PCT International Incorporated v. Holland Electronics LLC

Filing 40

ORDER that Plaintiff's 28 Motion to Disqualify Counsel is denied. Signed by Senior Judge James A Teilborg on 3/7/2013.(LFIG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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PCT International, Inc.,
Plaintiff,

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ORDER

v.

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No. CV-12-01797-PHX-JAT

Holland Electronics, LLC,
Defendant.

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Pending before the Court is Plaintiff’s Motion to Disqualify (Doc. 28). The Court
now rules on the Motion.

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I.

BACKGROUND

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Defendant Holland Electronics is represented by two law firms in this matter:

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Ocean Law and Snell & Wilmer, L.L.P. (“Snell & Wilmer”). Pursuant to Ethical Rules

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1.9 and 1.10 of the Arizona Rules of Professional Conduct, Plaintiff moves to disqualify

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Snell & Wilmer, L.L.P. from the representation of Defendant in this matter because one

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of Snell & Wilmer’s attorneys, Mr. Rogers, formerly represented Plaintiff in legal

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matters, which Plaintiff asserts are substantially related to this lawsuit. Although Mr.

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Rogers is not directly involved in the representation of Defendant in this matter, Plaintiff

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asserts that Mr. Rogers has a conflict in the representation that can be imputed to the

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attorneys at Snell & Wilmer that are representing Defendant in this matter, and, thus,

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Snell & Wilmer must be disqualified.

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II.

LEGAL STANDARD

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“The United States District Court for the District of Arizona has adopted the

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Arizona Rules of Professional Conduct as its ethical standards. LR Civ 83.2(e) . . .

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Accordingly, this Court applies the Arizona ethical rules when evaluating motions to

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disqualify counsel.” Roosevelt Irrigation. Dist. v. Salt River Project Agric. Improvement

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and Power Dist., 810 F.Supp.2d 929, 944 (D. Ariz. 2011) (internal citations omitted).

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Pursuant to Ethical Rule 1.9(a),

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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.

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ER 1.9(a)

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Further, pursuant to Ethical Rule 1.10(d),

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(d) When a lawyer becomes associated with a firm, no lawyer
associated in the firm shall knowingly represent a person in a
matter in which that lawyer is disqualified under ER 1.9
unless:

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(1) the matter does not involve a proceeding before a tribunal
in which the personally disqualified lawyer had a substantial
role;

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(2) the personally disqualified lawyer is timely screened from
any participation in the matter and is apportioned no part of
the fee therefrom; and

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(3) written notice is promptly given to any affected former
client to enable it to ascertain compliance with the provisions
of this Rule.

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E.R. 1.10(d).
“[O]nly in extreme circumstances should a party to a lawsuit be allowed to
interfere with the attorney-client relationship of his opponent.” Alexander v. Superior
Court, 685 P.2d 1309, 1313 (Ariz. 1984); see Amparano v. ASARCO, Inc., 208 Ariz. 370,
93 P.3d 1086, 1092 (Ariz. Ct. App. 2004) (“[T]he rules of professional responsibility are
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for ethical enforcement and are not designed to be used as a means to disqualify counsel.

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The courts have, of course, looked to the ethical rules for guidance on disqualification

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issues.”) (internal citation omitted); Optyl Eyewear Fashion Int’l Corp. v. Style Cos.,

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Ltd., 760 F.2d 1045, 1050 (9th Cir. 1985) (“disqualification motions should be subjected

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to ‘particularly strict judicial scrutiny’”) (internal citation omitted). “However, close or

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doubtful cases are resolved in favor of disqualification in order to preserve the integrity

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of the judicial system.” Roosevelt, 810 F.Supp.2d at 944 (internal citations omitted).

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“[T]he burden is on the party moving to disqualify opposing counsel to show ‘sufficient

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reason’ why the attorney should be disqualified.” Amparano, 93 P.3d at 1093.

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III.

ANALYSIS

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Snell & Wilmer does not dispute that Mr. Rogers formerly represented Plaintiff or

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that Plaintiff’s and Defendant’s interests in this case are materially adverse. Rather, the

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entire dispute in this case concerns whether this case is substantially related to matters on

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which Mr. Rogers previously represented Plaintiff.

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Matters are substantially related “if they involve the same transaction or legal

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dispute or if there otherwise is a substantial risk that confidential factual information as

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would normally have been obtained in the prior representation would materially advance

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the client’s position in the subsequent matter.” ER 1.9 cmt. 3 (2003). Determining the

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scope of a “matter” requires examination of the facts of a particular situation or

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transaction and the nature and degree of the lawyer’s involvement. ER 1.9 cmt. (2003).

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Plaintiff first argues that the matters are substantially related because Mr. Rogers

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obtained information regarding Plaintiff’s approach to and tolerance of potential patent

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litigation, strategic approaches to this type of litigation, and is familiar with Plaintiff’s

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strategies for patenting inventions relating to coaxial cable connectors. The Court finds

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that Plaintiff has not carried its burden of showing that Mr. Rogers’ former representation

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of Plaintiff in patent-related matters generally requires disqualification in this case.

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“[A] lawyer who recurrently handled a type of problem for a former client is not

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precluded from later representing another client in a wholly distinct problem of that type

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even though the subsequent representation involves a position adverse to the prior client.”

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ER 1.9 cmt 2 (2003).

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practices ordinarily will not preclude a subsequent representation.” ER 1.9 cmt. 3 (2003).

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“The underlying question is whether the lawyer was so involved in the matter that the

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subsequent representation can be justly regarded as changing sides in the matter in

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question.” ER 1.9 cmt 2.

Moreover, “general knowledge of the client’s policies and

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In this case, Plaintiff alleges that it is the owner of United States Patent No.

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6,042,422 (the “422 Patent”) entitled “Coaxial cable and connector crimped by axial

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compression.” (See Doc. 1) Plaintiff alleges that Defendant has infringed and continues

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to infringe the 422 Patent. (Id.). The 422 Patent issued in the year 2000. Mr. Rogers

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worked on patent and trademark matters for Plaintiff between 2008 and 2010. Mr.

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Rogers did not work on the preparation or prosecution of the 422 Patent and there is no

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allegation that he ever reviewed, analyzed, or advised Plaintiff about the 422 patent.

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Although Mr. Rogers advised Plaintiff about other coaxial cable connecter patents and

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worked with the inventor of the 422 patent, Plaintiff has failed to demonstrate that Mr.

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Rogers’ gained anything more than a general knowledge of Plaintiff’s policies and

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practices during his two-year representation of Plaintiff on certain patent-related matters.

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As such, Plaintiff has not shown that Mr. Rogers’ gained such specific facts about how

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Plaintiff generally handles patent litigation and how it patents products that he could be

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seen as changing sides on the subject matter of this litigation.

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Plaintiff next argues that Mr. Rogers provided it with specific advice regarding

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United States Patent Nos. 5,525,076 and 5,466,173 (the “Down Patents”). Plaintiff

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argues that Mr. Rogers’ involvement in the Down Patents is substantially related to the

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litigation of the 422 Patent because Defendant asserted prosecution history estoppel as a

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defense in its Answer and discussed alleged representations made by Plaintiff regarding

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the Down Patents to the Patent Office in 1999 in order to obtain the 422 Patent.

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Defendant argues that the only references to the Down Patents in the Answer came

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solely from the public record of the Patent Office from 1999 and there is no allegation

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that Mr. Rogers ever advised Plaintiff concerning any aspect of the prosecution history of

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the 422 Patent, involving the Down Patents or otherwise.

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In light of these facts, Plaintiff has not met its burden of demonstrating that Mr.

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Rogers’ former representation of Plaintiff is substantially related to the issues in this case.

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There is no suggestion that Mr. Rogers worked on the 422 Patent, which is the main issue

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in this litigation. Although Mr. Rogers advised Plaintiff on some aspects of the Down

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Patents, Plaintiff has not demonstrated that such advice was related in any way to the 422

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Patent or would somehow be related to the affirmative defense relating to the Down

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Patents. Specifically, the only information Plaintiff relies on in its Answer relating to the

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Down Patents is from the public record of the Patent office, which was created over eight

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years before Mr. Rogers undertook any representation of Plaintiff. “[I]nformation that

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has been disclosed to the public ordinarily will not be disqualifying.” ER 1.9 cmt. 3.

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Such public information cannot be the basis for a conflict and does not demonstrate that

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any advice Mr. Rogers gave regarding the Down Patents is substantially related to this

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litigation.

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Because disqualification should only be used in extreme circumstances and

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Plaintiff has not carried its burden of showing that Mr. Rogers represented Plaintiff in a

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matter substantially related to this case, the Motion to Disqualify is denied.

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IV.

CONCLUSION

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Based on the foregoing,

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IT IS ORDERED that Plaintiff’s Motion to Disqualify (Doc. 28) is denied.

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Dated this 7th day of March, 2013.

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