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Ma Mobile Ltd. v. Indian Institute of Technology Kharagpur

United States District Court, N.D. California, San Jose Division

April 4, 2014

M.A. MOBILE LTD., a limited liability company chartered in Dominica; and MANDANA D. FARHANG, Plaintiffs,
v.
INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR, an Indian Institute of Technology incorporated under the

ORDER DENYING PLAINTIFFS' MOTION FOR DISQUALIFICATION AFTER RECONSIDERATION [Re Docket No. 467]

RONALD M. WHYTE, District Judge.

Plaintiffs Mandana Farhang ("Farhang") and M.A. Mobile Ltd. (collectively "plaintiffs") move the court to reconsider its January 13, 2010 Order Denying Plaintiffs' Motion to Disqualify the law firm Orrick, Herrington & Sutcliffe LLP ("Orrick") as counsel for defendants Indian Institute of Technology Kharagpur ("IIT") and Partha P. Chakrabarti's ("Chakrabarti"). The court's prior ruling was based on the premise that Attorney Neel Chatterjee, lead counsel for defendants, did not enter into an attorney-client relationship with the defendants until after Attorney James Telfer, an Orrick attorney who represented Farhang from July 2000 to January 2001, had left the Orrick firm. Dkt. Nos. 86, 98. After the court issued its order, new facts were presented to the court showing that Attorney Chatterjee had privileged communications with defendant Chakrabarti while Attorney Telfer was still at Orrick. Dkt. No. 458-4. The court therefore granted leave to plaintiffs to file a motion for reconsideration based on new material facts. See Local Rule 7-9(b); Dkt. No. 485. After reviewing the new facts and reconsidering parties' previous submissions and the evidence, the court DENIES the motion for disqualification.

The issue of disqualification is a difficult one to resolve and the court has carefully analyzed the substantial relationship question on which the motion now turns. The parties' acrimony has led to some extreme accusations in their papers that the court finds lack support in the evidentiary record. See, e.g., Dkt. No. 473, Orrick Opp. at 23 (stating that motion to disqualify was "a baldface litigation tactic"); Dkt. No. 467, Motion to Disqualify at 23-24 (listing "facts" suggesting that Attorney Chatterjee stole information from Orrick's client files for Chakrabarti). These overstatements were not helpful in resolving this motion. Hopefully, the parties can avoid extreme rhetoric in going forward with this case.

I. BACKGROUND

A. Current Litigation

In the current lawsuit, Farhang accuses defendants of taking her intellectual property and breaching a joint venture agreement. Plaintiff alleges that she initiated discussion with defendants in May of 2003 concerning a joint business venture and they then unsuccessfully negotiated over a three-year period during which time defendants developed her invention. Plaintiff further claims that defendants then stopped communicating with her and terminated their relationship. She now sues on theories of breach of contract and fraud, among others.

B. Attorney Telfer's Prior Representation of Plaintiff

In July of 2000, Farhang retained Orrick in connection with her negotiations over an employment agreement with the company Ikonodyne. Dkt. No. 30, Telfer Decl. ¶ 3; Dkt. No. 34-1 (Engagement Letter). Attorney Jim Telfer ("Attorney Telfer") was the primary Orrick attorney who rendered services to Farhang. He signed an engagement letter on July 27, 2000 which defined the scope of representation as providing assistance "in connection with your negotiations concerning your employment agreement." Dkt. No. 34-1. The parties do not appear to dispute that the employment agreement to be negotiated would define the rights of Farhang and lkonodyne with respect to intellectual property originally invented by Brian Kenville of Ikonodyne and one of his former colleagues and in collaboration with plaintiff.

The negotiations were not successful and Telfer's representation ended in January 2001. Farhang then initiated litigation against Ikonodyne's founders using different counsel. Orrick was not involved in that litigation. The lawsuit settled in May 2003. Farhang acquired ownership rights in the intellectual property through the May 2003 settlement. Dkt. No. 31, Farhang Decl. ¶ 14.

Orrick's billing records for the period of time during which it represented Farhang reflect only work on an employment agreement and show that she was billed for a total of 19.5 hours of time: James Telfer-19 hours; Greg Schick-0.25 hours and Richard Rahm-0.25 hours. Telfer and Schick were in Orrick's Compensation and Benefits Group while Rahm was in the Employment Law Group. None of the three was still with Orrick at the time Farhang instituted the current lawsuit against IIT and Chakrabarti. Telfer left Orrick on January 14, 2008; Schick left June 8, 2007 and Rahm departed September 23, 2003. Dkt. No. 34 (Kaufman Decl.) ¶¶ 6, 7.

C. Attorney Chatterjee's 2004 and 2006 Communications with Chakrabarti

While Attorney Telfer was still employed at Orrick, Orrick Attorney Neel Chatterjee ("Attorney Chatterjee") had privileged communications with defendant Chakrabarti about plaintiff Farhang and a "business proposal." See Dkt. No. 463-4 (Dec. 31, 2013 privilege log) (Priv. 251, "email chain" between Attorney Chatterjee and defendant Chakrabarti "providing legal advice regarding business proposal" on April 8, 2006; Priv. 252, 253, August 30, 2006 email regarding same; Priv. 307-310, March 28, 2004 email "regarding potential legal assistance"); see also Dkt. No. 458-11 (Aug. 17, 2013 privilege log) (disclosing March 28, 2004 and April 2004 emails between Attorney Chatterjee and defendant Chakrabarti "regarding potential legal assistance"); see also Dkt. No. 458-4 (Nov. 6, 2012 letter from Attorney Chatterjee to the court disclosing "communications with [defendant Chakrabarti] in which he sought my legal advice regarding Ms. Farhang."). The court refers to these communications as the "Chakrabarti-Chatterjee" communications.

D. Prior Motion to Disqualify

In May 2009, Farhang, at that point proceeding pro se, filed a Motion to Disqualify Orrick. Dkt. No. 29. The basis for her motion was that the current litigation between her and IIT and Chakrabarti is substantially related to the representation provided to her by Orrick, and, therefore, Orrick should be disqualified under California's imputed conflicts rule. See Cal. R. Prof. Conduct 3-310(E).

After reviewing the parties' submissions, the court focused on whether the conflicted attorneys, prior to leaving, shared Farhang's confidential information with other attorneys in the firm or whether other attorneys had any dealings with Farhang. Dkt. No. 86. To answer this question, the court held an evidentiary hearing on January 12, 2010. See Dkt. No. 100. The court heard from five witnesses and determined that "no current Orrick attorney has confidential information material to the current litigation" Dkt. No. 98 at 3. The court therefore denied the motion to disqualify. Id. Critical to ...


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