Antitrust Law Daily Wrap Up, ANTITRUST—S.D.N.Y.: Sidley Austin not cast out of action over Bluefin Tuna conspiracy, (Mar 10, 2015)

By Greg Hammond, J.D.

A Mexican Bluefin Tuna exporter, claiming that a competitor and investment advisor conspired to restrain trade in the U.S. Bluefin Tuna market, was unable to disqualify international law firm Sidley Austin, LLP from representing the defendants, after the exporter previously entered into an attorney-client relationship with a Sidley partner. The federal district court in New York denied the exporter’s motion to disqualify, finding that there was not a sufficient risk of trial taint (Maricultura Del Norte, S. de R.L. de C.V. v. Worldbusiness Capital, Inc., March 9, 2015, McMahon, C.).

Background. Maricultura Del Norte, S. de R.L. de C.V. filed suit against Worldbusiness Capital, Inc., Umami Sustainable Seafood, Inc., Craig A. Tashjian, and Amerra Capital Management, LLC in December 2014, alleging—in part—a conspiracy to restrain trade in the United States Bluefin Tuna market. Both Tashjian and Amerra are represented by Sidley Austin. However, Maricultura entered into a series of conversations with Sidley partner Steven R. Selsberg beginning in 2012 and concluding February 27, 2013. Selsberg was located in the firm’s Houston office. Sidley partner Joel Mitnick currently represents Amerra and Tashjian in the instant action, and is based in the firm’s New York office. After learning that Mitnick represents Amerra and Tashjian, the plaintiffs moved to disqualify Sidley.

Attorney-client relationship. The court first determined that the plaintiffs and Selsberg formed an attorney-client relationship in 2013. Specifically, it found that Selsberg manifested his intent to become a party to the attorney-client relationship by actually providing requested legal advice, even though no fee was paid, no conflict check was run, no retainer was established, and no engagement letter was signed. In addition, the court concluded that a substantial relationship existed between Selsberg’s prior representation of plaintiffs and the present litigation, because the subject matter is identical. An irrebuttable presumption consequently arose that Selsberg had access to, or likely had access to, relevant privileged information while representing plaintiffs.

Conflict not imputed to Sidley. The remaining issue—whether Selsberg’s conflict should be imputed to Sidley—was answered in the negative by the court. Because the parties did not dispute that Selsberg was a partner with Sidley, a rebuttable presumption that the entire firm was conflicted arose. However, Sidley sufficiently rebutted this presumption because: (1) the firm set up an ethical screen between Selsberg and the lawyers working on the instant matter within 24 hours after Selsberg received a letter from the plaintiffs; (2) there was no evidence Selsberg shared any confidential information about the plaintiffs with Mitnick; (3) Selsberg and the attorneys involved in the instant litigation have all stated that they will abide by the ethical screen; (4) the geographic separation between the Houston and New York offices reduced the likelihood of sharing confidential information; (5) the nearly two-year delay between Selsberg’s attorney-client conversations with plaintiffs and the ultimate filing of the instant action diminished the likelihood of inadvertent disclosure; and (6) the limited nature of Selsberg’s earlier involvement weighed against imputation. The court therefore concluded that there was insufficient risk of trial taint, and the motion to disqualify Sidley was denied.

The case number is 14 Civ. 10143 (CM).

Attorneys: Ilan Rosenberg (Gordon & Rees, LLP) for Maricultura Del Norte, S. de R.L. de C.V. Brian Andrew Katz (Morgan Lewis & Bockius LLP) for Worldbusiness Capital, Inc. Bruce Wayne Bieber (Zimmet Bieber, LLP) for Umami Sustainable Seafood, Inc. Steven M. Bierman (Sidley Austin LLP) for Craig A. Tashjian and Amerra Capital Management, LLC.

Companies: Maricultura Del Norte, S. de R.L. de C.V.; Worldbusiness Capital, Inc.; Umami Sustainable Seafood, Inc.; Amerra Capital Management, LLC

Cases: Antitrust NewYorkNews