Opinion ID: 1153989
Heading Depth: 1
Heading Rank: 5

Heading: Significantly Related Matter.

Text: The resolution of this case turns on the relationship between the dissolution proceeding and the matters in which the accused formerly had represented Mrs. Zingg. The courts have used various adjectives to describe when representations in two or more matters are sufficiently interrelated to give rise to a conflict. These descriptions typically arise in corporate litigation, in the context of motions to disqualify lawyers. See Hilliker, Attorney Disqualification Motions, 26 Prac.Law 11 (Oct. 15, 1980). The most common formulations employ the substantial relationship test, first articulated in T.C. & Theatre Corp. v. Warner Bros. Pictures, 113 F. Supp. 265, 268 (SDNY 1953): [T]he former client need show no more than that the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to the matters or cause of action wherein the attorney previously represented him, the former client. The federal courts differ in their interpretations of what relations are substantial. Most federal courts look for a similarity or relationship between the subject matters or factual contexts of the former and current representations. E.g., Trone v. Smith, 621 F.2d 994, 998 (9th Cir.1980). The Second Circuit, however, requires that the issues involved in the representations be identical or essentially the same. Government of India v. Cook Industries, 569 F.2d 737, 740 (2d Cir.1978); see generally Note, Developments in the Law: Conflicts of Interest in the Legal Profession, 94 Harv. L.Rev. 1244, 1315-34 (1981). While we have held that a subsequent representation violates DR 5-105 if it involves a matter that was part of the former representation, In re Mumford, 285 Or. 559, 591 P.2d 1377 (1979), we have not used the term substantial to define the prohibited relationship between the two matters. Yet a survey of our cases reveals that where we have found a conflict, the former representation was more than incidentally implicated in the subsequent one. For example, in In re Mumford, supra , the accused represented a client in the subsequent representation who was suing a former client to enforce a divorce settlement which the accused himself had drafted. In re Holmes, 290 Or. 173, 619 P.2d 1284 (1980) involved a lawyer who represented a client in her attempts to settle some debts with a creditor, and later represented the creditor in a suit against the original client for a claim involved in the original settlement. In In re Thorp, supra , the accused represented a client in drafting a contract, then later represented a party in an action against the former client on that same contract. See also In re Banks, supra ; In re Brownstein, 288 Or. 83, 602 P.2d 655 (1980) (finding conflict where lawyer for closely held corporation represents shareholder against dominant director). These cases involved such egregious conflicts that we could decide them without searching for the boundary between the acceptable and unacceptable that closer cases such as this require us to locate. Adjectives such as substantial and patent do not help in this search. We prefer an approach that will provide the Bar and its members with more guidance. From our prior cases we can infer that the principle embodied in the concept of significantly related matters consists of two subtests: a. Matter Specific. Representation of the present client in the subsequent matter would, or would likely, inflict injury or damage upon the former client in any matter in which the lawyer previously represented the former client; or b. Information Specific. Representation of the former client provided the lawyer with confidential information the use of which would, or would likely, inflict injury or damage upon the former client in the subsequent matter. The first rule is keyed to a particular matter, while the second is based on particular information. In many instances a single impropriety will violate both these rules. For example, assume that a lawyer represents an employee in drafting an employment contract. In the course of the representation, the lawyer consults with his client and learns that the client has a history of alcohol abuse. Later, the lawyer ceases to represent the employee and is retained by the employer. The former client's alcohol abuse resurfaces and the employer hires the lawyer to assist in terminating the employment. The lawyer, in representing the employer, violates both rules: representation of the employer in the action would, or would likely, damage the former client-employee in the matter of the employment contract; and the former client-employee in the subsequent matter, would, or would likely, be damaged due to the lawyer's possession of confidential information obtained in the earlier representation. In other situations a lawyer may violate one rule without violating the other. For example, a client retains the lawyer to draw up an employment contract. They have a single meeting, at which the client, the lawyer, the client's employer, and the employer's lawyer are present, and the contract is signed. No confidential information is obtained from the client. Later, the lawyer ceases to represent the employee and is retained by the employer, who now wants to terminate the employment. The lawyer, in representing the employer, violates the first rule but not the second. Representation of the employer in the termination would, or would likely, damage the former client in the matter of the employment contract, but because there was no confidential information obtained by the lawyer, there is no such information the use of which would, or would likely, damage the former client in the subsequent matter. But the representation is a violation nonetheless, because it is contrary to the first rule. In retaining a lawyer to perform a task, a client must be able to rely on the fact that a future client of the lawyer will never be able to gain from the lawyer's own lack of diligence or care in the former representation. Again, assume that a client retains a lawyer to draft an employment contract. During consultation, the lawyer learns that the client has a drinking problem. The employment contract is executed, the client is happily employed, and remains a productive employee. Meanwhile, the lawyer ceases to represent the client and is retained by the client's ex-wife, who wants to acquire custody of the children who are living with their father. In accepting this subsequent representation, the lawyer violates the second rule but not the first. It cannot be said that the present representation in the custody matter would, or would likely, damage the former client in the employment contract matter; but any use of the confidential information obtained as a result of the employment contract matter would, or would likely, damage the former client in the custody matter. There is no hint that in drawing up the employment contract the lawyer might not have used all possible diligence and care. However, the confidential information acquired in the apparently unrelated employment contract matter gives the lawyer's present client an unfair advantage in the subsequent matter. This two-part sub-test serves the purposes behind the proscription of subsequent representation adverse to former clients. It protects client confidences from intentional or inadvertent disclosure and promotes the virtue of loyalty. See Legal Background to Rule 1.9, ABA Model Rules of Professional Conduct. Having earlier determined that the first two factors are present, we now examine the facts of this case relative to our two-part test to determine whether the dissolution proceeding and the matters in which the accused formerly represented Mrs. Zingg were significantly related.