Update (May 10, 2014): The Emperor of Minnesota Ethics lays out the issues here. Mr. Wernz does not take a position and gives an express disclaimer to that effect. Nature abhors a vacuum so a fool will rush in where a wiser man would not tread: in my view Conniving & Burling’s conduct should not be excused, with or without 3M’s less than prompt or vigilant objection to the law firm’s betrayal. The defense of “it’s all public now” is inconsistent with the duties of loyalty and confidentiality that all clients should be able rely on always.
Update (May 1, 2014): The Minnesota Supreme Court has now weighed in, affirming in part and reversing in part the underlying decisions of the trial court and the Minnesota Court of Appeals. The case is remanded to the trial court to determine:
(1) Whether the Covington & Burling work for 3M was “substantially related” to its lawsuit for the state of Minnesota against 3M. There is no question that it was “substantially related” in a literal sense. But the issue is
whether confidential information provided to the attorney in the prior representation subsequently has been disclosed to the public and whether that information has been rendered obsolete by the passage of time.
If so, then there is no genuine basis for disqualification, according to the Supreme Court’s analysis; and
(2) Whether the delay in 3M’s timing in bringing the motion to disqualify Covington & Burling was justified or strategic, in which case 3M would be deemed to have waived and abandoned its right to Covington & Burling’s disqualification.
In my view, this is a reprieve for the ultra-prestigious law firm. The lower courts’ rulings were fairly stinging rebukes. (Here is now-retired Hennepin County Judge Robert Blaeser’s 10/11/12 Order.)(The case will go back down to Hennepin County Judge John Q. McShane.)
Update (September 27, 2013): Time has told (see below). This decision will be of great interest to civil litigators as it will likely set out to clarify the critical area of attorneys’ conflicts of interest and duties to prior clients. The Minnesota Court of Appeals held:
Although a decade, more or less, has passed since Covington represented 3M in matters concerning PFCs, the current lawsuit [in which Covington seeks to represent the state of Minnesota against 3M] implicates some of the same issues that arose in the former representation.
Update (July 1, 2013): Covington & Burling’s disqualification was affirmed today. Will the State or the law firm that sought to represent the state against 3M (the law firm’s former client) seek Minnesota Supreme Court review? Time will tell. C&B’s appeal was thrown out for lack of standing though the firm argued that it has suffered reputational and financial harm. No doubt. But the Court of Appeals held that this was insufficient to enable the law firm, as opposed to the underlying party, to appeal the district court’s decision.
Update (October 22, 2012): Now with access to Judge Robert Blaeser’s order disqualifying the law firm of Covington & Burling from representing the state of Minnesota, the plot thickens. Covington & Burling represented 3M for several years advocating that perfluorocarbon chemicals used in a wide range of 3M products were harmless. Then, in December, 2010, the law firm cut ties with 3M and, the same month, assisted the state of Minnesota in a lawsuit against 3M.
Covington agreed to fund all litigation expenses, including costs for expert witnesses and consultants, in exchange for a percentage of any funds obtained from 3M. If no funds are obtained, the State owes Covington nothing.
Update (October 12, 2012): One might have thought that 3M’s voluntary dismissal of its case in federal court alleging malpractice and a conflict of interest against the distinguished law firm of Covington & Burling signaled surrender (noted below after the break)? One would have been wrong. The Pioneer Press reports that 3M obtained from Hennepin County Judge Robert Blaeser what it appeared to have dropped when it dismissed the federal lawsuit: the removal of Covington & Burling as counsel for Minnesota in an action against 3M.
Update (August 20, 2012): 3M voluntarily dismisses its lawsuit, the legal equivalent to Emily Litella’s “Never mind“? (The day after Covington & Burling filed its motion to dismiss.) (Apparently 3M council failed to heed the drumbeat of reminders about pleading jurisdiction over a partnership.)
Update (August 8, 2012): Jim Hammerand of the Minneapolis St. Paul Business Journal (subscription required) highlights the key point in the response to 3M’s accusations of betrayal by the law firm of Covington & Burling (“C&B”) (through C&B’s proxy, the State of Minnesota, which C&B is now representing in a matter adverse to 3M):
3M should have raised the issue when it first learned Covington was on the case, instead of using the disqualification motion ‘as a litigation tactic to slow discovery,’ the state said.
Stalling a case with a disqualification motion is a risky tactic that will more often aggravate a judge than remove a lawyer, said Rich Thomas, an Arden Hills legal-malpractice lawyer at Burke & Thomas who is not involved in this case but reviewed court filings.
“You better kill the bear. You better be right about that before you file,” he said.
Time will tell how this plays out, but, for the record, from the start Minnesota Litigator was (and remains) skeptical that a distinguished and established top-tier law firm like Covington & Burling would blindly or intentionally back-stab a client (or a former client, using information the firm obtained in the context of its representation of the former client).
Original Post (July 27, 2012): When a person or a company has a potential legal problem, and they are proactive and conscientious, they consult lawyers and a law firm (or two or three if they are a Fortune 100 company). Our legal system provides that their consultations must be shrouded in confidentiality in order to properly incentivitize people and businesses to consult lawyers when they have concerns that they might face legal liability rather than have them curl into an armadillic defensive ball.
Sometimes, however, it seems that the lawyers, given the proverbial “source code” of legal liability, seem to turn it against their own clients.
3M has a long history of dealing with potential claims related to molecules with spectacular chemical properties — so-called perfluorocarbons (“PFCs”). These amazing surfactants (surface active agents) have have breath-taking chemical properties and a wide variety of applications (medical uses, fire-fighting applications, stain-guard, industrial uses – the list goes on). Unfortunately, they are also fiendishly persistent and it is thought that they might reside and accumulate in human bodies for a long time. What they do when they are in our systems over long periods of time is the subject of on-going study.
Is it really possible that one of the United States most prestigious law firms would represent 3M, would gain access to its most confidential concerns about “PFCs”, and would turn around and represent another party, the state of Minnesota, against 3M based on the very subject matter for which 3M consulted the firm?
“The breach of loyalty could not be more sharply drawn.”
3M is represented locally by Michael Nilan in claims that this happened. Covington & Burling, the law firm charged with liability in Nilan’s floridly written complaint, has not yet made an appearance in the case. The case was assigned to U.S. District Court Judge Susan R. Nelson (D. Minn.) but Judge Nelson has recused herself and the case was reassigned to Sr. U.S. District Court Judge David S. Doty (D. Minn.).