LOS ANGELES — A law firm that was representing Toys R Us in one case and
fighting against the toy company in another will not be disqualified.
According to www.jdsupra.com,
in Lanard Toys Limited v. Toys R Us Inc., Gordon and Rees Scully
Mansukhani LLP began representation of Lanard Toys Limited in Florida
against Toys R Us. Four months later, however, other lawyers from
Gordon and Rees began their representation of Toys R Us in a case in
After the conflict of interest was discovered, Gordon and Rees
withdrew from representing Toys R Us in the California matter; however, the
law firm did not withdraw from the Florida case, resulting in Toys R Us filing a motion seeking disqualification.
According to Gordon and Rees, the dual representation came about
because of an “inadvertent input error,” which occurred because
of some of the names from the parties being accidentally omitted from
the tracking software that prevents conflicts from taking place. The
firm asserted it was not down to deliberately disregarding the duty
of loyalty to a client.
Eric Caligiuri, an attorney with the California-based law firm
Weintraub Tobin, told the Northern California Record that when
it comes to filing a disqualification motion in an active litigation,
conflict of interest cases don’t occur that often.
“However, a conflicts check should always be run before any
client representation is undertaken,” he said. “If a proper and
careful conflicts check is undertaken before agreeing to represent a
client, then this should prevent conflict of interest issues from
arising later during litigation.”
In this situation, Gordon and Rees said that the only activity it
took part in involving the Toys R Us case was with “the finalization and filing of
(Toys R Us') answer to the complaint at the direction of the Palter Firm,”
which in this instance was Toys R Us' primary counsel, according to
According to Gordon and Rees, it never spoke to Toys R Us prior to the
conflict issue being raised.
Furthermore, between the two parties, there was no agreement
entered nor was any confidential information relating to Toys R Us'
defense approach exchanged.
With the Florida case, though, Gordon and Rees was the primary
counsel in the Lanard matter, had spent a considerable amount of time
reviewing documents, and had represented Lanard in previous cases.
Consequently, Lanard and Gordon and Rees said that to bring in new
counsel up to speed on the Florida matter would take considerable
time and effort.
Caligiuri, however, believes there is no reason to disbelieve what
happened regarding the input error.
“The attorneys at the firm filed a declaration under penalty of
perjury stating what happened,” he said. “And, more generally,
attorneys have an ethical duty to be honest with the court.”
In analyzing the situation, the Florida court denied Toys R Us'
disqualification motion. While the court found that Gordon and Rees
had violated Florida’s conflict-of-interest laws, it found that
this was down to an accidental input error, which caused the
Yet, had there been more involvement in the other litigation
between the attorneys and the opposing party, Caligiuri said that
there would have been a stronger possibility of disqualification.
“This is because the likelihood that client confidential
information was actually exchanged would have been much higher,” he