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Fabick, Inc. v. FABCO Equipment, Inc.

United States District Court, W.D. Wisconsin

September 30, 2016

FABICK, INC., Plaintiff,
v.
FABCO EQUIPMENT, INC. and JFTCO, INC., Defendants.

          OPINION AND ORDER

          WILLIAM M. CONLEY District Judge

         In this civil action, plaintiff Fabick, Inc. alleges that defendants FABCO Equipment, Inc. and JFTCO, Inc., infringe plaintiff's “FABICK” trademark in violation of the Lanham Act, 15 U.S.C. § 1114, and state common law, along with asserting other related Lanham Act claims. Before the court is plaintiff's motion to disqualify defendant JFTCO's counsel, Senniger Powers LLP. (Dkt. #27.)[1] The crux of the motion turns on whether Senniger's previous representation of one of Fabick's affiliates creates a conflict of interest. For the reasons that follow, the court will deny that motion. Although finding that Fabick is not a client of Senniger, and therefore that no such conflict exists, the court will order in an abundance of caution that the attorney involved in Senniger's work with Fabick's affiliate have no further involvement in this lawsuit and further order that Senniger construct an ethical wall between that attorney and Senniger's remaining work on this lawsuit.[2]

         BACKGROUND

         A. Relationship between WFI-Global and Fabick

         Plaintiff Fabick, Inc., is a family-owned company with eight employees, five of whom are members of the Fabick family. Fabick is in the business of selling and applying coatings and sealants for a number of commercial, industrial, construction and agricultural uses. These products are used in the application of coatings on trucks, heavy machinery and rock or stone surfaces, and as sealants for traffic and weather sensors and concrete joints.

         WFI Global, LLC (“WFI”) is one of Fabick's affiliates, with Fabick holding a 60% ownership interest in WFI. WFI is also in the business of selling certain specialty coatings and foam products. WFI conducts all of its manufacturing and other business operations from the same location as Fabick. WFI's registered agent is Steven Fabick, a Fabick employee, and its registered office and principal place of business are at Fabick's facilities in Madison, Wisconsin. Steven Fabick is charged with conducting the daily operational and administrative duties of both WFI and Fabick. WFI has only one employee, Terry Walker, whose office is located in Fabick's work space. Fabick also Although the bulk of the work (which ultimately was not substantial and involved intellectual property and business issues outside my area of expertise) was performed by two other lawyers under my very general supervision. I also provided some brief guidance on a franchising issue along with a colleague. In those two capacities, I met and spoke with Steven Fabick on a number of occasions. This work arose out of my long-term representation of Cummins, Inc., on distribution and antitrust issues, during which I worked closely with, but did not represent, Caterpillar and its distributor in the Upper Midwest, FABCO Equipment, Inc., on various legislative initiatives. My principal, and almost exclusive, contact with FABCO on this work was James Fabick, who I understand before I left Foley was no longer affiliated with either FABICK or FABCO. Given that my contacts with both companies are not only quite old and limited and that the dispute here appears to have no bearing on any matter for which I was involved with either company, I cannot foresee any conflict, whether actual, perceivable or even arguable, in my continuing to consider the merits of this lawsuit. Having said that, should any party wish to move for my recusal, I would be happy to reconsider. manages (1) all of WFI's accounts payable and receivable, (2) conducts all necessary administrative tasks relative to WFI's single employee, including payroll, and (3) has majority voting control and day-to-day operational control over WFI.

         Fabick's general counsel, Elizabeth Fabick, provides legal advice to both Fabick and its affiliates. Elizabeth Fabick was employed as an associate attorney in the litigation practice group at Senniger Powers, LLC, from October 2011 until July 2015, joining Fabick in August 2015.

         B. Senniger Representation of WFI In April 2013, WFI engaged Attorney Paul Fleischut at Senniger Powers LLP, the law firm representing defendants in the present action, in connection with registration of two trademarks, WFI GLOBAL and U-CORE. The registrations were issued in July 2014. As part of obtaining the marks, Fleischut sent WFI a letter indicating that it would monitor deadlines, as well as remind WFI of its obligations to file Affidavits of Use between July 15, 2019, and July 15, 2020. Fleischut remains attorney of record with the United States Patent and Trademark Office with regard to these two marks.

         Senniger's formal April 2013 engagement letter to Terry Walker expressly states that the representation was exclusively of WFI:

Our representation here is exclusively of WFI-Global, LLC, and we are not thereby representing any other entities or persons, such as individual inventors, employees, or owners. So, for example when we present documents to individuals for signing, we are doing so on behalf of the company. Such individuals should seek counsel if they have any concerns as individuals.

(Fleischut Decl., Ex. 1 (dkt. #37-1).) This engagement letter was signed by Elizabeth Fabick, as an attorney with Senniger at that time.[3]

         OPINION

         In considering a motion for disqualification, this court looks to the Wisconsin Supreme Court Rules of Professional Conduct for Attorneys. Diettrich v. Nw. Airlines, Inc., 168 F.2d 961, 964 (7th Cir. 1999). In turn, the Wisconsin Supreme Court Rules are based on the American Bar Association's Model Rules. See Wis. Supreme Ct. Order No. 04-07 (Jan. 5, 2007), https://www.wicourts.gov/sc/rulhear/DisplayDocument.pdf? content=pdf&seqNo=27737; see also E2Interactive, Inc. v. Blackhawk Network, Inc., No. 09-cv-629-SLC, 2010 WL 1981640, at *4 (W.D. Wis. May 17, 2010) (describing state and federal ethical rules as “essentially identical”).

         There are two specific rules potentially at play here. The first rule, Wisconsin Supreme Court Rule 20:1.7 (or ABA Rule 1.7), concerns conflicts of interest with current clients. The second rule, Wisconsin Supreme Court Rule 20:1.9 (or ABA Rule 1.9), governs duties to former clients. Defendants implicitly argue that WFI is a former client of Senniger, in light of defendants' representation that any lingering trademark work concerning the 2014 WFI trademarks are “purely administrative.” (Def.'s Opp'n (dkt. #36) 2.) While the court acknowledges that ongoing work may be minimal, Attorney Fleischut still is listed as the attorney of record on these trademarks, and has undertaken certain ongoing responsibilities in terms of maintaining those marks, which is a limited though still important task. As particularly importantly, given this evidence of an ...


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