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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’ RESPONSE TO 

DEFENDANT LACEY’S MOTION 

FOR DISCLOSURE OF 

DOCUMENTS RELATED TO CARL 

FERRER’S WAIVER OF PRIVILEGE 

MATERIAL TO 

DISQUALIFICATION

[CR 202]

Preliminary Statement

Defendant Michael Lacey’s Motion for Disclosure of Documents Related to Carl 

Ferrer’s Waiver of Privilege Material to Disqualification should be denied for two essential 

reasons. First, the motion is based on a flawed theory of “materiality” – namely, the notion 

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that the incurable ethical conflict identified in the United States’ Motion to Disqualify 

Counsel (CR 118) would somehow disappear if Lacey could show Carl Ferrer had waived 

his personal attorney-client privilege. Lacey’s materiality theory is based on a too-cramped 

conception of Ethical Rule 1.9(a) of the Arizona Rules of Professional Conduct, Ariz. S. 

Ct. R. 42. ER 1.9(a) commands that “[a] lawyer who has formerly represented a client in 

a matter shall not thereafter represent another person in the same or 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, confirmed in writing.” ER 1.9(a)

(emphasis added). ER 1.9(a) is mandatory and applicable regardless of whether Ferrer 

disclosed any confidences to prior counsel. See Foulke v. Knuck, 784 P.2d 723, 728 (Ariz. 

Ct. App. 1989) (discussing “the mandatory nature of ER 1.9(a)”; “[t]he rule does not 

require that confidences and secrets be divulged in order for a conflict to exist or for 

disqualification to be proper”); Trone v. Smith, 621 F.2d 994, 999 (9th Cir. 1980) (“[I]t 

matters not whether confidences were in fact imparted to the lawyer by the client. The 

substantial relationship between the two representations is itself sufficient to disqualify.”).

Moreover, attorney-client privilege and client confidentiality are entirely distinct 

concepts. ER 1.6’s “sweep is much broader than the attorney-client privilege,” and waiver 

of attorney-client privilege does not vitiate an attorney’s ethical duties under ERs 1.6 and 

1.9 to safeguard confidences and secrets learned during a client representation. See Ariz. 

Ethics Op. 97-05.1

 Further, ER 1.9(a) is based not only on the duty of confidentiality, but 

also on the duty of loyalty to former clients and the need to protect the integrity and fairness 

of legal proceedings that could be compromised when an attorney represents a client 

adverse to a former client in a substantially related matter.

Simply put, regardless of whether Ferrer waived the attorney-client privilege in any 

respect, his former law firms – Davis Wright Tremaine (“DWT”) and Henze Cook Murphy 

(“HCM”) – have ongoing and comprehensive duties to safeguard all information they 

 

1 The Arizona Ethics Opinions cited in this Response are available at 

http://www.azbar.org/Ethics/EthicsOpinions.

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acquired about Ferrer when they represented him. The “broad, prophylactic approach” of 

ER 1.9(a) requires DWT’s and HCM’s disqualification to avoid even the possibility that 

they might use such information adversely to Ferrer. See Ariz. Ethics Op. 91-05. 

Accordingly, the discovery Lacey seeks is not “material” to the disqualification motion. 

Second, Ferrer has not waived – but instead has expressly reserved – his personal 

attorney-client privilege. On April 5, 2018, Ferrer executed a two-page Waiver of Attorney 

Client Privilege. In the last paragraph, he expressly made clear he was only waiving 

Backpage’s corporate attorney-client privilege and not waiving his personal attorney-client 

privilege, either with his current attorneys (from the Clarence Dyer law firm) or any 

attorneys who previously represented him on an individual basis: “I further state that this 

waiver does not apply to any aspect...of my personal attorney-client relationship with 

attorneys who have represented me in the past or who currently represent me....” CR 174-

2 at 5-6 (emphasis added). Lacey cites a statement from a separate Proffer Agreement to 

assert Ferrer waived his personal attorney-client privilege. As explained below (and in CR 

192 at 7-8), the Proffer Agreement only applied to “communications with any attorney or 

law firm that represented Backpage.com, or any related entity.” Even if the language could 

be construed as encompassing Ferrer’s personal attorney-client privilege, it simply 

indicated that, during Ferrer’s proffer sessions with the government, he would discuss 

matters related to these firms if asked to do so. This topic, however, was never broached

during the proffer sessions; accordingly, nothing was waived. If the Court has any doubts, 

the government is prepared to submit for the Court’s in camera, ex parte review the 302 

interview memoranda from Ferrer’s proffer sessions. These memoranda will show that 

nothing about Ferrer’s personal legal representations was discussed. Lacey’s motion 

should be denied.

Factual Background

Since 2010, Ferrer has been named as a defendant, in his personal capacity, in at 

least ten lawsuits in state and federal courts across the country. CR 118 at 3-5. DWT and 

HCM repeatedly represented Ferrer in those lawsuits. CR 118 at 3-5. Lawyers from DWT 

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and HCM prepared Ferrer to testify orally and/or in writing; provided legal advice to 

Ferrer; and otherwise advocated for Ferrer and defended his interests in those cases. CR 

118 at 3-5. These matters involved claims or investigations concerning Backpage.com 

(“Backpage”) and Ferrer’s involvement in facilitating prostitution; several of the civil 

lawsuits were filed by victims who had been trafficked via Backpage. CR 118 at 3-5. 

On March 28, 2018, a grand jury in the District of Arizona issued a 61-page, 93-

count indictment charging Lacey and six other defendants with facilitating prostitution, 

money laundering and conspiracy offenses arising from their years-long operation of 

Backpage, which had become notorious as the internet’s leading source of prostitution 

advertisements. CR 1 at 1-2. Backpage was co-founded by Lacey, Jim Larkin and Ferrer

in 2004. CR 1 at 2. Lacey and Larkin purported to sell Backpage to entities controlled by 

Ferrer in 2015, but they continued to retain significant control over the website and 

received tens of millions of dollars of Backpage-related distributions. CR 1 at 2, 7-8.

On April 5, 2018, Ferrer entered into a cooperation-based plea agreement with the 

government. CR 18-464-PHX-SPL, CR 7. In the factual basis of his plea agreement, 

Ferrer expressly implicated Lacey and Larkin in the knowing facilitation of prostitution 

crimes committed by Backpage’s advertising customers, and in money laundering offenses 

concerning hundreds of millions of dollars in Backpage advertising-related revenue. CR 

18-464-PHX-SPL, CR 7 at 12-14. It is anticipated that Ferrer will be a key prosecution 

witness against Lacey and Larkin at trial. CR 118 at 2, 5-6. Accordingly, Lacey and 

Larkin’s interests are directly and materially adverse to Ferrer’s in this prosecution.

Notwithstanding this stark adversity, the two law firms that formerly represented 

Ferrer in his personal capacity in the lawsuits referenced above – DWT and HCM – entered 

appearances for Lacey and Larkin in this case. CR 118 at 7. 

Because the case law makes clear that prosecutors should bring conflict-of-interest 

issues to the Court’s attention as soon as they become apparent, and have faulted 

prosecutors (and reversed convictions) for failing to do so or waiting until the eve of trial, 

the United States promptly met and conferred with defense counsel, and filed a motion to 

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disqualify the DWT and HCM firms on April 25, 2018. CR 118; see CR 202-2 at 3-4.

On May 1, 2018, counsel for Andrew Padilla, one of Lacey’s co-defendants, wrote 

the government on behalf of all the defendants to seek production of 12 categories of 

documents that, in Padilla’s counsel’s view, “are necessary in order to properly prepare the 

response” to the motion to disqualify DWT and HCM. CR 202-1 at 1. The one-paragraph 

letter did not explain why the requested documents were “necessary” – or even relevant –

to the motion. CR 202-1 at 1. Government counsel met with Padilla’s counsel on May 4, 

2018 and reiterated that defendants had provided no rationale for seeking the documents. 

CR 202-2 at 1. On May 14, 2018, the government again pointed this out in a letter to 

Padilla’s counsel, and invited the defense to “articulate why [the requested documents] 

might be subject to discovery under the relevant rules of criminal discovery.” CR 202-2 at 

1. Defense counsel did not reply to the government’s letter. 

Instead, Lacey and Larkin filed two motions seeking extensions to respond to the 

disqualification motion, and obtained six weeks to respond. See CR 172 at 1. On June 6, 

2018, Lacey, Larkin, Padilla and HCM filed responses to the disqualification motion. CRs 

174, 176-77, 180. The government filed replies on June 13, 2018. CRs 192-94. 

On June 28, 2018, two weeks after the disqualification motion had been fully 

briefed, Lacey filed the instant motion. CR 202. Lacey now claims that the disqualification 

motion cannot be decided until he obtains the discovery described in his motion. In effect, 

his motion operates as an impermissible sur-reply regarding disqualification – and serves 

to further prolong the parties’ litigation regarding DWT’s and HCM’s stark conflict. 

Argument

I. LACEY’S ASSERTION THAT THE REQUESTED DISCOVERY IS

“MATERIAL” TO THE DISQUALIFICATION MOTION LACKS MERIT.

Lacey asserts that the defense is entitled, under Fed. R. Crim. P. 16, to “an order 

compelling the government to produce all documents pertaining to Carl Ferrer’s waiver of 

the attorney-client and work-product privileges as material to resolution of the 

Government’s Motion to Disqualify.” CR 202 at 1. He claims “[t]he record on 

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disqualification is incomplete because defendants and this Court lack material information 

to determine whether disqualification is necessary; namely, the extent to which Mr. Ferrer 

has waived privilege.” CR 202 at 1-2. As Lacey knows, the government has long 

contended that Ferrer waived Backpage’s corporate attorney-client privilege. See, e.g., 

CR 192 at 7-8. Accordingly, Lacey’s motion appears to be premised on the theory that if 

Ferrer also waived his personal attorney-client privilege, then ER 1.9(a) would no longer 

apply and require DWT’s and HCM’s disqualification. See CR 202 at 6. For several 

reasons, Lacey’s theory is fundamentally incorrect and his motion should be denied.

First, Lacey ignores the text and structure of ER 1.9. ER 1.9(a) applies – and 

requires disqualification – when a lawyer who has formerly represented a client in a matter 

thereafter “represent[s] another person in the same or a substantially related matter in which 

that person’s interests are materially adverse to the interests of the former client.” ER 

1.9(a). ER 1.9(a) does not expressly reference confidential information. On its face, it 

requires disqualification regardless of whether the lawyer actually received or possesses 

any confidential information about his or her former client, and regardless of whether 

subsequent events have rendered any such information non-confidential. Foulke, 784 P.2d 

at 728 (“[t]he rule does not require that confidences and secrets be divulged in order for a 

conflict to exist or for disqualification to be proper”). While separate parts of ER 1.9 –

specifically, ER 1.9(b) and 1.9(c) – address conflicts arising from the acquisition of 

confidential and other information in a former representation, mandatory disqualification 

under ER 1.9(a) does not depend on whether the lawyer actually possesses confidences of 

the former client. Foulke, 784 P.2d at 727 (noting that ER 1.9(a) establishes an “absolute 

prohibition” against representation falling within its terms); Trone, 621 F.2d at 999.

Second, Lacey’s theory that waiver of privilege vitiates ER 1.9(a) fundamentally 

misapprehends the critical distinction between the evidentiary attorney-client privilege 

codified in A.R.S. §§ 12-2234 and 13-4062(2), and the “much broader” protections of ER 

1.6. Ariz. Ethics Op. 97-05. “They are entirely separate legal concepts.” Id. “ER 1.6 is 

much broader than the attorney-client privilege. It protects all information relating to the 

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representation against even non-compulsory disclosure.” Samaritan Found. v. Goodfarb, 

862 P.2d 870, 879 (Ariz. S. Ct. 1993). ER 1.6 extends “‘not merely to matters 

communicated in confidence by the client but also to all information relating to the 

representation, whatever its source.’” Ariz. Ethics Op. 97-05 (quoting ER 1.6, Comment). 

See also Ariz. Ethics Op. 00-11 (ER 1.6 applies to “all information relating to 

representation, regardless of the fact that the information can be discovered elsewhere”). 

The rule “imposes confidentiality on information relating to the representation even if it is 

acquired before or after the relationship existed” and “does not require the client to indicate 

information is to be confidential.” Ariz. Ethics Op. 97-05. 

Third, Lacey’s theory ignores other duties and interests that ER 1.9(a) embodies, 

including an attorney’s duty of loyalty to former clients and the strong public interest in 

maintaining the integrity and fairness of legal proceedings. As recognized in T. C. Theatre 

Corp. v. Warner Bros. Pictures – “the seminal case in the area of former client 

representation,” Foulke, 784 P.2d at 728 n.2 – “[a] lawyer’s duty of absolute loyalty to his 

client’s interests does not end with his retainer. He is enjoined for all time, except as he 

may be released by law, from disclosing matters revealed to him by reason of the 

confidential relationship. Related to this principle is the rule that where any substantial 

relationship can be shown between the subject matter of a former representation and that 

of a subsequent adverse representation, the latter will be prohibited.” T. C. Theatre, 113 

F. Supp. 265, 268 (S.D.N.Y. 1953) (emphasis added). See also Trone, 621 F.2d at 998-99

(“Confidentiality, however, is not the only aspect of the professional tie preserved by the 

disqualification rule”, and a lawyer’s professional commitment to his or her clients “is 

endangered, if the possibility exists that the lawyer will change sides later in a substantially 

related matter....From this standpoint it matters not whether confidences were in fact 

imparted to the lawyer by the client. The substantial relationship between the two 

representations is itself sufficient to disqualify.”).

Fourth, for all of these reasons, “[d]isqualification does not depend upon proof of 

the abuse of confidential information. Because of the sensitivity of client confidence and 

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the profession’s institutional need to avoid even the appearance of a breach of confidence,

disqualification is required when lawyers change sides in factually related cases.” Trone, 

621 F.2d at 1001. Accordingly, courts have ordered disqualification under ER 1.9 even 

where the former client’s communications with counsel have lost their confidentiality. See, 

e.g., United States v. Fawell, 2002 WL 1284388, at *6 (N.D. Ill. 2002) (“[T]he court does 

not agree that the [loss of confidentiality] eliminates the conflict resulting from Altheimer’s 

prior representation...That suggestion assumes that the purpose of Rule 1.9(a) is limited to 

protecting the former client’s secrets. Other courts and commentators do not view the 

purpose so narrowly; they conclude instead that the prohibition against representation of 

another person in a same or substantially related matter relates both to the lawyer’s duty of 

confidentiality and his or her duty of loyalty to that former client.”). See also Touchcom, 

Inc. v. Bereskin & Parr, 299 Fed. App’x 953, 955 (Fed. Cir. 2008) (granting

disqualification motion and emphasizing that Rule 1.9 “was designed not only to protect 

client confidences, but to establish broader standards of attorney loyalty”); Sec. Investor 

Protection Corp. v. R.D. Kushnir & Co., 246 B.R. 582, 589 (N.D. Ill. Bkr. Ct. 2000) (“Rule 

1.9 is not limited to situations where a former client would be harmed by the divulgence of 

confidential information....[T]he loyalty principle is an independent and sufficient basis 

for precluding a lawyer from accepting an adverse subsequent representation.”); Selby v. 

Revlon Consumer Prods. Corp., 6 F. Supp. 2d 577, 582 (N.D. Tex. 1997) (“[T]he ethical 

obligations embodied in ABA Rule 1.9 go far beyond the preservation of client 

confidences. The rule also concerns the duty of loyalty to a former client.”).

In Alexander v. Super. Ct., 685 P.2d 1309, 1314-17 (Ariz. S. Ct. 1984), the court 

ruled that disqualification was not warranted where the attorney had received only one item 

of ostensibly confidential information, which his former one-time client later disclosed in 

a publicly-filed affidavit. Id. at 1314-17. Unlike the attorney in Alexander, multiple 

attorneys from DWT and HCM represented their former client – Ferrer – in various

lawsuits against Ferrer in his personal capacity across the country. See CR 118 at 3-5. 

These law firms have acquired significant amounts of information relating to their 

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representations of Ferrer over the years. Even if Ferrer has somehow waived his personal 

attorney-client privilege, that waiver would not absolve DTW and HCM of their ethical 

duties under ERs 1.6 and 1.9. 

Subsequent Arizona cases confirm that ER 1.9(a) requires disqualification where 

the current and former representations are substantially related, regardless of whether the 

former client provided confidential information to the attorney. In Foulke, decided after 

Alexander, the Arizona Court of Appeals rejected the contention disqualification wasn’t 

necessary because “no confidences or secrets were divulged, except perhaps those which 

are now a matter of public record and no longer privileged, and therefore no ‘true conflict 

exists.’” 784 P.2d at 728. The court held this contention “fails to recognize the mandatory 

nature of ER 1.9(a). The rule does not require that confidences and secrets be divulged in 

order for a conflict to exist or for disqualification to be proper.” Id. Rather, “[r]egardless 

of what was communicated during the representation of the former client, the rule prohibits 

subsequent representation of an individual whose interests are substantially adverse to 

those of the former client.” Id. Foulke quoted T.C. Theatre Corp. as stating:

[T]he former client need show no more than that the matters embraced within 

the pending suit wherein his former attorney appears on behalf of his 

adversary are substantially related to the matters or cause of action wherein 

the attorney previously represented him, the former client. The Court will 

assume that during the course of the former representation confidences were 

disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent.

Id. (quoting T.C. Theater, 113 F. Supp. 265, 268-69 (S.D.N.Y. 1953). 

Foulke emphasized the “shall not” of ER 1.9(a) “incorporates the T.C. Theatre

presumption of receipt of confidential information; the attorney is not given the option of 

showing that there is no danger of misuse of confidential information because he never 

received any.” Id. This principle has been repeated in numerous Arizona federal and state 

decisions. See, e.g., In re Ockrassa, 799 P.2d 1350, 1352 (Ariz. S. Ct. 1990) (noting “[t]he 

majority of courts that have considered the issue have held that the presumption that a 

lawyer received such confidences may not be rebutted”); Meschkow & Gresham, P.L.C. v. 

Fran. Capital Corp., 2010 WL 11515666, at *2 (D. Ariz. June 4, 2010) (disqualifying law 

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firm and rejecting screening); Denny’s, Inc. v. Kennedy Restaurants, L.L.C., 2009 WL 

10673455, at *5 (D. Ariz. June 16, 2009) (granting disqualification under ER 1.9(a)). 

Fifth, the only authority Lacey cites in support of his materiality theory consists of 

a single footnote that misapprehends Arizona law regarding disqualification. Lacey writes: 

Arizona E.R. 1.9 is solely “for the protection of clients.” Ariz. Ethics Op. 91-05. In particular, the Arizona State Bar has opined that “[t]he duty of confidentiality is the only duty owed by an attorney to a former client.” Ariz. 

Ethics Op. 92-03 (emphasis added). Consequently, disqualification is unnecessary when “confidential information ... is not in jeopardy.” Id.

CR 202 at 4 n.1. Ironically, the cited Ethics Opinions demonstrate precisely why DWT 

and HCM are subject to mandatory disqualification regardless of whether they received or 

possess confidential information regarding Ferrer.

The first opinion, Ariz. Ethics Op. 91-05, emphasizes the automatic nature of 

disqualification in situations like this. It considered whether a lawyer whose partner 

formerly represented a bookkeeper in IRS proceedings involving unpaid payroll taxes 

owed by her employer’s businesses could represent the employer in a financial fraud 

prosecution in which the bookkeeper would serve as a prosecution witness. The lawyer 

avowed that he never received any information regarding the firm’s prior representation of 

the bookkeeper. While noting, as Lacey does, that ER 1.9(a) was adopted “for the 

protection of clients,” the Opinion continued: “[The rule] seeks to assure clients that their 

lawyers will not use confidential information against them in a subsequent proceeding. To 

accomplish this important objective, the rule takes a broad, prophylactic approach.” 

Id. (emphasis added). Rather than merely prohibiting the lawyer from using confidential 

information against his or her former client, “the rule prohibits the lawyer from even 

entering into a relationship where such misuse is possible. The former client is thus 

protected not only from the misuse of his confidences, but also from the possibility of such 

misuse.” Id. (emphasis added). The Opinion concluded:

(1) lawyer A may not ethically continue to represent D over the objection of 

W, a witness in the prosecution against D and a former client of A’s law firm; 

(2) lawyer A may not, with ethical propriety, conduct the cross examination of W, question her motives and competency to testify, and comment on her 

testimony and demeanor in final summation to the jury; and (3) in response 

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to the question whether there are any restrictions on examination of W other 

than A’s obvious obligation not to disclose privileged information, we 

respond that there are indeed additional restrictions. There is a complete prohibition. A may not represent D in the current criminal proceeding.

Id. (emphasis added). The Opinion also concluded the involvement of a lawyer from 

another law firm as co-counsel for the employer would not obviate lawyer A’s conflict. Id. 

Lacey also misreads Ariz. Ethics Op. 92-03, which underscores the client-protective 

focus of ER 1.9. The Opinion makes clear that under ER 1.9, “if the two representations 

are substantially related, it is presumed that confidentiality will be impinged.” Id. The 

Opinion emphasizes the mandatory nature of disqualification in cases where – as here –

the new matter is “substantially related” to the former representation: “Because B is a 

former client of the inquiring attorney, he must disqualify himself from a representation 

which is adverse to B [if] the subject matter of the new representation is substantially 

related to that of the former representation...” Id. 

Lacey’s citations to cases holding disclosures of attorney-client privileged 

documents to the government waives the privilege “as to the world at large” miss the mark. 

CR 202 at 8-9. Even if Ferrer waived his personal attorney-client privilege by disclosing 

information to the government (which he did not, as discussed in Part II below), ER 1.9(a) 

would still apply and require disqualification for the reasons discussed above. 

The conflict posed by DWT’s continued representation of Lacey is so palpable that 

the Washington state court in R.O. and K.M. v. Medalist Holdings, Inc., et al., No. 17-2-

04897-1 (Wash. Super. Ct.), a Backpage-related civil case, recently disqualified DWT from 

representing Lacey and Larkin based on DWT’s prior representation of Ferrer. In a written 

order issued June 28, 2018, and after reviewing in camera “supporting materials” 

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

Defendants [including Lacey and Larkin] by [DWT] 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 found 

that “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 and 

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

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

Defendants’ [including Ferrer’s] and Medalist Defendants’ pattern of conduct as it relates 

to the claims in this litigation.” Exhibit 1 at 13. The court held “that there is a high 

possibility that [DWT] will encounter an impermissible conflict of interest jeopardizing the 

effective administration of justice if they continue to represent the Medalist Defendants 

[including Lacey and Larkin] in this litigation.” Exhibit 1 at 13-14.

The court also noted that DWT continues to possess “two terabytes of data” 

pertaining to Backpage, despite its withdrawal from representing Ferrer and Backpage in 

the R.O. litigation, and ordered DWT to preserve that data. Exhibit 1 at 6-7. Two terabytes 

is roughly the equivalent of 100 million pages.2

 

The bottom line is that disqualification is required regardless of whether DWT and 

HCM ever possessed confidential information about Ferrer. Lacey’s motion fails for this 

reason alone. 

II. ALTERNATIVELY, FERRER DID NOT WAIVE HIS PERSONAL

ATTORNEY-CLIENT PRIVILEGE.

Second, Lacey’s motion also should be denied because Ferrer has not waived his 

personal attorney-client privilege. On April 5, 2018, Ferrer executed a two-page document 

entitled “Waiver of Attorney Client Privilege.” In the last paragraph, he made clear that 

he was only waiving Backpage’s corporate attorney-client privilege and was not waiving 

his personal attorney-client privilege, either with his current attorneys (from the Clarence 

Dyer law firm) or with any attorneys who previously represented him on an individual 

basis: “I further state that this waiver does not apply to any aspect...of my personal 

attorney-client relationship with attorneys who have represented me in the past or who 

currently represent me....” CR 174-2 at 5-6 (emphasis added). 

Lacey identifies a separate document—a “proffer agreement” that Ferrer executed 

 

2 See Criminal E-Discovery: A Pocket Guide for Judges, at 14 n.35 (Federal Judicial Center 

2015), https://www.fjc.gov/sites/default/files/2016/Criminal%20e-Discovery.pdf.

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on April 5, 2018—as the basis for his claim that Ferrer has waived his personal attorneyclient privilege. Lacey points to the proffer agreement’s second paragraph, which states:

Mr. Ferrer voluntarily waives all claims of attorney-client privilege, whether in his personal or official capacity as the Chief Executive Officer of Backpage.com, LLC as to communications with any attorney or law firm that represented Backpage.com, or any related entity, where such 

communications concerned or related to Backpage.com or any related entity.

CR 174-2 at ¶ 2 (emphasis added). It was the parties’ intention that this language would 

simply track the approach set forth in the formal “Waiver of Attorney Client Privilege” 

document—that is, it would only waive Backpage’s corporate attorney-client privilege but 

not Ferrer’s personal privilege. See CR 193-9 at 7,¶ 45 (Ferrer Declaration). This is why 

the waiver only applied to “communications with any attorney or law firm that represented 

Backpage.com, or any related entity.” It was not meant to apply to attorneys and law firms 

that represented Ferrer in a personal capacity (such as DWT or HCM). The prefatory 

language at the beginning of the paragraph, discussing Ferrer’s “personal or official 

capacity,” was simply meant to demonstrate that Ferrer had a basis for effectuating the 

corporate privilege waiver.

Even if the language in the proffer agreement encompassed Ferrer’s personal 

attorney-client privilege, the waiver was not irrevocable or permanent—it was simply a 

conditional agreement that, during Ferrer’s proffer sessions with the government, he would 

agree to discuss matters related to these firms if asked to do so. This topic, however, was

never broached during Ferrer’s proffer sessions. Accordingly, nothing has been waived.

Lacey asserts that the defense should not be “required to accept the government’s 

description of the scope of the waiver that has been effected,” CR 202 at 11, and he seeks 

“disclosure of any documents summarizing statements Mr. Ferrer made to the government 

or third parties...during proffer sessions with the government.” CR 202 at 10. This 

argument is unavailing. Lacey has already entered into a stipulated scheduling order 

providing that interview reports need not be produced by the government until February 

2019. See CR 131 at 2-3. (It should be noted that the government’s agreement to provide 

the interview reports by February 2019 was a significant concession—under Rule 16(a)(2) 

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and the Jencks Act, witness statements ordinarily aren’t discoverable until trial.) Requiring 

the premature disclosure of the reports from Ferrer’s interviews (which Ferrer has not yet 

reviewed or adopted) would not only violate this stipulation, but it would be unfairly 

prejudicial to the government. Among other things, the government is conducting further 

investigation and intends to seek a superseding indictment and/or a separate indictment of 

one or more other individuals relating to Backpage. In addition, state prosecutorial 

agencies in California and Texas are conducting ongoing investigations of various 

individuals relating to Backpage. 

Nevertheless, to the extent the Court determines that review of the Ferrer 302s may 

assist in resolving the instant motion, the government is willing to provide the non-finalized 

Ferrer 302s in its possession to the Court on an ex parte basis for in camera review. Such

review will show that Ferrer never discussed, during his interviews with the government, 

legal advice that he sought or received from DWT and HCM during the lawsuits in which 

they represented him in his personal capacity. In other words, the Court’s review will 

confirm that there has been no waiver of Ferrer’s personal attorney-client privilege.

Lacey also requeststhe sealed “Cooperation Addendum” to Ferrer’s plea agreement. 

CR 202 at 10. The government is taking steps to unseal this document for production to 

the defense.

Finally, to the extent not otherwise addressed above, Lacey’s document requests 

and the government’s responses are as follows:

1. All “FD-302 Forms” and other documents evidencing communications from 

Ferrer or his representatives to the government “concerning legal representation of 

Backpage and its related entities.” CR 202 at 12.

As noted, Lacey previously agreed that the 302s from Ferrer’s interviews need not 

be produced until February 2019. Moreover, Lacey’s current motion does not even attempt 

to explain why Ferrer’s communications with the government “concerning legal 

representation of Backpage” could have anything to do with the government’s 

disqualification motion. The government concedes Ferrer “has executed a broad waiver of 

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the corporate attorney-client privilege possessed by Backpage.com, LLC and various other 

Backpage-related entities.” CR 192-5 at 2. The instant motion, however, concerns whether 

Ferrer waived his personal attorney-client privilege, and does not provide a Rule 16 basis 

for this request. Cf. United States v. Mandel, 914 F.2d 1215, 1219 (9th Cir. 1990)

(describing Rule 16 requirements; “neither a general description...nor conclusory 

allegations” suffice). 

2. “All documents including engagement letters, common interest or joint 

defense agreements or related communications among counsel, parties or others related to 

joint representation or defense of Backpage and its related entities that Mr. Ferrer, his 

counsel, or any other representative of Mr. Ferrer provided to, disclosed or referenced in 

communications with the government.” CR 202 at 12.

The government never received any engagement letters, common interest or joint 

defense agreements. CR 202-2 at 2 (the government “has not received a copy of the actual 

JDA or any other common interest agreement”). The government has produced its 

Proffer/Interview Agreement with Ferrer, which states Ferrer “shall not” discuss JDAprotected material. CR 202-2 at 2; CR 202-3 at 1, ¶ 2. The instant motion does not 

articulate, under Rule 16 or any other rule of criminal discovery, why the requested 

documents are relevant and discoverable. 

3. “All notes or reports or transcripts of Mr. Ferrer’s discussions with any third 

party, including all government agents.” CR 202 at 12.

For the reasons discussed above, Lacey is not entitled to the draft 302s from Ferrer’s 

interviews with the government. Moreover, the government is not required to disclose 

rough “notes”; nor is it required to produce materials subject to its own attorney-client 

privilege or work product protections. See, e.g., 18 U.S.C. § 3500; Fed. R. Crim. P. 

16(a)(2) and 26.2(f); United States v. Griffin, 659 F.2d 932, 937 (9th Cir. 1981) (Jencks 

Act applies to formal written narratives or reports that contain “a complete recital” of facts, 

rather than fragmentary notes); United States v. Bobadilla-Lopez, 954 F.2d 519, 522 (9th 

Cir. 1992) (same); United States v. Spencer, 618 F.2d 605, 606 (9th Cir. 1980) (notes that 

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are “not complete” are not covered by Jencks Act). Finally, the government does not 

possess “transcripts” of Ferrer’s discussions with third parties, apart from deposition 

transcripts in civil cases equally available to the defense.

4. “All documents evidencing communications with the government about 

letters or other communications sent to counsel, courts or any other parties about 

representation or putative conflicts of counsel, including all correspondence Mr. Ferrer, his 

counsel, or any other representative of Mr. Ferrer has sent the government any exchanges 

of drafts or other communications about such correspondence.” CR 202 at 12-13.

Lacey has not even attempted to explain why these materials could have any 

relevance to the disqualification and privilege-waiver issues pending before the Court.

5. “All documents evidencing the date when Mr. Ferrer, his counsel, or any 

representative of [his] first had communications with the government related to a possible 

cooperation or with the intention of exploring possible cooperation.” CR 202 at 13. 

Again, Lacey does not explain how this information is material to whether Ferrer 

waived his personal attorney-client privilege. Production is not required by Rule 16. 

III. THE REQUESTED DOCUMENTS ARE NOT “RELEVANT AND 

MATERIAL” TO THE MOTION TO RESOLVE PRIVILEGE ISSUES.

Without authority or other explanation, Lacey also asserts the requested documents 

are “relevant and material” to resolution of the United States’ Motion to Resolve AttorneyClient Privilege Issues (CR 195). CR 202 at 6. That motion asks the Court to confirm that 

Backpage’s corporate attorney-client privilege has been waived for three independent 

reasons, including Ferrer’s execution of a written waiver of the corporate attorney-client 

privilege possessed by Backpage and related entities. CR 195 at 2. 

Lacey contends in the instant motion that “Ferrer lacked the authority to unilaterally 

waive privilege on behalf of Backpage....” CR 202 at 8 n.4. However, he does not explain 

how Ferrer’s communications with the government – which, essentially, is what he seeks

in this motion – are relevant to determining Ferrer’s authority to waive Backpage’s 

corporate attorney-client privilege. Lacey presumably already has access to the documents 

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he intends to rely upon in challenging Ferrer’s authority as Backpage’s Chief Executive 

Officer and 100% owner to waive the corporate attorney-client privilege, including 

documents concerning Lacey and Larkin’s sale of Backpage to entities owned by Ferrer in 

2015. Simply put, Ferrer’s communications with the government are irrelevant and 

immaterial to determining whether Ferrer was authorized as Backpage’s CEO to waive 

Backpage’s corporate attorney-client privilege. 

Conclusion

For the foregoing reasons, Lacey’s Motion for Disclosure of Documents Related to 

Carl Ferrer’s Waiver of Privilege Material to Disqualification should be denied.

Respectfully submitted this 12th day of July, 2018.

ELIZABETH A. STRANGE

First Assistant United States Attorney

District of Arizona

/s Peter S. Kozinets

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

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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/Melody Karmgard

U.S. Attorney’s Office

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