Michael Sean Quinn, Ph.D, J.D., Etc., Author
Law Office of Quinn and Quinn
1300 West Lynn #208
1300 West Lynn #208
Austin, Texas 78703
(o) 512-296-2594
(c) 512-656-0503
This Preface is attached to each of the parts, oppressive though that may appear.This blog is part (1/11th) of a collection called the ELEVEN COMMANDMENTS OF LEGAL ETHICS. There are 11 separate mini-blogs; they need not be read in any particular order. I have tried to keep them “together,” but cyber-success is not an inevitability when I am around. An early version* of it was published a decade or so ago. Before that very short speech versions were used as part of a day long CLE course ordered by the Supreme Court of Texas for new lawyers. Later for several years it was used in other CE or CLE contexts. All of this can be found on my Resume which is linked to (attached to) my website. www.michaelseanquinn.com. There are video versions somewhere in the cyber-sphere, and if not there in the cyber-world or in c-space and/or in the so-called “real world,” for sale. As old as it is, the collection–whether in print, in the “blogus-sky,” on a something like a motion picture–is not really out of date, except there are not explicit references it to legal ethics and the cyber world. At the same the obligations of the lawyers have not changed much, except now there is a new dimension to our confidentiality obligations and and out obligations to keep up to date. The “code numbers” are sometimes to the ABA Model Rules and sometimes to the Texas Rules of Professional Conduct. (*The term “version” means what it says: wordings change and ideas shift, tough the latter very little. Earlier version can be found entered on July 2, 2012 and on March 12, 2014.) The drafts of this manuscript, and others in this series were prepared somewhere between several and a lot of time. Consequently, the outline form is substantially than perfect down the left hand ledge.
These disquisitions are revisions something I wrote at least several years ago. First editions of these essays were begun some time ago. Somehow their print got locked in, to some degree, so some parts of the essays were thrown out of kilter and can’t be made right today. This is particularly true along the left margins of some of the essays.
Some of the Blogs will contain supplementary additions. Those added after January 1, 2015 will probably be dated, barring oversight. Readers may note that many of the cites are Texas cases. This resulted from the history of the contents.
This blog, like some of the others, will contain supplementary additions. Like the others, it will also use some abbreviations from time to time: L for lawyer, LF for law firm, C for client.
Given the purposes and context in which the early versions of the essays were written, many of the legal rules explicitly numbered are from The Texas Rules that were built upon the ABA Model Rules.
COMMANDMENT SEVEN: AVOID DUELING CAPACITIES
Dual capacities
frequently duel. Two capacities are
significant here. One of them is representations;
the other is roles.
Representations can duel with other representations. In other words, representations can
conflict. Moreover, a person can have
too many different relationships with another person: L can have too many roles in
the life of C. It is important to
notice not only that representations can conflict with representations and
roles with roles; representations may also conflict with roles, and vice
versa. Conflicting representations
generally involve three or more entities.
Conflicting roles need only involve two entities. Avoidance presupposes being observant,
being sensitive, being wary, and sometimes, being courageous.
frequently duel. Two capacities are
significant here. One of them is representations;
the other is roles.
Representations can duel with other representations. In other words, representations can
conflict. Moreover, a person can have
too many different relationships with another person: L can have too many roles in
the life of C. It is important to
notice not only that representations can conflict with representations and
roles with roles; representations may also conflict with roles, and vice
versa. Conflicting representations
generally involve three or more entities.
Conflicting roles need only involve two entities. Avoidance presupposes being observant,
being sensitive, being wary, and sometimes, being courageous.
Recall that a
lawyer representing a person say in a probate or estate planning manner, not
have a conflict of interest if the attorney reasonably believes that the client
is incompetent and the lawyer seeks to protect the interest of the client say,
by establishing a guardianship of some sort.
ACTEC-157. At the same time, if a
lawyer is hired to resist the establishment of some sort of guardianship, the
lawyer may not suit himself.
lawyer representing a person say in a probate or estate planning manner, not
have a conflict of interest if the attorney reasonably believes that the client
is incompetent and the lawyer seeks to protect the interest of the client say,
by establishing a guardianship of some sort.
ACTEC-157. At the same time, if a
lawyer is hired to resist the establishment of some sort of guardianship, the
lawyer may not suit himself.
A. Legal Rules
1. 1.06: Lawyers may not represent adverse parties
without consent. Parties are adverse
when, in a single matter or in substantially related matters, the interests of
one person are materially and directly adverse to the interests of another
person, or where the firm’s interests might be affected.
without consent. Parties are adverse
when, in a single matter or in substantially related matters, the interests of
one person are materially and directly adverse to the interests of another
person, or where the firm’s interests might be affected.
2. 1.08: Lawyers may not be involved in business
transactions that are adverse to their clients’ interests.
transactions that are adverse to their clients’ interests.
3 1.08(f): Lawyers shall not make aggregate settlements
and then sell them to their clients.
and then sell them to their clients.
4. 1.09(a)(1): Lawyers shall not proceed against former
clients if their previous work would be called into question, or if the matters
are substantially related.
clients if their previous work would be called into question, or if the matters
are substantially related.
5. 1.05: Lawyers shall keep their client’s
confidences.
confidences.
6. 1.10: Lawyers leaving government employment must be
careful not to represent parties adverse to the government in relevant ways.
careful not to represent parties adverse to the government in relevant ways.
7. 1.12: When a lawyer represents an organization, he
or she represents the organization, and not people who work for it. If
the lawyer observes, or comes to know about, misconduct by employees, partners,
directors, and so forth, this lawyer must take “reasonable remedial action.” This is a “Squeal Rule.”
or she represents the organization, and not people who work for it. If
the lawyer observes, or comes to know about, misconduct by employees, partners,
directors, and so forth, this lawyer must take “reasonable remedial action.” This is a “Squeal Rule.”
8. 1.13: Lawyers should engage in public service
activities, but those activities cannot be inconsistent with the interests of
their clients.
activities, but those activities cannot be inconsistent with the interests of
their clients.
9. 2.02: Lawyers may make evaluations for use by third
parties, but only if the client consents and it can be done reasonably.
parties, but only if the client consents and it can be done reasonably.
10. 3.08(a):
Lawyers shall not represent a client when the lawyer must appear as a witness
for the client, or against the client, for that matter.
Lawyers shall not represent a client when the lawyer must appear as a witness
for the client, or against the client, for that matter.
B. Avoid Multiple Masters.
0. Preliminary Observation: To some degree, lawyers always have multiple
roles, even when they don’t have multiple masters. Lawyers are expected to be advisers,
advocates, negotiators, intermediaries, evaluators, and officers of courts.56 These roles can sometimes conflict. That is one of the tensions of everyday life.
roles, even when they don’t have multiple masters. Lawyers are expected to be advisers,
advocates, negotiators, intermediaries, evaluators, and officers of courts.56 These roles can sometimes conflict. That is one of the tensions of everyday life.
1. Commentary
a. Concurrent Adverse Representations. This is an automatic ethics violation, absent
consent. The Model Rules are clear on this point. I believe that the applicable Texas Rules are pretty much the same,
although their logical structure is different and their verbiage is both quite
different and extremely difficult to understand. For a case which suggests that the Texas rule
might be different from the Model Rule, see In re Dresser Industries,
972 F.2d 540 (5th Cir. 1992). This case
must be read very carefully, however.
consent. The Model Rules are clear on this point. I believe that the applicable Texas Rules are pretty much the same,
although their logical structure is different and their verbiage is both quite
different and extremely difficult to understand. For a case which suggests that the Texas rule
might be different from the Model Rule, see In re Dresser Industries,
972 F.2d 540 (5th Cir. 1992). This case
must be read very carefully, however.
Not only does concurrent adverse
representation subject a lawyer to a grievance, it subjects the lawyer to
disqualification, and the lawyer probably cannot recover fees. In addition, his client may not be able to
recover the fee paid to the conflicted lawyer under a fee-shifting statute,
such as an anti-trust statute. Image
Technical Service, Inc. v. Eastman Kodak Co., 136 F.3d 1354 (9th Cir.
1998). See also Mindscape,
Inc. v. Media Depo, Inc., 973 F. Supp. 1130 (N.D. Cal. 1997). For a concurrent representation case in which
a court refused to distinguish between cases involving a substantial
relationship and those which do not, see GATX/AIRLOG Co. v. Evergreen
Int’l Airlines, Inc., 8 F. Supp.2d 1182 (N.D. Cal. 1998) (concurrent
adverse representations absolutely prohibited even if no substantial
relationship).
representation subject a lawyer to a grievance, it subjects the lawyer to
disqualification, and the lawyer probably cannot recover fees. In addition, his client may not be able to
recover the fee paid to the conflicted lawyer under a fee-shifting statute,
such as an anti-trust statute. Image
Technical Service, Inc. v. Eastman Kodak Co., 136 F.3d 1354 (9th Cir.
1998). See also Mindscape,
Inc. v. Media Depo, Inc., 973 F. Supp. 1130 (N.D. Cal. 1997). For a concurrent representation case in which
a court refused to distinguish between cases involving a substantial
relationship and those which do not, see GATX/AIRLOG Co. v. Evergreen
Int’l Airlines, Inc., 8 F. Supp.2d 1182 (N.D. Cal. 1998) (concurrent
adverse representations absolutely prohibited even if no substantial
relationship).
Some states distinguish between two types of
clients in evaluating concurrent adverse representations. Some states distinguish between “traditional
clients” and “vicarious clients.” Most
states apply disqualification rules much more stringently to so-called
traditional clients than to vicarious clients.
Usually, this test is applied to parent and subsidiary
corporations. Sometimes it is also
applied to partners and partnerships. Ives v.
Guilford Mills, Inc., 3 F. Supp.2d 191 (N.D.N.Y. 1998).
clients in evaluating concurrent adverse representations. Some states distinguish between “traditional
clients” and “vicarious clients.” Most
states apply disqualification rules much more stringently to so-called
traditional clients than to vicarious clients.
Usually, this test is applied to parent and subsidiary
corporations. Sometimes it is also
applied to partners and partnerships. Ives v.
Guilford Mills, Inc., 3 F. Supp.2d 191 (N.D.N.Y. 1998).
If one client retains a lawyer in connection
with one matter, but before the lawyer can do anything for that client, he is
retained by another to sue the first one, frequently, the lawyer can chose
which client he wants to take. The
question will be how far did he get into the first representation. If he didn’t get into it at all, the chances
are he will not be disqualifed. Cruz
v. Hinojosa, 12 S.W.3d 545 (Tex. App.–San Antonio 1999, pet. denied).
with one matter, but before the lawyer can do anything for that client, he is
retained by another to sue the first one, frequently, the lawyer can chose
which client he wants to take. The
question will be how far did he get into the first representation. If he didn’t get into it at all, the chances
are he will not be disqualifed. Cruz
v. Hinojosa, 12 S.W.3d 545 (Tex. App.–San Antonio 1999, pet. denied).
For an absolutely marvelous case in which a
lawyer represented both sides of a loan transaction, while involved in a
romantic relationship with one party, but representing the other side of the
transaction and eventually becoming involved in litigation on both sides of the
dispute following the transaction, see In re Wittemyer, 980 P.2d 148
(Ore. 1999).57
lawyer represented both sides of a loan transaction, while involved in a
romantic relationship with one party, but representing the other side of the
transaction and eventually becoming involved in litigation on both sides of the
dispute following the transaction, see In re Wittemyer, 980 P.2d 148
(Ore. 1999).57
a. Class Actions: Concurrent representations are unavoidable in
class actions. The realities of class
actions are complex and shifting. Legal
requirements governing concurrent representations are difficult to sort
out. As a consequence, the conflict
rules are relaxed and change to some degree in the context of class
actions. Lazy Oil Co. v. Witco Corp.,
166 F.3d 581(3rd Cir. 1999) (“If, by applying the usual rules on
attorney-client relations, class counsel could easily be disqualified in these
cases, not only would the objectors enjoy great “leverage,” but many fair and
reasonable settlements would be undermined by the need to find substitute
counsel after months or even years of fruitful settlement negotiations. ‘Moreover, the conflict rules do not appear
to be drafted with class action procedures in mind and may be at odds with
policies underlying class action rules.’”
Id. at 589.) (citing Bruce A. Green, Conflicts of Interest in
Litigation: The Judicial Role, 65 Fordham L. Rev. 71, 127 (1996)).
class actions. The realities of class
actions are complex and shifting. Legal
requirements governing concurrent representations are difficult to sort
out. As a consequence, the conflict
rules are relaxed and change to some degree in the context of class
actions. Lazy Oil Co. v. Witco Corp.,
166 F.3d 581(3rd Cir. 1999) (“If, by applying the usual rules on
attorney-client relations, class counsel could easily be disqualified in these
cases, not only would the objectors enjoy great “leverage,” but many fair and
reasonable settlements would be undermined by the need to find substitute
counsel after months or even years of fruitful settlement negotiations. ‘Moreover, the conflict rules do not appear
to be drafted with class action procedures in mind and may be at odds with
policies underlying class action rules.’”
Id. at 589.) (citing Bruce A. Green, Conflicts of Interest in
Litigation: The Judicial Role, 65 Fordham L. Rev. 71, 127 (1996)).
b. Conflicts and Malpractice. When a lawyer tries to represent more than
one party in a touchy situation, it can lead not only to disqualifying
conflicts, but also to malpractice. In FDIC
v. Clark, 978 F.2d 1541 (10th
Cir. 1992), lawyers attempted to
represent both a bank and a senior official of the bank. The senior official had been involved in some
criminal shenanigans, and the lawyers attempted to assist both the bank and the
senior official. They defended the
malpractice case on the grounds that they were lied to by the senior official,
and, because he was a senior official, the bank knew everything he did. A lawyer cannot be guilty of negligence when
his client lies to him. Since the senior
official lied, the lawyers argued that the bank lied as well. The court rejected this gambit. But see FDIC v. Ernst & Young, 967 F.2d 166 (5th
Cir. 1992) (accounting case).
one party in a touchy situation, it can lead not only to disqualifying
conflicts, but also to malpractice. In FDIC
v. Clark, 978 F.2d 1541 (10th
Cir. 1992), lawyers attempted to
represent both a bank and a senior official of the bank. The senior official had been involved in some
criminal shenanigans, and the lawyers attempted to assist both the bank and the
senior official. They defended the
malpractice case on the grounds that they were lied to by the senior official,
and, because he was a senior official, the bank knew everything he did. A lawyer cannot be guilty of negligence when
his client lies to him. Since the senior
official lied, the lawyers argued that the bank lied as well. The court rejected this gambit. But see FDIC v. Ernst & Young, 967 F.2d 166 (5th
Cir. 1992) (accounting case).
c. Lawyer As Witness. Sometimes, when an attorney has to be a
witness, that attorney is disqualified from serving as counsel in the
case. Courts are extremely reluctant to
disqualify attorneys, however. Mere
testimony about attorneys’ fees never disqualifies an attorney. Courts are often reluctant to disqualify
attorneys even when they have to appear as substantive witnesses, especially
when that testimony results from some interactive process leading up to the
lawsuit. Anderson Producing, Inc. v.
Koch Oil Co., 929 S.W.2d 416 (Tex. 1996).58
witness, that attorney is disqualified from serving as counsel in the
case. Courts are extremely reluctant to
disqualify attorneys, however. Mere
testimony about attorneys’ fees never disqualifies an attorney. Courts are often reluctant to disqualify
attorneys even when they have to appear as substantive witnesses, especially
when that testimony results from some interactive process leading up to the
lawsuit. Anderson Producing, Inc. v.
Koch Oil Co., 929 S.W.2d 416 (Tex. 1996).58
d. Government Lawyers. The Ethics in Government Act forbids many
successive representations. 18 U.S.C.
§ 207. Under certain circumstances,
this statute will not apply to lawyers who become witnesses. EEOC v. Exxon Corp., 202 F.3d 755 (5th
Cir. 2000) (not the same matter–not really).
successive representations. 18 U.S.C.
§ 207. Under certain circumstances,
this statute will not apply to lawyers who become witnesses. EEOC v. Exxon Corp., 202 F.3d 755 (5th
Cir. 2000) (not the same matter–not really).
e. Loyalty: Loyalty is an important virtue. Lawyers must be loyal to their clients. This is a principal theme of the law
governing lawyers. A lawyer may not take
on a client when loyalty to that client might be compromised, or where the
representation might compromise loyalty to another client. Hence there
are crucial questions:
governing lawyers. A lawyer may not take
on a client when loyalty to that client might be compromised, or where the
representation might compromise loyalty to another client. Hence there
are crucial questions:
(1) “Can I be fully loyal to each of these
folks?”
folks?”
(2) “Can I be a
faithful and aggressive steward of the interests of both of these people?”
faithful and aggressive steward of the interests of both of these people?”
(3) “Can loyalty be
compromised absent multiple clients?”
The answer is: Yes! Of course! Is it wise in a multi-defendant criminal
trial for L, who is representing Dn, to enter into an
agreement that the lawyer for one of the other defendants shall be “lead
counsel,” and that L shall ask no question without getting the prior
approval of lead counsel? Such
agreements are clearly permitted, but are they wise? They certainly do not always support an allegation
of ineffective assistance of counsel. United
States v. Merlino, 2 F. Supp.2d 647 (E.D. Pa. 1997). It is also clear that lead counsel does not
become the lawyer for Dn as the result of a joint defense
agreement.
compromised absent multiple clients?”
The answer is: Yes! Of course! Is it wise in a multi-defendant criminal
trial for L, who is representing Dn, to enter into an
agreement that the lawyer for one of the other defendants shall be “lead
counsel,” and that L shall ask no question without getting the prior
approval of lead counsel? Such
agreements are clearly permitted, but are they wise? They certainly do not always support an allegation
of ineffective assistance of counsel. United
States v. Merlino, 2 F. Supp.2d 647 (E.D. Pa. 1997). It is also clear that lead counsel does not
become the lawyer for Dn as the result of a joint defense
agreement.
(4) Egregious
Example of Disloyalty. United States v. Sabri, 973 F. Supp. 134
(W.D.N.Y. 1996). A criminal defendant
made threats against judges and other government officials. His immigration lawyer thought them credible
and turned him in. She thereafter
cooperated with the government in making tape recordings of a discussion with
the client that she began. On the basis
of her disclosures and on the basis of the tapes, her client was indicted. The count and the indictment based on the
tape recordings were dismissed. The
counts based upon the initial disclosures were not. Can there be a conflict between a lawyer’s
duty of loyalty to his client and a lawyer’s duty to refrain from assisting in
a crime?
Example of Disloyalty. United States v. Sabri, 973 F. Supp. 134
(W.D.N.Y. 1996). A criminal defendant
made threats against judges and other government officials. His immigration lawyer thought them credible
and turned him in. She thereafter
cooperated with the government in making tape recordings of a discussion with
the client that she began. On the basis
of her disclosures and on the basis of the tapes, her client was indicted. The count and the indictment based on the
tape recordings were dismissed. The
counts based upon the initial disclosures were not. Can there be a conflict between a lawyer’s
duty of loyalty to his client and a lawyer’s duty to refrain from assisting in
a crime?
(5) Under most
circumstances, a lawyer will not be permitted to represent multiple criminal
defendants, if he is going to have to cross-examine some of his own
clients. That lawyer will probably be
disqualified, even if the client wants him and the witnesses are prepared to
waive any conflict. United States v.
Stewart, 185 F.3d 112 (3rd Cir. 1999).
circumstances, a lawyer will not be permitted to represent multiple criminal
defendants, if he is going to have to cross-examine some of his own
clients. That lawyer will probably be
disqualified, even if the client wants him and the witnesses are prepared to
waive any conflict. United States v.
Stewart, 185 F.3d 112 (3rd Cir. 1999).
(6) A lawyer’s business
interests must not interfere with his legal judgment on behalf of a
client. When they do, he is guilty of
less than scrupulous fidelity and there is a presumption of impropriety. In re Weier, 994 S.W.2d 554 (Mo. 1999).
The prudent lawyer will make sure that the client has acknowledged full
disclosure in writing when the lawyer is doing business with a client and representing
him.
(7) Sometimes the lawyer(s) himself can be part of the duel; the lawyer can be the person whose interests are in conflict with those of the client. Strangely, an incompetent lawyer failed to file timely motions for habeas corpus in a federal district court regarding a death sentence and then tried to prevent the case being handed over to a capable lawyer. Christeson v. Roper, 574 U.S. ____ (2015).
interests must not interfere with his legal judgment on behalf of a
client. When they do, he is guilty of
less than scrupulous fidelity and there is a presumption of impropriety. In re Weier, 994 S.W.2d 554 (Mo. 1999).
The prudent lawyer will make sure that the client has acknowledged full
disclosure in writing when the lawyer is doing business with a client and representing
him.
(7) Sometimes the lawyer(s) himself can be part of the duel; the lawyer can be the person whose interests are in conflict with those of the client. Strangely, an incompetent lawyer failed to file timely motions for habeas corpus in a federal district court regarding a death sentence and then tried to prevent the case being handed over to a capable lawyer. Christeson v. Roper, 574 U.S. ____ (2015).
(8) A lawyer may not
represent a co-defendant in a criminal action, where the lawyer is also one of
the accused. In re Thayer, 745
N.E.2d 207 (Ind. 2001). In this case,
the lawyer also overcharged the client in an unrelated matter. The lawyer was suspended without automatic
reinstatement.)
represent a co-defendant in a criminal action, where the lawyer is also one of
the accused. In re Thayer, 745
N.E.2d 207 (Ind. 2001). In this case,
the lawyer also overcharged the client in an unrelated matter. The lawyer was suspended without automatic
reinstatement.)
(9) Lawyers need to be
particularly careful when they have comatose individuals as their clients. Record keeping, for example, must be
meticulous. In re Roberson, 544
S.E.2d 715 (Ga. 2001) (suspension with restitution a condition precedent upon
reinstatement).
particularly careful when they have comatose individuals as their clients. Record keeping, for example, must be
meticulous. In re Roberson, 544
S.E.2d 715 (Ga. 2001) (suspension with restitution a condition precedent upon
reinstatement).
f. Consent: Many rules of professional responsibility can
be, as it were, suspended, if the lawyer has informed client consent. If a lawyer intends to do something which
would otherwise contravene a rule of professional responsibility, the lawyer
should make certain that the client is adequately advised on the rule in
question. See Michael Sean Quinn, Advance
(Client) Consent, State Bar of Texas, Recognizing
and Resolving Conflicts of Interests F (1997). Courts recognize that client consent destroys
problematic conflicts of interest. At
the same time, courts will sometimes limit the activities of counsel when they
represent more than one party in litigation.
See Welsh v. Paicls, 26 F.Supp.2d. 244 (D. Mass. 1998). Acushnet Co. v. Coaters, Inc., 972
F. Supp. 41 (D. Mass. 1997) (Plaintiffs by agreement used the same lawyer. This act followed an informed agreement, and
the conflicts facing the plaintiffs were “not so deep as to make it impossible
or impermissible for them to agree to a form of joint representation.” Id. at 70. “In view of their choice for common
representation, however, I find that the attorneys they have chosen are
disabled from arguing to the court for any judicial allocation of shares among
settling parties themselves; the attorneys would inevitably be preferring one
client’s interest over another client’s interest in attempting to do so.” Id.)
See Dacotah Marketing and Research, L.L.C. v. Versatility, Inc.,
21 F.Supp.2d 570 (E.D. Va. 1998). (The
law firm may not represent both plaintiff and a third-party defendant. Lawyers must avoid the appearance of
impropriety, and all doubts about conflicts of interest must be resolved in
favor of disqualification. Id at 582.)
be, as it were, suspended, if the lawyer has informed client consent. If a lawyer intends to do something which
would otherwise contravene a rule of professional responsibility, the lawyer
should make certain that the client is adequately advised on the rule in
question. See Michael Sean Quinn, Advance
(Client) Consent, State Bar of Texas, Recognizing
and Resolving Conflicts of Interests F (1997). Courts recognize that client consent destroys
problematic conflicts of interest. At
the same time, courts will sometimes limit the activities of counsel when they
represent more than one party in litigation.
See Welsh v. Paicls, 26 F.Supp.2d. 244 (D. Mass. 1998). Acushnet Co. v. Coaters, Inc., 972
F. Supp. 41 (D. Mass. 1997) (Plaintiffs by agreement used the same lawyer. This act followed an informed agreement, and
the conflicts facing the plaintiffs were “not so deep as to make it impossible
or impermissible for them to agree to a form of joint representation.” Id. at 70. “In view of their choice for common
representation, however, I find that the attorneys they have chosen are
disabled from arguing to the court for any judicial allocation of shares among
settling parties themselves; the attorneys would inevitably be preferring one
client’s interest over another client’s interest in attempting to do so.” Id.)
See Dacotah Marketing and Research, L.L.C. v. Versatility, Inc.,
21 F.Supp.2d 570 (E.D. Va. 1998). (The
law firm may not represent both plaintiff and a third-party defendant. Lawyers must avoid the appearance of
impropriety, and all doubts about conflicts of interest must be resolved in
favor of disqualification. Id at 582.)
g. Waiver. Another name for consent is waiver.
(1) Waiver is the fully
intentional (and therefore with knowledge) waiver of a known legal right. If a lawyer does not fully inform a client
about the nature and consequences of a conflict, the client’s waiver is ineffective. Lawyers are subject to discipline for failing
to make full disclosure to clients in this context. In re Wyllie, 19 P.3d 338 (Ore.
2001).
intentional (and therefore with knowledge) waiver of a known legal right. If a lawyer does not fully inform a client
about the nature and consequences of a conflict, the client’s waiver is ineffective. Lawyers are subject to discipline for failing
to make full disclosure to clients in this context. In re Wyllie, 19 P.3d 338 (Ore.
2001).
(2) Of course, all
waivers have to be forward-looking. This
is permitted, although one wonders what the limitations on this can be. How can one consent to things in the future,
when the future is never fully known?
See Burton v. Selker, 36
F. Supp.2d 984 (S.D. Ohio 1999). See also Black v. State of Missouri,
492 F.Supp. 848 (W.D. Mo. 1980). (In this
case, Robert Freilich, a noted authority on urban law and then a professor at
the Law School for the University of Missouri at Kansas City, had represented
school children and the school district.
Parties were realigned, and there was an attempt to disqualify him. The attempt failed, partly on the ground of
waiver. Id. at 865.)
waivers have to be forward-looking. This
is permitted, although one wonders what the limitations on this can be. How can one consent to things in the future,
when the future is never fully known?
See Burton v. Selker, 36
F. Supp.2d 984 (S.D. Ohio 1999). See also Black v. State of Missouri,
492 F.Supp. 848 (W.D. Mo. 1980). (In this
case, Robert Freilich, a noted authority on urban law and then a professor at
the Law School for the University of Missouri at Kansas City, had represented
school children and the school district.
Parties were realigned, and there was an attempt to disqualify him. The attempt failed, partly on the ground of
waiver. Id. at 865.)
h. Knowing Who the Client Is. It is important for a lawyer to know who his
client is. It is also important that
people know whether they are clients of a given lawyer. Sometimes, there is confusion about
this. Sometimes, people receive
information or advice from lawyers in informal contexts and without payment;
the lawyers don’t think anything about it, but subsequently they find out that
a client-lawyer relationship was formed, and that they may be liable if they
gave bad information or poor advice.
client is. It is also important that
people know whether they are clients of a given lawyer. Sometimes, there is confusion about
this. Sometimes, people receive
information or advice from lawyers in informal contexts and without payment;
the lawyers don’t think anything about it, but subsequently they find out that
a client-lawyer relationship was formed, and that they may be liable if they
gave bad information or poor advice.
(1) Partnership. Lawyers must be particularly careful in
working for small partnerships.
Representing a partnership does not automatically imply that the lawyer
is representing any partner, since the “entity theory” of partnership usually
applies in this context. However, the
partners must be cognizant of this matter.
Oklahoma Bar Ass’n v. Green, 936 P. 947 (Okla.
1997).
working for small partnerships.
Representing a partnership does not automatically imply that the lawyer
is representing any partner, since the “entity theory” of partnership usually
applies in this context. However, the
partners must be cognizant of this matter.
Oklahoma Bar Ass’n v. Green, 936 P. 947 (Okla.
1997).
(2) Small
Corporation. Sometimes there will be
an attorney-client relationship between both the corporation and a director, so
that the attorney cannot represent the director if he is sued by the
corporation. Montgomery Academy v.
Kohn, 50 F. Supp.2d 344 (D.N.J. 1999).
The opposite is also true.
Corporation. Sometimes there will be
an attorney-client relationship between both the corporation and a director, so
that the attorney cannot represent the director if he is sued by the
corporation. Montgomery Academy v.
Kohn, 50 F. Supp.2d 344 (D.N.J. 1999).
The opposite is also true.
(3) Owners. Similarly, if a lawyer represents a closely
held corporation, and there is a dispute between the owners, there is a good
chance that the lawyer will not be able to represent one of the owners against
the others. Detter v. Schreiber,
610 N.W.2d 13 (Neb. 2000). (The court
affirmed a disqualification when two people owned the corporation, but observed
that disqualification was a discretionary call for the trial court.)
held corporation, and there is a dispute between the owners, there is a good
chance that the lawyer will not be able to represent one of the owners against
the others. Detter v. Schreiber,
610 N.W.2d 13 (Neb. 2000). (The court
affirmed a disqualification when two people owned the corporation, but observed
that disqualification was a discretionary call for the trial court.)
(4) Small Businesses
Generally. This problem comes up
sometimes in the context of small businesses.
Consider the following hypothetical.
Suppose there are a series of small corporations, limited liability
companies, and limited partnerships, all of them controlled by a significant
principal. Suppose that a lawyer
represents both the companies and the principal. Suppose further that in each of these
companies there is a “Man Friday” who takes care of business while the
principal plays golf. Suppose further that
Man Friday engages in a significant amount of conversation with the lawyer and
that every once in a while there is a question about Friday’s personal
relationships with the principal and with the companies.
Generally. This problem comes up
sometimes in the context of small businesses.
Consider the following hypothetical.
Suppose there are a series of small corporations, limited liability
companies, and limited partnerships, all of them controlled by a significant
principal. Suppose that a lawyer
represents both the companies and the principal. Suppose further that in each of these
companies there is a “Man Friday” who takes care of business while the
principal plays golf. Suppose further that
Man Friday engages in a significant amount of conversation with the lawyer and
that every once in a while there is a question about Friday’s personal
relationships with the principal and with the companies.
(a) Is it true, as a matter of law, that L
does not represent Man Friday? Probably
not.
(b) Is it true, as a
matter of law, that L does represent Man Friday? Probably not.
matter of law, that L does represent Man Friday? Probably not.
(c) Is there a jury issue as to whether L
represents Man Friday? Almost certainly.
represents Man Friday? Almost certainly.
(d) If there’s any
client-lawyer relationship between Man Friday and L, is there one continuing
relationship or a serious of episodes?
Unclear.
client-lawyer relationship between Man Friday and L, is there one continuing
relationship or a serious of episodes?
Unclear.
(e) If there are a series of episodes, who
decides what they are, what their limits are, how long they lasted, and so
on? The jury?
decides what they are, what their limits are, how long they lasted, and so
on? The jury?
(f) Who decides whether Man Friday
reasonably inferred from the history of his relationship with L that the
next series of transactions would involve a client-attorney relationship? How is this decision made? Probably the jury with instructions.
reasonably inferred from the history of his relationship with L that the
next series of transactions would involve a client-attorney relationship? How is this decision made? Probably the jury with instructions.
(g) How is this issue submitted to the jury?
(5) Small Family
Businesses. These can involve
substantial problems, because it is often difficult to tell who one is and who
one is not representing.
Businesses. These can involve
substantial problems, because it is often difficult to tell who one is and who
one is not representing.
(6) Reasonable
Expectation. Moreover, a lawyer can
be liable to a nonclient if the nonclient reasonably believes that he was a
client of the lawyer and the lawyer either knew or should have known of the nonclient’s false belief. Parker v. Carnehan, 772 S.W. 2d 151,
156 (Tex. App.–Texarkana 1989, writ denied).
This proposition is true even though client-lawyer relationships are
usually contractual and therefore require the mutual intent to form such a
relationship. Obviously, the Parker
situation is another of the exceptions to the privity rule limiting legal
malpractice exposure.
Expectation. Moreover, a lawyer can
be liable to a nonclient if the nonclient reasonably believes that he was a
client of the lawyer and the lawyer either knew or should have known of the nonclient’s false belief. Parker v. Carnehan, 772 S.W. 2d 151,
156 (Tex. App.–Texarkana 1989, writ denied).
This proposition is true even though client-lawyer relationships are
usually contractual and therefore require the mutual intent to form such a
relationship. Obviously, the Parker
situation is another of the exceptions to the privity rule limiting legal
malpractice exposure.
c. Successive Representations: In general, lawyers are not forbidden from
representing a party against a former client, unless the form of representation
is “substantially related” to the current representation. Abney v. Wal-Mart, 984 F. Supp.
526 (E.D. Tex. 1997) (citing a collection of cases on this subject and refusing
to disqualify counsel in this case). Of
course, in order for there to be successive representations, the attorney must
have represented first one party and then another. If the former relationship was not one of attorney-client,
then the rule on successive relationships does not apply. And not all services attorneys render people
create attorney-client relationships.
For example, if L1 assists a person in finding another
lawyer, L2, perhaps L1 knows who specializes
in a certain kind of case, L1 and the person assisted may
never had formed an attorney-client relationship, even if money changed hands
in exchange for the services. Howe Investment, Ltd. v. Perez Y CIA. de
Puerto Rico, Inc., 96 F.Supp.2d 106 (D.P.R. 2000).
representing a party against a former client, unless the form of representation
is “substantially related” to the current representation. Abney v. Wal-Mart, 984 F. Supp.
526 (E.D. Tex. 1997) (citing a collection of cases on this subject and refusing
to disqualify counsel in this case). Of
course, in order for there to be successive representations, the attorney must
have represented first one party and then another. If the former relationship was not one of attorney-client,
then the rule on successive relationships does not apply. And not all services attorneys render people
create attorney-client relationships.
For example, if L1 assists a person in finding another
lawyer, L2, perhaps L1 knows who specializes
in a certain kind of case, L1 and the person assisted may
never had formed an attorney-client relationship, even if money changed hands
in exchange for the services. Howe Investment, Ltd. v. Perez Y CIA. de
Puerto Rico, Inc., 96 F.Supp.2d 106 (D.P.R. 2000).
(1) A Growing Problem. Successive conflicts are becoming a larger
problem in all sorts of areas: intellectual property and trade secrets: First Impressions Design and Management,
Inc. v. All That Style Interiors, Inc., 122 F.Supp.2d 1352 (S.D. Fla. 2000)
(disqualification denied but doctrine spelled out). Specialized employment discrimination, In
re Louis, 212 F.3d 980 (7th Cir. 2000) (emphasizing non-mandamus-ability),
intellectual property, Smith & Nephew, Inc. v. Ethicon, Inc., 98
F.Supp.2d 106 (D.Mass. 2000), Sports Law, Rocchigiani v. World Boxing
Counsel, 82 F.Supp.2d 182 (S.D.N.Y. 2000) (disqualification denied because
the lawyer could not have come to know any confidential information),
representation of public entities, Amray v. Union Township, 61 F.Supp.2d
876 (S.D. Ohio, 2000) (attorney acted as a partial investigator and had access
to city officials and then became plaintiff’s counsel), entertainment law, Universal
City Studios, Inc. v. Reimerdes, 98 F.Supp.2d 449 (S.D.N.Y. 2000) (conflict
existed but qualification denied because motion manipulative). Successive conflicts do not always justify
disqualification. Lesser remedies may be
used, such as mandating new retainer agreements. Sour v. Xerox Corp., 85 F.Supp.2d 198
(W.D.N.Y. 2000).
problem in all sorts of areas: intellectual property and trade secrets: First Impressions Design and Management,
Inc. v. All That Style Interiors, Inc., 122 F.Supp.2d 1352 (S.D. Fla. 2000)
(disqualification denied but doctrine spelled out). Specialized employment discrimination, In
re Louis, 212 F.3d 980 (7th Cir. 2000) (emphasizing non-mandamus-ability),
intellectual property, Smith & Nephew, Inc. v. Ethicon, Inc., 98
F.Supp.2d 106 (D.Mass. 2000), Sports Law, Rocchigiani v. World Boxing
Counsel, 82 F.Supp.2d 182 (S.D.N.Y. 2000) (disqualification denied because
the lawyer could not have come to know any confidential information),
representation of public entities, Amray v. Union Township, 61 F.Supp.2d
876 (S.D. Ohio, 2000) (attorney acted as a partial investigator and had access
to city officials and then became plaintiff’s counsel), entertainment law, Universal
City Studios, Inc. v. Reimerdes, 98 F.Supp.2d 449 (S.D.N.Y. 2000) (conflict
existed but qualification denied because motion manipulative). Successive conflicts do not always justify
disqualification. Lesser remedies may be
used, such as mandating new retainer agreements. Sour v. Xerox Corp., 85 F.Supp.2d 198
(W.D.N.Y. 2000).
(2) Texas Rule. In Texas, a party moving for disqualification
must prove the following: “(1) the
existence of a prior attorney-client relationship; (2) in which the
factual matters involved were so related to the facts in the pending
litigation; and (3) that it involved a genuine threat that the confidences
revealed to his former counsel will be divulged to his present adversary. If the moving part meets this presumption,
here she is entitled to a conclusive presumption that confidences and secrets
were imparted to the former attorney.” In
re Butler, 987 S.W.2d 221, 224 (Tex.
App.–Houston [14th Dist.] 1999, no pet.) (applying Coker).
must prove the following: “(1) the
existence of a prior attorney-client relationship; (2) in which the
factual matters involved were so related to the facts in the pending
litigation; and (3) that it involved a genuine threat that the confidences
revealed to his former counsel will be divulged to his present adversary. If the moving part meets this presumption,
here she is entitled to a conclusive presumption that confidences and secrets
were imparted to the former attorney.” In
re Butler, 987 S.W.2d 221, 224 (Tex.
App.–Houston [14th Dist.] 1999, no pet.) (applying Coker).
(a) In Texas, the
Substantial Relationship Test is met when a previous representation was such
that if confidential information had been disclosed to the lawyer, it would be
relevant to the conduct of the subsequent case.
It does not matter how relevant it is, if it is relevant at all. It does not even matter if the confidential
information was actually disclosed. It
is irrebuttably presumed that it was disclosed.
(In other words, all talk of disclosure is really irrelevant. What matters is whether the previous case
contained persons, themes, or information that are related to the subsequent
case.)
Substantial Relationship Test is met when a previous representation was such
that if confidential information had been disclosed to the lawyer, it would be
relevant to the conduct of the subsequent case.
It does not matter how relevant it is, if it is relevant at all. It does not even matter if the confidential
information was actually disclosed. It
is irrebuttably presumed that it was disclosed.
(In other words, all talk of disclosure is really irrelevant. What matters is whether the previous case
contained persons, themes, or information that are related to the subsequent
case.)
(b) Moreover, it is
also irrebuttably presumed that such confidential information will be used on
behalf of the new client in the second representation. Troutman v. Ramsey, 960 S.W.2d 176
(Tex. App.–Austin 1997, no writ). See
National Medical Enterprises v. Godbey, 924 S.W.2d 123 (Tex. 1996); NCNB
Texas Nat’l Bank v. Coker, 765 S.W.2d 398 (Tex. 1989).
also irrebuttably presumed that such confidential information will be used on
behalf of the new client in the second representation. Troutman v. Ramsey, 960 S.W.2d 176
(Tex. App.–Austin 1997, no writ). See
National Medical Enterprises v. Godbey, 924 S.W.2d 123 (Tex. 1996); NCNB
Texas Nat’l Bank v. Coker, 765 S.W.2d 398 (Tex. 1989).
(c) The key Texas
Supreme Court cases on successive conflicts are, in chronological order: NCNB Texas National Bank v. Coker, 765
S.W.2d 398 (Tex. 1989), Metropolitan Life Insurance Company v. Syntek
Finance Corp., 881 S.W.2d 319 (Tex. 1994), National Medical Enterprises,
Inc. v. Godbey, 924 S.W.2d 123 (Tex. 1996), In re Epic Holdings, Inc.,
985 S.W.2d 41 (Tex. 1998), and In re Epic Holdings, Inc., 28 S.W.2d 511
(Tex. 2000).
Supreme Court cases on successive conflicts are, in chronological order: NCNB Texas National Bank v. Coker, 765
S.W.2d 398 (Tex. 1989), Metropolitan Life Insurance Company v. Syntek
Finance Corp., 881 S.W.2d 319 (Tex. 1994), National Medical Enterprises,
Inc. v. Godbey, 924 S.W.2d 123 (Tex. 1996), In re Epic Holdings, Inc.,
985 S.W.2d 41 (Tex. 1998), and In re Epic Holdings, Inc., 28 S.W.2d 511
(Tex. 2000).
(3) “Substantial”: A
Flexible, Fact-Based Notion. What
counts as being substantially related varies from case to case. Often, this idea turns on factual connections
among the cases. Not always,
however: If successive representations
do not involve cases with connected facts, but the lawyer is closely aligned
with the previous client–so closely aligned, in fact, that he or she cannot
zealously represent a subsequent client–then the substantial relationship test
may be met. For a fascinating example of
this sort of reasoning in the context of a convicted criminal seeking a writ of
habeas corpus, see Freund v. Butterworth, 117 F.3d 1543 (11th Cir. 1997)
(intersection of legal ethics and constitutional criminal procedure), vacated
for rehearing en banc, 135 F.3d 1419 (11th Cir. 1998). Usually, the kind of
ineffective-assistance-of-counsel complaint that succeeded in Freund
does not succeed. For example, in United
States v. Sapp, 989 F. Supp. 1093 (D. Kan. 1997), two criminal defendants
complained that their counsel in a bank fraud case could not call witnesses due
to prior representation of the bank by the same counsel’s law firm. The defendants lost this motion for habeas
corpus because they did not show how the calling of such witnesses would have
helped them. Id. at 1101.
Flexible, Fact-Based Notion. What
counts as being substantially related varies from case to case. Often, this idea turns on factual connections
among the cases. Not always,
however: If successive representations
do not involve cases with connected facts, but the lawyer is closely aligned
with the previous client–so closely aligned, in fact, that he or she cannot
zealously represent a subsequent client–then the substantial relationship test
may be met. For a fascinating example of
this sort of reasoning in the context of a convicted criminal seeking a writ of
habeas corpus, see Freund v. Butterworth, 117 F.3d 1543 (11th Cir. 1997)
(intersection of legal ethics and constitutional criminal procedure), vacated
for rehearing en banc, 135 F.3d 1419 (11th Cir. 1998). Usually, the kind of
ineffective-assistance-of-counsel complaint that succeeded in Freund
does not succeed. For example, in United
States v. Sapp, 989 F. Supp. 1093 (D. Kan. 1997), two criminal defendants
complained that their counsel in a bank fraud case could not call witnesses due
to prior representation of the bank by the same counsel’s law firm. The defendants lost this motion for habeas
corpus because they did not show how the calling of such witnesses would have
helped them. Id. at 1101.
Patent Case. The substantial relationship test may be met
where the facts of a case are such that counsel must take fundamentally
inconsistent arguments in respective representation. For example, where L1
represented C1 as local counsel in a patent case, it could
not represent L2, which had represented the other side in the
patent case, when L2 was sued in a securities case arising
out of its client’s conduct which led up to the patent dispute. The problem was that L2 had
a given a patent opinion that was manifestly deficient and arguably designed to
deceive others, though not its client, into believing that its client was
acting in good faith with respect to the patents. The court observed that L1
would have to take inconsistent positions in the patent case and the securities
case. In the former, as lawyer for the
plaintiffs, it would necessarily have had to take the position that the patent
opinion of L2 was a sham and that L2’s
client could not possibly have been in good faith in relying on that
opinion. This is true even though L1
was only local counsel in the patent case.
In contrast, in the securities case, L1 would have to
take the position that the opinion of L2 was valid and based
on a good faith review of the patent at issue.
The court found that the two matters were substantially related and that
the interest of L2 (the new potential client) and the
interests of C1 were materially adverse. Oxford Systems, Inc. v. Cellpro, Inc.,
45 F. Supp.2d 1055, 1061 (W.D. Wash. 1999).
(Significantly, the court stated that in thinking about
disqualification, it must balance the interests of the client and of the law
firm. However, it also stated that the
interests of the client are primary. The
court further observed that when a lawyer has represented a client for a number
of years in a number of different matters, the client has the right to believe
that the representation will continue.
This case was decided both as a concurrent representation case and as a
successive representation case.)
where the facts of a case are such that counsel must take fundamentally
inconsistent arguments in respective representation. For example, where L1
represented C1 as local counsel in a patent case, it could
not represent L2, which had represented the other side in the
patent case, when L2 was sued in a securities case arising
out of its client’s conduct which led up to the patent dispute. The problem was that L2 had
a given a patent opinion that was manifestly deficient and arguably designed to
deceive others, though not its client, into believing that its client was
acting in good faith with respect to the patents. The court observed that L1
would have to take inconsistent positions in the patent case and the securities
case. In the former, as lawyer for the
plaintiffs, it would necessarily have had to take the position that the patent
opinion of L2 was a sham and that L2’s
client could not possibly have been in good faith in relying on that
opinion. This is true even though L1
was only local counsel in the patent case.
In contrast, in the securities case, L1 would have to
take the position that the opinion of L2 was valid and based
on a good faith review of the patent at issue.
The court found that the two matters were substantially related and that
the interest of L2 (the new potential client) and the
interests of C1 were materially adverse. Oxford Systems, Inc. v. Cellpro, Inc.,
45 F. Supp.2d 1055, 1061 (W.D. Wash. 1999).
(Significantly, the court stated that in thinking about
disqualification, it must balance the interests of the client and of the law
firm. However, it also stated that the
interests of the client are primary. The
court further observed that when a lawyer has represented a client for a number
of years in a number of different matters, the client has the right to believe
that the representation will continue.
This case was decided both as a concurrent representation case and as a
successive representation case.)
Business Case. If L represents C1
at a given time and subsequently represents C2 in a conflict with C1, and
if L learned confidential information about C1, it is
unlikely that L will be disqualified in the subsequent conflict, if that
confidential information has subsequently become public, or less than
confidential. L may not even be
subject to disqualification if she knows confidential information about C1
but the information is completely–and in every way–irrelevant and unuseable in
the conflict between C2 and C1. How Investment, Ltd. v. Perez Y CIA. de
Puerto Rico, Inc., 96 F.Supp.2d 106 (D.P.R. 2000).
at a given time and subsequently represents C2 in a conflict with C1, and
if L learned confidential information about C1, it is
unlikely that L will be disqualified in the subsequent conflict, if that
confidential information has subsequently become public, or less than
confidential. L may not even be
subject to disqualification if she knows confidential information about C1
but the information is completely–and in every way–irrelevant and unuseable in
the conflict between C2 and C1. How Investment, Ltd. v. Perez Y CIA. de
Puerto Rico, Inc., 96 F.Supp.2d 106 (D.P.R. 2000).
Disqualification Logic: Law Firms. Here is the way disqualification of law firms
is handled in the Seventh Circuit.
(1) Determine whether there is a substantial relationship between
the two representations. If so, proceed
to the second step. (Assume that there
have been shared confidences.)
(2) Can the challenged law firm rebut that presumption? If not, proceed to the next step. (3) were there any shared confidences by
the challenging client. With the
challenged law firm regarding the second representation. “Disqualification is appropriate if the second
presumption is not rebutted.” Speedy
v. Rexnord Corp., 54 F. Supp.2d 867,
867 (S.D.N. 1999). See Chapman v.
Crysler Corp., 54 F. Supp.2d 864 (S.D.N. 1999).
is handled in the Seventh Circuit.
(1) Determine whether there is a substantial relationship between
the two representations. If so, proceed
to the second step. (Assume that there
have been shared confidences.)
(2) Can the challenged law firm rebut that presumption? If not, proceed to the next step. (3) were there any shared confidences by
the challenging client. With the
challenged law firm regarding the second representation. “Disqualification is appropriate if the second
presumption is not rebutted.” Speedy
v. Rexnord Corp., 54 F. Supp.2d 867,
867 (S.D.N. 1999). See Chapman v.
Crysler Corp., 54 F. Supp.2d 864 (S.D.N. 1999).
Sometimes, a lawyer must be disqualified
because he is going to be a witness, but it is not necessary to disqualify the
whole firm. Ayus, M.D., P.A. v. Total
Renal Care, Inc., 43 F.Supp.2d 714 (S.D. Tex. 1999) (problem facing
business lawyer who writes demand letters before suit is filed).
because he is going to be a witness, but it is not necessary to disqualify the
whole firm. Ayus, M.D., P.A. v. Total
Renal Care, Inc., 43 F.Supp.2d 714 (S.D. Tex. 1999) (problem facing
business lawyer who writes demand letters before suit is filed).
Sometimes different members of law firms can
represent different players in the same dispute, so long as no one’s
representational abilities are materially impaired. Jaggers v. Shake, 37 S.W.3d 373 (Ky.
2001). This is especially true when it
appears that the motion to disqualify is tactically motivated. In this case,
one lawyer represented multiple plaintiffs while another member of the firm
represented a witness. See Schuff v.
A.T. Klemens & Son, 16 P.3d 1002 (Montana 2000).
represent different players in the same dispute, so long as no one’s
representational abilities are materially impaired. Jaggers v. Shake, 37 S.W.3d 373 (Ky.
2001). This is especially true when it
appears that the motion to disqualify is tactically motivated. In this case,
one lawyer represented multiple plaintiffs while another member of the firm
represented a witness. See Schuff v.
A.T. Klemens & Son, 16 P.3d 1002 (Montana 2000).
One wonders if the trend of diversification in
law firms is going to lead to serious conflicts problems. Crystal Nix Hines, Competition Sprouts
One-Stop Law Firms, New York Times C1
(May 31, 2001). See Edward S. Adams
and Stuart Albert, Law Redesigns Law: Legal Principles as Principles of Law
Firm Organization, 51 Rutgers L. Rev.
1133 (1999).
law firms is going to lead to serious conflicts problems. Crystal Nix Hines, Competition Sprouts
One-Stop Law Firms, New York Times C1
(May 31, 2001). See Edward S. Adams
and Stuart Albert, Law Redesigns Law: Legal Principles as Principles of Law
Firm Organization, 51 Rutgers L. Rev.
1133 (1999).
(4) Conflicts in Bankruptcy. Frequently, even in relatively large
communities, there are not enough sophisticated business lawyers with
bankruptcy expertise to go around.
Concurrent and successive conflicts often face them. This is especially true in real estate
transactions. Law firms sometimes find
themselves when represented the financing bank, general partner in a limited
partnership, some limited partners, and the individuals who run the corporate
general partnership. Sometimes, this
relationships can lead to trouble. Pearson
v. First NH Mortgage Corp., 200 F.3d 30 (1st Cir. 1999). (This case also involved an allegation of
fraud upon the court because the bankruptcy lawyer for one of the investors did
not make sufficiently clear his web of representations.)
communities, there are not enough sophisticated business lawyers with
bankruptcy expertise to go around.
Concurrent and successive conflicts often face them. This is especially true in real estate
transactions. Law firms sometimes find
themselves when represented the financing bank, general partner in a limited
partnership, some limited partners, and the individuals who run the corporate
general partnership. Sometimes, this
relationships can lead to trouble. Pearson
v. First NH Mortgage Corp., 200 F.3d 30 (1st Cir. 1999). (This case also involved an allegation of
fraud upon the court because the bankruptcy lawyer for one of the investors did
not make sufficiently clear his web of representations.)
(5) Standing. Usually, it is the previous client who is
objecting to the representation. Kasza
v. Browner, 133 F.3d 1159 (9th Cir. 1998).
Not always, however. Sometimes
even a stranger to the attorney-client relationship can object. Lease v. Rubacky, 987 F. Supp. 406
(E.D. Pa. 1997) (law firm and its client sued medical expert for breach of
contract to testify). Nevertheless, as a
general rule, in order for a motion to disqualify to succeed, the movant must
show that there was an attorney-client relationship between himself and object
of the motion. Livers v. Wu,
6 F. Supp.2d 921 (N.D. Ill. 1998).
objecting to the representation. Kasza
v. Browner, 133 F.3d 1159 (9th Cir. 1998).
Not always, however. Sometimes
even a stranger to the attorney-client relationship can object. Lease v. Rubacky, 987 F. Supp. 406
(E.D. Pa. 1997) (law firm and its client sued medical expert for breach of
contract to testify). Nevertheless, as a
general rule, in order for a motion to disqualify to succeed, the movant must
show that there was an attorney-client relationship between himself and object
of the motion. Livers v. Wu,
6 F. Supp.2d 921 (N.D. Ill. 1998).
(6) Clienthood and
Roles. Sometimes an attorney can
represent a person, office, or entity when it acts in one capacity and not in
another, and can thereby circumvent the rule.
Health Maintenance Org. Ass’n of Ky. v. Nichols, 964 F. Supp.
230, 234 (E. D. Ky. 1997). (When an
attorney represents Insurance Commissioner acting as a Liquidator or
Rehabilitator appointed by state district court, it does not necessarily
represent the insurance commissioner himself.)
We have already discussed the possibility that a corporate general
counsel might represent a person in one capacity, say as an officer or a
director, but not in another, say as a shareholder.
Roles. Sometimes an attorney can
represent a person, office, or entity when it acts in one capacity and not in
another, and can thereby circumvent the rule.
Health Maintenance Org. Ass’n of Ky. v. Nichols, 964 F. Supp.
230, 234 (E. D. Ky. 1997). (When an
attorney represents Insurance Commissioner acting as a Liquidator or
Rehabilitator appointed by state district court, it does not necessarily
represent the insurance commissioner himself.)
We have already discussed the possibility that a corporate general
counsel might represent a person in one capacity, say as an officer or a
director, but not in another, say as a shareholder.
(7) Alternative
Remedies. In Hyman Companies,
Inc. v. Brozost, 964 F. Supp. 168 (E.D. Pa. 1997), the company sought
to enjoin its former attorney from working for its competitor. Although an across-the-board preliminary
injunction was denied, the attorney was enjoined from representing the
competitor in negotiating certain leases–apparently the competitors were
attempting to get the same space. The
lawyer was also forbidden from disclosing his former client’s profitability
figures and its business plans.
(Comment: This is a puzzling
case. If the former lawyer were in a
position to disclose these things, perhaps he should have been kicked out
completely.)
Remedies. In Hyman Companies,
Inc. v. Brozost, 964 F. Supp. 168 (E.D. Pa. 1997), the company sought
to enjoin its former attorney from working for its competitor. Although an across-the-board preliminary
injunction was denied, the attorney was enjoined from representing the
competitor in negotiating certain leases–apparently the competitors were
attempting to get the same space. The
lawyer was also forbidden from disclosing his former client’s profitability
figures and its business plans.
(Comment: This is a puzzling
case. If the former lawyer were in a
position to disclose these things, perhaps he should have been kicked out
completely.)
(8) Imputation. When two lawyers from a firm prosecuted a
patent in Year 1, the same firm could not challenge the validity of the patent
in Year 14. Asyst Technologies,
Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) (Duh! What is the vice here?). See Coles v.
Arizona Charlie’s, 973 F. Supp. 971 (D. Nev. 1997) for another case on
imputed knowledge. In Coles, an attorney brought an age and race
discrimination case against a nightclub which her prior law firm had
represented while she was employed there.
The court found that confidential information had been presumptively
imparted to her. See also Schwed
v. General Electric Co., 990 F. Supp. 113 (N.D.N.Y. 1998) (counsel for
plaintiffs in ADEA class action disqualified).
As usual, a rule that is applied stringently to private lawyers is not
so stringently applied to the government.
Courts tend not to disqualify the entire office of the state attorney
general, even when a private law firm would have to be disqualified, unless it
is absolutely necessary. Baker v. Cox,
974 F. Supp. 73 (D. Mass. 1997). See Cromley
v. Board of Educ. of Lockport Twnshp., 17 F.3d 1059, 1065 (7th Cir. 1994).
patent in Year 1, the same firm could not challenge the validity of the patent
in Year 14. Asyst Technologies,
Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) (Duh! What is the vice here?). See Coles v.
Arizona Charlie’s, 973 F. Supp. 971 (D. Nev. 1997) for another case on
imputed knowledge. In Coles, an attorney brought an age and race
discrimination case against a nightclub which her prior law firm had
represented while she was employed there.
The court found that confidential information had been presumptively
imparted to her. See also Schwed
v. General Electric Co., 990 F. Supp. 113 (N.D.N.Y. 1998) (counsel for
plaintiffs in ADEA class action disqualified).
As usual, a rule that is applied stringently to private lawyers is not
so stringently applied to the government.
Courts tend not to disqualify the entire office of the state attorney
general, even when a private law firm would have to be disqualified, unless it
is absolutely necessary. Baker v. Cox,
974 F. Supp. 73 (D. Mass. 1997). See Cromley
v. Board of Educ. of Lockport Twnshp., 17 F.3d 1059, 1065 (7th Cir. 1994).
(9) Double
Imputation. If L represents C1
and then represents C2, successively, where C2
is suing C1, L will be disqualified, as will his
firm. However, if L’s firm is
involved in a joint defense agreement–if it is part of a coalition of
defendants, the confidential information imputed to L and then to L’s
firm will not be imputed to the other members of the joint defense group. Essex Chemical Corp. v. Hartford Acc. and
Indem. Co., 993 F. Supp. 241 (D.N.J. 1998).
Also, depending on the facts, disqualification of co-counsel from one
firm is not automatic merely because counsel from another firm is disqualified. Baybrook Homes, Inc. v. Banyan Const.
& Development, Inc., 991 F. Supp. 1440 (M.D. Fla. 1997).
Imputation. If L represents C1
and then represents C2, successively, where C2
is suing C1, L will be disqualified, as will his
firm. However, if L’s firm is
involved in a joint defense agreement–if it is part of a coalition of
defendants, the confidential information imputed to L and then to L’s
firm will not be imputed to the other members of the joint defense group. Essex Chemical Corp. v. Hartford Acc. and
Indem. Co., 993 F. Supp. 241 (D.N.J. 1998).
Also, depending on the facts, disqualification of co-counsel from one
firm is not automatic merely because counsel from another firm is disqualified. Baybrook Homes, Inc. v. Banyan Const.
& Development, Inc., 991 F. Supp. 1440 (M.D. Fla. 1997).
(10) Corporate
Interrelationships. There can be no
conflicts problems unless there are at least two attorney-client
relationships. Furthermore there must be
a conflict between the previous client and the present client. This sounds like a “black letter” mechanical
rule of universal application. When it
comes to corporations, however, sometimes courts will count a subsidiary as a
client, even when the lawyer represented only the parent. Sometimes courts will count “sibling”
corporations as clients. Courts that do
so approach the matter pragmatically and look for information actually
disclosed. See Ramada Franchise
System, Inc. v. Hotel of Gainesville Associates, 988 F. Supp. 1460 (N.D.
Ga. 1997) for discussion.
Interrelationships. There can be no
conflicts problems unless there are at least two attorney-client
relationships. Furthermore there must be
a conflict between the previous client and the present client. This sounds like a “black letter” mechanical
rule of universal application. When it
comes to corporations, however, sometimes courts will count a subsidiary as a
client, even when the lawyer represented only the parent. Sometimes courts will count “sibling”
corporations as clients. Courts that do
so approach the matter pragmatically and look for information actually
disclosed. See Ramada Franchise
System, Inc. v. Hotel of Gainesville Associates, 988 F. Supp. 1460 (N.D.
Ga. 1997) for discussion.
(11) Appearance of a
Conflict. An actual successive
conflict is enough to warrant disqualification.
While a potential conflict may be enough to prevent, for example, a
trustee in bankruptcy from hiring a lawyer, the appearance of a conflict,
without its actuality, is often insufficient grounds for disqualification. In
re Marvel Entertainment Group, Inc., 140 F.3d 463 (3rd Cir. 1998).
Conflict. An actual successive
conflict is enough to warrant disqualification.
While a potential conflict may be enough to prevent, for example, a
trustee in bankruptcy from hiring a lawyer, the appearance of a conflict,
without its actuality, is often insufficient grounds for disqualification. In
re Marvel Entertainment Group, Inc., 140 F.3d 463 (3rd Cir. 1998).
This rule is subject to an exception when
permitting an attorney to proceed would “create an appearance of impropriety
and unfairness[, which, in turn,] would [create] public suspicion of the legal
profession, cause the public to question the degree of an attorney’s loyalty to
clients, and invite skepticism as to the confidentiality of the information
given an attorney.” City of El
Paso v. Salis-Porras Soule, 6 F.Supp.2d 616, 625 (W.D. Tex.
1998). For another recent
disqualification case which turned, in part, on the appearance of impropriety, see
Greig v. Macy’s Northeast, Inc., 1 F. Supp.2d 397, 403 (D.N.J. 1998).
permitting an attorney to proceed would “create an appearance of impropriety
and unfairness[, which, in turn,] would [create] public suspicion of the legal
profession, cause the public to question the degree of an attorney’s loyalty to
clients, and invite skepticism as to the confidentiality of the information
given an attorney.” City of El
Paso v. Salis-Porras Soule, 6 F.Supp.2d 616, 625 (W.D. Tex.
1998). For another recent
disqualification case which turned, in part, on the appearance of impropriety, see
Greig v. Macy’s Northeast, Inc., 1 F. Supp.2d 397, 403 (D.N.J. 1998).
Sometimes, particularly in an important case
where there is likely to be substantial publicity, the appearance of
impropriety is enough. This is
especially true in mass tort cases. Blue
Cross and Blue Shield of New Jersey v. Phillip Morris, Inc., 53 F.Supp.2d
338 (E.D.N.Y. 1999). In this tobacco
case, a law firm had agreed to not represent a tobacco company, and then did
so. In a scholarly opinion with a
feeling of depth, Judge Weinstein ordered the law firm disqualified: “so critical to the effective functioning of
the legal system is the public’s confidence in its integrity that the
appearance of professional impropriety may be as important as the fact of its
existence. . . The appearance
of impropriety is a particular concern in today’s climate of widespread and
entrenched hostility towards the legal profession. . . . Because
of the strong countervailing interest in the public’s right to unfettered
choice of an attorney, the appearance of impropriety is usually insufficient in
and of itself, to support disqualification. . . . The Second
Circuit concurs in the general version to
disqualifications. . . .Only in rare cases is disqualification
for mere appearance of impropriety desirable. . . . In the instant case, the appearance of
impropriety alone would support disqualification even absent an enforceable
contract of disqualification.
Disqualification would result in no prejudicial delay. Phillip Morris is currently ably
represented. Moreover, the appearance of
impropriety is enhanced with the high profile of the case and the fact that it
concerns the healthcare of millions of people.”
Id. at 345-46.
where there is likely to be substantial publicity, the appearance of
impropriety is enough. This is
especially true in mass tort cases. Blue
Cross and Blue Shield of New Jersey v. Phillip Morris, Inc., 53 F.Supp.2d
338 (E.D.N.Y. 1999). In this tobacco
case, a law firm had agreed to not represent a tobacco company, and then did
so. In a scholarly opinion with a
feeling of depth, Judge Weinstein ordered the law firm disqualified: “so critical to the effective functioning of
the legal system is the public’s confidence in its integrity that the
appearance of professional impropriety may be as important as the fact of its
existence. . . The appearance
of impropriety is a particular concern in today’s climate of widespread and
entrenched hostility towards the legal profession. . . . Because
of the strong countervailing interest in the public’s right to unfettered
choice of an attorney, the appearance of impropriety is usually insufficient in
and of itself, to support disqualification. . . . The Second
Circuit concurs in the general version to
disqualifications. . . .Only in rare cases is disqualification
for mere appearance of impropriety desirable. . . . In the instant case, the appearance of
impropriety alone would support disqualification even absent an enforceable
contract of disqualification.
Disqualification would result in no prejudicial delay. Phillip Morris is currently ably
represented. Moreover, the appearance of
impropriety is enhanced with the high profile of the case and the fact that it
concerns the healthcare of millions of people.”
Id. at 345-46.
In some states, disqualification for the
appearance of an impropriety involves a test.
Under the rule in the Eleventh Circuit, the test if a two-pronged one:
(1) “‘there must exist a reasonable possibility that some specifically
identifiable impropriety did in fact occur;’ and (2) ‘the likelihood of
public suspicion or obloquy must outweigh the social interests that will be
served by the attorney’s continued participation in the case.’” First
Impressions Design and Management, Inc. v. All That Style Interiors, Inc.,
122 F. Supp.2d 1352, 1354 (S.D. Fla. 2000).
appearance of an impropriety involves a test.
Under the rule in the Eleventh Circuit, the test if a two-pronged one:
(1) “‘there must exist a reasonable possibility that some specifically
identifiable impropriety did in fact occur;’ and (2) ‘the likelihood of
public suspicion or obloquy must outweigh the social interests that will be
served by the attorney’s continued participation in the case.’” First
Impressions Design and Management, Inc. v. All That Style Interiors, Inc.,
122 F. Supp.2d 1352, 1354 (S.D. Fla. 2000).
(12) Appearance of an
Attorney-Client Relationship. In
general, the mere appearance of an attorney-client relationship will not
generate a disqualification when the lawyer subsequently represents an adverse
party. Thus, when L lectured to a
school district on the law of desegregation, no attorney-client relationship
was created, even though the lawyer received some information about the school
district in order to prepare the lecture.
An attorney-client relationship, and not just the appearance of an
attorney-client relationship or a relationship resembling an attorney-client
relationship, is required if L is to be disqualified. Capacchione v. Charlotte-Mecklenburg
Board of Education, 9 F. Supp.2d 572 (W.D.N.C. 1998).
Attorney-Client Relationship. In
general, the mere appearance of an attorney-client relationship will not
generate a disqualification when the lawyer subsequently represents an adverse
party. Thus, when L lectured to a
school district on the law of desegregation, no attorney-client relationship
was created, even though the lawyer received some information about the school
district in order to prepare the lecture.
An attorney-client relationship, and not just the appearance of an
attorney-client relationship or a relationship resembling an attorney-client
relationship, is required if L is to be disqualified. Capacchione v. Charlotte-Mecklenburg
Board of Education, 9 F. Supp.2d 572 (W.D.N.C. 1998).
(13) Broad
Disqualification. Sometimes, the
lawyer may be disqualified from more than one client. For example, consider the case where P
sued D, a department store, alleging that D had wrongfully
targeted her as a potential shoplifter on the grounds of her race. P hired L1. He dropped out for some reason, and P
sued L1 for malpractice in the same case. D was represented by L2
from firm F. L1
(no doubt through his malpractice carrier) hired L3, also
from F. Eventually, both L2
and L3 (indeed the entirety of F) were disqualified
from representing both D and L1. The opinion was harshly worded and critical
of F. Greig v. Macy’s
Northeast, Inc., 1 F. Supp.2d 397, (D.N.J. 1998).
Disqualification. Sometimes, the
lawyer may be disqualified from more than one client. For example, consider the case where P
sued D, a department store, alleging that D had wrongfully
targeted her as a potential shoplifter on the grounds of her race. P hired L1. He dropped out for some reason, and P
sued L1 for malpractice in the same case. D was represented by L2
from firm F. L1
(no doubt through his malpractice carrier) hired L3, also
from F. Eventually, both L2
and L3 (indeed the entirety of F) were disqualified
from representing both D and L1. The opinion was harshly worded and critical
of F. Greig v. Macy’s
Northeast, Inc., 1 F. Supp.2d 397, (D.N.J. 1998).
(14) Waivers. Clients can waive conflicts. Not every waiver, however, is sufficient to
prevent a subsequent disqualification motion. City of El Paso v. Salis-Porras Soule,
6 F. Supp.2d 616 (W.D. Tex. 1998) (holding that waiver did not conclusively
establish that there was no attorney-client relationship). One wonders if a waiver can be rescinded and,
if so, upon what terms. See Fred C.
Zacharias, Waiving Conflicts of Interest, 108 Yale L. J. 407 (1998).
prevent a subsequent disqualification motion. City of El Paso v. Salis-Porras Soule,
6 F. Supp.2d 616 (W.D. Tex. 1998) (holding that waiver did not conclusively
establish that there was no attorney-client relationship). One wonders if a waiver can be rescinded and,
if so, upon what terms. See Fred C.
Zacharias, Waiving Conflicts of Interest, 108 Yale L. J. 407 (1998).
(15) Taking Discovery. A lawyer may not even be able to take the
deposition of a former client. In Selby v.
Revlon Consumer Products Corp., 6 F. Supp.2d 577, 580-82 (N.D. Tex. 1997), P1
and P2 were both former employees of Revlon. They both believed they had hostile
environment sexual harassment claims against Revlon, and they both hired the
same law firm. Subsequently, P1
filed suit, and P2 did not.
Apparently, P2 terminated her attorney-client
relationship will L.
Subsequently, L sought to take the deposition of P2
on behalf of P1. The
court refused to let this happen because the deposition might expose P2
to legal liability in some context or other.
In addition, the court was concerned about P2’s
business reputation. The court was also
concerned that L might use confidences, obtained from his
attorney-client relationship with P2, during the
deposition. The court relied upon In
re American Airlines, 972 F.2d 605 (5th Cir. 1992). That case is the crucial Fifth Circuit
case on the attorney-client relationship.
deposition of a former client. In Selby v.
Revlon Consumer Products Corp., 6 F. Supp.2d 577, 580-82 (N.D. Tex. 1997), P1
and P2 were both former employees of Revlon. They both believed they had hostile
environment sexual harassment claims against Revlon, and they both hired the
same law firm. Subsequently, P1
filed suit, and P2 did not.
Apparently, P2 terminated her attorney-client
relationship will L.
Subsequently, L sought to take the deposition of P2
on behalf of P1. The
court refused to let this happen because the deposition might expose P2
to legal liability in some context or other.
In addition, the court was concerned about P2’s
business reputation. The court was also
concerned that L might use confidences, obtained from his
attorney-client relationship with P2, during the
deposition. The court relied upon In
re American Airlines, 972 F.2d 605 (5th Cir. 1992). That case is the crucial Fifth Circuit
case on the attorney-client relationship.
(16) Business Dealings. Some jurisdictions forbid business dealings
between attorneys and clients. In re
McLain 671 A.2d 951 (D.C. App. 1996). (Lawyer failed to repay a demand loan. The prohibition here applies to situations
where the client and the lawyer have different interests, and where the client
expects the lawyer to exercise professional judgment for the client’s
protection, unless there is consent after full disclosure. It is difficult to see how anyone can
possibly make full disclosure where the future is involved.)
between attorneys and clients. In re
McLain 671 A.2d 951 (D.C. App. 1996). (Lawyer failed to repay a demand loan. The prohibition here applies to situations
where the client and the lawyer have different interests, and where the client
expects the lawyer to exercise professional judgment for the client’s
protection, unless there is consent after full disclosure. It is difficult to see how anyone can
possibly make full disclosure where the future is involved.)
(17) Burden of Proof. In general, clients or former clients seeking
disqualification need not prove that the attorney actually misused prejudicial
information. This is presumed. Sullivan County Regional Refuse Disposal
District v. Town of Acworth, 686
A.2d 755 (N.H. 1996). In some
jurisdictions, the lawyer may disprove prejudicial conduct. This is probably not the better rule.59
disqualification need not prove that the attorney actually misused prejudicial
information. This is presumed. Sullivan County Regional Refuse Disposal
District v. Town of Acworth, 686
A.2d 755 (N.H. 1996). In some
jurisdictions, the lawyer may disprove prejudicial conduct. This is probably not the better rule.59
(18) Other Law
Governing Disqualification.
Disqualifications may be governed by laws other than the law of
professional responsibility. Section 327
of the Bankruptcy Code is pertinent here.
This section does not seem as draconian as the law of professional
responsibility, at least for special purpose counsel with a restricted charge. In re Arochem Corp., 176 F.3d 610, 623
(2d Cir. 1999).
Governing Disqualification.
Disqualifications may be governed by laws other than the law of
professional responsibility. Section 327
of the Bankruptcy Code is pertinent here.
This section does not seem as draconian as the law of professional
responsibility, at least for special purpose counsel with a restricted charge. In re Arochem Corp., 176 F.3d 610, 623
(2d Cir. 1999).
(19) Joint
Representations. The attorney-client
privilege does not apply as between joint clients. Hillerich & Bradsby Co. v. McKay,
26 F.Supp.2d 124 (D.C. 1998). The same
rule probably applies to client confidences.
At the same time, the non-application of the latter rule can probably be
waived by the clients. In other words,
clients can probably agree that the confidences of individual clients remain
secrets from other clients. The same is
probably not true with respect to privilege.
See Commandment One § H.5.
Representations. The attorney-client
privilege does not apply as between joint clients. Hillerich & Bradsby Co. v. McKay,
26 F.Supp.2d 124 (D.C. 1998). The same
rule probably applies to client confidences.
At the same time, the non-application of the latter rule can probably be
waived by the clients. In other words,
clients can probably agree that the confidences of individual clients remain
secrets from other clients. The same is
probably not true with respect to privilege.
See Commandment One § H.5.
(20) Co-Clients &
Privileges. Suppose a lawyer has two
clients, C1 and C2. Suppose C1 tells L a
secret and tells L not to tell C2. Suppose further that the secret is relevant
to C2’s welfare but is also a confidential matter pertaining
to C1. What does L
do now?
Privileges. Suppose a lawyer has two
clients, C1 and C2. Suppose C1 tells L a
secret and tells L not to tell C2. Suppose further that the secret is relevant
to C2’s welfare but is also a confidential matter pertaining
to C1. What does L
do now?
2. Paralegals. Law firms need to be extremely careful about
the paralegals they hire. Paralegals
(a/k/a legal assistants) who have worked on a case are conclusively presumed to
have received confidences and secrets while working upon that case. Phoenix Founders, Inc. v. Marshall,
887 S.W.2d 831, 834 (Tex. 1994). See
also Grant v. 13th Court of Appeals, 888 S.W.2d 466 (Tex. 1994) (legal
secretary). It is not, however,
conclusively presumed that the legal assistant shares any of the secret
information he presumptively has with his new employer. While there is such a presumption, it is a
rebuttable one. In re American Home
Products Corporation, 985 S.W.2d 68 (Tex. 1998). (Freelance legal assistant caused
disqualification of counsel for plaintiffs.)
the paralegals they hire. Paralegals
(a/k/a legal assistants) who have worked on a case are conclusively presumed to
have received confidences and secrets while working upon that case. Phoenix Founders, Inc. v. Marshall,
887 S.W.2d 831, 834 (Tex. 1994). See
also Grant v. 13th Court of Appeals, 888 S.W.2d 466 (Tex. 1994) (legal
secretary). It is not, however,
conclusively presumed that the legal assistant shares any of the secret
information he presumptively has with his new employer. While there is such a presumption, it is a
rebuttable one. In re American Home
Products Corporation, 985 S.W.2d 68 (Tex. 1998). (Freelance legal assistant caused
disqualification of counsel for plaintiffs.)
3. Subrogation: Sometimes, when there is an agreement, the
same lawyer can represent both the insurer and the insured in a subrogation
case. This matter needs to be worked out
very carefully in advance and the insured should probably receive separate
legal advice regarding the advisability of joint counsel. (Of course, if the insured is a sophisticated
insured with internal staff counsel, the situation may take care of
itself.) Also keep in mind there can be
controversies about attorneys’ fees as between the insured, tort victim, and
the insurer. Principal Mutual Life
Ins. Co. v. Baron, 964 F. Supp. 1221 (N.D. Ill. 1997). Usually these can be worked out by
agreement. Sometimes state agencies are
intractable, and this includes agencies in Texas.
same lawyer can represent both the insurer and the insured in a subrogation
case. This matter needs to be worked out
very carefully in advance and the insured should probably receive separate
legal advice regarding the advisability of joint counsel. (Of course, if the insured is a sophisticated
insured with internal staff counsel, the situation may take care of
itself.) Also keep in mind there can be
controversies about attorneys’ fees as between the insured, tort victim, and
the insurer. Principal Mutual Life
Ins. Co. v. Baron, 964 F. Supp. 1221 (N.D. Ill. 1997). Usually these can be worked out by
agreement. Sometimes state agencies are
intractable, and this includes agencies in Texas.
C. Avoid Multiple Roles.
1. Problematic
Relationships. Lawyers may not form
other relationships that would be inconsistent with representing a given
client.
Relationships. Lawyers may not form
other relationships that would be inconsistent with representing a given
client.
a. Ownership. For example, a lawyer for a given client
should not own a substantial amount of stock in the company she is suing.
should not own a substantial amount of stock in the company she is suing.
b. Roles. For that matter, a lawyer needs to be careful
about becoming a director or an executive of a company which he is
representing. The same applies to
subsidiaries and related companies of companies he is representing. Overlapping responsibilities can create
enormous difficulties and can lead to claims that a lawyer has breached his
fiduciary duties. BCCI Holdings
(Luxembourg), S.A. v. Clifford, 964 F. Supp. 468, 481 (D.D.C. 1997) (citing
Hendry v. Pelland, 73 F.3d 397, 401 (D.C. Cir. 1996) (“a breach of an
attorney’s ethical standards can constitute a breach of the fiduciary duty owed
to a client”).
about becoming a director or an executive of a company which he is
representing. The same applies to
subsidiaries and related companies of companies he is representing. Overlapping responsibilities can create
enormous difficulties and can lead to claims that a lawyer has breached his
fiduciary duties. BCCI Holdings
(Luxembourg), S.A. v. Clifford, 964 F. Supp. 468, 481 (D.D.C. 1997) (citing
Hendry v. Pelland, 73 F.3d 397, 401 (D.C. Cir. 1996) (“a breach of an
attorney’s ethical standards can constitute a breach of the fiduciary duty owed
to a client”).
c. Stockholder. It has become commonplace in the world of
high tech IPOs for the law firms handling the security issuances to become
substantial stockholders in the company.
Several justifications are heard for this gambit. First, it’s a good way for lawyers to make
money. Second, unlike accountants, who
are prohibited from doing this sort of thing, lawyers are not prohibited from
taking an equity interest in their clients.
Third, many high-tech companies do not have the cash it takes to do
IPOs. Fourth, sometimes clients demand
that lawyers invest in the client as a show of loyalty. Debra Baker, Who Wants To Be A Millionaire?,
86 ABA Journal 36 (February
2000). Some high-powered malpractice
lawyers are critical of this practice.
Ronald E. Nowlin, for example, is quoted as saying, “‘Law firms are
motivated by greed, opportunity–whichever you want to call
it. . . . They’ve decided
the risk of exposure is outweighed by the opportunity to become instant
millionaires.’” Id. “Law firms face a potential double whammy if
a client business goes sour. Not only
will they take a financial hit, they will also increase their risk of exposure
to liability, Nowlin says. ‘If a lawyer
represents five companies that fail and one that hits, that is five times the
problems,’ he says. While a larger firm
might be able to handle the problems of such representation, they could be
devastating to a small firm. ‘The large
firms are the ones with the opportunity.
They’ve decided the risks of exposure is outweighed by the opportunity
for profits,’ Nowlin says.” Id. at 39.
Interestingly, this article lists Hughes & Luce, a Texas firm, as
one of the top five first-day IPO gainers for 1999. It did this by owning 107,552 shares of Perot
Systems, which was valued at the close of the first day at nearly $18
million. Id. at 37.
high tech IPOs for the law firms handling the security issuances to become
substantial stockholders in the company.
Several justifications are heard for this gambit. First, it’s a good way for lawyers to make
money. Second, unlike accountants, who
are prohibited from doing this sort of thing, lawyers are not prohibited from
taking an equity interest in their clients.
Third, many high-tech companies do not have the cash it takes to do
IPOs. Fourth, sometimes clients demand
that lawyers invest in the client as a show of loyalty. Debra Baker, Who Wants To Be A Millionaire?,
86 ABA Journal 36 (February
2000). Some high-powered malpractice
lawyers are critical of this practice.
Ronald E. Nowlin, for example, is quoted as saying, “‘Law firms are
motivated by greed, opportunity–whichever you want to call
it. . . . They’ve decided
the risk of exposure is outweighed by the opportunity to become instant
millionaires.’” Id. “Law firms face a potential double whammy if
a client business goes sour. Not only
will they take a financial hit, they will also increase their risk of exposure
to liability, Nowlin says. ‘If a lawyer
represents five companies that fail and one that hits, that is five times the
problems,’ he says. While a larger firm
might be able to handle the problems of such representation, they could be
devastating to a small firm. ‘The large
firms are the ones with the opportunity.
They’ve decided the risks of exposure is outweighed by the opportunity
for profits,’ Nowlin says.” Id. at 39.
Interestingly, this article lists Hughes & Luce, a Texas firm, as
one of the top five first-day IPO gainers for 1999. It did this by owning 107,552 shares of Perot
Systems, which was valued at the close of the first day at nearly $18
million. Id. at 37.
d. Incorporating Business. Probably, a lawyer who incorporates a business
and acts as a voting trustee during the startup period cannot be held
responsible as controlling shareholder in a shareholder derivative action. Lichtenstein v. Consolidated Services Group, Inc., 173
F.3d 17 (1st Cir. 1999) (Maine law).
and acts as a voting trustee during the startup period cannot be held
responsible as controlling shareholder in a shareholder derivative action. Lichtenstein v. Consolidated Services Group, Inc., 173
F.3d 17 (1st Cir. 1999) (Maine law).
e. Business With Clients. In general, lawyers may not engage in
business transactions with their clients unless there has been full
disclosure. In re Singleton, 683
So.2d 711 (La. 1996). What counts as full disclosure is often not
clear up front. Many states require that
a lawyer advise the client and perspective business associate that another
lawyer should review the matter.
Certainly, if a lawyer intends to purchase property from a client, he
must disclose that there is the real possibility of significant increase and
value of the property upon subdivision. In
re Doyle, 684 A.2d 1377, 1383 (N.J. 1996).
business transactions with their clients unless there has been full
disclosure. In re Singleton, 683
So.2d 711 (La. 1996). What counts as full disclosure is often not
clear up front. Many states require that
a lawyer advise the client and perspective business associate that another
lawyer should review the matter.
Certainly, if a lawyer intends to purchase property from a client, he
must disclose that there is the real possibility of significant increase and
value of the property upon subdivision. In
re Doyle, 684 A.2d 1377, 1383 (N.J. 1996).
In one case, a lawyer represented a client in
a land deal. The sale was done by means
of a contract for deed. “The contract
for deed provided that the contract could not be assigned without the client’s
consent. Shortly after the contract for
deed was recorded, [the lawyer] secured an assignment of the contract for deed
from the other party to the contract without obtaining client’s consent.” The idea was to secure the payment of the
legal fees from his client. “As a result
of the transfer, the property lost its homestead exemption.” In re McLoone, 609 N.W.2d 616 (Minn.
2000) (public reprimand and costs).
a land deal. The sale was done by means
of a contract for deed. “The contract
for deed provided that the contract could not be assigned without the client’s
consent. Shortly after the contract for
deed was recorded, [the lawyer] secured an assignment of the contract for deed
from the other party to the contract without obtaining client’s consent.” The idea was to secure the payment of the
legal fees from his client. “As a result
of the transfer, the property lost its homestead exemption.” In re McLoone, 609 N.W.2d 616 (Minn.
2000) (public reprimand and costs).
One form of business one can have with clients
is taking fees in the form of bartering.
During the depression of the 1930s, my grandfather took chickens as
fees, and–I gather–from older lawyers–this sort of thing is still quite common. Indeed, some lawyers now take property, oil
royalty, mortgage interest, and all sorts of things as fees. Some barter exchanges are not permitted.
is taking fees in the form of bartering.
During the depression of the 1930s, my grandfather took chickens as
fees, and–I gather–from older lawyers–this sort of thing is still quite common. Indeed, some lawyers now take property, oil
royalty, mortgage interest, and all sorts of things as fees. Some barter exchanges are not permitted.
Lawyers should never solicit sexual
services as fees. It can warrant
disbarment. In re Touchet, 753
So.2d 820 (La. 2000). Perhaps In re
Rinella, 677 N.E.2d 909 (Ill. 1997) (The client said that she submitted to
the lawyer sexual advances because she was afraid that refusing to do so would
adversely affect his representation of her and that she could not afford to
hire another lawyer after paying his retainer.
This is something like sex-as-fees.)
services as fees. It can warrant
disbarment. In re Touchet, 753
So.2d 820 (La. 2000). Perhaps In re
Rinella, 677 N.E.2d 909 (Ill. 1997) (The client said that she submitted to
the lawyer sexual advances because she was afraid that refusing to do so would
adversely affect his representation of her and that she could not afford to
hire another lawyer after paying his retainer.
This is something like sex-as-fees.)
f. Family Connections. Some courts have held that lawyers may not
represent an entire class, if they have a close family tie to some members of
the class. This is not true in all
jurisdction. Petrovic v. AmocoOil Co.,
200 F.3d 1140 (8th Cir. 1999) (citing cases).
Significantly, the firm disqualified got no attorneys’ fees at all for
the work that it did before it was disqualified.
represent an entire class, if they have a close family tie to some members of
the class. This is not true in all
jurisdction. Petrovic v. AmocoOil Co.,
200 F.3d 1140 (8th Cir. 1999) (citing cases).
Significantly, the firm disqualified got no attorneys’ fees at all for
the work that it did before it was disqualified.
g. Sex. Suppose A and B are adverse
parties in a lawsuit. The lawyer for A
should probably not have an affair with B or the lawyer for B
while the lawsuit is pending, at least not without client consent. Can a husband and wife work in opposing
firms?
(1) Sex and Conflicts. Good Lord! Talk about a conflict of interest! Is a new, specific rule needed for this
purpose? For a cautionary tale about the
potential conflicts lurking in lawyer-client sexual relationships, see Neb.
State Bar Ass’n v. Denton, 604 N.W.2d 832 (Neb. 2000) (lawyer wrongfully
placed self-interest above client where he refused to contact potential
witnesses who knew of his sexual relationship with client). See also In re Withers, 747 So.2d 514
(La. 1999) (lawyer suspended for six months after becoming involved with a
client).
purpose? For a cautionary tale about the
potential conflicts lurking in lawyer-client sexual relationships, see Neb.
State Bar Ass’n v. Denton, 604 N.W.2d 832 (Neb. 2000) (lawyer wrongfully
placed self-interest above client where he refused to contact potential
witnesses who knew of his sexual relationship with client). See also In re Withers, 747 So.2d 514
(La. 1999) (lawyer suspended for six months after becoming involved with a
client).
(2) More About Sex. What about a lawyer having an affair with a
wife of a client? What if the wife is
the client’s second wife, and the client is involved in child custody
litigation with the first wife? This is
a real case. At a rhetorical level, the
court reacted vigorously. “The facts of
this case sadly unfold like a classic ‘bad lawyer joke’ and confirm what we as
attorneys fear the most: that perceived
truths about our profession often expressed in hyperbole can find support in
reality.” Kahlig v. Boyd, 980
S.W.2d 685, 687 (Tex. App.–San Antonio 1998, pet. denied). “[W]e feel compelled to note that numerous
other states have acknowledged the inherent conflict in attorney-client sexual
conduct by enacting legislation or disciplinary rules limiting such
conduct. Such legislation recognizes the
unequal balance of power intrinsic to the attorney-client relationship. At least one commentator concludes that
within the fiduciary framework of the attorney-client relationship, ‘the
initiation of sexual behavior is always wrong, no matter who is the initiator,
and no matter how willing the participants say they are.’ Because of the superior power held by the
attorney and the trust and dependency exhibited by the client, the possibility
of true consent by the client is eliminated.
Thus it is always the attorney’s responsibility to guard against sexual
contact with a client. Id. at 690
(citation omitted). Clearly [L]
totally failed in his responsibilities.
The record indicates that [L] initiated the sexual relationship and
exhibited little insight at trial about the actual or potential harm such a
relationship could have on his client.
That [C], and not his wife, [W], was the actual client,
does not change the gravity of the situation.
[L] was hired to obtain a custody modification that would have
brought the minor child into the home of [C] and [W] on a
full-time basis. The potential for harm
arising from [L]’s sexual relationship with his client’s wife is both
obvious and substantial. Had the nature
of [L]’s relationship with [W] been discovered during the custody
proceeding, then [L] himself could have become the focus of the custody
dispute and could have been called as a witness.” Kahlig v. Boyd, 980 S.W.2d 685 (Tex.
App.–San Antonio 1998, pet. denied). C
went to trial against L upon two theories: common law fraud and violations of the DTPA,
and lost upon the grounds that his theories were really attorney malpractice
theories which had been abandoned.
Probably, the court is saying that C would have lost the causation
element. Nonetheless, the court implied
that L’s conduct was at least a valid basis for sanctions by the State
Bar.
wife of a client? What if the wife is
the client’s second wife, and the client is involved in child custody
litigation with the first wife? This is
a real case. At a rhetorical level, the
court reacted vigorously. “The facts of
this case sadly unfold like a classic ‘bad lawyer joke’ and confirm what we as
attorneys fear the most: that perceived
truths about our profession often expressed in hyperbole can find support in
reality.” Kahlig v. Boyd, 980
S.W.2d 685, 687 (Tex. App.–San Antonio 1998, pet. denied). “[W]e feel compelled to note that numerous
other states have acknowledged the inherent conflict in attorney-client sexual
conduct by enacting legislation or disciplinary rules limiting such
conduct. Such legislation recognizes the
unequal balance of power intrinsic to the attorney-client relationship. At least one commentator concludes that
within the fiduciary framework of the attorney-client relationship, ‘the
initiation of sexual behavior is always wrong, no matter who is the initiator,
and no matter how willing the participants say they are.’ Because of the superior power held by the
attorney and the trust and dependency exhibited by the client, the possibility
of true consent by the client is eliminated.
Thus it is always the attorney’s responsibility to guard against sexual
contact with a client. Id. at 690
(citation omitted). Clearly [L]
totally failed in his responsibilities.
The record indicates that [L] initiated the sexual relationship and
exhibited little insight at trial about the actual or potential harm such a
relationship could have on his client.
That [C], and not his wife, [W], was the actual client,
does not change the gravity of the situation.
[L] was hired to obtain a custody modification that would have
brought the minor child into the home of [C] and [W] on a
full-time basis. The potential for harm
arising from [L]’s sexual relationship with his client’s wife is both
obvious and substantial. Had the nature
of [L]’s relationship with [W] been discovered during the custody
proceeding, then [L] himself could have become the focus of the custody
dispute and could have been called as a witness.” Kahlig v. Boyd, 980 S.W.2d 685 (Tex.
App.–San Antonio 1998, pet. denied). C
went to trial against L upon two theories: common law fraud and violations of the DTPA,
and lost upon the grounds that his theories were really attorney malpractice
theories which had been abandoned.
Probably, the court is saying that C would have lost the causation
element. Nonetheless, the court implied
that L’s conduct was at least a valid basis for sanctions by the State
Bar.
(3) An Independent
Commandment? A lawyer friend of
ours, S. Kalley Waage, a member of the firm of Razkil & Krood, has
suggested that this should be an independent Commandment, C13. His formulation is: “Don’t f–k your clients.”
Commandment? A lawyer friend of
ours, S. Kalley Waage, a member of the firm of Razkil & Krood, has
suggested that this should be an independent Commandment, C13. His formulation is: “Don’t f–k your clients.”
(a) We reject this
formulation upon the grounds that the key term has too many meanings so that
the injunction is ambiguous, and hence that its use would be unlawyerlike. None of the synonyms for the key term is
usually available in common parlance much less ambiguous.
formulation upon the grounds that the key term has too many meanings so that
the injunction is ambiguous, and hence that its use would be unlawyerlike. None of the synonyms for the key term is
usually available in common parlance much less ambiguous.
(b) We are also not
sure that the prohibited activity should receive the dignity and prominence
accorded an independent Commandment.
sure that the prohibited activity should receive the dignity and prominence
accorded an independent Commandment.
(4). Sex:
A Different View: Some have
argued that consensual sex between lawyers and their clients is nobody’s
business but theirs, unless quality of the legal services is affected. “Character and competence are separate
attributes and cannot be conflated without compromising the pool of
professional talent. [R]ules of
professional discipline should concern themselves with professional competence,
while other hortatory, aspirational measures may be appropriate for encouraging
a certain type of moral character.
Sexual conformity or nonconformity may reflect on one’s character, but
not necessarily on professional competence; and the public’s increasing
tolerance of varied sexual lifestyles dilutes an ‘appearances’ rationale for
increased control of professionals’ personal sex lives.”60 “The existence of the attorney-client sexual
relationship, standing alone, should not be presumed to pose a significant risk
to a domestic relations client’s interests.
Some showing of a concrete nexus between the sexual relationship and the
representation should be made. [T]he
‘risks’ are not as certain as court[s]
impl[y]. If there are significant risks,
then the profession should turn its attention toward remedying the root of the
problem–improper consideration of adultery and child custody, property, and
alimony determinations when adultery has no logical relationship to those
issues. With regard to ‘emotional’
risks, attorneys are not trained to detect and to address their clients’
emotional problems, and should not be held professionally responsible for any
and all emotional upheaval resulting from private, consensual, intimate
conduct. Human relationships are fraught
with emotional risk, and avoiding risk altogether is not necessarily the best
way to lead a rich and meaningful life.
It is, therefore, not certain that a prophylactic prohibition on
attorney-client sex does indeed ‘protect’ the client. The individual attorney and client are in a
better position than the profession en masse to determine the proper course of
their personal, intimate relationship.”61
A Different View: Some have
argued that consensual sex between lawyers and their clients is nobody’s
business but theirs, unless quality of the legal services is affected. “Character and competence are separate
attributes and cannot be conflated without compromising the pool of
professional talent. [R]ules of
professional discipline should concern themselves with professional competence,
while other hortatory, aspirational measures may be appropriate for encouraging
a certain type of moral character.
Sexual conformity or nonconformity may reflect on one’s character, but
not necessarily on professional competence; and the public’s increasing
tolerance of varied sexual lifestyles dilutes an ‘appearances’ rationale for
increased control of professionals’ personal sex lives.”60 “The existence of the attorney-client sexual
relationship, standing alone, should not be presumed to pose a significant risk
to a domestic relations client’s interests.
Some showing of a concrete nexus between the sexual relationship and the
representation should be made. [T]he
‘risks’ are not as certain as court[s]
impl[y]. If there are significant risks,
then the profession should turn its attention toward remedying the root of the
problem–improper consideration of adultery and child custody, property, and
alimony determinations when adultery has no logical relationship to those
issues. With regard to ‘emotional’
risks, attorneys are not trained to detect and to address their clients’
emotional problems, and should not be held professionally responsible for any
and all emotional upheaval resulting from private, consensual, intimate
conduct. Human relationships are fraught
with emotional risk, and avoiding risk altogether is not necessarily the best
way to lead a rich and meaningful life.
It is, therefore, not certain that a prophylactic prohibition on
attorney-client sex does indeed ‘protect’ the client. The individual attorney and client are in a
better position than the profession en masse to determine the proper course of
their personal, intimate relationship.”61
(a) Professor Mischler thinks that “sexual
autonomy is central to human dignity and true liberty.” Id. at 20. “Protecting sexual privacy is important work
and the legal profession should help, not hinder, the effort.” Id.62
(b) Aren’t these
empirical matters? Shouldn’t we do
surveys and such? Don’t the psychiatrist
and psychologist who have thought about this problem see it as injurious?
(c) Not all conflicting creating sexual encounters need involve client. On one case a prosecutor had an affair with a lab tech and as a result a murder case against the decedent’s husband had to be dropped, even though H was having an affair at the time his wife was murdered and was set to receive $400,000.00 in life insurance. The principals in the case were named Zimmer. Cathy was the wife and decedent. Her estranged husband was David, and the third one was David’s brother Robert. There are a good number of news stories about this whole dreadful in the L.A. Times and the S.J. Mercury News. Cathy was murdered by strangulation in 1989 and the charges was dropped in 2014.
empirical matters? Shouldn’t we do
surveys and such? Don’t the psychiatrist
and psychologist who have thought about this problem see it as injurious?
(c) Not all conflicting creating sexual encounters need involve client. On one case a prosecutor had an affair with a lab tech and as a result a murder case against the decedent’s husband had to be dropped, even though H was having an affair at the time his wife was murdered and was set to receive $400,000.00 in life insurance. The principals in the case were named Zimmer. Cathy was the wife and decedent. Her estranged husband was David, and the third one was David’s brother Robert. There are a good number of news stories about this whole dreadful in the L.A. Times and the S.J. Mercury News. Cathy was murdered by strangulation in 1989 and the charges was dropped in 2014.
5. Kingpins and Mules. The government can get a
lawyer disqualified in a criminal case, when the lawyer is representing the
mule but is being paid by a kingpin, and there is some reason to believe that
the kingpin is controlling the lawyer’s conduct in a manner which is inconsistent
with the interest of the mule. United
States v. Scott, 980 F. Supp. 165 (E.D. Va. 1997) (routine example
citing significant U.S. Supreme Court authority). For a variation on this problem, see
United States v. Merlino, 2 F. Supp.2d 647 (E.D. Pa. 1997), where the
problem was not correctly set up by the attorneys nor was sufficient evidence
presented. One wonders how far this
problem could extend in civil cases. See
§ E below.
lawyer disqualified in a criminal case, when the lawyer is representing the
mule but is being paid by a kingpin, and there is some reason to believe that
the kingpin is controlling the lawyer’s conduct in a manner which is inconsistent
with the interest of the mule. United
States v. Scott, 980 F. Supp. 165 (E.D. Va. 1997) (routine example
citing significant U.S. Supreme Court authority). For a variation on this problem, see
United States v. Merlino, 2 F. Supp.2d 647 (E.D. Pa. 1997), where the
problem was not correctly set up by the attorneys nor was sufficient evidence
presented. One wonders how far this
problem could extend in civil cases. See
§ E below.
6. Lawyer As
Witness. Sometimes, when an attorney
has to be a witness, that attorney is disqualified from advocating the
case. Courts are extremely reluctant to
do this, however. Mere testimony about
attorneys’ fees never disqualifies an attorney.
Courts are often reluctant to disqualify attorneys even when they have
to appear as substantive witnesses, especially when that testimony results from
some interactive process leading up to the lawsuit. Anderson Producing, Inc. v. Koch Oil
Co., 929 S.W.2d 416 (Tex. 1996).63
Witness. Sometimes, when an attorney
has to be a witness, that attorney is disqualified from advocating the
case. Courts are extremely reluctant to
do this, however. Mere testimony about
attorneys’ fees never disqualifies an attorney.
Courts are often reluctant to disqualify attorneys even when they have
to appear as substantive witnesses, especially when that testimony results from
some interactive process leading up to the lawsuit. Anderson Producing, Inc. v. Koch Oil
Co., 929 S.W.2d 416 (Tex. 1996).63
F. Disqualification. “Motions to disqualify are generally not
favored. They are often tactically
motivated; they cause delay and add expense; they disrupt attorney-client
relationships, sometimes of long standing; in short, they tend to derail the
efficient progress of litigation.64 Thus, parties moving for
disqualification carry a ‘heavy burden’ and must satisfy a ‘high standard of
proof.’ But if there are doubts, [most
courts teach that] ‘doubt should be resolved in favor of disqualification.’ Thus, a balance must be struck between being
‘solicitous of a client’s right freely to chose his counsel,’ and protecting
the ‘need to maintain the highest standards of the profession’ and the
‘integrity of the adversary process.’” Felix
v. Balkin, 49 F. Supp.2d 260 (S.D.N.Y. 1999). In this case, a client was straddling two
sides of several lawsuits, all of which involved sexual harassment allegations
at the cosmetic counters of Saks Fifth Avenue in New York. The court basically disqualified lawyers for
not realizing what was going on–and rightly did so. The most charitable interpretation of the
facts of this case is that the lawyers were so distracted by other things that they weren’t paying
attention. Distraction is not a virtue
in the legal profession, although it is commonplace.
favored. They are often tactically
motivated; they cause delay and add expense; they disrupt attorney-client
relationships, sometimes of long standing; in short, they tend to derail the
efficient progress of litigation.64 Thus, parties moving for
disqualification carry a ‘heavy burden’ and must satisfy a ‘high standard of
proof.’ But if there are doubts, [most
courts teach that] ‘doubt should be resolved in favor of disqualification.’ Thus, a balance must be struck between being
‘solicitous of a client’s right freely to chose his counsel,’ and protecting
the ‘need to maintain the highest standards of the profession’ and the
‘integrity of the adversary process.’” Felix
v. Balkin, 49 F. Supp.2d 260 (S.D.N.Y. 1999). In this case, a client was straddling two
sides of several lawsuits, all of which involved sexual harassment allegations
at the cosmetic counters of Saks Fifth Avenue in New York. The court basically disqualified lawyers for
not realizing what was going on–and rightly did so. The most charitable interpretation of the
facts of this case is that the lawyers were so distracted by other things that they weren’t paying
attention. Distraction is not a virtue
in the legal profession, although it is commonplace.
G. Retainer Agreements. An inappropriate retainer agreement can lead
to attorney disqualification. In a
securities case, a retainer agreement permitted a minority of a large group of
plaintiffs to control settlement arrangements.
The court disqualified counsel from representing the plaintiffs under
that agreement. Abbott v. Kidder
Peabody & Co., 42 F. Supp.2d 1046 (D. Colo. 1999).
to attorney disqualification. In a
securities case, a retainer agreement permitted a minority of a large group of
plaintiffs to control settlement arrangements.
The court disqualified counsel from representing the plaintiffs under
that agreement. Abbott v. Kidder
Peabody & Co., 42 F. Supp.2d 1046 (D. Colo. 1999).
H. Standing Again. Not just anyone has standing to seek
disqualification of counsel. Usually it
must be one of the clients. Miller v.
City of Omaha, 618 N.W.2d 628 (Neb. 2000).
In Miller, the city attorney represented both the city and his
retirement system. The court held that
an employee of the city did not have standing to seek disqualification.
disqualification of counsel. Usually it
must be one of the clients. Miller v.
City of Omaha, 618 N.W.2d 628 (Neb. 2000).
In Miller, the city attorney represented both the city and his
retirement system. The court held that
an employee of the city did not have standing to seek disqualification.
57 Thomas
D. Morgan, Oppenheimer Professor of Law at George Washington University, has
argued–against the grain–that under many circumstances it should be
permissible to sue a current client.
Thomas D. Morgan, Suing a Current Client, 9 Geo. J. Legal Ethics 1157 (Summer
1996). Professor Morgan, unlike me, sees
the Texas rule as different from the Model rule). He believes that it is looser and more
flexible than the Model rule, characteristics that he favors. Id. at 1160. For another recent essay on this topic, see
R. David Donoghue, Conflicts of Interest:
Concurrent Representation, 11 Georgetown
J. of Legal Ethics 319 (Winter 1998).
This is one essay in a larger symposium.
D. Morgan, Oppenheimer Professor of Law at George Washington University, has
argued–against the grain–that under many circumstances it should be
permissible to sue a current client.
Thomas D. Morgan, Suing a Current Client, 9 Geo. J. Legal Ethics 1157 (Summer
1996). Professor Morgan, unlike me, sees
the Texas rule as different from the Model rule). He believes that it is looser and more
flexible than the Model rule, characteristics that he favors. Id. at 1160. For another recent essay on this topic, see
R. David Donoghue, Conflicts of Interest:
Concurrent Representation, 11 Georgetown
J. of Legal Ethics 319 (Winter 1998).
This is one essay in a larger symposium.
58 See
Bogosin v. Bd. of Educ. of Community Unit School District 200, 95
F.Supp.2d 874 (N.D. Ill. 2000) (and cases there cited). (Lawyer for school district who might be
witness could not represent plaintiff against school district). See also Harter v. University of
Indianapolis, 5 F.Supp.2d 657 (S.D.N. 1998). Lawyers who do pre-trial work but who do not appear
as counsel at trial may appear as witnesses.
Mainstream Loudoun County Library, 24 F.Supp.2d 552, 558 (E.D.
Va. 1998). (Does this really make
sense?) See Atkinson v. General
Research of Electronics, Inc., 24 F.Supp.2d 894, 897 (N.D. Ill.1998); Symens
v. Smithkline Beecham Corp., 19 F.Supp.3d 1062 (D.S.D. 1997) (attorneys
“may not be a witness as to contested matters and act as counsel.” Id. at 1066 n.1), Carol v. Town of
University Park, 12 F.Supp.2d 475 (D. Md. 1997). See also United States v. Edwards, 154
F.3d 915, 921 (9th Cir. 1998) (a lawyer is unlikely to be disqualified as
attorney of record when his testimony is merely cumulative and
unnecessary). See Hutchinson v. Spanierman, 190 F.3d 815 (7th Cir. 1999).
See United States v. Sayakhom, 186 F.3d 928 (9th Cir. 1999)
(prosecutor’s investigator may testify).
Forrest v. Par Pharmaceutical, Inc., 46 F. Supp.2d 244, 247-49).
Bogosin v. Bd. of Educ. of Community Unit School District 200, 95
F.Supp.2d 874 (N.D. Ill. 2000) (and cases there cited). (Lawyer for school district who might be
witness could not represent plaintiff against school district). See also Harter v. University of
Indianapolis, 5 F.Supp.2d 657 (S.D.N. 1998). Lawyers who do pre-trial work but who do not appear
as counsel at trial may appear as witnesses.
Mainstream Loudoun County Library, 24 F.Supp.2d 552, 558 (E.D.
Va. 1998). (Does this really make
sense?) See Atkinson v. General
Research of Electronics, Inc., 24 F.Supp.2d 894, 897 (N.D. Ill.1998); Symens
v. Smithkline Beecham Corp., 19 F.Supp.3d 1062 (D.S.D. 1997) (attorneys
“may not be a witness as to contested matters and act as counsel.” Id. at 1066 n.1), Carol v. Town of
University Park, 12 F.Supp.2d 475 (D. Md. 1997). See also United States v. Edwards, 154
F.3d 915, 921 (9th Cir. 1998) (a lawyer is unlikely to be disqualified as
attorney of record when his testimony is merely cumulative and
unnecessary). See Hutchinson v. Spanierman, 190 F.3d 815 (7th Cir. 1999).
See United States v. Sayakhom, 186 F.3d 928 (9th Cir. 1999)
(prosecutor’s investigator may testify).
Forrest v. Par Pharmaceutical, Inc., 46 F. Supp.2d 244, 247-49).
59 For a
recent note on successive representation that is worth some study, see Jay J.
Wang, Conflicts of Interest in Successive Representations: Protecting the
Rights of Former Clients, 11 Geo. J.
Legal Ethics 275 (Winter 1998).
This note includes a short discussion of the standard in Texas. Id. at 281. For a longer discussion of conflicts of
interest in Texas law, see Charles F. Herring, Jr., The Rules: An Overview
of the Law, included in State Bar of Texas, Recognizing
and Resolving Conflicts of Interest, A (May 9, 1997). The same CLE booklet includes an essay by
Rachel Rivers on Motions to Disqualify.
recent note on successive representation that is worth some study, see Jay J.
Wang, Conflicts of Interest in Successive Representations: Protecting the
Rights of Former Clients, 11 Geo. J.
Legal Ethics 275 (Winter 1998).
This note includes a short discussion of the standard in Texas. Id. at 281. For a longer discussion of conflicts of
interest in Texas law, see Charles F. Herring, Jr., The Rules: An Overview
of the Law, included in State Bar of Texas, Recognizing
and Resolving Conflicts of Interest, A (May 9, 1997). The same CLE booklet includes an essay by
Rachel Rivers on Motions to Disqualify.
60 Linda
Fitts Mischler, Personal Morals Masquerading as Professional Ethics: Regulations Banning Sex Between Domestic
Relations Attorneys and Their Clients, 23 Harv.
Women’s L. J. 1 (2000) (arguing that DR 5-111(B)(3) in New York state
which prohibits sexual relations between domestic relations lawyers and their
clients is a bad rule). See also Linda
Fitts Mischler, Reconciling Rapture, Representation, and
Responsibility: An Argument Against Per
Se Bans on Attorney-Client Sex, 10 Geo.
J. Legal Ethics (1997) (arguing, for example, that the power
differential in client-lawyer relationships does not necessarily negate client
consent since covering one area of life–legal knowledge and access to the
courts–should not be equated with power in other areas of life). Professor
Mischler repeatedly emphasizes “the importance of personal, especially moral,
autonomy in a democratic society.”
Fitts Mischler, Personal Morals Masquerading as Professional Ethics: Regulations Banning Sex Between Domestic
Relations Attorneys and Their Clients, 23 Harv.
Women’s L. J. 1 (2000) (arguing that DR 5-111(B)(3) in New York state
which prohibits sexual relations between domestic relations lawyers and their
clients is a bad rule). See also Linda
Fitts Mischler, Reconciling Rapture, Representation, and
Responsibility: An Argument Against Per
Se Bans on Attorney-Client Sex, 10 Geo.
J. Legal Ethics (1997) (arguing, for example, that the power
differential in client-lawyer relationships does not necessarily negate client
consent since covering one area of life–legal knowledge and access to the
courts–should not be equated with power in other areas of life). Professor
Mischler repeatedly emphasizes “the importance of personal, especially moral,
autonomy in a democratic society.”
62 See also
Linda Fitts Mischler, Reconciling Rapture, Representation, and
Responsibility: An Argument Against Per
Se Bans on Attorney-Client Sex, 10 Geo.
J. Legal Ethics (1997) (arguing, for example, that the power
differential in client-lawyer relationships does not necessarily negate client
consent since covering one area of life–legal knowledge and access to the
courts–should not be equated with power in other areas of life). Professor
Mischler repeatedly emphasizes “the importance of personal, especially moral,
autonomy in a democratic society.”
Linda Fitts Mischler, Reconciling Rapture, Representation, and
Responsibility: An Argument Against Per
Se Bans on Attorney-Client Sex, 10 Geo.
J. Legal Ethics (1997) (arguing, for example, that the power
differential in client-lawyer relationships does not necessarily negate client
consent since covering one area of life–legal knowledge and access to the
courts–should not be equated with power in other areas of life). Professor
Mischler repeatedly emphasizes “the importance of personal, especially moral,
autonomy in a democratic society.”
63 See Harter v.
University of Indianapolis, 5 F. Supp.2d 657 (S.D.N. 1998). Lawyers who do pre-trial work but who do not
appear as counsel at trial may appear as witnesses. Mainstream Loudoun v. Board of Trustees of
the Loudoun v. County Library, 24 F.Supp.2d 552, 558 (E.D. Va. 1998). (Does this really make sense?) See Atkinson v. General Research of
Electronics, Inc., 24 F.Supp.2d 894, 897 (N.D. Ill. 1998). And Symens v. Smithkline Beecham Corp.,
19 F.Supp.2d. 1062, 1066 n. 1 (D.S.D. 1997)(attorneys “may not be a
witness as to contested matters and act as counsel.” ) rev’d in part 152
F.3d 1050 (8th Cir. 1998), Carol v. Town of University Park, 12 F.
Supp.2d 475 (D. Md. 1997). See also United
States v. Edwards, 154 F.3d 915, 921 (9th Cir. 1998) (improper vouching by
prosecutor). See C7,
B.1.a.(2) above.
University of Indianapolis, 5 F. Supp.2d 657 (S.D.N. 1998). Lawyers who do pre-trial work but who do not
appear as counsel at trial may appear as witnesses. Mainstream Loudoun v. Board of Trustees of
the Loudoun v. County Library, 24 F.Supp.2d 552, 558 (E.D. Va. 1998). (Does this really make sense?) See Atkinson v. General Research of
Electronics, Inc., 24 F.Supp.2d 894, 897 (N.D. Ill. 1998). And Symens v. Smithkline Beecham Corp.,
19 F.Supp.2d. 1062, 1066 n. 1 (D.S.D. 1997)(attorneys “may not be a
witness as to contested matters and act as counsel.” ) rev’d in part 152
F.3d 1050 (8th Cir. 1998), Carol v. Town of University Park, 12 F.
Supp.2d 475 (D. Md. 1997). See also United
States v. Edwards, 154 F.3d 915, 921 (9th Cir. 1998) (improper vouching by
prosecutor). See C7,
B.1.a.(2) above.
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