Facts
- Richard and Debra Plein insured their home with USAA Casualty Insurance Company (USAA).
- After a home fire, the Pleins sued USAA in Washington superior court, alleging insurance bad faith and related claims based on USAA’s handling of their claim.
- The Pleins retained counsel including attorneys from Keller Rohrback LLP (Keller).
- Keller, through attorney Irene Hecht and others, had previously represented USAA in Washington for roughly a decade, including many insurance matters.
- USAA asserted Keller had obtained confidential information about USAA’s claims handling, business practices, and litigation strategies during the prior representation.
- USAA objected to Keller’s representation of the Pleins and argued Keller should be disqualified under Washington Rule of Professional Conduct (RPC) 1.9(a) absent USAA’s consent.
Issues
- Under RPC 1.9(a), when are a lawyer’s former and current representations “substantially related” so as to require disqualification in a later, adverse matter without the former client’s informed consent?
- Does a law firm’s general knowledge of a former institutional client’s claims-handling and litigation “playbook,” gained through many prior matters, establish the required substantial relationship?
Decision
- The Washington Supreme Court reversed the Court of Appeals and reinstated the trial court’s order denying disqualification.
- The Court held USAA did not show a substantial risk that Keller obtained confidential factual information in the prior representation that would materially advance the Pleins’ position in their bad-faith suit.
- The Court concluded that generalized institutional or strategic knowledge about how USAA typically litigates did not, by itself, satisfy the “substantially related” requirement under the current RPC 1.9 framework.
Legal Principles
- Under RPC 1.9(a), disqualification in a later, materially adverse matter requires a showing that the matters are the same or “substantially related,” unless the former client gives informed consent.
- The “substantially related” inquiry centers on whether there is a substantial risk the lawyer obtained confidential factual information in the former representation that would materially advance the new client’s position in the later matter.
- Generalized knowledge of a former client’s typical strategies, practices, or preferences, without a showing of materially useful confidential factual information tied to the later dispute, is insufficient to establish substantial relation.
- The former client bears the burden to demonstrate the substantial risk of materially useful confidential factual information; broad assertions based on the volume or similarity of prior work are inadequate.
Conclusion
The Washington Supreme Court held that a former client seeking disqualification under RPC 1.9(a) must identify a substantial risk that the lawyer possesses confidential factual information from the prior representation that could materially aid the new adverse client; generalized “playbook” knowledge from past work for an institutional client does not automatically require disqualification.