Schrock v. State Farm Insurance Company, 1:21-cv-01392

Plaintiff Bradley Schrock challenges State Farm’s effort to disqualify plaintiff’s counsel, Marc Levy, based on Levy’s prior representation of State Farm in Benninger v. State Farm.
State Farm alleges Levy obtained confidential, case-specific Benninger information that creates a substantial risk of misuse in the current, adverse matter.
Plaintiff moved to compel production of the Benninger file (which Levy no longer possesses) so counsel can respond to State Farm’s disqualification allegations; Magistrate Judge Hegarty granted the motion.
State Farm objected, asserting attorney-client and work-product privilege and reliance on Colo. RPC 1.9(cmt.3) that a former client need not disclose confidential information to show risk.
The district court reviewed the magistrate judge’s discovery order for clear error, affirmed that the parties need the same body of information to litigate substantial-relationship/disqualification, and overruled State Farm’s objections, while endorsing restricted access safeguards (e.g., Levy-only review, courthouse review, non-disclosure limits).
The court concluded privilege/work-product concerns did not prevent carefully restricted disclosure because Levy previously had access and limitations prevent waiver or misuse.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether State Farm must produce the Benninger file (including privileged/confidential portions) to allow response to a motion to disqualify Levy	State Farm has used Benninger to allege disqualifying conduct but withheld the file; plaintiff needs the same file to test State Farm’s assertions and cannot let State Farm use the file as both sword and shield	Production would reveal privileged/work-product materials and is not required to show a substantial risk under Colo. RPC 1.9(cmt.3); disclosure would defeat disqualification purpose	Court upheld magistrate order: relevant portions must be produced with safeguards; denial of blanket protection was not clear error

Persichette v. Owners Ins. Co., 462 P.3d 581 (Colo. 2020) (articulates four-part Rule 1.9(a) test for disqualification and discusses burden to show substantial relation)
Hutchinson v. Pfeil, 105 F.3d 562 (10th Cir. 1997) (Rule 72(a) clear-error standard for magistrate judge non-dispositive orders)
Gomez v. Martin Marietta Corp., 50 F.3d 1511 (10th Cir. 1995) (procedural rule distinguishing dispositive vs non-dispositive magistrate rulings)
Cole v. Ruidoso Mun. Schs., 43 F.3d 1373 (10th Cir. 1994) (substantially related test for former-client disqualification requires access to same underlying information)
Collardey v. All. for Sustainable Energy, LLC, 406 F. Supp. 3d 977 (D. Colo. 2019) (example of district court reviewing magistrate discovery orders for clear error)