Bailey Pinney’s reliance on these authorities is misplaced, as these

decisions address the nature of the relationship between lead counsel and putative class members

before the opt-out period has expired. Here, the opt-out period in Martinez had already expired, and

the class members at issue had already approved the settlement and accepted representation by the

court-appointed class counsel. Bailey Pinney initiated contact with the Martinez class members,

concerning subject matter that Bailey Pinney knew to be the subject of the Martinez litigation, only

after such class members declined to opt-out and became represented parties by joining the class. 

Bailey Pinney identifies no authority supporting its contention that such contact, after the opt-out

period has expired, initiated by attorneys hostile to the interests of the class, falls within an

exception to Rule 2-100. All authority of which this Court is aware is to the contrary:

Once a class has been certified, some but not all aspects of the

[attorney-client] relationship are present. A lawyer who represents the

named plaintiff in a class which has been certified immediately

assumes responsibility to class members for diligent, competent

prosecution of the certified claims. However, it cannot truly be said

that he fully ‘represents' prospective class members until it is

determined that they are going to participate in the class action.

Tedesco v. Miskin, 629 F. Supp. 1474, 1483 (S.D.N.Y. 1986) (emphasis added); see also Resnick v.

American Dental Ass’n, 95 F.R.D. 372, 376 (N.D. Ill. 1982) (once class is certified, unnamed class

members are represented by the class counsel for purposes of ethical rules prohibiting contact with

represented parties).

Similarly, Bailey Pinney’s attempt to fall back on First Amendment principles is

unpersuasive. The legitimacy of a court-ordered prior restraint on pre-certification communications

by counsel with putative class members, at a time that such putative class members are faced with

the decision of whether to opt-out of a class or accept a settlement, is not at issue here as it was in

Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), Domingo v. New England Fish Co., 727 F. 2d 1429

(9th Cir. 1984), and Parris v. Superior Court, 109 Cal. App. 4th 285 (2003). Indeed, in Gulf Oil, the

Supreme Court made it plain that the First Amendment does not protect contacts by an adversary’s

lawyer, by making an explicit reference to the ABA Code provision prohibiting attorney

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12 At oral argument, AutoZone conceded that the violation of Rule 2-100 alone might not be enough to support

disqualification. However, AutoZone contended that Bailey Pinney’s ethical violations, in the aggregate, provide sufficient

reason to disqualify the firm.

16

communications with represented parties, and observing that “the rules of ethics properly impose

restraints on some forms of expression.” 452 U.S. at 104 n.21. 

Disqualification based on a violation of Rule 2-100 lies within the Court’s discretion. See

Chronometrics, Inc. v. Sysgen, Inc., 110 Cal. App. 3d 597, 607-08 (1980). Disqualification is proper

if counsel’s misconduct is likely to have a continuing effect on the proceedings. See id. Because the

Court has already concluded that disqualification is appropriate based on Bailey Pinney’s concurrent

representation of adverse interests, the Court need not determine whether Bailey Pinney’s violation

of Rule 2-100 independently warrants disqualification.12

3. Failing To Retain Local Counsel Who Maintains A Bona Fide Office In

California.

AutoZone contends that the Bailey Pinney firm misled the Court by failing to retain local

counsel who maintains a bona fide office in California. The record fully substantiates this

allegation.

Messrs. Bailey and Pinney are not admitted to the California Bar. When the Bailey Pinney

firm dissolved its relationship with former co-counsel James Krutcik and Nicholas Georgian in

September 2006, Messrs. Bailey and Pinney designated their law firm colleague, Bonnie Mac

Farlane, as local counsel and attorney-of-record in this action. (Docket No. 68.) Similarly, in the

related Ellison v. Autozone action, Case No. 06-7522, Messrs. Bailey and Pinney certified under

penalty of perjury that their law firm colleague, Ms. Mac Farlane, maintained an office in

Sacramento, California. (Case No. 06-7522, Docket Nos. 12 & 13.) 

The record overwhelming indicates that Ms. Mac Farlane does not maintain a bona fide

office in Sacramento or anywhere else in California. The Sacramento address identified on the pro

hac vice applications and pleadings, 720 Howe Avenue, Suite 113, Sacramento, is the office of

attorney Thomas Hogan, not Ms. Mac Farlane. The State Bar of California lists Ms. Mac Farlane’s

address as Bailey Pinney, in Vancouver, Washington. (Hoffman Decl., Exh. 11.) Ms. Mac

Farlane’s stationery lists only one address in Vancouver, Washington. (Hoffman Decl., Exhs. 13 &

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14.) Pleadings filed with this Court identify toll-free “800" numbers for Ms. Mac Farlane, and her

letterhead identifies office and facsimile numbers in the “360” area code of southwestern

Washington. (Compare Hoffman Decl., Exhs. 13 & 14 with Docket Nos 165 & 175.) Neither Ms.

Mac Farlane nor her law office are listed in telephone listings of Sacramento. (Hoffman Decl., Exh.

6 & ¶ 19.) Neither Ms. Mac Farlane nor the Bailey Pinney firm have their names on the door,

mailboxes, or building in Sacramento (Hoffman Decl., Exh. 15 & ¶ 18.) The Bailey Pinney web

page also does not identify an office in Sacramento, California. (Reply Hoffman Decl, Exh 26.) 

Moreover, Ms. Mac Farlane’s own communications in this lawsuit confirm that she does not

maintain a bona fide office in Sacramento. When Defendant attempt to serve a third-party witness

subpoena on the Bailey Pinney PC by sending a process server to the Howe street office, Mac

Farlane wrote in a letter that Bailey Pinney PC could not accept service for that witness. In a

footnote, Mac Farlane wrote: “Please note that the address of Bailey Pinney PC is not 720 Howe

Avenue, Suite 113, Sacramento, CA 95825.” (Hoffman Decl., Exh. 13) That letterhead identified

her only office as Vancouver, Washington. 

In response to these serious allegations, Bailey Pinney contends that Ms. Mac Farlane does

maintain an office in Sacramento, California. However, the only evidence submitted by Bailey

Pinney on this point is that, during the relevant time period (September 25, 2006 through the

present), Ms. Mac Farlane “contracted with Thomas Hogan to pay rent for the use of office space at

720 Howe Avenue, Sacramento, California” and that “Bailey Pinney, P.C. advertises for its services

throughout California.” (Mac Farlane Decl., ¶ 20.) At oral argument, Bailey Pinney also

represented that it had phone records for Ms. Mac Farlane’s toll-free number that were billed to the

Howe Avenue address. Even taken collectively, such evidence is insufficient. “[A] bona fide office

is more than a mere address — it is a functioning office.” Tolchin v. Supreme Court Of New Jersey,

111 F.3d 1099, 1107 (3d. Cir. 1997). Mere rented office space lacks any of the indicia of office

location, including where clients are met, where files are kept, where telephones are answered,

where mail is received, and where counsel can be reached during business hours. See id. at 1102-03;

see also Ramirez v. England, 320 F. Supp. 2d 368, 370-71 (D. Md. 2004).

The Court finds that the Sacramento office identified by the Bailey Pinney firm and Ms. Mac

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13 Indeed, a blanket prohibition on such communications, that was not narrowly-tailored and based on specific

findings, would constitute a problematic prior restraint on communications with putative class members. See Gulf Oil Co.

v. Bernard, 452 U.S. 89 (1981).

18

Farlane on the pro hac vice applications and papers on file with the Court is not a bona fide business

address and that regular work is not conducted in that California office. There is no evidence before

this Court that Mac Farlane maintained a bona fide, functioning office in California after September

2006, while designated as local counsel. Even when confronted with these allegations and given an

opportunity to respond, Bailey Pinney provided remarkably little evidence of a bona fide operating

business office at the Howe Avenue address. Such evidence, to the extent it exists, would

presumably within Bailey Pinney’s possession and control.

Because the Court has already concluded that disqualification of the Bailey Pinney firm is

necessary, the Court need not determine whether the inaccuracy of Bailey Pinney’s representations

regarding the Sacramento office would independently warrant revocation of the pro hac vice

applications of Messrs. Bailey and Pinney.

B. Alleged Misconduct That Does Not Support Disqualification.

The remaining allegations of misconduct do not provide a basis this Court fo find a violation

of Bailey Pinney’s ethical obligations.

1. Plaintiff’s Communications With Witnesses During Stay Of Proceedings.

AutoZone alleges that Bailey Pinney violated a Court-ordered stay of proceedings in

connection with Plaintiffs’ claims for alleged meal and rest break violations. In particular,

AutoZone alleges that Bailey Pinney obtained sworn statements from at least five witnesses during

the stay, and sent hundreds of letters to putative class members regarding the case. 

Neither of these actions constitutes a violation of the Court-ordered stay. The Court’s stay

orders halted prosecution of Plaintiffs’ meal and rest break claims, but cannot be reasonably read to

prevent Bailey Pinney from taking further actions to privately prepare Plaintiffs’ case. (Docket Nos.

61 & 82.) Nothing in this Court’s stay orders prohibited either side from engaging in informal

investigation of the stayed claims, nor from communicating with potential witnesses.13 AutoZone’s

assertion that the obtaining of declarations from witnesses during the stay period was equivalent to

conducting “one-way depositions, without the benefit of notice and cross-examination or objections

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by an opponent” (Motion at 11:19-21) distorts the nature of these investigatory steps taken by Bailey

Pinney. Adequate safeguards exist to ensure that, once the stay is lifted, AutoZone has the

opportunity to depose such witnesses. 

2. Bailey Pinney’s Sending Of “Unauthorized” Notices To Class Members.

AutoZone’s intimation in its Motion (largely abandoned on reply) that Bailey Pinney

violated ethical precepts simply by sending letters to putative class members is misguided. 

AutoZone conflates counsel’s independent communications directed at putative class members with

the Court’s involvement in authorizing or prohibiting pre-certification communications. (See

Motion at 12:23-13:2 & n.9). The cases cited by AutoZone discuss only the impropriety of the

latter. Under Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), the Court’s authority to limit

communications from named plaintiffs and their counsel to prospective class members is

circumscribed. “[A]n order limiting communications between parties and potential class members

should be based on a clear record and specific findings that reflect a weighing of the need for a

limitation and the potential interference with the rights of the parties.” Id. at 101. “[S]uch a

weighing-identifying the potential abuses being addressed-should result in a carefully drawn order

that limits speech as little as possible, consistent with the rights of the parties under the

circumstances.” Id. at 102; see also Domingo v. New England Fish Co., 727 F.2d 1429, 1440 n.9

(9th Cir. 1984). 

Although Bailey Pinney’s communications with represented parties raises concerns in

connection with Rule 2-100 (as discussed above), there is no basis to conclude that it is

independently unethical for Bailey Pinney to communicate with putative class members in this

litigation.

3. Mr. Bailey’s Candor Regarding His Pending Oregon Disciplinary Charge.

AutoZone contends that Bailey Pinney misled the Court regarding Mr. Bailey’s standing

with the Oregon State Bar in his pro hac vice application in the related Ellison v. Autozone matter. 

On September 22, 2006, disciplinary proceedings were initiated against Mr. Bailey before

the Oregon State Bar. The nature of these disciplinary charges could have resulted in his

suspension. (Hoffman Decl., Exh. 9 at ¶ 18.) On January 18, 2007, Mr. Bailey represented to the

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14 Regardless of whether Mr. Bailey violated Civil Local Rule 11-3, Mr. Bailey’s prior stipulated discipline for

acting with a conflict of interest and failing to disclose the conflict to his client for the purpose of providing informed consent

provides further support for the Court’s conclusion that Bailey Pinney’s violation of Rule of Professional Conduct 3-310(c)(3)

in this case warrants disqualification.

15 Mr. Bailey’s decision not to disclose the pending disciplinary charge is nonetheless troubling. “An attorney does

not simply act as an advocate for his client; he is also an officer of the court. As such, an attorney has a duty of good faith

and candor in dealing with the judiciary.” United States v. Associated Convalescent Enter., Inc., 766 F.2d 1342, 1346 (9th

Cir. 1985); see also Local Rule 11-4 (requiring attorneys appearing before this Court to “practice with the honesty, care, and

decorum required for the fair and efficient administration of justice.”) 

20

Court, in his pro hac vice application in the related Ellison action, that he was a member in good

standing of the state bars of Oregon and Washington. (Hoffman Decl., Exh. 7.) At the time Mr.

Bailey made this representation, he was aware of the pending disciplinary proceedings against him. 

Approximately a month later, on February 20, 2007, the Supreme Court of Oregon approved a

stipulation for discipline against Mr. Bailey. In particular, Mr. Bailey agreed to a public reprimand

for acting with a conflict of interest and failing to disclose the conflict to his client for the purpose of

providing informed consent. (Hoffman Decl., Exhs. 9 & 10.) On April 11, 2007, the Washington

State Bar issued reciprocal discipline to Mr. Bailey regarding this violation. (Hoffman Decl., Exh.

10.)14

Mr. Bailey’s decision not to disclose his pending disciplinary charge did not violate any

express rule of this Court. Civil Local Rule 11-3(a)(1) requires a pro hac vice applicant to certify

under oath that “he or she is an active member in good standing of the bar of a United States Court

or of the highest court of another States or the District of Columbia, specifying such bar.” Unlike

the local rules in several other districts, the Northern District’s local rule does not explicitly require

the affiant to recite that he or she has no disciplinary or grievance proceedings pending. Compare

U.S. v. Howell, 936 F. Supp. 767, 769 (D.C. Kan. 1996) (District of Kansas local rules require

applicant to recite that “no disciplinary or grievance proceedings have been filed or are pending”). 

Moreover, the Northern District’s local rule does not define the term “good standing.” At the time

that Mr. Bailey made his representation, he was not under suspension from the Oregon State Bar and

arguably remained in “good standing” with that bar. On this record, the Court is unable to find that

Bailey Pinney violated Civil Local Rule 11-3.15 

4. Bailey Pinney’s Candor To Magistrate Judge Chen Regarding Its Intended Use

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Of The Contact Information For Putative Class Members.

AutoZone contends that Bailey Pinney misled Magistrate Judge Chen regarding the reasons

it sought discovery of documents and data from AutoZone that included putative class member

names and addresses. AutoZone contends that Bailey Pinney used this information to send

communications to the putative class members without advising the Court in advance of its

intentions.

On the record before the Court, Bailey Pinney’s use of this information produced in

discovery did not constitutes a misuse of the discovery process or breach a duty of candor with the

Court. As an initial matter, although the Magistrate indicated that the production should be treated

as “attorneys eyes only” (Reply Hoffman Decl., Exh. 28 at 18:10-12), the Stipulated Protective

Order does not place restrictions on the use of information to litigate the case (Docket No. 75). 

Moreover, the record before this Court does not adequately detail the meet-and-confer

communications that the Magistrate anticipated would take place regarding privacy issues,

redactions, and the inclusion of identifying information. The transcript of the June 14, 2006

proceedings in front of Magistrate Judge Chen does not contain any disclosure or discussion by

Bailey Pinney of the possibility that identifying information would be used by Bailey Pinney to

contact putative class members. (Reply Hoffman Decl., Exh. 28.) However, at that hearing,

AutoZone did specifically flag concerns that the requested information “intrudes upon both the

company and non-party privacy interests” and suggested the possibility of “remov[ing] any

identifying information.” (Id. at 13:25-14:10.) The parties and the Magistrate agreed at the hearing

to a further meet-and-confer process to resolve such issues. (Id. at 13:25-14:10, 18:10-12, 21:3-8.) 

The record before this Court does not make clear what further meet-and-confer negotiations took

place between the parties regarding these privacy and redactions issues. On this incomplete record,

the Court is unable to conclude that Bailey Pinney acted improperly with respect to the names and

addresses of AutoZone employees.

5. Tendering Misleading Testimony From Class Members.

AutoZone contends that Bailey Pinney has tendered false and misleading testimony, in the

form of affidavits from putative class members that later turned out to be false or were recanted by

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the witnesses under examination. AutoZone’s attempt to identify contradictions between these

witnesses’ affidavits and deposition testimony does not hold up to scrutiny.

With respect to Plaintiff Medrano, AutoZone does not adequately establish that she or Bailey

Pinney intentionally submitted false testimony. Plaintiff Medrano did not provide any declaration in

support of Plaintiffs’ motion for class certification; instead, Bailey Pinney cited to her deposition

testimony that she closed the store three times a week. (Mac Farlane Class Cert. Decl., Exh. 10 at

22:21-25.) AutoZone contended, in opposition to the class certification motion, that this testimony

cannot be accurate in light of time records that she contemporaneously signed that are inconsistent

with her closing the store. (Docket No. 144.) On reply, Plaintiffs conceded that they overlooked

that Medrano clarified later in the deposition that she could not remember exactly how often she

closed the store. (Docket No. 150.) However, as Plaintiffs also point out, Medrano testified that

while the timecards accurately reflect when she punched in and punched out, they do not capture her

off-the-clock time. (Id.) AutoZone’s identification of contradictions between the time records and

Medrano’s testimony certainly goes to the accuracy of Medrano’s recollections, and may well be

relevant to the factfinder’s determination of her credibility, but does not suffice to establish that she

or Bailey Pinney intentionally submitted false testimony.

With respect to declarant McDaniel, AutoZone fails to identify any testimony directly

contradicting the identified portion of his declaration submitted in support of the class certification

motion. (Mac Farlane Class Cert. Decl., Exh. 7.)

With respect to declarant Knox, Knox’s declaration submitted in support of the class

certification motion states that he did not get vacation pay until almost two weeks later. (Mac

Farlane Class Cert. Decl., Exh. 6.) Knox made no claim in his declaration that he worked off the

clock, and the deposition testimony identified by AutoZone does not contradict his declaration.

6. Failure to Disclose Witnesses.

AutoZone contends that Bailey Pinney breached its obligation under Rule 26(a)(1) to

disclose at least seven witnesses who would offer testimony in support of class certification. 

According to AutoZone, Bailey Pinney was aware of these witnesses – two expert, five percipient –

as early as February or March 2007, but did not reveal them until June 2007. 

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28 16 Plaintiff filed a motion for leave to file a surreply addressing these newly-rised allegations. (Docket No. 199.)

 Good cause appearing therefore, the Court GRANTS the motion. The Court has considered the contends of the surreply.

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Bailey Pinney’s delay in disclosing witnesses, while possibly an example of tactical

gamesmanship, does not rise to the level of an ethical violation. As Plaintiff points out, the parties

disagreed over the effect of a prior stipulation and proposed order that had been agreed to by the

parties but not signed by the Court. After the Magistrate resolved this dispute in favor of AutoZone

(Docket No. 171), Plaintiff complied with the decision. AutoZone’s characterization of this ruling –

that the “Court has made a finding that plaintiff’s attorneys concealed witnesses” – is not accurate.

Magistrate Judge Chen made no explicit ruling to this effect. Moreover, AutoZone has had an

opportunity to depose Plaintiff’s witnesses and are further protected by a stipulation between the

parties that the class certification hearing will take place no sooner than 30 days after AutoZone

receives the transcripts of those depositions. The Court cannot conclude, on the record before it, that

the position taken by Bailey Pinney on the witness disclosure issue was a breach of ethical duties.

7. Representation Of Multiple Classes Against The Same Defendant.

AutoZone contends that Bailey Pinney has a conflict of interest because it is prosecuting a

similar class action against Autozone in Oregon – the Joarnt action. Prosecuting claims against the

same defendant in different actions can create a conflict of interest for the attorneys, placing a class

at risk that its interests will be compromised for the benefit of parties in another action. See Kayes v.

Pacific Lumber Co., 51 F.3d 1449, 1465 (9th Cir. 1995); Sullivan v. Chase Inv. Serv., Inc., 79 F.R.D.

246, 258 (N.D. Cal. 1978). However, AutoZone has introduced no evidence from which the Court

could conclude that Bailey Pinney’s simultaneous representation of the two classes undermines its

ability to adequately represent each class in this particular situation. The sole email to which

AutoZone cites does not indicate, as AutoZone contends, that Bailey Pinney tied negotiations in the

two cases together. (Docket No. 144 at 13.) On this record, the Court cannot conclude that this

allegation supports disqualification. 

8. New Allegations In Reply.

In its reply, AutoZone raises new allegations that Bailey Pinney and one of Plaintiff’s experts

misled the Court and submitted false expert testimony.16 However, AutoZone’s allegations that Mr.

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17 Because Bailey Pinney had not previously raised the standing issue, and cited authority at the hearing not

previously brought to the attention of counsel or the Court, the Court permitted AutoZone to file a supplemental letter brief

on this issue after the hearing. (Docket No. 203.)

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Shubin’s testimony was intentionally false are not adequately supported by the record.

First, Mr. Shubin’s declaration in support of Plaintiff’s pending motion for leave to

supplement expert report, which represents that he newly discovered errors in his data analysis, is

not inconsistent with his deposition testimony. In deposition, Mr. Shubin explained that his

correction of errors has been an iterative and multi-step process, and that the April 11, 2007 email

reflects only an initial and ultimately unsuccessful attempt to correct those errors. (Reply Hoffman

Decl., Exh. 27 at 57:24-72:13.) AutoZone has overstated the degree to which Mr. Shubin’s

declaration is contradicted by his deposition testimony. 

Second, Mr. Shubin’s declaration that he was the only “programmer” who worked on the

database is not rendered false by his testimony that he enlisted his wife, son, daughter and son’s

girlfriend to help him with the mechanical extraction of information for the database. Mr. Shubin’s

deposition testimony makes clear that these family members were not operating as programmers. 

(Id. at 38-40, 80.) 

Third, in deposition, Mr. Shubin did concede that calculations that he extracted 25,000 pages

of data, and that he worked 300 hours in extracting the data, were inaccurate and overstated the

amount of work given to those tasks. (Id. at 84:8-86:11.) However, AutoZone has failed to

establish that these inaccuracies rise to the level of intentional misconduct.

C. AutoZone’s Standing To Seek Disqualification.

At oral argument, Bailey Pinney for the first time challenged AutoZone’s standing to seek

disqualification.17 Questions of standing for purposes of disqualification motions must be decided

under federal law. See Colyer v. Smith, 50 F. Supp. 2d 966, 971 n.2 (C.D. Cal. 1999); F.D.I.C. v.

U.S. Fire Ins. Co., 50 F.3d 1304, 1312 (5th Cir. 1995). Accordingly, “[a] non client litigant must

establish a personal stake in the motion to disqualify sufficient to satisfy the ‘irreducible

constitutional minimum’ of Article III.” Colyer, 50 F. Supp. 2d at 971. However, “in a case where

the ethical breach so infects the litigation in which disqualification is sought that it impacts the

moving party's interest in a just and lawful determination of her claims, she may have the

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18 See also Abbott v. Kidder Peabody & Co., Inc., 42 F. Supp. 2d 1046, 150 (D. Colo. 1999) (defendants had standing

to move for disqualification of plaintiffs’ counsel where “interests of the public are so greatly implicated that an apparent

conflict of interest may tend to undermine the validity of the proceedings”); Beck v. Board of Regents of State of Kansas, 568

F. Supp. 1107, 1111 (D. Kan. 1983) (defendants had standing to seek disqualification of plaintiffs’ counsel based on conflict

where conflict issues placed “confidence in the integrity and efficiency of the legal system and the legal profession” under

scrutiny).

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constitutional standing needed to bring a motion to disqualify based on a third-party conflict of

interest or other ethical violation.” Id. at 971-72.18

The Court finds that Autozone has adequately established Article III standing to seek

disqualification here. To begin with, the conflict of interest identified by AutoZone impairs

AutoZone’s interest in a just and binding adjudication of the class claims in Martinez. Just as

importantly, because Bailey Pinney seeks to represent a putative class in this litigation, AutoZone

also has stake in reaching a just and binding adjudication regarding the merits of this case, without

exposure to challenge by absent class members at a later date based on Bailey Pinney’s breach of

ethical rules

In particular, the two most serious ethical breaches discussed above – an ongoing concurrent

conflict of interest without written informed consent, and improper contact with represented parties,

including putative class members – also tend to undermine the validity of these proceedings, and

trigger this Court’s inherent obligation to manage the conduct of attorneys who appear before it, to

ensure the fair administration of justice, and to assure that the interests of unnamed class members

are adequately protected. See Colyer, 50 F. Supp. 2d at 972. Because these two ethical breaches “so

infect the litigation in which disqualification is sought that [they] impact[] the moving party's

interest in a just and lawful determination” of its claims, AutoZone has standing to seek

disqualification. Id. at 971-72.

DCH Health Services Corp. v. Waite, 95 Cal. App. 4th 829, 832 (2002), cited by Bailey

Pinney, does not point towards a different result. As an threshold matter, the question of standing to

bring a disqualification motion is determined by federal law, not state law. In any event, DCH does

not discuss Article III standing principles. Moreover, in its discussion of standing under California

law, DCH analyzed standing solely in the context of an alleged breach of the duty of confidentiality,

which is not the basis for AutoZone’s disqualification motion here. Finally, DCH did not involve

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class action claims. The presence of class action claims in both this action and the Martinez action

provide AutoZone with a sufficient stake in the outcome of its Motion to confer Article III standing.

CONCLUSION

For the foregoing reasons, the Court GRANTS the Motion and DISQUALIFIES the Bailey

Pinney firm from further representation of Plaintiffs, putative class members, or any other persons or

entities involved in this matter.

IT IS SO ORDERED.

Dated: December 5, 2007 

MARTIN J. JENKINS

UNITED STATES DISTRICT JUDGE

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