Another Disqualification Based Upon Implied Attorney-Client Relationships with Corporations Affiliated with the Client

By David Hricik, Mercer Law School

Over on the main page, Dennis summarized the grant of a motion to disqualify in the non-precedential decision in Trimble Inc. v. PerDiem Co. (Fed. Cir. Jan. 28, 2020) (Taranto, J.).  The firm representing PerDiem on appeal (another firm had represented it in the trial court) was at the same time providing prosecution advice to a subsidiary of Trimble.  Applying an amorphous multi-factor test that is common, the panel held that because the firm was representing the subsidiary, it could not be adverse to the parent on appeal. Hence, the firm was disqualified.

Oddly enough, probably at the moment this opinion was released, I was speaking at the Association of Corporate Patent Counsel meeting, with Mercedes Meyer, and discussing this recurring one:  the corporate client moves to disqualify a lawyer who is adverse, not to the corporate client, but to a subsidiary, parent, or affiliate.  Where, as here it seems was the case, the lawyer and client do not clearly define whether representation of one entity means the lawyer represents others, they leave it for a court to decide which entities are “the client” by examining the corporate structure, how the entities’ legal services are provided, and other often unpredictable factors.

It may be a difficult issue to broach at the onset of a representation, but it also may be better for both client and lawyer to understand what scope of loyalty the client expects and the lawyer can understand what potential future business she must forego, and that benefits the firm, its future clients, and the corporate entity.

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.