Rh Answering Brief In Opposition To Motion To Disqualify

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE ––––––––––––––––––––––––––––––––––––––––––––– x ROHM AND HAAS COMPANY, Plaintiff, v.

: : : C.A. No. 4309-CC

THE DOW CHEMICAL COMPANY and RAMSES ACQUISITION CORP.,

: :

Defendants. : ––––––––––––––––––––––––––––––––––––––––––––– x

PLAINTIFF’S ANSWERING BRIEF IN OPPOSITION TO DEFENDANTS’ MOTION TO DISQUALIFY WACHTELL, LIPTON, ROSEN & KATZ FROM CONDUCTING DISCOVERY AGAINST DOW AND EXAMINING DOW WITNESSES

OF COUNSEL: WACHTELL, LIPTON, ROSEN & KATZ 51 West 52nd Street New York, New York 10019 (212) 403-1000 ROHM AND HAAS COMPANY Robert A. Lonergan 100 Independence Mall West Philadelphia, Pennsylvania 19106 (215) 592-3000

Dated: February 9, 2009

CONNOLLY BOVE LODGE & HUTZ LLP Collins J. Seitz, Jr. (No. 2237) Henry E. Gallagher, Jr. (No. 495) David E. Ross (No. 5228) Bradley R. Aronstam (No. 5129) The Nemours Building 1007 North Orange Street P.O. Box 2207 Wilmington, Delaware 19899 (302) 658-9141 Attorneys for Plaintiff Rohm and Haas Company

TABLE OF CONTENTS Page TABLE OF AUTHORITIES ......................................................................................................... iii PRELIMINARY STATEMENT .................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................. 3 A.

Wachtell’s prior representation of Dow.................................................................. 3

B.

Wachtell’s representation of Rohm and Haas......................................................... 4

C.

Dow engages in ex parte contacts with the FTC in blatant violation of its obligations under the Merger Agreement ............................................................... 6

D.

The nature and scope of the present litigation ........................................................ 8

ARGUMENT................................................................................................................................. 9 DOW’S MOTION TO DISQUALIFY IS BOTH UNFOUNDED AND UNTIMELY .................................................................................... 9 A.

Dow bears a very heavy burden on this motion...................................................... 9

B.

Dow is not a current Wachtell client..................................................................... 10

C.

Wachtell’s representation of Rohm and Haas does not violate Rule 1.9.............. 15 1.

The nature and scope of the prior representation of Dow and of the current litigation are entirely distinct........................................................ 16

2.

Wachtell received no confidences from Dow that it could use to Dow’s detriment in this proceeding.......................................................... 16

D.

Wachtell’s continuing representation of Rohm and Haas will not undermine the fairness and integrity of the proceedings, but hamstringing Rohm and Haas’s ability to use its chosen counsel will ....................................... 19

E.

Dow’s delay in raising the purported conflict is in itself a sufficient basis for denying this motion......................................................................................... 22

i

1.

Dow acquiesced in and consented to Wachtell’s representation of Rohm and Haas by failing to express an objection until after litigation began.......................................................................................... 23

2.

Dow cannot excuse its failure to make a timely objection by claiming that it was presented with a fait accompli.................................. 24

CONCLUSION............................................................................................................................. 25

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TABLE OF AUTHORITIES Cases:

Page

Audio Jam v. Fazelli, 1995 WL 1791087 (Del. Ch. Aug. 17, 1995) ........................................................................... 10 Avacus Partners, L.P. v. Brian, 1990 WL 27538 (Del. Ch. Mar. 9, 1990).................................................................................. 21 Deemer Steel Casting Co. v. E. Coast Erectors, Inc., 1990 WL 143840 (Del. Ch. Sept. 28, 1990) ............................................................................. 19 Del. Trust Co. v. Brady, 1988 WL 94741 (Del. Ch. Sept. 14, 1988) ............................................................................... 11 Del-Chapel Assocs. v. Ruger, 2000 WL 488562 (Del. Ch. Apr. 17, 2000) ................................................................................ 9 Deptula v. Steiner, 2003 WL 23274846 (Del. Super. Dec. 15, 2003) ................................................................. 9 n.6 Eli Lilly & Co. v. Genentech Inc., 17 U.S.P.Q.2d 1531 (S.D. Ind. July 17, 1990) ................................................................... 23, 24 Elonex I.P. Holdings, Ltd. v. Apple Computer, Inc., 142 F. Supp. 2d 579 (D. Del. 2001).................................................................. 9 n.6, 20, 21 n.13 Express Scripts, Inc. v. Crawford, 2007 WL 417193 (Del. Ch. Jan. 25, 2007)............................................................. 10, 20, 21, 22 Hendry v. Hendry, 2005 WL 3359078 (Del. Ch. Dec. 1, 2005)....................................................................... passim IMC Global, Inc. v. Moffett, 1998 WL 842312 (Del. Ch. Nov. 12, 1998) ....................................................................... 10, 19 In re Appeal of Infotechnology, Inc., 582 A.2d 215 (Del. 1990) ........................................................................................... 2, 9, 10, 24 In re Appeal of Dunlap, 2008 WL 2415043 (Del. May 6, 2008)................................................................................. 1, 10 J.E. Rhoads & Sons, Inc. v. Wooters, 1996 WL 41162 (Del. Ch. Jan. 26, 1996)........................................................................... 24, 25 Kanaga v. Gannett Co., 1993 WL 485926 (Del. Super. Oct. 21, 1993).......................................................................... 10

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Kenton v. Bellevue Four, Inc., 1999 WL 463684 (Del. Super. Apr. 26, 1999) ......................................................................... 23 Manchester v. Narrangansett Capital, Inc., 1989 WL 125190 (Del. Ch. Oct. 19, 1989) .............................................................................. 16 McAllister v. Kallop, 1993 WL 205037 (Del. Ch. June 8, 1993)................................................................................ 20 Nemours Found. v. Gilbane, 632 F. Supp. 418 (D. Del. 1986)....................................................................................... 21 n.13 Postorivo v. AG Paintball Holdings, Inc., 2008 Del. Ch. LEXIS 17 (Del. Ch. Feb. 7, 2008)..................................................................... 12 Sanchez-Caza v. Estate of Whetstone, 2004 WL 2087922 (Del. Super. Sept. 16, 2004) ............................................................... passim Satellite Fin. Planning Corp. v. First Nat’l Bank of Wilmington, 652 F. Supp. 1281 (D. Del. 1987) ....................................................................................... 16-17 SBC Interactive, Inc. v. Corporate Media Partners, 1997 WL 770715 (Del. Ch. Dec. 9, 1997)............................................................................ 1, 11 Unanue v. Unanue, 2004 WL 602096 (Del. Ch. Mar. 25, 2004)....................................................................... passim Zirn v. VLI Corp., 1990 WL 119685 (Del. Ch. Aug. 13, 1990) ............................................................................. 12 Zirn v. VLI Corp., 1989 WL 79963 (Del. Ch. July 17, 1989)................................................................................. 13 Rules: Del. Lawyers’ R. Prof’l Conduct 1.7 & cmt. [7] ............................................................... 10-11, 12 Del. Lawyers’ R. Prof’l Conduct 1.9 & cmt. [3] .................................................................... 15, 16 Other Authorities: 7 Am. Jur. 2d ATTORNEYS AT LAW § 137 (2008) ......................................................................... 11 Matthew F. Boyer, In the Wake of Infotechnology: Stricter Scrutiny of Attorney Disqualification Motions, 22-Winter DEL. LAW. 16 (2005) ...................................................... 9 Charles W. Wolfram, Former-Client Conflicts, 10 GEO. J. LEGAL ETHICS 677 (1997) ....................................................................................................................................... 17

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Rohm and Haas Company (“Rohm and Haas”) respectfully submits this brief in opposition to Dow’s motion to disqualify its chosen counsel, Wachtell, Lipton, Rosen & Katz (“Wachtell”), from fully representing Rohm and Haas in this litigation. Submitted with this brief are the affidavits of Robert A. Lonergan, Martin Lipton, Daniel A. Neff, Marc Wolinsky, Jonathan M. Moses and Gail K. Edelman, to which the Court is respectfully referred. PRELIMINARY STATEMENT Dow’s motion to disqualify Wachtell clearly fails the stringent tests applied in our courts where disqualification of counsel is sought. These motions always carry with them the risk that they are being made for tactical purposes; this is especially true in expedited proceedings involving sophisticated litigants. Here, Dow has entirely failed to show either that it is a current client of Wachtell, or that the prior Wachtell engagement involved “the same or a substantially related matter” such that there is a “substantial risk” that the information Wachtell obtained from Dow would “materially advance” Rohm and Haas’s position here. Hendry v. Hendry, 2005 WL 3359078, at *1 (Del. Ch. Dec. 1, 2005). Dow does not even cite the legal standard, and has entirely failed to carry its burden to show a conflict by clear and convincing evidence. In re Appeal of Dunlap, 2008 WL 2415043, at *1 (Del. May 6, 2008) The notion that Dow is currently a Wachtell client is patently frivolous. The claim is based on the fact that Dow’s Assistant General Counsel received an automated e-mail form asking him to confirm his mailing address and the fact that Dow’s General Counsel is on an e-mail distribution list for legal commentaries. Simply put, these are not the kind of communications that would “create a reasonable expectation” on Dow’s part that Wachtell was representing its interests at the very same time that it was negotiating against Dow on behalf of Rohm and Haas. SBC Interactive v. Corporate Media Partners, 1997 WL 770715, at *4 (Del. Ch. Dec. 9, 1997) (emphasis added).

Dow’s claim that Wachtell should be disqualified under the Rule of Professional Conduct governing conflicts with former clients carries no more weight. Dow’s argument is that its “transformative strategy” — a strategy that Dow has touted publicly and prominently since at least 2006 — “lies at the very heart of the instant litigation.” Dow Br. 11-12. 1 That claim strains credulity. This is a breach-of-contract case where the defendant admits that it has breached the contract. The issue for trial is whether events that occurred after the contract was signed allow Dow to avoid specific performance despite the fact that Dow agreed that Rohm and Haas would be entitled to that remedy. Indeed, it is Dow that trumpets repeatedly that this case is about what has happened in the last forty-five days. Direct quote: “For Dow, Rohm and Haas, and the Merger, the world changed beginning December 28.” Answer, p. 13 (emphasis added). Any secret strategic thinking two or three years ago that started Dow down the long path to buying Rohm and Haas is not relevant to this case. Finally, the lack of persuasive merit of Dow’s motion, and its fundamentally tactical nature, is demonstrated by Dow’s own conduct. Dow has of course known that Rohm and Haas was represented by Wachtell from June 2008 onwards. Dow’s counsel sat opposite Wachtell at the negotiating table. But never in the course of these inherently adversarial negotiations, or in the months of interactions that followed, did Dow invoke the conflict it relies upon now. Time and again, the courts of this State have rejected disqualification motions deployed as “procedural weapons” for “mere tactical gain.” In re Appeal of Infotechnology, Inc., 582 A.2d 215, 220-21 (Del. 1990). Dow’s motion is meritless, tactically motivated, and untimely. It should be denied. 1

Memorandum Of Law In Support Of Dow’s Motion To Disqualify Wachtell, Lipton, Rosen & Katz From Conducting Discovery Against Dow And Examining Dow Witnesses, cited herein as “Dow Br.”

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STATEMENT OF FACTS A.

Wachtell’s prior representation of Dow Wachtell was asked by Dow to provide advice with respect to its takeover de-

fenses in February 2007. At that time, Martin Lipton sent an internal e-mail to Wachtell’s New Matter Committee that, as Dow points out, said Wachtell’s representation of Dow was “continuing.” 2 Mr. Lipton proceeded to advise Dow on takeover defenses and certain other confidential matters unrelated to the acquisition of Rohm and Haas. Mr. Lipton last recorded time spent on Dow matters in September 2007. Lipton Aff. ¶¶ 2-3. In April 2007, Wachtell’s representation of Dow expanded to include the controversy surrounding two Dow executives, J. Pedro Reinhard and Romeo Kreinberg, whose employment was terminated after Dow learned that they were attempting to arrange an LBO of the company without the authorization or knowledge of Dow’s board of directors. Lipton Aff. ¶ 2. Jonathan Moses, a litigation partner at Wachtell, led a team that conducted an internal investigation into Reinhard’s and Kreinberg’s activities, provided advice with respect to litigation between the executives and Dow (although Wachtell did not appear as counsel to Dow in that litigation), and responded to inquiries from the SEC concerning the episode. Wachtell’s work on these matters was substantially concluded by January 2008. Moses Aff. ¶¶ 2-3. 3

2

This e-mail describing the then-representation as “continuing” was not sent to Dow. It was produced by Wachtell in response to a third-party subpoena and provided to Dow’s counsel in connection with the litigation in which the e-mail was produced. Moses Aff. ¶ 6.

3

After January 2008, Wachtell performed only incidental work arising out of the Kreinberg/Reinhard affair, mostly consisting of responding to a subpoena served on Wachtell by Kreinberg. Moses Aff. ¶ 4. The litigation brought by Reinhard and Kreinberg was settled on June 2, 2008. Moses Aff. Ex. A.

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In the course of the litigation team’s work, Mr. Moses and one associate were given password access to a database of confidential Dow documents, and Mr. Moses was given access to Messrs. Reinhard’s and Kreinberg’s e-mails. Moses Aff. ¶ 8. No Wachtell attorney has accessed the database or the e-mails since 2007. Moses Aff. ¶ 8. Wachtell has not performed any work for Dow since June 2008. The last bill to Dow, sent on June 20, 2008, was “[f]or services from November 1, 2007 to May 31, 2008 in connection with Reinhard/Kreinberg litigation” and totaled $65,000. Moses Aff. Ex. B. Of the “in excess of $2,000,000” that Dow says it paid Wachtell in “2007 and 2008” (Stuart Aff. ¶ 4), $65,000 of that sum was billed in 2008. Moses Aff. ¶ 5. B.

Wachtell’s representation of Rohm and Haas Rohm and Haas retained Wachtell in October 2007 to provide advice in connec-

tion with Rohm and Haas’s consideration of its strategic alternatives. Neff Aff. ¶ 2; Lonergan Aff. ¶ 2. In June 2008, Rohm and Haas decided to conduct an auction process. Wachtell represented Rohm and Haas throughout the auction process, including in the negotiation of the initial confidentiality agreement with Dow, an agreement that included substantive terms restricting Dow’s conduct and rights including in the event its bid did not succeed. Neff Aff. Ex. A. Wachtell also represented Rohm and Haas in the negotiation of the Merger Agreement. Many aspects of both the confidentiality agreement and the Merger Agreement were vigorously negotiated; contrary to the suggestion in Dow’s brief (p. 14), price was not the only focus of the negotiation. Lonergan Aff. ¶ 3; Neff Aff. ¶ 3. Throughout these negotiations, Wachtell regularly interacted with Dow and its counsel and vigorously represented its client, Rohm and Haas. Dow never suggested to either Wachtell or Rohm and Haas that there was any supposed conflict. Lonergan Aff. ¶ 3; Neff Aff. ¶ 3.

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On two occasions during negotiations in late June and early July, Charles Kalil, General Counsel of Dow, telephoned Mr. Lipton. On the first occasion, Mr. Kalil wanted to address an issue that had arisen in the negotiation of the confidentiality agreement; on the second, Mr. Kalil complained about the manner in which Wachtell was conducting the negotiations. Lipton Aff. ¶ 5. Both times Mr. Lipton made clear to Mr. Kalil that Wachtell was representing Rohm and Haas, that Mr. Lipton was not involved in the negotiations, and that Mr. Lipton would not discuss the matter with him. Lipton Aff. ¶ 5. On neither occasion did Mr. Kalil object to Wachtell’s representation of Rohm and Haas or suggest that there was a conflict. Lipton Aff. ¶ 5. In the months after the Merger Agreement was signed, Dow and its counsel continued to deal regularly with Wachtell on diligence, antitrust and other matters. Neff Aff. ¶ 4; Lonergan Aff. ¶ 4. And again, throughout these pre-closing activities, Dow never raised any concern about Wachtell’s representation of Rohm and Haas. Neff Aff. ¶ 4; Lonergan Aff. ¶ 4. Beginning in November 2008, Dow began to make requests for further detailed due diligence about a variety of topics. Dow indicated that the information it was seeking to gather was “not intended for integration planning purposes,” but instead was part of Dow’s “due diligence against the representations and warranties” of the Merger Agreement. Neff Aff. ¶ 5, Ex. B. During a November 25, 2008 call among Dow, Dow’s counsel, Rohm and Haas, and Wachtell, Dow again stated that this due diligence was not part of integration planning, but was intended to assess the accuracy of Rohm and Haas’s representations and warranties review. Since the closing of the Merger was conditioned upon the material accuracy of these representations and warranties (as provided in Section 6.3(a)(i) of the Merger Agreement), it was plain that Dow’s interest in testing the accuracy of Rohm and Haas’s representations was adverse to the

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interests of Rohm and Haas. Wachtell represented Rohm and Haas throughout this process. And once again, Dow never suggested that Wachtell had a conflict. Neff Aff. ¶ 6. In December 2008, Andrew Liveris, Chairman and Chief Executive of Dow, called Mr. Lipton. Lipton Aff. ¶ 7. Mr. Liveris said that Mr. Kalil had told him that Mr. Lipton could not speak to him (or words to that effect), but that he, Mr. Liveris, would nonetheless like to talk about the Rohm and Haas transaction. Lipton Aff. ¶ 7. Mr. Lipton, as he had done with Mr. Kalil, told Mr. Liveris that he could not discuss the matter with him. Lipton Aff. ¶ 7.4 C.

Dow engages in ex parte contacts with the FTC in blatant violation of its obligations under the Merger Agreement. On December 31, 2008, Rohm and Haas and Wachtell first learned that, in viola-

tion of the Merger Agreement, Dow had made at least one ex parte telephone call to the Federal Trade Commission (“FTC”) seeking to delay receipt of FTC clearance of the Merger. Lonergan Aff. ¶ 7; Neff Aff. ¶ 7. Wachtell made clear that Rohm and Haas believed Dow had breached the Merger Agreement. Id. Then, on January 8, 2009, Rohm and Haas learned that Dow had in fact engaged in a series of ex parte contacts with the FTC seeking delay of the agency’s clearance of the Merger, including ex parte visits by Mr. Liveris with three FTC commissioners. Lonergan Aff. ¶ 8; Neff Aff. ¶ 8. On that day, Wachtell again vigorously objected to Dow’s conduct. Id.

4

Mr. Kalil states in his affidavit that Mr. Lipton spoke to Mr. Liveris “throughout 2008” without specifying the subject matter of those conversations. Why Mr. Kalil recites this hearsay in an affidavit as opposed to Mr. Liveris is readily explained: Mr. Liveris is a member of the Citigroup Board of Directors, and Mr. Lipton was advising the Citigroup Board. In connection with that advice, Mr. Lipton had a number of conversations with directors of Citigroup, including Mr. Liveris, throughout 2008. None of those conversations involved the provision of legal advice to Dow. Lipton Aff. ¶¶ 8-9.

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Only then, on January 9, at a meeting between Daniel Neff and Stephanie Seligman of Wachtell, and Dow’s transactional counsel from Shearman & Sterling, did Dow hint at any purported issue with Wachtell’s representation of Rohm and Haas. Lonergan Aff. ¶ 8; Neff Aff. ¶ 9. At that meeting, the Wachtell lawyers objected to Dow’s ex parte campaign to delay FTC clearance, made clear that Dow’s conduct violated the Merger Agreement and asked for an assurance that Dow would not seek further delay of FTC clearance, an assurance that was not given at that time. Neff Aff. ¶ 9. At the conclusion of that meeting, John Marzulli, a Shearman & Sterling partner, stated that he had been asked by Mr. Kalil to ask whether Rohm and Haas had retained separate litigation counsel. Id. Mr. Neff responded that Wachtell had analyzed the issue and had determined that Wachtell would be able to represent Rohm and Haas in litigation against Dow, and that Rohm and Haas therefore did not intend to retain separate litigation counsel. Id. Not another word was heard from Dow on the subject until January 26, the day that suit was filed. Wachtell confirmed to Dow’s counsel before the filing of this motion that, with one exception that did not jeopardize Dow’s client confidences, no Wachtell attorney who has worked on a matter in which Wachtell represented Dow has had any substantive communication (whether written or oral) with any Wachtell attorney working on this lawsuit with respect to: (a) the Rohm and Haas v. Dow lawsuit, before or after the lawsuit was filed, other than in relation to the instant disqualification issue; or (b) the facts relevant to the Rohm and Haas v. Dow matter. Wolinsky Aff. Ex. B; see also Lipton Aff. ¶ 10; Moses Aff. ¶ 11. 5

5

The one exception is that on two separate occasions totaling 2.7 hours, Paul Rowe advised other Wachtell litigators handling the Reinhard/Kreinberg matter with respect to discrete issues of Delaware law. Mr. Rowe did no further work on Dow matters, was not privy to privileged communications respecting Dow’s corporate strategy or any other non-public (footnote continued)

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D.

The nature and scope of the present litigation The premise of Dow’s claim of a conflict is its contention that privileged informa-

tion about its “transformative strategy” constitutes the “factual predicate” of this case. Dow Br. 11-12. But the pleadings make clear that this case turns solely on Dow’s refusal to close the Merger and whether Rohm and Haas is entitled to an order of specific performance to remedy that breach. See Compl. ¶¶ 1-5, 41-50. Nothing in the Complaint puts Dow’s historical “transformative strategy” at issue. Dow’s Answer does not change this. To the contrary, each of Dow’s defenses relies on what Dow characterizes as the “sudden, historic, unforeseen and unforeseeable events of the past 45 days.” Answer at pp. 59-60; see also, e.g., Answer ¶ 23 (pleading that “a confluence of dramatic and unforeseeable shocks” that developed after December 28 “cast a dark shadow of uncertainty” over the Merger); id. at ¶ 44 (“Only when the Kuwaiti entities unexpectedly purported to reverse their approval of the K-Dow transaction in late December 2008 and failed to close, in combination with the contemporaneous and subsequent severe deterioration of the credit markets and industry-wide financial situation, was the viability of the Merger and Dow’s ability to close threatened.”). Mr. Liveris, speaking on an earnings call on February 3, 2009, the same day that Dow filed its Answer, pithily summed up Dow’s case: “December changed everything.” Wolinsky Aff. Ex. I at 10.

(footnote continued)

information concerning Dow, and has at no time had any contact with Dow personnel in connection with the Reinhard/Kreinberg or any other matter. Wolinsky Aff. Ex. B. Dow does not cite Mr. Rowe’s activity as a basis for its motion.

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ARGUMENT DOW’S MOTION TO DISQUALIFY IS BOTH UNFOUNDED AND UNTIMELY. A.

Dow bears a very heavy burden on this motion. Disqualification motions are generally disfavored “because they often are filed for

tactical reasons rather than bona fide concerns about client loyalty,” Sanchez-Caza v. Estate of Whetstone, 2004 WL 2087922, at *4 (Del. Super. Sept. 16, 2004), and because “a litigant should, as much as possible, be able to use the counsel of his choice.” Unanue v. Unanue, 2004 WL 602096, at *2 (Del. Ch. Mar. 25, 2004). The Delaware Supreme Court has counseled the utmost caution in granting a motion to disqualify, noting that “the purpose of the Rules [of Professional Conduct] can be subverted when they are invoked by opposing parties as procedural weapons.” Infotechnology, 582 A.2d at 220. 6 Dow claims that “disqualification is favored in close cases,” citing Del-Chapel Assocs. v. Ruger, 2000 WL 488562, at *5 (Del. Ch. Apr. 17, 2000). With respect, Del-Chapel misstated the law of disqualification in Delaware. Since the Delaware Supreme Court’s decision in Infotechnology, “doubts are now resolved against, rather than in favor of disqualification.” Matthew F. Boyer, In the Wake of Infotechnology: Stricter Scrutiny of Attorney Disqualification Motions, 22-Winter DEL. LAW. 16, 16 (2005).

6

See also, e.g., Deptula v. Steiner, 2003 WL 23274846, at *1 (Del. Super. Dec. 13, 2003) (“The Court must be wary so as to prevent motions to disqualify from being used as just another weapon in the litigation arsenal.”); Elonex I.P. Holdings, Ltd. v. Apple Computer, Inc., 142 F. Supp. 2d 579, 584 (D. Del. 2001) (“It is well known to this court, and many others, that motions for disqualification are frequently filed as dilatory tactics intended to divert the litigation from attention to the merits.”).

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Moreover, a violation of the ethical rules by itself is not necessarily sufficient to warrant the “severe sanction” of disqualification. Unanue, 2004 WL 602096, at *8; accord Express Scripts, Inc. v. Crawford, 2007 WL 417193, at *1 (Del. Ch. Jan. 25, 2007). The “party moving for disqualification bears the burden of proof” to show both (1) “a conflict of interest” under the Rules of Professional Conduct, and (2) “[i]f a conflict is identified,” that “continued representation by the conflicted attorney would undermine the integrity of the proceedings.” Hendry, 2005 WL 3359078, at *2 (citing Infotechnology, 582 A.2d at 216-17); see also, e.g., IMC Global, Inc. v. Moffett, 1998 WL 842312, at *2 (Del. Ch. Nov. 12, 1998). And a “motion to disqualify must contain clear and convincing evidence establishing a violation of the Delaware Rules of Professional Conduct so extreme that it calls into question the fairness or the efficiency of the administration of justice.” Dunlap, 2008 WL 2415043, at *1 (emphasis added). “Vague and unsupported allegations are not sufficient to meet this disqualification standard.” Id. To the contrary, the movant must have “evidence to buttress his claim of conflict because a litigant should, as much as possible, be able to use the counsel of his choice.” Kanaga v. Gannett Co., 1993 WL 485926, at *3 (Del. Super. Oct. 4, 1993). Factual disagreements are resolved in favor of the non-moving party. Audio Jam v. Fazelli, 1995 WL 1791087, at *1 (Del. Ch. Aug. 17, 1995). Dow has not met this exacting burden. It has failed to show a conflict under the ethical rules, much less one so extreme that the fairness of the proceedings would be undermined. Its failure of proof makes clear that it seeks precisely the sort of improper tactical advantage that the caselaw forbids. B.

Dow is not a current Wachtell client. Delaware Lawyers’ Rule of Professional Conduct 1.7 provides in relevant part

that “a lawyer shall not represent a client if the representation involves a concurrent conflict of -10-

interest. A concurrent conflict of interest exists if: … the representation of one client will be directly adverse to another client . . . .” To evaluate a claim of concurrent conflict of interest, the Court must first determine to what extent the allegedly conflicted lawyer represents adverse parties at the same time. Unanue, 2004 WL 602096, at *3. Dow contends that Wachtell “has been acting as Dow’s lawyers” throughout the Firm’s representation of Rohm and Haas. Dow Br. 9. This contention has no basis in law or fact. “The assertion that a lawyer-client relationship exists requires a realistic assessment of all aspects of the relationship.” Del. Trust Co. v. Brady, 1988 WL 94741, at *3 (Del. Ch. Sept. 14, 1998) (emphasis added). Absent an express agreement between the lawyer and client, “there would have to be, at the very least, a preexisting relationship that would create a reasonable expectation on the ‘client’s’ part that the attorney was representing his interests, and reliance by the client upon that expectation.” SBC Interactive, 1997 WL 770715, at *4 (emphasis added); see also 7 Am. Jur. 2d ATTORNEYS AT LAW § 137 (2008) (“A plaintiff’s subjective belief that an attorney-client relationship exists, standing alone, cannot create such a relationship, or a duty of care owed by the attorney to the plaintiff; instead, it is the intent and conduct of the parties that controls the question as to whether an attorney-client relationship has been created.” (emphasis added)). Simply put, any “realistic assessment” of the facts shows that Dow could not have a “reasonable belief” that Wachtell is Dow’s lawyer. Quite the opposite: Dow was told that at the outset that Wachtell was representing Rohm and Haas when Dow complained to Mr. Lipton about the manner in which the responsible Wachtell lawyers were conducting the negotiations. Lipton Aff. ¶ 5. And then, after the Merger Agreement was signed, when Dow’s litigators initiated a round of post-signing due diligence to test the accuracy of Rohm and Haas’s representa-

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tions and warranties in the Merger Agreement, Wachtell openly assisted Rohm and Haas in deflecting Dow’s effort to find an “out” in the agreement. Wachtell continued to act on behalf of Rohm and Haas and adverse to Dow after K-Dow collapsed when Dow surreptitiously maneuvered a three-week delay in the closing date by delaying the receipt of FTC clearance. Neff Aff. ¶¶ 7-9. And once again, during this period, Mr. Lipton disabused Dow of any notion that Dow was a current Wachtell client. Indeed, Mr. Liveris knew exactly what the score was, starting the conversation by acknowledging that he had been told by Mr. Kalil that Mr. Lipton could not discuss the Rohm and Haas matter with him. Lipton Aff. ¶ 7. Wachtell’s manifest adversity to Dow throughout this period makes Dow’s supposed belief that Wachtell was still representing it completely unreasonable. The Rules of Professional Conduct explicitly recognize that parties to business negotiations such as those that preceded the execution of the Merger Agreement are adversaries for conflict purposes. See Del. Lawyers’ R. Prof’l Conduct 1.7 cmt [7] (“Directly adverse conflicts can also arise in transactional matters” and using sale of a business as example). And this Court has repeatedly characterized the parties to corporate acquisition negotiations as adverse. See, e.g., Postorivo v. AG Paintball Holdings, Inc., 2008 Del. Ch. LEXIS 17, at *20 (Del. Ch. Feb. 7, 2008) (holding that parties “were in an adversarial relationship” when they negotiated an agreement for the sale of substantially all of plaintiff’s assets); Zirn v. VLI Corp., 1990 WL 119685, at *8 (Del. Ch. Aug. 13, 1990) (holding that parties to merger agreement “clearly had adverse interests with respect to the negotiation and documentation” of their contract). The adversarial nature of the par-

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ties is all the more obvious where, as here, multiple companies make competing bids for a target corporation. See Zirn v. VLI Corp., 1989 WL 79963, at *8 (Del. Ch. July 17, 1989). 7 The “evidence” that Dow presents to support the notion that Dow had a “realistic” expectation that Wachtell was acting as its counsel and was relying on that expectation after June 2008 is frivolous. The two “WLRK Memos” that Dow cites as evidence of an ongoing attorneyclient relationship were sent to over 4,200 people. Edelman Aff. ¶ 3-4. Recipients included dozens of practitioners, academics, reporters at the Financial Times, Fortune Magazine, The New York Times, The Wall Street Journal, and members of the judiciary. Edelman Aff. ¶ 2. The “Key Issues for Directors” memo that Mr. Kalil transmitted to his Board “as the work of Dow’s attorneys” can be found in its entirety on Harvard Law School’s website. 8 Mr. Stuart, in his turn, points to a contact update form that a Wachtell paralegal sent to a 1,200 person mailing list — a mailing list that includes former clients, potential clients, and friends of the Firm in addition to current clients. Edelman Aff. ¶ 5. None of this constitutes “objective evidence” of an existing attorney-client relationship. Dow’s other “evidence” of an ongoing relationship is also without substance. Dow says that Wachtell has billed Dow over $2 million “[i]n the last two years.” Dow Br. 8. What Dow fails to disclose is that all but $65,000 of that sum was billed in November 2007 or 7

As an empirical matter, recent high-profile cases make it apparent to any sophisticated businessperson that the negotiation and execution of a corporate transaction carries with it an inherent risk of subsequent litigation between the parties. See, e.g., Alliance Data Sys. Corp. v. Aladdin Solutions, Inc., C.A. No. 3796-VCS (Del. Ch. 2009); Hexion Specialty Chems., Inc. v. Huntsman Corp., C.A. No. 3841-VCL (Del. Ch. 2008); Clear Channel Broad., Inc. v. Newport Television LLC, C.A. No. 3550-VCS (Del. Ch. 2008); SLM Corp. v. J.C. Flowers II L.P., C.A. No. 3279-VCS (Del. Ch. 2007); The Finish Line, Inc. v. UBS Secs. LLC, No. 07-2137-II (III) (Tenn. Ch. 2007); United Rentals, Inc. v. RAM Holdings, Inc., C.A. No. 3360-CC (Del. Ch. 2007).. 8

See http://blogs.law.harvard.edu/corpgov/2008/12/20/key-issues-for-directors/ (Edelman Aff. Ex. A).

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earlier, with the remaining $65,000 billed in June 2008. 9 Moses Aff. ¶ 5. The billing evidence only confirms that Wachtell’s representation of Dow was substantially over by the end of 2007. Dow’s litany of “interviews and meetings with high-level Dow executives and employees,” Dow Br. 3, also confirms that Dow is not a current Wachtell client. With the exception of conversations between Messrs. Liveris and Kalil and Mr. Lipton in 2008 — which, as shown, do not in any way evidence an ongoing client relationship 10 — everything that Dow lists occurred in April or May of 2007. Dow Br. 3. Finally, Dow cites an internal Wachtell e-mail from February 2007 referencing a then-“continuing” representation of Dow. Dow Br. 6 & Ex. 5. In light of Wachtell’s sevenmonth long adverse representation of Rohm and Haas, that two-year-old e-mail cannot support the weight that Dow would have it carry. 11 There is no current representation, and no conflict on that basis.

9

Similarly, while Mr. Stuart claims to have 1,300 e-mails exchanged with Wachtell “during 2007 and 2008” (Stuart Aff. ¶ 3), he is noticeably silent on what proportion of those emails were exchanged in the latter half of 2008. 10

While Mr. Kalil’s affidavit references discussions that he and Mr. Liveris had with Mr. Lipton in 2008, it is noticeably silent on the subject of those discussions and makes no claim that Mr. Lipton provided Dow with legal advice in 2008. See Kalil Aff. ¶¶ 9, 12.

11

No one from Dow was copied on this internal Wachtell e-mail. See Dow Br. Ex. 5. Thus, while Dow argues that Wachtell never “disavowed” its supposed “continuing” representation (Dow Br. 6), the simple fact is that there was nothing to disavow: no one from Wachtell ever represented to Dow that the representation was “continuing.” To the contrary, in June 2008, Mr. Lipton told Mr. Kalil that Wachtell was representing Rohm and Haas, something that Mr. Kalil already knew because Wachtell lawyers were negotiating against Dow on behalf of Rohm and Haas. Lipton Aff. ¶ 5.

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C.

Wachtell’s representation of Rohm and Haas does not violate Rule 1.9. Dow also has not met, and cannot meet, its burden on this motion to show by

clear and convincing evidence that Wachtell’s representation of Rohm and Haas violates Delaware’s “former client” rule. Rule of Professional Conduct 1.9 states in pertinent part: A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing. (Emphasis added.) Because it is undisputed that this matter is not the “same” as any matter in which Wachtell represented Dow, the question is whether the current matter is “substantially related” to Wachtell’s prior representation of Dow. Comment 3 to Rule 1.9 explains that, for such a relationship to exist, there must be “a substantial risk” that confidential information learned from one client in an earlier matter would “materially advance” another client’s position in a later matter. In determining whether the test is met, “courts consider three factors: (1) the nature and scope of the prior representation; (2) the nature of the present litigation; and (3) whether in the course of prior representation, the former client might have disclosed confidences that could be detrimental to it in the present litigation.” Unanue, 2004 WL 602096, at *6; see also Hendry, 2005 WL 3359078, at *4 (applying test to determine that lawyer was not likely to have obtained confidential information from former client that “materially could advance” new client’s position in current litigation); Sanchez-Caza, 2004 WL 2087922, at *3 (similar). None of these factors shows a “substantial relationship” between the present matter and Wachtell’s prior work for Dow.

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1.

The nature and scope of the prior representation of Dow and of the current litigation are entirely distinct. The nature and scope of Wachtell’s prior representation of Dow is entirely distinct

from the present representation of Rohm and Haas. This action concerns Dow’s refusal to close the transaction and Rohm and Haas’s request for an order of specific performance, the contracted-for remedy for that breach. See Compl. ¶¶ 1-5, 41-50. Dow’s defenses to specific performance concern what Dow claims are sudden and heretofore unforeseeable changes in the economy, chemical industry, financial markets and credit markets, and all explicitly hinge on events and circumstances that arose in the last forty-five days. See, e.g., Answer at 59-61; see also pp. 8, supra. Dow cannot go beyond the pleadings to conjure up a theory that its “transformative strategy” is at the “heart” of this matter. See Manchester v. Narrangansett Capital, Inc., 1989 WL 125190, at *5 (Del. Ch. Oct. 19, 1989) (“A potential conflict based on a potential defense is not the standard.”). Nothing in Wachtell’s 2007 representation of Dow implicates the issues raised in the pleadings. Accordingly, the nature and scope of the two representations do not support a finding of a “substantial relationship.” 2.

Wachtell received no confidences from Dow that it could use to Dow’s detriment in this proceeding. In order to support a finding of a substantial relationship, information gleaned

from the prior representation must be specifically relevant to the current representation. Comment 3 to Rule 1.9 explains that “[i]n the case of an organizational client, general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation.” Accordingly, “the court should not allow its imagination to run free with a view to hypothesizing conceivable but unlikely situations in which confidential information ‘might’ have been disclosed which would be relevant to the present suit.” Satellite Fin. Planning Corp. v. First Nat’l -16-

Bank of Wilmington, 652 F. Supp. 1281, 1284 (D. Del. 1987). “Without any common issues” between the two representations, there is no basis for finding that the substantial relationship test has been met. Hendry, 2005 WL 3359078, at *4. Dow’s attempt to manufacture a substantial relationship by invoking its historical “transformative strategy” falls of its own weight. To begin with, there was nothing remotely confidential about Dow’s desire to transform itself, through acquisitions and partnerships, into a specialty chemical-oriented company. Dow has been proclaiming that strategy to the public since at least 2006. See, e.g., Wolinsky Aff. Exs. L, M. Indeed, when Dow announced the Rohm and Haas acquisition on July 10, 2008, Mr. Liveris described the acquisition as “the defining step in Dow’s transformation to a high-growth, diversified chemicals and materials company” and told investors that “since March of 2006,” that strategy “has been and continues to be straightforward and consistent.” Wolinsky Aff. Ex. J at 2-3; see also id. Ex. K at 8. More fundamentally, however, any confidences about Dow’s 2007-vintage “transformative strategy” are not at the “heart” of the case. They are not even on the periphery. As noted above, Dow’s entire defense rests on the premise that the world has changed so dramatically since the signing of the Merger Agreement in July 2008 that enforcement of that agreement is no longer equitable. Thus, on Dow’s theory, the changing world must have likewise eroded the relevance of anything Wachtell learned about Dow’s strategy in 2007, rendering the claim that Dow’s dated strategy is at the “heart” of this case utterly implausible. Cf. Charles W. Wolfram, Former-Client Conflicts, 10 GEO. J. LEGAL ETHICS 677, 732 (1997) (intervening events will “erode whatever salience might originally have attached even to the former client’s inner-most secrets”).

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Dow suggests that Wachtell somehow had access to documents about this transaction. Dow Br. 1. For that to be true, Wachtell would have needed a crystal ball. Wachtell was given access to a database of Dow documents in May 2007, over one year before negotiation of the Merger Agreement began. Moses Aff. ¶ 8. Only two Wachtell attorneys (neither of whom has worked on the Rohm and Haas representation) had access to that database, and neither of them has accessed it since the Fall of 2007. Id. Wachtell could not have seen any documents about the actual deal negotiated in July 2008. Dow’s own conduct gives lie to the assertion that Wachtell’s representation of Rohm and Haas is materially advanced by supposed confidential information concerning Dow’s evaluation of Rohm and Haas. If that were true, that information would have most advantaged Wachtell and Rohm and Haas at the time of the negotiation of the Merger Agreement. Thus, Dow’s claim that it had “no compelling reason” to address the supposed conflict at the time of the negotiation has it exactly wrong; if information about Dow’s strategic vision had any value, it was precisely during the period in which Wachtell was advising Rohm and Haas on how to structure and conduct a bidding process designed to get the best terms from Dow. Dow also claims that Wachtell’s purported “knowledge of Dow’s planned and potential acquisitions and divestitures” is relevant because “Rohm and Haas” will take the position that “Dow can address its financial problems” by selling assets. Dow Br. 12. Of course, this is not only Rohm and Haas’s position, it is Dow’s position: Dow told its shareholders on February 3 that it was exploring the sale of twelve of its assets in order to facilitate the financing of the Merger. Wolinsky Aff. Ex. I at 12. And once again, any information that Wachtell may have

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seen about Dow’s divestiture strategies is more than a year old and not relevant in a world in which, as Dow would have it, everything has changed. 12 Finally, the claim that confidential information could be used to Dow’s detriment is further refuted by the affidavits of Mr. Lipton and Mr. Moses, the Wachtell partners who led the Dow representation, stating that they have not shared Dow’s client confidences with the Wachtell lawyers working on the Dow matter. Lipton Aff. ¶ 10; Moses Aff. ¶ 11. Mr. Wolinsky, the lead Wachtell litigation partner on this matter, has likewise submitted an affidavit stating that — as he told Dow’s counsel prior to the filing of this motion — the Wachtell lawyers who worked on the Dow matter have not had substantive communications with the Rohm and Haas team at Wachtell about this litigation. Wolinsky Aff. ¶ 2. Cf. IMC Global, 1998 WL 842312, at *3 (in Rule of Professional Conduct 1.10 case, court has discretion to rely on attorney representations as to “the full extent of information flow between them”); Deemer Steel Casting Co. v. E. Coast Erectors, Inc., 1990 WL 143840, at *4 (Del. Ch. Sept. 28, 1990) (presumption of shared confidences under Rule 1.10 rebuttable by credible evidence “demonstrating that the attorney received no disqualifying confidential information”) D.

Wachtell’s continuing representation of Rohm and Haas will not undermine the fairness and integrity of the proceedings, but hamstringing Rohm and Haas’s ability to use its chosen counsel will. Even if Dow could possibly establish a violation of the ethical rules (which, as set

forth above, it cannot), that violation alone is not sufficient to justify the extraordinary remedy of

12

Recognizing that information of that vintage has no bearing on the issues in the case, neither party has sought discovery of documents or information related to strategic planning in 2007. Dow’s discovery requests call for documents and information from April 1, 2008, while all but one of Rohm and Haas’s requests seek documents and information from June 1, 2008 forward. The only exception is Rohm and Haas’s request for discrete financial statements for Dow’s major joint ventures for the past three years. Wolinsky Aff. Exs. C-H.

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disqualification. See Hendry, 2005 WL 3359078, at *4; Sanchez-Caza, 2004 WL 2087922, at *4; Elonex I.P. Holdings, Ltd. v. Apple Computer, Inc., 142 F. Supp. 2d 579, 583 (D. Del. 2001). “[D]isqualification does not always serve as an appropriate remedy for violations of Rule 1.9.” Express Scripts, 2007 WL 417193, at *1. “The Court’s inquiry focuses on whether [the lawyer’s] continued representation of [the current client] will so undermine the integrity and fairness of the proceedings that [the current client] should be deprived of the counsel of his choosing.” Unanue, 2004 WL 602096, at *2; accord McAllister v. Kallop, 1993 WL 205037, at *1-*2 (Del. Ch. June 8, 1993). Thus, to determine whether disqualification is an appropriate remedy for an ethical violation, “this Court measures the interests of the former client in protecting confidences revealed during representation with the prejudice that would be suffered by the current client were the attorney or firm to be disqualified.” Express Scripts, 2007 WL 417193, at *1; see also Sanchez-Caza, 2004 WL 2087922, at *4 (court “must weigh the current client’s choice of counsel with a ‘former client’s right to protect confidences revealed in a prior representation’” (citation omitted)). Courts routinely deny disqualification when the risk that there were relevant client confidences disclosed in the prior representation is slight, but the current client would be prejudiced. See id. at *5 (denying motion where it “would undoubtedly prejudice the Plaintiff by denying him his choice of counsel and by delaying the adjudication of the merits. . . . The likely prejudice that would result from disqualification is not warranted given the limited, unrelated

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nature of the prior representation and the minimal risk of [the lawyer’s] access to confidential information regarding [the defendant]”). 13 The prejudice caused by disqualification is especially acute in the context of expedited proceedings. See, e.g., Express Scripts, 2007 WL 417193, at *2 (disqualification is inappropriate remedy in expedited deal litigation “where every tick of the clock counts”); Avacus Partners, L.P. v. Brian, 1990 WL 27538, at *4 (Del. Ch. Mar. 9, 1990) (presence of “special factor[s]” such as “an on-going contest for corporate control or a proposed transaction with an early closing date” amplify non-moving party’s interest in being represented by counsel of its first choice). The prejudice Rohm and Haas would suffer if it cannot use its chosen counsel for key litigation functions is just as severe as the prejudice at issue in Express Scripts, SanchezCaza and the other cases cited above — if not more so. Trial is on March 9 — one month away. Wachtell’s intimate working knowledge of the transaction cannot be adequately replicated in that time frame if at all. Lonergan Aff. ¶¶ 9-10. 14 Document discovery is already well under way; depositions start on February 12 and finish just two weeks thereafter. Excluding Wachtell from these activities is simply unworkable. Id. In these circumstances, the relief that Dow requests 13

See also Hendry, 2005 WL 3359078, at *4 (same); Elonex, 142 F. Supp. 2d at 584 (denying motion because “[t]here is no doubt that it will be both inefficient and costly for [the client] to get new counsel up to speed in this matter”); Nemours Found. v. Gilbane, 632 F. Supp. 418, 430 (D. Del. 1986) (noting that it would be prejudicial to deny the client of his choice of counsel “at this point in the litigation” and taking into account the “excellent working relationship” that the client had developed with counsel in denying a motion to disqualify). 14

While Rohm and Haas has the utmost confidence in the abilities of its Delaware counsel, Connolly Bove Lodge & Hutz, Connolly Bove did not participate in the negotiation of the Merger Agreement, the regulatory approval process, due diligence or the events that led up to the filing of the suit and is not directly involved in the development of the strategy that Rohm and Haas has developed to compel Dow to live up to its promises or the day-to-day decision making implementing that strategy. Connolly Bove therefore does not have the same first-hand knowledge of the matter as does Wachtell. Lonergan Aff. ¶ 10.

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can in no way be characterized as limited. To the contrary, Dow’s request that Wachtell be disqualified from participating in discovery of Dow (including document discovery) or in examination of Dow witnesses — the true guts of this litigation — strikes at the very heart of Rohm and Haas’s ability to prepare for trial. This is not a case where Rohm and Haas can simply hire new counsel or vastly expand the role of existing co-counsel and accept a delay in adjudication of the merits. As Rohm and Haas has previously explained to the Court, any delay resulting from disqualification of Wachtell would severely hamper Rohm and Haas’s ability to vindicate its rights. Lonergan Aff. ¶ 11. And, as is detailed in the Verified Complaint and in Rohm and Haas’s motion for expedited proceedings, every additional day that the closing is delayed is detrimental to Rohm and Haas, its shareholders and its employees. Compl. ¶ 40; Mem. of Law in Supp. of Pl.’s Mot. for Expedited Proceedings at 13-14; Lonergan Aff. ¶ 13-14. E.

Dow’s delay in raising the purported conflict is in itself a sufficient basis for denying this motion. In weighing the interests of the former and current clients, another “factor to be

considered is the moving party’s timeliness in notifying opposing counsel of the conflict, because motions to disqualify are often brought less out of concern for confidentiality than as a tactic in litigation.” Express Scripts, 2007 WL 417193, at *1 (disqualification not an appropriate remedy in rapidly moving dispute where defendants waited until twenty-one days after learning the identity of plaintiff’s counsel before giving notice of conflict); see also Sanchez-Caza, 2004 WL 2087922, at *5 (six-month delay between former clients’ learning of the adverse representation and their objection made it apparent “that the Defendants were not overly concerned about [the challenged law firm] possessing potentially harmful confidential information”). Dow’s un-

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justifiable delay in raising any objection to Wachtell’s representation of Rohm and Haas itself defeats disqualification. 1.

Dow acquiesced in and consented to Wachtell’s representation of Rohm and Haas by failing to express an objection until after litigation began. If Dow’s claim — that Wachtell’s representation of Rohm and Haas constitutes a

conflict of interest — is to be credited, Dow cannot escape the conclusion that the conflict would have been patently obvious more than seven months ago at the outset of the negotiations between the parties. And if any credence is to be given Dow’s claim that confidences about its strategy were significant, those confidences would have been far more useful to conducting the auction for Rohm and Haas than in an after-the-fact litigation about a breach. Yet Dow claims that it was silent during the auction and merger negotiations because there was “no compelling reason” to object. Dow Br. 14. This is simply not an excuse for Dow’s conduct. If Dow were truly concerned about the use of its confidential information against its own interests, it was incumbent upon Dow to object to Wachtell’s representation of Rohm and Haas in June 2008. See Kenton v. Bellevue Four, Inc., 1999 WL 463684, at *1 (Del. Super. Apr. 26, 1999) (failure to make timely objection upon learning the facts supporting a disqualification motion results in waiver of the right to seek disqualification). Dow is thus in the same position as the unsuccessful movant in Eli Lilly & Co. v. Genentech, Inc., 17 U.S.P.Q.2d 1531 (S.D. Ind. 1990). There, Lilly moved to disqualify its former in-house counsel, Dr. Buting. Dr. Buting, on behalf of Lilly, had negotiated the licensing agreement with Genentech that was the subject of the litigation, but subsequently became inhouse counsel to Genentech, where his responsibilities included administering that same licensing agreement. Id. at 1532-33. Lilly communicated with Dr. Buting in his new role and raised -23-

no objection until litigation began. Id. The court concluded that Lilly, by its conduct, had “consented to and acquiesced in” its former lawyer’s “potentially adverse” role ever since Dr. Buting switched companies. Id. at 1535. Lilly therefore “waived its right to raise disqualification because it knowingly failed to make a prompt objection.” Id. at 1536. The same is true here. Dow never objected until it became clear that Rohm and Haas would litigate Dow’s breaches of the Merger Agreement. Dow’s seven-month-long acquiescence in Wachtell’s role as counsel to Rohm and Haas demonstrates that the present motion is nothing more than the “procedural weapon” that the Supreme Court has warned against. Infotechnology, 582 A.2d at 220. 2.

Dow cannot excuse its failure to make a timely objection by claiming that it was presented with a fait accompli. Finally, it is no answer for Dow to claim that its failure to object in June 2008

when the conflict was, on Dow’s theory, most acute can be excused because Dow was presented by Rohm and Haas with its retention of Wachtell as a fait accompli. If there was an issue, it was incumbent upon Dow to raise it at that time. At a minimum, Dow could have expressed its objection and taken the position that while it was consenting to Wachtell’s representation of Rohm and Haas in the merger negotiation, it would object if Wachtell sought to litigate against Dow in some future dispute. Dow’s reliance on J.E. Rhoads & Sons, Inc. v. Wooters, 1996 WL 41162, at *5 (Del. Ch. Jan. 26, 1996), for the proposition that a party to a transaction may acquiesce in its former law firm’s transactional representation of a counterparty, yet still make a timely objection when litigation later develops is thus completely misplaced. J.E. Rhoads involved the sale of a business in which all parties to the transaction — buyer, seller, and employees — agreed to be represented by the same law firm. Id. at *1. When litigation later arose between the employees -24-

and the buyer, the court held that the litigation was “substantially related to matters in which [the law firm] previously . . . acted as an intermediary for all parties.” Id. at *4 (emphasis added). Not even Dow claims that Wachtell represented both parties here in negotiating the Merger Agreement. CONCLUSION Courts understandably are wary of disqualification motions because of their potential for abuse. This motion — brought seven months after Dow was faced with its supposed counsel sitting across the bargaining table — is a perfect example of why that is so. Dow’s motion is without merit and untimely. It should be denied.

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Respectfully submitted, CONNOLLY BOVE LODGE & HUTZ LLP

OF COUNSEL: Paul K. Rowe Marc Wolinsky Elaine P. Golin Garrett B. Moritz Joshua A. Naftalis WACHTELL, LIPTON, ROSEN & KATZ 51 West 52nd Street New York, New York 10019 Telephone: (212) 403-1000 Facsimile: (212) 403-2000

/s/ Collins J. Seitz, Jr. Collins J. Seitz, Jr. (No. 2237) Henry E. Gallagher, Jr. (No. 495) David E. Ross (No. 5228) Bradley R. Aronstam (No. 5129) The Nemours Building 1007 North Orange Street P.O. Box 2207 Wilmington, Delaware 19899 Telephone: (302) 658-9141 Facsimile: (302) 658-5614 Attorneys for Plaintiff Rohm and Haas Company

Robert A. Lonergan ROHM AND HAAS COMPANY 100 Independence Mall West Philadelphia, Pennsylvania 19106 Telephone: (215) 592-3000 Facsimile: (215) 592-3377

Dated: February 9, 2009

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CERTIFICATE OF SERVICE I, Collins J. Seitz, Jr., Esquire, hereby certify that on February 9, 2009, a copy of the foregoing Memorandum of Law In Opposition To Defendants’ Motion To Disqualify Wachtell, Lipton, Rosen & Katz From Conducting Discovery Against Dow And Examining Dow Witnesses to be served by LexisNexis File & Serve to counsel of record as follows: Martin P. Tully, Esquire Kenneth J. Nachbar, Esquire Morris, Nichols, Arsht & Tunnell 1201 N. Market Street Wilmington, DE 19899

/s/ Collins J. Seitz, Jr. Collins J. Seitz, Jr. (Bar No. 2237)

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