j2 Global Communications Inc v. Captaris Inc
Filing
406
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS MOTION TO DISQUALIFY COUNSEL PERKINS COIE AND TO COMPEL DISCOVERY 340 by Judge Dean D. Pregerson:The Motion is GRANTED as to disqualifying Perkins, but is DENIED as to compelling discovery. Acco rdingly, IT IS HEREBY ORDERED: 1) Perkins is disqualified from representing Defendants in this litigation. Defendants shall have until January 11, 2013, to retain successor counsel and have such counsel appear in the action. 2) In connection with the transition to new counsel, Perkins shall have no further involvement in this action, except Perkinsmay transmit to successor counsel its written files concerning this action, including all documents produced by either party in this action and all pl eadings either filed with the court or exchanged with j2 in this action. 3) Defendants shall immediately screen from further participation in this action Douglas Parker.Parker who have been screened and the required affidavits.4) Successor counsel sh all not communicate with Crowell, Perkins, Douglas Parker, the Attorney, any screened person, or any other person, who had communications with the Attorney about any matter related to this action.5) Defendants shall reimburse j2s reasonable attorneys fees and costs incurred in connection with the Motion. By January 11, 2013, j2 shall submit to Defendants a statement identifying the amount of such fees, together with a breakdown, by attorney, of the amount of time spent on such matters. The parties shall make every effort to resolve any fee dispute without court action. (lc). Modified on 12/19/2012 (lc).
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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j2 GLOBAL COMMUNICATIONS
INC., and ADVANCED MESSAGING
TECHNOLOGIES, INC.
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Plaintiffs,
v.
CAPTARIS INC., and OPEN TEXT
CORPORATION,
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Defendants.
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Case No. CV 09-04150 DDP (AJWx)
ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFFS’
MOTION TO DISQUALIFY COUNSEL
PERKINS COIE AND TO COMPEL
DISCOVERY
[Motion filed on Oct. 15, 2012]
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I. Introduction
Plaintiff j2 Global Communications, Inc. has filed a Motion to
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Disqualify Counsel Perkins Coie and to Compel Discovery (“Motion”)
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in three patent infringement cases (“the Three Current Cases”)
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pending before this court.
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Messaging Technologies, Inc. is a co-Plaintiff and co-movant in two
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of the cases (9-4150 and 11-4239) (Plaintiffs are collectively
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called “j2”).
(Dkt. No. 77.)1
Plaintiff Advanced
In each case, one or more of the following
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The three case numbers are: 11-4239,9-4189, and 9-4150. As each Motion
essentially implicates the same issues in each case, all cites will be to the
11-4239 case, unless otherwise noted.
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corporations is a defendant: Open Text Corporation (“Open Text”)
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EasyLink Services International Corporation (“EasyLink”), and
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Captaris, Inc. (“Captaris”) (collectively “Defendants”).
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owns Easy Link and Captaris.
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the Defendants.
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(“Crowell”) about assigning one of its attorneys to temporarily
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serve as Open Text’s outside in-house counsel for intellectual
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property matters.
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fill this role, even though a conflicts check revealed the Attorney
Open Text
Perkins Coie (“Perkins”) represents
In late 2011, Open Text contacted Crowell & Moring
Crowell assigned an attorney (“the Attorney”) to
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formerly represented j2.
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j2 that involved three of the four patents at issue in the Three
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Current Cases.
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Attorney had contact with Perkins.
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disqualifies Perkins.
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is not a molecule of evidence that Perkins did anything other than
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act with integrity and in a manner consistent with the highest
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traditions of the legal profession.
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In fact, he worked on cases on behalf of
As Open Text’s outside in-house counsel, the
The court therefore
This outcome is unfortunate, because there
In reaching its decision, the court has considered j2's in
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camera evidence, which includes billing records of the Attorney’s
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work for j2, and various emails that the Attorney sent and received
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in the course of his j2 representation.
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Billing Records and Emails (“In Camera Evidence”).)
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I. Background
(In Camera Evidence of
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A. The Attorney’s Experience at the Time He Represented j2
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The Attorney worked at Kenyon & Kenyon (“Kenyon”) from 2002 to
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2005, and began representing j2 as part of a team of attorneys in
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2004.
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that assigning the Attorney to Open Text was appropriate in part
(Bernstein Decl. ¶¶ 4-5, Dkt. No. 77-2.)
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Crowell maintains
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because he was only “a junior associate” when he represented j2.
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(Sacks Decl. Ex. F at 16, Dkt. No. 77-3.)
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was an associate in 2004, by the end of that year he had many years
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of experience as a software engineer, studied graduate-level
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Computer Science, graduated cum laude from a reputable law school
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(where he served as Managing Editor of the Law Review), edited a
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publication about the International Trade Commission, co-authored
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another about patent litigation, and delivered a speech about
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international patent licensing.
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Although the Attorney
(Johnson Decl. Ex. 14, Dkt. No.
113.)
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B. The Work the Attorney Performed for j2
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Crowell also asserts that the Attorney cleared its conflicts
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check because he allegedly told Crowell that “he did not recall
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having access to any confidential information,” and his
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representation of j2 “involved primarily the review of publicly
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available patent documents.”
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77.)
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(Sacks Decl. Ex. B. at 6, Dkt. No.
The records before that court indicate that from 2004 until
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2005 the Attorney represented j2 in patent litigation, and he
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billed j2 for 234.7 hours of work.
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Evidence.)
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234.7 hours probably represents about ten percent of his billing
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over the roughly fifteen months that he worked on j2 matters.
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Specifically, the Attorney billed j2 69.8 hours for his work on j2
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Global Communications, Inc. v. Venali, Inc. (“Venali”), 84.6 hours
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for j2 Global Communications, Inc. v. CallWave, Inc. (“CallWave”)
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(collectively “the Prior Cases”), and 56 hours for “Bobo” patent
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analysis.
(Id. ¶¶ 5-6; In Camera
Based on the court’s knowledge of law firm practices,
(Bernstein Decl. ¶¶ 2, 6-7.)
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In the Venali and Callwave actions, j2 alleged infringement of
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U.S. Patent Nos. 6,208,638 (“‘638 Patent”) and 6,350,066 (“‘066
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Patent), and it also alleged infringement of U.S. Patent No.
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6,597,688 (“‘688 Patent”) in the Venali case.
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2.)
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Patent is one of them.
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‘638 and ‘688 Patents were infringed in each of the Three Current
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Cases, and that the ‘066 Patent was also infringed in two of those
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cases.2
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(Bernstein Decl. ¶
A number of patents comprise the Bobo patents, and the ‘066
(Bernstein Decl. ¶ 7.)
j2 alleges that the
The Attorney’s billing records from Kenyon indicate he was
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involved in the following tasks on behalf of j2: “reviewing claim
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charts, performing infringement analyses, searching for and
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analyzing prior art, drafting a validity opinion, analyzing
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documents for a settlement conference, reviewing and commenting on
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draft pleading, discussing discovery strategies, drafting discovery
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requests and responses, and drafting j2’s opposition to a summary
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judgment motion in the Venali action.”
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Camera Evidence.)
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sometimes by forwarding), or was copied on over 120 emails to or
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from j2's General Counsel.
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Evidence.)
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individuals, and sometimes involved evaluations of j2's cases.
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Camera Evidence.)
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possible infringement defenses.
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Evidence.)
(Bernstein Decl. ¶ 6; In
The Attorney sent, received (sometimes directly,
(Bernstein Decl. ¶ 9; In Camera
These emails were sent to about seven or eight
One email the Attorney received analyzed
(Bernstein Decl. ¶ 12; In Camera
That email discussed Dr. David Farber (“Dr. Farber”),
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(In
Those two are case numbers 11-4239 and 9-4150.
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and whether his activities are relevant to an on-sale bar defense.3
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(In Camera Evidence.)
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In the Three Current Cases, Defendants claim products that Dr.
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Farber was allegedly involved in testing and analyzing give rise to
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an on-sale defense to j2's ‘688 and ‘638 patent infringement
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claims.
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15:5, Dkt. No. 48.)
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Kenyon, the United States Patent Office began a multi-year
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reexamination of the ‘066, ‘638, and ‘688 Patents, which led to
(Bernstein Decl. ¶ 12; In Camera Evidence.)
(Defendant’s Answer to Amended Compl. (“Answer”) at 10:24In 2005, the year that the Attorney left
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changes in at least the ‘066 and ‘638 Patents.
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16-18, Dkt. No. 101; See id. Exs. E-K.)
(Carmody Decl. ¶¶
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C. History of the Three Current Cases
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j2 filed two of the Three Current Cases on June 26, 2008, and
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the other on May 17, 2011.4
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actions (“the EasyLink Cases”) (case numbers 9-4189 and 11-4239),
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and Open Text and Captaris are defendants in the other (9-4150).
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Open Text owns both of these other companies, acquiring Captaris in
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2008 and EasyLink in 2012.
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an attorney (“Lead Trial Counsel”) to represent it and Captaris in
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2008, before Lead Trial Counsel was at Perkins.
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¶ 5, , Dkt. No. 100.)
EasyLink is a defendant in two of the
(Davies Decl. ¶ 2.)
Open Text retained
(See Carroll Decl.
Lead Trial Counsel moved to Perkins in
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The on-sale bar affirmative defense invalidates a patent if “(1) the
invention at issue had become the ‘subject of a commercial offer for sale’ more
than one year before the filing of the patent application; and (2) the invention
was ready for patenting, either by, for example, having that invention reduced
to practice or by preparing ‘drawings or other descriptions of the invention’
that would enable one skilled in the art to practice the invention.” Special
Devices, Inc. v. OEA, Inc., 270 F.3d 1353, 1354-55 (Fed. Cir. 2001) (quoting
Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67-68 (1998).
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Compl., Dkt. No. 3 (case no. 9-4150); Compl., Dkt. No. 3 (case no. 94189); Compl., Dkt. No. 1 (case no. 11-4239).
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February 2012, and Open Text made Perkins its counsel of record
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when he did.
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another Perkins attorney began advising Open Text about the
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EasyLink acquisition in mid-February 2012.
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unclear when Perkins began working on the EasyLink Cases, but it
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was before Dr. Farber’s deposition, which took place on July 27,
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2012.
(Carroll Decl. ¶¶ 14-15.)
Lead Trial Counsel and
(Id. at ¶ 20.)
It is
(Id. ¶¶ 28-29.)
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D. The Conflicts Check and the Attorney’s Open Text Assignment
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The Attorney is now Counsel at Crowell.
(Johnson Decl. Ex.
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14.)
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to work on “intellectual property and patent matters,” but was
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“unable to fill the role even as Open Text’s intellectual property
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and patent needs grew.”
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provide an attorney who could temporarily assume this position
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until a permanent candidate was selected.
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Crowell assigned the Attorney to fill this role, even though it
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knew that he previously represented j2
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at 6.)
In 2011, Open Text began searching for an in-house attorney
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(Davies Decl. ¶ 6.)
It asked Crowell to
(Id.)
As discussed,
(Id. ¶ 9; Sacks Decl. Ex. B
j2 was never asked to sign a conflict waiver, allowing the
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Attorney to work for Open Text.
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likewise knew nothing about the Attorney’s prior involvement with
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j2.
(Bernstein Decl. ¶ 13.)
Perkins
(See Parker Decl. ¶ 4, Dkt. No. 103; Carroll Decl. ¶ 24.)
The Attorney told Open Text’s General Counsel that while he
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was at Kenyon he “performed a public art search relating to a Bobo
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patent,” and the General Counsel states that he “did not understand
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this to mean that [the Attorney] had worked for j2.”
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¶ 4.)
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///
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(Parker Decl.
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E. The Attorney’s Role in the Three Current Cases
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In his role with Open Text, the Attorney met with Perkins on a
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number of occasions. (Id. ¶ 6.)
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Attorney’s work for Open Text as follows:
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Crowell has described the
He was given an initial assignment for Open Text during the
fourth quarter of 2011 to familiarize himself with the company's
products and pending IP litigations. That process included his
introductions to Perkins Coie lawyers representing Open Text .
. . . Later, he was asked to assist Open Text in collecting
documents for Perkins Coie's use in responding to discovery
requests. As [the Attorney] became more familiar with the j2
litigation, he followed Perkins Coie's litigation work and
provided his views and comments thereon to Open Text in-house
counsel, together with reports on the progress of the
litigation. After j2 proposed that the parties mediate their
dispute, [the Attorney] assisted Open Text with preparation for
the mediation that was to have occurred in May 2012.
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(Sacks Decl. Ex. F. at 16, Dkt. No. 77.)
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Attorney’s role at Open Text on July 27, 2012, during the
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deposition of Dr. Farber, when he introduced himself as Open Text’s
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“outside in-house counsel” to one of j2's attorneys at Kenyon
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(Bernstein Decl. ¶ 13.)
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announced that the Attorney used to be an associate at Kenyon, and
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that he would check whether the Attorney worked on j2 patent
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matters.
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informed Perkins and Open Text that the Attorney had worked for j2.
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(Id.)
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j2 learned of the
At the Farber deposition, j2's attorney
(Carroll Decl. ¶ 30.)
The next week, j2's attorney
Two events followed the Farber deposition, but it is unclear
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which occurred first.
The Attorney met with EasyLink’s counsel of
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record at the time, King & Spaulding, “where we [King & Spalding]
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presented to [the Attorney] our evaluation of the litigation.”
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(Sacks Decl. Ex. J at 32.)5
Additionally, Perkins and Open Text
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As discussed, Perkins began working on the EasyLink Cases sometime before
(continued...)
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ended communication with the Attorney.
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Decl. ¶¶ 31-32.)
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II. Legal Standards and Analysis
(Davies Decl. ¶ 15; Carroll
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There are five issues: (1) Whether California law governs;(2)
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Whether the court should presume the Attorney learned confidential
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information about j2 that is relevant to the Three Current Cases;
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(3) Whether the court should presume that the Attorney shared j2's
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confidential information with Perkins; (4) Whether such a
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presumption is irrebutable; and (5) Whether disqualifying Perkins
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is required.
Regarding the first issue, California law governs.
In re
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County of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000).
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the second through fifth, the California Supreme Court has stated
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the following:
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As to
That enduring duty to preserve client confidences precludes an
attorney from later agreeing to represent an adversary of the
attorney's former client unless the former client provides an
informed written consent waiving the conflict. If the attorney
fails to obtain such consent and undertakes to represent the
adversary, the former client may disqualify the attorney by
showing a substantial relationship between the subjects of the
prior and the current representations. To determine whether
there is a substantial relationship between successive
representations, a court must first determine whether the
attorney had a direct professional relationship with the former
client in which the attorney personally provided legal advice
and services on a legal issue that is closely related to the
legal issue in the present representation.
If the former
representation involved such a direct relationship with the
client, the former client need not prove that the attorney
possesses actual confidential information.
Instead, the
attorney is presumed to possess confidential information if the
subject of the prior representation put the attorney in a
position in which confidences material to the current
representation would normally have been imparted to counsel. .
. . When a substantial relationship between the two
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(...continued)
the Farber deposition, but Perkins did not appear as counsel of record on behalf
of EasyLink until October 11, 2012. (See Carroll Decl. ¶ 21.)
8
1
2
3
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representations is established, the attorney is automatically
disqualified from representing the second client. . . .
Vicarious disqualification rules are a product of decisional
law. Normally, an attorney's conflict is imputed to the law
firm as a whole on the rationale that attorneys, working
together and practicing law in a professional association, share
each other's, and their clients', confidential information.
5
City & County of San Francisco v. Cobra Solutions, Inc., 38 Cal.
6
4th 839, 847-48 (2006) (internal citations and quotation marks
7
omitted).
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disqualification motions generally because the Attorney worked as
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Open Text’s outside in-house counsel, not as a Perkins attorney.
The facts in this Motion are not typical of
10
However, the court holds the above-quoted rule applies here.
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Attorney’s prior representation involved three of the four patents
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at issue in the Three Current Cases, as well as an on-sale bar
13
defense related to Dr. Farber’s activities.
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representation is, thus, substantially similar to the Three Current
15
Cases.
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Text on IP matters, and because of his contact with Perkins,
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Perkins must be disqualified.
The
The prior
Because the Attorney was outside in-house counsel for Open
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A.
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Defendants argue that while federal courts in California look
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to California law in deciding a disqualification motion, state law
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does not bind them in the way that a diversity case would, because
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federal courts are governed by their own rules of professional
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conduct.
24
Disqualify (“Opp’n”) at 12:26-13:7, Dkt. No. 97.)
25
Circuit, however, has made clear that a federal court in California
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must apply California law in a disqualification motion.
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County of Los Angeles, 223 F.3d at 995 (“[W]e apply state law in
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determining matters of disqualification.”).
California Law Governs
(Defendant’s Opposition to Plaintiffs’ Motion to
9
The Ninth
In re
1
Defendants’ argument relies principally on a footnote from an
2
unpublished Northern District of California case. Openwave Sys.,
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Inc. v. 724 Solutions (US) Inc., No. C 09-3511 RS, 2010 WL 1687825,
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at *5 n.6 (N.D. Cal. Apr. 22, 2010).
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applied California law, because its local rule required attorneys
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to adhere to “California State Bar standards.”
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District similarly requires attorneys to “comply with the standards
8
of professional conduct required of members of the State Bar of
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California and contained in the State Bar Act, the Rules of
10
Professional Conduct of the State Bar of California, and the
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decisions of any court applicable thereto.”
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3.1.2.
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“statutes, rules and decisions.”
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governs.
15
16
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B.
However, even that case
Id.
The Central
Cent. Dist. L.R. 83-
The Central District rule “adopt[s]” such California
Id.
California law, therefore,
The Court Presumes the Attorney Possesses Confidential
Information about j2
It is presumed that an attorney has relevant confidential
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information about a client if there is a substantial relationship
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between the prior representation and the current one.
20
Solutions, 38 Cal. 4th at 847.
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substantial relationship, the court should first analyze whether
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there was a direct relationship between an attorney and the former
23
client, and whether that relationship touched issues related to the
24
present litigation.
25
determining whether there was a direct relationship.
26
Farhang v. Indian Inst. of Tech., No. C-08-02658RMW, 2009 WL
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3459455, at *2 (N.D. Cal. Oct. 27, 2009).
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time representing j2, he and j2's General Counsel were part of a
Id.
Cobra
In determining whether there is
Courts emphasize shared communications in
10
See e.g.
During the Attorney’s
1
group of about seven or eight attorneys that regularly sent emails
2
to each other. (Bernstein Decl. ¶ 9; In Camera Evidence.)
3
the Attorney and j2's General Counsel were parties to over 120
4
emails.
5
to an on-sale bar defense, which is also at issue in the Three
6
Current cases.
7
on the Prior Cases, where three of the four patents currently at
8
issue were litigated. (Id.)
9
Prior Cases shared drafts of papers that would later be filed with
(Id.)
In total
One email concerned Dr. Farber, and his relevance
(In Camera Evidence.)
Many of these emails focused
Some of the emails relating to the
10
the court, and others assessed the strength of j2's cases.
11
In light of these exchanges, the court finds that a direct
12
relationship between the Attorney and the client existed.
13
When an attorney had direct contact with a client, a
(Id.)
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substantial relationship exists if “the subject of the prior
15
representation put the attorney in a position in which confidences
16
material to the current representation would normally have been
17
imparted to counsel.”
18
substantial relationship test is “necessarily fact-dependant.” UMG
19
Recordings, Inc. v. MySpace, Inc., 526 F. Supp. 2d 1046, 1060
20
(C.D. Cal. 2007).
21
“subject-matters, facts or issues” to determine whether there is a
22
substantial relationship.
23
Salomon Brothers, Inc., 229 Cal. App. 3d 1445, 1453 (1991)).
24
Subject matter similarity is the most important.
25
Hartford Cas. Ins. Co., 111 Cal. App. 4th 698, 711 (2003)
26
(suggesting that the California Supreme Court has decided that “a
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‘substantial relationship’ exists whenever the ‘subjects’ of the
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prior and the current representations are linked in some rational
Cobra Solutions, 38 Cal. 4th at 847.
The
Courts look to the degree of overlap in
See id. (quoting H.F. Ahmanson & Co. v.
11
Jessen v.
1
manner”) (citing Flatt v. Superior Court, 9 Cal. 4th 275, 283
2
(1994)).
3
and factual issues involved in the compared representations,” as
4
it includes “information material to the evaluation, prosecution,
5
settlement or accomplishment of the litigation or transaction
6
given its specific legal and factual issues.”
7
App. 4th at 712-13.
8
9
A “subject” is “broader . . . than the discrete legal
Jessen, 111 Cal.
Defendants argue that there is no substantial relationship
because the Three Current Cases “involve different defendants,
10
claims and evidence,” and they emphasize that “[i]n the
11
intervening years between [the Attorney’s j2 representation and
12
his representation of Open Text], the patents have been reexamined
13
by the PTO and their claims have been substantially altered.”
14
(Opp’n at 22:7-10.)
15
altered, but to different degrees.
16
the reexamination process required “extensive changes to the ‘066
17
patent” and “significant changes to the ‘638 patent,” but not
18
noting any level of change in the ‘688 patent); see also Carmody
19
Decl. ¶¶ 16-18 (describing the changes similarly).)
20
It is true that the patents have been
(See Opp’n 10:13-21 (claiming
More importantly, nothing requires the court to extensively
21
analyze the patents’ modifications, nor to do an in-depth
22
comparison of the products.
23
between the subject matter of the two cases will suffice.
24
111 Cal. App. 4th at 711 (2003); Knight v. Ferguson, 149 Cal. App.
25
4th 1207, 1213 (2007).6
To the contrary, a rational link
Jessen,
In addition to other matters the Attorney
26
6
27
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Anything more than a “rational link” test would effectively require a
mini-trial on the merits, entailing a comparison of the patents as they existed
initially with any subsequent modifications. Expert testimony would then likely
(continued...)
12
1
billed to j2, he billed j2 154.4 hours for work on the Prior
2
Cases, which involved three of the four patents at issue in the
3
Three Current Cases.
4
(See Bernstein Decl. ¶¶ 2, 6.)
Additionally, the on-sale bar defense was at issue in the
5
cases the Attorney worked on as j2's attorney, and as j2's
6
attorney he received an email evaluating Dr. Farber’s relevance to
7
this defense.
8
relevant to a possible on-sale bar defense in the Three Current
9
Cases, as well.
(In Camera Evidence.)
Dr. Farber’s activities are
(See Answer at 10:24-15:5.)
In fact, j2 learned
10
of the Attorney’s work with Open Text in the Three Current Cases,
11
when he attended Dr. Farber’s deposition.
12
In disputing Dr. Farber’s importance to the disqualification
13
analysis, Defendants argue that they knew about him, along with
14
his import to an on-sale bar defense, before the Attorney became
15
involved with Open Text.
16
Bellows Decl. ¶ 2, Dkt. No. 104.)
17
could have provided additional useful to Perkins concerning Dr.
18
Farber.
19
Three Current Cases the court presumes that the Attorney possessed
20
confidential information.
21
847-48.
22
23
(Bernstein Decl. ¶ 13.)
(Opp’n at 8:6-11; Carmody Decl. ¶¶ 9-12;
However, the Attorney still
Because the Prior Cases are substantially related to the
See Cobra Solutions,
38 Cal. 4th at
At times, Defendants refer to the Attorney as a “junior
associate,” and assert that there is a “lack of evidence” about
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6
25
26
27
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(...continued)
have to be presented and evaluated. Such a time-consuming process would add
little value. The court would still not know whether the former attorney may
have, even unwittingly, communicated important information about, for example,
the financial strength of the former client, the former client's settlement
strategy, the former client’s perceived strengths or weaknesses of its claims or
defenses, and other information that might give counsel an unfair advantage in
the litigation.
13
1
both the “nature of the work” he did for j2 and whether he
2
acquired confidential information about j2.
3
Supplemental Brief in Support of Defendant’s Opposition to j2's
4
Motion to Disqualify Perkins Coie and Compel Discovery (“Supp.
5
Opp’n.”) at 10:22-11:5, Dkt. No. 122.)
6
level of involvement with a prior case is sufficient for presuming
7
that an attorney acquired confidential information about that
8
prior case.
9
70, 73-74 (2005) (finding that a one-hour phone call about a case
(Defendants’
However, a de minimis
See Pound v. DeMera DeMera Cameron, 135 Cal. App. 4th
10
three years earlier was sufficient to presume that an attorney
11
acquired confidential information).
12
Regardless, both the Attorney’s professional experience and
13
the extent of his work for j2 were significant.
14
was representing j2, he had authored and edited publications about
15
intellectual property, done graduate work in computer science, and
16
worked for many years as a software engineer.
17
14).
18
Prior Cases included: “reviewing claim charts, performing
19
infringement analyses, [reviewing] prior art . . . analyzing
20
documents for a settlement conference, reviewing and commenting on
21
draft pleading, discussing discovery strategies, drafting
22
discovery requests and responses, and drafting j2’s opposition to
23
a summary judgment motion . . .”
24
Evidence.)
25
strategies and participating in the creation and editing of
26
motions and pleadings, the likelihood that he learned confidential
27
information is readily apparent.
28
prior art, the risk may seem less likely.
At the time he
(Johnson Decl. Ex.
Additionally, in camera evidence shows that his work in the
(Bernstein Decl. ¶ 6; In Camera
In some of this work, such as discussing discovery
In others, such as reviewing
14
However, confidential
1
information may guide prior art reviews—such as an instruction
2
from a partner or client about the weaknesses of certain features.
3
C.
4
5
The Court Presumes that Perkins has the Same
Confidential Information about j2 as the Attorney
The general rule is that presuming an attorney possesses
6
confidential information requires presuming the same for his law
7
firm (“the Vicarious Presumption Rule”).
8
of Corporations v. SpeeDee Oil Change Sys., Inc., 20 Cal. 4th
9
1135, 1146 (1999) (ruling that “a presumption that an attorney has
See People ex rel. Dept.
10
access to privileged and confidential matters relevant to a
11
subsequent representation extends the attorney's disqualification
12
vicariously to the attorney's entire firm”); see id. at 1153-54
13
(explaining that, “[t]he vicarious disqualification rule
14
recognizes the everyday reality that attorneys, working together
15
and practicing law in a professional association, share each
16
other's, and their clients', confidential information”).
17
Attorney, however, does not work at Perkins. Rather, he was
18
outside in-house counsel for Open Text on intellectual property
19
matters.
20
court is not aware of any case analyzing whether the Vicarious
21
Presumption Rule applies to such a situation. However, some cases
22
have analyzed whether presuming an attorney at one law firm has
23
confidential information requires making the same presumption
24
about another firm that is co-counsel with the tainted attorney.
25
These cases come out different ways, but the cases applying the
26
Vicarious Presumption Rule to co-counsel have the better argument.
27
Three Northern District of California cases suggest that
28
(Davies Decl. ¶¶ 6, 9; Bernstein Decl. ¶ 13.)
The
This
presuming co-counsel possesses confidential information is
15
1
inappropriate. In re Airport Car Rental Antitrust Litig., 470 F.
2
Supp. 495, 506 (N.D. Cal. 1979); see also Canatella v. Krieg,
3
Keller, Sloan, Reilley & Roman LLP, No. C 11-05535 WHA, 2012 WL
4
847493, at *2 (N.D. Cal. Mar. 13, 2012) (making no mention of a
5
presumption, and relying on Airport Car Rental to suggest that a
6
multi-factor analysis is required to determine whether co-counsel
7
has confidential information);
8
Tech. Distributors, LLC, No. 11-CV-01043-LHK, 2011 WL 2940313, at
9
*6 (N.D. Cal. July 20, 2011).
Oracle Am., Inc. v. Innovative
Other cases have applied the
10
Vicarious Presumption Rule and presumed that co-counsel received
11
confidential information. Pound, 135 Cal. App. 4th at 77 (noting
12
the Vicarious Presumption Rule, and holding that “there is no
13
logical or substantive manner to distinguish” between a firm
14
employing a tainted attorney and a firm serving as co-counsel with
15
a tainted attorney);
16
2d 1068, 1078, 1084 (C.D. Cal. 2012) (stating the Vicarious
17
Presumption Rule, and applying it against co-counsel, because
18
“[i]t is also reasonable to assume that the two law firms engaged
19
in fairly extensive discussions about the case and Plaintiff's
20
litigation strategy before filing their complaint and prior to the
21
erection of an wall ethical segregating [the tainted attorney]
22
from the case”).
Beltran v. Avon Products, Inc., 867 F. Supp.
23
This court concludes that the Vicarious Presumption Rule
24
should be applied here (i.e., that it should be presumed that
25
Perkins has relevant confidential information about j2.)
26
three Northern District cases that did not apply the Vicarious
27
Presumption Rule to co-counsel are not persuasive.
28
consider applicable California law.
16
The
They do not
Oracle and Canatella rely
1
heavily on Airport Car, which was decided in 1979. Canatella, 2012
2
WL 847493, at *2, Oracle,, 2011 WL 2940313, at *5.
3
neither Oracle nor Canatella considered Pound, a California
4
appellate case that presumed co-counsel possessed the tainted
5
attorney’s confidential information.
6
77 (2005).
7
either case.
8
incorrectly declares that on “the issue of disqualification of co-
9
counsel . . . no California . . . cases [are] directly on point.”
It seems
Pound, 135 Cal. App. 4th 70,
And Pound does not appear to have been briefed in
(Johnson Decl. Exs. 6-11.)
Canatella even
10
Canatella, , 2012 WL 847493, at *2.
11
courts have generally ignored these three cases.
12
the only one cited in any California opinion, and a single case
13
from 1980 is the only one that cites its holding approvingly.
14
Chadwick v. Superior Court, 106 Cal. App. 3d 108, 117 n.9 (1980).
15
Additionally, California
Airport Car is
More importantly, the reasoning behind the Vicarious
16
Presumption Rule indicates that it should also be applied against
17
Perkins: “Normally, an attorney's conflict is imputed to the law
18
firm as a whole on the rationale that attorneys, working together
19
and practicing law in a professional association, share each
20
other's, and their clients', confidential information.”
21
Solutions, 38 Cal. 4th at 847-48. (internal quotation marks
22
omitted.)
23
counsel for intellectual property matters, and the Three Current
24
Cases are high-stakes, complex patent matters.
25
in-house counsel effectively cooperating, coordinating, and
26
communicating with their company’s attorneys is self-evident.
27
Defendants’ argument that the Attorney “played a limited
28
Cobra
The Attorney served as Open Text’s outside in-house
role” in the Three Current Cases is unavailing.
17
The importance of
(Carroll Decl. ¶
1
25.)
2
in-house counsel for intellectual property matters–an experienced
3
attorney who was also Counsel at Crowell—as playing an
4
inconsequential role in three major patent cases.
5
concern aside, though, cases do not analyze how much work a
6
tainted attorney performed in the cases for which disqualification
7
is sought.
8
plaintiff’s firm after it and the tainted outside counsel “briefly
9
discussed the case” and met with plaintiffs “a few times.”)
It is probably a stretch to characterize Open Text’s outside
Leaving that
See Pound, 135 Cal. App. 4th at 74 (disqualifying
Under
10
the Vicarious Presumption Rule, once an attorney is presumed to
11
have confidential information, her law firm is presumed to have
12
it, too.
13
Cal. 4th at 283.
14
15
16
Cobra Solutions, 38 Cal. 4th at 847-48; See Flatt, 9
D. The Presumption Against Perkins Is Irrebutable and Thus
Disqualification Is Mandatory
Once there is a presumption that a firm possesses
17
confidential information, generally that presumption is
18
irrebutable and disqualification is compelled.
19
Supreme Court has said:
20
21
22
23
As the California
Where the requisite substantial relationship between the
subjects of the prior and the current representations can be
demonstrated, access to confidential information by the attorney
in the course of the first representation (relevant, by
definition, to the second representation) is presumed and
disqualification of the Attorney's representation of the second
client is mandatory; indeed, the disqualification extends
vicariously to the entire firm.
24
Flatt, 9 Cal. 4th at 283 (emphasis in original); see generally
25
Pound, 135 Cal. App. 4th 70 (applying mandatory disqualification
26
rule to law firm with tainted co-counsel); In re County of Los
27
Angeles, 223 F.3d at 995 (noting that “[t]he [California] courts
28
18
1
of appeal developed a general rule that the presumption is not
2
rebuttable”).
3
However, in one case the California Supreme Court held that
4
it “need not consider whether an attorney can rebut a presumption
5
of shared confidences, and avoid disqualification, by establishing
6
that the firm imposed effective screening procedures.”
7
Oil, 20 Cal. 4th at 1151; see also In re County of Los Angeles,
8
223 F.3d at 997 (interpreting SpeeDee Oil as suggesting that the
9
California Supreme Court “may be inclined” to allow law firms to
10
erect ethical walls to avoid disqualification); but see Beltran,
11
867 F. Supp. 2d 1068, 1083 (C.D. Cal. 2012) (doubting that ethical
12
screening can prevent disqualification);
13
at 1061 (questioning the same).
14
court has decided that a law firm’s ethical screening permitted it
15
to attempt rebutting the presumption. Kirk v. First Am. Title Ins.
16
Co., 183 Cal. App. 4th 776, 801 (2010) (holding that
17
disqualification is the “general rule,” and that courts “should
18
presume knowledge is imputed to all members of a tainted
19
attorney’s law firm,” but that “in the proper circumstances, the
20
presumption is a rebuttable one, which can be refuted by evidence
21
that ethical screening will effectively prevent the sharing of
SpeeDee
MySpace, 526 F. Supp. 2d
At least one California appellate
22
23
24
25
26
27
28
19
1
confidences in a particular case”) (emphasis in original).7
2
screening must be implemented in a “timely” manner.
3
Such
Id. at 810.
In the Three Current Cases, the Attorney was not screened
4
until after Dr. Farber’s deposition, approximately eight months
5
after he began serving as Open Text’s outside in-house counsel.
6
(See Parker Decl. ¶¶ 4-5 .)
7
Attorney’s conflict, it did not initiate a timely screen.
8
Kirk., 183 Cal. App. 4th
9
wall must be in place “before undertaking the challenged
Since Perkins was unaware of the
See
at 810 n.31 (suggesting that the ethical
10
representation or hiring the tainted individual” (internal
11
quotation marks omitted); In re County of Los Angeles, 223 F.3d at
12
996
13
individual joined the firm).
14
presumption is irrebutable.
(emphasizing screening measures taken before tainted
For Perkins, therefore, the
15
E. No Remedy Short of Disqualification Will Suffice
16
Defendants argue that the court should fashion a remedy less
17
drastic than disqualification.
18
No. 122.)
19
20
21
22
(Supp. Opp’n at 8:17-10:10, Dkt.
The leading case on point for this issue held:
[E]ven when the court has misgivings about the conduct of the
challenged attorney, it is not obligated to disqualify that
lawyer merely because he has run afoul of the applicable ethical
rules. The court is encouraged instead to examine the specific
facts and circumstances peculiar to the individual case to
decide whether disqualification, or some lesser sanction, would
be an appropriate remedy. In other words, even when counsel has
been shown to have committed an ethical rule infraction the
23
24
25
26
27
28
7
Defendants argue that Kirk forbids automatically disqualifying a law firm
merely because of its association with a tainted attorney, and requires proof
that the Attorney shared confidences with the firm before disqualification is
appropriate. (See Opp’n at 14:2-12.) Defendants offer declarations from
Perkins attorneys and others as proof that they never acquired confidential
information from the Attorney. (See Dkt. Nos. 98-105.) However, Kirk only
allowed timely ethical screening to rebut the presumption, and further held that
“it is not sufficient to simply produce declarations stating that confidential
information was not conveyed.” 183 Cal. App. 4th at 801, 810.
20
1
court retains discretion to decline to order disqualification,
and, in many cases, courts have done just that.
2
MySpace, Inc., 526 F. Supp. 2d at 1063 (citation omitted).
3
MySpace, however, involved very different facts.
That case
4
concerned a law firm that obtained a conflict waiver from its
5
former client, enacted an ethical wall around the attorneys who
6
worked for the prior client before engaging in work for the
7
current client, and whose current client waived the affirmative
8
defense that triggered the conflict—an affirmative defense that
9
was “collateral to what this case is about.”
Id. at 1063-65.
10
None of these factors are present here.
11
IV. Conclusion
12
Perkins is disqualified.
The court denies the request for
13
further discovery, because the order disqualifies Perkins, screens
14
Open Text’s General Counsel, Douglas Parker, and screens all in15
house attorneys who substantively discussed the Three Current
16
Cases with the Attorney.
(See Parker Decl. ¶ 6 (attesting to
17
having been “a participant in many of the instances in which [the
18
Attorney] had an opportunity to communicate with and interact with
19
attorneys from Perkins Coie”).
20
The court finds that none of Perkins’ attorneys had knowledge
21
of the Attorney’s prior j2 representation.
Indeed, during oral
22
argument the court characterized Perkins as a victim of Crowell’s
23
inexplicable decision to approve the Attorney to work for Open
24
Text.
The court affirms Perkins’ innocence in this matter, and
25
appreciate the professionalism its attorneys have exhibited.
26
Perkins’ innocence though, does not prevent its disqualification.
27
Motions to disqualify are not about punishing guilty parties.
28
21
1
Kirk, 183 Cal. App. 4th at 815.
2
“preserv[ing] public trust in the scrupulous administration of
3
justice and the integrity of the bar.”
4
at 1145.
5
V. Remedies
6
They are primarily about
SpeeDee Oil, 20 Cal. 4th
The Motion is GRANTED as to disqualifying Perkins, but is
7
DENIED as to compelling discovery.
8
ORDERED:
9
Accordingly, IT IS HEREBY
1) Perkins is disqualified from representing Defendants in
10
this litigation.
11
retain successor counsel and have such counsel appear in the
12
action.
13
Defendants shall have until January 11, 2013, to
2) In connection with the transition to new counsel, Perkins
14
shall have no further involvement in this action, except Perkins
15
may transmit to successor counsel its written files concerning
16
this action, including all documents produced by either party in
17
this action and all pleadings either filed with the court or
18
exchanged with j2 in this action.
19
public documents (collectively “non-public documents”) prepared
20
after November 1, 2011, that contain or otherwise reflect thoughts
21
of disqualified or screened firms or individuals may not be
22
transmitted, unless they are accompanied with a declaration,
23
signed under penalty of perjury, from a partner (“the Partner”) at
24
Perkins with substantial familiarity with this case, attesting as
25
follows:
26
evaluating the propriety of transmitting the non-public documents
27
to successor counsel, and attests to the best of such Partner’s
28
information and belief that the Attorney did not provide, directly
However, notes and other non-
That the Partner has exercised due diligence in
22
1
or indirectly, any information contained within the non-public
2
documents.
3
3) Defendants shall immediately screen from further
4
participation in this action Douglas Parker. Any other internal
5
counsel or external counsel need not be screened, provided they
6
submit a declaration signed under penalty of perjury, attesting
7
that they have not had substantive communications with the
8
Attorney or with any one else whom they reasonably believe may
9
have received information from the Attorney concerning this
10
action.
11
court with both a list identifying all persons in addition to Mr.
12
Parker who have been screened and the required affidavits.
By January 11, 2013, Defendants shall provide j2 and the
13
4) Successor counsel shall not communicate with Crowell,
14
Perkins, Douglas Parker, the Attorney, any screened person, or any
15
other person, who had communications with the Attorney about any
16
matter related to this action.
17
5) Defendants shall reimburse j2’s reasonable attorneys’ fees
18
and costs incurred in connection with the Motion. By January 11,
19
2013, j2 shall submit to Defendants a statement identifying the
20
amount of such fees, together with a breakdown, by attorney, of
21
the amount of time spent on such matters.
22
every effort to resolve any fee dispute without court action.
23
The parties shall make
Nothing contained herein is intended to prevent any party,
24
person, or firm from communicating about ministerial or logistical
25
issues required to transition to new counsel.
26
///
27
28
23
Nothing contained
1
herein is intended to preclude the parties or attorneys from
2
stipulating to additional exceptions to this order in connection
3
with any collateral dispute.
4
5
IT IS SO ORDERED.
6
7
8
Dated: December 19, 2012
DEAN D. PREGERSON
United States District Judge
9
10
11
12
13
14
15
16
17
18
19
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22
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