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Sunbeam Products Inc. v. Oliso, Inc.

United States District Court, N.D. California

March 4, 2014

SUNBEAM PRODUCTS INC., d/b/a JARDEN CONSUMER SOLUTIONS, Plaintiff,
v.
OLISO, INC., Defendant.

ORDER GRANTING MOTION TO DISQUALIFY OLISO'S COUNSEL

SUSAN ILLSTON, District Judge.

Now before the Court is plaintiff's motion to disqualify defendant's counsel. The motion is scheduled to be heard on March 7, 2014. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument and hereby VACATES the hearing. For the reasons below, the Court hereby GRANTS plaintiff's motion.

BACKGROUND

This motion arises out of a declaratory judgment action brought by Sunbeam Products, Inc. ("Sunbeam") against Oliso, Inc. ("Oliso"), alleging that Oliso sells a product that infringes Sunbeam's Patent No. 7, 003, 928 B2 ("the 928 patent"). The 928 patent, titled "Appliance for Vacuum Sealing Food Containers, " was issued on February 28, 2006. Compl. ¶ 6.

Sunbeam is a manufacturer of consumer appliances including, among others, the FoodSaver®, a vacuum sealing machine. Declaration of Victor Michels in Support of Sunbeam's Motion to Dis-qualify Oliso's Counsel ("Michels Decl.") ¶¶ 4-5. Prior to June 30, 2006, FoodSaver® was manufactured and sold by Tilia International, Inc. ("Tilia"). Id. ¶ 4. From 1998 until at least 2004, Kenneth Wilson represented Tilia in myriad patent litigation matters involving Tilia's vacuum packaging technology patents. See Declaration of Kenneth B. Wilson in Opposition to Sunbeam's Motion to Disqualify Oliso's Counsel ("Wilson Decl.") ¶ 2. Mr. Wilson continued to represent Tilia regarding non-vacuum sealing patents until at least May, 2006, although it is disputed whether his representation after 2004 still pertained to the vacuum sealing patents. Compare Michels Decl. ¶ 8, with Wilson Decl. ¶ 6. It is undisputed that, for a number of years, Mr. Wilson was lead counsel for Tilia, he "played significant roles in [its] lawsuits; he executed and filed numerous substantive pleadings on behalf of Tilia...; [and] he was directly involved in Tilia's litigation strategy and settlement strategy, as well as licensing discussions...." Defendant Oliso, Inc.'s Opposition to Sunbeam's Motion to Disqualify Oliso's Counsel at 2.

On June 30, 2006, Tilia and Sunbeam merged, and Tilia ceased to exist as a corporate entity. Michels Decl. ¶ 6. Also in June, 2006, Sunbeam acquired the 928 Patent from a third party. On August 1, 2013, Sunbeam brought the instant action against Oliso, alleging infringement of the 928 Patent. In January, 2014, Victor Michels, Sunbeam's in-house counsel, recognized Mr. Wilson "as possibly being the same attorney who had represented Tilia, and with whom [he] had had numerous attorney-client and work product privileged discussion in connection with Tilia's patent enforcement efforts." Michels Decl. ¶ 10. Sunbeam's counsel investigated the matter and determined that Mr. Wilson was indeed the same attorney who had represented Tilia for eight years. Id.

Sunbeam now moves to disqualify Oliso's counsel, alleging a violation of California Rule of Professional Conduct 3-310(E).

LEGAL STANDARD

1. Disqualification Generally.

Whether to disqualify counsel is a matter firmly committed to the district court's discretion. See Gas-A-Tron of Ariz. v. Union Oil Co. of Calif., 534 F.2d 1322, 1325 (9th Cir. 1976). Civil Local Rule 11 instructs that all attorneys before the Court must "comply with the standards of professional conduct required of the members of the State Bar of California." N.D. Cal. Civil L.R. 11-4(a)(1). Therefore, the Court applies California law in this matter. See Certain Underwriters at Lloyd's, London v. Argonaut Ins. Co., 264 F.Supp.2d 914 (N.D. Cal. 2003).

"Motions to disqualify counsel are strongly disfavored." Visa U.S.A., Inc. v. First Data Corp., 241 F.Supp.2d 1100, 1104 (N.D. Cal. 2003). However, the Court's "paramount concern must be the preservation of public trust both in the scrupulous administration of justice and in the integrity of the bar." State Farm Mut. Auto. Ins. Co. v. Federal Ins. Co., 72 Cal.App.4th 1422, 1428 (Cal.Ct.App. 1999). When reviewing a motion to disqualify counsel, the Court must "make a reasoned judgment and comply with the legal principles and policies appropriate to the particular matter at issue." Visa U.S.A., 241 F.Supp.2d at 1104 (citation and internal quotation marks omitted).

2. Disqualification Due To Successive Representation.

California Rule of Professional Conduct 3-310(E) governs attorneys' duties regarding successive representation. It states:

A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has ...

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