AMSTED INDUSTRIES v. BUCKEYE STEEL

ZAGEL, United States District Judge

I have before me two motions: Buckeye's Attorneys' Motion to Withdraw and Amsted's Motion to Strike the Declaration of John R. Downes. Buckeye's counsel, Banner Witcoff, have moved to withdraw due to the closing of Buckeye and Buckeye's failure to pay its bill despite Banner Witcoff's attempts to collect the entire balance or make arrangements for a payment schedule. Amsted objects to the motion on the grounds that Buckeye has no substitute counsel and that Banner Witcoff has no legitimate reason for withdrawal. However, Banner Witcoff gave notice to Buckeye in a letter dated October 10, 2002, that Buckeye may need to immediately begin looking for other counsel because Banner Witcoff was considering withdrawal due to Buckeye's unresponsiveness to Banner Witcoff's attempts to collect some form of payment or develop a payment schedule starting as far back as June 5, 2001. It appears that Buckeye has not made any such attempt to find replacement counsel. Thus, the fault for Buckeye's lack of substitute counsel lies with Buckeye, not Banner Witcoff. LR83.51.16(b)(1)(F) of the Northern District of Illinois allows for withdrawal when the client "substantially fails to fulfill an agreement or obligation to the lawyer as to expenses or fees." Buckeye has failed to pay any of its balance owed to Banner Witcoff, and Banner Witcoff has been trying to collect on its bill for more than a year and thus, I find that there is cause for withdrawal. In support of its motion to withdraw, Buckeye has submitted some documents for in camera review, which Amsted also opposes, arguing that (1) it is entitled to know why Banner Witcoff is requesting withdrawal; (2) Banner Witcoff has failed to show that the documentation is actually privileged; and (3) Buckeye voluntarily waived the attorney-client privilege relating to opinions prepared by Banner Witcoff in defense of Amsted's charge of willful infringement. In its motion to withdraw, Banner Witcoff attached a newspaper article announcing Buckeye's closing due to financial troubles, and in its reply, Banner Witcoff make reference to Buckeye's lack of cash flow, which indicates the basis for the motion. With respect to Amsted's argument that Banner Witcoff has failed to show that the in camera documents are actually privileged, if I were to find that these documents were not privileged and that Amsted was entitled to have them, I would order Banner Witcoff to produce them. However, these in camera documents pertain solely to billing issues between Banner Witcoff and Buckeye and have nothing to do with Buckeye's defense to Amsted's willful infringement claim. Banner Witcoff clearly state that these documents will not be relied upon in this case other than for purposes of this motion to withdraw, and after inspecting them, I see no reason to doubt this representation. Therefore, I accept Banner Witcoff's in camera submission and grant their motion to withdraw. Banner Witcoff has taken reasonable steps to protect Buckeye's interests, and since it is possible that Buckeye may file for bankruptcy, which will end this case for the time being, there is a lack of prejudice to Amsted in granting this motion. If Buckeye reopens, then it should be able to hire new counsel, and chances are, if Buckeye is to reopen, it will happen very soon and little time will have been lost. If Buckeye does not reopen, then permanent closure may be inevitable. Until Buckeye reopens, Buckeye ceases to commit any infringing activity, and until Buckeye's future becomes more certain, this case cannot proceed.

Amsted sets forth three arguments in support of its motion to strike. First, Amsted argues that Mr. Downes is not an expert and therefore, his opinion does not contribute to the claim construction issues before this court. However, Buckeye has always agreed that Mr. Downes is not qualified to testify about prior art or claim interpretation. Mr. Downes is Buckeye's Director of Engineering, and Buckeye asserts that his testimony speaks only to factual issues and that his testimony assumes a particular claim construction, not argues in favor of one. Insofar as the declaration speaks to factual issues, namely whether the core prints in question had necks, it should not be stricken. If Mr. Downes makes any legal arguments in his declaration, Amsted may submit those portions of the declaration to the court, and if they are found to be outside the scope of what he is qualified to testify about, those portions will be stricken.

Next, Amsted argues that it has been precluded from discovering information relating to Mr. Downes's opinions in a previous deposition. However, at the time of that deposition, waiver of privilege by Buckeye had not yet occurred and thus, Buckeye was protecting what it believed to be privileged. It was not until the privilege had been waived that this declaration was introduced. Buckeye has indicated that Mr. Downes remains available for deposition, so now that the privilege has been waived, Amsted may conduct another deposition of Mr. Downes and probe more deeply into the basis of his opinions under the conditions I imposed in open court. Discovery was not set to close until December 13, 2002, and now that Buckeye's counsel has been allowed to withdraw from the case, it is apparent that the discovery cutoff date, should this case remain alive, will be postponed until December 31, 2002. Thus, Amsted has more than sufficient time to conduct this deposition.

Finally, Amsted argues that Buckeye failed to identify Mr. Downes's declaration in the Joint Claim Construction and Prehearing Statement. However, in that statement, Buckeye added a paragraph indicating that it did not believe extrinsic evidence is necessary, but if any is to be submitted, a written report and availability of the witness for deposition must be provided prior to any Markman hearing. Buckeye is merely following that directive, and Amsted now has the written report and plenty of time to depose Mr. Downes. Also, the timing of the declaration is understandable, since Buckeye did not know Amsted's position until Amsted filed its Claim Interpretation Brief, which then prompted Buckeye to introduce Mr. Downes's declaration.

Banner Witcoff's motion to withdraw is granted. Amsted's motion to strike is continued until the future of this case becomes clearer. If this case proceeds, then Amsted may submit the objectionable portions of Mr. Downes's declaration to this court, and a determination will be made at that time.