Conflict of Interest - The Rules, The Risks & Common Sense

CONFLICT OF INTEREST - THE RULES & THE RISKS & COMMON SENSE

Robert C. Bonsib, Esq. & Megan E. Coleman, Esq.

In Alexis v. State (COA filed 3-24-14, 2014 WL 1159666) we are reminded and cautioned regarding the need to be vigilant in circumstances where current or prior representation of one client may create an actual or potential conflict-of-interest with respect to the representation of another client.

Maryland Rules of Professional Conduct Re: Conflicts of Interest

As always, we first review the applicable Rules.

Rule 1.7 of the Maryland Rules of Professional Conduct (MRPC) Rule 1.7 - Conflict of Interest: General Rule prohibits, in pertinent part, the representation of a client where such representation involves a conflict of interest and states that a conflict exists where the representation of one client will be directly adverse to the representation of another or where there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibility to another client or a former client.

While Rule 1.7 also provides circumstances under which one may, despite a conflict of interest, represent a client. In a criminal case, representation by the criminal defense attorney is most likely not going to be possible despite the exceptions available under the Rule.

MRPC 1.8 - Conflict of Interest: Current Clients: Specific Rules - provides specific rules regarding conflict of interest. Most applicable to representation of a criminal client is provision (b) which prohibits a lawyer from using information relating to the representation of one client to the disadvantage of the other client unless the other client gives informed consent, except as permitted by the rules, and provision (g) which prohibits a lawyer who represents two or more clients from participating in an aggregated agreement as to guilty or nolo contender pleas, unless each client gives informed consent, in writing signed by the client, or confirmed on the record before the court which shall include in the disclosure the existence and nature of all the pleas involved and the participation of each person in the settlement.

The application of 1.8 further cautions that if the Rule applies to one attorney in a firm, it applies to all in the firm.

MRPC 1.9 - Duties to Former Clients - prohibits the representation of one person in a matter in which the lawyer has formerly represented another person in the same or substantially related matter in which that person's interests are materially adverse to the interest of the former client unless the former client gives informed consent, confirmed in writing. It further prohibits a lawyer from using information acquired during the prior representation to the disadvantage of the former client, unless the information has become generally known.

MRPC 1.10 - Imputation of Conflicts of Interest - generally imputes to all members of a firm the conflict of interest that exists with respect to any member of a firm.

MRPC 1.11 - Special Rules relating to Conflicts of Interests for Former Government Officers and Employers - deals with issues which are not specifically discussed in this article, but should be reviewed by criminal defense counsel who may previously have worked for the government, particularly in a prosecutor's office, where the subject matter of the current representation may have been an active matter while the lawyer was employed in the prosecutor's office.

For conflicts within the public defender's office, see Duvall v. State, 399 Md. 210 (2007) (holding that each district office of the public defender should be treated as a private law firm for conflict of interest purposes).

The Circumstances in Alexis

Alexis was convicted in two consolidated trials of second degree murder, robbery with a dangerous weapon, use of a handgun in the commission of a crime of violence, conspiracy to commit theft, theft, and solicitation to obstruct justice. Alexis was sentenced to a total of 140 years of incarceration.

Prior to the trials, the trial court disqualified Alexis' counsel of choice from continuing to represent him on the basis that he had previously represented a key State's witness, Amadu Sulamon Jalloh, in an unrelated and earlier criminal matter. Jalloh refused to waive any conflict of interest. Jalloh contended that he had overheard Alexis confess to the killing while they were both incarcerated at the Prince George's County Detention Center.

Several months after Alexis' lawyer had entered his appearance, the State filed a motion to strike the appearance of Alexis' lawyer. The State argued that because Jalloh was a material witness in the homicide case and because Jalloh's credibility would be a significant issue in the prosecution, Alexis' lawyer possessed confidential information acquired during his representation of Jalloh, information which would make it a conflict of interest for Alexis' lawyer to cross-examine Jalloh. Additionally, after representation of Jalloh had been terminated, Jalloh had filed a complaint against that same lawyer with the Attorney Grievance Commission.

While Alexis' lawyer maintained that the representation of Jalloh was brief and for a limited period of time and that the information that had been obtained during his prior representation of Jalloh had become generally known, the trial court rejected that position.

Additionally, Alexis' lawyer suggested that effective safeguards during Alexis' trial could be implemented that would eliminate any conflicts associated with his prior representation of Jalloh. He suggested that another lawyer would enter his appearance as co-counsel for the limited purpose of cross-examining Jalloh, arguing that that procedure would create a "Chinese Wall" to effectively isolate any conflict of interest. The trial court rejected that suggestion as "folly."

The trial court granted the State's motion to strike defense counsel's appearance concluding that there was a significant conflict of interest and a conflict with defense counsel's duty of loyalty to Jalloh.

The COA concluded that the trial court's disqualification of defense counsel was not an abuse of discretion and reviewed the standards and principles pertinent to deciding conflict of interest issues in these circumstances.

"While the right to select and be represented by one's preferred attorney is comprehended by the Sixth Amendment, the essential aim of the Amendment is to guarantee an effective advocate for each criminal defendant rather than to ensure that a defendant will inexorably be represented by lawyer whom he prefers." Wheat v. U.S., 486 U.S. 153, 159 (1988) (citing Morris v. Slappy, 461 U.S. 1, 13-14 (1983)). "Accordingly, the right of a defendant to counsel of choice is 'circumscribed in several important respects.'" Alexis, 2014 WL 1159666 at *8 (citing Wheat, 486 U.S. at 159).

The COA noted that the trial court "must be allowed substantial latitude in refusing waivers of conflict of interest not only in those rare cases where an actual conflict may be demonstrated before trial, but in the more common cases where a potential for conflict exists which may or may not burgeon into an actual conflict as the trial progress." 2014 WL 1159666 at *8 (citing Wheat, 486 U.S. at 163). The COA further reviewed the observation in Wheat that these decisions have to be made, not with the benefit of hindsight after the trial has taken place, but in the "murkier pre-trial context when relationships between parties are seen through a glass, darkly." Id. at *9 (citing Wheat, 486 at 162-63). The COA continued that "[t]hese imponderables are difficult enough for a lawyer to assess, and even more difficult to convey by way of explaining to a criminal defendant untutored in the niceties of legal ethics." Id.

Reviewing what the Court addressed in State v. Goldsberry, 419 Md. 100 (2011), the COA again reviewed what is required of a trial court in this circumstance, that is "that the proper balance is struck when 'the [trial] court recognizes a presumption in favor of the defendant's counsel of choice,' which 'may be overcome not only by a demonstration of actual conflict but by a showing of a serious potential for conflict.'" Goldsberry, 419 Md. at 120 (quoting Wheat, 486 U.S. at 164). The trial court is commanded to "conduct a hearing on the matter" and to "scrutinize closely the basis for the claim" of conflict of interest and "make evidence-based findings to determine whether there is 'actual or serious potential for conflict' that overcomes the presumption the defendant has to his or her counsel of choice." Goldsberry, 419 Md. at 123. The findings should be based upon factors such as (1) "the likelihood that defense counsel will have divided loyalties;" (2) "the State's right to a fair trial;" (3) "the appearance of impropriety should the jury learn of the conflict;" and (4) "the likelihood that permitting defense counsel's continued representation 'will provide grounds for overturning the conviction.'" Goldsberry, 419 Md. at 124 (quoting Illinois v. Ortega, 209 Ill.2d 354 (2004)).

The COA in Alexis concluded that the trial court gave satisfactory consideration to these factors when it concluded that the conflict was a significant one that could not be cured and that the risk of conflict outweighed Alexis' right to counsel.

A Sampling of Cases Discussing Conflict of Interest Issues

State v. Goldsberry, 419 Md. 100 (2011)

Goldsberry's conviction was reversed because the trial counsel disqualified one of Goldsberry's three trial counsel without developing a factual record to support its decision, and that decision denied Goldsberry his Sixth Amendment right to counsel of his choice.

The disqualified lawyer (third lawyer) had spoken to Goldsberry's co-defendant prior to the trial and this fact was brought to the attention of the trial court by the co-defendant's attorney. The trial court concluded that the third lawyer had not conveyed the substance of any conversations he had with the co-defendant to other counsel and that there was nothing wrong with the third lawyer having conversations with the co-defendant at a time prior to the co-defendant's being represented by counsel. Nevertheless, the trial court initially permitted the third lawyer to remain at trial table but was prohibited from revealing anything related to his earlier conversation with the co-defendant. The trial court was then advised that one of its witnesses told the State that she had been "coached" by Goldsberry and the third lawyer before her grand jury testimony. With that additional information, the trial court then ordered the third lawyer not to participate in the trial and reversed its earlier decision ruling that the third lawyer would not be permitted to sit at trial table. At the close of the case, defense counsel moved for a mistrial raising the Sixth Amendment issue noting that because the third lawyer had been excluded from the courtroom and listed as a possible witness (thus implicating the rule on witnesses and barring remaining trial counsel from discussing what had occurred during the trial with the third lawyer), the third lawyer had been barred from any participation in the trial or consultation with other defense counsel. The motion was denied.

The COA ordered a new trial. It did not hold that there were no reasons to disqualify the third lawyer, but rather, that "before a trial court is permitted to disqualify a criminal defendant's privately obtained counsel (regardless of whether counsel is the defendant's only attorney or one of several on the defense team), the court must conduct a hearing on the matter, 'scrutinize closely the basis for the claim,' and make evidence-based findings to determine, based on factors...whether there is 'actual or serious potential for conflict' that overcomes the presumption the defendant has to his or her counsel of choice." Id. at 123 (internal citations omitted). "The record must reflect that the trial court contemplated relevant factors in conducting the test that balances the right to one's counsel of choice against the necessity to uphold 'the ethical standards of the profession' that ensure that 'legal proceedings appear fair to all who observe them.'" Id. at 124 (citing Wheat, 486 U.S. at 160).

United States v. Tatum, 943 F.2d 370 (4th Cir. 1991)

Tatum was convicted of bankruptcy fraud. The conviction was reversed based upon a finding that Tatum was denied effective assistance of counsel because of multiple conflicts of interest.

Tatum retained an attorney (original counsel) to represent him during the grand jury stage of the investigation. Original counsel also represented a grand jury witness during the investigation, and another attorney in original counsel's office who testified before the grand jury. Additionally, there was a third attorney in original counsel's office that had provided Tatum with bankruptcy advice, advice that Tatum contended he relied upon when he completed the bankruptcy schedules that were part of the basis for the subsequent criminal prosecution.

The government became aware of the potential conflicts and informed original counsel of its concerns. Several months prior to the trial, another attorney (trial counsel), not a member of original counsel's firm, entered his appearance and took the lead at the trial. However, original counsel sat at the trial table and provided assistance to trial counsel. The two attorneys who were members of original counsel's firm and the grand jury witness were all called as witnesses during the trial of the case.

The Fourth Circuit noted that a mere possibility of a conflict is not sufficient and that the Sixth Amendment is implicated only when the representation of counsel is adversely affected by an actual conflict of interest. Where there is an actual conflict of interest and the conflict adversely affects counsel's performance in the defense of the defendant, prejudice to the defendant is presumed and a new trial must be ordered and is never considered harmless error.

Here, the Fourth Circuit found multiple irreconcilable conflicts on the part of original counsel when he represented Tatum and the grand jury witness who was also under investigation. Each shared attorney-client information with original counsel with the reliance that that information would not be used against each respective client. This was aggravated by the fact that two law partners of original counsel were identified as witnesses, one for the government and one for the defense. As an example, the court noted that when Tatum took the position that he relied upon the advice of original counsel's law partner in preparing his bankruptcy schedules, original counsel could not fully develop the defense as an attempt to do so would shift responsibility to his law firm.

In such a conflict situation not only does the conflict put the lawyer in the position of seeking to serve two masters, the effect of his decision to seek advantage for one will adversely affect the position of the other. Moreover, the Court cautioned that an adverse effect may not always be revealed from a review of the affirmative actions taken, but rather, the failure to take actions that are clearly suggested from the circumstances can be equally prejudicial to the client.

Original counsel could not pursue the possibility of negotiating a plea agreement that might require Tatum to testify against original counsel's other clients, even if such an agreement might be of substantial advantage to Tatum. Original counsel was criticized by the Court for "gross insensitivity" to his ethical responsibilities.

The Court then considered whether original counsel's conflicts infected trial counsel, as nothing in the record indicated that trial counsel improperly represented conflicting interests. Because trial counsel depended upon original counsel's knowledge and avenues of defense depended upon original counsel's more complete knowledge of the case, original counsel's assistance to trial counsel, and trial counsel's dependence on original counsel, tainted trial counsel's representation of Tatum and the conflicts were imputed to trial counsel.

United States v. Ross, 33 F.3d 1507 (11th Cir. 1994)

In reviewing the issues pertinent to deciding disqualification, the Eleventh Circuit advised that it first examines whether the subject matter of the first representation is substantially related to that of the second. The Court then seeks to discover whether the defense lawyer has divided loyalties that prevent him from effectively representing the defendant. If the conflict could cause the defense attorney improperly to use privileged communications in cross-examination, then disqualification is appropriate. Disqualification is equally appropriate if the conflict could deter the defense attorney from intense probing of the witness on cross-examination to protect privileged communications with the former client or to advance the attorney's own personal interest. The Eleventh Circuit notes that the trial court must protect its independent interest in ensuring that the integrity of the judicial system is preserved and that trials are conducted within ethical standards.

The Court concluded in Ross that defense counsel suffered insurmountable conflict of interest problems. First, in a prior case, a potential witness had been represented by counsel from the disqualified law firm in a case that involved a conspiracy to import and distribute narcotics and the government intended to show that Ross joined this conspiracy to obtain a source for drugs to distribute as part of the ongoing conspiracy. Further, at the time the Court disqualified Ross' counsel, a serious potential for conflict of interest existed. The former client claimed that he gave money to Ross' disqualified lawyer as a retainer. Testimony about this transaction would have opened the door to potential conflict, as defense counsel could either have tread dangerously close to confidential matters in attempting to explain this transaction or, alternatively, could have improperly avoided related issues. Considering these factors, the Court found that there were actual and potential conflicts that could have impeded the trial and undermined the integrity of the judicial system.

The Court observed that even where an actual conflict exists subjecting the attorney to disqualification, the client may waive this conflict of interest and elect to have the attorney continue representation, so long as that waiver is knowing, intelligent, and voluntary. Here Ross expressly and unconditionally waived his right to conflict-free representation. Nonetheless, a court is not required to accept a waiver of the right citing to Wheat, 486 U.S. at 162 (holding that trial courts may refuse waivers of conflicts of interest to ensure adequacy of representation, to protect integrity of court, and to preserve trial judge's interest to be free from future attacks over adequacy of waiver and fairness of trial). "The courts have an independent interest in ensuring that criminal trials are conducted within the ethical standards of the profession and that legal proceedings appear fair to all who observe them.... Not only the interest of a criminal defendant but the institutional interest in the rendition of just verdicts in criminal cases may be jeopardized by unregulated multiple representation." Wheat at 160.

The Ross Court stated that the district court was confronted with several actual or potential conflicts of interest and, if realized, any of the identified conflicts would have rendered the court's verdict suspect and Ross' assistance of counsel unethical and ineffective. The district court did not abuse its discretion by refusing to accept Ross's waiver of his right to conflict-free representation and by disqualifying Appellant's first choice of counsel.

Taylor v. State, 428 Md. 386 (2012)

Where, during the course of representation, defense counsel filed sued against his client for unpaid legal fees and did such, without obtained informed consent from his client to continue representation notwithstanding such conflict, did such circumstances create the real potential of an ethical conflict of interest? The COA stated that an "actual conflict of interest" is a conflict that adversely affects counsel's representation of the defendant. The determination of such an inquiry is circumstance-specific. While the post-conviction court in Taylor found that defense counsel's representation was infected with an "actual conflict of interest" it did not indicate that the assumed ethical conflict of interest adversely affected defense counsel's representation so as to give rise to a violation of the right to counsel. The COA remanded the case for the trial court to consider the case-specific facts to determine whether Taylor can establish (1) a plausible alternative defense strategy or tact that his defense counsel might have pursued; (2) that the alternative strategy or tactic was objectively reasonable under the facts of the case known to the attorney; and (3) that the defense counsel's failure to pursue the strategy or tactic was linked to the actual conflict.

Avoid the Possibility of the Conflict

Defense counsel faces a myriad of possible scenarios where the issues of conflict of interest can arise. Representing an individual who is part of drug conspiracy that has been active over a number of years presents the possibility that current representation of a newly charged member of the conspiracy may put counsel in the position of having to consider whether the new client may have information that could be adverse to the interests of a former client (and this may arise when it is the former client who is the source of the referral for the new client).

What if the girlfriend of your prospective client comes to you to retain you for her boyfriend? She tells you that their house was raided and guns and drugs were seized. She has a grand jury subpoena to testify. She starts to tell you what she knows about the presence of the drugs and guns that her boyfriend is charged with. Is she telling you this to get your initial guidance and advice as to how she should respond to the grand jury subpoena? When you discuss this matter with her, are you giving her legal advice? Is she disclosing information to you with the expectation that it is confidential? Do the circumstances permit her to conclude that you are giving her legal advice? Have you now put yourself in a position where you cannot represent her boyfriend? Clearly the advice you give her may protect her and, if she contends she had no knowledge or involvement in the items seized from their residence that will push the inferences more strongly towards possession by her boyfriend. Perhaps if you make it clear to her before she tells you anything that your conversation with her is not privileged, that your only attorney-client relationship is with her boyfriend, and that while she can give you information, that information can be used and disclosed as you determine appropriate in representing her boyfriend. Better yet, advise her not to discuss any information that she may have and refer her to a lawyer that can independently provide her personal legal advice. Any appropriate information sharing can then occur through the attorneys and the issue is avoided.

What is the proper procedure when there is a potential conflict, but not an actual conflict, and you wish to seek a waiver of a possible conflict from a former client? Can you request the former client give a waiver? Do you advise the former client about the possible adverse consequences to the former client of agreeing to waive the conflict? If the case is significant enough to justify the expense, you may wish to retain independent counsel to advise the former client as to whether or not to waive the conflict.

When do you have to disclose to the court or the government the possibility of a conflict? Does such a disclosure run the risk of disclosing privileged information to the government? In the earlier example, do you want the government to know that someone who may be associated with your client in the drug conspiracy is the one who referred your current client to you?

One of the most cautious steps when confronted with one of these circumstances or similar circumstances is to consult with a colleague who is both experienced in criminal law matters and is someone whom you have confidence has a good set of "antennae" regarding what is right, wrong or close to the line. Usually, but not always, if you are sufficiently uncomfortable with the situation, the answer is obvious that there exists the type of conflict or potential conflict you should avoid. If you consult with a colleague, full disclosure is necessary to receive advice that you can rely upon. Memoranda to both your file and your colleague's file documenting the conversation and the advice may later be critical to support your rationale for whatever course is taken.

No one case is worth being the subject of a reported decision granting a new trial or post-conviction relief for ineffective assistance of counsel where your name appears (as is the case with a number of the cases discussed in this article) with critical comments by the court regarding conflict of interest and ethical decision making.