Divided 7th Circuit allows Indy attorney to represent plaintiff in claim against former client

An Indianapolis attorney who previously represented one of the nations’ largest consumer reporting agencies may now proceed as counsel on behalf of a plaintiff suing the same agency after a divided panel of the 7th Circuit Court of Appeals determined Indiana Rules of Professional Conduct do not require his disqualification.

John Cento began his legal career with Indianapolis law firm Katz & Korin P.C., where he worked with Robert Schuckit. Trans Union LLC became a Katz & Korin client when Schuckit joined the firm, causing Cento to work nearly exclusively as Trans Union’s representation in Fair Credit Reporting Act cases from 2003 to 2005 and bill more than 4,000 hours of work for the company.

Cento formed Cento Law in 2013, representing consumers bringing FCRA claims against credit reporting agencies and advertising his “years of prior representation of two of the three national consumer reporting agencies, Trans Union and Equifax.” The 7th Circuit Court of Appeals noted in the Tuesday opinion that such an advertisement “is bound to raise some eyebrows,” and Cento was disqualified in 2012 and 2013 from two cases in which his clients were bringing claims against Trans Union.

Similarly, in the instant case, Richard Watkins selected Cento to represent him in his FCRA case against Trans Union. Watkins’ case traces back to 2009, when he applied for a loan and discovered his Trans Union credit file contained 20 “collection tradelines” that weren’t his. Trans Union removed the collections, but Watkins discovered they had been placed in his credit file again when he applied for a mortgage in 2013.

Cento filed a complaint against Trans Union on Watkins’ behalf in May 2014, but one month later, the consumer reporting agency filed a motion to show cause as to why Cento should not be disqualified from the case. Following the guidance of Indiana Rule of Professional Conduct 1.9, Judge William T. Lawrence of the U.S. District Court for the Southern District of Indiana determined Cento should not be disqualified because there was no risk that confidential information from the prior matters would materially advance Watkins’ case and because the prior representations were not factually related. Lawrence further noted that more than a decade had passed since Cento last represented Trans Union.

After being granted interlocutory appeal, Trans Union argued the district court applied the wrong legal standard for attorney disqualification and misapplied the Rule 1.9 standard it chose. But a divided panel of the 7th Circuit Court of Appeals disagreed, with Judge David Hamilton writing that the claims in Watkins’ case “do not turn on any specific facts of any prior matter in which Cento represented Trans Union.” Further, though Cento gained “general knowledge” about Trans Union policies and practices while representing them, such knowledge is not the type of confidential information that is of concern in Rule 1.9, Hamilton wrote.

Additionally, the majority noted that in the decade since Cento represented Trans Union, more than 500 opinions have been issued on just one of the FCRA violations Watkins has alleged, and several technological advancements in credit reporting have occurred. Thus, the district court properly applied Rule 1.9 and its commentary to “’clarify the contours’” of the substantial relationship test laid out in LaSalle National Bank v. Lake County, 703 F.2d 252 (7th Cir. 1983), the appellate court held.

While Judge Diane Sykes agreed that Rule 1.9 governs the disqualification dispute in the case, she dissented on the rule’s consequences, writing in a separate opinion that she would reverse and remand to disqualify Cento. Sykes took particular issue with the advertisements on Cento’s website, saying he was “hustling litigation business against Trans Union by implying that he has useful inside information… .”

“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” Sykes wrote.

The case is Richard Watkins v. Trans Union, LLC, 17-1142.