88 N.J.L.J. 581
September 9, 1965
Attorney for Municipality,
Municipal Agencies, Developers
This inquiry, as stated by the writer, follows a reading of
the per curiam opinion of the Supreme Court of New Jersey, In the
Matter of A.& B. Attorneys-at-Law, 44 N.J. 331, decided April 12,
1965, dealing with municipal attorneys representing developers.
Two questions are propounded, which in the opinion of the writer are not dealt with by the Court, and on which the opinion of this Committee is sought:
Question One. A Sewer Authority has its members appointed by the governing body of the municipality, but it operates as a separate entity. It is commonly acknowledged to be the alter ego of the municipality. My experience has been that sometimes the members of the Sewer Authority are at odds with the municipality. In the case of one Authority we represent a sewer leak resulted in undermining a few feet of pavement and the municipality threatened to sue the Authority unless it repaired the pavement. I know of no instance where a Sewer Authority could favor a developer, and I know of no instance where the developer has sought to enter the sewer system of a municipality separate from where the developer's land is situated. Question: Is the attorney of a Sewer Authority barred by the Court's opinion from accepting employment from a developer?
Question Two. A municipality desires to put in a trunk water line for a new supply of water. Is an attorney barred from accepting employment for that particular project because he happens to represent some developers both in the municipality putting in the pipe line and in the municipality through which the major portion of the line will run? The line would extend from the river to the municipal filtration plant. It serves no developer and no other customer and is purely a source of supply. Question: Is an attorney representing a developer forbidden from accepting the municipal employment?
A second letter from the attorney by way of supplement to the first is a statement that his law firm is the attorney for Municipality A, and under the recent opinion of the Supreme Court of New Jersey, he assumes they are not at liberty to represent either of two developers in this municipality so long as they remain counsel to said municipality. The writer further states he believes "the Court's Interpretation will raise the general standards of the Bar," and is in favor of it even though it results in the office no longer representing Municipality A.
Further statements are to the effect that the law firm has two matters pending, one in litigation, for Municipality A, which it would like to carry through to completion.
Next he states, another member of the firm represents Municipality B and there are numerous developments there, in which his office represents a number of developers. This member of the firm realizes that the Court's decision requires him to resign as counsel to Municipality B. Further, this member of the firm represents a Utility Authority in Municipality B which is a separate municipal body, whose members are appointed by the governing body "and in many repeats it is the alter ego of the" municipality. The writer can see no conflict of interest in continuing to represent the Utility Authority and gives an explanation that the Authority is low on finances and struggling
to get along.
Lastly, the writer organized and represents a Sewerage Authority in Municipality C which contracts with three individual units located in Municipality B. When the sewer system is completed by the Authority in Municipality B the three units will transfer there. The writer can see no conflict in continuing to represent the Sewerage Authority in Municipality C.
It is the opinion of this Committee that it would be unethical for the attorney for the municipal body or agency to perform the services outlined in the two questions initially submitted by the writer. And further, that the opinion of the Court, In the Matter of A. & B. Attorneys-at-Law, supra, is controlling of the issues presented in the two questions:
Nonetheless the subject of land development is one in which the likelihood of transactions with a municipality and the room for public misunderstanding are so great that a member of the bar should not represent a developer operating in a municipality in which the member of the bar is the municipal attorney or the holder of any other municipal office of apparent influence.
The fact of such dual representation itself is contrary to the public interest. 44 N.J. at 334-5; (emphasis added).
The Court holds that representation by municipal attorneys or the holders of any other municipal office of apparent influence, while also attorneys for the land and building developers in that municipality, violates Canons of Professional Ethics, Canon 6.
What should be done with those pending matters the writer would like to complete, may find an answer in the additional views expressed by Justice Schettino in his option, specifically the last sentence:
Moreover, as the Court's opinion here is in the nature of an advisory one, I would, as to any attorney presently in such a situation, require him, within a reasonable time hereafter, to free himself of such entanglements. 44 N.J. at 337.
This Committee has heretofore stated in N.J. Advisory Committee on Professional Ethics, Opinion 69, 88 N.J.L.J. 97 (1965):
All that we have said concerning the municipal attorney and the municipality he represents applies with equal force to an attorney representing any municipal board, agency or other public body.
It is therefore unethical for an attorney to represent a Utility Authority in the same municipality in which he represents developers.
This Committee finds no conflict of interest in members of the same law firm representing the Sewerage Authority in different municipalities under the circumstances set forth.