Case 2:15-cv-09631-MWF-KS Document 76 Filed 05/01/17 Page 1 of 28 Page ID #:1162

1 JENNER & BLOCK LLP
Michael P. McNamara (SBN 106079)
2 MMcNamara@jenner.com
3 Kirsten H. Spira (SBN 119885)
KSpira@jenner.com
4 AnnaMarie A. Van Hoesen (SBN 282074)
AVanHoesen@jenner.com
5 633 West 5th Street Suite 3600
Los Angeles, CA 90071-2054
6 Telephone:+1 213 239 5100
7 Facsimile: +1 213 239 5199
for Attorneys for
8 Attorneys
Greenberg Traurig, LLP
9
UNITED STATES DISTRICT COURT
10
CENTRAL DISTRICT OF CALIFORNIA
11
Case No. 2:15-cv-09631-MWF-KS
12 ESTATE OF GERALD E. HELLER,
DECEASED,
OPPOSITION TO PLAINTIFF’S
13
Plaintiff,
MOTION TO DISQUALIFY
14
DEFENDANTS’ ATTORNEYS OF
v.
RECORD
15 NBCUNIVERSAL, INC., A SUBSIDIARY
OF COMCAST CORPORATION; O’SHEA
Hearing Date: May 22, 2017
16 JACKSON SR, PKA ICE CUBE, an
Time: 10:00 a.m.
individual;
ANDRE
YOUNG,
PKA
DR
17
Courtroom: 5A
Judge: Honorable Michael W. Fitzgerald
DRE, an individual, THE ESTATE OF
18
ERIC WRIGHT, PKA EAZY E, an
19 individual; TOMICA WOODS-WRIGHT,
individually and as the personal
20
representative of the ESTATE OF ERIC
21 WRIGHT; COMPTOWN RECORDS, INC.,
a corporation; XENON PICTURES,
22
INC./XENON ENTERTAINMENT
23 GROUP, a corporation; JONATHAN
HERMAN, an individual; ANDREA
24
BERLOFF, an individual; S. LEIGH
25 SAVIDGE, an individual; ALAN
WENKUS, an individual, and Does 1-10,
26
Defendants.
27
28
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1

TABLE OF CONTENTS

2

Page(s)

3 INTRODUCTION ............................................................................................................... 1
4 RELEVANT PROCEDURAL AND FACTUAL BACKGROUND .................................. 3
5
6
7
8

I.

Plaintiff Filed the Instant Litigation Regarding “Straight Outta
Compton.” ....................................................................................................... 3

II.

Plaintiff First Raised GT’s Alleged Conflict of Interest the Day Before
Heller’s Deposition, Which Was Ten Months into the Litigation. ................. 4

III.

GT’s Internal Investigation Revealed No Evidence that GT Ever
Represented Heller, Or that Heller Ever Imparted Any Confidential
Information to Katz ......................................................................................... 5

IV.

GT Erected an Ethical Wall Immediately Upon Receiving Notice of
the Alleged Conflict ........................................................................................ 6

V.

Plaintiff Has Repeatedly Changed the Story Related to the Alleged
Conflict ............................................................................................................ 6

VI.

Plaintiff’s Counsel Expressly Admitted the Strategic Purpose Behind
Pursuing Disqualification ................................................................................ 8

9
10
11
12
13
14
15
16
17
18
19

ARGUMENT ....................................................................................................................... 8
I.

Plaintiff is Precluded from Pursuing Disqualification to Force a
Settlement Disadvantageous to Defendants .................................................... 9

II.

There is No Substantial Relationship Between the Current
Representation and the Alleged Discussion at the Katz Meeting ................. 11

III.

Plaintiff Has Failed to Establish that Jerry Heller Conveyed any
Confidential Information to Joel Katz........................................................... 14
a. The presence of unnecessary third parties destroyed any
confidentiality .......................................................................................... 14

20
21

b. The voluntary disclosure of information destroyed any
confidentiality .......................................................................................... 16

22
23
24
25
26

IV.

GT’s Immediate Implementation of an Ethical Wall Rebuts any
Presumption of Shared Confidences ............................................................. 19

V.

Plaintiff Has Waived his Right to Seek Disqualification.............................. 21

CONCLUSION .................................................................................................................. 23

27
28

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1

TABLE OF AUTHORITIES

2

Page(s)

3
4

CASES

5 Alexander v. Primerica Holdings, Inc.,
822 F. Supp. 1099 (D.N.J. 1993) ......................................................................... 9, 10, 11
6
Almont Ambulatory Surgery Ctr., LLC v. UnitedHealth Grp., Inc.,
7
No. 14-02139, 2014 WL 12589658 (C.D. Cal. June 16, 2014)......................... 1, 4, 8, 10
8
Behunin v. Superior Court,
9
9 Cal. App. 5th 833 (2017) ................................................................................ 14, 15, 16
10
Beltran v. Avon Prods., Inc.,
867 F. Supp. 2d 1068 (C.D. Cal. 2012) ........................................................................... 8
11
12 Bobbitt v. Victorian House, Inc.,
545 F. Supp. 1124 (N.D. Ill. 1982) ................................................................................ 10
13
14 Ernie Ball, Inc. v. Earvana, LLC,
No. 06-384, 2006 WL 4941832 (C.D. Cal. Aug. 9, 2006) .............................................. 9
15
16 Farris v. Fireman’s Fund Ins. Co.,
119 Cal. App. 4th 671 (2004) ................................................................................. passim
17
Gregori v. Bank of Am.,
18
207 Cal. App. 3d 291 (1989), modified (Feb. 17, 1989) ........................................... 9, 10
19
Havasu Lakeshore Invs., LLC v. Fleming,
20
217 Cal. App. 4th 770 (2013) ........................................................................................ 10
21
In re County of Los Angeles,
22
223 F.3d 990 (9th Cir. 2000) ............................................................................... 8, 19, 20
23 In re Frantz,
No. 15-00460, 2016 WL 4581405 (D. Idaho Aug. 31, 2016) ....................................... 10
24
25 In re Marvel,
251 B.R. 869 (Bankr. N.D. Cal. 2000), aff’d, 265 B.R. 605 (N.D. Cal.
26
2001) .............................................................................................................................. 10
27
ii
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1 In re von Bulow,
828 F.2d 94 (2d Cir. 1987) ............................................................................................ 17
2
3 Jessen v. Hartford Cas. Ins. Co.,
111 Cal. App. 4th 698 (2003) .................................................................................. 11, 14
4
5 Johnson v. Superior Court,
159 Cal. App. 3d 573 (1984) ......................................................................................... 17
6
Khani v. Ford Motor Co.,
7
215 Cal. App. 4th 916 (2013) ........................................................................................ 13
8
Kirk v. First Am. Title Ins. Co.,
9
183 Cal. App. 4th 776 (2010) ................................................................................. passim
10 Layer2 Communications, Inc. v. Flexera Software LLC,
No. 13-02131, 2014 WL 2536993 (N.D. Cal. Jun. 5, 2014) ............................. 16, 17, 19
11
12 Lewis C. Nelson & Sons, Inc. v. U.S. Dist. Court, E. Dist. of California,
188 F. App’x 640 (9th Cir. 2006) .................................................................................. 12
13
14 Liberty National Enterprises, L.P. v. Chicago Title Insurance Co.,
194 Cal. App. 4th 839 (2011) .................................................................................. 21, 22
15
16 Merle Norman Cosmetics, Inc. v. U.S. Dist. Court, Cent. Dist. of California,
856 F.2d 98 (9th Cir. 1988) ........................................................................................... 12
17
Optyl Eyewear Fashion Int’l Corp. v. Style Companies, Ltd.,
18
760 F.2d 1045 (9th Cir. 1985) ......................................................................................... 9
19
People ex rel. Dep’t of Corps. v. Speedee Oil Change Sys., Inc.,
20
20 Cal.4th 1135 (1999) .................................................................................................. 19
21

Richardson-Merrell, Inc. v. Roller,
472 U.S. 424 (1985) ......................................................................................................... 9
22
23 River West, Inc. v. Nickel,
188 Cal. App. 3d 1297 (1987) ....................................................................................... 21
24
25 S.E.C. v. King Chuen Tang,
831 F. Supp. 2d 1130 (N.D. Cal. 2011) ........................................................................... 8
26
27
28

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1 Seahaus La Jolla Owners Assn. v. Superior Court,
224 Cal. App. 4th 754 (2014) ........................................................................................ 16
2
3 Somers v. Digital Realty Trust, Inc.,
119 F. Supp. 3d 1088 (N.D. Cal. 2015), aff’d, 850 F.3d 1045 (9th Cir.
4
2017) .............................................................................................................................. 13
5
State Comp. Ins. Fund v. Drobot,
6
No. 13-956, 2014 WL 12579808 (C.D. Cal. July 11, 2014) ............................. 20, 22, 23
7 Tivoli, LLC v. Targetti Sankey S. P. A.,
No. 14-1285, 2015 WL 12669882 (C.D. Cal. Jan. 9, 2015).......................................... 11
8
9 Total Recall Technologies v. Palmer Luckey and Oculus VR, LLC,
No. 15-02281, 2016 WL 1298863 (N.D. Cal. Apr. 4, 2016) ........................................ 16
10
11 Trone v. Smith,
621 F.2d 994 (9th Cir. 1980) ......................................................................................... 11
12
13 STATUTES
14 California Code of Evidence § 912 ............................................................................... 16, 19
15 California Code of Evidence § 912(d) ................................................................................ 14
16
17
18
19
20
21
22
23
24
25
26
27
28

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1

INTRODUCTION

2

Courts uniformly reject strategically motivated disqualification motions out of hand.

3 In fact, this Court has warned that “[d]isqualification motions can be (and often are) misused
4 as weapons to harass opposing counsel, delay litigation, or force disadvantageous
5 settlement.” Almont Ambulatory Surgery Ctr., LLC v. UnitedHealth Grp., Inc., No. 146 02139, 2014 WL 12589658, at *2 (C.D. Cal. June 16, 2014) (Fitzgerald, M.) (quotation
7 omitted). Yet Plaintiff’s counsel1 expressly admitted that he is bringing this disqualification
8 motion to drive up the costs of the litigation and thereby “open up the possibility to settle
9 the case.” Making matters even worse, this strategic conflict of interest allegation was only
10 first raised 10 months into the litigation – after Defendants had succeeded in obtaining
11 dismissals of most of Plaintiff’s primary claims – and was filed 17 months after the lawsuit
12 was initiated. Such tactics simply cannot be permitted.
13

Plaintiff’s conflict allegation is, incredibly enough, based on a single alleged meeting

14 between Gerald (“Jerry”) Heller2 and attorney Joel Katz that occurred over 25 years ago
15 (long before Katz joined Greenberg Traurig). That meeting allegedly included a discussion
16 of a potential defamation claim by Heller concerning an entirely different allegedly
17 defamatory statement – a 1991 song by Ice Cube entitled “No Vaseline.” This single
18 meeting between Heller and Katz cannot preclude Greenberg Traurig from representing
19 Defendants in this action because:
20

First, Plaintiff’s strategic motivation provides a sufficient basis in and of itself to

21 deny Plaintiff’s request for disqualification.

Courts have time and again rejected

22 disqualification motions brought for an improper purpose, particularly where the movant
23 seeks leverage it hopes to parlay into an advantageous settlement.
24
25

1

As used herein, “Plaintiff” refers to the Estate of Gerald E. Heller, Deceased, and
26 “Plaintiff’s counsel” refers to Plaintiff’s attorney Michael Shapiro, acting on behalf of
Plaintiff.
27 2 As used herein, “Heller” refers to Jerry Heller.
28
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1

Second, disqualification requires a finding of a “substantial relationship” between the

2 prior and current representation.

This in turn requires a finding that confidential

3 information “directly at issue in,” or having “some critical importance to” the second
4 representation, was imparted during the first representation. Here, all of Plaintiff’s current
5 claims concern the 2015 film “Straight Outta Compton,” but the basis for Plaintiff’s
6 disqualification motion is an alleged “1992 or 1993” conversation between Mr. Katz and
7 Mr. Heller regarding alleged defamatory statements in a 1991 song called “No Vaseline.”
8 Putting aside that Mr. Katz denies advising Mr. Heller on that subject, such a conversation
9 could not possibly be substantially related to Plaintiff’s claims regarding “Straight Outta
10 Compton,” a movie that did not even exist at the time of those alleged communications.
11 “No Vaseline” merely makes general derogatory and profane statements about a number of
12 people, including Eazy E’s manager (presumably Heller), but says nothing about Heller
13 trying to dissuade Ice Cube from retaining an attorney – the sole remaining basis for
14 Plaintiff’s defamation claim in this action – nor does it assert any specific “facts” at issue
15 in this action. There is simply no evidence to suggest that Heller would have imparted
16 confidential information in a discussion about “No Vaseline” that would be of “some
17 critical importance” in this action.
18

Third, no confidential information could have been relayed by Heller in the course

19 of the purported meeting at issue because third parties were present at that meeting. As a
20 matter of black letter law, the presence of third parties destroys the privilege and thereby
21 the confidentiality of any attorney client communication, unless such third parties were
22 necessary participants. Here, there is no allegation, let alone factual showing, that their
23 presence was necessary for the communication. In addition, there is nothing confidential
24 about the lyrics of “No Vaseline,” which continued the very public airing of long-running
25 grudges involving the group N.W.A. Indeed, in the years since the alleged meeting with
26 Katz occurred, Heller himself publicly disclosed the details of his relationship with N.W.A.
27 in memoirs, screenplays and other public activities. It is difficult to conceive how any
28

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1 relevant information could remain confidential.
2

Fourth, even assuming the existence of a conflict, Greenberg Traurig’s immediate

3 implementation of an ethical wall, combined with the absence of any evidence that
4 Greenberg Traurig attorneys shared Heller’s allegedly confidential information prior to
5 such implementation, obviates imputation of the alleged conflict. As the California Court
6 of Appeal has explained, “[t]he purpose of a disqualification order is prophylactic, not
7 punitive.” Kirk v. First Am. Title Ins. Co., 183 Cal. App. 4th 776, 815 (2010), as modified
8 (May 6, 2010). Disqualification would serve no purpose here, as Greenberg Traurig has
9 already taken all necessary steps to avoid any future appearance of impropriety.
10

Fifth, irrespective of the merits of Plaintiff’s motion, Plaintiff has waived

11 disqualification because of its unreasonable 10-month delay in asserting the potential
12 conflict of interest (and further delay in filing the motion), resulting in unreasonable
13 prejudice to Defendants.
14

RELEVANT PROCEDURAL AND FACTUAL BACKGROUND

15

I.

Plaintiff Filed the Instant Litigation Regarding “Straight Outta Compton.”
On October 30, 2015, Heller3 filed this lawsuit against Defendants alleging, inter

16

17 alia, (1) defamation, (2) breach of contract, (3) breach of implied covenant of good faith
18 and fair dealing, and (4) copyright infringement, arising out of the film “Straight Outta
19 Compton” (the “Litigation”). Dkt. 1-1. “Straight Outta Compton” tells the story of the
20 formation and ultimate disbandment of the music group N.W.A., and its members Eric
21 Wright (“Eazy E”), Andre Young (“Dr. Dre”) and O’Shea Jackson (“Ice Cube”). Dkt. 54
22 at 3. Heller, who is portrayed in the film, was N.W.A.’s manager and an executive of
23 Ruthless Records, which had exclusive music publishing contracts with N.W.A. Dkt. 37
24 ¶¶ 19-21. Plaintiff asserts that the film includes false depictions of Heller’s management
25 of N.W.A. that harmed his professional reputation. Dkt. 54 at 3-4.
26

Defendants have been represented since the beginning of this Litigation by attorneys

27
3

28

Heller filed the initial complaint, but was replaced by Plaintiff following Heller’s death.
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1 in the Los Angeles office of Greenberg Traurig, LLP (“GT”). As a result of Defendants’
2 counsel’s successful anti-SLAPP motions, Plaintiff’s defamation claim has been reduced to
3 two allegedly defamatory scenes which, according to Plaintiff, imply that Heller
4 discouraged Ice Cube from retaining an attorney to review a proposed recording agreement.
5 Id. at 2. The Court’s June 29, 2016 order granted the parties limited discovery on the issue
6 of actual malice with respect to these scenes. Id. Following the Court’s order, Heller’s
7 deposition was scheduled for August 16, 2016. Scott Decl. ¶ 10.
8
9
10

II.

Plaintiff First Raised GT’s Alleged Conflict of Interest the Day Before
Heller’s Deposition, Which Was Ten Months into the Litigation.
On August 15, 2016, ten months after initiating the Litigation and one day before

11 Heller’s court-ordered deposition was to proceed, Plaintiff’s counsel for the first time
12 asserted that Defendants’ counsel suffered from a potential conflict of interest, and on this
13 basis refused to allow the deposition to go forward. Scott Decl. ¶ 11; id. Ex. 1.
14

Specifically, Plaintiff’s counsel claimed that in “1992 [or] 1993,” Katz came to Los

15 Angeles to meet with Heller in connection with Heller’s role as a Ruthless Records
16 executive. Scott Decl. ¶ 12; id. Ex. 2. At that time Katz was a partner with Katz, Smith &
17 Cohen (“KS&C”) and Ruthless Records was one of his clients. Katz Decl. ¶¶ 5-6.
18

According to Plaintiff’s counsel, during the meeting (the “Katz Meeting”) Heller

19 discussed business matters on behalf of Ruthless Records, but also imparted information to
20 Katz regarding a possible defamation suit by Heller personally against Ice Cube arising
21 from Ice Cube’s song “No Vaseline.” Scott Decl. Ex. 2. Plaintiff’s counsel claimed that
22 Ruthless Records executives Terry Heller (Jerry Heller’s nephew and the former head of
23 Artists & Repertoire for Ruthless Records) and Michael Klein (the former Director of
24 Business Affairs for Ruthless Records) were present for these allegedly confidential
25 communications. Id.; see also Spira Decl. Ex. 4 at 8-9, 11-12. Plaintiff contended that
26 Heller gave Katz a $35,000 retainer check. Scott Decl. Ex. 1; see also Spira Decl. Ex. 4 at
27 9, 12. Finally, Plaintiff initially contended that Katz’s partner, Jeffrey Smith, also provided
28

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1 legal services to Jerry Heller in connection with his potential defamation claim. Scott Decl.
2 ¶ 11; id. Exs. 1, 2.
3

III.

GT’s Internal Investigation Revealed No Evidence that GT Ever

4

Represented Heller, Or that Heller Ever Imparted Any Confidential

5

Information to Katz.

6

GT’s internal investigation has revealed no evidence that the Katz Meeting as

7 Plaintiff describes it ever took place. Joel Katz, a transactional attorney specializing in
8 entertainment related corporate acquisitions, mergers, and executive compensation, has
9 been a shareholder in GT’s Atlanta, Georgia office since July 1, 1998. Katz Decl. ¶¶ 2, 3.
10 Prior to joining GT, Katz was a founding partner at KS&C. Id. ¶ 5. During the 1990s,
11 while practicing at KS&C, Katz represented Eric Wright, p/k/a “Eazy,” and his corporate
12 entity, Ruthless Records, in multiple entertainment transactions. Id. ¶ 6. Katz has no
13 recollection of the alleged Katz Meeting, and has declared under oath that he “would never
14 have given [] legal advice to Jerry Heller” related to a potential defamation claim because
15 he is “a transactional lawyer and defamation litigation is not [his] area of expertise.” Katz
16 Decl. ¶ 7.
17

Katz’s former KS&C partner and current GT partner Jeff Smith has similarly averred

18 that, although he “worked closely with Joel Katz,” Katz never told Smith “that he or KS&C
19 was representing or advising Jerry Heller in a defamation claim.” Smith Decl. ¶¶ 7, 9.
20 Smith “would have remembered” such a representation, since it “would have been
21 completely out of Joel Katz’s practice.” Id. ¶ 10.
22

Although Plaintiff has asserted without proof that Heller gave Katz a $35,000

23 retainer, Plaintiff’s counsel has admitted the declarants have no memory that Heller
24 personally gave Katz any money nor does Plaintiff have any record of such a payment. Van
25 Hoesen Decl. ¶¶ 8, 16. Plaintiff’s counsel more recently admitted that the check allegedly
26 given to Katz may have simply been a payment to Katz from Ruthless Record, his client.
27 Id.
28

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1

Neither Smith nor Katz – who work in a different practice group nearly 3,000 miles

2 away from the Litigation team – have had any involvement whatsoever in this Litigation.
3 Scott Decl. ¶¶ 16, 17. Neither Katz nor Smith have ever so much as spoken to any member
4 of GT’s Litigation team regarding the substance of the Litigation. Katz Decl. ¶¶ 8, 9; Smith
5 Decl. ¶¶ 16, 18.4
6

IV.

7

GT Erected an Ethical Wall Immediately Upon Receiving Notice of the
Alleged Conflict.

8

Despite the absence of evidence regarding Katz’s alleged representation of Heller,

9 GT took immediate steps to implement a prophylactic ethical wall screening Joel Katz and
10 Jeff Smith (and their assistants) from any interaction with the Litigation. Rivera Decl. ¶ 4.
11 In fact, on August 15, 2016, the same day Plaintiff’s counsel raised the potential conflict,
12 GT circulated an internal email notifying all relevant time keepers and their legal assistants
13 that an ethical wall was being put in place. Id. ¶¶ 4, 5. On August 16, 2016, the screen was
14 fully implemented. Id. ¶ 7. GT’s automated system generated an email that required those
15 notified to read and acknowledge the screen.5 Id. ¶¶ 8, 10. GT also locked down electronic
16 files associated with the Litigation matter, so that neither Katz nor Smith could access them
17 electronically. Id. ¶ 9.
18

V.

19

Plaintiff Has Repeatedly Changed the Story Related to the Alleged Conflict.
Since raising the alleged conflict in August 2016, Plaintiff’s counsel has repeatedly

20 changed his story regarding when the alleged conflict was discovered and the details
21 regarding Katz’s alleged representation of Heller. For example:
22
23
24
25
26
27
28

4

Mickey Shapiro, who has known Jeff Smith in a professional capacity since January 2016,
initiated an unsolicited call to Mr. Smith in June 2016 purportedly to request Smith’s
assistance in facilitating a settlement dialogue in the Litigation. Smith Decl. ¶¶ 12, 13. In
response, Smith simply suggested to Shapiro and GT shareholder Jeff Scott that they talk
to each other. Id. ¶ 14. Smith did not have any substantive conversation about the Litigation
with either Plaintiff’s counsel or Mr. Scott. Id. ¶ 14, 16-18.
5
If any new time keepers are added, they are also required to read and acknowledge the
screen. Id. ¶ 9(d).
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1

• Plaintiff’s counsel initially represented that he discovered Katz’s alleged

2

representation of Heller during an August 15, 2016 meeting with Michael Klein

3

regarding “issues pertaining to the Anti-SLAPP motion.” Scott Decl. Ex. 1. Now,

4

Plaintiff claims that “Heller did not recall [Katz’s] prior representation” until “August

5

9, 2016,” when Heller allegedly met with Klein to “prepare for his then scheduled

6

deposition in this action.” Dkt. 72 at 3.

7

• Plaintiff’s counsel initially claimed that both Katz and Smith had represented Heller,

8

but now claims only that Katz provided the representation. Compare Scott Decl. Exs.

9

1, 2 with Dkt. 72 at 3.

10

• Plaintiff’s counsel initially stated that both Klein and Heller imparted confidential

11

information to Joel Katz regarding Heller’s potential defamation action. Scott Decl.

12

Ex. 2. Now, both Terry Heller and Michael Klein claim that only Jerry Heller

13

imparted such information. Dkt. 72-1 ¶ 10; Dkt. 72-2 ¶ 10.

14

• Plaintiff’s counsel initially claimed that Katz received a retainer from Heller in his

15

capacity as a Ruthless executive. Scott Decl. ¶ 12; id. Ex. 2. Now, Plaintiff simply

16

asserts that Heller “personally tendered a retainer check to Joel Katz.” Dkt. 72-1 ¶

17

9; Dkt. 72-2 ¶ 9. Notwithstanding this carefully worded assertion, Plaintiff’s counsel

18

admits that he knows of no evidence that the check was from Heller’s account, and

19

admits it may simply have been a payment by Ruthless Records. Van Hoesen Decl.

20

¶ 16.

21

• Terry Heller initially declared under oath that he was an employee of Ruthless

22

Records only. Spira Decl. Ex. 6 at 25. Mr. Heller later revised his declaration to

23

assert (without any foundational facts) that he was also an “employee/agent of

24

Gerald ‘Jerry’ Heller,” and that he attended the Katz Meeting in his capacity as a

25

Ruthless Records employee and “as the former employee/agent of Jerry Heller.”

26

Dkt. 72-1 ¶¶ 1, 8.

27
28

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1

• Similarly, Michael Klein initially declared under oath that he was solely an employee

2

of Ruthless Records. Spira Decl. Ex. 6 at 22. Mr. Klein now declares, also without

3

any foundational facts, that he was also a “paid agent/advisor/business functionary

4

of Plaintiff Gerald ‘Jerry’ Heller,” and that he attended the Katz Meeting in his

5

capacity as a Ruthless Records employee and “as the long time, paid agent/advisor

6

of Jerry Heller.” Dkt. 72-2 ¶¶ 1, 8.

7

• Plaintiff’s counsel initially claimed that Mr. Klein had notes from the alleged Katz

8

meeting that would be attached to Mr. Klein’s declaration, but he now says that there

9

are no such notes, despite his earlier representations. Spira Decl. ¶¶ 4, 6; id. Ex. 5.

10
11
12

VI.

Plaintiff’s Counsel Expressly Admitted the Strategic Purpose Behind
Pursuing Disqualification.

During a March 31, 2017 meet and confer with Plaintiff’s counsel regarding the

13 instant motion, Plaintiff’s counsel stated that Plaintiff was pursuing GT’s disqualification
14 to “open up the possibility to settle the case” by driving up the cost of litigation for
15 Defendants’ insurers. McNamara Decl. ¶ 5; Spira Decl. ¶ 11; Van Hoesen Dec. ¶ 20.
16 Plaintiff’s counsel even repeated this refrain, stating that disqualification would be difficult
17 and expensive for the other side, and would potentially lead to settlement. McNamara Decl.
18 ¶ 5; Van Hoesen Decl. ¶ 20. Plaintiff’s counsel also noted that if the case went on, there
19 would be “ugly stuff” revealed about the Defendants, including aspects of their personal
20 lives. Van Hoesen Decl. ¶ 21.
21
22

ARGUMENT
Federal Courts in the Ninth Circuit “apply state law in determining matters of

23 disqualification.” In re County of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000). While
24 “[t]he right to disqualify counsel is within the discretion of the trial court as an exercise of
25 its inherent powers,” S.E.C. v. King Chuen Tang, 831 F. Supp. 2d 1130, 1141 (N.D. Cal.
26 2011) (citation omitted), “‘disqualification is a drastic measure that is generally disfavored
27 and imposed only when absolutely necessary.’” Almont Ambulatory Surgery Ctr., 2014
28

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1 WL 12589658, at *2 (Fitzgerald, M.) (quoting Beltran v. Avon Prods., Inc., 867 F. Supp.
2 2d 1068, 1077 (C.D. Cal. 2012)). Moreover, “[t]he purpose of a disqualification order is
3 prophylactic, not punitive.” Kirk, 183 Cal. App. 4th at 815. Thus, courts look to “whether
4 there is a genuine likelihood that allowing the attorney to remain on the case will affect the
5 outcome of the proceedings before the court.” Id.
6
7
8

I.

Plaintiff is Precluded from Pursuing Disqualification to Force a Settlement
Disadvantageous to Defendants.
The U.S. Supreme Court has expressed “concern about the ‘tactical use of

9 disqualification motions’ to harass opposing counsel.” Richardson-Merrell, Inc. v. Roller,
10 472 U.S. 424, 436 (1985). As Justice Brennan opined, “[t]he tactical use of attorney11 misconduct disqualification motions is a deeply disturbing phenomenon in modern civil
12 litigation.” Id. at 441 (Brennan J., concurring). “[B]ecause of this potential for abuse,” the
13 Ninth Circuit has instructed that “disqualification motions should be subjected to
14 ‘particularly strict judicial scrutiny.’”

Optyl Eyewear Fashion Int'l Corp. v. Style

15 Companies, Ltd., 760 F.2d 1045, 1050 (9th Cir. 1985). In fact, “motions to disqualify
16 counsel often pose the very threat to the integrity of the judicial process that they purport to
17 prevent.” Gregori v. Bank of Am., 207 Cal. App. 3d 291, 300–01 (1989), modified (Feb.
18 17, 1989); see also Alexander v. Primerica Holdings, Inc., 822 F. Supp. 1099, 1120 (D.N.J.
19 1993) (a motion to disqualify that “reflects an attempt to . . . inhibit the ability of
20 [Defendants] to fairly oppose Plaintiff’s case[ ] is inimical to the search for truth . . . and
21 cannot be condoned”).
22

Thus, “[w]hen a motion to disqualify appears to have been made primarily for

23 strategic purposes or would provide the movant with an undue tactical advantage, courts
24 ‘have been extremely reluctant to disqualify attorneys.’” Alexander, 822 F. Supp. at 1118
25 (denying motion to disqualify counsel where “[t]he motion appears to have been filed for
26 the purpose of gaining for Plaintiffs an undeserved tactical advantage over Primerica”); see
27 also Ernie Ball, Inc. v. Earvana, LLC, No. 06-384, 2006 WL 4941832, at *2-3 (C.D. Cal.
28

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1 Aug. 9, 2006) (denying motion to disqualify GT where the moving party “attempt[ed] to
2 manufacture a conflict in order to reduce the availability of experienced counsel for the
3 other side”); In re Marvel, 251 B.R. 869, 872 (Bankr. N.D. Cal. 2000), aff’d, 265 B.R. 605
4 (N.D. Cal. 2001) (denying motion to disqualify counsel and imposing sanctions where the
5 motion “was without merit and brought for two improper reasons: dislike of [the attorney]
6 engendered in other cases, and a desire to make [the attorney’s] investigation of [the moving
7 party’s] conduct more difficult”); Bobbitt v. Victorian House, Inc., 545 F. Supp. 1124, 1128
8 (N.D. Ill. 1982) (denying “disqualification motion [filed] as a litigation tactic,” which
9 “divert[ed] the litigation from attention to the merits”).
10

Courts are particularly wary of disqualification motions intended to “intimidate an

11 adversary into accepting settlement on terms that would not otherwise be acceptable.”
12 Gregori, 207 Cal. App. 3d at 300–01.

In fact, this very Court has warned that

13 “‘[d]isqualification motions can be (and often are) misused as weapons to harass opposing
14 counsel, delay litigation, or force disadvantageous settlement.’”

Almont Ambulatory

15 Surgery Ctr., 2014 WL 12589658, at *2 (Fitzgerald, M.) (quoting Havasu Lakeshore Invs.,
16 LLC v. Fleming, 217 Cal. App. 4th 770, 779 n.7 (2013)) (emphasis added). Another District
17 Court recently affirmed the denial of disqualification motions and the imposition of
18 sanctions on the moving party where the trial judge “explicitly held the disqualification
19 motions were brought with the intent to manipulate a settlement” by “increasing expenses
20 and disrupting the litigation.” In re Frantz, No. 15-00460, 2016 WL 4581405, at *9 (D.
21 Idaho Aug. 31, 2016).
22

While courts often rely on circumstantial evidence to infer the existence of an

23 improper motive for disqualification (see Alexander, 822 F. Supp. at 1118), no such
24 inference is necessary here. Plaintiff’s counsel has expressly admitted that Plaintiff is
25 pursuing disqualification to increase Defendants’ costs, with the goal of increasing
26 Plaintiff’s leverage in settlement negotiations. McNamara Decl. ¶ 5; Spira Decl. ¶ 11; Van
27 Hoesen Dec. ¶ 20. This remarkable admission, which conclusively establishes Plaintiff’s
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1 improper purpose for pursing disqualification, provides an independent basis to deny
2 Plaintiff’s motion. Taken together with Plaintiff’s decision to wait until the day before
3 Heller’s deposition and 10 months into the Litigation to raise GT’s alleged conflict of
4 interest,6 it is clear that such strategic conduct is “inimical to the search for truth . . . and
5 cannot be condoned.” Alexander, 822 F. Supp. at 1120.7
6

II.

7

There is No Substantial Relationship Between the Current Representation
and the Alleged Discussion at the Katz Meeting.

8

Setting aside Plaintiff’s improper motive for seeking disqualification, the motion

9 must be denied as meritless because an attorney will be disqualified for a conflict of interest
10 only where “the former representation is ‘substantially related’ to the current
11 representation.” Tivoli, LLC v. Targetti Sankey S. P. A., No. 14-1285, 2015 WL 12669882,
12 at *4 (C.D. Cal. Jan. 9, 2015) (quoting Trone v. Smith, 621 F.2d 994, 998 (9th Cir. 1980).
13 Here there is no evidence, or even reasonable argument, that a “substantial relationship”
14 exists between the Katz Meeting and the current Litigation.
15

The California Court of Appeal has explained that “successive representations will

16 be ‘substantially related’ when the evidence before the trial court supports a rational
17 conclusion that information material to the evaluation, prosecution, settlement or
18 accomplishment of the former representation given its factual and legal issues is also
19 material to the evaluation, prosecution, settlement or accomplishment of the current
20 representation given its factual and legal issues.” Jessen v. Hartford Cas. Ins. Co., 111 Cal.
21 App. 4th 698, 713 (2003). Moreover, “[t]o create a conflict requiring disqualification, . . .
22
23
24
25
26
27
28

6

Plaintiff’s two month delay in seeking the probate court’s approval to substitute Mr.
Heller’s estate as the plaintiff (see Dkt. 58, 66 at 2), and the delay of almost 6 weeks after
this Court lifted the stay to file this motion (see Dkt. 71, 72), further evidences that Plaintiff
is not serious about protecting any of Heller’s alleged confidential information, but rather
hopes to use this motion (or the threat of this motion) as a basis to seek a litigation
advantage.
7
Though Plaintiff could not have anticipated this result, the practical impact of Plaintiff’
counsel’s strategic delay is that Defendants will never have the opportunity to depose Heller
given his untimely passing.
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1 the information acquired during the first representation [must] be ‘material’ to the second;
2 that is, it must be found to be directly at issue in, or have some critical importance to, the
3 second representation.” Farris v. Fireman's Fund Ins. Co., 119 Cal. App. 4th 671, 680
4 (2004). “Thus, the inquiry . . . focuses ‘upon the general features of the matters involved
5 and inferences as to the likelihood that confidences were imparted by the former client that
6 could be used to adverse effect in the subsequent representation.’” Id.
7

“[G]eneral knowledge about a client alone is insufficient” to create a finding of a

8 substantial relationship. Lewis C. Nelson & Sons, Inc. v. U.S. Dist. Court, E. Dist. of
9 California, 188 F. App’x 640, 642 (9th Cir. 2006). In Lewis, the plaintiff brought a First
10 Amendment retaliation claim against Fresno County following Fresno’s rejection of the
11 plaintiff’s public construction project bid. No. 04-05577, Dkt. 77 at 2 (E.D. Cal. Oct. 11,
12 2005). Thereafter, the plaintiff sought disqualification of Fresno’s attorneys on the basis
13 that those attorneys had acted essentially as the plaintiff’s “general counsel” between 1985
14 and 1996, assisting with “virtually all legal matters . . . including bid protests and claims
15 against public entities.” Id. at 3, 6. Despite the attorneys’ decade-long relationship with
16 the plaintiff, the court held that “the only relationship between this action and the prior
17 representation of plaintiff is the fact that underlying this constitutional challenge to the
18 decision by defendant is an unsuccessful public contract bid,” which the court found
19 insufficient to create a substantial relationship between “the constitutional dispute at issue
20 before the court” and the attorneys’ “former representation of Plaintiff.” Id. at 34. The
21 Ninth Circuit affirmed. 188 F. App’x 640. The Ninth Circuit similarly affirmed a district
22 court’s refusal to disqualify counsel where there was “no reason to believe that the
23 trademark work [performed during the first representation] would have required [counsel]
24 to obtain” information regarding the distribution system at issue in the second
25 representation. Merle Norman Cosmetics, Inc. v. U.S. Dist. Court, Cent. Dist. of California,
26 856 F.2d 98, 101 (9th Cir. 1988).
27
28

Here, as in Lewis and Merle Norman, the Plaintiff has not offered any evidence to
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1 establish that the information purportedly discussed 25 years ago in reference to the song
2 “No Vaseline” is the same information necessary to evaluate or prosecute Heller’s present
3 claims arising from “Straight Outta Compton,” which did not even exist at the time of the
4 alleged Katz Meeting. “No Vaseline” is a rap song, released in 1991, in which the author,
5 Ice Cube, responds to statements in songs by other individuals which are directed at him,
6 and then goes further to address misdeeds perpetuated by those same individuals. See Van
7 Hoesen Decl. Ex. 7. While it is common perception that Ice Cube’s song speaks about
8 N.W.A., and in fact names Eazy E, it does not mention Heller by name. See id.
9

In contrast, the present action concerns a movie produced twenty years after “No

10 Vaseline.” Plaintiff argues that the film depicts Heller treating Ice Cube (not Eazy E) badly
11 by discouraging Ice Cube from getting his own counsel, but nothing of the sort is referenced
12 in “No Vaseline.” See id. While these two alleged libels involve Heller’s relationship with
13 members of N.W.A., this is certainly not enough to create a substantial relationship between
14 the two matters. In fact, in one recent case involving successive representation of adverse
15 clients in “lemon law cases,” the California Court of Appeal found that the “trial court
16 abused its discretion in concluding that the prior cases were substantially related to the
17 current case just because they involved claims under the same statute.” Khani v. Ford
18 Motor Co., 215 Cal. App. 4th 916, 922 (2013) (rejecting trial court’s assumption that “all
19 lemon law cases raise similar legal issues”). To the contrary, the relevant inquiry is whether
20 the information imparted during the first representation is “directly at issue in,” or ha[s]
21 some critical importance to, the second representation.” Farris, 119 Cal. App. 4th at 680;
22 see also Somers v. Digital Realty Trust, Inc., 119 F. Supp. 3d 1088, 1107 (N.D. Cal. 2015),
23 aff’d, 850 F.3d 1045 (9th Cir. 2017) (no substantial relationship between legal advice
24 provided to plaintiff “regarding how to best negotiate an executive agreement” with
25 defendant, and representation of defendant against plaintiff’s “claims of discrimination”
26 related to plaintiff’s employment).
27
28

Here, there is no indication that “information material to the evaluation, prosecution,
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1 settlement or accomplishment of the former representation given its factual and legal issues
2 is also material to the evaluation, prosecution, settlement or accomplishment of the current
3 representation given its factual and legal issues.” Jessen, 111 Cal. App. 4th at 713. The
4 alleged one-time meeting in 1992 or 1993 between Heller and Katz has no relation to the
5 yet-to-be-made movie “Straight Outta Compton,” or any depiction in that movie of Heller’s
6 role with N.W.A., as complained about in the present action. For this reason, no substantial
7 relationship exists, and Plaintiff’s motion must be denied.
8
9
10

III.

Plaintiff Has Failed to Establish that Jerry Heller Conveyed any Confidential
Information to Joel Katz.

Moreover, the undisputed facts demonstrate that no confidential information could

11 have been exchanged at the alleged Katz Meeting because, putting aside the fact that Katz
12 denies obtaining any such information, (1) the presence of Heller’s “entourage” destroyed
13 any confidentiality, and (2) the facts Heller allegedly relayed to Katz could not have been
14 confidential, or if they were, have since been publicly disclosed. This lack of confidentiality
15 sinks Plaintiff’s motion, as “the critical concern [in the successive representation context]
16 is the possibility of use in the second representation of confidential information acquired
17 during the first representation.” Farris, 119 Cal. App. 4th at 681 (emphasis added).
18
19

a. The presence of unnecessary third parties destroyed any confidentiality.
Plaintiff has admitted that both Michael Klein and Terry Heller were present at the

20 alleged Katz Meeting, which was the only time during which Jerry Heller allegedly shared
21 “confidential information” with Joel Katz. Dkt. 72-1 ¶ 8; Dkt. 72-2 ¶ 8. The presence of
22 third parties destroys the confidentiality of attorney client communications when those
23 parties are not “reasonably necessary for the accomplishment of the purpose for which the
24 lawyer . . . was consulted.” Cal. Code of Evid. § 912(d). Moreover, “[w]here a third party
25 is present, no presumption of confidentiality obtains,” and the burden of proving
26 preservation of confidentiality rests “with the proponent of the privilege.” Behunin v.
27 Superior Court, 9 Cal. App. 5th 833, 844–45 (2017).
28

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1

In Behunin, the plaintiff’s attorney, Steiner, hired a public relations firm, Levick, to

2 create a website designed to encourage the defendants to settle the parties’ business dispute.
3 Id. at 837. The defendants sought discovery of communications among the plaintiff,
4 Steiner, and Levick. Id. The plaintiff argued that the communications were privileged, but
5 the court concluded that the disclosure of confidential information to a public relations
6 consultant was not reasonably necessary and therefore the privilege had been waived. Id.
7 The court reasoned that Behunin had “provided little evidence explaining how or why
8 communications among Levick, Steiner, and himself were reasonably necessary to assist
9 Steiner in his ability to advise Behunin or litigate his case.” Id. at 849. Although “Behunin
10 and Steiner stated they engaged Levick to ‘develop and deploy’ strategy, they intended their
11 communications with Levick to be confidential, and the goal of the agreement with Levick
12 was ‘to develop and deploy strategy and tactics of [Behunin’s] legal complaint’ in the
13 Sealutions lawsuit,” the court rejected these statements as “just conclusions.” Id. The court
14 explained further that the plaintiff “d[id] not include any evidentiary facts showing or
15 explaining why Steiner needed Levick’s assistance to accomplish the purpose for which
16 Behunin retained him.” Id.
17

Because third parties Terry Heller and Michael Klein were present at the Katz

18 Meeting, Plaintiff bears the burden of establishing how their presence was “reasonably
19 necessary” to the privileged communication. Yet Plaintiff makes no allegation that their
20 presence was necessary and certainly provides no evidence supporting such a finding.
21

Terry Heller and Michael Klein first asserted under oath that they were at the meeting

22 as a result of their employment with Ruthless Records. Spira Decl. Ex. 6 at 22, 25.
23 Apparently realizing that their presence in this capacity would certainly destroy any
24 privilege held by Heller personally (after that was pointed out to Plaintiff’s counsel in the
25 meet and confer process), Declarants changed their testimony to add that they were present
26 in their roles as putative “employee[s]/agent[s]” of Heller. Dkt. 72-1 ¶ 8; Dkt. 72-2 ¶ 8.
27 Yet even lending credence to Plaintiff’s revisionist history, these assertions remain “just
28

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1 conclusions.” Behunin, 9 Cal. App. 5th at 849. Plaintiff has failed to provide any
2 “evidentiary facts showing or explaining why [Katz] needed [Terry Heller’s and Michael
3 Klein’s] assistance to accomplish the purpose for which [Heller allegedly] retained him.”
4 Id.8
5

In essence, Plaintiff seeks to assert an “entourage” exception to the privilege rules

6 that would permit Heller to bring his friends and relatives to meetings without destroying
7 confidentiality. But as one California District Court recently held, a “business adviser,
8 trusted friend, and confidante” does not “need to know” about confidential attorney-client
9 communications in order to serve his function. Total Recall Technologies v. Palmer Luckey
10 and Oculus VR, LLC, No. 15-02281, 2016 WL 1298863, at *1, 4 (N.D. Cal. Apr. 4, 2016).
11 Moreover, California Courts routinely reject similar requests to broaden the privilege.
12 Since “[t]he privileges set out in the Evidence Code are legislative creations[,] the courts of
13 this state have no power to expand them.” Seahaus La Jolla Owners Assn. v. Superior
14 Court, 224 Cal. App. 4th 754, 766-67 (2014).
15

In short, the presence of third parties destroys the attorney-client privilege unless the

16 proponent meets its burden of demonstrating that “disclosing [the communications] to [the
17 third party] was reasonably necessary to accomplish the purpose for which the client
18 consulted the attorney.” Behunin, 9 Cal. App. 5th at 845. Plaintiff has failed to do so here.
19

b. The voluntary disclosure of information destroyed any confidentiality.

20

Under California law, privilege “is waived with respect to a communication protected

21 by the privilege if any holder of the privilege, without coercion, has disclosed a significant
22 part of the communication or has consented to disclosure made by anyone.” Cal. Code of
23 Evid. § 912. Thus, where a party who holds the privilege later “publicly broadcast[s]” the
24
8

Klein previously alleged in the context of a breach of contract action against Jerry Heller
25 that “Heller retained [Klein] for the purpose of providing Heller with security. . . . In
addition to providing security, [Klein] also assisted Heller with other matters, including the
26 negotiation of music industry related contracts.” Van Hoesen Decl. Ex. 10 ¶ 9. In other
words, Klein was a bodyguard who assisted Heller with contract negotiations. Neither of
27 these roles indicate that Klein was a “reasonably necessary” participant in the Katz Meeting
as required to maintain attorney client confidentiality.
28
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1 confidential information, the privilege is waived. Layer2 Communications, Inc. v. Flexera
2 Software LLC, No. 13-02131, 2014 WL 2536993 at *6-7 (N.D. Cal. Jun. 5, 2014).
3

In Flexera, the defendant sought to disqualify the plaintiff’s attorney for unethically

4 disclosing confidential communications. Id. at *5. The court held that the defendant could
5 not establish confidentiality where it fought attempts by plaintiff to designate the
6 information as confidential during discovery and subsequently included the relevant
7 information in its “publicly filed disqualification motion.” Id. at *6. According to the court,
8 “[b]y broadcasting on the public record what it claims to be confidential information,
9 Flexera has waived any assertion of privilege it could have made over this information.”
10 Id. Disqualification was therefore unwarranted. Id.
11

Similarly, in Johnson v. Superior Court, the California Court of Appeal rejected

12 disqualification based on successive representation where “the latest of the former
13 representations occurred more than eight years before the present action was instituted and
14 the significance of whatever financial information was imparted has no doubt been
15 substantially attenuated by the passage of so much time.” 159 Cal. App. 3d 573, 579 (1984).
16 The court also noted that the clients had “recently engaged in a dissolution of marriage,”
17 and “the public court records in that case undoubtedly reveal more current financial
18 information about real party than any [the attorney] could possess more than eight years
19 after his last representation of real party.” Id. For this reason, the court found “no showing
20 [the attorney] has any confidential information that could be used to real party’s
21 disadvantage,” and denied the motion to disqualify. Id.; see also In re von Bulow, 828 F.2d
22 94, 100 (2d Cir. 1987) (holding that “[b]y allowing publication of confidential
23 communications in his attorney’s book Reversal of Fortune, petitioner was held to have
24 waived his attorney-client privilege”).
25

According to Plaintiff, Heller shared “myriad confidential information with Joel Katz

26 concerning the detailed history of the rise and fall of N.W.A.,” including “personal facts,
27 financial information, and supporting evidence regarding why Ice Cube left N.W.A.” Dkt.
28

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1 72-1 ¶ 10. Over 25 years have passed since that meeting. In the intervening time period,
2 Heller published a memoir and drafted multiple screenplays, each detailing “the story of
3 Ruthless and N.W.A.” Dkt. 37 ¶¶ 23-26. In fact, Heller’s memoir contains a detailed
4 history of the rise and fall of N.W.A., a discussion of why Ice Cube left the group, and an
5 entire chapter dedicated to “answer[ing] the allegations of financial impropriety level
6 against me, first by Cube and then by Dre.” Van Hoesen Ex. 8 at 14-23. The book also
7 highlights a number of the perceived inaccuracies in “No Vaseline,” including through a
8 description of Heller’s and Eazy E’s joint bank accounts. Id. at 12-13 (explaining that
9 “Ruthless had three checking accounts, and Eazy and I were both signatories on two of
10 them.”). Moreover, Plaintiff’s complaint asserts that Heller “worked with” multiple writers
11 drafting “at least four [] screenplays” “relating the story of Ruthless and N.W.A.” Dkt. 37
12 ¶ 23. Yet nowhere does the complaint suggest that any of these writers signed non13 disclosure agreements before Heller disclosed the details of his story.
14

Heller also filed a 1997 breach of contract action against Ruthless Records that

15 similarly sets forth detailed facts regarding the history of Heller’s financial and business
16 dealings with Eazy E and Ruthless Records. For example, the verified complaint alleges
17 that:
18
19

• Eazy E “irrevocably assigned and agreed to pay Heller a twenty percent (20%)
commission.” Van Hoesen Ex. 9 ¶ 12(a).

20

• “Heller fully and faithfully performed his obligations as Wright’s personal manager

21

and as general manager of Ruthless,” including by helping “Wright establish personal

22

and business bank accounts” and “assist[ing] Wright in obtaining his first approvals

23

for credit.” Id. ¶ 19.

24

• “Contrary to normal industry practice, Heller was able to negotiate the retention of

25

both a substantial portion of the publishing rights on every song that went out under

26

the Ruthless label and, in most cases, the right to administer those songs.” Id. ¶ 24.

27 It is difficult to imagine that any information related to Heller’s relationship to Ruthless
28

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1 Records and N.W.A., including any of the facts potentially insinuated in “No Vaseline,”
2 remains confidential.
3

Heller’s “public[] broadcast[ing]” of “a significant part [if not all] of the

4 communication” he allegedly shared with Joel Katz has stripped away any confidentiality
5 that information may once have enjoyed. Flexera, 2014 WL 2536993 at *6-7; Cal. Code
6 of Evid. § 912. “[T]he critical concern [in this disqualification motion] is the possibility of
7 use in the second representation of confidential information acquired during the first
8 representation.”

Farris, 119 Cal. App. 4th at 681 (emphasis added).

Because no

9 confidential information exists, disqualification is unwarranted.
10
11
12

IV.

GT’s Immediate Implementation of an Ethical Wall Rebuts any Presumption
of Shared Confidences.

The Ninth Circuit has recognized that “[t]he changing realities of law practice call

13 for a more functional approach to disqualification than in the past.” In re Cty. of Los
14 Angeles, 223 F.3d 990, 997 (9th Cir. 2000). “An ethical wall, when implemented in a timely
15 and effective way, can rebut the presumption that a lawyer has contaminated the entire
16 firm.” Id. at 996. While the California Supreme Court has not spoken definitively on the
17 efficacy of ethical walls, the Ninth Circuit has predicted that “the California Supreme Court
18 may well adopt a more flexible approach to vicarious disqualification.” Id. at 995 (citing
19 People ex rel. Dep’t of Corps. v. Speedee Oil Change Sys., Inc., 20 Cal.4th 1135, 1151–52
20 (1999), where the California Supreme Court “left open the possibility that screening can
21 rebut the presumption of shared confidences within the firm”). At least one California Court
22 of Appeal has followed the Ninth Circuit’s reasoning in holding that “when a tainted
23 attorney moves from one private law firm to another, the law gives rise to a rebuttable
24 presumption of imputed knowledge to the law firm, which may be rebutted by evidence of
25 effective ethical screening.” Kirk v. First Am. Title Ins. Co., 183 Cal. App. 4th 776, 814
26 (2010), as modified (May 6, 2010). As the court explained:
27
28

The instant case illustrates the changing landscape of legal practice—we are
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1

concerned with the tainted attorney working in a different geographical office

2

and in a different practice group from the attorneys with responsibility for the

3

litigation. These are not attorneys discussing their cases regularly, passing

4

each other in the hallways, or at risk of accidentally sharing client confidences

5

at lunch. In a situation where the “everyday reality” is no longer that all

6

attorneys in the same law firm actually “work[ ] together,” there would seem

7

to be no place for a rule of law based on the premise that they do.

8 Id.at 802; see also State Comp. Ins. Fund v. Drobot, No. 13-956, 2014 WL 12579808, at *6
9 (C.D. Cal. July 11, 2014) (holding that Kirk “correctly reflect[s] the changing times in law
10 firm operation and culture”).
11

Despite the fact that GT strongly disputes the existence of any conflict of interest,

12 GT sprang into action to implement a prophylactic ethical wall immediately upon learning
13 of the alleged conflict. Rivera Decl. ¶ 4. That wall, which was fully implemented and
14 acknowledged less than two weeks after GT was apprised of the potential conflict of
15 interest, screens Joel Katz and Jeff Smith from any information or documents related to this
16 Litigation. Id. ¶¶ 7-10. Moreover, it is undisputed that even before the ethical wall was
17 implemented, neither Katz nor Smith — who work in a different practice group nearly 3,000
18 miles away from the Litigation team — conveyed to the GT Litigation team any information
19 related to the substance of the Litigation, or shared any information allegedly obtained at
20 the Katz Meeting. Katz Decl. ¶¶ 8, 9; Smith Decl. ¶¶ 16-18. Given the “changing realities
21 of law practice” in a global firm such as GT, Defendants have effectively “rebut[ted] the
22 presumption that a lawyer has contaminated the entire firm.” In re Cty. Of Los Angeles,
23 223 F.3d at 996-97.
24

Moreover, “[t]he purpose of a disqualification order is prophylactic, not punitive.”

25 Kirk, 183 Cal. App. 4th at 815. For this reason, the relevant inquiry is “whether there is a
26 genuine likelihood that allowing the attorney to remain on the case will affect the outcome
27 of the proceedings before the court.” Id. No such likelihood exists here, where GT’s
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1 prophylactic ethical wall, combined with the extremely limited nature of the defamation
2 claims at issue, render moot any putative conflict of interest.
3
4

V.

Plaintiff Has Waived his Right to Seek Disqualification.
When a party’s delay in seeking disqualification is unreasonable and causes

5 significant prejudice to the non-moving party, disqualification is waived. See River West,
6 Inc. v. Nickel, 188 Cal. App. 3d 1297, 1310 (1987); Liberty National Enterprises, L.P. v.
7 Chicago Title Insurance Co., 194 Cal. App. 4th 839, 845 (2011) (same).
8

In Liberty National Enterprises, the California Court of Appeal held that the

9 unreasonableness of the movant’s delay is determined by reference to factors including
10 “[t]he stage of litigation at which the disqualification motion is made,” the complexity of
11 the case, and whether “one can properly consider the possibility that the ‘party brought the
12 motion as a tactical device to delay litigation.’” 194 Cal. App. 4th at 846-47 (quotation
13 omitted). In that case, the court held that the delay was unreasonable because the timing of
14 the disqualification motion – “roughly midway through the case, which is a very bad time
15 to have to change lawyers” – reflected “a lack of concern on [the movant’s] part over the
16 alleged breach of confidentiality” and suggested the motion may have been tactically
17 motivated. Id. at 847-78. The court found that disqualifying the plaintiff’s counsel in these
18 circumstances would have caused extreme prejudice given counsel’s “knowledge of this
19 case and his success with this case.” Id. at 848.
20

In River West, the court similarly found extreme prejudice resulting from

21 unreasonable delay in seeking disqualification of counsel where the target of the motion
22 had already engaged in “over 3,000 hours of litigation effort at a cost of $387,000.” 188
23 Cal. App. 3d at 1313. The court noted: “We can assume there is a substantial ‘work
24 product’ in the hands of plaintiffs’ counsel. The rights to its possession and interpretation
25 would become a serious and complex issue if counsel were disqualified prior to its use.
26 This unnecessary complication and prejudice is a direct by-product of the delay.” Id.
27
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Here, Plaintiff waited 10 months after filing this Litigation – until August 2016 – to
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1 alert Defendants’ counsel to the alleged conflict of interest. By that point, Defendants had
2 already engaged in extensive motion practice, and GT’s “knowledge of this case and [its]
3 success with this case” was (and continues to be) extremely valuable to Defendants’
4 strategy going forward. Liberty, 194 Cal. App. 4th at 848; Scott Decl. ¶ 6. In fact, six GT
5 lawyers, plus several paralegals and legal assistants, have devoted substantial time to the
6 defense of the Litigation. Scott Decl. ¶¶ 4-8. Through March 31, 2017, GT timekeepers
7 have recorded a total of 1,296 hours defending the Litigation. Id. ¶ 4. Further, GT has filed
8 four largely successful motions to dismiss or strike Plaintiff’s complaints, and has appeared
9 for two oral arguments on those motions. Id. ¶¶ 6, 7. Yet Plaintiff claims that its delay in
10 raising the alleged conflict of interest is justified because Heller had no recollection of
11 alleged representation until his meeting with Michael Klein in August 2016. Dkt. 72 at 3.
12

Judge Guilford’s decision in State Compensation Insurance Fund v. Drobot, No. 13-

13 956, 2014 WL 12579808 (C.D. Cal. July 11, 2014), is instructive. There, the defendant
14 waited 11 months after the case was initiated to file a motion to disqualify the plaintiff’s
15 counsel, Irell & Manella (“I&M”). Id. at *9. The motion was based on the defendant’s
16 prior attorney client relationship with Matthew Sant, a former I&M partner. Id. The
17 defendant argued that he had waited 11 months to file the motion because he “didn’t realize
18 sooner the connection between Sant and I&M.” Id. However, the court found that the
19 evidence presented by the plaintiff in opposition to the disqualification motion, which
20 included emails between Sant and the defendant, “makes suspicious [the defendant’s] claim
21 that he didn’t make the connection about I&M until 11 months after this case started, and
22 raises an eyebrow about whether tactical abuse may underlie this motion.” Id. Moreover,
23 the court noted that the lawsuit, “though less than a year old, already has a long history of
24 motion practice,” and that the plaintiff had submitted evidence that “[r]eplacing I&M would
25 create a serious financial burden.” Id.
26

Similarly, Plaintiff’s contention that Heller did not realize the connection between

27 GT and Joel Katz until 10 months after this lawsuit was filed is suspect given (a) Plaintiff’s
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1 counsel’s ongoing interactions with Katz’s longtime colleague and partner Jeff Smith,
2 including in connection with the Litigation; (b) the fact that Heller’s sudden realization
3 occurred just one day before his scheduled deposition; and (c) Plaintiff’s admittedly
4 strategic basis for seeking disqualification, which does more than “raise[] an eyebrow about
5 whether tactical abuse may underlie this motion.” Drobot, 2014 WL 12579808, at *9.
6 Moreover, as in Drobot, this Litigation, “though less than a year old, already has a long
7 history of motion practice,” and Defendants have submitted evidence that “[r]eplacing [GT]
8 would create a serious financial burden” – which is, in fact, Plaintiff’s precise intention.
9 Id.; Scott Decl. ¶¶ 4-8.
10
11

CONCLUSION
For the foregoing reasons, Defendants respectfully request that this Court deny

12 Plaintiff’s motion for disqualification.
13
14
15

Respectfully submitted,

Dated: May 1, 2017

16

JENNER & BLOCK LLP

17
/s/Michael P. McNamara
Michael P. McNamara

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Attorneys for
Greenberg Traurig, LLP

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