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Flying J Inc. v. TA Operating Corp., Not Reported in F.Supp.2d, 2008 WL 648545

Facts

Gibson Dunn served as primary outside counsel for Petro from 1999 to 2007 while also representing Flying J in an antitrust lawsuit against Comdata. After discovering an email suggesting a conspiracy against Flying J, Gibson Dunn filed a lawsuit against TA and Pilot on behalf of Flying J without disclosing this to Petro, which led to Petro's motion to disqualify Gibson Dunn. The court found that Gibson Dunn's simultaneous representation of both clients created a conflict of interest, but the specifics of the case and the timing of the motion influenced the court's decision.

Petro states that after discovering the extent of Gibson Dunn's conflicts and non-disclosures, Thomas O'Brien, Petro's President, wrote a letter to Gibson Dunn's management committee on June 21, 2007, requesting that Gibson Dunn withdraw from this litigation.

Issue

Whether Gibson Dunn should be disqualified from representing Flying J due to a conflict of interest arising from its prior representation of Petro.

Petro contends that Gibson Dunn should be disqualified under Utah Rule of Professional Conduct 1.7 which governs conflicts of interest involving current clients.

Rule

Under Utah Rule of Professional Conduct 1.7, a lawyer may not represent a client if the representation involves a concurrent conflict of interest without obtaining informed consent from both clients.

The Rule prohibits a lawyer from representing a client who is directly adverse to another client without obtaining the written consent of both clients.

Analysis

The court analyzed the situation under Rule 1.7, determining that Gibson Dunn's representation of Flying J was directly adverse to its representation of Petro. Although Gibson Dunn argued that it had terminated its representation of Petro before the motion to disqualify was filed, the court found that the conflict arose when Gibson Dunn filed the complaint against Petro while still representing it. The court concluded that Gibson Dunn's actions violated the ethical rules governing concurrent conflicts of interest.

The court further concludes that Gibson Dunn's conduct violated Rule 1.7's prohibition against representing a client if the representation involves a concurrent conflict of interest.

Conclusion

The court denied Petro's motion to disqualify Gibson Dunn, concluding that the potential harm from disqualification outweighed the ethical violations present in the case.

Accordingly the court concludes that the case will not be sufficiently tainted as to warrant a disqualification order.

Who won?

Gibson, Dunn, & Crutcher LLP prevailed in the case as the court denied the motion to disqualify them, allowing them to continue representing Flying J.

The court is mindful that a party in a civil case has an interest in being able to retain counsel of its choice.

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