The Practical Litigator | 53

When you’re on the spot, do you know what to do?

When We speak of litigation dilemmas, we’re not speaking about

garden variety legal problems, the sort of things our clients ask us to han-

dle. When the client is accused of breaching a contract or has been vic-

timized by someone else’s breach, that’s a mere legal problem. That’s the

client’s dilemma, not ours. That’s what we get paid to fix.

The litigation dilemma is the problem within the problem. It’s the

problem collateral to the problem. It’s the minefield in which unsuspect-

ing lawyers suddenly find themselves. It’s the gray zone of legal decision-

making. It’s being put in the position of having to take a position.

Kenneth R. Berman is a partner in the Litigation Depart-

ment of the Boston law firm Nutter

McClennen & Fish LLP. His practice fo-

cuses on complex business and com-

mercial disputes, intellectual property

litigation, land use litigation, and pub-

lic law disputes. He frequently writes

and lectures for local and national

audiences on topics of current legal

interest, high profile litigation, and

advanced litigation techniques. This

article is based on a paper for a semi-

nar sponsored by the ABA’s Section of

Litigation.

The Litigation Quiz Show: Dealing With Dilemmas

by Kenneth R. Berman

54 | The Practical Litigator July 2008

COnFROnTInG The DILeMMa • Litiga-tion dilemmas can be large or small, common or uncommon, consequential or inconsequential. Of-ten, the litigation dilemma arises when lawyers lack immediate access to an authoritative answer. Few lawyers have time to run to the library each time they need to make a decision or take a position on an issue that will affect a pending matter. We tend to rely on past experience, instincts, common sense, the lawyer in the next office, or our own personal fund of knowledge, however limited or extensive that might be. We’re savvy enough, usually, to sense when there’s an issue. We’re human enough to think we know the answer. We’re naive enough to feel con-fident about our decisions. We’re humble enough when our decisions are shown to be wrong. Sometimes, circumstances force us into a di-lemma, and the choice we need to make is obvious. Your opponent demands an answer to a question at a deposition, and you think the answer will re-veal privileged information. You’re in a dilemma because you’re not certain whether the claim of privilege is well-founded, but you know that the consequences of yielding up potentially privileged information could be devastating. You instruct your client not to answer on the ground of privilege, and decide you’ll look it up later. That’s your only prac-tical choice. If you’re wrong, the error is correct-able, and there will be time enough to correct it. The dilemma, though real, is minor. Other times, the dilemma can be considerably more momentous, without necessarily seeming so. We continually make decisions about whether cer-tain documents need to be produced. A wrong call, regardless of how innocuous it might have seemed at the time, can spell disaster. Or you take in a new client after having concluded that the representa-tion poses no conflict. Your mistaken judgment, revealed a year later with the benefit of hindsight, can torpedo your career and add intolerable stress to your marriage and family life.

The QUIZ shOW • The Litigation Quiz show, an entertaining CLE program featured at ABA meetings, is meant to demonstrate not just simply the ubiquity of litigation dilemmas, but how dif-ficult it is to know the right answer. The world of litigation seldom presents easy solutions. We live in gray areas. We may be wrong, and although we like to think we’re never in doubt, we often are but we won’t admit it. Our outward opinions about our own rectitude are usually matched by the contrary opinions of others who, outwardly, are equally im-pressed by their own rectitude. In the Litigation Quiz Show, we present a se-ries of dilemmas, dilemmas you might confront on any normal day. These dilemmas might deal with the admissibility or discoverability of evidence, the application of privilege or work product rules, or matters of serious ethical importance. In this article, we highlight a few of the ethi-cal dilemmas featured, or similar to those that were featured, in the 2007 Litigation Quiz Show. If you find the discussion unsatisfying, it may be because there is no right answer. The dilemma might pres-ent only a collection of risk scenarios. Or it may be that your ingrained ideas of what is right no longer reflect the prevailing view, assuming they ever did. The discussion below is not intended to be an ex-haustive analysis of the various dilemmas presented, as these dilemmas raise many issues, often nuanced. Instead, the discussion is intended to spot issues and to highlight just some of the matters that need to be considered in addressing these problems.

Dilemma: Suing The Client’s Affiliate Lawyer represents Hewitt Motor Controls, Inc. in defense of a suit brought by a customer charging systematic and fraudulent overpricing. In an unre-lated matter, Lawyer’s partner has brought a suit against Hewitt Engineering, Inc. for negligence as-sociated with the construction of a dam and hydro-electric power generating plant. Both companies are wholly owned by Hewitt Corp., a conglomerate

Litigation Dilemmas | 55

that owns five manufacturing or industrial services companies. Outside counsel for Hewitt Engineer-ing moves to disqualify Lawyer’s firm as plaintiff ’s counsel. The two subsidiaries and the parent have two common directors and three non-common direc-tors, but the officers and managers of the three related companies are different individuals. The work of all outside counsel is supervised by the in-house legal department at Hewitt Corp. The in-house attorney to whom Lawyer reports on the Hewitt Motor Controls case reports to the in-house lawyer who oversees outside counsel on the Hewitt Engineering matter. The two subsidiaries some-times work on the same project. They have some familiarity with the capabilities of each other as a result of these common projects and as a result of an annual meeting of the officers and managers of all of the companies in the conglomerate.

Discussion For many years, the conventional view, still held by many respectable thinkers, is that a lawyer repre-senting a corporation can never handle a litigation matter against the corporation’s parent company, subsidiaries, or sister corporations. In 1995, the ABA issued Formal Opinion No. 95-390, in which a divided ethics committee concluded that represen-tation of one company in a corporate family does not necessarily disqualify the firm from represent-ing a client in an unrelated matter against the par-ent, subsidiary, or affiliate of the first company. In the eyes of the majority of the committee, whether the firm may take on the unrelated matter against the parent, subsidiary, or affiliate turns on a variety of circumstances, such as whether the lawyer and client have a reasonable expectation that the lawyer serves as counsel for the related entities, whether confidential information from the related entity was given to the lawyer, whether management between the related companies is intertwined, whether the same in-house lawyer supervises the work of out-

side counsel for the related entities, and whether the representation of the second client can have an adverse effect on the first client. An additional con-sideration is whether the lawyer’s handling of the respective representations might materially limit the lawyer’s or law firm’s ability to discharge the duties owed to each client. Reported case law on this topic has reached dif-fering conclusions. Compare Brooklyn Navy Yard Cogen-eration Partners, L.P. v. Superior Court, 70 Cal. Rptr. 2d 419 (Cal. Ct. App. 1997) (approving law firm’s rep-resentation of one client in a matter adverse to the parent corporation of another client of the firm, ex-cept when the parent and subsidiary are alter egos) with Travelers Indemnity Co. v. Gerling Global Reinsurance Corp., 2000 U.S. Dist. LEXIS 11639 (S.D.N.Y. Aug. 14, 2000) (disqualifying law firm from representing one client in a matter adverse to the sister corpora-tion of another client of the firm, when the two sister corporations shared numerous resources).

Dilemma: Representing The Client’s Competitor Lawyer represents Hewitt Motor Controls, Inc. in defense of a suit brought by a customer charg-ing systematic and fraudulent overpricing. In an unrelated matter, Lawyer’s firm represented He-witt’s competitor, Baker Motor Controls, Inc. in a covenant not to compete suit, in which Baker was attempting to stop the head of sales and marketing from joining a third competitor. Baker demands that Lawyer’s firm cease representing Hewitt Mo-tor Controls, Inc. and sues to enjoin the representa-tion after Lawyer’s firm declines to do so.

Discussion This dilemma raises the issue of whether and when a law firm would be conflicted from repre-senting the competitor of a client. Without more, the mere fact that one client is a competitor of an-other does not create a disqualifiable conflict.