Gurvey v. Cowan, Liebowitz & Latman, P.C.

• Decision Date: 15 July 2013
• Docket Number: 06 Civ. 1202 (LGS) (HBP)
• Parties: AMY R. GURVEY, Plaintiff, v. COWAN, LIEBOWITZ & LATMAN, P.C., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

AMY R. GURVEY, Plaintiff,

v.COWAN, LIEBOWITZ & LATMAN, P.C., et al., Defendants.

06 Civ. 1202 (LGS) (HBP)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Dated: July 15, 2013

OPINIONAND ORDER

PITMAN, United States Magistrate Judge:

I. Introduction

I write to resolve several outstanding motions. For the reasons set forth below, (1) plaintiff's motion for leave to serve a Fifth Amended Complaint (Docket Item 116) is denied, (2) defendants' cross-motion to strike certain material from plaintiff's proposed Fifth Amended Complaint (Docket Item 119) is denied as moot, (3) plaintiff's motion to disqualify the law firm of Greenberg Traurig, LLP (Docket Item 150) is denied, (4) plaintiff's motion for leave to serve defendants Michael Gordon and Susan Gordon¹ and to compel discovery from them (Docket Item150) is denied, (5) plaintiff's motion for an extension of time to respond to defendants' discovery requests, my January 14, 2013 Order and defendants' motion for sanctions (Docket Item 154) is denied and (6) plaintiff's motion for "advance sanctions" (Docket Item 169) is denied. Furthermore, by no later than August 5, 2013, plaintiff is ordered to show cause why sanctions should not be imposed on her for her improper Rule 26(a)(1) disclosures and her failure to comply with several of my Orders. Finally, by no later than August 5, 2013, defendants are directed to answer plaintiff's Third Amended Complaint.

II. Facts

Plaintiff commenced this lawsuit on February 15, 2006 (Docket Item 1), alleging that her former employer, the law firm of Cowan, Liebowitz & Latman, P.C. ("CLL") improperly disclosed certain of her ideas and inventions to several of its clients. On January 23, 2008, after several years of litigation and several proposed amended pleadings, the Honorable Barbara S. Jones, United States District Judge (retired), to whom this matter was then assigned, granted plaintiff leave to file the fourth iteration of her complaint, or her Third Amended Complaint (Docket Item 41); the Third Amended Complaint was filed on March 8, 2008 (Third Amended Complaint, dated Mar. 4, 2008 (Docket Item45)("3AC")). Plaintiff's Third Amended Complaint, which remains the operative pleading, "asserted numerous claims against various defendants for, inter alia, misappropriation of trade secrets, unfair competition, breach of fiduciary duty, tortious interference with a contract, tortious interference with prospective economic relations, attorney malpractice, violations of Section 2 of the Sherman Act, violations of state antitrust laws, and violations of the Lanham Act." Gurvey v. Cowan, Liebowitz & Latman, P.C., 462 F. App'x 26, 28 (2d Cir. 2012). On April 23, 2009, Judge Jones dismissed plaintiff's Third Amended Complaint in its entirety. Gurvey v. Cowan, Liebowitz & Latman, PC., 06 Civ. 1202, 2009 WL 1117278 (S.D.N.Y. Apr. 24, 2009) (Jones, D.J.).

On February 12, 2012, the Court of Appeals affirmed most aspects of Judge Jones' order of dismissal, but vacated that portion of her decision that dismissed plaintiff's claims for legal malpractice and breach of fiduciary duty against CLL and certain of its individually-named attorneys (collectively, the "CLL defendants"), stating, in pertinent part:

[W]e affirm the judgment to the extent that it dismissed Gurvey's claims for misappropriation of trade secrets, unfair competition, and tortious interference with contract as time-barred, and to the extent that it dismissed her claims for false advertising, violations of state and federal antitrust laws, and tortious interference with prospective economic relations, forfailing to sufficiently plead claims upon which relief may be granted. However, we vacate the District Court's judgment to the extent that it dismissed Gurvey's claims for attorney malpractice and breach of fiduciary duty against the Cowan defendants. Construing the [Third Amended Complaint] liberally, accepting all the factual allegations in the complaint as true, and drawing all reasonable inferences in Gurvey's favor, seeBell Atl. Corp., 550 U.S. at 570, 127 S.Ct. 1955, we conclude that Gurvey stated a plausible claim by alleging that the defendants used the information given to them as part of a confidential attorney-client relationship to their own advantage by disclosing it to other clients who then profited therefrom to Gurvey's detriment, seeUlico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d 1, 10, 865 N.Y.S.2d 14 (1st Dep't 2008). We therefore remand the cause for further proceedings before the District Court on these claims.

Gurvey v. Cowan, Liebowitz & Latman, P.C., supra, 462 F. App'x at 30.

Plaintiff's allegations concerning the claims remanded by the Court of Appeals, i.e., plaintiff's claims for attorney malpractice and breach of fiduciary duty against the CLL defendants, can be summarized as follows. Plaintiff was employed by defendant CLL in an Of Counsel capacity at "a guaranteed base salary of $150,000," pursuant to a January 25, 2002 employment agreement (3AC ¶ 29). CLL agreed to represent plaintiff before the United States Patent and Trademark Office ("USPTO") by filing two provisional patent applications ("PPAs") concerning technologies developed by plaintiff prior to being employed by CLL (3AC ¶¶ 28, 33). Soon after beginning her employment, plaintiff was"ordered" to present her "confidential proprietary projects, business plans, and inventions" at CLL's monthly partner's conference, and, after doing so, received a "standing ovation" (3AC ¶¶ 34-35). CLL did not tell plaintiff "that non-attorneys were also in attendance at the firm conference" (3AC ¶ 39). Defendant William Borchard, Esq., a CLL partner, told plaintiff that her business plans "would be of significant interest" to Clear Channel Communications ("CCC"), another client of CLL, and that "he preferred to have plaintiff as a client of CLL rather than as 'of counsel'" (3AC ¶¶ 36-37).

In early May 2002, Borchard and two other CLL partners, Peter Porcino, Esq. and Simon Gerson, Esq., informed plaintiff that she would no longer be employed by CLL as Of Counsel (3AC ¶ 42). However, defendant Christopher Jensen, Esq., another CLL partner, told plaintiff that CLL still "had interest in the subject matter of plaintiff's patents and would file plaintiff's PPA's [sic] before the USPTO" (3AC ¶¶ 43).

In August 2002, after plaintiff returned from a business trip on which she was sent by CLL, she discovered that she was locked out of her office (3AC ¶¶ 46-47). Plaintiff alleges that

CLL told [her] that it was mailing her files but many items and proprietary confidential materials were never received including the complete disc directory ofplaintiff's computer directories, her Rolodex, confidential personal notes on the business plans related to the patent filings and certain of her confidential handouts at the first conference. CLL also did not take adequate precautions to ensure that plaintiff's confidential trade secrets were protected. Several boxes that plaintiff did receive showed signs of tampering and unauthorized access in that they had been opened and/or broken. Some of plaintiff's files were left by the CLL Defendants in public places with access to anyone.

(3AC ¶ 48).

In February 2003, plaintiff was notified by the USPTO that CLL had withdrawn as the attorney on one of her patents (PPA #60,382,710) because of a conflict of interest, although the nature of the conflict was never revealed to plaintiff (3AC ¶¶ 50-51). In March 2003, InstantLive, a former defendant in this action and an entity then affiliated with CCC, stated on its website that it "was offering a new added benefit to concert audience members allowing them to purchase live recordings of the concerts attended with their tickets" (3AC ¶ 55). On May 5, 2003, The New York Times published an article describing InstantLive, a CCC venture with a business model allegedly identical to one of plaintiff's proprietary business concepts ("onsite distribution of live recordings at concerts") (3AC ¶ 52). In Fall 2005, CCC formed an entity called LiveNation, and LiveNation acquired InstantLive (3AC ¶ 57).

On April 6, 2012, after the Court of Appeals' remand, Judge Jones ordered the remaining defendants to file their answer to the Third Amended Complaint by April 27, 2012 (Docket Item 97). However, on April 16, 2012, at plaintiff's request, Judge Jones granted plaintiff a 45-day stay of proceedings so that she could retain patent malpractice counsel (Docket Item 100).

On June 6, 2012, plaintiff filed a document entitled "Plaintiff's Pro Se's [sic] Ex Parte Application to Be Granted Expedited ECF Privileges; Expedited Preliminary Discovery documents Concerning Legend Films and an Order to Extend Stay of Other Proceedings for Additional 45 Days to Complete Retention of Counsel" (Docket Item 102). This document sought broad discovery, much of which related to a separate action plaintiff brought in California, Gurvey v. Legend Films, Inc., et al., 09-942 (AJB) (S.D. Cal.), prompting me to issue an Order on June 11, 2012 limiting discovery to "the claims and defenses in this action," namely, "plaintiff's claims against the Cowan defendants for attorney malpractice and breach of fiduciary duty" (Order, dated June 11, 2012 (Docket Item 103), at 2). On July 2, 2012 I granted plaintiff a second 45-day stay to obtain counsel (Docket Item 107).

On July 16, 2012, notwithstanding the stay that plaintiff had sought, plaintiff filed a document entitled "Motion forLeave to File Fourth Amended Complaint Disovery [sic] and Mediation on Certain USPTO Damage Claims" (Docket Item 109). The proposed Fourth Amended Complaint, annexed to that motion, asserted claims against the CLL defendants "premised on persistent divided loyalty, egregious breach of fiduciary duty, abandonment, breach of NY's Disciplinary Rules of Professional Conduct, 22 NYCRR 603, et seq., legal malpractice, legal patent malpractice, fraud, fraudulent concealment, and continuing prima...