LANARD TOYS LIMITED v. TOYS "R" US-DELAWARE,INC. et al

Filing 202

ORDER denying 176 Toys "R" Us-Delaware, Inc.'s motion to disqualify counsel; denying 178 Lanard Toys Limited's motion for oral argument and an evidentiary hearing; granting in part and denying in part 197 TRU's disc overy motion; and denying 201 Lanard's request for expenses incurred in responding to the discovery motion. Gordon & Rees must provide TRU the memorandum and unredacted billing records by December 30, 2016. The Court directs the clerk to reope n the case and directs the parties to file an amended joint case management report and any motion to maintain the unredacted version of this order under seal by January 27, 2017. Signed by Magistrate Judge Patricia D. Barksdale on 12/16/2016. (BGK)

United States District Court
Middle District of Florida
Jacksonville Division
LANARD TOYS LIMITED,
Plaintiff/Counter-Defendant,
v.

NO. 3:15-cv-849-J-34PDB

DOLGENCORP LLC ETC.,
Defendants/Counterclaimants.

Order
Four months after lawyers with Gordon & Rees Scully Mansukhani LLP
(“Gordon & Rees”) began representation of Lanard Toys Limited (“Lanard”) against
Toys “R” Us-Delaware, Inc. (“TRU”), in this Florida federal case, other lawyers with
Gordon & Rees began representation of TRU in a California state case. Upon
discovering the conflict of interest and failing to get the lawyers to withdraw in this
case, TRU filed a motion seeking disqualification. Docs. 176, 176-1, 176-2, 187, S190,
S190-1, S191. Lanard opposes the motion and requests oral argument and an
evidentiary hearing to present testimony of an ethics expert. Docs. 178, 181, 181-1,
181-2, 181-3, 192, 192-1. TRU contends neither is necessary. Docs. 186, 186-1, 186-2.
At the Court’s request, Lanard supplemented its response to clarify factual matters.
Docs. 193, 194, 194-1, 194-2, 194-3, 194-4, 195, S196, S196-1, S196-2, S196-3, S1964. Upon receipt of supplemental declarations, TRU filed a motion to compel discovery
of related documents. Docs. 197, 197-1. Lanard opposes the motion. Docs. 200, 200-1.
Facts
Lanard is suing TRU and others for alleged copyright infringement, patent
infringement, trade-dress infringement, and unfair competition based on the

development, marketing, and sale of an allegedly infringing children’s chalk holder
that looks like a giant pencil. Doc. 103.
Lanard filed the initial pleading in the United States District Court for the
District of New Jersey in March 2014. Doc. 1. Then, it was represented by Lerner,
David, Littenberg, Krumholz & Mentlik, LLP. Doc. 1 at 17. That court transferred
the case here in June 2015. Docs. 92, 93. Gordon & Rees replaced the Lerner firm as
Lanard’s counsel in August 2015. Docs. 100, 101. Due to “human error,” an unnamed
Gordon & Rees staffer input into its conflict-tracking system only one of the three
defendants in this case—not TRU. 1 Doc. 168 at 29; Doc. 181-1 at 4; Doc. 181-2 at 4.
Eric Thompson and Robin Symons with Gordon & Rees’s Miami office and
Holly Heffner and Richard Sybert with Gordon & Rees’s San Diego office appeared to
represent Lanard in this case. Docs. 100, 106, 108, 109, 130, 131. Mr. Thompson and
Ms. Symons are members of the bar of this Court; Ms. Heffner and Mr. Sybert were
specially admitted to represent Lanard in this case. Docs. 109, 131.
Mr. Sybert is the co-chair of Gordon & Rees’s intellectual property group. Doc.
176-1 at 6. He has represented Lanard for more than three decades and once served
as general counsel and vice president of its United States subsidiary. Doc. 194-4 ¶ 4.
Ms. Heffner is also in Gordon & Rees’s intellectual property group. Doc. 187 at 4 n.4.
In November 2015, a few months after the Gordon & Rees lawyers appeared
in this case, the State of California named as defendants TRU and other retailers in
People of the State of Cal. v. Intelligender LLC etc., No. 37-2012-00085040-CU-BTCTL, a case pending in the Superior Court of the State of California, County of San
1One

Gordon & Rees lawyer explained the conflict-input mistake differently,
pointing to a failure to input TRU into Gordon & Rees’s conflict-tracking system in
the other case: “And it was simply a clerical error why that [TRU] didn’t come up in
that conflict search. You know, a dozen defendants, apparently they just weren’t
entered. So it was a clerical error.” Doc. 168 at 14−15. He appears to have been
mistaken about the mistake.
2

Diego, since November 2012. Doc. 176-2 ¶ 1. There, the State of California alleges
violations of California’s Business and Professions Code through unfair competition
and false advertising concerning urine-based gender-prediction tests. Doc. 181-1 ¶ 2;
Doc. 181-2 ¶ 2. The Texas firm Palter Stokley Sims PLLC and Gordon & Rees had
been representing the main defendant and its representatives in the California case
when the retailer defendants were named. Doc. 176-2 ¶ 3; Doc. 194-2 ¶ 4.
Some of the retailer defendants in the California case, including TRU, sought
indemnification from the main defendant. Doc. S196-1 ¶ 3; Doc. S196-2 ¶ 3. On
December 8, 2015, Kimberly Sims, a lawyer with the Palter firm, asked Tom Watson,
the managing partner of Gordon & Rees’s San Diego office, to run a conflicts check
regarding the retailers. Doc. 187 at 4 n.4; Doc. S191 at 3; Doc. S196-1 ¶ 3; Doc. S1962 ¶ 3. The next day, Ms. Sims informed Mr. Watson that all of the retailers wanted
Gordon & Rees to file answers for them in the California case. Doc. S196-1 ¶ 3;
Doc. S196-2 ¶ 3. On December 14, Timothy Branson, a lawyer in Gordon & Rees’s
commercial litigation group, advised Ms. Sims that Gordon & Rees was “working
through several matters that may still be open and adverse to some of these retailers.”
Doc. S191 at 5. The next day, he advised her the conflicts check had cleared for all
but one retailer—not TRU—and Gordon & Rees could represent the retailers to file
answers. Doc. 187 at 4 n.4; Doc. S196-1 ¶ 3; S196-2 ¶ 3; Doc. S191 at 4.
On December 16, an unnamed Gordon & Rees associate prepared an
undisclosed legal memorandum analyzing defenses for all of the retailers, including
TRU. Doc. S196-1 ¶ 4; Doc. S196-2 ¶ 5; Doc. 197 at 2.
On December 28, Ms. Sims emailed Elizabeth Irwin, in-house counsel for TRU,
a draft answer for review. Doc. S191 at 39, 41−56. On December 29, Ms. Sims emailed
Messrs. Branson and Watson and asked if anyone from Gordon & Rees was available
to file TRU’s answer on December 31. Doc. S191 at 13. Later that day, Ms. Sims
emailed Mr. Watson a draft answer reflecting TRU’s revisions. Doc. S191 at 16; Doc.
S196-1 ¶ 4; Doc. S196-2 ¶ 5. The next day, Mr. Watson emailed Ms. Sims stating,
3

“Attached are our edits to the [TRU] Answer” and explaining that TRU would need
an officer to sign the answer. Doc. S191 at 33; Doc. S196-1 ¶ 4; Doc. S196-2 ¶ 5. That
same day, Ms. Sims informed Ms. Irwin that the Palter firm had selected Gordon &
Rees as local counsel and Gordon & Rees lawyers had begun work on the answer. 2
Doc. 176-2 ¶ 3. On December 31, Ms. Sims emailed Mr. Watson TRU’s verification
and the final version of the answer, and Gordon & Rees filed it. 3 Doc. S191 at 57, 94.
The first firm on the signature block of the answer is Gordon & Rees, and,
under that, the names of three of its lawyers (Kevin Alexander, Mr. Branson, and Mr.
Watson) and the signature of one of them. Doc. S191 at 92.
Gordon & Rees sent no engagement letter to TRU. 4 Doc. 168 at 27−28; Doc.
176-2 ¶ 6. Gordon & Rees performed no work for TRU after December 31. Doc. 194-1
¶ 5; Doc. 194-2 ¶ 6. No one from Gordon & Rees had any direct contact with TRU
concerning the answer or any other aspect of the California case (until events
underlying the current disqualification motion). Doc. 194-1 ¶ 3; Doc. 194-2 ¶ 3. For
December 29 to 31, Gordon & Rees billed 2.7 hours for services for TRU in the
California case, including for work described as helping to prepare the answer,
reviewing and editing the answer, and preparing and reviewing a memorandum
concerning “strategies” for the answer. Doc. S190-1. Because Gordon & Rees
represents others in the California case, it redacted most December 2015 entries in

2To

appear as counsel pro hac vice, Rule 9.40 of the California Rules of Court
requires association with an active member of the State Bar of California.
3Ms.

Sims’s December 31 email to Mr. Watson and the docket sheet in the
California case indicate Gordon & Rees filed the answer for TRU on December 31;
declarations by Gordon & Rees lawyers state December 30. Doc. 194-1 ¶ 4; Doc. 1942 ¶ 5. The exact date is immaterial.
4The

reason Gordon & Rees never sent an engagement letter to TRU has not
been explained; Mr. Sybert said only, “I imagine there’s no retainer letter because
this has been the most minor of representations which has now ceased and was
technical, if anything.” Doc. 168 at 28.
4

the billing records provided to TRU and the Court, including any entry for the legal
memorandum prepared by an associate on December 16. See Doc. S190-1.
TRU disclosed confidential information to lawyers with the Palter firm with
the expectation it would be discussed by the entire defense team for the California
case, including lawyers with Gordon & Rees. Doc. 176-2 ¶ 12.
Almost two months later, on February 22, 2016, Ms. Irwin realized the conflict
when reviewing draft interrogatory responses for the California case that included
“Gordon & Rees” on each page. 5 Doc. 168 at 27; Doc. 176-2 ¶ 9. She left a message
with Mr. Alexander. Doc. 194-1 ¶ 2; Doc. 194-2 ¶ 2. Mr. Branson returned the call.
Doc. 194-1 ¶ 2. She advised him of this case and the conflict. Doc. S196-1 ¶ 2. He
immediately reported the conflict to Mr. Watson. Doc. S196-1 ¶ 2; Doc. S196-2 ¶ 2.
Before then, no Gordon & Rees lawyer working on the California case had known
about this case. 6 Doc. 194 at 1; Doc. S196-1 ¶ 2; Doc. S196-2 ¶ 2.
Ms. Irwin also contacted Lewis Anten, lead outside counsel for TRU in this
case. Doc. 176-1 ¶ 3; Doc. 176-2 ¶ 10. By letter dated and emailed February 22, 2016,

5Mr.

Branson explains that because Gordon & Rees was local counsel of record
for TRU in the California case on February 22, 2016, the Palter firm would have had
its permission to include its name on any draft discovery requests even if Gordon &
Rees had not prepared them. Doc. 194-1 ¶ 5.
6In

one discovery request in this case, Lanard asked TRU to produce all
documents and communications “sufficient to identify” all cases in the last decade in
which it has been accused of infringement or has accused someone else of
infringement of intellectual property rights connected to toys. Doc. 148-5 at 21. At the
January 2016 oral argument on discovery motions in this case, Ms. Symons indicated,
“just in what we have been able to learn through PACER, we have over 61 litigations
and so forth.” Doc. 157 at 17−18. In its supplement, Lanard explains it did not
discover the California case during its PACER search because PACER covers only
federal cases. Doc. 194 at 2−3. The Court assumes from that response that Gordon &
Rees did no equivalent “unfair competition” research on state cases against TRU in
California courts that would have alerted its lawyers working on this case to the
California case.
5

Mr. Anten informed Mr. Sybert of the conflict and demanded Gordon & Rees cease
all actions against TRU in this case. Doc. 176-1 at 8−9.
Before receiving Mr. Anten’s letter, Mr. Sybert had not known about the
California case. Doc. 194-4 ¶ 2. Because Mr. Anten has represented toy companies in
Southern California for years, Mr. Sybert believes Mr. Anten is “well aware” of Mr.
Sybert’s “deep knowledge and relationship” with Lanard. Doc. 194-4 ¶ 4.
Mr. Sybert emailed, “I find no merit or basis to your letter or its demands,
which accordingly are rejected.” Doc. 176-1 at 20. He stated that Gordon & Rees had
served only as local counsel in the California case, had had no direct contact with
TRU, and had only finalized and filed the answer for TRU at the direction of the
Palter firm. Doc. 176-1 at 20. He indicated that, for the California case, Gordon &
Rees would seek a waiver from TRU or withdraw from representing TRU and would
continue to press discovery and motions against TRU in this case. Doc. 176-1 at 20.
Mr. Anten left Mr. Branson a voice message to discuss the conflict. Doc. 176-1
¶ 9. Mr. Sybert emailed, “I understand you placed a call and left a message for my
partner … seeking to discuss this matter. As advised …, we are attending to it and
your involvement is not required. Your call will not be returned. … You failed to pick
up the Lanard document production which was timely made yesterday …. I anticipate
that you will claim production was not made. Any such claim would be intentionally
false. The production remains available at your disposal.” Doc. 176-1 at 22−23.
By email, Mr. Anten replied, “Are you the responsible partner of your Firm
handling the conflict matter? … I don’t understand how you can say I don’t need to
be involved when I am the lawyer for TRU. Are you intending to communicate directly
with my client?” Doc. 176-1 at 22. Mr. Anten added that he was withdrawing notices
of depositions of the inventors of Lanard’s chalk holder until the conflict could be
resolved. Doc. 176-1 at 22.

6

By email, Mr. Sybert responded, “I have made explicitly clear to you that we
are substituting out of the [California case], in which for a single ministerial pleading
matter we acted as local counsel and have had no direct contact whatsoever with
TRU. This is simply a mechanical process, as you are well aware.” Doc. 176-1 at 22.
He contended, “There is no conflict, certainly none that has any bearing on either
case nor one that calls for ‘disqualification.’ Again, you are transparently trying to
use this improperly for litigation advantage.” Doc. 176-1 at 22. He threatened that if
Mr. Anten cancelled the depositions, Lanard would not voluntarily produce the
inventors again. Doc. 176-1 at 22, 29, 36. He added, “We didn’t ‘sue one of our current
clients.’ A party we’ve sued asked us, through their lead counsel, to act as a local mail
drop for a single pleading. We have no ‘ethical dilemma’ but are withdrawing anyway.
… It would be so refreshing if you guys would just play it straight for once, but I see
no prospect of that happening.” Doc. 176-1 at 25.
Within days of Mr. Anten’s letter demanding cessation of acts against TRU in
this case and with no consent from TRU, Gordon & Rees filed a motion in the
California case asking to be relieved as TRU’s counsel. Doc. 181-1 ¶ 4. To support the
motion, Mr. Branson represented that Gordon & Rees “was recently retained as local
counsel for TRU at TRU’s request” and Gordon & Rees “merely filed an answer
provided by lead defense counsel.” Doc. 176-2 at 7.
Meanwhile, TRU asked this Court to stay this case pending resolution of
whether Gordon & Rees and its lawyers should be disqualified from representing
Lanard. Doc. 166. At oral argument on whether a stay was warranted, Mr. Sybert
contended the withdrawal motion in the California case was the type of motion
“granted as a matter of course, because the only thing we’ve done is basically act as
a mail drop for an answer that was drafted by the lead counsel.” Doc. 168 at 24. He
added, “It’s the most minor sort of representation one can imagine. … We were
provided with an answer for the defendants from the lead law firm in Dallas. We redlined it to conform to local practice and we filed it. That’s it.” Doc. 168 at 28, 36. To a
7

remark by TRU’s counsel in this case that discovery on the disqualification motion
may be needed, the Court responded that it would expect Lanard’s counsel to provide
all facts to decide the motion, making formal discovery unnecessary. Doc. 168 at 37.
This Court stayed this case. Doc. 167. The California court granted Gordon &
Rees’s motion to withdraw. Doc. 172 at 2; Docs. 172-1, 172-2; Doc. 181-1 at 3, 7−8;
Doc. 181-2 at 3, 7−8; Doc. 181-3 at 2. TRU filed a motion in the California case asking
that court to disqualify Gordon & Rees from representing Lanard in this case. Doc.
172-4; Doc. 176-1 ¶ 13. In June 2016, the California court denied the motion,
reasoning it lacked jurisdiction to disqualify Gordon & Rees in a case in a different
court in a different state. Doc. 188 at 3; Doc. 192-1 at 2. It emphasized its ruling
should not be construed “as an indication of the propriety” of Gordon & Rees’s
continued representation of Lanard in this case. Doc. 188 at 3; Doc. 192-1 at 2.
In a declaration to support the disqualification motion, Ms. Irwin states, “It is
believed that confidential information from or related to TRU was learned by [Gordon
& Rees] during the course of [Gordon & Rees’s] representation of TRU in the
California Case, for example, but without limitation, confidential information
relating to TRU’s strategic approach for defending against unfair competition cases.”
Doc. 176-2 ¶ 13.
In declarations in opposition to the disqualification motion, Messrs. Branson
and Watson each state:
As local counsel, the only activity in which [Gordon & Rees] participated
on behalf of TRU in the California Case was the finalization and filing
of TRU’s answer to the complaint at the direction of the Palter Firm.
Moreover, based on my knowledge and understanding, [Gordon & Rees]
and TRU never spoke with each other prior to TRU raising the conflict
issue; there was no retention agreement entered into between the
parties and no confidential information relevant to this Case was
exchanged, nor was any confidential information relating to TRU’s
strategic approach for defending against unfair competition cases, in
general, exchanged. [Gordon & Rees’s] sole tasks with respect to TRU in
the California Case during the time of the representation w[ere] to
8

propose edits to a draft Answer for TRU that was prepared by lead
counsel, the Palter Firm, and to inform the Palter Firm that a TRU
officer had to verify it.
Doc. 181-1 ¶ 3; Doc. 181-2 ¶ 3.
In response to Lanard’s motion for an evidentiary hearing to present testimony
of an ethics expert, Mr. Anten asked Mr. Thompson for the name and anticipated
testimony of the expert, whether he had shown the expert any of TRU’s privileged
communications, and whether he sought to present the live testimony of anyone else.
Doc. 186 at 5; Doc. 186-2 at 2–7. Mr. Thompson refused to provide the information.
Doc. 186 at 5; Doc. 186-2 at 2−7.
After Lanard’s filing of the supplemental declarations, Mr. Anten emailed Mr.
Sybert asking Gordon & Rees to provide TRU with unredacted bills for any work its
lawyers had performed in the California case from December 2015 to February 2016,
the legal memorandum on defenses the Gordon & Rees associate had prepared for
the retailers, and “all other materials [that had been] generated, received or reviewed
by [Gordon & Rees] during the period [Gordon & Rees] represented TRU.” Doc. 197
at 1−2. Mr. Sybert emailed back, “You will receive appropriate service copies of
filings. To the extent your email seeks anything else, it is rejected.” Doc. 197-1 at 2.
Arguments
TRU argues this Court should disqualify Gordon & Rees and its lawyers from
continuing to represent Lanard against TRU in this case (and revoke the pro hac vice
admissions of Ms. Heffner and Mr. Sybert) based their violation of Rule 4-1.7 of the
Rules Regulating The Florida Bar. Doc. 176 at 1. TRU contends they breached their
duty of undivided loyalty to their client and compounded the problem by responding
cavalierly to the conflict, treating their client antagonistically when its counsel in this
case asked them to cease prosecuting this case against it, accusing their client and
its counsel in this case of engineering the conflict while admitting that their own
mistake caused it, accusing their client and its counsel in this case of harassing them
9

in response to emails regarding the conflict, blurring lines by having Mr. Sybert—
involved in this case—respond regarding the California case, dropping their client
like a “hot potato” in the California case, continuing to vigorously pursue this case
against their own client (including by insisting on moving forward with depositions
of the inventors and refusing to join the request to stay this case pending a resolution
of the conflict), misrepresenting the extent of their representation of their client in
the California case, and refusing to provide their client information about the work
they had performed on its behalf in the California case. Doc. 176 at 2–3, 6–9, 18–19;
Doc. 197 at 2−3.
TRU contends that withdrawing from representing TRU in the California case
did not cure the conflict and that disqualification is mandated based on a mere finding
that Gordon & Rees and its lawyers violated Rule 4-1.7 or based on a balancing of
interests. Doc. 176 at 3–4, 13–20. TRU asserts Ms. Irwin’s belief that they learned
confidential information based on TRU’s disclosure of confidential information to the
Palter firm with the expectation the Palter firm would share it with the entire defense
team, explains it “does not want confidential information it shared with the Palter
firm used against it by its former attorneys in this case,” and contends it “should not
be in a position where this is a concern.” Doc. 176 at 7, 17−18.
Lanard does not dispute that Gordon & Rees and its lawyers violated Rule 41.7 or that the conflict is imputed to all Gordon & Rees lawyers. 7 See generally Doc.
181. Instead, it argues this Court should allow them to continue representing Lanard
in this case under the “federal approach,” which requires not mandatory
disqualification but a balancing of interests that considers the purpose of the violated
rule. Doc. 181 at 5, 8–11. It argues the balancing favors allowing Gordon & Rees and

7If

one lawyer in a firm has a conflict of interest, the conflict is imputed to all
lawyers in the firm, subjecting the entire firm to disqualification. United States v.
Campbell, 491 F.3d 1306, 1311 (11th Cir. 2007); Am. Can Co. v. Citrus Feed Co., 436
F.2d 1125, 1128–29 (5th Cir. 1971).
10

its lawyers to stay in this case because it did nothing wrong, the violation was caused
by an inadvertent “human” error, Gordon & Rees’s lawyers acted fast to fix the
conflict by quickly filing the withdrawal motion in the California case, the Palter
firm—not TRU—had not selected Gordon & Rees to represent it in the California
case, the two cases are “entirely unrelated,” Gordon & Rees’s lawyers obtained no
confidential information pertinent to this case or TRU’s strategic approach to
defending against unfair-competition claims, Gordon & Rees’s lawyers have already
expended “hundreds of hours of document review” in this case, Mr. Sybert has
represented it in many other cases, the already two-and-a-half-year-old case will be
delayed more, it has no intent to introduce evidence of the California case in this case,
TRU’s counsel is using the disqualification motion as a tactical device, and public
respect for the profession will be lessened if the device succeeds. Doc. 181 at 11–19.
In the motion for oral argument and an evidentiary hearing, Lanard contends
both “will be useful in addressing for the Court the issues raised in TRU’s Motion,
including inaccuracies asserted in that Motion (as discussed in Plaintiff’s Response
to TRU’s Motion), and so that Plaintiff can present … the testimony of an expert
witness regarding the pertinent Rules Regulating [T]he Florida Bar.” Doc. 178 at 1.
TRU responds the material facts are undisputed and the Court should not
permit Lanard to transform the matter into a “secondary case within a case,”
observing an evidentiary hearing would require depositions, with TRU’s confidential
information and strategies the primary subjects. Doc. 186 at 1–3. TRU observes,
“Lanard has not explained why an expert is needed when this Court is capable of
determining and interpreting the law and facts, including the Rules Regulating [T]he
Florida Bar.” Doc. 186 at 4−5.
In the motion to compel discovery, TRU contends it is entitled to the requested
documents because it had been Gordon & Rees’s client when they were generated.
Doc. 197 at 2−3. It observes Gordon & Rees has provided only “heavily redacted bills
in which over 90% of the work on the bills was concealed, including the identit[ies] of
11

the lawyers who worked on the file, the amount of time they spent, the topics on which
they worked, and the nature of the work performed.” Doc. 197 at 2. It argues the
discovery “may shed more light on the various inconsistent positions taken by
[Gordon & Rees] on the scope of the work performed by [Gordon & Rees] for TRU and
may provide additional support for why disqualification is necessary to protect”
confidences presumably passed from TRU to Gordon & Rees. Doc. 197 at 3.
Lanard responds TRU’s counsel failed to properly confer with its counsel before
filing the motion, TRU has failed to show how the documents “relate to any particular
issue” in the current motion, and the catchall request is “harassing, vague and
ambiguous, unjustifiably broad,” and seeking documents that could contain
confidential information. Doc. 201 at 1−3. Lanard contends it has no document
containing confidential TRU information. Doc. 201 at 6−7. Lanard summarily
requests expenses under Federal Rule of Civil Procedure 37(a)(5)(B) that it incurred
in having to respond to the discovery motion. Doc. 201 at 3, 7.
Law & Analysis
“[L]awyers

are

essential

to

the

primary

governmental

function

of

administering justice, and have historically been officers of the courts.” Goldfarb v.
Va. State Bar, 421 U.S. 773, 792 (1975) (internal quotation marks omitted). A court
thus has the “power and responsibility to regulate the conduct of attorneys who
practice before it.” United States v. Kitchin, 592 F.2d 900, 903 (5th Cir. 1979).
“A motion to disqualify counsel is the proper method for a party-litigant to
bring the issues of conflict or breach of ethical duties to the attention of the court.”
Musicus v. Westinghouse Elec. Corp., 621 F.2d 742, 744 (5th Cir. 1980). A party may
also or instead pursue bar disciplinary proceedings or sue for malpractice. Prudential
Ins. Co. of Am. v. Anodyne, Inc., 365 F. Supp. 2d 1232, 1237 (S.D. Fla. 2005). A court
generally will not disqualify counsel because of a conflict unless a party moves for
disqualification. In re Yarn Proc. Patent Validity Litig., 530 F.2d 83, 88 (5th Cir.
1976).
12

A disqualification motion is governed by local rules and federal common law.
Herrmann v. GutterGuard, Inc., 199 F. App’x 745, 752 (11th Cir. 2006). The movant
must prove the grounds for disqualification. In re BellSouth Corp., 334 F.3d 941, 961
(11th Cir. 2003). If a court bases disqualification on an ethical violation, “the court
may not simply rely on a general inherent power to admit and suspend lawyers,
without any limit on such power.” Schlumberger Techs., Inc. v. Wiley, 113 F.3d 1553,
1561 (11th Cir. 1997). Instead, the court must identify a rule and find the lawyer
violated it. Id.
Because a litigant is presumptively entitled to counsel of its choosing, only a
compelling reason will justify disqualification. BellSouth, 334 F.3d at 961. Because
disqualification is a “harsh sanction, often working substantial hardship on the
client,” it “should be resorted to sparingly.” Norton v. Tallahassee Mem’l Hosp., 689
F.2d 938, 941 n.4 (11th Cir. 1982). And because a disqualification motion may be used
to harass or for tactical advantage, it should be viewed with caution. Herrmann, 199
F. App’x at 752.
Disqualification is not mandatory, even if a court finds a lawyer is violating a
conflict-of-interest rule. Prudential, 365 F. Supp. 2d at 1236. Instead, a “court should
be conscious of its responsibility to preserve a reasonable balance between the need
to ensure ethical conduct on the part of lawyers appearing before it and other social
interests, which include the litigant’s right to freely chosen counsel.” Woods v.
Covington Cnty. Bank, 537 F.2d 804, 810 (5th Cir. 1976).
In undertaking the balancing, pertinent factors may include the nature of the
ethical violation, the age of the case, the prejudice to the parties, the effectiveness of
counsel in light of the violation, the public’s perception of the profession, whether the
attempt to disqualify is a tactical device or a means of harassment, and whether any
screening measures have been implemented. See Cox v. Am. Cast Iron Pipe Co., 847
F.2d 725, 731–32 (11th Cir. 1988) (considering some of those factors);

13

v. Sea Star Line, LLC, No. 3:12-CV-1180-J-32JBT, 2013 WL 5460027, at *12 (M.D.
Fla. Apr. 30, 2013) (unpublished) (same); Prudential 365 F. Supp. 2d at 1237 (same).
This Court’s Local Rules provide that the Rules Regulating The Florida Bar
govern members of this Court and lawyers specially admitted to appear before this
Court. Local Rule 2.04(d).
Rule 4-1.7 of the Rules Regulating The Florida Bar “concerns conflicts of
interests with current clients.” Young v. Achenbauch, 136 So. 3d 575, 581 (Fla. 2014).
It prohibits a lawyer from representing a client if the representation of one client will
be directly adverse to another client unless the lawyer obtains informed consent. Rule
4-1.7. “Thus, a lawyer ordinarily may not act as advocate against a person the lawyer
represents in some other matter, even if it is wholly unrelated.” Rule 4-1.7, Comment
(“Loyalty to a Client”). The rule contemplates no “mechanical” representation of a
client, see Doc. 176-1 at 22 (quoted), or “technical” representation of a client, see Doc.
168 at 28 (quoted), and does not except a lawyer serving only as local counsel.
Under Rule 4-1.7, a lawyer is ethically obligated to avoid any conflict, such as
undertaking a representation when the lawyer either knows or should know of a
conflict prohibiting the representation. Young, 136 So. 3d at 582; Public Def.,
Eleventh Jud. Cir. of Fla. v. State, 115 So. 3d 261, 267 (Fla. 2013). A lawyer may
withdraw from representation when a conflict arises after representation begins but
must decline representation if the conflict exists before representation begins. Young,
136 So. 3d at 581. The lawyer “may not avoid this rule by taking on representation in
which a conflict already exists and then convert a current client into a former client
by withdrawing from the client’s case” (the “hot potato” rule). Id.
Rule 4-1.7 is based on two principles. Hilton v. Barnett Banks, Inc., No. 941036-CIV-T24(A), 1994 WL 776971, at *3 (M.D. Fla. Dec. 30, 1994) (unpublished).
“First, a client is entitled to his lawyer’s undivided loyalty as his advocate and
champion.” Id. (internal quotation marks omitted); accord Rule 4-1.7, Comment.
14

(“Loyalty to a Client”) (“Loyalty and independent judgment are essential elements in
the lawyer’s relationship to a client.”); Chapman v. Klemick, 3 F.3d 1508, 1512 (11th
Cir. 1993) (a lawyer’s duty of loyalty to his client is “very nearly sacred”); Gerlach v.
Donnelly, 98 So. 2d 493, 498 (Fla. 1957) (a lawyer must represent a client and handle
the client’s affairs with the “utmost degree of honesty, forthrightness, loyalty and
fidelity”). “Second, a lawyer should never place himself in a position where a
conflicting interest may, even inadvertently, affect the obligations of an ongoing
professional relationship.” Hilton, 1994 WL 776971, at *3.
Here, balancing the interests and mindful that Lanard is presumptively
entitled to counsel of its choosing and disqualification is a harsh sanction to be
resorted to sparingly, disqualification is unwarranted.
By undertaking representation of TRU in the California case while
undertaking representation against TRU in this case, Gordon & Rees plainly violated
Rule 4-1.7. But an inadvertent input error—not a deliberate disregard of the duty of
loyalty—caused that violation. The case has been pending for more than two-and-ahalf years—much longer than the 12- to 18-month goal set by the Court for this type
of case, see Doc. 98 at 1—and disqualification would further delay a merits decision.
Lanard chose Gordon & Rees to represent it once the case was transferred here
presumably because of its longstanding relationship with Mr. Sybert, his expertise,
and that Gordon & Rees has an office in Florida. Lanard played no part in causing
the violation. Insofar as Gordon & Rees had undertaken “hundreds of hours of
document review” and “numerous depositions (in Florida and Tennessee),” Doc. 181
at 12, Lanard would suffer a substantial hardship by having to retain new counsel to
repeat or review that work. The Gordon & Rees lawyers did not directly communicate
with TRU or, as stated in the declarations, receive any TRU confidences. With no
sharing of TRU confidences and able counsel on both sides, the violation will not

15

diminish counsel’s effectiveness. And Gordon & Rees’s active representation of TRU
lasted less than a month, during which it was not TRU’s primary counsel. 8
Public perception of the legal profession cuts both ways. On one hand, the
public perception of the legal profession will not be negatively affected by allowing
Gordon & Rees to continue to represent Lanard in this case to the extent Lanard
lacks culpability, the mistake that caused the violation was inadvertent, Gordon &
Rees lawyers were unaware of the conflict until informed of it by Mr. Anten, and no
TRU confidences were shared with Gordon & Rees lawyers. 9 On the other hand,
public perception of the legal profession could be negatively affected by allowing
Gordon & Rees to continue to represent Lanard in this case to the extent Gordon &
Rees responded to the report of the conflict and the withdrawal request by its own
client aggressively and unapologetically in disregard of the duty of loyalty owed to
TRU as its counsel, 10 did not fully disclose to TRU, the California court, and this

8For

the argument that TRU is using the disqualification motion as a tactical
device, Lanard points to Optyl Eyewear Fashion Int’l Corp. v. Style Cos., Ltd., 760
F.2d 1045, 1048 (9th Cir. 1985), in which the Ninth Circuit upheld the imposition of
sanctions against Mr. Anten for moving to disqualify opposing counsel, finding the
motion without merit, brought solely for tactical reasons, and brought in bad faith.
Doc. 168 at 15; Doc. 181 at 13. The case is unpersuasive; it is more than 30 years old
and involves very different facts. There is no good reason to believe TRU pursued
disqualification for tactical advantage or to harass; its lawyers acted quickly and
proceeded reasonably upon confronting a clear ethical violation by opposing counsel.
9Ms.

Irwin, TRU’s in-house counsel, appears to have been the only lawyer who
had known at the outset that Gordon & Rees was representing TRU in the California
case and Lanard in this case simultaneously, though she did not realize the conflict
of interest until later. See Doc. 176-2 ¶¶ 3, 9. Gordon & Rees rightly does not make
too much of this fact; it is not the responsibility of the client to raise a conflict of
interest, The Florida Bar v. Dunagan, 731 So. 2d 1237, 1241 (Fla. 1999).
10For

Gordon & Rees’s reaction to the report of the conflict of interest and
withdrawal request, see the February 2016 email exchanges, Doc. 176-1 at 20, 22−23,
25, 29, 36.
16

Court the extent of its representation of TRU in the California case, 11 and refused to
voluntarily provide TRU with information in its possession arguably relevant to the
disqualification motion. The conflict itself was not too dismaying given the regrettable
but understandable human error that caused it to be missed at the outset. But the

11In

an email to Ms. Sims, Mr. Watson stated he was attaching Gordon & Rees’s
edits to TRU’s draft answer. Doc. S191 at 33. In Mr. Sybert’s email to Mr. Anten
concerning the conflict of interest, Mr. Sybert disclaimed any conflict, stating that
Gordon & Rees had acted as a “local mail drop for a single pleading” as part of a
“mechanical process.” Doc. 176-1 at 22, 25. At the oral argument in this case, Mr.
Sybert stated, “[T]he only thing we’ve done is basically act as a mail drop for an
answer that was drafted by the lead counsel,” and later, “It’s the most minor sort of
representation one can imagine. … We were provided with an answer for the
defendants from the lead law firm in Dallas. We red-lined it to conform to local
practice and we filed it. That’s it.” Doc. 168 at 24, 28, 36. In Mr. Branson’s and Mr.
Watson’s declarations in response to the disqualification motion, each state Gordon
& Rees’s “sole tasks” were to “propose edits” to the draft answer and inform the Palter
firm a TRU officer had to verify it. Doc. 181-1 ¶ 3; Doc. 181-2 ¶ 3. The response itself
represented that Gordon & Rees’s “only tasks with respect to TRU in the California
Action during the time of the contested representation were to propose edits to a draft
answer for TRU that was prepared by the Palter Firm and to inform the Palter Firm
that a TRU officer had to verify it.” Doc. 181 at 3. In a declaration filed in the
California case to support the withdrawal motion, Mr. Branson stated Gordon & Rees
“merely filed an answer provided by lead defense counsel.” Doc. 176-2 at 7.
In response to the Court’s request to clarify what work Gordon & Rees had
performed for TRU in light of a billing entry by Gordon & Rees for drafting and
reviewing a memorandum concerning “strategies for handling” the answer, Doc.
S190-1, Messrs. Branson and Watson each state in supplemental declarations that,
on December 16, 2015, a Gordon & Rees associate also prepared a memorandum
analyzing potential grounds for dismissal of the retailers, including TRU, from the
California case. Doc. S196-1 ¶ 4; Doc. S196-2 ¶ 5. Work on that memorandum is not
reflected in the redacted billing records Gordon & Rees provided to TRU and the
Court, which reflect entries on December 29, 30, and 31 only. See Doc. S190-1 at 9−10.
Editing a draft answer is more than just serving as a “mail drop,” participating
in a “mechanical process,” or filing an answer provided by lead counsel, even if the
editing was done to conform the pleading to local practice. Drafting a substantive
legal memorandum on defenses is more still.
From the representations to Lanard, the California court, and this Court, the
public could perceive the legal profession as inattentive at best, intentionally
misleading at worst.
17

handling of it was, making an otherwise easy decision on the disqualification motion
harder and leaving one to wonder who TRU’s local “advocate and champion” was in
the California case after the conflict alert but before court-approved withdrawal. See
Hilton, 1994 WL 776971, at *3 (quoted). Ultimately though, the factors favoring
Lanard’s position are strong enough, particularly Lanard’s lack of culpability and its
right to be represented by counsel of its choice.
Each party cites cases to support its position. Doc. 176 at 2–4, 10–16; Doc. 181
at 6–13; Doc. 187 at 8. Each party contends the other side’s cases are factually
distinguishable. Doc. 176 at 16–17, 21; Doc. 181 at 14–19; Doc. 187 at 2–8. Both
parties are correct. Given the fact-specific nature of the balancing, discussion of all of
the cases is unwarranted.
The Court is unpersuaded by TRU’s argument that a violation of Rule 4-1.7
creates an irrefutable presumption that confidences had been shared and mandates
disqualification absent a rare happenstance exception inapplicable here. See Doc. 176
at 15−16 & 15 n.5. As the Florida Supreme Court has recognized, federal courts
undertake the balancing approach when deciding whether to disqualify lawyers
appearing before them. See Young, 136 So. 3d at 581. Eleventh Circuit cases reflect
approval of that approach and the need for a decision tailored to the circumstances.
See Bayshore Ford Truck Sales, Inc. v. Ford Motor Co., 380 F.3d 1331, 1338 (11th Cir.
2004) (district court did not abuse its discretion in denying a motion to disqualify
counsel upon finding violation of Georgia conflict-of-interest rule; counsel testified he
did not obtain or share confidential information); Tipton v. Canadian Imperial Bank
of Commerce, 872 F.2d 1491, 1499 (11th Cir. 1989) (same). Whether the Supreme
Court of Florida would use a different approach to addressing a conflict is not
dispositive; “[a]lthough highly persuasive, the decisions of the Supreme Court of
Florida are not binding upon the United States District Court for the Middle District
of Florida in interpreting the Rules Regulating [T]he Florida Bar because this court
must retain the right to interpret and apply the rules in a federal setting.”
18

Town of Ponce Inlet, 267 F. Supp. 2d 1240, 1243 (M.D. Fla. 2003) (internal quotation
marks omitted).
TRU relies heavily on the “hot potato rule.” Doc. 176 at 13−14; Doc. 187 at 1 &
n.1. Had Gordon & Rees sought to withdraw from representing Lanard in this case
to represent TRU in the California case, the rule would be more apt. The rule does
not appear to require withdrawal from representation of both the original client
(Lanard) and subsequent client (TRU) upon discovery of a conflict caused by an
inadvertent error. Even if it did, disqualification would not be mandatory, at least in
federal court. 12 See Prudential, 365 F. Supp. 2d at 1236.

12TRU

contends dropping it as a client did not “convert the analysis for
disqualification into one under the former representation rule” in Rule 4-1.9 of the
Rules Regulating The Florida Bar but adds in a footnote, without analysis,
“disqualification would also be mandated” under Rule 4-1.9. Doc. 176 at 10 n.4; Doc.
187 at 7−8.
Rule 4-1.9 provides that a lawyer who previously represented a client in a
matter may not 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.” Matters are
“substantially related” if they involve the same transaction or legal dispute or if the
current matter would involve the lawyer attacking the work that the lawyer had
performed for the former client. Young v. Achenbauch, 136 So. 3d 575, 583 (Fla. 2014).
A party seeking disqualification under Rule 4-1.9 does not have to demonstrate actual
prejudice to the former client from the later representation because the existence of
the lawyer-client relationship creates an irrebuttable presumption that confidences
were shared. Id.
Rule 4-1.9 does not apply in this case because this case is not substantially
related to the California case. Although both allege unfair competition, this case
involves an intellectual property dispute, while the California case involves a
consumer protection dispute. The pleadings in the cases reflect how different the
cases are from one another. Compare Doc. 103 (second amended complaint in this
case) with Doc. 348 in People of the State of Cal. v. Intelligender LLC etc., No. 372012-00085040-CU-BT-CTL (amended complaint in the California case).
19

TRU argues it will suffer prejudice by being forced to litigate against counsel
presumed to have learned confidences and contends uncomfortable issues “could
continue to ensnare this litigation,” like “whether Lanard would be able to introduce
evidence at trial of the California Case to show other unfair competition claims
against TRU, and whether [Gordon & Rees] could seek to elicit deposition or trial
testimony from TRU relating to other unfair competition cases.” Doc. 176 at 19.
Messrs. Branson’s and Watson’s declarations establish no TRU confidences were
obtained or shared. See Doc. 181-1 ¶ 3; Doc. 181-2 ¶ 3. The email exchanges and the
nature of Lanard’s representation of TRU in the California case corroborate those
declarations. See Doc. S191 at 13, 16, 33, 57, 94. Lanard represents it has no intent
to introduce the California case in this case, Doc. 181 at 13 n.6, and the Court will
hold it to that representation.
TRU contends Gordon & Rees’s San Diego office lacks boundaries, pointing to
Mr. Sybert’s email responding to Mr. Anten’s message to Mr. Branson concerning the
conflict, which indicates the Gordon & Rees lawyers for this case talked to the Gordon
& Rees lawyers for the California case. Doc. 176 at 8. Given that no TRU confidences
were obtained or shared, see Doc. 181-1 ¶ 3; Doc. 181-2 ¶ 3, Mr. Sybert’s interaction
with the Gordon & Rees lawyers working on the California case to address the conflict
is of no consequence.
Because the parties have provided adequate briefing on the issues presented
by the disqualification motion, denial of Lanard’s request for oral argument, Doc. 178,
is warranted. Because disqualification is unwarranted and for the reasons in TRU’s
response to Lanard’s motion for an evidentiary hearing, Doc. 186, including the
failure of Lanard’s counsel to properly confer by providing no information on what
would be presented at the requested evidentiary hearing, denial of Lanard’s request
for an evidentiary hearing, Doc. 178, is warranted.
Based on the facts in footnote 11 of this order and for the reasons in TRU’s
discovery motion, see Docs. 197, 197-1, granting TRU’s request for discovery of the
20

unredacted billing records for December 2015 to February 2016 and the legal
memorandum prepared by the Gordon & Rees associate on December 16, 2015, see
Doc. S196-1 ¶ 4; Doc. S196-2 ¶ 5, is warranted. Failure to confer is not a basis for
denying the discovery motion; the statement, “You will receive appropriate service
copies of filings. To the extent your email seeks anything else, it is rejected,” Doc. 1971 at 2, placed in context of previous interactions, does not lend itself to continued
resolution efforts without court intervention. Although Gordon & Rees has specified
no information in the documents that should not be seen by TRU (its client when they
were created) due to privilege or protection, production is limited to viewing by TRU’s
outside counsel only under the terms of the stipulated protective order, see Doc. 152.
Mindful of Federal Rule of Civil Procedure 1 (rules “should be construed,
administered, and employed by the court and the parties to secure the just, speedy,
and inexpensive determination of every case and proceeding”) and TRU’s own
position that the matter should not be transformed into a secondary case within a
case, see Doc. 186 at 1, discovery of “all other materials generated, received or
reviewed by [Gordon & Rees] during the period of time that [Gordon & Rees]
represented TRU,” see Doc. 197 at 2 (quoted), is unwarranted. If the produced
documents contain information material to the disqualification motion, TRU may
request reconsideration of the disqualification decision. Because the Court is granting
the discovery motion in large part, denial of Lanard’s request for expenses, see Doc.
201 at 3, 7, is warranted.
The Court has redacted the sentences in this order that cite the documents
filed under seal (and contain information not already on the public docket) and will
direct the clerk to file a redacted version on the public docket sheet and an unredacted
version under seal, for viewing by the parties and the Court only. However, no sealing
of this order appears necessary given the general phrasing used. Any party may file
a motion to maintain the seal by January 27, 2017. If no motion is filed by then, the
Court will order the seal lifted and the unredacted version filed on the public docket.
21

Conclusion
The Court:
(1)

denies TRU’s disqualification motion, Doc. 176;

(2)

denies Lanard’s motion for oral argument and an evidentiary
hearing, Doc. 178;

(3)

grants in part TRU’s discovery motion, Doc. 197, and directs
Gordon & Rees to provide TRU the legal memorandum and
unredacted billing records by December 30, 2016;

(4)

denies Lanard’s request for expenses incurred in responding to
the discovery motion, Doc. 201 at 3, 7;

(5)

directs the parties to file an amended joint case management
report and any motion to maintain the unredacted version of this
order under seal by January 27, 2017,

(6)

directs the clerk to file the redacted version of this order on the
public docket sheet and the unredacted version of this order under
seal, for viewing by the parties and the Court only, until further
order, and

(7)

directs the clerk to reopen the case.

Ordered in Jacksonville, Florida, on December 16, 2016.

c:

Counsel of Record

22