Court Opinion

ID: 9810076
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:38:56.477766+00
Date Added: 2024-06-11T13:39:21.055170
License: Public Domain

JUSTICE MARQUEZ
delivered the Opinion of the Court.
T1 This original proceeding arises in a criminal case involving Colorado Organized Crime Control Act ("COCCA") and other felony charges against several defendants involved in the medical marijuana industry. Petitioners Conley Hoskins and Jane Medicals, LLC (collectively, "Petitioners") seek to vacate the trial court's order disqualifying the law firm of Peters Mair Wilcox ("PMW")1 as their counsel. The trial court disqualified PMW under Rule 1.9(a) of the Colorado Rules of Professional Conduct, finding that the firm previously represented another party, All Care Wellness Centers, LLC ("All Care"), in the same matter for which PMW now represents Petitioners and concluding that All Care and Petitioners have materially adverse interests. Petitioners sought review of the trial court's order under C.A.R. 21, contending that the trial court abused its discretion in disqualifying Petitioners' retained counsel of choice.
12 We issued a rule to show cause and now hold that, because the record before us is insufficient to support a finding that the interests of Petitioners and All Care are materially adverse in this criminal proceeding, the trial court abused its discretion by disqualifying Petitioners' retained counsel of choice under Colo. RPC 1.9(a). Accordingly, we make the rule absolute, reverse the trial court's order disqualifying Petitioners' counsel of choice, and remand this case to the trial court for further proceedings.
I. Facts and Procedural History
13 Petitioners, Conley Hoskins ("Hos-kins") and Jane Medicals, LLC ("Jane Medicals"), are defendants in a district court action in which they and several others are charged with COCCA violations and numerous other felonies.
T 4 Hoskins owns or partially owns several businesses, including All Care and Jane Medicals, both of which are medical marijuana businesses. Hoskins is the sole owner of Jane Medicals. Prior to August 2011, he was the sole owner of All Care. On August 10, 2011, Hoskins and Rafael Craveiro ("Cravei-ro") entered into a Membership Interest Purchase Agreement under which Craveiro acquired a 50 percent membership interest in All Care.
15 In July 2012, the Colorado Department of Revenue ("DOR") began to investigate whether certain businesses connected to Hoskins were in compliance with Colorado tax laws and regulations governing the *831medical marijuana industry. In September 2012, PMW notified DOR that it had been retained to represent Hoskins, Jane Medicals, All Care, and others involved in the DOR investigation. PMW arranged for employees of All Care and Jane Medicals to be interviewed by DOR officials PMW informed the employees that it represented the business entities and Hoskins, but not the employees personally. Following these interviews, a statewide grand jury returned an indictment on May 30, 2018, charging Hoskins, Jane Medicals, All Care, and other individuals and entities with violations of COCCA and numerous other felonies. PMW entered an appearance in the criminal case on behalf of Hoskins and Jane Medicals. PMW did not enter an appearance for Al Care, and All Care later retained other counsel.
T6 The indictment, which contains 71 counts, generally alleges that the defendants associated to form a criminal enterprise that engaged in racketeering and conspiracy activity, including tax evasion, theft, and illegal distribution of marijuana. Hoskins, Jane Medicals, and All Care are co-defendants in several of the counts in the indictment. All 15 counts in the indietment against All Care also name Hoskins.
T7 On August 2, 2018, the prosecution moved to disqualify PMW as Petitioners' counsel, alleging that PMW's prior representation of All Care during the DOR investigation was in actual conflict with its current representation of Petitioners. Specifically, the prosecution asserted that PMW learned confidential information about All Care's business dealings, financial data, and trade secrets during the DOR investigation. The prosecution argued that PMW might pursue a defense theory that All Care employees were responsible for any illicit activities and that, if PMW pursued this blame-shifting defense, All Care would be "disadvantaged by [PMW's] knowledge of sensitive and prejudicial information obtained during the prior representation." The prosecution pointed to a letter from PMW to the prosecution during the investigation stating that PMW "originally became involved on Mr. Hosking' behalf in response to tax and employment issues arising from the malfeasance of key managerial employees." Although this letter did not mention All Care or any of the numerous businesses owned by Hoskins, the prosecution argued that this sentence "possibly foreshadow[ed] [PMW's] intention to distance Hoskins from legal culpability and instead shift liability to the [All Care] employees." Finally, the prosecution stated that it intended to "call All Care to testify against Hoskins and Jane Medicals" and that PMW ethically would be unable to cross-examine its former client. However, the prosecution never identified who it would call to testify as "All Care" or the nature of such testimony.
1 8 Based on these assertions, the prosecution argued that PMW's prior representation of All Care ereated a conflict in violation of Colo. RPC 1.9 because the interests of Petitioners and All Care are materially adverse under Colo. RPC 1.9(@)2 Colo. RPC 1.9(a)2 provides that a lawyer who has formerly represented a client in a matter shall not later 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 consents in writing to the representation. The prosecution asserted that All Care, through 50 percent owner Craveiro, had not given written consent for PMW to represent Petitioners in the eriminal case.
1 9 In response to the prosecution's motion to disqualify, Hoskins argued that the prosecution had not met its burden to specify facts demonstrating that his interests and All Care's interests are materially adverse. Hoskins argued that he is a 50 percent owner of All Care and, during the relevant time *832frame under the indictment, he was the principal manager of All Care. He also argued that he was the primary, and perhaps the only, high managerial agent of All Care, such that any criminal liability that might attach to All Care would have to be premised on his conduct. Thus, he argued, his interests were aligned with All Care's interests. He contended that the prosecution's conflict claim was founded on a "pyramid" of assumptions regarding future events, including that: (1) All Care and Hoskins will be tried jointly; (2) PMW will develop a blame-shifting defense directed to key managerial employees of All Care; (8) the prosecution will present adverse testimony from a yet-to-be-identified All Care witness; and (4) PMW will seek to discredit that testimony to All Care's detriment using confidential information obtained during its prior representation of All Care. Hoskins (through PMW) also took issue with the prosecution's reliance on PMWs letter referring to "malfeasance of key managerial employees." PMW argued that this reference was to tax and employment issues that arose at Hoskins' car wash businesses and that this was known to the prosecution.
{10 Approximately two weeks after the prosecution filed its motion to disqualify, Craveiro's attorney sent a letter to PMW notifying the firm that, pursuant to Section 1 in All Care's Operating Agreement, Hoskins had forfeited his ownership interest in All Care on or around July 19, 2013. Under Section 1 of the Agreement, a manager's ownership in All Care is deemed forfeited if a manager is charged with a felony and fails to "cure said obstructions to ownership" within 30 days. In the letter, Craveiro alleged that Hoskins had been charged with several dozen felonies and had failed to cure this obstruction to ownership within the 30-day period. At the time Petitioners sought review under C.A.R. 21, Hoskins and Craveiro were in arbitration concerning their ownership interests in All Care.
{11 On August 28, 2013, Craveiro, who is not a party to this criminal proceeding, filed an "amicus brief" through his personal attorney in support of the prosecution's motion to disqualify PMW.3 The trial court accepted this filing over Petitioners' objection. That same day, the trial court held an evidentiary hearing on the prosecution's motion to disqualify. Testimony at the hearing established that a dispute had developed between Craveiro and Hoskins over the ownership of All Care and over the fact that an employee4 had removed marijuana and cash from the All Care store location.
12 At the hearing, Craveiro testified on cross-examination that he was just a manager of the LLC "on paper" and never actually assumed a managerial role or performed management duties for All Care. He acknowledged that Hoskins was responsible for hiring and firing employees for All Care, handling the bank accounts and tax matters, and hiring the certified public accountant and attorneys for the business. He also agreed that all of the alleged conduct at issue in the criminal case occurred while Hoskins was the manager of All Care. Craveiro further acknowledged that he did not transmit any confidential information pertaining to All Care to PMW during the DOR investigation. Rather, he testified that he believed the confidential information PMW obtained during its representation of All Care concerned his personal financial information that was submitted to the state and the City of Lakewood during All Care's licensure process. He later acknowledged that all of those documents had been provided to the government, which then provided them back to Hoskins, and that there was nothing confidential about that information. Although Craveiro testified that he objected to PMW's representing Hoskins, he agreed that as an owner of All Care, Hoskins had full knowledge of, and access to, all of All Care's business records and that Hoskins could share that information with any individual counsel he retained. *833He also acknowledged that, during a conference call with Craveiro ahd eounsel for All Care on July 16, 2018, Hoskins and PMW expressed their interest in ensuritig that All Care continue to operate. When asked to describe the conflict between All Care and PMW, Craveiro responded, "I guess that's a difficult question. I think in some of the replies that I have seen from my counsel to them, that they are not looking after the best interests of the company."
1 13 PMW took the position at the hearing that it did not possess any confidential information that would adversely affect All Care and that, although Craveiro and Hoskins obviously had a separate dispute regarding ownership issues, no conflict existed in the criminal case because Hoskins had an interest in ensuring that All Care succeeded as a business. Petitioners' legal ethics expert, Ronald Nemirow, opined that, based on his review of the case, hearing testimony, applicable case law, and ethics rules, nothing suggested that Hosking' interests were adverse to All Care's interests with regard to the criminal case. Specifically, he sat nothing alleged in the indictmefit against All Care that was not also alleged against Hoskins, and he saw no indication beyond mere speculation that Hoskins intended or had a motive to blame someone else for the conduct of All Care. He opined that under section 18-1, 606, C.R.S. (2013), a corporation can only be held liable through the acts of a high managerial agent, such as Hoskins or Craveiro, but that Craveiro had testified that, as a practical matter, he had not managed the entity. In addition, he opined that even if the arbitration ultimately determined that Hoskins had forfeited his ownership interest in All Care, Hoskins still had ah friterest in ensuring that the entity's value remained maximized because Hoskins would be entitled to a buyout under the Operating Agreement. Nemirow also observed that, as an owner of All Care, Hoskigs is entitled to all of All Care's records, and that he would be entitled to give those records to whomever he chose to represent hifm as counsel. He opined that because any successor law firm would have access to the same information regarding All Care that PMW has, disqualification of PMW would not accomplish anything. Finally, Nemirow testified that even if it were to Hoskins' advantage to try to shift blame to All Care employees, any prejudice from this defense strategy would be cured by severing the trials.
114 On August 80, 2018, the trial court issued an order disqualifying PMW from representing Petitioners. The trial court found that PMWs previous representation of All Care in the DOR investigation gave rise to a conflict under Colo. RPC 1.9(a) because it was the same matter that was currently before the court in which PMW now represented Petitioners. The trial court concluded that Petitioners and All Care are materially adverse, reasoning that "other managers and employees of All Care" were indicted for the same or related conduct as Hoskins regarding the management of All Care, and therefore finding that "it is more than speculation that Hoskins will not only deny culpability for the criminal conduct that has been alleged against him, but will also attempt to shift blame for the offenses onto other employees and/or managers of All Care." As support for this conclusion, the court relied on the letter from PMW to the prosecution during the DOR investigation, which stated that PMW "originally became involved on Mr. Hoskins' behalf in response to tax and employment issues arising from the malfeasance of key managerial employees." The trial court further reasoned that "All Care will certainly attempt to shift blame for any illegal behavior away from its other employees and managers and solely onto Hoskins," and that All Care could argue that Hoskins was acting on his own behalf and not as manager of All Care when he engaged in unlawful behavior. The trial court determined that Hoskins' and All Care's trials likely will be severed, but that severance would be insufficient to cure the conflict because PMW obtained confidential information about All Care and "there is no adequate method by which this Court could fashion a remedy that would assure that none of that confidential information would be used by PMW."
1 15 Petitioners then petitioned this court to issue a rule to show cause under C.A.R. *83421. We issued the show cause order and now make the rule absolute.
II. Original Jurisdiction
116 Original relief pursuant to C.AR. 21 is an extraordinary remedy that is limited in purpose and availability. People v. Darlington, 105 P.3d 230, 232 (Colo. 2005). This court may exercise original jurisdiction where the normal appellate process would prove inadequate. Warden v. Exempla, Inc., 2012 CO 74, ¶ 16, 291 P.3d 30, 34. We exercise our original jurisdiction in this case because, if the trial court's ruling is allowed to stand, Petitioners must proceed to trial without their counsel of choice. See, e.g., People v. Nozolino, 2013 CO 19, ¶ 8, 298 P.3d 915, 918; People v. Harlan, 54 P.3d 871, 875 (Colo.2002).
III. Standard of Review
117 A trial court's interpretation of a rule of professional conduct presents a question of law that we review de novo. Nozolino, ¶ 9, 298 P.3d at 918. We review a trial court's decision to disqualify counsel for abuse of discretion. People v. Shari, 204 P.3d 453, 457 (Colo. 2009). We will find an abuse of discretion only where the lower court's decision was manifestly arbitrary, unreasonable, or unfair. Dunlap v. People, 173 P.3d 1054, 1094 (Colo.2007).
IV. Analysis
1 18 The issue before this court is whether the trial court abused its discretion in disqualifying Petitioners' retained counsel of choice. We begin with a discussion of a criminal defendant's right to be represented by counsel of choice. We then discuss Colo. RPC 1.9(a) which governs an attorney's duties to former clients. Whether the trial court abused its discretion in disqualifying PMW under Colo. RPC 1.9(a) requires us to determine whether the current criminal matter against Petitioners is the "same or substantially related" to the DOR investigation and whether Petitioners' interests are "materially adverse" to All Care's interests. We conclude that, for purposes of Colo. RPC 1.9(a), the two matters are the same or substantially related, but that the record before us is insufficient to support a finding that the interests of Petitioners and All Care are materially adverse in this criminal proceeding. We therefore hold that the trial court abused its discretion by disqualifying Petitioners' retained counsel of choice under Colo. RPC 1.9(a). Accordingly, we make the rule absolute, reverse the trial court's order disqualifying Petitioners' counsel of choice, and remand this case to the trial court for further proceedings.
A. A Criminal Defendant's Right to Counsel of Choice
119 "A defendant's right to be represented by counsel of choice is grounded in the jurisprudence of the sixth amendment to the United States Constitution and is entitled to great deference." Rodrigues v. Dist. Court, 719 P.2d 699, 705 (Colo.1986). "This guarantee reflects the substantial interest of a defendant in retaining the freedom to select an attorney the defendant trusts and in whom the defendant has confidence." Id. at 705-06. A defendant's right to select an attorney the defendant trusts is considered to be central to the adversary system and of substantial importance to the integrity of the judicial process. People v. Brown, 2014 CO 25, ¶ 16, 322 P.3d 214, 219 (internal quotation marks and citation omitted). "As such, we afford this right great deference." Id. (internal quotation marks and citation omitted).
1T20 However, the Sixth Amendment right to counsel of choice is not absolute and must give way under certain circumstances. People v. Frisco, 119 P.3d 1093, 1095 (Colo. 2005) (citing Wheat v. United States, 486 U.S. 153, 159, 108 S.Ct. 1692, 100 L.Ed.2d 140 (1988)). "In some circumstances, fundamental considerations other than a defendant's interest in retaining a particular attorney are deemed of controlling significance." Rodrigues, 719 P.2d at 706. "These considerations relate to the paramount necessity of preserving public confidence in the integrity of the administration of justice." Id. To that end, courts retain the discretion to disqualify attorneys from further representation. In re Estate of Myers, 130 P.3d 1023, 1025 (Colo. 2006).
*835121 Although disqualification is a matter of trial court discretion, the court must take into account the importance of continued representation of a party by his or her counsel of choice. Nozolino, ¶ 13, 298 P.3d at 919. This is particularly true in the criminal context, where the defendant's Sixth Amendment right to counsel of his or her choice is at stake. "Disqualification of a party's chosen attorney is an extreme remedy and is only appropriate where required to preserve the integrity and fairness of the judicial proceedings." Id.; accord Estate of Myers, 130 P.3d at 1025 ("[Wle have made clear that disqualification is a severe remedy that should be avoided whenever possible."). We have noted that courts are "highly cynical" of motions to disqualify opposing counsel in light of their potential use as dilatory or tactical devices. See Fognani v. Young, 115 P.3d 1268, 1272 (Colo. 2005), Estate of Myers, 130 P.3d at 1025. A defendant's choice of counsel will not lightly be denied, particularly where the court's concern lies not with protecting the defendant, but instead with protecting the interests of former clients, avoiding mistrial or reversal from later-materializing actual conflicts, or undermining public confidence in the impartiality and fairness of the process. Frisco, 119 P.3d at 1095.
122 The moving party has the burden of establishing that disqualification is proper. People v. Harlan, 54 P.3d 871, 877 (Colo. 2002). That burden is met only where the motion to disqualify sets forth specific facts showing a "clear danger that prejudice to a client or adversary would result from continued representation." Estate of Myers, 130 P.3d at 1025. "The required showing of prejudice cannot be based on mere speculation or conjecture." Nozgolino, ¶ 13, 298 P.3d at 919. Additionally, the trial court must determine that any remedy short of disqualification would be ineffective. Id.
B. Colorado Rule of Professional Conduct 1.9(a)
§23 Here, the prosecution alleges that a conflict of interest exists under Colo. RPC 1.9 based on PMW's prior representation of All Care during the DOR investigation and its current representation of Petitioners in this criminal proceeding.
124 Colo. RPC 1.95 governs an attorney's duties to former clients. Subsection (a) states that a lawyer who has formerly represented a client shall not later represent another client in the same or a substantially related matter in which the two clients' interests are materially adverse:
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.
Colo. RPC 1.9(a).6
125 The party seeking disqualification must show that: "(1) an attorney-client relationship existed in the past; (2) the present litigation involves a matter that is 'substantially related' to the prior litigation; (8) the present client's interests are materially adverse to the former client's interests; and (4) the former client has not consented to the disputed representation after consultation." Funplex P'ship v. F.D.I.C., 19 F.Supp.2d 1201, 1206 (D.Colo. 1998) (internal quotation marks and citation omitted) (applying Colo. RPC 1.9).
$26 Importantly, Colo. RPC 1.9 "applies only to situations involving an inherent and substantial risk of violating an attorney's duty of loyalty to former clients." Frisco, 119 P.3d at 1096. The prohibition of Rule 1.9 is "therefore limited to representations that combine the same or substantially related legal disputes with a motive to harm a for*836mer client, in order to advance the interests of a current client." Id.
{27 Here, it is undisputed that PMW previously represented All Care and that All Care-through Craveiro-has not consented to PMW's representation of Petitioners in this current matter. In addition, it does not appear to be disputed that, for the purposes of Colo. RPC 1.9, the current criminal matter involving PMW as counsel for Petitioners is "the same or a substantially related matter" as the underlying DOR investigation in which PMW represented All Care.7 Information obtained during the DOR investigation gave rise to the criminal indictment against Petitioners, and, according to the People, the interviews conducted with employees of All Care and Jane Medicals during the DOR investigation "ultimately formed the factual basis of portions of the indictment." See Colo. RPC 1.9 cmt. 3 ("Matters are 'substantially related for purposes of this Rule if they involve the same transaction or legal dispute ...." (emphasis added)). Thus, the central question in this case becomes whether the interests of Petitioners and All Care are materially adverse in this criminal proceeding.
C. Insufficient Showing That Interests Are Materially Adverse
4 28 As discussed above, the severe remedy of disqualification of a criminal defendant's counsel of choice "should be avoided whenever possible." Estate of Myers, 130 P.3d at 1025. Disqualification under Colo. RPC 1.9(a) is "limited to representations that combine the same or substantially related legal disputes with a motive to harm a former client, in order to advance the interests of a current client." Frisco, 119 P.3d at 1096. The party seeking to disqualify must set forth specific facts, not based on mere speculation or conjecture, that show a "clear danger" of prejudice to a client or adversary. See Estate of Myers, 130 P.3d at 1025.
129 We conclude that the prosecution failed to meet its burden to show that, for purposes of Colo. RPC 1.9(a), the interests of Petitioners and All Care are materially adverse in this criminal proceeding. The record before us does not reflect specific facts, beyond mere speculation, showing a clear danger of prejudice or a motive to harm All Care in order to advance Hosking' interests in this criminal case. Because the record is insufficient to support a finding that the interests of Petitioners and All Care are materially adverse in this criminal proceeding, disqualification is not required under Colo. RPC 1.9(a), and the trial court therefore abused its discretion in granting the motion to disqualify PMW as Petitioners' retained counsel of choice.
130 The prosecution's claim8 that PMW's prior representation of All Care presents a conflict under Rule 1.9(a) is based on the argument that PMW acquired confidential information about All Care that could be used against it in this eriminal proceeding. However, the prosecution's argument presumes that the defendants will be tried together, although the trial court's order indicates that severance is likely. It further presumes that "All Care" will be called to testify against Hoskins, although the prosecution has never identified who, precisely, will testify on behalf of the entity, nor has it described the nature of such testimony or how it would be adverse to Hoskins.
{31 In addition, the prosecution's argument presumes that Hoskins will attempt to shift blame to other All Care employees whose actions would subject All Care to criminal liability without implicating Hoskins. This blame-shifting argument assumes that other employees of All Care qualify as "high managerial agents" under section 18-1-606, *837C.R.S. (2018), and can therefore subject All Care to criminal lability. Section 18-1-606(1)(b) provides:
A business entity is guilty of an offense if ... [tlhe conduct constituting the offense is engaged in, authorized, solicited, requested, commanded, or knowingly tolerated by the governing hody or individual authorized to manage the affairs of the business entity or by a high managerial agent acting within the seope of his or her employment or in behalf of the business entity.
T82 However, the record before us indicates that Hoskins was the sole high managerial agent during the relevant time periods in the indictment. The indictment charges All Care, as a business entity, with a total of 15 counts, including racketeering and conspiracy under COCCA, cultivation and distribution of marijuana, tax evasion, arid theft. Two of those counts, for racketeering and conspiracy under COCCA, are alleged against all 17 defendants named in the indictment. The other 13 counts against All Care also name Hoskins,9 but do not identify any other All Care manager or employee who would qualify as a high managerial agent responsible for All Care's alleged criminal acts. Indeed, Hoskins is the only person identified in the indictment as a "high managerial agent" of All Care.
" 33 Although several of the counts against All Care name Brenden Joyee and David Krause, who worked in various capacities for other entities owned or partially owned by Hoskins, and one count against All Care names attorney Dallan Dirkmaat, the prosecution does not allege that Joyce, Krause, or Dirkmaat were ever managers or employees of All Care. The prosecution presented no specific evidence at the disqualification hearing establishing that two other defendants, Nathan Newman and Ryan Tripp, were high managerial agents of All Care. To the extent that, during Craveiro's direct examination,10 the prosecution attempted to suggest that Newman and Tripp, as store managers, were in a position to commit crimes on behalf of All Care, the court sustained the defense's objection to this question. In sum, neither the indictment nor the prosecution's briefing to the trial court nor any evidence presented at the hearing established the identity of any other All Care manager or employee who qualifies as a "high managerial agent" under section 18-1-606(1)(b).
€ 34 Further, the prosecution's theory that Hoskins will seek to shift blame to unidentified high managerial agents of All Care is mere speculation. The prosecution-and the trial court in its order-relied on PMW's letter referring to "malfeasance of key managerial employees" as support for the proposition that Hoskins will attempt to escape legal culpability by shifting liability to other All Care employees. However, as noted above, PMW pointed out that this letter, which does not even mention All Care, was referring to tax and employment issues arising at Hos-king' car wash businesses, and that this fact was known to the prosecution. PMW has also represented in filings to the trial court and this court that Hoskins has no interest in shifting blame to All Care. And indeed, the record before us reveals no motive for Hos-kins to shift blame to All Care, given that Hoskins has a continuing interest in the viability and profitability of All Care regardless of the outcome of the arbitration over the ownership dispute. Either Hoskins will continue to have a 50 percent ownership interest in All Care or he will be entitled to a compensation package under the All Care Operating Agreement.11
135 Likewise, the trial court's conclusion that All Care will attempt to shift blame to Hoskins is unsupported by the record. All *838Care has no incentive to implicate Hoskins because he was clearly a high managerial agent of All Care whose actions could subject All Care to criminal liability under section 18-1-606(1)(b). Thus, to point the finger at Hoskins only risks implicating All Care.12 To the extent that the prosecution takes the position that other employees of All Care also qualify as high managerial agents for purposes of section 18-1-606(1)(b), neither Hoskins nor All Care has any incentive to shift blame to them either because, again, to do so only risks implicating All Care.
36 We also note that nothing in the record before us establishes that PMW received confidential information regarding All Care from anyone other than Hoskins himself, as co-owner and manager of the LLC. Thus, any counsel representing Hoskins would have access to the same information. To the extent PMW was present during the DOR's interviews of other All Care employees not represented by PMW, the notes and recordings of those interviews presumably would be available to any counsel representing Hos-kins. Moreover, the prosecution's contention that PMW obtained confidential information about All Care through its conversations with these employees is mere speculation.
137 Finally, even assuming that Hoskins intends to seek to shift blame to All Care, any prejudice could be resolved by severance of Hoskins' and All Care's trials. The trial court reasoned that any testimony elicited from an All Care employee in the trial of Hoskins and Jane Medicals could be used against that same witness in a trial against All Care. However, such a concern can be avoided if All Care proceeds to trial first. See Nozolino, ¶ 13, 298 P.3d at 919 ("[Thhe trial court must determine that any remedy short of disqualification would be ineffective." (internal quotation marks and citation omitted)).
1 38 The burden is on the moving party to establish grounds for disqualification of opposing counsel. Fognami, 115 P.3d at 1272. Disqualification can occur only after facts have been alleged that demonstrate a potential violation of the rule, and counsel cannot be disqualified on the basis of speculation or conjecture. Id. Because the People have failed to show a clear danger of prejudice or that Petitioners have a motive to harm All Care, the People have not met this burden. See Frisco, 119 P.3d at 1096; Harlan, 54 P.3d at 877; Estate of Myers, 130 P.3d at 1025.
V. Conclusion
1 39 Because the record before us is insufficient to support a finding that the interests of Petitioners and All Care are materially adverse in this criminal proceeding, we hold that the trial court abused its discretion by disqualifying Petitioners' retained counsel of choice under Colo. RPC 1.9(a). Accordingly, we make the rule absolute, reverse the trial court's order disqualifying Petitioners' counsel of choice, and remand this case to the trial court for further proceedings.
CHIEF JUSTICE RICE dissents.

. PMW is comprised of Stephen C. Peters, Todd E. Mair, and Ronald L. Wilcox. Although the record reflects that Peters initially represented Hoskins and several entities in the underlying investigation, all three attorneys became involved in the case. We therefore refer simply to "PMW."

. The prosecution also alleged a violation of Colo. RPC 1.7, governing conflicts of interest with regard to current clients. The trial court order does not address Colo. RPC 1.7; therefore, we do not address it here. Accordingly, we do not address the prosecution's contention, raised below, that a Colo. RPC 1.7 conflict exists under the theory that monetary transactions between PMW and Petitioners (ie., payments from Petitioners for PMW's legal services during the investigation) could be considered to violate federal money-laundering statutes. The People do not reassert those allegations before us.

. The amicus brief asserts that PMW "undoubtedly learned confidential information concerning Mr. Craveiro through its previous representation of All Care." (Emphasis added). For this reason, Craveiro asserted that his interests and All Care's interests are materially adverse to Hoskins.

. The employee, Brittany Sansburn, is not charged in the indictment.

. Colo. RPC 1.9 is identical to Rule 1.9 of the Model Rules of Professional Conduct from the American Bar Association.

. Colo. RPC 1.9(c) separately prohibits the use of information from a prior representation to the disadvantage of the former client; therefore, Colo. RPC 1.9(a) applies only to situations involving an "inherent and substantial risk" of violating an attorney's duty of loyalty to former clients. Frisco, 119 P.3d at 1096.

. Petitioners did not seriously contest this issue below. Their petition assumes-without conceding-that this element has been satisfied.

. It is of some significance that the motion to disqualify was brought by the prosecution, not All Care. See Rodriguez, 719 P.2d at 707 ("[Ilt is of some significance that [the former-client-turned-witness] ... did not join the prosecution's motion to disqualify."). All Care did not join the motion; at most, Craveiro, acting through his individual attorney, filed a non-party "amicus brief" with the trial court supporting the motion. Counsel for All Care was present at the hearing on the motion to disqualify but did not examine witnesses or present argument to the court.

. Hoskins and Jane Medicals are also charged with additional counts for which All Cate is not charged.

. Craveiro is not charged in the indictment.

. The All Care Operating Agreement states:
If ownership is forfeited, the MANAGER shall compensate the member the sum equivalent to of [sic] one year's net earriings of the COMPANY, multiplied by the percentage of ownership owned by the member at the time of forfeiture. One year's net earnings shall be calculated by taking the net earnings of the previous completed calendar months and multiplying that sum by four. The MANAGER shall have 6 months to tender payment to the member for the sum of the forfeiture.

. Although the trial court suggested that All Care could argue that the jury should not impute Hoskins' conduct to All Care because he was not acting as manager of All Care when he engaged in unlawful behavior, this is mere speculation and was not argued by the prosecution.