## Facts

- Bumble and Bumble Products, LLC contracted with Merits Incentives, LLC, Ramon DeSage, and Cadeau Express, Inc. to distribute Bumble’s salon products to the Wynn Hotel in Las Vegas.
- Bumble later discovered products being sold through unauthorized retail outlets and sued petitioners for breach of contract, fraud, and injunctive relief.
- Bumble’s counsel received an unsolicited anonymous package containing a disk with electronic files relating to petitioners, including at least one document later deemed privileged (a draft affidavit).
- Counsel repeatedly disclosed the disk and its anonymous origin through supplemental NRCP 16.1 disclosures and pursued discovery to authenticate the disk’s contents.
- Petitioners did not promptly object; they waited about eight months to assert privilege claims and move to disqualify Bumble’s counsel, arguing the materials were misappropriated and implicated a prior injunction from separate litigation involving a former employee.
- The district court found counsel received the disk from an unsolicited, anonymous source, that counsel satisfied ethical obligations through disclosure, and that only the draft affidavit was privileged; it denied disqualification.

## Issues

1. What ethical duties apply in Nevada when an attorney receives unsolicited confidential documents from an anonymous source, potentially including privileged material?
2. What factors should district courts apply when deciding whether to disqualify counsel based on receipt and review of unsolicited confidential documents from a third party?
3. Whether the district court abused its discretion in denying disqualification, warranting extraordinary writ relief.

## Decision

- The Nevada Supreme Court entertained the petition for extraordinary writ relief but denied relief.
- The court held that, although no Nevada professional-conduct rule directly governed the scenario, counsel satisfied ethical duties by promptly notifying opposing counsel of the disk through NRCP 16.1 disclosures.
- The court adopted a factor-based framework for evaluating disqualification motions grounded on receipt of unsolicited confidential materials.
- Applying those factors, the court held the district court did not abuse its discretion in denying disqualification, given the anonymous unsolicited receipt, repeated disclosure, lack of evidence counsel procured wrongdoing, limited privileged content, and insufficient showing of irremediable prejudice.

## Legal Principles

- When counsel receives unsolicited confidential materials from an anonymous source, prompt notice to opposing counsel may satisfy ethical obligations, even absent a specific Nevada rule addressing the precise circumstance.
- Disqualification is a severe remedy committed to the district court’s discretion and generally requires a contextual showing that lesser measures cannot address the problem.
- In assessing disqualification based on unsolicited confidential materials, courts should consider:
  - how the information was obtained and whether counsel participated in or encouraged misconduct;
  - whether counsel promptly notified the opposing party and avoided concealment;
  - the nature and extent of the materials, including whether they are privileged or work product;
  - whether the receiving party gained an unfair advantage causing substantial prejudice not curable by narrower remedies; and
  - whether counsel’s conduct violated or knowingly exploited violation of an existing court order restricting dissemination.
- Extraordinary writ relief from an order denying disqualification is discretionary and requires a clear abuse of discretion or manifest legal error.

## Conclusion

The Nevada Supreme Court refused to disqualify counsel who received anonymous confidential documents after concluding counsel met ethical duties by prompt disclosure and that disqualification turns on a factor-based, prejudice-focused inquiry rather than a per se rule.


Merits Incentives, LLC v. Eighth Judicial Dist. Court, 262 P.3d 720 (Nev. 2011)