Hammer et al v. City of Sun Valley et al

Filing 143

MEMORANDUM DECISION AND ORDER RE: PLAINTIFFS MOTION TO OVERRULE ASSERTIONS OF ACCOUNTANT-CLIENT AND ATTORNEY-CLIENT PRIVILEGE AND TO COMPEL RESPONSES (Docket No. 131 ) DEFENDANTS MOTION TO DISQUALIFY JAMES R. DONOVAL (Docket No. 137 ) - IT IS HEREB Y ORDERED that: 1. Plaintiffs Motion to Overrule Assertions of Accountant-Client and Attorney-Client Privilege and to Compel Responses (Docket No. 131) is DENIED, without prejudice; and 2. Defendants Motion to Disqualify James R. Donoval (Docket No. 137) is DENIED. Defendants may renew their objections to Plaintiff Donovals representation of Plaintiff Hammer at trial, if circumstances support such objections. Signed by Judge Ronald E. Bush. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
DISTRICT OF IDAHO
SHARON R. HAMMER and JAMES R.
DONOVAL, husband and wife,

Case No.: 1:13-cv-211-EJL
MEMORANDUM DECISION AND
ORDER RE:

Plaintiffs,
vs.
CITY OF SUN VALLEY; NILS RIBI, in his
individual and official capacity; and DeWAYNE
BRISCOE, in his individual and official capacity,

PLAINTIFFS’ MOTION TO
OVERRULE ASSERTIONS OF
ACCOUNTANT-CLIENT AND
ATTORNEY-CLIENT PRIVILEGE
AND TO COMPEL RESPONSES
(Docket No. 131)

Defendants.

DEFENDANTS’ MOTION TO
DISQUALIFY JAMES R. DONOVAL
(Docket No. 137)
Now pending before the Court are (1) Plaintiffs’1 Motion to Overrule Assertions of
Accountant-Client and Attorney-Client Privilege and to Compel Responses (Docket No. 131),
and (2) Defendants’ Motion to Disqualify James R. Donoval (Docket No. 137). Having
carefully considered the record and otherwise being fully advised, the Court enters the following
Memorandum Decision and Order:
I. BACKGROUND
This action is lamentably over five years old and, while a portion of that time was
devoted to an appeal before the Ninth Circuit, its crawl toward a conclusion here is partly

1

Questions persist as to who, exactly, is a Plaintiff in this action. For example, at times,
Plaintiffs’ filings (including certain of those involved here) contain a caption that references only
Plaintiff Sharon Hammer. See also, e.g., Defs.’ Resp. to Mot. to Re-Open Disc., p. 1 n.1 (Docket
No. 113) (“It is unclear and questionable why Plaintiff Hammer has unilaterally modified the
caption in this case to exclude Plaintiff Donoval in this matter.”). To be clear, Plaintiffs Hammer
and Donoval are the Plaintiffs in this action and, unless otherwise indicated, “Plaintiff” and
“Plaintiffs” are used interchangeably herein – any technical distinction/difference is immaterial
for the purposes of this Memorandum Decision and Order.
MEMORANDUM DECISION AND ORDER - 1

attributable to the constellation of claims pursued elsewhere and, in some measure, the parties’
difficulty in agreeing upon the best way to focus the case for trial. These Motions are a
continuation of that pattern, with (1) Plaintiffs requesting that certain objections (based on the
accountant-client and attorney-client privileges) raised during the May 18, 2018 deposition of
John Curran be overruled and that Mr. Curran be re-deposed; and (2) Defendants seeking the
disqualification of Plaintiff James R. Donoval (a lawyer) from further representing Plaintiff
Sharon Hammer (Mr. Donoval’s wife) in this lawsuit. The relevant factual backdrop for each
such Motion is set forth in chronological order as follows:
A.

Plaintiffs’ Motion to Overrule Assertions of Accountant-Client and Attorney-Client
Privilege and to Compel Responses (Docket No. 131)
1.

Plaintiffs filed this case on May 3, 2013, asserting 14 Counts against Defendants,

seeking relief under various federal and state statutes related to Plaintiff Hammer’s termination
as the Sun Valley City Administrator in January 2012. See Compl. (Docket No. 1).
2.

On February 5, 2014, Defendants filed a Motion for Judgment on the Pleadings,

requesting dismissal of certain identified Counts within Plaintiffs’ Complaint. See Defs.’ 12(c)
Mot. for J. on the Pldgs. (Docket No. 18).
3.

On June 17, 2014, U.S. District Judge Edward J. Lodge granted Defendants’

Motion for Judgment on the Pleadings and dismissed Counts 1-8, 10, and 12-14 of Plaintiffs’
Complaint (leaving Counts 9 and 11 for trial). See 6/17/14 MDO (Docket No. 41).
4.

On June 27, 2014, Defendants moved for summary judgment on Counts 9 and 11

of Plaintiffs’ Complaint. See Defs.’ MSJ (Docket No. 47).
5.

On July 28, 2015, Judge Lodge granted Defendants’ Motion for Summary

Judgment, dismissed Counts 9 and 11 of Plaintiffs’ Complaint, and dismissed the case in its
entirety. See 7/28/15 MDO & J. (Docket Nos. 71 & 72).

MEMORANDUM DECISION AND ORDER - 2

6.

On August 11, 2015, Plaintiffs filed a Motion for Reconsideration of Entry of

Summary Judgment (amended on August 28, 2015) related to the dismissal of her liberty
interest, stigma plus claims (Count 9). See Mots. to Recon. (Docket Nos. 77 & 81).
7.

On August 27, 2015, Plaintiffs filed a Notice of Appeal, appealing Judge Lodge’s

above-referenced June 17, 2014 and July 28, 2015 Orders (granting Defendants’ Motion for
Judgment on the Pleadings and Motion for Summary Judgment). See Not. of Appeal (Docket
No. 80).
8.

On January 29, 2016, Defendants issued a Notice of Intent to Subpoena

Documents from Third-Party, informing Plaintiffs’ counsel that, on February 1, 2016,
Defendants intended to serve non-party Hagen, Streiff, Newton & Oshiro (“HSNO”) a subpoena
for production of documents. See Not. of Intent to Subpoena Docs. from Third-Party, attached
as Ex. D to Emergency Mot. to Quash Third-Party Subpoena (Docket No. 87). HSNO is an
accounting firm that Plaintiff Hammer sued for defamation in a separate case in Idaho state court
related to allegedly-false statements made in a forensic audit report issued by HSNO pertaining
to Plaintiff Hammer’s conduct as the Sun Valley City Administrator. See Emergency Mot. to
Quash Third-Party Subpoena, p. 3 (Docket No. 87).
9.

On February 1, 2016, Plaintiffs filed an Emergency Motion to Quash Third-Party

Subpoena, requesting that Defendants’ subpoena to HSNO be quashed. See id. at p. 5 (“As (a)
the entire case herein has been dismissed subject only to the Motion to Reconsider, (b) all
discovery in the matter has been closed since at least May 14, 2014, and (c) the documents being
sought by the Defendant are subject to the confidentiality provision of the Settlement Agreement,
[Plaintiffs] seek that the Court quash the Subpoena pursuant to its authority under FRCP 45.”).
10.

On March 10, 2016, Judge Lodge denied Defendants’ Motions for

Reconsideration. See 3/10/16 MDO (Docket No. 94).
MEMORANDUM DECISION AND ORDER - 3

11.

On May 11, 2016, Defendants withdrew their subpoena to HSNO, indicating

nonetheless that they “do not intend to waive any right to re-issue the subpoena if it becomes
necessary to do so based on arguments made by Plaintiff in the pending appeal.” Defs.’ Not. of
Withdrawal of Third-Party Subpoena, p. 1 (Docket No. 99). That same day, the Court denied
Plaintiffs’ Emergency Motion to Quash Third-Party Subpoena as moot. See 5/11/16 Docket
Entry Order (Docket No. 100).
12.

On August 11, 2017, the Ninth Circuit, affirmed, in part, reversed, in part, and

remanded the action back to this Court, stating:
To conclude, we affirm the district court’s grant of the 12(c) motion; the denial of
Hammer’s motion to convert; and the denial of Hammer’s motion to amend. We
reverse the district court’s judgment of Hammer’s unconstitutional bias claim;
liberty interest, stigma plus claim; the claims against Ribi and Briscoe in their
individual capacities; Donoval’s claim; and the entry of costs . . . .
AFFIRMED in part, REVERSED in part, and REMANDED.
8/11/17 Mem., p. 4 (Docket No. 104) (emphasis in original).
13.

On October 5, 2017, Judge Lodge directed the parties “to confer with one another

and jointly file a notice with the Court indicating how the parties would propose or intend to
proceed in light of the Ninth Circuit’s decision.” 10/5/17 Order, p. 1 (Docket No. 107).
14.

On November 1, 2017, the parties filed a Joint Notice of Intent to Proceed. See

Joint Not. (Docket No. 108). The parties’ Notice spoke to the need for “additional discovery,”
stating in relevant part:
Previously, Defendant filed a third-party subpoena to HSNO seeking supplemental
materials that did not exist during the original period of discovery that Plaintiffs
moved to quash. Ultimately, Defendants withdrew that subpoena due to the Court
dismissing Plaintiffs’ motion for reconsideration. Now that the mandate has
revived certain claims, the parties have agreed that the subpoena can now proceed
without objection, and the discovery can be produced by HSNO. Further, any
depositions or supplemental discovery pertaining to the subject matter of the HSNO
subpoena would also be permitted.
Id. at pp. 1-2 (emphasis added).
MEMORANDUM DECISION AND ORDER - 4

15.

On November 22, 2017, Judge Lodge issued an Amended Scheduling Order,

memorializing the parties’ preferences as relayed in the Notice and indicating that “[t]he
additional discovery anticipated and as stated in the Notice shall be completed by May 22,
2018.” See 11/22/17 Am. Sched. Order, p. 1 (Docket No. 109).
16.

On May 3, 2018 (presumably following the response to Defendants’ renewed

subpoena to HSNO), Plaintiffs subpoenaed John Curran to appear and testify at a deposition on
May 18, 2018 in Seattle, Washington. See Subpoena to Test, attached as Ex. N to Mem. in Supp.
of Mot. to Overrule and Compel (Docket No. 131, Att. 16). Mr. Curran was the principal HSNO
accountant responsible for the HSNO forensic audit report. See Mem. in Supp. of Mot. to
Overrule and Compel, p. 3 (Docket No. 131).
17.

Mr. Curran’s deposition took place on May 18, 2018 in Seattle, Washington,

during which time Plaintiffs claim that Defendants’ and Mr. Curran’s attorneys made numerous
objections to matters related to the HSNO forensic audit report, and refused to allow Mr. Curran
to answer questions related to the content of discussions he held with various Sun Valley
officials and individuals that he interviewed during the course of the HSNO forensic audit report.
See id. at p. 13 (“In particular, when Ms. Hammer’s counsel sought information related to what
was discussed with the (10) individuals who Mr. Curran interviewed as part of the Forensic
Audit, Sun Valley’s and Mr. Curran’s attorneys directed Mr. Curran not to answer. In addition,
when Ms. Hammer’s counsel asked for information related to the discussions that occurred
during an eight (8) hour meeting between Mr. Curran, Attorney Gill, Defendant Briscoe and
Administrative Assistant Virginia Egger on August 9, 2012, Sun Valley’s attorneys and Mr.
Curran’s attorney prohibited him from answering.”).
18.

On May 19, 2018, Plaintiff Donoval sent an email to counsel for Defendants and

Mr. Curran’s counsel, objecting to the assertions of accountant-client or attorney-client
MEMORANDUM DECISION AND ORDER - 5

protections and, relatedly, their instructions to Mr. Curran that he should not answer certain
questions related to the HSNO forensic audit report, including the production of the retainer
agreements between HSNO and Defendants. See 5/19/18 email, attached as Ex. R to Mem. in
Supp. of Mot. to Overrule and Compel (Docket No. 131, Att. 20).
19.

On May 22, 2018, Defendants’ counsel responded, reasserting the privileges from

Mr. Curran’s deposition and the purported legal bases for doing so. See 5/22/18 Ltr., attached as
Ex. S to Mem. in Supp. of Mot. to Overrule and Compel (Docket No. 131, Att. 21).
20.

Consistent with Judge Lodge’s November 22, 2017 Amended Scheduling Order,

the limited discovery period closed on May 22, 2018.
21.

On July 3, 2018, Plaintiffs filed the at-issue Motion, requesting that the

accountant/attorney-client-related objections raised during Mr. Curran’s May 18, 2018
deposition be overruled, that Mr. Curran be compelled to respond to matters related to the HSNO
forensic audit report, and that Mr. Curran be re-deposed in Boise, Idaho at the expense of
Defendants and/or Mr. Curran. See Mot. to Overrule and Compel, pp. 5-6 (Docket No. 131).
B.

Defendants’ Motion to Disqualify James R. Donoval (Docket No. 137)2
1.

When Plaintiffs initiated this action on May 3, 2013, they were represented by

attorneys Eric B. Swartz and Joy M. Vega. See Compl. (Docket No. 1).
2.

On March 4, 2015, attorneys Swartz and Vega moved to withdraw as counsel for

Plaintiffs. See Mot. to Withdraw (Docket No. 61). The Court granted the Motion on March 16,
2015, giving Plaintiffs 21 days “to file written notice with the Court stating how and by whom
they will be represented.” 3/16/15 Order, p. 2 (Docket No. 63).

2

To add additional context to the factual underpinnings of Defendants’ Motion to
Disqualify, it may be helpful to cross-reference its predicate facts with the timeline outlined
above as to Plaintiffs’ Motion to Overrule Assertions of Accountant-Client and Attorney-Client
Privilege and to Compel Responses. See supra.
MEMORANDUM DECISION AND ORDER - 6

3.

On April 13, 2015, Plaintiff Donoval filed an Appearance (presented via CM/ECF

as a motion) in which he entered a pro se appearance on his own behalf and a formal appearance
on behalf of Plaintiff Hammer. See Appearance (Docket No. 66). Therein, Plaintiff Donoval
indicated that “[n]otice is provided to the Court that depending on findings in pending rulings,
that should the Court set a new trial date, that Counsel expects to retain separate trial counsel for
himself and Sharon R. Hammer in the matter.” Id.
4.

On April 21, 2015, Defendants objected to Plaintiff Donoval’s Appearance,

arguing that (1) it was not made within the 21-day window as prescribed by the Court within its
March 16, 2015 Order; and (2) Plaintiff Donoval has an “apparent conflict representing his wife
in this case where there is also a claim by him and he is obviously very personally invested in
how his wife’s lawsuit turns out.” Obj. to Pls.’ Not. of App., pp. 1-2 (Docket No. 67) (citing
Idaho R. Prof’l Conduct 1.7, 2.1 & 3.7). Further, in addition to lodging their objection,
Defendants reserved the right to disqualify Plaintiff Donoval at a later time, if necessary. See id.
at p. 2.
5.

On April 22, 2015, Plaintiffs responded to Defendants’ objection, claiming that

the Appearance complied with the Court’s March 16, 2015 Order and the Local Civil Rules,
while citing caselaw from this Court “rejecting the notion that any attorney, who will also be a
witness at trial, cannot act as counsel up to trial.” Reply in Supp. of Not. of App., pp. 1-5
(Docket No. 68).
6.

On April 23, 2015, Judge Lodge ruled that Plaintiff Donoval’s Appearance was

timely and granted and confirmed that Plaintiff Donoval is appearing pro se in this matter and
that Plaintiff Hammer is being represented by Plaintiff Donoval. See 4/23/15 Order (Docket No.
69). Concerning the issue of a possible conflict of interest in allowing Plaintiff Donoval to
represent Plaintiff Hammer, Judge Lodge stated:
MEMORANDUM DECISION AND ORDER - 7

At this stage, there is no formal Motion before it to disqualify Mr. Donoval as
counsel for Ms. Hammer nor any apparent legal basis for the Court doing so sua
sponte. Mr. Donoval is an attorney, licensed to practice law before all courts in the
state of Idaho. As such, the Court will direct that the Clerk of the Court note in the
record of this case that, as of the time of the filing of the Notice of Appearance, Mr.
Donoval is appearing pro se and that Ms. Hammer is being represented by Mr.
Donoval.
Id. at p. 3 (citing Compl. at ¶ 8 (Docket No. 1); Appearance (Docket No. 66) (noting Plaintiff
Donoval’s Idaho State Bar Number)).
7.

On August 11, 2015 (after Judge Lodge granted Defendants’ Motion for

Summary Judgment and dismissed the case in its entirety and before Plaintiffs’ Notice of Appeal
(see supra)), attorney Wyatt Johnson filed a Notice of Appearance on behalf of Plaintiff Hammer
and Plaintiff Donoval. See Not. of App. (Docket No. 73).
8.

After this case became active again in October 2017 following the Ninth Circuit’s

remand, Mr. Donoval continued to be counsel of record for Plaintiff Hammer despite attorney
Johnson’s concurrent representation. According to Defendants, “the time is now ripe to address
whether [Plaintiff] Donoval’s disqualification is appropriate.” Mem. in Supp. of Mot. to Disq.,
p. 3 (Docket No. 137, Att. 1). In turn, on August 1, 2018, Defendants filed the at-issue Motion,
requesting that Plaintiff Donoval be disqualified as Plaintiff Hammer’s counsel pursuant to Rules
1.7(a)(2), 1.8(i), and 3.7 of the Idaho Rules of Professional Conduct. See Mot. to Disq. (Docket
No. 137).
II. DISCUSSION
A.

Plaintiffs’ Motion to Overrule Assertions of Accountant-Client and Attorney-Client
Privilege and to Compel Responses (Docket No. 131)
Disputes regarding subpoenas served on non-parties implicate FRCP 45. Significant

changes were made to Rule 45 in 2013, with a number of amendments going into effect on
December 1, 2013. See Wultz v. Bank of China, Ltd., 304 F.R.D. 38, 42 (D.D.C. 2014). “In its
order adopting the 2013 amendments to Rule 45, the Supreme Court specified the amendments
MEMORANDUM DECISION AND ORDER - 8

would govern in all proceedings commenced after December 1, 2013, and, ‘insofar as just and
practicable, all proceedings then pending.’” Garden City Emps.’ Retirement Sys. v. Psychiatric
Solutions, Inc., 2014 WL 272088, *3 (E.D. Pa. 2014).
This case began on May 3, 2013, but the disputed subpoena was served 5 years later to
the day (May 3, 2018). Plaintiffs’ pending Motion followed two months later, on July 3, 2018.
Therefore, while the lawsuit began before December 1, 2013, the subpoena dispute arose much
later, long after the December 1, 2013 effective date of the Rule 45 amendments. It is entirely
“just and practicable” for the Court to apply the current version of Rule 45, and the Court finds it
proper to do so.
Prior to the 2013 amendments, subpoenas for depositions or production of documents
were issued from the court for the district where compliance was required, and the power to
quash or modify any issued subpoenas was reserved to that court. See Wultz, 304 F.R.D. at 42.
The amendments changed that. Rule 45 now requires that “[a] subpoena must issue from the
court where the action is pending.” Fed. R. Civ. P. 45(a)(2). However, the authority to decide a
motion to compel arising out of that subpoena is vested with the court where compliance is
required. See Fed. R. Civ. P. 45(d)(2)(B)(i) (“At any time, on notice to the commanded person,
the serving party may move the court for the district where compliance is required for an order
compelling production or inspection. (emphasis added));3 Fed. R. Civ. P. 37(a)(2) (“A motion for

3

This is reflected elsewhere in Rule 45 as well. See Fed. R. Civ. P. 45(d)(3)(A) (“On
timely motion, the court for the district where compliance is required must quash or modify a
subpoena that . . . .” (emphasis added)); Fed. R. Civ. P. 45(e)(2)(B) (after being notified of
privileged information being produced in response to subpoena, receiving party “may promptly
present the information under seal to the court for the district where compliance is required for a
determination of the claim.” (emphasis added)); Adv. Comm. Notes to 2013 Amend. to Rule 45
(“Under Rules 45(d)(2)(B), 45(d)(3), and 45(e)(2)(B), subpoena-related motions and applications
are to be made to the court where compliance is required under Rule 45(c). Rule 45(f) provides
authority for that court to transfer the motion to the court where the action is pending. It applies
(Continued)
MEMORANDUM DECISION AND ORDER - 9

an order to a party must be made in the court were the action is pending. A motion for an order
to a nonparty must be made in the court where discovery is or will be taken.” (emphasis added));
Adv. Comm. Notes to 2013 Amend. to Rule 45 (“Subpoenas are essential to obtain discovery
from nonparties. To protect local nonparties, local resolution of disputes about subpoenas is
assured by the limitations of Rule 45(c) and the requirements in Rules 45(d) and (e) that motions
be made in the court in which compliance is required under Rule 45(c).” (emphasis added)).4
In short, subpoenas are issued from the court where the action is pending; motion practice
arising out of those subpoenas is decided by the court where compliance is required (unless that
court transfers the dispute to the court where the action is pending). Therefore, this Court is not
authorized to consider Plaintiffs’ Motion. Though it issued the May 3, 2018 subpoena for Mr.
Curran’s deposition, his May 18, 2018 deposition took place in Seattle, Washington, in the
Western District of Washington. It is that federal district court where Plaintiffs’ Motion is
properly pursued. Plaintiffs’ Motion is denied, without prejudice.
B.

Defendants’ Motion to Disqualify James R. Donoval (Docket No. 137)
1.

Disqualification of Counsel Standard

“Motions to disqualify counsel are decided under state law.” Pesky v. United States,
2011 WL 3204707 (D. Idaho 2011) (citing In re Cnty. of Los Angeles, 223 F.3d 990, 995 (9th Cir.
2000)). The Court considers the Idaho Rules of Professional Conduct as adopted and interpreted

to all motions under this rule, including an application under Rule 45(e)(2)(B) for a privilege
determination.” (emphasis added)).
4

Rule 45(f) (new as of 2013) permits a transfer of such motions to the issuing court:
“When the court where compliance is required did not issue the subpoena, it may transfer a
motion under this rule to the issuing court if the person subject to the subpoena consents or if the
court finds exceptional circumstances.” Fed. R. Civ. P. 45(f). If necessary to enforce the
resulting order, the issuing court may transfer the matter back to the court where compliance is
required. See id.
MEMORANDUM DECISION AND ORDER - 10

by the Idaho Supreme Court. See Parkland Corp. v. Maxximum Co., 920 F. Supp. 1088, 1091
(D. Idaho 1996); see also Mark J. Fucile, Applied Legal Ethics: Disqualifying Counsel in Idaho
State and Federal Courts, 60 Advocate 41, 42 (2017) (Idaho Rules of Professional Conduct
“effectively supply the substantive law on whether an ethics violation warranting disqualification
has occurred.”).
“The right to disqualify counsel is within the discretion of the trial court as an exercise of
its inherent powers.” United States v. Obendorf, 2016 WL 1595347, *2 (D. Idaho 2016) (citing
United States v. Wunsch, 84 F.3d 1110, 1114 (9th Cir. 1996)). “Regarding motions to disqualify
counsel in Idaho generally, it is clear that “[t]he moving party has the burden of establishing
grounds for disqualification.’” Parkland Corp., 920 F. Supp. at 1091 (quoting Weaver v.
Millard, 819 P.2d 110, 115 (Idaho Ct. App. 1991)). Moreover, “[t]he cost and inconvenience to
clients and the judicial system for misuse of the rules for tactical purposes is significant [and]
[b]ecause of this potential for abuse, disqualification motions should be subjected to particularly
strict judicial scrutiny.’” Optyl Eyewear Fashion Int’l Corp. v. Style Co., Ltd, 760 F.2d 1045,
1050 (9th Cir. 1985) (quoting Rice v. Baron, 456 F. Supp. 1361, 1370 (S.D.N.Y. 1978)).5
When deciding whether to disqualify counsel, “[the] goal of the court should be to shape
a remedy which will assure fairness to the parties and the integrity of the judicial process.

5

Plaintiffs argue that Defendants (as opposed to a client in a typical attorney-client
relationship) do not have standing to bring their Motion to Disqualify based on an alleged
conflict between Plaintiff Hammer and Plaintiff Donoval. See Opp. to Mot. to Disq., pp. 6-7
(Docket No. 140). While generally the case, this is not an absolute rule. See Weaver, 819 P.2d
at 116 (discussing four-part test to determine whether appearance of impropriety alone will give
party standing to interfere with adverse party’s choice of counsel). Despite their arguments to
the contrary, Plaintiffs implicitly agree, acknowledging in no uncertain terms that “[w]here a
motion to disqualify comes from opposing counsel, the motion should be reviewed with caution.”
Id. at p. 5 (emphasis added). Because Defendants’ Motion to Disqualify is denied for substantive
reasons, the Court need not separately address Defendants’ standing to bring the Motion itself.
MEMORANDUM DECISION AND ORDER - 11

Whenever possible, courts should endeavor to reach a solution that is least burdensome to the
client.” Weaver, 819 P.2d at 115.
2.

There Is No Basis to Disqualify Plaintiff Donoval as Plaintiff Hammer’s Counsel
at This Time

Defendants argue that Plaintiff Donoval has “run afoul of three rules of the Idaho Rules
of Professional Conduct” while representing Plaintiff Hammer, “necessitating disqualification
from further proceedings.” Mem. in Supp. of Mot. to Disq., p. 4 (Docket No. 137, Att. 1).
Specifically, Defendants contend that Plaintiff Donoval is (1) in violation of Rule 1.8(i), which
prohibits representation when an attorney has acquired a proprietary interest in the subject matter
of the litigation; (2) in violation of Rule 1.7, which prohibits representation when there is a
conflict of interest with a current client; and (3) prohibited from representing Plaintiff Hammer
as trial counsel and in pre-trial matters under Rule 3.7’s advocate-witness rule. See id. The
Court is not persuaded on this record.
a.

Rule 1.8(i)

Rule 1.8 sets forth specific rules regarding conflicts of interest with current clients,
providing in relevant part:
(i)

A lawyer shall not acquire a proprietary interest in the cause of action or
subject matter of litigation the lawyer is conducting for a client, except that
the lawyer may:
(1)

acquire a lien authorized by law to secure the lawyer’s fee or
expenses; and

(2)

contract with a client for a reasonable contingent fee in a civil case.

Idaho R. Prof’l Conduct 1.8(i). Defendants submit that, by representing Plaintiff Hammer,
Plaintiff Donoval maintains an impermissible proprietary interest because (1) he has a
community property interest in any potential award to his client/Plaintiff Hammer; and (2) his
retaliation claim is dependent upon the success of his client’s/Plaintiff Hammer’s claims. See
MEMORANDUM DECISION AND ORDER - 12

Mem. in Supp. of Mot. to Disq., pp. 4-8 (Docket No. 137, Att. 1). In the Court’s view, the threat
of Plaintiff Donoval’s legal representation is overstated.
As Plaintiff Hammer’s husband, Plaintiff Donoval has a pecuniary interest in his wife’s
claims because of their marriage and the community property laws in Idaho.6 But that legal
relationship does not ipso facto preclude an attorney from representing his/her spouse in a claim
for monetary damages. The cases relied upon by Defendants only describe that (1) attorneys
should not acquire an ownership interest in the subject of their representation, and (2) property
acquired during marriage is community property. See id. at pp. 4-7. They do not create a “if this
then that” basis for disqualifying Plaintiff Donoval under Rule 1.8(i) without actually going
through the process of connecting those conceptual dots in any real legal sense. See, e.g., id. at
p. 7 (“Accordingly, Mr. Donoval has a community property interest in any award of future
earnings and back pay to Ms. Hammer in the present case. He therefore has a ‘proprietary
interest[7] in the . . . subject matter of the litigation,’ and Mr. Donoval’s disqualification from all
further representation of Ms. Hammer is appropriate under Rule 1.8(i).”).
In other words, Defendants’ offered authority does not address the myriad of possible
issues that flow from a very strict reading of Rule 1.8(i) when an attorney has a spouse for a
client. In that more nuanced setting, no case has been called to the Court’s attention (and the
Court likewise finds none) that forbids an attorney from representing a spouse solely because the
attorney’s inherent community property interest in the client’s/spouse’s potential monetary

6

This assumes that Plaintiffs have not separately entered into some agreement which
remodels by private contract the typical community property interests between a husband and
wife in Idaho.
7

It is not entirely clear whether a pecuniary and/or community property interest amounts
to a proprietary interest under Rule 1.8(i) – Defendants certainly believe this to be so. Without
answering the question, this Memorandum Decision and Order assumes this to be the case.
MEMORANDUM DECISION AND ORDER - 13

award amounts to an improper and disqualifying proprietary interest. To the contrary, even if
not common, it is not unusual for an individual to be represented by their attorney spouse. And
this makes sense (while not running contrary to Rule 1.8(i)) because such a relationship – though
technically one of attorney and client – is fundamentally one of husband and wife and, therefore,
arguably beyond the orbit of Rule 1.8(i)’s mandate, purpose, and protections. Said differently,
community property interests in a pecuniary sense ordinarily are distinct from an attorney’s
proprietary interest in the subject matter of a case – either in an ownership setting or as
remuneration for legal services. The former precept exists by operation of the law; the latter
arrangement risks giving an attorney too great an economic interest in the representation, while
making it more difficult for a client to discharge the attorney if the client so desires. See Idaho
R. Prof’l Conduct 1.8, cmt. 16. Without more, any generalized community property interest
which exists because of the marriage between Plaintiffs Donoval and Hammer does not rise to
the level of a specific unauthorized proprietary interest proscribed by Rule 1.8(i).
Similarly, the fact that Plaintiff Donoval has a separate claim that rises and falls with
Plaintiff Hammer’s claims does not turn into a problematic proprietary interest under Rule 1.8(i).
See Mem. in Supp. of Mot. to Disq., pp. 7-8 (Docket No. 137, Att. 1) (Defendants describing
Plaintiff Donoval’s claim thusly: “However, Mr. Donoval’s retaliation claim under Count VI is
not an independent claim. Instead, he claims that an adverse action against his client caused his
inability to exercise his right to free speech – in this case political speech. He cannot recover
under the theory he alleges absent proving retaliatory discharge against his client Ms.
Hammer.” (emphasis added)). Defendants go on to argue that this alignment of claims
nonetheless “creates an untenable conflict” between Plaintiffs Donoval and Hammer because it
“creates a significant risk that Mr. Donoval will be materially limited in arguing or settling this
claim on behalf of Ms. Hammer as it directly impacts his own claims against the Defendants.”
MEMORANDUM DECISION AND ORDER - 14

Id. at p. 8. Again, the Court views Defendants’ characterization as overstated, while failing to
offer any legal support for their position.
Defendants argue that Plaintiff Donoval’s “best interest” (derived from the fact that he
too has an individual claim against Defendants) “is to ensure that Ms. Hammer retains her
claims.” Id. But such interests are parallel in this case and the Court is not persuaded that there
is either an inherent or a lurking conflict in such circumstances that warrants disqualification.
Even if Plaintiff Donoval’s interest in own his claim is arguably “proprietary,” it is not an
interest that runs counter to the purpose of Rule 1.8(i). See supra; see also, e.g., Cooke v. AT&T
Corp., 2006 WL 1447415, *3 (S.D. Ohio 2006) (“[T]his Court believes that American lawyers
and the general public would be shocked by an interpretation of the ethics rules that would
prohibit an attorney from representing his or her spouse in any case where the attorney might
possess an overlapping claim . . . .”). Perhaps, if Plaintiff Donoval’s claim only survived if
Plaintiff Hammer’s claims were dismissed, Plaintiff Donoval’s status as Plaintiff Hammer’s
attorney would be more discomforting. But that is not the situation before the Court.
Defendants’ Motion to Disqualify is denied in these respects.
b.

Rule 1.7

Focusing again on the fact that his personal claim is directly related to and contingent
upon his wife’s claims, Defendants argue that Plaintiff Donoval has an “untenable” concurrent
conflict under Rule 1.7 and therefore must be disqualified. See Mem. in Supp. of Mot. to Disq.,
pp. 10-11 (Docket No. 137, Att. 1). Rule 1.7 provides:
(a)

Except as provided in paragraph (b), a lawyer shall not represent a client if
the representation involves a concurrent conflict of interest. A concurrent
conflict of interest exists if:
(1)

the representation of one client will be directly adverse to another
client; or

MEMORANDUM DECISION AND ORDER - 15

(2)

(b)

there is a significant risk that the representation of one or more
clients will be materially limited by the lawyer’s responsibilities to
another client, a former client or a third person or by the personal
interests of the lawyer, including family and domestic relationships.

Notwithstanding the existence of a concurrent conflict of interest under
paragraph (a), a lawyer may represent a client if:
(1)

the lawyer reasonably believes that the lawyer will be able to provide
competent and diligent representation to each affected client;

(2)

the representation is not prohibited by law;

(3)

the representation does not involve the assertion of a claim by one
client against another client represented by the lawyer in the same
litigation or other proceeding before a tribunal; and

(4)

each affected client gives informed consent, confirmed in writing.

Idaho R. Prof’l Conduct 1.7.
Defendants seem to acknowledge that Plaintiffs’ separate claims are not directly adverse.
Therefore, Defendants rely upon Rule 1.7(a)(2). See Mem. in Supp. of Mot. to Disq., p. 10
(Docket No. 137, Att. 1) (“Thus, even absent directly adverse interests, ‘a conflict of interest
exists if there is a significant risk that a lawyer’s ability to consider, recommend or carry out an
appropriate course of action for the client will be materially limited as a result of the lawyer’s
other responsibilities or interests.’” (quoting Idaho R. Prof’l Conduct 1.7, cmt. 8)). Even so, they
remain misplaced.
First, there currently is no requisite “significant risk” that, in representing himself pro se,
Plaintiff Donoval’s simultaneous representation of his wife will be “materially limited” as
contemplated by Rule 1.7(a)(2). Defendants acknowledge Plaintiffs’ “apparent alignment of
interests” at present, but warn that a potential conflict may emerge as the case progresses. See id.
at p. 10. But this is not enough. “The mere possibility of subsequent harm does not itself require
disclosure and consent. The critical questions are the likelihood that a difference in interests will
eventuate and, if it does, whether it will materially interfere with the lawyer’s independent
MEMORANDUM DECISION AND ORDER - 16

professional judgment in considering alternatives or foreclose courses of action that reasonably
should be pursued on behalf of the client.” Idaho R. Prof’l Conduct 1.7, cmt. 8 (emphasis
added).
Further, the record does not reveal any indication of a likely conflict between Plaintiffs’
interests – again, if anything, just the opposite. A concurrent conflict is either too tenuous or
does not exist, such that Rule 1.7(a)(2) does not apply. See Pesky v. United States, 2011 WL
3204707, *2 (D. Idaho 2011) (“Moreover, the court cannot even conclude at this stage that a
significant risk of material limitation exists. As Comment 8 explains, ‘[t]he mere possibility of
subsequent harm does not itself require disclosure and consent.’ Accordingly, the court will
deny defendant’s motion on this ground.” (internal citation omitted)); Cooke, 2006 WL 1447415
at *3 (“[T]his Court believes that American lawyers and the general public would be shocked by
an interpretation of the ethics rules that would prohibit an attorney from representing his or her
spouse in any case where the attorney might possess an overlapping claim . . . .”).
Second, even assuming a concurrent conflict, Rule 1.7(b) still would permit Plaintiff
Donoval to represent Plaintiff Hammer. It is unchallenged that he can provide competent and
diligent representation to Plaintiff Hammer; the representation is not prohibited by law; the
representation does not involve claims against each other; and Plaintiff Hammer has consented to
her husband’s representation of her. See Hammer Aff., ¶¶ 34, 36 (Docket No. 140, Att. 8) (“On
April 13, 2015, Mr. Donoval filed an Appearance on my behalf in this case. I waived any
possible conflicts that may have existed due to Mr. Donoval being my husband, and have
continued to do so through the entire proceeding of this case. . . . . Since the filing of Mr.
Johnson’s Appearance, Mr. Johnson and Mr. Donoval have acted as co-counsel or associated
counsel on matters related to me, with my full knowledge and approval, and with me waiving
any conflicts of interest related to Mr. Johnson or Mr. Donoval.”). The comments to Rule 1.7
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make clear that “common representation of persons having similar interests in civil litigation is
proper if the requirements of paragraph (b) are met.” Idaho R. Prof’l Conduct 1.7, cmt. 23; see
also id. at cmt. 28 (“[A] lawyer may not represent multiple parties to a negotiation whose
interests are fundamentally antagonistic to each other, but common representation is permissible
where the clients are generally aligned in interest even though there is some different in interest
among them.” (emphasis added)). Defendants’ Motion to Disqualify is also denied in these
respects.
c.

Rule 3.7

Finally, based upon Plaintiff Donoval’s role as (1) a party to the action, (2) the spouse of
a party to the action, and (3) the attorney for both his claim and his spouse’s claims, Defendants
contend that Rule 3.7 requires that he be disqualified because he is a necessary witness. In
relevant part, Rule 3.7 reads:
(a)

A lawyer shall not act as advocate at a trial in which the lawyer is likely to
be a necessary witness unless:
(1)

the testimony relates to an uncontested issue;

(2)

the testimony relat4es to the nature and value of legal services
rendered in the case; or

(3)

disqualification of the lawyer would work substantial hardship on
the client.

Idaho R. Prof’l Conduct 3.7(a).
However, nothing in Rule 3.7 precludes Plaintiff Donoval from representing Plaintiff
Hammer in pre-trial activities; indeed, the Rule itself specifically cautions against lawyers acting
as an advocate “at a trial.” Id. (emphasis added); see also Saetrum v. Raney, 2014 WL 2155210,
*5 (D. Idaho 2014) (“As a threshold matter, Deputy Vogt’s motion [to disqualify counsel] is
premature because Rule 3.7 is expressly limited to a lawyer’s advocacy ‘at trial.’” (citing/quoting
Burch-Lucich v. Lucich, 2013 WL 5876317, *9 (D. Idaho 2013) (“[R]aising [Rule 3.7] at this
MEMORANDUM DECISION AND ORDER - 18

point is premature. This rule does not prevent a lawyer/witness from representing a client during
pretrial proceedings.”); In re Elias, 2005 WL 470552, *6 (Bankr. D. Idaho 2005) (“Counsel’s
disqualification under [ ] Idaho Rules of Professional Conduct [3.7] is not absolute . . . . Under
the Rule, Counsel would likely not be prohibited from representing the bankruptcy estate during
pretrial matters even if he is called as a witness at trial. Should the issue arise prior to trial,
Counsel could assume a dual role under the circumstances set forth in the Rule.”)).
Moreover, the generic risks typically associated with an attorney who is also a potential
trial witness are more common (and concerning) when the lawyer-witness is not a litigant –
potentially confusing a jury as to the differences between advocacy and testimony. But Plaintiff
Donoval is representing both himself (pro se as a party litigant) and Plaintiff Hammer (as her
attorney). See Cooke, 2006 WL 1447415 at *3 (“[T]he jury will understand that Mr. Cooke [(an
attorney representing himself and his wife)] has an interest in the outcome of the case both with
respect to his own claim and his wife’s claim and will take that into account in evaluating both
his testimony and arguments he presents as an advocate for both. In short, the purposes served
by the cited Disciplinary rules will not be subverted in this unique situation.”).
In other words, not all instances in which an attorney may testify at trial are to be treated
in the same manner so as to blindly apply Rule 3.7 to disqualify the attorney in any such
circumstance. See supra. Plaintiff Donoval is not just an attorney who may testify at trial; he is
also a party litigant with a legal claim. There is no basis to prevent him from serving in such a
dual role and, at this juncture and in this context (and for similar reasons), no basis to prevent
him from serving as Plaintiff Hammer’s attorney in pre-trial activities as well.
The Court does not decide here the question of whether Plaintiff Donoval may represent
Plaintiff Hammer at trial, particularly in light of Plaintiff Donoval’s repeated representations that
he will not do so. See supra; see also Opp. to Mot. to Disq., p. 15 (Docket No. 140) (“In this
MEMORANDUM DECISION AND ORDER - 19

case, Mr. Donoval will be testifying to facts, but will not be actively acting as an advocate for
Ms. Hammer because Mr. Johnson will be making opening and closing arguments on behalf of
Ms. Hammer. Instead, Mr. Donoval will be simply assisting Mr. Johnson at trial – not acting as
an advocate as to the application of the facts to the law in front of the jury.”). If it becomes
apparent that Plaintiff Donoval will attempt to represent Plaintiff Hammer at trial, that issue will
be taken up at that time with the benefit of a more developed record.8 Defendants’ Motion to
Disqualify is also denied in these respects – that is, Plaintiff Donoval may represent Plaintiff
Hammer in pre-trial activities and Defendants may renew their objections to Plaintiff Donoval’s
representation of Plaintiff Hammer at trial if the circumstances so justify.
III. ORDER
Based on the foregoing, IT IS HEREBY ORDERED that:
1.

Plaintiffs’ Motion to Overrule Assertions of Accountant-Client and Attorney-

Client Privilege and to Compel Responses (Docket No. 131) is DENIED, without prejudice; and
2.

Defendants’ Motion to Disqualify James R. Donoval (Docket No. 137) is

DENIED. Defendants may renew their objections to Plaintiff Donoval’s representation of
Plaintiff Hammer at trial, if circumstances support such objections.

DATED: February 26, 2019
_________________________
Ronald E. Bush
Chief U.S. Magistrate Judge

8

Plaintiffs contend that, if Plaintiff Donoval is barred from acting as Plaintiff Hammer’s
legal counsel at trial, Defendants’ attorney, Kirtlan Naylor, is also barred from acting as
Defendants’ counsel at trial. See Opp. to Mot. to Disq., pp. 19-20 (Docket No. 140). That issue
also is inchoate based upon the rulings made at this time, and Plaintiff is free to renew such an
argument at trial if circumstances justify.
MEMORANDUM DECISION AND ORDER - 20