Bad ethics opinion or the worst ethics opinion? Rhode Island 2017-02

I have perused a lot of ethics opinions over the years.  Whether a kind of scenario presents a conflict is a frequent subject of ethics opinions.  I don’t think I’ve read many that address whether a particular conflict of interest is fairly treated as a consentable conflict, however.  Having now read Rhode Island Ethics Advisory Panel Op. 2017-02, which does address that topic, I wish it hadn’t.

It is an extremely short opinion, but it gets a remarkable amount wrong in a limited amount of space.

The short version of the question it tackles is:

ISSUE PRESENTED

The inquiring attorney asks whether the law firm may represent the buyer and the seller, two current clients of the firm, in the sale of a division of the seller’s business to the buyer.

The additional factual details that you need, at minimum, to begin to wrap your head around the astoundingly bad conclusion reached in the opinion are:

  • The buyer is a manager of a division of the seller’s business.
  • The buyer will now be purchasing assets of that division from the seller.
  • The buyer will then also have to work out a lease arrangement with the seller for the premises where the division currently operates.
  • The buyer has been represented by one attorney in the firm on a number of matters unrelated to this business – that attorney has no relationship with the seller or any knowledge of work done for the seller by his/her firm.
  • The seller has been represented by a different attorney in the firm on a number of matters, including matters related to the operation of the seller’s business  – that attorney has no relationship with the buyer or any knowledge of work done for the buyer by his/her firm.
  • Both the buyer and the seller want the firm to represent them as to negotiations and drafting of necessary documents.
  • The firm, if it moves forward, intends to erect an ethics wall/screen (i.e. locked drawers for hard copy materials and limits on electronic access to files) as to the two matters so that there would be no flow of confidential information between the two sides of the proposed representation.

On those facts, the Rhode Island opinion reaches a conclusion that the conflict is so severe that the clients cannot be allowed to give their consent to it.  Now, maybe I have left out the facts that the ethics opinion treats as apparently the most important of all – the distinction between the experience level of the seller and the buyer:

The inquiring attorney states that the seller is experienced in business, including the ownership, purchase, and sale of businesses.  He/she states that the buyer is sophisticated in the industry of the division, but has never owned, purchased, or sold a business.

Well, there you go.  The seller is super sophisticated whereas the buyer is just merely sophisticated.  Seriously.

And, no there is nothing unique or unusual about Rhode Island’s version of RPC 1.7 that would explain the conclusion that this conflict is not consentable.  Rhode Island’s RPC 1.7(b) looks just like the ABA Model version, as it reads:

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2) the representation is not prohibited by law;

(3)  the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.

On the facts set out above, the Rhode Island opinion concludes that there is no way that each lawyer could “reasonably believe that they will be able to provide competent and diligent representation to the buyer and to the seller in this business transaction.”

And, if that weren’t problematic enough (it is), the opinion also does further disservice to readers with its discussion of screening, stating:

The Rules of Professional Conduct permit screening in only three situations, none of which is presented in the facts of this inquiry: screening for lateral hires under Rule 1.10, screening for former government officers and employees under Rule 1.11, and screening for former judges, arbitrators and mediators under Rule 1.12.

The omission of the modifier “nonconsensual” before screening in that quote is an important one.

It’s important because it means that the Rhode Island opinion writers either failed to understand altogether, or simply chose to ignore, the difference between aspects of the ethics rules that permit a firm to erect a “nonconsensual screen” to address a conflict even over a client’s or former client’s objection and the constant ability of a firm to erect a consensual screen if it is part of what is deemed necessary or desirable in order for one or more clients to agree to give informed consent to waive a conflict.

On the whole, this is just an astoundingly poor ethics opinion and one that reaches a result that rings contrary to the client-friendly position that I’m certain the authors thought they were taking.

What not to do when opposing counsel dies.

Awful things seem to be afoot today.  So let’s talk about an awful thing.

Earlier this week I sort of criticized a federal judge in Mississippi for trying too hard to find something nice to say about a lawyer who was having to be disqualified for dropping a client like a hot potato when the Court called the lawyer’s actions in not delving too far into the new client’s case without first terminating the existing client relationship “commendable.”

That seemed overly generous to me, as I explained in that post about at tuber of elevated temperature here.

But perhaps it is all a matter of what sort of lawyer conduct you compare it to because if you compare that lawyer’s behavior to the behavior of the Tennessee lawyers necessitating this post, the Mississippi lawyer’s conduct does seem commendable.

Here is s link to the Shao v HCA order entered by a Tennessee circuit court judge in Nashville reprimanding lawyers for what is really, truly pretty vile litigation behavior.  I’ll just pull from the opinion because Judge Brothers says it pretty succinctly (for context, the motions being referenced below are the plaintiff’s motion for default judgment, defendants’ motion for extension of time to file an answer, and defendants’ motion for extending time to respond to discovery):

These motions are unfortunately clouded by the untimely and unexpected death of Michael Geracioti, who was counsel of record for these defendants.  Mr. Geracioti died in the early morning hourse of March 16, 2017, and one of his associates, Linda Natheson, advised counsel for plaintiff of his passing.  On that same day, at 12:48 pm, counsel for plaintiff, Brian Cummings, sent an email to Ms. Nathenson expressing his condolences and alerting her to outstanding items due in several cases.  Three hours and ten minutes later, at 3:38 pm, counsel for plaintiff filed the instant Motion for Default Judgment.  Four days later, on March 20, 2017, plaintiff’s counsel, Brian Manookian, sent a letter to Ms. Nathenson threatening to assert a claim of $8,000,000.00 against her clients, her law firm, and the estate of Mr. Geracioti.

This Court is profoundly disappointed in the conduct of plaintiff’s counsel and the timing and manner in which the Motion for Default was presented.  Being a zealous advocate does not mean that one abandons all sense of professionalism, courtesy and common decency.  It is clear that counsel for plaintiff was attempting to gain a tactical advantage by aggressively pursuing the claim for default on the very day of Mr. Geracioti’s death; despite the fact that all parties had been actively engaged in pretrial proceedings and plaintiff’s counsel never complained after striking the original motion.  Such behavior operates as an estoppel to the current claims of prejudice.

It is with regret that this Court must reprimand all of plaintiff’s counsel for conduct that is unbecoming members of the Bar and officers of the court.  Hopefully counsel will apply this constructively and thereby avoid such reprehensible behavior in the future.

Hopefully.

I’ve written it before that a lot of jams lawyers get themselves are avoidable by trying to stick to the principal of Don’t.Be.An.Ass.  This is another one of those situations and, as a reminder of how that rule is entirely reconcilable as Judge Brothers’ hints with being a zealous advocate, here are the words of Comment [1] to RPC 1.3 explains:

 A lawyer must also act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client’s behalf.  A lawyer is not bound, however, to press for every advantage that might be realized for a client.

Comment [3] to that same rule further explains:

A lawyer’s duty to act with reasonable promptness, however, does not preclude the lawyer from agreeing to a reasonable request for a postponement that will not prejudice the lawyer’s client.

Now, I understand that the litigation at issue appears from the caption to be a wrongful death lawsuit, and it is certainly possible that these lawyers’ client was the primary force pushing for these actions, but you would hope that most lawyers would have the ability to explain to a client pushing for such actions that the repercussions of an order such as this from the judge overseeing their suit is far more prejudicial to their case than simply not pursuing such tactics would have been.

As a matter of fact, yes, this potato is still hot. Why do you ask?

In October of this year, I’ll have the honor of again getting to serve as a moderator for a panel discussion at Aon’s Law Firm Symposium.  This year’s event will take place in D.C.  The topic of the panel I get to be a part of will be something of a DQ motion boot camp.  It is still months away, my guess is that we will be focusing on aspects of disqualification motion proceedings that will be harder to predict than the outcome of this case out of Mississippi should have been.

If you know a little something about conflicts, then you are probably have passing familiarity with all of the core concepts necessary to immediately predict the outcome of the scenario that was involved in McLain v. Allstate decided in the S.D. Miss.  I’ll succinctly describe the scenario for you:

Lawyer has had a long term relationship with an insurance company client.  That relationship is not as robust as it used to be as the lawyer is continuing to handle quite a few matters for them but has come to notice that no new matters have been coming from the company for quite a while.  Lawyer is contacted by a potential client who has a matter that would be adverse to this insurance company client.  Lawyer goes ahead and decides to take on the new representation but also terminate the ongoing representation of the insurance company client.  Insurance company brings motion to disqualify, and lawyer argues that insurance company client should be treated as former client and disqualification should occur only if new matter is substantially related to prior matters.

How will lawyer fare?

I have no doubt you answered this correctly.  Not well, the lawyer will not fare well.  The lawyer will get disqualified.  The court will explain that a lawyer cannot drop one client like a “hot potato” in order to transform them into a former client so that you can take on representation of a new client.

Thus, for you Dear Reader, almost all of the contents of the seven-page order disqualifying this lawyer will come as no surprise.

What might come as a surprise to you – it certainly surprised me — is that the federal judge who ordered disqualification actually included a sentence praising the lawyer involved for how he handled the situation. Specifically:

[Lawyer] undertook commendable efforts to insulate himself from a conflict of interest by declining to discuss or investigate McLain’s claims until after [Lawyer] promptly and formally terminated the firm’s relationship with Allstate.

I know people often accuse me of being stingy in terms of doling out praise, but that sentence just leaps off the page as trying too hard to find something nice to say.  Commendable seems a stretch.  Particularly so given that when you work your way back earlier in the opinion itself where it lays out the chronology of events, you will find that the lawyer in question had the new client sign a contract with his firm on October 11, 2016 and, then, on October 12, 2016 sent the letter that attempted to drop Allstate like a tuber of elevated-temperature.

If any aspect of the lawyer’s effort is commendable (and I’m still stretching the utility of the word itself), it would be the whole not-being-very-Machiavellian about it angle.  A truly Machiavellian type would have done more to attempt to manipulate the timeline of events.  Perhaps, having the new client execute an engagement letter, only after the lawyer had time to send the letter to terminate the current client relationship.  I’m not sure that not doing that qualifies as “commendable” exactly.  But it’s something.  As long as it was very close in time, the potato would still be hot and the outcome unchanged, but … like I said it would be something.

A tale as old as time.

Stop me if you’ve heard this one … it’s about a lawyer getting into trouble for overbilling … where there are examples of the lawyer even trying to claim to have billed more than 24 hours in a day.

You probably stopped me somewhere in there because you have heard it before.  The legal profession is filled with people who bill their time fastidiously and honestly.  The legal profession also has among its ranks some folks who don’t.  A West Virginia lawyer subjected to a two-year suspension from practice is among the “don’t” and, remarkably, almost got a much lesser suspension, in part, simply because he was not among the worst overbillers that a West Virginia agency – Public Defender Services – was dealing with.

That context is actually part of what makes this particular incident really worth writing about because it is another unfortunate example of discipline for overbilling coming up in a context where some people can often try to argue it away as being somehow more understandable — lawyers who are trying to make a living off of court-appointed work at unfairly low hourly rates.  The problem, of course, is that not only is that still not a particularly good excuse for deceptive billing practices but it also is counter-productive to how much more difficult it makes it for people who want to advocate for better compensation arrangements for such lawyers to gain traction.

I tend to think the frequency with which lawyers get caught for over-billing in connection with court-appointed work isn’t necessarily a matter of those lawyers being more prone to doing so as much as it is that they are more prone to getting caught because there is effectively one “client” able to see all of their time records and, literally, do the math that the clients of lawyers in private practice serving a variety of clients aren’t as readily positioned to do.

Overbilling was not the only ethical flaw of the West Virginia lawyer made the subject of this 40-page opinion of the West Virginia Supreme Court of Appeals — interestingly enough his other problems involved missing deadlines and neglecting client matters and even includes an interesting side excursion into his suffering from low testosterone which manages to make the inflated billable numbers from prior years seem even more . . . nope, I’m not going to go for blue humor.  At least not today.

For those who don’t want to read a 40-page opinion about this kind of conduct, just a few of the highlights in terms of both the egregious nature of the billing practice and the really pretty remarkable testimony about how he stacked up compared to other lawyers in terms of Cooke-ing the books (We know while I may shrink at going blue I always rise to the opportunity for word play.)

First, here are the lawyer’s overbilling highlights uncovered by the Executive Director of West Virginia’s Public Defender Services:

  • “found to have exceeded fifteen billable hours a day on thirty-one dates from mid-January, 2014 to mid-September, 2014.” (NB: the lawyer’s claimed low testosterone problems were stated to be during and around August 2014 and the West Virginia court most certainly paid attention to that time line to point out that it was interesting that he claimed to be sleeping 10 to 16 hours a day when he couldn’t meet certain deadlines so that, at most, during the relevant time period he couldn’t bill more than 8 to 14 hours a day.)
  • “on four dates he submitted vouchers for twenty-three or greater billable hours and on two dates he submitted vouchers for greater than twenty-four hours” (including billing 27 hours on December 26)
  • “billed 2,568.5 hours, 2,279.3 hours, 2,671.2 hours, and 3,259.46 hours for the years 2011-2014, respectively. These billable hours equate to an average daily billable rate of 7 hours, 6.2 hours, 7.3 hours, and 8.9 hours, for 365 days.”
  • “rarely billed activity at less than .2 hours (12 minutes); the only .1 (6 minutes) entries are attempted phone calls and, occasionally, a hearing. Review of any and all documentation or correspondence, including email, is billed at a minimum .2 hours. Virtually every hearing entails billing .3 hours for “waiting in court,” which affords a higher hourly rate.”
  • “On April 17, based on Cooke’s accounting of his time utilizing his schedule and the court’s docket, in the two-hour window from 1:00 p.m. until a 3:00 meeting at the jail, he billed a cumulative 4.3 hours of “actual time”; the activity billed all consisted of travel, waiting in court, and attending hearings. Similarly, on August 18, Cooke’s incourt schedule shows hearings at 9:00, 9:30, and 10:30 with the docket resuming at 1:00. The matters which were scheduled in the three-hour window from 9:00 a.m. until noon, were billed at a cumulative 6.1 hours. Additionally, matters beginning at 1:15 p.m. on that date were billed at additional 7.2 hours and consisted solely of waiting in court, reviewing “court summaries” while waiting, and attending hearings.”
  • when first called on to explain certain aspects of his billing, he said he couldn’t do so because Public Defender Services hadn’t provided him the information he needed and ” his own time-keeping system would not permit him to retrieve that information.”

As to the chilling notion that this lawyer was not as bad as others, the Executive Director testified:

I still hold firm that we were billed for duplicate—we were billed several times for the same trip, that we were billed several times from the same period of waiting in court. In other words, if he had three hearings, let’s say he waited in 17 court for one hearing while he was actually doing another hearing. That’s not properly [sic] billing. That’s billing the same period of time. So I firmly believe that that had happened, but in looking through the vouchers and everything else, it appeared to be less frequent than I had seen with other counsel. 25 The only perceived fraud or deception that still exists in my mind is the fact that he may have been value billing, that is, billing a .2 for an activity that should’ve only been a .1 or a .4 when it should’ve been a .2. However, he wasn’t billing me 3.0 for these things and he was—and he was saying 12 minutes as opposed to 240 minutes. . . . I just did not see in his case the overt deception that existed with many other attorneys. . . . He was unable to exonerate himself completely in this situation because he had failed to comply with that time requirement, but that, overall, I believe that he was zealously representing his clients and he was providing the actual services that were described even though the time allotted to them may have been—may not have been the actual time.

and he also:

gave the example of one attorney who “rubber-stamped” the same time for each day and one attorney who billed 900 hours of travel in a three-month period.

As a way of further bolstering the problem this creates for those working hard to try to get better, fairer hourly rate reimbursements in place, the Executive Director of the West Virginia program also:

explained that PDS is paying $25 million a year to court-appointed counsel that are, in his opinion, undercompensated at $45/hour for “out of court” time and $65/hour for “in court” time.14 He indicated that when requesting an hourly increase at the Legislature he was typically confronted with the fact that many attorneys were making greater than $100,000.00 a year in court-appointed work and that the legislators took a dim view of an hourly rate increase when, in their opinion, the court-appointed attorneys had given themselves a “raise” by overbilling.

Well, anyway, get back to work I guess.

Virginia’s revised lawyer advertising rules – big win for APRL’s effort to streamline the advertising rules

[In the interest of full disclosure for those who might be new here, I am presently a member of the Board of Directors of the Association of Professional Responsibility Lawyers (APRL).]

For those who aren’t new here, you know full well my personal opinion on lawyer advertising and what the ethics rules should and should not try to do in terms of regulation.

Unsurprisingly then, I was pleased to learn of Virginia’s decision to adopt new lawyer advertising rules effective July 1, 2017 and to learn that they largely do the kinds of things that APRL has been advocating should be the approach to these issues through proposed revisions to the ABA Model Rules.

You can go read the order entered by the Supreme Court of Virginia earlier this week that lays out the full text of what will now be its only rules in the 7.1 through 7.5 series, Rules 7.1 and 7.3 and accompanying Comments that will become effective July 1, 2017, but here are a few highlights:

  • Rule 7.1 will read in its entirety: “A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.  A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”
  • Rule 7.2 has been deleted and instead any issues that it used to address are now addressed, if at all, in paragraphs of the Comment to Rule 7.1.
  • One such Comment to Rule 7.1, [2], explicitly acknowledges that the right kind of disclaimer can cure something that might otherwise be argued to be “a statement that is likely to create unjustified expectations or otherwise mislead the public.”
  • Another such Comment to Rule 7.1,, [4], explicitly acknowledges that someone could be a “specialist in a particular field of law by experience,” and that such a person can communicate that specialty as long it is not done in a way that is “false or misleading.”
  • Rule 7.3 addresses all aspects of targeted solicitations and also addresses the prohibitions on providing payment or things of value to someone for a recommendation or referral.
  • As to solicitation, Rule 7.3 makes clear that it applies only to communications that are “initiated” on the lawyer’s end.  And, appears to not attempt to prohibit in-person or real-time solicitation of clients.
  • Instead, it limits its outright prohibition on solicitation to situations where the solicitation is directed to someone who has made known to the lawyer they don’t want to be solicited or when the solicitation “involves harassment, undue influence, coercion, duress, compulsion, intimidation, threats or unwarranted promises of benefits.”
  • It does contain a provision requiring an “ADVERTISING MATERIAL” disclaimer on “written, recorded or electronic solicitation[s]” but not if they are addressed to the universe of folks ABA Model Rule 7.3 has traditionally excluded from the in-person/real-time ban (other lawyers, family members, prior professional relationships, etc.)
  • Rules 7.4 and 7.5 are deleted altogether.

Kudos to the Virginia State Bar, the Supreme Court of Virginia.  One state down, 49 more (plus D.C.) to go.

Ohio Opinion 2017-1: Too much and too little at the same time

An opinion worthy of discussion was issued in Ohio back in February 2017  but I didn’t stumble across it until this past week.  (A tweet by ALAS got it onto my radar screen.)

Advisory Opinion 2017-1 from the Ohio Board of Professional Conduct addresses advertisement of contingent fee arrangements and, in particular, it addresses the following question:

Whether it is proper for a lawyer who advertises to use statements such as “No fee without recovery” or “You pay no fee unless you win” or “There’s no charge unless we win your case” or “You pay us only when we win.”

The opinion focuses only on the distinction in a contingent fee arrangement between fees and repayment of advanced expenses and, as a result, offers the same answer to all of the examples – no.  Now even on the opinions own terms – focusing only on the distinction between expenses and fees, I disagree that all of those should get a “no” answer, but I also think that the Ohio opinion missed an opportunity to evaluate an even more significant question about these kind of statements that has always hit me as potentially problematic.

First, as the opinion explains all of these statements must be run through the filter of RPC 7.1 and a determination has to be made about whether they are false or misleading.  The Ohio opinion concludes that all of the variations of statements tackled are “inherently false or misleading” because they “omit reference to the client’s responsibility for expenses and costs” and thereby “impl[y] that the client will not be required to pay litigation costs, regardless of the outcome of the litigation..”

On one level, I think that goes too far in terms of a harsh result for the two of the four examined statements that plainly speak in terms of “fees.”  To say that those are inherently misleading is a conclusion with which I just disagree.

On another level though, I think this opinion doesn’t go far enough because it fails to address a more legitimate question of how such advertisements can be misleading.

In my opinion, three of the four statements have a problem but it is because of the use of “win” as the conditional event triggering payment of fees.  A client who pursues a contingent fee case and has a serious injury but ends up settling their case for a small amount, let’s pick $30,000 as a random amount, might very well not consider their lawyer to have “won” their case.  For me, the statement that ought to be the exemplar for use is the first one “No fee without recovery.”  And the second one ought to be acceptable if it were to say “You pay no fee unless we recover for you.”  Maybe each of those statements would be even better if “attorney” came before “fee” but I think that’s the path where a consumer is more likely to feel misled or deceived by such an advertisement rather than on the basis that there is an implication about expenses if a lawyer only speaks in the advertisement in terms of fees.

A glimpse into the world of consumer-facing legal services providers

Yesterday, I had the pleasure of serving as a moderator at a CLE event in Nashville focused on developments in the world of consumer-facing legal services providers.  There are a world of companies – predominantly existing only online — that have an increasing presence in the lives of people in need of legal services and answers to their legal questions who, often otherwise, would not reach out directly to a lawyer to try to obtain help for their problems.

The full event was a 3 hour long seminar covering several topics, but the panel I moderated encompassed an hour of conversation with Bob Aicher of ZeekBeek, Matt Horn from Legal Services Link, and Dan Lear from Avvo.

Now, if you are reading this, you’re likely already familiar with the various aspects of Avvo’s footprint in the marketplace.  You may not know as much, however, about ZeekBeek or Legal Services Link.

In some ways, they do quite similar things but the approach is different.  Both operate as an online platform through which people in need of legal services can connect with lawyers who are willing to provide services.  ZeekBeek partners exclusively with state bar associations and, thus, in those states comes across as an entity that has the imprimatur of the state regulatory body and also — for a fee — provides its participating lawyers within a state a different platform for making referrals of work to other lawyers.  Legal Services Link monetizes its provision of a market place for consumers to ask questions and obtain legal advice and representation from participating lawyers by allowing lawyers to view questions for free but requiring lawyers who want to interact with the consumer by replying and answering their inquiries to pay an annual membership fee for that privilege.

While each of the three representatives had differing views on the topic of whether they versus those they compete with are able to do what they do in a way that the participating lawyers can be assured of compliance with the ethics rules, it was very interesting (though not surprising) to hear all three of them agree that the ethics rules that relate to their services are desperately in need of change.

It was a very interesting and engaging discussion.  The good news for you, if you are interested in checking it out, is that you can view the entire program by registering/purchasing it at this link from the TBA.  (As of now there is no way to just pay for the middle hour which was the program I moderated, but should that change I will update this post.)

 

Traps for the Unwary – Employer email systems

I like to think I am “warier” than the average attorney.  But a recent attorney-client privilege opinion out of New York was a good reminder that being “wary” can be much like being “woke.”  Even if you think you are, you probably aren’t as much as you think you are, and you can always be a bit more.

I’ve spoken and written in the past about the risk for lawyers’ clients to using an email system provided by an employer to communicate with them but my focus in doing so has largely involved assumptions about ways in which the nature of the representation could be one in which the client wouldn’t actually want to the employer to be able to access the communications.  For example, where the client and the employer would actually have contrary interests.

That type of scenario was the focus of the kind of warning ABA Formal Ethics Opinion 11-459 provided to lawyers who handle employment law matters:

This opinion addresses this question in the following hypothetical situation.
An employee has a computer assigned for her exclusive use in the course of her employment. The company’s written internal policy provides that the company has a right of access to all employees’ computers and e-mail files, including those relating to employees’ personal matters. Notwithstanding this policy, employees sometimes make personal use of their computers, including for the purpose of sending personal e-mail messages from their personal or office e-mail accounts. Recently, the employee retained a lawyer to give advice about a potential claim against her employer. When the lawyer knows or reasonably should know that the employee may use a workplace device or system to communicate with the lawyer, does the lawyer have an ethical duty to warn the employee about the risks this practice entails?

[snip]

The situation in the above hypothetical is a clear example of where failing to warn the client about the risks of e-mailing communications on the employer’s device can harm the client, because the employment dispute would give the employer a significant incentive to access the employee’s workplace e-mail and the employer’s internal policy would provide a justification for doing so. The obligation arises once the lawyer has reason to believe that there is a significant risk that the client will conduct e-mail communications with the lawyer using a workplace computer or other business device or via the employer’s e-mail account. This possibility ordinarily would be known, or reasonably should be known, at the outset of the representation. Given the nature of the representation–an employment dispute–the lawyer is on notice that the employer may search the client’s electronic correspondence. Therefore, the lawyer must ascertain, unless the answer is already obvious, whether there is a significant risk that the client will use a business e-mail address for personal communications or whether the employee’s position entails using an employer’s device.

With hindsight it certainly seems an obvious extension of the same point to be worried that the privilege is in jeopardy even when the underlying matter is not one in which client and the employer are adverse, yet I’ll admit that I was initially surprised to hear about through this (as always) quite good write up in the ABA/BNA Lawyers’ Manual on Professional Conduct and then dig in and read the Peerenboom v. Marvel Entertainment opinion itself (which is remarkable for its brevity) which found that Marvel’s CEO’s emails to his personal attorney on Marvel’s email system could not be shielded from discovery by a third party pursuing litigation against Marvel based on attorney-client privilege.  (Simultaneously also saying that no marital privilege existed either.)

The New York court explained that Marvel’s email policy provided that it “‘owned’ all emails on its system, and that the emails were ‘subject to all Company rules, policies, and conduct statements.’ Marvel ‘reserve[d] the right to audit networks and systems on a periodic basis to ensure [employees’] compliance’ with its email policies. It also ‘reserve[d] the right to access, review, copy and delete any messages or content,’ and ‘to disclose such messages to any party (inside or outside the Company).'”  Based on that, the court considered it easy to conclude that the CEO had no reasonable expectation of privacy in email communications to others using his Marvel email address.

Interestingly, but not surprisingly, the opinion does not reference or discuss in any fashion whether the CEO’s lawyer would still be obligated to treat all of the communications as confidential under the relevant ethics rules in New York(spoiler alert: he would).

Since I’ve got your webcam turned on remotely, show of hands if you’ve 100% of the time been making sure your clients’ email communications with you are only happening on a platform provided by someone other than their employer – like gmail, Yahoo, Bellsouth, or Comcast, or some other personal source of email access.

Yeah, me neither.

It certainly feels like a harsh result — particularly when you stop and think about how much email traffic takes place on email platforms that are company provided to all involved — but it can be a difficult outcome to argue against given the traditional strict construction of the privilege and how readily it can be waived as a result of exposure to anyone who is a stranger to the relationship.

The Peerenboom opinion also serves, however, as a good reminder of just how different the attorney-client privilege and the attorney work-product doctrine are and how differently they are waived.

Given the lack of evidence that Marvel viewed any of Perlmutter’s personal emails, and the lack of evidence of any other actual disclosure to a third party, Perlmutter’s use of Marvel’s email for personal purposes does not, standing alone, constitute a waiver of attorney work product protections (see People v Kozlowski . . .898 N.E.2d 891 . . . .

That point is one I’ve always found easiest to explain to lawyers with reference to another New York case (albeit one in federal court) involving a different very famous brand, Martha Stewart, United States v. Stewart, 287 F. Supp. 2d 461 (S.D.N.Y. 2003).  That was the case in which a New York federal court explained the different ramifications as to privilege waiver versus work product waiver flowing from Martha Stewart sharing her lawyer’s communications with her daughter.  While, because she was a stranger to the attorney-client relationship Stewart had with her lawyer and thus eviscerated the attorney-client privilege, as to work product:

By forwarding the e-mail to a family member, Stewart did not substantially increase the risk that the Government would gain access to materials prepared in anticipation of litigation. Martha Stewart stated in her affidavit that “Alexis is the closest person in the world to me. She is a valued confidante and counselor to me. In sharing the e-mail with her, I knew that she would keep its content strictly confidential.” Martha Stewart Aff. ¶ 6. Alexis Stewart stated that while she did not recall receiving the June 24 e-mail, she “never would have disclosed its contents.” Alexis Stewart Aff. ¶ 2. The disclosure affected neither side’s interests in this litigation: it did not evince an intent on Stewart’s part to relinquish work product immunity for the document, and it did not prejudice the Government by offering Stewart some litigation-based advantage. Accordingly, I hold that Stewart did not waive work product protection over the June 23 and 24 e-mails.

And, it seems fair to say that the more robust ability of the work-product doctrine to withstand waiver in a world in which people use their work email for a lot of things, allow me to echo Ms. Stewart to say.

That’s a good thing.

(In)Famous Attorney Violates the First Rule of Holes

Rules of Holes.  Rule the First.  When you are in one, stop digging.

Now two things worth saying by way of preface, I guess, before further explanation.

First, I’ve dealt with my share of problematic lawyers over the years (so too probably have you), including the type that doesn’t know when to say when, so the subject of this post could theoretically be about lots of lawyers but it happens to be about a lawyer I have certainly never met before.  He is (in)famous though and if you’d like to know more about his background than just what you can glean from the scathing opinion of the Ninth Circuit we’re about to discuss, you could try his Wikipedia page.

Second, I’ve never been denied pro hac vice admission before so I can’t definitively say it would be easy for me to live with such an outcome.  It’s the kind of thing you have to disclose on all sorts of forms for the rest of your legal career, but I’d like to think that I’d navigate the situation better than the story about to be told.

With that out of the way, attorney Larry Klayman, having already been denied pro hac vice admission in federal district court in Nevada and having already unsuccessfully appealed that ruling to the Ninth Circuit (840 F.3d 1034 (9th Cir. 2016)) and having unsuccessfully asked the U.S. Supreme Court to weigh in, is back in the limelight with a new ruling from the Ninth Circuit on March 30, 2017, denying his “emergency” petition for a writ of mandamus to be permitted to represent Cliven Bundy, a pretty infamous character himself.

Literally, one week after the Supreme Court opted not to hear him, Mr. Klayman filed an emergency writ – ostensibly contending that he was speaking for Bundy — saying there were “fundamentally changed circumstances that underscore [his] compelling need to have a full legal defense team, including Klayman, ready and able to represent him at trial.”  The first part of how irregular this would be is immediately explained by the Ninth Circuit as follows:

First, Klayman purports to be representing Bundy in his request for a writ of mandamus,  Bundy has counsel of record, Nevada attorney, Bret O. Whipple.  Whipple, however, did not sign the motion, file an affidavit, or otherwise join in any way Bundy’s latest motion.  Indeed, Bundy, in his reply filed on March 23, explains that his current attorney refused to file a new pro hac vice application on behalf of Klayman because Whipple did not want to “tarnish his reputation.”

That’s kind of a record-scratch moment for most attorneys.  If your local counsel believes that participating in your efforts would tarnish their reputation . . . well, some soul-searching would seem to be in order.

The Ninth Circuit pointed out an additional procedural problem with claiming that there were new emergency circumstances but not first going back to the district court thus recognizing that the writ of mandamus is effectively requesting relief because the district court did not sua sponte decide to change its mind on Klayman’s admission, but then quickly proceeds to the “merits” of the motion in a blistering example of laconic understatement:

So construing Bundy’s motion, and because the district court and government filed answers to the petition, we will proceed to the merits.

There are no merits.

I mean, ouch.  Right?  The Ninth Circuit did go forward though to explain in more detail that none of the three claims of supposed “changed circumstances,” were anything of the sort.

Along the way, the Ninth Circuit said a few further things that, I think, actually do justify focusing on this ruling as being something other than piling on the lawyer at the heart of it.

Among the reasons Klayman offered as being the emergency requiring mandamus was that Bundy’s existing Nevada counsel of record somehow did not have any federal trial experience.  The short version of the Ninth Circuit’s rejoinder to that allegation was:

The assertions made by Bundy about his counsel are demonstrably false.  Either Klayman has failed to ascertain the facts by, for example, talking with Whipple or looking at Whipple’s website, or he has deliberately misled this court.  Neither option paints Klayman in a good light.  At best, Klayman has shown such a casual acquaintance with the facts that he is guilty of at least gross negligence in his representation to this court.

The Ninth Circuit went on to explain succinctly, but positively, the extensive federal criminal experience of Mr. Whipple.  In so doing, it dropped in a footnote one of the points that makes this whole endeavor worth writing about.  A point that lawyers need to bear in mind when they think about the role of technological competence in their practice:

This court had little difficulty confirming most of these facts from Whipple’s website, his LinkedIn account, and PACER. . . .That Klayman, evidently, failed to use the most primitive modern tools to verify his serious accusations that counsel of record was not qualified is inexcusable.

When websites and LinkedIn accounts are referred to by a federal Court of Appeals as among “the most primitive modern tools,” lawyers need to take note about what that can mean for their practice in a variety of respects.

The second point that is worth noting over and above how it relates to Mr. Klayman himself is the interplay between the Sixth Amendment right to counsel and the ability to impose rules on pro hac vice admission.  One member of the Ninth Circuit did dissent from this ruling, on the same grounds for dissent from the prior appeal of the pro hac vice denial – Bundy’s Sixth Amendment right to counsel.  This point is addressed by the Ninth Circuit in a footnote as well and that seems hard to argue with:

We do not evaluate constitutional rights in a vacuum.  Bundy may add whatever counsel he wishes so long as they satisfy Nevada’s minimal pro hac vice rules.  Klayman has not satisfied those rules, so Bundy will have to look to other Nevada-qualified counsel to aid his defense.

 

 

North Carolina – Good intentions leading to a pretty seemingly bad rule.

So North Carolina has got quite a bit going on these days.  Last night UNC won the NCAA Men’s Basketball championship.  A few days ago, its general assembly kind of, sort of, repealed the bathroom bill that brought it much negative publicity and cost it some sporting events.  And, in March 2017, it adopted a first-of-its-kind ethics rule that seeks to require all lawyers — not just prosecutors — to reveal any evidence of the innocence of someone that comes into their possession after the person has been convicted.

Tennessee, I am proud to say, is among the “Sweet Sixteen” of other states that have adopted the ABA Model Rule 3.8(g) and (h) language that imposes this kind of duty upon prosecutors, but North Carolina’s act of going further to say that all attorneys have this obligation — at a mandatory level and when not doing so could somehow lead to discipline — seems very misguided to me.

Now because this is being written on the Internet, and because taking things out of context and ascribing intents and beliefs not intended to things written on the Internet is pretty much a sporting event itself these days, I feel beholden to make the point that — obviously I am not in favor of anyone being convicted of a crime they didn’t commit and I very much count myself in the category of folks who agree with the “it’s better that 10 guilty people be set free than 1 innocent person be imprisoned” line of thinking.  Also, I absolutely think that if an attorney comes across solid evidence that would indicate someone has been convicted of something they didn’t do, then an attorney ought to be encouraged to try to do something about that.

Nevertheless, I am not at all a fan of the idea of constructing an ethics rule that would require a lawyer to do so on pain of discipline.  Not even in the abstract because the architecture of such a rule would have to weigh in the balance too many other ethical obligations a lawyer might have that would compete.  I’m also not a fan of North Carolina’s specific effort to do so — North Carolina RPC 8.6 — which actually does attempt to  balance those competing obligations and in so doing, I think, actually proves the inherent pointlessness of this line of proposed rulemaking.

So, step by step, here is black-letter of North Carolina’s Rule 8.6.  The first paragraph establishes the initial scope of the duty.

(a) Subject to paragraph (b), when a lawyer knows of credible evidence or information, including evidence or information otherwise protected by Rule 1.6, that creates a reasonable likelihood that a defendant did not commit the offense for which the defendant was convicted, the lawyer shall promptly disclose that evidence or information to the prosecutorial authority for the jurisdiction in which the defendant was convicted and to North Carolina Office of Indigent Defense Services or, if appropriate, the federal public defender for the district of conviction.

So, as a starting point, this duty would override obligations of client confidentiality that would otherwise require a lawyer to remain quiet.  But obviously that creates some problems.  So, the next paragraph carves out exceptions to the obligation.

(b) Notwithstanding paragraph (a), a lawyer shall not disclose evidence or information if:

(1) the evidence or information is protected from disclosure by law, court order, or 27 N.C. Admin. Code Ch. 1B §.0129;

(2) disclosure would criminally implicate a current or former client or otherwise substantially prejudice a current or former client’s interests; or

(3) disclosure would violate the attorney-client privilege applicable to communications between the lawyer and a current or former client.

So, the exceptions still do not allow Rule 1.6 concerns to prevent disclosure (unless, I guess, breaching certain 1.6 client confidences would be considered “otherwise substantially prejudic[ing] a current… client’s interests”), but the exceptions to protect the subset of Rule 1.6 communications that would also be protected as attorney-client privilege and protect a lawyer in the event that complying with Rule 8.6(a) would require them to put one of their own clients or former clients in jeopardy of criminal prosecution.  Thus, Rule 8.6(b) essentially makes certain that Rule 8.6(a) will not apply to the most reasonably likely scenarios in which any lawyer who isn’t a prosecutor is going to learn of information indicating that someone has been wrongfully convicted.

The next paragraph, for good measure, also provides the same kind of “good faith”/exercise of professional judgment safeguard in place for private lawyers that Rule 3.8 provides for prosecutors:

(c) A lawyer who in good faith concludes that information is not subject to disclosure under this rule does not violate the rule even if that conclusion is subsequently determined to be erroneous.

The final paragraph then proceeds to make clear that no duty to disclose arises when the lawyer knows that the right people essentially already know.

(d) This rule does not require disclosure if the lawyer knows an appropriate governmental authority, the convicted defendant, or the defendant’s lawyer already possesses the information.

So, in the end, and as Professor Bruce Green is quoted as saying in a few of the news articles about the development, “it carves out so much that it’s hard to known when it will apply.”  I think that’s a kinder way of saying:  Other than whatever encouraging effect it might have on some small set of lawyers who wouldn’t otherwise step up and do the right thing to let authorities know about something if doing so wouldn’t violate their duty to another client or former client, this rule is not really going to accomplish much and is probably largely unenforceable.

And while that encouraging effect might be a laudable goal, pursuing it through this kind of rule seems the wrong way to go about it.  If you are truly going to insist on something like this in a jurisdiction, it would be better pursued as a purely aspirational rule.  We already have one of those with respect to the obligation to do pro bono.