United States District Court, D. Kansas
MEMORANDUM AND ORDER
Thomas Marten, Judge.
matter is before the court on plaintiff Hibu Inc.'s
motion to disqualify attorneys Eric Leon, Kuangyan Huang, and
Nathan Taylor from representing defendant Chad Peck, who is
employed by Dex Media, in this litigation pursuant to Kansas
Rule of Professional Conduct (“KRPC”) 1.9(a), (b)
and 1.10(a) (Dkt. 253). These three attorneys were
formerly associated with Kirkland & Ellis LLP
(“Kirkland”). Plaintiff contends that while Leon,
Huang, and Taylor were employed at Kirkland, they could not
provide conflict-free representation to defendant. Plaintiff
argues that their conflict was not removed after they
switched to Latham & Watkins LLP (“Latham”).
For the reasons stated below, plaintiff's motion is
granted in part and denied in part without prejudice.
Nature of the Case
employed defendant as a sales manager in Wichita and
surrounding markets. Both parties signed an employment
agreement on May 23, 2006.
January 2015, defendant left plaintiff's employment and
began working with Dex Media-plaintiff's direct
competitor. Based on defendant's work on Dex Media's
expansion into Wichita and other Kansas markets, plaintiff
commenced this litigation in February 2016, arguing that
defendant breached his employment agreement and tortuously
interfered with plaintiff's business expectancy.
Kirkland's Prior Representation of Plaintiff
previously represented plaintiff in a lawsuit against Mr.
Joseph Walsh, plaintiff's former Chief Executive Officer
(“CEO”), in which plaintiff sought damages and
injunctive relief against Walsh for: breach of his employment
separation agreement; improper use of plaintiff's
confidential information; making untrue, negative and
derogatory statements about plaintiff and its management;
procurement of plaintiff's confidential information by
improper means; conversion of plaintiff's confidential
information; aiding and abetting breach of fiduciary duty by
other plaintiff executives; and civil conspiracy. Plaintiff
claimed that Walsh-who is presently Dex Media's
CEO-obtained confidential material from Messrs. James
McCusker, Mark Cairns, and John Gregory, three senior
executives who were employed by plaintiff at that time.
McCusker is now the Chief Revenue Officer of Dex Media.
Gregory is a vice president of Dex Media. Cairns is, or until
recently was, Dex Media's Executive Vice President of
Operations and Client Services.
Kirkland's representation of plaintiff in the Walsh
matter, Kirkland had extensive communications with
plaintiff's senior management and worked closely with its
general counsel. Kirkland investigated Walsh's conduct
and provided guidance as to the conduct of interviews by
plaintiff of potential witnesses, including McCusker and
also defended plaintiff in McCusker's (plaintiff's
former president) and Cairns's (plaintiff's former
Chief Operations Officer) lawsuits against plaintiff for
defamation and violation of Pennsylvania's wage law.
These lawsuits followed plaintiff terminating McCusker's
and Cairns's employment for providing confidential
information to Walsh and for other reasons.
fourth matter, Kirkland served as U.S. counsel to plaintiff
and Hibu Group in connection with their financial
restructuring. In the course of that representation, Kirkland
was given access to and reviewed highly confidential,
proprietary, and commercially sensitive information,
including 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.
claims that Leon's practice group at Kirkland handled the
Walsh, McCusker, and Cairns cases. Specifically, at least 15
attorneys from both Kirkland's Chicago and New York
offices were involved in the Walsh litigation generating over
$920, 000 in legal fees. Approximately eight Kirkland
attorneys were involved in the McCusker and Cairns matters,
and generated over $215, 000 in legal fees. Kirkland withdrew
from representing plaintiff in the McCusker and Cairns
matters in late 2014. The McCusker and Cairns cases were
pending when this current litigation commenced. In the
financial restructuring matter, more than 30 Kirkland
attorneys were involved, and Kirkland received over $3, 200,
000 in legal fees.
April 4, 2017, Leon and Huang were attorneys with Kirkland,
and were admitted pro hac vice to represent defendant against
plaintiff in this case. One day later, plaintiff advised
Kirkland that it objected to its representation of defendant.
According to plaintiff, Kirkland referred the matter to its
internal committee, and subsequently informed plaintiff that
it would withdraw from this case on April 9, 2017. On May 17,
2017, approximately five weeks later, Leon and Huang both
filed notices of their withdrawal as counsel for defendant.
Leon and Huang withdrew from representing defendant, they
joined Latham and again moved to appear pro hac vice on July
7, 2017. Taylor, also associated with Latham, moved
to appear pro hac vice. Magistrate Judge James granted all
three motions on July 10, 2017.
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 ...