## Facts

- GSI Commerce Solutions, Inc. retained Blank Rome LLP to sue BabyCenter, L.L.C. in the Southern District of New York over a dispute arising from an e-commerce services agreement.
- BabyCenter was a wholly owned subsidiary of Johnson & Johnson, Inc. (J&J) and relied on J&J for core support functions, including significant legal support from J&J’s in-house legal department.
- J&J’s legal department drafted the e-commerce services agreement at issue and was involved in the ensuing dispute.
- Blank Rome had an ongoing attorney-client relationship with J&J beginning with a 2004 engagement involving privacy and data-protection compliance efforts that contemplated work for J&J and its affiliates.
- In practice, Blank Rome provided privacy-related materials and guidance used across J&J affiliates and had also represented BabyCenter in a 2006 privacy matter.
- Blank Rome had not advised on the specific e-commerce agreement in dispute and had not received confidential information tied to that agreement.
- BabyCenter moved to disqualify Blank Rome, arguing that Blank Rome’s active representation of J&J made its adverse representation against BabyCenter an impermissible concurrent conflict without informed consent.
- The district court granted disqualification, and GSI appealed.

## Issues

1. Whether a law firm’s ongoing representation of a parent corporation can require disqualification when the firm represents a party adverse to the parent’s wholly owned subsidiary in separate litigation.
2. Whether the closeness and operational integration between parent and subsidiary can justify treating them as the same client for concurrent-conflict purposes.
3. Whether engagement-letter language limiting representation to the named corporate client prevents disqualification when the firm’s actual work extends to affiliates.
4. Whether disqualification for a concurrent conflict requires a showing of related subject matter or relevant confidential information.

## Decision

- The Second Circuit affirmed the district court’s order disqualifying Blank Rome from representing GSI against BabyCenter.
- The court held that J&J and BabyCenter were so closely related that they were effectively a single client for disqualification analysis.
- Because Blank Rome’s representation of J&J was ongoing, Blank Rome’s adverse representation against BabyCenter constituted impermissible concurrent representation absent informed consent.
- The conflict was not cured by limited waivers in J&J’s engagement materials that focused on specified patent matters involving another client.
- The court rejected the argument that disqualification was improper because the disputed litigation was unrelated to the firm’s privacy work and involved no relevant confidential information.

## Legal Principles

- A firm generally may not represent a client in a matter directly adverse to another current client without that client’s informed consent, even if the matters are unrelated.
- For concurrent-conflict analysis, a parent and subsidiary may be treated as the same client when their relationship is sufficiently close and integrated, including shared legal functions and substantial operational dependence.
- Engagement-letter disclaimers limiting representation to the named entity are relevant but not controlling when the substance of the relationship and course of dealing shows representation extending to affiliates.
- In concurrent-representation conflicts, disqualification does not depend on proving receipt or risk of misuse of confidential information, and it does not require a “substantial relationship” between the matters.

## Conclusion

The Second Circuit upheld disqualification because Blank Rome’s active representation of J&J, combined with BabyCenter’s close integration with J&J, made Blank Rome’s adverse litigation against BabyCenter an unconsented concurrent conflict, notwithstanding the absence of related subject matter or relevant confidences.


GSI Commerce Solutions, Inc. v. BabyCenter, L.L.C., 618 F.3d 204 (2d Cir. 2010)