SAN FRANCISCO — A California appellate court ruled against Sheppard, Mullin, Richter & Hampton on Friday, finding that the firm isn’t due fees for litigation where it was disqualified because of a client conflict and must refund payments to its former client.

The Second District Court of Appeal sided with Sheppard Mullin’s former client, J-M Manufacturing Co. Inc. The company had previously lost out in its quest to recover fees after the firm pushed the dispute into arbitration.