Premium Prods., Inc. v. Pro Performance Sports, LLC

• Decision Date: 19 February 2014
• Docket Number: Case No. 1:13–CV–1119 GBL/JFA.
• Citation: 997 F.Supp.2d 433
• Court: U.S. District Court — Eastern District of Virginia
• Parties: PREMIUM PRODUCTS, INC., Plaintiff, v. PRO PERFORMANCE SPORTS, LLC, et al., Defendants.

997 F.Supp.2d 433

PREMIUM PRODUCTS, INC., Plaintiff,

v.PRO PERFORMANCE SPORTS, LLC, et al., Defendants.

Case No. 1:13–CV–1119 GBL/JFA.

United States District Court,

E.D. Virginia,

Alexandria Division.

Feb. 19, 2014.

Lance G. Johnson, Roylance Abrams Berdo & Goodman LLP, Washington, DC, for Plaintiff.

Michael Andrew Oblon, Perkins Coie LLP, Washington, DC, for Defendants.

MEMORANDUM ORDER AND OPINION

GERALD BRUCE LEE, District Judge.

THIS MATTER is before the Court on Plaintiff Premium Products, Inc. (“Premium”)'s Objection to the Magistrate's Order Disqualifying H. Jay Spiegel (“Spiegel”) (Doc. 35). On December 20, 2013, Magistrate Judge John Anderson heard Defendants Pro Performance Sports, LLC, Amazon.com, Inc., The Sports Authority, Inc., and Dick's Sporting Goods, Inc.'s motion to disqualify Spiegel from representing Premium in its infringement action against Defendants. Following oral argument, Judge Anderson granted Defendants' motion, finding that Spiegel's representation of Premium violated Virginia Rule of Professional Conduct (“VRPC”) 3.7 because Spiegel, as sole inventor of the device at issue and sole prosecuting attorney of the patent and trade dress at issue, was likely to be a necessary witness in the underlying action. Premium now objects to the Order disqualifying Spiegel, arguing that VRPC 3.7 does not apply because Spiegel should be considered a litigant to the underlying action and, alternatively, because Premium qualifies for the substantial-hardship exception to VRPC 3.7.

The issue before the Court is whether the Order disqualifying Spiegel was clearly erroneous or contrary to law where the magistrate found that (i) Spiegel was likely to be a necessary witness in the infringement action, (ii) that Spiegel was not a pro se litigant beyond VRPC 3.7's reach, and (iii) that Premium did not qualify for the substantial-hardship exception. The Court AFFIRMS the Order disqualifying Spiegel as neither clearly erroneous nor contrary to law for two reasons: First, a corporation has no right to pro se representation and may only appear in court through counsel, a proposition which holds true even where the litigant is a small, closely-held corporation like Premium. Second, because the law recognizes Premium, not Spiegel, as the litigant in the underlying action and because Spiegel's representation of Premium implicates VRPC 3.7's concern with jury confusion and judicial integrity, VRPC 3.7 does apply to Spiegel's representation of Premium.

I. BACKGROUND

This objection under 28 U.S.C. § 636(b)(1)(A) is to Magistrate Judge John Anderson's Order disqualifying H. Jay Spiegel (“Spiegel”) from serving as counsel to Plaintiff Premium Products, Inc. (“Premium”) (Doc. 37). The underlying dispute is an infringement action brought by Premium against Defendant Pro Performance Sports, LLC (“Pro Performance”), a competitor in the market for football kicking-tee designs, and against retailers of Pro Performance's kicking tees, Defendants Amazon.com, The Sports Authority, Inc., and Dick's Sporting Goods, Inc. (collectively “Defendants”). Premium alleges that Pro Performance's design of the Universal Kicking Tee (“Universal”) infringed on a patent and trade dress held by Premium on the Triplex Stealth (“Triplex”) kicking tee. (Doc. 1.) Premium brings claims of unfair competition and false advertising, in addition to claims of patent infringement and trade-dress infringement. ( Id.)

Premium is represented in this action by H. Jay Spiegel (“Spiegel”). Since Premium incorporated in 1984, Spiegel has served as its sole owner, officer, director, patent attorney, and inventor. (Doc. 28, at 1; Doc. 30, at 8.) Not only was Spiegel the sole inventor of the patent covering Triplex, but Spiegel was also Triplex's sole prosecuting attorney. (Doc. 28, at 1; Doc. 30, at 8.) In this capacity, Spiegel submitted amendments and responses to the patent examiner, attended at least one interview with the patent examiner, and distinguished Triplex from several prior-art references, including two which named Spiegel as an inventor. (Doc. 28, at 3.) Additionally, Spiegel was the sole attorney to prosecute Triplex's trade dress. ( Id. at 4.)

Premium filed its Complaint against Defendants on September 5, 2013. (Doc. 1.) Three months later, on December 13, 2013, Defendants filed a Motion to disqualify Spiegel from representing Premium. (Doc. 27.) In their Motion, Defendants argued that Spiegel's representation violated the witness-advocate rule, Virginia Rule of Professional Conduct (“VRPC”) 3.7, because Spiegel was likely to be a necessary witness in any trial of Premium's infringement claims and because Premium did not qualify for the substantial-hardship exception to VRPC 3.7. On December 20, 2013, the parties argued the Motion before Magistrate Judge John Anderson, and Judge Anderson ruled from the bench, granting Defendants' Motion and disqualifying Spiegel. (Docs. 34, 35.)

Relying on Estate of Andrews by Andrews v. United States, 804 F.Supp. 820 (E.D.Va.1992), Judge Anderson made note of the threefold interests protected by the witness-advocate rule: (i) the interest of the witness-advocate's client, (ii) the interest of the adverse party, and (iii) the interest of the judicial system in its own integrity. Judge Anderson explained that all three interests were implicated by Spiegel's representation of Premium. (Doc. 36, at 27:5–28:17.) Accordingly, Judge Anderson found that the witness-advocate rule, VRPC 3.7, applied to Spiegel's representation of Premium and that Premium could not waive application of the rule. ( Id. 28:18–22.) Additionally, Judge Anderson found that disqualifying Spiegel would not work a substantial hardship on Premium because Spiegel could remain an active participant helping to prepare the case “just as any witness could work with a lawyer in helping ... get the case to trial.” ( Id. 28:23–29:22.)

Following the oral ruling, Judge Anderson issued an Order granting Defendants' Motion to disqualify Spiegel. (Doc. 35.) Premium filed its objection to the Order on January 3, 2014. (Doc. 37.)

II. STANDARD OF REVIEW

Under 28 U.S.C. § 636, a district judge may reconsider a pretrial matter decided by a magistrate judge “where it has been shown that the magistrate judge's order [on the pretrial matter] is clearly erroneous or contrary to law.” Id. § 636(b)(1)(A). A magistrate judge's findings of fact are reviewed for “clear error” while a magistrate judge's conclusions of law are reviewed to determine whether they are “contrary to law.” Id.

III. ANALYSIS

The Court AFFIRMS the Order disqualifying H. Jay Spiegel because the magistrate neither clearly erred nor ruled contrary to law when he disqualified H. Jay Spiegel (“Spiegel”) from representing Plaintiff Premium Products, Inc. (“Premium”).

A. The Witness–Advocate Rule: Virginia Rule of Professional Conduct 3.7

Under Local Rule 7(1), the ethics of civil practice are dictated by the Virginia Rules of Professional Conduct (“VRPC”). Resolution of the instant matter turns on one of those rules. VRPC 3.7, commonly known as the witness-advocate rule, prohibits a lawyer from representing a client in an adversarial proceeding when “the lawyer is likely to be a necessary witness” in that same proceeding, unless one of three exceptional circumstances is present. Va. R. Prof'l Conduct 3.7.

Application of the witness-advocate rule is mandatory and may not be waived by the lawyer's client. Estate of Andrews by Andrews v. United States, 804 F.Supp. 820, 824 (E.D.Va.1992). The rule is not subject to client waiver because the interests served by the rule extend beyond those of a single client. Rather, the witness-advocate rule is a “prophylactic rule designed to protect the interests of the client, the adverse party, and the institutional integrity of the legal system as a whole.” Id. at 823. These interests become imperiled when an advocate testifies because a lawyer's role of arguing causes and a witness's role of reciting facts are fundamentally inconsistent. See Personalized Mass Media Corp. v. Weather Channel, Inc., 899 F.Supp. 239, 242 (E.D.Va.1995). Jury confusion is likely to result, and in its confusion, the jury is likely to accord the witness-advocate either undue weight or undue discredit. See Estate of Andrews, 804 F.Supp. at 824.

A testifying advocate prejudices more than the client's interest in having his witness not be subject to impeachment and the adverse party's interest in not facing an advocate believed to be arguing under pain and penalty of perjury. Ultimately, a testifying advocate threatens the interests of the judicial system as a whole because of the “public perception that a testifying advocate has distorted the truth on the stand in order to advance his or her client's cause and prevail in the litigation.” Id.

B. Threshold Applicability of the Witness–Advocate Rule: Spiegel Is a “Necessary Witness”

By the plain language of VRPC 3.7, a lawyer is only prohibited from representing the client if the lawyer is “likely to be a necessary witness” in the adversarial proceeding. Thus, that Spiegel is “likely to be a necessary witness” in the infringement action is a threshold requirement to applying VRPC 3.7. Here, Spiegel is not only the sole inventor of the patent at issue but also the sole prosecuting attorney both of the patent and the trade dress. Moreover, Spiegel is the sole owner, officer, and director of Premium and has been since Premium's incorporation in 1984. Given the depth of Spiegel's involvement, it is clear that Spiegel would be a necessary witness at trial. Indeed, Spiegel has not argued to the contrary. As such, the threshold requirement for applying VRPC 3.7 is met.

C. Applicability of the Witness–Advocate Rule: Spiegel Is Not a Lawyer–Witness–Litigant

Premium objects to the application of VRPC 3.7 not on the “necessary witness” requirement but on the theory that VRPC 3.7 does not apply where the lawyer is also the litigant. Spiegel, it...