May one lawyer represent a group of potentially responsible parties jointly in Superfund cost-allocation negotiations?

Plain-English summary

In litigation under the federal Superfund statute (CERCLA), groups of potentially responsible parties (PRPs) often agree to share cleanup liability under a formula, with parties of similar liability characteristics negotiating as a class. Because the PRPs are jointly and severally liable among themselves, an underlying tension exists over how to allocate costs. The Commission was asked about the propriety of one lawyer representing such a group.

The Commission concluded that the client is the committee or group of PRPs, not its constituent members, and the lawyer's duty of loyalty runs to the group rather than to any individual PRP. It analogized this to representing a creditors' committee in a bankruptcy reorganization, where an underlying conflict exists among the members' individual interests but representing the committee itself poses no conflict.

The Commission held that where the lawyer also represents an individual PRP, Bar Rule 3.4 controls. Before accepting employment from the committee or group, the lawyer must disclose to both the group and the individual PRP-client the possible effect of the multiple representation on the exercise of the lawyer's independent judgment (Rule 3.4(d)), including an outline of any decision-making process the group has adopted or is likely to adopt. If the multiple representation is likely to involve differing interests or to adversely affect the lawyer's independent professional judgment, the lawyer should not accept the employment (Rule 3.4(b), (c)), and should withdraw if circumstances later arise under which the lawyer would not have accepted the engagement had they been known at the outset.

Currency note

This opinion was issued in 1990, before Maine's replacement of the former Maine Bar Rules with the Maine Rules of Professional Conduct (effective August 1, 2009). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Who is the client when a lawyer represents a group of PRPs in a Superfund matter?

A: The opinion concluded the group, or committee, is the client, not its individual members, and the lawyer's duty of loyalty runs to the group.

Q: Does representing a PRP group create a conflict because the members' interests diverge?

A: The opinion concluded representing the group itself poses no conflict, comparing it to representing a creditors' committee in bankruptcy, even though an underlying tension exists among the members over allocation.

Q: What must the lawyer do before also representing an individual member of the group?

A: The opinion held the lawyer must disclose to both the group and the individual PRP the possible effect of the multiple representation on independent judgment, including the group's decision-making process, under Rule 3.4(d).

Q: When must the lawyer decline or withdraw?

A: The opinion concluded the lawyer should decline if the multiple representation is likely to involve differing interests or impair independent judgment, and should withdraw if such circumstances later arise.

Background and rules framework

The opinion interprets Maine Bar Rule 3.4(b) and (c) (declining or avoiding representation of differing interests that may impair independent judgment) and Rule 3.4(d) (disclosure of the effect of multiple representation). These correspond to ABA Model Rule 1.7 (concurrent conflicts of interest) and Model Rule 1.13 (organization as client).

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 (concurrent conflicts of interest); Model Rule 1.13 (organization as client)
• Maine Bar Rule 3.4(b), 3.4(c), 3.4(d)

See also

• Maine Ethics Op. 119: Class Action Against a Government-Agency Payor
• Maine Ethics Op. 109: Lawyer-Mayor and the Firm During Representation

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=89885

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Issued by the Professional Ethics Commission

Date Issued: October 12, 1990

Question

In proceedings under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq. also variously known as "CERCLA" or "Superfund," certain groups of parties, sometimes generators or transporters of hazardous waste, or owners or operators of disposal sites (commonly referred to as "Potentially Responsible Parties," or "PRPs") often agree to share liability upon the basis of a formula. In a substantial number of Superfund cases, the sharing of site clean-up costs is negotiated among groups of PRPs sharing common liability characteristics. Thus, for instance, a group of waste generators who shipped relatively minor amounts of hazardous waste all having comparable levels of toxicity may typically, as a class, be offered an opportunity to settle their liabilities at an advantageous cost per gallon. Under the CERCLA statute these individuals would be jointly and severally liable inter sese, along with the other more (volumetrically) significant contributors to the Superfund site.

The question posed relates to the propriety of multiple representation under these circumstances.

Opinion

It is the committee, or the group of PRPs which is the client; not the constituent PRP members of the group. The attorney's duty of loyalty is to the group, not to the individual PRP. In this sense, representation of such a group is analogous to representation of a creditors committee in a bankruptcy reorganization. There, in the absence of a 100% distribution, an underlying conflict exists with respect to the interests of the individual members of the creditors committee as well as the creditors represented by the committee. However, the representation of the committee itself poses no conflict.

Where the attorney also represents an individual PRP, Bar Rule 3.4 controls. Before accepting employment by a committee or group of PRPs, an attorney must disclose both to the committee or group and to any individual PRP-client the possible effect of such multiple representation upon the exercise of the lawyer's independent judgment. Bar Rule 3.4(d). Such disclosure should include an outline of any democratic or other decision-making process which has been or is likely to be adopted by the committee or group.

If the multiple representation is likely to result in representation of differing interests or to have an adverse effect upon the exercise of the lawyer's independent professional judgment, the attorney should not accept employment. Bar Rule 3.4(b), (c). Similarly, the attorney should withdraw from employment if circumstances later occur under which the attorney would not, had he or she known of the facts at the outset of representation, have accepted employment.