## Facts

- The U.S. Department of Justice investigated alleged price-fixing in the market for dynamic random-access memory (DRAM) semiconductor chips.
- Attorney John Vandevelde represented Günter Hefner, Infineon Technologies AG’s vice president of sales, in the DOJ DRAM investigation.
- In connection with that investigation, Vandevelde, Hefner, Infineon, and Infineon’s counsel entered into a written joint defense agreement (JDA) governing the exchange of confidential information for the common defense and containing conflict-waiver language aimed at avoiding conflict objections among participants during the joint defense effort.
- All American Semiconductor, Inc., a purchaser of DRAM, later brought a civil antitrust action alleging DRAM manufacturers engaged in a price-fixing conspiracy that caused purchasers to pay inflated prices.
- All American retained Vandevelde (by then associated with Crowell & Moring LLP) as counsel in the civil DRAM litigation and conceded the civil suit was substantially related to the DOJ DRAM investigation in which Vandevelde represented Hefner.
- Infineon moved to disqualify Vandevelde and Crowell & Moring from representing All American (and other opt-out plaintiffs) against Infineon, arguing Vandevelde had received Infineon confidential information through the joint defense arrangement and could not later act directly adverse to Infineon in a related matter.
- Plaintiffs opposed disqualification, arguing Infineon had waived conflict objections through the JDA and that any concerns could be addressed through confidentiality obligations and an internal ethics wall implemented at Crowell & Moring.

## Issues

1. Whether a joint defense agreement’s conflict-waiver language barred Infineon from seeking disqualification when the attorney later appeared adverse to Infineon in substantially related civil litigation.
2. Whether Vandevelde’s participation in the joint defense arrangement and access to Infineon confidential information created a disqualifying conflict when he later represented civil plaintiffs suing Infineon over the same general DRAM conduct.
3. Whether an ethics wall implemented within Crowell & Moring was sufficient to avoid firm-wide disqualification.

## Decision

- The court granted Infineon’s motion to disqualify.
- The court disqualified John Vandevelde and Crowell & Moring from representing All American (and other opt-out plaintiffs identified in the order) against Infineon in the DRAM litigation.
- The court rejected the argument that the JDA’s waiver language eliminated Infineon’s ability to seek disqualification for later, direct adversity in a substantially related matter.
- The court found the belated ethics wall did not cure the conflict under the circumstances and did not prevent firm-wide disqualification.

## Legal Principles

- Participation in a joint defense agreement can create confidentiality duties to other joint defense participants; for conflict purposes, those duties may be treated similarly to duties owed to a current or former client when the lawyer later undertakes representation directly adverse to the participant in a related matter.
- When the current representation is substantially related to the prior matter in which the lawyer received protected information, courts may presume the lawyer obtained confidential information material to the later dispute, supporting disqualification.
- Conflict waivers in joint defense agreements are construed in light of their purpose and context; general waiver language directed at facilitating the joint defense does not necessarily authorize later side-switching into direct adversity on the same subject matter.
- Screening measures implemented after a conflict is identified are commonly viewed as inadequate to remove the risk that confidential information has been shared, and may not prevent disqualification of the conflicted lawyer’s entire firm.
- Disqualification is an equitable remedy aimed at protecting confidentiality and the fairness of the process; courts weigh client choice and case disruption against the need to prevent misuse (or apparent misuse) of confidential information.

## Conclusion

In All American Semiconductor, Inc. v. Hynix Semiconductor, Inc., the court granted Infineon’s motion to disqualify, holding that counsel who had represented an Infineon executive in the DOJ’s DRAM investigation and participated in a joint defense arrangement could not later represent civil plaintiffs suing Infineon in a substantially related DRAM price-fixing case; the JDA’s waiver language did not extend to that later direct adversity, and a late ethics wall did not avoid firm-wide disqualification.


All American Semiconductor, Inc. v. Hynix Semiconductor, Inc., 2008 WL 5484552 (2008)