Firm Which Authored Non‑infringement Opinion Disqualified as Trial Counsel
In Crossroads Systems (Texas) Inc. v. Dot Hill Systems Corp, 82 USPQ2d 1517 (W.D. Tex. 2006), Crossroads brought an action against Dot Hill for patent infringement, for which defendant asserts an invalidity defense. Dot Hill is represented by three different firms as trial counsel. Plaintiff filed a Motion to Disqualify Morgan & Finnegan as Trial Counsel for Dot Hill. In September 9, 2004, the Court held a hearing on Crossroads’ motion to compel discovery, and became aware that certain members of the Morgan & Finnegan law firm provided Dot Hill with non-infringement options related to the accused products at issue. On motion to disqualify Morgan & Finnegan, the Court held that it would not allow Morgan & Finnegan to serve as trial counsel if the opinions of other members of the firm were offered to support Dot Hill’s defense. Dot Hill’s counsel stated that it would not call any of the Morgan & Finnegan attorneys to testify at trial, and that in the event it would, Morgan & Finnegan would not represent Dot Hill as trial counsel because there were two other firms representing Dot Hill. Since September 2004, Dot Hill indicated that it intends to call Morgan & Finnegan counsel to participate at trial; as a result, Crossroads brought a disqualification motion. At the hearing, Crossroads firmly stated that it would call at least one Morgan & Finnegan attorney to testify at trial; consequently the Court held it will not permit Morgan & Finnegan to serve as counsel in this matter.
Under Fifth Circuit law, four separate ethical cannons govern a disqualification motion: 1) the local rules of the district court in which the motion is filed; 2) the American Bar Association (“ABA”) Model Rules of Professional Conduct (“Model Rules”); 3) the ABA Model Code of Professional Responsibility (“the Model Code”); and 4) the rules of professional conduct employed by the bar of the state in which the court sits.
According to Rule 3.08(a) of the Texas Disciplinary Rules of Professional Conduct (“the Texas Rules”), a lawyer may not accept or continue employment “if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer’s client, unless [certain enumerated exceptions apply].”Tex.Disc. R. Prof. Conduct 3.08(a).
The Model Rules provide that a “lawyer shall not act as advocate at trial in which the lawyer is likely to be a necessary witness unless: (1) the testimony relates to an uncontested issue; (2) the testimony relates to the nature and value of legal services rendered in the case; or (3) disqualification of the lawyer would work substantial hardship on the client.” Model Rules Of Prof’l Conduct R. 3.7(a).
Additionally, the Model Code provides that a “lawyer shall not accept or continue employment as an advocate before a tribunal . . . if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer’s client responsibility . . . .” Model Code ofProf’l Responsibility DR5-101(b).
Lastly, the Local Rules of the Western District of Texas provide that lawyers shall “not conduct a trial when they know, prior thereto, that they will be necessary witnesses, other than as to merely formal matters . . .” Local Rule AT-5. These cannons correspondingly indicate that an attorney who is called to testify in trial may not serve as trial counsel.
However, the unanimity of these laws break down when another member of the firm is the witness called at trial. The Model Rules allow for other members of the firm to testify, while theTexasrules prohibit the same firm from having both trial attorneys and attorneys being called to witness absent a client’s informed consent. The Model Code treats members of the testifying firm the same as the testifying attorney for purposes of the prohibition on service as trial counsel. In reviewing the applicable rules, the District Court held that a strict prohibition on all members of Morgan & Finnegan serving as trial counsel is appropriate.
Specifically, the District Court noted that Crossroads indicated it will call Morgan & Finnegan’s opinion counsel as witnesses, and will “attack the reasonableness of Dot Hill’s reliance on the opinions. This reasonableness will also be dependent on facts communicated to opinion counsel. Thus, both the legal accuracy and the factual basis of the opinion will be at issue, which necessarily implicated the abilities of Morgan & Finnegan’s attorneys who drafted the opinions.
Also, the trial attorneys would be placed in the awkward position of having to advocate for the credibility of their partners of their firm, and may be confronted with conflicts of interest between the client’s interest and their firm’s interest if the same firm’s opinion attorneys were to testify adversely to Dot Hill’s interests. Any decision by Morgan & Finnegan’s trial counsel not to call opinion counsel would be “immediately suspect” since there would be a suspicion that trial counsel refused to call the opinion counsel due to their divided loyalties, and there would be no assurance that Morgan & Finnegan would not have acted differently if the “capability and credibility of their partners were not in issue.” The Court determined that the credibility of Morgan & Finnegan attorneys should not be an issue in the case, and would be if both trial and opinion counsel are in the same firm. Thus, based upon the totality of the issues raised, the District Court found that there were simply “too many potential rabbit trails and invitations to jury confusion” to allow Morgan & Finnegan also continue as trial counsel.
Lastly, because Dot Hill is already represented by two other law firms, the District Court found there was little evidence of prejudice on Dot Hill should Morgan & Finnegan be disqualified. On balance, the District Court disqualified Morgan & Finnegan as trial counsel due to their firm having also been opinion counsel since, “[u]nder these circumstances, it is far superior to require Dot Hill to bear the relatively minor cost of disqualifying one of the three firms that has appeared on its behalf than to confront the grave dangers posed by allowing Morgan & Finnegan to continue as trial counsel.”