United States District Court, N.D. Texas, Dallas Division
ASGAARD FUNDING LLC d/b/a THE AASGAARD COMPANY and THE AASGAARD COMPANY, a Texas Partnership, Plaintiffs,
REYNOLDSSTRONG LLC d/b/a BARBELL LOGIC and BARBELL LOGIC ONLINE COACHING, Defendants.
MEMORANDUM OPINION AND ORDER
J. BOYLE, UNITED STATES DISTRICT JUDGE
the Court is Defendant ReynoldsStrong LLC's Motion to
Disqualify Brodie M. Butland, Esq., Porter, Wright, Morris
& Arthur, LLP (Porter Wright), and, by implication, The
Law Offices of Joe B. Steimel, P.C. (Steimel) (Doc. 19). For
the reasons that follow, the Court GRANTS
the motion as to Mr. Butland and Porter Wright, but
DENIES the motion WITHOUT
PREJUDICE as to Steimel.
seeks to disqualify Mr. Butland, his law firm Porter Wright,
and local counsel Steimel from representing Plaintiffs
Asgaard Funding LLC and The Aasgaard Company in this case.
This case was originally filed by just Asgaard Funding
against ReynoldsStrong, alleging (1) trademark infringement
in violation of 15 U.S.C. § 1114; (2) unfair competition
in violation of 15 U.S.C. § 1125(a); (3) trademark
dilution in violation of 15 U.S.C. § 1125(c); (4)
violation of Texas's Deceptive Trade Practices Act; and
(5) breach of contract. Doc. 1, Compl., 42-51. The dispute stems
from an alleged breach of a licensing agreement signed by The
Aasgaard Company and ReynoldsStrong in November 2016, wherein
ReynoldsStrong was granted the right to use Aasgaard's
“Starting Strength” trademarks under certain
conditions. Id. ¶¶ 45-46.
December 2015, Mark Reynolds, the sole member of
ReynoldsStrong, asked Mr. Butland to prepare a liability
waiver in connection with ReynoldsStrong's business and a
memorandum outlining Missouri's regulation of dietetics.
Doc. 19, Def.'s Mot. to Disqualify (“Def.'s
Mot.”), 2-3; Doc. 25, Pl.'s Opp. to Mot. to
Disqualify (“Pl.'s Resp.”), 2-3. On January
4, 2016, Mr. Butland sent Mr. Reynolds an engagement letter.
Doc. 19, Def.'s Mot., 2-3; Doc. 25, Pl.'s Resp., 3.
The scope of the representation included drafting a waiver
and release agreement for Mr. Reynolds's business,
drafting the Missouri regulation memorandum, and reviewing
ReynoldsStrong's documents it had sent to clients for
compliance with Missouri law. Doc. 25, Pl.'s Resp., 3.
The engagement letter was signed the next day. Doc. 26,
Pl.'s App., 64. The letter explained that its terms and
conditions would “also apply to any additional legal
services outside the initial scope of our representation that
you [ReynoldsStrong/Mr. Reynolds] request and that we [Porter
Wright] agree to provide.” Id. at 61. On
January 29, 2016, Mr. Butland produced the liability waiver
and memorandum. Id. at 65-95.
October 19, 2016, Mark Rippetoe, majority owner of Aasgaard,
asked Mr. Butland if he and his law firm could draft “a
trademark and web domain license agreement between”
Aasgaard and ReynoldsStrong/Mr. Reynolds, in which
ReynoldsStrong could use Aasgaard's “Starting
Strength” trademarks in connection with its online
fitness coaching business. Doc. 25, Pl.'s Resp., 5. On
October 24, 2016, Mr. Butland allegedly spoke with both Mr.
Rippetoe and Mr. Reynolds to notify the parties that he
previously represented Mr. Reynolds in January 2016.
Id. On the same day, Mr. Butland emailed both
parties to memorialize the phone calls. Id. at 6.
The email confirmed that Mr. Rippetoe had asked Mr. Butland
and Porter Wright to draft a licensing agreement between
Aasgaard and Mr. Reynolds. Doc. 26, Pl.'s App., 99. The
email also confirmed that Mr. Butland had spoken to both
parties about a potential conflict “in light of [Mr.
Reynold's] former attorney-client relationship
with” Mr. Butland, that both parties had no objections,
and that Mr. Butland saw no ethical issue in his firm
drafting the licensing agreement. Id. Mr. Reynolds
responded, “No objections here.” Id.
same day that this email was sent (October 24, 2016), Mr.
Reynolds emailed Mr. Butland separately to ask him to draft a
non-compete agreement for ReynoldsStrong's personnel in
connection with its online fitness coaching business. Doc.
19, Def.'s Mot., 3-4; Doc. 25, Pl.'s Resp., 9. Mr.
Reynolds attached his own first draft of the agreement. Doc.
19, Def.'s Mot., 4; Doc. 25, Pl.'s Resp., 9. On
November 2, Mr. Reynolds asked Mr. Butland for an update on
the non-compete agreement. Doc. 17, Def.'s App., 85. Mr.
Butland responded that he had to speak with Porter
Wright's ethics counsel to determine whether there was a
conflict in drafting the non-compete agreement, as the firm
was currently drafting Aasgaard's licensing agreement
with ReynoldsStrong. Doc. 19, Def.'s Mot., 5; Doc. 25,
Pl.'s Resp., 9-10. Mr. Reynolds responded with a copy of
his Starting Strength Online Coaching (SSOC) business plan.
Doc. 19, Def.'s Mot., 5.
November 10, Mr. Butland emailed Mr. Reynolds to explain that
there was no conflict because the license agreement and
non-compete agreement were “really two different
transactions, although they of course relate to a similar
subject matter.” Doc. 26, Pl.'s App., 127. Mr. Reynolds
responded that he “[a]pproved” of the dual
representation. Id. On November 17, Mr. Butland sent
another engagement letter to ReynoldsStrong, that explained
that Mr. Butland would “draft a noncompetition
agreement for trainers that [Mr. Reynolds was] hiring as part
of online strength coaching services.” Id. at
final interactions between Mr. Butland and Mr. Reynolds are
notable. First, in January 2018, Mr. Reynolds again asked Mr.
Butland for information regarding state dietetics laws. Doc.
19, Def.'s Mot., 7; Doc. 25, Pl.'s Resp., 12 n. 6.
There was no formal engagement letter for this communication;
although Mr. Reynolds refers to this information as
“legal advice, ” Doc. 19, Def.'s Mot., 7, Mr.
Butland believes this was an “informal request”
that “took less than 5 minutes to address.” Doc.
25, Pl.'s Resp., 12 n. 6. Second, on March 7, 2018, Mr.
Reynolds contacted Mr. Butland because Mr. Reynolds suspected
that a former employee was violating the non-compete
agreement. Doc. 19, Def.'s Mot., 8; Doc. 25, Pl.'s
Resp., 12-13. No. engagement letter was created for this
interaction; Mr. Butland alleges this was because of
“the urgency of the matter.” Doc. 25, Pl.'s
Resp., 12-13. Neither party has alleged any further
attorney-client-like communications since.
30, 2019, Asgaard Funding LLC filed suit against
ReynoldsStrong, with Mr. Butland as one of Asgaard's
lawyers. See Doc. 1, Compl.; Doc. 6, Electronic
Order. ReynoldsStrong subsequently brought this motion (Doc.
19) to disqualify Mr. Butland, Porter Wright, and Steimel
(collectively, Counsel). As this issue is fully briefed, the
Court addresses Defendant's motion.
to disqualify are substantive in nature and are thus decided
under federal law. FDIC v. U.S. Fire Ins. Co., 50
F.3d 1304, 1312 (5th Cir. 1995). “When considering
motions to disqualify, courts should first look to the local
rules promulgated by the local court itself, ” In
re ProEducation Int'l, Inc., 587 F.3d 296, 299 (5th
Cir. 2009) (citation and quotation marks omitted), although
“[l]ocal rules are not the ‘sole' authority
governing motions to disqualify counsel.” U.S. Fire
Ins. Co., 50 F.3d at 1312. For example, attorneys
practicing in the Northern District of Texas are subject to
the Texas Disciplinary Rules of Professional Conduct. See
John Crane Prod. Sols., Inc. v. R2R & D, LLC, 2012
WL 3453696, at *2 (N.D. Tex. Aug. 14, 2012) (citing N.D. Tex.
Civ. R. 83.8(e)). Moreover, the Fifth Circuit recognizes the
American Bar Association (ABA)'s Model Rules of
Professional Conduct as the ...