Motion to Disqualify Counsel in Cynthia Kim Tran Vs. Eat Club, Inc.| Trellis.Law

On July 20, 2018 a Motion-Secondary was filed involving a dispute between Rosy Picasso, and for Other Employment Unlimited (15) in the District Court of Santa Clara County.

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MICHAEL HOFFMAN, Bar No. 162496
SATIA FAMILI, Bar No. 319215
ARENA HOFFMAN LLP
44 Montgomery Street, Suite 3520

Facsimile: 415.520.0446
Email: mhoffman@arenahoffman.com

EAT CLUB, INC.

STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

CYNTHIA KIM TRAN and ROSY

EAT CLUB, INC., a Delaware RT OF MOTION
TO DISQUALIFY COUNSEL

Time: 9:00 A.M.

Complaint Filed: July 20, 2018
Trial Date: Not Set

AND ALL ATTORN EYS OF RECORD:

Defendant Eat Club, Inc. submits the following Memorandum of Points and Authorities in

RENA HOFFMAN LLP
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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
TABLE OF CONTENTS

I. INTRODUCTION ............................................................................................................. 1

II. STATEMENT OF MATERIAL FACTS........................................................................... 2

A. Tran And Picasso Adopted And Implemented Eat Club Human
Resources Policies And Practices, Including Management Of Payroll ................. 2

B. Plaintiffs’ Counsel Is Concurrently Prosecuting This Wage Action, While
e Claims for Tran and Picasso ................... 3

C. Tran Guided The Discipline Of
Timecard Fraud ...................................................................................................... 4

D. Tran Attempted To Extort A Large Payment And Then Stole Her Company
Laptop And Documents Upon Being Notified Of Her Termination ..................... 4

E. Tran Solicited Litigants For Wage Claims ............................................................ 6

F. Plaintiffs’ Counsel Implicitly Linked Settlement Of The Tran And
ation Of The Class Claims ............................. 6

III. ARGUMENT .................................................................................................................

A. The Court And Defendant Have An Interest In Removing Conflicts .................... 7

1. The Firm’s Concurrent Representation Undermines Confidence
In The Attorney-Client Relationship ......................................................... 7

2. Conflicts Jeopardize Any Final Judgment Or Settlement For Eat Club .... 8

B. The Firm Has Conflicts Of Interest Which Preclude Joint Representation ........... 8

1. Concurrent Representation Of Clients With Adverse Interests
Grounds For Disqualification ..................................................... 8

2. Simultaneous Representation Of The Plaintiffs Compromises
The Firm’s Duty Of Loyalty To Tran and Picasso .................................... 9

3. The Firm Has Already Foregone A Potential Resolution Of The
Instant Claims In Order To Extract A Class Settlement In The
Action ........................................................................................ 12

4. Tran Disclosed Privileged Documents And Communications To The
Firm, Which Will Be Misused To Prosecute The Class Claims .............. 12

C. The Conflict Cannot Be Cured By Dumping One Client For Another................ 15
RENA HOFFMAN LLP
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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
IV. CONCLUSION ................................................................................................................ 15

RENA HOFFMAN LLP
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415.433.1414 MEMO RE MOTION TO DISQUALIFY ii. Case No. 18CV332082
TABLE OF AUTHORITIES

(N.D. Cal. 2008) 2008 WL 906496 ....................................................................................... 10

..................................................................................................

(2011) 196 Cal. App. 4th 37 ..................................................................................................

(2006) 39 Cal. 4th 299 ........................................................................................................

(1994) 9 Cal. 4th 275 ......................................................................................................... 7, 15

(2001) 89 Cal. App. 4th 294 ..................................................................................................

(1994) 7 Cal. 4th 1164 ........................................................................................................

......................................................................................................... 10

Howard Gunty Profit Sharing Plan v. Superior Court
(2001) 88 Cal. App. 4th 572 ...................................................................................................

(C.D. Cal. 2001) 179 F. Supp. 2d 1157 ................................................................................... 7

(1966) 241 Cal. App. 2d 520 ................................................................................................... 9

(9th Cir. 1995) 51 F.3d 1449 ..................................................................................................

Mavroudis v. Superior Court
(1980) 102 Cal. App. 3d 594 ................................................................................................. 1

(2000) 83 Cal. App. 4th 378 ..................................................................................................

(7th Cir. 2004) 356 F.3d 781 ..................................................................................................

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415.433.1414 MEMO RE MOTION TO DISQUALIFY iii. Case No. 18CV332082
People ex rel. Dept. of Corp. v SpeeDee Oil Change Sys., Inc.
(1999) 20 Cal. 4th 1135 .......................................................................................................

Pillsbury, Madison & Sutro v. Schectman
(1997) 55 Cal. App. 4th 1279 ................................................................................................ 1

(2008) 165 Cal. App. 4th 672 ................................................................................................ 1

Rittenhouse v. Superior Court
(1991) 235 Cal. App. 3d 1584 ............................................................................................... 13

(1999) 70 Cal. App. 4th 644 ..................................................................................................

(1999) 72 Cal. App. 4th 1422 .................................................................................................. 9

Southern Calif. Gas. Co. v. California Pub. Util. Comm’n
(1990) 50 Cal. 3d 31 ..........................................................................................................

Stenehjem v. Sareen
(2014) 226 Cal. App. 4th 1405 .............................................................................................. 12

Truck Ins. Exch. v. Fireman’s Fund Ins. Co.,
(1992) 6 Cal. App. 4th 1050 .............................................................................................. 8, 1

(4th Cir. 1977) 567 F.2d 270 ..................................................................................................

Walker v. Apple, Inc.
(2016) 4 Cal. App. 5th 1098 .............................................................................. 1, 9, 10, 11, 12

RENA HOFFMAN LLP
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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
Plaintiffs are the former chief of human resources of Defendant Eat Club, Inc. (“Eat Club”)

and her subordinate manager. Plaintiffs have retained Da Vega Fisher Mechtenberg, LLP (“the

Firm”) to prosecute their wrongful termination claims against Eat Club.

The Firm is concurrently prosecuting another action on behalf of former delivery employees,

seeking to represent a class of current and former Eat Club employees in a wage and hour class

action against the company. Plaintiffs are accused of adopting and implementing the wage policies

and practices at issue in that class action. To ef ss claims, the Firm would

need to zealously cross-examine Plaintiffs as the former human resources team and show that they

oversaw the wage violations, undermining their wrongful termination claims and credibility in this

action. Compounding problems, Plaintiff Tran appears to have provided the Firm with Eat Club’s

privileged documents and information (accessed through a stolen laptop), which the Firm will

presumably misuse for the benefit of the former delivery employees and the putative class. Notably,

when Eat Club invited settlement demands or mediation for Plaintiffs, the Firm ignored the overture

and instead proposed early medi

The Firm has a conflict of interest in concurrent actions and must be disqualified. As

the Court of Appeal reasoned when affirming disqualification in Walker v. Apple, Inc. (2016) 4 Cal.

rev. denied (Jan. 18, 2017), the Firm’s clouded loyalty to the class action plaintiffs

will force the Firm to cross-examine Plaintiffs Kim Tran (“Tran”) and Rosy Picasso (“Picasso”) in a

manner adverse to their interests. The Firm cannot zealously and ethically develop evidence in the

employees’ class action without reflecting dishonesty and fault by Tran and Picasso in performance

of their human resources job duties, that their termination would have been justified for

The conflict is irreconcilable. Because the Firm cannot play “hot potato” and dump the less

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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
STATEMENT OF MATERIAL FACTS

Plaintiffs Adopted And Implemented Ea

Practices, Including Ma

Eat Club hired Tran as Chief People Officer in December 2017; Picasso reported to her as

Senior HR Specialist. (Decl. Rodriguez at 1-2; Exh. 13, Tran Compl. at ¶¶6-7, 12-19; Exh. 19,

s human resources department (“HR”).

As HR managers, Tran and Picasso were responsible for advising Eat Club on wage matters

and employee discipline, adopting a meal period agreement, preparing the Eat Club employee

handbook, training managers on wage policies and compliance, and handling payroll. (Exh. 19,

Roster; Exh. 12, Tran and Picasso Decl.) Tran’s responsibilities were: oversee the entire HR

strategy for the company; build a scalable HR infrastructure; and lead the HR organization across all

areas of HR function (e.g., employee relations, employee communications, culture and engagement,

and HR systems, operations, and policies). (Exh. 16, Job Posting) Shortly after hire, Tran proposed

a 100-Day Plan setting out goals for HR. (Exh. 17, 100 Day Plan) Among other things, Tran

prepared a Meal Break Waiver Agreement for employees. (Decl. Jones at 1; Exh. 23, Waiver)

Tran and Picasso gave managers advice on employee counseling and discipline, employee

separations, wages and timekeeping, and compliance with company policies. (Decl. Cortes at 1-2;

Decl. Sanders at 2-3; Decl. Shirley at 2-3; Exh. 25, Jan. Emails; Exh. 26, Feb. Emails; Exh. 27, Feb.

Emails; Exh. 28, Feb. Emails; Exh. 3, Warning; Exh. 5, Warning; Exh. 6, Warning; Exh. 8, Feb.

Emails; Exh. 9, Warning) Picasso led an hour-long training session with managers on labor and

employment law, specifically meal periods and rest breaks. (Decl. Cortes at 1-2; Exh. 2, Training

Slides) Picasso admits that her job duties included compensation, benefits administration, record

keeping, employee safety/welfare, and daily HR

Tran was also tasked with payroll and managed Eat Club’s payroll and timecard processing.

(Decl. Rodriguez at 2) She restructured Eat Club’s payroll protocol in January and centralized

payroll to be managed by one person – either Tran or her delegate. ( .) In early April 2018, Chief

Financial Officer Jose Rodriguez met with Tran and discussed payroll compliance matters. (

After the meeting, he emailed Tran and directed her to consult with the company’s outside counsel,
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Thomas McInerney of Ogletree Deakins firm. ( . at 2; Exh. 20, April Emails) Tran had consulted

with the company’s outside counsel on other human resources matters. (Decl. Rodriguez at 2) At

that time, Tran knew that Mr. McInerney and Ogletree Deakins firm were defending the company in

a wage action pending in Santa Clara County Superior Court, Laufer v. Eat Club, Inc., which was

class-wide settlement. (

Plaintiffs’ Counsel Is Concurrently Prosecuting Tran and Picasso’s Discharge

Claims, While Also Prosecuting A Wage Class Action Against Eat Club

Plaintiffs Tran and Picasso filed the instant action against Eat Club claiming retaliation,

discrimination, and wrongful termination on July 20, 2018 (“Tran action”). They are represented by

the Firm, Da Vega Fisher Mechtenberg LLP. The Firm notified Eat Club of its concurrent

representation of Plaintiffs Tran and Picasso in the instant action after filing a separate class suit on

behalf of other former employees

action”). (Exh. 31, Fregoso Compl.)

In that putative class action, former employees Crystal Fregoso (“Fregoso”), Truc Bui

(“Bui”) (currently on leave), and Adrianna Rodriguez (collectively “ plaintiffs”) accuse Eat

Club of violating state wage laws: failure to pay minimum wage and overtime wages; failure to

provide meal periods and rest breaks; failure to furnish accurate wage statements; and failure to pay

xh. 31, Fregoso Compl. at ¶¶ 34-45) The plaintiffs worked

as Distribution Associates and/or Lunch/Snack Distribution Representatives (collectively “Delivery

Employees”) ( . at ¶¶ 13-15) The core factual allegations, while vague and conclusory, claim that

failed to provide compliant breaks.

Here, Tran alleges that Eat Club fired her for reporting alleged wage law violations,

including those at issue in the action. (Exh. 13, Tran Compl. at ¶¶ 2, 6, 29, 68, 72) She

contends that her discharge was motivated, in part, by the communications with outside counsel,

Thomas McInerney of Ogletree Deakins, on April 9, 2018. ( . at ¶ 23) According to Tran, she

raised the alleged wage law violations with Mr. Rodriguez, who referred her to attorney McInerney.

.) In fact, according to the actual email cited by Tran (stating the exact time of 12:45 PM,

implying possession of the email), Mr. Rodriguez wrote: “I want to get Tom’s perspective on the
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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
legal exposure regarding the incremental payroll compliance matters that you’ve identified.” (Exh.

20, Email at 3) Far from suppressing Tran’s voice, Mr. Rodriguez requests that Tran summarize her

observations for attorney McInerney for the purpose of getting that advice from outside counsel by

the end of the week. ( .) Mr. Rodriguez concluded: “I also want to make sure that we have a full

inventory of areas for discussion so we can get Tom’s feedback.” ( .) The timing of the email

coincides with Eat Club’s effort to secure final approval of a class settlement of Labor Code claims

brought by delivery drivers – and defended by Mr. McInerney’s firm. (Req. Jud. Notice and Exh.

d activity arises, in part, from Ea

Tran Guided The Discipline Of Fregoso And Bui For Timecard Fraud

Eat Club managers consulted with Tran on employee discipline and terminations. Specific to

this Motion, Tran gave advice to Eat Club managers on how to handle timecard fraud by two of the

named plaintiffs in the Fregoso

For example, in late-January and early-February of 2018, Eat Club managers documented

incidents when Fregoso and Bui misrepresented time spent working when, in fact, neither of them

was at work. (Decl Shirley at 2-3; Decl. Sanders at 2-3; Exh. 3, Warning; Exh. 5, Warning; Exh. 25,

Jan. Emails; Exh. 26, Jan. Emails) In each instance, Tran met with managers, guided the discipline

process and advised on the warnings. (Decl Shirley at 2-3; Decl. Sanders at 2-3; Exh. 25, Jan.

Emails; Exh. 26, Jan. Emails; Exh. 27, Feb. Emails; Exh. 7, Feb. Emails) Tran also provided

guidance on discipline for chronic attendance violations, as well as Fregoso’s discharge for job

abandonment. (Decl. Sanders at 2-3; Decl. Shirley at 2-3; Exh. 27, Feb. Emails; Exh. 28, Feb.

Emails; Exh. 29, Feb. Emails; Exh. 3, Warning; Exh. 5, Warning; Exh. 6, Warning; Exh. 8, Feb.

Emails; Exh. 9, Warning) In fact, Tran personally took over and handled all matters and

d Fregoso, including Fregoso’s disc

2-3; Exh. 8, Feb. Emails; Exh. 28, Feb. Emails; Exh. 29, Feb. Emails)

Tran Attempted To Extort A Large Payment And Then Stole Her Company

g Notified Of Her Termination

Tran was out of the office between May 24 and 30 of 2018. (Decl. Rodriguez at 2) When

Tran returned on May 31, Eat Club’s Chief Financial Officer, Jose Rodriguez, met with her to get
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guidance and insight for a reduction-in-force (“RIF”) planned for June 20, 2018. ( .) He told Tran

that the RIF was highly confidential and that only three executives knew about the RIF. ( . at 3)

He informed Tran that Eat Club would offer severance to the affected employees based on each

In response, Tran said that news of the planned RIF was “good” and asked to be included in

the RIF. (Decl. Rodriguez at 3) She said that two attorneys contacted her and spoke to her several

times. ( .) The attorneys planned to sue Eat Club for alleged labor, health, or safety violations.

.) Tran said the attorneys promised a “positive financial outcome” if she testified for them. (

Tran claimed to not know the attorneys’ names because they talked fast and their phones had a

not want to “have to lie” ( for the lawyers), so Eat

ter into a release agreement. ( .) Tran claimed to want to

contribute the severance money for a charity. ( .) Mr. Rodriguez told Tran that lying under oath

was against the law; he urged her to tell the truth. ( .) He asked Tran why she did not simply hang

names or phone numbers; Tran did not answer. (

Eat Club viewed Tran’s demand as extortionate and terminated her on June 1, 2018. (Decl.

Rodriguez at 3) During Tran’s exit meeting on June 1, Eat Club offered her the same severance as

others included in the RIF based on tenure and position: one month salary based on her brief service

(six months). ( .) Tran scoffed at the severance and said, “You will hear from my attorney.” (

Mr. Rodriguez asked Tran to return her company-owned laptop and security badge. ( .) She said

that the company laptop was at home; she claimed the laptop stopped working and she was now

using a personal laptop. ( .) Tran then placed a silver Acer notebook computer in her bag and left

.) She agreed to return the company laptop to a colleague, Naomi Lile. (

Tran ignored multiple requests and never returned the company’s laptop computer. (Decl.

Rodriguez at 3; Exh. 22, June 4 Email; Exh. 10, June 14 letter; Decl. Baker at 1-2) Reports from Eat

Club’s IT vendor, Kinetix, indicate that Tran used the laptop in June, July, and September of 2018,

after her termination. (Decl. Huron at 2; Exh. 24, Kinetix Report) Moreover, an inference from

Plaintiffs’ Complaint is that she is relying on emails of privileged attorney-client communications to

prosecute the instant action. (Exh. 20, Emails; Exh. 13, Tran Compl. at ¶ 23; Decl. Rodriguez at 2)
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During her employment, Tran and her staff handled payroll and employee relations, such as

complaints about wages. (Decl. Rodriguez at 2; Exh. 16, Job Duties) One delivery representative

Cristina Gutierrez, he had been trying to contact Tran in May 2018 for assistance with a leave of

absence, work restrictions, and bonus eligibility. (Decl. Stice at 1-2) By Ms. Gutierrez’s last day of

Ms. Gutierrez then received an email to her personal account from Tran asking for her

number. Tran wrote: “hi, Cristina. It’s Kim Tran. I was trying to help you with the SUV bonus and

vacation requests at Eat Club [not meal periods or rest breaks]. Can I have your phone number so I

can call you for something important? If you want, please call me at [number]. I believe I have a

very good solutions [sic] that can help you a lot financially. Thanks, Kim.” (Decl. Stice at 2; Exh. 1,

Email) An inference is that Tran would not disclose the subject in writing and wanted to speak by

Linked Settlement Of Pl

Da Vega Fisher Mechtenberg LLP, on July 10,

2018. (Decl. Hoffman at 2) In correspondence between counsel, Eat Club invited Plaintiffs to

communicate a settlement proposal or interest in mediation. (Exh. 11, Emails) Plaintiffs never

conveyed a proposal, nor have they expressed an interest in mediation or any other form of

ment conference. (Decl. Hoffman at 2; Exhs. 11, 12)

A few days later, on July 20, 2018, and in response to Eat Club’s settlement overture, the

Firm provided “settlement” declarations from Tran and Picasso and yet invited Eat Club to “discuss

early resolution / mediation of these class claims” – not settlement of the individual claims of Tran

or Picasso. (Exh. 12, Email) To date, Eat Club has not received substantive information,

documents, or “draft” evidence from the plaintiffs about their claims. (Decl. Hoffman at 2)

The inference was clear: before discussing settlement of Tran

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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
ARGUMENT

The Court And Defendant Have An Interest In Removing Conflicts

Although some deference is afforded to a client’s choice of counsel, “the paramount concern

must be to preserve public trust in the scrupulous administration of justice and the integrity of the

bar. The important right to counsel of one’s choice must yield to ethical considerations that affect

the fundamental principles of our judicial process.” People ex rel. Dept. of Corp. v. SpeeDee Oil

Change Sys., Inc., (1999) 20 Cal. 4th 1135, 1145. The concern here is twofold: (1

interest in protecting the process and sanctity of the attorney-client relationship; and (2) Eat Club has

an interest in securing an enforceable judgment or settlement.

The Firm’s Concurrent Representati

Attorney-Client Relationship

The rule against dual representation of clients with adverse interests “derives from a concern

with protecting the integrity of the attorney-client relationship rather than from concerns with the

risk of specific acts of disloyalty or diminution of the quality of the attorney's representation.”

Forrest v. Baeza (1997) 58 Cal. App. 4th 65, 74. Trust and confidence in counsel are essential to the

effective functioning of the attorn Flatt v. Superior Court (1994) 9

Cal. 4th 275, 285. Concurrent representation diminishes this security. To preserve the value of the

attorney-client relationship, courts resolving conflicts of interest must “resolve all doubts in favor of

disqualification” in order to “prevent the appearance of impropriety.” United States v. Clarkson (4th

Class actions are “rife with potential conflicts of interest between class counsel and class

members.” Mirfasihi v. Fleet Mort. Corp. (7th Cir. 2004) 356 F.3d 781, 785 (collecting cases).

Related, the Court must remain cognizant of “lawyer-driven litigation” and potential abuses by

attorneys serving as the primary beneficiaries of class actions. Howard Gunty Profit Sharing Plan v.

Superior Court (2001) 88 Cal. App. 4th 572, 578. The Firm is “subject to a ‘heightened standard’

which they must meet if they are to be allowed by the Court to represent absent class members.”

Huston v. Imperial Credit Commer. Mort. Invest. Corp. (C.D. Cal. 2001) 179 F. Supp. 2d 1157,

1167. This heightened responsibility to absent class members whose control over their attorney is
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limited “does not permit even the appearance of divided loyalties of counsel.” Kayes v. Pac. Lumber

(9th Cir. 1995) 51 F.3d 1449, 1465. The reason is elementary: “Unidentified class members

cannot waive a potential conflict of interest.” Cal. Pak Delivery, Inc. v. United Parcel Serv

52 Cal. App. 4th 1, 12. Thus, in addition to the judicial process, the Court must protect a client’s

Conflicts Jeopardize Any Final Judgment Or Settlement For Eat Club

In addition to the more active role for Court, e in ethical compliance

by opposing counsel. “[W]here there is reason to doubt the loyalty of counsel or the adequacy of

counsel’s representation, serious questions arise concerning the preclusive effect of any resulting

judgment” and the accompanying risks posed to both putative class members the

Cal. Pak Delivery, 52 Cal. App. 4th at 11-12. Simply put, the results of the

litigation – either final judgment or class settlement – face the ongoing risk that any objector (class

member, intervening attorney, appellate court, et al.) will vitiate the outcome and force Eat Club to

The Firm Has Conflicts Of Interest Which Preclude Joint Representation

Representation of the plaintiffs and the Plaintiffs raises conflicts of interest

that are both inherent and specific to the available evidence before the Court: (1) the adverse

interests result in automatic disqualification; (2) the Firm has linked settlement of the action to

an early classwide settlement of the action; and (3) the evidence indicates that the Firm will

use Eat Club’s privileged and confidential records – stolen by Tran – for the benefit of the Fregoso

class. All three of these dynamics, either individually or based on the totality of the circumstances,

tion of the Firm.

Concurrent Representation Of Clients With Adverse Interests Is

The Firm is concurrently prosecuting the and actions in Santa Clara County

Superior Court. 9 Cal. 4th at 283. The fiduciary value at stake in cases of simultaneous

representation is an attorney’s duty of loyalty, which must remain undivided. Truck Ins. Exch. v.

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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
Fireman's Fund Ins. Co. (1992) 6 Cal. App. 4th 1050, 1056. The duty of loyalty is, in essence, the

The loyalty counsel owes one client cannot compromise the duty to another.

Millington (1966) 241 Cal. App. 2d 520, 526-27. A conflict arises when the circumstances of one

case present a “substantial risk that the lawyer’s representation of the client would be materially and

adversely affected … by the lawyer's duties to another current client.” Walker, 4 Cal. App. 5th at

1110. When counsel concurrently represents separate clients with adverse interests, disqualification

follows automatically in all but a few instances. Flatt, 9 Cal. 4th at 284. The intent or motive of

is immaterial for conc

For the reasons explained below, the Firm has a conflict of interest in prosecuting the

actions. Contrary to the Firm’s misguided tive cases to lever up

and extract payments, the conflicting interests will inevitably lead to compromised loyalties in the

actual advocacy and outcomes for the litigan

Simultaneous Representation Of The Plaintiffs Compromises

The Firm’s Duty Of Loyalty To Tran And Picasso

Walker v. Apple, supra, the Court of Appeal affirmed a

class action. The Walkers, former employees in an Apple retail store, brought a putative class action

for wage law violations. The Walkers claimed that Apple failed to deliver compliant wage

statements to employees upon termination of employment. ., 4 Cal. App. 5th at 1103. Apple
denied it had a uniform policy of withholding final wage statements and asserted store managers

(aka, leaders) were responsible for handling all terminations, including delivery of final paychecks

and wage statements. . at 1104. The Walkers’ store leader, Meg Karn, was an unnamed class

member in another wage action against Apple, the certified Felczer class, and represented by the

same firm as the Walkers. Apple moved for di firm had “irreconcilable

Courts recognize two rare exceptions to automa
withdraws from an unforeseen adverse representation which occurred by “mere happenstance”; or

arose simply due to a
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conflicts of interest” by virtue of its concurrent representation of both the Walkers and certified

Felczer class. . To prosecute the Walkers’ claim of Apple having a policy of not providing final

wage statements, the firm needed to cross-examine Karn and have her contradict Apple’s assertion

that she was ultimately responsible for providing the Walkers’ final wage statements. Alternatively,

the firm would force Karn to admit on cross-examination that she was either unaware of this

responsibility, or was aware of but failed to fulfill it. Either way, the firm would be forced to

impeach its own client on managerial competence. . Even though the plainti

straddle both cases with nuanced theories, the Court of Appeal agreed that conflict of interest

principles precluded the firm from representing both parties in pending actions. . at 1113-14. The

practical interest in not having her own counsel portray her as a

liar or manager who violated company policies.

applies here. Mr. Rodriguez and other Eat Club managers offered evidence that Tran

and Picasso were responsible for advising on wage matters and discipline, adopting a meal period

agreement, preparing the employee handbook, training managers on wage policies and compliance,

and handling payroll. Plaintiffs will surely taut their job performance to bolster the instant

termination suit, such as properly training managers on wage policies and compliance, preparing the

accurate payroll records, and fairly resolving of alleged wage complaints of employees. Any

prospective class counsel would be expected to cross-examine and impeach Plaintiffs for drafting

and adopting policies, training managers, and implementing practices at issue in the case –

except a conflicted counsel trying to avoid potential embarrassment and financial losses for those

clients. Tran faces the added problem of defending a cross-action alleging that she is a thief and a

grifter: stealing company property and documents, trying to extort money for truthful testimony, and

soliciting litigation against the company. The Firm has a direct conflict. Baas v. Dollar Tree Stores,

, No. (N.D. Cal. 2008) 2008 WL 906496, at *2 (“The spectacle of an attorney skewering [their]

own client on the witness stand in the interest of [representing] another client demeans the integrity

of the legal profession and undermines confidence in the attorney-client relationship”);

Paicius (2003) 109 Cal. App. 4th 452, 467 t existed when counsel needed to

cross-examine plaintiff’s medical expert, whom he also represented in another malpractice case).
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415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
Tran and Picasso have a right to not have their capability challenged by their own counsel

while prosecuting the Fregoso action. Like Karn in Walker, Plaintiffs do not have a direct stake in

the outcome of the Fregoso litigation – they are neither class members nor in jeopardy of being

liable to the plaintiffs – they do however have a substantial interest in preserving the image

of their managerial competence. , 4 Cal. App. 5th at 1112-13. Zealous advocates for the

Fregoso plaintiffs would cross-examine and impeach Tran and Picasso as: (a) part of a human

resources management which adopted and/or turned a blind eye toward alleged wage law violations;

(b) incompetent in performance of their human resources job duties; and (c) lying to mask their

involvement or incompetence. Plaintiffs would indeed be trapped by their own counsel. Irrelevant of

their testimony, they would irreparably damage their individual claims for wrongful termination and

retaliation. The pressure imposed by their counsel to testify ag

necessarily diminish Plaintiffs’ confidence in the Firm’s loyalty. Alternatively, if the Firm examines

Tran and Picasso with “kid gloves” to soften or avoid admissions undermining their credibility as

purported whistleblowers in the instant action, the Firm would breach its duty of loyalty to the

By the same token, clients of the Firm (Fregoso and Bui) will offer testimony against another

client of the Firm (Tran) for being dishonest and incompetent. Evidence before the Court shows that

Tran helped to discipline Plaintiffs Fregoso and Bui for timecard fraud. As Chief People Officer and

lead for employee relations and workplace investigations, Tran presumably investigated and verified

the timecard fraud by Bui and Fregoso – or she utterly failed to perform her job duties. Unless

Fregoso and Bui admit to timecard fraud (and the resulting consequences to their claims and class

representative status), the Firm has a duty to cross-examine and impeach Tran in order to preserve

the credibility of clients Fregoso and Bui in the Fregoso a direct conflict.

In sum, to fulfill duties owed to its clients in the action, the Firm would necessarily

breach duties owed to Plaintiff in the instant action. Zealous prosecution of the action

freely cross-examine and impeach Tran and Picasso

– even if that means faulting them for failing to honestly and competently perform their duties as

human resources managers. Zealous counsel must also protect the claims of absent class members
RENA HOFFMAN LLP
44 Montgomery Street
Suite 3520
San Francisco, CA 94104
415.433.1414 MEMO RE MOTION TO DISQUALIFY Case No. 18CV332082
by preserving the credibility of the class representatives Fregoso and Bui, such as the timecard fraud

and related discipline which Tran endorsed. conflicts are inherent, real, and unavoidable, not

speculative or hypothetical. The Firm’s apparent effort to straddle both sides of the cases with some

Walker

The Firm Has Already Foregone A Potential Resolution Of The Instant

Action

In addition to the conflicts arising from compromised prosecution of the respective actions,

the Firm has a fiduciary duty not to “sell out” one client for the financial benefit of another client or

Cal. Pak Delivery clearly compromised on this issue.

The claims brought by Plaintiffs are individual in nature, limited in scope, and only seek

monetary payments. At the outset of the instant dispute, Eat Club invited the Firm to convey a

settlement demand or consider mediation on behalf of Plaintiffs. In response, the Firm sent vague

and conclusory “settlement” declarations from Tran and Picasso for the purpose of exploring an

early classwide mediation and/or settlement of the action, not the individual claims of Tran

Case Info

Judge

Maureen A. Folan Track Judge’s New Case

Case No.

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Document Filed Date

October 29, 2018

Case Filing Date

July 20, 2018

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Motion-Secondary: Cynthia Kim Tran Vs. Eat Club, Inc.

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