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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

JOHN E. ABDO, et al., 

Plaintiffs, 

v. 

MICHAEL FITZSIMMONS, et al., 

Defendants. 

Case No.17-cv-00851-EDL 

ORDER DENYING DEFENDANTS’ 

MOTION TO DISQUALIFY 

PLAINTIFF’S COUNSEL AND FOR 

LIMITED DISCOVERY 

Before the Court is Defendants Michael R. Fitzsimmons (“Fitzsimmons”), Peter Lai, Chris 

G. Power, Peter J. Goettner, Christian Borcher, Ernest D. Del., Marc S. Yi, James C. Peters 

(“Peters”), Souheil S. Badran’s (collectively, “Defendants”) motion to disqualify Plaintiff’s 

counsel Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. (“SWMWAS”) and for 

limited discovery in this securities fraud action. Plaintiff John E. Abdo (“Plaintiff”)1 opposes 

Defendants’ motion. For the reasons discussed below, the motion is DENIED. 

I. FACTUAL BACKGROUND 

A. Parties 

Plaintiff is Vice President of BBX Capital (“BBX”), a real estate investment corporation. 

Fitzsimmons Decl. ¶ 10; Miller Decl. ¶ 2. In that role, he works closely with the CEO of BBX, 

Alan Levan (“Levan”). Fitzsimmons Decl. ¶ 5; Miller Decl. ¶ 2. Delivery Agent, Inc. (“Delivery 

Agent”) is a California corporation founded in 2005 to develop technology that would allow 

viewers to purchase products directly though their televisions. See Fitzsimmons Decl. ¶ 2. It filed 

for Chapter 11 bankruptcy on September 15, 2016, and the bankruptcy court ordered conversion to 

 

1

 John E. Abdo brings this case as trustee of both the John E. Abdo Trust Dated March 15, 1976, 

and the John E. Abdo Trust Dated June 11, 2014. 

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Chapter 7 bankruptcy by June 6, 2017. Hernandez Decl. ¶¶ 2, 5, 12; Fitzsimmons Decl. ¶ 2. 

Defendant Fitzsimmons was Delivery Agent’s CEO, as well as a director, until its bankruptcy. 

Fitzsimmons Decl. ¶ 1. Defendant Peters was Delivery Agent’s COO and President, Miller Decl. 

¶ 8, and the remaining defendants were other Delivery Agent officers and directors. Hernandez 

Decl. Ex. A at 1, 2. 

 SWMWAS is a law firm based in Miami, Florida. Miller Decl. ¶ 1. Alison Miller 

(“Miller”) is the head of SWMWAS’s corporate law and securities practice and has represented 

both Plaintiff and Levan for more than thirty years, although she has not appeared on their behalf 

in this action. Miller Decl. ¶ 2. In this action, Plaintiff is represented by Eugene Stearns 

(“Stearns”), a partner at SWMWAS licensed to practice law in Florida, and Jason Hernandez 

(“Hernandez”), a partner at SWMWAS licensed to practice in California and Florida. Hernandez 

Decl. ¶ 1. 

B. Defendants’ Alleged Fraud 

The underlying dispute in this case centers on Plaintiff’s purchase of $18 million in 

securities from Delivery Agent between June 2014 and April 2016, and Defendants’ subsequent 

fraud. Plaintiff alleges that Defendants unlawfully concealed Delivery Agent’s failed attempt to 

use its technology in a TV commercial broadcast during the February 2, 2014 Super Bowl. 

Complaint (“Cmpl.”) ¶ 5. Had the technology functioned properly, TV viewers would have been 

able to use their television’s remote control to purchase items from David Beckham’s clothing line 

from H&M. Id. ¶ 44. Plaintiff alleges that, in response to the technology’s failure, Defendants 

directed Delivery Agent’s employees to purchase the items advertised during the commercial 

themselves to make it appear that the technology had functioned properly. Id. ¶ 63. Plaintiff 

alleges that Defendants’ conduct has rendered his securities worthless. Id. ¶¶ 5, 8. 

C. Deloitte Audit and Draft Item 304 

At some point between 2012 and 2014, Delivery Agent contracted with accounting firm 

Deloitte to audit Delivery Agent’s consolidated financial statements as of December 31, 2012. 

See id. ¶ 62. Plaintiff’s complaint alleges that, in February 2014, a Delivery Agent whistleblower 

approached Deloitte and informed it of Delivery Agent’s Super Bowl cover-up. Id. The 

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complaint further alleges that Defendants unanimously voted to terminate Deloitte when they were 

informed that, in order to complete its audit for 2013, Deloitte would need to “significantly expand 

the scope” of its previous audit. Id. ¶¶ 71, 73 

In order to terminate an auditor relationship, the SEC requires a corporation to issue a 

written statement, known as an Item 304, explaining, among other things: (i) whether the auditor 

was dismissed or resigned; (ii) whether the auditor’s report on the corporation’s financial 

statements contained an adverse opinion; and (iii) who recommended and approved the decision to 

terminate the auditor. 17 C.F.R. § 229.304(a)(1)(i-iii). The SEC requires the corporation to 

provide the auditor with a copy of the Item 304, and the auditor must then respond by letter, 

known as an Auditor’s Response, stating whether it agreed with the contents of the Item 304. See 

17 C.F.R. § 229.304(a)(3). Delivery Agent provided Deloitte with its Item 304 (“Draft Item 304”) 

in July 2015, and Deloitte provided Delivery Agent with its Auditor’s Response (“Auditor’s 

Response”) shortly after. Fitzsimmons Decl. ¶ 3. 

D. Fitzsimmons’s Correspondence with Alison Miller 

On August 19, 2015, Fitzsimmons emailed Levan to request assistance in obtaining legal 

advice regarding Delivery Agent’s Draft Item 304. Fitzsimmons Decl. ¶ 2. Fitzsimmons’s email 

stated: “Alan -- are your lawyers worth us considering for the Deloitte issue? It sounds like they 

know the game on the 304 topic.” Fitzsimmons Decl., Ex. A. Later that day, Fitzsimmons sent 

Levan the Draft Item 304 and the Auditor’s Response and thanked him for his help. Fitzsimmons 

Decl. ¶ 6. Levan responded on August 25, 2015, instructing Fitzsimmons to call “Alison Miller of 

Sterns Weaver Miller.” Fitzsimmons Decl. ¶ 7. Plaintiff also emailed Fitzsimmons stating, 

“When you asked me for our lawyers, I mentioned that Alison Miller has been representing us in 

these issues for about 40 years . . . she is the best because her heart and soul are engaged on behalf 

of her clients.” Fitzsimmons Decl. ¶ 10. 

Fitzsimmons then emailed Miller, “Nice to meet you. What time suits for a call this 

morning?” Fitzsimmons Decl. ¶ 8. On August 26, 2015, Miller and Fitzsimmons spoke briefly by 

phone. Miller Decl. ¶ 8; Fitzsimmons Decl. ¶ 11. Fitzsimmons provided what he characterizes as 

confidential information during that phone call. Fitzsimmons Decl. ¶ 11. Following the phone 

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call, Peters sent a copy of both the Draft Item 304 and Auditor’s Response to Miller. Id. Miller 

read both documents. Miller Decl. ¶ 8. That same day, Miller emailed Fitzsimmons informing 

him that she “reread everything last night and . . . it would be helpful for me to read the Final 

Report - Would it be possible to send me a copy? Thanks - we just need to get through this!” 

Fitzsimmons Decl. ¶ 9. 

 After August 26, 2015, Miller and Fitzsimmons exchanged a few emails attempting to 

arrange a follow-up conversation. Miller Decl. ¶ 13. In one of those emails, on September 11, 

2015, Miller wrote to Fitzsimmons, asking, “What’s happening? Do you have anything for me to 

see? I’d like to try to help.” Id. The next day, Fitzsimmons wrote back: “We are close to having 

something to share” and that “maybe” they should have a quick call on Monday; Miller responded 

to that email on September 13, 2015, stating that Fitzsimmons should try to reach her on Monday 

when he was available. Miller Decl. ¶ 13. Fitzsimmons and Miller never spoke after that email 

exchange. Id. Fitzsimmons never sent Miller a retainer agreement, and Miller never sent a bill for 

legal services to Delivery Agent or any of its employees. Miller Decl. ¶ 14. 

II. PROCEDURAL HISTORY 

Plaintiff filed his complaint for violation of federal securities laws and intentional and 

negligent misrepresentation on February 21, 2017. That Complaint alleges that Defendants: (i) 

downplayed the significance of a failure of their technology during a Super Bowl advertisement 

and (ii) subsequently covered up their failure in the Draft Item 304 they submitted to Deloitte. 

Cmpl. ¶ 79. The Complaint also points to the Auditor’s Response to support its contention that, 

“Delivery Agent’s most senior officers” attempted to cover up “a catastrophic failure of Delivery 

Agent’s core interactive technology.” Cmpl. ¶ 81. 

On February 27, 2017, Plaintiff’s attorney Stearns, a member of the Florida but not the 

California bar, was admitted to this Court pro hac vice. On March 15, 2017, the Court granted 

Rising Tide’s request to relate Rising Tide I, LLC v. Fitzsimmons, et al., Case No. 4:17-cv-01232 

-- in which the plaintiffs raise similar allegations regarding securities law violations surrounding 

their pre-IPO investments in Delivery Agent from 2014 to 2016 -- to this matter. Dkt. 9. 

Defendants filed this motion to disqualify SWMWAS on May 23, 2017. On June 6, 2017, 

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Plaintiff filed his opposition. Defendants filed their reply on June 13, 2017. The Court held a 

hearing on June 27, 2017. 

III. LEGAL STANDARD 

A threshold question in this case is whether California or Florida ethical rules apply. 

Although California ethical rules arguably apply under American Bar Association (“ABA”) choice 

of law rules, see ABA Model Rules of Prof’l Conduct r. 8.5 (Am. Bar Ass’n 2017) (“For conduct 

in connection with a matter pending before a tribunal, the rules [of professional conduct] of the 

jurisdiction in which the tribunal sits [shall apply]”), parties may stipulate to the application of 

another forum’s law. Cf. Dimidowich v. Bell & Howell, 803 F.2d 1473, 1477 n.1. (9th Cir. 1986) 

(“parties may, in absence of strong contrary public policy, choose which forum’s law will govern 

an action”). Here, the Parties have agreed to application of Florida ethical rules in the pleadings 

and during oral argument, Mot. at 5; Opp. at 6, n.1.; Dkt. 32 at 10:4-5, 15, and thus the Court will 

apply Florida ethical rules. 

Under Florida rules, “[t]he party bringing the motion to disqualify bears the burden of 

proving the grounds for disqualification.” Fenik v. One Water Place, No. 3:06cv514/RV/EMT, 

207 WL 527997, at *4 (N.D. Fla. Feb. 14, 2007). Disqualification is warranted where an attorney 

violates Rule 4-1.9 or Rule 4-1.18 of the Rules Regulating Florida Bar. Rule 4-1.10. 

Rule 4-1.9 provides: 

A lawyer who has formerly represented a client in a matter must not 

. . . represent another person in . . . a substantially related matter in 

which that person’s interests are materially adverse to the interests 

of the former client unless the former client gives informed consent. 

R. Regulating Fla. Bar 4-1.9. In addition, the lawyer may not “use information relating to the 

representation to the disadvantage of the former client.” Id. 

Rule 4-1.18 governs the conduct of attorneys who have formed prospective attorney-client 

relationships. It provides: 

[An attorney who has formed a prospective attorney-client 

relationship] may not represent a client with interests materially 

adverse to those of a prospective client in the same or a substantially 

related matter if the lawyer received information from the 

prospective client that could be used to the disadvantage of that 

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person in the matter. 

R. Regulating Fla. Bar 4-1.18(c). In addition, “a lawyer who has learned information from a 

prospective client may not use or reveal that information.” R. Regulating Fla. Bar 4-1.18. 

IV. DISCUSSION 

Defendants seek to disqualify SWMWAS on the grounds that Stearns and Hernandez 

violated Rule 4-1.9 by representing Plaintiff in spite of Miller’s prior attorney-client relationship 

with Defendants. In the alternative, Defendants contend that SWMWAS violated Rule 4-1.18 by 

representing Plaintiff in spite of the fact that Defendants were a former prospective client. 

Defendants also contend that SWMWAS should be disqualified based on the appearance of 

impropriety. Defendants also request limited discovery regarding the recipients of any privileged, 

confidential information regarding Defendants within or outside of SWMWAS. 

A. Motion to Disqualify 

1. Defendants’ Standing To Bring Motion To Disqualify SWMWAS 

It is undisputed that, if Miller formed any attorney-client relationship through her August 

2015 phone calls and emails with Fitzsimmons and Peters, it was with Delivery Agent the 

corporation, and not Defendants the individuals. Reply at 4, n.4 (“Defendants acknowledge that 

Fitzsimmons did not establish an attorney-client relationship with Miller in his individual capacity, 

and seek disqualification based on Miller’s attorney-client relationship with Delivery Agent and 

Fitzsimmons acting on Delivery Agent’s behalf.”); Razin v. A Milestone, LLC, 67 So. 3d 391, 398 

(Fla. Dist. Ct. App. 2011) (entity’s attorney does not owe duties to the corporate client’s directors 

or officers individually). Accordingly, none of the Defendants were themselves actual or potential 

clients of Miller. Plaintiff argues that Defendants therefore lack standing to now seek 

SWMWAS’s disqualification. 

Plaintiff argues that only an attorney’s current or former client has standing to bring a 

motion to disqualify. See THI Holdings, LLC v. Shattuck, 93 So. 3d 419, 424 (Fla. Dist. Ct. App. 

2012) (“As a general proposition, a party . . . does not have standing to seek disqualification 

where, as here, there is no privity of contract between the attorney and the party claiming a 

conflict of interest.”). According to Plaintiff, only Delivery Agent or those who control Delivery 

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Agent’s attorney-client privilege have standing to bring the instant motion. And, as Plaintiff 

points out, Delivery Agent is not a defendant in this case, nor are Defendants authorized to 

represent it in light of Delivery Agent’s bankruptcy. See Opposition (“Opp.”) at 15 (citing 

Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 349, 105 S. Ct. 1986, 1991, 85 

L. Ed. 2d 372 (1985) (“power [to control attorney-client privilege] passes to the trustee [upon 

bankruptcy]”)). 

However, as Defendants point out, Florida courts recognize an exception to this rule: a 

party has standing to seek disqualification on behalf of another party if the two parties are closely 

related such that the former “stands in the shoes” of the latter. See State Farm Mut. Automobile 

Ins. Co.v. K.A.W, 575 So. 2d 630, 632-33 (Fla. 1991) (moving party may “‘stand in the shoes’ [of 

the former client] . . . for purposes of seeking disqualification on the grounds of conflict of 

interest” where a party has sufficient interest in the outcome of litigation). 

State Farm was the second of two lawsuits stemming from a car accident that involved a 

husband (the driver), his wife (a passenger), and his daughter (also a passenger). In the first 

lawsuit, the husband, wife, and daughter were all represented by the Schlesinger firm. In the 

second lawsuit, the wife and daughter sued the husband, and they were again represented by the 

Schlesinger firm. For purposes of the second lawsuit, the husband was insured by State Farm. 

State Farm brought a disqualification motion, arguing that the Schlesinger firm should be 

disqualified from representing the wife and daughter. The wife and daughter argued that, because 

State Farm was not a former client of the Schlesinger firm, it lacked standing to bring the motion. 

The court disagreed. It held that, because the husband had potentially shared confidential 

information with the Schlesinger firm during the first lawsuit, and because the Schlesinger firm 

was in a position to use that confidential information in the subsequent lawsuit against State Farm 

to State Farm’s detriment, State Farm had standing to move to disqualify. Id. at 633. 

Here, as in State Farm, the former client (Delivery Agent) shared potentially confidential 

information in the form of the Draft Item 304 and the Auditor’s Response with counsel 

(SWMWAS), and SWMWAS could use that information against the parties now bringing the 

motion to disqualify (Defendants). Since the information at issue is directly related to the conduct 

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that Plaintiff alleges was wrongful, Defendants possess the “personal stake” required to stand in 

the shoes of Delivery Agent and have standing to bring this motion. 

2. Rule 4-1.9 

In order to prevail under Rule 4-1.9, Defendants must show: (i) that the subject matter of 

the current case substantially relates to that of the prior representation;2 (ii) the existence of a prior 

attorney-client relationship; and (iii) that the new client’s interests are materially adverse to the 

interests of the former client. See R. Regulating Fla. Bar 4-1.9. Because Defendants cannot 

establish material adversity, their argument fails. 

a. Attorney-Client Relationship Between SWMWAS And Delivery 

Agent 

An attorney-client relationship is formed when a client consults an attorney with the 

intention of employing him, even if the client does not formally hire the attorney. See Metcalf v. 

Metcalf, 785 So. 2d 747, 750 (Fla. Dist. Ct. App. 2001). The existence of the relationship depends 

on “the perspective of the person seeking out the lawyer, not on what the lawyer does after the 

consultation.” See Bartholomew v. Bartholomew, 611 So.2d 85, 86 (Fla. Dist. Ct. App. 1992) 

(existence of attorney-client relationship based on the subjective intent of client).3

Defendants argue that the August and September 2015 communications between 

Fitzsimmons and Peters on the one hand, and Miller on the other, gave rise to an attorney-client 

relationship between Delivery Agent and Miller because Fitzsimmons and Peters had a subjective, 

reasonable belief that such relationship existed. According to Defendants, it is evident that 

Fitzsimmons and Miller had such a subjective belief because they asked Levan to assist them in 

obtaining legal advice, and they thereafter divulged confidential information -- the Draft Item 304 

 

2

 Plaintiff does not dispute that the matters involved in this case are substantially related to those at 

issue during Miller’s potential representation of Delivery Agent. Indeed, it would be difficult for 

Plaintiff to dispute this fact, since Plaintiff’s complaint relies on the Draft Item 304 and Auditor's 

Response -- i.e., the same documents that Miller reviewed for Fitzsimmons -- as evidence that 

Defendants violated the law and are liable for Plaintiff's now “worthless” investment. Cmpl. ¶¶ 

79, 81. 

3

 For this reason, Plaintiff’s argument that there was no attorney-client relationship because 

“Miller was merely looking out for her clients’ financial interests by gaining a better 

understanding of the dispute with the Auditor,” Miller Decl. ¶ 3, fails. 

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and Auditor’s Response -- to Miller, which they would not have done unless they believed that 

their communications were privileged. Fitzsimmons Decl. ¶12. 

Plaintiff responds that, even if Fitzsimmons and Peters subjectively believed that Miller 

was Delivery Agent’s attorney, that belief was unreasonable in light of Miller’s prior, longstanding relationship with Plaintiff and Levan. In support of this argument, Plaintiff relies on two 

New York district court cases holding that counsel “could not be disqualified from representing 

“long-standing client” because defendant “could not reasonably expect confidences imparted 

during joint representation to be withheld from [long-standing client].” Simply Fit of N. Am., Inc. 

v. Poyner, 579 F. Supp. 2d 371, 385 (E.D.N.Y. 2008); see also Cohen v. Acorn Int’l Ltd., 921 F. 

Supp. 1062, 1064 (S.D.N.Y. 1995) (same). 

Plaintiff also contends that Fitzsimmons and Peters’ belief that Miller represented Delivery 

Agent was unreasonable because Miller never actually provided legal services to Delivery Agent. 

As Plaintiff observes, “whether or not an attorney actually rendered legal services can be 

considered in connection with whether or not a putative client's subjective belief is reasonable.” 

In re Lentek Int’l, Inc., 377 B.R. 396, 401 (Bankr. M.D. Fla. 2007), aff’d, 346 F. App’x 430 (11th 

Cir. 2009). 

Defendants respond that, in August and September 2015, while Fitzsimmons and Miller 

were communicating, “there was no reason for Fitzsimmons to think that Stearns Weaver Miller 

could not represent . . . both [Plaintiff and Delivery Agent] in different matters.” Reply at 5. The 

Court is not persuaded by this argument. At that time, Fitzsimmons was already aware that 

Deloitte “did not agree with certain statements” in Delivery Agent’s Draft Item 304 and knew that 

Plaintiff’s investment was in jeopardy. Fitzsimmons Decl. ¶ 2; Miller Decl. ¶ 3. Even though 

Plaintiff and Delivery Agent were still working together in an attempt to “get through” the Draft 

Item 304 issues, Fitzsimmons and Peters could have reasonably foreseen the ultimate adversity 

between themselves and Plaintiff. 

At the same time, as Defendants point out, it is ordinarily the attorney’s burden to identify 

potential conflicts and inform new clients of them. The comment to Rule 4-1.18 states, “Where . . 

. information indicates that a conflict of interest . . . exists, the lawyer should so inform the 

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prospective client.” R. Regulating Fla. Bar 4-1.18. Because Miller did not identify and inform 

Delivery Agent of the potential conflict, it was arguably reasonable for Fitzsimmons and Peters to 

believe that Miller represented Delivery Agent. Because the Court finds no material adversity 

between Delivery Agent and Plaintiff (as discussed below), it assumes that Delivery Agent formed 

an attorney-client relationship with Miller when Fitzsimmons and Peters communicated with her 

in August and September of 2015, as this determination does not affect the outcome of this 

motion.

b. Lack of Material Adversity Between Plaintiff and Delivery 

Agent 

Even if Delivery Agent and SWMWAS formed an attorney-client relationship, there is no 

conflict under Rule 4-1.9 due to lack of material adversity. Rule 4-1.9 prohibits an attorney from 

“represent[ing] another person in . . . a substantially related matter in which that person’s interests 

are materially adverse to the interests of the former client” (emphasis added). R. Regulating Fla. 

Bar 4-1.9. Here, Plaintiff is the new client. Assuming that an attorney-client relationship was 

formed by the August and September 2015 communications, there is no dispute that the client was 

Delivery Agent, not any of the Defendants. Accordingly, the relevant adversity for purposes of 

this disqualification motion is between Plaintiff and Delivery Agent.4

Defendants first contend that, because Plaintiff’s complaint alleges wrongful conduct by 

Defendants based on Delivery Agent’s SEC filings, Plaintiff and Delivery Agent are adverse. 

However, as Plaintiff points out, Plaintiff did not sue Delivery Agent, and his complaint does not 

allege wrongdoing by Delivery Agent, but rather by Defendants. Cmpl. ¶¶ 1, 5. Plaintiff argues 

that, in fact, Plaintiff and Delivery Agent are currently aligned. In support of this argument, 

Plaintiff points to the motion to serve subpoenas and conduct depositions of the Delivery Agent’s 

former directors and officers (“Motion to Examine D&O’s”) brought by Delivery Agent’s 

Creditors Committee in order to gain information from Defendants regarding the same misconduct 

 

4

 During the hearing, the Court provided Defendants with the opportunity to explain why the 

relevant adversity would be between Plaintiff and Defendants, rather than Plaintiff and Delivery 

Agent. Defendants did not do so. 

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alleged in Plaintiff’s and Rising Tide’s complaints. Hernandez Decl. Ex. A. ¶ 22. 

Defendants respond that, as of Delivery Agent’s conversion to Chapter 7 bankruptcy, the 

Creditors Committee had ceased to control Delivery Agent. According to Defendants, following 

this conversion, ‘it is unknown’ whether the Chapter 7 trustee will pursue the same discovery 

sought in the Creditors Committee motion and thus whether Plaintiff and Delivery Agent are 

aligned. Dkt. 32 at 6:4. During the hearing, Defendants described the relationship between 

Plaintiff and Delivery Agent’s estate as follows: there is “no indication that the [estate] . . . is 

aligned or adverse, it is unknown . . . it may be neutral or adverse.” Id. at 6:1-9. Defendants 

further stated that they “don’t know” what [Deliver Agent’s] position is” vis-à-vis Plaintiff. Id. at 

6:10-11. 

This is not sufficient. Defendants carry the burden of proving that the elements of either 

Rule 4-1.9 or 4-1.18 are satisfied, including the element of material adversity. “Neutrality” is not 

the same thing as “adversity,” and if Defendants “don’t know” whether Delivery Agent is adverse 

to Plaintiff, then they have not shown that it is. Accordingly, Defendants’ motion fails under 

Rules 4-1.9. 

3. Rule 4-1.18 

Disqualification under Rule 4-1.18, like Rule 4-1.9, requires that the interests of the new 

client (Plaintiff) be materially adverse to the interests of the former prospective client (Delivery 

Agent). Accordingly, the Court denies Defendants’ motion to disqualify under Rule 4-1.18 for the 

same reasons as under Rule 1-1.9. 

4. Appearance of Impropriety 

Defendants argue that Florida law requires disqualification of SWMWAS even absent 

violation of the Rules Regulating the Florida Bar due to the “appearance of impropriety” resulting 

from the fact that Fitzsimmons and Peters provided confidential information to SWMWAS. Prior 

to the 1987 amendments to the Florida ethical rules,5

 the Eleventh Circuit held that counsel must 

 

5

 Florida’s ethical rules are based on the ABA model rules. Canon 9 of the prior version of the 

ABA model rules prohibited “appearance of impropriety.” The rules were amended in 1983 and 

deleted that language. Florida amended its own rules accordingly in 1987. 

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be disqualified based on an “appearance of impropriety,” which exists where there is: “(i) a 

reasonable possibility that some specifically identifiable impropriety did occur; and (ii) the 

likelihood of suspicion or obloquy outweighs the social interest that will be served by the 

attorney’s continued participation in the case.” United States v. Hobson, 672 F.2d 825, 828 (11th 

Cir. 1982). Plaintiff contends that this “appearance of impropriety” is no longer a viable grounds 

for disqualification because that language was removed from the Florida ethical rules in 1987, and 

that, even if it is, the standard is not met here. 

a. Viability of Standard 

Defendants contend that, although the Florida ethical rules excised the term “appearance of 

impropriety” when they were amended in January 1987, Florida courts have retained “appearance 

of impropriety” as grounds for disqualification. For this proposition, Defendants cite to cases 

decided after January 1987 that continue to apply the “appearance of impropriety” standard, 

including State Farm., 575 So. 2d at 630. 

As noted above, State Farm involved a potential conflict based on the Schlesinger firm’s 

prior representation of a husband, wife, and daughter, and subsequent representation of the wife 

and daughter in a lawsuit against the husband. Id. at 631. State Farm, the husband’s insurer, 

argued that the Schlesinger firm should be disqualified from representing the wife and daughter 

for several reasons, including (i) the conflict between the firm’s prior representation of the 

husband and current representation of parties adverse to the husband (his wife and daughter); (ii) 

the possibility that the firm would use confidential information gained during its prior 

representation of the husband against him; and (iii) the appearance of impropriety. Id. 

The Florida Supreme Court reversed the lower court’s decision not to disqualify the 

attorney based on his prior representation of the husband. Id. at 634. However, it also considered 

the continued applicability of the “appearance of impropriety” standard in light of the 1987 change 

in Florida’s ethical rules. It stated: 

We next address the issue of the appropriate standard to apply to 

determine whether the Schlesinger firm should be disqualified. In 

conflict-of-interest cases such as this arising under the former Code 

of Professional Responsibility, one seeking to disqualify opposing 

counsel was required to show that (1) an attorney-client relationship 

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existed, thereby giving rise to an irrefutable presumption that 

confidences were disclosed during the relationship, and (2) the 

matter in which the law firm subsequently represented the interest 

adverse to the former client was the same or substantially related to 

the matter in which it represented the former client. Ford v. Piper 

Aircraft Corp., 436 So.2d at 305; Sears, Roebuck & Co. v. 

Stansbury, 374 So.2d at 1051. This standard was based on the Code 

of Professional Responsibility, Canon 4, which provided that an 

attorney should preserve the confidences and secrets of a client. Id. 

at 1053. 

In Junger Utility & Paving Co. v. Myers, 14 F.L.W. 2650 (Fla. 1st 

DCA, Nov. 15, 1989), the court applied the same standard to a 

question of disqualification arising under the new Rules of 

Professional Conduct. Like the Junger court, we do not believe that 

a different standard now applies because the specific admonition to 

avoid the appearance of impropriety does not appear in the Rules of 

Professional Conduct. See also Brent v. Smathers, 529 So.2d 1267 

(Fla. 3d DCA 1988) (disqualification required under current Rules 

of Professional Conduct to avoid appearance of impropriety). The 

Rules of Professional Conduct requiring confidentiality serve the 

same purposes as the confidentiality requirements of the Code of 

Professional Responsibility. Similarly, the need for the irrefutable 

presumption continues to exist, just as under the former code. The 

presumption acknowledges the difficulty of proving that confidential 

information useful to the attorney's current client was given to the 

attorney. It also protects the client by not requiring disclosure of 

confidences previously given to the attorney. See Government of 

India v. Cook Indus., Inc., 422 F.Supp. 1057, 1060 (S.D.N.Y.1976) 

(if two actions are substantially related, court will not require proof 

that attorney had access to confidential information, nor give weight 

to attorney's assertion that he had no access to and did not possess 

confidential information), aff’d, 569 F.2d 737 (2d Cir.1978). 

State Farm, 575 So. 2d at 633. 

Another case decided after the 1987 rule change that Defendants cite for the proposition 

that the “appearance of impropriety” standard remains viable is Rentclub, Inc. v. Transamerica 

Rental Fin. Corp., 811 F. Supp. 651, 654 (M.D. Fla. 1992). There, counsel paid the opposing 

party’s former employee to disclose confidential information, which the federal district court for 

the Middle District of Florida found created an “appearance of impropriety” that warranted 

disqualification. The court relied on State Farm for the continued viability of the “appearance of 

impropriety” standard: even though Florida ethical rules no longer contained an express provision 

prohibiting the “appearance of impropriety,” the court held that “Florida law clearly retains this 

requirement.” Id. 

Plaintiff responds that the “appearance of impropriety” is no longer grounds for 

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disqualification after its excision from the Florida ethical rules in 1987 in spite of these cases. He 

correctly argues that State Farm’s discussion of the “appearance of impropriety” standard was 

dicta. The court’s decision to disqualify counsel in State Farm was based on the existence of a 

prior, adverse representation, and its discussion of “appearance of impropriety” was not central to 

its holding. State Farm, 575 So. 2d at 633. This was the same conclusion that the Florida court of 

appeal reached in Anderson Trucking Serv., Inc. v. Gibson, 884 So. 2d 1046, 1049-51 (Fla. Dist. 

Ct. App. 2004) (disqualification in State Farm was based on fact that counsel could use 

confidential information gained during the course of the prior representation in the subsequent 

action, not on “appearance of impropriety”), and that the bankruptcy court for the Southern 

District of Florida reached in In re Patrick Power Corp., No. 06-12423 BKCJKO, 2007 WL 

2883179, at *3-4 (Bankr. S.D. Fla. Sept. 26, 2007) (“relevant legal analysis” used by State Farm 

comported with Rule 4-1.9 and did not “involve an ‘appearance of impropriety’ analysis”). 

Waters v. Kemp further supports this conclusion. There, the Eleventh Circuit reviewed a 

decision by the Southern District of Georgia. 845 F.2d 260 (11th Cir. 1988). Georgia, like 

Florida, tracked the revision to the Model Code of Professional Responsibility by eliminating the 

“appearance of impropriety” grounds for disqualification. Id. The Eleventh Circuit concluded 

that “appearance of impropriety” was no longer grounds for disqualification. Id. at 265. Another 

case from the Southern District of Florida relied in part on Waters to reach the same result under 

Florida law. Armor Screen Corp. v. Storm Catcher, Inc., 709 F. Supp. 2d 1309 (S.D. Fla. 2010). 

The decision contains the following analysis of the continued viability of the “appearance of 

impropriety” standard: 

“Under the Model Rules, the appearance of impropriety is not a 

ground for disqualifying a lawyer from representing a party to a 

lawsuit.” Waters v. Kemp, 845 F.2d 260, 265 (11th Cir.1988). The 

“appearance of impropriety is simply too slender a reed on which to 

rest a disqualification order except in the rarest cases. This is 

particularly true where ... the appearance of impropriety is not very 

clear.” Id. at 265 n. 12 (quoting Bd. of Educ. v. Nyquist, 590 F.2d 

1241, 1247 (2d Cir.1979)). 

Four years ago, the Eleventh Circuit again . . . held that because 

Georgia’s State Bar no longer expressly prohibited the appearance 

of impropriety, the “court was under no obligation to perform the 

[appearance of impropriety] balancing test.” Herrmann v. 

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GutterGuard, Inc., 199 Fed. App’x 745, 754 (11th Cir.2006). Thus, 

the district court “properly applied the conflict of interest standard 

and did not apply the outdated appearance of impropriety standard.” 

Id. at 755. 

Despite the foregoing authority and Florida’s adoption of the 

[revised] Model Rules, numerous federal district courts in Florida 

continue to apply the [appearance of impropriety] test. These 

decisions rely on State Farm Mut. Auto. Ins. Co. v. K.A.W., 575 

So.2d 630 (Fla.1991), and its progeny, for the proposition that while 

Florida’s professional rules no longer prohibit the appearance of 

impropriety, Florida law retains the requirement. 

This interpretation, however, does not follow. The State Farm 

reference to appearance of impropriety was made only in the context 

of affirming the same [conflict-of-interest] test, and particularly the 

irrefutable presumption, that was applied prior to Florida’s adoption 

of the new rules. This Court does not read the decision as retaining 

the appearance of impropriety standard and respectfully disagrees 

with those courts that do. 

Id. at 1318-20 (S.D. Fla. 2010). 

This logic is persuasive. Defendant’s reliance on State Farm for the proposition that 

“appearance of impropriety” warrants disqualification is not mandated by the holding of State 

Farm itself and does not comport with more recent decisions by Florida district courts and the 

Eleventh Circuit. Accordingly, the Court concludes that “appearance of impropriety” is no longer 

a viable standard under the Florida ethical rules. 

b. Application of Standard 

Even if “appearance of impropriety” were a valid basis to disqualify SWMWAS, the 

standard is not met here. Defendants contend that the “appearance of impropriety” exists because 

Miller’s communication with Fitzsimmons created an irrefutable presumption that confidences 

were shared throughout SWMWAS. They note that, in State Farm, the court found that, in light of 

the past relationship between the husband and his attorney, it was not possible for the attorney to 

“erase from his mind the confidences he received from his former client” and therefore the 

“administration of justice was compromised.” State Farm, 575 So. 2d at 633-34. They argue that 

the same situation exists here. 

However, as Plaintiff pointed out at the hearing, the “appearance of impropriety” standard 

was intended to address the “egregious case of attorneys switching sides.” Dkt. 32 at 22:4-7. 

Here, there was never any kind of relationship between Defendants and SWMWAS, and 

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Plaintiff’s counsel has not switched sides, since they have long represented Plaintiff. Accordingly, 

because Defendants were neither former clients nor former prospective clients of SWMWAS, this 

situation is not analogous to the conduct in State Farm that led to the prevention of the “fair 

administration of justice.” 

B. Request for Limited Discovery 

In addition to disqualification of SWMWAS, Defendants seek discovery from both 

SWMWAS and Rising Tide’s counsel, Coblentz Patch Duffy (“Coblentz”) in order to ascertain 

the extent to which the confidential information provided to Miller has been shared both inside 

and outside of SWMWAS.6 Defendants maintain that courts frequently allow discovery on “the 

limited issues concerning a disqualification motion.” To support this argument, Defendants cite 

cases in which Kansas and New York district courts permitted movants to take depositions in 

order to develop a record to support their motions. Renner v. Townsend Financial Services Corp., 

2002 WL 413926 (S.D.N.Y. 2002) (court allowed depositions for purpose of developing record on 

disqualification motion); Williams v. Kopco, Inc., 162 F.R.D. 670 (D. Kan. 1995) (same). 

Plaintiff opposes Defendants’ request for discovery from him and from Rising Tide, and 

Rising Tide opposes Defendants’ request for discovery from Coblentz. 

1. SWMWAS 

Defendant has not established that the limited discovery that they seek from SWMWAS is 

necessary. The cases cited by Defendants in which courts allowed discovery involved depositions 

of counsel, not written discovery. See Renner, 2002 WL 413926; Williams, 162 F.R.D. 670. 

Depositions of counsel are limited to instances where there is no other means to obtain the 

information and the information is critical to preparation of the case. Kelling v. Bridgestone/ 

Firestone, Inc., 153 F.R.D. 170, 171 (D. Kan. 1994). Here, Defendants’ declarations contain 

extensive facts in support of their arguments, and the Parties do not meaningfully disagree about 

the facts at issue. Thus, Defendants’ request for discovery from SWMWAS is denied. 

 

6

 Plaintiff’s opposition to Defendant’s motion briefly raises the question of the admissibility of 

these items. However, this question is not properly before the Court on Defendants’ motion for 

disqualification and need not be resolved at this time. 

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2. Rising Tide 

As noted, Defendants seek discovery from Coblentz regarding what confidential 

information, if any, SWMWAS shared with Coblentz or the Rising Tide plaintiffs. However, 

Defendants failed to raise this issue in the Rising Tide case, and Defendants have not properly 

served Rising Tide -- a nonparty in the Abdo case -- with their request for discovery. 

Accordingly, in addition to the reasons discussed above, Defendants’ request for discovery from 

Coblentz is denied on this bases. 

V. CONCLUSION 

For the reasons discussed above, Defendants’ motion is DENIED. 

IT IS SO ORDERED. 

Dated: July 7, 2017 

 

ELIZABETH D. LAPORTE 

United States Magistrate Judge 

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