WITNESS - ADVERSE - CURRENT/FORMER CLIENT
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You
discover that an important witness on the other side of a pending case is a
current client of your firm (Client A). You believe that in order to
represent your client in the case (Client B), you must depose A, subpoena A's
documents, and then cross-examine A at the trial. Change the facts.
Client A has not used your firm for anything for about two years. The
purpose of this section is to explore the extent to which this discovery and
cross-examination could be a conflict of interest. The analysis will be
broken down between the current client situation and that of the former client.
Current Clients
Cmt. [6] to Rule 1.7 provides as follows:
[A] directly
adverse conflict may arise when a lawyer is required to cross-examine a client
who appears as a witness in a lawsuit involving another client, as when the
testimony will be damaging to the client who is represented in the lawsuit.
ABA Op. 92-367 (1992)
deals with this situation quite concisely. Following is the Committee's syllabus
for the opinion:
A lawyer who in the course of representing
a client examines another client as an adverse witness in a matter unrelated
to the lawyer's representation of the other client, or conducts third party
discovery of the client in such a matter, will likely face a conflict that is
disqualifying in the absence of appropriate client consent. Any
such disqualification will also be imputed to other lawyers in the lawyer's
firm.
The opinion reminds the
reader that the conflict rules are based upon the twin concerns of loyalty and
confidentiality. Return to Client A in the above illustration. Would
not wrenching A's documents from him with a subpoena create serious issues of
loyalty? Might you be able to identify what documents to seek based upon
your knowledge of what types of documents A keeps and where he keeps them, thus
subtly breaching your duty of confidentiality to A? And suppose your
discovery causes some of A's information to become public. That would be
another way of breaching your duty of confidentiality. Taking A's
deposition and cross-examining A at the trial raises the very same issues.
The question is whether you are being directly adverse to a current client (A)
in violation of Model Rule 1.7(a)(1).
Issues also arise as to
Client B. What if your inclination is to protect A, because A is the more
important client. You do not want to offend A or cause any breaches of
confidentiality. You might be tempted to soft-peddle your discovery and
cross-examination. Thus, in the unlikely event you felt your could stay in
the case, you would still have to counsel B on these dangers and obtain B's
consent under Model Rule 1.7(a)(2).
In criminal cases, another
problem appears. Where you have the 1.7(a)(2) issue described in the prior
paragraph, you also have a Sixth Amendment/right-to-effective-counsel issue if,
for example, Client B is a criminal defendant. (This muddies the analysis
in criminal cases; nevertheless, one cannot ignore the criminal cases, because
the opinions in civil cases continue to refer to criminal cases in their
analyses.)
The following cases and
opinions follow the ABA opinion: Kevlik v. Goldstein, 724 F.2d 844 (1st
Cir. 1984); United States v. Jeffers, 520 F.2d 1256 (7th Cir. 1975); Municipal
Rev. Services, Inc. v. Xspand, Inc., 2008 U.S. Dist. LEXIS 20720 (M.D. Pa.
March 14, 2008) (court implied that firm could bring in special counsel to
depose current clients); In Re Suard Barge Services, Inc., 1997 U.S. Dist. LEXIS 12364 (E.D. La.
August 18, 1997); Ex parte Osbon, 888 So. 2d 1236 (Ala. 2004); People v. Rhodes, 524 P.2d 363 (Cal. 1974); Hernandez v. Paicius, 134
Cal. Rptr. 2d 756 (Cal. App. 2003); In re Infotechnology, Inc., 582
A.2d 215 (Del. 1990); State v. Reis, 666 P.2d 612 (Hawaii 1983); Burgos v. Giannakakos, 1998 Conn. Super. LEXIS 3328
(Conn. Super. 1998); Narel Apparel Ltd. v. American Utex Int'l., 460
N.Y.S.2d 125 (N.Y. App. Div. 1983); Committee on Legal Ethics v. Frame, 433 S.E.2d 579 (W. Va.
1993); Conn. Op. 99-14 (1999); Md. Op. 81-73 (1981); Mich. Op. RI-239 (1995); Mich.
Op. RI-218 (1994); Nassau County Op. 86-46 (1986); Ore. Op. 1991-110 (1991); Pa.
Op. 2002-71 (2002); and Tenn. Op. 85-F-92 (1985). Indeed, the former client cases all
confirm the analysis, except for the fact that it is not necessary in those
cases to analyze the direct adversity issues raised by Model Rule 1.7(a)(1).
As will be seen, the analysis shifts to the substantial relationship test under
Model Rule 1.9(a). R.I. Op. 95-11 (1995), and Va. Op. 1638 (1995) are
somewhat more permissive, but involve getting the relevant clients' consents.
For a wacky deviation
from the ABA approach to current clients, see Kevin Jaggers and Bolus v. Hon.
James M. Shake, 37 S.W.3d 737 (Ky. February 22, 2001). Law Firm A
represents Party A in a legal malpractice case, in which Law Firm B is the
defendant ("Case 1"). Firm A also represents a former associate
(Jaggers) of Firm B in an unrelated legal malpractice case ("Case
2"). Case 2 involved Jaggers' activities after he left Firm B.
Firm B has expressed an intention to call Jaggers as a witness in Case 1.
Firm B has moved to disqualify Firm A in Case 1 because Firm A will have to
cross-examine Jaggers, its own client (in Case 2). The Kentucky Supreme
Court first stated that it would assume, for purposes of the opinion, that Firm
B would, in fact, call Jaggers, and that Firm A would cross-examine Jaggers.
Nevertheless, the court ruled that Firm A should not be disqualified. The
court held specifically that Firm A's cross-examining its current client,
Jaggers, would not be a violation of Kentucky's version of Model Rule 1.7(a)(1). Then, the court did an
analysis under the appearance of impropriety standard, still recognized by
Kentucky courts. The court said simply:
[T]he mere fact of two attorneys in the same firm representing a party on
the one hand and being adverse to that person as a witness in another case on
the other hand is too attenuated to create an appearance of impropriety.
The court did not seem to question the standing of Firm B to make the
motion, even though Firm B offered no reason why it would be harmed by Firm
A cross-examining its former associate, Jaggers. The court did note
that Party A had "waived the conflict." That is fine as far
as it goes. Clearly, Party A needed to be consulted and consent pursuant
to Rule 1.7(a)(2). But,
one would have thought that Jaggers, too, should have consented pursuant to
Rule 1.7(a)(1), because his own law firm (Firm A) would be cross-examining him.
This opinion is contrary to ABA
Op. 92-367 (1992), and the authorities mentioned above. The Kentucky
Supreme Court did not discuss the ABA opinion. It cited just two cases,
neither having anything to do with the propriety of cross-examining a current
client. For that and other reasons Jaggers gets a well-deserved
thrashing at Edward C. Brewer & Kelly S. Wiley, Survey: Professional
Responsibility, 29 N. Ky. L. Rev. 35 (2002).
Referral Relationship and
Failure to Cross Examine. Estate of Re v. Kornstein, Veisz &
Wexler, 958 F. Supp. 907 (S.D.N.Y. 1997). Paul
Weiss referred substantial business to the Kornstein firm. The Kornstein
firm represented Re in an arbitration against Bear Sterns, Re's former
employer. Bear Sterns was an important client of Paul Weiss, although Paul
Weiss did not handle the Re arbitration. A Paul Weiss partner testified
against Re in the arbitration. The Kornstein
firm lawyer did not cross examine him. In a malpractice action against the
Kornstein firm, Re claimed that the Kornstein firm breached its fiduciary duty
to him by not telling him about the referral relationship and by not cross
examining the Paul Weiss partner. In this opinion the court denied summary
judgment to the Kornstein firm on the breach of fiduciary count.
Court
Implies that Firm Could Bring in Special Counsel to Take Depositions of Current
Clients. Municipal
Rev. Services, Inc. v. Xspand, Inc., 2008 U.S. Dist. LEXIS 20720 (M.D. Pa.
March 14, 2008).
Treatise. Rotunda
& Dzienkowski § 1.7-6(c).
Former Clients
This discussion is really
about a subset of the issue treated at this site at "Former Clients - the
Substantial Relationship Test." There, we discuss when a
current client becomes a former client, and what is a substantial
relationship. To go there, click here.
In the following cases the
court held that a lawyer could not continue in a case if the lawyer would be
required to cross-examine a former client on matters substantially related to
work the lawyer had done for the witness: United
States v. Moscony, 927 F.2d 742 (3d Cir. 1991); United States v. Esposito, 816
F.2d 674 (4th Cir. 1987); United States v. O'Malley, 786 F.2d 786 (7th
Cir. 1986); Kevlik v. Goldstein, 724 F.2d 844 (1st Cir. 1984); United
States v. James, 708 F.2d 40 (2d Cir. 1983); United States v. Shepard,
675 F.2d 977 (8th Cir. 1982); Buschmeier
v. G&G Investments, Inc., 2007 U.S. Dist. LEXIS 85444 (W.D. Pa. Nov. 19,
2007) (examination to discover assets assumed to be adversity, although no
finding of substantial relationship); Emmis
Operating Co. v. CBS Radio, Inc., 480 F. Supp. 2d 1111 (S.D. Ind. 2007)
; FMC Technologies, Inc. v. Edwards, 420 F. Supp. 2d 1153 (W.D. Wash. 2006); State Farm Mut. Auto. Ins. Co. v. Red Lion
Medical Center, Inc., 2003
U.S. Dist. LEXIS 6600 (E.D. Pa. March 27, 2003); Smith & Nephew, Inc. v. Ethicon, Inc.,
98 F. Supp. 2d 106 (D. Mass. 2000); Selby v. Revlon Commissary Sales, Inc., 6
F. Supp. 2d 577 (N.D. Tex. 1997); Pyle v. Meritor Savings Bank, 1994 U.S.
Dist. LEXIS 5408 (E.D. Pa. 1994); Bobkoski v. Bd. of Educ., 1991 U.S.
Dist. LEXIS 5020 (N.D. Ill. 1991); United States v. Cheshire, 707 F.
Supp. 235 (M.D. La. 1989); Cuento v. Le
Vien Homes, Inc., 2007 Cal. App. Unpub. LEXIS 7496 (Cal. App. September 17,
2007) (slightly "one-off"); State of Louisiana
v. Tensley, 955 So. 2d 227 (La. App.
April 4, 2007) (conviction reversed because lawyer for co-defendant cross
examined other co-defendant and former client in the same proceeding); State v. Needham, 688 A.2d 1135 (N.J. Super.
1996) (emphasizes appearance of impropriety test retained by New Jersey in its
version of the Model Rules); and Burgos v. Giannakakos, 1998 Conn. Super.
LEXIS 3328 (Conn. Super. 1998). But, see Holmes v. Adrian Art Deco
Rivera Hotels & Restaurants, Inc., 2000 U.S. Dist. LEXIS 7759 (S.D. Fla.
2000) (lawyer retained no confidential information from prior representation of
witness and, therefore, not disqualified).
Raiola v. Union
Bank of Switzerland, LLC, 230 F. Supp. 2d 355 (S.D.N.Y.
2002), involved a securities arbitration between a broker/dealer and a
customer and was brought to enforce the award. The customer complained
that the broker/dealer's law firm had cross-examined an individual broker, whom
the law firm had represented in the past. The court held first that the
customer had no standing. The court went on to say that, standing aside,
the customer did not make an adequate showing that the law firm had misused
information it had gathered in the earlier representation. In that
connection, the court noted that the only document used to cross-examine the
former client was a public document.
"Temporary
Substitute Counsel." In the following cases and opinions, the courts approved
bringing in special or substitute counsel to cross-examine the former clients: United
States v. Britton, 289 F.3d 976 (7th Cir. May 8,
2002); In re
Deposition Subpoena, 2006 U.S. Dist. LEXIS 90345 (N.D.N.Y. Dec. 13, 2006);
United States v. Canty, 2006 U.S. Dist. LEXIS 86422 (E.D. Mich. Nov.
30, 2006) (appeared to be the case; lawyer not disqualified because he
said he would not cross-examine former client); Sykes v. Matter, 316 F. Supp. 2d 630 (M.D. Tenn. 2004); Advanced
Manufacturing Technologies, Inc. v. Motorola, Inc., 2002
U.S. Dist. LEXIS 12055 (D. Ariz. July 3, 2002); United States v. Fawell, 2002 U.S. Dist. LEXIS 10415 (N.D. Ill. June 11,
2002); Swanson v. Wabash, Inc., 585 F.
Supp. 1094 (N.D. Ill. 1984); and Ill. Op. 05-01 (Jan. 2006).
Caution, however; the court in Cheshire, supra, rejected that approach,
as did Ariz. Op. 91-05 (1991).
"Accommodation
Client/Primary Client" Distinction. See the discussion of this
concept at "Former Clients." Click here,
and scroll down to "Accommodation Client." Reading that
discussion will assist the reader in understanding Skidmore v
Warburg Dillon Read LLC, 2001 U.S. Dist. LEXIS 6101
(S.D.N.Y. 2001). Facts: Matthews
hired Brickman to represent him in possible age discrimination claim.
Shortly thereafter, Matthews' co-worker, Skidmore, hired Brickman to represent
Skidmore in an age discrimination claim. Matthews has settled his claim,
so he has become a former client of Brickman. Matthews may be a witness in
the Skidmore case (this case), and Brickman may have to cross-examine
Matthews. Because of the possible cross-examination, Warburg moved to
disqualify Brickman. The court ruled that Warburg had standing to bring
the motion, but denied it. The court did not use the "accommodation
client/primary client" rubric, but applied the concept by citing Allegaert v. Perot, 565 F.2d 246
(2d Dir. 1977), the leading case on the subject. The court said:
. . . whether or not Matthews and Skidmore technically
consented to dual representation, the facts remain that: (1) Brickman
represented the two clients against the same defendant, (2) each client's
claims were ADEA claims arising out of contemporaneous terminations after the
same corporate merger, (3) each client worked in the same (relatively small)
department at [Warburg], and (4) each client was aware that the other was
being represented by the same counsel for a period of months (until Matthews
settled his case). It would be unreasonable for neither Matthews nor Skidmore
to assume that their shared counsel did not learn facts about the context of
the Warburg Dillon Read/Swiss Bank Corp. merger in one client's case that
would prove useful in the other case.
As to cross-examining
Matthews, the court said further:
If Matthews's trial testimony is consistent with his
deposition testimony, then it is indeed likely that Brickman would attempt to
impeach Matthews's credibility. This may be embarrassing to Matthews; it may
even be unseemly to treat a former client as a hostile witness. However, there
is no tangible prejudice that would result, and an "appearance of
impropriety is simply too slender a reed on which to rest a disqualification
order except in the rarest cases." Board of Education v. Nyquist, 590
F.2d 1241, 1247 (2d Cir. 1979). Thus, defendant's motion is denied on
these grounds as well.
"Choice of
Counsel" Prevails. In most of the cases cited above, the courts
pay lip service to the desirability of litigants having the counsel of their
choice. They then rule that the conflict of interest and/or Sixth
Amendment argument trumps the right to counsel of one's choice. One case
where the court found that the defendant's right to the counsel of his choice
should prevail is United States v. Cunningham, 672 F.2d 1064 (2d Cir.
1982). The court felt that the possibility of the conflict of interest
causing harm was relatively remote.
Chronology
Counts: Lawyer in Case First. L.A. County Op. 513 (7/18/05).
When may a lawyer try a case, in which a former client will testify as an
expert? The lawyer may do it if the
lawyer does not have any information about the former client that is relevant to
the case. If the lawyer does have
such information, the answer turns on chronology.
If the expert has been designated before the lawyer appears, he must turn
down the representation. If the
expert is designated after the lawyer appears, the opinion states the following:
[T]he attorney may ethically seek an appropriate order
from the court, which could include that the expert be precluded from
testifying if another expert is available to the opposing party; that the
former client’s decision to serve as an expert constitutes a waiver of the
privilege; or that the former client may not serve as an expert witness unless
the former client agrees to a limited waiver of any duty of confidentiality as
it pertains to the pending case.
In United States
v. Henke, 222 F.3d 633 (9th Cir. 2000), the issue was whether the lawyer
could cross examine the member. Pursuant to the joint defense
arrangement, the parties had exchanged confidences. Because the lawyer
could not cross examine the member, his client's conviction was reversed.
Medical Diagnostic Imaging, PLLC v. Carecore
Nat., LLC, 2008 U.S. Dist. LEXIS 23596 (S.D.N.Y. March 25, 2008).
Magistrate judge held that former counsel could cross examine former clients
where relationship between this case and former representation
insignificant.
Restatement.
See § 129, cmt. d, and Reporter's Note to cmt. d.
Other State Ethics Opinions.
Ala. Op. 90-25 (1990); Ariz. Op. 91-05 (1991); and Va. Op. 1407 (1991).
Treatise.
Hricik on Ethics, www.hricik.com.
Law Review.
Gary T. Lowenthal, Successive Representation by Criminal Lawyers, 93 Yale
L.J. 1 (1983).
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