Can a law firm that represents a retailer suing a manufacturer over defective goods also represent the retailer's unhappy customers and join them as plaintiffs in the same suit?

Plain-English summary

In November 1980, Law Firm A sued a manufacturer on behalf of a retailer of manufactured homes, alleging breaches of express and implied warranties and intentional damage to the retailer's reputation. The retailer then asked the same firm to represent unhappy purchasers of the allegedly defective homes and to join them as formal parties in the lawsuit. The purchasers had complained but had taken no formal action. The inquiring party stated that, to the best of his knowledge, the purchasers would not have a cause of action against the retailer for which the manufacturer would not ultimately be responsible.

The Commission found an inherent conflict of interest. Maine Bar Rule 3.4(b) prohibits accepting employment if the lawyer's independent professional judgment on a client's behalf will be, or is likely to be, adversely affected. Rule 3.4(d) permits multiple employment only if it is obvious that the lawyer can adequately represent the interests of all parties and each consents after full disclosure. The Commission concluded it was not at all obvious the lawyer could adequately represent each party, and that the lawyer's judgment was likely to be adversely affected.

The Commission identified the points of divergence. Each purchaser had a potential action against the retailer, and possibly a direct action against the manufacturer. Even if the purchasers' claims could be passed through to the manufacturer in whole or part, differences in the ease of collection against the manufacturer versus the retailer, and the risk of the manufacturer's insolvency, could create a direct conflict between the retailer and the purchasers. There might also be differing remedies available against the retailer and the manufacturer, so that one client's interest could go inadequately represented, and advising clients about settlement could be affected by the simultaneous representation. On these facts the Commission concluded an inherent conflict existed that prohibited the firm from representing both classes of plaintiff in that action.

Currency note

This opinion was issued in 1983, 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: Can one firm represent both a retailer and its customers in a product-defect suit against the manufacturer?

A: The opinion concluded no. Each customer has a potential claim against the retailer itself, so the representation carried an inherent conflict the Commission found could not be cured here.

Q: Why wasn't client consent enough to allow the joint representation?

A: The opinion explained that Rule 3.4(d) allows multiple employment only when it is obvious the lawyer can adequately represent all parties and each consents. The Commission concluded it was not obvious the lawyer could adequately represent each party, so the consent route was unavailable.

Q: What specific interests could diverge between the retailer and the purchasers?

A: The opinion pointed to differing remedies against the retailer versus the manufacturer, differences in the ease of collection, the risk of the manufacturer's insolvency, and the handling of settlement advice.

Background and rules framework

The opinion interprets Maine Bar Rule 3.4(b), which bars employment likely to adversely affect a lawyer's independent professional judgment, and Rule 3.4(d), which permits multiple representation only when it is obvious the lawyer can adequately represent all parties and each consents after full disclosure. Together these correspond to Model Rule 1.7 (concurrent conflicts of interest). The analysis turns on whether the customers' potential claims against the retailer, and the parties' diverging remedies and collection prospects, made adequate simultaneous representation impossible.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 (concurrent conflicts of interest)
• Maine Bar Rules 3.4(b), 3.4(d)

See also

• Maine Ethics Op. 44: Injured Claimant and Subrogated Insurer
• Maine Ethics Op. 47: Personal Representative and Beneficiaries
• Maine Ethics Op. 106: Law Firm as Escrow Agent for Both Parties

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=89664

Original opinion text

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

Issued by the Professional Ethics Commission

Date Issued: January 17, 1983

Facts

A person making the inquiry has recited the following facts:

In November of 1980, Law Firm A commenced an action in the Superior Court on behalf of a retailer of manufactured homes against the manufacturer, alleging breaches of express and implied warranties and intentional damage to the retailer's reputation. The retailer has now asked that same law firm to represent unhappy purchasers of the allegedly defective manufactured homes and to join them in the lawsuit as formal parties. To date, the purchasers of the defective homes have made numerous complaints, but have not taken any formal action with respect to the alleged defect. The inquiring party states "to the best of my knowledge the purchasers would not have a cause of action against our client for which the manufacturer would not be ultimately responsible."

Opinion

There is an inherent conflict of interest in representing the retail purchasers with respect to a claim arising out of the alleged defects in the goods where the law firm represents the retailer in a claim against the manufacturer with respect to such defects. Rule 3.4(b) prohibits a lawyer from accepting employment "if the exercise of his independent professional judgment in behalf of a client will be, or is likely to be, adversely affected by acceptance of such employment, etc." Rule 3.4(d) authorizes multiple employment if it is obvious that the lawyer can adequately represent the interests of all parties and each party consents to the representation after full disclosure. It is our opinion that it is not at all obvious that the lawyer can represent adequately the interests of each party and, indeed, it appears that the professional judgment on behalf of a client is likely to be adversely affected by the acceptance of such employment. Each of the purchasers from the retailer has a potential action against the retailer. Each of the purchasers may have a direct right of action against a manufacturer. Notwithstanding that the retail purchasers' claim against the retailers may in whole, or in part, be passed on to the manufacturer, there may be differences in the ease of collection against the manufacturer or the retailer and there may be instances in which the risk of insolvency on the part of the manufacturer may create a direct conflict of interest between the retailers and the retail purchasers.

In addition, there exists the possibility of differing remedies for a consumer, vis-a-vis, the retailer as opposed to the manufacturer. If there are remedies against one which are not available against the other, then the interest of one client may not be adequately represented and the judgment of the lawyer may be affected. In addition, the potential problems in advising clients regarding settlements may very easily be affected by the representation of the retailers. Based upon all of this, it is our opinion that an inherent conflict of interest would exist which would prohibit the representation of both classes of Plaintiff in that action.