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Marshall Tucker Band, Inc. v. M T Industries, Inc.

United States District Court, D. South Carolina, Spartanburg Division

September 1, 2016





         Plaintiffs the Marshall Tucker Band, Inc. (MTB) and Doug Gray (Gray) (collectively Plaintiffs) filed this case alleging claims for trademark dilution and infringement, breach of contract, conversion, unfair trade practices, and breach of contract accompanied by a fraudulent act. They also seek trademark cancellation and declaratory relief. The Court has jurisdiction over the matter under 28 U.S.C. §§ 1331 and 1367. Pending before the Court is Defendants M T Industries, Inc. (MTI) and Ron Rainey (Rainey) (collectively Defendants)'s motion to disqualify Plaintiffs' counsel, Attorney Michael Wilkes (Wilkes) and Attorney Ellen Cheek (Cheek) (collectively Plaintiffs' counsel). Having carefully considered the motion, the response, the reply, the record, and the applicable law, it is the judgment of the Court that Defendants' motion will be denied.


         This case concerns certain trademarks related to the actual band itself, the Marshall Tucker Band (the Band or the Name). Gray is one of the original five members of the Band, and MTB is a corporate entity related to the Band. ECF No. 31-1 at 2. Wilkes has served as counsel for Plaintiffs continually since 1995. ECF No. 35 at 4. Cheek began practicing with Wilkes in March 2003, serving with him as counsel to Plaintiffs since that time. Id. Wilkes has also performed work for Plaintiffs that relates to MTI, which is a company the original members of the Band formed to own the publishing rights to the first eight albums the Band recorded (the pre-1984 master recordings). Id. Gray is a 20% owner of MTI, and Rainey is the majority owner. Id. R a i n e y s e r v e d as the Band's manager for over twenty-five years. ECF No. 31-1 at 1.

         In or around 1982, Wilkes defended MTI in a contract suit Warner Brothers filed against it involving payment for the final album of a five album contract. ECF No. 35 at 4-5. The case eventually settled. Id. Following that lawsuit, Wilkes represented neither Plaintiffs nor MTI until he began serving as counsel to Plaintiffs in 1995. Id. at 5. Since the inception of Wilkes's representation of Plaintiffs in 1995, MTI has employed a number of attorneys as counsel, including Ron Taft, Ken Anthony, Ken Kraus, Bernard Fischbach, Michael Martin, and Rick Albert. Id. Importantly, Ron Taft drafted the 1984 Letter Agreement, which sets forth ownership in the Name and which both Plaintiffs and Defendants acknowledge constitutes a crucial issue at dispute in the instant action. Id.; ECF No. 31-1 at 3. Plaintiffs' counsel played no part in the drafting or discussion of the 1984 Letter Agreement and had no involvement at all in that transaction. ECF No. 35 at 5.

         Between approximately 1999 and 2010, at Rainey's request, Plaintiffs' counsel engaged in legal work on MTI's behalf. ECF No. 35 at 6. For example, Plaintiffs' counsel asserted a demand in or around 2003 that certain third parties cease violating MTI's copyrights in the pre-1984 master recordings by manufacturing and selling unauthorized recordings of those songs. Id. Plaintiffs' counsel additionally issued stock certificates at the request of MTI's corporate counsel and reviewed MTI's bylaws to determine what basic acts they require the corporation to take. Id. In 2009 and 2010, Rainey asked Plaintiffs' counsel to update MTI's corporate records. Id. at 6-7. Plaintiffs' counsel attest they possess only MTI's bylaws, shareholders' agreement, and some stock certificates. Id. at 7. Because Rainey failed to provide the corporate meeting, history, election, and officer information they requested, Plaintiffs' counsel never undertook to prepare or keep any corporate books for MTI. Id.

         In 2010, Plaintiffs' counsel asked Rainey about the interrelation between and among the various entities having a relationship to the Band. ECF No. 31-1 at 4. Plaintiffs' counsel requested this information from him in relation to estate planning efforts for Gray, which Plaintiffs' counsel were undertaking at that time. ECF No. 35 at 6. In response, Rainey sent Plaintiffs' counsel a “Marshall Tucker Road Map” (Road Map), which sets forth the relationships between MTB, MTI, and Marshall Tucker Entertainment, Inc. (MTE), the three corporate entities related to the Band. Id. Gray and Rainey share ownership of MTE, too. Id. at 7. Plaintiffs have attached the Road Map as an exhibit to the pleadings in this action. ECF No. 1-4.

         Since 2010, Plaintiffs' counsel have actively maintained their attorney-client relationship with Plaintiffs. ECF No. 35 at 7. To the extent their representation of Plaintiffs has included work related to MTI, Plaintiffs' counsel have defined their role as being counsel for Gray, not MTI. Id. For instance, in 2014, Plaintiffs' counsel reviewed and provided comments regarding a proposed RED distribution contract with MTE, and a corresponding license agreement between MTI and MTE. Id. Gray instructed Rainey to send these documents to Plaintiffs' counsel for their review. Id. Plaintiffs' counsel stated to Rainey that their communications with him were made on Gray's behalf. Id.

         On December 6, 2013, MTI filed its applications with the United States Patent and Trademark Office to register the Name. ECF No. 15-1 at 16. Upon learning of this, Plaintiffs and Plaintiffs' counsel called Rainey on January 7, 2015, and demanded that Defendants cancel the trademarks. ECF No. 35 at 8. When the parties failed to resolve their dispute, Plaintiffs filed their Complaint with this Court on February 11, 2016, and their Amended Complaint on April 13, 2016. ECF Nos. 1, 7.

         Defendants then filed their motion to disqualify on July 12, 2016. ECF No. 31. Plaintiffs filed their response in opposition on July 29, 2016, ECF No. 35, to which Defendants filed their reply on August 5, 2016, ECF No. 40. The Court, having been fully briefed on the relevant issues, is now prepared to discuss the merits of the motion.


         The disqualification of counsel is a “drastic” measure that should be free from “overly-mechanical adherence to disciplinary canons at the expense of litigants' rights freely to choose their counsel.” Shaffer v. Farm Fresh, Inc., 966 F.2d 142, 146 (4th Cir. 1992). Moreover, the disqualification of a party's chosen counsel is a serious matter that should be undertaken only upon a showing by the moving party that an “actual or likely” conflict of interest exists, rather than a mere imagined or improbable conflict. See Richmond Hilton Assocs. v. City of Richmond, 690 F.2d 1086, 1089 (4th Cir. 1982).

         A motion to disqualify counsel is subject to the Court's supervisory authority to ensure fairness in all judicial proceedings, Hull v. Celanese Corp., 513 F.2d 568, 571 (2d Cir. 1975), and this Court will apply the South Carolina Rules of Professional Conduct (RPC) to ensure that it does so, Rule IV(B), RDE, Local Civ. Rule 83.I.08 (D.S.C.). Although it is the Court's responsibility to ensure the propriety of the bar, the act of disqualifying a party's counsel is ordinarily not taken without a strong showing. See United States v. Miller, 624 F.2d 1198, 1201 (3d Cir. 1980) (stating that “in deciding a motion to disqualify counsel great care must be taken to respect a client's choice of counsel while at the same time maintaining the highest ethical standards of professional responsibility”). Thus, the ...

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