GABRIEL W. GORENSTEIN, United States Magistrate Judge.
John Wiley & Sons, Inc., Cengage Learning, Inc. ("Cengage"), and Pearson Education, Inc. ("Pearson") brought this suit against Book Dog Books, LLC ("BDB") and Philip Smyres alleging copyright infringement, trademark infringement, and other claims relating to defendants' purported distribution of counterfeit textbooks. Plaintiffs have filed a motion to disqualify Neil B. Mooney as counsel for
We provide a limited chronology of the history of the parties' disputes, with an emphasis on describing instances where Mooney has given testimony or submitted statements to a court.
Plaintiffs are publishing companies that provide a wide range of educational products for students and professionals. See Second Amended Complaint, filed May 27, 2015 (Docket #263) ("SAC"), ¶ 1. BDB is a company that buys and sells textbooks, including some textbooks published by plaintiffs. Id. ¶ 2. Smyres is the owner of BDB. Id. ¶¶ 14, 26; Answer to Second Amended Complaint, filed June 10, 2015 (Docket #264), ¶ 14.
In October 2007, plaintiffs filed a lawsuit against Smyres and others for copyright infringement. Id. ¶¶ 3, 30; see Complaint, filed Oct. 2, 2007 (Docket #1 in Cengage Learning Inc. et al. v. Buckeye Books et al., No. 07 Civ. 8540 (S.D.N.Y.) (the "2007 Action")). The parties settled the 2007 Action through written agreement. See Settlement and Mutual Releases, dated July 11, 2008 (annexed as Ex. 1 to Declaration of Julie C. Chen, filed Jan. 26, 2015 (Docket #204)) ("Settlement Agreement"), ¶ 4.
On December 18, 2012, the defendants in this case filed a lawsuit against the plaintiffs in this case in the Southern District of Ohio.
Plaintiffs filed the instant action on February 4, 2013. See Complaint, filed Feb. 4, 2013 (Docket #1). In their second amended complaint, plaintiffs allege claims for copyright infringement, SAC ¶¶ 59-69; trademark infringement, id. ¶¶ 70-76; trademark counterfeiting, id. ¶¶ 77-80; illegal importation of goods bearing infringing trademarks or names, id. ¶¶ 81-84; trademark dilution, id. ¶¶ 85-89; unfair competition and false designation of origin, id. ¶¶ 90-96; and breach of contract, id. ¶¶ 97-102. Pearson also alleges a claim for conspiracy to commit fraud. Id. ¶¶ 103-09.
One of the issues that has arisen in this litigation relates to a provision of the Settlement Agreement that required defendants to disclose to plaintiffs the foreign and domestic sources of any pirated copies of plaintiffs' textbooks, including "the name and location of the entity from whom such books were purchased, the types of books purchased, and the year(s) that [defendants] purchased such books." Settlement Agreement ¶ 10. Pursuant to this provision, defendants disclosed that a company in Thailand named Best Books World was the supplier of "most if not all" of the counterfeit books purchased by defendants. See Email, dated Sept. 10, 2008 (annexed as Ex. 2 to Plaintiffs' Memorandum in Support of Their Motion to Compel Production of Documents and Testimony, filed Mar. 26, 2014 (Docket #109) ("Docket #109")) (the "Disclosure"), at BP-SMY-025504; Opinion and Order, filed May 7, 2014 (Docket #130) ("May 7 Order"), at 2.
At Smyres's deposition on November 20, 2013, plaintiffs' counsel showed Smyres a copy of the Disclosure. See Deposition of Philip Smyres, dated Nov. 20, 2013 (annexed in part as Ex. 5 to Docket #109) ("Smyres Dep."), at 195-96. When asked if he had ever seen this document, Smyres responded, "Maybe years ago. I don't know." Id. at 196. Although Smyres did not remember the Disclosure, he did not deny that he "may have prepared" it. Id. However, Smyres testified that he had "always... thought it was communicated that Wirat Education was the source of most of the counterfeit[s]." Id. Later, he testified that he was "100 percent sure" he communicated to Mooney "that Wirat Education was the source of almost all of the counterfeit[s]," id. at 198, and that he thought he had directed Mooney to disclose that Wirat Education, not Best Books World, was the major source, see id. at 202.
The Court then granted plaintiffs' motion to take a deposition of Mooney limited to the issue of his communications with Smyres on this topic. See May 7 Order at 6-10. The deposition took place on May 30, 2014. See Deposition of Neil Mooney,
On January 26, 2015, plaintiffs filed a motion for partial summary judgment, see Plaintiffs' Motion for Partial Summary Judgment, filed Jan. 26, 2015 (Docket #200), seeking a ruling that defendants breached the Settlement Agreement by bringing a lawsuit in the Southern District of Ohio in contravention of a forum selection clause contained the agreement, see Plaintiffs' Memorandum of Law in Support of Motion for Partial Summary Judgment, filed Jan. 26, 2015 (Docket #202), at 6-9; First Amended Complaint, filed Apr. 24, 2013 (Docket #16), ¶¶ 102-06; SAC ¶¶ 97-102; Settlement Agreement ¶ 19. In support of their opposition, defendants filed a declaration from Mooney. See Declaration of Neil B. Mooney in Support of Defendants' Memorandum in Opposition to Plaintiffs' Motion for Partial Summary Judgment, dated Feb. 26, 2015 (annexed as Attach. #1 to Defendants' Response to Plaintiffs' Rule 56.1 Statement of Facts [Docket No. 201], filed Feb. 26, 2015 (Docket #226)) ("Mooney Decl."). In the declaration, Mooney states that, as "lead attorney representing Mr. Smyres and defendants in the 2007 Action for purposes of negotiating a settlement of that action," Mooney "engaged in multiple communications with plaintiffs' counsel and was the primary person to communicate defendants' demands and intentions for settlement." Id. ¶ 6.
Mooney also made reference to paragraph 11 of the Settlement Agreement, see Mooney Decl. ¶¶ 9-12, which required plaintiffs to disclose information to the defendants regarding known counterfeiters, see Settlement Agreement ¶ 11 (the "Notification Provision"). Mooney stated that the Notification Provision was a "highly contested provision," and that it "was a term defendants strongly insisted upon throughout settlement negotiations. Through [Mooney], defendants stated firmly to [plaintiffs] that defendants would not agree to a settlement of the 2007 Action unless [plaintiffs] would agree to provide notices of known pirate edition suppliers." Id. ¶ 9. He also states that plaintiffs were "highly resistant" and "unwilling to agree to include that term," id. ¶ 10, but at defendants' insistence, and after Mooney "made it clear during negotiations that Mr. Smyres and defendants would not have agreed to enter into th[e] settlement but for [plaintiffs'] promise to give the notices," plaintiffs agreed to the term, id. ¶ 11.
"The authority of federal courts to disqualify attorneys derives from their
While federal courts look to state disciplinary rules when considering motions for disqualification, "such rules need not be rigidly applied as they merely provide general guidance." Mori v. Saito, 785 F.Supp.2d 427, 432 (S.D.N.Y.2011) (internal citations and quotation marks omitted). Even a violation of disciplinary rules "may not warrant disqualification." GSI Commerce Sols., Inc. v. BabyCenter, L.L.C., 618 F.3d 204, 209 (2d Cir.2010) (citation omitted). Rather, "[t]he disqualification of an attorney in order to forestall violation of ethical principles is a matter committed to the sound discretion of the district court." Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72-73 (2d Cir.1990) (citations omitted). In exercising this power, courts "balance a client's right freely to choose his counsel against the need to maintain the highest standards of the profession." Hempstead Video, Inc., 409 F.3d at 132 (citations and internal quotation marks omitted).
Rule 3.7(a) of New York's Rules of Professional Conduct addresses the situation where an attorney may be called as a witness:
See N.Y. Comp.Codes R. & Regs. tit. 22, § 1200.0 Previously, New York adhered to the Model Code of Professional Responsibility, which similarly provided that:
N.Y. Comp.Codes R. & Regs. tit. 22, § 1200.21 (repealed 2009).
These rules, commonly referred to as "advocate-witness" rules, are based upon concerns that:
Ramey v. Dist. 141, Int'l Ass'n of Machinists & Aerospace Workers, 378 F.3d 269, 282-83 (2d Cir.2004) (citation omitted). Additionally, "when one individual assumes the role of both advocate and witness it may so blur the line between argument and evidence that the jury's ability to find facts is undermined." Id. (citation, internal quotation marks, and alterations omitted).
"`Because the courts must guard against tactical use of motions to disqualify counsel, they are subject to fairly strict scrutiny, particularly motions' based on the witness-advocate rule." Dolenec v. Pressler & Pressler L.L.P., 2014 WL 6632942, at *3 (S.D.N.Y. Nov. 24, 2014) (quoting Lamborn v. Dittmer, 873 F.2d 522, 531 (2d Cir.1989)). "Disqualification under subsection (a) applies only when the attorney-witness actually serves as trial counsel." Corrado v. N.Y. State Unified Court Sys., 2014 WL 119407, at *2 (E.D.N.Y. Jan. 10, 2014) (citing Murray v. Metro. Life Ins. Co., 583 F.3d 173, 179 (2d Cir.2009); Finkel v. Frattarelli Bros., Inc., 740 F.Supp.2d 368, 373 (E.D.N.Y.2010)). Further, "[d]isqualification may be required only when it is likely that the testimony to be given by the witness is necessary." S & S Hotel Ventures Ltd. P'ship v. 777 S.H. Corp., 69 N.Y.2d 437, 445-46, 515 N.Y.S.2d 735, 508 N.E.2d 647 (1987). Additionally, where only the moving party intends to call the adversary's attorney as a witness, "the movant must demonstrate both that the lawyer's testimony is `necessary' and that there exists a `substantial likelihood that the testimony would be prejudicial to the witness-advocate's client.'" Acker, 2013 WL 1285435, at *1 (quoting Finkel, 740 F.Supp.2d at 373); accord Gurvey, 2014 WL 6491281, at *5; Nimkoff, 2014 WL 1201905, at *8.
Plaintiffs move for the disqualification of Mooney because they assert that Mooney is a fact witness regarding the Settlement Agreement and "other relevant matters." Pl. Mem. at 10. In support, plaintiffs refer to the three occasions where Mooney has offered testimony as described above. Id. at 3-8, 10.
At the start, defendants in their opposition brief state unequivocally and repeatedly that they will not call Mooney as a witness in this matter. See Def. Mem. at 2 ("Attorney Mooney will not be a trial witness in this action."); id. ("there exists no likelihood of Attorney Mooney being a witness"); id. at 10 ("Attorney Mooney will not be a trial witness"). Having made this assertion, defendants will obviously be bound by it and thus the Court precludes defendants from calling Mooney as a trial witness.
Accordingly, plaintiffs bear the burden of demonstrating that Mooney's testimony is both "necessary" to their case and that eliciting Mooney's testimony will be prejudicial to defendants. We address each next.
We begin by noting that plaintiffs never even state that they intend to call Mooney as a witness. In their opening brief, plaintiffs assert only that they "may" rely on a portion of Mooney's testimony from the TRO hearing at which he asserted that defendants's practice was to stop doing business with suppliers of counterfeit textbooks.
When considering the "necessity" prong of the disqualification inquiry, "`[a] court should examine factors such as the
Here, plaintiffs have not met their "heavy burden," Gormin, 2009 WL 508269, at *2, to show that Mooney's testimony is necessary to their case. As for the testimony given at the TRO hearing, there is simply insufficient explanation as to why plaintiffs need to offer Mooney's testimony that defendants' practice was to stop doing business with suppliers of counterfeit textbooks. Not only is this statement entirely contrary to plaintiffs' position in this case, there is no showing that Smyres would not testify in exactly the same way.
Plaintiffs also fail to give any detail on why they will need to offer Mooney's testimony for the proposition that he disclosed to plaintiffs that Wirat Education of Thailand was the sole supplier of counterfeit books. While Mooney's testimony on this point, Mooney Dep. at 55, 64, is inconsistent with the Disclosure made by defendants in this case, it is consistent with the testimony of Smyres, who testified that he had always thought Wirat Education, not Best Books World, was the source of most of the counterfeits, Smyres Dep. at 196. Smyres also testified that he was sure that he had communicated to Mooney this information, that he thought he had told Mooney to disclose that Wirat Education was the source, and that he did not know how or why defendants disclosed Best Books World as the source. See id. at 198, 201-05. Thus, in the event plaintiffs wish to show that Smyres intended to communicate to plaintiffs that Wirat Education was the source of the counterfeits, they can use Smyres's testimony. They do not need Mooney's testimony on this point.
We have already devoted far more analysis to the factual issue of necessity than plaintiffs offer in their briefs. They do make some other arguments, however, that bear addressing. At one point, plaintiffs argue that defendants' "promises [not to call Mooney as a witness] do not end the inquiry ... because they have already repeatedly offered Mr. Mooney a[sic] fact witness in the pre-trial phase." Pl. Reply at 3-4. This is part and parcel of a larger theme of their moving papers: that having "injected" Mooney into a role as fact witness, Pl Mem. at 1, defendants have forfeited their right to use him as trial counsel. The cases cited by plaintiffs, Pl. Reply at 4, however, do not support the argument that Mooney's testimony is "necessary" at trial merely because he has previously offered testimony. In Dolenec, the court found that the movant had met his burden of demonstrating that he needed to call an attorney as a witness based on the importance of the factual testimony of the attorney and the unique knowledge of the attorney as to factual matters at issue. 2014 WL 6632942, at *5. Dolenec did not hold that the mere appearance of
Plaintiffs suggest that the availability of other witnesses at trial to testify as to matters that Mooney has testified to should not be relevant to the Court's inquiry. Pl. Mem. at 11 (whether other witnesses can be used at trial is "not ... the standard"). But the availability of other witnesses is essentially fatal to the "necessity" prong of the disqualification inquiry. As one case notes, "[w]here counsel's testimony would be merely cumulative of testimony provided by others, disqualification is not appropriate." Finkel, 740 F.Supp.2d at 375 (citations omitted); see also Solow v. Conseco, Inc., 2007 WL 1599151, at *4 (S.D.N.Y. June 4, 2007) ("The rule requires that a lawyer's testimony be necessary, not simply that it be the best evidence, and to that end, courts deem a lawyer's testimony necessary only if there [are] no other witnesses to the circumstances at issue.") (citation and internal quotation marks omitted) (alteration in original); Shabbir v. Pak. Int'l Airlines, 443 F.Supp.2d 299, 308 (E.D.N.Y.2005) ("[A] lawyer who could provide only cumulative testimony may act as trial counsel.") (citation omitted); Kubin, 801 F.Supp. at 1113 ("[A]n attorney whose testimony would merely corroborate the testimony of others may not be subject to disqualification.") (citation omitted).
For these reasons, we conclude that plaintiffs have not shown that Mooney's testimony is necessary to their case, and thus disqualification must be denied for this reason alone.
Plaintiffs application also founders on the "prejudice" prong of the disqualification inquiry. As to the "prejudice" requirement, "[t]estimony is deemed prejudicial where it is `sufficiently adverse to the factual assertions or account of events offered on behalf of the client, such that the bar or the client might have an interest in the lawyer's independence in discrediting that testimony.'" Gurvey, 2014 WL 6491281, at *4 (quoting Murray, 583 F.3d at 178) (additional citations omitted); accord Goodwine v. Lee, 2014 WL 4377855, at *3 (S.D.N.Y. Sept. 3, 2014). "`The movant bears the burden of demonstrating how and as to what issues in the case the prejudice may occur and that the likelihood of prejudice occurring is substantial.'" Kriss v. Bayrock Grp. LLC, 2014 WL 2212063, at *10 (S.D.N.Y. May 29, 2014) (quoting Paramount Commc'ns, Inc. v. Donaghy, 858 F.Supp. 391, 395 (S.D.N.Y.1994)). "Speculation as to the testimony that counsel would give is not sufficient to support a motion to disqualify." Finkel, 740 F.Supp.2d at 376 (citing Capponi v. Murphy, 772 F.Supp.2d 457, 472 (S.D.N.Y.2009); Donaghy, 858 F.Supp. at 394).
In the end, plaintiffs "fail to specify ... how [Mooney's] testimony would conflict with or be sufficiently adverse to [defendants] and why there is a substantial likelihood of prejudice." Nimkoff, 2014 WL 1201905, at *9 (citing Acker, 2013 WL 1285435 at *3). Instead, plaintiffs "`invite[] th[e] court to speculate that if called to testify, [Mooney] might contradict ... testimony given by [defendants];' however, the case law is clear that allegations based on conjecture do not suffice." Id. (quoting In re Galaxy Assocs., 114 B.R. 11, 14 (D.Conn.1990) (additional citations omitted)); see also Acker, 2013 WL 1285435 at *3 (denying motion to disqualify where defendants "fail[ed] even to assert, let alone show, that [plaintiff's counsel's] testimony would differ from Plaintiff's, or that any difference would be substantially prejudicial to Plaintiff, two key components of the disqualification analysis").
Because plaintiffs have not met their burden of showing that there is a "substantial likelihood" of prejudice to defendants, e.g., Acker, 2013 WL 1285435, at *1 (citation and internal quotation marks omitted), were they to call Mooney for the limited purposes they have hinted at, they have not met this prong of the disqualification inquiry either.
For the foregoing reasons, plaintiffs' motion to disqualify Neil B. Mooney as defendants' counsel (Docket #246) is denied.
SO ORDERED.
