Competence

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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?

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.

Some answers are so obvious that you are left wondering why the question needed to be asked in the first place. Like “should a client pay a fee it agreed to in advance?”  Or, “should an attorney try his or her best to prevail?”

And now this:  the ABA’s Standing Committee on Ethics and Professional Responsibility issued an advisory opinion earlier this month instructing lawyers who suffer a data breach that exposes “material client information” to notify clients of the breach and take additional measures to protect the confidentiality of the compromised information.  Obvious?  We think so.

When we advise clients about their data protection obligations, we often suggest that compliance is strengthened when data security strategies align with an organization’s culture. For law firms, this should be relatively easy:  lawyers learn (we hope in law school) that they have an ethical obligation under Model Rule 1.6 to preserve the confidentiality of their clients’ information.  In today’s world, that surely means that the lawyer and her firm should take appropriate measures to protect the information from cyber thieves and other threats to the security and confidentiality of a client’s confidential information.

Likewise, our duty of communication (Model Rule 1.4), coupled with our confidentiality obligations, should make it a no-brainer that when a breach occurs, the affected clients should be told.

Nevertheless, in its Formal Opinion 483 the Committee devotes 16 pages to state and support this conclusion. (Interestingly, the Committee primarily relies on rules dealing with competent representation and technological aptitude, and only secondarily refers to the duty of confidentiality.)  The opinion does contain instruction that, while hardly novel or visionary, provides sound advice:

  • A firm should implement technological and other measures to detect intrusions into its data systems;
  • A firm should develop, implement and test a data incident response plan. As we’re fond of saying, the time for a pilot to learn how to deal with catastrophic engine failure is not when the plane is hurtling to the ground from 30,000 feet.
  • The firm should promptly take measures to restore the affected systems and close the breach. (Don’t just stand by and do nothing!)
  • The firm should, alone or in concert with skilled cyber forensics professionals, determine how and why the breach occurred. (Again, don’t just scratch your head.)
  • The firm should notify current clients whose data are compromised. Oddly, the Committee stated that it is “unwilling” to impose that obligation with regard to former clients.
  • The opinion provides guidance on what the client notification should contain. Importantly, the opinion reminds lawyers that they may have additional notification obligations under federal and state data breach notification laws that apply, yes, even to lawyers.

 

Opinion 483 provides useful, if obvious, direction on our duties in response to a data breach. It hardly lays out a truly comprehensive set of best practices for safeguarding client information, but it does point in the right direction.

Picture this:   You’re travelling across U.S. borders, heading home from a client meeting abroad.  However, unlike other trips, this time a Customs and Border Protection agent requests that you unlock and hand over for inspection your computer and cell phone — full of client confidential information.  You’ve been concerned about this issue, and so you’ve had your IT department encrypt all of the sensitive data on your devices.  Will that protect you client’s information from disclosure?

Ethics duties at the border

We wrote here last year about the ethics issues with border searches of e-devices, including the New York City Bar Association’s July 2017 opinion on how to deal with the duty of confidentiality in that scenario.

The NYCBA ethics committee advised that you may of course ethically comply with lawful government orders, but also that you should not comply “unless and until” you “undertake reasonable efforts to dissuade border agents from reviewing clients’ confidential information or to persuade them to limit the extent of their review.”

The concern about this issue was heightened by a sharp uptick in border searches of e-devices.  Customs officers searched an estimated 30,200 cellphones, computers and other electronic devices of people entering and leaving the U.S. last year — an almost 60 percent increase from 2016, according to Homeland Security Department data.

Most recently, in January 2018, the CBP revised Directive No. 3340-049, which includes procedures for searching information subject to attorney-client privilege.  Section 5.2 calls for segregating privileged material to ensure that it is “handled appropriately.”

Encryption – it’s no panacea

What about encrypting the client information on your e-device to make sure it stays confidential and won’t be revealed during a potential border search? That approach may be of limited use.

Section 5.3.3 of the revised CBP directive provides that if border officers can’t inspect your device “because it is protected by a passcode or encryption,” they may detain it and convey it (or a copy of its contents) to third parties who can supply “technical assistance.”

This is an indirect reference to the various U.S. intelligence agencies that are authorized pursuant to Section 2.6 of Executive Order 12333 to provide technical support and assistance to the CBP.  This aid may be derived from the National Security Agency, which leads the federal government in cryptology, or from the National Media Exploitation Center which consists of representatives from multiple intelligence agencies that are  responsible for decrypting, translating and analyzing documents and electronic devices in the federal government’s possession.

If CBP officers seek to decrypt and access the confidential information on your device, they likely have the authority and the technical resources, through federal intelligence agencies, to do so.

The magnitude of the risk, and what to do

Even though the 5,000 devices searched in February last year sounds like a lot, it’s only a tiny percentage according to CBP’s Office of Public Affairs. The agency says that in FY 2017, only about .007 percent of arriving international travelers screened and processed by CBP officers were required to submit to an e-device search.  That possibly points to a low risk for any one lawyer who might be returning from international travel.

But given the breadth of your ethics duty, and the limits on the ability of encryption to protect confidential client information on your devices, it would be a best practice to heed the advice that the NYCBA gave last year:

  • Depending on the circumstances, including the sensitivity of the information, you should consider not carrying any client confidential information across the border.
  • Rather than exposing your client’s information to disclosure in a search, you should securely back up client information and cross the border only with a blank “burner” phone or laptop.
  • And before coming back across the border, you should also turn off syncing of cloud services, sign out of web-based services, and/or uninstall applications providing local or remote access to confidential information.

Lawyers and their firms should consider incorporating these measures into their data security policies and practices. It’s what the times, and your ethics duties, would seem to call for.

In the aftermath of Hurricane Florence, which last month dumped up to 35 inches of rain on parts of the Carolinas, Virginia and Maryland, caused 48 deaths, and up to $22 billion in property damage, comes a timely new ABA opinion about our ethical obligations related to disasters.

The hurricane did not spare lawyers and law firms.  Ahead of the 1,000-year storm, Law360.com reported that firms in Florence’s projected path shuttered offices, activated contingency plans, and were glad if their firm systems and client data were stored in the cloud.  (Subscribers can access the story here.)  (And doing the profession proud, volunteer lawyers manned hot-lines to help storm victims get needed legal services.)

But what are our actual disaster-related ethics duties?

Communication, withdrawal, files and more

Disasters happen; that’s a fact of life.  The entire 13-page Opinion 482 (Sept. 19. 2018) repays reading.  Some highlights and nitty-gritty advice from the opinion:

  • Model Rule 1.4 requires us to communicate with our clients.  To be able to reach clients following a disaster, the opinion says, you should maintain or be able to quickly recreate, lists of current clients and their contact information.
  • You “must evaluate in advance storing files electronically” so that you can have access to those files via Internet or smart device, if such are available after a disaster.
  • If you can continue to provide services in the disaster area, you continue to have the same ethics duties as before; but in an emergency, you may be able to provide advice outside your area of expertise, as allowed by comment [3] to Rule 1.1 (“Competence”).  (We’ve previously written here about “emergency lawyering.”)
  • If you’re a litigator, check with courts and bar associations to see if deadlines have been extended across the board.
  • You “must take reasonable steps in the event of a disaster to ensure access to funds” you are holding in trust, the opinion advises.  Of course, your obligations will vary depending on the circumstances.  If you know of an impending disaster, you should determine if you should reasonably transfer client funds to an account that will be accessible; or even attempt to complete imminent transactions before the disaster hits, “if practicable.”
  • You may need to withdraw after a disaster, under Rule 1.16 (“Withdrawal”) and Rule 1.3 (“Diligence”), if a client needs immediate legal services that you will be unable to timely provide.
  • If client files are destroyed, your duty of communication will require you to notify current and former clients about the loss of client property with “intrinsic value.”  But there is no duty, the opinion concludes, to notify either current or former clients about the loss of documents that have no intrinsic value, for which there are electronic copies, or that serve no current useful purpose.
  • To prevent the loss of important records, “lawyers should maintain an electronic copy of important documents in an off-site location that is updated regularly.”

Disaster Prep 101:

The ABA has a committee devoted solely to the topic of disaster preparedness, and its website has helpful resources and tips on everything from getting insurance, to types and methods of information retention, and how you can assess damage and rebuild after a disaster strikes your practice.  The committee’s 44-page Surviving a Disaster — A Lawyer’s Guide (Aug. 2011) is also helpful.

And remember, calamitous disasters aren’t confined to weather, war, and the like.  A disastrous health event can leave your practice reeling, especially if you are a solo or in a small firm.  As we’ve pointed out before, one’s own death and disability are not pleasant to think about, but choosing a profession in which we owe fiduciary duties to others requires us to make contingency plans, like those laid out in my home bar association’s “What-If Preparedness” program.

In all events, thinking about the unthinkable is part of what we do.

In a warning to semi-retired lawyers and others, the Sixth Circuit Court of Appeals earlier this month affirmed a 90-day suspension for a lawyer who let others draft and sign his name to deficient  pleadings, saying that “a lawyer’s good name and professional reputation are his primary stock in trade, an asset to be cultivated and safeguarded throughout his career — even after ceasing the active practice of law.”

“One size fits all” briefs

The case started out in a Michigan district court, which found that briefs filed under the lawyer’s name from 2012-2015 in multiple social security benefits cases were “woefully deficient both as to the quality of the briefs and the management and monitoring of the appeal process on behalf of clients.”  The briefs sometimes had little to do with the facts of the particular case in which they were filed; the district court hearing panel, in its opinion, called them “one size fits all” briefs.

The panel found that in the process of retiring from the firm in which he was a senior partner, and withdrawing from actively practicing, the lawyer authorized his firm for a period of some years to continue submitting district court filings in his name in numerous social security benefits appeals as though he were attorney of record.  But he didn’t review these filings, or supervise the lawyers who actually prepared them.  Rather, his participation was simply a “façade” to help the firm.  (In fact, said the panel, the firm’s social security practice was essentially run by a secretary.)

The panel described how once a brief was filed in the district court, no further work would be done on a social security appeal.  Neither the lawyer whose name was used nor any other lawyer at the firm saw the opposing party’s brief, no lawyer submitted any type of response, and none ever saw a report and recommendation or a final decision.

In this process, the clients obviously got short shrift.  The panel described at least one of them as having been “abandoned.”

Duty to supervise, duty of candor

In its panel opinion, the district court said that the lawyer violated Michigan’s versions of Model Rule 5.1 (duty to supervise subordinate lawyers) by not supervising preparation of briefs that were submitted using his signature and his filing credentials; and Rule 3.3 (candor to the tribunal), by authorizing submission of briefs bearing his name – thus falsely representing that he had reviewed or monitored their preparation.

The district court panel recommended a 90-day suspension; as one of the aggravating factors, the panel noted that the lawyer had a “selfish motive” in lending his name to the appeals, since it helped keep the firm profitable, and his retirement benefits flowing.

The Sixth Circuit adopted the panel’s findings and recommendations.  It wrote that “this case presents a sad example of a decent lawyer, who in the autumn of a successful career, became careless in permitting the use of his name for improper purposes and needlessly brought dishonor to himself, his firm, the profession and the justice system.”

Takeaways…

First, whether you’re winding down your practice or in your prime, it’s clearly risky to let anyone use your name to sign court filings you don’t have control over, even if it’s someone at your firm.

Second, and maybe not so well-known, is that your state’s disciplinary authority is not the only body that can mete out professional discipline.  The federal district courts have inherent power to regulate the conduct of the lawyers who appear before them; they usually have their own disciplinary procedures laid out in their local rules; and by local rule, the district court usually adopts the lawyer conduct rules of the jurisdiction as the ones that govern.

And last, the lawyer here came under extra criticism for his “continuing resistance to this disciplinary action and stubborn refusal to acknowledge his leading role in the failings.”  If you  ever find yourself in the disciplinary cross-hairs, don’t do that — it will seldom help your cause.

Does the new year have you thinking about taking on work in a new practice area?  Maybe business in your accustomed area is slowing, and you’re considering shifting gears.  If so, beware of dabbling in areas where you don’t have the requisite knowledge and skill to provide competent representation to your client.

The ethical duty of competence — Model Rule 1.1 — is the first rule in the rule book for a reason:  without competence, fulfilling your other ethical duties is meaningless.  A couple of recent cautionary tales shine a light on how lawyers can get it wrong.

Step carefully into specialized areas

One way lawyers get in trouble is in overestimating their ability to deal with the ins and outs of a specialized area that they may not be familiar with.

That might have been the problem in a recent District of Columbia Court of Appeals case.  The lawyer represented the client in post-conviction and immigration proceedings.  The client was at risk for deportation on the premise that he had been convicted of an “aggravated felony” as defined under the federal immigration statute.

The lawyer made several missteps in trying to forestall the client’s removal.  Initially, he petitioned the state circuit court to vacate the conviction and guilty plea, based on the mistaken claim that the court had failed to advise the client about the potential immigration consequences of the conviction.  Then, the lawyer dismissed the petition, conceded removability before the immigration court, and did not try to challenge or delay the client’s deportation on any other ground.

Ultimately, the client got new counsel, who successfully argued against removal on the ground that the burglary offense he was convicted of was not an “aggravated felony” within the meaning of the immigration statute.  That appears to be something that a practitioner in the immigration area might have known, but which might not have occurred to someone not well-versed in the specialized world of immigration law.

The lawyer admitted to violating D.C.’s version of Rule 1.1, and was suspended for 30 days with one year probation.  The probation conditions included the requirement that he join an immigration lawyers’ association and attend 10 hours of CLE pertaining to immigration law.

Get help when needed

Another danger is trying to go it alone, and failing to get help when needed.  When you don’t know how to proceed, talk to a colleague; call the bar association to identify the head of a committee or section in the relevant area; reach out to the relevant lawyers’ group; look for resources on-line — just don’t isolate yourself.

Help like that might have aided a Louisiana lawyer who acknowledged that his primary area of expertise was criminal law.  He accepted representation in a civil case involving a school’s discipline of a student, and proceeded to file suit against the wrong parties.  The court extended time to cure the problem, but the lawyer didn’t amend the petition or file anything else in the case.

In its opinion suspending the lawyer for a year and a day, the Louisiana Supreme Court noted that the lawyer did not appear to understand the complexities of civil law practice and procedure.  He acknowledged that he didn’t properly research the case law for this type of claim and filed suit against the wrong parties.

Keep calm and learn on…

None of this means that you can’t move into new areas or deal with issues that are initially unfamiliar to you.  As comment [2] to Rule 1.1 explains, “the most fundamental legal skill consists of determining what kind of legal problems a situation may involve, a skill that necessarily transcends any particular specialized knowledge.”

Be assured, says the comment, that you can “provide adequate representation in a wholly novel field through necessary study” — you just have to recognize what you don’t know, and come up to speed on it.

Greetings 2018!  Time for some ethics trend predictions to kick off the Year of the Dog (according to the Chinese zodiac).  Let it be a year in which you doggedly pursue ethical practice (ouch).  No more bad puns — here’s what’s hot as we begin the year:

Law firm cyber-security

No surprise here that the top trend is data security.  It’s one of the “chief concerns” of GC’s, and for good reason:  It’s not if, but when, a firm is going to experience a cyber-attack.  The latest ABA report says that 22 percent of law firms of all sizes were hit with a data breach in 2017, up from 14 percent in 2016; several of the biggest firms experienced attacks and various kinds of disruption in the past couple years.  But small and medium-size firms are just as vulnerable, say the data.  Of course, lawyers have an ethical duty under Model Rule 1.6(c) to take reasonable steps to safeguard the confidentiality of client data.  Ethics rules also require lawyers to have the technological competence to recognize and address the problem.  (See comment [8] to Rule 1.1.)  Trending:  More clients are insisting that firms establish data security policies and procedures.

The “Uber” effect – on-line service providers and other tech disruptors

Just as Uber disrupted an entire market segment with its ride-hailing model, on-line businesses like Avvo and LegalZoom have taken aim at legal services and how they are marketed.  But these on-line types of business raise legal ethics issues, including fee-splitting, handling client funds and professional independence.  (Excellent summary is here.)  Some innovative models, like the traffic-ticket-fighting site TIKD, are under fire for potential antitrust violations and the unauthorized practice of law.  And will consumers soon be taking their legal problems to chatbots?  Will legal teams soon be using artificial intelligence to analyze complaints and generate document drafts?  Trending:  State ethics regulators have come down against Avvo-like platforms, but they are still thriving.  How will the legal industry adapt?  (Hint:  Watch the progress of the ABA’s consideration of a revamp of the Model Rules on lawyer marketing and advertising, aimed at “bringing them into the 21st century” and reported here, in the Professional Responsibility Blog.)

Gender bias and sexual harassment in the profession

The ABA adopted Model Rule 8.4(g) in 2016, barring lawyers from engaging in harassing or discriminatory conduct; states are now considering whether to adopt the rule into their own lawyer conduct codes.  (Box score as of 8/1/17:  1 aye, 1 nay, many studying; and some commentators raise First Amendment concerns.)  But 40 percent of women in the profession report that they have been subjected to harassment and discrimination; and there have been several high-profile discrimination and pay-equity claims against prominent national firms and individuals.  The judiciary has been hit as well, with a prominent federal judge apologizing and retiring abruptly after sexual harassment allegations; and 695 law professors and former clerks are now petitioning Chief Justice John Roberts, seeking revision of judicial employee guides and support for reporting misconduct.  Trending:  Women in the profession are adding their voices to #metoo.

Lawyer health and wellness — mental and physical

Finally, we’d be remiss, in our first post of 2018, if we didn’t mention the personal aspect of lawyering:  keeping yourself safe and sane.  As a profession, more of us fight alcoholism, substance abuse, depression and anxiety than the general population, and those trends start developing in law school.  The statistics are alarming.  Trending:  a hopeful resolve, via a new, comprehensive ABA report, to come to grips with these systemic issues.  If you made a New Year’s resolution to stop drinking or drugging, or to address mental health issues that are affecting your legal practice, every state has a lawyer assistance organization to help you.  We’ve linked to the ABA’s state-by-state listing before; but here it is again.  If it helps one person, there’s no such thing as posting it too often.

Happy New Year.

 

If the clerk of courts e-mails you an order that your client must pay $1 million in attorney fees to the opposing party, but your spam filter catches the e-mail and then deletes it after 30 days without alerting you, and you therefore fail to appeal the order in time — well, your client may be out of luck, as a Florida court of appeals ruled recently.  (There is a motion for rehearing pending.)

Spam canned?

The ruling thus far is a cautionary tale and shines a light on some ethics duties as they might apply to your process for handling and keeping on top of spam e-mail — especially the duties of diligence (Model Rule 1.3) and competence (Model Rule 1.1, and see cmt. 8 on technology).

The facts:  Company sued Utility Authority, and Company won.  Company’s Lawyer moved for attorney fees, and after more than a year, the trial court granted them — reportedly as high as $1 million.  It’s worth noting that during the time that his client’s fee motion was pending, Company’s Lawyer had the firm’s paralegal check the court’s on-line docket every three weeks for a ruling.

When the court finally issued the ruling, the clerk e-mailed it to all counsel.  Technology experts who later testified said that the e-mail server at the Utility Authority’s Lawyer’s firm received the e-mail. But the firm’s e-mail filtering system was configured to drop and permanently delete e-mails perceived to be spam without further alert.

Apparently that’s what happened to the e-mailed attorney-fee order.  After 30 days passed without the fee award being paid (i.e. after the time to appeal the order had run), Company’s lawyers contacted opposing counsel.

No relief

The Utility Authority moved for relief from the judgment, arguing that its lawyers didn’t receive the order in time to file an appeal.  The trial court rejected the argument, and the court of appeals agreed:  this was not “mistake, inadvertence, surprise or excusable neglect,” it held.  The Utility Authority’s Lawyer’s firm did receive the order — the equivalent, the court of appeals said, of placing a physical copy of the order in a mailbox.  The e-mail just went right to spam, from where it apparently was deleted without further notice.

At the hearing on the motion, the law firm’s former IT consultant testified that he advised against that configuration; the firm rejected the advice, as well as advice to get a third-party vendor to handle spam filtering, and advice to get an online backup system that would have cost $700-1200 per year.  Financial considerations played a part in these decisions, the court found.

The decision to use this filtering configuration despite warning was a conscious decision to use “a defective e-mail system without any safeguards or oversight in order to save money.  Such a decision cannot constitute excusable neglect,” said the court of appeals.

Adding further sting, the court noted the Company’s Lawyer had a paralegal regularly check the court’s online docket during the long pendency of the fee motion.  If the Utility Company’s Lawyer had done something similar, the court said, he would have received notice of the fee order in time to appeal.  “The neglect” of that duty “was not excusable.”

Spam:  not tasty but good to check

The harsh result here may yet be ameliorated if the court of appeals grants rehearing.  In the meantime, however, the scary scenario points to the need to pay attention to your firm’s  technology and processes for handling spam.  And old-fashioned procedures like checking the court’s docket can also help avoid an unpalatable spam situation.

The ACLU and the Electronic Frontier Foundation have sued the Department of Homeland Security to block U.S. Customs and Border Protection personnel from searching travelers’ electronic devices without warrants.  This has implications for lawyers who cross in and out of the U.S. with phones and laptops  containing confidential client information.  The CBP’s policy, which the ABA also has questioned, currently authorizes such searches even without a suspicion of wrongdoing.

We first wrote about the issue last month, when the New York City Bar Association published an ethics opinion raising the client confidentiality issues and advising that in some circumstances lawyers should consider using “burner” phones, and avoid taking client confidential information across borders.

The ACLU and EFF’s lawsuit, in Massachusetts district court, alleges violations of the First and Fourth Amendments on behalf of 11 plaintiffs whose electronic devices were searched as they reentered the U.S.  None were subsequently accused of any wrongdoing.

The plaintiffs include journalists, students, an artist, a NASA engineer and a business owner — but no lawyers.  Despite the absence of lawyers from the roster of plaintiffs, the client confidentiality issues are obvious, and have received a lot of notice.  See here for the New York Times story on the lawsuit, and here and here for commentary on the N.Y. City bar ethics opinion.

I’d be interested in hearing whether lawyers have personal experience with border searches of their electronic devices.

Stay tuned for additional developments on this issue.