Opinion #2. Litigation Against Former Client

Issued by the Professional Ethics Commission

Date Issued: October 17, 1979

Preliminary Statement

The controversy discussed herein was originally brought to the Legal Ethics Committee of the Maine Bar Association for an advisory opinion. In light of the promulgation of the Maine Bar Rules, as amended by the Supreme Judicial Court effective May 15, 1979, it was the feeling of that Committee that such an advisory opinion issued at this time would be of minimal force and effect, given the changes in the Code of Responsibility (Rule 3) adopted by the Court and the jurisdiction of the Grievance Commission created by Rule 7, extending to both advisory and disciplinary functions. This matter is, therefore, being considered as an advisory opinion by the Grievance Commission.

An important observation should be made respecting the standards to be applied by this Commission in evaluating lawyer conduct. Rule 3 appears to this Commission to establish, in a manner similar to the Disciplinary Rules under the previously existing Maine Bar Association Code of Responsibility, minimal standards of conduct, violation of which calls for disciplinary action. The former Code also contained “Ethical Considerations” which provided guidelines for higher aspirations of the Bar for the conduct of attorneys. While these Ethical Considerations were not formally adopted as part of Rule 3, we will continue to view them, along with Ethics Committee opinions and other materials based on former canons of ethics, as aids to construction and interpretation of the present Code as set forth in Rule 3.

Facts

Lawyer A represented a client in 1958 in connection with the acquisition of certain real estate which is the subject of present litigation. In 1970 ‐ 71, Lawyer A again was called upon by the client to provide legal services in connection with the development and licensing of this property as a trailer park. The client claims that a central issue in seeking approvals of various agencies for the trailer park operation was a challenge to the adequacy of the septic system and that various contacts were made by Lawyer A with State Agencies, consultants, and the client with respect to the septic system problems. Lawyer A and his firm furnished materials to the Committee which negate any substantive knowledge or effort on the part of Lawyer A with respect to the septic system; these materials tend to show the legal services being limited to procedural assistance and zoning advice. The representation terminated prior to the approval of the trailer park because of a dispute over legal fees.

In November 1978, three tenants of the now functioning trailer park brought suit against Lawyer A’s former client, alleging entitlement to compensatory and punitive damages under a theory of unfair trade practices based upon malfunctioning of Defendant’s sewage disposal system. All tenants are represented by Lawyer A’s law firm. The former client objects to this new representation, claiming that knowledge derived from Lawyer A’s prior representation on a confidential basis now is being used against him in connection with the pending suits. He requests this committee’s opinion as to the propriety of Lawyer A’s present representation of the Plaintiff tenants. Lawyer A’s firm resists withdrawal from its present representation asserting that the present malfunctioning of the sewage system is unrelated to the scope of representation provided to the client during the licensing and approval proceedings, and that nothing disclosed at that time has any bearing on the instant suit.

Discussion

While it is clear that ethical considerations normally preclude a lawyer from suing an existing client on behalf of another, it is likewise clear that the mere existence of a now‑terminated prior attorney‑client relationship does not disable an attorney from representing interests generally antagonistic to the former client. Any such disability must stem, if at all, from the duty of a lawyer to preserve the confidences and secrets of a client, even though the relationship has terminated; and the risk of apparent or actual disclosure of confidences increases as the degree of identity of subject matter in the two representations increases.

The obligation of a lawyer to preserve the confidences of his client continues after the termination of his employment. See Reporter’s Note to Rule 3.6(1). Under the facts presented here, there is no exemption from the mandate of Rule 3.6(1)(i) which prohibits a lawyer from knowingly revealing a confidence or secret of the client or from using the same to his client’s disadvantage.

If the subject matter of the present suits in fact encompasses the subject matter of the former employment, or if confidential information derived from the former employment may be involved in the new representation, neither Lawyer A nor his firm may represent these Plaintiffs without the former client’s written consent. Rule 3.4(e) and (k). On the other hand, if there is no identity of subject matter and no possibility of use of confidential information, then no impediment exists to Lawyer A’s firm continuing the new representation. There is no way for this Commission to determine whether or not confidences are now being used against the former client, or may be used against the former client, or whether there is an identity of subject matter in the two representations. In the context of an advisory opinion, this Commission cannot resolve issues of disputed fact; were the issue presented as a grievance, factual issues would be determined after hearing.

This inability to resolve a factual dispute, while rendering impossible any present judgment as to violation of the minimal standard of conduct set forth in Rule 3, does not end our consideration, however. We think it important to refer to the fabric from which our present Code was derived, particularly since the present facts raise the unfortunate (though recognized‑see Maine Bar Rule 3.6(1)(3)) circumstance that in order to prove or disprove the applicability of Rule 3.4(e), it may become necessary to invade the very confidentiality of the prior client’s disclosures that the Rules are designed to protect.

A review of pertinent authorities persuades us that it would be the better practice for Lawyer A’s firm to withdraw from the present representation. Ethical considerations, as well as Rule 3.4(e), suggest avoidance of representation where there may be a possible violation of confidence. ABA Informal Opinion, No. 85. See also Rule 3.4(e). Cf, ABA Opinion 165 (1936):

An attorney must not accept professional employment against a client or a former client which will, or even may, require him to use confidential information obtained by the attorney in the course of his professional relations with such client regarding the subject matter of the employment . . .

Moreover, representations which raise an appearance of a conflict of interest should be avoided:

“The matter is not to be determined by such facts as that the original services were rendered on the employment of a lawyer, or that the services may have had no particular bearing upon the phases of the litigation contemplated to be conducted on behalf of the new employer, or that it is probable that no information was required in the first employment that might prove useful in the subsequent employment. Irrespective of any actual detriment, the first client might naturally feel that he in some way had been wronged, when confronted by a final decree obtained by a lawyer employed in his behalf in the earlier part of the same litigation. To maintain confidence in the Bar, it is necessary not only to avoid actual wrongdoing, but an appearance of the wrongdoing.” Drinker (Legal Ethics) Page 115, Quoting New York County Bar Opinion 202. Cf., Canon 9.

We would note that Rule 3.5(c)(7) authorizes withdrawal from a case where continued employment is likely to result in violation of the rules. If it is 'likely' that the identity of the subject matter or the risk of use of confidential information proscribed by Rule 3.4(e) would be found to exist, then Rule 3.5(c)(7) would permit Lawyer A to resign his present representation in the face of objection by his former client.

The Commission would also cite Rule 3.2(f)(4) as bearing on this problem. That Rule prohibits a lawyer from engaging in conduct that is “prejudicial to the administration of justice.” For Lawyer A or his firm to continue the present representation of the plaintiffs may well prejudice the administration of justice in two respects:

  1. By fostering the erosion of public confidence in the confidentiality of lawyer communications, as discussed above, and

  2. By risking the necessity to withdraw, after further proceedings and in the light of deeper involvement in the case, thus placing greater burdens upon substitute counsel and the client.

Thus, while we cannot say, without resolution of disputed fact issues, that the conduct of Lawyer A and his firm falls below the standard enunciated in Rule 3, we do feel that the spirit of the ethical considerations which have long guided our legal profession strongly suggest that withdrawal is the most appropriate course for Lawyer A’s firm to take.


Enduring Ethics Opinion

Enduring Ethics Opinion #2 [December 2010]