Snapchat Founders Face New Twist In Legal Battle As Alleged Co-Founder Files To Disqualify Their Lawyers

Next Story

Shervin Pishevar And Scott Stanford’s New Startup Studio Sherpa Is Raising $150 Million For New Fund

Reggie Brown claims to have co-founded Snapchat, and in the latest twist to his suit against the company, he’s trying to disqualify its high-profile law firm.

Brown filed motions in a Los Angeles court on Thursday to disqualify the law firm of Quinn Emanuel Urquhart & Sullivan LLP (“Quinn Emanuel”) from representing Evan Spiegel, Bobby Murphy, and Snapchat Inc.

Brown alleges that he was advised by Anthony Alden, a Quinn Emanuel lawyer, on his case against Snapchat from November 2012 to January 2013. In April, Quinn Emanuel began defending Spiegel and Murphy after they replaced Cooley LLP for this case. Before Alden began representing Brown, Quinn Emanuel had Brown sign a waiver saying it did not represent him, but Brown says he and Alden did not limit their discussions, and he believed they were confidential communications between an attorney and client.

A representative from Cooley LLP said they could not comment for this story, as Cooley LLP is still Snapchat’s corporate counsel. Brown’s lawyers say Alden has not been one of the Quinn Emanuel attorneys representing Spiegel, Murphy, and Snapchat in the case, but that case precedent shows the entire firm should be disqualified.

“Mr. Brown signed a written contract saying Quinn Emanuel could represent the Snapchat defendants if we turned down his matter, provided the partner to whom he spoke was not involved in our representation of Snapchat,” Quinn Emanuel said in a company statement. “Mr. Alden has been ‘walled’ from the matter pursuant to that agreement.  It’s disappointing that Mr. Brown is refusing to honor his clear written promise to our firm.”

Snapchat, the hot ephemeral messaging app, just raised $80 million at an $800 million pre-money valuation.

Brown filed a lawsuit in February 2013 alleging that he had come up with the idea for an app for self-deleting photos in the spring of 2011; he claimed that he worked with Spiegel and Murphy on the app, then called Picaboo, until they forced him out of the company in August of 2011 following an argument over a patent filing.

“As you might imagine, seeing accusations in the media and not being able to share our side of the story is incredibly frustrating,” Snapchat said in a company statement. “Our team has spent the last two years working hard to make Snapchat what it is today. We will continue to focus our energy on building an awesome company and we believe the merits of the case will stand on their own in court.”

Until the case is resolved, Spiegel, Brown, and Snapchat can say very little publicly, so the advantage is heavily in Brown’s favor to try to win over the court of public favor.snapchat-suit7

According to the filing, Brown reached out to Spiegel and Murphy in mid-2012 to settle their dispute out of court. On May 16, 2012, Cooley LLP, Spiegel and Murphy’s representatives at the time, sent Brown a letter, calling his actions “a transparent and desperate attempt to shake down Mr. Spiegel and Mr. Murphy for a share in a company to which you contributed nothing.”

On November 2, 2012, Brown reached out to Alden seeking representation; Alden confirmed to Brown that Quinn Emanuel had no conflict of interest for the proposed lawsuit, and Brown signed a waiver from Alden that said, among other things, that Brown was not represented by Quinn Emanuel and that Quinn Emanuel could represent other parties down the line if they so chose. In the court filing Brown says Alden told him, “This was just ‘a precaution we need to take.’ Given these assurances, I just signed the document and did not ask any question about it.”

From November 2012 to January 2013, Brown and Alden discussed the strengths and weaknesses of Brown’s proposed case several times on the phone, and Brown sent Alden a USB and several emails with key documents for the suit.

“Mr. Alden and I did not limit our discussions in any way,” Brown claims in the motion. “Given the nature of our discussion and Mr. Alden’s assurances, I believed that our discussions were confidential communications by and between an attorney and his client.”

On December 12, 2012, Om Malik and Eric Eldon separately reported that Snapchat was raising a Series A round led by Benchmark Capital.

Brown writes in his motion,

“On or about December 12, 2012 I informed Mr. Alden that an article had been published indicating that Benchmark Capital was funding Snapchat. At no point did Mr. Alden (or anyone else at the firm for that matter) disclose to me that Benchmark Capital was a Quinn Emanuel client. Furthermore, at no point did anyone at Quinn Emanuel discuss with me any conflict, actual or potential concerning Quinn Emanuel’s representation of Snapchat, Inc., Toyopa Group LLC or Benchmark Capital.”

Brown’s attorneys write in their motion that Quinn Emanuel had a conflict at this time because Alden was counseling Brown, while Quinn Emanuel client Benchmark had invested in Snapchat, which would dilute Brown’s claimed ownership interest in Snapchat. Additionally, Quinn Emanuel listed Lightspeed Venture Partners, which provided Snapchat’s seed funding, as a potential defendant in the waiver that Brown signed.

On January 10, 2013, Brown says Alden sent him an email informing him that Quinn Emanuel would not represent him “at the current time. He says Alden never gave any reason for this decision. Alden then referred and introduced Brown to his current representatives, Lee Tran & Liang (LTL) on January 14.

On February 8, Snapchat announced it had raised a $13.5 million Series A round led by Benchmark Ventures, and on February 21, Brown filed his lawsuit. Spiegel, Murphy, Snapchat, and the Toyopa Group (one of Brown, Spiegel, and Murphy’s original names for their organization, before their Pictaboo app became Snapchat) retained Cooley LLP to represent them.

Brown, Spiegel, and Murphy had their respective depositions for the trial on April 5, 8, and 9. During Brown’s deposition, he confirmed that he had sought legal counsel from Alden and Quinn Emanuel.

On April 30 2013, Spiegel, Murphy, and Snapchat substituted Quinn Emanuel for Cooley LLP as their representation. Brown’s representatives, led by Luan Tran and James Lee, learned that Benchmark Capital is a Quinn Emanuel client, and asked for a one-week standstill of litigation; the two parties then underwent two unsuccessful mediation sessions and agreed to another standstill until June 20.

On June 27, after the parties agreed to another stay, Tran filed a motion stating that Alden “has an incurable and non-waivable conflict of interest,” and that Spiegel, Murphy, and Snapchat “attempt to gain an unfair tactical advantage by hiring the same law firm that Plaintiff [Brown] consulted with.”

Tran claims the waiver Brown signed is invalid due to its breadth and scope, and that Quinn Emanuel needed to have Brown sign a second waiver once a real conflict (Benchmark) emerged.

“In the end, no amount of spin can allow Defendants to hire a law firm to litigate against the same party that the law firm was just counseling on the same case,” Tran writes. “No court has tolerated this, and this Court should not be the first one to do so.”

Brown’s motion to disqualify will be heard in a Los Angeles Superior Court on August 1. Until then, neither side can litigate.

“Reggie [Brown] continues to look forward to litigating this case for his full one-third interest in the company,” Lee tells me.

Benchmark Capital and Cooley LLP declined to comment for this story. Lightspeed Capital did not respond to multiple requests for comment for this story.

Disclosure: I am currently a rising senior at Stanford and the president of the Stanford chapter of Kappa Sigma. Brown, Spiegel, and Murphy were all members of Kappa Sigma at some point during their time at Stanford. By the time I joined the fraternity, in the spring of 2011 (my freshman year), Murphy had graduated from Stanford, and Spiegel and Brown had left the fraternity.

I have never met Brown. I’ve met Murphy once. I have gotten to know Spiegel since the spring of 2012, mostly through interviews for TechCrunch. This in no way affects my objectivity or ability to report on this lawsuit or the company.

Snapchat: Motion to Disqualify

Snapchat: Luan Tran Declaration To Disqualify

Snapchat: Reggie Brown Declaration