Opinion #155. Arguing Different Sides of Same Legal Issue in Unrelated Cases

Issued by the Professional Ethics Commission

Date Issued: January 15, 1997

Question

Bar Counsel has posed the following general question to the Commission.

The lawyer represents one client who is a party in Lawsuit A, and a second client who is a party in Lawsuit B. The two lawsuits are unrelated except that they present the same legal issue. The clients interests are conflicting in the sense that they desire opposite resolutions of the same issue. The lawyer proposes to represent both clients, thereby causing the lawyer simultaneously to advocate opposing positions on the common legal issue.

Bar Counsel inquires into whether and under what circumstances the representation could create a conflict of interest under the Bar Rules.

Answer

The broad question framed by Bar Counsel poses what is sometimes referred to as an “issue” or “positional” conflict.

Bar Rule 3.4(b)(l) defines a conflict of interest.

Representation would involve a conflict of interest if there is a substantial risk that the lawyer’s representation of one client would be materially and adversely affected by the lawyer’s duties to another current client, to a former, or to a third person, or by the lawyer’s own interest.

Thus, the question is whether the proposed representation would violate this rule.

Research reveals surprisingly little analysis of this issue either in treatises, commentaries or case law. See I Hazard & Wodes, The Law of Lawyering, §1.07:04 (2d ed. 1990) and Wolfram, Modern Legal Ethics, §7.3.3 (1986). The decisions in Estates Theatres Inc. v. Columbia Pictures Industries, Inc. 345 F.Supp. 93 (S.D.N.Y. 1972) and Fiandaca v. Cunningham.827 F.2d 825 (1st Cir 1987) are sometimes cited by the commentators as examples of “issue conflict” decisions. But neither case involved facts such as those presented by Bar Counsel which posit a pure legal conflict in different litigated matters. In Estates Theatres a lawyer’s competent representation of one client could have required him to call another of his clients as a witness, possibly eliciting testimony from that second client contrary to the second client’s interest.[1] In Fiandaca a legal services organization proposed to represent clients in a lawsuit seeking to close a state institution, while simultaneously representing another group of clients in a separate lawsuit that sought to keep open that same institution. Both cases appear to rest on traditional conflict analysis resulting from the clients’ directly opposing interest in the outcome of a representation. In both cases the lawyers’ clients were either involved in the same litigation (either as a party or as a potential witness with a conflicting interest, as in Estates Theatres), or were advancing conflicting positions regarding the outcome of the same event (whether the institution should be closed, as in Fiandaca). The question posed here involves neither such circumstance.

Our research reveals only a single opinion on the broad issue posed by Bar Counsel. In ABA Formal Opinion 93‑377, the ABA Ethics Committee, applying the ABA Model Rules, held that;

if the two matters are being litigated in the same jurisdiction, and there is a substantial risk that the law firm’s representation of one client will create a legal precedent, even if not binding, which is likely materially to undercut the legal position being urged on behalf of the other client, the lawyer should either refuse to accept the second representation or (if otherwise permissible) withdraw from the first, unless both clients consent after full disclosure of the potential ramifications of the lawyer continuing to handle both matters.

The ABA Opinion goes on to require that even if the cases are not being litigated in the same jurisdiction,

the lawyer should nevertheless attempt to determine fairly and objectively whether the effectiveness of her representation of either client will be materially limited by the lawyer’s (or her firm’s) representation of the other.

The opinion enumerates four factors to be considered by the lawyer in determining the existence of a substantial risk of adverse effect.

(1) whether “the issue is of such importance that its determination is likely to affect the outcome of at least one of the cases,”

(2) whether the determination of the issue in one case is “likely to have a significant impact on the determination of that issue in the other case,”

(3) whether there would be any inclination by the law firm to “soft pedal or deemphasize certain arguments or issues—which would otherwise be vigorously pursued—so as to avoid impacting the other case,” and

(4) whether there would be inclination within the firm to “alter any arguments for one or both of the clients, so that the firm’s position could be reconciled—and, if so, could that redound to the detriment of one of the clients.”

The ABA opinion implies, without discussion or express statement, that the principle of vicarious disqualification also applies to such conflicts.

After careful consideration we decline to join the ABA’s view. First, the ABA opinion is based, in part, on the ABA Model Rules and the commentary accompanying those Rules.

The Comment to Model Rule 1.7 states:

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 position 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.

This comment appears to confirm that the conflict of interest provisions of the Model Rule contemplate their application to issue conflicts. No similar commentary is found in the Maine Bar Rules.

Second, the Reporter’s Notes to the 1993 revision to Bar Rule 3.4(b) specifically states:

It was not intended that the interests of two or more clients would be deemed conflicting *solely* because, in otherwise unrelated proceedings, a lawyer might be required to advance contradictory legal positions on their behalf.

(emphasis supplied). In other words, an “issue conflict,” without more, is not a conflict of interest.

Third, adoption of the ABA position would necessarily imply that law firms must use the conflict screening procedures for “issue conflicts” that are generally used for customary direct conflicts. Development of such an issue conflict warning system is, however, a far more formidable task, even for a firm of moderate size, than determining whether the firm is involved with clients who are at odds in the same or related matters or determining whether a prospective opponent is also a client in an unrelated matter. We decline to interpret Rule 3.4(b)(1) in such a way as to require the Bar to adopt screening procedures for issue conflicts which experience tells us are, in any event, extremely rare.

Although we conclude that an “issue conflict” standing alone is not a conflict within the meaning of Bar Rule 3.4(b), we note that counsel has an obligation to both clients under Rule 3.6(a)(1) to employ “reasonable care and skill” and to “employ the lawyer’s best judgment” in the representation of her clients. In light of this rule, an attorney must be mindful of the possibility that contemporaneously arguing opposite sides of the same issue before the same judge or panel of judges could impair her effectiveness on behalf of both clients, thereby arguably violating Rule 3.6(a)(1). It is not possible to define all the circumstances in which this rule might be implicated, since it will depend on the particular facts and circumstances.

Dissent

One member of the Commission dissents and would substitute a slightly modified version of the principle established in ABA Formal Op. 93‑377 for that expressed in the majority opinion. The ABA opinion would bar undertaking a matter if there were a substantial risk that it would establish a legal precedent which was likely to materially undercut the legal position being urged by that law firm on behalf of another client. Conversely, the majority would permit a law firm to advocate conflicting positions on the same issue even though it would, under some circumstances, materially and adversely affect the firm’s duty to one client in violation of Bar Rule 3.4(b)(1) by establishing a disadvantageous precedent in the case of client #2.

If an associate of the firm who was involved in a case in the U. S. District Court for the Southern Division of Maine in which he represented an employee were to discover that a senior partner in the same firm was representing an employer in a case to be tried in front of another judge in the Northern Division in which he was asserting no liability under similar circumstances, it seems likely that he would be subject to real or imagined pressure to defer to the interests of the better‑financed employer client of the senior partner rather than establish a potentially damaging precedent.

Similarly, if an attorney were arguing before the First Circuit Court of Appeals an issue in which there was no controlling precedent while at the same time, another lawyer in his firm were arguing in the U. S. District Court in Maine the opposite side of the same issue, could it be seriously argued that the interests or the second client would not be “materially or adversely” affected if the First Circuit were to rule in favor of the first client? This result would, nevertheless, be permitted by the majority opinion.

The view taken by the majority conflicts with that adopted by the American Law Institute in its proposed final draft of the Restatement of the Law Governing Lawyers (3/29/96). Comment f to proposed §209 regulating conflicts states that:

... (A) conflict is presented when there is a substantial risk that a lawyer’s action in Case A will materially and adversely affect another of the lawyer’s clients in Case B.[2]

The majority cites no authority in support of its view that an exception to the usual conflict rule exists in the case of positional conflicts.

The majority has overstated the significance of a comment in the Reporter’s Notes to Bar Rule 3.4(b) that a conflict of interest would not be deemed to exist solely because an attorney intended to argue contradictory positions in unrelated proceedings. As stated, the quoted language is unobjectionable. It is only when the representation of one client would “materially and adversely affect” the attorney’s duty to another client that a conflict of interest arises. The Reporter’s use of the term “solely” suggests that he would not disagree with this conclusion.

The real basis for the majority’s restrictive application of Rule 3.4(b)(1) in cases involving positional conflicts is that the task of searching for the existence of such conflicts within a law firm, particularly a large one, would be overwhelming. However, if an attorney were deemed to be guilty of a conflict of interest only when he or she knowingly[3] advocated a position on an issue on which another member of the firm had been engaged to argue the opposing point of view, it would be unnecessary to search the office for potential positional conflicts. At the same time, the Bar and the public would not be exposed to the spectacle of an attorney litigating an issue knowing that, if he or she were successful, the outcome would materially and adversely affect the resolution of a pending matter involving another client of the same law firm.


Footnotes

[1] Estates Theatres also involved interpretation of DR 5-105 of the ABA Model Code of Professional Responsibility, which Code differs significantly from the Maine Bar Rules.

[2] The factors which should be considered in determining whether there is a risk of such an effect are set forth in the rule.

[3] “Knowingly” is used here to mean possessing information without having conducted a conflict search which indicates that the other side of the same issue is being advocated on behalf of another client of the same law firm. Obviously, one who does not know that another attorney in the same law firm will be arguing the opposite side of a critical legal issue cannot be accused of “pulling punches” if his legal position is ultimately unsuccessful.


Enduring Ethics Opinion

Enduring Ethics Opinion #155 [June 2011]