January 01, 2014

Conflicts: “That Name Is Awfully Familiar”

William Freivogel

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At some point in an intellectual property (IP) lawsuit, you recognize the name of an individual—we’ll call him Josh—who may be a witness for the other side. Josh is either a current client or former client of your firm, on real estate matters. You may have to take Josh’s deposition or cross-examine Josh at the trial.

Problem? Very possibly. A body of law has developed as to the conflict-of-interest implications if Josh is a current client. The rules are permissive if he is no longer a client, but your obligations do not cease entirely. And caution should govern your planning for any deposition of or other discovery from Josh.

ABA Model Rule 1.7(a)(1) provides that a law firm may not enter into a representation that is directly adverse to a current client even if the adversity has nothing to do with the law firm’s representation of the client. This is the rule everywhere except in Texas state courts (don’t ask). Thus, your firm may not be adverse to Josh in the IP case even though the firm’s real estate work for Josh is completely unrelated. Comment [6] to Rule 1.7 says that a damaging cross-examination of a current client may be a violation of the rule. A majority of case decisions, and ABA Formal Opinion 92-367 (1992), support the conclusion. Impeachment of Josh—or even eliciting embarrassing information about him—could spell trouble.

Josh is fairer game if he is a former client, with a large caveat. Under Model Rule 1.9(a), a law firm may be adverse to a former client if the new matter is not substantially related to the former representation. In United States v. Moscony, 927 F.2d 742, 749 (3d Cir. 1991), which reflects the majority rule, the court held that a lawyer could not cross-examine a former client in a matter related to the lawyer’s earlier representation. So if Josh is no longer a real estate client of the firm, you could most likely cross-examine him in the IP case—assuming that you will not be using information about Josh, or from Josh, that your firm learned during the real estate work.

Los Angeles County Bar Ethics Opinion 513 (2005) provides practical guidance, at least if your former client turns up as the other side’s expert. If the lawyer knows before entering the case that the former client is going to be the opposing expert, his or her obligation is to turn down the engagement. What if the witness is not identified until after the lawyer enters the case? The opinion suggests that it would be ethical for the lawyer to seek court guidance to the effect that the expert be required to waive any privilege as to the earlier representation or that the witness be barred from testifying.

Another practical option, approved by the majority of courts to confront it, is to bring in another firm to handle the cross-examination. See, e.g., Iowa v. Smith, 761 N.W.2d 63, 74–75 (Iowa 2009) (as to current client); United States v. Britton, 289 F.3d 976, 983 (7th Cir. 2002) (as to former client). For contrary authority, see McGriff v. Christie, No. 11-12247, 2012 U.S. App. LEXIS 10830, at *16 (11th Cir. May 30, 2012). But you should make that decision before taking the first steps in discovery. The authorities are clear that seeking discovery from a current client that would harm or embarrass that client also violates the rules. ABA Formal Opinion 92-367 (1992) so holds. See, e.g., Municipal Revenue Servs., Inc. v. Xspand, Inc., 537 F. Supp. 2d 740, 748 (M.D. Pa. 2008).

Given the variety of ways names come up in litigation, comprehensive conflict checks seem impractical. At the very least, alert your litigators to watch out for the Joshes out there.

William Freivogel

The author is a Chicago-based consultant to lawyers on legal ethics matters.