King & Spalding has won a series of rulings in lawsuits arising out of its controversial representation of Chinese telecommunications company ZTE Corp. But the firm still faces a potential trial in a wrongful termination suit brought by a former firm associate.
Southern District of New York Judge Valerie Caproni, in a ruling this month, said King & Spalding chairman Robert Hays would not have to sit for a deposition in the wrongful termination lawsuit brought by the former associate, David Joffe. Meanwhile, a state court judge has dismissed a separate lawsuit brought by the firm’s former adversary, who cited Joffe’s suit in claiming the firm engaged in “deceit and misconduct.”
Both lawsuits stem from the firm’s representation of ZTE Corp., a Chinese telecommunications company, in a breach of contract suit before Judge Lewis Kaplan in the Southern District of New York—Vringo v. ZTE, 14-cv-4988. In that case, tech company Vringo Inc., now known as FORM Holdings, accused ZTE of disclosing confidential information, breaching a nondisclosure agreement between the two firms.
As the Vringo case progressed through discovery in 2015, Joffe, who was on the King & Spalding defense team at the time, claimed he discussed with partners Robert Perry and Paul Straus whether it was ethical for the firm to continue to represent ZTE. Specifically, his complaint alleges, he expressed concern that King & Spalding would fail to ensure compliance with ZTE’s disclosure obligations, or that the firm had already made prior misrepresentations.
His complaint cites a 2015 hearing in which Kaplan told King & Spalding attorneys, “I see obstruction all over the place, not in a technical obstruction of justice criminal case sense, but obstruction of legitimate discovery, and I am not going to stand for it for much longer.”
Kaplan issued an order for Perry and Straus to show why they should not be sanctioned. King & Spalding subsequently filed to withdraw as counsel for ZTE.
Joffe said that soon after he told the firm’s general counsel and its outside counsel about ethical breaches that led to Kaplan’s sanctions order, the firm retaliated against him. He was eventually fired in December 2016.
Joffe filed his wrongful termination suit in May of this year, alleging he was fired for raising ethical concerns about the conduct of the partners.
Joffe’s attorney in the wrongful termination suit, Andrew Moskowitz, who is of counsel at Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins, then sought to depose firm chairman Hays, citing an email chain in which a firm partner mentioned he needed to share information with Hays and had asked what the firm’s plans were for Joffe.
Moskowitz told Judge Caproni that Hays “does not deny personal knowledge” of the Vringo lawsuit, based on a declaration he submitted.
Proskauer Rose, defending King & Spalding in Joffe’s wrongful termination suit, moved for a protective order to preclude Hays’ deposition, telling Caproni that Hays had no involvement in Joffe’s termination.
Ruling in favor of King & Spalding, Caproni said the “fact that he was not involved in the decision-making process suggests that any relevant information he has is second-hand and available from other witnesses directly involved” in Joffe’s firing.
The parties are scheduled to complete discovery at the end of October, and a trial, with firm partners as potential witnesses, could occur next year.
Meanwhile, the firm is no longer battling a related suit over its ZTE representation in Vringo.
FORM Holdings, previously King & Spalding’s adversary in Vringo, sued the firm and partners Perry and Straus in Manhattan Supreme Court earlier this year, alleging a “chronic and extreme pattern” of attorney deceit.
FORM claimed King & Spalding and the partners sought to conceal evidence and mislead parties and the court when defending ZTE, citing Joffe’s complaint.
But Manhattan Supreme Court Justice Charles Ramos last month asked FORM’s attorney during oral argument why the company didn’t raise these issues in the case before Kaplan. Meanwhile, King & Spalding’s attorney, Frederick Warder, argued to Ramos that FORM’s suit is barred by a settlement agreement, which released all of ZTE’s attorneys.
“It’s frivolous. Your client released King & Spalding,” Ramos told FORM’s attorney, Cole Schotz partner Joseph Barbiere. Ramos dismissed the case with prejudice.
Barbiere did not immediately return calls for comment, and a representative at FORM Holdings declined to comment. Warder, a partner at Patterson Belknap Webb & Tyler, has declined to comment on the ruling.
A King & Spalding spokeswoman did not immediately return messages seeking comment on the litigation rulings. The firm has previously said in a statement that Joffe’s termination had nothing to do with the Vringo vs. ZTE litigation and that Joffe was terminated because he refused to comply with directives and expectations that apply to all firm associates.