Consulting With Defense Counsel Stops Firm From Appearing as Plaintiff’s Counsel in Case

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By Samson Habte  

An out-of-state law firm that specializes in food poisoning cases nationwide was properly denied admission pro hac vice as co-counsel for the plaintiff in a Colorado lawsuit in which defense counsel once consulted with a lawyer in the firm about the defendant restaurant's possible trial strategy, a divided Colorado Supreme Court decided Feb. 4 (Liebnow v. Boston Enterprises Inc., Colo., No. 12SA83, 2/4/13).

A trial judge found that the Seattle firm cannot come into the case on behalf of the plaintiff because months earlier an associate in the firm fielded a call from the restaurant's attorney, with whom he was cordial, and informally discussed her trial strategy.

That consultation “created a nonwaivable conflict of interest” that is imputed to the entire Seattle firm, the trial court ruled.

Writing for the supreme court, Chief Justice Michael L. Bender declined to overrule that conclusion.

Bender stressed that a lawyer's “mental impressions and thought processes” about a case can be considered confidential information. Accordingly, another lawyer who receives such information may be precluded from representing the other side in the same matter, Bender said.


“ABA Opinion 98-411 cautions that consultations between lawyers may trigger a conflict of interest that could restrict the consulted lawyer's ability to represent a … future client under Rule 1.7.”
Colorado Supreme Court

The court rejected the plaintiff's contention that no conflict of interest could have arisen under Colorado Rule of Professional Conduct 1.7 where there was never an attorney-client relationship between the Seattle firm and defense counsel.

A concurrent conflict exists if there is a significant risk that a lawyer's responsibilities to a “third person” could compromise his representation of a client, Bender observed. The Seattle firm's obligation not to disclose what defense counsel told the associate could hamper its ability to advocate effectively for the plaintiff, he said.

This very scenario of conflicts arising out of lawyer-to-lawyer consultation was pointed out in ABA Formal Ethics Op. 98-411 (1998), the court observed.

Justice Allison H. Eid, in a dissent joined by Justice Gregory J. Hobbs Jr., said the majority failed to adequately weigh “the importance of preserving plaintiff's choice of counsel” and based its finding of prejudice on “speculation and conjecture.”

The ruling also has “far broader significance,” Eid added, because it “chills casual consultations among attorneys that are so vital to the profession.”

A Friend in Need

According to the opinion, the restaurant's attorney had previously opposed Drew Falkenstein, an associate with the Seattle firm Marler Clark, in other cases but maintained a “cordial relationship” with him and called him for advice after the case was filed against her client.

Falkenstein obliged after determining that his law firm was not involved in the litigation, the court said. The two lawyers discussed three aspects of the case in a phone conversation and subsequent emails, Bender stated:  

First, they talked about defense counsel's planned theory of the case, which at that time was that the child's illness had resulted from visiting a petting zoo rather than from eating salad at the restaurant. Falkenstein advised defense counsel against that theory. Second, defense counsel asked Falkenstein for advice on a trial expert, and Falkenstein recommended an expert.…Third, Falkenstein recommended adding a lettuce distributor as a nonparty defendant after researching E. coli outbreaks for defense counsel using his law firm's publicly accessible database and finding an E. coli outbreak at another local restaurant chain.  

 

 

The defense attorney took Falkenstein's advice and dropped her petting zoo strategy, hired his recommended expert, and added other lettuce distributors and growers as nonparty defendants, although not the ones Falkenstein suggested.

Several months later, the plaintiff called another attorney at Marler Clark to discuss the case. The firm agreed to serve as co-counsel for the plaintiff. The defendant objected on grounds that Falkenstein obtained confidential information from defense counsel that prohibited his participation and that his conflict must be imputed to Marler Clark as a whole.

The trial court agreed. It ruled that the information defense counsel conveyed to Falkenstein was confidential, that the conflict this created for him was nonwaivable under Rule 1.7, and that it was imputable to his entire firm under Rule 1.10.

High Bar

In upholding the trial court's ruling, Bender stressed that a judge has “broad discretion to disqualify” counsel and that this authority derives from the trial court's “inherent power to ensure the integrity of the process and fairness to the parties.” In this case denial of admission pro hac vice is equivalent to disqualification of a firm from serving as counsel, Bender said.

There was nothing “manifestly unreasonable, arbitrary, or unfair” about the trial court's rulings, Bender said, as they did not exceed the “bounds of rationally available choices.”

The court rejected the plaintiff's argument that the consultation between defense counsel and Falkenstein created no conflict under Rule 1.7(a)(2).

“When a lawyer learns confidential information from another, the lawyer's knowledge of the information creates a significant risk of materially limiting the lawyer's representation of his own present or future client,” Bender observed.

Falkenstein's conversations with defense counsel created that risk, he explained, because he was privy to her “mental impressions and thought processes,” which are considered confidential information.

The majority rejected the plaintiff's secondary argument that the information defense counsel relayed to Falkenstein was “wholly technical” and “routinely discoverable,” and thus not classifiable as confidential. The plaintiff contended that defense counsel's theory of the case “would have been disclosed during discovery,” according to the opinion, and that “any research leading to the identities of potential nonparty defendants was a technical matter that anyone could have located” using Marler's publicly accessible database.

The trial court disagreed with those arguments, Bender said, finding that defense counsel “confided in Falkenstein in a way that gave him insight into the way she approached this case.”

The majority also concluded that the trial court did not err in finding that the consultation put Falkenstein in a position that could compromise his representation of the plaintiff. His loyalties would be “divided,” the court found, because he had an obligation to keep the information he learned about the defendant confidential that competed with his duty to represent the interests of his client by using those insights in pressing the plaintiff's case.

Finally, the court upheld the ruling that Falkenstein's conflict was nonwaivable and imputable to his entire firm.

“The law firm has a single office, specializes in one practice area, and has a small membership,” Bender noted, and it was thus “within the 'bounds of rationally available choices' and within the trial court's inherent power” to find that even if the plaintiff agreed to waive the conflict the integrity and fairness of the proceedings called for imputation and disqualification.

“In addition, we note there is no indication in the record that defense counsel contacted Falkenstein as a trial tactic in an effort purposely to disqualify the out-of-state law firm,” the court stated.

Severe Remedy

The dissent said that the majority's ruling “mistakenly deprives the plaintiff, a child who became seriously ill allegedly after eating a salad at the defendant's restaurant, of her counsel of choice--one of the most prominent food-borne-illness law firms in the country.”

Citing In re Estate of Myers, 130 P.3d 1023, 22 Law. Man. Prof. Conduct 131 (Colo. 2006), Eid said the majority failed to apply the “proper analytical framework,” which is that “a plaintiff's counsel of choice cannot be set aside unless it is shown that there is 'a clear danger that prejudice to a client or adversary would result from continued representation.'”

Here, the showing of prejudice was based on “speculation and conjecture,” Eid argued.

The plaintiff was represented by Robert K. Reimann of James E. Freemeyer PC, Denver.

Karen R. Wasson of Hunter & Associates, Denver, represented the restaurant owner.

Amicus briefs were filed on behalf of the Colorado Bar Association and the Colorado Defense Lawyers Association.


Full text of the opinion at http://op.bna.com/mopc.nsf/r?Open=kswn-94lq8u.

Full text of the Colorado bar's amicus brief at http://op.bna.com/mopc.nsf/r?Open=kswn-94qnft.

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