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113 N.J.L.J. 365
April 5, 1984
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
Appointed by the New Jersey Supreme Court
Participation in Asbestos
Litigation by Associate Attorneys
and its Relation to Employment
This inquiry originates from two recently admitted attorneys
who were formerly employed by a law firm specializing in the
defense of toxic-asbestos litigation. Each is presently associated
with other law firms which do not participate in asbestos
litigation. They assert that they found it impossible to obtain
employment with any firm engaged in toxic-asbestos litigation after
they left their former employment because of the ethical
proscriptions against conflicts of interest.
In Reardon v. Marlayne, Inc., 83 N.J. 460 (1980), the Supreme
Court of New Jersey held that plaintiffs' attorney, and his firm,
were compelled to withdraw from representing plaintiffs in a
products liability suit against an automobile manufacturer because
the attorney, while previously employed by a defense firm,
represented the same manufacturer. Even though plaintiffs' lawsuit
was not instituted until two years after the attorney had left the
defense firm, and was "new litigation", the Court held that the
subsequent representation was barred as a conflict of interest. Id.
That Court adopted the "substantial relationship" test
articulated as follows:
In general, a substantial relationship between matters
will exist where the 'adversity between the interests of
the attorney's former and present clients ... has created
a climate for disclosure of relevant confidential
information.' ... Disqualification is mandated where the
issues between the former and present suits are
practically the same or where there is a 'patently clear'
relationship between them... However, the lack of
identity between the cases will not pose a barrier to
disqualification when grounds sufficient to show an
appearance of impropriety are present. Reardon, supra at
In applying that test, the status of attorneys, whether
partner, associate, or junior associate, is not controlling, for
status does not necessarily indicate whether one has or has not
been exposed to confidences. Id. at 474. Further, the Court
recognized the problem of young lawyers' mobility and the job
market, but commented that those concerns are not solved by
loosening ethical standards. Id. at 475.
Summarizing its holding, the Court said that an attorney is
disqualified where 1) a prior attorney-client relationship existed;
2) a substantial relationship or a publicly perceived one between
the subject matter of pending litigation and prior litigation
(although not identical) existed; or 3) there had been access to
relevant confidences of the former client. Reardon, supra at 474.
The Court made clear that these ethical considerations were not to
be applied in an inflexible manner:
When dealing with ethical problems and applying such
prophylactic rules, it is apparent that we cannot paint
with broad strokes. The conclusion in a particular case
can be reached only after 'a painstaking analysis of the
facts and precise application of precedent.' Reardon,
supra at 469.
Thus, each situation must be tested by the circumstances
presented. See, e.g., In re Advisory Opinion No. 361, 77 N.J. 199
Commentators on the subject have discussed cases involving
former affiliates differently from those concerning present
affiliates. "Developments in the Law - Conflicts of Interest in the
Legal Profession" 94 Harv. L. Rev. 1244, 1352-1370 (1981). The
first involves imputing knowledge to a former affiliate, regardless
of the extent of his participating in a matter for a client; that
is, to a lawyer who has terminated his relationship with a lawyer
or firm involved in the representation. The latter involves
imputing knowledge brought by a newcomer to an attorney or other
members of the firm with which he becomes affiliated. Id. at 1352
It is widely acknowledged that, in the former class of cases,
a more liberal approach is used to permit the refutation of the
"irrebuttable presumption" of a transmittal of knowledge to a
former affiliate. Id. at 1357 and cases at note 367. The reason is
that such an inflexible rule is unrealistic and unnecessarily poses
a potentially serious impediment to a young attorney's mobility and
aspirations. Id. at 1357.
The consideration regarding present affiliates is
distinguished because of the threat, actual or perceived, of
prospective sharing of information, intentionally or otherwise.
Thus, traditionally, knowledge is imputed to the present colleagues
of the affiliated attorney. See, Reardon, supra. However, it must
be recognized that the same considerations as they relate to
mobility of young lawyers apply equally here as they do in the
situation involving former affiliates.
The Supreme Court of this state, based upon the public policy
of fostering government recruitment of competent attorneys, has
permitted lawyers, formerly associated in government, to be
isolated by constructing a screen around them.See footnote 1
Ross v. Canino, 93
N.J. 402 (1983); In re Advisory Opinion No. 361, 77 N.J. 199
(1978); Kesselhaut v. United States, 555 F.2d 791 (U.S. Ct. of
Claims 1977). Under the circumstances presented, the Court in In re
Opinion No. 361, held that the "Chinese wall" erected there created
a rebuttal to the presumption of shared knowledge, and was
sufficient to dispel the appearance of impropriety which, "...
must be more than a fanciful possibility." Supra at 325.
The issue presented to the Committee here relates to the
problems facing present affiliates and how their prior activities
in the practice of law may affect a new firm which they have joined
or propose to join. A blanket, inflexible, irrebuttable
determination of conflict by reason simply of the fact that their
prior firm was involved in defense of a toxic tort case having a
substantial relationship to a case being handled by the new firm
leads unfairly to the creation of "Professional Pariahs" or
"Typhoid Marys". 94 Harv. L. Rev., at 1364, 1366.
It is argued that, because of the ruling in Beshada v.
Johns-Manville, 90 N.J. 191 (1982), adversarial relationships
between co-defendants have been eliminated, and therefore, ethics
rules concerning conflicts of interest do not apply since the only
issue between co-defendants is an issue of law, i.e., of
contribution. Issues of law as they affect different parties to an
action do not alone determine whether or not a conflict exists. For
example, confidences relating to the "... strength or weaknesses of
a corporate client's decision-makers or their attitudes toward
settlement" must be maintained. See Reardon, supra at 476.
A more persuasive argument, however, is made. The contention
is that the toxic tort type of industry wide litigation should be
treated differently from others by reason of various distinctions.
It involves numerous manufacturers, distributors and suppliers.
Some issues in the cases are common to many parties in a specific
case, but not to others. Most of the defense law firms and many of
the plaintiffs' law firms in the state are involved, and will be
involved in this kind of litigation for years. Cases come in
clusters involving numerous workers at one site, and an associate
may be involved only in the facts relating to that site. Other
associates may have limited contact in other ways, e.g., research
or taking depositions of claimants.
Because of the extent and the nature of toxic-asbestos
litigation, public policy considerations dictate different rules
here which will not serve to dilute the application of the Code of
Professional responsibility. See, In re Advisory Opinion No. 361,
supra. Young lawyers should not unreasonably and unnecessarily have
their careers severely stunted if ethics considerations remain
intact and the public perception does not suffer. Clients or
prospective clients should not be unreasonably impeded in their
choice of law firms.
Fashioning criteria which may provide answers in most cases is
necessary so that young lawyers who seek to make a career shift as
well as prospective employees may make judgments prior to entering
into their professional relationships. In pursuing this endeavor it
is apparent that all factual situations may not fall within the
guidelines so fashioned.
Clearly a lawyer and the firm he joins will be disqualified
from handling a case in which the prior firm was or is engaged. The
reason is obvious: even if no confidences were obtained or there is
no actual conflict, the presumption otherwise is irrebuttable.
Further, the appearance of impropriety is pervasive.
With regard to other situations, various factors bear on the
making of a determination. Among those that should be considered
are the following:
1. The size of the prior and succeeding law firm;
2. The extent of the relationship between the
3. The degree of responsibility held by the
present affiliate with a former law firm;
4. The length of time spent with the former firm;
5. The kind of work done; whether toxic tort or
other law work;
6. If engaged in toxic tort work, the degree of
involvement - whether extensive, peripheral or
incidental only or whether in greater depth;
7. The law work with which the affiliate will be
involved or is involved;
8. The passage of time involved; i.e., the time
elapsed between when the affiliate last had an
involvement with a case substantially related
to the one at issue;
9. The substantiality or insubstantiality of the
relationship between the cases and the issues
10. Other circumstances having a reasonable
bearing on actual conflict or perceived
In the practice of law impropriety and, any appearance of
impropriety are to be avoided. It is, therefore, the opinion of the
Committee that as in In re Advisory Opinion No. 361, supra, the new
affiliate should delay for six month participation in any
proceeding involving a matter which may be substantially related to
one handled by the firm which previously employed that affiliate.
This prohibition will serve to ameliorate any possible public
appearance of impropriety. The statement of the Supreme Court in In
re Advisory Opinion No. 361, supra, at 207 is pertinent at this
These standards by their very nature must be general and,
in a given situation, may be difficult of application.
Like all disciplinary rules, though, our ruling herein is
dependent on the integrity of the bar and its willingness
to cooperate in conforming with these guidelines.
* * *
Footnote: 1 1It has become accepted to refer to this screening as the
erection of a "Chinese Wall. See, Ross v. Canino, 93 N.J. 402,
410 (1983), and see discussion of "the Chinese Wall" in 94 Harv.
L. Rev., at 1367.
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