UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

_________________________________ UNITED STATES OF AMERICA EX REL MARK CHRISTOPHER TRACY,
Pl aintiff - Appellant,

v. EMIGRATION IMPROVEMENT DISTRICT, a Utah Special Service District; BARNETT INTERMOUNTAIN WATER CONSULTING, a Utah corporation; R. STEVE CREAMER; FRED A. SMOLKA; MICHAEL HUGHES; DAVID BRADFORD; MARK STEVENS; CAROLLO ENGINEERS, a California professional corporation; AQUA ENVIRONMENTAL SERVICES, a Utah corporation; LYNN HALES; ERIC HAWKES; AQUA ENGINEERING, a Utah corporation; JOE SMOLKA; RONALD R. RASH; KENNETH WILDE; MICHAEL B. GEORGESON; KEVIN W. BROWN; ROBERT ROUSSELLE; LARRY HALL; DON A. BARNETT, Defendants - Appellees. No. 17-4062 (D.C. No. 2:14-CV -00701-JNP-PMW) (D. Utah)

_________________________________ ORDER AND JUDGMENT *

_________________________________

* After examining the briefs and appellate record, th is panel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This or der and judgment is not binding precedent, except under the doctrines of la w of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### November 22, 2017
Elisabeth A. Shumaker Clerk of Court2 Before TYMKOVICH , Chief Judge, HARTZ and O’BRIEN , Circuit Judges.

_________________________________ Mark Christopher Tracy app eals from the district cour t’s orders disqualifying his counsel, denying his request for reconsideration of the disqualification order, and dismissing his second amended complaint for failure to obtain new counsel. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the original disqualification because of th e conflict of interest between Tracy and his counsel on a matter collateral to the focus of the litiga tion. But we reverse the court’s denial of his motion for reconsideration because th e conflict had been resolved and there apparently would be no prejudice to the court or any party. As a result, the dismissal of the second amended complaint must also be reversed. We remand for further proceedings.
I. Mr. Tracy, acting as a relator, filed a qui tam complaint against the defendants under the False Claims Act, 31 U.S.C §§ 37 29 et seq. Early in the litigation he directed his attorney , Phillip Lowry, to record a li s pendens against a water share owned by defendant Emigration Improvement District (EID). EID responded with a motion seeking release of the lis pendens as well as attorney fees and statutory damages. The district court granted EID’s motion and instructed EID to file a proposed judgment. EID’s proposed judgment declar ed both Mr. Tracy and Mr. Lowry’s law firm, Christensen and Jensen, P.C. (C&J), to be jointly and severally liable.3 Mr. Lowry filed an objection, purportedly on behalf of both Mr. Tracy and C&J, which argued only that it would be improper to make C&J liable. Because the objection appeared to advan ce the interests of Mr. Lowry and C&J at the expense of Mr. Tracy, th e district court became “con cerned that this [objection] presents an unwaivable conflic t of interest.” Aplt. App

. at 205. It therefore issued an order directing Mr. Lowry and C&J to show cause why they should not be disqualified from repres enting Mr. Tracy. After C&J filed its respon se to the show-cause order, the court issued a memorandum decision and order disqualifying C&J and Mr. Lowry. The order also struck the objection, instruct ed Mr. Tracy to obtain new counsel to respond to the proposed judgment, and directed C&J and Mr. Lowry to obtain outside counsel or request permission to re present themselves. Mr. Tracy, represented by new counsel, fi led a response to the disqualification order and asked the court to reconsider its decision to disqualify C&J. C&J, represented by outside couns el, also filed a response in which it withdrew its objection to the proposed judg ment and stated that “[i] n order to most directly address the Court’s concerns, C&J inte nds to pay the award of damages and attorneys’ fees for the wrongful lis pendens.” Id . at 248. The court declined to reconsider it s disqualification or der and directed Mr. Tracy to obtain new counsel for the entir ety of the case within 21 days or risk dismissal of his complaint. A week late r, it ordered entry of judgment against4 Mr. Tracy and C&J for the atto rney fees and statutory dama ges awarded to EID. The court also ordered releas e of the lis pendens. Mr. Tracy later submitted a status re port stating that he had “spoken with 23 attorneys and law firms in an effort to obtain new counsel, but all have declined for various reasons.” Id . at 276. He also reiterated hi s desire to have C&J continue to represent him in the qui ta m action because he “believe[d ] it would be in my best interest to have them rein stated as my counsel.” Id . at 278. He again requested that the court reconsider its disqualification orde r. The district cour t denied the renewed request for reconsideration and dismissed the action wit hout prejudice because pro se relators may not pros ecute qui tam actions.
II. We review for abuse of di scretion the district cour t’s disqualification order because “the control of attorneys’ conduct in trial litigation is within the supervisory powers of the trial judge, and is thus a matter of judicial discretion.” Cole v. Ruidoso Mun. Sch ., 43 F.3d 1373, 1383 (10t h Cir. 1994) (internal quotation marks omitted); see also Chavez v. New Mexico , 397 F.3d 826, 839 (10th Ci r. 2005) (“We review a district court’s decision on a motion to dis qualify counsel for abus e of discretion.”). Likewise, we review for abuse of discre tion the district court’s decision to deny Mr. Tracy’s motion to reconsider the disqualification order. See Van Skiver v. United
States , 952 F.2d 1241, 1243 (10th Cir. 1991). “A district court abuses its discretion if its decision is arbitrary, capricious, whimsical, or manifestly unreasonable.” Bylin v. Billings , 568 F.3d 1224, 1229 (10t h Cir. 2009) (internal quotation marks omitted).5 Mr. Tracy argues that the district court abused its discretion when it (1) disqualified his counsel without holdi ng an evidentiary hearing and making factual findings; (2) ordered the drastic reme dy of disqualification; and (3) refused to reinstate his counsel after the purported conf lict was mooted. His first issue was not preserved below. He never requested that the district court hold an evidentiary hearing nor did he argue to the district court that it was required to hold an evidentiary hearing at any poi nt during the proceedings in the district court. We therefore decline to address it. See Singleton v. Wulff , 428 U.S. 106, 120 (1976) (“It is the general rule, of course, that a federal appellate court does not consider an issue not passed upon below.”). We have explained that we will consider new arguments for reversal on appeal “only if the appellant can satisfy the elements of the plain error standard of review.” Richison v. Ernest Grp., Inc ., 634 F.3d 1123, 1130 (10th Cir. 2011). An d ordinarily we will not review for plain error unless the appellant argues why that sta ndard has been satisfied, see id . at 1130-31, but Mr. Tracy has not so argued. We also affirm the original disqualif ication order. The district court considered the nonexhaustiv e factors set forth in Parkinson v. Phonex Corp ., 857 F. Supp. 1474, 1476 (D. Utah 1994): The egregiousness of the violation, the presence or absence of prejudice to the other side, and whether and to what ex tent there has been a diminution of effectiveness of counsel ar e important considerations. In addition, equitable considerations such as the hardship to the other side and the stage of trial proceedings are relevant. The essential issue to be determined in the context of litigation is whethe r the alleged misconduct taints the lawsuit.6 It concluded that disqualifi cation was appropriate because all the factors weighed in favor of disqualification. The court found that (1) the o ffense was egregious because Mr. Lowry and C&J “advance[ed] arguments to serve their own intere sts at the direct expense of their client’s in terests,” Aplt. App. at 224; (2) there was prejudice to Mr. Tracy because “his own counsel advan ce[d] arguments agai nst his interests,” id

. at 225; (3) “there has been a significant diminution of the effectiveness of counsel” because “[the] case has ground to a halt due to the conflict of interest” and “adversarial briefing . . . wi ll not be complete until Mr. Tracy obtains outside counsel,” id . at 225-26; and (4) “[w]hile the case was filed some time ago, much of the elapsed time was spent waiting for the United Stat es to determine whether it would intervene in this acti on” so “[t]he case is st ill in the ear liest stage,” id . at 226. We see no abuse of discretion in the court’s initial deci sion to disqualify C&J. Not so for the denial of the motion to reconsider. C&J responded to the disqualification order by removing its objection to the proposed judgment and expressing its intent to pay the judgment in full, thereby eliminating the source of the conflict with Mr. Tracy. Mr. Tracy also responded to the dis qualification order and moved for reconsideration. He stated that (1) he did not believe there was a conflict between himself and C&J, but even if ther e was one, he waived the conflict; (2) there was no suggestion that C&J wa s conflicted on any issue ot her than the lis pendens issue, so after that was resolved there was no reason why C&J could not resume representing him for the remainder of the case; (3) C&J’s continued representation would not prejudice any other party; (4) there was no ongoing conflict that would7 cause his former attorney s to be less zealous in advocating for him; and (5) disqualification would create a consider able hardship for him and would cause him to be severely prejudiced . He requested “reinstatement of C&J because it would be in his own best interests for C&J to con tinue to represent him in this matter.” Aplt. App. at 238 Denying the motion to reconsider, the di strict court said that the conflict between Mr. Tracy and C&J was not wa ivable. Although acknowledging that disqualification of counsel woul d be “disruptive,” it determ ined that the hardship to Mr. Tracy did not rise to th e level of “‘manifest injus tice’” sufficient to justify reconsideration of its di squalification order. Id . at 263 (quoting Servants of Paraclete v. Does , 204 F.3d 1005, 1012 (10th Cir. 2000)). The court acknowledged C&J’s withdrawal of its objection to the lis pendens judgment and its offer to pay the judgment by itself, but it said that “[c] ounsel cannot expect to act in a manner warranting disqualification in one aspect of a case and then return to the rest of the case as if the conduct never occurred—the tain t of such conduct cannot be artificially confined to discrete issues in a case.” Id . It concluded that C&J’s actions were “plainly insufficient to undo th e taint on the underlying lawsuit.” Id

. The court also denied Mr. Tracy’s rene wed request for reconsideration in his status report, which stated that he had b een unable to obtain an attorney within the 21 days allotted because the 23 attorneys and law firms he ha d spoken with had declined for various reasons. The court’s denial was “based on the reasoning in its previous order.” Id. at 279.8 In our view the denial of the final reque st for reconsideration was an abuse of discretion. To begin with, the reque st included “new ev idence previously unavailable”—Mr. Tracy’s inability to obtain counsel—which justified reconsideration. See Servants of Paraclete , 204 F.3d at 1012. Turning to the merits, the di strict court did not give adequate consideration to the prejudice suffered by Mr. Tracy and did not adequately explain how the participation of his attorneys for the remainder of the case would taint the litigation. As a general matter, a litigan t has the “right to employ counsel of [his] choice.” Smith v. Whatcott , 774 F.2d 1032, 1035 (10th Cir. 1985) . And here the prejudice to Mr. Tracy is greatly magnified because he asserts that he has been unable to obtain any replacement counsel (an assertion not disputed by op posing counsel or the court below), which precludes him from pursuing his qui tam claim. It is hard to see how a party could be more seve rely prejudiced than by di smissal of his suit. To justify such prejudice, the taint to the litigation must be significant. Typically, ethical violations that require disqualification involv e “(1) a conflict of interest that prevents zeal ous advocacy or (2) the potential use of privileged or confidential information about one party th at would give an unfair advantage to a present client.” Archuleta v. Turley, 904 F.Supp.2d 1185, 1192 (D. Utah 2012). The second circumstance is certainly not present here. As for th e first, the district court was properly concerned that Mr. Tracy’s attorneys were not providing zealous representation when they sought to free th emselves from any sanction for filing the improper lis pendens and placi ng the full sanctions burden on their client. But even9 though the court properly considered th at conduct to be egregious, it has not explained why there should now be concer n about zealous representation by C&J. There is no longer any apparent conflict of interest regarding a matter under litigation and Mr. Tracy, himself an attorney, should be able to adequately as sess the risk of a conflict. Perhaps there is a problem with the representation that was obvious to the district court but has escaped us. EID’s brief does not as sist us in this regard, arguing solely that the “District Court’s re fusal to reinstate [C&J], following its agreement to pay damages arising from th e wrongful lien, was not an abuse of discretion because its prior conduct tainted th e lawsuit.” Aplee. Br . at 33. For now, therefore, we must reverse and remand for either a more complete explanation or the grant of the motion to reconsider.
III. We affirm the district cour t’s initial disqualification order, but we reverse its decision denying Mr. Tracy’s moti on to reconsider that orde r and the dismissal of the case, and we remand for further proceed ings consistent w ith this opinion.

Entered for the Court

Harris L Hartz Circuit Judge