Risk Update

Conflicts Decisions & Developments — Freivogel Findings, (Former) State Agency Lawyers and Conflicts, Public Defender Compensation Cuts and Conflicts

Posted Dan Bressler

Here’s the latest from Bill Freivogel, ever vigilant in his reading and research:

  • Turnbow v. Hiegel Bldg. Solut., LLC, 2024 Ark. App. 438 (Ark. App. Sept. 18, 2024).
    • “Hiegel is suing the Turnbows to collect amounts owing from construction of Turnbows’ house. Because the Turnbows’ lawyer (‘Lawyer’) had represented other companies in which Hiegel’s owner (‘Owner’) had an interest, Hiegel moved to disqualify Lawyer in this case. The trial court granted the motion.”
    • “In this opinion the appellate court reversed. The court applied Rule 1.13 according to its terms and said because Lawyer never represented Owner individually on any matters related to this one, no conflict. Very fact-specific. The court mentioned Arkansas’ strange adherence to an appearance-of-impropriety test, but found no such violation here.”
  • Drake Univ. v. Des Moines Area Cmty. Coll. Found., No. 4:24-cv-00227-SMR-SBJ (S.D. Ia. Sept. 9, 2024).
    • “Drake sues Foundation for trademark infringement and related causes. Lawyer, now at Firm 2, represents Foundation. Lawyer was at Firm 1 from 2000 to 2020. Firm 1 has done Drake’s IP work for many years, including work on the trademarks in question. Drake has moved to disqualify Lawyer on both current-client and former-client principles.”
    • “In this opinion the court denied the motion. As to current client, the court relied on USPTO representation arcana (read the opinion). As to former client, the court found that Drake had not shown that Lawyer, at Firm 1, had learned anything relevant to this case.”
  • Naylor v. BAE Sys. Inc., 2024 WL 4112322 (E.D. Va. Sept. 5, 2024).
    • “Plaintiff is an employee of Defendant. Defendant administers Defendant’s benefit plan for employees. Plaintiff brought this case claiming Defendant has mismanaged the plan. Law Firm is representing Defendant regarding Defendant’s administration of the plan and in this case.”
    • “Plaintiff moved to disqualify Law Firm in this case because in its plan advisory role, Law Firm also represents Plaintiff. In this opinion the court denied the motion to disqualify, holding that, usually, the lawyer for a plan and its administrator does not represent a plan’s beneficiary — here, Plaintiff.”
  • Nova Oculus Canada Mfg. ULC v. Sather, 2024 ABKB 517 (CanLII) (Ct. K.B. Alb. Aug. 27, 2024).
    • “Order denying a motion to disqualify Law Firm. The opinion has no apparent precedential value, so no extended discussion here. It is a workmanlike treatment of: (1) Was there a lawyer-client relationship?; (2) Was it a near client relationship?; and (3) Did a Law Firm owe a duty of confidentiality to a non-client?”
    • “The case is a dispute between two companies over their past dealings. During some of those past dealings Law Firm lawyer was the only lawyer involved. Only the responding company had an engagement agreement with Law Firm, and paid Law Firm. Very fact-intensive.””
  • Gill v. JUS Broad. Corp., 2024 WL 4107251 (E.D.N.Y. Sept. 6, 2024).
    • Plaintiff listed Expert Witness on the valuation of a company. Defendants moved to preclude Expert’s testimony on a number of grounds. One ground was that Expert had a conflict because ‘he and Plaintiff’s counsel refer business to and perform services for each other.'”
    • “While that may be grist for cross-examination, it is not grounds for exclusion. For exclusion, the conflict must be “extraordinary.” See, El Ansari v. Graham, 2019 WL 3526714 (S.D.N.Y. Aug. 2, 2019).”

“[New York] Ethics Opinion 1274: Conflicts of interest, former clients, government lawyers”

  • “A lawyer employed in the counsel’s office of a state agency would not have a conflict in representing the agency in an enforcement action against a client the lawyer had formerly represented in private practice unless the lawyer would normally be expected to have acquired confidential information in the course of the lawyer’s prior representation that was material to the enforcement action. If there were a conflict, the conflict would be imputed to the counsel’s office, and screening would not suffice to avoid imputation, absent consent of the former client.”

Ethical issues for lawyers related to the transition to the State Public Defender system: “IDAHO STATE BAR FORMAL ETHICS OPINION NO. 137 September 18, 2024” —

  • “Can a reduction in a lawyer’s compensation create a financial issue for the lawyer that may result in a potential conflict of interest? Yes.”
  • “Must a lawyer seek withdrawal from a pending case if there is a significant risk that the lawyer’s representation of a client will be materially limited due to a financial personal interest conflict of interest? Yes.”
  • “Lawyers whose financial compensation will decrease from their current county pay rate face a potential concurrent conflict of interest. The lawyer must assess whether there is a significant risk that their representation of clients will be materially limited due to their own personal financial interests, i.e., a reduction in pay rate to perform the same legal services. If the lawyer determines that there is a significant risk that their representation of one or more clients will be materially limited because of their own personal interests, then the lawyer has a concurrent conflict of interest under I.R.P.C. 1.7(a)(2).”
  • “Some conflicts may be consentable under I.R.P.C. 1.7(b). However, each subpart of I.R.P.C. 1.7(b) must be met for a lawyer with a concurrent conflict of interest to continue the representation. I.R.P.C. 1.7(b)(1) requires the lawyer to reasonably believe that the lawyer will be able to provide competent and diligent representation to each affected client notwithstanding the concurrent conflict of interest.”
  • “This may be difficult for a lawyer to “reasonably believe” when the conflict of interest involves the lawyer’s personal financial interest. If the lawyer does not reasonably believe that they can provide competent and diligent representation due to their own personal financial circumstances, informed consent from each affected client in writing under I.R.P.C. 1.7(b)(4) will be ineffective to allow the representation to continue because I.R.P.C. 1.7(b)(1) cannot be met in that instance.”
  • “Courts have broad discretion in whether to grant a motion to withdraw. If a court denies the lawyer’s motion to withdraw from the case, even if the lawyer’s request to withdraw is due to a clear conflict of interest, the lawyer must continue to represent the client. ‘When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating
  • the representation.’ I.R.P.C. 1.16(c).”