Engineered Products Co. v. Donaldson Co., Inc.

• Decision Date: 14 November 2003
• Docket Number: No. C98-2106-MWB.,C98-2106-MWB.
• Citation: 290 F.Supp.2d 974
• Parties: ENGINEERED PRODUCTS CO., Plaintiff, v. DONALDSON COMPANY, INC., Defendant.
• Court: U.S. District Court — Northern District of Iowa

290 F.Supp.2d 974

ENGINEERED PRODUCTS CO., Plaintiff, v. DONALDSON COMPANY, INC., Defendant.

No. C98-2106-MWB.

United States District Court, N.D. Iowa, Eastern Division.

November 14, 2003.

Bridget A. Sullivan, Craig J. Lervick, Edward M. Laine, Oppenheimer Wolff & Donnelly, Minneapolis, MN, Richard S. Fry, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Plaintiff.

Annamarie A. Daley, Christopher J. Sorenson, Robert J. Tansey, Jr., Robins, Kaplan, Miller, Ciresi, Minneapolis, MN, Stephen J. Holtman, Simmons, Perrine, Albright, Ellwood, Cedar Rapids, IA, for Defendant.

ORDER

ZOSS, United States Magistrate Judge.

I. INTRODUCTION

This is a patent infringement case that was filed in this court on November 20, 1998. Trial is scheduled to commence before the Honorable Mark W. Bennett on February 2, 2004.

On October 16, 2003, the plaintiff Engineered Products Co. (EPC) filed a motion for qualification of counsel, a supporting memorandum, and a request for oral argument. (Doc. No. 219) In the motion, EPC asks the court to make a determination that attorney Alan Carlson ("Carlson") and the law firm of Carlson, Caspers, Vandenburgh & Lindquist, P.A. (CCVL) should not be precluded from representing EPC in this lawsuit because of a conflict of interest. On October 21, 2003, the court entered an order granting the request for oral argument. (Doc. No. 221)

On October 30, 2003, the defendant Donaldson Company, Inc. (Donaldson) filed a motion to revoke the pro hac vice admissions of Carlson and J. Derek Vandenburgh into the bar of this court, together with a supporting memorandum.¹ (Doc. No. 223) In the motion, Donaldson asks the court to prohibit Carlson and CCVL from representing EPC in this case because of a conflict of interest and the appearance of impropriety. Donaldson also asks the court to strike certain of the materials submitted by EPC in support of its motion for qualification of counsel.² Also on October 30, 2003, Donaldson filed a motion for leave to file an in camera statement of facts (Doc. No. 224), which the court granted on November 3, 2003 (Doc. No. 227). On October 31, 2003, Donaldson filed a memorandum in opposition to EPC's motion for qualification of counsel. On November 6, 2003, EPC filed a reply brief (Doc. No. 232), and a brief in opposition to Donaldson's motion (Doc. No. 233).

The court heard arguments on the motions on November 7, 2003. Carlson and Vandenburgh appeared for EPC. Annamarie A. Daley and Amy Becker appeared for Donaldson. Both parties have sent post-hearing submissions to the court. The court now considers the motions to be fully submitted.

II. FACTUAL BACKGROUND AND THE PARTIES' CONTENTIONS

Former District Judge, now Circuit Judge, Michael Melloy described this case as follows: "In this patent infringement action, [EPC] asserts patent and trade dress claims against [Donaldson] arising from Donaldson's creation and sale of two air filter indicator devices — the Air Alert, sold from 1997 to 1999, and the NG Air Alert, sold from 1999 through the present." Engineered Prods. Co. v. Donaldson Co., 165 F.Supp.2d 836, 841 (N.D.Iowa 2001).

Agio Capital Partners I, L.P. (Agio), a Minnesota company, owns a majority interest in EPC. After it became apparent that the present case would proceed to trial before a jury, Agio became concerned about the experience and qualifications of the attorneys representing EPC in the litigation. In September 2003, Agio retained Alan J. Wilensky, a Minneapolis attorney, to recommend a patent trial lawyer from the Minneapolis area to take over the trial of the case. After inquiring about intellectual property trial lawyers in Minneapolis, Wilensky decided Agio should retain Carlson to represent EPC in the case.

During the initial meeting between Carlson and Wilensky, Carlson advised that he had performed legal work for Donaldson in the past, and he expected Donaldson might raise an objection to his appearing in the case. From 1971 until January 2003, Carlson had been an attorney with the Minneapolis law firm of Merchant & Gold (M & G). For many years, M & G had provided intellectual property legal services to Donaldson, and was continuing to perform those services when Carlson left M & G. Carlson personally had performed a significant part of that work, including the handling of several patent cases, two of which had gone to trial. Carlson last represented Donaldson in early 1997, when he believes he was "fired" by Donaldson.³ M &amp G continued to represent Donaldson on numerous matters, including patent disputes. Carlson was CEO and chairman of the board of M & G from 1989 until 1996, and remained on the board until he left the firm in January 2003, to found CCVL.

Before agreeing to take this case, Carlson learned Donaldson objected to his representation of EPC in this lawsuit based on a claim of conflict. Carlson sought counsel from an "expert" in Minnesota legal ethics. Both Carlson and the expert decided there was no conflict. EPC decided to retain Carlson to appear on its behalf in the lawsuit.

The parties have markedly different views of the nature and extent of the prior representation Carlson provided to Donaldson. According to EPC, Paul Welter at M & G was the primary attorney for Donaldson. Welter and several other attorneys at M & G represented Donaldson on day-to-day matters, including the obtaining of patents. Carlson was a patent trial attorney at M & G. Beginning in the 1980s, he represented Donaldson in a number of patent cases. Two of those cases went to trial, the last one being a case filed against Donaldson by Nelson Industries. Carlson tried the Nelson Industries case in 1994, and Donaldson lost. Carlson continued to represent Donaldson on the matter until the case was settled in early 1997. After the settlement, Donaldson no longer used Carlson's legal services, and Carlson had no further involvement in Donaldson matters. In fact, Carlson believes he was "locked out" of all Donaldson matters at the law firm. According to Carlson, he did not even know the present lawsuit had been filed until he met with Wilensky in September 2003.

Carlson states that after meeting with Wilensky, the following occurred:

In order to familiarize myself with the case, I read the summary judgment decision, as well as some of the briefs filed with the court in support of the motions. I learned that this case relates to a patent owned by EPC for a gauge to measure filter life. I did not know that Donaldson had such a product. I did not work on such a Donaldson product, and that product is different than the products that were at issue in any of the prior matters that I recall working on for Donaldson. No one with CCVL was aware of the Donaldson dispute with EPC.

(Doc. No. 219-4, Declaration of Alan G. Carlson, ¶ 18)

Carlson denies any involvement in the creation of strategies or polices for dealing with patent matters at Donaldson. He states, "Donaldson had no general strategies or policies or philosophies regarding the handling of patent disputes. At the time I litigated patent matters for Donaldson, the only strategy ever employed in the litigation was strategy I created to deal with the specific facts of each case to respond to the opponent's position." (Id., ¶ 14.)

Donaldson, on the other hand, describes a more intimate relationship between the company and Carlson. According to Donaldson, Carlson was one of the primary attorneys from M & G providing legal representation to Donaldson. From 1989 to 1997, Carlson worked on at least 25 different intellectual property files for Donaldson, and was the attorney at M & G in charge of Donaldson's litigation matters assigned to the firm. Donaldson claims Carlson provided broad representation to Donaldson on patent matters, including working on patent applications, infringement opinions, and negotiations with competitors. Donaldson claims Carlson also was involved with developing and presenting training materials regarding intellectual property matters at Donaldson.

According to Robert Findorff, General Manager of Donaldson's Engine Group:⁴

Alan Carlson was provided with significant confidential information about Donaldson [and] its business strategies and philosophies. He assisted Donaldson in developing intellectual property approaches and strategies on a global basis. Our management provided him with information about critical aspects of our organization and our decision-making processes. [Carlson] was provided with confidential information about Donaldson's product strategies. He was provided with Donaldson's information about communications with competitors and actually wrote a number of letters on behalf of Donaldson to various competitors about patent matters.

(Doc. No. 225-5, Declaration of Robert Findorff, ¶ 6) Norm Linnell, general counsel for Donaldson since July 29, 1996, states he "conveyed confidential Donaldson information to [Carlson] regarding [Donaldson's] intellectual property litigation strategies and, in particular, regarding the business of Donaldson's Engine Group." (Doc. No. 225-1, Declaration of Norm Linnell, ¶ 6)

Donaldson asserts that at least three witnesses listed by the parties in the present case were called by Carlson as witnesses in his earlier trials for Donaldson. Two of these witnesses have signed declarations stating that while meeting with Carlson to prepare for testifying in the earlier cases, they provided Carlson with confidential information, including information about other intellectual property matters at Donaldson. They assert some of this confidential information would be relevant to the issues in the present case.

Donaldson points out that even after Carlson stopped working on M & G files in January 1997, his name remained on different billing account records at M & G related to Donaldson matters. Donaldson also alleges Carlson participated in promotional lunches with Donaldson representatives in 1996 and 1997. Donaldson claims Carlson had a close...