Multiforum Federal Practice: Ethics and Erie

Abstract

The purpose of this article is to examine the threshold issues relating to applicable ethical standards in multiforum federal practice. Any forecast of ethical issues into the twenty-first century must be made against the backdrop of changing professional practice. If closing decades of this century have demonstrated any significant development in legal practice, it is the evolution and supremacy of national law firms with multistate or global legal practices. Law firm letterheads now routinely list multistate and international branch offices, with attorneys admitted to practice in several states.

Large-scale complex litigation, which typically involves multiple parties, multiple claims, and multiple jurisdictions, also has come to dominate elite professional practice. Standards of professional conduct have not evolved sufficiently with this changing professional profile. One of the more cliched observations is that ethical standards were drafted for small-town practice and that these rules are now hopelessly antiquated for the modern legal profession. While the Model Rules were drafted with a view toward addressing various deficiencies of the earlier Model Code, it remains that modern ethical standards have only begun to address issues involved in multistate legal practice.

Further, hardly any attention has been paid to the professional responsibility duties of federal practitioners. The ethical perils of federal multistate or global practice are amply demonstrated by the efforts of the Eastman Kodak Co. to disqualify the Coudert Brothers law firm from representing competitor independent services organizations in a federal antitrust lawsuit. Coudert provided legal services for at least one of Kodak's operating divisions, as well as a Kodak French subsidiary. This work was performed in Coudert offices in Washington D.C., New York, Paris, Brussels, Hong Kong, and Singapore. After a “conflicts check” with attorneys in their Hong Kong office, Coudert lawyers in the San Francisco and Washington offices prepared, on behalf of their independent services clients, two amicus briefs and a merits brief in a Supreme Court appeal. In a subsequent antitrust litigation, Eastman Kodak requested that the Northern District of California district court disqualify Coudert Brothers for impermissible conflicts-of-interest.

Coudert responded that the California Rules of Professional Conduct did not apply because the Coudert lawyers who had represented the independent service organizations before the Supreme Court had acted outside California, and were not members of the California state bar. They further argued that “federal standards” should apply to determine what version of professional responsibility rules governed the conflicts issue on the disqualification motion. The district court rejected both contentions, applying California law.

Moreover, federal courts may be called upon to resolve ethical issues with transnational implications. For example, a Minnesota district judge determined that the Code of Professional Conduct of the Law Society of Saskatchewan governed a disqualification motion filed in Minnesota federal court against a Canadian lawyer involved in a multinational corporate restructuring and merger.

This paper addresses the fundamental question of what standards of professional conduct apply to federal court practitioners. The perhaps surprising answer is that there is no universal code of professional conduct in federal court. At a minimum, then, it is important for federal litigators to appreciate that they may be subject to entirely unfamiliar, unpublished, (or perhaps even conflicting) sets of ethical standards in multiforum federal practice.

Part I sets forth the general problems relating to professional conduct standards in federal court, delineating variations of possible Erie questions related to professional responsibility duties in the federal arena. This portion of the paper surveys the complicated array of different standards that govern federal practice across the federal judiciary. Part II reviews how several federal district and appellate courts have treated professional responsibility issues, including threshold issues relating to jurisdiction and the dual federal-state court system. Part III concludes with four modest recommendations. The first is the unnovel suggestion for legislative promulgation of unified standards of professional responsibility for federal practitioners. The second recommendation is for federal courts, in the interim, to promulgate a conflicts rule to assist federal judges with resolving inter-district and intercircuit conflicts concerning applicable rules. The third proposal urges federal courts, either by rule or interpretation, to develop distinctions between core and collateral professional responsibility issues. Finally, the fourth recommendation is for the federal judiciary to create separate commissions or tribunals to handle attorney discipline problems.