USA v. JAMES V. MAZZO, DOUGLAS V. DECINCES, DAVID L. PARKER, AND F. SCOTT JACKSON

7/23/2019 USA v. JAMES V. MAZZO, DOUGLAS V. DECINCES, DAVID L. PARKER, AND F. SCOTT JACKSON

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RICHARD MARMARO Bar No. 091387)[email protected] M. SLOAN (pro hac vice pending)[email protected], ARPS, SLATE, MEAGHER & FLOM LLP300 South Grand Avenue

Los Angeles, California 90071-3144Telephone: (213) 687-5000Facsimile: (213) 687-5600

Attorneys for Defendant James V. Mazzo

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

JAMES V. MAZZO, DOUGLAS V.DECINCES, DAVID L. PARKER,AND F. SCOTT JACKSON,

Defendants.

CASE NO.: 8:12-cr-00269(B)-AG

(1) DEFENDANT JAMES V.MAZZOS OPPOSITION TO THEGOVERNMENTSSUPPLEMENTAL BRIEF INSUPPORT OF GOVERNMENTSMOTION TO REVISIT JUDICIALINQUIRY INTO CONFLICTS OFINTEREST AFFECTING

DEFENDANT JAMES V. MAZZO;(2) DECLARATION OF JAMES V.MAZZO;

(3) DECLARATION OF DEBRAWONG YANG;

(4) DECLARATION OF BRIAN J.MCCARTHY;

(5) DECLARATION OF RICHARDMARMARO;

(6) DECLARATION OF GEOFFREYC. HAZARD, JR.; and

(7) DECLARATION OF CLIFFORDM. SLOAN.

Hon. Andrew J. Guilford

Date: July 13, 2015Time: 2:00 p.m.Courtroom: 10DTrial Date: TBD

Case 8:12-cr-00269-AG Document 435 Filed 06/29/15 Page 1 of 57 Page ID #:9630


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TABLE OF CONTENTS

1. INTRODUCTION...........................................................................................1

2. FACTUAL AND PROCEDURAL BACKGROUND....................................4

2.1 The Mistakes at Issue............................................................................5

2.2 Actions Taken To Correct The Record .................................................6

2.3 Skaddens Representation Of Mr. Mazzo Commenced BetweenFebruary 10 and February 20, 2009, While The Firm RepresentedAMO For Related Matters. ...................................................................9

2.4 Corrections To The Governments Statement Of Facts......................11

2.4.1 The Mistakes at Issue................................................................11

2.4.2 Attribution of Mr. Waxmans Mistakes to Mr. Marmaro ........12

2.4.3 Peter Morrisons Testimony .....................................................12

2.4.4 Diane Biagiantis Declaration...................................................14

2.4.5 Mr. Mazzos May 12, 2011 Declaration And Waiver..............14

2.4.6 This Courts August 10, 2011 Order ........................................15

2.5 Skadden Remains Mr. Mazzos Counsel Of Choice ..........................16

3. ARGUMENT.................................................................................................17

3.1 THERE IS NO CONFLICT OF INTEREST JUSTIFYINGDISQUALIFICATION OF MR. MAZZOS COUNSEL OFCHOICE..............................................................................................20

3.1.1 There Is No Disqualifying Conflict of Interest Arising Outof Skaddens Prior Representation of AMO.............................21

3.1.1.1 Skaddens Concurrent Representation of Mr.Mazzo and AMO Does Not Give Rise to aDisqualifying Conflict of Interest...................................21

3.1.1.2 Skaddens Successive Representation of Mr. Mazzo

and AMO Does Not Give Rise to a DisqualifyingConflict of Interest..........................................................23

(a) AMO Could Not Reasonably Have BelievedThat Mr. Mazzo Would Receive ConfidentialInformation From Skadden. .................................24

(b) AMO Has Consented to SkaddensRepresentation of Mr. Mazzo...............................28



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3.1.1.3 The Government Has Not Shown that SkaddensPrior Representation of AMO Will Affect Its Cross-Examination of Witnesses at Mr. Mazzos Trial andCreate a Disqualifying Conflict of Interest. ...................31

3.1.2 There Is No Disqualifying Conflict of Interest Between

Skadden and Mr. Mazzo. ..........................................................343.2 MR. MAZZO HAS WAIVED ANY CONFLICT OF INTEREST. ..38

3.3 THE GOVERNMENTS SUPPOSED CONCERNS ABOUTTHE INTEGRITY OF THE JUDICIAL PROCESS DO NOTSUPPORT DISQUALIFICATION.....................................................43

4. CONCLUSION .............................................................................................50



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iii

TABLE OF AUTHORITIES

Cases

Allegaert v. Perot,565 F.2d 246 (2d Cir. 1987) .............................................................................26

Baker Manock & Jensen v. Superior Court,175 Cal. App. 4th 1414 (2009).........................................................................20

Bird v. PSC Holdings I, LLC,Civil No. 12-CV-1528W(NLS), 2014 WL 1389327 (S.D. Ca. Apr. 8,2014).................................................................................................................35

Boston Scientific Corp. v. Johnson & Johnson Inc.,647 F. Supp. 2d 369 (D. Del. 2009) .................................................................22

California Service Employees Health & Welfare Trust Fund v. AdvanceBuilding Maintenance,

No. C-06-3078 CW, 2009 WL 593785 (N.D. Cal. Mar. 4, 2009) .............26, 27

Certain Underwriters at Lloyd's London v. Argonaut Ins. Co.,264 F. Supp. 2d 914 (N. D. Cal. 2003) ...........................................................23

Christensen v. U.S. District Court for Central District California,844 F.2d 694 (9th Cir. 1988)..........................................................25, 26, 27, 28

City & County of San Francisco v. Cobra Solutions, Inc.,38 Cal. 4th 839 (2006)..........................................................................21, 24, 25

Cohen v. Acorn International, Ltd.,921 F. Supp. 1062 (S.D.N.Y. 1995).................................................................27

In re County of Los Angeles,223 F.3d 990 (9th Cir. 2000)............................................................................20

CQS ABS Master Fund Ltd. v. MBIA Inc.,No. 12 Civ. 6840(RJS), 2013 WL 3270322 (S.D.N.Y. June 24, 2013)........... 23

Crenshaw v. MONY Life Insurance Co.,318 F. Supp. 2d 1015 (S.D. Cal. 2004) ............................................................49

Export Development Corp. v. Uniforms for Industry, Inc.,No. 88-CV-2496 (ARR), 1991 WL 10929 (E.D.N.Y. Jan. 25, 1991) .......23, 30

Flatt v. Superior Court,9 Cal. 4th 275 (1994)..................................................................................24, 30

Forrest v. Baeza,58 Cal. App. 4th 65 (1997)...............................................................................26

Gilbert v. National Corp. for Housing Partnerships,71 Cal. App. 4th 1240 (1999)...........................................................................22

Great Lakes Construction, Inc. v. Burman,186 Cal. App. 4th 1347 (2010)...................................................................21, 22



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iv

Gurniak v. Emilsen,995 F. Supp. 2d 262 (S.D.N.Y. 2014)..............................................................27

Hetos Investments, Ltd. v. Kurtin,110 Cal. App. 4th 36 (2003).............................................................................49

Lockhart v. Terhune,250 F.3d 1223 (9th Cir. 2001)..........................................................................39

MacArthur v. San Juan County,NO. 2:00CV584K, 2001 WL 1806855 6 (D. Utah Mar. 6, 2001) .................22

In re Marvel,251 B.R. 869 (Bankr. N.D. Cal. 2000).............................................................17

Neiman v. Local 144, Hotel, Hospital, Nursing Home & Allied Health ServicesUnion, AFL-CIO,512 F. Supp. 187 (E.D.N.Y. 1981)...................................................................27

Optyl Eyewear Fashion International Corp. v. Style Companies,Ltd.,760 F.2d 1045 (9th Cir. 1985)..........................................................................17

Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v.LaBranche & Co.,229 F.R.D. 395 (S.D.N.Y. 2004)................................................................22, 23

Robert Bosch Healthcare Systems, Inc. v. Cardiocom,No. C-14-1575 EMC, 2014 2703807 (N.D. Cal. June 13, 2014) ....................18

Shaffer v. Farm Fresh, Inc.,966 F.2d 142 (4th Cir. 1992)............................................................................38

Shire Laboratories Inc. v. Nostrum Pharmaceuticals., Inc.,Civil Action No. 03-4436 (MLC), 2006 WL 2129482 (D.N.J. July 26,2006).................................................................................................................22

Simonca v. Mukasey,No. CIVS081453FCDGGH, 2008 WL 5113757(E.D. Cal. Nov. 25, 2008).................................................................................17

State Farm Mutual Automobile Insurance Co. v. Federal Insurance Co.,72 Cal. App. 4th 1422 (1999)...........................................................................22

In re Syntex Corp. Securities Litigation,

855 F. Supp. 1086 (N.D. Cal. 1994).................................................................26Trone v. Smith,

621 F.2d 994 (9th Cir. 1980)............................................................................28

Trust Corp. of Montana v. Piper Aircraft Corp.,701 F.2d 85 (9th Cir. 1983)..................................................................28, 29, 30

United States v. Bolivar,No. CR 12-0128 JB, 2012 WL 3150430 (D.N.M. July 20, 2012) .............31, 32

United States v. Collins,920 F.2d 619 (10th Cir. 1990)........................................................46, 47, 48, 49



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United States v. Curcio,680 F.2d 881 (2d Cir. 1982) .............................................................................39

United States v. Dhaliwal,468 F. App'x. 666 (9th Cir. 2012) ..............................................................40, 42

United States v. Elliot,463 F.3d 858 (9th Cir. 2006)......................................................................36, 37

United States v. Fulton,5 F.3d 605 (2d Cir. 1993) .................................................................................40

United States v. Gehl,852 F. Supp. 1135 (N.D.N.Y. 1994) ..........................................................32, 33

United States v. Gonzalez-Lopez,548 U.S. 140 (20060.............................................................................18, 36, 49

United States v. Huynh,

No. 08cr2288 BTM-1, 2009 WL 799406 (S.D. Cal. Mar. 24, 2009) ........ 32, 33

United States v. Iorizzo,786 F.2d 52 (2d Cir. 1986) ...............................................................................39

United States v. Martinez,143 F.3d 1266 (9th Cir. 1998)........................................................38, 39, 40, 43

United States v. Murray,No. CR-12-0278 EMC, 2013 WL 942514 (N.D. Cal. Mar. 11, 2013) ............42

United States v. Penn,151 F. Supp. 2d 1322 (D. Utah 2001) ........................................................31, 32

United States v. Perez,325 F.3d 115 (2d Cir. 2003) ...........................................................37, 40, 41, 42

United States v. Ruehle,583 F.3d 600 (9th Cir. 2009)............................................................................35

United States v. Salyer,No. CR. S-10-061 LKK, 2011 WL 3665017 (E.D. Cal. Aug. 19, 2011).........19

United States v. Scarpacci,731 F. Supp. 2d 341 (S.D.N.Y. 2010)..............................................................40

United States v. Schwarz,283 F.3d 76 (2d Cir. 2002) ...............................................................................41

United States v. Stites,56 F.3d 1020 (9th Cir. 1995)..........................................................45, 46, 47, 48

United States v. Turner,594 F.3d 946 (7th Cir. 2010)............................................................................18

United States v. Walton,703 F. Supp. 75 (S.D. Fla. 1988)..........................................................46, 47, 49



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vi

United States v. Washington,797 F.2d 1461 (9th Cir. 1986)..............................................................18, 44, 49

United States v. VanHoesen,No. 06-CR-411 (LEK/DRH),2007 WL 2089692 (N.D.N.Y. July 19, 2007 .......................................33, 40, 42

Western Sugar Cooperative v. Archer-Daniels-Midland Co.,No. CV 11-3473 CBM (MANx),2015 WL 690306 (C.D. Cal. Feb. 13, 2015)....................................................23

Wal-Mart Stores, Inc. v. Vidalakis,No.,07-0039, 2007 WL 4468688 (W.D. Ark. Dec. 17, 2007) ........................ 33

Wheat v. United States,486 U.S. 153 (1988) .........................................................................................43

White v. Experian Information Solutions,993 F. Supp. 2d 1154 (C.D. Cal. 2014)......................................................17, 18

Wild Game NG, LLC v. Wong's International (USA) Corp.,No. 3:05-CV-635-LRH (RAM),2006 WL 3434379(D. Nev. Nov. 29, 2006).....................................................29

Yee v. Ventus Capital Services,No. C, 05-03097(RS),2006 WL 3050827 (N.D. Cal. Oct. 26, 2006)............................................18, 33



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1

1. INTRODUCTION

The governments motion to disqualify is based on mistakes made by an ex

Skadden partner regarding the existence of exculpatory notes from an interview of a

key witness; notes from a privileged conversation with the defendant; and mistakenconclusions as to whether Skadden, Arps, Slate, Meagher & Flom LLP (Skadden)

represented only defendant Mazzo, or both Mr. Mazzo and Advanced Medical

Optics (AMO) concurrently in 2009. There is no dispute that (1) Mr. Mazzo has

always believed that Skadden represented him at all relevant times; (2) AMO knew

at least as of July 2009 that Skadden was representing Mr. Mazzo in this matter;

(3) Mr. Mazzo waives any conflicts and has reiterated, after consulting with

independent counsel, that he wants Skadden to continue to represent him; and (4)

AMO has not asserted any conflicts.

The legal issue before this Court is Mr. Mazzos Sixth Amendment right to his

counsel of choice in defending against the criminal charges brought by the

government. In a brief long on inflammatory rhetoric, ad hominem attacks, and

unwarranted inferences drawn from the mistakes made or caused to be made by a

former partner at Skadden who is no longer involved in this case or associated with

the firm, the government seeks the extraordinary remedy of denying a criminal

defendant his chosen counsel who has been representing him for six years and who

has committed no misconduct here. At bottom, the government has fallen far short

of establishing any basis for taking such a far-reaching and rights-denying action.

At the outset, the former Skadden partner has apologized for the mistakes that

he made or caused to be made in this case. Skadden sincerely regrets these mistakesand has worked diligently to disclose and correct them over the past several months.

The new developments do not in any way, however, undermine Mr. Mazzos

fundamental right to retain his counsel of choice in the very serious criminal

proceedings he faces. Under settled principles, there is no disqualifying conflict of

interest presented by the facts of this case. And, even assumingarguendothat there



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were a conflict that might bear on representation, Mr. Mazzo is fully entitled, under

settled case law, to make his own decision: he has the right to waive the asserted

conflicts and proceed to trial with his chosen counsel, Richard Marmaro and

Skadden.In its Supplemental Brief in Support of Governments Motion to Revisit

Judicial Inquiry Into Conflicts of Interest Affecting Defendant James V. Mazzo

(Supplemental Brief), the government seeks to paper over the legal deficiencies of

its position by ignoring Mr. Mazzos constitutionally protected choice of counsel.

The government also makes unsupported, inflammatory, and false inferences from

the factual record. Most prominently, without any basis in the record, the

government argues that the mistakes reflect intentional misrepresentations, and that

the self-acknowledged mistakes of former Skadden partner Eric Waxman should be

attributed to Mr. Marmaro. In sharp contrast to the governments unsupported and

objectionable inferential arguments in its brief to this Court, the lead SEC counsel in

the parallel civil proceedingwho in many ways is more versed in the facts relating

to this motion, including because he actually took the depositions of Mr. Waxman

and another Skadden partner regarding these mattersstated explicitly on the record

in open court to Judge Carter almost one week before the government filed the

Supplemental Brief in this Court, I want to make it very clear that we are not

suggesting any wrongdoing by Mr. Marmaro. We had to send the letters that

we sent to him because he is lead counsel for the defense, but I wanted to be

very clear about that, and we appreciate his professionalism in working through

these issues. (Mazzo Ex. A at 13:813 (statement of SEC Senior Trial CounselMichael J. Rinaldi on June 9, 2015).)1

1 Citations to Govt Ex. refer to the exhibits to the governmentsSupplemental Brief. Citations to Mazzo Ex. refer to additional exhibits submittedby Mr. Mazzo herewith, which are attached to the Declaration of Clifford M. Sloan.The five declarations submitted with this opposition are referred to by name. Seeinfran.2.



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For three fundamental reasons, the Court should reject the governments

attempt to prevent Mr. Mazzo from defending against the governments charges with

his chosen counsel.

First, the government has not met its heavy burden of demonstrating a conflictof interest that justifies disqualifying Skadden and Mr. Marmaro. Despite repeating

throughout the Supplemental Brief the list of mistakes that Mr. Waxman made or

caused to be made, the government fails at the most basic level to establish how any

recent disclosures demonstrate a disqualifying conflict. In reality, the undisputed

facts establish that no disqualifying conflict is present. The governments argument

to the contrary rests on a fundamental misunderstanding of the law, layers of

impermissible speculation, or both. Notably, moreover, the government would

obtain a very significant tactical advantage were it to succeed in disqualifying Mr.

Marmaro and Skadden.

Second, even assuming arguendo that the existence of one or more of the

conflicts of interest posited by the government might apply to Skaddens

representation of Mr. Mazzo, he is entitled to waive his right to conflict-free counsel.

The importance of Mr. Mazzos Sixth Amendment right to counsel of his choice

prevails over the governments attempt to have this Court unilaterally remove Mr.

Marmaro and Skadden from this litigation, particularly because there are reasonable

alternative measures that may be employed to address any issue and avoid the

draconian action sought by the government. A defendants waiver may be

overriddenonly if the government is able to demonstrate a conflict sufficiently

egregious that no rational defendant would proceed without a substitution ofcounsel. But the government has not come remotely close to meeting this steep

burden, which is satisfied in only the rarest of circumstances.

Third, the government broadly suggests that, regardless of the conflicts and

waiver analysis, this Court nevertheless should deny Mr. Mazzo his chosen counsel

in the general interest of the administration of justice. The general interest in the



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administration of justice simply does not overcome Mr. Mazzos choice of counsel

here, especially when the governments position is supported only by unwarranted

inferences and unsupported accusations against counsel. While Skadden in no way

minimizes the significance of the previous mistakes, the government, in its attemptto have this Court deny Mr. Mazzo his desired counsel, deviates conspicuously from

the record, states unjustified conclusions as facts, and launches unwarranted

accusations. In any event, the conduct alleged is far from the kind of action that

would justify such an extreme sanction on grounds of judicial integrity, particularly

because it would severely penalize the defendant.

Accordingly, the Court should deny the governments motion to disqualify

Skadden and allow Mr. Mazzo to confront the criminal charges against him with the

counsel of his choosing.2

2. FACTUAL AND PROCEDURAL BACKGROUND

For the benefit of the Court, five background areas are particularly important

in considering the governments motion: (1) the mistakes at issue; (2) actions taken

2

In addition to a complete response to the government in this opposition,attached are five declarations that address and rebut each of the governmentsassertions: (1) a declaration by Mr. Mazzo explaining that he has consulted withexperienced independent counsel about the governments statements and positionsand has decided to proceed with Skadden as his counsel (Mazzo Decl.); (2) adeclaration by Debra Wong Yang, former United States Attorney and Los AngelesSuperior Court Judge, explaining that, as independent counsel, she has discussedwith Mr. Mazzo the governments statements and positions, and that Mr. Mazzo hasdecided to proceed with Skadden as his counsel (Yang Decl.); (3) a declaration bySkadden partner Brian J. McCarthy confirming that he had a conversation with Mr.Mazzo in February 2009 that resulted in Mr. Waxman calling Mr. Mazzo about thiscase (McCarthy Decl.); (4) a declaration from Mr. Marmaro explaining the actionsthat were taken to correct the record when the previous mistakes came to hisattention and to the attention of others at Skadden (Marmaro Decl.); and (5) adeclaration from renowned ethics expert Professor Geoffrey C. Hazard, Jr.explaining that he has reviewed the governments brief and has concluded that, undersettled principles, there is no basis for disqualifying Skadden from representing Mr.Mazzo (Hazard Decl.).



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by Skadden to correct the record; (3) Skaddens concurrent representation of Mr.

Mazzo and AMO in 2009; (4) corrections to the governments statement of facts in

its Supplemental Brief; and (5) Mr. Mazzos informed decision to proceed with his

counsel of choice. A review of the facts makes clear that Skadden has movedexpeditiously to identify and remedy previous mistakes as soon as they came to the

firms attention; the government has erroneously made unsupported and

objectionable inferences in an effort to support its disqualification request; and Mr.

Mazzo has consistently reiterated his desire to be represented by Skadden and Mr.

Marmaro, notwithstanding the governments conflict allegations.

2.1 The Mistakes at Issue

Skaddens motion to quash the 2009 grand jury subpoena of Eric Waxman and

the firms 2011 and 2015 briefing in opposition to the governments judicial inquiry

motions contain several mistakes that Mr. Waxman made or caused to be made.

(Marmaro Decl. 9; Govt Ex. 50.) These mistakes and others were made in the

SECs civil case as well, in connection with a number of discovery disputes. (See

Supp. Br. 2329.) These statements erroneously characterized the existence of notes

evidencing the interview of co-defendant Doug DeCinces; the existence of notes

evidencing a privileged conversation with Mr. Mazzo; the nature, scope, and

duration of the firms representation of AMO; and the beginning date of the firms

representation of Mr. Mazzo, among other details. Mr. Waxman has testified that

these mistakes were unintentional, and that he made or caused to be made all of them.

(Mazzo Ex. B, Waxman Dep. 82, 216; Govt Ex. 50 2.)

The governments Supplemental Brief reproduces those mistakes in theirentirety, and repeatedly emphasizes their duration and number. (Supp. Br. at 2338,

47.) Skadden intends in no way to downplay the seriousness of making a mistake

about a fact to a Court or the government, however unintentional the mistakes were.

It bears noting, however, that the mistakes made or caused to be made by Mr.

Waxman pertain to three areas(1) the representation of AMO and Mr. Mazzo in



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early 2009, (2) the circumstances and work product of the DeCinces interview in

March 2009, and (3) the existence of notes of a privileged conversation with Mr.

Mazzo in February 2009. (Govt Ex. 50; Supp. Br. 2329.)

2.2 Actions Taken To Correct The RecordOn February 10, 2015, Mr. Marmaro produced the DeCinces interview

memorandum. Thereafter, during the week of February 16, 2015, Skadden located

notes taken by Mr. Waxman and Mr. Morrison during the DeCinces interview, and

they were immediately brought to Mr. Marmaros attention. (Marmaro Decl. 4.)

Prior to that week, Mr. Marmaro relied in good faith on statements made to him by

Mr. Waxman to the effect that only Mr. Waxman had taken notes and that those

notes were discarded when Mr. Waxman drafted his interview memorandum in 2009.

(Id.) Likewise, the entire Skadden team defending Mr. Mazzo relied in good faith on

Mr. Waxmans representations. (Id.) Mr. Marmaro had no personal knowledge

about these matters, and was not involved in Mr. Mazzos representation at the time

the DeCinces interview occurred. (Id.)

When Mr. Marmaro learned of the existence of the notes of the DeCinces

interview, he promptly prepared and filed a declaration to this Court on February 20,

2015 that explained what he had learned that week. (Marmaro Decl. 5; ECF No.

376.) With his declaration, Mr. Marmaro submitted the notes under seal and

withdrew any statement made to the Court, the SEC, or the government concerning

the DeCinces interview, the typed memorandum thereof, or the existence of the

handwritten notes. (Marmaro Decl. 5.) The same day, Mr. Marmaro also sent a

letter to the SEC disclosing and producing the recently discovered notes, andwithdrawing any statement made to the Court, the SEC, or the government

concerning the DeCinces interview, the typed memorandum thereof, or the existence

of the handwritten notes. (Id. 6.)

Soon after filing the declaration and sending the letter to the SEC, Mr.

Marmaro was made aware for the first time of the existence of undated and



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unlabeled notes taken by Mr. Waxman and Mr. Morrison, at least some portions of

which likely reflected one or more privileged conversations with Mr. Mazzo.

(Marmaro Decl. 7.) As with the DeCinces interview notes, Mr. Marmaro had

previously relied in good faith on statements made to him by Mr. Waxman to theeffect that no notes from the privileged conversation with Mr. Mazzo existed. (Id.)

Likewise, the entire Skadden team defending Mr. Mazzo relied in good faith on Mr.

Waxmans representations. (Id.) Mr. Marmaro had no personal knowledge about

these notes. (Id.) In response to document requests that accompanied the SECs

subpoenas served on Mr. Waxman and Mr. Morrison in the related civil case,

Skadden listed the Mazzo notes on a privilege log provided to the SEC. (Id. 8.)

In response to those same document requests, Skadden also produced

responsive, non-privileged documents relevant to the timing and scope of its

representation of Mr. Mazzo and AMO in 2009. (Id.) As a result of that review and

production, on April 8, 2015 (prior to his deposition), Mr. Waxman voluntarily

submitted a list of corrections to factual mistakes he made or caused to be made to

the SEC. (Id. 9.) After additional review of records and court filings, Mr.

Waxman voluntarily submitted declarations in this matter and the related SEC civil

matter withdrawing and correcting additional erroneous factual assertions, and

apologizing to the courts, the U.S. Attorneys Office, and the SEC. (Id.; Govt Ex.

50.) Mr. Waxman acknowledged that he personally made or caused to be made all

of the statements requiring withdrawal and correction. (Govt Ex. 50 2.)

During his deposition in the related civil case, Mr. Waxman accepted

responsibility for his mistakes under oath. (Mazzo Ex. B, Waxman Dep. 21618.)Similarly, when presented with his erroneous declarations, Mr. Waxman

acknowledged his mistakes. (Id.at 82 (This was a mistake. There was no intent to

do anything other than reflect what my recollection was at the time.); id. at 216

(There were mistakes that I made in connection with this case. I regret that. I

havent tried to run away from those mistakes. Theyre clearly mine. But there was



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absolutely no intent to mislead anyone at any time.).) Apart from failing to

discover and disclose the notes taken during the DeCinces interview, Mr. Waxman

accepted responsibility for incorrectly asserting that the firm represented only Mr.

Mazzo, and not also AMO, when interviewing Mr. DeCinces. (Id.at 21819.)Mr. Waxman further acknowledged his mistake in not following up with Mr.

Morrison about whom the firm represented in March 2009, particularly in light of the

fact that Mr. Morrison recorded his time for the DeCinces interview to the client-

matter number for AMO. (Id. at 22526, 228.) Mr. Waxman similarly

acknowledged that he obtained no formal written consent from AMO before

commencing work for Mr. Mazzo, but made clear that AMO was aware of the

representation and that Mr. Waxman perceived no conflict. (Id.at 20506.)

When Mr. Waxman was confronted with the erroneous statements referred to

above, he corrected the mistakes that had been made and apologized to the Court and

the government. (Marmaro Decl. 10.)

Mr. Waxman no longer represents Mr. Mazzo and no longer works at Skadden.

Other than preparing for his deposition and reviewing the accuracy of previous

statements, Mr. Waxman ceased working on this matter and the related civil case

shortly after the revelation that handwritten notes of the DeCinces interview did, in

fact, exist. (Id. 11.) On May 31, 2015, Mr. Waxman retired from Skadden. (Id.)

On June 10, 2015, Skadden filed a formal notice withdrawing Mr. Waxman as one of

the lawyers for Mr. Mazzo. (ECF No. 426.)

In a hearing before Judge Carter in the civil SEC matter on June 9, 2015, the

SECs senior trial counsel Michael Rinaldi stated on the record before Judge Carter,If I could just say on behalf of the Commission, this has been a very difficult issue.

I want to make it very clear that we are not suggesting any wrongdoing by Mr.

Marmaro. We had to send the letters that we sent to him because he is lead counsel

for the defense, but I wanted to be very clear about that, and we appreciate his

professionalism in working through these issues. (Mazzo Ex. A at 13:713.)



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2.3 Skaddens Representation Of Mr. Mazzo Commenced BetweenFebruary 10 and February 20, 2009, While The Firm RepresentedAMO For Related Matters.

Skaddens representation of Mr. Mazzo and of AMO has been the subject of

extensive discussion and corrections. It has been clear that Skadden has representedMr. Mazzo personally since February 2009. And it likewise has always been clear

that the client (Mr. Mazzo) from the outset believed that Skadden was representing

him personally at that time through the present. Additionally, Skadden was

concurrently representing AMO in 2009.

Mr. Mazzo explained his understanding that Skadden began to represent him

[i]n early 2009 in a previously submitted declaration. On August 2, 2011, Mr.

Mazzo declared as follows:

2. In early 2009, Skadden partner Eric. S. Waxman beganrepresenting me regarding potential insider tradingallegations.

3. When the insider trading issue first surfaced in early2009, I had a conversation with Brian McCarthy ofSkadden our outside corporate counsel who told me hewould speak directly with Diane Biagianti, the generalcounsel of Advanced Medical Optics and subsequently thevice president legal section head of Abbott Medical Optics,with a recommendation of a securities litigator to assist

me personally in the insider trading inquiry. Mr.Waxman subsequently contacted me soon thereafter, and

his representation of me commenced.

(Mazzo Ex. C 23 (emphasis added).)

Mr. Mazzowith full knowledge that Skadden was representing AMO in the

corporate transaction at issue in this caseunderstood that Mr. Waxman and

Skadden represented him personally as soon as the insider trading issue firstsurfaced in early 2009. (Id. 3.) The additional Skadden partner referenced by Mr.

Mazzo, Brian J. McCarthy, has submitted a declaration recounting the same

conversation as the one Mr. Mazzo described. (McCarthy Decl. 5.) Mr. McCarthy

also explains that the conversation took place on or around February 10, 2009. (Id.)

Mr. McCarthy further confirms that he informed Mr. Mazzo that Skadden would



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look out for his interests and that he asked Eric Waxman to call Mr. Mazzo in that

regard. (Id.) As a result of his conversations with Mr. Mazzo and Mr. Waxman, it

was clear to Mr. McCarthy that Mr. Mazzo understood that Skadden, through Mr.

Waxman, was representing Mr. Mazzo in any matters arising out of the New YorkStock Exchanges (NYSE) 2009 inquiry that followed the public announcement of

Abbotts acquisition of AMO. (Id.;see alsoMazzo Ex. B, Waxman Dep. 100, 208

09.)

Skadden was outside corporate counsel to AMO for the transaction.

(McCarthy Decl. 3.) On January 15, 2009, three days after Abbotts proposed

acquisition of AMO was made public, NYSE sent a letter to Ms. Biagianti, then

General Counsel of AMO. (Govt Ex. 1.) As is commonly the case when a public

company receives such a letter from the NYSE, Skadden, as counsel for the deal,

assisted AMO in responding. (McCarthy Decl. 4.) AMOs response was dated

February 11, 2009. (Govt Ex. 2.)

The NYSE sent a second letter to AMO on February 10, 2009. (Govt Ex. 7.)

The second letter listed several individuals and entities, including Douglas DeCinces,

and asked AMO to inform the NYSE whether any corporate officials, directors,

and/or employees of AMO or its advisors knew anyone on the list. (Id.) Mr.

DeCinces was Mr. Mazzos friend and neighbor, and Mr. Mazzos conversation with

Mr. McCarthywhich ultimately led to Mr. Waxmans representation of Mr.

Mazzooccurred soon after AMO received the letter identifying Mr. DeCinces.

(See McCarthy Decl. 45.) Thus, Skaddens representation of Mr. Mazzo

commenced no sooner than February 10, 2009, at a time when Skadden wasrepresenting AMO. Simply put, on February 20, 2009 and March 24, 2009, the firm

had two clientsMr. Mazzo and AMO. Mr. Morrisons view that he believed the

conversation with Mr. Mazzo and the interview of Mr. DeCinces occurred in

connection with work for AMO (Mazzo Ex. D, Morrison Dep. 54) is among the



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evidence that Skadden has considered in determining that it concurrently represented

Mr. Mazzo and AMO on these dates.

Critically, Mr. Mazzos own viewwhich has been consistent from the

outsetis that Skaddens representation of him individually commenced at the timeof his first discussion with Mr. Waxman in early 2009. (Mazzo Ex. C 3.) Mr.

Mazzo has confirmed that he had conversations with Mr. Waxman on the

understanding that Mr. Waxman was representing him personally in this time period.

(Govt Ex. 31 23.) Although the relationship was not memorialized in an

executed engagement letter until September 4, 2009 (Govt Ex. 27), Mr. Mazzo has

declared that he understood the engagement letter to confirm[] the fact that Skadden

represented [him] in connection with the insider trading investigation that

commenced months earlier. (Govt Ex. 31 3.) As a result, when Mr. Waxman

interviewed Mr. DeCinces on March 24, 2009, it was Mr. Mazzos understanding

that he did so as an attorney for Mr. Mazzo. (Id.)

2.4 Corrections To The Governments Statement Of Facts

On at least six separate points, the government has asserted conclusions that

exceed the fair inferences to be drawn from the testimony and documents on which

they claim to be based.

2.4.1 The Mistakes at Issue

Throughout the Supplemental Brief, the government characterizes the

mistakes made or caused to be made by Mr. Waxman as intentional. But

conspicuously absent from the governments assertions is even a single shred of

evidence that anyone at Skadden intentionally misrepresented anything to theCourtor thegovernment. For good reason. There is no evidence of any intentional

misrepresentations by anyone at Skadden.

To the contrary, the available evidence demonstrates that the mistakes that Mr.

Waxman made or caused to be made were inadvertent and not the result of any ill

intent. (See, e.g., Marmaro Decl. 10; ECF No. 376 3 (explaining that mistaken



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statements were made in good faith reliance on representations made to me by Mr.

Waxman); Mazzo Ex. B, Waxman Dep. 216 (But there was absolutely no intent to

mislead anyone at any time.).)

2.4.2 Attribution of Mr. Waxmans Mistakes to Mr. MarmaroThe government, throughout its Supplemental Brief, attempts to attribute Mr.

Waxmans mistakes to Mr. Marmaro, notwithstanding Mr. Waxmans statements

that he made or caused to be made the mistakes at issue. (Govt Ex. 50 2.) The

SEC senior counsel has recognized that this is a fundamentally erroneous assertion in

his statement on the record to Judge Carter. (Mazzo Ex. A at 13:713.) As an initial

matter, Mr. Marmaro was not involved with the case at the time of the DeCinces

interview or the privileged conversation with Mr. Mazzowhich formed the basis

for the mistakes made during this case and the parallel civil proceeding. (Marmaro

Decl. 4, 7.) And Mr. Marmaro has declaredand the government has not

disputedthat Mr. Marmaro had no personal knowledge of any mistakes made by

Mr. Waxman and relied in good faith on the representations made by Mr. Waxman.

(ECF No. 376, 2/19/15 Marmaro Decl. 3; see also Mazzo Ex. B, Waxman Dep.

216.) Mr. Marmaro became aware for the first time of the DeCinces interview notes

during the week of February 16, 2015, and of the Mazzo privileged conversation

notes shortly thereafter. (Marmaro Decl. 4, 7.)

2.4.3 Peter Morrisons Testimony

The government claims that the testimony of Mr. Morrison, a Skadden partner,

establishes that the firm represented only AMO in February and March of 2009.

(Supp. Br. at 9.) That simply is not the case. Mr. Morrison testified only about hisown subjective understanding of his role: My understanding at the time was that I

was representing the company. (Mazzo Ex. D, Morrison Dep. 83;see also, e.g.,id.

at 55 (My best recollection of my belief at the time [of the February 20 Mazzo

conversation] was that it was done for AMO.); id. at 116 (My understanding at the

time [of the DeCinces interview] was that my work in connection with that phone



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call was being done for the company . . . .); id. at 153 ([M]y understanding at the

time was that I represented AMO, and so, based on my understanding, I didnt take

the position that I was representing someone other than AMO.).)

Despite the governments sweeping, categorical claim, it points to notestimony from Mr. Morrison that forecloses the possibility that the firm also

represented Mr. Mazzo in February and March of 2009 (and, of course, Mr.

Morrison is not the only source of information on Skaddens representations, and he

was but a single attorney involved in the AMO representation). Critically, Mr.

Mazzo thought that Mr. Waxman (and Skadden) was representing him during the

entire time period, including the DeCinces interview (Mazzo Ex. C, 2; Govt Ex.

31 2); and Mr. Waxman has testified that he believed in 2009 that he was

representing Mr. Mazzo, not AMO, at the time (Mazzo Ex. B, Waxman Dep. 235;

see alsoMcCarthy Decl. 5).

Similarly, the government also argues that Mr. Morrison gave testimony

disagree[ing] with virtually all of the content of a declaration given by Mr.

Waxman in 2011 to support the motion to quash his grand jury subpoena, which

stated that he represented Mr. Mazzo when interviewing Mr. DeCinces. (Supp. Br.

at 14.) Mr. Morrison actually testified about a joint stipulation prepared in the

related civil case in 2013, not the motion to quash. (Mazzo Ex. D, Morrison Dep.

149153.) He stated that he would not personally have signed the brief associated

with Mr. Waxmans 2013 declaration because Mr. Morrisons personal belief was

that he represented AMO. [B]ased on my understanding at the time, I wouldnt

have signed the document, because it didnt comport with my understanding at thattime. (Id. at 153.) As Mr. Morrison further explained in response to the SECs

repeated insistence that he opine about Mr. Waxmans assertions, its a hypothetical.

This wasnt put in front of me. (Id.) The governments characterization again

overstates the record.



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2.4.4 Diane Biagiantis Declaration

The government asserts that AMO General Counsel Diane Biagianti

participated in a telephone conversation that Mr. Waxman and Mr. Morrison had

with Mr. Mazzo on February 20, 2009. (Supp. Br. 8.) The government bases itsconclusion on emails; Mr. Morrisons time entry for the call; Mr. Morrisons

calendar entry for the call; and Mr. Morrisons vague recollection that Ms.

Biagianti may have participated. (Id.) The government, however, ignores Ms.

Biagiantis own recollections as stated in her declaration.

In a declaration procured from Ms. Biagianti by the SEC, she states that Mr.

Waxman conducted an interview of Mazzo regarding the NYSEs review of trading

in AMO securities on or about February 20, 2009. (Govt Ex. 10 9.) Crucially,

she goes on to state that [o]n or about February 20, 2009, but after the interview

referenced in the preceding paragraph, I had a conversation with Waxman, during

which Waxman summarized his interview of Mazzo regarding the NYSEs review of

trading in AMO securities. (Id. 10.) Ms. Biagianti does not claim that she

participated in the call. If she had, there would have been no need for Mr. Waxman

to contemporaneously summarize the contents of the call.

The government likewise cites Ms. Biagiantis declaration as establishing that

Skadden was not representing Mr. Mazzo when it interviewed Mr. DeCinces. (Supp.

Br. at 89.) This is not supported by the record. Ms. Biagiantis declaration states

that Skadden attorneys interviewed Mr. DeCinces in connection with the NYSEs

review of trading in AMO securities. (Govt Ex. 10 12.) Contrary to the

governments characterization, she does not state that the firm was not representingMr. Mazzo as well.

2.4.5 Mr. Mazzos May 12, 2011 Declaration And Waiver

Mr. Mazzo submitted a declaration dated May 12, 2011 in support of

Skaddens motion to quash the grand jury subpoena of Mr. Waxman in which he

declared the following:



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Before Mr. Waxman interviewed Mr. DeCinces, I hadprivileged discussions with Mr. Waxman concerning thismatter. At that time, I understood that Mr. Waxmanintended to, and ultimately did, interview Mr. DeCinces inconnection with his representation of me personally.

(Govt Ex. 31 2.) The government states that Marmaro and Waxman causedMazzo to sign a declaration stating that Waxman conducted the DeCinces interview

on his behalf . . . . (Supp. Br. at 15). Remarkably, and without any evidence, the

government broadly asserts that Mr. Mazzos declaration was false. Id. at 13.

The government has no factual basis to state that Mr. Mazzos declaration is

false, or that Skadden procured false testimony. Indeed, Mr. Marmaro was not even

involved in the case when the DeCinces interview occurred. (Marmaro Decl. 4.)

The governments unsupported and unwarranted ad hominem attacks should not be

countenanced; the regrettable mistakes that Mr. Waxman made or caused to be made

in this case do not give the government a license to attack the character of the

defendant (or his lead counsel). Mr. Mazzos declaration reflects Mr. Mazzos

statement about his own beliefs and understanding, and the government offers

nothingnot a scintilla of evidenceto warrant the unjustified accusation that Mr.

Mazzos description of his understanding was false. (SeeHazard Decl. 8.)3

2.4.6 This Courts August 10, 2011 Order

On August 10, 2011, this Court denied the governments motion to open a

judicial inquiry, after receiving two rounds of supplemental briefing. (Govt Ex. 36.)

The government identifies seven assertions made in declarations and in Skaddens

briefing on that motion related to Skaddens work for Mr. Mazzo and AMO in 2009,

all of which have been withdrawn and corrected. (Supp. Br. at 1617.) The

3 In the same vein, without any basis or foundation, the governmentasserts as fact that Skaddens mistakes reflect a purposeful effort to achieve tacticaladvantages in this case and the SEC case. (Supp. Br. at 3). This statement is false.Indeed, it isthe governmentthat now seeks the tactical advantage of removing Mr.Mazzos long-time counsel of choice, even though neither Mr. Mazzo nor AMOthe real parties in interest hereever has asserted a conflict or a request fordisqualification.



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government then concludes that the Court said it was relying heavily on the

declarations submitted by Skadden and Mazzos waiver. (Id. at 17.) The

governments statement, however, ignores the role that Mr. Mazzos choice of

counsel played in the Courts August 10, 2011 Order.Fairly read, the August 10, 2011 Order emphasizes the deference that must be

given to Mazzos choice of counsel. (Govt Ex. 36 at 2.) That factor was central to

the outcome of the dispute in 2011 (as it should be here), despite what Mr. Marmaro

forthrightly acknowledged has not been Skaddens finest hour. (Id.) Moreover,

the Court specifically referred to and relied on Mr. Mazzos August 2, 2011

declaration regarding his understanding of the representations (id.), which remains

perfectly valid and truthful. (The governments Supplemental Brief ignores Mr.

Mazzos August 2, 2011 declaration.)4

2.5 Skadden Remains Mr. Mazzos Counsel Of Choice

There is one fact of overriding importance given short shrift in the

governments Supplemental Brief. Skadden is Mr. Mazzos counsel of choice, and

has been since 2009. After receiving the governments Supplemental Briefwhich

explains, in hyperbolic terms, the governments positions on Skaddens purported

conflictsMr. Mazzo consulted with independent counsel about the issues it has

raised. (Mazzo Decl. 49; Yang Decl. 1.) After consulting his independent

counsel, Mr. Mazzo has expressed his informed decision that Skadden should

continue to represent him in this case and the related SEC matter with Mr. Marmaro

4 The government also seeks to make much of the Courts order granting

Skaddens motion to quash the grand jury subpoena directed to Mr. Waxmanregarding his interview of Mr. DeCinces. Since the motion to quash was granted, Mr.Mazzo has been indicted, and the government and SEC have received (i) Mr.Waxmans and Mr. Morrisons notes of the DeCinces interview; (ii) Mr. Waxmansmemorandum of the interview and drafts thereof; (iii) deposition testimony from Mr.Waxman and Mr. Morrison about the interview and Mr. DeCincess statements; and(iv) a waiver from Mr. Mazzo as to the fact that both Mr. Waxman and Mr. Morrisonmay testify in this case. As a result, the government can identify no prejudice to itscurrent position as a result of the motion to quash proceedings; and, in any event, aswill be discussed, prejudice to the government is not the appropriate test for a motionto disqualify counsel.



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as his lead trial counsel in both cases, notwithstanding the erroneous statements that

Mr. Waxman made or caused to be made to the Court and the government. (Mazzo

Decl. 917; Yang Decl. 510.) Mr. Mazzo has also expressed a waiver of any

conflict of interest Skadden may have as a result of its concurrent or successiverepresentation of AMO, including any Skadden obligation to maintain AMOs

confidences, after consulting with his independent counsel. (Mazzo Decl. 917.)

Mr. Mazzo stands ready to submit a waiver at the hearing as well, and to respond to

any inquiry that the Court might have, if this Court views such a hearing as

necessary or appropriate. (Id. 18.)5

3. ARGUMENT

Motions to disqualify counsel are strongly disfavored, White v. Experian

Info. Solutions, 993 F. Supp. 2d 1154, 1166 (C.D. Cal. 2014), as they often pose the

very threat to the integrity of the judicial process that they purport to prevent,

Simonca v. Mukasey, No. CIV S-08-1453 FCD GGH, 2008 WL 5113757, at *2 (E.D.

Cal. Nov. 25, 2008). For this reason, disqualification motions should be subjected

to particularly strict judicial scrutiny. Optyl Eyewear Fashion Intl Corp. v. Style

Cos., 760 F.2d 1045, 1050 (9th Cir. 1985); see also White, 993 F. Supp. 2d at 1166

([B]ecause motions to disqualify are often tactically motivated, such motions are

strongly disfavored and subject to particularly strict judicial scrutiny.); In re

Marvel, 251 B.R. 869, 871 (Bankr. N.D. Cal. 2000) (A motion for disqualification

of counsel is a drastic measure which courts should hesitate to impose except when

of absolute necessity.). [A]bsent unusual circumstances, then, litigants right to

5Skadden, through the office of its General Counsel, attempted to amicably

resolve any issues that the government might have had involving Mr. Mazzoscontinued retention of Skadden. (Supp. Br. at 4 n.1.) Skadden offered possiblealternatives to ameliorate any purported conflicts and emphasized its willingness towork with the government in a cooperative fashion to address any issues. (Mazzo Ex.E.) But the government simply did not respond. Had it done so, the parties mayhave been able to resolve the issues that the government has raised withoutburdening this Court and without risking a taint to the jury pool that may well resultfrom these proceedings.



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counsel of their own choosing . . . outweighs any interests the court or opposing

parties might have in precluding those choices. Yee v. Ventus Capital Servs., No. C

05-03097(RS), 2006 WL 3050827, at *2 (N.D. Cal. Oct. 26, 2006). And to the

extent that a motion to disqualify is based on tactical reasons, courts will not deprivea litigant of his chosen counsel. See, e.g., Robert Bosch Healthcare Sys. Inc. v.

Cardiocom, LLC,No. C-14-1575 EMC, 2014 2703807, at *4 n.2 (N.D. Cal. June 13,

2014) ([D]isqualification may not be permitted where tactical abuse motivates the

disqualification motion.);see also White, 993 F. Supp. 2d at 1166.

A criminal defendants right to counsel of his choice is especially compelling

in light of the added constitutional dimension, and the government bears a

correspondingly greater burden to prevail on a motion to disqualify in the criminal

context. The Supreme Court has explained that [t]he right to select counsel of ones

choice . . . has been regarded as the root meaning of the [Sixth Amendments]

constitutional guarantee. United States v. Gonzalez-Lopez, 548 U.S. 140, 14748

(2006) (holding that deprivation of a defendants right to counsel of choice

constitutes structural error). Courts, as a result, must recognize a presumption in

favor of [a defendants] counsel of choice. Wheat v. United States, 486 U.S. 153,

164 (1988); see also United States v. Turner, 594 F.3d 946, 951 (7th Cir. 2010)

([T]he force of the core constitutional command requires that the court start from a

default position that gives effect to the defendants Sixth Amendment right to choose

his own counsel.). In seeking to disqualify a defendants chosen counsel, the

government bears a heavy burden of establishing that concerns about the integrity of

the judicial process justify the disqualification. United States v. Washington, 797F.2d 1461, 1465 (9th Cir. 1986); see also Turner, 594 F.3d at 948 (vacating district

courts disqualification order where its analysis disregarded the presumption in

favor of the defendants chosen counsel and imposed what amounts to a per se rule

against joint representation).



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[I]t is the job of th[e] court, first and foremost, to give effect to the

defendants constitutional right to the counsel of his choice. United States v. Salyer,

No. CR. S-10-061 LKK, 2011 WL 3665017, at *2 (E.D. Cal. Aug. 19, 2011). In

rejecting the governments motion to disqualify defense counsel, the court in Salyeremphasized the realities at play: the defendant was facing a 60-page indictment

charging him with conspiracy, fraud, and RICO violations; and the firm that the

government sought to disqualify would add substantial resources to [defendants]

current legal team, especially given its specialty in complex, criminal anti-trust

cases. Id. The court thus credited the defendants claim that the ability to add [the

firm] to his defense team[] is critical to him in what he calls the fight of my life

and allowed him to proceed with his chosen counsel. Id.

The same result is compelled here. The government has charged Mr. Mazzo

with twenty-seven counts of securities fraud; Mr. Mazzos counsel of choice has

represented him in connection with the case for almost six years; Mr. Marmaro and

the Skadden team have been deeply immersed with Mr. Mazzo in the facts and law

of this complex case; Mr. Marmaro has substantial experience defending complex,

white collar cases like this one; and the case is likely to proceed to trial only months

from now. Despite the stark realities of the situationincluding the advanced

stage of the proceedings, the speculative (and spurious) nature of any purported

disqualifying conflict of interest, the fact that Mr. Mazzo has again affirmed that,

after consulting with independent counsel, he wishes to waive his right to conflict-

free counsel so that he can proceed with Skadden and Mr. Marmaro as his chosen

counsel, the reality that all of the parties at issue have waived any objection toSkaddens representation of Mr. Mazzo, and the lack of any intentional wrongdoing

by anyonethe government seeks to thwart Mr. Mazzos free election of counsel

with a claim that it knows better than Mr. Mazzo how to safeguard the effectiveness

of his defense. The Court should not countenance the governments efforts to thwart

Mr. Mazzos Sixth Amendment rights. It should, instead, deny the governments



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motion to disqualify and allow Mr. Mazzo to proceed to trial with his counsel of

choice.

Accordingly, three points are important in considering the governments

request that this Court deny Mr. Mazzo his chosen counsel. First, contrary to thegovernments sweeping assertions, there is no disqualifying conflict of interest,

either due to Skaddens concurrent or successive representation of AMO and Mr.

Mazzo or to Skaddens purported self-interest conflict with Mr. Mazzo. Second, in

any event, Mr. Mazzo has knowingly and intelligently waived any conflict after

consulting with independent counsel, and is willing to confirm that waiver, if the

Court finds that it would be helpful or appropriate, in a formal proceeding. And,

third, the governments suggestion that this Court should deny Mr. Mazzo his choice

of counsel, regardless of conflict or waiver, based on a supposed general interest in

the administration of justice is unwarranted and unsound.

3.1 THERE IS NO CONFLICT OF INTEREST JUSTIFYINGDISQUALIFICATION OF MR. MAZZOS COUNSEL OFCHOICE.

The government claims that there are two conflicts of interest that warrant

disqualifying Skadden: (1) Skaddens representation of Mr. Mazzo is adverse to its

former representation of AMO on similar matters (Supp. Br. at 49); and (2) Skadden

and Mr. Mazzo have divergent interests given Skaddens alleged need to protect its

reputation and defend against allegations of misconduct (id. at 4546). Because the

governments assertions are based on nothing more than [t]he hypothetical

possibility of conflicts of interest, which cannot result in disqualification of a

lawyer where there is neither an actual or apparent conflict of interest, the Courtshould deny the governments motion. See Baker Manock & Jensen v. Superior

Court, 175 Cal. App. 4th 1414, 1424 (2009). (See also Hazard Decl. 6.)6 And,

6 The Court applies California law when determining whether adisqualifying conflict of interest exists. In re Cnty. of L.A., 223 F.3d 990, 995 (9thCir. 2000).



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again, it bears emphasis that both AMO and Mr. Mazzo have approved of Skaddens

representation of Mr. Mazzo and waived any conflicts of interest.

3.1.1 There Is No Disqualifying Conflict of Interest Arising Out ofSkaddens Prior Representation of AMO.

The government focuses on a purported conflict of interest stemming from

Skaddens prior representation of AMO. (See, e.g., Supp. Br. at 4749.) That

argument, whether based on a theory of concurrent representation or successive

representation, does not withstand careful analysis. Nor do the governments

speculative concerns about Skaddens purported inability to adequately cross-

examine AMO witnesses change the analysis.

3.1.1.1 Skaddens Concurrent Representation of Mr. Mazzoand AMO Does Not Give Rise to a DisqualifyingConflict of Interest.

Courts may find a potentially disqualifying conflict of interest in cases of

concurrent representation of clients with adverse interests. Unless there is informed

written consent, an attorney cannot represent two or more clients at the same time

whose interests conflict. Great Lakes Constr., Inc. v. Burman, 186 Cal. App. 4th

1347, 1356 (2010); see also City and Cnty. of S.F. v. Cobra Solutions, Inc., 38 Cal.

4th 839, 846 (2006) (articulating default rule that [a]n attorney who seeks to

simultaneously represent clients with directly adverse interests in the same litigation

will be automatically disqualified).

Most fundamentally, however, the rule against concurrent representations does

not compel a finding of a disqualifying conflict of interest where the concurrent

representation at issue is no longer ongoing.7 Courts prohibition of concurrent

representation of parties with adverse interests is rooted in the attorneys duty of

loyalty to each client and the concern that [j]oint representation of parties with

conflicting interests [will] impair[] each clients legitimate expectation of loyalty that

7 The Skadden law firm currently represents Abbott on unrelatedcorporate matters.



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his or her attorneys will devote their entire energies to [their] clients interests.

Burman, 186 Cal. App. 4th at 1355 (citation omitted); see also Gilbert v. Natl Corp.

for Housing Pships, 71 Cal. App. 4th 1240, 1256 (1999) (A client who learns that

his or her lawyer is also representing a litigation adversary, even with respect to amatter wholly unrelatedto the one for which counsel was retained, cannot long be

expected to sustain the level of confidence and trust in counsel that is one of the

foundations of the professional relationship.).

Because a clients confidence and trust in his counsels ability to advocate on

his behalf is no longer implicated when the attorney-client relationship has

terminated, no disqualifying conflict of interest exists when the concurrent

representation has ended. See, e.g., Pirelli Armstrong Tire Corp. Retiree Med.

Benefits Trust v. LaBranche & Co., 229 F.R.D. 395, 413 (S.D.N.Y. 2004) (As the

concurrent representation is not ongoing, no issue is presented here.); Shire Labs.

Inc. v. Nostrum Pharms., Inc., Civil Action No. 03-4436 (MLC), 2006 WL 2129482,

at *5 (D.N.J. July 26, 2006) ([T]here is no concurrent conflict because [counsel] is

not currently representing both Plaintiff and Defendant in the matter before this

Court or in another litigation.); MacArthur v. San Juan Cnty., NO. 2:00CV584K,

2001 WL 1806855, at *56 (D. Utah Mar. 6, 2001) (agree[ing] with counsel that

rule against concurrent representation applies only to conflicts between current

clients); Boston Scientific Corp. v. Johnson & Johnson Inc., 647 F. Supp. 2d 369,

373 (D. Del. 2009) (explaining that where counsels representation of plaintiffs

place[d] it in a position directly adverse to Wyeth, the conflict inquiry turns . . .

on whether Wyeth is currently [counsels] client).

8

The government does not

8 One exception to this general rule, which is not present here, is the so-called hot potato situation, in which a law firm terminates a representation in aneffort to cure a conflict. See, e.g.,State Farm Mut. Auto Ins. Co. v. Fed. Ins. Co., 72Cal. App. 4th 1422, 1431 (1999) (explaining that an attorney cannot avoid theautomatic disqualification rule applicable to concurrent representation by unilaterallyconverting a present client into a former client prior to the hearing on the motion fordisqualification). This principle applies only where an attorney . . . cur[es] thedual representation of clients by expediently severing the relationship with the

(cont'd)



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dispute that Skadden no longer represents AMO on the issues relevant here. Because

the concurrent representation is not ongoing, there is no disqualifying conflict

stemming from Skaddens past simultaneous representation of Mr. Mazzo and AMO.

See Pirelli, 229 F.R.D. at 413.9

3.1.1.2 Skaddens Successive Representation of Mr. Mazzoand AMO Does Not Give Rise to a DisqualifyingConflict of Interest.

The government next argues that Skaddens representation of Mr. Mazzo after

having represented AMO constitutes a disqualifying conflict of interest. (Supp. Br.

at 49.) [W]here a former client seeks to have a previous attorney disqualified from

serving as counsel to a successive client in litigation adverse to the interests of the

________________________

(cont'd from previous page)

preexisting client. See, e.g., W. Sugar Coop. v. Archer-Daniels-Midland Co., --- F.Supp. 3d ---, 2015 WL 690306, at *7 (C.D. Cal. Feb. 13, 2015); see also CQS ABS

Master Fund Ltd. v. MBIA Inc., No. 12 Civ. 6840(RJS), 2013 WL 3270322, at *11(S.D.N.Y. June 24, 2013) ([A] bona fide independent basis for terminating arepresentation does not trigger the disqualification requirement for concurrentrepresentations.). This exception is not implicated here.

9 The governments concurrent-representation argument fails for theadditional reason that Mr. Mazzos and AMOs interests are not adverse. Adversity

in the context of concurrent representation is found where an attorneysimultaneously represent[s] a client in one matter while representing another partysuing that same client in another matter. Certain Underwriters at Lloyds London v.

Argonaut Ins. Co., 264 F. Supp. 2d 914, 91819 (N.D. Cal. 2003). Mr. Mazzo andAMO have never opposed each other in litigation. Nor is the governmentssuggestion of a future suit between AMO and Mr. Mazzo based on Mr. Mazzospurported insider trading sufficient to find a disqualifying conflict here. See ExportDev. Corp. v. Uniforms for Indus., Inc., No. 88-CV-2496 (ARR), 1991 WL 10929, at*4 (E.D.N.Y. Jan. 25, 1991) (finding that moving partys speculation concerning afuture dispute does not establish that joint representation will adversely affect eitherclient in this litigation). Any suggestion of adversity, moreover, is contradicted byAbbotts continued employment of Mr. Mazzo for years following the AMOacquisition and its consistent support of his defense in both this criminal case and the

parallel SEC proceedings. The government relies on an isolated passage from JudgeNakazatos ruling on an assertion of work-product privilege as concluding, once andfor all, that AMO and Mr. Mazzo had adverse interests. (See, e.g., Supp. Br. at 49.)But Judge Nakazatos ruling does not support a finding of adversity, for at least threereasons. First, the ruling referred to adversity only in the context of the work-product doctrine, not a motion to disqualify. Thus the passage has no bearing on theissues before the Court. Second, Judge Nakazatos reasoningon an issue that wasnot briefed by the partiesif taken to its logical conclusion, would mean thatadversity between a corporation and its executives is automatically triggeredwhenever the government opens an inquiry into the corporations trading activities.Third, this Court is not bound by dicta from a magistrate judge in a different case.



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first client, the governing test requires that the client demonstrate a substantial

relationship between the subjects of the antecedent and current representations.

Flatt v. Superior Court, 9 Cal. 4th 275, 283 (1994). In cases of successive

representation, counsels duty to preserve client confidences precludes an attorneyfrom later agreeing to represent an adversary of the attorneys former client where

counsel provided legal advice and services to the former client on a legal issue

that is closely related to the legal issue in the present representation and failed to

obtain informed written consent from the former client waiving the conflict.

Cobra Solutions, 38 Cal. 4th at 847 (citation omitted).

In this case, Skaddens successive representation of Mr. Mazzo and AMO

does not constitute a disqualifying conflict under the rule against successive

representations. First, the rule is not even implicated here, in light of the fact that

AMO could not reasonably have assumed that information given to Skadden was

unknown to Mr. Mazzo, given his role as the CEO of AMO and chief negotiator of

the Abbott transaction. Second, even assumingarguendothat the rule might apply in

this case, AMO has consented to Skaddens continuing representation of Mr. Mazzo.

(a) AMO Could Not Reasonably Have Believed ThatMr. Mazzo Would Receive Confidential InformationFrom Skadden.

Where the potential conflict is one that arises from the successive

representation of clients with potentially adverse interests, the courts have

recognized that the chief fiduciary value jeopardized is that of client confidentiality.

Flatt, 9 Cal. 4th at 283. The conflict inquiry thus turns in large part on whether an

attorney possesses confidential information from the former client whose interestsare adverse to the current client and whom he represented in a substantially similar

matter. Although courts have adopted a presumption that an attorney in such a

situation possesses confidential information, that presumption applies only if the

subject of the prior representation put the attorney in a position in which confidences

material to the current representation would normally have been imparted to counsel.



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Cobra Solutions, 38 Cal. 4th at 847. In other words, the substantial relationship test

is not implicatedand no disqualifying conflict existsunless the attorney was in

a position where he could have received information that his former client might

reasonably have assumed the attorney would withhold from his present client.Christensen v. U.S. Dist. Ct. for Cent. Dist. Cal., 844 F.2d 694, 698 (9th Cir. 1988).

In Christensen, for instance, the Ninth Circuit applied this principle and

vacated the district courts order disqualifying a law firm (Wyman) from

representing the defendant. Id. at 695. Wyman had previously represented a

corporation (BHSL), and its current client (defendant Christensen) was a current

Wyman partner and former outside director of BHSL accused of mismanagement. Id.

at 69596. The Federal Savings and Loan Insurance Corporation (FSLIC), which

brought the action against former management groups of BHSL, sought to disqualify

Wyman from representing Christensen on the ground that he had previously

represented BHSL and was therefore barred from representing another client

(Christensen) in a position adverse to BHSL in substantially related litigation. Id.at

696.

Even assuming that the FSLIC could show adversity between BHSL and

Christensen and that Wyman had previously represented BHSL in similar matters,

the Ninth Circuit deemed those showings immaterial because the substantial

relationship testand, correspondingly, the rule against successive

representationcould not be invoked in the first instance. [T]he substantial

relationship test is inapplicable when the former client has no reason to believe that

information given to counsel will not be disclosed to the firms current client. Id.at699. Applying that principle to the facts of the case, the court held that, [d]ue to the

unique relationship between BHSL, Christensen, and Wyman, there are no BHSL

confidences that could be inappropriately disclosed by Wyman to Christensen. Id.

The court explained that BHSL necessarily knew that any information it gave to

Wyman would be conveyed to Christensen as a BHSL director and a senior partner



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in the law firm and, as a result, Christensen ha[d] access to any confidences

previously revealed by BHSL. Id.at 698;see also id.at 699 (BHSL . . . could not

have believed that any information it gave Wyman would not be revealed to

Christensen.). Disqualification would thus be futile in terms of furthering thepurpose of the rule. Id.at 698.10

California courts have consistently applied the rationale of Christensen to

deny motions to disqualify where there was no possibility that counsel possessed

confidential information related to the matter at issue not previously known by its

current client. See, e.g., Cal. Serv. Emps. Health & Welfare Trust Fund v. Advance

Bldg. Maint., No. C-06-3078 CW, 2009 WL 593785, at *6 (N.D. Cal. Mar. 4, 2009)

(concluding that the party moving to disqualify ha[s] failed to demonstrate a

likelihood that counsel could have obtained confidential information regarding [the

subject matter of the litigation] which is different than the information possessed by

[its current client]); Forrest v. Baeza, 58 Cal. App. 4th 65, 82 (1997) (explaining

that application of the former client rule would be meaningless where it is

impossible to conceive of confidential information [counsel] could have received

from the corporation that is different from information he received from [the

corporate officers]). Other courts have embraced these same principles. See, e.g.,

Allegaert v. Perot, 565 F.2d 246, 250 (2d Cir. 1987) ([B]efore the substantial

relationship test is even implicated, it must be shown that the attorney was in a

position where he could have received information which his former client might

10 The court in Christensen declined to express [an] opinion on the

situation where a firm attempts to represent an outside director who is nota memberof the firm in litigation against the corporation. 844 F.2d at 699 n.8. But Californiacourts later made clear that the Christensen rule applies where a director is not amember of the litigating firm. See Advance Bldg., 2009 WL 593785, at *2, *56(finding that CEO of company possessed same confidential information regardingthe information as company itself); Forrest, 58 Cal. App. 4th at 82 (same withrespect to officers and directors of company). And, in any event, Mr. Mazzo was notsimply an outside director of AMO, but rather its CEO and involved in its day-to-day management. See In re Syntex Corp. Sec. Litig., 855 F. Supp. 1086, 1100 (N.D.Cal. 1994) (By definition, outside directors do not participate in the corporationsday-to-day affairs.).



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reasonably have assumed the attorney would withhold from his present client.);

Gurniak v. Emilsen, 995 F. Supp. 2d 262, 273 (S.D.N.Y. 2014) (denying motion to

disqualify where, among other things, [d]efendant has not demonstrated that

[former client] could reasonably have assumed that [counsel] would withhold thisinformation from [current client], to whom [former client] apparently confided the

relevant information);Cohen v. Acorn Intl Ltd., 921 F. Supp. 1062, 1064 (S.D.N.Y.

1995) (denying defendants motion to disqualify where [defendant] ha[s] no basis

for believing that any informatio

Documents

USA v. JAMES V. MAZZO, DOUGLAS V. DECINCES, DAVID L. PARKER, AND F. SCOTT JACKSON