The Law Office of James P. Grifo v. Am. Fed'n of State, Cnty. & Mun. Emps.

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The LAW OFFICE of JAMES P. GRIFO, LLC a Washington State Limited Liability Company; and THE LAW OFFICE of NICHOLAS POWER, PLLC, a Washington State Professional Limited Liability Company, Plaintiffs, v. AMERICAN FEDERATION OF STATE, COUNTY & MUNICIPAL EMPLOYEES, a labor union; WALTER BLAIR, as purported administrator of Local 114; and LOCAL 114, a labor union operating in the State of Washington, Appellants, COLIN MAYCOCK as a member of Local 1849, President of Local 1849, and as a member of American Federation of State, County & Municipal Employees; JAEL KOMAC, a member of Local 114, as former President of Local 114, and a member of American Federation of State & Municipal Employees; and LOCAL 1849, a labor union operating in the State of Washington, Respondents.

No. 82504-6-I

Court of Appeals of Washington, Division 1

May 31, 2022

UNPUBLISHED OPINION

SMITH A.C.J.

Two local unions sued their parent union to enforce provisions of the union constitution. After the case was dismissed, the parent union placed one of the locals under an emergency administratorship and dismissed the local's officers. The appointed administrator then requested the local's legal file and an accounting from the locals' attorneys. The attorneys filed an interpleader action to determine ownership of the file. The superior court concluded that the administrator was not entitled to the legal file or an accounting.

Because an organization is entitled to its legal file and an accounting from its former lawyer, regardless of who controls the organization, we reverse. But because the president of the other local may not have understood that the file might be given to the parent union that he was suing when he consented to disclosure of the file, we conclude that the trial court should perform an in camera review of the file and accounting and determine whether the attorneys' other client has a superseding confidentiality interest over the administrator's interest in any portions of the file.

FACTS

The American Federation of State, County & Municipal Employees (AFSCME) is an international union and a federation of local and intermediate labor organizations. The Washington State Council of County and City Employees, Council 2 is the Washington State affiliate of AFSCME. Local 114 and Local 1849 are local union chapters representing the municipal employees of the city of Bellingham and the employees of San Juan County respectively. Both locals are affiliates of Council 2 and AFSCME.

In 2019, Jael Komac was the president of Local 114 and Colin Maycock was the president of Local 1849. In February 2019 Maycock and Komac hired the Law Office of James P. Grifo LLC and the Law Office of Nicholas Power PLLC ("the law firms") to sue AFSCME and Council 2. The law firms executed an attorney-client fee agreement. Maycock signed the agreement in his individual capacity, but Komac signed the agreement on behalf of Local 114.^[1] The agreement provided,

CONCURRENT REPRESENTATION. Clients have discussed with Attorneys that a possibility of concurrent representation of both parties constitutes a potential conflict of interest. In Attorneys' opinion, no actual conflict exists at this time. This is because all parties currently share a commonality of interest in the matters. . . . In undertaking the concurrent representation of each of you, Attorneys cannot and will not advise either of you as to any matters upon which an actual conflict of interest develops among you. In the event that any conflict, dispute or disagreement arises between you as to your respective rights and defenses we shall decline to represent you in any manner in connection with those disputes or disagreements.

The agreement stated, "Please also be aware that as among you there is no right to assert attorney/client privilege as to communications Attorneys receive from Clients in connection with Attorneys' joint representation of Clients." And it included an explicit conflict waiver provision:

WAIVER OF POTENTIAL AND/OR ACTUAL CONFLICT OF INTEREST

I, Colin Maycock, hereby acknowledge that I have carefully read the foregoing, informing me that my interests may be potentially in conflict with those of Local 114 in connection with Attorneys' representation of my interests in connection with the disclosure issue. I expressly acknowledge that the concurrent representation by Attorneys of my interests and those of Local 114 constitutes the representation of potentially conflicting interests, to the extent that my interests and those of Local 114 are potentially adverse. I nevertheless knowingly and voluntarily consent to such concurrent representation by Attorneys.

In April 2019, the law firms sued AFSCME and Council 2 in federal court on behalf of Maycock, Komac, Local 114, and Local 1849 under the labor management relations act (LMRA)^[2] and the labor management reporting and disclosure act (LMRDA).^[3] The lawsuit sought declaratory and equitable relief establishing the plaintiffs' right to information about Council 2 wages and finances under the AFSCME constitution. On October 1, 2019, the federal court dismissed the lawsuit without prejudice on the grounds that AFSCME and Council 2 had given the locals access to the requested documents.^[4] The law firms' representation ended when the federal court dismissed the case.

On October 11, 2019, Komac resigned as president of Local 114. She sent an email to the local, asserting that Council 2 was failing to effectively represent the local. She invited the members to take action, saying "our dues money is being misused and I can no longer stand by and do nothing about it.

There is something better for all of us out there and I am going to actively pursue it, starting this moment. Please join me."

The AFSCME constitution binds all its chartered local unions. It states, "All subordinate bodies shall at all times be subject to the provisions of the [AFSCME] International Constitution." Local 114's constitution similarly provides, "This local union shall at all times be subject to the provisions of the [AFSCME] constitution." The AFSCME constitution allows AFSCME to place a local union under an administratorship, a process wherein AFSCME's president takes control of the local's affairs and business. The president can place the local under an administratorship if they find that an emergency situation exists on the grounds:

(1) that a subordinate body has seceded or purported to secede, or (2) that dissolution or secession of a subordinate body is threatened, or (3) that dissipation or loss of the funds or assets of a subordinate body is threatened, or (4) that the subordinate body has deliberately filed false per capita tax or other financial or audit reports with the International Union, or (5) that a subordinate body interferes publicly with the organizing campaign of another subordinate body, or (6) that a subordinate body is acting in violation of this Constitution or of any lawful order of the Convention, the International Executive Board, or the International President.

The president may take this action unilaterally, but it must be followed by prompt notice and a hearing before AFSCME judicial officers, which have the power to vacate the administratorship if it finds that the local has not committed any of the listed acts. If the president appoints an administrator, the administrator may "take possession of all the funds, properties, books and other assets" of the local and "shall institute all necessary action to recover money or other property of the subordinate body."

On October 16, 2019, AFSCME's president found three bases for placing Local 114 under an administratorship and appointed AFSCME employees Walter Blair and Jeremy Kruse as administrator and deputy administrator, respectively. The existing officers of Local 114 were removed from their positions. On November 5, a member of AFSCME's Judicial Panel held an evidentiary hearing on the imposition of the administratorship. Following the hearing, the hearing officer issued a written decision upholding the administratorship.^[5]

As part of his administrator duties, Kruse began reviewing Local 114's bank statements and finances. He saw payments made to the law firms but did not find invoices, other billing records, or the client file from that representation. In November 2019, Kruse sent a letter to the law firms on behalf of Local 114, requesting the client file, records of correspondence, representation agreements, copies of bills and an accounting for money paid for services.

On November 20, 2019, the law firms initiated an interpleader action in superior court against AFSCME, Blair, Maycock, Komac, Local 1849, and Local 114 to determine ownership of Local 114's client file and the law firms' responsibilities under the Rules of Professional Conduct (RPCs).^[6] Local 114, AFSCME, and Blair filed a joint answer, which included a counterclaim demanding an accounting from the law firms. In March 2020, Local 114, AFSCME, and Blair moved for summary judgment, asserting that Local 114 was entitled to its client file and an accounting as a matter of law.

In May 2020, following an election, Local 114 members changed their union affiliation from AFSCME and Council 2 to the Guild of Pacific Northwest Employees. The parties disputed whether Local 114 continued to exist after this representation change.

In September 2020, the trial court denied the motion for summary judgment. The court concluded that as an organizational entity, Local 114's client relationship with the law firms would generally not be affected by a change in control. But it noted that Maycock (and possibly Komac) were co-clients of the law firms, and Local 114 was now controlled by the adverse party in the litigation. It...