Last week the media was abuzz with the allegations made against the National Enquirer by Jeff Bezos, the founder of Amazon and the owner of The Washington Post. The details in Bezos’ blog post about his ongoing dispute with the Enquirer and its publisher David Pecker are sensationalistic to say the least: the world’s richest man being allegedly blackmailed by people working for Pecker (a long-time friend and supporter of President Trump), with threats to publish “compromising” photos of Bezos unless he backed off his investigation of the tabloid. Here is some reporting on the story.

Part of the interest arises because Bezos alleges that the threat was delivered, in part, by an attorney working for the Enquirer. A Law360 article on the situation says “Bezos’ published account of how a general counsel and others at the American Media Inc.-owned paper allegedly tried to blackmail him does appear to describe a violation of state and federal statutes, ethics and white collar specialists said.”

While there may be a debate as to whether these were just hard negotiations or discussions that crossed the line into blackmail, it at least appears that the lawyers involved might have allowed themselves to get close to the line, even if not over it.

Zeal … or trouble

When zealously representing your clients, it can be easy to forget that zeal cannot be the basis for doing things that break the law or undermine the legal system. For example:

  • In some states, threatening to file criminal charges against a potential defendant in order to obtain a civil settlement is treated as extortion, including when the threat is made by counsel attempting to recoup stolen assets. An ABA Litigation article on the general subject is here.
  • As the New York statute does, many states make it a crime to compel a person “by means of instilling in him or her a fear” that if a demand is not met the threatener will “expose a secret or publicize an asserted fact, whether true or false, tending to subject some person to hatred, contempt or ridicule.”
  • Obstruction of justice in the course of representing a client was the undoing of some of the lawyers involved in Watergate.  (See here for a take on Watergate’s legal ethics legacy by John Dean and our partner Jim Robenalt.)
  • Lawyers have faced ethics charges for going too far in public statements about their clients’ cases, in violation of the many different state versions of Model Rule 3.6 (“Trial Publicity”).
  • It can be an ethical violation under Model Rule 3.3(a)(2) if you fail to make a court aware of binding precedent that is directly adverse to your client’s position.

Knowing where zeal ends and unlawful or unethical conduct begins is the best way to keep yourself (and your client) out of trouble. And don’t let an echo-chamber do you in. Getting a reality check from someone not involved in the situation can sometimes help avoid problems. Remember, under Model Rule 1.6(b)(4), you are permitted to reveal information relating to the client’s representation to the extent you reasonably believe necessary to secure advice about your compliance with the Rules of Professional Conduct, opening the way for getting good ethics advice.

Going abroad?  Think that “national counsel” is going to take care of anything that comes up when you’re gone?  Get swamped when you return and take “several weeks” to wade through the e-mail that piled up in your absence?  If you’re local counsel, that might be a recipe for disaster — for your client — as the Seventh Circuit Court of Appeals held recently.

What we have here is a failure to communicate

After the plaintiff filed a trademark infringement case, the Wisconsin district court’s docket shows that just a month later the parties reached a deal and jointly moved to file a consent order resolving the dispute.  But about four months after that, the plaintiff was back in court, moving for a contempt order and asserting that the defendant had violated the consent order.

Here’s where things began to go south, according to the appeals court opinion:  The defendant’s local Milwaukee counsel received notice of the contempt motion, via the electronic docketing system (presumably PACER).  When the lawyer failed to respond, the district court scheduled a hearing.  No one showed up on behalf of the defendant.  The district court then granted the plaintiff’s motion, holding the lawyer in contempt, requiring his client to pay the plaintiff’s fees and costs, and ordering the lawyer to explain his unresponsiveness.

As the court of appeals wrote, that order “caught [the lawyer’s] attention.”  Local counsel explained that he had been “traveling internationally” when the plaintiff filed its motion for contempt, and even though he returned five days before his client’s response to that motion was due (and 26 days before the scheduled hearing), “it took him several weeks to catch up on his email.”  He saw the court’s notices only after “all response dates had passed.”

The defendant’s request for reconsideration of the contempt order also pointed to what the appeals court called a “communication breakdown between local counsel and the company’s national trademark counsel.”  Local counsel believed national counsel would be “attending to any ongoing needs in the case; national counsel apparently had a different understanding,” the court wrote.

“Deadlines matter”

The result of this mess-up?  The district court found the local counsel in contempt, and after a line-by-line analysis of the plaintiff’s attorney fees and costs for the entire case — not just the contempt proceedings — sanctioned the defendant to the tune of almost $35,000.  The Seventh Circuit easily upheld those rulings, characterizing the whole situation as “unfortunate and avoidable.”

“Deadlines matter,” wrote the court, and certainly after the district court provided a second chance to the defendant by noticing a hearing, the lower court’s reaction in issuing its contempt order was not an abuse of discretion.  Nor did the defendant’s good faith provide any immunity from sanction, the appeals court said.

And the big take-away:  “Nor, of course, can communication breakdowns serve to exempt outside counsel … from compliance with the rules, or from the penalties for failing to do so.”

Beware local counsel duties — and check your e-mail

We’ve written before about local counsel duties. and a New York City Bar ethics opinion that is a helpful cautionary road map on local counsel duties.  The bottom line is that you don’t get any free pass for being “merely” local counsel.  The extent of local counsel’s role in any particular matter should be expressly set out in a carefully-considered engagement letter with the client.  If you think that “national counsel” is going to monitor a case or a docket after some certain end point, you should additionally clarify that understanding, something the court here said would have helped.

And, hey — Model Rule 1.1 (“Competence”) and Model Rule 1.3 (“Diligence”) mean that we can’t just totally put down our practices when we go on vacation.  That was true even in the days before e-mail and PACER, when someone “back at the ranch” would be monitoring our postal mail.  Now, the available technology means there is little excuse for not being aware of court filings in real time.

As for clearing up the inevitable post-vacation backlog of e-mails, the laundry from the trip might have to wait — but that’s okay, isn’t it?

The Ohio Supreme Court is continuing its trend of suspending lawyers who violate the disciplinary rule on sex with clients, and has again rejected arguments that pointed to the consensual nature of the relationship.  In a recent opinion involving sex between criminal defense counsel and his client, the court characterized the lower disciplinary Board’s analysis as “blaming the victim,” and increased the penalty above what the Board recommended.  The lawyer will serve a six-month suspension, with 18 months stayed on multiple conditions.

Hot tub trespass

The lawyer had previously represented “J.B.’s” boyfriend.  When J.B. was charged with felony theft, the lawyer agreed to represent her.  According to the opinion, the next day the lawyer and J.B. had drinks at a restaurant, discussed her case, had sex in the lawyer’s car in the parking lot, and engaged in sexual activity at least seven more times over the next four months, including trespassing into a neighbor’s yard to use a hot tub.

After rumors about the relationship began to spread, the lawyer falsely denied them to the judge presiding over J.B.’s criminal case.  In the meantime, the lawyer had filed a petition to run for prosecuting attorney.  After that, the county sheriff’s office began investigating the lawyer, and J.B. agreed to disclose the true nature of her relationship with the lawyer in exchange for a reduced sentence on her felonies.

Eventually, as part of a plea agreement on charges against him, including sexual battery, and criminal trespassing, the lawyer withdrew his candidacy for prosecutor and was sentenced to two years of community control and a fine.

Consent just doesn’t matter

The lawyer stipulated to violating Ohio’s version of Model Rule 1.8(j), which prohibits “sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.”  (The Ohio version refers to “sexual activity” with a client.”)

As the sanction for the lawyer’s misconduct, the Board of Professional Conduct recommended a two-year suspension with the entire two years stayed.  In the Board’s view, “not only was there no harm to the client, but the client leveraged her relationship with [the lawyer] to get a better plea deal,” and the lawyer had already suffered by his arrest, indictment, spending two nights in jail and being forced to withdraw from the prosecutor’s race — all stemming “from [the lawyer’s] consensual sexual relationship with his client.”

The Supreme Court strongly rejected this whole line of reasoning, along with the Board’s recommended sanction.  The Board’s approach, said the court, “essentially blamed the victim, J.B., for the negative consequences that [the lawyer] experienced resulting from his own decision to engage in sexual relations with a vulnerable client.”  (Emphasis in original.)

The court wrote that without a sexual relationship that pre-dates the client relationship, “seeking or having sex with a client is a per se violation,” and “the fact that a client appears to have consented does not mitigate the attorney’s misconduct or provide a defense against a violation.”

Instead, the court termed a sexual relationship with a client as “inherently and insidiously harmful,” categorizing this case as the “most disturbing” variety” — where “a lawyer has had sex with a client while defending the client against criminal charges … or has accepted sex in lieu of fees.”

The court imposed a two-year suspension with only 18 months stayed, along with multiple conditions — including taking and passing the MPRE, completing 12 hours of ethics CLE, and serving a two-year period of monitored probation.

Continuing trend

This case is one in a line of disciplinary opinions in which the Ohio Supreme Court has emphasized the power imbalance between the lawyer and client, and rejected the argument that the client’s consent to the sexual activity somehow ameliorates the ethical misconduct.  We’ve written before about one of these cases, in which the court found the lawyer not to be “remorseful” because he continued to argue that his sexual relationships with multiple clients were “consensual,” even while acknowledging it was wrong.  Several other such cases are cited in the opinion involving J.B.  It will be interesting to see how this court’s disciplinary stance on sex with clients continues to evolve.

Has your client ever suggested paying for your services via donations from a Kickstarter campaign, or a GoFundMe page?  The District of Columbia Bar recently considered such donation-based crowdfunding, and greenlighted the basic concept — but noted that the ethical implications vary depending on the lawyer’s level of involvement in the crowdfunding effort.

Other people’s money

Not many opinions have yet addressed the ethics of third-party funding of legal services using social media — but the phenomenon appears widespread.  A search for the term “legal” on the GoFundMe site, for instance, brings up thousands of results from all over the country, many referring to “legal defense fund,” or “legal fund.”

The D.C. opinion deals only with “donation-based funding,” and not “equity-based funding,” in which an investor contributes funds in exchange for a stake in the potential recovery.  (We’ve discussed equity-based third-party funding here, here and here.)

The opinion notes that the term “crowdfunding” and the use of social media to raise money for legal fees  may be relatively new, but “payment by third parties for another’s legal representation is not” new.  So it’s no stretch to conclude that the Rules of Professional Conduct “apply to a lawyer’s receipt and disposition of all funds received in connection with a client representation, regardless of their source.”

Client-directed crowdfunding

When the lawyer is not involved in the actual fundraising, but simply receives the funds raised by the client’s social media efforts, the opinion finds nothing unethical — but notes the following potential issues:

  • be aware of any increased risk of fraud, money laundering or other criminal activity in connection with the exchange of crowdfund-generated fees, and take reasonable precautions to avoid unwittingly engaging in or assisting illegal conduct;
  • consider counseling the client about avoiding the disclosure of confidential information to third parties as part of the fundraising effort — whether on-line or in person;
  • discuss with the client whether the use of crowdfunding is the best choice, as Model Rule 2.1 permits advice that refers not only to law but to “moral, economic social” and other factors that may be relevant.

Crowdfunding by lawyers

The D.C. bar also outlined the ethics obligations where a lawyer steps in and “assists” in,  “undertakes or exerts control” over the crowdfunding effort — and not surprisingly, these obligations are the ones that also apply generally, namely:

  • getting informed consent before accepting compensation from third parties for the client’s legal fees,  not letting the donors interfere with the lawyer’s legal judgment, and protecting the confidentiality of the information relating to the representation (Model Rule 1.8(f));
  • memorializing the crowdfunding arrangement through a fee agreement with the client, preferably in writing — including eliminating confusion about issues like “who gets any excess crowdfunds?” and “who is responsible for paying fees if crowdfunding falls short?”;
  • treating crowdfunds collected by the lawyer as advance fees, placing them in trust as required by D.C. Rule 1.15, and drawing on them only as earned;
  • returning unearned crowdfunds to the client at the conclusion of a representation, recognizing that unlike a contingent fee, the lawyer has not incurred any risk of non-payment, and therefore it would “be unethical … to claim unearned crowdfunds” after the matter is over.

Fee-splitting issues?

In contrast to the donation-based crowdfunding the D.C. opinion discusses, investment-based third-party funding can arguably raise the issue of splitting fees with non-lawyers.  That might be so even under D.C.’s version of Model Rule 5.4, which permits some forms of fee-splitting — but only with “nonlawyer professionals [who] work with lawyers in the delivery of legal services,” such as “psychologists or psychiatric social workers [who] work with family law practitioners.”  See id. cmt. [7].

Prof. Alberto Bernabe, at John Marshall Law School, has a 2016 article on the fee-splitting issue, linked here, and a post on the D.C. ethics opinion over at the Professional Responsibility Blog.

If you’re admitted to handle a case PHV, mind your P’s and Q’s.

Translation:  Pro hac vice admission to practice before a court outside the state where you’re licensed requires attention to a range of ethics duties, and running afoul of them can have bad consequences.  Two recent cases spotlight some of the issues.

We’re looking at you….

A Louisiana lawyer was admitted pro hac vice to represent a client in the Western District of North Carolina.  On the application, he certified that he had never been subject to a formal suspension or public discipline in Louisiana.  Whoops.  In 2014, the lawyer had been suspended in the Bayou State for neglecting a client matter and mishandling a client trust account, but the suspension was deferred pending successful completion of a two-year probation.

The lawyer argued that his certification on the PHV application was not a material misrepresentation.  Maybe not technically — but the district court in North Carolina was not buying it.  The lawyer’s missteps in his home state didn’t automatically disqualify from appearing in North Carolina, said the court.  But he was required to explain his disciplinary history.  The lawyer’s argument that he had to disclose only an actual interruption in his ability to practice was “manifestly not credible,” the court found.  Even making the argument demonstrated his lack of candor, the court noted.

The outcome:  revocation of the lawyer’s permission to represent his client in the case.

Lesson:  Your state has a version of Model Rule 3.3 (Candor toward the Tribunal), Model Rule 5.5 (Multi-jurisdictional Practice) and Model Rule 8.4(c) (dishonesty, misrepresentation).  Don’t try to shave the corner of the plate when you’re applying for PHV admission.  Explain anything that even arguably needs explaining.  Don’t try to justify a failure to disclose with an over-technical reading of the  requirements.  A court might not look kindly on that strategy.

Hand-flapping and harassment

An Ohio lawyer admitted pro hac vice before the Delaware Chancery Court was representing the defendants.  Things went awry when the lawyer deposed one of the plaintiff’s witnesses, and based on misconduct at the deposition, the court granted the lawyer’s own motion to withdraw his PHV admission.

From its review of the deposition transcript and video, the court noted that the lawyer

  • raised his hand and made yapping gestures toward plaintiff’s counsel while plaintiff’s counsel was speaking;
  • repeatedly interrupted plaintiff’s counsel and referred to him as “Egregious Steve,” and the “sovereign of Delaware”;
  • harassed the deponent with personal questions; and
  • called the deponent and plaintiff’s counsel “idiots.

For this conduct, which it called “not only rude, but tactically so,” the court granted the motion to withdraw, and also referred the matter to Delaware disciplinary counsel, along with imposing attorneys’ fees on the lawyer and his firm.

Lesson:  Be professional and dignified at all times, but especially when you are in someone else’s bailiwick.  As the court said, the lawyer was appearing in Delaware “as a courtesy extended to him to practice pro hac vice.”  Delaware, like many other jurisdictions, has a professionalism code, in addition to its Rules of Professional  Conduct.  The Delaware code stresses “civility,” respectfulness, “emotional self-control,” and refraining from “scorn and superiority in words or demeanor,” and is binding on those appearing pro hac vice, the court said.

The take-home from these two cases is obvious.  When you’re specially admitted before a court, any professional or ethical misconduct carries with it the added potential risk of being tossed from the case, with clear downsides for your client, as well as for you.  Mind those P’s and Q’s, and stay out of PHV trouble.

Everyone knows that we have an ethical duty of competence, and in most jurisdictions this includes a duty to be aware of the “benefits and risks” of relevant technology.  Examples of possible technology issues affecting our practices:  encryption (and cyber-security in general), cloud storage, e-mail handling, the internet of things — there are many more.  And snafus from failing to understand technology or handle it properly can have fallout for lawyers and clients.

Here’s a possible example, and it’s a scary one:  not using redaction technology properly, resulting in disclosure of information that shouldn’t be revealed.

Redaction pitfalls

Mistakes in redacting sensitive information can lead to high-profile problems.  Just this week, it was reported that lawyers for President Trump’s former campaign chairman, Paul Manafort, apparently failed to redact a federal court document properly, permitting the blacked-out text to be viewed “with a few keystrokes.”

Similarly, in the Parkland, Florida high school shootings case, the school district apparently didn’t properly redact a document regarding the alleged shooter, which contained confidential information about him.  A Florida newspaper reported that the method used “made it possible for anyone to read the blacked-out portions by copying and pasting them into another file,” which the newspaper did — drawing a contempt threat from the judge presiding over the criminal case.

Not redacting documents properly has also led to disciplinary action.  In 2013, a Chicago lawyer was reprimanded when he failed to ensure that personal information was redacted in federal student loan collection actions he filed on behalf of the U.S. government.  And in 2014, a Kentucky lawyer received a public reprimand for, among other misconduct, failing to redact his client’s social security number in bankruptcy filings he made on her behalf.

A law.com reporter for Corporate Counsel recently wrote that he was able to download from PACER a 100-page affidavit in pdf format with multiple redacted pages — but the black boxes disappeared when the document was copied into another application, “revealing all the private financial information that was supposed to be hidden.”

The reporter quoted a security expert who cautioned that people don’t know how to use redaction technology properly, and cited a 2005 National Security Agency report advising that redaction should not just visually hide sensitive information but actually remove it from the document.  (An updated NSA report is here.)

Think you can sidestep complicated technology by just taking out your black marker and obscuring the confidential text?  Even that may not be enough; as noted here, some scanners can pick up the covered words.

What to do?

In addition to the duty of technological competence set out in comment [8] of Model Rule 1.1, we of course must preserve our clients’ confidential information under Rule 1.6, and safe-keep their property under Rule 1.15 (which can include their information).

Does all this mean that every lawyer must become a tech guru with a detailed understanding of the highly complex systems we are required to use and rely on every day?  No.  (I, for one, can barely add and subtract, and I went to law school so I wouldn’t have to — at least not very much.)  But at minimum, we have to recognize what we don’t know — in the words of comment [8], that means “keeping abreast” of technology developments.  And most important, we have to get the expert help we need to navigate these shark-filled waters, whether it’s turning to high-end tech advisors, getting assistance from the bar association or educating ourselves.

What we can’t do is put our techno-phobic heads in the sand.

If you’re corporate counsel to an organization, you know how hard it can be to navigate privilege issues.  In a single day, you can be involved in talking to business managers, communicating with your CEO and dealing with the board.  When are your communications privileged, and how can you protect them?  A recent Colorado district court opinion has some pointers, based on a finding that a memo partly authored by in-house counsel was not privileged.

Legal advice, or just business?

In class action litigation, the plaintiffs asked the court to compel defendant Marriott to turn over an unredacted version of a nine-page financial and business growth strategy memo that corporate officers addressed to the organization’s Corporate Growth Committee.  Various lawyers in the law department had significant responsibility for preparing the memo, and the court found that some sections of the final memo had been written by in-house lawyers.

But the fact that a lawyer prepares a document is not sufficient to make the communication privileged.  Rather, the privilege’s proponent must “clearly demonstrate that the communication … was made for the express purpose of securing legal, not business advice.”

Further, the court said, the “primary purpose” of the communication must be getting or giving legal assistance, rather than business advice.

Mixed messages

So what to do with a document that contains a mixture of business advice and legal advice, which the court found were “intertwined” in the memo?  Citing the lack of Colorado precedent, and applying a case from the District of Columbia, the court held that the legal advice must “predominate for the communication to be protected.”  It did not predominate here, said the court.  Instead, while the strategy memo involved some legal advice, most of it was “ordinary and customary business strategy advice.”

Tips to protect the privilege

This case has some take-home lessons for in-house counsel on how to protect the privilege over legal advice.

  • It’s on you:  “The legal duty to protect the privilege falls on the legal department,” said the court, noting that Marriott’s team was “large and experienced.”  But even if you’re a one-person shop, you are the point-person for privilege issues.
  • Educate the stakeholders:  Those tasked with advising on and writing parts of the Marriott memo had “a duty to inform the Corporation of the privilege and to take steps to protect their advice,” said the court.  Schooling your company’s managers on the privilege is key to helping protect it.  For instance, do they know that cc-ing you does not necessarily make a document privileged?
  • Don’t intermix business and legal advice:  If the legal advice in the strategy memo had been in “separate paragraphs or pages,” or in a “confidential addendum or even a separate memorandum,” the court hinted that it might have protected those parts as privileged and only ordered disclosure of part of the memo.  Instead, the information was so intertwined that redaction “would be impractical.”

And some related pointers:

  •   Label!  If you are giving legal advice, start your communication with “You’ve asked me for my legal opinion on …” or “my legal advice regarding…. .”  Head those documents “Attorney Client Privilege.”  But don’t over-use the header.  If everything that comes out of your office is marked “Privileged,” that might be deemed to cancel out the effect.
  • Don’t overshare:  Remember, e-mail has a way of getting out of control.  Long threads where you are an early addressee may be deemed not privileged after going to people within or outside the company who shouldn’t receive the information.

Different outcome?

The court in this case adopted the “primary purpose” standard, but there are others — for instance, whether legal advice is “one of the significant purposes” of the communication.  We’ve discussed that test, which the  D.C. Circuit adopted in 2014, here and here.  Over at Presnell on Privileges, Todd Presnell wonders whether the result in the Marriott case would have been different under that standard, and it’s a good question.  Privilege disputes can be very fact-specific, and the test the court applies can certainly dictate the outcome.

Do we need another reminder about the perils of posting internet comments on cases and matters we are connected with?  Apparently we do, and here’s a strong one.  Earlier this month, an assistant U.S. attorney for the Eastern District of Louisiana was disbarred based on hundreds of comments he posted pseudonymously on the website of the New Orleans Times-Picayune.  The posts included many related to high-profile cases he or his colleagues in the U.S. Attorney’s office were prosecuting, including government bribery scandals and the killing of two unarmed residents by the police following Hurricane Katrina.

In its opinion, the Louisiana Supreme Court wrote that the lawyer’s “extrajudicial comments about pending cases” struck at “the foundation of our system.”  The court felt compelled to “send a strong message … that a lawyer’s ethical obligations are not diminished by the mask of anonymity provided by the internet.”

The hearing panel had recommended a two-year suspension, with one year deferred. The court, however, adopted the disciplinary board’s disbarment recommendation, which in the Bayou State entitles a lawyer to petition for reinstatement after five years.

“GUILTY as charged!”

The lawyer was a prolific poster on the newspaper’s internet site, using a number of pseudonyms to comment about pending cases he or his office was involved in.  For instance, during a bribery trial he prosecuted, the lawyer posted that the defendant’s lawyer “has screwed his client!!!!,” continuing that “You’re just as arrogant as [the allegedly bribed official] … and the jury knows it.”

During the federal trial of six police officers for the shooting of unarmed residents on the Danziger Bridge, and the ensuing cover-up, the lawyer posted, “Perhaps we would be safer if the NOPD would leave next hurricane and let the National Guard assume all law enforcement duties.  GUILTY AS CHARGED.”

The lawyer’s posts connected to the Danziger Bridge trial came to light after the six officers were found guilty and received lengthy sentences.  Following an investigation, the lawyer’s conduct was cited as one aspect of a pattern of prosecutorial misconduct that prompted the grant of the officers’ motion for new trial and eventually a plea bargain for much lighter sentences.

Not the way to relieve stress

The lawyer stipulated that his conduct violated Louisiana’s versions of Model Rules 3.6 (trial publicity); 3.8(f) (prosecutors’ extra-judicial comments); 8.4(a) (violating rules of professional conduct) and 8.4(d) (conduct prejudicial to the administration of justice).

But at the disciplinary hearing, although acknowledging his misconduct, the lawyer testified that he thought his posts would help him deal with the stress of his work.  His treating psychologist opined that the lawyer suffered from post-traumatic stress disorder resulting from his past work as a police officer and FBI agent, during which he had witnessed gruesome scenes and personally had come under gunfire.

In imposing a sanction, the court rejected PTSD as a mitigating factor.  Although the psychologist testified that the online posts were the result of the lawyer’s PTSD, the court found no clear and convincing support for the conclusion that there was a causal link between the posts and the lawyer’s mental condition.

Key to that determination, said the court, was the lawyer’s own admission that he knew he should not be posting his comments online, and that it was his anger over public corruption that led him to vent his pseudonymous criticism.

Think before you click submit

We all feel the stress of our chosen profession.  But is the relief valve of venting it in public (even anonymously) worth the risk of professional discipline?  Keeping a private journal (locked in your drawer) may not be as satisfying as seeing your words up in pixels, but it’s surely safer from a licensing standpoint.

A federal district court refused last week to disqualify a Connecticut lawyer in a suit against Yale University, even though finding a violation of the state’s version of Model Rule 4.2, the “no contact rule.”  Although ruling that disqualification was too extreme a sanction, the court ordered the turnover of interview notes from the lawyer’s interview of the improperly-contacted witness.

The case underscores the need to tread carefully when contacting anyone associated with the opposing party.

Coin curator’s claim

Yale University has an acclaimed art museum, and the museum’s former Curator of Coins and Medals sued the university for age discrimination after it terminated his employment.

In addition to being the museum’s coin curator, the plaintiff was an adjunct professor in the classics department.  The plaintiff’s lawyer phoned another professor in the department and interviewed him for 34 minutes as a potential witness, according to the opinion.  The other professor had never been involved in a law suit, and later said that it did not occur to him during the interview that he needed to consult with Yale’s lawyers before answering questions from the opposing side.

Yale’s counsel only learned about the interview six weeks later, and promptly moved to disqualify the plaintiff’s counsel for violating the no-contact rule, asserting that the professor interviewed was a represented “party” who was off-limits under the rule, absent consent from Yale’s lawyers.

Conceded “technical” violation

Connecticut’s Rule 4.2 differs from the Model Rule by barring communication about the subject of the representation “with a party the lawyer knows to represented by another lawyer in the matter,” without the other lawyer’s consent.  (The Model Rule uses the word “person,” not “party.”)  This raises the question “Who is included as a party?” for purposes of the no-contact rule, especially when an organization is a party.

Under the Connecticut rule comments, a “party” includes an organization’s employees with managerial responsibility; employees whose act or omission in connection with the matter may be imputed to the organization; and employees whose statements may constitute an admission of the organization.  While not express in the opinion, the profession presumably fell into one of these categories — perhaps the third one.

The plaintiff’s lawyer conceded that his interview raised a “technical violation” of Rule 4.2, but that it had been inadvertent, because the professor and the plaintiff were close colleagues and the lawyer regarded the professor as a witness on behalf of the plaintiff.  The lawyer argued that he had no intent to gain an unfair advantage, and that Yale was not prejudiced.

Trial taint needed for DQ

The district court agreed that the circumstances did not merit disqualification, notwithstanding the conceded rule violation.

As in many other jurisdictions, there is authority in the Second Circuit that disqualification motions require balancing the need to uphold ethical standards with a party’s right to freely-chosen counsel.  Therefore, an ethical violation, standing alone, might not be sufficient to mandate disqualification.  Many opinions in the Second Circuit and elsewhere hold that the remedy of disqualification is justified only when a violation poses a significant risk of trial taint.

The court agreed that disqualification was not necessary here.

Here, the district court explained, the taint concern was that the plaintiff’s lawyer had obtained confidential information about Yale’s litigation strategy from the professor, who had previously discussed the case with Yale’s lawyers.  The plaintiff’s lawyer had proposed to provide the court with the notes from the interview for in camera review; but the best remedy, said the court, was to order the lawyer to turn the notes over to Yale’s counsel.

Take-home lessons

If you’re involved in representing a client in any matter (not just litigation), you need to take heed of the no-contact rule.  As this case highlights, the rule comes in different flavors depending on jurisdiction.  While the case here involved disqualification, there is also always the possibility of disciplinary action from violating an ethics rule.  Last, the court’s order to turn over the interview notes — clear attorney work product — to the opposing party is a surprising remedy.  But obviously, such an order can’t be ruled out in circumstances that would appear to call for it.

You probably know about the ethics rule that prohibits lawyers from trying to prospectively limit their liability to clients (or at least I hope you do!).  You can find it in your state’s version of Model Rule 1.8(h).

In an interesting twist, the Utah Ethics Advisory Committee recently opined that it’s permissible to include a provision in a retainer agreement requiring the client to indemnify the lawyer against third party claims against the lawyer arising from the client’s own “behavior or negligence.”

Narrow reading — but not alone

The Utah committee said that an indemnification provision against liability, loss and expense to the lawyer caused by third-party claims arising from client’s conduct “is not specifically prohibited by the rules.”

While Utah’s Rule 1.8(h) (identical to the Model Rule) bars prospective limitation of liability to a client for malpractice, the committee said, “it does not address the specific question of whether an attorney may include an indemnification provision for claims brought by third parties.”  Therefore, such a provision “is not prohibited on its face.”

Third-party indemnification provisions might be helpful in representations involving opinion letters — for example, providing a legal opinion on behalf of a lessor, which is to be given to and relied on by the lessee.  The lawyer would be benefitted by being able to seek indemnification from the lessor client against later claims by the lessee.

Few state ethics committees seem to have addressed the issue of third-party indemnification.  But the New York State Bar Association, in a 2013 opinion, has approved the concept in the context of opinion letters.  And a 2005 Oregon opinion advised that a lawyer asked to investigate a client’s employee could seek indemnity from the client against subsequent claims by the employee against the lawyer.

Insurance deductible?  Not so fast

What about using such an indemnification provision to hold a client responsible for the lawyer’s malpractice insurance deductible if the client unsuccessfully sues the lawyer for malpractice?

The Utah committee also considered that question, and concluded that Rule 1.8(h) doesn’t expressly bar that scenario, because “requiring payment for an unsuccessful malpractice claim, on its face, does not limit liability for malpractice.”  But trying to use indemnification to extract payment from the client for your malpractice insurance deductible may be misconduct under other rules, said the committee.  Rule 8.4(d) bars engaging in conduct that is “prejudicial to the administration of justice.”  An agreement that would make a client (or, by then, presumably a former client) responsible for paying your deductible after the client loses a malpractice case against you, could “have a chilling effect on a client’s pursuit of a malpractice claim and would thus be prejudicial to the administration of justice,” the committee advised.

Client communication

In any event, client communication is key.  To say the least, “the average client may not understand what indemnification is or in what specific circumstances it could be applied.”  Sophisticated clients might, but your best bet is clear explanation and understanding.  Model Rule 1.4(b) (“Communication”) requires you to “explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.”

That would seem to apply to the client’s decision to agree to indemnify you for anything.

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Note:  My co-editors and I are thrilled that the ABA Journal has again honored The Law for Lawyers Today as one of its “Web 100,” putting us among the 35 best legal blogs in the U.S.  Read the magazine’s announcement here.  We’re very proud, and we promise to keep bringing you fresh and lively news and comment from “Legal Ethics World.”  Thanks for reading!