Hulzebos v. City of Sioux Falls

Filing 19

MEMORANDUM OPINION AND ORDER granting 8 MOTION to Disqualify R. Shawn Tornow filed by City of Sioux Falls. Signed by US Magistrate Judge John E. Simko on 9/19/13. (CMS)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION

PILED
5EP 192013

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CIV. 13-4024
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Plaintiff,
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OPINION AND ORDER
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VS.
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CITY OF SIOUX FALLS,
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Defendant.
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SHANNON E. HULZEBOS,

Pending is the City's motion to disqualify counsel for plaintiff.'

BACKGROUND
Hulzebos alleges she "worked for the City from 1979 through April 1997, and, later from
May of 1999, through October 4,2011.,,2 She alleges she worked "as a civil service employee who
was compensated at predetermined hourly rates. However, for a period of time between September
2002 and January 2005, for employment compensation purposes Plaintiffwas treated as an appointed
staffperson within the Mayor's office.,,3 According to Hulzebos, the City "failed to fulfill its lawful
obligations under City ordinance to continue compensating her at her correct and legally earned rate
ofpay.,,4 She asserts "at the time ofher recruitment and transfer in September 2002 from the Media

'Doc. 8.
2Doc. 1-2, p. 1, ,-r 1.
3Doc. 1-2, p. 1,,-r 2.
4Doc. 1-2, p. 2, ,-r 4.

Services MOU to the Mayor's office [she] was an hourly civil service employee earning a step wage
assigned to the Lead Media Services Specialist position at forty (40) hours per week.,,5 She asserts
"as a result, in January 2005 Plaintiff was entitled under city ordinance ... to bump-back to her
fonner position and rate of pay (approximately $19.99 per hour). Instead, however, Defendant
wrongfully, arbitrarily and/or discriminatorily reduced Plaintiff's hourly rate ofpay to a significantly
lower rate of$17.35 per hour.,,6 Her prayer for relief includes:
Be awarded a money judgment ofnot less than $29,500.00 against the Defendant for
allowed back pay and for the total of increased adjusted pension benefit amounts
owed to her as well as any other related post-employment benefits that may need to
be calculated as a result ofthe City's unlawful failure to compensate her at her correct
and earned rate ofpay and to include the calculation ofprejudgment interest thereon. 7
The fonner Human Resource Director for the City asserts counsel for Hulzebos, R. Shawn
Tornow was the designated legal advisor for the Human Resource Department for many years; that
he represented the City and its management team at civil service hearings; that he was involved in
drafting or writing policy and ordinances related to the City's personnel rules and regulations; that
he provided interpretations and legal advice regarding policies and ordinances; and that Tornow was
involved in a number ofhearings about employment matters. 8 The former Human Resource Director
asserts "it would not be uncommon" for her to speak to Tornow about City Ordinance 30-19. 9

5Doc. 1-2, p. 2, ,-r 5.

6Doc. 1-2, p. 2, ,-r 6.

7Doc. 1-2, p. 5.

8Doc. 10.

9Doc. 10, p. 2, ,-r 3.

2

A current deputy City Attorney asserts Tornow was employed by the City from 1995-20 I 0;
that during that time Tornow held the positions ofChiefCity Attorney and Assistant City Attorney;
and that "it was common practice in the Sioux Falls Attorney's Office for Attorney Tornow to visit
with other assistant city attorneys about legal matters including but not limited to employment
matters and drafting, interpretation and application of employment related rules and City
Ordinances."lo
Hulzebos' affidavit asserts her lawyer Tornow while a City Attorney never accessed or
reviewed her personnel file to her knowledge. I I Tornow has never indicated to her that he possesses
confidential information which could assist her in her litigation against the City.12 It was readily
apparent to her when she discussed her claim with Tornow that he "had no prior knowledge" about
it.13 When the City's Human Resource Director informed Hulzebos about her pending employment
position and wage status to take effect in 2005, the Human Resource Director did not mention having
a consultation with any City Attorney about the decision. 14
Tornow's affidavit asserts that while employed with the City he "did not represent the City
in the same matter or any substantially related matter....,,15 His duties with the City almost
exclusively related to discipline and discharge ofemployees and Hulzebos was never disciplined or

IODoc. 11.

IIDoc. 13, p. 1, ,-r 2.

12Doc. 13, p. 1, ,-r 3.

BDoc. 13, p. 2, ,-r 4.

14Doc. 13, p. 2, ,-r 5.

15Doc. 14, p. 1,,-r 2.

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discharged and her employment with the City voluntarily ended after Tornow's employment with
the City ended. 16 There has never been during Tornow's employment with the City any case against
the City alleging a wrongful rate ofpay after an employee left city employment. 17 Furthermore, even
if such a case ever existed, he does not possess any confidential information about it. IS The City
ordinance at the center ofthis dispute was adopted more than 18 years ago and there is nothing about
its interpretation which is confidential. 19 Tornow has not reviewed or discussed Hulzebos personnel
file nor has he ever discussed Hulzebos wage or benefit issue with anyone before she contacted him
as a prospective client. 20

DISCUSSION

Standards Of Review.

South Dakota Rule of Professional Conduct 1.11 provides:
(a)

Except as law may otherwise expressly permit, a lawyer who has formerly
served as a public officer or employee of the government:
(1)

is subject to Rule 1.9(c); and

(2)

shall not otherwise represent a client in connection with a matter on
which the lawyer participated personally and substantially as a public
officer or employee, unless the appropriate government agency gives
its informed consent, confirmed in writing, to the representation. 21

16Doc. 14, p. 1,,-r 3.

17Doc. 14, p. 2, ,-r 4.

lsDoc. 14, p. 2, ,-r 4.

19Doc. 14, p. 2, ,-r 5.

2°Doc. 14, p. 3, ,-r 9.

21SDCL Ch. 16-18, Appx. A, Rule 1.11.

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Rule 1.9(c) provides:
(c)

A lawyer who has fonnerly represented a client in a matter or whose present
or fonner finn has fonnerly represented a client in a matter shall not
thereafter:
(1)

Use infonnation relating to the representation to the disadvantage of
the fonner client except as these Rules would pennit or require with
respect to a client, or when the infonnation has become generally
known; or

(2)

Reveal infonnation relating to the representation except as these
Rules would pennit or require with respect to a client. 22

A lawyer should be disqualified as counsel if the lawyer is in violation of a disciplinary rule. 23
"Disqualification of an attorney who has been exposed to confidential infonnation that would
unfairly advantage her client is part of the court's duty to protect the sacrosanct privacy of the
attorney-client relationship.,,24 "It is, however, a drastic device which courts should hesitate to
implement except when absolutely necessary, because it deprives a party ofthe representation ofits
own choosing. The Court must balance the right of confidentiality with the right of a party to
proceed with counsel of its choice.,,25
The Seventh Circuit Court of Appeals has developed a three level inquiry.26 First, the trial
judge factually reconstructs the scope of the previous representation. Second, the trial judge

22SDCL ch. 16-18, appx. A, Rule 1.9(c).

23Homestake Min. Co. v. Bd. o/Envtl. Prot., 289 N.W.2d 561,563 (S.D. 1980).

24Dugar v. Board a/Education a/The City a/Chicago, District 299,1992 WL 142302

(N.D. Ill. June 18, 1992).

26Jd. p. *2, citing LaSalle National Bank, 703 F .2d 252, 255 (7th Cir. 1979).
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determines whether it is reasonable to infer confidential information would have been given to a
lawyer representing a client in those matters. Third, the trial judge must determine whether that
confidential information is relevant to the issues pending in the current litigation against the former
client. 27
Ifthe three level inquiry determines confidential information given to the lawyer is relevant
to the issues pending in the current litigation against the former client so that there is a substantial
relationship between the current litigation and the former employment, then a presumption arises that
the lawyer acquired confidential information while representing the former client. Disqualification
does not require proof the lawyer received specific information, but only that the subject matter of
the former and the current representation are substantially related. 28 This presumption can be
rebutted, but only ifthe challenged lawyer can show clearly and effectively that he was not privy to
the confidences and secrets of the former client. 29
Analysis.
1.

Scope of Employment.

Tornow was employed by the City from 1995-2010. During that time he was Chief City
Attorney and Assistant City Attorney. It was common practice in the Sioux Falls Attorney's Office
for Tornow to visit with other assistant city attorneys about legal matters including but not limited
to employment matters and drafting, interpretation and application of employment related rules and
City Ordinances. Tornow was the designated legal advisor for the Human Resource Department for

27ld. citing LaSalle National Bank, 703 F.2d at 255-256.

28Id. citing LaSalle National Bank, 703 F.2d at 257.

29ld. citing Freeman v. Chicago Musical Instrument Co., 689 F .2d 715, 723.

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many years. He represented the City and its management team at civil service hearings. He was
involved in drafting or writing policy and ordinances related to the City's personnel rules and
regulations. He provided interpretations and legal advice regarding policies and ordinances. Tornow
was involved in a number of hearings about employment matters. It would not be uncommon for
the former Human Resource Director to speak to Tornow about City Ordinance 30-19. His duties
with the City almost exclusively related to discipline and discharge of employees and Hulzebos was
never disciplined or discharged and her employment with the City voluntarily ended after Tornow's
employment with the City ended. There has never been during Tornow's employment with the City
any case against the City alleging a wrongful rate of pay after an employee left city employment.

2.

Confidential Information.

It is reasonable to infer confidential information would have been given to a lawyer
representing the City in those matters assigned to Tornow during his employment with the City.

3.

Confidential Information Relevant To The Issues In This Litigation.

Hulzebos' litigation is not the same matter as Tornow handled while in the employ of the
City. The question is whether Hulzebos' litigation is substantially related to matters Tornow handled
while in the employ of the City. Two matters are substantially related if "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.,,30 "If there
is reasonable probability that confidences were disclosed which could be used against the former
client in the later adverse representation, moreover, a substantial relationship between the two cases

30Peop/e v. Frisco, 119 P.3d 1093, 1096 (Colo. 2005) (en bane).

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will be presumed.,,3}

Disqualification does not require proof the lawyer received specific

information, but only that the subject matter of the former and the current representation are
substantially related. 32 The subject matter of Hulzebos' litigation is a Sioux Falls City Ordinance
related to designation and placement of City employee Hulzebos as a civil servant or otherwise and
her compensation which is dependent upon her designation and placement. While Tornow did not
handle any matter specifically related to Hulzebos, Tornow was privy to confidential City
information about employment policies, strategies and decisions.

He possesses confidential

information he obtained while in the employ ofthe City which is relevant and which could be useful
to advance Hulzebos' litigation against his former client- the City.
The City observes the following about confidential information Tornow possesses and
suggests the confidential information was obtained while he was in the employ of the City:
In her Complaint that was signed by Attorney Tornow, it is asserted that Plaintiff was
not afforded the opportunity to be heard on her wage issue as was done by custom
and practice. (Doc 1-2 ~·14). It is further asserted in the paragraph that discusses this
bump back issue that other employees, including males, were treated more
favorably than Plaintiff. (ld. at ~ 12). Clearly these assertions, which relate to the
City's policies, practices and other employment bump back matters, are based upon
information that Plaintiff's attorney has due to his employment as an attorney
by the City over the course of fifteen years. Significantly, Plaintiffs attorney does
not deny involvement with bump back issues involving the other employees; instead
he simply asserts he was not involved in such issues that were brought by retired or
fired employees after they left their employment. 33
(Bold added). This confidential information obtained by Tornow while he was a lawyerrepresenting
the City could advance Hulzebos' claim against the City. That is exactly what South Dakota Rule

31Thomas v. Municipal Court 0/Antelope Valley Judicial Dist. o/Cal., 878 F.2d 285,
288-89 (9th Cir. 1989).
32Dugar v. Board o/Education o/The City o/Chicago, District 299, 1992 WL 142302 at
p. *2 (N.D. Ill. June 18, 1992) citing LaSalle National Bank, 703 F.2d at 257.

33Doc. 15, pp. 1-2.
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of Professional Conduct 9(c) prohibits, i.e. a lawyer who has formerly represented a client in a
matter...shall not thereafter ... use information relating to the representation to the disadvantage
of the former client.

4.

Presumption.

Hulzebos' litigation and Tornow's former representation ofthe City overlap because Tornow
appears to possess confidential information acquired by him while in the employ of the City which
could be used to advance Hulzebos' position in her lawsuit against the City. Given that overlap, the
City has established a prima facie showing the transactions are substantially related. The burden
then shifts to Tornow to demonstrate that he could not have gained access to information while in
the employ of the City which could be useful in the Hulzebos lawsuit. Absent sufficient rebuttal,
the City satisfies its burden ofpersuasion. Importantly, Tornow cannot satisfy his burden ofrebuttal
simply by claiming no useful, confidential information was received during his employment with
the City.34 Tornow has not offered facts to demonstrate that he could not have gained access to
information while in the employ of the City which could be useful in the Hulzebos' lawsuit. The
City has refused to consent to Tornow's representation of Hulzebos in her lawsuit against the City.
Consequently, it is concluded that Tornow's representation ofHulzebos in her lawsuit against
the City violates South Dakota Rules of Professional Conduct, 1.11 and 9( c). A lawyer should be
disqualified as counsel if the lawyer is in violation of a disciplinary rule. 35

34United States v. Philip Morris, 312 F.Supp.2d 27,38-39 (D.D.C. 2004).
35Homestake Min. Co. v. Rd. ofEnvtl. Prot., 289 N.W.2d 561,563 (S.D. 1980).

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In closing it needs to be noted that In re: Discipline o/Tornow6 has been carefully reviewed.
There is nothing in that case which bears upon this decision. That case involved two matters
separate from and not substantially related to Hulzebos' case.
It is ORDERED that the City's motion to disqualify (Doc. 8) is GRANTED and R. Shawn

Tornow is disqualified from representing Shannon E. Hulzebos in her lawsuit against the City of
Sioux Falls, CIV. 13-4024.
Dated this 19th day of September, 2013.
BY THE COURT:

States Magistrate Judge

36In re: Discipline o/Tornow, 2013 WL 4027147.
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