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Schnider v. Providence Health & Services

United States District Court, D. Alaska

January 12, 2016

JAMIE SCHNIDER and TIANA JOHNSON, Plaintiffs,
v.
PROVIDENCE HEALTH & SERVICES, Defendant.

ORDER ON MOTION TO DISQUALIFY

SHARON L. GLEASON UNITED STATES DISTRICT JUDGE.

At Docket 12 is Defendant Providence Health & Service’s (“Providence”) Motion to Disqualify Plaintiffs’ Counsel. Plaintiffs Jamie Schnider and Tiana Johnson filed an opposition on October 27, 2015.[1] Providence replied on November 3, 2015.[2] Oral argument on the motion was held on December 1, 2015.[3] For the reasons set forth below, the motion will be denied.

Plaintiffs Jamie Schnider and Tiana Johnson, a divorced couple, hired attorney James Wendt to represent both of them in this lawsuit against the employer of their former mental health counselors. Plaintiffs assert malpractice claims related to their treatment at the Providence Valdez Counseling Center (“PVCC”) in the months leading up to the dissolution of their marriage.[4] As indicated in the record, the Plaintiffs were married on April 5, 2003, Ms. Johnson filed for divorce on April 25, 2014, and the divorce was granted on June 12, 2014.[5]

The following facts appear to be undisputed for the purposes of the current motion: Mr. Schnider, an army veteran, received individual counseling at PVCC from at least September 2007 through April 2014; Ms. Johnson received individual counseling at PVCC from at least May 2013 through September 2013.[6] The couple began marital counseling at PVCC in the summer of 2013, which apparently ended in September 2013.[7]In December 2013, Mr. Schnider began individual counseling sessions with Natalie Warner, a mental health counselor at PVCC, which continued through April 3, 2014.[8]“Maritally focused treatment” was not listed as a treatment goal for that time.[9] Rather, Mr. Schnider’s treatment at that time was focused on depression, post-traumatic stress disorder, and prescription medication dependence.[10]

The parties dispute precisely how, where, when, and why these events turned irretrievably tragic. Plaintiffs assert that Mr. Schnider and Ms. Warner began a sexual relationship while they had a therapist/patient relationship, which Ms. Johnson became aware of when she discovered email communications between Mr. Schnider and Ms. Warner.[11] Providence seems to suggest that any sexual relationship between Mr. Schnider and Ms. Warner started after Mr. Schnider’s April 3, 2014 final therapy session.[12] But it is undisputed that Mr. Schnider and Ms. Warner visited Hawaii together on April 7, 2014.[13] It also seems undisputed that Mr. Schnider and Ms. Warner then embarked together on a seven-month journey with stops in fifteen states.[14] That journey ended in Salt Lake City on October 9, 2014, when Mr. Schnider indicates Ms. Warner grabbed his gun from his back and used that gun to kill herself.[15]

Mr. Schnider and Ms. Johnson, through attorney James Wendt, initiated this action as co-plaintiffs in Alaska state court on February 5, 2015, alleging that: (1) Ms. Warner negligently mishandled her treatment of Mr. Schnider; (2) PVCC negligently and/or recklessly hired, trained, and supervised Ms. Warner; (3) Ms. Warner recklessly violated Alaska statutes governing professional counselors; (4) Ms. Warner’s conduct negligently and/or recklessly caused Mr. Schnider and Ms. Johnson emotional distress; (5) Providence is liable for Ms. Warner’s allegedly negligent and/or reckless conduct; and (6) Ms. Warner’s conduct justifies punitive damages.[16] On March 10, 2015, Providence removed the action to this Court pursuant to 28 U.S.C. §§ 1441(a) and 1446.[17]

I. Jurisdiction

This Court has jurisdiction over this matter under 28 U.S.C. § 1332 because the parties are diverse and the amount in controversy exceeds $75, 000.[18]

II. Standing

Providence seeks to disqualify opposing counsel from representing Plaintiffs in this action. Plaintiffs assert that “[i]t is questionable whether or not Defendant Providence has standing to even bring this motion.”[19] The Ninth Circuit has not precluded motions to disqualify opposing counsel, but has noted that “[a]s a general rule, courts do not disqualify an attorney on the grounds of conflict of interest unless the former client moves for disqualification.”[20] While this holding does not compel the denial of a non-client motion to disqualify opposing counsel, some courts have addressed the issue with reference to the injury, causation, and redressability requirements for Article III standing.[21] Colyer v. Smith articulated one possible standard, requiring: (1) a personal stake in the motion sufficient to satisfy the “irreducible constitutional minimum of Article III, ” and (2) an ethical breach that “so infects the litigation in which disqualification is sought that it impacts the moving party’s interest in a just and lawful determination of her claims” and “so severe that it obstructs the orderly administration of justice.”[22] The alleged injury must be “(a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.”[23]

Other courts reference the need to preserve the integrity of judgments; still others reference professional rules that create an obligation among attorneys to bring possible ethical violations to the attention of the court.[24] Alaska Rule of Professional Conduct 8.3, for example, requires that “[a] lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects shall inform the appropriate disciplinary authority unless that lawyer reasonably believes that the misconduct has been or will otherwise be reported.” However, using a state reporting requirement in a rule of professional conduct as a basis for federal court standing is dubious, because standing is a jurisdictional issue and “states have no power directly to enlarge or contract federal jurisdiction.”[25] The Court finds that Ninth Circuit precedent disfavors motions to disqualify made by opposing counsel, and that Colyer sets forth a useful standard for deciding when courts should make an exception.

Providence asserts a “legitimate interest” in opposing counsel’s disqualification because “if there is a settlement, a dissatisfied plaintiff later can attempt to rescind the settlement by claiming insufficient information for informed consent.”[26] In response to Plaintiffs’ standing argument, Providence directs the Court to four non-binding cases without explaining how these demonstrate that Providence has standing in this matter.[27]As the Court reads these cases, only Sanford v. Commonwealth of Virginia involved a non-client party’s motion to disqualify.[28] The Sanford court decided the motion based in part on a Virginia state rule that made it “appropriate for a court to raise the question in certain circumstances, or the conflict can be raised properly by opposing counsel.”[29]

The Court finds that Providence could not meet the Colyer test for non-client standing to disqualify Mr. Wendt. Providence’s fears of a collateral attack against a hypothetical settlement are not concrete, particularized, actual, or imminent. Moreover, Mr. Schnider and Ms. Johnson have waived potential conflicts in Mr. Wendt’s representation, so there is no apparent ethical breach impacting the just and lawful determination of this case or the orderly administration of justice.[30] Thus, it would appear that Providence lacks standing to bring this ...


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