“[IN CHAMBERS] Order Regarding Motions to Disqualify [90,187]” —

• “Schulte is a multi-national law firm that, as discussed below, has represented Politan, Masimo, and RTW Clients in various capacities… Adriana Schwartz (‘Schwartz’) is the Schulte partner who primarily advised RTW Clients. Swartz is a former litigation partner at Schulte who represented Politan and later Masimo. Swartz is now a partner at Quinn Emanuel, another multi- national law firm, which has assumed representation of Masimo in this action.”
• “In November 2021, RTW Clients retained Schulte to advise them on regulatory and securities matters related to investment, including Sections 13 and 16 of the Exchange Act. Their Engagement Letter included an advance waiver of conflicts of interest permitting Schulte to represent clients ‘directly adverse’ to RTW Clients, including ‘on opposite sides of a litigation or proceeding.’ Schwartz was the Schulte attorney ‘primarily responsible for the RTW account.'”
• “Shortly before Schulte’s representation of RTW Clients, Swartz and Schulte were engaged by Politan in July 2021. Schulte and Swartz subsequently represented Politan in its proxy contest to elect new board members on Masimo’s board in 2024. This included suing Kiani in the Delaware Court of Chancery and issuing a third-party subpoena on RTW Clients.”
• “On July 3rd of the same year as Schulte’s representation of Politan in the proxy contest, Senior Counsel for RTW Clients, Alice Lee, called Schwartz for advice related to RTW Clients’ investment holdings and empty voting. When Lee disclosed that her questions were in relation to the Masimo proxy contest, Schwartz informed Lee that she could not provide advice related to Masimo due to a conflict at the firm.”
• “Despite knowledge of a potential conflict, Schulte did not erect an ethical wall around Schwartz until August 27, 2024, when Swartz conducted a conflicts check before filing a third-party subpoena on RTW Clients. As lead partner for the Politan matter, Swartz was then barred from receiving information related to RTW Clients or discussing anything related to Politan, Masimo, or RTW Clients with Schwartz or other attorneys on the RTW Clients advisory matter.”
• “After Politan’s successful proxy battle, Masimo engaged Swartz and Schulte to represent it in this action filed against RTW Defendants in October 2024 in the Southern District of New York (‘SDNY’). Schulte refused RTW Client’s request to voluntarily withdraw.”
• “In March 2025, Swartz left Schulte to join Quinn Emanuel. Shortly thereafter, Masimo signed an engagement letter with Quinn Emanuel to represent it in this action on April 7, 2025. After the action was transferred to this Court, all of the remaining Schulte attorneys gave notice that they would not be appearing for Masimo. Only Quinn Emanuel attorneys remain in the action and Swartz is the only former Schulte attorney who has appeared for Masimo since transfer.”
• “The crux of this Motion is Swartz’s alleged conflict of interest as lead attorney for Masimo. Although Swartz has left Schulte for Quinn Emanuel, he may nonetheless be subject to disqualification for his prior association with Schulte under a concurrent representation analysis. No determination is necessary, however, if RTW Clients effectively waived their right to move for disqualification under the Engagement Letter with Schulte. Any advance waiver would necessarily include the future activities of the firm and its partners, including Swartz.”
• “However, advance waiver for concurrent representation conflicts that might arise in the future may be effective when a client ‘reasonably understands risks that the waiver entails.'”
• “Here, there is no doubt that RTW Clients, a hedge fund manager and its affiliates, are sophisticated users of the investment advisory services it sought from Schulte and multiple other law firms.  The Engagement Letter was extensively negotiated by in-house counsel capable of advising RTW Clients of the risks of signing the waiver. RTW Clients even identified and required the inclusion of specific parties that Schulte would not represent without prior written consent.”
• “Engagement Letter also informed RTW Clients of the conflicts that they were agreeing to waive, including the situation here. The Engagement Letter states that Schulte ‘would not be disqualified . . . from representing another client in a litigation or other proceeding that is adverse to you as long as the Firm is not then representing you in that matter.’ The crux of the issue that parties dispute is whether Schulte’s representation of Masimo against RTW Defendants constitutes the same ‘matter’ as legal services provided to RTW Defendants under the Engagement Letter.”
• “RTW Clients seek to construe ‘matter’ under the advance waiver of conflicts as the ‘Matter’ as defined on page one of the Engagement Letter: ‘to represent and advise . . . in connection with general investment advice, securities law and related matters.'”
• “The Court agrees with Masimo that this broad interpretation of ‘matter’ under the advance waiver would lead to an absurd result by rendering the waiver virtually useless, preventing representation against RTW Clients, a hedge fund manager, for any matter related to a topic of ‘general investment advice.'”
• “See e.g., Saffire Corp. v. Newkidco, LLC, 286 F. Supp. 2d 302, 308 (S.D.N.Y. 2003) (‘Under traditional contract interpretation rules, a provision may not be interpreted in a manner which would render it an absurdity.’) Further, had the parties intended for this meaning of ‘matter’ to apply, they would have used the defined term ‘Matter’ from the Engagement Letter, which they did not. (Engagement Letter at 4.)”
• “In the Engagement Letter, Schulte also agreed to ‘adhere[] to its professional obligation not to disclose any confidential information or to use it for another party’s benefit.’ To the extent any confidential information was disclosed in the phone call or through general representation between Lee and Schwartz, Schwartz has attested that she did not reveal any relevant information about RTW Clients to any litigators representing Masimo at the firm.”
• “As a sophisticated user of legal services, RTW Clients understood well the risks of signing an advance waiver. So long as Schulte did not represent an adverse party in a matter in which they represented RTW Clients and did not use RTW Clients’ confidential information against them, the advance waiver forfeited RTW Clients’ right to assert Schulte’s representation of them ‘as a basis for disqualifying the Firm from representing another client of the Firm in any such other matter.’ Because Schulte did neither, the Court finds the advance waiver in the Engagement Letter effective under New York law, constituting the informed, written consent necessary under Rule 1.7.”
• “Swartz’s activity was necessarily covered under the terms of the advance waiver as a partner at Schulte. Swartz’s conduct was therefore non-disqualifiable under the same analysis completed for Schulte, and does not become disqualifiable simply because he has left the firm and joined Quinn Emanuel during the course of this litigation.”
• “As noted above, all attorneys actively associated with Schulte have withdrawn from this action. However, to the extent that Schulte might remain informally involved in this litigation, the Court finds that the foregoing advance waiver analysis applied to Swartz as a partner also applies to Schulte as a firm. Accordingly, the Court DENIES RTW Defendants’ motion to disqualify Schulte.”
• “Because the Court finds that Swartz has no disqualifiable conflict, there is no conflict to impute to Quinn Emanuel. The Court therefore DENIES RTW Defendants’ motion to disqualify Quinn Emanuel.”

“If Big Law Works on Trump’s Tariffs, Congress Should Pay For It” —

• “As part of their settlements with the Trump administration, several leading law firms reportedly have given free legal services to the Commerce Department.”
• “An important statute called the Anti-Deficiency Act generally requires that some existing appropriation—meaning a statute allowing Treasury expenditures—support any government contract or commitment of funds.”
• “Congress enacted the ADA in 1870 to stop such overspending. In its original form, the law forbid agencies from exceeding their appropriations or entering contracts without an appropriation to pay the resulting costs. But agencies still sometimes got around appropriations limits by having personnel work extra hours for free, hoping Congress would later pay them retroactively.”
• “In 1884, Congress added a provision forbidding such acceptance of ‘voluntary services’ except (in the current statutory formulation) ‘for emergencies involving the safety of human life or the protection of property.'”
• “Because agencies can’t incur spending obligations without a supporting appropriation, they can’t commit to paying employees’ wages until Congress appropriates new funds. And because agencies also can’t accept ‘voluntary services’ from employees hoping to later get paid, those employees can’t work at all for the government unless they fall within the exception for functions (like air traffic control and some law enforcement) that protect lives and property.”
• “How do these principles apply to the law firms? The administration and the firms will probably claim that the firms aren’t providing ‘voluntary services’ in the sense proscribed by the ADA because they aren’t hoping to get paid later. In fact, they may well have signed waivers disclaiming any such hope of future remuneration.”
• “Yet this theory may be a stretch in this context. For one thing, the firms are probably hoping to curry favor with the administration by providing so much work. For another, they hardly pledged these services gratuitously of their own free will in the way that a true unpaid volunteer normally would. On the contrary, the firms appear to be doing free work only because the administration took or threatened adverse actions against them such as revoking lawyers’ security clearances or seeking penalties for alleged civil rights violations due to DEI hiring.”
• “Regardless, the administration’s legal creativity in inducing free services from top-flight firms is a significant threat to congressional power. Congress creates federal agencies, such as the Commerce Department, and defines their budgets. It typically budgets for just one year at a time so that it can keep tabs on what agencies are doing and make any desired changes in the next annual appropriations cycle. It also calibrates the level of resources available for different agencies and functions. Congress determines in effect what laws will be vigorously enforced and which ones will be lower priorities or even not enforced at all.”
• “It’s also true that foreign affairs is an area of special presidential authority and that the services to the Commerce Department seem to have been related to negotiation of tariff deals. But while presidents have sometimes employed private parties voluntarily as diplomatic envoys, such envoys served of their own free will. In any event, demanding free legal work from the country’s top law firms is a far cry from the sort of control over diplomatic communications that presidents have previously claimed.”
• “This administration has sought in many ways to establish greater executive control over government spending. The law firm deals fit this pattern, and they may be a tempting example for future presidents: If budget deficits necessitate government austerity in the years ahead, presidents may find themselves looking for ways to accomplish their goals with private help instead.”