United States District Court, D. Hawaii
TERRY N. AGENA, et al., Plaintiffs,
CLEAVER-BROOKS, INC., et al., Defendants.
ORDER AFFIRMING THE MAGISTRATE JUDGE'S ORDER
DENYING IN PART DEFENDANTS' MOTION TO DISQUALIFY
Derrick K. Watson United States District Judge
instant action was brought under Hawaii law and the Racketeer
Influenced and Corrupt Organizations Act (RICO or Act), 18
U.S.C. § 1961 et seq., by a group of more than
fifty Plaintiffs, alleging they were fraudulently induced to
settle their asbestos claims by virtue of Cleaver-Brooks,
Inc. and its national coordinating counsel concealing adverse
information during the discovery process. Each of the
plaintiffs who executed a settlement agreement in the
underlying asbestos actions was advised by the same law firm
that represents the group of Plaintiffs in this case.
basis, Defendants Cleaver-Brooks and Husch-Blackwell, LLP
moved to disqualify Plaintiffs' counsel. Dkt. Nos. 41,
45. The Magistrate Judge issued an Order denying the motion
in part. Dkt. No. 65. Defendants now seek review, Dkt. Nos.
68, 70, contending the Magistrate Judge erred in applying
Rules 1.7 and 3.7 of the Hawaii Rules of Professional
Conduct. The Magistrate Judge held, in relevant part, that
under Rule 1.7, there is not a concurrent conflict of
interest between Plaintiffs and their counsel, and that
although two of Plaintiffs' attorneys (Richard DeRobertis
and Ilana Waxman) will likely testify at trial, under Rule
3.7, DeRobertis and Waxman are only disqualified from the
trial portion of this action.
reasons set forth below, the Magistrate Judge's
conclusions are not clearly erroneous or contrary to law, and
therefore the Magistrate Judge's Order is AFFIRMED.
& PROCEDURAL BACKGROUND
facts relevant to Plaintiffs' claims are set forth in the
Court's recent Order regarding Defendants' motion to
dismiss. Dkt. No. 71 at 2-9. Although Plaintiffs have since
filed a second amended complaint, Dkt. No. 76, the gist of
their claims remains the same. Plaintiffs seek relief on the
basis that in the underlying asbestos lawsuits: (1)
Cleaver-Brooks and its national coordinating counsel for
asbestos litigation withheld information during discovery
that “would make it more difficult for
Plaintiffs” to prevail at trial; (2) “Plaintiffs
through their counsel reasonably and detrimentally relied
upon the [discovery] misrepresentations and omissions”;
and (3) “as a result acted in a way that caused
Plaintiffs damage . . . by agreeing to settle their claims
for artificially low settlement amounts.” See
Dkt. No. 76, ¶¶ 147-48.
relevant to Defendants' motion to disqualify
Plaintiffs' counsel, it is undisputed that Galiher
DeRobertis & Waxman LLP (the Galiher firm) represented
the asbestos plaintiffs in the underlying actions when they
executed their respective settlement agreements. See
Dkt. No. 34-5. In the underlying actions, Richard DeRobertis
and Gary O. Galiher “witnessed and approved” the
“form and content” of the settlement agreements
for each former asbestos plaintiff. See, e.g., Dkt.
No. 34-5 at 13, 21.
instant lawsuit, Plaintiffs are represented by the Galiher
firm and Waters Kraus & Paul LLP (the Waters firm).
See Dkt. Nos. 28, 76. Counsel of record from the
Galiher firm is Alyssa Segawa, Allison Aoki, and Richard
DeRobertis; and counsel of record from the Waters firm is
Peter Kraus and Charles Siegel. See Dkt. Nos. 12,
28, 76. Plaintiffs admit that Richard DeRobertis and Ilana
Waxman will “be witnesses at trial, ” but
Plaintiffs aver they “will not act as trial counsel and
will not take or defend any depositions in this case.”
Dkt. No. 46 at 31, 36; see Dkt. No. 73 at 24-26.
According to Plaintiffs, the Waters firm will try the case.
Dkt. No. 73 at 26.
26, 2019, Defendants filed a motion to disqualify
Plaintiffs' counsel, arguing that the Galiher firm must
be disqualified under Rule 1.7 of the Hawaii Rules of
Professional Conduct, and, at a minimum, four lawyers at the
Galiher firm- DeRobertis, Waxman, Segawa, and Aoki-should be
immediately disqualified under Rule 3.7 from “all
phases” of the litigation, including “pretrial
proceedings.” Dkt. No. 41 at 18-20; Dkt. No. 45. The
Magistrate Judge (MJ) issued an Order granting in part and
denying in part Defendants' motion. Dkt. No. 65.
Defendants filed their timely objections to the adverse
portions of the MJ's Order. Dkt. No. 68, 70; cf.
28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(a).
as here, a magistrate judge issues a pre-trial order
regarding a non-dispositive matter, any party may seek review
by filing its objections to the order. 28 U.S.C. §
636(b)(1); Fed.R.Civ.P. 72(a); LR 74.1. “The district
judge in the case must consider timely objections, ”
but the court cannot “modify or set aside any part of
the order” unless it is “clearly
erroneous or is contrary to law.”
See Fed.R.Civ. P. 72(a) (emphasis added); Doe v.
Kamehameha Sch., 596 F.3d 1036, 1041 n.4 (9th Cir.
finding is clearly erroneous when although there is evidence
to support it, the reviewing [body] on the entire evidence is
left with the definite and firm conviction that a mistake has
been committed.” Concrete Pipe & Prods. v.
Constr. Laborers Pension Trust, 508 U.S. 602, 622 (1993)
(internal quotation marks omitted) (quoting United States
v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)). As a
result, “the ‘clearly erroneous' standard is
significantly deferential, ” id. at 623, and
“[t]he reviewing court may not simply substitute its
judgment for that of the deciding court.” Grimes v.
City & Cty. of San Francisco, 951 F.2d 236, 241 (9th
Cir. 1991). A magistrate judge's order is “contrary
to law” if the order applies the incorrect legal stand
or misapplies applicable law. Na Pali Haweo Cmty.
Ass'n v. Grande, 252 F.R.D. 672, 674 (D. Haw. 2008);