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Watkins v. Trans Union, LLC

United States District Court, S.D. Indiana, Terre Haute Division

September 15, 2016

TRANS UNION, LLC, Defendant.


          Hon. William T. Lawrence, Judge

         The issue before the Court is whether attorney G. John Cento should be disqualified from representing the Plaintiff in this case brought under the Fair Credit Reporting Act (“FCRA”) because he previously represented the Defendant, Trans Union LLC, defending it in numerous FCRA cases. The issue has been extensively briefed by the parties, and the Court has held a hearing on the matter. The Court, being duly advised, now finds that Cento is not disqualified from representing the Plaintiff in this case.


         Cento was working as an attorney at the law firm of Katz & Korin, P.C., when attorney Robert Schuckit joined the firm in September 2001, bringing Trans Union with him as a client. Cento soon began representing Trans Union, and by 2003 he was working almost exclusively on Trans Union cases. In June 2005, Schuckit left Katz & Korin to form his own law firm, Shuckit & Associates; Cento worked at that firm until July 2005. Between 2001 and 2005, Cento represented Trans Union in some capacity in over 250 cases, filing appearances in over 80 cases, and billing over 4, 000 total hours for work for Trans Union. All or virtually all of this work involved cases filed under the FCRA pursuant to which Trans Union, as a credit reporting agency, is regularly sued. Eventually Cento's work also included supervising other attorneys who represented Trans Union.

         Cento's relationship with Trans Union was typical of an attorney who represents a corporate client extensively over a period of years-he worked closely with Trans Union's in-house counsel and other employees on the cases he was involved in, he had full access to whatever information he needed regarding Trans Union's business, and he participated in meetings to discuss things like litigation strategy, trends in litigation, and how Trans Union should address “hot button issues” and new developments in the law. Some of the Trans Union employees he worked with are still with Trans Union; others are not.

         Cento has not represented Trans Union since July 2005. Schuckit and his firm still serve as regional counsel for Trans Union.


         The procedural history of this case is somewhat unusual, and while it is not particularly relevant to the resolution of the issue before the Court, the Court mentions it in order to ensure that there is no confusion with regard to the standard under which the Court is operating.

         Trans Union has successfully moved to disqualify Cento in two other cases in which he represented Plaintiffs in suits against it, convincing those courts that Cento's appearance against it in those cases violated his duties to his former client under Indiana Rule of Professional Conduct 1.9. See Childress v. Trans Union, LLC, 1:12-cv-184-TWP-DML (S.D. Ind.); and Hobson v. Trans Union, LLC, 1:13-cv-54-JD-RBC (N.D. Ind.). Rather than file a motion to disqualify in this case, Trans Union filed a motion seeking an order to show cause why Cento should not be disqualified for the same reasons that he was disqualified in Childress and Hobson. The district judge previously assigned to this case granted that motion and ordered Cento “to show cause as to why he should not be disqualified from representing Plaintiff against Defendant pursuant to Indiana Rule of Professional Conduct 1.9 and the rationale set forth in” Childress and Hobson. Dkt. No. 13. After a contentious and protracted battle over whether and to what extent Cento should be permitted to conduct discovery, Cento responded to the order to show cause and Trans Union filed a reply brief. The matter was then referred to Magistrate Judge Hussmann by the previous district court judge “pursuant to 28 U.S.C. § 636(b)(1)(B) to rule on any related motions and conduct any necessary hearings and issue a report and recommendation regarding Attorney Cento's potential disqualification.” Dkt. No. 51.

         Shortly after Magistrate Judge Hussmann entered his report and recommendation, this case was reassigned to the undersigned. For reasons explained in a previous entry, Dkt. No. 81, the Court decided to exercise its authority to begin with a clean slate, rather than addressing Trans Union's objections to the Magistrate Judge's report and recommendation. See Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 760 (7th Cir. 2009) (“[T]he district judge remains the final authority in the case, and he may reconsider sua sponte any matter determined by a magistrate judge.”); 28 U.S.C. § 636(b)(1)(C) (district judge “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge”). The Court, therefore, will not be addressing the reasoning of Magistrate Judge Hussmann's decision. Nor is the Court bound by the rulings in Childress and Hobson. Wirtz v. City of S. Bend, 669 F.3d 860, 863 (7th Cir. 2012) (“A district court decision does not have precedential effect-that is, it is not an authority, having force independent of its reasoning, and to which therefore a court with a similar case must defer even if it disagrees, unless the circumstances that justify overruling a precedent are present.”). Accordingly, to the extent that Trans Union suggests that those decisions should dictate the results of these proceedings, it is incorrect.


         “What duties lawyers owe their former clients depends on the law of the jurisdiction where the representation occurred. . . . When representing a client in federal court, a lawyer must follow federal rules. Most federal courts use the ethical rules of the states in which they sit, though a few (the Northern District of Illinois being a good example) have elaborate federal rules of practice.” Huusko v. Jenkins, 556 F.3d 633, 636 (7th Cir. 2009). The Southern District of Indiana's Local Rule 83-5(e) provides that the Indiana Rules of Professional Conduct govern the conduct of attorneys appearing in this district. Accordingly, it is Indiana Rule of Professional Conduct 1.9 (“Rule 1.9”) that governs whether Cento may ethically represent Watkins in this case.

         Trans Union argues that “federal common law, ” as set forth by the Seventh Circuit in LaSalle National Bank v. Lake Co., 703 F.2d 252, 255-56 (7th Cir. 1983) and Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1266-67 (7th Cir. 1983), is the source of the appropriate test in this case. Indeed, at the hearing on this matter, Trans Union suggested that the law as set forth in those cases is more relevant than Rule 1.9:

I think what we have to kind of get straight here is: Where do the rules for conflict of interest and substantial relationship-where do those all derive from? It is, on the one hand, Indiana Rule 1.9. But in addition, the courts, in LaSalle, and in the other cases we cited, like Anaylti ...

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