James Cole James Cole, then deputy US attorney general, speaking in 2014 at Main Justice. Photo: Diego M. Radzinschi/ ALM

A New York federal trial judge on Tuesday partially unsealed a ruling that provided the court's basis for stopping Sidley Austin partner James Cole, a former Obama-era Justice Department leader, from serving as a defender for the Chinese telecommunications giant Huawei in a U.S. criminal case.

U.S. District Judge Ann Donnelly's order in December disqualifying Cole from participating in the case did not explain her reasoning. Much of the dispute involving Cole's participation has unfolded under seal in the U.S. District Court for the Eastern District of New York. Donnelly's unsealed order only disqualified Cole, based on his prior work at the Justice Department, and not Sidley Austin itself.

"This is not a situation in which disqualifying Mr. Cole will require the defendants to retain new counsel, who would then need to familiarize themselves with the case," Donnelly wrote in her order. "Mr. Cole is one of a large team of able lawyers, some of whom are former prosecutors, from respected law firms."

The Justice Department sought Cole's disqualification based on his role in an investigation that unfolded during his service as deputy attorney general at Main Justice, a position he held from 2010 to 2015. Cole, according to the DOJ, "personally supervised and participated in" an investigation that prosecutors said was "directly implicated" in the criminal charges against Huawei. The government has not revealed the substance of the earlier investigation, and details about that case were redacted from Donnelly's unsealed order.

The disqualification of a lawyer based on prior government service is rare. Lawyers can be prohibited in other instances from representing more than one defendant in the same criminal case. In a pending case in Chicago's federal trial court, the Justice Department has raised questions about whether a partner at Skadden, Arps, Slate, Meagher & Flom should be disqualified based on his previous role as the enforcement director at the U.S. Commodity Futures Trading Commission.

A representative from Huawei did not immediately comment Tuesday evening, and Cole, global co-leader of Sidley Austin's white-collar government investigations and litigation practice, was not immediately reached for comment.

Sidley Austin lawyers argued that the earlier Justice Department investigation that involved Cole did not share "identical" or "essentially the same" facts as the Huawei matter in Brooklyn's federal district court. The law firm also argued that the government had waived any conflict because prosecutors waited until after the indictment was unsealed before seeking to disqualify Cole.

Donnelly said in her order she did not take "lightly" the disqualification of a lawyer in a criminal case.

"Disqualification of an attorney based on his former government service can 'create an unwarranted disincentive to government service' if former government employees are overly restricted in future private practice," Donnelly wrote.

Donnelly concluded that Cole "had immediate access to [redacted] classified and confidential information substantially related to this case." She added: "The fact that Mr. Cole has 'no recollection of the matters' does not change the analysis." Cole's memory, the judge said, "about the details of the investigation he supervised might very well be refreshed as the case progresses."

Huawei was charged in a superseding indictment in January 2019 with various crimes, including conspiracy to commit bank and wire fraud. Prosecutors earlier this month unveiled additional charges including conspiracy to steal trade secrets. The company has called the charges "political persecution, plain and simple."

"None of our products or technologies have been developed through the theft of trade secrets. Huawei's development is the result of our huge investment in R&D and the hard work of our employees over the past three decades," Huawei said in a statement Feb. 14.

Huawei, the world's largest telecommunications equipment manufacturer, is still represented by a team from Sidley Austin, including white-collar partners Michael Levy in New York and Mark Hopson in Washington. Huawei is also represented by a team from Jenner & Block, including partner David Bitkower in Washington. In December, Huawei said Steptoe & Johnson LLP will serve as additional defense counsel in the Brooklyn case.

The company has additionally turned to lawyers from Jones Day and Morgan, Lewis & Bockius in other matters involving disputes with the U.S. government.

 

Read more:

NY Judge Disqualifies Sidley's James Cole From Defending Huawei

Sidley Austin Augments Huawei Work With New US Lobbying Notice

Prosecutors Reveal Why They Want James Cole Disqualified in Huawei Case

Huawei Taps Jones Day, Morgan Lewis in Challenge to US Defense Law