Risk Update

Advance Waivers — Coke Clash Continues, Advance Conflict Waivers Under Analysis

Paul Hastings Slams Coke Bid to Boot Firm From SuperCooler Suit” —

  • “Coca-Cola Inc. is seeking a ‘tactical advantage’ by asking a federal judge to have Paul Hastings removed from a lawsuit against the beverage giant, the Big Law firm said in a case highlighting its fallout with a one-time client.”
  • “Paul Hastings lawyers should not be barred from representing a company suing Coke for more than $100 million, the law firm said Wedenesday in a filing in federal court in Orlando, Florida. Coke, which Paul Hastings represents in a human rights matter, has accused the firm of trying to ‘fire’ it as a client by working for SuperCooler Technologies Inc. in an unrelated lawsuit against the soda-maker.”
  • “The dispute tests the limits of ‘advance conflict waivers,’ in which firms ask clients to agree ahead of time to allow their lawyers to represent others in situations that could otherwise pose an ethical problem.”
  • “Paul Hastings called Coke’s attempt to remove the firm from the SuperCooler case a ‘technique of harassment’ designed to help the company fight off the lawsuit. Coke agreed Paul Hastings could represent other clients in future litigation against the company when it signed an engagement letter in 2021 that included a ‘waiver of prospective conflicts,’ according to the firm.”
  • “SuperCooler alleges Coke misused its trade secrets and broke promises to use its technology that rapidly chills beverages, according to court filings.”
  • “A group of lawyers from Cahill Gordon & Reindel representing SuperCooler jumped to Paul Hastings over the last two months, bringing the case with them. Coke said at least one of those lawyers, Bradley Bondi, did not alert the company he was joining Paul Hastings to work on the lawsuit even after Coke raised concerns about the firm taking a case against it.”
  • “The conflict waiver Coke signed was ‘fully informed’ and signed by a ‘sophisticated consumer of legal services,’ the firm said.”

Advance Conflict Waivers: Use Them or Lose Them?” —

  • “Many lawyers use advance or future conflicts waivers to streamline the conflict waiver process for future matters involving current clients, including those who may subsequently become former clients. An effective advance conflict waiver will permit lawyers to take on matters adverse to a client without the need for a subse- quent waiver from that client.”
  • “This article offers two suggestions for the possible use of advance waivers. First, advance waivers may permit lawyers to seek more streamlined consents to conflicts that come up repeatedly with the same client or clients.”
  • “Second, recent case law suggests that con- flicts waivers may be an effective tool for maintaining representation of one client when adversity arises during a joint representation. Courts appear to be more likely to enforce advance waivers in the context of jointly represented clients because the lawyer is at least arguably able to be more specific as to both 1) the clients whose interests may become adverse in the future, and 2) the types of matters covered by the waiver.”
  • “Although not the focus of this article, two other points bear noting. First, a lawyer seeking a conflict waiver, whether for a current conflict or a future one, would be well-advised to discuss the waiver with the client before signing. Such discussions are especially important in the context of an advance waiver. Second, all waivers should, at a minimum, discuss loyalty/zealousness and confidentiality/privilege, as noted in greater detail below.”