By Allissa Wickham, Law360
Law360, New York (September 22, 2014, 3:42 PM ET) — Concierge medicine provider Signature MD Inc. urged a California federal court on Friday not to disqualify Duane Morris LLP from representing it in its antitrust suit against MDVIP Inc., claiming the firm’s representation of MDVIP in a separate trade secrets dispute shouldn’t bar it from the current case.
Signature, a California-based provider of “concierge” medicine that gives patients greater access and personalized care from their doctors, argued that MDVIP’s bid to disqualify Duane Morris should be nixed because the firm represented MDVIP in an unrelated suit that didn’t involve antitrust claims.
“The previous matter was wholly unrelated to this case,” Signature argued. “It was also short-lived, and Duane Morris has not represented MDVIP for several years. The Duane Morris lawyers who worked on the prior case for MDVIP do not possess any confidential information relevant to this case.”
In the current suit, launched in July, Signature has accused Florida-based MDVIP of systematically tying up markets for concierge medicine membership programs by entering “lengthy and unduly restrictive” exclusive dealing agreements with physicians that are meant to squeeze out the competition in violation of the Sherman Act.
According to the complaint, Florida-based MDVIP, which currently operates the largest concierge medicine program in the U.S, was one of the first companies to provide turnkey concierge medicine membership program to physicians who wanted to transition their existing practices to concierge medical practices.
The company already has a more than 70 percent market share of the U.S. concierge medicine membership program market, but the exclusive deals it cuts with doctors are blocking competitors like Signature from penetrating certain local markets such as Atlanta, Baltimore, Boston, Cincinnati, Houston, Las Vegas and others where MDVIP dominates, the suit claims.
MDVIP filed a motion to disqualify Duane Morris from representing Signature in the suit in August, claiming its Philadelphia partners Beatrice O’Donnell, Lisa Clark and Jane Leslie Dalton learned confidential information about the company, including its marketing and litigation strategies, while representing MDVIP in a trade secrets suit brought in 2010 by Pennsylvania-based nonprofit Lehigh Valley Physician Group.
In its suit, which the parties agreed to drop in 2012, LVPG alleged that MDVIP had improperly obtained a report containing information about 2,267 of its patients, including phone numbers and insurance type. The report had allegedly been provided to MDVIP by one of LVPG’s doctors at the time, Dr. Mark Kender, according to LVPG’s complaint in Pennsylvania federal court.
LVPG only alleged claims for misappropriation of trade secrets and tortious interference with contracts, and argued that MDVIP had run afoul of the Health Insurance Portability and Accountability Act’s privacy rule. The complaint didn’t allege that MDVIP had violated federal antitrust law.
Still, in its response to the court’s 2012 order to show cause by why the case shouldn’t be dismissed, LVPG said MDVIP had obtained the list to “facilitate the opening” of a concierge medicine practice that would enable it to compete with LVPG for health care services delivery.
Duane Morris attorneys O’Donnell and Clark represented MDVIP in the Pennsylvania action with LVPG, but Dalton’s name doesn’t appear in the case’s attorney information listing. In its August motion, MDVIP argued that given the firm’s prior relationship with MDVIP, Duane Morris’s representation of Signature would violate California’s professional conduct rules.
According to MDVIP, over the course of the two years in which Duane Morris represented the company in the LVPG suit, its lawyers spent significant phone time and exchanged “scores” of emails with MDVIP’s in-house counsel and top brass about its doctor recruitment strategies. And although the LVPG case was not an antitrust suit, its “core issues” regarding doctor recruitment and patient evaluation were the same as those raised by Signature’s complaint, MDVIP said.
But Signature fired back Friday, saying MDVIP simply couldn’t prove that the prior case had a substantial relationship to the present antitrust action. Signature also argued that out of an “abundance of caution” the lawyers who worked on the older MDVIP case have had no involvement in the present suit.
“There is no risk that MDVIP’s confidences will be compromised because this case is wholly unrelated to Lehigh Valley,” Signature claimed. “The ethical screen imposed by Duane Morris provides further assurance that MDVIP’s confidential information is protected. Thus, Duane Morris’s disqualification is unnecessary to protect MDVIP’s interests.”
Attorneys for MDVIP and Signature did not respond Monday to a request for comment.
Signature MD is represented by Wayne A. Mack, C. Mitchell Goldman, Cyndie M. Chang and Audra L. Thompson of Duane Morris LLP.
MDVIP is represented by Jerome W. Hoffman, Michael R Manthei and Richard Thomas Williams of Holland and Knight LLP.
The case is Signature MD Inc. v. MDVIP Inc., case number 2:14-cv-05453, in the U.S. District Court for the Central District of California.
–Additional reporting by Linda Chiem. Editing by Richard McVay.