Federal Circuit disqualifies Katten from Mylan appeals
The US Court of Appeals for the Federal Circuit yesterday disqualified law firm Katten Muchin Rosenman from representing Mylan in three appeals before the court.
In a precedential decision handed down on February 20, the Federal Circuit ruled that Katten’s representation of subsidiaries of Canadian pharma company Valeant Pharmaceuticals International presented a conflict of interest.
Valeant, which was renamed Bausch Health Companies in July last year, and its subsidiary Salix Pharmaceuticals (a gastroenterology-focused pharma company) submitted three motions to disqualify Katten in three appeals.
The motions stem from Katten’s representation of Bausch & Lomb, an affiliate of Valeant and Salix, in trademark litigation while the law firm was also representing Mylan in three pending appeals.
Attorneys Deepro Mukerjee and Lance Soderstrom had represented Mylan during various stages of the three proceedings, first as attorneys from Alston & Bird, but later as attorneys from Katten.
An unnamed partner in Katten’s Chicago office has represented Bausch & Lomb since 2001, covering trademark, copyright and advertising issues.
During its representation of Bausch & Lomb, Katten signed a general engagement letter “governing the overall relationship” between the law firm and Valeant.
Incorporated within the letter were Valeant’s outside counsel guidelines, which specify that “Valeant expects a significant degree of loyalty from its key external firms”, defined as “firms with 12 month billings exceeding $1 million”.
These key firms should “not represent any party in any matters where such party’s interests conflict with the interests of any Valeant entity”, according to the guidelines.
Mylan had argued that the engagement letter and guidelines don’t prevent Katten from representing a party that is adverse to Valeant.
The pharma company argued that despite having represented various Valeant-related entities in certain matters over the years, Katten was not a key firm and so not bound by the provisions of the engagement letter that broadly define the client as any Valeant entity.
However, the Federal Circuit disagreed with this interpretation.
“We find this reading of the engagement letter to be irrational,” said Judge Kathleen O’Malley on behalf of the court. She added that the guidelines do not indirectly authorise Katten to represent parties adverse to Valeant so long as Katten remains a non-key firm.
“Even if there were any plausible ambiguity in the engagement letter, Mylan’s arguments would still fail because Valeant, Salix, and Bausch & Lomb have demonstrated that the three entities are sufficiently interrelated to give rise to a corporate affiliate conflict,” said O’Malley.
The Federal Circuit concluded that there was a conflict of interest and Katten may not represent Mylan in the three appeals unless it previously obtained informed and written consent from both clients. Because Katten had failed to do that, the motions to disqualify were granted.
A spokesperson for Katten said: "We respectfully but strongly disagree with the court's decision."
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