Penington Painting Company LLC v. Cherry Painting Company Incorporated et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Penington Painting Company LLC,
Plaintiff,
v.
Cherry Painting Company Incorporated, et
al.,
Defendants.
No. CV-25-02964-PHX-DWL
ORDER
Plaintiff Penington Painting Company LLC (“Penington”) has filed a motion to
disqualify the law firm representing three non-party subpoena recipients. (Doc. 40.) For
the reasons that follow, the motion is denied.
RELEVANT BACKGROUND
Penington is a competitor of Cherry Painting Company, Inc. and Cherry Painting
Company, LLC (together, “Cherry”) in the commercial painting industry. In this action,
Penington alleges, among other things, that Cherry induced one of Penington’s employees
(who now works for Cherry) to misappropriate Penington’s trade secrets and confidential
information. (Doc. 20 at 3.)
During the discovery process, Penington served subpoenas on non-parties Trilantic
Capital Management, LLC (“Trilantic”), Brookfield Capital Partners, LLC (“Brookfield”),
and Aurum Capital Connect, LLC (“Aurum”) (together, “the Third Parties”). Trilantic and
Brookfield “invested significant funds in Cherry,” while Aurum was previously retained
by Cherry in an effort to “expand [Cherry’s] business” and, as part of that effort, previously
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“contacted [Penington] on [Cherry’s] behalf to discuss a partnership or joint venture.”
(Doc. 40 at 5.) The subpoenas seek “documents and information relating to [Cherry’s]
business expansion plans, forecasts, projections, and investor materials, all of which relate
to [Penington’s] contention that [Cherry’s] business plan includes expanding to new
markets and competing through unlawful means.” (Id.)
Cherry is represented in this action by attorneys from the law firm Bradley Arant
Boult Cummings LLP (“Bradley”). (Doc. 26.) Each Third Party also retained Bradley to
respond to the subpoena and responded by raising an array of objections and not producing
any documents. (Doc. 41-3 at 2-4 [Trilantic response letter]; id. at 5-7 [Aurum response
letter]; id. at 8-10 [Brookfield response letter].) Each response letter appears to be
identical. (Id.)
DISCUSSION
I. The Parties’ Arguments
Penington moves to disqualify Bradley from representing the Third Parties in
relation to the subpoenas. (Doc. 40.) Penington argues that disqualification is warranted
for two independent reasons: first, Bradley’s representation of the Third Parties violates
Ethical Rule (“ER”) 1.7 because “Bradley’s representation of [Cherry] is directly adverse
to the Third Parties” or because “Bradley’s concurrent representation of [Cherry] and the
Third Parties is, at minimum, materially limited” due to a significant risk that Bradley’s
independent judgment in relation to each client will be impaired; and second, Bradley’s
conduct in objecting on behalf of the Third Parties and refusing to produce documents “is
improper” under Rule 45 of the Federal Rules of Civil Procedure,1 which “does not permit
a party to the litigation to advise a third party to object or ignore a subpoena,” and under
ER 3.4(a) and (f). (Id. at 6-8.)
The Third Parties argue in response that Penington does not have standing to seek
Bradley’s disqualification on conflict-of-interest grounds and, at any rate, there is no
1 Although the motion refers to “Fed.R.Evid. 45,” there is no such rule, and the Court
assumes this was meant to be a reference to Rule 45 of the Federal Rules of Civil Procedure.
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conflict of interest between Cherry and the Third Parties. (Doc. 41 at 3-7.) The Third
Parties further argue that they had the right to retain Bradley as their counsel of choice,
such that ER 3.4(f) is inapplicable, and that the objections they lodged are “expressly
permitted” under Rule 45. (Id. at 7-8.) The Third Parties further argue that Penington’s
“contrived accusations of ethical impropriety and frivolous [arguments] warrant
sanctions.” (Id. at 8.)2
In reply, Penington reiterates its disqualification arguments and purports to identify
“smoking-gun evidence” establishing the existence of a conflict of interest between Cherry
and the Third Parties. (Doc. 42 at 4.)3
II. Legal Standard
“Anyone appearing before the court is bound by” the District of Arizona’s local
rules, LRCiv 83.3(c)(1), which in turn provide that “[t]he ‘Rules of Professional Conduct,’
in the Rules of the Supreme Court of the State of Arizona, shall apply to attorneys”
practicing in the District of Arizona. LRCiv 83.2(e). As a result, the Arizona Rules of
Professional Conduct are applicable here. Christensen v. U.S. Dist. Ct. for Cent. Dist. of
California, 844 F.2d 694, 697 n.6 (9th Cir. 1988) (“Because the Central District of
California has expressly adopted the California ethical rules, we must decide whether the
district court properly applied the California rules.”); Unified Sewerage Agency v. Jelco
Inc., 646 F.2d 1339, 1342 n.1 (9th Cir. 1981) (“[T]he United States District Court for the
District of Oregon has adopted as its rules the disciplinary rules of the State Bar of Oregon.
Therefore, in deciding whether the district court properly denied Jelco’s motion to
disqualify the plaintiff’s law firm, we must decide whether the district court properly
applied the Code of Professional Responsibility adopted by the State Bar of Oregon.”)
(citation omitted).
2 The Third Parties’ request for oral argument is denied because the issues are fully
briefed and argument would not aid the decisional process. See LRCiv 7.2(f).
3 After Penington filed its reply, the Third Parties filed a request for leave to file a
sur-reply. (Doc. 43.) That request is denied as moot in light of the Court’s determination,
discussed below, that Penington’s disqualification request should be denied on the existing
record.
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Arizona decisional law construing Arizona’s Rules of Professional Conduct may
also be applicable here. In a case arising from the Central District of California—which,
as noted, has expressly adopted, by local rule, California’s ethical rules—the Ninth Circuit
held that “we apply state law in determining matters of disqualification” and “must follow
the reasoned view of the state supreme court when it has spoken on the issue.” In re Cnty.
of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000). In another case arising from the Central
District of California, the Ninth Circuit further held that “[i]f the state supreme court has
not spoken on the issue, we look to intermediate appellate courts for guidance, although
we are not bound by them if we believe that the state supreme court would decide
otherwise.” Radcliffe v. Hernandez, 818 F.3d 537, 543 (9th Cir. 2016). Because the District
of Arizona has, like the Central District of California, expressly adopted the underlying
state’s ethical rules, district courts in the District of Arizona routinely follow Arizona
decisional law when resolving disqualification requests. See, e.g., Roosevelt Irr. Dist. v.
Salt River Project Agr. Imp. & Power Dist., 810 F. Supp. 2d 929, 944 (D. Ariz. 2011);
Sandoval v. Corizon, L.L.C., 2017 WL 2687626, *4 (D. Ariz. 2017); D. Stadtler Tr. 2015
Tr. v. Gorrie, 2023 WL 355887, *3-4 (D. Ariz. 2023); Takeover Indus. Inc. v. Holley, 2025
WL 1191771, *7 (D. Ariz. 2025).4
In Arizona, motions to disqualify are “view[ed] with suspicion.” Gomez v. Superior
4 The Court acknowledges that whereas the District of Arizona has only adopted the
Arizona Rules of Professional Conduct, see LRCiv 83.2(e), the Central District of
California has adopted both “the Rules of Professional Conduct of the State Bar of
California, and the decisions of any court applicable thereto.” C.D. Cal. L.R. 83-3.1.2
(emphasis added). Given this distinction, it is unclear whether County of Los Angeles’s
holding regarding the binding nature of state-court decisional law on matters of
disqualification also applies here. Compare Shawarma Stackz LLC v. Jwad, 2021 WL
5830625, *2 (S.D. Cal. 2021) (“In this circuit, district courts that have adopted by local
rule the state’s ethical code governing lawyers must follow the reasoned view of the state
supreme court when it has spoken on the issue.”) (cleaned up) with Crago v. Pitz, 627 F.
Supp. 3d 1066, 1071 (D. Ariz. 2022) (“[E]ven accepting the District of Arizona’s local rule
incorporates the text of Rule 4.2, it would not be appropriate to defer blindly to state court
interpretation regarding the reach of Rule 4.2.”). See generally Cord v. Smith, 338 F.2d
516, 524 (9th Cir. 1964) (holding that state-court decisional law bearing on attorney ethics
did not “control[]” in a disqualification proceeding and that “federal courts [need not]
permit, in proceedings before those courts, whatever action by an attorney-at-law [that]
may be sanctioned by the courts of the state”). It is unnecessary to resolve that issue in this
case because the outcome would be the same regardless of whether Arizona decisional law
interpreting the Arizona Rules of Professional Conduct were deemed binding.
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Court, 717 P.2d 902, 905 (Ariz. 1986). “Only in extreme circumstances should a party to
a lawsuit be allowed to interfere with the attorney-client relationship of his opponent.”
Alexander v. Superior Court, 685 P.2d 1309, 1313 (Ariz. 1984). “[T]he moving party . . .
[must] show sufficient reason why an attorney should be disqualified from representing his
client. Whenever possible the courts should endeavor to reach a solution that is least
burdensome upon the client or clients.” Id. The Preamble to the Arizona Rules of
Professional Conduct cautions that “violation of a Rule does not necessarily warrant any
other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation.”
Ariz. Sup. Ct. R. 42, Ariz. R. Pro. Conduct Preamble ¶ 20. See also id. (“[T]he purpose of
the Rules can be subverted when they are invoked by opposing parties as procedural
weapons.”). “[D]isqualification motions should be subjected to ‘particularly strict
scrutiny’ because of their potential for abuse.” Roosevelt Irr. Dist., 810 F. Supp. 2d at 944
(citation omitted). “In determining whether disqualification is required, courts have
examined various factors, including (1) the nature of the ethical violation, (2) the prejudice
to the parties, including the extent of actual or potential delay in the proceedings, (3) the
effectiveness of counsel in light of the violations, and (4) the public’s perception of the
profession.” Rsch. Corp. Techs. v. Hewlett-Packard Co., 936 F. Supp. 697, 703 (D. Ariz.
1996). The Court “consider[s] the facts and circumstances of each case, including the
particulars of the ethical violation itself, in determining whether the harsh sanction of
disqualification is warranted.” Id.
III. Analysis
A. ER 1.7(a)
Penington first seeks disqualification under ER 1.7(a), which provides in relevant
part that “[a] concurrent conflict of interest exists if: (1) the representation of one client
will be directly adverse to another client; or (2) there is a significant risk that the
representation of one or more clients will be materially limited by the lawyer’s
responsibilities to another client, a former client or a third person or by a personal interest
of the lawyer.”
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In the Ninth Circuit, the “general rule” is that “courts do not disqualify an attorney
on the grounds of conflict of interest unless [a former or current client] moves for
disqualification.” Kasza v. Browner, 133 F.3d 1159, 1171 (9th Cir. 1988). See also
Blacktail Mountain Ranch Co., LLC v. Jonas, 611 F. App’x 430 (9th Cir. 2015) (“Plaintiffs
lacked standing to move for disqualification because they were not clients or former clients
of Defendants’ counsel”); De Dios v. Int’l Realty & Invs., 641 F.3d 1071, 1077 (9th Cir.
2011) (district court’s finding that plaintiff “lacked standing to seek disqualification for
defense counsel’s alleged breach of duties to his client” was “well grounded and legally
correct”). Likewise, under Arizona law, “[g]enerally, only a client or a former client has
standing to challenge legal representation on grounds of conflict of interest.” State ex rel.
Romley v. Superior Court, 891 P.2d 246, 248 (Ariz. Ct. App. 1995). There are
“exception[s] to the general rule,” but they arise “only in extreme circumstances.” Id.
(cleaned up).
The Ninth Circuit and Arizona courts have both cited, with approval, the Fifth
Circuit’s decision in In re Yarn Processing Pat. Validity Litig., 530 F.2d 83 (5th Cir. 1976).
Kasza, 133 F.3d at 1171; Romley, 891 P.2d at 248. There, the Fifth Circuit emphasized
that consent of present and former clients “will prevent the disqualification of the attorney”
on conflict-of-interest grounds. Yarn Processing, 530 F.2d at 89. The Ninth Circuit has
cited Yarn Processing in support of the proposition that a client “may expressly or
impliedly waive his objection and consent to the adverse representation,” adding that “[i]t
is well settled that a former client who is entitled to object to an attorney representing an
opposing party on the ground of conflict of interest but who knowingly refrains from
asserting it promptly is deemed to have waived that right.” Tr. Corp. of Montana v. Piper
Aircraft Corp., 701 F.2d 85, 87 (9th Cir. 1983). For these reasons, and because this case
does not present an extreme circumstance, Plaintiff lacks standing to seek disqualification
of the Third Parties’ counsel on conflict-of-interest grounds. Accord CWT Canada II Ltd.
P’ship v. Bridges, 2017 WL 3534977, *3 (D. Ariz. 2017) (“Assuming without deciding
that [there is] a conflict of interest under Ethical Rule 1.7, Plaintiffs do not have standing
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to bring a motion to disqualify WB on this basis.”); Xcentric Ventures, LLC v. Stanley,
2007 WL 2177323, *2 (D. Ariz. 2007) (“Defendants . . . lack standing to move for the
disqualification of Plaintiffs’ counsel on the ground of conflict of interest.”); Wakefield v.
Advanced Med. Servs. Corp., 2010 WL 11628521, *5 (D. Ariz. 2010) (“The Court also
concludes that Defendants do not have standing to move for disqualification of Mr. Britt
based upon an alleged conflict of interest.”).
Alternatively, even if Penington had standing, Penington’s arguments regarding ER
1.7 would fail on the merits. Cf. Kasza, 133 F.3d at 1171 (“Regardless, even assuming that
Frost does have standing, we see no basis for disqualification.”). Penington asserts that
“Bradley’s representation of [Cherry] is directly adverse to the Third Parties” because “[b]y
refusing to produce documents on behalf of the Third Parties, [Bradley] is actively
shielding [Cherry] from discovery while simultaneously advising subpoenaed non-parties
to withhold information they are obligated to produce,” such that Bradley “cannot advocate
a position for [Cherry] without undermining the Third Parties’ legal obligations in this
matter.” (Doc. 40 at 6.) As an initial matter, this argument rests on the false premise that
the Third Parties lack the right to object to the subpoenas. More broadly, it is simply untrue
that Cherry’s and the Third Parties’ interests are “directly adverse” in this context.
Examples of “directly adverse” representations include when “a lawyer . . . act[s] as an
advocate in one matter against a person the lawyer represents in some other matter, even
when the matters are wholly unrelated,” when a lawyer “cross-examine[s] a client who
appears as a witness in a lawsuit involving another client,” and when “a lawyer is asked to
represent a seller in negotiations with a buyer represented by the lawyer.” ER 1.7, cmts.
6-7. In contrast, “simultaneous representation in unrelated matters of clients whose
interests are only economically adverse, such as representation of competing economic
enterprises in unrelated litigation, does not ordinarily constitute a conflict of interest.” Id.,
cmt. 6. Here, far from being directly adverse or even economically adverse, the interests
of Cherry and the Third Parties in this litigation appear to be aligned. As the Third Parties
persuasively explain in their response brief, “the common interest among Cherry and the
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[Third Parties] is readily apparent. Trilantic . . . and Brookfield . . . are both owners of
[Cherry]. Aurum . . . helped facilitate the acquisition of their ownership interest. Their
common interest in [Cherry’s] successful operation, expansion, and dismissal of this
lawsuit is clear.” (Doc. 41 at 6-7.)
Meanwhile, although a conflict of interest also “exists if there is a significant risk
that a lawyer’s ability to consider, recommend or carry out an appropriate course of action
for the client will be materially limited as a result of the lawyer’s other responsibilities or
interests,” see ER 1.7, cmt. 8, Penington has not established that such a significant risk
exists here. Penington contends the challenged representation arrangement is so obviously
improper that no existing Arizona precedent addresses it,5 but Penington overlooks that
courts outside Arizona and the Ninth Circuit have consistently declined to order
disqualification under analogous circumstances. For example, in Closure Sys, Int’l Inc. v.
Novembal USA Inc., 2020 WL 4726735 (S.D. Ind. 2020), a law firm concurrently
represented the defendant and a non-party subpoena recipient. Id. at *3. The plaintiff
moved to disqualify the law firm, arguing that the concurrent representation arrangement
violated Indiana Rule of Professional Conduct 1.7, but the court concluded that “the
potential conflict pointed to by [the plaintiff] clearly is not ‘sufficiently grave’ as to call
into question the fair or efficient administration of justice such that [the plaintiff] has
standing to pursue its motion to disqualify [the law firm].” Id. Similarly, in ChemFree
Corp. v. J. Walter, Inc., 2008 WL 5234252 (N.D. Ga. 2008), a law firm concurrently
represented the defendants and certain non-party witnesses. Id. at *1. The plaintiff filed a
motion asking the court “to conduct an investigation into possible attorney misconduct,”
arguing that the concurrent representation arrangement violated Georgia Rule of
5 Doc. 40 at 7 n.1 (“[T]he reason for the absence of case law is simple. In complex
commercial litigation cases, involving third party discovery, Arizona attorneys do not
simultaneously represent the parties to the litigation and third parties that have been served
with subpoenas in litigation.”); Doc. 42 at 2 [“[T]he absence of directly on-point cases
reflects the obvious: Arizona attorneys do not undertake the untenable position of
simultaneously representing parties to litigation while also representing non-parties who
have been served with subpoenas in that same matter. This is a basic ethical boundary that
reasonable practitioners understand not to cross, and as a result, courts have had little
occasion to address it.”).
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Professional Conduct 1.7, but the court denied the motion on the ground that “[i]t is not
facially improper to simultaneously represent a party in a case and also to represent a non-
adversarial, fact witness in that case.” Id. at *1-2. In reaching this conclusion, the court
acknowledged that the representation arrangement could be viewed as a “strategic” tactic
intended “to lawfully obstruct some limited discovery” but concluded that, “[w]ithout
more, the fact of the representation of the witness and the party does not violate the rule.”
Id. at *2. And again, in Guillen v. City of Chicago, 956 F. Supp. 1416 (N.D. Ill. 1997),
where a law firm concurrently represented the defendant and certain non-party witnesses,
the plaintiffs moved to disqualify the law firm from representing the non-party witnesses,
arguing that the concurrent representation arrangement violated both Rule 1.7 of the Rules
of Professional Conduct for the Northern District of Illinois and an ABA model disciplinary
rule whose “closest analogue . . . is Rule 1.7,” but the court denied the disqualification
request because the plaintiffs had “not demonstrated that an impermissible conflict of
interest has emerged (or almost certainly will emerge) in concrete form.” Id. at 1422-23.
In reaching this conclusion, the court acknowledged that conflicts “could arise” but
emphasized that informed consent by the client, rather than “immediate disqualification,”
was the appropriate remedy. Id. at 1426-27.
Nor is disqualification warranted based on Penington’s contention that the Third
Parties’ objections are substantively baseless and designed to advance Cherry’s litigation
position. (Doc. 40 at 9 [“When [Bradley] represents both [Cherry] and the Third Parties,
the Third Parties’ obligations to respond to [Penington’s] subpoenas completely and
candidly become effectively subordinated to [Cherry’s] litigation strategy. Courts have a
paramount interest in preventing manipulation of this kind to deter future misconduct,
preserve confidence in judicial outcomes, and send a clear message that ethical rules cannot
be circumvented to gain a tactical advantage.”].) In Guillen, the parties seeking
disqualification similarly argued that “the alleged conflict between the paramedics and the
defendants will force City counsel to instruct the paramedics to . . . frustrate the discovery
process by refusing to answer legitimate questions,” but the district court held it possessed
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an array of tools for addressing discovery abuses that are more surgical than the blunt
instrument of a disqualification order. Guillen, 956 F. Supp. at 1423-24 (“[R]emedies less
drastic than disqualification are available to solve any problems that might arise during the
discovery process. The court may, for example, call upon City counsel to explain why it
has objected to some or all of the plaintiff’s questions. The court could also impose
appropriate sanctions against City counsel for vexatious delay.”) (citing In re Coordinated
Pretrial Proceedings in Petroleum Products Antitrust Litig., 658 F.2d 1355 (9th Cir.
1981)). Here, too, to the extent Penington believes the Third Parties’ objections are
substantively baseless, it can seek targeted relief through the usual discovery-dispute
channels.
B. ER 3.4 And Rule 45
Penington’s remaining basis for seeking disqualification is that Bradley’s conduct
in objecting on behalf of the Third Parties and refusing to produce documents “is improper”
under Rule 45 and ER 3.4(a) and (f). (Doc. 40 at 6-8.)
ER 3.4(f) provides that a lawyer shall not, absent exceptions that are inapplicable
here, “request a person other than a client to refrain from voluntarily giving relevant
information to another party.” This provision is inapplicable because the Third Parties are
Bradley’s clients. Thus, Bradley is not asking “a person other than a client” to do anything
when it acts as counsel for the Third Parties in relation to the subpoenas.
ER 3.4(a) provides that a lawyer shall not “unlawfully obstruct another party’s
access to evidence,” “unlawfully alter, destroy or conceal a document or other material
having potential evidentiary value,” or “counsel or assist another person to do any such
act.” This subdivision comes into play only when an attorney acts “unlawfully,” and there
is no indication in Penington’s motion that Bradley had acted unlawfully. Indeed, serving
a written objection is a course of action specifically permitted by Rule 45 to protect a
subpoena recipient. Fed. R. Civ. P. 45(d)(1)(B).
Although Penington identifies various cases in which a court determined that
advising a third party not to respond to a subpoena was improper (Doc. 40 at 8), those cases
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are distinguishable because, as the Third Parties note, “no attorney-client relationship
existed between those counsel and the non-parties” (Doc. 41 at 7). For example, in Price
v. Trans Union, L.L.C., 847 F. Supp. 2d 788 (E.D. Pa. 2012), after the defendant issued
subpoenas to third parties, the plaintiff’s attorney “wrote letters to those third parties . . .
[advising] the third parties not to respond.” Id. at 791. Although the court stated that
“[n]owhere in [Rule 45] is it contemplated that the adversary of the party seeking the
information may advise, no matter the reasons, the person commanded by the subpoena to
produce the information to ignore the subpoena’s command,” this statement was made in
the context of sending “Advice Letters” to non-clients, not providing legal advice to a
client. Id. at 794. At any rate, Rule 45 allows a subpoena recipient to object to the
subpoena. Next, in Fox Indus., Inc. v. Gurovich, 2006 WL 2882580 (E.D.N.Y. 2006), an
attorney who was not retained to represent subpoenaed third parties sent them letters which
“did not . . . merely ‘ask’ the recipients not to respond; [they] also announced, in bold print,
that due to alleged service flaws, ‘the subpoena is null and void as a matter of law and
should not be complied with.’” Id. at *2 (emphasis omitted). By sending an unsolicited
letter directing subpoenaed third parties not to respond, the attorney “usurped the authority
of the court.” Id. at *8. This is a far cry from the current situation. And in Handloser v.
HCL Am., Inc., 2020 WL 6460986 (N.D. Cal. 2020), defense counsel implicitly threatened
to sue a subpoenaed third party if it responded to the plaintiff’s subpoena. Id. at *4-5.
Again, that is not the situation here. In contrast, in cases (such as this one) where the lawyer
accused of the Rule 3.4 violation was retained by the third party, courts have declined to
find a violation. Adkisson v. Jacobs Eng’g Grp., Inc., 2016 WL 6534273, *5-6 (E.D. Tenn.
2016); ChemFree Corp., 2008 WL 5234252 at *4-5.
One loose end to be addressed is Penington’s argument, raised for the first time in
its reply brief, that there is “smoking-gun evidence” in the form of “communications
responsive to the subpoenas” that “[Penington] possesses” and that the Third Parties’
subpoena response “falsely claimed do not exist.” (Doc. 42 at 2-4.) More specifically,
Penington notes that although Aurum asserted in its response letter that it had no
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“responsive, non-privileged documents in its custody, possession, or control” in relation to
Request No. 6—which sought “all internal Documents and Communications relating to
[Penington]”— Penington independently possesses at least one such document: an August
13, 2025 email from an Aurum representative to a Penington representative asking whether
Penington would be interested in “Cherry taking a minority position in your company.”
(Id.) Penington argues that “[t]his communication (and the internal communications that
lead-up to this communication) are clearly responsive to the subpoena [Penington] served.
Yet, [Bradley], serving as both [Cherry’s] counsel and Aurum’s counsel, indicated in
response to [Penington’s] subpoena that this communication (and communications like this
communication) did not exist. It begs the question, what other documents exist and why
[is Cherry] so interested in preventing them from disclosure.” (Id. at 4.)
Nothing about this argument changes the disqualification calculus. As an initial
matter, Penington does not explain why it waited to raise this argument until its reply
brief—presumably, it already had the August 13, 2025 email in its possession at the time
it filed its disqualification motion on March 17, 2026. Zamani v. Carnes, 491 F.3d 990,
997 (9th Cir. 2007) (“The district court need not consider arguments raised for the first
time in a reply brief.”). Nor does Penington clearly explain why the August 13, 2025
email—which is an external communication from Aurum to Penington—would be
responsive to the Request No. 6, which, as noted, only sought “internal Documents and
Communications relating to [Penington].” At any rate, to the extent Penington believes
that Aurum’s response to the subpoena is, for whatever reason, insufficient, Penington may
seek relief by following the usual process of meeting and conferring and then, if necessary,
seeking targeted judicial relief. There is no basis for proceeding directly to disqualification.
Burch & Cracchiolo, P.A. v. Myers, 351 P.3d 376, 386 (Ariz. Ct. App. 2015) (“[B]ecause
disqualification motions are disfavored, the trial court should always consider alternative
solutions that will adequately address the purported harm.”) (cleaned up).
Finally, the Third Parties’ request to recover the fees they incurred in responding to
Penington’s disqualification request (Doc. 41 at 8-9) is denied. The sole authority cited by
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the Third Parties in support of this request, Rule 37(a)(5)(B), authorizes the imposition of
fees upon the denial of motion for an order compelling disclosure or discovery, yet that is
not the sort of relief Penington seeks.
Accordingly,
IT IS ORDERED that:
1. Penington’s motion to disqualify (Doc. 40) is denied.
2. The Third Parties’ motion for leave to file a sur-reply (Doc. 43) is denied as
moot.
Dated this 27th day of April, 2026.
Case 2:25-cv-02964-DWL Document 45 Filed 04/27/26 Page 13 of 13