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Ruling puts curbs on lawyers, law firms

Supreme Court Justice Richard C. Bosson wrote the unanimous opinion that could result in limiting the lateral movement of attorneys between law firms. (journal file)
Supreme Court Justice Richard C. Bosson wrote the unanimous opinion that could result in limiting the lateral movement of attorneys between law firms. (journal file)
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A recent New Mexico Supreme Court ruling could limit a lawyer’s ability to move from one firm to another, the court acknowledged in a unanimous opinion written by Justice Richard C. Bosson.

The court held that not only can an individual lawyer be prevented from participating in a case if he or she was once an attorney for the opposing side in that case, but the lawyer’s firm can be ordered to withdraw from the case as well.

Bosson wrote that “our ruling may result in limiting the lateral movement of attorneys between law firms” because firms may be reluctant to lose clients as a result of hiring a lawyer. However, he wrote, the “relationship of an attorney and client” must be “inviolate.”

Roswell attorney Andrew Cloutier, president of the state Board of Bar Commissioners, said the decision is “probably taking a view of the rule that is a little more restrictive to lawyer movement and a little more protective of the perception of impartial justice for the public and for clients than some other states have done.

“But it’s a variation on a rule,” he said. “It’s not a sea change, if you will.”

The state bar is concerned with the issue of protecting clients and the public and making sure the image of lawyers is upheld, Cloutier said.

“At the same time we want to see our members be able to pursue new financial opportunities without stepping on or impinging their former clients’ rights and the perception by the public of fair admini-stration of justice,” he said. “The court seemed to view the facts of the case before it as one where a lawyer’s involvement was so deep no safeguards would have been adequate to protect former clients’ interests.”

The case arose from a 2008 dispute between BNSF Railway Co. and Roy D. Mercer LLC over property Mercer owns south of Socorro. BNSF constructed “large berms, dykes and channels both on and off Mercer’s property designed to divert water away from BNSF’s railroad tracks and through Mercer’s property,” according to the opinion. BNSF claimed a 1936 easement gave it the right to build the structures.

Mercer sued BNSF and its contractor, Gandy Dancer LLC, which was represented by an Albuquerque law firm, Riley, Shane & Keller PC. Mercer hired the Wagner Ford Law Firm, also of Albuquerque, to do some of its legal work.

Lisa Ford, an associate of the Wagner Ford Law Firm, worked on the case for Mercer and attended strategy sessions with Mercer and the company’s lawyers, according to the opinion. Wagner Ford stopped working for Mercer in January 2010, and Lisa Ford left the firm that year. Mercer hired Law & Resource Planning Associates PC to represent it in the property case.

Ford joined the Riley, Shane & Keller firm in 2012 and is still listed on the firm’s website as an attorney.

Law & Resource Planning Associates discovered Ford had joined Riley, informed the firm that Ford’s hiring created a conflict of interest, and said that Riley could no longer represent Gandy Dancer in the case.

Riley responded that it had taken steps to assure that Ford would have no involvement in the case and would not disclose confidential information she had obtained while representing Mercer. The firm asked that Mercer waive any conflict-of-interest claim. Mercer would not waive its claim and asked a state District Court to disqualify the Riley firm.

The court agreed Ford had a conflict of interest but declined to disqualify the Riley firm because Gandy Dancer “would be severely harmed if it had to hire substitute counsel” and Mercer’s “interest was protected” by Riley’s efforts to isolate Ford from the case, Bosson wrote.

The Supreme Court reversed the District Court and ordered it to disqualify the Riley firm.

The justices found that the Rules of Professional Conduct governing the legal profession say that “when a law firm hires a new associate, any conflict the associate would have individually is imputed to the entire firm” because “a firm of lawyers is essentially one lawyer for purposes of the rules governing loyalty to the client.”

“To allow an attorney to change sides in litigation would be contrary to the public’s expectations of undivided loyalty” and to “traditional notions of fairness,” the opinion says.

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