ABN Corporation v. Groupe Pelm International Corporation

Background

The complaint alleges that Groupe Pelm, its CEO Christian Pelligrini, and its attorney Victoria Brieant represented that Groupe Pelm had more than six million nitrile gloves for sale. The plaintiffs allegedly paid a $50,000 deposit, but Groupe Pelm allegedly had no goods to sell. Brieant has retained separate counsel for herself while continuing to represent Groupe Pelm and Pelligrini, referred to in the order as the GP defendants.

Potential Conflict of Interest

The court explained that it has authority to supervise attorneys practicing before it and may disqualify an attorney when necessary to protect the integrity of the judicial process. California professional-conduct rules prohibit representation when there is a significant risk that the attorney’s own interests will materially limit the representation, absent the required informed written consent.

The court focused on Brieant’s position that her defense would rely on attorney-client communications with the GP defendants. According to the order, Brieant would need to reveal potentially damaging statements by her clients to defend herself. The court also identified possible future disputes over whether those communications are protected by attorney-client privilege. The court stated that Brieant’s interests could favor disclosure while the GP defendants’ interests could favor preserving the privilege. It found that the conflict was currently potential rather than actual because the court had not yet ruled on Brieant’s motion to dismiss and the defenses were not yet incompatible.

Attorney as Witness

The court also applied California Rule of Professional Conduct 3.7, which generally prevents a lawyer from acting as an advocate at trial when the lawyer is likely to be a witness, subject to stated exceptions. The court found that Brieant was plainly a material witness to the allegations in the complaint.

Order

The court ordered Brieant to show cause why she should not be disqualified from representing the GP defendants. It required a written brief of no more than 10 pages within 30 days addressing compliance with Rules 1.7 and 3.7. If Brieant relies on informed written consent from the GP defendants, she must submit proof of that consent to the court in an in-camera, ex parte sealed filing. The court stated that, without such proof, it will conclude that no informed written consent was provided for Brieant’s continued representation and may disqualify her if appropriate.

The court did not disqualify Brieant in this order. It held the GP defendants’ pending motion to dismiss in abeyance until it receives assurances that Brieant may ethically represent them.