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Marshall v. The Rawlings Company LLC

United States District Court, W.D. Kentucky, Louisville

March 1, 2018



          Thomas B. Russell, Senior Judge United States District Court.

         This matter comes before the Court upon two Motions. First, Defendant The Rawlings Company, LLC, (“Rawlings”), has filed a Motion to Disqualify Plaintiff's Counsel Jill Guarascio. [DN 137.] Second, Plaintiff Gloria Marshall has filed a Motion for Sanctions against Rawlings. [DN 139.] These matters are ripe for adjudication and their merits are discussed below.

         I. Factual Background

         Marshall was previously employed by Rawlings, where she worked as a Workers Compensation Analyst, beginning in 2006. In September 2011, Rawlings promoted Marshall to the position of Team Lead. She was eventually demoted from this position and, in the fall of 2013, she was terminated from the company. In the last couple of years she spent at Rawlings, Marshall took multiple stints of leave under the Family Medical Leave Act, (“FMLA”), due to depression, anxiety, and Post Traumatic Stress Disorder (“PTSD”). Marshall has also indicated that she suffers from bipolar disorder.[1] After her termination, she filed suit against Rawlings, and her current claims against the company are for FMLA retaliation and for discrimination under the Americans with Disabilities Act (“ADA”). [See DN 90.]

         When Marshall filed her lawsuit against Rawlings on May 7, 2014, she retained as counsel Jill Guarascio and Chris Sanders. [DN 1, at 6.] Guarascio was previously employed by Rawlings as a subrogation attorney and associate general counsel. [DN 44, at 5-6.] From her law firm's website and the case docket, it appears that Guarascio began working at Rawlings sometime either in 2009 or 2010, and left the company in the summer of 2011. [See]. In an affidavit filed with Rawlings' Motion to Disqualify Guarascio, Joan O'Brien, the current Vice President of Human Resources at Rawlings, avers that Guarascio “was formerly employed as a subrogation analyst by Rawlings for over one year. She moved from an analyst positon with Rawlings to a team attorney position with Rawlings & Associates PLLC…law firm upon admission to the Kentucky bar.” [DN 137-2, at 2.] O'Brien further avers that, “[i]n her capacity as a team attorney…, Ms. Guarascio had an attorney-client relationship with Rawlings.” [Id.] As part of Guarascio's job there, “she was privy to, and gained proprietary knowledge of, Rawlings' internal subrogation practices and procedures, ” and “directly reported to Laura Plumley, who performed at least one annual performance evaluation for Ms. Guarascio.” [Id. at 3.] O'Brien also avers that Guarascio “worked directly with Jeff Bradshaw on occasion to provide advice and counsel to the subrogation department on recovery issues, ” and that Guarascio “developed a professional relationship with both Ms. Plumley and Mr. Bradshaw.” [Id.]

         In May 2014 when this lawsuit was initially filed, Rawlings emailed Guarascio and Sanders to indicate their uneasiness with Guarascio representing a former Rawlings employee like Marshall:

Rawlings is deeply concerned by Ms Guarascio's involvement as counsel, in light of her former work as a lawyer for Rawlings. We don't understand how she can avoid using confidential attorney client information in this case that she gained in the course of her past work for Rawlings and urge you and her to reconsider her involvement in the case.

         [DN 137-3, at 3.] That email was sent by Jeffrey Swann, an attorney at Rawlings & Associates, on May 8, 2014, one day after the lawsuit was filed. In response, Sanders noted that, “[a]s to Jill's [Guarascio] involvement, you know there's nothing wrong with her representing Ms. Marshall.” [Id. at 2.]

         No filing or motion was put before the Court in the nearly-four year history of this case regarding Rawlings' concerns over Guarascio's involvement in the case, or her representation of Marshall in this lawsuit. Now, six weeks before trial, Rawlings has moved to disqualify Guarascio as counsel in this matter. Guarascio responded to the Motion to Disqualify and, by way of further rebuttal, filed a Motion for Sanctions against Rawlings in relation to Rawlings' Motion to Disqualify her.

         II. Rawlings' Motion to Disqualify

         The first Motion at issue is Rawlings' Motion to Disqualify Guarascio as counsel for Marshall. [DN 137.] In support of the Motion, Rawlings' principle argument is that “Guarascio has a past attorney-client relationship with Rawlings, the subject matter of…Guarascio's prior representation of Rawlings is substantially related to the subject matter of this lawsuit, and…Guarascio acquired confidential information through her representation of Rawlings.” [DN 137, at 1.] This, Rawlings argues, mandates Guarascio's disqualification from this case. In her Response, Guarascio frames the Motion to Disqualify her as “a dilatory tactic to avoid trial.” [DN 144, at 1.]

         A. Legal Standard

         The district court is afforded discretion in deciding whether to disqualify an attorney upon motion by the opposing party's counsel. See United States v. Dandy, 998 F.2d 1344, 1349 (6th Cir. 1993) (reviewing a district court judge's decision not to recuse himself for abuse of discretion). When “[c]onfronted with such a motion, courts must be sensitive to the competing public policy interests of preserving client confidences and of permitting a party to retain counsel of his [or her] choice.” Manning v. Waring, Cox, James, Sklar, and Allen, 849 F.2d 222, 224 (6th Cir. 1988). Keeping this in mind, the Sixth Circuit has enunciated a three-part test for courts to use in analyzing whether counsel should be disqualified in a given case. This three-part test is as follows: “(1) a past attorney-client relationship existed between the party seeking disqualification and the attorney it seeks to disqualify; (2) the subject matter of those relationships was/is substantially related; and (3) the attorney acquired confidential information from the party seeking ...

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