Hogan & Hartson is being sued for malpractice by a client who alleges the firm used attorney-client information to boost a competitor.
In the complaint, filed in Washington, D.C., Superior Court last month, Prestige Brands Inc., makers of household products like Comet and Compound W, claims lawyers at Hogan & Hartson breached their retainer agreement and committed legal malpractice by helping another company get a competing product on the market.
Hogan has yet to respond to the allegations, but the firm has hired Mark Foster, a partner at Zuckerman Spaeder, to defend the action. Last year, Foster successfully battled malpractice allegations against Wiley Rein when the firm was sued by former client Blackwater Security Consulting. Foster and J. Warren Gorrell Jr., Hogan's chairman, declined to comment.
Prestige is using Marianne Roach Casserly, a partner in the D.C. office of Alston & Bird, along with lawyers from the firm's Atlanta and New York offices. Casserly did not return calls seeking comment.
Charles Jolly, Prestige's general counsel, says he found out Hogan was working for a competitor from the Food and Drug Administration's Web site. "I've been practicing for 40 years, and I can think of only one time when I've gotten in a dispute with a firm that I hired for outside counsel," Jolly says.
The product at the center of the dispute is an over-the-counter mouthguard used by people who grind their teeth while sleeping. Dental Concepts, a company that later merged with Prestige, hired Hogan partner Howard Holstein in 2005 to help get its product -- the Doctor's NightGuard -- approved by the FDA to be sold in stores without a prescription.
One year after its mouthguard was approved, Prestige claims it learned that a competing company, DenTek Oral Care Inc. -- also using Holstein as its lawyer -- had received FDA approval for a mouthguard product.
Prestige, in its complaint, says the firm concealed the conflict and used confidential information from its representation of Prestige, such as testing methods, specifications and manufacturing details, to help DenTek get its mouthguard onto store shelves "substantially earlier than what could otherwise be accomplished." Holstein and former Hogan partner Jeffrey Shapiro, now with Hyman, Phelps & McNamara, are also named as defendants in the malpractice action.
The defendants are expected to file their response later this month.
GRINDING LITIGATION
The suit against Hogan was originally filed in Westchester County, N.Y., but the case was dismissed in January after Hogan's lawyers argued the court did not have jurisdiction. Prestige refiled in D.C. Superior Court on Feb. 17.
And the malpractice case isn't the only litigation over the mouthguard.
Prestige subsidiary Medtech Products Inc. is also currently suing ex-employees, retailers and other oral-care manufacturers in the U.S. District Court for the Southern District of New York for allegedly stealing trade secrets. That suit alleges retailers, such as CVS/pharmacy, violated the Doctor's NightGuard trademark. Alston & Bird is representing Medtech in that case. (Karl Geercken, a partner in the firm's New York office, is serving as the lead lawyer.)
While no dollar figure has been tied to either case, according to court documents, the Irvington, N.Y.-based Prestige claims it has lost "millions of dollars" in potential sales. In the Hogan case, which is before Judge Brian Holeman, Prestige is seeking compensatory and punitive damages, as well as reimbursement of fees paid to the firm.
Though Holstein and Hogan decline to comment, Holstein filed a detailed affidavit explaining his representation of Prestige while the malpractice case was in Westchester County. According to that affidavit, Holstein says he was approached by Dental Concepts in June 2005. At a two-hour meeting in New York, Holstein talked with Dental Concepts officials about their options for winning FDA approval for the Doctor's NightGuard. Shortly afterward, Holstein sent a letter to Dental Concepts' president, Michael Lesser, acknowledging Hogan would represent the company and attached a "General Terms of Representation" document.
That document stated that Holstein would be the lead lawyer in the matter and that he would likely use some associates. It also stated that Hogan's standard hourly rates ranged from $150 an hour for junior associates to $675 an hour for certain partners. Holstein noted his billing rate at the time was $500 per hour. The retainer document also states that "[u]nless we have your specific agreement that we may do so, we will not represent another client in a matter, which is substantially related to a matter in which we represent you and in which the other client is adverse to you."
In August 2005, Holstein enlisted Shapiro to help with the matter. While the Hogan lawyers were representing Dental Concepts, the company merged with Prestige. In December 2005 Holstein filed the application with the FDA on Prestige's behalf. Three months later, the FDA approved the product.
According to Holstein's affidavit, Holstein and Hogan continued to work for Prestige. In September 2006, Jolly asked Holstein to file a complaint with the FDA about a competitor who was selling unauthorized mouthguards.
Around the same time, according to court documents, Holstein and Shapiro began representing DenTek, a company that included former Dental Concepts employees who had worked with Hogan on the Doctor's NightGuard application.
In his affidavit, Holstein says he, Shapiro and some staff members "coordinated all of the work on DenTek's FDA submission" for the company's own over-the-counter dental guard.
When the FDA approved DenTek's own mouthguard in January 2007, it noted that the DenTek NightGuard is "substantially equivalent to The Doctor's NightGuard."
