09-2790-cv

GSI Commerce Solutions v. BabyCenter 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 AUGUST TERM, 2009 4 (Argued: December 3, 2009 Decided: August 18, 2010) 5 Docket No. 09-2790-cv 6 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 GSI COMMERCE SOLUTIONS, INC., 8 Petitioner-Appellant, 9 v. 10 BABYCENTER, L.L.C., 11 Respondent-Appellee. 12 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13 B e f o r e:WINTER, RAGGI, and LIVINGSTON, Circuit Judges. 14 Appeal from a judgment of the United States District Court 15 for the Southern District of New York (Jed S. Rakoff, Judge) 16 granting a motion to disqualify petitioner’s counsel. We affirm. 17 Counsel currently represents respondent’s parent company, and 18 respondent and the parent company are so closely related that 19 they are essentially one client for disqualification purposes. 20 Counsel has thus engaged in concurrent representation, which it 21 may not do without the parent company’s consent. Counsel had not 22 obtained such consent. We therefore affirm. 23 242 1 REBECCA D. WARD (James T. Smith & 2 Leonard D. Steinman, Blank Rome, 3 LLP, Philadelphia, Pennsylvania; 4 Raymond L. Fitzgerald, Butler, 5 Fitzgerald, Fiveson & McCarthy, 6 P.C., New York, New York on the 7 brief), Blank Rome, LLP, 8 Philadelphia, Pennsylvania, for 9 Petitioner-Appellant. 10 11 JOHN D. WINTER (Claude S. Platton 12 on the brief) Patterson Belknap 13 Webb & Tyler, LLP, New York, New 14 York, for Respondent-Appellee. 15 WINTER, Circuit Judge: 16 GSI Commerce Solutions, Inc. (“GSI”) appeals from Judge 17 Rakoff’s order granting a motion by BabyCenter, LLC 18 (“BabyCenter”), a wholly-owned subsidiary of Johnson & Johnson, 19 Inc. (“J&J”), to disqualify Blank Rome, LLP, as GSI’s counsel. 20 The court concluded that the doctrine forbidding concurrent 21 representation without consent applies because the relationship 22 between BabyCenter and J&J, which Blank Rome represents in other 23 matters, is so close that the two are essentially one client for 24 disqualification purposes. The district court therefore 25 disqualified Blank Rome from representing GSI in the instant 26matter because the law firm had not obtained consent from J&J. 27 We affirm. 28 BACKGROUND 29 a) Attorney-Client Relationship between Johnson & Johnson and 30 Blank Rome3 1 J&J entered into an Engagement Agreement with Blank Rome in 2 2004.The agreement, contained in a letter to J&J (“2004 3 Letter”), describes the scope of Blank Rome’s representation as 4 limited to compliance matters involving J&J and J&J affiliates 5 “in connection with the European Union . . . Data Protection 6 Directive and potential certification to the U.S. Safe Harbor.” 7 The bulk of the agreement concerns two provisions purporting to 8 waive certain conflicts of interest. The first provision 9 addresses Blank Rome’s concurrent representation of Kimberly10 Clark in a specific patent matter “adverse to [J&J’s] corporate 11 affiliate, McNeil PPC, Inc.” Specifically, it sets out the Rules 12 of Professional Conduct applicable to attorneys representing an 13 enterprise with diverse operations and concludes that Blank Rome 14 is free to continue to represent Kimberly-Clark in that matter so 15 long as J&J agrees to waive the conflict. 16 The second provision in the 2004 Letter to J&J seeks a 17 prospective waiver of all conflicts arising out of Blank Rome’s 18 representation of Kimberly-Clark in patent matters adverse to J&J 19 and affiliates. The prospective waiver provision provides: 20 We believe that if, in the future, our 21 firm were requested by Kimberly-Clark to 22 represent it in patent matters related to 23 Johnson & Johnson or its affiliates or 24 subsidiaries, our representation of Johnson & 25 Johnson in the Data Protection Matters and in 26 other unrelated matters and our present and 27 future representation of Kimberly-Clark would4 1 not adversely affect our relationship with 2 either client. . . . 3 4 Specifically, this letter seeks 5 confirmation that, should our representation 6 of Kimberly-Clark in connection with patent7 related proceedings involve Johnson & 8 Johnson, or any other entity related to 9 Johnson & Johnson, Johnson & Johnson 10 consents, and will not object, to our 11 continuing representation of Kimberly-Clark 12 in connection with these proceedings . . . . 13 14A final part of the 2004 Letter summarizes the terms of the two 15 waivers and directly asks J&J to acknowledge that “you are aware 16 of the conflict of interests that results from our representation 17 of Kimberly-Clark and Johnson & Johnson but that notwithstanding 18 that conflict . . . you consent to our representation of Johnson 19 & Johnson and our simultaneous continued representation of 20 Kimberly-Clark.”Blank Rome also attached a standard Addendum, 21 which provides in relevant part: 22 23 Unless otherwise agreed to in writing or 24 we specifically undertake such additional 25 representation at your request, we represent 26 only the client named in the engagement 27 letter and not its affiliates, subsidiaries, 28 partners, joint venturers, employees, 29 directors, officers, shareholders, members, 30 owners, agencies, departments or divisions. 31 If our engagement is limited to a specific 32 matter or transaction, and we are not engaged 33 to represent you in other matters, our 34 attorney-client relationship will terminate 35 upon the completion of our services with 36 respect to such matter or transaction whether 37 or not we send you a letter to confirm the 38 termination of our representation. 395 1 In 2005, Blank Rome sent another letter to J&J (“2005 2 Letter”) seeking to amend the terms of the Engagement Agreement. 3 The 2005 Letter first explains that Blank Rome had increased its 4 representation of generic drug manufacturers in patent-related 5 matters. It specifically notes that the firm’s representation of 6 these new clients could lead to conflicts with its existing 7 clients, such as J&J, that are known as branded drug 8 manufactures. The 2005 Letter then states: “The Addendum to our 9 current engagement letter stipulates that we represent only 10 [J&J], and not its affiliates, subsidiaries, partners, divisions 11 and joint venturers.”However, the Letter goes on to request the 12 following waiver from J&J: 13 Specifically, this letter seeks 14 confirmation that, should our representation 15 of generic drug manufacturers in connection 16 with patent-related proceedings involve 17 Johnson & Johnson, or any other entity 18 related to Johnson & Johnson, Johnson & 19 Johnson consents, and will not object, to our 20 continuing representation of the generic drug 21 manufacturers in connection with these 22 proceedings, and should we determine that our 23 withdrawal as counsel is necessary for us 24 under the Rules of Professional Conduct to 25 continue to represent the generic drug 26 manufacturers, Johnson & Johnson consents, 27 and will not object, to our firm’s withdrawal 28 at such time. 29 30A final part of the 2005 Letter specifically asks J&J to 31 acknowledge: “you [J&J] provide your prospective consent to our 32 [Blank Rome’s] representation of generic drug manufacturers in6 1 patent-related proceedings involving Johnson & Johnson and its 2 affiliates and subsidiaries.” 3 Pursuant to this Engagement Agreement, Blank Rome advised 4 J&J on a variety of privacy matters, much of which was related to 5 J&J affiliates. In particular, Jennifer Daniels, a partner at 6 Blank Rome, provided affiliates with privacy-related services, 7 including the preparation of policies and procedures, guidance 8 documents, and training materials. In 2006, Ms. Daniels 9 represented BabyCenter in a privacy-related matter. Blank Rome 10 did not, however, advise J&J with regard to the E-Commerce 11 Services Agreement (“E-Commerce Agreement”) between BabyCenter 12 and GSI, which is the subject of the current litigation. It also 13 appears that Blank Rome received no confidential information 14 relevant to that agreement during its representation of J&J or, 15 separately, BabyCenter. 16b) J&J’s Relationship with BabyCenter 17 BabyCenter is a wholly-owned subsidiary of J&J that operates 18 as an online media company. BabyCenter hosts a variety of 19 websites in the United States and abroad that focus on pregnancy 20 and early childhood development.Until January 2009, BabyCenter 21 also hosted an online retail store offering baby-care and related 22 products. 23 BabyCenter relies on J&J for a variety of business services, 24 including accounting, audit, cash management, employee benefits,7 1 finance, human resources, information technology, insurance, 2payroll, and travel services and systems. It also substantially 3 relies on J&J’s legal department either to provide legal services 4 or to secure outside counsel.Stuart Wilks, a member of the J&J 5 legal department, serves as “Board Attorney” to BabyCenter. 6 J&J’s legal department participated in the negotiation of the E7 Commerce Agreement between BabyCenter and GSI. J&J lawyers have 8 also been involved from the beginning in the dispute between 9 BabyCenter and GSI. Indeed, J&J’s legal department has dealt 10 directly with Blank Rome in attempting to resolve the present 11 dispute. 12 Finally, it appears that J&J exercises some management 13 control over BabyCenter’s business decisions, although the extent 14 of this control is not clear from the record. BabyCenter is a 15 limited liability company.Its sole member is BC Acquisition 16 group, which is itself a wholly-owned subsidiary of J&J. J&J 17 structures affiliates into groups of companies. BabyCenter 18 belongs to the Consumer Healthcare Group and its operations are 19 supervised by the Consumer Healthcare Group Operating Committee, 20which is composed mainly of J&J employees. 21 c) BabyCenter & GSI Commerce Solutions 22 BabyCenter and GSI entered into the aforementioned E23 Commerce Agreement in August 2006, pursuant to which GSI agreed 24 to run the day-to-day operations of BabyCenter’s online store in8 1 return for a percentage of sales revenue. Section 10.10 of the 2 E-Commerce Agreement provides that, if a dispute should arise, 3 the parties will first attempt to resolve it through mediation. 4 Should mediation fail, the agreement provides that the parties 5 will proceed to arbitration. 6 When BabyCenter closed its online store in 2009, GSI accused 7 it of wrongfully terminating the E-Commerce Agreement. 8 Specifically, it argued that the five-year term of service in the 9 agreement had not expired at the time the store closed.James 10 Smith, a Blank Rome partner, notified BabyCenter on December 1, 11 2008 of GSI’s demand for mediation on its claim.Daniels, the 12 Blank Rome partner who had worked with J&J and affiliates on 13 privacy matters, contacted J&J’s legal department the same day to 14 inform J&J of the dispute. In January 2009, the parties 15 attempted mediation.Blank Rome partners Smith and Rebecca Ward 16 appeared on behalf of GSI. Members of the J&J legal department, 17 as well as John Winter (no relation to the author of this 18 opinion) from the firm Patterson Belknap Webb & Tyler LLP, 19 appeared on behalf of BabyCenter at mediation. 20 Mediation efforts proved unsuccessful. On February 27, 21 2009, Winter informed GSI that BabyCenter would not continue to 22 arbitration so long as Blank Rome represented GSI. On the same 23 day, J&J informed Blank Rome of its opposition to Blank Rome’s 24 representation of GSI.9 1 d) The District Court Proceedings 2 On April 6, 2009, in light of BabyCenter’s failure to 3 arbitrate, GSI filed a motion in the Southern District to compel 4 arbitration.BabyCenter responded with a cross-motion to 5 disqualify Blank Rome as counsel, arguing that its representation 6 of GSI presented a concurrent conflict to which J&J had not given 7 its consent. 8 The district court granted BabyCenter’s motion to disqualify 9 Blank Rome. GSI Commerce Solutions, Inc. v. BabyCenter, L.L.C., 10 644 F. Supp. 2d 333 (S.D.N.Y. 2009). Although Blank Rome’s 11 separate representation of BabyCenter allegedly ended in 2006, 12 see id. at 336, the court concluded that BabyCenter still “must 13 be considered a current client of Blank Rome for purposes of 14 disqualification,” id. at 337, because “BabyCenter and J&J must 15 be considered essentially the same client for purposes of the 16 instant litigation.” Id. at 336. See also id. (“Although 17 technically BabyCenter is a wholly owned subsidiary of J&J, as a 18 practical matter it is part and parcel of J&J.”) (citation 19 omitted). In so ruling, the court focused on the evidence of 20 substantial operational commonality between BabyCenter and J&J, 21 but particularly on BabyCenter’s reliance on J&J to provide legal 22 services. See id. at 336-37.The court further found it 23 relevant that, “since BabyCenter is a wholly owned subsidiary, 24 its liabilities directly impact J&J’s.” Id. at 337.10 1 The court found that the Engagement Agreement had not given 2 Blank Rome broad authority to accept representation adverse to 3 affiliates such as BabyCenter. See id. at 336. Instead, it 4 noted that the agreement “itself contains prospective waivers of 5 certain conflicts, thus indicating (at least implicitly) that 6 Blank Rome was aware of the potential conflict of interest that 7 would be posed by its representation of interests adverse to J&J 8 and its subsidiaries.” Id. 9 The district court proceeded to disqualify Blank Rome on the 10 ground that it had not obtained consent to the concurrent 11 representation. See id. at 338. 12 DISCUSSION 13 a) Standard of Review 14 We review a district court order disqualifying an attorney 15 for an abuse of discretion. See Glueck v. Jonathan Logan, Inc., 16 653 F.2d 746, 750 (2d Cir. 1981). Matters of law are reviewed de 17 novo and factual findings are sustained unless clearly erroneous. 18 Zervos v. Verizon New York, Inc., 252 F.3d 163, 169 (2d Cir. 19 2001). We will affirm the court’s application of the law to the 20 facts unless the court’s findings "cannot be located within the 21 range of permissible decisions." Id. In addition, to the extent 22 we need to interpret the Engagement Agreement between J&J and 23 Blank Rome, its construction is a question of law unless the 24 agreement’s meaning is ambiguous. See JA Apparel Corp. v.11 1 Abboud, 568 F.3d 390, 397 (2d Cir. 2009). An agreement is 2 ambiguous only if it is “capable of more than one meaning when 3 viewed objectively by a reasonably intelligent person who has 4 examined the context of the entire integrated agreement." 5 Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp., 818 F.2d 260, 6 263 (2d Cir. 1987). 7b) The Corporate Affiliate Conflict 8 In deciding whether to disqualify an attorney, a district 9 court must balance "a client's right freely to choose his 10 counsel" against "the need to maintain the highest standards of 11 the profession." Hempstead Video, Inc. v. Inc. Vill. of Valley 12 Stream, 409 F.3d 127, 132 (2d Cir. 2005). Although the American 13 Bar Association (“ABA”) and state disciplinary codes provide 14 valuable guidance, a violation of those rules may not warrant 15 disqualification. See id. Instead, disqualification is 16 warranted only if “an attorney's conduct tends to taint the 17 underlying trial." Bd. of Educ. v. Nyquist, 590 F.2d 1241, 1246 18 (2d Cir. 1979) (internal quotation marks and citations omitted). 19 One established ground for disqualification is concurrent 20 representation, an attorney’s simultaneous representation of one 21 existing client in a matter adverse to another existing client. 22 Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1387 (2d Cir. 23 1976). Because concurrent representation is “prima facie 24 improper,” it is incumbent upon the attorney to “show, at the12 1 very least, that there will be no actual or apparent conflict in 2 loyalties or diminution in the vigor of his representation.” Id. 3 at 1387. We have noted that this is “a burden so heavy that it 4will rarely be met.” Glueck, 653 F.2d at 749. In this respect, 5 it will not suffice to show that the two matters upon which an 6 attorney represents existing clients are unrelated. “The lawyer 7 who would sue his own client, asserting in justification the lack 8 of ‘substantial relationship’ between the litigation and the work 9 he has undertaken to perform for that client, is leaning on a 10 slender reed indeed.” Cinema 5, 528 F.2d at 1386. 11 We have not previously considered whether, and under what 12 circumstances, representation adverse to a client’s corporate 13 affiliate implicates the duty of loyalty owed to the client. 14 However, the issue has been addressed by the ABA and also has 15 been discussed extensively in other courts. 16 The ABA’s Model Rules of Professional Conduct provide that a 17 “lawyer who represents a corporation or other organization does 18 not, by virtue of that representation, necessarily represent any 19 constituent or affiliated organization, such as a parent or 20 subsidiary.” ABA Model Rule of Prof’l Conduct 1.7 cmt. 34 21 (2006). This statement embodies what is often termed the “entity 22 theory” of representation. SeeCharles W. Wolfram, Legal Ethics: 23 Corporate-Family Conflicts, 2 J. Inst. Study Legal Ethics 295, 24 307 (1999). However, an attorney may not accept representation13 1 adverse to a client affiliate if “circumstances are such that the 2 affiliate should also be considered a client of the lawyer 3 . . . .” ABA Model Rule of Prof’l Conduct 1.7 cmt. 34 (2006). 4 The ABA discussed this subject further in a 1995 Opinion Letter, 5 concluding that “whether a lawyer represents a corporate 6 affiliate of his client . . . depends not upon any clearcut per 7 se rule but rather upon the particular circumstances.” Am. Bar 8Ass’n Comm. on Prof’l. Ethics, Formal Opinion 95-390 (1995), 9 reprinted in ABA/BNA Lawyers Manual on Prof’l. Conduct Ethics 10 Opinions 1991-95, pp. 1001:262 (1996). 11 Many courts have reached the conclusion that the bar to 12 concurrent representation applies if a firm’s representation 13 adverse to a client’s corporate affiliate “reasonably diminishes 14 the level of confidence and trust in counsel held by [the 15 client].” Certain Underwriters at Lloyd’s, London v. Argonaut 16 Ins. Co., 264 F. Supp. 2d 914, 922 (N.D. Cal. 2003) (internal 17 quotation marks omitted); see also Discotrade Ltd. v. 18 Wyeth-Ayerst Int'l, Inc., 200 F. Supp. 2d 355, 358-59 (S.D.N.Y. 19 2002); Hartford Accident & Indem. Co. v. RJR Nabisco, Inc., 721 20 F. Supp. 534, 540-41 (S.D.N.Y. 1989); John Steele, Corporate21 Affiliate Conflicts: A Reasonable Expectations Test, 29W. St. 22 U. L. Rev. 283, 311-13 (2002). Put another way, these courts 23 focus on the reasonableness of the client’s belief that counsel 24 cannot maintain the duty of undivided loyalty it owes a client in14 1 one matter while simultaneously opposing that client’s corporate 2 affiliate in another. See, e.g., Certain Underwriters at 3 Lloyd’s, London, 264 F. Supp. 2d at 922; Discotrade Ltd., 200 F. 4 Supp. 2d at 358-59. 5 We agree that representation adverse to a client’s affiliate 6 can, in certain circumstances, conflict with the lawyer’s duty of 7 loyalty owed to a client, a situation that we shall refer to as 8 “a corporate affiliate conflict.” 9 The factors relevant to whether a corporate affiliate 10 conflict exists are of a general nature. Courts have generally 11 focused on: (i) the degree of operational commonality between 12 affiliated entities, and (ii) the extent to which one depends 13 financially on the other. As to operational commonality, courts 14 have considered the extent to which entities rely on a common 15 infrastructure. See, e.g., Discotrade Ltd., 200 F. Supp. 2d at 16 359 (corporate affiliates deemed single entity where each used 17 the same computer network, e-mail system, travel department, and 18 health benefit plan); Eastman Kodak Co. v. Sony Corp., Nos. 19 04-CV-6095, 04-CV-6098, 2004 WL 2984297, at 3-4 (W.D.N.Y. Dec. 20 27, 2004) (corporate affiliates deemed single entity based on, 21 inter alia, integration of technology systems). Courts have also 22 focused on the extent to which the affiliated entities rely on or 23 otherwise share common personnel such as managers, officers, and 24 directors. See, e.g., Certain Underwriters at Lloyd’s, London,15 1 264 F. Supp. 2d at 923 (substantial overlap in management); 2 Eastman Kodak, 2004 WL 2984297, at *4 (shared directors, officers 3 and legal department); Discotrade Ltd., 200 F. Supp. 2d at 359 4 (same board, directors and President). In this respect, courts 5 have emphasized the extent to which affiliated entities share 6 responsibility for both the provision and management of legal 7 services. See Eastman Kodak, 2004 WL 2984297, at *4; Certain 8 Underwriters at Lloyd’s, London, 264 F. Supp. 2d at 923-24; 9 Discotrade Ltd., 200 F. Supp. 2d at 357; Hartford Accident and 10 Indem. Co., 721 F. Supp. at 540; Morrison Knudsen Corp. v. 11 Hancock, Rothert & Bunshoft, 69 Cal. App. 4th 223, 231 (Cal. App. 12 1st Dist. 1999). This focus on shared or dependent control over 13 legal and management issues reflects the view that neither 14management nor in-house legal counsel should, without their 15 consent, have to place their trust in outside counsel in one 16matter while opposing the same counsel in another. 17 As to financial interdependence, several courts have 18 considered the extent to which an adverse outcome in the matter 19 at issue would result in substantial and measurable loss to the 20 client or its affiliate. See Hartford Accident and Indem. Co., 21 721 F. Supp. at 540; Wolfram, 2 J. Inst. Study Legal Ethics at 22 357-58. Courts have also inquired into the entities’ ownership 23 structure. See Discotrade Ltd., 200 F. Supp. 2d at 358-59. Some 24 have even suggested that an affiliate’s status as a wholly-owned16 1 subsidiary of the client may suffice to establish a corporate 2 affiliate conflict. Carlyle Towers Condo. Ass’n, Inc. v. 3 Crossland Sav., FSB, 944 F. Supp. 341, 346 (D.N.J. 1996) 4 ("[T]here is sufficient case law which supports the proposition 5 that, for conflict purposes, representation of a subsidiary 6 corporation is equivalent to representation of its parent, and 7 vice-versa . . . ."); Stratagem Dev. Corp. v. Heron Int’l N.V., 8 756 F. Supp. 789, 792 (S.D.N.Y. 1991) (treating the entities as 9 one client because “the liabilities of a [wholly-owned] 10 subsidiary corporation directly affect the bottom line of the 11 corporate parent”). However, we agree with the ABA that 12 affiliates should not be considered a single entity for conflicts 13 purposes based solely on the fact that one entity is a wholly14 owned subsidiary of the other, at least when the subsidiary is 15 not otherwise operationally integrated with the parent company. 16 See American Bar Ass’n Comm. on Prof’l. Ethics, Formal Opinion 17 95-390 at 1001:261-62. 18 However, the record here establishes such substantial 19 operational commonalty between BabyCenter and J&J that the 20 district court’s decision to treat the two entities as one client 21 was easily within its ample discretion. First, Babycenter 22 substantially relies on J&J for accounting, audit, cash 23 management, employee benefits, finance, human resources, 24 information technology, insurance, payroll, and travel servicesThese factors are not clearly outweighed by those that would support a 1 different conclusion. It is true that the dispute between GSI and BabyCenter is unrelated to the matters upon which Blank Rome represents J&J.Also, J&J and BabyCenter do not publicly present themselves as a single legal entity; in fact, the E-Commerce Agreement at issue here expressly forbids GSI from representing that J&J is one of its strategic partners. GSI also claims that the court should have given more weight to the fact that J&J is not financially dependent on BabyCenter.BabyCenter is only one of many J&J affiliates and does not account for much of J&J’s revenue. But, given the extent of J&J’s and BabyCenter’s operational commonality, the district court did not abuse its discretion in giving these counter factors little weight. 17 1 and systems. Second, both entities rely on the same in-house 2 legal department to handle their legal affairs. The member of 3 J&J’s in-house legal department who serves as “board lawyer” for 4 BabyCenter helped to negotiate the E-Commerce Agreement between 5 BabyCenter and GSI that is the subject of the present dispute. 6Moreover, J&J’s legal department has been involved in the dispute 7between GSI and BabyCenter since it first arose, participating in 8 mediation efforts and securing outside counsel for BabyCenter. 9 Finally, BabyCenter is a wholly-owned subsidiary of J&J, and 10 there is at least some overlap in management control. 11 When considered together, these factors show that the 12 relationship between the two entities is exceedingly close. That 13 showing in turn substantiates the view that Blank Rome, by 14 representing GSI in this matter, “reasonably diminishes the level 15 of confidence and trust in counsel held by” J&J. Certain 16 Underwriters at Lloyd’s, London, 264 F. Supp. 2d at922(internal 17 quotation marks omitted).1 18 c) J&J Did Not Waive the Corporate Affiliate Conflict18 1 GSI argues that, with the Engagement Letter, J&J and Blank 2 Rome dispositively waived the corporate affiliate conflict. 3 We agree that a law firm may ordinarily accept 4 representation involving a corporate affiliate conflict if the 5 client expressly consents. In the criminal context, we have said 6 that courts should generally respect a party’s decision to “waive 7 his right to conflict-free counsel in order to retain the 8 attorney of his choice.” United States v. Schwarz, 283 F.3d 76, 9 95 (2d Cir. 2002). That principle has even greater force in the 10 context of private litigation where the Sixth Amendment does not 11 apply. This view has also been embraced by courts and 12 commentators. See American Bar Ass’n Comm. on Prof. Ethics, 13 Formal Opinion 95-390 at 1001:262 ("The best solution to the 14problems that may arise by reason of clients' corporate 15 affiliations is to have a clear understanding between lawyer and 16 client, at the very start of the representation, as to which 17 entity or entities in the corporate family are to be the lawyer’s 18 clients, or are to be so treated for conflicts purposes.”); Ass’n 19 of the Bar of the City of New York Comm. on Prof’l and Judicial 20 Ethics, Formal Opinion 2007-3 ("[C]orporate-family conflicts may 21 be averted by . . . an engagement letter . . . that delineates 22 which affiliates, if any, of a corporate client the law firm 23 represents . . . ."); Wolfram, 2 J. Inst. Study Legal Ethics atWe need not exclude the possibility that some corporate affiliate 2 conflicts pose such a threat to the integrity of the adversarial process that a court could, in its sound discretion, determine that the conflict is not waivable. But since neither party directs us to evidence suggesting that is the case, we assume that J&J’s consent to such representation would have been dispositive of the disqualification motion.

GSI argues that BabyCenter and J&J have forfeited any right to contest 3 Blank Rome’s representation. It focuses on the fact that J&J and BabyCenter waited several months before objecting to Blank Rome as counsel. We reject GSI’s argument because a party’s delay in raising a conflict-of-interest objection does not prohibit a court from deciding whether a conflict of interest exists. See, e.g., Emle Indus., Inc. v. Patentex, Inc., 478 F.2d 562, 574 (2d Cir. 1973) (“Since, as we have noted, disqualification is in the public interest, the court cannot act contrary to that interest by permitting a party's delay in moving for disqualification to justify the continuance of a breach of the Code of Professional Responsibility.”). 19 1 364 (“[D]iscrete agreements between a lawyer and corporate-family 2 client can define the relationship in such a way as to limit 3 . . . the type of conflict obligations that the lawyer is and is 4 not undertaking.”).2 5 However, Blank Rome failed to obtain J&J’s consent to the 6 instant corporate affiliate conflict.Although certain 3 7provisions of the Engagement Agreement may constitute a waiver by 8 J&J of certain corporate affiliate conflicts, they do not waive 9 the conflict at issue here. Specifically, the waiver is strictly 10 limited to matters involving patent litigation and, even then, 11 only to matters brought by either Kimberly-Clark or a generic 12 drug manufacturer. Thus, because these provisions acknowledge 13 Blank Rome’s continuing duty to avoid conflicts arising out of 14 its representation of J&J and third parties, and because the 15 instant matter does not fall into the narrow category of cases20 1 waived by those provisions, Blank Rome did not contract around 2 the corporate affiliate conflict at issue here. 3 GSI argues that the waiver provisions simply do not address 4 Blank Rome’s authority to accept representation that might raise 5 a corporate affiliate conflict. Rather, it argues, the conflicts 6 addressed in the waivers arise only if a J&J affiliate is a Blank 7 Rome client in its own right at the time the law firm accepts 8 representation adverse to that affiliate. If the affiliate is 9 not separately a Blank Rome client at that time, GSI argues, the 10waiver provisions imply no limitation on the firm’s ability to 11 accept the adverse representation. 12 GSI argues that the Engagement Agreement gives Blank Rome 13 carte blanche to accept representation adverse to J&J affiliates 14 that are not separately Blank Rome clients. This argument relies 15 entirely on the clause that states: “Unless otherwise agreed to 16 in writing or we specifically undertake such additional 17 representation at your request, we represent only the client 18 named in the engagement letter and not its affiliates, 19 subsidiaries, partners, joint venturers, employees, directors, 20 officers, shareholders, members, owners, agencies, departments, 21 or divisions.” 22 We are unpersuaded. The waiver provisions unambiguously 23 state that the contemplated conflicts arise out of Blank Rome’s 24 representation of J&J and third-parties in matters adverse to J&J21 1 affiliates, and not out of some separate representation of those 2 affiliates. The 2004 Letter states: “you [J&J] are aware of the 3 conflict of interests that results from our representation of 4 Kimberly-Clark and Johnson & Johnson but that notwithstanding 5 that conflict of interest . . . you [J&J] consent to our 6 representation of Johnson & Johnson and our simultaneous 7 continued representation of Kimberly-Clark.” (emphasis added). 8 The 2005 Letter similarly provides: “[I]t is our belief that, if 9 a conflict did exist, we would be permitted, subject to the 10 consent being given via this letter, to represent Johnson & 11 Johnson, while remaining available to represent the generic drug 12manufacturers in future patent-related proceedings involving 13 Johnson & Johnson or any of its affiliates, subsidiaries or 14 divisions.” (emphasis added). The plain language of the 15 Engagement Agreement thus contradicts GSI’s argument that the 16 waivers do not address corporate affiliate conflicts. 17 And because the waiver provisions do address corporate 18 affiliate conflicts, GSI’s construction of the Addendum also 19 fails. If the broadly-worded, standard language of the Addendum 20 actually waives all corporate affiliate conflicts, then there is 21 no possible purpose served by the nonstandard waiver provisions 22 waiving only certain corporate affiliate conflicts. Adopting 23 GSI’s construction of the Addendum as waiving all such conflicts 24would render the more specific and more limited waiver provisions22 1 meaningless. We cannot accept such a construction. “The rules 2 of contract construction require us to adopt an interpretation 3 which gives meaning to every provision of the contract." 4 Paneccasio v. Unisource Worldwide, Inc., 532 F.3d 101, 111 (2d 5 Cir. 2008). Also, “specific language in a contract will prevail 6 over general language where there is an inconsistency between two 7provisions.” Id. Because GSI’s construction of the broadly8 worded, standard language of the Addendum would strip the 9 remainder of the Engagement Agreement of any meaning, it violates 10basic canons of construction of contract law. 11 In any event, the relevant language in the Addendum states 12 that Blank Rome represents only the named client and not unnamed 13 “affiliates, subsidiaries, partners, joint venturers, employees, 14 directors, officers, shareholders, members, owners, agencies, 15 departments, or divisions.” Construed as a waiver of all 16 corporate affiliate conflicts involving the entities listed 17 therein, this clause would raise a serious ethical problem. 18 Specifically, Blank Rome cannot, consistent with its duty of 19 loyalty to J&J, sue unincorporated departments or divisions of 20 J&J. GSI conceded as much at oral argument but could not then 21 explain why that same language grants Blank Rome authority to 22 accept representation adverse to the other entities listed 23 therein, such as affiliates. This troublesome aspect of GSI’s 24 construction only illustrates how hard GSI is straining to work aWe of course need not and do not address issues that might arise with 4 regard to a blanket waiver, without specifying types of claims or parties, of corporate affiliate conflicts.

23 1 broad waiver into language that simply is not plain enough or 2 clear enough to support it. There is, therefore, no waiver of 3 the present corporate affiliate conflict.4 4 d) Blank Rome Has Not Shown an Absence of an Actual or Apparent 5 Conflict 6 Having concluded that Blank Rome’s representation of GSI 7 implicates the duty of loyalty owed to J&J, and having further 8 concluded that Blank Rome did not contract around that duty, the 9 question remains whether GSI can meet its heavy burden that 10 representation of GSI should nonetheless be allowed. As to this 11 question, we find that GSI has failed to adduce any evidence 12 showing that such representation will not result in an “actual or 13 apparent conflict in loyalties.” Cinema 5, 528 F.2d at 1387. 14 CONCLUSION 15 For the foregoing reasons, we affirm. 16