LEGAL02/31764919v2

IN THE UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

MEDTECH PRODUCTS, INC.,

Plaintiff,

vs.

RANIR, LLC AND CVS PHARMACY, INC.,

Defendants.

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MEDTECH PRODUCTS, INC.,

Plaintiff,

vs.

DENTEK ORAL CARE, INC., KELLY M.

KAPLAN, RAY DUANE, and CDS

ASSOCIATES, INC.,

Defendants.

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Case No. 07-CV-3302 (KMK)(LMS)

MEDTECH PRODUCTS, INC.,

Plaintiff,

vs.

POWER PRODUCTS, INC.,

Defendant.

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OPPOSITION TO MOTION TO INTERVENE OF HOGAN & HARTSON, LLP,

HOWARD M. HOLSTEIN, AND JEFFREY K. SHAPIRO

Medtech Products, Inc. (“Medtech”) hereby opposes the Motion of Hogan & Hartson,

LLP, Howard M. Holstein, and Jeffrey K. Shapiro (collectively referred to herein as “Hogan &

Hartson”) to intervene in this action for the purpose of accessing documents memorializing the

terms of settlement agreed to by Medtech and defendant DenTek Oral Care, Inc. (“DenTek”).

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I. INTRODUCTION

Hogan & Hartson’s Motion to Intervene fails for numerous reasons. As a preliminary

matter, Hogan & Hartson has failed to demonstrate that it has standing to intervene in this case.

Even if standing existed, Hogan & Hartson’s Motion should be denied because it does

not meet the standards set forth under Federal Rule of Civil Procedure 24 for permissive

intervention for three reasons.

First, the Motion is untimely under the Second Circuit’s D’Amato test, which sets forth

criteria to be considered in determining the timeliness of a motion to intervene. See D’Amato v.

Deutsche Bank, 236 F.3d 78, 84 (2d Cir. 2001). Second, the Motion fails to assert a claim or

defense that shares a common question of law or fact with the main action, which is required for

permissive intervention under Rule 24(b)(1)(B). See Fed. R. Civ. P. 24(b)(1)(B). Third, the

Motion should be denied because grant of the Motion will prejudice the parties to the instant

litigation. See Fed. R. Civ. P. 24(b)(3). Medtech and DenTek have negotiated the terms of their

settlement upon an agreement that the settlement terms would remain confidential. The parties

have a legitimate interest in keeping the terms of their settlement confidential.

Further, there is no basis to grant Hogan & Hartson’s Motion because there is no public

right of access to the settlement documents in this case. The Second Circuit has spoken directly

to the issue of whether the public right of access to court documents applies to confidential

settlement agreements. In Gambale v. Deutsche Bank, 377 F.3d 133 (2d Cir. 2004), the Second

Circuit held that there is no public right of access to settlement documents entered into on a

confidential basis between parties such as MedTech and DenTek. Id. at 143.

For all of these reasons, Hogan & Hartson’s Motion to Intervene should be denied.

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II. ARGUMENT AND CITATION TO AUTHORITY

A. HOGAN & HARTSON HAS FAILED TO MAKE ANY SHOWING THAT

IT HAS STANDING TO INTERVENE.

Hogan & Hartson has failed to show that it has standing to intervene in this case. As

discussed below, Hogan & Hartson has no “claim or defense” to assert in this case, as required to

intervene under Rule 24(b)(1)(B). At most, Hogan & Hartson has a substantive interest or

curiosity in the outcome of this case, “but an interest in the outcome of litigation is not itself a

‘claim or defense’ especially where, as here, the interest is premised on issues and legal

questions not actually presented or decided by the Court.” Stauffer v. Brooks Brothers, Inc.,

2009 WL 1675397 at *4 (S.D.N.Y. 2009), citing U.S. v. City of New York, 198 F.3d 360, 367-68

(2d Cir. 1999). See also Weller v. Actors’ Equity Association, 93 F.R.D. 329, 330 (S.D.N.Y.

1981).

Because it fails to make the required showing of standing, Hogan & Hartson’s Motion to

Intervene should be denied.

B. HOGAN & HARTSON’S MOTION FAILS TO MEET THE STANDARDS

FOR PERMISSIVE INTERVENTION UNDER FED. R. CIV. P. 24(B).

Under Rule 24(b), permissive intervention may be granted “on timely motion” to anyone

who “(A) is given a conditional right to intervene by a federal statute; or (B) has a claim or

defense that shares with the main action a common question of law or fact.” Fed. R. Civ. P.

24(b) (emphasis added). Rule 24(b)(3) then requires the Court to consider the prejudicial effect

that intervention would have on the original parties to the litigation. See Fed. R. Civ. P. 24(b)(3).

Hogan & Hartson’s Motion to Intervene should be denied on three grounds under Rule

24(b). First, the Motion is untimely. Hogan & Hartson has been on notice of its asserted interest

in this case for approximately 19 months. Permitting Hogan & Hartson to intervene at this late

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stage of the litigation would prejudice the parties’ rights to settle the matter confidentially and

avoid the further expense of litigation.

Second, although Hogan & Hartson does not specify which standard under Rule 24(b)

applies to its Motion, it does not cite to any federal statute granting it the conditional right to

intervene. Thus, it appears that Hogan & Hartson seeks intervention on the grounds that it “has a

claim or defense that shares with the main action a common question of law or fact.” Fed. R.

Civ. P. 24(b)(1)(B). Hogan & Hartson fails to assert a claim or defense that shares a common

question of law or fact in common with the instant litigation, as required under Rule 24(b)(1)(B).

See Fed. R. Civ. P. 24(b)(1)(B). Thus, it should not be permitted to intervene.

Third, a grant of Hogan & Hartson’s Motion would be prejudicial to the rights of the

original parties to this litigation, who have negotiated the terms of their settlement in reliance

upon the expectation that those terms would remain confidential. Therefore, under Rule

24(b)(3), the Motion should be denied. See Fed. R. Civ. P. 24(b)(3).

1. HOGAN & HARTSON’S MOTION TO INTERVENE IS

UNTIMELY AND SHOULD BE DENIED.

Hogan & Hartson’s Motion to Intervene should be denied because it is not timely. See

Fed. R. Civ. P. 24(b). The determination of the timeliness of a motion to intervene is within the

discretion of the district court, “evaluated against the totality of the circumstances before the

court.” Farmland Dairies v. Comm'r of the N.Y. State Dep't of Agric. and Markets, 847 F.2d

1038, 1043-44 (2d Cir. 1988) (citations omitted). Circumstances to be considered in assessing

whether a motion to intervene is timely include (1) how long the applicant had notice of the

interest before it made the motion to intervene; (2) prejudice to existing parties resulting from

any delay in bringing the motion; (3) prejudice to the applicant if the motion is denied; and (4)

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any unusual circumstances militating for or against a finding of timeliness. See D’Amato v.

Deutsche Bank, 236 F.3d 78, 84 (2d Cir. 2001). These factors are addressed in turn below.

a. Hogan & Hartson has had notice of its asserted interest for

approximately 19 months. Contrary to Hogan & Hartson’s assertions, the date that it learned

that dispute between Medtech and DenTek had tentatively settled is not the proper date by which

to determine whether its Motion to Intervene is timely. Rather, the governing case law makes

clear that the “length of [the proposed intervenor’s] notice of his interest in the action” is the

timeframe that the court should consider in determining whether the Motion to Intervene is

timely. See D’Amato, supra, 236 F.3d at 84 (emphasis added). By this standard, Hogan &

Hartson’s Motion to Intervene should clearly be denied.

Hogan & Hartson has had notice of its interest in this case for at least 19 months.

Prestige first filed its Complaint against Hogan & Hartson in the Supreme Court of the State of

New York, County of Westchester, Commercial Division on July 16, 2008. After the case was

dismissed on forum non conveniens grounds in January 2009, Prestige filed its Complaint in

D.C. Superior Court on February 17, 2009 (hereinafter referred to as the “D.C. Litigation”). The

claims for relief are substantively the same between the Complaint filed in New York on July 16,

2008 and the Complaint later filed in D.C. Superior Court.

Thus, as of July 2008, Hogan & Hartson was aware of the facts and damages theories

underlying Prestige’s claims against it, and was put on notice of any interest it wished to assert in

this litigation, which was already pending. See U.S. v. Yonkers Board of Education, 801 F.2d

592, 597 (2d Cir. 1986) (any interest the proposed intervenor had in the action began to gestate

when its asserted interest became generally known). There is no doubt that Hogan & Hartson

was well aware of the pendency of this litigation at the time Prestige filed its malpractice action

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in July 2008, because Hogan & Hartson was served with a subpoena in this action in October

2007. See, e.g., Docket Entry dated 12/21/07.

It is also clear that Hogan & Hartson has been following this case closely and, thus, it

cannot claim to be surprised by the settlement. In its Motion, Hogan & Hartson acknowledges

that it has been reviewing the court’s docket in this case; indeed, Hogan & Hartson states that it

learned of the settlement between Medtech and DenTek on January 20, 2010, upon a review of

the court’s docket. See Motion, p. 3. Because it was reviewing the docket regularly, Hogan &

Hartson must have been aware that the parties were involved in settlement discussions overseen

by the Court since August 2009 (See, e.g., Docket entries dated August 7, 2009, August 17,

2009, and September 16, 2009). Yet it never moved to intervene. Rather, Hogan & Hartson

waited on the sidelines while Medtech and DenTek invested more and more time and resources

into the litigation and in trying to resolve it.

In light of its delay in moving to intervene after clearly being on notice of its asserted

interest in this litigation for at least 19 months, Hogan & Hartson’s Motion to Intervene should

be denied. See D’Amato, supra, at 84 and U.S. v. State of New York, supra, 820 F.2d at 557.

b. The existing parties will be prejudiced as a result of Hogan &

Hartson’s delay in filing their Motion to Intervene. The existing parties to this litigation will

be prejudiced as a result of Hogan & Hartson’s delay in moving to intervene because the parties

negotiated the terms of their settlement over many months with the clear understanding and

expectation that the terms would remain confidential. The parties’ ability to settle this litigation

confidentially is a key component of their agreement. This is particularly the case because of the

nature of the claims asserted in this litigation. This case is primarily an intellectual property

dispute, in which Medtech has asserted patent, copyright and related claims against DenTek.

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The parties clearly have an interest in keeping issues relating to their intellectual property

interests confidential.

Hogan & Hartson’s late entry into this case is particularly prejudicial in light of the

significant time that the original parties to this litigation have expended on negotiating the

settlement over the past several months. Had the parties known at an earlier stage in the

litigation that Hogan & Hartson intended to intervene, this knowledge very well may have

shaped the settlement discussions and led to a different outcome. Because Hogan & Hartson

never moved to intervene at an earlier stage, the parties spent approximately five months

negotiating a settlement in reliance upon the expectation that their settlement would be held

confidential.

A grant of Hogan & Hartson’s untimely Motion would be unfair and prejudicial to the

parties because it will compromise their legitimate business interests in confidentiality, which

was a key component of their settlement agreement. Because the original parties will be

prejudiced in this way, Hogan & Hartson’s Motion should be denied. See New York News, Inc.

v. Kheel, 972 F.2d 482 (2d Cir. 1992) (affirming district court’s denial of permissive

intervention, because intervention after the parties had agreed to settle would unduly prejudice

the rights of the original parties); see also New York News, Inc. v. Newspaper and Mail

Deliverers’ Union of New York, 139 F.R.D 291 (S.D.N.Y. 1991) (permissive intervention denied

where intervention would likely delay settlement of the matter, thereby prejudicing the original

parties).

c. Hogan & Hartson will not be prejudiced if its Motion is denied.

Hogan & Hartson will not be prejudiced by a denial of its Motion to Intervene. Hogan &

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Hartson is not a party to this litigation and has no legal interests implicated in the intellectual

property claims that are at issue in this case.

In addition, Medtech’s parent company, Prestige, and Hogan & Hartson are actively

involved in the D.C. Litigation. This ongoing legal dispute clearly demonstrates Hogan &

Hartson’s ability to protect its legal interests in another forum, without being granted leave to

intervene in this case. See U.S. Football League v. National Football League, 110 F.R.D. 521,

524 (S.D.N.Y. 1986) (denying a motion to intervene where the proposed intervenor was

protecting its legal interests in another forum); see also New York News, Inc. v. Newspaper and

Mail Deliverers’ Union of New York, 139 F.R.D 291 (S.D.N.Y. 1991).

2. HOGAN & HARTSON’S MOTION DOES NOT ASSERT A CLAIM

OR DEFENSE THAT SHARES A COMMON QUESTION OF LAW

OR FACT TO ASSERT IN THIS CASE.

Under Rule 24(b)(1)(B), permissive intervention may be granted if the proposed

intervenor “has a claim or defense that shares with the main action a common question of law or

fact.” Fed. R. Civ. P. 24(b)(1)(B). Hogan & Hartson has no “claim or defense” to assert in this

case, as required to intervene under Rule 24(b)(1)(B). At most, Hogan & Hartson has an interest

in the outcome of this case, “but an interest in the outcome of litigation is not itself a ‘claim or

defense’ especially where, as here, the interest is premised on issues and legal questions not

actually presented or decided by the Court.” See Stauffer, supra, 2009 WL 1675397 at *4; see

also Weller, supra, 93 F.R.D. at 330.

The facts giving rise to the Amended Complaint in this suit relate to intellectual property

allegedly taken by the defendants in this action. See Amended Complaint paras. 22-179. The

claims asserted against DenTek include patent infringement, copyright infringement, unfair

competition, and related claims. See Claims I, II, III, IV, V, VI, X, XII, XIII, and XIV.

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In the D.C. litigation, the facts giving rise to the Complaint relate to Hogan & Hartson’s

representation of DenTek in a manner adverse to its existing client, Prestige. The claims asserted

are legal malpractice claims, including claims for breach of its ethical duties and responsibilities

under the D.C. Rules of Professional Conduct, breach of fiduciary duties, and breach of the

engagement letter that Hogan & Hartson entered into with Prestige Brands. See Complaint,

attached as Exhibit A.

Hogan & Hartson has not asserted a claim or defense in this action, and there are no

questions of law or fact in common between this action and the DC litigation. Consequently,

Hogan & Hartson’s Motion should be denied. See H.K. Ferguson Co., v. Nickel Processing

Corp., 33 F.R.D. 268, 275 (S.D.N.Y. 1963) (where proposed intervenor’s claim related to a

separate legal dispute, the court found there was no question of law or fact in common to allow

permissive intervention); Weller, supra, 93 F.R.D. at 330; U.S. v. City of New York, 198 F.3d

360, 367-68 (2d Cir. 1999) (denying permissive intervention where “the claimed interests of the

proposed intervenors, although broadly related to the subject matter of this action, are extraneous

to the issues before the court.”).

3. GRANT OF HOGAN & HARTSON’S MOTION WILL PREJUDICE

THE ORIGINAL PARTIES’ RIGHTS.

Under Rule 24(b)(3), in considering a motion for permissive intervention, “the court must

consider whether the intervention will unduly delay or prejudice the adjudication of the

original parties' rights.” See Fed. R. Civ. P. 24(b)(3).

The prejudice to the original parties that will result from a grant of Hogan & Hartson’s

Motion is addressed on pages 6-7 of this filing, as this issue is also a factor in the D’Amato test

established by the Second Circuit for determining timeliness of a motion to intervene. Thus,

Medtech hereby incorporates by reference the discussion of prejudice to the parties contained

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in Section II.B.1.b of this filing.

C. HOGAN & HARTSON HAS NO PUBLIC RIGHT OF ACCESS TO THE

SETTLEMENT DOCUMENTS.

It its Motion to Intervene, Hogan & Hartson asserts that it has a public right of access to

the settlement documents in this case. The Second Circuit’s ruling in Gambale v. Deutsche

Bank, 377 F.3d 133 (2d. Cir 2004), however, makes clear that there is no public right of access to

confidential settlement documents such as those at issue here.

In Gambale, the plaintiff brought an employment action against Deutsche Bank. Id. at

135. The parties eventually settled the litigation and the amount of the settlement was disclosed

in a hearing before the district court judge. Id. at 143. The transcript of the hearing reflected that

the parties requested confidential treatment of the settlement. Id. The settlement agreement

itself was entered into on a confidential basis between the parties and was not part of the court

record. Id.

In deciding whether the transcript of the hearing at which the settlement amount was

discussed should be publicly disclosed, the Second Circuit spoke directly to the issue of whether

the right access to court documents applies to confidential settlement agreements. Id. The

Second Circuit ruled that there is no public right of access to settlement documents entered into

on a confidential basis between the parties, when such documents are not part of the court record,

even if the amount of the settlement is discussed with the court and reduced to transcript form

and filed with the court. Id. The Second Circuit observed that

[T]here may well be valid reasons in this and other cases

terminated by settlement for maintaining the amount of settlement

in confidence when the settlement itself was conditioned on

confidentiality and when the settlement documents were not filed

with the court and were not the basis for the court's adjudication. If

nothing else, honoring the parties' express wish for confidentiality

may facilitate settlement, which courts are bound to encourage.

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Id.

The cases cited by Hogan & Hartson in support of its argument for access to the

settlement documents are inapposite. The cases relied upon by Hogan & Hartson discuss the

public right of access to documents produced in discovery that are subject to a protective order

(such as Public Citizen v. Liggett Group, Inc., 858 F.2d 775 (1st Cir. 1988), and AT&T Corp. v.

Sprint Corp., 407 F.3d 560 (2d Cir. 2005)), and judicial documents upon which the court decided

motions for summary judgment (such as The Diversified Group, Inc. v. Daugerdas, 217 F.R.D.

152 (S.D.N.Y. 2003), Lugosch v. Pyramid Company of Onondaga, 435 F.3d 110 (2d Cir. 2006)).

These cases have no applicability to Hogan & Hartson’s request to intervene for purposes of

accessing the confidential settlement documents in this case.

III. CONCLUSION

For the reasons set forth herein, Medtech respectfully submits that the Court should deny

Hogan & Hartson’s Motion to Intervene in this case.

Dated: February 26, 2010

New York, New York

Respectfully submitted,

ALSTON & BIRD, LLP

By: ___/s/ Karl Geercken____

Karl Geercken (KG 5897)

Victoria Ford Spataro (VF 5701)

90 Park Avenue

New York, NY 10016-1387

(212) 210-9471 (phone)

(212) 210-9444 (facsimile)

karl.geercken@alston.com

victoria.spataro@alston.com

Thomas O. Helton (TN BPR No. 1929)

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Micheline Kelly Johnson (TN BPR No.

13847)

Clinton P. Sanko (TN BPR No. 23354)

BAKER, DONELSON, BEARMAN,

CALDWELL & BERKOWITZ, P.C.

1800 Republic Centre

633 Chestnut Street

Chattanooga, Tennessee 37450-1800

(423) 756-2010

thelton@bakerdonelson.com

mjohnson@bakerdonelson.com

csanko@bakerdonelson.com

Attorneys for Plaintiff

Medtech Products Inc.

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