## Facts

- Westinghouse sued multiple uranium producers, including Kerr-McGee, Gulf, and Getty, alleging a conspiracy to restrain trade in the uranium industry.
- Westinghouse was represented by Kirkland & Ellis during the antitrust litigation.
- Before filing the antitrust suit, Kirkland was retained by a trade association (API) as “independent special counsel” to prepare a report concerning competition and oil-company diversification, including uranium activities.
- API communicated to member companies that information provided to Kirkland would be held in strict confidence and not disclosed to other companies or even to API.
- Gulf, Kerr-McGee, and Getty completed detailed questionnaires and provided interviews and confidential information to Kirkland concerning their uranium activities, believing Kirkland was acting in their undivided interest for purposes of the report.
- Kirkland released the API report addressing competition in the uranium industry while also filing (and litigating) Westinghouse’s antitrust suit asserting an illegal uranium conspiracy against, among others, the same member companies that had provided confidential information.
- The oil-company defendants were not informed that Kirkland was preparing an antitrust complaint against them while it was soliciting and receiving their confidential information for the API project.
- After the conflict was raised, Kirkland implemented an internal screen between lawyers working on the API matter and those representing Westinghouse.
- Noranda separately sought disqualification based on Kirkland’s prior representation of Noranda years earlier.
- The district court denied disqualification motions, including on the view that no attorney–client relationship existed with the oil-company defendants and that a large firm might warrant different imputation treatment.

## Issues

1. Whether a lawyer–client or fiduciary relationship may arise when a party provides confidential information to a law firm with a reasonable belief the firm is acting as its lawyer, despite the absence of a formal retainer or express mutual consent.
2. Whether a firm representing a trade association may, under particular circumstances, owe duties to individual member companies that provided confidential information.
3. Whether conflicts and confidential knowledge are imputed across a large, multi-office firm under ordinary disqualification principles.
4. Whether an internal screen can prevent disqualification where the firm’s work is substantially related and directly adverse to the interests of those who provided confidential information.

## Decision

- The Seventh Circuit reversed the denial of disqualification as to the oil-company defendants who provided confidential information for the API project.
- The court held that, on these facts, Kirkland had fiduciary obligations to Gulf, Kerr-McGee, and Getty inconsistent with suing them in substantially related uranium antitrust litigation.
- The court rejected any exemption for large firms from ordinary imputation and conflict rules.
- The court found Kirkland’s internal screen ineffective to avoid imputation of confidential knowledge and the divided-loyalty problem.
- The court declined to adopt a per se rule that representing a trade association creates an attorney–client relationship with every member, but held the relationship may arise depending on the circumstances.
- The court addressed Noranda’s request separately, requiring further analysis under conflict standards applicable to prior representations.

## Legal Principles

- A fiduciary or attorney–client relationship may be found when a party submits confidential information to lawyers under circumstances creating a reasonable belief the lawyers are acting for that party, even without a formal retainer.
- Representation of a trade association does not automatically create an attorney–client relationship with each member, but duties to members can arise from confidential member-specific communications and assurances of confidentiality or loyalty.
- Disqualification is appropriate where the firm’s earlier work and the current litigation are substantially related and the firm’s duties to protect confidences and avoid divided loyalty would be violated by continued representation.
- Knowledge and conflicts of one lawyer are generally imputed to the entire firm, including large, geographically dispersed firms.
- In concurrent adversity involving substantially related matters, an internal screen, without more, does not rebut imputation or cure the conflict created by receipt of confidential information from the now-adverse parties.

## Conclusion

The Seventh Circuit ordered disqualification where a law firm, after receiving confidential uranium-related information from trade-association members under assurances of confidentiality and loyalty, concurrently represented an antitrust plaintiff suing those same members on substantially related claims; the court applied ordinary imputation rules to the entire firm and rejected screening as an adequate cure.


Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir. 1978)