109 N.J.L.J. 449
May 27, 1982
Conflict of Interest
County Utilities Authority
Municipality-Member of Authority
Partners Separately Representing Both
We are asked whether one partner of a firm may represent a
county water and sewer authority while he or another partner
represents a municipality which is a member of that authority. In
the alternative we are asked whether such representation may
continue if the municipality appoints a third attorney, not
associated with these partners, to handle its affairs with the
county authority. Further, we are asked whether the above
representations may be proper where the municipality forms a
separate municipal authority to deal with the county and a third
attorney, not associated with these partners, is engaged to
represent that separate municipal authority.
In our Opinion 29, 87 N.J.L.J. 106 (1964), we held that it was improper for a municipal attorney to represent a county sewer authority in the formation of a service contract between them. In our Opinion 460, 106 N.J.L.J. 205 (1980)(petition for review denied by New Jersey Supreme Court December 18, 1980), we held that the disqualification of a firm from litigation and from negotiations between its clients, a county authority and a municipality, over their service contract did not remove the impropriety. In the same opinion we also held that the appointment of special counsel for the municipality for matters relating to the county authority would not "insulate the partners" against the appearance of a conflict of interest; that, on the contrary, the appointment of special counsel would erode public confidence.
We believe that the functions of counsel to a county authority necessarily involve inherent potential conflicts when an authority deals with its constituent municipalities. Even if a separate municipal authority were to be formed to deal with the county, of necessity counsel for the municipality would become concerned on behalf of his client in its dealings with the separate municipal authority. The public perception of an appearance of impropriety would not be removed. See In re Opinion 415, 81 N.J. 318 (1979). Hence and for the reasons stated, we do not approve the proposed representations.