TQ Delta LLC v. Pace Americas Inc.
MEMORANDUM ORDER addressing the disputes raised in the joint report. The parties are directed to meet-and-confer, and to the extent there are gaps or ambiguities in the procedures set forth above, submit a further status report identifying them, with proposed resolutions. Signed by Judge Richard G. Andrews on 1/5/2017. Associated Cases: 1:13-cv-01835-RGA, 1:13-cv-01836-RGA, 1:13-cv-02013-RGA(nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
TQ DELTA LLC,
Civil Action No. 13-1835-RGA
PACE PLC, et al.,
TQ DELTA LLC,
Civil Action No. 13-1836-RGA
ZHONE TECHNOLOGIES INC.,
TQ DELTA LLC,
Civil Action No. 13-2013-RGA
ZYXEL COMMUNICATIONS INC.,
I entered an opinion and order (No. 13-1835, D.I. 238 & 239) in the above that directed
that Plaintiff "needs to obtain conflicts counsel to undertake any third-party discovery of
Broadcom." Since the briefing leading up to the opinion and order had mostly been about
whether disqualification should be ordered, I did not "address the exact way in which conflicts
counsel will function." I asked the parties to "submit a status report with their prospective
proposals and supporting argument" for how this should work if they could not "agree upon a
satisfactory procedure for the operation of conflicts counsel." The parties could not, and I now
have the requested joint report with two proposed orders. (No. 13-1835, D.I. 240).
The parties do not cite much relevant caselaw, but they do cite three cases addressing the
issue of how conflicts counsel should work, in more-or-less analogous circumstances.
In Sykes v. Matter, in which the conflict existed because one side's expert witness was a
former client of the other side's attorney, the Court held that the Rule 1.9 conflict was resolved
by the use of conflicts counsel because "there is no risk to either client if outside counsel is
retained to conduct the deposition [of the former client] and his examination at trial, if
necessary." 316 F.Supp.2d 630, 636 (M.D. Tenn. 2004). Relatively-speaking, this was a fairly
easy solution, because the new case's merits were unrelated to the former representation.
In Wal-Mart Stores, Inc. v. Vidalakis, which involved a real estate transaction,
defendant's counsel had long represented Wal-Mart in real estate transactions, although not the
one at issue. 2007 WL 4468688 (W.D. Ark. Dec. 17, 2007). Defendant's counsel hired an
unrelated law firm, which would be walled off, "to take the depositions and handle all discovery
matters related to Wal-Mart," and Wal-Mart "object[ed] to the level of participation that
[defendant's conflicted counsel] propose[d] to have with regard to advising and consulting with
the [unrelated] counsel regarding discovery requests and the formulation of deposition
questions." Id. at *3. The Court noted that "the use of outside, independent counsel to handle
the depositions, discovery exchange, and all trial issues involving Wal-Mart is the most
reasonable solution," and that the "properly erected ... wall will require that the [unrelated] firm
have absolutely no exposure to any information of any kind relating to [conflicted counsel's]
prior representation of Wal-Mart, or any information obtained therefrom." Id. at *4, *5.
In High Point SARL v. Sprint Nextel Corp., the Court had issued an order requiring
conflicts counsel "to handle any discovery that may be directed at [the concurrent client], and
[conflicted counsel] shall have no involvement in that discovery whatsoever." 2011 WL 147527,
*3 (D.Kan. Jan. 18, 2011). The parties disagreed about what this order meant. The Court then
clarified: "[conflicted counsel] cannot cross-examine a [client's] witness, [conflicted counsel]
cannot serve a subpoena on [client], and [conflicted counsel] cannot take any other discovery
action directed at [client]." Id. The Court further noted, "nothing ... prohibits [conflicted
counsel] from reading testimony given by [client] or from reviewing documents provided by
[client] or related to [client]." Id.
In light of these decisions, and my prior opinion, I think conflicts counsel in this case
should be walled off from the McAndrews firm. Conflicts counsel need not be walled off from
local counsel. Conflicts counsel may be provided with any and all (unredacted) filings on the
docket. They may be further provided with any discovery served or received to date, including
any infringement or validity contentions. Further, to the extent Plaintiff has any relevant written
expert (including consulting expert) opinions, they may be provided to conflicts counsel. On the
other hand, conflicts counsel does not get any tutorial from McAndrews, and does not get any
draft Broadcom discovery. Conflicts counsel, if it needs expert advice beyond that identified
above, will need to obtain its own expert(s). Conflicts counsel will need to formulate its own
discovery requests to Broadcom, but is not prohibited from copying discovery requests already
made to the parties or to other third parties. Conflicts counsel will need to serve any Broadcom
subpoenas, deal with any Broadcom counsel, take any Broadcom depositions, and collect any
Broadcom documents. Any discovery obtained by conflicts counsel may be provided to local
counsel, and local counsel may provide the discovery to McAndrews. McAndrews may decide
which discovery to provide to its experts, and which discovery to use at trial. The wall will
continue at least through the close of discovery, but, it seems to me, it will have to be relaxed at
some point before trial, since McAndrews will need to be in charge of trying Plaintiffs case. 1 If
any Broadcom witnesses appear at trial, however, any examination (or, more likely, crossexamination) will need to be done by conflicts counsel.
I think the above provides a reasonable and practical solution to the complexity that now
exists. Broadcom's proposal in the joint report would, in my opinion, essentially be unworkable.
Plaintiffs proposal in the joint report does not sufficiently embrace the concept of a wall.
I have tried to resolve the disputes in the joint report. The parties are directed to meetand-confer, and to the extent there are gaps or ambiguities in the procedures set forth above,
submit a further status report identifying them, with proposed resolutions.
IT IS SO ORDERED this 2_ day of January 2017.
The wall will continue until further court order. Trying to predict exactly how things
will play out is probably not a good idea right now. Thus, I would prefer to revisit the details
some time after the close of discovery.
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