Thursday, February 3, 2011

Conflicts & Waivers Ruling: Firms, Not Clients, Must Identify Conflicts; Waivers Must be Intentional

[Another h/t to Bill Freivogel] This recent decision highlights an attempt to argue the "silence = consent" card in the case of conflicts waivers. [Bird v. Metropolitan Cas. Ins. Co., 2011 U.S. Dist. LEXIS 6055 (W.D. Wash. Jan. 18, 2011)] Timeline of key events:
  • July 9, 2010 -- Firm representing plaintiff (on a lawsuit that commenced May 26, 2010) discloses conflict of interest by letter. It requests a waiver.
  • August 19, 2010 -- Counsel for defendant notifies firm by email that it does not consent to a waiver and demands that the firm withdraw from matter. The firm does not withdraw.
  • November 30, 2010 -- Motion to disqualify filed.
  • January 18, 2011 -- Motion heard and decided. Firm disqualified.
The firm argued that the gap in time between when the dispute arose and the disqualification motion was filed was, in effect, a waiver of the conflict (the August 19 response notwithstanding): "...Cole, Lether argues that Metropolitan has waived the conflict by its delay in bringing the motion to disqualify." It also argued that the representation at the root of the conflict was long-standing (the triggering activity commenced place in 2009), even though this activity was only recently discovered and disclosed by the firm.

A judge disagreed, citing rules of professional conduct and existing case law which states that waivers must be explicit and intentional. Furthermore, he noted that there was no evidence to support the argument for an "implicit" waiver, and that motion to disqualify was brought in a timely fashion: "At no time prior to July 12, 2010, did Metropolitan have specific and/or actual knowledge of Cole Lether's concurrent representation of Plaintiffs and Metropolitan."

Finally, he affirmed the (intuitive) standard regarding who is responsible for identifying and resolving conflicts: "The obligation to disclose a conflict rests with the attorney, not the client. Consequently, any delay is attributable to Cole, Lether, not Metropolitan."

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