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Galderma Laboratories, L.P. v. Actavis Mid Atlantic LLC, 927 F.Supp.2d 390

Facts

Galderma Laboratories, a leading dermatology manufacturer, engaged Vinson & Elkins, LLP (V & E) for legal services starting in 2003, which included a broad waiver of future conflicts of interest. In June 2012, while V & E was still advising Galderma, the latter filed a lawsuit against Actavis, unaware that V & E had been representing Actavis in related matters for six years. Upon discovering this, Galderma requested V & E to withdraw from representing Actavis, but V & E chose to terminate its relationship with Galderma instead, leading to Galderma's motion to disqualify V & E.

Galderma Laboratories, a leading dermatology manufacturer, engaged Vinson & Elkins, LLP (V & E) for legal services starting in 2003, which included a broad waiver of future conflicts of interest. In June 2012, while V & E was still advising Galderma, the latter filed a lawsuit against Actavis, unaware that V & E had been representing Actavis in related matters for six years. Upon discovering this, Galderma requested V & E to withdraw from representing Actavis, but V & E chose to terminate its relationship with Galderma instead, leading to Galderma's motion to disqualify V & E.

Issue

Did Galderma, a sophisticated client represented by in-house counsel, give informed consent to the general, open-ended waiver of future conflicts of interest in the engagement letter with Vinson & Elkins?

Did Galderma, a sophisticated client represented by in-house counsel, give informed consent to the general, open-ended waiver of future conflicts of interest in the engagement letter with Vinson & Elkins?

Rule

Under the Model Rules of Professional Conduct, a client's waiver of future conflicts is valid when the client gives informed consent, which requires adequate information about the material risks and alternatives to the proposed course of conduct.

Under the Model Rules of Professional Conduct, a client's waiver of future conflicts is valid when the client gives informed consent, which requires adequate information about the material risks and alternatives to the proposed course of conduct.

Analysis

The court analyzed whether Galderma's waiver was informed by examining the engagement letter's language, which outlined the course of conduct regarding conflicts of interest, explained the material risks of waiving future conflicts, and presented alternatives to engaging V & E. The court concluded that the waiver was reasonably adequate for Galderma, a sophisticated client, to understand the risks involved, especially since Galderma was represented by its own counsel during the waiver process.

The court analyzed whether Galderma's waiver was informed by examining the engagement letter's language, which outlined the course of conduct regarding conflicts of interest, explained the material risks of waiving future conflicts, and presented alternatives to engaging V & E. The court concluded that the waiver was reasonably adequate for Galderma, a sophisticated client, to understand the risks involved, especially since Galderma was represented by its own counsel during the waiver process.

Conclusion

The court denied Galderma's motion to disqualify Vinson & Elkins, concluding that Galderma had given informed consent to the representation of clients adverse to it.

The court denied Galderma's motion to disqualify Vinson & Elkins, concluding that Galderma had given informed consent to the representation of clients adverse to it.

Who won?

Vinson & Elkins, LLP prevailed because the court found that Galderma had provided informed consent for the firm's representation of conflicting clients.

Vinson & Elkins, LLP prevailed because the court found that Galderma had provided informed consent for the firm's representation of conflicting clients.

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