By Andrew A. Servais
The ABA’s Formal Opinion 497 provides practitioners guidance regarding their duties to former clients when contemplating new representation noting “Rules 1.9(a) and 1.18(c) address conflicts involving representing a current client with interests that are ‘materially adverse’ to the interests of a former client or prospective client on the same or a substantially related matter. But neither Rule specifies when the interests of a current client are ‘materially adverse’ to those of a former client or prospective client.” (ABA Formal Opinion 497, Preamble.)
This issue is particularly relevant for California attorneys because California Rules of Professional Conduct only incorporated the “materially adverse” standard in 2018 when its rules were revamped, which in part, brought them in closer line with the ABA model rules which every other State had previously adopted in substance. Indeed, the pre-2018 California Rule of Professional Conduct (“CRCP”), Rule 3-310(E) required written informed consent from a former client to “accept employment adverse” if “the member has obtained confidential information material to the employment.” (emphasis added.)
CRCP, Rule 1.9(a) now provides: “A lawyer who has formerly represented a client in a matter shall not thereafter 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 gives informed written consent.” (emphasis added.)
CRCP, Rule 1.18{c) does not have a direct predecessor in California as it was essentially subsumed within other Rules, but now expressly states that the duty of confidentiality extends to prospective clients who reasonably anticipate they may retain the lawyer. California Rule 1.18(c) is identical to the ABA Model counterpart in utilizing the “materially adverse” standard prohibiting attorneys from representing “a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter …. ”
The opinion identifies the following where “material adversity” arises: (1) suing or negotiating against a former client; (2) attacking or undermining their own prior work on behalf of a former client; and (3) examining a former client. It also notes that “[m]aterial adverseness … requires a conflict as to the legal right and duties of the clients, not merely conflicting or competing economic interests.” Thus, “a lawyer does not have a Rule 1.9 conflict solely because the lawyer previously represented a competitor of a current client whose economic interests are adverse to the current client.”
The guidance is welcome as Courts and commentators have noted the absence of guidance on this definition. See, e.g., Selby v. Revlon Consumer Products Corp. 6 F.Supp.2d 577,580 (N.D.Tex.1997) (“There is a paucity of authority interpreting the adversity requirement of ABA Rule 1.9.”); ABA/BNA Lawyers’ Manual on Professional Conduct §51:220 (2002); Simpson Performance Products, Inc. v. Robert W. Horn, P.C., 92 P.3d 283 (Wyo. Supreme Court)).