When the interests of municipalities and their officials diverge: municipal dual representation and conflicts of interest in (section) 1983 litigation.

• Author: Mishra, Dina

NOTE CONTENTS INTRODUCTION I. THE PROBLEM OF CONFLICTS OF INTEREST IN DUAL REPRESENTATION OF MUNICIPALITIES AND THEIR OFFICIALS A. The Municipal Liability Landscape B. The Conflicts of Interest in Municipal Dual Representation 1. Model Rule 1.7(a) and Concurrent Conflicts of Interest 2. The Incompatible Defenses 3. Problems Associated with Rectifying a Concurrent Conflict of Interest C. Municipal Attorneys' Temptations and Pressures To Favor Municipalities over Municipal Officials II. EXISTING APPROACHES TO ADDRESS THE CONFLICTS OF INTEREST A. Description of Existing Approaches 1. The Per Se Ban Approach 2. The Wait and See Approach 3. The Align the Interests Approach 4. Ex Ante Specific Waivers B. Weaknesses in Existing Approaches III. PROPOSED APPROACH CONCLUSION INTRODUCTION

Constitutional tort litigation pursuant to 42 U.S.C. [section] 1983 has generally increased over the past forty to fifty years, (1) particularly after the Supreme Court's decisions in Monell v. Department of Social Services and Owen v. City of Independence. (2) These decisions authorized and expanded, respectively, the liability of municipalities under [section] 1983. Plaintiffs can now bring claims against municipal officials or municipalities themselves for constitutional violations committed under color of law, and frequently they bring claims against both. (3) One empirical study finds that approximately 82% of constitutional tort cases involve multiple defendants, (4) which usually means a government entity has been sued along with one or more of its officials. That statistic is consistent with the experiences of an attorney in the New York City Law Department, who reported that out of approximately 1250 [section] 1983 lawsuits then being handled by the Department's Special Federal Litigation division, the vast majority named the City and one or more officials as defendants. (5)

Because many of the same facts and elements relate to [section] 1983 claims against municipalities as to [section] 1983 claims against municipal officials in their individual capacity, the same legal team frequently will defend both a municipality and its official in a [section] 1983 case. (6) This dual representation creates significant potential for conflicts of interest to arise between the municipality as an entity and its individual officials.

The courts that have recognized this issue have seen it as a powerful problem. Thus, a number of courts have called for special sensitivity to the risk of conflicts of interest in [section] 1983 suits in which a municipality and its official are dually represented by municipal attorneys. (7) Several courts have noted that the threat of a conflict of interest is inherent in [section] 1983 cases because of the incompatible defenses that can be asserted by the municipality and by its officials; (8) a few even call the threat "imminent" and "serious." (9)

The consequences of these potential conflicts of interest may be severe. When plaintiffs recover damages in [section] 1983 actions, the awards can be staggering. (10) Even settled cases generally result in damages. (11) And even if compensatory recovery against a municipal official is lower than it would be against a municipality, (12) officials still must worry about the possibility that the jury will award substantial punitive damages against them. (13) Moreover, when a plaintiff sues a municipal official in his individual capacity, courts levy the damage award against the official's personal assets; (14) a single finding of liability under [section] 2983 can bankrupt an official. (15)

With such high amounts at stake, there can be great temptation or pressure for a municipal attorney to favor one or the other of her clients when their interests come into conflict. In light of the strong relationships between municipal attorneys and municipalities as compared to those between the attorneys and individual officials, municipal attorneys not infrequently may favor the municipality's interests despite ethical obligations to do otherwise. Sadly, because [section] 2983 municipal liability doctrine is rather complex, many officials may not realize when their attorneys have subverted their interests, (16) and courts may not realize either unless someone brings the issue to their attention. A court instead may assume the municipal attorney made various strategic choices simply because the evidence in the case supported those choices.

Thus, despite their importance, conflicts of interest in municipal dual representation are "frequently overlooked by litigants" in [section] 1983 cases, and the issue "has received scant attention in appellate opinions." (17) Legal scholarship has also left this topic virtually unaddressed. (18)

To remedy the gap in the literature, this Note examines more closely the nature of the conflicts of interest that arise when a municipal attorney defends both a municipality as an entity and a municipal official sued in his individual capacity against g 1983 claims for damages predicated on the same facts. The Note proposes a solution to assist the municipal attorneys who litigate such claims and the courts that hear them.

Part I explains the features of municipal dual representation that most often give rise to conflicts of interest. Specifically, it examines how incompatible defenses available only to the municipality, or available only to its official, may pressure attorneys to assert defenses that advance the interests of one client at the expense of the other-a course of action likely to favor the municipality over the municipal official.

Part II discusses and evaluates existing approaches to prevent these conflicts of interest, and to handle them after they arise. It particularly focuses on three main approaches that courts have employed: (1) imposing per se bans on dual representation, (2) waiting until actual conflicts of interest arise before intervening to impose requirements, and (3) requiring municipalities to make advance commitments that align the interests of the municipality and its officials.

Part III proposes a hybrid solution to address problems associated with these conflicts of interest while preserving municipal officials' access to attorneys and minimizing taxpayer expense. The proposal recommends that municipal attorneys more explicitly inquire into potential conflicts in particular cases upfront, and obtain specific informed consent to the potential conflicts from each client at the outset of the litigation. Where the potential conflict does not yet pose a "significant risk" of materially limiting the attorney's representation, dual representation may continue, and if the municipal official chooses not to be dually represented, he should pay for his own counsel regardless of the municipality's obligation to pay for his outside counsel in the event of a conflict. If the potential conflict comes to comprise a "significant risk," the municipal attorney must obtain further consent for dual representation to continue; if such consent is not given, the municipality must either permit separate representation (and pay for the official's outside counsel if state or municipal law so requires) or align its interests with those of its official. Finally, in the event that a municipality and its official choose definitively to assert conflicting defenses, no waiver of the conflict should be permitted and the municipality should be required to permit separate representation (and pay for the official's outside counsel if state or municipal law so requires) or to align its interests with those of its official.

1. THE PROBLEM OF CONFLICTS OF INTEREST IN DUAL REPRESENTATION OF MUNICIPALITIES AND THEIR OFFICIALS

   1. The Municipal Liability Landscape

      42 U.S.C. [section] 1983 provides that "every person" under color of state law who deprives a person within U.S. jurisdiction of rights secured by the Constitution or certain federal laws shall be liable to the party injured. (19) Congress enacted [section] 1983 as part of the Civil Rights Act of 1871, (20) but courts have only firmly established municipal liability under [section] 1983 over the last thirty years. (21) Indeed, between 1961 and 1978, the Supreme Court's decision in Monroe v. Pape (22) precluded the liability of municipalities, and of municipal officials sued in their official capacity, (23) under [section] 1983. It was only in 1978 that the Supreme Court overturned Monroe in Monell v. Department of Social Services, which held that municipalities in fact constitute "persons" for the purposes of [section] 1983. (24)

      Meanwhile, it had been clear even before Monell that municipal officials, when sued in their individual capacity, (25) constitute "persons" under S 1983. (26) As one example, even as the Court in Monroe dismissed the [section] 1983 complaint against the City of Chicago because the City was not a "person," it reversed the lower court's dismissal of the complaint against the individual city officials. (27)

      For the most part, the elements of a [section] 1983 claim against a municipality are identical to the elements of such a claim against an individual municipal official. Against both types of defendants, plaintiffs must prove (1) that the deprivation of a federally protected right occurred, (2) that a particular person's (or persons') conduct caused the deprivation, and (3) that the conduct was committed "under color of law." (28) I will refer to these requirements as the "deprivation" requirement, the "causation" requirement, and the "under color of law" requirement, respectively.

      There is one additional element of a [section] 1983 claim against a municipality not required for a claim against a municipal official. When suing a municipality, the plaintiff must additionally prove the deprivation of his federal right occurred as a result of the enforcement of a municipal policy or custom, (29) which I will refer to as the "policy or custom" requirement. (30) This...