Pro. Responsibility Fox – Fall 2006 Brian Ryckman I. LAWYERS, ROLE, & LAW – CHAPTER 1 A. Law Governing Lawyers: Two vast bodies of law together constitute the ―law governing lawyers.‖ These two sources are: (1) the lawyer codes; and (2) the application of general law to lawyers. 1. Ethic Codes and Model Rules: Every state has an adopted code of ethics for lawyers that operate as a set of mandatory legal rules governing lawyer conduct. In addition, the American Bar Association (ABA) has adopted a series of three model ethics codes that have served as models for state adoption. Because the ABA is a voluntary, non-license granting organization, though, none of these three has ever been directly controlling on a lawyer’s conduct. i) State-Adopted Codes Are Controlling: The states have adopted ethic codes. Although all but one of the state-adopted codes are based on the ABA models, it is the state-adopted code, not the ABA model, that actually controls in the particular jurisdiction. State-adopted lawyer ethic codes either by legislation or by rule-making action by the state’s court of last resort. 2. Case Authority: In several ways, courts make the law governing lawyers… i) Interpretation of Ethical Codes: Courts have interpreted the existing ethic codes and, as such, make the law of lawyering in their interpretive activities in the same way that courts make the law in interpreting statutes. ii) Inherent Power to Regulate Lawyers: Because courts have inherent powers to regulate lawyers (who are officers of the court), a common law of lawyer regulation also exists. 3. Other Substantive Law: The law of a wide variety of other substantive areas also forms an essential part of the law of lawyering. This includes – but is not limited to – contracts, torts, fiduciary duty law, agency law, criminal law, procedural law, antitrust law, and other various administrative regulations. B. Role of Lawyers 1. Morally-Neutral Adversarial Role: The standard ethical justifications for lawyers’ neutral partisan role rest on two major premises. The first, drawing upon utilitarian reasoning, is that an adversarial clash between opposing advocates is the best way of discovering truth. The second premise, based on individual rights, is that morally neutral partisanship is the most effective means of protecting human freedom and dignity. i) Critique: Lawyers should be morally responsible, and the avoidance of ethical responsibility is corrosive for lawyers, clients, and the legal system as a whole. Taken to its logical extreme, a professional role that gives primary allegiance to client concerns undermines legal order. 2. Lawyers as Instruments: Focus on providing individual client representation and adversarial advocacy. Pride themselves in presenting almost any client who seeks their assistance, on the theory that every point of view deserves legal representation. They suppress their own moral judgment as the client’s value system controls representation, and accordingly, the lawyer escapes moral accountability. 3. Lawyers as Directors: Directive lawyers tend to focus on their roles as officers of the legal system and members of a profession. Once they agree to take on a representation, directive lawyers nod to basic fiduciary duties, but also regard themselves as legal experts who should determine how to handle the matter with little client consultation. 4. Lawyers as Collaborators: Collaborative lawyers create enough professional distance to offer objective advice, but foster a relationship that enables the client to articulate the ends and means of the representation. Clients are seen as best able to make decisions for themselves, but need the expertise and perspective of lawyers to consider fully both their own interests as well as the effect of their decision on others. The lawyer and the client are jointly held morally accountable. II. DECIDING WHOM TO REPRESENT – CHAPTER 3 A. No General Duty to Undertake Representation: In general, lawyers have no duty to undertake a particular representation. A lawyer is not like a public utility that must accept every customer who is willing to pay the necessary fee. In general, a lawyer chooses which clients he or she will agree to represent. 1. Moral Choice: For some commentators, lawyers make their most significant moral choices when they determine which clients to represent. A lawyer considers the moral worth of the representation when he chooses whether or not to undertake a particular representation. Once representation is undertaken, that lawyer then suspends moral judgment in favor of zealous representation of the client’s interests. 2. Financial Considerations: A lawyer’s practice situation and the attendant financial concerns also play a role in the lawyer’s decision to accept or reject offers of employment from clients. 3. Duty to Reject: In some circumstances, lawyers are prohibited from accepting – thus the lawyer must reject – representation (MR 1.16(b)). These include when…. i) Representation will Violate Ethical Rules: A lawyer has a duty to reject representation when the client’s claim or legal position is frivolous (MR 3.1), when the purpose is merely to harass someone (MR 3.1), or when the lawyer would lack competence to represent the client (MR 1.1). ii) Representation Will Violate Other Law: When accepting representation will violate law other than an ethics rule, the lawyer has a duty to reject the representation. (MR 1.16(a)(1)). iii) Lawyer’s Physical or Mental Heath: When a lawyer’s health will prevent the lawyer from delivering competent service to the client, the lawyer has a duty to decline the representation (MR 1.16(a)(2)). B. Court Appointments: A lawyer has a duty to accept – i.e. must accept – court appointments to represent clients, except when good cause exists to decline (MR 6.2). 1. Good Cause: Good cause exists in the following circumstances (and thus can turn down appointment)… i) Violation of Ethics Rules or Other Law: If the representation will violate an ethics rule or other law, the lawyer must decline the appointment (MR 6.2(a)). ii) Unreasonable Financial Burden: When the appointment would likely result in an unreasonable financial burden, the lawyer is permitted to decline the appointment. Simple financial loss is insufficient. The financial burden must be an unreasonable one. (MR 6.2(b)). iii) Repugnance for Client or Cause: Mere dislike of the client or cause is insufficient to decline the appointment. When a lawyer finds the client or cause so repugnant as to threaten the lawyer’s ability to provide competent services, however, a lawyer is permitted to decline – and indeed must decline – the appointment (MR 6.2(c)). 2. Requirement of Acceptance: Although the U.S. Supreme Court has held that the federal appointment statute merely authorizes federal courts to request – rather than command – that a lawyer accept an appointment (see Mallard v. U.S. District Court (1989)), some states have taken the position that the admission of practice in their states implies an agreement by each lawyer to accept court appointments. i) Monopoly Theory Justification for Mandated Representation: Some courts have taken the view that attorneys are obligated to comply with court ordered appointments under a monopoly theory – i.e. that attorneys must provide legal services to indigents without compensation by virtue of exclusive privilege they have been granted to practice law. Because meaningful access to the courts can be had only through licensed attorneys, they are required to represent those who are unable to afford representation (Bothwell v. Republic Tobacco Co., D. Neb. 1995). ii) Marketability Analysis: To determine whether the appointment of counsel is necessary for reason of indigence under the monopoly theory, however, a marketability analysis must be performed. a. Analysis: (1) Ask whether, realistically, there is a market of lawyers who practice in the legal area of the plaintiff’s claims; (2) In cases where such a market exists, ask whether the plaintiff has adequate access to that market; (3) If there is access, examine the typical fee arrangement used in the particular area of the law implicated by the indigent plaintiff’s complaint, specifically if contingent-fee or other low-cost financing arrangements are generally available in the area of law and would be feasible for the plaintiff; (4) Finally, if fee arrangements are available, determine whether market’s rejection of the party’s claims was the result of the indigency or for other factors (including precedent, merits, experience, etc.). If for indigency, appoint the lawyer. C. Pro Bono Service: Every lawyer has a professional responsibility to – i.e. should – provide legal services to those who are unable to pay. The ABA suggests that each lawyer should aspire to render at least 50 hours of pro bono legal services per year. 1. Mandatory Pro Bono Reporting: Florida has implemented mandatory pro bono reporting and the results are fairly widely publicized. The state has received a demonstrable increase in volunteer pro bono representation. 2. Self Imposed Mandatory Pro Bono: Only some local bar associations have instituted mandatory pro bono requirements. This is not widespread. 3. Limited “Civil Gideon”: Recently, the ABA suggested that in a particular class of cases, there should be mandatory representation (e.g. child welfare, housing, etc.). Argument is that even though the government should provide better funding, as long as they do not, mandatory pro bono should be required. 4. Example Appropriate Services: Model Rule 6.1 suggests some of the following as appropriate for pro bono service: providing service at no fee or reduced fee for those of limited means; service to religious, civic, governmental, educational, or charitable organizations at no fee or reduced fee; activities to improve the law, such as participation in bar committees that draft model legislation; and providing financial support for organizations that provide legal service for those of limited means III. COMPETENCE AND COMMUNICATION – CHAPTER 4 A. Defining “Who is the Client‖: Misunderstandings between lawyers and real/prospective clients cause problems. Misunderstandings usually occur when (1) a lawyer wants to decline a specific request for representation (see Togstad); (2) a lawyer provides legal services to some – but not all – of the parties to a transaction; (3) a lawyer wants to prevent reliance by unrepresented third parties who are beneficiaries of the lawyer’s services to another client; and when (4) a the lawyer wants to prevent a claim for negligent misrepresentation (see Greycas). 1. When Attorney-Client Relationship Begins: The attorney-client relationship formally begins when a client reasonably believes that the lawyer has undertaken to provide the client with legal service. The relationship does not depend for its onset on the existence of a written contract or a fee payment. i) Nonengagement Letters: A nonengagement letter should state – among other things – that the attorney is not representing the prospective client, that no legal advice was given during any discussions, and making the prospective client aware of any applicable statute of limitations running on the claim. Togstad v. Vesely, Otto, Miller & Keefe (Minn. 1980): Client consulted lawyer about a possible med-mal claim. After 45 minutes of questioning, lawyer advised client that he didn’t believe that she had a viable claim but he would consult with his partner about the issue. He did not discuss any fee arrangement, request medical authorizations, or advise her to see another attorney more experienced. When Client did not hear from lawyer for a few days, she assumed that lawyer and partner concluded that she did not have a viable claim. After the statute of limitations had run, Client learned that it was a viable claim and sued for legal malpractice. Held: Lawyer and Client had an attorney-client relationship under both tort theory (reasonably foreseeable negligent advice could cause injury) and contract theory (detrimental reliance). ii) Engagement Letters: When retaining a client, an engagement letter – at minimum – should address: explanation of the scope of the legal services to be provided; explanation of the attorney’s fees to be charged, expenses and billing practices; and information about the client’s right to arbitrate fee disputes. 2. When Attorney-Client Relationship Ends: A client may discharge a lawyer at any time without cause. A lawyer has no protected expectation of continuing employment with a particular client, and thus, lawyers do not have claims for wrongful discharge by clients. i) Disengagement Letters: At the close of a matter, a disengagement letter should be sent to make clear the reason the relationship ended and to give appropriate warnings about unfinished work and time deadlines. The letter also can address whether the client wishes the lawyer to communicate with successor counsel, and can provide for the orderly transmission of client files and documents. B. Duty of Competence: Competence requires that the lawyer possess and exercise on the client’s behalf ―the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation‖ (MR 1.1). Diligence is the timeliness aspect of competence. Lawyers are obligated to be diligent in their client’s behalf and this requires a persistent pursuit of the client’s matter (MR 1.3). 1. Does Not Require Possession of Expertise at Beginning of Representation: A lawyer is not required to know everything about the client’s legal claim before undertaking representation. It is not a breach of the competence duty for a lawyer to undertake representation without such knowledge if the lawyer will be able to acquire the necessary knowledge with reasonable diligence. 2. Basic Skills and Knowledge are Always Required: Virtually all practicing lawyers in all areas of expertise must have certain basic skills to be ―competent.‖ These basic skills include an understanding of the use of precedent, legal research skills, ability to identify and evaluate a client’s problem, and writing/drafting skill (MR 1.1 Comment). 3. Emergency: In an emergency situation, a lawyer may provide limited assistance to a client in a matter on which the lawyer would ordinarily require further study or research before service was rendered. However, a lawyer must limit this service to that which is necessary under the circumstances and this does not create immunity for the lawyer from any resulting malpractice claims (MR 1.1 Comment) 4. Continuing Competence: Lawyers must maintain competence throughout their careers. Most states have imposed continuing legal education requirements that are tied to the lawyer’s permission to continue to practice law in the state. C. Duty of Communication: Lawyers owe clients a duty to communicate with clients (MR 1.4) and to meaningfully share decision-making responsibilities with them (MR 1.2). 1. Communication: There are two parts of the general duty to communicate (MR 1.4). i) Keeping Client Reasonably Informed: A lawyer must keep a client informed of the status of the client’s matter and must respond to a client’s reasonable requests for information (MR 1.4(a)). ii) Duty to Explain Matters: In order for the client to be an effective partner of the lawyer in the decision- making process and for the client to intelligently manage his own affairs, the lawyer must explain matters to the client sufficiently to allow the client to function and to make informed decisions (MR 1.4(b)). 2. Share Decision-Making: As the client’s agent, the lawyer must generally abide by the client’s choices. Further, the lawyer lacks the authority to make and implement certain decision on the client’s behalf. i) Scope of Representation: The scope of the attorney-client relationship is generally set by contract and lawyers and their clients may negotiate and settle on the lawyer’s scope of representation. ii) Means v. Ends: Generally, clients set the goals or ends of the representation, whereas lawyers are generally empowered to determine the best means to sue to achieve those ends. (MR 1.2(a) Comment). iii) Client’s Decisions: The law is clear that certain decisions are the client’s alone, not the attorney’s… a. Settlement: Clients, and not their lawyers, have the authority to settle matters. A lawyer must – i.e. subject to discipline – communicate all bona fide offers of settlement from an opposing party to the client, and the ultimate decision about whether or not to accept an offer is the client’s. b. Entry of Plea: A decision to enter a particular plea in a criminal case is a decision that is exclusively within the client’s province to make, and thus all offers for a plea must be communicated. c. Jury Trial: Although most procedural aspects of litigation are the lawyer’s decision, waiving the right to a jury trial or other fundamental rights is a matter to be decided by the client. d. Client Testimony: The decision whether the client will or will not testify in a criminal trial is a matter to be decided by the client. iv) Attorney’s Decisions: The procedural aspects of litigation are the attorney’s to decide. For example, lawyers make decision regarding the manner and scope of cross-examination of a particular witness, the calling of a particular witness, the strategy of choosing a legal theory, etc. v) Lawyer Independence from Client’s Views: A lawyer’s representation does not implicate a sharing of responsibility for the clients cause or views regarding matters relevant to the representation. Lawyers operate under a principle that they are independent of their clients’ politics or moral views (MR 1.2(b)). vi) Counseling Crimes or Frauds: Lawyers are prohibited from counseling or assisting their clients in the commission of crimes or frauds (MR 1.2(b)). vii) Disability of Client: When a lawyer represents a client whose capacity to make decisions regarding the representation is diminished, the lawyer must attempt to maintain an ordinary lawyer-client relationship to the extent possible (MR 1.14(a)), and should seek to have a guardian appointed to represent the interests of the client when the lawyer reasonably believes that the client cannot act in own interest (MR 1.14(b)). D. Legal Malpractice Claims: In a legal malpractice case, the plaintiff must demonstrate… (1) the existence of an attorney client relationship giving rise to a duty; (2) the attorney, either by an act or failure to act, violated or breached that duty; (3) the attorney’s breach of duty proximately caused injury to the client; and (4) the client sustained actual injury, loss, or damages. 1. Attorney-Client Relationship: To have a malpractice claim, there must first have been an attorney-client relationship. Courts find duties to prospective clients where they reasonably rely on a lawyer’s advice. Most court impose duties of care not only to clients, but also to some prospective clients, to nonclients who are intended third-party beneficiaries of clients, and also to nonclients who are invited to rely on or benefit from the lawyer’s work. A client and lawyer can limit the scope of the representation to certain matters. 2. Duty: Once both the attorney-client relationship and the scope of the representation are established, courts impose a duty to follow a professional standard of care – i.e. reasonable knowledge, skill, and diligence of a similarly situated professional. Because jurors usually lack familiarity with what a particular professional should do, the duty requirement requires expert testimony to establish these professional standards of care. 3. Breach of Duty: An attorney breaches the duty of care owed to the client when the attorney fails to use ―such skill, prudence and diligence as lawyers or ordinary skill and capacity possess and exercise in the performance of the task which is undertaken. i) Expert Testimony Required Unless Breach is Common Knowledge Exception: Expert testimony is generally required to establish that an attorney’s conduct is negligent, except when the negligence is so obvious that a layperson can recognize it. These ―common knowledge exceptions‖ include… a. Ignoring Basic Fiduciary Duties: By failing to obey client instructions, or failing to keep a client informed, or by breaching confidentiality. b. Missing Deadlines: Missing a statute of limitations, for example, is an obvious breach of duty. c. Failing to Perform Basic Functions: Including researching applicable law and investigating relevant facts of the case. ii) Causation and Damages: Courts require plaintiffs to prove both actual and proximate causation of actual damages. However, the ―but-for‖ standard of actual causation and the foreseeable risk rule in proximate causation can present formidable obstacles for plaintiffs and often require a ―case within a case‖ to prove that the legal errors caused actual damages – i.e. that the original action would have been successful. dePape v. Trinity Health Systems (N.D. Iowa 2003): A consulting firm recruited P, a doctor, to fill a vacancy with the medical practice in Iowa. Medical practice hired a law firm (D) to assist doctor in obtaining a visa for lawful entry and permission to work in the U.S. To do this, however, D concocted a fictitious job title and description. When P attempted to cross the border into the U.S. he was denied entry. D then counseled P to lie to INS officials in order to gain entry. After being caught, though, P was turned back again. P then sued for legal malpractice and negligent infliction of emotional distress. Held: D was extraordinarily negligent in failing to inform and communicate with P concerning his immigration and in counseling him to perpetrate a fraud on the INS in order to gain entry into the U.S. Accordingly, P was entitled to recover damages from the D law firm for his lost income and emotional distress. E. Misrepresentation: The Model Rules include four provisions that incorporate nearly all of the general civil and criminal law of fraud and misrepresentation into professional obligations. 1. Four Model Rules Prohibiting Misrepresentation i) Statements to Tribunals – MR 3.3: Prohibits lawyers from making false statements in court, depositions, as well as in written submissions, and applies whether the lawyer acts as a party or a representative of the party. ii) Statements to Third Parties – MR 4.1(a): Applies to statements lawyers make to third parties in the course of representing clients outside of court. It prohibits intentional misstatements made by lawyers in documents (see Graycas), as well as oral statements made in the course of negotiating or closing a transaction or settlement. iii) Fraud, Deceit, and Dishonest Behavior – MR 8.4(c): Prohibits all fraud, deceit, dishonesty, and misrepresentation, whether before a tribunal or in other statements, and whether in representing clients or apart from law practice all together. iv) Action of Crime of Fraud – MR 1.2(d): Requires that lawyers assess their client’s conduct as well as their own, by prohibiting lawyers from counseling or assisting a client to engage in conduct the lawyer knows to be criminal or fraudulent. 2. No General Duty to Third Parties: Generally, lawyers do not owe a duty to third parties that would support a negligence action. When a lawyer error on behalf of a client harms a third person, that third person’s action against the lawyer will fail because the lawyer generally owes neither a contract nor a tort duty to exercise care on behalf of the third person. In particular, lawyer conduct that harms an opposing party will not support a claim against the lawyer on behalf the opposing party. Lawyers do no owe a duty of care to their adversaries. i) Exception – Intended Beneficiaries: When a lawyer’s work for a client is intended to benefit a third person, the lawyer owes a duty of care to that third person. ii) Exception – Invited Reliance: When a lawyer’s work for a client specifically invites the reliance of a third person, the lawyer owes a duty of care to that third person. Greycas v. Proud (1988): (For a nonclient to succeed in a negligence action against an attorney, he must prove that the primary purpose and intent of the attorney-client relationship itself was to benefit or influence the third party): Greycas, a large company, loaned Crawford, a private farmer, money based on a letter that there were no prior liens on machinery to secure the loan. The letter was prepared by his brother-in-law and attorney, Proud, who had never conducted a title search on the property. Crawford committed suicide and there were liens on the property. Greycas sued Proud. Held: For a client to succeed in a negligence action against an attorney, he must prove that the primary purpose and intent of the attorney-client relationship was to benefit or influence the third party. Here, because Proud induced reliance on the letter he prepared, he is liable for any misrepresentations, careless or deliberate. F. Ineffective Assistance of Counsel: A client claiming ineffective assistance of counsel must prove both that (1) the lawyer’s representation ―fell below an OBJECTIVE STANDARD OF REASONABLENESS‖ and (2) that counsel’s deficient performance PREJUDICED the defendant. 1. Test for Deficiency – The measure of attorney performance is reasonableness under prevailing professional norms. Although prevailing norms of practice as reflected in the ABA standards are guides, no particular set of detailed rules are appropriate to this decision. Rather, a court should be highly deferential and indulge a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance. i) Tactical Decisions – Even if an attorney makes tactical decisions which most other attorneys would not make, if the underlying investigation and work was done (i.e. there was a reason for the strategy), the Court will not deem the performance to be unreasonable. ii) Limitation: Failure to Investigate Alternative Theories/Strategies – Where a lawyer fails to investigate alternative theories, his tactical choices are invalid because they are not reasonably based on an overview of all the lawyer’s choices. 2. No Right to Perjured Testimony – The Sixth Amendment entitles the defendant to have a lawyer who will represent him loyally and vigorously. But that amendment does not entitle the defendant to a lawyer who will knowingly present perjured testimony. (See Nix v. Whiteside) 3. Duty to Consult with Client about a Possible Appeal: An attorney has a constitutionally-imposed duty to consult with a defendant about an appeal when there is reason to think either that … (1) A RATIONAL DEFENDANT would want to appeal – for example, because there were nonfrivolous grounds for such an appeal. OR (2) The particular defendant has REASONABLY DEMONSTRATED to the lawyer that he is interested in appealing. HOWEVER, to sustain an ineffective assistance of counsel claim, the defendant must prove ―prejudice‖ – in that he must demonstrate that there is a reasonable probability that, but for counsel’s deficient failure to consult with him about an appeal, he would have timely appealed. This can be proven by showing the points above – i.e. nonfrivolous grounds or assertion of a desire to appeal by a particular plaintiff. a. Good Lawyering Point: Any time a lawyer gets any offer, regardless how unreasonable the offer appears to be, there is a duty of communication of the lawyer to communicate the offer to the client. b. MR 1.2: ―…A lawyer shall abide by a client's decision whether to SETTLE a matter. In a criminal case, the lawyer shall abide by the client's decision, after consultation with the lawyer, as to a PLEA to be entered, whether to waive jury trial and whether the client will testify…‖ Roe v. Flores-Ortega (2000) (articulates ineffective assistance standard in appeals context): The defendant was charged with murder, assault, and use of a deadly weapon. He pled nolo contendre and was sentenced to 15 years to life. The judge informed him at the sentencing that he had 60 days to file an appeal. Although the defendant’s attorney wrote ―bring the appeal paper‖ on her file, no notice was filed within 60 days. Defendant claims that the lawyer had promised him that she would file the appeal, and the failure to do so was ineffective assistance of counsel. Held: No ineffective assistance. The court articulated the standard (above), and rejected a ―bright line‖ rule for consulting with a client about an appeal. Because this standard was not applied, the case is remanded for further factual determinations. 4. Malpractice Suit Likely As Well: If a defendant claims ineffective assistance of counsel, there will probably be a malpractice suit as well. However, per Restatement of Lawyers, to sustain a malpractice claim the defendant must satisfy a higher ―causation/damages burden‖ and prove his/her own innocence. IV. CONFIDENTIALITY – CHAPTER 5 A. The Duty of Confidentiality: Confidentiality is among the core duties that lawyers owe clients. 1. Model Rules i) General Rule of Confidentiality – MR 1.6(a): A lawyer shall not reveal information RELATING TO THE REPRESENTATION of a client unless … (1) the client gives INFORMED CONSENT, (2) the disclosure is IMPLIEDLY AUTHORIZED in order to carry out the representation, OR (3) the disclosure is permitted by [the EXCEPTIONS provided in] paragraph (b). ii) May Not Use Confidential Information to Disadvantage a Client – MR 1.8(b): A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules. In re Anonymous (1995) (lawyer may not use info gained from documents provided by client to later harm that client): Lawyer was contacted by a mother about representing her in seeking child support money due to her from the father of her child. The mother provided documents to the lawyer, including information regarding the father. In reviewing the documents, the lawyer discovered that a judgment had been entered against the mother and father for debt owed to a hospital. The attorney was under contract with the local county welfare department, thus he notified the mother that he couldn’t represent her, and he later filed suit to collect the judgment. Held: The lawyer’s use of information gained during consultations with the mother represents misuse of information entrusted to him in his capacity as a lawyer. 2. Confidential Information Defined: Under the Model Rules, confidential information includes anything that is ―related to the representation of a client.‖ This includes both ―confidences‖ – i.e. statements that would be covered by the attorney-client privileges – as well as ―secrets‖ – i.e. things that would not be privileged but would be embarrassing or detrimental to the client if revealed or that the client had expressed required to be held in confidence. 3. Duty of Confidentiality Broader than Evidentiary Privilege: The duty of confidentiality applies to ALL information relating to a representation, not merely communications from client to lawyer. Thus, lawyer observations, communications from third parties about the representation, and lawyer thoughts or strategies about the representation are all protected by the duty of confidentiality, regardless whether they are also covered protected by the attorney-client privilege. 4. Limitation – Generally Known Exception: If a piece of information is ―generally known‖ to the public, it is not covered under the duty of confidentiality. This is a very high standard, though, e.g. public in newspaper. B. To Whom is the Duty Owed: The duty of confidentiality is owed to current, former, and prospective clients. 1. Former Clients: Formers clients are owed the duty because the duty would be worth very little and would encourage communication little if its time ran out when the representation ceased. Lawyers take the duty of confidentiality and the clients’ protected information to the grave (See MR 1.9) 2. Prospective Clients: Prospective clients are owned a measure of confidentiality. As soon as the lawyer and prospective client begin talking with each other in this capacity, the duty of confidentiality attaches to the protected information that the prospective client conveys. It is not necessary for a fee to be charged for the duty of confidentiality and the evidentiary privilege (i.e. attorney client) to be effective. i) General Duties to Prospective Client – MR 1.18(b): Even when no client-lawyer relationship ensues, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation . . . [except as provided by rules for former clients, MR 1.9]. ii) Cannot Represent Adverse Client of Prospective Client – MR 1.18(c): A lawyer…shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received [confidential] information from the prospective client. iii) Representation Allowed When – MR 1.18(d): [R]epresentation is permissible if: (1) both the affected client and prospective client have given informed consent, confirmed in writing, OR (2) lawyer who received information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; AND (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (ii) written notice is promptly given to the prospective client. Perez v. Kirk & Carrigan (1991) (An agreement to form an attorney client relationship may be implied from the conduct of the parties, and does not depend on fee arrangements): Perez, a truck driver, could not stop his truck when it collided with a school bus. K&C, lawyers for Coca Cola, stopped by to see him at the hospital. He claimed that they told him that they were his lawyers. With that understanding, he gave them info about the accident. K&C then made arrangements with Connors, a criminal defense attorney, to represent Perez. Without informing Perez or his attorney, K&C turned his statement over to the DA. Perez was indicted for involuntary manslaughter. Perez asserted that K&C breached their fiduciary duty of good faith and fair dealing. Held: An agreement to form an attorney client relationship may be implied from the conduct of the parties, and does not depend on fee arrangements. K&C told Perez that they were his lawyers. This was sufficient to imply creation of attorney-client relationship, which encouraged Perez to trust them. This gave rise to a corresponding duty on the part of the attorneys not to violate this position of trust. 3. Organizations as Clients: When one of the constituents of an organizational client communicates with the organization's lawyer in that person's organizational capacity, the communication is protected by Rule 1.6. i) Information of Organization Related to Employees : This does not mean, however, that constituents of an organizational client are the clients of the lawyer. The lawyer may not disclose to such constituents information relating to the representation except for disclosures explicitly or impliedly authorized by the organizational client in order to carry out the representation or as otherwise permitted by Rule 1.6. C. Attorney-Client Privilege: In general, the evidentiary attorney-client privilege is created when a client or prospective client communicates in confidence to a lawyer or a person the client reasonably believes to be a lawyer who is being consulted as a lawyer. 1. Consulting with a Lawyer, Seeking Legal Advice: For the attorney-client privilege to apply – and thereby allowing an attorney to decline a subpoena to testify against a client – a client must have consulted the lawyer as an attorney AND have been seeking legal advice about a specific matter. A lawyer acting as an agent, depository, or a trustee is not sufficient to create the privilege. Hughes v. Meade (1970): There is no privilege as to communications with reference to a matter in which the attorney acts, not in his professional capacity, but merely as an agent or attorney in fact, or in which the attorney acts merely as a depository or as a trustee, particularly where he has instructions to deliver the instrument deposited to a third person – i.e. if the act in question fairly cannot be said to fall within the scope of professional employment, the privilege cannot be involved. Here, the attorney in Hughes testified that he had been contacted only to deliver stolen property to the police. His contact reached out to him, not because he was a lawyer, but instead because he was a good friend of many members of the police force. Dean v. Dean (1992): The mere fact that an attorney acts as a conduit for the return of stolen property does not support the conclusion that the attorney has engaged in unprotected consultation with the person seeking advice. Distinguished from Hughes because here the client came to the attorney for legal advice about what to do about the stolen property. ―I got all the responses back which indicate to me this person knew I was a lawyer, was asking for legal advice and did not want their identity revealed.‖ 2. Attorney-Client Privilege Survives Death of Client: It has been generally – if not universally – accepted that the attorney-client privilege survives the death of a client. Knowing that communications will remain confidential even after death encourages the client to communicate fully and frankly with counsel, as clients may be concerned about reputation, civil liability, or possible harm to friends and family. i) Possible Exception – Extreme Injustice: Some commentators have criticized that this rule should be abrogated after the client’s death where extreme injustice would result, so long as the disclosure would not seriously undermine the privilege by deterring client communication (e.g. preventing the death of an innocent prisoner could possibly satisfy this standard). This is only dissent by Supreme Court, though. Swindler & Berlin v. United States (1998): An attorney made notes of an initial interview with a client shortly before the client’s suicide death. A federal grand jury issued subpoenas for the handwritten notes in connection with the initial interview. The government argued that the privilege did not apply where the client was dead and the information related to a criminal proceeding. Held: The attorney client privilege survives the death of a client. In dissent, O’Connor argued that a criminal defendant’s right to exculpatory evidence or a compelling law enforcement need for information may, where the testimony is not otherwise available, override a client’s posthumous interest in confidentiality. 3. Organizations and the Attorney-Client Privilege: Communications from agents of an organizational client are within the evidentiary attorney-client privilege if two conditions are met: (1) the information in question is treated as confidential within the organization; and (2) it is communicated to the lawyer so that the lawyer can give advice or counsel to the organization. Upjohn Co. v. United States (1981): Accountants reported to Upjohn’s in-house lawyer that the company’s foreign subsidiary had paid bribes to foreign government officials. The lawyer then conducted an internal investigation of the payments, using personal interviews and questionnaires labeled ―confidential.‖ After Upjohn filed a report with the SEC, the IRS began its own examination of the matter, requesting all files relative to the internal investigation. Upjohn refused to produce under attorney-client privilege. Held: Communications fall within the evidentiary privilege when they are made to a lawyer at the direction of corporate superiors by any of the company’s employees who are aware of the purpose of the communications is to secure legal advice for the company, concerning matters within the scope of the employee’s duties, and internally described as ―confidential.‖ Further, any of the lawyer’s notes and memoranda based on oral communications also receives protection from disclosure as well. i) Lawyer Needs to Explain Who He Represents: A lawyer conducting an investigation must first explain that he represents the company, not the employee, and thus any information derived from the meeting may be turned over to the company, and subsequently to a government agency (MR 1.13(f)). ii) Limitations: Routine reports and/or facts underlying reports are not covered by the evidentiary privilege. iii) Cooperation with Government and Thompson Memorandum: Under the ―Thompson Memorandum,‖ the DOJ and SEC entrust prosecutors with virtually unfettered discretion about how to criminally charge a company if does (or does not) cooperate with the investigation. Two of the guidelines provided in the memorandum for defining ―cooperation‖ include (1) a waiver of the attorney client privilege and (2) a refusal by the company to pay for its executives’ legal defense. These two provisions have been heavily criticized by attorneys as being a way for the government to strong-arm a waiver of evidentiary privilege. iv) Privilege for Work Product: The ―work product‖ of an attorney is also protected so long as the work was prepared ―in anticipation of litigation.‖ 4. Limitation – Applies to Communications, Not to Underlying Facts: The attorney-client privilege applies to communications between a client or prospective client and a lawyer. Accordingly, it does not protect the underlying facts of the communication, and in normal discovery, clients must answer proper questions truthfully, even if the answers to the question will reveal what the client had communicated to the lawyer. 5. Exception – Not Created When Circumstances Don’t Indicate a Desire: The privilege is not created when a communication is made in circumstances that do not indicate a desire for confidentiality by the client. For example, a client must take reasonable care to make sure the communication is not overheard. Also, when there are multiple clients being jointly represented, the privilege does not apply. i) Inadvertently Receiving Privileged Information: The ABA Ethics Committee has stated in an opinion that when a lawyer inadvertently receives privileged information, he …(1) should not examine the materials once inadvertence is discovered; (2) should notify the sending lawyer of their receipt and (3) should abide by the sending lawyer’s instruction as to their disposition. a. Must Notify Other Party – MR 4.4(b): A lawyer who receives a document relating to the representation of the lawyer's client and knows or reasonably should know that the document was inadvertently sent shall promptly notify the sender [so they can take protective measures]. i. Additional Steps Not Required – MR 4.4 Comment : Whether the lawyer is required to take additional steps, such as returning the original document, is a matter of law beyond the scope of these Rules, as is the question of whether the privileged status of a document has been waived. ii. Wrongfully Obtained Documents: Similarly, [MR 4.4(b)] does not address the legal duties of a lawyer who receives a document that the lawyer knows or reasonably should know may have been wrongfully obtained by the sending person. iii. Decision to Voluntarily Return Documents is Not the Client’s – Comment : Some lawyers may choose to return a document unread … Where a lawyer is not required by applicable law to do so, the decision to voluntarily return such a document is a matter of professional judgment ordinarily reserved to the lawyer. See Rules 1.2 and 1.4. D. Exceptions to Confidentiality: In addition to the exceptions provide in MR 1.6(a), the Model Rules also provide a number of exceptions for the duty of confidentiality in MR 1.6(b). 1. Exceptions to Confidentiality – MR 1.6(b): A lawyer MAY [NOT MUST] reveal information relating to the representation of a client TO THE EXTENT the lawyer REASONABLY BELIEVES NECESSARY… (1) to prevent reasonably certain DEATH OR SUBSTANTIAL BODILY HARM; (2) to prevent a client from committing a CRIME or FRAUD that is reasonably certain to result in substantial injury to the FINANCIAL INTERESTS or property of another and in furtherance of which the client has used or is using the LAWYER'S SERVICES; (3) to PREVENT, MITIGATE OR RECTIFY SUBSTANTIAL INJURY to the FINANCIAL INTERESTS or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the LAWYER'S SERVICES; (4) to SECURE LEGAL ADVICE about the lawyer's compliance with these Rules; (5) to establish a CLAIM OR DEFENSE ON BEHALF OF THE LAWYER in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client; OR (6) to comply with other LAW OR A COURT ORDER. 2. Expressed Authority: The client is holder of the evidentiary privilege and the person whose communication is being protected. A client may give informed consent to disclosure of information that would otherwise be protected by the duty of confidentiality under MR 1.6(a). i) Informed Consent – MR 1.0(e): Informed consent denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct. 3. Implied Authority: In order to carry out the purposes of the representation, some information that would be subject to the duty of confidentiality must – and may be – disclosed under MR 1.6(a). i) General Rule – Rule 1.6 Comment  – Except to the extent that the client's instructions or special circumstances limit that authority, a lawyer is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation. E.g. In some situations, for example, a lawyer may be impliedly authorized to admit a fact that cannot properly be disputed or to make a disclosure that facilitates a satisfactory conclusion to a matter. Lawyers in a firm may, in the course of the firm's practice, disclose to each other information relating to a client of the firm, unless the client has instructed that particular information be confined to specified lawyers. ii) Special Circumstances: Special circumstances that justify implicit authorization are judged from the perspective of a reasonable person in the client’s position. In re Pressly (1993): The client’s objective was to get custody of her kids and only supervised visitation by father. The client mentioned to the lawyer that she suspected sexual abuse by father but told the lawyer to not disclose this information. The lawyer testified that he knew the information was to be held in confidence, but felt when he was later pressured by opposing counsel as to why his client wanted supervised visitation, informing opposing counsel was the best course of action. Held: No express or implied waiver of confidentiality here. The disclosure was neither intended nor necessary to protect the child. The client instructed specifically that the information was not to be disclosed. iii) Limitation – No Implied Authority to Disclose to Successor Counsel: There is no exception of confidentiality for successor counsel. Accordingly, if a lawyer is fired or withdraws, then that lawyer cannot divulge any/all confidential information of the client to the counsel that takes over 4. Physical Harm: A lawyer ―may‖ – not must – reveal confidential information of a client if it is justified as to promote the greater good of preserving human life and preventing substantial bodily injury. MR 1.6(b)(1). i) May versus Must Jurisdictions: Although the ABA Model Rules state that an attorney ―may‖ disclose information to prevent death/bodily harm, there is no obligation to do so. Depending on the jurisdiction, however, this rule may change – e.g. ―firm intention,‖ using the ―crime fraud‖ standard, etc. Hawkins v. King County (Wash. App. 1979) (firm intention to inflict harm creates obligation to disclose otherwise confidential information): An attorney failed to inform authorities that his client was mentally unstable before his client was released on a personal surety bond. Several days after the release, the client assaulted his mother and attempted suicide. Held: The obligation to warn, when confidentiality would be compromised to the client’s detriment, must be permissive at most, unless it appears beyond a reasonable doubt that the client has formed a firm intention to inflict serious personal injuries on an unknowing third person. The attorney received no information that the client planned to assault anyone, only that he was mentally ill and likely to be dangerous to himself and others. This was insufficient to create a duty to warn here. Purcell v. District Attorney for Suffolk District (Mass. 1997) (crime fraud exception determines whether warning the police is a violation of client confidentiality): A lawyer informed police that his client might engage in conduct harmful to others. Police then searched his apartment and arrested him for attempted arson. Held: An attorney is authorized to reveal to police the intention of a client to commit a crime and the information necessary to prevent the crime under the crime-fraud exception. The exception only applies if the client or prospective client seeks advice or assistance in furtherance of the criminal conduct. Thus, the case is remanded for factual determination of whether there is evidence to show that the client discussed a future crime with the attorney and thereafter the client actively prepared to commit that crime. Spaulding v. Zimmerman (Minn. 1962) (court may impose a duty to warn by vacating a settlement, even when that obligation is not present in the professional code): A boy was injured in an accident with his father. Before a settlement was reached in the resulting legal case, the boy was examined by doctors for the defendants whereby it was concluded that he had an aneurism. The information was made available to the counsel for the defendant, but the attorney concealed the knowledge from the plaintiff’s counsel and a settlement agreement was signed. Held: The court found no duty to disclose a serious medical condition in the professional code, but nevertheless imposed in the context of a Rule 60 (civil procedure) motion to vacate a settlement. Under this rule, a court may vacate a settlement where it is shown that one of the parties had knowledge that was not available to other party or the court. ii) Restatement of Law Governing Lawyers on Client Threats: A lawyer may, but is not required to, disclose threats of serious bodily harm or death when the lawyer reasonably believes it necessary. Also, when feasible, a lawyer should take efforts to dissuade a client not to take such action. However, a lawyer is not, solely by reason of such action or inaction, subject to professional disciple or liable for damages to the lawyer’s client or any third person. 5. Seeking Advice: A lawyer's confidentiality obligations do not preclude a lawyer from securing confidential legal advice about the lawyer's personal responsibility to comply [professional rules of conduct]. In most situations, disclosing information to secure advice will be impliedly authorized for the lawyer to carry out the representation. Even when the disclosure is not impliedly authorized, MR 1.6(b)(4) permits such disclosure because of the importance of a lawyer's compliance with the Rules of Professional Conduct. [Comment 9]. i) Limited Adoption of Rule: MR 1.6(b)(4) has been adopted in only 20 jurisdictions. In places that have not adopted it, the attorney must (1) try to figure out a way of not divulging confidential information when seeking advice or (2) argue there was an implicit authorization by the client to seek advice. 6. Self-Defense: A lawyer is permitted to reveal – and use for his own benefit – information that would be protected by the duty of confidentiality in three self-defense situations under MR 1.6(b)(5). i) Lawsuit between Lawyer and Client: ―To establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client.‖ This exception usually is implicated in fee disputes between a lawyer and client, but could also come to play in malpractice suits. ii) Defense Against Client Conduct: ―To establish a defense to a criminal charge or a civil claim against the lawyer based upon conduct in which the client was involved.‖ This exception is used to defend against joint-activity charges or when a client alleges that the lawyer was the wrongdoer, regardless of whether actual charges are filed [MR 1.6(b) Comment 8]. iii) Other Proceedings: ―To respond to allegations in any proceeding concerning the lawyer’s representation of the client.‖ This typically includes bar disciplinary proceedings, government agency investigatory proceedings, or criminal collateral review claims of ineffective assistance of counsel. Meyerhofer v. Empire Fire & Marine Ins. Co. (1974) (lawyer may disclose confidential information to defend himself against accusations of wrongful conduct): After sustaining substantial losses on stock purchased in an IPO, plaintiffs brought an action against the company, the firm, and the firm’s partners for willful violations of the security laws. Plaintiffs claimed that corporation’s SEC registration statement/prospectus had provided materially false and misleading information and they alleged that defendants had not disclosed payments due and compensation arrangement made with the firm in connection with the offering. Asserting that corporation and firm had concealed the fee arrangement from him, a partner in the law firm met with lawyers representing the plaintiffs and convinced them to drop the claims against him. The remaining defendants then moved to disqualify the plaintiff’s lawyers alleging that the partner had revealed confidential information obtained from the corporation while discussing the case. Held: A lawyer may reveal confidences or secrets necessary to defend himself against accusations of wrongful conduct. The partner here had the right to make appropriate disclosures with respect to his role in the IPO and the right to support his version of the facts with evidence. Further, the partner’s duty of confidentiality applied only to information gained form the corporation, not information regarding events at the firm. Because partner’s conduct did not violate his professional responsibilities, his contact with the plaintiff’s lawyers did not disqualify them. 7. Crime or Fraud Using the Lawyer’s Services: In certain circumstances, a lawyer may reveal confidential information to prevent future crimes, frauds, or harms caused by a client. According to MR 1.6(b)(2-3), a lawyer may – not must – disclose confidential information to the extent the lawyer believes is necessary to (1) prevent a future client crime or fraud in which the lawyer’s services have been used; or (2) to rectify the consequences of a past or ongoing crime or fraud in which the lawyer’s services have been used. i) Crime Fraud Exception to Attorney-Client Privilege: The test for invoking the crime-fraud exception to the attorney-client privilege is whether there is a reasonable cause to believe that the attorney’s services were used in furtherance of the ongoing unlawful scheme a. Lawyer’s Knowledge of Illegality is Irrelevant: A lawyer’s innocence – or knowledge – of an illegal scheme is irrelevant. The privilege is the client’s, not the lawyer’s, and thus an attorney need know nothing about the client’s ongoing or planned illicit activities for the crime fraud exception to apply to their confidential conversations (e.g. if other employee wanted to disclose). United States v. Chen (1997) (crime fraud exception as exception to attorney-client privilege): Chen and his wife falsified invoices to pay less in taxes and tariffs. To mitigate the potential penalties, they had their attorneys file disclosures with the Customs Department. However, the actual disclosures made were also falsities intended to shield their tax evasion scheme. An employee left the company and informed the government that the lawyer who filed the disclosers knew that the disclosure would be false and intended to hide a tax invasion scheme. Held: To invoke the crime fraud exception, the government has the burden of making a prima facie showing that the communications were in furtherance of an intended or present illegality and that there is some relationship between the communications and the illegality. Mere allegations or suspicions are insufficient, but proof beyond a reasonable doubt is not necessary either. The test for invoking the crime-fraud exception to the attorney-client privilege is whether there is a reasonable cause to believe that the attorney’s services were used in furtherance of the ongoing unlawful scheme. Reasonable cause is more than a suspicion but less that a preponderance of evidence. Here, it was reasonable to believe that the company was using the lawyer’s services to conceal the tax fraud. The affidavit, in addition to other evidence (like blank invoices) prove that the lawyers helped with the illegal scheme. In re American Continental Corporation/Lincoln Savings & Loan Services Litigation (1992): Purchasers of debentures in Resolution Trust Corporation brought action against owner of savings and loan association, accountants, attorneys, and others to recover for fraud, RICO violations, and state law violations. Jones Day provided opinion letter stating that the indenture was valid. There was evidence that Jones Day knew Lincoln backdated files and destroyed appraisals. The court found evidence that despite their knowledge of violations, JD continued to represent ACC. The issue here is whether there was a violation of securities law or duty of confidence to the client. Held: Where a firm believes the management of a corporate client is committing serious regulatory violations, the firm has an obligation to actively discuss the violative conduct, urge cessation of the activity, and withdraw from representation where the firm’s legal services may contribute to the continuation of such conduct. ii) Duty to Decline or Terminate Representation: If a lawyer reasonably believes that his services will be used to commit a crime or fraud – i.e. future crimes or frauds – he ―shall not represent‖ that client. If the client is using or has used the lawyer’s services to commit a crime or fraud – i.e. ongoing or past crimes or frauds – he may withdraw, but is not required to do so. a. Future Crime or Fraud Must Withdraw – MR 1.16(a)(1): [A] lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if . . . the representation will result in violation of the rules of professional conduct or other law. b. Ongoing or Past Crime or Fraud May Withdraw – MR 1.16(b)(2-3): [A] lawyer may withdraw from representing a client if… the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is criminal or fraudulent OR the client has used the lawyer's services to perpetrate a crime or fraud. iii) Duties for Lawyers in Organizations: If a lawyer for an organization knows that an officer, employee, or other person associated with the organization is engaged in action that is a violation of law and is likely to result in substantial injury to the organization, the lawyer should proceed as is ―reasonably necessary in the best interest of the organization.‖ MR 1.13(b). This includes disclosing confidential information. a. First, Must Refer Up the Ladder – MR 1.13(b): Unless lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer SHALL refer the matter to higher authority in the organization, including, if warranted by the circumstances to the highest authority that can act on behalf of the organization as determined by applicable law. b. Then, May Disclose Information – MR 1.13(c): If the highest authority in the organization insists upon or fails to address in a timely and appropriate manner an action that is clearly a violation of the law AND the lawyer reasonably believes that violation is reasonably certain to result in substantial injury to the organization, THEN the lawyer MAY reveal information relating to the representation but only to the extend the lawyer believes is necessary to prevent substantial financial injury. c. Exception – Investigations or Defense – MR 1.13(d): A lawyer may not disclose information relating to lawyer’s representation of an organization to investigate an alleged violation of law or defend the organization or an officer, employee, or other consistent. iv) Other Crime/Fraud Rules: MR 1.2(d) prohibits lawyers from counseling or assisting in clients in conduct that the lawyer knows to be criminal or fraudulent. Model Rules 3.3 and 4.1(b) require lawyers to disclose information where necessary to avoid knowingly assisting a criminal or fraudulent act by a client on a tribunal or third person. 8. Physical Evidence: When an attorney receives real evidence from a third party relating to a possible crime committed by his or her client, the attorney is obligated to relinquish the evidence to law-enforcement authorities and must comply with a subpoena issued to that effect. In re Original Grand Jury Investigation (Ohio 2000) (real evidence must be turned over to a grand jury even if it is the fruit or instrumentality of a crime): Issue concerned whether an attorney can be compelled to disclose to a grand jury a letter written by a client and discovered by an investigator that contains evidence of a possible crime or whether the rules of professional conduct prohibit such disclosure. Held: The attorney must comply with the grand jury subpoena and relinquish the letter in question. Despite any confidentiality concerns, a criminal defense attorney must produce real evidence obtained from his or her client or from a third party source, regardless of whether the evidence is mere evidence of a client’s crime or is a fruit or instrumentality of the crime. In either even, the physical evidence must be turned over to the proper authorities. People v. Belge (NY 1976) (attorney need not disclose the location of an already-deceased victim): An attorney of a suspected murderer did his own investigation based on the information his client provided him with and with the assistance of a friend the location of the deceased victim was located. The attorney kept silent about the location of the body until the client had established a defense of insanity. At that time the location, and the fact that the attorney knew of the location, became public the attorney was indicted on charges of a public health law, which required anyone knowing of the death of a person without medical assistance to report it to the proper authorities. Held: The client had a Fifth Amendment right to not incriminate himself. His attorneys were bound to uphold that concept and maintain his confidential information. This constitutional right overpowers a trivial public health law and thus the conduct of the attorney was consistent with the proper conduct of an officer of the court. Charges dismissed. 9. Candor to a Court or Tribunal: Under MR 3.3(c), the duties imposed by MR 3.3(a-b) – candor toward a tribunal – apply even if compliance requires disclosure of information otherwise protected by Rule 1.6. i) Candor Toward The Tribunal – MR 3.3(a): A lawyer shall not knowingly: (1) Make a FALSE STATEMENT OF FACT OR LAW to a tribunal or FAIL TO CORRECT a false statement of material fact or law previously made to the tribunal by the lawyer; (2) Fail to disclose to tribunal LEGAL AUTHORITY IN THE CONTROLLING JURISDICTION known to the lawyer to be DIRECTLY ADVERSE to the position of the client and not disclosed by opposing counsel; or (3) OFFER EVIDENCE THAT THE LAWYER KNOWS TO BE FALSE. If a lawyer, the lawyer’s client, or a witness called by lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer MAY REFUSE to offer evidence, other than the testimony of a DEFENDANT IN A CRIMINAL MATTER, that the lawyer reasonably believes is false. (b) A lawyer who represents a client in an adjudicative proceeding and who knows that a person intends to engage, is engaging or has engaged in CRIMINAL or FRAUDULENT CONDUCT RELATED to the PROCEEDING shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. i) Duty to Disclose Crime or Fraud Related to the Proceedings: See MR 3.3(b) People v. Casey (Colo. 1997): A teenager (SR) used a driver’s license of her friend (SJ) when she was found drinking at a party. A summons was issued in the name of SJ to appear in court. SJ had no knowledge of summons and failed to appear. SR later appeared in court, posing as SJ, and her lawyer had full knowledge of this fraud. However, the lawyer talked to the assistant city attorney under the guise that he was representing SJ and got the matter dismissed. When the lawyer then told SJ that she had to petition to get the records sealed, SJ’s father called his lawyer who reported the events to the district attorney. Held: Lawyer had a duty to disclose to the court that his client was impersonating another person, as the state rules of professional responsibility provide for such a duty even if to do so requires disclosure of otherwise confidential information. Lawyer’s misconduct warranted a short suspension. ii) Duty to Disclose Material Fact: In a small minority of states – e.g. NJ – a more stringent standard than MR 3.3(b) is imposed on lawyers and mandates that an attorney shall not knowingly fail to disclose to the tribunal a material fact with knowledge that the tribunal may tend to be misled by such failure. In re Forest (NJ 1999): An attorney was in the midst of settling a case when his client died for reasons unrelated to the accident at issue in the case. The attorney advised the wife of the deceased client not to voluntarily reveal her husband’s death. It was only when the deceased client failed to appear for a court-ordered medical examination that the lawyer finally informed the opposing party of the death. The lawyer claimed that although he failed to disclose the death to the court, he was acting in the best interests of his client, and thus should be excused. Held: The lawyer had an affirmative duty to disclose the client’s death to the court and his adversary, and he violated his duty of candor toward the tribunal when he failed to inform the trial court that the opposing side’s motion for the deceased client to appear was moot. iii) Duty to Disclose Directly Adverse Authority in Controlling Jurisdiction: Under MR 3.3(a)(3), a lawyer must disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client AND not disclosed by opposing counsel. Matter of Hendrix (7th Cir. 1993) (failing to cite controlling authority could open door for Rule 11 sanctions): Hendrix filed for bankruptcy, and listed the Pages on his list of creditors. The bankruptcy court granted Hendrix a discharge from his debts to the listed creditors. The Pages then filed a motion to reopen the bankruptcy proceeding to modify the discharge so that they could ask the state court to reopen its suit for the purpose of proceeding against appellant's insurer. This was generally prohibited by federal case law, however. Held: The court found that lawyers for the Pages had filed a frivolous appeal by seeking review in the face of dispositive contrary authority without making arguments for overruling it. He essentially failed to discover a case on point and filed a suit failing to cite it. Although the cases are not identical, the appeal could not succeed unless that case was overruled. Failure to cite binding precedent is not only an ethical violation, but could subject an attorney to Rule 11 sanctions as well. iv) Offering Perjured Testimony: A lawyer is prohibited from offering evidence the lawyer knows to be false. In the case of perjury if a lawyer, the lawyer’s client, or a witness called by lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. MR 3.3(a)(3). a. If Client Intends to Commit Perjury: When the lawyer knows of the client’s intention to commit perjury, the lawyer must attempt to dissuade, attempt to withdraw, and finally, if the perjury occurs, take reasonable remedial measure. b. If Knowledge is Gained After Perjury: When lawyer learns that a client’s testimony was perjurious after the perjury occurred – but before the proceedings end – the lawyer must attempt to persuade the client to rectify the matter by revealing the fraud and then testifying truthfully. If that attempt fails, the lawyer must take reasonable remedial measures, including, if necessary, disclosure. c. No Duty After Proceedings Conclude: If the lawyer does not learn of the perjury until after the conclusion of the proceedings, then the lawyer has no obligation to reveal it. United States v. Shaffer Equipment Co. (4th Cir. 1993): In an action brought by the EPA, the attorneys for the government realized that the EPA’s on-scene coordinator for the cleanup has misrepresented his academic achievements and credentials in that and other cases. However, in summary judgment motions to the court the attorneys did not disclose the fraud. The defense attorney disclosed the evidence to the U.S. Attorney and the case was ultimately dismissed. Subsequent to dismissal, the federal government argued that the trial court had misapplied MR 3.3, which mandated disclosure of material facts that would otherwise assist a fraudulent act. Held: The appellate court found that the government's attorneys had not only breached Rule 3.3, they also breached a broader duty of candor and good faith imposed upon officers of the court. On-site coordinator's misrepresentations were considered "material" because he was responsible for making administrative record that was used to determine whether property owners were liable for cleanup costs. However, court held that trial court erred in dismissing case, because such sanction was too drastic. v) Offering Perjured Testimony of a Criminal Defendant: The Sixth Amendment right of counsel in criminal cases is not violated when a lawyer threatens to withdraw or reveal the perjury if the client persists in the likely presentation of perjured testimony. Nix v. Whiteside (1986): D was charged with murder. He told his attorney that he shot victim in self defense b/c he saw gun in victim's hand, but later admitted that he did not see gun, but would testify that he did to bolster defense. Counsel advised D that such testimony would amount to perjury, and he would advise court of D's plan and seek to withdraw, if he insisted on presenting perjured testimony. D followed counsel's advice, testified at trial that he did not see a gun, and was convicted of second-degree murder. He later claimed that this violated his Sixth Amendment right to counsel. Held: The right to assistance of counsel is not violated when an attorney refuses to assist in presenting perjured testimony. Whatever the scope of a constitutional right to testify, such a right does not extend to testifying falsely. There was no prejudice here to form an ineffective assistance of counsel claim. a. Alternative Strategy – Offering Client’s Perjured Narrative: Some states have accepted that a lawyer can call the client as a witness, ask him to tell his version of the events to the jury, and otherwise participate no further in the client’s testimony. Such an approach has the benefits of distancing the lawyer from active participation in the perjury, but it also has the shortcomings of signaling the judge that the lawyer believes the client is committing perjury and of failing to present the client to the jury in a favorable light. Commonwealth v. Mitchell (Mass. 2003) (lawyer must have a firm basis in fact to notify the court and allow a defendant to testify in a “narrative” fashion): D argued that he was denied constitutionally effective assistance of counsel, when his trial counsel, relying on 3.3(e), advised judge at trial that D would present false testimony, that counsel had attempted to persuade D from testifying falsely, that counsel had decided that he would not seek to withdraw from representing ∆ in ongoing trial, and that counsel needed instruction from judge on how to proceed. He argued that counsel did not have adequate basis for invoking the rule. In rejecting this argument, court found that trial court correctly applied the firm basis in fact standard, in determining whether attorney knew that his client was going to testify falsely. Held: When the question of perjured testimony by a defendant arises, a lawyer must, before notifying the court, act in good faith and have a firm basis in objective fact. Conjecture or speculation that the defendant intends to testify falsely are not enough, nor are inconsistencies in the evidence or in the defendant’s version of the events. Once this is met, an attorney may notify the court and allow the defendant to testify by means of an open narrative. vi) Fairness to Opposing Party and Counsel – MR 3.4: Similar duties are extended to opposing parties and their counsel. Specifically, a lawyer shall not: (a) Unlawfully OBSTRUCT another party's ACCESS TO EVIDENCE or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act; (b) FALSIFY EVIDENCE, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law; (c) Knowingly DISOBEY AN OBLIGATION under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists; (d) In pretrial procedure, make a FRIVOLOUS DISCOVERY REQUEST or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party; (e) In trial, ALLUDE to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, ASSERT PERSONAL KNOWLEDGE OF FACTS in issue except when testifying as a witness, or STATE A PERSONAL OPINION as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused; or (f) REQUEST A PERSON other than a client to REFRAIN from voluntarily giving relevant INFORMATION to another party unless: (1) the person is a relative or an employee or other agent of a client; and (2) the lawyer reasonably believes that the person's interests will not be adversely affected by refraining from giving such information. V. LOYALTY – CHAPTER 6 A. Conflicts of Interest Generally: MR 1.7 sets out the general standards for conflict of interest analysis. In examining potential conflicts of interest, follow a four-step process: (1) identify the client(s); (2) determine whether a conflict of interest exists; (3) decide whether the conflict is consentable; and (4) if it is, consult with affected clients and obtain informed consent. 1. General Rule for Current Clients – MR 1.7(a): [A] lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) The representation of one client will be DIRECTLY ADVERSE to another client; or (2) There is SIGNIFICANT RISK that the representation of one or more clients will be MATERIALLY LIMITED by the lawyer's responsibilities to another client, a former client or a third person. or by a personal interest of the lawyer. 2. Exceptions – MR 1.7(b): Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer MAY represent a client if [ALL four must be satisfied] . . . (1) The lawyer REASONABLY BELIEVES that the lawyer will be able to provide competent and diligent representation to each affected client; (2) The representation is NOT PROHIBITED BY LAW; (3) The representation does NOT involve the ASSERTION OF A CLAIM by ONE CLIENT AGAINST ANOTHER client represented by the lawyer in the same litigation or other proceeding before a tribunal; AND (4) Each affected client gives INFORMED CONSENT, confirmed in WRITING. 3. Other Relevant Conflict Rules: Include… i) Specific Rules for Current Clients a. Business Transactions with Clients – MR 1.8(a) b. Use of Client Information – MR 1.8(b) c. Client Gifts to Lawyers – MR 1.8(c) d. Literary Rights – MR 1.8(d) e. Financial Assistance to Client – MR 1.8 (e) f. Limitation of Liability to Client – MR 1.8 (h) g. Propriety Interest in Litigation – MR 1.8(i) h. Lawyer as Witness – MR 1.8(j) ii) Interests of Another Current Client a. General Rule – MR 1.7(a)(b) b. Specific Rules – MR 1.8(g), 1.13(g) iii) Interests of a Third Person a. General Rule – 1.7(b) b. Specific Rules – 1.8(f), 5.4(c), 1.13(a) iv) Interests of a Former Client – MR 1.9 v) Government Lawyers – MR 1.11, 1.12 vi) Imputed Conflicts a. General Rule – 1.10 b. Specific Rules – 1.8(k), 1.11, 1.12 B. Who is Your Client? – Affiliates of Organization Clients: Under Comment 34 of MR 1.7, a lawyer who represents a corporation or other organization does not, by virtue of that representation, necessarily represent any consistent or affiliated organization, such as parent or subsidiary. Accordingly, a lawyer may accept representation adverse to an affiliate in an unrelated matter. 1. Exceptions: The Comment also includes three exceptions, however… (1) The affiliate is also a client of the lawyer (2) There is an understanding between the lawyer and the organizational client that the lawyer will avoid representation adverse to the client’s affiliates (3) The lawyer’s obligations to either organization client or the new client are likely to limit materially the lawyer’s representation of the other client. 2. Potential Loss of Organizational Client: Anytime a lawyer takes on a representation adverse to a parent, subsidiary, etc. that had been previously represented, that lawyer is making a conscious decision that it is more profitable to sue that company than to retain its business in the future. Doesn’t this just encourage attorneys to only represent the most financially-lucrative clients? 3. Criticism of Rule: This puts the previously represented organizational client in a terrible situation because it forces them to fire their attorneys/law firm, which is a very time consuming and expensive process. Further, it could be argued that there is no difference between a parent and a wholly-owned subsidiary. Finally, the companies can require their counsel to ignore this comment. i) Alternative Solution – Conflict Waivers: Fox wants attorneys to rely on waivers of conflict, so an organizational client, fully informed of the facts and circumstances, can decide whether to waive. C. Remedies to Conflicts of Interest: 1. Waiver: The most common form of remedy to a conflict of interests is a waiver by any/all of the affected clients. According to MR 1.7(b)(4), a waiver has to include informed consent and be reduced to writing. i) “Informed Consent” – MR 1.0(e): Denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct. 2. Prospective Waivers: A conflict may be remedied in advance by a prospective waiver [MR 1.7 Comment 22]. i) Effectiveness Depends on Client’s Understanding of Risks: Effectiveness of a prospective waiver is generally determined by the extent to which the client reasonably understands the material risks that the waiver entails. The more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding. ii) Exact Conflict Should be Known: If a client agrees to consent to a particular type of conflict with which the client is already familiar, then the consent ordinarily will be effective with regard to that type of conflict. If the consent is general and open-ended, the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have understood the material risks involved. iii) Sophistication of Client is Relevant: Sophisticated clients may need less information from a lawyer regarding the implications of a conflict. If the client is an experienced user of legal services involved and is reasonably informed regarding the risk that a conflict may arise, such consent is more likely to be effective, particularly if, e.g., the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation. 3. Disqualification: A client can also petition a court to disqualify an attorney from further participation in a matter pending before the court. When granted, disqualification can ensure that the case will be presented without conflicting loyalties or that confidential information of a former client will not be used against that client in the current matter. However, unlike other remedies, disqualification imposes costs on other parties as clients can be deprived of their chosen lawyers without their consent. i) Mitigating Costs on New Clients: Courts are careful to scrutinize the facts and law offered in support of a disqualification motion. Further, they have increasingly used the doctrine of laches, estoppel, or waiver to deny such motions when they have not been made timely – i.e. only for tactical advantage. Finally, orders granting/denying disqualification are usually not appealable until the final judgment on the merits. 4. Injunctions: Activity is actionable if it constitutes a breach of a duty imposed by statute or by common law. Thus, under common law fiduciary duty as well as the rules of professional responsibility, a client can petition a court to enjoin a firm’s representation of a client that violated conflict of interest principles. Maritrans GP v. Pepper, Hamilton & Scheetz (Pa. 1992) (courts may enjoin law firms from breaches of conflict of interest rules): Attorneys from Pepper provided extensive representation for Maritrans in a range of labor relations issues as well as complex securities work (IPO). Pepper was paid over $1M for their work and became intimately familiar with Maritrans operations, financial and business information, etc. Pepper then began providing representation for several of Maritrans’ competitors. Maritrans sued for an injunction against the representation. Held: The PA Supreme Court stated that common law had long recognized that a lawyer could not undertake representation adverse to a former client in a matter substantially related to that in which the lawyer had previously served the client. Attorneys have always been held civilly liable for engaging in conduct violative of their fiduciary duties to clients. Accordingly, this conduct was actionable in PA and the injunction issued to bar the representation was proper. D. Personal Interests of Lawyers: 1. Business Transactions With Clients – MR 1.8(a) – A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless: (1) the transaction and terms on which the lawyer acquires the interest are FAIR AND REASONABLE to the client and are FULLY DISCLOSED and transmitted in WRITING in a manner that can be reasonably understood by the client; (2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the ADVICE OF INDEPENDENT LEGAL COUNSEL on the transaction; and (3) the client gives INFORMED CONSENT, in a WRITING signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction. Monco v. Janus (Ill. App. 1991): Lawyer entered into a ―kitchen table‖ agreement with inventor to become partners in pursuing inventor’s creation. Later, the inventor alleged that the transaction was tainted by undue influence. Held: The court analyzed the circumstances under the so-called McFail factors: (1) whether the attorney made a full and frank disclosure of all relevant information; (2) whether adequate consideration was given; and (3) whether the client had independent advice before completing the transaction. Under such a test, the court found that the lawyer failed to provide full and frank disclosure before the inventor assigned his rights to the company and that the inventor did not have independent counsel before executing the agreement. Furthermore, the attorney had no evidence to prove that he gave adequate consideration. Finally, because the agreement was inherently unfair, the court concluded that any defense of ratification was not available to the attorney. 2. Drafting Instruments that Benefit the Lawyer: Under MR 1.8(c), a lawyer is prohibited from drafting a document that makes a substantial gift to the lawyer or the lawyer’s close relatives. This restriction does not apply when the donor is related to the lawyer. 3. Literary Rights: Under MR 1.8(d), lawyers are prohibited from negotiating for literary or media rights based on their clients’ stories until the conclusion of a representation. A lawyer’s judgment may be compromised if the lawyer has an interest in the client’s matter being handled in a dramatic fashion. No waiver is permitted. 4. Advancing Funds to Clients: Under MR 1.8(e), a lawyer is prohibited from advancing financial assistance to clients when there is pending or contemplated litigation, except that a lawyer may advance court costs. Client waiver of the conflict is not permitted. 5. Agreements Limiting Lawyer’s Liability: Under MR 1.8(h), a lawyer is prohibited from entering into a contract with a client that prospectively limits the lawyer’s liability for malpractice, unless state law permits and the client is presented by an independent counsel with respect to the agreement. 6. Proprietary Interest in Litigation: Under MR 1.8(i), a lawyer is prohibited from acquiring an interest in litigation or its subject mater, whether that interest is consistent or inconsistent with the client’s interests. This prohibition is not a restriction on the lawyer’s contract with a client for a reasonable contingent fee. Client waiver of a violation of this rule is not permitted. 7. Sexual or Amorous Relations with Client: Under MR 1.8(j), a lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced. Some states, however, have forbidden sexual relationships that predated legal services as well. i) Potential Criminal Charges: In nearly two-dozen jurisdictions, professionals who intentionally establish sexual contact during a professional relationship are guilty of criminal conduct, e.g. ―sexual exploitation.‖ ii) Potential Civil Claims: Clients who have been victimized by sexual misconduct during a professional relationship may also sue for civil remedies under breach of fiduciary duty, malpractice, fraud, etc. In re Halverson (Wash. 2000): A partner had a sexual relationship with a client, failed to get written consent for the ―conflict,‖ and was found to have violated the Washington rules of professional responsibility. The board recommended that the lawyer be suspended for six months and on probation for two years. Held: The court decided that it was not objectively reasonable for the lawyer to believe that the representation would not be adversely affected by the sexual relationship, nor did he disclose the potential risks to the woman. Thus, he did not exercise independent professional judgment when he failed to (1) advise her of the potential ramifications the affair might have his ability to represent her, (2) advise her of his published professional opinion that attorneys should be discouraged from getting involved in a new sexual relationship; and (3) to take precautions to avoid pregnancy or discuss with her the consequences of such an event. However, the suspension – rather than disbarment – was appropriate because the client was not a vulnerable defenseless victim (no mental disability, alcohol addiction, she was not a minor), and the lawyer instructed her to tell the truth about the relationship if asked, and explained that the relationship with her was improper. E. Multiple Clients: 1. Aggregate Settlements: Under MR 1.8(g), in both civil and criminal matters, a lawyer is prohibited from engaging in aggregate settlements of multiple clients’ claims or charges unless all clients give informed consent in writing. Burrow v. Arce (Tex. 1999) (if a lawyer engaged in clear violation of duty to client, he may be required to forfeit compensation, irrespective of whether the breach caused the client actual damages): Attorneys represented clients in a wrongful death action against a chemical plant. After the case was settled, the clients filed suit against their attorneys alleging professional misconduct, including breach of fiduciary duties, and demanded forfeiture of fees appellants received. Trial court granted summary judgment for appellants because appellees had suffered no actual damages, as the settlement was fair. Held: A lawyer engaging in clear violation of duty to client may be required to forfeit his compensation. Relevant considerations may include: gravity and timing of violation, willfulness, its effect on the value of the lawyer’s work for the client, other harm, and adequacy of other remedies (Restatement (Third) Governing Lawyers §49). 2. Simultaneous Representation of Adversaries: Under MR 1.7(a), Lawyers may not represent clients on opposite sides of the same matter, especially when litigation is involved. Such a direct conflict cannot be effectively waived by the clients because the conflict is too substantial. Universal City Studios v. Reimerdes (S.D.N.Y. 2000) (motions to disqualify are subject to abuse if used for tactical reasons, and if a motion is used as such, it will be denied): Universal Studios moved to disqualify a defendant’s new counsel because the attorneys were currently representing Universal in another case. In the underlying action, Universal sought to enjoin the defendant from posting on internet web sites encryption defeating computer program. The court held a conference at which the attorney-in-question appeared for the first time on behalf of the defendant, but Universal raised no objection. However, Universal brought a motion to disqualify. Held: The Court examined the firm’s role in the other action and concluded that the lawyer’s breach of ethics could not be reasonably minimized, but denied the motion to disqualify because there was no real risk of prejudicing Universal, but a real risk of prejudicing defendant. A motion to disqualify is subject to abuse for tactical purposes, and there was substantial reason to believe that motion here was motivated at least partly by tactical considerations. 3. Joint Clients: Under MR 1.7, joint representation on civil claims brought simultaneously by multiple clients is permitted if the lawyer reasonably believes that there will be no material limitations caused by the joint representation and both parties give informed consent. However, when such representation is permissible, withdrawal from all representation may be the only adequate remedy if nonwaivable conflicts later develop. i) Serving as a Matrimonial Mediator in New York: An attorney, engaging in matrimonial mediation, may draft and file a separation agreement and divorce papers that incorporate terms agreed upon by the marital parties in the course of mediation. This is because a lawyer who serves as a mediator does not ―represent‖ either party for the purposes of conflicts of interest. However, a lawyer who serves as a mediator in a matrimonial dispute may not later represent one party against the other party if the dispute is not successfully resolved through mediation (New York State Bar Opinion). ii) Disinterested Lawyer Test: A lawyer may not represent both spouses unless lawyer concludes that the parties are firmly committed to the terms arrived at in the mediation, the terms are faithful to both spouses’ objectives, there are no remaining points of contention, and the lawyer can competently fashion the settlement agreement and the divorce documents. In cases where it is permissible for lawyer-mediator to draft and file divorce papers, the lawyer must disclose his or her role to the court. Wolpaw v. General Accident Insurance Co. (N.J. 1994) (insurance company must provide independent counsel to each insured codefendant in a matter): The plaintiff – the insured – brought action against the defendant, the insurer, for breach of a homeowners' policy. Plaintiff alleged that such a breach of policy occurred when the insurance company provided the same counsel for plaintiff as well as two other insured. Held: A liability insurer that insures codefendants whose interests conflict with one another must retain separate and independent counsel for each insured or permit each insured to do so at the insurer’s expense. Matter of Disciplinary Proceedings Against Wildermuth (Wis. 1987) (a lawyer has an absolute obligation not to represent joint clients if the exercise of the lawyer’s independent professional judgment on behalf of a client will be or is likely to be adversely affected by the lawyer’s representation of another client): An attorney represented both sides of a transaction for the sale of a tavern business. Before the representation, though, the attorney informed the parties of the potential conflict of interest inherent in the dual representation and indicated the desirability that they retain separate counsel. Both parties agreed, however, and after closing, issues arose with mortgage payments to the point that one side had to retain independent counsel. Held: A lawyer is prohibited from continuing multiple employment ―if the exercise of the lawyer’s independent professional judgment on behalf of a client will be or is likely to be adversely affected by the lawyer’s representation of another client.‖ The attorney here had an absolute obligation to insist that the buyers and the purchasers each retain separate counsel, as it was obvious that he could not adequately represent the interests of each. A v. B (N.J. 1999) (client may not use services of a law firm to commit a “fraud”): A law firm was representing husband and wife drafting wills. The wills provide – pursuant to tax laws – that each agrees to give all the money to the other. The same law firm is approached by a woman who claims husband is the father of her child. Unfortunately, husband’s last name was misspelled in the will information. Thus, the law firm conflict check comes back clean and the law firm agrees to represent the woman. Eventually, conflict comes out. The law firm then becomes obligated to tell husband’s wife about husband’s illegitimate child to protect her best interests. Held: Court construed the term ―fraudulent act‖ broadly and held the husband’s deliberate omission of existence of an illegitimate child constituted fraud on his wife. In effect, husband used law firm’s services to defraud his wife. When discussing their respective estates with firm, couple reasonably could expect that each would disclose material information, including existence of children who were residuary beneficiaries. Respondent breached that duty, and thus appellant was permitted to inform wife of existence of illegitimate child. 4. Positional Conflicts: According to MR 1.7Comment 24, a lawyer MAY take inconsistent legal positions in different tribunals at different times on behalf of different clients. The mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of a client represented by the lawyer in an unrelated matter does not create a conflict of interest. i) Exception – Creating a Material Limitation: A conflict of interest does exist, however, if there is a significant risk that a lawyer's action on behalf of one client will materially limit a lawyer's effectiveness in representing another client in a different case; for example, when a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client. a. Relevant Factors: Factors relevant in determining whether the clients need to be advised of the risk include: where the cases are pending, whether the issue is substantive or procedural, the temporal relationship between the matters, the significance of the issue to the immediate and long-term interests of the clients involved and the clients' reasonable expectations in retaining the lawyer. b. If Conflict, Lawyer Must Withdraw from One or Both Representations: If there is significant risk of material limitation, then absent informed consent of the affected clients, the lawyer must refuse one of the representations or withdraw from one or both matters. F. Interests of a Third Person: 1. Third Party Payment for Legal Services: Under MR 1.8(f), a lawyer shall not accept compensation for representing a client from one other than the client unless: (1) the client gives INFORMED CONSENT; (2) there is NO INTERFERENCE with the lawyer's independence of professional judgment or with the client-lawyer relationship; and (3) [CONFIDENTIAL] INFORMATION relating to representation of a client is protected as required by Rule 1.6. 2. Maintaining Independent Professional Judgment: In addition to the provision above, MR 5.4(c) also states that ―a lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services.‖ In re Rules of Professional Conduct (Mont. 2000): Petitioners claimed that insurers' rules potentially limiting or directing the scope and extent of defense counsel's representation of insured, and requiring defense counsel to disclose detailed descriptions of professional services to third-party auditors without first obtaining consent of insured, violated Mont. R. Prof. Conduct. Held: Under MR, insured was the sole client of defense counsel; insurer was not a co-client. Third-party auditors were not confidential agents of insured but agents of insurers, and disclosure of detailed billing statements to third-party auditors constituted disclosure to potential adversary. While disclosure of billing information to insurers was impliedly authorized, disclosure by defense counsel of detailed descriptions of professional services to third-party auditors without first obtaining contemporaneous fully-informed consent of insured violated client confidentiality requirements MR 1.8(f) –requirement of prior approval interferes with lawyer’s exercise of independent professional judgment; MR 5.4(c)—professional independence of a lawyer; 1.6—an insured exercising a liability policy with an insurer cannot know at the time he enters the K what kind of claim can be brought against him, what the issues will be, or what kinds of services will be undertaken—fully informed consent is impossible here. Paradigm Insurance Co. v. The Langerman Law Offices (Ariz. 2001): Insurer issued a policy for medical malpractice liability to doctor, who was also the medical director. Insured doctor and another doctor were sued for medical malpractice. Insurer assigned law firm to defend case. Firm failed to investigate whether insured was covered by hospital's liability insurance. Insurer found out that firm was representing claimant against another doctor insured by insurer, canceled firm's representation in instant case, and retained new counsel. Case was settled. Firm sent bill to insurer, insurer refused to pay, alleging malpractice. Held: (1) an express agreement was not a prerequisite to the formation of an attorney-client relationship; (2) when an insurer has assigned an attorney to represent an insured, the lawyer had a duty to the insurer arising from the understanding that the lawyer's services were ordinarily intended to benefit both the insurer and the insured when their interests coincided; and (3) a lawyer had a duty to a non-client and could be liable for negligent breach G. Former Clients: Under MR 1.9(a), a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the SAME OR A SUBSTANTIALLY RELATED MATTER in which that person's interests are materially adverse to the interests of the former client unless former client gives informed consent, confirmed in writing. 1. New Clients Who are Adverse to Clients of Former Firm: Under MR 1.9(b), a lawyer may not represent a person in the same or substantially related matter in which a firm with which the lawyer formally was associated had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired confidential information that is material to the matter. Kanaga v. Gannett Company (Del. Super. 1993) (if confidential information relevant to instant action could have been disclosed through a previous representation, a conflict of interest will exist): Petitioner alleged the prior representation by respondents' counsel of her in a prior action created a conflict of interest and that counsel should be disqualified from representing respondents. Respondents claimed the matters from the prior action and the present action were not substantially related and there was no conflict. Held: In determining whether a substantial relationship existed between the two representations, the court considered the (1) nature and scope of the prior representation, (2) the nature of the present lawsuit against the former client, (3) whether in the course of the prior representation the client might have disclosed confidences which could be relevant to the present action, and (4) whether any such confidences could be detrimental in the current litigation It was reasonable to assume that petitioner would engage in open discussions with her attorney and could have volunteered information which could be deemed confidential and negatively impacted the present action. It was enough to demonstrate that such information could have been acquired, and because that possibility existed, the motion to disqualify was granted 2. Former Judge, Arbitrator, Mediator Or Other Third-Party Neutral – MR 1.12(a): [A] lawyer shall not represent anyone in connection with a matter in which the lawyer participated PERSONALLY AND SUBSTANTIALLY as a judge or other adjudicative officer or law clerk to such a person or as an arbitrator, mediator or other third-party neutral, unless all parties to the proceeding give informed consent, confirmed in writing. Poly Software International v. Su (Utah 1995) (former mediator shall not represent a party in connection with a matter on which they were formerly involved): Plaintiffs, a partnership and one of its partners, filed suit against defendants, a software companies and a former partner, for copyright infringement. The plaintiff partner and the former defendant partner were previously involved in a copyright infringement claim that was heard by a mediator. Plaintiffs retained the mediator as its attorney in the present case. Defendants retained attorney who Plaintiffs had interviewed for the suit. Parties filed cross motions to disqualify the attorneys. Held: To disqualify opposing counsel one must demonstrate three factors: 1) previous attorney-client relationship existed, 2) present litigation is substantially related, and 3) attorney’s present client’s interests are adverse to the movant. Court denied the plaintiffs motion to disqualify holding that no attorney-client relationship exited b/c plaintiffs only briefly interviewed attorney and no confidential information was disclosed. The court granted the defendant’s motion because the current litigation was substantially factually related to the previous litigation where plaintiff’s attorney aced as a mediator and heard confidential information. H. Governmental Lawyers: Under MR 1.11, a former government lawyer shall not represent a client in connection with a matter in which lawyer participated PERSONALLY and SUBSTANTIALLY as a government lawyer. 1. Rule of Imputation Can be Avoided through Screening: Under MR 1.11(b), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter unless: (1) the disqualified lawyer is TIMELY SCREENED from any participation in the matter and is apportioned NO PART OF THE FEE therefrom; and (2) WRITTEN NOTICE is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this rule. I. Imputed Conflicts: Generally, under MR 1.10, when a lawyer has a conflict of interest, that conflict extends to all of the lawyers in the law organization in which the lawyer works, absent written informed consent. 1. Firms Must Implement Conflicts-Control System: Under MR 5.2(a), a partner in a law firm…shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct. This would include setting up an effective conflict of interest control system. 2. No Screening Allowed Generally: Under MR 1.10(a), while lawyers are associated in a firm, NONE of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by MR 1.7 [current clients] or 1.9 [former clients], unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. i) Three Part Analysis When a Lawyer Switches to Opposing Counsel’s Firm Kala v. Aluminum Smelting & Refining Co. (Ohio 1998) (where an attorney left law firm and joined the firm on the opposite side of a dispute, three part analysis in looking at conflicts of interest): After a plaintiff-employee’s counsel joined the law firm of the defendant-former employer’s counsel, the plaintiff moved to have the defendant’s counsel disqualified on conflict of interest grounds. The new firm took steps to avoid disclosure of confidential client communications. Held: The court found that the disqualification was warranted. In ruling on a motion for disqualification for either an individual attorney or an entire firm, a court should use a three-part analysis: (1) was there a substantial relationship between the matter at issue and the matter of the former firm’s prior representation; (2) if there was a substantial relationship between these matters, was the presumption of shared confidences within the former firm rebutted by evidence that the attorney had no personal contact with or knowledge of the related matter, and (3) if the attorney did have personal contact with or knowledge of the related matter, did the new firm erect adequate and timely screens to rebut a presumption of shared confidences with the new firm so as to avoid imputed disqualification. 3. Representing Clients Who Are Adverse to the Clients of a Former Lawyer: Under MR 1.10(b), after a lawyer has terminated his association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has [confidential] information protected by Rules 1.6 and 1.9(c) that is material to the matter. 4. Informed Consent Can Cure Conflict: Under MR 1.10(c), a disqualification prescribed by this rule may be waived by the affected client. J. Nonprofit and Legal Services Programs 1. Nonprofit And Court-Annexed Limited Legal Services Programs: Under MR 6.5 (a), a lawyer who under the auspices of a program sponsored by a nonprofit organization or court provides short-term limited legal services to a client without expectation by either the lawyer or the client that the lawyer will provide continuing representation in the matter … (1) is subject to Rules 1.7 [current client conflicts] and 1.9(a) [conflicts to former clients] only if the lawyer KNOWS that the representation of the client involves a conflict of interest; and (2) is subject to Rule 1.10 [imputation of conflicts] only if the lawyer KNOWS that another lawyer associated with the lawyer in a law firm is disqualified by Rule 1.7 or 1.9(a) with respect to the matter. (b) Except as provided in paragraph (a)(2), Rule 1.10 [imputation of conflicts] is inapplicable to a representation governed by this Rule. 2. Membership In Legal Services Organization: Under MR 6.3, a lawyer may serve as a director, officer or member of a legal services organization, apart from the law firm in which the lawyer practices, notwithstanding that the organization serves persons having interests adverse to a client of the lawyer. The lawyer shall not knowingly participate in a decision or action of the organization: (a) if participating in the decision or action would be incompatible with the lawyer's obligations to a client under Rule 1.7 [current client conflicts]; or (b) where the decision or action could have a material adverse effect on the representation of a client of the organization whose interests are adverse to a client of the lawyer. VI. FEES AND CLIENT PROPERTY – CHAPTER 7 A. Reasonableness Requirement: Under MR 1.5(a), a lawyer shall not make an agreement for, charge, or collect an UNREASONABLE FEE or an unreasonable amount for expenses. The FACTORS to be considered in determining the reasonableness of a fee include the following: (1) the TIME AND LABOR required, the NOVELTY AND DIFFICULTY of the questions involved, and the SKILL requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will PRECLUDE OTHER EMPLOYMENT by the lawyer; (3) the FEE CUSTOMARILY CHARGED in the locality for similar legal services; (4) the AMOUNT INVOLVED and the RESULTS OBTAINED; (5) the TIME LIMITATIONS imposed by the client or by the circumstances; (6) the NATURE AND LENGTH of the professional relationship with the client; (7) the EXPERIENCE, REPUTATION, and ABILITY of the lawyer or lawyers performing the services; and (8) whether the fee is FIXED OR CONTINGENT. B. Hourly Fees: A lawyer may bill hourly. However, in matters where a client has agreed to have fee determined with reference to the time expended by the lawyer, a lawyer may not bill more time than she actually spends on the matter, except to the extent that the time is rounded up to minimum time periods. 1. Double Billing: Generally, a lawyer may not ―double bill‖ for their time. However, there may be an exception one of the cases is a pro bono assignment and the representation of the paying client is not limited or harmed by the time spent on the pro bono case. 2. Other Charges Associated with Representation: Under MR 1.5 Comment , lawyer may seek reimbursement for the cost of services performed in-house, such as copying, or for other expenses incurred in- house, such as telephone charges, either by charging a reasonable amount to which the client has agreed in advance or by charging an amount that reasonably reflects the cost incurred by the lawyer. 3. Inexperience and Learning the Law: A client should not be expected to pay for the education of a lawyer when he spends excessive amounts of time on tasks which would become routine with reasonable experience. Matter of Fordham (Mass. 1996) (a fee is clearly excessive if it includes the time an inexperienced attorney takes to become experienced with the law, which is determined by expert testimony): An inexperienced lawyer billed 153 hours on a DUI case and billed the client $50,000. The client then sued claiming excessive fees. Held: In considering whether a fee is ―clearly excessive,‖ the first factor to be considered is the ―novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly.‖ Based on expert testimony, the amount of hours spent by the lawyer was substantially in excess (several times as high) of the hours that a prudent experienced lawyer would have spent. This was partially because the lawyer was inexperienced. However, a client should not be expected to pay for the education of a lawyer when he spent excessive amounts of time on tasks which would become routine with reasonable experience. Therefore, the fee here was clearly excessive. C. Contingent Fees: Under MR 1.5(c), a fee may be contingent on the outcome of the matter for which the service is rendered. 1. Agreement Must Specify: A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after fee is calculated. 2. Clarify Other Expenses: The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. 3. Written Statement After Conclusion of Matter: Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination. 4. Exceptions: Under MR 1.5(d), a lawyer shall not enter into an arrangement for, charge, or collect: (1) any fee in a DOMESTIC RELATIONS MATTER, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or (2) a contingent fee for representing a DEFENDANT IN A CRIMINAL CASE. 5. Fee Still Must be Reasonable: The general rule under MR 1.5(a) applies to contingent fees as well. Thus a contingent fee ―shall be reasonable.‖ The reasonableness of a contingent fee must necessarily be judged as to the time it was entered into. If a lawyer accepts the risks associated with a contingent fee case, the lawyer should not be required as a matter of ethics to give up that fee. (ABA Opinion). 6. Increasing Percentage Contingent Fees: A percentage fee that increases with the amount of the recovery is permissible under the professional rules of responsibility. This usually reflects a lawyer’s hard work, time, etc. listed under the factors in determining ―reasonableness.‖ (ABA Opinion). D. Statutory Fees: A statutory provision may limit the amount courts deem ―reasonable‖ for hourly/contingent fee. Gisbrecht v. Barnhart (2002) (statutory fees are intended to prohibit only unreasonable contingent fees, and reasonable fees remain enforceable even within the statutory framework): Claimants contended that the contingent fee agreement they made with their attorneys did not provide for fees in excess of those provided in the §406 statutory maximum of 25% of the awarded benefits. Accordingly, the claimants alleged that the agreements provided proper basis for calculating the amount of the fees. Held: The statutory fees provided in §406 did not displace contingent fee agreements within a statutory ceiling, but rather required that courts review the contingent fees to determine the reasonableness of the fees. §406 was passed before the Court developed its current method of calculating fees (e.g. hours * rate). Thus, §406 was intended to prohibit only unreasonable contingent fee agreements and reasonable agreements remain enforceable. E. Fees on Termination: Under MR 1.16 Comment , a lawyer MAY WITHDRAW if the client refuses to abide by the terms of an agreement relating to the representation, such as an agreement concerning fees or court costs or an agreement limiting the objectives of the representation. 1. Declining or Terminating Representation – MR 1.16(b)(5): A lawyer may withdraw from representing a client if … the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled. i) Retainer Letter: The retainer letter should specify that ―one of client’s obligations‖ is to pay monthly and ―failure to pay‖ will result in withdrawal of representation. 2. Limitation – Court Permission Needed: Under MR 1.16(c), a lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. However, it is not ―good cause‖ to terminate a representation so the lawyer is able to take on another matter immediately thereafter. 3. Quantum Meruit and Termination Without Cause: If a lawyer is terminated without cause, the lawyer is entitled to compensation from client for the fair value of their services up to any agreed upon contract price. Rosenberg v. Levin (Fla. 1982) (a lawyer who was terminated without cause is entitled to fair value of their legal services already performed, limited to any set contract price): A client discharged attorneys without cause after they performed substantial legal services under fixed and contingency employment K. Attorneys sued for fees in quantum meruit. Held: A lawyer discharged without cause is entitled to the reasonable value of his services on the basis of quantum meruit, but recovery is limited to the maximum fee set in the contract entered into for those services. 4. If Terminated, a Lawyer Must Return All Unearned Advance Fees: Under MR 1.16(d), upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as … refunding any advance payment of fee or expense that has not been earned or incurred. In re Sather (Colo. 2000) (advance fees must be segregated in a client trust account): An attorney received a ―nonrefundable advance fee‖ from a client for his work in a civil case. He treated the funds as his own property before actually earning the fee. After being discharged by his client, the attorney further failed to return the entire unearned portion of the money. Thus, the attorney was brought before a disciplinary board. Held: An attorney earns fees by conferring a benefit on or performing legal services for a client. An attorney cannot treat advance fees as property of the attorney and must segregate all advance fees by placing them in a trust account until such time as the fees are ―earned.‖ An attorney cannot label advance fees as ―nonrefundable‖ because it misleads the client and risks impermissibly burdening the client’s right to discharge his attorney. F. Fee Splitting: Fee sharing between lawyers in the same firm is always allowed. Furthermore, under MR 1.5(e), a division of a fee between lawyers who are not in the same firm may be made if: (1) The division is in PROPORTION to the services performed by each lawyer OR each lawyer assumes JOINT RESPONSIBILITY for the representation; (2) The CLIENT AGREES to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in WRITING; and (3) The total fee is REASONABLE. VII. TERMINATING THE RELATIONSHIP – CHAPTER 8 A. Declining or Terminating a Representation: Generally, MR 1.16 provides the proper guidelines for declining or terminating a representation. 1. Mandatory Withdrawal: Under MR 1.16(a), except [when mandated by Court order], a lawyer SHALL NOT represent a client or, where representation has commenced, shall withdraw from the representation of a client if: (1) the representation will result in VIOLATION of the rules of professional CONDUCT or other LAW; (2) the lawyer's PHYSICAL OR MENTAL CONDITION materially impairs the lawyer's ability to represent the client; or (3) the lawyer is DISCHARGED. 2. Permissive Withdrawal: Under MR 1.16(b), except [when mandated by Court order], a lawyer MAY WITHDRAW from representing a client if: (1) withdrawal can be accomplished WITHOUT MATERIAL ADVERSE EFFECT on the interests of the client; (2) the client persists in a course of action involving the lawyer's services that the lawyer reasonably believes is CRIMINAL OR FRAUDULENT; (3) the client has USED the lawyer's services to PERPETRATE A CRIME OR FRAUD; (4) the client insists upon taking action that the lawyer considers REPUGNANT or with which the lawyer has a FUNDAMENTAL DISAGREEMENT; (5) the client fails SUBSTANTIALLY TO FULFILL AN OBLIGATION to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled; (6) the representation will result in an UNREASONABLE FINANCIAL BURDEN on the lawyer or has been rendered unreasonably difficult by the client; or (7) other GOOD CAUSE for withdrawal exists. 3. Must Comply With Court Order: Under MR 1.16(c), a lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. 4. Steps After Withdrawal: Under MR 1.16(d), upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law. Gilles v. Wiley, Malehorn (N.J. App. 2001) (a lawyer must take steps to protect client’s interests after termination of the representation including – if necessary – personally contacting them to advise to get new counsel to prevent running of statute of limitations): Plaintiff claimed that the attorney, voluntarily and without good cause attributable to the plaintiff, ended representation without adequately protecting her against the running of the statute of limitations, thus causing her to lose her medical malpractice cause of action. The attorney’s firm ―took a new direction‖ and did not represent any more malpractice cases. The attorney sent a letter disclosing the termination, that there was a two-year statute of limitations, and included a recommended successor attorney. Held: There were issues of fact that needed to be adjudicated by a jury, thus summary judgment was not appropriate. The case law was split on whether a simple letter was sufficient or whether the attorney should have personally contacted the client. Crews v. Buckman Laboratories International Inc. (Tenn. 2002): Concerned whether an in-house lawyer could bring a common-law claim for retaliatory discharge when she was terminated for reporting that her employer’s general counsel was engaged in the unauthorized practice of law. Held: Yes; a cognizable claim exists. VIII. THE LIMITS OF ADVOCACY – CHAPTER 9 A. Frivolous Claims: Under MR 3.1, a lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established. Christian v. Mattel, Inc. (9th Cir. 2002) (an attorney must not put forth a frivolous claim and must have conducted an adequate factual investigation before bringing a claim): Attorney appealed a Rule 11 attorney’s fees sanction. The attorney had brought suit for a client who alleged that Mattel’s Barbie dolls infringed on his Christian’s Claudene doll sculpture copyright. The district court that imposed the sanction had ruled that the attorney should have discovered prior to commencing the civil action that Mattel’s dolls could not have infringed because the dolls had been created well before the Christian’s Claudene dolls. Held: Rule 11 sanction vacated. While court agreed that the attorney had a frivolous claim and that he didn’t conduct an adequate factual investigation, Rule 11 sanction was partially based on misconduct that cannot be sanctioned under Rule 11 such as discovery abuses, etc. Attorney has duty to conduct investigation and research to make sure underpinnings of complaint are warranted by law…Test: (1) whether the complaint is legally or factually baseless from an objective perspective and (2) if attorney has conducted a reasonable and competent inquiry before signing and filing it. B. Discovery Abuse: 1. Obstructing, Altering, Destroying, or Concealing Evidence: Under MR 3.4(a), a lawyer shall not…unlawfully obstruct another party's access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. Further, a lawyer shall not counsel or assist another person to do any such act. 2. Frivolous Discovery Request and Failure to Comply: Under MR 3.4(d), a lawyer shall not… in pretrial procedure, make a frivolous discovery request or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party In re Tutu Wells Contamination Litigation (3rd Cir. 1997): Lawyers were representing a company in a large environmental lawsuit. The lawyers engaged in a strategy that kept the other parties in the litigation from obtaining needed information in a timely manner and took legal tactics to delay, oppress, or harass their opponents. Furthermore, a ―smoking gun‖ report was kept out of a discovery request for ―all reports generated from soil and groundwater testing.‖ Held: Although the sanctions involving suspension and community service were vacated on due process grounds, monetary sanctions were upheld for the lawyers’ failure to company with discovery requests and other behavior. C. Responsibilities of Lawyers: 1. Responsibilities Of A Subordinate Lawyer – MR 5.2(a-b): A lawyer is bound by the Rules of Professional Conduct notwithstanding that the lawyer acted at the direction of another person. A subordinate lawyer does not violate the Rules of Professional Conduct if that lawyer acts in accordance with a supervisory lawyer's reasonable resolution of an ARGUABLE QUESTION of professional duty. D. Communication with Represented Persons: 1. Communication With Person Represented By Counsel – MR 4.2: A lawyer shall NOT communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the CONSENT OF THE OTHER LAWYER OR is authorized to do so by LAW OR A COURT ORDER. 2. Dealing With Unrepresented Person – MR 4.3: In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is DISINTERESTED. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give LEGAL ADVICE to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client. 3. Dealing with Employees of Represented Organization: According to MR 4.2 Comment , when dealing with a represented organization, a lawyer is prohibited from communicating with a constituent of organization who … (1) SUPERVISES, DIRECTS OR REGULARLY CONSULTS with the organization’s lawyer concerning the matter OR (2) Has the AUTHORITY to obligate the organization with respect to the matter [taken out in E2K] OR (3) Whose ACT OR OMISSION in connection with the matter may be IMPUTED to the organization for purposes of civil or criminal liability. i. Consent of the organization’s lawyer is not required for communication with a former constituent. If a constituent of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for purposes of this Rule. ii. No matter whether the employee may be communicated with or not, a lawyer has the burden of making this decision, and a lawyer may not inquire about privilege information – e.g. conversations with attorney, information about protected documents, etc. iii. An employer cannot tell all employees that they cannot talk to the Department of Justice because the DOJ has interpreted this as obstruction of justice. However, an employer may advise ―protected‖ employees under MR 4.2 that they should not talk to the DOJ and an employer may advise all employees that they ―don’t have to talk‖ to the DOJ. Messing, Rudavsky, & Weliky v. President & Fellows of Harvard College (Mass. 2002): Concerns issue of whether, and to what extent, the rules of professional responsibility prohibit an attorney from speaking ex parte to the employees of an organization represented by counsel. Plaintiff was suing Harvard claiming that Harvard discriminated against her on the basis of gender and in reprisal for earlier complaints of discrimination. Plaintiff’s law firm talked ex parte with various police officers from the Harvard University Police Department. Harvard claimed impropriety. Held: Ex parte communication is only prohibited with those employees who exercise managerial responsibility in the matter, who are alleged to have committed the wrongful acts at issue in the litigation, or who have authority on behalf of the organization to make decisions about the course of the litigation. Police here did not fall in this category, and thus the communication was not prohibited. 4. Court Orders: Under MR 4.2 Comment, a lawyer who is uncertain whether a communication with a represented person is permissible may seek AN [EX PARTE] COURT ORDER. A lawyer may also seek a court order in exceptional circumstances to authorize a communication that would otherwise be prohibited by this Rule, for example, where communication with a person represented by counsel is necessary to avoid reasonably certain injury. IX. SELF-REGULATION – CHAPTER 10 A. Restrictions on Practice: 1. No Restrictions on Practice: Under MR 5.6, a lawyer shall not participate in offering or making … (a) A partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice AFTER TERMINATION OF THE RELATIONSHIP, except an agreement concerning benefits upon retirement; OR (b) An agreement in which a restriction on the lawyer's right to practice is part of the SETTLEMENT of a client controversy. 2. Agreeing to Not Represent Other Persons Regarding a Matter: Under MR 5.6 Comment , paragraph (b) prohibits a lawyer from AGREEING NOT TO REPRESENT other persons in connection with settling a claim on behalf of a client. 3. Proper Alternative Arrangement – Hire the Lawyer: A proper and ethical way of dealing with the problem is for a client to settle the case at issue, and then immediately hire the attorney from thereon such that a conflict of interest is created.
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