Risk Update

Disqualification — Lawyer DQ’d in IP Matter, Firm Included Because It Didn’t Screen

Posted Dan Bressler

“VEEVA SYSTEMS INC. v. TACT.AI TECHNOLOGIES, INC., AKTANA, INC.” —

  • “Fairly universal principles of legal ethics tell us that a lawyer cannot defend her client in a lawsuit and then turn against that client in the same or a substantially related matter. But this rule is not a black hole inhaling anyone nearing the event horizon. A new client’s choice of counsel is entitled to respect. Former clients may give informed consent. And there’s nothing strange about lawyers working on many matters of a similar kind — that is the nature of specialization, which is a boon for clients.”
  • “Many matters that seem somewhat similar do not really have the kind of relations that run counter to the recognized purposes of the ethical rules. Nor are the ethical rules weapons for deployment at a whim.”
  • “Here, lead counsel for the defendants, Ms. Christa M. Anderson, Esq., used to represent Veeva at her old firm. Veeva — the former client — objects and moves to disqualify Ms. Anderson and her new firm. The focus is on a patent and trade secret case from about ten years ago where Ms. Anderson represented Veeva. Defendants argue that plaintiff failed to show the two matters are substantially related, and that plaintiff waived its objection.”
  • “For the reasons set out below, we agree with Veeva and grant the motion. Ms. Anderson and her firm, Cooley LLP, are disqualified from their representation of defendants in this case.”
  • “Ms. Anderson practiced at Keker from 1996 to 2022 and moved to Cooley in 2022. In 2013, she was lead counsel for Veeva in a patent infringement and trade secret misappropriation case brought by Prolifiq Software, Inc. against Veeva.”
  • “The record offers a few details on Ms. Anderson’s role in Prolifiq. In support of its motion, Veeva filed several insightful documents as well as some partially unredacted billing records.”
  • “In response — rather than seek an order compelling production of the complete records or otherwise digging in — Ms. Anderson filed a declaration averring that she possesses no relevant records and does not remember anything of substance about Prolifiq.”
  • “Ms. Anderson’s billing entries — and entries of others on the team referring to Ms. Anderson — reflect her supervision of the Keker litigation team. (“case planning,” “case strategy,” with attendant meetings and correspondence with Veeva).”
  • “The story picks up again in 2023 — after Ms. Anderson moved to Cooley — when she became lead counsel for Aktana in this dispute with Veeva.”
  • “Ms. Anderson’s representation of Aktana was well known to Veeva. Between November 2, 2023 through the end of January 2024, she communicated more than 50 times with Veeva representatives including Mr. Faddis (recall: he was her point of contact when she represented Veeva).”
  • “Although the parties were understandably guarded about the nature of these communications, it was made sufficiently clear during oral argument that they were exploring the possibility of settlement. For those first three months, Veeva never complained about Ms. Anderson’s involvement, and Ms. Anderson never sought Veeva’s informed consent to represent Aktana against it. Veeva’s reason is that Mr. Faddis did not remember what Prolifiq was about and their team did not investigate until Aktana moved to dismiss in mid-January 2024; Aktana’s reason is that it was not Ms. Anderson’s responsibility to say something”
  • “The motion to disqualify. Veeva’s motion is simple enough: Ms. Anderson must be disqualified because she is violating the rule against being adverse to a former client in a substantially related matter without informed consent. DI 57 (relying on Model Rule of Professional Conduct 1.9). And because Cooley declined to screen Ms. Anderson from this case, Cooley must also be disqualified.”
  • “There is no room for another result here. Because Ms. Anderson’s representation of Aktana against Veeva in this case violates Model Rule 1.9, we must grant the motion to disqualify her. And because her law firm, Cooley, has not accepted Aktana’s request to screen her or argued that screening would be an appropriate resolution, we must disqualify Cooley from representing Aktana in this matter as well. Veeva’s five-month delay in bringing this motion is not a good thing on the whole. But there was some brinksmanship on both sides here, and the facts do not amount to waiver. In the end, this ruling is not about who wore the white hat. It is required by the ethical rules.”