Barkley v. City of Detroit
Barkley v. City of Detroit
Opinion of the Court
This is an action for declaratory judgment
Plaintiffs appeal as of right from the trial court’s partial denial of their motion for summary disposition under MCR 2.116(C)(10). Defendant does not cross appeal. We affirm in part and reverse in part.
The Detroit Charter, § 6-403 provides that, "[u]pon request, the corporation counsel may represent any officer or employee of the city in any act or proceeding involving official duties.”
In order to be eligible for city-provided counsel and reimbursement, an employee who is sued must follow the procedure outlined in Detroit Code, art XI, § 13-11-3. In pertinent part, that procedure requires that notice be provided to the corporation counsel and that a written request for an attorney be submitted to the employee’s department head. The department head is required to transmit the request to the corporation counsel, who then, under Detroit Code, art XI, § 13-11-4, prepares a report and recommendation for the city council. Under Detroit Code, art XI, § 13-11-5, the city council is required to consider the report and recommendation and to determine whether the suit arises out of or involves the good-faith performance of the employee’s official duties and whether the employee shall be represented by the corporation counsel.
Plaintiffs argue that as soon as the city’s corporation counsel (acting through the city’s law department) decides to recommend to the city council that no representation be provided, a conflict of interest arises. This conflict, they argue, requires that the corporation counsel withdraw from representing them in the underlying suit. Thus, in order to meet its obligations under the city code and the collective bargaining agreement, the city must pay for plaintiffs to be represented by attorneys of their own choosing. We disagree in part.
In this case, seven of the nine plaintiffs were
The trial court held that there is indeed a conflict of interest that arises when the city council refuses to provide representation and an employee seeks to overturn that decision through arbitration. That conflict arises because the corporation counsel would be representing the employee in the underlying suit while at the same time representing the city in the arbitration proceeding, in effect, arguing for the employee in one forum and against the employee in another. The parties do not challenge this determination, which we agree is a correct holding.
The trial court also held that, once a conflict arises, the city should pay for the employee to be represented in the underlying suit by independent counsel. However, the court concluded that such independent counsel was to be chosen by the city, not by the employee. The court further found that no conflict of interest existed before an adverse determination by the city council. Plaintiffs take issue with these last two determinations.
Plaintiffs, by virtue of being represented by the city’s corporation counsel in the underlying suits, are the corporation counsel’s clients. See Atlanta Int’l Ins Co v Bell, 438 Mich 512, 520-521; 475 NW2d 294 (1991) (insured is the client of the
MRPC 1.7(a) provides:
A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the attorney reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
MRPC 1.7(b) provides:
[A] lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation.
[A] lawyer shall not knowingly:
(1) reveal a confidence or secret of a client;
(2) use a confidence or secret of a client to the disadvantage of the client; or
(3) use a confidence or secret of a client for the advantage of the lawyer or of a third person, unless the client consents after full disclosure.
See also MRPC 1.6(c)(1). Further, "[a] lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client consents after consultation, except as permitted or required by Rule 1.6 or Rule 3.3.” MRPC 1.8(b).
Also relevant to this case is MRPC 1.8(f), which provides:
A lawyer shall not accept compensation for representing a client from one other than the client unless:
(1) the client consents after consultation;
(2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and
(3) information relating to representation of a client is protected as required by Rule 1.6.
Additionally,
A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients . . . unless each client consents after consultation, including disclosure of the existence and nature of all the claims . . . involved and of the participation of each person in the settlement. [MRPC 1.8(g).]
The Supreme Court Rules Concerning the State
The Ethics Committee has said that the conflict of interest rules are " 'a frank recognition that, human nature being what it is, a dual relationship involving adverse or conflicting interests, constitutes enormous temptation to take advantage of one or both parties to such relationship’ ” and that " '[t]he purpose of [the conflict of interest rules] is to condemn the creation and existence of the dual relationship instead of merely scrutinizing the results that may flow therefrom.’ ” Formal Opin
An attorney owes undivided allegiance to a client and usually may not represent parties on both sides of a dispute. For example, in Olitkowski v St Casimir’s Savings & Loan Ass’n, 302 Mich 303, 309-310, 325-326; 4 NW2d 664 (1942), a clear conflict of interest was found where an attorney representing an estate advised its administratrix to invest in a certain savings and loan association that he also represented, without disclosing that the investment was illegal. In Bd of Trustees of the Policemen & Firemen Retirement System v Detroit, 143 Mich App 651, 655-656; 373 NW2d 173 (1985), it was held that a city may not use its law department to meet its obligation to provide counsel to a retirement fund where the fund was suing the city for failure to make contributions and the city was asserting that it had no duty to pay and was itself being represented by its law department. Similarly, where a fire fighter was charged with reckless driving after he was involved in an accident on the way to a fire, the city could not satisfy its statutory obligation to provide him with an attorney by assigning an attorney from its law department where another attorney from its law department was prosecuting the case. Formal Opinion 109 (October 1947). In that situation, it was concluded that the city could select an independent attorney, provided the attorney was not barred from the case by ethics considerations, to satisfy its statutory obligation to provide counsel to the fire fighter in question.
It is also clear that an attorney may only undertake to represent a new client against a former client where all business ties with the former client have been severed, where the subject matter of the current representation is not substantially
Where a City Attorney rendered advice on a matter to members of City Council who later sued the City over the same matter, the City Attorney may defend the City in the case only if he did not gain and did not appear to gain confidential information from the council members involved and if his contact with them would not affect or appear to affect his independent professional judgment on behalf of the City. [Informal Opinion CI-335 (January 16, 1978).]
It is less clear what is allowed when the parties are not in direct conflict. Thus, the committee has concluded:
Where a city’s law department has formerly opined on a matter in controversy between the Mayor and the City Council of that City, the City law department may not represent both the Council and the Mayor in litigation, (declaratory judgment action) to resolve the controversy, even if both adverse parties consent to the dual representation. [Informal Opinion CI-811 September 17, 1982).]
However, the Ethics Committee has also concluded that while a city attorney who advises the city on labor relations matters was barred from sitting on an arbitration panel that reviews employee griev-
At a minimum, it becomes clear to us from our review of the pronouncements that have been made in this area and our review of the Rules of Professional Conduct that an attorney from the city’s law department may not first interview an employee concerning an underlying suit, thus obtaining confidential information, and then use that information to argue to the city council that no representation should be provided in the underlying case because the particular employee was not acting in good faith within the scope of employment. It is quite clear that such conduct would be a prohibited use of confidential information obtained from one client for the benefit of another client. MRPC 1.6(b); MRPC 1.8(b). Thus, if this were the only issue, we would now consider whether a different attorney from the city’s law department, properly screened from any exposure to confidential information obtained from an employee, could argue to the city council that no representation should be provided in the underlying case. However, because the city’s law department represents both the city and the particular
The ethical issue presented is whether the representation of these individual plaintiffs by an attorney from the city’s law department "may be materially limited by the lawyer’s responsibilities” to the city, given that these plaintiffs obviously do not wish to consent to such dual representation. See MRPC 1.7(b). In such a situation, the parties seem to agree that an actual conflict is unlikely because access to the party perceived to have the deeper pockets would be obtained by showing that the employee acted within the scope of employment, thereby imposing liability on the city. However, there is a danger that the evidence will show otherwise and liability will rest solely on the individual plaintiff. Because of that danger, we agree with the Ethics Committee that,
[although the [Rules of Professional Conduct] would not automatically prohibit a city attorney from representing both the city and the police officers in a suit brought against both, alleging police brutality, the best policy would be for the city attorney to decline representation of the police officers because of possible conflicts that may arise under the [Rules of Professional Conduct] which could cause harm to either client because of necessity of the attorney withdrawing from representation of one or both parties at a critical stage of the proceedings. [Informal Opinion CI-475 February 18, 1980)].
We also note that Detroit Code, art XI, § 13-11-3(4) requires the plaintiff employee to consent to any city-approved settlement of the underlying suit as a condition of city-paid representation. However, a lawyer representing both the plaintiff
Additionally, Detroit Code, art XI, § 13-11-3(3) imposes upon employees an obligation to cooperate with the corporation counsel in defending the underlying suit by attending hearings, giving evidence, and procuring the attendance of witnesses. Further, the section prohibits employees from settling, paying for, or incurring any costs, except at their own expense. These two provisions are in at least potential conflict with MRPC 1.8(f)(2), which prohibits a lawyer from accepting compensation from a third party unless "there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship.” See People v White, 127 Mich App 65, 67-68; 338 NW2d 556 (1983).
As a whole, the various conflicting or potentially conflicting obligations reviewed above lead us to conclude that an attorney with the city’s law department reasonably could not believe that representation of plaintiffs while also representing the city would not be materially limited or adversely affected by the attorney’s preexisting duties to the city. See MRPC 1.7(b). Therefore, such dual representation should not be undertaken._
The general rule is that "[wjhile lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.9(a) or (c), or 2.2.” MRPC 1.10(a). While government lawyers are not mentioned in the rule, it appears that, at least in some circumstances, this rule applies to them.
It might be argued that a so-called "Chinese wall” might be erected such that a disqualified attorney would have neither any role in the case nor any contact with the attorneys actually involved in the case, so that the result would be the same as if two separate firms were involved. But see People v Doyle, 159 Mich App 632, 646; 406 NW2d 893 (1987) (entire prosecutor’s office disqualified where supervisory attorney with personal interest in case was not immediately shielded from any involvement).
The present case, however, does not involve a particular attorney with a particular disqualification. Rather, because all attorneys in the department represent the city and owe it the duties discussed above, none of them are free to also represent an individual employee once a conflict arises. See MRPC 1.10(a). For this purpose, we find that the department should be considered a law firm.
We, therefore, hold that, assuming that the city law department is representing the city in the underlying suit, no attorney from the city law department may also represent plaintiffs in the
Where there is an obligation to provide counsel, it is implied that independent and unbiased counsel will be provided. See Bd of Trustees, supra at 655-656. However, there appears to be some possible confusion regarding when the city will be allowed to choose the attorney who will fulfill the city’s contractual obligation to provide representation. Thus, in the Bd of Trustees case, where the city was being sued by a retirement fund and there were conflicting statutory sections — one allowing the fund to choose its own counsel and one requiring the city to appoint counsel for the fund —this Court found that the fund rather than the city should be allowed to choose. We note, however, that in Formal Opinion 109 (October 1947) the Ethics Committee concluded that where a statute required the city to provide an independent and unbiased lawyer for a fire fighter charged with driving recklessly during the course of his employment, the city should be allowed to select an attorney to represent him even though the fire fighter was being prosecuted by the city’s corporation counsel.
In the case at bar, there is no statute that even arguably gives plaintiffs the right to select their own counsel at city expense. Also, unlike in the Bd of Trustees case, there is no direct conflict here, because these plaintiffs are being sued with the city, not by the city. We therefore hold that the city may select plaintiffs’ counsel in the underlying cases as long as it selects an independent and
B. A. Jasper, J., concurred.
Contrary to the dissent’s argument, plaintiffs are not suing to enforce the Michigan Rules of Professional Conduct or to collect damages for the violation of those rules. Rather, plaintiffs seek declaratory judgment interpreting the Detroit Code in light of the rules.
Under § 6-401 of the charter, the corporation counsel is the appointed head of the city law department.
The parties seem to assume that the discussion of the reports and recommendations envisioned by these sections are to be done in public sessions of the city council. Although this was not an issue decided below, given the potential for the dissemination of information that might hurt the employees in the underlying cases, we wish to alert the parties to the possibility that such disclosure may not be
We disagree with the dissent’s view that the collective bargaining agreement should be found to have waived any conflict of interest existing in this case. It is plaintiffs who are being represented by the city attorney — not the union — and, therefore, only plaintiffs are the lawyer’s clients. There is no authority in the rules of professional conduct that would allow a nonclient such as the union to waive a conflict of interest on behalf of a client. In fact, not even those who pay a lawyer on behalf of a client are allowed to interfere in the relationship between lawyer and client. See MRPC 1.8(f).
Under Article VI of the Bylaws of the State Bar of Michigan, the Attorney Discipline Board, the Attorney Grievance Commission, and the Judicial Tenure Commission are supervised by the Grievance Committee, not by the Committee on Professional and Judicial Ethics.
For example, the city could refuse to pay for a plaintiffs attorney or could refuse to indemnify a plaintiff who refused to settle the underlying suit.
We do not decide whether different departments of, for example, the Attorney General’s office, may represent parties on both sides of a dispute. Although some references were made in this regard, that is not an issue before us.
Dissenting Opinion
(dissenting). The majority adopts the position that it is appropriate to make a judicial finding that there was a conflict of interest inherent in representation of both plaintiff police officers and the City of Detroit by an attorney from the office of the Detroit corporation counsel. In taking this position, the majority relies upon the Michigan Rules of Professional Conduct to establish that there was, in fact, a conflict of interest. I disagree with the majority’s analysis on the grounds that there was no jurisdiction for the trial court to hear this matter and that, if there was a conflict of interest, it was waived by the plaintiffs.
MRPC 1.0(b) specifically disclaims the creation of a cause of action based on its provisions:
The rules do not, however, give rise to a cause of action for enforcement of a rule or for damages caused by failure to comply with an obligation or prohibition imposed by a rule. In a civil or criminal action, the admissibility of the Rules of Professional Conduct is governed by the Michigan Rules of Evidence and other provisions of law.
There is then no jurisdiction for plaintiffs’ cause of action based on the mrpc. This is reinforced in the comment to MRPC 1.13 as follows:
Governmental Agency
The duty defined in this rule applies to governmental organizations. However, when the client is*211 a governmental organization, a different balance may be appropriate between maintaining confidentiality and assuring that the wrongful official act is prevented or rectified because public business is involved. In addition, duties of lawyers employed by the government or lawyers in military service may be defined by statutes and regulations. Therefore, defining precisely the identity of the client and prescribing the resulting obligations of such lawyers may be more difficult in the government context. In some circumstances, it may be a specific agency, but in others it may be the government as a whole. For example, if the action or failure to act involves the head of a bureau, the department of which the bureau is a part may be the client for purpose of this rule. With these qualifications, the lawyer’s substantive duty to the client and reasonable courses of action are essentially the same as when the client is a private organization.
This limitation in the use of the mrpc is never addressed by the majority. Further, in none of the cases cited does a court review a conflict of interest except where a claim of conflict is raised in an existing lawsuit by the opposing party. There simply are no cases of which I am aware, nor I assume of which the majority is aware, where a party seeks conflict relief concerning the party’s own lawyer. That person’s remedy is to discharge the attorney, bring a grievance, or, perhaps, sue for malpractice.
Even if there is a conflict of interest over which the trial court could take jurisdiction, under MRPC 1.7(b)(2), a client can consent, after being made aware of a potential conflict, to representation by the lawyer having the potential conflict of interest. Indeed, MRPC 1.13(e) expressly anticipates dual representation, and, as the above com
Detroit Charter, § 6-403, and Detroit Code, art XI, §§ 13-11-1, 13-11-2, 13-11-3, 13-11-4, and 13-11-5, as quoted by the majority, outline the various ordinances providing for the method of representing an employee who is sued while simultaneously determining whether the city should cover that person, i.e., whether the incident for which the employee is being sued arises out of or involves the performance in good faith of the official duties of the officer or employee. In this regard, § 28 of the collective bargaining agreement says:
The city will continue to defend and indemnify employees in accordance with Section 13-11-3 of the 1984 municipal code and all practices and procedures related thereto, in effect July 1, 1977, except that such defense and indemnification is mandatory upon a ñnding that the claim, demand or suit against the employee arises out of or involves the performance in good faith of the official duties of the employee. A contrary determination by the city council is not ffnal and binding as provided by the code but is subject to review by an arbitration panel under Article 8 of this agreement. Pending a ffnal determination of whether or not the employee is entitled to defense and indemnification by the city, the city shall promptly undertake such defense on behalf of such employee. [Emphasis added.]
Here, the union entered into a contract to have done exactly what was done.
This is so because an employee is bound by the contract that his union has negotiated for him. Farmington Hills v Farmington Hills Police Officers Ass’n, 79 Mich App 581, 589; 262 NW2d 866 (1977), holds that the public employee relations act (pera), MCL 423.201 et seq.; MSA 17.455(1) et seq., accords broad bargaining authority to the designated representative of the police officers. Further, our Michigan courts have held that the pera should be interpreted consistently with the National Labor Relations Act (nlra), 29 USC 151 et seq., noting that federal case law interpreting the nlra broadly construes the designated representative’s authority.
The statute [29 USC 159] contemplates the making of agreements by representatives of the employees, not by the employees themselves, giving "statutory approval to the philosophy of bargaining as worked out in the labor movement in the United States.” [NLRB v Darlington Veneer Co, 236 F2d 85, 89 (CA 4, 1956), quoted in Farmington Hills, supra, p 590.]
*214 Congress has given unions wide authority and great discretion to reconcile the competing interests of the employees whom they represent so that they might speak with one voice when they confront management at the bargaining table. . . . Congressional validation of collective action, however, necessarily involves extinguishing many of the contract and economic rights belonging to union members and, instead, vesting the power to act in their behalf with their chosen representative, the union. [Crenshaw v Allied Chemical Corp, 387 F Supp 594, 598-600 (ED Va, 1975), quoted in Farmington Hills, supra, p 590.]
Here, the collective bargaining agreement has extinguished plaintiffs’ right to challenge the conflict in this case, and I accordingly would hold that plaintiffs are bound, just like the Farmington Hills police officers were, by the contract that their union negotiated for them.
An employee may attack a contract as being in violation of a union’s duty of fair representation. However, a union’s activities in this regard only can be held to be arbitrary, and as such to constitute a breach of the duty of fair representation, if the union’s behavior is so far outside a wide range of reasonableness as to be irrational. Air Line Pilots Ass’n, Int’l v O’Neill, 499 US 65; 111 S Ct 1127; 113 L Ed 2d 51 (1991). Such a standard could not be met here.
In summary, I would hold that the trial court had no authority to hear this matter, but that, even if it did, it was bound to find that any conflict of interest was waived by the union contract (assuming, upon remand, it is determined that the procedures for handling conflicts were the same in 1977 as those exercised in this case).
Notable here is the fact that the union, by way of negotiation,
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