Helmer on which she might have based legal advice, or that Metamorfyx was not otherwise
represented in the negotiations, belies the credibility of the affidavits to such an extent that they

may not be given credit as a matter of law. Thus, Metamorfyx’s motion must fail at the outset.

Nevertheless, the court will comment a bit further:

Plaintiff argues that an implied attorney-client relationship existed between Bryan Cave
and plaintiff due to Helmer’s discussions with Gloria during plaintiff's negotiations with various
companies (Mot. at 8), and that under the “substantial relationship test,” Cannon v. U.S.
Acoustics Corp., 398 F. Supp. 209, 223, 223-34 (N.D. Ill. 1975), Helmer’s former representation
of plaintiff creates a conflict of interest that is imputed to Bryan Cave (Mot. at 10-12).
Defendant responds that no implied attorney-client relationship was formed because plaintiff
cites no authority that a party can form such a relationship when the wife of one of its directors
shares allegedly confidential information with an attorney with whom she works. (Resp. at p. 6).
In reply, plaintiff asserts that because Gloria acted at the behest of a director of plaintiff, an

attorney-client relationship was formed.

As a backdrop, the court will quote Magistrate Judge Schenkier of this court, who
recently stated in Commonwealth Ins. Co. v. Stone Container Corp., 178 F. Supp. 2d 938, 943

(N.D. Ill. 2001):

We begin our analysis with the recognition that “[c]lients and the public will not
repose confidence ‘in lawyers whom they distrust and will not trust law firms that
switch sides nimbly.’” Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263,
1269 (7" Cir. 1983). “The maintenance of public confidence in the propriety of
the conduct of those associated with the administration of justice is so important a
consideration . . . that a court may disqualify an attorney for failing to avoid even
the appearance of impropriety.” International Business Machines Corp. v. Levin,
579 F.2d 271, 283 (3d Cir. 1978). At the same time, we recognize that motions


relationship but a fiduciary obligation or implied professional relationship. These examples
included where a prospective client consults with an attorney with the view of retaining the
attorney’; attorneys exchange information concerning their clients, who are co-defendants, and
one of those attorneys may use information to the detriment of a co-defendant; an attorney
retained by an insurer investigates an insured’s claim and the insured cooperates with the
attorney pursuant to a cooperation clause in the insurance policy; a law firm hired by an auditor’s
regional counsel represents plaintiffs suing the auditor; a law firm representing a plaintiff in an
action and a corporation that owned 20% of the defendant’s outstanding stock. In contrast to
these situations where the court concluded that fiduciary obligations arose, here the evidence,
even if credited, is simply too thin to demonstrate either that the nature of the work performed
and the circumstances under which confidential information (if any) was divulged justifies
implying an attorney-client relationship. Because there was no attorney-client relationship, there
is no need to address the “substantial relationship” test for whether a conflict of interest exists.
Nevertheless, it is apparent from the submissions that Gloria and Helmer had some
conversations about Metamorfyx. To avoid any appearance of impropriety, the court will direct
Bryan Cave to file a declaration that Helmer will not communicate any further information (other
than what she has disclosed in preparing her affidavits of May 6, 2002 and June 10, 2002) that

she learned from Gloria to any other person at Bryan Cave associated with the pending litigation.

‘While plaintiff mentions that Gloria first approached another attorney about whether this attorney would
represent plaintiff, plaintiffs motion for disqualification is not premised on this example,

7


Further, Gloria as well as Robert now believe that the information she provided to Helmer would
work to plaintiffs disadvantage in the present litigation.

Belkin’s version of the facts is remarkably different: Attorney Helmer attests that she
never agreed to represent Metamorfyx, that she did not complete or submit a “conflicts check”
memorandum for Gloria, Robert or Metamorfyx, as Bryan Cave requires of all new clients, and
that Gloria never asked her for any advice about Metamorfyx’s settlements with Microsoft or
Silitek or provided her with specific information about the patent or negotiations. Moreover,
Helmer attests that she is an employment attorney, not a patent attorney, that she has no
experience in negotiating patent settlements, and that Gloria told her that she and her husband
were being represented by a high-powered patent attorney from Aspen, Colorado, in their

negotiations with Microsoft.

DISCUSSION
Belkin objects to the affidavits of Robert and Gloria as self-serving. The argument is
well taken. See Hall v. Bodine Elec. Co., 276 F.3d 345, 354 (7" Cir. 2002) (“It is well settled
that conclusory allegations and self-serving affidavits, without support in the record, do not
create a triable issue of fact.”). Although the affidavits attest to one-on-one private conversations
which by their nature cannot be corroborated, the absence of supporting evidence such as that
Gloria took part in running the business of Metamorfyx,' that Robert had authority to engage

counsel on behalf of Metamorfyx or to dispatch Gloria to do so, that documents were given to

'plaintiff argues that Gloria had significant authority at Metamorfyx, but this statement is not supported by
any evidence. It is therefore disregarded.


for disqualification “should be viewed with extreme caution for they can be
misused as techniques of harassment.” Freeman v. Chicago Musical Instrument
Co., 689 F.2d 715, 722 (7 Cir. 1982). For this reason, “disqualification is ‘a
drastic measure which courts should hesitate to impose except when absolutely
necessary.”” Owen v. Wangerin, 985 F.2d 312, 317 (7" Cir. 1993) (quoting
Schiessle v. Stephens, 717 F.2d 417-19 (7" Cir. 1983)). The moving party “bears
a heavy burden of proving facts required for disqualification.” Evans v. Artek Sys.
Corp., 715 F.2d 788, 794 (2d Cir. 1983) (cited with approval in Guillen v. City of
Chicago, 956 F.Supp. 1416, 1421 (N.D. Ill. 1997)).

Even where no express contract has been entered into or where no fees are paid, an “implied”
attomey-client relationship may be shown if a party submitted confidential information to a
lawyer with the reasonable belief that the lawyer was acting as the party’s attorney. “The
professional relationship . . . ‘hinges upon the client’s belief that he is consulting a lawyer in that

2

capacity and his manifested intention to seek professional legal advice.’” Westinghouse Elec.
Corp. v. Kerr-Corp., 580 F.2d 1311, 1319 (7" Cir. 1978), quoting MCCORMICK ON EVIDENCE
§ 88, at 179 (2d ed. 1972).? Such relationship “may result because of the nature of the work
performed and the circumstances under which confidential information is divulged.” Jd. at 1319.
Citing Rager v. Boise Cascade Corp., No. 88 C 1436, 1988 WL 84724, at *2 (N.D. Ill.
Aug. 5, 1988), in which this court (then sitting as a magistrate judge) determined that an
individual employed by an entity hired by a corporation was within the corporation’s attorney-
client privilege, plaintiff argues that Gloria was an agent of plaintiff and thus authorized to enter
into an attorney-client relationship for it. In Rager the court determined that a corporation could

assert the attorney-client privilege regarding conversations with a non-employee who had been

engaged to represent the corporation in an unemployment compensation matter, determining that

2The court also quoted R. Wise, LEGAL ETHICS 284 (1970), “The deciding factor is what the prospective
client thought when he made the disclosure, not what the lawyer thought.” Westinghouse Elec. Corp., 580 F.2d at
1320, n.14.


CONCLUSION
Wherefore, for the reasons set forth above, the court denies plaintiff's motion to
disqualify the law firm Bryan Cave [#11], finding that no implied attorney-client relationship
existed between plaintiff and Leslie Helmer. Bryan Cave is given until July 1, 2002 to file its

declaration as set forth above.

ENTER: Quen Veg hirn—

JOAN HUMPHRE¥LEFKOW
United States District Judge

Dated: June 14, 2002


Minutg Orderg7orm (06/97)

iam United States District Court, Northern District of Illinois
Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge Joan H. Letkow than Assigned Judge
CASE NUMBER 02 C771 DATE 6/14/2002
CASE Metamorfyx, L.L.C. vs. Belkin Components
TITLE
{In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
(1) oO Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due
(3) a Answer brief to motion due. . Reply to answer brief due
(4) oO Ruling/Hearing on setfor at
(5) oO Status hearing[held/continued to] [set for/re-set for]on__set for at
(6) Qo Pretrial conference[held/continued to] [set for/re-set for] on set for at .
(7) Oo Trial[set for/re-set for} on at
(8) oO [Bench/Jury trial] [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) O General Rule21 OFRCP41(a)(1) O FRCP41(a)(2).
(0) =i [Other docket entry] Enter Memorandum Opinion and Order. Plaintiff's motion to disqualify the
law firm of Bryan Cave [11-1] is denied.
di) [For further detail see order attached to the original minute order.]
No notices required, advised in open court.
2
No notices required number of notices
V_ | Notices mailed by judge’s staff. uN 18 7002
Notified counsel by telephone. date docketed
Docketing to mail notices. B
Mai AO 450 form. 1409 L9aIyIsia “s'A aaospasireet
Copy to judge/magistrate judge. wus
6/17/2002
courtroom 22:8 WY SENAP zo date maied notice
MD deputy’s Mo
initials CG fEEn
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central Clerk’s Office tmaling deputy initials



he was acting as “an employee or agent of the corporation,” rather than an independent
contractor, and that “protecting his communications with [defendant’s in-house counsel] is
consistent with the purpose of the attorney-client privilege in the corporate context.” Jd. at *3. In
reaching that conclusion, the court relied on several principles that create agency: (1) the agent
must have power to affect the legal relations of the principal and others; (2) the agent must be a
fiduciary who works on behalf of the principal and primarily for his benefit; and (3) the principal
has the right to control the conduct of the agent. Jd. at *4, Plaintiff’s reliance on Rager is not
helpful to it. There is nothing before the court that indicates that Gloria fulfills any of these
criteria in relation to Metamorfyx. Because Gloria was a legal stranger to Metamorfyx, she could
not possibly have conveyed privileged information to Helmer.

Further, because Gloria is a stranger to Metamorfyx, Metamorfyx cannot rest on the
holding in Westinghouse Electric Corporation. There, the court disqualified a law firm which
had represented the American Petroleum Institute (“APY”), a lobbying organization of which
three defendants were members, from representing the plaintiff in a later lawsuit. These
defendants had previously submitted confidential information to the law firm on behalf of the
API and the firm had met with or interviewed several executives from two of the defendants.

The appeals court rejected the district court’s view that because the firm had not been an agent of
any defendant, it did not have an attorney-client relationship with them? The court provided five

examples where an attorney-client relationship could be formed where there is no express

Although both Rager and Westinghouse Elec. Corp. speak of agency relationship, they do so in different
contexts. In Westinghouse, the “agency-principal” discussion concerned whether the lawyer had formerly been in a
fiduciary relationship, beyond mere agency, with certain defendants, whereas in Rager the question was whether a
hired representative was an agent of the corporation.


UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
METAMORFYX, L.L.C., ) D
Plaintiff, J TED
vs. } No. 02 C071
BELKIN COMPONENTS, 5
Defendant. ‘

MEMORANDUM OPINION AND ORDER

Plaintiff, Metamorfyx, L.L.C. (“Metamorfyx”), has moved to disqualify the law firm of
Bryan Cave L.L.C. (“Bryan Cave”), from representing defendant Belkin Components (“Belkin”)

in the pending patent litigation. For the reasons stated below, the motion is denied.

PROCEDURAL STANDARD

Metamorfyx has submitted affidavits in support of its motion, and Belkin has responded
in kind with affidavits and documentary evidence. The court infers, then, that the parties expect
the court to treat the motion as, in essence, cross motions for summary judgment under Rule 56
of the Federal Rules of Civil Procedure. The court will rely only on the evidence submitted by
way of affidavits or documents, and only if it finds there is a dispute of fact that would bear on

the outcome will it hold an evidentiary hearing.


FACTS

The facts, as proffered by Metamorfyx, are as follows: During the past five years,
plaintiff has engaged in litigation and negotiations with various companies including Microsoft
Corporation (“Microsoft”) and Silitek Corporation (“Silitek”), concerning infringement of
plaintiff's patented ergonomic keyboard technology. One of plaintiff’s corporate directors,
Robert Granadino (“Robert”), asked his wife, Gloria Granadino (“Gloria”), to seek representation
from Bryan Cave regarding these matters. Gloria worked at that time as an administrative
assistant for Lynn Thompson (“Thompson”) and Leslie Helmer (“Helmer”), both attorneys at
Bryan Cave. Around or about March 1997, Gloria approached Thompson about representing
Metamorfyx, but Bryan Cave was not retained. At a later time, while plaintiff was completing its
negotiations with Microsoft, Helmer, an employment attorney, asked Gloria about the status of
plaintiff's negotiations. Gloria told Helmer that the negotiations were confidential and continued
with their conversation only after Helmer agreed that she was acting as plaintiff's attorney and
that the conversation would be kept confidential, pursuant to attorney-client privilege.

Throughout the remainder of plaintiffs negotiations with Microsoft and with a
subsequent licensee, Silitek, Gloria sought Helmer’s advice as requested by her husband on
whether plaintiff should accept Microsoft’s settlement terms. Helmer advised Gloria that
plaintiff should accept Microsoft’s offer. Robert also requested that Gloria obtain Helmer’s
advice on other issues that arose with potential licensees, and Gloria sought and received advice
which she passed along to her husband. Throughout this time, Gloria as weil as Robert believed

that the information would be held in confidence and protected by attorney-client privilege.