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By Samson Habte
Aug. 9 — A Delaware federal judge indicated that he may order a medical device manufacturer to cover the fees an adversary incurred in responding to a baseless motion that accused a prominent Kirkland & Ellis litigator of an unethical scheme to delay a trial ( W.L. Gore & Assoc. v. C.R. Bard, Inc., 2016 BL 249023, D. Del., No. 11-515-LPS, 7/27/16 ).
The warning came at the end of a July 27 opinion that dismissed a sanctions motion against attorney Steven Cherny, who gained fame after winning a patent infringement judgment of nearly $1.5 billion.
Cherny secured that award in an earlier lawsuit against W.L. Gore & Assoc., the plaintiff that accused Cherny of misconduct in this case.
Gore accused Cherny and his client of engaging in “a pattern of unethical conduct that ultimately achieved [their] intended goal of disrupting a long-scheduled jury trial.”
Gore alleged that Cherny waited until the “eleventh hour” of litigation to present evidence from an unrelated Arizona case that allegedly bolstered his client's defense to Gore's patent infringement claims, which led the court to reluctantly grant a continuance on the day trial was set to begin.
Judge Leonard P. Stark of the U.S. District Court for the District of Delaware wasn't convinced by Gore's allegations, which Cherny and his client characterized as a “confected conspiracy theory” based on “false accusations against respected members of the Bar.”
The evidence in question, an expert report that Gore itself had commissioned, “was a Gore document which Gore failed to locate and produce in this litigation, despite being responsive to Bard's discovery requests,” the court noted. “It is unreasonable for Gore to hold Bard to a higher standard for remembering and finding a Gore document from the Arizona litigation when Gore itself did not (in the relevant time) find and produce the pertinent document.”
Stark said it was entirely plausible that Cherny “simply did not recall” the belatedly discovered evidence from the Arizona case before it was uncovered by Cherny's client shortly before trial.
“Gore's contrary suggestion, on the other hand, is entirely implausible,” Stark wrote. “In Gore's telling, [Cherny and his co-counsel] were consciously aware of a likely successful defense for their client to an approximately $100 million lost profits damages claim by Gore, yet those attorneys deliberately withheld raising that defense until essentially the eve of trial.”
“Such a strategy would be risky in the extreme,” Stark said. “It would entail a high likelihood of a court excluding the defense as untimely,” he added. “And if counsel's ‘lies' were discovered, it would risk counsel's reputations and potentially their careers.”
The court also dismissed Gore's allegations that Cherny's client breached its duty to honor a protective order by having another Kirkland & Ellis attorney examine court records kept under seal, including the expert report at issue.
Stark said the evidence showed that the Kirkland & Ellis lawyer took care to avoid reviewing materials that were marked as sealed.
After denying Gore's sanction motion, Stark said he would entertain a request to order Gore to pay the attorneys' fees Cherny's client incurred in responding to the sanctions motion.
“This may well be a request that should be granted,” Stark wrote. “Gore's Motion leveled serious accusations of misconduct against highly-experienced attorneys and, as the discussion above demonstrates, the record does not support these allegations.”
Stark requested briefing on the fee request.
Young Conaway Stargatt & Taylor LLP and Faegre Baker Daniels LLP represented plaintiff W.L. Gore & Assoc. Morris, Nichols, Arsht & Tunnell LLP and Kirkland & Ellis LLP represented defendant C.R. Bard Inc.
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