former client conflict

Do you toil in the pressure cooker of a firm, but dream of going in-house? Many lawyers have that goal.  But the churn works in the other direction, too, with in-house lawyers migrating to firms or solo practice.  When they do, they can face conflict of interest issues leading to disqualification, as a former in-house lawyer for Rolls-Royce discovered earlier this year.

A luxury ride

Donald Little was in-house counsel for Rolls-Royce for more than 10 years.  A couple years after he left, he represented Rolls-Royce as outside counsel in a suit by Davis S.R. Aviation, defending against allegations that Rolls-Royce made false statements about airplane engine parts in order to prevent Davis from selling engines on the open market. That case settled.

Then, in 2016, a different plaintiff filed suit against Rolls-Royce under the False Claims Act, but based on the same constellation of facts as Davis, centering on the alleged use of defective parts in a U.S. Air Force aircraft.  The qui tam plaintiff alleged that Rolls-Royce improperly used the parts, resulting in a crash, and that it submitted false documents and invoices for payment to the air force.

Little became one of the lawyers for the qui tam plaintiff in the False Claims Act case.

Rolls-Royce moved to disqualify Little, as well as to dismiss the case. The magistrate judge recommended disqualification and dismissal, and the U.S. district court for the Western District of Texas overruled the plaintiff’s objections and accepted the recommendation.

The rubber meets the road

In its opinion, the district court noted that the magistrate judge had “expressed disbelief at Little’s insistence that he should not be disqualified” in light of his prior work for Rolls-Royce, in a matter substantially related to the qui tam suit.

The Texas version of Model Rule 1.9 (Duties to Former Clients) is codified in Rule 1.09(a) of the Texas Disciplinary Rules of Professional Conduct.  Like the Model Rule, the Texas version bars representation adverse to a former client in the same or a substantially related matter, except with the former client’s consent.

In the view of the magistrate judge and the district court, this was a no-brainer: it was “a clear violation” of the conflict rules for Little to represent the plaintiff adverse to Rolls-Royce in the qui tam action, because it was substantially related to his prior work in-house for Rolls-Royce, and to the Davis case, in which Little had represented Rolls-Royce as outside counsel.

In-house counsel take heed

Migrating from a berth as in-house counsel to being outside counsel raises former-client conflict issues that you – and your new employer – must be aware of.  As the Association of Corporate Counsel has pointed out, all the ethics rules apply with equal force to in-house counsel.  Even lateral moves, from a company law department to the same post with a competitor can raise some thorny former-client conflict issues.  See Dynamic 3D Geosolutions LLC v. Schlumberger Ltd. (Schlumberger N.V.), 837 F.3d 1280 (Fed. Cir. 2016) (affirming disqualification of plaintiff’s in-house counsel and outside counsel in patent infringement case; plaintiff’s in-house counsel was defendant’s previous deputy GC).  Be aware, and you can avoid the risk of disqualification.

* Joy A. Wilson is a rising second-year law student at the University of Illinois College of Law where she is a finalist on the university negotiations team and client counseling team and an event coordinator for the Black Law Student Association and Sports and Entertainment Law Society.

Representing a campus sexual assault victim-turned-activist and later using her confidential information in representing an alleged campus assailant with interests adverse to the former client is a “textbook” conflict of interest.  That’s the message the Pennsylvania Supreme Court sent in suspending a lawyer for a year in a consent-to-discipline case published this week.

Former -client conflict

Most lawyers know that it’s a conflict of interest to take on a new representation adverse to a former client they’ve represented previously in a substantially related matter — at least without consent from both the new client and the former client.  Model Rule 1.9, “Duties to Former Clients,” codifies the rule.

In litigation, engaging in this kind of former-client conflict of interest will likely get you disqualified.  But as this case illustrates, disciplinary action is also possible.

The complainant in the disciplinary case, Hope Brinn, was a former Swarthmore College student who alleged that she had been sexually assaulted on campus, and who subsequently became a victims’ rights advocate, including for other students allegedly assaulted at the college.

Swarthmore activism 

Following her assault, the lawyer reached out to Brinn via Facebook, suggesting that she hire him.  She responded “I hire you!”  During their many communications by e-mail, Facebook, phone and in person, the lawyer said he intended to support Brinn in litigation, campus adjudication against her assailant, and in her national activism.  He also assured her that anything she shared with him was confidential.

He assisted Brinn in preparing a class complaint, which she and another activist filed in 2013 with the Department of Education’s Office for Civil Rights on behalf of 12 other Swarthmore students, raising concerns about how the college handled sexual assault complaints.  One of several alleged campus assailants was identified as “Juan Doe” in the  complaint.

A month after the OCR class complaint was filed, Brinn terminated the lawyer’s representation.  Almost two years later, the lawyer represented the same Juan Doe in filing suit against Swarthmore.

“The Angry Feminist Cabal”

The lawyer’s 135-page complaint in federal district court on Juan Doe’s behalf alleged that Swarthmore discriminated against him by giving credence to false allegations against him of sexual assault asserted by “Jane Doe,” and making him the unfair target of “vigilante justice from student activists.”  The complaint, filed under seal, referred to Brinn at least 55 times by a pseudonym, “Student  Activist No. 1.”

The complaint had a long section titled “The Angry Feminist Cabal within Swarthmore’s OCR … Complaints Trigger Jane Doe’s Complaint Against Juan,” in which the lawyer alleged on behalf of Juan Doe that Brinn had encouraged Jane Doe to manufacture a sham complaint of sexual assault against Juan Doe.  The complaint also alleged that Brinn and others became radicalized, and made false accusations in their attempt to make Swarthmore “a safe place for women.”

The complaint contained confidential information that Brinn had provided to the lawyer during the former representation.

DQ granted … and then suspension

The district court judge granted Swarthmore’s motion to disqualify the lawyer from representing Juan Doe, based on violations of Rule 1.6 (“Confidentiality”) and Rule 1.9, arising from his former representation of Brinn.  The court found a “clear and complete disregard” by the lawyer of the rule against unconsented-to former-client conflicts and his duties of confidentiality.

Likewise, the disciplinary board found in adopting the consent-to-discipline petition that the lawyer engaged in “a textbook conflict of interest by representing Juan Doe in a matter substantially related to [the lawyer’s] representation of Ms. Brinn in which Juan Doe’s interests were materially adverse to the interests of Ms. Brinn.”  In addition, the board found, the lawyer lied to disciplinary authorities during their investigation, claiming that the judge in the Juan Doe case had denied the disqualification motion.

In addition to the conflict raised by representing Juan Doe, the petition detailed the lawyer’s misconduct in two other cases as well, involving claims against his mother’s employer.

Take-home lessons

Be alert for former-client conflicts, of course (including ones like this, which would seem clear-cut), and be aware that disqualification is not the only potential adverse outcome.  And, of course, if you find yourself in a disciplinary investigation, never misrepresent anything; that can never help you.