1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ELIZABETH A. STRANGE

First Assistant United States Attorney District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 14249, kevin.rapp@usdoj.gov)

MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov)

PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) 

ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov)

Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

JOHN J. KUCERA (Cal. Bar No. 274184,john.kucera@usdoj.gov) 

Special Assistant U.S. Attorney

312 N. Spring Street, Suite 1200

Los Angeles, CA 90012

Telephone (213) 894-3391

JOHN P. CRONAN

Acting Assistant Attorney General

Criminal Division, U.S. Department of Justice

REGINALD E. JONES (Miss. Bar No. 102806, reginald.jones4@usdoj.gov)

Senior Trial Attorney, U.S. Department of Justice

Child Exploitation and Obscenity Section 

950 Pennsylvania Ave N.W., Room 2116

Washington, D.C. 20530

Telephone (202) 616-2807 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

CR-18-422-PHX-SPL (BSB) 

UNITED STATES’ SUPPLEMENT IN 

SUPPORT OF MOTION TO 

DISQUALIFY COUNSEL

(DWT FIRM)

[Supplement to CR 193]

The law firm of Davis Wright Tremaine (“DWT”) has appeared in this case on 

behalf of two defendants: Michael Lacey and James Larkin. The United States has, in turn, 

moved to disqualify DWT based on conflicts of interest arising from DWT’s previous 

representation of Carl Ferrer (CR 118). The United States recently filed a reply (CR 193) 

to Lacey and Larkin’s response (CR 180). Exhibit A to the United States’ reply is the 

Case 2:18-cr-00422-DJH Document 207 Filed 07/02/18 Page 1 of 4
- 2 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

transcript of the May 23, 2018 hearing in R.O. and K.M. v. Medalist Holdings, Inc., et al., 

No. 17-2-04897-1 (Wash. Super. Ct.). At the hearing, a Washington state judge 

disqualified DWT from representing Lacey and Larkin in R.O., a Backpage-related civil 

case, based on DTW’s prior representation of Ferrer. The court found DWT’s continued 

participation would “create an injustice on the administration of justice” due to 

“intertwined” conflicts. CR 193-1 at 61:12-19. The United States files this Supplement to 

provide the Court with the R.O. court’s written order of June 28, 2018, which 

“memorialize[s] and supplement[s]” the court’s findings and conclusions from the May 23 

hearing. Exhibit 1 at 3 and n.1 (June 28, 2018 Order, attached hereto).

Most pertinent to the United States’ disqualification motion, the court granted 

DWT’s request to withdraw as counsel for 12 of the 17 defendants in R.O. (the 

“Backpage.com Defendants,” including Ferrer) and ordered DWT disqualified from 

representing the five remaining defendants (the “Medalist Defendants,” including Lacey 

and Larkin). Exhibit 1 at 12. DWT had only sought to withdraw from representing the 

Backpage.com Defendants. Nevertheless, after reviewing in camera “supporting 

materials” submitted by DWT, the court “conclude[d] that continued representation of the 

Medalist Defendants by Davis Wright Tremaine is impermissible pursuant to the Rules of 

Professional Conduct,” and disqualified DWT “from continuing to represent any parties in 

this litigation, including the Medalist Defendants.” Exhibit 1 at 12-13.

The court made several findings in support of this ruling, including:

1. Ferrer had “effectively revoked his consent allowing defense counsel to 

jointly represent the multiple Defendants in this lawsuit because of material changes in

circumstances arising, in part, out of the federal criminal proceedings implicating several 

of the Backpage.com and Medalist Defendants....” Exhibit 1 at 13.

2. “The federal criminal proceedings are substantially related to the facts and 

claims in this litigation.” Exhibit 1 at 13.

3. “Defense counsel has jointly represented all defendants in numerous lawsuits

across the country that are also substantially related to the facts and claims in this litigation 

Case 2:18-cr-00422-DJH Document 207 Filed 07/02/18 Page 2 of 4
- 3 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and the federal criminal proceedings. These past and current representations are relevantly

interconnected such that defense counsel is familiar with both the Backpage.com 

Defendants’ and Medalist Defendants’ pattern of conduct as it relates to the claims in this 

litigation.” Exhibit 1 at 13.

4. “[T]he Court concludes that there is a high possibility that Davis Wright 

Tremaine, Davis Wright Tremaine’s attorneys, Eric Stahl, and James Grant will encounter 

an impermissible conflict of interest jeopardizing the effective administration of justice if 

they continue to represent the Medalist Defendants in this litigation.” Exhibit 1 at 13-14.

5. “The Court further concludes that the Backpage.com Defendants’ interest to

preserve the confidences previously disclosed to [DWT] combined with the high possibility 

that [DWT] will encounter conflict if allowed to continue representing the Medalist 

Defendants, outweighs the Medalist Defendants’ interest in maintaining defense counsel 

as their attorneys in this litigation.” Exhibit 1 at 14.

The court also imposed continuing obligations on DWT to preserve “two terabytes 

of data” pertaining to Backpage that DWT apparently continues to retain in its possession, 

notwithstanding its withdrawal from representing Ferrer and Backpage.com, LLC in R.O. 

and multiple other cases throughout the country. Exhibit 1 at 6-7.

Moreover, the court granted plaintiffs’ motion for sanctions “as to all defendants” 

and found, inter alia, that the defendants had “knowingly undertaken a pattern of 

misconduct over several years to deny claims asserted by Plaintiffs and similarly situated 

plaintiffs in the J.S. litigation, which Defendant Ferrer’s plea agreement confirms were 

true.” Exhibit 1 at 7, 9-10. The court “jointly sanctioned” the defendants “in the amount 

of $200,000.00 ($100,000.00 per Plaintiff),” and awarded plaintiffs’ “reasonable attorney’s 

fees and costs that were necessitated by defendants’ misconduct.” Exhibit 1 at 11.

 

Case 2:18-cr-00422-DJH Document 207 Filed 07/02/18 Page 3 of 4
- 4 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Respectfully submitted this 2nd day of July, 2018.

ELIZABETH A. STRANGE

First Assistant United States Attorney

District of Arizona

/s Kevin Rapp

KEVIN M. RAPP

MARGARET PERLMETER

PETER S. KOZINETS

ANDREW C. STONE

Assistant U.S. Attorneys

JOHN J. KUCERA

Special Assistant U.S. Attorney

JOHN P. CRONAN

Acting Assistant Attorney General

Criminal Division, U.S. Department of Justice

REGINALD E. JONES

Senior Trial Attorney

U.S. Department of Justice, Criminal Division

Child Exploitation and Obscenity Section

Certificate of Service

I hereby certify that on this date, I electronically transmitted the attached document to the 

Clerk’s Office using the CM/ECF system for filing and transmittal of a Notice of Electronic 

Filing to the following CM/ECF registrants: Anne Chapman, Erin McCampbell, James 

Grant, Lee Stein, Paul Cambria, Robert Corn-Revere, Ronald London, Janey Henze Cook, 

John Littrell, Kenneth Miller, Thomas Bienart, Jr., Bruce Feder, Michael Kimerer, Rhonda 

Neff, KC Maxwell, David Wakukawa, Michael Piccarreta, Stephen Weiss. 

s/Zachry Stoebe

U.S. Attorney’s Office

Case 2:18-cr-00422-DJH Document 207 Filed 07/02/18 Page 4 of 4