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Capital Business
Posted at 03:10 PM ET, 10/17/2012

Covington & Burling embroiled in conflict of interest dispute involving former client

Covington & Burling, the District’s largest law firm, is fighting to get reinstated in a case from which it was disqualified over an alleged conflict of interest.

Last week, a Minnesota state judge ordered Covington to stop representing the state of Minnesota in an environmental lawsuit against 3M, a former client of the firm’s. The lawsuit, filed in 2010 by the Minnesota attorney general’s office — which hired Covington as outside counsel — accuses 3M of polluting waterways with fluorochemicals used in making Post-It notes, Scotch tape and other products.”

Client conflict issues arise periodically at large law firms that represent thousands of companies at any given time, and may later find themselves suing the same companies they once worked for.

Covington in the 1990s advised 3M in regulatory matters before the U.S. Food and Drug Administration, advocating that products containing fluorochemicals were safe for consumers. The law firm later represented 3M in an employee benefits issue, but that matter ended before the firm agreed to represent the state of Minnesota in the current lawsuit, Covington leaders said.

But the Minnesota judge found that Covington didn’t do enough to ensure that confidential information about 3M — that Covington attorneys may have gained from their previous work with the company — was not improperly shared with attorneys for the state of Minnesota who are now suing 3M.

“Covington exhibited a conscious disregard for its duties of confidentiality, candor, full disclosure, and loyalty to 3M by failing to raise its conflicts arising from the fact that it previously advised and represented 3M,” Hennepin County District Court Judge Robert Blaeser wrote in the Oct. 11 ruling. “Covington’s failure to protect 3M’s confidential information raises a strong inference that 3M’s confidential information has been improperly accessed by Covington and will continue to.”

Covington filed an appeal late Tuesday, saying none of 3M’s confidential information was used by Covington lawyers against 3M. The firm also takes issue with the fact that 3M lawyers waited 16 months to raise the conflicts question, even though 3M’s former general counsel at the beginning of the lawsuit acknowledged he understood why Covington took the case against 3M, and hoped that Covington would represent 3M again in the future, the appeal said.

“When long-time clients ask us to represent them on difficult matters, and we have no conflict, we should undertake the representation,” Covington chairman Tim Hester said in a statement, referring to the fact that the law firm has represented the state of Minnesota in environmental matters since 1995. “In the situation here, we had no conflict when the State of Minnesota asked us to handle this matter.”

3M is suing Covington in a separate federal lawsuit, accusing the law firm of dropping 3M “like a hot potato” so it could turn around and sue the company.

William Brewer of Bickel & Brewer, the lead attorney for 3M, called the judge’s decision last week “a resounding victory for 3M and underscores the importance of the ethical duties that are owed by lawyers to their clients.

“This order confirms that Covington & Burling breached the most fundamental duties inherent in the attorney-client relationship – the duties of loyalty and confidentiality,” Brewer said.

By  |  03:10 PM ET, 10/17/2012

 
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