No halt to state action against Activision over conflict claims

A Los Angeles County judge declined Friday to halt a civil enforcement action against Activision Blizzard Inc., which is accused of fostering sexual harassment and gender discrimination in the workplace.

Judge Timothy P. Dillon said at a hearing he was unconvinced there was sufficient grounds to pause the case while the gaming giant's lawyers investigated whether the state Department of Fair Employment and Housing's counsel violated conflict of interest rules. The judge emphasized his decision was procedural, and not based on whether he believes there was insufficient evidence of a conflict.

The Department of Fair Employment and Housing filed a civil enforcement action three months ago. DFEH v. Activision Blizzard Inc., 21STCV26571 (L.A. Super. Ct., filed July 20, 2021).

The U.S. Equal Employment Opportunity Commission, which is negotiating its own settlement with Activision Blizzard, accused the state agency of conflict. Two of the state's lawyers formerly worked at EEOC and were part of the team that originally investigated Activision Blizzard, the federal agency said.

Activision Blizzard's lawyers from Paul Hastings LLP sought to stay the case while they explored a motion to disqualify the department's entire legal division. Activision Blizzard's lawyers wrote in court papers that Rumduol Vuong and Sue J. Noh, the lawyers accused of conflict, could have used information they obtained from the federal investigation in the state case. The state agency's lawyers contended Vuong and Noh had minimal involvement in the federal case.

While Dillon said Friday there might be grounds for Activision Blizzard to pursue a motion to disqualify the agency at a later time, "given the posture of where we are," he did not believe emergency relief was warranted to issue a stay.

"I can't just in a vacuum say, 'OK, you can take limited discovery on the issue,'" Dillon told Felicia A. Davis, who represents Activision Blizzard.

Activision Blizzard has two weeks to file a response to the state complaint.

After the conflict allegation was raised, the Department of Fair Employment and Housing brought in outside counsel to continue the case. Jahan C. Sagafi and Laura I. Mattes of Outten & Golden LLP are now representing the state agency as well as intervening on behalf of the state in the EEOC' action to oppose an $18 million settlement. U.S. EEOC v. Activision Blizzard Inc., 21-CV-7682 (C.D. Cal., filed Sept. 27, 2021).