Rutgers School of Law, OAL case ACPE605

120 N.J.L.J. 317
August 13, 1987

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the Supreme Court of New Jersey

OPINION 605

Conflict of Interests:
Representing Public Entities and
Private Co-Defendants in Multi-Party Suits

    This inquiry concerns multi-party environmental litigation against certain municipalities and private entities.
    We are asked the following three questions:
        1.    May an attorney represent both a defendant municipality as well as its co-defendant private entity notwithstanding each must cross-claim against the other?

        2.    When a law firm has previously represented a municipality in a multi-party environmental action, may that firm later represent a private entity defendant in a subsequent multi-party environmental litigation in which that municipality is also a defendant? and

        3.    Where a firm has represented a private entity defendant which has cross-claimed against a municipality-defendant in a prior multi- defendant action, may that firm now represent that municipality-defendant in the subsequent multiparty action?

The ethical considerations raised in the above questions concern representation of multiple parties whose interests as respects third parties may be substantially opposed. Further, multiple parties may have valid cross-claims. In undertaking dual representation where cross-claims may exist and where the co-defendants may have different interests as respects third parties, an attorney undertaking such dual representation puts himself or herself at risk of obtaining from one client secrets and confidences which may be of prejudice to one or more of the other parties represented by that attorney.
    Consequently, dual representation puts an attorney in peril of being unable to properly advance or protect one client without prejudice to another.
    The Supreme Court has laid out the guidelines applicable to multiparty litigation in IMO Petition for Review of Opinion 552, 102 N.J. 194 (1986). There, the questions related to municipal defendants and their staff members joined as co-defendants in civil rights actions under 42 U.S.C. § 1983.
    In our Opinion 588, 118 N.J.L.J. 94 (1986), we held that the Court's guidelines for Section 1983 civil rights actions were applicable to multi-party environmental litigation.
    As stated by the Court:
    . . .[J]oint representation of clients with potentially differing interests is permissible provided there is a substantial identity of interests between them in defending the claims that have been brought against all defendants. The elements of mutuality must preponderate over the elements of incompatibility. 102 N.J. at 204.

    The Supreme Court grounded its conclusions: "upon common sense, experience and realism." Id.
    In civil rights actions, the Court pointed out that a governmental body may remove potential conflict where it is appropriate under applicable law to indemnify its co-defendant staff member. Id., at 200, 207.

    While multi-party actions involving private parties with municipal parties may not have the availability of the specific indemnification laws referred to by the Supreme Court, in some cases indemnification may be an appropriate method of removing apparent conflict so that one attorney may represent both a private and a municipal defendant under the Court's guidelines.
    In question #1, the need of each party to cross-claim indicates that the inquirer has determined that an actual conflict exists, or at the least that there is a realistic likelihood of such conflict. Co-defendants, including public entities, in this situation would be bound to cross-claim in the event plaintiffs prove their claims. Under the case management system, such cross-claims can be postponed to a later stage if under the Supreme Court's "guidelines", elements of mutuality respecting the defense of plaintiffs' claims preponderate over elements of incompatibility. Thus, appropriate case management orders may provide for discovery and trial of liability to plaintiffs only, as a first stage. Disclosure, consent and control by the court should facilitate the achievement of efficient disposition with some cost saving but without prejudice to any co-parties in respect to the later pursuit of cross-claims. Should the court hearing the matter conclude that this procedure could not be followed without later prejudice to one or more co-defendants, an order forbidding the multiple representation would be required.
    In questions #2 and #3, an attorney must adhere to the provisions of RPC 1.7 as interpreted by the Supreme Court. The attorney must make his or her own independent evaluation as to whether or not multiple representation will affect the ability to look to the interests of the clients without prejudice to either client. Where there is no actual conflict and where there is no reasonable likelihood of conflict the co-representation may be accepted. Consent of the clients should be obtained.
    Although consent of a public entity is of no avail where a real conflict exists, such consent is valid where the principles of RPC 1.7 are adhered to. IMO Petition for Review of Opinion 552, supra, at 202.
    Ethical considerations affecting the administration of justice apply equally to environmental actions against public and private entities. The attorney undertaking multiple representation is obliged to remain alert for development of conflict problems. Should conflicts arise or appear very likely, an attorney must bring the matter to the attention of the court as required in IMO Petition for Review of Opinion 552, supra, at 207-208.

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