Plein v. USAA Cas. Ins. Co.

FILE THIS OPINION WAS FILED
FOR RECORD AT 8 A.M. ON
IN CLERK’S OFFICE MAY 21, 2020
SUPREME COURT, STATE OF WASHINGTON
MAY 21, 2020
SUSAN L. CARLSON
SUPREME COURT CLERK

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

RICHARD PLEIN, a married person, and No. 97563-9
DEBRA PLEIN (formerly Debra De Witt),
a married person, and the marital EN BANC
community composed thereof,
Filed May 21, 2020
Petitioners,
v.

USAA CASUALTY INSURANCE
COMPANY, an insurance company,

Respondent,

and

THE STERLING GROUP, INC. (doing
business as Sterling Group, DKI), a
corporation,

Defendant.

GORDON McCLOUD, J.—Richard and Debra Plein sued USAA Casualty

Insurance Company, alleging insurance bad faith. The Pleins hired three attorneys,

two of whom were members of the Keller Rohrback LLP lawfirm (Keller), to

represent them. But Keller had previously defended USAA in bad faith litigation

for over 10 years.
No. 97563-9

Under the Rules of Professional Conduct, RPC 1.9(a) would bar Keller from

representing the current clients, the Pleins, against former client USAA if the prior

representation was in a matter “substantially related” to the current Plein1 matter.

We have never interpreted the meaning of this “substantially related” language

under RPC 1.9(a). And since the last Court of Appeals decision interpreting this

language, we amended the RPCs substantially and added two comments to guide

our interpretation of RPC 1.9(a)’s “substantially related” language.

We now hold that under current RPC 1.9(a), USAA fails to show a

“substantial risk” that Keller obtained “confidential factual information” that would

“materially advance” the Pleins’ case. RPC 1.9 cmt. 3. Accordingly, Keller did not

represent former client USAA on any matter “substantially related” to the instant

case. We therefore reverse the Court of Appeals decision that disqualification was

required and reinstate the trial court’s order that disqualification was not required.

FACTUAL AND PROCEDURAL HISTORY

I. KELLER’S REPRESENTATION OF USAA

Irene Hecht and her team at Keller represented USAA between 2007 and

2017. Clerk’s Papers (CP) at 29. According to Keller, that representation of USAA

1
Plein v. USAA Cas. Ins. Co. et al., King County Superior Court No. 17-2-
29542-6 SEA.

2
No. 97563-9

in Washington included “over 165 matters between August 2006 and November

2017” and Keller had access to the following information:

a. The business customs and practices, including confidential
claims handling materials and business relationships with
outside companies and vendors;
b. The thought processes of adjusters, business
representatives, and in-house attorneys; and
c. Business and litigation philosophies and strategies, including
approaches to settlement discussions, motion practice, case
analysis, defenses, witness meetings, witness preparation, trial
preparation, and discovery both on a case-by-case and
institutional, company-wide level.

CP at 99. Further, Keller acknowledges that during the course of its representation

of USAA, Keller

a. Had regular in-person and telephonic access to company
employees, executives, and in-house attorneys relative to
insurance claims and related Alleged Bad Faith Litigation;
b. Provided USAA CIC and its affiliated companies with advice,
including as to insurance coverage matters, litigation strategies,
factual positions, litigation mitigation recommendations for
training and communication materials, and legal arguments;
and
c. Was provided with electronic login credentials to certain
internal proprietary and confidential documents regarding
insurance bad faith litigation, including document repositories
holding attorney-client information and electronic claim
databases; and
d. Actively participated in court appearances, depositions, written
court filings, correspondence, and mediations on behalf of
USAA CIC and its affiliated entities.

CP at 100-01. Keller acted as USAA’s sole defense counsel against four bad faith

3
No. 97563-9

claims in Washington. CP at 100. USAA alleged that Keller “had (and has)

extensive knowledge of how USAA CIC’s adjusters analyze and handle

homeowner’s insurance claims and the interplay of this knowledge with the

companies’ litigation strategy and analysis in defending Alleged Bad Faith

Litigation in Washington.” CP at 103.

Finally, between 2010 and 2012, Keller defended a USAA subsidiary in a

Pierce County matter (Cueva 2 matter) against allegations of “bad faith relating to

the handling of the fire and smoke damage claim to their house.” CP at 102. In the

Cueva matter, the Cuevas alleged that USAA “failed to provide adequate alternative

housing” during repairs to their home after a fire. CP at 119.

II. PLEIN LAWSUIT
3
In 2016, a fire damaged the Pleins’ home and personal property. CP at 140.

USAA agreed that the Pleins’ homeowners’ insurance policy covered the damage.

Id. On USAA’s recommendation, the Pleins hired The Sterling Group, Inc. to

repair the damage. Id. But rather than repair the home, Sterling “concealed

unrepaired fire damage.” In addition, the work that Sterling did contained

“numerous deficiencies.” CP at 140-41. USAA nevertheless declined to pay the

2
Cueva v. Garrison Prop. & Cas. Ins. Co., Pierce County Superior Court No. 10-
2-06680-8.
3
These facts are drawn from the allegations in the Pleins’ first amended complaint.
4
No. 97563-9

Pleins for either the cost of additional repairs to their home or the cost of the

temporary living arrangements while their home was uninhabitable. CP at 141.

The Pleins hired attorney Joel Hanson to represent them in a lawsuit against

USAA and Sterling, alleging insurance bad faith, violation of the Consumer

Protection Act (CPA), ch. 19.86 RCW, and several other claims. CP at 142-44.

Soon after filing the lawsuit, Hanson consulted with two Keller attorneys, William

Smart and Ian Birk. 4 CP at 8. The Pleins hired Smart and Birk to represent them

along with Hanson. CP at 8-9.

USAA then demanded that Keller immediately withdraw from representing

the Pleins due to a conflict of interest. CP at 60. USAA stated that it would move to

disqualify if Keller did not comply within 24 hours. Id. USAA also stated that it

would move to disqualify Hanson “on the grounds that his representation is likewise

tainted by this direct conflict.” 5 Id.

The Pleins moved for a ruling regarding the “asserted conflict of interest.”

CP at 13. The trial court considered briefing and unrebutted declarations and then

issued an order concluding that “the Plein matter is factually distinct from and not

4
Birk continues to appear as a counsel of record before this court. Smart filed a
notice of withdrawal on January 9, 2020.

When the Court of Appeals accepted interlocutory review, it declined review as to
5

Hanson. Only the issue of Keller’s representation of the Pleins remains before this court.

5
No. 97563-9

substantially related to the firm’s prior representation of USAA, and as a result,

the firm’s representation of the Pleins is not a conflict under RPC 1.9.” CP at 129.

Accordingly, the trial court allowed Keller to continue to represent the Pleins. CP

at 130.

USAA moved for discretionary review of this conflict issue. The Court of

Appeals granted review and reversed. Plein v. USAA Cas. Ins. Co., 9 Wn. App. 2d

407, 445 P.3d 574 (2019). After acknowledging its previous test for “substantially

related” matters under RPC 1.9, the appellate court recognized that RPC 1.9 and its

comments had been amended in 2006. Id. at 415-16. Since those 2006 changes,

“no published Washington case ha[d] interpreted the comments to RPC 1.9 in order

to address the definition of ‘substantially related matter.’” Id. at 416. Relying

largely on comment 3 to RPC 1.9, the Court of Appeals noted that “[w]hile the

specific fact of the Pleins’ case may qualify as distinct, Keller learned significant

confidential information about USAA’s strategies for bad faith litigation.” Id. at

418. Because USAA showed “a significant risk that Keller ha[d] knowledge of both

specific and general confidential information that could materially advance the

Pleins’ case,” it held that RPC 1.9(a) precluded Keller’s representation of the

Pleins. Id. at 419.

We granted review, 194 Wn.2d 1009 (2019), and now reverse.

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No. 97563-9

ANALYSIS

RPC 1.9(a) states:

A lawyer who has formerly represented a client in a matter shall not
thereafter represent another person in the same or a substantially
related matter in which that person’s interests are materially adverse to
the interests of the former client unless the former client gives informed
consent, confirmed in writing.

(Emphasis added.) The parties agree that Keller formerly represented USAA and

that it now seeks to represent the Pleins,6 whose interests are materially adverse to

the interests of USAA. The parties also agree that USAA does not consent to this

representation. Thus, the question presented is whether the Plein matter is

“substantially related” to any matter on which Keller previously represented USAA.

The Court of Appeals has applied RPC 1.9(a)’s “substantially related”

language many times over the years. 7 We have not. And, as the Court of Appeals

6
While the Pleins have not hired Hecht herself, the ethical rules extend her conflict
to all Keller firm members. RPC 1.10(a) (“[W]hile lawyers are associated in a firm, none
of them shall knowingly represent a client when any one of them practicing alone would
be prohibited from doing so by Rules 1.7 or 1.9.”). The Pleins argue, in a single paragraph,
that the Court of Appeals erred by relying on this imputation of conflicts rule. Pleins’
Suppl. Br. at 21 & n.20. But they acknowledge that the screening rules they cite do not
apply to attorneys who remain at the same firm with the allegedly conflicted attorney. Id.
The Pleins suggest no reading of RPC 1.10 that would not impute Hecht’s conflict to Birk.
7
See, e.g., State v. Hunsaker, 74 Wn. App. 38, 43-45, 873 P.2d 540 (1994)
(comparing the “majority rule” “factual context” test with the Second Circuit Court of
Appeals’ “patently clear” test and choosing to apply the “factual context” test) (citing
State v. Stenger, 111 Wn.2d 516, 760 P.2d 357 (1988)); Sanders v. Woods, 121 Wn. App.
593, 598, 89 P.3d 312 (2004) (restating and applying Hunsaker’s three-part “factual
context” test).
7
No. 97563-9

recognized, we amended the RPCs and their comments substantially in 2006. RPC

Table of Rules, 157 Wn.2d 1135 (2006); see Wallace v. Evans, 131 Wn.2d 572,

577, 934 P.2d 662 (1997) (old cases may be “superseded by a significant change in

the rule they interpret”). For purposes of this case, our amendments to RPC 1.9

effectively adopted the American Bar Association’s Model Rules of Professional

Conduct (ABA Model Rule) and their comments.

I. WE REVIEW INTERPRETATION OF A COURT RULE DE NOVO

“Whether attorney conduct violates the relevant RPCs is a question of law,

which we review de novo.” State v. Nickels, 195 Wn.2d 132, 136, 456 P.3d 795

(2020) (citing Eriks v. Denver, 118 Wn.2d 451, 457-58, 824 P.2d 1207 (1992)).8

“When interpreting court rules, the court approaches the rules as though they had

been drafted by the Legislature” and “appl[ies] principles of statutory construction.”

8
Many out-of-jurisdiction decisions review orders on motions to disqualify counsel
for an abuse of discretion. See, e.g., Watkins v. Trans Union, LLC, 869 F.3d 514, 518 (7th
Cir. 2017); Zerger & Mauer LLP v. City of Greenwood, 751 F.3d 928, 931 (8th Cir. 2014).
We have also reviewed orders disqualifying counsel for an abuse of discretion. Public
Util. Dist. No. 1 of Klickitat County v. Int’l Ins. Co., 124 Wn.2d 789, 812, 881 P.2d 1020
(1994) (finding “no abuse of discretion” in trial court’s denial of disqualification motion).
But if the Keller attorneys are conflicted in this case, the trial court had no choice but to
disqualify them. RPC 1.9(a). And we review whether attorney conduct violates the RPCs
de novo. Eriks, 118 Wn.2d at 457-58; see also In re Firestorm 1991, 129 Wn.2d 130, 135,
916 P.2d 411 (1996) (“Since this case involves the application of a court rule to a set of
particular facts, this is a question of law, and will be reviewed de novo on appeal.” (citing
State v. Tatum, 74 Wn. App. 81, 86, 871 P.2d 1123 (1994))).

8
No. 97563-9

State v. Greenwood, 120 Wn.2d 585, 592, 845 P.2d 971 (1993) (citing State v.

McIntyre, 92 Wn.2d 620, 622, 600 P.2d 1009 (1979)).

II. THE FORMER CLIENT BEARS THE BURDEN OF SHOWING A “SUBSTANTIAL
RELATIONSHIP”

The Court of Appeals observed in a footnote that “Washington courts have

not established which party bears the burden of proof in connection with a motion

to disqualify under RPC 1.9.” Plein, 9 Wn. App. 2d at 412 n.2. It cited federal cases

on both sides and then declined to resolve the issue because it “would reach the

same conclusion regardless of which party bears the burden.”9 We now hold that the

burden falls on the former client who seeks to disqualify an adverse party’s lawyer.

“[B]oth federal and state courts generally agree that the burden of proving

substantial relationship should ordinarily be placed on the former client.” RICHARD

E. FLAMM, LAWYER DISQUALIFICATION: CONFLICTS OF INTEREST AND OTHER BASES

§ 8.5 at 150-53 (2003) (footnotes omitted); see, e.g., Richers v. Marsh & McLennan

Grp. Assocs., 459 N.W.2d 478, 481 (Iowa 1990) (“The movant has the burden of

proving that the two representations are substantially related.”); Robbins v. Gillock,

109 Nev. 1015, 1017-18, 862 P.2d 1195 (1993) (per curiam) (“The burden of

9
Plein, 9 Wn. App. 2d at 412 n.2 (citing FMC Techs., Inc. v. Edwards, 420 F. Supp.
2d 1153, 1158 (W.D. Wash. 2006); Avocent Redmond Corp. v. Rose Elecs., 491 F. Supp.
2d 1000, 1007 (W.D. Wash. 2007); Velazquez-Velez v. Molina- Rodriguez, 235 F. Supp.
3d 358, 361-62 (D.P.R. 2017)).
9
No. 97563-9

proving whether two matters are the same or substantially related falls on the party

moving for disqualification and that party must have evidence to buttress the claim

that a conflict exists.”); State ex rel. Ogden Newspapers, Inc. v. Wilkes, 211 W.Va.

423, 426, 566 S.E.2d 560 (2002) (per curiam) (“[T]he burden of establishing that a

substantially related matter exists is on the former client.”); Johnston v. Harris

County Flood Control Dist., 869 F.2d 1565, 1569 (5th Cir. 1989) (“A party seeking

to disqualify opposing counsel on the ground of a former representation must

establish two elements . . . .”); Cox v. Am. Cast Iron Pipe Co., 847 F.2d 725, 728

(11th Cir. 1988) (“[T]he movant must ‘“show that the matters embraced within the

pending suit are substantially related to the matters or cause of action wherein the

attorney previously represented [it].”’” (alteration in original) (quoting Duncan v.

Merrill Lynch, Pierce, Fenner & Smith, Inc., 646 F.2d 1020, 1028 (5th Cir. 1981)

(quoting Wilson P. Abraham Constr. Corp. v. Armco Steel Corp., 559 F.2d 250, 252

(5th Cir. 1977)))).

Under the previous version of the rules, our Court of Appeals also placed the

burden on the party moving to disqualify counsel. Sanders v. Woods, 121 Wn.

App. 593, 597-98, 89 P.3d 312 (2004) (“In order to successfully disqualify a lawyer

from representing an adversary, a former client must show that the matters currently

10
No. 97563-9

at issue are substantially related to the subject matter of the former representation.”

(citing RPC 1.9; State v. Hunsaker, 74 Wn. App. 38, 43, 873 P.2d 540 (1994))).

The two federal district court cases cited by USAA holding to the contrary

both misinterpreted a comment to ABA Model Rule 1.9. Suppl. Br. of Resp’t at 7-8

(citing FMC Techs., Inc. v. Edwards, 420 F. Supp. 2d 1153, 1157-58 (W.D. Wash.

2006); Amgen, Inc. v. Elanex Pharm., Inc., 160 F.R.D. 134, 139-40 (W.D. Wash.

1994)). Both of these cases cited ABA Model Rule 1.9 comment 8 (now comment

6—in both the ABA Model Rules and the RPCs), which does place the burden of

proof “upon the firm whose disqualification is sought.” But that comment applies to

a different context, not to determining whether matters are “substantially related.”

FMC Techs, 420 F. Supp. 2d at 1158; Amgen, 160 F.R.D. at 139; see RPC 1.9 cmt.

6.

We join the majority of jurisdictions that place the burden of showing that

matters are substantially related on the former client.

III. KELLER DID NOT REPRESENT USAA ON THE SAME OR A SUBSTANTIALLY
RELATED MATTER

As stated above, RPC 1.9(a) provides:

A lawyer who has formerly represented a client in a matter shall not
thereafter represent another person in the same or a substantially related
matter in which that person’s interests are materially adverse to the
interests of the former client unless the former client gives informed
consent, confirmed in writing.

11
No. 97563-9

A. Before the 2006 Amendments, the Court of Appeals Used a Three-Part
“Factual Context” Test To Decide Whether Matters Were “Substantially
Related”

Even before the 2006 rule changes, we had not ruled on the meaning of a

“substantially related matter” under RPC 1.9. The Court of Appeals, however, had

established a “factual context” test that looked to three factors:

To determine whether the two representations are substantially
related, we must: (1) reconstruct the scope of the facts of the former
representation, (2) assume the lawyer obtained confidential
information from the client about all these facts, and (3) determine
whether any former factual matter is sufficiently similar to a current
one that the lawyer could use the confidential information to the
client’s detriment.

Sanders, 121 Wn. App. at 598 (emphasis added) (citing Hunsaker, 74 Wn. App. at

44).

The Court of Appeals in this case, however, disavowed that factual context

test. Plein, 9 Wn. App. 2d at 415-16. It reasoned that comment 3 to RPC 1.9,

adopted in 2006, “does not mention the prior standard for assessing substantially
10
related matters as found in Sanders, Teja,[ ] or Hunsaker,” so it declined to apply

10
Teja v. Saran, 68 Wn. App. 793, 846 P.2d 1375 (1993) (matters substantially
related where attorney consulted with the former client about the exact matter ultimately
leading to the dispute).

12
No. 97563-9

that test going forward. Id. at 416; see Wallace, 131 Wn.2d at 577 (changes to a

court rule made it unnecessary to overrule a case decided before the changes).

B. The 2006 Amendments to RPC 1.9 and Its Comments Now Determine
Whether Matters Are “Substantially Related”

In 2006, we amended RPC 1.9 and added numerous comments. Adoption of

Rule 1.9, 157 Wn.2d at 1202. The parties agree that this rule and these comments

now guide our analysis, but they emphasize different comments.

The Pleins highlight comment 2, which states that the “scope of a ‘matter’ . . .

depends on the facts of a particular situation or transaction.” RPC 1.9 cmt. 2.

Pursuant to comment 2, “‘a lawyer who recurrently handled a type of problem for a

former client is not precluded from later representing another client in a factually

distinct problem of that type even though the subsequent representation involves a

position adverse to the prior client.’” 11 Pleins’ Suppl. Br. at 14 (emphasis added)

(quoting RPC 1.9 cmt. 2).

The Court of Appeals emphasized that this comment concerned only what

constitutes the scope of a single “matter” and does not help understand whether

11
This was a change. Before 2002, comment 2 to the ABA Model Rule had allowed
representation only in “a wholly distinct problem of that type.” ART GARWIN, A
LEGISLATIVE HISTORY: THE DEVELOPMENT OF THE ABA MODEL RULES OF
PROFESSIONAL CONDUCT, 1982-2013, at 239 (2013) (emphasis added). But 2002
amendments changed the word “wholly” to “factually” in order to “further refine and
cabin the concept of substantial relationship, particularly as it affects the potential
disqualification of former lawyers for an organization.” Id. at 239, 242.
13
No. 97563-9

distinct matters are “substantially related.” Plein, 9 Wn. App. 2d at 417 n.9. But

comment 2 anticipates the exact situation presented by this case: a lawyer

representing a current client against a former organizational client on a “factually

distinct problem” of the same type as the prior representation. And it allows such

representation of the current client, despite objection by the former client. Under

this comment 2, Keller’s representation of the Pleins is clearly permissible.

USAA, in contrast, focuses on comment 3, which states that matters may be

“substantially related” “if they involve the same transaction or legal dispute or if

there otherwise is a substantial risk that confidential factual information as would

normally have been obtained in the prior representation would materially advance

the client’s position in the subsequent matter.” RPC 1.9 cmt. 3. USAA does not

claim that Keller represented it in the same “transaction or legal dispute” as the

one at issue in this case. Id. The key inquiry, therefore, is whether there is a

“substantial risk” that Keller acquired “confidential factual information as would

normally have been obtained in the prior representation” that “would materially

advance” the Pleins’ position. Id.

Under this rule and these comments, the former client need not show that the

lawyer actually obtained confidential information—the “former client is not

required to reveal the confidential information learned by the lawyer in order to

14
No. 97563-9

establish a substantial risk that the lawyer has confidential information to use in the

subsequent matter.” Id. Rather, a “conclusion about the possession of such

information may be based on the nature of the services the lawyer provided the

former client and information that would in ordinary practice be learned by a lawyer

providing such services.” Id.

Comment 3 provides several examples of information gained from a former

representation that poses such a risk and hence creates a conflict. A lawyer who

learned “extensive private financial information” about a client may not represent

the client’s spouse in a divorce. Id. Nor may a lawyer help a client secure

environmental permits, then represent another client seeking to rezone the same plat

of property for environmental reasons. Id. But comment 3 also lists several types

of information gained from a former client’s representation that will not create a

conflict. These include “general knowledge of [an organizational] client’s policies

and practices,” “[i]nformation that has been disclosed to the public or to other

parties adverse to the former client,” and information “rendered obsolete by the

passage of time.” Id. However, even as to organizational clients, “knowledge of

specific facts gained in a prior representation that are relevant to the matter in

question ordinarily will preclude such a representation.” Id.

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No. 97563-9

Whether the “substantially related” test bars Keller’s current representation

of the Pleins under this comment is a more difficult question. The answer depends

on just how related the former and current representation must be to meet comment

3’s “substantially related” test.

C. The Decisions Holding That “Substantially Related” Matters Must
Be Factually Related Are More Persuasive

Several federal appellate courts have considered whether former and current

representations that are comparable to the former and current representations here

presented “substantially related” matters. Most of those decisions would have us

ask whether the two matters are factually related and, hence, most of those

decisions would not require disqualification in this case.12

Most recently, the Seventh Circuit interpreted Indiana RPC 1.9, which is

identical to the ABA Model Rule and to Washington RPC 1.9. Watkins v. Trans

Union, LLC, 869 F.3d 514 (7th Cir. 2017). In Watkins, a lawyer defended Trans

Union in approximately 250 Fair Credit Reporting Act 13 (FCRA) cases over five

years, billing over 4,000 hours. Id. at 516-17. Twelve years later, the lawyer sought

to represent an FCRA plaintiff against Trans Union. Id. By that time, the lawyer

12
Federal Courts have applied many distinct tests to determine whether matters are
“substantially related” under RPC 1.9. See LAWYER DISQUALIFICATION, supra, §§ 9.1-9.9
at 169-88 (2003) (describing distinct tests applied by five different federal circuits).
13
15 U.S.C. § 1681.
16
No. 97563-9

had left his previous firm, which continued to represent Trans Union. Id. at 517.

The trial court denied Trans Union’s motion to disqualify the lawyer, finding that

the “prior representations [were] not factually related such that the same matter

[was] in dispute,” nor was “there a risk that confidential information from the prior

matters would materially advance Watkins’ present claims.” Id. at 518.

The Seventh Circuit affirmed. Id. It held that even though the former and

current representations “both involve[d] FCRA violations,” they did “not turn on

the same facts of one ‘particular situation or transaction.’” Id. at 521. The court

categorized the knowledge that the lawyer gained while working for Trans Union

into three groups: (1) general knowledge experience working with the FCRA, (2)

knowledge of Trans Union “policies and practices” that would be discoverable to an

opposing FCRA litigant, and (3) “general knowledge” of Trans Union policies and

practices. Id. at 522. To the extent the lawyer learned “truly confidential

information,” the passage of time made it obsolete based on 10 years of

development in technology and the law. Id. at 522-23. This decision is based on

the factual relationship—or lack thereof—between the subject matter of the former

representation and the subject matter of the current representation. It holds that the

matters are not substantially related where, as in the instant case, the facts forming

the basis for each claim are completely different.

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No. 97563-9

In another similar case, albeit one decided long before the ABA added

comments 2 and 3 to the rules, the Fifth Circuit applied a similar test and also found

no conflict. Duncan, 646 F.2d 1020. In Duncan, a law firm represented investment

firm Merrill Lynch in complex litigation, including securities-related cases, over a

10-year period. Id. at 1022. The same firm then represented a client who sued

Merrill Lynch for securities fraud—an action of the same type as the prior

representation. Id. The district court held that “‘[a]lthough the previous cases may

not involve the identical issues involved here, the court feels that [the law firm]

would certainly have been exposed to information which would be substantially

related to the instant case’” and disqualified the firm. Id. at 1024 (first alteration in

original).

The Fifth Circuit reversed. Id. at 1033. It acknowledged that Merrill Lynch

had shown that the law firm represented it in similar types of cases. Id. at 1028.

But it noted that Merrill Lynch “said nothing about the specific nature” of those

cases. Instead, Merrill Lynch “stated generally that these matters involved various

kinds of securities, margin accounts, Merrill Lynch’s relationship with its

customers and employees, and the federal and state securities laws.” Id. at 1028-29.

The court held that a “catalogue of such generalities offers little assistance to a

court attempting to ferret out the degree of similarity, if any, between the former

18
No. 97563-9

representation and the pending case.” Id. at 1029. The list of similarities Merrill

Lynch offered “could be applied to virtually any law firm that had ever represented

Merrill Lynch or any large brokerage firm.” Id.

In fact, Merrill Lynch, like USAA in this case, identified two specific

cases where the former representation involved issues “‘remarkably similar’ to

those presented” in the current client’s case. Id. at 1022-23. But even as to those

specific cases, Merrill Lynch “described only a general, superficial connection

between the subject matters of these cases and that of Duncan’s suit.” Id. at

1030.

Duncan, like Watkins, clearly focuses on the factual relationship—or lack

thereof—between the subject matter of the former representation and the subject

matter of the current representation. Under that approach, the information USAA

alleges Keller obtained is very similar to the information obtained by the firm in

Duncan. USAA’s “business customs and practices, including confidential claims

handling materials and business relationships, . . . the thought processes of

adjusters, business representatives, and in-house attorneys, . . . and [USAA’s]

[b]usiness and litigation philosophies and strategies,” are exactly the kind of

“general knowledge” that Duncan held was not disqualifying. CP at 99. And

comment 3 specifically states that “general knowledge of [an organizational]

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No. 97563-9

client’s policies and practices ordinarily will not preclude a subsequent

representation.” RPC 1.9 cmt. 3.

To be sure, USAA does allege that Keller obtained specific information

relevant to the facts of the instant case during its representation of USAA in the

Cueva matter. That matter involved allegations similar to those made by the

Pleins. But USAA’s response to an unrelated set of facts, even facts based on

similar allegations, does not suggest that Keller obtained confidential information

that would materially advance the Pleins’ case. Indeed, comment 2 specifically

allows a lawyer to represent a current client in a “factually distinct problem” of

the same type that it “recurrently handled” for the former client. RPC 1.9 cmt. 2.

In contrast, in Government of India v. Cook Industries, Inc., the Second

Circuit applied a stricter test but found that plaintiffs satisfied that test and hence

affirmed an order of disqualification. 569 F.2d 737, 739-40 (2d Cir. 1978). In that

case, a lawyer represented defendant Cook Industries on two closely related cases

against allegations that it had come up short on soybean deliveries. Id. at 738. The

lawyer worked on these Cook Industries cases for three years and billed over 100

hours. Id. at 739. He then represented a new client—a plaintiff who alleged that

Cook Industries came up short on a grain delivery. Id. All three cases involved

allegations of fraudulent documentation. Id. Because the attorney had “conduct[ed]

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confidential inquiries as to [the former client’s] loading procedures,” and the “very

same information necessarily was the cornerstone” of the allegations in the new

case, the Second Circuit affirmed the trial court’s order of disqualification. Id.

Despite requiring a showing that the relationship between the two cases was

“patently clear,” the court stated that “[i]t would be difficult to think of a closer

nexus between issues.” Id. at 739-40.

But Cook Industries was decided long before the ABA added comments 2

and 3 to the rule. The addition of those two comments demonstrates an intent to

limit disqualification under RPC 1.9(a). Both comments emphasize that the

disqualifying confidential information must be “factual.” RPC 1.9 cmt. 2

(allowing representation in “factually distinct” problem of type lawyer handled for

former client (emphasis added)), cmt. 3 (matters substantially related where there

is “a substantial risk that confidential factual information” would materially

advance new client’s position (emphasis added)).

The current RPC 1.9 and its associated comments thus tell us to decide

whether the former and current representation are factually related. If not, then they

are not “substantially related” within the meaning of the rule. Keller did not

represent USAA on the Plein matter or on anything factually related to the Plein

matter. As a result, it did not represent USAA on any matter substantially related to

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the instant case, so it may now represent the Pleins.

D. Neither the “Playbook” Nor “Duty of Loyalty” Approaches to Conflicts
of Interest Apply in Washington

Two other potential interpretations of RPC 1.9(a) would preclude Keller’s

representation of the Pleins: the “playbook” approach and the duty of loyalty. We

reject both of these approaches as inconsistent with RPC 1.9 and its comments.

1. “Playbook” Approach

Some courts have taken a “playbook” approach to disqualification. In

Chugach Electric Ass’n v. United States Dist. Court for District of Alaska, 370 F.2d

441, 442 (9th Cir. 1966), an attorney brought an antitrust action against a

corporation where he had previously served as general counsel. Despite no

showing that the lawyer “‘had access to secret or confidential information related to

the issues’” in the case, the Ninth Circuit disqualified him. Id. at 443. It did so

because the lawyer’s general representation of the corporation could “provide him

with greater insight and understanding of the significance of subsequent events in

an antitrust context and offer a promising source of discovery.” Id.

That was 1966. Since that time, the model rules have changed. The RPC and

ABA Model Rule comments now flatly reject this “playbook” approach to

disqualification motions. RPC 1.9 cmt. 2 (“[A] lawyer who recurrently handled a

type of problem for a former client is not precluded from later representing another

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client in a factually distinct problem of that type even though the subsequent

representation involves a position adverse to the prior client.”), cmt. 3 (allowing

representation despite “general knowledge of the [organizational] client’s policies

and practices”).

2. “Duty of Loyalty” Approach

USAA also contends that Keller breached the “duty of loyalty” it owed to

USAA. Suppl. Br. of Resp’t at 5-6. But there is no separate “duty of loyalty” under

RPC 1.9 beyond the test outlined in RPC 1.9. If Keller’s representation of the

Pleins violates RPC 1.9(a), it breaches the duty of loyalty. If there were a general

duty of loyalty to never litigate against a former client, courts would not need to

apply RPC 1.9(a) at all and would not need to assess whether matters are

substantially related; disqualification would be automatic any time a lawyer sought

to represent a party adverse to a former client. This is clearly not what the RPCs say.

E. RPC 1.9(c) Provides Additional Protection for Client Confidences

The Pleins acknowledge that RPC 1.9(c) bars Keller from using USAA’s

confidences against it. They argue that RPC 1.9(c) imposes this bar without

requiring disqualification. Pleins’ Suppl. Br. at 22. We agree.

RPC 1.9(c) provides:

A lawyer who has formerly represented a client in a matter or whose
present or former firm has formerly represented a client in a matter shall

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not thereafter:
(1) use information relating to the representation to the
disadvantage of the former client except as these Rules would permit or
require with respect to a client, or when the information has become
generally known; or
(2) reveal information relating to the representation except as
these Rules would permit or require with respect to a client.

The Restatement (Third) of the Law Governing Lawyers interprets this rule to

mean that “[e]ven if a subsequent representation does not involve the same or a

substantially related matter, a lawyer may not disclose or use confidential

information of a former client.” 2 RESTATEMENT (THIRD) OF THE LAW GOVERNING

LAWYERS § 132 cmt. f (AM. LAW INST. 2000).

The ABA similarly states that this rule “prohibits the use of a former client’s

protected information (unless it is generally known) as well as its disclosure, even if

the lawyer is not adverse to the former client or the adversity is in a matter which is

not substantially related to the prior representation.” ABA Formal Op. 99-415

(1999).

Notably, RPC 1.10(a)’s imputation of conflicts applies differently to RPC

1.9(c) than to RPC 1.9(a). RPC 1.9(a) specifically forbids representation of the

current client where matters are substantially related. But RPC 1.9(c) forbids only

use of confidential information against a former client. It does not forbid

representation entirely. RPC 1.10(a) imputes conflicts across a firm when any

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lawyer in the firm “would be prohibited from [representing a client] by Rules 1.7

or 1.9.” Because RPC 1.9(c) does not prohibit representation, confidential client

information Hecht may have obtained about USAA that is not substantially related

to the Plein matter is not imputed to Smart or Birk through RPC 1.10(a). Rather,

RPC 1.9(c) would forbid Hecht herself from using any unrelated confidences she

obtained in her representation of USAA against USAA. Neither Smart nor Birk

possess any such confidences. Therefore, RPC 1.9(c) does not limit Smart’s or

Birk’s representation of the Pleins.

CONCLUSION

Keller represented USAA for many years, and the parties agree that it

obtained information about the company’s procedures and general strategies. But it

never represented USAA on any matter substantially related to the Plein matter.

Thus, RPC 1.9(a) does not prohibit Keller from representing the Pleins against

USAA.

We reverse the Court of Appeals and remand for further proceedings

consistent with this opinion.

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WE CONCUR:

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