Opinion ID: 2383565
Heading Depth: 1
Heading Rank: 2

Heading: Macdonald Page and the Substantially Related Test

Text: Interpretation and application of the rule against successive representation, embodied in M.Bar. R. 3.4(d)(1)(i), is controlled by our opinion in Adam v. Macdonald Page & Co., 644 A.2d 461 (Me.1994). In applying the first prong of M.Bar R. 3.4(d)(1), the trial court's determination that there is no substantial relationship between t[he present litigation and the prior representation] is factual and reviewable only for clear error. Id. at 462-63. In determining whether there is a substantial relationship between the prior and present representation, we adopted the test articulated by the Seventh Circuit in Novo Terapeutisk Lab. A/S v. Baxter Travenol Lab., 607 F.2d 186, 195 (7th Cir.1979): Initially, the trial judge must make a factual reconstruction of the scope of the prior legal representation. Second, it must be determined whether it is reasonable to infer that the confidential information allegedly given would have been to a lawyer representing a client in those matters. Finally, it must be determined whether that information is relevant to the issues raised in the litigation pending against the former client. Macdonald Page, 644 A.2d at 463. In the present case, the trial court reviewed affidavits from Singer and Goldstein, and also from Thatcher, the president of CCSI, plus copies of the lease agreement and the loan from Casco. There was ample evidence for the court to conclude that the work performed by Goldstein in setting up the two smaller entities, and devising the lease-back plan, was substantially related to the parties' respective duties under the lease and loan agreements. Considerations concerning corporate structure and tax planning are rarely completely unrelated to considerations of corporate liability and finance. We find no error in the trial court's conclusion that the prior representation was substantially related to the pending litigation. Associates argues in the alternative that the Macdonald Page test is inapplicable here, because there can be no expectation of keeping client confidences when one attorney or law firm represented three separate legal entities in a joint venture. Associates cites Allegaert v. Perot, 565 F.2d 246 (2d Cir.1977) in support of its position: [B]efore the substantial relationship test is even implicated, it must be shown that the attorney was in a position where he could have received information which his former client might reasonably have assumed the attorney would withhold from his present client. Id. at 250. The Allegaert rule, however, has been strongly criticized in several jurisdictions and we decline to adopt it. Although it is true that CCSI could not have reasonably expected that Goldstein would keep any secrets from JBI or from Associates when he represented all three, the rule against subsequent adverse representation goes beyond simply protecting attorney-client communications. The rule addresses the reasonable expectations of the average client that his attorney, who is both counsellor and confidante, will remain loyal. The rule protects the integrity of the judicial system and the public's view of the legal profession; it is necessary to counteract the perception of attorneys as simply hired guns, who can and do change sides at will, subject only to the highest bidder. Accord, Koch, 798 F.Supp. at 1534 ([T]he prophylactic protection offered by [the rule against successive representation] extends beyond the preservation of confidential information. It also maintains public confidence in the system and, more importantly, safeguards a client's `right to expect the loyalty of his attorney.' ... A client would feel wronged if an opponent prevailed against him with the aid of an attorney who formerly represented the client in the same matter.) (citations omitted). See also, Rosman v. Shapiro, 653 F.Supp. 1441, 1446 (S.D.N.Y. 1987) ([T]he well-settled ethical principles that `[w]hen the interests of clients diverge and become antagonistic, their lawyers must be absolutely impartial between them, which... usually means that he may represent none of them.') (citations omitted). The rule against successive adverse representation protects all of these important concerns, and a broader rule would defeat other interests. If an attorney were barred from ever acting in an adversarial position to a former client, on any matter, this would restrict the public's freedom of choice in attorneys and would effectively prohibit attorneys from ever changing firms. In addition, such a rule would be subject to abuse by clients: a large, powerful corporation could hire every attorney in a community, each to perform some minute piece of work, and thus forever bar those attorneys from working on behalf of that corporation's adversaries. For these reasons, the rule against successive adverse representation requires that the movant satisfy at least one of the prongs of M.Bar R. 3.4(d)(1).