ethics

Conflict of Interest Unrelated Matter Current Clients

On February 8, 2019, the Board of Professional Conduct of the Supreme Court of Ohio issued Board Op. 2019-1, opining that it is a violation of Ohio’s Rules of Professional Conduct for an attorney to represent an adverse party to a current client in an unrelated matter without his current client’s informed consent.  Moreover, the attorney may not withdraw representation from the current client to be able to undertake representation of the party adverse to the current client even where the matters are unrelated.  Additionally, a lawyer may not represent an adverse party of a former client in a new matter without the former client’s informed consent.

The matter about which the Board opined involved an attorney representing employees in Worker’s Compensation cases.  Employers then approached the attorney wanting to hire him to represent the companies.  Some of the lawyer’s current and former clients are employees of the employers.

The Board noted that Prof.Cond.R. 1.7(a)(1)-(2) prohibits a lawyer from representing a client that has a direct adverse interest to another current client.  The Board stated that principles of loyalty and independent judgment are fundamental to the lawyer-client relationship.  Accordingly, neither another client’s interests nor the attorney’s own interests can interfere with that loyalty.

According to the opinion, where one client asserts a claim against another in litigation, their interests are directly adverse.  Further, a lawyer may not represent a party in one proceeding against a client the lawyer represents in another proceeding, even where the matters are wholly unrelated.

The Board explained that where a lawyer considers representing a potentially more lucrative or long-term client, the lawyer’s own personal interest in that relationship would impact the lawyer’s ability to carry out duties owed to the current client.  As an example, the opinion asserts the attorney may be hampered in conducting a competent and thorough cross-examination of the employer’s representative due to the desire to maintain the more lucrative employer as a client.  The potential for compromise is present and prohibits such representation.  This presents a material limitation conflict of interest.

The opinion acknowledges that material limitation conflicts are not per se violative of the Ohio Rules of Professional Conduct.  The lawyer, however, must obtain informed consent from each of the affected clients to do so.  Informed consent requires that the clients be “informed of the material risks and reasonably available alternatives to the proposed course of conduct.”  Prof.Cond.R. 1.0(f).  The waiver must also be confirmed in writing.  The best way to do this is through the client’s signature on a waiver of conflict of interest.

Should a client decline to sign such a waiver or decline to give informed consent, the attorney may not withdraw representation of the current client to undertake representation of the prospective client.  The lawyer is obligated to carry a client’s matter to conclusion.  The Board recognized that Prof.Cond. R. 1.16 may permit an attorney to do just this.  However, citing the “hot potato” doctrine, the Board concluded that courts historically have declined to allow attorneys to withdraw from a less favorable representation to proceed with a more lucrative engagement.  Accordingly, the Board adopted the concept that withdrawing representation of one client to undertake representation of another is ethically inappropriate.

Regarding former clients, the Board recognized that Prof.Cond.R. 1.9 prohibits an attorney from representing a client against a former client in a substantially related matter without the former client’s informed consent.  Applying that rule to Worker’s Compensation cases, the Board explained that an attorney taking on representation of the employer whose former clients may still be employed there may face a situation where the former client has a new Worker’s Compensation claim.  The new Worker’s Compensation claim would be the same or substantially related to the attorney’s representation of the former client.  The possibility exists that confidential information may be used against the former client.  The client, therefore, must give informed consent of the representation confirmed in writing.

Where the former client is no longer an employee, there is no substantial relationship unless a new Worker’s Compensation matter would somehow relate to the former employee’s previous claim.  According to the Board, this type of relationship does not require the former client’s informed consent.

ethics

Conflicts of Interest In Municipal Representation and Criminal Defense

Board Advisory Opinion 2019-3 advises that lawyers may not represent municipalities in real estate matters where another lawyer in the law firm represents criminal defendants being prosecuted in Municipal Court for that municipality.  Likewise, it is a conflict of interest for a lawyer to engage in such a representation where another attorney in the firm represents criminal defendants investigated by police officers in that municipality.

Such representations would violate Prof.Cond.R. 1.7 prohibiting conflicts of interest and Prof.Cond.R. 1.10 on imputation of conflicts of interest to other attorneys in the firm.

A conflict of interest occurs where an attorney represents a client directly adverse to another current client or if an attorney’s ability to consider, recommend, or carry out an appropriate course of action for that client will be materially limited by the lawyer’s responsibilities to another client, a former client, a third person, or by the lawyer’s own personal interest. Prof.Cond.R. 1.7(a)(1)-(2).  The fundamentality of a lawyer’s fundamental duty of loyalty and independent judgment is not permitted to be diluted by a duty the lawyer may owe to another client.  Likewise, imputing the conflict to other attorneys in the firm gives effect to these fundamental duties.

A lawyer is not permitted to advocate on behalf of one client in litigation against a current client, even if the matters are unrelated.  Likewise, a conflict exists where a lawyer must cross-examine another firm client who appears as a witness in litigation.  Additionally, an attorney is prohibited from representing a client where a conflict of interest involves a substantial risk that the lawyer or law firm’s ability to consider, recommend, or carry out an appropriate course of action for a client will be materially limited by the lawyer or law firm’s responsibilities to another client or by the lawyer or law firm’s own personal interest. A municipality has an interest in prosecuting their local ordinances and supporting their employees, such as police officers.  Conversely, criminal defendants have an interest in ensuring the preservation of their constitutional rights and avoiding criminal conviction.  Arguments that an ordinance is unconstitutional or that police were not properly trained or that they systematically failed to follow the law or proper procedures would be directly adverse to the municipality’s interests.

Additionally, a concern exists that a lawyer representing both a municipality and a criminal defendant may conduct a deferential rather than a thorough examination of a municipal employee in criminal defense litigation. On the other hand, the law firm’s financial interest in maintaining the municipality as a client could have an adverse effect on the defense of the criminal defendant client.  Moreover, a municipal client cannot waive the conflict as it acts on behalf of the public, which cannot consent to such a conflict. ABA Formal Op. 16 (1929); ABA Formal Opinion 34 (1931); ABA Formal Opinion 77 (1932).  Indeed, the lawyer’s client is deemed to be the citizens of the municipality. Thus, Ohio joins West Virginia and New Jersey in adhering to a “per se” government non-consent rule. Bennett, Cohen & Gunnarsson, Annotated Model Rules of Professional Conduct, 153 (8th ed. 2015).

The opinion warns that a request that a Municipality waive such a conflict of interest may result in a judicial determination that the Municipality cannot consent.  Therefore, the Board declined to advise that lawyers in such circumstances request the informed consent of the municipality to the conflict.

ethics

STUPID TEXTING OR 13TH AMENDMENT VIOLATION? Maybe Both!

In a stunning move, the New Jersey Supreme Court censured an attorney for texting his client about nonpayment of his legal fee.  The attorney, a criminal defense attorney, texted his client that he would not prepare for trial if the legal fees were not paid.  The criminal defendant was charged with sexual assaults of four minors and faced 200 years in prison.  The lawyer had twice requested the trial judge to allow him to withdraw from the case due to his client’s inability to pay.  The lawyer also thought the client was unreasonable in refusing a favorable plea offer from the prosecutor.  The lawyer texted:  “HAVE FUN IN PRISON.”  When the client showed the text to the Judge, the Judge allowed the attorney to withdraw and appointed another attorney for the criminal defendant.

The attorney was charged with engaging in a conflict of interest and conduct prejudicial to the administration of justice.  The conflict of interest occurred because the lawyer placed his own economic interests in getting paid above that of his client in receiving a defense to the charges against him.

This presents a real dilemma for criminal defense counsel.  Often, after taking a case, the client becomes unreasonable and cannot or will not pay the attorney’s legal fees.  In such cases, the attorney has little choice but to request to withdraw from the cases.  The ruling gives no reason as to the Judge’s refusal twice to allow the attorney to withdraw as counsel.

Indeed, in Ohio Rule 1.16, a proper reason for terminating representation is in instances where the client fails to fulfill a financial obligation regarding the attorney’s services.  To required the attorney to remain on the case without getting paid is tantamount to involuntary servitude, a requirement abolished by the 13th Amendment to the U.S. Constitution in 1864.  This is the same reason raised for the not requiring attorneys to provide pro bono services. Pro bono work is strictly voluntary.

Certainly, the attorney’s text was imprudent, brash, inadvisable and, perhaps even rude.  Indeed, such conduct could, arguably, be prejudicial to the administration of justice where, as here, the trial was postponed as a result.  And, of course, it is arguably a violation of the administration of justice for an attorney to fail to prepare for trial.  Troubling, however, is the ruling that a conflict exists where the attorney insists on payment prior to preparing for trial.   Even more troubling is allowing a judge to refuse to release an attorney from representation under such circumstances.  The concern is that criminal defendants everywhere will now refuse plea bargains (not that I am a big fan of many of those either) and refuse to pay counsel relying on their ability to exact sanction against the attorney’s license should the attorney refuse to give services for free. Censure is akin to Ohio’s version of a public reprimand.

The moral of the story from that attorney perspective is not to put such language in texts.  Things in cyberspace stay forever!  But I ask you which is worse:  an attorney who so advises his client and then is released from representation or an attorney who keeps it under his hat, fails to prepare for trial, and renders insufficient services.

ethics

Pill Mill Defense Attorney’s Conflict Is Not Waivable

On March 1, 2018, attorney Wesley Page of Flaherty, Sensabaugh Bonasso, PLLC (“Flaherty”) agreed to defend William Earley, D.O. on indictments of violations of the Controlled Substances Act as employees and/or operators of the HOPE Clinic in West Virginia.  Dr. Early and 12 other physicians were indicted for seeing patients on a cash-only basis and prescribing oxycodone and other prescription pain medications while refusing to accept insurance.

On May 31, 2018, attorney Salem Smith of Flaherty, Sensabaugh Bonasso, PLLC was retained to represent Dr. Chad Turner in a potential medical malpractice suit contemplated to be filed against him by the estate of a former Hope Clinic patient.  As a former Hope Clinic physician, Dr. Turner was scheduled to testify against Dr. Early in the criminal proceeding.  According to the U.S. Attorney, Dr. Turner’s testimony was expected to directly inculpate Dr. Early.

When the U.S. Attorney brought this conflict to both Messrs. Page’s and Smith’s attention, they both said they performed the requisite conflicts checks and did not believe that a conflict existed.  They indicated that Dr. Turner signed a conflict waiver and Mr. Early waived the conflict orally.

Believing there was a conflict that could affect the integrity of the prosecution, the U.S. Attorney filed a Notice with the U.S. District Court for the Southern District of West Virginia, Beckley Division.  At hearings on the issue, the U.S. Attorney said the Flaherty firm’s dual representation created an impermissible conflict under Rule 1.7 of the West Virginia Rules of Professional Conduct.  Comment [6] prohibits an attorney from cross-examining a current client who appears as a witness in a lawsuit where the testimony is damaging to another current client.  Counsel for Flaherty countered that Flaherty’s representation of Dr. Turner ended by June 28, with no lawsuit being filed against him.  The criminal trial against Dr. Early was scheduled for August.

Because Dr. Turner is a former client, Flaherty’s counsel analyzed the conflict under Rule 1.9, which permits the cross-examination of a former client.  The U.S. Attorney countered that the conflict is analyzed at the time the conflict arises, not at the time a motion to disqualify is filed.  The U.S. Attorney indicated that Flaherty has the burden to show that the physicians waived the conflict with informed consent so as to defeat a motion to disqualify.  Flaherty countered that, as the filer of the motion, the U.S. Attorney has the burden to prove disqualification should occur.  Moreover, civil cases on disqualification cannot stand in a criminal case where a defendant has a 6th Amendment right to counsel of his choice.

The Court ruled that when the Flaherty firm began representing Dr. Turner on May 31, 2018, the firm had a conflict with its current client.  Flaherty knew as early as March 2018 that Dr. Turner was to be a witness on behalf of the United States and would give adverse testimony against Dr. Early.  The Court ruled that Rule 1.9 was inapplicable.  Rule 1.7 required not only that Dr. Turner give informed consent in writing, but that Dr. Early, who was a Flaherty client first, also give informed consent in writing.  There was no evidence that this had occurred.

There was a significant risk, the Court ruled, that Dr. Early’s representation would be materially limited by the lawyer’s responsibility to another current client. Because Mr. Page would have to cross-examine Dr. Turner, which would require Mr. Page to attempt to impeach Dr. Turner’s credibility at trial to protect Dr. Early’s position, the conflict was not waivable.

The Court ruled that the presumption of prejudice to the client had not been overcome.  It noted the Court had the duty to ensure that criminal trials are conducted within the ethical standards of the profession.  And the United States had the duty to ensure the integrity of the prosecution.  Since neither of those could occur if Flaherty remained as counsel, it disqualified the firm from further representing Dr. Early.