Court Opinion

ID: 2811266
Source: CourtListenerOpinion
Date Created: 2015-06-24 18:03:17.063289+00
Date Added: 2024-06-11T11:30:20.394599
License: Public Domain

Filed 6/24/15
                            CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            SECOND APPELLATE DISTRICT

                                    DIVISION EIGHT

JESUS CASTANEDA,                                 B259950

        Petitioner,                              (Los Angeles County
                                                 Super. Ct. No. BC500970)
        v.

THE SUPERIOR COURT OF LOS
ANGELES COUNTY,

        Respondent;

PERRIN BERNARD SUPOWITZ, INC.,

        Real Party in Interest.

        ORIGINAL PROCEEDING. Petition for writ of mandate. Rolf M. Treu, Judge.
Petition granted and remanded.
        Livingston Bakhtiar, Ebby S. Bakhtiar; Shegerian & Associates, Carney Shegerian
for Petitioner.
        No appearance for Respondent.
        Ballard Rosenberg Golper & Savitt, Linda Miller Savitt, Christine T. Hoeffner and
Philip Reznik for Real Party in Interest.

                                  ___________________
                                     INTRODUCTION
       In Cho v. Superior Court (1995) 39 Cal. App. 4th 113 (Cho), the Court of Appeal
held that when a judicial officer receives confidential information from a party while
presiding over a settlement conference, and the judicial officer subsequently joins a law
firm, that law firm may not represent an opposing party in the same action, regardless
whether the law firm establishes screening procedures to prevent the former judicial
officer from having any involvement with the case. As the court explained: “No amount
of assurances or screening procedures, no ‘cone of silence,’ could ever convince the
opposing party that the confidences would not be used to its disadvantage. When a
litigant has bared its soul in confidential settlement conferences with a judicial officer,
that litigant could not help but be horrified to find that the judicial officer has resigned to
join the opposing law firm – which is now pressing or defending the lawsuit against that
litigant. No one could have confidence in the integrity of a legal process in which this is
permitted to occur without the parties’ consent.” (Id. at p. 125, fn. omitted.)
       In this case, we hold the same standard applies when an attorney serves as a
settlement officer in a mandatory settlement conference conducted by a judge and two
volunteer attorneys. If the attorney receives confidential information from one of the
parties to the action, that attorney’s law firm may not subsequently agree to represent an
opposing party in the same action, regardless of the efficacy of the screening procedures
established by the law firm.
       In this writ proceeding, the plaintiff challenges an order denying its motion to
disqualify a law firm that substituted in to represent the defendant approximately six
months after one of the law firm’s attorneys served as a settlement officer in the case.
The trial court ruled the law firm could represent the defendant because, even assuming
the attorney received confidential information during the settlement conference – an issue
the trial court did not resolve – the law firm had established adequate screening
procedures to ensure the attorney did not discuss the case with anyone at the firm. We
hold this was error. Because the trial court did not resolve the disputed factual question
whether the attorney received confidential information while serving as a settlement

                                               2
officer, we grant the petition and remand for further proceedings so the trial court can
determine whether the attorney was privy to any confidential information.

                 FACTUAL AND PROCEDURAL BACKGROUND

       In February 2013, petitioner Jesus Castaneda filed this action for wrongful
termination, violation of the Fair Employment and Housing Act (Gov. Code, § 12900 et
seq.) and related claims against his former employer, real party in interest Perrin Bernard
Supowitz, Inc. (the employer).
       In December 2013, and pursuant to rule 3.1380 of the California Rules of Court,
the trial court ordered the parties to participate in the Los Angeles County Superior
Court’s CRASH settlement conference program for employment cases.1 CRASH –
which stands for Civil Referee Assisted Settlement Hearing – is a mandatory settlement
conference program. Although the record contains no official documentation describing
the mechanics of the CRASH program, the parties agree that three persons conduct a
CRASH settlement conference – a judicial officer and two volunteer attorneys.2
       The settlement conference took place at the end of January 2014. One of the two
attorney panelists was Elsa Bañuelos, then senior counsel with the law firm of Ballard
Rosenberg Golper & Savitt (the Ballard law firm).
       The case did not settle. In late July 2014 – a little less than six months after the
settlement conference – Ballard law firm partner Linda Miller Savitt substituted in to

1      All rule references are to the California Rules of Court.

2       The parties characterize the respective roles of these three persons differently.
Castaneda asserts these three persons “preside” over the settlement conference, while the
employer maintains the judicial officer presides over the settlement conference and is
“assisted” by the two volunteer attorneys. This difference of characterization is in our
view mainly semantic. In any event, it is not relevant to the issue before this court. As
discussed below, the key question is whether the volunteer attorney received confidential
information in connection with the court ordered and administered settlement conference,
regardless whether one views the attorney as “presiding” over the conference or merely
“assisting” the judicial officer.

                                              3
represent the employer in the action. According to Savitt, she was unaware that Bañuelos
had served as a settlement officer in the case.
       About three weeks after the substitution of counsel was served, counsel for
Castaneda, Ebby Bakhtiar, emailed Savitt, informed her of Bañuelos’s involvement in the
settlement conference, and inquired whether she and the Ballard law firm intended to
withdraw as counsel for the employer. Savitt responded by email, noting that she “knew
nothing about the case from [Bañuelos] and [Bañuelos] is not on the file and will not be
doing any work on it. . . . We only have files from the client or from prior counsel.”
Savitt stated she did not intend to disqualify herself. Castaneda filed a motion to
disqualify the Ballard law firm the following day.
       According to the disqualification motion, during the settlement conference,
“[Settlement Officer] Bañuelos received ex-parte confidences concerning the merits of
Plaintiff’s case, his trial strategy, legal analysis and other highly confidential appraisal
and evaluations, which his attorney would not have divulged had it not been for the
confidential setting of the conference.” The motion was supported by declarations from
two of Castaneda’s attorneys. Ebby Bakhtiar stated in his declaration that he participated
in the settlement conference telephonically. He claimed: “During the conference, I was
called by the Judge in charge of the matter and placed on speaker phone. At that time, I
was informed that the defense was not present and [was] asked questions about the case.
Accordingly, I answered the questions and in so doing, I openly discussed Plaintiff’s trial
strategy, legal analysis, bottom-line settlement figures and revealed [rather] highly
confidential evaluations I had made. When I engaged in the above discussions with the
CRASH panel, I spoke candidly about the strengths and weaknesses of Plaintiff’s case,
divulging important information in confidence. I would not have disclosed any such
information had it not been for the confidential nature of the conference.” Bakhtiar did
not specify who was present at the conference or who informed him the defense was not
present when he allegedly disclosed confidences during the telephone conference.
       The second attorney declaration in support of the disqualification motion was from
David Harris who, in contrast to Bakhtiar, was physically present at the conference.

                                               4
Harris stated in his declaration: “During the conference, I was introduced to the
panelists, one of whom was Elsa Bañuelos. The conference lasted several hours, during
which I answered questions about the case directed to me by the panelists, including
Bañuelos, while outside of the presence of defense counsel. In so doing, I freely
discussed Plaintiff’s trial strategy, legal analysis and revealed other highly confidential
evaluations [that] I, Mr. Bakhtiar and Mr. Shegerian [another of Castaneda’s attorneys]
had made. When I engaged in the above discussions with the CRASH panel, including
Bañuelos, I spoke candidly about the strengths and weaknesses of Plaintiff’s case,
divulging important information in confidence. I would not have disclosed any such
information had it not been for the confidential nature of the conference.”
       Harris also maintained that defense counsel were not present when the settlement
panel conducted the telephone conference with Bakhtiar and that, during this conference,
“Mr. Bakhtiar responded to the Judge’s and panelists’ questions about the case, providing
his thoughts, his impressions, his evaluations and also discussed settlement figures, etc.”
       The employer opposed the motion. It argued that “no confidential information
was conveyed to Ms. Bañuelos at the . . . settlement conference.” The employer offered
several declarations in support of this assertion. One was from Bañuelos, who stated that
while she did “not recall details of the case,” she remembered that the judge presiding
over the conference was upset that Bakhtiar was not physically present. According to
Bañuelos, the entire telephone conference with Bakhtiar took place in the presence of
defense counsel and other employer representatives, and the judge specifically pointed
this out to Bakhtiar. Bañuelos also maintained that, at no point during the conference did
Bakhtiar or his associate who was physically present “disclose any weaknesses in
Plaintiff’s case or any other confidential information regarding the case; nor did they
reveal any ‘fall back’ or ‘bottom line’ settlement position.” Bañuelos acknowledged that
after the discussion in the presence of the defense, the judge “took the call off of the
speakerphone and left the room to speak separately with Mr. Bakhtiar, but I did not hear
any of their conversation.” Bañuelos did not expressly say whether the judge told her
what he had discussed with Bakhtiar during their private telephone conversation.

                                              5
       The employer also offered the declaration of Howard Knee, its former counsel
who represented it at the settlement conference. Knee also maintained that the judge
advised Bakhtiar that defense counsel and other employer representatives were present
and that, during the conference, he (Knee) responded at times to Bakhtiar’s statements.
In another declaration, the employer’s Senior Human Resources Manager also stated that
she, defense counsel, and other employer representatives were present during the
telephone conference with Bakhtiar, and that the judge who presided over the conference
alerted Bakhtiar to the presence of these persons.
       The employer further argued that the Ballard law firm should not be vicariously
disqualified from the representation because it had established an “ethical wall” barring
Bañuelos from any involvement in the representation. It offered declarations from
attorneys Savitt and Bañuelos, as well as from an associate working on the case with
Savitt, reflecting that, after learning of Bañuelos’s role as a settlement officer in the case,
Savitt issued a memorandum to all attorneys in the firm admonishing them not to discuss
the case or share any documents about the case with Bañuelos. In addition, Bañuelos
declared that she had “not discussed any information received from plaintiff’s counsel
during the January 2014 CRASH settlement conference” with any Ballard law firm
attorney, “except as necessary to respond” to the disqualification motion.
       At the conclusion of a hearing in October 2014, the trial court issued an order in
which it “conditionally granted” the disqualification motion. The order stated the court
“presumes that Ms. Bañuelos has received confidential information as one of the
panelists for the settlement conference and that Ms. Bañuelos’s knowledge has been
imputed to all members of [the Ballard law firm].” However, the court agreed to
continue the matter to permit the employer to offer evidence in an attempt to rebut the
presumption that the information conveyed to Bañuelos was conveyed to the law firm.
       The employer filed a supplemental brief and offered additional declarations from
Savitt and Bañuelos, as well as from the Ballard law firm associate working on the case
and the employer’s former counsel, but the additional declarations contained nothing new
regarding events at the settlement conference or the law firm’s efforts to ensure that

                                               6
Bañuelos did not communicate about the case with anyone at the firm. Instead, the
employer provided a declaration from the second volunteer attorney who had presided
over the settlement conference and who stated that he did “not recall counsel for either
party disclosing any confidential information” at the conference.
       Before conducting a new hearing on the disqualification motion, the trial court
issued a tentative decision denying the motion. The court emphasized that it was not
resolving the parties’ dispute whether Bañuelos had received confidential information
during the settlement conference. Rather, it would presume Bañuelos had received such
confidential information. Even with that presumption, however, the court intended to
deny the disqualification motion on the basis that vicarious disqualification of the law
firm was not required because of the screening put in place to prevent Bañuelos from
disclosing any confidences to other persons at the firm.
       After hearing argument from the parties, the court ruled the “tentative will stand.”
The court agreed to stay further proceedings for a limited time to afford Castaneda time
to seek writ relief and a stay from this court.
       A week later, Castaneda filed this writ petition challenging the trial court’s ruling
and seeking a stay of all trial court proceedings pending a final ruling on the petition. We
issued a temporary stay and, after receiving preliminary briefing, we issued an alternative
writ. We then received additional briefing and heard oral argument.

                                       DISCUSSION

1.     Propriety of Writ Review

       Although an order granting or denying a motion to disqualify counsel is
immediately appealable (Orange County Water Dist. v. The Arnold Engineering Co.
(2011) 196 Cal. App. 4th 1110, 1116, fn. 2), we elected to consider the matter in the
context of this writ proceeding to expedite resolution of the uncertainty regarding
counsel’s status. (See Reed v. Superior Court (2001) 92 Cal. App. 4th 448, 455; State
Water Resources Control Bd. v. Superior Court (2002) 97 Cal. App. 4th 907, 913-914.)

                                                  7
2.     Standard of Review

       “Generally, a trial court’s decision on a disqualification motion is reviewed for
abuse of discretion. [Citations.] If the trial court resolved disputed factual issues, the
reviewing court should not substitute its judgment for the trial court’s express or implied
findings supported by substantial evidence. [Citations.] When substantial evidence
supports the trial court’s factual findings, the appellate court reviews the conclusions
based on those findings for abuse of discretion. [Citation.] However, the trial court’s
discretion is limited by the applicable legal principles. [Citation.] Thus, where there are
no material disputed factual issues, the appellate court reviews the trial court’s
determination as a question of law. [Citation.]” (People ex rel. Dept. of Corporations v.
SpeeDee Oil Change Systems, Inc. (1999) 20 Cal. 4th 1135, 1143-1144 (SpeeDee Oil).)
       In this case, it is only necessary for us to determine if the trial court applied the
correct legal standard. This presents a pure question of law subject to de novo review.
(Orange County Water Dist. v. The Arnold Engineering Co., supra, 196 Cal.App.4th at
p. 1116.)

3.     Vicarious Disqualification

       When an attorney (either one who has participated in a judicial role or one who
has not) is disqualified from a representation, the question arises as to whether that
attorney’s law firm is vicariously disqualified. In other words, when an attorney has a
conflict of interest that prohibits the attorney from accepting a representation, is the
conflict imputed to the rest of the attorney’s firm? The answer, generally, is “yes.”
(SpeeDee Oil, supra, 20 Cal.4th at p. 1139.) “This rule safeguards clients’ legitimate
expectations that their attorneys will protect client confidences.” (Ibid.) We therefore
presume that attorneys in the same firm share access to privileged and confidential
matters. (Id. at p. 1153.) The critical question in any case is whether that presumption is
conclusive, or if it can be rebutted by the law firm’s implementation of screening

                                               8
procedures to prevent shared access to the confidential information. This question is not
always easily answered.

       A.     The Cho Decision

       In Cho, supra, 39 Cal. App. 4th 113, the court considered a situation in which it
ultimately concluded the presumption was conclusive. In that case, a judge presided over
a case and conducted three settlement conferences, which did not result in a settlement.
According to plaintiff’s counsel, he disclosed confidential information to the judge during
the settlement conferences. (Id. at p. 117.) Although the judge did not believe he learned
anything confidential from plaintiff’s counsel, he could not say for sure. (Id. at p. 118.)
       While the case was still pending, the judge retired. Shortly thereafter, the law firm
of Graham & James substituted in to represent the defendant in that case. At the time, the
now retired judge was scheduled to join Graham & James in an “of counsel” capacity.
When one of the firm’s partners reviewed the court docket for the case, he discovered the
judge had presided over the case. Before the judge began working for the firm, the firm
decided to impose a “cone of silence” to ensure the judge would not be involved in the
case in any way. A few weeks after the judge began working for the firm, counsel for the
plaintiff learned the judge had joined the firm. Plaintiff then moved to disqualify the
firm. (Cho, supra, 39 Cal.App.4th at pp. 116-117.)
       There was no dispute that the retired judge himself could not be involved in the
defense of the case. (Cho, supra, 39 Cal.App.4th at p. 119.) The issue was whether the
entire firm was vicariously disqualified. The trial court denied the disqualification
motion, concluding that vicarious disqualification was not mandatory, and that the firm
had implemented sufficient screening procedures. (Id. at p. 118.)
       After the trial court denied the disqualification motion, the Court of Appeal
granted writ relief. The trial court had made no express finding on the disputed issue of
whether the judge had actually received confidences from plaintiff during the settlement
conference (Cho, supra, 39 Cal.App.4th at p. 119); the Court of Appeal proceeded on the
assumption that the judge had been privy to such confidences (id. at p. 121). The

                                              9
appellate court summarized the issue and its holding as follows: “The issue in this case is
whether a law firm must be disqualified as counsel in a lawsuit after employing the
retired judge who had presided over the action and had received ex parte confidences
from the opposing party in the course of settlement conferences. We conclude that
screening procedures are not sufficient to preserve public trust in the justice system in
these circumstances and therefore the firm must be disqualified.” (Id. at p. 116, italics
added.) As the italicized language reflects, the adequacy of the screening procedures was
not the issue. The issue was one of public trust in the justice system.
       Indeed, the court emphasized the importance of preserving not only the integrity
of the judicial process, but also the public’s confidence in that process. The court
explained: “No amount of assurances or screening procedures, no ‘cone of silence,’
could ever convince the opposing party that the confidences would not be used to its
disadvantage. When a litigant has bared its soul in confidential settlement conferences
with a judicial officer, that litigant could not help but be horrified to find that the judicial
officer has resigned to join the opposing law firm – which is now pressing or defending
the lawsuit against that litigant. No one could have confidence in the integrity of a legal
process in which this is permitted to occur without the parties’ consent.” (Cho, supra,
39 Cal.App.4th at p. 125, fn. omitted; see also id. at p. 126 [referring to the need “to
ensure public trust in the judicial system”].)
       The Court of Appeal emphasized that the key to its decision was the fact that
confidences were disclosed to the judicial officer. The fact the judge had presided over
the case did not, in and of itself, warrant disqualification of the law firm. (See Cho,
supra, 39 Cal.App.4th at pp. 119-121.) What mattered was that the judicial officer had
presided over settlement conferences that included ex parte communications, which
justified a presumption of the revelation of confidences. (Id. at p. 125.)
       The Supreme Court denied review in Cho, and no California court has questioned
its holding. The employer argues that Cho is factually and legally distinguishable.

                                               10
       B.     Cho is Not Factually Distinguishable

       The employer argues that Cho is distinguishable on the basis that Bañuelos is “a
lawyer (not a judge) [who] volunteer[ed] for only three hours in a CRASH settlement
conference, shared no information about the conference with her law firm, and violated
no rules of ethics.”3 Similarly, the employer asserts that “[m]issing from this case are
any facts reflecting the significant power, control, and exposure to ex parte
communications wielded by the judge in Cho, including his control over the entire action
and multiple settlement conferences while he was the assigned judge.”
       Preliminarily, we observe that the fact the settlement judge in Cho also presided
over the adjudicative aspects of the case was irrelevant to that court’s decision. Indeed,
as discussed above, the court in Cho confirmed that the rule of automatic vicarious
disqualification would not apply if the case involved a judge who had served only as an
adjudicator and therefore had not received confidences. (Cho, supra, 39 Cal.App.4th at
p. 125.)
       That there was only one settlement conference session in this case as opposed to
three sessions in Cho, or that Bañuelos volunteered for only three hours, are also
irrelevant distinctions. The issue is qualitative, not quantitative – did Bañuelos serve as a
settlement officer where confidences were disclosed in ex parte communications?
       Ultimately, the employer’s effort to distinguish this case factually boils down to a
contention that Cho should not apply because Bañuelos is an attorney and not a judicial
officer. In our opinion, this difference does not warrant a different result. It is difficult to
characterize the precise legal capacity in which Bañuelos participated in the CRASH
conference. Prior to her involvement with CRASH, Bañuelos received a memorandum
from the court setting forth guidelines for CRASH volunteers. The guidelines stated that

3       There is nothing to suggest that the judge in Cho violated any ethical rules or did
anything improper, or that he shared confidences with the law firm he joined. On the
contrary, the Court of Appeal in Cho noted: “We emphasize that there is no basis for
criticism of Judge Younger, and we imply none.” (Cho, supra, 39 Cal.App.4th at p. 125,
fn. 4.)

                                              11
CRASH volunteers were not temporary judges. The memorandum further stated that, as
the settlement conference was ordered under rule 3.1380, it was not a mediation to which
the formal mediation privilege of the Evidence Code (Evid. Code, § 1119) applied. The
guidelines did not, however, identify the legal capacity in which CRASH volunteers
would, in fact, be serving. It is possible that Bañuelos served as a referee.4
       The California Code of Judicial Ethics has two canons that apply to lawyers acting
as referees. Canon 6D(11) provides that “[a] lawyer who has been a temporary judge,
referee, or court-appointed arbitrator in a matter shall not accept any representation
relating to the matter without the informed written consent of all parties.” Canon 6D(12)
provides, “[w]hen by reason of serving as a temporary judge, referee, or court-appointed
arbitrator in a matter, he or she has received confidential information from a party, the
person shall not, without the informed written consent of the party, accept employment in
another matter in which the confidential information is material.” It is significant that
both canons exist. The first prohibits the lawyer/referee from accepting any
representation in the same matter without written consent regardless of whether any
confidential information was conveyed; the second prohibits the lawyer/referee from
accepting even related representation without written consent when confidential
information has been disclosed. Together, these canons protect both interests implicated
in Cho – the interest in judicial integrity and the interest in preserving client confidences
– and applies those protections when the judicial officer was an attorney acting in a
quasi-judicial capacity. In other words, these canons confirm that there is no line of
demarcation to be drawn between judicial officers and attorneys who may assist them in

4
        We note that “CRASH” stands for Civil Referee Assisted Settlement Hearing.
(Italics added.) The judicial officer who presided over the hearing was not a referee, but
a regularly assigned judge; if any referees were involved, they must have been the two
volunteer attorneys assisting the process.

                                              12
settlement conferences. What matters is the judicial role being played, and the policy
interests implicated.5
       Together with a judge and another attorney, Bañuelos presided over a mandatory
settlement conference that was conducted under the auspices of the court. The Court of
Appeal in Cho was correctly concerned with the need to preserve the public’s trust and
confidence in the judicial process. The concerns expressed in Cho regarding the need “to
preserve public trust in the justice system” and “confidence in the integrity of a legal
process” are the same, regardless whether Bañuelos was a judge, commissioner, judge
pro tem, referee, or volunteer attorney, as long as she was presiding in a court sponsored
settlement program and was privy to ex parte communications.
       In this case, as in Cho, the issue is not merely whether confidences will in fact be
preserved. If it were, screening might be sufficient. But the issue is also whether
participants in the judicial process have confidence in that process.
       In at least one respect, the facts of this case present a more compelling case for
vicarious disqualification of the law firm than the facts in Cho. In Cho, the judge who
presided over the settlement conference joined the law firm after it had begun its
representation of a party to the action, albeit only a short time thereafter. (See Cho,
supra, 139 Cal.App.4th at p. 117.) Even though it is understandable a judge may leave
the bench and join a firm that is already representing a party to an action in which the
judge may have presided, the court in Cho noted that the opposing party “could not help
but be horrified to find that the judicial officer has resigned to join the opposing law
firm . . . .” (Id. at p. 125.) Here, Bañuelos did not join a firm that was already
representing the employer. Rather, she was already employed by the law firm when the
settlement conference took place. Under this scenario, we easily imagine the horror a
litigant would feel when her firm substituted in to represent the opposing party.

5       We do not mean to imply that Bañuelos was necessarily acting as a referee when
she served as a CRASH volunteer or that these particular canons of judicial ethics
necessarily govern her conduct. We simply conclude that the judge/attorney distinction
is blurred when the attorney is acting as a neutral in a court-ordered settlement program.

                                             13
       Nothing we have said should be construed as questioning the integrity of Bañuelos
or the Ballard law firm and its attorneys. There is nothing in the record to suggest that
Bañuelos or the firm or other attorneys did anything improper. But when it comes to
public confidence in the judicial system, we are concerned not only with preventing
improper conduct, but also with perceptions. “ ‘[It] is not merely of some importance but
is of fundamental importance that justice should not only be done, but should manifestly
and undoubtedly be seen to be done.’ ” (Lois R. v. Superior Court (1971) 19 Cal. App. 3d
895, 902, quoting Hewart, Lord, Rex v. Sussex Justices (1924) 1 K.B. 256, 259, original
brackets, italics added; see also People v. Pride (1992) 3 Cal. 4th 195, 272 [“ ‘justice must
satisfy the appearance of justice’ ” (quoting Offutt v. United States (1954) 348 U.S. 11,
14)]; Cal. Code of Jud. Ethics, canon 2 [“A judge should avoid impropriety and the
appearance of impropriety in all the judge’s activities.”].)
       In our view, any factual differences between Cho and this case are insufficient to
warrant a different result.

       C.     Cho is Not Legally Distinguishable

       The employer next argues that Cho is distinguishable in that it presents an
outdated view of the law of vicarious attorney disqualification. To properly address
employer’s argument, it is necessary to discuss the timing of the Cho opinion in the
context of the development of the law of vicarious disqualification in California. Cho
was resolved temporally between two Supreme Court cases, which, in dicta, mentioned
the issue of vicarious disqualification. In 1994, one year before Cho, the Supreme Court
suggested that automatic vicarious disqualification was, in fact, the governing rule in all
cases in California. (Flatt v. Superior Court (1994) 9 Cal. 4th 275, 283 (Flatt).) Five
years later, the Supreme Court, again in dicta, made it clear that whether vicarious
disqualification was mandatory in all cases was, in fact, an issue it had not yet decided.
(SpeeDee Oil, supra, 20 Cal.4th at p. 151.) Although Cho was resolved in the interim,
Cho did not cite the Flatt dicta and assume that vicarious disqualification was mandatory;
instead, Cho treated the issue of vicarious disqualification in the circumstances raised as a

                                             14
question of first impression (Cho, supra, 39 Cal.App.4th at p. 119), which it resolved by
considering the relevant ethical policy concerns we have described. (Id. at pp. 122-125.)
       More than 10 years after SpeeDee Oil, the Supreme Court had still not spoken
conclusively on whether vicarious disqualification was mandatory in all cases, or if, to
the contrary, there was only a rebuttable presumption that could be overcome by proper
ethical screening. The appellate courts had not been consistent. (See Kirk v. First
American Title Insurance Co. (2010) 183 Cal. App. 4th 776, 799-800 (Kirk).) Division
Three of this District attempted to bring clarity to the issue, by concluding that the proper
approach was not to speculate on what the Supreme Court might decide but instead to
apply the state of the law as it existed without regard to the Flatt and SpeeDee Oil dicta.
(Kirk, at p. 800.) That law could be described as a two-part rule: First, a case-by-case
analysis on whether ethical screening would be permissible based on the circumstances
present in the case and the policy interests implicated; and second, an exception
providing that vicarious disqualification is mandatory in cases of a tainted attorney
possessing actual confidential information from a representation, who switches sides in
the same case.6 (Ibid.)
       In this case, the employer overlooks the second part of the rule discussed in Kirk,
and argues, based on only the first part, that law firms are never automatically vicariously
disqualified and that, instead, the presumption is rebuttable in all cases. We disagree; the
second part of the rule is necessary because no ethical wall could overcome the
imputation of shared knowledge when an attorney who formerly represented – and
therefore possessed confidential information regarding – a party switched sides in the
same case. (Henriksen v. Great American Savings & Loan (1992) 11 Cal. App. 4th 109,
115, 117 (Henriksen).) As discussed, the rule of Cho is necessary for the same reasons.
       The employer also argues that the facts of Kirk – in which the Court of Appeal
ultimately allowed for rebuttal of the presumption by a sufficient ethical wall – are much

6      Of course, Cho was also part of the law of vicarious disqualification that
developed separately from the Flatt and SpeeDee Oil dicta. Nothing in Kirk – which did
not discuss Cho – silently rejects Cho.

                                             15
more egregious than the circumstances raised by Bañuelos’s presumed receipt of
confidential information in this case. We disagree. Kirk involved the defense of an
insurance company in four related class actions. The insurance company was represented
by a small team of attorneys who had represented it in 80 class actions, and had an
extraordinary amount of knowledge related to the insurance company and its defense of
litigation. (Kirk, supra, 183 Cal.App.4th at p. 785.) The defense team had already
incurred over $5 million in attorney’s fees defending the four class actions at issue when
the disqualification motion arose. (Id. at p. 786.) The disqualification motion was
brought because, one year earlier, plaintiffs’ counsel had a 17-minute telephone
conversation with an outside attorney plaintiffs’ counsel unsuccessfully hoped to retain as
a consultant in the class actions. During this conversation, some confidential information
was disclosed to the potential consultant. (Ibid.) Later, the potential consultant moved to
the San Francisco office of a national law firm. The next month, the insurance
company’s existing defense team moved from their old firm to the same national law
firm, although in the Los Angeles and St. Louis offices. (Id. at p. 787.) Essentially,
plaintiffs sought to disqualify the insurance company’s long-held and valued defense
team on the basis that the team had joined a different office of the same firm as an
attorney to whom plaintiffs had voluntarily disclosed confidential information in a 17-
minute telephone call a year earlier.
       The present case, in contrast, involves an attorney participating in a mandatory
settlement conference in which she may have been privy to confidential information
about a plaintiff’s case, whose firm then took on the defense of the same action. There is
no long-term relationship between the employer and the Ballard law firm and no
coincidental movement of both Bañuelos and the employer’s long-term counsel to
different offices of the same law firm. Most importantly, the context in which
Castaneda’s counsel would have disclosed confidential information to Bañuelos was a
court-ordered settlement conference in which participation was mandatory, not a
voluntary phone call from Castaneda’s counsel seeking to employ Bañuelos.

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       The employer also relies on In re County of Los Angeles (9th Cir. 2000) 223 F.3d
990, which predated Kirk. Specifically, the Ninth Circuit considered the California
Supreme Court’s dicta in SpeeDee Oil as signaling that the court “may well adopt a more
flexible approach to vicarious disqualification.” Therefore the court allowed ethical
screening in the case before it. (County of Los Angeles, at p. 995.) The case involved a
former judicial officer whose firm sought to represent a plaintiff even though the judicial
officer had possessed confidential information from settlement negotiations in a different,
but similar case involving the same defendants. (Id. at pp. 995-997.) We conclude
County of Los Angeles is not persuasive as applied to this case for several reasons. First,
we find it unnecessary to speculate about future Supreme Court holdings on vicarious
disqualification. Second, the Ninth Circuit lacked the benefit of Kirk’s development of
the law. Third, we agree with the Ninth Circuit that County of Los Angeles and Cho are
distinguishable. In County of Los Angeles, the court held that an ethical wall was
reasonable because the information the judicial officer had received came in a different –
although related – case from the one in which his new firm became attorney of record.
Our case, like Cho, involves the Ballard firm representing a client in the same case in
which Bañuelos served as a settlement officer.7
       In sum, Kirk did not undermine Cho, and the circumstances of this case are much
more in line with Cho than Kirk.

       D.     The Employer’s Other Arguments Are Unpersuasive

       The employer raises several other arguments in order to avoid the application of
Cho to this case and to the rule of vicarious disqualification. We are not persuaded.
First, the employer points out the parties were engaged in a settlement conference, not
mediation. It then argues the Rules of Court (specifically rule 3.1380, governing

7       Because the present case involves representation in the same, not related,
litigation, we have no occasion to announce a rule under California law as to whether an
ethical wall is appropriate in litigation that is only related.

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mandatory settlement conferences) and Evidence Code (specifically section 1117,
governing mediation confidentiality) draw a distinction between settlement conferences
and mediations, such that settlement conferences are not subject to the mediation
confidentiality provisions. This may be so. But we are not concerned with the laws of
mediation confidentiality as set forth in the Evidence Code, but the law of attorney
disqualification based on confidential communications, wherever they may occur.8
       Second, the employer suggests that, since settlement conferences are to be
distinguished from mediation, participants in CRASH settlement conferences can have no
expectation of confidentiality, even with respect to ex parte communications. We
disagree. An expectation of confidentiality can arise whenever a communication is made
with promises that it will, in fact, be kept in confidence. Indeed, the employer conceded
that CRASH settlement officers had been provided with a memo which stated, “You
should assume that all caucus sessions were in confidence . . . .”
       Third, the employer argued before the trial court that a rule of automatic vicarious
disqualification will chill attorneys from donating their time to assist with valuable court
programs such as CRASH. Although the argument was not expressly repeated on appeal,
we believe that regardless of that chilling effect, it is necessary to prohibit law firms from
handling litigation where a member of the firm has received the opponent’s confidential
information as a settlement officer in a court sponsored program. Parties should be
encouraged to disclose confidences in ex parte communications to assist the settlement
officers in reaching an equitable resolution of the case without fear that those confidences
could be used against them in that very case by law partners of any of the settlement
officers. Attorneys should be free to openly and honestly discuss the strengths and
weaknesses of their cases with the settlement officers without fear that settlement

8
        That the mediation-settlement conference distinction has no legal significance is
underscored by the Ballard law firm’s own uncertainty as to how to characterize the
CRASH hearing. Bañuelos’s declaration in opposition to the disqualification motion
stated that she was a “settlement officer” at “the mediation.” The Ballard law firm’s
internal memo establishing the ethical wall stated that Bañuelos had served “on a
mediation panel as part of the Superior Court’s CRASH settlement program.”

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officers’ firms may use confidential information against them. We think it highly
unlikely that our decision will discourage attorneys from volunteering their time for
CRASH; if anything, our result will preserve the value of CRASH. Without the
protections provided by mandatory vicarious disqualification for settlement officers who
are privy to confidential information, no party would disclose such confidential
information in settlement discussions, thus undermining the program’s likely success.

       E.      The Matter Must Be Remanded for the Trial Court to Determine if
               Bañuelos Was Privy to Confidential Information.

       The trial court expressly declined to resolve whether Bañuelos was privy to
confidential information because the court believed an ethical screening wall could avoid
vicarious disqualification. We have held otherwise. Accordingly, the matter must be
remanded to the trial court to make a factual finding whether confidential information
was provided to Bañuelos. We leave to the trial court’s discretion whether to make that
finding based on the existing evidentiary record or to request an additional showing by
the parties.
       Cho provides guidance on the factual determination the trial court must make. In
Cho, the retired judge conceded he had conducted ex parte settlement discussions with
each side separately. However, he stated he did not believe that he learned any
confidential information from the plaintiff. (Cho, supra, 39 Cal.App.4th at pp. 117-118.)
Plaintiff’s counsel disagreed, stating that confidences had, in fact, been disclosed. (Id. at
pp. 116-117.) The trial court did not make a finding on whether confidential information
had actually been disclosed during the ex parte discussions. (Id. at pp. 118-119.)
Although an available remedy would have been to remand for a determination of the
nature of any confidential communication the judicial officer had received, the Cho court
did not do that. Instead, the court stated, “Where a judicial officer has presided over
settlement conferences which included ex parte communication, we presume the
revelation of confidences relating to the merits of a litigant’s case.” (Id. at p. 125.) We
agree with Cho. Once it has been shown that ex parte communications have occurred

                                             19
with the settlement officer, it is then conclusively presumed that confidential information
has been exchanged.
       If on remand, the court finds that ex parte communications from Castaneda’s
counsel were conveyed to Bañuelos, the court shall conclusively presume confidences
were exchanged and disqualify the Ballard law firm. No further inquiry into the content
of the ex parte communications is necessary or appropriate.
       If the court finds that Bañuelos did not engage in ex parte communications with
Castaneda’s representatives (either directly or by communication with the other attorneys
or the judge who presided over the settlement conference), it shall reinstate its order
denying disqualification of the Ballard law firm.

                                      DISPOSITION

       The petition is granted. The respondent court is directed to (1) vacate its
October 30, 2014 order denying petitioner’s motion to disqualify the law firm of Ballard
Rosenberg Golper & Savitt; and (2) schedule a hearing to reconsider the motion and
make a factual finding on whether Bañuelos participated in ex parte communications with
Castaneda’s representatives. We express no opinion on the form of such hearing.
       Petitioner is entitled to recover his costs in this writ proceeding. (Cal. Rules of
Court, rule 8.493(1)(A).)

                                                    RUBIN, ACTING P. J.
WE CONCUR:

              FLIER, J.

              GRIMES, J.

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