Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 1 of 8 PageID #: 5635
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`C.A. No. 6:12-cv-799-LED
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`JURY TRIAL DEMANDED
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`INVENSYS SYSTEMS, INC.,
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`v.
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`Plaintiff,
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`EMERSON ELECTRIC CO. and
`MICRO MOTION INC., USA,
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`and
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`Defendants.
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`MICRO MOTION INC., USA,
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`v.
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`Counterclaim-Plaintiff,
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`INVENSYS SYSTEMS, INC.,
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`Counterclaim-Defendant.
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`INVENSYS SYSTEMS, INC.’S RESPONSE TO DEFENDANTS’ MOTION TO COMPEL
`THE PRODUCTION OF THE DICKSON PRESENTATION AND ALL OTHER
`DOCUMENTS RELATING TO INVENSYS LICENSE REVENUE PROJECTIONS
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 2 of 8 PageID #: 5636
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`The state court has already rejected waiver arguments similar to those advanced by
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`Defendants Emerson Electric Co. and Micro Motion, Inc. (collectively “Defendants”) in their
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`motion to compel. This Court should respect the state court’s determination that there was no
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`waiver. Even if the Court were to revisit this issue, however, Plaintiff Invensys Systems, Inc.’s
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`(“Invensys”) former prospective counsel could not waive Invensys’s privilege.
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`BACKGROUND
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`Invensys originally consulted Shore Chan Bragalone DePumpo LLP (“Shore Chan”)
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`about pursing its patent infringement claims against Defendants, but ultimately decided not to
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`retain Shore Chan. This resulted in a fee dispute that required Invensys to sue Shore Chan in
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`state court in a case styled The Chancellor, Masters & Scholars of the University of Oxford et al.
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`v. Shore Chan Bragalone DePumpo LLP, No. 13-1668 (192d D. Ct. Dallas Cnty., Tex.) (the
`“Shore Chan Lawsuit”).1
`In the Shore Chan Lawsuit, Invensys merely sought a declaration that it did not owe
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`Shore Chan any fees because the parties had never entered into a written contingency fee
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`agreement (and never discussed compensation on anything other than a contingency fee basis).
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`See Invensys’s Orig. Pet. ¶¶ 15-16, 23-24, Shore Chan Lawsuit (Feb. 8, 2013) (Ex. A). Invensys
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`did not seek damages (other than attorneys’ fees under the Texas Declaratory Judgment Act) or
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`accuse Shore Chan of malpractice. Shore Chan, however, filed a counterclaim for quantum
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`meruit (and other causes of action) seeking damages for allegedly unpaid legal fees. See Shore
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`Chan’s 4th Am. Answer, Affirmative Defenses, and Countercls. ¶¶ 11-18 (Nov. 12, 2013) (Ex. B
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`to Defs.’ Mot.).
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`In support of its counterclaims, Shore Chan’s pleadings referenced a presentation Brian
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`Dickson, a former Invensys employee, made to Invensys’s in-house counsel about pursuing a
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`1 Researchers at the University of Oxford developed the patented technology, and at one time
`Oxford had a fee agreement with Shore Chan. Thus, Oxford was also a party to the Shore
`Chan suit.
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`1
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 3 of 8 PageID #: 5637
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`patent
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`infringement suit against Defendants.2 There are several versions of the Dickson
`presentation, some of which were sent to Shore Chan during the course of its relationship with
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`Invensys and some that were not.
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`In the state court litigation, Shore Chan moved to compel production of a number of
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`documents that Invensys claimed were privileged, including versions of the Dickson presentation
`that had not been sent to Shore Chan. See Decl. of Christina Ponig ¶ 3 (Ex. B).3 In its motion to
`compel, Shore Chan argued (among other things) that Invensys had waived privilege by suing
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`Shore Chan. See id. ¶ 4. In an order from the bench that was made off the transcribed record,
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`the state court judge held that most of the documents Shore Chan sought, including the Dickson
`presentation, were privileged.4 See id. After informing the parties of his decision, the state court
`judge instructed the parties to prepare an agreed order reflecting his ruling, but the Shore Chan
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`Lawsuit settled before the state court’s decision was memorialized in a written order. See id.
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`Defendants do not appear to seriously contest that the Dickson presentation is privileged.
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`See Defs.’ Mot. to Compel Produc. of the Dickson Presentation and All Other Docs. Relating to
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`Pl.’s License Revenue Projections at 4-6 (“Defs.’ Mot. to Compel”) (only raising arguments
`relating to waiver).5
`Defendants’ argument should be rejected for a number of reasons.
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`Instead, Defendants claim that Shore Chan waived Invensys’s privilege.
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`2 A copy of the relevant version of the Dickson presentation will be submitted to the Court for in
`camera review.
`3 Shore Chan’s motion to compel and the supporting exhibits were sealed by the state court. See
`Sealing Order Pursuant to Tex. R. of Civ. P. 76a, Shore Chan Lawsuit (Oct. 16, 2013) (Ex. C).
`A copy of Shore Chan’s motion will be provided to the Court for in camera inspection if the
`Court requests.
`4 The documents that the state court found were not privileged have already been produced in
`this case.
`5 Without any factual basis whatsoever, Defendants claim that listing Byron Jamison as a co-
`author of the Dickson presentation is an effort to “fabricate privilege.” See Defs.’ Mot. to
`Compel at 3 n.3. Such unsupported and incendiary attacks on counsel are inappropriate and
`should not be countenanced by the Court.
`Moreover, Defendants’ argument is inaccurate and irrelevant. Even a cursory review of
`the Dickson presentation proves that it reflects the advice of counsel. It is also undisputed that
`the Dickson presentation was used in a presentation to Invensys’s in-house attorneys. See id.
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 4 of 8 PageID #: 5638
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`ARGUMENT
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`I.
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`State Law Governs Waiver of the Attorney Client Privilege, If It Is More Protective
`Than Federal Law.
`As an initial matter, Defendants’ assertion that Fifth Circuit law governs the waiver issue
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`is not entirely accurate. See Defs.’ Mot. to Compel at 4 n.5. Federal Rule of Evidence 502(c)
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`provides that disclosing privileged information in a state court proceeding does not constitute a
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`waiver in a subsequent federal suit if the disclosure would not constitute a waiver under either
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`federal or state law. Likewise, the advisory committee notes state that “the federal court is to
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`apply the law that is most protective of privilege and work product.” See FED. R. EVID. 502
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`advisory committee notes (emphasis added). Although Fifth Circuit
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`law does not support
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`Defendants’ waiver argument, to the extent it does, the Court must follow Texas law.
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`II.
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`This Court Must Defer to the State Court’s Prior Determination That Invensys Did
`Not Waive Privilege.
`In the Shore Chan Lawsuit, Shore Chan moved to compel production of versions of the
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`Dickson presentation that it had not previously received claiming that Invensys waived privilege
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`by filing suit. See Ponig Decl. ¶ 3 (Ex. B). The state court rejected this argument. See id. ¶ 4.
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`“[A] state court order finding no waiver in connection with a disclosure made in a state
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`court proceeding is enforceable under existing law in subsequent federal proceedings.” See FED
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`R. EVID. 502 advisory committee notes. In fact, reviewing a state court’s determination of state
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`law would be contrary to basic principles of federalism. Accordingly, this Court should defer to
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`the state court’s decision that Invensys did not waive the privileges protecting the Dickson
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`presentation.
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`The attorney-client privilege covers communications from a client to his attorney, not just
`communications from an attorney to his client as Defendants seem to suggest. See United
`States v. Neal, 27 F.3d 1035, 1048 (5th Cir. 1994).
`Finally, Defendants half-heartedly suggest that the Dickson presentation is not protected
`by the work product doctrine because it was prepared two years before Invensys filed suit. See
`Defs.’ Mot. at 3 n.4. But the work product doctrine can apply even if litigation is not
`imminent. See In re: Kaiser Aluminum & Chem. Co., 214 F.3d 586, 593 (5th Cir. 2000).
`Again, even a cursory review of the Dickson presentation shows that it was prepared in
`anticipation of litigation.
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 5 of 8 PageID #: 5639
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`III.
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`Even If This Court Were to Reconsider the Waiver Issue, Invensys Did Not Waive
`the Privileges Protecting the Dickson Presentation.
`Even the cases Defendants cite expressly hold that “the mere institution of suit against an
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`attorney is insufficient to waive the attorney-client privilege as to third parties in a separate
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`action that concerns the same subject matter.” Indus. Clearinghouse, Inc. v. Browning Mfg. Div.
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`of Emerson Elec. Co., 953 F.2d 1004, 1007 (5th Cir. 1992). Thus, Invensys did not waive its
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`attorney-client and work product privileges by bringing suit against Shore Chan.
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`Nor could Shore Chan waive Invensys’s privileges.
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`It is hornbook law that since “it is
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`the client who is the holder of the privilege, the power to waive it is his.” MCCORMICK ON
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`EVIDENCE § 93 (7th ed. 2013); see also In re Seagate Tech., LLC, 497 F.3d 1360, 1372 (Fed. Cir.
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`2007) (“The attorney-client privilege belongs to the client, who alone may waive it.”); Burnett v.
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`Texas, 642 S.W.2d 765, 770 (Tex. Crim. App. 1982) (“The law is perfectly plain that the waiver
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`of the client-attorney privilege, like the privilege, belongs solely to the client, and not to the
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`attorney.” (quotations and alterations omitted)). Invensys did not disclose any information about
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`the Dickson presentation, and Shore Chan lacked the authority to waive Invensys’s privilege.
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`The cases Defendants cite are inapposite. Laughner v. United States, 373 F.2d 326, 327
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`(5th Cir. 1967), was a habeas case in which the petitioner accused his attorney of providing
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`ineffective assistance by advising him to plead guilty and then sought to preclude the attorney
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`from testifying about their conversations. Laughner represents a paradigmatic application of the
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`offensive use doctrine. See id. (holding that the petitioner “demanded and obtained a factual
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`judicial inquiry” into his claims of ineffective assistance). In contrast, Shore Chan’s discussion
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`of the Dickson presentation was made to support its own quantum meruit claim. Invensys never
`put the Dickson presentation at issue in the Shore Chan Lawsuit.6 Similarly, dicta in Industrial
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`6 Defendants’ claim that Shore Chan’s statements about the Dickson presentation were made in
`response to Invensys’s allegations is simply wrong. See Defs.’ Mot. to Compel. at 5. Invensys
`did file special exceptions under Texas Rule of Civil Procedure 47 seeking the maximum
`amount of Shore Chan’s damages, but that request did not require Shore Chan to reveal
`anything but the amount of damages it was seeking and not any privileged information. See
`TEX. R. CIV. P. 47. Likewise, Invensys filed a motion to compel seeking production of
`information about Shore Chan’s damages calculation, but that motion did not require Shore
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 6 of 8 PageID #: 5640
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`Clearinghouse cited Laughner for this proposition. See Indus. Clearinghouse, 953 F.2d at 1007.
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`Nothing in Industrial Clearinghouse (or any other case of which Invensys is aware) suggests that
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`a former prospective attorney can unilaterally waive the client’s attorney-client privilege in order
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`to pursue a claim against the client. Likewise, Defendants cite no support for their claim that
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`Invensys’s decision not to file a motion to seal constituted a waiver.
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`IV.
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`If Any Waiver Occurred, It Was Limited to the Specific Statements Shore Chan
`Revealed.
`Even if the Court believes a waiver did occur, its scope was limited. The Dickson
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`presentation is not limited to a discussion of possible licensing revenue.
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`In Mass Engineered
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`Design, Inc. v. Ergotron, Inc., No. 206 CV 272, 2008 WL 744705, at *1 (E.D. Tex. Mar. 19,
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`2008), on which Defendants rely, the patentee submitted a declaration to the USPTO during
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`reissue proceedings arguing that the patent’s claims had been unnecessarily limited. The Court
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`rejected the accused infringer’s argument that the waiver extended to all matters related to
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`patentability (such as inventorship and validity), instead limiting the waiver to the scope of the
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`claims. See id. at *2.
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`Likewise, any waiver in this case would not extend to any part of the Dickson
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`presentation other than that covered by the narrow statement made by Shore Chan. The
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`statement in Shore Chan’s pleadings on which Defendants rely were intended to identify a
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`specific piece of evidence that Shore Chan believed supported the amount of damages it was
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`claiming. See Defs.’ Mot. to Compel at 2. Thus, the subject matter of the disclosure was a
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`portion of the Dickson presentation itself, not all documents that might relate to that subject
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`matter but that were not identified or relied on by Shore Chan.
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`Chan to provide the requested information in its response brief. All of Shore Chan’s public
`disclosures about the Dickson presentation were done sua sponte, for its own reasons and for
`its own benefit, and without Invensys’s permission.
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 7 of 8 PageID #: 5641
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`CONCLUSION
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`For the foregoing reasons, Defendants’ Motion to Compel Production of the Dickson
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`Presentation and All Other Documents Relating to Invensys’s License Revenue Projections
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`should be denied.
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`Dated: July 17, 2014
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`Respectfully submitted,
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`/s/ Claudia Wilson Frost
`Claudia Wilson Frost
`State Bar No. 21671300
`Jeffrey L. Johnson
`State Bar No. 24029638
`Dawn M. Jenkins
`State Bar No. 24074484
`DLA PIPER LLP
`1000 Louisiana, Suite 2800
`Houston, TX 77002
`Telephone: 713.425.8400
`Facsimile: 713.425.8401
`Claudia.Frost@dlapiper.com
`Jeffrey.Johnson@dlapiper.com
`Dawn.Jenkins@dlapiper.com
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`Nicholas G. Papastavros
`Daniel Rosenfeld
`DLA PIPER LLP
`33 Arch Street, 26th Floor
`Boston, MA 02110
`Telephone: 617.406.6000
`Facsimile: 617.406.6100
`Nick.Papastavros@dlapiper.com
`Daniel.Rosenfeld@dlapiper.com
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`Todd S. Patterson
`DLA PIPER LLP
`401 Congress Ave., Suite 2500
`Austin, TX 78701-3799
`Telephone: 512.457.7017
`Facsimile: 512.721.2217
`todd.patterson@dlapiper.com
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`ATTORNEYS FOR PLAINTIFF
`INVENSYS SYSTEMS, INC.
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`EAST\79356530.2
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`Case 6:12-cv-00799-JRG Document 186 Filed 07/17/14 Page 8 of 8 PageID #: 5642
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on July 17, 2014, all counsel of record who are deemed to
`have consented to electronic service are being served with a copy of this document via the
`Court’s CM/ECF system per Local Rule CV-5(a)(3). Any other counsel of record will be served
`by facsimile transmission and/or first class mail.
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`/s/ Claudia Wilson Frost
`Claudia Wilson Frost
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`EAST\79356530.2
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