Rohm and Haas Co. v. Dow Chemical Co.

In 2007 and 2008, the law firm Wachtell, Lipton, Rosen & Katz (the firm) represented Dow Chemical Co. (defendant) in connection with terminating two executives and responding to a rumored takeover bid. The firm sent Dow its final bill for those services in June 2008 and did not provide Dow with further legal services. Meanwhile, in mid-2008 the firm began representing Rohm and Haas Co. (plaintiff) opposite Dow in negotiations of a confidentiality agreement and merger. Dow retained other attorneys who represented it during the merger negotiations and did not object to the firm representing Rohm. When Dow failed to complete the acquisition by the agreed deadline, Rohm sued Dow to enforce the merger. The firm represented Rohm in the lawsuit. Dow moved to disqualify the firm from conducting discovery against it and deposing Dow witnesses, claiming that Dow believed it was still a client of the firm and that the firm could not represent both Dow and Rohm at the same time. Dow also claimed the firm implicitly promised that it would represent Rohm in negotiations only and discontinue if litigation arose. In the alternative, Dow argued that the firm previously representing Dow in matters substantially related to the merger effectively prevented the firm from representing Rohm in the litigation without Dow’s consent. Dow contended that the resulting conflict of interest disqualified the firm from representing Rohm under the Delaware Rules of Professional Conduct and because the firm had access to sensitive information as Dow’s prior counsel. The firm countered that Dow was no longer its client and that it had not gained sensitive information from Dow during its prior representation.