Ethics Opinion

Opinion No. 02-2

February 2002

Summary: Under Rule 1.7, a lawyer may not simultaneously represent two clients seeking to develop adjoining parcels of land when one client proposes to object to the other client's effort to obtain the necessary permit from the zoning board unless both clients give informed consent to the dual representation and the lawyer reasonably believes that dual representation will not adversely affect her relationship with either client. If each representation was permissible when undertaken and the objection by one client to the other's project was not reasonably foreseeable at that time, it may be permissible to drop one client and to continue to represent the other.

Facts: Lawyer has been representing Client X before a town planning board and before the Zoning Board of Appeals in connection with the development of a piece of property. Lawyer has also been representing Client Y in connection with the development of an adjoining piece of property and is preparing to appear before the Zoning Board of Appeals to obtain the necessary permit to proceed. Client X states that it wishes to oppose Client Y's application. Lawyer does not and will not represent either client with respect to the other's project. Lawyer inquires whether she may continue to represent both Clients X and Y with respect to their respective projects and if not whether she may terminate representation of one client and continue to represent the other.

Discussion: The governing rule of professional conduct is set forth in Rule 1.7 of the Massachusetts Rules of Professional Conduct. It provides:

(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:

(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and

(2) each client consents after consultation.

Comment 3, explaining that Rule, states: "Thus, a lawyer ordinarily may not act as advocate against a person the lawyer represents in some other matter, even if it is wholly unrelated." The reason is that in representing Client Y, Lawyer will be forced to rebut the position of Client X, whom Lawyer represents in another matter. The issue is quite different from that presented on almost identical facts in Opinion 2001-8 of the Rhode Island Supreme Court Ethics Advisory Panel. (summarized at 17 ABA/BNA Lawyers' Manual of Professional Conduct 744 (Dec. 19, 2001). There the panel concluded that there was no conflict of interest because the objecting client was a former client and under Rule 1.9, governing the former client situation, the matters were not "substantially related." When the situation involves representation of two current clients simultaneously, a finding of conflict of interest does not require that the matters be substantially related. Comment 3 to Rule 1.7 therefore covers Lawyer's situation exactly. Under the Comment, which elaborates the text of the Rule, Lawyer may not represent both clients simultaneously unless she meets the two conditions prescribed in Rule 1.7(a)(1) and (2).

The first condition is that the lawyer obtain the consent of both clients after "consultation" with them as set forth in Rule 9.1(c). But consent of both parties is not sufficient to permit Lawyer to represent both. The second condition is that the lawyer "reasonably believes the representation will not adversely affect the relationship with the other client . . . ." The test is an objective one. See Rule 1.7, Comment 5. The danger presented in this situation is that defending Client Y against the objection of Client X would require an attack on Client X in such a way as to affect Lawyer's relationship with Client X. We do not know the nature of the Client X's objections to Client Y's project, but we can certainly conceive of various scenarios under which the possibility of such adverse effect would be substantial, especially because of the geographic proximity of the two projects. All we can do then is to warn of the danger that consent of the parties may not be sufficient to permit the dual representation.

Lawyer also inquires whether if dual representation is not possible, she may drop one of the clients and continue to represent the other. In our Opinion 92-2, we referred to the so-called "hot potato" rule, which forbids dropping a client in order to be able to represent another. We said:

In Opinion 84-4, we adopted the general rule set forth in
Unified Sewerage Authority v. Jelco, Inc., 646 F.2d 1339, 1345 n.4 (9th Cir. 1981) that the policy reasons for DR 5-105 require that ability to represent multiple parties be decided as of the time when the conflict arises and that a prohibited conflict may not be cured by withdrawing from representation of a party or by finishing the work for one of the parties. Whether exceptions might be justified in some cases for reasons of insubstantiality or the like, see N. Sacca & Sons Inc. v. East Coast Excavators (Mass. Dist. Ct. App. Div. 1992), this does not seem to us to be such a case . . . .

The usual case in which the "hot potato" rule arises is when a lawyer wishes to take on a new client and wants to drop an existing client in order to avoid a conflict. In this case, so far as we know, the undertaking of both representations was permissible at the time each representation was begun, and it is only the unexpected objection by one client to the project of another that creates the conflict. In such a situation, it may well be that an exception would be permissible because it would be the unexpected action of a client that created a conflict and there was nothing Lawyer could have done to prevent it. See Pennwalt v. Plough, 85 F.R.D. 264 (D. Del. 1980). We would have to know more than we already do to know which client, if either, could be dropped in such a situation. In addition, we do not think an exception would be created if the conflict had been reasonably foreseeable at the time Lawyer undertook the second representation.

Permission to publish granted by the House of Delegates on June 26, 2002. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official government status.