Sierra v. Costco Wholesale Corporation
- Susan Illston
- 3:22-cv-01444
- U.S. District Court · Northern District of California
- 8
In Sierra v. Costco Wholesale Corporation, Judge Illston granted Costco’s motion to disqualify Zoila Sierra’s law firm because its lawyer previously represented Costco in related cases.
Zoila Sierra must obtain new counsel or choose to represent herself because DTLA Law was disqualified. Costco Wholesale Corporation obtained the requested disqualification, and DTLA Law can no longer represent Sierra in this action.
What happened
In Sierra v. Costco Wholesale Corporation, Costco asked the court to remove Downtown L.A. Law Group from representing Zoila Sierra in her negligence and premises-liability case arising from a slip-and-fall at Costco’s Hayward store. Costco argued that the firm’s attorney, Anthony Werbin, had previously represented Costco in similar cases and had confidential information relevant to Sierra’s case.
The court found that Werbin had directly represented Costco in 21 slip-and-fall cases and that the prior cases involved similar issues about whether Costco had notice of dangerous conditions. The court also found that the law firm did not show it had timely and effective safeguards preventing Werbin from accessing or sharing Costco’s confidential information.
Judge Illston granted Costco’s motion and disqualified Downtown L.A. Law Group from representing Sierra. The court also overruled Sierra’s evidentiary objections and denied the remaining objections as moot. Sierra was given 30 days to retain new counsel or choose to represent herself and notify the court.
The detailed version
- Sierra v. Costco Wholesale Corporation · No. 3:22-cv-01444
- Susan Illston
- Sept. 23, 2022
Background
Costco moved to disqualify Downtown L.A. Law Group ("DTLA Law") from representing Zoila Sierra. Sierra’s case asserts negligence and premises liability based on a July 23, 2019 slip-and-fall incident at Costco’s Hayward store.
Costco argued that Anthony Werbin, an attorney at DTLA Law, had previously represented Costco while working at another firm. Werbin represented Costco in 21 personal-injury cases between July 5, 2017, and January 16, 2020, served as trial counsel in one case, and recorded 1,195 hours on Costco matters. Costco said Werbin handled matters from beginning to end, including strategy, communications with Costco personnel and claims administrators, confidential documents, discovery, and depositions. Costco also asserted that Werbin learned Costco’s strategies concerning claims that it had constructive notice of dangerous conditions.
Werbin stated that he did not receive confidential or proprietary information from Costco and that his knowledge came from his general legal experience. He was not counsel of record for Sierra; Gevork Gazaryan represented her. DTLA Law said its lawyers worked in separate teams and that Werbin’s team was not assigned Costco cases. The firm also relied on a FileVine system implemented in December 2021 that prevented Werbin from viewing Costco case files.
Legal standard
The court applied California law governing attorney-disqualification motions in federal court. Under California professional-conduct rules, a lawyer generally may not represent a person in the same or a substantially related matter when that person’s interests are materially adverse to a former client, unless the former client gives informed written consent.
A substantial relationship exists when information material to the former representation could also be material to the current representation. When the lawyer had a direct attorney-client relationship with the former client, the court presumes that the lawyer received confidential information. The lawyer’s conflict may be imputed to the entire firm, although a firm can sometimes rebut that presumption by showing that an effective ethical screen was timely implemented and prevented the lawyer from involvement or communication concerning the case.
Court’s analysis
The court found that Werbin had a direct attorney-client relationship with Costco because he personally provided legal services in 21 slip-and-fall cases. The court therefore presumed that he learned Costco’s confidential information.
The court also found a substantial relationship between Werbin’s former work and Sierra’s current case. Both involved slip-and-fall claims and similar constructive-notice issues. The court described constructive notice as a central issue that could become dispositive and found a substantial risk that Werbin’s knowledge of Costco’s internal policies, procedures, defense strategies, and tactics could be used in Sierra’s case. The court therefore concluded that Werbin himself should be disqualified.
The court then considered whether Werbin’s disqualification extended to DTLA Law. The court held that DTLA Law had not shown that it timely screened Werbin. The case was filed in July 2021, but DTLA Law did not implement FileVine until December 2021. Before FileVine, all DTLA Law employees could view all client files. The firm did not provide specific information about safeguards used during the five months before FileVine was implemented. The court found that declarations stating Werbin had not worked on the case and had not shared information were insufficient to establish proper preventative measures.
Disposition
The court granted Costco’s motion to disqualify DTLA Law. DTLA Law was disqualified from representing Sierra in the action, and Sierra was ordered within 30 days either to retain new counsel or elect to proceed without a lawyer and notify the court of her choice.
The court also overruled Sierra’s evidentiary objections concerning Costco’s evidence. It denied the remaining objections as moot because it did not rely on that evidence in resolving the motion.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.