Washington Lawyer

Legal Ethics: Opinion 292 Conflict of Interest: "Thrust Upon" Conflict

From Washington Lawyer, January 2004

(The January 2004 “Speaking of Ethics” column centered on Opinion 292. Opinion 292 addresses possible conflict of interests for clients with unforeseen conflicts. Among the issues addressed are “the onset of representation” and Rule 1.7(d)’s “ ‘thrust upon’ exception ”.)

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A law firm whose attorneys are subject to the Rules of the District of Columbia Bar and a current client of that firm (“Client A”) jointly have requested an opinion from this Committee as to whether the law firm may, consistent with DC Rule of Professional Conduct 1.7, continue to represent other clients of the firm whose interests have become adverse to Client A. …

In 1996, Client B retained the law firm to represent it on a regulatory issue involving access to certain facilities in its industry (“Competitive Access issue”)… In 1997, Client C retained the law firm to provide advice and legal services on another related but different access issue (“Direct Access issue”)…

… In 1998, Client A announced its intent to acquire a company that had been and continues to be adverse to Client B in the Competitive Access issue proceedings and to Client C in the Direct Access issue proceedings. Client A’s merger is still pending and is subject to various regulatory approvals, including FCC approval.

Upon learning of the merger, the law firm sought to obtain conflict of interest waivers so that it could continue to represent Clients B and C in matters involving Competitive Access and Direct Access issues… The law firm also sought a waiver to represent Clients B and C in the FCC proceeding reviewing Client A’s acquisition. Client B and Client C each agreed to provide the necessary conflict of interest waiver, but Client A refused to do so, consenting only to the law firm’s continuing general representation of Clients B and C on matters in which there was no direct adversity.

…(T)he law firm filed comments on behalf of Clients B and C in the FCC proceeding reviewing Client A’s acquisition. While neither Client B nor Client C opposed FCC approval of Client A’s merger, they both requested that the merger be conditioned in a manner that would effectively produce the relief they had been seeking in the various Competitive Access and Direct Access proceedings. Client A viewed these comments as adverse to its interests…

… The law firm asserts that its continued representation of Clients A, B and C is permissible under the “thrust upon” provision of Rule 1.7(d) because there is no substantial relationship between the ERISA litigation in which it represents Client A and the FCC proceedings regarding Client A’s acquisition in which it represents Clients B and C. …

This inquiry involves interpreting the scope of the “thrust upon” exception provided by DC Rule 1.7(d) to the general prohibition against simultaneously representing two clients whose interests are directly adverse…

…(A) conflict of interest under DC Rule 1.7(b)(1)…prohibits representation of a client with respect to a matter that:

[I]nvolves a specific party or parties, and the position to be taken by that client in that matter is adverse to a position taken or to be taken by another client in the same matter, even though that client is unrepresented or represented by a different law firm.

Rule 1.7(d) provides an exception to the general prohibition of Rule 1.7 by addressing the situation in which a law firm is already representing two clients in unrelated matters and some direct adversity between the clients develops or becomes apparent for the first time. Rule 1.7(d) provides:

If a conflict not reasonably foreseeable at the outset of a representation arises under paragraph (b)(1) after the representation commences, and is not waived under paragraph (c), a lawyer need not withdraw from any representation unless the conflict also arises under paragraphs (b)(2), (b)(3), or (b)(4).

…. There is no question that the law firm had been representing Clients B and C in the particular matter in which the conflict has arisen. The conflict was not reasonably foreseeable….

In such a situation, Rule 1.7(d) provides that a law firm need not withdraw from any representation unless the conflict also arises under Rules 1.7(b)(2), (b)(3), or (b)(4), which does not appear to be the case here. …

A more difficult issue is posed by the law firm’s representation of Clients B and C in the FCC proceeding reviewing Client A’s proposed merger. The law firm asserts that its ongoing representations of Client B and Client C in various proceedings relating to the Competitive Access and Direct Access issues constitute, for each client, a single and continuing representation …

Client A urges a narrower view of the phrase “outset of a representation” as used in Rule 1.7(d). It views the FCC merger proceeding as a new representation on which the law firm’s ability to represent Clients B and C was precluded by their adversity with Client A…
In determining the scope of Rule 1.7(d), the meaning of the phrase “outset of a representation” is critical…

… It is therefore necessary to consider how Rule 1.7(d) should be applied in the …situation …here, where there is an ongoing representation on a discrete legal issue with identifiable opposing parties that may be raised in multiple proceedings …

It is a reality of modern legal practice that the same issues involving the same parties, common facts, similar arguments and legal theories, opposition from the same interests, and seeking identical relief may be asserted (simultaneously or serially) in multiple proceedings…

…(T)he concept of “representation” contains enough flexibility to extend beyond a single discrete proceeding to multiple proceedings that raise a particular identifiable issue or issues and involve common facts, legal theories, claims, defenses and parties… For purposes of Rule 1.7(d), the “onset of representation” will be deemed to occur when the law firm first begins to provide legal services that involve the same facts, legal theories, claims, defenses and parties. If the conflict of interest was not reasonably foreseeable at that point, the law firm can continue its representation without client consent even if a conflict with another firm client is triggered by a subsequent legal proceeding.

Applying this analysis to the inquiry here, we find that the law firm’s representation of Clients B and C on Competitive Access and Direct Access issues encompasses all proceedings—existing and future—in which these issues are legitimately raised and in which the same parties, legal theories, claims and defenses are present. …
We caution that the underlying commonality of facts, issues and parties required to find a single “ representation” must be objectively verifiable. Efforts to abuse Rule 1.7(d) by artificially interjecting specious issues or claims into a proceeding in order to claim a preexisting representation will not be sufficient to overcome general client conflict principles contained in our Rules.

For the reasons discussed above, we believe that the “thrust upon” conflict provision of Rule 1.7(d) extends to the representation of a client with respect to an identifiable set of legal issues involving common facts, legal theories, claims, defenses and parties….

Inquiry No. 99-1-2
Adopted: June 15, 1999