Opinion 93-25
(April 1994)

This Inquiry concerns whether a lawyer may accept employment with a law firm in order to represent an insurance company in litigation disputing policy coverage with respect to damage claims where the lawyer previously represented the plaintiffs asserting those claims in the underlying litigation against the insurance company's insured. In the circumstances presented, it is the Committee's opinion that the Inquirer may not undertake the proposed new employment.

The Facts


The essential facts are these. The inquiring attorney was previously employed for a period of about 1 1/2 years as an associate with a law firm that, along with other firms, represented various classes of plaintiffs in litigation against Exxon, Exxon Shipping, and Alyeska, the Alaskan pipeline consortium, arising out of the grounding of the Exxon Valdez and related oil spill in 1989. Alyeska has apparently settled with the classes.

As part of his assignments, the Inquirer inspected documents produced by the defendants. In the course of that work, the Inquirer received confidential communications concerning document selection criteria. When he came upon documents of interest, he prepared written memoranda to the partners of his firm about the documents. He also participated in a so-called "second cut" document review and selection process.

Inquirer states that there is a great deal of congruity of interests among the plaintiff classes and the insurers, all of whom are adverse in their respective fashions to Exxon. The facts in both cases concerning the events are the same, he points out, and there are common legal issues as well. Under these circumstances, Inquirer wants to know whether he may, consistent with the Rules of Professional Conduct, accept employment with a law firm in order to represent an insurance company in litigation disputing policy coverage for Exxon.

The Rules of Professional Conduct


The governing provisions of the Pennsylvania Rules of Professional Conduct are found in Rules 1.6(a) and (d) and 1.9. Rule 1.6(a) states:

A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (1) and (c) (The exceptions stated in paragraphs (1) and (c) of the Rule are not implicated here).

Rule 1.6(d) provides:

The duty not to reveal information relating to representation of a client continues after the client-lawyer relationship has terminated.

Rule 1.9 states:

A lawyer who has formerly represented a client in a matter shall not thereafter:

(a) represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after a full disclosure of the circumstances and consultation; or

(b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known.

Discussion


Both Rule 1.6(a) and Rule 1.9(1) are directed to the maintenance of confidentiality concerning all information an attorney acquires relating to representation of a client. The lawyer's obligations under these rules extend well beyond information conveyed to her or him by the client, the traditional confines of the attorney-client privilege, and encompass information obtained from all sources, subject to the limited exceptions stated in those rules. The official Comment to Rule 1.6 makes clear that the duty of confidentiality imposed by that rule "applies not merely to matters communicated in confidence by the client but also to all information relating to the representation, whatever its source." Rule 1.6(d) commands that "[t]he duty not to reveal information relating to representation of a client continues after the client-lawyer relationship has terminated."

In this case, the Inquirer has acquired a great deal of information relating to his representation of the plaintiff classes in the underlying damages litigation. This information includes, apparently, not only the confidential document selection criteria provided to him by his employer, but information learned from the content of documents he inspected, information discussed in various memoranda he prepared, information about the plaintiff classes, and the like. He may neither reveal any of such information nor use it to the disadvantage of those plaintiff classes without their consent. Employment as counsel for one of Exxon's insurers will inevitably place him in a position where, if he is to provide his new client with competent professional services as required by Rule 1.1 of the Rules of Professional Conduct, he will use such information to the disadvantage of the classes and may actually reveal it.

The Inquirer will also be representing interests adverse to his former clients if he accepts the proposed employment. By disputing insurance coverage, the Inquirer will, at a minimum, make the possibility of early recovery for the classes (possibly by settlement) that much less likely. If his representation is successful and Exxon is denied a substantial amount of insurance protection, this might diminish the ultimate recovery by the plaintiff classes. Thus, representing the insurance carrier in these circumstances would be directly adverse to the interests of the plaintiff classes.

Under these circumstances, the Inquirer may only accept the proposed new employment if he makes full disclosure of the circumstances, "including the [Inquirer's] intended role in behalf of the new client," Comment to Rule 1.9, and obtains consent from the plaintiff client(s) in the class action litigation. It would appear that, as in other aspects of class action litigation, this requires consent from the class representatives and their counsel, but the Inquirer should consider, given the nature of his fiduciary duties to the members of the plaintiff classes, whether the "client" and "former client" referred to in Rules 1.6 and 1.9 include the individual class members as well. The Committee does not here address the role of the court in its protection of the interests of the members of the class.

       

The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.