Unick, et al. v. Prescott Valley, Town of, et al.

Filing 43

ORDER denying 37 Motion to Disqualify Counsel. Signed by Judge David G Campbell on 5/9/2011.(NVO)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiffs,
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vs.
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Town of Prescott Valley, a municipal
corporation organized under the State of )
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Arizona, et al.,
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Defendants.
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Joseph R. Unick, et al.,

No. CV10-8116 PCT-DGC

ORDER

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Plaintiffs move to disqualify Defendants’ counsel in part (Doc. 37), Defendants

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oppose (Doc. 40), and Plaintiffs did not file a reply. For the reasons that follow, the Court

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will deny the motion.1

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Defendants include the Town of Prescott Valley, sixteen municipal officials, and other

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unknown parties. Doc. 12. Individual defendants are sued in both their official and

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individual capacities. Id. at 2:11-13 (“The conduct . . . of the Town and its agents

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(hereinafter ‘the Town’ and/or the ‘Defendants’) . . . included acts of the Agents in both their

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‘individual’ and ‘official’ capacities.”); id. at 3-8. The complaint alleges two counts: RICO

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claims under federal and state law, and civil rights violations. Id. at 61-65. All defendants

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are represented by the same two attorneys who are part of the same law firm. Doc. 40.

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Defendants’ request for oral argument is denied because the issues have been fully
briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 78(b);
Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).

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Plaintiffs assert that some of the defendants are being sued in part in their individual

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capacities. Doc. 37 at 2:23-24. For example, it is argued the individual defendants have

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RICO liability that is distinct from the liability of defendants as municipal officials. Id. at

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3. As a result, Plaintiffs move to disqualify Defendants’ attorneys from representing them

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as to claims where they are sued in their individual capacities. Id. at 2. Plaintiffs argue that

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under the Arizona Constitution, public funds may not be used to pay for litigation of non-

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public defendants. Id. at 8. Plaintiffs also argue that an irreconcilable conflict of interest

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exists between defendants as public officials and some or all defendants as private persons.

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Id. at 3-4. As an example, Plaintiffs assert that the Town would be presumed to have ratified

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co-defendants’ RICO actions if it pays for their defense, thereby making it liable for private

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defendants’ conduct. Id. at 9.

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Defendants respond that Plaintiffs have no standing to challenge how the municipality

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spends its money. Doc. 40 at 4. Defense counsel also assert that they have met with all

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defendants and certify there is no basis for concluding that representation of any defendant

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is adverse to any other defendant. Id. at 3.

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Plaintiffs rely on the Arizona Constitution art. 9, § 7 (“Gift Clause”) for the

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proposition that the municipality may not pay defendants’ private litigation costs. Doc. 37

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at 8. Plaintiffs also cite to Turken v. Gordon, 224 P.3d 158, 165 (Ariz. 2010). Id. at 9. In

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Turken, the Arizona Supreme Court reaffirmed that taxpayers may sue under the Gift Clause,

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and clarified the elements of the cause of action. The complaint in this case does not appear

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to assert a claim under the Gift Clause, and Plaintiffs cite no case for the proposition that the

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Gift Clause may serve as a basis for disqualifying attorneys.

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As to the conflicts argument, Plaintiffs cite three cases: In re County of Los Angeles,

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223 F.3d 990, 995 (9th Cir. 2000), Optyl Eyewear Fashion v. Style Companies, LTD., 760

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F.2d 1045, 1050 (9th Cir. 1985), and IBM Corp. v. Levin, 579 F.2d 271, 279 (3d Cir. 1978).

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County of Los Angeles and Levin involve conflicts that were alleged to prejudice the party

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seeking disqualification. Plaintiffs make no such argument here. Optyl Eyewear involved

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testimonial conflicts where the moving party asserted opposing counsel might be called to
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testify against their clients. The Ninth Circuit upheld the district court’s denial of the motion

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to disqualify and also upheld the grant of sanctions against the moving party for seeking

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disqualification in bad faith. Optyl Eyewear, 760 F.2d at 1052. Plaintiffs also cite Ethical

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Rule 1.7, but provide no case law applying ER 1.7 to facts similar to this case.

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As the moving party seeking to disqualify, Plaintiffs have the burden of providing the

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Court with sufficient legal and factual arguments to support their position. They have failed

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to do so.

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IT IS ORDERED that Plaintiffs’ motion to disqualify (Doc. 37) is denied.

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DATED this 9th day of May, 2011.

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