July 25, 2012 Law360
 

Judge Tentatively Dismisses Atty From Playboy Condom Suit

By Jonathan Randles
 

A California judge on Wednesday indicated that he would dismiss an attorney from a multimillion-dollar contracts suit brought against fashion designer Max Azria over a line of Playboy-branded condoms, citing a conflict arising from an unrelated business dispute involving a line of personal lubricants.

Los Angeles Superior Court Judge John L. Segal tentatively granted a motion disqualifying attorney Peter W. Ross, who represents Camden Healthcare LLC CEO Patrick Bertranou, from litigation brought against Azria, who founded clothing brand BCBG. Bertranou and his former business partner Jimmy Esebag ó the head of United Licensing Group Inc., which owns the rights to the Playboy trademark ó allege Azria concealed his company's financial problems when he pledged $10 million for a stake in the condom line and promised to facilitate a distribution deal with Wal-Mart Stores Inc. to sell the Playboy-brand birth control.

But Esebag, who has previously been represented by Ross, claims an unrelated business dispute with Bertranou over a line of Playboy personal lubricants has created a conflict of interest in their ongoing litigation against Azria. Judge Segal said Wednesday that the case was unusual because Esebag and Bertranou weren't opposing each other in the lawsuit against Azria and suggested Esebag's motion was petty.

"It seems to me, in a way, that Mr. Esebag is acting like someone who says, 'I'm taking my ball and going home,'" Judge Segal said. "Tactical disqualification motions aren't favored. This isn't even that. This is, 'I don't like Mr. Ross.'"

Camden, which filed suit in December 2011, alleges it formed co-plaintiff United Medical Devices LLC with Azria to distribute condoms bearing the Playboy trademark. Under the terms of UMD's operating agreement, Azria was to have a 20 percent stake in the company and Camden was to own the remainder of the company.

As part of the deal, Azria agreed to invest in the product line and utilize his connections at Wal-Mart to facilitate a beneficial distribution agreement for the Playboy condoms. But the licensing deal fell through after Esebag said he uncovered problems with BCBG's finances.

Esebag filed the motion to disqualify Peter W. Ross in June and disclosed the falling out with Bertranou over the personal lubricant products. Ross had represented Esebag and his various business interests for more than seven years, but when his former clients' business relationship soured, Ross chose to continue representing Bertranou.

On Wednesday Judge Segal said it was a "close call" on whether to grant the motion to disqualify Ross from the underlying litigation involving Azria. Ross, who didn't attend the hearing because of a scheduling conflict, was given a chance to respond to the tentative ruling before a final decision is made.

Attorneys representing Ross and Esebag declined to comment following the hearing.

UMD and Camden are represented by Bryan J. Freedman and Jonathan M. Genish of Freedman & Taitelman LLP. Esebag is represented by Joshua G. Blum of the Law Offices of Joshua G. Blum PC.

Peter W. Ross and Cheryl Priest Ainsworth are represented by Browne George Ross LLP.

The case is Camden Healthcare LLC et al. v. Max Azria et al., case number BC475247, in the Superior Court of California, County of Los Angeles.

--Editing by Katherine Rautenberg.