Brooklyn Navy Yard Cogeneration Partners, L.P. v. Superior Court of Orange Cty.

Defendants Brooklyn Navy Yard Cogeneration Partners, L.P. and Mission Energy New York, Inc., and specially appearing defendant B-41 Associates, L.P. (collectively, BNYCP) seek extraordinary relief from an order disqualifying their counsel, LeBoeuf, Lamb, Greene & MacRae, L.L.P. (LeBoeuf), for a conflict of interest. This case presents the issue (surprisingly unexplored in California case law) of whether a conflict of interest arises when an attorney represents a subsidiary corporation in one matter while undertaking a representation directly adverse to the subsidiary’s parent in another, unrelated matter. We issued an alternative writ and heard oral argument on the issue. We now grant BNYCP’s petition in part, directing the respondent court to conduct a new hearing utilizing the rules and guidelines we establish in our discussion below.

I

LeBoeuf has represented BNYCP since February 1991 on various matters related to the construction of a 286-megawatt cogeneration facility (the Facility) owned by BNYCP and located at the Brooklyn Navy Yard Complex in Brooklyn, New York. PMNC, a Joint Venture (PMNC) agreed to design and construct the Facility pursuant to a turnkey…