State Bar of Arizona Ethics Opinions
Two attorneys employed by the same law firm separately representing a plaintiff client and a defendant client on appeal in unrelated action. Because of similar fact situation, one client will necessarily prevail and the other lose.
Law Firm A represents a plaintiff/employee in a federal action relating to a dispute over employment. Lawyer X of that firm represents the employee in the action. Law Firm A also represents a defendant/employer in an unrelated action involving a similar fact situation. Lawyer Y of that firm represents the defendant/employer in this action.
Both cases are now on appeal before the United States Court of Appeals for the Ninth Circuit. Both cases were resolved below on identical issues of law. The sole issue on appeal in each case is whether this issue of law was correctly decided. Thus, if Lawyer X prevails in the appeal. On behalf of the plaintiff/employee, Lawyer Y will necessarily lose the appeal on behalf of the defendant/employer, and vice versa.
Both clients have been informed of the potential conflict inherent in this situation, and have consented to the continued representation of their interests by Law Firm A. The defendant/employer has in-house counsel, who has carefully reviewed the situation and determined that his client wishes Law Firm A to represent it on appeal. The plaintiff/employee has consulted independent counsel concerning the potential conflict and, after full disclosure of the relevant facts, has informed Law Firm A that he wishes Lawyer X to continue to represent him on appeal.
May Law Firm A, with ethical propriety, continue to represent both clients on appeal and, if not, may it continue to represent one or the other?
ETHICAL RULE INVOLVED
ER 1.7. Conflict of Interest; General. Rule, and comment thereto.
ER 1.7 provides as follows:
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) The lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
The initial question for decision is whether the situation presented, where two different lawyers from a single firm will be required to take directly opposite positions before a single appeals court on the same legal issue, constitutes a conflict of interest. We are not aware of any previous Arizona ethics opinion on point.
The Comment to ER 1.7 provides some guidance in answering this question. Under the heading "Conflicts in Litigation," the Comment offers the following discussion:
A lawyer may represent parties having antagonistic positions on a legal question that has arisen in different cases, unless representation of either client would be adversely affected. Thus, it is ordinarily not improper to assert such positions in cases pending in different trial courts, but it may be improper to do so in cases pending at the same time in an appellate court.
While the Comment refrains from concluding that this situation automatically represents a conflict of interest, we have no difficulty in concluding that the problem presented is one that falls within the general prohibitions of ER 1.7. We start with the proposition that, if one lawyer in a firm is disqualified under the strictures of ER 1.7 from representing a client, the entire firm is so disqualified. See ER 1.10(a). Under the definitions set forth in ER 1.7 and its Comment, representation of the plaintiff/employee may not be technically “directly adverse" to the defendant/employer, since neither suit involves Law Firm A cuing an existing client. But, even if the Rule is interpreted in this manner, it is plain that Law Firm A is at least involved in a situation where the representation of the plaintiff/employee may be materially limited by the lawyer's responsibilities to another client.” See ER 1.7(b).
It is the responsibility of the Law Firm in the first case to argue that existing law requires that the plaintiff/employee be allowed to pursue his case at trial; it is the job of the Law Firm in the other appeal to argue precisely the contrary position. Put differently, it is Lawyer X's responsibility to pursue, within the permissible limits of advocacy, a result that is directly contrary to the result which Lawyer Y must simultaneously pursue before the same court. It requires little imagination to foresee a circumstance where an appellate judge would question either lawyer as to whether her partner was mistaken in making legal arguments directly contrary to those being presented. At the very least, this is a circumstance where it is possible that, despite all the best efforts of counsel involved, "representation of either client would be adversely affected" by the circumstances.
Having so concluded, we next turn to the issue of whether this conflict can be cured by client consent. Since both cases involve issues of law, this is not a situation where, as the Comment cautions, "it is impossible to make the disclosure necessary to obtain consent.” We therefore start from the assumption that both clients have consented after consultation and full disclosure of the relevant facts.
The remaining question is whether this is a case in which such consent is permissible. The Comment to ER 1.7 indicates that consent is not appropriate "when a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances.” We do not think that this is such a case. As a factual matter, both clients have consulted disinterested counsel and obtained their advice that Law Firm A may proceed. But, more importantly, we do not believe that the presentation of purely legal arguments before an appellate court is the sort of situation that automatically vitiates the informed consent of the clients involved to Law Firm A's continued involvement. Appellate judges are presumably trained to recognize that advocates are often required to take positions contrary to those previously taken by their partners, when the interests of a client so require. We cannot conclude that the judges of the Ninth Circuit will be prejudiced against one side or the other in either of the two Cases at issue simply because of Law Firm A's involvement. The questioning at oral argument may be somewhat uncomfortable for the lawyers involved, but we cannot conclude that the situation will necessarily prejudice either of the clients.
In short, we conclude that the client consent obtained here allows the continued involvement of Law Firm A in the appeals. Our opinion does not extend to fact situations other than the one presented, and would not necessarily apply, for example, if the Ninth Circuit either consolidated the appeals for disposition or granted rehearing en banc in an attempt to resolve disparate results by two panels. Nor do we approve the practice involved. Rather, we simply conclude that, under the facts of this case, with client consent after full disclosure, the firm can proceed with its current representation of both clients on appeal.
One member of the committee expressed the following views:
I have some misgivings about [the draftsman's] opinion because of the rather special fact that the two cases involved here are pending before an appellate court. See ER 1.7 Comment ("Conflicts in Litigation"). The Ninth Circuit may make some law when it resolves these cases; so the decisions may have implications for many people in addition to the immediate parties. Both clients seem quite capable of making an informed judgment as to whether to incur the risk that their lawyer's performance will be adversely affected by the law firm's interest in convincing the same court to decide the same issue at the same time in a contrary, way. The further issue is whether to rely on the clients to make the judgment that the risk to the general public is acceptable too -- the risk, that is, that the Ninth Circuit will not be as well informed in these cases as it would be if one firm were not arguing both sides. The conflict of interest rules of ER 1.7 appear to be designed solely to protect clients, as [the draftsman] recognizes. But, even with full disclosure and client consent, isn't it arguable that this arrangement is prejudicial to the administration of justice, in violation of ER 8.4?
Incidentally, while I know of no cases on this subject, there was a discussion of the issue in Stanley Kaplan's Legal Ethics Forum, 66 American Bar Ass'n Journal 97 (1980).
Formal opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceeding. This opinion is based on the Ethical Rules in effect on the date the opinion was published. If the rules change, a different conclusion may be appropriate.
© State Bar of Arizona 1987