[textbook]Traversing the Ethical Minefield Problems, Law, and Professional Responsibility by Susan R. Martyn (z-lib.org)(1) (1)

line of the corporate parent,” law firm could not simultaneously represent both in adverse
actions).
2. Is There a Conflict?: Because Kodak and Heidelberg’s post-acquisition relationship
constitutes a single client for conflict purposes, the applicable conflict analysis is the more
exacting “prima facie conflict” standard. . . .
[T]here is little doubt that a prima facie conflict exists here. By accepting employment
as local counsel in the Sony v. Kodak and ECJ v. Kodak cases, Woods Oviatt essentially
agreed to participate in two lawsuits in which an existing client (Kodak) is an adverse party.
Because such concurrent representation could weaken Woods Oviatt’s fiduciary and
fundamental duty of undivided loyalty owed to Kodak, it is “prima facie improper.”
Moreover, the concurrent representation is prima facie improper, irrespective of any
substantial relationship among or between the various state and federal cases.
3. Does the Conflict Require Disqualification? . . .
. . . Aside from proposing that Kodak should, in fairness, waive the conflict, the firm
does not argue that it could realistically be Kodak’s zealous advocate and champion in
defending Kodak’s wholly owned subsidiary against employment discrimination charges in
federal court, while simultaneously representing a plaintiff suing Kodak on employment
discrimination charges in the same federal court. . . . [I]t is difficult to imagine a clearer
conflict of interest or an appearance of divided loyalties. . . . Put simply, without Kodak’s
consent, it is ethically impermissible for Woods Oviatt to have a wholly owned and
integrated subsidiary of Kodak as a client and simultaneously represent Kodak’s adversaries
in pending litigation in state and federal court. Case law clearly supports this conclusion.
4. What is the Appropriate Remedy? . . . Invoking the so-called “hot potato” principle,
Kodak argues that the only ethically acceptable remedy is for the Court to disqualify
Woods Oviatt from representing Sony and ECJ. Under the hot potato principle,
an attorney cannot avoid disqualification . . . merely by “firing” the disfavored client, dropping the client like a hot
potato, and transforming a continuing relationship to a former relationship by way of client abandonment.
Indeed, the offense inherent in taking on the conflicting representation is compounded by seeking to “fire” the
client in pursuit of the attorney’s interest in taking on a new, more attractive representation. If, as one judge has
written, “the act of suing one’s client is a ‘dramatic form of disloyalty,’ ” what might be said of trying to drop the
first client in an effort to free the attorney to pursue his or her self-interest in taking on a newer and more
attractive professional engagement? Universal City Studios, Inc. v. Reimerdes, 98 F. Supp. 2d 449, 453 (S.D.N.Y.
2000).
Woods Oviatt counters that if Kodak’s purchase of Heidelberg made Kodak an
uninvited client of their firm, the firm should be permitted to simply withdraw from the
Jackson and McEwen cases and continue as local counsel for clients adverse to Kodak in the
Kodak v. Sony and ECJ v. Kodak cases. . . .
Here, however, it was Woods Oviatt’s decisions to act as local counsel for Sony and
ECJ, decisions the firm made with full knowledge of Kodak’s intent to acquire their client,
Heidelberg, that created the relevant conflicts. 9 In sum, . . . Woods Oviatt accepted clients
with interests adverse to Kodak after Kodak acquired the firm’s existing client. . . .
Nevertheless, and to be clear, while the [facts here] may require Woods Oviatt’s
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