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Ninth Circuit:
Terminating Sanction Was Proper Where Attorney Lied About His Role at Company
Opinion Says Remedy Was Appropriate Where Plaintiff Misrepresented That He Was Officer Who Occasionally Did Patent Work; He Was Actually In-House Lawyer
By Kimber Cooley, associate editor
The Ninth U.S. Circuit Court of Appeals has held that a terminating sanction order was appropriate in a wrongful termination lawsuit where the plaintiff, a licensed lawyer out of state, mischaracterized himself in the operative complaint as an officer of the company who occasionally did patent work, while he was actually in-house counsel, practicing law without a California license.
In the second amended complaint, the plaintiff omitted any reference to the governing employment agreement—which was incorporated by reference in the initial complaint and listed his position with the technology company as “Senior Vice President, Business & Counsel”—instead characterizing his role as the “right hand man” to the chief executive officer with responsibilities “similar to a Chief of Staff position.”
Appealing the sanction order was Andrew T. Pham, a licensed attorney in Wisconsin who was hired by Talkdesk Inc. in 2019. The San Francisco-based company offers a cloud-based customer service platform utilizing artificial intelligence.
Talkdesk terminated Pham’s employment in July 2020. The following year, it learned that while he was providing legal services to the company, he was practicing law without a California license.
Pham alleges that he was terminated for refusing to engage in “unlawful actions” by the company and the operative complaint, filed Nov. 28, 2022, asserts a violation of whistleblower protection laws and wrongful termination.
In May 2023, Talkdesk moved for terminating sanctions under the court’s inherent authority, citing bad faith in Pham’s recharacterization of his employment in the second amended complaint.
District Court Judge Mark C. Scarsi of the Central District of California granted the motion and dismissed the complaint with prejudice on July 11, 2023, saying that the pleading “contained bad faith, material omissions that unnecessarily lengthened the case and multiplied the proceedings.” The judge commented:
“Despite his repeated assertions to the contrary, Mr. Pham now acknowledges that his ‘prior contention[s]’ were ‘inconsistent with the fact that [he] advised Talkdesk on non-patent matters.’….This [acknowledgment] was only made after the Court was forced to consider a motion to dismiss the SAC, supplemental briefing to clarify whether there was a means for the Court to consider Mr. Pham’s title and legal role at Talkdesk, and an ex parte application requesting that the Court strike the instant motion for sanctions….This conduct is inexcusable.”
He continued:
“Mr. Pham and his attorney were well aware that the earlier complaint was dismissed because Mr. Pham’s claims did not satisfy the heightened pleading standards applicable to attorneys suing their former employers. Rather than acknowledge his role and conform the amended complaint to the appropriate standards, Mr. Pham and his counsel opted to omit any reference to the Employment Agreement or Mr. Pham’s role as in-house counsel at Talkdesk. The reason for this omission is clear: by excluding any reference to Mr. Pham’s role as in-house counsel, ‘the Court would be left only to accept Pham’s factual allegation that he was’ serving almost entirely in a business capacity, ‘however disingenuous that assertion may be.’ ”
In a memorandum opinion, filed Monday and signed by Senior Circuit Judges Richard A. Paez, Andrew D. Hurwitz, and Circuit Judge Jacqueline H. Nguyen, the Ninth Circuit affirmed the dismissal.
Extreme Circumstances
The judges acknowledged that dismissal under a court’s inherent powers is justified only in extreme circumstances, such as in response to abusive litigation practices or as necessary to ensure the administration of justice, and that an order imposing the sanctions will be reviewed for an abuse of discretion.
Looking to the facts of the present case, they said:
“In imposing the ‘extraordinary sanction’ of dismissal under its inherent authority, the district court found (1) that Pham was Talkdesk’s in-house counsel, including for non-patent matters, (2) that Pham repeatedly and affirmatively misrepresented his role at Talkdesk, (3) that these false statements were central to Pham’s case, and (4) that Pham acted in bad faith.”
Practiced Non-Patent Law
Under these circumstances, the panel remarked:
“These factual findings were not clearly erroneous. In multiple pleadings and briefs, Pham alleged that his legal work for Talkdesk was limited to patent matters. But declarations from other Talkdesk employees, declarations from outside counsel, Pham’s employment agreement, Pham’s own emails and deposition testimony, and admissions by Pham’s counsel amply support the district court’s finding that his work included general purpose legal matters.”
They declared:
“The district court’s finding of bad faith is therefore supported by evidence that Pham knowingly and willfully misstated the scope of his legal work for Talkdesk. The characterization of Pham’s role is central to the merits of his wrongful termination claims and to the application of the attorney-client privilege to the factual bases of his claims.”
The case is Pham v. Talkdesk Inc., 23-55711.
Superior Court Finding
A footnote in the opinion makes reference to “a Superior Court order finding Pham to have engaged in the unauthorized practice of law” which Pham, in response to an inquiry by the State Bar of Wisconsin, has denied.
On Feb. 25, 2015, Pham was publicly reprimanded by the director of the Office of Enrollment and Discipline for the United States Patent and Trademark Office. He had practiced patent law during a period between 2009 and 2014 when he was administratively suspended from practice in Wisconsin based on not reporting MCLE credits and not paying his bar dues.
As a result of that suspension, “he was not licensed to practice trademark law in Wisconsin or any other jurisdiction,” the order says.
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