CenTra, Inc. v. Estrin
Full Opinion (html_with_citations)
OPINION
The Detroit International Bridge Company (âDIBCâ) and its Michigan-based parent CenTra, Inc. (collectively âCen-Traâ), believed that more divided them from Windsor, Ontario than united them. For one thing, the Detroit River separates Windsor from Michigan. For another, Windsor and CenTra disagreed as to the future of the Ambassador Bridge, the Cen-Tra-owned bridge that spans the Detroit River; while CenTra sought to add a second span to the bridge, Windsor wanted to stop that expansion. Yet CenTra was wrong in concluding that more divided than united. It turns out that Windsor and CenTra were both employing the same law firm, Gowling Lafleur Henderson, LLP (âGowlingsâ): while Windsor hired Gowlings to help the city oppose the second span, CenTra hired Gowlings to help the company raise money to fund the construction of that same span. Although CenTra wanted to expand its connection to Windsor, it was hoping to do so with an additional bridge, not by sharing legal counsel; thus, CenTra sued Gowlings for damages, alleging breach of contract, breach of fiduciary duties, and legal malpractice. The district court granted summary judgment for Gowlings, holding that CenTra impliedly consented to any conflict of interest in Gowlingsâs simultaneous representation of adverse clients regarding the construction of the second span of the Ambassador Bridge. The district court found implied consent because it concluded that CenTra was aware that Gowlings had previously represented parties (including Windsor) directly adverse to CenTra in cases where Gowl-ings was not representing CenTra. We believe that the district court erred in its granting of summary judgment. CenTra established genuine issues of material fact regarding not only whether it impliedly consented to the conflict of interest, but also whether it could even consent to the conflict in the first instance. Furthermore, the district court abused its discretion in granting summary judgment prior to discovery. We, therefore, REVERSE the district courtâs judgment and REMAND the case to the district court for further proceedings consistent with this opinion.
I. BACKGROUND
A. Factual Background
â[T]he Ambassador Bridge (the âBridgeâ) which spans between Windsor, Ontario and Detroit, Michigan is owned jointly by re
Between 1985 and 2006, Gowlings had consistently represented CenTra in a variety of matters. âGowlings is one of Canadaâs largest law firms, with eight offices throughout Canada and one in Moscow.â J.A. at 83 (Defs.â Br. in Supp. of Mot. for Summ. J. at 3). Despite CenTraâs longtime association with Gowlings, Gowlingsâs Toronto-office partner David Estrin (âEst-rinâ) has occasionally taken adverse positions to CenTra. For example, in 2001, Estrin began to represent the Buffalo and Fort Erie Public Bridge Authority, and through that representation Estrin learned that CenTra planned to build a competing bridge in close proximity to the one that the Buffalo and Fort Erie Public Bridge Authority operated. In order to defend his clientâs interests, on May 22, 2003, Estrin wrote a letter to Stamper on Gowl-ings letterhead on behalf of the Buffalo and Fort Erie Public Bridge Authority. In that letter, Estrin declared of Gowlings that â[w]e are the solicitors for The Buffalo and Fort Erie Public Bridge Authority.â J.A. at 113 (Letter from Estrin to Ambassador Bridge (May 22, 2003)). Estrin sent a letter to the same effect on September 9, 2004.
In 2002, Estrin accepted another client whose interests would soon turn adverse to CenTra: the City of Windsor. According to CenTra, Windsor has long worked to frustrate CenTraâs plans, having âopposed and hindered the development, maintenance and operation of the Ambassador Bridge.â J.A. at 27 (First Am. Compl. ¶ 34). Yet when Windsor first hired Est-rin and Gowlings, it was to help the city resolve problems with the high volume of traffic from the Ambassador Bridge, a role not directly adverse to CenTra. According to Estrin, however, the âgeneral representation of Windsor gradually turned adverse to CTC[, a CenTra subsidiary].â J.A. at 105 (Jan. 9, 2007, David Estrin Decl. ¶ 8). What prompted the turn toward adversity was CenTraâs filing of two plans involving the Ambassador Bridge: âIn June 2004, CTC applied to Windsor for site plan approval for more toll booths as well as a âbridge deck extensionâ (the âSite Plan []â) for the existing Ambassador Bridge. A month later, CTC filed a Preliminary Review Permit Application ... with the United States Coast Guard for âtwinningâ the Ambassador Bridge (the âBridge Planâ).â J.A. at 105 (Estrin Decl. ¶ 9). â[Tjwinningâ the Ambassador Bridge refers to building a second bridge (a twin) alongside the original.
Estrin, on behalf of Windsor, opposed the Site Plan but did not explicitly take a position as to the Bridge Plan. On September 14, 2004, Estrin sent a letter to Stamper in response to the Site Plan, and the letter included notice of Gowlingsâs role: â[a]s you know, we are the solicitors for the City of Windsor concerning this matter.â J.A. at 165 (Letter from Estrin to Stamper (Sept. 14, 2004)). Estrin and Gowlingsâs involvement in opposing Cen-Traâs Site Plan was even clearer to CenTra on September 30, 2004, when Windsor officials, Estrin, Stamper, and other CenTra representatives met to negotiate a resolution regarding the Site Plan.
Estrin believed that the Bridge Plan and the Site Plan were directly related; there
The Corporation [Windsor] confirms and the Owner [CenTra] acknowledges that the Corporationâs approval of the development contemplated by the subject site plan application does not constitute an endorsement by the Corporation of the proposal by the Owner to twin the existing Ambassador Bridge as proposed in the Ownerâs July 14, 2004 Preliminary Review Permit Application, or a waiver by the Corporation of the Corporationâs right to require an Official Plan/Zoning By-law amendment or otherwise object to or deny the Corporationâs approval for a second Ambassador Bridge span or twinning (including any works or undertakings required or to be used for the purpose), nor shall the Corporationâs approval of the development contemplated by the subject site plan application or any associated or corollary approval or agreement be pleaded as an estoppel of the Corporation in that regard.
J.A. at 124-25 (Site Plan Control ¶ S â 21).
Furthermore, in 2005 and 2006, Estrin defended against CenTraâs objections Windsorâs proposed regulations regarding transportation infrastructure, which specifically mentioned the Ambassador Bridge as subject to the regulations. Thus, Cen-Tra was aware that Gowlings and Estrin were representing Windsorâs adverse interests in several matters in which Gowl-ings was not representing CenTra, but CenTra allegedly was not aware of any of Gowlingsâs and Estrinâs work on behalf of Windsor in opposing the Bridge Plan. âą
Despite awareness of Gowlingsâs occasional representations of other clients with interests adverse to CenTra, CenTra continued to employ Gowlings, which had been one of its law firms for over twenty years. For instance, in June 2005, Stamper sought Gowlingsâs assistance in certain tax work. Before accepting the work, a Gowl-ings attorney searched for any potential conflicts of interest but did not identify any. Then again, most importantly for the case at hand, in November 2005, CenTra sought Gowlingsâs assistance in creating a $700- to $800-million bond offering by which to finance the twinning of the Ambassador Bridge. Shortly thereafter, Windsor employed Gowlings to help the city oppose the Bridge Plan. On September 14, 2006, Estrin sent a letter to the U.S. Coast Guard opposing the construction of the twin bridge. According to Cen-Tra, as a result of Estrinâs letter, the Coast Guard demanded an environmental assessment from CenTra that will cost CenTra $500,000 on the United States side of the bridge and $300,000 on the Canadian side. Thus, by September 2006, Gowl-ings was simultaneously helping CenTra procure funding for the bridge expansion and assisting Windsor in trying to halt the bridge expansion.
Both CenTra and Gowlings claimed ignorance as to this conflict of interest. According to Stamper: âI was not aware that Gowlings was representing Windsor in opposition to the Second Span until September, 2006, when I saw Mr. Estrinâs letter to the U.S. Coast Guard ... opposing the Second Span.â J.A. at 275 (Stamper Decl.
Despite Estrinâs assertions that he knew nothing about Gowlingsâs prior work for CenTra, CenTra alleged in its lawsuit that Estrin may have possessed a legal memorandum that had been previously prepared for CenTra. Between 1979 and 1992, Cen-Tra was engaged in lengthy litigation with Canada regarding the ownership and possession of the Canadian half of the bridge. During the course of this litigation, Gowl-ings acquired extensive information regarding CenTra and the Ambassador Bridge:
In the course of Gowlings serving as the Companiesâ representative before CRA [Canada Revenue Agency] with respect to the Controversies, the Companies revealed detailed, confidential financial and operational information about the Ambassador Bridge and shared other confidential information about the Companies efforts to preserve and enhance the value of their franchise to own and operate the Ambassador Bridge and be in a position to expand and/or replace that Bridge when necessary to meet competitive threats posed by other border crossing facilities.
J.A. at 353 (Mar. 7, 2007, Fred Calderone Decl. ¶ 6). Of particular interest was a memorandum that the firm of Goodman & Goodman created âthat compiled all of the 'documents, both public and private, that Goodman & Goodman believed to be the documents proper and relevant to the defense of [CenTra] to an encroachment upon their ownership and control by the City of Windsor, the Province of Ontario and the Dominion of Canada.â J.A. at 284 (Mar. 8, 2007, Patrick A. Moran Deck ¶ 4). Although a different law firm prepared the memorandum, CenTra provided to Gowl-ings the Goodman Legal Memorandum and all of its supporting documents. This collection of materials, according to Cen-Tra, is very similar to the research that Estrin described in his letter to the U.S. Coast Guard.
B. Procedural Background
On November 20, 2006, CenTra filed a diversity action against Estrin and Gowl-ings in the U.S. District Court for the Eastern District of Michigan. On December 7, 2006, CenTra filed its first amended complaint. The amended complaint sought relief for breach of contract, breach of fiduciary duties, and legal malpractice, all stemming from Gowlingsâs simultaneous and adverse representation of both CenTra and Windsor.
Before any opportunity for discovery, Gowlings requested summary judgment as well as dismissal. CenTra filed a Federal Rule of Civil Procedure 56(f) motion requesting that the district court first allow an opportunity for discovery:
The two motions cite and rely upon 21 exhibits, almost all of which fall outside of the pleadings. Part of these 21 exhibits are 4 affidavits containing numerous factual allegations that are highly disputed by Plaintiffs. Defendants, without the Plaintiffs having the opportunity to depose the affiants, much less having the benefit of any discovery, would have this Court accept these allegations as true, accurate and undisputed.
J.A. at 194 (Pis.â Mot. to Conduct Disc, at 2). On February 16, 2007, the district court denied CenTraâs motion to conduct
On April 30, 2007, the district court granted Gowlingsâs motion for summary judgment. According to the district court, âPlaintiffs confĂne their lawsuit to [Michigan Rules of Professional Conduct] § 1.7(a)(2), and argue that Defendants did not properly obtain Plaintiffsâ consent regarding this conflict. While not necessarily applying Michigan law, a number of courts have recognized that the client may impliedly waive its consent to an attorneyâs conflict of interest.â J.A. at 589 (Apr. 30, 2007, Order Granting Summ. J. at 6). Determining that it was legally possible for CenTra to waive any objections to Gowl-ingsâs conflict of interest, the district court concluded that Stamperâs continued retention of Gowlings effectuated waiver after years of notice regarding Gowlingsâs representations of other clients with interests adverse to CenTra:
Although Stamper declares that he was unaware of Gowlingsâ representation of Windsor until September 2006, the Court finds that this testimony is fatally inconsistent with the uncontested facts regarding the September 2004 letter to Stamper, the meeting later that month where the parties discussed the Site Plan, which he and Defendant Estrin both attended, and the resulting February 2005 Site Plan agreement that also mentioned the Bridge Plan.
J.A. at 590-91 (Order at 7). Because the conflict was waived, the district court granted summary judgment in favor of Gowlings. The district courtâs order made no mention of CenTraâs claims regarding Gowlingsâs use of confidential material.
On May 29, 2007, CenTra filed a timely notice of appeal.
II. ANALYSIS
A. The Grant of Summary Judgment
1. The Applicable Law
In diversity cases we apply the choice-of-law rules and substantive law of the forum state, which is Michigan in this case. Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir.2003). The issues before us touch on matters of professional responsibility, suggesting some important questions as to the appropriate choice of law for this case. Under similar circumstances, we have applied the forum stateâs professional-conduct standards in a diversity-based malpractice action. Woodruff v. Tomlin, 616 F.2d 924, 935-36 (6th Cir.) (en banc), cert. denied, 449 U.S. 888, 101 S.Ct. 246, 66 L.Ed.2d 114 (1980). However, we need not resolve the exact question of what Michiganâs choice-of-law principles would indicate as the applicable standards of professional conduct because, for the issues we must address today, Michiganâs standards of professional conduct are consistent with the other possible sources of law, making any asserted conflict of laws a false conflict. Williams v. Toys âRâ Us, 138 Fed.Appx. 798, 803 (6th Cir.2005) (unpublished). For instance, the U.S. District Court for the Eastern District of Michigan has adopted the Michigan Rules of Professional Conduct as the applicable federal rules of professional conduct. See U.S. District Court for the Eastern District of Michigan, Local Rule 83.22(b). In addition, the Restatement (Third) of the Law Governing Lawyers (âRestatementâ) and the 2007 edition of the American Bar Asso-
At oral argument, Gowlingsâs counsel asserted that Michiganâs standards of professional conduct do not apply to this case. He claimed that, because this was a civil action and not a disciplinary matter, the Michigan Rules of Professional Conduct have no bearing on the question of whether the district court correctly granted summary judgment. Gowlingsâs counsel is correct that a violation of Michiganâs Rules of Professional Conduct does not by itself give rise to an actionable claim. The Michigan rules state:
Failure to comply with an obligation or prohibition imposed by a rule is a basis for invoking the disciplinary process. The rules do not, however, give rise to a cause of action for enforcement of a rule or for damages caused by failure to comply with an obligation or prohibition imposed by a rule.
MiCH. R. Peofâl Conduct 1.0(b) (emphasis added).
Although Rule 1.0(b) makes it clear that a plaintiff cannot seek damages for a violation of the Michigan Rules of Professional Conduct, a violation of the rules may be probative in establishing an independent cause of action. For instance, the Michigan Court of Appeals considered the Michigan Rules of Professional Conduct in a civil contract action that determined that a fee agreement was unenforceable. Evans & Luptak, PLC v. Lizza, 251 Mich.App. 187, 650 N.W.2d 364 (2002). The court in Evans & Luptak stated that although â[t]he rules do not ... give rise to a cause of action for enforcement of a rule or for damages caused by failure to comply with an obligation or prohibition imposed by a rule,â the rules are still admissible and relevant under âthe Michigan Rules of Evidence and other provisions of law.â Id. at 368. Subsequent Michigan Court of Appeals cases have embraced this position- and have approved of the use of the Rules of Professional Conduct when the âplaintiffs do not rely solely on the rules to establish their claim, but instead refer to the rules only as evidence of the standard of care,â Recker v. Malson, No. 268230, 2006 WL 2380960, at *3 (Mich.Ct.App. Aug.17, 2006) (unpublished), and have allowed juries to be instructed as to those rules in such cases, Deluca v. Jehle, No. 266073, 2007 WL 914350, at *3 (Mich.Ct.App. Mar.27, 2007) (unpublished). We believe that it is clear that the rules are probative and instructive for the instant case, particularly as they relate to Cen-Traâs malpractice and fiduciary-duty claims.
CenTraâs complaint asserts claims of breach of contract, breach of fiduciary duties, and legal malpractice. These claims are not dependent upon a violation of the Michigan Rules of Professional Conduct; tort law and contract law provide the legal basis for the claims, not rules of professional ethics. See Lazy Seven Coal Sales, 813 S.W.2d at 405. The professional-conduct rules assist in evaluating Cen-Traâs claims, but they do not provide the underlying elements of the claims themselves. Thus, CenTra appropriately uses Michiganâs Rules of Professional Conduct as support for its claims, not the basis of the claims, and we will proceed to evaluate the district courtâs grant of summary judgment.
The burden is generally on the moving party to show that no genuine issue of material fact exists, but that burden may be discharged by âshowing-that is, pointing out to the district court â that there is an absence of evidence to support the nonmoving partyâs case.â Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted). In reviewing a summary judgment motion, credibility judgments and weighing of the evidence are prohibited. Rather, the evidence should be viewed in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, the facts and any inferences that can be drawn from those facts[ ] must be viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir.2005). It is an error for the district court to resolve credibility issues against the nonmovant: âIn effect, any direct evidence offered by the plaintiff in response to a summary judgment motion must be accepted as true. The district court errs by granting summary judgment for the defendant where issues of credibility are determinative of the case.â Ctr. for Bio-Ethical Reform, 477 F.3d at 820 (internal quotation marks and citation omitted).
2. Nonconsentable
There are some conflicts of interest to which a client may not consent. Thus, the district court was only partially correct when it stated âthat a client may impliedly waive its consent to an attorneyâs conflict of interest,â J.A. at 589 (Order at 6), because it ignored the question of whether Gowlingsâs simultaneous and adverse representation of CenTra and Windsor was in fact a conflict to which CenTra could consent. We hold that there is a genuine issue of material fact as to whether Gowlingsâs conflict of interest with regards to the Bridge Plan was one to which CenTra could consent.
That CenTra
The district court broadly stated that a client may consent to a conflict of interest; however, it is not true that all conflicts are consentable. Whether a conflict is consentable depends upon the facts of the case. According to the commentary to Michiganâs Rule 1.7, a conflict is noncon-sentable âwhen a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances.â Mich. R. Profâl Conduct 1.7 cmt. Given the evidence presented at the summary-judgment stage of this case, we hold that there is a genuine issue of material fact as to whether Gowlings reasonably believed that the conflict would not adversely affect its relationship with its clients, and whether a disinterested lawyer would conclude that CenTra should agree to the representation. CenTra submitted to the district court a declaration from an expert who stated that âI simply do not see how a law firm can offer sound profes
3. Informed Consent
Even if we agreed with the district court that there was no question as to whether a client could consent to a conflict when one law firm represents both the party trying to build a bridge and the party trying to oppose it, we also believe that the district court erred in concluding that there was no genuine issue of material fact as to whether CenTra consented to the conflict. Michigan allows a client to consent to a conflict only if the consent is informed, and here there is a triable factual question as to whether CenTra was informed sufficiently of the conflict to provide consent.
According to Michiganâs Rules of Professional Conduct:
A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
MiCH. R. PROfâl Conduct 1.7(a). While Michiganâs language is not identical to the Restatement or the ABA Model Rules, the two national models bear significant similarity to Michiganâs rules and give context to Michiganâs standards. The Restatement advises:
(1) A lawyer may represent a client notwithstanding a conflict of interest prohibited by § 121 if each affected client or former client gives informed consent to the lawyerâs representation. Informed consent requires that the client or former client have reasonably adequate information about the material risks of such representation to that client or the former client.
(2) Notwithstanding the informed consent of each affected client or former client, a lawyer may not represent a client if:
(a) the representation is prohibited by law;
(b) one client will assert a claim against the other in the same litigation; or
(c) in the circumstances it is not reasonably likely that the lawyer will be able to provide adequate representation to one or more of the clients.
Restatement § 122. The ABA Model Rules also provide similar guidance for attorneys:
Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the*415 same litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
ABA Model Rules, Rule 1.7(b). Although the three systems have some semantic variations, they are all similar in one important respect: Michigan requires âconsent[] after consultation,â and the ABA Model Rules and the Restatement require âinformed consent.â Although the ABA sets the bar even higher by requiring that consent be written, the common denominator for all three is the idea of consultation (informing) before consent.
This similarity between âinformed consentâ and âconsent[ ] after consultationâ is important because we could find little that elaborates upon what satisfies âconsent[] after consultationâ under Michigan law. In contrast, the Restatement and the ABA Model Rules provide more guidance. The Restatement requires that attorneys inform their clients of the nature of the conflict so that the clients are âaware of the material respects in which the representation could have adverse effects on the interests of that client.â Restatement § 122 cmt. c(i). According to the Restatement, what is âmaterialâ may change with the circumstances. For instance, a client already represented by a disinterested attorney may require less information from the conflicted attorney, but the client ânevertheless may have need of information adequate to reveal [the conflictâs] scope and severity.â Id. Under the ABA Model Rules, a conflicted attorney does not need to disclose âfacts or implications already known to the client or other person; nevertheless, a lawyer who does not personally inform the client or other person assumes the risk that the client or other person is inadequately informed and the consent is invalid.â ABA Model Rules, Rule 1.0 cmt. 6. Thus, providing to the client anything less than full information runs the risk that the client is inadequately informed, thereby making any consent invalid.
In the case at bar, Gowlings argues that the lengthy history of its partner Estrinâs opposition to CenTra, including Estrinâs work on behalf of the Buffalo and Fort Erie Public Bridge Authority and for Windsor on the Site Plan, was sufficient to inform CenTra of a general, ongoing conflict of interest between Gowlingsâs other clients and CenTra. According to Gowl-ings, because CenTra had notice of a general conflict, CenTraâs continued retention of Gowlings as its counsel served as implicit consent to future conflicts of interest that would include Gowlingsâs work on behalf of Windsor to oppose the Bridge Plan while simultaneously assisting CenTra in arranging for funding for the Bridge Plan.
We conclude that CenTraâs knowledge of Estrinâs prior work representing parties adverse to CenTra in different matters is not enough, as a matter of law, to inform CenTra adequately of the scope of Gowl-ingsâs conflict of interest regarding the Bridge Plan. Courts interpreting the ABA and Restatement rules have made it clear that it is not sufficient to leave the client to infer the full nature of a conflict from only bits and pieces of actual or constructive knowledge. The Ninth Circuit held that simply possessing knowledge of the existence of a conflict does not mean that the client is fully informed as to the conflictâs implications:
To satisfy the requirement of full disclosure by a lawyer before undertaking to represent two conflicting interests, it is not sufficient that both parties be informed of the fact that the lawyer is undertaking to represent both of them, but he must explain to them the nature of the conflict of interest in such detail so that they can understand the reasons*416 why it may be desirable for each to have independent counsel, with undivided loyalty to the interests of each of them.
Unified Sewerage Agency v. Jelco Inc., 646 F.2d 1339, 1345-46 (9th Cir.1981) (internal quotation marks omitted) (emphasis added). Similarly, the Second Circuit rejected the argument that it was enough that the client knew generally of the conflicted attorneysâ adverse work: âThis assertion is without merit. Clause (C) of DR 5-105 [of the 1969 ABA Model Code
Gowlings repeatedly claims that the district court correctly focused on whether CenTra was aware of a general conflict rather than asking whether Cen-Tra was aware of Gowlingsâs opposition to the Bridge Plan per se. See, e.g., Appellee Br. at 27. In other words, Gowlings contends that knowledge of earlier conflicts can constitute knowledge sufficient to consent to a different, subsequent conflict. We disagree; the âinformedâ part of informed consent is tied to knowledge of the conflict in question, not different conflicts.
If the vague and general information that CenTra possessed regarding pri- or, different conflicts was enough, then the client would bear the burden of identifying and understanding the full scope of any conflict of interest. It is not the client, however, to whom the various codes of conduct have given this responsibility; â[t]he affirmative duty here rests not with [the clients] but with [the law firm] and its attorneys.â Ransburg Corp., 648 F.Supp. at 1046; see also Dunton v. County of Suffolk, 729 F.2d 908, 909 (2d Cir.1984) (vacating a judgment against a client police officer in a civil rights action on the basis that he was prejudiced by his counselâs conflict of interest; the court stated that â[the client police officer] presumably knew little or nothing about the law of attorney conflicts and could not be expected to discern the nature of the conflict. He would naturally rely on his attorney to protect him.â). One court has placed more of a burden on the client. See Alexander v. Primerica Holdings, Inc., 822 F.Supp. 1099, 1116 (D.N.J.1993) (holding that it was sufficient that the client had âthe knowledge necessary to discern these conflict of interest issues .... â (emphasis added)). However, we could find no other courts that have adopted this watered-down standard, which is contradictory to the standard used in one of the most frequently cited cases in this field: â[W]e think it would be questionable conduct for an attorney to participate in any lawsuit against his own client without the knowledge and consent of all concerned.â Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1386 (2d Cir.1976) (upholding disqualification of a law firm that was representing the plaintiff in an antitrust matter but had a partner who was representing the defendant in separate but âsomewhat similarâ litigation, id. at 1385).
A clientâs knowledge that his law firm has, on previous occasions, represented parties that opposed the client in different matters does not provide an adequate foundation for informed consent with respect to a current simultaneous representation of two adverse clients with opposing interests in a specific dispute. Gowlings does not claim that it provided to CenTra more specific information regarding the current conflict on which informed consent could have been based, because Gowlings itself admits that it was not aware until 2006 of the conflict with respect to the Bridge Plan. It is, therefore, apparent that CenTra has at least established a genuine issue of material fact as to whether Gowl-ings fulfilled its obligation to inform Cen-Tra of the full nature of the conflict arising from Gowlingsâs simultaneous and adverse representation of CenTra and Windsor with regard to the Bridge Plan.
4. Implied Consent
Gowlings asserts that CenTraâs continued retention of Gowlings after
Gowlings is correct that generally a client may impliedly consent to an attorneyâs conflict of interest. However, Cen-Tra has established a genuine issue of material fact regarding whether it did impliedly consent. Michigan law permits implied consent in certain circumstances. Mich. Disposal Serv. Corp., 125 F.Supp.2d at 243 (stating that â[a] client may expressly or impliedly waive his objection and consent to the adverse representation,â but finding that a prospective contractual waiver did not waive the conflict of interest when counsel for a defendant in an earlier environmental civil suit now represented plaintiffs suing the former client in a related environmental civil suit). For elaboration of the Michigan rule, it is helpful to look at the Restatement:
The requirement of consent generally requires an affirmative response by each client.... In general, a lawyer may not assume consent from a clientâs silent acquiescence. However, consent may be inferred from active participation in a representation by a client who has reasonably adequate information about the material risks of the representation after a lawyerâs request for consent.
Restatement § 122 cmt. e(i) (emphasis added). According to the Restatement, there must be both âreasonably adequate informationâ and âa lawyerâs request for consent,â but in the instant case Gowlings has established neither.
In the cases that have found implied consent, the reviewing court has found it clear that the impliedly consenting party was fully aware of the conflict and, armed with that knowledge, that party still took actions that are consistent only with consent. For example, in a Ninth Circuit case, the court declared it âwell settled that a former client who is entitled to object to an attorney representing an opposing party on the ground of conflict of interest but who knowingly refrains from asserting it promptly is deemed to have waived that right.â Trust Corp. of Mont. v. Piper Aircraft Corp., 701 F.2d 85, 87 (9th Cir.1983). In that case, however, there was no question that the conflicted firm provided to the former client and the former clientâs new firm its entire file on the former client so that the former client could evaluate the depth of the conflict, yet the former client said nothing about the conflict for over two-and-a-half years. Id. at 86. Similarly, the U.S. District Court for the Northern District of Ohio said that â[i]t is axiomatic that the clientâs right to object to an attorneyâs allegedly adverse representation may be waived.â City of Cleveland v. Cleveland Elec. Illuminating Co., 440 F.Supp. 193, 205 (N.D.Ohio 1976), aff'd, 573 F.2d 1310 (6th Cir.1977) (unpublished). In that case, however, there was no question that Cleveland had been well
Implied consent requires an informed client. A court can say that a clientâs actions can support solely the conclusion that the client has consented, but only in the limited circumstance that it is indisputably clear that the client was aware of the conflict. In this case, Stamper asserted that he was not aware of the conflict of interest as to the Bridge Plan until 2006. The district court found Stamperâs statement to be not credible because he had attended meetings where Gowlingsâs affiliation with Windsor was apparent as to other matters. As we have noted, Gowl-ingsâs prior work for the Buffalo and Fort Erie Public Bridge Authority and for Windsor on the Site Plan â matters that were different from the Bridge Planâ could not serve to inform CenTra of Gowl-ingsâs conflict of interest with regard to the Bridge Plan. Furthermore, in a motion for summary judgment, the district court cannot make credibility determinations against the nonmovant, and Stamperâs statement deserved the benefit of the doubt as long as it was not totally implausible. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1480 (6th Cir.1989). Thus, there is clearly a genuine issue of material fact as to whether CenTraâs retention of Gowlings after learning of Gowlingsâs work for parties adverse to CenTra on other matters served as implicit consent to Gowl-ingsâs simultaneous and adverse work on the Bridge Plan for both CenTra and Windsor.
Taking the evidence in the light most favorable to the nonmoving party, we are compelled to conclude that the district court improperly granted summary judgment in favor of Gowlings. CenTra has established genuine issues of material fact as to whether the conflict was consentable, whether CenTra was properly informed of the conflict, and whether CenTraâs actions indicated implied consent. Therefore, we REVERSE the district courtâs grant of summary judgment and REMAND for further proceedings consistent with this opinion.
B. CenTraâs Rule 56(f) Motion for Discovery
After Gowlings filed a motion for summary judgment, CenTra asked the district court for the opportunity to conduct discovery. Under the Federal Rules of Civil Procedure, a nonmovant may request additional discovery prior to the granting of summary judgment:
If a party opposing the motion shows by affidavit that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:
(1) deny the motion;
(2) order a continuance to enable affidavits to be obtained, depositions to be taken, or other discovery to be undertaken; or
(3) issue any other just order.
Fed.R.Civ.P. 56(f). The district court denied CenTraâs motion, and we review the decision for abuse of discretion. Vance
In determining whether there was an abuse of discretion, â[a] number of different factors are applicable to such claims, such as (1) when the appellant learned of the issue that is the subject of the desired discovery; (2) whether the desired discovery would have changed the ruling below; (3) how long the discovery period had lasted; (4) whether the appellant was dilatory in its discovery efforts; and (5) whether the appellee was responsive to discovery requests.â Plott v. Gen. Motors Corp., 71 F.3d 1190, 1196-97 (6th Cir.1995) (citations omitted), cert. denied, 517 U.S. 1157, 116 S.Ct. 1546, 134 L.Ed.2d 649 (1996). Because CenTra was given no opportunity to conduct the discovery that would be necessary for CenTra to oppose Gowlingsâs summary judgment motion, we conclude that the district court abused its discretion in denying CenTraâs Rule 56(f) motion.
Typically, when the parties have no opportunity for discovery, denying the Rule 56(f) motion and ruling on a summary judgment motion is likely to be an abuse of discretion. Ball v. Union Carbide Corp., 385 F.3d 713, 719 (6th Cir.2004) (âIt is well-established that the plaintiff must receive âa full opportunity to conduct discoveryâ to be able to successfully defeat a motion for summary judgment.â); Vance, 90 F.3d at 1149 (âMost significant to the conclusion we reach is the fact that no discovery was conducted before the motion for summary judgment was filed and decided.â); Whiteâs Landing Fisheries, Inc. v. Buchholzer, 29 F.3d 229, 231 (6th Cir.1994) (âYet we nevertheless conclude that summary judgment should not have been awarded until the plaintiffs were allowed some opportunity for discovery.... In the instant case, we find that the grant of summary judgment, absent any opportunity for discovery, is such a misuse.â). However, as a general matter we have upheld the denial of Rule 56(f) motions when the court deems as too vague the affidavits submitted in support of the motion. See Ball, 385 F.3d at 720 (âIt is not an abuse of discretion for the district court to deny the discovery request when the party âmakes only general and conclusory statements [in its affidavit] regarding the need for more discovery and does not show how an extension of time would have allowed information related to the truth or falsity of the [document] to be discovered.ââ (quoting Ironside v. Simi Valley Hosp., 188 F.3d 350, 354 (6th Cir.1999)) (alterations in original)); Cacevic v. City of Hazel Park, 226 F.3d 483, 489 (6th Cir.2000) (âNowhere in the unsworn document did the Cacevics indicate to the district court what material facts [they] hope[d] to uncover and why [they] ha[d] not previously discovered the information.â (alterations in original) (internal quotation marks omitted)). We have applied this rule and upheld the denial of Rule 56(f) motions on vagueness grounds even when the parties were given no opportunity for discovery. See Emmons v. McLaughlin, 874 F.2d 351, 359 (6th Cir.1989). Similarly, we have affirmed the denial of Rule 56(f) motions when the parties were given insufficient time for discovery if âfurther discovery would not have changed the legal and factual deficiencies.â Maki v. Laakko, 88 F.3d 361, 367 (6th Cir.1996), cert. denied, 519 U.S. 1114, 117 S.Ct. 956, 136 L.Ed.2d 842 (1997). Thus, it is generally an abuse of discretion to deny a Rule 56(f) motion in
In requesting time for discovery before determination of the summary judgment motion, CenTra filed an affidavit outlining the evidence that it would seek in discovery. We conclude that CenTraâs affidavit is not too vague and identifies information sought by CenTra âessential to justify its oppositionâ to summary judgment. Fed. R.CivP. 56(f). There are several issues for which the opportunity for discovery would have been important. For instance, CenTra asserts it would have sought discovery as to Gowlingsâs conflicts-cheek procedures and how those procedures were or were not applied during the course of events leading up to this case. This information would shed light on what Est-rin knew or should have known at particular times with regard to Gowlingsâs work for CenTra and could create a genuine issue of material fact regarding' Gowlingsâs and Estrinâs failure to catch and alert Cen-Tra to the conflict. And one specific area where discovery would have been particularly helpful involves CenTraâs allegations about Gowlingsâs use of confidential information.
CenTra questions whether Estrin used CenTraâs Goodman Legal Memorandum in preparing Estrinâs letter on behalf of Windsor to the U.S. Coast Guard in opposition to CenTraâs Bridge Plan. In his letter Estrin wrote that âGowlings has commissioned extensive historical and archival research with respect to the statutory and executive approvals granted by the Congress of the United States and the Parliament of Canada to the Ambassador Bridge, as well as in respect of the specific plans, drawings and rights-of-way approved by officials of the federal government in the United States and Canada for the current Ambassador Bridge.â J.A. at 44 (Letter from Estrin to Robert W. Bloom, Jr., Bridge Program Manager, Office of Commander, Ninth Coast Guard District (Sept. 14, 2006) at 10). Estrinâs description sounds similar to the description of the memorandumâs contents given by one of the memorandumâs authors. See Docket No. 2:06-cv-15185, R. 23 at 4 (Mar. 12, 2007, Emilio S. Binavince Deck ¶ 4) (describing the Goodman Legal Memorandum as containing ânotes of the factual and legislative history of the statutes and executive actions governing the construction of the Ambassador Bridge in Canada and the United States, particularly the Canadian statute incorporating the Canadian Transit Companyâ). The Goodman-memorandum author went on to state that the documents that Estrin referred to in his letter âwould by necessity be included in the documents and materials that Gowl-ings had obtained from Centra during its representation of Centra.â (Binavince Deck ¶ 6). A declarant for CenTra who was familiar with both Estrinâs letter and the Goodman Legal Memorandum stated that Estrinâs description of his research âis an accurate description of the materials compiled, referred to and analyzed in the Goodman Legal Memorandum that I personally delivered to Gowlings.â J.A. at 288 (Moran Deck ¶ 18). CenTra also provided an expert who concluded that it was âundisputed that,, as counsel for DIBC, Gowlings had access to the confidential information connected with the case,â including the Goodman memorandum âthat critically analyzed and documented DIBCâs legal right to own and operate the bridge.â J.A. at 368 (Hay Deck ¶ 11).
For his part, Estrin denies that he used any confidential information from CenTra.
In its complaint, CenTra alleged that âGowlings has further breached its obligations to Plaintiffs by using the confidential and privileged information provided by Plaintiffs in its representation of Windsor against DIBC.â J.A. at 28 (First Am. Compl. ¶ 44). In response, Gowlings submitted a declaration that claimed that it no longer possessed the Goodman Legal Memorandum, which CenTra claims that Estrin used when drafting his letter to the U.S. Coast Guard. According to the declaration: âOther than the files related to the Tax and Bond Work, Gowlings does not have any files in its possession or control related to its prior representation of Centra.â J.A. at 110-11 (Jan. 10, 2007, Karen Byrne Decl. ¶ 7). For CenTra effectively to challenge Gowlingsâs assertion, discovery would likely be essential.
According to the Michigan Rules of Professional Conduct, âa lawyer shall not knowingly ... use a confidence or secret of a client to the disadvantage of the client.â Mich. R. Profâl Conduct 1.6(b). Similarly, the Michigan rules provide that â[a] lawyer may reveal ... confidences or secrets with the consent of the client or clients affected, but only after full disclosure to them.â Mich. R. Profâl Conduct 1.6(c). The use of the word âsecretâ suggests that a lawyer may disclose information that originated in a confidential document when that information has subsequently become publicly known. The term âsecret,â however, is not defined.
Michigan Rule 1.9, governing the information that may be disclosed from work created on behalf of former clients, may shed some light on what material Rule 1.6 covers. According to Rule 1.9:
A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
(1) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client, or when the information has become generally known ....
Mich. R. Profâl Conduct 1.9(c) (emphasis added). Rule 1.9, by exempting information that is generally known, suggests that generally known information is similarly exempt from Rule 1.6âs bar from disclosure. Such a position is also consistent with the position of Michiganâs Standing Committee on Professional and Judicial Ethics. In a formal opinion, the committee ruled:
For example, where the only information acquired by the lawyer was a copy of a filed complaint forwarded to the defense firm by the client, since a filed complaint is, by its nature, both a public and a published document, there would thus be nothing confidential or secret.
State Bar of Michigan Standing Committee on Professional and Judicial Ethics, Formal Opinion Number R-4 (Sept. 22, 1989). On this basis, we conclude that documents or information that are public or published are not considered confidential under Michiganâs Rules of Professional Conduct.
Absent information developed through discovery, Estrinâs letter appears to contain only generally known material. Gowlings presented to the district court invoices from an historical research organization establishing that Gowlings hired the group to conduct research from public sources, and Estrinâs letter seems to rely upon that research. Discovery, however, might help CenTra identify what, if any, information in the Estrin letter was derived from confidential information from the Goodman Legal Memorandum.
To determine whether the district court abused its discretion in denying a Rule 56(f) motion, we look to several factors âsuch as (1) when the appellant learned of the issue that is the subject of the desired discovery; (2) whether the desired discovery would have changed the ruling below; (3) how long the discovery period had lasted; (4) whether the appellant was dilatory in its discovery efforts; and (5) whether the appellee was responsive to discovery requests.â Plott, 71 F.3d at 1196-97. CenTra was given no opportunity for discovery, which suggests under factors one and three that the district court abused its discretion. Furthermore, without an opportunity for discovery, factors four and five are simply not applicable. And finally, factor two also indicates that the district court abused its discretion because CenTra sought evidence that would establish genuine issues of material fact as to its claims of breach of contract, breach of fiduciary duties, and legal malpractice. Thus, the district courtâs denial of CenTraâs Rule 56(f) motion for discovery was an abuse of discretion.
C. Damages
Finally, Gowlings asserts in its brief that summary judgment was appropriate because CenTra cannot prove that it suffered any damages. Gowlings claims that Canada would have required CenTra to pay for an environmental assessment even if Estrin had not urged the U.S. Coast Guard also to demand an assessment. Gowlingsâs argument, however, is disingenuous. Est-rinâs letter urged the U.S. Coast Guard to demand an environmental assessment because, according to Estrin, Canadaâs environmental assessment was not adequate. J.A. at 43 (Estrin Letter at 9) (âIn Canada, however, there are only a minimal prescribed requirements [sic] for this type of environmental examination.â). Thus, on the basis of Estrinâs own arguments, it is reasonable to assume that CenTra was forced to expend greater resources on a more robust environmental assessment than it would have if it were required to meet only Canadaâs standards.
We hold that CenTra established genuine issues of material fact as to whether Gowlingsâs simultaneous and adverse representation of Windsor and CenTra on the Bridge Plan was a conflict to which Cen-Tra could consent, whether CenTra was adequately informed of the conflict to the extent that CenTra could have consented, and whether CenTra in fact did consent. We, therefore, hold that the district court erroneously granted summary judgment to Gowlings on CenTraâs claims of breach of contract, breach of fiduciary duties, and legal malpractice. We also hold that the district court abused its discretion in denying CenTraâs Rule 56(f) motion for discovery. For these reasons, we REVERSE the district courtâs grant of summary judgment and REMAND for further proceedings consistent with this opinion.
. In 1988, the Michigan Supreme Court adopted the Michigan Rules of Professional Conduct, which were âlargely drawn from the American Bar Associationâs Model Rules of Professional Conduct.â Mich. R. Prof'L Conduct 1.0 cmt.
. At oral argument, Gowlings suggested that we follow the lead of the Tennessee Supreme Court and hold that rules of professional conduct are inapplicable in civil actions. A review of Tennessee rulings, however, reveals nothing contradictory to our position, and we must, therefore, disagree with Gowlingsâs counselâs representations regarding Tennessee precedent. The Tennessee Supreme Court held that evidence that a lawyer violat
. CenTra did reference the Law Society of Upper Canada's Code of Ethics, J.A. at 30 (First Am. Compl. ¶ 57), not as a cause of action in itself, but only to note that Gowl-ingsâs actions that violated its general duty to CenTra also ran afoul of the Law Society of Upper Canadaâs Code of Ethics.
. The litigants and the district court used the word "waive,â but the various rules of professional conduct are typically written in terms of âconsent.â The litigants are not making a separate argument, but they are instead equating waiver and consent: the giving of consent serves to waive any objections to the conflict of interest. The cases themselves sometimes use the terms together or interchangeably. See, e.g., City of Kalamazoo v. Mich. Disposal Serv. Corp., 125 F.Supp.2d 219, 243 (W.D.Mich.2000) ("A client may expressly or impliedly waive his objection and consent to the adverse representation.â).
. In reaching this conclusion, as well as reaching the other conclusions that follow, we rely heavily upon the Michigan Rules of Professional Conduct, the ABA Model Rules, and the Restatement. As we stated earlier, these rules can serve as evidence supporting various independent causes of actions even though they do not constitute causes of action in themselves. CenTraâs complaint asserts claims of breach of contract, breach of fiduciary duties, and legal malpractice, yet the district court in its opinion and both sidesâ briefs on appeal do not address CenTra's underlying claims and instead focus entirely on professional-conduct standards. Because
. We focus upon Rule 1.7(a) instead of Rule 1.7(b) because Rule 1.7(a) is specific to conflicts involving directly adverse clients, whereas Rule 1.7(b) is more general.
. It does not matter, for purposes of a conflict-of-interest issue, whether Gowlings was representing one CenTra subsidiary or another; according to the Restatement, a conflict as to one subsidiary is a conflict as to the entire corporation. See Restatement § 121 illus. 6 (2000).
. Rule DR 5-105(C) of the 1969 Model Code of Professional Responsibility states that âa lawyer may represent multiple clients if it is obvious that he can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation on the exercise of his independent professional judgment on behalf of each.â The 1969 Model Code is therefore similar to the current ABA Model Rules, which replaced the 1969 Model Code in 1983, with respect to the requirement of informed consent.
. It appears that under Michigan law a client may signal that she is aware that future conflicts may arise and can consent to those in advance through written agreement. Although such agreements would effectuate a general consent, the client is informed of the conflicts in general and consents in general. See Mich. Disposal Serv. Corp., 125 F.Supp.2d at 243; Rymal v. Baergen, 262 Mich.App. 274, 686 N.W.2d 241, 267 (2004) (reversing the disqualification of counsel in a sexual harassment and retaliation lawsuit after holding that âconsent after consultationâ was satisfied by a written agreement that "anticipated the possibility of such a conflictâ). In contrast, in the instant case, Gowlings wants us to infer general consent to any future conflicts from specific instances of informed knowledge with respect to conflicts involving different parties or different legal matters. In any event, this case does not involve consent to prospective conflicts in a written agreement.
. Referring to the ABA Model Rules is less helpful for this question because the ABA Model Rules require that consent be written. ABA Model Roles 1.7(a)(4). There was no written consent here.