Phagocytosis is the process by which certain single-celled organisms, like the amoeba, devour food. They essentially ooze around their “prey” and they merge with it.
Companies grow the same way, more or less, but they have a variety of ingestion options: merger, acquisition, asset purchase, and more complicated versions of these basic ideas.
When a company gulps down a competitor does it get to eat its lawyers too?
Putting it another way, when Company A gobbles up Company B, does company A get to sue Company C and disqualify Company C’s lawyers, claiming that Company A is a “former client” of Company C’s lawyers by virtue of Company A’s absorption of company B?
Let’s put some facts on this abstraction: Select Comfort sued Comfortaire in 2011, later bought Comfortaire’s assets, and then Select Comfort sued Personal Touch Beds, where some previous Comfortaire executives worked — executives who had collaborated with the Twin Cities law firm, Maslon, in the earlier Select Comfort litigation. And Select Comfort also hired former Comfortaire executives who had worked with Maslon against Select Comfort. Comfortaire hired Maslon in 2011 and Personal Touch Beds and former-Comfortaire execs hired Maslon in the later case…
Can Maslon represent Personal Touch Beds and take on Select Comfort again?
Select Comfort argued otherwise, supported by the expert opinion and analysis of Twin Cities ethics maven, Eric Cooperstein.
Maslon responded with a thorough and persuasive brief.
The short order on the motion by U.S. District Court Judge Donovan W. Frank (D. Minn.) says a longer memo will follow. Stay tuned…
And, finally, who pays for this thorough analysis of conflicts rules? The clients? That seem fair? It is a testament to the Maslon firm that Select Comfort would spend the time and money trying to disqualify the firm and, again, a testament to the Maslon firm that its clients would invest the money to keep Maslon on rather than just jumping ship to other lawyers whose representation Select Comfort could not challenge.