Baker Hostetler Moves to Withdraw
Elysium's law firm, Baker Hostetler, and all of Baker Hostetler's attorneys associated with the case, have asked Judge Carney for permission to withdraw from further representation of Elysium Health and Mark Morris. They propose that Elysium and Morris be represented instead by Marc Williams of Cohen Williams. Cohen Williams is a small law firm (13 attorneys UPDATE: 10 attorneys and three staff positions) that was founded about five years ago and handles a variety of litigation matters.
You can read Baker Hostetler's motions here:
Request to withdraw from representing Elysium Health
Request to withdraw from representing Mark Morris
Judge Carney has ordered all the attorneys -- Cooley, Baker Hostetler, and Cohen Williams -- to appear before him on Tuesday January 21st at 1:30pm to discuss the matter:
On November 14, 2019, Right of Assembly first reported that Baker Hostetler had indicated its intent to request to withdraw from the case. Then a couple weeks ago we were able to access the transcript from a December 6 discovering hearing at which both parties appeared to discuss with the Magistrate Judge Baker Hostetler's notice of intent to withdraw, which seemed to provide solid corroboration of the initial report.
However, Elysium had by then, just before Christmas, announced that they had gained $40M of new funding. We assumed that Baker Hostetler's interest in withdrawing was based on not getting paid (simply because that is a common motivation for such requests, not because we have special knowledge), and we assumed that the new funding would have resolved any such problem.
So we are as surprised as can be to see this announcement.
What comes next? What does it mean?
I wish I could be in Judge Carney's courtroom on Tuesday to learn more (if anybody goes, please send us a report via the tip line!), but here is what I would expect will be on Judge Carney's mind as he considers Baker Hostetler's request.
First, why does Baker Hostetler feel that it needs to withdraw? If it has a fundamental disagreement with the client about how to approach the litigation, that's different from if it merely isn't getting paid.
If the problem is that Baker Hostetler isn't getting paid, then what was that we read about the $40M, and why isn't Elysium paying its attorneys?
Second, would Elysium be prejudiced by allowing Baker Hostetler's withdrawal? I know nothing about Cohen Williams, but a quick glance suggests it is a serious firm, even if small and junior compared to Baker Hostetler, and some of the Cohen Williams partners have serious experience.
On the other hand, going up against a legal powerhouse like Cooley is not a small matter, and you would think that a firm like Baker Hostetler would be better matched for that no matter how serious Cohen Williams might be. If I had to guess, I would say that there was some inevitable prejudice to Elysium, but not so much that the Court would deny permission on that ground.
Third, I would expect that Judge Carney will be asking whether ChromaDex in particular, or the litigation in general, would be prejudiced by allowing the substitution?
We are on the verge of a HUGE trial -- many claims have JUST been approved to be tried, with significant complexity, requiring some specialized knowledge (e.g., Patent Misuse) -- and evidentiary motions are supposed to be re-set very soon, and a trial date soon thereafter.
The trial in this case was originally set for April 2019, then postponed to July 2019, then postponed to October 2019, then pulled off-calendar entirely (to be re-calendared after Judge Carney's rulings on cross-motions for summary judgment, which issued on Thursday). And the Delaware action has been stayed for more than a year pending the outcome of the California action, so any delay is doubly prejudicial.
Cooley is probably ready to go to trial on a moment's notice. They were ready in October. What are the odds that Cohen Williams is just as ready to go to trial? Not good.
On the one hand, Judge Carney is very unlikely to allow Elysium to further delay this case -- now more than three years old -- by playing "musical lawyers." So if Cohen Williams isn't up to speed and ready to go to trial soon, I can imagine Judge Carney rejecting the substitution.
But then again, if Judge Carney requires Elysium's new counsel to be ready for trial faster than is reasonable, then THAT would prejudice Elysium, too.
So I think calendar is going to be much discussed on Tuesday, and I would not expect ChromaDex to be sitting back on its heels inviting any delay at all.
No matter how you slice it, though, this is not a good outcome for Elysium. I disapprove of what Baker Hostetler has been up to in this litigation -- Judge Carney himself expressed doubts in a recent order -- but nobody will say that the Baker Hostetler attorneys aren't skilled at what they are trying to do. It's hard to imagine a small law firm, new to the case, bringing to bear firepower comparable to what Joe Sacca has orchestrated with this two teams with deep experience of the case spanning three years.
If I had to guess, I would guess that Elysium's new firm will say they have been studying the case for a couple months, that they are up to speed, and ready to go with whatever schedule the Court deems proper. Then I would guess that Judge Carney will approve the substitution and set a new trial calendar.
And then we will be asking ourselves why Baker Hostetler in fact withdrew, and what that means about either Elysium's trial strategy or Elysium's alleged new funding? And we might not find out.
We'll see what happens next.