With the coronavirus pandemic surging across the US and around the world, my family, along with millions of other Americans, will be sacrificing our usual Thanksgiving celebration in order to stay safe and to help prevent the spread of COVID-19.  If you’re a lawyer who’s in the same boat, I hope that, like me, you still can find things to be thankful for, including your membership in our profession.

I don’t want to sound too much like a Pollyanna, but I continue to find many things about the legal community that make me proud and grateful.  In my own Buckeye State, for instance, more than a thousand lawyers served as poll workers on Election Day.  Nationwide, when the pandemic hit, nurse-attorneys left their offices and helped with front-line care-giving.  And some law-firm competitors teamed up to deliver innovative client service in areas hit hard by the virus.

In past Thanksgiving messages, we’ve pointed out what a privilege it is to be a lawyer and the gratitude that should go along with our status:  for our skill and training; the opportunity to do work with purpose; our ability to change society; the chance to help others and to grow ourselves.

All that continues to be true — and even more so, as our nation has been tested in recent months.  Whatever our political persuasion, we can be grateful that we live in a nation where the rule of law has maintained its grip.

Let’s give thanks for the rule of law and our role as lawyers in upholding it.  And let’s hope that next Thanksgiving we can gather with all our dear ones again.

Needing to adjust the basis of your legal fee mid-stream is a fairly common occurrence.  When a matter becomes more complicated than you originally contemplated,  or for other reasons, the fee agreement you entered into with the client at the beginning may become unworkable before the matter is over.

But renegotiating fees with an existing client is not the same as reaching terms on the original arrangement.  Such adjustments can be considered a “business transaction” with a client — requiring written informed consent under state versions of Model Rule 1.8(a) — and determining when the rule applies is not always straightforward.  A recent opinion from the Fifth Circuit in Wiener, Weiss & Madison v. Fox sheds some light, and warns that failure to comply with Rule 1.8 when required can void a fee agreement.

Show me the money

Rule 1.8(a) prohibits “enter[ing] into a business transaction with a client or knowingly acquir[ing] an ownership, possessory, security or other pecuniary interest adverse to a client” without fulfilling three requirements:

  • the transaction must be fair and reasonable to the client and fully disclosed to the client in writing;
  • the client must be advised in writing that it would be desirable to seek advice on the transaction from “independent legal counsel,” and given a reasonable opportunity to do so;
  • the client must give 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.”

The client in Wiener was in the midst of a messy divorce in Louisiana when a receiver was appointed over the couple’s significant assets, consisting of “state-licensed gaming enterprises.”  After her husband declared bankruptcy, the client hired the Wiener firm, which originally agreed to represent her on an hourly basis, payable from the bankruptcy estate.  A year later, the bankruptcy court approved over $1.2 million in fees to the firm.

With more work to be done, the firm and the client agreed on a contingency fee for the firm’s ongoing representation:  up to a 35 percent interest in the gross proceeds the client might receive for claims against the estate and as an equity owner of the estate.

Three years after that, the bankruptcy court approved a reorganization plan, and the firm informed the client that if she “wanted them to stay on,” she had to “increase the contingency percentage.”  The client signed a new agreement in 2013 upping the contingency fee to 40 percent.

Finally, in 2016, the client received full ownership of the gaming enterprise out of the bankruptcy, and the firm proposed revising the fee arrangement once again — apparently sweetening the deal for the firm and making its fee come solely from distributions of cash or property to the client.

For the first time, the firm recommended that the client seek independent legal advice about whether to execute the new, eleven-page contingency agreement.  The client took that advice, and independent counsel advised against signing the agreement.

The firm eventually sued the client to enforce the contingent fee agreement.  In response, the client asserted that the firm’s claims were barred because the later agreements violated Rule 1.8(a).

The district court disagreed, reasoning that the revised fee agreement was not a “business transaction” under Rule 1.8 because it conveyed only a contingent claim to proceeds of the bankruptcy estate.

Business transaction — or not?

Reversing the district court, the Fifth Circuit agreed with the client, voiding the contingent fee agreements.

The reason for the the business-transaction rule, wrote the court, is to prevent conflicts between the client’s interests and the lawyer’s own financial interests.  “[S]uch potential conflicts are rarely more present than during a contingency fee relationship where the attorney seeks to gain a property interest in the client’s business at the end of the representation.”  It matters not, the court said, that a contingency agreement by its nature provides for a future interest.

The court cited other cases in jurisdictions “from sea to shining sea” to support its decision, as well as the ABA’s Formal Opinion 00-418 (July 7, 2000) (advising that lawyers can invest in clients, including stock in lieu of fees, but must comply with Rule 1.8(a)).

Bottom line for the law firm:  both of its executed fee agreements with the client were void and unenforceable for failure to advise the client to get independent counsel before entering into them.  The court remanded and the firm is now likely consigned to a quantum meruit recovery.  (A motion for rehearing was denied.)

Takeaways and unanswered questions

  • Before renegotiating fees with an existing client, you must consider whether Rule 1.8(a) applies.
  • If a new fee arrangement might advantage you or your firm — either increasing the amount of the potential fee or the certainty of receiving it — you risk having the arrangement voided if Rule 1.8 is not followed.
  • As always, local conditions count.  Consult case law, rules and ethics opinions in the jurisdiction at issue.

This case deals with specific circumstances – an unsophisticated client and substantial economic advantage to the firm from the new agreement.  But the opinion suggests that any new agreement with an existing client can be a “business transaction.”  If so, then:

  • Does Rule 1.8 apply to new matters for existing clients?
  • Does Rule 1.8 apply to fee increases on existing matters?
  • Does it make a difference who the client is?

Again, these answers may vary greatly based upon local rule and precedent.  No matter what, it is important to consider these issues and address them before moving forward.

The plaintiff’s lawyer in a slip-and-fall case got a pandemic-based pass from the Sixth Circuit Court of Appeals last week, avoiding sanctions that the defendant requested after the lawyer misstated the record.  The lawyer had based the plaintiff’s appeal argument on an unsigned interrogatory answer that appeared only in a draft.

But the court in its opinion said that although the conduct was improper, it would exercise its discretion and not impose sanctions.  The conduct was “concerning,” said the court, but it would give the lawyer the “benefit of the doubt” absent bad faith, because Michigan’s COVID-19 stay-at-home order was in effect when the lawyer filed the appeal on behalf of the plaintiff, “which may have limited her attorney’s access to the record.”  (The court did not recommend its opinion for publication.)

Evidence “not part of the record at all”

The district court had granted summary judgment in favor of the defendant department store on the plaintiff’s injury claim.  On appeal, her lawyer’s central argument was that the court  below ignored evidence that the store had posted “Wet Floor” warning signs near where the plaintiff had fallen.

However, the argument was based solely on an unsigned draft interrogatory answer that mentioned the signs — but that never became part of the record below.  The only evidence of record was the signed final version of the interrogatory answers, which did not mention the warning signs.

The lawyer was aware of the discrepancy because the defendant’s counsel brought it to his attention during a deposition.  Nonetheless, the lawyer “quoted the unsigned, draft version” in the plaintiff’s briefing in the district court and “perpetuated that error on appeal,” although the unsigned draft “was nowhere else to be found in the record.”

After the department store brought the mistake to light again on appeal, the lawyer “doubled down,” wrote the court, “insisting that [the court] should now expand the record and reverse based on an unsigned interrogatory that the district court had no authority to consider.”

Exercise of judicial discretion in a pandemic

Despite this conduct, the court declined to sanction the lawyer under Federal Appellate Rule 38 (“Frivolous Appeal”) or 28 U.S.C. § 1912 (“Damages and costs on affirmance”).   While sanctions are appropriate under 28 U.S.C. §1927 for lawyer conduct that “falls short” of the obligations owed to the court and causes expense to the opposing party, the court wrote, “We appreciate that these are trying times.”

The imposition of sanctions for frivolous conduct on appeal is discretionary, and although the lawyer’s actions “might have been unprofessional and serous enough to meet the standard for imposing sanctions,” the court chose not to do so, citing the lack of bad faith and the Michigan stay-at-home order that in the court’s view could have limited the lawyer’s access to the record.  Under the circumstances, the lawyer did not present the kind of “truly egregious” misconduct that would justify sanctions, the court wrote.

Don’t try this at (stay-at) home

We recently posted about a New York ethics opinion permitting lawyers to withdraw from representation based on their fear of COVID-19 infection.  Courts are likewise grappling with lawyer-conduct issues raised or affected by the corona virus, and we are sure to see more such instances.  While the lawyer here avoided sanctions, the court noted that the lawyer’s “obstinance makes the case … close.”  It goes without saying that the evidence you cite on appeal must actually be in the record.  The court here truly extended a COVID-19 lifeline.

Hat tip to Prof. Doron Kalir, of Cleveland-Marshall College of Law, who called this opinion to my attention.

Legal malpractice plaintiffs fended off motions to dismiss for lack of personal jurisdiction in two separate cases, in two different jurisdictions, under opinions that happened to be filed on the same day last week.  The opinions, from a New Jersey state appeals court and a North Carolina federal district court, stand as a warning to lawyers:  in a later malpractice suit against you, your conduct in the underlying case can be viewed as “purposeful availment,” potentially creating personal jurisdiction over you and forcing you to defend yourself away from your home court.

Mississippi lawyer haled into New Jersey court

The New Jersey case involved a Mississippi lawyer who was engaged in the underlying medical-license revocation case by a New Jersey physician.  The Mississippi lawyer was admitted pro hac vice in New Jersey federal district court and prepared numerous pleadings that were filed in the underlying case there by New Jersey-admitted local counsel.  Although the lawyer never physically came to the Garden State in connection with the underlying case, he participated in at least one telephone conference with the district court judge.

The totality of these circumstances, the state court of appeals held, was sufficient to constitute purposeful availment of the privilege of conducting activities in New Jersey, thus meeting the minimum-contacts requirement necessary for the court to exercise jurisdiction over the lawyer.

The lawyer argued, among other things, that the malpractice plaintiff failed to establish purposeful availment because the plaintiff solicited the lawyer’s representation, not vice versa.  In affirming the trial court’s denial of the malpractice plaintiff’s motion to dismiss for lack of personal jurisdiction, the appeals court rejected that argument, writing that “while solicitation in the forum state may demonstrate purposeful availment, the lack of solicitation is but one factor to consider in deciding whether an out-of-state attorney purposely availed himself of the forum state’s jurisdiction.”

New Jersey lawyer haled into North Carolina court 

In North Carolina, the district court came to the same basic conclusion as the New Jersey appeals court, under some different facts.  There, a North Carolina client retained a firm with offices in Pennsylvania, New York and New Jersey to defend against claims asserted against the client in the underlying trade secrets case in Pennsylvania district court.  The lawyer who handled the case day to day lived and was licensed in New Jersey.  After a four-year long battle, the client lost at a bench trial, and later sued for malpractice in North Carolina.

Accepting a magistrate judge’s recommendation, and noting a split in the Fourth Circuit, the district court denied the lawyer’s motion to dismiss for lack of personal jurisdiction.  Like the New Jersey state court of appeals, the North Carolina district court considered the purposeful availment factor and found it satisfied, including based on counsel’s four years of “extensive” communications with the North Carolina client, and the fact that the representation included hiring local North Carolina counsel, who provided “substantial and ongoing assistance in the [underlying] litigation.”

Although representing an out-of-state client is not alone sufficient to establish purposeful availment of the privilege of conducting activities in the forum state, the court wrote, the entire course of dealing satisfied the requirement.  Especially salient was the action of engaging North Carolina local counsel:  in doing so, the lawyer and his firm “plainly reached into North Carolina to conduct their business.”  They also defended numerous depositions in the underlying case in North Carolina, the court noted.

Spotlight on jurisdiction

These two opinions, coincidentally released on the same day, spotlight the purposeful availment requirement and how your conduct in underlying litigation away from your home turf or simply in representing out-of-state clients in your home court can meet it.

One noteworthy aspect of both opinions is that each gave at least a nod to the due-process requirement that being compelled to defend in a foreign jurisdiction be consistent with “fair play.”  But as the New Jersey appeals court put it, “Having to defend oneself in a foreign jurisdiction will almost always entail some measure of inconvenience, and the burden only becomes meaningful where defendants can demonstrate some special or unusual burden.”

A good ALR article collects the cases, including some that, based on particular facts and factors, hold differently from the two issued last week.  See Marjorie Shields, Annot., In Personam Jurisdiction, under Long-Arm Statute, over Nonresident Attorney in Legal Malpractice Action, 78 ALR 6th 151 (2012).

Can you ethically withdraw from representing a client if you fear contracting COVID-19 as a result of some aspect of the representation?  Earlier this month, the New York State Bar Association issued an ethics opinion that said “Yes,” provided that the lawyer gets any necessary permission from a tribunal.  While advisory for New York lawyers only, the brief opinion has a straightforward analysis that other jurisdictions could adopt.

“Mental or physical condition”

The inquiry that the NYSBA committee considered came from a lawyer representing a client in immigration court proceedings, where the court did not yet have any COVID-19 safety protocols in place, but was nonetheless scheduling in-person appearances.  The lawyer was “concerned that appearing in person presents a substantial health risk for the inquirer and, by extension, the inquirer’s family.”

New York’s Rule 1.16(c)(9), on withdrawal, differs from the ABA Model Rule.  The New York Rule permits withdrawal when “the lawyer’s mental or physical condition renders it difficult for the lawyer to carry out the representation effectively.”  In contrast, Model Rule 1.16(a)(2) mandates withdrawal when ” the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client,” but contains no permissive off-ramp that is similar to New York’s.

The NYSBA committee, applying the Empire State’s more flexible rule, identified several examples of how the inquirer’s fear of iinfection could possibly undermine the effectiveness of the representation:

  • reluctance to spend time in person with the client sufficient to understand the case and communicate the client’s options;
  • willingness to “consent prematurely” to some outcome in order to end the proceeding faster;
  • hastening to complete the tribunal’s required in-person hearing in order to limit potential viral exposure, perhaps without calling witnesses or maybe waiving cross-examination.

Any of these influences to which the inquirer would be susceptible, said the committee, would satisfy the standard for permissive withdrawal.  As always, the committee emphasized, if a tribunal requires permission for withdrawal, the lawyer must seek it.

Realistic concern

How realistic is the concern expressed by the inquirer in this ethics opinion?  Commentary out of New Jersey last week reported on a 68-year-old lawyer who attended a then-required in-person immigration hearing in June, contracted COVID-19 and died — and the lawyer’s successor counsel, who was required to be together with the client at a subsequent virtual proceeding, also contracted COVID, along with the lawyer’s spouse.

Unlike the situation presented by the NYSBA inquirer, many hearings are now virtual, and it would seem exceptional at this point for a courthouse not to have COVID-protection protocols in place.  But concerns clearly remain.

ABA, others, also weigh in

In April, as the first U.S. wave of COVID-19 was making itself felt, the ABA pointed to its previous 2018 opinion on lawyering in a “disaster,” and particularly the requirement that a lawyer withdraw if a mental or physical health concern “materially impairs” the ability to represent the client.  (We also commented on the “disaster-lawyering” opinion.)

Other jurisdictions (e.g., Florida, Indiana, Oregon,, Utah) have also at least considered the withdrawal issue in light of the pandemic (particularly if the lawyer should become ill), though without putting out ethics opinions.

And at least one other jurisdiction — California — has a variation on the “difficult representation” language that, effective June 1, 2020, actually mandates withdrawal if a California “lawyer’s mental or physical condition renders it unreasonably difficult to carry out the representation effectively.”

In addition, of course, Model Rule 1.16(b)(7) (and analogous rules in in other jurisdictions), is a catch-all provision permitting withdrawal if “other good cause for withdrawal exists.”

Take-aways

Would the NYSBA committee have decided the same way if the court involved would have had good COVID-protection protocols at the time of the inquiry?  Perhaps, but not necessarily.  The situation is fluid, and as a “third wave” of infections appears to be gripping the U.S., this could be a developing area.

As always, your own jurisdiction’s rules and ethics opinions control, but you should keep the withdrawal principles in mind if you find yourself in fear of infection.

Are you a snow bird?  Do you or one of your partners have a second home in Florida?  Many do, and it’s long been a source of anxiety that working remotely from that home might be a problem.  After all, many of those doing client work while in the Sunshine State are not licensed to practice there, and the unauthorized practice of law is a criminal offense in Florida.

As technology (not to mention the pandemic) has made remote work easier and far more common (even for those without a second home), concerns over unauthorized practice have increased.  (See our past discussion here.)  Now comes some good news for those who were worried (if they were even thinking about it).

Last week the Florida State Bar Standing Committee on the Unlicensed Practice of Law released an advisory opinion on the issue.  The opinion is a preliminary interpretation and isn’t a final court action, but if finalized will provide some comfort.

Work from your bedroom?

The Committee examined a question from an IP attorney licensed in and practicing at a New Jersey firm, who wanted to know if he was permitted to do work for his clients while in the bedroom of his Florida house.  The answer could well have been skewed by his work being limited to IP, given that Florida (and the U.S, Supreme Court) recognizes an exception to unauthorized practice rules for IP attorneys because it deals exclusively with federal law.

However, the opinion appears to endorse practice by most anyone.  It said that the facts “quite simply, do not implicate the unlicensed practice of law in Florida.  Petitioner is not practicing Florida law or providing legal services for Florida residents.  Nor is he or his law firm holding out to the public as having a Florida presence.”  “All indicia point to Petitioner’s practice of law as being in New Jersey, not in Florida. …[S]ince there is no attempt by Petitioner or his firm to create a public presence in Florida, Petitioner does not have a presence in Florida for the practice of law.  … Because Petitioner is not providing legal services to Florida clients, no Floridians are being harmed by Petitioner’s activity and there are no interests of Floridians that need to be protected by this Court.”

The Committee also found the testimony of a Florida-licensed attorney “to be particularly persuasive.”  She said that, “the future, if not the present, will involve more and more attorneys … working remotely, whether from second homes or a primary residence.  Technology has enabled this to occur, and this flexibility can contribute to an improved work/life balance.  It is not a practice to discourage.”

No unlicensed practice

Relying on the testimony and the rationale of a recent opinion from Utah, the Committee concluded that an attorney who simply establishes a residence in Florida and continues to provide legal work to out-of-state clients from a private Florida residence under these circumstances “does not establish a regular presence in Florida for the practice of law.  Consequently, … it would not be the unlicensed practice of law for Petitioner, a Florida domiciliary employed by a New Jersey law firm (having no place of business or office in Florida), to work remotely from his Florida home solely on matters that concern federal intellectual property rights (and not Florida law) and without having or creating a public presence or profile in Florida as an attorney.”

Sleep well.

The blogosphere lit up last week with news that a Florida state court bail hearing for an accused Twitter hacker had been disrupted by a pornographic Zoom-bomb that highjacked the proceedings and beamed sexual images onto viewers screens. (Some coverage here and here, but don’t worry, no pictures.) The seventeen-year-old defendant is accused of hacking into the accounts of prominent figures like Barack Obama, Jeff Bezos and Elon Musk, and posting messages soliciting Bitcoin donations. He has pled not guilty. His lawyer was arguing to reduce his $750,000 bail when bombers took over the hearing with loud music and then raunchy pictures.

Since the COVID-19 pandemic ignited the online meeting boom, I’ve followed stories like this with special interest. First, my younger son is a cybersecurity engineer.  Avoiding his snark means trying extra hard to use good online hygiene.  But second, I attended a bar-association-sponsored webinar in April that was bombed — and the experience was unpleasant.  Time seemed to stand still as the hacker first broadcast loud sounds, then took over the screen to scrawl images, and finally beamed in lewd photos, while the meeting organizer scrambled to oust the intruder.   The ironic subject matter of the webinar?  Best practices in organizing online meetings.

Real best practices

In the legal ethics course I teach at my alma mater as an adjunct prof, I tell my students that Model Rule 1.1, “Competence,” is the first rule in the rulebook for a reason:  executing perfectly on all of our other ethics duties doesn’t mean much if we don’t deliver competent services.  And as of this writing, some 38 jurisdictions have adopted into their own lawyer conduct rules comment [8] of Model Rule 1.1, which provides that “”to maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology…”  (The godfather of legal blogging, Bob Ambrogi, keeps a running tally over at LawSites.)

So what are some best practices to keep Zoom-bombing at bay?  The Florida hearing fiasco was likely not Zoom’s fault; the platform scurried to enhance security after becoming a go-to resource this spring, instituting fixes for early-identified security issues.  But knowing your way around any platform’s security features and actually using them — or delegating that task to someone competent to do it for you — is the key to carrying out your duty of competence in this brave new world.

Here are some security tips that the sadder-but-wiser organizer provided after the hacked meeting I attended:

  • Require registration and require the host to approve all the registrations manually.  Allowing automatic registration approval can let phantom and pretextual users.
  • Close registrations after the meeting begins.  (There’s a check-box for that when you set up the meeting.)
  • Set the meeting to NOT allow anyone to share a screen unless the host gives specific permission.
  • Ditto for allowing people to annotate a shared screen — require host permission.
  • Set the meeting to NOT allow participants to chat with the entire group, but only hosts and co-hosts.  If you are hosting, plan to moderate the chat.

In addition, you should ensure you are running the most current version of the on-line platform you’ve chosen (Duh), and if you are using Zoom and inviting the public, consider using a webinar format, rather than a meeting format.  Here’s a link to Zoom’s security page, but despite Zoom’s uber-popularity there are of course other providers with their own security measures and tips.

Bottom line:  Be smart, be competent, and don’t get bombed.

A New York district court judge last month disqualified a firm representing hundreds of 401(k) plan participants based on a conflict of interest.  The judge called the risks posed “endless,” and requested additional briefing on whether the firm would be allowed to remain as counsel in related arbitration proceedings in Missouri.  The ruling spotlights the sometimes-thorny conflict issues that can arise in ERISA litigation.

Litigation in the Empire State; arbitration in the Show-Me State

Several related actions are pending in the Southern District of New York centering on the plan and its administration.  In two of the actions, The Klamann Law Firm represented profit-sharing plan participants who alleged ERISA violations based on several breaches of fiduciary duty against the participants’ employer, the trust investment manager and the plan advisory committee along with the advisory committee’s individual members.

At the same time, in Missouri, The Klamann Law Firm was representing a number of claimants, including three individual former members of the plan advisory committee, in arbitration proceedings against the employer and the trust investment manager.  Claimants’ claims in the arbitration were nearly identical to the litigation claims asserted in the two New York district court cases.

The defendants in the district court cases moved to disqualify The Klamann Law Firm, asserting that in suing the plan advisory committee and its individual members, the firm was essentially suing its own clients, raising a disqualifying current-client conflict of interest.

The district court agreed.

“Broad discretion”

Citing its broad discretion to invoke the “drastic remedy” of disqualification whenever a lawyer’s conduct “tends to taint the underlying trial,” the district court noted that the Second Circuit considers adverse representation of current clients improper per se.  The burden is on the lawyer to show that there will be no actual or apparent conflict in loyalty or “diminution in the vigor of [the lawyer’s] representation.”

The court noted that claims in the New York District court complaints made it “evident” that plaintiffs intended to sue both the employer and the plan advisory committee for fiduciary breaches committed while two and possibly all three of the individual members were on the committee — the same members The Klamann Firm was representing as claimants in the Missouri arbitration.

“The risks posed by this scenario are endless,” the court wrote, brushing away plaintiffs’ arguments.  The court rejected contentions that the DQ motion was merely a “strategic tool,” and that the law firm’s clients would suffer undue prejudice from its disqualification.

The court was harsh in discussing the contention that the district court complaints should be read to allege claims only for conduct after the three advisory committee members had left the committee.  To the court, that raised the possibility that the firm was “improperly” seeking to “limit the scope” of the assertions in the district court complaints “simply to preclude liability against [the] arbitration clients.”   It is not possible, the court wrote, to “amend[] a complaint to erase the appearance of concurrent representation.”

Take-aways

Some key take-aways from this disqualification opinion:

  • Like many federal courts ruling on disqualification motions, the court here said it would look to state disciplinary rules, but that they “merely provide general guidance,” and that a violation of a lawyer conduct rule will not necessarily spell disqualification.
  • Although the court did not cite it, the relevant rule here is New York’s version of Model Rule 1.7, which provides that a conflict of interest exists when a lawyer concurrently represents clients with “differing interests,” even when the matters are unrelated.
  • Under many circumstances, a current-client conflict is waivable if each client gives informed consent.  Timing is everything, however.  Here, the firm said it had obtained consent of its clients — but only too late, wrote the court.  Consent “needed to be obtained prior to … undertaking representation of adverse interests, not in response to a motion to disqualify.”

The National Association of Plan Administrators has commented on a “spate” of ERISA litigation that includes claims against plan advisory committees and their members, and has called for better member education about the risks, including potential personal liability.  The conflict issues that arise for lawyers demand equal attention and caution.

*This post originally appeared in ERISA Litigation.

We’ve written a lot over the past six years about the Rules of Professional Conduct, and for good reason.  The lawyer conduct rules represent a floor:  when your conduct sinks below the floor, you can merit professional discipline.  But there are other norms and mores in our legal community, namely standards of professionalism.  As the Preamble of the Model Rules notes, the Rules “do not, … exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules.”

Without providing a basis for discipline; norms of professionalism nonetheless express a common understanding within the legal community about how a “professional” lawyer acts and the ideals that lawyers should aspire to uphold.

Last week, the Sixth Circuit Court of Appeals provided a good lesson on the value of professionalism as applied to briefs submitted to the court.  In an  opinion recommended for publication, the court affirmed dismissal of a Clayton Antitrust Act complaint based on plaintiffs’ lack of standing, and in the process called plaintiffs’ counsel to task for numerous over-the-top insults directed at the opposing parties in briefs.

The court cited some examples of statements in briefs that plaintiffs’ counsel filed, including that:

  • one defendant “surrendered to [a co-defendant], much in the manner Marshal Petain surrendered France to Adolph Hitler.”;
  • two co-defendants are “intertwined in an incestuous relationship, the likes of which have not been seen since the days of Sodom and Gomorrah.”;
  • a defendant was possibly “affixing its buzzard-like grin” on the region “ready to ravenously pounce upon the medical facilities in these areas like the buzzard swoops down upon the carcass of a dead cow.”;
  • an individual defendant who had stuttered during a television interview was compared to “Porky Pig, a famous Warner Brothers cartoon character, [who] also stuttered.”

This language (and more) in plaintiffs’ filed briefs prompted Judge Amul R. Thapar, writing for the Court of Appeals, to note that “there are good reasons not to disparage your opponent, especially in court filings.  The reasons include civility; the near-certainty that overstatement will only push the reader away …; and that, even where the record supports an extreme modifier, the better practice is usually to lay out the facts and let the court reach its own conclusions.”

After rejecting each of plaintiffs’ arguments in favor of standing, the court concluded by writing, “[We] take a moment to remind plaintiffs’ counsel that, as an officer of the court, he is expected to treat other parties in the case (as well as their counsel) with courtesy and professionalism.  Careful research and cogent reasoning, not aspersions, are the proper tools of our trade…. Counsel will best serve his clients if he remembers this going forward.”

I sit on my state supreme court’s Commission on Professionalism, so this is a subject I think about quite a bit.  Many states have similar bodies devoted to promoting behaviors and attitudes that go above mere adherence to the Rules of Professional Conduct, and many have adopted statements on professional ideals, as the supreme court in my Buckeye State has.

Litigators in particular should view Judge Thapar’s opinion as words to the wise.

If you’re a litigator, you may have already experienced the brave new world of remote videoconference depositions.  If you haven’t yet you will, and when you do, you may have to think about what opportunities for misconduct arise when you aren’t in the room with the witness.  If you’re not there to watch, can the other side get away with coaching the witness via emails or texts during the depo?  No ethical opposing counsel would do such a thing, but …

So how far can you go to ensure that no monkey-business occurs?  Last week, a New York federal judge drew the line when a plaintiff asked her to require deponents to screen-share their computer monitors during the deposition so counsel could see if they were getting any messages from defense counsel.  The judge denied that request, but she did order other guardrails to address plaintiff’s concerns.

Witness coaching would “never be seen”

The plaintiff, a fired King & Spaulding lawyer representing himself against his former firm, requested that two third-party witnesses — his former colleagues — be ordered to share their computer screens throughout their examinations.  The plaintiff argued that screen-sharing was needed to “discourage” and “if necessary, to make observable for the record” potential impermissible communications from counsel to the witnesses.

The district court’s Local Rule 30.4 bars private conferences between deponents and their lawyers while a question is pending.  Requiring the deponents to provide a recording or screen-share of their monitors while on the record, the plaintiff asserted, would merely give effect to the local rule in the videoconference-deposition setting.

The plaintiff also argued for the sharing based on previous occasions when he claimed opposing counsel had tried to suggest answers to other deponents by words or gestures.  He said that at a remote deposition, the risk was that “e.g., emails and instant messages sent to the witness’s computer mid-testimony, could never be seen by anyone else,” leading to undetectable misconduct.

In a short rejoinder, counsel for King & Spaulding said that the request to “surveil” the deponents’ screens to monitor for surreptitious communications was unwarranted and unduly intrusive.  “As officers of this Court,” counsel wrote, they “will abide by [Rule 30.4] and that should be enough for Plaintiff.”

Remote depo guardrails set

In a memo order endorsed and attached to plaintiff’s request, the court agreed with King & Spaulding’s counsel.  Nothing in Rule 30.4 requires the examiner to be allowed to monitor the witness’s communications, the court ruled.  And while it could nonetheless impose such a requirement, there was no indication, said the court, that defense counsel would not abide by the Local Rule or the court’s order.

The court did order counsel for King & Spaulding to give plaintiff prior notice before engaging in any private communication with a deponent, and also that, for the duration of the depositions, the deponents must:

  • close all Internet browsers, messaging applications, email programs, “or any other Internet page or computer program that would enable the receipt or initiation of an electronic communication” other than the platform used for the deposition; and
  • close any other applications that would generate any pop-up notices or windows on their screens.

Be honest now…

Every jurisdiction has adopted some form of Model Rule 8.4(c), which bars lawyers from engaging in dishonesty, fraud, deceit and misrepresentation.  It’s no stretch to say that a lawyer who secretly texts a witness during a deposition in order to suggest answers is not on the right side of that rule.  And, as in this case, local rules of practice will contribute to any analysis.

Faced with the inevitability of at least some remote depositions for the foreseeable future, you might want to consider the kinds of stipulations that the parties here entered into regarding the technological and other parameters, as well as the limits the court set on the deponents’ communications during the deposition.