Escolar Documentos
Profissional Documentos
Cultura Documentos
Wickfire, LLC,
Plaintiff,
v.
Defendants.
CIVIL ACTION NO. 14-CV-34
Counter-Plaintiffs,
v.
Counter-Defendants.
TriMax Media, LLC, Laura Woodruff, WREI, Inc., and Josh West (collectively, “TriMax”)
file TriMax’s motion to disqualify Katharine M. Atlas, compel her to return documents designated
as “Attorneys’ Eyes Only,” and compel her to provide sworn testimony as to her and Wickfire’s
compliance (and lack thereof) with the Court’s Protective Order. (Dkt.12).
A. Summary of Motion.
Katharine Atlas appeared in this case as Wickfire’s outside counsel. In that role, she ac-
cepted, reviewed, and maintained documents produced by TriMax as “Attorneys’ Eyes Only,”
typically referred to as “AEO.” Throughout the litigation, TriMax correctly and repeatedly told
Ms. Atlas she was not complying with her AEO obligations. Rather than remedy the misconduct,
Wickfire and Ms. Atlas surprisingly (and repeatedly) asked the Court to remove the AEO desig-
nations (which the Court did not do). The hidden reasoning behind this position seems now to be
that while still in possession of the AEO documents, Ms. Atlas (1) became an in-house employee
of Wickfire and (2) began a personal relationship with her client, Chet Hall, CEO of Wickfire.
TriMax asked Ms. Atlas simply to withdraw as counsel in this matter (without impacting
Wickfire’s other firms still representing it in this case), provide an affidavit as to her handling of
AEO material, and return TriMax’s AEO materials to it. Through WickFire’s outside counsel Ryan
Caughey, Ms. Atlas not only refused, but she suggested the AEO documents either did not “de-
serve” the designation or had somehow lost its protection anyway—raising the specter that
Wickfire and Ms. Atlas’s dissemination of the AEO documents and abuse of the Court’s Protective
Order runs deeper than initially considered. TriMax moves this Court to disqualify Ms. Atlas,
require her to return any AEO documents to which she may still have access, and require her to
provide a sworn affidavit or testimony about her prior dissemination of the AEO documents and
B. Procedural Background.
On March 23, 2017, this Court entered a final judgment in this case. (Dkt 372.) On April
6, 2017, Wickfire filed its “Motion for Attorneys’ Fees and Costs.” (Dkt 375), along with its bill
of costs. (Dkt 374.) On April 21, 2017, TriMax filed its Notice of Appeal. (Dkt 380.) On July 31,
2017, the Court ordered that in light of the pending appeal with the Fifth Circuit, its ruling on the
claims for attorneys’ fees and costs shall be deferred until after mandate issues and the fees motion
or motions have been updated. (Dkt 396). The appeal before the Fifth Circuit is still pending.
TriMax has endeavored to resolve this issue by communicating with opposing counsel within a
short time after learning of these developments and without coming to the Court, but it has been
unable to do so. Because of the remarkable nature of this unethical conduct by Ms. Atlas, her
inexplicable refusal to withdraw and certify compliance with the Protective Order, and the sensi-
tivity of the significant information that was designated Attorneys’ Eyes Only, TriMax files this
motion.
C. Background Facts.
On April 2, 2014, the Court entered a Protective Order. (Dkt 12.) The Protective Order
provides a vehicle for parties to designate certain particularly sensitive information as “RE-
STRICTED – OUTSIDE ATTORNEYS’ EYES ONLY” (“AEO”). (Dkt 12, ¶8). Critically, while
the Protective Order permits disclosure of AEO information to “outside counsel of record,” (Dkt
12, ¶¶9, 5(a)), it prohibits disclosure of AEO information to employees of parties, such as in-house
counsel. (Dkt 12, ¶¶9, 5(c)-(d)). Indeed, AEO stands for “Attorneys’ Eyes Only,” of course, but
that is a slight misnomer. The combined effect of ¶9 and ¶5 of the Protective Order was to specify
“Outside Attorneys’ Eyes Only.” Thus, in-house counsel of a party was put in the same (no-access)
category as all other officers, employees, and representatives other than outside counsel.
On April 1, 2015, Ms. Atlas appeared as outside counsel for Wickfire. (Dkt 100.) TriMax
subsequently produced to Ms. Atlas particularly sensitive documents and designated them AEO.
Categories of such AEO documents included, among other things, (1) data logs that Wickfire,
itself, characterized as information “documenting every penny TriMax paid on a single day for a
single merchant,” (Dkt. 22 at 7),1 (2) emails2 and spreadsheets containing TriMax’s merchant
names and their financial information, (Dkt. 222 at 7), and (3) Ms. Woodruff and Mr. West’s per-
sonal tax returns.3 The merchant-related documents, in particular, represent the lifeblood of Tri-
Max. Disclosure of such AEO documents (or the proprietary information contained therein) to a
competitor such as Wickfire could result in devastating and possibly irreparable losses to TriMax.
Indeed, per the verdict in this case (which Wickfire did not appeal), Wickfire was adjudged to have
intentionally interfered with one or more of TriMax’s contracts. (Dkt 359 at 7.) Utilizing this AEO
information, Wickfire can interfere further and inflict more damage on TriMax.
AEO information. Obviously concerned about the improper dissemination and publication of AEO
information, TriMax repeatedly highlighted Ms. Atlas’s violations. (Ex. B). TriMax also repeat-
edly alerted the Court. (See, e.g., Dkt 223; 248 at 3,10; 256 at 6.).
1
By Wickfire’s own admission, this is the very essence of TriMax’s sensitive financial data. Because the
data is in .csv format, allowing Wickfire to access this AEO information would—as TriMax previously advised the
Court—also allow Wickfire to “programmatically manipulate the data from the .csv format . . . to reverse-engineer
TriMax’s bidding strategies and then fine-tune its Automated Bidding Scheme” and use thousands of data points . . .
to its competitive advantage.” (Dkt. 226 at 4). TriMax produced not as AEO the same emails with the merchant names
redacted.
2
TriMax produced not as AEO the same emails with the merchant names redacted.
3
While the parties agreed to remove the AEO designation on trial exhibits, virtually all of the AEO documents
were not trial exhibits and remain AEO to this day.
merchant data, it provided it to Ms. Atlas through a bit.ly link (a URL shortener). Ms. Atlas com-
plained and asked for the “actual link,” and not a “disguised link.” (Ex. A.) Presumably, her con-
cern was bit.ly links can be tracked. In this case, the link sent only to Ms. Atlas and one other
Wickfire attorney has been accessed 18 times—1 time from Ireland. And, again, this link is to
AEO documents.
Second, as counsel for Wickfire, Ms. Atlas moved the Court to (a) change the terms of the
Protective Order (i.e., granting them retroactive absolution for past violations) and (b) un-desig-
nate TriMax’s AEO productions. (Dkt 222; 229.) On both counts, the Court refused. (Dkt 232.)
Thus, the Protective Order remains fully operative and TriMax’s AEO documents are still pro-
tected by court order and remain AEO—at least in theory. And, as described below, the motivation
behind her request for retroactive absolution and mystifying doubling down has become apparent.
At some point in time (Wickfire and Ms. Atlas have not provided TriMax with this im-
portant information), and while Ms. Atlas still maintained TriMax’s AEO information, Ms. Atlas
changed job positions. She went from being outside counsel for Wickfire to its Chief Strategy
Officer and General Counsel. (Ex. C.) In other words, she became an in-house employee. At the
moment Ms. Atlas changed her job position, she no longer qualified to maintain or have access to
At some point in time, apparently during the litigation before this Court (again, Wickfire
and Ms. Atlas have not provided TriMax with this information), and while Ms. Atlas still main-
tained TriMax’s AEO information, Ms. Atlas began a personal relationship with her client, Chet
Hall. Mr. Hall is the CEO and Co-Founder of Wickfire and is, himself, a third-party defendant.
Indeed, it is apparently common knowledge that Ms. Atlas left her husband to pursue her relation-
ship with Mr. Hall, and Ms. Atlas and Mr. Hall currently reside together. Thus, her AEO violations
TriMax attempted to resolve these serious AEO/ethical issues without the need for Court
intervention. TriMax even retained a legal ethics expert before raising these issues. TriMax sent
several letters and emails to Wickfire asking for Ms. Atlas to withdraw from the lawsuit, return
the AEO documents in her possession, and provide an affidavit. One of these letters was written
by Bill Hodes, a nationally-recognized ethics attorney (who had no involvement in the litigation
beforehand and offered an outsider’s point of view). (Ex. D.) Nevertheless, Ms. Atlas refused to
comply. Instead, Mr. Caughey argues now that the AEO documents were either duplicative of
what had already devolved to the public domain or were insignificant. Neither is even remotely
true (which TriMax detailed in its correspondence to Ms. Atlas) (Ex. D).
1. Legal Standard.
a. Choice of Law.
“When considering motions to disqualify, courts should first look to ‘the local rules prom-
ulgated by the local court itself.’” In re ProEducation Int'l, Inc., 587 F.3d 296, 299 (5th Cir.2009)
(quoting FDIC v. U.S. Fire Ins. Co., 50 F.3d 1304, 1312 (5th Cir.1995)). The Local Rules of the
Western District of Texas, in a section titled “Discipline of Attorneys,” provide “[m]embers of the
bar of this court and any attorney permitted to practice before this court must comply with the
standards of professional conduct set out in the Texas Disciplinary Rules of Professional Conduct
However, as this Court noted on several occasions, the Fifth Circuit has made clear that
the Texas Rules “are not the sole authority governing a motion to disqualify.” One World Foods,
Inc. v. Stubb’s Austin Restaurant Company LC, 2016 WL 6242121, *3 (W.D. Tex. Oct. 25, 2016)
(Sparks, J) (citing ProEducation, 587 F.3d at 299 and quoting In re Am. Airlines, Inc., 972 F.2d
605, 610 (5th Cir.1992)); Pilepro, LLC. v. Steelwall, GMBH, 2015 WL 300636, *3 (W.D. Tex.
Jan. 22, 2015) (Sparks, J.) (same); Nat’l Oilwell Varco, L.P. v. Omron Oilfield & Marine, Inc., 60
F. Supp. 3d 751 (W.D. Tex. 2014) (Sparks, J.) (same); see also In re Dresser Indus., Inc., 972 F.2d
540, 543 (5th Cir.1992) (“The district court clearly erred in holding that its local rules, and thus
the Texas rules, which it adopted, are the ‘sole’ authority governing a motion to disqualify.”).
“[D]isqualification cases are governed by state and national ethical standards adopted by the [Fifth
Circuit].” One World Foods, 2016 WL 6242121, at *3; see also Dresser, 972 F.2d at 543 (explain-
ing “[m]otions to disqualify are substantive motions affecting the rights of the parties and are de-
b. Applicable Standards
“While a motion to disqualify is a substantive motion decided under federal law, a review-
ing court also should ‘consider the motion governed by the ethical rules announced by the national
profession in light of the public interest and the litigants’ rights.’” Pilepro, 2015 WL 300636, at
*3 (quoting ProEducation, 587 F.3d at 299 and Amer. Airlines, 972 F.2d at 610)). In Dresser, the
Fifth Circuit indicated its “precedents have applied the ethical canons contained in the ABA
[American Bar Association] Model Code.” Id. (quoting Amer. Airlines, 972 F.2d at 610 (citing
Dresser, 972 F.2d at 943). Therefore, the Court should consider both the Texas Rules and the
ABA’s Model Rules. One World Foods, 2016 WL 6242121, at *3 (“In deciding a motion to dis-
qualify, the Court considers both the Texas Disciplinary Rules of Professional Conduct (Texas
Rules) and the American Bar Association’s (ABA) Model Rules”); Pilepro, 2015 WL 300636, at
*3 (“the Court considers both the Texas Rules and the ABA’s Model Rules”).
In relevant part, ABA Model Rule 1.16 provides “a lawyer shall not represent a client or,
where representation has commenced, shall withdraw from the representation of a client if: (1) the
representation will result in violation of the rules of professional conduct or other law[.]” Similarly,
Texas Disciplinary Rule 1.15 provides, in relevant part, a lawyer “shall withdraw . . . from the
representation of a client, if (1) the representation will result in a violation of . . . applicable rules
of professional conduct or other law.” Indeed, both Rules enumerate similar circumstances requir-
In relevant part, ABA Model Rule 3.4 (c) provides that a lawyer shall not “knowingly
disobey an obligation under the rules of a tribunal.” Texas Disciplinary Rule 3.04(d) likewise pro-
vides, in relevant part, a lawyer shall not “knowingly disobey, or advise the client to disobey, an
obligation under the standing rules or a ruling by a tribunal[.]” These Rules are virtually identical.
In relevant part, ABA Model Rule 8.4 provides “[i]t is professional misconduct for a lawyer
to “engage in conduct that is prejudicial to the administration of justice.” Texas Disciplinary Rule
8.04 similarly provides, in relevant part, “a lawyer shall not . . . “engage in conduct constituting
In relevant part, ABA Model Rule 1.8(j) provides “[a] lawyer shall not have sexual rela-
tions with a client unless a consensual sexual relationship existed between them when the client-
lawyer relationship commenced.” This Rule is not likely to excuse Ms. Atlas’s relationship with
Mr. Hall as Ms. Atlas was married to Mr. Chad Atlas when her representation of Mr. Hall began.
Texas Disciplinary Rule 1.06(b) and (e) provide “[a] Lawyer shall not represent a person, if
the lawyer’s own interests,” and if a lawyer violates this Rule, “the lawyer shall promptly with-
draw.” Comment 13 to Rule 1.06 provides “[r]elevant factors in determining whether there is a
potential for adverse effect include the duration and intimacy of the lawyer’s relationship with the
client[.]”4
4
Commentators are in accord. See, e.g., William Herrscher, Love for Trade, Texas Bar Journal, Vol. 77, No.
7, 606, 608, July 2014, (https://www.texasbar.com/AM/Template.cfm?Section=Past_Issues&Template=/CM/Con-
tentDisplay.cfm&ContentID=26393) (“if an irreconcilable conflict is created by the sexual relationship, the lawyer
will withdraw from the legal representation”); Jack Marshall, Texas Lawyers and Sex: Not Horny, Just Wise, Ethics
Alarms, March 5, 2011, (https://ethicsalarms.com/2011/03/05/texas-lawyers-and-sex-not-horny-just-wise/) (“Texas
lawyers know . . . that having sex with clients is unethical”).
3. Application.
As of the time Ms. Atlas took a position as Chief Strategy Officer and in-house General
Counsel of Wickfire—by definition—she began violating the Protective Order with respect to
AEO information. (Dkt 12, ¶¶9, 5(c)-(d)). Mr. Caughey has represented that Ms. Atlas no longer
has possession of AEO information, but on her behalf, he has refused our request to provide a
sworn affidavit from her to that effect or to advise when and how she divested herself of it.
In addition to the terms of the Protective Order, the Court should consider the federal com-
mon law of disqualification, which is in turn based on—but not dictated solely by—the rules of
ethics. Model Rule 1.16(a) and Texas Disciplinary Rule 1.15 require withdrawal if the representa-
tion will result in violation of the Rules of Professional Conduct or “other law.” The “other law”
here would be the court-approved Protective Order, itself, while the most clearly applicable Rules
of Professional Conduct would be Model Rule 3.4(c) and Texas Disciplinary Rule 3.04(d).
The former prohibits knowing disobedience of “an obligation under the rules of a tribunal,”
which include the rules regulating the pretrial discovery process, which in turn contemplate the
use of protective orders. Finally, Model Rule 8.4(d) prohibits lawyers from engaging in conduct
“that is prejudicial to the administration of justice,” a term that can sometimes be difficult to define,
but assuredly includes knowing about and continuing the ongoing violation of a protective order.
Cf., United States, ex. Rel. Holmes v. Northrop Grumman Corp, 2015 WL 3504525 (S.D. Miss.
June 3, 2015) (granting motion to disqualify where “the most serious of the ethical violations com-
mitted by Holmes is his having knowingly ignored his obligations under the Stipulated Protective
Order”), aff’d, 642 Fed. Appx. 373 (5th Cir. Mar. 23, 2016), cert denied, 137 S.Ct. 310 (Oct. 11,
2016); see Butler v. Biocore Medical Technologies, Inc., 348 F.3d 1163, 1166 (10th Cir. 2003)
(affirming “order disqualifying Butler for violation of a protective order and reprimanding him for
Model Rule 1.8(j) provides “[a] lawyer shall not have sexual relations with a client unless
a consensual sexual relationship existed between them when the client-lawyer relationship com-
menced.” Comment [19] to Rule 1.8 further explains in the case of an entity representation, a
“constituent” (in the sense of Model Rule 1.13) counts as a “client” for purposes of Rule 1.8(j), if
the constituent is regularly involved in directing the organization’s legal affairs or consulting with
the lawyer about them. This Rule is not directly applicable because—unlike the Rules first men-
tioned above—it is designed to protect clients rather than either the tribunal or opposing parties.
But, the rationale for the Rule includes concern that a too-close relationship can blur the lines of
both privilege and confidentiality. 5 Indeed, it is unrealistic to believe Ms. Atlas has not already
shared or would not eventually share (intentionally or not) TriMax’s AEO information with the
CEO of Wickfire, who is also Ms. Atlas’s paramour, and apparently now, partner.
As stated above, Wickfire claims the AEO documents were either duplicative of what had
already devolved to the public domain or were insignificant. This is wrong. Designated AEO ma-
terial is still covered by the Protective Order unless some affirmative step is taken to change its
status, and any unilateral decision or action of one of the parties is insufficient. The view Wickfire
expressed about the continuing viability of an AEO designation raises the specter Ms. Atlas’s cur-
rent status and preceding conduct is only part of a very serious problem of disregarding material
5
For this reason, concern about married or closely related lawyers representing opposing parties could be
relevant, also by analogy. Comment [11] to Model Rule 1.7, which concerns conflicts of interest generally, points out
the close relationship creates enhanced risk that information that should be kept closely guarded would be leaked.
still covered by the Protective Order. Did Ms. Atlas give Wickfire access to some AEO materials
previously—even before she went in-house for Wickfire and became intimately involved with Mr.
Hall—on the theory some AEO materials did not “deserve” that designation or had somehow lost
its protection? Did Wickfire’s other outside counsel provide such access on the same view?
Wickfire’s comments and the refusal of Ms. Atlas to withdraw and provide a sworn affidavit both
raise the stakes that TriMax’s concerns are not only real but heighten our concern that there were
indeed prior violations of the Protective Order. The very real likelihood that violations of the Pro-
tective Order occurred through the litigation make Ms. Atlas’s sworn affidavit—which she refuses
to give—all the more important. Accordingly, TriMax requests an evidentiary hearing to determine
exactly what dissemination occurred of what AEO documents and at what points in time.
E. Requested Remedies.
Based on the foregoing, TriMax asks the Court to issue an order (1) disqualifying Ms. Atlas
from continuing to serve as outside counsel in this matter, (2) requiring Ms. Atlas to return all
copies of all AEO materials she obtained while serving as outside counsel, in hard copy, ESI, and
any other format in which they exist,6 (3) requiring Ms. Atlas to supervise (and confirm by sworn
testimony, either by declaration or deposition) the return to TriMax of all AEO information that
has come to the attention of any other officer, employee, agent, or representative of Wickfire, with
the exception of its continuing outside counsel, and (4) requiring Ms. Atlas to provide sworn tes-
timony (either by declaration or sworn declaration or deposition) as to when she began working as
a Wickfire employee, when Ms. Atlas divested herself of the AEO materials, and anyone other
than continuing outside counsel to whom she has spoken with about the content of the AEO ma-
terials.
6
This would include any other lawyers or non-lawyer assistants in Wickfire’s Legal Department. This would
also mean if there are other lawyers on Ms. Atlas’s staff, they would be prohibited from entering an appearance in her
place.
Barry M. Golden
Texas State Bar. No. 24002149
OF COUNSEL:
CERTIFICATE OF CONFERENCE
Counsel for TriMax has attempted to resolve this with counsel for WickFire, given
WickFire multiple extensions of time, and conferred by phone for at least 30 minutes today, May
16, 2018. At bottom, we asked for a simple, unopposed withdrawal by Ms. Atlas no later than
today, and an affidavit that incorporated the information previously represented by Mr. Caughey.
WickFire has refused to do either. Accordingly, we file this motion to bring these serious ethical
issues to the court’s attention and to protect TriMax’s rights and information.
Barry M. Golden
CERTIFICATE OF SERVICE
I hereby certify the foregoing document was electronically filed on the CM/ECF system,
which will automatically serve a Notice of Electronic Filing on all parties registered for such ser-
Barry M. Golden