Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00632/USCOURTS-casd-3_17-cv-00632-2/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338pt Patent Infringement

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17-cv-0632-CAB (MDD)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

IPS GROUP, INC.,

Plaintiff,

v.

CIVICSMART, INC., DUNCAN 

PARKING TECHNOLOGIES, INC., and 

DUNCAN SOLUTIONS, INC.,

Defendants.

Case No.: 17-cv-0632-CAB (MDD)

ORDER ON MOTION TO 

DISQUALIFY COUNSEL

[Doc. No. 62]

Before the Court are Plaintiff IPS Group’s motions in two related cases, 15cv1526 

[Doc. No. 171] and 17cv632 [Doc No. 62],1to disqualify Defendants’ counsel, Mintz, 

Levin Cohn Ferris Glovsky and Popeo P.C. (“Mintz”). The Court finds this motion suitable 

for determination on the papers submitted and without oral argument in accordance with 

Civil Local Rule 7.1(d)(1).

I. Background 

On July 10, 2015, IPS Group sued Defendants Duncan Solutions, Inc., and Duncan 

Parking Technologies, Inc., in this District for patent infringement in Civil Case No. 

 

1 As the motions are virtually identical, the Court will reference the filings in 17cv632, unless specifically 

noted otherwise. Docket numbers and page references are those assigned by CM/ECF for the docket entry.

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15cv1526. Hunton & Williams, LLP and WHGC, P.L.C. represent Duncan Parking in the 

2015 litigation. On June 12, 2017, Mintz filed a notice of appearance on behalf of Duncan 

Parking joining the other two defense firms. [Doc. No. 122 in 15cv1526.] 

On March 29, 2017, the IPS Group also sued defendants Duncan Solutions, Inc., 

Duncan Parking Technologies, Inc. and CivicSmart, Inc., in this District for patent 

infringement and other claims in Civil Case No. 17cv632. On April 18, 2017, Hunton & 

Williams and WHGC appeared for Defendants Duncan Parking and CivicSmart and K&L 

Gates LLP appeared for Duncan Solutions. [Doc. No. 12 in 17cv632.] On June 6, 2017,

Mintz filed a notice of appearance on behalf of Duncan Parking and CivicSmart joining 

the other defense firms. [Doc. No. 26.] On June 23, 2017, Mintz filed a notice of 

appearance on behalf of Duncan Solutions joining K&L Gates. [Doc. No. 40.]

On July 31, 2017, IPS Group filed its motions to disqualify Mintz from both 

litigations on the basis that it is a current client of Mintz and simultaneous representation 

of IPS Group and the Defendants is a breach of the duty of loyalty requiring automatic 

disqualification. Alternatively, IPS Group contends that even if deemed a successive 

representation, there is a substantial relationship between the prior representation of IPS 

Group and the current representation of the defendants that requires disqualification of the 

Mintz firm.

II. Legal Standard

Motions to disqualify are governed by state law. In this District the California Rules 

of Professional Responsibility apply. See CivLR 83.4.b. (every attorney before this district 

court must “comply with the standards of professional conduct required of members of the 

State Bar of California.”)

Attorneys owe current clients a duty of undivided loyalty to avoided undermining 

public confidence in the legal profession and the judicial process. Flatt v. Super. Ct., 9 

Cal. 4th 275, 284 (1994). California Rule of Professional Responsibility 3-310(C) 

addresses concurrent representation of adverse clients and provides that a member shall 

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not, without informed written consent of each client, accept representations of more than 

one client in a matter in which the interests of the clients potentially or actually conflict.

“When a law firm simultaneously represents clients who have conflicting interests, 

with few exceptions, ‘disqualification follows automatically, regardless of whether the 

simultaneous representations have anything in common or present any risk that confidences 

obtained in one matter would be used in the other.’” Western Sugar Coop. v. ArcherDaniels-Midlands Co., 98 F. Supp. 3d 1074, 1081-82 (C.D. Cal. 2015) (citing People ex 

rel. Dep’t of Corp. v. SpeeDee Oil, 20 Cal. 4th 1135, 1147 (1999)). This is because the 

value at stake is loyalty, rather than confidentiality. A client cannot be expected to sustain 

trust and confidence in its counsel who is also representing the client’s adversary in 

litigation. In re Charlisse C., 45 Cal. 4th 145, 160 (2008).

In instances of successive representation, when an attorney undertakes to represent 

a client adverse to a former client, the focus is on confidentiality. Western Sugar, 98 F. 

Supp. 3d at 1080. California Rule of Professional Responsibility 3-310(E) governs 

successive representation of clients with adverse interests and provides that a member shall 

not, without the informed written consent of the client or former client, accept employment 

adverse to the client or former client where, by reason of the representation of the client or 

former client, the member has obtained confidential information material to the 

employment.

The former client may disqualify the attorney by showing a “substantial 

relationship” between the subjects of the prior and current representations. Flatt, 9 Cal.

4th at 283. “This protects the enduring duty to preserve client confidences that survives 

the termination of the attorney’s representation. When a substantial relationship between 

the representations is established, the attorney is automatically disqualified from 

representing the second client.” Western Sugar, 98 F. Supp. 3d at 1081 (internal citations

omitted). To establish a substantial relationship the party moving for disqualification must 

show that “information material to the evaluation, prosecution, settlement or 

accomplishment of the former representation given its factual and legal issues is material, 

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to the evaluation, prosecution settlement or accomplishment of the current representation 

given its factual and legal issues.” Id. (citing Khani v. Ford Motor. Co., 215 Cal. App. 4th 

916, 921 (2013)). 

The right to disqualify counsel is a discretionary exercise of the trials court’s inherent 

powers. Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 264 F. Supp. 2d 

914, 918 (N.D. Cal. 2003). Because of the potential for abuse, disqualification motions 

should be subjected to particularly strict judicial scrutiny. Optyl Eyewear Fashion Int’l 

Corp. v. Style Cos., Ltd., 760 F.2d 1045, 1049 (9th Cir. 1985). 

III. Discussion

A. IPS Group’s Relationship with Mintz 

On September 23, 2011, IPS Group engaged Mintz to represent it in “general 

corporate matters.” [Doc No.71-2, Ex. A at 3.] The firm required an advance payment 

from IPS Group, as a new client, of $5000 at the commencement of the engagement. There 

is no indication that after this advance payment was exhausted IPS Group was required to 

maintain a retainer amount, but rather going forward projects were billed as work was 

requested and provided. [Id., Ex. A at 4.] 

From September 23, 2011 to March 5, 2012, only one Mintz corporate attorney,

Edith Bauer, billed for services to IPS Group. [Id., Ex. B at 13-37.] She provided legal 

advice and prepared documents regarding a promissory note and warrant purchase 

agreement and shareholder consents. [Id.] Billing records reflect that she attended one

Board Meeting on November 1, 2011, for approximately 1.2 hours.2 On May 10-11, 2012, 

Ms. Bauer performed her last service for IPS Group, finalizing an equity confirmation letter 

and forwarding it to an auditor. [Doc. No. 71-2, Ex. C at 44-45.]

There is no evidence Ms. Bauer provided any other legal services to IPS Group after 

May, 2012. Ms. Bauer recorded approximately 20 hours of total time providing legal 

 

2 Ms. Bauer states in her declaration she believes she attended at least one additional board meeting but 

could not recall any dates. [Doc. No. 69-8, ¶ 2.] No other meeting attendance is reflected in her billing 

statements and no other specific meeting is identified by IPS Group. 

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services to IPS Group during those eight months. She did not perform any intellectual 

property or litigation work for IPS Group. [Doc. No. 69-8 at ¶ 3.] Ms. Bauer left Mintz 

on March 29, 2013. [Id. at ¶ 2.]

After May, 2012, when Ms. Bauer last performed any legal service for IPS Group,

there is no record that any other Mintz attorney ever participated in a board meeting in any 

capacity. No other Mintz attorney was requested to provide legal advice or service on a

general corporate matter until October, 2013.

On October 17, 2013, Mintz attorney Melanie Levy3assisted IPS with a stock 

transfer issue that involved less than one hour of attorney time. [Doc No. 71-2, Ex. C at 

56-58.] Ms. Levy provided attorney services again from January 8, 2014 to February 10, 

2014, related to a potential equity-financing round. She consulted briefly with two other 

Mintz attorneys in the course of her work, Eddie Rodriguez4and Sebastian Lucier. Less 

than 13 hours total was billed on the project. [Doc. No. 71-2, Ex. C at 66-65; Doc No. 71-

3, ¶¶ 4-10.] Ms. Levy’s work necessitated the review of certain corporate documents but 

did not involve any in-depth review of IPS Group’s capitalization structure, material 

agreements, intellectual property portfolio or business plans. [Id. at ¶ 6.] The billing 

entries do not reflect any meetings with IPS Group’s management, attendance at board 

meetings or consultation regarding IPS Group’s intellectual property or competitive 

business strategies. 

The records indicate that only two other Mintz attorney ever provided services to 

IPS Group. Between March 27, 2012 and April 20, 2012, Mintz attorney Mitch Danzig, 

who specializes in employment and commercial litigation, represented IPS Group in a 

dispute regarding the quality of goods IPS Group received from a supplier. The matter was 

resolved without litigation and did not involve intellectual property. Mr. Danzig provided 

 

3 Ms. Levy’s name was Melanie Ruthrauff at the relevant times. [Doc. No. 71-3 at fn. 1.]

4 Mr. Rodriguez resigned from Mintz effective January 9, 2017. [Doc. No. 71-1 at ¶ 11.]

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no further services beyond this specific matter which ended in April 2012 and incurred less 

than 10 hours of attorney time. [Doc. No. 71-2, Ex. B at 33-37, Ex. C at 39-43.] 

On May 12, 2016, Mintz attorney Jenna Stewart5 provided advice to a Mintz legal 

assistant finalizing the update of the IPS stock ledger to facilitate the opening of a bank 

account in the United Kingdom, for which she billed one-tenth-of-an hour. [Doc. No. 72, 

¶ 3; Doc. No. 71-2, Ex. C at 79-81.] There is no record of Ms. Shaffer having had any 

other interaction with IPS Group on any other matter or having consulted with anyone at 

IPS Group, having any knowledge about IPS Group’s intellectual property, business plans 

or business strategies. 

In summary, there is no record of a Mintz attorney being asked to or providing any 

significant legal service to IPS Group after February, 2014. There is no record or evidence 

of any ongoing or regular communication between IPS Group and any Mintz attorneys 

after Ms. Levy completed her 2014 project. In its motion, IPS Group does not identify any 

ongoing or current representation by a Mintz attorney on its behalf. 

The most recent work done for IPS Group by the Mintz firm was performed by Mintz 

legal assistants Joan Raulston and Leandro Alcantara. Between February, 2012 and 

November, 2016, Ms. Raulston and Mr. Alcantara provided sporadic administrative 

support to IPS Group. Ms. Raulston’s work included assistance with responses to audit 

letters, preparing stock certificates and updating the stock ledger and corporate records to 

reflect the changes. [Doc. No. 71-4 at ¶¶ 2-7.] Ms. Raulston provided a total of 2.5 hours 

of clerical support in 2012; 3.2 hours in 2013; 5.0 hours in 2014; no support in 2015; and 

2.2 hours in 2016, ending in May of 2016. [Doc No. 71-1, Exs. B and C.]

Mr. Alcantara’s work consisted of the preparation of stock transfer letters, stock 

certificates and updating the stock ledger and corporate records to reflect the changes. He 

provided a total of 4.4 hours of clerical support starting in July, 2016 and ending in 

November, 2016. [Id., Ex. C.] On November 18, 2016, Mr. Alcantara made an update to 

 

5 Ms. Stewart’s name was Jenna Shaffer at the relevant time. [Doc. No. 72, fn. 1.] 

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the stock register at the direction of Brian Webber, General Counsel for IPS Group, and 

forwarded the stock ledger to Mr. Webber. [Doc. No. 64-11, Ex. 1.] Mr. Alcantara 

provided no other support to IPS Group and resigned from Mintz effective May 2, 2017. 

[Doc. No. 71-1 at ¶10.]

The non-lawyer, administrative support provided by Mintz to IPS Group does not 

appear to have been an ongoing assignment or project performed at regular and expected 

intervals, but rather sporadic requests for administrative assistance to update documents

that required no legal analysis or advice. There were substantial stretches, including all of 

2015, when there was no contact between IPS Group and the Mintz firm. There was no 

communication between IPS Group and the Mintz firm from November, 2016 until May, 

2017 when Mr. Webber sent an email to Mr. Alcantara (who at the time was no longer with 

Mintz) requesting a copy of the IPS stock ledger. Ms. Raulston responded by re-sending

the ledger Mr. Alcantara sent in November without modification or change.

B. No Concurrent Representation

The records do not support IPS Group’s characterization of the Mintz firm as its 

current “corporate counsel.” There is no indication that after February, 2014 anyone at IPS 

Group directly communicated with a Mintz attorney with regard to any matter whatsoever. 

There is no evidence that any Mintz attorney was providing any ongoing transactional or 

litigation legal advice or service to IPS Group when the defendants retained Mintz in this 

litigation. 

Mr. Webber, the plaintiff’s general counsel since May of 2015, does not identify any 

Mintz attorney with whom he has ever communicated. [Doc. Nos. 64-10, 77-1.] His 

communications were limited to instructing Mintz non-lawyers to update corporate records 

at his direction on a number of occasions in 2016. His conclusory declaration that 

unspecified Mintz attorneys obtained confidential information regarding IPS products 

through board meeting attendance and projects is both without personal knowledge and 

contradicted by the evidence. 

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The declaration of David King, IPS Group’s CEO [Doc. No. 64-7], identifies Ms. 

Bauer’s presence at a single board meeting in November, 2011, during which there was a

discussion of certain technical and business matters. However, he does not identify her 

participation as involving anything other than the warrant purchase agreement. His 

declaration does not contradict the evidence that she was not involved in intellectual 

property matters or competitive business strategies. Further, she had no interaction with 

IPS Group after May, 2012, and left Mintz in March, 2013.

Mr. King identifies no other Mintz attorney who ever attended any board meeting, 

had any exposure to intellectual property or business competition strategies. His statements 

that Mintz attorneys obtained confidential information regarding IPS products through 

attendance at board meetings and projects is not supported by any evidence.

Mintz has certain IPS Group documents related to stock transactions, and its legal 

assistants provided sporadic administrative support to Mr. Webber in 2016 regarding stock 

transfers. The requests do not demonstrate either a continuing obligation or expectation of 

an ongoing attorney-client relationship. After November 2016, Mintz had no current 

project for the IPS Group.

Based on the records provided the Court finds that there was no simultaneous 

representation of IPS Group and the Defendants in this case. Mintz was not required to 

notify IPS Group and obtain its written consent to accept representation of the Defendants.

C. Successive Representation

With regard to the successive representation of the Defendants, IPS Group has not 

met its burden to demonstrate a substantial relationship between the subjects of the prior 

and current representations. Although IPS Group makes sweeping assertions of broad 

exposure to its confidential business strategies and intellectual property matters through 

six years of engagement, the records reflect isolated business transaction work involving 

primarily stock warrants and equity financing, totaling less than 35 hours of actual attorney 

time ending in 2014.

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There are representations that confidential information material to the evaluation and 

accomplishment of Mintz’ former representation of IPS Group is material to factual and 

legal issues involved in the evaluation, prosecution, settlement or accomplishment of the 

current representation. There is no substantive support for these conclusions. The records 

do not evidence that Mintz attorneys in 2011-2014 were privy to confidential factual and 

legal issues that are material to this litigation. The more current administrative tasks 

performed by Mintz non-lawyer staff in 2016 are even more remote in relevance to this 

patent litigation.

IV. Conclusion

The Court finds that IPS Group has not met its burden to demonstrate that Mintz’ 

representation of the Defendants in this litigation violates the standards governing either 

concurrent or successive representation. The motion is therefore DENIED.

It is SO ORDERED.

Dated: October 17, 2017

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