Can one law firm represent a county utilities authority while a partner represents a municipality that belongs to that authority, and does hiring separate special counsel cure the conflict?

Plain-English summary

The Committee was asked whether one partner of a firm could represent a county water and sewer authority while he or another partner represented a municipality that was a member of that authority. In the alternative, it was asked whether such representation could continue if the municipality appointed a third, unassociated attorney to handle its affairs with the county authority, or if the municipality formed a separate municipal authority, represented by a third attorney, to deal with the county.

The Committee drew on its prior opinions. Opinion 29 had held it improper for a municipal attorney to represent a county sewer authority in forming a service contract between them. Opinion 460 had held that disqualifying a firm from litigation and negotiations between its clients (a county authority and a municipality) over their service contract did not remove the impropriety, and that appointing special counsel for the municipality would not insulate the partners against the appearance of a conflict; on the contrary, it would erode public confidence.

Applying those principles, the Committee concluded that the functions of counsel to a county authority necessarily involve inherent potential conflicts when the authority deals with its constituent municipalities. Even if a separate municipal authority were formed to deal with the county, counsel for the municipality would necessarily become concerned, on the client's behalf, in its dealings with that separate authority, so the public perception of an appearance of impropriety would not be removed (citing In re Opinion 415). For those reasons, the Committee did not approve the proposed representations.

Currency note

This opinion was issued in 1982, before New Jersey's adoption of the 2004 revisions to the Rules of Professional Conduct, and predates the 1984 replacement of the Disciplinary Rules by the RPCs. The 2004 revisions abolished the freestanding "appearance of impropriety" standard the Committee applied. 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 Treat this page as historical context, not current guidance.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: Could a firm represent both a county utilities authority and a member municipality through different partners?

A: No. The opinion concluded the firm could not, because counsel to a county authority faces inherent potential conflicts when the authority deals with its member municipalities.

Q: Did appointing separate special counsel for the municipality fix the problem?

A: No. Following Opinion 460, the opinion held that appointing special counsel would not insulate the partners and would erode public confidence rather than cure the appearance of conflict.

Q: What if the municipality formed a separate authority to deal with the county?

A: That did not help either. The opinion reasoned the municipality's counsel would still be drawn into its client's dealings with the separate authority, so the appearance of impropriety remained.

Background and rules framework

The opinion was decided under the conflict and imputation principles then governing New Jersey lawyers in government representation, before the 1984 adoption of the Rules of Professional Conduct, applying the appearance-of-impropriety standard. In current terms the analysis maps onto RPC 1.7 (concurrent conflicts) and RPC 1.10 (imputation of one partner's conflict to the firm).

Citations and references

Rules of Professional Conduct:

• MR 1.7 / NJ RPC 1.7 (concurrent conflicts of interest)
• MR 1.10 / NJ RPC 1.10 (imputation of conflicts within a firm)

Cases:

• In re Opinion 415, 81 N.J. 318 (1979) (counsel may not serve both a municipality and its county)

Other opinions cited:

• NJ ACPE Opinion 29, 87 N.J.L.J. 106 (1964) (municipal attorney may not represent a county sewer authority in their service contract)
• NJ ACPE Opinion 460, 106 N.J.L.J. 205 (1980) (special counsel does not insulate the firm or cure the appearance of conflict)

See also

• NJ ACPE Op. 547: Sewerage Authority Counsel Whose Partner Sues the Authority
• NJ ACPE Op. 501: Assistant County Counsel as Municipal Prosecutor
• NJ ACPE Op. 504: Former Comp-Defense Counsel Bringing Claims Against the Municipality

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp499-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

109 N.J.L.J. 449, May 27, 1982

OPINION 499

Conflict of Interest County Utilities Authority Municipality-Member of Authority Partners Separately Representing Both

We are asked whether one partner of a firm may represent a county water and sewer authority while he or another partner represents a municipality which is a member of that authority. In the alternative we are asked whether such representation may continue if the municipality appoints a third attorney, not associated with these partners, to handle its affairs with the county authority. Further, we are asked whether the above representations may be proper where the municipality forms a separate municipal authority to deal with the county and a third attorney, not associated with these partners, is engaged to represent that separate municipal authority.

In our Opinion 29, 87 N.J.L.J. 106 (1964), we held that it was improper for a municipal attorney to represent a county sewer authority in the formation of a service contract between them. In our Opinion 460, 106 N.J.L.J. 205 (1980)(petition for review denied by New Jersey Supreme Court December 18, 1980), we held that the disqualification of a firm from litigation and from negotiations between its clients, a county authority and a municipality, over their service contract did not remove the impropriety. In the same opinion we also held that the appointment of special counsel for the municipality for matters relating to the county authority would not "insulate the partners" against the appearance of a conflict of interest; that, on the contrary, the appointment of special counsel would erode public confidence.

We believe that the functions of counsel to a county authority necessarily involve inherent potential conflicts when an authority deals with its constituent municipalities. Even if a separate municipal authority were to be formed to deal with the county, of necessity counsel for the municipality would become concerned on behalf of his client in its dealings with the separate municipal authority. The public perception of an appearance of impropriety would not be removed. See In re Opinion 415, 81 N.J. 318 (1979). Hence and for the reasons stated, we do not approve the proposed representations.