On November 6, 2012, ALJ Charles E. Bullock issued Order No. 13 in Certain Rubber Resins and Processes for Manufacturing Same (Inv. No. 337-TA-849).
In the Order, ALJ Bullock denied Complainant SI Group, Inc.’s (“SI Group”) motion to: (1) disqualify attorney Ruixue Ran, attorney Zhaohui Wang, and the Jun He Offices (collectively, the “Counsel”), (2) preclude Counsel from accessing SI Group’s Confidential Business Information (“CBI”), and (3) order the Counsel to withdraw from representing Jack Xu in a related Chinese litigation.
According to the Order, SI Group sought to disqualify and/or preclude Counsel because Counsel is representing Jack Xu, the person accused of misappropriating the trade secrets at issue, in a Chinese litigation. SI Group alleged that Counsel has violated the protective order (Order No. 1) issued in the present investigation by using CBI obtained in the current investigation for outside purposes (i.e., the representation of Jack Xu). Further, SI Group argued that ALJ Bullock should order Counsel to withdraw from representing Jack Xu because they have already received SI Group’s CBI and cannot now discard this information.
In opposition, Respondents (see our June 22, 2012 post for a complete list of the Respondents) argued that SI Group’s motion is based on “unfounded fears and presumptions.” Specifically, Respondents claimed that SI Group provided no evidence that Counsel has violated the protective order or will necessarily violate the protective order in the future. Respondents asserted that Counsel are not subject to “particular scrutiny” as to whether they will violate the protective order in the future because they are not “competitive decionmak[ers]” (e.g., responsible for patent prosecution). Respondents argued that any disqualification or preclusion order would unfairly prejudice them because many of the operative facts occurred in China and, therefore, having Chinese co-counsel is crucial to their defense.
In further opposition to the motion, the Commission Investigative Staff (“OUII”) argued that SI Group’s assertions that Counsel violated the protective order are unfounded. OUII asserted that, as members of the New York Bar, Counsel is subject to disciplinary and ethical sanctions should they actually violate the protective order.
ALJ Bullock held that SI Group failed to meet the high burden necessary to disqualify counsel because SI Group has merely asserted unfounded presumptions based on hypothetical accusations. As argued by Respondents and OUII, ALJ Bullock noted that Counsel is not responsible for any “competitive decisionmaking” and is subject to sanctions in the event that Counsel breaches the protective order. Accordingly, ALJ Bullock denied SI Group’s motion.