Visa USA Inc. v. First Data Corp.
Citation and Court
241 F. Supp. 2d 1100 (N.D. Cal. 2003), United States District Court for the Northern District of California
Facts
Visa sought to disqualify Heller Ehrman, counsel for First Data Corp., because a partner at Heller Ehrman had previously represented Visa on matters substantially related to the current litigation. The firm argued that it had implemented adequate screening (ethical wall) procedures when the conflicted attorney joined the firm to prevent the tainted attorney from participating in or sharing information about the Visa-adverse matter.
Issue
Whether an ethical screen (Chinese wall) implemented after a conflicted attorney’s lateral move to a new firm is sufficient to prevent imputed disqualification of the entire firm under California professional responsibility rules.
Holding
The district court denied disqualification, finding that the screening procedures were implemented promptly and effectively, and that the ethical wall was sufficient to rebut the presumption of shared confidences and prevent firm-wide imputation of the conflict.
Rule / Doctrine
When a lawyer with a conflict of interest (due to prior representation of an adverse party) moves laterally to a new firm, the conflict is generally imputed to the entire new firm. However, timely and effective screening measures — including prohibiting the conflicted attorney from participating in the matter, sealing relevant files, and establishing procedures to ensure no information sharing — may rebut the presumption of imputed disqualification in some jurisdictions.
Significance
Visa USA v. First Data Corp. is a significant case on attorney disqualification motions and the use of ethical screens to manage lateral hire conflicts. It is important for understanding the limits of imputed disqualification and the conditions under which screening is or is not a sufficient remedy, particularly in jurisdictions that follow California’s rules or the Model Rules as amended to permit screening in lateral hire situations.