The City of Scranton and Scranton City Council are two separate and distinct government entities. Suing the City of Scranton is not suing Scranton City Council, and vice versa.

That being said, there's no conflict of interest where the city could benefit from any prejudice toward Olde Good Things. Hughes doesn't take his marching orders from the mayor. He gets paid from council's budget. Hughes has no obligation or duty to the City of Scranton, only to City Council, so he's not breaching any duty to represent a client against the city.

It's Olde Good Things that should be wary, regardless of who their counsel is. Not saying it should be wary at all of Hughes, but you don't have to be a municipal solicitor to sell any client down the river. They're the plaintiff in the action. Realizing any caveat is upon them.  

It doesn't look it on its face, but there's a separation here.

I'm of the belief that Hughes was on board with Olde Good Things before he accepted the solicitor's job. In any event, the ethical end of it is somewhat addressed when Hughes notified Olde Good Things of his municipal related position and fully notified council of any actions he's involved with against the City.

Ethically speaking, however, looking at it judgmentally from where we sit, in the negative, of course, it clearly sounds of conflict of interest. There's the undeniable feature of Hughes' influence over council. He knows law. Council does not. Hypothetically, what's to stop a settlement from being reached that's inclusive of favorable treatment of some future legislation in the nature of "less than adequate" legal guidance to council members?  How would council know? It wouldn't.  Gene Hickey screwed over more councils than you can shake an unconstitutional ordinance at by staying silent on guidance. See sale of Golf Course. Lawyers do that, you know, not saying that Hughes would follow suit. 

Worthy of mention is that while Hughes gets paid from council's budgeted allocation, that nonetheless comes from the main pot of gold provided by the taxpayers, which is the gold that Olde Good Things seeks a piece of.   

Just my two cents.