<b>Counsel Concerns:</b> Fed Court Denies Client's Impleader Against Counsel

A magistrate for the U.S. District Court for the Central District of California decided that a copyright and trademark infringement defendant couldn't file an impleader action against his former lawyer for secondary or derivative liability. Zero Tolerance Entertainment Inc. v. Ferguson, CV 06-4132-RC. Zero Tolerance, a distributor of adult-oriented movies, sued Shaun Ferguson for publishing its content without authorization on Ferguson's Web site, adultsallowed.com. Ferguson stipulated to a permanent injunction at a court-supervised settlement conference at which he was represented by attorney Marc S. Colen.

After Tolerance later filed a supplemental complaint alleging that Ferguson “continued all of the infringing activities,” Ferguson filed a motion under Rule 14(a) of the Federal Rules of Civil Procedure for permission to file an impleader against his now-former attorney Colen. Ferguson claimed that Colen hadn't told him that he was violating the settlement agreement. Ferguson sought damages for Colen's alleged breach of contract, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and a claim of professional negligence.

The federal magistrate noted in denying the impleader action: “Although these claims may be tangentially 'related to' plaintiff's copyright and trademark infringement claims against defendant Ferguson, they are not derivative of those claims. To the contrary, the nature of these claims [against Colen] is 'entirely different and independent' from the claims plaintiff [Zero Tolerance] raises.”

The magistrate further decided that Ferguson had no legal basis to proceed with indemnification and contribution claims against Colen. The magistrate added as to Zero Tolerance's trial against Ferguson that “the impleader raises new issues pertaining to the standard of legal practice and breach of contract, rather than copyright and trademark infringement; thus, it is indisputable that impleader would complicate the issues at trial.”

A magistrate for the U.S. District Court for the Central District of California decided that a copyright and trademark infringement defendant couldn't file an impleader action against his former lawyer for secondary or derivative liability. Zero Tolerance Entertainment Inc. v. Ferguson , CV 06-4132-RC. Zero Tolerance, a distributor of adult-oriented movies, sued Shaun Ferguson for publishing its content without authorization on Ferguson's Web site, adultsallowed.com. Ferguson stipulated to a permanent injunction at a court-supervised settlement conference at which he was represented by attorney Marc S. Colen.

After Tolerance later filed a supplemental complaint alleging that Ferguson “continued all of the infringing activities,” Ferguson filed a motion under Rule 14(a) of the Federal Rules of Civil Procedure for permission to file an impleader against his now-former attorney Colen. Ferguson claimed that Colen hadn't told him that he was violating the settlement agreement. Ferguson sought damages for Colen's alleged breach of contract, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and a claim of professional negligence.

The federal magistrate noted in denying the impleader action: “Although these claims may be tangentially 'related to' plaintiff's copyright and trademark infringement claims against defendant Ferguson, they are not derivative of those claims. To the contrary, the nature of these claims [against Colen] is 'entirely different and independent' from the claims plaintiff [Zero Tolerance] raises.”

The magistrate further decided that Ferguson had no legal basis to proceed with indemnification and contribution claims against Colen. The magistrate added as to Zero Tolerance's trial against Ferguson that “the impleader raises new issues pertaining to the standard of legal practice and breach of contract, rather than copyright and trademark infringement; thus, it is indisputable that impleader would complicate the issues at trial.”