States Hiring Outside Lawyers Need to Ask Who Else They Represent

A federal opioid case in Ohio involving a law firm and the City of Chicago has drawn needed attention to a problem that arises when government lawyers outsource enforcement to outside trial lawyers: ethics and conflicts of interest.

This new attention rightly demands a solution. My former office—the Arizona Attorney General’s Office—offers a clear and easily implementable way forward that can protect against the problems in Ohio.

The core problem being addressed in Ohio is that, in interrelated opioid litigation, trial lawyers at law firm Motley Rice are simultaneously representing not only various state attorneys general, but also city prosecutors in places like Chicago, as well as various private clients.

This led OptumRx, one of the defendants in the high-profile Ohio opioid matter, to file a motion formally seeking to disqualify lawyers from Motley Rice from the case. Citing Motley Rice representation of the D.C. Attorney General, the Hawaii Attorney General, and the City of Chicago, the motion claims Motley Rice attorneys obtained confidential information from OptumRx in connection with various government subpoenas, then “weaponized that knowledge against the same companies in separate private litigation for other clients and for their own financial gain.”

OptumRx is basing this formal request for disqualification on language in the American Bar Association’s Rules of Professional Conduct, and the Ohio Rule of Professional Conduct 1.11(c), which bars a lawyer from using confidential information from government service to privately pursue a defendant once out of government service. More specifically, the Ohio rule bars a lawyer with confidential government information about a person from representing a private client “whose interests are adverse to that person.”

On the surface, the attorneys at Motley Rice, who were given titles as special government attorneys and signed various confidentiality agreements in that role, appear to be in a position where they are simultaneously receiving confidential government information about defendants in the Ohio opioid matter, and representing private clients against the same defendants in an adversarial posture where the private interests are adverse to the defendants.

At a minimum, Motley Rice seems to have a problem on their hands and some explaining to do. And it could be much worse if they have no magic bullet defense and end up being disqualified by the judge in the case.

Regardless of the motion for disqualification’s outcome, the conflict of interest issue is a broad concern. I saw this firsthand in the Arizona Attorney General’s Office. In that role, more than once, outside counsel seemed to see representation of a state as a gateway to increasing their return on investment in a related private action against the same defendants.

Regardless if this perception was always reality, it was constantly front of mind that our lawyers might be serving two masters, and that we had to be mindful of this to protect interests of the state, the office, and the people we served.

This was a problem we saw as so important that we found a structural solution. The office changed its standard outside counsel contract for consumer contingency cases to have clear limits on dual representations. Under the new contractual language, potential outside counsel had to notify the office if counsel was serving as counsel in a private class action. And, we made such a notification the basis for termination “for cause,” as in termination without entitlement “to compensation or reimbursement of any kind under this Agreement.”

The approach the office put in place under Arizona Attorney General Mark Brnovich sets a path others can follow. It moves beyond background application of various ethical canons and imposes a clear contractual limit on representing private parties at the same time and on the same topic as a representation of the state.

Knowing what I know now, I would go further than we did originally. I would make dual representation a mandatory termination situation, rather than simply have it serve as an allowable basis for terminating a contract “for cause.” And I would expand the list of potential conflicts to cover representation of local governments, as the conflicts that have come to light between cities, counties, and states over various pools of settlement money in recent years really underline the importance of avoiding conflicting loyalties for outside counsel in those situations.

Regardless, imposing clear contractual limits on dual representations, like those seen in the Ohio opioids matter with Motley Rice, is something more governments should implement. It makes sense and avoids problems like what we are seeing in the disqualification fight between Motley Rice and OptumRx. It also honors the duty government lawyers owe to the people they serve, who deserve this kind of protection.

More attention to ethics and conflicts of interest is also a good thing when governments hire outside lawyers on contingency contracts. That is especially true because there are straightforward solutions to some of the core problems here. The approach we took in Arizona shows the way, and others should follow it.

The case is In re Nat’l Prescription Opiate Litig., No. MDL 2804, N.D. Ohio Jan. 31, 2022.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

O.H. Skinner of non-profit organization Alliance for Consumers served as Arizona Solicitor General from 2019-2020 and represented the state in major consumer protection cases in addition to overseeing outside counsel.

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