Sills Cummis & Gross office sign. Photo by Carmen Natale

Defendants in a suit over control of a new oil refining technology in Monmouth County Superior Court are seeking to disqualify New Jersey's Sills Cummis & Gross from representing the plaintiffs.

The disqualification motion says that Sills Cummis is conflicted out of representing plaintiff Pristec Refining Technologies, a closely held entity, because of the law firm's concurrent duties to defendants who are constituent members of that company. In particular, Sills Cummis has duties to defendant Pristec America, which holds a 75% interest in Pristec Refining Technologies and owns the license to the technology that is at the center of the case, according to the motion.

The suit stems from a dispute over the operating and licensing agreements for a proprietary process for refining crude oil that promises to reduce waste and carbon emissions. That process, known as the Pristec Technology, has an estimated value of approximately $540 million, according to a court document.

The defendants filed the disqualification motion on Jan. 23. The suit, filed in 2017, claims that defendant Joseph Laura solicited investments in the Pristec Technology from W. Robert Earle II and his brothers, Thomas and Michael Earle, who ultimately invested $4 million in the venture. The Earle brothers, whose companies are plaintiffs in the case, later alleged that their solicitation by Laura was part of a scheme to misappropriate investor funds.

Laura is also a defendant in a separate action brought by the U.S. Securities and Exchange Commission in the U.S. District Court for the Eastern District of New York, which accuses him of scheming to defraud investors in the oil refining method.

The suit claims that Pristec AG, the Austrian company that is the majority owner of the Pristec Technology, breached a contract with Pristec Refining Technologies USA and entities owned by the Earle brothers.

In seeking to have Sills Cummis taken off the case, the defendants cite a 2014 Appellate Division ruling, Comando v. Nugiel. In that case, the Bridgewater, New Jersey, firm of Norris, McLaughlin & Marcus was held to have a disqualifying conflict of interest in representing one co-owner of a limited liability company in a dispute with the other co-owner after it represented the LLC in connection with its formation.

Kevin O'Connor, of Peckar & Abramson in River Edge, New Jersey, who represents the defendants in the Pristec case, also represented the co-owner in Comando who asserted the conflict against Norris McLaughlin.

In Comando, the court held that Norris McLaughlin had represented the LLC at a time when it was owned by the two members, and, essentially, later sought to choose sides in the inter-company dispute, something that was prohibited under the Rules for Professional Conduct, O'Connor wrote.

"This is Comando all over again. In essence, when a law firm represents a closely-held legal entity like [Pristec Refining Technologies], it also has duties to its constituent members, particularly to [Pristec America Inc.] which holds a majority interest in the LLC and owns the license rights! The temerity of [Sills Cummis] to undertake representation of PRT under these circumstances knows no bounds," O'Connor writes.

Sills Cummis' Thomas Della Croce and William Tellado, representing the plaintiffs, did not respond to requests for comment.