December 10, 1968
Ethics Opinon 1968-3
SUBJECT: Conflict of Interest
A, B, C, D and E seek to reclaim certain rights from the United States Government. The rights sought by B, C, D and E, had been awarded to F through various agreements. G is F's successor in interest.
Attorney represents A, et al in negotiations and proceedings to reclaim these rights. While this matter is still pending, G retains Attorney to represent G in various matters which do not involve the pending rights matter. At the time of G's retaining Attorney, Attorney advises G of the pending matters.
C and D are now considering suit against G to enjoin G from the use of the rights and to recover damages.
Attorney asks four questions:
1. Can Attorney defend G in action by C and D?
2. If so, must Attorney sever his connection with C and D?
3. Would the answer to question 1 be different if Attorney were to sever his connection with C and D before any action by them were actually filed?
4. Since B and E have not yet considered suing G, but are in the same position as C and D, what is Attorney's position in regard to them?
The Committee does not render opinions upon events which have already taken place and, therefore, will express no opinion on the propriety of Attorney having accepted G's retainer during the pendency of the rights matter.
It is the opinion of the Committee that the answers to questions 1 and 3 are in the negative. Question 2 is moot by virtue of the negative answer to Question 1. As to question 4, Attorney is advised he is in the same position regarding B and E as he is to C and D.
It is the opinion of the Committee that Attorney should withdraw from representing B, C, D and E, in the matter of the questioned rights and that Attorney should not accept employment to represent G in that same matter, for the reason that Attorney has represented both parties to an extent which would make possible the disclosure or abuse of professional confidences, either voluntarily or inadvertently.
STATUTES AND CANONS
Canon 6, Canons of Professional Ethics provides that:
"It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose."
(See also California Rules of Professional Conduct, Rule 7).
Canon 37 provides that:
"It is the duty of a lawyer to preserve his client's confidences. This duty outlasts the lawyer's employment, and extends as well to his employees; and neither of them should accept employment which involves or may involve the disclosure or use of these confidences, either for the private advantage of the lawyer or his employees or to the disadvantage of the client, without his knowledge and consent, and even though there are other available sources of such information. A lawyer should not continue employment when he discovers that this obligation prevents the performance of his full duty to his former or to his new client."
(See also California Rules of Professional Conduct, Rule 5 and Rule 6.)
Canon 6 further provides:
"The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed."
(See also California Rules of Professional Conduct, Rule 5.)
Whenever an attorney does represent conflicting interests, even with consent of all parties, he is then placed in a position of validly being subject to the charge of betraying professional confidences and of favoring one party over the other. Such charges do not uphold the honor and dignity of the profession in accordance with Canon 29, Canons of Professional Ethics, even if the charges are unfounded.
The purpose of the above rules lies in the reasoning that it is essential to the administration of justice that there should be perfect freedom of consultation by the client with his attorney without any apprehension of a compelled disclosure by the attorney to the detriment of the client. A.B.A. Formal Opinion No. 91. This is generally more of a legal than an ethical consideration. A.B.A. Formal Opinion No. 247. Ethics, however, extend beyond the compulsive use of confidential information and include the voluntary or even the inadvertent use of that information.
As a practical matter,
"The test of inconsistency is not whether the attorney has ever appeared for the party against whom he now proposes to appear, but it is whether his accepting the new retainer will require him, in forwarding the interests of his new client, to do anything which will injuriously affect his former client in any matter in which he formerly represented him, and also whether he will be called upon in his new relation to use against his former client any knowledge or information acquired through their former connection." In Re Boone, 83 F. 944, 952-953; Drinker, page 105; Galbraith v. State Bar, 218 C. 329; Wutchumna Water Co. v. Bailey, 216 C. 564; 2 R.C.L. 974, § 52.
The concept of conflict of interest is two pronged. It involves both the duty not to represent conflicting interests and the duty not to disclose or abuse professional confidences.
It is incumbent upon an attorney not only to avoid a present conflict of interest but also to guard against the possibility that one will develop. Drinker, page 104.
The facts stated indicate that it is the duty of Attorney to contend for B, C, D, and E, that which his duty to G requires him to oppose. If confidential information is known to the attorney there is the possibility that it will be either voluntarily or inadvertently used against the client.
This privilege belongs to the client, it is he who must decide if it is confidential, and it is he who must consent to its use.
The duty not to represent conflicting interests or to betray the confidences of a former client is not abrogated by a release signed by the former client. Drinker, page 112. Canon 6 does not sanction representation of conflicting interests in every case where there is consent by the parties involved. It merely forbids such representation except in such cases.
Nothing in the facts supplied indicates that B, C, D and E consented to Attorney representing G.
When the interests of the clients diverge and become antagonistic their lawyers must be absolutely impartial between them, which, unless they both desire him to represent them both, usually means that he may represent none of them. Drinker, page 112.
This opinion is advisory only. It is not binding upon the State Bar, the Board of Governors, its agents or employees.
EDITOR'S NOTE: A.B.A. Canons refer to the old series; this subject is now covered by Canon 5 of the Code of Professional Responsibility and the Disciplinary Rules thereunder. Effective 1/1/75, California Rule is now 4-101 and Rules 6 and 7 are 5-102; the California Rules now require that the client's consent be in writing.
Disclaimer: This opinion was issued by the Legal Ethics Committee of the San Diego County Bar Association. It is advisory only and is not binding upon any member of the SDCBA, any other member of the State Bar of California, the State Bar of California or its Board of Governors, or any persons or tribunals charged with regulatory responsibilities. The SDCBA, its officers, directors, agents, and the Legal Ethics Committee members assume no responsibility or liability in rendering this opinion.