Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_01-cv-00988/USCOURTS-cand-3_01-cv-00988-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE ORACLE CORPORATION

SECURITIES LITIGATION

 /

No. C 01-0988 MJJ

ORDER DENYING DEFENDANTS’

MOTION TO DISQUALIFY

PLAINTIFFS’ COUNSEL

INTRODUCTION

Before the Court is Defendants’ motion to disqualify Lerach Coughlin Stoia Geller Rudman

& Robbins (“Lerach Coughlin”) as counsel for Plaintiffs. For the following reasons, the Court

DENIES the motion.

FACTUAL BACKGROUND

Samuel Rudman, currently a named partner at Lerach Coughlin, was, before a merger in

2004, a named partner at a law firm that represented Oracle Corporation’s shareholders in a

derivative lawsuit in Delaware against two of Oracle’s executive officers. The factual predicate in

the Delaware derivative action was much the same as that presented by the instant securities fraud

case in which Lerach Coughlin represents Plaintiffs. 

LEGAL STANDARD

Pursuant to the California Rules of Professional Conduct, where an attorney successively

represents parties with adverse interests, a presumption arises that the attorney has had access to

privileged and confidential matters relevant to the subsequent representation such that

disqualification of the attorney and his entire firm is mandatory. CAL. R. PROF. CONDUCT 3-310(E); 

Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 814 (N.D. Cal. 2004). 

Case 3:01-cv-00988-SI Document 262 Filed 04/22/05 Page 1 of 2
United States District Court

For the Northern District of California

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 In their moving papers, Defendants also argued that Plaintiffs’ counsel was engaged in an

improper simultaneous representation of parties with adverse interests. However, at oral argument,

Defendants conceded that the procedural posture of the Delaware action no longer presents a case of

simultaneous representation. The Court agrees.

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ANALYSIS

Defendants urge that the disqualification of Lerach Coughlin as Plaintiffs’ counsel is

mandatory because Rudman’s representation of Oracle shareholders in the Delaware action and his

firm’s present representation of Plaintiffs in the instant securities fraud case against Oracle amount

to successive representation of parties with adverse interests.1 At the heart of the rules of

professional conduct relied upon by Defendants in urging disqualification here is the notion that the

interests of the parties represented by Rudman in the Delaware derivative action are adverse to the

interests of Plaintiffs in the instant securities action. The Court disagrees. Although Oracle

Corporation was the real plaintiff in the derivative suit, see Jones v. HF Ahmanson & Co., 1 Cal. 3d

93, 107 (1969), the Court finds that the interests of the clients at issue are not adverse and that the

presumption of a conflict under California law does not arise. See In re Dayco Corp. Derivative Sec.

Litig., 102 F.R.D. 624, 630 (S.D. Ohio 1984) (“counsel can represent a stockholder bringing both an

individual and a derivative action” because playing this dual role is only a “surface duality” that

presents a potential for conflict, and is not a conflict per se). Additionally, the Court finds that

Defendants have not demonstrated that an actual conflict has ripened out of the mere theoretical

conflict presented by Rudman’s representation in the Delaware case. Defendants’ motion is

DENIED. 

CONCLUSION

For the foregoing reasons, Defendants’ motion to disqualify Lerach Coughlin as counsel for

Plaintiffs is DENIED. This Order terminates docket entry no. 229.

IT IS SO ORDERED.

Dated: April _22__, 2005 /s/ 

MARTIN J. JENKINS

UNITED STATES DISTRICT JUDGE

Case 3:01-cv-00988-SI Document 262 Filed 04/22/05 Page 2 of 2