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Hibu Inc. v. Peck

United States District Court, D. Kansas

November 6, 2017

HIBU, INC., Plaintiff,
CHAD PECK, Defendant.


          J. Thomas Marten, Judge.

         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.").

         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 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 plaintiffs 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 ...

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