Opinion
95 Civ. 8833 (RPP)
October 31, 2000
Counsel for Plaintiff: Fitzpatrick, Cella, Harper Scinto New York, N.Y. 10112-3801 By: Thomas H. Beck, Esq.
Counsel for Defendants: Clifford Chance Rogers Wells LLP New York, N.Y. 10166-0153 By: Philip E. Roux, Esq.
OPINION AND ORDER
By letter dated August 2, 2000, Rhône-Poulenc Rorer, Inc. ("RPR") moves the Court to reconsider and vacate its opinion and order dated July 19, 2000, which denied RPR's motion to disqualify Robert L. Baechtold, Esq., and his firm, Fitzpatrick, Celia, Harper Scinto ("FCHS"), from representing plaintiff Bristol-Myers Squibb Company ("Bristol") in the upcoming trial of this patent infringement declaratory judgment action. RPR requests that the Court disqualify Mr. Baechtold or, alternatively, certify the issue for immediate appeal to the Federal Circuit.
The Court also denied without prejudice Bristol's motion to bifurcate the trial of liability and damages.
The grounds for reconsideration asserted by RPR are that the Court apparently failed to appreciate (1) the effect of allowing Mr. Baechtold to act as trial counsel while the written and oral legal advice he rendered is placed in evidence; and (2) that the competency of Mr. Baechtold's opinion cannot be viewed solely from the point of Bristol's "state of mind." (RPR Letter dated August 2, 2000, at 1.)
At trial, Mr. Baechtold's legal opinion will be offered in evidence as a communication received by Bristol prior to its engaging in allegedly infringing acts. The opinion is being offered for the fact that it was received and for the effect it had on Bristol's state of mind, i.e. whether or not it acted willfully when it allegedly determined to infringe RPR's patent.
Discussion
Motions to disqualify opposing counsel are viewed with some disfavor in this Circuit. See Red Ball Interior Demolition Corp. v. Palmadessa, 908 F. Supp. 1226, 1239 (S.D.N.Y. 1995); Clark v. Bank of New York, 801 F. Supp. 1182, 1196-97 (S.D.N.Y. 1992); United States Football League v. Nat'l Football League, 605 F. Supp. 1448, 1452 (S.D.N.Y. 1985). Because litigants often make such motions for tactical reasons and because disqualification of counsel impinges on a party's right to counsel of its choice, the moving party bears the burden of establishing the need for disqualification. See Evans v. Artek Sys. Corp., 715 F.2d 788, 791-92 (2d Cir. 1983) (quoting Gov't of India v. Cook Indus.. Inc., 569 F.2d 737, 739 (2d Cir. 1978)); Stratagem Dev. Corp. v. Heron Int'l N.V., 756 F. Supp. 789, 792 n. 8 (S.D.N.Y. 1991). "[A]ny doubt as to the existence of a conflict of interest, however, is to be resolved in favor of disqualification." Evans v. Artek Sys. Corp., 715 F.2d at 792 (quotingGlueck v. Jonathan Logan. Inc., 512 F. Supp. 223, 228 (S.D.N.Y. 1981)aff'd 653 F.2d 746 (2d Cir. 1981))); see Hull v. Celanese Corp., 513 F.2d 568, 571 (2d Cir. 1975).
Under this district's Local Civil Rules 1.3 and 1.5, attorneys practicing in this Court must adhere to the Code of Professional Responsibility as adopted by the Appellate Divisions of the New York State Supreme Court. See S.D.N.Y. Local Civ. R. 1.3, 1.5(b)(5).
DR 5-102
DR 5-102 of the New York Code of Professional Responsibility now reads as follows:
A. A lawyer shall not act, or accept employment that contemplates the lawyer's acting, as an advocate on issues of fact before any tribunal if the lawyer knows or it is obvious that the lawyer ought to be called as a witness on a significant issue on behalf of the client except that the lawyer may act as an advocate and also testify:
1. If the testimony will relate solely to an uncontested issue.
2. If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony.
3. If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or the lawyer's firm to the client.
4. As to any matter, if disqualification as an advocate would work a substantial hardship on the client because of the distinctive value of the lawyer as counsel in the particular case.
B. Neither a lawyer nor the lawyer's firm shall accept employment in contemplation [sic] or pending litigation if the lawyer knows or it is obvious that the lawyer or another lawyer in the lawyer's firm may be called as a witness on a significant issue other than on behalf of the client, and it is apparent that the testimony would or might be prejudice [sic] to the client.
C. If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that the lawyer ought to be called as a witness on a significant issue on behalf of the client, the lawyer shall not serve as an advocate on issues of fact before the tribunal, except that the lawyer may continue as an advocate on issues of fact and may testify in the circumstances enumerated in DR 5-102 (A)(1) through (4).
D. If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that the lawyer or a lawyer in his or her firm may be called as a witness on a significant issue other than on behalf of the client, the lawyer may continue the representation until it is apparent that the testimony is or may be prejudicial to the client at which point the lawyer and the firm must withdraw from acting as an advocate before the tribunal.
The prior opinion of this Court quoted DR 5-102 prior to June 30, 1999.
N.Y. COMP. CODES R. REGS. tit. 22 § 1200.21 (2000) (hereinafter 22 N YC.R.R. § 1200.21).
RPR maintains that Mr. Baechtold's opinion letter of August 24, 1993, (the "Opinion
Letter") is testimony and that, accordingly, he must be disqualified under DR 5-102 since Bristol's use of the Opinion Letter is the equivalent of Mr. Baechtold being called as a witness on a significant issue on behalf of Bristol. The Opinion Letter, however, is not testimony. It is evidence and it will be admitted in evidence insofar as it bears on the issue of whether or not Bristol acted willfully when it decided to manufacture Taxoltrade: (synthetic taxol) with evidence of RPR's patent. Even if the Opinion Letter were regarded as testimony, it would relate to an uncontested issue, i.e., that it contains the advice that Bristol received. In that circumstance, Mr. Baechtold would not be disqualified since a lawyer's testimony "solely on an uncontested issue" is permissible as the first exception to DR 5-102(A) and DR 5-102(C). As a matter of law, whether the Opinion Letter is a correct analysis of the issues it addressed is not the relevant issue for the jury; rather the issues will be (1) whether Bristol received and exercised due care in relying on a legal opinion, and (2) whether that legal opinion appears to be competent. See Ortho Pharmaceutical Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992).
There is no need for Bristol to call Mr. Baechtold as a witness because first, the Opinion Letter can be admitted through the testimony of a Bristol recipient. See Amsted Indus. Inc. v. Nat'l Castings. Inc., No. 88 C 924, 1990 U.S. Dist. LEXIS 8553 at *9 16 U.S.P.Q.2d 1737 (N.D. Ill. July 11, 1990) (holding that the attorney who authored the opinion letter need not provide the foundation for its admission into evidence). Once admitted, the Opinion Letter will be evaluated for competency under the standard articulated in Westvaco Corp. v. Int'l Paper, 991 F.2d 735, 743-44 (Fed. Cir. 1993). "In considering the reasonableness of the accused infringer's reliance on an opinion of counsel, the opinion letter should be reviewed for its "overall tone, its discussion of case law, its analysis of the particular facts and its reference to inequitable conduct."' Id. (quoting Ortho Pharmaceutical Corp., 959 F.2d at 945). "Opinion letters should be reviewed to determine whether they evidence an adequate foundation based on a review of all necessary facts or whether they are conclusory on their face. . ." Id. at 743. In Westvaco, the court found that the opinion letters in question were clearly competent when each opinion letter contained a review of the file history of the patent, the prior art of record and additional prior art, and a detailed analysis of the validity and infringement issues, including discussion of the prior art, the accused device and the claim language as to each claim separately. Id. at 744. The Opinion Letter on its face meets this standard of competency.
Secondly, the Opinion Letter is to be offered on the issue of willful infringement only. Since Mr. Baechtold was not the author of the Wong or the Ueda memoranda, he cannot opine on what Drs. Wong and Ueda meant in their memoranda when using the words "equivalent" or "directly substituted." During his deposition, RPR did not confront Mr. Baechtold with either of those memoranda to determine if he was aware of them when he opined Accordingly, since RPR did not establish that Mr. Baechtold was aware of those memoranda when he wrote the August 24, 1993, Opinion Letter, RPR has not carried its burden of laying the foundation for this Court to conclude that at trial he "ought to be called as a witness" by Bristol to explain any inconsistency RPR may suggest as to the Doctrine of Equivalents. See Evans v. Artek Sys. Corp., 715 F.2d at 791 (noting the requirement of a "high standard of proof on the part of one who seeks disqualification" of counsel (quotingGov't of India v. Cook Indus.. Inc., 569 F.2d at 739)).
If the Wong or Ueda memoranda were not submitted to Mr. Baechtold for consideration in connection with his Opinion Letter, then that fact relates to the issue of whether Bristol was entitled to rely on Mr. Baechtold's Opinion Letter or whether it intentionally withheld material information from him. RPR chose not to confront Mr. Baechtold at his deposition with the presence of the Wong and Ueda memoranda among those documents submitted by Bristol to Mr. Baechtold while he was preparing his Opinion Letter, which RPR received through document discovery. Thus RPR did not challenge the competency of Mr. Baechtold's Opinion Letter based on his receipt of those documents and this Court will not assume for purposes of this opinion that those documents were submitted to Mr. Baechtold by Bristol. Additionally, RPR's argument that Mr. Baechtold should testify regarding whether the Wong or Ueda memoranda were submitted to him by Bristol under the reasoning of Amsted Indus. Inc. v. Nat'l Castings. Inc., No. 88 C 924, 1990 U.S. Dist. LEXIS 8553, 16 U.S.P.Q.2d 1737 (N.D. Ill. July 11, 1990) is not applicable. The court inAmsted Indus. Inc. v. Nat'l Castings. Inc., did not discuss whether the counsel's testimony was necessary or prejudicial and should be disqualified under DR 5-102, but only whether trial counsel, who was author of a non-infringement opinion letter, could be called as a witness by the opposing side. See id. at *10-15.
Thirdly, Mr. Baechtold did not address in his Opinion Letter whether either the manufacture of the B-lactam side chain in Syracuse, New York, or Bristol's causing the process to be manufactured in Swords, Ireland, constitute infringing acts and violate 35 U.S.C. § 271 (f). RPR first raised these issues about three years ago, which was after the date of the Opinion Letter. Since Mr. Baechtold's Opinion Letter did not address those issues, RPR has not shown that Bristol ought to call him as a witness regarding them.
Thus the Court adheres to its determination that under DR 5-102(A) or DR 5-102(C), RPR has failed to show that Mr. Baechtold "ought to be called as a witness on a significant issue on behalf of his client." See 22 N.Y.C.R.R. § 1200.21.
The Court also adheres to its determination that Mr. Baechtold should not be disqualified due to the strictures of DR 5-102(B) and DR 5-102 (D). See id. RPR has not shown that Mr. Baechtold should be disqualified because if he is called by RPR his testimony "would or might be prejudicial" to Bristol in violation of DR 5-102(B) or DR 5-102(D). See id RPR has made no showing that Mr. Baechtold's testimony would be adverse to Bristol. Instead, all indications are that his testimony would support Bristol's position.
First, Bristol maintains that Drs. Wong and Ueda were nor using the term "equivalent" in the manner required to meet the legal definition under the Doctrine of Equivalents. (Bristol Letter dated May 30, 2000, at 7-10.) Mr. Baechtold testified that there are "very substantial differences between the beta lactam and the, and the open chain phenylisoserine" resulting from the way Bristol carried the process out, and that the beta lactam, metal alkoxide process used by Bristol does not work in the same way. (RPR Letter dated May 17, 2000, Ex. 4 (Baechtold Deposition) at 156-157; see also Opinion Letter at 27-28); see Hilton Davis Chem. Co. v. Warner-Jenkinson Co. Inc., 62 F.3d 1512, 1518 (Fed. Cir. 1995), rev'd and remanded on other grounds, 520 U.S. 17 (1997), (noting that the doctrine of equivalents test requires that, at a minimum, there be similarity of function, way and result in the claimed and accused processes (citing Graver Tank Mfg. Co. v. Linde Air Prod. Co., 339 U.S. 605, 610 (1950) (emphasis added))).
Second, Bristol maintains that the issue of a violation of 35 U.S.C. § 271 (f) is a red herring not raised by RPR in meetings with Bristol concerning possible infringement before the litigation. (Bristol Letter dated May 30, 2000, at 11-12.) RPR has offered no evidence of prejudicial or necessary testimony from Mr. Baechtold concerning the alleged violation of 35 U.S.C. § 271 (f).
Third, Bristol refutes RPR's contention that Mr. Baechtold's legal advice contained in a December 29, 1994, letter is prejudicial to Bristol because it is at odds with Bristol's current position because the December 29, 1994, letter opined that 35 U.S.C. § 271 (e) applies only after a product candidate is identified. (RPR Letter dated May 17, 2000, at 5; Bristol Letter dated May 30, 2000, at 12-14.) Baechtold has testified that the December 29, 1994, letter did not address whether 35 U.S.C. § 271 (e)(1) applies before a product candidate is identified. See Bristol Letter dated May 30, 2000, Exhibit 5 (Baechtold Deposition) at 44). Accordingly, Bristol asserts that since the December 29, 1994, letter did not address the point, there is no such contradiction. (Bristol Letter dated May 30, 2000, at 12-14.) Thus, if Baechtold is called as a witness by RPR, RPR has not shown that his testimony would be adverse to Bristol.
The above discussion is not a resolution of the claims raised by RPR in its letter of August 2, 2000, however, because the Opinion Letter does opine on the central issues in this litigation — direct infringement and infringement under the Doctrine of Equivalents.
RPR also argues that the "unsworn witness" rule should apply and that it requires Mr. Baechtold's disqualification in this civil case. The unsworn witness rule, which is generally applied in criminal cases, applies to the situation where a witness and opposing trial counsel each have first-hand knowledge of an event to be presented a trial. See United States v. Kwang Fu Peng, 766 F.2d 82, 86-87 (2d Cir. 1985); United States v. McKeon, 738 F.2d 26, 34-35 (2d Cir. 1984); United States v. Cunningham, 672 F.2d 1064, 1074-75 (2d Cir. 1982); United States v. Cruz, No. 94 Cr. 313 (CSH), 1995 U.S. Dist. Lexis 10972 at *3-5 (S.D.N.Y August 4, 1995); United States v. Jacobs, No. 91 Cr. 48 (MBM), 1992 U.S. Dist. Lexis 530 at *6 (S.D.N Y January 22, 1992); and United States v. Reale, No. 90 Cr. 1096 (DAB), 1997 U.S. Dist. Lexis 6137 at *1445 (S.D.N.Y. May 6, 1997). This first-hand knowledge allows opposing trial counsel to suggest to the jury during examination of the witness or during summation that counsel was a witness to the event and that his version of the facts is more trustworthy than the witness's version. See United States v. Kwang Fu Peng, 766 F.2d at 86-87. "[H]is role as advocate may give his client an unfair advantage, because the attorney can subtly impart to the jury his first-hand knowledge of the events without having to swear an oath or be subject to cross examination."United States v. Locascio, 6 F.3d 924, 933 (2d Cir. 1993). Counsel thus "implicitly testif[ies] as to his version" of the facts, United States v. Cunningham, 672 F.2d at 1074, and "implicitly put[s] his own credibility at issue," United States v. McKeon, 738 F.2d at 35.
Disqualification of a party's chosen attorney, however, is "a drastic remedy to the unsworn witness problem." Locascio, 6 F.3d at 934. InLocascio, the court found that the attorney in question had "allegedly entangled himself to an extraordinary degree in the activities of the [defendantsl." Id. This entanglement included: (1) being recorded on government tapes when discussions of allegedly illegal activity took place; (2) allegedly being involved in a tax fraud count; (3) acting as house counsel to the defendants, which could have been used to prove the criminal enterprise; and (4) representing government witnesses which conflicted with his representation of the defendant. Id.
In support of their disqualification claim, RPR asserts that Mr. Baechtold is an unsworn witness because he participated in the events underlying Bristol's defense against willful infringement in preparing the Opinion Letter. (RPR Letter dated August 21, 2000, at 3.) Unlike the attorney in Locascio, Mr. Baechtold is not alleged to have participated in any criminal or, in this case, infringing activity. Id. Additionally, the court in Locascio was primarily concerned that the attorney's presence during a recorded conversation would give added credibility to his version of the conversation because he was a witness to it. Id. Here, the Opinion Letter is not a fact or event such as a conversation. Instead, it is a legal opinion rendered by an attorney. A legal opinion is defined as "[a] document prepared by an attorney for his client, embodying his understanding of the law as applicable to a state of facts submitted to him for that purpose." BLACK'S LAW DICTIONARY 985 (5th ed. 1979). Mr. Baechtold's authorship of the Opinion Letter will not give Bristol's position on infringement added credibility because the Opinion Letter represents Mr. Baechtold's understanding of the law as applied to facts submitted to him by Bristol. Mr. Baechtold's knowledge of that opinion is not equivalent to knowledge of facts or events as described inLocascio.
Further, the Opinion Letter itself, not Mr. Baechtold's credibility, will be reviewed for competency under the relevant objective standard articulated in Westvaco Corp. v. Int'l Paper, 991 F.2d at 743-44. Since the Opinion Letter stands on its own, no opposing witness will testify about its preparation. If requested, the Court will not allow Mr. Baechtold to suggest to the jury that his credibility as the preparer of the Opinion Letter entitles the Opinion Letter's conclusions of non-infringement to more credibility than an opposing expert's opinion. Only the credibility of the parties' expert witnesses on infringement will be at issue in the liability phase of the trial. Nor will the Opinion Letter be used as a basis to cross-examine opposing experts. Mr. Baechtold, as counsel, will not be allowed to "implicitly testif[y] as to his version" of the facts without being subject to oath or cross-examination. Accordingly. Mr. Baechtold's preparation of the Opinion Letter does not warrant the "drastic remedy" of disqualification as an unsworn witness. See Locascio, 6 F.3d at 934.
RPR asserts that Mr. Baechtold has knowledge of whether the Wong or Ueda memoranda were submitted to him for review in preparation of his Opinion Letter and that knowledge of this fact makes Mr. Baechtold an unsworn witness. To the contrary, Mr. Baechtold testified in his deposition that he could not recall whether those documents were provided to him by Bristol for preparation of his Opinion Letter. (Bristol Letter dated August 10, 2000, Exhibit 1 (Baechtold Deposition) at 67-68.) Thus RPR's assertion that Mr. Baechtold has knowledge of facts which implicate the unsworn witness rule is unsupported.
If Mr. Baechtold remains as trial counsel, he will have to argue to the jury the correctness of Bristol's position on infringement and the Doctrine of Equivalents in his summation and he may cross examine RPR's expert witnesses on those issues. The fact that this suit and RPR's suit against Bristol are both pending will make it abundantly clear to the jury from the outset of trial that RPR claims infringement and Bristol claims no infringement. The Opinion Letter will not change that equation and the jury can be so instructed.
For the foregoing reasons, and because of the hardship to Bristol of disqualifying Mr. Baechtold at this stage of a long and complex proceeding (see DR 5-102(A)(4)), RPR's requests that the Court disqualify Mr. Baechtold or, alternatively, certify the issue for immediate appeal to the Federal Circuit are denied.
IT IS SO ORDERED.