Court of Appeal Rules Materiality is Imperative for Order Disqualifying Counsel

In a published opinion (38 Cal.App.5th 1069), the 2nd District of the Court of Appeal reversed a trial court order disqualifying Richie Litigation, P.C. from representing Plaintiff and Appellant Thomas Wu. BNSK represented Mr. Wu for purposes of appeal.

In late 2017, Mr. Wu sued O’Gara Coach Company, LLC for various workplace violations including unlawful racial discrimination, wrongful termination, and others that arose during his time at the car dealership. During some time that Mr. Wu worked for O’Gara Coach, the president and COO of O’Gara Coach was Darren Richie. Eventually, both Mr. Wu and Mr. Richie were forced from their positions. Mr. Richie then passed the California bar exam, incorporated a law firm, and Mr. Wu hired them to sue O’Gara Coach.

O’Gara Coach moved to disqualify Richie Litigation from representing Mr. Wu early in the case. O’Gara Coach argued that Mr. Richie’s former position – while not an attorney then – provided him with confidential and privileged information that would put Mr. Wu at an advantage. O’Gara Coach also argued that Richie Litigation should be disqualified because Mr. Richie would be called as a witness. It submitted declarations from its outside counsel who averred to the hundreds of emails and telephone calls that they had with Mr. Richie regarding all of O’Gara Coach’s various legal issues. None of the declarations indicated that Mr. Richie discussed any issues with Mr. Wu with O’Gara’s outside counsel when Mr. Richie was employed by O’Gara Coach. Mr. Wu’s opposition highlighted the facts Mr. Richie never was its attorney, and that Mr. Wu was fully informed and consented to Mr. Richie being called as a witness, if it would occur.

The trial court agreed with O’Gara Coach. In granting the motion to disqualify, the trial court ruled that Mr. Richie “had significant responsibility for the formulation of implementation of anti-harassment and anti-discrimination policies for O’Gara [Coach], and it is more likely than not that in those roles he consulted with outside counsel for O’Gara [Coach].” The trial court also ruled that it was highly probable that Mr. Richie would be called to testify and that further supported disqualification. Mr. Wu appealed.

In the opinion, the Court of Appeal explained its reasoning from a prior related case entitled Joseph Ra v. O’Gara Coach Company, LLC (30 Cal.App.5th 1115). The court explained that its reversal of an order refusing to disqualify Richie Litigation there relied on evidence that “[Mr.] Richie possessed attorney-client privileged information directly related to O’Gara Coach’s defense of the claims being asserted against it in the litigation then before us and to O’Gara Coach’s prosecution of its cross-claims against Ra in that lawsuit.” (emphasis added.)

Contrasting Mr. Wu’s case from Ra, the court found that in Mr. Wu’s case, “[n]one of the declarations suggest Richie was involved in any way in investigating Wu’s complaints of a hostile work environment or had any discussions with O’Gara Coach’s outside counsel regarding Wu’s claims.” The court equated O’Gara Coach’s evidence to “playbook” information – business practices or litigation philosophy. The court held that the trial court’s ruling was based on an incorrect finding that Mr. Richie acquired information during his former position that was material to Mr. Wu’s claims.

The Court of Appeal further held that even if Mr. Richie were to be called as a witness, that the exception to the rule – informed client consent – negated any grounds to disqualify Richie Litigation. The court also reversed the trial court in that holding as well.

After the opinion was issued O’Gara Coach petitioned for rehearing. That was petition was denied and O’Gara Coach then petitioned the California Supreme Court for review. That petition as well was denied.

In addition to the Ra and Wu cases, Richie Litigation represented another former O’Gara Coach employee, Jorge Loera, who also sued O’Gara Coach for the harms it caused. O’Gara Coach successfully moved to disqualify Richie Litigation in that matter was well, which was also reversed in a similar opinion to the Wu appeal (Jorge Loera v. O’Gara Coach Company, LLC, et al. – 2019 WL 4014086).