Freivogel on Conflicts

Trade (and other) Associations

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A law firm represents a trade association.  A client asks the law firm to sue a member of the trade association.  Is the member a client for purposes of the conflicts rules?  Does representing a trade association mean that the law firm represents all the members of the association?  This page also deals with other types of associations such as homeowners' associations.  For a discussion of cases and opinions on corporations click here.  On partnerships, click here.

        United States v. ASCAP (In re Warren), 129 F. Supp. 2d 327 (S.D.N.Y. 2001) addresses the issue directly.  There the court held that the lawyer for ASCAP could be adverse to a member of ASCAP, who was suing ASCAP.  An ethics opinion that does is ABA Op. 92-365 (1992).  The opinion analogizes to the rule that a lawyer for a corporate entity is not thereby a lawyer for the shareholders, officers, or employees.  It also analogizes to general partnerships.  In ABA Op. 91-361 (1991), the Committee took the position that a lawyer for a general partnership is not thereby a lawyer for the partners.  Rotunda § 14-5 agrees with the Committee's basic proposition.  D.C. Op. 305 (2001), Ore. Op. 2005-27 (2005), and N.Y. City Op. 1999-01 agree with ABA Op. 92-365.

        In ABA Op. 92-365, the Committee discusses ways in which the result could change.  For example, in Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir.), cert. denied, 439 U.S. 955 (1978), the court held that the law firm for a trade association could not sue members of the association.  It had been collecting confidential data from the members, and the members thought the firm was representing them.

        Discussing Westinghouse, the court in e2Interactive, Inc. v. Blackhawk Network, Inc., 2010 U.S. Dist. LEXIS 48333 (W.D. Wis. May 17, 2010), held that a lawyer for a trade association is not necessarily lawyer for the members. 

        The Committee noted three cases that held that a lawyer for an unincorporated association was not thereby lawyer for members of the association: Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp., 294 F. Supp. 1148 (E.D. Pa. 1969); United States v. American Radiator & Standard Sanitary Corp., 278 F. Supp. 608 (W.D. Pa. 1967); and Schwartz v. Broadcast Music, Inc., 16 F.R.D. 31 (S.D.N.Y. 1954).  The two more recent cases relied on Schwartz.  The problem with Schwartz, according to the Committee, was that in it the members of the association were also class representatives in a class action.

        In Glueck v. Jonathan Logan, Inc., 653 F.2d 746 (2d Cir. 1981), the court applied a "substantial relationship" test.  It held that the law firm that did labor work for a trade association could not bring a labor-related suit against a corporation whose division was a member of the association.  J.G. Ries & Sons, Inc. v. Spectraserv, Inc., 894 A.2d 681 (N.J. Super. 2006) found that the law firm for a trade association could be adverse to a member of the association.  It, like the court in Glueck, applied the "substantial relationship" test, but found no relationship.

        Shadow Isle, Inc. v. American Angus Ass'n, 1987 U.S. Dist. LEXIS 8590 (W.D. Mo. 1987), involved an incorporated trade association.  The court held that the lawyer for the association was not thereby a lawyer for the members.

        Southern Gardens Citrus Proc. Corp. v. Barnes Richardson & Colburn, 2012 U.S. Dist. LEXIS 125173 (M.D. Fla. Sept. 4, 2012).  This case is about the assertion of privilege and work product in document discovery.  Of interest to this audience is the court's brief discussion of whether the lawyer for an association is also lawyer for the members.  Citing Alexander v. Tandem Staffing Solutions, Inc., 881 So.2d 607, 611 (Fla. 4th DCA 2004), the court, in this opinion, resolved the discovery dispute on the basis that the members were clients. A trade association member may, for whatever reason, reasonably believe that he is a client of the firm.  If that is the case, the firm will have to get consents under Model Rule 1.7(a)(1).  Even if that is not the case, the firm will still have to consider its obligations under Model Rule 1.7(a)(2).

        Unincorporated Association.  Sheehy Road Water Systems Subscribers v. Pirghaibi, 2003 Cal. App. Unpub. LEXIS 6869 (Cal. App. July 17, 2003.  The court held that a lawyer could represent an unincorporated association of fourteen individuals (a water system) in a dispute with a member of the association.  The association and the member were fighting when the association hired the lawyer.  The court affirmed a trial court finding that the lawyer never had represented the member and had never received confidential information from the member.

        Unions. Anderson v. Mercer Co. Sheriff’s Dept., 2014 U.S. Dist. LEXIS 71776 (D.N.J. May 27, 2014). Race discrimination/employment case against sheriff’s personnel and against Union. Plaintiff belongs to Union. Union is being represented by Law Firm, Union’s regular counsel. Plaintiff moved to disqualify Law Firm, claiming it represented her. In this opinion the court denied the motion, holding that a lawyer for a union is not, ipso facto, lawyer for union members. In Killion v. Chief John Coffey, 2014 U.S. Dist. LEXIS 88550 (D.N.J. June 30, 2014) lawyer had a retainer agreement with a policemen’s union. The agreement provided, in part, that Lawyer would be available to give legal advice to members of the union. Lawyer filed this action on behalf of several junior members of the police department against several senior members. All were members of the union. The defendants moved to disqualify Lawyer because she was also representing them. In this opinion the magistrate judge denied the motion. She noted that the defendants had never consulted with Lawyer on any matter. The judge engaged in some considerable parsing of the retainer agreement.

        Unions. Sanchez v. New England Confectionery Co., Inc., 2014 U.S. Dist. LEXIS 163714 (D. Mass. Nov. 20, 2014). In this case Employee sued Employer and Union for unlawful termination and for inadequate representation. Law Firm appeared for Union. Employee moved to disqualify Law Firm because Law Firm had advocated for Employee in the post-termination grievance process. In this opinion the court denied the motion. Citing earlier authority, the court held, in effect, that a union lawyer advocating for a union member in a grievance process does not represent the employee in the Rule 1.9/former-client sense.

        Unions. Frey v. City of Hoboken, 2018 WL 3468165 (N.J. App. Div. July 19, 2018). Plaintiffs brought this employment-related suit against City, Union, and Union President. Law Firm represents both Union and President. Plaintiffs moved to disqualify Law Firm. The trial court denied the motion. In this opinion the appellate court affirmed. The court found that plaintiffs failed to show the Union and President were adverse. Plaintiffs also failed to show that, although they were Union members, Law Firm ever represented them personally. The opinion contains a classic analysis of Rules 1.7, 1.9, and 1.13.

         Condominium Association.  In Ocean Club of Palm Beach Shores Condominium Association v. Estate of Daly, 504 So. 2d 1377 (Fla. App. 1987), the court held that the law firm for the association could sue a member of the association.  In L'Association Des Propriataires v. Redwine, 2002 Cal. App. Unpub. LEXIS 2211 (Cal. App. April 10, 2002), the court held that the former general counsel of a homeowners' association could not later represent a group of former directors against the association, which now has a new set of directors.  In Katakis v. Sinclair, 2017 WL 1684120 (E.D. Cal. May 2, 2017), Fox Hollow of Turlock Owners' Ass'n v. Sinclair, 2011 U.S. Dist. LEXIS 68558 (E.D. Cal. June 27, 2011), and Tokh v. Water Tower Court Homeowners Ass’n., 2006 U.S. Dist. LEXIS 38754 (N.D. Ill. June 12, 2006), the courts held that a lawyer for a homeowners' association is not, thereby, lawyer for the members.

        Another Homeowners' Association. Legacy Villas Ass’n v. Centex Homes, 2015 WL 5559570 (9th Cir. Sept. 22, 2015). This is a suit by the homeowners’ association of a new development (“HA”) against the developer for construction defects and mismanagement. Law Firm represents HA. In the first several years of the development HA was peopled by the developer’s employees. Law Firm represented HA during those years. The developer moved to disqualify Law Firm. The trial court granted the motion. In this opinion the Ninth Circuit reversed, because Law Firm’s dealing with the developer’s employees on HA matters did not rise to an actual or implied relationship with the developer.

        Treatise.  Rotunda &  Dzienkowski § 1.13-5.

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