The Cochran Firm Fraud Failed in CA Fed. Court

Case 2:12-cv-05868-PSG-MRW Document 364 Filed 05/12/15 Page 1 of 13 Page ID
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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 12-5868 PSG (MRWx)
Title
The Cochran Firm, P.C. v. The Cochran Firm Los Angeles, LLP, et al.
Present: The Honorable
Date
May 12, 2015
Philip S. Gutierrez, United States District Judge
Wendy Hernandez
Not Reported
Deputy Clerk
Court Reporter
Attorneys Present for Plaintiff(s):
Attorneys Present for Defendant(s):
Not Present
Not Present
Proceedings (In Chambers):
Order GRANTING Defendants motion for an order dissolving

the preliminary injunction.
Pending before the Court is Defendants and Counterclaimants Randy H. McMurray, P.C.
and Randy H. McMurrays (collectively referred to as McMurray or Defendant)1 motion for
an order dissolving the preliminary injunction or increasing the bond amount. Dkt. # 348. The
Court finds this matter appropriate for decision without oral argument. See Fed. R. Civ. P.
78(b); L.R. 7-15. After considering the papers and evidence submitted by the parties, the Court
GRANTS the motion for an order dissolving the preliminary injunction.
I.
Introduction
This lawsuit involves intellectual property rights to the trademark The Cochran Firm.
See generally Second Amended Complaint (SAC). McMurray brings this motion in an attempt
to dissolve a preliminary injunction that was granted in favor of Plaintiff The Cochran Firm, P.C.
(The Cochran Firm or Plaintiff), which essentially enjoins him, with limited exceptions,
from using the term Cochran. Dkt. # 264. According to McMurray, the Court should
dissolve the preliminary injunction because Plaintiff has unclean hands in the use of its
trademark by advertising itself as a national law firm when it is in fact comprised of a
network of licensee-licensor relationships. Mot. 1:7-11; 18:12-21:19.
II.
Background
Although the McMurray Defendants are plural, the Court will refer to them as McMurray
singularly.
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Plaintiff is an Alabama corporation formed in 1998 under the name Cochran, Cherry,
Givens & Smith, P.C. SAC 12. The firm later changed its name to The Cochran Firm
Cochran, Cherry, Givens, Smith & Sistrunk, P.C. and subsequently filed an amendment to its
articles of incorporation changing its name to The Cochran Firm, P.C. See Dkt. # 156-7.
In the spring of 1999, Johnnie Cochran Jr. (Cochran), Samuel A. Cherry (Cherry), J.
Keith Givens (Givens), and Jock Smith entered into a California limited liability partnership
that they named Cochran, Cherry, Givens & Smith LLP (the California LLP). Fourth
Amended Counterclaim (FACC) 7. The California LLP began with offices in New York and
Los Angeles. Id. 25. According to McMurray, he was asked to join the California LLP as a
co-managing partner of the Los Angeles office in June 1999. Id. 26.
In March of 2005, Cochran registered The Cochran Firm as a trademark with the
United States Patent and Trademark Office (USPTO). Id. 34. Plaintiff acquired rights to the
mark under an assignment agreement after Cochrans death. Id. 35-36.
McMurray purchased the California LLPs Los Angeles office in January 2007 and the
next month formed a general partnership with Brian T. Dunn (Dunn) that took over the
California LLPs Los Angeles office. Id. 41. McMurray alleges that Cherry and Givens
consented to the partnerships use of the name The Cochran Firm Los Angeles. Id. 42. At
some point Joseph Barrett (Barrett) also became a partner of The Cochran Firm Los Angeles.
Id. 50-52. Plaintiff pleads that it made numerous attempts to memorialize and execute an
agreement outlining the partner and licensing relationship between the National Firm and the
Los Angeles local office. SAC 32. Under the drafts of these agreements, The Cochran Firm
Los Angeles had a duty to pay Plaintiff a portion of the fees earned and received by the Los
Angeles office as compensation for administrative, IT, marketing, practice benefits and support
of being a Cochran Firm local office. Id. 35. Although no such agreement was ever executed
by both Plaintiff and McMurray, from January 2006 until September 2010, The Cochran Firm
Los Angeles complied with the monthly reporting requirements and payment of the agreedupon National compensation. Id. 37. In February 2012, Plaintiff sent McMurray and Barrett
a Cease and Desist letter informing them that they were no longer allowed to use The Cochran
Firm mark. Id. 42.
McMurray claims that his relationship with Dunn and Barrett deteriorated and that Cherry
and Givens convinced them to join a conspiracy to oust McMurray from The Cochran Firm Los
Angeles. FACC 59-75. McMurray alleges that they formed a corporation, Dunn Law APC
dba The Cochran Firm California to replace The Cochran Firm Los Angeles and engaged in
various fraudulent and wrongful acts. Id.
A.
Procedural Background

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On November 26, 2012, Plaintiff filed a SAC against The Cochran Firm Los Angeles,
GP, and McMurray alleging trademark infringement for using the mark The Cochran Firm.
Dkt. # 36. McMurray filed counterclaims against Counterdefendants The Cochran Firm, P.C.;
The Cochran Firm Cochran, Cherry, Givens, Smith & Sistrunk, P.C.; Dunn Law, APC; Brian
T. Dunn; Samuel A. Cherry; J. Keith Givens; Joseph Barrett; and Barvie Koplow alleging that
they are liable for various fraudulent actions. FACC.
In January of 2013, Plaintiff filed a motion for a preliminary injunction forbidding
McMurray from using the mark The Cochran Firm that was granted, and later modified, by
U.S. District Court Judge Otero. See Dkts. # 58, 102. McMurray appealed the modified
injunction to the United States of Appeal for the Ninth Circuit. Dkt. # 125. While the appeal
was pending, this matter was transferred to U.S. District Court Judge OConnell. Dkt. # 176.
On May 30, 2014, the Ninth Circuit issued a mandate reversing the preliminary injunction
order and remanding the action to the district court. Dkt. # 242 (Mandate). Although the
Ninth Circuit found that the district district court did not abuse its discretion in concluding that
Plaintiff was likely to demonstrate that it owns The Cochran Firm trademark, it remanded for
the district court to augment the record and to reconsider [McMurrays] unclean hands
argument. Mandate at 3. The Ninth Circuit emphasized that the structure of Plaintiffs
business is important in assessing whether [it] has unclean hands but that the record . . . [did
not] provide sufficient information about the relationships both between [Plaintiff] and the local
offices, or between [Plaintiff] and the public. Id. at 4-5. The Ninth Circuit instructed the Court
to keep the preliminary injunction in place while it examined the issue. Id. at 5. Additionally,
the Ninth Circuit, finding the injunction to be too broad, instructed the district court to tailor the
injunction so as to burden no more protected speech than necessary. Id. at 5-6.
In response to the Ninth Circuit Mandate, McMurray filed an ex parte application on June
6, 2014 requesting that the district court vacate certain portions of the injunction and set an
evidentiary hearing. Dkt. # 243. On September 23, 2014, Judge OConnell granted the
application in full and set an evidentiary hearing to be held October 21, 2014 to examine only
the specific issue of Plaintiffs business structure as it relates to whether [Plaintiff] has
unclean hands in its use of the Cochran Firm trademark. Id. (emphasis and modification
in original). The district court held an evidentiary hearing on October 21 and 22, 2014 to
examine this issue. Dkts. # 302, 303. On October 30, 2014 McMurray filed an ex parte
application for an order admitting additional evidence that was granted in part and denied in part.
Dkt. # 312.
On November 17, 2014, this matter was assigned to this Court after Judge OConnell
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recused herself. Dkt. # 324.

McMurrays motion seeks an order dissolving the preliminary injunction or, in the
alternative, increasing the bond amount. Mot.
B.
Evidentiary Hearing
McMurray has outlined evidence that he argues supports his argument that Plaintiff is
comprised of a network of licensee-licensor relationships and not a single, national firm as it has
advertised to the public. Mot. 8:3-12:9.
McMurray points to the declaration of Cherry, one of Plaintiffs principals, who describes
The Cochran Firm as a National Firm with aregional [sic] offices. Dkt. # 268-1, Declaration
of Samuel A. Cherry, Jr. (Cherry Decl.) 5. According to Cherry, each regional office enters
into an agreement with national which governs its operation as part of The Cochran Firm and
these agreements either consist of partnership agreements between Plaintiffs principals and
local attorneys or as operating agreements between partners (the partners being National and
local attorneys). Id.
Although Cherry declared that it forms partnerships with partners at the regional offices,
Defendant submitted sworn declarations from three partners at Plaintiffs Alabama Office each
stating that he or she has not now nor . . . ever been a partner or employee of The Cochran
Firm, P.C., also known as Cochran National. See Declaration of Yana G. Henriks (Henriks
Decl.), Exs. 9, Declaration of Joseph D. Lane (Lane Decl.) 3; 10, Declaration of Angela J.
Mason (Mason Decl.) 3; Declaration of J. Farrest Taylor (Taylor Decl.) 3.
Plaintiff represented to the district court in its motion for preliminary injunction that at
some point it re-established its Los Angeles office and rehired Mr. Dunn and Mr. Barrett as its
managing partners. Mot. for PI 5:7-8; see also Declaration of Samuel A. Cherry I/S/O Mot. for
PI 18 (After I sent McMurray the cease and desist letter, The Cochran Firm re-established its
Los Angeles office by granting Mr. Dunn permission to begin to do business as The Cochran
Firm California, of which Mr. Dunn is managing partner.). On February 16, 2012 Dunn filed a
fictitious business name statement, on behalf of Dunn Law, APC, declaring that Dunn Law, APC
is the sole owner of the business operating as The Cochran Firm California and The Cochran
Firm. Defendants Request for Judicial Notice (Def.s RJN), Ex. 9.2 In December of 2012,
McMurray requests that the Court take judicial notice of certain public documents. See Def.s
RJN. The Court may take judicial notice of and consider matters that are not subject to
reasonable dispute, including public records. See Fed. R. Evid. 201(b); Dudum v. Arntz,
640 F.3d 1098, 1101 n.6 (9th Cir. 2011) (taking judicial notice of a verifiable public

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Betty Jackson (Jackson), obtained a judgment against The Cochran Firm, amongst other
entities, for the return of client funds wrongfully retained that she was entitled to based on a
settlement that Dunn signed on behalf of The Cochran Firm. See Henriks, Exs. 7, 8. McMurray
states that Jackson obtained a court order authorizing the seizure of Dunn Law, APC funds to
cover the unpaid judgment to which Dunn responded with a verified third party claim of
ownership on behalf of Dunn Law, APC stating that it is a separate and distinct entity from the
Judgment Debtors. Id., Ex. 6.
McMurray also points the Court to copies of operating agreements entered into between
Plaintiff and its regional offices that were admitted during the evidentiary hearing. See Dkt. #
294. In the Operating Agreement for The Cochran Firm New York (New York Operating
Agreement), the agreement provides that the parties Plaintiff, Paul B. Weitz and Associates,
P.C., and The Cochran Firm New York, P.C. do not intend to form a partnership. Henriks
Decl., Ex. 5. The New York Operating Agreement also provides that the regional office is
responsible for all costs associated with its operation, including advertising. Id. 4.3.
According to the New York Operating Agreement, Plaintiff is entitled to a certain share of the
local offices distributable income. Id. 5.2. Specifically, Plaintiff is to receive a percentage of
the gross fee revenue generated by the regional office within five days after the end of each
month. Id. 5.2-5.4. Additionally, the Operating Agreement provides that the local office must
use the case management and accounting software chosen by Plaintiff and allow it remote
computer access to the case management and accounting information of the Practice and that
Plaintiff has sole ownership over The Cochran Firm name. Id., Annex II at 4,8. Other
agreements provide similar provisions regarding each regional offices responsibility for certain
costs, fees paid to Plaintiff, and terms regarding the software that must be used. See Cherry
Decl., Exs. A-Q.
McMurray also describes testimony given by Austin Headland, Plaintiffs controller, in a
deposition. Dkt. # 286-1, Deposition of Austin Headland (Headland Depo.). Headland stated
that he is also the controller for each of Plaintiffs regional offices. Headland Depo. 9:1-25.
According to Headland, Plaintiff does not pay for payroll, lease, rent, phone, or computer
expenses as well as malpractice insurance. Id. 21:21-24. Headland also confirmed, after being
asked about each one of Plaintiffs regional offices, that the regional offices are separate entities,
that Plaintiff does not pay for their operating expenses, liabilities, or malpractice insurance, and
that Plaintiff does not file joint tax returns with these offices. Id. 25:10-38:18. Headland also
testified that he is employed by U.S. Legal P.C, owned by Givens, which provides management
company services for Plaintiff. Id. 8:5-10.
record). Accordingly, the Court GRANTS McMurrays request.
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In his declaration, offered in lieu of direct examination, Plaintiffs expert, John Steele,
stated that The Cochran Firm is a network of partnerships between Cochran National and the
regional entities. Dkt. # 268-19, Declaration of John Steele (Steele Decl.) 19. During the
evidentiary hearing, Steele testified that the network of the regional offices is built with
agreements with national but that he was not aware of any agreements entered into between the
regional offices. Evidentiary Hearing Transcript (TR) 60:11-61:11. McMurrays expert, in
turn, described The Cochran Firm during the evidentiary hearing as not a national firm, but
instead like Jupiter with satellite moons.3 TR 126:5-15.
In opposition, Plaintiff, too, highlights certain sections of Cherrys declaration to support
its argument that it has the elements that a public would expect from a national firm. According
to Cherry, National requires that the regional offices maintain a minimum amount of insurance.
Cherry Decl. 5(d). Cherry states that each regional office is managed by a managing partner
that Johnnie Cochran personally knew, trusted, vetted, and selected and that an office that fails
to meet The Cochran Firms quality standards is removed from the firm. Id. 5, 6. Lastly,
Cherry outlines the control to which regional offices are subject to by National. Id. 5. For
example, Plaintiffs Administration Coordinator, Bonnie Niver, communicates frequently with
the regional offices, Plaintiff requires the regional entities to use the same case management
software, provides templates for documents (letterhead, business cards, and pleadings) and, via
the operating agreements, requires that each regional office abide by applicable law and ethical
rules and to comply with its National Operating Procedures. Id.
Plaintiff also points to testimony given by Givens at the evidentiary hearing purportedly
about certain profits, expenses, and liabilities that are shared between Plaintiff and each of its
regional offices. Opp. 5:22-8:9. For example, Givens testified that the Cochran firm sometimes
engages in class action campaigns and multi-district litigation which includes participation of
multiple regional offices and results in profit sharing. TR 157:18-158:8. According to Givens,
Plaintiff also has employees in the following divisions that assist the regional offices with
various services: (1) Accounting; (2) Marketing and Advertising; (3) IT; (4) Operations
Management; (5) HR and Legal; (6) Client Services Center; and (7) Web and Internet. TR
154:18-155:13. Givens testified that the accounting department has CPAs, bookkeepers, and
accountants that offer general services to the regional offices. Id. 155:9-19. Givens also stated
that the client services center is a call center that receives around 300,000 annual calls to 1-800Plaintiff attacks Pecks credibility by writing that she has zero experience as a partner at a law
firm, has never done transactional work, and has never formed a law firm. See Opp. 12:7-11.
The Court disagrees that these facts render Pecks testimony less credible, especially in light of
her experience as a scholar of legal professional responsibility and experience as a judge of the
California State Bar Court. See generally Peck Decl.

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THEFIRM and that employees at this call center conduct preliminary client interviews, gather
medical records, obtain fee agreements, and enter all information gathered into a Client Profiles
System that is accessible to all regional offices. Id. 158:11-18; 160:17-161:4. Lastly, Givens
testified that Plaintiff has joint responsibility with the regional offices for professional
compliance with all of the Bar regulations. Id. 159:3-7.
i.
Excluded Evidence
McMurray argues that certain evidence was wrongfully excluded by Judge OConnell
during the evidentiary hearing held in October 2014 and in response to McMurrays ex parte
application seeking to admit additional evidence. Mot. 12:21-18:12. The Court agrees with the
decisions made by Judge OConnell and, therefore, declines to admit and consider this evidence
for purposes of this motion.
As to McMurrays argument that the district court wrongfully denied McMurray
additional time to cross-examine Cherry and Givens, the Court finds that the denial was not
wrongful. Judge OConnell instructed the parties to provide a list of proposed witnessed before
the hearing and their declarations to serve as direct examination and then each party was allotted
1.5 hours to present their side during the evidentiary hearing to use as they thought appropriate.
Dkt. # 264; TR 10:2-7. McMurray requested extra time, and Judge OConnell gave him ten
extra minutes and then commented that she would not allow him to waste the Courts time . . .
by asking the same questions, asking argumentative questions, fighting with the witness,
smirking, and asking questions irrelevant to . . . the mandate. Id. 111:23-113:1. Courts have
the inherent power to manage their own affairs as to achieve the orderly and expeditious
disposition of cases. Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402, 404 (9th Cir. 2010)
(quotations omitted) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991). Considering the
limited mandate for which the matter was remanded, Judge OConnells time limitations were
reasonable.
Furthermore, as to the two samples of The Cochran Firms advertising that were denied
for a lack of foundation, the Court concludes that McMurrays attempt to introduce them now is
untimely. See id. 17:17-18:3.
III.
Legal Standard
A district court has inherent authority to modify a preliminary injunction in

consideration of new facts. A&M Records, Inc. v. Napster, Inc., 284 F.3d 1091, 1098 (9th Cir.
2002) (citing System Federation No. 91 v. Wright, 364 U.S. 642 (1961).
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A party seeking a preliminary injunction must make a clear showing that: (1) it is
likely to succeed on the merits; (2) that it is likely to suffer irreparable harm if an injunction is
not granted; (3) that the balance of equities tips in its favor; and (4) that an injunction is in the
public interest. Winter v. N.R.D.C., 555 U.S. 7, 20, 22 (2008). In the Ninth Circuit, a
preliminary injunction may also be appropriate if a [movant] demonstrates . . . that serious
questions going to the merits were raised and the balance of hardships tips sharply in the
[movants] favor, so long as the Winter irreparable injury and public interest factors are
satisfied. See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-35 (9th Cir. 2011)
(citation omitted).
IV.
Discussion
McMurray argues that the Court should dissolve the injunction because (1) Plaintiff has
unclean hands in its use of The Cochran Firm Trademark and (2) Plaintiff filed a sham action.
See Mot. 18:13-24:28. Alternatively, McMurray requests that the Court increase the bond from
$25,000 to $1,000,000 because the preliminary injunction has caused McMurray damages in an
amount that exceeds one million dollars. Id. 25:1-18. The Court agrees, at this stage, that
Plaintiff has unclean hands and, therefore, declines to address McMurrays second argument and
finds that McMurrays request to lower the bond amount is rendered moot.
A.
Unclean Hands
To prevail on a federal trademark infringement cause of action, a plaintiff must show (1)
ownership of a registered mark; (2) the defendants use of that mark in commerce; and (3) a
likelihood of confusion. 15 U.S.C. 1114(1); KP Permanente Make-Up, Inc v. Lasting
Impression I, Inc., 408 F.3d 596, 602 (9th Cir. 2005). In granting Plaintiffs motion for a
preliminary injunction, Judge Otero found that Plaintiff met its burden that it was likely to
succeed on the merits of its trademark infringement cause of action. Dkt. # 58.
Although the Ninth Circuit found that the district court did not abuse its discretion when
it found that Plaintiff was likely to demonstrate that it owns The Cochran Firm Trademark, it
remanded the action for the district court to reconsider [McMurrays] unclean hands argument
after augmenting the record. Mandate at 3.
As the Ninth Circuit explained, the doctrine of unclean hands is a defense to trademark
infringement suits. Mandate at 4; Fuddruckers, Inc. v. Docs B.R. Others, Inc, 826 F.2d 837,
847 (9th Cir. 1987). Within the context of a trademark suit, the rationale behind an unclean
hands defense is that, when the owner of a trade-mark applies for an injunction . . . it is
essential that the plaintiff should not in his trade-mark . . . be himself guilty of any false or
misleading representation. Clinton E. Worden & Co. v. Cal. Fig. Syrup Co., 187 U.S. 516, 528

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(1903). To succeed on an unclean hands defense, a trademark defendant must show that [the]
plaintiff used the trademark to deceive customers and did so with bad intent. Japan Telecom,
Inc. v. Japan Telecom Am. Inc., 287 F.3d 866, 870 (9th Cir. 2002) (Bad intent is the essence of
the defense of unclean hands) (citations omitted).
Here, because Plaintiff has shown a likelihood of prevailing on the merits of the
trademark cause of action, the Court must determine whether McMurray has demonstrated that
[he is] likely to succeed in proving [his] unclean hands defense. See Demarest v. Quick Loan
Funding, Inc., 2009 WL 940377, *7 (C.D. Cal. 2009); Perfect 10, Inc. v. Amazon.com, Inc., 508
F.3d 1146, 1158 (9th Cir. 2007) (stating that, at a preliminary injunction stage, once a plaintiff
has shown a likelihood of success on the merits, the burden shifts to [the defendant] to show a
likelihood that its affirmative defense will succeed).
i.
Analysis
McMurray contends that Plaintiff has unclean hands in the use of its trademark, The
Cochran Firm because, although it markets itself to be a traditional, nationwide law firm, its
structure reveals that it is, instead, a network of several partnerships that does not meet the
definition of a law firm. Mot. 18:13-22:23.
In opposition, Plaintiff argues that Plaintiffs structure is not a major part of the
tradename and, therefore, its configuration cannot be misleading as a matter of law. Opp.
3:17-23. Plaintiffs is mistaken.
In its Mandate, the Ninth Circuit made clear that the structure of [Plaintiffs business is
important in assessing whether [Plaintiff] has unclean hands. Mandate at 4. In fact, the Ninth
Circuit noted that Plaintiff may be misusing the trademark to deceive the public into believing it
is a single, national firm, when in fact it is a network of separate partnerships. Id. at 4-5.
Here, Plaintiff does not contest that it advertises itself as a national law firm, and instead
argues that this representation is not untrue. Opp. 4:5-7.
After reviewing the evidence submitted by the parties, the Court concludes that
McMurray has met his burden that he is likely to succeed in proving his unclean hands defense.
As both parties agree, Plaintiff has been marketing itself as a traditional, national law firm with
regional offices around the country, and at this point in the litigation, the evidence supports
McMurrays contention that Plaintiffs relationship with its regional offices is composed of a
network of several partnerships where the regional offices are only connected to each other
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through their relationship with Plaintiff like the spokes of a wheel with Plaintiff in the center.
As Defendant points out, Plaintiffs own expert testified that he has no knowledge of any
agreements among Plaintiffs purported regional offices and that The Cochran Firm is a
network of partnerships between Cochran National and the regional entities. TR 60:11-61:11;
Steele Decl. 19.
Plaintiff writes that Defendant has not met his burden that it has unclean hands by
marketing itself as a national firm because Defendants expert did not perform a survey of the
public to determine what their understanding of the term national firm is. Opp. 8:19-26. This
is not fatal to Defendants motion at this point in litigation. First, as the Ninth Circuit implied,
the phrase national firm does not connote a network of separate partnerships. See Mandate
at 4-5 (Specifically, [Plaintiff] may be misusing the trademark to deceive the public into
believing it is a single, national firm, when in fact it is a network of separate partnerships.).
Second, both parties substantially agree on the qualities that the public would expect from a
national firm. For example, Defendant writes that a consumer would expect that a national
law firm would have the expertise of several hundred lawyers, experience, prestige, the
resources of a multi-state institution, and, perhaps most importantly, financial stability. Mot.
18:26-28. Plaintiff lists the following factors that clients could reasonably expect from a
national firm: (1) nation-wide recognition and prestige; (2) large collective experience in a
variety of subject areas; (3) nation-wide standardized resources and procedures; (4) the ability of
clients to collect if something does go wrong; (5) vetting; and (6) control. Opp. 8:19-10:17.
The Court does not doubt that The Cochran Firm and its regional office have prestige by
use of Plaintiffs trademark, but is not so sure that client of the regional offices have the benefit
of large collective experience. Although regional offices all have access to the same client
management system, there is no other evidence of communication across the different regional
offices other than the fact that sometimes multiple office engage in class or multi-district
litigation. See Opp. 6:1-4.
Furthermore, although Plaintiff points out that it provides certain services to the regional
offices accounting, letterhead materials, assistance with HR and legal issues, and the client
services center perhaps standardizing certain elements of the regional offices, testimony by
Plaintiffs principal, Headland, and the operating agreements with the different regional offices
shows that the regional offices shoulder most of the expenses associated with running the
regional offices. See Headland Depo. 9:1-25; Cherry Decl., Exs. A-Q.
Plaintiff agrees with Defendant that one would expect that an office or attorney of a
national firm would be better able to pay should malpractice occur and argues that because it
requires, under its operating agreements with the regional offices, that they maintain a minimum

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amount of insurance, it meets this expectation. Opp. 9:13-21. Plaintiff fails to address,
however, what happens when that regional office insurance fails to provide adequate relief. See
Reply 11:2-4. As the example of Jacksons attempt to collect a judgment from Plaintiff,
described above, Plaintiff and its regional offices present themselves as one firm during some
instances, but also make clear that they are not connected when it comes to certain liability. See
Henriks, Exs. 6-8.
Lastly, the evidence of vetting that the regional offices are managed by a managing
partner that Johnnie Cochran knew and of control over the regional offices the requirement
that they use the same case management software, the tracking of the offices statute of
limitations, and the requirement that the regional offices comply with Plaintiffs National
Operating Procedures do not convince the Court that Plaintiff operates as a single national
firm, as opposed to a franchisor that wants to protect its trademark.
Defendant has met his burden that Plaintiff has unclean hands in the use of its trademark
by advertising itself as a national law firm when there is no evidence that the individual offices
are connected other than through agreements with Plaintiff.
Defendant also argues that Plaintiff does not even meet the definition of a law firm. Mot.
21:20-22:23. Having found that Plaintiff has unclean hands in its use of The Cochran Firm
trademark, the Court does not need to engage in this analysis. However, the Court does so to
emphasize its concern that Plaintiff is deceiving the public when it presents itself as Americas
Law Firm. Dkt. # 58-7.
Although Plaintiff is correct that the definitions of a firm provided under California law
by the California Rules of Professional Conduct are not necessarily the definitions that a public
would attach to the term, the Court finds them informative. After all the Rules of Professional
Conduct are there, in part, to protect the public. See Cal. Rules of Prof. Conduct 1-100(A) (the
purpose and function of the rules is to protect the public and to promote respect and confidence
in the legal profession); see also In re Complex Asbestos Litig., 232 Cal. App. 3d 572, 586
(1991) (writing that the paramount concern in the need to maintain the ethical standards of
professional responsibility must be the preservation of public trust in the scrupulous
administration of justice and the integrity of the bar).
The parties dispute whether The Cochran Firm, together with its regional offices, meets
the definition of a law firm found in Rule1-100(B)(1)(a) of the California Rules of Professional
Conduct. See Mot. 21:20-22:23; Opp. 5:22-8:9. Under this rule, a law firm is defined as: two
or more lawyers whose activities constitute the practice of law, and who share its profits,
expenses, and liabilities. Cal. Rules Prof. Conduct 1-100(B)(1)(a).
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Here, as Plaintiff points out, Plaintiff is entitled to certain profits made by the regional
offices under its operating agreements with them. Opp. 5:27-28. More importantly, however,
there is no evidence of regional offices sharing profits with each other, unless, as Plaintiff points
out, they engage in multi-district litigation or participate in class actions together, which is often
done by different law firms. Id. 5:28-6:4.
In terms of expenses, the evidence shows that while the regional offices are responsible
for most operating expenses, Plaintiff provides them with certain services (accounting, certain
advertising products, IT help, and web site management). Id. 6:5-8:3. Therefore, it does appear
that Plaintiff is sharing expenses with each local office although, again, there is no evidence that
the shared office share expenses with each other.
Lastly, Plaintiff argues that it tracks statutes of limitations, but fails to explain how it,
therefore, shares liability with the regional offices. Id. 8:5-9. That Plaintiff is regularly named
as a Defendant when clients sue for malpractice does not mean that it is sharing liabilities with
the local offices. Id. It does imply, however, that clients believe that Plaintiff and its regional
offices are one firm.
In assessing whether Plaintiff meets the definition of a law firm under the California
Rules of Professional Conduct, the Court finds that while it may be unclear whether Plaintiff and
each regional office can constitute a law firm, Plaintiff, together with all of the individual
regional offices do not fit this definition.
ii.
Defendants Unclean Hands
Plaintiff argues that Defendant cannot bring the unclean hands defense because
Defendant, too, comes to the Court with tainted hands. First, Plaintiff argues that McMurrays
use of The Cochran Firm trademark to deceive the public into believing that he is still part of
The Cochran Firm and his participation in Plaintiffs structure for years constitutes unclean
hands and bar him from relief. Opp. 10:20-12:3. The Court finds that Plaintiffs mere
allegations are not sufficient to bar relief in this instance. Furthermore, even if the allegations
were true, after considering all of the evidence before the Court, it finds that Defendant is likely
to succeed under the doctrine equity as, at this stage in litigation, the evidence shows Plaintiff to
be more culpable.
Accordingly, the Court finds that McMurray has met his burden of showing a likelihood
of success that Plaintiff has unclean hands in the use of The Cochran Firm trademark and is not
entitled to injunctive relief.
V.
Conclusion

#:10559

Case No.
Date
May 12, 2015
Title
For the reasons stated above, the Court GRANTS Defendants motion for an order
dissolving the preliminary injunction. Therefore, the preliminary injunction is DISSOLVED.
Plaintiffs bond is exonerated.
IT IS SO ORDERED.
13

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Case 2:12-cv-05868-PSG-MRW Document 364 Filed 05/12/15 Page 1 of 13 Page ID

UNITED STATES DISTRICT COURT

CV 12-5868 PSG (MRWx)

Present: The Honorable

May 12, 2015

Philip S. Gutierrez, United States District Judge

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

Proceedings (In Chambers):

Order GRANTING Defendants motion for an order dissolving

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UNITED STATES DISTRICT COURT

CV 12-5868 PSG (MRWx)

May 12, 2015

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UNITED STATES DISTRICT COURT

CV 12-5868 PSG (MRWx)

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UNITED STATES DISTRICT COURT

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May 12, 2015

recused herself. Dkt. # 324.

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UNITED STATES DISTRICT COURT

CV 12-5868 PSG (MRWx)

May 12, 2015

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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

CV 12-5868 PSG (MRWx)

May 12, 2015

A district court has inherent authority to modify a preliminary injunction in

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UNITED STATES DISTRICT COURT

CV 12-5868 PSG (MRWx)

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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

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Defendants Unclean Hands

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UNITED STATES DISTRICT COURT

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