Now-retired Riverside Superior Judge Jackson Lucky acted appropriately in denying a motion to disqualify counsel in a 2018 case regarding leaked confidential filings, shell companies and a multilevel marketing company, the Fourth District Court of Appeal, Division Two, ruled Nov. 5.
In the Nov. 29, 2018 lawsuit, clothing supplier Providence Industries charged Corona clothing company LuLaRoe with breach of contract, breach of guaranty, unjust enrichment, fraud in the inducement, avoidance of fraudulent transfers in both the actual and constructive intent. Parts of the complaint asserted LuLaRoe defaulted on payments then hid wealth from Providence Industries using shell companies. The case is still active.
Unnamed outside counsel for LuLaRoe anonymously sent privileged documents to Providence’s outside counsel, Reed Smith, LLP, according to the unpublished appellate ruling. Reed Smith lawyers Marsha Houston and Chris Rivas thought the documents were potentially confidential, contacted their in-house counsel, contacted the California State Bar’s ethics hotline, and disclosed the documents to opposing counsel on the state bar attorney’s advice. Alex Angulo, counsel for LuLaRoe, demanded that the documents be returned and copies destroyed.
The Reed Smith lawyers declined to do so until directed by the court Dec. 18, 2019.
LuLaRoe filed the motion to disqualify Reed Smith May 22, 2020, arguing the documents were obviously confidential, and that the lawyers had an ethical obligation to immediately destroy them.
The Riverside court, and the appellate court, found that the documents were not confidential on their face, and the Reed Smith attorneys acted appropriately.
Rutan & Tucker represented LuLaRoe. Marsha Houston, Chris Rivas, and Kasey Curtis of Reed Smith represented their interests.
Associate Justice Michael Raphael wrote the opinion, joined by Associate Justice Art McKinster and Associate Justice Richard Fields.
Case No: E075513
Riverside Case No: RIC1825263
Read the ruling here.
