Rival doorbell companies seek rival appeals in Orrick disqualification case

A patent case between rival video doorbell companies is on hold as attorneys challenge a judge's disqualification of Orrick Herrington & Sutcliffe LLP under a new state bar rule governing attorney duties to prospective clients.

Ring Inc. and SkyBell Technologies Inc. see "substantial grounds for difference of opinion" in recent orders from U.S. District Judge James V. Selna, according to a stipulation filed this week, and both want the 9th U.S. Circuit Court of Appeals to weigh in.

Selna recently stayed the case as he considered a request to certify interlocutory appeals, which concern his Sept. 18 order prohibiting Orrick from representing Ring, and an Oct. 15 order that allows Orrick attorneys to transfer their work to Ring's new counsel. He granted the request on Thursday.

SkyBell's attorneys at Russ, August & Kabat moved in July to disqualify Orrick as opposing counsel for Ring because it was one of the firms SkyBell considered hiring before the lawsuit was filed. The pitch process -- described by attorneys as a beauty contest -- led to Orrick partner Travis M. Jensen obtaining confidential information from SkyBell relating to the litigation. Selna in September sided with SkyBell, writing in a 23-page order that Orrick "took no measures to avoid exposure to more information than was reasonably necessary."

The judge found no evidence of taint but said Jensen's lack of proactive protections violates California Rule of Professional Conduct 1.18. The rule doesn't take effect until Nov. 1, but Selna said the California Supreme Court's approval shows it to be "the correct ethical standard and most in line with current judicial thinking on matters of attorney ethics," so he's applying it now. SkyBell Technologies, Inc. v. Ring, Inc., CV18-00014 (C.D. Cal., filed Jan. 5, 2018).

Orrick's Annette L. Hurst warned in her opposition to the disqualification motion that SkyBell's approach encourages potential plaintiffs to invite "large swathes of firms to pitch in an effort to conflict them out of representing potential defendants."

While SkyBell never hired Orrick after the November 2017 pitch process, Russ August partner Marc A. Fenster told Selna that Orrick still sought the company as a client for months afterward. Then in June, the case returned to the firm's radar in a different way when Clement S. "Clem" Roberts joined its San Francisco office after nearly 10 years as a founding partner at Durie Tangri LLP. Roberts brought with him a close client relationship with Ring that included the SkyBell defense, which he'd been working since the lawsuit was filed in January.

Recognizing the potential conflict, Orrick "implemented an ethical screen" to separate attorneys and staff involved in Jensen's SkyBell pitch from Ring's defense team, including a prohibition on shared reading materials and communication "about either the pitch or the litigation" as well as a plan for periodic reminders.

Selna concluded the efforts were too little, too late.

"It's an untainted group that comes to a firm which has taint. This is somewhat a unique fact situation," the judge said at a status conference last week, according to a reporter's transcript.

While Orrick's troubles seemingly began with Robert's hiring, Selna said the real problem is in the work Jensen did in the pitch process.

Rule 1.18 allows for attorneys who receive confidential information during pre-client screening to avoid disqualification if they made reasonable efforts to ensure the information was relevant to the decision of whether to represent the client.

In a declaration, Jensen said the information he received was reasonable, particularly for a patent pitch, and he believed SkyBell had been advised by independent counsel regarding what to disclose. Hurst also submitted an expert declaration from Stephen S. Korniczky, a partner at Sheppard, Mullin, Richter & Hampton LLP, that said SkyBell and Orrick's "level of interaction is entirely typical" for a patent litigation pitch process.

Selna essentially said Korniczky's claims were irrelevant, writing that, under Rule 1.18, simply because confidential information is commonly disclosed in the pitch process "does not mean that the firms necessarily need all of this confidential information to determine whether they would accept the engagement."

"The Rule explicitly contemplates that the attorney take some type of affirmative step or act to limit or avoid exposure to more information than is necessary," according to Selna's Sept. 18 order.

The judge said at the Oct. 15 status conference the lack of actual taint warrants full transfer of the work product to SkyBell's yet-to-be-named new counsel. Fenster said he doesn't believe work done by Orrick should be transferred, but he doesn't object to Roberts' work at Durie Tangri transferring.

Hurst and Fenster's joint stipulation, approved Thursday, called the disqualification and work product orders "novel and difficult questions of first impression" and asked for 10 days to file petitions for appeal.