Duty to Avoid Conflicts of Interest

10/25/2021 – Current Clients

Maritrans GP Inc. v. Pepper, Hamilton Scheetz
 Maritrans – transports petroleum products by tug and barge
 Pepper – Law firm
 Pepper represented Maritrans in labor relations matters for over a decade
o During this time they came to know the complete inner-workings of the company
and the future objectives
 Including information about their competitors
 Pepper then went on to represent Maritrans competitors
o They helped the competitors become more competitive in the field (aka take
business away from Maritrans)
 Maritrans voiced their concerns to Pepper
o Pepper said this is a “business conflict” not a “legal conflict”
 They made an agreement that Pepper would not represent any more than the 4 other
companies it already had
o They also had separate counsel for Maritrans and the counsel could not
communicate to the other
 The court agreed that Pepper should not represent their competitors
o There is too great of a risk that the confidential relationship would be breached
MR 1.7 & comments
RLGL § 132
10/27/2021 – Joint Representation and Representing Adversaries
A concurrent conflict exists in two situations:

a. The representation of one client will be directly adverse to another client; or

b. There is a significant risk that the representation of one client will be materially limited by
the lawyer’s own interest or by the lawyer’s responsibilities to another client, a former client, or
a third person.

Can represent with informed consent when all 4 are met:

(1) the lawyer reasonably believes that he can competently and diligently represent each
affected client, despite the conflict of interest;

(2) the representation is not prohibited by law;

(3) the representation does not involve asserting a claim by one client against another client
represented by that lawyer in the same litigation (or other proceeding before a tribunal); and

(4) each affected client gives informed consent, confirmed in writing

Johnson v. Clark Gin Service

 Accident occurred on a railroad crossing
o Train collided with a tractor-trailer
 Rome Arata represented 8 of the 9 plaintiffs in the case
o Representing an engineer, service crew members, and a passenger
 Conflict of interest may occur when there is a risk that the representation of one or more
clients will be materially limited by the lawyer’s responsibilities to another client
o The plaintiffs all give different testimonies to support the claim they are trying to
prove and in some cases their testimony is disproving the other plaintiff’s
complaints
o The passenger plaintiff is alleging that the employees were negligent
 This will require lawyer to prove that his other clients (the employees)
breached a duty to him
 This is contrary to the interests of the employee plaintiffs

Anderson
 O’Briens – befriended and elderly woman (Anderson) to try and convince her to sell
them her home
 O’Briens said they would build a cottage in the backyard for Anderson to live in
o The cottage ended up being more of a small shed
 They arranged for their lawyer to represent Anderson in the real estate transaction
  Their lawyer drafted an agreement
 Court held that Manko violated Rule 1.7 because this was a conflict of interest
o The clients had interests adverse to each other, especially because Anderson was a
reluctant seller
A v. B
 Whether a law firm can disclose confidential information of one co-client to another co-
client
 The law firm was representing a husband and wife when they were getting wills made
 The law firm learned about the husbands illegitimate child and wanted to share it with the
wife
 The court held that the firm was correct in disclosing the information
o RPC 1.6 (c)(1) permitted an attorney to disclose confidential information to the
extent the lawyer reasonably believes necessary "to rectify the consequences of a
client's criminal, illegal, or fraudulent act in furtherance of which the lawyer's
services have been used."
o The husband was committing a fraud on the wife and used the firm to commit the
fraud
MR 1.7
- (a) a lawyer shall not represent a client if it involves a conflict of interest stated below:
(a)(1) directly adverse to another client
(a)(2) significant risk of material limit by the representation of another client
- (b) exceptions: a lawyer can still rep client if -
(b)(1) lawyer reasonably believes that they would be able to provide competent and diligent
representation to each client
(b)(2) representation is not prohibited by law
(b)(3) if its not representing both the plaintiff and a defendant in a case even with consent
(b)(4) each client gives informed consent

MR 1.10
MR 1.13
Problem 9-3
 I do not think that we can take this case because they would be opposing parties
Problem 9-6
I would say no. Each side should have their own lawyer to make sure the deal is in their
best interests
Problem 9-8
The be able to disclose the information to the husband because it can have an effect on
his assets