## Facts

- Banning Ranch is an approximately 400-acre coastal property in Orange County, California.
- The City of Newport Beach approved plans for a four-lane divided highway across the property.
- Banning Ranch Conservancy, a nonprofit, opposed the project and participated in the CEQA review process.
- In April 2010, the Conservancy (represented by Shute, Mihaly & Weinberger) filed a CEQA action challenging the project approval and adequacy of the EIR.
- The City had retained the Shute firm in multiple matters from 2000 to 2005, all closed.
- In 2005, the City and the Shute firm signed two identically worded, open-ended fee agreements contemplating future work on an as-requested basis.
- The Shute firm did limited work under the 2005 agreements, issued a final invoice in 2005, and had no further legal communications with the City from early 2006 through 2010.
- During the same period, the City retained numerous other law firms for CEQA and related legal work.

## Issues

1. Whether the City was a “current client” of the Shute firm in 2010 based solely on open-ended 2005 fee agreements with no subsequent work or communications.
2. If not a current client, whether automatic disqualification for simultaneous adverse representation was improperly applied.

## Decision

- The Court of Appeal granted writ relief and vacated the trial court’s disqualification order.
- The court held the 2005 open-ended “framework” agreements did not establish a current attorney-client relationship at the time of the CEQA litigation.
- Because the City was, at most, a former client, the automatic disqualification rule for concurrent conflicts did not apply.
- The trial court abused its discretion by treating the City as a current client and disqualifying counsel without applying the former-client conflict analysis.

## Legal Principles

- An attorney is automatically disqualified when representing adverse interests of two current clients, based on the duty of loyalty.
- “Current client” status depends on the actual existence of an ongoing attorney-client relationship, evaluated objectively through conduct, communications, and reasonable expectations, not merely contractual labels.
- A “framework” fee agreement that sets terms for potential future engagements, without a fee to secure availability and without an obligation to accept future work, does not by itself create an ongoing attorney-client relationship.
- Where the relationship is one of successive (former-client) representation, disqualification turns on standards applicable to former-client conflicts, including protection of confidential information and relatedness of matters.

## Conclusion

The court held that dormant, open-ended fee agreements did not convert a completed municipal engagement into a continuing current-client relationship, and it set aside disqualification that relied on the automatic concurrent-conflict rule rather than the former-client framework.


Banning Ranch Conservancy v. Superior Court, 193 Cal. App. 4th 903 (Cal. Ct. App. 2011)