Richard Watkins v. Trans Union, LLC


Filed opinion of the court by Judge Hamilton. AFFIRMED. Michael S. Kanne, Circuit Judge; Diane S. Sykes, Circuit Judge, concurring in part and dissenting in part, and David F. Hamilton, Circuit Judge. [6863429-1] [6863429] [17-1142]

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Case: 17-1142 Document: 37 Filed: 08/22/2017 Pages: 34 In the United States Court of Appeals For the Seventh Circuit ____________________  No. 17‐1142  RICHARD WATKINS,  Plaintiff‐Appellee,  v.  TRANS UNION, LLC,  Defendant‐Appellant.  ____________________  Appeal from the United States District Court for the  Southern District of Indiana, Terre Haute Division.  No. 2:14‐cv‐135‐WTL‐DKL — William T. Lawrence, Judge.  ____________________  ARGUED MAY 31, 2017 — DECIDED AUGUST 22, 2017   ____________________  Before KANNE, SYKES, and HAMILTON, Circuit Judges.  HAMILTON,  Circuit  Judge.  Plaintiff  Richard  Watkins  has  sued Trans Union for violating the Fair Credit Reporting Act.  The merits of his claims are not the subject of this appeal. The  issue here is whether attorney John Cento should be disqual‐ ified  from  representing  Watkins.  That  is  because  over  ten  years  ago  Cento  earned  a  living  defending  Trans  Union  in  hundreds of lawsuits alleging Fair Credit Reporting Act vio‐ lations. Because the Southern District of Indiana makes use of  Case: 17-1142 Document: 37 2  Filed: 08/22/2017 Pages: 34 No. 17‐1142  Indiana’s rules governing attorney conduct, Indiana Rule  of  Professional Conduct 1.9 (Duties to Former Clients) governs  Trans Union’s effort to have Cento disqualified.   The  district  court  found  that  Rule  1.9  does  not  require  Cento’s disqualification, but the court authorized an interloc‐ utory appeal of that decision under 28 U.S.C. § 1292(b), which  we  accepted.  Trans  Union  argues  that  the  district  court  ap‐ plied the wrong legal standard to decide disqualification and  misapplied  the  standard  that  it  did  apply.  We  disagree  and  affirm the decision of the district court. Because this case turns  on the trajectory of Cento’s legal career, we begin there. We  then review the facts and procedural history of Watkins’s case  before reviewing the district court’s reasons for denying dis‐ qualification under Rule 1.9.  I.   Factual and Procedural History  A.  John Cento’s Legal Career  John Cento began his career as an attorney at the Indian‐ apolis law firm of Katz & Korin, P.C., where he worked with  Robert  Schuckit.  Trans  Union  was  a  client  first  of  Schuckit,  and then Katz & Korin when Schuckit joined the firm. Cento  began  representing  Trans  Union  in  2001,  and  between  2003  and  2005  worked  almost  exclusively  on  Trans  Union  cases.  Schuckit then left Katz & Korin in June 2005 to form his own  law firm. Cento followed, but he stayed with Schuckit’s new  firm for just a month.   Almost all of the cases in which Cento represented Trans  Union  involved  the  Fair  Credit  Reporting  Act  (FCRA).  The  FCRA imposes a duty to maintain reasonable procedures for  accurate reporting. See 15 U.S.C. § 1681e(b). The Act author‐ izes a private cause of action for consumers against consumer  Case: 17-1142 No. 17‐1142  Document: 37 Filed: 08/22/2017 Pages: 34 3 reporting agencies such as Trans Union for willful, knowing,  or  negligent  failures  to  comply  with  the  law.  15  U.S.C.  §§ 1681n–p.  A  defendant  may  avoid  liability  for  violations  that occur despite the defendant’s good‐faith effort to comply  with the law. See, e.g., 15 U.S.C. §§ 1681g(e)(5), (7).  Cento defended Trans Union against those claims of FCRA  violations  for  five  years.  Between  2001  and  2005,  he  repre‐ sented  Trans  Union  in  over  250  cases  and  billed  over  4,000  hours of work for Trans Union. He worked with Trans Union’s  in‐house counsel and employees, and he was given access to  any information necessary for litigation. Today, twelve years  after  Cento  last  represented  Trans  Union,  Schuckit  and  his  firm continue to represent Trans Union. Some of the Trans Un‐ ion  employees  with  whom  Cento  worked  remain  with  the  company.  In 2013, Cento formed Cento Law, which represents con‐ sumers bringing FCRA violation claims against credit report‐ ing agencies. The law firm advertises the experience of its at‐ torneys on its webpage: “Our credit report attorneys have lit‐ igated hundreds of Fair Credit Reporting Act cases across the  country. Our experience in this area of law is derived not only  from representing consumers, but from years of prior repre‐ sentation  of  two  of  the  three  national  consumer  reporting  agencies,  Trans  Union  and  Equifax.”  Cento  Law, (last visited Aug. 21, 2017). In 2012,  and again in 2013, Cento was disqualified from cases in which  he represented plaintiffs who brought claims against his for‐ mer  client,  Trans  Union.  Childress  v.  Trans  Union,  LLC  (Chil‐ dress I), No. 1:12‐CV‐00184‐TWP‐DML, 2012 WL 6728339 (S.D.  Ind. Dec. 28, 2012); Hobson v. Trans Union, LLC, No. 1:13‐CV‐ 54, 2013 WL 2443917 (N.D. Ind. June 5, 2013).  Case: 17-1142 Document: 37 4  Filed: 08/22/2017 Pages: 34 No. 17‐1142  B.   The Watkins Litigation  In the present case, Richard Watkins selected Cento to rep‐ resent him in his case alleging FCRA violations against Trans  Union  under  15  U.S.C.  §§  1681e,  1681g,  and  1681i.  Watkins  had applied for a loan in 2009 and discovered that his Trans  Union credit file contained twenty “collection tradelines” that  were not his. He disputed the accuracy of his credit file, and  Trans  Union  removed  the  incorrectly  attributed  collections.  But when Watkins applied for a mortgage in 2013, he learned  that the collections had once again been placed in his credit  file. The problem, Watkins alleges, is that Trans Union’s algo‐ rithms  have  resulted  in  the  merging  or  mixing  of  Watkins’s  credit file with that of another person to create a “mixed file,”  and that Trans Union has failed to remedy the continued in‐ clusion of collections not belonging to Watkins. The merits of  Watkins’  claims  will  turn  on  whether  the  procedures  Trans  Union used “reasonable procedures to assure maximum pos‐ sible  accuracy”  of  the  information  about  Watkins,  see  15  U.S.C. § 1681e(b), and whether Trans Union made good‐faith  efforts to comply with the law, § 1681g(e)(5) & (e)(7).  Cento filed Watkins’s complaint in May 2014. One month  later, Trans Union filed a motion to order Cento to show cause  why he should not be disqualified as Watkins’ lawyer. Watkins  v.  Trans  Union,  LLC,  No.  2:14‐cv‐135‐WTL‐DKL,  2016  WL  4919999,  at  *1  (S.D.  Ind.  Sept.  15,  2016).  The  district  court  granted that motion and permitted Cento to seek limited dis‐ covery to aid in showing cause. Id. This was an unusual pro‐ cedural  path  for  seeking  attorney  disqualification.  Rather  than file a motion to disqualify, Trans Union sought a show‐ cause order in reliance on the cases in which Trans Union had  successfully sought disqualification against Cento in the past.  Case: 17-1142 No. 17‐1142  Document: 37 Filed: 08/22/2017 Pages: 34 5 Id.;  see  also  Childress  I,  2012  WL  6728339;  Hobson,  2013  WL  2443917. The discovery process that followed the show‐cause  order resulted in a magistrate judge report with three alter‐ nate recommendations (to hold an evidentiary hearing; to de‐ cline to disqualify; or, alternatively, to disqualify), but Judge  Lawrence, to whom the case was reassigned after the magis‐ trate proceedings, decided to “exercise [the court’s] authority  to begin with a clean slate.” Watkins, 2016 WL 4919999, at *2.  The parties briefed the attorney disqualification issue and the  court held a hearing before issuing its decision. Id. at *1.   In the district court, as on appeal, Trans Union relied on  LaSalle  National  Bank  v.  Lake  County,  703  F.2d  252  (7th  Cir.  1983), and Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263  (7th Cir. 1983), to argue that federal common law governs the  standard for disqualification. Both cases predate Indiana Rule  of Professional Conduct 1.9, which, as the district court found  here, governs the issue of disqualification. After analyzing the  precedents and the history of the adoption of the Rules of Pro‐ fessional Conduct, Judge Lawrence followed the guidance of  Rule 1.9 rather than LaSalle National Bank or Analytica and held  that  Cento  should  not  be  disqualified.  Watkins,  2016  WL  4919999, at *6. The prior representations are not factually re‐ lated such that the same matter is in dispute in Watkins. Nor,  the judge found, is there a risk that confidential information  from  the  prior  matters  would  materially  advance  Watkins’  present claims. Id. at *4–6. Moreover, the judge noted, over a  decade has passed since Cento represented Trans Union. Id.  at  *6.  Accordingly,  the  judge  held  that  the  requirements  for  disqualification  were  not  met.  He  permitted  Cento  to  con‐ tinue representing Watkins. Id.  Case: 17-1142 6  Document: 37 Filed: 08/22/2017 Pages: 34 No. 17‐1142  In  this  interlocutory  appeal  under  28  U.S.C.  §  1292(b),  Trans Union argues that the district court applied the wrong  legal  standard  for  attorney  disqualification  and  misapplied  the  standard  it  chose.  We  affirm  the  decision  of  the  district  court.   II.  Analysis  We review for abuse of discretion the district court deci‐ sion rejecting disqualification. Owen v. Wangerin, 985 F.2d 312,  317 (7th Cir. 1993); Whiting Corp. v. White Machinery Corp., 567  F.2d  713,  715  (7th  Cir.  1977)  (The  district  court  “possesses  broad  discretion  in  determining  whether  disqualification  is  required in a particular case … .”), quoting Schoetter v. Railoc  of Ind., Inc., 546 F.2d 706, 710 (7th Cir. 1976). An abuse of dis‐ cretion can be shown when the district court based its deci‐ sion on an erroneous view of the law or a clearly erroneous  evaluation of evidence. See, e.g., Novo Terapeutisk Lab. A/S v.  Baxter Travenol Lab., Inc., 607 F.2d 186, 188–89 (7th Cir. 1979)  (“This court has relied on the broad discretion of the district  court  in  refusing  to  disturb  a  disqualification  order,  but  we  have not allowed a strict standard of review to prevent rever‐ sal when the district court predicated its disqualification rul‐ ing on  a misunderstanding of the law.”) (citations omitted).  This standard of review is consistent with other areas of law  in  which  district  judges  have  discretion  but  in  exercising  it  must apply the correct rule of law. See, e.g., Cooter & Gell v.  Hartmarx Corp., 496 U.S. 384, 405 (1990) (“district court would  necessarily abuse its discretion [in deciding Rule 11 sanctions  motion]  if  it  based  its  ruling  on  an  erroneous  view  of  the  law”); Ervin v.  OS Restaurant Services, Inc., 632 F.3d 971,  976  (7th  Cir.  2011)  (application  of  incorrect  legal  rule  to  decide  class certification would amount to abuse of discretion).  Case: 17-1142 No. 17‐1142  Document: 37 Filed: 08/22/2017 Pages: 34 7 We have observed that granting a motion for disqualifica‐ tion has “immediate, severe, and often irreparable … conse‐ quences”  for  the  party  and  disqualified  attorney.  Freeman  v.  Chicago Musical Instrument Co., 689 F.2d 715, 719 (1982). Dis‐ qualifying  a  lawyer  immediately  deprives  the  losing  party  from the “representation of his choice” and disrupts the liti‐ gation. Id. In sum, “disqualification, as a prophylactic device  for  protecting  the  attorney‐client  relationship,  is  a  drastic  measure which courts should hesitate to impose except when  absolutely necessary … [because it] destroy[s] a relationship  by depriving a party of representation of their own choosing.”  Id. at 721.   However,  the  duty  of  confidentiality  represented  in  the  Rules of Professional Conduct, like the Code of Professional  Responsibility that came before them, is fundamental to the  profession  and  the  relationship  between  lawyer  and  client.  See id. Courts have a duty to safeguard the privacy of the at‐ torney‐client relationship and in doing so to “maintain public  confidence in the legal profession” and to protect “the integ‐ rity of the judicial proceeding.” Id.   Whether disqualification is appropriate in this case is gov‐ erned by the Indiana Rules of Professional Conduct. Lawyers  representing  clients  in  federal  courts  must  follow  federal  rules,  but  most  “federal  courts  use  the  ethical  rules  of  the  states in which they sit.” Huusko v. Jenkins, 556 F.3d 633, 636  (7th Cir. 2009). Watkins filed suit in the Southern District of  Indiana, which has adopted the Indiana Rules of Professional  Conduct to govern attorneys’ conduct. S.D. Ind. Local Rule 83‐ 5(e).  Indiana  adopted  the  ABA  Model  Rules  of  Professional  Conduct as its Rules of Professional Conduct in 1987. United  States v. Goot, 894 F.2d 231, 234 (7th Cir. 1990). Rule 1.9 governs  Case: 17-1142 Document: 37 Filed: 08/22/2017 8  Pages: 34 No. 17‐1142  the  duties  lawyers  owe  to  former  clients  and  thus  whether  Cento should be disqualified from representing Watkins be‐ cause of a duty he may owe to his former client, Trans Union.1  A.  Indiana Rule of Professional Conduct 1.9  Indiana  Rule  of  Professional  Conduct  1.9  mirrors  the  A.B.A. Model Rule of the same number and reads, in relevant  part:  A lawyer who has formerly represented a client  in  a  matter  shall  not  thereafter  represent  an‐ other  person  in the same or a substantially  re‐ lated 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.  In interpreting the Rules of Professional Conduct, federal  courts may rely on the specific guidance offered in the com‐ mentary. See Nix v. Whiteside, 475 U.S. 157, 166 (1986); Strick‐ land v. Washington, 466 U.S. 668, 688 (1984); United States v. Wil‐ liams, 698 F.3d 374, 386 (7th Cir. 2012) (Hamilton, J., dissenting                                                    1 Special considerations apply to federal government lawyers but are not  implicated here. See, e.g., United States v. Supreme Court of New Mexico, 839  F.3d 888, 893, 929–30 (10th Cir. 2016) (holding that a New Mexico Rule of  Professional  Conduct  as  applied  in  part  to  federal  prosecutors  violated  Supremacy Clause), petition for cert. filed, No. 16‐1450 (June 5, 2017). The  McDade Act requires that an “attorney for the Government shall be sub‐ ject to State laws and rules, and local Federal court rules, governing attor‐ neys in each State where such attorney engages in that attorney’s duties,  to  the  same  extent  and  in  the  same  manner  as  other  attorneys  in  that  State.” 28 U.S.C. § 530B. However, the Act “should not be construed in any  way  to  alter  federal  substantive,  procedural,  or  evidentiary  law… .”  28  C.F.R. § 77.1(b).   Case: 17-1142 No. 17‐1142  Document: 37 Filed: 08/22/2017 Pages: 34 9 in part) (commentary to A.B.A. standards governing norms of  legal practice can be “valuable guidance”). The commentary  to  Rule  1.9  defines  two  matters  as  “substantially  related”  when two matters “involve the same transaction or legal dis‐ pute,”  or  when  there  is  a  “substantial  risk  that  confidential  factual information as would normally have been obtained in  the prior representation would materially advance the client’s  position in the subsequent matter.” Ind. R. Prof’l Conduct 1.9,  cmt. 3.  Whether two matters “involve the same transaction” is de‐ termined by an inquiry into whether the matters are factually  related. Comment 2 states: “The scope of a ‘matter’ for pur‐ poses of this Rule depends on the facts of a particular situa‐ tion or transaction.” It is the direct involvement “in a specific  transaction,” that makes “subsequent representation of other  clients  with  materially  adverse  interests  in  that  transaction  clearly … prohibited.” Id., cmt. 2.  If the prior and present matters do not involve the same  transaction or legal dispute, they may still be substantially re‐ lated if there is a substantial risk that confidential information  would materially advance the client’s position in the present  matter. The commentary tells us that information “disclosed  to the public or to other parties adverse to the former client  ordinary will not be disqualifying,” and that information “ac‐ quired in a prior representation may have been rendered ob‐ solete by the passage of time.” Id., cmt. 3.  On the issue most pertinent to this case, the commentary  explains  that  “a  lawyer  who  recurrently  handled  a  type  of  problem for a former client is not precluded from later repre‐ senting another client in a factually distinct problem of that  type  even  though  the  subsequent  representation  involves  a  Case: 17-1142 10  Document: 37 Filed: 08/22/2017 Pages: 34 No. 17‐1142  position adverse to the prior client.” Id., cmt. 2. “In the case of  an organizational client, general knowledge of the client’s pol‐ icies and practices ordinarily will not preclude a subsequent  representation.” Id., cmt. 3.   Rule 1.9 clarified and narrowed the contours of an older  federal  common‐law  rule  for  attorney  disqualification  re‐ ferred  to  as  the  “substantial  relationship  test.”  The  Model  Rules of Professional Conduct, of which Rule 1.9 is a part, re‐ placed the Model Code of Professional Conduct, which was  based  on  canons  first  promulgated  in  1908.  Monroe  Freed‐ man, The Kutak Model Rules v. The American Lawyer’s Code of  Conduct, 26 Vill. L. Rev. 1165 (1981); Kathleen Maher, Keeping  Up  Appearances,  16  Prof.  Law. 1  (2005).  The  Rules  were  the  product  of  the  Kutak  Commission,  as  it  became  known,  formed  in  1977  to  assemble  a  set  of  governing  rules  for  the  profession. Freedman, Kutak Model Rules, at 1166. Some of the  Model  Rules,  including  Rule  1.9,  explicitly  rejected  the  old  canons. Maher, Keeping Up Appearances (2002 revisions to Rule  1.9 deleted the lingering reference to “appearance of impro‐ priety”  originally  housed  in  Canon  9  because  it  was  “no  longer helpful to the analysis of questions arising under this  Rule”).  The  Kutak  Commission’s  proposed  Model  Rules  of  Professional Conduct were issued in 1983 and then adopted  by the states in the years that followed. Indiana adopted the  Model Rules of Professional Conduct as its Rules of Profes‐ sional Conduct in 1987. Goot, 894 F.2d at 234.  B.  Rule  1.9  Does  Not  Disqualify  Cento  from  Representing  Watkins  The district court looked to the language of Rule 1.9 and  its  commentary  and  determined  that  the  dispute  between  Case: 17-1142 Document: 37 No. 17‐1142  Filed: 08/22/2017 Pages: 34 11 Watkins and Trans Union neither involved the “same transac‐ tion or legal dispute” as those prior cases in which Cento rep‐ resented Trans Union nor involved a “substantial risk” of con‐ fidential information Cento may have gained while working  for  Trans  Union  materially  advancing  Watkins’  claim.  Wat‐ kins, 2016 WL 4919999, at *4, *6. We agree.   1.  Different Transactions  First, the present and prior matters are not part of the same  legal dispute. The question turns “on the facts of a particular  situation or transaction,” not whether the matters merely in‐ volve the same type of legal issues. Ind. R. Prof’l Conduct 1.9,  cmt. 2. Here, Cento’s prior representations of Trans Union and  his present representation of Watkins both involve FCRA vio‐ lations  but  do  not  turn  on  the  same  facts  of  one  “particular  situation  or  transaction.”  Id.  The  facts  upon  which  Watkins’  case will turn—recurrent false collection listings on his credit  report, despite multiple requests to remove them—are unique  to his claim against Trans Union and are not interwoven with  any individual case in which Cento represented Trans Union  in the past.  A comparison between Cento’s representation of Watkins  and the representation at issue in an Indiana Court of Appeal  opinion reinforces this conclusion. In XYZ, D.O. v. Sykes, at‐ torney Kathleen Clark represented a doctor in six malpractice  cases. 20 N.E.3d 582, 583–84 (Ind. App. 2014). Five years after  her representation of the doctor concluded, she began work‐ ing for another law firm. Id. at 584. At that firm, Clark con‐ ducted an intake interview for a plaintiff asserting a malprac‐ tice claim against the same doctor she previously represented.  The firm took the case and directed Clark  to work  on it. Id.  The trial court denied a motion to disqualify the entire firm  Case: 17-1142 12  Document: 37 Filed: 08/22/2017 Pages: 34 No. 17‐1142  for  which  Clark  now  worked,  but  the  appellate  court  re‐ versed. Id.   Although  there  are  superficial  similarities  between  the  two cases, on closer examination, the facts presented in XYZ  are distinct from those in the present case, which point to a  different outcome. The problem was that the plaintiff in XYZ  was  suing  both  the  doctor  and  the  hospital  where  he  per‐ formed surgery on the plaintiff. The plaintiff’s claim against  the hospital was that it had been negligent in issuing creden‐ tials to the doctor based on the same surgeries in which attorney  Clark had defended him. Looking to the language of Comment  3 to Rule 1.9, XYZ found that the old and new representations  were  substantially  related  because  the  new  complaint  was  “based  in  part  upon  the  Hospital’s  alleged  failure  to  ade‐ quately investigate the circumstances surrounding  those six  prior malpractice cases in which Clark represented [the d]oc‐ tor.” Id. at 587. Accordingly, the appellate court found the new  and old representations were substantially  related, and that  the passage of time did not cure the problem: “If the six prior  medical malpractice cases remain relevant regarding the cur‐ rent allegation of negligent credentialing, as [the law firm] ad‐ mits,  any  confidential  factual  information  gleaned  during  those prior representations can hardly be deemed stale or ob‐ solete.” Id. at 587–88.  XYZ is easy to understand on those terms, but this case is  quite  different.  Watkins’  claims  do  not  turn  on  any  specific  facts  of  any  prior  matter  in  which  Cento  represented  Trans  Union. Watkins’ complaint does not refer to any specific prior  litigation against Trans Union in which Cento represented the  company.  In  contrast,  in  XYZ,  the  prior  malpractice  cases  Case: 17-1142 Document: 37 No. 17‐1142  Filed: 08/22/2017 Pages: 34 13 were specifically at issue in the complaint in the present liti‐ gation against the doctor. Thus, while the old and new repre‐ sentations in XYZ involved the “same transaction or legal dis‐ pute,” the same cannot be said of the old and new represen‐ tations at issue in this case. The district court did not err in  finding the disputes here to be factually distinct.2  2.  No Substantial Risk of Using Confidential Information  On Trans Union’s other route to show that disqualification  is needed, it must show a “substantial risk that confidential  factual information as would normally have been obtained in  the prior representation would materially advance the client’s  position in the subsequent matter.” Ind. R. Prof’l Conduct 1.9,  cmt.  3.  We  look  first  to  the  nature  of  the  information  Cento  gained as an attorney for Trans Union.   Some of the information Cento learned while working for  Trans Union might be categorized as general knowledge and  experience.  It  is  undisputed  that  Cento  gained  experience  while  working  for  Trans  Union.  In  the  words  of  the  district  court,  that  experience  “will  indisputably  benefit  his  current  and  future  clients.”  Watkins,  2016  WL  4919999,  at  *6.  Cento  even advertises his extensive experience with FCRA litigation  for  both  plaintiffs  and  defendants  on  his  website,  which  is  bound to raise eyebrows. However, having experience is not  the same as possessing confidential information.                                                    2 We have observed that district courts may construe their own local rules.  Even when a federal court has incorporated a state’s rules by reference,  nothing compels the federal court to adopt the state court’s interpretation  of the rule. Weibrecht v. Southern Ill. Transfer, Inc., 241 F.3d 875, 882 (7th Cir.  2001).  Case: 17-1142 14  Document: 37 Filed: 08/22/2017 Pages: 34 No. 17‐1142  It is also undisputed that general knowledge about Trans  Union policies and practices to ensure that credit reports are  accurate  is  discoverable  if  it  is  relevant  to  Watkins’s  alleged  FCRA violation. To determine the merits of Watkins’ claims,  the  court  or  jury  will  need  to  make  findings  of  fact  about  whether the procedures Trans Union used to prepare and to  check the accuracy of Watkins’ consumer report were reason‐ able. See 15 U.S.C. § 1681e(b). As in other cases in which Trans  Union has been a defendant, its policies and procedures that  allegedly resulted in the mixed file and that were used to rem‐ edy the problem will be subject to scrutiny. See, e.g., Price v.  Trans Union, LLC, 839 F. Supp. 2d 785, 790–91 (E.D. Penn. 2012)  (explaining  how  defendant  credit  reporting  agency’s  proce‐ dures result in mixed files); O’Connor v. Trans Union Corp., No.  Civ. A. 97‐4633, 1998 WL 770626, at *3 (E.D. Penn. Nov. 5, 1998)  (compelling response to interrogatory regarding procedures  used  in  handling  plaintiff’s  mixed  file).  Comment  3  makes  clear that information “disclosed to the public or to other par‐ ties adverse to the former client ordinary will not be disqual‐ ifying.” Ind. R. Prof’l Conduct 1.9, cmt. 3.   Further,  in  cases  involving  an  organizational  client  like  Trans Union, “general knowledge of the client’s policies and  practices ordinarily will not preclude a subsequent represen‐ tation.” Ind. R. Prof’l Conduct 1.9, cmt. 3. Thus, the general  knowledge  and  experience  Cento  gained  while  defending  Trans Union is not the type of confidential information with  which  Rule  1.9  is  concerned.  The  commentary  makes  clear  that Cento’s repeated representations of Trans Union in FCRA  violation cases do not preclude him from representing a new  client in a factually distinct suit even if his new representation  is adverse to his former client. Id., cmt. 2.   Case: 17-1142 No. 17‐1142  Document: 37 Filed: 08/22/2017 Pages: 34 15 Nevertheless, while some information Cento gained was  of the experience‐building sort, the district court found that  Cento also “undoubtedly did learn some truly confidential in‐ formation” while working for Trans Union. Watkins, 2016 WL  4919999, at *5. The commentary teaches that courts and law‐ yers  should  consider  the  possibility  that  confidential  infor‐ mation  “acquired  in  a  prior  representation  may  have  been  rendered obsolete by the passage of time,” and that prospect  may be “relevant in determining whether two representations  are substantially related.” Ind. R. Prof’l Conduct 1.9, cmt 3.   The district court found here that the passage of time had  removed  any  substantial  risk  that  any  confidential  infor‐ mation from years ago might advance Watkins’s litigation. We  do not find a clear error or an abuse of discretion. Not only, as  the district court noted, have some 500 opinions been issued  since Cento ceased representing Trans Union on “just one of  several provisions of the FCRA [15 U.S.C. § 1681e] that Wat‐ kins alleges Trans Union violated,” but also, as Cento points  out,  competitive  advantage  in  credit  reporting  is  created  through  technological  advances,  of  which  there  have  been  many over the last twelve years. Watkins, 2016 WL 4919999, at  *5  n.2.  In  light  of  the  technological  advancements  and  the  sheer number of FCRA claims litigated between the old and  new representations, the district court observed that it is not  “reasonable to believe that the manner in which [Trans Union]  ha[s] handled [litigation] has remained static.” Id. at *5. Over  ten years have passed since Cento last represented Trans Un‐ ion. It was not clear error for the district court to find that any  confidential information he may have gained during his prior  representation has been rendered obsolete.  Case: 17-1142 Document: 37 16  Filed: 08/22/2017 Pages: 34 No. 17‐1142  Again, a comparison to the Indiana Court of Appeals de‐ cision in XYZ is instructive. There, the court rejected the ar‐ gument that the passage of time—almost seven years—would  render obsolete the confidential factual information gained by  the attorney. It reached that conclusion because the six prior  malpractice cases remained relevant in the present litigation.  XYZ, 20 N.E.3d at 587–88. The attorney in XYZ had learned  factual information regarding specific malpractice claims that  were at issue in the new lawsuit. In this case, by contrast, at‐ torney  Cento  learned  no  factual  information  regarding  the  specific  FCRA  violation  at  issue  in  Watkins’  case  during  his  prior  representations  of  Trans  Union.  Also,  the  XYZ  doctor  was not an “organizational client,” which Trans Union was to  Cento. See Ind. R. Prof’l Conduct 1.9, cmt 3.   Because of the passage of time and the lack of any factual  overlap between the Watkins’s complaint and any prior mat‐ ter in which Cento defended Trans Union, the district court  did not abuse its discretion in applying Rule 1.9 to hold that  the Cento’s prior and present representations do not involve  the same or substantially related matters.  C.  No Mistake of Law  In an attempt to avoid this application of Rule 1.9, Trans  Union argues that the district court abused its discretion by  applying the wrong law. Trans Union relies on two disquali‐ fication cases involving former clients, both decided in a dif‐ ferent state in 1983 before the adoption of the Model Rules in  Indiana. LaSalle National Bank, 703 F.2d 252; Analytica, 708 F.2d  1263. This argument has worked for Trans Union in the past.  In  fact,  Cento  has  already  twice  lost  to  Trans  Union  on  dis‐ qualification motions decided under the reasoning of LaSalle  Case: 17-1142 Document: 37 No. 17‐1142  Filed: 08/22/2017 Pages: 34 17 National Bank and Analytica. See Childress I, 2012 WL 6728339;  Hobson, 2013 WL 2443917.  In LaSalle National Bank, we applied a “substantial relation‐ ship” test that “embod[ied] the substance of Canon 4 of the  A.B.A. Code of Professional Responsibility, which protect[ed]  the confidences of a client against disclosure and possible use  against him, and of Canon 9, which provide[d] that an attor‐ ney must avoid even the appearance of impropriety.” 703 F.2d  at 255; see also Goot, 894 F.2d at 234 (Canon 4 stated a “lawyer  should preserve the confidences and secrets of a client,” and  Canon 9 stated a “lawyer should avoid even the appearance  of  professional  impropriety.”).  The  substantial  relationship  test for disqualification in place prior to the adoption of Rule  1.9 was broad. It was satisfied if “it could reasonably be said  that during the former representation the attorney might have  acquired information related to the subject matter of the sub‐ sequent representation.” LaSalle National Bank, 703 F.2d at 255,  citing  Cannon  v.  U.S.  Acoustics  Corp.,  398  F.  Supp.  209,  223  (N.D. Ill. 1975), aff’d in part and rev’d in part, 532 F.2d 1118  (7th  Cir.  1976).  Whether  the  party  seeking  disqualification  could  prove  that  the  attorney  actually  received  confidential  information  during  his  employment  was  irrelevant.  LaSalle  National Bank, 703 F.2d at 255, citing Schloetter, 546 F.2d at 710;  see also Analytica, 708 F.2d at 1266 (“It is irrelevant whether  [the  lawyer]  actually  obtained  such  [confidential]  infor‐ mation.”).3                                                     3 We used a three‐part test to determine whether a substantial relationship  was present. “First, the trial judge must make a factual reconstruction of  the scope of the prior legal representation. Second, it must be determined  whether it is reasonable to infer that the confidential information allegedly  given  would have  been given  to a  lawyer representing  a  client  in  those  Case: 17-1142 Document: 37 18  Filed: 08/22/2017 Pages: 34 No. 17‐1142  In  the  Childress  litigation,  the  magistrate  and  district  judges applied to Cento the substantial relationship test out‐ lined in LaSalle National Bank and Analytica. Childress I, 2012  WL 6728339, at *3; Childress v. Trans Union, LLC (Childress II),  No. 1:12‐CV‐00184‐TWP‐DML, 2013 WL 1828050, at *3 (S.D.  Ind. Apr. 30, 2013). The district judge found that Cento acted  as a practical extension of Trans Union’s in‐house counsel and  that his extended representation of Trans Union in hundreds  of  cases  established  a  substantial  relationship  between  his  prior representation of Trans Union and his representation of  Childress  in  the  pending  litigation.  Childress  II,  2013  WL  1828050, at *4–5. The district court in Hobson undertook a sim‐ ilar analysis in denying Cento’s request for discovery and mo‐ tion to stay the disqualification proceedings. Hobson, 2013 WL  2443917.   The  Childress  and  Hobson  opinions  did  not  address  the  commentary  to  Rule  1.9.  Instead,  the  Hobson  court  empha‐ sized  that  the  Seventh  Circuit’s  substantial  relationship  test  embodied Canons 4 and 9 of the A.B.A. Code of Professional  Responsibility.  Id.  at  *2,  citing  Westinghouse,  588  F.2d  at  244.  The  Childress  district court emphasized in its order denying  Cento’s  motion  to  reconsider  that  LaSalle  National  Bank  and  Analytica  decisions  “remain  good  law  to  the  extent  they  set  forth the well‐regarded Seventh Circuit approach to the sub‐ stantial relationship standard.” Childress v. Trans Union, LLC                                                    matters. Third, it must be determined whether that information is relevant  to  the  issues  raised  in  the  litigation  pending  against  the  former  client.”  LaSalle National bank, 703 F.2d at 255–56, citing Westinghouse Electric Corp.  v. Gulf Oil Corp., 588 F.2d 221, 225 (7th Cir. 1978). The satisfaction of the  test triggered a rebuttable presumption that the attorney received confi‐ dential information during the prior representation. Id. at 256.   Case: 17-1142 Document: 37 No. 17‐1142  Filed: 08/22/2017 Pages: 34 19 (Childress  III),  No.  1:12‐CV‐00184‐TWP‐DML,  2013  WL  3071273, at *2 (S.D. Ind. June 18, 2013).   The  problem  is  that  the  substantial  relationship  test  ap‐ plied in Childress and Hobson embodied Canons 4 and 9 of the  A.B.A. Code. The Code and those canons no longer governed  Indiana attorneys at the time of the Childress and Hobson deci‐ sions  and  no  longer  govern  them  now.  Trans  Union  argues  that  the  district  court  here  “applied  the  wrong  stand‐ ard … based on Indiana Rule 1.9” and “improperly relied on  language in the Comments … to fashion a new … test for at‐ torney disqualification.” We disagree. The district court cor‐ rectly  looked  to  Rule  1.9  and  its  commentary  adopted  after  LaSalle National Bank “to clarify the contours” of the substan‐ tial relationship test. See Shelton v. Trans Union, LLC, No. 1:16‐ cv‐01278‐SEB‐MJD, slip op. at 4 (S.D. Ind. Dec. 19, 2016).4  Trans Union’s reliance on LaSalle National Bank and other  federal precedents pre‐dating Indiana’s adoption of Rule 1.9  is not persuasive. Both state and federal district courts look to  Rule 1.9’s commentary for guidance in deciding disqualifica‐ tion issues based involving former clients. The commentary  to Rule 1.9 states plainly that to require disqualification of an                                                    4  In  Shelton,  another  recent  case  in  which  Cento  represented  a  client  against Trans Union, Judge Barker rejected Trans Union’s argument that  Judge Lawrence’s reliance on the commentary to Rule 1.9 in his Watkins  opinion created a new substantial relationship test. Shelton, No. 1:16‐cv‐ 01278‐SEB‐MJD, slip op. at 3. Rather than create a new substantial rela‐ tionship test, Judge Barker observed, Rule 1.9 was adopted after LaSalle  National Bank to clarify the contours of the test and provided guidance for  its  application.  Id.  at  4.  Judge  Barker  agreed  with  Judge  Lawrence  that  Cento should not be disqualified from representing clients in new cases  against Trans Union. Id. at 5.  Case: 17-1142 20  Document: 37 Filed: 08/22/2017 Pages: 34 No. 17‐1142  attorney  from  a  new  representation  against  a  former  client,  either the old and new matters must be the same factual dis‐ pute or there must be a substantial risk of confidential infor‐ mation being used to materially advance the new client’s in‐ terests. Cento’s old and new representations do not amount to  “a changing of sides” in a specific legal dispute. See Ind. R.  Prof’l Conduct, cmt. 2. There is no specific factual overlap be‐ tween  Cento’s  prior  representations  of  Trans  Union  and  his  representation  of  Watkins.  The  general  knowledge  Cento  gained while working at Trans Union is not the type of confi‐ dential information that poses a substantial risk of materially  advancing Watkins’ claims. Moreover, more than a decade has  passed since Cento was privy to Trans Union’s internal poli‐ cies and practices or legal strategy—confidential or otherwise.   Accordingly,  the  decision  of  the  district  court  is  AFFIRMED.           Case: 17-1142 Document: 37 Filed: 08/22/2017 No. 17-1142 Pages: 34 21 SYKES, Circuit Judge, concurring in part and dissenting in part. I agree with my colleagues that this disqualification dispute is governed by Rule 1.9 of the Indiana Rules of Professional Conduct, not the old common-law standard derived from Canons 4 and 9 of the ABA’s Model Code of Professional Responsibility and elaborated in LaSalle National Bank v. Lake County, 703 F.2d 252 (7th Cir. 1983), and Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir. 1983). I therefore join Parts I, IIA, and IIC of the majority opinion. In these sections my colleagues explain the background of this case and the evolution of the legal standard. I agree and have nothing to add about the current state of Indiana and circuit law. I part company with my colleagues over the consequences of Rule 1.9 for this case. The rule, as expounded in the commentary, prohibits John Cento from suing his former client Trans Union, LLC, the national credit-reporting agency, for alleged violations of the Fair Credit Reporting Act (“FCRA” or “the Act”). Accordingly, I do not join Part IIB or the mandate to affirm. I would reverse and remand with instructions to disqualify Cento. I. For almost five years (from 2001 through July 2005), Cento served as Trans Union’s outside litigation counsel, first with Katz & Korin, P.C., and later with Schuckit & Associates, P.C. In that capacity Cento defended the company in hundreds of FCRA suits. For at least two and a half of those five years, Cento worked nearly exclusively on FCRA cases brought against Trans Union. In total, Cento billed Trans Union for approximately 4,200 hours of work on some Case: 17-1142 22 Document: 37 Filed: 08/22/2017 Pages: 34 No. 17-1142 250 cases filed by consumers against the agency alleging violations of the Act. Most of this litigation involved claims alleging violations of 15 U.S.C. §§ 1681e(b) and 1681i. Briefly, § 1681e(b) requires credit-reporting agencies to follow “reasonable procedures” to assure the accuracy of the information they report, and § 1681i(a)(1)(A) requires the agencies to conduct a “reasonable reinvestigation” if a consumer disputes the completeness or accuracy of the information in his file. Having spent years and thousands of billed hours defending the reasonableness of Trans Union’s credit-reporting procedures and reinvestigations, Cento now sues his former client alleging violations of these same statutory provisions. Cento’s role as Trans Union’s outside FCRA counsel was not limited to serving as the agency’s litigation counsel. Cento also supervised other lawyers working on Trans Union cases, advised Trans Union on general litigation strategy in FCRA matters, and counseled his client on how to avoid FCRA risk. I’ll have more to say about the scope of Cento’s representation later. For now it’s enough to note that it was lengthy, extensive, and undeniably relevant to the claims in the present suit. Cento last represented Trans Union in July 2005 when he left Schuckit & Associates for another firm. Later, in 2013, he formed Cento Law, a boutique specialty firm that represents consumers in FCRA suits against credit-reporting agencies. The firm’s website touts the qualifications of its attorneys to litigate FCRA claims against the major credit-reporting agencies—including, as my colleagues have noted, their “years of prior representation of two of the three national consumer reporting agencies, Trans Union and Equifax.” Case: 17-1142 No. 17-1142 Document: 37 Filed: 08/22/2017 Pages: 34 23 Majority Op. at p. 3. My colleagues go only so far as to say that this advertisement “is bound to raise eyebrows.” Id. at p. 13. I go further. Cento is hustling litigation business against Trans Union by implying that he has useful inside information about his former client’s operations that would advance a prospective client’s cause. Even before he set up his own practice specializing in consumer suits against credit-reporting agencies, Cento had changed sides in FCRA litigation and begun to litigate these claims against his former client. In January 2012 he filed a proposed FCRA class action against Trans Union and immediately faced a disqualification motion. He lost; the district court removed him from the case. Childress v. Trans Union, LLC, No. 1:12-cv-00184-TWP-DML, 2012 WL 6728339 (S.D. Ind. Dec. 28, 2012) (magistrate judge’s decision disqualifying Cento); id., 2013 WL 1828050 (S.D. Ind. Apr. 30, 2013) (district judge’s decision overruling Cento’s objections to disqualification). In 2013 he was again disqualified in another FCRA suit against Trans Union. Hobson v. Trans Union, LLC, No. 1:13-cv00054-JD-RBC (N.D. Ind. Nov. 21, 2013), ECF No. 63 (magistrate judge’s decision disqualifying Cento; the suit was then dismissed by the parties with prejudice). The present FCRA suit on behalf of plaintiff Richard Watkins is not materially different, but this time Cento persuaded a district judge to let him proceed against his former client. My colleagues affirm that decision. With respect, I disagree. They and the district judge have overlooked key parts of the commentary to Rule 1.9 and in doing so have misapplied the rule. The result does regrettable damage to the professional norms that hold lawyers to a continuing duty to maintain the confidences acquired from Case: 17-1142 Document: 37 Filed: 08/22/2017 24 Pages: 34 No. 17-1142 former clients and to refrain from subsequent professional engagements that exploit those confidences against the former client. II. Rule 1.9, entitled “Duties to Former Clients,” provides in relevant part: 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. IND. R. OF CT., R. OF PROF’L CONDUCT 1.9(a) (2016). The commentary to the rule makes clear that after a client-lawyer relationship ends, “[the] lawyer has certain continuing duties [to the former client] with respect to confidentiality and conflicts of interest and thus may not represent another client except in conformity with this Rule.” Id. cmt. 1. Like most problems in professional ethics, sorting out where the lawyer’s duties lie under this rule is a highly contextual inquiry. The commentary contains instructions, illustrations, and guideposts to help lawyers and judges properly apply the rule. To begin, the commentary explains that “[t]he scope of a ‘matter’ for purposes of this [r]ule depends on the facts of a particular situation or transaction” and “[t]he lawyer’s involvement in a matter can also be a question of degree.” Id. cmt. 2. That does not tell us much, but it does convey the idea that a “matter” for purposes of the rule is not a narrow or static concept. As applied to Case: 17-1142 No. 17-1142 Document: 37 Filed: 08/22/2017 Pages: 34 25 litigators, a “matter” may be a single case or it may extend more broadly, depending on the circumstances. As my colleagues have noted, Comment 2 goes on to say that “a lawyer who recurrently handled a type of problem for a former client is not precluded from later representing another client in a factually distinct problem of that type even though the subsequent representation involves a position adverse to the prior client.” Id. At first blush this seems to give Cento the green light to represent any FCRA claimant in a suit against Trans Union as long as the case is factually distinct from those he previously handled on behalf of his former client. But there is a qualifier. In all cases “[t]he underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question.” Id. There’s no question that Cento has changed sides in FCRA matters. It’s not controversial for a litigator to shift from one side to the other in a particular area of litigation. Cento is certainly free to use the expertise he gained as Trans Union’s FCRA counsel to represent consumers in cases against other creditreporting agencies. But Cento has changed sides in FCRA litigation involving his former client—from defending Trans Union in § 1681e(b) and § 1681i litigation to prosecuting these claims on behalf of consumers in suits against his former client. Yes, this case is factually distinct from the others; literally speaking, it is not the “same matter” as any of the other cases. That does not, by itself, end the ethical inquiry. The disqualification question turns on whether the present case is “substantially related” to the 250 or so FCRA Case: 17-1142 Document: 37 26 Filed: 08/22/2017 Pages: 34 No. 17-1142 cases Cento handled for Trans Union. 1 Comment 3 covers this subject, explaining that [m]atters are “substantially related” for purposes of this [r]ule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter. Id. cmt. 3 (emphasis added). This suit does not involve the “same transaction or legal dispute” as the prior litigation, though it does involve the identical type of legal action. As I’ve already noted, however, Comment 2 tells us that a lawyer who recurrently handled matters of a certain type for a client is not automatically foreclosed from handling a factually different matter of the same type against the client after the relationship ends. Still, Cento must be disqualified from this suit if the nature and scope of his prior work for Trans Union creates a substantial risk that Trans Union’s confidential information—that is, the confidential client information that Cento would have acquired in the ordinary course of a representation of that type—would materially advance Watkins’s position. The commentary provides several examples to illustrate how this general principle applies in actual practice: For example, a lawyer who has represented a businessperson and learned extensive private 1 Watkins’s position is obviously materially adverse to Trans Union’s, so that element of Rule 1.9 is met. Case: 17-1142 Document: 37 Filed: 08/22/2017 No. 17-1142 Pages: 34 27 financial information about that person may not then represent that person’s spouse in seeking a divorce. Similarly, a lawyer who has previously represented a client in securing environmental permits to build a shopping center would be precluded from representing neighbors seeking to oppose rezoning of the property on the basis of environmental considerations; however, the lawyer would not be precluded, on the grounds of substantial relationship, from defending a tenant of the completed shopping center in resisting eviction for nonpayment of rent. Id. These examples clarify that a lawyer who acquires confidential client information of a particular type (e.g., a client’s financial information or information about a client’s environmental compliance) owes a continuing duty to the client after the relationship ends: He must keep that information confidential and may not represent a new client if there is a substantial risk that the information would materially advance the new client’s position in the subsequent matter. When a substantial risk of information exploitation exists, the duties owed to the old and new client are in conflict, and the new representation is prohibited even if the subsequent matter is factually distinct. As Trans Union’s litigation counsel in hundreds of FCRA cases spanning almost five years, Cento necessarily acquired comprehensive confidential information about his client’s credit-reporting and reinvestigation operations, as well as its litigation and settlement strategies, risk-avoidance protocols, Case: 17-1142 28 Document: 37 Filed: 08/22/2017 Pages: 34 No. 17-1142 and overall FCRA compliance. The present suit—like most of the suits Cento defended for Trans Union—alleges that the company failed to follow reasonable credit-reporting and reinvestigation procedures in violation of §§ 1681e(b) and 1681i. Having acquired extensive private information about Trans Union’s past compliance with §§ 1681e(b) and 1681i, Cento cannot now represent Watkins in this suit against Trans Union for violating those same statutes. In the ordinary course of the prior representation, Trans Union would have given him unfettered access to all internal information necessary to defend it against liability under §§ 1681e(b) and 1681i—information that is undoubtedly relevant to and would advance Watkins’s position in the present suit. The risk of exploitation of the former client’s confidences is both real and substantial. Rule 1.9 requires his disqualification. The district judge’s contrary conclusion rests largely on this passage in Comment 3: Information that has been disclosed to the public or to other parties adverse to the former client ordinarily will not be disqualifying. Information acquired in a prior representation may have been rendered obsolete by the passage of time, a circumstance that may be relevant in determining whether two representations are substantially related. In the case of an organizational client, general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation … . Id. My colleagues also rely heavily on this passage. See Majority Op. at pp. 13–15. Fair enough, but their analysis omits what comes next in the commentary: Case: 17-1142 Document: 37 Filed: 08/22/2017 No. 17-1142 Pages: 34 29 [O]n the other hand, knowledge of specific facts gained in a prior representation that are relevant to the matter in question ordinarily will preclude such a representation. A former client is not required to reveal the confidential information learned by the lawyer in order to establish a substantial risk that the lawyer has confidential information to use in the subsequent matter. A conclusion about the possession of such information may be based on the nature of the services the lawyer provided the former client and information that would in ordinary practice be learned by a lawyer providing such services. Id. (emphases added). This part of the commentary adds two important points. First, the test for disqualification focuses on the nature of the prior representation and the specific factual information that a lawyer could be expected to acquire from his client in the ordinary course of providing legal services of that type. In other words, the test is an objective one. The former client is not required to divulge the specific information it disclosed to the lawyer in order to establish a substantial risk that the information would advance the new client’s position in the subsequent matter. 2 The inquiry instead looks to the nature of the services the lawyer provided and the kind of information a lawyer normally would learn in the ordinary course of a representation of that type. 2 Because a former client need not reveal the specific confidential information it gave to the lawyer, the discovery order in this case was questionable. Case: 17-1142 30 Document: 37 Filed: 08/22/2017 Pages: 34 No. 17-1142 Second, disqualification is required if the confidential client information the lawyer normally would have acquired in the prior representation is relevant to the subsequent representation. If the information is relevant to the new matter, then a substantial risk of exploitation exists. The lawyer’s continuing duty to keep the former client’s confidences conflicts with his duty to zealously represent the interests of the new client. The two examples given in the commentary confirm this understanding of the rule. See supra pp. 26–27. Putting all these elements together, Cento is disqualified from this case. For an extended period of time he served as Trans Union’s FCRA litigation counsel and in that capacity was deeply involved in defending the agency in hundreds of suits alleging violations of §§ 1681e(b) and 1681i. Legal services of this nature necessarily require broad access to confidential factual information about the client’s datacollection and credit-reporting operations, its protocols for ensuring the accuracy of information in credit reports, information relating to the reasonableness of its reinvestigations, and the client’s litigation and dispute-resolution strategies. An engagement of this nature and scope also necessarily entails extensive confidential communication with the client’s managerial and other staff—as well as inhouse counsel—regarding operational and transactional facts and FCRA compliance and risk-avoidance more generally. My colleagues maintain that much of this information was discoverable and would have been disclosed in the prior litigation. Majority Op. at p. 14. They also find no error in the district judge’s conclusion that any remaining confidential information has become obsolete in the 12 years since Case: 17-1142 No. 17-1142 Document: 37 Filed: 08/22/2017 Pages: 34 31 Cento last represented Trans Union. Id. at p. 15. I do not doubt that some of this information would have been turned over in discovery in the prior litigation, and a subset of that discovery material may have found its way into the public court record. But not all. The parties agree that protective orders were used in some cases. And some of the confidential information Cento can be presumed to have acquired would not have been subject to discovery at all—at a minimum, the factual and strategic information gleaned from privileged communications with Trans Union personnel, risk analyses, and settlement strategies. The district judge also concluded that any confidential client information that Cento acquired from Trans Union is surely obsolete due to the passage of time, owing to unspecified “technological advances” and the “sheer number of FCRA claims litigated between the old and new representations.” Id. My colleagues find no abuse of discretion, but I’m not so sanguine. Many of the key Trans Union personnel remain with the company, and Cento worked with them in the prior representation to develop factual records, prepare and defend depositions, devise litigation strategies, and analyze settlement options. The information exchanged in these communications is clearly confidential. We have no nonspeculative basis to declare it irrelevant or obsolete. Quite the contrary. Now that he’s been given the goahead to represent Watkins in this suit, Cento may depose some of the same Trans Union personnel he previously prepared and defended in depositions. That he has inside information about their past testimony is a strategic advantage and far from obsolete. He may cross-examine them in court or sit across from them at the negotiating table. Case: 17-1142 32 Document: 37 Filed: 08/22/2017 Pages: 34 No. 17-1142 Having been privy to their thinking about the strengths and weaknesses of prior FCRA cases against Trans Union, he can now use that information for Watkins’s benefit, either in court or in settlement negotiations. It’s simply unreasonable to conclude that in nearly five years as Trans Union’s FCRA litigation counsel—personally handling hundreds of cases— Cento acquired no confidential Trans Union information that has any continuing relevance to this FCRA suit against his former client. Finally, I disagree with my colleagues that comparing this case to XYZ, D.O. v. Sykes, 20 N.E.3d 582 (Ind. Ct. App. 2014), supports the district judge’s no-disqualification ruling. XYZ was a case of imputed disqualification. From 2003 to 2005, Kathleen Clark represented a doctor in six malpractice suits, initially as a sole practitioner and later with a firm. Id. at 583–84. Her representation of the doctor ceased in April 2005 when she left for another firm, and in February 2010 she again changed firms. Id. In mid-2012 Clark did some initial intake work for her firm in a new malpractice case against the doctor. Although she turned her work over to a colleague and he assumed responsibility for the case, the doctor and hospital moved to disqualify the entire firm. Id. The trial judge denied the motion, but on interlocutory appeal the Indiana Court of Appeals reversed. Applying Rule 1.9, the appellate court first noted that the case involved a malpractice claim against the doctor and a claim against the hospital for negligent credentialing “based in part upon the [h]ospital’s alleged failure to adequately investigate the circumstances surrounding those six prior malpractice cases in which Clark represented the [d]octor.” Id. at 587. Although the cases did not literally involve the Case: 17-1142 No. 17-1142 Document: 37 Filed: 08/22/2017 Pages: 34 33 “same transaction,” they were nonetheless “substantially related for the purposes of Rule 1.9.” Id. The new representation involved “one claim of the same subject matter as Clark’s prior representation[] of [the] [d]octor, and another claim that grew out of and is directly related to Clark’s prior representation[] of [the] [d]octor.” Id. In these circumstances, the court held, “there is a substantial risk that confidential factual information as would normally have been obtained in the prior representation[] would materially advance the [p]laintiff’s position in the present case.” Id. The firm argued that the passage of time—about seven years—rendered the confidential information obsolete. The court quickly dispatched that argument: “If the six prior medical malpractice cases remain relevant regarding the current allegation of negligent credentialing, as [the firm] admits, any confidential factual information gleaned during those prior representations can hardly be deemed stale or obsolete.” Id. at 587–88. Finally, the court held that because Clark had been the doctor’s primary counsel in the prior cases, the presumption that she shared his confidences within her new firm was irrebuttable; the entire firm was disqualified. Id. at 588–89. My colleagues are quite right that in XYZ the attorney’s prior representation of the doctor was directly relevant to the negligent-credentialing claim against the hospital. Majority Op. at p. 12. That made the conflict of interest fairly obvious, but it doesn’t make the decision inapplicable here. The important lesson of XYZ for this case is the court’s “substantial risk” analysis, which was not limited to the negligentcredentialing claim. Case: 17-1142 34 Document: 37 Filed: 08/22/2017 Pages: 34 No. 17-1142 Because the nature and scope of Cento’s prior work as Trans Union’s FCRA counsel was so extensive, there is a substantial risk—even after 12 years—that the confidential client information he learned in the prior representation would materially advance Watkins’s position in this litigation. We should reverse with instructions to grant the disqualification motion. I respectfully dissent.

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