Allegations Against Latham Fully Pled, Company Argues

, The Legal Intelligencer

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A Pennsylvania-based legal services management company said it doesn't have to give any more particulars just yet on its allegations against Latham & Watkins regarding misappropriation of trade secrets.

In its opposition to Latham & Watkins' motion to dismiss the trade-secrets suit, Mattern & Associates said its complaint against the law firm makes clear that the confidential and proprietary information at issue relates to the methods Mattern developed for law firms to best save costs on third-party support services.

"This description is clearly sufficient under the notice-pleading requirements," Mattern said in its response in Mattern & Associates v. Latham & Watkins in the Eastern District of Pennsylvania. "On multiple occasions, this court has squarely addressed this issue and determined that a claim for misappropriation of trade secrets need not be pleaded with particularity."

Mattern has alleged that Latham & Watkins engaged in conversations with Mattern about using the services company to help reduce vendor costs but ultimately chose another company with which Mattern alleges the law firm shared Mattern's proprietary information.

Mattern filed its suit in the Philadelphia Court of Common Pleas and Latham removed it to the Eastern District on Nov. 13. A week later the firm filed its motion to dismiss, arguing Mattern secured thousands of pages of documents from Latham & Watkins as part of pre-complaint discovery.

"Mattern has more than enough information to draft a complaint that would state what trade secrets it believes were misappropriated," the firm said in the motion to dismiss. "Instead, the best Mattern can manage is the naked assertion that 'Mattern's confidential and proprietary information' was misused."

Glen Mills, Pa.-based Mattern bills itself as a consulting firm that aids law firms and corporations in obtaining more favorable and competitive pricing from their support service providers.

In December 2011, Mattern and Latham & Watkins entered a nondisclosure agreement before discussing possible ways Mattern could assist the law firm in reducing its service provider costs. According to Mattern's motion to compel pre-complaint discovery in the case, Mattern gave Latham some of Mattern's intellectual property and confidential information on how it would accomplish the cost reductions. That information included Mattern's Nearsight Solution and Hardcost Pass Through Model, the company said in its court filings.

After reviewing Mattern's proposals, Latham decided not to engage the company's services, according to the complaint. Mattern said Latham instead chose to hire a competitor of Mattern's. Mattern said in its court filings that it has reason to believe Latham shared Mattern's confidential information with prospective support services providers as well as the competitor Latham ultimately hired.

Those providers included Creative Management Services, according to Mattern's court filings. CMS, according to its website, provides similar services to what Mattern's business supplies. According to the complaint, on June 21, 2012, Latham asked its current support service provider and a number of prospective providers to incorporate into their responses for Latham's RFP the information Mattern shared with Latham.

Mattern asked Latham to review the law firm's requests for proposals sent to various service providers to determine whether Mattern's confidential information was in fact used. According to Mattern's filings, Latham declined and Mattern filed a writ of summons against the firm in the Philadelphia Court of Common Pleas on Dec. 14, 2012. A complaint was filed in October 2013.

During the almost year between the filing of the writ and the complaint, the parties attempted to engage in pre-complaint discovery. According to Mattern's court filings, Latham refused to provide Mattern with any documents. Latham said in its court filings that it objected to the requests without knowing more about what the suit entailed. Mattern was seeking documents related to Mattern's proposal, any conversations Latham had with potential vendors regarding outsourcing support services, RFPs issued to vendors for support services and the responses to those RFPs, and documents between Latham and CMS regarding outsourcing Latham's support services, according to court papers.

After the Philadelphia trial court compelled pre-complaint discovery, Latham & Watkins provided more than 5,000 pages of documents, including RFPs, the firm said in its motion to dismiss.

Mattern is suing Latham for breach of contract, misappropriation and conversion of trade secrets, unjust enrichment and an accounting of what benefit Latham has received from allegedly using Mattern's confidential information. Mattern is asking the court to order Latham to return all of Mattern's documents and disgorge any savings it has or will receive from allegedly using the confidential information. The company is also seeking other unspecified damages as a result of the alleged activity, according to the complaint.

Nicholas Poduslenko and H. David Seidman of Obermayer Rebmann Maxwell & Hippel represent Mattern. Samantha Southall and Jack Stover of Buchanan Ingersoll & Rooney are outside counsel for Latham & Watkins. A request for comment from Poduslenko and a Latham spokeswoman were not returned.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.

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