New California Case on DQ Rejects Trimmed Back Representation As Cure for Current Client Conflict

A California Court of Appeal made new law by holding that a firm cannot resolve a current client conflict by limiting the problematic representation.  In so holding the court rejected two contrary secondary authorities: a New York City Bar Association ethics advisory opinion and a comment to section of 121 of the Restatement (Third) Law Governing Lawyers. 

It appears that the DQ'd lawyers represented two co-defendants who had brought their own equitable indemnity claims against Cal West Nurseries -- which was a client of the lawyers in an unrelated matter.  In an attempt to resolve the current client confict, the firm limited its representation of the co-defendants by declining to work on their equitable claims and just sticking to their straight defense.  But that wasn't enough to satisfy the duty of loyalty, said the court.

The facts are very particular, and probably won't be repeated very often, but the case raises the larger issue of when, if ever, is the straight defense of one defendant considered "adverse" to another defendant or potential defendant, or considered "materially limited" by the lawyer's relationship to another defendant or potential defendant. 

Comments

[Bill Freivogel]

Cal West is wrong. The law firm cured its conflict upon learning of it by partially withdrawing in the case in question. Conflicts law is bottomed on the duties of confidentiality and loyalty. Neither duty is implicated here.

Bill Freivogel, Aon Risk Services

[John Steele]

Bill:

Thanks for commenting. For readers who don't know Bill, he's one of our top legal ethicists. His website, "Freivogel on Conflicts," is linked in our right margin.