A recent decision in Galderma Labs v. Actavis Mid Atlantic, concerning the breadth of an advance waiver between a sophisticated client and law firm, should be reviewed very carefully by in-house and outside counsel. The Northern District of Texas court held that a few sentences of an engagement letter provided sufficient advance waiver notice of an unforeseen future conflict, and distinguished a 2008 New Jersey decision with similar facts (Celgene v. KV Pharmaceutical). Counsel should note the language used to balance a client's relative sophistication with a law firm's ethical duty to provide reasonably adequate disclosure for the client to provide informed consent for such advance waivers.
The court's decision arose from Galderma's motion to disqualify Actavis' counsel because that same counsel had represented Galderma for almost a decade. Galderma had retained Vinson & Elkins in 2003 to handle employment matters, its general counsel signing that he understood and agreed to the terms of Vinson's engagement letter which contained a broad waiver of future conflicts of interest, and which specifically stated:
