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Medhealth Nursing, LLC v. Vessigault

United States District Court, N.D. California

July 21, 2014

MEDHEALTH NURSING, LLC and DANILO MALLARI, Plaintiff,
v.
TRACY VESSIGAULT, DIANA MARANA, DORIS JORDAN, and COLLEEN TRAYNOR, Defendant.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS; DENYING PLAINTIFF'S MOTION TO DISQUALIFY COUNSEL (Docket Nos. 34, 37).

CLAUDIA WILKEN, District Judge.

Plaintiff Danilo Mallari, proceeding pro se, brought this action under 42 U.S.C. § 1983 against four employees of the California Department of Public Health (CDPH): Tracy Vessigault, Diana Marana, Doris Jordan, and Colleen Traynor. Defendants move to dismiss. Plaintiff opposes the motion and moves to disqualify attorney Craig Modlin as Defendants' counsel. Defendants oppose Plaintiff's motion. After reviewing the parties' submissions, the Court grants Defendants' motion to dismiss without leave to amend and denies Plaintiff's motion to disqualify Modlin as Defendants' counsel.

BACKGROUND

Mallari owned and operated a home health care agency (HHA) called Medhealth Nursing, LLC from 2011 until 2012. In March 2012, however, CDPH revoked Medhealth's license to operate as a HHA. In August 2012, Mallari sought reconsideration of CDPH's revocation of the license.

In May 2013, while his request for reconsideration was still pending, Mallari and Medhealth filed the instant action in Alameda County Superior Court. They alleged that CDPH had violated their civil rights under state and federal law by revoking Medhealth's HHA license. The court dismissed their complaint in July 2013 but granted them leave to amend. In August 2013, Mallari and Medhealth filed a first amended complaint in which they abandoned all of their claims under state law and asserted only one claim against Defendants under 42 U.S.C. § 1983. Defendants removed the action to this Court two weeks later.

In September 2013, Defendants moved to dismiss the first amended complaint. Mallari, whose counsel never entered an appearance in this action after it was removed, opposed the motion to dismiss and moved for leave to represent Medhealth. The Court denied Mallari's motion in February 2014, finding that Ninth Circuit case law and Civil Local Rule 3-9(b) precluded him from representing Medhealth because he is not a licensed attorney. The Court also granted Defendants' motion to dismiss because the complaint failed to allege sufficient facts to support a § 1983 claim or show that Mallari had standing to bring a § 1983 claim based on the revocation of Medhealth's license. The Court granted Mallari leave to plead additional facts to establish standing and granted him and Medhealth leave to amend their § 1983 claim. The Court noted, however, that Medhealth would not be permitted to proceed unless it was represented licensed counsel.

In March 2014, Mallari filed a second amended complaint re-asserting his § 1983 claim and asserting various new claims under state law. In the complaint, he seeks roughly $800, 000 in compensatory and punitive damages. Medhealth did not join in the filing of the complaint and does not appear to have retained licensed counsel.

In April 2014, Defendants moved to dismiss the second amended complaint. Mallari opposed the motion and cross-moved to disqualify Defendants' counsel.

DISCUSSION

I. Plaintiff's Motion to Disqualify Counsel

A. Legal Standard

Civil Local Rule 11-4 provides, "Every member of the bar of this Court and any attorney permitted to practice in this Court under Civil L.R. 11 must... [b]e familiar with and comply with the standards of professional conduct required of members of the State Bar of California." Civ. L.R. 11-4(a)(1). The California Standards of Professional Conduct include the State Bar Act, the Rules of Professional Conduct of the State Bar of California, and decisions of any court applicable thereto. See Civ. L.R. 11-4 Commentary.

Although violations of the standards of professional conduct may serve as a basis for disqualification under certain circumstances, see United States v. Wunsch , 84 F.3d 1110, 1114 (9th Cir. 1996), "[m]otions to disqualify counsel are strongly disfavored, " Visa U.S.A., Inc. v. First Data Corp. , 241 F.Supp.2d 1100, 1103 (N.D. Cal. 2003). "Because of th[e] potential for abuse, disqualification motions should be subjected to particularly strict judicial scrutiny, " Optyl Eyewear Fashion Int'l Corp. v. Style Cos. , 760 F.2d 1045, 1050 (9th Cir. 1985) (internal quotation marks omitted), ...


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