Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Western Sugar Coop. v. Archer-Daniels-Midland Co.

United States District Court, C.D. California

February 13, 2015

WESTERN SUGAR COOP., ET AL., Plaintiffs,
v.
ARCHER-DANIELS-MIDLAND CO., ET AL., Defendants

Page 1075

[Copyrighted Material Omitted]

Page 1076

For Western Sugar Cooperative, a Colorado cooperative, Minn-Dak Farmers Cooperative, a North Dakota Cooperative Association, The Amalgamated Sugar Company LLC, a Delaware limited liability company, The American Sugar Cane League of the USA Inc, a Louisiana Non-Profit corporation, United States Sugar Corporation, a Florida corporation, Plaintiffs: Adam R Fox, LEAD ATTORNEY, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; David S Elkins, LEAD ATTORNEY, Squire Patton Boggs U.S. LLP, Palo Alto, CA; Eugene R Egdorf, W Mark Lanier, PRO HAC VICE, The Lanier Law Firm PC, Houston, TX; John A Burlingame, PRO HAC VICE, Squire Patton Boggs U.S. LLP, Washington, DC.

For Michigan Sugar Company, a Michigan corporation, Imperial Sugar Corporation, a Texas corporation, Plaintiffs: Adam R Fox, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; David S Elkins, Squire Patton Boggs U.S. LLP, Palo Alto, CA; Eugene R Egdorf, W Mark Lanier, PRO HAC VICE, The Lanier Law Firm PC, Houston, TX; John A Burlingame, PRO HAC VICE, Squire Patton Boggs U.S. LLP, Washington, DC.

For C and H Sugar Company, Inc., a Delaware corporation, Plaintiff: David S Elkins, LEAD ATTORNEY, Squire Patton Boggs U.S. LLP, Palo Alto, CA; Adam R Fox, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; Eugene R Egdorf, W Mark Lanier, PRO HAC VICE, The Lanier Law Firm PC, Houston, TX; John A Burlingame, PRO HAC VICE, Squire Patton Boggs U.S. LLP, Washington, DC.

For American Sugar Refining Inc, a Delaware corporation, Plaintiff: Adam R Fox, LEAD ATTORNEY, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; David S Elkins, Squire Patton Boggs U.S. LLP, Palo Alto, CA; Eugene R Egdorf, W Mark Lanier, PRO HAC VICE, The Lanier Law Firm PC, Houston, TX; John A Burlingame, PRO HAC VICE, Squire Patton Boggs U.S. LLP, Washington, DC.

For The Sugar Association Inc, a Delaware corporation, Plaintiff: Adam R Fox, LEAD ATTORNEY, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; David S Elkins, LEAD ATTORNEY, Squire Patton Boggs U.S. LLP, Palo Alto, CA; Marc E Masters, Mark T Drooks, LEAD ATTORNEYS, A Howard Matz, Bird Marella Boxer Wolpert Nessim Drooks Lincenberg & Rhow, Los Angeles, CA; Eugene R Egdorf, W Mark Lanier, PRO HAC VICE, The Lanier Law Firm PC, Houston, TX; John A Burlingame, PRO HAC VICE, Squire Patton Boggs U.S. LLP, Washington, DC.

For The Coca-Cola Company, Movant: Jack Baumann, Shon Morgan, LEAD ATTORNEYS, Quinn Emanuel Urquhart and Sullivan LLP, Los Angeles, CA; Christopher Tayback, Quinn Emanuel Urquhart Oliver & Sullivan LLP, Los Angeles, CA.

For Archer-Daniels-Midland Company, a Delaware corporation, Cargill, Inc., a Delaware corporation, Corn Products International, Inc., a Delaware corporation, formerly known as Ingredion Incorporated, The Corn Refiners Association, Inc., a Delaware corporation, Defendants: Bryce A Cooper, Bryna J Dahlin, Cornelius M Murphy, Dan K Webb, Stephen V D'Amore, PRO HAC VICE, Winston & Strawn LLP, Chicago, IL; Erin R Ranahan, Gail Jeanne Standish, Winston and Strawn LLP, Los Angeles, CA.

For Roquette America, Inc., a Delaware corporation, Defendants: Bryce A Cooper, Bryna J Dahlin, Cornelius M Murphy, Dan K Webb, Stephen V D'Amore, PRO HAC VICE, Winston & Strawn LLP, Chicago, IL; Erin R Ranahan, Gail Jeanne Standish, Winston and Strawn LLP, Los Angeles, CA.

For Tate and Lyle Ingredients Americas, Inc., a Delaware corporation, Defendant, Counter Claimant: Bryce A Cooper, Bryna J Dahlin, Cornelius M Murphy, Dan K Webb, Stephen V D'Amore, PRO HAC VICE, Winston & Strawn LLP, Chicago, IL; Erin R Ranahan, Gail Jeanne Standish, Winston and Strawn LLP, Los Angeles, CA; Joan Mack, Julia Jill Bredrup, Lennette W Lee, Michael J Proctor, Caldwell Leslie and Proctor PC, Los Angeles, CA; Edith R Matthai, T. John Fitzgibbons, Jr, Robie and Matthai, Los Angeles, CA.

For Squire Patton Boggs (U.S.) LLP, Objector: Edith R Matthai, T. John Fitzgibbons, Jr, Robie and Matthai, Los Angeles, CA.

For Cargill, Inc., a Delaware corporation, Archer-Daniels-Midland Company, a Delaware corporation, Corn Products International, Inc., a Delaware corporation, formerly known as Counter Claimants: Bryce A Cooper, Bryna J Dahlin, Cornelius M Murphy, Stephen V D'Amore, Winston & Strawn LLP, Chicago, IL; Dan K Webb, PRO HAC VICE, Winston and Strawn LLP, Chicago, IL; Erin R Ranahan, Gail Jeanne Standish, Winston and Strawn LLP, Los Angeles, CA.

For The Sugar Association Inc, a Delaware corporation, Counter Defendant: Adam R Fox, LEAD ATTORNEY, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; David S Elkins, LEAD ATTORNEY, Squire Patton Boggs U.S. LLP, Palo Alto, CA; W Mark Lanier, The Lanier Law Firm PC, Houston, TX.

For Ingredion Incorporated, a Delaware corporation, formerly known as Corn Products International, Inc., Counter Claimant: Bryce A Cooper, Bryna J Dahlin, Cornelius M Murphy, Stephen V D'Amore, Winston & Strawn LLP, Chicago, IL; Steven Grimes, PRO HAC VICE, Winston and Strawn LLP, Chicago, IL; Erin R Ranahan, Gail Jeanne Standish, Winston and Strawn LLP, Los Angeles, CA; Joan Mack, Julia Jill Bredrup, Lennette W Lee, Michael J Proctor, Caldwell Leslie and Proctor PC, Los Angeles, CA.

For The Sugar Association Inc, a Delaware corporation, Counter Defendant: Adam R Fox, LEAD ATTORNEY, Stacie D Yee, Squire Patton Boggs U.S. LLP, Los Angeles, CA; David S Elkins, LEAD ATTORNEY, Squire Patton Boggs U.S. LLP, Palo Alto, CA; Eugene R Egdorf, PRO HAC VICE, The Lanier Law Firm PC, Houston, TX; W Mark Lanier, The Lanier Law Firm PC, Houston, TX.

For Cargill, Inc., a Delaware corporation, Archer-Daniels-Midland Company, a Delaware corporation, Counter Claimants: Bryce A Cooper, Bryna J Dahlin, Cornelius M Murphy, Stephen V D'Amore, Winston & Strawn LLP, Chicago, IL; Dan K Webb, Steven Grimes, PRO HAC VICE, Winston and Strawn LLP, Chicago, IL; Erin R Ranahan, Gail Jeanne Standish, Winston and Strawn LLP, Los Angeles, CA.

Page 1077

ORDER GRANTING INGREDION INCORPORATED'S AND TATE & LYLE INGREDIENTS AMERICAS, INC.'S MOTION TO DISQUALIFY SQUIRE PATTON BOGGS LLP

Honorable Consuelo B. Marshall, United States District Judge.

Before the Court is Defendant/Counterclaimant Ingredion Incorporated's and Tate & Lyle Ingredients Americas, Inc.'s Motions to Disqualify Plaintiffs' counsel, Squire Patton Boggs LLP (collectively the " Motions" ). (Dkt. Nos. 232, 233.) Squire Patton Boggs LLP and Plaintiff Sugar Association oppose the Motions. (Dkt. Nos. 250, 249, 252.)

Page 1078

I. JURISDICTION

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § § 1331, 1338.

II. PROCEDURAL AND FACTUAL BACKGROUND

The underlying case arises from false advertising claims relating to the marketing of high-fructose corn syrup (" HFCS" ), pitting the sugar industry against the corn-refining industry. Plaintiffs are sugar industry manufacturers, trade groups, and associations: Western Sugar Cooperative; Michigan Sugar Co.; C & H Sugar Co., Inc.; United States Sugar Corporation; American Sugar Refining, Inc.; The Amalgamated Sugar Co., LLC; Imperial Sugar Corp.; Minn-Dak Farmers Cooperative; The American Sugar Cane League U.S.A., Inc.; and The Sugar Association, Inc. (" Sugar Association" ) (collectively the " Sugar Plaintiffs" ). (Second Am. Compl. (" SAC" ) ¶ ¶ 12-21 (Dkt. No. 55).) Defendants are manufacturers and trade groups and associations active in the corn and HFCS industry: Archer-Daniels-Midland Company (" ADM" ); Cargill, Incorporated (" Cargill" ); Ingredion Inc., formerly called Corn Products International, Inc. (" Ingredion" ); Tate & Lyle Ingredients Americas, Inc. (" Tate & Lyle" ); and The Corn Refiners Association (" CRA" ) (collectively " Defendants" ).[1] ( Id., ¶ ¶ 22-27.)

Plaintiffs, represented by the legacy law firm of Squire Sanders & Dempsey, LLP (" Squire Sanders" ), filed the instant lawsuit on April 22, 2011, and the SAC on November 21, 2011. (Dkt. No. 55.) The SAC asserts one cause of action for false advertising under the Lanham Act, alleging that Defendants misled consumers by use of the term " corn sugar." (SAC ¶ ¶ 65-75.)

On September 4, 2012, Defendants ADM, Cargill, Ingredion, and Tate & Lyle each filed a counterclaim against Plaintiff the Sugar Association. (Dkt. Nos. 85-88.) Defendants' counterclaim asserts one cause of action for false advertising in violation of the Lanham Act, alleging that the Sugar Association misrepresented HFCS as unhealthy. ( Id. ¶ ¶ 68-95.)

A. The Patton Boggs and Squire Sanders Merger

On June 1, 2014, the law firms of Patton Boggs LLP (" Patton Boggs" ) and Squire Sanders combined to form Squire Patton Boggs (" SPB" ). SPB remains the Sugar Plaintiffs' counsel of record. Ingredion and Tate & Lyle each filed motions to disqualify SPB from representing the Sugar Plaintiffs in this action because SPB is now adverse to both Ingredion and Tate & Lyle--long-standing clients of the legacy firm Patton Boggs.

B. Patton Boggs' and SPB's Representation of Tate & Lyle

Tate & Lyle is a global provider of food products that specializes in processing corn-based products, including HFCS. (Castelli Decl. ¶ 2.) Tate & Lyle entered into an attorney-client relationship with Patton Boggs in or about February 1998, as documented in a letter dated February 11, 1998, signed by Stuart Pape of Patton Boggs (the " 1998 Engagement Letter" ). ( Id. ¶ 3, Ex. 1.)

Tate & Lyle has relied on multiple lawyers at Patton Boggs for legal advice on a wide range of matters since 1998 and through the merger in June 2014. (Castelli Decl. ¶ 4.) Patton Boggs has represented Tate & Lyle before international regulatory bodies and federal agencies, such as the

Page 1079

Food and Drug Administration (" FDA" ), the United States Department of Agriculture, and the United States Customs Service. ( Id.) Tate & Lyle's counsel declares that Patton Boggs' lawyers advised Tate & Lyle on matters that required a thorough understanding of its business operations, including its operations and processing of ingredients such as HFCS. ( Id.)

1. Tate & Lyle Bring the Conflict to SPB's Attention

In late July 2014, Tate & Lyle's counsel, Heidi Balsley, contacted SPB attorney, who was formerly a Patton Boggs attorney, Dan Waltz, inquiring whether he knew of the pending lawsuit, which he did not. (Balsley Decl. ¶ 6.) Thereafter, on July 28, 2014, SPB attorneys, Stacy Ballin (former partner and general counsel at Squire Sanders) and Charles Talisman (former assistant general counsel at Patton Boggs) spoke with Tate & Lyle's vice president and general counsel, Peter Castelli, and Ms. Balsley. ( Id. ¶ 7; Castelli Decl. ¶ 10.) During that call, Ms. Ballin and Mr. Talisman stated that SPB failed to identify the conflict, despite Tate & Lyle appearing as a current client in Patton Boggs' database. (Castelli Decl. ¶ 11.) They explained that a paralegal at Patton Boggs had prepared a list of clients with conflicts for considerations as part of the pre-merger conflicts diligence, and Tate & Lyle had been inexplicably omitted from the list. ( Id.) During that call, they asked Tate & Lyle for a conflict waiver. ( Id. ¶ 12.) They explained that, as a practical matter, a de facto ethical wall was in place because the two firms' computer systems had not been integrated and documents were in different offices. ( Id.)

2. Tate & Lyle Does Not Agree to Waive the Conflict

During another call on August 4, 2014, Tate & Lyle's counsel, Mr. Castelli, informed Mr. Talisman and Ms. Ballin that because the instant litigation was not " ordinary commercial litigation, but rather a contentious battle between two competing industries," Tate & Lyle would not waive the conflict. ( Id. ¶ 13.) Mr. Castelli requested that SPB withdraw from its representation of the Sugar Plaintiffs. ( See id.)

Thereafter on August 10, 2014, SPB's counsel sent a letter to Tate & Lyle's counsel, enclosing a copy of the 1998 Engagement Letter. (Castelli Decl. ¶ 16, Ex. 1.) The letter states, " the terms of Tate & Lyle's engagement of Patton Boggs. . . provided us with Tate & Lyle's advance consent that we would represent other clients on matters adverse to Tate & Lyle so long as those matters were unrelated to our work for Tate & Lyle." ( Id.) In the letter, SPB proposed to carry forward the simultaneous representations of the Sugar Plaintiffs and Tate & Lyle on other matters with two distinct teams of lawyers and an ethical wall. ( Id., Ex. 1.)

3. SPB Withdraws from Its Representation of Tate & Lyle

On August 18, 2014, SPB sent a letter to Tate & Lyle's counsel terminating its relationship with Tate & Lyle. ( Id., ¶ 22, Ex. 8.) Dan Waltz and other lawyers at SPB were actively providing services to Tate & Lyle up until SPB's termination on August 18, 2014. (Castelli Decl. ¶ 23.)

C. Patton Boggs' Representation of Ingredion

Defendant Ingredion provides ingredients to food and beverage companies and refines corn to produce HFCS. (Levy Decl. ¶ 2.) Ingredion first retained Patton Boggs in May 2004, and Patton Boggs continued to perform work for Ingredion over the years and last performed work for Ingredion in September 2013. (Talisman Decl. ¶ 3.) Patton Boggs has provided legal services to Ingredion on at least fifty-six different

Page 1080

occasions, and since 2004, Ingredion has paid Patton Boggs over $230,000 in legal fees. (Levy Decl. ¶ 3.)

Shortly after Tate & Lyle's counsel raised the conflict, SPB sent Ingredion's counsel a letter dated July 31, 2014, advising it of the merger and that Squire Sanders had been representing the Sugar Plaintiffs and SPB would continue to do so going forward. ( Id. ¶ 7, Ex. 1.) The letter stated that if Ingredion wanted to have its lawyers from Patton Boggs do any new work, it would be necessary to obtain a waiver from Ingredion due to the conflict presented by SPB's role in the present case. ( Id.)

Ingredion and Tate & Lyle each move to disqualify SPB from representing the Sugar Plaintiffs in this action, contending that the merger resulted in SPB simultaneously representing adverse clients.

III. LEGAL STANDARD

Motions to disqualify counsel are governed by state law. See Rodriguez v. W. Publ'g Corp., 563 F.3d 948, 967 (9th Cir. 2009) (" By virtue of the district court's local rules, California law controls whether an ethical violation occurred." ) The Central District applies the California State Bar Act, the California Rules of Professional Conduct, and the related judicial decisions in assessing the standards of professional conduct. See C.D. Cal. L.R. 83-3.1.2.

The decision to disqualify counsel is within the trial court's discretion limited by applicable legal principles. See Trone v. Smith, 621 F.2d 994, 999 (9th Cir. 1980); People ex rel. Dept. of Corp. v. SpeeDee Oil, 20 Cal.4th 1135, 1143, 86 Cal.Rptr.2d 816, 980 P.2d 371 (1999). Because of the potential for abuse, disqualification motions are subject to strict judicial scrutiny. Optyl Eyewear Fashion Int'l Corp. v. Style Cos., Ltd., 760 F.2d 1045, 1050 (9th Cir. 1985). A court should examine the implications of disqualification, including " a client's right to chosen counsel, an attorney's interest in representing a client, the financial burden on a client to replace disqualified counsel, and the possibility that tactical abuse underlies the disqualification motion." SpeeDee Oil, 20 Cal.4th at 1145.

Motions to disqualify generally arise in one of two contexts: (1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests. The primary fiduciary duty at ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.