On October 24, 2023, the Court of Appeal for the State of California, Fourth Appellate District, handed down a unanimous ruling affirming a decision by the Superior Court of San Diego County disqualifying the Austin Legal Group APC (“ALG”) as counsel in litigation pending before that court. The underlying case was brought by KF&C on behalf of clients RWB Platinum Vape, Inc. and Red White & Bloom Brands, Inc. (together, “RWB”) (Case No. 37-2022-00013335-CU-BC-CTL). RWB is a multi-national cannabis company that in 2020 purchased a group of companies (Vista Prime Management or “VPM”) from George Sadler and Cody Sadler for more than $35 million.
Shortly after the sale, RWB and the Sadlers filed competing lawsuits against each other. The initial lawsuits settled. But then after the settlement, RWB sued the Sadlers again for breach of the sale agreement and settlement agreement, misrepresentation, and violation of non-competition agreements. RWB then successfully moved to disqualify ALG based on ALG’s historical and ongoing representation of the Sadlers and VPM in litigation against RWB. The trial court concluded that RWB had standing to request ALG’s disqualification because VPM and RWB were closely enough related to be treated as one entity for purposes of conflicts. It also found that ALG’s prior representation of VPM was substantially related to the ongoing lawsuit with RWB, concluding that ALG’s disqualification was mandatory.
ALG appealed the decision. After a full round of appellate briefing and oral argument, the appellate court found that there was substantial evidence to support the trial court’s conclusion that RWB and VPM shared a unity of interest and were closely enough related to treat them as a single entity for purposes of conflicts. The appellate court further found that the earlier litigation and the present dispute were substantially related, and that the trial court did not abuse its discretion in disqualifying ALG. The decision was unanimous and can be read here.
The KF&C team includes Partner Matt Cave, Counsel Stephen Raiola (who argued the appeal), Senior Associate Kevin Kroll, Associate Sara Borjigin, Senior Litigation Paralegal Samantha Ahlheim, and Paralegal Megan Schneider.Back To All News