A case from the Central District of California earlier this year highlights the critical issue of the timeliness of erecting a wall.
In Signature MD, Inc. v. MDVIP, Inc., the defendant moved to disqualify plaintiff’s counsel on the grounds it had previously represented the defendant from 2008 to 2012. The motion was granted because the current and former relationships were substantially similar and because the ethical wall the plaintiff’s counsel’s firm had erected was ineffective.
In fact, the wall was erected two days after the firm was retained by plaintiffs. There was no evidence preventative measures were in place before the wall went up to prevent disclosure of privileged information. Even declarations stating that there was no disclosure during that time would not have helped defeat the motion.
LESSON TO BE LEARNED: It is essential that no work be done before an ethical wall is in place. Courts will require strict compliance with all the elements of an effective ethical wall when ruling on a motion to disqualify. The timeliness of erection of the wall can make all the difference.