1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 1 of 14
`
`
`
`
`
`MICHAEL A. SHERMAN (SBN 94783)
`
`masherman@stubbsalderton.com
`JEFFREY F. GERSH (SBN 87124)
`
`jgersh@stubbsalderton.com
`STUBBS ALDERTON & MARKILES, LLP
`
`15260 Ventura Blvd., 20th Floor
`Sherman Oaks, CA 91403
`
`Telephone:
`(818) 444-4500
`Facsimile:
`(818) 444-4520
`
`
`Attorneys for PERSONALWEB
`
`TECHNOLOGIES, LLC
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`SAN JOSE DIVISION
`CASE NO.: 5:18-md-02834-BLF
`IN RE PERSONAL WEB TECHNOLOGIES,
`LLC, ET., AL., PATENT LITIGATION
`Case No.: 5:18-cv-00767-BLF
`
`Case No.: 5:18-cv-05619-BLF
`NOTICE OF MOTION AND STUBBS
`ALDERTON & MARKILES, LLP’S
`SECOND MOTION TO WITHDRAW AS
`
`COUNSEL FOR PERSONALWEB
`TECHNOLOGIES, LLC PURSUANT TO
`CALIFORNIA RULES OF
`PROFESSIONAL CONDUCT, RULE
`1.16(a)(2)
`DECLARATIONS OF ROBERT L. KEHR,
`DAVID PARKER, MICHAEL A.
`SHERMAN, AND JEFFREY F. GERSH
`FILED IN SUPPORT OF THE MOTION;
`AND [PROPOSED] ORDER
`Hearing date: June 23, 2022
`Time: 9:00 a.m.
`Judge:
`Hon. Beth Labson Freeman
`
`AMAZON.COM, INC. and AMAZON WEB
`SERVICE, INC.,
`
` Plaintiffs,
`v.
`PERSONALWEB TECHNOLOGIES, LLC, et
`al.,
` Defendants.
`
`PERSONALWEB TECHNOLOGIES, LLC, et
`al.,
`
`
`
`
`v.
`
`TWITCH INTERACTIVE, INC.,
`
`
`
`Plaintiffs,
`
`Defendant.
`
`
`
`NOTICE OF MOTION AND CASE NO: 5:18-md-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-cv-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-cv-05619-BLF
`4853-7716-9421, v. 3
`
`

`

`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 2 of 14
`
`
`
`NOTICE OF MOTION
`
`TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
`
`PLEASE TAKE NOTICE that on June 23, 2022 at 9:00 a.m., or as soon thereafter as the matter
`
`may be heard before the Honorable Beth Labson Freeman, Courtroom 3, 5th Floor, of the United
`
`States District Court for the Northern District of California, San Jose Division, 280 South First Street,
`
`San Jose, California 95113, Stubbs Alderton & Markiles, LLP (“SAM”), will and hereby does move
`
`the Court, pursuant to Civil Local Rule 11-5(a) and California Rule of Professional Conduct
`
`1.16(a)(2), to immediately and unconditionally withdraw as counsel of record for PersonalWeb
`
`Technologies, LLC (“PersonalWeb”), as a result of events that have occurred and issues that have
`
`
`arisen since the Court conditionally granted SAM’s prior motion to withdraw on June 25, 2021 (Dkt.
`
`694.) This Motion is based on this Notice, the attached Memorandum of Points and Authorities, the
`
`Declarations of Robert L. Kehr, David Parker Michael A. Sherman, and Jeffrey F. Gersh, all the
`
`pleadings and records on file in this action, and any further argument or evidence as may be presented
`
`at or before the hearing on this matter.
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`Dated: February 10, 2022
`
`STUBBS, ALDERTON & MARKILES, LLP
`
`By: /s/ Michael A. Sherman
`Michael A. Sherman
`Jeffrey F. Gersh
`
`Attorneys for PERSONALWEB
`TECHNOLOGIES, LLC
`
`
`
`
`
`1
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`4853-7716-9421, V. 3
`
`

`

`
`
`
`
`I.
`
`II.
`
`
`
`
`
`III.
`
`
`
`
`
`
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 3 of 14
`
`TABLE OF CONTENTS
`
`INTRODUCTION ................................................................................................................... 1
`
`SUMMARY OF RELEVANT BACKGROUND ................................................................... 3
`
`A.
`
`B.
`
`SAM’s Prior Motion to Withdraw Pursuant to Rule 1.16(a)(4) and the
`Subsequent Events Necessitating this Instant Motion to Withdraw Pursuant
`to Rule 1.16(a)(2) ......................................................................................................... 3
`
`Status of Other Proceedings – State Court Receivership – Impacting SAM and
`Pending Appeals .......................................................................................................... 3
`
`LEGAL ARGUMENT ............................................................................................................. 5
`
`Pursuant to California Rule of Court 1.16(a)(2), SAM’s Withdrawal
`is Mandatory Due to Events and Issues Arising After the Withdrawal Order ............. 5
`
`A.
`
`1.
`
`2.
`
`3.
`
`Business & Professions Code § 6103 .............................................................. 5
`
`Due to the irremediable breakdown in the relationship between
`PersonalWeb and SAM in the post judgment proceedings as detailed in the
`Declarations of Messrs. Sherman and Gersh, SAM cannot represent
`PersonalWeb competently under California Rule of Professional Conduct,
`Rule 1.1 ............................................................................................................ 6
`
`Due to a conflict of interest between SAM and PersonalWeb
`that recently arose in the post judgment proceedings, California Rule of
`Professional Conduct 1.7(b) precludes SAM from representing PersonalWeb
`in the post-judgment proceedings .................................................................... 7
`
`B. Whatever Challenges that Amazon is Experiencing in Its Post
`Judgment Collection Proceedings Does Not Rise to the Level of Prejudice to Amazon
`that Outweighs SAM’s Mandatory, Ethical Obligations to Withdraw – Nor Will
`Permitting SAM to Unconditionally Withdraw as Counsel of Record for
`PersonalWeb, Now, Promote Delay or Thwart Moving the Post Judgment Collection
`Proceedings Along ....................................................................................................... 8
`
`IV.
`
`CONCLUSION ........................................................................................................................ 9
`
`
`
`
`
`
`i
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`4853-7716-9421, V. 3
`
`

`

`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 4 of 14
`
`
`
`TABLE OF AUTHORITIES
`
`Cases Page(s)
`
`Blanton v. Womancare, Inc.,
`
`38 Cal.3d 296 .................................................................................................................................... 7
`Chaleff v. Superior Court,
`
`(1977) 69 Cal.App.3d 721 ................................................................................................................ 6
`
`In Matter of Genis,
`2015 WL 1295958 (Cal. Bar. Ct. 2015.)........................................................................................... 5
`
`Kessler v. Eldred,
`
`206 U.S. 285 (1907) ...................................................................................................................... 4, 5
`
`Statutes
`Business & Professions Code § 6103 ................................................................................................... 5
`
`
`Code of Civil Procedure §708.410........................................................................................................ 4
`
`Rules
`
`California Rule of Court 1.16(a)(2) ...................................................................................................... 5
`
`California Rule of Court 1.16(a)(4) ...................................................................................................... 3
`
`California Rule of Professional Conduct 1.7(b) ................................................................................... 7
`California Rule of Professional Conduct, Rule 1.1............................................................................... 6
`
`California Rules of Professional Conduct, Rule 1.16(a)(2) .......................................................... 1, 3, 5
`
`
`Rule of Professional Conduct 3-700 ..................................................................................................... 1
`Other Authorities
`PersonalWeb Techs., LLC v. Patreon, Inc.,
`No. 20-1394, 2021 WL 1298201 ...................................................................................................... 4
`
`
`
`
`
`ii
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 5 of 14
`
`
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`
`INTRODUCTION
`I.
`
`Through this Motion, Stubbs Alderton & Markiles, LLP (“SAM”) seeks to immediately and
`
`unconditionally withdraw as counsel of record for PersonalWeb Technologies, LLC (“PersonalWeb”)
`
`in Case No. 18-MD-2834-BLF and all related cases and matters now pending in the U.S. District Court
`
`for the Northern District of California (the “post judgment proceedings”).
`
`SAM acknowledges that this Motion is SAM’s second motion to withdraw as counsel of record
`
`for PersonalWeb to be considered by the Court. SAM brings this Motion based on materially changed
`
`circumstances from that first motion briefed in May 2021 and decided in the Court’s Order dated June
`
`
`25, 2021 (Withdrawal Order”), whereby the Court “conditionally” granted SAM’s prior motion to
`
`withdraw “…upon notice of appearance by [PersonalWeb’s substitute counsel] Ronald Richards,
`
`Personal Web’s counsel for post-judgment matters.” (Dkt. 694 at 4:6-8 (brackets added).)
`
`SAM is mandated to withdraw by rules of ethics applicable to its attorneys based on new
`
`developments, events, facts, and issues that arose after the Withdrawal Order. As applicable here,
`
`California Rule of Professional Conduct 1.16(a)(2) (which replaced Rule of Professional Conduct 3-
`
`
`700, effective November 1, 2018) mandates withdrawal if the “lawyer knows or reasonably should
`know that the representation will result in violation of these rules or of the State Bar Act…” As
`explained below, SAM cannot continue to represent PersonalWeb in the matter of these post judgment
`discovery/compliance proceedings because (in addition to PersonalWeb having discharged SAM in
`representing PersonalWeb on post judgment collection matters, the subject of the prior motion) (1)
`there has been an irremediable breakdown in the relationship between SAM and PersonalWeb, (2)
`SAM cannot render competent legal services to PersonalWeb in the post judgment proceedings, and
`(3) there is an actual, adverse, and irreconcilable conflict of interest between SAM and PersonalWeb,
`which mandates SAM’s withdrawal. (Declaration of Robert Kehr (“Kehr Decl.”), ¶¶3-7; Declaration
`of Michael A. Sherman (“Sherman Decl.”), ¶¶5-8; Declaration of Jeffrey F. Gersh (“Gersh Decl.”),
`¶¶5-8.) In both SAM’s view and that of its ethics expert Robert L. Kehr, these three bases of
`mandatory withdrawal have emerged in the period following the June 25, 2021 Withdrawal Order.
`(Id.)
`
`1
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 6 of 14
`
`
`
`Without violating the duty of confidentiality that SAM owes to PersonalWeb, since the
`
`Withdrawal Order, PersonalWeb (1) has not permitted SAM to fully comply with the Magistrate
`
`Judge’s/Court’s April 27 and July 20, 2021 Orders compelling responses to post judgment discovery
`
`(Dkts. 664-665 and 704), and has provided SAM only partial and insufficient information that SAM
`
`did transmit to Amazon’s counsel, and (2) has refused to cooperate with SAM to permit it to
`
`substantively respond to a recent January 28, 2022 email from Amazon’s counsel concerning
`
`PersonalWeb’s compliance with the discovery orders compelling PersonalWeb’s document
`
`production. (Sherman Decl., ¶¶5-8; Gersh Decl., ¶¶5-8.) Surprisingly (certainly surprisingly to SAM),
`
`neither Mr. Richards nor anyone else on behalf of PersonalWeb then filed a notice of appearance or
`
`
`made an appearance.
`
`Finally, given that the case has not in any sense materially advanced or progressed since the
`
`Withdrawal Order — as shown by Amazon having been dormant in the District Court for a period of
`
`about a half-year following the June 25 Withdrawal Order, and also as shown by Amazon not having
`
`timely taken actions it could have taken as a judgment creditor either in the United States Courts or in
`
`the Receivership Court under California state law — SAM’s continued representation is not necessary
`
`
`to guard against any prejudice to Amazon as a judgment creditor — it is certainly less necessary than
`the harm to SAM. (See Sherman Decl., ¶9.) Amazon has apparently elected to not timely pursue many
`different options it did have available to it as a judgment creditor (as discussed below) — regardless
`of who was representing PersonalWeb or even if it was lacking in legal counsel. Conversely, without
`overuse of the “stuck in the middle” metaphor, as shown by Mr. Kehr’s Declaration, the prejudice to
`SAM and its lawyers who are unquestionably “stuck in the middle” is real and disproportionate to any
`benefit needed to mitigate prejudice to Amazon. (Kehr Decl., ¶¶3-7.) Accordingly, SAM requests that
`the Court grant the Motion, and issue an Order permitting it to immediately and unconditionally
`withdraw as counsel of record for PersonalWeb.
`///
`///
`///
`///
`
`2
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 7 of 14
`
`
`
`SUMMARY OF RELEVANT BACKGROUND
`II.
`
`SAM’s Prior Motion to Withdraw Pursuant to Rule 1.16(a)(4) and the Subsequent
`A.
`
`Events Necessitating this Instant Motion to Withdraw Pursuant to Rule 1.16(a)(2)
`
`In April 2021, PersonalWeb terminated SAM as counsel in the judgment collection
`
`proceedings, and retained new counsel, Ronald Richards. (See Sherman Decl., ¶¶2-3; Dkt. 688-1, ¶4,
`
`Dkt. 688-5, ¶2.) On April 27, 2021, Mr. Ronald Richards advised SAM in writing that (1)
`
`PersonalWeb engaged his office to represent PersonalWeb on all post judgment collection
`
`proceedings, and that (2) SAM was not authorized to do any work in connection with such post
`
`judgment collection proceedings on behalf of PersonalWeb. (Dkt. 688-1, Exs. A and B.) On May 25,
`
`
`2021, SAM filed its prior motion to withdraw pursuant to California Rule of Court 1.16(a)(4) — which
`
`mandated SAM’s withdrawal immediately if “the client discharges the lawyer”. (Dkt. 688.) Based on
`
`Mr. Richards’ above-referenced April 27 email, at the time of the prior motion to withdraw, SAM
`
`reasonably believed that Mr. Richards would promptly substitute in as counsel of record in the post-
`
`judgment collection proceedings. (Sherman Decl., ¶3.) Indeed, the Court may recall at the time a
`
`collective sense that Mr. Richards would be soon substituting in. (See Dkt. 686, 7:12-8:7.) In the
`
`
`interim, SAM has been actively waiting for the substitution, and doing everything within its power to
`cause it to happen.
`Post-Withdrawal Order, PersonalWeb (1) has not permitted SAM to fully comply with the
`Court’s April 27 and July 20, 2021, Orders compelling responses to post judgment discovery (Dkt.
`664 and 704) and has provided SAM only partial and insufficient information that SAM did transmit
`to Amazon’s counsel, and (2) has refused to cooperate with SAM to permit it to substantively respond
`to a recent January 28, 2022, email from Amazon’s counsel concerning PersonalWeb’s compliance
`with the Magistrate Judge’s discovery orders compelling PersonalWeb’s document production.
`(Sherman Decl., ¶¶5-8; Gersh Decl., ¶¶5-8.)
`Status of Other Proceedings – State Court Receivership – Impacting SAM and
`B.
`Pending Appeals
`Separately, PersonalWeb is a defendant in a receivership action that PersonalWeb’s secured
`creditors brought against PersonalWeb in the Los Angeles Superior Court, entitled Brilliant Digital
`
`3
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 8 of 14
`
`
`
`Entertainment Inc., et al., v. PersonalWeb, et al. (Case Number 21VECV00575) (the “receivership
`
`proceeding”). (Sherman Decl., ¶4.) SAM does not represent PersonalWeb in the receivership
`
`proceeding and does not represent anyone in that receivership proceeding. (Id.) On June 1, 2021, the
`
`Los Angeles County Superior Court entered a Preliminary Injunction, which prohibits any person from
`
`“[d]oing any act ... to interfere with the Receiver taking control or possession of or managing the
`
`property subject to this receivership” and from interfering “with the exclusive jurisdiction of this Court
`
`over the property and assets of Defendant PersonalWeb.” (Kehr Decl., Ex. E.)
`
`Amazon is not a party to the receivership proceeding. For the most part, SAM obtains
`
`information about that receivership proceeding by reviewing the public docket, with occasional
`
`
`transmittals of information to it, primarily from the Receivers’ counsel. (Gersh Decl., ¶4.) On August
`
`10, 2021, Amazon filed a motion for leave to intervene in the receivership proceeding, on the basis
`
`that it held a $5.4 million judgment against PersonalWeb and therefore had an interest in the property
`
`involved in the litigation. The Los Angeles Superior Court denied that intervention motion in an Order
`
`that Amazon is appealing. (Sherman Decl., Ex. H; Gersh Decl., ¶4.) In that Order, the Los Angeles
`
`Superior Court found that Amazon could protect its interest in its judgment against PersonalWeb:
`
`
`“Under [California] Code of Civil Procedure §708.410, a judgment creditor can file and serve a ‘notice
`of lien’ together with a certified copy of the judgment, and this shall establish the creditor’s right to
`payment from any recovery by the judgment debtor in the present action.” To counsel’s knowledge,
`Amazon only filed notices of judgment lien after entry of that Order, in December, 2021 (Sherman
`Decl., ¶9.)
`SAM currently represents PersonalWeb in two other matters (in addition to the post-judgment
`proceedings). (Id., ¶10.) One of those matters concerns a writ petition before the United States
`Supreme Court. PersonalWeb petitioned for certiorari on April 2, 2021, in the U.S. Supreme Court.
`PersonalWeb Techs., LLC v. Patreon, Inc., No. 20-1394, 2021 WL 1298201. The Writ Petition
`remains pending. SAM is co-counsel on that Writ Petition. (Id.) That Writ Petition seeks review of an
`order of the Federal Circuit U.S.C.A. affirming the District Court’s granting of summary judgment on
`the application of preclusion matters including an earlier decision of the US Supreme Court, Kessler
`v. Eldred, 206 U.S. 285 (1907). (Id.) The other matter concerns an appeal filed by PersonalWeb before
`
`4
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 9 of 14
`
`
`
`the USCA for the Federal Circuit, appeal nos. 2021-1858, 2021-1859, 2021-1860, captioned In re:
`
`PersonalWeb Technologies, LLC; Amazon.com, Inc., et. al. v. PersonalWeb Technologies, LLC, et. al.
`
`All briefing has been completed in that appeal and oral argument has not yet been set. SAM is counsel
`
`for PersonalWeb in the appeal. (Id.)
`
`As set forth in Mr. Kehr’s Declaration, SAM’s representation of PersonalWeb in multiple,
`
`concurrent matters expose SAM to the risk of violating multiple professional obligations that could
`
`lead to significant professional discipline. (Kehr Decl., ¶¶3-7.) SAM will therefore be taking action in
`
`the writ and appeal proceedings to withdraw as counsel of record, unless it is promptly substituted out
`
`as counsel of record in the District Court. (Sherman Decl., ¶10.)
`
`
`III. LEGAL ARGUMENT
`
`Pursuant to California Rule of Court 1.16(a)(2), SAM’s Withdrawal is
`A.
`
`Mandatory Due to Events and Issues Arising After the Withdrawal Order
`
`Due to events occurring after the Withdrawal Order, California Rule of Professional Conduct
`
`1.16(a)(2) precludes SAM from representing PersonalWeb in the post judgment proceedings in this
`
`District Court. Pursuant to Rule 1.16(a)(2), a lawyer “shall withdraw from the representation of a
`
`
`client if…(2) the lawyer knows or reasonably should know that the representation will result in
`violation of these rules or of the State Bar Act”. (Emphasis added; internal asterisks omitted.) As
`addressed below, and as set forth in Mr. Kehr’s Declaration, there are three separate and independent
`bases under Rule 1.16(a)(2) that mandate SAM’s immediate withdrawal in the post-judgment
`proceedings. (Kehr Decl., ¶¶3-6.)
`Business & Professions Code § 6103
`1.
`Business & Professions Code § 6103 precludes SAM from continuing to represent
`PersonalWeb in the post judgment proceedings because SAM’s ongoing representation could result in
`its violation of the Preliminary Injunction. See, e.g., In Matter of Genis, 2015 WL 1295958 (Cal. Bar.
`Ct. 2015.) Business & Professions Code § 6103 provides that: “A willful disobedience or violation of
`an order of the court requiring him to do or forbear an act connected with or in the course of his
`profession, which he ought in good faith to do or forbear, and any violation of the oath taken by him,
`or of his duties as such attorney, constitute causes for disbarment or suspension.”
`
`5
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 10 of 14
`
`
`
`Here, the Preliminary Injunction broadly prohibits, among other things, any person from
`
`“[d]oing any act ... to interfere with the Receiver taking control or possession of, or managing the
`
`property subject to this receivership” and from interfering “with the exclusive jurisdiction of this Court
`
`over the property and assets of Defendant PersonalWeb.” (Kehr Decl., Ex. E.) Thus, should SAM
`
`continue to represent PersonalWeb in the post judgment proceedings, SAM may be violating the
`
`Preliminary Injunction, as SAM would be (1) participating in PersonalWeb’s interference with the
`
`Receiver’s ability to take control of property subject to the receivership, and (2) interfering with the
`
`Los Angeles Superior Court’s exclusive jurisdiction over PersonalWeb’s property. (Kehr Dec. ¶¶3-4.)
`
`Due to the irremediable breakdown in the relationship between PersonalWeb
`2.
`
`
`and SAM in the post judgment proceedings as detailed in the Declarations of
`
`Messrs. Sherman and Gersh, SAM cannot represent PersonalWeb competently
`
`under California Rule of Professional Conduct, Rule 1.1
`
`SAM cannot represent PersonalWeb competently, as required by California Rule of
`
`Professional Conduct 1.1. In particular, Rule 1.1 provides that “A lawyer shall not intentionally,
`
`recklessly, with gross negligence, or repeatedly fail to perform legal services with competence.” SAM
`
`
`does not have authorization to do what is required to represent PersonalWeb competently with respect
`to the existing court orders compelling compliance with post judgment discovery served on
`PersonalWeb by Amazon. PersonalWeb has not communicated instructions or provided any
`information that would allow SAM to fully comply with the outstanding court orders. (Sherman Decl.,
`¶¶5-8.) Accordingly, SAM has its hands tied because it is not authorized to take any action in the post
`judgment proceedings. See Chaleff v. Superior Court (1977) 69 Cal.App.3d 721, 724 (“while the
`attorney’s duty is to his client, he cannot be placed in the position where discharging that duty impinges
`upon his ethical responsibility as a member of the bar.”) This breakdown in communication became
`manifest following the Withdrawal Order, and has materially worsened in the last several weeks, and
`is covered more extensively in the attached Sherman and Gersh declarations. (Sherman Decl., ¶¶5-8.)
`///
`///
`///
`
`6
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`4853-7716-9421, V. 3
`
`

`

`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 11 of 14
`
`3.
`
`
`
`Due to a conflict of interest between SAM and PersonalWeb that recently arose
`
`in the post judgment proceedings, California Rule of Professional Conduct
`
`1.7(b) precludes SAM from representing PersonalWeb in the post-judgment
`
`proceedings
`
`SAM cannot continue to represent PersonalWeb in the post judgment proceedings due to a
`
`nonwaivable conflict of interest under California Rule of Professional Conduct 1.7(b). Rule 1.7(b)
`
`provides that: “A lawyer shall not, without informed written consent from each affected client and
`
`compliance with paragraph (d), represent a client if there is a significant risk the lawyer’s
`
`representation of the client will be materially limited by the lawyer’s responsibilities to or relationships
`
`
`with another client, a former client or a third person, or by the lawyer’s own interests.” (Emphasis
`
`added.)
`
`Here, in July 2021, the Magistrate Judge Van Keulen ordered PersonalWeb to produce certain
`
`documents. (Dkt. 704.) While Amazon has indicated that it intends to enforce this discovery order,
`
`SAM does not have authorization to produce documents or carry out the obligations that would be
`
`required to ensure that a client complies with its discovery obligations. (Sherman Decl., ¶¶5-8; see,
`
`
`e.g., Blanton v. Womancare, Inc., 38 Cal.3d 296, 404 (1985 (explaining that only the client has the
`authority to make substantive decisions).) As such, Amazon’s counsel has indicated that it will be
`seeking discovery sanctions against PersonalWeb and SAM. In that regard, on January 28, 2022,
`Amazon’s counsel emailed SAM, seeking PersonalWeb’s production pursuant to the July 2021 order.
`(Gersh Decl., ¶7, Ex. J.) Amazon’s counsel concluded the email as follows:
`If PersonalWeb refuses to produce any of the above categories of
`documents, please identify which categories of documents that it will
`produce and which it will not produce and explain why not. Please also
`state what actions Stubbs Alderton has taken and will take to ensure that
`PersonalWeb complies with the court’s orders. Will Stubbs Alderton
`supervise the collection and production of records or will it once again
`leave it to the client to determine what documents are relevant and
`responsive? (Id., Ex. J.)
`
`
`This e-mail is on top of the colloquy in the recently concluded Case Management Conference
`between counsel for Amazon and the Court, on January 20, 2022, to the effect that Amazon has a clear
`
`
`7
`
`NOTICE OF MOTION AND CASE NO: 5:18-MD-02834-BLF
`SECOND MOTION TO WITHDRAW CASE NO: 5:18-CV-00767-BLF
`AS COUNSEL FOR PERSONALWEB TECHNOLOGIES, LLC CASE NO.: 5:18-CV-05619-BLF
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`4853-7716-9421, V. 3
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Case 5:18-md-02834-BLF Document 728 Filed 02/10/22 Page 12 of 14
`
`
`
`interest unless its requirements are met, in pursuing contempt citations against PersonalWeb and SAM.
`
`Efforts to seek clarification from Amazon’s counsel about its position on contempt against SAM were
`
`met with “tight lipped” responses, neither affirming nor denying. (Declaration of David Parker, ¶¶3-
`
`4.) And before these developments in late January 2022, in the fall of 2021 Amazon threatened both
`
`SAM and PersonalWeb with renewed sanctions activity, with Amazon pointing to deficient
`
`compliance by PersonalWeb to the pending Court orders. (Sherman Decl., ¶6 ; Gersh Decl., ¶6.) These
`
`dynamics point to a material risk of a contempt motion and/or motion for sanctions being brought
`
`against SAM — in an instance where SAM denies any basis on which to bring contempt proceedings
`
`against it or its attorneys, or that SAM has engaged in sanctionable behavior. If such proceedings
`
`
`were commenced against SAM, the firm would vigorously defend itself and protect its interests.
`
`These facts evince the emergence of an actual conflict between SAM and PersonalWeb in the
`
`post judgment proceedings. To defend itself against exposure to the risk of a contempt motion and/or
`
`sanctions, SAM will need to take positions adverse to PersonalWeb. (Kehr Decl., ¶5.) Necessarily,
`
`there is an actual conflict of interest, which requires PersonalWeb’s immediate withdrawal.
`
`B. Whatever Challenges that Amazon is Experiencing in Its Post Judgment
`
`
`Collection Proceedings Does Not Rise to the Level of Prejudice to Amazon that
`Outweighs SAM’s Mand