Deboles v. National Railroad Passenger Corporation
Filing
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ORDER Denying 45 Plaintiff's Motion to Disqualify Counsel. Signed by Magistrate Judge Carl W. Hoffman on 06/07/2012. (Copies have been distributed pursuant to the NEF - AC)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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NATHANIEL D. DEBOLES, et al.,
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Plaintiffs,
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vs.
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THE NATIONAL RAILROAD PASSENGER
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CORPORATION, et al.,
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Defendants.
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__________________________________________)
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Case No. 2:11-cv-00276-JCM-CWH
ORDER
This matter is before the Court on Plaintiffs’ Motion to Disqualify Counsel (#45), filed on
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January 26, 2012. Defendants responded to this motion on February 13, 2012 (#50), and Plaintiffs
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replied on February 23, 2012 (#53). The Court conducted a hearing on March 22, 2012.
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BACKGROUND
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Plaintiffs Nathaniel Deboles and Mary Deboles instigated this case on February 18, 2011 against
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the National Railroad Passenger Corporation (d/b/a “Amtrak”) and BNSF Railroad Company
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(“BNSF”). Plaintiffs allege that Mr. Deboles sustained injuries after being struck by a train operated by
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Amtrak. Plaintiffs brought claims against Amtrak for negligence in operating premises in violation of
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state law.
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Plaintiffs subsequently discovered that BNSF owned the railroad tracks and right of way where
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the accident occurred and amended their complaint to include the company as a defendant. Plaintiffs
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asserted the same claims against BNSF and Amtrak.1
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Defendant Amtrak filed its answer on March 22, 2011. Attorneys from the law firm of
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Fennemore Craig appeared on Amtrak’s behalf. Amtrak included the following affirmative defense:
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Ms. Deboles further asserted claims against both Defendants for loss of household services and
loss of spousal consortium.
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If Plaintiffs have accrued or sustained any loss, damage, or injury, which Amtrak explicitly
denies, said injuries, losses, or damages, if any, were contributed to and/or caused, in whole
or in part, by the carelessness or negligence of persons, corporations, or entities other than
Amtrak and beyond the control of Amtrak.
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See Answer to Amended Complaint (#39) at 7.
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BNSF filed its answer on January 6, 2012. BNSF is represented by the same attorneys and firm
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as Defendant Amtrak. BNSF included the same affirmative defense quoted supra that was asserted by
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Amtrak.
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Plaintiffs filed the instant motion alleging the Defense counsel for Amtrak and BNSF has an
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apparent conflict of interest in representing both co-Defendants.
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DISCUSSION
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A. Plaintiff’s Motion to Disqualify Counsel
“As a general rule, only former and current clients have standing to bring a motion to disqualify
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counsel on the basis of conflict of interest.” United States v. Walker River Irrigation Dist., No. 3:7313
CV-127-ECR (RAM), 2006 U.S. Dist. LEXIS 95342, at *19 (D. Nev. Mar. 10, 2006) (citations
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omitted). “Non client standing to move to the disqualification of an attorney exists only if there is an
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‘ethical breach [that] so infects the litigation . . . that ii impacts the moving party’s interest in a just and
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lawful determination of [the] claims. . . .’” Id. at *26 (quoting Colyer v. Smith, 50 F. Supp. 2d 966, 971
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(C.D. Cal. 1999)). “Disqualification is a drastic measure which courts should hesitate to impose except
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when absolutely necessary because it takes away one party’s ability to chose his own representation,
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and it is often a tactic used to create delay or harassment.” Id. at *17 (citations and internal quotations
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omitted). The burden rests on Plaintiffs to prove that standings exists. Id. (citing Colyer, 50 F. Supp.
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2d at 968).
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Ethical Breach
Plaintiffs argue that they have asserted completely different claims against Amtrak and BNSF
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and as such, defense counsel is precluded from representing both Defendants. In support, Plaintiffs rely
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on Nevada Rule of Professional Conduct (“NRPC”) 1.7, which “imposes a duty of loyalty on lawyers
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that prohibits representation of more than one client if the ‘representation involves a concurrent conflict
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of interest or a significant risk that the dual representation will materially limit the lawyer’s ability to
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represent one or both clients.’” Ryan v. Dist. Ct., 168 P.3d 703, 710 (Nev. 2007) (interpreting the scope
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of NRPC 1.7).2
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Plaintiffs allege that defense counsel have breached their duties of loyalty, communication, and
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confidentiality by jointly representing Amtrak and BNSF. Specifically, Plaintiffs argue that the current
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representation will results in a lack of confidentiality regarding communications between counsel and
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each client. Plaintiffs also assert that defense counsel will have difficulty adequately and diligently
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representing the interests of both defendants. Plaintiffs conclude that settlement will be impeded by
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joint representation, which is contrary to public policy.
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“Courts ‘must assume that an attorney will observe his responsibilities to the legal system, as
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well as to his client[,]’ unless there is evidence to the contrary.” Walker River, 2006 U.S. Dist. LEXIS
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95342, at *23 (citations omitted). The only evidence submitted by Plaintiffs in support of a conflict of
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interest are Defendants’ answers that are signed by the same attorneys which assert the same affirmative
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defense. The affirmative defenses, which allege that Plaintiff’s injury was caused by a person other
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than defendant, do not necessarily require that Amtrak and BNSF will blame one another. Rather, the
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injury could have been caused by an unnamed third party. While Plaintiffs assert that the claims against
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Amtrak and BNSF are completely different, in fact, the claims are both based on premises liability.
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Further, there is no evidence to even suggest that defense counsel is unfairly taking advantage of
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client confidences or communications. Defendants have presented a declaration from Attorney William
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Thorpe stating that “Amtrak and BNSF have conferred and agreed that Fennemore Craig will represent
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both entities in defending against the claims asserted against them by Plaintiffs in this case.” See
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Defendant’s Response to Plaintiff’s Motion to Disqualify (#50), at Exh. A. In addition, Defense
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counsel has represented that Amtrak has entered into an indemnification agreement with BNSF wherein
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Amtrak will cover any portion of fault that is attributable to BNSF. This agreement eliminates any
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possibility that the two companies’ interests might diverge, as Amtrak will ultimately be responsible for
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the liability of both Defendants, if any, and would gain no advantage by blaming BNSF.
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Plaintiffs argue that Defendants’ declaration does not state that defense counsel explained the
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NRPC Rule 1.7 is identical to ABA Model Rule 1.7.
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conflict to both its clients and obtained their knowing and voluntary waivers in writing. NRPC 1.7
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requires that written informed consent is necessary to represent clients notwithstanding the existence of
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a concurrent conflict of interest. The Court does not find, however, that a concurrent conflict of interest
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exists since representation of Defendants will not be materially limited by the lawyers’ responsibilities
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to each client.
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There is no evidence to suggest that defense counsel have breached any ethical duty by
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representing both defendants. Plaintiffs allegations are instead based upon speculation, and the court
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does not find that joint representation of Amtrak and BNSF in this matter violates any ethical duty.
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Impact to Plaintiffs
Assuming Plaintiffs were able to establish an ethical breach, this court would then utilize a two-
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step inquiry in determining the impact of such a breach to Plaintiffs. “[T]he alleged injury to the non
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client movant must be ‘(a) concrete and particularized, and (b) actual or imminent, not conjectural or
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hypothetical.’” Walker River, 2006 U.S. Dist. LEXIS 95342, at *20 (quoting Colyer, 50 F. Supp. 2d at
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973).
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Plaintiffs contend that settlement in this case would be harmed by joint representation.
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Plaintiffs state that Defense counsel would have difficulty assessing the comparative liability of its
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clients and be unable to make fair apportioned offers to Plaintiffs. However, these allegations are
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purely speculative.
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Regardless, Amtrak has entered into an indemnification agreement with BNSF and will pay the
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entire amount owed by Defendants, if any, as discussed supra. Thus, any conflict that could exist
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between defendants regarding apportioning fault would be resolved, as Amtrak would ultimately be
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responsible for the entire amount regardless of the percentage owed by each defendant.
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Plaintiffs further argue that joint representation adversely affects public policy and the public
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interest since settlement could be impeded. While settlement is encouraged, this potential harm is again
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speculative with regard to its impact to Plaintiffs. The threat of injury to Plaintiffs must instead be
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concrete and particularized, and actual or imminent. Settlement negotiations have not commenced.
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Even assuming that settlement discussion will occur, there is no evidence that Defendants will submit
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an unfair offer. This is especially true given the fact that Amtrak has agreed to indemnify BNSF, thus
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even if defense counsel somehow could not obtain the correct percentages of fault between the two
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defendants, Plaintiffs would still receive the entire amount owed to them from Amtrak.
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Due to the lack of standing of Plaintiffs to bring this motion and a lack of evidence to overcome
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the presumption that defense counsel has not committed an ethical violation, the court finds that the law
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firm of Fennemore Craig is not disqualified to jointly represent Defendants.
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B. Defendants’ Request for Sanctions
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Defendants request this court to use its inherent power to impose sanctions against Plaintiffs for
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bad faith in bringing their motion. “[S]anctions are available if the court specifically finds bad faith or
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conduct tantamount to bad faith. Sanctions are available for a variety of types of willful actions,
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including recklessness when combined with an additional factor such as frivolousness, harassment, or
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an improper purpose.” Fink v. Gomez, 239 F.3d 989, 994 (9th Cir. 2001).
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Defendants request sanctions in the form of attorneys fees, arguing that Plaintiffs’ motion is
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frivolous and its filing was an attempt to harass Defendants and drive a wedge between the entities.
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Further, Defendants note that Plaintiffs’ counsel failed to notify Defendants of any concern prior to
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filing the instant motion.
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Plaintiffs argue that the motion was not frivolous since they point out a potential ethical
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violation. Further, Plaintiffs contend that they filed the motion in order to rectify the conflict of
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interest, and not to harass. Plaintiffs’ counsel believes that he had a duty to bring the motion under the
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Rules of Professional Conduct.
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The Court finds that while Plaintiffs’ motion has no merit, it was not designed to harass or delay
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litigation, but instead counsel for Plaintiffs brought the motion in good faith because he believed an
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ethical violation might have occurred. Therefore, sanctions under the court’s inherent power are not
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warranted. Accordingly,
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IT IS HEREBY ORDERED that Plaintiffs’ Motion to Disqualify Counsel (#45) is DENIED.
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DATED this 7th day of June, 2012.
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C.W. HOFFMAN, JR.
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N, JR.
UNITED STATES MAGISTRATE JUDGE
NITED
MAGISTRATE
AG
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