Coca-Cola sues 'defector' firm in trade secrets feud
Beverages multinational insists that law firm has behaved unethically | $100m suit involves trade secrets related to cooling technology.
Coca-Cola has taken action against law firm Paul Hastings, arguing that its counsel should not be allowed to represent an opponent in a trade secrets case due to a conflict of interest.
The beverage giant filed the motion to dismiss the firm from the $100 million lawsuit on Wednesday, April 13 at the US District Court for the District of Florida.
Inflammatory accusations
Beverage cooling company, SuperCooler Technologies, is suing Coca-Cola over an alleged breach of contract in a dispute over a trade secret that allows the rapid chilling of beverages and increases the longevity of cold-stored items.
The 47-page, nine-count complaint against the multinational—filed on February 1—alleges, inter alia, breach of contract, trade secret misappropriation, and various related causes of action.
Coca-Cola has countered that the complaint is replete “with inflammatory and baseless accusations about Coca-Cola’s alleged dishonesty and unethical business practices”.
In its latest motion, the company contends that Paul Hastings effectively “fired” Coca-Cola to take on a more lucrative lawsuit by SuperCooler.
It insisted that the firm now has a conflict of interest, because “it maintains open and active matters” with Coca-Cola, matters that would be “revealed in any conflict search”.
Sensitive matters
Such conflicts include “sensitive matters with respect to international human rights concerns”, said Coca-Cola.
According to the motion, Paul Hastings intentionally concealed this conflict, then when asked by Coca-Cola to withdraw as counsel for SuperCooler to remedy the conflict, “the firm flatly refused”.
Coca-Cola noted that: “Paul Hastings abandoned its ethical obligations in managing this situation. It made no attempt to notify Coca-Cola of the conflict. It made no attempt to request a waiver prior to Coca-Cola discovering this conflict.
“Instead, once its conduct was discovered, Paul Hastings’ response—a response endorsed by its general counsel, Mark Pollack—was to instruct its Coca-Cola relationship partner to close out all matters if Coca-Cola would not grant a waiver of conflicts in this case.”
Paul Hastings attorneys Brad Bondi, Michael Wheatley, and Vitaliy Kats violated Rule 4-1.7 of the Florida Rules Of Professional Conduct when they chose to represent SuperCooler against Coca-Cola, insisted the motion.
Vehement disagreement
Coca-Cola claimed that Paul Hastings, upon allegedly discovering its error, responded by “pointing to an advance waiver provision that was included in an engagement letter for a specific and unrelated matter”.
Coca-Cola said that it “vehemently disagrees” with this argument, and accused the firm by attempting to skirt its ethical obligations and justify its representation of a new client in a highly contentious suit against Coca-Cola.
The firm was doing this, it added, while “purporting to zealously defend Coca-Cola’s interests in other existing matters”.
In response to these allegations, Paul Hastings told WIPR: “Paul Hastings is proceeding in a manner fully consistent with the terms of our engagement with Coca-Cola as well as our professional obligations to the client. There is nothing unusual or inappropriate in asking sophisticated clients to waive potential conflicts of interest as was done here and Paul Hastings will continue to rely on the waiver to which Coke previously agreed.”
WIPR has approached Coca-Cola for comment.
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