Richard Watkins v. Trans Union, LLC

Plaintiff Richard Watkins has

sued Trans Union for violating the Fair Credit Reporting Act.

The merits of his claims are not the subject of this appeal. The

issue here is whether attorney John Cento should be disqualified

from representing Watkins. That is because over ten

years ago Cento earned a living defending Trans Union in

hundreds of lawsuits alleging Fair Credit Reporting Act violations.

Because the Southern District of Indiana makes use of

2 No. 17‐1142

Indiana’s rules governing attorney conduct, Indiana Rule of

Professional Conduct 1.9 (Duties to Former Clients) governs

Trans Union’s effort to have Cento disqualified.

The district court found that Rule 1.9 does not require

Cento’s disqualification, but the court authorized an interlocutory

appeal of that decision under 28 U.S.C. § 1292(b), which

we accepted. Trans Union argues that the district court applied

the wrong legal standard to decide disqualification and

misapplied the standard that it did apply. We disagree and

affirm the decision of the district court. Because this case turns

on the trajectory of Cento’s legal career, we begin there. We

then review the facts and procedural history of Watkins’s case

before reviewing the district court’s reasons for denying disqualification

under Rule 1.9.

I. Factual and Procedural History

A. John Cento’s Legal Career

John Cento began his career as an attorney at the Indianapolis

law firm of Katz & Korin, P.C., where he worked with

Robert Schuckit. Trans Union was a client first of Schuckit,

and then Katz & Korin when Schuckit joined the firm. Cento

began representing Trans Union in 2001, and between 2003

and 2005 worked almost exclusively on Trans Union cases.

Schuckit then left Katz & Korin in June 2005 to form his own

law firm. Cento followed, but he stayed with Schuckit’s new

firm for just a month.

Almost all of the cases in which Cento represented Trans

Union involved the Fair Credit Reporting Act (FCRA). The

FCRA imposes a duty to maintain reasonable procedures for

accurate reporting. See 15 U.S.C. § 1681e(b). The Act authorizes

a private cause of action for consumers against consumer

No. 17‐1142 3

reporting agencies such as Trans Union for willful, knowing,

or negligent failures to comply with the law. 15 U.S.C.

§§ 1681n–p. A defendant may avoid liability for violations

that occur despite the defendant’s good‐faith effort to comply

with the law. See, e.g., 15 U.S.C. §§ 1681g(e)(5), (7).

Cento defended Trans Union against those claims of FCRA

violations for five years. Between 2001 and 2005, he represented

Trans Union in over 250 cases and billed over 4,000

hours of work for Trans Union. He worked with Trans Union’s

in‐house counsel and employees, and he was given access to

any information necessary for litigation. Today, twelve years

after Cento last represented Trans Union, Schuckit and his

firm continue to represent Trans Union. Some of the Trans Union

employees with whom Cento worked remain with the

company.

In 2013, Cento formed Cento Law, which represents consumers

bringing FCRA violation claims against credit reporting

agencies. The law firm advertises the experience of its attorneys

on its webpage: “Our credit report attorneys have litigated

hundreds of Fair Credit Reporting Act cases across the

country. Our experience in this area of law is derived not only

from representing consumers, but from years of prior representation

of two of the three national consumer reporting

agencies, Trans Union and Equifax.” Cento Law,

http://www.centolaw.com (last visited Aug. 21, 2017). In 2012,

and again in 2013, Cento was disqualified from cases in which

he represented plaintiffs who brought claims against his former

client, Trans Union. Childress v. Trans Union, LLC (Childress

I), No. 1:12‐CV‐00184‐TWP‐DML, 2012 WL 6728339 (S.D.

Ind. Dec. 28, 2012); Hobson v. Trans Union, LLC, No. 1:13‐CV‐

54, 2013 WL 2443917 (N.D. Ind. June 5, 2013).

4 No. 17‐1142

B. The Watkins Litigation

In the present case, Richard Watkins selected Cento to represent

him in his case alleging FCRA violations against Trans

Union under 15 U.S.C. §§ 1681e, 1681g, and 1681i. Watkins

had applied for a loan in 2009 and discovered that his Trans

Union credit file contained twenty “collection tradelines” that

were not his. He disputed the accuracy of his credit file, and

Trans Union removed the incorrectly attributed collections.

But when Watkins applied for a mortgage in 2013, he learned

that the collections had once again been placed in his credit

file. The problem, Watkins alleges, is that Trans Union’s algorithms

have resulted in the merging or mixing of Watkins’s

credit file with that of another person to create a “mixed file,”

and that Trans Union has failed to remedy the continued inclusion

of collections not belonging to Watkins. The merits of

Watkins’ claims will turn on whether the procedures Trans

Union used “reasonable procedures to assure maximum possible

accuracy” of the information about Watkins, see 15

U.S.C. § 1681e(b), and whether Trans Union made good‐faith

efforts to comply with the law, § 1681g(e)(5) & (e)(7).

Cento filed Watkins’s complaint in May 2014. One month

later, Trans Union filed a motion to order Cento to show cause

why he should not be disqualified as Watkins’ lawyer. Watkins

v. Trans Union, LLC, No. 2:14‐cv‐135‐WTL‐DKL, 2016 WL

4919999, at *1 (S.D. Ind. Sept. 15, 2016). The district court

granted that motion and permitted Cento to seek limited discovery

to aid in showing cause. Id. This was an unusual procedural

path for seeking attorney disqualification. Rather

than file a motion to disqualify, Trans Union sought a showcause

order in reliance on the cases in which Trans Union had

successfully sought disqualification against Cento in the past.

No. 17‐1142 5

Id.; see also Childress I, 2012 WL 6728339; Hobson, 2013 WL

2443917. The discovery process that followed the show‐cause

order resulted in a magistrate judge report with three alternate

recommendations (to hold an evidentiary hearing; to decline

to disqualify; or, alternatively, to disqualify), but Judge

Lawrence, to whom the case was reassigned after the magistrate

proceedings, decided to “exercise [the court’s] authority

to begin with a clean slate.” Watkins, 2016 WL 4919999, at *2.

The parties briefed the attorney disqualification issue and the

court held a hearing before issuing its decision. Id. at *1.

In the district court, as on appeal, Trans Union relied on

LaSalle National Bank v. Lake County, 703 F.2d 252 (7th Cir.

1983), and Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263

(7th Cir. 1983), to argue that federal common law governs the

standard for disqualification. Both cases predate Indiana Rule

of Professional Conduct 1.9, which, as the district court found

here, governs the issue of disqualification. After analyzing the

precedents and the history of the adoption of the Rules of Professional

Conduct, Judge Lawrence followed the guidance of

Rule 1.9 rather than LaSalle National Bank or Analytica and held

that Cento should not be disqualified. Watkins, 2016 WL

4919999, at *6. The prior representations are not factually related

such that the same matter is in dispute in Watkins. Nor,

the judge found, is there a risk that confidential information

from the prior matters would materially advance Watkins’

present claims. Id. at *4–6. Moreover, the judge noted, over a

decade has passed since Cento represented Trans Union. Id.

at *6. Accordingly, the judge held that the requirements for

disqualification were not met. He permitted Cento to continue

representing Watkins. Id.

6 No. 17‐1142

In this interlocutory appeal under 28 U.S.C. § 1292(b),

Trans Union argues that the district court applied the wrong

legal standard for attorney disqualification and misapplied

the standard it chose. We affirm the decision of the district

court.

II. Analysis

We review for abuse of discretion the district court decision

rejecting disqualification. Owen v. Wangerin, 985 F.2d 312,

317 (7th Cir. 1993); Whiting Corp. v. White Machinery Corp., 567

F.2d 713, 715 (7th Cir. 1977) (The district court “possesses

broad discretion in determining whether disqualification is

required in a particular case … .”), quoting Schoetter v. Railoc

of Ind., Inc., 546 F.2d 706, 710 (7th Cir. 1976). An abuse of discretion

can be shown when the district court based its decision

on an erroneous view of the law or a clearly erroneous

evaluation of evidence. See, e.g., Novo Terapeutisk Lab. A/S v.

Baxter Travenol Lab., Inc., 607 F.2d 186, 188–89 (7th Cir. 1979)

(“This court has relied on the broad discretion of the district

court in refusing to disturb a disqualification order, but we

have not allowed a strict standard of review to prevent reversal

when the district court predicated its disqualification ruling

on a misunderstanding of the law.”) (citations omitted).

This standard of review is consistent with other areas of law

in which district judges have discretion but in exercising it

must apply the correct rule of law. See, e.g., Cooter & Gell v.

Hartmarx Corp., 496 U.S. 384, 405 (1990) (“district court would

necessarily abuse its discretion [in deciding Rule 11 sanctions

motion] if it based its ruling on an erroneous view of the

law”); Ervin v. OS Restaurant Services, Inc., 632 F.3d 971, 976

(7th Cir. 2011) (application of incorrect legal rule to decide

class certification would amount to abuse of discretion).

No. 17‐1142 7

We have observed that granting a motion for disqualification

has “immediate, severe, and often irreparable … consequences”

for the party and disqualified attorney. Freeman v.

Chicago Musical Instrument Co., 689 F.2d 715, 719 (1982). Disqualifying

a lawyer immediately deprives the losing party

from the “representation of his choice” and disrupts the litigation.

Id. In sum, “disqualification, as a prophylactic device

for protecting the attorney‐client relationship, is a drastic

measure which courts should hesitate to impose except when

absolutely necessary … [because it] destroy[s] a relationship

by depriving a party of representation of their own choosing.”

Id. at 721.

However, the duty of confidentiality represented in the

Rules of Professional Conduct, like the Code of Professional

Responsibility that came before them, is fundamental to the

profession and the relationship between lawyer and client.

See id. Courts have a duty to safeguard the privacy of the attorney‐

client relationship and in doing so to “maintain public

confidence in the legal profession” and to protect “the integrity

of the judicial proceeding.” Id.

Whether disqualification is appropriate in this case is governed

by the Indiana Rules of Professional Conduct. Lawyers

representing clients in federal courts must follow federal

rules, but most “federal courts use the ethical rules of the

states in which they sit.” Huusko v. Jenkins, 556 F.3d 633, 636

(7th Cir. 2009). Watkins filed suit in the Southern District of

Indiana, which has adopted the Indiana Rules of Professional

Conduct to govern attorneys’ conduct. S.D. Ind. Local Rule 83‐

5(e). Indiana adopted the ABA Model Rules of Professional

Conduct as its Rules of Professional Conduct in 1987. United

States v. Goot, 894 F.2d 231, 234 (7th Cir. 1990). Rule 1.9 governs

8 No. 17‐1142

the duties lawyers owe to former clients and thus whether

Cento should be disqualified from representing Watkins because

of a duty he may owe to his former client, Trans Union.1

A. Indiana Rule of Professional Conduct 1.9

Indiana Rule of Professional Conduct 1.9 mirrors the

A.B.A. Model Rule of the same number and reads, in relevant

part:

A lawyer who has formerly represented a client

in a matter shall not thereafter represent another

person in the same or a substantially related

matter in which that person’s interests are

materially adverse to the interests of the former

client unless the former client gives informed

consent, confirmed in writing.

In interpreting the Rules of Professional Conduct, federal

courts may rely on the specific guidance offered in the commentary.

See Nix v. Whiteside, 475 U.S. 157, 166 (1986); Strickland

v. Washington, 466 U.S. 668, 688 (1984); United States v. Williams,

698 F.3d 374, 386 (7th Cir. 2012) (Hamilton, J., dissenting

1 Special considerations apply to federal government lawyers but are not

implicated here. See, e.g., United States v. Supreme Court of New Mexico, 839

F.3d 888, 893, 929–30 (10th Cir. 2016) (holding that a New Mexico Rule of

Professional Conduct as applied in part to federal prosecutors violated

Supremacy Clause), petition for cert. filed, No. 16‐1450 (June 5, 2017). The

McDade Act requires that an “attorney for the Government shall be subject

to State laws and rules, and local Federal court rules, governing attorneys

in each State where such attorney engages in that attorney’s duties,

to the same extent and in the same manner as other attorneys in that

State.” 28 U.S.C. § 530B. However, the Act “should not be construed in any

way to alter federal substantive, procedural, or evidentiary law… .” 28

C.F.R. § 77.1(b).

No. 17‐1142 9

in part) (commentary to A.B.A. standards governing norms of

legal practice can be “valuable guidance”). The commentary

to Rule 1.9 defines two matters as “substantially related”

when two matters “involve the same transaction or legal dispute,”

or when there is a “substantial risk that confidential

factual information as would normally have been obtained in

the prior representation would materially advance the client’s

position in the subsequent matter.” Ind. R. Prof’l Conduct 1.9,

cmt. 3.

Whether two matters “involve the same transaction” is determined

by an inquiry into whether the matters are factually

related. Comment 2 states: “The scope of a ‘matter’ for purposes

of this Rule depends on the facts of a particular situation

or transaction.” It is the direct involvement “in a specific

transaction,” that makes “subsequent representation of other

clients with materially adverse interests in that transaction

clearly … prohibited.” Id., cmt. 2.

If the prior and present matters do not involve the same

transaction or legal dispute, they may still be substantially related

if there is a substantial risk that confidential information

would materially advance the client’s position in the present

matter. The commentary tells us that information “disclosed

to the public or to other parties adverse to the former client

ordinary will not be disqualifying,” and that information “acquired

in a prior representation may have been rendered obsolete

by the passage of time.” Id., cmt. 3.

On the issue most pertinent to this case, the commentary

explains that “a lawyer who recurrently handled a type of

problem for a former client is not precluded from later representing

another client in a factually distinct problem of that

type even though the subsequent representation involves a

10 No. 17‐1142

position adverse to the prior client.” Id., cmt. 2. “In the case of

an organizational client, general knowledge of the client’s policies

and practices ordinarily will not preclude a subsequent

representation.” Id., cmt. 3.

Rule 1.9 clarified and narrowed the contours of an older

federal common‐law rule for attorney disqualification referred

to as the “substantial relationship test.” The Model

Rules of Professional Conduct, of which Rule 1.9 is a part, replaced

the Model Code of Professional Conduct, which was

based on canons first promulgated in 1908. Monroe Freedman,

The Kutak Model Rules v. The American Lawyer’s Code of

Conduct, 26 Vill. L. Rev. 1165 (1981); Kathleen Maher, Keeping

Up Appearances, 16 Prof. Law. 1 (2005). The Rules were the

product of the Kutak Commission, as it became known,

formed in 1977 to assemble a set of governing rules for the

profession. Freedman, Kutak Model Rules, at 1166. Some of the

Model Rules, including Rule 1.9, explicitly rejected the old

canons. Maher, Keeping Up Appearances (2002 revisions to Rule

1.9 deleted the lingering reference to “appearance of impropriety”

originally housed in Canon 9 because it was “no

longer helpful to the analysis of questions arising under this

Rule”). The Kutak Commission’s proposed Model Rules of

Professional Conduct were issued in 1983 and then adopted

by the states in the years that followed. Indiana adopted the

Model Rules of Professional Conduct as its Rules of Professional

Conduct in 1987. Goot, 894 F.2d at 234.

B. Rule 1.9 Does Not Disqualify Cento from Representing

Watkins

The district court looked to the language of Rule 1.9 and

its commentary and determined that the dispute between

No. 17‐1142 11

Watkins and Trans Union neither involved the “same transaction

or legal dispute” as those prior cases in which Cento represented

Trans Union nor involved a “substantial risk” of confidential

information Cento may have gained while working

for Trans Union materially advancing Watkins’ claim. Watkins,

2016 WL 4919999, at *4, *6. We agree.

1. Different Transactions

First, the present and prior matters are not part of the same

legal dispute. The question turns “on the facts of a particular

situation or transaction,” not whether the matters merely involve

the same type of legal issues. Ind. R. Prof’l Conduct 1.9,

cmt. 2. Here, Cento’s prior representations of Trans Union and

his present representation of Watkins both involve FCRA violations

but do not turn on the same facts of one “particular

situation or transaction.” Id. The facts upon which Watkins’

case will turn—recurrent false collection listings on his credit

report, despite multiple requests to remove them—are unique

to his claim against Trans Union and are not interwoven with

any individual case in which Cento represented Trans Union

in the past.

A comparison between Cento’s representation of Watkins

and the representation at issue in an Indiana Court of Appeal

opinion reinforces this conclusion. In XYZ, D.O. v. Sykes, attorney

Kathleen Clark represented a doctor in six malpractice

cases. 20 N.E.3d 582, 583–84 (Ind. App. 2014). Five years after

her representation of the doctor concluded, she began working

for another law firm. Id. at 584. At that firm, Clark conducted

an intake interview for a plaintiff asserting a malpractice

claim against the same doctor she previously represented.

The firm took the case and directed Clark to work on it. Id.

The trial court denied a motion to disqualify the entire firm

12 No. 17‐1142

for which Clark now worked, but the appellate court reversed.

Id.

Although there are superficial similarities between the

two cases, on closer examination, the facts presented in XYZ

are distinct from those in the present case, which point to a

different outcome. The problem was that the plaintiff in XYZ

was suing both the doctor and the hospital where he performed

surgery on the plaintiff. The plaintiff’s claim against

the hospital was that it had been negligent in issuing credentials

to the doctor based on the same surgeries in which attorney

Clark had defended him. Looking to the language of Comment

3 to Rule 1.9, XYZ found that the old and new representations

were substantially related because the new complaint was

“based in part upon the Hospital’s alleged failure to adequately

investigate the circumstances surrounding those six

prior malpractice cases in which Clark represented [the d]octor.”

Id. at 587. Accordingly, the appellate court found the new

and old representations were substantially related, and that

the passage of time did not cure the problem: “If the six prior

medical malpractice cases remain relevant regarding the current

allegation of negligent credentialing, as [the law firm] admits,

any confidential factual information gleaned during

those prior representations can hardly be deemed stale or obsolete.”

Id. at 587–88.

XYZ is easy to understand on those terms, but this case is

quite different. Watkins’ claims do not turn on any specific

facts of any prior matter in which Cento represented Trans

Union. Watkins’ complaint does not refer to any specific prior

litigation against Trans Union in which Cento represented the

company. In contrast, in XYZ, the prior malpractice cases

No. 17‐1142 13

were specifically at issue in the complaint in the present litigation

against the doctor. Thus, while the old and new representations

in XYZ involved the “same transaction or legal dispute,”

the same cannot be said of the old and new representations

at issue in this case. The district court did not err in

finding the disputes here to be factually distinct.2

2. No Substantial Risk of Using Confidential Information

On Trans Union’s other route to show that disqualification

is needed, it must show a “substantial risk that confidential

factual information as would normally have been obtained in

the prior representation would materially advance the client’s

position in the subsequent matter.” Ind. R. Prof’l Conduct 1.9,

cmt. 3. We look first to the nature of the information Cento

gained as an attorney for Trans Union.

Some of the information Cento learned while working for

Trans Union might be categorized as general knowledge and

experience. It is undisputed that Cento gained experience

while working for Trans Union. In the words of the district

court, that experience “will indisputably benefit his current

and future clients.” Watkins, 2016 WL 4919999, at *6. Cento

even advertises his extensive experience with FCRA litigation

for both plaintiffs and defendants on his website, which is

bound to raise eyebrows. However, having experience is not

the same as possessing confidential information.

2 We have observed that district courts may construe their own local rules.

Even when a federal court has incorporated a state’s rules by reference,

nothing compels the federal court to adopt the state court’s interpretation

of the rule. Weibrecht v. Southern Ill. Transfer, Inc., 241 F.3d 875, 882 (7th Cir.

2001).

14 No. 17‐1142

It is also undisputed that general knowledge about Trans

Union policies and practices to ensure that credit reports are

accurate is discoverable if it is relevant to Watkins’s alleged

FCRA violation. To determine the merits of Watkins’ claims,

the court or jury will need to make findings of fact about

whether the procedures Trans Union used to prepare and to

check the accuracy of Watkins’ consumer report were reasonable.

See 15 U.S.C. § 1681e(b). As in other cases in which Trans

Union has been a defendant, its policies and procedures that

allegedly resulted in the mixed file and that were used to remedy

the problem will be subject to scrutiny. See, e.g., Price v.

Trans Union, LLC, 839 F. Supp. 2d 785, 790–91 (E.D. Penn. 2012)

(explaining how defendant credit reporting agency’s procedures

result in mixed files); O’Connor v. Trans Union Corp., No.

Civ. A. 97‐4633, 1998 WL 770626, at *3 (E.D. Penn. Nov. 5, 1998)

(compelling response to interrogatory regarding procedures

used in handling plaintiff’s mixed file). Comment 3 makes

clear that information “disclosed to the public or to other parties

adverse to the former client ordinary will not be disqualifying.”

Ind. R. Prof’l Conduct 1.9, cmt. 3.

Further, in cases involving an organizational client like

Trans Union, “general knowledge of the client’s policies and

practices ordinarily will not preclude a subsequent representation.”

Ind. R. Prof’l Conduct 1.9, cmt. 3. Thus, the general

knowledge and experience Cento gained while defending

Trans Union is not the type of confidential information with

which Rule 1.9 is concerned. The commentary makes clear

that Cento’s repeated representations of Trans Union in FCRA

violation cases do not preclude him from representing a new

client in a factually distinct suit even if his new representation

is adverse to his former client. Id., cmt. 2.

No. 17‐1142 15

Nevertheless, while some information Cento gained was

of the experience‐building sort, the district court found that

Cento also “undoubtedly did learn some truly confidential information”

while working for Trans Union. Watkins, 2016 WL

4919999, at *5. The commentary teaches that courts and lawyers

should consider the possibility that confidential information

“acquired in a prior representation may have been

rendered obsolete by the passage of time,” and that prospect

may be “relevant in determining whether two representations

are substantially related.” Ind. R. Prof’l Conduct 1.9, cmt 3.

The district court found here that the passage of time had

removed any substantial risk that any confidential information

from years ago might advance Watkins’s litigation. We

do not find a clear error or an abuse of discretion. Not only, as

the district court noted, have some 500 opinions been issued

since Cento ceased representing Trans Union on “just one of

several provisions of the FCRA [15 U.S.C. § 1681e] that Watkins

alleges Trans Union violated,” but also, as Cento points

out, competitive advantage in credit reporting is created

through technological advances, of which there have been

many over the last twelve years. Watkins, 2016 WL 4919999, at

*5 n.2. In light of the technological advancements and the

sheer number of FCRA claims litigated between the old and

new representations, the district court observed that it is not

“reasonable to believe that the manner in which [Trans Union]

ha[s] handled [litigation] has remained static.” Id. at *5. Over

ten years have passed since Cento last represented Trans Union.

It was not clear error for the district court to find that any

confidential information he may have gained during his prior

representation has been rendered obsolete.

16 No. 17‐1142

Again, a comparison to the Indiana Court of Appeals decision

in XYZ is instructive. There, the court rejected the argument

that the passage of time—almost seven years—would

render obsolete the confidential factual information gained by

the attorney. It reached that conclusion because the six prior

malpractice cases remained relevant in the present litigation.

XYZ, 20 N.E.3d at 587–88. The attorney in XYZ had learned

factual information regarding specific malpractice claims that

were at issue in the new lawsuit. In this case, by contrast, attorney

Cento learned no factual information regarding the

specific FCRA violation at issue in Watkins’ case during his

prior representations of Trans Union. Also, the XYZ doctor

was not an “organizational client,” which Trans Union was to

Cento. See Ind. R. Prof’l Conduct 1.9, cmt 3.

Because of the passage of time and the lack of any factual

overlap between the Watkins’s complaint and any prior matter

in which Cento defended Trans Union, the district court

did not abuse its discretion in applying Rule 1.9 to hold that

the Cento’s prior and present representations do not involve

the same or substantially related matters.

C. No Mistake of Law

In an attempt to avoid this application of Rule 1.9, Trans

Union argues that the district court abused its discretion by

applying the wrong law. Trans Union relies on two disqualification

cases involving former clients, both decided in a different

state in 1983 before the adoption of the Model Rules in

Indiana. LaSalle National Bank, 703 F.2d 252; Analytica, 708 F.2d

1263. This argument has worked for Trans Union in the past.

In fact, Cento has already twice lost to Trans Union on disqualification

motions decided under the reasoning of LaSalle

No. 17‐1142 17

National Bank and Analytica. See Childress I, 2012 WL 6728339;

Hobson, 2013 WL 2443917.

In LaSalle National Bank, we applied a “substantial relationship”

test that “embod[ied] the substance of Canon 4 of the

A.B.A. Code of Professional Responsibility, which protect[ed]

the confidences of a client against disclosure and possible use

against him, and of Canon 9, which provide[d] that an attorney

must avoid even the appearance of impropriety.” 703 F.2d

at 255; see also Goot, 894 F.2d at 234 (Canon 4 stated a “lawyer

should preserve the confidences and secrets of a client,” and

Canon 9 stated a “lawyer should avoid even the appearance

of professional impropriety.”). The substantial relationship

test for disqualification in place prior to the adoption of Rule

1.9 was broad. It was satisfied if “it could reasonably be said

that during the former representation the attorney might have

acquired information related to the subject matter of the subsequent

representation.” LaSalle National Bank, 703 F.2d at 255,

citing Cannon v. U.S. Acoustics Corp., 398 F. Supp. 209, 223

(N.D. Ill. 1975), aff’d in part and rev’d in part, 532 F.2d 1118

(7th Cir. 1976). Whether the party seeking disqualification

could prove that the attorney actually received confidential

information during his employment was irrelevant. LaSalle

National Bank, 703 F.2d at 255, citing Schloetter, 546 F.2d at 710;

see also Analytica, 708 F.2d at 1266 (“It is irrelevant whether

[the lawyer] actually obtained such [confidential] information.”).

3

3 We used a three‐part test to determine whether a substantial relationship

was present. “First, the trial judge must make a factual reconstruction of

the scope of the prior legal representation. Second, it must be determined

whether it is reasonable to infer that the confidential information allegedly

given would have been given to a lawyer representing a client in those

18 No. 17‐1142

In the Childress litigation, the magistrate and district

judges applied to Cento the substantial relationship test outlined

in LaSalle National Bank and Analytica. Childress I, 2012

WL 6728339, at *3; Childress v. Trans Union, LLC (Childress II),

No. 1:12‐CV‐00184‐TWP‐DML, 2013 WL 1828050, at *3 (S.D.

Ind. Apr. 30, 2013). The district judge found that Cento acted

as a practical extension of Trans Union’s in‐house counsel and

that his extended representation of Trans Union in hundreds

of cases established a substantial relationship between his

prior representation of Trans Union and his representation of

Childress in the pending litigation. Childress II, 2013 WL

1828050, at *4–5. The district court in Hobson undertook a similar

analysis in denying Cento’s request for discovery and motion

to stay the disqualification proceedings. Hobson, 2013 WL

2443917.

The Childress and Hobson opinions did not address the

commentary to Rule 1.9. Instead, the Hobson court emphasized

that the Seventh Circuit’s substantial relationship test

embodied Canons 4 and 9 of the A.B.A. Code of Professional

Responsibility. Id. at *2, citing Westinghouse, 588 F.2d at 244.

The Childress district court emphasized in its order denying

Cento’s motion to reconsider that LaSalle National Bank and

Analytica decisions “remain good law to the extent they set

forth the well‐regarded Seventh Circuit approach to the substantial

relationship standard.” Childress v. Trans Union, LLC

matters. Third, it must be determined whether that information is relevant

to the issues raised in the litigation pending against the former client.”

LaSalle National bank, 703 F.2d at 255–56, citing Westinghouse Electric Corp.

v. Gulf Oil Corp., 588 F.2d 221, 225 (7th Cir. 1978). The satisfaction of the

test triggered a rebuttable presumption that the attorney received confidential

information during the prior representation. Id. at 256.

No. 17‐1142 19

(Childress III), No. 1:12‐CV‐00184‐TWP‐DML, 2013 WL

3071273, at *2 (S.D. Ind. June 18, 2013).

The problem is that the substantial relationship test applied

in Childress and Hobson embodied Canons 4 and 9 of the

A.B.A. Code. The Code and those canons no longer governed

Indiana attorneys at the time of the Childress and Hobson decisions

and no longer govern them now. Trans Union argues

that the district court here “applied the wrong standard

… based on Indiana Rule 1.9” and “improperly relied on

language in the Comments … to fashion a new … test for attorney

disqualification.” We disagree. The district court correctly

looked to Rule 1.9 and its commentary adopted after

LaSalle National Bank “to clarify the contours” of the substantial

relationship test. See Shelton v. Trans Union, LLC, No. 1:16‐

cv‐01278‐SEB‐MJD, slip op. at 4 (S.D. Ind. Dec. 19, 2016).4

Trans Union’s reliance on LaSalle National Bank and other

federal precedents pre‐dating Indiana’s adoption of Rule 1.9

is not persuasive. Both state and federal district courts look to

Rule 1.9’s commentary for guidance in deciding disqualification

issues based involving former clients. The commentary

to Rule 1.9 states plainly that to require disqualification of an

4 In Shelton, another recent case in which Cento represented a client

against Trans Union, Judge Barker rejected Trans Union’s argument that

Judge Lawrence’s reliance on the commentary to Rule 1.9 in his Watkins

opinion created a new substantial relationship test. Shelton, No. 1:16‐cv‐

01278‐SEB‐MJD, slip op. at 3. Rather than create a new substantial relationship

test, Judge Barker observed, Rule 1.9 was adopted after LaSalle

National Bank to clarify the contours of the test and provided guidance for

its application. Id. at 4. Judge Barker agreed with Judge Lawrence that

Cento should not be disqualified from representing clients in new cases

against Trans Union. Id. at 5.

20 No. 17‐1142

attorney from a new representation against a former client,

either the old and new matters must be the same factual dispute

or there must be a substantial risk of confidential information

being used to materially advance the new client’s interests.

Cento’s old and new representations do not amount to

“a changing of sides” in a specific legal dispute. See Ind. R.

Prof’l Conduct, cmt. 2. There is no specific factual overlap between

Cento’s prior representations of Trans Union and his

representation of Watkins. The general knowledge Cento

gained while working at Trans Union is not the type of confidential

information that poses a substantial risk of materially

advancing Watkins’ claims. Moreover, more than a decade has

passed since Cento was privy to Trans Union’s internal policies

and practices or legal strategy—confidential or otherwise.

Accordingly, the decision of the district court is

AFFIRMED.

No. 17-1142 21

SYKES, Circuit Judge, concurring in part and dissenting in

part. I agree with my colleagues that this disqualification

dispute is governed by Rule 1.9 of the Indiana Rules of

Professional Conduct, not the old common-law standard

derived from Canons 4 and 9 of the ABA’s Model Code of

Professional Responsibility and elaborated in LaSalle National

Bank v. Lake County, 703 F.2d 252 (7th Cir. 1983), and

Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir.

1983). I therefore join Parts I, IIA, and IIC of the majority

opinion. In these sections my colleagues explain the background

of this case and the evolution of the legal standard. I

agree and have nothing to add about the current state of

Indiana and circuit law.

I part company with my colleagues over the consequences

of Rule 1.9 for this case. The rule, as expounded in the

commentary, prohibits John Cento from suing his former

client Trans Union, LLC, the national credit-reporting agency,

for alleged violations of the Fair Credit Reporting Act

(“FCRA” or “the Act”). Accordingly, I do not join Part IIB or

the mandate to affirm. I would reverse and remand with

instructions to disqualify Cento.

I.

For almost five years (from 2001 through July 2005),

Cento served as Trans Union’s outside litigation counsel, first

with Katz & Korin, P.C., and later with Schuckit & Associates,

P.C. In that capacity Cento defended the company in

hundreds of FCRA suits. For at least two and a half of those

five years, Cento worked nearly exclusively on FCRA cases

brought against Trans Union. In total, Cento billed Trans

Union for approximately 4,200 hours of work on some

22 No. 17-1142

250 cases filed by consumers against the agency alleging

violations of the Act.

Most of this litigation involved claims alleging violations

of 15 U.S.C. §§ 1681e(b) and 1681i. Briefly, § 1681e(b) requires

credit-reporting agencies to follow “reasonable procedures”

to assure the accuracy of the information they report, and

§ 1681i(a)(1)(A) requires the agencies to conduct a “reasonable

reinvestigation” if a consumer disputes the completeness

or accuracy of the information in his file. Having spent years

and thousands of billed hours defending the reasonableness

of Trans Union’s credit-reporting procedures and reinvestigations,

Cento now sues his former client alleging violations

of these same statutory provisions.

Cento’s role as Trans Union’s outside FCRA counsel was

not limited to serving as the agency’s litigation counsel.

Cento also supervised other lawyers working on Trans

Union cases, advised Trans Union on general litigation

strategy in FCRA matters, and counseled his client on how to

avoid FCRA risk. I’ll have more to say about the scope of

Cento’s representation later. For now it’s enough to note that

it was lengthy, extensive, and undeniably relevant to the

claims in the present suit.

Cento last represented Trans Union in July 2005 when he

left Schuckit & Associates for another firm. Later, in 2013, he

formed Cento Law, a boutique specialty firm that represents

consumers in FCRA suits against credit-reporting agencies.

The firm’s website touts the qualifications of its attorneys to

litigate FCRA claims against the major credit-reporting

agencies—including, as my colleagues have noted, their

“years of prior representation of two of the three national

consumer reporting agencies, Trans Union and Equifax.”

No. 17-1142 23

Majority Op. at p. 3. My colleagues go only so far as to say

that this advertisement “is bound to raise eyebrows.” Id. at

p. 13. I go further. Cento is hustling litigation business

against Trans Union by implying that he has useful inside

information about his former client’s operations that would

advance a prospective client’s cause.

Even before he set up his own practice specializing in

consumer suits against credit-reporting agencies, Cento had

changed sides in FCRA litigation and begun to litigate these

claims against his former client. In January 2012 he filed a

proposed FCRA class action against Trans Union and immediately

faced a disqualification motion. He lost; the district

court removed him from the case. Childress v. Trans Union,

LLC, No. 1:12-cv-00184-TWP-DML, 2012 WL 6728339 (S.D.

Ind. Dec. 28, 2012) (magistrate judge’s decision disqualifying

Cento); id., 2013 WL 1828050 (S.D. Ind. Apr. 30, 2013) (district

judge’s decision overruling Cento’s objections to disqualification).

In 2013 he was again disqualified in another FCRA suit

against Trans Union. Hobson v. Trans Union, LLC, No. 1:13-cv-

00054-JD-RBC (N.D. Ind. Nov. 21, 2013), ECF No. 63 (magistrate

judge’s decision disqualifying Cento; the suit was then

dismissed by the parties with prejudice).

The present FCRA suit on behalf of plaintiff Richard

Watkins is not materially different, but this time Cento

persuaded a district judge to let him proceed against his

former client. My colleagues affirm that decision. With

respect, I disagree. They and the district judge have overlooked

key parts of the commentary to Rule 1.9 and in doing

so have misapplied the rule. The result does regrettable

damage to the professional norms that hold lawyers to a

continuing duty to maintain the confidences acquired from

24 No. 17-1142

former clients and to refrain from subsequent professional

engagements that exploit those confidences against the

former client.

II.

Rule 1.9, entitled “Duties to Former Clients,” provides in

relevant part:

A lawyer who has formerly represented a client

in a matter shall not thereafter represent

another person in the same or a substantially

related matter in which that person’s interests

are materially adverse to the interests of the

former client unless the former client gives informed

consent, confirmed in writing.

IND. R. OF CT., R. OF PROF’L CONDUCT 1.9(a) (2016). The

commentary to the rule makes clear that after a client-lawyer

relationship ends, “[the] lawyer has certain continuing

duties [to the former client] with respect to confidentiality

and conflicts of interest and thus may not represent another

client except in conformity with this Rule.” Id. cmt. 1.

Like most problems in professional ethics, sorting out

where the lawyer’s duties lie under this rule is a highly

contextual inquiry. The commentary contains instructions,

illustrations, and guideposts to help lawyers and judges

properly apply the rule. To begin, the commentary explains

that “[t]he scope of a ‘matter’ for purposes of this [r]ule

depends on the facts of a particular situation or transaction”

and “[t]he lawyer’s involvement in a matter can also be a

question of degree.” Id. cmt. 2. That does not tell us much,

but it does convey the idea that a “matter” for purposes of

the rule is not a narrow or static concept. As applied to

No. 17-1142 25

litigators, a “matter” may be a single case or it may extend

more broadly, depending on the circumstances.

As my colleagues have noted, Comment 2 goes on to say

that “a lawyer who recurrently handled a type of problem

for a former client is not precluded from later representing

another client in a factually distinct problem of that type

even though the subsequent representation involves a

position adverse to the prior client.” Id. At first blush this

seems to give Cento the green light to represent any FCRA

claimant in a suit against Trans Union as long as the case is

factually distinct from those he previously handled on behalf

of his former client.

But there is a qualifier. In all cases “[t]he underlying

question is whether the lawyer was so involved in the matter

that the subsequent representation can be justly regarded as

a changing of sides in the matter in question.” Id. There’s no

question that Cento has changed sides in FCRA matters. It’s

not controversial for a litigator to shift from one side to the

other in a particular area of litigation. Cento is certainly free

to use the expertise he gained as Trans Union’s FCRA counsel

to represent consumers in cases against other creditreporting

agencies. But Cento has changed sides in FCRA

litigation involving his former client—from defending Trans

Union in § 1681e(b) and § 1681i litigation to prosecuting

these claims on behalf of consumers in suits against his

former client. Yes, this case is factually distinct from the

others; literally speaking, it is not the “same matter” as any

of the other cases. That does not, by itself, end the ethical

inquiry.

The disqualification question turns on whether the present

case is “substantially related” to the 250 or so FCRA

26 No. 17-1142

cases Cento handled for Trans Union.1 Comment 3 covers

this subject, explaining that

[m]atters are “substantially related” for purposes

of this [r]ule if they involve the same

transaction or legal dispute or if there otherwise

is a substantial risk that confidential factual information

as would normally have been obtained in the

prior representation would materially advance the

client’s position in the subsequent matter.

Id. cmt. 3 (emphasis added).

This suit does not involve the “same transaction or legal

dispute” as the prior litigation, though it does involve the

identical type of legal action. As I’ve already noted, however,

Comment 2 tells us that a lawyer who recurrently handled

matters of a certain type for a client is not automatically

foreclosed from handling a factually different matter of the

same type against the client after the relationship ends. Still,

Cento must be disqualified from this suit if the nature and

scope of his prior work for Trans Union creates a substantial

risk that Trans Union’s confidential information—that is, the

confidential client information that Cento would have

acquired in the ordinary course of a representation of that

type—would materially advance Watkins’s position.

The commentary provides several examples to illustrate

how this general principle applies in actual practice:

For example, a lawyer who has represented a

businessperson and learned extensive private

1 Watkins’s position is obviously materially adverse to Trans Union’s, so

that element of Rule 1.9 is met.

No. 17-1142 27

financial information about that person may

not then represent that person’s spouse in seeking

a divorce. Similarly, a lawyer who has previously

represented a client in securing environmental

permits to build a shopping center

would be precluded from representing neighbors

seeking to oppose rezoning of the property

on the basis of environmental considerations;

however, the lawyer would not be precluded,

on the grounds of substantial relationship,

from defending a tenant of the completed

shopping center in resisting eviction for nonpayment

of rent.

Id.

These examples clarify that a lawyer who acquires confidential

client information of a particular type (e.g., a client’s

financial information or information about a client’s environmental

compliance) owes a continuing duty to the client

after the relationship ends: He must keep that information

confidential and may not represent a new client if there is a

substantial risk that the information would materially

advance the new client’s position in the subsequent matter.

When a substantial risk of information exploitation exists,

the duties owed to the old and new client are in conflict, and

the new representation is prohibited even if the subsequent

matter is factually distinct.

As Trans Union’s litigation counsel in hundreds of FCRA

cases spanning almost five years, Cento necessarily acquired

comprehensive confidential information about his client’s

credit-reporting and reinvestigation operations, as well as its

litigation and settlement strategies, risk-avoidance protocols,

28 No. 17-1142

and overall FCRA compliance. The present suit—like most of

the suits Cento defended for Trans Union—alleges that the

company failed to follow reasonable credit-reporting and

reinvestigation procedures in violation of §§ 1681e(b) and

1681i. Having acquired extensive private information about

Trans Union’s past compliance with §§ 1681e(b) and 1681i,

Cento cannot now represent Watkins in this suit against

Trans Union for violating those same statutes. In the ordinary

course of the prior representation, Trans Union would

have given him unfettered access to all internal information

necessary to defend it against liability under §§ 1681e(b) and

1681i—information that is undoubtedly relevant to and

would advance Watkins’s position in the present suit. The

risk of exploitation of the former client’s confidences is both

real and substantial. Rule 1.9 requires his disqualification.

The district judge’s contrary conclusion rests largely on

this passage in Comment 3:

Information that has been disclosed to the public

or to other parties adverse to the former client

ordinarily will not be disqualifying. Information

acquired in a prior representation may

have been rendered obsolete by the passage of

time, a circumstance that may be relevant in

determining whether two representations are

substantially related. In the case of an organizational

client, general knowledge of the client’s

policies and practices ordinarily will not

preclude a subsequent representation … .

Id. My colleagues also rely heavily on this passage. See

Majority Op. at pp. 13–15. Fair enough, but their analysis

omits what comes next in the commentary:

No. 17-1142 29

[O]n the other hand, knowledge of specific facts

gained in a prior representation that are relevant to

the matter in question ordinarily will preclude such

a representation. A former client is not required

to reveal the confidential information learned

by the lawyer in order to establish a substantial

risk that the lawyer has confidential information

to use in the subsequent matter. A conclusion

about the possession of such information

may be based on the nature of the services the lawyer

provided the former client and information that

would in ordinary practice be learned by a lawyer

providing such services.

Id. (emphases added).

This part of the commentary adds two important points.

First, the test for disqualification focuses on the nature of the

prior representation and the specific factual information that

a lawyer could be expected to acquire from his client in the

ordinary course of providing legal services of that type. In

other words, the test is an objective one. The former client is

not required to divulge the specific information it disclosed

to the lawyer in order to establish a substantial risk that the

information would advance the new client’s position in the

subsequent matter.2 The inquiry instead looks to the nature

of the services the lawyer provided and the kind of information

a lawyer normally would learn in the ordinary

course of a representation of that type.

2 Because a former client need not reveal the specific confidential

information it gave to the lawyer, the discovery order in this case was

questionable.

30 No. 17-1142

Second, disqualification is required if the confidential client

information the lawyer normally would have acquired in

the prior representation is relevant to the subsequent representation.

If the information is relevant to the new matter,

then a substantial risk of exploitation exists. The lawyer’s

continuing duty to keep the former client’s confidences

conflicts with his duty to zealously represent the interests of

the new client. The two examples given in the commentary

confirm this understanding of the rule. See supra pp. 26–27.

Putting all these elements together, Cento is disqualified

from this case. For an extended period of time he served as

Trans Union’s FCRA litigation counsel and in that capacity

was deeply involved in defending the agency in hundreds of

suits alleging violations of §§ 1681e(b) and 1681i. Legal

services of this nature necessarily require broad access to

confidential factual information about the client’s datacollection

and credit-reporting operations, its protocols for

ensuring the accuracy of information in credit reports,

information relating to the reasonableness of its reinvestigations,

and the client’s litigation and dispute-resolution

strategies. An engagement of this nature and scope also

necessarily entails extensive confidential communication

with the client’s managerial and other staff—as well as inhouse

counsel—regarding operational and transactional

facts and FCRA compliance and risk-avoidance more generally.

My colleagues maintain that much of this information

was discoverable and would have been disclosed in the prior

litigation. Majority Op. at p. 14. They also find no error in

the district judge’s conclusion that any remaining confidential

information has become obsolete in the 12 years since

No. 17-1142 31

Cento last represented Trans Union. Id. at p. 15. I do not

doubt that some of this information would have been turned

over in discovery in the prior litigation, and a subset of that

discovery material may have found its way into the public

court record. But not all. The parties agree that protective

orders were used in some cases. And some of the confidential

information Cento can be presumed to have acquired

would not have been subject to discovery at all—at a minimum,

the factual and strategic information gleaned from

privileged communications with Trans Union personnel, risk

analyses, and settlement strategies.

The district judge also concluded that any confidential

client information that Cento acquired from Trans Union is

surely obsolete due to the passage of time, owing to unspecified

“technological advances” and the “sheer number of

FCRA claims litigated between the old and new representations.”

Id. My colleagues find no abuse of discretion, but I’m

not so sanguine. Many of the key Trans Union personnel

remain with the company, and Cento worked with them in

the prior representation to develop factual records, prepare

and defend depositions, devise litigation strategies, and

analyze settlement options. The information exchanged in

these communications is clearly confidential. We have no

nonspeculative basis to declare it irrelevant or obsolete.

Quite the contrary. Now that he’s been given the goahead

to represent Watkins in this suit, Cento may depose

some of the same Trans Union personnel he previously

prepared and defended in depositions. That he has inside

information about their past testimony is a strategic advantage

and far from obsolete. He may cross-examine them

in court or sit across from them at the negotiating table.

32 No. 17-1142

Having been privy to their thinking about the strengths and

weaknesses of prior FCRA cases against Trans Union, he can

now use that information for Watkins’s benefit, either in

court or in settlement negotiations. It’s simply unreasonable

to conclude that in nearly five years as Trans Union’s FCRA

litigation counsel—personally handling hundreds of cases—

Cento acquired no confidential Trans Union information that

has any continuing relevance to this FCRA suit against his

former client.

Finally, I disagree with my colleagues that comparing

this case to XYZ, D.O. v. Sykes, 20 N.E.3d 582 (Ind. Ct. App.

2014), supports the district judge’s no-disqualification ruling.

XYZ was a case of imputed disqualification. From 2003 to

2005, Kathleen Clark represented a doctor in six malpractice

suits, initially as a sole practitioner and later with a firm. Id.

at 583–84. Her representation of the doctor ceased in April

2005 when she left for another firm, and in February 2010

she again changed firms. Id. In mid-2012 Clark did some

initial intake work for her firm in a new malpractice case

against the doctor. Although she turned her work over to a

colleague and he assumed responsibility for the case, the

doctor and hospital moved to disqualify the entire firm. Id.

The trial judge denied the motion, but on interlocutory

appeal the Indiana Court of Appeals reversed.

Applying Rule 1.9, the appellate court first noted that the

case involved a malpractice claim against the doctor and a

claim against the hospital for negligent credentialing “based

in part upon the [h]ospital’s alleged failure to adequately

investigate the circumstances surrounding those six prior

malpractice cases in which Clark represented the [d]octor.”

Id. at 587. Although the cases did not literally involve the

No. 17-1142 33

“same transaction,” they were nonetheless “substantially

related for the purposes of Rule 1.9.” Id. The new representation

involved “one claim of the same subject matter as

Clark’s prior representation[] of [the] [d]octor, and another

claim that grew out of and is directly related to Clark’s prior

representation[] of [the] [d]octor.” Id. In these circumstances,

the court held, “there is a substantial risk that confidential

factual information as would normally have been obtained

in the prior representation[] would materially advance the

[p]laintiff’s position in the present case.” Id.

The firm argued that the passage of time—about seven

years—rendered the confidential information obsolete. The

court quickly dispatched that argument: “If the six prior

medical malpractice cases remain relevant regarding the

current allegation of negligent credentialing, as [the firm]

admits, any confidential factual information gleaned during

those prior representations can hardly be deemed stale or

obsolete.” Id. at 587–88. Finally, the court held that because

Clark had been the doctor’s primary counsel in the prior

cases, the presumption that she shared his confidences

within her new firm was irrebuttable; the entire firm was

disqualified. Id. at 588–89.

My colleagues are quite right that in XYZ the attorney’s

prior representation of the doctor was directly relevant to the

negligent-credentialing claim against the hospital. Majority

Op. at p. 12. That made the conflict of interest fairly obvious,

but it doesn’t make the decision inapplicable here. The

important lesson of XYZ for this case is the court’s “substantial

risk” analysis, which was not limited to the negligentcredentialing

claim.

34 No. 17-1142

Because the nature and scope of Cento’s prior work as

Trans Union’s FCRA counsel was so extensive, there is a

substantial risk—even after 12 years—that the confidential

client information he learned in the prior representation

would materially advance Watkins’s position in this litigation.

We should reverse with instructions to grant the disqualification

motion. I respectfully dissent.

Affirmed