Controls on Law Practice by Those Not Admitted to Bar: 1. Ostracism 2. Admission before the Ct. Three Institutions Central to Shaping Prof Ideology & Practice Environment: 1. Law school 2. Large firm – senior/ mentor relationship 3. Bar assoc. Who Regulates Lawyers? 1. State Ct as adjudicator and policy maker – Fla. Bar v. Brumbaugh 2. Legis is excluded from participation in reg of lawyers Doctrine of Inherent Authority: B/c reg of lawyers is part of judicial power vested in cts., any legis act dealing with lawyers, unless fully consistent w/judicially imposed framework & policy, is said to violate sep of powers provisions of state cons.
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Judicial Claim of Exclusive Authority Idaho State Bar Ass’n v. Idaho Public Utilities (Idaho 1981) Facts: State public utility commission adopted rule that non-profits, motor carriers and small utilities could be represented by an officer, another rep or an attorney in proceedings before the commission. Idaho state bar challenged on grounds that rule „derogated con granted Supreme Ct control over legal practice in state. Issue: Whether commission‟s rule is uncon b/c it violates sep of powers Holding: 1. Rule is uncon insofar as it interferes with judicial supervision of practice of law by allowing third person representation 2. Rule is con as to officer representation on basis of principle of comity, since commission‟s proceedings are quasi-judicial/ administrative.
Lloyd & Michel v. Fishinger (PA 1992) Facts: Fishinger was injured in car accident. Lloyd is ambulance-chasing lawyer. Fishinger signed contingent fee agreement while in hospital, but later retracted orally and in writing. Lloyd sues Fishinger for breach of K. Fishinger moves to dismiss on basis of Penn statute that says no K good if signed during first 15 days of confinement of injured person. Issue: Is stat constitutional? Holding: No, violates separation of powers and authority granted to judiciary to regulate prof conduct. Outcome: Remanded for consideration of whether lawyer‟s conduct violated Code. Variations Among States and with Feds: - Some states hold leg regs of law practice is uncon ONLY where it infringes directly & injuriously w/ core fncts of ct. - Feds ruled by legis – flows from Con grants to Congress to create the lower fed cts. And define their jurisdiction. p.861- 862 – Social/ Psych Analysis Degree of self reg is almost unmatched – replete with failure/ probs. Sense that self reg requires forms of self-restraint. When matters are left to self reg, environ becomes keenly important. What‟s so important about institutional culture? Workplace environ becomes important. Consider difference b/w local small shop and large global practice. 2
Hishon v. King & Spaulding (US 1984) Facts: Hishon sued under Title VII for gender discrim in not being promoted to partner. Issue: Whether Title VII applies to partner selection decisions Holding: Yes Rationale: 1. argues advancement to partner can never be a “term, condition or privilege of employment” under Title VII since this involves change in status from e-ee to e-er. Ct says Title VII still applies b/c partner is a term, etc., of employment. Need not be employment per se. 2. argues Title VII exempts partnership decisions from scrutiny. Ct. says if C had intended this, it would have expressly included such an exemption in Title VII wording. 3. argues con rights of expression & association. Ct. says no con right to discriminate in private sector. Discussion: For Title VII to apply, a contractual relationship of employment is required. Here, benefit of partnership is linked directly to employment relationship. Powell‟s Concurrence (dictum): King obligated itself by K to Hishon, but Title VII does not regulate the management of a law firm by its partners. Outcome: Settled for damages. No case involving a law firm as yet to award specific performance.
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Price Waterhouse v. Hopkins (US 1989, plurality) Facts: Female accountant denied partner status. Holding: Once establishes that her gender played a role in an employment decision, burden shifts to e-er to show by a preponderance of the evidence that it would have made same decision had gender not been taken into account. When applicable, fed law overrides any judicially created state policies concerning regulation of legal profession. Fair Debt Collection Act applies to lawyers collecting for their services, Heintz v. Jenkins (US 1995). Admission to Practice: 1. Complete curriculum at ABA-approved law school 2. Pass bar a. Challenges – too subjective and race-biased. see Delgado v. McTighe (ED PA 1981) Held no discrim. Lower grades for African-Americans would have occurred at whatever combo of scores on Multistate and state parts. b. Solutions accepted – add more objective component (mult. ch.), allow retaking of exam. 3. Pass character and fitness req. Three National Orgs Participating in Setting Legal Stds: 1. ABA – 183 accredited schools 2. AALS – Assoc. of American Law Schools 3. LSAC – Law School Admission Council: administers LSATs
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Character & Fitness 1. Law school admission 2. Bar exam 3. Character & fitness Above may be influenced by: 1. Race 2. Sex 3. Disability 4. Foreign birth In Re Hale (Ill. 1998) Facts: Matthew Hale is by his admission an avowed racist. He is head of World Church of the Creator. He publishes inciteful material. Applies to the bar after passing the exam and is rejected. At his hearing he claims to be able to abide by US and State cons even though they are in contradiction of his personal racist beliefs. Issue: Is it constitutional to deny Hale admission to the Bar on the basis that his personal advocacy indicates an absence of good moral character or fitness to practice law? Holding: 1. Fundamental truth of protection of individual dignity is entrusted to the legal profession. 2. It would be contradictory for the guardian of that trust to be acting in a manner that undermines that value. 3. Where First Am. and fundamental truth clash, fundamental truth must be preferred. Dissent: 1. Hale vowed to uphold the Con laws. No evidence of any conduct otherwise. That abuse of bar reqs may occur is merely speculation at this time. 2. From now on, bar committee will have to review beliefs of each applicant 3. Should allow him in bar and discipline when/ if he breaks code. This is better mechanism. Case Law: In Re Stolar (US 1971, 5-4): Admission bar case where Ct held petitioner could not be penalized solely b/c he personally espouses illegal aims. Baird v. Arizona (US 1971, 5-4): State may not inquire about a man‟s views solely for purpose of withholding a right or benefit b/c of what he believes. Both cases involve applicants who refused to reveal their views, not espoused hatred against minorities and were actively involved in inciting racial hatred. Balancing Test: B/w interests of citizen to comment on matters of public concern vs. interest of govt. in promoting efficiency of public services, stability, security. 5
Elrod v. Burns (US 1976) stands for stringent formula in cases involving curtailing of a public eee‟s First Am rights. Govt must show existence of an interest of vital importance, and Govt. carries burden of showing such interest. Schware v. Board of Bar Examiners of NM (US 1957) Facts: Schware was a former member of Communist party, had used aliases, been arrested and participated in strikes that turned violent. Later went to law school and had many witnesses vouch for his good character. Bar committee rejected him. Outcome: State ct. decision overturned by Supremes. Bar admission granted. Holding: Any qualification, re: character & fitness req, must have a rational connection with applicant‟s fitness or capacity to practice law. Koningsberg (US 1957): Supremes overturn State Ct decision rejecting bar application on basis of failing to answer questions about political party membership where K was not first explicitly warned he could be barred for this reason. Koningsberg II (US 1961, 5-4): On remand Cal bar examiners asked K if he was a member of the C party and indicated clearly that refusing to answer would be regarded as obstruction of necessary inquiry into fitness. K refuses to answer on First Am grounds. Supremes now affirm Cal state b/c membership in C party is legit inquiry according to Harlan. In Re Anastapolo (US 1961, 5-4): Same issue as K II refusing to answer if he was in the C party was basis for denial of admission. A became philosophy and law prof. In „80s, Ct invited him to reapply to bar! US v. Wunsch (9th Cir 1996): Male attorney sends angry newspaper heading to female AUSA. Dist. Ct. makes him apologize and refers case to ct‟s disciplinary committee. On appeal, 9th Circuit holds lawyer‟s conduct was NOT in violation of local rules, was NOT conduct prejudicial to the administration of justice, and NOT uncon under Cal state law prohibiting lawyers from engaging in “offensive personality” on grounds that law is unconstitutionally vague. ADA “reasonable accommodation” in class 1. When does a disad become a disability? 2. What constitutes a reasonable accommodation? 3. How to evaluate claims based on neurological/ psych disabilities (most difficult) Gender bias “Decisions made or actions taken b/c of weight given to preconceived notions of sexual roles rather than upon a fair and unswayed appraisal of merit as to each person or situation.”
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D. Rhode, “Perspectives on Professional Women”, 1988 Double Bind: To succeed in professional world, women must cultivate traits associated with success competitiveness, assertiveness verging on aggressiveness, dedication and emotional detachment. These are incompatible with traits commonly viewed as attractive in women – cooperation, deference, sensitivity, supportiveness. Professional women bear additional burden of keeping house, and so work more hours in sum. In end, women must conform to male model of success, including standard male workplace obligations. Unconscious gender bias can operate on three levels: 1. Prototype – images associated with members of particular occupation 2. Schema – personal characteristics & situational factors used to explain conduct. 3. Scripts – definitions of appropriate behavior in given situation. So when a female applicant for a given position does not fit the evaluator‟s prototype, her credentials will be judged w/ greater skepticism. Low expecttions of ahievement become self-fulflling prophecies Geraldine Segal, Blacks in the Law Howard U., plus 3 more southern schools, still represent where most black lawyers have been educated. National Bar Association (1925) designed to be the chief professional assoc. of black lawyers Wilkins & Gulati, “Why Are There So Few Black Lawyers in Corporate Law Firms?” in class Breaking the glass ceiling Two Explanations: 1. Shortage of black applicants 2. Continued racism No incentive for firms to change their practices regarding attracting blacks since easier/ more cost efficient to invest scarce training in average whites in hopes that a few will rise to level of high-quality partner. Result is that since firms show no sign of changing their practices, blacks more likely to select situations where they are clearly favored, where their attributes are recognized, and thus they tend to choose strategies that further this goal and further decreases their chances of success in corp law firm. Retention, not recruitment, is key to increasing # of black lawyers. Firms provide additional binds for Blacks – lack of mentors, increased pressure to perform exceptionally or confirm assessment that Blacks are intellectually inferior. Problem is not explicit racism in the firms, rather subtle transformations of informal grievance procedures into mechanisms for suppressing conflict. Hopwood v. Texas (5th Cir. 1996) the state (UT law school) can‟t use race as a decisive factor in the admission process.
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Professional Discipline 1. Usually disciplinary bodies investigate repeated instances of neglect and incompetence 2. Clients tend to complain about lawyer fees/ charges – something hardly ever investigated 3. Large law firms shield individual lawyers from wrongdoing charges Lawyer Disciplinary Proceeding: Due Process model 1. Pre-charge screening (like prob cause hearing to determine sufficiency of the charge) 2. Right to notice and statement of the charge 3. Right to discovery 4. Right to counsel (NOT right to jury trial) 5. Right to subpoena witnesses 6. Preponderance of the evidence standard (in some j‟s – clear & convincing) 7. Right to judicial review Rule 8.5, Model Rules (a) Fla bar can discipline. Example of head of Bankruptcy Bar not licensed in Fla and not wanting to take the bar – Local lawyer makes motion to disqualify him. Question of turf. Argument to keep him – he‟s a figurehead, a rainmaker, only of-counsel, not really doing anything. Fla can go after him under new second sentence for unauthorized practice of law (UPL). (b) In above example, would Fla law apply or NY law? NY is a Code state and FL is a Rule state. Raises conflicts of law question, not just question which tribunal will apply. What to do when lawyer ∆ takes 5th Am? What does this mean in a disciplinary hearing? IS it a default judgment – does it allow Fla Sups to invoke R. 38 sanctions? Do any of these rules have any effect for lawyer competence?
Spevack v. Klein (US 1967) Holding: 1. A lawyer cannot be disciplined for failureto respond in a disciplinary proceeding when failure consists of invokng a con privilege. 2. Fifth Amendment may be invoked in disciplinary proceeding to avoid giving incriminating testimony. ? But NY Ct of Appeals limited Spevack to criminal proceedings see Anon. Attorneys v. Bar Ass’n of Erie Co., where the Fifth could not be used to protect themselves from disciplinary proceedings. Purposes for Disciplinary Action: 1. Protect the public 2. Protect integrity of system 3. Deter further unethical conduct, and where appropriate rehab the lawyer 4. Educate other lawyers and deterrence in others Model Rule 8.4(d) replicates DR 7-102(A)(5): A lawyer shall not engage in conduct that is prejudicial to the administration of justice. 8
In re Masters (Ill. 1982) (reviewed in class) Facts: Masters (a lawyer, former state prosecutor) advised client to pay extortion $ to a business agent who Masters knew to be violent. Masters personally delivered the payments ($1000 every 6 yrs). After paying 4 for 5 years, he advised client to report matter to feds. Outcome: Not guilty of assisting a client‟s criminal conduct (client was victim not perpetrator of crime) Guilty of engaging in conduct prejudicial to the admin of justice, since as a lawyer he should have known to advise him to report incident from onset. Unprofessional, unseemly, brought legal profession into disrepute. Dissent: DR 7-102(A)(7) was unclear as to what conduct was prejudicial. In past it had only been applied to lawyer misconduct in a pending legal proceeding. See Table of cross references to Model Code. Model Code included a broad mandatory obligation on part of lawyers to report unprivileged knowledge of professional misconduct. Model Rules narrows obligation to cases that raise a substantial question as to the lawyer‟s “honesty, trustworthiness or fitness as a lawyer in other respects.” See 8.4(d) Discussion: What should Masters have done instead? Is the bigger problem that he delivered the $ himself, or that he continued to do this for 5 years? Answer is he should have done something. Maybe not call cops, but not what he did Competence 1.1 - Consider competence as client‟s perception, thereby infuenced by identifying with lawyer. - Advisory Notes indicate counseling is contextual. Need to consider circumstances under which lawyer is giving the counseling. Maybe this applies to Masters. Emergent conditions.
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In re Himmel (Ill. 1998) Facts: Casey (lawyer) represented Forsberg on p.i. matter arising from motorcycle accident. Casey settled for $35,000. He was supposed to give $23,233 of that to Forsberg, but kept it. Forsberg hired Himmel to get her $ from Casey. Himmel reaches agreement with Casey for $75,000 in exchange for which Forsberg would drop any crim, civil or att discipline claims against him. Casey doesn‟t pay. Himmel sues, recovers $15,400 ($10,400 from his own efforts) and takes no fee. Casey disbarred for other unrelated reason. The Commission begins disciplinary proceedings against Himmel for failing to report Casey‟s misconduct. Outcome: Hearing Board finds Himmel violated Rule. Review Board recommends dismissal of complaint. Supremes suspend Himmel for 1 year. Issues: 1. Did Review Board err in concluding Forsberg had warned Commission of Casey‟s misconduct? 2. Did Review Board err in concluding Himmel had not violated Model Rule? 3. Does proven misconduct warrant a censure? Holding: 1. Client‟s reporting is not a defense to attorney‟s failure to report same incident b/c Rules control att conduct and do not apply to laypersons. 2. No att-client priv here since third ps were in room when client disclosed info to Himmel. Thus, info not privileged and per rule, Himmel had obligation to report it. Failure to do so is clear violation. In Class Discussion: Rule 8.3: (a) Having knowledge vs. who knows – actual knowledge is knowing firsthand, and not being impaired. Knowledge would presume to include information and belief, b/c you get this from the client. Change in language to “who knows” narrowing of lawyer responsibility. Substantial also a narrowing modifier. Difference b/w substantial and question. A ratting out rule. (b) Judge (c) Exception of info in 1.6 – confidential info per Rule 1.6 is a steel trap – can‟t NOT disclose. So this section that says you are not required to disclose is in conflict with 1.6 Rule 1.6 “taintshop” with regard to confidentiality – to put someone else in possession of confidential information therefore setting yourself up to be disqualified from a case.
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Berkey-Kodak Incident Facts Fortenberry is lawyer working on large Kodak case with senior partner of his firm Donovan Leisure, Perkins. Perkins lies under oath that he has destroyed documents the opposing counsel requested. Fortenberry knew Perkins was lying. During last week of trial, Perkins admits to judge he lies, is charged with contempt of ct and sentenced to 1 mo. in jail. Brill, “When a Lawyer Lies” - Fortenberry never disclosed Perkins‟ lie which he was obligated to do since he knew P was lying. Brill suggests F had this obligation. - Rules are in conflict w/ large law firm culture that teaches young associates to not whistleblow (intimidation, road to the top) Murphy & Demory, LTD v. Murphy (VA Chancery unreported 1994) Facts: M&D, a consulting firm specializing in assisting clients to secure defense contracts, sued Murphy for breach of employment K and fiduciary duties when he formed new competing business. M&D also sued M&D‟s lawyers (Pillsbury) for assisting Murphy. Outcome: Murphy guilty. Lawyers guilty of legal malpractice for assisting Murphy in his efforts. Also for dual rep of Murphy and M&D without getting M&D‟s consent. Also problematic that junior associates at Pillsbury who complained of conflict of interest went unheard – clearly sign of failure to have effective internal mechanism – see 5.1(a) &(b); 5.2(b) Rosenfeld-Rectifier fee agreement Partners Cohen & Riordan spend 5 years working on complex lit matter for firm. They don‟t generate much in fees during this time, but are paid in partner shares. When settlement is imminent, they demand double share of firm‟s profit. Firm refuse, and lawyers leave firm taking client with them. Lure client by offering lower fee (less than 10% of award). App ct holds lawyers‟ action was a breach of fid duty. “Grabbing & leaving” is not in itself a breach of fid duty, rather manner in which it is done is subject to constraints imposed by virtue of status as fiduciaries. Non-compete clauses are often not enforceable on grounds that they interfere w/ clients right to choose a lawyer and professional autonomy of lawyers.
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Balla v. Gambro, Inc. (Ill. 1991) Wrongful Discharge of In-house Counsel. See 1.13 Facts: Balla (in-house counsel) fired for reporting that Gambro had knowingly accepted kidney dialyzers that were not in compliance w/ FDA regs. Sues Gambro for retaliatory discharge. Seeks damages. P. Below: Trial Ct dismissed on basis of no valid action. App Ct. reversed Outcome: Reversed. Trial ct. affirmed. Issue: Whether in-house counsel should be allowed the remedy of an action for retaliatory discharge. Holding: No protection against retaliatory discharge in Ill. b/c it is an employment-at-will state. Here, Balla was not just e-ee, but in-house counsel, under which he had obligation to report wrongdoing. Rationale: 1. Pub policy reasons for ret discharge tort are to safeguard public. Here, those goals are met by att‟s duty to report violations under Code. No need for additional tort safeguard. 2. If in-house att granted right to sue for ret discharge, might result in e-ers being less forthright w/ their counsel. 3. Inappropriate for e-er to bear cost of in-house counsel adhering to ethical obligations. This is lawyer‟s sacrifice/ burden. Case Law: 1. Kelsay on pub policy rationale, ret discharge recognized where e-ee was fired for filing workers comp claim, since failure to recognize would undermine purpose of Workers Comp Act. 2. Palmateer on pub policy rationale that e-ee fired for helping police in crim investigation of co-e-ee undermined pub policy of deterring crime. 3. Herbster NO ret discharge action recognized where petitioner was attorney and had special relationship with e-er. Dissent: 1. To say ethical obligations of lawyer alone safeguard public ignores reality. 2. Letting e-er discharge in-house counsel “is truly to give the protection and assistance of the cts to the scoundrels.” 3. E-er should not be protected b/c the person blowing the whistle is an att. 4. Better to resign from representing company with ethical violations than to be fired for in terms of career stigma and consequences.
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GTE Products Corp v. Stewart (Mass 1995) Ct recognizes retaliatory discharge claim brought by in-house lawyer, but still upholds summ judgment b/c lawyer hasn‟t established that his resignation amounted to constructive discharge. Wolfram, Modern Legal Ethics (bar Organizations): ABA is largest w/ 45-55% of lawyers Movement in 1920s to make local bars mandatory. Order issued by state sups integration Keller v. State Bar of CA (US 1990) Facts: State bar imposed mandatory dues. ∏s argued that using dues to advance political & ideological ideals of the Bar committee were a 1st & 14th Am. violations – speech & association. Outcome: State sups reject ∏s argument on grounds that state bar is a state agency and exempt from their scrutiny. Supremes vacate & remand – Can‟t use dues to further pol agenda but can use them for legit purposes – like disciplining lawyers. Holding/ Rationale: State bar is more like a labor union than a state agency. Its members are such not b/c they are citizens or voters, but b/c they are lawyers. Thus, subject to the same con rules as apply to labor unions. Cramton, “On Giving Meaning to Professionalism” Professionalism is NOT: (Mere) Civility displaces talk of fundamental issues Absence of competition in legal services people think lawyers are too commercial (ambulance chasers) and might want to back non-compete and exclusionary rules but this has overall deleterious effect on professionalism. Pro bono services only. Representing private clients is the reality of what most lawyers do, and must also be viewed as serving public purposes. Self-regulation. Lawyers need accountability; advances public trust. Point of Article Historically, lawyer‟s primary obligation was to the institutions and procedures of the law. Today, rejecting this model of public responsibilities and moving toward model of total commitment to client. Need to reinvigorate public service model. Notion of civility codes as running counter to goal of zealous representation.
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Legal Education as Socializing Tool Criticisms of Legal Education: 1. Doesn‟t adequately prepare grads for practice of law 2. Process has destructive effect upon character or values of students 3. Law school fails to produce public spirited and socially responsible lawyers 4. Not accessible to all parts of Am society -- $$ Duncan Kennedy, Legal Ed and the Reproduction of Hierarchy (1983) What‟s really going on in law school (the unspoken agenda) How law school contributes to reproduction of illegit hierarchies and how lefties can use the law school experience as part of an activist practice of social transformation Thesis Law schools are political places First Year Experience – either boring and cold, or the occasional impassioned case as example of how NOT to approach an understanding of the law. Notion that the teaching of legal reasoning is a distinct method for reaching correct results ignores reality that politics and economics are at the core of legal ed. Law students should aim to have a „struggle‟ debating policy and embracing challenges to the hierarchy. Stewart Macaulay, “Law Schools and the World Outside their Doors…” Skills learned/ valued in law school – ability to understand & interpret opinions – are not necessarily skills most valued in workplace – fact-finding, instilling others‟ confidence in you, oral competency. Bigger law schools providing theoretical basis of law. Smaller law schools didn‟t rank this as importantly. Process of law school learning is not so much a Socratic search for justice as a Sophist game (to make the weaker argument stronger) Posner, “Law Schools Should Be Two Years Not Three” (1998) In the case of law, the trend to greater competitiveness has been helped by relaxation of regs More competitiveness means lawyers are working harder Law is becoming more like a business at same time that law school is becoming more like a graduate dept internal dissonance. Makes sense to solve rift by making law school 2 years, and more like business school Students save $
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Chapter One Ethics: Imperatives regarding the welfare of others that are recognized as binding in a way that is more immediate than law and more general/impersonal than morals. Lawyers are essentially helping clients to take advantage of the ambiguities of the law. Depending on client‟s stance/ goals, they want laws enforced or relaxed. The essence of these activities is manipulation of governmental authority. Tension b/w client‟s preferred position to lawyer, and position of equality that everyone else deserves by principles of morality and legality. Legal Ethics Deal with Four Subjects: 1. Prohibited Assistance 2. Competence 3. Confidentiality 4. Conflicts of Interest
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Spaulding v. Zimmerman (Minn. 1962) Non-disclosure case. Fraud on the court. Facts: Spaulding father sued Zimmerman car driver for injuries sustained by his son David Spaulding. Also suing Lederman, driver of other car, and insurer. In discovery phase, both sides had a doctor examine David. Only ∆ Zimmerman‟s lawyer found existence of an aorta aneurysm. Parties settled and presented joint application to the ct. Settlement was based on ∏‟s doctor‟s med report, and never was it disclosed to ct that ∏ had aneurysm. P. Below: Trial Ct approved settlement for ∏s but later vacated its own order b/c defendant‟s lawyer failed to disclose. ∆ appeals – wants original settlement to stick. Issue: Whether trial ct had jurisdiction and/or abused its discretion in vacating the settlement solely b/c ∆ counsel knew that ∏ had an aneurysm. Holding: Trial ct. did NOT abuse its discretion in vacating settlement Rationale: ∆ counsel had no ethical obligation or duty to disclose fact of aneurysm to opposing counsel while case was in adversarial stage. Once it progressed to settlement stage, both parties‟ goals essentially became the joint application to the ct for approval of settlement. At this point, ∆‟s concealment from ct opened way for ct. to later vacate its order. Discussion: Consider action against ∏ lawyer for failing to fully discover action for negligence 1. Special responsibilities of Ct to a minor 2. Special responsibilities of lawyers to ct. FRCP 35 – Upon a party‟s request, Ct may order a physical examination. This is how ∆ gets information about the aneurism. No duty of disclosure about test results, but do need to disclose name of Dr., who would then be available for deposition. ∏ has affirmative duty here to ask Zimmerman the right questions. So it seems ∏‟s lawyer had duty to ask for results. Absent special circumstances, like fraud, mutual mistake or concealment from ct., cts will not set aside judgment b/c a lawyer has concealed adverse evidence from opposing party. Begs question of finding fraud – is insurer defrauding ∏ by failing to disclose? Need to look at elements of fraud: 1.)intent to deceive 2.)reliance As a lawyer do you set up your client (the ins. co.) to commit fraud in order to leverage them into disclosing? By not acting on information, ins. co. is acting fraudulently.
FRCP 26 1993 Amendment requires mutual disclosure of discoverable information relevant to disputed facts alleged with particularity in the pleadings. BUT, Federal Dist Cts may choose to depart from R. 26 in favor of local rules. About ½ do. 16
Now, under 2000 rules, we have discretion to blow whistle on our own case. See 1.6(b). See 2.1 – Advisor. Ct can sanction under inherent powers where disciplinary rules don‟t provide punitives. Cite Chambers. MR 4.1 (a) doesn‟t apply b/c no false statement (b) doesn‟t seem to apply even though we have omission problem, a kind of misrep – a passive/ negligent representation. B/c no state law is violated, and state law says there is no duty to disclose. R. 8.4(c) The Catchall. How the Ct in case Alf testified in stated a claim where there was no duty to disclose but lawyers were dishonest to first secured creditor. Case involved lawyer NOT violating crim or civil law, but is still violating 8.4(c), the catchall, because he doesn‟t disclose since it is not his duty/ problem to do so. Can you waive malpractice or right to file grievance with Florida bar? Obvious con law challenge comes under First Am void for vagueness. In 1981, disclosure req was debated creating a neg misrep claim for failure to disclose, and this was defeated.
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Charles Fried, The Lawyer as Friend If we consider the att-cl relationship as essentially a friendhip, albeit limited in scope from other types of friendships, than it is easy to see how the same considerations we give to other friends – not to lie, cheat on, or humiliate them – should be given to the C. These considerations therefore prohibit such conduct on behalf of the C. Wasserstrom, “Lawyers as Professionals: Some Moral Issues” Role-differentiation is another way of saying amorality – L steps into professional role and doesn‟t judge the morality of what his C is asking him to do, even where it is legal. It is the application of different sets of morals for a particular role. W has problem w/L who embraces role-differentiation as way of approaching legal matters. Cognitive dissonance – Forced to remove yourself from way you have to act b/c of situation you are placed in. Examines two moral criticisms of lawyers: 1. That the att-cl relationship renders L at best amoral & at worst immoral. This accusation centers on L‟s stance toward the world at large. 2. That the very att-cl relationship is morally objectionable b/c it is paternalistic (L dominates over C). Problem is no that Ls are lawless, but that compliance with law does not ensure moral behavior. Standard Conception of Lawyering: Two Concepts: (adversarial) - Partisanship – L must maximize (within etablished constraints) th likelihood that the C‟s objectives will be attained. - Nonaccountability – In repping a C, L is not legally, professionally, or morally accountable for means used or ends achieved. O.W. Holmes Bad Man Lawyer can best understand his role – if you want to know what law is about and nothing else – by undertaking the bad man‟s perspective. In this way, L‟s job is prediction, whch is determining for the bad man the extent to which he can take a certain course of action before running against the public force of the State, thru the instrumentality of the courts as a means of answering questions for „the bad man‟. Law is not a deduction from principles of ethics and morals for the bad man – it is a pragmatic assessment of what the court will do in fact. Pragmatic vs. theoretical approach to the law. We take moral judgment out of equation b/c we don‟t want to make any assumptions, afraid we‟ll get it wrong. Progression of legal thinking/ development: Natural law (law has moral underpinnings) Positivist (law was right or wrong, had an inherent meaning) Legal realism (what courts can do, law is what judges say it is) Crit Legal Studies (law is judges exercising their will/ power and thus furthering their values) Two Possible Solution to dilemma – moral, nat law lawyer vs. amoral, realist lawyer: 1. Increase individual autonomy: Have lawyers engage in moral dialogue with clients and then have them decide objectives of representation. 18
2. Set moral std: Make it not morally permissible for lawyer to use unjust means to achieve an end. Carol Gilligan, In A Different Voice Gender differentiated moral reasoning Boys are concerned with rights and justice Girls are concerned with human relationships and personal responsibility Where is the line between taking advantage of ambiguity/ manipulating facts in your client‟s favor and lying, acting outside the bounds of the law. Lawyer as advocate vs. lawyer as counselor/ advisor/ negotiator
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Commonwealth v. Stenhach (PA, 1986) “Turnover rule” Stands for disciplinary liability not malpractice. Facts: Criminal ∆ lawyers Stenhach brothers charged with hindering prosecution and tampering with evidence for failing to deliver rifle stock of their client in a murder investigation. They claimed attclient privilege to keep existence of rifle stock undisclosed. P. Below: Attorneys convicted on stat grounds. Outcome: Vacated Holding: L must not act or assist in the destruction or unlawful concealment of evidence. Meaning L can not take affirmative steps to conceal evidence, like here. a. b. c. d. e. If L leaves the incriminating evidence where she finds it, can NOT be compelled to disclose info gained from a privileged communication. Once L has it, she can‟t return it to the source, if she has reason to believe that it would be destroyed, unlawfully concealed, or chain will be broken. Most js require L to hand it over w/ 2 caveats: Statements made as part of the ∆ (att-cl priv) don‟t have to be turned over (letters also fall under this exception) Phys evidence that prosecution still could not use per Fifth. L can still hold on to the evidence for reasonable period of time. Prosecution can disclose existence of evidence and information around obtaining it, but CAN NOT disclose that it came from defense attorney. No Fifth problems where att has obtained the incriminating evidence from 3d party b/c no privilege exists b/w att & 3d party. If it come from his C, L should hand it over but not disclose where he got it.
Concealment and contraband stats Make possession of certain items, like instrumentalities, illegal. Apply to defense lawyers as well. In Class: Epistemological demurrer a theoretical „so what‟. Don‟t know the information, so won‟t ask but will infer/ presume and make representations based on these assumptions. Why don‟t lawyers say they don‟t want to know about the rifle? See R. 1.2 – is hiding rifle stock criminal? See R.3.4 – applies to ∆s See R. 8.4 – per this rule, you could advise Nixon to burn tapes before they have been sought on discovery or before lit is pending.
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People v. Belge “Dead Bodies Case” (NY 1976) Facts: Client confessed (to his L) to murder. On client‟s directions, lawyers found 2 bodies, but kept information secret. Tried to strike plea with prosecution – get client committed to mental institution in exchange for info on other two deaths. After trial (client found guilty), lawyers revealed info. Lawyers charged with public health violations for failing to report dead bodies. P. Below: Trial ct. grants motion to dismiss on grounds that att-client privilege extended to keeping discovery of bodies silent. Outcome: Affirmed Distinguishable from Stenhach: 1. Belge lawyers never had possession of the bodies. Never moved them, just left them. 2. Belge involved public health stat violations, not obstruction of justice or tampering. Maybe different outcome if those had been the charges.
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US v. Benjamin (2nd Cir. 1964) Facts: Mende, promoter, Benjamin lawyer, and Howard CPA were charged and convicted of violating Sec Act of 1933. Mende & Benjamin lied about assets and net worth to get Drattell to invest capital. Benjamin put together a misleading opinion letter. Howard relied on M & B‟s statements/ letter to draft an auditor‟s report without verifying any info. Holding: H‟s conduct constitutes fraud, b/c can draw inference that H knew untruth 1. Many cases support conclusion that an actor‟s specialized situation and continued conduct allow drawing of inference that actor did know untruth of what he said or did. 2. Pro forma still carries with it reasonable expectation that transactions described are real. 3. By his own testimony H knew report would be used to get loans. Benjamin stands for proposition that a lawyer/ accountant that shuts his eyes to criminal acts engaged in by his client or represents that he knows something he does not know is guilty for purposes of willlful misrep/ deception. Criminal defender‟s epistemological demurrer – “I don‟t know if you are innocent or guilty. I can‟t know, so I won‟t ask.” But can a corp lawyer NOT play this epistemological game b/c they have affirmative duties deduced from tort/crim law – fid duties? Discussion: 1. Rule 1.4 Communication: “Due diligence requires me to ask…” 2. Why is Howard‟s conduct a culpable state of mind? Why is the opinion letter/ comfort letter not simply negligence/ incompetence or naïve – why is it criminal? Leads to question – is there an affirmative duty to inquire/ investigate a client? a. Incompetence goes to due diligence b. Naïve – a trusting person 3. Rule 5.1 – Rules don‟t require law firm to get an independent audit. A partner/ supervisor who orders an associate to do something that violates the Rules is vicariously liable. Only excuse for partner is to deny he knows associate‟s conduct. 4. Rule 5.2 – Associate‟s responsibilities 5. Rule 1.2 – Does a conviction (here, lawyers were convicted) trigger 1.2? Most of the time. In Benjamin‟s case, it does under 8.4(b) and under definition of „inference‟. Criminal act is predicate, but not ALL criminal acts are predicate to implicate 8.4, like civil disobedience
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Greycas, Inc. v. Proud (7th Cir, 1987) Att-cl relationship was for the purpose of influencing 3d party. J. Posner Liability is not for what you should have known, but for mis rep – saying you knew something you didn‟t. Negligent part is where liability is created to 3rd parties. Facts: L Proud wrote opinion letter for his brother-in-law, Wayne Crawford, so that Greycas would give Crawford a loan in exchange for a security interest on his farm equipment. At time, Crawford had already pledged the machinery to other lenders. Proud‟s letet said prop was free and clear of liens. Crawford defaulted on loan a year later, killed himself, and Greycas sued to recover $$. Ct raises question why ∏ Greycas‟ theory of case was negligent representation and not fraud (intentional tort). ∆ Proud argues: 1. No duty of care to an adversary‟s client (Greycas had adversarial relationship with Proud‟s client Crawford) since, according to Proud, Greycas is arguing negligent misrep and not professional malpractice. 2. Contrib negligence called comparable neg in Ill. where it is a partial defense. Holding: Proud is liable. In tort of prof malpractice and neg representation, case law has established liability where misinformation induced reliance by the 3rd party. Here, it is unreasonable to impose on Greycas duty of double-checking Proud‟s work, absent knowledge of known danger (like fact that Proud was Crawford‟s bro-in-law). Discussion: 1. R. 4.1. But assuming Proud didn‟t know about prior creditors, is 4.1 still violated? Doesn‟t seem so. 2. Non-client third party reliance based on opinion letter – lack of due diligence 3. R.1.6(b)(4) in a bankruptcy proceeding, a demand for the information might come out. Greyhound (8th Cir. 1988): Judgment for lawyer. Greyhound lender couldn‟t recover b/c comparative neg is complete bar to recovery in ND. (where Greyhound negligently prepared documents it gave lawyer in order to get tax break). Privity 1. Traditionally, privity of K with the lawyer (usually clients) was necessary to find lawyer liable for negligence Supremes case Nat’l Savings Bank v. Ward, (1880) 2. Relaxation of privity requirement. a. CA adopted 6 part balancing of factors test b. Restatement of Torts (Second) § 552 Was information supplied for the guidance of others (reasonably relied on) in their business transaction? c. Greycas Was purpose of lawyer-client relationship to influence some other third party? Note in adversarial context, influence on third party doesn’t matter and lawyer rarely held liable b/c he has no duty of care to other side.
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Hazard, “How Far May a Lawyer Go?” in providing assistance to a C that might enable C to carry out an act to some degree illegal Spectrum Analysis: unsuggestive, „neutral‟ advice lawyer as instrument of client‟s crimes. Question arises – where is the line? (matter of degree). Notions of counseling/ consequences/ good faith are all related. Wide range of client conduct that gives rise to civil liability, but which we would not readily call illegal. Lawyer as agent: but excepted from liability where there are facts that render his actions privileged. Vital question is degree of lawyer‟s knowledge. Lawyer engaging in tortious conduct: “Persons acting in concert”. Advice to a tortfeasor is equivalent to active participation in the tort if the advisor knows that the contemplated act is tortious, and if the advice is a substantial factor in causing the resulting tort. Complicity: Accomplice is liable if he aids in planning or committing offense. Enough to have knowledge of facts that „excite suspicion‟; don‟t need actual knowledge.
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SEC v. National Student Marketing Corp (DC Dist. Ct. 1978) Third-Party Legal Opinions (Comfort letters) Facts: NSMC seeks to merge with Interstate. Peat Marwick is independent auditor hired by both companies to prepare comfort letter, a final condition to closing. Discovers inconsistencies but doesn‟t disclose. Sholders approval was obtained based on misleading comfort letter. Holding: A lawyer must take some preventive action when the lawyer issues legal opinions and facilitates a sale of securities knowing that the client has made knowingly false representations in the selling materials. Subsequent action: 1. Central Bank (US 1994, 5-4, per J. Kennedy): Securities lawyers NOT liable under theory of aiding & abetting. Curtails effects of NSMC. 2. 1995 Amendments to SEC Two Consequences: a. NSCM action codified, so Central Bank would NOT rule today. b. Liability of principals now extends to those directly or indirectly engaging in proscribed activity. Lawyers can be charged primarily, as principals now. In Class Discussion: 1. White & Case didn‟t disclose letter when they received it? Is there a Rule violation? 2. R. 2.3(b) Koniak, The Law Between the Bar and the State Continuing struggle b/w profession & state over which entity‟s version of law reigns Traditional conception Professional ethics does not compete w/ state law, it merely supplements it, providing norms. K says that actually it‟s not so simple since not clear where the point that state law „leaves off‟ and prof ethics pick up – where is it & where should it be that‟s the conflict. Raises qs of self-regulation & autonomy. Her version Law should be more than what‟s officially endorsed by the state. That way the normative ideals get infused into conception of law, not just sit outside of it. Central conflict Per the Bar, when state laws clash w/ ethics rules, ethics should trump. Per state, legis-enacted laws should trump.
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Competence 1. Checks on Competence: Burger Brought attention to fact that lawyers lack competence training. - Now we have lit skills. Legitimized clinical programs and skills teachers at law schools. - CLE - Peer review 2. Causation is key. Need to show the attorney‟s wrong caused the harm. So leads to notion of case within the case 3. Notion of case within the case Need to litigate the case within the malpractice case. In defending a legal mal claim, Ls are put in awkward position of defending opposing party (to show outcome was not affected by his lawyering). 4. Standard of care: Ls are going to be held to stricter std of care than ordinary prudent man. How to determine this? Q of whether local, nat‟l or transn‟l stds should apply. But per Hand (Tugboat case), custom provides no defense if the custom itself is negligent. So expert testimony as to customary std of care among Ls may or may not help. 5. Ethics violations are NOT basis for Malpractice 6. Rule 1.1: What‟s at Stake: $$ vs. needs of client. Doesn‟t matter what kind of client you are representing – low, middle, high income, rather you the lawyer decide how competent you want to be based on the questions you ask. Procedure: 1. FRCP 4 – Drafring complaint in conformity w/ pleading rules 2. FRCP 26 – Discovery is allowed but regulated by Ct 3. FRCP 11 – Sets limits sanctions 4. FRCP 37 – Sanctions for disco abuses 5. FRCP 23 – Ct must certify class 6. Inherent power cite Chambers
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Lucas v. Hamm (Cal 1961), 1.1 Legal Mal 4 (tort) elements Facts: Lawyer created an invalid will b/c he failed to correctly take into account the Rule Against Perps. Sued by those who should have been the beneficiaries. No privity b/w lawyers and beneficiaries. (Ct. says doesn‟t matter) Holding: Since this law is so confusing, lawyer is NOT liable to understand the law that other similarly situated lawyers with his expertise would not reasonably be expected to understand(!). In Class Discussion: Isn‟t the Ct creating an impoverished std of care thereby creating an ethics violation. Demonstrates some contexts (T&E) that may be so complex we won‟t hold lawyers to know – wont judge them on competency Note 42, p. 168 keep in mind lawyer roles (traditionally advisor, advocate, negotiation)
Smith v. Lewis (Cal 1975), 1.1 Holding: Ct held lawyer was liable for failing to know pensions were part of community prop, since that knowledge was common among lawyers at time, and failure of L to know = incompetence. In Class Discussion: Std of care: 1. Lawyer as counselor/ advisor 2. As advocate – it is maybe easier to prosecute for malpractice since we have a trial record 3. As negotiator – 1.2 – client allocates authority, 1.4 – communication. So a violation of these rules might make it easier to bring a malpractice action, though a violation is not per se malpractice. Question: To what extent does admission to practice, bar pass rates, etc. increase competence Rule 1.8(h)
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Strickland v. Washington (US 1984) Facts: L is assigned to defend Washington. Washington ignores L‟s advice & confesses/ waives right to jury trial. Washington sentenced to death. Action brought against L for ineffective assistance in violation of 6th Amendment. Holding: Strickland two-tier inquiry led to conclusion that counsel was NOT ineffective: 1. Was counsel‟s performance reasonably deficient (shows breach of duty)? 2. Did the deficient representation result in prejudice? Rationale: Even a finding that counsel was in error or provided deficient defense is not enough per two part inquiry. ∆ has to show that there is a reasonable probability that, but for counsel‟s unprofessional errors, the result of the proceeding would have been different. Dissent (Marshall): 1. Prejudice should be presumed if counsel has performed deficiently. Not a question to be determined post hoc. 2. Criticized heavy presumption of competence lower cts were to apply 3. Capital cases should apply higher std – more than a showing that counsel acted reasonably. Wiggins v. Smith (Warden) (US 2003) ??? Facts: Case goes up on habeas thru state cycle. Habeas denied. Moves to fed cycle. Habeas granted at trial level. Reversed on appeal by 4th Cir. Goes to Sups. Application of Strickland – reasonable professional judgment Proffer of mitigation on life history, background etc. Issue: 1. Is appeal conflicted out – need panel att 2. Will trial lawyer put in self-indicting affidavit (routine request)
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Mickens v. Taylor (2002) Facts: VA jury convicts murderer. Sentenced to death. Files habeas writ. Claims conflict of interest – lead trial att was representing victim on assault and concealed weapons at time of murder. Issue: If trial att represented victim at time of murder, is this a reversible error b/c of conflict of interest? Outcome: Dist denied habeas. 4th reversed and granted rehearing. Affirmed. Supremes affirmed – no conflict. Discussion: Seems like reasonable probability of prejudice.
Mitchell v. Kemp (11th Cir 1985) Facts: Capital case. Young man with no priors commits string of robberies and murders. Sentenced to death. At sentencing, L relies on procedural arg. Ct rejects this, and L offers nothing more (doesn‟t present character evidence, mitigating evid, plea for mercy). Holding: Lower Ct decision that no counsel misrep occurred is affirmed b/c failure to present mor was not prejudicial in light of guilty plea, and failure to raise character evidnce at sentencing was problematic, but was result of strategic choice. Outcome: Supremes deny cert. Marshall, Brennan & Blackmum dissent on denial of cert. Constructive Prejudice Prejudice is presumed in certain cases, per Strickland: 1. Denial of counsel 2. State interference 3. Failure to file Anders brief – results in automatic reversal. (Appellate counsel wishing to withdraw from a case on grounds that an appeal is meritless must file a brief referring to anything in record that might support the appeal). 4. Geders situation – where ∆ is prevented from conferring with counsel for extended period (like overnight trial recess).
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Confidentiality Client Confidence – Two Sources: 1. Agency law 2. Law of evidence Professional duty of confidentiality is broader however than both agency and evidence law provide. Attorney-Client Privilege: Restatement of Law Governing Lawyers § 68 (p. 912 stats) 1. Definition: A communication (any expression, including documents/ other records) made between privileged persons (the client, prospective client, the lawyer, agent of either) in confidence (if communicating person reasonably believes that no one will learn the contents of the communication) for the purpose of obtaining or providing legal assistance for the client. 2. Scope: a. “Client” includes prospective client (1) Payment of fee not necessary to show relationship (2) Privilege continues after att-client relationship ends (protection continues indefinitely) b. Communication (1) Can be verbal or non-verbal, but only applies to communications client makes to lawyer for purpose of obtaining legal advice. (2) NOT intended to be a blanket privacy rule (3) Does NOT include: (a) Observation lawyer readily makes while receiving communication (b) Pre-existing docs, or docs made for other purpose than seeking lawyer‟s advice (like a diary or tax papers; see Fisher) (c) Physical evidence of a crime (poisonous tree doct.; see Stenhach) (d) Communication made for public consumption, or for other 3rd party, like a suicide note handed over to lawyer. Rule 2.2 (still in effect in Fla.): - (a) threshold req of consultation regarding risks, consequences and getting consent - (2) twin showing: objectively verifiable reasonable basis & best interests - (3) impartiality and concurrent client analysis – conflict analysis. Cite to 1.7. - (b) continuing duty analysis – doesn‟t 1.4 communication cover this? - (c) withdrawal req. “Typhoid Mary issue” Cant pick up contaminated issues Joint Clients “Co-Client Rule”: Communications on the subject of the corepresentation are not privileged against use by one co-client against another. Cooperating Parties “Pooled Information” or “Joint Defense”: Common interest arrangement c. Exceptions d. Waiver – Priv continues indefinitely unless action or inaction of client ends status of the communication. Question of whether a compelling state interest can ever be used to force att to reveal confidential material – like when info could be used to exonerate a charged individual. e. How Waiver occurs: (1) Action – by consent (2) Inaction – by conduct inconsistent with maintaining the privilege. Putting issue in controversy. See R. 35 like medical exams. 30
(3) Subsequent disclosure: von Bulow I –– actions by family members in handing over (some) material to cops made their disclosure to ∆ available b/c privilege waived when 3rd party is involved (cops). Waiver by implication. (in fairness) But what about common interest exception to waiver? (4) Inadvertent disclosure – E.g., sending to the wrong #/ address by mistake. f. Who Waives? (1) Typically the client (2) Restatement §128 – Lawyers have implied authority to waive a client‟s confidentiality rights in course of investigation. What about CA Board saying that a situation can occur where an obligation of confidentiality can arise even where an att-client priv hasn‟t arisen yet?
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Upjohn v. US (US 1981) Att-client priv. within corporate context. Consider 8.5 choice of law international jurisdictions. Rehnquist Facts: Upjohn Corp learned of potentially illegal bribes made by its foreign offices to foreign govts. Investigated this by sending questionnaire written by gen. counsel and approved by Upjohn Chairman to various e-ees asking for details. Upjohn voluntarily submitted a prelim report to SEC including list of e-ees who filled out questionnaire. IRS joined in and subpoenaed the questionnaires and memos/ notes from related interviews. Upjohn refused on grounds that they are protected communication under att-client priv. P. Below: Questionnaires are NOT privileged b/c they are not communication made by control group (defined as those in charge of corp.) Outcome: Supremes reverse. Questionnaires ARE privileged. Lawyers notes of oral interview are work product. Holding: Control group test rejected – not realistically applicable since often in a corp it is the mid-level e-ees that have the information sought, therefore they are the ones who need the att-client protection. Questionnaires are proteted under att-cl. Gen counsel notes protected under work product. Special exception for att‟s notes/ memos made of oral interview (b/c they are the att‟s impression of what the witness said and thus subject to distortion). § 123 Restatement of Law: Broadens Upjohn holding to basically any communication b/w agents (current & former) and counsel, including communications outside scope of employment, and those NOT directed by a superior. Reasonably need to know test – Privilege extends to agents of org who reasonably need to know of the communication in order to act for the org. Communication = a legal matter of interest to the org. (broad)
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Work-Product Doctrine 1. Governs documents prepared in anticipation of litigation that do NOT include communications protected by att-client privilege. 2. Hickman v. Taylor Codified at Fed R. Civ. P. 26(b)(3): a. Ordinary work product: Upon showing of substantial necessity, a material is discoverable if not getting it would result in undue hardship. Examples: (1) Impeachment (2) Witness is unavailable/ hostile (3) Undue expense/ delay b. Special protection: Where lawyer‟s mental impressions, thoughts, opinions, conclusions are involved, Ct will protect against their disclosure. Should be protected b/c (see p. 216) 3. Exception No work-product protection for material prepared as part of future or ongoing crime or fraud. 4. Arthur Young 1984 (independent auditors) NOT within class protected by work-product. Per Burger: B/c auditor‟s role is public disclosure; he is supposed to be disinterested party in this role vs. advocate role of attorney. Resulted in ‟95 stat b/c auditors and accountants didn‟t like the Arthur holding: Tax advice is now protected like legal advice in limited circumstances. 5. Restatement §139 Maj rule: “Work product immunity may be invoked by or for the client on whose behalf it was prepared.” Discussion: 1. Four possible protection tests (both current and former?) from narrowest to broadest: a. Entity privilege b. Control group – Ct rejects this c. Need to know the communication in order to act for the organization– Restatement § 123 std. d. Subject matter – more similar to FRCP and Evidence. Ct goes with this. 2. Why does corp need a privilege? 3. Rule 4.2; 3.4(f)
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Fisher v. US (1976) Facts: Dr. Mason was under investigation by IRS. He handed over documents IRS was seeking (copies of tax returns, correspondences b/w them and their accountants) to his lawyer. IRS issued summons for the papers. The lawyers refused to hand them over on grounds that being compelled to do so would be a violation of their 5th Am rights against self-incrim. Issue: 1. Whether the 5th Amendment protects an attorney from refusing to hand over documents that would incriminate his client? 2. Whether the attorney-client privilege protects an attorney from being compelled (through a summons to produce papers) to hand over documents given to him by a client where those documents would have been privileged in the hands of the client by reason of the 5th Am. 3. Whether the documents could have actually been obtained from the client in this case, or whether the client‟s assertion of a 5th violation is valid. Holding: Under att-client privilege pre-existing docs in hands of lawyer are exempt from subpoena only if under Fifth the docs would be exempt from subpoena in the hands of the client. 1. The 5th does not protect an attorney from handing over documents that would incriminate his client because the plain language of the text is for protection from self-incrimination. L not included. 2. Yes, the attorney-client privilege protects an attorney from handing over papers that would have not been able to be compelled from the client by reason of the 5th. 3. No 5th violation would have occurred here by compelling the production of the papers since: a. Govt did not force taxpayer to draft the papers. Not compelled, so content of papers does not implicate 5th. b. The papers are not testimonial on their face – their truthfulness has not been averred to so they only contain the potential to incriminate him. c. Conceding the existence of the papers by handing them over is also not a testimonial act since the existence of the papers are “a foregone conclusion” and the taxpayer adds nothing to the Govt‟s knowledge by conceding he has the papers. Lesson of Fisher: Even if there is an expectation of privacy and if lawyer is a person‟s agent, 5th does not apply. Only compelled testimonial self-incriminating evidence falls under the 5th protection. Documents are by definition non-testimonial, so they don‟t fall within 5th Am protection.
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In Re Sealed Case Lewinsky (DC Cir., 1998) Crime fraud exception to att-cl priv Facts: Carter is L‟s lawyer. In 1997, when L is subpoenaed to show docs about affair with P at Paula Jones trial, she (thru lawyer) submits affidavit that she never had sexual relationship with P. In ‟98, investigation has been expanded to include perjury and obstruction of j against L. Carter is subpoenaed for docs & testimony. He refuses on grounds that they are 1)privileged 2)work-product 3) violative of L‟s 5th Amend. US opposes with crime-fraud exception. Carter & L file motions to quash. Outcome: C‟s motion is without jurisdiction L‟s motion is denied. L‟s Arg: 1. Denial of having had relationship with P was not material to the Jones trial, as the Ct later ruled (evidence of L‟s affair was excluded on 403 – unduly prejudicial). 2. Trial ct should not have let in Tripp tapes b/c Tripp tapes were unlawfully obtained. 3. Fifth Self Incrim Holding: 1. Materiality to be determined at time of filing affidavit – Inquiry is: a. If material sought is reasonably calculated to lead to admissible evidence b. If the need for that evidence would outweigh any burden imposed by subpoena. 2. Govt established crime-fraud exception thru other means beside the Tripp tapes, so their review is not relevant to issue. 3. Fifth doesn‟t apply to Carter on L‟s behalf citing Fisher. In Class: 1. Ct says not privileged because of crime fraud exception, see R.1.2(d), vaguely seems to create a crime fraud exception. 2. But did Carter know L‟s conduct was fraudulent? Did he know she was lying? Is this case suggesting that 1.2 is the appropriate exception or that the privilege never existed? A says there is no valid privilege. Would there be an exception to the att-client priv under 1.2 in this case? 3. Ct is taking position that no privilege attached here b/c the documents are discoverable facts. So 1.2(d) is not relevant (b/c this is an exception to an established priv?) If there was an attack on the affidavit, any counseling that went to the affidavit would fall under 1.2. 4. Did crime-fraud exception apply to either att-client priv or work product? No, privilege never attached. But c-f exception could have applied since q is whether Lewinsky consulted L in furtherance of a crime. 5. How do you endow materials with privilege? One of the preconditions of the att-cl priv is the absence of fraud.
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Crime Fraud Exception: A. Definition: 1. Att-client privilege will not apply where legal representation was secured in furtherance of intended, or present, continuing illegality. 2. Is corollary to prohibition against assisting a client to commit fraud or crime. 1.2. 3. Applies to ongoing & future crimes, NOT past ones 4. Applies even when att didn‟t know of client‟s improper purpose. 5. Applies in civil & crim context (so don‟t need to bring a crim charge) B. Test/ Application: 1. Party seeking disclosure must make prima facie showing 2. On that showing, trial ct may conduct in cam review of the privileged material. Zolin. Purcell Threats were protected, but ethical rules compelled lawyer to disclose in limited way. US. v. Bauer Ct held crime-fraud exception did NOT apply b/c despite att‟s warning regarding disclosures under bankruptcy laws, client took exactly opposite action. Ct says causal connection is missing b/w advice given and illegality that client engaged in. Limited c-f exception. Client id & fee arrangements are NOT (generally) privileged. Baird is one of only exceptions where client‟s id was confidential b/c if revealed, would provide the „last link‟ in chain of testimony needed to convict him for IRS tax evasion. Where id is inextricably linked w/ client‟s effort to get legal advice, privilege will attach. Restatement (p.255) See last 2 sentences: Big Tobacco How does 1.6 – 1.2(d) – 1.16 1. QUESTION Does privilege protect underlying facts or the communication b/w party and lawyer. Does privilege protect past corporate misdeeds that are factual – does it create a corporate zone of silence, such that the material is discoverable b/c relevant but protected b/c of privilege? Unclear. 2. ANSWER We‟d like the answer to be no, but info att gathers in representing the client are also protected, but this is ambiguous – might only apply to work product facts. 3. Privilege is subject to waiver
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Measures Giving Rise to Concern Among Lawyers Regarding Privilege: 1. Subpoenas to lawyers – proposed amendment to Model Rule to require prosecutors to obtain prior judicial approval after opp for hearing in order to issue lawyer subpoena was rejected. 2. Fee forfeiture (civil) statutes – fees paid lawyers from „bad‟ money are forfeitable. 3. Reporting req (IRS) of cash receipts (per 650i amts over $10,K) But banks will check a range, to monitor if someone is consistently depositing just under to avoid fed reporting req. Sources of Professional Duty of Confidentiality: 1. Evidence law 2. Agency law – broad exceptions 3. Lawyers code – narrow exceptions DR 4-101 Confidentiality provision: 1. Confidences: Info protected by the att-client priv under applicable law (evidence law) 2. Secrets: Other info gained in the professional relationship that client has requested be held inviolate or the disclosure of which would be embarrassing or likely detrimental to c. 3. Limited to knowing disclosure Rule 1.6 Confidentiality provision: 1. Protects all info relating to the representation, whenever lawyer gained info. 2. Disclosure applies whether or not it would embarrass/ harm c 3. No longer limited to knowing disclosure – negligent disclosure is now prohibited. Rule 1.9(c)(1): Allows use of generally known info against a former client. None of Rules limit lawyer‟s use of confidential info for lawyer‟s own benefit where the c will not be harmed by the use. However, agency law, mail fraud stats, and prohibitions against insider trading serve to limit that use. Restatement §111 1. Follows Rule in defining confidential info as all client info gained relating to rep, 2. Adds qualifier “other than info that is generally known” – similar to MR 1.9(c)(1) Exceptions to professional duty of confidentiality: 1. Self-defense a. When C charges L with wrongdoing in course of rep presents least problematic issue b/c by charging L with wrongdoing, C has waived the att-c priv (fairness dictates L can use confidential info at this point to refute charges) b. When L sues C to enforce some duty owed to L (like payment) generally resolving a fee dispute doesn‟t involve revealing confidences. To the extent that it does, the c has some control of the scope of the waiver (he can choose what he wishes to put in issue) c. When a 3rd p accuses L of wrongdoing in course of representing C. See Meyerhofer 2. Protection to 3rd persons 3. Prevention or rectification of fraud on the ct.
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Meyerhofer v. Empire Fire & Marine Ins. Co. (2nd Cir. 1974) Self-defense (1.6(b)(5)) Facts: Goldberg is a lawyer with Sitomer firm advising Empire on its public offering. Goldberg has disagreement with Sitomer regarding degree of disclosure (potentially excessive L fees) required in connection with the public offering. He quits firm and files complaint with SEC - 30+ page affidavit. (Affidavit also has incriminating info on Sitomer‟s similar relationship w/ other client Glacier) 6 mos later Empire sues Sitomer and Goldberg. Goldberg files motion to be excused as a ∆ and gives Empire‟s lawyers copy of affidavit and 16 exhibits to show he was not involved. Empire drops him from complaint, but Sitomer ∆s move to dismiss complaint on grounds that Goldberg breached confidentiality Canons and Code. P. Below: DC grants motion to dismiss. Orders Goldberg and Bernson firm disqualified Issue: Whether in handing ∏s affidavit filed w/ SEC, Goldberg was in violation of confidentiality duty. Holding: Under circumstances, Goldberg had right of self-defense to make appropriate disclosure with respect to his role. Outcome: Affirmed – Goldberg enjoined from acting as counsel in the proceeding Reversed – Bernson (∆) firm not enjoined from acting as counsel. Discussion: 1. DC erred in finding violations of canons b/c self-defense exception applies 2. Here, Goldberg‟s affidavit did not provide the info to create the cause of action. Empire had this before Goldberg‟s affidavit. 3. Burden of DC‟s decision falls most harshly on Empire (Bernson firm), not Goldberg, since they are now disqualified from participating in the case. 4. Rule 1.13 L‟s duties to an organizational C. In Class: 1. Migratory Hiring (Lateral Hires) Problem New hirees infect firm with imputations. More disqualification motions in larger than smaller firms. 2. Is this confidentiality or att-priv case? 3. Did Goldberg act properly in disclosing to SEC as part of self-defense exception? See 1.6. Is he justified in his actions? He has been disqualified by Ct. He didn‟t have duty to disclose, but he couldn‟t stay on the case or he‟d be faced with federal indictment see 1.2(d)
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Klein v. Boyd (3rd Cir. 1998) L liable even when he didn’t sign or endorse the document and investor is unaware of lawyer’s role in the fraud. Facts: Group of investors sued law firm that prepared documents which they relied on when investing in an LLP. Stated claims under SEC, RICO, and c/l fraud. Holding: Lawyer (who authored or co-authored docs relied on) is primarily liable to 3rd party investor under SEC regs or c/l fraud. RICO claims not valid. P. Below: No claims stated b/c: 1. Stat of limits had run on SEC claims 2. No signature/ endorsement 3. No fid relationship b/w investors & lawyers Outcome: On appeal, case got settled vacated decision. Schatz v. Rosenberg (4th Cir. 1991) Facts: Law firm knew its C Rosenberg was making false representations and nevertheless provided this info to ∏s Schatzes in closing docs. Holding: Law firm NOT liable Rationale: B/c lawyers only passed along info at closing from ∆ to ∏. Lawyers only „papered the deal‟. Discussion: 1. Does this case stand for a duty by firm to whistle-blow or to correct material omissions in law firm‟s prepared statements? (Seems like latter one) 2. Inconsistent with Klein? Seems like it.
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The OPM Fraud Singer firm providing legal opinions as to soundess of OPM (Ponzi scheme) when they knew OPM as acting illegally. OPM‟s financial officer Clifton resigned when he learned of fraud. Sent letter to Singer partner Reinhard, who also sits on board of OPM, about the fraud. Letter „intercepted‟ by Goodman. Singer worried of possible ethics violations so they hire outside consultants who tell them: 1. Fraud in past so they are prohibited from disclosing per NY Code Confidentiality (!) (If this is identical 1.6, it seems true they were prohibited. See DR7-102, prohibition also seems correct b/c of privilege) 2. Singer could continue to rep OPM so long as Goodman verified legitimacy of future transactions. Preposterous says Alf. 3. Since Singer had „no direct knowledge‟ of fraud, they didn‟t need to withdraw from rep or disaffirm their prior opinions. See 1.16(a)(1) is only mandated withdrawal – assisting crime, or other law like fraud. Problem is causal language – will result. Singer finally withdraws quietly b/c Goodman discloses extent of fraud and debt. OPM retains Kaye Scholer, who asks Singer if there is anything they should know about (why representation was terminated) and Singer tells Kaye S it was a mutual termination the terms of which it was agreed would not be discussed. Bankruptcy investigation concluded Singer could have acted in way that did NOT help OPM continue the fraud once it learned of it. Discussion: 1.6(a) Singer cannot disclose. 1.6(b)(1) doesn‟t apply. 1. Discretionary 2. Must relate to the representation. (If unrelated, its not in confidence) 3. Reasonably necessary 1.6(b)(2) (did not exist at time of OPM. If it had, it may have permitted disclosure, but look at all the contingencies (5): Inapposite to OPM. Problem in OPM is “to prevent” language goes to future, not past fraud. 1. Reasonably believe its necessary 2. Preventing (the commission a crime or fraud) 3. Reasonably certain to result in: 4. Substantial injury/ financial/ prop interests 5. Furtherance 1.6(b)(3) Contingencies(8): Seems like provision most likely to affect Singer Hunter. But what info exactly would SF be permitted to reveal under this provision. 1. Prevent – prophylactic 2. Mitigate – to temper. Mitigating circumstances/ aggravating circumstances 3. Rectify 4. Sub injury 5. Financial interests 6. Reasonably certain to result 7. From client‟s crime or fraud 40
8. In furtherance Private vs. publicly held corp – 1. Private injury to private investors, vendors, banks 2. Public all as above, plus shareholders. Means you kick in SEC reg scheme. So if you don‟t want to lose the C on prevention, what do you do – obviously depends on if corp is private or public. Don‟t have to disclose to prevent. How to mitigate … how to disclose to some and not all, not really possible May have to be careful how you disclose to whom: 1. SUIT SEC, Stockholders bringing FRCP 23.1 2. Own partners/ associates may leave 3. Other clients may leave 4. Banks may want more collateral How to rectify Struggling with new ABA rule 1.6 solution to below scandals which in application is harder than it seems. In 2000, this version was endorsed, even though defeated 3 yrs prior. So this is progress. But we cant figure out how to apply it, even if we were able to get through the 12 contingencies. Cant figure out what course of action would be most prudent. 1. OPM 2. Lincoln Savings 3. Enron **Know six lessons of OPM
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People v. Fentress (County NY 1980) Facts: Fentress schoolteacher calls friend lawyer Wallace Schwartz at 2 am and tells him he may have killed someone and he was about to kill himself. Fentress is in Poughkeepsie; Schwartz in Westchester. Unclear whether Fentress summoned Schwartz. Fentress wanted rabbi to come, and Schwartz suggested calling cops. Schwartz called mom, friend of Fentress, told her what F had said, and asked her to call rabbi. She calls F to verify he is ok. Cant get hold of rabbi so she calls cops. Cops arrest F. F asks for lawyer Schwartz. F doesn‟t talk to cops without lawyer present. Issue: Whether the requisites of confidentiality were established and if so, whether Fentress waived them. Holding: Assuming att-cl priv was established b/c F called Schwartz in his professional capacity, F nonetheless waived the privilege by his conduct (talk with Enid). Rationale: Waiver doctrine applies when a 3rd, non-dispensable person is let in on the confidence before during or after consultation w/ lawyer. 1. Was Schwartz called upon as lawyer or friend? (Doesn‟t have to be one or other). This determination is crucial in establishing if Fentress expected call to be confidential. a. Yes confidential He called S his attorney b. No, not confidential When F concurred in decision to call cops, he waived confidentiality of the corpus. 2. Phone call b/w Enid S. and Fentress Ct finds it was made freely. Destroys confidentiality. Discussion: Question/ dispute whether Fentress got scope of privilege right.
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Hawkins v. King Co. (WA 1979) Facts: Michael Hawkins minor sued ct-appointed defense lawyer on negligence theory and for malpractice for failing to divulge info regarding Michael‟s mental state at a bail hearing. Trial ct. granted lawyer summ judge. Outcome: Affirmed. ∏ Hawkins‟ Arguments: 1. Malpractice liability Ct rules & the Code mandate disclosure 2. Negligence based on c/l following Tarasoff – duty to forewarn. ∆ Lawyer‟s Argument: 1. No duty owed 2. No basis for civil liab b/c as ct-appointed att, he is quasi-jud officer and therefore immune. Holding: 1. Lawyer‟s duty to advocate zealously for client‟s interests override „nebulous and unsupported theory that rules and ethical codes mandate disclosure‟ (no law requires disclosure). 2. As to c/l claim need to show beyond a reasonable doubt that C has formed firm intention to inflict serious bodily harm on unknowing 3rd p. Ct says Tarasoff is inapposite b/c there, psychiatrists knew first-hand of Poddar‟s homicidal tendencies and that Tarasoff was intended victim. Also, here ∆s (Michael‟s family) knew of Michael‟s tendencies whereas in T, Tatiana had no idea of Poddar‟s tendencies. 3. Issue of civil liab and if he is or is not immune not reached.
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Duty to the Court Review Civil and crim law relating to lawyer‟s liability for assisting transactional fraud: 1. Recklessness civil fraud 2. Carelessness negligent malpractice Tensions with duty: 1. Counseling/ Advising vs. Advocate/ Litigation 2. Civil vs. criminal 3. Knowledge vs. reasonable belief Duty to Court deals with lawyer as advocate (i.e. litigator) 1. Perjury: a material lie told willfully. Applies in civil and crim, lit and transaction. a. Lying under oath is a crime b. Advising another to lie is a crime suborning perjury c. Arguable justifications for crim context include: (1) Constitutional concerns (2) Degree of severity of possible punishment d. In civil context (1) Perjury tends to come up in depos, not trial. No problem of unduly prejudicing jury by challenging your client‟s veracity while he‟s on the stand. (2) Four “Rs”: (a) Remonstrate Asking client not to commit perjury. (b) Rectification Trying to persuade client to rectify (c) Resignation Withdrawal under 1.16 (d) Revelation Can we successfully reveal the matter? See 3.3. Iowa Bar v. Crary (Iowa 1976) Facts: Crary is asst attorney representing Mrs. Curtiss in divorce proceeding. (Gray is lead att). Curtiss and Crary are having affair. In Crary‟s presence, Curtiss testifies falsely during depos on two occasions regarding where she was on certain dates (says she was in Chicago but was shacking up w/ Crary). Ethics Committee files complain against Crary. P. Below: Ct‟s Grievance Committee reprimanded Crary and held: 1. Crary didn‟t have to report perjury b/c: a. Privilege against self-incrim b. Opposing counsel knew Mrs. C‟s testimony was false 2. Crary contributed to Mrs. C‟s frustration of custody decree by condoning conduct. Outcome: Revocation of license Crary argues: 1. No duty to divulge to opposing counsel or the ct that Mrs. C‟s testimony was false 2. Att-client priv led him to choose duty to client over duty to court and this is legit. 44
Ct responds: 1. Issue is not divulging info but problem that Crary participated in corruption of the fact-finding system when he knowingly permitted Mrs. C to lie (didn‟t do anything when she lied in front of him). 2. No privilege ever attached b/c client waived priv when she lied under oath. Bronston Do you have any bank accounts in Swiss banks? Answers were not perjury b/c they were merely non-responsive & literally true. Ct determined that no jury could conclude beyond a reasonable doubt that witness willfully intended to lie. Omission/ commission distinction Discussion: R. 1.8(j) he doesn‟t seem to be violating this b/c affair started before c-a relationship. Note Fla rule adds that a lawyer shouldn‟t exploit a client, comes from family law arena to protect C in vulnerable emotional state. See R. 3.3 this is violation on point: Moved beyond L as advocate to notion of L as officer of Ct duties to other parties and to the tribunal. 3.3(a)(1)&(2) don‟t apply cause he didn‟t provide the lie. Mrs. Curtiss did. Raises Nix v. Whiteside and later advocating problem per FRCP Rule 11. 3.3(a)(3) amendments seem to address Nix problem. 3.3(b) is Mrs. C‟s depo strictly speaking fraud? (Alf doesn‟t seem to think so). P.347-348 ABA ethics opinion: 3.3(a) know = mandatory. (a)(3)Reasonable belief = discretion in civil; have to let them testify in criminal cases, see comment 9.
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Nix v. Whiteside (US 1986) Facts: Whiteside convicted of 2° murder. In preparing for trial, he indicated to his ct-appointed lawyer Robinson that he might lie on stand regarding having seen victim with gun (to bolster his theory of self-defense). R told him a) don‟t need to have seen the gun to reasonably believe you were in danger and 2) if you commit perjury I have obligation to tell ct and possibly withdraw from case. P. Below: Whitesides appealed up Iowa state system. Affirmed conviction. Sought habeas writ. DC denied. 8th Cir. granted writ on grounds that an intent to commit perjury does not alter a ∆‟s right to effective counsel & R‟s warning to Whiteside constituted a threat. Outcome: Supremes reverse 8th Cir. Conviction affirmed. Issue: Whether the Sixth right of crim ∆ to effective assistance of counsel is violated when an attorney refuses to cooperate w/ ∆ in presenting perjured testimony. Holding: 1. No con right to present a perjured defense no prejudice involved here (9 concur) 2. Lawyer-performance aspect lawyer has duty to disclose (5 concur). Sharply criticized as dicta in domain reserved for states – determining scope of ethical rules they will apply. Discussion: Some cases have gone too far and resulted in possibly unfair trial – 6th violation: 1. Wilcox where DC approved lawyer withdrawal and ordered the ∆ to continue w/out counsel and ∆ did not testify, 3rd Cir found Sixth violation. 2. Lowery where C lies on stand during bench trial and L announces intent to withdraw from rep without explaining, Ct held this constituted unfair trial b/c it was paramount to announcing to fact finder C‟s lie. Ct suggested free narrative would have been ok. 3. Steps a L should Take: a. Remonstration – dissuade C from lying – not a 3.3 ineffective assistance of counsel problem, not a con violation. b. See 3.3 4. Distinction b/w reasonable belief & knowledge is more a continuum than a spectrum, since knowledge can be inferred. So not a clean distinction Freedman “Perjury: The Lawyer’s Trilemma” The trilemma is L is supposed to know everything, keep it to himself, and reveal it to the Ct. Questions: 1. Is it right to suggest thru cross-ex that a witness telling the truth is lying? 2. Is it proper for a crim defense lawyer to put a witness on the stand who L knows will lie? See 3.4 (doesn‟t really apply) 3. Is it proper to give ∆ legal advice the L believes will tempt C to commit perjury? See 1.2(d) 46
Considerations: 1. Adversary system – Three Conflicting Obligations of L: a. Learn everything he can about the case (1) Ask details (2) Selective ignorance b. Strict C confidence c. Candor toward tribunal Frivolous Claims: 1. In re Solerwitz L suspended from practice for 1 yr for filing frivolous appeals in air controllers strike case 2. MR 3.1 L (other than a crim defense lawyer) shall not bring or defend a proceeding or assert or controvert an issue therein unless there is a non-frivolous basis, including as good faith argument for extending modifying or reversing existing law. (This is objective std (MC had subjective std – lawyer knows language). 3. MR 4.4 L shall not use means that have no substantial purpose other than to embarrass, delay or burden a 3rd person 4. MR 8.4 conduct prejudicial to the admin of justice. 5. Dilatory Tactics: Change from Model Code that only prohibited delay where it merely served to harass or maliciously injure another to MR 3.2 that places aff duty on L to make reasonable efforts to expedite litigation.
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Friedman v. Dozorc (Mich. 1981) Facts: Friedman is a physician who successfully defended a med malpractice claim. He brings suit against former ∏‟s lawyers, on theory that claim was groundless. Holding: 1. Negligence claim Friedman has no claim b/c opposing counsel has no duty of care to an adverse party in litigation. 2. Abuse of process claim No coa b/c no evidence that ∆s acted irregularly in use of process or ulterior purpose. 3. Malicious prosecution claim No coa b/c complaint fails to allege interference w/ his person or property sufficient to constitute special injury. Rationale: 1. Imposing a duty of care on adverse party would be inconsistent with basic precepts of adversarial system. Discussion: 1. Negligence DR 7-102(A)(1) is ∏‟s basis for relief – it requires an L to perform within the limits of the law. No privity & no 3rd party fiduciary. 2. Abuse of process act of process being issued is not enough to sustain abuse claim – need to show improper use of process after it has been issued. Two elements: (1) ulterior purpose – analogize to R. 11. (2) willful act improper in the regular conduct of the proceeding 3. Malicious pro Elements: a. Special injury (1) Michigan is a minority jurisdiction sticking to older English Rule – ∆ has no claim for mal pro unless he shows arrest, seizure or some special injury. (2) Maj now goes with American Rule – permitting actions without showing of special injury. Traditionally, it was easy to meet special injury req b/c mal pro claims began with some sort of arrest, attachment or garnishment. Now only where special Con-approved (notice & hearing) protections have been met will these actions stand. So special injury req is anachronistic. b. Prior proceeding ended in ∆‟s favor c. Absence of p. cause Ct says reasonable std is subj - goes to what L reasonably believes, even if another L might reasonably believe something else. Goes to R. 11 later advocating – L needs to know at time action is filed that there is sufficient evidence, and here there was not sufficient evidence. d. Malice: (1) May be inferred by facts that establish want of p. cause (2) Improper purpose sep from absence of p. cause Concurring (J. Levin): Favors rules that give judges inherent powers to sanction against wrongful/ frivolous lit as opposed to tort remedies. Impose fines on att and client.
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Rule 11: 1. Discretionary – Allows judges to sanction lawyers when a paper filed in ct. was not a. well grounded in fact b. warranted by existing law c. a good faith arg that existing law should be modified or reversed. 2. Objective test 3. “Safe harbor” added in 1993 amendment 4. Purpose is to deter, not compensate reason for fine being paid into ct as a penalty. 5. Private Securities Litigation Reform Act mandates that judges will make R. 11 determinations in securities fraud cases and mandates sanctions. No safe harbor applies here. 6. On appeal R. 38 sanctions Before 1993 amendment, 1983 rule mandated sanctions. Now discretionary. 1. Concerns that 1983 version chilled advocacy. 2. Not applied uniformly ‟93 Amendments 1. Safe harbor 2. Mandatory to discretionary 3. Lawyers fees added, tied to improper purpose cases Horseshedding the witness prepping… moves from helping witness organize what he knows to knowing new things. Att can‟t make a direct statement of belief in her cause. 4.4(a) in relation to Shield PID litigation.
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Golden Eagle Distributing v. Burroughs (9th Cir. 1986) 5-4 Facts: Appeal of R. 11 sanctions (per 1983 amendment – mandating sanctions) imposed on firm Kirkland & Ellis in filing motion for summ judg on behalf of client Burroughs. K&E sanctioned for: 1. Misleading ct in filing motion for forum non conv (change of venue) and info on double forum shopping citing Van Dusen incorrectly 2. Violation of MR 3.3 – failing to cite contrary authority (Ct says violation of 3.3 goes hand in hand w/ R. 11 sanction). 3. Economic damages 4. Std of review has changed from de novo to abuse Issues: 1. Argument identification: Should counsel have to differentiate b/w „warranted under existing law‟ and „extension, modification or reversal of existing law‟? 2. Assuming cases were contrary (K&E argues they weren‟t), is failure to cite them a violation of R.11? Holding: 1. Rule doesn‟t require this differentiation 2. Rule doesn‟t impose MR 3.3 requirements – to do so would conflict with adversarial system (by making lawyer essentially help the other side in providing contrary case law) Dissent: Finds fault with majority‟s interp that issue was manner in which matter was presented to ct. Issue is that a false statement was presented to the ct (reliance on case law known to be bad). By def, there can be no good faith belief in a false argument. No conflict of interests b/w zealous advocacy and duty to ct if the lawyer confines his advocacy to the limits of the ct.
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Anders brief In order to withdraw, need to submit brief setting forth anything in record that would arguably support appeal, including why issue lacks merit. Non-adversarial b/c essentially saying that client‟s argument lacks merit vs. protecting ∆ from counsel‟s mistaken conclusion that appeal lacks merit.
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Negotiations 1. Continuing relationships or one-shot encounters a. Cooperative & consensus-building b. Competitive & concession-oriented 2. Professional relationships between the lawyers 3. Legal & social context of the negotiation 4. Conduct of parties 5. Relative bargaining strength of p T a. Teaching negotiation at Leg Services vs. Greenberg, see Bar & Bench. b. Distinction – why LS clients are more distrustful of Ls – different than them 6. Parties & their lawyers 7. Use of deception by negotiators DR had prohibition against using or threatening to use crim charges to obtain an advantage in a civil matter. MR doesn‟t have such a provision b/c: 1. Idea behind the rule incorporated into MR 8.4 2. Left it for states to deal with. Integrative bargaining: 1. People separate the people from the problem 2. Interests focus on interests supporting each party‟s claims, not the position they take within the dispute. 3. Options generate variety of possible solutions 4. Criteria for settlement based on obj rather than subj stds. Prisoners‟ dilemma – where no one cooperated though all would be better off if everyone did. MR 4.1 – applies to negotiations: (a) – material fact or law – so you can lie about other stuff. (b) fail to disclose see Spaulding. As applied to matter of law, candor toward the tribunal 3.3. Comments [2] facts depend on circumstances. “Under generally accepted conventions of negotiation” like saying your C would never accept less than X amt of $ in settlement when you don‟t really mean it. Undisclosed principal – like a silent partner or case with multiple parties where a given party would not go for a negotiation if he knew another particular party was involved. Undisclosed p could be a dealbreaker – in M&A. Judge Rubin article – list of tactics Don‟t seem to expressly violate 4.1, yet they pose moral dilemma. Proposed rule 4.2 p. 1154 would have upped the ante from current MR 4.1. Added word „fair‟. Removed word „material‟. Was rejected.
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Lawyer-Client Relationship Three Models: 1. Fiduciary a. Client is dependent upon L‟s skill & knowledge b. Client must make leap of faith and trust L c. L becomes fiduciary expected to put C‟s interests ahead of others, including her own. 2. Market a. Consensual exchange benefiting both C and L b. Presumes C can select appropriate person to provide needed services 3. Regulatory or public utility a. Ls as quasi-public officials b. Duty to serve as dispute resolver c. Pervasive model abroad Qualities people seek from Lawyers: 1. Commitment 2. Integrity 3. Competence 4. Fair & affordable fee Paternalism may lead to L manipulating C. Who‟s in Charge? 1. Is it clear who instigates the formation of the relationship? No, b/c not clear when it starts. One would think it‟s L who commences, but really C does when he seeks L advice. 2. Who runs the relationship different models a. Traditional/ Paternalist – L is in control. C is deferential. Alf asks what is philosophically wrong with paternalism? Inhibits ability to exercise our freedom to be moral agents. Fix my rights up to a certain point. b. Participatory – C is more involved. 3. Who Corrupts Who? Notion that corp is corrupting lawyers – credible? Post-Enron, investigation of Vincent Elkins and other firms and accounting firms. 4. Nature of L-C relationship See area of L-C within race, ethnicity, gender, sexual orientation. 5. MR 1.14 – Issue of client w/ diminished capacity. Formation of relationship in Togstad. Formation is process surprisingly out of L control. Requires more delicacy/ sensitivity to avoid issues of malpractice and neglect of oblig.
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Togstad v. Vesely, Otto, Miler & Keefe (Minn 1980) Legal malpractice case Facts: Appeal on jury verdict from negligence action against L Miller. Verdict affirmed. Mr. Togstad went into hospital for aneurysm and suffered paralysis and loss of speech due to medical procedure. Mrs. T consulted Miller to see if they had a legal claim for med malpractice. He claims he told her he didn‟t think liability existed but that he‟d consult another L and get back to her if there was a claim. She claims when she didn‟t hear back, she assumed no claim and relied on that advice, not consulting another L for 1 yr. Notes Miller took when meeting with Mrs. T likely constitute work product. Privilege survives death. Issue: Whether in consulting with Miller, an att-client relationship b/w Miller & Mrs. T was formed. Holding: Yes, att-client relationship was formed when she consulted him, and with that relationship a duty of care developed which he breached, resulting in but for injuries. Contingent Fees and Discharge Old rule – L friendly. Where C discharged L, he still owed him contingent fee if he recovered. New rule – quantum meruit theory. L recovers percentage equivalent to his fair portion. Scope of L‟s authority Consider empirical, normative & legal dimensions. If expert testifying at Miller trial was subsequently called to testify disciplinary proceeding… Expert opinion can come in on questions of fact, mixed questions of law and fact, but NOT on legal conclusions. To avoid legal conclusion problem, could phrase questions like: 1. Does the ethics rule incorporate a std of care? 2. Did the L violate a std of care in this case? DON‟T ASK LAST QUESTION, BUT IT IS PRESUMED 3. Did the L violate the ethics rule in this case?
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MR 1.2 – L can limit the objectives of representation. Alf argues informed consent is more specific than consent after consultation. See definition section. Consultation is less formal. Informed consent is more formal (term of art). This change ratchets up the std. MR 1.8(h) – waiver of law mal – could conceive of this is SEC or antitrust in cutting edge technology, internet. Maybe not b/c issue is std of care in law mal. This subsec doesn‟t not mean L‟s std of care is diminished, merely removes a right of the client (to sue for malpractice) MR 1.16 – Mandatory & permissive withdrawal. (a) Mandatory (1) Conflict question (2) Professional autonomy view (counterfactual b/c if you consulted with Dr. he‟d tell you all pain will impair your judgment). (b) Discretionary – applies to past, present C crime or fraud. None of the provisions apply to future. Moral formal dilemma. (c) When ordered to withdraw, L can w/ permission of Ct. Check on L‟s conduct. Attempt to expand j. review over withdrawal. MR 1.14 – Diminished Capacity To what extent is info that one culls from this type of C that puts people at risk subject to confidentiality? (a) L will maintain normal L-C relationship as far as possible with C with diminished cap. But how do you know if your C has diminished cap? (b) Upon reasonable belief, L may take action by seeking appointment of guardian to protect the C. C protection/ access upon withdrawal See Proskauer, p. 466. At small firm or solo practice level, we see examples of Ls trying to leverage Cs by refusing to produce files. What constitutes the file? Does it include work-product? Discharge – Quantum Meruit issue on value, in contingent fee area where large fee is won. Objective/ scope vs. objective/ means
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International Telemeter v. Teleprompter (2d Cir. 1979) Lawyer Kirsch for Teleprompter was negotiating settlement with Telemeter. After reaching agreement orally and after Teleprompter‟s pres signed appropriate docs, incoming management refused to hand over signed paper of outgoing pres that would bind Teleprompter to settlement reached. Argued that K didn‟t have authority to bind it. Held: Kirsch had apparent authority to bind Teleprompter to a settlement deal. In Class: (Alf says noteworthy) Actual vs. app authority: Arises in govt authority when you take on state, feds, local with overlapping areas of authority and have to figure out who is in charge for authority purposes. Actual authority – express vs. implied vs. apparent ( got to third party as determinating factor). Therefore sympathetic to this interest – 3rd party beneficiary theory. Jones v. Barnes (US 1983) Burger Issue: Whether ct appointed defense counsel assigned to prosecute an appeal from crim conviction has a constitutional duty to raise every non-frivolous issue requested by ∆. Holding: No. Wrong to have a per se rule allowing client to decide what issues to be presented. In some cases, counsel‟s judgment as to which claims to pursue or not will be best. No Sixth implication Concurring Blackmun: L is required to argue all non-frivolous arguments a client insists on. Dissent (Brennan & Marshall): Assistance of counsel is a Sixth Am right. Assistance means L to argue all issues C directs L to raise. In Class Discussion: 1. Raises Strickland issue under Sixth – ineffective assist of counsel 2. Anders brief People v. Deere Man convicted of murder refuses to allow pub defender to submit mitigating evidence during sentencing phase. Instead he argues he deserves to die. Man sentenced to death & case remanded on grounds that failure to provide mit evidence constitutes Sixth violation – ineffective counsel. On remand, same PD refuses again b/c client does not want mit evidence brought in. PD held in contempt, but later reversed. Cal Supremes hold L has duty to present mit evidence regardless of whether client wants to or not. In Class: Consider Unibomber and Muhammad cases currently pending. Other cases lean toward client autonomy. This one differs. Why? See 1.14 (diminished capacity) 55
Fees MR 1.5 1. 2. 3. 4. Flat fee Hourly rate Proportional fee Contingent fee
MR 1.5(a) L‟s fee shall be reasonable. Includes duty to communicate from MR 1.4. (a) Wording in the negative. (1) – (8) consistent w/ § 1988; but (6) does this mean different treatment for repeat players? (b) Why disjunctive (“or”)? Due process issue – shouldn‟t C know? Any changes language, preferably in writing… In the Matter of Fordham (Mass. 1996) Facts: Bar counsel is appealing decision by Bar committee determining L Fordham‟s fees charged to Clark for handling his son‟s OUI (operating under the influence) charges were not excessive. Issue: Whether fees charged by L Fordham were excessive. Holding: Yes, fees were excessive. Must consider factors in determining if fees were excessive. Hearing committee‟s determination that fees were not excessive is not warranted. Resulted in public sanction. Discussion: Factors 1. Time & labor, novelty & difficulty of questions involved 2. Skill requisite to perform legal service properly. Based on expert testimony (factor 4) at hearing, F‟s billed hours are excessive for a case of this difficulty, despite the novel theory he put forward to suppress breathalyzer tests. 3. Comparability F charged 3-4 times as much as comparable lawyer. Ct rejects Safe harbor formula – So long as agreement existed b/w C and L to bill a reasonable rate x # of hrs actually worked, L‟s fee was within „safe harbor‟ and protected from challenge that fee was clearly excessive. B/c amt of time L took to educate himself on issues was excessive despite being done diligently and in good faith. In Class: Debate over what constitutes reasonable. Would retroactive increase in fees violate rules? Doesn‟t appear to.
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Brobeck v. Telex case where on appeal, Telex retained new counsel to file writ for cert and agreed on elaborate contingency fee plan. When Telex settled short time after, law firm sent them $1 million fee. 9th Cir upheld fee b/c it was expressly negotiated for b/w the sophisticated parties. Bushman Disciplinary proceeding arising from divorce case. Bushman L‟s fee was so exorbitant as to „shock the conscience‟. (He billed 100 hrs in representing Barbara Cox, while her husband Neil‟s L billed 5). White v. McBride L attempting to collect a clearly excessive fee in probate matter (on qm [reasonable value of services] basis, L argues he had a contingency fee agreement with C before C died). Ct says L has forfeited any right to a fee by his actions. Churning overstaffing cases Padding fees charges Double-billing Restatement Questions: 1. Did L afford C a free and informed choice? 2. Comparability 3. Ex post hindsight eval. L has burden of justifying fee, even when C sues burden placed on L b/c of relationship of trust owed by L to his C. Ct has jurisdiction to review or determine L‟s fee based on Ct‟s inherent & stat power to regulate the profession. Non-refundable retainer fees are looked down upon by ct interfere w/ C‟s right to walk away from the att-cl relationship. Consultants require them however b/c of opportunity costs – missing opp to be retained by others. Issues of taintshoping – disqualifying consultant by telling him details of case before he‟s been retained. NY made gen retainer fees permissible, but specific ones not entirely permissible. Stat limits on att fees (for particular type of cases, like workers comp or med malpractice). Charging more than stat limit = illegal fee. Yes, stat fees are subject to juries. Fee Sharing Model Code allows it if: 1. C consents after disclosure that his fee will be split MR makes req only advising C of all Ls involved where C does not object. 2. Fee is divided in proportion to services performed MR creates exception to this precondition if by written agreement w/ C. 3. Total amt of fee is not unreasonable
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MR 1.5(e) relaxes MC preconditions. Contingent Fees 1.5(c) 1. Historically disreputable based on: a. Fear Ls would be tempted to use illegal means to win b. Fear Ls would put own personal interests before their own. 2. Application: a. Typically used in PI, tax refund, condemnation proceedings, debt collection, class actions for damages b. Prohibited in divorce (contravenes pub interest in preserving marriages) & crim defense ($ not an issue – no $ damages. Might not get zealous advocacy if L isn‟t getting better return with more hrs invested – diligence problems). 3. Justification Nec means of ensuring access to justice. Should contingency fees even exist – value laden… 4. Requirements per MR: a. Agreement in writing b. Method by which fee is to be determined, in particularity c. Subsequent report upon completion of representation Committee on Legal Ethics of WV State Bar v. Gallaher (1988) Dillon injured in car crash where her son was driving. Seeks to recover from son‟s insurer. Retains Gallahar L when insurer rejects her claim. Gallaher never discusses fee arrangement w/ her. Secures settlement and takes 50% con fee. Dillon appeals to disciplinary bd which reduces L fee to 1/3 of settlement. Reform 1. Manhattan Institute Proposal – lower transaction costs in cases where no real controversy exists b/w parties so that a substantial contingency fee is not justified by the risk b/c no real value adding services are required. 2. Tort reform legislation – stats prescribing max fee schedules for Ls. 3. Fed Tort Claims Act American Rule Each litigant pays for herself, including L fees. (Separates fees from costs.) 1. Fairness – Outcome of litigation are uncertain, so unfair to penalize party who loses 2. Reduced access to justice – discourages those with little $ to sue. 3. Admin convenience – cuts back on peripheral litigation. 4. Can K out of it 5. Ct can still impose att fees when a party has acted in bad faith 6. Common fund (where one litigant bears costs but benefits are accrued by many – Ct may impose award of fees as equitable outcome) English Rule Two-way fee shifting in favor of prevailing party 1. Fairness –make losing party pay 2. Utilitarian Argument – reduces frivolous/ vexatious litigation Alternative to Am Rule One way fee shifting 1. Modeled on §1988. 2. Fees shift when prevailing party is ∏. 3. To stimulate enforcement of underlying right. 58
Assessing reasonable fees Cts have embraced lodestar – reasonable rate x hours expended. So regardless of K C has with L, C will receive a stat-provided reasonable fee award. C still under obligation to pay L agreed upon fee, regardless of fee award Ct gives her. Buchanon – Eliminates catalyst theory on entitlement of fees. No judgment or decree, only withdrawal. Private Att General theory – Buchanon weakens private att gen theory b/c civil rights actions are less likely in that it affects settlement negotiations. If you settle, are you a prevailing party? 1988 Fee cases: 1. Multiplier 2. Fee enhancement – in certain cases you may be able to get a higher fee b/c of complexity of case.
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Evans v. Jeff D. (US 1986) Facts: Class of mentally handicapped Idaho children sought injunction against State for inadequate educational & health care services. Before trial, State made settlement with condition ∏s waived att fees & costs. Issue: Whether settlement offer conditioned upon a fee waiver violated Fees Act of ‟76. Held: No violation occurs where settlement comes with fee waiver, in this case, but a law requiring a fee waiver in all cases would violate the Act. 1. R. 23 does not let cts approve some parts of a settlement offer and not others. 2. B/c L has duty to clients and not to his own interests, and b/c fee award would have belonged to clients, no conflict for L. Discussion: Ct (and parties) have interest in negotiating fees as part of settlement agreement, since fees can often be a large part of total sum. Not allowing for fee waivers would therefore discourage settlements. Consider fact that where party seeks damages, L can negotiate prior to rep to receive % of award, but where party seeks injunction like here, no such avenue available to L. Dissent: Undermines purpose of Fees Act which was to encourage civil rights litigants to attract competent Ls. In Class: Fees – conflict of interest? Funding by boutique law firms in securities areas
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Lawyer’s Relationship with Non-Clients MR 4.2 Anti-contact rule Niesig v. Team I (NY 1990) Facts: PI ∏ wants his attorney to question corp ∆‟s e-ees who were witnesses to the accident giving rise to lit. Issue: Whether e-ees of a corp party are considered “parties” under DR 7-104(A)(1), which prohibits L from communicating w/ a party known to have representation in the matter. Holding: New test – Read DR anti-contact rule to include e-ees‟ whose acts/ omissions in matter under inquiry are binding on the corp. All other e-ees may be interviewed informally. Rationale: 1. Policy considerations – DR does not have the force of law, so must look to it as guide to be applied w/ due regard for broad range of interests. 2. Blanket rule that all e-ees are included as parties is too broad. a. Upjohn not controlling here since it dealt w/ att-cl privilege. b. Would close off avenues of informal discovery that serve both the litigants and the justice system. 3. Control group test that only most senior managerial e-ees exercising control are party. a. Too narrow b. Nullifies the benefits of DR to corps Discussion: 1. Cts have upheld Niesig – corps cant hide behind 4.2 to prevent parties access to informal and less costly discovery which they need to determine if they even have a legit claim. 2. “Authorized by law” language of MR 4.2: where opposing party is Govt, rule read more narrowly b/c a. First Am issues arise b. Govt has duty to advance public interest, unlike a corp ∆, so any restriction on access to witnesses is regulated more strictly. In Class: 1. Consider civil liability (here) vs. crim context 2. Niesig in conflict w/ 4.2 commentary and Restatement §159(2), FN 17, p.543.
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p. 540 – Definition of Party: 1. Corp e-ees whose acts are binding on corp Directors, Bd., At UM would be Dean… 2. Imputed to the corp may be question of substantive law 3. E-ees implementing advice of counsel Within crim context – relevant questions: 1. Does anti-contact rule apply at investigatory, pre-indictment stage? a. Generally, pre-indictment activities NOT subject to anti-contact Rule. b. See Hammad, where informant setting up ∆ was acting as prosecutor‟s alter ego, so Rule applied. 2. May a prosecutor communicate w/ represented ∆ when ∆ initiates & requests communication? a. US v. Lopez (9th Cir. 1993) 1. Facts: Post-indictment contacts with ∆‟s counsel, where ∆ initiates b/c his L refuses plea considerations. Prosecutor got magistrate approval to talk w/ ∆. Holding: Upheld Cal.‟s application of anti-contact rule b/c prosecutor‟s contact w/ ∆ violated the Rule, but held dist ct erred in dismissing indictment since ∆ had secured adequate replacement counsel. b. Usually, judicial approval like in Lopez brings case within “authorized by law” excep. 3. What are remedies for violation of the rule? Federalism Concerns: Where states have implemented their own versions of anti-contact rules, can Feds (via DOJ) claim supremacy on the matter? Problem is that DOJ would be investigating itself for possible ethics violations. Sep of powers problem since DOJ is fed exec agency regulating itself. Erie non-uniform outcome problems. Why should states want to regulate the activities of Ls within their borders? MR 4.3 Fairness. When a person is not represented, the L shall not state or imply that he is disinterested. Shall make reasonable effort to correct a misunderstanding regarding L‟s role. MR 3.8(c) Prosecutor can not obtain from unrepresented a waiver of important pretrial rights.
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Lawyer-Client Transactions Fid obligations concerning property coming into L‟s possession: 1. Segregation 2. Notification 3. Record-keeping 4. Delivery 5. Accounting MR 1.15 L may withdraw funds from a trust account w/ client when payment from C is due unless payment is in dispute. - Client Protection Funds (“woefully inadequate”) - IOLTA (Interest On Lawyers‟ Trust Accounts) Mandatory vs. voluntary Interest goes to state bar to fund its programs Fifth Takings Challenge – interest is C‟s private property.
MR 1.8(a) – L-C business dealings – segway into conflicts Iowa Committee Professional Ethics State Bar v. Mershon (Iowa 1982) Facts: Mershon is attorney. He forms corp with client landowner Miller and engineer Schenk, to develop Miller‟s 400 acres of land for residential purposes. Miller contributes land, Schenk engineering services, and Mershon legal services to corp in exchange for corp shares. Development never happens b/c financing is not secured. Miller dies and Mershon argues parties had oral agreement to transfer their stock to the corp upon Miller‟s death. Schenk disagrees. Issue: Whether Mershon violated DR duty of not entering into a business relationship w/ a client. Holding: Yes Discussion: Three elements to show violation of duty: 1. Differing interests – Fee agreement for business deal made during existence of att-cl rel. 2. C expected L to exercise his prof judgment for the protection of the C. 3. C consented to transaction without full disclosure – Ct says this is where dispute arises. In Class: How to practice arms-length deals so those deals are not subject to unravel. Stranger rule: L who enters into bus transaction w/ a client must give the C the same legal advice & guidance as would be given by an L who is a stranger to the transaction. See MR 1.8
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1. Whether you can acquire an interest in litigation. Litigation as a kind of commodity. Shops fronting lit and acquiring interests – Pentagon creating a futures market on terrorists (“Diabolical, but neat!”) 2. Advancing funds to a C see Passante. No right to recover promised 3% stock interest since K not bargained for (oral) and L had duty to inform C of right to get inde counsel. Louisiana Bar v. Edwins Held: L could provide financial assistance to C under certain circumstances, provided advances not used to solicit clients. (Typically, L can only front lit costs, not living expenses, health care, etc). Advocate-Witness Rule L acting as witness in case she is trying. MR 3.7 “likely to be a necessary witness” language limited to trial counsel, not all forms of representation entire firm NOT automatically disqualified. Sexual relation with client 1.8(j)
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Conflicts of Interest In Class relationship & representation: Examples – both introduce conflicts. Sixth Amendment jurisprudence is absolute quality of rep, not relationship. Alf says in crim context, we don‟t care about or value the relationship, only the representation. How to Deduce Rules of Conflicts (“Euclidean Principles” from where Rules are Deduced): Concepts to Know 1. Rules of Confidentiality (Goes to non-disclosure) a. Per relationship, goes to notion of trust even where doctrine suggests otherwise. Could be viewed as confidentiality in soft sense. b. Per representation, goes to outcome/ result/ win-lose & risk that actual rep will be lost b/c of disadvantageous confidentiality 2. Rules of Competence & Diligence – Notion that you wont work as hard if you have competing allegiances. 3. Communication Requirements – Notions of disclosure. Fear that L will not keep you fully in the loop – may affect cl-law rep by having them be advised of certain tactical considerations. Two Norms: 1. Representation – refers to effectiveness 2. Relationship – quality of lawyer-client Two Categories: 1. Conflict b/w clients a. Concurrent rep (also called dual, joint, simultaneous) (1) Where we see it: (a) B/w two present or prospective Cs (b) B/w one present & one prospective C (2) Types (a) Diverging interests – City and indi cop sued on §1983 example. Called positional conflict when L argues for client A that a particular law is valid and for client B that it is not. (b) Antagonism (3) Directly adverse prong/ requirement – Cross ref to mandatory withdrawal req of 1.16(a). (4) Materially limited b. Successive rep – b/w a former and present or prospective C. Law of imputation 2. Conflict b/w client & lawyer Remedies for Finding of Conflict: 1. Disqualification – most common remedy 2. Disciplinary proceeding 3. Malpractice action 4. Fee forfeiture 5. Stat imposed crim penalties 6. Exclusion of evidence
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MR 2.2 L as intermediary b/w two Cs. (a) Concurrent means joint, in custody, in commercial transaction, but its NOT SUCCESSIVE. (1) Specific issues L should discuss with Cs before getting their consent. See Comment 6 directly adverse – lit suggests it arises in transactional & lit (civil & crim). (2) + (3) L reasonably believes matter can be resolved on terms compatible with Cs best interests, informed decisions, material prejudice, impartial rep w/out improper effect. (b) How L should proceed while acting as intermediary (c) L must w/draw if… Where MR 2.2 overlaps/ displaces MR 1.7 (Concurrent rep – a „consent plus‟ rule that requires consent plus objectively reasonable) FRCrim Pro 44(c) Where L wants to rep multiple ∆s, judge must hold a hearing to advise every ∆ of right to sep counsel. Presumption is AGAINST joint rep. Conflict Problems: 1. Inherent tension b/w full disclosure so as to avoid potential conflict vs. duty of confidentiality. 2. Uncertainty about facts 3. Change of facts means disclosure is an ongoing process. Brandeis‟ L for the situation vs. Franks‟ critique L should rep one interest at a time. In cases of insurance – 1. L has duty of loyalty to the insured first & foremost. Ins. cos protect themselves by including disclosure in Ks that it retains poss of litigating coverage questions against the insured and in that case, insured should get other rep. 2. Duty-to-settle doctrine poses probs for insurance ∆ counsel who rejects settlement offers. Successive Representation MR1.9 1. If matter is not the same or substantially related, L may proceed w/out consulting former client 2. If matters are substantially related, former C‟s consent must be obtained before going forward.
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Westinghouse Elec. Corp. v. Kerr-McGee Corp (7th Cir 1978) Facts: Kirkland & Ellis represents Westinghouse & API (nation-wide trade assoc.) concurrently. Westinghouse wants to disqualify counsel Kirkland & Ellis b/c they took an affirmative position on the subject of competition in the uranium industry while representing Am Petro, of which three of the appellants were members, while simultaneously repping W in this antitrust suit alleging restraint of trade in the uranium industry. Issues: 1. Whether an A-C relationship arises only when both parties consent to its formation or can it also occur when the lay party submits confidential info to L with reasonable belief that L is acting as her lawyer 2. Whether size & geographic scope of a law firm exempt it from ordinary ethical considerations applicable to Ls generally. Holding: DC abused its discretion in applying a narrow agency law approach in determining that no att-cl relationship existed b/w Kirkland and indi members and in applying a different imputation of knowledge principle to large firms as has been applied to small firms. 1. Fid relationship b/w L-C extends to prelim consultations 2. Implied relationship created Outcome: Kirkland had conflict which it could resolve by subbing counsel on Westinghouse matter or having W release three appellants as ∆s from antitrust suit. In Class: 1. Noteworthy pt is that the conflict arose from a firm engaging in both lit advocacy related conduct and non-trad advocacy oriented conduct. Suggests that conflicts will arise w/in larger firms w/ mult. divisions/ practice groups more readily. 2. Why couldn‟t a firewall have been erected here? Screening doctrine is stringent – there‟s a sense that firewalls are untrustworthy and Ct won‟t be easily persuaded that they are effective. 3. Sub relationship question where does this case go? 1.7 maybe (a), definitely (b).
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Fiandaca v. Cunningham (1st Cir. 1987) Facts: Two classes – 1) female inmates seeking prison with equal services as that provided for men and 2) mentally retarded residents of state institution (Garrity class) are both represented by NHLA. When state seeks to settle w/ class 1, NHLA rejects as against the interests of Garrity class 2. Another settlement talk results in agreement that females would be placed at mental institution. NHLA negotiates this settlement but withdraws before signing. State rejects settlement. NHLA petitions to be reinstated to rep class 1. Ct denies. Ct decides on merits that female facility inferior in violation of Equal Protection Cl and orders new facility constructed NOT on Garrity class‟s site. State seeks to disqualify and appeals. Issue: Whether NHLA had a conflict of interests in representing both clients Holding: Yes, conflict. 1. It was not reasonable for NHLA to think that its rep of class 1 would not adversely affect its rep of class 2. 2. Doctrine of Necessity doesn‟t apply here – DC denied state‟s motion to disqualify b/c it would lead to unnecessary delay. App Ct says can‟t deny a motion to disqualify b/c of expediency unless shown movant has improper purpose. NHLA argues no conflict b/c despite their rep of Garrity class, state‟s offer of settlement was not attractive for other reasons. Ct rejects this reasoning – regardless of ultimate outcome, NHLA still had duties to both classes, and both classes had interests adverse to each other. Outcome: DC‟s refusal to disqualify NHLA constitutes harmless error since state has not identified any way in which ct‟s error adversely affected its rights, and judgment on the merits would have come out the same (NHLA issue only pertinent to remedial/ settlement phase, not liability/ trial phase). Remedy of not allowing female prison on Garrity class‟s site reversed. Not a classic direct adversity example b/c classes are not suing each other. Seems like a2
1st Wisconsin Mortgage Trust v. 1st Wisconsin Corp Ct rejects absolute rule that would prevent use of work product of disqualified counsel by successor counsel. Adopts flexible approach.
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Cuyler v. Sullivan (1980) Facts: Sullivan, Carchidi & DiPasquale indicted for murder. All 3 have same lawyers (DiBona & Peruto) paid for by C & D. Sullivan trial happens first. He is found guilty on only circumstantial evidence. Other 2 ∆s acquitted in separate trials. Sullivan claims ineffective assistance b/c counsel had conflicts in representing all 3 ∆s. Issue: Whether a state prisoner may obtain a habeas writ by showing that his retained counsel had a conflict of interests. Does multiple representation = conflict? Holding: Possibility of conflict is insufficient to impugn Sixth -- ∆ must establish an actual conflict of interest adversely affecting L‟s performance. 1. Ct has no affirmative duty to inquire whether there is a conflict when you have mult rep. 2. ∆ need not raise an objection at trial, on appeal a showing that an actual conflict occurred is sufficient to implicate Sixth (don‟t need to show degree of prejudice – it is assumed). See Glasser establishing that unconstitutional mult. rep is never harmless (p. 612). Discussion: Cuyler Std requires ∆ to show: 1. Counsel actively represented actual conflicting interests 2. That conflict „adversely affected‟ counsel‟s performance. Even where ∆ wants certain counsel, DC can rule against ∆‟s choice if it will create what they perceive as a conflict. Even if ∆ waives the conflict. MR1.7(a)(2) Need showing of actual conflict. Cite to Strickland mandating showing of 1) deficiency of performance & 2) ensuing prejudice.
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State v. Callahan (KS 1982) (Disciplinary proceeding) Facts: Sale of tract of land owned by Mrs. Fulton (elderly lady) to Lowell Lygrisse. Lygrisse suggests counsel Callahan. Mrs. F interpreted Callahan‟s role as that of an escrow officer protecting interests of both parties. Callahan says he understood his role to be as scrivener representing both parties in drawing up papers after they‟d negotiated K. Callahan draws up K in accordance with terms provided by Lygrisse only. Mrs. F signs though not sure about what she is signing. Unusual provisions handing over of deed; mortgage agreement was not perfected but Mrs. F thought it was. Callahan didn‟t tell Ms. F he had a business relationship w/ Lygrisse – part owners in a corp together. Outcome of hearing panel: Callahan violated DRs in that he: 1. Represented both seller & buyer. 2. Never disclosed his prior biz relationship to Lygrisse. 3. When Fultons came to see him, he didn‟t tell them they didn‟t have a security interest in the prop anymore. Holding (Rule): L‟s duty of good faith does not cease immediately upon termination of his employment. It continues as long as the influence created by the relationship continues. Discussion: L‟s representing buyer & seller are typically ok, following certain rules including full disclosure and notice that should lit arise, L can‟t rep either side. MR1.7(a)(2)
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Brennan’s Inc. v. Brennan’s Restaurants Inc. (5th Cir. 1979) Facts: Trademark infringement and unfair competition action. Wegmann was L for entire Brennan family when they registered name. Later, dispute arose and corp stock divided in two. Wegmann continued to rep ∆s; severed connection w/ ∏. Both sides continued to use trademarked name and logo until ∏ sued. ∆s argue that name/ logo were registered in ∏‟s name for convenience only; they are for benefit and ownership of all Brennan‟s restaurants. ∏ moves to disqualify Wegmann and inde patent L Wegmann retained on successive rep theory. P. Below: DC found matter of present suit is sub related to matters in which Wegmann represented former client, ∏s. ∆s argue that in prior rep, W represented both parties jointly, and since no confidences can arise as b/w joint clients, no problem for W to rep ∆s now. Holding: Affirmed as to W‟s disqualification; Vacated as to Sprung patent L‟s disqualification Case law provides low std – so long as previous matter is substantially related to present one, that‟s enough to disqualify L. Discussion: Att-cl priv vs. duty of confidentiality (NOT the same thing – att-cl priv is narrower) Rationale for disqualifying W but not S are inconsistent. In Class: Wegmann is out per 1.9(a) b/c matters are same or sub related, materially adverse and no consent.
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In Re American Airlines (Fifth Cir, 1992) Facts: American and Northwest in dispute. Northwest alleges American violated Sherman Anti-trust by price-controlling. Vinson Elkins law firm partner Smith agrees to rep American. Later finds out other VE partner agreed to rep NW so w/draws. American sues on grounds that VE had repped them in previous lit and had agreed to here as well. All Writs Act 1651 – seeking order to disqualify VE. Issue: Whether VE‟s prior representations of American are substantially related to the present case. Holding: Yes. VE‟s prior rep of American in substantially related matters requires the disqualification of VE in this case. Broad formulation of ‘substantially related’. Discussion: 1. Sub relation test has an irrebutable presumption once sub relation is shown, Ct will presume confidential info was disclosed OR 2. TX Rules and case law Moving party shows specific instances where L revealed relevant confidential info regarding C‟s practices & procedures 3. Argument that Model Code included protection against “appearance of impropriety” vs. MR where this language was removed, indicating sub relation test should be solely concerned w/ actual fairness. Yet Brennan holds that even where L discloses no confidential info, he may still be disqualified if the 2nd matter is sub related. Maritrans Law firm representing maritime operator had consent to joint rep of a few minor competitors provided adequate screening was in place. Firm withdraws completely from Maritrans rep and solely reps competitors. Despite PA MR that allows joint rep w/ consent and screening, Ct holds c/l restriction against this will not be displaced by PA. Since sub relation exists, firm not allowed to rep competitors. Taint-shopping When a C engages in effort to disqualify opposing counsel. When done on purpose and w/ knowledge, cts may choose to not disqualify L. MR1.9(a)
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Imputed Conflicts If any one L in a firm is disqualified from repping a C, than entire firm is disqualified b/c 1. Ls who practice together talk to each other. 2. Share professional & financial interests. Restatement § 204(2) Imputation exceptions: Lets other Ls is firm of tainted L proceed with rep provided (a) Any confidential info communicated to personally-prohibited L is unlikely to be significant in subsequent matter. (b) Personally-prohibited L is subject to screening measures to keep him away from subsequent representation (c) Timely & effective notice of screening has been provided to all affected Cs. Government Lawyers – Sources of Law Controlling Conflict: 1. Criminal stats (fed & state) – like a person‟s private documents relating to ss, tax, health. a. Restrictions governing activities during federal employment –18 USC §207, §216 (punishments, including civil fines) b. Restrictions on post-govt activities DR 9-101 provide that L shall not accept employment in a private matter upon which she acted as a judge or in which she had substantial responsibility while a public e-ee. Means even if private party is on same side as former gov e-ee, cant be involved. In this way, it is broader than MR 1.9 that limits sub rep where adverse to former C. 2. Agency rules (particular to a specific agency, like lobbying regs) 3. Judicial decisions – Armstrong v. Mcalpin (en banc, 2c Cir. 1980) – Screening of former govt lawyer. While reasonable minds differ on ethics of screening former SEC investigator now private att w/ law firm hired by defrauded party, imputed disqualification is not required absent a threat of taint to the trial. 4. Lawyer codes MR 1.7 Applies to private and govt/ former govt lawyers
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Nemours v. Gilbane (Dist Ct. 1986) MR 1.9 – Successive rep and duty of loyalty Facts: Dispute arising out of construction of an addition to a hospital. Nemours commissioned construction. Gilbane was the GC. Pierce was subC. Furlow did mechanical engineering. Nemours & Furlow are co-parties to present action against Pierce. Nemours wants to have Bradley, L for ∆ Pierce, as well as entire firm Biggs, disqualified b/c Bradley previously represented Furlow when he was with prior firm, Berg. In this capacity, he reviewed Nemours documents but did v. little b/c he was a low-level assoc. Issues: 1. Whether Bradley should be disqualified in present action against Nemours b/c of his prior rep of Furlow. Was Bradley representing both Nemours & Furlow, or just Furlow? 2. Whether entire firm of Biggs should be disqualified from repping Pierce (or whether Chinese Wall is sufficiently effective). Holding: 1. Yes, Bradley should be disqualified. See four reqs of 1.9 that are all met. 2. No. The screening mechanism here is appropriate to rebut the presumption of shared confidences Ct calls it a cone of silence. (An attorney‟s degree of prior involvement and associated factors, like fees collected and whether he controlled strategy, are considered in evaluating effectiveness of this cone). Discussion: As to individual L Bradley – Four MR 1.9 requirements: 1. L must have had an att-cl relationship w/ former C. No express att-cl relationship w/ Nemours, but an implied one here. 2. Present C‟s matter must be same or substantially related matter. Showing the L might have acquired substantially related matter is enough (don‟t need to show that L actually acquired said matter). Here we have same matter. 3. Interests of 2nd C must be materially adverse to those of former C. Ct says this req is met. 4. Former C must not have consented to rep after consultation. Also met. As to Biggs firm – MR 1.11 Imputing exception where appropriate screening mechanisms in place: 1. Old rigid formalism of Canons against an “appearance of impropriety” rejected in favor of modern pragmatic balancing fairness analysis. 2. Competing interests – protect public confidence and a person‟s right to retain counsel of his choice (w/out Ct disqualifying) vs. conflict/ possible prejudice/ unfairness. 3. Considering harm that would accrue to Pierce should Biggs have to withdraw, and considering little harm to Nemour should they stay, in best interest to deny motion for disqualification. Cone vs. Firewall Cone applies to one person in particularized way. MR 1.10(b)
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SIPC v. Vigman (Dist. Ct. Cal 1984) Facts: SIPC brings securities violations and RICO charges against 75 ∆s. 5 of them move to disqualify ∏ SIPC‟s counsel b/c Boltz & Hartman (the attorneys) are former govt attorneys (SEC) and the present matter is related to their prior govt work thus violating MR 1.11(a). No screening has occurred. SEC has refused to give consent to Boltz & Hartmen‟s rep. Holding: B & H must be disqualified. 1. SEC has declined to give consent to B & H‟s current representation. (Ct rejects SIPS‟s contention that govt consent provision was meant to limit application of Rule to switching side cases only). 2. Same matter here as previous SEC litigation in which B & H participated personally & substantially within meaning of Rule. When he worked for govt he had all the confidential info and would risk both the relationship & rep.
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Representation of entities None of the models fit within Rules. 1. Corp form not envisioned at time of enactment of Model Code to be as widely applicable as we see it is today. 2. Adversarial system – classically, we have individualized, clashing interests. Client as entity doesn‟t classically fir this paradigm 3. Classical liberal legal theory – individual rights/ boundaries vs. the state (explains why the Con is document of positive & negative rights). Idea that groups or communities can be treated as amalgam of individual interests doesn‟t work for courts b/c – looking at process democratically – lacks unity & mechanisms for group decision-making. 4. Role of court in resolving group disputes – inter or intra – group conflict is not easily rendered. Who owns the privilege? The corp. Doesn‟t run to the directors & officers. Client Rep 1. Govt practice: agencies, indi official cap (civil service & pol appts.), branch 2. Non-profit practice: indis, FIAC can do classes b/c not taking certain fed $, groups, like homeowners assn. 3. Corp practice: entity, Bd & Officers, s-holders, e-ees, managers 4. Non-corp practice: indis, classes, groups including association, partnership or a town.
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Meehan v. Hopps (Cal App 1956) Not 1.13 not enacted at time Facts: Policyholders, s-holders, creditors of corp bring action against Hopps chairman of the Bd for dominating & managing company‟s affairs for personal gain in violation of his fid duties. ∆s move to disqualify ∏ lawyers on ground that ∆Hopps had turned over documents to them (dual rep prob). Issues: Had there been an att-cl relationship b/w Counsel & Hopps? Holdings: No. Client was the corp, not Hopps personally. As such, there is no conflict when the corp client wants to sue a former officer as here even where some of the info obtained by the firm came from Hopps, b/c Hopps was serving in his official capacity when he delivered that info. Rationale: Hopps claims firm repped him personally; Ct finds otherwise. Matters in which Hopps conferred w/ counsel were all related to the management of the corp, as was his duty as an officer of the corp. If a corp‟s attorney were to have duties to every officer, s-holder and director of that corp simply by virtue of its rep of the corp, result would be unfair and violate attorney‟s first duty to the corp, his cl. Rule: A lawyer for a corp represents the corp and not its indi s-holders, officers or directors. MR 1.13(f) L for an organization must provide corp officers/ etc. a warning that it is not repping them personally whenever it is apparent org‟s interests are adverse to those if its constituents. Discussion: In E.F. Hutton v. Brown, Ct reached opposite holding. Brown‟s lawyers, though they repped corp Hutton and not Brown personally, were enjoined from repping Hutton in current claim. Distinguished from Meehan b/c firm lawyers appeared before a tribunal and did not correct Brown‟s assertion that they were his lawyers, giving relationship air of legitimacy. Ct constructively creates att-cl relationship based L‟s conduct in failing to correct the record. Case law suggests that an officer may never be able to assert att-cl priv against the corp itself (on corp matters, though maybe on personal matters). In Class: 1. Formation of att-cl relationship is fact specific. (Note fact specific inquiry done by ct) 2. Firm repped the corp as distinct from the officer Hopps. This involves dispute b/w entity corp & Bd. Obligations run to company, not indi officer. Would 1.13, had it been enacted, have resolved this conflict? 1. Doesn‟t seem to – see (g) that takes us to 1.7 (applicable provision (b)) 2. (g) language – consent given by appropriate official of the org. Who is this? S-holders…
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Yablonski v. United Mine Workers of America (UMWA) (DC Cir. 1971) Facts: Action brought by indi members of UMWA against UMWA and named officers for misappropriation of funds. Issue: Whether outside counsel who usually reps UMWA should be disqualified from repping them in this action after it withdrew from counsel for the indi ∆s. Holding: Outside counsel is disqualified b/c the possibility exists that firm as counsel for Boyle personally might not be objective in representing UMWA. Rationale: Looking to possibility/ chances that conflict may arise in the future. Concerned w/ appearance of impropriety. Discussion: No conflict here First 6 mo. period of dual rep was ok per Ct b/c firm was trying to ascertain exact nature of the lawsuit and if it appeared groundless. Yes conflict here Firm has repped Boyle in his indi capacity. - Likely to be 1.7(a)(1) thru b(3) problem – since ct found rep to be non-consentable. Following decision, outside counsel withdrew from repping UMWA and in-house took their place. ∏s challenged in-house‟ representation. Ct held in-house was disqualified b/c in-house was not independent – had repped to some extent indi officers. Contrast to Cannon Corp & inde officer ∆s needed to seek sep inde representation from the start b/c unrealistic and problematic to have joint rep until such time as a conflict arises, and then get second counsel on case for inde ∆s. However, comment to MR 1.13 suggests joint rep is presumptively valid. (makes sense in traditionally smaller, closely held corps). Alf says in some way it is consistent with Yablonski -Ls serving dual roles – as outside counsel & member of client‟s Bd. 1. Argument that though not indicative of per se conflict, creates sit that very well may give rise to one. 2. Privilege Not available for info L learns thru membership on Bd. 3. „Intra-class/ group/ entity‟ conflict, under non-profit client rep. See this is Amchen with t kinds of classes – inventory & futures. Also family context, setting up T& Es, probating.
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Four kinds of actions Enforcement regulatory (like SEC) Civil – s-holder, also under any 3rd party beneficiary theory Crim Ethics Disciplinary New Version of MR 1.13 - Varying stds of knowledge per 1.13(b) – doesn‟t necessarily claim-preclude. Consider corp def of „knows‟ - Unless cl Rule leads you up the ladder, and L has to actively decide that it is NOT in best interest of the org to go up the ladder. - Vision of corp law is vulcanized. This rule suggests that knowledge and culpability will be different at different points. MR1.6 & 4.1 noisy withdrawal In re Carter and Johnson C & J are Ls for National Telephone Co., completely under the control of Hart. Ls helped Hart prepare docs for SEC that contained material omissions. Case used by Commission to clarify conduct Ls should take in sim situation in future. However, Commission did not impose aff duty of disclosure on Ls dealing w/ SEC. Basically, std that results is vague “What is required is some prompt action that leads to the conclusion that the L is engaged in efforts to correct underlying problem…” In re Gutfreund Case seems to go farther than C & J insofar as Commission held, where appropriate, disclosure to reg authorities might be mandated where Ls know about their corp client‟s false bids. No aff duty however. These 2 cases led to Sarbannes-Oaxley – but regulatory in agency or bar sense?
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Lincoln Savings & Loan Lincoln was subsidiary of American Continental Corp (ACC), both owned by Keating. Engaged in bogus land transaction scheme that gave Lincoln access to cash thru its tax sharing plan. In Re ACC/ Lincoln Savings & Loan Securities Lit (Jones Day) (DC, Ariz 1992) “The Holmesian acid bath test” (meaning horror – acid bath) Facts: Suit brought by purchasers of securities against ACC (Lincoln‟s holding co.)/ Lincoln for violations of fed sec law (aiding & abetting), RICO, & c/l claims of fraud, negligent misrep, breach of fid duty. Issue of their lawyers‟ liab. Jones Day hired by ACC/ Lincoln to perform an audit, help them get in compliance. Evidence in record that Jones Day knew ACC/L not complying. Wrote opinion letters as part of sec registration. Issue: Whether Jones Day may be held liable for ACC/L‟ §10-b, RICO & c/l violations. Holdings: 1. § 11 Liability an L who provides a legal opinion used in connection w/ an SEC regis is an expert w/in meaning of stat, so Jones Day issued an „expert‟ opinion. 2. Stat of limitations is tolled under conservatorship theory – action is tolled while wrongdoers control the corp. 3. Qs of material fact remain about Jones Day‟s knowledge of violations need showing of reckless scienter std (a degree less than intent). Rule: Where a law firm believes a corp cl. is committing serious regulatory violations, firm has an obligation to actively discuss the violative conduct, urge cessation, and withdraw from rep where firm‟s legal services may contribute to the continuation of such conduct. See MR 1.16. Kaye Scholer – hired by ACC/L to oversee bond offering and after Jones Day during bank examination conducted by reg agency OTS. Rep gave rise to charges against firm and indi Ls that KS had knowledge of material facts but failed to disclose to the banks, thereby making false & misleading statements. In Class: 1. Every conceivable claim from multiple sources. 2. Bondholders actions for fraud based on op letter – ct holds there are gen issues of mat fact 3. RTC federal receivership/ conservator – appointed to oversee liquidation. Scope of engagement (3 activities) – Jones Day oversaw compliance, lobbying, and to draft legal op letter. Claim that KS was involved in regulatory counsel (not litigation counsel). KS wants to claim lit counsel role, b/c gives them leeway to be more aggressive? ACC and Lincoln were differentially regulated If firm‟s client is ACC it should have to go to Lincoln when going up the chain of command. 80
Client cant silence a firm where firm has disclosure obligations due to joint rep (like here, joint rep of ACC & Lincoln) No privilege as between joint clients. -- Ficket FDIC v. O’Melveny receiver of a failed thrift stated a claim for professional negligence against O‟Melveny where the firm failed to investigate company‟s unsound financial condition despite clear „clues‟ (departure of auditors and an outside firm; no investigation done at all so no due diligence).
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Fassihi v. Sommers, Schwartz, Silver, Schwartz & Tyler, P.C. (Mich. 1981) Facts: ∏, a 50% s-holder, director & officer in Livonia, a professional medical corp, brings suit against his former corp partner‟s L claiming breach of fid duty, legal ethical duties, fraud, malpractice. L helped oust ∏ from the 2 person corp. ∏ claims L had duty to him thru duty to corp. Also claims fraud in that ∆ failed to divulge dual rep of corp and other director Lopez personally. Issue: Whether an attorney representing a closely held corp has an individual duty to a 50% owner of the entity. Holding: 1. No att-cl relationship b/w ∏ director & ∆ firm. The L‟s client is the corp, not the indi s-holders. However, simply b/c no att-cl relationship arises doesn‟t mean ∆ has no fid duty to ∏. This is q of fact. 2. ∆ had duty to disclose dual rep of corp and Lopez to ∏. ∆ did not have duty to divulge existence or content of Lopez-St. Mary‟s Hosp. K, since this protected by att-cl confidentiality. 3. ∆‟s refusal to give info at deposition pursuant to invocation of att-cl relationship is not supported. a. ∆ had duty to ∏ as s-holder of corp insofar as ∆ as corp‟s L. Any corp info is therefore not protected. As a 50% s-holder, ∏ is equally entitled to this info. b. Pursuant to crime-fraud exception. Discussion: Cts seems to rule this way b/c it is closely held corp – what if a s-holder with a smaller % of interest in corp sued corp L for breach of fid duty? Maybe no fid duty owed that minority s-holder. Garner “Good cause” std: Corp‟s att-cl priv is not protected where s-holder can show good cause for s-holder access to info. Held: Where mgmt is charged w/ breach of fid resp., accountability to sholders justifies interference w/ confidentiality. In a way, seems Garner would have been eviscerated by Upjohn, since Garner rests on precedent that allowed those to whom a fid duty is owed to gain access to communications b/w fid & her counsel, but not the case.
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Fickett v. Sup Ct (Ariz. 1976) Facts: Present conservator of estate sues att of former guardian on theory that L was negligent for failing to discover that guardian had liquidated guardianship estate & misappropriated funds for personal benefit. Holding: Attorney may be held liable to a third party with whom he is not in privity. Here, att owes duty to ward (old lady) even though he is officially guardian‟s L. Rationale: As a matter of pub policy, att is liable. Factors to consider: 1. extent to which transaction was intended to affect ∏ 2. foreseeability of harm to ∏ 3. degree of certainty that ∏ suffered injury 4. closeness of connection b/w ∆‟s conduct & injuries suffered 5. moral blame attached 6. policy of preventing future harm Hazard, “Triangular Lawyer Relationship…” 1. L guardian ward 2. L corp officer Can‟t say that L must treat 3rd party as co-client b/c conflicts would come up. If we treat 3rd party in his legal cap, then in cases where 3rd party and client‟s interests are aligned, there is duty to 3rd party. (B/c client is acting as agent for 3rd party). L‟s responsibilities may be analogized to duties arising from rules of confidentiality and loyalty. Basic problem L faces in triangular relationships her professional responsibilities depend on what the other 2 parties do for and to each other.
Government Lawyers Who is the government lawyer‟s client? a. The public b. The agency in which he works (not the indi officers therein) (this is more often the case) Governmental Att-Cl Privilege: a. Generally, Att Gen seems to have authority to waive the government‟s priv (especially where review of agency decision and not indi officer is involved) b. 28 USC §535 – requires fed e-ees to inform Att Gen of possible crim violations by fed eees/ officers – under this stat, govt lawyers are under same obligation to report, so they do not have the same protection as private Ls. c. Inde Counsel Stat – transfers Att Gens authority to a specially appointed inde counsel. Presumably Att Gen‟s authority to waive privilege comes with that transfer of power.
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In re Lindsey (DC Cir. 1998) Issue: Whether an attorney from Office of the Pres called before a federal grand jury may refuse to answer questions on possession criminal conduct on basis of government attorney-client privilege. Holding: A government attorney-client privilege exists, but is overcome upon a showing of need when a government attorney learns, through communications with client, of info related to criminal misconduct. Discussion: - Attorney-client privilege protects confidential communications made b/w cl & att when the communications are for the purpose of securing legal advice or services. - Govt att-cl privilege exists – Exemption 5 of FOIA; proposed FRE; Restatement; where govt atty acts as private counsel representing fed e-ee sued in indi cap. - Issue is ripe since it appears at least some of the conversations b/w Lindsey & Clinton would have “concerned the seeking of legal advice”. - Govt L has additional con responsibility to investigate & prosecute fed crimes. Beyond typical duty to client. - Public‟s interest in uncovering illegality among its elected officials means Office of the President has a duty, recognized in official policy & practice, to turn over evidence of a crime. - Office of Pres claims priv b/c grand jury is seeking to impeach P so they claim communications are in prep of litigation. But Ct analogizes impeachment proceedings more to a political process rather than judicial proceeding. Hence, not in prep of litigation in trad sense. Dissent: Maj decision – has chilling effect on att-cl communications. No reason to abrogate Presidential att-cl relationship in „reason‟ or „experience‟. Crime-fraud exception is enough o abrogate the att-cl priv – don‟t need a ruling that gets rid of it for govt officials 11/19/03 Commercial class actions – John Coffee, issue of collusion, p.824. 1. Class actions increasingly becoming shield for the ∆, not tool for the ∏. 2. Now, we have problem of unsuspecting future claimants having their claims extinguished. 3. Collusion b/w the attorneys. Raises qs of adequacy of L‟s rep. In Fla Bar Lit Collusion q is in the air, but hasn‟t materialized. Why? Collusion as cause of action. Conflict insofar as ∏‟s L is becoming consultant to ∆s. At least a 1.4 and 1.7(a) issue. Double dipping Ls getting two fees, as class counsel, and legal rep of individual (incremental) filing claims, like when a future fund is established, and claimants are seeking to draw from it.
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Georgine v. Amchen Products (EDPA,1994) Global settlement case. Typicality and adequacy problems. Limited Fund problem. Facts: Asbestos-related pi or wrongful death claims. Two classes of ∏s: Inventory (named) and future (unnamed) exposure-only. DC certified class pursuant to 23(b)(3). App ct reversed b/c question of law or fact does not predominate over individual claims, and 23(a)(4) – adequacy of rep not met since concurrent conflicts exist. Issue: Whether proposed settlement is fair to the class Holding: No Discussion: Might future class have claim of breach of fid duties against Ls that settled claim for both classes? Prob not says Alf since in certifying class, and again on reviewing settlement class, Ct must make adequacy determination, which necessarily includes a conflict analysis. If it passed muster as to certification, presumably ct found no conflict problem, so not likely there‟d be a breach of fid duties claim against the L. Also, claim preclusion problem. 1. Issues of civil pro have ramifications for ethics rules disputes 2. Is there claim & issue preclusion based on this kind of settlement? Seems like it.
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Chapter 10 – Regulation of Competition in Legal Services Supply of Legal Services: 1. Non-lawyers prohibited from practicing 2. Restrictions on advertising & solicitation – flow of info issue. 3. Restrictions on form of delivery, like group legal services, non-L ownership of firms, dual practice 4. Reqs that limit multistage practice Market Imperfections: apply to middle class with relatively isolated & infrequent need for legal services. Not repeat players 1. Information imperfections in legal services: a. Protect unknowing consumer – paternalistic b. Asymmetry of Info market for lemons (with high quality producers lowering their stds in order to compete. 2. Neighborhood effects (externalities) 3. Free rider (bad Ls not adhering to bar stds but benefiting from public perception that they are regulated by the bar). Unauthorized Practice There is pub policy reason for unauthorized practice – access/ comp and effective rep (regulatory problem). No restrictions on appearance in admin hearings. Counseling/ practice vs. rights education, see CHRE and CEDAD.
Advertising, 1013-35: Traditional notion that it was unseemly for Ls to advertise their services. Idea that L served notions larger than himself – pub servant/ citizen L – would be undercut by a commercial spirit. Idea that advertising legal services would inevitably be misleading to lay people. Since the „60s consumer protection movement and freedom of access to info. Notion that paternalistic protection of the public from scheister Ls was unnecessary – public could figure out on own. Case law on First Amendment – extended to protect commercial speech. Except in-person solicitation of legal business. Law as profession vs. law as business: - Notion of aristocracy of the bar. - To set up dichotomy as professional (haves) and business-people (have-nots) is not totally accurate. Not such a clear distinction. - Is regulatory impulse anti-business? Advertising rules (7.1-7.4) have developed from the model of L as professional.
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Ohralik v. Ohio State Bar Ass’n (US 1978) Ambulance chaser. Gets oral agreement to rep car accident victim who later discharges him b/c she doesn‟t want to sue. Ohralik proceeds anyway, recovers $ and keeps 1/3 contingent fee. State discipline committee sanctions him with indef suspension. His solicitation involved fraud, undue influence, overreaching and other forms of „vexatious conduct.‟ State‟s interest in protecting the lay public is stronger that Ohralik‟s interests – free assoc. In re Primus Primus publicly reprimanded by So Caro. Supremes for soliciting Williams and other mothers in like position who were allegedly being forced to receive sterilization if they sought medical benefits. ACLU took on rep. Supremes ultimately decided this case was unlike Ohralik since ACLU undertook rep not for pec gain but to advance civil liberties objectives of the ACLU. State action in this case was not narrowly tailored to further state interest of protecting lay people from lawyer solicitation. Shapero v. KY Bar Ass’n (US 1988) Brennan Issue: Whether a state may, consistent with First & Fourteenth Ams, categorically prohibit Ls from soliciting legal business for pecuniary gain by sending truthful & nondeceptive letters to potential clients known to face particular legal problems. Holding: Merely b/c targeted, direct mail solicitation presents Ls with opps for isolated abuses or mistakes does not justify a total ban on that mode of protected commercial speech. Ban was overinclusive. Dissent (O‟Connor, Rehnquist, Scalia): States rights to decide. Went For It (US 1995) Contacting accident victims 1. Prohibited direct mail contact for 30 day (grieving period) 2. Prohibited Ls from accepting referrals from „runners‟ where runners actions violated 1st rule: Central Hudson Test (3 prongs): 1. State compelling interest 2. Rule must directly and materially advance state‟s interest 3. Narrowly tailored Ongoing Debates: 1. Ancillary business activities – can L firms be one stop shopping places for Cs – providing banking, investment advice or assistance – see p. 1045, multi-disciplinary practice and Piper. No reciprocity in Fla – bar b/c it would be a magnet for retired Ls coming here. 2. Multi-jurisdictional practice what law governs, see 8.5.
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Chapter 11 – Lawyers & Justice 1. We don‟t tend to hear about injustice going on in the community. Maybe discrete, contextspecific. 2. p. 1112 Wexler – Practicing Law for Poor People. One of the children‟s mothers had developmental deficiencies she lacked the capacity to recognize, and he did nothing. Justified /c he didn‟t want to distract mother from her leadership role in the group. Utilitarian view. Best for the group. 3. voice. loyalty. exit.
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