Handling Investigations and Litigation

An association’s involvement in an antitrust investigation or
litigation may raise a variety of difficult practical and legal issues. To
begin with, the cost of an antitrust i nvestigation or lawsuit may strain, if
not exceed, the resources of many associations. Moreover, when an
association becomes involved in an antitrust investigation or lawsuit, t he
association and its counsel are likely to face a number of difficult legal
tasks and decisions, including: preserving the attorney-client privilege,
formulating and executing a strategy for responding to subpoena s, and
determining whether to seek to resolve the investigation or suit through
settlement. These and related topics are discusse d in this chapter. Also
covered are issues that arise where an associ ation seeks to instigate a
government investigation and where an a ssociation is the plaintiff in
private litigation.
A. The Attorney-Client Relationship
This section summarizes the general principles that apply to the
attorney-client relationship in the association context and addresses
some of the ethical and pri vilege issues that may arise when an
association becomes involved in an antitrust investigation or liti gation.
Who Is the Client?
The general rule is that a lawyer who represents an organizational
client such as an association r epresents the organization and not its
individual members.
Information obtained by an association’s lawyer
1. For further discussion of the ethical and privilege issues that may be
encountered representing trade associations and their members, see
Christopher J. MacAvoy, Ethical and Practical Challenges Representin g
Trade Associations and Their Members, THE ANTITRUST SOURCE,
May 2003, available at http://www.abanet.org/antitrust/at-source/03/05/
2. See, e.g., D.C. RULES OF PROFL CONDUCT R. 1.13(a) (2007); D.C. Bar
Legal Ethics Comm., Op . No. 305 (2001); CAL. RULES OF PROFL
Antitrust and Associations Handbook
while acting for the association is protected by the attorney-client
privilege and the lawyer’s duty to maintain a client’s confidences. The
privilege belongs to the association and not the members.
association’s lawyer is not, under the genera l rule, prohibi ted from
representing the associ ation in a matter in which its interests are adverse
to those of a member.
There may be an obligation, though, for the
association’s counsel to advise any member whose interests are adverse
to those of the assoc iation that there is an actual or potential conflict,
that the lawyer represe nts only the association, and that the member may
wish to seek separate counsel.
Notwithstanding the general rule, in some situations an association’s
lawyer may be deemed to ha ve an attorney-client relationship with a
member of the association despite the absence of a formal engagement.
If the facts and circumstances surroundi ng the communications between
the association’s lawyer and the member were such that t he member had
a reasonable expectation of confidentiality and t hat the lawyer was
acting on its behalf, an attorney-client relationship may be implied.
the leading case, Westinghouse Electric Corp. v. Kerr-McGee Corp.,
the Seventh Circuit held that a law firm was disqualified fr om
representing a party in a l awsuit adverse to some of the members of an
association. The law fir m also represented the association and had
received confidential information from its members in connection with
the associ ation’s l obbying efforts. The court held that , under the
circumstances, the members had a reasonable belief that the law firm
OF PROFL CONDUCT R. 1.12(a) (1989); Robinson v. Te x. Auto. Dealers
Ass’n, 214 F.R.D. 432, 451-52 (E.D. Tex. 20 03).
3. See, e.g., D.C. Bar Legal Ethics Comm., Op. No. 305, at 2 n.3.
4. Id. at 2 (citing D.C. RULES OF PROFL CONDUCT R. 1.7 cmt. [13] and D.C.
Bar Legal Ethics Comm., Op. No. 216 (1991)).
5. See, e.g., D.C. RULES OF PROFL CONDUCT R. 1.13 cmt. [9].
6. See D.C. Bar Legal Ethics Comm., Op. No. 305; Ass’n of the Bar of the
City of N.Y. Comm. o n Prof’l and Judicial Ethics, Formal Op. 01 (1999);
ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 390 (1995).
7. 580 F.2d 1311 (7th Cir. 1978) .

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