hibu Inc. v. Peck

Filing 281

MEMORANDUM AND ORDER denying 272 hibu Inc.'s Motion to Disqualify Latham & Watkins LLP; granting 274 Motion for Attorney Joseph Serino, Jr. to Appear Pro Hac Vice; granting 275 Motion for Attorney Leah Friedman to Appear Pro Hac Vice; [276 ] Motion for Attorney Gregory S. Mortenson to Appear Pro Hac Vice pursuant to D. Kan. Rule 83.5.4 for purposes of this case only. Unless already registered, pro hac vice counsel should register for electronic notification pursuant to the court's Administrative Procedures by completing a CM/ECF Electronic Filing Registration Form at http://www.ksd.uscourts.gov/. Signed by District Judge J. Thomas Marten on 11/6/2017. (mam)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

HIBU, INC.,
Plaintiff,
v.
Case No. 16-1055-JTM
CHAD PECK,
Defendant.

MEMORANDUM AND ORDER
This matter is before the court on plaintiff Hibu Inc.’s motion to disqualify the
law firm of Latham & Watkins LLP (“Latham”) from representing defendant Chad Peck
in this litigation pursuant to Kansas Rule of Professional Conduct (“KRPC”) 1.10(a).
(Dkt. 272).

Also before the court are Latham Attorneys Joseph Serino, Jr.’s, Leah

Friedman’s, and Gregory S. Mortenson’s motions to appear pro hac vice pursuant to D.
Kan. Rule 83.5.4 and supporting affidavits. (Dkts. 274–76). For the reasons stated
below, plaintiff’s motion is denied. Messrs. Serino and Mortenson and Ms. Friedman
are granted leave to appear pro hac vice.
I.

Background

The court previously found that Kirkland’s prior representation of plaintiff in
earlier litigations was similar in nature to this action and further that Kirkland obtained
confidential information relevant to plaintiff’s business. (Dkt. 271). Because Messrs.
Leon and Huang entered their appearances on behalf of defendant while still associated
with Kirkland, disqualification was imputed to them under KRPC 1.9 and 1.10(a) due to

Kirkland’s conflict. The court did not believe that movement to a new, conflict-free law
firm removed the effect of the imputed conflict once it had attached. Conversely, Mr.
Taylor had not represented defendant in this case while at Kirkland—he first entered
his appearance after moving to Latham—thus, no conflict attached and he was allowed
to remain on the case.1 It was unclear whether plaintiff was moving to disqualify
Latham in its entirety and the court did not address that claim. Plaintiff now moves to
disqualify the entire Latham firm.
II.

Legal Standards

“The court has inherent supervisory powers to control attorneys and motions to
disqualify counsel are committed to the court’s sound discretion.” Coffeyville Res. Ref. &
Mktg. v. Liberty Surplus Ins. Corp., 261 F.R.D. 586, 589 (D. Kan. 2009). When deciding a
motion to disqualify, the court reviews the unique facts of the case and balances
competing considerations. McDonald v. City of Wichita, Kan., No. 14-1020-GEB, 2016 WL
305366, at *3 (D. Kan. Jan. 26, 2016). Such considerations include: (1) the privacy of the
attorney-client relationship; (2) the prerogative of each party to choose its own counsel;
(3) and the hardships that disqualification would impose upon the parties and the entire
judicial process. Id. The court is mindful that the parties’ arguments can be misused as
a litigation tactic or technique of harassment. Id. (“A motion to disqualify counsel
deserves serious, conscientious, and conservative treatment.”).

Latham “walled-off” Messrs. Leon and Huang. It also states that in an abundance of caution, Latham
walled-off Mr. Taylor from this case. The court has reviewed the docket sheet and does not see a notice
of withdrawal filed by Mr. Taylor. If Mr. Taylor is no longer representing defendant, then he needs to
withdraw from this case.
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2

As noted in the court’s October 5, 2017 order, KRPC 1.9 and 1.10 apply.2 KRPC
1.10 determines when a Rule 1.9 conflict is imputed to an entire law firm. Monroe v. City
of Topeka, 267 Kan. 440, 446, 988 P.2d 228, 232 (1999). “In other words, under Rule 1.10,
disqualification results from an attorney’s affiliation with a firm rather than from a
direct personal connection with the client in question.” Id. KRPC 1.10 provides, in
relevant part:
(a) While lawyers are associated in a firm, none of them shall knowingly
represent a client when any one of them practicing alone would be
prohibited from doing so by Rules 1.7 or 1.9, unless the prohibition is
based on a personal interest of the prohibited lawyer and does not
present a significant risk of materially limiting the representation of
the client by the remaining lawyers in the firm.
(b) When a lawyer has terminated an association with a firm, the firm is
not prohibited from thereafter representing a person with interests
materially adverse to those of a client represented by the formerly
associated lawyer and not currently represented by the firm, unless:
(1) the matter is the same or substantially related to that in which the
formerly associated lawyer represented the client; and
(2) any lawyer remaining in the firm has information protected by Rules
1.6 and 1.9 (c) that is material to the matter.
III.

Discussion

The court acknowledges that it previously found disqualification was imputed to
Messrs. Leon and Huang because of their association with Kirkland, and their
relocation to Latham did not remove the conflict. Nevertheless, disqualification was

2 Although the court indicated that a hearing might be necessary if plaintiff was moving to disqualify
Latham under KRPC 1.10(b), the court finds that no hearing was needed. Plaintiff claims that Latham is
automatically disqualified under KRPC 1.10(a), not (b). Furthermore, the affidavits attached to Messrs.
Serino’s and Mortenson’s and Ms. Friedman’s motions for leave to appear pro hac vice provide relevant
information regarding their personal knowledge, or lack thereof, of plaintiff and its prior litigations.

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due in part to Messrs. Leon and Huang first appearing in this case as Kirkland
attorneys. The court agreed with plaintiff that the initial conflict did not evaporate, and
there was an appearance of impropriety. But that was the extent of the conflict.
Under KRPC 1.9(a), plaintiff had to show that a Kirkland attorney represented
plaintiff in a prior matter that was substantially related to the current case and
defendant’s interests are materially adverse to plaintiff’s interests. Plaintiff met this
hurdle. And because Messrs. Leon and Huang represented defendant while associated
with Kirkland, they had a conflict.

But this conflict was imputed to them purely

because they were Kirkland attorneys, see KRPC 1.10(a), not because they acquired
confidential or material information as contemplated under KRPC. 1.9(b).
This case is distinguishable from McDonald, 2016 WL 305366 at *5. There, the
disqualified attorney personally represented the plaintiff and had personal knowledge
of confidential information, which resulted in disqualification of her new law firm
under KRPC 1.10. Id. Here, the records here show that Messrs. Leon and Huang did
not personally represent plaintiff nor were they privy to confidential information.
Therefore, the court finds that KRPC 1.9(b) does not apply to the present facts. While it
is true that Latham now contains former Kirkland attorneys, plaintiff does not allege
that any of these attorneys individually represented it in a prior litigation. Nor does
plaintiff allege that any former Kirkland attorney associated with Latham has personal
knowledge of confidential information. Thus, automatic disqualification of the entire
Latham firm is not warranted under KRPC 1.10(a).

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In their motions for leave to appear pro hac vice, Ms. Friedman and Mr.
Mortenson declare that they were never associated with Kirkland. (Dkts. 275-1, 276-1).
Mr. Serino declares the following:
1. He was previously associated with Kirkland, however, Mr. Serino
denies any involvement with plaintiff’s prior litigations or the instant
case.
2. No personal knowledge of confidential information from plaintiff
relating to the prior litigations.
3. No access to information pertaining to plaintiff’s business strategy,
business plans, business practices, historic financial data, financial
projections, product strategy, employee data, debt structure, executory
contracts, contingent obligations, and pending litigation.
4. No access to plaintiff’s policies and practices with respect to
maintaining and using confidential information, and enforcement of its
confidential information agreements with former employees.
5. No communications with plaintiff’s senior management or general
counsel,
(Dkt. 274-1). Additionally, Mr. Serino denies knowing, or even meeting, plaintiff’s
senior management or general counsel.
Based on these representations presented in the affidavits, the court finds that no
conflict exists. Messrs. Serino and Mortenson and Ms. Friedman are granted leave to
appear pro hac vice.
IT IS THEREFORE ORDERED this 6th day of November, 2017, that plaintiff’s
motion to disqualify Latham from representing defendant (Dkt. 272) is denied.

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IT IS FURTHER ORDERED that Joseph Serino, Jr.’s motion to appear pro hac
vice (Dkt. 274); Leah Friedman’s motion to appear pro hac vice (Dkt. 275); and Gregory
S. Mortenson’s motion to appear pro hac vice (Dkt. 276) are granted.

s/ J. Thomas Marten
J. Thomas Marten, Judge

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