Modern Litigation and Professional Responsibility Handbook: The Limits of Zealous Advocacy

MODERN LITIGATION AND PROFESSIONAL RESPONSIBILITY HANDBOOK MODERN LITIGATION AND PROFESSIONAL RESPONSIBILITY HANDBOOK...

Author: William H. Fortune | Richard H. Underwood | Edward J. Imwinkelried

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MODERN LITIGATION AND PROFESSIONAL RESPONSIBILITY HANDBOOK

MODERN LITIGATION AND PROFESSIONAL RESPONSIBILITY HANDBOOK The Limits of Zealous Advocacy WILLIAM H. FORTUNE Alumni Professor of Law University of Kentucky RICHARDH. UNDERWOOD Professor of Law University of Kentucky EDWARD J. IMWINKELRIED Professor of Law University of California at Davis

~

~

ASPEN LAW & BUSINESS

Aspen Publishers, Inc.

COPYRIGHT © 1996 BY WILLIAM H. FORTUNE, RICHARD H. UNDERWOOD, AND EDWARD J. IMWINKELRIED All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems without permission in writing from the publisher, except by a reviewer who may quote brief passages in a review. Library of Congress Catalog Card No. 96-755591 ISBN: 0-316-88827-3 Second Printing

MV-NY ~ ~

Published by Aspen Law & Business Formerly published by Little, Brown and Company

Printed in the United States of America

To the students and alumni of The University of Kentucky College of Law. -WHF.

To Nathan and to my students, without whom I would be unemployed. -R.H U

To Cindy, Molly, and Kenny.

-E.].1.

In memoriam

Irving Younger (1932-1988) -R. H U) W H F.)andE.]. 1.

Summary of Contents

Contents Preface

IX

xxv

I Proceedings Before Trial 1 2 3 4 5 6

7 8

Conunencing Litigation: Ethics and Accountability Conunencing Litigation: Judicial Sanctions Conflicts of Interest The Advocate-Witness Probfern Investigation Discovery Lawyers, Free Speech, and the Media Trial Tacrics-e-Sorne Opening Moves

II The Trial 9 10 11 12 13

Relations with Jurors Opening Srarernenr The Direct Exarrrirrer The Cross-ExaIniner Closing ArguInent

1

3 39 83 157 189 241 279 297

323 325 345 359 389 413

vii

Sununary of Contents

III Special Problems 14 Special Probferns in CriIDinal Defense 15 Special Probberns in Insurance Defense 16 Special Probderns in Class Actions

447 449 497 539

IV Some Final MaHers 17 18 19 20

viii

567

Negotiation and Sertlernerit Withdrawal Appeal Discipline, the Courts, and Ethics Cornrrritrees

569 589 611

Table of Cases Model Rules of Professional Conduct=eReference Guide Bibliography Index

635 655 657 677

621

Contents

Pnface

xxv

I Proceedings Before Trial

1

Commencing Litigation: Ethics and Accountability

3

§l.l §1.2 §1.3 §1.4 §1.5 §1.6 §1.7

§1.8

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Competence, Diligence, Specialization, and Communication Some Notes Regarding Interviewing and Counseling Duty to the Interviewee Referral Neglect, Burnout, and Impaired Attorneys §1.7.1 Neglect §1.7.2 Burnout §1.7.3 Impaired Attorneys Preventive Law-Avoiding Liability to the Client §1.8.1 Non -engagement and Disengagement

4 5 7 11 14 19 21 21 23 26 27 28

ix

Contents

§1.9 §1.l0 §1.l1

§1.8.2 Calendar Control §1.8.3 The Problem of the Missing Client Countersuits Limitation of Objectives Limitation of Malpractice Liability

28 29 30 34 35

2 Commencing

§2.1

§2.2

§2.3

§2.4

Litigation: Judicial Sanctions

Introduction §2.1.1 Inherent Power §2.1.2 28 U.S.C. §1927 §2.1.3 Introduction to Rule lIThe 1983 and 1993 Versions §2.1.4 The 1993 Amendments to Rule 11 The Requirements of Rule 11 Duty with Respect to the Facts §2.2.1 Duty to Reevaluate §2.2.2 Factual Allegations Duty with Respect to the Law §2.2.3 Improper Purpose §2.2.4 The Motion for Sanctions Responsibility of the Moving Party §2.3.1 The "Safe Harbor" §2.3.2 Provision of 1993 Rule 11 Who May Be Liable for Sanctions §2.3.3 §2.3.4 Procedural Aspects The Appropriate Sanction §2.3.5 Contempt

39 40 40 43 45 49 51 51 56 57 61 63 63 66 67 69 75 78

3 Conflicts of Interest

§3.1 §3.2

x

Introduction Comparison of the Code of Professional Responsibility and the Model Rules

83 84 85

Contents

§3.3 §3.4

§3.5

§3.6

§3.7

§3.8

§3.9

Purposes Served by Rules Prohibiting Conflicts of Interest Preliminary Problems §3.4.1 Identifying the Client §3.4.2 Identifying "Significant Others" §3.4.3 Positional Conflicts §3.4.4 Lawyer Interests Adverse to Client Interests Simultaneous Representation §3.5.1 General §3.5.2 Contemporaneous LitigationRelated and Unrelated Matters §3.5.3 Coparties §3.5.4 More on Corporate Representation Subsequent Representation §3.6.1 General §3.6.2 Substantial Relationship §3.6.3 The Rejected Case §3.6.4 Unrelated Matters §3.6.5 The Demise of the Appearance of Impropriety Standard Duties upon Discovery of a Conflict Disclosure §3.7.1 §3.7.2 Consentability §3.7.3 Withdrawal Imputed or Vicarious Conflicts §3.8.1 General §3.8.2 Law Firms and Affiliates §3.8.3 Entering or Leaving a Firm §3.8.4 Screening Local and Cocounsel §3.8.5 Other Relationships §3.8.6 Disqualification Motions §3.9.1 Mechanics and Tactics §3.9.2 Standing §3.9.3 Work Product of Disqualified Counsel

88 91 91 94 95 97 100 100 101 107 109 110 110 114 117 119 120 122 122 123 125 126 126 127 130 137 140 141 145 145 147 148

xi

Contents

§3.l0 §3.1l

Other Remedies §3.9.4 Appellate Review §3.9.5 §3.9.6 Discipline Conflicts and Malpractice Conflicts Control Systems

148 149 150 150 151

4 The Advocate-Witness

§4.1 §4.2 §4.3 §4.4 §4.5 §4.6 §4.7 §4.8 §4.9 §4.10 §4.11 §4.12 §4.13 §4.14

Problem

Introduction Comparison of the Code of Professional Responsibility and the Model Rules The Attorney Who Is a Potential Witness The Attorney as Counselor or Negotiator The Attorney as Investigator Filing a Disqualification Motion Responses to Disqualification Motions The Hearing-Attorney as Witness for the Client The Hearing-Attorney as Witness Against the Client The Problem Surfaces During Trial Role of the Attorney after Disqualification The Attorney-Witness as Prosecutor The Attorney-Witness as Party Sanctions

157 158 159 162 163 168 171 173 177 181 182 183 184 186 186

5

§5.1 §5.2 §5.3

xii

Investigation

189

Introduction Comparison of the Code of Professional Responsibility and the Model Rules The Misaddressed Fax and the Purloined Letter

190 190 193

Contents

§5.4

Communicating with Represented Parties 198 Contacts with Government Officials When the Governmental Agency Is Represented by Counsel 200 §5.4.2 The "Reno Regulations" 201 §5.4.3 Present Employees 203 §5.4.4 Former Employees 208 Ex Parte Interviews with Treating Physicians 209 Contacting the Opponent's Experts 211 Interviewing Witnesses 214 Tape-recording and Monitoring 221 Surveillance 224 The Ex Parte Subpoena 226 Responding to Improper Investigatory Techniques 228 Denying an Opponent Access to Witnesses 229 §5.12.1 Advising Noncooperation 229 §5.12.2 Secreting Witnesses 231 §5.12.3 Representing Witnesses 231 §5.12.4 Neutralizing Experts 234 Destruction of Evidence 235

§5.4.1

§5.5 §5.6 §5.7 §5.8 §5.9 §5.10 §5.11 §5.12

§5.13

6 Discovery §6.1 §6.2

§6.3 §6.4 §6.5

Introduction Comparison of the Code of Professional Responsibility and the Model Rules; "Courtesy Codes" Mandatory Disclosures, Good Faith, and Cooperation The Problem of Relevance Interrogatories Burdensome Interrogatories §6.5.1 Evasive Responses §6.5.2 §6.5.3 Objections and Claims of Privilege

241 242

244 246 249 251 252 253 254

xiii

Contents

Failure to Make Reasonable Inquiry Misuse of the Business §6.5.5 Records Option Requests for Production Dumping and Shuffiing §6.6.1 Subpoenas to Nonparties §6.6.2 for Production and Inspection Depositions Lack of Civility §6.7.1 Scheduling Games §6.7.2 Abusing and Intimidating §6.7.3 the Deponent Obstruction §6.7.4 Consultations with the Deponent §6.7.5 Perjury and Changing Answers §6.7.6 Deposing Attorneys §6.7.7 Physical Examinations Discovery from Experts Potential Problems with Mandatory Disclosures of "Core" Information under Rule 26 Sanctions §6.11.1 Sanctions under Rules 26 and 37 §6.11.2 Preclusion and Dismissal §6.11.3 Introduction of Discovery Abuse before the Jury §6.11.4 The Tort of Discovery §6.5.4

§6.6

§6.7

§6.8 §6.9 §6.10

§6.11

255 256 256 257 258 259 259 261 262 263 265 266 266 267 268

268 269 269 272 275 276

7 Lawyers, Free Speech, §7.1 §7.2

xiv

and the Media

Introduction Extrajudicial Comment §7.2.1 Gag Orders Prosecutors §7.2.2 Defense Counsel §7.2.3 Civil Cases §7.2.4

279 279 280 286 287 288 289

Contents

§7.3 §7.4

Criticizing Judges Racist and Sexist Comments

290 294

8 Opening Moves

297

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Delay Games Motion Sickness Candor and the Court Candor about the Law §8.5.1 Candor about the Facts §8.5.2 Ex Parte Communications with the Judge Disqualification Motions §8.7.1 Disqualification of Attorneys §8.7.2 Disqualification of Judges "Mary Carter" Agreements Selection of Counsel on the Basis of Race or Gender

298

Trial Tactics-Some §8.1 §8.2 §8.3 §8.4 §8.5

§8.6 §8.7

§8.8 §8.9

II The Trial

298 300 302 304 304 308 310 312 312 313 316 319

323

9 Relations with Jurors §9.1 §9.2 §9.3 §9.4 §9.5

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Pretrial: Contact with and Investigation of the Jury Panel Trial: Voir Dire Examination Trial: Relations with the Jury After Voir Dire Examination

325 325 326 328 332 338 xv

Contents

§9.6

Posttrial: Contacts with Jurors after the Verdict

340

10 Opening

§1O.1 §10.2 §10.3

§10.4

Statement

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Limitations on the Speaking Attorney §10.3.1 In General §10.3.2 Extant Evidence §IO.3.3 Available Evidence Admissible Evidence §10.3.4 Evidence §10.3.5 (Rather Than Argument) Evidence That the §10.3.6 Speaker May Offer Limitations on the Objecting Attorney

345 345 346 347 347 347 349 351 354 356 357

11

§ll.l §11.2

§11.3 §11.4 §l1.5 §l1.6

xvi

The Direct Examiner

359


360

PART A: PRETRIAL

362

Restrictions on Inducing Witnesses to Testify Restrictions on Coaching Witnesses Calling Truthful Witnesses to Create a False Inference Restrictions Imposed by In Limine Motions

360

362 364 369 370

Contents

PART B: TRIAL §11. 7

§11.8

§11.9 §11.10

§11.11 §11.l2

Restrictions on Direct Examination - The Form of the Question Such as the Prohibition of Leading Violating Substantive Evidentiary Restrictions- Premature Crediting of the Witness Demonstrative Evidence Mentioning Substantively Inadmissible Evidence during the Witness's Direct Examination Otherwise Exposing the Jury to Inadmissible Evidence Restrictions on Objections to the Opponent's Cross-Examination

371

371

374 376

379 381 384

12 The Cross-Examiner

§12.1

Introduction PART A: INTERRUPTIONS DURING DIRECT EXAMINATION

§12.2

§12.3

389 390 392

Direct Examination §12.2.1 Objections to the Opponent's Direct Testimony §12.2.2 The Creation of Distractions during the Opponent's Direct Examination

393

PART B: CROSS-EXAMINATION

394

Cross-Examination: Whether It Is Permissible to Cross-examine to Impeach a Truthful Witness

392 392

394

xvii

Contents

§12.4

The Manner of Conducting the Cross-examination §12.4.1 Improper Comments Questions Incorporating Factual §12.4.2 Misrepresentations Questions Incorporating §12.4.3 Allegations Lacking Factual Support §12.4.4 Questions Referring to the Cross-examining Attorney's Personal Knowledge §12.4.5 Questions Referring to Testimony of Other Witnesses §12.4.6 Questions Referring to Inadmissible Evidence The Cross-examiner's Demeanor §12.4.7

398 398 400

402

405 407 409 410

13

§13.1 §13.2

Closing Argument

413


414

PART A: SUBSTANTIVE §13.3

xviii

416

RESTRICTIONS

417

Summing Up §13.3.1 Referring to Perjurious Testimony §13.3.2 Misstating the Evidence §13.3.3 Referring to Extrarecord Facts §13.3.4 Referring to Matters of Common Knowledge §13.3.5 Using Analogies and Examples §13.3.6 Misusing Evidence or Evidentiary Rulings §13.4 Arguing CredibilityStating Personal Opinions about Credibility

417 417 417 418 419 421 423

425

Contents

§13.5

§13.6

§13.7 §13.8

Arguing Inferences §13.5.l Arguing False Inferences §13.5.2 Arguing Unreasonable Inferences §13.5.3 Arguing Negative Inferences §13.5.4 Stating Personal Opinions about Inferences Arguing the Law §13.6.l EncouragingJury Nullification of the Law §13.6.2 Misstating the Law §13.6.3 Mentioning Additional, Improper Criteria §13.6.4 Appealing to Sympathy, Passion, and Prejudice §13.6.5 Stating Personal Opinions about the Application of the Law Substantive Restrictions: The Scope of the Rebuttal Argument The Doctrine of Invited Response: Justifying Otherwise Impermissible Argument PART B: RELATED PROCEDURES

§13.9 §13.10

426 426 428 429 431 431 431 432 433 434 438 438

439 442

Related Procedures- In Limine Motions before Summation Objections or Motions to Strike during Closing Argument

443

III Special Problems

447

442

14 Special Problems in Criminal Defense §14.1 §14.2

Introduction Competency §14.2.l The Duty to Investigate

449 450 450 450 xix

Contents

The Duty to Know the Law Consultation and Decision Making §14.2.4 Trial Error Structural Error §14.2.S Conflict of Interest §14.3.l Representing Codefendants The Former Client as §14.3.2 Prosecution Witness Benefactor Payments §14.3.3 §14.3.4 Other Conflicts Possession of Incriminating Evidence The Attorney-client Privilege §14.4.l and Physical Evidence The Lawyer's Ethical §14.4.2 Responsibilities Subpoenas to Lawyers Client Perjury §14.6.l Preventing Client Perjury Remedial Measures §14.6.2 Ethical Problems Connected with Fees The Rule Against §14.7.l Contingent Fees The Obligation to Report §14.7.2 Cash Payments §14.7.3 The Effect of Forfeiture Provisions on Attorney Fees §14.2.2 §14.2.3

§14.3

§14.4

§14.5 §14.6

§14.7

456 456

4S8 460 460 461 464 466 468 469 470 472 475 478 484 486 488 488 489 491

15 Special Problems in Insurance Defense §lS.l §lS.2 §lS.3

xx

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Identification of the Client The Two-client Model §lS.3.l The One-client Model §lS.3.2

497 498

SOO S02 S02 SOS

Contents

Representation of the Insured by House Counsel Coverage Issues Pleading and Parties Representing Multiple Insureds §15.5.l Counterclaims §15.5.2 Common Issue Conflicts The Two-client Model §15.6.l The One-client Model §15.6.2 Conflicts Arising during Representation - Confidentiality The Two-client Model §15.7.l The One-client Model §15.7.2 Noncooperation and Collusion Discovery Settlement and Excess Liability Accountability §15.l1.1 Malpractice §15.11.2 Unfair Claims Settlement Practices §15.3.3

§15.4 §15.5

§15.6

§15.7

§15.8 §15.9 §15.l0 §15.ll

506 508 510 51(1 511 513 513 517 518 518 524 525 527 529 534 534 536

16

§16.1 §16.2 §16.3 §16.4

Special Problems in Class Actions

539

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Competence and Qualifications of Counsel Solicitation and Contacts with Class Members Prelitigation Contacts §16.4.1 Contacts by Plaintiff's §16.4.2 Counsel after Filing and before Certification Contacts by Defense §16.4.3 Counsel after Filing and before Certification

540 541 541 543 543

545

547

xxi

Contents

§16.4.4

Contacts after Certification and before Expiration of the Exclusion Period Contacts after the Exclusion §16.4.5 Period Is Closed Relationship between Plaintiff's Counsel §16.5 and the Class Representatives §16.6 Financing the Litigation Fees and Selection of Counsel §16.7 §16.8 Conflicts The Lawyer's Personal Interests §16.8.1 Conflicts between the Lawyer §16.8.2 and the Class Representatives §16.8.3 Conflicts within the Class Conflicts Manufactured §16.8.4 by Defense Counsel Defense Challenges to Certification §16.9 §16.10 Discovery and Delay §16.11 Judicial Responses to Specific Instances of Misconduct

549 549 550 551 553 555 555 558 559 560 561 561 563

IV Some Final Matters

567

17 Negotiation

§17.1 §17.2 §17.3 §17.4 §17.5 §17.6 §17.7

xxii

and Settlement

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Settlement Authority Malpractice in the Settlement Context Candor in Negotiations Bypassing Counsel Dealing with the Recalcitrant Client

569 570 570 571 572 573 575 576

Contents

§17.8

§17.9 §17.10 §17.11

Conflicts in Settlement Attorney's Personal Interests §17.8.1 Fees with Merits Conflicts §17.8.2 Interests of Multiple Clients §17.8.3 Sealed Settlements §17.8.4 Ethics and the Structured Settlement Threats and Leverage Disbursements §17.11.1 To the Client §17.l1.2 To Others §17.11.3 Fee Disputes

577 577 578 579 580 580 581 584 584 584 586

18 Withdrawal §18.1 §18.2 §18.3

§18.4 §18.5

§18.6 §18.7 §18.8

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Grounds for Withdrawal Mandatory Withdrawal §18.3.1 Permissive Withdrawal §18.3.2 Timeliness and Cooperation Maintaining the Confidences and Secrets of the Client Enumerating Grounds §18.5.1 for Withdrawal Self-defense §18.5.2 §18.5.3 The Fugitive Client Client Papers Duty to Appeal Withdrawal and Malpractice

589 589 590 592 592 595 597 598 598 600 601 603 607 608

19 Appeal §19.l §19.2

Introduction Frivolous Appeals

611 611 612 xxiii

Contents

§19.3 §19.4

Criminal Appeals Appellate Malpractice

617 618

20 Discipline, the Courts, and Ethics Committees 621

§20.1 §20.2

§20.3

§20.4

Introduction The Disciplinary Process §20.2.1 Workload Attorney Reporting §20.2.2 of Misconduct §20.2.3 Abuse of the Disciplinary Process The Role of the Courts §20.3.1 Sources of Judicial Authority §20.3.2 The Judicial Response §20.3.3 Advantages of Judicial Resolution The Role of Ethics Committees §20.4.1 Jurisdiction and Procedure §20.4.2 Workload Immunities §20.4.3

Table of Cases Model Rules of Professional Conduct-r-Reference Guide Bibliography Index

xxiv

622 622 622 623 624 625 625 626 627 628 628 630 631

635 655 657 677

Preface

St. Ivo was a Breton and a lawyer, but not dishonest-an astonishing thing in people's eyes! H. Thurston and D. Attwater, 2 Butler's Lives of the Saints 352 (1956) Alas, lawyers continue to exist into the twenty-third century. Kirk was defended by a member of the bar when he went on trial for murder in an episode called "Court Martial." The kindly lawyer that took Kirk's case was right out of a 1930s movie. His sense of the law as an instrument of justice was refreshing by today's standards. Even the prosecutor ... was that uncommon breed of lawyer that cared about justice and people. She was happy to lose the case when it was discovered that Kirk was innocent. Amazingly, money never came up during the entire episode. Imagine two lawyers and neither interested in money. Cynics could use that as the ultimate proof that Star Trek is fantasy. D. Marinaccio, All I Really Need to Know I Learned from Watching Star Trek 85 (1994)

It seems that for centuries the public has had a negative perception of our profession. The perception is widespread and deeply entrenched. Whenever there is a national opinion poll asking the public to rate the various professions, lawyers invariably finish near the bottom. In modern times, the lawyer is a "target." The number of both legal malpractice actions and bar complaints has steadily risen. The lawyer has even become a target in the sense that law enforcement agencies have initiated special investigative efforts to identify attorneys engaged in criminal activities. At a seminar, one of the authors of this text heard a former president of the National Association of Criminal Defense

xxv

Preface

Lawyers say that today there is a new, intensely practical reason to be scrupulously ethical: "Whenever you interview a purported client or witness-even in the privacy of your office-you have to assume that you are broadcasting live to the FBI." Given that harsh reality, we have tried to make this book intensely practical. Of course, we must confess that we are academic lawyers. However, each of us has served some time in the legal trenches. VVeprotest that we are not hopelessly naive. We have endeavored to make this book even more useful to our readers than its predecessor, Trial Ethics (1988). We have attempted to do far more than merely update the citations in Trial Ethics. In the chapters devoted to the trial process, we have included a much more sophisticated analysis of the related evidentiary and procedural issues. The preparation of that analysis was the principal responsibility of our new coauthor, Ed Imwinkelried. However, all the chapters have been substantially revised. In Dean Calabresi's words, this is the Age of Statutes; statutes have become the dominant source of American law. That generalization holds true for legal ethics; in most jurisdictions, the rules of professional responsibility have been reduced to statutory form, based on either the Model Rules or the Code of Professional Responsibility. In retrospect, we concluded that Trial Ethics was too much of a common law text and spent too little time parsing the wording of the governing statutes. This text places much greater emphasis on the statutes. In each chapter, the text carefully dissects the statutory language to highlight ambiguities and pitfalls. Finally, this text has a preventive law dimension that Trial Ethics lacked. At the end of each chapter, we have added checklists to help the practitioner anticipate-and avoidviolations of the legal ethics rules. In the final analysis, we hope that in some small way this text will help the bar regain the public's faith. Every day we walk into our classrooms in Kentucky and California and work with bright, idealistic students-students who we believe will become the type of lawyers who deserve the public's trust. For that matter, consulting and serving on bar committees, we regularly work with practicing lawyers-the vast majority of whom we respect. The miscreants have largely monopolized the headlines, but we are firmly convinced that they represent a distinct minority in the profession. On the one hand, we hope that you will not find this text too preachy. On the other hand, we want to make

xxvi

Preface

our agenda clear. The purpose of this text is to help decent attorneys do two things: (1) understand and observe the rules of legal ethics and (2) thoroughly frustrate the miscreants' efforts to pervert the rules and turn them to their own tactical advantage. We more than welcome your comments on this text. Since we are academic lawyers, we learn about developments in the real world primarily by reading about them in the cases. However, we realize that the cases lag years behind the developments in the trenches. Our best way of learning about the cutting edge developments is direct communication from our readers. If you find that a passage in the text is misguided, or that the text simply overlooks a problem, we would love to hear from you. Just as we attempted to move beyond Trial Ethics in this text, we shall issue annual supplements to this text to improve and update it. We look forward to hearing from you. In his book, after describing the cynics' reaction to the "Court Martial" episode, Dave Marinaccio added that he did not share the cynics' pessimism. He acknowledged that as a Trekkie he has "an optimistic view of the future." He expressed his own view that in the future lawyers will once again be regarded as "wholesome, functioning members of society." If judges, practitioners, and academic lawyers work together, we can realize that vision of the future-perhaps even before the advent of the twenty-third century. William H. Fortune Richard H. Underwood Edward]. Imwinkelried May 1996

xxvii

MODERN LITIGATION AND PROFESSIONAL RESPONSIBILITY HANDBOOK

I Proceedings Before Trial

1 Commencing Litigation: Ethics and Accountability

§ 1.1 Introduction § 1.2 Comparison of the Code of Professional Responsibility and the Model Rules

§ 1.3 Competence, Diligence, Specialization, and Communication Some Notes Regarding Interviewing and Counseling Duty to the Interviewee Referral Neglect, Burnout, and Impaired Attorneys § 1.7.1 Neglect §1.7.2 Burnout § 1.7.3 Impaired Attorneys § 1.8 Preventive Law-Avoiding Liability to the Client §1.8.1 Non-engagement and Disengagement §1.8.2 Calendar Control §1.8.3 The Problem ofthe Missing Client §1.9 Countersuits § 1.10 Limitation of Objectives §1.11 Limitation of Malpractice Liability §1.4 § 1.5 §1.6 § 1.7

3

§1.1

Conunencing Litigation

§ 1.1 Introduction * A lawyer's decision to decline, refer, undertake, continue, or abort the prosecution of an action should involve serious consideration of ethics and potential legal liability.This chapter focuses on counsel's obligations to the client, the adversary, and the justice system at the earliest stages of litigation. Common pitfalls are identified, and guidelines are offered to help the lawyer minimize the risks of discipline and malpractice. It is said that the American lawyer is not a "common carrier" and is "under no obligation to act as advisor or advocate for every person who may wish to become his client."! Nor would a lawyer ordinarily expect to be held liable for erroneous "curbstone advice."? On the other hand, there is a sense abroad today that lawyers are becoming "target defendants,"3 and that time-honored cliches may no longer be relied on for safe harbor. New theories of liability are being advanced to hold the litigator accountable for the lost claims of "clients" that the lawyer may have thought he had safely turned away or referred to others. The leading cases evidencing these theories are discussed in §§ 1.5 and 1.6, which deal with declining and referring cases. One of the foremost duties the attorney owes the client is competence. Courts and disciplinary authorities are taking an increasingly active role in policing incompetence and neglect of client affairs. The consequences of this heightened scrutiny include more demanding standards of care and the increasing likelihood of discipline for neglect. These developments are addressed in §§ 1.3, 1.6, and 1.8.

§1.1 'Some of the material contained in this chapter was originally presented in Underwood, Taking and Pursuing a Case: Some Observations Regarding "Legal Ethics" and Attorney Accountability, 74 Ky. LJ. 173 (1985-1986). IEC 2-26. In contrast, the British barrister is "on the cab rank for hire." R. DuCann, The Art of the Advocate 34 (1964). For a passionate brief in favor of the "Cab Rank" rule, see D. Pannick, Advocates 135-136, 139-141 (1992). The American Bar Association's Model Rules of Professional Conduct (1983) stress the moral responsibility to provide pro bono public service. Model Rules 6.1, 6.2. 2Wade, The Attorney's Liability for Negligence, 12 Vand. L. Rev. 755,758 (1958). Of course, the lawyer-client relationship is not dependent on a fee agreement or payment of any fee. Franko v. Mitchell, 158 Ariz. 391, 762 P.2d 1345 (1988). Indeed, a "defense" based on the absence of any fee was rejected in the earliest reported American "malpractice" case, styled Stephens v. White, 2 Va. (2 Wash.) 203 (1796). 3G. Hazard, S. Koniak, and R. Cramton, The Law and Ethics of Lawyering 174176 (1994) [hereinafter Hazard and Koniak].

4


§1.2

Given these developments, it becomes critical to define competence. Competence suggests an ability to analyze the factual and legal elements of the client's problem to identify a creative solution. From the client's perspective, the expectation of competence may all too frequently amount to an expectation that the lawyer will act as an insurer of a good result, no matter how complicated or novel the claim. At the same time, unprecedented pressure is being put on the legal profession to curb a perceived flood of groundless litigation." This countercurrent of conflicting obligation is discussed in §§ 1.9 through 1.11 and Chapter 2. In these sections, we discuss developing standards of accountability of the general practitioner as well as the more specialized litigation attorney. In addition, we discuss the mechanics of interviewing, conflicts checks, and non-engagement letters. Most of the problems associated with taking a case can be avoided by the adoption of simple, commonsense office procedures.

§1.2

Com.parison of the Code of Professional Responsibility and the Model Rules

Generally speaking, the final draft of the Model Rules of Professional Conduct that emerged from the ABA House of Delegates was not intended to usher in radical changes in law practice, and adoption of the Model Rules at the state level has had little impact on the prevailing ethic. Moreover, with regard to malpractice liability, the Model Rules contain the same self-serving disclaimers found in the Code of Professional Responsibility, discouraging their use as evidence of a standard of care. I However, while the Model Rules do not introduce any dramatic changes in the philosophy underlying the adversary system, they do put forth a model of a reasonable lawyer, sensitive to the legitimate concerns of not only the client, but also the adversary and the court. "See, e.g., the efforts of the 1995 Congress to curb "litigation abuse." Congress Speeds Legal Changes, 81 A.B.A.]. 111 (June 1995). §1.2 'Model Rules, Scope '\16. Compare Model Code, Preamble and Preliminary Statement (1969). See Hazard and Koniak, supra § 1.1 note 3, at 190 ("Courts generally state that the violation of an ethics rule does not create a civil cause of action or constitute negligence per se. On the other hand most courts view ethics rules as relevant admissible evidence and occasionally as creating a rebuttable presumption of negligence.").

5

§1.2


The Code With regard to the ethics of rejecting, referring, and prosecuting civil actions, the Code contains a number of vague and occasionally conflicting directives. The most familiar of these, DRs 7-101 and 7-107, emphasize the lawyer's duty of "zealous" representation within the "bounds of [the] law." Unfortunately, the ambiguity of the word zeal provides a potential warrant for mindless fanaticism. 2 While highlighting the need for zeal, the Code gives something akin to honorable mention to competence and diligence. Disciplinary Rule 6-101 (A) provides that a lawyer may be disciplined if the lawyer "knows or should know" that she is not competent to handle a matter; the implication is that no disciplinary violation is committed if the lawyer mistakenly believes she is competent to handle a matter. Moreover, while the same rule condemns neglect, disciplinary actions for single instances of neglect are rare." Under the Code, competing obligations to others tend to be weakened by qualifications or relegated to aspirational "ethical considerations."! The only explicit limitations on the advocate's zeal are couched in subjective terms. For example, DRs 2-109 and 7-107 prohibit actions on behalf of a client that would serve "merely" to harass or maliciously injure another. The wording of the prohibition suggests that any claim may be brought or position asserted so long as some other justification, no matter how insubstantial, can be identified and articulated. The particular lawyer's personal notion of "good faith" is seemingly dispositive.

2ABA Lawyer's Creed A.I ("I will be loyal and committed to my client's cause, but I will not permit that loyalty and commitment to interfere with my ability to provide my client with objective and independent advice."); ABA Lawyer's Creed C.I ("[E]xcessive zeal may be detrimental to my client's interests as well as to the proper functioning of our judicial system."); G. Hazard,jr., and W. Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct § 1.3: 101 (2d ed. 1990). The American Lawyer's Code of Conduct, offered by the American Trial Lawyers Foundation as an alternative to the ABA Model Rules, is a client-oriented code that would require lawyers to use "all legal means, that are consistent with the retainer agreement, and reasonably available, to advance a client's interests as the client perceives them." Code of Con. 3.1. 3See § 1.7.1. 4E.g., EC 7-10.

6


§1.3

The Model Rules In contrast, the "black letters" of the Model Rules emphasize competence and diligence in positive terms in Model Rules 1.1 and 1.3 and add a new and potentially thorny requirement of communication in Model Rule 1.4, presumably to foster client participation in decision making and discourage attorney procrastination and neglect. In addition, the notes to Model Rule 3.1 indicate that counsel's conduct toward others should be evaluated by an objective rule of reasonableness, although the text of the rule and the official comments have been watered down from earlier drafts. In any event, zeal no longer serves as a justification for zealotry. 5 In addition to shifts in emphasis, the Rules substantively modify several sections of the Code. Of particular significance is Model Rule 1.5(e),which encourages the referral of cases to more experienced and specialized counsel through more liberal allowance of fee-splitting.6 The Code sent inconsistent signals on referral, encouraging referral in DR 6-101(A)(I) while creating economic disincentives in DR 2-107. Other changes include a provision for limiting the objectives of the representation? and a clarification of the rule prohibiting contractual limitations of the lawyer's malpractice liability.8

§1.3

Corrrpetence, Diligence, Specialization, and Corrirrrurricariorr Competence and Diligence

Since the Code only implicitly requires lawyers to be competent, disciplinary authorities in Code states have tended to rely upon DR 6-10 1(A)(2), proscribing inadequate preparation, and DR 6101(A)(3), condemning neglect. Indeed, the annual report for 19671968 of the Committee on Grievances of the Association of the Bar of the City of New York revealed that more than half of the offenses 5Hazard and Hodes, supra note 2, §1.3: 10 l. 6See §1.6. 'Model Rule l.2(c); see §l.lO. 8Model Rule 1.8(h); see § 1.11.

7


§1.3

The Model Rules In contrast, the "black letters" of the Model Rules emphasize competence and diligence in positive terms in Model Rules 1.1 and 1.3 and add a new and potentially thorny requirement of communication in Model Rule 1.4, presumably to foster client participation in decision making and discourage attorney procrastination and neglect. In addition, the notes to Model Rule 3.1 indicate that counsel's conduct toward others should be evaluated by an objective rule of reasonableness, although the text of the rule and the official comments have been watered down from earlier drafts. In any event, zeal no longer serves as a justification for realotry> In addition to shifts in emphasis, the Rules substantively modify several sections of the Code. Of particular significance is Model Rule 1.5(e),which encourages the referral of cases to more experienced and specialized counsel through more liberal allowance of fee-splitting.6 The Code sent inconsistent signals on referral, encouraging referral in DR 6-101(A)(1)while creating economic disincentives in DR 2-107. Other changes include a provision for limiting the objectives of the representation? and a clarification of the rule prohibiting contractual limitations of the lawyer's malpractice liability"

§1.3

Cornperence, Diligence, Specialization, and Corrrrrrurricatfon Competence and Diligence

Since the Code only implicitly requires lawyers to be competent, disciplinary authorities in Code states have tended to rely upon DR 6-101(A)(2), proscribing inadequate preparation, and DR 6101(A)(3),condemning neglect. Indeed, the annual report for 19671968 of the Committee on Grievances of the Association of the Bar of the City of New York revealed that more than half of the offenses 5Hazard and Hodes, supra note 2, §1.3: to 1. 6See §1.6. 'Model Rule 1.2(c); see §l.lO. 8Model Rule 1.8(h); see §1.l1.

7

§1.3


against clients involved neglect. J No specific category was listed for either incompetence or inadequate preparation, suggesting that much conduct that could be characterized as incompetence did not result in formal discipline. An ABA study of lawyer malpractice, in which 30,000 claims were surveyed, showed that 26 percent of claims involved "administrative errors," largely missed deadlines. 2 Consequently, in a state that follows the Code, a definition of competence must be gleaned from the case law of attorney malpractice, rather than from the disciplinary gloss. Generally, a search of the case law reveals that "an attorney's conduct [will be] measured against the standard of an attorney who possesses and exercises with reasonable diligence that degree of knowledge, skill, and prudence commonly possessed and exercised by similarly situated attorneys."3 That definition is broad enough to reach a wide range of incompetent behavior, but again the results of the cases demonstrate that discipline is likely only in cases of inadequate preparation or outright neglect. The above standard of care has been incorporated into Model Rules 1.1 (Competence) and 1.3 (Diligence). Specifically, Model Rule 1.1 requires that the lawyer bring to bear "the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation." This definition of competence requires the litigator to have a working knowledge of the substantive law pertinent to the client's problem" as well as the procedural law of the forum> or to discover such law through reasonable research." Second, the lawyer must possess and exercise the skills of advocacy, including the analysis of precedent," the discovery and analysis of evidence," the drafting of pleadings." and effective trial technique. JO Finally, Model Rule 1.1 contemplates that a §1.3 'Report of the Committee on Grievances of the Association of the Bar of the City of New York, N.Y Lj., Sept. 12, 1968, at 4. See also R. Mallen, Legal Malpractice, 20 Trial No.9, at 24 (1984). 2ABA Standing Committee on Lawyers' Professional Liability, Characteristics of Legal Malpractice: Report of the National Legal Malpractice Data Center (1989). These statistics are analyzed in R. Mallen and]. Smith, Legal Malpractice 17-28 (3d ed. 1989), a well-written, comprehensive treatise that is referred to often in this book. 3ABA/BNA Law. Man. Prof. Con. ~301:101. +Smith v. Lewis, 13 Cal. 3d 349, 530 P.2d 589,118 Cal. Rptr. 621 (1975). 5Siegel v. Kranis, 29 A.D. 2d 477, 288 N.YS.2d 831 (1968). 6Smith, 13 Cal. 3d 349, 530 P.2d 589, 118 Cal. Rptr. 621. 7Model Rule 1.1, Comment [2J. BWoodruff v. Tomlin, 616 F.2d 924 (6th Cir. 1980); Fishow v. Simpson, 55 Md. App. 312,462 A.2d 540 (1983); Togstad v. Vesely, Otto, Miller and Keefe, 291 N.W2d 686 (Minn. 1980). In the days of frontier circuit riding, when transactions and disputes were

8


§1.3

lawyer will make an adequate inquiry into and analysis of the factual and legal elements of the problem I I and invest sufficient time in preparation for "what is at stake."12 Disciplinary Rule 6-101 (A)(3) condemns "neglect [of] a legal matter entrusted to [the lawyer]," while Model Rule 1.3 imposes a positive duty on the lawyer to "act with reasonable diligence and promptness in representing a client." Because these rules have generated or will generate the majority of disciplinary actions and malpractice suits, special attention is directed to them in this chapter. Specialization Although specialization is a fact oflife in many professions, DR 2105 (A) prohibits a lawyer from holding himself out as a specialist. This tradition is carried forward in Model Rule 7.4, which permits designation of specialties only in accordance with federal law or special state programs for certification. 13

simpler and there was no "discovery," preparation tended to be minimal. In Farmer, Legal Practice and Ethics in North Carolina 1820-60, 30 N.C. Hist. Rev. 329, 330-331 (1953), the author observes: Contracts of employment were very indefinite in many cases .... Often the contracts seemed to presume that the lawyer knew all the circumstances of the case. For example, ... "I suppose it is not necessary at present to relate the circumstances particularly as I expect to see you before Court, and you have, I suppose, heard a correct account from brother William .... " A case could be made that in many small controversies this is probably the way it should be done even today. 9Spriggv. Garcin, 105 Cal. App. 3d 869,164 Cal. Rptr. 677 (1980). lOOn the other hand, mistakes are frequently overlooked as "errors of judgment." See discussion in Woodruff, 616 F.2d 924. I I Model Rule l.l, comment [5]. Compare Tolly v. J. S. Fry and Sons, Ltd., I K.B. 467,473 (1930) ("[T]here was also a third point, which [counsel] said was difficult to express in words, but which, as he never made me understand what it was, I cannot deal with."). 12SeeThompson, Highway Robbery, II Cal. Law. 28 (May 1991) (Lawyers prosecuting negligence cases in Southern California's "staged accident business" claimed they were duped into representing dishonest clients, but "[hJow are they supposed to know their clients were crooks when they barely met them .... 'You can't represent a client you have never met. That's just too sloppy.' "). 13Afterthe decision in Peel v. Attorney Registration and Disciplinary Commission, 496 U.S. 91, 110 S. Ct. 2281, I 10 L. Ed. 2d 83 (1990), Model Rule 7.4 was amended to permit lawyers to notify the public that they are certified as specialists by qualified organizations.

9

§1.3


On the other hand, both DR 6-lOl(A)(1) and Model Rule l.l recognize the distinction between a general practitioner and one who, by virtue of education, training, and experience, is more qualified or possessed of "established competence" in a particular field. 14 Moreover, if the standard of care applied in a legal malpractice action contemplates that the defendant's performance will be measured against the performance of similarly situated attorneys, it is apparent that a lawyer with specialized knowledge and skill, or a lawyer practicing in an area requiring specialized knowledge and skill,will be held to a higher standard of care. 15 If the area of law requires specialized knowledge, a general practitioner will be held to the standard of care of a specialist unless the client agrees to the representation after having been informed of the generalist's limitations and the desirability of retaining a specialist. 16 The Dury to Communicate Lawyers are notorious for failing to communicate with their clients-despite the fact that it should be obvious to any reasonable lawyer that communication is necessary to preserve the trust and confidence essential to the attorney-client relationship and to minimize the lawyer's exposure to disciplinary complaints and lawsuits. Ironically, the disciplinary rules in the Code contain no explicit provision recognizing a trial lawyer's duty to communicate with the client." In contrast, Model Rule 1.4(a) and (b) requires the lawyer to "keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information" and to "explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." 14See,e.g., Model Rule 1.1, Comment [I]. 15Horne v. Peckham, 97 Cal. App. 3d 404, 158 Cal. Rptr. 714, 720 (1979), overruled on other grounds by ITT Small Business Fin. Co. v. Niles, 9 Cal. 4th 245, 885 P.2d 965, 36 Cal. Rptr. 2d 552 (1994)); Wright v. Williams, 47 Cal. App. 3d 802, 121 Cal. Rptr. 194 (1975); Duffey Law Office SC v. Tank Transport Inc., 194 Wis. 2d 675,535 N.W. 2d 91 (Ct. App. 1995); Mallen and Smith, supra note 2, §15.4; Rensberger, Legal Specialists: What Standard of Care, Trial, May 1990, at 25. 16Mallen and Smith, supra note 2, §15.4, at 871; Home, 97 Cal. App. 3d 404, 158 Cal. Rptr. 714 (generalist ventured into tax matters and was held to the standard of care of a tax attorney). 17DR 9-102(B)(I) refers to a duty to notify a client of the receipt of funds or property, but all other references to a duty to communicate are in the aspirational Ethical Considerations.

10


§1.4

If the recognition of a separate duty to communicate deters procrastination and neglect and fosters client participation in decision making, Model Rule 1.4(a) and (b) should at least improve the image of the profession. In addition, this rule serves as a belated recognition that diligence is an essential element of lawyer competence. However, there is a substantial risk of overkill in recognizing this duty in a separate rule of discipline. Specifically, the rule might serve as a warrant for adverse action against a lawyer flowing from inaction or misunderstanding despite the absence of any real harm to the client or the system of justice. While failure to communicate is the cause of many misunderstandings, perhaps the duty to keep the client informed should be expressed in aspirational terms, rather than as a separate rule of discipline. 18

§1.4

Sorne Notes Regarding Intenriewing and Counseling

Few practicing lawyers received formal training in interviewing and counseling in law school. Many academics avoid the subject; their bias is that the study of the lawyering process is clinical or trade school fare. Fortunately, this attitude is changing; courses are offered in many law schools, and a number of useful works are now available. 1 In the initial interview, the client's primary need may be for catharsis-to tell the story to a non judgmental listener. The lawyer's primary objective in the initial interview should be to obtain the trust of the client, and trust can be developed by being attentive and sensitive. While developing a relationship of trust, the lawyer should beware of premature diagnosis-rendering an opinion without all the facts.? A I8SeeABA Standing Committee on Lawyers' Professional Liability, letter of January 20, 1982, to the Kutak Commission, reprinted as Appendix C in L. Patterson, Legal Ethics: The Law of Professional Responsibility (3d ed. 1989), condemning the new rule as written because "too many malpractice claims already arise because of the failure of a lawyer to adequately communicate." For the dubious proposition that the disciplinary rule ought to be amended to require counsel to advise the client of alternative dispute resolution (ADR) options, see Sander, At Issue, 76 A.B.A. J. 50 (Nov. 1990). §1.4 ISee, e.g., G. Bellow and B. Moulton, The Lawyering Process (1978); D. Binder and P. Bergman, Fact Investigation (1984); D. Binder and S. Price, Legal Interviewing and Counseling (1977); T. Shaffer and R. Redmount, Legal Interviewing and Counseling (1980). 2Binder and Price, supra note 1, at 54.

11

§1.4


lawyer who leaps to conclusions may accept a case that should have been rejected, and vice versa. Interviews should be in person, rather than over the phone, to minimize the possibility of claims by would-be clients whom the lawyer either forgot about or did not think were clients." Other consequences may be client disappointment and conflict in the attorney-client relationship because too much was promised at the initial interview. To address the problem of premature diagnosis, the leading text on legal interviewing recommends a three-staged interview for identifying a client's problem and legal position." Specifically,the lawyer should (1) spend some time eliciting the client's description and understanding of the problem, (2)go back over the transaction chronologically to elicit detail, and (3) discuss the law applicable to the problem." Unless the interviewer is a specialist who sees clients primarily on referral, she will frequently lack the depth of substantive knowledge required to provide categorical advice at the close of the initial interview. Lawyers should consider the available alternatives, including an adjournment for further research or investigation, an extended or additional interview, or referral of the client to another lawyer. The lawyer should exercise caution before giving definitive advice-a categorical opinion-unless the outcome is reasonably predictable or the action to be taken is clear. Preparation is essential. Ordinarily, the interviewee will have made telephone contact with someone at the lawyer's firm before arriving on the doorstep. The interviewee should be advised to bring to the initial interview all available documents or other evidence." Such material may be a source of persuasive fact, provide leads to other facts, and put the interviewee's problem in perspective. Urging the client to collect relevant documents and evidence also gives the client a sense of active participation. In the short term, client participation reduces the client's sense of 3E.g., Bays v. Theran, 418 Mass. 685, 639 N.E.2d 720 (1994); Devaux v. American Home Assurance Co., 387 Mass. 814,444 N.E.2d 355 (1983) (lawyer gave preliminary advice over phone, client sent in requested letter asking for legal assistance in the matter, secretary misfiled the letter, the statute of limitations ran on the client's claim, and the lawyer was sued). "Binder and Price, supra note 1, at 53. 5For a discussion of practical applications of this learning, see Holmes, Third Party Insurance Excess Liability and Its Avoidance, 34 Ark. L. Rev. 525, 539-541 (1981). 6A. Morrill, Trial Diplomacy 148 (2d ed. 1979); R. Simmons, Winning before Trial 121 (1976); F. Wellman, Day in Court 79 (1910) ("The first man on the ground usually takes title to the verdict! He should get his client to bring his witnesses to him at once.").

12


§1.4

helplessness. In the long term, it increases the likelihood that the client will be satisfied with the final outcome. Surprisingly, laypersons tend to be more satisfied with outcomes at informal neighborhood justice centers than with judicial outcomes-in part because they actively participated in the outcome.' A satisfied client is more willing to agree to a reasonable settlement offer and less likely to sue for malpractice. Along the same lines, counsel should have on hand standard forms of authorization for the release of information from otherwise privileged sources-such as the interviewee's former attorney, the physician, and government agencies.8 Finally, a list of other material identified during the interview should be compiled, and given to the interviewee if the interviewee is being asked to assist in the collection of information. To this commonsense advice, one caveat should be added. A prime objective of the initial interview should be to decide whether the interviewee is a desirable client. In addition to the issue of fees, care should be taken to identify actual or potential problems in the representation. One question is whether the would-be client has seen another lawyer. If so, the other lawyer may have useful information. In addition, the other lawyer may still be under a contract of employment. Has the other lawyer been discharged? Is this a problem case? Is this a problem clienti'? Red flags include 1. the 2. the 3. the 4. the 5. the 6. the

client who has changed attorneys, client who has already been rejected by other counsel, client who wants action "right now," client for whom "it's a matter of principle," client who has researched her own case, and client whom you simply do not like. 10

7R. Cook,]. Roehl, and D. Shepperd, NeighborhoodJustice Centers' Field Test: Final Examination (1980). "Exemplars can be found in Morrill, supra note 6, at 166. See also Simmons, supra note 6, at 124-125. 9Gerald Hecht, an attorney from Danbury, Connecticut, has identified four client character types: Never-in-Nellie (who will never return your calls or cooperate), The Great Houdini (who never shows up for depositions or other proceedings), Mal Content (who is perennially hostile and forever dissatisfied), and Double-Dealing Debbie (who has another lawyer in the wings looking over your shoulder). Nobody Ever Said Clients Were Perfect, N at!. LJ., Mar. 9, 1987, at 11. IOFortune and O'Roark, Risk Management for Lawyers, 45 S.C. L. Rev. 617, 632, 642 (1994).

13

§lA


Attorneys dependent on fees for a living should, of course, broach the delicate subject of compensation before undertaking the representation. 1 1 Assume the lawyer has decided to take the case. The lawyer's engagement should be documented, as should any rejection 12 or referral. Strangely, many lawyers resist putting such matters in writing and underestimate the value of a confirming letter to the client. Incomplete documentation of an understanding may lead to a malpractice suit. 13

§ 1.5

Duty to the Interviewee

The lawyer-client relationship is a form of agency. All too often lawyers assume that the relationship is solely contractual, arising from mutual consent. However, agency law and notions of fiduciary duty and detrimental reliance also come into play, creating a risk of disqualification and malpractice claims based on precontract consultations. Presumably all attorneys would agree that in the context of counsel's duty to preserve confidences and secrets the fiduciary relationship existing between lawyer and client extends to preliminary consultation by a prospective client with a view to retention of the lawyer, although actual employment does not result. I Assume a lawyer in good faith listens to a prospective client's story and later learns there is a conflict with a present client of the firm. The confidential information received from the prospective client, imputed to all firm members, may preclude representation of IIModel Rule 1.5 requires an explanation of the fee at an early stage of the representation. In Williams, The Criminal Lawyer in Antebellum South Carolina, 56 S.C. Hist, Mag. 138, 149 (1955), the author quotes the following from the B.F Perry Diary: The profession would be pleasant enough if the lawyer was always employed in important cases and well paid. But nothing can be more disheartening than to have a mean case, a poor client, and a troublesome one in the bargain. The law is dull .... I want money very much-My clients do not pay promptly. 12Indeed, a lawyer is not obligated to take every case that comes his or her way. "For the same advocate will not defend all persons indiscriminately; he will not make of his eloquence a safe harbor for every pirate ship." Quintilian, Institutio Oratoria Book XII, VII 2-5. 13Fortune and O'Roark, supra note 10, at 619-620. §1.5 'Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1319 (7th Cir.), cert. denied, 439 U.S. 955, 99 S. Ct. 353,58 L. Ed. 2d 346 (1978); Restatement of the Law Governing Lawyers § 112, Comment d (Tentative Draft No.3, 1990).

14

Conunencing

Litigation

either client." To avoid disqualification, the ABA recommends ing precautions:

§1.5 the follow-

1. Establish a system of checking for conflicts (names, subject matter, etc.); 2. Limit information from prospective clients to that necessary to check for conflicts; 3. If possible, obtain a waiver of confidentiality from the prospective client; and 4. Screen the lawyer who has received confidential information from a prospective client rejected because of conflict. 3 Conflicts are not the only problem. There is a risk of liability if the prospective client can establish injury as a result of the lawyer's conduct. Lawyers should consider the implications of "negligent" rejection or referral. A tort-based analysis of duty to the interviewee recognizes that a lawyer-client relationship may be created "whenever an individual seeks and receives legal advice from a lawyer in circumstances in which a reasonable person would rely on such advice.?" The well-known Minnesota case of Togstad v. Vesery, Otto, Miller and Keife5 illustrates the dangers of casual treatment of the rejected claim. The formula for disaster included an initial interview, a premature opinion regarding the merit of a potential claim, a belief on the part of the interviewer that the case had been rejected, no advice regarding the applicable statute of limitations, and insufficient documentation. In Togstad, a potential client appeared at counsel's office to discuss a claim for medical malpractice. The claimant-interviewee contended 2ABAFormal Op. 90-358 (1990). 3Id. Restatement of the Law Governing Lawyers §213, Comment g (Tentative Draft No.3, 1990) is to the same effect. Arthur Garwin, of the ABA Center for Professional Responsibility, recommends that attorneys advise potential clients that information in the initial client interview will not be confidential if the attorney is not retained and require them to execute written waivers of confidentiality. Garwin, Beware of Beauty Contests: Proof of an Implied Attorney-Client Relationship Can Disqualify, 78 A.B.A.]. 84 (Jan. 1992). 4Comment, Attorney Malpractice: Use of Contract Analysis to Determine the Existence of an Attorney-Client Relationship, 63 Minn. L. Rev. 751, 759 (1978-1979). Compare Zych v.Jones, 84 Ill. App. 3d 647, 406 N.E.2d 70 (1980) (express contract required) with In re Palmieri, 76 NJ. 51, 385 A.2d 856 (1978) (contract may be inferred from conduct). 5291 N.w2d 686 (Minn. 1980).

15

§1.5


that at the conclusion of a 45- to 60-minute interview the attorneyinterviewer stated that "he did not think [there was a] legal case, [but that] he was going to discuss this with his partner." The attorney did not request medical authorizations or advise the claimant of the applicable statute of limitations. The attorney did not discuss fees with the interviewee or bill her for the consultation. When the claimant did not hear from counsel, she assumed that "there wasn't a case,"6 and did not consult another lawyer until the period of limitations governing the original tort claim had expired. The attorney's defense in the resulting legal malpractice action was that no attorney-client relationship was created by his discussions with the claimant. Some record evidence indicated that the claimant recognized no more than a week after the interview that the attorney would not represent her-apparently well before the statute of limitations had run.' In other words, the case presented the issue whether an interviewee could successfully mount an action for damages arising from a lost claim when the interviewee had concluded within the period of limitations that the attorney was not going to take any further action on the case. To the surprise of many observers, the Minnesota Supreme Court affirmed a jury award totalling $649,500-after observing that the evidence supported the conclusion that the defendant attorney had "failed to perform the minimal research that an ordinarily prudent attorney would do before rendering legal advice," and that the defendant attorney had been "negligent in failing to advise [the claimant] of the two-year medical malpractice limitations period." Miller v. Meteinget" is another significant case. In Miller, liability was imposed on a lawyer who agreed to conduct an investigation of a potential medical malpractice claim. The lawyer notified the claimant a few days before the statute of limitations ran that he lacked the expertise to handle the case and was referring it to a specialist, without notifjing the claimant if the date on which the claim would be time-barred. As a result, the claimant contacted the referral firm after the statute had run. In reversing a summary judgment in favor of the attorney, the appellate court observed that "a breach of duty could be found in [the attorney's] failure to advise plaintiffs of the necessity to act promptly ... , in view of 6Id. at 690. 7Gomment, supra note 4, at 751 n. 6 (citing trial transcript). 891 Gal. App. 3d 31, 154 Gal. Rptr. 22 (1979).

16

Conunencing

Litigation

§1.5

the fact that there were only a few days remaining within which to institute an action."? There are obvious differences between Togstad and Miller. The attorney in Miller apparently examined the available records, but did not venture an opinion as to the merits of the case. The only act of negligence he allegedly committed was failing to advise the client of the need for prompt action upon the referral. When compared with Togstad, however, it is much easier to conclude that the attorney in Miller had undertaken to perform some legal service for the potential plaintiff at or about the time that the claim was lost, even if that service was only to find another attorney competent to handle the matter in a timely fashIon. Togstad and Miller contain a common thread: Giving incorrect legal advice to a potential client or failing to advise a potential client of an applicable period of limitations can result in attorney liability in tort. 10 What advice should a lawyer give if it is not clear whether the client has a cause of action? In Procanik v. Cillo, 11 the potential clients consulted a general practitioner about a claim for the "wrongful birth" of their son. The general practitioner consulted two specialists regarding the viability of such a claim under New Jersey law. At the time of the consultations, a decision of the highest state court precluded such an action. However, the specialists knew that the adverse precedent might be ripe for review and had discussed the prospect of securing a reversal. The specialists sent a letter to the general practitioner in which they declined the case, but noted the adverse authority. In turn, the general practitioner sent the client a letter in which he declined the case based on the specialist's advice, noted the client's freedom to obtain a second opinion, and advised the client of the applicable period of limitations. Before the letter was sent, an unofficial reporter noted the certification of a new lower court decision on a wrongful birth claim. Shortly after the lawyer declined the case, the same reporter published the full text of the state supreme court opinion, overruling the adverse authority relied 9154 Cal. Rptr. at 29. IOCf.Comment, supra note 4, at 758-759. Again, an absence of documentation led to conflicting testimony and uncertainty regarding the exact dates and content of the consultations. Millin; 154 Cal. Rptr. at 25-26,28-29. See also Meighan v. Shore, 40 Cal. Rptr. 2d 744 (Cal. App. 1995)(attorney has a duty to tell the spouse of a client about the spouse's potential claim for loss of consortium). 11226NJ. Super. 132,543 A.2d 985 (App. Div. 1988).

17

§1.5


on by the specialists. Months later, but before the expiration of the remaining period of the statute of limitations, this decision appeared in the official advance sheets. After deciding not to pursue the matter, and after the running of the period of limitations, the disappointed clients brought a malpractice action against the general practitioner and the specialists. While ultimately the lawyers were deemed not to be liable;" the appellate court made some sobering observations regarding a lawyer's advice about the state of the law when offered as an explanation for the rejection of a case: (1)When a lawyer, particularly a specialist, "declines a representation based on the state of the law which [the lawyer] undertakes to express, [the lawyer] knows or should know that the prospective client will depend on the reliability of the expression." (2)"If the law is settled, [the lawyer] is expected to know what it is and to state it accurately." (3)"If the law is unsettled, debatable or doubtful, [t]he lawyer is not required to be correct, usually determinable only by hindsight, but only to exercise an informed judgment based on a reasoned professional evaluation." (4) The lawyer is not "obliged to anticipate a change in settled law." If the lawyer believes that a change in settled law is possible, it is "surely enough for [the lawyer] to point out that that is so and why." 13

12543A.2d at 993. The court concluded that the explanation of grounds that was given was "professionally reasonable in the circumstances." [A] lawyer who correctly explains the existing decisional law of the jurisdiction, the recent disparate view of a sister jurisdiction, the consequent fact of potential change of decisional law on appeal, and the procedures for obtaining change has fulfilled any obligation he may have to explain his state-of-the-law reasons for declining the case. It was not a professional dereliction for him to withhold his gratuitous prediction of the prospect of success of an appeal, which would be taken to obtain a change in the law. 131d.at 994. Compare the words of Lord Denning in Whitehouse v.Jordan, 1 All E.R. 650 (1981) (a medical negligence case involving application of the error of judgment rule): Whenever I give ajudgment, and it is afterwards reversed by the House of Lords, is it to be said that I was negligent? So also with a barrister who advises that there is a good cause of action and it afterwards fails. Is it to be said on that account that he was negligent? ... Take heed of what has happened in the United States. "Medical malpractice" cases there are very worrying, especially if they are tried by juries who have sympathy for the patient and none for the doctor, who is insured.

18


§1.6

§1.6

Referral

Suppose that it is clear to the attorney that she does not already possessthe competence to handle the client's case. Both DR 6-101(A)(1)and Model Rule 1.1 require that the lawyer "become competent" to handle a case, associate with another lawyer competent to handle it, or refer it to someone else, rather than taking it on. I These requirements have been buttressed by the risk that if a general practitioner undertakes to perform professional services without a specialist's aid under circumstances in which a reasonably prudent practitioner would refer the matter, that attorney's performance may be judged against a specialist's standard of care. 2 That risk should be a powerful disincentive for practitioners tempted to undertake lucrative representations beyond their expertise. Unfortunately, the Code contains provisions discouraging referral of cases to specialists. There is an obvious economic disincentive to referral. Disciplinary Rule 2-107(A), governing division of fees among lawyers, states that fee-splitting among lawyers who are not associated in practice is unethical unless the division is made in proportion to the services performed and the responsibility assumed by each lawyer. "To merely recommend another lawyer or refer a case is not performing a legal service," and the referring attorney can collect no fee." In short, the referring lawyer cannot collect an unearned fee as a "broker,"! §1.6 'In re Deardorff, 426 N.E.2d 689 (Ind. 1981) (suspension for failure to confer with or associate with an attorney competent to handle the matter); Russo v. Griffin, 147 Vt. 20,510 A.2d 436 (1986) (discussion of duty to advise client of need for specialist). Perhaps the most charming statement of the lawyer's obligation to refer a case that she is not competent to handle can be found in Resolution XX of D. Hoffman, Fifty Resolutions in Regard to Professional Deportment (1836): Should I not understand my client's cause, after due means to comprehend it, I will retain it no longer, but honestly confess it, and advise him to consult others, whose knowledge of the particular case may probably be better than my own. 2Horne v. Peckham, 97 Cal. App. 3d 404,158 Cal. Rptr. 714, 720 (1979); see generally Mallen and Smith, supra § l.3 note 2, § 15.4; see also Johnston, Attorney Accountability in Kentucky-Liability to Clients and Third Parties, 70 Ky. LJ. 747, 751-763 (1981-1982). 3In re Diamond, 72 NJ. 139,368 A.2d 353, 354 (1976); Belli v. Shaw, 29 Wash. App. 875, 631 P.2d 980, 984-985 (1981), aff'd, 98 Wash. 2d 569, 657 P.2d 315 (1982); see also Lemond v.Jamail, 763 S.W.2d 910 (Tex. App. 1988) (attorney who referred case for one-third of the attorney fees recovered not entitled to that referral absent client's consent). 4Scolinos v. Kolts, 44 Cal. Rptr. 2d 31 (Cal. App. 1995) (referring lawyer not entitled to referral fee because arrangement was not disclosed to the client; application of California rule similar to Model Rule 1.5).

19

§1.6


The tension between the economic disincentives in DR 2-107(A) and the notion that a failure to refer may be malpractice> led to the ABA'sadoption of Model Rule 1.5(e): A division of fee between lawyers who are not in the same firm may be made only if: (1) the division is in proportion to the services performed by each lawyer or, by written agreement with the client, each lawyer assumes joint responsibility for the representation; (2) the client is advised of and does not object to the participation of all the lawyers involved; and (3) the total fee is reasonable.

Model Rule 1.5(e)-which allows fee-splitting pursuant to a written contract after full disclosure-has been touted as a way to "get complex cases into competent hands and protect the client from ignorance and overpayment."6 The philosophy of the rule appears to be that responsible brokering of cases can be desirable. This does not mean, however, that a lawyer may simply sell a client's cause to another lawyer for a share of the fee. The benefits of fee-sharing come at a price. At a minimum, the 'joint responsibility" referred to in Model Rule 1.5(e)entails the obligations set forth in Model Rule 5.1, dealing with the responsibilities of one lawyer for another lawyer's violation of the rules of professional conduct. 7 Responsibility also entails malpractice accountability, which means the referring lawyer has an ongoing obligation to the client to monitor the performance of the referral lawyer. 8

-'GranelE, Referral Fees: Legal Kickbacks?, Natl. LJ. Apr. 27,1981, at 1. 61d.at 10 n.72 (quoting the late Robert Kutak). Accord Moran v. Harris, 131 Cal. App. 3d 913, 182 Cal. Rptr, 519 (1982) ("If the ultimate goal is to insure the best possible representation for a client, a forwarding fee is an economic incentive to less able lawyers to seek out experienced specialists to handle a case."). 7Model Rule 1.5, Comment [4]. The client must, of course, know of the arrangement; see Scolinos, 44 Cal. Rptr. 2d 31 (referring lawyer not entitled to referral fee because arrangement was not disclosed to the client; application of California rule similar to Model Rule 1.5). 8Hazard and Hodes, supra §1.2 note 2, §1.5:601 ("Presumably this cross-reference to Rule 5.1 is intended to mean that any two lawyers who split a fee become parties to a kind of ad hoc partnership, or joint professional venture, for purposes of the representation in question."). In ABA Informal Opinion 85-1514 (1985), the Committee stated that 'joint responsibility" means a degree of responsibility comparable to the financial and ethical responsibility of a lawyer in a law firm (i.e., malpractice liability).

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§1.7.1

Assume that there is no fee-splitting arrangement and hence no ongoing obligation to monitor the representation. Even then the referring lawyer should guard against "referral malpractice" by recommending only lawyers whose work is known or who are given favorable references by at least two lawyers familiar with their work. The referring lawyer's fingers should not merely walk through the Yellow Pages; they should pick up the phone and check reputations. Finally, the client should be informed of the basis on which the referral is made and told that the referring attorney is assuming no continuing monitoring responsibilities.?

§1.7

Neglect, Burnout, and Impaired Attorneys

The ethical rules requiring competence and diligence were discussed in § 1.3. This section addresses specific applications of these standards in the context of disciplinary proceedings and malpractice actions. Particular attention is paid to the problem of the impaired or disabled lawyer. Those terms refer to a lawyer whose practice is compromised by alcoholism or drug addiction. §1.7.1

Neglect

While DR 6-101(A)(3)provides that "a lawyer shall not neglect a legal matter entrusted to him," ethics committees and disciplinary authorities have ordinarily refrained from imposing sanctions for a single act or omission. For example, ABA Informal Opinion 1273 states that "neglect involves indifference and a consistent failure to carry out the obligations which the lawyer has assumed to his client or a conscious disregard for the responsibility owed to the client ... [and] usually involves more than a single act or omission."] Given this restrictive definition, 9Cf. Cohen v. Lipsig, 92 A.D. 2d 536, 459 N.YS.2d 98 (1983) (suit against lawyer for alleged negligence of outside counsel retained to try the case, for alleged failure to secure "informed consent" to the choice of outside counsel, and for negligent selection of outside counsel). See McManus, Malpractice Dangers in Tort Case Referrals, 24 Trial 62 (Aug. 1988). §1. 7.1 lABA Informal Op. 1273 (1973). Judge Sharswood's old "Essay" warned that "the members of the Bar are lynx-eyed [when] observing [a pattern of neglect]." G. Sharswood, An Essay on Professional Ethics 122 (5th ed. 1896).

21

§1.7.1


courts and bar counsel have been reluctant to impose punishment for isolated instances of negligence, such as allowing a claim to become time-barred," at least absent aggravating circumstances. Aggravating circumstances typically involve misrepresentation, deceit," or efforts to cover up error or frustrate a client's attempts to obtain redress. 4 To be sure there are rare cases in which discipline appears to have been imposed for simple neglect," and the language of Model Rule 1.3 and the Official Comments provides a basis for discipline for isolated errors and omissions. There is good reason, however, for courts and disciplinary authorities to exercise restraint and leave the malpractice suit as the principal deterrent. A lawyer has an obligation to inform the client that an act or omission has occurred that may constitute malpractice." Disciplinary authorities ought to encourage such disclosures and rely on the insurance-compensation system to make the injured client whole. The threat of disciplinary action will discourage disclosure and encourage the sort of deceit condemned in the reported cases. There is scant evidence that Model Rule 1.3 was intended to serve as the linchpin for a disciplinary campaign. If the disciplinary system should be invoked only for egregious cases of incompetence," caution should be exercised in imposing discipline under Model Rule 1.3. "The most common error of the attorney engaged in litigation is the failure to file the client's claim or cause of action within the time required by the statute of limitations.:" Expert testimony is not required

2Florida Bar v. Neale, 384 So. 2d 1264, 1265 (Fla. 1980). Cf. In re Goldstaub, 90 NJ. I, 446 A.2d 1192 (1982) (reference to a pattern and gross negligence). 3In re Deardorff, 426 N.E.2d 689, 692 (Ind. 1981) (elaborate three-year program of deception); Oklahoma Bar Assn. v. Paveto, 620 P.2d 392, 394 (Okla. 1980). 4Florida Bar v. Leopold, 320 So. 2d 819, 820, 822 (Fla. 1975) (efforts to limit liability); In re Rinzel, 107 Wis. 549, 319 N.W2d 873,874 (1982) (efforts to derail a legal malpractice suit by the injection of improper defenses and third-party claims against successor counsel). 5See, e.g., Kentucky Bar Assn. v. Yates, 677 S.W.2d 304, 305 (Ky. 1984); In re Crane, 400 Mich. 484, 255 N.W2d 624 (1977); In re Pump, 109 Wis. 588, 326 N.W2d 773 (1982). 6ABA/BNA Law. Man. Prof. Con. 1801:9107; Wis. Op. E-82-12 (1982). See also Mitchell v. Transamerica Ins. Co., 551 S.W2d 586 (Ky. 1977); Matter of Tallon, 86 A.D.2d 897,447 N.YS.2d 50 (1982); Philadelphia Op. 86-106 (1986) (lawyer must advise client if statute of limitations has been missed). 7C. Wolfram, Modern Legal Ethics 190 (1986). SMallen and Smith, supra §1.3 note 2, §19.3, at 154.

22

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§1.7.2

to establish the negligence of an attorney who is ignorant of the period of limitations or allows the limitation period to run.? Assume that the attorney discovers that he has allowed the statute of limitations to run. He should tell the client what has happened and, with the client's informed consent, file the suit, even though it is timebarred. Although there is some authority that a court may impose sanctions against an attorney who files a time-barred complaint;'? as a matter of ethics the complaint may be filed. A conventional statute of limitations provides an affirmative defense and does not render the claim meritless. II The ABA has opined that a lawyer may file a timebarred complaint unless prohibited by the law of the jurisdiction, and that a lawyer has no ethical duty to inform opposing counsel of the defense of limitations." The opinion states that ordinarily a lawyer should file a time-barred complaint to protect the client's interests. 13 §1.7.2

Burnout

In re Barry' and In re Loew2 are two cases that merit special interest not because they break new ground, but rather because they illustrate burnout, a common phenomenon, which is typically ignored and frequently denied. On the one hand, these cases are similar in that both involved an attorney's failure to meet a statute of limitations or other procedural deadline, but not as the result of simple inadvertence. On the other hand, they differ with respect to the age and experience of the attorneys involved. While Barry deals with the plight of a young attorney who had allowed himself to be subjected to professional demands beyond his capacity, Loew involved a seasoned, successfulspecialist.

9Id. §27 .15, at 672. IOBrubaker v. Richmond, 943 F.2d 1363 (4th Cir. 1991); Van Berkel v. Fox Farm and Road Mach., 581 F. Supp. 1248 (D. Minn. 1984). IICf. Gaiardo v. Ethyl Corp., 835 F.2d 479 (3d Cir. 1987); see also Williams v. Giant Eagle Mkts., 883 F.2d 1184 (3d Cir. 1989); Teamsters Local Union No. 430 v. Cement Express, 841 F.2d 66 (3d Cir. 1988). 12ABAFormal Op. 94-387 (1994). 13Id. §1.7.2 190 NJ. 286,447 A.2d 923 (1982). 2292 Or. 806, 642 P.2d Illl (1982).

23

§l. 7.2


In Barry, the malpractice of a newly admitted lawyer came to light when a client "came storming into [the] office," demanding to see one of the lawyer's superiors. The supervising attorney related the following scenario to disciplinary authorities: At this point 1 asked [the younger attorney] to get the file and come in. He brought in a file jacket with [what], 1 believe, was the original letter I had gotten in the file and turned it over to Tom and I said, "bring me the whole file." 1 looked at it and saw the original letter from when 1 turned it over to him and asked him for the balance of the file and he said, "That's it." He didn't do anything on the file [although the case had supposedly been in progress for at least four years]. 1 gulped, like I am gulping now, and asked ifhe had filed the complaint and he indicated that he hadn't, and at that point I called my partners ... to come down to the office and indicated, "1 think we have a problem."?

Unfortunately, 18 or so other files were in the same shape. This situation should not have come as a complete surprise to the firm. The newly admitted lawyer had been carrying 200 cases. In Loeio, disciplinary charges were filed against an experienced litigator representing a client in a licensing proceeding before the National Transportation Safety Board. After suffering an adverse ruling before an administrative law judge, the client urged counsel to pursue an appeal. After filing a notice of appeal, counsel failed to submit a brief, although three extensions of time were granted. When the appeal was dismissed, counsel even failed to capitalize on an opportunity to reopen the appeal. For almost a year between the filing of the notice of appeal and counsel's discharge, the client placed nearly 40 telephone calls to counsel that went unanswered and unreturned. The Supreme Court of Oregon reluctantly concluded that a temporary suspension from practice was warranted. What these cases have in common is that both attorneys were wellintentioned people who came to grief in part because they tried to do too much. As a result, the younger of the two began "suffering from psychic conflicts, ... [developed] anxiety related to his work setting, and [became unrealistic in] his thinking and reasoning .... "4 The more

3447 A.2d at 924. 4Id. at 925.

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§1. 7.2

experienced attorney became afflicted with what a psychiatrist styled the "burnt-out syndrome." A common pattern of the syndrome is that a professional person feels obligated to help each person who seeks his help, takes on more work than he can handle, including work he finds unpleasant, and evades such work by procrastination and self-denial. 5

Burnout may be defined "broadly as the loss of interest in something which was previously the object of great enthusiasm [and] is all too frequently self-medicated with drugs and alcohol, rounding out the picture of a psychologically-based affliction with tangible medical consequences."6 Lifestyle changes (diet, exercise, etc.) and changes in firm policy can prevent and alleviate burnout. Among changes suggested are 1. restoring collegiality (easier said than done), 2. establishing reasonable work and billing expectations, 3. recognizing good work, and 4. providing some form of sabbaticals. 7 The tragedy of the fledgling associate in Barry might have been avoided had his law firm followed the recommendation of the dissenting justice in the reported opinion and instituted "a systematic, organized routine for periodic review of a newly admitted attorney's files.?" Mentoring within the firm should identify lawyers who cannot handle the volume of work assigned to them. Firms should recognize that unrealistic billahle hour demands create the potential for malpractice as well as the "virtual certainty" that attorneys will overstate their hours and, in effect, cheat their clients." 5642 P.2d at 1173. See also Gould, "Burnout": Law and Disorder, Natl. LJ. 13, Apr. 30, 1984, at 13. 6Drogin, Alcoholism in the Legal Profession: Psychological and Legal Perspectives and Interventions, 15 Law & Psychol. Rev. 117, 121 (1991). 7Gould, supra note 6, at 125. 8447 A2d at 926. 9Rosner, Professionalism and Money, 78 AB.A J. 69 (May 1992). ABA Formal Op. 93-379 (1993) speaks to the ethics of billing, condemning such artifices as the "25 hour day." See also the devastating article, Lerman, Lying to Clients, 138 U. Pa. L. Rev. 659, 674 (1990): When firms reach the maximum hourly rates at which clients will pay for associates, they generate dollars by increasing the ratio of hours that each associate

25

§ 1.7.3


§1.7.3 Impaired Attorneys Substance abuse-usually alcohol, occasionally drugs-is a problem of major concern to the profession. In days gone by, the drinking lawyer was a source of humor. 1 No longer. Donna Spills, Staff Director for the ABA Commission on Impaired Attorneys, reported in 1991 that, for example, 60 percent of Oregon attorneys and 80 percent of Georgia attorneys targeted by malpractice claims were chemically dependent." A state of Washington study reported that 25 percent of lawyers in practice over 20 years have a problem with drugs or alcohol." Awareness of the problem has increased as lawyers whose lives and careers have been harmed by alcohol have come forward to tell their stories." In response to the problem, the American Bar Association promulgated a program for firms, bar associations, and law schools," and must bill annually. If there is not enough work available for an associate to bill legitimately the required number of hours, the associate must choose: (1) to do unnecessary work; (2) to lie about the number of hours worked; or (3) to fail to meet the firm minimum and reduce her chances of becoming a partner. §1.7.3 'See Flener v. Commonwealth, 514 S.W2d 201 (Ky. 1974), in which the trial court refused to continue a case with the observation that the lawyer in question was "both an old, experienced trial lawyer and an old, experienced drinker ... who would be in a much better position to help you drinking than if he wasn't drinking because then he would have such a terrible hangover he wouldn't be of much help." (The appellate court was not amused and reversed the conviction.) In an earlier day, drinking, even in court, was more or less socially acceptable. In Farmer, Legal Practice and Ethics in North Carolina 1820-60, 30 N.C. Hist. Rev. 329, 334 (1953), the author observed that, the courthouse being the center of activity, "the spectators not only watched the trials, but often indulged in drinking while at court." Quoting a courtwatcher of the day: I noticed a good deal of drinking going on to day, and the whiskey drinkers have today, I suppose, been carrying out this very consistent principle of that class: That to drink in damp and cold weather will warm, and that to drink in hot weather it will cool them. Ah! Consistency, thou art aJewel! In Dickens' Case, 67 Pa. 169,5 Am. Rep. 420 (1871), the court found that attorney Dickens had tried to get his opposing counsel drunk in order to gain an advantage and "should be expelled from [the] bar ... or at least should be suspended from the practice" for this "wicked act." 2D. Spills, American Bar Assn., An Overview of Lawyer Assistance Programs in the United States (1991). 3T. Morgan and R. Rotunda, Professional Responsibility 55 (6th ed. 1995). 4Drogin, supra §1. 7.2 note 6, at 128-129 (personal histories of alcoholic lawyers). 5Alcohol and Drug Abuse Programs for Lawyers and Judges, ABA, 750 N. Lakeshore Dr., Chicago, Illinois 60611.

26

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§1.8

every state has some type of lawyer assistance program, many modeled on the ABA program." In 1991, Model Rule 8.3 was amended to exempt from the reporting requirement "information gained ... while serving as a member of an approved lawyer assistance program to the extent that such information would be confidential if communicated subject to the attorney-client privilege." An example of an approved lawyer assistance program is "The Other Bar," a California support group with 25 chapters and thousands of members." These programs take their obligation to the profession and the public seriously and have had substantial success dealing with disability associated with alcohol and other substance abuse. Courts and disciplinary authorities increasingly recognize that alcoholism is a disease-a disease that can cause great injury not only to the lawyer, but also to the public." The lawyer should be helped, and the public must be protected. Thus, suspension or supervised probation may be appropriate in any case when it appears that the conduct in question, even if unrelated to the practice, was caused by alcohol. 9 Lawyers and judges no longer excuse excessive drinking as an "occupational disease."

§1.8

Preventive Law-Avoiding Liability to the Client

The discussion of reported cases in §§1.5 through 1.7 provides convincing evidence of the need for more formalized, systematic office practice. In addition to the observations regarding interviewing and counseling in §1.4, the following problem-specific suggestions are offered.

6Spills, supra note 2. 7Cal. Bar j.,june 1994, at 6. 8In re Kersey, 520 A.2d 321 (D.C. 1987); see generally Drogin, supra §1.7.2 note 6, at 133-157 for an analysis of the cases. 9520 A. 2d 321; see as an example In re Kelley, 52 Cal. 3d 487, 801 P.2d 1126, 276 Cal. Rptr. 375 (1990) (public reprimand and referral to state bar alcohol abuse program for second DUI offense).

27

§1.8.1

§1.8.1


Non-engagement and Disengagement

Perhaps the best checklist of precautionary measures to reduce the threat of litigation by one whose case has been rejected or referred is found in the "Legal Malpractice Avoidance Checklist": 1 1. Write the interviewee to clearly state that the firm is not taking the case, 2. Advise of the applicable statute of limitations (or at least that there are time limits within which the claim must be brought)," 3. Urge the interviewee to seek other counsel as soon as possible, 4. Avoid stating why the claim is being rejected, 5. Obtain a court order releasing you if you are attorney of record, and 6. Return any documents to the client. As a general proposition, avoid premature advice. As the plaintiffs expert witness testified in Togstad v. Vesaly, Otto) Miller and Keife,3 before rendering advice to a potential client, a lawyer should obtain appropriate authorizations, review the available records, and consult with an expert in the field, if consultation with a specialist is necessary. §1.8.2

Calendar Control

Office dockets, calendars (desk or electronic), and "tickler" files are effective means of avoiding missed procedural deadlines. There is an excellent discussion of such systems in Mallen and Smith, the standard reference on legal malpractice.' Generally, a sound system of calendar control should include the following: §1.8.1 'Fortune and O'Roark, supra §1.4 note 10, at 637, adapted from Blumberg and Baughman, Preventing Legal Malpractice: California Case Studies 151 (1989). See generally Mallen and Smith, supra §1.3 note 2, ch. 2. 21n Flatt v. Superior Court (Daniel), (Cal. Dec. 28, 1994), 10 ABA/BNA Current Reports 408 (Jan. 11, 1995), the California Supreme Court held that there is no duty to advise a potential client of the statute of limitations when the claim is against a present client of the firm; the duty to the present client prevails. 3291 N.W.2d 686 (Minn. 1980). §1.8.2 'Mallen and Smith, supra §1.3 note 2, §2.20; see also]. Smith, Preventing Legal Malpractice 29-66 (1981); Fortune and O'Roark, supra §1.4 note 10, at 637.

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§1.8.3

1. a method of indexing the deadlines or appointments (due dates for the filing of pleadings, motion papers, discovery events, pretrials, court appearances, and statutes oflimitations); 2. a control officer to spot-check input and compliance; 3. a firm policy for dealing with noncompliance, at both the input and the execution stages; 4. a tickler system that issues a reminder to the attorney responsible for the file on an internal due date prior to the actual deadline; and 5. a dual system with the attorney and secretary keeping matched calendars.

§1.8.3

The Problem of the Missing Client

Should a lawyer file a suit to toll the statute oflimitations on behalf of a client who has disappeared? The problem of the missing client and the statute of limitations has been addressed in several bar opinions. The ABA took the position that a lawyer has no ethical obligation to file a lawsuit to toll the statute oflimitations if the client's whereabouts are unknown. However, the ABA hedged, both by limiting its opinion to situations in which the loss of contact cannot be attributed to the lawyer and by observing that the Committee could not address the malpractice implications of the scenario.' All things being equal, it would appear that a Virginia opinion points down the safer path-the lawyer should file the pleading and then move to withdraw. 2 A client's failure to maintain contact with her attorney is good ground for the attorney's motion to withdraw" The attorney must move to withdraw at the point when failure to reveal the client's status would involve misstating facts to the court." Because there may be serious consequences if the client decides to leave without a forwarding address, the following should be part of the interview process: I. Obtain all phone numbers can be reached,

and addresses at which the client

§1.8.3 lABA Informal Op. 1467 (1981). See also Ala. Op. 87-98 (1987). 2Va. Op. 841 (1986). 3Model Rule 1.16(b)(4).

4Model Rule 1.16(a)(l).

29

§1.8.3


2. Impress on the client the importance of keeping the attorney informed of vacation plans and changes of address or phone number, and 3. Obtain the names and addresses of persons likely to know of the client's whereabouts.

§1.9

Countersuits

Most American lawyers matured in a professional environment in which the trial attorney enjoyed absolute or near absolute immunity to nonclients for conduct during the course of judicial proceedings. This was certainly true with regard to the countersuit for defamation, so long as the defamatory statement was relevant to and published in the course of judicial proceedings. I Because fear of countersuits for defamation might deter litigants from fully pressing their claims, such suits were not to be entertained.i Similarly,because of the potentially chilling effect of malicious prosecution actions, many courts either accorded trial counsel an absolute immunity" or erected at least partial barriers to such suits. It is true that in the past few years the wisdom of these barriers has been questioned. In particular, much attention has been given to the countersuit for malicious prosecution as a mechanism to secure redress §1.9 ISee, e.g., The King v. Skinner, 98 Eng. Rep. 529, 530 (K.B. 1772). For modern cases, see Arneja v. Gildar, 541 A.2d 621 (D.C. 1988) (privilege applied to insult directed at foreign attorney, which took place in a hearing room prior to the arrival of the hearing examiner-court suggested that disciplinary charges might be brought); Levin, Middlebrooks, Mabia, Thomas and Mitchell PA v. U.S. Fire Ins. Co., (Fla. Sup. Ct. 82649,June 30, 1994), 10 ABA/BNA Current Reports 209 (July 27, 1994) (no liability for manipulating disqualification of counsel). See also Theiss v. Shener, 396 F2d 646, 649 (6th Cir. 1968); Hyde Constr. Co. v. Koehring Co., 387 F Supp. 702, 720-721 (S.D. Miss. 1974). 2Petty v. General Accident Fire and Life Assurance Corp., 365 F2d 419, 421 (3d Cir. 1966); Note, Absolute Immunity in Defamation: Judicial Proceedings, 9 Colum. L. Rev. 463, 478 (1909). 3E.g., Forberg v. Stumbos and Mason, 217 Cal. App. 1171, 266 Cal. Rptr. 436 (1990); W D. G. Mutual Mfg. Co., 50 Ohio Op. 3d 397, 399-400 (Ct. App. 1976). In an early English case, the court observed per totam curiam that an action would not lie against "two attorneys and two solicitors" who had brought an action against the plaintiff "in an Inferior Court,jalso et malitiose knowing that there was no cause of action against him ... for that what [the lawyer] does, is only as servant to another, and in the way of his calling and profession." Anonymous, I Mod. 209 (K.B. 1677). But compare The Highwayman's Case, Everet v. Williams, reported as having been decided in the

30


§1.9

for the burdens and expenses of unwarranted civil litigation. However, with some notable exceptions," courts have been reluctant to abandon time-honored immunities. At the very least, courts have retained some attorney-favorable hurdles for aggrieved litigants. 5 For example, the so-called English Rule has survived in a number of jurisdictions. By virtue of this English common law rule, "the malicious prosecution doctrine is not extended to a civil proceeding, even though this proceeding is instituted for an improper purpose and without probable cause, unless there is an arrest of the defendant in that civil action, seizure of his property, or some other special injury to him.:" This rule rests on a number of beliefs: An award of costs provides an adequate remedy for abuse; the judicial process should remain open without fear of countersuit; the abandonment of such a limitation would lead to endless litigation; and, finally, a defendant should not have such a right if the plaintiff has no equivalent redress for a meritless and malicious defense.' In addition, the rule has the salutary effect of forcing the plaintiff to substantiate conclusory allegations of injury to reputation attributed to the alleged vexatious proceeding. 8 Court of Exchequer in 1725 according to G. Costigan,Jr., Cases on Legal Ethics 399400 (1917). The essence of the case was that the plaintiff highwayman sued the defendant highwayman for a share of the loot the two had separated from rightful owners. The solicitors for the plaintiff were fined, and counsel was taxed costs. Professor Costigan's report indicates that "[t]he plaintiff was executed at Tyburn in 1730, the defendant at Maidstone in 1735," and that "Wrcathcock, one of the solicitors, was convicted of robbery in 1735, but was reprieved and transported." 'See, e.g., Raine v. Drasin, 621 S.W.2d 895 (Ky. 1981); Peerman v. Sielicane, 605 S.W2d 242 (Tenn. App. 1980). 5Baxt v. Liloia, (NJ. Super. Ct. App. Div. Apr. II, 1995), 11 ABA/BNA Current Reports 144 (May 31, 1995) (no liability to opponent for ethical violation; discipline is the appropriate remedy for violation of ethical rules). 6Ayildiz v. Kidd, 220 Va. 1080,266 S.E.2d 108, 111-112 (1980) (dismissal for failure to allege "special injury"). 7Skarbinski v. Henry H. Krause Co., 378 F.2d 656, 657-658 (6th Cir. 1967); Kalso Systemat, Inc. v.Jacobs, 474 F. Supp. 666 (S.D.N.Y 1979); Underwood, Curbing Litigation Abuses: Judicial Control of Adversary Ethics-The Model Rules of Professional Conduct and Proposed Amendments to the Rules of Civil Procedure, 56 St. John's L. Rev. 630 (1981-1982). BUnderwood, supra note 7, at 633 nn.35-36 (allowing recovery without special injury because the reputation of the defendant physician had been "assailed" by the pleadings) (questioning Raine). Raine v. Drasin, in effect, allows the litigant to circumvent the absolute privilege for statements made in pleadings by changing the label on the countersuit. Cf. O'Toole v. Franklin, 279 Or. 513, 569 P.2d 561 (1977) (rejecting alleged injury to reputation as a "special injury" for purposes of the English Rule).

31

§1.9

COIllIl1encing Litigation

Similarly, although a few jurisdictions have adopted an objective test of reasonableness as the standard of care or culpability in malicious prosecution actions," other courts have rejected an objective test as "inconsistent with the role of the attorney in the adversary system." 10 This is understandable, particularly when a court is examining attorney conduct involving a last-minute interview or referral: A lawyer may be confronted with the choice between allowing the statute of limitations to run upon a claim with which the client has only recently come forward, or promptly filing a lawsuit based on the information at hand .... Time will not always permit "a reasonable investigation and industrious search oflegal authority" before the lawyer must file a complaint to preserve the client's claim-and thus, perhaps, avoid an action by the client for legal malpractice. I I The fear that an objective standard might result in a proliferation of countersuits is reflected in the successive drafts of the Model Rules. The 1981 Proposed Final Draft of Rule 3.1 provided that "a lawyer shall not bring or defend a proceeding ... unless there is a reasonable basis for doing SO."12 Shortly thereafter, the rule was amended to require only "a basis for doing so that is not frivolous," but a comment was retained to the effect that the amended standard was an "objective one."!" When the rule was finally adopted, all references to an objective 9Bird v. Rothman, 128 Ariz. 599, 627 P.2d 1097 (1981); Tool Research and Eng. Corp. v. Henigson, 46 Cal. App. 3d 675,120 Cal. Rptr. 291, 297 (1975); Sommerv. Carr, 99 Wis. 2d 789, 299 N.w.2d 856 (1981). IOFriedman v. Dozorc, 412 Mich. 1,312 N.W2d 585, 604 (1981). Cf. 42 Pa. Cons. Stat. ch. 83, §§835 1-8354, styled Wrongful Use of Civil Proceedings (defining probable cause in terms of a "reasonable belief" in the existence of the facts on which the claim is based, but also incorporating a "good faith ... not intended to merely harass or maliciously injure the opposite party" standard running to the benefit of counsel). 11312N.W2d at 604. 12Underwood, supra note 7, at 637 n.55. 13Id. at 637. A Georgia opinion points out that while DR 7-102(A)(2) provides a subjective test, so that the rule is violated only when the lawyer knows that the claim is unwarranted, ECs 7-4 and 7-5 counsel the avoidance of "frivolous" claims. According to this opinion, EC 7-4 does not require complete factual support prior to filing, but does require that a reasonable attorney would conclude that there is a reasonable possibility that facts supporting the claim can be established after the claim is filed. Although this appears to be an objective test, it gives the lawyer considerable leeway to file a claim when he is up against the statute of limitations, so long as there is a reasonable possibility thatlater discovery will substantiate the claim. See Ga. Formal Op. 87-1 (1987). Similar comments can be found in Kraemer v. Grant County, 892 F.2d 686 (7th Cir. 1990).

32


§1.9

culpability standard were deleted from the comments, although the Code Comparison continues to refer to an "objective test." 14 Even in jurisdictions approving an objective standard, there is some evidence that the judiciary accords lawyers special treatment. For instance, the Supreme Court of California concluded that the "objective tenability of [an action giving rise to a claim for malicious prosecution] is a question of law" for the trial judge. The California court thereby precluded the testimony of adverse lawyer experts before a lay jury. 15 On the other hand, the Supreme Court of Georgia recognized a common law remedy merging the torts of malicious prosecution and abuse of process and announced its applicability to discovery abuse as well as groundless claims and counterclaims. The court defined the elements of this tort in the following language: Any party who shall assert a claim, defense, or other positron with respect to which there exists such a complete absence of any justiciable issue of law or fact that it reasonably could not be believed that a court would accept the asserted claim, defense, or other position; or any party who shall bring or defend an action, or any part thereof, that lacks substantial justification, or is interposed for delay or harassment; or any party who unnecessarily expands the proceedings by other improper conduct, including, but not limited to, abuses of discovery procedures, shall be liable in tort to an opposing party who suffers damage thereby. 16

141naJanuary 20, 1982, letter from the ABA Standing Committee on Lawyers' Professional Liability to the Kutak Commission, concern was expressed that the "reasonable basis" language in [proposed Rule 3.1] is a misinterpretation of existing civil law, a deviation from the present Code and a potentially serious infringement on the obligations of an attorney to a client denoted in the existing Code and Model Rules. This letter is reprinted in Appendix C of L. Patterson, Legal Ethics: The Law of Professional Responsibility (3d ed. 1989), 15Sheldon Appel Co. v. Albert and Oliker, 47 CaL 3d 863, 765 P.2d 498,254 CaL Rptr, 336 (1989). The court emphasized counsel's obligation to his client as a basis for resisting the notion that counsel must conduct adequate research before filing a claim (applying logic that is at least subject to challenge). For the position that the issue of probable cause should be viewed as a question for the court and not the jury, and for the argument that too much use is made of lawyer experts in legal malpractice cases generally, see Liebson, Legal Malpractice Cases: Special Problems in Identifying Issues of Law and Fact and in the Use of Expert Testimony, 75 Ky. LJ. 1 (1986-1987). "Yost v. Torok, 256 Ga. 92, 344 S.E.2d 414 (1986).

33

§1.9

Cornrnericing Litigation

In effect, the court fashioned a common law Rule 11, imposing liability on lawyers whose pleadings are deemed "unjustified." This holding at least has the virtue of compelling allegedly aggrieved parties to assert their grievances against opposing counsel in the same "case" (with bifurcation) or waive them, thereby avoiding successiverounds oflitigation.

§1.10 Lim.itation of Objectives Model Rule 1.2(c)has no counterpart in the Code and provides that "a lawyer may limit the objectives of the representation if the client consents after consultation." Comment [5], however, provides that "the client may not be asked to agree to representation so limited in scope as to violate Rule 1.1 [the requirement of competence]." Case law teaches that an attorney may not safely ignore a client's potential claims merely because the lawyer's retainer did not specifically mention such claims. For example, in Daugherty v. Runner, I an attorney was retained by a decedent's estate to pursue a wrongful death action arising out of an automobile accident. The attorney did not pursue a potential malpractice claim against the hospital that had treated the decedent before her death. In a subsequent legal malpractice action, the attorney testified that he was not hired to pursue the malpractice claim. Although the appellate court affirmed a jury verdict for the attorney-defendant on the evidence presented at trial, the court opined: We are not ready to hold that [the attorney] had absolutely no duties to his client with regard to a medical malpractice action simply because the written contract did not specifically mention a malpractice suit. To do so would require the client, presumably a layman who is unskilled in the law, to recognize for himself all potential legal remedies. An attorney cannot completely disregard matters coming to his attention which should reasonably put him on notice that his client may have legal problems or remedies that are not precisely or totally within the scope of the task being performed by the attorney. 2

If the attorney recognizes or should recognize a potential claim, the attorney must notify the client, even if the attorney was hired for §1.10 1581 S.W2d 12 (Ky. App. 1979). 2Id. at 17.

34


§1.11

another purpose.t If the lawyer discharges the duty of notification, the rules permit limited representation after consent and consultation. 4 The prudent attorney would memorialize any limitations in a letter or other writing to the client.

§1.11 Limitation of Malpractice Liability Ethical Consideration 6-6 proclaims that "a lawyer who handles the affairs of his client properly has no need to attempt to limit his liability for his professional activities .... " Disciplinary Rule 6-102 prohibits "attempts" by the lawyer to exonerate himself from malpractice liability, as well as actually limiting his malpractice liability "by contract or other means." In several cases, counsel have been disciplined under this provision for attempting to secure a release from malpractice liability late in the representation. Sometimes improper leverage was applied, for example, by withholding either the client's portion of settlement proceeds I or the client's papers or file." Such conduct is unethical and may even be tortious." By analogy, it would be unethical for an attorney to attempt to shift to the client sanctions personally imposed on the attorney" Model Rule 1.8(h) modifies DR 6-1 o 2(A) by allowing attorneys to attempt to compromise malpractice claims if the client is first advised in writing of the desirability of independent counsel. 5 In addition, the rule 3C£jackson v. Pollick, 751 F. Supp 132, 134 (E.D. Mich. 1990),qJf'd, 941 F.2d 1209 (6th Cir. 1991) (the fact that the attorney was a specialist was evidence that he was not hired to represent the client on a matter outside his specialty). 4See Medina, Ethical Concerns in Civil Appellate Advocacy, 43 Sw. LJ. 693 (1989). §1.11 'Lanigan v. Scharton, 238 Mass. 468,131 N.E. 223 (1921); Ames v. Putz, 495 S.W2d 581 (Tex. Civ. App. J 973). 2Nolan v. Foreman, 665 F.2d 738, 743 (5th Cir. 1982) (client may sue for money damages based on attorney's breach of ethics and fiduciary duty). 3Wade v. Murphy, 196 Ark. 448,118 S.W2d 232 (1938). One of the authors has received several inquiries from lawyers regarding the propriety of tendering a check for a fee refund once the client suspects malpractice, with the note "in full satisfaction of all claims." The author recommended against such sharp practices. See Ambrose v. State Bar, 31 Cal. 3d 184, 643 P.2d 486, 181 Cal. Rptr. 903 (1982); People v. Good, 195 Colo. 177,576 P.2d 1020 (1978). "See N.Y Op. 1989-3 (1989) (DR 6-102 applies by analogy to prohibit an attorney from limiting his liability for sanctions; DR 7-102(A)(l) and (2) contains essentially the same standards as Rule 11).

35

§1.11


eliminates the absolute prohibition of prospective limitations of the lawyer's liability; the rule authorizes contractual limitations that are "permitted by law" if the client is independently represented." However, this provision must be reconciled with Model Rule 1.2, Comment [5J, stating that "the client may not be asked to agree to representation so limited in scope as to violate Model Rule 1.1 [Competence J." Presumably, the key to a waiver is the requirement of independent representation, which furnishes assurance that the client will be fully informed." This procedure will be utilized by the sophisticated client who hires lawyers for specific tasks in circumstances where the client is willing to assume a certain amount of risk in return for a lower fee. Preventive Ethics Checklist Before the Initial Client Interview Research the applicable law to the extent possible based on what you know of the client's problem. Have available the appropriate checklists, interview forms, and releases. Direct the client to bring all documents that might bear on the problem. Check for conflicts with present and past firm clients.

o

o o o

The Client Interview If you are unsure whether there may be a conflict with a firm client (past or present), obtain only the information necessary to check for conflicts; have the would-be client sign a waiver of confidentiality. o Concentrate on establishing a relationship of trust.

o

5Model Rule 1.8(h). See Florida Bar v. Nemec, 390 So. 2d 1190 (Fla. 1980); In re Goldberg, 82 A.D.2d 572, 442 N.YS.2d 551 (1981). Occasionally, compromise agreements have been held to be improper, even with the advice of independent counsel. Cohen v. Surrey, Karasik and Morse, 427 F. Supp. 363 (D.D.C. 1977); Florida Barv. Leopold, 320 So. 2d 819 (Fla. 1975). 6See D.C. Op, 190 (1988) (upholding arbitration clause); Md. Op. 90-12 (1990) (lawyer may not include arbitration clause in contract unless client independently represented regarding advisability of same). 7C( ABA Formal Op. 93-372 (1993) (allowing waivers of future conflicts of interest if the client is fully informed).

36


D D D

D

§1.11

Avoid premature diagnosis; do not render an opinion without a sound basis for the opinion. Obtain as much information as you can consistent with the primary objective of establishing a relationship of trust. Obtain all telephone numbers and addresses of the would-be client, and impress on the client the necessity of keeping you informed of her whereabouts. Set a time and date for a second meeting, and give the client a task to do in the meantime.

Accepting the Case D Prepare a written contract of employment, spelling out the services to be rendered and the basis of the fee. D State clearly in writing any limitations on the representation (e.g.,that you are representing the client only on her claim for breach of employment contract). Rejecting the Case D Write a non-engagement letter clearly stating that you are not accepting the case. D Avoid stating why the claim is being rejected. D Advise the would-be client of the statute of limitations (or at least that there are time limits within which the claim must be brought). Referrals

D

D

If you expect to obtain a share of the fee paid to the referral lawyer, consult the ethical rules in your jurisdiction; the Code allows you to share only to the extent of work you perform; the Model Rules allow you to share on that basis or on the basis of shared responsibility, so long as the client consents in writing. Whether you expect to obtain a share of the fee or not, refer would-be clients only to those lawyers for whom you have a sound basis to believe they will perform competently and for a reasonable fee.

37

2 Commencing Litigation: Judicial Sanctions

§2.1

§2.2

§2.3

§2.4

Introduction §2.1.1 Inherent Power §2.1.2 28 U.S.C. §1927 §2.1.3 Introduction to Rule II-The 1983 and 1993 Versions §2.1.4 The 1993 Amendments to Rule 11 The Requirements of Rule 11 §2.2.1 Duty with Respect to the Facts §2.2.2 Duty to Reevaluate Factual Allegations §2.2.3 Duty with Respect to the Law §2.2.4 Improper Purpose The Motion for Sanctions §2.3.1 Responsibility ofthe Moving Party §2.3.2 The "Safe Harbor" Provision of 1993 Rule 11 §2.3.3 Who May Be Liable for Sanctions §2.3.4 Procedural Aspects §2.3.5 The Appropriate Sanction Contempt

39

§2.1

Conunencing Litigation: Judicial Sanctions

§2.1

Introduction

In this chapter, we discussjudicial sanctions in litigation, except for discovery sanctions, which are covered in Chapter 6. The emphasis is on Federal Rule of Civil Procedure 11, both the 1983 and the 1993 versions,I although we also discuss sanctions imposed pursuant to 28 US.C. §1927 and the "inherent power" of federal courts. Contempt is treated in the final section of the chapter. For most lawyers, it is the implicit threat of judicially imposed sanctions, not the fear of discipline, that operates as the most effective external control of litigation behavior. Clients and the system of justice are well served byjudges who insist that lawyers play by the rules. Lawyers, too, should recognize that courtesy and fairness will help not only their own reputations, but their clients' causes as well. §2.1.1

Inherent Power

Laying claim to the prerogatives of the English chancery courts, I federal courts assert the inherent power to impose a wide range of sanctions for litigation conducted in bad faith," ranging from dismissal of a claim" to an award of attorney fees to the opposing party " Contempt, discussed in §2.4, is an important aspect of inherent power. While undoubtedly all courts possess certain inherent powers," many state courts do not claim the broad powers of the federal judiciary. Writing about the power to award attorney fees for bad faith litigation, one

§2.1 'For in-depth treatment of 1993 Rule 11, see Keeling, Toward a Balanced Approach to "Frivolous" Litigation: A Critical Review of Federal Rule II and State Sanctions Provisions, 21 Pepp. L. Rev. 1067 (1994); Tobias, The 1993 Revision of Federal Rule II, 70 Ind. LJ. 171 (1994); Note, Lawyers' Responsibilities to the Courts: The 1993 Amendment to Federal Rule of Civil Procedure II, 107 Harv. L. Rev. 1629 (1994). The legislative history of the 1993 amendment appears at 146 F.R.D. 514 (1993). §2.1.1 I Mallor, Punitive Attorneys' Fees for Abuse of the Judicial System, 61 N.C. L. Rev. 613, 631 (1983). 2For an excellent discussion of the inherent power of federal courts, see Eash v. Riggins Trucking Inc., 757 F.2d 557, 561-565 (3d. Cir. 1985) (en bane). 3Link v. Wabash R.R., 370 U.S. 626, 82 S. Ct. 1326,8 L. Ed. 2d 734 (1962). 4F. D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 129,94 S. Ct. 2157,2165, 40 L. Ed. 2d 703,713 (1974). 5Cf. Eash, 757 F.2d at 561-562.

40

Commencing Litigation: Judicial Sanctions

§2.I.I

author concludes that although some state courts assert the power, this "bad faith exception (to the American rule that each side must bear its own costs) is primarily a creature of the federal courts.:" A federal court may impose sanctions against the litigant, the attorney, or both on a specific finding that the litigation was commenced or maintained in bad faith. 7 The most important federal case is Chambers o. Nasca, Inc.8 In that case, a federal trial court relied on its inherent power to order the defendant to pay plaintiff's attorney fees and related costs in the amount of $996,000 plus "appellate sanctions" in the amount of $66,000 and to suspend the defendant's attorneys (presumably only from practice in the federal courts, though the opinion is not so limited) for periods ranging from six months to fiveyears. 9 The court of appeals affirmed all but the five-year suspension, a matter remanded to the trial court for reconsideration in light of the prospective suspension of the attorney by the bar of his home state. 10 The court of appeals decision was upheld by the Supreme Court in an opinion by Justice White, which strongly affirmed the inherent power of federal courts to shift the costs of litigation to one who prosecutes or defends a claim in bad faith. Specific statutes and rules (e.g., Federal Rules of Civil Procedure 11 and 26(g) and 28 U.s.C. §1927) do not displace the inherent power of federal courts to impose sanctions for bad faith conduct. [NJeither is a federal court forbidden to sanction bad-faith conduct by means of the inherent power simply because that conduct could also be sanctioned under the statute or the rules.... [VV]henthere is bad faith conduct in the course of litigation that could be adequately sanctioned under the rules, the court should ordinarily rely on the rules rather than on the inherent power. But if in the informed discretion of the court, neither the

6Mallor, supra note 1, at 631, listing a minority of states in which courts have asserted the power to impose monetary sanctions. Baugess v. Paine, 22 Cal. 3d 626, 586 P.2d 942, 150 Cal. Rptr. 461 (1978), is cited as an example of a narrow view of inherent power in Oliphant, Rule 11 Sanctions and Standards: Blunting the Judicial Sword, 12 Wm. Mitchell L. Rev. 731, 744 (1986). 7Roadway Express, Inc. v. Piper, 447 U.S. 752, 100 S. Ct. 2455, 65 L. Ed. 2d 488 (1980). 8501 U.S. 32, 111 S. Ct. 2123,115 L. Ed. 2d 27 (1991). "Nasco Inc. v. Calcasieu Television and Radio, Inc., 894 F.2d 696, 701 (5th Cir. 1990). !Old. at 708.

41

§2.1.1


statute nor the rules are up to the task, the court may safely rely on its inherent power. II

Applying an abuse of discretion standard, Justice White upheld the award. He construed the district court's opinion as shifting only the costs of litigation to the defendant, a point vigorously disputed by four dissentingjustices (Kennedy, Scalia, Rehnquist, and Souter), who interpreted the award as sanctioning prelitigation conduct. According to Justice Kennedy, [T]he District Court exercised authority where Congress gave it none. The circumstance that this exercise of power occurred in a diversity case compounds the error. When a federal court sits in a diversity jurisdiction, it lacks constitutional authority to fashion rules of decision governing primary contractual relations. 12

The dissenters also faulted the majority for failing to recognize the primacy of congressionally passed rules and statutes, for failing to restrict the concept of inherent power to that "necessary to preserve the authority of the court," and for approving amorphous "power" as an acceptable alternative to well-defined procedures. 13 The power to award attorney fees for bad faith must be understood in connection with the "American rule." Under that rule, absent statute or contract, litigants pay their own attorney fees.14 The power represents a limited exception to that rule. A court should invoke its inherent power to award attorney's fees only when it finds that "fraud has been practiced upon it, or that the very temple of justice has been defiled."!"

Good examples of the legitimate use of the inherent power concept include Magnus Electronics v. Masco Corp. ,16 where the court relied on 11501U.S. at 50, 111 S. Ct. at 2135-2136 (relying on Roadway Express, 447 U.S. 752, 100 S. Ct. 2455,65 L. Ed. 2d 488). 12Id.at 74,111 S. Ct. at 2148. 13Id.at 75, 111 S. Ct. at 2148-2149. 14AleyskaPipeline Servo CO. V. Wilderness Socy., 421 U.S. 240, 257,95 S. Ct. 1612, 1621,44 L. Ed. 2d 141 (1975). "Boland Marine and Mfg. CO. V. Rihner, 41 F.3d 997,1005 (1995) (quoting Chambers, 501 U.S. at 46, 111 S. Ct. at 2133). 16871F.2d 626, 632-633 (7th Cir. 1989).

42


§2.1.2

its inherent power to sanction an attorney for an unauthorized ex parte contact, and Laitram Corp. v. Cambridge Wire Cloth CO.,17which involved vexatious conduct by counsel on both sides, characterized by the court as an "Alice in Patentland" approach to the litigation, in which their written product grew "curiouser and curiouser."18In United States v. Shaffir Equipment CO.,19the court fined two assistant United States attorneys $2,000 and $2,500, respectively, for misrepresentations made to the court and counsel; they were ordered not to seek reimbursement from their employer. §2.1.2

28

u.s.c.

§1927

In the federal courts, a second source of power is 28 U.s.C. §1927, which authorizes federal courts to require attorneys who "unreasonably and vexatiously multiply the proceedings" to personally pay "excess costs, expenses and attorneys' fees reasonably incurred because of such conduct."! As a result of the 1980 amendment adding "attorneys' fees" as recompensable items." 28 U.S.C. §1927 is often relied on by federal courts to craft sanctions that are remedial as well as punitive. 3 Section 1927 does not distinguish between winners and losers, or between plaintiffs and defendants. The statute is indifferent to the equities of a dispute and to the values advanced by the substantive law. It is concerned only with limiting the abuse of court processes."

There are limitations. The statute authorizes only monetary sanctions, limited to the reasonable expenses of the aggrieved party. It applies only

919 F.2d 1579, 1584 (Fed. Cir. 1990). IBId.at 1583. 19158 F.R.D. 80, 88 (S.D.W. Va. 1994). §2.1.2 'Mallor, supra §2.1.1 note 1, at 631 n.125, lists a number of state statutes; Keeling, supra §2.1 note 1, at 1104, also lists state statutes. 228 U.S.C. §1927 was amended to include attorney fees in reaction to Roadway Express Inc. v. Piper, 447 U.S. 752, 100 S. Ct. 2455, 65 L. Ed. 2d 488 (1980), which held that the term costs in the statute did not include attorney fees. 1980 u.S.C.C.A.N. 2716. 3Travelers Ins. Co. v. St.Jude Hosp. of Kenner La. Inc., 38 F.3d 1414 (5th Cir. 1994) (attorney fees of$22,000 imposed as a sanction against an attorney who belatedly and without merit challenged the impartiality of the trial judge). 17

"Roadway Express Inc. v. Piper, 447 U.S. 752, 762, 100 S. Ct. 2455, 2462, 65 L. Ed. 2d 488,498 (1980).

43

§2.1.2


to attorneys and cannot be used to sanction Iitigants." Sanctions imposed pursuant to the statute must be satisfiedby the attorney personally. 6 Sanctions may not be imposed under §1927 unless the attorney's conduct is "unreasonable" and "vexatious." While the term unreasonable implies an objective standard, the term vexatious suggests intentional wrongdoing? Most courts therefore hold that badfaith is required for the imposition of sanctions under §1927.8 Like an award made pursuant to the court's inherent power, an award under section 1927 is proper when the attorney's actions are so completely without merit as to require the conclusion that they must have been taken for some improper purpose such as delay?

Some courts, however, while continuing to use the term bad faith, apply an objective test as an alternative to conscious impropriety. 10 If a lawyer pursues a path that a reasonably careful attorney would have known, after appropriate inquiry to be unsound, the conduct is objectively unreasonable and vexatious. To put this a little differently, a lawyer

.IFederal Trade Commn. v. Alaska Land Leasing, rne., 799 F.2d 507, 510 (9th Cir. 1986) (setting aside sanction against employee oflawyer). 6InJulien v. Zeringue, 864 F.2d 1572, 1575-1576 (Fed. Cir. 1989), the appellate court ordered an attorney who burdened the court with a concededly "ragtag" and "rough edge" performance to personally pay the attorney fees resulting from the other side's required response to the "rough edge" effort. See also Hollis v. United States, 744 F.2d 1430, 1433 (10th Cir. 1984); United States v. Potamakin Cadillac Corp., 697 F.2d 491 (2d Cir. 1983), cert. denied, 462 U.S. 1144, 103 S. Ct. 3128, 77 L. Ed. 2d 1579 (1984). "United States v. Ross, 535 F.2d 346, 349 (6th Cir. 1976) (vexatious means "intended to harass"). 8Kanarek v. Hatch, 827 F.2d 1389, 1391 (9th Cir. 1987); Oliveri v. Thompson, 803 F.2d 1265, 1273 (2d Cir. 1986); Dreiling v. Peugeot Motors of Am., Inc., 768 F.2d 1159, 1165 (10th Cir. 1985); Suslick v. Rothschild Sec. Corp., 741 F.2d 1000 (7th Cir. 1984). 90liveri, 803 F.2d at 1273. IOEndorsing an objective standard are Julien, 864 F.2d at 1575; Braley v. Campbell, 832 F.2d 1504, 1512 (10th Cir. 1987); and In re Reuben, 825 F.2d 977, 983-984 (6th Cir. 1987). See also Reidinger, The Metes and Bounds of Advocacy, 73 A.B.A.]. 66 (July 1987), commenting on Haynie v. Ross Gear Division ofTRW, Inc., 799 F.2d 237 (6th Cir. 1987), another Sixth Circuit case adopting an objective approach to 28 U.S.C. §1927. The Supreme Court granted certiorari in Haynie (481 U.S. 1003, 107 S. Ct. 1624, 95 L. Ed. 2d 198 (1987)), presumably to resolve a conflict in the circuits over the standard to be used in §1927 claims, but later dismissed the case as moot and vacated the judgment of the court of appeals (482 U.S. 901, 107 S. Ct. 2475, 96 L. Ed. 2d 368 (1987)).

44


§2.1.3

engages in bad faith by acting recklessly or with indifference to the law, as well as by acting in the teeth of what he knows to be the law." Construing § 1927 to incorporate an objective standard complements the Federal Rules of Civil Procedure, since the statute reaches behavior that is not covered by Rule 11 or the discovery rules. '2 However, a strong argument can be made that the wording and history of the statute require a finding of bad faith. '3

§2.1.3

Introduction to Rule ll-The and 1993 Versions

1983

While important, the above sources of power pale in significance by comparison to Rule 11 of the Federal Rules of Civil Procedure. Both the 1983 and the 1993 versions of Rule 11 are important. The Advisory Committee to the 1983 Rule believed that original Rule 11, adopted with the Federal Rules in 1938, had not been effective in deterring abuses. The 1983 amendment was designed to "reduce the reluctance of courts to impose sanctions ... by emphasizing the responsibilities of the attorney and reenforcing those obligations by the imposition of sanctions.'" Between 1983 and 1993, Federal Rule 11 read as follows: The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. [For violations of the rule] the court, upon motion or upon its own initiative, Illn re TCI Ltd., 769 F.2d 441, 445 (7th Cir. 1985). 12United States v. Associated Convalescent Enters., Inc., 766 F.2d 1342 (9th Cir. 1985) (attorney substituted himself as counsel after having been named as a potential witness, which ultimately caused the trial to be continued). 1301iveri, 803 F.2d at 1273. See Note, The Song of the Sirens-Sanctioning Lawyers under 28 U.S.C. Section 1927,31 B.C. L. Rev. 477 (1990), suggesting a dual standard (bad faith or reckless conduct, depending on the nature of the claim) in §1927 claims. §2.1.3 IFed. R. Civ. P. II advisory committee's note (1983); cf. Keeling, supra §2.1 note I, at 1074-1077; Underwood, Curbing Litigation Abuses: Judicial Control of Adversary Ethics-The Model Rules of Professional Conduct and Proposed Amendments to the Rules of Civil Procedure, 56 St.John's L. Rev. 625, 642 (1982).

45

§2.1.3


shall impose upon the person who signed it, a representativeparty, or both, an appropriatesanction,whichmay includean order to pay to the other party or parties the amount of reasonable expenses incurred becauseof the filingof the pleading,motion or other paper, includinga reasonableattorney'sfee.? An excellent analysis of 1983 Rule 11 was written by United States Judge William Schwarzer" of the Northern District of California. To summarize Judge Schwarzer, 1983 Rule 11 1. applies to every paper filed in court; 2. requires reasonable prefiling inquiry with respect to the facts and law on which the paper is based; 3. mandates that the paper be well grounded in fact and warranted by existing law or by a good faith argument for extension, modification, or reversal of existing law; 4. specifies that papers not be filed for an improper purpose, such as delay; 5. makes the imposition of sanctions mandatory if a paper is signed in violation of the rule; 6. does not require a finding of "willfulness" or "bad faith" in order to impose sanctions; and 7. aims at deterring and punishing improper conduct, rather than merely compensating the prevailing party. 4 While 1983 Rule 11 incorporated an objective standard ("reasonableness") for the factual and legal investigation an attorney is required to undertake before signing a pleading, the rule appeared to use a subjective standard ("best of his knowledge, information, and belief") for the attorney's conclusions from the law and the facts." The leading cases, however, read the rule as incorporating a wholly objective standard. 6 2Fed. R. Civ. P. II (1983). 3Now the director of the FederalJudicial Center. +Schwarzer, Sanctions under the New Federal Rule I I-A Closer Look, 104 F.R.D. 181, 184-185 (1985). 5Eastway Constr. Corp. v. City of New York, 637 F. Supp. 558, 567 (E.D.N.Y. 1986), reo'd, 821 F.2d 121 (2d Cir. 1987). Cf. Mann v. G & G Mfg., Inc., 900 F.2d 953 (6th Cir. 1990) (sanctions under Rule II notwithstanding earlier denial of motion for summary judgment). 6Zaldivar v. City of Los Angeles, 780 F.2d 823, 829 (9th Cir. 1986); Eastway Constr. Corp., 762 F.2d at 254.

46


§2.1.3

[S]anctions shall be imposed [if] after reasonable inquiry, a competent attorney could not form a reasonable belief that the pleading is wellgrounded in fact and is warranted by existing law?

As nicely stated by United States District Judge Jack Weinstein, "While the Rule [on its face] requires certification only by the actual attorney of his actual beliefs, [the Second Circuit's construction of the rule] requires the reasonable beliefs of a hypothetical competent attorney."8As construed, the rule vests the attorney's signature with the following consequences: The pleading must be well grounded in fact (taking into account the information reasonably available); the pleading must be either well grounded in law or a bona fide effort to extend, reverse, or modify the law; and the pleading must not be imposed for an improper purpose (such as delay). These requirements have been referred to as the factual, legal, and motivational prongs of a threepronged test.? The importance of 1983 Rule 11 can hardly be overstated. Within five years after adoption of the amendment, there were almost 700 published Rule 11 decisions in the federal courts, and empirical studies revealed that the published opinions reflected just "the tip of the iceberg,"!" By comparison, only 20 opinions involving sanctions were reported in the years 1938-1979.11 Monetary sanctions were often huge and widely reported." The requirements of 1983 Rule 11 applied to any pleading or paper filed in court, 13 and sanctions were imposed for a wide variety of filings in violation of the rule: counterclaims, 14 motions

7 Eastway Constr. Corp., 762 F.2d at 254. 8Eastway Constr. Corp., 637 F. Supp. 558. "Note, Litigant Responsibility: Federal Rule of Civil Procedure II and Its Application, 28 B.C. L. Rev. 385, 390 (1986) [hereinafter Litigant Responsibility]. IOKeeling, supra §2.1 note I, at 1080 (citing Vario, Rule II: A Critical Analysis, 118 F.R.D. 189 (1992); Burbank, Rule II in Transition: The Report of the Third Circuit Task Force on Federal Rule of Civil Procedure 11 (1988)). "S, Kassin, An Empirical Study of Rule 11 Sanctions 2 (Federal Judicial Center 1985) (referring to an unpublished study by S. Medina, M. Henifin, and T. Cone on file in the Columbia Law School library). 12E.g., Unioil v. E. F. Hutton and Co., 809 F.2d 548 (9th Cir. 1986) (upholding a Rule 11 sanction of$294,000 againstJoseph Alioto for filing a class action without having adequately investigated the contentions of the class representative). 131993 Rule 11 does not apply to discovery. Fed. R. Civ. P. I I(d) (1993). 14Hudson v. Moore Business Forms, Inc., 609 F. Supp. 467, 484 (N.D. Cal. 1985).

47

§2.1.3


to disqualify counsel.l> motions for summary judgment;" discovery motions," and Rule 11 motions. 18 Under 1983 Rule 11, a trial court cannot, however, threaten to levy sanctions for taking a frivolous appeal or for asking for a stay of a pending appeal. In vvebster v. Sowders,19 the Court of Appeals for the Sixth Circuit ruled that the district judge exceeded his authority when he told the lawyers who had appealed his order: I'm advising every attorney in this case, every official involved in it, that I think this appeal is frivolous. I'm advising you further that Rule 11 says that sanctions can be imposed on the attorneys and parties alike. 20

The court held that a trial judge cannot sanction a lawyer for taking an appeal or threaten sanctions against a litigant or an attorney for filing a motion to stay an order pending an appeal. The only purpose of such a threat is to prevent an appeal, and the frivolity of an appeal is properly for the appellate court to decide. As discussed in §2.1.4, Rule 11 was amended in 1993 to provide a "safe harbor" and make sanctions discretionary. The 1983 version of the rule is still important, however, both because its substantive provisions were not significantly altered and because it has had a lingering effect on state procedures. Many states amended their procedural rules to conform to 1983 Rule 11,21and state judges undoubtedly have been influenced by the highly publicized, and apparently successful, attempt of the federal judiciary to curb litigation abuses."

15Woldv. Minerals Eng. Co., 575 F. Supp. 106 (D. Colo. 1984). '6SFM Corp. v. Sunstrand Corp., 102 F.R.D. 555 (N.D. Ill. 1984). '7Brown v. National Bd. of Medical Examiners, 800 F.2d 168 (7th Cir. 1986); Westmoreland v. CBS, Inc., 770 F.2d 1168, 1175 (D.C. Cir. 1985). '8Equal Employment Opportunity Commn. v. Tandem Computers Inc.,158 F.R.D. 224, 229 (D. Mass. 1994). 19846F.2d 1032 (6th Cir. 1988). 2°Id. at 1039. 2lKeeling, supra §2.1 note I, at 1102-1103, lists 21 states that adopted 1983 Rule 11 (some with minor deviations). 22Litigant Responsibility, supra note 9, at 405-406. For an excellent review of Rule 11, see Cavanaugh, Developing Standards under Amended Rule 11 of the Federal Rules of Civil Procedure, 14 Hofstra L. Rev. 499 (1987). See also Shaffer, Rule 11: Bright Line, Dim Future, 7 Rev. Litig. 1 (1987) (thorough review of cases on various Rule 11 issues).

48


§2.1.4

§2.1.4

The 1993 Amendments to Rule 11

In 1993, the Supreme Court adopted a "kinder and gender" Rule 11, designed to promote the remedial aims of the rule. I According to the report of the Advisory Committee on the Civil Rules to Chairman Robert Keeton," the amended version of the rule responds to criticism that (1) Rule 11 ... has tended to impact plaintiffs more frequently and severely than defendants; (2) it occasionally has created problems for a party which seeks to assert novel legal contentions or which needs discovery from other persons to determine if the party's belief about the facts can be supported with evidence; (3) it has too rarely been enforced through nonmonetary sanctions, with cost-shifting having become the normative sanction; (4) it provides little incentive, and perhaps a disincentive, for a party to abandon positions after determining they are no longer supportable by fact or law; and (5) it sometimes has produced unfortunate conflicts between attorney and client, and exacerbated contentious behavior between counsel."

The amended rule makes a number of significant changes. Section (b) provides that "by presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, 1. it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; 2. the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; §2.1.4 "The amendments were effective on December 1, 1993, withJustices Scalia and Thomas dissenting. 113 S. Ct. Rep. no. 15, at cccvi (June I, 1993), 146 F.R.D. 401 (1993). 2The report was first published in August 1991 and published as part of the legislative history, 146 F.R.D. 519 (1993); also found at 112 S. Ct. Rep. no. I, at xcii, ciii-civ

(Nov. 1, 1991). 3146 F.R.D. at 523.

49

§2.1.4


3. the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; 4. the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief Although amended Rule 11 does not require an attorney to withdraw or amend pleadings in light of new information, the Advisory Committee Notes caution that adoocacy of a pleading will be evaluated in light of information available to the attorney at the time of the advocacy? [A] litigant'S obligations with respect to the contents of these papers are not measured solely as of the time they are filed with or submitted to the court, but include reaffirming to the court and advocating positions contained in those pleadings and motions after learning that they cease to have any merit. For example, an attorney who during a pretrial conference insists on a claim or defense should be viewed as "presenting to the court" that contention and would be subject to the obligations of subdivision (b) measured as of that time." Resolving another important issue, 1993 Rule 11 explicitly recognizes that a litigant might have good reason to believe that a fact is true or false, but need discovery, formal or informal, from opposing parties or third persons to gather evidentiary support for the allegation or denial. Accordingly, Rule II(b)(3) allows the pleader to specifically identify allegations or denials as made on "information and belief" if they are "likely to have evidentiary support after a reasonable opportunity for further investigation and discovery." Of course, both claims and defenses would have to be abandoned through subsequent amendments to the pleadings or at pretrial after it has become apparent that the claims and defenses are unwarranted.

40verruling the portion of Pavelic and LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 110 S. Ct. 456, 107 L. Ed. 2d 438 (1990), that held that only attorneys who sign pleadings may be sanctioned under Rule II. 5Fed. R. Civ. P. II advisory committee's note, 113 S. Ct. Rptr. no. IS, at ccclxxxiv (June I, 1993).

50


§2.2.1

As discussed more fully in §2.3, 1993 Rule 11 makes sanctions discretionary and provides a "safe harbor" to allow claims to be withdrawn without penalty. In 1995, the House of Representatives unsuccessfully attempted to toughen Rule 11 by reinstating mandatory sanctions. 6

§2.2

The Req'uiz-ernerrts

of Rule 11

With one exception, the requirements of 1993 Rule 11 are the same as the requirements of 1983 Rule 11. That exception is the duty under the 1993 version to reevaluate a pleading on the basis of new information. This is discussed in §2.2.3. §2.2.1

Duty with Respect to the Facts

Rule 11 requires lawyers to conduct a "reasonable inquiry" before making factual allegations in a pleading. As stated by the 1983 Advisory Committee, the reasonableness of the inquiry turns on the facts of the case: Thus, what constitutes a reasonable inquiry may depend on such factors as how much time for investigation was available to the signer; whether he had to rely on a client for information as to the facts underlying the pleading, motion, or other paper; ... or whether he depended on forwarding counselor another member of the bar.'

6104 H.R. 988 passed the House of Representatives on March 7, 1995, but died for lack of action by the Senate. §2.2.1 'Fed. R. Civ. P. 11 advisory committee's note to 1983 amendment. E.g., CTC Imports and Exports v. Nigerian Petroleum Corp., 751 F.2d 573 (3d Cir. 1991) (no sanction on local counsel with no time to investigate); In re Kunstler, 914 F.2d 505 (4th Cir. 1990); Thomas v. Capital Sec. Servs., 812 F.2d 984, 988 (5th Cir. 1987), modified by Thomas v. Capital Sec. Servs., 836 F.2d 866 (5th Cir. 1988) (en banc); NassauSuffolk Ice Cream v. Integrated Resources, Inc., 114 F.R.D. 684 (S.D.N.Y. 1987) (not appropriate to accept client's version on faith alone); Kamerman v. Steinberg, 113 F.R.D. 511 (S.D.N.Y. 1986) (reliance on newspaper articles was justified); Friedgood v. Axelrod, 593 F. Supp. 395 (S.D.N.Y. 1984) (attorney not required to disbelieve client

and accept opponent's assertions).

51

§2.2.1

Co:nunencing Litigation: Judicial Sanctions

The following cases are illustrative. In Van Berkel v. Fox Farm and Road Machinery,2 the client told the lawyer he had been injured on September 6, 1977. In fact, he had been injured on the same date in 1976. Relying on the client's statement, the lawyer filed suit after the statute of limitations had run. After dismissing the claim, the court imposed Rule 11 sanctions because the attorney had not obtained the client's medical records (which would have revealed the correct date of injury) before filing suit, although he had ample time to do SO.3 Unioil, Inc. v. E. F. Hutton and Co., Inc. ,4 led to the imposition of sanctions. The case was brought as a class action, but the named representative failed to substantiate the allegations of the complaint. An inquiry established that Joseph Alioto, the lead counsel for the plaintiff class, had never talked with the representative. Alioto had relied on his referring cocounsel to find a suitable representative, but had never asked why the representative was suitable." In finding Alioto's inquiry deficient, the court pointed out that Alioto had never worked with the referring attorney, he had not asked questions that would have revealed the representative was unsuitable, there was ample time to investigate, and the Alioto firm specialized in complex business litigation. 6 The reasonableness of an inquiry will depend in part on the attorney's access to information. When the relevant information is controlled by an uncooperative opponent, the attorney may have no choice but to sue on a hypothesis in the hope of developing favorable facts through discovery.A case in point, Oliveri v. Thompson.' involved alleged police brutality. The client told his lawyer was that he was falsely arrested and beaten. The lawyer filed suit against the officers involved and included counts naming the police commissioner and the county. The suit alleged the false arrest and beating resulted from improper training and supervision. After reviewing relevant files, obtained by

2581 F. Supp. 1248 (D. Minn. 1984), discussed in Oliphant, supra §2.1.1 note 6, at 749. 3The plaintiff came to the law firm about three years before suit was filed. 581 F. Supp. at 1250. +802 F.2d 1080 (9th Cir.), unthdraum and superseded by 809 F.2d 548 (9th Cir. 1986). 5802 F.2d. at 1084-1085 (now withdrawn). Compare In re Kunstler, 914 F.2d 505 (total reliance on another lawyer is an improper delegation of signer'S responsibility to certify that the pleading over his name is well grounded in law and fact). 6802 F.2d at 1090 (now withdrawn). 7803 F.2d 1265 (2d Cir. 1986).

52


§2.2.1

court order, the lawyer concluded these claims were without merit and withdrew his charges against the police commissioner and the county. In reversing the imposition of a Rule 11 sanction, the court of appeals noted that "it is extremely unlikely that before formal discovery any citizen would or could be in possession of such information [the training records of the officersinvolved]; consequently, if sanctions were to bar possible exploration of such claims, the agency would be effectively immunized .... "8 A letter request to a potential defendant may yield information on which an attorney can make a reasonable decision about liability; in the alternative, an attorney can rely on a potential defendant's lack of cooperation as justifying a lawsuit filed with the belief that the facts, as developed during discovery, might support the allegations of the complaint. 9 Like Oliveri, Kraemer v. Grant CounrylO was an unsuccessful civil rights action, in which the trial court imposed a Rule 11 sanction against the plaintiff's attorney. Like the attorney in Oliveri, the plaintiff's attorney in Kraemer had not been able to corroborate his client's version of the events because the defendant would not cooperate. And, as in Oliveri, the appellate court reversed the imposition of sanctions because the plaintiff's lawyer (noted to be a recent law school graduate) had gone as far as he could without formal discovery. When the defendants refused to cooperate voluntarily, Lawton had only two options: he could advise his client to give up, or he could file a complaint on her behalf and try to develop the necessary facts through discovery. Absent some official coercion, the defendants had proved unwilling to provide any evidence whatever relating to Kraemer's case, and their unwillingness was reflected in their hostile reactions to Lawton's investigator. No one else could be expected to have knowledge of the conspiracy. Until some other source of information became available,

BId. at 1279. 9Nemeroff v. Abelson, 620 F.2d 339, 348 (2d Cir. 1980) (a significant case interpreting pre-I983 Rule II, discussed in Underwood, supra §2.1.3 note 1, at 643-645. It has been suggested that the requirement of Rule II that a complaint be well grounded in fact undermines the liberal pleading standards of the Federal Rules of Civil Procedure, which permit complaints to stand if the pleader could potentially prove facts to support a claim. Note, Plausible Pleadings: Developing Standards for Rule II Sanctions, 100 Harv. L. Rev. 630, 636 (1987). 10892 F.2d 686 (7th Gir. 1990).

53

§2.2.1

Co:nun.encing Litigation: Judicial Sanctions

then, Lawton had to rely on his client for the factual foundation of the claim. There was simply no other source to which he could turn.'!

In contrast to Oliveri and Kraemer, the facts were readily accessible to the attorneys in Albright v. Upjohn Co. 12 There the court of appeals held that the trial court erred in denying sanctions against attorneys who filed a shotgun complaint. Suit was filed against pharmaceutical companies engaged in the manufacture and sale of tetracycline-based drugs that allegedly had caused the discoloration of plaintiff's teeth. Ten months before filing, the attorneys had medical records showing the prescription of three brand-name products made by three pharmaceutical companies. In addition to these three companies, however, the suit named six other companies involved in the manufacture of tetracycline drugs. These defendants were ultimately dismissed because no connection with the plaintiff could be shown. The court of appeals accepted Upjohn's argument that sanctions were required because ten months was long enough to find additional records if there were any such records to discover.13 Garr v. Us. Healihcare'" is a case marked by what the court of appeals sardonically called "extraordinary developments." 15 Attorney Malone maintained a file of stockholders available to become plaintiffs in securities litigation. Upon reading of an apparent corporate transgression in the Wall Street Journal, Malone researched the matter as best he could, located a stockholder willing to serve as plaintiff, and filed a class action suit. The complaint was filed before the plaintiff, who lived in another state, had read it. Malone shared his complaint with two other lawyers, who filed a second suit on the basis of the Malone complaint and the Wall Street Journal article. Malone himself filed a third suit on behalf of a client he received by referral. The defendant responded to the three complaints with a IOO-pagemotion for sanctions under Rule 11. All the above-the Wall Street Journal story, the filing of the three suits, and the defendant's Rule 11 motionoccurred over three days, from November 4 to November 6, 1992.

llId. at 690. 12788F.2d 1217 (6th Cir. 1986). 13Id. at 1220. 1422F.3d 1274 (3d Cir. 1994). See further discussion ofGarrin Chapter 16. 1522F.3d at 1276, 1277.

54


§2.2.1

The complaints were ultimately dismissed;" and the trial court sanctioned the second and third lawyers, but not Malone, for inadequate factual investigation. While Malone somehow had managed to examine filings with the Securities and Exchange Commission (on the same day he read the Wall Street Journal story, recruited the plaintiff, and filed the suit), the other two lawyers had done no independent investigation. The court rejected the argument that time was of the essence and faulted counsel for not attempting to confirm Malone's judgment about the case, even though the sanctions «were not predicated on a conclusion by the court that the Garr complaint was unmeritorious. "17 Garr is an object lesson for those who, absent time constraints, rely on the work of others: Lawyers will not be penalized for errors of judgment made after reasonable inquiry, but they may be sanctioned if no inquiry was made. The 1993 amendment requires attorneys who are unable to fully investigate the facts before filing to identify those allegations that the attorney believes "are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery."!" The amendment thus allows pleading on "information or belief," but does not relieve litigants of the obligation to investigate. 19 The propriety of alleging on "information and belief" is to be measured by a two-part objective test: (1) Was the attorney's factual investigation reasonable, and (2) would a reasonable attorney have gone forward on the basis of the information at hand?20 In Business Guides Inc. v. Chromatic Communications Enterprises Inc., 21 the Supreme Court held that Rule 11 imposes an objective standard of reasonable inquiry on represented parties who sign pleadings or other papers. However, the majority opinion lends support to the proposition that "what is objectively reasonable for a client may differ from what is objectively reasonable for an attorney."22 Certainly a judge should

16The basis for dismissal of two of the complaints is not clear from the appellate opinion. The original complaint fIled by Malone was dismissed at the direction of his client, who realized, after reading it for the first time on November 8, that he did not have a claim. 1722F.3d at 1281 (emphasis supplied). IBFed.R. Civ. P. I 1(b)(3) (1993). 19Rule 11 advisory committee's note 146 F.R.D. 585 (1991). 2°Id.; see also Tobias, supra §2.1 note I, at 202-203. 21498 U.S. 533, III S. Ct. 922, 112 L. Ed. 2d 1140 (1991). 22Id. at 534, 111 S. Ct. at 924.

55

§2.2.1

Conunencing


consider the sophistication and experience of a lay person against whom sanctions are sought under Rule 11. §2.2.2

Duty to Reevaluate Factual Allegations

The plaintiff in Oliveri v. Thompson.' discussed in §2.2.l, claimed that he had been falsely arrested and assaulted by the defendant police officers. During discovery, defendants supplied plaintiff's attorney with photographs of the client tending to show that he was not beaten and an audiotape indicating that there was probable cause for the arrest. 2 Yet plaintiff's counsel did not voluntarily dismiss the claim, and the case proceeded to trial, resulting in a verdict for the defendants. Pursuant to 1983 Rule 11 and 28 U.S.C. §1927, the trial court then ordered plaintiff's counsel to pay attorney fees to the defendants." The court of appeals reversed, holding that 1983 Rule 11 did not impose a continuing duty on an attorney to examine the factual basis of a pleading in light of newly discovered evidence. While "Rule 11 applies to every paper signed during the course of the proceedings," 1983 Rule 11 was concerned only with the attorney's conduct at the time the paper was signed." Since the complaint was well grounded in fact at the time it was filed, Rule 11 sanctions were not warranted. The Oliveri court construed the 1983 version of Rule 11. The 1993 amendment makes it sanction able to "advocate" a pleading without "evidentiary support." In jurisdictions that have adopted the 1993 version of Rule 11, an attorney may not argue a position after learning that it is factually unwarranted. The 1993 version of Rule 11 is not intended, however, to impose an affirmative duty to correct pleadings in light of additional information, since such a duty would require "litigants to meticulously follow every allegation included in their papers ... so they could promptly withdraw each assertion once it lost its merit."> It is enough to require that counsel have a reasonable factual basis for those claims or defenses that are being actively pursued. §2.2.2

1803 F.2d 1265 (2d Cir. 1986). 2Id. at 1269. 3Id. at 1271. 4Id. at 1274. sTobias, supra §2.1 note 1, at 192; see also Rule II advisory committee's (1993).

56

note


§2.2.3

The 1993 amendment, imposing a continuing duty under Rule 11, is consistent with the power of federal courts to impose sanctions for a bad faith assertion of a claim after new evidence shows the claim to be without merit. 6 After its Rule 11 analysis in Oliveri, the appellate court applied a bad faith standard to the conduct of plaintiff's attorney. In reversing the imposition of sanctions under § 1927, the court pointed out that bad faith must be clearly proved, and that courts should be cautious in finding that an attorney's continued belief in a client's story amounts to bad faith. Section 1927 was not intended to require an attorney to pass judgment on the credibility of his client on pain of a monetary sanction in the form of paying adversaries' attorneys' fees should he evaluate that credibility contrary to the district court's view.7

§2.2.3

Duty with Respect to the Law

Lawyers have an ethical responsibility to their clients to know the applicable law before filing any pleading.' At a minimum, a lawyer should research the applicable statutes and cases in the jurisdiction before drafting a pleading in which the legal theories are affected to any significant degree by those statutes and cases. The 1983 version of Rule 11 imposed a similar duty on the court and the opponent by providing for sanctions if the complaint (or other pleading) is not supported by existing law or a "nonfrivolous argument for the extension, modification or reversal of existing law or the establishment of new law."2The 1983 version used the term "good faith," implying a subjective standard. The rule, however, also included the phrase "formed after reasonable inquiry," and cases construing 1983 Rule 11 applied an objective stan-

6Samuels v. Wilder, 906 F.2d 272 (7th Cir. 1990) (Rule II cannot be used as a sanction for failing to withdraw securities fraud suit for lack of evidence, but 28 U.S.C. § 1927 might apply); Nemeroffv. Abelson, 94 F.R.D. 136 (S.D.N.Y. 1982), off'd, 704 F.2d 652 (2d Cir. 1983) (attorney fees imposed pursuant to court's inherent power for persisting in conspiracy theory after it was apparent that evidence could not be produced to support the claim). 7803 F.2d at 1277-1278. §2.2.3 'Model Rule 1.1; DR 6-10 I (A)(l). 2Fed. R. Civ. P. ll(b)(2)(1993).

57

§2.2.3

Conunencing Litigation: Jndicial Sanctions

dard of reasonableness." Although there may be instances in which ignorance of the law will be excused," ordinarily lawyers must know the applicable law.5 District courts have held that the signer's inquiry is not reasonable if the law is discoverable by using the resources available to him or her. For example, failure to use basic legal research tools, such as citators, digests, and annotated codes may not constitute reasonable inquiry. Similarly failure to conduct a computerized search, if available to the signer, may not be reasonable inquiry"

By way of example, in Chambers v. American Trans Air Inc..' plaintiff's counsel sought exemplary damages in a Tide VII case, although Tide VII clearly did not allow such damages. Counsel was sanctioned for his error in a district court opinion that observed that "an empty head but a pure heart is no defense."8 The attorney took offense at being dubbed an "empty head" and filed an affidavit in the court of appeals, relating that, among other accomplishments, he was a "state debate champion ... had two varsity letters in a collision sport, and was president of what may well have been the strongest fraternity on campus."? To these exemplary personal characteristics, the court of appeals figuratively said, "So what?" But unfortunately ... this long list of accolades and accomplishments provides no defense. As we noted in Thornton the "test under Rule 11 is objective." The point is that "every lawyer must do the necessary work to find the law before filing the brief" ... That admonition applies even to 3Zaldivar v. City of Los Angeles, 780 F.2d 823, 829 (9th Cir. 1986); Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir. 1985). 41nre TCI Ltd., 769 F.2d 441,446-447 (7th Cir. 1985) ("Short deadlines may lead to filings that are not fully formed. It is also folly to spend $2,000 worth of time researching and writing the complaint in a $2,000 case."); Note, Reasonable Inquiry under Rule II-Is the Stop, Look and Investigate Requirement a Litigant's Roadblock?, 18 Ind. L. Rev. 751, 764-765 (1985). SHewitt v. City of Stanton, 798 F.2d 1230, 1233 (9th Cir. 1986) (attorney stated he was unaware of adverse precedents and therefore was acting in good faith; court said that bad faith is not required under Rule 11 and a competent attorney should have known of the precedents). 6Litigant Responsibility, supra §2.1.3 note 9, at 392. 717 F.3d 998 (7th Cir. 1994). SId. at 1006 (quoting unpublished district court opinion). 91d.

58


§2.2.3

lawyers who have two varsity letters in a collision sport and who were presidents of their fraternities. 10 Both the 1983 and the 1993 versions of Rule 11 ask whether a reasonably competent lawyer would believe that the pleading is supported by the applicable law. If the answer is "no," II the next question is whether the lawyer is engaged in a nonfrivolous attempt to extend, modify, or reverse the law. Under either the 1983 or the 1993 version of the rule, it is critical to measure the sincerity (or lack thereof) with which the attorney attempts to deal with the adverse precedents. In Szabo Food Services Inc. v. Canteen Corp.,12 the court put it this way: Rule 11 creates difficulties by simultaneously requiring courts to penalize frivolous suits and protecting complaints that, although not supported by existing law, are bona fide efforts to change the law. The only way to find out whether a complaint is an effort to change the law is to examine with care the arguments counsel later adduce. When counsel represent that something clearly rejected by the Supreme Court is governing law, then it is appropriate to conclude that counsel are not engaged in trying to change the law; counsel either are trying to buffalo the court or have not done their homework. 13 Although it is questionable whether sanctions should ever be imposed on an attorney who argues in good faith for a novel proposition, IOId.at 1007. "Fox v. Boucher, 794 F.2d 34,37 (2d Cir. 1986) ("Yet, a careful review of Fox's claims as set forth in his verified complaint reveals that no cognizable cause of action under New York law is pleaded."). Counsel may, however, read ambiguous cases in the way most favorable to their clients. Operating Engrs. Pension Trust v. A-C Co., 859 F.2d 1336, 1343-1344 (9th Cir. 1988) (reversing the imposition of sanctions while emphatically affirming counsel's duty of zealous advocacy). 12823F. 2d 1073 (7th Cir. 1987). 13Id.at 1082. See also Gaiardo v. Ethyl Corp., 835 F.2d 479 (3d Cir. 1987) ("creativity by itselfis not enough ... counselor client violates the Rule by mounting an attack on existing law not in good faith but rather prompted by such improper considerations as harassment or undue delay"). But compare Levinson, Frivolous Cases: Do Lawyers Know Anything at All?, 24 Osgood Hall LJ. 353, 375 (1987), citing a Rule II "test" proposed by Judge Easterbrook of the Seventh Circuit: Something is frivolous only when (a) we've decided the very point, and recently, against the person reasserting it, or (b) 99 of 100 practicing lawyers would be 99 percent sure that the position is untenable, and the other I percent would be 60 percent sure it's untenable. Either one is a pretty stiff test.

59

§2.2.3


courts unquestionably apply a "reasonable attorney" test to contentions made in the teeth of hostile precedents. The rule is not intended to chill creative advocacy. 14 In American legal history, many established precedents have eventually yielded to the arguments of counsel. 15 At the same time, there is a systemic interest in deterring meritless litigation, and some arguments are so completely meritless as to compel sanctions, regardless of the good intentions of the pleader." Even exhaustive research will not preclude sanctions if the conclusion drawn therefrom is unreasonable. A good faith belief in the merit of a legal argument is an objective condition which a competent attorney attains only after "reasonable inquiry" ... Of course, the conclusion drawn from the research undertaken must itself be defensible. Extended research will not save a claim that is without legal or factual merit from sanctions."? When the contention is legally plausible (either as supported by existing law or as an extension, modification, or reversal of law), sanctions should not be imposed under Rule 11, even though the court ultimately rejects the contention. However, misstatements of the law, either by

'4Fed. R. Civ. P. II advisory committee's note. Hurd v. Ralph's Grocery Co., 824 F.2d 806,810 (9th Cir. 1987), provides an example ofa good faith attempt to change existing law. Although unsuccessful, the pleading advanced a "plausible, if not persuasive, dissertation on the necessity to change the law," and the court of appeals reversed the imposition of sanctions by the trial court. The appellate court was impressed by the fact that the lawyer faced the adverse authorities instead of ignoring them or distinguishing them in a deceitful manner. Cf. Tutton v. Garland Indep. Sch. Dist., 733 F. Supp. 1113 (N.D. Tex. 1990) (courts should give some leeway to counsel in employment discrimination actions, noting "inherent proof difficulties placed upon a discrimination plaintiff'); see also Thompson v. Duke, 940 F.2d 192, 195 (7th Cir. 1991) (reversing the imposition of sanctions, noting" [c]ivil rights litigation ... requires innovative arguments and involves unpopular plaintiffs to a degree greater than other cases"). 'SE.g., the "separate but equal" doctrine ofPlessy v. Ferguson, 163 U.S. 537, 16 S. Ct. 1138,41 L. Ed. 256 (1896), ouerruled by Brown v. Board ofEduc. of Topeka, 347 U.S. 483, 74 S. Ct. 686,98 L. Ed. 873 (1954). "Saltany v. Reagan, 886 F.2d 438 (D.C. Cir. 1989) (sanctions mandatory in a case brought for the purpose of making a political statement). See also Cameron v. IRS., 593 F. Supp. 1540 (N.D. Ind. 1984), discussed in Oliphant, supra §2.1.1 note 6, at 758 (taxpayer's suit contending that wages are not income); Dove v. Schultz, 582 F. Supp. 154 (S.D.N.Y. 1984) (mother of infant taken from country by father sued secretary of state for failure to enforce law requiring passport to leave country). 17Zaldivar v. City of Los Angeles, 780 F.2d 823, 831 (9th Cir. 1986).

60

Cornrrrencing Litigation: Judicial Sanctions

§2.2.4

misrepresenting statutes or the holdings of cases!" or by failing to disclose adverse authorities,'? violate the lawyering codes in most jurisdictions. 20 If the complaint (or other pleading) is not legally plausible and not withdrawn, the court presumably can take into account any misrepresentations of counsel in deciding the sanction to be imposed." If, however, the pleading is legally plausible, there is no Rule 11 violation, even though counsel has misstated the law or otherwise demonstrated a lack of candor." This is certainly not to encourage lawyers to misstate the law. To do so, at a minimum, risks loss of credibility and injury to reputation. Furthermore, judges are encouraged to report deceitful lawyers to the appropriate disciplinary authorities.P §2.2.4

Irnproper Purpose

Under Rule 11, the signature on a pleading certifies that the pleading is not "interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation." 1 While this branch of the rule has been referred to as the motivational prong," it is reasonably clear that the 1983 Advisory Committee intended the test to be objective. 3 Judge Schwarzer elaborated on the concept of improper purpose:

IBModei Rule 3.3(a)(I) and DR 7-102(a)(5) provide that a lawyer shall not knowingly make a false statement oflaw to a tribunal. 19Model Rule 3.3(a)(3) and DR 7-1 06(B)(I) provide that a lawyer shall not knowingly fail to reveal to the tribunal directly adverse authority in the controlling jurisdiction, not disclosed by opposing counsel. 20See §8.5. 21Fed. R. Civ. P. II advisory committee's note (1993) (consideration should be whether the conduct was "willful"). 22Burull v. First Natl. Bank of Minneapolis, 831 F.2d 788, 789 (8th Cir. 1987); Golden Eagle Distrib. Corp. v. Burroughs, 801 F.2d 1531 (9th Cir. 1986). 23801 F.2d at 1542. In Jorgenson v. County of Vol usia, 846 F.2d 1350 (11th Cir. 1988), the appellate court upheld a $500 fme imposed on a lawyer who failed to refer to a case in which he had been one of the attorneys; the case was directly contrary to his position in the case at bar. §2.2.4 'Fed. R. Civ. P. II (1993) (the 1993 amendment did not change the "improper purpose" provision). 2Litigant Responsibility, supra §2.1.3 note 9, at 390. 3Fed. R. Civ. P. II, advisory committee's note (1983) ("The reference in the former text to willfulness has been deleted.").

61

§2.2.4


In considering whether a paper was interposed for an improper purpose, the court need not delve into the attorney's subjective intent. The record in the case and all of the surrounding circumstances should afford an adequate basis for determining whether particular papers or proceedings caused delay that was unnecessary, whether they caused increase in the cost of litigation that was needless, or whether they lacked any apparent legitimate purpose. Findings on these points would suffice to support an inference of improper purpose .... It is crucial to the effectiveness of Rule 11 that this approach be followed. Were a court to entertain inquiries into subjective bad faith, it would invite a number of potentially harmful consequences, such as generating satellite litigation, inhibiting speech and chilling advocacy. At the same time, some offenders might escape for lack of sufficient evidence of bad faith. Finally, a bad faith test would make courts more reluctant to impose sanctions for fear of stigmatizing a lawyer by a bad faith finding.'

The Court of Appeals for the Ninth Circuit followed Judge Schwarzer's analysis in Zaldivar o: City if Los Angeles> In Zaldivar, the court held that improper purpose is an objective concept, and that a well-founded complaint cannot support Rule 11 sanctions. Why? Because a well-founded complaint is always filed with an objectively proper purpose, regardless of the filer's intent." This construction accords withJudge Schwarzer's analysis. "If a reasonably clear legaljustification can be shown for the filing of the paper in question, no improper purpose can be found and sanctions are inappropriate." 7 The lawyering codes, by contrast, suggest that it is unethical to file even a well-grounded complaint to cause a delay or otherwise harass the opponent." As a practical matter, however, it is extremely doubtful that a 4Schwarzer, supra §2.1.3 note 4, at 195. 5780 F.2d 823 (9th Cir. 1986). 6Id. at 832; see also Sussman v. Bank ofIsr., No. 94-7437 (2d Cir. June 2, 1995) (same); National Assn. of Govt. Employees v. National Fedn. of Fed. Employees, 844 F.2d 216, 223 (5th Cir. 1988) (no Rule II liability for objectively sound complaint filed for an ulterior purpose). But see Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1083 (7th Cir. 1987) (holding that Rule II sanctions can be imposed on a plaintiff who fries a colorable suit for an improper purpose). 7Schwarzer, supra §2.1.3 note 4, at 196. Cf. Kale v. Combined Ins. Co. ofN. Am., 861 F.2d 746 (1st Cir. 1988) (as long as the pleading meets the objective test of Rule II, it does not matter that the particular attorney "thought up" a meritorious argument after the fact). 8DR 7-102(A)(I); Model Rule 3.1, Comment [2].

62

COlIlUlencing Litigation: Judicial Sanctions

§2.3.1

lawyer would ever be disciplined for filing a lawsuit that met the proper purpose test of Rule 11. A finding of improper purpose may follow from evidence that a pleading was filed to gain time," or from "excessive persistence in pursuing a claim or defense in the face of repeated adverse rulings, or from obdurate resistance out of proportion to the amounts or issues at stake."!" The Zaldivar court pointed out that Rule 11 should not be relied on if more specific procedural rules govern, II and the 1993 amendment to Rule 11 specifically states that Rule 11 is inapplicable to discovery issues."

§2.3

The Motion for Sanctions

§2.3.1

Responsibility

of the Moving Party

To this point, the discussion has focused on the attorney for the plaintiff-the potential target of a motion for sanctions if the judge finds the complaint not to be well grounded in law or fact. Rule 11, however, also bears on the obligations of the attorney who seeks sanctions; for example, the defense lawyer who succeeds in persuading the judge that the plaintiff's complaint was not well founded. First, since there may be partial or total shifting of attorney fees, I the attorney seeking sanctions must keep accurate contemporaneous time records in anticipation of a need to prove the "reasonable hours"

"Chevron, U.S.A., Inc. v. Hand, 763 F.2d 1184 (lOth Cir. 1985). Cf. Aetna Life Ins. Co. v. Alia Medical Servs., Inc., 855 F.2d 1470 (9th Cir. 1988) (distinguishing motions from complaints, the same court that decided Zaldiver ruled that nonfrivolous motions could lead to sanctions if they were filed with an improper purpose; the court indicated that the cumulative effect of a party's tactics, "a persistent pattern of clearly abusive litigation activity," could be found to be indicative of an "improper purpose"). IOSchwarzer, supra §2.1.3 note 4, at 196. 11780F.2d at 830. 12Fed. R. Civ. P. I 1(d) (1993). §2.3.1 IFed. R. Civ. P. II (1993). 1993 Rule I I(c)(2) limits the amount ofattorney fees to that "warranted for effective deterrence." 1983 Rule II does not contain this express limitation.

63

§2.3.1


spent defending the meritless claim." This is true even though the lawyer has a contingent fee contract with the client. The lawyer's obligation to the client requires that the lawyer keep records that will permit a shifting of fees to the opponent in the event the opponent's conduct is found to be sanctionable. Second, the attorney should mitigate litigation costs by not overdefending against a meritless claim. The rule permits the shifting of only reasonable attorney fees, and a court may find that a party who vigorously resisted a baseless claim incurred needless expenditures. In Frantz v. United States Powerlifiing Federation,3 the case was remanded for consideration of a claimed "reasonable fee" of $4,289 to draft a motion to dismiss a complaint; it also appeared that the defense counsel expended 400 hours pursuing Rule 11 sanctions, "a ratio of billing time to productive time," the appellate court opined, "that would be fatal when collecting from one's own clients." Finally,the attorney should inform his client if it appears that sanctions are possible" and abide by the client's informed decision whether 2Cf. Hensley v. Eckerhart, 461 U.S. 424, 428, 103 S. Ct. 1933, 1937, 76 L. Ed. 2d 40,47 (1983); Kelley v. Metropolitan County Bd. ofEduc., 773 F.2d 677, 683-684 (6th Cir. 1985); Grendel's Den v. Larkin, 749 F.2d 945, 952 (1st Cir. 1984) (cases in which fee awards in civil rights cases were reduced for failure to keep adequate records). 3836 F.2d 1063 (7th Cir. 1987); see also Melrose v. Shearson/American Express, Inc., 898 F.2d 1209, 1216 (7th Cir. 1990) (plaintiffs' counsel claimed to have spent more than 600 hours responding to a motion for summary judgment, a claim characterized as "absurd and indeed sanction able in its own right" by the appellate court); Hudson v. Moore Business Forms, 898 F.2d 684, 687 (9th Cir. 1990) (trial court held hearing and awarded attorney fees only to the extent necessary to defend against the nonmeritorious claim; "[tJhe mitigation requirement insures that Rule II sanctions do not themselves create the hemorrhage oflitigation that the rule was designed to stanch"); Brooks v. Allison Div. of General Motors, 874 F.2d 489 (7th Cir. 1989) (denying sanctions on appeal because appellee flied a brief on the merits, rather than moving to dismiss the frivolous appeal); Dubisky v. Owens, 849 F.2d 1034, 1038 (7th Cir. 1988) (diversity allegation of complaint was ambiguous; defense counsel should have informally contacted plaintiff's lawyer for clarification before filing extensive motion to dismiss); INVST Fin. Group v. Chern-Nuclear Sys., 815 F.2d 391, 404 (6th Cir. 1987) ("A reasonableness inquiry necessarily requires a determination as to what extent plaintiffs expenses and fees could have been avoided and were self-imposed."). 4Eastway Constr. Corp. v. City of New York, 637 F. Supp. 558, 575 (E.D.N.Y. 1986), reo'd, 821 F.2d 121 (2d Cir. 1987) ("Should defendant's fee request be so unreasonable as to itself rise to the level of frivolousness, Rule II sanctions may be imposed against the defendant for making that motion."); cf. International Corp. V. Style Cos., 760 F.2d 1045 (2d Cir. 1985) (sanctions imposed for unfounded motion to disqualify counsel).

64


§2.3.1

to seek sanctions." While it is ultimately for the client to decide, a responsible attorney should point out the negative consequences of such a motion. If the case is over, there may be no negative consequences other than cooling the professional relationship of the lawyers. If the litigation is continuing, however, a motion for sanctions may ultimately work to the client's detriment. What Rule 11 does is inject in an atmosphere that is already a hostile one, an additional adversarial proceeding that will only exacerbate that hostility and reduce the possibilities for settlement. Professionals have to contend with emotions, they have to calm their clients, they have to interact with one another and they have to present themselves to the court, sometimes aggressively but always in control. When you get into this Rule II business, it creates an atmosphere that too easily causes the lawyers to lose control. It is very difficult to be attacked by another lawyer with respect to veracity and competence, and continue to maintain the kind of relationship in that proceeding that is necessary for that proceeding to conclude in a proper way"

As discussed below, 1993 Rule 11 requires notice to opposing counsel and an opportunity to withdraw the offending pleading. Even in jurisdictions not requiring notice," courts will be favorably impressed by counsel who give opposing counsel an opportunity to correct or withdraw a pleading. 8 Not only at the beginning of the case, but whenever appropriate, you should inform your opponent in writing of the reasons the position is factually or legally infirm and your intent to seek sanctions. This technique

5Model Rule 1.2(a) (objectives of litigation and expenses to be incurred are questions for the client); Model Rule 1.4 (duty to keep the client informed); DR 7-101(A)(I) (client should decide objectives oflitigation). 6Weiss, A Practitioner's Commentary on the Actual Use of Amended Rule 11,54 Fordham L. Rev. 23, 24 (1985); see also the remarks of Arthur Miller atthe 1983 Second CircuitJudicial Conference, in which he recounts a "Kafkaesque dream," in which lawyers are led by their "obligations to their clients" to move to sanction each losing motion, including losing sanction motions. 10 I F.R.D. 161, 200 (1983). In Fisher Brothers. v. Cambridge-Lee Industries, 585 F. Supp. 69 (E.D. Pa. 1983), attorney fees were assessed against a litigant who filed an unwarranted Rule II motion. 71983 Rule II does not require notice and an opportunity to withdraw the pleading. BCole, Rule 11 Now, 17 Litigation 10 (Spring 199 I).

65

§2.3.1

Cornrrrencirig


is recommended by the Advisory Committee Notes on Rule 11 and has received judicial approbation. Donaldson v. Clark, 819 F.2d 1551 (11th Cir. 1987) (en banc) .... Recently, we offered not to seek Rule 11 sanctions if our opponent and his clients agreed to dismiss their commodities fraud suit against our clients. Our written offer was accompanied by an extensive motion for summary judgment that detailed the legal and factual infirmities of the complaint. This is generally conceded to be the most expeditious way to terminate litigation and to satisfy the duty of the mitigation. 9

The motion for sanctions should be filed promptly!'' and should include an itemized statement, with hours attributable to each item and a basis for the claimed hourly rate. I 1 §2.3.2

The "Safe Harbor" Provision Rule 11

of 1993

The 1993 version of Rule 11 provides that a motion for sanctions is to be served on the other party, but not filed with the court, "unless, within 21 days after service of the motion, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected." I The purpose of this provision is to give the opponent an opportunity to reconsider and take corrective action before the matter goes to court. Presumably, an attorney receiving a sanction 9Id. at 15.

IOFed.R. Civ. P. 11 advisory committee's note (1983); Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90 (3d Cir. 1988), in which the Third Circuit adopted a supervisory rule requiring all motions requesting Rule 11 sanctions to be filed before the entry of a final judgment and "where appropriate ... at an earlier time-as soon as practicable after discovery of the Rule 11 violation." Cf. General Motors Acceptance Corp. v. Bates, 954 F.2d 1081, 1086-1087 (5th Cir. 1992) (reversing an order imposing sanctions where there was a 33-month delay between the sanctioned conduct and the Rule II motion). See also Cooter and Gell v. Hartmarx Corp., 496 U.S. 384, 398, 110 S. Ct. 2447, 2457, 110 L. Ed. 2d 359 (1990) ("the Advisory Committee did not contemplate there would be a lengthy delay prior to [the imposition of Rule 11 sanctions],,). IIBlum v. Stenson, 465 U.S. 886, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984) (the "lodestar" approach to fee awards in civil rights actions); but see Eastway Constr. Corp. v. City of New York, 821 F.2d 121, 123 (2d Cir. 1987) (courts may award less than the lodestar figure). 1993 Rule 11 contemplates that only attorney fees necessary for deterrence will be awarded. §2.3.2 IFed. R. Civ. P. I1(c)(l)(A) (1993).

66


§2.3.3

motion will undertake whatever investigation is necessary to confirm or refute the factual and legal basis for the challenged pleading. The "safe harbor" provision should have two positive effects on litigation. First, the provision should "significantly thaw the chilling effect [of Rule 11]" by allowing a party who has filed a questionable pleading to withdraw or correct it without penalty. 2 Second, the provision should greatly reduce the number of sanction motions and lower the temperature of civil litigation. On the other hand, attorneys on both sides might manipulate the provision for tactical purposes. A lawyer could file a meritless complex pleading to cause the opponent to incur attorney fees necessary to research and respond, safe in the knowledge that the pleading can be withdrawn without penalty" On the other side of the "v.," a lawyer could notice a sanction motion in response to a clearly meritorious pleading to sow seeds of doubt in the enemy camp. At a minimum, this tactic would cost the opponent attorney fees, and it might prompt the opponent to withdraw or change a meritorious pleading. Presumably, however, courts will find a way to sanction bad faith manipulation of the safe harbor provision.

§2.3.3

Who May Be LiableforSanctions

The 1983 version of Rule 11 provides that the court shall penalize Rule 11 violations by an appropriate sanction on "the person who signed it, a represented party, or both."! In contrast, 1993 Rule 11 provides that one "presenting" a pleading to the court by "signing, filing, submitting, or later advocating" may be liable," and further that "[a]bsent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates and employees."3 The 1993 changes were intended to legislatively overrule Pavelic and LeFlore v. Marvel Entertainment GrOUp.4 In Paoelic, the Supreme Court resolved a conflict in 2Comment, Frivolous Litigation, Discretionary Sanctioning and a Safe Harbor: The 1993 Revision of Rule 11,43 Kan. L. Rev. 207, 227 (1994). 3Comment, A Practitioner's Guide to the 1993 Amendment to Federal Rule ofCivil Procedure 11,67 Temp. L.Q 265,287 (1994). §2.3.3 IFed. R. Civ. P. II (1983). 2Fed. R. Civ. P. I I (a) (1993). 3Fed. R. Civ. P. I I (c)(I)(A) (1993). 4493 U.S. 120, 110 S. Ct. 456, 107 L. Ed. 2d 438 (1989).

67

§2.3.3


the circuits- by holding that sanctions cannot be imposed on nonsigning lawyers under 1983 Rule 11. It is important to note, however, that Pavelic does not entirely shield those operating behind the scenes from liability for bad faith litigation; the decision addressed only liability under Rule 11. Nor does Pavelic preclude a claim by the signing lawyer (perhaps an overpaid, but impecunious, junior associate who knows only the senior partner's version of what happened) for indemnity from the one who crafts the litigation." Even so, the following is good advice. [C] ounsel should be selective in the documents that they sign. Where responsibility for a suit is divided among several law firms or attorneys counsel would be well-advised to make sure that the attorney responsible for the contents of the document is the one who signs it. Alternatively, counsel may have several attorneys sign a document so that it is clear to the court exactly who is taking responsibility for it. 7

In jurisdictions following 1993 Rule 11, liability will presumably follow responsibility. Ordinarily, a firm will be responsible for its pleadings, regardless of individual authorship. As stated in the Advisory Committee Notes, "[I]t is appropriate that the law firm be viewed as jointly responsible under established rules of agency."B Clients are subject to sanction to the extent that they are responsible for the problem. In Business Guides Inc. v. Chromatic Communications Enterprises, Inc.,9 the Supreme Court held that a party signing a document, whether represented or not, is subject to an objective standard of reasonable inquiry into the truth of the facts asserted. In the more common situation of a nonsigning client whose misrepresentations result in a meritless pleading, liability may be imposed under both the "represented party" provision of 1983 Rule 1110 and the 1993 Rule 11 provision extending sanctions to those "responsible for the violation." II Under sCalloway v. Marvel Entertainment Group, 854 F.2d 1452 (2d Cir. 1988) (liability for nonsigning attorneys); Robinson v. National Cash Register Co., 808 F.2d 1119 (5th Cir. 1987) (no liability for nonsigning attorneys). 6See also Blue v. United States Dept. of the Army, 914 F.2d 525 (4th Cir. 1990) (senior partner who put inexperienced associate in charge of frivolous case should be considered better target of sanctions). "Robinson, 808 F.2d at 1129. 8Fed. R. Civ. P. 11 advisory committee's note (1993), reprinted at 146 F.R.D. 589. 9498 U.S. 533, III S. Ct. 922, 112 L. Ed. 2d 1140 (1991). IOHomico Constr. and Dev. Co. v. Ti-Bert Sys., 939 F.2d 392, 394 (6th Cir. 1991). "Fed. R. Civ. P. I I(c) (1993).

68

Conunencing

Litigation: Judicial

Sanctions

§2.3.4

1993 Rule 11, monetary sanctions are not to be imposed on represented parties for mistakes about the applicable law-the Advisory Committee felt that parties should be able to rely on their lawyers to know the law. 12

§2.3.1:

Procedural Aspects

To avoid satellite litigation, the 1983 Advisory Committee's states a preference for summary disposition of sanction motions:

note

To assure that the efficiencies of the pleading regime will not be offset by the cost of satellite litigation over the imposition of sanctions, the court must to the extent possible limit the scope of sanction proceedings to the record.'

At the same time, the Committee noted that the "procedure must comport with due process requirements,"2 and the Supreme Court has said that "attorney's fees should not be assessed lightly or without fair notice and an opportunity for a hearing on the record."? Due process requires notice and an opportunity to be heard." However, 1983 Rule 11 is silent on the issue of notice. Construing the rule in Donaldson v. Clark,5

12Fed. R. Civ. P. 11 advisory committee's note (1993), 146 F.R.D. at 589 (noting, however, that sanctions or remedial orders, such as issue preclusion, may have adverse financial consequences). §2.3.4 'Fed. R. Civ. P. 11 advisory committee's note (1983). In Willy v. Coastal Corp., 503 u.s. 131, 112 S. Ct. 1076, 117 L. Ed. 2d 280 (1992), the Supreme Court held that a district court can impose Rule 11 sanctions even though it is ultimately held that the court is without subject matter jurisdiction. -Fed. R. Civ. P. 11 advisory committee's note (1983). 3Roadway Express Inc. v. Piper, 447 U.S. 752, 767, 100 S. Ct. 2455, 2464, 65 L. Ed. 2d 488,501-502 (1980). 4Eastway Constr. Corp. v. City of New York, 637 F. Supp. 558, 568 (E.D.N.Y. 1986), rev'd, 821 F.2d 121 (2d Cir. 1987) ("In the case of sanctions this would seem always to require that the attorney be given notice of the motion for fees and have an opportunity to address the court before sanctions are imposed."). See also Boettcher v. Hartford Ins. Group, 927 F.2d 23 (I st Cir. 1991) (courts relying on inherent power for the imposition of sanctions must also provide notice); Newton v. A. C. & S., Inc., 918 F.2d 1121 (3d Cir. 1990) (remanding with instructions to vacate fines for failure to afford adequate notice and a prior hearing); Securities Indus. Assn. v. Clarke, 898 F.2d 318, 322 (2d Cir. 1990) (reversing a $5,000 Rule 11 sanction for failure to give notice); Eash v. Riggins Trucking, Inc., 757 F.2d 557,570-571 (3d Cir. 1985); Miranda v. Southern Pac. Transp. Co., 710 F.2d 516, 525 (9th Cir. 1983). 5819 F.2d 1551 (II th Cir. 1987).

69

§2.3.4


the court held that the rule serves to notify counsel of his general responsibilities; ordinarily, no additional notice is required when a complaint is dismissed as factually insufficient; but more specific notice nury be required if the issue is whether the complaint was flied for an improper purpose or whether the attorney made a good faith argument under the law." The Donaldson court noted that while due process requires an opportunity to be heard, 1983 Rule 11 does not require a sanction hearing in every case. Whether and to what extent a hearing is required depends on the nature of the issue: When an attorney has failed to present necessary factual support for claims despite several opportunities to do so ... further hearing on the sanctions issue may well be not only unnecessary but also a waste of judicial resources. On the other hand, when a court is asked to resolve an issue of credibility or to determine whether a good faith argument can be made for the legal position taken, the risk of an erroneous imposition of sanctions under limited procedures and the probable value of additional hearings are likely to be greater. I

The 1993 version of Rule 11, however, requires that notice be given either by the motion (if sanctions are sought by opposing counsel) or by a show cause order "describing the specific conduct" if the court initiates the proceeding." In either event, the attorney will have an opportunity to explain his conduct in a hearing. The following examples illustrate the need for a pre sanctions hearing: 1. After the complaint is dismissed, the defendant asks for sanctions on the ground that the complaint was not well grounded in fact. The plaintiff's attorney alleges that he conducted a reasonable investigation, but did not discover the facts that undermined his client's claim. Sanctions cannot be imposed without a hearing to determine what the lawyer knew and the reasonableness of his investigation. 9 6Id. at 1560. lId. at 1561. 8Fed. R. Civ. P. I 1(c)(l)(B) (1993). "Oliveri v. Thompson, 803 F.2d 1265 (2d Cir. 1986) (plaintiffs civil rights action did not violate Rule II because the attorney was unaware that photos and tapes in the hands of the police demonstrated that the client was not telling the truth about his arrest).

70


§2.3.4

2. The winning attorney moves for attorney fees, and the losing attorney disputes the reasonableness of the fees or claims that some of the time charges are properly attributable to questionable conduct on the part of the winner." The court may not impose fees as a sanction without conducting a hearing into the reasonableness of the "fee bill." 3. The losing attorney asserts that he cannot pay attorney feesor a penalty to the court-without substantial hardship. The court should hold a hearing to gauge the loser's financial resources. II 4. The motion and response raise an issue of the proper allocation of the monetary sanction between attorney and client.'? A hearing is necessary, one that may require the attorney to testify lOMatter of Yagman, 796 F.2d 1165, 1184 (9th Cir. 1986) (error not to carefully scrutinize defendant's claim of $293,000 for attorney fees); compare Brooks v. Allison Div. of General Motors, 874 F.2d 489 (7th Cir. 1989) (denying sanctions on appeal because the appellee filed a "full fledged printed brief on the merits" instead of moving to dismiss the appeal as frivolous; appellee is under a duty to mitigate the costs of defending against frivolous litigation). '~ackson v. Law Firm of O'Hara, Ruberg, Osborne and Taylor, 875 F.2d 1224, 1232 (6th Cir. 1989) (requiring trial courts to consider ability to pay and other mitigating factors); Doering v. Union County Bd. of Chosen Freeholders, 857 F.2d 191, 196 (3d Cir. 1988) (obligation to consider the offending lawyer's ability to pay);Matter ofYagman, 796 F.2d at 1185; Eastway Constr. Corp. v. City of New York, 637 F. Supp. 558, 573 (E.D.N.Y. 1986), reo'd, 821 F.2d 121 (2d Cir. 1987). 12Thornton v. Wahl, 787 F.2d 1151 (7th Cir. 1986); Hollis v. United States, 744 F.2d 1430, 1433 (10th Cir. 1984); Eastway Constr. C01P., 637 F. Supp. at 569-570 (cases discussing the allocation of sanction between attorney and client). In Calloway V. Marvel Entertainment Group, 854 F.2d 1452, 1474-1475 (2d Cir. 1988), the court set forth the following rules: 1. a represented party should not be held liable for counsel's violation of the rule unless the party was personally aware of or responsible for the violation; 2. when the party knows that the filing and signing is wrongful, and the attorney reasonably should have known, then sanctions against both are appropriate; 3. when the client has misled the attorney, but the attorney had an objectively reasonable basis to sign the papers in question, then only the party should be sanctioned. The court cited the following cases in support of these rules: Browning Debenture Holders Comm. V. DASA Corp., 560 F.2d 1078 (2d Cir. 1977), Quiros V. Colon, 800 F.2d 1 (1st Cir. 1986) (attorney only); Friedgood V. Axelrod, 593 F. Supp. 395 (S.D.N.Y. 1984) (client only). Other courts would hold litigants to the same objective standards to which lawyers are held. See, e.g., Business Guides Inc. V. Chromatic Communications Enters., 892 F.2d 802 (9th Cir. 1989). For an example of a hearing to fix the responsibility of

71

§2.3.4


against his client if he wishes the blame to be assessed against the client. 13 5. The facts suggest bad faith, in the sense of willful misconduct, on the part of the attorney or his client. The court must hold a hearing to determine bad faith vel non if it wishes to aggravate the penalty that otherwise would be imposed. 14 As suggested by these examples, ordinarily sanctions should be imposed only after a fair hearing followed by specific findings." An additional reason for delaying the imposition of sanctions is to prevent interlocutory lawyer and client, seeJohn v. Barron, 897 F.2d 1387, 1388-1391 (7th Cir. 1990). The client tried to justify his actions by detailing his investigation; the trial court found them both to be at fault and imposed fines of $1,000 each plus attorney fees (not yet determined at the writing of the appellate opinion) for which they were held jointly and severally liable. 13Schwarzer, supra §2.1.3 note 4, at 199. Of course, when there is a question as to whether the client or the lawyer is at fault, the client will need new counsel to represent him. See Calloway, 854 F.2d 1452 (citing Easuoay Constr. Corp. 637 F. Supp. at 570). See also In re Ruben, 825 F.2d 977 (6th Cir. 1987); Ala. Op. 87-156 (1987) (if Rule II sanctions are sought against the lawyer and client, the lawyer may continue the representation if the client consents after full disclosure, but must withdraw ifhe will have to testify adversely to the client-independent counsel for the client suggested as an alternative); Mich. Op. CI-1127 (1986) (imposition of discovery sanction on lawyer and client will not necessarily require withdrawal). See also Healy v. Chelsea Resources Ltd., 113 F.R.D. 499 (S.D.N.Y. 1990) (discussing proper handling of conflicts). 14Textor v. Board of Regents ofN. Ill. Univ., 711 F.2d 1387, 1395 (7th Cir. 1983) (former Rule II; error to place burden on lawyer to show an absence of bad faith). 151993Rule II (c)(3)requires findings by the court imposing sanctions. Ray Scharer & CO. V. Plabell Rubber Prods., Inc., 858 F.2d 317, 320 (6th Cir. 1988); INVST Fin. Group V. Chern-Nuclear Sys., 815 F.2d 391 (6th Cir. 1987); Tom Growney Equip., Inc. V. Shelley Irrigation Dev., Inc., 834 F.2d 833, 836 (9th Cir. 1987) (holding that due process requires notice and an opportunity to be heard); Eash V. Riggins Trucking, Inc., 757 F.2d 557, 571 (3d Cir. 1985); Burbank, supra §2.1.3 note 10, at 25-34 (strongly recommending that courts engage the putative offender in "dialogue" before imposing sanctions; attorney should know not only that sanctions are being considered, but also the nature of the possible penalties); Renfrew, Discovery Sactions: AJudicial Perspective 67 Cal. L. Rev. 264, 281 (1979). The case ofNasco Inc. V. Calcasieu Television and Radio, Inc., 894 F.2d 696 (5th Cir. 1990), qffd sub nom. Chambers V. Nasco, Inc., 501 U.S. 32, III S. Ct. 2123, 115 L. Ed. 2d 27 (1991), is startling not only for the amount of monetary sanctions (more than $1 million), but also for the trial court's disbarment of the attorneys for periods ranging from six months to five years. The attorneys were notified after the sanctions hearing that the court was considering disbarment, and they were invited to submit written statements in explanation or mitigation. This, said the appellate court, satisfied due process. See Figuera-Ruiz V. Alegria, 905 F.2d 545,547,549 (1st Cir. 1990) (lower court denied Rule II sanctions, but warned counsel that he was on a "dangerous

72


§2.3.4

appeals. While sanctions imposed on parties are generally not appealable until the conclusion of the litigation, attorneys, as nonparties, may appeal sanctions imposed solely against them if their right of effective review may be compromised by delay. 16 To avoid delaying litigation, a court may wish to defer the enforcement of any monetary sanction against an attorney until the conclusion of the litigation. In some cases, however, the court should impose sanctions at the time of the wrongdoing to deter future abuses.'? When the complaint is legally unsound, some courts have summarily imposed sanctions. Their rationale apparently is that no factual issue is raised by ignorance of the law.18 There is an analogy to the appellate process, in which double costs and attorney fees can be assessed for meritless appeals. 19 Even in "law-deficient" cases, however, it has been suggested that a hearing may be necessary to determine what reasonable lawyers would consider a defensible conclusion under the law.20 Certainly, a hearing is required if the nature or amount of the sanction depends on contested facts." While it is preferable to hold the hearing before the sanction is imposed, due process is probably satisfied so long as the attorney has a fair opportunity to set aside or modify the path along the outer limits of Rule 11." The First Circuit vacated the decision on the grounds that the denial of sanctions, coupled with the court's warning to counsel, was ambiguous. "[T] he proper disposition of this appeal depends upon our knowing more precisely how the district court means to resolve Perez Bach's motion for sanctions."). 16Riverhead Sav. Bank v. National Mortgage Equity Corp., 893 F.2d 1109, 11131115 (9th Cir. 1990). 17Matter ofYagman, 796 F.2d 1165, 1183 (9th Cir. 1986) (trial court erred by failing to sanction the lawyer at the time of the misconduct); Schwarzer, supra §2.1.3 note 4, at 197. "Mcf..aughlin v. Bradlee, 803 F.2d 1197, 1205 (D.C. Cir. 1986) (approving fee sanction of $12,000 imposed without notice or hearing); Rodgers V. Lincoln Towing Serv., Inc., 771 F.2d 194,205-206 (7th Cir. 1985) (approving fee sanction 0[$858, noting that the attorney could have contested the penalty by way of motion for reconsideration). 19E.g., Mone V. C.I.R., 774 F.2d 570 (2d Cir. 1985) (taxpayers deducted all their living expenses on theory that they had been told by the Life Science Church that merely living was the work of the Church; the appeal raising this issue was deemed frivolous); Chu by Chu V. Griffith, 771 F.2d 79 (4th Cir. 1985). 2°Eastway Constr. Corp. V. City of New York, 637 F. Supp. 558, 568 (E.D.N.Y. 1986), reo'd, 821 F.2d 121 (2d Cir. 1987). 21Id.at 571-575; but cf. Note, Financial Penalties Imposed Directly against Lawyers in Litigation without Resort to the Contempt Power, 26 UCLA L. Rev. 855, 884 (1979) (though due process seems to require notice and hearing, some state courts impose penalties without these protections).

73

§2.3.4


sanction.F Apart from due process, 1993 Rule 11 requires notice and a hearing in all cases. Appellate review of Rule 11 sanctions is governed by an abuse of discretion standard. Resolving a conflict in the circuits.P the Supreme Court held in Cooter and Cell v. Hartmarx Corp.24that the abuse of discretion standard applies to (1)findings of fact made to determine whether Rule 11 was violated; (2)the conclusion that a particular set of facts violates Rule 11 (previously considered a "legal" issue reviewable de novo on appeal); and (3) the amount and type of sanction. The Court rejected the argument that appellate courts should exercise de novo review over "legal" issues and held that a deferential standard should be applied to all Rule 11 issues. Being familiar with the issues and litigants, "the district court is better situated than the court of appeals to marshall the pertinent facts and apply the fact-dependent legal standard mandated by Rule 11."25 The scope of appellate review was not changed by the 1993 amendment" On another issue decided in Cooter and Cell, however, the 1993 amendment effects a change. The Cooter Court held that voluntary dismissal does not affect a court's authority to impose sanctions. "The district court's jurisdiction, invoked by the filing of the underlying complaint, supports consideration of both the merits of the action and

221993 Rule II requires a hearing before sanctions are ordered. Link v. Wabash RR., 370 U.S. 626, 632, 82 S. Ct. 1386, 1389,8 L. Ed. 2d 734, 739 (1962) (dismissal of case for failure to appear; the Court noted that the lawyer had failed to move for reopening of the matter under Rule 60(b)); contra Beatrice Foods v. New England Printing, 899 F.2d 117l, 1177 (Fed. Cir. 1990) (reversing the imposition of sanctions under 28 U.S.C. § 1927, holding that the party was denied due process by the imposition of sanctions without notice and an opportunity to be heard; the opportunity to move for reconsideration is not the equivalent of a pre decision hearing); Tom Growney Equip., Inc. v. Shelley Irrigation Dev., Inc., 834 F.2d 833, 836-837 (9th Cir. 1987) (due process ordinarily requires notice and opportunity to be heard before sanctions imposed); see also Burbank, supra §2.1.3 note 10, at 33 ("The problem with a procedure that relegates dialogue to a motion for reconsideration ... is the practical one of changing the judge's mind and the sym bolic one of persuading those who are sanctioned that the reconsideration process is not a feint."). 23Brown v. Federation of St. Medical Bds. of United States, 830 F.2d 1429, 1434 (7th Cir. 1987); Robinson v. National Cash Register Co., 808 F.2d 1119, 1125-1126 (5th Cir. 1987); Zaldivar v. City of Los Angeles, 780 F.2d 823, 828 (9th Cir. 1986). See Cavanaugh, supra §2.1.3 note 22, at 535-536. 24496 U.S. 384, 110 S. Ct. 2447, 110 L. Ed. 2d 359 (1990). 25Id. at 402, 110 S. Ct. at 2459. 26Fed. R. Civ. P. 11 advisory committee's note (1993).

74

Cornrraencing


§2.3.5

the motion for Rule 11 sanctions arising from that filing [TJhe violation of Rule 11 is complete when the paper is filed "27 The 1993 version of Rule 11, however, states that monetary sanctions may not be awarded on the court's initiative unless the show cause order is issued before dismissal or settlement. 28 In Cooter and Cell, the Court also held that litigants and attorneys cannot be sanctioned under Rule 11 for groundless appeals. Rule 11 does not apply to appellate court proceedings. Federal Rule of Appellate Procedure 38, providing for an award of damages and costs when the court of appeals determines an appeal is frivolous, governs the litigants' conduct on appeal. "If the appeal of a Rule 11 sanction is itself frivolous, Rule 38 gives the appellate courts ample authority to award expenses."29

§2.3.5 The Appropriate Sanction One of the most important changes worked by the 1993 amendments was making sanctions discretionary, rather than mandatory. The 1983 version of Rule 11 stated that if there has been a violation, the court shall impose sanctions; 1993 Rule 11 states that the court may impose an appropriate sanction. The amendment allows judges to withhold sanctions if a sanction would serve no useful purpose. Under either version of Rule 11, the sanction should be tailored to the transgression. In the words of a leading Rule 11 authority, "[TJhe basic principle governing the choice of sanctions is that the least severe sanctions adequate to serve the purpose should be imposed." 1 The goals 27496 U.S. at 390, 110 S. Ct at 2455. Compare Blue v. United States Dept. of the Army, 914 F.2d 525 (4th Cir. 1990) (sanctions should not be awarded for opposition to sanctions motion). 28Fed.R. Civ. P. II(c)(2)(B)(1993). 29496 U.S. at 395, 110 S. Ct. at 2462. In Partington v. Gedan, 923 F.2d 686 (9th Cir. 1991) (en bane), the court held that a federal appellate court could not incorporate Rule II into its own local rules in light of Cooter and Gell. §2.3.5 'Schwarzer, supra §2.1.3 note 4, at 201. E.g., White v. General Motors Corp., Inc., 908 F.2d 675 (10th Cir. 1990) (vacating award of sanctions because trial court did not consider question of least amount necessary to deter future misconduct); Thomas v. Capital Sec. Servs., 836 F.2d 866, 878 (5th Cir. 1988) (adopting the principle of the least severe sanction to serve the purposes of Rule II, which might be "a warm friendly discussion on the record, a hard-nosed reprimand in open court, compulsory legal education, monetary sanctions, or other measures appropriate to the circumstances"); Note: Applying Rule II to Rid Courts of Frivolous Litigation without Chilling the

75

§2.3.5


of 1983 Rule 11 are restitution, punishment, and deterrence." The goals of 1993 Rule 11 are limited to punishment and deterrence; payment of fees and expenses is permissible only when appropriate to those ends." Under either the 1983 or the 1993 version of the rule, a court may choose from the following sanctions: 1. 2. 3. 4.

private reprimand, mandatory continuing legal education," public reprimand," an order that the transgressor pay all or part of the opponent's costs and attorney fees,

5. fines,"

Bar's Creativity, 76 Ky. L]. 891 (1987-1988) (courts should resolve doubts in favor of counsel and select the least severe sanction). 2Brown v. Federation of St. Medical Bds. of United States, 830 F.2d 1429, 14371438 (7th Cir. 1987); Carlucci v. Piper Aircraft Corp., 775 F.2d 1440, 1453 (11th Cir. 1985). 3Fed. R. Civ. P. 1I (c)(2) (1993); see Pope v. Federal Express Corp., 49 F.3d 1327 (8th Cir. 1995) ($30,000 joint sanction against client and lawyer affirmed as within discretion of trial court). "Oxfurth v. Siemens, A.G., 142 F.R.D. 424 (D.N]. 1991) (attorney required to take seminars in law office management, the Federal Rules of Civil Procedure, and federal court practice). 5Unanue-Casal v. Unanue-Casal, 898 F.2d 839, 841 (1st Cir. 1990) (a trial court may "sanction" an attorney by describing a pleading as "irresponsible litigation" and saying no further sanction is necessary; the court's opinion then becomes a reprimand, reviewable on an abuse of discretion standard); Pony Express Courier Corp. v. Pony Express Delivery Serv., 872 F.2d 317 (9th Cir. 1989) (public reprimand instead of fee award); Schwarzer, supra §2.1.3 note 4, at 201-202 (while publication of a name in the official reports undoubtedly has a deterrent effect, this remedy may be unduly harsh in light of the permanent mark on the lawyer's reputation; courts should consider a limited nonpublic circulation, such as copies to firm members). 61993 Rule II(c)(2) provides for penalties to be paid to the court. Case law under 1983 Rule II includes fines: John v. Barron, 897 F.2d 1387 (7th Cir. 1990) (fines of $1,000 each on client and lawyer in addition to attorney fees); Donaldson v. Clark, 819 F.2d 1551 (l l th Cir. 1986); United Food and Commercial Workers Union Local No. 115 v. Armour and Co., 106 F.R.D. 345 (N.D. Cal. 1985), discussed in Oliphant, supra §2.1.1 note 6, at 762-763. See also Fox v. Acadia St. Bank, 937 F.2d 1566, 1571 (II th Cir. 1991) ("Rule 11 does not create an absolute entitlement to even reasonable attorney's fees if the court determines that the rule's central goal of deterrence may be achieved by a lesser sanction. The reverse is also true, for the rule permits a court to impose sanctions greater than the moving party's attorney's fees if the court determines that such sanctions are required to deter further unreasonable conduct.").

76


§2.3.5

6. issue preclusion, and 7. dismissal. 7

In addition, the court may report the attorney to the appropriate disciplinary authorities for violating the lawyering codes." The choice and amount of sanction are within the trial court's discretion, subject to review on an abuse of discretion standard.? Fines in excess of that required to compensate the court'? for the expense caused by the Rule 11 violation are punitive and of questionable constitutionality, since they are imposed without the procedural safeguards required in criminal cases.'! Large fines should be assessed only in extreme cases. 12 Any monetary assessment-whether characterized as fine or fee awardshould reflect the degree of wrongdoing and the resources of the transgressing lawyer. 13 7Fed. R. Civ. P. II, advisory committee's note (1993), 146 F.R.D. at 589 (issue preclusion and dismissal are severe remedies and should be reserved for serious violations). 8The ABA Code of]udicial Conduct Canon 3(B)(3) states that ajudge should take or initiate appropriate disciplinary measures against a lawyer for unprofessional conduct of which the judge becomes aware.] udges are also obligated by the lawyer codes to take action if a lawyer commits a serious ethical breach. DR 1-103(A); Model Rule 8.3(a). 9E.g., Pope v. Federal Express Corp., 49 F.3d 1327 (8th Cir. 1995); Thomas v. Capital Sec. Servs., 812 F.2d 984, 989 (5th Cir. 1987); Eastway Constr. Corp. v. City of New York, 821 F.2d 121, 122 (2d Cir. 1987) (increasing the sanction from $1,000 to $10,000, a figure the court stated to be at the "lower limit of the range appropriate for this case"). IOKearns v. Ford Motor Co., 114 F.R.D. 57, 67 (E.D. Mich. 1987) (fixing $600 as the cost to the taxpayers of one hour of the court's time). liThe attorney does not have the procedural safeguards associated with criminal contempt, notably a reasonable doubt standard. Donaldson v. Clark, 819 F.2d 1551 (11th Cir. 1987); Kleiner v. First Natl. Bank of Atlanta, 751 F.2d 1193 (I l th Cir. 1985) (upholding a $50,000 fine for disobeying an order not to contact class members); but see Nelken, Sanctions under Amended Federal Rule II-Some "Chilling" Problems in the Struggle between Compensation and Punishment, 74 Geo. LJ. 1313 (1986). 12Unioil v. E. F. Hutton and Co., 809 F.2d 548 (9th Cir. 1986) (upholding a $291,000 fee sanction on a lawyer who did not adequately investigate a claim before filing); Matter ofYagman, 796 F.2d 1165 (9th Cir. 1986) ($293,000 fee sanction reversed because trial court did not properly allocate fault between lawyers); Carlucci v. Piper Aircraft Corp., 775 F.2d 1440,1453-1454 (11th Cir. 1985) ($10,000 fine remanded to trial court for findings). 131993 Rule II clearly contemplates this factor. An excellent opinion decided under 1983 Rule II is Eastway Construction Corp. v. City of New York, 637 F. Supp. 558 (E.D.N.Y. 1986), rev'd, 821 F.2d 121 (2d Cir. 1987), in which]udge Weinstein detailed the inquiry that should precede a Rule II sanction. Cf. Brown v. Federation of St. Medical Bds. of U.S., 830 F.2d 1429 (7th Cir. 1987) (court should set forth reasons for the amount of the sanction and how such amount was figured). See also Doering v. Union County Bd. of Chosen Freeholders, 857 F.2d 191 (3d Cir. 1988) (court must consider

77

§2.4

§2.4


Contempt

Judges have the inherent power to hold individuals subject to the court's jurisdiction-primarily parties, counsel, witnesses, and court personnel-in contempt. Civil contempt is an equitable remedy to coerce compliance with court orders or to compensate one injured by the contemnor, while criminal contempt is intended to punish disobedience of court orders or contemptuous behavior. I The key question in distinguishing civil from criminal contempt is whether compliance with a court order will "purge" the contempt-that is, relieve the offender of the penalty of fine or imprisonment. 2 One incarcerated for civil contempt can be held until that person complies with the court order or convinces the judge that there is no realistic possibility of compliance. 3 mitigating [actors and select least severe sanction); Willy v. Coastal Corp., 855 F.2d 1160 (5th Cir. 1988) (court must explain reason for sanction and basis of calculation of money award). Bar Plan v. Campbell, 60 U.S.L.W. 2225 (Mo. App. 1991) (exclusion in malpractice policy for "fines," "statutory penalties," and damages for "deliberately wrongful acts" would apply to deny coverage for Rule II sanctions for deliberately wrongful acts, but would be read to permit coverage for negligent acts); Note, Insuring Rule 11 Sanctions, 88 Mich. L. Rev. 344 (1989). §2.4 'International Union, UM\I\1A v. Bagwell, 114 S. Ct. 2552 (1994) ($64 million fine, labeled civil by the trial court, held to be a criminal penalty by the Supreme Court); 18 U.S.C. §401 provides for criminal penalties for misbehavior and for disobedience of court orders. 2Hicks on Behalf of Feiock v. Feiock, 485 U.S. 624, 108 S. Ct. 1423, 99 L. Ed. 2d 721 (1988). If the "fine" can be said to be compensatory (because it is measured by actual loss to an aggrieved party), payment will purge the contempt. 3Beres, Civil Contempt and the Rational Contemnor, 69 Ind. LJ. 723 (1994). See Matter of GrandJury re Acceturo, 242 NJ. Super. 281, 576 A.2d 900 (1990) (a witness incarcerated for nine months for refusal to give testimony failed to convince court that incarceration had lost its coercive effect; case cited of contemnor incarcerated for over five years); Morgan v. Foretich, 564 A.2d 1 (D.C. App. 1989). Dr. Elizabeth Morgan was incarcerated for over two years for refusing to reveal to her husband, Dr. Eric Foretich, the whereabouts of their child, Hillary Foretich. In this highly publicized case, Dr. Morgan alleged that Dr. Foretich had sexually abused the child, and Dr. Morgan was willing to undergo indefinite incarceration, rather than deliver the child to the father. The court of appeals found that after two and a half years that incarceration was no longer coercive because there was no realistic possibility that Dr. Morgan would comply with the court's order, and that she was entitled to have the matter treated as one of criminal contempt. The court then agreed to hear the matter en bane (564 A.2d at 20) but before the hearing could take place, Congress passed a statute that effected her release (D.C. Code Ann § 11. 740). It later developed that the parents of Dr. Morgan had taken the child to New Zealand, and a New Zealand court awarded custody of Hillary to Dr. Morgan. Ruling on Custody Ends Bitter Case, N.Y. Times, Dec. 1, 1990, at Lll.

78


§2.4

Incarceration for criminal contempt, on the other hand, punishes for past behavior and must be for a definite term. Contempt can be "direct" or "indirect." Direct contempt, civil or criminal, is conduct occurring in the presence of the judge and may be punished summarily" Indirect contempt is conduct occurring outside the presence of the judge and can be punished only after notice and a hearing> To punish a contempt summarily, the judge must have personal knowledge of the facts, and summary disposition must be necessary to preserve the court's authority. 6 When either of these elements is absent, due process requires notice and an opportunity to be heard. 7 There is a right to jury trial on the contempt charge if the applicable criminal contempt statute provides for incarceration of six months or more or, absent statutory limits, if the sentence is six months or more." There is also a right to jury trial if the judge reserves rulings on contempts occurring during a trial and gives consecutive sentences totalling more than six months." Contempts that insult the judge should not be decided by the judge who has been insulted. If necessary to preserve order, the insulted judge may summarily deal with the contempt. If the contempt is not dealt with on the spot, however, due process requires that another judge be appointed to decide whether contempt has occurred and to fix the penalty. 10 It violates due process to convert a sanctions hearing under Rule 11 or 28 U.S.C. §1927 into a contempt proceeding. Rule 11 and §1927 penalties are civil in nature, while fines for contempt are criminal penalties.!' Contemptuous behavior or disobedience of court orders may "Fed. R. Crim. P. 42(a). 5Fed. R. Crim. P. 42(b). 6See United States v. Engstrom, 16 F.3d 1006 (9th Cir. 1994), for repeated incidents of contemptuous behavior by counsel, which should have been (but which were not) severely punished when they occurred. 'United States v. Harris, 382 U.S. 162,86 S. Ct. 352,15 L. Ed. 2d 240 (1965). "Bloom v. Illinois, 391 U.S. 194,88 S. Ct. 1477,20 L. Ed. 2d 522 (1968). "Codispotti v. Pennsylvania, 418 U.S. 506,94 S. Ct. 2687,41 L. Ed. 2d 912 (1974); United States v. Pina, 844 F.2d I (I st Cir. 1988). IOFed.R. Crim. P. 42(b); Mayberry v. Pennsylvania, 400 U.S. 455, 91 S. Ct. 499, 27 L. Ed. 2d 532 (1971); Pina, 844 F.2d I (defendant called judge a "cold-blooded f ... ing wizard" and a "no-good maggot"). IICf. Downy v. Clauder, 30 F.3d 681 (6th Cir. 1994) (reversing the imposition of a $5,000 fine imposed for contempt after a hearing in which counsel confined the arguments to the issue of whether §1927 penalties were appropriate).

79

§2.4


be the subject of civil or criminal sanctions or both. Due process requires, however, that the offender receive adequate notice of the nature of the proceeding and the possible sanctions. Assume that a lawyer, who has a good excuse, arrives late to court and is threatened with contempt by the judge. The lawyer should recognize that she is being charged with a misdemeanor, and that there may be serious repercussions of being found guilty of a misdemeanor affecting the administration of justice. 12 The lawyer should point out that criminal contempt requires intent, and that she cannot be judged to be in contempt unless it can be established beyond a reasonable doubt that she intended to be late. The lawyer should further insist that the contempt, if any, is indirect, not direct, and that consequently due process requires a hearing before a different judge. 13 Assume that the judge ignores the lawyer's attempt to explain and fines her $50. The lawyer should ask for a stay of the fine and take an appeal, posting bond if necessary. The lawyer should not acquiesce in the judge's actions and pay the fine. Any judgment of contempt will have to be reported in future bar admissions and may trigger a disciplinary inquiry. The same advice holds true in a trial setting when the judge who has "heard enough" tells the lawyer to "sit down or I'll hold you in contempt." The lawyer should take the warning seriously and comply with the judge's order. It may be difficult, however, for counsel to know where the judge's "line" is, and an attempt to explain may incite the judge to find contempt. The lawyer should attempt to have the ruling set aside because of the potential career consequences of a contempt finding. Contempt is not to be dealt with lightly. Preventive Ethics Checklist

Before You File a Complaint Research the facts as thoroughly as possible. o If applicable, document the reasons why you were not able to investigate more thoroughly.

o

12Model Rule 8.4(b), (d). 13Inre Yengo, 84 NJ. Ill, 417 A.2d 533 (1980), holds that if the lawyer has a reason for being late, the contempt did not occur in the presence of the judge. In re Contempt of Nasser, No. 11S04-9412-Cr-1190 (Ind. Dec. 8, 1994), 10 ABA/BNA Current Reports 430 (1994), holds that being late is a direct contempt, although the lawyer in that case was given a hearing before a special judge and a chance to explain.

80

Conunencing Litigation:Judicial Sanctions

D D D

§2.4

Identify the allegations you believe you will be able to support by information gained in discovery. Research the law thoroughly. If the law is against you, make it clear you are making a good faith argument to change the law.

After the Complaint Is Filed D Do not advocate a pleading you have come to know lacks legal or factual basis. D Do not file motions or other pleadings to delay the process or to harass your opponent. D File only pleadings with sound factual and legal bases. D Keep time records, even if you are on a contingent fee contract. Movingfor Sanctions D Consider that it may not be in your client's best interest to move for sanctions, even if sanctions are warranted. D Do not submit an unreasonable fee request; you may wind up as the one sanctioned. D Remember that 1993 Rule 11 requires that you serve the motion on the opponent, but not file it for 21 days; this gives your opponent a "safe harbor" to withdraw the pleading. Dl!fonding against Sanctions D The 1993 version of Rule 11 gives you 21 days to correct or withdraw the pleading. D Under 1993 Rule 11, sanctions are not mandatory. D The court should impose the least severe sanction necessary to further the aims of deterrence and punishment. VVlzen Threatened with Criminal Contempt D Remember that contempt is a crime that requires that you acted willfully. D Request a hearing at a later time before a different judge. D Do not agree to a finding of contempt and a small fine; there may be serious collateral consequences.

81

3 Conflicts of Interest

§3.l Introduction §3.2 Comparison of the Code of Professional Responsibility and the Model Rules §3.3 Purposes Served by Rules Prohibiting Conflicts of Interest §3.4 Preliminary Problems §3.4.l Identifying the Client §3.4.2 Identifying "Significant Others" §3.4.3 Positional Conflicts §3.4.4 Lawyer Interests Adverse to Client Interests §3.5 Simultaneous Representation §3.5.l General §3.5.2 Contemporaneous Litigation-Related and Unrelated Matters §3.5.3 Coparties §3.5.4 More on Corporate Representation §3.6 Subsequent Representation §3.6.l General §3.6.2 Substantial Relationship §3.6.3 The Rejected Case §3.6.4 Unrelated Matters

83

Conflicts of Interest

§3.6.5

The Demise of the Appearance of Impropriety Standard §3.7 Duties upon Discovery of a Conflict §3.7.1 Disclosure §3.7.2 Consentability §3.7.3 Withdrawal §3.8 Imputed or Vicarious Conflicts §3.8.l General §3.8.2 Law Firms and Affiliates §3.8.3 Entering or Leaving a Firm §3.8.4 Screening §3.8.5 Local and Cocounsel §3.8.6 Other Relationships §3.9 Disqualification Motions §3.9.l Mechanics and Tactics §3.9.2 Standing §3.9.3 Work Product of Disqualified Counsel §3.9.4 Other Remedies §3.9.5 Appellate Review §3.9.6 Discipline §3.l0 Conflicts and Malpractice §3.ll Conflicts Control Systems

§3.1

Introduction

The biblical injunction that no man can serve two masters I has always occupied a prominent position in lawyer codes of conduct. For example, Judge Sharswood's classic treatise observed: [T]he advocate is bound in honor, as well as duty, to disclose to the client at the time of the retainer, every circumstance of his own connection with the parties or prior relation to the controversy, which can or may influence his determination in the selection of him for the office. An attorney is bound to disclose to his client every adverse retainer, and even every prior retainer, which may affect the discretion of the latter. 2 'Matthew 6:24 (King James). 2See, e.g., G. Sharswood, An Essay on Professional Ethics 109-110 (6th ed. 1930) (portions of which were presented in lecture form at the University of Pennsylvania in 1854). See also ABA Canons of Professional Ethics, Canon 6 (1908). For an interesting historical perspective regarding the lawyer codes, see Pearce, Rediscovering the Repub-

84


§3.2

The nature of modern law practice has resulted in heightened awareness of potential conflicts of interest. The growth of larger, multioffice, and multistate firms has increased the incidence of conflicts of interest and led to the development of manual and computerized systems to centralize control over the acceptance of retainers. In addition, the increased movement of younger lawyers between law firms, at times attributable to more stringent criteria for election to partner, has caused us to reexamine conflicts rules that were perhaps more suitable for the horse-and-buggy era. The increasing complexity of litigation and the nature of the modern business client (frequently a corporation with one or more parents, subsidiaries, or affiliates) have also contributed to a proliferation of conflict scenarios that the average lawyer is likely to encounter. Finally, there is a sense abroad that motions to disqualify counsel have become a tool in the litigation lawyer's bag of tricks. In recent years, the subject of conflicts of interest has accounted for more space in the law reviews than any other topic relating to professional ethics. Accordingly, one cannot realistically expect to cover the whole subject or provide the definitive piece." Instead, the authors hope to provide a practical, short guide to the subject of conflicts in general litigation. Other chapters will elaborate on conflicts of interest in particular settings, such as criminal and insurance defense.

§3.2

Cornpanison of the Code of Professional Responsibility and the Model Rules

The Code of Professional Responsibility addresses conflicts of interest in a series of disciplinary rules grouped under Canon 5. These rules deal with conflicts originating in the lawyer's personal interests (DRs 5-101, 5-103, and 5-104), conflicts arising from the simultaneous representation of multiple clients (DRs 5-105 and 5-106), and conflicts arising from the lawyer's actual or perceived obligations to third parties (DR 5-107). In addition, the Code addresses the lawyer-witness rule in DRs 5-101(B) and 5-102, although it would have been better to distinguish lawyer-witness scenarios from conflict of interest scenarios. 1 lican Origins of the Legal Ethics Codes, 6 Geo. J. Legal Ethics 241 (1992). 3A classic "Note" in the Harvard Law Review covered 249 pages. See Developments in the Law-Conflicts of Interest in the Legal Profession, 94 Harv. L. Rev. 1244 (1981). §3.2 'See discussion in Chapter 4.

85

§3.2


Noticeably absent in the Code is an explicit rule relating to conflicts between present and former clients. When the Code addresses conflicts, it does so in rather curious language. For example, DR 5-105 instructs the lawyer not to accept or continue multiple representation if the exercise of his independent professional judgment in behalf of a client will or is likely to be adversely affected ... or if it would be likely to involve him in representing differing interests ... [unless] it is obvious that ... [the lawyer] ... can adequately represent the interest of each and if each consents to the representation after full disclosure of the possible effect of such representation.

Unfortunately, use of such language as "likely" and "possible" leads to much hair-splitting about the distinction between actual and potential conflicts. Moreover, the choice of the word obvious is unfortunate. When is it ever "obvious" that a conflict does not exist? This rather Byzantine linguistic formula leaves much to be desired, adding very little, if anything, to the conflicts rules contained in the earlier 1908 Canons. In addition to these disadvantages, the Code contains the muchquoted Canon 9, which states that "a lawyer should avoid even the appearance of professional impropriety." A close reading of the Code reveals that no disciplinary rule expressly requires lawyers to avoid such appearances. Instead, Canon 9 precedes three rather narrow rules relating to former judges and former government lawyers, as well as a rule prohibiting statements or implications to the effect that a lawyer can improperly influence tribunals, legislative bodies, and public officials. Nevertheless, Canon 9's "Caesar's Wife"2 standard has taken on a life of its own and has become a primary mode of "analysis" under the Code, at least in the minds of its most enthusiastic supporters." Use of this vague standard has come under increasing judicial criticism" and fortunately has been abandoned in the Model Rules. 2Plutarch, Lives 680 (J. Dryden trans. and A. H. Clough rev., Modern Library Giant ed. 1932). Caesar replied when asked why he parted with his wife, "I wished my wife to be not so much as suspected." As to what Caesar's first wife, Pompeia, might have been suspected of, see R. Wilkin, Eternal Lawyer 104-108 (1947) (a legal biography of Cicero). "See R. Wise, Legal Ethics 155 (1966). "See Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982); Armstrong v. McAlpin, 625 F.2d 433 (2d Cir. 1980), vacated, 449 U.S. 1006, 101 S. Ct. 911, 66 L. Ed. 2d 835 (1981) (denial of motion to disqualify not an appealable order).

86


§3.2

In contrast to the Code, the Model Rules address each common conflict scenario in a separate black letter rule. Rules relating to the lawyer's personal and business interests are included in Model Rule 1.8, dealing with "prohibited transactions." The lawyer-witness rule (Model Rule 3.7) is given its proper place in a series of provisions deali (\i with trial advocacy. Model Rule l. 7 is divided into two parts. Model Rule l. 7(a) deals with representation of a present client "directly adverse" to another present client and is specifically directed to the representation of opposing parties in litigation." Simultaneous representation of parties, such as coplaintiffs or codefendants, whose interests may conflict, as well as conflicts arising from the interests of other clients, third persons, or the lawyer herself, is addressed in Model Rule l. 7(b). Generally, these rules prohibit representation unless the lawyer "reasonably believes" that the representation of a client will not be "adversely affected" and the client consents after consultation. This formula retains the rule that a lawyer ordinarily may not act as advocate against a person the lawyer represents in some other matter, but the lawyer is given more flexibility in other contexts (not involving "direct adversity") than allowed under the Code. Perhaps the most valuable contribution of the Model Rules is the explicit formulation of a rule governing conflicts between the interests of present and former clients. Model Rule l.9, discussed in detail in §3.6, explicitly covers the "former client" situation. Model Rule 1.10 is the rule on imputed conflicts-the situations in which a lawyer's conflicts will be imputed to his partners and associates. That rule, as well as rules governing the responsibilities of former government lawyers and judges (the so-called revolving door problem), is discussed in §3.8. In 1989, the ABA revised Model Rules l.9 and 1.10 by moving what was formerly Model Rule l.10(b) to l.9 as new l.9(b); old Model Rule l.9(b) became l.9(c). In addition, new Model Rule 1.9(c) was amended to make it clear that a former client's protected information must not be revealed without the client's consent. This amendment worked no substantive change. Finally, Model Rule 1.8(i) addresses the questions arising when close lawyer-relatives turn up on opposing sides of a case. There has been considerable confusion regarding the application of conflicts rules 5Model Rule 1.7, Comments

[2J, [7].

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§3.2


in this context, and much of the conventional wisdom may fairly be characterized as unrealistic, if not draconian. The drift toward a new mode of analysis of these conflicts, culminating in Model Rule 1.8(i), will be discussed in §3.8.6. Several other provisions of the Model Rules should be mentioned because they impact the "subsequent representation" issue."Model Rule 2.2 allows a lawyer to mediate disputes between clients if the lawyer reasonably believes that the matter can be amicably resolved and the clients give informed consent. A lawyer mediating a dispute must inform the clients that communications will not be privileged in a later controversy between the parties," and that the lawyer cannot represent either party in such a dispute." The lawyer's firm is imputedly disqualified." Model Rule 1.12 governs lawyers who are acting as arbitrators or mediators between nonclients. In such a case, the lawyer may not represent either party in a later dispute involving the subject matter of the mediation or arbitration. However, screening is permitted; the lawyer's firm is not disqualified if the conflicted lawyer is screened from participation and apportioned no part of the fee.10 Thus, in a failed mediation between clients, screening is not an option; but in a failed mediation between nonclients, it is an option. In a case of first impression, however, a federal court ruled that the scope of a matter calling for disqualification of a mediator between nonclients is governed by the broad standard of Model Rule 1.9 ("substantially related"), rather than the narrow standard of Model Rule 1.12 ("discrete, identifiable transaction"). 11

§3.3

Purposes Served by Rules Prohibiting Conflicts of Interest

Two basic principles underlie the rules prohibiting lawyer conflicts of interest: The lawyer must represent the client with undivided or "undi6See §3.6. "The prevailing view is that communications from joint clients are not privileged in disputes between the clients. Model Rule 2.2, Comment [6]. For a discussion of Model Rule 2.2, see Dzienkowski, Lawyers as Intermediaries, 1992 U. Ill. L. Rev. 741. 8Model Rule 2.2(c). 9Model Rule I.IO(a). See discussion of cases allowing screening in §3.8.4. IOModel Rule 1.12(c). 1 1 Poly Software Ind. Inc. v. Yu Su, 880 F. Supp. 1487, 1491-1494 (D. Utah 1995) (Model Rule 1.9, rather than Model Rule 1.12, controls).

88


§3.3

luted" loyalty and must protect the client from disclosure or adverse use of the client's confidential information. A third principle, that counsel must avoid "even an appearance of impropriety," continues to merit historical, if not honorable, mention. The loyalty principle is, of course, a basic tenet of the AngloAmerican notion of what it is to be a lawyer. Perhaps the most famous (if extreme) expression of the credo is attributed to Henry (Lord) Brougham. In his defense of Queen Caroline in 1820, Lord Brougham reportedly reminded the House of Lords that an advocate, in the discharge of his duty, knows but one person in all the world, and that person is his client. To save that client by all means and expedients, and at all hazards and costs to other persons ... is his first and only duty.' This commitment to undivided loyalty is the theoretical linchpin of Canon 7 of the Code. Loyalty is, in the words of the Model Rules, "an essential element in the lawyer's relationship to a client."? As one would §3.3 12Trial of Queen Caroline 8 (1821). Compare F Wellman, Day in Court 77 (1931) ("This is an extreme view."). Forsyth quotes a letter sent to him by Brougham in 1859, in which Brougham observes: The real truth is, that the statement was anything rather than a deliberate and well-considered opinion. W. Forsyth, Hortensius: A History of Advocates 380 (1880). Others agree with a narrower assessment of Brougham's statement. Cooler critics, however, refuse to recognize the validity of this charter, "wide as the winds," which Lord Brougham conferred on the profession, and restrict the privileges of counsel to much narrower limits. R. Harris, Hints on Advocacy (Intended for Practitioners), in Civil and Criminal Courts (with Suggestions) 154 0N. Murfee, Sr., rev., 1880). For more commentary on Brougham's statement, see T. Shaffer, American Legal Ethics 204-206 (1985). Shaffer views the statement as an instance of "greymail" ("the threat to use damaging but irrelevant facts, which threat results in useful and relevant concessions from the other side, and is never carried out"), rather than a serious effort to state an ethic of the profession. 2Model Rule 1.7, Comment [IJ. Trial lawyers may be heard to say, "God save me from an impartial lawyer." If what is meant is that the advocate should be a champion and not a judge or an intermediary, the expression is sound. It is more than folk wisdom; it is the fundamental professional tenet. Cf 2 Boswell, The Life of Johnson 47 (Hill ed. 1887). On the other hand, just as "zeal" need not be equated with "zealotry," "impartiality" need not be equated with "disloyalty." A lawyer should bring his "independent professional judgment" to bear in assisting the client. Properly understood, "impartiality" may be used as an equivalent of "independence of professional judgment." Cf. Lawyer's Creed A.I: "I will be loyal to my client and committed to my client's cause, but will

89

§3.3


expect, the principle takes on particular importance when a lawyer attempts to simultaneously represent adverse interests> or takes on a representation adverse to the lawyer's personal interests. 4 Of equal importance, if of more recent lineage," are the "modern" rules relating to confidentiality.To be sure, the principle of confidentiality is an essential element of any professional relationship." Nevertheless, its peculiar importance in the lawyer-client relationship is apparent in the words of a California judge describing a lawyer who broke confidence under a threat of contempt: "Defendant's attorney should have chosen to go to jail and take his chances of release by a higher court."? Because of the principle of confidentiality, any representation that will entail the use of another present client's or former client's confidential information can present a conflict of interest problem. For example, a lawyer may be precluded from representing a client if adequate representation of that client would necessitate the adverse use of another client's privileged information," may be barred from representing a present client against a former client in a substantially related matter, 9 or may be foreclosed from attacking the credibility of a witness who is also a present or former client if to do so would involve the adverse use of information about that client. 10 not permit that loyalty and commitment to interfere with my ability to provide my client with objective and independent advice; .... " C. P. Harvey, The Advocate's Devil 112 (1958). "[0] nee [h]e identifies himself so closely with his client that the client's wrongs and grievances seem to be his own he loses his objectivity and, with it, much of his value as an advocate." Furthermore, the notion that loyalty cannot be the sole basis of a professional's "ethics" is hardly new. CfJackson, The American Bar Center: A Testimony to Our Faith in the Rule of Law, 40 A.B.A. J. 18, 21 (Jan. 1954): "In the attorney-client relation the client is not a master, the lawyer is not a mere hired hand-he is an officer of the court, with a duty of independent judgment in the performance of his professional services .... " 3See §3.5. 4See §3.4.4. 5See, e.g., D. Mellinkoff, The Conscience of a Lawyer 138 (1973). 6F. Bennion, Professional Ethics 70-80 (Gr. Brit. 1969). 7People v. Kor, 129 Cal. App. 2d 436, 447,277 P.2d 94, 101 (1954). It should be noted that this view, like Lord Brougham's, may be something of an overstatement. See DR 4-10 I(C)(2) (disclosure pursuant to court order). USee§3.5.2. 9See §3.6. IOSee§3.6.4. See also Restatement of the Law Governing Lawyers §§20 I, Comment b, and 213, Comment f(ii) (Tentative Draft No.3, 1990); §201, Comment b (Tentative Draft No.4, 1991). The Restatement identifies the "client's expectation of effective representation" and the "interests of the legal system in obtaining adequate presentation of matters to tribunals" as an additional rationale for the conflicts rules.

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§3.4

§3.4.1

PreliIninary Problerns

Conflicts having the potential for diverting the lawyer from giving full attention to the clients' interests can arise from obligations owing, or perceived to be owing, to other present or former clients or to third persons, as well as from the lawyer's own personal interests. Unfortunately, it is often difficult to determine the identity of the client to whom the lawyer's undivided loyalty is owing. For example, who is the client when the lawyer represents an entity such as a corporation or government agency? Similarly, many lawyers have difficulty recognizing the significance of pressures exerted by nonclients. It would be useful to have some sort of guidelines for identifying "significant others" whose interests in the lawyer's work might give rise to conflicts of interest. These and other preliminary problems are addressed in the following sections. §3.4.1

Identifying the Client

Lawyers are constantly called upon to represent organizations or entities, particularly corporations and government agencies. Such entities can exist and operate only through their agents, and human nature would ordinarily lead the lawyer for the organization to identify with particular individuals within the organization. Accordingly, conflicts can arise from the lawyer's failure to identify the client to whom her allegiance is owed-specifically, the entity, as opposed to any of its constituents (in the case of a corporation, its shareholders, officers, directors, and employees).' The notion that the lawyer for the corporation represents the entity and not its constituents is alluded to in EC 5-18, and the entity-as-client concept has been incorporated in Model Rule 1.13. Moreover, the Model Rule extends the concept to any client organization, including government organizations." When the issue of client identity is resolved, the lawyer can begin to identify the person or persons authorized to §3.4.1 'Niagara-Genesee Carpenters v. United Bhd. of Carpenters, 859 F. Supp. 65 (W.D.NY 1994) ("internecine feud" within a union resulting in disqualification of lawyers on both sides); Restatement of the Law Governing Lawyers §212 (Tentative Draft No. 4,1991). 2Model Rule 1.13, Comment [2]. This concept may not be applied if the corporation is small and closely held. See, e.g., In re Brownstein, 288 Or. 83, 602 P.2d 655 (1979); In re Banks, 283 Or. 459, 584 P.2d 284 (1978).

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§3.4.1


define the client's (entity's) objectives and resolve conflicts between the entity and one or more constituents having adverse interests. This does not mean that the entity's lawyer may run roughshod over the trust and confidence imposed on the lawyer by the constituents of the corporation. However, the lawyer must ensure that all constituents understand the limits of counsel's role when a potential conflict becomes apparent (if not before). The lawyer must warn constituents whose interests conflict with the interests of the entity that their communications to the lawyer cannot be kept confidential from the entitya "Miranda" warning of sorts." Failure to adequately warn an employee can result in an implied attorney-client relationship with the employee; in turn, this can result in the attorney being disqualified or held liable to the employee." A lawyer representing a corporate client may be subject to other risks stemming from the relationship between the corporate client and some other corporation or entity. Specifically,there is a risk that lawyers representing one corporation or entity will be regarded as representing other entities in the same corporate family. Certainly, the lawyer must take care to avoid conflicting representations in litigations between brother and sister corporations and parent and subsidiary corporations. 5 The courts are split on the issue of whether a parent corporation and its related subsidiaries are the same client for purposes of Model Rule 1.7. In Vanderveer Group o. Pelruny,6 the court refused to disqualify a law firm that sued a corporation owning 51 percent of the stock of the firm's corporate client. Other courts, however, have disqualified counsel in similar scenarios.' The West Virginia Supreme Court reprimanded 3Model Rule 1.13(d); Model Rule 4.3 (dealing with unrepresented persons). "Mirandizing" may save the day in the event that the constituent later sues the lawyer for malpractice. See TJD Dissolution Corp. v. Savoie Supply Co., 460 N.W2d 59 (Minn. App. 1990) (constituent's claim of attorney-client relationship and malpractice "unreasonable"); Cutler, The Role of the Private Law Firm, 33 Bus. Law. 1549, 1555-1556 (1978); Bloch, Representing Corporate Employees during an Antitrust GrandJury Investigation, 56 Antitrust LJ. 901 (1987). "Perez v. Kirk and Carrigan, 822 S.W2d 261 (Tex. App. 1991) (employer's lawyer sued for misleading employee-breach of implied attorney-client relationship). 5See Restatement of the Law Governing Lawyers §212, Comment d (Tentative Draft No.4, 1991). 61993 WL 308720 (E.D. Pa. 1993). 7Whiting Corp. v. White Mach. Corp., 567 F.2d 713 (7th Cir. 1979) (corporate client of firm owned 20% of stock and had the right to name 40% of the directors of defendant); see also Hilton v. Barnett Banks, Inc., 1994 WL 776971 (M.D. Fla. 1994).

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§3.4.1

an attorney, representing a divorce client, who allowed his partner to file a suit in an unrelated matter against a corporation in which that client was a 52 percent owner; the court held this to be the equivalent of suing a present client." Unforeseen conflicts can arise when a corporate client acquires another entity for business reasons. In Gould v. Mitsui Mining and Smelting,9 a law firm was permitted to drop one client and retain the other to avoid disqualification. The court distinguished other cases prohibiting counsel from curing "open file" conflicts by dropping one or the other of the clients because the firm did not create the conflict. The firm was ordered to protect the dropped client's confidences by screening the lawyers who had worked for that client from further involvement in the case.!?While Gould reaches a reasonable result, other courts have taken the position that lawyers representing corporations assume the risk that their clients may acquire or be acquired, resulting in conflicts and requiring withdrawal.'! Similar confusion regarding client identity can arise in connection with the representation of unincorporated associations, partnerships, and joint ventures. Such organizations have been viewed as aggregates of individuals, as opposed to entities. If a lawyer represents such an association, it may be contended that the lawyer represents each of its individual members or constituents. The lawyer might face unanticipated objections if she takes up a matter against a member or constituent of such an association. 12 The ABA visited these issues in a series of ethics opinions. 13 The ABA Committee rejected any per se rules governing conflicts between

8Committee on Legal Ethics v. Frame, 189 V,./. Va. 641,433 S.E.2d 579 (1993). 9738 F. Supp. 1121 (N.D. Ohio 1990). !OSeediscussion of screening in §3.8.4. In Gould, the court did note an ethical violation (the firm's failure to timely inform the clients of the conflict and withdraw or obtain consent) and referred the matter to disciplinary counsel. "Strategem Dev. Corp. v. Heron IntI. N.V, 756 F. Supp. 789 (S.D.N.Y 1991). See also Pennwalt v. Plough, Inc., 85·F.R.D. 264 (D. Del. 1980) (firm allowed to drop a client, but the result might have been different had confidential information been transmitted). 12ABA,Legal Background to the ABA Model Rules of Professional Conduct 176 (1983) (citing Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir. 1978)). 13ABAFormal Op. 95-390 (1995) (conflicts of interest in the corporate family context); ABA Formal Op. 92-365 (1992) (trade associations as clients); ABA Formal Op. 91361 (1991) (representation of a partnership).

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§3.4.1

Conflicts

of Interest

related corporations and constituents of partnerships and other unincorporated associations. While urging lawyers to seek client consent as a matter of "prudence and good practice," the opinions downplay the risks of conflict." For example, in its opinion on partnership conflicts, the Committee suggested that the lawyer for a partnership might be able to sue one of its partners so long as the suit was unrelated to partnership matters. The Committee's majority opinion on "corporate family" conflicts drew some strong dissent. The majority was criticized for treating the need for consultation with the client as one of etiquette or "prudence" and not as one of ethics. In cases of this type, the constituent's belief that she has an attorney-client relationship with the entity attorney must be reasonable. In Cole o. Ruidoso Municipal Schools.'? for example, a school principal sued a school board and sought to disqualify the school board attorney on the basis of communications to the attorney substantially related to the subject of the litigation. The question was whether the principal was a former client of the attorney. It was clear that the attorney had never advised the would-be client other than in her role as principal. The principal's belief that the attorney represented her was unreasonable, and the court consequently refused to disqualify the attorney. §3.4.2

Identifying "Significant Others"

Most of the discussion in the following sections addresses conflicts between the interests of the lawyer's present clients or between the interests of the lawyer's present and former clients. Nevertheless, attention must be paid to interference from nonclient sources. Turning to the Code, DR 5-107 directs that the lawyer avoid being "influenced by others than the client." Similarly, Model Rule 1.7(b) warns of indirect influences arising from the lawyer's responsibility to other clients1 and nonclient third persons. For purposes of the present 14ABAFormal Op. 95-390 (1995). 1543F3d 1373 (10th Cir. 1994). §3.4.2 1Aswe will point out in §3.5.2, Model Rule 1.7(a) addresses direct conflicts between present clients. Nevertheless, even if a lawyer concludes that there is no direct conflict, a particular scenario may involve a potentially troubling indirect conflict that may materially limit, or dilute, the quality of the lawyer's representation of a present client.

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§3.4.3

discussion, we shall refer to non client third persons as "significant others." Comment [9] to Model Rule 1.7 alludes to certain significant others, specifically those of the "third-party payor" variety. The comment mentions, for instance, the defendant-client's liability insurer and the corporation paying for the defense of a client-constituent. Other examples include the parent bankrolling a child's representation" and the advocacy organization that funds litigation for the indigent client. Obviously, no list of significant others could ever be exhaustive." Some conflicts involving significant others will be discussed in Chapters 14 and 15, dealing with special problems associated with criminal and insurance defense practice." §3.4.3

Positional Conflicts

Even indirect conflicts between the interests of clients can materially limit the ability of a lawyer to adequately represent one or the other of the affected clients. Perhaps one of the most overlooked types of indirect conflict is the positional coriflict,l which arises when clients have opposite interests, but not in the same litigation or "matter." This occurs when a lawyer desires to stake out a particular position as to the meaning of a statute, case, or doctrine, which could have an adverse impact on another client. This type conflict can also occur when a lawyer strives for a particular factual result that would be opposed by another client. When such a conflict arises because two clients have antagonistic interests regarding a legal question in different pending cases, it may be referred to as an issue conilict? Such conflicts are alluded to in Comment 2Cf. People v. Stewart, 126 A.D. 2d 943,511 N.YS.2d 715 (1987) (lawyer for defendant represented interests of client's father to detriment of client). 3For the suggestion that the interests of LBJ may have been a concern of the defense in the Bobby Baker case, see E. Thomas, The Man To See: Edward Bennett WilliamsUltimate Insider; Legendary Trial Lawyer 183-184, 224 (1991). +Conflicts arising out of the lawyer's relationship with other clients, family members of clients, and significant others in the romantic sense are discussed in some depth in American Academy of Matrimonial Lawyers, Standards 2.18, 2.22 (1991). §3.4.3 'See Dzienkowski, Positional Conflicts, 75 Tex. L. Rev. 457-540 (1993). 2See, e.g., Estates Theaters, Inc. v. Columbia Pictures Indus., Inc., 345 F. Supp. 93 (S.D.N.Y 1972); Medina, Ethical Concerns in Civil Appellate Advocacy, 43 Sw. LJ. 643,

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§3.4.3


[8] to Model Rule 1.7. The comment makes a rather unpersuasive distinction between asserting conflicting positions in cases pending in different trial courts (permissible)" and asserting such positions in different appellate courts (impermissible). This distinction ignores the persuasive value of decisions from coordinate courts. For instance, suppose that a lawyer successfully argues one construction of a statute before a trial judge and then argues an opposite construction of the statute before a different judge of the same court. One must assume that the second judge will be persuaded by the decision of the first and will be reluctant to reach a contrary result. An influential state bar committee opined that for pragmatic reasons (including the difficulty of spotting such conflicts)the "ethics rules" should not be applied to "issue conflicts," and that the nondisclosure of "issue conflicts" should not be deemed a violation of the rules requiring competency and loyalty+ Yet the committee acknowledged that the "prudent lawyer would be well-advised to disclose issue conflicts to clients the lawyer has reason to believe might be harmed by the continued undisclosed dual representation."> This opinion seems both self-serving and self-contradictory. In any event, it is likely that clients will feel betrayed by lawyers who "speak out of both sides of their mouths."? The ABA Committee addressed the problem in Formal Opinion 93-377. In effect, the Committee stated that positional conflicts should be analyzed under Model Rule 1.7(b) (the "materially limited" standard). According to the opinion, the attorney should analyze the potential harm to each client, refuse representation (or withdraw) when it

677, 690, 693 (1989) (citing this treatise and discussing use of Model Rule 1.2(c), which provides that lawyer and client may limit the scope of representation to solve problems arising from issue conflicts). 3But see Philadelphia Op. 89-27 (1990). "Cal. Op, 1989-108. See also Restatement of the Law Governing Lawyers §209, Comment f (Tentative Draft No.3, 1990) (minimizing issue conflicts). sCal. Op, 1989-108. 6For other approaches to issue conflicts, see New York City Op, 1990-4 (1990); Restatement of the Law Governing Lawyers §209, Comment f (Tentative Draft No.3, 1990). Lawyers who would "talk out of both sides of their mouths" must be satisfied that such advocacy will harm neither client and must obtain informed consent. 79 A.B.A.]. 92 (Feb. 1993) (noting the case of Fiandaca v. Cunningham, 827 F.2d 825 (1st Cir. 1987), in which a lawyer argued to the judge in case one that a state facility should be used as a mental hospital, while arguing in case two for a different client that it should be used to expand the state's prison facilities).

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§3.4.4

appears likely that a ruling in favor of one client will probably harm the other, and otherwise obtain informed consent. 7

§3.4.4 Lawyer Interests Adverse to Client Interests Unlike the British barrister, who is generally precluded from participating in other trades or businesses, I the American trial lawyer may be involved in all manner of activities. Moreover, American lawyers are not absolutely prohibited from entering into business deals with their clients. Even an absolute ban on such activities would not eliminate all instances in which the exercise of the lawyer's independent professional judgment might be affected by her own financial, business, property, or personal interests." These possibilities are addressed by the Code in DR 5-10 1 (dealing with conflicts between client interests and the lawyer's own financial, business, property, or personal interests) and DR 5-104 (limiting business relations with a client) and by the Model Rules in Rule 1.7(b) (lawyer's own interests) and Rule 1.8 (prohibited transactions). To the extent that these sorts of conflicts are not peculiar to the domain of the trial lawyer, they need not detain us." Instead, we shall concentrate on two peculiar instances of conflict that are perceived to involve the "acquisition of interest in litigation." Specifically, we allude to the rule against advancing or guaranteeing financial assistance to the 7ABA Formal Op. 93-377 (1993). §3.4.4 lW. Boulton, Conduct and Etiquette at the Bar of England and Wales 1822 (6th ed. Gr. Brit. 1975); R. Du Cann, The Art of the Advocate 32 (1964). The governing standards seem to be undergoing some revision. The latest British Code is a Code of Conduct of the Bar of England and Wales (27 Jan. 1990). 2Indeed, there are those who contend that our traditional model, premised on "undivided loyalty" to the client, is at best incomplete. See, e.g., Lerman, Lying to Clients, 138 U. Pa. L. Rev. 659, 666 n.23 (1990) (citing Schneyer, Moral Philosophy's Standard Misconception of Legal Ethics, 1984 Wis. L. Rev. 1529). 3Wewill detain you, however, with a reminder that the exchange of legal services for sexual favors is a disciplinary violation. See, e.g., In re Wood, 265 Ind. 616 358 N.E.2d 128 (1976) (citing DRs 1-102(A)(6) and 5-10 I (A)). For a discussion of whether there should be a rule making it an ethical violation for a lawyer to have a sexual relationship with a client, see Hazard, Lawyer-Client Sex Relations Are Taboo, Natl. Lj., Apr. 15, 1991, at 13 (should be forbidden unless the sexual relationship is pre-existing). The ABA weighed in with a timid opinion in 1992, opining that lawyers are "well-advised" not to have sex with their clients because "of the danger of impairment to the lawyer's representation [of the client]." ABA Formal Op. 92-364 (1992). Pursuant to legislative command (Cal. Bus. and Prof Code §6106.9), California makes sexual relations with clients a disciplinary offense under certain circumstances (Cal. R. Prof Con. 3-120).

97

§3.4.4


client and the rule against acquiring publication rights concerning the subject matter of the representation. With respect to the former, the Code takes a restrictive view in DR 5-1 03(B), which prohibits advances or guarantees of financial assistance to the client. The Code excepts the expenses of litigation, but limits such expenses to court costs, investigation expenses, medical examination fees, and the costs of obtaining and presenting evidence (including experts' fees). In addition, the Code requires the client to remain ultimately liable. This means that the lawyer cannot expressly condition repayment on the result obtained. Although the lawyer's fee may be contingent, the client's duty to repay counsel may not be. This is, of course, a lofty, but empty, principle because a lawyer would hardly bring suit against a client for such expenses if the action were unsuccessful. Moreover, in class action litigation, the representatives would hardly agree to be liable for costs that might greatly exceed any individual recovery" In the class action context at least, the repayment obligation of DR 5-103(B) has been ignored by the courts. 5 In contrast to DR 5-103(B), Model Rule 1.8(e) provides that the client's obligation to repay litigation expenses "may be contingent on the outcome of the matter." While this may be a substantial theoretical breakthrough, it is little more than explicit recognition of established practice in the real world. 6 More troubling are fee contracts that include publication rights. Such contracts are usually associated with criminal cases and are generally condemned as encouraging trials (at the lawyer's insistence) in circumstances in which it might be in the client's best interests to plea bargain. A trial will make the case more notorious and enhance the value of publication rights. Indeed, some courts and commentators have suggested that the interested lawyer might anticipate a greater profit from a guilty client (and therefore be tempted to throw the trial),

'See discussion in Chapter 16. 5Id. 6Model Rule 1.8(e) does not allow an attorney to advance living expenses, perhaps because attorneys might then bid for lucrative personal injury cases. See discussion in S. Gillers, Regulation of Lawyers 209 (4th ed. 1995). For a case relying on this rationale, Gillers cites Maryland Grievance Commission v. Kandel, 317 Md. 274, 563 A.2d 387 (1989). For a case recognizing the legitimacy of advancing living costs where there is a humanitarian need, Gillers cites Florida Bar v. Taylor, 648 So. 2d 1190 (Fla. 1994).

98


§3.4.4

especially if she can spice up the post-mortem account with tidbits that were excluded from the public record (having obtained contractual permission from the client). 7 Regulation in such cases is justified by the risk of adverse impact on the quality of representation and the client's vulnerability to the consequences of postconviction disclosures of otherwise confidential informarion." To that end, the Code (DR 5-104(B)) and the Model Rules (Rule 1.S(d))prohibit the lawyer from negotiating or entering into such arrangements with the client (or anyone else, in the Model Rules version) before the end of the representation, regardless of whether the nature of the representation is civil or criminal. In 1991, the ABA amended the Model Rules to include a new Rule 5.7, titled Provision of Ancillary Services. The next year, however, the ABA House of Delegates rescinded Rule 5.7. In 1994, the ABA adopted a watered-down version of the 1991 rule. The current version of Model Rule 5.7 simply says that a lawyer is subject to the Rules of Professional Conduct when the lawyer provides law-related services to a client unless the client understands that the services are not part of the legal representation. The thrust of Model Rule 5.7 is to put the burden on the attorney to inform the client that there is no attorney-client relationship, and hence no privilege, with respect to the law-related services. 9

"The defendant in a notorious "mercy killing" case assigned the literary and media rights to his defense lawyer in lieu of a fee. The 75-year-old defendant was convicted of murder and sentenced to 25 years in prison without possibility of parole; the lawyer sold the television rights for $50,000. Testifying at a motion for new trial (brought by another attorney), the lawyer conceded that "it is quite possible that the economic factor of the book and possible movie or television rights was prominent in my thinking and perhaps swayed my judgment in some critical areas." Nordheimer, Ethics Peril for Lawyer: Seeing a Trial as Drama, N.Y Times, Mar. 4, 1988, at Y14. See also Larson v. State, 104 Nev. 691, 766 P.2d 261 (1988), in which a conviction was set aside because the lawyer'S judgment was clouded by his quest for notoriety. He urged his client to reject a plea agreement to obtain trial publicity for a "battered woman" defense-which was not suecessfuL But see P. Hastings (K.C.), Cases in Court 298 (1949): [The daily British press developed a practice] of paying large sums of money for a prisoner's defence in return for his life story if he should survive the trial, or possibly his confession if he should not. BSeeIn re von Bulow, 828 F2d 94 (2d Cir. 1987) (defendant's endorsement of book, Reversal of Fortune, waived the attorney-client privilege as to any conversations described by the author, Alan Dershowitz). 9Model Rule 5.7, Comments [5], [6].

99

§3.5

§3.5


SiInultaneous Representation §3.5.1

General

"Thy day is broken and tfry landsflifeit," said the man of law .... Qy.oth Sir Richard, "Thou man qf law, wilt thou not befriend me in nry hour qf need?" "Nay," said the other, "I hold with this holY Prior, who hath paid nry Jee in hard gold, so that 1am bounden to him. "I The notion that an attorney cannot divide his loyalty between present clients by simultaneously representing adverse interests is the most familiar conflicts rule. The rule is sometimes expressed in the maxim that "a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose."? Unfortunately, while this maxim is easy to state, it is ambiguous in application. For example, all would agree both that clients' interests are not in conflict unless they are "adverse," and that having "adverse interests" for purposes of the rule must mean something more than the fact that §3.5.1 'Adventures of Robin Hood 208 (Grossett and Dunlap 1946). 2ABA Canons of Professional Ethics, Canon 6 (1908) and (1937). As Sharswood observed, [V\1hen a client employs an attorney, he has a right to presume, if the latter be silent on the point, that he has no engagements which interfere, in any degree, with his exclusive devotion to the cause confided to him; that he has no interest which may betray his judgment or endanger his fidelity ... [and] an attorney is bound to disclose to his client every adverse retainer. Sharswood, supra §3.1 note 2, at 110 (citing Story,]., in Williams v. Read, 3 Mason 418, 29 F. Cas. 1386, 1390 (C.C. Me. 1824)). Compare Boulton, supra §3.4.4 note I, at 46 (the British authority on the ethics of advocacy): [I]f his acceptance of a retainer or brief or instructions to draw pleadings or advise would be inconsistent with the obligation of any retainer held by him, and, if he has received any such retainer, brief or instructions inadvertently, he should return the same. Compare Simon Mason's Case (Common Bench, 1672, Freem. 74), in which one S. Mason was convicted of being an "Ambidexter, viz., after he was retained by one side he was retained on the other side." For this offense, he was "committed to the Fleet and turned out of the roll." Early case law held that it was slander to say (of a lawyer) "Thou dealest on both sides .... " Byrchley's Case (I 585),Jenkins Rep. 284 (4th ed.).

100


§3.5.2

the parties' interests are generally adverse, as is the situation when the clients are competing business enterprises." Nevertheless, many experienced lawyers believe that there is no prohibited adversity unless the lawyer is actually arguing opposite positions in the same litigation. 4 The modern codes do not admit to such a narrow interpretation of the conflict rules, and rightly so. In litigation, it is now generally recognized that without informed consent a lawyer may not act as advocate against a person the lawyer represents in some other matter, even if the matters are wholly unrelated." Similarly, it is acknowledged that the lawyer'Sresponsibilities to persons other than present clients can impair a lawyer's ability to consider, recommend, or carry out an appropriate course of action for the client-that is, materially interfere with the exercise of the lawyer's independent professional j udgment on behalf of the client." The following sections illustrate the variegated situations that may generate conflicts. §3.5.2

Contemporaneous Litigation-Related and Unrelated Matters

Whenever a lawyer represents more than one client, the interests of the clients can conflict, placing the lawyer in the position of advancing one client's interests at the expense of another client or using one client's confidential information for the benefit of another client. I In other words, adequate representation of present client A may threaten to compromise the legitimate expectations of present client B by depriving B of the full measure of the advocate's loyalty,energy, and zeal or by exposing B to the nonconsensual and perhaps adverse use of information about B or B's cause. By the same token, pulling one's punches to protect B may result in inadequate representation of A. 3See Model Rule 1.7, Comment [2]. 4Compare Thomas, supra §3.4.2 note 3, at 274: "Ed [Williams] use to say that we don't have a conflict until our lawyers meet in court," laughed Califano. "But in this case I was the lawyer for both sides. So we had to drop out of the case." 5See, e.g., Cinema 5, Ltd. v. Cinerama, Inc., 528 F2d 1384 (2d Cir. 1976); Model Rule 1.7, Comments [2], [6]. 6Model Rule 1.7, Comment [3]. §3.5.2 'See Del. Op. 1990-1 (1991) (firm that represents two corporate clients may not reveal to one the possibility that the other is contemplating suit against it).

101

§3.5.2


Nevertheless, it is important to emphasize the fact that this book addresses legal ethics from the viewpoint of the trial lawyer. The authors are providing a sketch of the conflicts rules in the context of contested litigation. In that regard, there is a well-recognized distinction between the rigor with which some conflicts rules are applied in the litigation setting as opposed to the office setting." In the office setting, some conflicts are tolerated that would be unethical in the litigation context. This greater tolerance is because in business and personal planning lawyers often work to resolve conflicts between clients to further the clients' objectives." In order to address problems of the "present client v. present client" genre in the litigation setting, one may safely begin with the general proposition that "thou shalt not sue a present client." Comment [3J to Rule 1.7 states that "[a J lawyer ordinarily may not act as advocate against a person the lawyer represents in some other matter, even if it is wholly unrelated." Ample support for this proposition can be found in the text of both the Code and the Model Rules. The Code provides in DR 5-105 that a lawyer should be cautious in undertaking or continuing the representation of a client when the "exercise of [the lawyer'sJ independent professional judgment in behalf of a client [the new client or another clientJ will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve [the lawyerJ in representing different interests .... " Similarly, Model Rule 1.7(a) provides that a lawyer shall not (subject to exceptions to be discussed later) represent a client "if the representation of that client will be directly adverse to another client." Subsection (b) (again subject to exceptions) forbids representing a client "if the representation of that client may be materially limited by the lawyer's responsibilities to another client." Both subsections make it clear that impermissible conflicts can arise in different-lawsuit scenarios as well as same-lawsuit scenarios. In other words, a lawyer generally may not represent a client whose interests are sufficiently adverse to another present client, even if their lawsuits (or 2Restatement of the Law Governing Lawyers §211 (Tentative Draft No.3, (conflicts in nonlitigation settings); Bennion, supra §3.3 note 6, at 95:

1990)

In non-contentious business however the Law Society takes the view that it is not necessary for clients with inconsistent interests to be separately represented, provided that they are aware that the same solicitor is acting for both. 3C. Wolfram, Modern Legal Ethics 438-439 (1986).

102


§3.5.2

other "matters," to use the language of the Model Rules) are unrelated, so long as there is a substantial risk that the lawyer will be unable to adequately represent the interests of each." These rules must be reckoned with in a variety of contexts extending over a continuum. At one extreme are cases in which a lawyer attempts to represent both sides in the same case; close at hand are cases in which one client sues another client in an unrelated matter. At the other extreme are cases in which there are only generalized ideological or economic differences in the clients' positions. This continuum can be illustrated by the following hypotheticals. Case l: Lawyer represents two clients. He performs legal services in connection with the lending of money from one client to the other to finance the other's business. This deal goes sour, and litigation ensues. Lawyer enters the case to file claims on behalf of each client against the other. This hypothetical seems so absurd as to not merit the reader's attention. Nevertheless, such scenarios have arisen." Case 2: Lawyer is approached by a divorcing couple. Both husband and wife request representation from Lawyer in order to secure a no-fault divorce. They state that they have already worked out an agreement and see no reason to obtain separate counsel. Conventional wisdom rejects the notion that a lawyer can adequately serve the interests of both spouses in the traditional role of the advocate. Divorce mediation is a possibility, though, pursuant to Model Rule 2.2.6

"That this is the ABA position under both the Code and the Model Rules was made clear in ABA Informal Opinion 1495 (1982). Accord Restatement of the Law Governing Lawyers §209, Comment e (Tentative Draft No.3, 1990). For a good discussion of the duty of loyalty as a basis for disqualification of counsel, see British Airways v. Port Auth. of N.Y and Nj., 862 F. Supp. 889,898-899 (E.D.N.Y 1994) (adverse representation in unrelated matters). 5See VVolfram, supra note 3, at 350 n.13, citing Lake County Bar Association v. Gariulo, 62 Ohio St. 2d 239, 404 N.E.2d 1343 (1980), as just such a case, with the added complication that the lawyer also added his own claims against each client! 6Indeed, the following excerpt from Kentucky Op. E-290 (1984) provides a ratiocination that may be applied to other scenarios outside the field of domestic relations.

103

§3.5.2


Case 3: Lawyer has represented Client A in a number of matters in the past and still represents him in a collection case. Lawyer or Lawyer's partner files an action against Client A on behalf of Client B, seeking a substantial sum of money for damages allegedly suffered as a result of Client A's assault on Client B. In such a case, conventional wisdom once again suggests that so long as any work remains to be done on behalf of Client A, Lawyer may not represent Client B, although the two matters are unrelated. Indeed, the reviewing court in the reported opinion from which these facts are drawn condemned the lawyer's conduct as a "reprehensible breach of loyalty."7 Case 4: Lawyer has regularly done corporate work as well as some litigation for Widget Co. on an ongoing, case-by-case basis and anticipates taking more work as it "comes in the door." However, Lawyer's firm is not on retainer and is not working on any Widget

In addition to the risk that the lawyer's inability to explore the available alternatives might result in a settlement that is later perceived to be inadequate by one or the other of the spouses, the representation at the outset will likely prove unsatisfactory because: I. if a subsequent unresolvable conflict develops, counsel would have to withdraw from representing either of the parties, requiring them to retain separate counsel after all; 2. proper representation of both parties would require the lawyer to seek out all relevant information which might otherwise be confidential, and result in a waiver of the attorney-client privilege if the divorce were later contested; 3. joint representation might heighten the degree of judicial scrutiny given to the agreement and ultimately, its nullification. Accord American Academy of Matrimonial Lawyers, Standard 2.20 (1991) ("An Attorney should not represent both husband and wife even if they do not wish to obtain independent representation."). For the malpractice implications of ignoring the conflict, see Simpson v.James, 903 F2d 372 (5th Cir. 1990) (malpractice in the context of representation of both buyer and seller); Winstead v. Berry, 556 So. 2d 321 (Miss. 1989). For other similar scenarios in the context of family law, see ABA Informal Op. 87-1523 (1987) (lawyer may not represent both adoptive and biological parents in private adoption); N.Y Op. 584 (1987) (lawyer may not undertake dual representation in surrogate parenting arrangement). Regarding the impracticability of waiver (informed consent) given the conflicting obligations of confidentiality, see Model Rule 1.7, Comment [4]. 7See Grievance Comm. v. Rottner, 152 Conn. 59, 203 A.2d 82 (1964).

104

Conflicts

of Interest

§3.5.2

file at the moment. Lawyer accepts a case from a new client that involves a product liability claim against the Widget Co. In this case, a court might conclude that there was an ongoing relationship with Widget Co. sufficient to justify disqualification, notwithstanding the absence of a formal retainer;" However, there have been suggestions that a strict rule of disqualification might not obtain if a large corporation spreads its work among the best firms in a geographic area to deny its opponents access to legal talent." Case 5: Lawyer represents a criminal defendant while at the same time representing the prosecutor who is being sued in an unrelated civil matter. The criminal defendant is unaware of the simultaneous litigation. Courts have concluded that this scenario involves an actual conflict constituting ground for appealing a conviction, at least absent a knowing and intelligent waiver by the criminal defendant. 10 Case 6: Lawyer represents Client A in the defense of a civil matter. He is then retained by the insurer of the plaintiff's lawyer to represent that lawyer in the defense of an unrelated legal malpractice claim. This scenario has arisen with surprising frequency; opinions on the propriety of Lawyer's conduct vary. At least one state bar committee has suggested that the representation is improper, II while other opinions permit the representation only if all clients (Client A, plaintiff's counsel BIBM v. Levin, 579 F.2d 271 (3d Cir. 1978). 9McCourt Co. v. FPC Properties, Inc., 386 Mass. 145,434 N.E.2d 1234 (1982). Cf Klein, From Community to Status: The Development of the Legal Profession in Colonial New York, 60 N.Y Rist. 133, 144 (1979), which refers to "legislation in 1695 and 1699 aimed at curbing the practice of wealthy litigants of retaining all the available counsel in a locality, thus denying representation to their adversaries." But see ABA Informal Op. 1495 (1982) (the Code and Rules "prohibit the acceptance of the employment even if ... the corporation employs the service of most of the law firms in the community, thereby making it difficult to retain equivalent counsel"). IOZuck v. Alabama, 588 F.2d 436 (5th Cir. 1979); Restatement of the Law Governing Lawyers §210, Comment d (Tentative Draft No.3, 1990). IIMich. Op, CI-649 (1981).

105

§3.5.2

Conflicts

(who would be a client of initial matter) are apprised tation.l? Another possible closed because there is no

of Interest

Lawyer), and plaintiff's counsel's client in the of the situation and consent to the represenanswer is that there is no conflict to be disadversity in the representation. 13

Case 7: Lawyer represents Client A in a substantial action against a defendant with a limited ability to respond to a judgment (because of limited insurance and assets). Lawyer is asked to represent Client B in another substantial action against defendant. If both actions are successful, the defendant will be unable to satisfy judgments in both cases. "Limited pool" conflicts are particularly troublesome for lawyers who practice in the securities fraud and class action contexts. Cases can be found in which the potential competition for the limited pool was deemed disqualifying," even absent any inconsistency in the plaintiffs' factual or legal positions. IS This brief set of examples is hardly exhaustive, but it illustrates the variety of factual settings implicating the rule against representing clients with adverse interests in a litigation setting. The correct application of the rule is not always evident. As one appellate court observed, "[IJ t is not [alwaysJ obviously apparent [pardon the redundancyJ that [a prohibited conflict existsJ."16 Finally, it should be noted that several of the above hypotheticals fall within the reach of Model Rule 1.7 (b) if they are not governed by Model Rule 1.7(a) (all are within the reach of DR 5-105). This is so, for even if one concludes that there is no "direct adversity," one must take account of the fact that the representation of one client may be "materially limited" by the lawyer's responsibility to another client. On the consentability of such conflicts, see §§3. 7.2 and 3.7.3. 12Ill.Op. 822 (1983); Ky. Op. E-355 (1993); Md. Op. 82-4 (1982); N.Y Op, 579 (1987). 13Md. Op. 82-4 (minority opinion). 14See,e.g., Sullivan v. Chase Inv. Servs. of Boston, 79 ER.D. 246, 258 (N.D. Cal. 1978). See also Restatement of the Law Governing Lawyers §209, Comment d(i) (Tentative Draft No.3, 1990). 15Compare Moore v. Margiotta, 581 E Supp. 649 (E.D.N.Y 1984) (factual and legal inconsistencies between two plaintiff classes represented by the same lawyer). "Beattie v. Firnschild, 152 Mich. App. 785,394 N.W2d 107 (1986) (expert testimony required).

106


§3.5.3

§3.5.3

Coparties

While not all lawyers are sensitive to conflicts between present clients in unrelated litigation, most readily grasp the potential for conflicts in the representation of coparties in a particular litigation. The problems associated with the representation of coplaintiffs and codefendants are discussed in particular contexts in other chapters, but some introductory comments are in order here. In many cases, the coparties' interests are congruent. Indeed, from a tactical point of view,it is ordinarily in their best interests to maintain a united front on all issues, and in their opponent's interest to divide and conquer. Nevertheless, attorneys should, first, presume that adequate representation cannot be afforded to coparties; then they should ask whether the facts and law rebut the presumption. Presuming joint representation to be bad protects lawyers from discipline, disqualification, and malpractice claims. Many a potential conflict between coparties may be waived, since coparties may deliberately choose to abandon particular claims or strategies in favor of a united front. However, the adoption of such strategies presupposes that the lawyer has fully informed each client of the strategic advantages and disadvantages and has obtained voluntary consent to joint representation.' The lawyer who ignores the potential conflicts associated with coparties' representation does so at considerable risk of liability for malpractice to one or more of his clients. Conventional wisdom suggests that each client will be best served by separate counsel who can give his undivided loyalty to the client and guard against the adverse use of the client's confidences and secrets." Chapter 15, dealing with insurance defense practice, addresses coparty conflicts in the context of civil (primarily personal injury) litigation. Chapter 14 discusses conflicts between codefendants in criminal cases. In addition, it is apparent that the simultaneous representation of entities (governmental units and private business organizations) and §3.5.3 [See Model Rule 1.13(e), which indicates that in appropriate circumstances (consistent with Model Rule 1.7) a lawyer might represent both a corporation (or other organization) and a corporate employee (or other constituent of the organization). The corporation's (or other entity's) consent, however, may have to be obtained from some authority or constituent other than the represented employee (or constituent). 2In re Thornton, 421 A.2d 1 (D.C. 1980) (prohibiting representation of both driver and passenger against driver of other vehicle if liability in dispute).

107

§3.5.3

Conflicts

of Interest

their constituents will give rise to subtle, and not so subtle, conflicts of this genre." Finally, issues of indemnification (between principal and agent, employer and employee, and indemnitor and indemnitee pursuant to contract or in tort) are legion in modern law and present the same sort of problem. Some examples are in order. Case 1: The plaintiff sues employer and employee (or principal and agent) in order to recover for damages sustained by the plaintiff as a result of the employee's negligent driving. In such a case, the employer's lawyer would ordinarily be interested in developing evidence that the employee was not acting in the scope of his employment (or agency) because that evidence might preclude the possibility of recovery against the employer (principal). Moreover, the employer (principal) might, in theory, pursue a claim for indemnity against the employee (agent) whose conduct would make the employer (principal) vicariously liable. Case 2: Parent and child (or driver and passenger) are injured as a result of the negligence of some third party tort-feasor. However, there is at the outset some question of the parent's (or driver's) negligence. Once again, the lawyer may not blithely accede to one client's wishes (for example, ignore the passenger's or child's claim against the driver or parent) without considering the interests of the other. The Code provides no special guidance regarding coparty conflicts. In contrast, Comment [6] to Model Rule 1.7 warns that [p] aragraph (a) prohibits representation of opposing parties in litigation. Simultaneous representation of parties whose interests in litigation may conflict, such as co-plaintiffs or co-defendants, is governed by paragraph (b). An impermissible conflict may exist by reason of substantial discrepancy in the parties' testimony, incompatibility in positions in relation to an opposing party or the fact that there are substantially different possibilities of settlement of the claims or liabilities in question. Such conflicts can arise in criminal cases as well as civil. The potential for conflict of interest in representing multiple defendants in a criminal case is so grave

3See §3.3.4.

108


§3.5.4

that ordinarily a lawyer should decline to represent more than one codefendant. On the other hand, common representation of persons having similar interests is proper if the risk of adverse effect is minimal and the requirements of paragraph (b) are met. [Emphasis supplied.] This comment suggests the following: Actual and direct conflicts between coparties that arise when claims are filed by one against the other are governed by Model Rule 1.7(a); on the other hand, even absent direct adversity, indirect and potential conflicts must be considered, since they can materially limit counsel's options and performance. Indirect or potential conflicts are covered by Model Rule 1.7(b).

§3.5.4

More on Corporate Representation

Earlier it was noted that in the corporate setting the corporate lawyer is viewed as representing the entity and not its constituents. Accordingly, corporate counsel must take care to ensure that corporate officers are not misled to the contrary, since the lawyer may ultimately end up acting as the individual constituent's adversary. I In contrast, it was noted that in partnership situations, and perhaps when the corporate entity is indistinguishable from its constituents (if the corporation is small and closely held), the entity concept will not apply, and the lawyer must avoid taking sides if there is a falling-out among constituents. 2 Lawyers who regularly represent corporate clients must also be aware of the potential breadth of application of the basic conflicts rules. For example, if a lawyer does regular work for a corporate client (as outside counsel, and not house counsel), then a court may be receptive to the argument that the corporate client is, for all intents and purposes, a present client of the lawyer, even in the absence of a retainer or the pendency of a particular project. 3 Such a finding might preclude the representation of new clients against the corporate client." Moreover, the more often the lawyer works for the corporate client, the more likely it §3.5.4 'See Model Rule 1.13, Comment [8]. Compare W T Grant v. Haines, 531 F.2d 671 (2d Cir. 1976) (close question as to whether DR 7-104(A)(2) violated). See also §14.3.1 (discussing conflicts in criminal cases). 2Rosman v. Shapiro, 653 F. Supp. 1441 (S.D.N.Y 1987); In re Brownstein, 288 Or. 83, 602 P.2d 655 (1979); In re Banks, 283 Or. 459, 584 P.2d 284 (1978). 3IBM v. Levin, 579 F.2d 271 (3d Cir. 1978). -lId.

109

§3.5.4


will be that the lawyer will obtain disqualifying information under the former client conflicts rule." Shareholder derivative actions are particularly fertile sources of conflicts, especially for house counsel. The fiction in derivative actions is that the corporation is only nominally a defendant. In other words, the derivative plaintiff theoretically is attempting to correct the misconduct of some corporate constituent who is acting to the detriment of the entity. The derivative plaintiff theoretically seeks a recovery for the benefit of the entity. In such situations, the conventional wisdom is that corporate counsel ought not represent both the corporation and the corporate constituents if the charges are nonfrivolous and allege serious wrongdoing. 6

§3.6

Subsequent Representation

§3.6.1

General

Conflicts of interest frequently surface when a lawyer undertakes the representation of a client whose interests are adverse to those of one of the attorney's former clients. This type of scenario is usually styled the former client corflict or the problem of adverse subsequent representation. These conflicts arise from the attorney's obligation to represent the present client with undivided loyalty while simultaneously preserving the former client's confidences and secrets. 5See Chugach Elec. Assn. v. United States Dist. Ct., 370 F.2d 441 (9th Cir. 1966) (knowledge of corporate matters would provide insights and understandings not available to an outsider). But see Unified Sewerage Agency v.Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981) (general information about the "personality" of the client not disqualifying). 6Perhaps the most widely cited case is Cannon v. United States Acoustics Corp., 398 F. Supp. 209 (N.D. Ill. 1975), modified, 532 F.2d 1118 (7th Cir. 1976). See also Model Rule 1.13, Comments [II], [12]. For criticism of Cannon as overly restrictive, see ABA Committee on Professional Responsibility, A Guide for Attorneys; Shipman, Professional Responsibility of the Corporation's Lawyer 280 (1978). The Restatement of the Law Governing Lawyers §212, Comment g (Tentative Draft No.4, 1991) provides an exception for cases deemed frivolous by disinterested directors. The Restatement makes the important observation that counsel should not represent the organization "if the advice of the lawyer, acting for the organization, was the basis for the action of the [challenged] officers and directors."

llO


§3.6.1

The duty of confidentiality is supplemented by a more general notion that having represented a client in a matter, an attorney ought not be permitted to later assume a position hostile to the former client in the same matter or to attack the attorney's earlier work product. 1 In 1989, the ABA added comments to Model Rule 1.9 that make it clear that a lawyer owes a duty of loyalty, as well as a duty of confidentiality, to a former client." Thus, a lawyer cannot attack a contract he has written, even though attacking the contract would not reveal confidential information. 3 The nature of the former conflict is illustrated nicely in an early case of attorney disqualification, Brown v. Miller,4 decided by the Court of Appeals of the District of Columbia in 1923. In that case, the attorney whose conduct was being questioned had represented the office of the alien property custodian, which was required to take charge of and administer the property and affairs of a paper company. After performing services for the custodian in connection with the winding up of the paper company's affairs, the attorney terminated his association with the custodian and thereafter sought to represent a client seeking to recover a large sum of money from the paper company, its directors, and the custodian. The custodian sought a court order disqualifying the attorney on the ground that the attorney had received confidential information §3.6.1 ICompare Boulton, supra §3.4.4 note 1, at 45 (the British authority on the ethics of advocacy): No counsel can be compelled to accept a retainer or brief or to advise or draw pleadings if he has previously advised another person on or in connection with the same matter, and he ought not do so if he would be embarrassed in the discharge of his duty by reason of confidence reposed in him by such other person. On attacking one's earlier work on behalf of another, see In re Evans, 113 Ariz. 458, 556 P.2d 792 (1976); In re Schaumann, 243 Ga. 138,252 S.E.2d 627 (1979). See also Carlson v. Langdon, 751 P.2d 344 (VITyO. 1988) (lawyer attempted to represent a position adverse to one of the parties, for whom he had earlier drafted an instrument, in a matter arising out of a dispute about rights under the instrument (a lease)-substantial relationship test met). 2Model Rule 1.9, Comment [II]. See generally Gillers, supra §3.4.4 note 6, at 293. 3In re American Airlines, Inc., 972 F.2d 605 (5th Cir. 1992); Brennan's Inc. v. Brennan's Restaurant, Inc., 590 F.2d 168 (5th Cir. 1979). See also Restatement of the Law Governing Lawyers §213, Comment b (Tentative Draft No.3, 1990). Section 213 (I) of Tentative Draft Number 4 (1991), is worded differently, but the substance seems unaffected. However, the duty of loyalty will not result in the imputed disqualification of a firm to which the attorney moves. Model Rule 1.9, Comment [11]. -1286F 994, 52 App. 330 (1923).

nc.

111

§3.6.1


while representing the custodian that could be used to the custodian's disadvantage. In ruling on the petition for the attorney's removal, the court encountered a series of issues that have continued to vex trial judges in disqualification proceedings involving the former client conflict. The court resolved the controversy in favor of the former client in language that bears a striking similarity to modern formulations: Was the relation of [attorney] to the Custodian such as to justify [the trial court's decree of disqualification]? The law is well settled that an attorney, having acted as such for a client, cannot thereafter assume a hostile position to him about the same matter, and cannot later use against him knowledge or information obtained from his client while that relation subsisted.'

This old case demonstrates that motions to disqualify counsel have a long history and introduces us to many of the former client conflict Issues: 1. Is there a substantial relationship between the current representation and the former client relationshipi" 2. What evidence establishes the existence of a substantial relationship? 3. Which party has the burden of proving the existence of a substantial relationship? 4. What isthe effectof proof of the existence of a substantial relationship? 5. If an individual attorney in a firm is burdened by a conflict, must the entire firm be vicariously disqualified? 6. Are former government attorneys to be treated in like fashion? As noted in the introductory sections of this chapter, the Code of Professional Responsibility does not contain explicit former client conflict rules. Without the benefit of an explicit rule or rules, the courts 5286 F. at 997. The court also noted that "it should not be necessary for the court to go into a detailed question[ing] of how much a lawyer knows of the business of his clients in each case." Compare Restatement of the Law Governing Lawyers §213, Comment d (Tentative Draft No.4, 1991). 6Note that there may be a dispute as to whether the complaining party was a former client. Trinity Ambulance ServoV. G. & L. Ambulance Servs., 578 F. Supp. 1280 (D. Conn. 1984) (close relationship with coplaintiff and joint strategy sessions close enough).

112


§3.6.1

were forced to fashion formulae from Canon 4 (governing confidentiality), Canon 5 (prohibiting division of loyalty), and Canon 9 (condemning even the appearance of impropriety). The Model Rules, in turn, picked up and restated this common law in Model Rule 1.9: (a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation. (b)A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client (1)whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules l.6 and 1.9(c)that is material to the matter; unless the former client consents after consultation. (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1)use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client; or when the information has become generally known; or (2) reveal information relating to the representation except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client. Section (a) of Model Rule 1.9 summarizes adverse subsequent representation

case law prohibiting

where there is a "substantial relation-

ship" between the matter involved in the prior representation

of the

former client and the matter involved in the adverse subsequent representation.? This is the starting point for answering questions one through four

"The leading case is T. C. Theater Corp. v. Warner Brothers Pictures, Inc., 113 F Supp. 265 (S.D.N.Y 1953). More recent statements of the rule can be found in Analytical, Inc. v. NPD Research, Inc., 708 F2d 1263 (7th Cir. 1983); Duncan V. Merrill Lynch, Pierce, Fenner, and Smith Inc., 646 F2d 1020 (5th Cir. 1981); and NCK Organization V. Bregman, 542 F2d 128 (2d Cir. 1976). C[ Telectronics Proprietary Ltd. v. Medtronic, Inc., 836 F2d 1332, 1336-1338 (Fed. Cir. 1988) (there is no duty of loyalty to the assignee of a former client; attorneys represent clients, not legal positions; no disqualification where former client waived conflict).

113

§3.6.1

Conflicts

of Interest

above. Section (b) applies to situations in which a lawyer has changed firms and finds a former client on the opposite side of the "v." Section (c) of the rule then reminds us that adverse use or revelation of a former client's protected information is also prohibited, whether the matters are related or unrelated. This rule protects clients for all time from the adverse use or disclosure of their confidences and secrets (or in the language of the Model Rules, "information relating to the representation"). 8 The principal focus of the following section is the substantial relationship test. Vicarious or imputed disqualification is addressed in §3.8.

§3.6.2

Substantial Relationship

As the preceding discussion points out, the courts prohibit adverse subsequent representation where there is a "substantial relationship" between the matters involved in the prior representation of the former client and the adverse subsequent representation. Indeed, judges used this terminology uniformly during the 30 years or so preceding the advent of the Model Rules.' Furthermore, the courts have been in agreement that once the party moving for disqualification of counsel meets its burden of establishing this substantial relationship, the moving party is entitled to

8See DR 4-IOI(B)(I)-(3); Model Rule 1.6, Comment [21] ("the duty of confidentiality continues after the client-lawyer relationship has terminated"). §3.6.2 'Note: Attorney Disqualification for a Conflict of Interest in Federal Civil Litigation: A Confusing Body of Law in Need of Organization, 30 Vill. L. Rev. 463, 479 (1985). E.g., In re Boone, 83 F. 944, 952-953 (N.D. Cal. 1897) ("The test of inconsistency is not whether the attorney has ever appeared for the party against whom he now proposes to appear, but it is whether his accepting the new retainer will require him, in forwarding the interests of his new client, to do anything which will injuriously affect his former client in any matter in which he formerly represented him, and also whether he will be called upon in his new relation to use against his former client any knowledge or information acquired through their former connection."). See also G. Warvelle, Essays in Legal Ethics 169-170 (1902): [The lawyer] may not, after the relation has ceased, seek or accept employment in opposition to his former client for the purpose of using against him information confidentially gained while the relation subsisted .... For such a willful disregard of professional obligations it would be the duty of a court to disbar the offender .... The Standard is also adopted in the Restatement of the Law Governing Lawyers §213, Comment d (Tentative Draft No.4, 1991).

114

Conflicts

of Interest

§3.6.2

the benefit of a "presumption of disclosed confidences"-that is, a presumption that the former client disclosed relevant protected information to the challenged attorney during the course of the earlier representation.? AsJudge Weinfeld declared in the leading case of T. C. Theater Corp. v. Warner Brothers Pictures) Inc.:3 The court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. It will not inquire into their nature and extent .... To compel the client to show ... the actual confidential matters previously entrusted to the attorney and their possible value to the present client would tear aside the protective cloak drawn about the lawyer-client relationship. For the Court to probe further and sift the confidences in fact revealed would require the disclosure of the very matters intended to be protected by the rule."

Pursuant to this now conventional analysis, proof of a substantial relationship serves as a substitute for proof of actual knowledge of protected information. Whether this initial presumption is rebuttable or irrebuttable is unsettled," but the trend favors a rebuttable presumption. 6 Despite this agreement about the utility of the substantial relationship test and its incorporation into the Model Rules, there does not appear to be any consensus of what is needed to establish a substantial relationship. For its part, Model Rule 1.9 states that what is being compared is the "matter" involved in each representation. Unfortunately, the interpretive comment provides little useful gloss; the comment

2But see Graham v. Wyeth Lab., 906 F.2d 1419, 1424 (10th Cir. 1990) ("While the facts do present some circumstantial evidence from which actual knowledge could be inferred, inferences of fact should be made in the first instance by the fact-finder after the benefit of a full hearing in which the presence or absence of actual knowledge is in controversy. "). 3113 F. Supp. 265 (S.D.N.Y 1953). 4Id. at 268-269. 5See cases collected at Note, supra note I, at 480-496. The author of the Note argues that the presumption should be irrebuttable. 60'Dea, The Lawyer-Client Relationship Reconsidered: Methods for Avoiding Conflicts of Interest, Malpractice Liability, and Disqualification, 48 Geo. Wash. L. Rev. 693, 706 (1980).

115

§3.6.2


simply states that the scope of a matter will depend on the facts of a particular situation or transaction. 7 Perhaps the most effective method of identifying a substantial relationship is suggested in the opinions of the Seventh Circuit, which employ a three-step inquiry: (1) a reconstruction of the earlier representation, (2) a reasonable assumption that the lawyer obtained information about all facts within the scope of that representation (or a determination "whether it is reasonable to infer that the confidential information allegedly given would have been given to a lawyer representing a client in those matters"), and (3) a determination whether such information would be useful to the opponent in the latter representation. 8 However, even if the appellate courts agreed on this approach, there would be instances in which judges might disagree about the significance of certain information derived from an attorney-client relationship. For example, when do insights regarding a client's past transactions or methods of doing business amount to disqualifying inforrnationi'? In any event, the fact-sensitive nature of the "substantial relationship" test suggests that in fairness to the present client the attorney should resolve doubts against the propriety of representation.t? The present client (or the party seeking the lawyer's representation) should be 7Model Rule 1.9, Comment [2]. Some federal circuits define matters and issues more narrowly than others. Compare Government of India v. Cook Indus., 569 F.2d 737 (2d Cir. 1978) (narrow identity of issues test) with Anchor Packing v. Pro-Seal, 688 F. Supp. 1215 (E.D. Mich. 1988). A somewhat futile survey of the linguistic formulae employed by the federal appellate courts was made in Industrial Parts Distributing, Inc. v. Fram Corp., 504 F. Supp. 1194 (D. Kan. 1981). BSee,e.g., LaSalle Nat!. Bank v. County of Lake, 703 F.2d 252 (7th Cir. 1983); Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982); Novo Terapeutisk Laboratorium v. Baxter Travenol Lab., Inc., 607 F.2d 186 (7th Cir.1979); Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221 (7th Cir. 1978). Support for this mode of analysis can be found in Note, supra note 1, and in Wolfram, supra §3.5.2 note 3, at 370. 9Unified Sewerage Agency v.Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981); Chugach Elee. Assn. v. United States Dist. Ct., 370 F.2d 441 (9th Cir. 1966); Contant v. Kawasaki Motors Corp. USA, 826 F. Supp. 427 (M.D. Fla. 1993). For a case suggesting that disqualification is not appropriate if the former client had never entertained any expectation that certain information would be kept confidential, see Christensen v. United States Dist. Ct., 844 F.2d 694 (9th Cir. 1988). IOC£Michigan Op. CI-770 (1982) and Maryland Op. 85-46 (1985), both of which deal with the difficulty of representing a divorcing spouse when the other spouse is the owner of a closely held corporation previously represented by the lawyer or a member of his firm.

116


§3.6.3

advised of the risks of disqualification, delay, and expense so that she might intelligently consider the advisability of the representation. §3.6.3

The Rejected Case

Counsel's duty to maintain confidentiality extends to "one who has employed or sought to employ him."! Accordingly, the conflicts rules relating to former clients extend to a person who merely consulted with a lawyer.?In other words, a lawyer who received confidential information in a preliminary interview that did not result in employment may be precluded from representing another client adverse to the interviewee in a substantially related matter or in any matter in which the information could be used against the interviewee. 3 The application of this rule can lead to harsh results in particular cases. Some commentators opine that the rule has served as a vehicle for manufacturing conflicts: Two different practitioners in different cities reported to me how sophisticated clients had shrewdly manipulated conflict of interest rules. In both cities the pattern was the same. Every major firm in town was approached by a client seeking representation; the client told his troubles to each firm and then decided to hire one of the firms. Because of the

§3.6.3 IEC 4-1. See also Restatement of the Law Governing Lawyers §112 (Tentative Draft No.3, 1990). 2Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1319 (7th Cir.), cert. denied, 439 U.S. 955 (1978). See also Restatement of the Law Governing Lawyers §213, Comment g(i) (Tentative Draft No.4, 1991); Sharswood, supra §3.1 note 2, at 8586 n.2. 3Bridge Prods., Inc. v. Quantum Chern. Corp., No. 88-C-10734, 1990 WL 70857 (N.D. Ill. 1990) (law firm barred from representing defendant when prospective plaintiff had initial interview revealing confidential information; since the firm failed in its duty to inform client that the interview was only preliminary, an implicit attorney-client relationship was formed, protecting the information and disqualifying the firm from later representing the adverse party). But see B. F. Goodrich v. Formosa Plastics Corp., 638 F. Supp. 1050 (S.D. Tex. 1986) (no disqualification when potential client interviewed four other firms). The passage of time since the alleged interview may mitigate against disqualification. Derrickson v. Derrickson, 541 A.2d 149 (D.C. App. 1988) (collecting divorce cases dealing with the interviewee disqualification issue). See also Restatement of the Law Governing Lawyers §213, Comment g(i) (Tentative Draft No.4, 1991) (there must be a "significant risk that ... confidential information might be used" before dis-

qualification is in order).

117

§3.6.3


duty of confidentiality owed to the prospective client, every firm interviewed but not hired was barred from opposing the prospective client. The client had effectively harmed his opponent's case by eliminating those lawyers most likely to be effective adversaries."

Trial judges should ask whether a preliminary consultation was undertaken in a good faith effort to secure legal counsel, as opposed to an effort to preempt available trial counsel in a given geographic area.> Professor Wolfram has posed a related question: What happens if a lawyer is already representing a present client and proceeds to interview a potential client only to learn that the interviewee has interests adverse to the present client? May the interviewee then disqualify the lawyer from representing the lawyer's present client? Professor Wolfram suggests that as long as the consultation "does not extend for too long" (is cut off when the conflict is spotted), and the lawyer is acting in "good faith," the interviewee should not be able to unhorse the lawyer in this

fashion."

"Lindgren, Toward a New Standard of Attorney Disqualification, 1982 Am. B. Found. Res. J. 421, 434-435. See also Goldberg, The Former Client's Disqualification Gambit: A Bad Move in Pursuit of an Ethical Anomaly, 71 Minn. L. Rev. 226 (1987). 5See G. Hazard,Jr., and W. Hodes, The Law of Lawyering § 1.9:III (2d ed. 1990) (illustrative case). See also McCourt Co. v. FPC Properties, 386 Mass. 145, 434 N.E.2d 1234 (1982) (suggesting that an exception might be made to the per se rule against representation adverse to a present client if it could be shown that the present client had spread its work among a number of local lawyers and firms in order to make their services unavailable to others, citing Mass. Op. 75-7 (1975)). The tactic of "telephon[ing] or interview[ing] numerous lawyers as a means of denying [the] spouse access to effective representation" is condemned in the comments to American Academy of Matrimonial Lawyers Standard 3.5 (1991). "Beauty contest" cases, in which prospective clients interviewed competing firms, include Poly Software International, Inc. v. Yu Su, 880 F Supp. 1487 (D. Utah 1995); Zimmerman v. Zimmerman, 16 Cal. App. 4th 556,20 Cal. Rptr. 123 (1993); and Bays v. Theran, 418 Mass. 685, 639 N.E.2d 720 (1994). 6Wolfram, supra §3.5.2 note 3, at 327. C£ Flatt v. Superior Ct. (Daniel), 9 Cal. App. 4th 275, 885 P.2d 950, 36 Cal. Rptr. 2d 537 (1994). In this interesting case, a prospect wanted to sue a law firm for failure to inform him of the statute of limitations. After the initial interview, the firm discovered that it already represented the target defendant in an unrelated matter. The firm declined the representation and did not tell the prospect anything about the statute of limitations or the advisability of seeking other counsel. The court ruled that the firm's conduct was proper in light of its duty to the pre-existing client. However, the court warned the bar that "in the absence of such an irreducible conflict and mandatory duty to [a present client], an attorney's duty to advise a new or even a 'prospective' client, once the nonengagement decision has been taken, may well be more intensive." See the discussion of obligation to rejected clients in Chapter 1.

118


§3.6.4

The ABA opinion on point suggests that attorneys interviewing prospective clients should obtain only the information necessary to do a conflicts check and, if possible, secure a waiver of confidentiality. 7 Courts should be reluctant to disqualify attorneys on the basis of an initial interview unless there is both demonstrable good faith on the client's part and a serious risk of misuse of confidential information. 8 §3. 6. 1: Unrelated Matters No rule in the Code or Model Rules prohibits subsequent adverse representation in an unrelated matter. Absent some substantial relationship between the new matter and the representation of the former client, the former client's consent is unnecessary.' This is not an academic point because clients, like lovers, all too frequently assume that once is forever. Nevertheless, in some situations lacking a substantial relationship, the attorney must be concerned with protecting the former client's confidential information. The most obvious example is the criminal case in which the defense attorney confronts a hostile witness who happens to be a former client. In such a situation, the lawyer might be placed in the awkward position of having to impeach that witness on the basis of information learned in the course of a lawyer-client relationship. 2 Without consent, impeaching a former client with confidential information i ABA Formal Op. 90-358 (1990). "For excellent discussions, see Poly Software Intl., Inc., v. Yu Su, 880 F Supp. 1487 (D. Utah 1995); Perschbacher and Perschbacher, Enter at Your Own Risk: The Initial Consultation and Conflicts of Interest, 3 Geo.J. Legal Ethics 689 (1990). See also Restatement of the Law Governing Lawyers §213, Comment g(i) (Tentative Draft No.4, 1991); §1.5 of this text. For cases, see Hughes v. Paine, Webber, Jackson and Curtis, Inc., 565 F. Supp. 663 (N.D. Ill. 1983) (a case in which the lawyer consulted was disqualified, but the firm was not); First Am. Carriers, Inc. v. Kroger Co., 302 Ark. 86 787 S.W2d 669 (1990) (brief period in which firm "represented" two adversaries in the same matter requires that both clients be dropped, although no confidential information was obtained). §3.6.4 IT C. Theaters, Inc. v. Warner Bros., 216 F.2d 920 (2d Cir. 1954);Jessee v. Danforth, 169 Wis. 2d 229, 485 N.W2d 63 (1992) (law firm that incorporated physician group not disqualified in later case against two physicians in corporation). 2See, e.g., Thomas v. Municipal Ct. of the Antelope Valley Judicial Dist. of Cal., 878 F.2d 285 (9th Cir. 1989) (defense attorney's disqualification upheld in criminal case where husband was charged with assaulting his wife; attorney's earlier representation of wife in action to set aside the marriage constituted a conflict of interest as circumstances of prior marriage were involved in both).

119

§3.6.4

Conflicts

of Interest

would violate Model Rule 1.9(c)(1).3 The dilemma is that the lawyer cannot adequately represent the present client without conducting the impeachment. In Chapter 14, these issues are discussed in the context of criminal cases.

§3.6.5

The Dernise of the Appearance of Irnpropriety Standard

Earlier in this chapter, mention was made of the "Caesar's Wife" rule;' which appeared in its most widely cited form in ABA Formal Opinion 49:2 "An attorney should not only avoid impropriety but should avoid the appearance of impropriety." This phrasing was used in the introductory canon that precedes the DR 9 series of the 1969 Code, as well as in the heading preceding DR 9-101 (A) through (C). Notwithstanding the absence of any disciplinary rule prohibiting mere "appearances," practicing lawyers, ethics committees, and courts turned to this formulation as a rule of decision, especially in connection with former client conflicts cases." More recently, both academic commentators and appellate courts have become critical of the "rule." They point out that its application has led to "wrong" results" and has served as a "substitute for analysis,"> ultimately leading to unnecessary hardship and disruption. As Professor Wolfram notes in his comprehensive treatise, its use in disqualification proceedings often amounts to a "meaningless but costly, public relations ceremony."6 3Restatement of the Law Governing Lawyers §213, Comment f(ii) (Tentative Draft No.3, 1990). This comment is deleted in Tentative Draft Number 4 (Apr. 10, 1991). Cf ABA Formal Op. 92-367 (1992) (representation that will require cross-examination of another client will ordinarily present a disqualifying conflict in the absence of consent). §3.6.5 1§3.2. 2ABA Formal Op. 49 (1931). This opinion is cited in a footnote to EC 9-6 of the annotated ABA Model Code of Professional Responsibility (1981). 3See ABA Formal Op. 342 (1975) (which concedes that this is not a "test," or even an "element" of any DR, even DR 9-10 1(B), but is instead only a policy consideration supporting the existence of the specific and particularized DR). 4Professor Wolfram cites Renshaw v. Ravert, 460 F. Supp. 1089 (E.D. Pa. 1978), as an example. Wolfram, supra §3.5.2 note 3, at 319. sRealco Servs., Inc. v. Holt, 479 F. Supp. 867, 872 n.4 (E.D. Pa. 1979). 6Wolfram, supra §3.5.2 note 3, at 321. The Restatement of the Law Governing Lawyers §20 1, Comment c(iv) (Tentative Draft No.4, 1991), also rejects "appearance of impropriety" as a rule of decision in disqualification cases.

120


§3.6.5

For these reasons, the drafters of the Model Rules abandoned the "appearances" bromide. Nevertheless, more than one Model Rules Implementation Committee has encountered resistance due to the absence of the magic words," and the authors will not be surprised if the old standard reemerges, Lazarus-like," in close cases. Nevertheless, one would hope that courts and ethics committees will not rely on the appearance of impropriety standard. 9 Before relying on the appearances standard, the analyst should consider the following questions: 1. What impropriety is "apparent" in the particular scenario? If no specific violation of a disciplinary rule can be identified, then primary consideration should be given to the costs imposed on the persons affected by an appearances rationale. 10 2. If the analyst cannot identify a specific violation, what are we really concerned withi'!'

7 Zeal is another magic word. Its absence in the black letters of the Model Rules has caused considerable consternation. 8See, e.g., First Am. Carriers, Ine. v. Kroger Co., 302 Ark. 86, 787 S.W2d 669 (1990) (disqualification over vigorous dissent, the majority concluding that "Canon 9" should be read into the Rules); In re Advisory Opinion of the Ky. Bar Assn., 847 S.W2d 723 (Ky. 1993) (city attorney prohibited from representing criminal defendant because of "appearance of impropriety"). 9For a refreshing and entertaining critique of "appearance ethics," see Morgan, Essay-The Appearance of Propriety: Ethics Reform and the Blifil Paradoxes, 44 Stan. L. Rev. 593 (1992). lOCf.In re Corrugated Container Antitrust Litig., 659 F2d 1341, 1345 n.4 (5th Cir. 1981). "Speculations about the public's perception of the bar seem particularly suspect. Cox v. American Cast Iron Pipe Co., 847 F2d 725,731-732 (11th Cir. 1988), is an example of the misguided paternalism implicit in the "public perceptions" approach to conflicts. After finding that the former client had waived the conflict, the court moved to Canon 9, stating that

parties to litigation cannot waive violations of Canon 9. Rather in every case where a specifically identifiable appearance of impropriety exists the court must weigh the likelihood of public suspicion against social interests in obtaining counsel of one's choice. Balancing these interests, the court found (fortunately) that the present client's interest in retaining the lawyer outweighed the "tarnishment" of the judicial system and the legal

profession.

121

§3.7


§3.7

Duties Upon Discovery of a Conflict

§3.7.1

Disclosure

The preceding sections contain numerous references to the consentability of conflicts. Of course, meaningful consent must be preceded by disclosure. The Code contemplates "full disclosure of the possible effect of such representation on the exercise of [the lawyer's] independent professional judgment." I Similarly, the Model Rules speak in terms of "consultation,"? defined as "communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question."3 Both standards embody a rule of reason designed to ensure client understanding of the matter. While this rule of reason lacks a certain degree of definiteness, it is no more vague than the informed consent standard followed by other professionals (for example, physicians). If one searches for more definite guidelines, perhaps the best that can be done is borrow from Professor Wolfram, who has suggested that the content of an adequate disclosure should include (1) advice regarding the client's interests (including options or alternatives and including tactical considerations), (2) candid disclosure of the attorney's assessment of the likelihood of disabling conflict, and (3) the downside of a later withdrawal or disqualification." In addition, it is apparent that conflicts should be anticipated early on to give the client an adequate opportunity to digest the information conveyed and act on it. If the §3.7.1 lSee, e.g., DR 5-105. 2See, e.g., Model Rule 1.7(b). -Model Rules of Professional Conduct, Terminology. Cf Florida Ins. Guarantee Assocs., Inc. v. Carey Canada, Inc., 123 F.R.D. 356 (S.D. Fla. 1988) ("standing consent" must be "exceedingly explicit" given affirmative duty of consultation-a letter notifying a client representative of a conflict is not "consultation"). See also Restatement of the Law Governing Lawyers §202, Comment c (Tentative Draft No.4, 1991) ("[C] onsent ordinarily requires an affirmative response by each client. It is not enough for a lawyer to assume consent from a client's acquiescence. In some circumstances, however, a tribunal may be warranted in finding that an informed client's active participation in a representation after a lawyer's specific request for consent is as effective as explicit consent. "), Comment d ("Tribunals may be expected to scrutinize any client agreement with a lawyer to waive conflicts that may arise in the future, particularly in a future representation and particularly where the waiver is genera!."). For the guarded view of the ABA Committee, see ABA Formal Op. 93-372 (1993), discussed in §3.7.2. 4vVolfram, supra §3.5.2 note 3, at 345-356.

122


§3.7.2

lawyer is dilatory in spotting conflict, he may be unable to avoid harm to the client associated with a forced withdrawal. 5 Moreover, a railroaded consent can be attacked after the fact by the client, a court, or a disciplinary authority. Most authorities agree that consent may be withdrawn due to a change in circumstances'' or for no reason at all;' absent material detriment to the lawyer or a third person." Yet a withdrawal of consent for tactical reasons should not be suffered kindly by a court, and the Restatement suggests that a client may be estopped from withdrawing consent when such action would defeat the attorney's reasonable expectation of a fee from a third person.? The Restatement adds that when a new client seeks representation adverse to a firm's existing client in an unrelated matter (in which case the Restatement tolerates multiple representation with both clients' informed consent), then in fairness to the existing client the firm can require the new client to agree that the firm can continue representation of the existing client in the event that the new client later withdraws consent. 10

§3.7.2

Consentability

On occasion, judicial opinions surface that state that consent is no defense to a disciplinary charge or disqualification based on a conflict of interest. This would make no sense if taken literally, and a careful analysis of such opinions indicates that the courts have simply used a conclusory label, without disclosing the reasoning that led to the conclusion that the conflict was "nonconsentable" or "irreconcilable." Disciplinary authorities have the authority to decide that a conflict was "nonconsentable." Disciplinary Rule 5-105 contains the requirement that it be "obvious" that the lawyer can adequately represent the 5See §3.1O. 6Restatement of the Law Governing Lawyers §202, Comment d (Tentative Draft No.4, 1991). 7See, e.g., Ky. Op. E-207 (1979) (withdrawal of prior consent by former client (wife) resulting in disqualification of lawyer (from representing husband) in divorce case). 8See Restatement of the Law Governing Lawyers §202, Comment f (Tentative Draft No.4, 1991). On estoppel based on reliance on earlier consent, see ABA Informal Op. 1323 (1975). 9Restatement of the Law Governing Lawyers §202, Comment f (Tentative Draft No.4, 1991). IOId.

123

§3.7.2

Conflicts

of Interest

interests of each client, even if the clients have given consent after full disclosure. Similarly, Model Rule 1.7 speaks in objective, I not subjective, terms-the lawyer must "reasonably believe" that the representation of a client will not be "adversely affected." There are some cases in which no reasonable attorney would ask for consent. In those cases, asking for consent violates the lawyer codes. Although some have suggested that the change is insignificant, 2 the language of the Model Rules ("reasonably believes") suggests a more flexible, "attorney-favorable" standard on the consentability of conflicts than the Code requirement of "obviousness." Hopefully, this change in terminology and the demise of the "appearances" standard" will reduce unnecessary disqualifications. The ABA signed off on waivers of future conflicts with a double negative: "[I]t is not ordinarily impermissible to seek such a waiver," but to be effective the client must be fully informed (which may be difficult), and the attorney must reasonably believe that the waiver is in the client's best interest." Consent should not be viewed as a magic solvent, which will make all conflicts disappear. Counsel should resist the inclination to paper over conflicts. AsJohn Frank observed: [NJever be "counsel to the situation." A lawyer is constantly confronted with conflicts which he is frequently urged to somehow try to work out. I have never attempted this without wishing that I had not, and I have given up attempting it. Particularly when old clients are at odds, counsel may feel the most extreme pressure to solve their problems for them. It is a time-consuming, costly, unsuccessful mistake, which usually results in disaffecting both sides."

§3. 7.2 IAn objective standard is also adopted in Restatement of the Law Governing Lawyers §20 1, Comment c(iv). 2See, e.g., Wolfram, supra §3.5.2 note 3, at 341. ABA Informal Opinion 1495 (1982) suggests that the difference in language is not significant. Monroe Freedman argues that it should not be, and that for consent to be effective under either standard "the lawyer must reasonably believe that the client has fully understood the implications of the conflict and that the representation, as limited [compare Rule 1.2(c)], will not be adversely affected by the conflict in any way that has not been consented to by the client." M. Freedman, Understanding Lawyers' Ethics 190 (1990). 3See §3.6.5. 4ABA Formal Op. 93-372 (1993). 5Frank, The Legal Ethics of Louis D. Brandeis, 17 Stan. L. Rev. 683, 708 (1965).

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§3.7.3

Comment [4] to Rule l. 7 contains the following interesting gestion regarding the propriety of even asking for consent:

sug-

When a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances, the lawyer involved cannot properly ask for such agreement or provide representation on the basis of the client's consent. ... [MJoreover, there may be circumstances [involving more than one client] where it is impossible to make the disclosure necessary to obtain consent. Nevertheless, the Restatement of the Law Governing Lawyers indicates that consent often provides a workable solution, for example, in cases in which a present client is sued in a matter unrelated to the representations and in many cases involving coparties." In this context, the proposed Restatement reflects the law of lawyering-that a client who has knowingly consented to a conflict cannot recover from the conflicted lawyer. This does not necessarily mean, however, that the lawyer acted ethically in obtaining consent.

§3.7.3

Withdrawal

The mechanics of withdrawal are discussed in detail in Chapter 18. For now, it suffices to note that the lawyer must withdraw from representations that present disabling and prohibited conflicts of interests. Specifically, both DR 2-llO(B)(2) and Model Rule 1.16(a)(1) make withdrawal mandatory if continued representation of a client would result in a violation of a disciplinary rule. Similarly, withdrawal must be effected if consent to a conflict is withdrawn by the client. 1 By the same token, timely withdrawal may be the only means at the lawyer's disposal for avoiding potential exposure for malpractice arising from a conflict. 2 6§202 (Tentative Draft No.4, 1991). In some cases in which the clients are adversaries in the same litigation, the conflict is treated as nonconsentable. §202(2)(a) and Comment g(i). 7§209, Comment d(i) (coplaintiffs) and (d)(ii) (codefendants in civil cases) (Tentative Draft No.4, 1991). §3. 7.3 'Unless the client is estopped from withdrawing consent. See discussion in §3.7.1.

2See §3.1O.

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§3.7.3

In later chapters, withdrawal is discussed in the context of criminal defense and insurance defense practice. There the reader will learn that withdrawal is not only a "cure" for "conflicts," but also a means of "extricating a lawyer from a client's wrongdoing ... a separate remedy for client fraud that has already occurred.:"

§3.8

IInputed or Vicarious Conflicts

§3.8.1

General

The principle of imputed or vicarious disqualification generally requires that when a lawyer is prohibited from representing a particular client, all other lawyers with whom the lawyer is associated or affiliated (in a firm, for example) will also be prohibited from representing the client. This principle is firmly embedded in the Code. Disciplinary Rule 5-l05(D) provides that "if a lawyer is required to decline employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliatedwith him or his firm, may accept or continue such employment." In many instances, application of the principle of imputed disqualification isjustified to effect the principle of undivided loyalty.For example, if a lawyer cannot undertake a client's representation because that client's position is adverse to that of another of the lawyer's present clients, the lawyer may not solve the problem by passing the new client to another member of the lawyer's firm. Similarly, when one lawyer in a firm is prohibited from undertaking representation adverse to a present or former client because such representation might involve the unconsented adverse use of that client's protected information, the courts have applied a presumption that members of the same firm share or have access to client information. They therefore impute the knowledge of that lawyer to all other members of the lawyer's firm. This presumption is well grounded in fact, since members of a firm commonly call on 3Martyn, The Ethic of Modern Legal Ethics, 1 Geo.J. Legal Ethics 267, 282 (1987) (reviewing C. Wolfram, Modern Legal Ethics (1986)) (discussing the comments to Model Rule 1.6, which authorize "red-flagging upon withdrawal" together with the "withdraw[al] or disaffirm[ance] [of] any opinion, document or affirmation or the like"). See also Gillers, Ethics That Bite: Lawyers' Liability to Third Parties, 13 Litigation No.2, at 8 (1987).

126


§3.8.2

each other for assistance! and share their thoughts in conversations or memoranda." Client files are ordinarily accessible to all members of a firrn.f Unfortunately, the letter of DR 5-105 is unnecessarily broad. First, it is triggered by a lawyer's conflict under any disciplinary rule, whether or not imputed disqualification is necessary to protect the client's expectation of loyalty and confidentiality" In addition, there are instances in which exceptions are justified. The following sections explain why courts have recognized certain exceptions to the principle of imputed disqualification and why those exceptions were adopted and clarified in Model Rule 1.10. §3.8.2

Law Firms and Affiliates

Under the Code of Professional Responsibility, a lawyer's disqualification may be imputed to the lawyer's partners or associates, as well as other "affiliated lawyers."! However, lawyers have generally proceeded under the assumption that imputation of conflicts occurs only within a law firm. Unfortunately, this may be a dangerous assumption in today's world. Firms are becoming larger, through natural growth or merger. Moreover, lawyers are employing new types of relationships through which to market their services. Today it is not uncommon to encounter double-hatted partners'' (members of more than one firm), extensive use of the "Of Counsel" designation, law firms serving as consultants to other firms, lawyer "temporaries" providing services to multiple firms and clients," and office-sharing variations. More often than not, lawyers §3.8.1 'Arkansas v. Dean Foods Prods., 605 F.2d 380 (8th Cir. 1979). 2Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982). 3Id. at 717. 'See Chapter 4 (dealing with the attorney-witness rule). §3.8.2 IDR 5-105(D). 2Double-hatted partnerships are addressed in ABA Informal Opinion 83-1499 (1983). But see Ohio Op. 89-35 (1989) (lawyer may not practice simultaneously in more than one firm). 3In ABA Formal Opinion 88-356 (1988), the Committee opined that temporary lawyers must comply with Model Rules 1.7 and 1.9, but also suggested that temporary lawyers mayor may not be "associated" with a firm for purposes of imputed disqualification. It depends on "all the facts and circumstances." For an appellate opinion setting aside a state bar ethics opinion and allowing the operation of a temporary lawyer service, see Oliver v. Board of Governors, Ky. Bar Assn., 779 S.W2d 2 I 2 (Ky. 1989).

127

§3.8.2


have not fully considered the application of imputed disqualification to such arrangements. Before discussing the problems of imputed disqualification associated with growth through the acquisition of laterals or merger, some attention should be paid to these nontraditional forms of association. The problem presented by the double-hatted partner does not require extended discussion, since the double-hatted partner will be treated as a partner of each firm for purposes of imputed disqualification. The much-cited opinion of Cinema 5) Ltd. v. Cinerama) Inc:" is a case in point. In that case, P was a partner in a New York firm and also a partner in a Buffalo firm. The New York firm sued Cinerama in one case at the same time the Buffalo firm was defending Cinerama in a similar matter. After rejecting the proposition that no conflict existed in the absence of a "substantial relationship" between the two cases (because the conflict involved two present clients), the court disqualified P and his New York partners from the representation adverse to Cinerama. The court did so even though Cinerama did not claim that it was injured by the conflict. Use of the "Of Counsel" relationship has also produced misunderstandings. The designation is not one that is either formal or honorary. Nor may it be used as a cover for a mere "forwarder-receiver" of legal business. Its proper use assumes a close, personal, continuing or semipermanent relationship involving "regular and frequent, if not daily, contact with the office" of the law firm. 5 Consequently, an "Of Counsel" lawyer is "affiliated" for purposes of imputed disqualification.f Similarly, 4528 F.2d 1384 (2d Cir. 1976). SABA Formal Opinion 90-357 (1990), superseding ABA Formal Opinion 330 (1974), has modified the definition and in some respects expanded the availability of the "Of Counsel" designation and eliminated the suggestion that it requires "daily" contact. The test is "continuing and frequent professional contact." See also ABA Informal Op. 1315 (1975). 6ABA Formal Op. 84-351 (1984). Accord ABA Formal Op. 90-357 (1990). But see Gray v. Memorial Medical Center, 855 F. Supp. 377 (S.D. Ga. 1994), where a firm had previously represented the client in a substantially related matter; the question was whether a lawyer who was Of Counsel to the firm was vicariously disqualified from representing a party adverse to the former client. The court held not-the nature of the Of Counsel relationship precluded a presumption of shared confidences on matters unrelated to the relationship. For a discussion of potential problems, see Mallen and Conrad, Legal Profession: Poorly Defined "Of Counsel" Affiliations Expose Law Firms to Vicarious Liabilities in the Form of Malpractice Claims, Disqualifications and Disciplinary Proceedings, Nat!. LJ.,July 17, 1995, at B4.

128


§3.8.2

while the ABA now permits one law firm to designate another law firm as "affiliated" or "associated," the firms must recognize that they are associated or affiliated for purposes of conflicts of interest rules. 7 Office-sharing arrangements present a more difficult problem. A handful of jurisdictions have suggested that office-sharers should be treated as partners or associates for purposes of imputed disqualification.f However, the Model Rules take the position that the critical factor should be whether the office-sharers (1) have "mutual access to confidential information concerning the clients they serve," (2) "present themselves to the public in a way suggesting that they are a firm," or (3) "conduct themselves as a firm."? Comment [1] to Model Rule 1.10 states that "a group of lawyers could be regarded as a firm for purposes of the rule that the same lawyer should not represent opposing parties in litigation, while it might not be so regarded for purposes of the rule that information acquired by one lawyer is attributable to another." 10 Accordingly, the application of conflicts rules to office-sharers will be fact-sensitive, focusing on access to confidential information, as well as the adequacy of disclosure and consent (discussed in §3.7).11

'ABA Formal Op. 84-351 (1984). ABA Formal Opinion 90-357 (1990) now permits one firm to be "Of Counsel" to another firm, but notes that such a designation would "entail complete reciprocal attribution of the disqualifications of all lawyers in each firm." In Mustang Enterprises v. Plug-in Storage Systems, 874 F. Supp. 881 (N.D. Ill. 1995), the court followed the ABA position and disqualified a firm that held itself out to be affiliated with a conflicted firm. The letterhead of each firm listed the other firm as "affiliated. " BWis. Op. E-86-2 (1980). 9Model Rule 1.10, Comment [1]. lOId.;cf In re Custody of a Minor, 13 Mass. App. 290,432 N.E.2d 546, 554, on reh'g, 13 Mass. App. 1088, 436 N.E.2d 172, rev. denied, 386 Mass. 1105, 438 N.E.2d 75 (1982) (no imputed disqualification in the absence of access to files); In re Smith, 289 Or. 501, 614 P.2d 1136, 1139 (1980) (to the effect that office-sharers may not be able to represent adversaries in litigation). 1 1 ABA Informal Op. 1486 (1982) (applying Code). See also Restatement of the Law Governing Lawyers §203, Comment e (Tentative Draft No.4, 1991) ("The key inquiry is whether the physical organization and actual operation is such that the confidential client information of each lawyer is secure from the others."). Compare Shelton v. Shelton, 151 A.D.2d 659, 542 N.YS.2d 719 (1989) (no conflict) with United States v. Cheshire, 707 F. Supp. 235 (M.D. La. 1989) (office-sharers who called themselves an 'Association of Attorneys" treated as a firm). See also United States v. Kindle, 925 F.2d 272, 275 (8th Cir. 1991) ("The mere fact that both attorneys had the same address was not

enough to indicate a possible conflict.").

129

§3.8.3

§3.8.3


Entering or Leaving a Firm

The General Rule Conflicts are often created when firms merge or a lawyer leaves one firm and enters another. Before a merger is finalized, the firms should compare present and former client lists. The impact of potential disqualifications may be severe enough to scuttle the merger. In fact, it has been held that serious premerger negotiations alone may be sufficient to trigger imputed disqualifications.I The difficulty of extracting a merged firm from conflicts is illustrated by the case of Harte Biltmore Ltd. v. First Pennsylvania Bank.? In that case, Firm I represented a bank in a lawsuit brought by customers who alleged that the bank overcharged them interest on loans made in connection with the remodeling of a hotel. While this litigation was proceeding, a troupe of lawyers in Firm I, including those representing the bank, left Firm I to join with lawyers from Firm 2, creating Firm 3. Unfortunately, one of the plaintiffs in the bank litigation, Harte, was already represented in an unrelated lawsuit by one of the lawyers that joined with the Firm I lawyers to create Firm 3. In other words, the "merged" Firm 3 found itself simultaneously representing and opposing Harte in unrelated cases. Harte moved to disqualify the "merged" Firm 3 in the suit in which he was a defendant. The firm responded by trying to dump Harte-in the argot of the litigator, the firm "fired" one of its clients (Harte) in order to eliminate the conflict. The trial court ruled that the firm could not "convert a present client into a former client [and invoke the more favorable "substantial relationship" test] by choosing when to cease to represent the disfavored client.:" Accordingly,the merger cost Firm 3 two clients. §3.8.3 'Pantry Pride, Inc. v. Finley, Kumble, Wagner, Heine, Underberg and Casey, 697 F.2d 524 (3d Cir. 1982). 2655 F. Supp. 419 (S.D. Fla. 1987). 3Id. at 421. See also PickerIntl., Inc. v. Varian Assocs., Inc., 869 F.2d 578 (Fed. Cir. 1989); ABA Annotated Canons 52 (1926) ("two members of a partnership on opposite sides of the same litigation-when discovered by the partners, they are both disqualified from acting thereafter for either party"). Some courts have been more lenient when the firm was not at fault. See, e.g, Gould v. Mitsui Mining and Smelting Co., 738 F. Supp. 1121 (N.D. Ohio 1990) (firm allowed to drop one client). See also Tipton v. Canadian Imperial Bank of Commerce, 872 F.2d 1491 (11th Cir. 1989) (poor analysis that overlooked loyalty and focused entirely on confidentiality).

130


§3.8.3

It is a fact of modern legal life that partners and associates change firms. An entering lawyer may bring clients to the lawyer's new firm, resulting in conflicts similar to those encountered in Harte. Moving, and taking clients along, can invite charges of "theft of clients" or claims that the new firm is a "raider,"! Either the moving lawyer (the "lateral") or some other attorney in the lawyer's new firm may end up representing interests adverse to the old firm's present or former clients. These clients might charge the lawyer and the new firm with misconduct under Model Rules 1.9(b)and l.lO(a), which read: 1.9(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client, (1) whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c)that is material to the matter; ... 1.lO(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when anyone of them practicing alone would be prohibited from doing so by Rules l.7, l.8(c), l.9 or 2.2.

If the lawyer actually worked on a particular client's case at the old firm and then undertook to represent that client's opponent in the same matter upon arriving at the new firm, she may justly be accused of

"Regarding the hiring of the former firm's associates, see ABA Informal Op. 1417 (1979). Regarding contacts with the clients of the former firm, compare ABA Informal Op. 1466 (1981) with Saltzberg v. Fishman, 123 Ill. App. 3d 447, 78 Ill. Dec. 782,462 N.E.2d 901 (1984) and Adler, Barish, Daniels, Levin and Creskoff v. Epstein, 482 Pa. 416,393 A.2d 1175 (1978), appeal dismissed, 442 U.S. 907, 99 S. Ct. 2817,61 L. Ed. 2d 277 (1979). See also Ky. Op. E-317 (1987); New York City Op. 80-65 (1980). Practical advice on the mechanics of firm breakups (Who can contact the firm's clients? What happens to the files?) is provided in R. Hillman, Lawyer Mobility (1994), and R. Hillman, Law Firm Breakups (1990) (the definitive books on the subject). See also Kettlewell, Breaking Up Is Hard to Do, 24 Trial 17 (Oct. 1988). Continued litigation over the "ownership" of clients still earns lawyers a reputation for greed. The breakup of a large firm is a corporate dissolution, with the partners and associates often fighting over the "corporate assets" -the clients. Lawyers compete for business and recognition with other firms and with the lawyers in their own firms. Medium-sized firms are dissolving and merging into larger firms because of the competitive pressures of law practice. Lerman, supra §3.4.4 note 2, at 674.

131

§3.8.3


switching sides. In addition, the partners and associates of the new firm may be disqualified from accepting clients or continuing to represent clients whose interests are adverse to the interests of the present or former clients of the lawyer's former firm. The disqualification would apply not just in the same matters, but also in all substantially related matters. Much of the debate raging over abuse of disqualification motions results from the application of overly broad standards of disqualification. At one time, imputed disqualification threatened to preclude litigants from having a reasonable choice of legal counsel and placed unreasonable barriers in the path of lawyers seeking to form new associations. Eventually, the case law of attorney disqualification recognized some reasonable exceptions to a strict rule of imputed disqualification. These exceptions were incorporated into the Model Rules. No Disqualification!f the Lawyer Neither Workedfor the Former Client nor Possesses Confidential Information about the Client One of the most widely cited cases limiting imputed disqualification is Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp.5 In that case, an attorney had been associated with a law firm that represented Chrysler Motors Corporation. During his stint at that firm, he had worked on certain Chrysler matters, although his involvement "was, at most, limited to brief, informal discussions on a procedural matter or research on a specificpoint of law."6When the lawyer later left the firm and sued Chrysler on behalf of an automotive dealer, Chrysler sought his disqualification. In these circumstances (and the scenario is a common one), it might be alleged that the relocated lawyer should be disqualified because he personally obtained information from the moving party while working on the same or a substantially related matter for that party while at the former firm. Alternatively, it might be argued that the presumption that associated lawyers share or have access to client information justifies the relocating lawyer's disqualification, since that lawyer should be deemed to possess the knowledge of the lawyers of his former firm who actually worked on the case. The argument that the individual lawyer should be deemed to have disqualifying information 5518 F.2d 751 (2d Cir. 1975). 6Id. at 756.

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§3.8.3

(resulting in that lawyer's imputed disqualification) then might be carried one step further. It might be argued that the relocating lawyer's imputed disqualification should be passed on to all members of the new firm (double imputation). Clearly, the wholesale acceptance of such an approach would frustrate any reasonable degree of lawyer mobility, for "law firms would be understandably reluctant to hire a young lawyer who had previously worked at a large firm if it were to mean full automatic disqualification from any case involving a party represented by the young lawyer's former firm." 7 Why should such burdens be imposed if the moving attorney can establish that he never possessed protected information? In Silver Chrysler Plymouth, the Second Circuit achieved a balance among the legitimate expectations of the former client, the new client, and the associate. Taking account of the young lawyer's limited involvement in Chrysler's affairs, the court observed: [T]here is reason to differentiate for disqualification purposes between lawyers who become heavily involved in the facts of a particular matter and those who enter briefly on the periphery for a limited and specific purpose related solely to legal questions. In large firms at least, the former are normally the more seasoned lawyers and the latter the more junior. 8 Relying on this "peripheral exception," the court denied the motion to disqualify the lawyer. 9 Silver Chrysler Plymouth provides only a narrow, fact-sensitive exception permitting a moving attorney to personally undertake representation adverse to the former firm's client, based on a showing that the lawyer did not acquire actual knowledge of the former client's protected information and was only peripherally involved in the same or a substantially related matter. The court did not directly address the problem of "double imputation." That problem can be approached by returning to our basic hypothetical. 7Scholoetter v. Railoc of Indi., Inc., 546 F2d 706 (7th Cir. 1976). 8518 F2d at 756-757. 9C£ City of Cleveland v. Cleveland Elec. Illuminating Co., 440 F Supp. 193 (N.D. Ohio), off'd, 573 F2d 1310 (6th Cir. 1977) (adopting a "flexible approach" based on the notion that lawyers in different departments or sections of a large firm might not be subject to an irrebuttable presumption of sharing or access). See also Restatement of the Law Governing Lawyers §213, Comment h (Tentative Draft No.4, 1991).

133

§3.8.3


Assume that Attorney was in Firm 1 at the time of its representation of Client A. Thereafter, Attorney resigned and obtained employment with Firm 2. Firm 2 is representing Client B in the same or a substantially related matter in which the adverse party is Client A. Client A moves to disqualify Attorney, as well as all other attorneys in Firm 2. If Attorney can show that she did not participate in Client A's representation and obtained no actual knowledge of Client A's protected information," or if Attorney can show that any personal participation was so minimal as to justify the application of the "peripheral" exception, it is likely that neither Attorney nor the other attorneys in the new firm will be disqualified. In other words, the presumption of shared knowledge within the former firm sufficient to result in the Attorney's personal disqualification is, to that limited extent, rebuttable. II However, assume that Client A establishes that Attorney worked on Client A's affairs when a member of the former firm. Assume further that Attorney is unable to rebut the presumption that she possesses confidential information about Client A that might be used against Client A by the present firm. The court will disqualify Attorney, and might impute Attorney's disqualifying knowledge to the other attorneys in the new firm. 12 In other words, if the attorney who switches firms actually participated in the representation of a former client, who is now opposing a present client of the attorney's new firm, most courts employ an irrebuttable presumption that the moving attorney shared

IOThat particular applications are fact-sensitive can be shown by comparison of Chugach Electric Association v. United States District Court, 370 F.2d 441 (9th Cir. 1966), and United Sewerage Agency v.Jelco, Inc., 646 F.2d 1339 (9th Cir. 1981). "Schiessle V. Stephens, 717 F.2d 417 (7th Cir. 1983); Gas-A- Tron V. Union Oil Co., 534 F.2d 1322 (9th Cir. 1981); Silver Chrysler Plymouth V. Chrysler Motors Corp., 518 F.2d 751 (2d Cir. 1975). Accord Restatement of the Law Governing Lawyers §213, Comment h (Tentative Draft No.4, 1991). 12Arkansas V. Dean Food Prods., 605 F.2d 380 (8th Cir. 1979). Cf. SLC Ltd. v. Bradford Group West, 999 F.2d 464 (lOth Cir. 1993) (attorney who represented client in "substantially related matter" disqualified from handling a matter for new firm adverse to client, but firm not vicariously disqualified because no showing that attorney possessed confidential information relevant to the subject matter of the new litigation; order requiring screening set aside, although attorney was reminded to keep the confidences of the former client).

134

Conflicts

of Interest

§3.8.3

the disqualifying information with the attorneys in her new firm. 13 It is important to note, however, that courts do not approve "double impuration."!" In other words, the disqualification of the attorney's new firm must be preceded by proof of actual knowledge on the part of the attorney who switched firms, although such actual knowledge may be established by an unrebutted presumption. To reiterate, Model Rules 1.9(b) and l.lO(a) prohibit all attorneys in a firm from subsequent adverse representation in cases in which an attorney joining the firm actually possesses an adverse party's protected information. Nevertheless, some reported opinions suggest that the attorney's new firm should be given the opportunity to rebut any presumption that the new attorney actually shared such information with the attorneys in the new firm. IS No Imputed Disqualification If the Individual Lawyer's Corflict Is Based Solely on Loyalty to the Former Client A lawyer's duty to a former client is usually based on both a duty of confidentiality and a duty of loyalty. The duty of loyalty requires a lawyer to abstain from taking a position adverse to the former client in a substantially related matter, even if no corfidential information could be revealed thereby.16 For instance, the lawyer might have written an appellate brief for the former client, relying totally on the appellate record. In such a case, the lawyer would be able to rebut the presumption of shared confidences. Nevertheless, the lawyer could not properly represent a new client against the former client in the same or a substantially related matter. There is no imputed conflict, however, because the members of the new firm owe no duty of loyalty to a person who was never a client of the firm. 17 13This is the majority and Model Rule position. See ABA, Legal Background to the ABA Model Rules of Professional Conduct 139 (1983) (citing Hull v. Celanese Corp., 513 F.2d 568 (2d Cir. 1975), among other cases). 14ABA,Legal Background to the ABA Model Rules of Professional Conduct 138 (1983) (citing Gas-A- Tron v. Union Oil Co., 534 F.2d 1322 (9th Cir. 1976)); Liebman, The Changing Law of Disqualification: The Role of Presumption and Policy, 73 Nw. U. L. Rev. 996, 1000 (1979). See discussion in Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564 (Fed. Cir. 1984). 15LaSalle Nat!. Bank v. County of Lake, 703 F.2d 252, 257 (7th Cir. 1983); Schiessle v. Stephens, 717 F.2d 417,421 (7th Cir. 1983). See discussion of screening in §3.8.4. 16Model Rule 1.9, Comment [11]. 17Id.

135

§3.8.3


Disqualification if the Former Firm Based on the Relocated Attorney's Representation if Firm Clients Thus far, attention has been focused on the disqualification of the relocated attorney and of the attorneys in her new firm. However, questions may also arise as to the propriety of the former firm's representation of interests adverse to clients represented by the relocated attorney while she was with the former firm. In the past, relocating attorneys have typically been junior members who left most of their clients behind with the old firm. However, law firm loyalty is not what it used to be. Large-scale defections of lawyers, taking firm clients with them, are now common. Unexpected complications follow. A leading case is Novo Terapeutisk Laboratorium v. Baxter Travenol Laboraunies.t" The relocating attorney took a client, Baxter Travenol, with him to his new firm. Novo Terapeutisk subsequently retained the lawyer's former firm to pursue an action against Baxter Travenol. Baxter Travenol then moved to disqualify the firm. The trial court denied the motion and was reversed by a panel of the Seventh Circuit. This decision was in turn reversed by the en bane Seventh Circuit, which ruled that any presumption of shared confidences had been rebutted by the attorneys in the former firm. The result reached in Novo Terapeutisk is consistent with the language of Model Rule 1.1O(b): (b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(c) that is material to the matter. 19

18607 F2d 186 (7th Cir. 1979) (en bane). 19But see Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F Supp. 1383 (N.D. Cal. 1992) (rejecting both Model Rule 1.l0(b) (at the time, Rule I.IO(c)) and Restatement §204).

136


§3.B.4

§3.8.4

Screening

Screening of Former Government Lawyers One technique for avoiding imputed or vicarious disqualification that has met with mixed reviews is screening or walling off The basic concept is that the entire firm need not be disqualified if it sets up internal procedures to prevent a "tainted lawyer" from participating in a matter. The Chinese Wall, as it is sometimes called, earned the ABA's favor in Formal Opinion 342, I which was intended to ameliorate the harsh effects of DR 9-l0l(B) on former government lawyers. That Code section provides that "a lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee."? Obviously, a wooden application of DR 9-lOl(B) could substantially hinder the mobility of government lawyers. If a former government lawyer were to carry her disqualification to her nongovernment employment and pass it on through the principle of imputed or vicarious disqualification, she would then likely be viewed as a "Typhoid Mary." Accordingly, to facilitate the government's hiring of qualified lawyers (by not burdening them unnecessarily when they leave government service), the ABA approved of screening in this limited context. The use of screening was picked up by the Model Rules in Rules 1.11 and 1.12, dealing with the former government lawyer and the former judge or arbitrator, respectively. These rules provide for a reprieve from the rigors of firm disqualification "if the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom; and written notice is promptly given to the appropriate [agency or tribunal] to enable it to ascertain compliance .... " Importantly, however, the Model Rules do not extend the screening concept to lawyers moving from one private firm to another." §3.8.4 lABA Formal Op. 342 (1975). See also Restatement of the Law Governing Lawyers §214 (Tentative Draft No.4, 1991). 2Personal and substantial participation means "hands-on involvement" and not mere imputation based on title of office or statutory authority. Spears v. Fourth Ct. of App., 797 S.W2d 654 (Tex. 1990). See also N.Y Op. 502 (1979) (former assistant district attorney not disqualified from representing defendant merely because defendant was indicted at a time when the lawyer worked in the district attorney's office). 3See Model Rule 1.10, Comment [5].

137

§3.8.4


Screening in the Private Sector In the 1980 case of Armstrong v. McAlpin,4 the Second Circuit flirted with the concept of screening in the case of lawyers moving between private firms. Although decided on narrow grounds, the case has proved a harbinger of academic and judicial interest in screening. 5 In ruling on disqualification motions, judges are not bound by the ethical codes. Even though the ethical codes say a "tainted" lawyer conflicts an entire firm, a judge can refuse to disqualify the firm if there is no substantial risk that the tainted lawyer will pass on confidential information about the former client to the lawyers working on the case. Courts that have refused to disqualify-and there is a modest trend in this direction-have looked to the presence of institutional safeguards to protect the confidences of the former client of the tainted lawyer. In Cromley v. Lockport Board if Education= for example, the court listed the following factors to be applied in cases of private-sector screening: 1. giving instructions to all members of the new firm not to talk with the conflicted attorney about that lawyer's former client, 2. prohibiting access to the files and other information on the case, 3. locking case files,with keys distributed to a select few, 4. making secret codes necessary to access pertinent information on computer databases, and 5. prohibiting sharing in the fees derived from the litigation. 7 The court mentioned other factors, such as the size of the new firm and the likelihood of contact between the screened attorney and attorneys working on the case. In addition, the court said that the attorneys in 4625 F.2d 433 (2d Cir. 1980), vacated, 449 U.S. 1106, 101 S. Ct. 911, 66 L. Ed. 2d 835 (1981) (order denying motion to disqualify not appealable). 'Brodeur, Building Chinese Walls: Current Implementation and a Proposal for Reforming Law Firm Disqualification, 7 Rev. Litig. 167 (1988); Martin, Visions of the Eternal Law Firm: The Future of Law Firm Screens, 45 S.C. L. Rev. 937 (1994) (approving screens so impenetrable as to merit being called "fire walls"); Moser, Chinese Walls: A Means of Avoiding Law Firm Disqualification When a Personally Disqualified Lawyer Joins the Firm, 3 Geo. J. Legal Ethics 399 (1990); O'Dea, supra §3.6.2 note 6, at 710718. C£ Morgan, Screening the Disqualified Lawyer: The Wrong Solution to the Wrong Problem, 10 U. Ark. Little Rock LJ. 37 (1987-1988); Steinberg and Sharp, Attorney Conflicts of Interest: The Need for a Coherent Framework, 66 Notre Dame L. Rev. 1 (1990). 617 F.3d 1059 (7th Cir. 1994). 7Id. at 1065.

138

Conflicts

of Interest

§3.8.4

question must affirm the existence of the screening mechanisms under oath." The Restatement of the Law Governing Lawyers? would permit private-sector screening if sufficient to protect confidential client information. Comment d(ii) to §204(d) suggests that in a litigated matter the tribunal should require affidavits, signed by the primarily prohibited [personally disqualified lawyer] and by a lawyer principally responsible for maintaining and supervising the screening measures and describing the screening procedures in detail, be made a part of the record in the matter. A tribunal may require that other appropriate steps be taken. Violation of the procedures should be remediable on motion of any affected person.

While there is a modest trend favoring screening, at least in the federal courts;'? it remains to be seen whether such decisions will overcome judicial skepticism and the ABA position set forth in the Model Rules. II

BId. 9§204(d) and Comment d (Tentative Draft No.4, 1991). IOManning v. Waring, Cox,James, Sklar and Allen, 849 F.2d 222 (6th Cir. 1988); Smith v. Whatcott, 757 F.2d 1098 (10th Cir. 1985); LaSalle Natl. Bank v. County of Lake, 703 F.2d 252 (7th Cir. 1983); Greitzer and Locks v.Johns-Manville Corp., No. 81-1379 (E.D. Va. 1981), off'd per curiam, 710 F.2d 127 (4th Cir. 1982). In Cobb Publishing Inc. v. Hearst Corp., 891 F. Supp. 388 (E.D. Mich. 1995), the court applied Manning and held that the screening was inadequate because it was not implemented in a timely fashion. See also Carbo Ceramics, Ine. v. Norton-Alcoa Proppants, 155 F.R.D. 158 (N.D. Tex. 1994); Thomalen v, Marriott Corp., 845 F. Supp. 33 (D. Mass. 1994); In re Del-Val Fin. Corp. See. Litig., 158 FR.D. 270 (E.D.NY 1994), (judges involved refused to disqualify firms that screened the conflicted lawyers as soon as the firms were notified of the problem). In Atasi Corp. v. Seagate Technology, 847 F.2d 826, 831-832 (Fed. Cir. 1988), the court discussed (but did not approve) the "cone of silence" (from the old TV sitcom Get Smart?) as a screening mechanism. Less rigorous than the Chinese Wall, a cone of silence merely requires the attorney who is switching firms to promise not to share confidences of old clients with new associates. Mich. Op. R-4 (1989) (screening solution authorized in Michigan version of Model Rule 1.10). IICf Fund of Funds, Ltd. v. Arthur Anderson and Co., 567 F.2d 225 (2d Cir. 1977), and Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir. 1978), which present the more orthodox wisdom. See also Armstrong v. McAlpin, 625 F.2d 433, 445, vacated, 449 U.S. 1106, 101 S. Ct. 911,66 L. Ed. 2d 835 (198 I); Roberts v. Hutchins, 572 So. 2d 1231 (Ala. 1990) (no screening solution for plaintiff's firm that hired associate from opposing firm, with the knowledge that the associate had been working on same case for defendant); Towne Dev. of Chandler Inc. v. Arizona Super. Ct., 173 Ariz. 364, 842 P.2d 1377 (Ct. App. 1992); Henricksen v. Great Am. Say. and Loan, 11 Cal. App. 4th 109, 14 Cal. Rptr. 2d 184 (1992) (no amount of screening will prevent vicarious disqualification after firm hired lawyer who represented opposing party in same case);

139

§3.8.4


Screening if Nonlawyer Employees Screening is both acceptable and required with regard to nonlawyer employees changing jobs. A paralegal or secretary can pass on confidential information, and the former client is entitled to assurance that this will not occur. However, applying a rule of imputed disqualification would unnecessarily impede the mobility of law office personnel. Thus, the cases and opinions treat screening as necessary and sufficient.l? If screening is seen as the solution for nonlawyer employees, it is hard to see why it is not the solution for lawyers changing employment. §3.8.5

Local and Cocounsel

On many occasions, law firm enter into cocounsel arrangements. In addition, firms help other firms by performing ministerial duties such as filing documents and making office facilities available. Firms also act as local counsel for lawyers admitted pro hac vice. The definition of firm in Model Rule 1.10 does not include these temporary relationships, and courts generally recognize that these roles should not trigger the disqualification rules applied to firms. I Assume, however, that Firm A and Firm Bare cocounsel for a client, and that Firm A discovers that it has a conflict due to the prior representation of the opposing party in a substantially related matter. Firm B is conflicted if it receives confidential information about the former General Accident Ins. Co. v. 575 Fifth Ave. Assocs., 115 A.D.2d 1021,495 N.YS.2d 879 (1990) (screening rejected, and motion to reopen following discharge of tainted lawyer by his firm denied); Ky. Op. E-354 (1993) (screening discouraged); Neb. Op. 94-4 (1994) (screening rejected). 12The ABA has adopted a screening approach in lieu of imputed disqualification in cases involving changes of employment by nonlawyer employees. ABA Informal Op. 881526 (1988). Cases dealing with the screening of nonlawyers include Phoenix Founders, Inc. v. Marshall, 887 S.W2d 831 (Tex. 1994) (screening and no disqualification), and Grant v. Thirteenth Court of Appeals, 888 S.W2d 466 (Tex. 1994) (no attempt to screen conflicted secretary and disqualification ordered). See also ABA Formal Op. 88-356 (1988); Restatement of the Law Governing Lawyers §203, Comment f (Tentative Draft No.4, 1991). For cases in which a firm was disqualified after hiring an employee from opposing counsel's firm, see Kapco Mfg. Co. v. C & 0 Enter., 637 F. Supp. 1231 (N.D. Ill. 1985); Widger v. Owens-Corning Fiberglass Corp., 232 Cal. App. 3d 572,283 Cal. Rptr. 732 (1991). §3.8.5 ISee, e.g., Realco Servs., Inc. v. Holt, 479 F. Supp. 867, 878-880 (E.D. Pa. 1979); Ill. Op. 89-3 (1989). See also O'Dea, supra §3.6.2 note 6, at 738-739.

140

§3.8.6


client from Firm A. The burden should be on the party seeking disqualification to prove disclosure of confidential information to cocounsel. 2 There might be a rebuttable presumption of disclosure if the tainted lawyers in Firm A discussed trial strategy with members of Firm B.3 §3.8.6

Other Relationships

If close professional relationships can lead to disqualification, it is reasonable that close personal relationships between lawyers be treated similarly. To what extent should a lawyer be disqualified because her lawyer-spouse is disqualified? Married lawyers are obligated to maintain the secrets and confidences of their clients. We assume, though, that spouses share most confidences.' Furthermore, marriage ordinarily involves a pooling of personal and financial interests that could affect a lawyer's exercise of independent p.rofessionaljudgment on a client's behalf. The Code contains no disciplinary rule expressly requiring a lawyer to decline employment when a spouse or other close relative represents the opposing party in litigation. Neither is there any rule explicitly preventing a law firm from having a married partner or associate represent clients whose interests are opposed to those of other clients represented by another law firm with which the married lawyer's spouse is associated as a lawyer.? As the Georgia Supreme Court observed in Blumenfeld v. Borenstein= Basic fairness will not permit the disqualification of an attorney because of wrongdoing imputed to the attorney by reason of his status when in fact no wrongdoing exists .... [T]he right to counsel is an important interest which requires that any curtailment of the client's right to counsel of choice be approached

with great caution ....

Absent

a showing

that

"Fund of Funds, Ltd. v. Arthur Anderson and Co., 567 F.2d 225,236 (2d Cir. 1977). See Tasker and Casper, Vicarious Disqualification of Co-counsel Because of "Taint," I Geo. J. Legal Ethics 155 (1987). See also Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir. 1978). 3Baker v. Bridgestone/Firestone Inc., 893 F. Supp. 1349 (N.D. Ohio 1995); Tasker and Casper, supra note 2, at 189. §3.8.6 'See, e.g., Uniform R. Evid. 504(a) (privilege for marital communications). 2ABA Formal Op. 340 (1975). 3247 Ga. 406, 276 S.E.2d 607 (1981).

141

§3.8.6


special circumstances exist which prevent the adequate representation of the client, disqualification based on marital status alone is not justified. 4

The court rejected a per se rule disqualifying a married lawyer from representing a client solely on the ground that the lawyer's spouse is a member of a firm representing an opposing party. The court observed that such a rule "would not only be unfair to the lawyers so disqualified and to their clients but would also have a significant detrimental effect on the legal profession" by creating "a category of legal Typhoid Marys (or Typhoid Harrys) chilling both professional opportunities and personal choices."> In Blumenfeld, an attorney wife had worked on a probate case shortly before leaving her firm. Some time later her attorney husband's firm assumed the representation of an opposing party in the same case. Despite clear proof that neither lawyer had acted improperly in any regard, the trial court disqualified the husband's firm on the theory that nonlawyers might perceive some impropriety. After rejecting this notion, the appellate court deemed it unnecessary to address the question of whether disqualification of the husband could be imputed to the other members of his firm. Blumenfeld was, to some extent, the natural outgrowth of a flexible approach outlined in ABA Formal Opinion 340, a 1975 opinion construing the Code." The following question was posed: "Where both husband and wife are lawyers but they are not practicing in association with one another [rendering DR 5-105(D) inapplicable], may they or their firms represent differing interests?" While the ABA Committee steered clear of adopting any restrictive rule of thumb, it noted that married lawyers must take special pains to safeguard their clients' confidences and secrets. The opinion also counsels married lawyers to carefully consider instances in which their financial interests might implicate DR 5-101(A) (for example, when one spouse might receive a "276 S.E. 2d at 609. See also Gellman v. Hilal, 159 Misc. 2d 1085, 607 N.YS.2d 853 (Sup. Ct. 1994) (no disqualification of lawyer on a motion brought by eformer client of the lawyer's spouse). 5276 S.E. 2d at 609. See also Husband-Wife Conflicts, 78 A.B.A.]. 30 (May 1992), (discussing a Texas case in which a law firm successfully claimed it should not be subject to pro bono obligation to defend indigent clients because one of the firm's partners was married to the district attorney. This appears to be a case where a firm used the excuse of conflict to avoid an obligation. 6The ABA adopted the Model Rules in 1983.

142


§3.8.6

large contingent fee dependent on the outcome of a case). The Committee suggested that each lawyer, or the lawyers' firms, should "advise the client(s) of all circumstances that might cause one to question the undivided loyalty of the law firm and let the client make the decision as to its employment." Finally, the Committee concluded that personal disqualification of a married lawyer should be imputed to her firm. 7 Unfortunately, while diplomatic, ABA Opinion 340 is both too liberal and too strict. It is questionable whether, even with client consent, spouses should ever go head to head-as Spencer Tracy and Katherine Hepburn did in the 1949 movie classic Adam's Rib." The prospect of marriage partners sitting at opposite counsel tables is particularly troubling in criminal cases." However, the opinion may be too strict in its suggestions relating to client consultation and imputed disqualification. For example, if the marriage partners and their firms determine that there is no realistic threat to loyalty and confidentiality, is it wise to require that the matter always be presented to the client for veto? Similarly, does it necessarily follow that personal disqualification of one of the marriage partners should trigger imputed disqualification of her firm."? The Model Rules address the problem of lawyer spouses in a more straightforward fashion and also extend the "spousal conflicts" rules to other close relationships. To begin with, the Model Rules provide that related lawyers in the same firm are governed by Rules 1.7, 1.9, and 1.10.11 In other words, when the marriage partners or otherwise related lawyers practice in the same firm, their special relationship is irrelevant. Model Rule 1.8(i) then provides: A lawyer related to another lawyer as parent, child, sibling, or spouse shall not represent a client in a representation directly adverse to a person who the lawyer knows is represented by the other lawyer except upon consent by the client after consultation regarding the relationship. 7 ABA Formal Opinion 340 (1975) suggested that "whenever one spouse is disqualified under DR 5-10 I(A), the entire firm is disqualified under DR 5-1 05(D)." 8MGM 1949;Jones v.Jones, 258 Ga. 353, 369 S.E.2d 478 (1988) (spouses permitted to go head to head, over one client's objection). 9See, e.g., Colo. Op. 52 (1974) (dealing with head-to-head representation in both civil and criminal cases); Ky. Op. E-305 (1985) (problems when one spouse a prosecutor and one a defense counsel); NJ. Op. 288 (1974) (wife may not practice criminal defense law while husband assigned to criminal appellate section of attorney general's office). IOCf Model Rules 1.11 and 1.12, discussed in §3.8.4 (screening). IIModel Rule 1.8(i), Comment [5].

143

§3.8.6


This rule suggests that even head-to-head representation may be acceptable with client consent. Lawyers generally should not exercise this option. It is likely that a losing party would conclude that her lawyer had improperly shared confidences and strategies with the opponent's lawyer. Ethics committees should counsel against head-to-head representations. 12 Nevertheless, Model Rule 1.8(j) seems to be more realistic and workable than the flexible approach outlined in ABA Formal Opinion 340. Of particular interest is the fact that Model Rule 1.80) requires consultation and consent only when the lawyer spouses directly oppose one another.l'' In addition, the disqualification in Model Rule 1.8(i) is personal and not imputed to members of the firm. 14 Perhaps the rule should be read as requiring consent after disclosure when the closely related lawyers are actively representing adverse interests or when large sums of money are involved and the related lawyer's share of the firm's potential gain is large. When the lawyers stand to profit from the litigation, they should treat the matter as a conflict under Model Rule 1.7(b). That rule requires that the affected lawyers reasonably believe that the representation of their clients will not be materially limited and secure consent of the clients after consultation. 15 As a general proposition, married lawyer-spouses should disclose and obtain consent in any case in which the respective clients are reasonably entitled to know of the relationship. The same rule of reason should govern informal intimate relationships. In a California case, a lawyer was disqualified when his intimate relationship with a secretary of a partner in an opposing law firm was revealed." The American Academy of Matrimonial Lawyers warns that "an attorney should never have a sexual relationship with a client or

12Cal. Op. 1984-83 (head-to-head criminal representation with consent of client and prosecutor's superior). Cf People v.Jackson, 167 Cal. App. 3d 829,213 Cal. Rptr. 521 (1985) (undisclosed dating relationship between defense and prosecutor constituted conflict requiring reversal). 13Conn. Op. 86-5 (1986); ABA/BNA Law. Man. Prof Con. ~901:2052 (where there is no direct confrontation of spouses and the spouse's link to the adverse party is tenuous, the disclosure and consent requirements are not applicable). 14Model Rule 1.8, Comment [5]. 15Hazard and Hodes, supra §3.6.3 note 5, §1.8: 1000. 16Gregori v. Bank of Am., 207 Cal. App. 3d 291, 254 Cal. Rptr. 853 (1989). See discussion of this case in Chapter 5.

144


§3.9.1

opposing counsel during the time of the representation."!' Notwithstanding the bedroom adventures of Attorney Becker on L.A. Law,18 common sense dictates that lawyers should not romance lawyers from the opposing camp.

§3.9

Disqualification Motions

§3.9.1

Mechanics and Tactics

A disqualification motion is the proper method for a party-litigant to employ to bring an issue of the opponent's conflict to the court's attention. I On his own motion, a lawyer burdened by a suspected conflict may properly initiate the inquiry by moving for a declaration of qualification. 2 While redress could be sought through the disciplinary process, resort to discipline has several disadvantages. First, that process ordinarily entails a good deal of delay. Disciplinary counsel usually postpone investigation or formal inquiry pending resolution of the problem by the court. Second, resort to the disciplinary process may not provide

17Standard 2.16 (1991). Arguing against amending the Model Rules to include a prohibition on sex with clients, Chicago attorney Phillip Corboy commented, What about the attorney and client who, in the ardor of litigation, find romance? If this private consummation between two adults does not interfere with the client's welfare should it be presumptively condemned? Of course not. ... All of us readily agree an attorney should not make professional services contingent upon sex. But must we burden ourselves with a specific interdiction against sex? Again I think not. Most lawyers do not act on the principle that what the rules do not expressly forbid must be allowed. 78 A.BA]. 35 (Jan. 1992). lBArnie Beckel; a divorce lawyer on the popular television show, bedded clients, opposing counsel, and presidingjudges. §3.9.1 'Musicus v. Westinghouse Elec. Corp., 621 F.2d 742,744 (5th Cir. 1980). For state court opinions on the authority of a court of general jurisdiction to disqualify counsel, see Biderman Indus. Licensing, Inc. v. Avmar N.V., 155 A.D.2d 303, 547 N.YS.2d 589 (1990) (public policy favors judicial determination of disqualification motions, held in the context of denying such power to arbitrators); State ex reI. Bryant v. Ellis, 301 Or. 633, 724 P2d 811 (1986). 2Schiessle v. Stephens, 717 F.2d 417, 419 (7th Cir. 1983).

145

§3.9.1


the relief sought by the complaining party-protection from the consequences of divided loyalty or misuse of client information. Finally, a formal disciplinary complaint might imperil a lawyer's reputation more than a disqualification motion. A motion to disqualify has the advantage of providing an opportunity for a hearing and meaningful relief while at the same time fulfilling the moving attorney's ethical obligation to report misconduct. 3 Regardless of who initiates the motion, the motion should be timely" Several courts have balked at disqualifying counsel when the moving party delayed unnecessarily" On the other side of the "v.," the attorney burdened by a possible conflict should have the issue resolved as early as possible to avoid the delay, inconvenience, and expense associated with an eleventh-hour disqualification. 6 It has been suggested that an unstated precondition to the filing of a motion is an informal demand for voluntary withdrawal. 7 Whether or not such a requirement should be imposed by the courts, an informal demand is certainly consistent with notions of professional courtesy. Moreover, a court may bristle when presented with a motion filed without warning and suspect that the motion has an ulterior tactical motivation.f In terms of form, there is nothing extraordinary about the motion to disqualify. Like any other motion, form is governed by Federal Rules of Civil Procedure 7 through II or similar state rules. However, because

3Model Rule 8.3; DR 1-103(A). "See, e.g., White v. Superior Ct., 98 Cal. App. 3d 51, 159 Cal. Rptr. 278 (1979); Restatement of the Law Governing Lawyers §201, Comment e(ii) (Tentative Draft No.4, 1991). 5COXv. American Cast Iron Pipe Co., 847 F.2d 725 (11th Cir. 1988) (delay resulted in waiver of disqualification); Redd v. Shell Oil Co., 518 F.2d 311 (lOth Cir. 1975); Marco v. Dulles, 169 F. Supp. 622, 632-633 (S.D.NY), appeal dismissed, 268 F.2d 192 (2d Cir. 1959); River West, Inc. v. Nickel, 188 Cal. App. 3d 1297,234 Cal. Rptr. 33 (1981). But cf. Fiandaca v. Cunningham, 827 F.2d 825 (1st Cir. 1987) (meritorious disqualification motion should not be denied in the interest of expediency-delay in filing of motion and court's scheduling problem not sufficient cause for denial of motion). 6See §3.1 O. On use of an ethics committee in the process of resolving a conflict, see Chapter 20. By delaying withdrawal until a disqualification motion is filed, counsel may invite sanctions. See Life Fitness Inc. v. Sears, No. 88C 263, 1988 WL 37835 (N.D. Ill. Apr. 20, 1988). 7D. Herr, R. Haydock, and]. Stempel, Motion Practice 509 (1991). SId.

146


§3.9.2

the application of conflicts rules is fact-sensitive, counsel should support a motion to disqualify with affidavits setting forth the factual grounds for the motion and the harm likely to result absent disqualification. 9 Because motions to disqualify counsel can be used for harassment or to secure delay gain, courts should scrutinize them carefully and impose sanctions for groundless filings. 10 §3.9.2

Standing

Despite suggestions to the contrary in the Model Rules, I standing to move for disqualification has not generally proven to be an issue. While some courts limit standing to clients and former clients," most allow the opposing lawyer to raise the issue. These courts allow the conflict to be asserted by any attorney- or party" in the litigation or by the court on its own motion.> This liberal approach to standing can be justified by the obligation under the Code and Model Rules to report misconduct.f The court's obligation to raise such matters sua sponte presumably derives from a judge's supervisory authority over the lawyers practicing in his court. That authority is alluded to in the Code of Judicial Conduct. 7 9Id. See also Note, supra §3.6.2 note 1, at 467. lOSee,e.g., Wold v. Minerals Engg. Co., 575 F Supp. 166 (D. Colo. 1983). See discussion in Chapter 2. §3.9.2 'See, e.g., Scope Note [6] and Comment [14] to Model Rule 1.7. 2In re Appeal of Infotechnology, Inc., 582 A.2d 215 (Del. 1990) (nonclients and lawyers have no standing, limitation being justified in part to reduce premium on use of disqualification motion as litigation tactic). See also Restatement of the Law Governing Lawyers §20 1, Comment e(ii) (Tentative Draft No.4, 1991) (limiting standing to present or former clients). 3Kevlik v. Goldstein, 724 F2d 844,847-848 (1st Cir. 1984); Avacus Partners L. P. v. Brian, No. 11001, 1990 WL 6576 (Del. Ch.Jan. 23,1990) (opposing counsel may be best able to detect ethical violations). "Kessenricb v. Commodity Futures Trading Commn., 684 F2d 88 (D.C. Cir. 1982); Whiting Corp. v. White Mach. Corp., 567 F2d 713, 716 (7th Cir. 1977) (appendix); Altschul v. Paine Webber, Inc., 488 F Supp. 858 (S.D.N.Y 1980) (opponent). An insurer may have standing to disqualify counsel although its insured has "consented." See State Farm Mut. Auto. Ins. Co. v. K.A.W., 575 So. 2d 630 (Fla. 1991). 5MacArthur v. Bank of NY, 524 F Supp. 1205 (S.D.N.Y 1981); W. E. Bassett Co. v. H. C. Cook Co., 201 F Supp. 821,823 (D. Conn. 1961), aff'd, 302 F2d 268 (2d Cir. 1962). 6DR 1-103(A), (B); Model Rule 8.3. 7Canon 3(B)(3) (1990).

147

§3.9.2


The court's power to disqualify counsel has been recognized for almost a century"

§3.9.3

Work Product of Disqualified Counsel

There is some disagreement as to whether disqualified counsel may turn over work product to successor counsel. Several courts have been unwilling to "sterilize" work product (prevent its turnover) without proof of a probable transfer of confidential information. I Other courts have examined the documents in question and redacted the complaining party's confidential information." Orders preventing the turnover of work product are inappropriate when disqualification is based on a reason other than confidentiality. 3

§3.9.4

Other Remedies

Disgorgement of fees is a possible remedy under some statutory schemes. In Electro- Wire Products v. Sirotte and Permutt, I a bankruptcy case, the court found that the bankrupt's attorneys were not entitled to fees because they disregarded a conflict of interest. The attorneys represented not only the bankrupt, but also one to whom an allegedly fraudulent transfer had been made. A number of reported cases deny

8See Brown v. Miller, 286 F. 994,52 App. D.C. 330 (1923) (collecting authorities). §3.9.3 'IBM Corp. v. Levin, 579 F.2d 271 (3d Cir. 1978); First Wis. Mortgage Trust v. First Wis. Corp., 584 F.2d 201 (7th Cir. 1978); Fund of Funds, Ltd. v. Arthur Anderson and Co., 567 F.2d 225,227 n.3, 236 (2d Cir. 1977); Secord v. Chrysler Corp., 96 Wis. 2d 521,292 N.W2d 365 (1970). See generally Comment, Attorney Disqualification and Work Product Availiability: A Proposed Analysis, 47 Mo. L. Rev. 763 (1982). The Restatement of the Law Governing Lawyers §111, Comments d and e (Tentative Draft No.2, 1989), and §201, Comment e(ii) (Tentative Draft No.4, 1991) permit transfers of work product "to the extent that it does not contain material tainted by confidential information of the successful moving party." 2EZ Paintr Corp. v. Padco, Inc., 746 F.2d 1459 (Fed. Cir. 1984) (partial turnover and partial sterilization); Gray v. Commercial Union Ins. Co., 191 NJ. Super. 590, 468 A.2d 721 (App. Div. 1983). 3ABA Informal Op. 83-1503 (1984). See also Restatement of the Law Governing Lawyers §20 1, Comment e(ii) (Tentative Draft No.4, 1991). §3.9.4 140F.3d356(11thCir.1994).

148


§3.9.5

fees, or order restitution, because the attorney had a conflict of interest. 2 In Analytical, Inc. v. NPD Research, Inc.,3 a successful movant sought a fee award from the disqualified firm. Over a vigorous dissent, the Seventh Circuit concluded that the trial court was entitled to find that the disqualified firm had acted in bad faith in opposing the motion to disqualify, and it upheld an award of $25,000.4 §3.9.5

Appellate Review

A perceived increase in disqualification motions in the mid-1970s led to considerable concern that interlocutory review of disqualification decisions might deluge the appellate courts! and create another tool of delay? These fears were set to rest in the federal courts by a series of United States Supreme Court decisions holding that orders granting" or denying" disqualification in civil cases are not immediately appealable.>Similarly, the Court has ruled that the granting of a disqualification motion in a criminal case is not immediately appealable. 6

2Christensen v. United States Dist. Ct., 844 F.2d 694 (9th Cir. 1988); Giannini, Chin and Valinoti v. Lee, 42 Cal. Rptr. 2d 394 (Cal. App. 1995); St. Paul Fire and Marine Ins. Co., 345 N.W2d 209 (Minn. 1984) (malpractice insurance implications); Rice v. Perl, 320 N.W.2d 407 (Minn. 1982); Dewey v. R.J. Reynolds Tobacco Co., 109 NJ. 201,536 A.2d 243 (1988). 3708 F.2d 1263 (7th Cir. 1983). 4It is worth noting that the trial court had not awarded all that was sought, having concluded that the moving counsel had "put in excessive, and excessively remunerated, time on the case." Id. at 1270. §3.9.5 'Community Broadcasting of Boston, Inc. v. FCC, 546 F.2d 1022, 1027 (D.C. Cir. 1976). 2Melamed v. ITT Continental Baking Co., 592 F.2d 290, 295 (6th Cir. 1979). 3Richardson-Merrell, Inc. v. Koller, 472 US. 424,105 S. Ct. 2757,86 L. Ed. 2d 340 (1985). +Firestone Tire and Rubber v. Risjord, 449 US. 368, 101 S. Ct. 669, 66 L. Ed. 2d 571 (1981). 5See In re Mechem, 880 F.2d 872 (6th Cir. 1989) (writ of mandamus not the proper vehicle for challenging disqualification of plaintiff's counsel in civil case). But see In re American Airlines, Inc., 972 F.2d 605 (5th Cir. 1992); In re Sandahl, 980 F.2d 1118 (7th Cir. 1992) (use of mandamus to secure review of "patently erroneous" disqualification order). 6Flanagan v. United States, 465 US. 259, 104 S. Ct. 1051, 79 L. Ed. 2d 288 (1984). But see In re GrandJury Subpoena of Rochon, 873 F.2d 170 (7th Cir. 1989) (order disquali:f)ring government counsel in criminal case appealable under "collateral order" exception because otherwise review effectively precluded).

149

§3.9.6

§3.9.6


Discipline

Although there appears to be little doubt about courts' power to disqualify counsel, some courts have expressed hostility toward motions to disqualify and have suggested that a referral to disciplinary authorities would be a more appropriate remedy. I It has been argued that disciplinary referral, or a money damages remedy or sanction, would be preferable to "wasteful" disqualification in cases involving "unrelated matter" conflicts, since these conflicts do not ordinarily give rise to "trial taint."? Along the same lines, it has been contended that while it is improper for a firm to "withdraw" from the representation of one of two clients or "fire" the less favored client to avoid disqualification, the remedy should be discipline or money damages. The disadvantages of discipline as an exclusive remedy for conflicts of interest have already been noted. However, the existence of judicial power to impose discipline or refer matters to disciplinary counsel in lieu of or in addition to disqualification cannot be doubted. 3 While it is difficult to locate reported cases in which referrals were made," referrals have been promoted as a supplemental remedy by the ABA Standing Committee on Professional Discipline. That Committee described the disciplinary referral as a means of "uncovering a pattern or individual practice by a law firm or an individual attorney">

§3.10 Conflicts and Malpractice Disqualification may have some effect on the reputation of counsel! and may make it more difficult for counsel to recover her fee from the client. 2 §3.9.6 'Lindgren, supra §3.6.3 note 4, at 436. 2Crystal, Disqualification of Counsel for Unrelated Matter Conflicts of Interest, 4 Geo.]. Legal Ethics 273 (1990). 3ABA Code of Judicial Conduct Canon 3(B)(3) (1990). "For one example, see Lowenschuss v. Bluhdorn, 613 F.2d 18,21 (2d Cir. 1980). 5The Judicial Response to Lawyer Misconduct VII. 10 (1985). §3.1O 'Freeman v. Chicago Musical Instrument Co., 689 F.2d 715, 720 (7th Cir. 1982); Government ofIndia v. Cook Indus., 569 F.2d 737, 741 (2d Cir. 1978) (Mansfield, ]., concurring). 2Duncan v. Merrill Lynch, Pierce, Fenner and Smith, Inc., 646 F.2d 1020, 1025 n.6, 1027 (5th Cir. 1981); Comment, Disqualification of Counsel: Adverse Interests and RevolvingDoors, 81 Colum. L. Rev. 199,206 (1981).

150

Conflicts

of Interest

§3.1l

In addition, disqualification may be followed by the filing of a malpractice claim for damages sustained by the client as a result of counsel's untimely or unforeseen removal from the case." For example, not long after the disqualification of Kirkland and Ellis in Westinghouse Elec4 tric Corp. v. Kerr-McGee C01P.) a derivative claim was filed against that firm seeking damages for expenses allegedly incurred by the client as a result of the disqualification. 5 While a mere violation of the lawyer's duty to the client will not sustain a malpractice suit, the revelation of confidences to the injury of the former client would presumably be actionable. 6

§3.11 Conflicts Control Sysuerrrs A survey done in 1983 by the Subcommittee on Conflicts of Interest of the Committee on Law Firms of the American Bar Association revealed that most large law firms go to considerable effort to detect and resolve conflicts of interest at the outset of representation. The advent of the multioffice, multistate firm has not only increased the incidence of conflicts; it has also increased the degree of sophistication brought to bear on the problem of early identification of conflicts. 1 Arthur Garwin of the ABA Center for Professional Responsibility recommends the following preventive measures to avoid inadvertent conflicts: (1) circulating a "new cases" memorandum describing the subject matter and parties in prospective representations, (2) warning potential clients that matters discussed in the initial interview will not be confidential if the attorney is not retained, and requiring them to sign a written confidentiality waiver, and (3) limiting the initial interview to the information necessary to run a conflicts check. 2 See the discussion in Chapter 1 of this text. 3See generally Developments in the Law, supra §3.1 note 3, at 1486-1496. 4580 F.2d 1311 (7th Cir. 1978). 5Marschak v. Kirkland and Ellis, No. 79 D. 1579 (N.D. Ill. 1979) (dismissed for lack of diversity). 6Lakoff v. Lionel Corp., 207 Misc. 319, 137 N.YS.2d 806 (Sup. Ct. 1955); cf. United States v. Bronstein, 658 F.2d 920 (2d Cir. 1981) (adverse representation ultimately led to mail fraud conviction). §3.11 IO'Dea, supra §3.8.4 note 5, at 693. "Garwin, Beware of Beauty Contests: Proof of an Implied Attorney-Client Relationship Can Disqualify, 78 A.B.A. J. 84 (Jan. 1992).

151

§3.1l

Conflicts

of Interest

Generally, the process employed for detecting conflicts will be the same, regardless of the firm's size. This section briefly describes that process and the types of data that should be maintained and used in a conflicts control system. Regardless of the degree of sophistication applied in storing and analyzing basic data collected by a firm, all databases will be similar in the broadest sense. In a small firm, data may be maintained on file cards." Larger firms might use computer software systems capable of checking names and other identifying information. As computers and software become commonplace, such technology will be affordable for even the smallest firms. As discussed in Chapter 1 of this text, initial data gathering should focus on parties and issues or, as one authority puts it," client-oriented information and engagement information (describing the matter being litigated or the nature or goal of the services rendered). Input into this database begins with the lawyer to whom the representation is offered. In most instances, that lawyer is responsible for opening a file. In that process, a worksheet will be prepared, which will include information concerning billing, the client (i.e., "New Client Information"), and the matter or transaction at hand (i.e., "New Matter Information"). Any rational system should center around the names of present and past clients and the names of present and past opponents. However, in the case of entity clients such as corporations, a complete system would account for parent and subsidiary entities, principal stockholders, directors, and even trade associations of which the client is a member. Similarly, if the client is a trade association (e.g., an association of manufacturers), it might be useful to maintain the names of its members. In the case of individuals, lawyers should index businesses and family members. In compiling engagement-oriented information, some attention should be paid to describing and updating the subject matter of the representation. ABA Formal Opinion 342 defines a matter as "a discrete and isolatable transaction or set of transactions between identifiable parties."> Accordingly, the file worksheet should identify the matter

3For a sample client-adversary information form, see O'Dea, supra §3.8.4 note 5, at 745, app. B (New Client Form). 4Id. at 718. sABA Formal Op. 342 (1976).

152


§3.11

being worked on, and the firm should require its lawyers to update client information whenever a lawyer undertakes a new matter for an existing client. 6 By indexing all clients, opponents, and matters, the firm can spot and avoid conflicts with present and former clients. For example, the acceptance of a new matter for a present client, as well as the opening of a file on a new client, justifies a fresh look at the conflicts database. This process is particularly useful for the identifying conflicts in litigation. In other areas of practice or types of representation, firms will presumably rely on the judgment of the intake lawyer.7 In addition to information designed to uncover "direct conflicts" between present (Model Rule 1.7) and former (Model Rule 1.9) clients, some attention must be given to other parties who might have a material interest in a particular matter or issue (Model Rule 1.7(b)).A system can be devised to keep the members of a firm advised of so-called issue conflicts." Admittedly, such conflicts are not always susceptible to concise description and indexing and are a particular problem for a large, multistate firm-a partner in city A attacking a statute on behalf of a client while a partner in city B is defending a client by invoking the benefits of the same or a similar statute. Generally, such issue conflicts tend to be caught, if at all, in periodic reviews by managing partners or committees, rather than by routine checks of the conflicts index. The "conflicts committee" should carefully interview incoming lawyers and nonlawyer personnel before they join the firm. This is necessary to identify the matters on which they worked, their clients, and the extent of their work for those clients. With this information, the firm can identify conflicts and establish screening mechanisms. 9 A number of firms attempt to limit their potential conflicts by spelling out and limiting the nature of their engagement to the client, a concept that appears to be endorsed in the Model Rules. 10 Such limited engagements should be noted in the conflicts database. II "For a sample form, see O'Dea, supra §3.8.4 note 5, at 747, app. B (New Matter Form). 7See generally O'Dea, supra §3.8.4 note 5. See also Parr, Attorney Conflicts of Interest in the Area of Natural Resources Law, 30 Rocky Mtn. Min. L. Inst. 1-1 (1985). 8See §3.4.3. 9See discussion of screening in §3.8.4 (permitted for nonlawyers, generally not permitted for lawyers). IOModel Rule 1.2(c). IISee O'Dea, supra §3.8.4 note 5, at 732-739 and app. B (New Client Form).

153

§3.11


In terms of process, most larger firms will back up the file-check procedure with review by a department head, or perhaps a new business committee. Summaries of new business are commonly routed through the firm to give all members the opportunity to spot a conflict early on.'? Once a conflict has been spotted, most firms will refer the perceived conflict to a senior partner, managing partner, or special committee set up to review and resolve conflicts. Frequently, such persons or committees will refer difficult questions to local or state bar ethics committees or to outside experts. Preventive Ethics Checklist

Identifying the Client When representing a corporation, make sure that the officers and employees understand that your loyalty is to the corporation. Inform the officers and employees that you are required to act in the best interests of the corporation. o Specify in writing the identity of the client and the scope of the representation. This will help avoid implied representation of persons or entities associated with the client.

o

Interests if Nonclients Do not allow a nonclient to control the representation, even if the nonclient is paying all or part of your fee. Interested nonclients are typically family members, employers, and friends. Consider their wishes, but do not allow them to control you. Keep your client informed. When selected by an insurance company to represent an insured, remember that the insured is your client and the insurance company is a "third party benefactor."

o

o

Coriflicts between Present Clients Do not take conflicting positions on matters of fact or law for different clients in different courts unless it is clear that you can do so without harming the clients.

o

12Hughes v. Paine, Webber, Jackson and Curtis, Inc., 565 F Supp. 663 (N.D. IlL 1983) (circulation of "new cases" memorandum recommended as a means of heading off conflicts that might otherwise arise from "preliminary interview" or "rejected client" conflicts).

154


o o o

§3.1l

Do not represent a client in litigation against another client (whom you represent on an unrelated matter) without the informed consent of both clients. Do not represent coparties in civil litigation unless you believe there is no substantial chance of a conflict between them and they give informed consent to the representation. Represent codefendants in criminal cases only if it is clear that their positions coincide on all issues and they give their informed consent. The risk of conflict in criminal cases is grave.

Representation Adverse to a Former Client

o

o

o

You must preserve the confidences and secrets of the former client. If the present representation involves the same or a substantially related matter, there is a presumption that you possess confidences and secrets of the former client that can be used to her disadvantage. Your duty of loyalty to the former client precludes you from attacking work that you did for the client, even if doing so would not involve adverse use of the client's confidences and secrets. Do not undertake a representation against a former client unless the former client gives informed consent or you conclude there is no substantial chance of a disqualification motion being filed and granted.

Imputed Conflicts and Screening o Present client conflicts are imputed to firm members. Former client conflicts are imputed to firm members under the Code and Model Rules. Some courts will refuse to disqualify the firm if the conflicted lawyer is screened from any involvement in the litigation.

o

Entering or Leaving a Firm

o o

Before you change firms, prepare a full list of present and past matters worked on. This should be shown to the new firm to identify conflicts with the firm's clients. Lawyers with conflicts from former employment must be

155

§3.11

Conflicts

o

of Interest

screened in the new firm. Note, however, that not all courts accept screening as a solution. Interview nonlawyer personnel changing jobs. Screen nonlawyers from any involvement in matters on which the nonlawyer is conflicted.

Personal Relationships between Lawyers Do not go head to head with a spouse, close relative, or any person with whom you have a close personal relationshipeven with client consent. Disclose any relationship that might give rise to a reasonable suspicion that you have divided loyalties.

o o

156

4 The Advocate-Witness Problem

§4.1 §4.2 §4.3 §4.4 §4.5 §4.6 §4.7 §4.8 §4.9 §4.10 §4.1l §4.12 §4.l3 §4.l4

Introduction Comparison of the Code of Professional Responsibility and the Model Rules The Attorney Who Is a Potential Witness The Attorney as Counselor or Negotiator The Attorney as Investigator Filing a Disqualification Motion Responses to Disqualification Motions The Hearing-Attorney as Witness for the Client The Hearing-Attorney as Witness against the Client The Problem Surfaces during Trial Role of the Attorney after Disqualification The Attorney-Witness as Prosecutor The Attorney-Witness as Party Sanctions

157

§4.1

The Advocate-Witness Problem

§4.1

Introduction

Ordinarily, a lawyer should not be both a witness and an advocate in the same litigation. Various rationales have been advanced for this rule: 1. avoiding the risk of injury to the client because the testifying attorney will be subject to impeachment for interest, I 2. protecting the adversary from improper enhancement of advocacy through testimony under oath.? 3. protecting the adversary from improper enhancement of testimony by the persuasive effect of advocacy, 3 4. protecting the advocate-witness from the embarrassment of arguing her own credibility," 5. protecting the integrity of the profession by avoiding situations in which the public might think the advocate-witness is shading the truth because of her interest in the outcome of the litigation.> and 6. protecting the advocate's role "as an independent and objective propounder of rational argument and preserv[er ofj the distinction between advocacy and testimony."6 While the Code of Professional Responsibility advances a grab bag of inconsistent rationales for the advocate-witness rule,? the Model Rules, by happy contrast, recognize only two: potential damage to the §4.1 IEC 5-9; ABA Formal Op. 339 (1975). See generally S. Gillers, Regulation of Lawyers 279-284 (1994); Lewis, The Ethical Dilemma of the Testifying Advocate: Fact or Fancy?, 19 Hous. L. Rev. 75, 85 (1981). 2EC 5-9; Note, The Advocate-Witness Rule: If Z, Then X. But Why?, 52 N.YU. L. Rev. 1365, 1387 (1977). 3Wydick, Trial Counsel as Witness: The Code and the Model Rules, 15 U.C. Davis L. Rev. 651,662-663 (1982) (noting that this argument is often accepted in criminal cases in which a prosecutor seeks to testify). Note that this is the counterpart of the second rationale. "Note, supra note 2, at 1389. 56]. Wigmore, Evidence §1911, at 779 (1961); ABA/BNA Law. Man. Prof. Con. ,-r6l:504 (1984). 6ABA/BNA Law. Man. Prof Con. ,-r61:505. For an excellent analysis of this rationale, see Enker, The Rationale of the Rule That Forbids a Lawyer to Be an Advocate and Witness in the Same Case, 1977 Am. B. Found. Res.]. 455, 463-465 (1977). 'EC 5-9 includes most of the rationales included in the list in the preceding textual paragraph.

158

The Advocate-Witness

Problem.

§4.2

client's interests" and possible injury to the opponent because "it may not be clear whether a statement by an advocate-witness should be taken as proof, or as an analysis of the proof."?

§4.2


Subject to certain exceptions, DR 5-10 1(B) of the Code requires that a lawyer decline employment "if he knows or it is obvious" that he or a member of his firm "ought to be called as a witness." Subject to the same exceptions, DR 5-l02(A) requires withdrawal if an attorney "learns or it is obvious" after accepting employment that he or a member of his firm ought to be called as a witness on behalf of the client. Disciplinary Rule 5-102(B) requires withdrawal when an attorney learns or it is obvious that he may be called as a witness and "it is apparent that his testimony is or may be prejudicial to the client." Though the placement of these disciplinary rules after Canon 5 suggests that the advocate-witness problem is primarily one of conflict of interest, it is clear that other concerns are present, and client consent will not cure the problem. 1 According to one of the leading commentators on professional ethics, "[T]he major concern with a lawyer-witness is that he might gain an unfair advantage over an opponent. Thus the ... Disciplinary Rules probably should have been placed in Canon 7."2 The Code provides that an attorney may act as an advocate in a case in which the attorney or a member of his firm testifies to an uncontested matter, a matter of formality where there is no reason to believe that substantial evidence will be offered in opposition to the testimony, the nature and value of legal services rendered in the case, or any other matter "if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case."3 8Model Rule 3.7, Comment [5J (1983). 9Model Rule 3.7, Comment [2]. §4.2 'MacArthur v. Bank of N.Y, 524 F Supp. 1205 (S.D.N.Y 1981). 2G. Hazard,Jr., and VI/. Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct §3.7:200 (2d ed. 1990).

3DR 5-101(B)(l)-(4).

159

§4.2


The provisions of the Model Rules differ substantially from those of the Code. Model Rule 3.7(a)states that a lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless the testimony relates to an uncontested issue, the testimony relates to the nature and value of legal services rendered in the case, or disqualification of the lawyer would work a substantial hardship on the client. Model Rule 3.7(b) adds that a lawyer may act as an advocate in a case in which another lawyer in the firm is likely to be called as a witness unless precluded from doing so by Model Rule 1.7 or 1.9 (rules relating to conflict of interest). The Model Rules are designed to alleviate a number of serious problems arising from an indiscriminate application of the Code provisions. First, the Model Rules use the phrase "likely to be a witness" to describe the point of involvement at which an ethical question arises. A lawyer should consider the probability of a need for testimony about facts of which he has knowledge and the availability of other witnesses who might testify to those facts. In contrast, the Code employs an ambiguous phrase, "ought to be called as witness," suggesting that the judge should decide whether the attorney's testimony would be helpful. 4 Second, the Model Rules liberalize the hardship exception to the advocate-witness rule. Under the Code, it is necessary to find that the client will suffer a substantial hardship because "of the distinctive value of the lawyer or his firm in the particular case." This wording suggests that delay and expense caused by disqualification of counsel are not the kinds of "substantial hardship" the drafters of the Code contemplated, and courts have generally insisted on a showing that the attorney is uniquely qualified to handle the case in order to avoid disqualification. 5 'Wicks v. Ward, 706 F. Supp. 290, 292 (S.D.N.Y 1989) ("The test for disqualifying counsel [under DR 5-102] is not whether the attorney will be called as a witness ... but whether the attorney ought to be called."); Comden v. Superior Ct., 20 Cal. 3d 906, 576 P.2d 971, 145 Cal. Rptr. 9, cert. denied, 439 U.S. 981, 99 S Ct. 568, 58 L. Ed. 2d 651 (1978); Wydick, supra §4.1 note 3, at 666-669. "Draganescu v. First Natl. Bank of Hollywood, 502 F.2d 550 (5th Cir. 1974), eert. denied, 421 U.S. 929, 95 S. Ct. 1655,44 L. Ed. 2d 86 (1975); United Stites ex reI. Sheldon Elec. Co. v. Blackhawk Heating and Plumbing Co., 423 F. Supp. 486 (S.D.N.Y 1976); Wydick, supra §4.1 note 3, at 672-673. ABA Formal Opinion 339 (1975) provides thefollowing examples of substantial hardship: a complex suit that has been in preparation for a long time in which an unexpected development makes the attorney's testimony necessary, extraordinary familiarity with the client's affairs arising from a long professional relationship, and knowledge of a juror's misconduct during trial.

160

The Advocate-Witness Probdern

§4.2

The Model Rules, on the other hand, simply provide an exception if disqualification would work substantial hardship on the client." The official comment to Model Rule 3.7 states that the interests of the client and those of the opposing party must be balanced. Whether the opposing party is likely to suffer prejudice depends on the nature of the case, the importance and probable tenor of the lawyer's testimony, and the probability that the lawyer's testimony will conflict with that of other witnesses. Even if there is risk of such prejudice, in determining whether the lawyer should be disqualified due regard must be given to the effect of disqualification on the lawyer's client. It is relevant that one or both parties could reasonably foresee that the lawyer would probably be a witness." Third, the Model Rules curtail vicarious disqualification. While the Code expressly provides that all partners and associates of the advocate-witness fall within the prohibition," the Model Rules assume that the opponent of the advocate-witness is sufficiently protected so long as the attorney-witness does not personally assume the role of advocate." If another attorney is trial counsel, there will be little chance that the line between fact and argument will be blurred. Vicarious disqualification is thus a concern only if the law firm's dual role-one member testifying and another advocating-harms the client's interests.'? Determining whether the client will be harmed by such an arrangement is primarily the responsibility of the law firm, and courts should be skeptical of disqualification motions charging a conflict between the opposing counsel and the opposing counsel's client. I I It should be recognized that an advocate's testimony is competent evidence.!? which cannot be excluded if probative and necessary." If

6Model Rule 3.7(a)(3). 7Model Rule 3.7, Comment [4]. 8DRs 5-IOI(B), 5-102(A), (B). The fact that a nonlawyer employee will be called as a witness will not result in the firm's disqualification, even in a Code state. Jones v. City of Chicago, 610 F. Supp. 350 (N.D. III. 1984). 9Model Rule 3.7, Comment [4]. E.g., FDIC v. United States Fire Ins. Co., 50 F.3d 1304 (5th Cir. 1995) (attorney disqualified, but firm not disqualified). IOModel Rule 3.7(b). IIModel Rules 3.7, Comment [5],1.7, Comment [14]. 12Waltzer v. Transidyne Gen. Corp., 697 F.2d 130 (6th Cir. 1983). 13Fed.R. Evid. 403.

161

§4.2


Problem

there has been an ethical violation, the normal remedy is for the judge to permit (or require, as the case may be) the attorney to testify and refer the matter to disciplinary authorities."

§4.3

The Attorney Who is a Potential Witness

Professor Wydick poses the problem of the attorney who witnesses an auto accident and is subsequently asked by one of the drivers to sue the other.' Suppose that the driver wants the attorney to personally act as trial counsel and it is obvious that the attorney should also testify for the client. Under these circumstances, the attorney-witness would harm the client by taking the case because by so doing she would make the eyewitness (herself) impeachable on the basis of bias or interest.? Neither the Code" nor the Model Rules! permit an attorney to seek a client's consent to an advocate-witness situation if it is obvious that the client will be harmed thereby. The result should be the same if a partner or associate were to serve as trial counsel, since the enlistment of the firm unnecessarily compromises the credibility of the attorney-witness. 5 The attorney or firm may take the case only if it is reasonably certain that the attorney need not be called as a witness. If the attorney is one of five witnesses who saw the accident, if all five saw the same thing, if what they saw is favorable to the client, and if the other four are at least as credible as the attorney-witness, then it is reasonably certain that the attorney-witness will not need to testify on behalf of the client, and the attorney or the firm may undertake the representation." Obviously,meeting all these conditions will be rare. When the attorney's version of the events is inconsistent with that of the client, obviously the attorney should not compound the client's 14Mentor Lagoons, Inc. v. Rubin, 31 Ohio App. 3d 256, 510 N.E.2d 379 (1987). lWydick, supra §4.1 note 3, at 680-685. 2Id. at 681. In Courtney v. Edelschick, 157 A.D.2d 818, 550 N.YS.2d 415 (1990), a treating physician/lawyer found evidence of medical malpractice committed by another doctor; the physician referred the patient to a law firm with which he had an Of Counsel relationship. The firm and the doctor/lawyer were disqualified. 3DR 5-1OI(B). 4Model Rule 1.7(b)(1), Comment [4]. 5Wydick, supra §4.1 note 3, at 681-682. 6Id. at 684-686.

§4.3

162


Probdern

§4.4

proof problems by undertaking the representation. 7 This is true even if the attorney is only one of several witnesses who might be called. The attorney cannot guarantee that she will not be called as a witness for the other side, the effect of which would be devastating." The harm to the client's cause cannot be cured by passing the litigation on to the attorney-witness's partner, since the partner would be unable to convincingly cross-examine her. The credibility of the attorney as a witness for the opponent would be enhanced in such a scenario; the opponent could convincingly argue that the attorney-witness has no motive to testify falsely against the client; on the contrary, her interests lie on the side of the client. An attorney cannot reasonably believe that the client's interests would not be harmed by representation from a firm including a potential adverse witness. Therefore, the client cannot be asked to waive the conflict.

§4.4

The Attorney as Counselor or Negotiator

Lawyers who serve clients as counselors and negotiators are frequently involved in developing facts that may be the subject of litigation if the parties disagree at a later time. Suppose that Attorney A negotiates an agreement with D on behalf of Client C. Later a disagreement arises as to what was said between C and D on a crucial issue. A was present during the conversation and "knows" that C's version is accurate. May A represent C) even though it is foreseeable that he will need to testify? Under the Model Rules, the analysis should be as follows: 1. Does C give her informed consent to the dual role? 2. Will D move to disqualify? 3. What is the likelihood of the court granting the disqualification motion? 7Id. at 687-691. E.g., Lamborn v. Dittmer, 873 F.2d 522, 531-532 (2d Cir. 1989) (defendant was entitled to call plaintiff's attorney as a witness to contradict the plaintiff on a material point). 8"To avoid the conflict you might move for a ruling in advance of trial that [your opponent] cannot call you as a witness. But the court will be loath to grant your motion early in the case, particularly since other good trial lawyers are available." Wydick, supra §4.1 note 3, at 688.

163

§4.4

The Advocate-Witness Pr-obdern

If the matter were to go to trial, the attorney might be hampered-as advocate or as witness-by the dual roles. The attorney can, however, ask for the client's consent unless a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances. I In this scenario, the attorney-witness is already interested by virtue of his prior representation of the client; continued representation may not add significantly to the credibility problem. On the other hand, if the attorney refuses to take the case, the client will be relegated to counsel not familiar with the facts. In deciding whether the client may be asked to consent, and in informing the client of the risks and benefits involved, the attorney should consider the likelihood of both the case going to trial and a disqualification motion being filed and granted. If disqualification is the likely result, substantial harm to the client is foreseeable, and the attorney should refrain from taking the case. The probability of disqualification depends initially on the likelihood of the opponent filing a disqualification motion. Assuming that it is predictable that such a motion will be filed, the attorney should consider the likelihood that the motion will be granted. The drafters of the Rules suggest five factors to be considered in determining whether the potential prejudice to the opponent is outweighed by the prejudice to the client: 1. the nature of the case, 2. the importance and probable tenor of the lawyer's testimony, 3. the probability that the lawyer's testimony will conflict with that of other witnesses, 4. the effect of disqualification on the lawyer's client, and 5. the foreseeability that the lawyer would have to act as witness.2 Suppose that the attorney-witness has a partner or associate available to act as counsel in the event the matter goes to trial. Under the Model Rules approach, the opponent has no standing to complain because the attorney-witness is not personally acting as advocate." The §4.4

'Wydick, supra §4.1 note 3, at 682. 2Model Rule 3.7, Comment [4J. E.g., World Youth Day, Inc. v. Famous Artists Merchandising, 866 F. Supp. 1297 (D. Colo. 1994) (attorney who negotiated on behalf of client was disqualified as a necessary witness when litigation resulted). 3Model Rule 3.7(b).

164

The Advocate-Witness Probfern

§4.4

attorney needs to be concerned only with the client's interests. Does the client understand that the trial will be handled by the partner, rather than the attorney who was originally retained to negotiate the contract? Does representation by the partner appear compatible with the best interests of the client? Assuming informed consent by the client, representation by the partner is permitted by the Model Rules.4 In jurisdictions following the Code, however, no distinction is drawn between the attorney-witness and the partners, and disqualification is the result unless the attorney-witness can convince the court either that he is not in fact a necessary witness or that disqualification will work a substantial hardship to the client because of the firm's distinctive qualities.' The results have often been harsh. In MacArthur v. Bank if New York,6 the trial court disqualified the defense firm after concluding that a senior partner was a necessary defense witness. The court narrowly construed the substantial hardship exception 7 and refused to allow the client to limit its proof by promising not to call the attorney as a witness." The judge thought the client ought to call the attorney, and that was enough to disqualify the firm.? Disqualification was also ordered in Groper v. TajpO There the plaintiff sued the defendants for breach of fiduciary duty. The defendants asserted that their conduct had been ratified by the plaintiff's inaction after notice was given to the plaintiff's attorney. The defendants successfully moved to disqualify the attorney and the firm by alleging that the attorney would be a necessary witness for the plaintiff to testify to a lack of notice.'! Presumably, the defendants had a basis for believing the attorney would deny that notice was given.!" Commentators have been critical of the effect of an unbending application of DR 5-102 on attorneys who seek to conscientiously represent their clients in nonlitigation matters. "The rule unnecessarily complicates counsel's decision in representing a client since a thoughtful attorney now has to keep in mind that as a result of any action he might 4Wydick, supra §4.1 note 3, at 695. 5Groperv. Taff, 717 F.2d 1415 (D.C. Cir. 1983). 6524 F. Supp. 1205 (S.D.N.Y 1981). lId. at 1210. BId. at 1209. 9Id. at 1207. 10717F.2d 1415 (D.C. Cir. 1983).

IIId.at1417. 12Id.at 1419.

165

§4.4


take he could become a percipient witness and thus disqualify his firm from further representing his client in litigation." 13 The conscientious attorney will become familiar with the facts in order to competently advise clients and assist clients in enforcing their rights. There will be a detrimental impact on preventive law if disqualification not only of the attorney, but also of the firm is the result of thorough representation in nonlitigation matters. "By forcing the client, often at considerable expense, to employ other and usually less suitable counsel, the rule effectively penalizes individuals for having the foresight to consult an attorney on a legal problem in advance." 14 In exercising a preventive function, there are several things an attorney can do to minimize the chances of disqualification in the event of litigation. To begin with, consider whether it is appropriate for a lawyer to do what the client wants done. Many disqualification cases have arisen out of situations in which a lawyer was called to "be there" while someone did something to the client. In] D. Ffiaumer Inc. v. United States Department if Justice, 15 the attorney was asked to be present during the search of a client's offices. When a suit was later filed alleging that the search was conducted in an illegal fashion, the government moved to disqualify because it was obvious from the face of the complaint that the attorney was present during the search. While the motion was denied as premature, the court made it clear that disqualification would be the likely result if the case were to go to trial. 16 Whenever an attorney is asked to be an observer, it is predictable that he will be considered a necessary witness in the event of controversy over the facts observed. Unless the attorney is uniquely qualified, someone else should act as [3Brown and Brown, Disqualification of the Testifying Advocate-A Firm Rule?, 57 N.C. L. Rev. 597, 598 (1979) (nice pun). "Note, supra §4.1 note 2, at 1367. But see MacArthur v. Bank of N.Y, 524 F. Supp. 1205,1211 (S.D.N.Y 1981): A lawyer can choose ... to participate actively in a client's business affairs-not just as an adviser, but also as a negotiator and agent. ... Such conduct is entirely proper. But if an attorney chooses to become intimately involved in the client's business, then he or she must be prepared to step aside if the matters involved result in litigation. This may be displeasing to firms that wish to have some members act as businessmen and others as litigators. But when these firms place themselves in the position of having an attorney acquire information that makes his testimony necessary, they must accept the consequences. [5465 F. Supp. 746 (E.D. Pa. 1979). '6Id. at 748.

166

The Advocate-Witness Pr oblern

'§4.4

observer." A secretary, clerk, or paralegal may be used," but it is better to use someone who is not impeachable for interest.'? When action seems called for, prudent lawyers should think before acting. In United States o. GomeZ,20 the attorney arranged his clients' surrender after learning a warrant had been issued for their arrest. He accompanied the clients to the police station and acted as translator for their confessions. He thus became a percipient witness not only to their physical appearance at the time of surrender (they apparently bore the effects of a fire that placed them at the scene of a crime), but also to the voluntariness of their confessions. It was obvious to the district court that the attorney could not represent the defendants at trial. 2! Lawyers are often asked to help clients in matters that are not strictly legal in nature. The lawyer should ask whether the work is sufficiently "legal" for the application of the attorney-client privilege'? and whether he wishes to risk disqualification by becoming an actor in events that may be litigated." In Model Rules jurisdictions, preventive office practice should include establishing a rule that an attorney who plans, negotiates, or otherwise participates in the development of facts liBut cf. United States v. Wade, 388 U.S. 218, 236, 87 S. Ct. 1926, 1937, 18 L. Ed. 2d 1149, 1162 (1967), which holds that there is a right under the sixth amendment to the presence of counsel at a postindictment lineup in order to detect suggestive acts by law enforcement officials. The Supreme Court apparently did not consider the ethical dilemma created by this solution to the problem of suggestive lineups. 18United States v. Nyman, 649 F2d 208 (4th Cir. 1980);Jones v. City of Chicago, 610 F. Supp. 350 (N.D. Ill. 1984). 19"[G]iven a choice between two or more witnesses competent to testify as to contested issues, and other factors being equal, a client's cause is best served by having the testimony from the witness not subject to impeachment for interest in the outcome of a trial." ABA Formal Op. 339 (1975). 2°584 F Supp. 1185 (D.R.I. 1984). 21The judge did, however, permit the attorney to continue as counsel in pretrial matters, the taking of a guilty plea, and sentencing. rd. at 1190. Given the clear conflict with the clients, continued representation of any sort appears questionable. See the discussion in Chapter 14. 22Hughes v. Meade, 453 S.W.2d 538 (Ky. 1970) (return of stolen property is not legal work; identity of client not protected by attorney-client privilege). 23United States v. Locascio, 6 F3d 924, 934 (2d Cir. 1993) (attorney for Mafia boss John Gotti disqualified because the attorney's presence during crucial conversations made him a potential "unsworn witness" if allowed to participate at trial); United States v. Cortelesso, 663 F2d 361 (1st Cir. 1983) (on behalf of his client, the attorney assured federal agents that certain property would not be removed; the property was removed, and the client was indicted for removing it; disqualification was ordered because of the attorney's involvement in the facts).

167

§4.4


will not try the case in the event of litigation over those facts; obtaining the client's informed consent to the possible participation of a partner or an associate as trial counsel; and insulating the potential trial counsel from firsthand knowledge of the facts. It is wise practice to keep trial counsel informed of developments; it is not wise to invite trial counsel to negotiations with representatives of the other party Hopefully, even in jurisdictions that have not adopted the Model Rules, courts will recognize that the dubious benefits of vicarious disqualification are outweighed by the inequity of forcing a client to forsake the law firm with which he has a relationship in favor of a second firm that is a stranger to the client and the issues. Disqualification motions should be granted only on a showing of a realistic possibility of prejudice."

§4.5

The Attorney as Investigator

A trial lawyer must investigate the circumstances of the case; failure to conduct an adequate investigation may be considered unprofessional conduct.' In the course of investigation, the attorney will acquire information about the historical facts underlying the controversy. Theoretically, the attorney becomes a potential witness whenever she learns something about the relevant circumstances of the case. For example, the attorney who visits the scene of an automobile accident sees the road on which the cars were traveling. If the width of the road were to become an issue in the case, it would be possible to call "the attorney to testify.No one would think, however, that an attorney who familiarizes herself with the scene acts in an unprofessional manner. Nor would any court disqualify an attorney under these circumstances. The reason is that the attorney is not the only witness who can testify to the width of the road. The fact in question is capable of measurement, and anyone can measure the road and testify as credibly as the attorney. At the investigative stage, the attorney faces no ethical dilemma when she 24Among the cases refusing to apply the rule of vicarious disqualification are Ramsay v. Boeing Welfare Plans Committee, 662 F. Supp. 968 (D. Kan. 1987), and S & S Hotel Ventures Ltd. Partnership v. 777 S. H. Corp., 69 N.Y2d 437,508 N.E. 2d 647, 515 N.YS.2d 735 (1987). §4.5 'Model Rule 1.1., Comment [5J; ABA Standards for Criminal Justice, The Defense Function, Standard 4-4.1 (1993) [hereinafter Defense FunctionJ.

168

The Advocate-Witness Probbern

§4.5

visits the scene; there is no reason for her to believe that she "ought to be a witness" about the facts observed. 2 In interviewing witnesses, however, it is prudent to assume that the witness will give a different version of the facts at a later time, and that the attorney may become a necessary witness to challenge the turncoat. Although there is respectable authority to the contrary, 3 the better view is that when impeachment is initiated by asking a witness whether he made a particular statement, the impeachment must be completed if the witness denies making the statement. 4 Completion requires proof of the prior statement, which may necessitate the attorney testifying. "To be sure, it might have been awkward for the lawyer to take the stand and testify,but if he was not prepared to do this, even if it meant withdrawing from the case, he should not have asked the questions."> An attorney who challenges a turncoat witness with "Didn't you tell me ... ?"6 risks embarrassment and disqualification if opposing counsel argues that the attorney has become a witness and demands that the attorney take the stand to be cross-examined. What precautions can be taken to guard against being considered a necessary impeachment witness? First, consider having someone else conduct witness interviews, either an employee? or an independent investigator." Second, have someone else present when interviewing a witness who may deny or vary a statement. 9 Third, reduce the interview

2DR 5-101(B). It might be otherwise if the attorney visited the scene believing that she would have to testify if the conditions of the road were disputed. 3United States v. Gholston, 10 F3d 384, 388 (6th Cir. 1993) (Fed. R. Evid. 613(a) does not require that an attorney have extrinsic evidence available to support an attempt to impeach). 4United States v. Blake, 941 F2d 334 (5th Cir. 1991); United States v. Bohle, 445 F2d 54,73-75 (7th Cir. 1971) (cases collected); Robertson V. Sanyo Maru, 374 F2d 463, 465 (5th Cir. 1957), cert. denied, 400 U.S. 854, 91 S. Ct. 59, 27 L. Ed. 2d 91 (1970). :Jackson v. United States, 297 F2d 195, 198 (D.C. Cir. 1961) (Burger,]., concurring). 6 Gholston, 10 F3d at 389 (finding no error in such an impeachment, although a "prosecutor must take care not to unduly inject himself or herself into the proceedings"). "United States V. Nyman, 649 F2d 208 (4th Cir. 1980) (the advocate-witness rule does not apply to law clerks). 3D. Binder and P. Bergman, Fact Investigation 218-219 (1984); R. Keeton, Trial Tactics and Methods 325-326 (1981). 9"Unless a prosecutor is prepared to forego impeachment of a witness by the prosecutor's own testimony as to what the witness stated in an interview or to seek leave to withdraw from the case in order to present the impeaching testimony, a prosecutor

169

§4.5


to a signed statement. 10 These methods minimize the possibility of the attorney being deemed a necessary witness-the first two by injecting a nonattorney into the interview process and the third by reducing the likelihood of controversy over what was said. II Audiotapes are not a cure-all; they present problems because tapes may be altered. Even if the judge does not require an elaborate foundation;'? a jury may view with suspicion a tape recording whose accuracy or completeness is questioned by one of the participants. In taking statements, whether written or taped, the attorney should consider the desirability of a neutral observer to testify not only to what the witness said, but also to the lack of pressure tactics by the interviewer. During the investigation stage, the attorney should protect the client's interests by using interviewing procedures designed to guard against the eventuality of the statement being challenged by a turncoat witness. There is an additional reason for caution in interviewing witnesses. Statements of friendly witnesses are often revealed to the other side during discovery, 13 negotiations, or trial. 14 If the testimony deviates should avoid interviewing a prospective witness except in the presence of a third person." ABA Standards for CriminalJustice, The Prosecution Function, Standard 3-3.1 (f)(1979) [hereinafter Prosecution Function]. The standard for defense attorneys is substantially the same. Defense Function Standard 4-4.3(d). "Keeton, supra note 8, at 328-334. "Id. at 332-333. Keeton notes, however, the possibility that the witness may deny his signature or claim that the statement was altered after signing. If this occurs, "it is generally better to call some other observing witness rather than to offer the testimony of a lawyer .... Code provisions relating to a lawyer's testimony in a case that he is trying [to] cast doubt on the advisability of his testifying on such a point as this, even though it might be considered a 'formal matter' within the prohibition of the Code." Id. at 333. United States v. Arrington, 867 F.2d 122 (2d Cir. 1989) is such a case-the witness disavowed a signed statement by saying that the defense lawyer threatened him. 121nthe early days of tape recordings, courts required a showing of the capability of the machine, the competency of the operator, the fact that the machine worked properly, the absence of alterations, the proper preservation of the recording, and the identification of the speakers. United States v. McKeevel; 169 F. Supp. 426, 430 (S.D.N.Y 1958), rev'd on other grounds, 271 F.2d 669 (2d Cir. 1959). Under Federal Rule of Evidence 901 (a), it is probably sufficient if a person who was present testifies that the tape is an accurate record of what was said. See generally E. Imwinkelried, Evidentiary Foundations 61-66 (3d ed. 1995). 13E.g.,Fed. R. Civ. P. 26(b)(3), which provides for discovery of witness statements on a showing of need and inability to obtain the substantial equivalent of the statement without undue hardship. The 1993 amendments to the federal discovery rules require sua sponte disclosure of witness identities, which may encourage counsel to exchange witness statements. See discussion in Chapter 6. 14E.g.,Fed. R. Evid. 612, which provides for discovery of witness statements used to refresh recollection; Fed. R. Crim. P. 26.2, which provides for discovery of witness

170


Probdern

§4.6

from the letter of the statement, opposing counsel may attempt to call the attorney who took the statement to impeach the witness." Under these circumstances, the presence of another person at the time of taking obviates the need for the attorney's testimony.

§4.6

Filing a Disqualification Motion

There are several things to consider before filing a motion to disqualify the opposing lawyer under the advocate-witness rule. First, does the jurisdiction follow the Code or the Model Rules? If the jurisdiction has adopted the Model Rules, there is no vicarious disqualification, and the only person who can be disqualified is the attorney-witness personally. In a Code jurisdiction, the entire firm may be disqualified when it is obvious that a member of the firm should testify.Under either the Code or the Model Rules, the movant should file an affidavit with the disqualification motion, detailing the basis for asserting that the opposing attorney (or a member of the firm under the Code) is a necessary witness.' If the basis for the motion is that the attorney is a necessary witness for his client, the movant should specify the information the attorney has and explain how that information relates to the issues in the case. In Groper v. Taif} for example, a crucial issue was whether the plaintiffs had been notified of the defendants' actions. The defendants' disqualification motion alleged that they notified plaintiffs' counsel, but that he would deny receiving notice. The motion to disqualify was granted because it appeared that plaintiffs' attorney would be a crucial witness for the plaintiff. 3 statements in criminal cases after direct examination. There is substantial authority that using privileged documents to refresh recollection forfeits any privileges. Gould Inc. v. Mitsui Mining and Smelting Co., 825 E2d 676 (2d Cir. 1987); Sporck v. Peil, 759 E2d 312 (3d Cir.), cert. denied, 474 U.S. 903, 106 S. Ct. 232,88 L. Ed. 2d 230 (1985);James Julian v. Raytheon, 93 ER.D. 138 (D. Del. 1982). 15United States v. Dupuy, 760 E2d 1492, 1498-1501 (9th Cir. 1985). §4.6 'Optyl Eyewear Fashion Inti. Corp. v. Style Cos., 760 E2d 1045 (9th Cir. 1985); Gajewski v. United States, 321 E2d 261, 269 (8th Cir. 1963), cert. denied, 375 U.S. 968,84 S. Ct. 486, 11 L. Ed. 2d 416 (1964); Stanwood Corp. v. Barnum, 575 E Supp. 1250 (W.D.N.C. 1983). 2717 E2d 141.5 (D.C. Cir. 1983); see §4.4. 3717 E2d at 1417.

171

§4.6


Problem

When the basis for disqualification is that the movant will call the opposing attorney to give testimony for the movant (ordinarily against the attorney's client), the motion should specify the expected testimony and relate the testimony to the movant's theory of the case. In United States v. Prantil.' for instance, the defense attorney moved to recuse the prosecutor with whom he had negotiated the surrender of his client. The defendant was charged with perjury and false statements. The defense attorney alleged that the prosecutor's testimony would prove that the defendant's statements were true. The defendant's conviction was reversed because it was clear to the appellate court that the prosecutor was a necessary defense witness.' In contrast, the disqualification motion in Optyl Eyetoear Fashion International Corp. v. Style Companies- was so deficient that attorney fees were imposed as a sanction by both the trial and the appellate courts. 7 The motion alleged merely that plaintiff's attorneys participated in the drafting of a letter to ascertain the extent of public confusion between the products of plaintiff and defendant. The motion did not specify what the attorneys would say in connection with the letter that would be relevant to the case, and the movant conceded that he did not expect the attorneys to say anything of value to him. Under these circumstances, the appellate court characterized the movant's suggestion that he would call counsel as nothing more than "a predicate for the disqualification motion."8 When other witnesses are available, the motion should demonstrate why the opposing attorney is a superior witness." In United States v. Cortelesso,1Ofor example, the court disqualified an attorney who allegedly made a statement crucial to the government's case; the court rejected the attorney's argument that the government had no need for his testimony 4764 F.2d 548 (9th Cir. 1985). SId. at 552. 6760 F.2d 1045 (9th Cir. 1985). 7Id. at lO47, 1052. See also Paramount Communications v. Donaghy, 858 F. Supp. 391 (S.D.N.Y 1994) (opponent's allegation that attorney's recollection of events might conflict with the recollection of attorney's client insufficient to make attorney a necessary witness). 8760 F.2d at lO50. 9Cf. United States v. West, 680 F.2d 652, 654 (9th Cir. 1982) (A prosecutor should not be called as a witness "unless all other sources of possible testimony have been exhausted. "). 1°663 F.2d 361 (1st Cir. 1981).

172


§4.7

because it could call other persons who heard the statement. II As prosecution evidence, a concession from the statement maker was obviously more credible than the testimony of the government agents to whom the statement was made. In contrast to Cortelesso, the court in United States v. DUpuyl2 denied a disqualification motion, in part because three government agents were present during the prosecutor's debriefing of the government witness and the defendant made no attempt to call the agents to impeach the witness. The defendant failed to show that the prosecutor would testify differently than the agents. 13

§4.7

Responses to Disqualification Motions

There are a number of responses to a disqualification motion. A preliminary question, however, is whether the jurisdiction has adopted the Model Rules. As noted previously,I the Model Rules do not apply the concept of vicarious disqualification to the advocate-witness situation. In a Model Rules jurisdiction, it should be a sufficient response to aver that trial matters will be handled by a partner or an associate of the attorney-witness. In civil cases, the Model Rules deny an opponent "standing" to complain of a conflict between the attorney and her client arising from the status of the attorney's partner as a potential witness in the case." In criminal cases, however, a prosecutor has "standing" to raise a conflict between a criminal defendant and his lawyer because the state has an interest in assuring that the client has conflict-free representation and in thereby protecting a guilty plea or verdict against collateral attack. 3 IIId. at 363. 12760F.2d 1492 (9th Cir. 1985). 13Id.at 1498. §4.7 'See discussion in §4.2. 2Model Rule 3.7, Comment [5J; Wydick, supra §4.1 note 3, at 679. 3Model Rule 1.7, Comment [14J, which states, "Where the conflict is such as clearly to call in question the fair or efficient administration of justice opposing counsel may properly raise the question." Wheat v. United States, 486 U.S. 153, 108 S. Ct. 1692, 100 L. Ed. 2d 140 (1988), discussed in this section and in §14.3.1, holds that prosecutors have standing to raise the issue of conflict between client and defense counsel. See also United States v. Arrington, 867 F.2d 122 (2d Cir. 1989) (mistrial declared when the defense lawyer's testimony became necessary to counter a witness's claim of coercion; court refused the client's offer not to call the lawyer to testify).

173

§4.7


In Code jurisdictions, of course, the attorney cannot avoid the advocate-witness problem by turning the trial over to a partner or an associate. It may be, however, that courts in Code jurisdictions will be guided by the Model Rules philosophy; they could implement that philosophy by liberally construing the substantial hardship exception! or by refusing to apply the Code's disciplinary rules in passing on disqualification motions.> Assume that turning the trial over to a partner is not a viable option for the attorney-witness, either because there is no partner or associate capable of handling the trial or because the matter arises in a Code jurisdiction. What are the possible responses to the disqualification motion? The first is to assert that the attorney will not testify.If the ground for the motion is that the attorney will testify for the client, it should be a sufficient answer in civil cases to deny the assertion. It is, after all, for the client and the lawyer to decide which witnesses to call, and a court should not interfere with trial strategy. If a dispute arises concerning whether an advocate possesses crucial information, or if there is a dispute about whether he ought to be called as a witness for his client, the attorney and his client are in the best position to determine if the advocate-witness rule applies and if the attorney should resign. The attorney and his client will be permitted to present their case according to their own best judgment. If in their best judgment they can sufficiently present the client's case without testimony from counsel, their decision should be respected."

Criminal cases require greater judicial scrutiny, because of institutional concerns that the accused receive a fair trial? and guilty verdicts

4Greenebaum-Mountain Mortgage Co. v. Pioneer Natl. Title Ins. Co., 421 F. Supp. 1348, 1352-1354 (D. Colo. 1976). See the discussion of substantial hardship under the Code in §4.2. SParetti v. Cavalier Label Co., 722 F. Supp. 985 (S.D.N.Y 1989) (Code case rejecting vicarious disqualification); S & S Hotel Ventures v. 777 S. H. Corp., 69 N.Y2d 437,508 N.E.2d 647, 515 N.YS.2d 735 (1987) (reversing a disqualification order entered because the defendant alleged that a member of plaintiff's firm "ought to be called as a witness"; in deciding disqualification motions, courts are not bound by the vicarious disqualification provisions of the Code). 6Note, Application of the Advocate-Witness Rule, 1982 S. Ill. U. LJ. 291, 305 (1982). 7United States v. Gomez, 584 F. Supp. 1185, 1190 (D.R.!. 1984).

174


§4.7

not be set aside on a claim of defense counsel's incompetency or conflict." If it appears to the court that the defense attorney is a necessary witness for the defendant, and if the attorney states that she is not going to testify, the court must hold a hearing to ascertain that the client understands what is being given up by going forward with an attorney who should be testifying, rather than advocating. 9 The defense attorney has an ethical obligation to bring potential conflicts to the court's attention in order to enable the judge to discharge her obligation to determine whether the defendant is making an informed decision to give up the right to a conflict-free lawyer.10 The judge isjustified in requiring the substitution of counsel in order to prevent a mistrial if he believes that the lawyer will be forced to testify by the exigencies of the trial.!' A disqualification motion, in effect, demands that the attorney choose between conflicting roles. It is always a sufficient response to the motion to choose the role of witness and move to withdraw from the litigation. Indeed, the Ethical Considerations of the Code suggest this as the preferred course of conduct. 12 The attorney must, however, consider the consequences to the client. 13 8This was the Court's primary concern in Wheat v. United States, discussed in more detail in Chapter 14. The incompetency standard was formulated in Strickland v. Washington, 466 US. 668,104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), also discussed in Chapter 14. 9Cf Holloway v. Arkansas, 435 U.S. 475, 98 S. Ct. 1173,55 L. Ed. 2d 426 (1978) (such an inquiry is required in multiple representation situations). See also People v. Anderson, 42 Cal. Rptr, 2d 149 (Ct. App. 1995) (trial court erred in not accepting defendant's waiver; under California law, the defendant is "master of his fate"). 1°435US. at 485-486,98 S. Ct. at 1179, 55 L. Ed. 2d at 435. It may be very difficult to make the defendant understand what is being given up by forgoing the testimony of his lawyer, and a court may be warranted in suspecting that client consent is not truly voluntary. MacArthurv. Bank of N.Y, 524 F. Supp. 1205, 1209 (S.D.N.Y 1981). See also Tague, Multiple Representation, 67 Geo. LJ. 1075, 1102 (1979), arguing that it is virtually impossible for ajudge to be certain that a defendant's waiver of a conflict of interest is informed and voluntary. This issue is discussed further in Chapter 14. "Wheat v. United States, 486 US. 153, 163, 108 S. Ct. 1692, 1699, 100 L. Ed. 2d 140,151 (1988). '2"[D]oubts should be resolved in favor of the lawyer testifying and against him becoming or continuing as an advocate." EC 5-10. 13Model Rule 1.16(b) states that a lawyer may withdraw from representation if this can be accomplished without material adverse effect on the client. Model Rule 1.16(a) provides that an attorney shall withdraw if representation would violate the rules of professional conduct; this provision requires reference to the attorney-witness rule (Model Rule 3.7), with its substantial hardship provision. Thus, an attorney may not voluntarily withdraw as counsel in the advocate-witness situation if to do so would cause substantial hardship to the client.

175

§4.7


Problem

Withdrawal may not be in the client's best interests, and the attorney may be ethically required to resist the disqualification motion and attempt to act as both lawyer and witness. Unless the attorney can allege in good faith that her testimony will be on an uncontested matter, 14 she must rely on the substantial hardship exception of the Code or Model Rules. IS In a Code jurisdiction, it will be necessary to argue that there is something distinctive about the lawyer (or the firm) that makes her uniquely qualified to handle the litigation." ABA Formal Opinion 339 provides the following examples: [VV]herea complex suit has been in preparation over a long period of time and a development which could not have been anticipated makes the lawyer's testimony essential, it would be manifestly unfair to the client to be compelled to seek new trial counsel at substantial additional expense and perhaps to have a delay of the trial. Similarly, a long or extensive professional relationship with a client may have afforded a lawyer or a firm such an extraordinary familiarity with the client's affairs that the value to the client of representation by that lawyer or firm in a trial involving those matters would clearly outweigh the disadvantages of having the lawyer or a lawyer in the firm testify to some disputed and significant issue.!?

Courts have generally construed the Code's substantial hardship provision narrowly, requiring a showing of hardship beyond that which inevitably accompanies forced substitution of counsel. 18 The Model Rules, however, eliminate the requirement that the hardship to the client be caused by the "distinctive value" of the lawyer.The Model Rules thus permit an equitable balancing in which cost and inconvenience may I4Model Rule 3. 7(a)(I); DR 5-101(B)(I). DR 5-101(B)(2) provides in addition that an attorney may act as advocate in a case in which she will testify "solely as to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony." This exception adds little, if anything, to the "uncontested" exception. Wydick, supra §4.1 note 3, at 669-670. 15DRs 5-101(B)(4), 5-102(a); Model Rule 3.7(a)(3). 16DR 5-101(B)(4). 17ABAFormal Op. 339 (1975). I8General Mill Supply Co. v. SCA Servs., Inc., 697 F.2d 704, 713 (6th Cir. 1982); Draganescu v. First Natl. Bank of Hollywood, 502 F.2d 550 (5th Cir. 1974), cert. denied, 421 U.S. 929, 95 S. Ct. 1654,44 L. Ed. 2d 86 (1975); Supreme Beef Processors v. American Consumer Indus., 441 F. Supp. 1064, 1069 (N.D. Tex. 1977); United States ex reI. Sheldon Elec. Co. v. Blackhawk Heating and Plumbing Co., 423 F. Supp. 486 (S.D.N.Y 1976).

176


Problem

§4.8

warrant denial of the disqualification motion.'? The advocate-witness must, of course, be willing to turn the litigation over to a partner or an associate. By rejecting vicarious disqualification in this context, the drafters provided the obvious solution to the attorney in a group practice: If you know you will be required to testify, the litigation must be turned over to someone else in the firm; if you are unsure whether you will be a necessary witness, you must prepare cocounsel to take over without delay. There is no need, however, to foresee the unforeseeable. In United States v. West) 20 an assistant prosecutor saw the defendant signaling a witness who was having difficulty identifying a photograph. The prosecutor was the only person who saw the act, and she asked to testify.While the court relied primarily on the fact that the witness was not taking an active part in the trial;" the case is a paradigm of the unexpected: The prosecutor's testimony should have been received even if she had been actively involved. By contrast, the need to impeach a witness from whom a statement has been taken is rarely completely unexpected. Courts should not excuse lawyers who claim surprise when a witness changes a story.22

§4.8

The Hearing-Attorney for the Client

as Witness

Assume that before trial the opponent files a disqualification motion on the ground that the attorney will testify for his client on a contested matter. The court should hold a timely hearing to ascertain the probability of the attorney testifying and then decide whether the attorney should be required to step aside as trial counsel. While disqualification orders are not immediately appealable, 1 the court should conscien19Hazard and Hodes, supra §4.2 note 2, §3.7:300. 2°680 F.2d 652 (9th Cir. 1982). 21Id. at 654-655. 22Waltzer v. Transidyne Gen. Corp., 697 F.2d 130 (6th Cir. 1983); United States v. Vereen, 429 F.2d 713 (D.C. Cir. 1970); see the discussion in §4.5. §4.8 IRichardson-Merrell Inc. v. Koller, 472 U.S. 424, 105 S. Ct. 2757, 86 L. Ed. 2d 340 (1985); Flanagan v. United States, 465 U.S. 259, 104 S. Ct. 1051,79 L. Ed. 2d 288 (1984); In re Mechem, 880 F2d 972 (6th Cir. 1989) (writ of mandamus will not lie; disqualification can be challenged on appeal from final judgment).

177

§4.8


tiously find the facts and enter written findings for later review by an appellate court." Since disqualification of counsel during trial is likely to cause a mistrial," a court should be alert during pretrial proceedings for any indication that an attorney is a potential witness. The court should hold a hearing, on its own initiative if necessary, to resolve the matter prior to trial. At the hearing, the attorney should be required to state whether he and his client are electing to forgo all possible testimonial use of the attorney's information. In a civil case, when the client so elects, the court should accept the decision, but caution the attorney against interjecting personal belief into questions and argument. 4 As discussed in §4.7, criminal cases require a slightly different approach because of institutional concerns that the defendant obtain a fair trial, and that a guilty verdict not be set aside on collateral review. The judge should question the accused under oath to determine her awareness of the consequences of going forward with an attorney who could testify on her behalf The court should be primarily concerned with whether the defendant's consent to the restriction of her proof is informed and voluntary" There is an argument, however, that a defendant has a constitutional right to proceed with an attorney burdened by conflict.6 The Supreme Court held in Wheat v. United States' that defense counsel may be disqualified, over the defendant's objection, if the court has a rational basis for believing that a potential conflict will ripen during trial, forcing counsel to move to withdraw and causing a mistrial. Thus, in a situation where the defense attorney appears to be an important witness for his client, the judge isjustified in refusing to accept the pretrial decision of counsel and client to proceed without the attorney's testimony. The judge should assume that the attorney may be forced during the trial to change his mind and seek permission to testify. 2Fullmerv. Harper, 517 F.2d 20 (10th Cir. 1975). 3United States v. Arrington, 867 F.2d 122 (2d Cir. 1989). 4DR 7-106(c)(3); Model Rule 3.4(e). See United States v. Prantil, 764 F.2d 548, 556 (9th Cir. 1985), for an example of an attorney inserting what he knew outside the record into his questions and argument. Also see United States v. Hosford, 782 F.2d 936, 939 (II th Cir. 1986) (warning prosecutors not to imply that they have special knowledge or insights). See discussion in Chapter 13 (closing argument). 5MacArthur v. Bank of N.Y, 524 F. Supp. 1205, 1207 (S.D.N.Y 1981). 6United States v. Garcia, 517 F.2d 272 (5th Cir. 1975); People v. Anderson, 42 Cal. Rptr. 2d 149 (Cal. App. 1995). 7486 U.S. 153, 108 S. Ct. 1692, 100 L. Ed. 2d 140 (1988).

178


Pr-obfern

§4.8

Under such circumstances, the judge would be reluctant to hold the client to a pretrial waiver because of the overriding concern that the defendant have testimony in her behalf. 8 The result would be that the attorney would testify and the court would have to wrestle with the issues of disqualification and mistrial in the middle of the trial. To avoid this result, the court should not be required to acquiesce in the pretrial decision of a defendant to waive her right to call her attorney as a witness. If the attorney refuses to state unequivocally at the pretrial hearing that he and the client are relinquishing his potential testimony, the court should proceed to the second issue-whether the attorney is to be permitted to remain in the case as a trial advocate. There are a number of questions to be answered in deciding this issue: 1. 2. 3. 4. 5. 6.

Does the case arise in a Code or a Model Rules jurisdiction? How important is the testimony? What would be the effect of disqualification on the client? Is the testimony to be given before ajury or a judge? When was the need for the testimony apparent to the attorney? Can cautionary instructions to the attorney and the jury eliminate any advantage the attorney might gain by serving in dual roles?

As discussed previously, the Code applies the concept of vicarious disqualification to the advocate-witness problem, while the Model Rules do not. Furthermore, the Model Rules liberalize the substantial hardship provision. Thus, the first question in deciding a disqualification motion is whether the jurisdiction is governed by the Code or by the Model Rules. The next question is the importance of the testimony to the client. For the attorney to have a legitimate claim to act as both advocate and witness, the testimony cannot be merely cumulative. If the prospective testimony promises little, the court would be justified in forcing the client and counsel to choose the role counsel is to play. 9 SRock v. Arkansas, 483 U.S. 44, 107 S. Ct. 2701,97 L. Ed. 2d 37 (1987); United States v. Vereen, 429 F2d 713 (D.C. Cir. 1970). 9E.g., United States v. Phillips, 519 F2d 48 (5th Cir. 1975),cert. denied, 423 U.S. 1059, 96 S. Ct. 794,46 L. Ed. 2d 649 (1976) (no abuse of discretion in denying counsel the opportunity to testify because the testimony was cumulative); Model Rule 3.7, Comment [4J, which lists the importance of the prospective testimony as a factor to be considered.

179

§4.8

The Advocate-Witness Problem.

The court must also consider the effect of disqualification on the client. In a Code jurisdiction, it is likely that the client would have to hire additional counsel because the partners and associates of the attorney-witnesswill fall victim to vicarious disqualification. The judge's attitude toward the substantial hardship exception will decide the issue. While some courts have "evidenced sympathy for the client's position in the advocate-witness situation and employed the substantial hardship exception to safeguard it,"!" others limit the exception to situations where the lawyer's services could not be duplicated. II Such an approach dooms a plea based on the cost, delay, and inconvenience of hiring a new firm. The fourth question is whether the testimony is to be given before a jury or a judge. The rationale for the advocate-witness rule is that "it may not be clear whether a statement by an advocate-witness should be taken as proof or as an analysis of the proof." 12 Professors Hazard and Hodes add that the opposing party's interest is akin to that protected by the rule "which forbids an advocate from voicing personal opinions about the merits of a cause. The rule prevents mixing of advocacy and testimony." 13 That rationale loses force when the trier of fact is a judge, for a judge can usually separate evidence from rhetoric. The attorney may be confounded by the dual roles;!" but that is insufficient reason to disqualify over the client's objection if there is no realistic chance of prejudicing the opponent or confusing the trier of fact. On the other hand, a judge required to pass on the credibility of an attorney is in a difficult position. The judge's ruling, however it goes, may create the appearance of favoritism. In United States v.Johnson, 15 the court held that the advocate-witness rule applied to a contested preliminary matter I°Note, supra §4.1 note 2, at 1383 (discussing cases). "See Wydick, supra §4.1 note 3, at 672-673. United States ex rel, Sheldon Electric Co. v. Blackhawk Heating and Plumbing Co., 423 F. Supp. 486, 490 (S.D.N.Y 1976), is perhaps the most notorious example of judicial insensitivity to the effect of disqualification on the client. The firm was disqualified on the eve of trial in spite of its ten-year association with the plaintiff and the investment of 450 hours on the case. 12Model Rule 3.7, Comment [2]. 13Hazard and Hodes, supra §4.2 note 2, §3.7:103. 14Cf Enker, supra §4.1 note 6, at 463-464. "This distinction between the two roles of advocate and witness is essential to enable the lawyer to maintain independence from his client while advocating his cause." 15690 F.2d 638 (7th Cir. 1982) (suppression hearing; no disqualification because it appeared that defense counsel had tricked the prosecutor into becoming a percipient witness).

180


Probfem

§4.9

because a ruling on the credibility of the advocate-witness would affect the perception of fairness of the proceedings. 16 A fifth question is foreseeability. In an equitable balancing of the interests, "[iJt is relevant that one or both parties could reasonably foresee that the lawyer would probably be a witness." 17 If the problem was obvious at an early stage, a court is likely to find that the client created her own dilemma by proceeding with an attorney burdened with conflict, As the court stated in General Mill Supply Co. v. SCA Services) [nc., "We do not think [the substantial hardship exception] was meant for a case where a possible disqualification dilemma was visible years before it arose, yet the parties went right on increasing the helpless dependence of client upon lawyer." 18 However, a problem that surfaces just prior to trial should receive sympathetic treatment. Foreseeability should cut both ways. An unjustified delay in moving to disqualify should be cause for denying the motion or for granting the motion on condition that the movant share the cost of disqualification. 19 Finally, the court should ask whether prejudice to the movant can be eliminated by cautionary jury instructions and supervision of crossexamination and summation. Professors Hazard and Hodes opine that a solo practitioner who has been with the case from the beginning "should be disqualified only if other measures (such as a special instruction to the jury) are insufficient to protect the other party's interests.t' specifically prohibiting the practice of secreting witnesses. This omission might lead attorneys in a Rules jurisdiction to conclude that their ethical obligations are bounded by the criminal statutes, a crabbed view not likely to be shared by the courts. Neither the Code nor the Model Rules have anything to say on two matters of great interest to the public and bar: documents received by mistake" and tape-recording without the knowledge of one of the parties to the conversation." On those topics, lawyers must refer to their state ethics opinions and (hopefully) to books of this sort. The Code and Model Rules do contain provisions regulating communications with represented parties," but there is great uncertainty over contacts with employees of organizations. We deal with this issue, and the parallel question of contacting experts, in §§5.4 and 5.6. Model Rule 8.3 forbids conduct involving "dishonesty, fraud, deceit, or misrepresentation,"? and Model Rule 4.4 requires lawyers to respect the "legal rights" of others in obtaining evidence. 10 In §§5.7 and 5.9, we discuss deceit and intimidation in investigation. Both the Code and the Rules prohibit circumvention of the rules through the use of agents.'! In addition, Model Rule 5.3 expressly requires supervising lawyers to make reasonable efforts to ensure that 2DR 7-106(A)(6); Model Rule 3.4(b). 3DRs 1-I02(A)(2), 7-102(A)(7); Model Rules 8.4(a), 5.3. 4DR 7-109(A); Model Rule 3.4(a). 5DR 7-109(B). 6See §5.3. 7See §5.8. 8DR 7-104(A)(2); Model Rule 4.2. 9DR 1-102(A)(4) is the same. IODR 7-102(A)(I) is substantially the same. IIDR 1-102(A)(2); Model Rule 8.4(a).

191

§5.2

Investigation

employees and agents act consistently with the Rules of Professional Conduct. 12 There is no direct counterpart to Rule 5.3 in the Code, but it can be argued that a lawyer in a Code jurisdiction should be both legally and ethically accountable for the foreseeable acts of an "independent" investigator. Furthermore, some groups of investigators have their own ethical standards. For example, the Code of Ethics adopted by the National Association of Legal Investigators provides that the investigator: will not knowingly violate any right or privilege of any individual citizen which may be guaranteed or provided by the United States Constitution, any state constitution, or the laws of the state and federal governments or any subdivision thereof [section 4]; and ... will not suggest, condone or participate in any fashion or degree, for any purpose whatsoever, m entrapment [section 7].13

These standards notwithstanding, the public probably assumes that investigators and lawyers routinely deceive and lie, cheat and steal, break and enter, all in the name of zealous representation. This is a Hollywood image, fostered by television shows like L.A. Law and movies like Class Action and The Verdict. In the latter film, the hero, a shameless alcoholic, solicited his client in a funeral home, stole mail, was totally unprepared for trial, and still bungled his way to victory, winning in spite of a defense strategy that included falsifying documents and planting a seductive spy in the plaintiff's camp. Presumably, the audience believed that the lawyers were just zealously representing their clients. There have been, of course, cases from which The Verdict might have been drawn. In Gregori v. Bank qf Amenca.w a lawyer bedded the opposing firm's secretary, perhaps for the confidential information she possessed. While describing the situation as "an unattractive satire of the current state of our justice system where a win at any costs philosophy 12Model Rule 5.3(b). The lawyer is, of course, responsible if the lawyer orders or ratifies the conduct. Model Rule 5.3(c). Compare G. Hazard,jr., and W. Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct §5.3:400 (2d ed. 1990) (lawyer may not entrap divorce litigant, and supervisory lawyer may be responsible for investigator's entrapment of divorce litigant under Model Rule 5.3(a)). Cf. Tennessee Bar Assn. v. Freeman, 50 Tenn. App. 567, 362 S.W.2d 828 (1961) (involving intrusion and entrapment); State v. Harrington, 128 Vt. 242, 260 A.2d 692 (1969). 13Quoted in A. Golec, Techniques of Legal Investigation 27 (1976). 14207Cal. App. 3d 291, 254 Cal. Rptr. 853 (1989).

192

Investigation

§5.3.1

[prevails]," the court refused to disqualify the lawyer because he did not learn anything of value. 15 By way of contrast, in Kearns v. Ford Motor Co., 16 the court took appropriate action. In that case, the private investigator/ son of the plaintiff struck up a relationship with an employee of the opponent's law firm in order to purloin privileged documents from the opponent's file. When this came to light during protracted discovery proceedings, the trial judge imposed a $10,000 sanction against the plaintiff.

§5.3

The Misaddressed Fax and the Purloined Letter

§5.3.1

The Misaddressed

Fax

In Formal Opinion 92-368, the ABA Standing Committee on Ethics and Professional Responsibility opined: A lawyer who receives materials that on their face appear to be subject to the attorney-client privilege or otherwise confidential, under circumstances where it is clear that they were not intended for the receiving lawyer, should refrain from examining the materials, notify the sending lawyer and abide the instructions of the lawyer who sent them. I

The opinion is sensible. However, its conclusion is not self-evident, since there are no provisions of the Model Rules or the Code that directly address the issue. The Committee reasoned as follows: (1) Protection of client confidences is of paramount importance under the Model Rules; (2)inadvertence does not necessarily waive the attorney-client privilege; (3) the law of personal property creates a gratuitous bailment requiring the return of property sent by mistake; and (4) the obligation to zealously represent one's client does not require, or even allow, a lawyer to take advantage of an opponent's "clerical" rnistake.? The opinion 15Id.at 299, 254 Cal. Rptr. at 858. 16114 ER.D. 57 (E.D. Mich. 1987). §5.3 1ABA Formal Op. 92-368 (1992). "The Committee relied in part on ABA Informal Opinion 86-1518 (1986), which is to the effect that a lawyer who realizes his opponent has committed a clerical error in a

193

§5.3.1

Investigation

applies both to the lawyer who is aware of the mistake before reading the document (perhaps because of the cover sheet) and to the lawyer who recognizes, or is notified of, the mistake during or after reading. In the latter case, the lawyer is to cease reading, notify the opponent, return the document on request, and make no further use of it. The opinion requires actual knowledge on the part of the receiving lawyer; there is no ethical breach if the receiving lawyer negligently fails to recognize the mistake. Of course, a lawyer may not put on blinders to avoid knowledge. The issue often surfaces in the context of a claim that the sending lawyer's mistake waived the attorney-client privilege or, less frequently, the work product privilege. The traditional view, espoused by Wigmore, is that inadvertent disclosure waives the privilege." This conclusion follows from Wigmore's view that privileges should be narrowly construed. Wigmore, in fact, contended that an eavesdropper should be permitted to testify to a conversation between attorney and client, even though reasonable precautions were taken to prevent the conversation being overheard." The traditional view has been termed the "strict" test, one that finds waiver without fault. 5 On the other hand, some courts require intent to disclose, which has been termed the "lenient" test." Under this view, an accidental disclosure, even if negligent, will not waive the privilege. The middle-ground approach focuses on the precautions taken by the client and the lawyer.? Negligence will waive the privilege. This approach was adopted in the proposed Restatement" and probably is followed by a majority of courts. A 1993 analysis of federal decisions contract has no obligation to notify his client of the error-e-such a matter is one for correction by the lawyers. 38]. Wigmore, Evidence §2325 (McNaughton ed. 1961). 'Id. §2326. sHarding, Waiver: A Comprehensive Analysis of a Consequence of Inadvertently Producing Documents Protected by Attorney-Client Priviledge, 42 Cath. UL, Rev. 465, 472 (1993). 6Id. at 471 (citing a number of cases, including Mendenhall v. Barber-Greene Co., 531 F. Supp. 951 (N.D. Ill. 1982), and Kansas-Nebraska Natural Gas v. Marathon Oil Co., 109 F.R.D. 12 (D. Neb. 1983). 7Bud Antle, Inc. v. Grow-Tech, Inc., 131 F.R.D. 179 (N.D. Cal. 1990) (factors include precautions, time to fix error, scope of request, extent of disclosure, fairness); Harding, supra note 5, at 464. 8Restatement of the Law Governing Lawyers §129, Comment i (Tentative Draft No.1, 1989).

194

Investigation

§5.3.1

counted 12 districts on record as adopting the strict test, 4 on record as embracing the lenient test, and 14 on record as favoring the middle ground.? ABA Formal Opinion 92-368 assumes that the middle standard is the better and dominant approach. The opinion rejects the Wigmore view, which is hostile to privileges, because the Model Rules of Professional Conduct view the attorney-client privilege positively. In a jurisdiction following Wigmore's strict standard of waiver, an ethics committee might conclude that there is no ethical impropriety in reading a misaddressed document. The District of Columbia federal courts follow Wigmore.'? Rather than fully accepting the implications of the Wigmore position, however, the District of Columbia Ethics Committee followed ABA Formal Opinion 92-368 in the situation where the lawyer is aware of the mistake before reading the materials. 1 1 The committee reasoned that there has been no disclosure until the lawyer reads the document, and, hence, the lawyer should not take advantage of the opponent's mistake. The committee offered the analogy of a briefcase left in an opposing lawyer's office. Noone would think that the act of leaving the briefcase discloses the contents, and the committee reasoned that the situation is no different when the cover sheet of a fax or the name on an envelope clearly shows that a document has been missent. In such a situation, the receiving lawyer should refrain from reading the document and ask the sending lawyer for instructions. The D.C. committee parted company with the ABA, however, on the obligation of a lawyer who reads a document and subsequently learns that it was sent by mistake. ABA Formal Opinion 92-368 states that on learning (by notification or recognition) that the document was sent by mistake, the lawyer should quit reading, return the document, and make no further use of it, "for example, as a basis for questions at trial." District of Columbia Ethics Opinion 229, on the other hand, says that a lawyer may (and in representing a client might be obligated to) use a document read before the lawyer learns it was misaddressed." The committee reasoned that under prevailing law the privilege was "Harding, supra note 5, at 507. lOIn re Sealed Case, 877 E2d 976 (D.C. Cir. 1989); Wichita Land and Cattle Co. v. American Fed. Bank, 148 ER.D. 456 (D.D.C. 1992). IID.C. Ethics Op. 229 (1995).

12Id.

195

§5.3.1

Investigation

lost when the document was read.l" and that a lawyer cannot forget what he learned when he read the document in good faith. ABA Formal Opinion 92-368 merely states an ethical precept; it does not purport to state a rule on which discipline may be based. This is appropriate, for neither the disciplinary rules nor the statutes impose a legal duty to return unread documents received by mistake. In AerojetGeneral Corp. v. Transport Indemnity Insurance) 14 the California appellate court reversed the imposition of sanctions on an attorney who read confidential documents mistakenly mailed to him. The court stressed the absence of rules and statutes proscribing such conduct. 15 As noted in the ABA opinion, however, it makes good sense to refrain from reading that which you know was not meant for your eyes. If you have already read the document, it makes good sense to notify your opponent and return the document. While it is unlikely that the use of missent documents will lead to discipline, such use may result in a motion to disqualify, which may turn on the court's resolution of the issue of waiver of the privilege. 16 The last point in ABA Formal Opinion 92-368 is that civility, good sense, and reciprocity weigh strongly in favor of returning unread all missent documents, from whatever source, whether privileged or not, without regard to the jurisdiction's view on waiver. The analogy to a drafting error in a contract is persuasive. In that context, if the parties reach an agreement and the attorney drafting the contract makes a drafting mistake in favor of the other party, the other party's attorney has no obligation to inform his client of the error because the client has no right to sign a document that does not reflect the parties' agreement." In other words, an attorney's obligation to his client does not include telling the client about an opponent's mistake if the client has no right to take advantage of the mistake. Like the ABA informal opinion on drafting errors, ABA Formal Opinion 92-368 provides "cover" for a lawyer to do the "right thing"-that is to return the documents unread without giving the client a say in the matter. Clients have no legitimate expectation that their lawyers will read missent documents, '3In re Sealed Case, 877 F.2d 976. 1418Cal. App. 4th 996, 22 Cal. Rptr. 2d 862 (1993). ISId. at 1003, 22 Cal. Rptr. 2d at 865. '6Resolution Trust Corp. v. First Am. Bank, 868 F. Supp. 217 (WD. Mich 1994) (no disqualification because the attorney did not read the documents). 17ABAInformal Op. 86-1518 (1986).

196

Investigation

§5.3.1

and perhaps the value of the ABA opinion is to discourage lawyers from allowing their clients to make the call on this issue. The Purloined Letter and Other Misappropriation Lawyers who receive stolen documents risk discipline, disqualification, and criminal prosecution. ABA Formal Opinion 94-382 is the opinion in point. The opinion is consistent in tone and conclusion with ABA Formal Opinion 92-368. ABA Formal Opinion 94-382 states that a lawyer should not take documents (on an unauthorized basis) that the lawyer recognizes as privileged or confidential. If the documents have been received before it becomes clear that they came from an unauthorized source, the lawyer should notify the apparent rightful possessor of the documents and either abide by that person's instructions or seek guidance from the court. 18 When the receiving attorney believes he has a right to the documents-for example, documents wrongfully concealed in discovery-the attorney may retain the documents and ask for a court ruling. Like the earlier opinion on missent materials, ABA Formal Opinion 94-382 does not purport to require the return of documents to the rightful owner. It states an ethical, but not a legal, obligation. Furthermore, by focusing on the protection of confidences, ABA Formal Opinion 94-382 implies that a lawyer does nothing wrong by receiving stolen documents that are not confidential. That implication is plainly wrong. If a document is stolen, it does not matter whether it is confidential or not. There is a strong argument that attorneys should be required, with regard to all documents, to follow the normative conduct set out in ABA Formal Opinion 94-382. In the first place, the documents may be stolen, and an attorney taking and keeping such property would be a receiver of stolen property. Second, there is a strong possibility that the documents were secured by illegal conduct, perhaps by improper access to a computer. 19 Third, attorneys' reputations can be shattered by accusations of collusion in devious and improper conduct. 20

IBABAFormal Op, 94-382 (1994). 19E.g.,Ky. Rev. Stat. Ann. §434.850 (1984) (misdemeanor). 2°Rentclub, Inc. v. Transamerica Rental Fin. Corp., 811 F. Supp. 651 (M.D. Fla. 1992) (disqualifying lawyer on grounds he solicited confidential information).

197

§5.3.1

Investigation

Remarkably, some ethics opinions'" and cases-? are to the effect that a lawyer can keep and use confidential information appropriated by an apparently unauthorized person-and even use this information without informing the rightful owner. It may be that such opinions rest on the distinction between originals and copies-a belief that it is wrong to receive an original document from an unauthorized person, but permissible to take a photocopy of an original. 23 Whatever the law of theft in the jurisdiction, however, lawyers' ethical responsibilities should not depend on a reed as slender as the distinction between an original and a copy. Furthermore, lawyers should warn clients and investigators not to steal or "borrow" documents for copying. 24

§5.4

Conununicating With Represented Parties

Both the Code and the Model Rules contain provisions designed to minimize deception, subterfuge, and overreaching when a lawyer deals with third persons. In the event that the third person is represented by counsel, both codes provide an additional prophylactic rule to the effect that that person's counsel may not be bypassed. Specifically, the rules provide: During the course of his representation of a client a lawyer shall not: (1) Communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so [DR 7-104(A)J. In representing

a client, a lawyer shall not communicate

ject of the representation sented by another

about the sub-

with a person! the lawyer knows to be repre-

lawyer in the matter

unless the lawyer has the

consent of the other lawyer or is authorized

by law to do so (Model Rule

4.2). 21Md. Op. 89-53 (1989); Mich. Bar Assn., Op. CI-970 (1983). 22Sequa Corp. v. Lititech, Inc., 807 F. Supp. 653 (D. Colo. 1992). 23Md. Op. 89-53 (1989). 24Lipin v. Bender, 84 N.Y2d 562,644 N.E.2d 1300,620 N.YS.2d 744 (1994) (suit dismissed because plaintiff stole defense documents). §5.4 'Hazard and Hodes, supra §5.2 note 12, §4.2:100.

198

Investigation

§5.4

The purpose of the rules is to prevent a lawyer from "nullifying the protection a represented person [achieves] by retaining counsel'v-sprotection from both deception and overreaching. By prohibiting unconsented contacts, the rules offer a represented person the opportunity to speak or not speak, and to obtain the assistance of counsel during an interview, in order to avoid damaging his position (e.g., by making admissions or declarations against interest or entering into an imprudent compromise). Indeed, this principle is so basic that it has been incorporated into the 1982 Conference Report on Fair Insurance Claims Adjustment, drafted by the National Conference of Lawyers, Insurance Companies, and Adjusters. Section 2(a) of that document provides in part: The companies or their representatives should not deal directly with any claimant known to be represented by an attorney without the attorney's knowledge.

Section 2(b) adds that "the company or its representative should not advise a claimant to refrain from seeking legal advice." Violation of the no-contact rule should ordinarily result in suppression of any statement obtained thereby. In Bruske v. Arnold) 3 plaintiff attempted to offer into evidence defendant's statement to a private investigator. The statement was taken without notice to counsel, at defendant's home, and was procured by leading questions. Relying on DR 7-104(A)(1), the trial judge prohibited use of the statement for any purpose.' In addition to suppression, a court can censure or otherwise sanction an attorney who violates the no-contact rule..) 2In 1995, the ABA House of Delegates amended Model Rule 4.2 by substituting "person" for "party." The amendment makes it clear that the no-contact rule does not require that the represented person be a "party" to litigation. 344 Ill. 2d 132, 254 N.E.2d 453 (1969). "Accord Trans-Cold Express, Inc. v. Arrow Motor Transit, Inc., 440 F.2d 1216 (7th Cir. 1971); Obser v. Adelson, 96 N.YS.2d 817 (Sup. Ct. 1949) (statement obtained from minor ward, without knowledge of guardians or counsel). But see Martin v. County of Monroe, 115 A.D.2d 990, 497 N.YS.2d 553 (1985) (court erred in precluding introduction of evidence based on alleged violation of Code); Note, Policing Attorneys: Exclusion of Unethically Obtained Evidence, 53 U. Chi. L. Rev. 1399 (1986) (recommending exclusion as a remedy). 5United States v. Santiago-Lugo, (D.C.P.R. Crim 95-029 June 6, 1995) 11 ABAI BNA Current Reports 192 (1995) (suppression of statement, order forbidding any use of information, public censure).

199

§5.4

Investigation

The use of the word parry in DR 7-l04(A) and pre-1995 Model Rule 4.2 is problematic because it allows an interpretation that would protect represented persons only after suit is filed and they become "parties." A 1995 Second Circuit case followed this reasoning," and the ABA responded by amending Model Rule 4.2 by substituting "person" for "party"? The Second Circuit's interpretation would undermine the purpose of the no-contact rule, since most unauthorized contacts occur before suit is filed. Hopefully, states will follow the ABA opinion, through either amendments to their rules or opinions by their ethics committees. Is it permissible for a lawyer to encourage the client to contact the opposing party directly? An early ABA opinions fulminated against such contact, but it is now generally conceded that the rules do not prohibit such contacts." Somewhat cryptically the ABA/BNA Lawyers Manual in Professional Conduct warns against using a client to bypass the no-contact rule.'? Most lawyers would presumably agree that, except in structured settings such as mediation or settlement conferences, direct client-to-client communications tend to be counterproductive. §5.4.1

Contacts with Gouernrnent Officials When the Gouernrnental Agency Is Represented by Counsel

Both the Code and the Model Rules contain an exception to the general rule against bypassing counsel-that is when the conduct is authorized by law. This is an important exception when one is dealing with government agencies. The attorney may have a legal right to seek redress on behalf of her client from a governmental decision maker. This right should not be compromised by a rule denying direct access unless government counsel consents. 1 The District of Columbia version 6Grievance Comm. for the S. Dist. of N.Y v. Simels, 48 F.3d 640 (2d Cir. 1995). "The amendment is discussed in 57 Crim. L. Rptr. 1455 (Aug. 16, 1995). sABA Formal Op. 75 (1932), withdrawn by ABA Formal Op. 84-350 (1984). 9ABA Formal Op. 84-350 (1984); Model Rule 4.2, Comment [I]; see also ABA Formal Op. 92-362 (1992) (lawyer cannot bypass counsel, but client can). IOLaw.Man. Prof. Con. ~71:303. §5.4.1 'Burkland v. Hackett, 575 S.W2d 389 (Tex. Civ. App. 1978) (request for open records does not violate DR 7-104(A)(1)); Model Rule 4.2, Comment [I].

200

Investigation

§5.4.2

of Model Rule 4.2 provides that a lawyer may communicate directly with a governmental official who has the authority to redress the grievance of the lawyers' client, even if the matter is in litigation." The note explains that this provision is intended to allow direct access "to present the view that the government's basic policy position with respect to a dispute is faulty or that the government personnel are conducting themselves improperly," but does not permit bypass of government counsel on routine litigation matters. 3

§5.4.2

The "Reno Regulations"

Department of Justice regulations governing contacts with represented persons became effective on September 6, 1994.1 The regulations allow "attorneys for the government"2 to contact represented persons in the investigative stage of a criminal case. The constitutional right to counsel attaches at the commencement of adversary proceedings, which is defined as the filing of the complaint or return of indictment.? Prior to that point, it is constitutionally permissible to solicit incriminating statements from a target defendant. Usually, this is accomplished by tricks-e-an undercover agent or a listening deviceand it would frustrate law enforcement agencies to allow a target to protect himself by informing the agencies that he is represented by counsel in the matters under investigation. The Reno regulations allow prosecutors to advise and supervise legitimate law enforcement activities. The crux of the regulations is a distinction between the investigative stage, when contacts are permitted, and the prosecutorial stage, when contacts are generally forbidden." In the investigative stage, the individual is referred to as a 2D.C. R. Prof Con. 4.2(d). 3Id. at Comment [7]. §5.4.2 128 C.F.R. part 77, 59 Fed. Reg. 39910 (Aug. 4,1994). 2Defined as United States attorneys and certain attorneys in law enforcement agencies. 28 C.F.R. §77.2. 3Maine v. Moulton, 474 U.S. 159, 106 S. Ct. 477, 88 L. Ed. 2d 481 (1985). "Misrepresenting one's identity or purpose does not violate due process. Statements are not made involuntary because they are procured by trick. E.g., United States v. White, 401 U.S. 745,91 S. Ct. 1122,28 L. Ed. 2d 453 (1971). 528 C.F.R. §77.6 (the regulation provides that at the prosecutorial stage the person may be brought before a magistrate if he wants to talk with a prosecutor and does not want his lawyer to know of the conversation).

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"represented person"; in the prosecutorial stage, the reference is to "represented party."6 The Reno regulations purport to be consistent with the Code and Model Rules because DR 7-104(A)(1)and Model Rule 4.2 exempt contacts "authorized by law." While there is authority to the contrary, 7 most courts agree with the Department of Justice position and hold that investigative stage contacts with represented individuals are proper. 8 Two Ninth Circuit cases illustrate the difference between investigative stage and prosecutorial stage contacts: United States v. Lopez,9 holding that a prosecutor acted improperly in contacting an indicted defendant, who was eager to plead, but afraid to so inform his lawyer; and United States o. Powe,lo ruling that contacts during an undercover investigation do not violate the rule. The Reno regulations (and their predecessor, the "Thornburgh memo") have been controversial, primarily because they seek to regulate a subject traditionally left to state courts-the regulation and discipline of lawyers. At its summer 1994 meeting, the 50 state chief justices voted unanimously to condemn the regulations on grounds of federalism and separation of powers. II The ABA also voiced its opposition, calling the regulations a "disturbing arrogance of power." 12 At the summer 1995 meeting, however, the ABA added the following comment to Model Rule 4.2: [2J Communications authorized by law also include constitutionally permissible investigative activities of lawyers representing governmental entities, directly or through investigative agents, prior to the commencement of criminal or civil enforcement proceedings, when there is applicable judicial precedent that has either found the activity permissible under this Rule or has found the Rule inapplicable. However, the Rule imposes ethical obligations that go beyond those imposed by constitutional provisions. 628 C.F.R. §77.3. 7United States v. Hammad, 858 F.2d 834 (2d Cir. 1988). 8Grievance Comm. for the S. Dist. of NY v. Simels, 48 F.3d 640 (2d Cir. 1995); United States v. Ryan, 903 F.2d 731 (10th Cir. 1990); In re Disciplinary Proceedings (Doe), 876 F. Supp. 265 (M.D. Fla. 1994); United States v. Marcus, 849 F. SuPP. 417 (D. Md. 1994). 94 F.3d 1455 (9th Cir. 1993). 109F.3d 68 (9th Cir. 1993). llState Court Chiefs Flex New Muscle, Nat!. Lj., Oct. 17,1994, at A26. '2Questioning New DO] Rule, 80 A.B.A.]. 101 (Oct. 1994).

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This strange comment recognizes that undercover operations are constitutionally permissible, but allows prosecutorial participation in such operations only if there is "applicable judicial precedent," holding that prosecutors are authorized to do so. The comment states that the rule imposes ethical obligations going beyond constitutional provisions, but does not say what the additional obligations are. The comment amounts to a grudging acknowledgment that courts are unwilling to suppress evidence gained through contacts with represented persons.

§5.4.3

Present Employees

Disciplinary Rule 7-104 and Model Rule 4.2 were designed to protect a represented person from the knowledge and skill of another's lawyer. However, there may be persons who are not personally represented by a lawyer, but who are so closely associated with a represented person or entity that they fall within the no-contact rule. One question that has provoked a variety of responses from courts and bar committees is whether an attorney or investigator may contact an organization's employees without the consent of the organization's counsel. As in the case of the waiver doctrine discussed in §5.3, there has been a variety of responses to the question: 1. All employees and officers are shielded. I 2. Present employees and officers are shielded from contact if their acts can be imputed to the organization for purposes of liability or their statements would constitute evidentiary admissions of the organization.? 3. Present employees and officers are shielded from contact if their acts or omissions are binding on the corporation, or if they implement the advice of corporate counsel (the "alter ego" test). 3

§5.4.3 'New York County Lawyers' Assn. Op. 528 (1965), cited in Wright by Wright v, Group Health Hosp., 103 Wash. 2d 192,691 P.2d 564 (1984). 2Model Rule 4.2, Comment [2], which adopts by reference the evidentiary rules for vicarious admissions. The federal rule in point is Federal Rule of Evidence 80 1(d)(2)(C), (D); e.g., Instituform of N. Am., Inc. v. Midwest Pipeliners, Inc., 139 FR.D. 621, 625 (S.D. Ohio 1991). 3Niesig v. Team I, 76 N.Y2d 363,558 N.E.2d 1030, 559 N.YS.2d 493 (1990) ("alter ego" test); State v. CIBA-GEIGY Corp., 247 NJ. Super. 314, 589 A.2d 180 (App. Div. 1991).

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4. Present employees and officers are shielded from contact if they have power to "bind the corporation" on the matter that is the subject of inquiry (the "managing speaking agent" test)." 5. Only officers who speak for the corporation are shielded from contact (the "control group" test).' The various approaches confuse "binding" the organization in a substantive law sense (in a contract, for example) with making statements that are admissible against the organization in an evidentiary sense, but that can be disputed by the organization and hence do not "bind" it." Comment [2J to Model Rule 4.2 would extend the nocontact rule to any employee whose statement would be admissible against the organization. This extension dramatically increases the number of off-limits employees in jurisdictions accepting the rationale of Comment [2J. It has been contended that any employee who may have communicated with corporate counsel should be off-limits in order to protect the attorney-client privilege. This contention was properly rejected by the Washington Supreme Court in Wright by Wright v. Group Health Hospital. 7 The court began by noting that the privilege protects only communications and not underlying facts known to a client or client's employee. The court added that this concept was reaffirmed in Upjohn Co. o. United States,8 which extended the privilege in appropriate circumstances to lower-level employees not in a "control group." The Upjohn Court stated: [T]he protection of the privilege extends only to communication and not to facts. A fact is one thing and a communication concerning that fact is an entirely different thing. The client cannot be compelled to answer the question, "What did you say or write to the attorney?" but may not refuse to disclose any relevant fact within his knowledge merely

4Wright qy Wright, 691 P.2d 564. 5Fair Automatic Repair, Inc. v. Car-X Servo Sys., Inc., 128111. App. 3d 763, 471 N.E.2d 554 (1984). 6 Wright qy Wright, 691 P.2d at 569 ("bind the corporation in a legal evidentiary sense").

7103 Wash. 2d 192,691 P.2d 564 (1984). 8449 U.S. 338, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981).

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because he incorporated a statement of such fact into his communication to his attorney?

The Washington court adopted the view that current employees should be considered "parties" for the purpose of DR 7-104(A)(I) only when they have legal authority to "prejudice the entity's interest." While Group Health is correct in noting that both the attorney-client privilege and the disciplinary rules share the neutral goals of "furthering the attorney-client relationship," the policies represented by the two rules are different. In enunciating a flexible "control group" test the Upjohn Court was expanding the definition of "clients" so the laudable goals of the attorney-client privilege would be applicable to a greater number of corporate employees. The purpose of the disciplinary rule, on the other hand, is to protect the corporation so its agents who have the authority to prejudice the entity's interest are not unethically influenced by adverse counsel. 10

In the abstract, this reasoning is sound. As the ABA's Reporter on the Model Rules has observed, Upjohn "provides some guidance, but not a solution . . . [indeed] the Court made clear that its rulings on the privilege question would not prohibit the opposing party ... from either interviewing or deposing the employees." II In addition, it is unrealistic to assume that the interviewer will know in advance which employees may have been party to statements within the attorney-client privilege. On the other hand, in jurisdictions taking a liberal view of vicarious admissions similar to that contained in Federal Rule of Evidence 80 1(d)(2)(D), the list of off-limits employees may be extensive to say the least. Indeed, it may be that no employee may be contacted if the information sought relates to a matter within the scope of that person's employment. 12

9Id. at 395-396, 101 S. Ct. at 685-686, 66 L. Ed. 2d at 572. 1°691 P.2d at 570. IIHazard and Hodes, supra §5.2 note 12, §4.2: 106. 12Instituform of N. Am. v. Midwest Pipeliners, Inc., 139 F.R.D. 622, 625 (S.D. Ohio 1991) ("The evident purpose of the rule is to safeguard a party's right to counsel by preventing an opposing party from obtaining uncounseled admissions from a represented party .... Thus the rule should be applied to any corporate employee whose admissions are admissible against the employer as admissions of a party under FRE 80 1(d)(2)."

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To illustrate the application of Model Rule 4.2, Comment [2] and Federal Rule of Evidence 801(d)(2), consider the following example. Acme Storage Company has four employees: Anne, president; Bob, head loader; Carl, assistant loader; and Diana, secretary. One day there is an accident on the loading dock. Pete, who was delivering goods, was injured by the alleged negligence of Bob. Carl was working on the dock and saw the accident. Diana was taking a break on the loading dock and also observed the accident. Pete's lawyer notified Acme of his intent to sue Acme for the negligence of Bob, and Acme's lawyer notified Pete's lawyer that none of the Acme employees is to be interviewed without his consent. Pete's lawyer 1. may not interview Anne without consent because Anne has managerial responsibility; she is a "speaking agent" of Acme (Fed. R. Evid. 801(d)(2)(C)); 2. may not interview Bob without consent because his act (driving the truck) may be imputed to Acme; in addition, he is an "acting agent" of Acme (Fed. R. Evid. 801(d)(2)(D)); 3. may not interview Carl without consent because he is an "acting agent" of Acme; that is, he will be asked about matters within the scope of his employment (the operation of the loading dock), and any statement he makes in that regard would be a vicarious admission of Acme under Federal Rule of Evidence 801(d)(2)(D); 4. may interview Diana without consent because it is not contemplated that Diana will be asked any questions about matters within the scope of her employment; she is an agent, but her statement about what she saw would not be admissible against Acme under Federal Rule of Evidence 80 1(d)(2)(C)or (D). In a jurisdiction following the reasoning of Comment [2], most current employees are off-limits, a fact that may frustrate investigation. This has led some courts and ethics committees to adopt narrower tests. One of the most interesting approaches is that of New Jersey, where the court limited the scope of the no-contact rule to those in the control group. In addition, the opinion requires notice, but not consent, if the attorney wishes to contact employees whose conduct may be imputed

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to the organization.P Notice, but no authority to withhold consent, is an interesting concept. It would provide access while preventing overreaching. The danger, as noted in the opinion, is that interviews with corporate counsel present might take on the trappings of a deposition. 14 Application of Comment [2J is troublesome for another reasonit is a comment and not a rule. As the New Jersey court pointed out, the proposed commentary to Model Rule 4.2 at one point in the drafting process would have followed the control group approach. 15 To allow a comment to control the scope of a rule is troublesome, particularly when the comment appears to cryptically incorporate principles drawn from rules of evidence. States should consider adopting a rule that specifies the employees who are off-limits. The District of Columbia took this approach. District of Columbia Rule 4.2(c)puts off-limits only employees who have the power to bind the organization with regard to the matter in controversy. Other employees may be contacted without consent so long as the attorney discloses her identity and the fact she represents a party with a claim against the employer. 16 This is a sensible approach and deserves consideration. 17 In response to complaints of federal prosecutors of stonewalling by corporate counsel," the "Reno regulations" adopt a control group test. The only off-limits employees are those known by the government to be participating as decision makers in the determination of the organization's legal position in the proceeding or investigation of the subject matter. 19 All others may be contacted without the consent of corporate counsel.

131nMatter of Ethics Opinion 668, 134 N]. 294, 633 A.2d 959,964 (1993). 141d.at 302-303, 633 A.2d at 963. l'ld. at 298, 633 A.2d at 961 (citing the commentary to the 1981 draft: "It does not prohibit communication with lower echelon employees .... Whether a specific employee is a representative of a client can depend on the circumstances, particularly whether the employee has significant managerial responsibility in the matter in question.") 16D.C. R. Prof Con. 4.2(b)(c). 17Fulton v. Lane, 829 P.2d 959 (Okla. 1992), and Curley v. Cumberland Farms Inc., 134 ER.D. 77 (D.N]. 1990), are fairly recent cases adopting the control group approach. 1854Crim. L. Rptr. 2200 (1994) ("Several federal prosecutors commented that they regularly encounter attorneys who assert that they represent every individual in a large corporation."); Natl. L]., Oct. 11, 1993, at 17. 1928C.ER. §77.10(a).

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In jurisdictions where the scope of the no-contact rule is unclear, to be on the safe side investigators and attorneys should assume that a court may construe the rule broadly-that is, in accord with Comment [2] to Model Rule 4.2. Consequently, they ought to ask permission from the organization's counsel if the organization is known to be represented on the matter under investigation. If the decision is made to interview without permission, care should be taken to avoid any contention of misleading or overreaching. They should not inquire into any privileged matters.i" §5.4.4

Fonner Employees

Those who urge that former employees be covered by the no- contact rule advance two arguments. The first is that if the claim against the organization is based on the act or omission of the former employee, that person fits within one of the categories in Comment [2] to Model Rule 4.2-a person whose act or omission may be imputed to the organization. I The second is that the ex-employee may have talked to corporate counsel and thus have knowledge of statements within the attorney-client privilege." To illustrate, assume that Acme Company fired Bob, whose negligence is alleged to have injured Pete. While still employed, Bob told corporate counsel what happened. If Pete's lawyer interviews Bob, he will be talking with someone whose act may be imputed to the organization and who has knowledge of a privileged communication-his statement to corporate counsel. Although there is authority to the contrary, 3 most courts" and ethics committees- have rejected these arguments and have held that 2°ABA Formal Op. 91-359 (1991), discussed in the next section. §5.4.4 'Public Servo Elec. and Gas v. Associated EIec. and Gas Ins. Serv., 745 F Supp. 1037 (D.N]. 1990) (accepting this rationale and barring contacts with former employees). 2Kitchen v. Aistech, 769 F Supp. 254 (S.D. Ohio 1991) (suppression of privileged statements obtained from ex-employee). 3public Servo Elec. and Gas, 745 F Supp. 1037. "See generally Kitchen v. Aristech Chern., 769 F. Supp. 254 (S.D. Ohio 1991); DuBois v. Gradco Sys., 136 F.R.D. 341 (D. Conn. 1991); Polycast Technology Corp. v. Uniroyal, 129 FR.D. 62 I, 627-628 (S.D.N.Y 1990); Curley v. Cumberland Farms, Inc., 134 FR.D. 77 (D.N]. 1990); E. Imwinkeiried and T. Blumhoff, Pretrial Discovery: Strategy and Tactics §4.04 (Supp. 1994). 5ABA Formal Op, 91-359 (1991); Alaska Op. 91-1 (1991).

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the no-contact rule does not apply to ex-employees. ABA Formal Opinion 91-359 cautions, however, that in such interviews there can be no deception or overreaching, and that the interviewer must not inquire into privileged matters. The opinion requires the interviewer to identify herself and tell the ex-employee that she represents a party with a claim against the former employer. If the former employee is represented by counsel on the matter in controversy, consent must be obtained before the interview takes place.

§5.5

Ex Parte Interviews with Treating Physicians

Is it permissible to attempt to interview a treating physician without the consent of the patient or the patient's attorney? Many cases involving this issue arise in the context of discovery,and we will return to the topic in Chapter 6. However, the propriety of an ex parte interview should not depend on whether suit has been filed. The primary concern should be to protect the confidential relationship between patient and doctor, and the nature of that relationship does not depend on whether or not the patient has filed suit. Nevertheless, the propriety of ex parte interviews is affected by the filing of suit in two ways, one that favors such interviews and one that cuts against them. Working in favor of such an interview is the effect of filing suit on the physician-patient privilege, if that privilege exists in the jurisdiction. By filing suit, the litigant waives the privilege with regard to information relevant to the allegations of the complaint. Working against ex parte interviews is the availability of formal discovery, which may dictate the way in which information can be obtained from physicians. 1 The Hippocratic Oath and the ethical guidelines of the American Medical Association require physicians to keep patient information confidential.2The obligation of confidentiality does not depend on the existence of an evidentiary privilege. Given the expectation that confidences §5.5 'Wenninger v. Muesing, 307 Minn. 405, 240 N.W.2d 333 (1976); Louden v. Mhyre, 110 Wash. 2d 675,756 P.2d 138 (1988); see generally cases collected in Annotation, Discovery: Ex Parte Interview, 50 A.L.R.4th 714 (1986). 2Principle IV of the AMA Principles on Medical Ethics, cited in Louden, 756 P.2d at

138.

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will be maintained, it is not surprising that most courts disapprove ex parte interviews. Among the reasons cited are "patients' right of privacy, physicians' ethical or fiduciary duties, physicians' potential liability for unauthorized disclosure of privileged information and protection of physicians from unnecessary harassment."3 The existence of a physicianpatient privilege and the effect on the privilege of a suit filed by the patient! are important in some jurisdictions, but not in others." The most persuasive rationale for a per se rule against ex parte interviews is that an attorney who seeks such an interview with the patient's physician is attempting to induce a breach of contract, since confidentiality is an implied term of the physician-patient relationship.f Courts disapproving ex parte interviews then must craft remedies to restore the litigants to their previous positions, such as forbidding the use of any information gained as the result of the interview. 7 The discussion to this point assumes that the interview takes place without the consent or knowledge of the patient or the patient's attorney. However, in a number of cases, courts have required patients to authorize ex parte interviews with treating physicians." In these cases, the attorney has not attempted to surreptitiously interview the physician, but rather has addressed the matter openly. If permission is

3Note, Defendants' Right to Conduct Ex Parte Interviews with Treating Physicians in Drug or Medical Device Cases, 73 Minn. L. Rev. 1451, 1477 (1989). 4Id. at 1474. 5Duquette v. Arizona Super. Ct., 161 Ariz. 269, 778 P.2d 634 (1989); Louden, 110 Wash. 2d 675, 756 P.2d 138 (waiver of privilege does not justify ex parte contacts). 6In addition to Louden v. Myhre, see Harlan v. Lewis, 982 F.2d 1255 (8th Cir. 1993); Miles v. Farrell, 549 F. Supp. 82 (N.D. Ill. 1982) (court barred physician's testimony for defendant); Weaver v. Mann, 90 F.R.D. 443 (D.N.D. 1981); Hammonds v. Aetna Casualty and Sur. Co., 243 F. Supp. 793, 795 n.1, 803 (N.D. Ohio 1965); Petrillo v. Syntex Lab., Inc., 148 Ill. App. 3d 581, 499 N.E.2d 952 (1986), appeal denied, 113 Ill. 2d 584,505 N.E.2d 361 (1987); Wenniger v. Muesin, 307 Minn. 405, 240 N.W2d 333 (1976);Jaap. v. District Ct., 191 Mont. 319, 623 P.2d 1389 (1981); Cwick v. City of Rochester; 54 AD.2d 1078, 388 N.YS.2d 753 (1976); Ankerv. Brodniz, 98 Misc. 2d 148,413 N.YS.2d 582 (Sup. Ct.), ajf'd, 73 AD.2d 589, 422 N.YS.2d 887 (1979); Cristv. Moffatt, 326 N.C. 326, 389 S.E.2d 41 (1990); Alexander v. Knight, 197 Pa. Super. 79, 177 A2d 142 (1962); Klieger v. Alby, 125 Wis. 2d 468,373 N.W 2d 57 (1985). See cases collected in Annotation, supra note 1; Note, supra note 3, at 1472, n. 100. 'Smith v. Hulett, 182 Mich. App. 732,453 N.W2d 299 (1990) (suppression of testimony of treating physician interviewed without patient's consent). 8Doe v. Eli Lilly and Co., 99 F.R.D. 1267 (D. Colo. 1983); Davenport v. Ephraim McDowell Memorial Hosp., Inc., 769 S.W2d 56 (Ky. App. 1988); Hague v. Williams, 37 NJ. 328, 181 A2d 345 (1962).

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sought, the motion may be denied," but there will be no adverse consequences, such as suppression, disqualification, or attorney sanctions. 10 Presumably, a court can attach conditions to an order requiring a patient to consent to an ex parte interview. In Stem pIer v. Speidel!,11 for example, the trial court ordered the plaintiff to authorize an unsupervised and unrestricted interview. On appeal, the New Jersey Supreme Court rejected the notion that the discovery rules provided an exclusive method of information collection, but then prescribed conditions reconstructing at least some of the safeguards of a deposition. Specifically, the court agreed that some deference should be given to claims of medical privilege, despite the waiver of evidentiary privilege under state law effected by the filing of the lawsuit. Accordingly, the court reasoned that defendant could compel an authorization by motion, but that any interview would have to be preceded by notice to plaintiff's counsel, accompanied by a description of the anticipated scope of the interview, and an explicit notice that the physician's participation was voluntary. In addition, the court indicated that a trial court could order that plaintiff's counsel be allowed to participate. One wonders whether the court's creation of an elaborate quasi-deposition procedure was worth the effort.

§5.6

Contacting the Opponent's Experts

Any attempt to interview an expert witness retained by an opponent may be viewed as an improper interference with the attorney-client relationship. There is substantial authority that the attorney-client privilege covers virtually all of a retained expert's relevant knowledge. The courts have carried the majority view to great lengths. For example they recognize the applicability of the attorney-client privilege to expert information in both civil and criminal cases. They apply the doctrine to a wide variety of experts, including psychiatrists, physicians, polygraphists, accountants, questioned document examiners, engineers, and appraisers. The cases almost uniformly hold that the expert's written 9Louden, 110 Wash. 2d 675,756 P.2d 138. IOHarlan, 982 F.2d 1255 ($2,500 fine). 11100NJ. 368,495 A.2d 857 (1985).

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report is immune from discovery. Moreover, a substantial number of courts accept the premise that all the witness' knowledge is privileged. On that premise the opposition may not call the expert as a witness at trial, depose the expert before trial, or perhaps even contact the expert outside the courtroom. 1

It may be argued that it is neither fair nor doctrinally sound to indiscriminately extend the attorney-client privilege to retained experts.? Nevertheless, no attorney should attempt to surreptitiously interview the other side's expert. In the remarkable case of American Protection Insurance Co. v. MGM Grand Hotel-Las Vegas,3 the plaintiff designated Mr. Morris as its testifying expert on certain matters. Morris had been plaintiff's vice-president and was serving as a consultant to perform some of his prior duties and assist in the litigation. Morris retained a lawyer to contact the defendant about possible employment. This led to conversations with the defendant's lawyer in which Morris revealed some of the plaintiff's litigation strategy. Morris, however, rejected the defendant's offer of a job. On discovering these unseemly facts, the plaintiff moved for disqualification. The trial court disqualified defense counsel, and the appellate court affirmed, reasoning that (1) the contacts circumvented the discovery rules;" (2) the no-contact rule applied because the person was not only an expert, but an employee as well;" and (3) a "necessary corollary of the attorney's duty not to reveal confidences of a client is the duty not to seek to cause another to do SO."6 The court assumed that the expert's knowledge was within the attorney-client privilege. 7 Rules for interviewing prospective expert witnesses can be drawn from a recent California case, Shadow TrcifficNetwork v. Superior Court.8 In §5.6 'Imwinkelried, The Applicability of the Attorney-Client Privilege to Nontestifying Experts: Reestablishing the Boundaries between the Attorney-Client Privilege and the Work Product Protection, 68 Wash. U. L.Q 19, 22-23 (1990) (footnotes omitted). 2Id. at 33-36. 3748 F.2d 1293 (9th Cir. 1984), opinion withdrawn from publication and appeal dismissed, 765 F.2d 925 (9th Cir. 1985). 4Id. at 1303 (citing Campbell v. M/V Gemini, 619 F.2d 24 (9th Cir. 1980)). SId. at 1301-1302 (the court's reasoning was faulty on this point because the expert was represented by his own lawyer, who set up the interview; see Comment [2] to Model Rule 4.2). 6Id. at 1301. 7See Rentclub Inc. v. Transamerica Rental Fin. Corp., 806 F. Supp. 259 (M.D. Fla. 1992) (reaching similar result).

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that case, plaintiff's counsel met with four representatives of a "Big-Six" accounting firm to discuss possible retention as expert witnesses in an upcoming trial. After informing the accountants that what they would hear must be kept confidential, plaintiff's counsel detailed their theory of the case and received suggestions from the accountants." For reasons of cost, however, the accountants were not hired. Later the same accountants were retained as experts by defense counsel, one of the premier Los Angeles firms. The individual defense lawyer was told of the meeting with plaintiff's counsel, but he neither informed nor sought consent from plaintiff's counsel before proceeding. Plaintiff's counsel learned of the retention and moved to disqualify. The trial and appellate courts used an analysis very similar to that employed when a nonlawyer changes firms: 1. Did the prospective expert possess confidential information of the plaintiff? 2. If so, did the defendant firm rebut the presumption that the expert passed this information on to lawyers within the firm? The courts answered the first question, "Yes," and the second question, "No," and disqualified the firm.!? Crucial to the court's decision was the conclusion that plaintiff's counsel was not attempting to infect potential experts with disqualifying knowledge. II Commonsense rules for attorneys interviewing potential expert witnesses can be derived from Shadow Traffic: 1. Make it clear that any information revealed to the prospective expert is confidential and is not to be revealed without consent of counsel. 2. Have the prospective witness sign a confidentiality agreement. 12 3. Ask whether the prospective witness (or anyone in the witness's firm) has been interviewed by counsel for any other party.

824 Cal. App. 4th 1067,29 Cal. Rptr. 2d 693 (1994). 9Id. at 1073, 29 Cal. Rptr. 2d at 695. IOId.at 1086-1089,29 Cal. Rptr. 2d at 703-705. IIId. at 1080, n.9, 29 Cal. Rptr. 2d at 700 n.!. This aspect of the case is discussed in §5.12.4. 1224Cal. App. 4th at 1083 n.ll, 29 Cal. Rptr. 2d at 702 n.ll.

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4. If the answer is "yes," obtain consent from opposing counsel before interviewing the witness further.!" 5. Take the matter up with the court if consent is unreasonably withheld or it appears opposing counsel has attempted to infect the pool of experts.

§5.7

Interviewing Witnesses

Assume that a lawyer knows of an important fact witness, whom the lawyer does not believe is represented by an attorney. The lawyer wants to know the ethics of witness interviewing. First, there are Code and Model Rules provisions that furnish some guidance. Disciplinary Rule 7-104(A)(2)provides that during the representation of a client a lawyer shall not "give advice to a person who is not represented by a lawyer, other than the advice to secure counsel, if the interests of such person are or have a reasonable possibility of being in conflict with the interests of his [or her] client." In addition, the Code condemns misrepresentation and deceit in DR 1102(A)(4). Model Rule 4.3 provides that a lawyer shall not state or imply that he is disinterested, and that a lawyer must clear up any apparent misunderstanding the person may have over the lawyer's role in the matter. The comment to Model Rule 4.3 carries forward the Code provision against giving advice to an unrepresented person, other than the advice to obtain counsel. Model Rule 4.1 forbids making false statements of material fact, and Model Rule 8.3(c) proscribes conduct involving dishonesty, fraud, deceit, or misrepresentation. In sum, an attorney must identify himself and the interest he represents' and must not engage in trickery or overreaching to obtain information or neutralize a potential witness." The reality, however, is that some misrepresentation and overreaching are accepted and perhaps

13Id.at 1086, 29 Cal. Rptr. 2d at 703. lABA Informal Opinion 908 (1966) and ABA Informal Opinion 117 (1934) are to this effect. 2Shepard v. American Broadcasting Co., 151 F.R.D. 194 (D.D.C. 1993) (default judgment entered against client whose lawyer harassed a witness at her place of employment).

§5.7

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§5.7

even required if one is to adequately represent a client. The rub is to define the boundary between the acceptable and the unacceptable. The Model Rules attempt to make lawyers responsible for the acts of their investigators. Model Rule 5.3 requires a lawyer to make reasonable efforts to ensure that the investigator's conduct is compatible with the lawyer's professional obligations and makes the lawyer responsible if he orders or ratifies questionable conduct." Perhaps the best advice on this point is to hire reputable investigators and to make it clear that you do not want information that can be procured only by illegal or improper means." Clients must also be cautioned against self-help investigations, which a court may find to be tortious or illegal. 5 Misrepresentation of Identity and Purpose In spite of the express prohibitions" in DR 1-102(A)(4) and Model Rule 8.4(c), misrepresentation of identity and purpose is sometimes tolerated and even encouraged in the name of "necessity." One respected authority says, in fact, that a "subterfuge in investigation does not constitute deceit or misrepresentation," and that a subterfuge is "generally considered a permissible practice within reasonable limits, and . . . is often justified on the basis of [necessity]."? Such a statement goes too far. In ordinary situations, potential litigants and witnesses should be able to expect that interviewers will disclose their true identity and purpose. 8

3Hazard and Hodes, supra §5.2 note 12, §5.3:402 (for example, where lawyers in a firm have advance knowledge of an investigator's plan to "rope" an opponent with a prostitute, the partner and the supervising lawyer would violate Model Rule 5.3(c) if they did not countermand the plan). 'Wayne v. Bureau of Private Investigators, 20 I Cal. App. 2d 427, 20 Cal. Rptr. 194 (1962) (investigator's license suspended for half-truths in the interviewing process; investigator told claimants he was "investigating your accident," which led claimants to believe he was from their insurers). 5Lipin v. Bender, 84 N.Y2d 562,644 N.E.2d 1300, 620 N.YS.2d 744 (1994) (plaintiff stole defense documents; suit dismissed with prejudice). GButsee Isbell and Salvi, Ethical Responsibility for Deception by Undercover Investigators and Discrimination Testers: An Analysis of the Provisions Prohibiting Misrepresentation under the Model Rules of Professional Conduct, 8 Geo. J. Legal Ethics 791 (1995) (solution: define the practice of law narrowly so that deception in investigation is characterized as nonlegal work; hence, no violation of the Model Rules). 7R. Keeton, Trial Tactics and Methods 326-327 (1973). 8Wayne v. Bureau of Private Investigators, 20 I Cal. App. 2d 427, 20 Cal. Rptr. 194 (1962), is an example. A party to an accident would reasonably expect that an investigator would disclose her employer.

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There are situations, however, in which deceit may be necessary to further a legitimate societal goal. The following are illustrative: 1. After uncovering evidence that local officials are taking bribes, the prosecutor directs a "sting" operation in which an undercover officer,wired for sound, exhibits a willingness to pay bribe money to obtain licenses necessary to do business." 2. A fair housing attorney supervises "testers" to determine whether renters treat white applicants more favorably than black applicants. The Supreme Court has approved the use of testers as the only practicable means of obtaining evidence of discrimination. 10 3. A lawyer sends an investigator to a computer software store to attempt to purchase an item that is thought to violate the copyright of the lawyer's client. 4. A divorce attorney, representing a mother whose child has been kidnapped by the father and whose whereabouts are unknown, calls the father's sister and pretends that he is from Reader's Digest Sweepstakes with exciting news that must be personally delivered to the father. II The deceit employed in the above examples will be viewed as fullyjustified, perhaps even required in the name of zealous representation. Bastress and Harbaugh, the authors of the fourth hypothetical above, however, pose another example to demonstrate the slippery slope when the end is the justification for the means. 5. A commercial attorney, representing a client owed $6,000 on a note by an individual whose whereabouts are unknown, calls the debtor's sister and pretends that he is from Reader's Digest

9In re Friedman, 76 Ill. 2d 392,392 N.E.2d 1333 (1979). "Operation Greylord," a sting operation that snared crooked judges and lawyers, required false testimony; the prosecutors responsible for the false testimony were found to have violated DR 7102(A)(4), but no discipline was imposed in light of their exemplary motives. l°Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S. Ct. 1114, 71 L. Ed. 2d 214 (1982); see generally R. Schwemm, Housing Discrimination §32.2 (1994) (citing cases). llR. Bastress and]. Harbaugh, Interviewing, Counseling and Negotiation 220-221 (1991).

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Sweepstakes with exciting news that must be personally ered to the debtor.I?

§5.7 deliv-

Faced with what they consider the "fudge-like" quality of a necessity standard, Bastress and Harbaugh, "with trepidation," conclude as follows: You categorically should not use deception in witness interviewingincluding when clients' interest could not be otherwise satisfied. Such an approach avoids the slippery slope presented by the utilitarian balancing analyses and thus prevents the possibility that rationalization would make the exception the rule. 13 Bastress and Harbaugh's position is presented here to caution attorneys against becoming involved in a deceitful investigation unless it is clear that cfier thefact it will appear that deceit was necessary and appropriate to effectuase a legitimate end. Furthermore, it is important that lawyers respect legitimate confidential relationships. Scott Turow, author of Presumed Innocent and Burden of Proof, was censured for approving an undercover operation in which a lawyer was equipped with a "body bug" to procure damaging information from his client. 14 Supervising lawyers should instruct police and investigators not to engage in illegal conduct or any behavior likely to interfere with a legitimate confidential relationship.

The Hostile or Neutral Witness As discussed in Chapter 4, a lawyer who takes a statement from a hostile or neutral witness may find that he is a "necessary witness" if the witness tells a different story on the stand. The black letter rule should be to always take someone along on witness interviews to testify if needed. It may be necessary to employ stratagems to get the hostile or neutral witness to talk. The most common is the half-truth that cooperation may make it unnecessary to subpoena the witness to testify at deposition or trial. Most of us would agree that this statement is permissible12Id. at 220. 13Id.at 227. 14United States v. Of she, 817 F.2d 1508 (11th Cir. 1987); see Professor Uviller's excellent article in which he concludes that Turow's conduct was proper because the client was engaged in ongoing criminal activity. R. Uviller, Presumed Guilty: The Court of Appeals v. Scott Turow, 136 U. Pa. L. Rev. 1879 (1988).

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even if the lawyer believes the case will be tried and the witness required to testify-because, as a general matter, the sharing of information leads to settlement of disputes. IS However, a lawyer would step over the line by assuring a witness that giving a statement will make it unnecessary to testify later. The distinction is between the definitive statement and the suggestion of possible effect. 16 Similarly, it is common for a lawyer to feign emotions to break through a witness's reserve. No one think would it improper for a lawyer to pretend to be interested in a witness's occupation. No one would think it improper to pretend praise or gratitude. Ingratiation is seemingly always permissible. Feigning anger is more troublesome because a witness may feel threatened. The witness who feels threatened may complain to opposing counsel or retaliate from the witness stand. The consequences to the lawyer can be serious, since witness intimidation is both a crime 17 and a disciplinary offense. Friend(y Witnesses Friendly witnesses present different problems. The temptation is to shape the witness's memory by subtly telling the witness what you want to hear. In Chapter 11, we discuss "woodshedding"-coaching witnesses. The initial interview is, of course, closely related to preparing a witness to testify because a witness will tend to remember events as they were initially related to the interviewer, particularly if the oral account is reduced to writing. Memory is malleable. The interviewer has an opportunity to shape the witness's recollection by asking leading questions and providing information." We recognize that as a practical matter the disciplinary process cannot reach improprieties in interviewing. Most investigators and lawyers will use leading questions and make suggestions to shape the statement "at the edges." We submit, however, that the following practices are ethically suspect and tactically unsound: l.ID. Binder and S. Price, Legal Interviewing and Counseling 128 (1977) (example of promising that cooperation will be beneficial (in obviating the need for testimony), while not actually promising that the witness will not be required to testify). 16Id. 1718U.S.C. §1512(a) (1982) makes it a crime to knowingly use intimidation, threats, or misleading conduct to influence testimony. See generally M. Graham, Witness Intimidation 103-108 (1985). 18E.Loftus and]. Doyle, Eyewitness Testimony: Civil and Criminal 61-66 (1992) (giving examples of shaping memory by providing information).

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§5.7

• Interviewing witnesses (or clients) in each other's presence. Malleable witnesses thereby have an opportunity to conform their testimony. 19 • Telling the witness the law on the matter before asking her what she knows. Monroe Freedman argues that a client has a right to know the legal ramifications of a particular version of the facts before she tells her lawyer what happened because the client may otherwise give a "hasty and ill-considered answer."20 By this reasoning, a lawyer would be entitled to tell a pedestrian struck by a car the legal significance of being in the crosswalk, rather than out of it. While Professor Freedman eloquently defends this practice, telling a client or friendly witness what the facts "ought to be" creates a powerful incentive to shade the truth. • Telling the witness what the client or other witnesses say about the matter. Again, this gives a friendly witness an opportunity to conform her testimony.

The Witness Statement Chapter 4 discussed the need to take a written or recorded statement to reduce the possibility of the interviewer finding it necessary to testify to the witness's inconsistent statement." Here we discuss the ethical considerations involved in taking a statement. Most professional investigators (including attorneys) prefer handwritten statements-s-usuallv written out by the investigator-s-that include the important facts the witness can provide, while at the same time noting what the witness claims she is unable to provide (does not know, did not see). A documented disclaimer of knowledge of a particular fact sometimes provides a useful check on the trial witness who has conveniently "remembered" a fact unfavorable to the investigator's client. 22The handwritten statement should be read, corrected, and signed

19Keeton, supra note 7, at 337. Witnesses interviewed in each other's presence are impeachable on that account. 20lV1. Freedman, Lawyer' Ethics in an Adversary System 71 (1975); see also F. Lee Bailey, To Be a Trial Lawyer 128 (1985) ("Give the witness some description of what issues are to be litigated, and how his testimony will bear on them-what it is you are hoping to prove through him.") 21Section4.5. 22Keeton, supra note 7, at 311.

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Investigation

by the witness, especially if it is not written in the witness's hand. Some texts recommend that "mistakes" be inserted in the statement; corrections can then be elicited from the witness.P This technique of securing corrections in the witness's own hand (or initialed corrections) helps prove that the witness reviewed the document. This trick is unnecessary and, while innocuous, may be embarrassing if exposed in a jury trial. There is also the danger of the witness failing to catch the mistake and signing a document containing a mistake planted by the lawyer. It should be sufficient to have the witness initial each page and sign at the end. Several texts provide guidelines for the preparation of witness statements and suggest different strategies regarding what to include or delete, depending on whether the witness is friendly, neutral, or unfriendly. 24In considering these suggestions, counsel must always bear in mind the fact that such strategies may be carried too far. For example, one commentator cites a California case in which an overzealous insurance investigator's "creative writing" contributed to a $2 million punitive damages award against the investigator's principal." Judge Keeton's advice is this: Include the whole story, not merely the favorable aspects of the story; a good statement is what the witness would testify to; and overstated recitations are a trap for the lawyer who prepares for trial on the basis of the statement. 26 While the discovery rules require that the lawyer give the witness a copy of the statement on request,27 there is no ethical requirement that the lawyer volunteer this information to the witness. Why would a lawyer not give a copy of a statement to an interviewee? The witness may give it to the other side, and some authors think this is bad.28 Why make it easy for the other side?29 On the other hand, leaving a copy of the statement with the witness will tend to fix the witness's memory of the events. The witness will be less likely to give an inconsistent version 231d.at 332; R. Simmons, Winning before Trial 622 (1976); G. Vetter, Successful Civil Litigation 108 (1977). 24Keeton, supra note 7, at 301-330. 25Blackwellv. Reliance Ins. Co., No 15354 (Super. Ct. Indio County, Cal. 1975), discussed in G. Kornblum, Some Ethical and Legal Problems of the Investigator 199, 213214 (1976). 26Keeton, supra note 7, at 329. 27E.g.,Fed. R. Civ. P. 26(b)(3). 28Vetter, supra note 23, at 108; Simmons, supra note 23, at 229. 29Keeton, supra note 7, at 335.

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§5.8

of the events to the other side. Of course, a lawyer will probably not volunteer a copy of a statement to a witness whom he intends to impeach by the statement. There is no ethical impropriety unless there is deceit or refusal to provide the statement on request.

§5.8

Tape-Recording and Monitoring

Though movies like The Verdict and Class Action suggest otherwise, lawyers and investigators rarely engage in illegal wiretapping. The use of wiretaps, electronic surveillance devices and other prohibited means [is] a serious threat to personal privacy. ... A recent study recommends the use of professional standards ... as a necessary adjunct to other forms of control. ... Lawyers must also forbid the use of oppressive methods of securing information, as by threats or intimidation, or [other] invasions of privacy. 1 Federal and state statutes prohibit "interception" or "recording" of wire or oral communications and provide for criminal and civil penalties.? On the other hand, most jurisdictions recognize an exception for interceptions and recordings if the person recording the communication is a party to the conversation, or if one of the parties to the interception and recording has given prior consent (the one-party consent rule)." A minority of states require all parties to knowingly consent to the interception and recording," In 1974, the ABA issued Formal Opinion 337, stating that "[w]ith the exception noted in the last paragraph, the Committee concludes that no lawyer should record any conversation whether by tapes or other electronic device, without the consent or prior knowledge of all §5.8 lABA, Legal Background to the ABA Model Rules of Professional Conduct 329 (Tentative DraftJanuary 1984). 2See, e.g., 18 US.C. §2510 et seq. (1994); Cal. Penal Code §630 et seq. (1994). See United States v. Kouyoumejian, 946 F.2d 1450 (9th Cir. 1991) for the application of the federal statutes to video surveillance. See generally Kornblum, Some Ethical and Legal Problems of the Investigator, 25 Def LJ. 199,216-221 (1976). 318 US.C. §2511 (2)(d) (1994). See Koehn, Attorneys, Participant Monitoring and Ethics: Should Attorneys Be Able to Surreptitiously Record Their Conversations?, 4 Geo.J. Legal Ethics 403, 413 (1990) (listing statutes that allow one-party consent). 4Id. at 414-418.

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parties to the conversation." The "last paragraph" referred to in this quote excepted legitimate law enforcement activities.? Building on earlier informal opinions that had held it to be unethical to surreptitiously tape court proceedings," one's client," or opposing counsel," ABA Formal Opinion 337 concluded that surreptitious recording is inherently deceitful and thus violates DR 1-102(a)(4). The underlying assumption in the opinion is that any person talking to a lawyer or lawyer's agent, whether in person or on the phone, has a right to assume that the conversation is not being taped. If the lawyer wishes to tape the conversation, she must inform all participants. Although ABA Formal Opinion 337 was attacked as legislation rather than interpretation," the ABA stood by the opinion, IO and it has been followed by many state courts and ethics committees. II In some states, an exception was created to allow criminal defense lawyers to record conversations with third party witnesses. 12 Because DR 1-102(A)(2) and Model Rule 5.3 prohibit a lawyer from doing indirectly what she may not do directly, a lawyer may not direct an investigator or client to do the secret recording for the lawyer.I3 However, a lawyer presumably may advise a client on the legality of secretly recording a conversation and allow a client to make his own decision to engage in such conduct. If the client makes an illegal recording, however, the attorney may be sanctioned, or even charged criminally, 14 if she knowingly uses the recording. The debate over the ABA's all-party notification position has been revived by a recent opinion by the New York County Ethics Committee." Contrary to the underlying assumption in ABA Formal Opinion 5ABA Formal Op. 337 (1974). 6ABAInformai Op. C-480 (1961). 7ABA Informal Op. 1008 (1967). SABA Informal Op. 1009 (1967). 9Koehn, supra note 3, at 403. IOABAInformal Op. 1320 (1975) (refusing to reconsider Formal Op. 337). "Koehn, supra note 3, at 420-421, lists about 20 states whose courts and/or ethics committees follow ABA Formal Opinion 337. 12Id.at 423-424; Ky. Op. E-279 (1984); New York City Op. 80-95 (1980); Tenn. Op. 86-F-14(a) (1986). 13Va.Op. 848 (1986). 14Cf United States v, Wuliger, 981 F.2d 1497 (6th Cir. 1992) (attorney convicted of criminal offense of using illegal recording; reversed because he had no reason to know that the client illegally recorded conversation). 15New York County Lawyers' Committee on Professional Ethics Op. 696 (1993), commented on in Dilworth, May Lawyers Secretly Record Their Conversations?, 29

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§5.8

337, the committee reasoned that parties to a phone conversation assume the risk that the conversation is being recorded. 16 The lawyer must answer truthfully if asked whether the conversation is being recorded, but need not volunteer the fact. It may be that the propriety of taping or recording will come to be viewed as situational-the question turning on whether the person taped had a reasonable expectation of privacy in the conversation. In Arizona, for example, a lawyer may tape a witness in a criminal case.!? but may not record opposing counsel. 18 Arizona's position is that lawyers, but not "ordinary people," have a right to assume that their conversations are not being secretly recorded. Clients have a high expectation of privacy in conversations with their lawyers, and it follows that taping a client interview without notice will be frowned on in the unhappy event that the lawyer finds it necessary to use the tape against the client. To summarize-before the prudent lawyer should

participating

in one-party consent taping

1. make sure the anticipated conduct is legal under both state and federal law, 19 2. check the ethics opinions in the jurisdiction, and 3. carefully consider the potential negative consequences if the taping is revealed.P? Given the widespread use of tape recorders, attorneys should consider interrogatories specifically asking about the existence of tapes and the circumstances under which they were made. Secret recordings may

Trial 73 (Dec. 1993), and Pitulla, The Ethics of Secretly Taping Phone Conversations, 80 A.BA]. 102 (Feb. 1994). 16FCC regulations require, however, that recording be accompanied by notification or a tone warning. 11 F.C.C. 1033 (1947), 47 C.F.R. §64.501(c) (1989). 17Ariz.Op. 90-2 (1990). 18Ariz. Op. 95-03 (1995). 19Boddie v. ABC, 731 F.2d 333 (6th Cir. 1984) (private right of action implied from federal statute if party to an oral communication tapes and discloses it "with the purpose of committing any ... injurious act"); Pritchard v. Pritchard, 732 F.2d 372 (4th Cir. 1984) (husband's claim against wife for tapping home phone; good collection of cases). 2°Koehn, supra note 3, at 428-429 (firing of a congressional aide who presented a committee with a surreptitious tape).

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not be protected by the work product privilege." If such a recording is not produced in response to a legitimate discovery request, the court might preclude the use of the recording at trial. If such a recording is produced, it might be subject to a motion in limine or might be withdrawn "voluntarily" once the ethical ramifications become apparent. 22

§5.9

Surveillance

While Model Rule 4.4 condemns techniques of evidence collection that violate the legal or privacy rights of third persons, there are few disciplinary cases illustrating their potential reach. Instead, counsel must turn to the substantive law of torts for guidance. Ordinarily, surveillance for a proper purpose is not actionable. As one court noted in regard to a surveillance and motion picture: It is in the best interests of society that valid claims be ascertained and fabricated claims be exposed .... There was nothing unreasonable in the manner in which appellant was followed nor in the taking of motion pictures. In regard to the surveillance, it was conducted by experienced investigators who did not use improper techniques. . . . There was no trespassing on appellant's property nor spying through her window.... As to the motion pictures, they were a reasonable means of securing evidence .... The sole purpose of taking these films was to record appellant's movements and daily activities, and if these films disclosed inconsistencies in appellant's claim, any embarrassment suffered by her would be justified. 1

21Parrott v. Wilson, 707 F2d 1262 (11th Cir. 1983) (if work product, privilege lost due to ethical violation-in addition, a transcript should be discoverable under Fed. R. Civ. P. 26(b)(3)); Kadelbach v. Arnard, 31 Cal. App. 3d 814, 107 Cal. Rptr. 720 (1973) (not work product). 2:1".C. Penney Co. v. Blush, 356 So. 2d 590 (Miss. 1978). Of course, tapes may also be suppressed if they violate state or federal law. See, e.g., Harry R. v. Esther R., 134 Misc. 2d 404, 510 N.YS.2d 792 (Fam. Ct. 1986) (court excluded tape recording made by father of telephone conversations with his children, since they were made without the children's knowledge or consent); Rickenbaker v. Rickenbaker, 290 N.C. 373,226 S.E.2d 347 (1976) (evidence obtained in violation of 18 U.S.C. §251O excluded in divorce case). But see Battaglia v. United States, 349 F2d 556 (9th Cir. 1965) (violation of FCC tariff not a ground for suppression). §5.9 IMcLain v. Boise Cascade Corp., 271 Or. 549, 533 P.2d 343 (1975); Forster v. Manchester, 410 Pa. 192, 189 A.2d 147 (1963).

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§5.9

This section deals with two "investigatory" techniques-the "rough shadow" and "roping"-that can violate the third person's right of privacy. 2 The rough shadow" is conspicuous surveillance that embarrasses the third person or causes damage to the third person's reputation." Presumably, a lawyer would be subject to tort liability and discipline if the lawyer ordered or ratified such conduct or negligently retained or supervised an investigator engaged in such conduct." Roping is a term used to describe some trick to induce the surveilled party to engage in physical activity inconsistent with her claim of disability. 6 In Redner v. Workmen's Compensation Board,' the worker claimed severe back injury that left him able to walk only with a cane. An undercover agent for the insurance company befriended him, invited him to a party, got him drunk, and induced him to go horseback riding. He saddled, rode, and unsaddled his steed, all of which was captured by a movie camera operated by another insurance investigator hidden in the bushes. The California Supreme Court reversed, holding that the Workmen's Compensation Board should not have considered evidence of activity induced by fraud." Perhaps the ultimate case of roping occurred in Unruh v. Truck Insurance Exchange.' In this suit against an insurer, an investigator was alleged to have misrepresented his "capacity and intentions" to a female workers' compensation claimant. He caused her "to become emotionally interested in him," enticed her to Disneyland, led her out onto a rope bridge, and shook the bridge "intentionally and violently" while a colleague filmed her activities. 10 2For a general discussion of privacy torts, see Prosser and Keeton on the Law of Torts 854-856 (W.P. Keeton 5th ed. 1984). 3D. Baum, Art of Advocacy, Preparation of the Case §3.105 (1984). "Ellenberg v. Pinkerton's, Inc., 125 Ga. App. 648, 188 S.E.2d 911 (1972); Pinkerton Nat!. Detective Agency, Inc. v. Stevens, 108 Ga. App. 159, 132 S.E.2d 119 (1963). 5Nobel v. Sears, Roebuck and Co., 33 Cal. App. 3d 654, 109 Cal. Rptr. 269, 73 A.L.R.3d 1164 (1973); Model Rule 5.3(c)(I), (2); DR 1-102(A)(2). None of these authorities adopts a theory of vicarious liability. See Hazard and Hodes, supra §5.2 note 12, §5.3: 100-400. 6Baum, supra note 3 (letting the air out of a tort plaintiff's tires to induce her to change a tire). Other variations include the "mess," which involves putting a sticky substance on the claimant's windshield, and the "delivery," which involves blocking access to the claimant's driveway. See 13 Am.Jur. Proof of Facts, Surveillance Motion Pictures §ll, at 18-19. 75 Cal. 3d 83, 485 P.2d 799, 95 Cal. Rptr, 447 (1971). BId. at 94,485 P.2d 807, 95 Cal. Rptr. at 445. 97 Cal. 3d 616, 498 P.2d 1063,102 Cal. Rptr. 815 (1972). 'OHer suit against the insurer, however, was dismissed for failure to state a claim. See also Carmona v. Keller, an unreported California case involving a 19-year-old personal

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§5.9

Investigation

Audio and visual surveillance materials may be discovered through the use of interrogatories, II over claims that they are "impeachment" material'? or "work product." 13 Surveillance materials should be sought for two reasons. First, nondisclosure may provide grounds for a preclusion order!" or a new trial. 15 Second, pretrial review of such materials can reveal distortion or misconduct sufficient to justify suppression " or suggest avenues to be explored in cross-examination.!?

§5.10 The Ex Parte Subpoena One increasingly popular technique for securing statements or documentary evidence from nonparties is the use of the ex parte subpoena, so called because the subpoena issues (in many jurisdictions over counsel's signature I) without notice to the opposing party. The rules that set out the purposes for which subpoenas may be issued and served do not ordinarily authorize subpoenas for "ex parte investigation."? Several state bar opinions have therefore suggested that

injury plaintiff who was induced to perform various physical activities during a phony "screen test." See Shernoff, The Demise of the Sub Rosa Investigation, 45 Cal. St. BJ. 853 (1970). "Hoey v. Hawkins, 332 A.2d 403 (DeL (975); see also Dodson v. Persell, 390 So. 2d 704 (Fla. (980). 12Crist v. Goody, 31 Colo. App. 496, 507 P.2d 478 (1972); Corack v. Travelers Ins. Co., 347 So. 2d 641 (Fla. App. 1977). 13Martin v. Long Island R.R. 63 ER.D. 53 (E.D.N.Y 1974);Jenkins v. Rainner, 69 NJ. 50, 350 A.2d 473, 476-477 (1976). I·Cf. Snead v. American Export-Isbrandsten Lines, Inc., 59 ER.D. 148 (E.D. Pa. 1973). ISOisl, 31 Colo. App. 496, 507 P.2d 478. 16Snead, 59 ER.D. at 150; Powell v. Industrial Comm., 4 Ariz. App. 172,418 P.2d 602 (1966), vacated, 102 Ariz. 11,423 P.2d 348 (1967); Barham v. Nowell, 243 Miss. 441, 138 So. 2d 493 (1962). 17LaMarca, Overintrusive Surveillance of Plaintiffs in Personal Injury Cases, 9 Am. J. Trial Advoc. I (1985). §5.10 'E.g., Fed. R. Civ. P. 45(a)(3) (attorney, as officer of the court, may issue subpoenas). 2E.g., Fed. R. Civ. P. 45, as amended in 1991, which authorizes subpoenas duces tecum as an adjunct of discovery, but which requires notice to the opposing party. Fed. R. Civ. P. 45(b)(I). See the discussion of Rule 45 in Chapter 6.

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§5.10

ex parte subpoenas are a fraudulent abuse of process." Similarly, it has been held that an ex parte subpoena should not be used to circumvent the requirements of the rules of civil procedure." Although at least one court has approved the concept of an ex parte interview between defense counsel and a plaintiff's treating physician, the court conditioned the interview on notice to the plaintiff and a statement to the physician that he was not required to participate." Both the witness and the opposing party are protected by such conditions. In comparison, in Horner o: Rowan Companies,6 defense counsel noticed a deposition of plaintiff's treating physician, then called plaintiff's counsel (at a time too late to cancel plane reservations) to say that the deposition was off, and then conducted an ex parte interview with the doctor, who showed up to be deposed because he had not been notified of the cancellation. Plaintiff's counsel learned of the ruse, and defense counsel was sanctioned. 7 In the authors' opinion, ex parte subpoenas, like ex parte interviews with experts, present first and foremost questions to be answered under the applicable rules of civil procedure." In this regard, the ethics questions are somewhat secondary-they arise when there is an attempt to circumvent the procedural rules as written or customarily applied in the particular forum. 3Ky. Op. E-140 (1976) ("pure bluff, tending to create disrespect for judicial process"); Ga. Op. 40 (1984) ("[N]onparty witnesses [could] be misled into releasing confidential or privileged information .... [T]he use of subpoenas as described ... is a willful misrepresentation and fraud ... upon the issuing court, the issuing clerk, the person or entities to whom the subpoena is directed."). See also ABA Standards for Criminal Justice, The Prosecution Function, Standard 3-3. 1(d) (2d ed. 1980) [hereinafter Prosecution Function] (prosecutor may not use simulated process to secure interviews). 4Prior to 1991, the Federal Rules of Civil Procedure did not authorize subpoenas duces tecum to nonparties in the absence of a deposition. The only way to obtain discovery of documents from a nonparty was to schedule a deposition and subpoena the nonparty to attend the deposition and to bring with him certain documents. In 1991, Rule 45 was amended to provide for subpoenas duces tecum without an accompanying deposition. It is necessary, however, to give notice to opposing counsel. See also Beiny v. Wynyard, 214 A.D.2d 344, 625 N.YS.2d 27 (1987) (suppression and disqualification). 5Stempler v. Speidell, 100 NJ. 368,495 A.2d 857 (1985). See discussion in §5.5. 6[53 F.R.D. 597 (S.D. Tex. 1994). 7Id. at 603 (attorney fees and expenses); Ky. Op. 346 (same fact pattern). See also United States v. Hammad, 858 F.2d 834, 840 (2d Cir. 1988) (court found bad faith in prosecutor's issuance of a grand jury subpoena to induce the defendant to give an ex parte statement). BSee discussion of the relevant procedural rules in Chapter 6.

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§5.11

Investigation

§5.11 Responding to Irrrprope'r Investigatory Techniques In several of the preceding sections, attention has been directed to the tactical consequences of overreaching and deception. Of course, the principal point was that jurors are likely to respond unfavorably to such practices as interviewing under a false identity, surreptitious taperecording, and distorting witness statements. Counsel should highlight an opponent's misconduct for the benefit of the jury. In addition, counsel should consider making some effort during her own informal investigation, or formal discovery, to identify statements or other evidence that may have been procured by questionable tactics. If party or nonparty witnesses have been contacted, the details of such contacts should be established, including the time and place of the contacts, the identity of the person(s) who made the contacts, and the form of any statement or other evidence that was obtained as result of the contacts. Such spadework may lay the foundation for a motion in limine to exclude evidence obtained in violation of Model Rule 4.2 or 4.3, or secretly recorded in violation of a state law or state bar ethics opinion, or obtained in violation of the rules governing discovery from experts.' In addition to moving for preclusion, counsel should consider moving to disqualify the offending attorney. While courts are understandably reluctant to order disqualification of counsel based on questionable conduct during an investigation," sufficiently senous misconduct may warrant such a remedy. 3 Finally, some investigatory techniques are sufficiently intrusive or obnoxious to give rise to tort remedies." §5.11 'See In re Shell Oil Ref. Co., 812 F. Supp. 658 (preclusion order and return of documents); Smith v. Hulett, 182 Mich. App. 732,453 N.W.2d 299 (1990) (preclusion for unauthorized interviews with treating physicians); Gross, Suppression of Evidence as a Remedy for Attorney Misconduct: Shall the Sins of the Attorney Be Visited upon the Client?, 54 Alb. L. Rev. 437 (1990). 2Grahams Servo Inc. V. Teamsters Local 975, 700 F.2d 420 (8th Cir. 1982); Meat Price Investigators Assn. V. Spencer Foods, 572 F.2d 163 (8th Cir. 1978); Ceramco, Inc. V. Lee Pharmaceuticals, 510 F.2d 268 (2d Cir. 1975). 3Cronin v. Nevada Dist. Ct., 105 Nev. 635, 781 P.2d 1150 (1989) (lawyer and firm disqualified for ex parte contacts); Papanicolau V. Chase Manhattan Bank, 720 F. Supp. 1080 (S.D.NY 1989) (same). In addition, the court can and should fashion a remedy to provide access to the witness who has been improperly advised. For example, in United States v. Carrigan,6 the Tenth Circuit upheld the power of the trial court to permit a defendant to take depositions of government witnesses as a sanction for the prosecutor's misconduct. There is a fine line between properly telling a witness that he is under no obligation to discuss the case with opposing counsel and improperly advising the witness not to cooperate." It is fair to say that most prosecutors feel that a victim should not talk to defense counsel, "United States v. Crouch, 478 F. Supp. 867 (E.D. Cal. 1979); see also Baum, supra §5.9 note 3, §3.63; Vetter, supra §5. 7 note 23, at 97 ("You might be able to use an absolute refusal to talk as a basis for impeachment."). 5Harlan v. Lewis, 982 F.2d 1255 (8th Cir. 1993) (defense lawyer in malpractice action urged treating physicians not to cooperate with plaintiff-$5,000 sanction); In re Blatt, 65 NJ. 539, 324 A.2d 15 (1974) (criminal defense lawyer disciplined); State v. York, 29101: 535, 632 P.2d 1261 (1981) (prosecutor disciplined). 6804 F.2d 599 (10th Cir, 1986); see also United States v Pinto, 755 F.2d 150 (10th Cir. 1985); Gregory v United States, 369 F.2d 185 (D.C. Cir. 1966); United States v Rogers, 642 F. Supp, 934 (D. Colo. 1986) (letter from court to witnesses recommending cooperation with both sides). 7Gregory, 369 F.2d 185 (prosecutor improperly advised victim and arresting officer not to talk to defense lawyers unless prosecutor present), distinguished in United States v. Black, 767 F.2d 1334 (9th Cir. 1985) (letter from assistant U.S. attorney advised

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Investigation

§5.12.3

and they try to discourage such cooperation without directly telling the victim not to cooperate. It is not clear whether Model Rule 3.4(D authorizes the lawyer for a party to advise an expert not to talk to the opposing party. At least one commentator has suggested that such advice or instructions are improper. However, the same commentator assumes a liberal stance on the propriety of the opponent's ex parte contacts in the first instance. 8 §5.12.2

Secreting Witnesses

It goes without saying that a lawyer may not counsel witnesses to secrete themselves I or avoid testifying either by leaving the jurisdiction or by using other methods." A lawyer may not prevent a witness from testifying" Neither may a lawyer attempt to induce a witness to be silent by promises+ or threats." §5.12.3

Representing Witnesses

One commentator on trial technique recommends that trial counsel ask witnesses to notify counsel whenever they are contacted by the

government witnesses that they had no obligation to speak to defense counsel). See also Prosecution Function Standard 3-3.1(c) (prosecutor may not advise witness to decline to give information to the defense). 8Lillebaug, Ex Parte Interviews with "Two-Hatted" Witnesses, 21 Tort and Insurance LJ. 441 (1986). §5.12.2 'Taylor v. Commonwealth, 192 Ky. 410, 233 S.w. 895 (1921); DR 7109(B); Model Rule 3.4(a). 2Barnhill v. United States, II F.3d 1360 (7th Cir. I 993)(chastising prosecutor whose actions resulted in witness not being before the court; less than candid explanation of the witness's whereabouts); West Virginia Bar v. Blair, 174 W.Va. 494,327 S.E.2d 671 (1984) (advice to feign illness). 3United States v. Hammond, 815 F.2d 302 (5th Cir. 1987) (imprisoning a defense witness in a hotel room so she would be unable to testify); Kiefel v. Las Vegas Hacienda, Inc., 39 F.R.D. 592, 596 (N.D. Ill. 1966), off'd, 404 F.2d 1163 (7th Cir. 1968) (preventing court reporter from appearing as witness). 4DR 7-109(C); Model Rule 3.4(b). See also In re Ayala, 102 N.M. 214, 693 P.2d 580 (1984). "United States v. Thomas, 488 F.2d 334 (6th Cir. 1973) (threatening to prosecute witness if he testified for the defendant); L'Orange v. Medical Protective Co., 394 F.2d 57 (6th Cir, 1968) (cancellation of expert witness's insurance); Meye v. McDonnell, 40 Md. App. 524, 392 A.2d 1129 (1978) (threat to harm reputation of plaintiff's expert).

231

§5.12.3

Investigation

opponent for a statement and not to discuss the case until counsel arrives. Continuing, the writer states: [Y]ou cannot ethically refuse your opponent access to the witness. But you can, quite ethically, delay or postpone the interview until you can make the scene. And you should do it. Some lawyers and many insurance adjusters and private investigators are adroit with "Have you stopped beating your wife" questions, and artful and slanted editing of written statements. You have the right to protect the witness from double talk, doublethink, and doublewrite.'

The thrust of this advice is to purport to "represent" the witness's interest, while in fact representing the client's interest-a classic conflict in many situations. In this situation, the lawyer's advice to the witness will be colored by the lawyer's obligation to the client. Aside from the issue of conflict, the question is whether a lawyer may volunteer to "represent" a witness at a deposition and thereby "protect the witness" (translation: protect the client and frustrate the opponent). Two cases addressed this question in the context in which the witness is a former employee of the client represented by the helpful lawyer. In Anderson v. Pistner,2 plaintiff sought to depose former employees of defendant Montgomery Ward. When defendant's law firm contacted these former employees to arrange for the depositions, counsel explained that the former employees could attend without representation, hire their own attorney, or accept the firm's representation free of charge. The court concluded that in such a case, representation could be provided, but only if there was neither conflict between the interests of the former employer and those of the witness nor solicitation or coercion. The court concluded that the problems of solicitation or coercion could be minimized by requiring counsel initially to state only two options: that the witness go unrepresented or hire an attorney. Counsel could offer her services at the former employer's expense only if the former employee witness asked about hiring the firm or expressed dismay at having to pay for a lawyer. The court also suggested that the witness be offered independent counsel at the employer's expense. The court gave short shrift to plaintiff's claim of "frustration of discovery." §5.12.3 'Simmons, supra §5.7 note 23, at 218. 2148 Ill. App. 3d 616, 499 N.E.2d 566 (1986).

232

Investigation

§5.12.3

A similar approach was adopted in United States v. Occidental Chemical Corp.3 There counsel began to represent a former employee of Occidental midway through a deposition taken in connection with the disposal of chemicals at Love Canal. At the hearing that followed, it became clear that corporate counsel had solicited the representation during a break in the deposition. Furthermore, Occidental planned to notify other former employees that, if desired, Occidental's attorneys would represent them at no cost during upcoming depositions. Since he saw no conflict between Occidental and its employees, the judge was primarily concerned with the solicitation issue. He declined to disqualify counsel or enjoin counsel's representation of former employees, but he did enjoin Occidental's planned notice on the ground that it was tantamount to solicitation. Any future representation would presumably be at the initiation of former employees, not that of Occidental or its counsel. An ABA Informal Opinion" dealt with a similar situation. The scenario was one in which plaintiff's counsel contacted former employees of the defendant and was asked to represent them at a deposition noticed by their former employer.While approving the representation in the particular case, the ABA Committee warned of potential conflicts in such a situation. For example, the testimony of such witnesses might unexpectedly turn against the original client, or the witness might become a potential defendant. Moreover, the Committee observed that representation might cast doubt on the impartiality and disinterest of such a witness, to the detriment of the plaintiff's case. In criminal cases, counsel for a target defendant may attempt to represent potential witnesses in order to control the development of the case against the lawyer's client. 5 In his biography of Edward Bennett Williams, the author provides the following examples of Williams's philosophy: Williams' basic philosophy then-as well as later-was to represent as many people as he possibly could. "Hang together," he would tell witnesses and defendants, "or hang separately." The goal was what modern

3606 F. Supp. 1470 (W:D.N.Y 1985). 4ABA Informal Op. 1425 (1978). 5United States v. Moscony, 927 F2d 742 (3d Cir. 1991); United States v. Cintolo, 818 F2d 980 (5th Cir. 1987). See discussion in Chapter 14.

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§5.12.3

Investigation

white-collar defense lawyers call "information control," or, as Williams might put it, keeping prosecutors in the dark. ... A basic Williams rule is to get as many witnesses as possible under the defense tent. Usually, this is accomplished by paying their lawyers (perfectly legal) or at least arranging for their representation .... "You want the firm to represent as many as possible, and farm out the rest to people you can work with." (quoting an unnamed partner of Williams & Connolly)."

Some years ago a federal grand jury subpoenaed a number of union workers to testify about damage to presses of the Washington Post arising out of a labor dispute." The union attorney met with the involved workers and held a "seminar" on grand jury practice-what constitutes perjury, the privilege against self-incrimination and how to claim it, and the obligation to testify if offered immunity. Aware of potential conflicts, the attorney never met with the "clients" individually and never asked what part they played in damaging the presses. Nevertheless, he accompanied the members to the grand jury room, kept vigil outside the door, and was available for consultations. Nineteen of twenty-one workers asserted the privilege against self-incrimination, even on such questions as age and number of children." The frustrated prosecutor moved to disqualify counsel for obstructing the grand jury, but the appellate court ultimately held that the prosecutor should have simply brought the witnesses one by one before the trial court for a ruling with respect to whether the privilege was properly asserted." §5.12.4

Neutralizing Experts

One interesting practice is the attempt to make unavailable to the opponent a particular expert or group of experts. This can be done by holding a preliminary consultation conducted solely to establish the basis for a claim of confidentiality, I by paying a retainer to establish the 6E. Thomas, The Man to See: Edward Bennett Williams-Ultimate Insider; Legendary Trial Lawyer 141, 318, 407 (1991). 7In re Investigations before April 1975 GrandJury, 531 F.2d 600 (D.C. Cir. 1976). BId. at 604. 9Id. at 608. See Chapters 3 and 14 for discussion of conflicts. §5.12.4 'Sophisticated litigants may attempt to disqualify counsel by this method. See the discussion in Chapter I,particularly §1.8.

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§5.13

expert as a Rule 26 expert who is not expected to be called as a witness at trial," or by creating advisory panels, such as a "medical committee," in order to corner the market on potential expert witnesses.3 No provisions of the Code or the Model Rules reach this tactic, and the issue will therefore be litigated in the context of a hearing over whether an expert who has been neutralized by one side (but who will not testify or otherwise work for that side on the case) can accept employment from the other side. Metro Trajfic Control Inc. v. Shadow Trajfic Network" adopted a good faith test-did the party seeking to block representation contact the expert for a purpose other than to frustrate the expert's retention by an opponent? If the answer is "yes," the court will then ask whether confidential information was passed to the expert and subsequently passed by the expert to the opposing party. 5

§5.13 Destruction of Evidence The authors of the definitive work on the subject' define destruction as "rendering evidence permanently unavailable to the court and opposing party" and evidence as "matter discoverable within the Rules of Civil Procedure."? This definition is used to make it clear that admissibility into evidence is not the key; the key is whether the destroyed matter was relevant to the issues in the case." The Code and Model Rules provide little help in determining the propriety of destroying material of evidentiary value. Disciplinary Rule 7-109(A)provides that a lawyer "shall not suppress any evidence that he or his client has a legal obligation to reveal or produce." Similarly, DR 2SeeAmerican Protection Ins. Co. v. MGM Grand Hotel, 748 F.2d 1293, 1303 n.15 (9th Cir. 1984) (claim made that a witness had been improperly designated to block discovery), opinion withdrawn from bound volume and appeal dismissed, 765 F.2d 925 (9th Cir. 1984). See also Lillebaug, supra §5.12.1 note 8. See discussion in §5.6. 3Kenny, M.D. v. Superior Ct., 255 Cal. App. 2d 106,63 Cal. Rptr. 84, 90 (1967). 424 Cal. App. 4th 1067, 29 Cal. Rptr, 2d 693 (1994). See discussion in §5.6 on the issue of the propriety of the contact with the expert. 5See the analysis in §5.6. §5.13 T Gorelick, S. Marzen, and L. Solum, Destruction of Evidence (1989). This is an excellent work, analyzing the laws of all 50 states and including chapters on document management and the tort of spoliation. 2Id. at 4-5.

3Id.

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§5.13

Investigation

7-102(A)(3)and (7) provides that a lawyer shall not "conceal or knowingly fail to disclose that which [the lawyer] is required by law to reveal" or "counsel or assist [the lawyer's] client in conduct that the lawyer knows to be illegal orfraudulent." (Emphasis supplied.) Under these rules, it is necessary to turn to relevant state or federal law to determine the legality of a particular course of action before determining whether the particular course of action is prohibited by the Code. In other words, "the [Code's] provision[s] on the retention of evidence depend ... upon the [existence of a] legal duty to preserve it, suggesting that it is not unethical for an attorney to recommend destroying documents or other evidence when it is not illegal for the client to do SO."4 In contrast, Model Rule 3.4(a) provides that a lawyer "shall not unlawfully obstruct another party's access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value." (Emphasis supplied.) The term potential evidentiary value is obviously intended to include items that can be foreseen to have some relevance to anticipated litigation. Does the term unlawful mean more than "illegal"? Hazard and Hodes state that the term includes "noncriminal conduct that constitutes fraud, and the violation of a noncriminal legal obligation to produce a document or other material,"> and Gorelick, Marzen, and Solum state that the "better view ... is that destruction of evidence is unethical ... when the evidence is relevant to a reasonably foreseeable or pending legal proceeding, even if the destruction does not violate a criminallaw."6 These authorities believe that it is unethical for a lawyer to destroy or alter materials when the lawyer knows that the materials are relevant to pending or contemplated litigation. What does the criminal law have to say? The federal Obstruction of Justice statute? requires that the government prove beyond a reasonable doubt that the defendant (1) secured the destruction of relevant documents (2)knowing they were relevant (3) to a pending judicial proceeding (4) for the purpose of obstructing justice. 8 The chief limitation in 18 U.S.C. §1503 is the requirement of a pending proceeding. The "Note, Legal Ethics and the Destruction of Evidence, 88 Yale LJ. 1665 (1979). 5Hazard and Hodes, supra §5.2 note 12, §3.4:200. 6Gorelick, Marzen, and Solum, supra note I, at 250. 718 U.S.C. §1503 (1988). 8Gorelick, Marzen, and Solum, supra note 1, at 175.

236

6 Discovery

§6.l §6.2

Introduction Comparison of the Code of Professional Responsibility and the Model Rules; "Courtesy Codes" §6.3 Mandatory Disclosures, Good Faith, and Cooperation §6.4 The Problem of Relevance §6.5 Interrogatories §6.5.1 Burdensome Interrogatories §6.5.2 Evasive Responses §6.5.3 Objections and Claims of Privilege §6.5.4 Failure to Make Reasonable Inquiry §6.5.5 Misuse of the Business Records Option §6.6 Requests for Production §6.6.1 Dumping and Shuffiing §6.6.2 Subpoenas to Nonparties for Production and Inspection §6.7 Depositions §6.7.1 Lack of Civility §6.7.2 Scheduling Games §6.7.3 Abusing and Intimidating the Deponent §6.7.4 Obstruction §6.7.5 Consultations with the Deponent §6.7.6 Perjury and Changing Answers

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§6.1

Discovery

§6.7.7 Deposing Attorneys §6.8 Physical Examinations §6.9 Discovery from Experts §6.10 Potential Problems with Mandatory Disclosures of "Core" Information under Rule 26 §6.11 Sanctions §6.l1.1 Sanctions under Rules 26 and 37 §6.ll.2 Preclusion and Dismissal §6.1l.3 Introduction of Discovery Abuse before the Jury §6.11.4 The Tort of Discovery

§6.1

Introduction

In 1978, Professor (later Magistrate Judge) Wayne Brazil authored an insightful and influential article describing "Discovery's Psychological and Institutional Environment."! Professor Brazil's conclusion was that lawyers regard discovery as an aspect of litigation-where victory for the client is the end-and, thus, the tools of discovery are used tactically.The result is gamesmanship. Attorneys and litigants use discovery to harass their opponents and increase their costs and to limit and distort the flow of information." In addition, attorneys sometimes deliberately engage in inefficient discovery to generate billable hours, thus abusing their clients as well as their opponents.t Abuses are possible, even prevalent, because discovery takes place outside the judge's presence, and because the scope of discovery is so broad. The result is inefficiency, increased costs, delay, and a settlement reached after the parties are exhausted by the process. Discovery has been likened to the "Prisoner's Dilemma," in which mutual restraint produces mutually advantageous results, while harass§6.1 IBrazil, The Adversary Character of Civil Discovery: A Critique and Proposal for Change, 31 Vand. L. Rev. 1295, 1311-1315 (1978). This article was relied on by the Advisory Committee in the 1993 changes to the Federal Rules of Civil Procedure. 2Id. at 1513-1521. See also Brazil, Civil Discovery: Lawyers' Views of Its Effectiveness, Principal Problems and Abuses, 1980 A.B.A. Res.]. 787 (1980) (empirical study of 180 Chicago lawyers) [hereinafter Chicago Study]; E. Imwinkelried and T Blumhoff, Pretrial Discovery: Strategy and Tactics § 1.0 I (1986 & Supp. 1994). 3C. Wolfram, Modern Legal Ethics 594 (1986).

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Discovery

§6.1

ing requests and dilatory tactics cause a net loss to the parties (though not necessarily to their lawyers' purses). The "Dilemma" is created by the fact that, if one side is aggressive and noncooperative and the other side is passive and cooperative, the aggressor can gain a settlement advantage; hence, the incentive is present to impose costs on the other side." There are some eye-catching examples of overdiscovery, cases in which millions of pages of documents were exchanged. 5 Attorney Peter Gruenberger listed the most common abuses as unnecessary face-to-face "four-dollar-a-page" depositions of every witness; inconvenient depositions (in time or place); multiple depositions of corporate employees, or the flip side of the coin-production at depositions of corporate employees who know nothing; repetitive and abusive questioning; obstructive objections, colloquies, and instructions to a witness at depositions; "Wall Street" or form interrogatories; cumbersome definitions preceding interrogatories or requests to produce; inadequate or artful responses to interrogatories; and the "file dump" or "shuffiing" in response to requests to produce." The purposes of this chapter are both to describe these and other abuses and to suggest appropriate responses. Although we discuss discovery in the context of the federal rules, this chapter is not a detailed section-by-section analysis of the rules. Lawyers should be aware that the rules were substantially revised in 1993. No attorney should litigate a case in federal court without a close reading of the latest version of the rules and Advisory Committee Notes." 4The "Prisoner's Dilemma" analogy is developed in Note, Discovery Abuse under the Federal Rules: Causes and Cures, 92 Yale LJ. 352 (1982), and expanded in Setear, The Barrister and the Bomb: The Dynamics of Cooperation, Nuclear Deterrence, and Discovery Abuse, 69 B.D. L. Rev. 569 (1989). Setear's analogy is heavy with references to first-strike capability, mutually assured destruction, and other terms of the nuclear arms race. 5Sugarman, Coordinating Complex Discovery, 15 Litigation 41 (Fall 1988) (200 million pages in the Washington Public Power Supply System securities litigation); Pope, Rule 34: Controlling the Paper Avalanche, 8 Litigation 28 (Spring 1981) (64 million pages in the first five years of the IBM litigation). 6Gruenberger, A Composite Profile of a Discovery Abuser, reprinted in Discovery Abuse: Causes, Effects, and Reform, 3 Rev. Litig. I, 15-23 (1982). "The Advisory Committee was influenced by the work of Professor Brazil andJudge William Schwarzer, now director of the FederalJudicial Center. See Schwarzer, The Federal Rules, the Adversary Process, and Discovery Reform, 50 Pitt. L. Rev. 701 (1989); Schwarzer, Slaying the Monsters of Cost and Delay: Would Disclosure Be More Effective than Discovery?, 74Judicature 178 (Jan. 1991). See also Note, Mandatory Discovery

243

§6.2

§6.2

Discovery

Corn.parison of the Code of Professional Responsibility and the Model Rules; "Courtesy Codes"

No Code section deals specifically with discovery. Disciplinary Rule 7101(A), which requires zealous representation, says that a lawyer does not violate his duty to the client by "acceding to reasonable requests of opposing counsel which do not prejudice the rights of his client, by being punctual in fulfilling all professional commitments, by avoiding offensive tactics, or by treating with courtesy and consideration all persons involved in the legal process." Disciplinary Rule 7-102(A) prohibits delay "merely to harass or maliciously injure another," and DR 7-106 requires adherence to the rules of the tribunal. Model Rule 3.2 states that a lawyer shall make reasonable efforts to expedite litigation consistent with the client's interests, and the comment explains that" [r]ealizing financial or other benefit from otherwise improper delay in litigation is not a legitimate interest of the client." In addition, the Model Rules specifically address discovery. Model Rule 3.4(d) states that a lawyer shall not, [i]n pretrial procedure, make a frivolous discovery request or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party.

Model Rule 3.4(d) reflects the lawyer's responsibility to ensure that claims and contentions are meritorious (Model Rule 3.1), and that litigation is expedited (Model Rule 3.2) in the context of discovery. I In theory, this rule provides a basis for disciplinary action. Of equal importance is the fact that the rule provides secondary authority for the imposition of rule-based sanctions by trial judges. 2

Can Improve the Discovery System, 70 Ind. LJ. 657 (1995) (supportive); Hench, Mandatory Disclosure and Equal Access to Justice: The 1993 Federal Discovery Rules Amendments and the Just, Speedy and Inexpensive Determination of Every Action, 67 Temp. L.Q 179 (1994) (critical). §6.2 -o. Hazard, Jr., and W Hodes, The Law of Lawyering §3.4:600 (2d ed. 1990). "Underwood, Curbing Litigation Abuses, 56 St.John's L. Rev. 625, 668 (1982).

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Discovery

§6.2

There are a number of "creeds of professionalism," which purport to articulate how ethical lawyers should behave. The ABA Lawyer's Creed of Professionalism is one such document. 3 The Code of Litigation Conduct of the Bar of the City of New York is another." The committees drafting these creeds (or "courtesy codes") evidently saw discovery abuse as an area of major concern, since many of the provisions of the codes are directed at discovery.Of the 33 "rules" in the ABA Lawyer's Creed, 10 pertain to discovery. See provisions A.4 (tactics selected not to delay, harass, or cause financial drain), B.4 (cooperation in scheduling depositions), B.6 (refraining from excessive and abusive discovery), B.7 (delaying tactics), B.8 (courtesy in depositions), C.5 (voluntary disclosures and discovery plan), C.7 (courtesy in cancellation of depositions), C.8 (verification of participation of witnesses), C.g (willingness to enter into stipulations), and C.lO (punctuality). Like the ABA Code, the New York code deals with discovery in detail. Rules 6, 7, and 8 of the City Bar of New York's Code of Litigation Conduct cover depositions, document demands, and interrogatories. See, for example, provisions 6(a)(4) (harassment, causing expense to opponent), 6(d)(e)(objections, instructions not to answer), 6(f) (going off the record), 7(b) (secret construction), 7(d) (hiding documents), and 8(a) (form interrogatories). The commentary to rule 6 states that the "principal problems in the conduct of lawyers at depositions are symmetrical: abusive and unnecessarily intrusive questioning on the one hand, and excessive interference with questioning by way of objection or instructions not to answer on the other." Courtesy codes, if followed, would further the goals of civil discovery-efficient exchange of information leading to just settlement or informed judicial resolution of controverted issues. However, the codes contain no enforcement mechanisms; they are enforced, if at all, only by lawyers who act courteously and demand courtesy in return. "The ABA House of Delegates at its August 1988 meeting adopted a resolution urging state and local bars to adopt a creed of professionalism, and the ABA Lawyer's Creed of Professionalism was promulgated as a guide for state and local bars. It was not intended to amend the Model Rules. 4Adopted in 1988 with a preamble that states in part, "We are interested ... in conduct that is legal ... and usually beyond the reach of sanctions, but is, nevertheless, in our view, improper. Such conduct ... tends to violate the appropriate relationships among lawyers. It is the kind of conduct that makes life at the bar more difficult for lawyers and clients, and unnecessarily so."

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§6.3

§6.3

Discovery

Mandatory Disclosures, and Cooperation

Good Faith,

Federal discovery rules, as amended in 1993, promote cooperative disclosure of information by requiring lawyers and parties to follow a number of what might be termed "good faith" rules. These provisions impose on counsel the general requirements of disclosing relevant information without request, trying to work out disagreements, and engaging only in such discovery as necessary to obtain relevant information. Following are some highlights of the federal rules. Initial Disclosures qf "Core" Iriformation Federal Rule 26(a)(1) requires the disclosure, without request, of the names, addresses, and phone numbers of "each individual likely to have discoverable information relevant to disputed facts alleged with particularity in the pleadings." Rule 26(a)(2) prescribes disclosure of documents and tangible things (in the control of a party) relevant to disputed facts alleged with particularity in the pleadings. These disclosures are to be made at, or shortly after, a mandatory meeting between the parties held soon after suit is filed. 1 The disclosures are to be signed by the attorney, whose signature constitutes a certification, based on information and belief, formed after reasonable inquiry, that the disclosure is complete and correct-which means that lawyers must disclose the identity of potential adverse witnesses." Onb Necessary Discovery to Be Conducted No formal discovery (depositions, interrogatories, and requests for production) can be undertaken until the parties have met to develop a discovery plan and exchanged basic information.f It is hoped that meeting and exchanging information will greatly lessen the need for formal §6.3 'Fed. R. Civ. P. 26(fj. This meeting is to be held at least 14 days before the court holds a scheduling conference or a scheduling order is due; Federal Rule 16 sets up this procedure. The order must be entered within 120 days of the defendant's being served with summons. 2Fed. R. Civ. P. 26(g)(I); see also Rule 26 advisory committee's note (1993) (''As officers of the court, counsel are expected to disclose the identity of those persons who may be used against them as witnesses or who, if their potential testimony were known, might reasonably be expected to be deposed or called as a witness .... "). 3Fed. R. Civ. P. 26(fj.

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Discovery

§6.3

discovery. The attorney's signature on a discovery request is a warrant that the discovery is not for purposes of harassment or delay;" and that it is "not unreasonable or unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount in controversy, and the importance of the issues.">The court can enter a protective order to limit the scope or means of discovery if the parties are unable to agree on what is necessary.6 Interrogatories Limited The 1993 amendments limit the number of interrogaties to 25 per party, "including all discrete subparts," unless the court allows additional interrogatories on a showing of need.? The Advisory Committee assumed that information exchanged at the initial meeting between the parties and through mandatory disclosures would obviate the need for interrogatories to discover basic information. 8 The "purpose of the revision [is] to reduce the frequency and increase the efficiency of interrogatory practice. "9 Depositions Limited The 1993 amendments addressed a number of problems of deposition practice. Without a court order on a showing of necessity, depositions are limited to ten per side, and a witness may not be deposed more than once.'? Rule 30 now expressly prohibits inappropriate coaching, objections, and instructions not to answer. I I Nonstenographic recording is encouraged, but with the proviso that a transcript must be prepared for the court of any portions of the tape intended to be used at trial. 12 The problem of "short-noticing" of depositions was attacked by barring the use of a deposition against a party who received fewer than 11 days' advance notice if the "short-noticed" party promptly moved 4Fed. R. Civ. P. 26(g)(2)(B). 5Fed. R. Civ. P. 26(g)(2)(C). 6Federal Rule of Civil Procedure 26(c) requires the party seeking a protective order to first try to resolve the dispute without court action; the rule gives the court broad authority to craft an order to minimize the expense and burden of discovery. 7Fed. R. Civ. P. 33(a). 8Rule 26 advisory committee's note (1993). 9Id. IOFed.R. Civ. P. 26(a)(2).

IIFed. R. Civ. P 30(d)(l). 12Fed.R. Civ. P. 30(b)(2), 32(c).

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§6.3

Discovery

for an order to have the deposition rescheduled and the motion was pending at the time of the deposition. 13 The problem created by lawyers and litigants who change testimony after the fact was addressed by an amendment to Rule 30. The amendment waives signature and changes in the absence of a demand for same before the completion of the deposition, requires a signed state, .ent of reasons for any changes or additions, and specifically states that any such changes are to be "appended" to the original. 14 Presumably, both the original and the change are to be presented to the trier of fact when the deposition is used at a hearing or trial. Expert Testimony to Be Fully Revealed before Trial Federal Rule 26(a)(2)and (e)(1)radically changes the way in which discovery is had from "testifying experts," that is, experts "specially employed to provide expert testimony in the case, or whose duties as an employee of the party regularly involve giving expert testimony." 15 Rule 26(a)(2)requires the production of "any evidence that the party may present at trial under [Evidence] Rules 702,703, or 705" in the form of a written report of expected expert testimony. The report must contain the witness's qualifications, the data or other information relied on, any exhibits that will be used as a summary of or in support of the expert's opinion, and a list of other cases in which the expert has testified as an expert at trial or in a deposition. Rule 26(e)(1)extends the duty to supplement incomplete or incorrect responses to the information contained in the Rule 26(a)(2)(A)report and to the information provided through a deposition of the expert. According to the legislative history of the 1993 amendments, lawyers had not taken seriously their duties under pre-1993 rules to disclose information by way of interrogatories and had provided information "about the 'substance' of expert testimony, ... so sketchy and vague that it rarely dispensed with the need to depose the expert and often was even of little help in preparing for a deposition of the witness."16The 1993 amendments were designed to force lawyers to make 13Fed.R. Civ. P. 32(a)(3). HFed. R. Civ. P. 30(e). lSFed. R. Civ. P. 26(a)(2)(B). Treating physicians and other "fact" experts are outside the rule, as are nontestifying consultants. 16Rule 26 advisory committee's note (1993).

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full disclosure of the prospective testimony, qualifications, and testifying history of their retained experts, under penalty of being precluded from using the expert at trial. 17 Claims if Privilege to Be Identified Parties resisting discovery on the ground of privilege or work product protection must "make the claim expressly and describe the nature of the documents, communications, or things not produced in a manner that ... will.enable other parties to assess the applicability of the privilege or protection." 18 The court can determine the applicability of privilege by reviewing the document in camera. 19 The rule and the comments do not address the issue of waiver by inadvertent disclosure, though the requirement of a specific claim of privilege suggests that any document for which no claim of privilege is made should be considered unprivileged. 20 Witness and Document Lists Federal Rule 26(a)(3)mandates disclosure of witnesses and exhibits at least 30 days before trial. Failure to make these disclosures can result in preclusion. Other parties must file objections, to the extent known, on all issues other than relevance within 14 days. This rule should cause parties to litigate most evidentiary problems before trial, which in turn should promote settlement and reduce the number and length of sidebar conferences during trial.

§6,4

The Problern of Relevance

Fishing expeditions are a recurring problem in discovery. The first sentence of Federal Rule 26(b)(1)provides that discovery may be had of "any matter, not privileged, which is relevant to the subject matter 17Fed.R. Civ. P. 37(c)(1). 18Fed.R. Civ. P. 26(b)(5). 19Fed.R. Civ. P. 26(c). 20See the discussion of waiver by inadvertent disclosure in Chapter 5. See also Norton v. Caremark, Inc., 20 F.3d 330 (8th Cir. 1994); In re Sealed Case, 877 F.2d 976

(D.C. Cir. 1989).

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Discovery

involved in the pending action." The second sentence then provides: "The information sought need not be admissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." Many courts have read these two sentences liberally and have allowed wide-ranging discovery on the mere suggestion that inquiry "may arguably [or possibly] lead to the discovery of admissible evidence."! A more conservative reading of the rule would require a stronger showing of "relevancy to the subject matter of the litigation," the threshold test of permissible discovery. 2 To put it another way, the second sentence of Rule 26(b)(l) must be read in light of the first; so construed, the second sentence means only that the inadmissibility of "stepping-stone" information at trial should not necessarily block an inquiry if the party seeking the information can demonstrate that the discovery of the inadmissible matter "appears reasonably calculated" to lead to the discovery of other relevant and admissible evidence. 3 As a practical matter, it is difficult to stop counsel from fishing for tangential information. Objections to interrogatories and requests for production on grounds of relevance are rarely sustained," and it is virtually impossible to stop counsel from fishing for information during a deposition because most judges believe that the rules do not permit counsel to instruct a client not to answer on grounds of irrelevancy. An objection on grounds of irrelevancy is meaningless because the witness must answer the question over the objection.' Since fishing expeditions and overdiscovery are common," there have been periodic proposals to amend Federal Rule 26 to restrict the

§6.4 IG. Vetter, Successful Civil Litigation 110 (1977). 2Fifth Ave. Peace Parade Comm. v. Gray, 480 F.2d 326 (2d Cir. 1973) (while objections to discovery as a "fishing expedition" have been properly rejected, the "fishing" must relate to evidence or matters likely to lead to the discovery of admissible evidence and not to the possible existence of a claim). 3For example, both hearsay and opinion testimony taken over objection to its admissibility at trial will frequently lead to other relevant and admissible evidence. See Carrier Mfg. Co. v. Rex Chainbelt, Inc., 281 F. Supp. 717 (E.D. Wis. 1968); Lowe's of Roanoke, Inc. v.Jefferson Standard Life Ins. Co., 219 F. Supp. 181 (S.D.N.Y 1963). 4Brazil, supra §6.1 note I, at 1322. 5Fed. R. Civ. P. 30(d). 6Chicago Study, supra §6.1 note 2, at 825 (49 percent of the attorneys in the Chicago study complained of overdiscovery).

250

Discovery

§6.5

scope of discovery to "issues, claims, and defenses."? While these proposals have been rejected, the initial disclosures required by 1993 Rule 26 do track a narrower definition of relevancy ("relevant to disputed facts alleged with particularity"). In any event, the broad definition of relevancy continues to be the justification for excessive and abusive demands, and the burden is on the party resisting discovery to convince the court that the discovery request is unjustified. In the federal courts, the combination of initial disclosures" and a mandatory discovery conference may operate to narrow the issues and the scope of discovery.

§6.5

Interrogatories

Interrogatories are written questions directed to the opposing party. They are to be answered under oath in writing by the party, but the answers are almost always drafted by opposing counsel. While the answers lack spontaneity, interrogatories are useful to obtain background information about the case. 1 Sets of form interrogatories for every type of case are available in every law library and many law offices-and that is the problem. A lawyer may be tempted to serve a lengthy set of canned interrogatories calling for much unnecessary information. Opposing counsel might treat this as the first shot in a discovery war and respond with objections and evasive answers. 2

7 ABA Section of Litigation, Report of the Special Committee for the Study of Discovery Abuse 2, 3 (1977); Advisory Committee on Civil Rules, Preliminary Draft of Proposed Amendments to the Federal Rules of Civil Procedure (March 1978), 77 ER.D. 613 (1978). Such amendments have been rejected on the theory that they might generate more complex, detailed (and sham) pleadings. See commentary at 85 ER.D. 521, 539 (1979). 8Rule 26(g)(2)(C) requires discovery requests to be signed by an attorney, and the signature is a certification that the request is not for an improper purpose and is not unreasonable, given the issues, the discovery already had, and the size of the case. §6.5 IFed. R. Civ. P. 33. See R. Haydock and D. Herr, Discovery Practice 318320 (1989) (one of the best single-volume works on discovery). 2Imwinkelried and Blumhoff, supra §6.1 note 2, §7:01 (Supp. 1994). See also Charffos and Christensen, Interrogatories: How to Use Them Effectively in Personal Injury Cases, 22 Trial 56 (June 1986) (over one-half of discovery motions relate to interrogatories).

251

§6.5

Discovery

The 1993 federal discovery rules are designed to reduce the need for interrogatories." Without leave of court or stipulation, the permissible number is 25, including "discrete subparts." It is assumed that most of the background information will be produced in the initial disclosures required by Rule 26.4 The sections that follow describe generic problems with interrogatories-not unique to any jurisdiction-and suggest solutions.

§6.5.1

Burdensome

Interrogatories

Interrogatories can be unduly burdensome if they are excessive in number, I unsuited or not tailored to the case (or both),? cumulative of other discovery," or preceded by cumbersome, if not unintelligible, definitions." Professor Brazil writes: Some attorneys serve lengthy sets of canned interrogatories if they perceive some advantage to be gained by psychologically or economically harassing an opposing party or counsel. Litigators also may use interrogatories to pressure or manipulate opposing counsel into doing such initial case preparation as factual investigation and legal research and analysis that properly should be undertaken by the propounding counsel and paid for by that counsel's client."

In addition, canned interrogatories

drive up litigation costs for both sides and provide lawyers with an opportunity to "increase their profit margin" by recycling interrogatories used in previous cases."

3Fed. R. Civ. P. 33 advisory committee's note (1993). ~. Moore, Moore's Federal Practice Rules Pamphlet 308 (1995) (the initial disclosure requirements amount to standing interrogatories and requests for production). §6.5.1 lIn re U.S. Fin. Sec. Litig., 74 F.R.D. 497 (S.D. Cal. 1977) (2,736 questions that would have cost an estimated $24,000 to answer). 2Frost v. Williams, 46 F.R.D. 484 (D. Md. 1969) (formbook interrogatories oppresive and frivolous). 3Spector Freight Sys., Inc. v. Home Indem. Co., 58 F.R.D. 162 (N.D. Ill. 1973) (10,000 interrogatories sought information that could have been obtained by other means); Barough Eaton Allen Corp. v. International Business Machs. Corp., 1980 vVL 8769 (N.Y App. Div. May 20, 1980) (vacating 200 interrogatories served by IBM at same time as notices for depositions at which identical information could have been obtained, plus $1,000 sanction on trial counsel). 4Diversified Prods. Corp. v. Sports Center Co., 42 ER.D. 3 (D. Md. 1967). 5Brazil, supra §6.1 note 1, at 1322. 6Id.

252

Discovery

§6.5.2

Rather than responding in kind, a lawyer receiving a set of canned interrogatories should attempt to schedule a meeting with the propounding attorney to exchange information and develop a sensible discovery plan. If the propounding attorney is uncooperative, the lawyer should move the court for an order striking the interrogatories as burdensome. 7

§6.5.2

Evasive Responses

Lawyers responding to interrogatories often are evasive. 1 "The responding adversary's first impulse is to construe all inquiries and requests as narrowly as possible, thereby limiting the amount of useful information that must be divulged."? Hunter v. International Systems and Controls Corp.3 provides a good example of an "artful dodger" response. The question sought" [for the years in question] sales of steel tanks made outside the United States by [the company]." The answer was "none because [the company] made no steel tanks during the years 1966-9." The question clearly asked for sales, not tanks manufactured, during the period in question, and the judge required an amended response. 4 Dollar v. Long Manufacturing N C: Inc.,5 contains an example of deliberate misleading by answering a different question from the one asked. The question sought "other injury accidents involving the same model backhoe." The answer was "no present knowledge of any accidents, injuries or death resulting from the operation of the particular backhoe model in question prior to the incident which forms the subject matter of this litigation."6 It later came out that the defendant knew of two subsequent injury accidents. In reversing the trial judge's refusal to compel a response, the appellate court stated that discovery requires "a candid statement of the information sought or of the fact that objection is made to furnishing the information. A partial answer ... reserving an undisclosed objection ... is not candid. It is evasive."?

7C£ Fed. R. Civ. P 26(c). §6.5.2 'Chicago Study, supra §6.1 note 2, at 825 (61 percent of Chicago attorneys surveyed complained of evasive answers in discovery). 2Erazil, supra §6.1 note I, at 1323. 351 F.R.D. 251, 257 (W:n Mo. 1970). "Id. at 260. There were other evasive responses as well. 5561 F.2d 613 (5th Cir. 1977). 6Id. at 615 (emphasis supplied). 'Id. at 616-61 7.

253

§6.5.2

Discovery

Attorneys receiving evasive or incomplete responses should rely on the provisions of Federal Rule 37, which equate such responses with a failure to respond and require the assessment of expenses, including attorney fees, incurred in obtaining an order compelling a satisfactory response." For their part, courts should use Rule 37 to enforce attorneys' duty of candor. An excellent standard appears in the courtesy code of the City Bar of New York: Interrogatories should be read by the recipient with the recognition that the attorney who prepared them did not have the information being sought; hence they should not be read in a technical or artificial manner designed to assure that the responses are technically in compliance with the inquiry, but not truly responsive."

§6.5.3

Objections and Claims of Privilege

There tions might too often, burden the

may be legitimate objections to interrogatories. The quesseek privileged information or be unduly burdensome. All however, attorneys object solely for tactical reasons-to adversary or hide discoverable information. 1 In Washington State Physicians Insurance Exchange and Association v. Fisons Corp.,2 the defendant hid two "smoking gun" letters behind a bad faith objection, and the appellate court reversed the trial court's refusal to order sanctions. Federal Rule 33 requires that each interrogatory be separately and fully answered, and that, if objected to, the ground for the objection be stated with specificity. 3 The 1993 amendments mandate that claims of privilege be made with specificity and in such a way as to allow the claim to be tested." Broad or general objections to groups of interrogatories are ordinarily improper." In other words, each interrogatory must be answered or objected to on a specific and legitimate ground. A mere

"Fed, R. Civ. P. 37(a)(3), (4). A side result is that an attorney who responds evasively waives any objection to the question. Dollar v. Long Mfg., N.C., Inc., 561 F.2d 613, 617 (5th Cir. 1977). "Code of Litigation Conduct Rule 8(b). §6.5.3 'Brazil, supra §6.1 note 1, at 1324. 2122 Wash. 2d 299, 858 P.2d 1054, 1074-1085 (1993). 3Fed. R. Civ. P. 33(b)(4). 4Fed. R. Civ. P. 26(b)(5). 5Wurlitzer Co. v. USEEOC, 50 F.R.D. 421 (N.D. Miss. 1970).

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Discovery

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statement that a question is "improper" would therefore not constitute a valid objection and may result in waiver of a legitimate ground of objection." Professors Haydock and Herr cataloged improper responses: 7 1. that the information is already in the posseSSIOnof the requestor;"

2. that the answer would be inadmissible at trial;" 3. that the answer exceeds the responding party's definition of the issues involved in the case; 10 4. that the interrogatory seeks an admission; II and 5. that the interrogatory seeks "factual opinions or conclusions, or legal contentions related to the facts." 12 §6.5.4

Failure to Make Reasonable Inquiry

Assume that neither the lawyer nor the client knows the answer to some interrogatories. The temptation may be to summarily answer the questions as "unknown at this time." I Federal Rules 26 and 33, however, require a "reasonable inquiry" before so responding. Professors Haydock and Herr opine that a party is required to know what it has. Hence, a corporate party must search its records and question its employees before responding, but need not question unconnected persons.?Even though there is no "willful blindness," a failure to conduct a reasonable inquiry should result in sanctions." The reasonableness of the inquiry depends on the circumstances, and it may suffice for the

6Baxter v. Vick, 25 F.R.D. 229,233 (E.D. Pa. 1960). 7Haydock and Herr, supra §6.5 note 1, at 355. 8Weiss v. Chrysler Motors Corp., 515 F.2d 449, 456 (2d Cir. 1975). "Greyhound Corp. v. Superior Ct., 56 Cal. 2d 355, 364 P.2d 266, 15 Cal. Rptr. 90 (1961). IOUnited States v. 30Jars of "Ahead Hair Restorer for New Hair Growth," 43 F.R.D. 181,189 (D. Del. 1967). IIEvans v. Local 2127, 313 F. Supp. 1354, 1361-1362 (N.D. Ga. 1969). 12Rogers v. Tri-State Materials Corp., 51 F.R.D. 234, 245 (N.D.W Va. 1970). §6.5.4 IDiGregorio v. First Rediscount Corp., 506 F.2d 781, 787 (3d Cir. 1974). 2Haydock and Herr, supra §6.5 note 1, at 361. 3Washington State Physicians Ins. Exch. and Assn. v. Fisons Corp., 122 Wash. 2d 299, 858 P.2d 1054, 1079 (1993).

255

§6.5.4

Discovery

responding party to explain that it has been impossible to obtain the requested information. §6.5.5

Misuse of the Business Records Option

Federal Rule 33(d) allows parties to make business records available as an option to answering questions from information in the records. A party receiving a detailed set of interrogatories may be tempted to direct the opposing counsel to the records that contain the information, rather than go to the trouble of sorting through the records. The key,however, to the legitimate use of the business records option is that the burden of obtaining the information must be substantially the same for the two parties. I In most situations, the burden would be greater for the party seeking the information because that party would not be familiar with the way in which the records are kept. Professors Haydock and Herr explain the business records option as follows: [IJf the burden would be greater for the interrogating party, the responding party must collate the information and respond in writing. The responding party must designate what specific documents answer the question. Once the responding party does specify the appropriate documents, the burden then shifts to the interrogating party to uncover information. The specification must be in sufficient detail for the requesting party to locate the answers readily from the provided documents. One court required the responding defendant to "make a knowledgeable employee available to plaintiff at all time during her inspection of the documen ts."?

§6.6

Requests for Production

Like interrogatories, requests for production are drafted by lawyers and answered by lawyers. Like interrogatories, requests and responses are often used tactically, rather than as a medium for the exchange of information. I Requests under Federal Rule 34 are directed at the party §6.5.5 lFed. R. Civ. P. 33(d). 2Haydock and Herr, supra §6.5 note 1, at 373-374 (quoting McElroy v. United Air Lines, Inc., 21 F.R.D. 100, 102 (W.D. Mo. 1957)). §6.6 'Brazil, supra §6.1 note I, at 1325.

256

Discovery

§6.6.1

opponent and seek to inspect, copy, or test documents and tangible things. Entry onto land may be requested. The respondent has 30 days to agree or object; the parties are expected to work out the details of when, where, and how the inspection is to take place. Many of the problems associated with interrogatories-burdensome requests.? evasion, and bad faith objections-are also associated with requests for production. Two additional problems are present, which are discussed in the following sections.

§6.6.1

Dumping and Shuffling

In contrast to nondisclosure premised on a strict or secret construction of a request to produce, the file dump consists of producing the requested documents mixed with a large number of worthless documents.' Sometimes the worthless documents are technically responsive. At other times, the cloaking material is irrelevant junk. 2 A variation of the file dump is the practice of shujfiing documents whose significance is apparent only when read in a certain order." In an attempt to outlaw dumping and shuffling, Federal Rule 34 was amended in 1993 to require that documents be produced "as they are kept in the usual course of business or ... organized and labeled to correspond with the categories in the request.'>' A more sophisticated technique is the adoption of business methods or indexing systems that hide information and thereby defeat discovery. In response to such techniques, Rule 34 provides for discovery of "data compilations from which information can be obtained, translated, if necessary, by the respondent through detection devices." In addition, the rule states that data must be delivered in a "reasonably

2M.Dombroff, Dombroff on Unfair Tactics 34 (1988) ("boxcar" request, so called because it would take a boxcar to deliver the requested documents). §6.6.1 TStewart, The Partners 60 (1982); Dombroff, supra §6.6 note 2, at 35. 2Brazil, supra §6.1 note 1, at 1323-1325 ("burying significant documents in mounds of irrelevant or innocuous material"). 3Dombroff, supra §6.6 note 2, at 35. "Brazil, supra §6.1 note I, at 1325 (recommendation of the ABA Committee on Discovery Abuse).

257

§6.6.1

Discovery

useful form."> Courts implementing this rule can order a party to convert records to a "user-friendly" format. §6.6.2

Subpoenas to Nonpartiesfor Production and Inspection

Prior to 1991, inspection of documents and things in the possession of nonparties could be obtained only by independent action or a subpoena duces tecum in connection with a deposition. 1 In that year, Federal Rule 45 was amended to allow attorneys to issue subpoenas over their signatures commanding nonparties to produce documents and things for inspection and copying. Failure to comply with an attorney-issued subpoena is punishable by contempt. 2 Attorneys exercising the subpoena power are acting in their capacity as "officers of the court'" and must not abuse that power. Rule 45(c)(1) charges that lawyers must "take reasonable steps to avoid imposing undue burden or expense on a person subject to that subpoena." The rule authorizes sanctions against offending lawyers. The sanctions can include "lost earnings as well as reasonable attorney fees." Rule 45(b)(1)requires that prior notice of the subpoena be served on each party, and the Advisory Committee Notes state that the purpose of notice is to afford other parties an opportunity to object to the production or inspection or to include a demand for additional documents or things. Rule 45(c)(2)provides some protection for a subpoenaed nonparty. The nonparty need not appear in person at the place designated for production and inspection unless so commanded (to give testimony at a deposition, hearing, or trial) and has 14 days in which to make written objection to the inspection. If objection is made, the party seeking production must obtain a court order. An order of production must "protect any person who is not a party or an officer of a party from 5Kozlowski v. Sears Roebuck and Co., 73 F.R.D. 73, 76 (D. Mass. 1976). See also In reJapanese Elec. Prods. Antitrust Litig., 494 F. Supp. 1257 (E.D. Pa. 1980) (data produced in printouts that could not be read by opponent's computer-readable tape ordered). §6.6.2 'Wasteful in time and money if the only reason for the deposition was the production of documents. 2Fed. R. Civ. P. 45(e). 3Fed. R. Civ. P. 45(a)(3).

258

Discovery

§6.7.1

significant expense resulting from the inspection and copying commanded."4 The court can quash the subpoena because it creates undue burden, or because it fails to allow reasonable time for compliance, requires excessive travel (100 miles), or seeks disclosure of privileged or protected matter. 5 Rule 4S(c)(3)(B)allows a party to subpoena an expert who has not agreed to be a witness, subject to a showing of need and hardship and subject to payment for the expert's services. The notes of the Advisory Committee make it clear that the rule authorizes a court to require an unretained expert to give testimony for a party who is unable to obtain the substantial equivalent of the testimony elsewhere. 6

§6.7

Depositions

Depositions are of two kinds: discovery, when the purpose is to discover information and obtain admissions and impeachment material; and evidentiary, when the attorneys expect that the deposition will substitute for in-person testimony if the case goes to trial. The deponent might or might not be represented by counsel. Typically, the deposition takes place in a conference room or office, out of the view of the public and the judge. The opportunity and incentive for unethical conduct are great. §6.7.1

Lack of Civility

Assume a typical discovery deposition in a dispute over allegedly defective merchandise. Present are the seller, the seller's attorney, the buyer, and the buyer's attorney. The buyer'S attorney is taking the seller's deposition. The seller and buyer detest each other, and the two attorneys have come to dislike one another during the taking of the deposition, which has been going on for three hours. The buyer's attorney thinks his adversary is obstructing the deposition, while the seller's attorney thinks the deposition has degenerated into repetition bordering on harassment.

4Fed. R. Civ. P. 45(c)(2)(B). 5Fed. R. Civ. P. 45(c)(3)(A).

"Rule 45 advisory committee's note (1991) (a drafted expert, however, might not cooperate with the attorney who issued the subpoena).

259

§6.7.1

Discovery

Under these circumstances, it is perhaps no wonder that attorneys lose their temper and say things better left unsaid. For example: • Don'tJoe me, asshole. You can ask some questions but get off that, I'm tired of you. You could gag a maggot off a meat wagon.' • Asshole ... lying son-of-a-bitch" • Mr. Hairpiece ... (and in reply) big fat tub of shit'' • A: B: A:

B: A:

B: A: B: A: B: A:

I want you to call the judge, Sonny. What did you call me? Sonny. That's what you're acting like. You are the most boorish adult Call him. I've met in a long time. Are you going to call him or am I? I'm going to call him. Do it. Before I do. Jesus Christ.4

Courtesy codes, of course, despair of such behavior," and discipline or judicial sanction may be imposed for extreme behavior;" The answer, however, to incivility between lawyers during depositions depends on their willingness to refrain from the tactics that are described in the following subsections. To minimize disagreements and misunderstandings, attorneys should agree to certain ground rules (for example, length of deposition, production of documents, and consultation off the record) before the deposition begins. It is not sufficient to agree to the "usual stipulations"; the stipulations should be specifically stated on the record.

§6.7.1 'Paramount Communications v. QVC Network, 637 A.2d 34, 54 (Del. 1994). 20ffice of Disciplinary Counsel v. Levin, 35 Ohio St. 3d 4, 517 N.E.2d 892 (1988). 3Rozen, Hairpiece v. Fat Boy, American Law, Oct. 1992, at 82. "Schwarzer; Federal Rules, supra §6.1 note 7, at 711 (quoting R. Adler, Reckless Disregard 158-161 (1986)). 5Compare ABA Lawyer's Creed of Professionalism Rule B.8: "In depositions and other proceedings, and in negotiations, I will conduct myself with dignity, avoid making groundless objections and refrain from engaging in acts of rudeness or disrespect." 60ffice if Disciplinary Counsel, 35 Ohio St. 3d 4,517 N.E.2d 892.

260

Discovery

§6.7.2

§6.7.2

Scheduling Garnes

An attorney seeking to inflict economic pain on her opponent will notice depositions at inconvenient places and times, often on short notice. I This tactic forces the opponent to rush to court for a protective order, which the opponent may be reluctant to do for fear of bothering the judge with an emergency request. On the other side of the case, the opponent, seeking to impede discovery, might claim that a busy schedule makes it impossible to attend depositions at times convenient to other counsel. When the deposition finally takes place, it does so in an atmosphere of suspicion and animosity. There are notice games. An attorney might notice a deposition and then not show up, perhaps falsely claiming car failure or a missed flight connection." An attorney might notice a deposition, wait until the opponent has made plans to attend, and then cancel or reschedule the deposition. In Homer v. Rowan Companies.' defense counsel noticed a deposition of plaintiff's treating physician and then notified plaintiff's counsel, at a time too late to cancel plane reservations, that the deposition was off. Defense counsel then conducted an ex parte interview of the physician, who had not been notified that the deposition was cancelled. Plaintiff's counsel learned of the trick, and sanctions were imposed. Federal Rule 26(c) authorizes courts to order that discovery be conducted without undue burden on counsel and parties. The rule requires that the moving party attempt to settle the dispute before asking for court protection. Judges should be receptive to claims of burden and expense and make liberal use of the option of telephone depositions." The 1993 amendments provide further protection against shortnoticing. While only "reasonable" notice need be given for a deposition,> Rule 32(a)(3) states that a deposition shall not be used against a party who receives less than 11 days notice if the party promptly moves for a protective order requesting that the deposition be rescheduled and the motion is pending at the time of the deposition. §6. 7.2 'Chicago Study, supra §6.1 note 2, at 856. 2Federal Rules of Civil Procedure 30(g) provides that attorney fees and other expenses may be assessed in this situation. 3153 F.R.D. 597 (S.D. Tex. 1994). "Fed. R. Civ. P. 30(b)(7). 5Fed. R. Civ. P. 30(b)(l).

261

§6.7.3

§6.7.3

Discovery

Abusing and Intimidating the Deponent

Disciplinary Rule 7-106(C)(2) provides that a lawyer shall not " [a]sk any question that he has no reasonable basis to believe is relevant to the case and that is intended to degrade a witness or other person. Disciplinary Rule 7-102(a)(l) adds that a lawyer shall not "take action on behalf of his client when he knows or when it is obvious that such action would serve merely to harass or maliciously injure another." Model Rule 4.4 states that a lawyer shall not "use means that have no substantial purpose other than to embarrass, delay or burden a third person." The Code of Litigation Conduct of the Bar of the City of New York specifically condemns irrelevant inquiries into a deponent's personal affairs and irrelevant attacks on a deponent's integrity. 1 There is no question, however, but that attorneys sometimes try to intimidate or wear down opposing parties and witnesses associated with the opposing party. The typical means are numerous, lengthy, inconvenient depositions, with aggressive, repetitive questioning probing tangential and personal matters." For example, in the Dalkon Shield litigation, defense lawyers asked the women complaining of intrauterine infection questions about their sexual practices long before they were fitted with the shield." In Eggleston v. Chicago Journeymen Plumbers" defense counsel questioned a deponent for two and a half days in a deposition limited to the issue of whether the action should be certified as a class action. The questions-one asked whether the deponent's grandmother had told him he had Caucasian blood-were personal and insulting.5 The sad truth is that the Federal Rules do not adequately deal with the problem of repetitious or abusive questioning. Rule 30(d)(l) allows an attorney to direct a witness whom he represents not to answer a question that involves privileged information, or that is designed to embarrass or burden the deponent. Mere irrelevancy, however, is not a ground for directing a client not to respond. Furthermore, attorneys cannot direct non clients not to answer, which leaves unrepresented witnesses largely at the mercy of deposing attorneys. Rule 30(d)(3)authorizes protective §6. 7.3 'Code of Litigation Conduct Rule 6(g). 2Brazil, supra §6.1 note 1, at 1329. 3M. Mintz, At Any Cost: Corporate Greed, Women, and the Dalkon Shield 194195 (1985). 4657 F.2d 890, 897 (7th Cir. 1981). 5Id. at 897-898.

262

Discovery

§6.7,4

orders on a showing that the deposition is "being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party." The rule, however, provides only a hollow remedy because rarely is the judge in the next room ready to decide discovery disputes. Facing an adversary who will not yield to peer pressure or threats to "call the judge,"6 an attorney may be forced to terminate the deposition by leaving. If the deponent is a client, the attorney can tell her client, "We're leaving." When the deponent is a non client, however, the attorney can only suggest that the nonclient should feel free to follow her out the door. There is always the possibility that the nonclient will stay and the deposition will continue. In the attorney's absence, the nonclient witness might make statements devastating to the case. Furthermore, terminating a deposition is risky because a court may decide after the fact that the attorney overreacted. Ground rules-the maximum time for the deposition, breaks, conferring with counsel, objections-should be agreed on in advance. If an agreement cannot be reached, these issues should be decided by the court in advance of the deposition." Fixing these matters in advance is the best protection against abusive and repetitive questioning. §6. 7. 1:

Obstruction

Attorneys representing deponents may attempt to obstruct the deposition by instructing the witness not to answer. Federal Rule 26 provides that" [p]arties may obtain discovery regarding any matter, not privileged, which is relevant ... [or which] appears reasonably calculated to lead to the discovery of admissible evidence." Accordingly, the Rules do not authorize instructing clients not to answer unless the matter inquired into is privileged, protected by the work product doctrine, or so clearly irrelevant or personal as to amount to harassment. 1 Furthermore, as discussed above, attorneys may not instruct a nonclient

6Haydock and Herr, supra §6.5 note I, at 239 ("Questionable attorney conduct can usually be controlled by peer pressure, by noting such conduct on the record, [or] byasking the offending attorney to stop."). 7Dombroff, supra §6.6 note 2, at 45-48. §6.7.4 'Fed. R. Civ. P. 30(d)(I).

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Discovery

not to answer. An attempt to control a nonparty can result in sanctions? or create an unintended attorney-client relationship. 3 Absent a stipulation to the contrary, objections to the form of questions are waived unless made when the questions are asked." Most other objections are preserved and may be asserted at trial, even though not interposed at the deposition, unless the ground for objection might have been obviated or removed if presented at that time.' Unfortunately, there is no unanimity regarding which objections are "obviable" or "waivable"; therefore, many lawyers feel obligated to interpose a great number of substantive objections to avoid waiver or to "protect the witness."6On the other hand, "protection" can become a cover for obstruction.' In fact, many trial lawyers are adept at controlling information by interruptions and objections that tell the witness what to say.8 Some trial manuals suggest that attorneys object to "disrupt the attorney's rapport with the witness" or to "signal the deponent that something is wrong,"? In response to obstructionist tactics-objections and instructions not to answer-Rule 30 was amended in 1993 to require that objections be "concise, non-argumentative, and non-suggestive," and that instructions not to answer be made only to preserve a privilege or to prevent harassment. lOAnattorney faced with improper and obstructive objections or instructions not to answer should have the stenographer's notes marked at the appropriate point. She then can proceed with the balance of the examination or suspend it and move for a court order compelling answers. A request that the reporter's notes be marked immediately after the objection, instruction, or colloquy will assist the

2Haydock & Herr, supra §6.5 note I, at 284 (citing Langston Corp. v. Standard Register Co., 95 ER.D. 386, 390 (N.D. Ga. 1982)). (attorney may suggest to witness that the question need not be answered, but witness must decide on his own). 3Md. Op. 82-34 (1982). 4Fed. R. Civ. P. 32(d)(3)(B). 5Fed. R. Civ. P. 32(b), 32(d)(3)(A). 6Haydock and Herr, supra §6.5 note 1, at 279; Imwinkelried and Blumhoff, supra §6.1 note 2, §6:21. 7Wright v. Firestone Tire and Rubber Co., 93 ER.D. 491 (WD. Ky. 1982); Detective Comics v. Fawcett Publications, 4 ER.D. 237, 239-240 (S.D.N.Y 1944). BFed. R. Civ. P. 30 advisory committee's note (1993). 9Ibid. (statement about trial manuals made by Advisory Committee). IOFed.R. Civ. P. 30(d).

264

Discovery

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reporter in preparing a text to accompany such a motion and may cause the opponent to draw back from such tactics. II §6.7.5

Consultations with the Deponent

Attorneys can attempt to frustrate a discovery deposition by conferring with the deponent "off the record," through whispers or consultations during unilaterally declared recesses. I The discovery rules do not address the issue of consultations during depositions. Absent a stipulation to the contrary, the rule should be that a witness can consult with his counsel about a privilege, but otherwise the deposing lawyer is entitled to the witness's testimony without input from counsel. The underlying purpose of a deposition is to find out what a witness saw, heard or did-what the witness thinks. A deposition is meant to be a question-and-answer conversation between the deposing lawyer and the witness. There is no proper need for the witness's own lawyer to act as an intermediary, interpreting questions, deciding which questions the witness should answer, and helping the witness to formulate answers."

Breaks should be scheduled in advance and not deviated from without agreement. A court might even order that there be no consultations during breaks." Since the discovery rules do not specifically address this matter, counsel who wish to depose without interference should ask for a stipulation and, failing that, move for a protective order. "Haydock and Herr, supra §6.5 note 1, at 239; VV.Barthold, Attorneys' Guide to Effective Discovery Techniques 100 (1975). Sanctions were imposed in International Union of Electrical, Radio, and Machine Workers AFL-CIO v. Westinghouse Electric Corp., 91 F.R.D. 277 (D.D.C. 1981). §6. 7.5 'See Flegal, Discovery Abuse: Causes, Effects and Reform, 3 Rev. Litig 1, 20 (1982) (discussing the common techniques of "horse shedding," objections, and colloquy). See also Suplee, Depositions: Objectives, Strategies, Tactics, Mechanics and Problems, 2 Rev. Litig. 255,297 (1982). 2Hall v. Clifton Precision, 150 F.R.D. 525, 528 (E.D. Pa. 1993) (citing cases). See also Code of Litigation Conduct Rule 6(f) ("Deponent's counsel should not attempt to confer with the deponent while a question is pending and should limit any private discussions with the deponent during the deposition to circumstances in which it is necessary to determine whether a privilege should be asserted or otherwise necessary to protect the rights of the witness or party."). 3Cf. Perry v. Leake, 488 U.S. 272, 109 S. Ct. 594, 102 L. Ed. 2d 624 (1989) (order not to confer during 15-minute recess; no violation of sixth amendment right to counsel).

265

§6.7.6

Discovery

§(i.7. (i

Perjury and Changing Answ.ers

Attorneys and parties are under a legal! and ethical? duty to correct incomplete or inaccurate answers given at depositions. This does not mean, however, obliteration of the original response.>Federal Rule 30(e) provides that a deponent may, on request, review a deposition transcript and "sign a statement reciting any changes in form or substance and the reasons therefore." This is appended to the original transcript. While counsel and deponent may thus explain a damaging statement, they cannot preclude its use at trial. 4 In addition, if further cross-examination is necessitated by the changes, logically the aggrieved party should be permitted to reopen the deposition. 5 §(i.

7. 7

Deposing Attorneys

The attorney deposition (deposition of opposing counsel) has become an increasingly popular tactic. Fortunately, courts have recognized that the noticing of opposing counsel for a deposition is likely the prelude to harassment, rather than legitimate discovery. That is not to say that counsel may never be deposed, since counsel might have inadvertently injected herself into the controversy, might be called as a witness, and might be disqualified as advocate on that account. 1 But the proponent of such discovery should bear the burden of establishing that no other means is available for obtaining the information sought, that the information is relevant and nonprivileged, and that the information is crucial to the preparation of the case.? In short, the courts correctly

§6. 7.6 IFed. R. Civ. P. 26(e). 2ABA Formal Op, 93-376 (1993) duty to correct false statements, even though to do so would reveal client confidences). 3Combs v. Rockwell Inti. Corp., 927 F.2d 486,489 (9th Cir. 1991) (case dismissed after plaintiff's lawyer, with his client's approval, materially altered a deposition). 4Allen and Co. v. Occidental Petroleum Corp., 49 F.R.D. 337, 340 (S.D.NY 1970). See also Sander Indus. Inc. v. Carborundum Co., 478 F. Supp. 196 (N.D. Ohio 1980) (wholesale excision of pages not a "change" allowed by rule). 5Colin v. Thompson, 16 F.R.D. 194 (W.D. Mo. 1954); De Seversky v. Republic Aviation Corp., 2 F.R.D. 113 (E.D.N.Y 1941). Reporting costs may be ordered to be paid by deponent whose changes necessitated the additional session. C£ Colin, 16 F.R.D. at 195. §6. 7.7 'See discussion in Chapter 4. 2Shelton v. American Motors Corp., 805 F.2d 1323,1327 (8th Cir. 1986). See also Spectra-Physics v. Superior Ct., 198 Cal. App. 3d 1497,244 Cal. Rptr. 258 (1988); Estate

266

Discovery

§6.8

view the "taking of opposing counsel's deposition as a negative development in the area of litigation, and one that should be employed only in limited circumstances."? According to one commentator, the lawyer on the receiving end should "file a motion or request through the court that the noticing party be required to make a written, detailed, and extensive offer of proof as to what that party would expect to be able to elicit or prove through [the] deposition."4

§6.8

Physical Exatninations

A physical or mental examination can be ordered when a party's physicalor mental condition is in controversy. 1 Of course, the ability to harass a party by inconvenient scheduling is minimized by the fact that an adverse examination must be pursuant to court order. It is possible that an adverse examining physician might harass a party during an examination. If harassment is anticipated, counsel could ask to be present during the examination. While a court might grant such a motion.? it is more likely that the examinee's physician would be permitted to attend. 3 Mental examinations are more problematic. For example, some defense counsel in personal injury cases seek to compel personal injury plaintiffs to undergo the Minnesota Multiphasic Personality Inventory (MMPI), based on claims that the plaintiff's symptoms are the result of malingering or functional overlay. The MMPI includes inquiries relating to sexual, behavioral, and moral beliefs and conduct, which may be of Ruchti (Hedleyv. Ruchti), 12 Col. App. 4th 1593,16 Cal. Rptr. 2d 151 (1993) (upholding protective order and sanctions). 3Imwinkelried and Blumoff, supra §6.1 note 2, §6.03 (Supp. 1994); see also Comment, Suppose You Want to Depose Opposing Counsel: Shelton v. American Motors Corp., 73 Minn. L. Rev. 1116 (1989). For cases adopting the Shelton view, see, e.g., West Peninsular Title Co. v. Palm Beach, 132 F.R.D. 301 (S.D. Fla. 1990); Advance Sys., Inc. v. APV Baker PMC, 124 F.R.D. 200 (E.D. Wis. 1989); McMurry v. Eckert, 883 S.W2d 828 (Ky. 1992). 4Dombroff, supra §6.6 note 2, at 61. §6.8 IFed. R. Civ. P. 35. 2Cf. Warrick v. Brode, 46 F.R.D. 427 (D. Del. 1969) (personal physician allowed to attend); Whanger v. American Family Mut. Ins. Co., 58 Wis. 2d 461, 207 N.W2d 74

(1973) (special circumstances may justify counsel's presence). 3Sanden v. Mayo Clinic, 495 F.2d 221 (8th Cir. 1974).

267

§6.8

Discovery

embarrassing. One court held that no party should be required to submit to such an examination except under strict conditions. The conditions are that the probative value of the inquiry outweighs the intrusion into the examinee's privacy, the questions are limited to those needed for a meaningful interpretation, the examinee's medical privilege is safeguarded, and disclosure is confined to the needs of the litigation."

§6.9

Discovery frorn Experts

As discussed in Chapter 5, ex parte contacts with retained experts will be considered to be an interference with the attorney-client privilege. I Similarly, in some jurisdictions ex parte contacts with treating physicians will be viewed as an interference with the physician-patient relationship." Once the case has been filed, attorneys must use the tools of discovery.Federal Rule 26, as amended in 1993, requires full disclosure of the potential testimony of retained experts and allows follow-up depositions if necessary. Consultants may not be deposed except under exceptional circumstances. Finally, experts who are fact witnesses (a treating physician, for example) may be deposed without court order.

§6.10 Potential Probletns with Mandatory Disclosures of "Core" Infor-mation under Rule 26 As discussed above, Federal Rule 26 requires attorneys to disclose, without request, witnesses likely to have discoverable information relevant to disputed facts alleged with particularity and a description of documents and tangible things in the party's possession relevant to disputed facts. The efficacy of mandatory disclosure depends on attorneys taking seriously their obligation as "officers of the court." I While some authors

4Haynes v. Anderson, 304 Minn. 185,232 N.W.2d 196 (1975). §6.9 'See §5.6. 2See §5.5. §6.10 'Fed. R. Civ. P. 26 advisory committee's note (1993).

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Discovery

§6.11.1

are optimistic." others believe that gamesmanship will prevail." Of concern is the "alleged with particularity" standard, which lends itself to a narrow construction, which in turn may lead to satellite litigation over the scope of what is required to be disclosed." The dissent of Justices Scalia, Souter, and Thomas to the adoption of Rule 26 envisioned a further layer of discovery with increased burdens on judges "as parties litigate about what is relevant to disputed facts.">

§6.11 Sanctions Federal Rules 26 and 37 provide for judicially imposed sanctions for discovery violations. 1 These are discussed in §6.11.1; preclusion and dismissal are discussed in §6.11.2. In addition, a court might allow a discovery violation to be introduced into evidence as an admission by conduct. This is discussed in §6.11.3. There is always the possibility of discipline if the violation appears to have been deliberate. Finally, some courts seem to have recognized a "tort of discovery," which is discussed in §6.11.4. §6.11.1

Sanctions under Rules 26 and 37

Federal Rules 26 and 37 authorize courts to do whatever is necessary to ensure fairness in the discovery process. Ordinarily, it is unnecessary for a court to rely on its inherent power to control litigation because Rules 26 and 37 sweep broadly,' though a court can doubtless fall back on notions of inherent power to deal with an abuse that does 2Schwarzer, Slaying the Monsters, supra §6.1 note 7, at 178; Note, supra §6.1 note 7. 3Coleman, Civil Disclosure, 81 A.B.A.]. 76 (Oct. 1995); Hench, supra §6.1 note 7, at 179. 4Hench, supra §6.1 note 7, at 206. 5113 S. Ct. Rptr. no. 15, at cccix (1993). See also Coleman, supra note 3 (noting that 28 of 112 federal districts have opted out of the mandatory disclosure provisions, creating "balkanization" and an incentive for forum shopping). §6.11 'See generally Haydock and Herr, supra §6.5 note I, ch. 8;]. Gorelick, S. Marzen, and L. Solum, Destruction of Evidence ch. 3 (1989). §6.11.1 'Societe Internationale v. Rogers, 357 U.S. 197,78 S. Ct. 1087,2 L. Ed.

2d 1255 (1958).

269

§6.11.1

Discovery

not fit squarely within the discovery rules." Prior to 1993, Rule 11 could be used to impose sanctions for discovery violations. In 1993, however, Rule 11 was made inapplicable to "disclosures and discovery requests, responses, objections, and motions that are subject to the provisions of Rules 26 through 37."3 The following principles govern the imposition of sanctions under Rules 26 and 37: 1. The choice of sanction iswithin the trialjudge'S sound discretion.4 2. Permissible purposes include compensating the court and the parties for added expense, compelling discovery, deterring others, and punishing the guilty party and attorney. 5 3. The extreme sanctions authorized by Rule 37-dismissal and default judgment-should be imposed only on a finding of bad faith or willfulness.6 4. Attorney fees and expenses must be assessed against the loser of a contested discovery matter unless the judge is convinced that the loser's position was substantially justified, or that it would be inequitable to assess costs." 5. Monetary sanctions can be apportioned between lawyers or between lawyer and client to reflect relative responsibility.8 2Chambers v. Nasco, Inc., 501 U.S. 32, III S. Ct. 2123, 115 L. Ed. 2d 27 (1991). See discussion in Chapter 2. See also 8A C. Wright and A. Miller, Federal Practice and Procedure 603-604 (1994) (inherent power to sanction a party for calling a witness who has not been listed in response to a request to name witnesses with relevant information). 3Fed. R. Civ. P. I I (d). "Bareto v. Citibank N.A., 907 F.2d 15, 16 (1st Cir. 1990); 8A Wright and Miller, supra note 2, at 605. 5Carlucci v. Piper Aircraft Corp., 775 F.2d 1440, 1447 (11th Cir. 1985). 6Societe Internationale v. Rogers, 357 U.S. 197, 78 S. Ct. 1087, 2 L. Ed. 2d 1255 (1958); but see National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639,96 S. Ct. 2778,49 L. Ed. 2d 747 (1976) (Court upheld dismissal as a sanction for gross neglect). Cases illustrating bad faith include Combs v. Rockwell International Corp., 927 F.2d 486 (9th Cir. 1991) (dismissal upheld where party authorized attorney to falsely alter answers on a deposition), and Coleman v. Smith, 814 F.2d 1142, 11461147 (7th Cir. 1987) (default judgment upheld for attorney's willful noncompliance with orders where client failed to exercise reasonable diligence in monitoring the litigation). 7Fed. R. Civ. P. 37(a)(4), (b) (1993). 8A Wright and Miller, supra note 2, at 657-658 ("The great operative principle of Rule 37(a)(4) is that the loser pays.") BRule26(g) does not appear to contemplate sanctions againstnonsigning attorneys. Rule 37, however, applies to any attorney responsible for the violation. For cases in which liability was divided between counsel, see Itel Containers Int!. Corp. v. Puerto Rico Marine Management, 3 Fed. R. Serv. 3d 671 (D.N]. 1985);]. M. Cleminshaw Co. v. City of Norwich,

270

Discovery

§6.11.1

6. Like Rule 11, the discovery rules require reasonable investigation of the facts, a reasonable conclusion that the facts support the claim, knowledge of the applicable law, a reasonable conclusion that the law supports the claim (or a bona fide effort to change the law), and a proper purpose. 9 In one respect, the discovery rules go beyond the general requirements of Rule 11. Discovery requests must be reasonable and not "unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount in controversy, and the importance of the issues at stake in the litigation." 10 This provision requires counsel to conduct discovery in a cost-efficient manner. Courts should invoke this principle in supervising discovery, and the threat of sanctions should cause counsel to draft discovery responses appropriate to the size of the case and the nature of the issues. Assume a case in which the receiving lawyer objects to interrogatories as burdensome and the sending lawyer believesthe interrogatories are . proper. The sequence of events under Rules 26 and 37 will be as follows: 1. The sending lawyer makes a good faith effort to reach an agreement with the opponent. II 2. After failure of the good faith effort, the sending lawyer seeks a court order to require that the interrogatories be answered. 12 3. The court enters an order, either denying the motion or granting the relief in whole or in part. 4. The court holds a hearing, on proper notice, to allow the loser to show why expenses and fees should not be assessed as a sanction. The court then orders the loser to pay the winner's expenses and attorney fees unless it would be unjust or the loser's position was substantially justified. 13 93 F.RD. 338 (D. Conn. 1981); Ortiz v. Barrett, 222 Va. 118,278 S.E.2d 833 (1981). A disagreement between lawyer and client over respective fault may require a motion to withdraw. See discussion in Chapter 2 and in Gorelick, Marzen, and Solum, supra §6.11 note 1, at 134-137. 9Fed. R Civ. P 26(g)(2). See discussion of these requirements in Chapter 2. IOFed.R. Civ. P 26(g)(2)(C). IIFed. R Civ. P. 37(a)(4) (a good faith effort to resolve the matter informally is a prerequisite to an award of attorney fees and expenses).

12Fed.R. Civ. P. 26(c) (protective orders), 37(a) (motions to compel discovery). 13Fed. R. Civ. P 37(a)(4).

271

§6.11.1

Discovery

5. Assume that the court orders the interrogatories to be answered within 20 days. If the receiving party and lawyer do not comply with the order, the court may do one or more of the following: a. Hold the individual or individuals to whom the order was directed in criminal or civil contempt." Courts have held attorneys in contempt for failing to produce witnesses at court-ordered depositions," respond to orders compelling answers to interrogatories" or the production of documents.!? and provide narrative statements of expected testimony or other similar reports pursuant to pretrial orders. 18 b. Order that certain matters be taken as established, or preclude the party from litigating certain matters. 19 This remedy is discussed in §6.11.2. c. Dismiss the action in whole or in part." This is also discussed in §6.11.2. d. In lieu of or in addition to the above remedies, require payment of attorney fees and expenses. This is a mandatory penalty unless the refusal to comply with the court order was justified." §6.11.2

Preclusion and Dismissal

One of the most effective remedies that a court can employ to deter incomplete or evasive responses to discovery requests is an order

14Fed.R. Civ. P. 37(b)(I), (2)(D). See the discussion of contempt in §2.4. 15Pemberton v. Tieman, 117 Ill. App. 3d 502, 72 Ill. Dec. 927, 453 N.E.2d 802 (1983) (failure to produce corporate officer of a party). But see Fremont Energy Corp. v. Seattle Post Intelligencer, 688 F2d 1285 (9th Cir. 1982) (contempt not available for mere failure to answer certain questions). 16Edger v. Slaughter, 348 F2d 770 (8th Cir. 1977). 17Anderson V. St. Mary's Hosp., 101 Ill. App. 3d 596, 56 Ill. Dec. 936, 428 N.E.2d 528 (1981) (failure to produce documents for an in camera inspection); Payne V. CoatesMiller, Inc., 68 Ill. App. 3d 601, 25 Ill. Dec. 127, 386 N.E. 2d 398 (1979). See also Re Serra, 484 F2d 947 (9th Cir. 1973) (instructing physician not to prepare a written report to impede discovery). IBChapman V. Pacific Tel. and Tel. Co., 613 F2d 193 (9th Cir. 1979). 19Fed.R. Civ. P. 37(b)(2)(A), (B). 2oFed. R. Civ. P. 37(b)(2)(C). 2lFed. R. Civ. P. 37(b)(2).

272

Discovery

§6.11.2

excluding the evader's proof at trial. 1 For example, a court may exclude the testimony of a lay witness whose identity was not disclosed in answer to an interrogatory. 2 Similarly, the court may exclude an expert's testimony if a party has sandbagged his opponent by failing to supplement answers to interrogatories relating to experts who were not retained at the time the interrogatories were served" or who were not "formally retained" until the trial had begun." The 1993 amendments require preclusion for failure to make the mandatory disclosures required by Federal Rule 26 unless the failure is harmless or substantial justification for the failure is shown." The Rule 26 requirements are comprehensive-relevant documents and persons with knowledge of relevant matters, information about experts expected to testify, and witness and exhibit lists-and preclusion of undisclosed matters is a potent sanction. As noted by the Advisory Committee, "[T]his automatic sanction provides a strong inducement for disclosure of material that the disclosing party would expect to use as evidence, whether at a trial, at a hearing, or on a motion.?" In addition to or in lieu of preclusion, Rule 37 authorizes courts to impose other sanctions, such as awarding expenses and attorney fees and informing the jury of the failure to disclose. The latter remedy might be particularly appropriate in a case in which the offending party did not disclose the identity of a person possessing information favorable to the opponent. 7 Preclusion orders can also bolster the utility of interrogatories as a device for narrowing the issues and preventing unfair surprise. Interrogatories may seek information relating to the precise claims and contentions of parties, and the answers to those interrogatories may limit the issues to be resolved." For example, in a contract action an interrogatory

§6.11.2 'Fed, R. Civ. P. 37(b)(2)(B)(c);Annotation, Answers to Interrogatories as Limiting Answering Party's Proof at Trial, 86 A.L.R.3d 1089. zAdmiral Theatre Corp. v. Douglas Theater Co., 585 F.2d 877,897 (8th Cir. 1978) (failure to produce documents pursuant to Rule 34); D'Agostino v. Schaffer, 133 A.2d 45 (NJ. Super. 1957). 3Weiss v. Chrysler Motors Corp., 515 F.2d 449 (2d Cir. 1975). "Sturdivant v. Yale-New Haven Hosp., 2 Conn. App. 103,476 A.2d 1074 (1984). 5Fed. R. Civ. P. 37(c)(I). 6Fed. R. Civ. P. 37 advisory committee's note (1993). 7Id. 8See, e.g., Fed. R. Civ. P. 33(b).

273

§6.11.2

Discovery

sought the details of the alleged breaches of contract. The receiving party responded by describing certain actions. The court later refused to permit proof of breaches other than those listed in the response to the interrogatory? In a personal injury case, an answer indicating that the plaintiff was "fully recovered" precluded testimony from a physician who examined the plaintiff just before trial. 10 Indeed, since interrogatories may run to a party's contentions and legal theories, II incomplete or evasive responses to such interrogatories can have disastrous consequences for the evader. The party receiving the response has a right to rely thereon and to object to the introduction of evidence inconsistent with the response. 12 While preclusion is the prescribed remedy for simple neglect under Rule 26, courts should temper the application of this rule with mercy. The result of a nonwillful failure to list a witness should not be preclusion if the opponent's rights can be vindicated by a lesser remedy, such as a continuance and payment of attorney fees. Sanctions even more drastic than preclusion are provided for in Rule 37(b). Specifically,facts may be deemed established in accordance with the claim of the party prevailing on a motion for sanctions, 13 pleadings may be stricken;" or default may be entered 15 following disobedience of a court order. 16

9Kearsarge Computer, Inc. v. Acme Staple Co., 116 N.H. 705, 366A.2d467 (1976). IOCastaline v. Los Angeles, 47 Cal. App. 3d 580, 121 Cal. Rptr. 786 (1975). See also Branch v. Emery Transp. Co., 53 NJ. Super. 367, 147 A.2d 556 (1958) (difference between injuries described in discovery responses and injuries claimed at trial). I I Stark v. Allis-Chalmers and Nw. Roads, Inc., 2 Wash. App. 399, 467 P.2d 854 (1970). See also Medivox Prods., Inc. v. Hoffman-LaRoche, Inc., 107 NJ. Super. 47, 256 A.2d 803 (1969) (court excluded proof of fraud after answer to interrogatory seeking details of counterclaim disclosed no reference to any contention relating to fraud). 12Seealso Riverside Memorial Mausoleum, Inc. v. Sonne blick-Goldman Corp., 80 ER.D. 433 (E.D. Pa. 1978) (summary judgment may result from a preclusion order). 13Fed.R. Civ. P. 37(b)(2)(A) (violation of court order). Regarding orders that jurisdiction be deemed established, or that a party be precluded from offering proof on such issues, see Insurance Corp. of Ireland, Ltd. v. Companie des Bauxites de Guinee, 456 U.S. 694, 102 S. Ct. 2099, 72 L. Ed. 2d 492 (1982); Transamerica Interway, Inc. v. Commercial Union Assurance Co. of S. Afr. Ltd., 97 ER.D. 419 (S.D.NY 1983); Moody v. Schwartz, 97 ER.D. 741 (S.D. Tex. 1983). 14Fed.R. Civ. P. 37(b)(2)(C) (violation of court order). 15Id. 16Fed.R. Civ. P. 37(d) (failure of a party to attend own deposition or serve answers to interrogatories or a written response to a request for production).

274

Discovery

§6.11.3

The Supreme Court has approved dismissal as a remedy for nonwillful conduct. 17 This remedy, however, should be reserved for the most flagrant abuses and should be fully supported by the trial court record. 18 Before dismissing a case, the trial court should be satisfied that no lesser remedy will be effective. §6.11.3

Introduction of Discovery Abuse before the Jury

Preclusion orders limit the evidence that will be heard by the jury. Discovery abuse can be considered by the jury in two ways. First, assume that the court accepts the application of the doctrine of admission by conduct to discovery misconduct. I If the misconduct appears to be a willful attempt by the client to hide relevant information, the conduct supports the inference that the party believed the case to be weak. 2 This is an application of the spoliation inference, commonly associated with the destruction of documents." In the more likely event that the misconduct was by the client's attorney, the theory of admissibility would be that the acts and statements of the attorney, as agent of the client, are vicariously admissible against the client." Courts will be cautious in admitting such evidence, out of fear that to do so would cause the attorney to feel compelled to testify to explain her conduct, perhaps revealing matters within the attorney-client privilege or work product doctrine. 5 The other way in which the jury may learn of discovery misconduct is by being told about it by the judge. This remedy is specifically 17National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 96 S. Ct. 2778,49 L. Ed. 2d 747 (1976); see also Epstein, Corcoran, Krieger, and Carr, An Update on Rule 37 Sanctions after National Hockey League v. Metropolitan Hockey Club, Inc., 84 F.R.D. 145 (1980). ISPatton v. Aerojet Ordinance Co., 765 F.2d 604, 608 (6th Cir. 1985); Quality Prefabrication, Inc. v. Daniel]. Keating Co., 675 F.2d 77, 81 (3d Cir. 1982). §6.11.3 'Imwinkelried, A New Antidote for an Opponent's Pretrial Discovery Misconduct: Treating the Misconduct at Trial as an Admission by Conduct of the Weakness of the Opponent's Case, 1993 B.YU. L. Rev. 793. 2Id. at 800. 3Id. at 800-803; Gorelick, Marzen, and Solum, supra §6.11 note 1, at 31-43. See discussion of spoliation in Chapter 5 of this book. "Fed. R. Evid. 801(d)(2)(C), (D); United States v. McKeon, 738 F.2d 26 (2d Cir. 1984) (attorney's opening statement admissible against client at retrial); Irnwinkelried, supra note I, at 812-817. 5Imwinkelried, supra note I, at 818.

275

§6.11.3

Discovery

authorized under Rule 37(c)(l) for failure to make mandatory disclosures. A judicial disclosure of the misconduct might be an appropriate remedy when there has been an attempt to hide evidence and preclusion is too harsh. The judge might further instruct the jury that it can draw an adverse inference from the misconduct. §6.11.4

The Tort of Discovery

A number of opinions have dealt with claims that discovery misconduct is actionable in tort. More often than not, such claims have alleged defamation (use of a discovery device to provide irrelevant and defamatory matter to the press)! or abuse of process? (use of legal "process" for an "ulterior" purpose). Defamation claims have generally been defeated by the rule that statements in pleadings are nonactionable." Claims for abuse of process have generally been defeated for lack of proof of "ulterior purpose."! On the other hand, when it has been shown that some discovery device, or "process," has been used for an ulterior purpose, lawsuits have been allowed to proceed. For example, the noticing and taking of a deposition to induce a party to enter the forum in order to facilitate his arrest in connection with an unrelated matter was held to be actionable.' Moreover, an Arizona court ruled that resorting to unnecessary deposition procedures and motions for protective orders and the like in order to burden an opponent with excessive attorney fees and legal expenses constitutes the tort of abuse of process." Preventive Ethics Checklist

o

o

Read the discovery rules carefully. Know what your client knows and what documents your client possesses.

§6.11.4 'Twyford v. Twyford, 63 Cal. App. 3d 916,134 Cal. Rptr, 145 (1976) (requests to admit); Thornton v. Rhoden, 245 Cal. App. 2d 80, 53 Cal. Rptr. 706 (1966) (depositions). 2 Thornton ,245 Cal. App. 2d 80,53 Cal. Rptr. 706. 3See cases cited supra note I. "See, e.g., Thornton, 245 Cal. App. 2d 80, 53 Cal. Rptr. 706 (ordinary steps of taking, transcribing, and filing deposition a use of process and not an abuse of process). SHopper v. Drysdale, 524 F Supp. 1039 (D. Mont. 1981). 6Nienstedt v. Wetzel, 133 Ariz. 348, 651 P.2d 876 (Ct. App. 1982).

276

Discovery

D D D D D D D D

§6.11.4

Decide, objectively and reasonably, what is privileged and within the work product doctrine. Regard discovery as a cooperative exchange of discoverable information. Try to resolve discovery disputes without going to court. Ask for a protective order before depositions if opposing counsel has a reputation for intimidation or improper coaching. Without a stipulation, there is no right to consult with the deponent except during scheduled breaks. Establish ground rules for depositions in advance. An attorney has no right to advise or control a nonparty. Treat deponents and opposing counsel courteously.

277

7 Lawyers, Free Speech, and the Media

§7.1 §7.2

§7.3 §7.4

Introduction Extrajudicial Comment §7.2.1 Gag Orders §7.2.2 Prosecutors §7.2.3 Defense Counsel §7.2.4 Civil Cases Criticizing Judges Racist and Sexist Comments

§7.1

Introduction

The focus of this chapter is on the ethics of "trying one's case in the media." Out-of-court statements to influence jurors and the public have traditionally been frowned on, I but the norm of no comment has changed to one offair comment. This chapter describes the approach of the ethical codes and how judges use the ethical codes to fashion gag §7.1

IC. Wolfram, Modern Legal Ethics 634 (1986).

279

§7.1

Lawyers, Free Speech, and the Media

orders. Also discussed in this chapter are orders prohibiting attorneys and litigants from disclosing information obtained through discovery. In addition, we discuss lawyers' criticism of judges and other counsel.

§7.2

Extrajudicial Conunent

" [A]ttorneys have a professional responsibility to protect the fairness of the judicial process," but "this does not mean that lawyers surrender their First Amendment rights [by engaging in litigation]." 1 The potential for conflict is obvious, since a lawyer may wish to exercise her "First Amendment rights" by informing the press about the merits of a pending case, and a judge may feel the "fairness of the judicial process" is compromised by exposing potential jurors to extrajudicial information. Goaded by the criticism of the Supreme Court in Sheppard v. Maxwell,2 the American Bar Association published detailed fair trial/free press standards in 1968 to guide judges and lawyers in protecting the constitutional rights of both the accused and the public." These aspirational guides were made mandatory-with respect to lawyers-by their subsequent incorporation into the disciplinary rules (as DR 7-107) of the 1969 Code of Professional Responsibility. 4 Disciplinary Rule 7-107 is unnecessarily complex. It contains ten sections, lettered (A) through (j), many of which contain numerous subsections. Disciplinary Rule 7-107(C), for example, lists 11 things a lawyer mqy say without being subject to discipline. Some sections-DR 7§7.2 'National Broadcasting Co. v. Cooperman, 116 A.D.2d 287, 501 N.YS.2d 405 (1986) (order restraining lawyers from extrajudicial comment in the "stun gun" case; reversed on appeal because the trial judge did not consider other alternatives). 2384 U.S. 333,86 S. Ct. 1507,16 L. Ed. 2d 600 (1966). Justice Clark's opinion is highly critical of the judge for failing to control the press, the lawyers, and the police, who created the "carnival atmosphere" of "Doctor Sam's" trial. "More specifically, the trial court might well have proscribed extrajudicial statements by any lawyer, party, witness or court official which divulged prejudicial matters, such as the refusal of Sheppard to submit to interrogation or take any lie detector tests." Id. at 361, 86 S. Ct. at 1521-1522, 16 L. Ed. 2d at 619. 3ABA Standards for CriminalJustice, Fair Trial and Free Press (1968); Note,Judicial Restrictions on Attorneys' Speech Concerning Pending Litigation: Reconciling the Rights to Fair Trial and Freedom of Speech, 33 Vand. L. Rev. 499, 500 (1980) (the ABA standards were also influenced by the Warren Commission report, which was highly critical of the publicity surrounding the arrest of Lee Harvey Oswald). +DR 7-107; Wolfram, supra §7.1 note 1, at 633.

280


§7.2

107(D), for example-proscribe only comments that are "reasonably likely" to interfere with a fair trial, while other sections-DR 7-107(B), for example-contain a laundry list of subjects on which comment is forbidden, regardless of the.likelihood of prejudice. Other sections-DR 7107(G), for example--list forbidden subjects, followed by a catchall phrase, "any other matter reasonably likely to interfere with a fair trial." In addition to suffering from complexity, DR 7-107 is unconstitutional to the extent that it purports to prohibit certain comments without any showing of likely effect on the administration of justice. 5 Recognizing the constitutional infirmity of the 1968 fair trial/free press standards(and, by implication, DR 7-107), in 1978 the ABA revised the standards to proscribe only lawyer comments that (l) pose a "clear and present danger to the fairness of a trial"? and (2) fit within a list of six items." The commentary to Standard 8-1.1 indicates that the burden is always on the party objecting to the attorney's comments to show potential prejudice. The fact that the comment falls within the six-item list should not shift the burden to the attorney to prove that her comment did not create a clear and present danger to the fairness of the trial. 9 As adopted in 1983, the Model Rules followed the format of the 1978 fair trial/free press standards. Model Rule 3.6(a) prohibited 5Hirschkop v. Snead, 594 F.2d 356,367 (4th Cir. 1979); Chicago Council of Lawyers V. Bauer, 522 F. 2d 242 (7th Cir. 1975), cert. denied, 427 U.S. 912, 96 S. Ct. 320 I, 49 L. Ed. 2d 1204 (1975). 6ABA Standards for Criminal Justice, Fair Trial and Free Press, Standard 8-1.1 commentary at 8.12 (1978). 7Compare United States V. Ford, 830 F.2d 596, 600 (6th Cir. 1987), in which the appellate court set aside a gag order restraining U.S. Representative Harold Ford from questioning the government's motives in prosecuting him because the "clear and present danger" test was not satisfied. SABA Standards for Criminal Justice Fair Trial and Free Press, Standard 8-1.1 (1978), lists: (i) prior records, character of the accused, or opinion of the accused's guilt or innocence or the merits of the case; (ii) the existence or contents of a confession or the accused's refusal to make a statement; (iii) the performance of any test or the accused's failure to take a test; (iv) the identity, testimony or credibility of prospective witnesses; (v) the possibility of a guilty plea or other disposition; and (vi) information the lawyer has reason to know would be inadmissible at trial. 9ABA Standards for Criminal Justice, Fair Trial and Free Press, Standard commentary at 8.13 (1978).

8-1.1

281

§7.2


lawyer. comments that the lawyer should reasonably expect to be disseminated by the media and to have a "substantial likelihood of materially prejudicing an adjudicative proceeding." Model Rule 3.6(b) provided that a statement "referred to in paragraph (a) ordinarily" is likely to have a prejudicial effect when it refers to a criminal matter or a civil case triable to a jury and when it fits within a six-item list, roughly corresponding to the six-item list in Standard 8-1.1. The six presumptively prejudicial topics were 1. character, credibility, reputation, or criminal record of a party, suspect in a criminal investigation, or witness, or the identity of a witness, or the expected testimony of a party or witness; 2. in a criminal case or proceeding that could result in incarceration, the possibility of a plea of guilty to the offense or the existence or contents of any confession, admission, or statement given by a defendant or suspect or that person's refusal or failure to make a statement; 3. the performance or results of any examination or test or the refusal or failure of a person to submit to an examination or test, or the identity or nature of physical evidence expected to be presented; 4. any opinion as to the guilt or innocence of a defendant or suspect in a criminal case or proceeding that could result in incarceration; 5. information the lawyer knows or reasonably should know is likely to be inadmissible as evidence in a trial and would if disclosed create a substantial risk of prejudicing an impartial trial; and 6. the fact that a defendant has been charged with a crime unless accompanied by a statement explaining that the charge is merely an accusation, and that the defendant is presumed innocent until and unless proven guilty. Model Rule 3.6 went on to list seven items on which attorneys may make public statements "without elaboration." These items have been substantially retained in the 1994 revision of the rule-which is set out later in this section. While Model Rule 3.6 was much clearer than DR 7-107, the rule presented problems of construction. First, instead of using "reasonably 282


§7.2

likely" or "clear and present danger"-the terms associated with prior restraint of speech lO-the drafters adopted a new term, "substantially likely," suggesting an intermediate test. According to the principal handbook on the Model Rules, however, "substantially likely" was intended to be the equivalent of "clear and present danger." 11 Second, Model Rule 3.6 announced a general rule by which lawyers could be disciplined if prejudice was foreseeable (Model Rule 3.6(a)), followed by a list of topics on which prejudice was presumed unless the lawyer could prove to the contrary (Model Rule 3.6(b)). Model Rule 3.6(a) thus proscribed any statement that carried a substantial risk of prejudice, not merely statements fitting within Model Rule 3.6(b). This created a trap for a lawyer who might assume, for example, that she could not be disciplined for a statement concerning a nonjury civil trial because nonjury civil trials were not mentioned in Model Rule 3.6(b). Furthermore, Model Rule 3.6 appeared to shift the burden to the attorney to disprove prejudice if the statement fell within the list in Model Rule 3.6(b). The leading authorities disagreed, however, about the construction of the phrase "ordinarily is likely to have such an effect" in Model Rule 3.6(b). Hazard interpreted this language as intended to shift the burden.I? while Wolfram argued to the contrary because the former interpretation would raise constitutional concerns. 13 In 1991, in the case of Gentile v. State Bar if Nevada, 14the Supreme Court upheld the constitutionality of Model Rule 3.6's "substantial likelihood of material prejudice" test as applied to a defense attorney's press conference in which the attorney alleged that the police, rather than his client, stole drugs worth $300,000 from a storage facility. In Gentile, there were two four-person opinions. Justice Kennedy treated the press conference as pure political speech, protected unless it posed a "clear and present danger" to the fairness of the trial, and deemed the Nevada rule (essentially the same as Model Rule 3.6) to be void for vagueness because Gentile had been misled by the "safe harbor" provisions of rule 3.6(c)15into believing he could ethically describe his defense. Justice IOSeegenerally id. at 8.8. IIG. Hazard,Jr., and W. Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct §3.6: 102 (2d ed. 1990). 12Id. 13Wolfram, supra §7.1 note 1, at 634. 1+501U.S. 1030, III S. Ct. 2720,115 L. Ed. 2d 888 (1991).

283

§7.2


Rehnquist, on the other hand, opined that lawyers are officers of the court whose speech about trials can be regulated under a balancing test," and that Gentile was not misled by the safe harbor provisions of Nevada Rule 3.6(c). Justice O'Connor was thus the swing vote. She agreed with Justice Rehnquist that lawyers' speech is subject to greater restraint (thus upholding the test in Model Rule 3.6), but believed that Gentile was misled by the safe harbor provisions of Nevada Rule 3.6(c). She thus provided the fifth vote to reverse the imposition of sanctions. In reaction to Gentile) the ABA House of Delegates amended Model Rule 3.6 in 1994. The amendment to Model Rule 3.6 moved subsection (b), the six-item list of presumptively prejudicial topics, to the commentary;'? redesignated subsection (c) as subsection (b), removed the phrase "without elaboration" from new subsection (b), and added a new subsection (c)-a "fair reply" provision. ABAl8 Model Rule 3.6 now reads as follows: RULE 3.6 TRIAL PUBLICITY (a) A lawyer who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the lawyer knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter. (b) Notwithstanding paragraph (a), a lawyer may state: (I) the claim, offense or defense involved and, except when prohibited by law, the identity of the persons involved; (2) information contained in a public record; (3) that an investigation of a matter is in progress; (4) the scheduling or request of any step in litigation; (5) a request for assistance in obtaining evidence and information necessary thereto; "Notwithsranding paragraphs (a) and (b)(1)-(5), a lawyer involved in the investigation or litigation of a matter may state without elaboration the general nature of the claim or defense. IGRelyingon In re Sawyer, 360 U.S. 622, 79 S. Ct. 1376,3 L. Ed. 2d 1473 (1959). 17' In Dosdourian v. Carsten) 6 the plaintiff informed the trial court that he had entered into a Mary Carter agreement with one defendant, §8.8 "The name comes from Booth v. Mary Carter Paint Co., 202 So. 2d 8 (Fla. App. 1967) (the settling defendant agreed to be liable up to $12,500 and remain as a defendant, with liability reduced or eliminated depending on the size of the judgment against Mary Carter). 287 Nev. 402, 488 P.2d 347 (1971). 3If peremptory challenges are divided between the defendants, there is all the more reason to be concerned about the effect of unused or poorly used strikes, not to mention deliberate distortion. "See]. Tanford, The Trial Process 286 (1983) (" [T]he principle of primacy indicates that, in general, it is important to tell the jurors about your case early."). 587 Nev. at 411, 488 P.2d at 352-353. 6624 So. 2d 241 (Fla. 1993).

317

§8.8

Trial Tactics -

Sorrre Opening Moves

under which the defendant would not testify and the defendant's liability would not be reduced by the award against the codefendant. Based on these representations, the trial court sustained the plaintiff's motion that the jury not be told of the arrangement. The Florida Supreme Court reversed, holding that Mary Carter agreements inherently distort the adversarial process. The court noted that settling defendants present witnesses and ... argue to the trial court the merits and demerits of motions and evidentiary objections. Most significantly, the party status of settling defendants permits them to have their counsel argue points ... before the jury. i

The court then declared Mary Carter agreements void as against public policy" However, a number of jurisdictions have allowed settling defendants to remain in the case if the agreement is disclosed to the judge and opposing counsel, and in turn the judge allows the jury to know enough about the agreement to appreciate the parties' positions and judge the witnesses' credibility? The ABA position on Mary Carter agreements is set forth in ABA Informal Opinion 1346, stating that in the interest of complying with [DRs l-102(A)(4) and DR 7-l02(A)(6) and (7),] ... a lawyer should reveal promptly to opposing counsel and to the court the existence of any agreement of this nature ... in sufficient time for opposing counsel to be afforded an opportunity to take appropriate steps and employ proper procedures to safeguard the interests of his clients. I 0

It can be argued that a lawyer must reveal a secret agreement with a coparty because to conceal it amounts to a fraud on the tribunal. II As a preventative measure, however, counsel should routinely seek discovery of any agreements with coparties. One commentator recommends the routine submission of the following interrogatory: 7Id. at 243. 8Id. at 248. The court cites similar holdings from other jurisdictions at 244-245. 9Ratterree v. Bartlett, 707 P.2d 1063, 1074-1075 (Kan. 1985) (citing cases, but reversing because the settlement was not disclosed to the jury). IOABAInformal Op. 1346 (1975). "Model Rule 8.4(c) (conduct involving fraud, deceit, or misrepresentation).

318

Trial Tactics -

Sorrie Opening Moves

§8.9

Has the plaintiff entered into any settlement or arrangement with any party to the suit or with any person potentially liable to the plaintiff, and if so, as to each such arrangement, state the particulars and identify by a sufficient description all documents pertaining to it.!" Once the Mary Carter agreement surfaces, the court can decide prior to trial whether the settling defendant must be dismissed as a party, and whether and to what extent the agreement should be disclosed to the jUry.!3

§8.9

Selection of Counsel on the Basis of Race or Gender

Several years ago Professor Gillers scripted "Karen Horowitz's Dilemma," a provocative hypothetical in which a Jewish woman is taken off a trial team because the client assumes that a southern rural jury would react negatively to her.' The dilemma is the conflict between Ms. Horowitz's right not to be removed from the case on an impermissible basis and the client's interest in having the case presented by a trial team that the client assumes will appeal to the jury. Professor Gillers is quoted in the ABAJournal as reluctantly concluding that the client has the right to insist that the lawyer be removed, and that the firm has the obligation to accede to the client's wishes, even though the lawyer might have a potential claim for employment discrimination. 2

!2G. Vetter, Successful Civil Litigation: How to Win Your Case Before You Enter the Courtroom 150 (1977). !3Federal Rule of Evidence 408 (and its state counterparts) provides that evidence of a settlement is not admissible to prove the liability of the settling party, but that the rule does not require exclusion of the evidence when offered to prove bias or prejudice of a witness. See Ratterree, 707 P.2d at I 075;Johnson v. Moberg, 334 N.W2d 411(Minn. 1983); Hegarty v. Campbell Soup Co., 214 Neb. 716,335 N.W2d 758 (1983); General Motors Corp. v. Simmons, 558 S.W2d 855 (Tex. 1977). §8.9 'Gillers, supra §8.2 note I, at 217 (the hypothetical also appeared in earlier editions of the book and is available on videotape). 2DeBenedictis, The Lineup, 80 A.B.A.]. 62, 64 (Oct. 1994). In Mass v. McClenahan, 893 F Supp. 225 (S.D.N.Y 1995), a federal court denied a summary judgment motion in a case brought by a lawyer who alleged he was fired as house counsel and CEO by a corporate client because he was a "New YorkJew."

319

§8.9

Trial Tactics -

SOIneOpening Moves

Professor Roy Sobelson scripted the converse hypothetical: having a black lawyer sit at counsel table (without significant duties) during a trial before a predominantly black jury. 3 Examples of such "castings" are related in a recent ABA article: • selection of a female to cross-examine Lorena Bobbitt (because crossexamination by a male might appear too aggressive), • selection of a racially and sexually diverse trial team to heighten juror interest, and • selection of a female to represent a male defendant charged with a violent crime ("Sitting close to a defendant, leaning in to ask his opinion or putting a hand on his shoulder can work to deflect juror bias.... ").+

There is, of course, the casting in the trial of O. J. Simpson. There the prosecution matched black defense lawyerJohnnie Cochran with black prosecutor Christopher Darden.' While the ABA article is nonjudgmental, a recent article in the Wall Street Journal questions the propriety of assigning counsel on the basis of race or gender.6 The Supreme Court has held that jurors cannot be struck on the basis of race or gender;' and the ABA has condemned words or conduct that evidence bias or prejudice on the basis of race or gender.'' To assume that jurors will react favorably or unfavorably to a lawyer just because the lawyer is male (or female) or black (or white) is "realistic" in the view of many? However, it is inconsistent with the ideal of a society in which justice is color-blind. One of the authors has participated in several continuing legal education seminars where

3R. Sobelson, Playing to the Jury, vignette five in The Case of the Silent Alarm, GT Construction Company v. The Sentry Company (1994). 4De Benedictis, supra note 2, at 63-65. 5Stevens, Minority Lawyers Tapped in Strategic Moves to Win, Wall St.]., Apr. 24, 1995, at Bl. 6Id. :J.E.B. v. Alabama, 114 S. Ct. 1419, 128 L. Ed. 2d 89 (1994); Powers v. Ohio, 499 U.S. 400, III S. Ct. 1364, 113 L. Ed. 2d 1364 (1991); Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). See discussion in Chapter 9. 8Resolution at the 1995 ABA Convention. See also Schwadel and Stevens, ABA Adopts First Formal Policy That Endorses Affirmative Action, Wall St.]., Aug. 10, 1995, at B7 (the resolution also condemns discriminatory acts or words on other groundssocioeconomic status, for example). See the discussion of "speech codes" in Chapter 7. 9De Benedictus, supra note 2, at 64 (general theme of article).

320

Trial Tactics -

SOIneOpening Moves

§8.9

the Gillers and Sobelson videotaped vignettes were shown and discussed. The consistent consensus of the lawyers in attendance has been that (1) the stereotyping of jurors is a mistake-the personality and competence of the lawyer are more important than the lawyer's sex or race; to (2) the client's interests are paramount, but that the client should be dissuaded from unwarranted generalizations about jurors; and (3) the use of a lawyer as mere window dressing is condescending and bad tactics. The jurors might see through the ploy and resent the lawyer's apparent assumption that they will be influenced by the race or gender of counsel. Preventive Ethics Checklist

Delay

o o

Do not use delay as a tactical weapon. Do not allow your opponent to delay when delay is not in your client's best interests.

Motion Practice

o o

Do not overlitigate. Seek a protective motions.

order

before

responding

to frivolous

Candor and the Court

o o o

Tell the court about adverse authorities in your jurisdiction that you think the court should be aware of before making a decision. Tell the "whole truth" when making statements of fact to the court; specify statements based on information and belief. Do not volunteer adverse information, but do not dissemble if asked about a matter; in that case, either answer honestly or decline to answer.

Ex Parte Communications

o

o

Do not talk to the judge about a case in the absence of your opponent. Discourage judges who want to talk about pending cases.

lOrd., at 63 (quoting Gerry Spence to this effect).

321

§8.9

Trial Tactics -

SOUleOpening Moves

Disqualification Motions o Do not file a disqualification motion as a tactical matter, o Know the grounds for disqualification of judges. Be willing to waive disqualification of a judge unless there is a substantial possibility of harm to your client. o Do not "go along" by waiving disqualification of a judge if there is a substantial possibility of harm to your client.

o

Mary Carter Agreements o Know what they are, and do not enter such agreements. Ask your opponent during discovery about Mary Carter agreements. Move the court to dismiss a defendant who has settled.

o

o

322

II The Trial

9 Relations with Jurors

§9.l §9.2 §9.3 §9.4 §9.5 §9.6

§9.1

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Pretrial: Contact with and Investigation of the Jury Panel Trial: Voir Dire Examination Trial: Relations with the Jury after Voir Dire Examination Posttrial: Contacts with Jurors after the Verdict

Introduction

Assume that in either a criminal or a civil case, the trial will be by jury. 1 There are special ethical restrictions on the lawyer's pretrial, trial, and posttrial contact with the potential jurors (the venirepersons or panelists) and the petit jurors eventually chosen. This chapter reviews those restrictions. §9.1 'Model Rule 1.2(a) reads that "[i]n a criminal case, the lawyer shall abide by the client's decision, after consultation with the lawyer, as to ... whether to waive jury trial. ... " There is no such requirement

in civil cases.

325

§9.2

§9.2

Relations with Jurors

Corrrpar ison of the Code of Professional

Responsibility and the Model Rules The Code The Code contains a detailed treatment of the lawyer's relation to the jury. Disciplinary Rule 7-108(E) announces a general prohibition against vexatious or harassing investigations into the background of the panelists; DR 7-108(E) extends the prohibition to members of the panelist's family. In addition, D.R. 7-108(A) prohibits direct personal contact between the panelists and either the lawyer or someone working for the lawyer. While DR 7-108(A) governs before trial, DR 7-l08(B) controls during trial. Disciplinary Rule 7-108(B)(1) forbids lawyers connected with the case from communicating at all with the jurors during trial, and DR 7-l08(B)(2) provides that even lawyers not connected with the case may not speak to jurors about the case. Disciplinary Rule 7108(D) comes into play "after [the] discharge of the jury"; that provision permits posttrial interviews so long as they are not calculated merely to harass the juror or influence future jury service. Disciplinary Rule 7-108 concludes with subsection (G), requiring any lawyer to "reveal promptly to the court improper conduct by a veniremen or a juror ... of which the lawyer has knowledge." The Model Rules The drafters of the Model Rules believed that the earlier Code focused unduly on the litigation phase of lawyering. They therefore understandably decided to deemphasize that phase and concentrate to a greater degree on the lawyer's other, less visible roles. One unfortunate consequence of that deemphasis, however, was that the final wording of some of the Model Rules governing lawyers' litigation behavior is vague. The rules on relations with jurors are illustrative. The key rules are 4.4 and 3.5. Model Rule 4.4 generally counsels lawyers to respect the rights of third persons. The expression "third person" is expansive enough to include both panelists and jurors. The official comment to Model Rule 4.4 states that the rule has analogues in DR 7-l08(E) (prohibiting vexatious pretrial investigations of panelists) and DR 7-108(D) (forbidding posttrial harassment of jurors).

326


§9.2

Model Rule 3.5 is more specific than Model Rule 4.4. For its part, Model Rule 3.5(a) states that a lawyer may not seek to influence a juror by "means prohibited by law," and subsection (b) adds that a lawyer shall not communicate ex parte with a juror "except as permitted by law." The term law in both subsections presumably includes the penal or criminal laws of the jurisdiction. It is true that every state has criminalizedjury subornation, but only a minority of jurisdictions have statutes regulating incidental jury contacts or posttrial interviews. So construed, Model Rule 3.5(a) imposes few limitations on attempts to influence panelists and jurors. However, Model Rule 3.5(b) may be much more restrictive than DR 7-108. Under DR 7-108, posttrial interviews are presumptively proper. Although DR 7-1 08(D) prescribes limitations on the manner of conducting posttrial interviews, the implicit assumption is that such interviews are permissible. As Professor Wolfram has pointed out, the exceptive language in Model Rule 3.5(b) appears to reject that assumption; the wording suggests that ex parte jury contact is improper unless it is expressly authorized by law? That construction of Model Rule 3.5(b) would have the effect of barring posttrial interviews, except when they are affirmatively permitted by statute, rule, or court order. The Model Rules differ from the Code in another respect. The Rules do not contain any analogue to DR 7-108(G)'s requirement that attorneys report jury misconduct. The omission was probably unintentional; the official commentary does not evidence any intent to abolish the requirement, and there seems to be no good reason not to require all lawyers to report such misconduct. Nevertheless, there is no language in the text of the Model Rules that can reasonably bear the same construction as DR 7-108(G), and the Scope section at the beginning of the Model Rules makes it clear that only the rules themselves can impose ethical obligations.

2C. Wolfram, Modern Legal Ethics 607-608 (1986). It is true that Professor Wolfram's interpretation of subsection (b) is not inexorable. It could be argued that conduct remains "permitted" unless and until it is proscribed. However, on balance, Professor Wolfram's interpretation seems sounder. To begin with, the use of the verbpermittedrather than the adjective permissible--connotes affirmative action to authorize the conduct. Further, the grammatical structure of the sentence-a general prohibition followed by an exceptive phrase-appears more consistent with Professor Wolfram's reading.

327

§9.3

§9.3


Pretrial: Contact with and Investigation of the Jury Panel

Assume that a demand has been made for jury trial, and that the court clerk has selected the panel-the group of potential jurors. The duty of competence codified in Model Rule 1.1 mandates that to the extent reasonably possible the lawyer gather information about the probable attitudes of the panelists toward the issues and parties in the case. 1 At a later time, the parties will exercise challenges for cause and peremptory challenges, and the lawyer cannot intelligently exercise the client's challenges without information about the panelists. In many jurisdictions, panelists complete information sheets or questionnaires and submit them to the court.? if such sheets are available, the lawyer should certainly review them. However, the data on those documents may be minimal; these questionnaires primarily target hard biographical information, such as employment history, and the data may thus reveal very little about the panelists' pertinent views. At this juncture, then, two questions arise: May the lawyer attempt to gather additional information by conducting a pretrial investigation of the panel members; and if so, what are the ethical restrictions on the investigation?

May the lawyer attempt to gather additional information by conducting a pretrial investigation if the panel members? In some cases, any attempt to collect additional information may be prohibited. In one highly publicized drug prosecution," the trial judge ordered the lawyers not to conduct a public opinion survey of the group from which the panel would be drawn. The court feared that the survey might disseminate prejudicial information and result in improper contacts between representatives of the lawyers and persons eventually selected as panelists. Moreover, in some cases, judges have ordered the use of anonymous juries. 4 Judges do

§9.3 'Model Rule 1.1. 2E.g., R. Keeton, Trial Tactics and Methods 248-252 (2d ed. 1973). 3United States v. Lehder-Rivas, 669 F. Supp. 1563 (M.D. Fla. 1987), cert. denied sub nom. Reed v. United States, 506 U.S. 924, 113 S. Ct. 347, 121 L. Ed. 2d 262 (1992). 4E.g., United States v. Wong, 40 F.3d 1347 (2d Cir. 1994); United States V. Maldonado-Rivera, 922 F.2d 934 (2d Cir. 1990), cat. denied, 501 U.S. 1211, 111 S. Ct. 2811, 115 L. Ed. 2d 984 (1991); United States V. Scarfo, 850 F.2d 1015 (3d Cir. 1988); Buechlein, Annotation, Propriety of, and Procedure for, Ordering Names and Identities of Jurors Withheld from Accused in Federal Criminal Trial, 93 A.L.R. Fed. 135 (1989).

328


§9.3

not enter these orders as a matter of course;" a prosecutor requesting an anonymous jury must show a strong reason, and the courts subject the showing to close judicial scrutiny" However, there are roughly 20 cases in which federal judges have used anonymous juries. 7 Judges often find the requisite showing in prosecutions of alleged members of organized crime families" and terrorist organizations.? Several state judges have construed a new California statute as allowing a juror in any criminal case to demand that her name be withheld from the litigants. IO It is even possible to impanel an anonymous jury in a civil action. 11In these cases, the judges usually seal the juror information sheets. Before and during trial, the potential and actual jurors are identified only by designations such as numbers or letters. 12Judgestry to prevent prejudice to the defendant by instructing the jury not to assume that the defendant is a dangerous person or by saying that jurors are being identified by number to protect them from crank calls by outsiders. 13The common denominator SUnited States v. Vario, 943 F.2d 236 (2d Cir. 1991), cert. denied, 502 US. 1036, 112 S. Ct. 882, 116 L. Ed. 2d 786 (1992); United States v. Coonan, 671 F. Supp. 959 (S.D.N.Y 1987), cert. denied sub nom. Kelly v. United States, 502 US. 941, 112 S. Ct. 1486, 117 L. Ed. 2d 628 (1992). "United States v. Paccione, 949 F.2d 1183 (2d Cir. 1991); United States v. MillanColon, 834 F. Supp. 78 (S.D.N.Y 1993); Margolin and Uelmen, The AnonymousJury, 9 Crim.Just. 14 (Fall 1994). 7United States v. Childress, 58 F.3d 693 (D.C. Cir. 1995); United States v. Edmond, 52 F.3d 1080 (D.C. Cir. 1995); United States v. Aulicino, 44 F.3d 1102 (2d Cir. 1995); United States v. Ross, 33 F.3d 1507 (II th Cir. 1994), cert. denied, 115 S. Ct. 456, 132 L. Ed. 2d 812 (1995); United States v. Thai, 29 F.3d 785 (2d Cir.), cert. denied sub nom. United States v. Tran, 115 S. Ct. 456, 130 L. Ed. 2d 364 (1994); Rodriguez, Secret Juries Face First D.C. Test, Legal Times,Jan. 30, 1995, at 6 (All the federal circuits that have passed on the question "have ... allowed the practice. Only the Massachusetts Supreme Court is contra."); Rodriguez, When Jurors Dare Not Speak Their Names, Legal Times, May 9, 1994, at 1. See also State v. Bowles, 530 N.W.2d 521 (Minn. 1995). BE.g.,United States v. Gambino, 809 F. Supp. 1061 (S.D.N.Y 1992). 9United States v. Maldonado-Rivera, 922 F.2d 934 (2d Cir. 1990), cert. denied, 501 US. 1211, III S. Ct. 2811,115 L. Ed. 2d 984 (1991). "Delsenedictis, Anonymity Now Shields Jurors' Identities, 80 A.B.A. J. 16 (Nov. 1994); Jones v. Superior Ct., 26 Cal. App. 4th 1202,31 Cal. Rptr. 2d 890 (1994) (construing Cal. Civ. Proc. Code §206(a)-(d), (m. llUnited States v. Real Property Known as 77 East 3rd Street, I\TY, I\TY, 849 F. Supp. 876 (S.D.N.Y 1994). 12United States v. Barnes, 604 F.2d 121 (2d Cir. 1979), cert. denied, 446 US. 907, 100 S. Ct. 1833,641 L. Ed. 2d 260 (1980); Note, AnonymousJuries, 54 Fordham L. Rev. 981 (1986) (describing a prosecution of the heads of organized crime families in the New York area). 13United States v. Scarfo, 850 F2d 10 15, 1027 (3d Cir. 1988) (excerpts from the judge's charge: "I have been ajudge for 27 years, and in all that time I have never heard

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§9.3


of these cases is that the judge has entered an order prohibiting the lawyers from conducting an investigation outside the courtroom to learn the panelists' names or backgrounds. Obviously, it would be unethical for the lawyer to deliberately violate such an order; the conduct would run afoul of Model Rule 3.4(c). If an investigation is permissible, what are the ethical restrictions on the investigation? Although the use of anonymous juries appears to be growing, 14 in the typical case the judge will not enter an order barring pretrial investigation of the panelists. Neither Model Rule 3.5 nor Model Rule 4.4 prohibits pretrial investigation. However, the Rules impose restrictions on the investigation; they restrict both who may be contacted and the manner of conducting the investigation. To begin with, under Model Rule 3.5 there should be no direct personal contact between a representative of the lawyer and a prospective juror. Unlike DR 7-l08(F), Model Rule 3.5 does not explicitly extend the prohibition to members of the panelist's family. However, some leading authorities conclude that the Model Rules should be interpreted as continuing the ban on contact with members of the panelist's family.15 That conclusion is supportable. Model Rule 4.4 should be interpreted to embody DR 7-108(E)'s prohibition of "vexatious or harassing investigations," and a panelist could easily be vexed by intrusion upon the privacy of a fellow family member. The comment to Model Rule 4.4 states that lawyers must have regard for the rights of third persons (such as panelists). Direct contact with a spouse should be considered a violation of the panelist's right to privacy, since the panelist's zone of privacy arguably includes immediate family members. of a case where any defendant ever tried to cause harm to a juror or a member of the juror's family. But we all watch television.... We see the Godfather movies. We know the atmosphere which is sometimes portrayed on television and in movies and newspapers. And I wanted to make sure that no member of the jury would worry about it, even though it is my personal, strong belief that there [is] ... no basis for worry.... [F]rom the defendant's standpoint, he does not want to be in a position where somebody, in order to cause him harm, might pretend to be representing him and causing threats to the jury. ") 14Rodriguez, supra note 7, at 1. 15DR7-1 08(A), (F);Model Rule 3.5(b). Model Rule 3.5 is somewhat cryptic, stating that it is unethical to endeavor to "influence" ajuror by illegal means, and that an attorney shall not attempt to communicate ex parte with a prospective juror, except as permitted by law. Wolfram states that this provision is intended to continue the Code ban on direct contacts with prospective jurors and their families. Wolfram, supra §9.2 note 2, 607.

330


§9.3

Moreover, under Model Rule 4.4, the manner of conducting the investigation should be neither vexatious nor harassing. In particular, what is forbidden? Investigators should not misrepresent their purpose or identity." They certainly should avoid surveillance techniques that might seem intimidating. 17 The investigation should be unobtrusive. IS It is allowable to check documents open to public inspection, such as voter registration records. In the run-of-the-mill case, it will also be permissible to undertake a public opinion poll, attempting to correlate relevant attitudes with various demographic characteristics of the panelists. 19 A prosaic "drive-by"-checking such items as bumper stickers on the family car, whether the grass is cut, and whether there is a "strong fence or watchdog or other sign of fear of outsiders" -is likewise proper" While an innocuous drive-by is allowable, the lawyer should instruct the investigator to respect jurors' privacy and avoid "rough" shadowing or intrusive questioning of friends and neighbors. 21 Model Rule 5.3 requires that a lawyer exercise care in both selecting and supervising "nonlawyer assistants," and the official comments indicate that "nonlawyer assistants" include investigators. This is another instance in which ethical practice largely coincides with sound tactics. A panelist might well resent an investigation that goes beyond the information already in the public domain.I? If the panelist takes offense at the pretrial investigation, that resentment could later translate itself into a vote for an adverse verdict.

16DR 1-102(A)(4); Model Rule 8.4(c). 17The more notorious the case, the more likely a panelist is to interpret an investigator's conduct as attempted intimidation. Note, supra note 12, at 999. 18G.Hazard,Jr., and \iI,Z Hodes, The Law of Lawyering §3.5:200 (2d ed. 1990). 19Saks,The Limitations on Scientific Jury Selection: Ethical and Empirical, 17Jurimetrics]. 3, 7 (1976). Saks notes (id. at 4) that some commentators view scientific jury "stacking" as unethical, but he discounts that view as an irrational reaction to technological advances. Id. at II. 2°These examples are taken from A. Ginger,Jury Selection in Criminal Trials ch. 8, particularly at 357 (1975). See alsoJury Sleuths: In Search of the Perfect Panel, Natl, Lj., July 21, 1986, at 1 ("Have You Hugged Your Child Today?" bumper sticker indicates a juror who might favor the plaintiff in a personal injury suit involving a child). 21DR 7-108(E). Cf. LaMarca, Overintrusive Surveillance of Plaintiffs in Personal Injury Cases, 9 Am.]. Trial Advoc. I (1985) (describing "rough" shadowing techniques). 22M.Timothy, Jury Woman 306-307 (1974), quoted in Ginger, supra note 20, at 363 (voicing resentment at the intrusive defense investigation before the Angela Davis trial).

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§9.4

§9.4


Trial: Voir Dire Exarrrirration

In many jurisdictions, this topic is moot; attorneys are not permitted to directly question the panel.' In roughly two-thirds of the federal judicial districts,judges now conduct all the voir dire examination. In these districts, the lawyers' role is limited; before trial, the lawyers propose questions to the trial judge, and at trial, they listen and eventually exercise challenges on the basis of what they have heard. Assume, though, that a jury is being selected in a jurisdiction allowing attorney interrogation. What ethical restrictions come into play? There are at least four ways in which a lawyer can commit an ethical violation during voir dire examination. First, the laywer might make comments that are improperly calculated to ingratiate herself to thepanelists. Professor Wolfram notes that, in part, judges have curtailed attorney questioning because during voir dire many lawyers curry "favor with jurors by fawning, flattery, or pretended solicitide."2 For instance, in Johnson v. Trueblood.' one of the stated grounds for disciplining a lawyer was that the lawyer had "smiled, waved and told the jury to 'have a nice weekend.' "4 However, that decision antedated the Model Rules. Model Rule 3.5(a) precludes a lawyer from endeavoring to influence prospective jurors "by means prohibited by law." However, if "law" is construed as criminal law,Johnson may no longer be persuasive; it is difficult to characterize the stated conduct as a violation of any penal law. If this conduct is to be punished, the punishment would have to be imposed under Model Rule 8.4(d), broadly proscribing "conduct that is prejudicial to the administration of justice." The adversary system is designed to produce justice by ensuring an impartial decision based solely on the evidence presented in court. 5 §9.4 .!C. Berman, Conduct of the Voir Dire Examination, Practices and Opinions of Federal DistrictJudges 5 (1977) (70 percent of federal district judges do not permit attorneys to directly question prospective jurors; attorneys must propose questions to the judge, who decides whether to submit the questions to the panelists). 2Wolfram, supra §9.2 note 2, at 607. 3476 F. Supp. 90 (E.D. Pa. 1979), vacated on other grounds, 629 F.2d 302 (3d Cir. 1980). 4Id. at 96. 5Professional Responsibility: Report of the Joint Conference, 44 A.B.A. J. 1159, 1159-1161 (Dec. 1958); Lind, Thibaut, and Walker, Discovery and Presentation of Evidence in Adversary and Nonadversary Proceedings, 71 Mich. L. Rev. 1129 (1973); Walker and Lind, Adversary Presentation and Bias in Legal Decisionmaking, 86 Harv. L. Rev. 386 (1972).

332

Relations

with Jurors

§9.4

However, it is unlikely that discipline or judicial sanctions will be imposed for attempted ingratiation unless the lawyer persists in the face of a court order. Ingratiation is, after all, standard fare in trial manuals" and accepted practice in many courts. Second, the lawyer might run afoul of Model Rule 3.4(c) by asking improper questions during voir dire examination. Model Rule 3.4(c) reads that a lawyer may not "knowingly disobey an obligation under the rules of a tribunal. ... " To invoke Model Rule 3.4(c), it would have to be proven that the lawyer knew that the tribunal's rules forbade the purpose that the question was designed to pursue. What purposes is a lawyer forbidden from pursuing during voir dire examination? In two extreme cases, it is clear that the lawyer is pursuing a verboten purpose. In almost all jurisdictions, for example, during voir dire examination the lawyer may not ask the panelists to qffirmativetJ prejudge the weight of a specific item or type of evidence." Thus, the lawyer may not request that the panelists promise to "accept" or "believe" the testimony of a specific witness. Similarly, there is consensus that negativetJ the lawyer may not invite the panelists to disregard a rule of law that the judge may later instruct them to apply. In federal court and the vast majority of states, it is well settled that a lawyer may not encourage the jurors to "nullify" the governing law" Any trial attorney with a modicum of experience should appreciate that these two types of requests are absolutely forbidden. Hence, in these cases it can be argued that the lawyer is "knowingly" violating an obligation. Suppose, though, that the lawyer neither asks the panelists to affirmatively prejudge evidence nor encourages them to negatively ignore a controlling rule of law. Absent those facts, it is much more difficult to show that the lawyer has violated Model Rule 3.4(c). One commentator estimates that lawyers spend roughly 80 percent of their time during voir dire attempting to indoctrinate the jury? Indeed, many trial practice manuals encourage lawyers to do SO.10 As a matter of tactics, a 6E.g., Ginger, supra §9.3 ntoe 20, at 283-285. 'E. Heafey, California Trial Objections §6.14, at 69 (2d ed. 1984). 8Comment, Courts: Jury Nullification-The Unrecognized Right, 13 Washburn LJ. 129 (1974). 9Broeder, Voir Dire Examination: An Empirical Study, 38 S. Cal. L. Rev. 503, 522 (1965). See discussion of jury nullification arguments in Chapter 13. lOE.g.,Ginger, supra §9.3 note 20, at 285. See also R. Carlson and E. Imwinkelried,

Dynamics of Trial Practice §4.8, at 65 (1995); 1 A. Ginger, Jury Selection in Civil and Criminal Trials chs. 9-11 (2d ed. 1984).

333

§9.4


lawyer might attempt to indoctrinate the panel on thefocts by exposing the panelists to seemingly damaging evidence and soliciting their commitment that they will not decide the case solely on the basis of that testimony. The reasoning underlying this tactic is that the lawyer can take a bit of the "sting" out of the damaging evidence by broaching the subject before the opponent can do so. Some have questioned the wisdom of this tactic, II but the tactic is still in widespread use. Alternatively, a lawyer might try to indoctrinate the panel on the law by mentioning an anticipated favorable jury instruction and requesting their promise to follow the instruction during deliberations. When would such questions violate Model Rule 3.4? The rub is that the state of the law varies from jurisdiction to jurisdiction. Most jurisdictions follow one of three schools of thought. Some subscribe to one minority view, namely, that attorneys have a right to ask voir dire questions designed to unearth grounds for challenge for cause such as the existence of a family relationship with a litigant-but that is the only permissible purpose of the questioning. In these jurisdictions, the trial judge has no discretion to permit the attorney to question for other purposes. A second minority view is that as of right the lawyer may question both to establish challenges for cause and to enable the lawyer to intelligently exercise peremptory challenges; 12 the trial judge has no discretion to preclude the attorney from questioning for those purposes. The jurisdictions following this minority view tend to hold that the judge may permit limited factual or legal indoctrination in his discretion. Finally, the majority view appears to be that while the lawyer's only right is to question about bases for cause challenges, the judge has discretion to permit pursuit of the other objectives. For both tactical and ethical reasons, attorneys should be careful to avoid embarrassing jurors unnecessarily. 13 Panel members may resent questions seeking private information, particularly if asked in open court; 14 delicate questions should be asked, if at all, on a questionnaire

R. Klonoff and P. Colby, Sponsorship Strategy (1990). 12Barrett v. Peterson, 868 P.2d 96 (Utah App. 1993). 13Model Rule 4.4 states that a lawyer shall not use means that have no substantial purpose other than to embarrass a third person; e.g.,J.Jeans, Trial Advocacy 166 (1975) (one of many trial manuals making the obvious point that courtesy is tactically sound). 14Fortune, Voir Dire in Kentucky: An Empirical Study of Voir Dire in Kentucky Circuit Courts, 69 Ky. LJ. 273, 287 (1981); Maxwell, The Case of the RebelliousJuror, II

334

Relations

with Jurors

§9.4

or out of hearing of other panelists. 15 As aptly put by a former juror, I do not think the venireperson resents the attorney's probing, rather he/ she just wishes that so many voyeurs were not present during the probing. The other panelists and visitors sitting in the spectator section make him/her feel too exposed. Undressing before medical attendants is easy, but not before other patients, toO.16

Judges, too, should be sensitive to the panelists' legitmate privacy interests. In Brandberg v. Lucas) 17 a fideral magistrate granted a writ of habeas corpus to a state venirewoman who had been jailed for her refusal to answer questions about her income, religious preference, reading and television habits, club memberships, and medical condition. The federal court held that the state judge was required to balance the litigant's interest in knowing about the prospective juror against the panelist's right of privacy. The relevancy of the questions to the issues in the cases is the most important factor. The court also said that judges should give panelists the least intrusive means to provide private information. The O. J. Simpson jury questionnaire, apparently answered by most of the prospective jurors, included the following questions: (0..)44) (0..)65)

(0..171)

Have you ever written to a celebrity? Have you ever had your spouse or significant other call the police on you for any reason, even if you were not arrested? Have you ever felt sufficiently frustrated within a domestic relationship that you considered violence?

56 A.B.A.]. 838 (Sept. 1970) (prize-winning essay about a fictitious juror jailed for refusing to say whether he belonged to a particular group). 15Fortune,supra note 14, at 32l:Jurors should be encouraged to come to the bench if the answer to a relevant question would be embarrassing. Questions should be phrased so that no embarrassing inferences can be drawn from a juror's raising his hand. For example, the defense attorney who wishes to know whether a juror's experiences have made him unduly hostile toward those suspected of using drugs should ask the jury: "Have drugs affected you, a member of your family, a friend or acquaintance?" Such a question permits the juror whose son is an addict to raise his hand and approach the bench without publicly identifying the nature of the problem. 16Kerig,Perceptions from aJury Box, 54 Cal. St. BJ. 306, 307 (1979). 57 Crim. L. Rptr. 1339, 1995 WL 375818 (E.D. Tex. 1995).

17

335

§9,4

(0.)79) (0.)86) (Q211) (Q249) (Q254)

Relations

with Jurors

Have you ever had occasion to use a knife against another person? Have you ever dated a person of a different race? Have you ever produced a urine sample to be analyzed for any purpose? Do you watch "Hard Copy," "Current Affair," or "American Journal?" What accomplishments in your life are you most proud of?!"

In most cases, it would be difficult to show that any question is so obviously improper as to be unethical. This difficulty obtains even in jurisdictions committed to the view that all the voir dire questions must relate to grounds for challenge for cause. In most jurisdictions, a panelist is challengeable for cause if he cannot impartially evaluate the testimony or apply the law stated by the trial judge. Even when the primary motivation for the lawyer's question is to indoctrinate on damaging facts or about favorable, anticipated instructions, the lawyer can often articulate a nexus between the question and the grounds for challenge for cause. If the panelist would resolve the case against the client solely because of a particular item of evidence or find it impossible to follow the applicable law, there is a plausible challenge for cause. In other cases, while the lawyer may not have a right to ask the questions, the judge has discretion to permit the lawyer to do so. Until the judge orders the lawyer to desist from a particular line of voir dire inquiry, the lawyer has not violated Model Rule 3.4(c).19 Of course, once the judge makes his ruling, the lawyer must obey; after the judge has announced the ruling, the continuation of that line of questioning amounts to a "knowing" violation of the lawyer's obligations.

Third, under the guise qf asking questions, the lawyer might expose the panelists to inadmissible evidence. Suppose that a devious lawyer wants to taint the jury by exposing the panel to clearly inadmissible evidence. A prosecutor might know that the accused committed a crime other than the one the accused is on trial for, and that there is no tenable noncharacter 18People v. OrenthalJ. Simpson, No. BA0972 11, 1994 WL 564388 (Los Angeles County Super. Ct. 1994). There were 294 questions on the questionnaire, some with multiple parts. Jurors could mark their responses to offensive questions "confidential," in which case there was a hearing. The questionnaire also asked whether prospective jurors thought Simpson was guilty or not (Q; 138 and 139). 19DR 7-106(A) similarly forbids a lawyer to violate a standing rule of a tribunal or a court ruling.

336


§9.4

theory for introducing testimony about the uncharged crime during the trial. In that event, Federal Rule of Evidence 404(b) would bar the introduction of proof of the other crime. The lawyer might mention the crime in her voir dire questions without asking the panelists to affirmatively prejudge the weight of the evidence. In Chapter 10, we shall see that it would violate Model Rule 3.4(e) to refer to such evidence in opening statement. The lawyer may not circumvent that rule by alluding to the evidence during voir dire examination. Whether the context is opening or voir dire, the lawyer may not mention an item of evidence unless the lawyer has at least a good faith belief that the evidence will be both available and admissible during trial. It is advisable to obtain a pretrial ruling on the admissibility of evidence in order to intelligently voir dire the jury. In the example above, the defense lawyer may wish to question the jury about the impact of "other crimes evidence" if it is going to be admitted. However, if the judge will not admit it, the defense lawyer will certainly not mention it on voir dire. Fourth, the lawyer might intentionally exercise a peremptory strike against a panelistfor racist, sexist, or other invidious reasons. Until recently, a lawyer could exercise a peremptory strike for a good reason, a bad reason, or no reason at all; the essence of the entitlement to a peremptory strike was that the court could not probe the lawyer's motivation.F'' However, in the past decade, the Supreme Court has circumscribed the use of peremptory challenges. The Court has declared that it offends equal protection for a prosecutor," criminal defense counsel.P or civil lawyer " to strike panelists on the basis of their race or sex" The Court is now being asked to extend the same prohibition to religion." It is 2°Babcock, Voir Dire: Preserving Its Wonderful Power, 27 Stan. L. Rev. 545, 553 (1975) (peremptory challenges avoid the necessity of trafficking in the half-truths of commonly held stereotypes). 21Batson v. Kentucky, 476 U.S. 79,106 S. Ct. 1712,90 L. Ed. 2d 69 (1986). 22Georgia v. McCollum, 505 U.S. 42, 112 S. Ct. 2348, 120 L. Ed. 2d 33 (1992). 23Edmonson v. Leesville Concrete Co., 500 U.S. 614, 111 S. Ct. 2077, 114 L. Ed. 2d 660 (1991). 2j.E.B. v. Alabama ex reI. TB., 114 S. Ct. 1419, 128 L. Ed. 2d 89 (1994). 250n May 23, 1994, the Supreme Court refused to review the case of Davis v. Minnesota, 504 N.W.2d 767 (Minn. 1993), presenting the question of whether it is a violation of equal protection to intentionally strike panelists on the ground of their religion. Davis v. Minnesota, 114 S. Ct. 2120, 128 L. Ed. 2d 679 (1994). See also Coyle, High Court Passes on Bid to Extend Peremptory Ban, Natl, Lj.,June 6,1994, at Al 2.Justices Scalia and Thomas dissented, writing that there is no principled basis for distinguishing among race, sex, and religion.

337

§9.4


difficult to conceive of a more offensive violation of Model Rule 4.4. The comment to that rule insists that trial lawyers respect "the rights of third persons" such as venirepersons, and that it is utterly disrespectful to rely on the invidious ground of race or sex to deny a panelist the opportunity to participate in as important a democratic institution as the jury. In the past, many lawyers used jury box charts to record data about panelists and later assist the lawyers to exercise their peremptory strikes. The use of such charts is now a virtual necessity. At a later point in time, the opposing attorney may claim that the lawyer improperly used strikes to eliminate jurors on a constitutionally infirm basis such as race. Faced with such a claim, the lawyer may insert her chart, documenting the legitimate reasons for the strikes, into the record as an exhibit. 26

§9.5

Trial: Relations with the Jury After Voir Dire Exarrrinarion

Voir dire has concluded, the jury has been selected, and the selected panelists are now the jurors. What ethical rules govern the relationship between the jurors and the lawyers for the duration of the trial? Even in open court, in the presence of the opposition, the lawyers must refrain from improper attempts to ingratiate themselves to the jury. Many jurisdictions have a rule that after voir dire lawyers may no longer refer to particular jurors by name. 1 Thus, while questioning an expert witness, the lawyer could not pose this question: "Mr. Witness, in view of your specialized training in psychology, will you address your diagnosis to juror Jones here ... , who is also a psychologist?"2 The lawyer should not fawn over the jurors or surreptitiously communicate with them by winks and shrugs." In an extreme case, such conduct could constitute a violation of Model Rule 8.4(d), prohibiting conduct "prejudicial to the administration of justice." 26See,e.g., Echlin v. Lecureux, 800 F. Supp. 515, 535-538 (E.D. Mich. 1992). §9.5 'Section 5.4 of the 1970 draft of the Prosecution and Defense Function Standards states: "Part of the attitude of professional respect which the prosecutor owes the jury is his obligation not to refer to particular jurors by name when addressing the jury as a whole." Pendleton v. Evetts, 611 S.W2d 607 (Tenn. App. 1981). 2M. Bright and R. Carlson, Objections at Trial 1 (1990). ':Johnson v. Trueblood, 476 F. Supp. 90 (E.D. Pa. 1979), vacated on other grounds, 629 F.2d 302 (3d Cir. 1980).

338


§9.5

Furthermore, Model Rule 3.5(b) mandates that lawyers refrain from any ex parte communication with the jurors. Private contact is altogether forbidden." Of course, chance encounters are possible.' A lawyer may accidentally find herself in a juror's presence in an elevator or a restroom. However, as Professor Wolfram explains, even when a lawyer and a juror are innocently thrown together, a lawyer's only permitted comment to a sitting juror who attempts to converse with the lawyer, aside presumably from polite hellos or similar perfunctory greetings, must be politely but firmly to disengage from any conversation."

Finally, assume that somehow the lawyer learns of jury misconduct. A private investigator's report makes it clear that a panelist lied during voir dire examination, or the lawyer happens to observe the juror speaking with a witness about the case. In many cases, it will be in the interest of the lawyer's client to report the misconduct to the judge; the lie may have concealed a bias against the lawyer's client, or the witness the juror spoke with may be aligned with the opposition. Of course, lawyers who wish to complain of juror misconduct must report it to the court as soon as it becomes known. They cannot wait to see if the jury verdict is favorable before raising the matter. 7 In situations when the misconduct is likely to operate to the client's advantage, the issue arises whether the lawyer nevertheless has an ethical obligation to report the misconduct. Disciplinary Rule 7-108(G) imposes that obligation, but there is no comparable provision in the Model Rules. Model Rule 8.3(a) requires the lawyer to report certain misconduct by other attorneys, and that rule would come into play if an attorney were also involved in the juror's misconduct. However, absent attorney involvement, there is no language in the text of the Model Rules that is susceptible to the same interpretation as DR 7-108(G).8 4Hazard and Hodes, supra §9.3 note 18, §3.5:300. 5Wolfram, supra §9.2 note 2, at 608. 6Id. 7E. Thomas, The Man to See: Edward Bennett Williams-Ultimate Insider; Legendary Trial Lawyer 359-360 (1991). 8Schwartz, A Dilemma, 25 Trial 92 (Aug. 1989) (criticizing the Model Rules' deletion of the reporting requirement as a "remarkable omission" that "cannot be viewed as an advance over the Code of Professional Responsibility."

339

§9.6

§9.6


Posttrial: Contacts with Jurors After the Verdict

A posttrial interview with jurors can be useful. The interview might reveal jury misconduct, which would serve as the basis for a new trial motion.' Even when the interview does not disclose misconduct, the lawyer may find the feedback from jurors educative; they can give the lawyer insight into the effectiveness of her trial strategies and tactics. However, like pretrial investigations of panelists, posttrial interviews with discharged jurors are subject to ethical restrictions. The analysis here is very similar to the analysis in §9.3. The initial question is whether the lawyer may contact the jurors after the verdict. If so, the question becomes what ethical rules restrict the manner of conducting the interview. There might be a court rule or order forbidding posttrial interviews." Alternatively, even if the rule or order stops short of barring all posttrial interviews, the local practice may require prior approval from the judge. 3 In either event, assuming that the lawyer knows of the obligation, it would be a disciplinary offense under Model Rule 3.4(c) to disregard the requirement. The courts are split over the question of whether a trial judge can forbid press interviews of jurors, 4 but they distinguish restrictions on interviews by attorneys and tend to uphold §9.6 'In one case that resulted in a $45 million verdict, a posttrial interview revealed that in the jury room a juror admitted a prior conviction that would have disqualified the person from serving on the jury. A "four-state treasure hunt" ensued, culminating in the discovery of a 29-year-old felony conviction, which the losing side successfully used as the basis for a new trial motion. Benecke v. Lockheed Corp., Nat!. LJ., Feb. 11, 1991, at 3 (No. 621967, Los Angeles Super. Ct.). 2Fargo, Making the Post-trial Interview Work for You, 3 Crim. Just. 2 (Summer 1988). 3United States v. Ruggiero, 850 F. Supp. 186, 187 (E.D.N.Y 1994); United States v. Balistrieri, 577 F. Supp. 1532, 1549 (E.D. Wis. 1984) (expressing "disdain" for lawyers who contact jurors without prior judicial approval), aff'd, 779 F.2d 1191 (7th Cir. 1985), cert. denied, 477 U.S. 908,106 S. Ct. 3284,91 L. Ed. 2d 573 (1986). 4Compare United States v. Giraldi, 858 F. Supp. 85 (S.D. Tex. 1994) and United States v. Antar, 839 F. Supp. 293 (D.NJ. 1993) (imposing limitations) with In re ExpressNews Corp., 695 F.2d 807 (5th Cir. 1982) (holding unconstitutional a local rule forbidding any person from interviewing a juror except for good cause shown) and Journal Publishing Co. v. Mechem, 801 F.2d 1233, 1236 (lath Cir. 1986) (setting aside, on first amendment grounds, trial court order forbidding newspaper from contacting jurors after trial; "while a court may broadly proscribe attorney and party contact with former jurors, it does not have the same freedom to restrict press interviews with former jurors").

340


§9.6

those restrictions.> The courts assert that they have an inherent power to either forbid such interviews or regulate them to shield former jurors from harassment. Under the Code of Professional Responsibility, absent a contrary court rule, a posttrial interview by an attorney is permissible. 6 Disciplinary Rule 7-1 08(D) regulates the manner of conducting the interview, but does not purport to ban interviews. Quite to the contrary, EC 7-29 indicates that interviews are authorized: "Were a lawyer to be prohibited from communicating after a trial with a juror, he could not ascertain if the verdict might be subject to legal challenge in which event the invalidity of a verdict might go undetected."? Under the Code, the presumption is that interviews are permissible. Model Rule 3.5(b), though, differs from the Code. That rule appears to reverse the presumption by stating that any ex parte contact with a juror is forbidden "except as permitted by law." Professor Wolfram construes that language to mean that a lawyer may conduct an interview only when it is affirmatively authorized.f Assuming that it is permissible to interview, the next question is what the limitations are on the manner of conducting an interview. To begin with, the lawyer may not insist on an interview by an unwilling juror." Even if the juror consents, there are restrictions on what the attorney may say to the juror. Disciplinary Rule 7-1 08(D) prohibits a lawyer from "mak[ing] comments to a member of [a discharged] jury that are calculated merely to harass or embarass the juror." The lawyer therefore may not chastise the juror for the verdict.'? Nor may the lawyer attempt to influence jury behavior in future cases. By way of

However, on appeal in Antar, the Third Circuit held that the trial judge erred in sealing the transcript without making more specific findings or attempting to control the subjects on which the jurors could be questioned. 38 F.3d 1348 (3d Cir. 1994). See also Hansen, Post-trial Interview Limits Criticized, 80 A.BA]. 26 (Apr. 1994). 5Butler v. Howard, 872 F. Supp. 476 (WD. Mo.), ajf'd, 24 F.3d 781 (6th Cir. 1994); Feldman and Kerr, Post-trialJuror Interviews, 20 Crim. L. Bull. 449, 459 (1984) (quoting United States v. Vespe, 389 F. Supp. 1359, 1378 (D. Del.), ajf'd sub nom. United States v. Shaffer, 520 F.2d 1369 (3d Cir. 1975), cert. denied, 423 U.S. 1051,96 S. Ct. 779,46 L. Ed. 2d 640 (1976)). 6ABA Formal Op. 319 (1967). 7See generally Feldman and Kerr, supra note 5, at 459. 8Wolfram, supra §9.2 note 2, at 609. 9Hazard and Hodes, supra §9.3 note 18, §4.4: 102.

lOld.

341

§9.6


illustration, after an acquittal, it would be improper for a prosecutor to inform the jurors of uncharged misconduct by the accused that the judge had excluded from evidence under Rule 404(b); if the person again serves as a juror, he might be tempted to speculate that, as in the prior case, there was unintroduced evidence of the accused's bad character. II The danger is especially acute when the jurors in question have not been discharged from jury service; they may be called again for duty during that terrn.'? Preventive Ethics Checklist Prior to Trial D Determine whether there is any rule or order generally forbidding a pretrial investigation of the panelists' backgrounds or prohibiting the use of a particular investigative technique such as a public opinion survey. D If you use pollsters or investigators to conduct a pretrial investigation, instruct them to avoid personal contact with panel members, D not to use "rough shadowing" techniques, and D to truthfully describe their identity and purpose to any person whom they contact.

o

At Trial D During the questioning of the panel, do not

II After an acquittal in a rape case, the prosecutor attempted to talk to the jury and was rebuffed. He then wrote the jurors individually, describing the trauma of the victim and informing the jury that the accused had been previously convicted of murdering a rape victim-evidence that was not admitted at trial. The prosecutor's letter asked the jurors to explain their verdict. (Ranii, Prosecutor's Letter to RapeJurors Prompts Complaints, Natl, Lj.,July 5, 1982, at 6. Compare State v. Socolofsky, 233 Kan. 1020, 666 P.2d 725, 726 (1983) (prosecutor publicly censured for an anonymous mailing to jurors who had acquitted the accused of drug charges; the content of the mailing was a newspaper article stating that the accused had pleaded guilty to drug charges in an unrelated case; the jurors who received the mailing had not been finally discharged, and six were subsequently called for duty) with In re Respondent A, Cal. Bar Ct., Review Dept., No. 86-0-18356, at 6 (Nov. 26, 1990) (following the loss of the trial, the lawyer sent a letter to jurors to let them know of "things not presented at trial"; the letter did not result in discipline under California DR 7-106(D) due to lack of improper intent). 12E.g.,Socolofsky, 666 P.2d at 726.

342


§9.6

D

D

ask the panelists to affirmatively prejudge the weight of particular items or types of evidence, D encourage the panelists to disregard any controlling rules of law, or D pose any questions designed solely to pursue purposes that are absolutely forbidden by either the governing law or the trial judge's previous ruling. When exercising challenges, use a jury box chart to document the legitimate reasons for striking any panelists.

After Trial D Determine whether there is a rule or an order either forbidding posttrial interviews or requiring prior judicial approval of interviews. D While interviewing former jurors, do not criticize their verdict or mention items of evidence that the trial judge precluded the jury from hearing.

343

10 Opening Statement

§10.1 §10.2 §10.3

§10.4

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Limitations on the Speaking Attorney §10.3.1 In General §10.3.2 Extant Evidence §10.3.3 Available Evidence §10.3.4 Admissible Evidence §10.3.5 Evidence (Rather Than Argument) §10.3.6 Evidence That the Speaker May Offer Limitations on the Objecting Attorney

§10.1 Introduction During the typical trial, an attorney delivers two jury speeches, the opening statement and the closing argument. Chapter 13 deals with the closing argument. Much of what is written there is equally applicable to the opening statement. Thus, in both speeches, it is improper to exceed

345

§lO.l

Opening Starerrrent

the scope of the pleadings, I appeal to the prejudices of the jurors." or refer to particular jurors by name.' Likewise, in both addresses, the lawyer must refrain from disparaging the opponent+ or expressing personal opinions about the justness of a cause or a witness's credibility.5 Since forensic misconduct occurs more frequently in closing than during opening, the problems common to closing and opening will be discussed in Chapter 13. This chapter focuses on the problems peculiar to the opening statement. Sections 10.2 and 10.3 discuss the restrictions on the speaker, while §10.4 analyzes the limitations on the objecting attorney.

§10.2

Comparison of the Code of Professional Responsibility and the Model Rules

Chapter 9, devoted to the lawyer's relation with prospective and actual jurors, pointed to marked differences between the Model Rules and the Code. In contrast, the Code and the Model Rules sections applicable to opening statements are substantially the same. Disciplinary Rule 7106(C)(1)states that a lawyer shall not allude to any matter that she has no reasonable basis to believe is relevant to the case, or that will not be supported by admissible evidence. Disciplinary Rule 7-106(C)(3) adds that a lawyer may not assert personal knowledge of the facts in issue except when she testifies as a witness. Disciplinary Rule 7-106(C)(4) requires that a lawyer refrain from voicing personal opinions. Model Rule 3.4(e) combines these provisions without substantive change.

§10.1 'See, e.g., Civil Trial Manual §8l:202 (BNA 1986). 2Id. at §81 :205-206. 3M. Bright and R. Carlson, Objections at Trial 1 (1990). 4L. Decof, Art of Advocacy: Opening Statement §2:03[1], at 2-8 (1982). 5Civil Trial Manual, supra note 1, §81 :205; Decof, supra note 4, §2:03 [8], at 2-18.

346

Opening Statement

§10.3

§lO.3.2

Lim.itations on the Speaking Attorney

§10.3.1

In General

As §lO.2 noted, Model Rule 3.4(e)sets out the primary restrictions on the content of the opening statement. However, Model Rule 3.4(e) should not be read in isolation; rather, it must be construed contextually as part of the overall statutory scheme. As the Supreme Court has emphasized, "[T]he meaning of statutory language, plain or not, depends on context."! Model Rule 3.4 also contains subsection (c),stating that lawyers may not "knowingly disobey an obligation under the rules of the tribunal. ... " The task is defining the lawyer's "obligation" during opening. Since obligations (or duties) and rights are correlative, the best way to approach the task is to determine what the attorney has a right to do during opening. Simply stated, the only thing that the lawyer has the right to do during opening is to preview extant, available, admissible evidence that he may qffir at trial. 2 When the speaker knowingly attempts to overreach that right, the speaker is committing a disciplinary offense under Model Rule 3.4. §10.3.2

Extant Evidence

A clear-cut offense would be referring to evidence during opening when the attorney knows that there is no such evidence. If the lawyer knows that the evidence is nonexistent, the lawyer is guilty of a hardcore violation of Model Rule 3.4(c). The Terminology section of the Model Rules states that "knowingly" means having "actual [subjective] knowledge." However, Model Rule 3.4(e) arguably imposes a more extensive duty than mere bona fides on the speaking lawyer. The predecessor provision, DR 7-l06(C)(1), expressly adopted a "reasonable basis" standard, and the Model Code Comparison appended to Model Rule 3.4(e)

§10.3.1 'King v St. Vincent's Hosp., 502 U.S. 215, 112 S. Ct. 570,116 L. Ed. 2d 578 (1991). 2See generally R. Carlson and E. Imwinkelried, Dynamics of Trial Practice ch. 5 (2d ed. 1995).

347

§10.3.2

Opening Statement

states that that subdivision "substantially incorporates DR 7-1 06(C)(l). . . ." Under the terms of Model Rule 3.4(e), the lawyer may not "allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence.... " Admittedly, the structure of the sentence is awkward, and the meaning of the rule is consequently ambiguous. There are at least two possible readings: The expression "reasonably believe" could refer only to "is relevant," or it might have been intended to refer as well to "supported by admissible evidence." The former interpretation is unlikely.If, under that interpretation, "reasonably believe" applies only to "is relevant," there is no language to qualify "supported by admissible evidence;" and any reference to evidence that turns out to be inadmissible would violate the disciplinary rule-in effect, a strict liability offense. The latter interpretation is therefore more reasonable; under that interpretation, the lawyer commits a disciplinary offense only when he possessesthe specified mens rea. However, so interpreted, Model Rule 3.4(e) does not specify a pure heart/ empty head standard. Rather, if "reasonably believe" modifies "that will not be supported by admissible evidence" as well as "is relevant," not only does the lawyer violate Model Rule 3.4(e)when he knows that the evidence is nonexistent, but also he violates the rule when he lacks a reasonable belief that such evidence exists. The definition of "reasonably believes" in the Terminology section explains that to satisfy the standard, the lawyer's belief must be both subjectively honest and objectively warranted. The text of Model Rule 3.4(c)cuts in favor of this interpretation of Model Rule 3.4(e). Model Rule 3.4(c) proscribes "knowing[J" violations of a lawyer's "obligation[sJ under the rules of a tribunal." If a lawyer could violate the "supported by admissible evidence" clause of Model Rule 3.4(e)only by intentional misconduct, that clause would largely duplicate Model Rule 3.4(c). The courts generally reject interpretations that render parts of a statute redundant or superfluous.' The ABA Standards for Criminal Justice, The Prosecution Function and The Defense Function, reinforce this interpretation. Since the ABA promulgated those standards as well as the Model Rules, they are in pari materia with the Model Rules, and Model Rule 3.4(e)should be construed in light of those standards. Prosecution Function Standard §lO.3.2 ~arecki v. G. D. Searle and Co., 367 U.S. 303, 307-308, 81 S. Ct. 1579, 1582,6 L. Ed. 2d 859 (1961); Mail Order Assn. of Am. v. U.S. Postal Serv., 986 F.2d 509 (D.C. Cir. 1993); Beef Neb., Inc. v. United States, 807 F.2d 712 (8th Cir. 1986).

348

Opening Starerrrent

§10.3.3

3-5.5 and Defense Function Standard 4-7.4 address the opening statement, and both use the language "a good faith and reasonable belief for believing such evidence will be tendered and admitted in evidence." §10.3.3

Available Evidence

A lawyer will rarely be brazen enough to mention nonexistent evidence during opening. A far more common problem is a reference to extant evidence that is likely to be unavailable at trial. Suppose that there is a witness to a particular event, but that the lawyer realizes that if called to the stand, the witness will invoke the privilege against selfincrimination or simply refuse to testify. Or suppose that although the lawyer previously spoke with the witness, the lawyer has lost touch with the witness and has no idea of how to ensure the witness's presence at trial. Nevertheless, the attorney describes the witness's potential testimony during opening. Quite apart from the possibility of being found guilty of a disciplinary offense, the attorney faces a number of unattractive consequences. At a minimum, during closing, the opponent will be in a position to point to the failure of proof In effect, the speaker has broken a promise to the jury, and the opponent may invite the jury to treat the broken promise as an indication of the weakness of the speaker's case. 1 The opponent can ask the court reporter to prepare a transcript of the speaker's opening statement and ram the words down the speaker's throat during closing argument. Further, the opponent may move to strike references to the evidence that did not materialize, and after granting the motion, the judge can give the jury a curative instruction to disregard the references. 2 A motion to strike does not exhaust the possibilities; the opposing lawyer may also move for a mistrial. The law governing mistrial varies from jurisdiction to jurisdiction. However, in most cases, the judge will declare a mistrial if the opposing attorney has intentionally done §10.3.3 IP' Bergman, Trial Advocacy 293-295 (2d ed. 1989); 2J.Jeans, Litigation §9.03-2 (2d ed. 1992). In the view of one commentator, Melvin Belli made the mistake in the Jack Ruby trial of promising more than he could deliver; according to this commentator, the jury was noticeably disappointed by the testimony of the defense experts. L. Heller, Do You Solemnly Swear? 153 (1968). 2Decof, supra §IO.2 note 4, §2.03[3], at 2-11.

349

§10.3.3

Opening Statement

something that will probably leave an indelible impression on the jury. In many jurisdictions, the appellate courts have stated that in deciding whether to declare a mistrial, the trial judge may consider both the speaker's state of mind and the likely effect of the reference on the trier of fact. In evaluating the first factor, namely, the speaker's state of mind, numerous courts have adopted an objective standard, requiring that the lawyer reasonably assess the availability of the evidence." This applies in cases involving constitutional challenges to convictions. If the referenced prosecution witness does not testify and the accused argues that the reference violated the confrontation guarantee, courts should probe the basis for the prosecutor's belief that the witness would be available. 4 It is not enough for the prosecutor to sincerely hope that a witness will waive the privilege against self-incrimination and testify.5 Although an attorney does not guarantee that the evidence will turn out exactly as promised in opening," by the time of trial the lawyer should have a good sense of the availability of extant evidence. It is true that other courts apply a good faith standard.' However, even some of the courts that generally apply a good faith standard balk at endorsing a pure heart/ empty head test;" they caution that the lawyer's subjective good faith is 3United States v. Steinkoetter, 593 F.2d 747 (6th Cir. 1979) (a conviction was reversed because the prosecutor mentioned unrelated contemporaneous crimes and made no effort to prove the crimes or establish their relevancy). 4Gladden v. Frazier, 388 F.2d 777, 779-780 (9th Gir. 1968). The referenced witness in this case was named Rawls. On the one hand, Rawls's lawyer told the prosecutor that Rawls would not testify against the accused. In addition, Rawls had refused to confer with the prosecutor about the case. On the other hand, several people had informed the prosecutor that Rawls would testify. Based on that information, the prosecutor mentioned Rawls's expected testimony in opening, but when called, Rawls invoked the privilege against self-incrimination. State v. Frazier, 245 Or. 4, 418 P.2d 841,843 (1966). 5But see Gladden, 388 F.2d at 779. 6State v. Roberts, 255 Iowa 166, 121 N.W.2d 513 (1963) (it is almost inevitable that there will be discrepancies between the opening statement and the evidence in a complex case). 7United States v. Murrah, 888 F.2d 24 (5th Cir, 1989) (the prosecutor knew that the witness would not testify); Allen v. State, 318 Md. 166, 567 A.2d 118, 125 (1989) (the prosecutor knew the witness would invoke the privilege against self-incrimination). 8Maxworthy v. Horn Elec. Serv., Inc., 452 F.2d 1141, 1143 n.3 (4th Cir, 1972) ("[tJhe test is generally one of good faith; and in the absence of substantial error, if counsel's statement is made 'with reasonable ground to believe' the evidence is admissible, even though proof of it may be afterwards excluded, there is no misconduct"), cited in 3 M. Belli, Modern Trials §52.4 (2d ed. 1982).

350

Opening Starerrrent

§10.3.3

pertinent only as a "tipping factor" when the reference does not seem to have had a prejudicial effect on the trier of fact. 9 In ruling on mistrial motions, to gauge the other factor of the effect of the reference, the trial judge must consider the efficacy of a curative instruction to disregard the reference. If a curative instruction would suffice, the moving lawyer must be content with that remedy; 10 the judge will deny the mistrial motion. Psychologists have questioned the efficacy of curative instructions, II and in extreme cases, some courts have concluded that it is unrealistic to assume that a curative instruction will undo the damage done by the reference. 12 People v. Cru;:Y is illustrative. In opening statement in Cruz, the prosecutor elaborated on the expected testimony of an alleged eyewitness to the homicide; the prosecutor stated that the eyewitness knew the accused and was merely 40 feet away when he saw the killing. The witness did not appear at trial, and the Cruz court felt compelled to reverse despite the prosecutor's good faith. 14 In Cruz, the other proof of guilt was not overwhelming, and the prosecutor's description of the anticipated testimony was so

-cr People v. Reeves, 57 A.D.2d 1015,394 N.YS.2d 488, off'd, 44 N.Y2d 761,377 N.E.2d 480, 406 N.YS.2d 36 (1977) (the apparent diligence of the prosecutor in attempting to secure the presence of a witness promised in opening statement convinced the court that the prosecutor had made the statement in good faith). lOInUnited States v. Sloan, 36 F.3d 386 (4th Cir. 1994), during opening statement, defense counsel previewed favorable testimony by the accused. Ultimately, the accused did not testify. Sensing that the defense had employed a dirty trick, the trial judge granted a mistrial over defense objection. Initially, the appellate court held that the trial judge erred in rnistrying the case, since the judge had not considered alternatives such as a curative instruction. The court then ruled that double jeopardy precluded a retrial. IIAllen, When Jurors Are Ordered to Ignore Testimony, They Ignore the Order, Wall St.].,Jan. 25, 1988, §2, at 33 (an American Bar Foundation study); Cole, CanJurors Ignore Inadmissible Evidence, 24 Trial80, 81 (Sept. 1988) (research by M.I.T psychologist John Carroll); Marcotte, "The Jury Will Disregard .... ," 73 A.B.A.]. 34 (Nov. I, 1987). 12Ina trilogy of cases, the Supreme Court itself has voiced doubts about the efficacy of limiting and curative instructions. See Bruton v. United States, 391 US. 123,88 S. Ct. 1620, 20 L. Ed. 2d 476 (1968) (a limiting instruction specifying that a statement is admissible against one defendant, but inadmissible against the codefendant);Jackson v. Denno, 378 US. 368, 84 S. Ct. 1774, 12 L. Ed. 2d 908 (1964) (instructing the jury to disregard the accused's confession if the jury concluded that the confession was involuntary); Shepard v. United States, 290 US. 96, 54 S. Ct. 22, 78 L. Ed. 196 (1933) (a limiting instruction specifying that a statement is admissible for a nonhearsay purpose, but inadmissible as substantive evidence). 13100A.D.2d 882, 474 N.YS.2d 142 (1984). I"Id. at 183,474 N.YS.2d at 144.

351

§lO.3.3

Opening Statement

detailed that it made a lasting impression on the jury that a curative instruction could not undo. It is important to realize, though, that the disciplinary authorities can find a violation of Model Rule 3.4(e)even when the court has properly denied a mistrial motion. Suppose, for example, that the court does so by finding either that a judicial instruction to disregard could cure the damage or that the lawyer acted in good faith. Neither finding dictates the conclusion that the lawyer has complied with Model Rule 3.4(e). To begin with, a reference to unavailable evidence can violate Model Rule 3.4(e), even if standing alone, although the reference is unlikely to materially change the outcome of the case. While the drafters used the adjective "material" (in the sense of important) to limit the scope of some Model Rules, such as Model Rule 3.3(a)(I), there is no such limitation in Model Rule 3.4(e).Moreover, as previously stated, the most sensible construction of Model Rule 3.4(e)is that the lawyer must "reasonably believe" that the witness will be available. An unreasonable statement or a statement relating to a relatively unimportant issue could still amount to a violation of Model Rule 3.4(e). §10.3.4

Adrniseible Evidence

Now assume that the potential evidence in question is both extant and available. However, add the fact that there is a serious doubt about its admissibility. Suppose, for example, that during opening the plaintiff mentions other torts allegedly committed by the defendant-torts other than the tort mentioned in the complaint-but the plaintiff cannot articulate a theory of noncharacter logical relevance to justify admitting testimony about the other torts under Federal Rule of Evidence 404(b).1 In deciding whether to grant a new trial in such cases, the courts weigh both the potential prejudice to the opponent and the good faith of the speaking attorney. 2 As in the case of mistrial motions discussed in §10.3.3, while the courts sometimes avow a good faith standard, many stop short of embracing a pure heart/ empty head rule. In this context, §1O.3.4 lE.g., State v. Colvin, 425 A.2d 508 (R.I. 1981). See also Seehan v. State of Iowa, 37 F.3d 389 (8th Cir. 1994) (the accused father allegedly killed his two-year-old son; the prosecutor was an obviously expectant mother; during opening statement, she "continuously patted her pregnant belly" and remarked that the decedent "was the kind of little boy I would like to have"). 2Note, The Opening Statement, 4 Willamette L. Rev. I, 8-11 (1966).

352

Opening Sraterrrent

§10.3.4

the courts tend to require that the speaking attorney have a plausible argument for admissibility. Judges have a right to expect that trial attorneys will know the well-settled, elementary rules of evidence, and they should not routinely accept claimed ignorance as an excuse." The parallel to §IO.3.3 continues. Even if the speaker's remark does not necessitate a reversal, the remark might constitute a disciplinary offense. By its terms, Model Rule 3.4(e) can apply even when the remark is not so material or prejudicial that it probably affected the final verdict. Moreover, at least in some cases, Model Rule 3.4(e) requires more than subjective good faith. Again, the rule reads that a lawyer "shall not ... in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence .... " Here "reasonably believe" certainly modifies the "is relevant" language; if that is the case, it is a disciplinary offense to refer to any matter that the lawyer does not reasonably believe is logically relevant to the facts in issue under the pleadings.' As the Terminology section explains, "reasonably believes" contemplates an objective standard more rigorous than mere subjective good faith. Assume, however, that, while relevant, the item of evidence may be barred by the hearsay doctrine, the character prohibition, or a privilege-that is, some evidentiary rule other than the requirement for logical relevance. As previously stated, although the grammatical structure is awkward, "reasonably believe" should probably be construed as modifying "will not be supported by admissible evidence" as well. It certainly would be unfair to impose strict liability on the speaker and find a disciplinary offense whenever the evidence turned out to be inadmissible. At the polar extreme, it would render that part of Model Rule 3.4(e) redundant of Model Rule 3.4(c) to find a disciplinary violation only when the conduct is knowing and in subjective bad faith. What then should the lawyer do when the admissibility of the evidence is debatable, but the evidence is important and, if admissible, should be highlighted for the trier of fact? To escape from the horns of 3Decof, supra §IO.2 note 4, §2.03[2], at 2-10. "See Arizona v. Washington, 434 U.S. 497, 98 S. Ct. 824, 54 L. Ed. 2d 717 (1978). The original conviction was reversed for prosecutorial misconduct in withholding evidence. During opening statement at the retrial, the defense counsel discussed the earlier prosecutorial misconduct by the prosecuting attorneys. The defense counsel could not cite any authority for the proposition that the prior misconduct was relevant to the facts in issue at the retrial, and the trial judge granted a mistrial. The Supreme Court held that the accused could be tried again.

353

§10.3.4

Opening Statern.ent

this seeming dilemma, the speaker can file an in limine motion, requesting an advance ruling that the evidence is admissible.> Although such motions are typically used to exclude evidence, they can also be employed to obtain a pretrial ruling that evidence is admissible." Not only is making the motion the safer course ethically, but also it is good advocacy. Your willingness to raise the issue before opening may impress the judge with your good faith. Especially when you are relying on a novel theory of admissibility, it is in your interest to give the judge ample time to consider your argument, rather than springing it as a surprise on the judge at sidebar during trial.

§10.3.5

Evidence (Rather Than Argurnent]

In most jurisdictions, it is objectionable to "argue" during opening statement. The rule of thumb is that a statement made during opening is argumentative unless one of the lawyer's witnesses could' use those words on the witness stand; 1 if the governing evidentiary rules, particularly the restrictions on opinion evidence under Article VII of the Federal Rules of Evidence, would prohibit the witness from using those words, it is objectionable for the lawyer to make the statement. 2 The function of opening statement is to preview the admissible evidence, and argumentative remarks exceed that function. The opportunity to argue comes later in closing argument. The difficulty is that it is often hard to determine whether a remark made during opening statement falls on the argumentative side of the line. In most cases, the offended evidentiary rule will be one of the restrictions on opinion testimony stated in the Federal Rules. Those Federal Rules have made it more difficult to characterize a particular statement as argument; in some respects, those Federal Rules clearly liberalized the admission of opinion testimony, 3 but there are numerous

'j.Jeans, Trial Advocacy 208 (West's Handbook Series 1975); Rothblatt and Leroy, The Motion in Limine in Criminal Trials, 60 Ky. LJ. 611, 617 (1972). 6R. Carlson, Successful Techniques for Civil Trials §1:2 (2d ed. 1992). §lO.3.5 'Bergman, supra §10.3.3 note I, at 288. :Jeans, supra §10.3.4 note 5, §8.13, at 206. 3For example, Federal Rule 705 abolishes the former prohibition of opinions speaking to "ultimate issues" in the case.

354

Opening Sraterrrent

§10.3.5

controversies over the significance of the provisions of Article VII.4 Moreover, some commentators believe that "the old strictures against argument in the opening statement are breaking down .... "5 Today many, if not most,judges strictly apply the argument prohibition only to the portion of the opening devoted to previewing evidence. These judges believe that in another, separate portion of the opening "counsel should be permitted to describe the nature of the suit and the facts to be proven in the context of the legal theory which is to be applied.?" They countenance such a description, even though it is technically argumentative, so long as the lawyer makes it clear that he is not merely previewing the evidence. For these reasons, it is often unclear whether the objected-to statement amounts to improper argument until the judge has ruled. When there is any serious question, the lawyer may press onward until halted by the court. However, once the judge's rulings make her views evident to the speaker, the speaking lawyer must comply; 7 for the balance of the opening, those rulings define the scope of permissible advocacy. A later statement violative of those rulings would constitute a disciplinary offense under Model Rule 3.4(c).

4While the Supreme Court clarified the meaning of Federal Rule 702 in its decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), the Court left untouched the numerous disputes over the meaning of Rule 703. For example, the courts are split over the question of whether the proponent may formally introduce and present to the jury any documentary material that the expert bases her opinion on. Compare Carlson, Collision Course in Expert Testimony: Limitations on Affirmative Introduction of Underlying Data, 36 U. Fla. L. Rev. 234 (1984) with Rice, Inadmissible Evidence as a Basis for Expert Opinion Testimony: A Response to Professor Carlson, 40 Vand. L. Rev. 583 (1987). Furthermore, assume that the proponent establishes that it is the customary practice of the expert's specialty to rely on a particular type of information. The courts have divided over the question of whether the trial judge has the power to second-guess the specialty, determine that reliance on that type of information is objectively unreasonable, and preclude the expert from factoring that type of data into her reasoning. Compare In reJapanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 275-279 (3d Cir. 1983) with In re Agent Orange Prod. Liab. Litig., 611 F. Supp. 1223, 1243-1245 (E.D.N.Y 1985) and In re Paoli R.R. Yard PCB Litig., 35 F.3d 717 (3d Cir. 1994). 5W Masterson, Civil Trial Practice: Strategies and Techniques 117 (1986). 6Decof, supra §10.2 note 4, §2.03[4], at 2-13. 7Model Rule 3.4(e); DR 7-106(C)(1).

355

§10.3.6

§10.3.6

Opening

Statem.ent

Evidence That the Speaker May Offer

Judges differ over the scope of opening statement. I Some judges allow the speaker to preview any evidence that would be admissible at trial, others allow the speaker to mention both evidence that the speaker will introduce and evidence that the opposition is committed to offering," and still others narrowly restrict the speaker to admissible evidence that the speaker will offer," In criminal cases, any reference by the prosecution to what the defendant may say would violate the defendant's constitutional right not to take the stand." If the scope of the opening is clear, the lawyer must confine his remarks accordingly. The lawyer cannot circumvent the scope rules by the ploy of saying, "!f my opponent calls X, I will show you that X is not to be believed for the following reasons .... "5 While the scope rules cannot be easily circumvented, in a given case it might be difficult to establish that a violation of the rules amounts to a disciplinary offense. Model Rule 3.4(c)-not Model Rule 3.4(e)appears to control. Even if the remark exceeds the proper scope of opening, the remark would not violate Model Rule 3.4(e); that subsection forbids references to evidence that the lawyer does not reasonably believe is admissible, but ex hypothesi this evidence is admissible. The applicability of Model Rule 3.4(c) is important, since Model Rule 3.4(c) prescribes a different mens rea element than Model Rule 3.4(e). A violation of Model Rule 3.4(c) necessitates proof that the lawyer "knowingly disobey[ edJ an obligation under the" rules governing the scope of opening. This is another instance in which ethical behavior is usually good advocacy" The lawyer can lose credibility in the jurors' eyes if the

§10.3.6 "Tanford, An Introduction to Trial Law, 51 Mo. L. Rev. 623, 651-653 (1986). 2During a pretrial hearing, a voir dire examination, or a preceding opening statement, the opposition may have indicated its intent to proffer particular evidence. 3State v. Freeman, 93 N.C. App. 380, 378 S.E.2d 545,546-547 (1989) (in opening, the lawyer should not "discuss evidence he expects the other party to introduce"). See also State v. Eisenlord, 137 Ariz. 385, 670 P.2d 1209 (1983); State v. Stinson, 113 Mich. App. 719,318 N.w2d 513 (1982). 4State v. Pierce, 231 Neb. 966, 439 N.W2d 435, 444 (1989) (reversing conviction where the prosecution said in opening, "Pierce will testify but we do not know which version of the facts he'll testify to"). 5Bergman, supra §10.3.3 note 1, at 254. ~. A. Tanford, The Trial Process 166-167 (2d ed. 1993).

356

13 Closing Argument

§13.1 §13.2

§13.3

§13.4 §13.5

§13.6

Introduction Comparison of the Code of Professional Responsibility and the Model Rules PART A: SUBSTANTIVE RESTRICTIONS Summing Up §13.3.1 Referring to Perjurious Testimony §13.3.2 Misstating the Evidence §13.3.3 Referring to Extrarecord Facts §13.3.4 Referring to Matters of Common Knowledge §13.3.5 Using Analogies and Examples §13.3.6 Misusing Evidence or Evidentiary Rulings Arguing Credibility-v-Stating Personal Opinions about Credibility Arguing Inferences §13.5.1 Arguing False Inferences §13.5.2 Arguing Unreasonable Inferences §13.5.3 Arguing Negative Inferences §13.5.4 Stating Personal Opinions about Inferences Arguing the Law §13.6.l EncouragingJury Nullification of the Law §13.6.2 Misstating the Law §13.6.3 Mentioning Additional, Improper Criteria 413

§13.1

Closing Argutnent

§13.6.4

§13.7 §13.8

Appealing to Sympathy, Passion, and Prejudice §13.6.5 Stating Personal Opinions about the Application of the Law Substantive Restrictions: The Scope of the Rebuttal Argument The Doctrine of Invited Response: JustifYing Otherwise Impermissible Argument

PART B: RELATED PROCEDURES §13.9 Related Procedures: In Limine Motions before Summation §13.lO Objections or Motions to Strike during Closing Argument

§13.1

Introduction

Chapter 10 dealt with the lawyer's firstjury address, opening statement. As we saw in that chapter, the limitations on the opening statement flow from the legitimate functions of opening. For example, during opening the lawyer has the right to preview the available admissible evidence, but the lawyer may not overreach by mentioning evidence that will probably be unavailable at the time of trial. Likewise,the restrictions on closing argument are largely corollaries of the proper functions of the argument.' During closing argument, the lawyer has the right to sum up the evidence and to argue the credibility if witnesses, the plausibility if inferences, and the manner in which the law applies to thefocts. Those rights reflect the tasks that the trier of fact must perform during deliberation. The trier of fact initially decides which testimony to believe. Unless all the testimony is direct in nature, the trier must then decide which inferences to draw from the circumstantial evidence. Finally, the trier must decide how to apply the governing law to the direct testimony and circumstantial inferences in the case. The lawyer has the right to urge the trier to perform those tasks in a manner favorable to the lawyer's client, but the lawyer commits error and engages in unethical conduct to the extent that he attempts to distort the trier's performance of those tasks. §13.1

414

lCivil Trial Manual §81:50l (BNA 1986).

Closing Arguntent

§13.1

Section 13.3 of this chapter discusses the restrictions on summing up, § 13.4 reviews the limitations on arguing credibility, § 13.5 describes the regulations of arguing inferences, and § 13.6 details the strictures on arguing the application of law to fact. There is, of course, tension between the law of summation and the art of summation? because lawyers, by inclination and training, tend to personalize and appeal to the emotions of the jury. 3 While it is rare for an attorney to be disciplined for misconduct during summation," appellate courts must constantly review the propriety of forensic oratory and its effect on the jury. One of the most common contentions on appeal is that the winning attorney's summation was improper and prejudicial. 5 It is difficult to generalize from the opinions because "an argument that evokes appellate wrath in one case may cause no more than a murmur in another.:" The appellate courts are concerned not only with what was said, but also with the context in which the argument is made, whether it was a deliberate attempt to distort the process or an inadvertent slip, whether it is perceived 2CompareJ. Stein, Closing Argument §22 (1982) ("Ordinarily, matters appealing to sympathy are improper subjects of comment in argument, because jurors are thus emotionally encouraged to direct their inquiry away from the facts of the particular case and toward their own sympathies.") with an example from the Specimens of Eloquence section, id. at 129 ("He lived for a year without artificial legs. You can imagine his plight. You talk about the integrity of the human being to stand up on his own two feet; when this boy wanted to go to the bathroom he had to crawl on the ground, on the floor, until he could get to the toilet."). Stein's work is a complete and enlightening study of the law and art of closing argument; those in doubt as to the propriety of specific arguments should refer first to this work. 3L. Smith, Art of Advocacy= Summation §1.26 (1985) ("You know jurors, what really upsets me about this case? The death of that baby .... [I]f only you could cause the courtroom doors to spring open, and that little boy, little Joaquin ... could come running ... up to my client and throw his arms around his neck and say, 'Daddy 1 love you."'). Smith provides many examples of effective summations as well as a good summary of the law. 4B. Gershman, Prosecutorial Misconduct ix (1985) ("Misconduct is commonly met with judicial passivity and bar association hypocrisy."). Chapter 10 of this valuable book deals with prosecutorial misconduct in opening statement and closing argument. But see United States v. Modica, 663 F.2d 1173, 1184-1185 (2d Cir. 1981), suggesting a range of disciplinary options for trial and appellate judges, including referring the offender to disciplinary authorities and reprimanding counsel by name. 5Gershman, supra note 4, at 10-12. See United States v. Badger, 983 F.2d 1443, 1450-1451 (7th Cir. 1993) (procedure for analyzing allegations of prosecutorial misconduct during argument). 6Civil Trial Manual, supra note I, §81:50 I.

415

§13.1

Closing Argument

as having prejudiced the other side, whether the adversary brought it on by having made an improper argument himself, and, last but not least, what action was taken by the other side and by the judge by way of objection and / or instruction."

What is proper is not entirely situational, however, and some general rules may be gleaned from the cases and secondary authorities. Knowledge of the rules helps an attorney in two ways: first, to plan an argument that avoids the danger of a sustained objection and reprimand; and second, to meet an improper argument with reason and authorities. The rules of closing argument closely follow the Code and the Model Rules, for this is a topic on which law and ethics have the common goal of fairness to the adversary.

§13.2

of the Code of Professional Responsibility and the Model Rules Corrrpar-ison

Disciplinary Rule 7-106(C)(I) provides that a lawyer shall not allude to a matter that is clearly irrelevant, or that is not supported by the evidence. Disciplinary Rule 7-1 06(C)(3)states that a lawyer shall not assert personal knowledge of the facts in issue except when she is testifying as a witness. Disciplinary Rule 7-106(C)(4)provides that a lawyer shall not assert a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant, or the guilt or innocence of an accused. Disciplinary Rule 7-106(C)(4) goes on to say that an attorney "may argue, on his analysis of the evidence, for any position or conclusion with respect to those matters." Model Rule 3.4(e) continues these provisions without substantive change.

7Id.

416

Closing Argtunent

PART A: SUBSTANTIVE

§13.3

§13.3.2

RESTRICTIONS

Sununing Up

§13.3.1

Referring to Perjurious Testimony

The heart of a summation addresses wiry questions-why the jurors should believe the lawyer's witnesses, why they should draw a particular inference from the circumstantial evidence, or why they should apply the law in a particular fashion. However, before the lawyer reaches those questions during summation, the lawyer must help the jurors remember what the evidence was. This review of the evidence is usually termed summing up. Suppose that between the introduction of certain testimony and closing argument the lawyer discovers that the testimony was perjured. Chapter 14 discusses the problem of perjury. Unless the lawyer's client is a criminal accused, Model Rule 3.3 makes it clear that the lawyer may not knowingly refer to any perjurious testimony during summation.' It is immaterial that the lawyer was unaware of the perjurious character of the testimony when the evidence was introduced. §13.3.2

Misstating the Evidence

In summing up, the lawyer must restrict himself to admitted, nonperjurious testimony. Consequently, it is improper to misstate the evidence. If the plaintiff's witness said that the defendant's car was going 60 miles an hour, during summation the plaintiff's counsel may not assert that there was testimony that the car was speeding 70 miles an hour. If a defense expert testified that the accused "might have been insane," during summation the defense counsel may not assert that there was testimony that the accused was "certainly" or "definitely" msane.

§13.3.1 'People v. Bertagnolli, 861 P.2d 717 (Colo. 1993) (lawyer may not refer to expert testimony that lawyer knows expert has recanted).

417

§13.3.2

Closing Argum.ent

Of course, many misstatements during closing argument are inadvertent, rather than intentional. At trial, lawyers tend to hear the testimony they expected, not the testimony actually given on the witness stand. When a lawyer has lived with a case for years before going to trial and has reviewed a particular witness's statement many times before trial, it is difficult for the lawyer to erase that statement from his mind and listen to the witness's testimony as if hearing the story for the first time. The difficulty of this task explains why the lawyer's primary job during the trial is listening. When key testimony is given, the lawyer should take notes. Even when the note is mistaken, it can be used to document the lawyer's good faith during summation. If the lawyer cannot remember the testimony exactly, the lawyer should consult with the court reporter before summation. When the judge thinks that the question is important enough to necessitate checking the testimony, the judge should direct the court reporter to read back the testimony. 1 The lawyer can do likewise before summation. §13.3.3

Referring to Extrarecord Facts

The last section noted that it is improper to misstate the evidence. It is even more objectionable to refer to facts that are not in the evidentiary record. 1 In this situation, there is "nothing in the record" to support a factual assertion." Standing alone, a knowing reference to a fact outside the record is a violation of Model Rule 3.4(e), restricting the lawyer to references to matters "supported by ... [admitted] evidence." In many cases, the violation will be compound because the reference will run afoul of other ethical prohibitions. Suppose, for example, that the extrarecord fact could not have been inserted in the record because it was inadmissible. Model Rule 3.4(e) confines the lawyer's summation to "admissible" evidence. In one case, the plaintiff's attorney mentioned a subsequent repair measure that had not been proven §13.3.2 'Smith v. Wright, 512 S.W2d 943, 947 (Ky. 1974). See also Moss v. Mittel, 253 Ky. 504,69 s.wza 1046 (1934). §13.3.3 IIn Moreland v. State, 373 So. 2d 1259 (Ala. Crim. App. 1979), the prosecutor quoted the victim as having testified that the accused told her he was going to burn the house "like he did before." A review of the record showed that the victim had not so testified, and the conviction was reversed. See also United States v. Murrah, 888 F.2d 24 (5th Cir. 1989). 2Sanborn v. Commonwealth, 754 S.W2d 534,543 (Ky. 1988).

418

Closing Argwnent

§13.3.4

at trial. The subsequent repair doctrine (now codified in Federal Rule of Evidence 407) barred the admission of testimony about the measure, and the appellate court said that the "misstatement of the evidence [was] made especially egregious by the fact that the evidence would have been inadmissible as a remedial measure."3 The worst-case scenario is the situation in which the trial judge has already ruled the evidence inadmissible. A reference to the evidence in the face of the ruling is hard-core misconduct and can qualify as plain error. 4 Or assume that when the lawyer mentions the extrarecord fact, he states or implies personal knowledge of the fact. In Robinson v. Commonwealth,5 during closing the prosecutor informed the jury that he had "been down there and talked to everyone and no one heard any shots being fired. You see this defendant and his witnesses are lying." In one of the classic cases, Berger o. United States.: during closing the prosecutor not only referred to a statement by an eyewitness he had personally interviewed, but also belittled the evidentiary rules that barred the admission of her statement. 7 Model Rule 3.4(e) separately prohibits "assert[ing] personal knowledge of facts in issue except when testifying as a witness.... " This type of violation can be particularly serious when the violator is a prosecutor. The defense counsel can plausibly contend that the violation has a constitutional dimension; as Professor Ronald Carlson has noted, by becoming an unsworn witness against the accused, the prosecutor arguably denies the accused her rights under the confrontation guarantee." §13.3.4

Referring to Matters of Common Knowledge

Realistically,neither the jury nor the lawyers can be strictly limited to the formally admitted evidence. For example, in cases arising from automobile collisions, during deliberation the jury can draw on the 3Edwards v. Sears, Roebuck and Co., 512 F.2d 276, 285-286 (5th Cir. 1975). "United States v. Flores-Chapa, 43 F.3d 156 (5th Cir. 1995). 5264 Ky. 394, 395, 94 S.W.2d 1004, 1005 (1936). 6295 U.S. 78, 87 (1982). 7Id. ("Now imagine that! But that is the rules of the game and I have to play within those rules."). 8Carlson, Argument to the Jury and the Constitutional Right of Confrontation, 9 Crim. L. Bull. 293 (May 1973).

419

§13.3.4

Closing Argwnent

common fund of information that all reasonably intelligent adults possess. Similarly,in such cases, during summation a lawyer may assert that a car ordinarily will not start with the ignition off.I When a factual proposition is truly a matter of common knowledge.? a lawyer may mention that fact during summation, even if no evidence has been formally admitted to support that fact. Federal Rules of Evidence 20 I and 702 determine how far the lawyer may go under this doctrine. Federal Rule 20 I governs judicial notice. Rule 20 I(b)(1)states that a proposition is judicially noticeable if "it is ... generally known within the territorial jurisdiction of the trial court." For instance, assume that in the jurisdiction in which a particular traffic accident case arises there is a statute declaring that the speed limit in any business district is 25 miles per hour. In the town in question, any reasonably knowledgeable adult would know that the intersection of B and 5th Streets is situated within the business district. In this case, a lawyer could refer to that fact, even if no witness had testified the intersection was in a business district, because all or most of the jurors would be familiar with that fact. 3 If there was an objection, the lawyer could request judicial notice from the judge. When the matter is truly one of common knowledge, the trial judge will often grant the request during summation and overrule the objection on that ground. Prosecution Function Standard 3-5.9 of the ABA Standards for Criminal Justice expressly authorizes the prosecutor to mention "matters of common public knowledge based on ordinary human experience or matters of which the court may take judicial notice." Although matter of common knowledge is the traditional basis for judicial notice, alljurisdictions now recognize a second basis-verifiable certainty. Thus, Federal Rule of Evidence 20 I(b)(2) adds that a factual proposition is judicially noticeable when it is "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." By way of example, this is the provision invoked when a trial judge notices a scientific proposition such as the general reliability of breathalyzer tests. While subdivisions (b)(I) and (b)(2)both state bases for judicial notice, there is an important difference between §13.3.4 'Revlon v. Dallas Ry. and Terminal Co., 117 S.W2d 876 (Tex. 1938). 2Parker v. State, 265 Ark. 315, 578 S.W2d 206 (1979); Haynes by Haynes v. Green, 748 S.W2d 936,939 (Mo. App. 1988); Beliveau v.John B. Varick Co., 81 N.H. 57, 120 A. 884, 885 (1923); Lucas, Closing Argument, 21 Trial Law. Q 19, 20 (1990). 3Mansfield,Jury Notice, 74 Geo. LJ. 395 (1985).

420

Closing ArgtUllent

§13.3.5

them. In ruling under subdivision (b)( 1), the judge simply draws on her familiarity with the common stock of local knowledge. The judge asks: Would the average adult know that the intersection of B and 5th Streets is located in the business district? The judge can answer that question without requiring the parties to make any formal written submissions. However, when the lawyer resorts to subdivision (b)(2), the judge will typically insist that the lawyer make a written submission under Federal Rule 20 1(d)-(e).4 The judge might be familiar with the lay of the downtown business district, but the judge may not be conversant with the scientific principle or theory the lawyer is relying on. The proposition may be a verifiable certainty under subdivision (b)(2), but it hardly qualifies as a matter of common knowledge under subdivision (b)(l). In more extreme cases, the proposition falls short of qualifying even under subdivision (b)(2). Suppose, for instance, that during summation the lawyer contemplates reading from a text asserting that identification evidence is one of the most dangerous types of testimony> or proposes asserting that "there cannot be a man on this jury but what knows of his own knowledge and good common sense that a man can stop a locomotive in going thirty rods if he tries to.?" Those assertions are certainly not part of the common fund of lay information; rather, they are so specific that a judge would be reluctant to notice them under subdivision (b)(2). The more debatable the proposition," the greater the need for testimony to support the proposition." The testimony might have to be admitted as expert testimony under Federal Rule of Evidence 702.9

§13.3.5

Using Analogies and Examples

Just as the lawyer can supplement the record by mentioning matters of common knowledge during summation, the lawyer can use analogies "Levin and Levy, Persuading the Jury with Facts Not in Evidence: The FictionScience Spectrum, 105 U. Pa. L. Rev. 139, 165-166 (1959). 5Bonner v. State, 43 Md. App. 518,406 A.2d 646, 648 (1979). 6Chellis Realty Co. v. Boston and Me. R.R., 79 N.H. 231, 106 A. 742, 744 (1919). 7Carnes v. Commonwealth, 406 S.W2d 849, 850 (Ky. 1966) (90 percent of the crime in the county can be traced to alcohol). SLevin and Levy, supra note 4, at 166. 9See Daubert v. Merrell Dow Pharmaceutical, Inc., 113 S. Ct. 2786, 125 L. Ed. 2d

469 (1993).

421

§13.3.5

Closing Arguxnent

and examples. 1 An analogy can be an effective rhetorical device." For example, suppose that a prosecutor had no direct evidence of an accused's guilt and had to rely on circumstantial testimony. The prosecutor might fear that, thanks to television and the movies, some of the jurors have a misconception that circumstantial evidence is intrinsically unreliable. To correct that misconception, the prosecutor would not only request a judicial instruction to the contrary, but also during closing would give the jury a commonsense comparison such as Robinson Crusoe's discovery of footprints in the sand." Analogies can be drawn from many sources," including fictional literatures such as Robinson Crusoe or Shakespeare," the Bible,' current events," and history? While the use of analogies can be a legitimate and important advocacy technique, the lawyer should distinguish among three situations. The first is the case in which the lawyer makes it clear to the jury that the analogy refers to a hypothetical or fictitious incident. The analogy is pertinent simply because it "symboliz[es] or illustrat[es] a general truth."!" In some cases, such as the example of the story of Robinson Crusoe or Little Red Riding Hood, 11 it will be obvious that the lawyer is not alluding to a historical incident. In other cases, the lawyer makes it clear that the example did not actually happen. So long as that is either evident or made clear, the rhetorical device is proper.

§13.3.5 'Mclslhaney, Analogies in Final Argument, 6 Litigation 37 (Winter 1980); Spangenberg, Basic Values and the Techniques of Persuasion, 3 Litigation 13 (Summer 1977). 2Smith, supra §13.1 note 3, §1.31. 36 Wigmore on Evidence §1807, at 359 (Chadbourn rev., 1976). "See generally R. Moses, Jury Argument in Criminal Cases-A Trial Lawyer's Guide (1985). 56 Wigmore on Evidence, supra note 3, §1807, at 361 (citing Tilton v. Beecher, 3 Off Rep. 932 (N.Y 1875) (counsel quoted the Bible, Hawthorne, Burns, and Whittier)). 6Curriden, Bobby Lee Cook: Georgia Maverick, 75 A.B.A.]. 68, 71 (Mar. 1989). 7Williams, The Criminal Lawyer in Antebellum South Carolina, 56 S.C. Hist. Mag. 138,146 (1955) ("The Father, the Son, and the Holy Ghost, and the Old and New Testaments were called in as witnesses in case after case."). 8Harness v. Commonwealth, 475 S.W.2d 485, 490 (Ky.), cert. denied, 409 U.S. 844, 93 S. Ct. 46, 34 L. Ed. 2d 84 (1972). 96 Wigmore on Evidence, supra note 3, §1807, at 363 (similar charges brought against historical figures). IOId.at 359. IIWilliams v. State, 377 So. 2d 634 (Ala. App.), cert. denied, 377 So. 2d 639 (Ala. 1979).

422

Closing Argtunent

§13.3.6

The second situation is a case in which the lawyer suggests that the incident mentioned in the analogy actually occurred. When that is the thrust of the argument, the rules stated in §13.3.4 govern. If the incident is a matter of common knowledge, the reference is proper; if not, the reference is objectionable. The third situation is a case in which the lawyer purports to draw on his own personal experiences. 12In closing, the lawyer might refer to "a story about his boyhood on the farm."13 Or to illustrate the appropriate standard of care, the lawyer might describe the handyman his father hired. This sort of analogy is advocacy at two levels. First, like a reference to a famous book or historical incident, the analogy might help to illustrate a pertinent general truth. Second, a personalized analogy can ingratiate the lawyer to the jury; it humanizes the lawyer and enhances the lawyer's credibility in the jurors' minds. 14Precisely for that reason, though, many trial judges flatly forbid such analogies. 15If the trial judge has announced that she forbids such analogies, resort to such an analogy during closing could be a violation of Model Rule 3.4(c). §13.3.6

Misusing Evidence or Evidentiary Rulings

In many cases, trial judges admit evidence for limited purposes. Thus, under Federal Rule of Evidence 404(b), the judge may admit testimony about an uncharged crime committed by the accused on a noncharacter theory of logical relevance. Under Federal Rule 80l(c), the judge might accept testimony about an out-of-court statement on the nonhearsay theory that it tends to show the declarant's state of mind. Or the judge might admit evidence of a product's safety history to impeach the plaintiff's witnesses, but not to prove that the product was improperly designed. I If the judge admits the evidence for a limited purpose, the lawyer may not encourage or invite the jury to misuse the evidence for other purposes. 12Triplett v. Napier, 286 S.W2d 87, 90 (Ky. 1976) (the lawyer's own experience with chiropractors). 13McElhaney, supra note I, at 38-39. l-1Id. at 39. 15Eischen, Use of Analogies in Closing Argument, 32 Trial Law. Guide 249, 258 (1988) ("personal stories"). §13.3.6 IDrake v. Caterpillar Tractor Co., 15 Ohio St. 3d 346, 474 N.E.2d 291 (1984).

423

§13.3.6

Closing Argtnnent

The lawyer must be equally careful if he mentions evidentiary rulings in the case. Suppose that the judge sustained an objection on privilege grounds. It is true that in some jurisdictions a lawyer may invite the jury to draw an adverse inference from the opponent's invocation of a privilege; in these courts, the lawyer may use the assertion of the privilege as the legitimate basis for an inference that the suppressed testimony would have been unfavorable to the party claiming the privilege. 2 However, most state and federal courts follow proposed Federal Rule of Evidence 513: "The claim of a privilege, whether in the present proceeding or upon a prior occasion, is not a proper subject of comment by ... counsel. No inference may be drawn therefrom."3 More broadly, if the judge has sustained an objection and excluded an item of evidence, during summation the lawyer may not ask the jury to speculate as to the content of the excluded evidence." A lawyer who has had an objection sustained against him is not the only counsel who must be cautious during summation. An attorney who has won a ruling can err by misusing the ruling. For example, suppose that the attorney has defeated a motion for a directed verdict. When the judge denies such a motion, the judge rules only that the evidence is legally sufficient to sustain the initial burden of production or going forward. During summation, it would be improper for the winning attorney to urge the jurors to look to the judge's ruling in deciding whether the lawyer's client has sustained the ultimate burden of proof 5 The judge rules on the initial burden of production, rather than the ultimate burden of proof, and like the misuse of evidence admitted for a limited purpose, this urging mischaracterizes the judge's ruling.

2See §13.5.3. 3E.g., Cal. Evid. Code §913. 4Ryan v. Monson, 33 Ill. App. 2d 406, 179 N.E.2d 449, 458 (1961) ("Now whether there was some agreement between them or what, we don't know. The objection was sustained to that, and that's something you haven't heard. But I think it would be very important if we knew ... what happened, anyway."). -Amoldt v. Ashland Oil, Inc., 186 W Va. 394,412 S.E.2d 795 (1991).

424

Closing Argwnent

§13.4

Arguing Credibility-Stating Opinions about Credibility

§13.4

Personal

After summing up, the lawyer customarily begins her argument. Many trials evolve into swearing contests, and in the heat of battle, the lawyer may be tempted to state her opinion about the credibility of key witnesses. However, Model Rule 3.4(e) declares that during summation the lawyer may not "state a personal opinion as to ... the credibility of a witness.... " The lawyer may not voice an unsworn opinion during closing argument. 1 To some extent, complying with this prohibition is a linguistic game.? When discussing the testimony of favorable witnesses, the lawyer may and should exude confidence. Conversely, while attacking opposing testimony, the lawyer's voice inflection and body language ought to suggest disbelief.3However, the lawyer may not verbalize the opinions reflected in such demeanor." The lawyer should be wary of beginning sentences with the pronouns I and vve,5 especially when the first person pronoun is followed by a verb such as think,fiel, or belieoe» A reference to "my opinion" virtually invites an objection." The word liar §13.4 'C. Warvelle, Essays in Legal Ethics 120 (1902); United States v. Mueller, 74 F.3d 1152, 1157 (11th Cir. 1996). 2Comment, Prosecutoria1 Summation: Where Is the Line between "Personal Opinion" and Proper Argument?, 46 Me. L. Rev. 241, 242 (1994) ("playing semantics"). 31d. 'C. Wolfram, Modern Legal Ethics 624 (1986). 5United States V. Rivera, 22 F.3d 430,437 (2d Cir. 1994) (collecting cases); Lundy V. Campbell, 888 F.2d 467,479 (6th Cir. 1989) (ten instances in which the prosecutor used "I" during summation); Stein, supra §13.1 note 2, §70, at 178. 6R. Harris, Hints on Advocacy (Intended for Practitioners) in Civil and Criminal Courts (with Suggestions) 156 (W. Murfee sr. revi. 1880): An acute, but severe, judge once said to a jury: "[T]he counsel has said 'I think this,' and 'I believe that.' A counsel has no right to say what he thinks or what he believes; but since he has told you, gentlemen, his belief, I will tell you mine-that if you were to believe him, and acquit his client, he would be the very first man in the court to laugh at you." See also United States V. Newton, 41 F.3d 1422, 1429 (11th Cir. 1994); United States v. Carroll, 26 F.3d 1380, 1387 (6th Cir. 1994) ("Even though we recognize that 'I suggest' or 'I submit' is not equivalent to 'I believe,' we have found in some cases that 'the effect of the two statements taken together can be reasonably construed to be based on personal belief' "); United States v. Wayman, 510 F.2d 1020, 1028 (5th Cir.), cert. denied sub nom. Moore V. United States, 423 U.S. 846, 96 S. Ct. 84,46 L .Ed. 2d 67 (1975). 7Ferreria V. Fair, 732 F.2d 245,249 (1st Cir.), cert. denied, 469 U.S. 1017, 105 S. Ct. 430,83 L. Ed. 2d 356 (1984).

425

§13.4

Closing Argument

should usually be avoided, since the court might regard the statement as an expression of personal opinion. 8 Closely related to the rule against personal opinion is the rule against "vouching" for a witness. It is not uncommon for a prosecutor to argue in effect that the jury should believe a witness because the prosecutor believes the witness." The argument often suggests knowledge of facts outside the record and asks the jury to find guilt on the basis of the prosecutor's decision. Courts uniformly condemn such arguments. 10 This is another situation in which there tend to be multiple violations of the ethical prohibition. A lawyer stating her opinion often succumbs to the temptation to suggest that the opinion is based on what the lawyer knows to be true. Lawyers cannot, of course, assert personal knowledge of disputed facts during closing argument. II

§13.5

Arguing Inferences

§13.5.1

Arguing False Inferences

After arguing the credibility of witnesses, the attorney argues the inferences to be drawn from the witnesses' testimony. Section 13.3.1 pointed out that as a general proposition during summation the lawyer may not mention favorable testimony that he knows to be perjurious. This section deals with a closely related problem. Suppose, on the one hand, that the testimony is truthful, or at least that the lawyer does not 80lenin v. Curtis and Johnson, Inc., 424 F.2d 769 (D.C. Cir. 1968), cert. denied, 394 U.S. 993, 89 S. Ct. 1485,22 L. Ed. 2d 769 (1969); Dupree v. State, 514 P.2d 425, 426427 (Okla. Crim. App. 1973); Underwood, Adversary Ethics: More Dirty Tricks, 6 Am. J. Trial Advoc. 305-307 (1982); Comment, Prosecutorial Summation, supra note 2, at 242 (there is particular judicial "hostility to prosecutorial use of the term 'lie'"). 9United States v. DiLoreto, 888 F.2d 996 (3d Cir. 1989) (conviction reversed for argument in which the prosecutor said, "We don't put liars on the stand"). "United States v. Patterson, 23 F.3d 1239, 1250 (7th Cir. 1994); Carroll, 26 F.3d 1380; United States v. Robinson, 8 F.3d 398, 415 (7th Cir. I993); DiLoreto, 888 F.2d 996; United States v. Wallace, 848 F.2d 1464, 1474 (9th Cir. 1988). Cf. People v.Jackson, 7 N.Y2d 142, J 64 N.E.2d 381, 196 N.YS.2d 79 (1959) (bolstering identification witnesses by assurances that witness in fact recognized defendant, and that prosecutor would tell jurors "after the trial was over" the reason why the witness had not picked defendant out of a lineup). IIModel Rule 3.4(e).

426

Closing ArgulDent

§13.5.1

"know" that the testimony is perjurious. On the other hand, the testimony is logically relevant to support an inference that the lawyer knows to be false. May the lawyer use the testimony to construct an argument for that inference? As in §12.3, discussing the cross-examination of truthful witnesses, the answer turns on the identity of the lawyer's client. The answer is "yes" if the client is a criminal accused. So long as he does not rely on perjurious testimony, a criminal defense attorney can argue for a false inference. I The criminal defense attorney may attack the prosecution's version of the facts, even when he knows that the version is true.? Suppose, for example, that the accused has confided in her lawyer that she, the accused, was present at the crime scene. However, although the police found some latents at the scene, none of the latents matches the accused's fingerprints. The defense counsel could ethically argue that the examiner's testimony shows that the accused was not even at the crime scene. In Johns o. Smyth,3 a federal judge held that a defense lawyer must argue a false inference that is fairly supported by the evidence. Johns was a homicide case in which the prosecution introduced the defendant's confession; the confession admitted the killing, but claimed provocation. The defendant did not testify. Apparently, the defendant had told his attorney that the claim of provocation was false, and the attorney did not argue provocation to mitigate the offense. The federal court granted a writ of habeas corpus because the lawyer had allowed his conscience to trump his duty to the defendant. The court held that the lawyer was obligated to take advantage of the favorable, but false, aspects of the confession introduced by the prosecutor. The answer is "no" when the client is the prosecuting sovereign. 4 The prosecutor may not argue for a false inference, even if the admissible evidence in the record would support the inference." Prosecution §13.5.1 'Mich. Op. CI-1164 (1987) (it is ethical to introduce defense witnesses to testify truthfully, even when the purpose is to support a false inference). 2M. Freedman, Lawyers' Ethics in an Adversary System 44-45, 79-80 (1975). 3176 F Supp. 949 (E.D. Va. 1959). 4Wolfram, supra §13.4 note 4, at 651. 'Id. United States v. Latimer, 511 F2d 498 (lOth Cir. 1975), provides an excellent example of the different responsibilities of the prosecutor and defense counsel. In a trial for bank robbery, there was testimony that a surveillance camera was activated, but no reference was made to any photographs obtained. In closing, the defense counsel alluded to this gap in the record and suggested that the reason no photographs were introduced was that the photographs would show that the accused was not the robber. The truth of

427

§13.5.1

Closing Argument

Function Standard 3-5.8(a) states that the prosecutor may not "mislead the jury as to the inferences it may draw." The answer is unclear when the client is a civil litigant. Leading authorities argue that it is unethical for a civil lawyer to knowingly argue for a false inference," and the Code and the Model Rules proscribe false statements of fact. 7 However, there is no language comparable to Prosecution Function Standard 3-5.8(a), forbidding arguments for "mislead [ing] ... inferences."

§13.5.2

Arguing Unreasonable Inferences

Dean Wigmore takes the position that in urging the trier to draw a particular inference, the lawyer should have great latitude;' and the courts concur with that position." Furthermore, Prosecution Function Standard 3-5.8(a) states that" [t]he prosecutor may argue all reasonable inferences from evidence in the record." However, there are limits. The judge has some power to prevent the jury from making irrational decisions. For example, when the judge concludes that the foundation of evidence is too weak to allow a jury to infer that a witness has firsthand knowledge, or that an exhibit is authentic, Federal Rule of Evidence I 04(b) empowers the judge to exclude that item of evidence. Similarly, if the judge believes that even cumulatively the evidence introduced by the party with the burden of production is too flimsy to support an inference of the existence of an essential element in the case, Federal Rule of Civil Procedure 50 enables the judge to enter judgment as a matter of law for the opposing party. By the same token, the judge can determine that as a matter of logic and human experience it would

the matter was that the surveillance camera had malfunctioned, and that there were no photographs. To rebut the false inference, the prosecutor informed the jury of the malfunction; the appellate court reversed because the prosecutor had gone outside the record. It was improper for the prosecutor to do so, even to rebut a false inference. (The prosecutor should have moved to reopen the case for the purpose of adducing the admissible evidence needed to rebut the false inference.) 6Wolfram, supra § 13.4 note 4, at 65!. 'DR 7-102(A)(5);Model Rule 3.3(a)(l). §13.5.2 16Wigmore on Evidence, supra § 13.3.5 note 3, § 1807, at 366. 2See, e.g., State v. Armbruster, 641 S.W2d 763, 766 (Mo. 1982).

428

Closing Argument

§13.5.3

be conjectural or speculative to draw a particular inference from the evidence in the record." Is the criminal defense attorney free to argue for irrational inferences? Quite to the contrary, Defense Function Standard 4-7 .8(a) of the ABA Standards for Criminal Justice contains language identical to that in Prosecution Function Standard 3.5-7. Moreover, although the judge may not direct a verdict against an accused, the judge can require the defense attorney to confine the summation to inferences supported by the evidence. The cumulative impact of §§ 13.5.1 and 13.5.2 is that while the judge may apparently forbid the defense lawyer from arguing an inference unsupported by the evidence, the defense lawyer may argue even a false inference when the record contains the requisite support. There is authority that the defense lawyer must do so-under pain of being found to have rendered ineffective assistance of counsel. 4

§13.5.3

Arguing Negative Inferences

Sometimes the key inference in a case is negative. The "missing witness" doctrine is illustrative. In most jurisdictions, I if a party fails to call a potential witness who is peculiarly available to that party, during summation the opposing party may invite the jury to draw the negative conclusion that the witness's testimony would have been unfavorable to the former party? By way of example, suppose that the evidence makes it clear that a civil plaintiff's child or employee witnessed the central event in the case." For some reason, the plaintiff never calls the potential witness to the stand to corroborate the plaintiff's testimony. During closing argument, the defense might ask rhetorically why the plaintiff did not do so; the defense could tell the jury 3Sexton v. Commonwealth, 304 Ky. 172, 200 S.W2d 290 (1947) (speculative); Commonwealth v. Kozec, 399 Mass. 514, 522, 505 N.E.2d 519, 524 (1987) (conjectural); State v. Meany, 262 Minn. 491, 115 N.W2d 247 (1962) (the evidence was insufficient to support the inference that the accused was intoxicated at the time of the accident). johns v. Smyth, 176 F. Supp. 949 (E.D. Va. 1959). §13.5.3 'But see Herbert v. Wal-Mart Stores, Inc., 911 F.2d 1044 (5th Cir. 1990); Casenote, Herbert V. Wal-Mart Stores, Inc.: The Death of the Uncalled-witness Rule?, 37 Loy. L. Rev. 387 (1991). 2United States V. Poindexter, 942 F.2d 354 (6th Cir.), cert. denied, 502 U.S. 994, 112 S. Ct. 615,116 L. Ed. 2d 637 (1991); McNaughton V. United States, 888 F.2d 418, 423 (6th Cir. 1989); Francis V. Commonwealth, 311 Ky. 318, 224 S.W2d 163 (1949). 3Tonarelli V. Gibbons, 121 Ill. App. 3d 1042,460 N.E.2d 464 (1984).

429

§13.5.3

Closing Argwnent

that the most commonsense explanation is that the plaintiff knew that the testimony would have contradicted the plaintiff's version of the facts. When, if ever, would a "missing witness" argument violate an ethical prohibition? In some cases, the negative inference can be so strained that the inference would be unreasonable. There might be no special relationship between the potential witness and the opponent; the witness might be equally available to both sides. Or there might be a perfectly good explanation for the failure to call the potential witness." If the arguing attorney is aware of the facts making the inference untenable as a matter of law, the argument might violate the general standards discussed in § 13.3.3. In other cases, while the inference is reasonable, it is forbidden by the Constitution or rules of evidence. As previously stated, as a matter of decisional or statutory evidence law, many jurisdictions prohibit lawyers from inviting a negative inference from the opponent's invocation of a privilege. By constitutional compulsion, all jurisdictions forbid a prosecutor from inviting a jury to draw an adverse inference from the accused's assertion of the fifth amendment privilege against self-incrimination." Model Rule 3.4(e) restricts the lawyer to "admissible" matter during closing argument. The fifth amendment renders the adverse inference inadmissible as matter for summation. Finally, the lawyer could conceivably violate Model Rule 3.4(c). In a substantial number of jurisdictions, as a matter of procedure the lawyer contemplating making a "missing witness" argument in closing must obtain the trial judge's prior approval. 6 At an out-of-court hearing, the judge passes on such questions as the existence of a special relationship to the opposing party and the adequacy of any excuse for the nonproduction of the potential witness. If a lawyer is aware of this procedural requirement and disregards it, the default amounts to "knowing[J disobe [dience of] an obligation under the rules" governing the trial.

'Ballard v.Jones, 21 Ill. App. 3d 496,316 N.E.2d 281 (1974) (the potential witness's testimony would have been cumulative); Gossett v. Commonwealth, 402 S.W.2d 857 (Ky. 1966) (the potential witness was unavailable). 5United States v. Hasting, 461 U.S. 499, 103 S. Ct. 1974, 76 L. Ed. 2d 96 (1983); Griffin v. California, 380 U.S. 609, 85 S. Ct. 1229, 14 L. Ed. 2d 106 (1965). 6United States v. Pitts, 918 F2d 197, 199 (D.C. Cir. 1990); United States v. Blakemore, 489 F2d 193, 196 (6th Cir. 1973) (out-of-court hearing).

430

Closing Argument

§13.5.4

§13.6.l

Stating Personal Opinions about Inferences

Model Rule 3.4(e) expressly prohibits counsel from stating personal opinions on "the credibility of a witness" and the ultimate questions such as "the justness of a cause," "the culpability of a civil litigant or the guilt or innocence of an accused." This wording does not explicitly forbid counsel from voicing personal opinions as to the plausibility or strength of inferences from the circumstantial evidence in the case. However, it seems clear that the omission is a mere oversight. In construing statutes, courts may "correct" obvious oversights.' The courts construe the prohibition on opinions as extending to "the attorney's personal evaluation of the weight of the evidence."? As a matter of ethics, there is no principled distinction between opinions on that subject and the opinions expressly forbidden by Model Rule 3.4(e). Hence, the lawyer may personally vouch for neither the believability of a witness nor the probability of an inference from the witness's testimony.

§13.6

Arguing the Law

§13.6.1

EncouragingJury Nullification of the Law

After summing up and arguing credibility and inferences, the lawyer discusses the application of the governing law to the facts as found by the jury. In some cases, the lawyer may be tempted to urge the jury to ignore the judge'S instructions and return a verdict that "does justice." In criminal cases, the judge cannot direct a verdict of guilty, even though the evidence clearly establishes guilt beyond a reasonable doubt. Furthermore, the double jeopardy clause bars an appeal by the prosecution from a verdict of acquittal. 1 Thus, the jury has the power to acquit, "even if its verdict is contrary to the law as given by the judge

§13.5.4 lW Eskridge and P. Frickey, Cases and Materials on Legislation: Statutes and the Creation of Public Policy 633 (1988); Eskridge, The New Textualism, 37 UCLA L. Rev. 621, 687 (1990). 2Harris v. United States, 402 F.2d 656,658-659 (D.C. Cir. 1968) (Burgen ].), §13.6.1 I Ball v. United States, 163 U.S. 662, 16 S. Ct. 1192,41 L. Ed. 300 (1896).

431

§13.6.1

Closing Argum.ent

and contrary to the evidence."2 Suppose a pro-life supporter is prosecuted for an illegal demonstration at an abortion clinic. Suppose further that most of the jurors are strongly pro-life. The defense lawyer would like to be able to tell the jurors that even though they might believe the defendant broke the law, they have the power to return a verdict of not guilty, which cannot be set aside by the judge. Such an argument would ask the jury to "nullify" the law. In the early days of the Republic, the memory of oppressive English laws was still fresh, and many jurisdictions permitted lawyers to explicitly argue for jury nullification. However, as that memory receded, appellate courts gave trial judges more and more power to ensure the rationality of verdicts. Today, with few exceptions," the almost universal view in the United States is that jury nullification arguments are impermissible." The jury might disregard the law during the privacy of its deliberations on its own motion, but the lawyer has no right to invite the jury to do SO.5 When the lawyer is intrepid enough to make such an argument, the trial judge can hold the lawyer in contempt. If the lawyer realizes-and almost all trial lawyers do-that jury nullification arguments are verboten, the lawyer is guilty of a violation of Model Rule 3.4(c).

§13.6.2

Misstating the Law

Section 13.3.2 pointed out that the lawyer may not misstate the evidence in the record. Nor may the lawyer misstate the governing law. 1 In a civil case, the prohibition applies to damages law as well as the law controlling liability; in criminal cases, the prohibition extends to sentencing law as well as the law determining the accused's guilt or innocence.? For example, in any civil case in which the governing standard is 2United States v. Moylan, 417 F2d 1002, 1006 (4th Cir. 1969), cert. denied, 397 U.S. 910, 90 S. Ct. 908, 25 L. Ed. 2d 91 (1970). 3Md. Const. art. §5; State v. Mayo, 125 N.H. 200,480 A.2d 85 (1984) (refusing instruction, but allowing argument). 'United States v. Dougherty, 473 F2d 1113 (D.C. Cir. 1972) is the leading case. See also United States v. Trujillo, 714 F2d 102 (11th Cir. 1983). 5United States V. Wiley, 503 F2d 106 (8th Cir. 1974). §13.6.2 'Stein, supra §13.1 note 2, §20. 2Edwards v. Scraggy, 849 F2d 204, 210 (5th Cir. 1988) ("an inexcusable misstatement of the law").

xv

432

Closing Arguntent

§13.6.3

the conduct of a hypothetical reasonable person, It IS error for the lawyer to invoke "the golden rule" and ask the jurors to put themselves in the client's position." The test is the behavior of a hypothetical reasonable person, not that of the jurors. Similarly, in closing argument during the penalty phase of a prosecution, the prosecutor might misstate the legal effect of an acquittal on the basis of insanity. 4 In a death penalty case, it is error for the prosecutor to tell the jurors that they "must not" show mercy if the substantive law permits them to do SO.5

§13.6.3

Mentioning Additional, Improper Criteria

This section deals with a variation

of the problem mentioned

in

§ 13.6.2. Even if the lawyer does not misstate the decision-making criteria the judge will enumerate for the jury, the lawyer might list additional, improper criteria. The prohibition applies in both civil and criminal cases. In a civil action, the lawyer may not tell the jurors that they should consider the outcomes in comparable cases.' Under the substantive law, the verdict in a similar case is not a legitimate factor for the jury's consideration. In a death penalty case, in summation the prosecutor may discuss the factors mentioned in the trial judge's instructions, including the accused's future dangerousness, general deterrence, and retribution." However, the prosecutor may not urge the jury to consider the economic factor that life imprisonment would cost the public more than the imposition of the death penalty. 3 By mentioning that additional factor, the prosecutor "misrepresent[s] the" nature of the decision the jury has to make."

3United States v. Teslim, 869 F.2d 316, 328 (7th Cir. 1989). See also Hayes v. Lockhart, 852 F.2d 339, 346 (8th Cir. 1988), vacated on other grounds, 491 U.S. 902, 109 S. Ct. 3181,105 L. Ed. 2d 691 (1989); Stanley V. Ellegood, 382 S.W2d 572 (Ky. 1964). "Guidroz v. Lynaugh, 852 F.2d 832, 837 (5th Cir. 1988) (the prosecutor told the jury that an acquittal would "turn loose a man who is very dangerous"). 5Presnell V. Zent, 959 F.2d 1524, 1528 (11th Cir. 1992). §13.6.3 lCivil Trial Manual, supra §13.1 note 1, §81:509. 2Brooks V. Kemp, 762 F.2d 1383 (5th Cir. 1985), cert. denied, 483 U.S. 1010, 106 S. Ct. 3325,92 L. Ed. 2d 732 (1987). 3Id. at 1412. 4Id.

433

§13.6.4

§13.6.4

Closing Argument

Appealing to Sympathy, Passion, and Prejudice

It is sometimes "broadly stated that it is improper to appeal to the passions, prejudice, or sympathy of the jury. ... "1 However, that sweeping statement is misleading. It is generally recognized that the lawyer may at least implicitly appeal to the jurors' sympathy when that sympathy arises from equities demonstrated by the evidence in the record. 2 In the words of one leading commentator, [1]f counsel has the wealth of eloquence to spark the flames of pathos in summation, so long as he reasonably confines himself to the evidence and inferences reasonably deducible therefrom, his argument will not be regardedas improper.'

The appellate courts tend to find error "only at the utmost extremes."? A close reading of the published opinions reveals that the courts treat negative appeals-attempts to trigger emotions working against the opposing side-more severely than appeals for sympathy for the lawyer's client. In analyzing the propriety of negative appeals, the courts reason in roughly the same fashion as they do in evaluating "prejudice" objections under Federal Rule of Evidence 403. That rule authorizes a trial judge to exclude logically relevant evidence when the probative worth of the evidence is substantially outweighed by attendant probative dangers such as prejudice. The accompanying Advisory Committee note explains that the drafters used the term prejudice in a narrow, technical sense. Almost all evidence proffered by a lawyer's opponent is prejudicial in the broad sense that it prejudices or damages the lawyer's client. However, in Federal Rule 403, evidence is prejudicial when, albeit technically relevant, its admission realistically has "an undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one." Precisely because they §13.6.4 lCivil Trial Manual, supra §13.1 note I, §81:511. 2Carlson, Argument to the Jury: Passion, Persuasion and Legal Controls, 33 St. Louis LJ. 787 (1989) (containing excerpts from famous summations, including Andrew Hamilton's closing argument in defense of Peter Zenger and Clarence Darrow's closing argument on behalf of Leopold and Loeb); Underwood, Logic and the Common Law Trial, 18 Am.]. Trial Advoc. 151,158-163 (1994). 3Stein, supra §13.1 note 2, §22, at 58. 4Civil Trial Manual, supra §13.1 note 1, §8l:511.

434

Closing Argwnent

§13.6.4

would be improper bases for a decision against the opposing side, in summation the lawyer may not argue the following factors: • The opposition's financial condition. A plaintiff's lawyer may not characterize the defendant as a rnultimillion-" or billiondollar" company. Unless punitive damages are properly in issue under the pleadings, the defendant's wealth is irrelevant. • The opposition's corporate status. In some jurors' minds, the trial may shape up as a battle between a natural person underdog and a large corporate entity. However, the lawyer representing the natural person may not increase the risk that the jurors will decide the case on that basis by dwelling on that factor. The lawyer may not refer to the opposition as "the big company"? or "this great corporation.i" Stein givesthe following example of an eloquent, but illicit, appeal: "[T]he difference between the plaintiff and the defendant was that the plaintiff had a soul and was responsible before Heaven for the truth of what he said, while the defendant was a corporation without a soul to answer hereafter."? • The fact that the opponent is not a resident of the local community.10 Simply stated, the lawyer may not appeal to the jury's xenophobia by emphasizing that the opponent, II the opponent's lawyer.l?or the opponent's witnesses'> reside elsewhere. There is a saying among forensic experts that you are not considered an 5Draper v. Airco, Inc., 580 F.2d 91,95 (3d Cir. 1978). 6Igo v. Coachman Indus., Inc., 938 F.2d 650, 653 (6th Ci.r. 1991). /Commonwealth Life Ins. Co. v. Hall, 517 S.W2d 488,495 (Ky. 1974). 8Square Deal Cartage Co. v. Smith's Admr., 307 Ky. 135, 210 S.W2d 340 (1948). 9Stein, supra §13.1 note 2, §31. IOvVilliams,supra §13.3.5 note 7, at 145 ("Gentlemen, that may be the law in Philadelphia, but it [is] not the law in Coosawhatchie."). IIPappas v. Middle Earth Condominium Assn., 963 F.2d 534 (2d Cir. 1992) (the defense counsel made derogatory remarks about the plaintiff's home state of New Jersey). 12Cecilv. Gibson, 37 Ill. App. 3d 710, 346 N.E.2d 448 (1976) (a "slick attorney from Chicago"); Taulbee v. Commonwealth, 438 S.W2d 777 (Ky. 1969) ("If you want a Clark County lawyer to come over here to defend a Clark County thief who breaks into and steals from an Estill County place of business, and if you want that you will find this thief here not guilty. "). 13Dunaway v. State, 551 So. 2d 162, 163 (Miss. 1989) (in closing, the Mississippi prosecutor emphasized that while the government expert witnesses were from that state, the defense expert was from Minnesota-a "Santa Claus who needs to go back to the North Pole").

435

§13.6.4

Closing Argtunent

expert unless you are from "somewhere else," but the opposing attorney may not ask the jury to disbelieve the expert's testimony solely on that ground . • The fact that a particular party is insured or uninsured. 14In this case, the court will consider Federal Rule of Evidence 411 in addition to Federal Rule 403. The first sentence of Rule 411 announces the general rule that "[e]vidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully." Suppose that during the trial the defense called a witness who happened to be an investigator employed by the defendant's insurer. Under the second sentence of Rule 411, the plaintiff may impeach the witness for bias by showing the witness's employment status. During closing, the plaintiff's lawyer may treat the witness's employment as evidence of bias to impeach the witness's credibility. However, the plaintiff's lawyer may not encourage the jury to return a plaintiff's verdict because the verdict would ultimately be paid by the insurance company, not the defendant. • Personal attacks on the opposing party, the party's lawyer, or the party's witnesses. The lawyer must avoid "degrading and scurrilous" language." For example, it is improper to describe the opposing party as "money crazy,"16 to state that the opposing witness "earns his living by collaborating with all the plaintiffs' lawyers so he can make money,"!" or to attack the opposing lawyer by telling the jury that " [a] ny money that you award will go to the lawyers; this is a lawyer's case, money, money, money."18 A court is especially likely to find misconduct when the lawyer engages in invective name-calling, using such expres-

14CivilTrial Manual, supra §13.1 note 1, §81:509. 15United States v. Cook, 432 F.2d 1093 (7th Cir. 1970), cert. denied, 401 U.S. 996, 91 S. Ct. 1224, 28 L. Ed. 2d 535 (1971). 16Square Deal Cartage Co. v. Smith's Admr., 307 Ky. 135,210 S.W.2d 340 (1948). 17Smith v. McMillan, 841 S.W.2d 172 (Ky. 1992). 18Corwin v. Dickey, 91 N.C. App. 725,373 S.E.2d 149 (1988). See also United States v. Friedman, 909 F.2d 705, 708 (2d Cir. 1990) ("high fees"); People v. McCracken, 39 Cal. 2d 336, 348, 246 P.2d 913, 920 (1952) ("What some people won't do for a fee."); People v. O'Farrell, 161 Cal. App. 2d 13, 19, 325 P.2d 1002, 1006 (1958) (the prosecutor stated that there is a saying among defense attorneys: "For a reasonable fee, I will give you a reasonable doubt."); Whitaker v. Commonwealth, 98 Ky. 442, 183 S.W.2d 18 (1944) (the size of the fee).

436

Closing Argtunent

§13.6.4

sions as Adolf Hitler, 19 Judas Iscariot," laughing hyena, 2 1 scum;" slime," subhuman.i" or vulture. 25 • Arguments that tend to threaten or coerce the jury into a verdict. These arguments play on the jurors' fear. For example, a prosecutor may not tell the jurors that if they acquit, they, their relatives, or their friends could be the accused's next victim;" or that an acquittal might trigger a riot.27 Nor may the prosecutor ask the jurors to view themselves as soldiers in a war against crime.s'' In civil cases, some courts closely scrutinize "conscience of the community" arguments= to determine the gist of the appeal. The court may disapprove the argument when the real thrust of the appeal is that the jurors' fellow citizens will rebuke them if they return a verdict for the opposition. Thus, a plaintiff's lawyer may not attempt to create the impression that the local community "expect[ ed]" the jury to "return a large verdict ... against" the defendant. 30 19United States v. North, 910 F.2d 843, 895 (D.C. Cir. 1990). 2°United States v. Steinkotter, 633 F.2d 719 (6th Cir. 1980). 21Lovev. Wolf, 226 Cal. App. 2d 378,38 Cal. Rptr. 183 (1964). 22State v. Bennefield, 567 A.2d 863, 867 (Del. Super. Ct. 1989). 23Id. 24United States v. Cook, 432 F.2d 1093 (7th Cir. 1970), cert. denied, 40 I US. 996, 91 S. Ct. 1224,28 L. Ed. 2d 535 (1971). 25East v. Commonwealth, 249 Ky. 46, 60 S.W2d 137 (1933). 26In one case, a prosecutor told the jurors that if they acquitted the accused, the prosecutor would give the accused back his gun and place him in the same elevator as the jurors. Stein, supra § 13.1 note 2, §21 (citing United States v. McRae, 593 F.2d 700 (5th Cir.), cert. denied, 444 US. 862, 100 S. Ct. 128, 62 L. Ed. 2d 83 (1979)). See also Guidroz v. Lynaugh, 852 F.2d 832, 838 (5th Cir. 1988) ("you might as well go ahead and give Mr. Guidroz these knives back and let him go ahead and take them out with him"); Sanborn v. Commonwealth, 754 S.W2d 534,544 (Ky. 1988) ("that's the man you want loose in Henry County riding your roads, walking your streets"). 27United States v. Koon, 34 F.3d 1416, 1445 (9th Cir. 1994) (the court criticized the prosecutor's argument in the federal civil rights prosecution following the state acquittals in the Rodney King beating case; by reminding the jury of the "social ramifications of their verdict," the prosecutor subtly invoked the memory of the Los Angeles riots). 28Newlon v. Armontrout, 885 F.2d 1328, 1338 (8th Cir. 1989), cert. denied sub nom. Delo v. Newlon, 497 US. 1038, 110 S. Ct. 3301, III L. Ed. 2d 810 (1990). See also United States v. Hernandez, 865 F.2d 925 (7th Cir. 1989) (it was "indefensible" for the prosecutor to tell the jurors that their verdict would "send a clear message to Cuban drug dealers and drug dealers in these United States"). 29Westbrook v. General Tire and Rubber Co., 754 F.2d 1223 (5th Cir. 1985) ("You're going to be the conscience of the community with this verdict."). 30Id. at 1238.

437

§13.6.4

Closing Arguxnent

The common denominator of all these cases is that the argument creates a substantial risk that the jury will decide the case on an improper basis." If the lawyer offers evidence posing that risk during trial, the judge may bar the evidence under Federal Rule 403, and by parity of reasoning, the judge may bar argument creating that danger. §13.6.5

Stating Personal Opinions about the Application of the Law

Like opinions about witness credibility and the plausibility of inferences, lawyers' opinions about the ultimate issues in the case are forbidden. The late Chief Justice Warren Burger condemned such opinions. ! Model Rule 3.4(e) is in accord, stating that the lawyer may not opine about "the justness of a cause, the culpability of a civillitigant or the guilt or innocence of an accused "

§13.7

Substantive Restrictions: The Scope of the Rebuttal Argwnent

In most jurisdictions, the party assigned the ultimate burden of proof has the privilege of both opening and closing.' For example, the plaintiff's lawyer delivers one closing argument before the defense summation and then presents a second, rebuttal argument after the defense summation. The lawyer with this privilege is sometimes tempted to "sandbag' and Ninth 16 Circuits agree, although the Court of Appeals for the Eighth Circuit held that attorneys should not be required to answer a question 926 C.F.R. § 1.60501-1 (f). 1°26 C.F.R. §1.6050I-1(e)(2). "Ariz. Op. 87-3 (1987). Accord N.C. Op. 23 (1987) (dealing with required reports relating to real estate transactions under the Tax Reform Act of 1986). 12Butsee Chicago Op. 86-2 (1986) (suggesting that the applicability of the IRS regulations to lawyers is "unclear," and that the "better" practice would be to file the form (but not provide the identity of the client or fee information), assert that the information is privileged, and insist that the government obtain a court order). Cf National Association of Criminal Defense Lawyers Op. 90-1 (1990) (attorney has a duty to advise client of the risks of complying with Form 8300; attorney may incur malpractice liability for failing to disclose risks if government gains an advantage from a Form 8300; client consent is necessary for disclosure); Ala. Op. 87-60 (1987) (suggesting that counsel refuse to report information to the IRS regarding real estate transactions, as required by the Tax Reform Act of 1986, if the client will not consent to disclosure); N.M. Op. 1989-2 (suggesting that conflict between laws may necessitate warnings or withdrawal or both and may justify a "challenge" to the federal law); Ohio Op. 90-4 (1990) (professional protection of client's confidences and DRs 4-10 I and 7-10 I require attorney to gain client consent before revealing identity on Form 8300). For an excellent discussion of the reporting requirements, the possible consequences of noncompliance, and valuable practice tips, see Axelrod and Harris, The Perils of Getting Paid in Cash, Crim. Just. 6 (Winter 1989) (discussing various privilege issues, but noting fact that supremacy clause may preempt conflicting state confidentiality rules and bar opinions). See also Hall, Defensive Defense Lawyering or Defending the Criminal Defense Lawyer from the Client, II U. Ark. Little Rock LJ. 329 (1988-1989). 13935F.2d 501 (2d Cir. 1991). Disclosure is discussed in Capra, Deterring the Formation of the Attorney-Client Relationship: Disclosure of Client Identity, Payment of Fees and Communications by Fiduciaries, 4 Geo.]' Legal Ethics 235 (1990). 14United States v. Ritchie, 15 F.3d 592 (6th Cir. 1994). 15United States v. Sindell, 53 F.3d 874 (8th Cir. 1995). 16United States v. Leventhal, 961 F.2d 939 (9th Cir. 1992).

490

Special Probderns in CriIninal Defense

§14.7.3

on Form 8300 that asks whether the cash payment was a "suspicious transaction."!" A federal court advisory committee's report contains excellent advice: 1. When a client attempts to pay in cash totalling more than $10,000, the attorney should inform the client of the requirements of the reporting law. 2. The attorney should advise the client that she will be required to complete Form 8300, and that a claim that the client's identity is privileged will in all likelihood be rejected. 3. The attorney should inform the client that he cannot give the client any advice on investing, depositing, or spending the money."

In December 1993, the IRS announced that it would begin assessing the penalties against lawyers who "intentionally disregard" the duty to file Form 8300 or who file incomplete forms.'? In our check and credit card society,cash payments are a badge of ill-gotten gains, and it is not unreasonable for the government to require large cash payments to be reported. The cautious lawyer will simply refuse cash for the reasons set out in this section and the next section (fee forfeitures). §14.7.3

The Effect of Forfeiture Provisions on Attorney Fees

The Comprehensive Forfeiture Act of 1984 amended federal racketeering! and drug control? statutes to reach assets acquired from

17Sindell, 53 F3d 874. "United States v. Monnat, 853 F Supp. 1304, 1307 (D. Kan. 1994) (the committee was asked for an advisory opinion in a pending case). . 19IRS News Release No. IR-93-113. This policy is analyzed at 9 ABA/BNA Current Reports 397 (1993). §14. 7.3 'Comprehensive Forfeiture Act of 1984, Pub. L. No. 98-473, §§30 I et seq., 98 Stat. 1976 (1984), codified at 18 U.S.C. §1963 (RICO) and 21 U.S.C. §§848, 853 (CCE). RICO is the acronym for Racketeer Influenced and Corrupt Organization, CCE for Continuing Criminal Enterprise. 221 U.S.C. §848 represents an attempt to get the "kingpins" of drug trafficking. "Managers" who derive a substantial portion of their income from such activity are subject to enhanced penalties.

491

§14.7.3

Special Probderns in CriIl'linal Defense

illegal activity;"to relate the time of forfeiture back to the commission of the illegal act," and to reach assets transferred to third parties except for a "bona fide purchaser for value ... who at the time of purchase was reasonably without cause to believe that the property was subject to forfeiture."? In addition, the Act authorizes a court to freeze a defendant's assets before trial-without a hearing if an indictment has been issued.f These forfeiture provisions are in personam-forfeiture cannot be ordered unless the defendant is convicted-rather than in rem.? In Caplin and Drysdale, Chartered v. United States' and United States v. Monsantor the Supreme Court upheld the application of the Forfeiture Act to attorney fees. Writing for a five-person majority in both cases, justice White held as follows: (1) The Forfeiture Act does not exempt attorney fees;'? (2) trial courts do not have "equitable discretion" to exempt assets from freeze orders on the ground that the assets are necessary to pay an attorney; II and (3) the Act, as construed, does not violate the sixth amendment right to counsel or the fifth amendment right to due process. 12 In dissent,justice Blackmun stressed the importance of the right to counsel of one's choice and the adverse effect of the Court's decision on that right. 13 For the private defense bar, there is no bright side to Caplin and Drysdale. 14justice Blackmun predicted in his dissenting 318 US.C. §1963(a)(3) (1988); 21 US.C. §853(a)(I) (1986). 418 US.C. §1963(c) (1988); 21 US.C. §853(c) (1986). 518 US.C. §1963(c) (1988); 21 US.C. §853(c) (1986); see generally Symposium on Government Intrusion into the Attorney-Client Relationship, 36 Emory LJ. I (1987) (containing articles by G. Robert Blakely, Robert C. Bonner, Morgan Cloud, Kathleen F Brickey, Mark]. Kadish, Ephraim Margolin, and William Genego and an introduction by Thomas Morgan). 618 US.C. §1963(d) (1988); 21 US.C. §853(e) (1986). 7Brickey, Forfeiture of Attorneys' Fees: The Impact of RICO and CCE Forfeitures on the Right to Counsel, 72 Va. L. Rev. 493, 495 (1986) [hereinafter Forfeiture of Attorneys ' Fees]. 8491 US. 617, 109 S. Ct. 2646, 105 L. Ed. 2d 528 (1989). 9491 US. 600, 109 S. Ct. 2657, 105 L. Ed. 2d 512 (1989). IOId.at 611, 109 S. Ct. at 2664, 105 L. Ed. 2d at 524. IIId. at 612-613, 109 S. Ct. at 2665, 105 L. Ed. 2d at 525-526. l2Capiin and Drysdale, 491 US. at 633, 109 S. Ct. at 2656, 105 L. Ed. 2d at 546-547. 13Id.at 646-651,109 S. Ct. at 2673-2675,105 L. Ed. 2d at 553-558. 14Fricker, Dirty Money, 75 A.B.A.]. 60 (Nov. 1989) (containing the laments of a number of private practitioners); Tarlow, Criminal Law Forfeiture: Apocalypse Now or Business as Usual?, 26 Trial 45 (Apr. 1990) (quoting Ephraim Margolin of the National Association of Criminal Defense Lawyers as saying: "It's a dark day for the adversary system of justice in America.").

492

Special Probberns in CriIninal Defense

§14.7.3

opmlOn that the decision gives legislatures the means to effectively remove the private bar from cases in which the money for the fee is likely to be derived from criminal activity. 15 Scholars differ on the desirability of reducing the alleged drug dealer or racketeer to the status of a "modern-day Jean Valjean, [who] must be satisfied with appointed counsel?" However, there is little doubt but that the Forfeiture Act, as construed in Caplin and Drysdale, places the "white powder bar" 17 in the awkward position of depending on the restraint and goodwill of the Justice Department. IS To reassure the defense bar and to forestall congressional action, 19 the Justice Department promulgated guidelines in 1985 to afford a modicum of protection to the right to counsel of choice.t? Issued with the usual caveat that they do not create substantive or procedural rights," the guidelines provide some assurance to lawyers frightened by the prospect of losing five- or six-figure fees." The guidelines (1) require U.S. attorneys to gain prior approval from the assistant attorney general

15491US. at 650-651, 109 S. Ct. at 2675, 105 L. Ed. 2d at 556-558. 16Id.at 630-631, 109 S. Ct. at 2655, 105 L. Ed. 2d at 544-545 (White,].) (quoting from the court of appeals opinion). Two excellent articles are Brickey, Tainted Assets and the Right to Counsel-The Money Laundering Conundrum, 66 Wash. U L.Q 47 (1988) (supporting forfeiture), and Cloud, Government Intrusions into the AttorneyClient Relationship: The Impact of Fee Forfeitures on the Balance of Power in the Adversary System of Justice, 36 Emory LJ. 817 (1987) (criticizing forfeiture). 17S0referred to in Fricker, supra note 14. IBThis theme is nicely developed in Tarlow, supra note 14, at 49 ("Lawyers who are active participants in this symbiotic relationship can take comfort injustice Department promises of restraint. Lawyers who are on friendly terms with their local US. Attorneys need not fear that their fees will be forfeited."). 19Id.at 48. 2<justice Department Guidelines on Forfeiture of Attorney's Fees, reprinted at 38 Crim. L. Rep. (BNA) 3001 (Nov. 13, 1985) [hereinafter Forfeiture Guidelines], §9111.230 states that the policy of the Justice Department is to protect the attorney-client relationship. As late as September 1994, a representative of the Justice Department noted that the guidelines are not secret and invited the defense bar to report violations of the guidelines to the Department. Remarks of Harry Harbin, assistant director of the asset forfeiture section, at ABA Annual Meeting (Aug. 9, 1994), summarized at Asset Forfeiture, Past, Present and Possibly the Twilight Zone, 55 Crim. L. Rep. (BNA) 1523 (Sept. 14,1994). 21Forfeiture Guidelines, supra note 20, §9-111.400. 22In United States v. Badalamenti, 614 F. Supp. 194 (S.D.NY 1985), the government alleged that the fee was "in the vicinity of" $500,000; in Caplin and Drysdale, the lawyers sought a fee of $195,000.

493

§14.7.3

Special Problems in CriIllinal Defense

for the Criminal Division before seeking fee forfeiture.P (2) protect against compelled disclosure of information within the attorney-client and work product privileges.s" and (3) require actual knowledge that the source of the fee is subject to forfeiture at the time it is paid. An ordinary creditor-car dealer, for example-becomes a bona fide purchaser (BFP) under the Act only if he can prove that he was "reasonably without cause to believe" that the money paid for the car was drug money. 25 A criminal defense lawyer, however, is deemed a BFP unless he has actual knowledge of the source of the fee.26 Official action charging the forfeitability of the asset would, of course, provide the attorney with actual knowledge.V but the guidelines discourage "notification letters" because of their potential for selectively harassing the private defense bar.28 The Department may move to forfeit a fee if the circumstances are such that a reasonable person in the attorney's position would know that the monies used to pay the fee are subject to forfeiture. 29 In the case of In re Mqffitt, Zwerling and Kemler P.c.) 30 for example, the court found that it was not reasonable for a law firm to think that $100,000 cash in a cracker box came from legitimate sources. In Caplin and Drysdale and Monsanto, the Court was concerned, of course, with the constitutional rights of the clients, not the ethical concerns of their lawyers. Thus, the claims of potential conflict, voiced by the parties and the ABA in its amicus brief, received only footnote 23Forfeiture Guidelines, supra note 20, §9-111.300. In discussing the guidelines and fee forfeiture, Harry Harbin, assistant director of the Justice Department's asset forfeiture section, reported that, as of August 1994, the Justice Department had approved only 36 requests for fee forfeiture since 1985. Harbin, supra note 20, at 1524. 24Forfeiture Guidelines, supra note 20, §§9-111.610, 9-111.620 (which make it clear that the Justice Department does not regard fee information as privileged). 2521U.S.C. §853(n)(6) (1986). 26Forfeiture Guidelines, supra note 20, §9-111.430. 27Id. §9-111.511. 28Id. §9-111.530. Tarlow, supra note 14, at 48, describes the intimidating effect of such letters: "They have the effect not only of manufacturing notice of forfeitability but of discouraging the attorney from taking the case." 29Remarks of Harry Harbin, assistant director of the Justice Department's asset forfeiture section, supra note 20, at 1524 (giving example of large cash payments by persons accused of large-scale drug conspiracy). 3°846 F. Supp. 463 (E.D. Va. 1994). At the time of the restraining order in Moffiu, only $3,600 of the original $100,000 remained in the firm escrow account. This has produced several opinions on the complicated issue of tracing. In re Moffitt, 875 F. Supp. 1152 (E.D. Va. 1995); In re Moffitt, 864 F. Supp. 527 (E.D. Va. 1994). See generally Gaetke and Welling, supra §14. 7.2 note 2, at Iln, 1182-1186.

494

Special Problems in CriIninal Defense

§14.7.3

treatment in Justice White's opinion.?' The three claims of conflict described in footnote lO are serious, however, and deserve consideration by the private defense bar. First is the incentive for a lawyer not to fully question the client or investigate the case in order to later be in position to deny actual knowledge that the fee was derived from illegal activity. The more a lawyer knows, the more vulnerable he is-not only to the prosecutor, but also to the client, who may decide to cut a deal calling for testimony against the lawyer. Second is the lawyer's incentive to protect the fee from forfeiture at the client's expense. Exempting the fee from forfeiture may be a prosecutorial bargaining chip in a negotiation in which the defense attorney represents conflicting interests-his client's and his own. The third conflict identified in footnote 10 is that the risk of forfeiture turns many criminal cases into contingent fee cases, with the lawyer paid only if the defense is successful. The conflict is created by the lawyer's presumed need for complete victory in order to protect the fee, while the client may be better served by a negotiated plea. While this conflict is not as serious as the first two, the rule against contingent fees in criminal cases is uniformly recognized and is grounded in part on a concern that contingent fees in such cases would result in conflicts. Preventive Ethics Checklist

Investigation D Do not rely too much on what you receive from the prosecution; the information may not be complete. D Investigate leads as fully as possible in light of time and resources. D Investigate, even though the client wants to plead guilty. D Document the reasons for not pursuing leads. Conflicts D Do not represent more than one defendant in a case unless you are certain that joint representation will benefit all clients.

31 Caplin and Drysdale, 491 U.S. 617, 632-633 n.I 0, 109 S. Ct. 2646, 2656 n.l 0, 105 L. Ed. 2d 528, 545-546 n.1O (1989).

495

§14. 7.3

o o

Special Problems in CriIllinal Defense

Do not take a case if a former client is a prosecution witness unless the former representation is unrelated. Be very careful when the fee is paid by a third person.

Incriminating Evidence Do not take possession of physical evidence unless you are certain that you will not be ethically or legally required to give it to the police.

o

Pemoy Advise the client and all witnesses that you cannot present false testimony. o Urge a perjuring client or witness to correct the matter. That failing, move to withdraw. That failing, inform the judge of the perjury in camera. Do not assume that an improbable story is perjured; but do not be naive or willfully blind.

o

o o o

Fees

o o o

496

Do not take cash in payment of large fees. Do not agree to contingent fees. Get paid in advance.

15 Special Problems in Insurance Defense

§ lS.l §IS. 2 §lS.3

§lS.4

§lS.S

§lS.6

§ IS. 7

§15.8

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Identification of the Client §lS.3.l The Two-client Model §lS.3.2 The One-client Model §lS.3.3 Representation of the Insured by House Counsel Coverage Issues Pleading and Parties §lS.S.l Representing Multiple Insureds §lS.S.2 Counterclaims Common Issue Conflicts §lS.6.l The Two-client Model §lS.6.2 The One-client Model Conflicts Arising During Representation-sConfidentiality §lS.7.1 The Two-client Model §lS.7.2 The One-client Model Noncooperation and Collusion

497

§15.1

Special Problems in Insurance Defense

§15.9 Discovery §15.10 Settlement and Excess Liability §15.11 Accountability §15.11.1 Malpractice §15.11.2 Unfair Claims Settlement Practices

§15.1

Introduction *

This chapter addresses some of the problems of ethics and accountability peculiar to the practice of the insurance defense lawyer. The discussion focuses on the defense of third party claims, although there is some reference to first party claims in §15.11.2, dealing with unfair claims settlement practices. Almost 50 years ago, Robert Keeton observed that an attorney retained by an insurance company to defend a claim against its insured faces a welter of seemingly irreconcilable conflicts of interest.' Noting that defense lawyers did not take account of such conflicts under the then prevailing practice.? Keeton prophesied an increase in the number of legal malpractice suits instituted by insureds and insurers against defense counsel. His prophecy has come to pass. Today questions of ethics and accountability still haunt the insurance defense lawyer, largely as a result of the persistent notion that defense counsel must satisfy the expectations of both the insured and the insurer. The essence of the perceived dilemma was captured in the following opinion:

'Some of the observations contained in this chapter first appeared in Underwood, The Doctor and His Lawyer: Conflicts of Interest, 30 Kan. L. Rev. 385 (1982). Other excellent articles include Morris, Conflicts of Interest in Defending under Liability Insurance Policies: A Proposed Solution, 1981 Utah L. Rev. 457; Holmes, Third Party Insurance Excess Liability and Its Avoidance, 34 Ark. L. Rev. 525 (1981); and Holmes, Conflicts-of-Interest Roadmap for Insurance Defense Counsel: Walking an Ethical Tightrope without a Net, 26 Willamette L. Rev. 1 (1989). 'Keeton, Liability Insurance and Responsibility for Settlement, 67 Harv. L. Rev. 1136,1168 (1954). See also Syverud, The Duty to Settle, 76 Va. L. Rev. 1113 (1990). 2Keeton, supra note 1, at 1171.

498

Special Probderns in Insurance

Defense

§15.1

[TJ he relationship between the liability insurer and the insured rests upon a hardboiled commercial transaction. The purchaser has a powerful need for protection against the potentially devastating effects of a large judgment against him or her. The seller is prepared to provide that protection for a price, but understandably, only on several conditions including the right to choose the defense lawyer, and the right to control and supervise the defense. There is an inescapable tension for a lawyer, subject to ethical demands far more stringent than those of the insurance market place, who must befaithfol to the interests cf the insurer-client in control of the defense, and must also "represent the insured as his client with undivided fidelity."3 The "inescapable tension" has been heightened in recent years by judicial expansion of the tort of "insurer's bad faith"! and "unfair practices" legislation.' The insurer's duties to the insured have evolved into a "checklist of required actions, breach of anyone of which may result in the insurer's extracontractualliability [rather] than ... a workable guide to foreseeability of such damages in a given case.:" In addition, some cases have rejected the notion that defense lawyers are independent contractors; these courts treat the counsel as the insurer's agent and hold the insurer liable to the insured for the negligence of counsel. 7 Furthermore, plaintiffs' lawyers have learned to identify and engineer conflicts between the insured and the insurer, which can be exploited to obtain settlement leverage or an additional deep pocket, the unwary defense counsel. 8

3Moritz v. Medical Protective Co., 428 F. Supp. 865, 872 (WD. Wis. 1977) (emphasis supplied). "See, e.g., 1 R. Long, The Law of Liability Insurance §5.34 (1981). 5See, e.g., Cal. Ins. Code §§790.01-.1O (1990). The California Unfair Practices Act was patterned after the National Association of Insurance Commissioners Model Act of 1971. Over 30 states have adopted similar legislation. Best, Statutes and Regulations Controlling Life and Health Insurance Claims Practices, 29 Def LJ. 115, 152 (1980). See discussion at §15.11.2. 6Rumberger, Kirk, and Wall,Justice Holmes and the Trial Lawyer: Malicious Prosecution, Bad Faith and ... Excellence, 16 Forum 627, 632 (1981). 7See, e.g., Continental Ins. Co. v. Baylers and Roberts, Inc., 608 P2d 281 (Alaska 1980); Peterson v. Farmers Casualty Co., 226 N.W.2d 226 (Iowa 1975). BSee §15.10 ("excess liability" conflicts).

499

§15.2


§15.2


Much of the confusion regarding defense counsel's obligations can be traced back to the Code of Professional Responsibility's failure to adequately address the issue. As one court noted in frustration, "[T] he canons and disciplinary rules do not address themselves frankly and explicitly to this special set of relationships, and there is awkwardness in attempts to apply the canons and rules." 1 Ethical Consideration 5-17 refers to a lawyer "representing" the insured and insurer as an example of potentially conflicting responsibilities. While EC 5-17 is not a black letter rule, it is consistent with the "two-client model"-that the attorney represents both the insured and the insurer. This model is consistent with the expectations of the insurance industry and has received the blessing of many, perhaps a majority, of courts." Unfortunately, this model promotes conflicts of interest, at least in the context of liability insurance. If both the insured and the insurer are clients, defense counsel must somehow act on behalf of each "client" and protect the confidences of each "client." It is easy to see that the attorney may learn something about the insured that would allow the insurer to claim that the insured is not covered by the policy. The duty to the insured would then conflict with the duty to the insurer. Notwithstanding the shortcomings of the Code, the Model Rules steer clear of any explicit attempt to solve the problem or to provide an alternative analytical framework. However, on a close reading, Model Rules 1.7 and 1.S(f) can be construed as supporting the "one-client model"-that the insured alone is the client and the insurer is a nonclient benefactor. Specifically,Model Rule 1.7 (Conflict of Interest) is divided into two paragraphs. According to Official Comment [6], paragraph (a) prohibits the representation of opposing parties in litigation. The second paragraph provides:

§15.2 'Moritz v. Medical Protective Co., 428 F. Supp. 865,872 (WD. "Vis. 1977). "See §15.3.1.

500

Special Probferns in Insurance Defense

§15.2

(b) A lawyer shall not represent a client if the representation of the client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own personal interest, unless: (I) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation. [Emphasis supplied.]

According to Comment [6], "another client" in paragraph (b) ordinarily refers to other parties to a lawsuit, such as coplaintiffs or codefendants. The insured's liability insurer is not ordinarily a named party, let alone an opposing party or coparty. Therefore, it seems more appropriate to view the insurer as a "third person," rather than another client. This view is bolstered by Comment [9], which refers to the conflicting interests of the insurer and insured under the heading "Interest of Persons Paying for a Lawyer's Service." Under this analysis of the rule, paragraph (b) relegates the insurer to the status of an interested nonclient, whose expectations must be subordinated to the representation of the insured. That analysis is supported by Comment [9]'s reference to Rule 1.8(f) (an analog to DR 5l07(B)). In addition, the insurer's subordinate status can arguably be gleaned from the "consultation and consent" provisions of Model Rule 1.7(a)(2)and (b)(2). Model Rule 1.7(b)(2) contemplates consultation only with "the client" and not the "third person."> If the defense lawyer is not independent of the insurer, then the lawyer may not represent the insured" unless she reasonably believes the insured will not be adversely affected and the insured consents after consultation. Furthermore, the insurer's subordinate status can be derived from Model Rules 1.6 and 1.8(f). For example, assume the insurer demands

3Model Rule 1.7(a)(2) requires that "each client consent after consultation." On the other hand, Charles Wolfram suggests that the comments to Model Rule 1.7 apply only to special counsel, if and when one is appointed. C. Wolfram, Modern Legal Ethics 429 (1986). Of course, the need for special counsel in so many situations tends to prove the point. 4Cf N.C. Op. 326 (1982) (full-time salaried employee of insurance company may not represent the insured). See also Kentucky Op. 11-36 (1981), which reaches the same conclusion under an unauthorized practice rationale. It is worth noting that this opinion provides a classic instance of confusion over the identity of the client. "[T]heclient in this pending law suit of the lawyer is the insured. Clearly the representation is one in which the attorney has dual representation.... In conclusion the insured is the primary client." (Emphasis supplied.)

501

§15.2


information in support of policy defenses that would conflict with the insured's best interests. In this regard, Model Rule 1.6 abandons the "constricted definition" of confidential information in the Code." Model Rule 1.6 appears to prohibit defense counsel from furnishing the insurer with any "information relating to the representation of the client [insured]," absent the insured's consent after consultation. While the rule contains an exception for "implied authorizations" for disclosures necessary in order to carry out the representation, the comments dealing with this exception do not support the notion that the concept of "implied authorizations" carves out any special rule for the benefit of insurers. Indeed, Comment [9] to Model Rule 1.7 and Model Rule 1.8(f) suggest the contrary. The latter rule provides: A lawyer shall not accept compensation for representing a client from one other than the client unless: (l) the client consents after consultation; (2) there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and (3) information relating to representation of a client is protected as required by Rule 1.6.

In sum, the thrust of the Model Rules is to treat the insurer as a third party benefactor. In the Model Rules framework, third party benefactors are not permitted to control the litigation.

§15.3

Identification of the Client

§15.3.1

The Two-client Model

When called on to review the conduct of insurance defense counsel, older decisions adopted a two-client model. I The preference for this SABA, Legal Background to the ABA Model Rules of Professional Conduct 64 (Tentative Draft 1983) (criticizing Moritz v. Medical Protective Co., 428 F Supp. 865 (WD. Wis. 1977)). Accord Restatement of the Law Governing Lawyers §112 (Tentative Draft No.3, 1990). §15.3.1 'Morris, Conflicts of Interest in Defending under Liability Insurance Policies: A Proposed Solution, 1981 Utah L. Rev. 457,461. See also Underwood, The Doctor and His Lawyer: Conflicts of Interest, 30 Kan. L. Rev. 385 (1982).

502

Special Prob'lerns in Insurance Defense

§15.3.1

analytical framework arose in part from the language of the Code. The preference also rested on judicial precedent interpreting the defense clause of the liability policy to give insurers the right not only to select defense counsel and make settlements, but also to control and supervise the defense.? According to the cases employing the two-client model, the insured is the lawyer's client, even though the insured does not pay defense counsel. 3 Defense of the insured is the reason for the lawyer's retainer, and the lawyer's obligations to the insured result from an attorney-client relationship. The lawyer's duty to the insured is neither derived from or negated by the express terms of the policy nor subject to limitations inherent in a subjective definition of bad faith. Liability to the client will be imposed on the attorney for professional negligence in the conduct of the defense and not on the basis of the covenant of good faith and fair dealing read into the contract of insurance. 4 To complicate matters, the two-client model also views the liability insurer as a client, despite the fact that the insurer rarely is a formal party to the litigation. This view rests in part on the assumption that the insurer must have control of the defense and will necessarily be bound by determinations of fact in the tort litigation. Unfortunately, the cases adopting the "insurer as a client" view have led some insurers to believe that they may demand advice on matters that are not directly related to the defense of the plaintiff's claim. In practice, insurer "clients" demand that defense counsel not only defend against the plaintiff's claims, but also minimize the risks of bad faith claims by the insured" and pass on information relating to policy defenses, whether or not this is consistent with counsel's obligations to the insured. If counsel is not

2See §15.1. See also Morris, supra note I, at 465 n.25 (collecting cases). 3Moritz v. Medical Protective Co., 428 F Supp. 865,872 (W.D. Wis. 1977); American Mut. Liab. Ins. Co. v. Superior Ct., 38 Cal. App. 3d 579, 592, 113 Cal. Rptr. 561, 572 (1974); Lieberman v. Employers Ins. of Wausau, 84 NJ. 325,419 A.2d 417 (1980). 4Lysick v. Walcom, 258 Cal. App. 2d 136, 65 Cal. Rptr. 406 (1968); Torres v. Nelson, I ABA/BNA Law. Man. Prof Con. 152 (Fla. App. 1984) (jury verdict for insurer on bad faith claim does not preclude suit against defense counsel for negligence). See also cases cited at §15.1, note 7, which hold the insurer liable for the negligence of defense counsel. 5See Smiley v. Manchester Ins. and Indem. Co., 49 Ill. App. 3d 675, 364 N.E.2d 683, 685-687 (1977), off'd, 71 Ill. 2d 306, 375 N.E.2d 118 (1978); Keeton, supra §15.1 note I, at 1173.

503

§15.3.1

Special Probderns in Insurance Defense

responsive to the demands of the insurer "client," counsel will not be hired by the insurer in the future. The two-client model provided the linchpin for the now rescinded Guiding Principles of the National Conference of Lawyers and Liability Insurers." The Guiding Principles were quickly embraced by defense counsel,' largely because they provided concrete illustrations of recurring conflicts as well as detailed guidance on the timing and scope of disclosures to the "clients." Some courts adopted them, or at least cited them as secondary authority, in examining claims of defense malpractice or insurer's "bad faith.:" Indeed, they continue to serve as a comprehensive checklist of potential conflicts.? although the solutions they offer no longer provide a safe harbor. The two-client model, and court opinions and guidelines based on that model, assume that counsel can identify potential conflicts before they ripen into serious problems and can then handle the conflict as in any case of coparties, that is, by consent, appointment of independent counsel,'? or withdrawal. This assumption is unrealistic. First, many of the most perplexing conflicts that plague insurance defense counsel will not be apparent from an initial examination of the file, but will become apparent only later as the litigation unfolds. Second, the disclosure of information relating to a conflict, or withdrawal in the face of a conflict, will frequently work irreparable harm on the 620 Fed. Ins. Couns. Q 95 (Summer 1970). The Guiding Principles were formally approved by the ABA on February 7, 1972, following their acceptance by each of the major casualty and liability insurance companies in the United States, and were published in 7 Martindale-Hubbel Law Directory 76 M (1978) and the Am. Jur. 2d Desk Book, Doc. No. 91.4 (Supp. 1978). They were rescinded by a voice vote in the House of Delegates in August 1980, at a time when other "Statements of Principles" were under attack by the Justice Department and were also rescinded. There is no evidence in the record that the decision to rescind was based on the substance of the Guiding Principles. See Summary of the Action of the House of Delegates, ABA Annual Meeting (Aug. 5-6, 1980); Summary of the Action of the House of Delegates, ABA Midyear Meeting (Feb. 4-5, 1980). Strangely enough, they continue to be cited without mention of this action. See discussion at Underwood, supra note I, at 389-390. 7See, e.g., Stein, Dilemmas for Insurance Counsel-Coping with Conflicts of Interest, 65 Mass. L. Rev. 127, 129 (1980). 8Rogers v. Robson, Masters, Ryan, Brummond and Belorn, 74 Ill. App. 3d 467,392 N.E.2d 1365, 1371 (1979); Employers Casualty Co. v.Tilley, 496 S.W2d 552 (Tex. 1973); YMCA v. Commercial Standards Ins. Co., 552 S.W2d 497,503 (Tex. Civ. App. 1977). "Underwood, supra note 1, at 390. 'DThis is a misleading term and really means a lawyer of the insured's choice, as opposed to a lawyer selected by the insurer.

504

Special Problems in Insurance

Defense

§15.3.2

insured. Finally, the courts purporting to employ a two-client model have a disconcerting tendency to manipulate the model by opining that counsel's obligations to the insured are "primary"-that one client's interests are superior to those of the other client. II To paraphrase George Orwell, some clients are more equal than others. This post hoc rationalization is in effect a repudiation of the two-client model and is hardly desirable in a legal environment in which the attorney is viewed as a target defendant. 12 §15.3.2

The One-client Model

The two-client model assumes that the insurer has a right to control and supervise the defense. In contrast, the one-client model emphasizes the insured's rights. Its most convincing advocate, ProfessorJohn Morris, attacks the basic underlying premise of the two-client model by reexamining the language of the standard liability policy. He reasons that "the insured's reasonable expectations of coverage require that [insurerselected defense] attorneys conduct themselves in the same manner as if the insureds were paying the fees.I Morris reads the insurer's contractual "right and duty to defend any suit"? as a right to select and an obligation to pay counsel to defend the insured, but not a right to control the

liSee, e.g., American Mut. Liab. Ins. Co. v. Superior Ct., 38 Cal. App. 3d 579, 592, 113 Cal. Rptr. 561,512 (1974); Lieberman v. Employers Ins. of Wausau, 84 NJ. 325,419 A.2d 417 424 (1980). cr. Ford, The Insurance Contract: The Conflicts of Interest It Breeds, 36 Ins. Couns.]. 610, 620 (1969): [The attorney] must never lose sight of the fact that he is working for two different and distinct parties-the insured and the insurer ... [but] must never forget that his primary obligation is to [the insured]. 120'Malley, Ethics Principles for the Insured, the Insurer, and Defense Counsel: The Eternal Triangle Reformed, 66 Tul. L. Rev. 511, 512 (1991) ("The dual-client doctrine is a confusing and increasingly useless anachronism. It is unsound as a matter of policy, law and legal ethics."). §15.3.2 'Morris, supra §15.3.1 note I, at 464. This proposition has ample support in the case law. See, e.g., Lysick v. Walcom, 258 Cal. App. 2d 136,65 Cal. Rptr. 406, 413 (1968). 2See Defense Research Institute, Inc., Annotated Comprehensive General Liability Insurance Policy 66, 103 (1979).

505

§15.3.2

Special Problems in Insnrance Defense

defense." Moreover, Morris points out that the insured's reciprocal contractual obligations to the insurer (notice, cooperation, and so on) are only promises running from the insured to the insurer. Such promises should not be viewed as creating any ethical obligations running from defense counsel to the insurer. As Morris puts it: The cooperation clause makes the insureds obligors of the insurers. It does not make insurers clients of defense attorneys, nor does it implicitly or explicitly give insurers the right to make defense-related decisions against the insureds' wishes." This analysis of the insurance contract may be at odds with insurers' expectations and the "ethics of the marketplace" and challenges the assumptions of many reported cases.' Significantly, it furnishes clean, coherent solutions to many of the conflicts that are identified in this chapter. Moreover, this analytical framework is entirely consistent with the Code and the Model Rules."

§15.3.3

Representation of the Insured by House Counsel

While it should be apparent that representation of the insurer's house counsel heightens the likelihood of states, perhaps a majority of those that have considered the practice.' An old ABA formal opinion authorizes

the insured by conflict, many the issue, allow house counsel

3Morris, supra §15.3.1 note I, at 464. Morris points out that the insurer's right to select counsel is not inconsistent with the best interests of the insured. The insurer is in a better position to select a competent specialist, which is ultimately in the insured's interest. Id. at 466. -ra at 465. 50ne must also ask whether the negligence of defense counsel may be attributed to the insurer, given the implications of the one-client model. C£ Peterson v. Farmers Casualty Co., 226 N.W.2d 226 (Iowa 1975). 6See §15.2. §15.3.3 'R. Mallen and]. Smith, Legal Malpractice §23.7 (3d ed. 1989) (collecting authorities); Holmes, Conflicts-of-Interest Roadmap for Insurance Defense Counsel:Walking an Ethical Tightrope without a Net, 26 Willamette L. Rev. I, 101 (1989).

506


Defense

§15.3.3

representation." Later decisions," following the two-client model, minimize the potential for conflict with such statements as this: Employed lawyers are bound by the same rules of professional conduct as independent practitioners. If a conflict appears, the lawyer, employed or retained, must immediately resolve it by terminating representation of one or both parties."

This view naively assumes that a salaried employee of the insurer will protect the insured in the event of conflict-that, for example, the salaried attorney will not pass on confidential communications by the insured that provide a coverage defense. The reality-and certainly the public perception-is that the lawyer will favor the client that provides an office, health benefits, and a check at the end of the month. The potential for conflict is sufficient to justify a per se rule of disapproval. 5 There is another problem with the representation of the insured by house counsel. In many states, corporations cannot practice law" It is difficult to rationalize representation of the insured by house counsel as anything but the practice of law by the insurance company. While some states have forbidden house counsel representation on this ground, 7 others have fashioned an insurer exception." The argument for an 2ABA Formal Op. 282 (1950). See also ABA Informal Ops. 1402 (1977) and 1370 (1976). 3In re Rules Governing Conduct of Attorneys in Florida, 220 So. 2d 6 (Fla. 1969); In re Allstate Ins. Co., 722 S.W2d 947 (Mo. 1987); cf In re Petition of Youngblood, 895 S.W.2d 322 (Tenn. 1995) (assumption that in-house counsel will be independent of employer). 4In re Allstate Ins. Co., 722 S.W.2d at 953. 5Mourad v. Automobile Club Ins. Assn., 186 Mich. App. 715, 465 N.W2d 395 (1991) (upheld a substantial jury verdict in favor of in-house counsel who was constructively and wrongfully discharged when he refused to follow "unethical and unlawful orders" of his superiors that would have adversely affected his company's insureds); Gardner v. North Carolina State Bar, 316 N.C. 285, 341 S.E.2d 517 (1986) (unauthorized practice and conflicts analysis). See also O'Malley, supra §15.3.1 note 12, at 511 ("practice of insurance company staff lawyers acting as defense counsel ... highly questionable"); Pitulla, Three Way Street, 81 A.BA]. 102 (Aug. 1995). 6Wolfram, supra §15.2 note 3, at 840. 7Gardner v. North Carolina State Bar, 316 N.C. 285, 341 S.E.2d 517 (1986); Ky. Bar Assn. Unauthorized Practice Op. U-36 (1981). 8Kittay v. Allstate Ins. Co., 78 Ill. App. 3d 335, 397 N.E.2d 200 (1979); In re Allstate Ins. Co., 722 S.W2d 947 (Mo. 1987).

507

§15.3.3

Special Proble:ms in Insurance Defense

insurer exception is that the insurer must defend the insured and it does not matter whether the obligation to defend is discharged through independent contractors or salaried employees.?

§15.4

Coverage Issues

Assume that a claim is filed against an insured that alleges that the insured injured the plaintiff by "wantonly and maliciously" striking plaintiff's car with his car. Suppose further that the liability insurance policy in question insures against liability for negligent conduct, but excludes liability for intentional acts. The policy is silent as to liability for "wanton" or "malicious" conduct. The insurer (Insurer) retains attorney (Attorney) to represent the insured (Insured). Attorney reviews the accident report and the complaint and recognizes that there is a coverage question. Insured was intoxicated, and he told the investigating officer that he saw plaintiff's car, but did not try to stop. At issue is Insured's mental state at the time and whether that mental state is akin to a negligent state of mind or more like an intentional state of mind. Assume that Insurer makes several demands on Attorney: Prepare a reservation of rights letter to be sent to Insured, research the issue of coverage, and advise Insurer as to the availability of declaratory relief. Under the "prevailing ethic," if coverage problems are apparent from Attorney's examination of the claims file, Insurer will expect Attorney to draw Insurer's attention to them. However, notifying Insurer of a coverage defense would offend the proponents of the one-client model. Leaving this problem aside for the time being, Insurer's other requests must be considered. Despite the fact that insurers occasionally make such additional demands on "their" defense counsel similar to those suggested in the hypothetical, such demands are inappropriate under either model. Even cases purporting to grant client status to the insurer hold that defense counsel should not become actively involved in developing coverage defenses and should concentrate instead on the merits of the insured's defense. Accordingly, Attorney should not prepare the reservation of rights letter or ask Insured to stipulate to a conditional defense. Such activities not only are adverse 9

508

In re Allstate Ins. Co., 722 S.W.2d at 950.


Defense

§15.4

to Insured's interest, but also would undermine the validity of any stipulation by Insured. Similarly, Attorney should not research or advise Insurer on the merits of coverage disputes' or participate in simultaneous or subsequent litigation of such issues." These acts would be tantamount to advancing a position on behalf of Insurer that Attorney would be bound to oppose on behalf of Insured. Based on the discussion so far, one would be tempted to conclude that it makes little difference which of the two models is applied. However, cases applying the two-client model do not address the question of what services or advice defense counsel may provide to the insured when conflicts are apparent from an initial examination of the file. Given the absence of judicial precedent on this point, it is not surprising that counsel have tended to take a conservative approach in dealing with the insured, which ultimately benefits the insurer. Because the Code and the Guiding Principles are based on a twoclient model, they presume that disclosure of the nature and extent of potential conflicts to both the insured and the insurer (but no other services or advice) is proper. This presumption requires defense counsel to limit her representation of the insured." Under this approach, counsel must point out conflictsto the insured, but then disclaim responsibility to represent the insured on matters adverse to the insurer." The Guiding §15.4 'See, e.g., Automobile Underwriters Ins. Co. v. Long, 63 S.W.2d 356, 359 (Tex. Civ. App. 1933). 2Employers Casualty Co. v. Tilley, 496 S.W.2d 552 (Tex. 1973). "ABAInformal Ops. 1476 (1981), 949 (1966), and 728 (1963). See also NJ. Op. 502 (1982) (attorney may not answer for the insured to maintain the status quo and contemporaneously commence a declaratory judgment proceeding on behalf of the insurer); N.M. Op. 1985-1 (lawyer may not withdraw from representation of insured and seek a declaratory judgment on behalf of the insurer). "This approach appears to be in conflict with Model Rule 1.2(c), which provides that "[a] lawyer may limit the objectives of representation [only] if the client consents after consultation." While Comment [4] states that a lawyer retained by an insurer to represent an insured may limit the representation to matters relating to the "insurance coverage," such language may mean no more than that the lawyer may disclaim responsibility for services to the insured (or insurer) that do not involve the defense of the insured. See, e.g., §15.5.2 (generally no duty to file counterclaim). Questions abound: Could the insured be required to agree in the contract that the insurer be allowed to have information on coverage issues? Can Model Rule I. 2(c) override Model Rule 1.1, which presumably incorporates Model Rule 1.6? Would such a contractual limitation offend public policy? If not, and the contract were valid, will an attorney be free to accept employment pursuant to the contract?

509

§15.4


Principles certainly adopt this compromise position, justifying it on the convenient fiction that the insured may obtain further advice and service from independent counsel at the insured's expense> or consent to limited representation by insurer-appointed counsel. The tactical advantages accruing to the insurer as a result of this compromise solution are illuminated in the sections that follow.

§15.5

Pleading and Parties

§I5.5.I

Representing Multiple Insureds

To avoid malpractice claims, counsel must recommend employment of separate counsel whenever there is a potential conflict between the insureds. The Guiding Principles suggest the following prophylactic rule: VII.

SUIT INVOLVING MORE THAN ONE INSURED IN THE SAME COMPANY

If the same company insures two or more parties to a lawsuit, whose interests are diverse, the complete factual investigation made by the company should be made available to each insured or his attorney with the exception that any statement given by one insured or his employees shall not voluntarily be given to any other party to the litigation whose interest may be adverse to such insured or to any attorney representing such other party. The company should employ separate attorneys not associated with one another to defend each insured against whom any suit is brought, if the interest of one such insured is diverse from or in conflict with that of any other insured; and all insureds should be informed by the company of the fact that it insures the liability of the others and the method being employed to handle the litigation.

5For example, insurers insist that counsel may not advise the insured on the merits of coverage issues or write a "bad faith letter" on behalf of the insured. Bianches, Coverage Disputes with the Insured: The Insurer's Perspective, 48 Ins. Couns. J. 153, 154 (1981).

510


§15.5.2

Under this standard, if the codefendant insureds have differing interests that have not yet ripened into actual conflicts, the insurer should select and pay for separate counsel for each. 1 The wisest course of action is always to retain separate counsel for each insured. Unlike a case in which codefendants elect to be jointly represented, coinsureds rely on the insurer to protect their interests. If problems develop, the insureds probably will say the insurer did not adequately advise them of the dangers of joint representation. Representation of coinsureds presents other problems. For example, an attorney's review of the file might suggest a potential cross-claim 2 or the necessity of contending on behalf of one insured that the other was solely responsible for the plaintiff's injury. Moreover, before the initial interview the attorney should assume that one client's testimony may weaken or disparage the other's position, or that one client may confide information that should be kept from the other," The attorney has an obligation to make sure that the insureds are aware that the attorneyclient privilege does not apply to confidential communications in the event of litigation between them." Given the perils of joint representation in this context, the most prudent course of action is to reject such employment. §15.5.2

Counterclaims

Assume that Insured-driver was injured in the collision with Plaintiff-driver. What responsibility does Attorney, retained by Insurer to

§15.5.1 'Carriers often insure medical partnerships. 2 R. Long, Law of Liability Insurance §12.20 (1981). InJoseph v. Markovitz, 27 Ariz. App. 122,551 P.2d 571 (1976), a partner who had suffered a judgment in excess of his malpractice coverage filed a third party claim against his partner, asserting that the partnership agreement provided for indemnity for 20 percent of the amount of the excess. The partner's common insurer was required to pay the costs of defending the third party action by separate counsel. The need for separate counsel for multiple clients is also discussed in Connecticut Op. 84-2 (1984) (employer and employee). 2See generally Hutcheson, Recurring Conflict Problems Facing Insurance Defense Lawyers, in Conflicts of Interest in Insurance Practice 39, 40 (DR! Monograph No.5, 1971). 3Aetna Casualty and Surety Co. v. United States, 570 F.2d 1197 (4th Cir.), cert. denied, 439 U.S. 821 (1978); Kerry Coal Co. v. UMW, 470 F Supp. 1032 (WD. Pa. 1979). +C. Mueller and R. Kirkpatrick, Evidence 385 (1995).

511

§15.5.2


represent Insured on Plaintiff's claim, have to file a counterclaim against Plaintiff for Insured's injuries? The Guiding Principles provide: VIII.

COUNTERCLAIMS

In any suit where the company or the attorney selected by the company to defend the suit becomes aware that the insured may have a claim for damages against another party to the lawsuit, which is likely to be prejudiced or barred unless it is asserted as a counterclaim in the pending action, the insured should be advised that the pending suit may affect or impair such claim; that the insurance company does not provide coverage for any legal services or advice as to such claim; and that the insured may wish to consult an attorney of his choice with respect to it. I The thrust of the Guiding Principles is that the objective of the representation is limited by the insurer's contractual obligation." Under the two-client model, the attorney must tell the insured that (l)the attorney represents the insured only in defense of plaintiff's claim and (2)the compulsory counterclaim rule" requires the insured's claim for injuries to be asserted in the present litigation. The attorney must then advise the plaintiff to seek separate counsel. If asked, the attorney may accept the insured as a "private" client for purposes of filing the counterclaim. The insurer is entitled to know of such an arrangement, and, thereafter, the fee should be equitably apportioned between insured and insurer. Does the insurer have a right to veto such an arrangement? In the two-client model, the answer presumably is "yes" because the arrangement may arguably dilute the attorney's responsibility to protect the insurer's interest. In the one-client model, however, any restrictions on the filing of a counterclaim would "materially limit" full representation of the insured client." Even in the one-client model, an insured is not entitled to a "free" attorney to prosecute the insured's claim for injuries. Nor is the attorney entitled to recover twice for the same work.

§15.5.2 ID.C.Op. 173 (1986) (defense counsel paid by insurance company must either file insured's compulsory counterclaim, if insured is willing to pay for the service, or withdraw from representation). 2Model Rule 1.2(c). 3E.g., Fed. R. Civ. P. 13. 4Cf Conn. Op, 87-13 (1988) (Connecticut, which follows the one-client model, opines that an attorney selected by the insurer cannot abide by the insurer's instructions not to represent the insured in a related alternative dispute resolution proceeding).

512

Special Probfems in Insurance Defense

§15.6

§15.6.1

Conunon Issue Conflicts

So-called common issue conflictsI arise when the litigation relating to the issue of liability overlaps that relating to the issue of coverage. Such conflicts may be apparent from the outset of litigation because the plaintiff's characterization of the defendant's conduct is ambiguous, or because the defendant's conduct is alleged to have been negligent in one count, but intentional in an alternative count.? The example in §15.4 is illustrative." In addition, such issues may become apparent later through discovery. The conventional wisdom is that the determination of such issues in the underlying litigation will be binding on the insurer in subsequent litigation relating to coverage.' If the insurer is viewed as having a right to control the defense and is entitled to demand the loyalty of defense counsel, there is a substantial risk that pressure will be brought on counsel to shape the record in a way that supports the insurer's noncoverage posture. In any event, the assumption that defense counsel represents both the insured and the insurer again leads to a seemingly irreconcilable conflict. §15.6.1


The Guiding Principles are a rough restatement of the case law adopting the two-client model and addressing such common issue conflicts. Guiding Principle V provides:

§15.6 'The terminology comes from Morris, supra §15.3.1 note 1, at 484. 2Depending on the pleadings, the insurer mayor may not have a duty to defend. Discussion of the tests employed in determining whether there is a duty to defend is beyond the scope of this chapter. For a general discussion, see R. Keeton and A. Widiss, Insurance Law §9 (1988); R.Jerry, Understanding Insurance Law §lll (1987). 3In that example, the insured's state of mind (negligent, "wanton," or intentional) would be relevant both to coverage and to liability, particularly if punitive damages were sought. Other common issue conflicts include the scope of an employee's employment, whether defendant had permission to use a vehicle (this arises frequently, given the omnipresence of omnibus and drive-other-cars clauses in the family automobile policy), and whether the insured was using a vehicle "for a fee" or as a common carrier. For a catalog of conflicts, see Keeton and Widiss, supra note 2, at 812-821 ;Jerry, supra note 2, at 613624. jerry, supra note 2, at 617-618.

513

§15.6.1

V.


CONTINUATION BY ATTORNEY EVEN THOUGH THERE IS A CONFUCT OF INTEREST

JiVherethere is a question qf coverage or other conflict of interest, the company and the attorney selected by the company to defend the claim or suit should not thereafter continue to defend the insured in the matter in question unless, after a full explanation of the coverage question, the insured acquiesces in the continuation of such defense. If the insured acquiesces in the continuation of the defense in the pending matter following a reservation of rights by the company or under an agreement that the rights of the company and the insured as to the coverage question are not waived or prejudiced, the company retains the exclusive rights to control and conduct the defense of the case in good'faith, subject to the right qf the insured or the additional attorney acting at the expense of the insured to participate. If the insured nfuses to permit the insurance company and the attorney selected by the company to defend the claim or suit to continue the defense of the pending matter while reserving the rights of the company and of the insured as to the coverage question, or if thefidl protection of the separate interests of the insured and the company requires inconsistent contentions which cannot be presented in a common defense of the pending matter, the insurance company or the insured should seek other procedures to resolve the coverage question. If facts or information indicating to the attorney a lack of coverage for the insured should first come to the attention of the attorney after the trial of the lawsuit has begun, the attorney should at the earliest opportunity inform and advise the insured and the company of the possible conflicting interests of the insured and the company. The attorney should further seek to provide both the insured and the company with time and the opportunity to consider the possible conflict of interests and take appropriate steps to protect their individual interests. [Emphasis supplied.] Despite its air of neutrality, this model once again favors the insurer over the insured. It will rarely be "obvious that [defense counsel will be able to] adequately represent the interests of [both the insured and the insurer] ," even if both consent "after full disclosure of the possible effect of [continued] representation on the exercise of his independent professional judgment on behalf of each."! Given this fact, it is little comfort to the insured that he may have a right to "independent" §15.6.1 IDR 5-105(C). Cf. Model Rule 1.7(b), which requires that "(I) thelawyer reasonably believe the representation will not be adversely affected; and the client [insured] consents after consultation."

514


§15.6.1

counsel at his own expense, as long as the insurer retains the right to control the litigation in "good faith." Recognizing the difficulties inherent in applying the two-client model to common issue conflicts, some courts have attempted to modify it, without abandoning or subordinating the insurer's status visa-vis the insured. These courts typically provide for independent counsel at the insurer's expense- and grant the insured either control of the defense> or some measure of joint participation in the defense." In San Diego Na1!Y Federal Credit Union v. Cumis Insurance Society,5 the California appellate court held that when an insurer reserves its rights to deny coverage, the insured must be informed of the implications of Joint representation and given the option of employing independent counsel at the insurer's expense. The California legislature modified Cumis by a statute reading in part: (b) [A] conflict does not exist as to allegation

or facts in the litiga-

tion for which the insurer denies coverage; however, when an insurer reserves its rights on a given issue and the outcome of that coverage issue can be controlled by counsel first retained by the insurer for the defense of the claim, a conflict may exist .... (c) [T]he insurer may exercise its right to require that counsel selected by the insured possess certain minimum qualifications .... The insurer's obligation to pay fees to the independent counsel selected by the insured is limited to the rates which are actually paid by the insurer to attorneys retained by it in the ordinary course of business .... (d) When independent counsel has been selected by the insured it shall be the duty of that counsel and the insured to disclose to the insurer all information concerning the action except privileged material relevant

2San Diego Navy Federal Credit Union v. Cumis Insurance Society, 162 Cal. App. 3d 358, 208 Cal. Rptr. 494 (1984), is the leading case. Cumis was modified by California Civil Code §2860 (1988). For a discussion of Cumis and for the suggestion that Cumis and cases like it have been exploited by unscrupulous defense lawyers for the purpose of generating excessive billings, see DeBenedictis, The Alliance, 75 A.B.A. J. 59 (Dec. 1989). See also Star Ins. Corp. v. Steel Bar, Inc., 324 F. Supp. 160 (N.D. Ind. 1971); Brohawn v. Transamerica Ins. Co., 276 Md. 396, 347 A.2d 842 (1975); Ellis, Revisiting the "Cumis" Rule, II Cal. Law. 55 (May 1991) (,,[California] Civil Code section 2860 ... may have created more problems that it has solved."). 3Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187, 355 N.E.2d 24 (1976). 4Fidelity and Casualty Co. v. Stewart Dry Goods Co., 208 Ky. 429, 271 S.W 444, 447 (1925). 5162 Cal. App. 3d 358,372-375,208 Cal. Rptr, 494, 503-506 (1984).

515

§15.6.1


to coverage disputes, and timely to inform and consult with the insurer on all matters relating to the action .... (f) Where the insured selects independent counsel pursuant to the provisions of this section, both the counsel provided by the insurer and independent counsel selected by the insured shall be allowed to participate in all aspects of the litigation. Counsel shall cooperate fully in the exchange of information that is consistent with each counsel's ethical and legal obligations to the insured. Nothing in this section shall relieve the insured of his or her duty to cooperate with the insurer under the terms of the insurance contract."

If independent counsel is selected by the insured, the attorney selected by the insurer can then concentrate on protecting the insurer's interests on the coverage issue. As a practical matter, however, the attorney selected by the insurer is relegated to a standby role in the litigationmonitoring the case and offering assistance when mutually advantageous to the insured and the insurer. There are other possible solutions to common issues conflicts. The Guiding Principles suggest "other procedures." The most common are the declaratory judgment and joinder by impleader or intervention. 7 As Professor Morris points out, these procedures provide something less than an ideal solution." A separate action for declaratory judgment will probably be viewed as vexatious and burdensome to the insured." Moreover, the declaratory judgment will not prevent the tort plaintiff from relitigating the coverage issue if the plaintiff is not joined or cannot be joined as a party. 10 With regard to other joinder devices, Morris observes: While some view the joinder approach [through impleader, intervention, or consolidation of the declaratory judgment action with the underlying tort litigation] as a panacea, others find a variety of problems with it, including higher jury verdicts, undue consumption of time and expense, a variety of procedural problems, unmanageable complexity and prejudice 6Cal. Civ. Code §2860 (1988). 7Guiding Principle V, ,-r3. "Morris, supra §15.3.1 note 1, at 486-489. 9Brown, The Demise of the Declaratory Judgment Action as a Device for Testing the Insurer's Duty to Defend, 23 Clev. St. L. Rev. 423 (1974). "Maryland Casualty Co. v. Peppers, 64 Ill. 2d 187, 355 N.E.2d 24 (1976); Brohawn v. Transamerica Ins. Co., 276 Md. 396, 347 A.2d 842, 849-850 (1975).

516


§15.6.2

to the insured from presentation of policy defenses simultaneously with the defense of the underlying action. I I

§15.6.2


At the heart of the two-client model is the assumption that the insurer will be precluded from relitigating issues of fact determined in the third party tort litigation. However, this assumption does not always hold true. It is true that an insurer may be estopped to litigate a coverage issue by virtue of certain rules of insurance law. For example, an insurer defending without reserving rights or securing a bilateral nonwaiver agreement will generally be estopped from later asserting a noncoverage defense. I This rule of insurance law is applied with a vengeance, even in cases where the company had not completed its investigation at the time it issued its reservation of rights. 2 Furthermore, an insurer may be estopped to litigate coverage defenses by wrongfully refusing to defend the insured" or by engaging in misconduct during the defense of the case.! Considering the underlying premise of the one-client model-that the insurer does not control the defense-the insurer should otherwise be allowed to relitigate coverage issues." In a jurisdiction accepting the

IIMorris, supra §15.3.1 note I, at 489 (footnotes omitted). §15.6.2 ISee, e.g., Richmond v. Georgia Farm Mut. Ins. Co., 140 Ga. App. 215, 231 S.E.2d 245 (1976). A reservation of right is a unilateral declaration by the insurer that it is defending without waiving its right to contest coverage-presumably later in garnishment or other supplementary proceedings. A nonwaiver agreement is a bilateral agreement (one in which the explicit consent of the insured is obtained). Some jurisdictions require the insured's consent. See Hursh, Annotation, Liability Insurance, 38 A.L.R.2d 1148 (1954). 2Courts have been particularly hard on insurers who attempt to reserve rightspendinginvestigation, holding such documents ineffective under a variety of theories. See, e.g., Transamerica Ins. Co. v. Beem, 652 F.2d 663, 666 (6th Cir. 1981). See also Henry v. Johnson, 191 Kan. 369,376,381 P2d 538,545 (1963) (reservation of right ambiguous). 3See St. Louis Dressed Beef and Provision Co. v. Maryland Casualty Co., 201 U.S. 173,26 S. Ct. 400, 50 L. Ed. 712 (1906). "Parsons v. Continental Natl. Am. Group, 113 Ariz. 223,550 P2d 94 (1976); Employers Casualty Co. v. Tilley, 496 S.W2d (Tex. 1973). 5Morris cites Restatement (Second)Judgments §107:1(1) (Tentative Draft No.3, 1976), and Ferguson v. Birmingham Fire Insurance Co., 254 Or. 496, 460 P.2d 342 (1969), for the proposition that there should be no "estoppel" in common issue cases.

517

§15.6.2


view that a judgment in the third party tort action is not determinative of coverage issues, the conflict of interest inherent in the common issue cases disappears. The attorney representing the insured can concentrate on defeating the plaintiff's claim, knowing that the insurer can relitigate the issues common to liability and coverage. Resort to independent counsel" and special procedural maneuvers should not be necessary.

§15.7

Conflicts Arising During Representation-Confidentiality

Insureds often inform the attorney hired by the insurer of facts that might negate coverage. For example, the insured might tell the attorney that he intentionally struck the plaintiff (the policy excluding liability for intentional acts); the insured might say that he was working for his employer when the accident occurred (the policy excluding liability for acts occurring while working for another); or the insured might tell the attorney that his 15-year-old son was driving when the accident happened (the policy excluding liability for acts of unlicensed drivers). In these scenarios, the attorney needs to choose one of the following courses of action: (l )disclosure to the insurer, (2)withdrawal, or (3)continued representation of the insured without disclosure to the insurer. The jurisdiction's choice of the one- or two-client model can affect the ethical propriety of the attorney's choices. §15.7.1


Disclosure to the Insurer As a matter of black letter evidence law, communications by one joint client to common counsel concerning a matter in which both clients have sought representation are unprivileged against the other joint client.' Indeed, an early ABA opinion held that the attorney should 6But see CHI of Alaska v. Employers Reinsurance Corp., 844 P.2d 1113 (Alaska 1993) (requiring independent counsel in one-client model state). §15.7.1 IE.g. Unif. R. Evid. 502(d)(5); California Evid. Code §962 (1965); Mueller and Kirkpatrick, supra §15.5.2 note 4, at 385.

518

Special Probderns

in Insurance Defense

§15.7.1

disclose to the insurer all information received from the insured relating to coverage." This position is supported by several appellate opinions holding that the insured's consent to disclosure is implied from the insurance contract. 3 This position is unacceptable. First, the attorney's ethical obligation to preserve each client's confidences and secrets is not coextensive with the rules of evidentiary privilege. Evidence rules do not take into account the pervasive requirement that an attorney not act to the detriment of either client." Second, application of this joint client rule presupposes that the clients are not in conflict at the time of the communication. However, if the insured gives information to the attorney that might provide a basis for denying policy coverage, then the "clients" immediately have a conflict. Application of a joint client disclosure rule invariably runs counter to the insured's expectations and favors the insurer over the insured." Absent a full explanation that disclosure may prejudice his interests, the insured cannot be held to have consented to disclosure. 6 In 1966, the ABA overruled the earlier joint client disclosure rule by an opinion that provides that an attorney may not pass along to the insurer any confidence or secret of the insured that might furnish a defense in any postjudgment garnishment proceeding against the insurer.' This change of position was incorporated into the Guiding Principles in Principle VI.

2ABA Informal Op. 822 (1965). 3Liberty Mut. Ins. Co. v. Engels, 20 A.D.2d 53, 244 N.YS.2d 983 (1963); Shafer v. Utica Mut. Ins. Co., 248 A.D. 279, 289 N.YS. 577 (1936). 4E. F. Hutton and Co. v. Brown, 305 F. Supp. 371, 393-394 (S.D. Tex. 1969). 5Moore v. Roberts by and through Roberts, 684 S.W2d 276 (Ky. 1985) (where both defendant insured and insurer are represented by one counsel, inherent conflict of interest must be disclosed and separate counsel retained; this conflicts analysis was raised sua sponte by the Kentucky Supreme Court). 6For a recent case, see Rockwell Intl. v. Superior Ct., 26 Cal. App. 4th 1255, 32 Cal. Rptr. 2d 153 (1994) (cooperation clause not an implied waiver of attorney-client privilege in the event of a conflict or litigation between the insured and the insurer, and no 'joint client" exception). Cf Industrial Indem. Co. v. Great Am. Ins. Co., 73 Cal. App. 3d 529, 140 Cal. Rptr. 806 (1977). 7 ABA Informal Op. 949 (1966).

519

§15.7.1

VI.


DUTY OF ATTORNEY NOT TO DISCLOSE CERTAIN FACTS AND INFORMATION

Where the attorney selected by the company to defend a claim or suit becomes aware of facts or information, imparted to him by the insured under circumstances indicating the insured's belief that such disclosure would not be revealed to the insurance company but would be treated as a confidential communication to the attorney, which indicate to the attorney a lack of coverage, then as to such matters, disclosures made directly to the attorney, should not be revealed to the company by the attorney nor should the attorney discuss with the insured the legal significance of the disclosure or the nature of the coverage question. If the attorney acquires information suggesting lack of coverage under circumstances indicating the insured's belief that such disclosure would not be revealed to the company, the attorney may not betray the insured's confidence by revealing the information to the insurer. Nor may the attorney use the confidential relationship to gather information detrimental to the client's interest. Moreover, the requirement that the disclosure be "imparted to him by the insured under circumstances indicating the insured's belief that such disclosure would not be revealed to the insurance company" has been read liberally. The insured should not have to express a desire to withhold the information from the insurer. Even when the information indicating lack of coverage does not bear directly on the plaintiff's claim, the attorney should not disclose the information to the insurer without the insured's consent. 8 The leading case is Parsons v. Continental National American GrOUp.9 In that case, the insurer appointed an attorney to defend a "troubled" minor in a civil action for assault. The policy contained a standard exclusion for intentional acts of the insured, but the insurer had not invoked the exclusion. The insurer evidently believed that the youth was mentally incompetent at the time the tort was committed. On the basis of confidential information obtained from the insured's medical records and from client interviews, the attorney decided that the youth knew that what he was doing was wrong. The attorney forwarded this information to the insurer and represented the insurer in postjudgment garnishment proceedings. Without discussing the possibility that the 8Moritz v. Medical Protective Co. 428 F. Supp. 865, 873 (W.D. Wis. 1977). 9113 Ariz. 223, 550 P.2d 94 (1976).

520

Special Problem.s in Insurance

Defense

§15.7.1

confidential information might have been discovered from another source, the Supreme Court of Arizona held that the insurer was estopped to deny coverage because of the attorney's duplicity.'? As a consequence of its failure to consider the insured's interests, the carrier was required to pay the full amount of the judgment, an amount exceeding its policy limits. II Although the court was not presented with the issue of the attorney's liability to the insurer, one can foresee an action by the insurer for the difference between the settlement offer and the policy limits, as well as the excess judgment. 12 Unfortunately, if a question of coverage arises because the attorney incidentally becomes aware of facts from some other source (not the client, the client's agents or employees, or the client's files), the two-client model and the Guiding Principles provide a less satisfactory solution: IV.

CONFLICTS OF INTEREST GENERALLYDUTIES OF ATTORNEY

In any claim or in any suit where the attorney selected by the company to defend the claim or action becomes aware qffacts or information which indicate to him a question of coverage in the matter being defended or any other conflict of interest between the company and the insured with respect to the defense of the matter, the attorney should promptlY inform both the company and the insured, preferably in writing, of the nature and extent of the conflicting interest. In any such suit, the company or its attorney should invite the insured to retain his own counsel at his own expense to represent his separate interest. [Emphasis supplied.] While Guiding Principle IV preserves the essence of the two-client model, it does violence to the notion that the insured is the "primary" client. Guiding Principles IV and VI limit the quantity and quality of advice that may be given to the insured client and burden the insured with the costs of independent counsel. Further, they collide with the definition of confidential information contained in DR 4-101 and

lOInaddition, the court concluded that the carrier had failed to give due consideration to a proposed settlement offer within the policy limits, relying on the strength of the attorney's advice with respect to the coverage defense. See §15.1O. 11550P2d at 100. 12Cf.Smiley v. Manchester Ins. and Indem. Co., 49 Ill. App. 3d 675, 364 N.E.2d 683 (1978).

521

§15.7.1


Model Rule 1.6.13 Specifically,Canon 4 and DR 4-10 1 make no distinctions among sources of information. The former includes as a client's secrets any "information gained in the professional relationship ... the disclosure of which ... would be likely to be detrimental to the client." Surely, information potentially supporting a coverage defense "would be likely to be detrimental to the [insured] ," regardless of its source. 14 Similarly, Model Rules 1.6 and 1.8(f) appear to prohibit the disclosure of any information to the insurer if the information "relates to the representation of the [insured]," at least absent consent." These cardinal principles are compromised by Guiding Principle IV's requirement that both clients be informed of the facts suggesting a coverage issue. That the compromise solution of Guiding Principle IV favors the insurer, while appearing to maintain the "neutrality" of the two-client model, becomes all the more apparent when its proposed solution is compared to the ABA'spronouncement on the subject in ABA Informal Opinion 1476. That opinion dealt with the defense of an employer and an employee. In the course of a conversation with the lawyer, the employee (defendant) related facts to the lawyer indicating that the employee may have acted outside the scope of his employment, and that under the terms of the insurance contract the employee may not be entitled to the protection of the employer's liability insurance. The employee made the disclosures in the belief that he was doing so in a lawyer-client relationship and apparently without understanding the implications of the circumstances he related to the lawyer. The lawyer learned similar; but more limited, information when interviewing another witness. The lawyer believes that the insurance company may have a contractual right to deny protection to the employee because of scope-of-employment circumstances. It is also possible that the employer could invoke scope-of-employment circumstances to defend against his own liability to the plaintiff. The litigation has not progressed beyond the pleading stage. No discovery procedure has yet been invoked. In the ABA Committee's view, the lawyer should not reveal to the insurance company the information gained by the

13SeeNote: Legal Ethics, 52 Tex. L. Rev. 610, 617 (1973-1974). 14SeeAmer. Law. Code of Con. (1980), Rule 1(1), which prohibits disclosure of any coverage information to the insurer, regardless of the source. 15See§15.2.

522


§15.7.1

lawyer either from the employee or from the witness when the revelation might result in the denial of insurance protection to the employee. 16 The Option if Withdrawal Withdrawal is also problematic. In the event of withdrawal, the attorney may not represent either client and will be under a continuing obligation to preserve inviolate the insured's confidences and secrets. Accordingly, there is some merit in the argument advanced by one commentator: The best way out is for [defense counsel] to withdraw from the case. The insured loses nothing by his withdrawal because the attorney has been silenced by permitting this confidential communication in the belief the attorney would treat it as confidential. The company may be the loser, but since the attorney had not been retained to ascertain coverage defenses or grounds of rescission he has not breached any duty to the insurer by nondisclosure. His immediate withdrawal subject to reasonable notice of his intention to do so, seems to be the only appropriate course and, as I see it, no insurance company could expect an attorney to pursue any other course."

Yet the attorney must provide the insurer some explanation for withdrawal, if only a cryptic reference to a potential "ethical problem." The very act of withdrawal may alert the insurer to the need for further investigation or discovery relating to coverage. 18

16ABAInformal Op. 1476 (1981) (emphasis supplied). See also NJ. Op. 542 (1984) (files should be screened before they are turned over to the insurer). ABA Informal Opinion 1476 also noted that the lawyer (a) should not disclose the coverage information to the employer codefendant without the employee's consent and (b) should not represent the insurer on the coverage issue. The ABA Committee recommended separate counsel for each defendant. 17Allen, Selected Conflicts of Interest Problems in Insurance Litigation, in Conflicts of Interest in Insurance Practice 52 (DRI Monograph No.5, 1971). Allen's suggestion that counsel must withdraw is supported by several reported cases. See, e.g., State Farm Mut. Ins. Co. v. Walker, 382 F.2d 548 (7th Cir. 1967); Allstate Ins. Co. v. Keller, 17 Ill. App. 2d 44, 149 N.E.2d 482 (1958). 18C£Fidelity and Casualty Co. of N.Y v. McConnaughty, 228 Md. 1, 179 A.2d 117 (1962). The American Lawyer's Code of Conduct Rule 6.6 (1980) appears to prohibit counsel from offering any explanation for withdrawal if it would prejudice the insured's confidences or secrets.

523

§15.7.1


Defense

Furthermore, withdrawal increases litigation expenses and may only result in passing the ethical dilemma on to the next attorney.

The Option of Continuing to Represent the Insured without Disclosure to the Insurer The two-client model assumes that the insurer is more than a third party nonclient. Continuing to represent the insured without disclosing the potential coverage defense is inconsistent with the notion that the insurer is a client to whom a duty is owed. Thus, continuing to represent the insured is a solution associated with the one-client model.

§15.7.2


As Professor Morris points out, the one-client model resolves the problem of defense counsel's reporting obligations by treating the insured as the only client: If the insured is regarded as the only client, then it is clear that the attorney must protect his confidences and secrets and not disclose them without his consent. It is also clear that the defense attorney may otherwise "[pJrejudice or damage his client during the course of the professional relations." Confidential communications, or other facts learned during the course of the relationship, could not then be disclosed to the insurer without the insured's consent.' However, there seems to be agreement under both the two-client and the one-client models that some categories of information may be disclosed to the insurer, even though such information might be detrimental to the insured. Specifically, since pleadings, depositions, and other court papers are, or are likely to become, public record, there is little reason to force the insurer to obtain them from the courthouse, even when they reveal information raising coverage issues." Indeed, this "exception" appears to have been recognized in ABA Informal Opinion §15. 7.2 'Morris, supra §15.3.1 note I, at 483. See also Ky. Op. E-340 (1990) (insurance defense lawyer may not comply with insurer's demand that claims personnel or other representatives of insurer sit in on attorney-client interviews). 2Morris, supra §15.3.1 note I, at 129; Restatement of the Law Governing Lawyers §112, Comment e (Tentative Draft No.3, 1990).

524

Special Probferns in Insurance

Defense

§15.8

1476 (discussed in the previous section), which noted that "no discovery procedure had yet been invoked." For instance, the coverage defense would be a matter of record if the employee testified in a discovery deposition that he was not on the employer's business at the time of the accident.

§15.8

Noncooperation and Collusion

The standard liability policy contains a provision requiring the insured to cooperate with the company. This duty to cooperate includes, among other things, a duty to provide truthful information and testimony, a duty to attend all pretrial proceedings and hearings, and a duty to assist in securing and giving evidence. A failure to cooperate may be a basis for denying coverage to the insured, at least if the insurer can prove that it was prejudiced by the insured's conduct. Accordingly, insurers are likely to assert the insured's noncooperation whenever evidence can be found that the insured provided inconsistent versions of facts or events, made himself unavailable for depositions or meetings with counsel, or simply vanished. Whenever defense counsel encounters noncooperation, there is a potential conflict under the two-client model. Regardless of whether the noncooperation arises from lying or nonappearance, defense counsel has come into possession of information relating to the insured that the insurer would like to know, but that may harm the insured. Fortunately, many of these conflicts are more apparent than real because the insurer must attempt to secure the insured's cooperation. I Further, the insurer must prove that it was prejudiced by the insured's noncooperation.?

§15.8 ISee, e.g., National Grange Mut. Ins. Co. v. Lococo, 20 A.D.2d 785, 248 N.YS.2d 150 (1965) (use of non-Spanish-speaking investigators and English language correspondence to secure the cooperation of a non-English-speaking insured); Peterson v. Western Casualty and Sur. Co., 19 Utah 2d 26, 425 P.2d 769 (1967) (mailing letters insufficient). 2For a classic case, see Pupkes v. Sailors, 183 Neb. 784, 164 N.W.2d 441 (1969) (vanishing insured's credibility so weak that defense more effective in his absence). See also Boone v. Lowry, 8 Kan. App. 2d 293, 657 P.2d 64 (1983). Some states have virtually eliminated noncooperation as a defense to the claims of a third party tort victim.

525

§15.8

Special Problem.s in Insurance Defense

When may defense counsel disclose the insured's noncooperation to the insurer? Some matters will ultimately become matters of public knowledge. In such cases, it can be argued that defense counsel breaches no duty to the insured by disclosing the matter to the insurer. 3 Even so, some ethics opinions adopting the one-client model have discouraged art:Y disclosures to the insurer that might suggest a noncooperation defense." Collusion is troublesome under either model. Cases arise in which an insured may actually prefer that a claimant recover." For instance, the insured driver might want the injured passenger (perhaps a spouse or child) to recover from the insurance company. Under the two-client model, the defense attorney might be tempted to inject suggestions of "insurance fraud" into the litigation, or attempt to impeach the insured with prior inconsistent statements, in order to protect the insurer. 6 Absent clear proof of collusion, prudent counsel will resist such temptations.' In some cases, the insurer can spot collusion and file a separate suit for a declaratory judgment. Under no circumstances) however; should the attorney assist the insured in difrauding the insurer. Withdrawal is mandatory when the attorney knows that continued representation will assist the insured in perpetrating the fraud." Withdrawal is permitted if the attorney reasonably believes the insured has used the attorney to "The insured's contradictory statements may surface during discovery depositions. See, e.g., State Farm Mut. Ins. Co. v. Walker, 382 F.2d 548 (7th Cir. 1967); Allstate Ins. Co. v. Keller, 17 Ill. App. 2d 44, 149 N.E.2d 482 (1958). "See, e.g., Conn. Op. 83-28 (1983). 'Such suits usually involve injuries to family members (assuming there is no enforceable household exclusion) or friends. On the right of counsel to defend the insured who wishes to concede, see Buchanan v. Buchanan, 99 Cal. App. 3d 587, 160 Cal. Rptr. 577 (1979) (lawyer may assert statute of limitation on behalf of defendant husband and bar claim of wife, even over husband's objection). 6See, e.g., Pennix v. Winton, 61 Cal. App. 2d 761,143 P.2d 940 (1943) (reversing a defense verdict and remanding for a new trial when the defense attorney, in "good faith," deprived the plaintiff of a fair trial by repeated reference to the collusion and fraud of the plaintiff and the insured defendant, whom counsel described as only "technically ... my client"); Montanez v. Irizarry-Rodriguez, 273 NJ. Super. 276, 641 A.2d 1079 (App. Div. 1994) (improper for lawyer to turn on insured client as a "hostile witness"). 7Actual collusion may be difficult to establish. See, e.g., Employers Mut. Casualty Co. v. Nelson, 109 N.H. 6, 241 A.2d 207 (1968). Under Model Rule 1.6, the client's fraud may not be disclosed (unless the problem involves fraud on the court), but the attorney may withdraw. Regarding the so-called noisy withdrawal and Comment [16] to Model Rule 1.6, see ABA Formal Op. 92-366 (1992). See discussion of withdrawal in Chapter 18. 8Model Rule 1.16(a)(1).

526

Special Probferns in Insurance Defense perpetrate a fraud, or if the insured, without engaged in defrauding the insurer. 9

§ 15.9

the attorney's

§15.9 help, is

Discovery

As litigation costs increase, more insurance carriers have imposed significant restrictions on defense costs. Some commentators perceive no problem with carrier-imposed limitations on discovery as long as the plaintiff's claims do not exceed the policy limits. 1 In some cases, however, the insured can be harmed by an adverse verdict within the policy limits. The insured may rightly fear that an adverse verdict will be followed by a hike in insurance rates. Or the insured may believe that an adverse verdict will damage the insured's reputation. In a medical malpractice action, a physician who believes she has done nothing wrong may feel betrayed by the insurer's decision to settle or to limit the costs of litigation. Even when a judgment will be paid in full by the carrier, the physician policyholder's reputation is at stake, and her insurance premiums may increase as a result of an adverse judgment. The disappointed physician will look for someone to blame for the adverse judgment. If counsel's pretrial preparation of the case suffered as a result of the carrier's frugality, the insured may legitimately ask why she was never informed of the potential prejudice to her case. The physician can be expected to argue that if she had known of the carrier's cost consciousness and understood the consequences, she would have hired independent counsel, or at least have pressured the carrier for the vigorous defense that she thought was guaranteed by her policy In Bevevino v. Sayrijari,2 as late as the second pretrial conference, the attorney selected by the malpractice carrier had not spoken to the

9Model Rule 1.16(b). §15.9 "Hutcheson, supra §15.5.1 note 2, at 41. C£ Restatement of the Law Governing Lawyers §215, Comment d and Illustration 4 (Tentative Draft No.4, 1991) (if the insurer is bearing substantially all of the consequences, then counsel may defer to insurer's position on costs, at least in some cases). But cf. Mourad v. Automobile Club Ins. Assn., 186 Mich. App. 715,465 N.W.2d 395 (1991) (in-house lawyer who was demoted for objecting to budgetary restrictions placed on defense of insureds was entitled to recover damages from corporate employer). 276 FR.D. 88 (S.D.N.Y 1977), qff'd, 574 F2d 676 (2d Cir. 1978).

527

§15.9


defendant physician about his version of the case.> As a further economy measure, local counsel was appointed to represent the physician at a deposition. Local counsel made no attempt to review the medical records with his client or otherwise prepare him for the rigors of the upcoming deposition. The physician understandably "took refuge in the unprepared layman's haven of 'I don't remember."'4 The plaintiff introduced the deposition with disastrous results. Moreover, the carrier failed to present testimony from the doctor himself or from any of the hospital personnel who could have described the critical nature of the situation confronting the defendant at the time treatment was administered. Finally, the carrier spent no time preparing the expert witnesses who provided the core of the defense, and their testimony was predictably ineffective." The jury returned a verdict of $550,000, which the trial judge attributed to the carrier's neglect: Since the carrier is in the business of defending lawsuits, it must be presumed to know the necessary ingredients of a proper defense. We therefore can only conclude that the above described neglect was a function of the carrier's deliberate decision not to spend enough money to have the lawsuit properly defended .... Presumably it has concluded that by taking all its assumed risks as a package it saves money in the end by skimping on preparation costs and hoping for settlements." While the trial judge's observations were made in passing on a motion for judgment n.o.v. in the medical malpractice action, the court could not resist giving its opinion on the propriety of legal action against the carrier and its appointed counsel. 7 If the carrier's budgetary restrictions threaten the adequacy of the defense, the attorney should let the insurer and the insured know. The attorney should withdraw if necessary, while taking care not to prejudice either one's interests."

3Id. at 90. 4Id. at 91.

5Id. at 91-92. 6Id. at 93. 7Id. at 94 n.11. 8Ky. Op. E-331 (1988). See also Mourad v. Automobile Club Ins. Assn., 186 Mich. App. 715,465 N.W2d 395 (1991) (in-house lawyer, who was demoted and then constructively and wrongfully discharged for objecting to budgetary restrictions placed on defense of insureds, entitled to damages from employer).

528


Defense

§15.10

A restricted defense budget is not the only source of conflict that can arise during discovery. For example, the attorney might be induced by the carrier to resist legitimate discovery requests or otherwise delay the proceedings. Such tactics can cause emotional distress to the insured. While delay may be to the insurer's tactical advantage, the attorney should respect the insured's desire to have the matter concluded. In one reported case, the defense attorney's overly combative approach to discovery caused the plaintiff's attorney to withdraw his client's settlement offer and proceed to trial. The jury returned a verdict in excess of the policy limits, exposing both the carrier and the defense attorney to liability to the insured for extracontractual damages. 9

§15.10

Setdem.ent and Excess Liability

Most personal injury lawyers, and probably all insurance defense lawyers, are familiar with the consequences of an insurer's failure to consider the insured's interests in deciding whether to try to settle an action in which the plaintiff's claims exceed the policy limits. A bad faith refusal to settle the claim may result in the insurer's liability not only for the policy limits, but also for any excess judgment above the policy limits. I This extracontractualliability results from judicial recognition of a conflict of interest between the insured and the insurer. If the plaintiff's claims exceed the policy limits, it is in the insured's interest to have the case settled within the policy limits. As the plaintiff's demand approaches the policy limits, however, the insurer has little to lose by trying the case if it will not be liable for any judgment in excess of the policy limits. The conventional two-client model assumes that the insurer reserves the power to control the defense and settlement.

"Outboard Marine Corp. v. Liberty Mut. Ins. Co., 536 F.2d 730, 733 (7th Cir. 1976). Cf. Continental Ins. Co. v. Bayless and Roberts, Inc., 608 P.2d 281 (Alaska 1980) (negligence of defense counsel in failing to have insured correct deposition precludes insurer's reliance on defense of noncooperation predicated on "willfully false testimony"). §15.10 "The leading case is Crisci v. Security Insurance Co., 66 Cal. 2d 425, 426 P.2d 173,58 Cal. Rptr. 13 (1967), in which a tort claimant obtained an assignment of the insured's rights against the insurer and recovered not only the excess judgment, but also substantial damages for the insured's mental suffering.

529

§15.10


According to the case law,however, the insurer must exercise this power in the best interest of the insured and avoid exposing the insured to personal liability for an excess judgment. The insurer's liability resulting from this conflict has become standard fare in law school courses and Continuing Legal Education programs. Less consideration has been paid to the ethical problems that defense counsel faces under the twoclient model. In most situations, both the two-client model and the Guiding Principles provide an acceptable solution to the dilemma posed by the excess claim. II.

CLAIM OR SUIT IN EXCESS OF LIMITS

In any claim where there is a probability that the damage will exceed the limits of the policy and the company has retained counsel to defend the claim, or in any suit in which the prayer of the complaint exceeds the limit of the policy, or in which there is an unlimited or indefinite prayer for damages and a probability that the verdict may exceed the coverage limit, the company or its attorney should timely inform the insured of the danger of exposure in excess of the limit of the policy. The insured should be invited to retain additional counsel at his own expense to advise him with respect to that exposure. So long as the fmancial interest of the company in the outcome of the litigation continues, the company retains the exclusive right to control and conduct the defense of the case. III.

SETTLEMENT NEGOTIATIONS IN CLAIMS OR SUITS WITH EXCESS EXPOSURE

In any claim where there is a probability that the damage will exceed the limit of the policy and the company has retained counsel to defend the claim, or in any suit in which it appears probable that an amount in excess of the limit of the policy is involved, the company or its attorney should inform the insured or any additional attorney retained by the insured at his own expense of significant settlement negotiations, whether within or beyond the limits of the policy. Upon request, the insured, or such additional attorney, shall be entitled to be informed of all settlement negotiations. The Company shall, upon request, make available to the insured or such additional attorney all pertinent factual information the company and its attorney may have for evaluation by the insured or such additional attorney.

530


§15.1O

The Guiding Principles thus require the attorney to warn the insured of the danger of an excess judgment and to advise the insured to retain independent counsel. 2 At the same time, the attorney must exercise due care in evaluating the claim for settlement purposes. The attorney must seriously consider any settlement offer within the policy limits, since she has an obligation to protect the insured from excess judgments that might reasonably be expected. If the attorney fails in these duties, and that failure subjects either "client" to an unnecessary loss, the attorney might be held liable to the insured" or the insurer" in subsequent malpractice litigation. Moreover, the insured's malpractice claim might be assignable." As we shall see in the next section on accountability, plaintiffs in malpractice suits have obtained assignments of the insured's rights in full or partial settlement of the excess judgment against the insured and then pursued the defense attorney as a defendant. 6 A prudent defense attorney therefore would follow the recommendations of the Guiding Principles and document the efforts to fully inform both clients and secure their cooperation. 7 It should be noted, however, that the Guiding Principles do not provide the insured with full representation at the insurer's expense. The insured is guaranteed only the right to be informed and to "participate" in the settlement; the insured does not have the right to control the settlement negotiations. Moreover, the insured must pay for independent counsel, presumably on the theory that the insurer is the real

"The California statute states that this is not a conflict for purposes of making the insurer liable for the fee of independent counsel. Cal. Civ. Code §2860(b) (1988). 3Lysick v. Walcom, 258 Cal. App. 2d 136,65 Cal. Rptr. 406 (1968). "Smiley v. Manchester Ins. and Indem. Co., 49 Ill. App. 3d 675, 364 N.E.2d 683 (1977). 50n the assignability of claims against the insurer for bad faith, see Grundy v. Manchester Ins. and Indem. Co., 425 S.W2d 735, 737 (Ky. App. 1968). In some states, the malpractice (tort) claim may not be assignable. 6See, e.g., Lysick, 258 Cal. App. 2d 136,65 Cal. Rptr. 406. 7Holmes, supra §15.3.3 note I, at 81-83, provides a checklist based on the Guiding Principles. Holmes emphasizes the need to apprise the insured of the desirability of retaining independent counsel and suggests that the letter to the insured describe "your jurisdiction's rule regarding the insurer's duty of good faith and due care owed the insured in the settlement process, including a plaintiff's demand to settle within the policy limits."

531

§15.10


Defense

party in interest up to the amount of the policy limits and therefore retains its right to control the defense." Unfortunately, the assumption that counsel represents both the insured and the insurer in the settlement negotiations places defense' counsel in a difficult position. Experience suggests that the insurer will rely (or purport to rely) on the advice of defense counsel in determining whether or not to settle within the policy limits. At the same time, the insurer will bristle at any suggestion that the lawyer may also advise the other client (the insured) of the significance of the excess claims.? Some insurers exert pressure on defense counsel not to reduce settlement recommendations to writing.'? In this way, the insurer hopes to secure defense counsel's advice, while immunizing such advice from later discovery by the insured or the insured's assignee. II Of course, this leaves defense counsel at risk if counsel's recollection turns out to be at odds with the insurer's version. Further, the two-client model and the Guiding Principles do not take account of any right of the insured to refuse to settle. Ordinarily, a client's decision on settlement is binding on the client's lawyer.J? Of course, an insured ordinarily will not object to a settlement when there is a claim for damages exceeding the policy limits. Occasionally, however, objections are raised by professionals who fear increased insurance rates and damage to their reputations. In fact, professional liability policies usually contain a provision restricting the. insurer's power to settle a claim without the insured's consent. This provision allows policyholders to reject settlements that are thought to be injurious. Even a modest settlement of a nuisance claim might be against the physician's best interest.F and he buys the SCal. Civ. Code §2860(b) (no obligation of insurer to pay for independent counsel). 9See, e.g., Bianches, supra §15.4 note 5, at 154 (to the effect that defense counsel should not advise the insured on "bad faith"). IOOne of the authors has encountered this technique several times in his role as chairman of a state bar ethics committee. Cf. Fla. Op. 81-5 (1981) (a lawyer may not accept an insurance-company-imposed restraint that the lawyer not express an opinion as to the settlement value of the insured's case). IIAn attorney's files are a legitimate subject of discovery by the insured or his assignee. Terrell v. Western Casualty and Sur. Co., 427 S.W.2d 825, 828 (Ky. App. 1968). 12Model Rule 1.2(a). It may be that this right is subject to a contractual limitation. See Model Rule 1.2(a), Comment [4]. 13W.Young, Cases and Materials on Insurance 323 (1971); Long, supra §15.5.1 note I, §12.25.

532

Special Pnoblerns in Insurance Defense

§15.10

privilege to reject settlement offers without concern for the carrier's exposure. Accordingly, a situation might arise in which the physician will reject what appears to be a reasonable settlement offer from the insurer's standpoint. An attorney who settles a case with the consent of the insurer, but not that of the insured doctor, faces a risk of being named a codefendant in an action for injury to the insured's reputation and reimbursement for any increased insurance costs.14 Furthermore, counsel may incur liability to the physician, even if the insurer is authorized to settle over the insured's objection. In Rogers v. Robson, Masters, Ryan, Brumund and Belom,15 the doctor alleged that defense counsel negotiated a nominal settlement at the insurer's request, even though discovery had produced no evidence of malpractice on his part and the doctor had expressed a desire to take the case to trial. The policy authorized settlement without the insured's consent if the insured physician was no longer a policyholder at the time of settlement, which was the case in Rogers. The court, however, ruled that the physician was entitled to full disclosure of the insurer's intent to settle the litigation without his consent. The attorney's obligation to disclose this matter arose from his attorney-client relationship with the insured and was not negated by the insurer's authority to settle. Because the defense attorney did not disclose the conflict and advise the insured to release the carrier from its responsibilities and continue the defense at his own expense, the attorney was held liable for any damages that the doctor could prove he suffered as a result of the settlement. This case virtually adopts a one-client model, requiring defense counsel to conduct settlement negotiations with only the insured's interests in mind. 16 It remains to be seen whether this approach will be followed in other states and other contexts. The Alabama Supreme Court rejected the result, if not the rationale, of Rogers in the very same context-the

14Lieberman v. Employers Ins. of Wausau, 84 NJ. 325, 338-343, 419 A.2d 417, 424-427 (1980). Only one reported case appears to place any qualification on the exercise of such a power. Transit Casualty Co. v. Spink Corp., 78 Cal. App. 3d 509, 144 Cal. Rptr. 488 (1978). The reported cases have given some substantive content to the concept of a wrongful settlement. Specifically, a jury will be permitted to find that the physician would have lost the case in any event. In such a case, the attorney's misconduct cannot be found to have been the proximate cause of any damages. See, e.g., Lieberman, 84 NJ. at 341-343, 419 A.2d at 426-427. 1581 Ill. 2d 201, 407 N.E.2d 47 (1980). 16Morris, supra § 15.3.1 note I, at 471.

533

§15.10


settlement of a medical malpractice claim over the objection of insured who had contracted away the right to reject a settlement.'?

§ 15.11 Accountability §15.11.1

Malpractice

The possibility that defense counsel might incur liability to the insured for malpractice is evident from the discussions in the preceding sections. Most reported decisions involve defense counsel's failure to use available authority, or seek additional authority, in order to settle claims within policy limits and thereby protect the insured from the consequences of an excessjudgment. 1 Less obvious, but just as troublesome, is the risk that defense counsel might be sued by the insurer, whether the insurer is viewed as a "client" or a "nonclient" indemnitor that reasonably relied on the advice or conduct of defense counsel. Consistent with the one-client model, some cases hold that only the insured has a cause of action against defense counsel. 2 In Assurance Company if America v. Haoen.' for example, the California appellate court held that a Cumisr 17Mitchum v. Hudgens, 533 So. 2d 194 (Ala. 1988). §15.11.1 lThe leading case is Lysick v. Walcom, 258 Cal. App. 2d 136,65 Cal. Rptr. 406 (1968) (recognizing an assignment of the insured's malpractice claim to the third party tort plaintiff). See also Holmes, Third Party Insurance Excess Liability and Its Avoidance, 34 Ark. L. Rev. 525, 548 (1981) ("When no offer has been made, write the plaintiff's attorney and request a settlement demand."). C( American Employers' Ins. Co. v. Medical Protective Co., 165 Mich. App. 657,419 N.W.2d 447 (1988) (The attorney for the insured, hired by the primary carrier, owes no duty to the excess carrier. Attorney allegedly failed to settle within limits of primary policy; $700,000 excess verdict; excess insurer's suit against attorney dismissed.). 2C( Atlanta Inti. Ins. Co. v. Bell, 181 Mich. App. 272,448 N.W.2d 804 (1989). This view was "reversed" in the Michigan Supreme Court, which allowed the insurer to recover from defense counsel on a theory of equitable subrogation, despite the lack of an attorney-client relationship. Atlanta Inti. Ins. Co. v. Bell, 438 Mich. 512, 475 N.W.2d 294 (1991). For additional cases, see Assurance Co. of Am. v. Haven, 32 Cal. App. 4th 78, 38 Cal. Rptr. 2d 25 (1995) (lawyer failed to assert statute of limitations-no "malpractice" claim, but suit for negligence nevertheless viable under another theory); Fireman's Fund Co. v. McDonald, Hecht and Solberg, 30 Cal. App. 4th 1373, 36 Cal. Rptr. 2d 424 (1994) (no subrogation to client's malpractice claim-insurer not a client). 332 Cal. App. 4th 78, 38 Cal. Rptr. 2d 25 (1995). 4San Diego Navy Fed. Credit Union v. Cumis Ins. Socy., 162 Cal. App. 3d 358, 208 Cal. Rptr. 494 (1984).

534

Special Probferns

in Insurance Defense

§15.11.1

lawyer owes no general duty of care to the insurance company paying the lawyer's fee. The court further held, however, that the lawyer could be held liable to the insurer for any injury caused by counsel's failure to comply with the requirements of the Cumis statute.> On the other hand, it makes sense to say that a lawyer owes some measure of duty to the entity paying the fee and controlling the litigation. In Smiley v. Manchester Insurance and Indemnity CO.,6 the lawyer failed to settle within the policy limits. The plaintiff obtained an excessjudgment, took an assignment of the insured's bad faith failure to settle the claim, and sued the insurer. The insurer impleaded the attorney and presented evidence that it had given defense counsel authority to use the full $20,000 of the policy limits "at a propitious moment." Before the return of the jury verdict and shortly after plaintiffs' counsel had offered to settle both claims for $10,000/ defense counsel and the insurer apparently had a telephone conference regarding settlement. Although the evidence regarding the discussion between the insurer and defense counsel was conflicting, the insurer's documentation of its version led the appellate court to conclude that counsel's liability to the insurer for a failure to use his full settlement authority was clear as a matter of law.8 The Smiley case is something akin to "the tip of the iceberg." As the insurer's liability to the insured expands through judicial acceptance of such theories as estoppel to litigate coverage? and wrongful refusal to defend,'? prudent counsel has further reason to refuse to participate in the development of the insurer's coverage position. II

538 Cal. Rptr. 2d at 29; Cal. Civ. Code §2860 (1988). 649 Ill. App. 3d 675,364 N.E.2d 683 (1977). 7364 N.E.2d at 686. 8Id. at 687. The issue was remanded to the lower court for a trial on the issue of damages. 9See cases cited in § 15.7. IOSeeEskridge v. Educator and Executive Insurers, Inc., 677 S.W2d 887 (Ky. 1984). See also Richmond v. Georgia Farm Mut. Ins. Co., 140 Ga. App. 215,231 S.E.2d 245 (1976) (when bilateral nonwaiver agreement rejected, insurer may attempt unilateral reservation of right if it immediately seeks a declaratory judgment); Mowry v. Badger St. Mut. Casualty Co., 129 Wis. 2d 496,385 N.W2d 171 (1986) (bifurcation and reasonable noncoverage argument saved insurer). IIRegarding the potential risk of becoming associated with a captious argument relating to noncoverage, see Medical Protective Co. v. Davis, 581 S.W2d 25 (Ky. App. 1979).

535

§15.11.2

§15.11.2


Unfair Olairns Settlement Practices

Additional threats to insurance defense counsel are implicit in legislation relating to unfair insurance claims settlement practices in the handling of first and third party claims. Over 30 states have adopted such statutes, in one form or another, in an effort to codify or expand the rights of insureds and tort victims. Of particular concern for present purposes are those statutes making it an "unfair claims settlement practice" for a "person" to commit any of the designated offenses that result in injury to first or third party claimants and providing for civil damage actions against such "persons." I Not only do such statutes provide remedies against insurers, but also they pose problems if defense lawyers are identified as "persons" who can be sued.? These problems are especially likely to materialize in cases involving the defense of first party claims (such as life, health, and property claims) in which defense counsel will be hired by the insurer to represent its interests against an insured claimant. Obviously, a threat of separate liability may have a chilling effect on the exercise of "zealous advocacy" on behalf of the insurer client. To be sure, "attorneys must be free to fully advise and represent their clients without fear of subjecting themselves to liability as a result of the proper discharge of their professional obligations ... and any rule to the contrary ... constitute[sJ a serious impairment to the attorney-client relationship, and a resulting deleterious effect on the administration of justice."? At one point, the California courts held that defense counsel could be a proper party defendant in a civil action brought under such a statute." However, this view was later rejected by the California Supreme Court in Doctors' Co. v. Superior Court,S ruling that the statute could be applied only to insurance companies and not to their counsel. The insurance industry won a major victory in the 1988 California case of Moradi-Shalal v. Fireman's Fund Insurance Co.,6 reversing the §15.11.2 'For a discussion of such statutes, see Best, supra §15.1 note 5; Underwood, Insurance, 72 Ky. LJ. 403-413 (1983-1984). 2See Kornblum, Royal Globe v. Superior Court: Its Impact on Litigation Involving Insurers, 29 Def. LJ. 355, 371-372 (1980). 3Wolfrich Corp. v. United Servs. Auto. Assn., 149 Cal. App. 3d 1206, 1209, 197 Cal. Rptr. 446, 448 (1983). "Id. at 1209, 197 Cal. Rptr. at 448. 549 Cal. 3d 39,775 P.2d 508,260 Cal. Rptr. 183 (1989). 646 Cal. 3d 287, 758 P.2d 58, 250 Cal. Rptr. 116 (1988).

536


Defense

§15.11.2

court's earlier decisions recognizing an implied right of action against insurers under the California Unfair Claims Settlement Practices Act. 7 The California court appears to have been influenced by the reluctance of other state courts to recognize implied rights." This case was followed by Kanne v. Connecticut General Life Insurance CO.9 There the Ninth Circuit held that a statute providing remedies for settlement delay was preempted by the Employee Retirement Income Security Act. Preventive Ethics Checklist As a Lawyer Selected by the Insurer to Represent the Insured on a Liability Policy o Inform the insured of the compulsory counterclaim rule if applicable to the case. Either file the claim yourself (with the insurer's permission), or ensure that the claim is filed by separate counsel. D Treat the insured as the client and the insurer as a third party benefactor. Do not reveal to the insurer any information relating to the representation of the insured that might provide a coverage defense. You may reveal matters that are of record or otherwise public in nature. D You must withdraw if continued representation would involve you in defrauding the insurer. D You may withdraw if the insured has used your services to defraud the insurer. o Ignore the issue of coverage in a common issues case. Practice the case and frame the issues as you would if coverage were not an issue.

7Royal Globe Ins. Co. v. Superior Ct., 23 Cal. 2d 880, 592 P.2d 329, 153 Cal. Rptr. 842. (1979). BThe court noted that only 2 of the 19 high courts that have faced the issue have followed the Royal Globe precedent. Nevertheless, the Kentucky Supreme Court concluded that private rights could be implied from the state's unfair claims statute and from the state's consumer protection act. See State Farm Mut. Auto. Ins. Co. v. Reeder, 763 S.W2d 116 (Ky. 1988) (unfair claims act); Stevens v. Motorist Mut. Ins. Co., 759 S.W2d 819 (Ky. 1988) (consumer protection act). Of some interest is the fact that the Kentucky unfair claims act, Ky. Rev. Stat. §304.12-235 (1988), provides for interest penalties and fee awards for unjustified insurer delay in the claims and settlement process. 9859 F.2d 96 (9th Cir. 1988) (citing Pilot Life Ins. Co. v; Dedaux, 481 U.S. 41, 107 S. Ct. 1549,95 L. Ed. 2d 39 (1987)).

537

§15.11.2

Special Pr'oblerns in Insurance Defense

In Dealing with an Insurer That Selected You and Pays Your Fee D You must treat the insurer as a third party benefactor in the event of conflict with the insured. D Comply with the insurer's instructions so long as compliance is consistent with the best interests of the insured. D Object to budgetary restrictions on discovery that might prevent you from adequately handling the case. The insured is your client and can be harmed by a judgment or settlement within the policy limits. In Litigation and Settlement D Keep the insured and the insurer informed of all developments. D Consider the non-economic impact of the litigation on the insured. D Inform the insured of the right not to settle and to maintain a defense at the insured's expense. This might be of concern in representing insureds sued for professional malpractice. D Provide the insurer and the insured with a well-considered analysis of the case so that the insurer can intelligently decide whether to accept an offer to settle within the policy limits and the insured can evaluate the danger of an excessjudgment. D Warn the insured of the risk of an excessjudgment if the claim is in excess of the policy limits, but do not counsel the insured on any possible cause of action against the insurer.

538

16 Special Problems in Class Actions

§16.1 §16.2 §16.3 §16.4

§16.5 §16.6

§ 16.7 §16.8

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Competence and Qualifications of Counsel Solicitation and Contacts with Class Members §16.4.1 Prelitigation Contacts §16.4.2 Contacts by Plaintiff's Counsel after Filing and before Certification §16.4.3 Contacts by Defense Counsel after Filing and before Certification §16.4.4 Contacts after Certification and before Expiration of the Exclusion Period §16.4.5 Contacts after the Exclusion Period Is Closed Relationship between Plaintiff's Counsel and the Class Representatives Financing the Litigation Fees and Selection of Counsel Conflicts §16.8.1 The Lawyer's Personal Interests

539

§16.1


§16.8.2

Conflicts between the Lawyer and the Class Representatives §16.8.3 Conflicts within the Class §16.8.4 Conflicts Manufactured by Defense Counsel § 16.9 Defense Challenges to Certification §16.10 Discovery and Delay §16.11 Judicial Responses to Specific Instances of Misconduct

§16.1

Introduction*

Charges of "abuse" of the class action and accusations of ethical misconduct on the part of lawyers prosecuting class actions are widespread and of long standing. I As Professor Arthur Miller noted in a widely cited article: [FJrom 1969 to approximately 1973 or perhaps 1974, antipathy to the class action became palpable .... The defense bar developed numerous litigation techniques to make the class action venture as unattractive as possible, including attacking class counsel's professional conduct."

In this chapter, we discuss the most common complaints against class action plaintiffs' lawyers: • They are the real parties in interest, with a Rolodex of "clients" willing to serve as class representatives. • They solicit clients and stir up litigation.

§16.1 'Much of the material contained in this chapter first appeared in Underwood, Legal Ethics and Class Actions: Problems, Tactics and Judicial Responses, 71 Ky. LJ. 787 (1982-1983). For a comprehensive survey of ethics in class actions, see H. Newberg and A. Conte, Newberg on Class Actions ch.15 (3d ed. 1992) (multivolume work). See also the treatment in FederalJudicial Center, The Manual for Complex Litigation (3d ed. 1995). 'Note, Attorney Investment in Class Actions: TheAgent OrangeExample, 45 Case W. Res. L. Rev. 291, 301 (1994) [hereinafter Attorney Investment]. 2Miller, Of Frankenstein Monsters and Shining Knights: Myth, Reality, and the "Class Action Problem," 92 Harv. L. Rev. 664, 679 (1979).

540

Special Pnoblerns in Class Actions

• • • •

They They They They

§16.3

bring "strike suits" to coerce unfair settlements. do not communicate with members of the class. ignore conflicts of interest. profit at their clients' expense.

We also mention some of the charges against lawyers defending class actions: • They abuse discovery to intimidate representatives. • They unfairly lobby potential class members. • They collude with class counsel to the benefit of the lawyers and the detriment of the class. • They unfairly create conflicts of interest for class counsel.

§16.2

Cornpanison of the Code of Professional Responsibility and the Model Rules

While the drafters of the Model Rules attempted to modernize the Code by taking account of lawyer roles outside the litigation setting, they made no changes for the express purpose of resolving the problems addressed in this chapter. Given the fact that the Code and the Rules were prepared with the traditional "individual" action in mind, courts will have to continue to struggle with these ethical issues on a case-bycase basis, leaving behind a wake of conflicting opinions. The Model Rules did effect one change that substantially impacts the prosecution of class action suits. Unlike the Code, Model Rule 1.8(e)allows an attorney to advance costs and expenses, with repayment contingent on obtaining a settlement or judgment sufficient to reimburse the attorney. The effect of this change is discussed in §16.6.

§16.3

Cornpetence and Qualifications

of Counsel The requirement of "competent representation" demands that plaintiffs' counsel have the resources and skill necessary to prosecute a class

541

§16.3

Special Proble:ms in Class Actions

action of the type contemplated. 1 In the class action context, resources means manpower and money, since class action lawyers normally advance the costs," which can be very large." The Manual for Complex Litigation recommends that judges select lead counsel on the basis of the "relative competence, experience, dedication, reliability and resources of the attorneys.?" An attorney who lacks the skill, time, or resources to prosecute a class action should decline the representation and refer the would-be client to competent counsel." The mere filing of a class action tolls the statute of limitations and creates an "incipient fiduciary relationship" between the attorney and the putative class.6 Everything written in Chapter 2 about the duty to investigate the facts and law applies to class actions. It is not enough for a lawyer to have the necessary skill and resources; the lawyer must use his skill and resources competently. In Bums v. Georgia)7 the trial court dismissed the claims of one of several named plaintiffs with prejudice and denied class certification on account of plaintiff's failure to conduct discovery and move for certification until a year and a half after removal of the action to federal court. The lawyer appeared ignorant of the local rules of court and the federal discovery rules." However, Bums arguably reaches the wrong result. Rather than dismiss the claim, a judge should ordinarily act as a "surrogate client"? and discharge the neglectful attorney. Rarely should a court refuse certification or dismiss a claim because of the misconduct of counsel. 10

§16.3 lModel Rule 1.1. 2Macey and Miller, The Plaintiffs' Attorney's Role in Class Action and Derivative Litigation: Economic Analysis and Recommendations for Reform, 58 U. Chi. L. Rev. 1, 98-99 (1991). 3Attorney Investment, supra §16.1 note I, at 303 (notice costs may exceed $500,000). 4Federal Judicial Center, Manual for Complex Litigation 221 (1995 ed.) [hereinafter Manual for Complex Litigation]; Macey and Miller, supra note 2, at 90 (courts should be concerned with the financial resources of the attorney). -'See discussion of referrals in Chapter I. 6Manual for Complex Litigation, supra note 4, at 223 (the filing tolls the statute of limitations for all members of the class). 725 Fed. R. Servo 2d (Callaghan) 998 (N.D. Ga. 1977). 8Id. at 1002. Compare the discussion of the elements of competence in Chapter I. gIn re Wells Fargo Sec. Litig., 157 F.R.D. 467, 468 (N.D. Cal. 1994). lOMacey and Miller, supra note 2, at 95-96; see discussion in §16.11.

542


§16.4

§16.4.1

Solicitation and Contacts with Class Mernbens

§16.4.1

Prelitigation Contacts

In large-scale, small-claim cases, I the attorney "find[sJ the claim first and the client second. "2 In Garr v. Us. Healthcare.i for example, the lawyer maintained a file of stockholders available to become plaintiffs in securities litigation. On the morning of November 4, 1992, the lawyer read a Wall StreetJournal article describing potential insider trading in U.S. Healthcare. He quickly researched the matter, consulted his files, found a "client" in Florida willing to serve as plaintiff, and prepared and filed a class action suit in federal court-all before the end of the business day? Under the ethical codes, an attorney may not solicit in person an individual with whom the attorney has no prior professional or family relationship "when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain."5 In large-scale, small-claim cases, however, solicitation may be constitutionally protected under the first amendment because attorneys act as private attorneys general by finding and bringing actions that would not otherwise be brought. 6 The constitutional rationale does not apply in cases where the claims are apparent and large enough to induce potential claimants to seek counsel. 7 For instance, if a commercial airliner crashes, the families §16.4.1 'The term describes shareholder suits, consumer complaints, and the like-cases in which the individual claims are small and widespread. Macey and Miller, supra §16.3 note 2, at 69. 2Coffee, Understanding the Plaintiff's Attorney: The Implications of Economic Theory for Private Enforcement of Law through Class and Derivative Actions, 86 Colurn. L. Rev. 669, 679 (1986). 322 F.3d 1274 (3d Cir. I 994)(discussed in Chapter 2 on the issue of compliance with Federal Rule II). 4Id. at 1275. The suit was dismissed, but no sanctions were imposed because the court concluded the attorney had adequately investigated the matter. See discussion in Chapter 2. 5Model Rule 7.3; DR 2-103(A). 6Macey and Miller, supra §16.3 note 2, at 101. In re Primus, 436 U.S. 412, 98 S. Ct. 1893,56 L. Ed. 2d 417 (1978) held that solicitation by a public interest group (the ACLU) was constitutionally protected. 7Note, Equity and Accountability in the Reform of Settlement Procedures in Mass Tort Cases: The Ethical Duty to Consult, I Geo. J. Legal Ethics 817 (1988) [hereinafter Ethical Duty to Consult].

543

§16.4.1

Special Probderns

in Class Actions

of the victims do not need to be told they may have a possible cause of action. In such cases, bar associations and courts will aggressively pursue attorneys who violate solicitation rules." In an early opinion, the ABA acknowledged the need for solicitation in large-scale, small-claim cases, albeit in an opinion that assumed that the original client was not solicited. Your original client, a layman, approached your firm to represent him as plaintiff in a civil action against certain individuals convicted of mail fraud for recovery of money he allegedly lost to them as a result of the fraud. Because the initial outlay of money to purchase a copy of the transcript of the criminal trial and to contact and interview witnesses who are scattered across the country would put a severe burden on your client's personal finances, your client proposed seeking out others who had lost money as a result of the mail fraud and soliciting their joinder and financial assistance in the proposed litigation. This he did by mailing to each member of the potential class arequest for an immediate financial contribution of $50 and for a limited power of attorney authorizing your client on their behalf to retain your services and assign to you a contingent fee of 35 percent .... Your client did the actual mailing and bore the entire expense of the solicitation; your only participation in the matter was that you drafted the limited power of attorney which your client enclosed for the potential plaintiffs' signature. As of the date of your letter you had received some $2,250 from approximately forty-five members of the class. You have not been in touch with any of these potential clients except to acknowledge receipt of their money and to answer their inquiries of you about various aspects of the proposed action."

This opinion fleshed out the cryptic "class action" section of the Model Code, which reads, "If success in asserting rights or defenses of his client in litigation in the nature of a class action is dependent upon the joinder of others, a lawyer may accept, but shall not seek, employment from those contacted for the purpose of obtaining their joinder." 10 By endorsing the technique of "solicitation by client," the ABA opened the 8Florida Bar v. Went forIt, Inc., 115 S. Ct. 2371, 132 L. Ed. 2d 541 (1995) (upholding Florida's rule prohibiting mail solicitation of victims for 30 days after an accident); Ohralick v. Ohio State Bar, 436 U.S. 447, 98 S. Ct. 1925, 56 L. Ed. 2d 444 (1978) (upholding discipline of outrageous ambulance chaser). 9ABA Informal Op. 1280 (1973). IODR 2-104(A)(5). There is no counterpart to this provision in the Model Rules.

544

Special Probderns in Class Actions door for organizational committees from persons similarly situated. 11

§16.1:.2

§16.4.2

to solicit funds and participation

Contacts by Plaintiff's Counsel after Filing and before Certification

Although filing creates an "incipient fiduciary relationship" with the putative members of the class,' filing does not transform the potential class members into "clients." While the plaintiff's attorney may legitimately inform potential class members of the suit (by written notice or informational meetings), the general ban on in-person solicitation continues to apply. In Gulf Oil Co. v. Bernard) 2 the trial court entered an order, based on the original Manual for Complex Litigation, barring communications with class members." The Court of Appeals for the Fifth Circuit reversed the district court, holding that the trial judge's order was an unconstitutional prior restraint of protected expression. In turn, the United States Supreme Court affirmed the reversal, but on nonconstitutional grounds. While noting that Federal Rule 23(d) gives a trial judge "broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties,"4 the Court reasoned that an order limiting communications should be based on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties ... to insure that the court is furthering, rather than hindering, the policies embodied in the Federal Rules of Civil Procedure, especially Rule 23.5 The Court added:

Newberg and A. Conte, Newberg on Class Actions §15.06 (3d ed. 1992). 'Manual for Complex Litigation, supra §16.3 note 4, at 233. 2452 U.S. 89,101 S. Ct. 2193, 68 L. Ed. 2d 693 (1981). 3Id. at 93-96, 10 1 S. Ct at 2196-2198. 4Id. at 100, 101 S. Ct. at 2200. SId. at 10 1-102, 10 1 S. Ct. at 2200-220 I. llH.

§16.4.2

545

§16.4.2


In the present case, we are faced with the unquestionable assertion by respondents that the order created at least potential difficulties for them as they sought to vindicate the legal rights of a class of employees. The order interfered with their efforts to inform potential class members of the existence of this lawsuit, and may have been particularly injuriousnot only to respondents but to the class as a whole-because the employees at that time were being pressed to decide whether to accept a back pay offer from Gulf that required them to sign a full release of all liability for discriminatory acts. In addition, the order made it more difficult for respondents, as the class representatives, to obtain information about the merits of the case from the person they sought to represent. ... We recognize the possibility of abuses in class-action litigation, and agree with petitioners that such abuses may implicate communications with potential class members. But the mere possibility of abuses does not justify routine adoption of a communications ban that interferes with the formation of a class or the prosecution of a class action in accordance with the Rules. There certainly is no justification for adopting verbatim the form of order recommended by the Manual for Complex Litigation, in the absence of a clear record and specific findings of need. Other, less burdensome remedies may be appropriate. Indeed, in many cases there will be no problem requiring remedies at all.6

Gulf Oil does not distinguish between written notices and informational meetings,' perhaps because no constitutional distinction was drawn at the time between mail and personal solicitation." Truthful communication by mail or written notice is now constitutionally protected.? In addition, the first amendment is implicated when in-person contacts provide essential information for the prosecution of claims furthering the public interest. 10 In Gulf Oil, the Court construed Federal Rule 23(d) to require trial courts to make specific findings to justify orders restraining the parties from contacting putative class members. The case does not, however, approve solicitation that would not have been permissible 6Id. at 101, 104, 101 S. Ct. at 2200, 2202. "The activity that triggered the restraining order was an informational meeting in which the plaintiff's attorney recommended that putative class members refuse the defendant's offers of settlement. 452 US. at 93, 101 S. Ct at 2196. 8Shapero v. Kentucky Bar Association, 486 US. 466, 108 S. Ct. 1916, 100 L. Ed. 2d 475 (1988), held that targeted mail solicitation is akin to advertising and entitled to first amendment protection. 9486 US. 466, 108 S. Ct 1916, 100 L. Ed. 2d 475. lOInre Primus, 436 US. 412, 98 S. Ct. 1893, 56 L. Ed. 2d 417 (1978).

546


§16.4.3

before filing. The opinion should not be read as allowing an attorney to file a class action in a mass disaster and to use the filing as an excuse to personally solicit potential class members. Gulf Oil acknowledges the potential for abuse and suggests the filing of "copies of non-privileged communications with the court" 11as a valid prophylactic measure. The current Manual for Complex Litigation suggests that judges "admonish counsel, early in the proceeding, about the importance of fairness and accuracy in communications with class members and make clear that misrepresentations or other misconduct in dealing with the class would impair the fairness and adequacy of representation."12 This suggestion is a polite way of saying that the judge should disqualify any lawyer who misrepresents matters to potential class members. §16.1:.3

Contacts by Defense Counsel after Filing and before Certification

While the United States Supreme Court opinion in Gulf Oil v. Bernardi prevents a court from imposing a no-contact order on class counsel absent specific findings of abuse, the case does not directly address the propriety of orders restricting defense counsel's contacts with class members. Plaintiffs' counsel may desire an order restricting her opponent's contacts with class members to prevent the defendant from buying off potential class members. By purchasing individual claims before certification, the defense might be able to cause enough "optouts" to reduce the class size to the point where joinder of the remaining members is practicable. Model Rule 4.2 and DR 7-104 of the Code provide that a lawyer shall not "communicate or cause another to communicate on the subject of the representation with a person" he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other person or is authorized by law to do so." Are 11452U.S. at 104 n.20, 10 1 S. Ct at 2202 n. 20. 12Manual for Complex Litigation, supra §16.3 note 4, at 233. §16.4.3 1452 U.S. 89,101 S. Ct 2193, 68 L. Ed. 2d 693 (1981). 2Prior to 1995, Model Rule 4.2 read "[represented] party." In 1995, the ABA changed "party" to "person" to make it clear that the no-contact rule applies, even if there is no pending litigation. See discussion in Chapter 5.

547

§16.4.3

Special Pr'oblerns in Class Actions

the putative members of the class "represented" by plaintiff's counsel within the intendment of these provisions? Logically, the answer should be "no," since the purpose of the ethical rules is to protect attorneyclient relationships. Putative class members have not agreed to be represented by plaintiff's counsel; they may not even know of the filing of the complaint. There is no attorney-client relationship to protect. The current Manual for Complex Litigation says that "[ d] efendants ordinarily are not precluded from communications with putative class members, including discussions of settlement offers with individual class members before certification."3 On the other hand, a court may enter a protective order if it appears that the defendant might aggressively campaign to defeat the class action device." Whatever order is entered should be based on specific findings and should apply to both sides. For example, it would be unfair to allow the plaintiff to conduct informational meetings, while prohibiting the defendant from holding similar meetings. If the court issues a protective order, it must be obeyed. Kleiner v. First National Bank qf Atlanta' was an action against a bank for misrepresentation of interest rates. The court certified the class and issued an order limiting the number of class members who could be deposed. In addition, the court took under advisement the question of whether the bank should be permitted to make unsupervised contacts with class members. While the question of unsupervised contacts was pending, the bank solicited opt-outs from members of the class by telephone. This was apparently done on the advice of counsel, who opined that such conduct was permissible under the Fifth Circuit opinion in Gulf Oil.6 As a result, the bank obtained opt-outs of over 90 percent of the class members." The trial judge responded by holding defense counsel in contempt, citing Model Rules 4.2 and 8.4(d).8 Although this citation was later 3Manual for Complex Litigation, supra §16.3 note 4, at 233; Newberg and Conte, supra §16.4.1 note II, at §15.14. 4Newberg and Conte, supra §16.4.1 note 11, §15.14 ('1\ defendant may attempt to threaten potential members with legal, economic or political sanctions if they join the class.... These contacts constitute a great abuse of the class action and a court may properly enjoin such communications."). 5751 F.2d 1193 (11th Cir. 1985). 6Bernard v. Gulf Oil Co., 619 F.2d 459 (5th Cir. 1980). 7751 F.2d at 1198. BId.

548

Special Probderns in Class Actions

§16.4.5

vacated, the court also imposed a $50,000 fine on defense counsel and her law firm, assessed fees and costs associated with class notice and the discipline proceedings, and disqualified counsel from further participation in the action.? The Eleventh Circuit affirmed, ruling that the decision to take the question of informal contacts under advisement was the equivalent of an order barring opt-out solicitations until further notice. 10

§16.4.4

Contacts after Certification but before Expiration of the Exclusion Period

In Federal Rule 23(b)(3) actions, potential class members must be notified of the pendency of the class action and their right to opt out of the class. As Newberg notes, "[DJuring this exclusion period, the status of class members is particularly amorphous because the putative class may contain members who will reject the remedy." 1 Certification, however, should be deemed to create an attorney-client relationship between plaintiff's counsel and the class, subject to the right of each class member to "fire" plaintiff's counsel by opting out or hiring separate counsel. 2 Any unapproved contacts by defense counsel therefore are likely to be sanctioned.f It does not follow, however, that plaintiff's counsel may freely contact members of the class during this period. To avoid confusion, the court may legitimately restrict communications between plaintiff's counsel and the members of the class to notices that have been approved by the court."

§16.4.5

Contacts after the Exclusion Period Is Closed

After the exclusion period, the class members have an implied attorney-client relationship with plaintiff's lawyer. The defendant's 9Id. at 1199. IOId.at 1200-120 l. §16.4.4 'Newberg and Conte, 2Manual for Complex Litigation, 3Kleiner v. First Nat!. Bank, 751 +Manual for Complex Litigation, tification notice).

supra §16.4.1 note 11, §15.15. supra §16.3 note 4, at 234. F.2d 1193 (II th Cir. 1988). supra § 16.3 note 4, at 224-225 (describing the cer-

549

§16.4.5


lawyer may not contact class members. Plaintiff's counsel, however, not only may, but also should communicate with the class members to the extent practicable. 1

§16.5

Relationship Between Plaintiff's Counsel and the Class Representatives

One of the prerequisites to maintaining a class action is that "the representative party [establish that heJ will fairly and adequately protect the interests of the class."! Indeed, this threshold requirement of "adequate representation" has a constitutional dimension because a judgment in a class action will bind the class where the class has been adequately represented.?

The ostensible purpose of requiring an active and able class representative is to monitor the performance of class counsel. 3 The reality of the matter, however, is that in most class actions the representative is nothing more than an admission ticket for class counsel. 4 Class action attorneys are entrepreneurs who find and invest in a cause of action with the expectation of financial return. "[OJur legal system has long accepted, if somewhat uneasily, the concept of the plaintiff's attorney as an entrepreneur who performs the socially useful function of deterring undesirable conduct."> Consequently, the representative is often a figurehead, without incentive or opportunity to actively participate. 6 In the large-scale, small-claim case, it is impossible for a claimant to be both typical and an adequate representative-in the sense of actively monitoring class counsel. A claimant who takes an active role is atypical; a claimant who is typical, i.e., disinterested, would not adequately represent the class.7 §16.4.5 'Newberg and Conte, supra§16.4.1 note 11,§15.16. §16.5 IFed. R. Civ. P. 23(a)(4). 2Hansberry v. Lee, 311 U.S. 32,40-43,61 S. Ct. 115, 117-119,85 L. Ed. 22 (1940); Laskey v. International Union (UAW), 638 F.2d 954, 956 (6th Cir. 1981). 3Macey and Miller, supra §16.3 note 2, at 92. 4Coffee, supra §16.4.1 note 2, at 680-681. 'Id at 678. 6The exception is the claim for personal injury or death where the claimants have the incentive to actively participate. 7Macey and Miller, supra §16.3 note 2, at 84-85.

550

Special Problem.s in Class Actions

§16.6

Unlike a private litigant, the class representative cannot fire the class lawyer or accept or reject a settlement offer," The Manual for Complex Litigation, however, stresses counsel's obligation to consult with the class representatives and inform the court of any serious disagreements between counsel and representatives." This presupposes that the class representatives will occupy an active advisory position in the litigation-which is probably not the case in most class actions. There is clearly a need for a mechanism to represent the views of the class. In some cases, the named representatives may fulfill this role. Commentators have made other suggestions. One suggestion is a "consultation unit," appointed by the court, which would report to the judge and represent the class in meetings with counsel. 10 While lacking decision-making power, the unit would have considerable influence. Another approach to class representation is the appointment of a guardian ad litem, selected by the court and reporting to the court. 11 Whatever mechanism is chosen, the primary qualifications of those representing the class should be time, ability, and interest. Unless there is an alternate mechanism available-such as a consultation unit-courts should carefully examine the qualifications and interest of the class representatives put forward by the plaintiff's counsel. 12

§16.6

Financing the Litigation

Disciplinary Rule 5-1 03(B) states that an attorney may advance costs so long as the client remains ultimately liable for repayment. Model Rule BAttorney Investment, supra §16.1 note I, at 315. 9Manual for Complex Litigation, supra §16.3 note 4, at 241-243. IOAttorney Investment, supra §16.1 note I, at 327; Ethical Duty to Consult, supra §16.4.1 note 7, at 855. IIMacey and Miller, supra § 16.3 note 2, at 47-48; Attorney Investment, supra §16.1 note I, at 359. 12See Edgington v. R. G. Dickinson and Co., 139 F.R.D. 183, 195-196 (D. Kan. 1991) (Class certification was denied where the health and age of class representatives undermined their ability to represent the class adequately. "[T[his court does not read Rule 23's requirement of an adequate class representative as being met simply by hiring competent counsel. ... Rule 23 contemplates that the class representative will be in a position at all times to act in the best interest of the class particularly if that means being able to participate in those critical strategy decisions made at trial.") But see Macey and Miller, supra § 16.3 note 2, at 93 (contemptuous of cases in which certification was denied because of the representatives' lack of intelligence).

551

§16.6

Special Problern.s in Class Actions

1.8(e) provides that an attorney may advance costs, with repayment contingent on the outcome. Thus, in Code states, but not in Model Rules states, it is theoretically unethical for an attorney to finance a class action. The reality, of course, is that plaintiffs' attorneys finance almost all class actions, and the repayment of expenses is always contingent on a settlement or award. 1 While there are cases denying certification because the class representatives were unwilling to assume ultimate responsibility for costs," the better view is that judicial inquiry into the financial arrangements between counsel and representatives is inappropriate." After all, no rational claimant in a large-scale, small-claim case would accept personal responsibility for costs that could greatly exceed any recovery the claimant might receive. Unless the repayment requirement is ignored, large-scale, small-claim class actions cannot be brought in Code states." Increasingly, judges want class action attorneys to not only finance the litigation, but also cap the costs that will be repaid from the settlement or judgment. In the case of In re Oracle Securities Litigation,5 the winning "bid" provided that the firm was entitled to reimbursement only up to $325,000. Expenses over that amount would be absorbed by the

§16.6 'Macey and Miller, supra §16.3 note 2, at 98. 2In re Mid-Atlantic Toyota Antitrust Litig., 93 F.R.D. 485 (D. Md. 1982); Klusman v. Bucks County Ct. of Common Pleas, 128 Pa. Commw. 616, 564 A.2d 526 (1989). 3Manual for Complex Litigation, supra §16.3 note 4, §30.12, observes that inquiries into the financial arrangements between class counsel and class representatives are inappropriate in Model Rules jurisdictions. In this regard, as in so many others (such as advertising), the lawyer codes appear to have turned full circle: Michael Stoner hired young Henry Clay, in 180 I, to "prosecute a claim ... to five hundred acres of Land." Clay would pay all the costs; if he won, he was to receive one fourth of the winnings. L. Friedman, A History of American Law 308 (1985 ) (citing I The Papers of Henry Clay 59-60 (L. Hopkins ed., 1959)). In Rand v. Monsanto, 926 F.2d 596 (7th Cir. 1991), the court noted the adoption of the Model Rule in other jurisdictions and refused to approve the use of DR 5-1 03(B) as a basis for denial of class certification. See also County of Suffolk v. Long Island Lighting Co., 710 F. Supp. 1407 (S.D.N.Y 1989) (citing, inter alia, Underwood, Legal Ethics and Class Actions: Problems, Tactics and Judicial Responses, 71 Ky. LJ. 787 (1983)). "Attorney Investment, supra §16.1 note I, at 304. 5136 F.R.D. 639 (N.D. Cal. 1991). See Note, Setting Class Action Attorneys' Fees: Reform Efforts Raise Ethical Concerns, 6 Geo.J. Legal Ethics 1161 (1993) [hereinafter Setting Class Action Attorneys' Fees]. See discussion in §16.8.

552


§16.7

law firm. Such an arrangement arguably conflicts with Model Rule 1.8(e),which allows costs to be advanced contingent on the outcome of the case. The implication of Model Rule 1.8(e)is that it is unethical for an attorney to advance costs that are not to be repaid in full from the settlement or verdict." Yet such an arrangement reflects the reality of attorney control and investment and protects the class better than an arrangement that siphons all expenses off the top. The primary ethical issue for class counsel is whether the available resources are sufficient to adequately finance the litigation. An attorney who lacks necessary resources may harm the interests of the class.7 Adequate financing of the litigation is a matter of adequate representation of the class and is not a matter of proper concern to defense counsel. Any inquiry into financing should be at the instigation of the class or the court and should, if requested, take place in camera. 8

§16.7

Fees and Selection of Counsel

In a successful class action suit, the lawyers will receive fees that are much greater than the awards to members of the class. A number of commentators have pointed out that the lodestar method of calculating the fee (reasonable hours times a reasonable rate) gives class action lawyers incentive to agree with defense lawyers on a settlement with an inadequate award to the class, but a high fee to plaintiff's lawyers.1 The lodestar method is seen by some lawyers as a license to "run the meter," since there is no downside once it is apparent that the case has settlement value. If the defendant is willing to pay only a certain amount, each dollar that is paid to lawyers decreases the amount available to class members.

6Setting Class Action Attorneys' Fees, supra note 5, at 1177. iP' Schuck, Agent Orange on Trial (1986) (describing the underfinanced and disorganized committee that initially managed the massive class action seeking damages for military men and women exposed to dioxin in Vietnam). BMacey and Miller, supra §I6.3 note 2, at 90-91. §16.7 'Attorney Investment, supra §16.1 note I, at 308; Coffee, supra §16.4.1 note 2, at 714.

553

§16.7


Some courts believe that the better way to award fees is as a percentage of the award or settlement.i Several courts, in fact, have "sold" the right to act as lead counsel to the firm that presented the best sealed bid.' The case of In re Wells Fargo Securities Litigation4 is illustrative. The court solicited sealed bids from all firms interested in being designated class counsel in a securities action on behalf of the purchasers of Wells Fargo stock. Interested firms were directed to describe their qualifications and "bid the project." The bid proposal asked the firms whether they had malpractice insurance and whether they would post a bond or other security toward complete performance of their duties." Three bids were received. All described fees as a declining percentage of recovery. The opinion in Wells Fargo contains a careful analysis of the bids-which fee structure would be best for the class, which firm had the best credentials, and which firm promised the best performance. The court awarded the lead counsel role to the firm that promised a performance bond, and the court made a $5 million performance bond a condition of the award." The Wells Fargo court said that it must act as a "surrogate client" for the class and choose the firm that a sophisticated client would have hired to prosecute the claim. This makes sense in large-scale, smallclaim cases because there is no client to negotiate the fee. Even in mass disaster cases, with large claims and interested claimants, it makes sense to put the responsibility for selecting counsel on the court. If the selection of class counsel is left to the lawyers, the result is likely to be an inefficient and political "management committee," more interested in fees than in prosecuting the claim. 7

2Coffee, supra §16.4.1 note 2, at 724-725. 3In re Oracle Sec. Litig., 136 ER.D. 639 (N.D. Cal. 1991). There are two earlier published opinions: 131 ER.D. 688 (N.D. Cal. 1990) and 132 ER.D. 538 (N.D. Cal. 1990). See discussion of this litigation in Setting Class Action Attorneys' Fees, supra §16.6 note 5, at 1161. 4157 ER.D. 467 (N.D. Cal. 1994). 5Id. at 468. 6Id. at 477. 7 Attorney Investment, supra § 16.1 note 1, at 311 (describing the bickering within the management committee in the Agent Orange case).

554


§16.8

§16.8.1

Conflicts

§16.8.1

The Lawyer's Personal Interests

Discussed in this section are three kinds of conflicts between clients' interests and lawyers' personal interests that are present in class action litigation. They are (1) conflicts created by fee arrangements, (2) conflicts created by lawyers' public policy goals, and (3) conflicts created when the lawyer serves as both class representative and class counsel. As noted in the preceding section, the lawyer's interest in getting the biggest fee possible from the defendant can conflict with the interests of the class. In the Agent Orange case, 1 the Second Circuit perceived a conflict in a fee arrangement between counsel. In that case, six "attorney-investors" rescued the original plaintiffs' committee with a cash infusion of $200,000 apiece. The agreement called for each investor to recover threefold ($600,000) out of the fees awarded. The judge awarded fees to the various class attorneys based on work and performance. This award created a pool, which the attorneys then divided according to the agreement. The agreement had not been revealed to the court at the time of settlement. Dividing the pool pursuant to the agreement resulted in the investor-attorneys being paid in full and the noninvestor-attorneys taking what was left.? The Second Circuit held that the agreement created a conflict with the class, since the investorattorneys, who were a majority of the management committee, had an incentive to settle as soon as they thought the judge would award fees (by the lodestar method) of at least $3,600,000.3 The court voided the agreement and reinstated the fees awarded by the district judge. While the fee arrangement arguably did not adversely affect the class's interest," the arrangement should certainly have been disclosed to the court. As noted throughout this chapter, courts must protect the class. Judges should not assume that class counsel always act in the best interest of the class.' §16.8.1 IIn re Agent Orange Prod. Liab. Litig., 818 F.2d 216 (2d Cir. 1987). 2Attorney Investment, supra § 16.1 note 1, at 311-313 (the result was that the lead attorney was compensated at a rate of $55 per hour, while a "passive investor attorney" received more than $1,700 per hour). 3818 F.2d at 224, 225-226. "Macey and Miller, supra §16.3 note 2, at 54-55. "Manual for Complex Litigation, supra § 16.3 note 4, at 239.

555

§16.8.1

Special Pr oblerns in Class Actions

Another kind of conflict may occur when the lawyer seeks to advance a social cause. There may be a conflict between the causeperhaps school desegregations-s-and the wishes of the group that the lawyer represents. The lawyer, who believes in the cause, may not know or care how the class would vote if a plebiscite were held. Such a lawyer views herself as a social engineer, rather than a representative of clients. For example, in 1974 a number of parents and guardians brought suit in behalf of all present and future residents of Pennsylvania's Pennhurst facility for the retarded. Class counsel took the position that his obligations ran solely to the residents, and that their interests dictated Pennhurst's closure and replacement with community facilities. Accordingly, counsel made little effort to expose or espouse the views of parents and guardians favoring institutionalization .... After the district judge ordered removal of Pennhurst residents to community facilities, a systematic survey of parents and guardians revealed only 19% of the respondents favored deinstitutionalization.?

Requiring communication with the class-perhaps with a consultation unit selected by the court-would presumably result in making the views of the class known to the court. If the class members' goals appeared to conflict with the goals of class counsel, the judge might replace counsel, create separate classes, or even decertify the class. Yet another kind of personal conflict is present if the lawyer or a relative of the lawyer is also a class member. An attorney whose fees will depend upon the outcome of the case and who is also a class member cannot serve the interests of the class with the same unswerving devotion as an attorney who has no interest other than representing the class members."

However, this conflict is theoretical, rather than actual. It is hard to imagine a scenario in which a lawyer's representation of a class would 6Bell, Serving Two Masters: Integration Ideals and Client Interests in School Desegregation Litigation, 85 Yale LJ. 470 (1976). 7D. Rhode and D. Luban, Legal Ethics 554 (1995) (excerpting from Rhode, Class Conflicts in Class Actions, 83 Stan. L. Rev. 1183 (1982). 8Zylstra v. Safeway Stores, Inc., 578 F.2d 102, 104 (5th Cir. 1978); accord Susman v. Lincoln Am. Corp., 561 F.2d 86, 94-95 (7th Cir. 1977); Kramer v. Scientific Control Corp., 534 F.2d 1085, 1086 (3d Cir. 1976); Turoff V. May Co., 531 F.2d 1357, 1360 (6th Cir. 1976).

556


§16.8.1

be adversely affected by membership in the class. This is because class counsel "owns" a piece of the claim, just as do class members. It is a different story, however, if the lawyer names himself, a member of the firm, or a relative as a class representative. As a named representative, the lawyer may be deposed, which triggers the advocatewitness problem." Furthermore, in the class action model, the named representatives should be independent of the lawyer and monitor the lawyer's performance. While this may be unrealistic, given the lawyer's "controlling interest" in the litigation, 10 the conventional wisdom is that class counsel may not also act as class representative. In this situation, rather than refuse certification, the court should require the lawyer to choose between the roles of counsel and representative. In [many] cases, something is wrong with the lawyer, not the class. Except for the class counsel-class representative cases in which the lawyer and class cannot be separated, the court should disqualify counsel rather than [refuse to certify or] decertify the class.... By contrast [a denial of certification or] decertification should be used as a remedy when there is something wrong with the class ... [such as when] the named plaintiff's suit [is] intensely personal [giving] the plaintiff a higher claim on class counsel's loyalties. I I

Assuming that disqualification will not "deprive the class of [irreplaceable expertise] ... developed during [the pendency of the litigation]," 12 substitution of counsel is preferable to denial of class certification. 13 Finally, many instances in which the stated reason for denying class status was that "counsel [could not] be separated from the class" actually involved situations that might more profitably have been analyzed in terms of the Federal Rule 23 requirements of "typicality" 14 or "superiority." 15 In other words, the ethics questions should have been of 9Bachman v. Perschuck, 437 F. Supp. 973 (D.D.C. 1977); see discussion in Chapter 4. IOMacey and Miller, supra §16.3 note 2, at 7l. IIDevelopments in the Law: Conflicts of Interest, 94 Harv. L. Rev. 1454-1455 (1981). 12Bachman, 437 F. Supp. 973. 13ZIystra v. Safeway Stores, 578 F.2d 102, 105 (5th Cir. 1978); Kramer v. Scientific Control Corp., 534 F2d 1085,1092 (3d Cir. 1976); Bachman, 437 F Supp. 973. ItFed. R. Civ. P 23(a)(3). 15Fed.R. Civ. P. 23(b)(3).

557

§16.8.1


in Garonsik v. Shearson Hayden Stone) to "enunciate a belief that there are no circumstances in which it would be appropriate for an attorney to represent a class ... both as a member thereof and as counsel." The court did not have to reach that question because the attorney's claim was not "typical" of the class. 17 secondary

significance.

For example,

Inc., 16 the court deemed it unnecessary

§16.8.2

Conflicts between the Lawyer and the Class Representatives

In Pettway v. American Cast Iron Pipe Co., I an employment discrimination suit, the named plaintiffs and several representatives wanted to appeal the trial court's decision denying back pay to a portion of the class. Class counsel did not want to appeal. The disagreement ultimately came to the attention of the appellate court. The court of appeals articulated a four-factor test for such cases: (1) the adequacy of representation of the class by the named plaintiffs, including conflicts of interest; (2) the apparent interests of absent class members; (3) the adequacy of representation by class counsel, including conflicts of interest; and (4) the reasonableness of class counsel's decision, including the likelihood of success on the merits." Applying this test, the court of appeals held that the appeal should be allowed. The Manual for Complex Litigation provides that serious disagreements with class representatives should be brought to the court's attention." This provision assumes, of course, that the counsel has communicated with the class representatives, and that the class representatives are actively monitoring the litigation. The court should appoint a guardian ad litem or a consultation unit when representatives fail to discharge this function. As in other aspects of class action litigation, the judge must take an active role, with a hearing and specific findings if necessary.

16574F2d 1220 (5th Cir. 1978). 17Id.at 1221 n.!. §16.8.2 1576 F2d 1157 (5th Cir. 1978); see Macey and Miller, supra §16.3 note 2, at 43. 2576 F.2d at 1178. 3Manual for Complex Litigation, supra §16.3 note 4, at 242.

558


§16.8.3

§16.8.3

Conflicts within the Class

As Professor Rhode has observed, interests within the class often diverge. In institutional reform cases, there may be a rough consensus that, for example, the schools are bad, but no consensus on how to fix them. 1 When a fund is generated by the litigation, class members may disagree over its distribution. In the Agent Orange case, for instance, the settlement made available $150 million for distribution to eligible claimants. The judge enlarged the class to include all persons who could show any exposure to dioxin and any health condition related to dioxin, regardless of the seriousness of the condition, the length of exposure, or other conditions affecting causation. By divorcing the recovery from proof of causation, the judge greatly increased the size of the class, while reducing and equalizing the size of the awards." Class members with mild conditions and weak proof of causation were benefitted by this decision at the expense of members with serious conditions and strong proof of causation. Professor Rhode describes two approaches to resolving conflicts within a class: "pluralist" and "majoritarian."3 The pluralist approach calls for division of the class into appropriate constituencies with separate representation." The majoritarian approach calls for direct participation through plebiscites and public hearings." There are difficulties with both approaches. The pluralist approach may result in contentious subclasses, increase costs, and make resolution impossible." The majoritarian approach unrealistically assumes that most class members can and will be informed and will take an active part in the litigation. 7 As an ethical matter, counsel should be conservative in describing the class, attempt to communicate with a truly representative sample of the class, and bring any serious disagreements within the class to the court's attention.

§16.8.3 lRhode, Class Conflicts in Class Actions, 34 Stan. L. Rev. 1183, 1189 (1982). 2Schuck, supra §16.6 note 7, at 220. 3Rhode, supra note I, at 1221. 4Id. SId. at 1232. 6Id. at 1223-1225. 7Id. at 1235-1237.

559

§16.8.4

§16.8.4


Conflicts Manufactured by Defense Counsel

In Evans v. Jiff D, 1 the United States Supreme Court ruled that a trial judge could properly approve a class settlement conditioned on the waiver of statutory attorney fees by the plaintiffs' public interest law firm. The Court observed that the plaintiffs' firm "had no ethical obligation" to seek statutory fees, and that the result obtained by way of settlement was probably more favorable than that which could have been obtained at trial. This opinion was followed by an Eleventh Circuit opinion imposing Federal Rule 11 sanctions on class counsel who sought a statutory fee award without apprising the trial court of a similar settlement waiver. 2 These opinions are in conflict with earlier state bar opinions holding that it is unethical for defense counsel to propose such settlements. 3 At a minimum, Evans v.Jiff D undercuts some of the public policy arguments advanced in these earlier state bar opinions. May lawyers protect themselves through "contracts" with the class that protect the lawyers' interest in an adequate fee? The Restatement of the Law Governing Lawyers suggests that, "[wJhere necessary and appropriate, an agreement restricting the right of the class representative to bargain away the right of the lawyer to compensation should be judicially approved in certifying the action as a class action.?" This comment, however, overstates the importance and independence of the class representative. As in other matters, the court must act as a surrogate for the class. An attorney who wants protection from Jiff D settlement offers should ask the judge to order at the time of certification that no such offers need be considered. The issue for the judge would then be whether adequate representation of the class's interests can be obtained without assuring the class's lawyer in advance that she may ethically rejectJiff D settlement offers.

§16.8.4 1475 U.S. 717, 106 S. Ct. 1531,89 L. Ed. 2d 747 (1986). 2Blackwell v.Department of Offender Rehabilitation, 807 F.2d 914 (11th Cir. 1987). 3See, e.g., D.C. Op. 147 (1985); New York City Op. 80-94 (1980). 4§206, Comment f (Tentative Draft No.3, 1990).

560

Special Pr oblerns in Class Actions

§16.9

§16.10

Defense Challenges to Certification

Federal Rule 23(a) requires both that the class be so numerous as to make joinder impracticable and that the common questions of law or fact predominate over individual questions. A good faith challenge to certification based on the absence of these factors is appropriate. What is not appropriate, however, is a challenge to the class representatives as not "typical" or not "adequate." As previously noted, defense counsel should not be permitted to challenge the financial arrangement between counsel and the class representatives. Similarly, defense counsel ought not be permitted to challenge certification on the ground that the representatives are inadequate or atypical. These requirements are to protect the class, and the defendant is being sued by the class. It makes no sense to accord the defendant standing to challenge the adequacy of the plaintiff's representation.! Discovery depositions purportedly probing the adequacy of class representatives often are nothing but crass attempts to intimidate those who volunteered or were chosen to represent the class.?For these reasons, inquiries into the adequacy of the class representative should be conducted by the court, not defense counsel. 3

§16.10

Discovery and Delay

It has been said that "nowhere are the rules of discovery more susceptible to abuses and misapplication" than in class action litigation. 1 "The defense lawyer eager to stall and break the will of named plaintiffsand thus the class-is in especially good position to misuse willfully ...

§16.9 I Macey and Miller, supra §16.3 note 2, at 64 (quoting Eggleston v. Chicago Journeymen Plumbers' Local Union, 657 F.2d 890, 895 (7th Cir. 1981) (allowing defendant to police the class representative's adequacy is like "permitting a fox ... to take charge of the hen house")). 2Id. at 65 n.193 (three-day deposition with 600-page transcript). 3See generally Newberg and Conte, supra 16.4.1 note II, §15.30 (many examples of discovery abuse). §16.10 'Oruenberger; Discovery from Class Members: A Fertile Field for Abuse, 4 Litigation 35 (Fall 1977).

561

§16.10


discovery [on the merits, after certification] . . . aimed at [absent class members]."? The threat of discovery from absent class members may coerce opt-outs in so-called spurious class actions." In addition, the delay and expense associated with wide-ranging discovery from class members can undermine the representative plaintiffs' lawsuit by a process of attrition." Securities fraud class actions are the most likely candidates for defense demands for discovery from individual class members, since individual investor reliance and causation may be placed in issue." Out of concern that the "representative" nature of the action and its efficiencies as a litigation vehicle not be subverted by "class" discovery, several courts have denied such discovery on the theory that absent class members are not "parties" to the lawsuit." However, while Federal Rule 23 does not designate absent class members "parties," it also does not say that they are not parties. If discovery is to be restricted, it ought to be restricted because class actions are unlike individual actions and the need for discovery is different from the need in individual actions. 7 Accordingly, the Manual for Complex Litigation and most courts recognize that the decision to allow or disallow discovery from unnamed class members ought to turn on the proponent's need for information, weighed against the competing interests of the class members in remaining "passive":

2Id. 3See Impervious Paint Indus. v. Ashland Oil, 508 F. Supp. 720 (W.D. Ky. 1981); United States v. Trucking Employers, Inc., 72 F.R.D. 101, 104 (D.D.C. 1976). 4Cf Blackie v. Barrack, 524 F.2d 891,907 n.22 (9th Cir. 1975): The district judge may reasonably control discovery to keep the suit within manageable bounds, and to prevent fruitless fishing expeditions with little promise of success .... We think procedures can be found and used which will provide fairness to the defendants and a genuine resolution of disputed issues while obviating the danger of subverting the class action with delaying and harassing tactics. For an account that could be subtitled "Discovery Wars," see Gruenberger, supra note 1, at 53. 5See Fischer v. Wolfinbarger, 55 F.R.D. 129 (W.D. Ky. 1971). 6See, e.g., id. at 132. 7See Commonwealth of Pennsylvania v. Local Union 542, 507 F. Supp. 1146, 1160 (E.D. Pa. 1980) (argument that absent class members are not parties because Fed. R. Civ. P. 23 does not designate them as such is "specious at best").

562


§16.11

The evolving view ... seems to be that the court has the power ... to permit reasonable discovery by way of interrogatories of absent class members when the circumstances of the case justify such action. . . . [The] party seeking such discovery must demonstrate its need for the discovery for purposes of trial of the issues common to the class, that the discovery not be undertaken with the purpose or effect of harassment of absent class members or of altering the membership of the opposing class, and that the interrogatories be restricted to information directly relevant to the issues to be tried ... with respect to the class action aspects of the case.... Discovery is not to be allowed as a matter qf course ... but only when the court is satisfied that the required showing has been made"

By placing the burden of justifying discovery from unnamed absent class members on the proponent of the discovery, and by allowing only the least intrusive and least expensive discovery device to be used, courts have exercised their inherent power to regulate the scope and methods of discovery.That power is codified in Rule 26 of the Federal Rules of Civil Procedure."

§ 16.11 Judicial Responses to Specific Instances of Misconduct Judicial reactions to ethical violations in the class action context have been mixed. Older decisions suggest that violations justify the denial of class status.' In contrast, many well-reasoned decisions recognize that denying class certification because of ethical misconduct is an inappropriate remedy. 2

8United States v. Trucking Employers, Inc., 72 F.R.D. 10 I, 104 (D.D.C. 1976) (emphasis supplied). See also Dellums v. Powell, 566 F.2d 167, 187 (D.C. Cir. 1977) (collecting cases); Manual for Complex Litigation, supra §16.3 note 4, at 231-232. 9See discussion in Chapter 6. §16.11 IE.g., In re Mid-Atlantic Toyota Antitrust Litig., 93 F.R.D. 485 (D. Md. 1982); Parker v. George Thompson Ford, Inc., 83 F.R.D. 378 (N.D. Ga. 1979); Stavrides v. Mellon Natl. Bank and Trust Co., 60 F.R.D. 634 (WD. Pa. 1973). See also Taub v. Glickman, 14 Fed. R. Servo2d (Callaghan) 847 (S.D.NY 1970) (noting that counsel's solicitation of Korn could not be "passively ignored" in the case before the court). 2See In re Nissan Motor Corp. Antitrust Litigation, 22 Fed. R. Servo2d (Callaghan) 63,66 (S.D. Fla. 1975), where, after noting that any incidental solicitation could not have

563

§16.11


If the courts are inclined to deny class status on account of perceived ethical misconduct, the defense bar can hardly be faulted for pursuing such issues tenaciously. However, the "pursuit" may be quite wasteful and the prize, denial of class certification, too draconian. Halverson v. Convenient Food Mart, Inc.,3 is an example of a case in which the appellate court recognized that dismissal is rarely an appropriate remedy for an ethical violation. In Halverson) the owners of 36 retail grocery stores operating as defendant's franchisees brought a class action alleging violations of the antitrust laws. At pretrial conference, defense counsel suggested that the named plaintiffs had been solicited. This suggestion prompted a hearing and dismissal of the case on defendant's motion. The Court of Appeals for the Seventh Circuit reversed. While noting that counsel committed a "slight breach of ethics," the court felt that minor misconduct "should not prejudice the rights of his clients."! The court remarked: Only the most egregious misconduct on the part of plaintiffs' lawyer could ever arguably justify denial of class status. The ordinary remedy is disciplinary action against the lawyer and remedial notice to class members .... On remand the district court should consider plaintiffs' request for class status without regard to the pre-suit communication. If class designation is granted, notice to the class members can remedy whatever misleading elements there may have been in the original letter>

This reasoning is sound. Remedies less drastic than denial of class status should be considered, including intervention of other individual class representatives or organizations" and substitution of counsel. 7 Moreover, with respect to solicitation, the interests of absent class members should be of paramount concern. Except in the most extreme instances of misconduct, the use of corrective notices," disqualification and substiresulted in prejudice warranting denial of class status, the court observed, "[S]ince further discovery into the area could only result in an administrative morass for all parties and for this court, no substantial purpose can be seen for ordering such discovery." 3458 F.2d 927 (7th Cir. 1972). 4Id. at 931. SId. at 932. 6Cf. ABA Informal Op. 1326 (1975); Bergman, Class Action Lawyers: Fools for Clients, 4 Am.]. Trial Advoc. 271 (1980). lCf. In re Mid-Atlantic Toyota Antitrust Litig., 93 F.R.D. 485 (D. Md. 1982). 8HalvIJrson, 458 F.2d 927 (corrective notice is usual remedy).

564


tution of counsel," or referral to disciplinary authorities denying class certification.

§16.11 10

is preferable to

Preventive Ethics Checklist Investigation and Preparation Do not file a class action unless you have class action expertise or associate with someone who does. Investigate the facts and law thoroughly. Have resources available to finance the litigation. Choose independent class representatives who have and will retain an active interest in the litigation. In public interest cases, make a good faith effort to ascertain the views and goals of those potentially affected by the action; do not file an action on behalf of a class that seeks relief not desired by at least a majority of the class.

o

o o o

o

Solicitation Do not personally solicit members of the putative class. Comply with court orders on the form and frequency of communications.

o o

Conflicts In public interest litigation, make a good faith effort to learn what the members of the class want, and strive for those objectives, rather than your own or those of the class representatives. Fully disclose your fee arrangement to the class representatives and the court. Do not compromise the class's interests by accepting an inadequate offer coupled with a handsome fee award. If desired, seek court approval for rejection of any Jiff D. offers. Be sensitive to conflicts within the class, and bring them to the court's attention.

o o o

o o

9In re Nissan Motor Corp. Antitrust Litig., 22 Fed. R. Servo 2d (Callaghan) 63, 66 (S.D. Fla. 1975) ("The better disposition should be to substitute counsel to avoid unduly delaying reaching the merits and prejudicing plaintiffs' rights."). IOLefrakv. Arabian Am. Oil Co., 527 F2d 1136 (2d Cir. 1975).

565

§16.11

Special Probletns in Class Actions

Defense Issues Do not attempt to intimidate class representatives. o Do not personally solicit putative class members. o Comply with court orders on the form and frequency of communications with class members.

o

566

IV Some Final Matters

17 Negotiation and Settlement

§17.1 §17.2

Introduction Comparison of the Code of Professional Responsibility and the Model Rules §17.3 Settlement Authority §17.4 Malpractice in the Settlement Context §17.5 Candor in Negotiations §17.6 Bypassing Counsel §17.7 Dealing with the Recalcitrant Client §17.8 Conflicts in Settlement §17.8.1 Attorney's Personal Interests §17.8.2 Fees with Merits Conflicts §17.8.3 Interests of Multiple Clients §17.8.4 Sealed Settlements §17.9 Ethics and the Structured Settlement §17.10 Threats and Leverage §17.11 Disbursements §17.11.1 To the Client §17.11.2 To Others §17.l1.3 Fee Disputes

569

§17.1

§17.1

Negotiation and Settlement

Introduction

This chapter addresses some common ethical pitfalls that can arise in negotiation and settlement. These include settlement authority, candor in negotiations, the bypassing of counsel, and conflicts. Some related matters are discussed in other chapters. The duty of insurance defense counsel to communicate settlement offers and to recognize conflicts of interest is covered in Chapter 15. "Mary Carter" agreements! are discussed in Chapter 8.

§17.2

of the Code of Professional Responsibility and the Model Rules Corrrpar-isori

The Model Rules and the Code provide similar rules with respect to the lawyer's obligations regarding negotiation and settlement, although the Model Rules are more explicit. For example, Model Rule 1.2(a) clearly states that settlement decisions rest with the client. The Code relegates this notion to ECs 7-7 and 7-8. Similarly, Model Rule 1.4(a) and (b) refers in black letters to the lawyer's duty to communicate. Both Model Rule 1.8(g) and DR 5-106 contain provisions cautioning a lawyer against aggregate settlements-settlements involving the claims or defenses of multiple parties-in the absence of consent after full disclosure of conflicts. Neither the Code nor the Model Rules do a very good job of providing concrete guidance on the duty, if any, to be candid and truthful to an opponent in negotiations. This problem is discussed in § 17.5. 1

§17.1 IBooth v. Mary Carter Paint Co., 202 So. 2d 8 (Fla. App. 1967) (the name commonly used for a secret settlement between a plaintiff and a defendant in which the settling defendant remains a party and cooperates with plaintiff). §17.2 ISee, e.g., Rubin, A Causerie on Lawyer's Ethics in Negotiation, 35 La. L. Rev. 577 (1975); Wetlaufer, The Ethics of Lying in Negotiations, 75 Iowa L. Rev. 1219 (1990); White, Machiavelli and the Bar: Ethical Limitations on Lying in Negotiation, 1980 Am. B. Found. Res.]. 926.

570

Negotiation

§ 17.3

and Settlement

§17.3

Settlernenr Authority

The generally prevailing principle is that a lawyer has no implied power to settle merely because the lawyer represents a client in a litigated matter.' This principle is reinforced by the professional rules. Specifically, EC 7-7 states that, "in civil cases, it is for the client to decide whether he will accept a settlement offer." Similarly, Model Rule 1.2(a) provides in black letters that "a lawyer shall abide by a client's decision whether to accept an offer of settlement of a matter." Indeed, this rule is accompanied by a comment to the effect that the client may not be asked to surrender this right. 2 As an ethical matter, counsel must not make or accept an offer unless he believes that the client has authorized such action. As a matter of contract law, the attorney's actions will bind the client if the attorney has actual or apparent authority" to act. Apparent authority exists when the client leads the opponent to reasonably believe the attorney has authority. Apparent authority cannot be created solely by the acts of the attorney for the client. Furthermore, "authority to represent a client and appear at conferences does not create apparent authority to settle."! Accordingly, it may be possible for a client to set aside a settlement entered into without authority" Of course, lawyers must adequately prepare for settlement negotiations." It is also incumbent on lawyers to encourage advantageous

§17.3 'Edwards v. Born, Inc., 792 F.2d 387 (3d Cir. 1986); Aero Corp. v. CrossAero Servo Corp., 326 So. 2d 249 (Fla. App. 1970). 2Model Rule 1.2, Comment [5]. See also Mattioni, Mattioni and Mattioni V. Ecological Shipping Corp., 530 F. Supp. 910 (E.D. Pa. 1981). 3Edwards, 792 F.2d 387. C[ Szymkowski V. Szymkowski, 164 Ill. App. 3d 630, 432 N.E.2d 1209 (1982) (estoppel to deny authority based on course of conduct). See also Bergstrom V. Sears, Roebuck and Co., 532 F. Supp. 923 (D. Minn. 1982). 4G. Hazard, S. Koniak, and R. Cramton, The Law and Ethics of Lawyering 50 I (1994). 50domes V. Nucare, Inc., 653 F.2d 246 (6th Cir. 1981). But see Edwards, 792 F.2d 387. Incompetent advice will not justify reneging on settlement, but may justify a malpractice action. Taylor V. Gordon Flesch Co., 793 F.2d 858 (7th Cir. 1986). 6Chicago Op. 80-7 (1980).

571

§17.3

Negotiation and Settlem.ent

settlements? and communicate settlement offers to the client" so that the client can make an informed decision." Even if an attorney has obtained authority to settle, he may nevertheless incur liability to the client by fostering a misunderstanding regarding the terms of a settlement, binding the client to a disadvantageous term or construction, 10 or failing to resolve the matter completely.II With the client's consent, a lawyer may agree to a settlement conditioned on nondisclosure of the amount and terms of the settlement. However, a settlement condition that has the effect of restricting the lawyer's right to practice law may run afoul of DR 2-108(B) and Model Rule 5.6(b). Examples of such prohibited conditions include a provision that the lawyer not accept similar cases for other clients.'? and perhaps even a provision that the lawyer turn over his work product to opposing counsel. 13 In 1995, the ABA opined that a lawyer may not enter into a settlement with a governmental agency that restricts the lawyer's right to practice. 14

§17.4

Malpractice in the Settletnent Context

Plaintiff's counsel has a duty to inform the client of settlement offers and make appropriate recommendations. The attorney must relay the offer, even if she believes it is insultingly low or high. Accordingly, a failure to so inform the client and take appropriate action may result in liability,1 assuming the client would have accepted the settlement. 2 7Wachtler, Even If You Think Your Client Will Win, You May Have the Responsibility to Urge Settlement Anyway, 6 Hofstra L. Rev. 745 (1978). 8Builders Square, Inc. v. Saraco, 868 F. Supp. 748 (E.D. Pa. 1994) (malpractice claim for failure to communicate settlement offer); Model Rule 1.4(a), (b). See also EC 7-5. 9For a collection of cases imposing discipline for settlement without authority, failure to communicate settlement offers, and other misconduct, see 0. Landis, Annotation, Conduct of Attorney in Connection with Settlement of Client's Case as Ground for Disciplinary Action, 92 A.L.R.3d 288 (1979). IOHladek v.John A. Dalsin and Son, 310 Minn. 178,245 N.W2d 593 (1976). 11Ramp v. St. Paul Fire and Marine Ins. Co., 263 La. 774, 269 So. 2d 239 (1972). 12ABAFormal Op. 93-371 (1993). 13Id. 14ABAFormal Op. 95-394 (1995). §17.4 'Builders Square v. Saraco, 868 F. Supp. 748 (E.D. Pa. 1994); Rubenstein and Rubenstein v. Papadakos, 31 A.D.2d 615,295 N.YS.2d 876 (1968),ajf'd, 25 N.Y2d 751,250 N.E.2d 570, 303 N.YS.2d 508 (1969). 2McConwell v. FMG of Kansas City Inc., 18 Kan. App. 2d 839, 861 P.2d830 (1993).

572

Negotiation and Settferrrent

§17.5

Similarly, an inadequate settlement can be caused by poor preparation," incomplete investigation or discovery;" incompetence or inexperience on the part of plaintiff's counsel," or other attorney negligence impacting the value of the case. On the other hand, assume that an attorney's recommendation that a claim be settled is based on sufficient accurate information and is within a reasonable range. In that event, a disenchanted or dissatisfied client that has settled will face an uphill battle in a malpractice action." Like other lawyers, insurance counsel may be liable for failing to inform a client of settlement offers or for failing to evaluate and recommend a settlement offer. These matters are discussed in Chapter 15.

§17.5

Candor in Negotiations

The Code and the Model Rules prohibit material misrepresentations during settlement negotiations.' A number of authors have questioned the legitimacy and practicality of rules purporting to make commonplace conduct unethical. 2 Of course, an attorney is not free to perpetrate fraud on an opponent. For example, a defense lawyer and the lawyer's client were found liable for misrepresenting the amount of insurance coverage in order to induce a lower settlement than would have been accepted had the coverage been known." Similarly, certain other pivotal facts have been held to be the subject of mandatory disclosure, such as 3Cf Chicago Op. 80-7 (1980). 4Giarmita v. Flow Master Machine, 234 N.YS.2d 817 (Nassau County Sup. Ct. 1962). 5Taylor v. Gordon Flesch Co., Inc., 793 F.2d 858 (7th Cir. 1986) (allegation). 6Glenna v. Sullivan, 310 Minn. 162, 245 N.W.2d 869 (1976). In Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 526 Pa. 541, 587 A.2d 1346 (1991), the court ruled that an unhappy client should be required to plead (and prove) with specificity some "fraud in the inducement." The court gave, as an example, the case in which a lawyer convinces the client to settle in order to cover up the lawyer's own act of "knowing" malpractice. Elsewhere in the opinion, the court suggests that it is not sufficient to plead that the lawyer encouraged settlement to cover up her negligence. The dissent announced that it was "Christmastime for Pennsylvania lawyers." §17.5 'DR 7-102(A)(5); Model Rule 4.1(a). 2Hazard, The Lawyer's Obligation to Be Trustworthy When Dealing with Opposing Parties, 33 S.C. L. Rev. 181 (1981); White, supra §17.2 note 1. 3S1otkinv. Citizens Casualty Co. of N.Y, 614 F.2d 301 (2d Cir. 1979); Fire Ins. Exch. v. Bell, 643 N.F..2d 310 (Ind. 1994). See also In re McGrath, 96 A.D.2d 267, 468 N.YS.2d 349 (1983) (same case as Slotkin, but involving attorney discipline).

573

§17.5

Negotiation and Settfernerit

the death of a personal injury plaintiff" or the rejection of a plea bargain by another prosecutor in the same office. 5 Somewhat cryptically, Comment [2J to Model Rule 4.1 distinguishes between misrepresentations of fact and misrepresentations of

process: This Rule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances. Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party's intentions as to an acceptable settlement of a claim are in this category, and so is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. The thrust of this comment is that negotiations inevitably involve a certain amount of puffing and posturing, and reasonable lawyers know the difference between puffery and statements one can justifiably count on. What one can "count on" is inevitably situational, however, and it is not surprising that experts disagree in close cases." To what extent can a lawyer take advantage of an opponent's mistake of fact or law? In this situation, Model Rule 4.1 imposes no duty higher than that imposed by the substantive law? According to the Restatement (Second) of Contracts," nondisclosure amounts to an assertion where the lawyer knows that: (a) disclosure is necessary to prevent previous statements from being misleading;

"Virzi v. Grand Trunk Warehouse and Cold Storage Co., 571 F Supp. 507 (E.D. Mich. 1983); In re A, 276 Or. 225, 554 P.2d 479 (1976) (a deponent said his mother was in Salem, but neglected to say she was buried in Salem); ABA Formal Op. 95-379 (1995) (continuing to purport to represent a deceased person is an implicit misstatement). 5Price v. Superior Ct., 139 Cal. App. 3d 518, 188 Cal. Rptr. 832 (1983). 6D. Rhode and D. Luban, Legal Ethics 421-432 (1995) (describing the conflicting reactions of legal scholars to a series of hypo the ticals); Wetlaufer, supra § 17.2 note 1. 7Brown v. County of Genesee, 872 F2d 169 (6th Cir. 1989) (unilateral mistake-no duty to correct). 8Restatement (Second) of Contracts §161 (1979).

574

Negotiation

and Settfernerrt

§17.6

(b) disclosure is necessary to correct a mistake about a basic assumption, and failure to correct would amount to a failure to act in good faith in accord with reasonable standards of fair dealing;" (c)the writing does not embody the agreement;" and (d) the other person is entitled to know the fact because of a position of trust and confidence between them. I I If not precluded by the substantive law, lawyers may legally take advantage of their opponents' mistakes.t? Should they? The ethical lawyer will discuss the issue with the client on both a practical and a moral level'" and allow the client to make the decision. The lawyer might point out that taking advantage of another person damages one's reputation and can make it impossible to deal with that person in the future. If the client persists in an action that the lawyer considers immoral or unwise, the lawyer may withdraw-even if this is to protect the lawyer's own reputation. 14

§17.6

Bypassing Counsel

Model Rule 4.2 and DR 7-104(A)(1) provide that a lawyer shall not communicate with a person represented by counsel without counsel's consent. 1 Assume that a lawyer made an offer to opposing counsel and the offering lawyer reasonably believes the offer was never communicated to the opposing client. The no-contact rule forbids the lawyer

9Virzi v. Grand Trunk Warehouse and Cold Storage Co., 571 F. Supp. 507 (E.D. Mich. 1983). 10ABA Informal Op. 86-1518 (1986) (no obligation to tell client of a mistake in client's favor made by the opponent in reducing an agreement to writing; law would reform the writing to the terms agreed on). "Spanlding v Zimmerman, 263 Minn. 346,116 N.W2d 704 (1962) (defense did not tell plaintiff that defense doctor had discovered that plaintiff's child had sustained a lifethreatening injury; settlement set aside; minority of the child was an important factor). 12Cf ABA Formal Op. 94-387 (1994) (plaintiff's attorney is not ethically obligated to tell defense attorney that plaintiff's claim is time barred). 13Model Rule 2.1. 14Model Rule 1.16(b)(3); Rhode and Luban, supra note 6, at 425-427 (lawyers are entitled to consider the effect on their reputations of taking advantage of an opponent's mistake). §17.6 'See discussion in Chapter 5.

575

§17.6


from sending a copy of the offer to the opposing client or using an intermediary (other than the lawyer's client) to ask whether the offer was passed on.? Such conduct may subject the proponent of the settlement to discipline or a suit by opposing counsel if opposing counsel was damaged by the loss of a fee or a lien."

§17.7

Dealing with the Recalcitrant Client

Clients often change their minds after a claim or defense has been settled. When such a problem arises, counsel should carefully explain his understanding of the authority granted by the client and the effect of the settlement. In addition, counsel should explain what will happen if the client does not comply with the settlement-the likely cost and outcome of enforcement proceedings and the possibility that new counsel might be required, particularly if the settling attorney will have to testify.' When the lawyer has not exceeded his authority and has carefully documented the client's participation in the settlement decision, the problem will usually be resolved without difficulty. While a lawyer should not withdraw simply because a client rejects a recommended settlement offer;"a lawyer may properly seek to withdraw 2ABA Formal Op. 92-362 (1992) (the opinion would allow the lawyer to use the client to contact the other client). 3Cross v. American Country Ins. Co., 875 F.2d 625 (7th Cir, 1989) (an insurer bypassing counsel to settle with plaintiff was liable to attorney for tortious interference with contract; award of compensatory and punitive damages affirmed); Pearlmutter v. Alexander, 97 Cal. App. 3d 16, 158 Cal. Rptr. 762 (1979). §17.7 IAn evidentiary hearing will often be required. Mid-South Towing Co. v. Har- Win, Inc., 733 F.2d 386, 391 (5th Cir. 1984). It may be necessary for the advocatewitness to secure another lawyer to handle the hearing to resist or enforce the disputed settlement. This would be the cleanest procedure, although the court may conclude that the reasons for the attorney-witness rule do not apply, or that some exception to it applies. There is no reason why the advocate's testimony at such a hearing should disqualify the advocate from handling further proceedings in the same case. See discussion in Chapter 4. 2Model Rule 1.16 allows withdrawal so long as the client is not materially prejudiced. Indeed, the comments to Rule 1.2 appear to condemn only contractual provisions giving the lawyer a power to veto settlement. On the other hand, it is difficult to justify a rule permitting the lawyer to "dump" the client in order to force a settlement the lawyer wants. C( Ambrose v. Detroit Edison Co., 65 Mich. App. 484, 237 N.W2d 520 (1976) ("[T]he client has control of the lawsuit, and can refuse even the most reasonable settlement offer. . . . The refusal to settle by a client can never be sufficient grounds to

576

Negotiation

and Settbemerit

§17.8.1

if the client reneges on settlement authority or refusesto execute an agreed settlement.3

§17.8

ConHicts in Settlernenr

§17.8.1

Attorney's Personal Interests

A lawyer must "abide by a client's decision whether to accept an offer of settlement."l Accordingly, counsel should not withdraw merely because a client chooses to litigate, rather than compromise a claim. 2 By the same token, a lawyer may neither compel a client to litigate a claim nor insert a provision in a fee contract purporting to require counsel's consent to any settlement. 3 In these scenarios, counsel has attempted to secure her own economic interests in derogation of the client's interests, or at least in violation of the client's decision-making authority. Sometimes complaints will arise from an attorney's negligence during the conduct of the case. For example, it may be alleged that a constitute 'good cause' for an attorney to withdraw, but, as here, may be so irrational as to constitute one factor in evaluating his cooperation with his attorney."). See also Goldsmith v. Pyramid Communications, Inc., 362 F. Supp. 694 (S.D.N.Y 1973). At a minimum, the lawyer might forfeit any compensation. Cf. Habeeb, Annotation, Circumstances under Which Attorney Retains Right to Compensation Notwithstanding Voluntary Withdrawal from Case, 88 A.L.R.3d 246, 267 (1978). 3Hagans, Brown and Gibbs v. First Natl. Bank of Anchorage, 783 P.2d 1164 (Alaska 1989) (the client owes the attorney an obligation of "good faith and fair dealing," and the client may be liable if a settlement is declined as a stratagem to renegotiate the fee agreement). A lawyer wishing to convince his client of the merits of settlement might recite to the client the terms of a French advocate's bequest of 100,000 francs to a hospital for lunatics. "I have acquired this money," said he in his will, "among those who spend their lives in litigation. It is then only a restitution." C.James, Curiosities of the Law and Lawyers 496 (1896). §17.8.1 IModel Rule 1.2(a). 2But see Minn. Op. 13 (1983) (demand for jury trial and rejection of settlement justify withdrawal where attorney fees have already approached amount in controversy). 3Model Rule 1.2, Comment [5J. E.g., Lewis v. S. S. Baune, 534 F.2d 1115 (5th Cir. 1976); Mattioni, Mattioni and Mattioni v. Ecological Shipping Corp., 530 F. Supp. 910 (E.D. Pa. 1981). But see Ala. Op. 86-56 (1986) (the client may give the lawyer contractual authority to settle; this grant of authority may justify withdrawal without fee forfeiture when the client refuses a reasonable settlement).

577

§17.8.1

Negotiation

and Settferrierrt

claim had to be compromised because it was prejudiced by the attorney's malpractice." If the client does not learn of counsel's malpractice until after the settlement, it is likely that the client will allege that the attorney concealed information and settled to cover up her malpractice. 5 The measure of damages in such cases will ordinarily be the difference between what was received in the settlement and what would have been obtained at trial or by way of a settlement absent the attorney's malpractice." In addition, punitive damages might be appropriate in a case of fraud or misrepresentation. The lawyer's obligation to ensure that the client has been informed of all "relevant considerations" before making a settlement decision? was reinforced in dramatic fashion in Rice v. Perl,8 a 1982 decision of the Minnesota Supreme Court. In that case, a personal injury plaintiff complained that her attorney settled her claim without informing her of an ongoing employment relationship between the attorney's firm and the defendant's claims adjuster. As a result of the nondisclosure, the Minnesota high court affirmed the trial court's order that the attorney forfeit his fees. §17.8.2

Fees with Merits Conflicts

There is considerable dispute over the propriety of simultaneous negotiation of attorney fees and the "merits." The potential for conflicts in settlement negotiations that include provisions relating to attorney fees has grown with the advent of structured settlements, class actions, and the Civil Rights Attorney's Fee Award Act of 1976, 42 U.S.c. § 1988. In some circles, concern has been expressed that defense lawyers are using offers conditioned on fee waivers as a tactic to "drive a wedge "Titsworth v. Mondo, 95 Misc. 2d 233, 407 N.YS.2d 793 (Sup. Ct. 1978). See also Becker v.Julian, Blitz and Schlesinger, 95 Misc. 2d 64, 406 N.YS.2d 412 (1977), modified, 66 A.D.2d 674, 411 N.YS.2d 17 (1978), appeal dismissed, 47 N.Y2d 761, 391 N.E.2d 300, 417 N.YS.2d 464 (1979). 5Swann v. Waldman, 465 A.2d 844 (D.C. Cir. 1983). 6Titsworth, 95 Misc. 2d 233, 407 N.YS.2d 793. If it is claimed that defense counsel's negligence led to settlement, damages will be based on the difference between what was paid and the lesser amount that should have been paid. Cf Sprigg V. Garcin, 105 Cal. App. 3d 869,164 Cal. Rptr. 677 (1980). 7EC 7-8. 8320 N,W2d 407 (Minn. 1982).

578

Negotiation

and Sertlernerrt

§17.8.3

between the plaintiff and his lawyer or to discourage legitimate claims." I However, since the United States Supreme Court's 1986 decision in Evans v. Jift D.,2 state bar opinions are moving away from the view that a per se rule prohibits such simultaneous negotiations. The trend in the opinions is toward the view that such negotiations may be appropriate if plaintiff's counsel fully advises the plaintiff of the details of the negotiations, provides an opportunity for independent legal advice, and allows the client to approve or disapprove the settlement. 3 §17.8.3

Interests of Multiple Clients

Both DR 5-106 and Model Rule 1.8(g)prohibit aggregate settlement of the claims or defenses of multiple parties in civil as well as criminal cases unless each client consents after consultation and disclosure of "the existence and nature of all the claims or pleas involved ... and of the participation of each person in the settlement." These provisions are intended to protect the interests of the clients vis-a-vis each other and ensure that a lawyer does not favor one client over another. I Ordinarily, separate representation is the best course of action. However, in some cases joint representation is beneficial-to save costs or, perhaps, to present a unified position." The attorney representing more than one client should remember that any settlement must be fair to all clients and must be fully discussed with all clients. Shortcut solutions, such as majority vote by multiple clients," are clearly unethical. §17.8.2 'Conn, Op. 85-19 (1985); New York City Op. 80-94 (1980). But see Va. Op. 536 (1983) (such conduct on part of defense lawyer not improper). 2475 U.S. 717,106 S. Ct. 1531,89 L. Ed. 2d 747 (1986). See discussion in Chapter 16. "Ienn. Op. 85-F-96(a) (1986). See also N.M. Op. 1985-3. §17.8.3 "Thomas v. Foltz, 818 F.2d 476 (6th Cir. 1987) (conflict between multiple clients in the context of a negotiated plea or "package deal"); United States v. Alien, 831 F.2d 1487 (9th Cir. 1987) (joint representation of 17 criminal defendants by the same firm, involving plea negotiations during which defense counsel submitted ranking of his clients by order of culpability!); Quintero v.Jim Walter Homes, Inc., 709 S.W2d 225 (Tex. App. 1985) (settlement void). 2In re Guardianship of Lauderdale, IS Wash. App. 321, 549 P.2d 42 (1976) (cost considerations in a multiparty infant settlement discussed). See the discussion of conflicts in Chapters 3 and 14. 3Hayes v. Eagle-Picher Indus., Inc., 513 F.2d 892 (10th Cir. 1975); Mich. Op. CI558 (1980).

579

§17.8.4


§17. 8. 4

Sealed Settlements

"[T]he sealing of court records and the enforcement of covenants of silence are becoming increasingly common practices in the settlement of civil lawsuits."! "Zealous advocacy" may require that the defense lawyer request confidentiality, and the client's interests may mandate that the plaintiff's lawyer accept a covenant of confidentiality to obtain a favorable settlement. The participation of the court, in sealing the record and enforcing the covenant by means of the contempt power, raises the question of whether such settlements are a simple private matter "between the parties." Nevertheless, it seems clear as a matter of legal ethics that the lawyer's paramount obligation is to the client. While the lawyer may refer the client to all "relevant moral, economic, social, and political consideration,"2 the ultimate decision to participate or not to participate in a settlement coupled with a "gag order" is the client's." To avoid leaks, counsel should share the details of a sealed settlement with firm members or support staff only when absolutely necessary.

§17.9

Ethics and the Structured Sertlerrrent

Structured settlements present a number of interesting ethical problems. The typical structured settlement involves the payment of some lump sum, followed by periodic payments funded by an annuity. These settlements guarantee steady "income" to the plaintiff and may save the defendant money. Presumably, lawyers know about structured settlements and will tell clients about their advantages and disadvantages.' An offer for a structured settlement may, however, generate conflicts between the client's §17.8.4 lNote, Sealed Out-of-court Settlements: When Does the Public Have a Right to Know?, 66 Notre Dame L. Rev. 117 (1990). 2Model Rule 2.1. 3Note, supra note I, at 154-157; but see Newman, Gagging on the Public Interest, 4 Geo.J. Legal Ethics 403 (1991) (author suggests that public interest law firms might require clients to agree in advance that the law firm will have the authority to decide whether to accept or reject settlement offers conditioned on confidentiality). §17.9 lEC 7-8. See also Tenn. Op. 84-F-77 (1984). Structured settlements may have tax advantages. See 26 U.S.C. §104(a)(2) (1984); Rev. Ruls. 65-29, 77-220, 79-313.

580

Negotiation

and Sertlernerit

§17.10

interests and the lawyer's personal interests. Specifically,if the lawyer is employed on a contingent fee contract, the court will almost surely compute the contingent fee based either on a percentage of the discounted or present value of the periodic payments? or on a percentage of the cost to the defendant of securing the annuity;" rather than on a percentage of "total benefits." Similarly,it has been held that, absent an agreement to the contrary (preferably in writing), the lawyer may have to wait and receive his fee periodically, as the client receives her annual increments, at least when payment on an immediate basis would consume the initial lump-sum payment."

§ 17.10

Threats and Leverage*

Disciplinary Rule 7-105 prohibits threats "to present criminal charges solely to obtain an advantage in a civil matter." The Model Rules, however, contain no provision like DR 7-105, and the ABA has opined that it is not unethical to legalry threaten criminal prosecution to obtain an advantage in a civil action. 1 In states following the Model Rules, a threat is ethical unless it is criminally extortionate." Moreover, threats that fall short of being criminally extortionate might expose the lawyer to civil liability in tort. Perhaps the leading opinion on threats as extortion is State v. Harrington.' There an attorney was hired by a wife seeking to obtain a They may also be preferable if the client lacks the ability to manage money. On the other hand, a lawyer should be cautious about being too paternalistic in this regard. Cf Model Rule 1.14. ZPettiford v. Eskwitt, 189 NJ. Super. 485, 460 A.2d 716 (1983). See also Florida Bar v. Gentry, 475 So. 2d 678 (Fla. 1985) (discipline imposed). 3In re Estate of Muccini, 118 Misc. 2d 38, 460 N.YS.2d 680 (Sup. Ct. 1983). See also Godwin v. Schramm, 731 F.2d 153 (3d Cir. 1984) (value of lifetime medical care to be provided free by the VA should not be included). Nassau County Opinion 83-6 (1983) provides that cost, rather than present value, is the appropriate basis of computation. +In re Chow, 3 Haw. App. 577, 656 P.2d 105 (1982); Cardenas v. Ramsey County, 322 N,W2d 191 (Minn. 1982). Cf Tenn. Op. 84-F-77 (1984). §17.10 'Some of the material in this section first appeared in Underwood, Taking and Pursuing a Case: Some Observations Regarding "Legal Ethics" and Attorney Accountability, 74 Ky. LJ. 173 (1985-1986). lABA Formal Op. 92-363 (1992). 2See generally Livermore, Lawyer Extortion, 20 Ariz. L. Rev. 403 (1978). 3128 Vt. 242, 260 A.2d 692 (1969).

581

§17.10

Negotiation

and Setdem.ent

divorce from her husband on the ground of adultery. After setting up a compromising situation for the husband to fall into and arranging for photographs, our hero forwarded a demand letter, reading: [A]ny such settlement would include the return to you of all tape recordings, all negatives, all photographs and copies of photographs that might in any way, bring discredit upon yourself Finally, there would be an absolute undertaking on the part of your wife not to divulge any information of any kind or nature which might be embarrassing to you in your business life, or your life as it might be affected by the Internal Revenue Service, the United States Customs Service, or any other governmental agency.... [Y]ou should have [this letter] in your possession by March 13, at the latest. Unless the writer has heard from you on or before March 22, we will have no alternative but to withdraw the offer and bring immediate divorce proceedings in Grafton County .... The writer is, at present, undecided as to advising Mrs. Morin whether or not to file for "informer fees" with respect to the Internal Revenue Service and the United States Customs Service. In any event, we would file, alleging adultery, including affidavits alleging extreme cruelty and beatings, and asking for a court order enjoining you from disposing of any property, including your stock interests, during the pendency of the proceeding.' The attorney was convicted of attempted extortion. 5 It has also been suggested that threats may be actionable in tort under the doctrine of intentional infliction of emotional distress. However, the leading case of this genre" is distinguishable; that case relied on the fact that the lawyer-defendant had violated the California equivalent of DR 7-105,' thereby forfeiting the privilege for statements made in the course of a judicial proceeding. Even in Code states-where the rule obtains that a lawyer shall not present or threaten criminal charges to obtain a civil advantage-it is not unethical for a lawyer representing a party in a civil case to report violations of the law to the prosecutor. Nor does the rule preclude the simultaneous prosecution of civil and criminal complaints. The rule 'Id. at 695-696. 5Id. at 700. 6Kinnamon v. Staitman and Snyder, 66 Cal. App. 3d 893, 136 Cal. Rptr. 321 (1977). 7Cal. R. Prof. Can. 5-100.

582


§17.10

prevents only making threats solely to gain an advantage in the civil proceeding or attempting to settle or withdraw a criminal complaint to achieve the same ends. It is for the prosecutor to decide what action to take in the criminal case." In Town of Newton v. Rumery,9 the United States Supreme Court upheld an agreement by which the defendant released his civil rights claim against the city in return for the dismissal of criminal charges against him. In upholding the dismissal of the defendant's suit against the city, a majority of the Court said that such an agreement was not void as against public policy 10 The ABA Standards for CriminalJustice would require both court approval of such agreements and a knowing and voluntary waiver of rights by the accused. II In a number of states, the lawyer codes or state bar ethics opinions also prohibit a lawyer from threatening to file disciplinary charges against an opponent solely to gain an advantage in a civil matter.'? Lawyers are obligated to report serious misconduct of their fellow lawyers.!" and this obligation exists whether or not reporting is advantageous to their clients. Lawyers should not be permitted to use the threat of a report as a tactical weapon in litigation. The above should not be taken as a statement that counsel may never file disciplinary charges against an opponent during the pendency of a civil action. Counsel may do so in appropriate cases and may convey the client's intent to do so as long as care is taken to ensure that the communication cannot be interpreted as a veiled threat made solely to gain an advantage. Prudence suggests, however, that such action be deferred until the civil dispute is resolved.'! By deferring action, the attorney precludes any contention that the report was made for an ulterior purpose.

8ABA Informal Op. 1484 (1981). 9480 U.S. 386, 107 S. Ct. 1187,94 L. Ed. 2d 405 (1987). "Some states have held release-dismissal agreements invalid, in spite of Town if Newton. See, e.g., NJ. Op. 661 (1992). For a discussion of the issue, see Underwood, Parttime Prosecutors and Conflicts of Interest: A Survey and Some Proposals, 81 Ky. LJ. 1 (1992). I I ABA Prosecution Function Standard 3-3.9(g). 12E.g.,Cal. R. Prof. Con. 5-100; Ky R. Prof. Con. 3.4(D. 13Model Rule 8.3; DR 1-103(A). 14Cal. Op, 1983-73.

583

Negotiation and Sertlerraenr

§17.11

§ 17.11

Dfsbur-sernerrts

Except as provided by law or an agreement with the client, or in the case of a dispute with the client, a lawyer has a duty to notify the client of the receipt of client funds or property and to disburse such funds promptly.' §17.11.1

To the Client

At times, disbursement to the client may be easier said than done. For example, the client may be missing when an offer is made. In such circumstances, local law or ethics opinions must be consulted. Some opinions recognize the attorney's power to settle if the client's whereabouts are unknown, but the opinions also seem to condition this right on a prior agreement between the lawyer and the client.' Other opinions suggest that the lawyer should hold the proffered settlement in escrow and make it clear both that the client is absent and that the case is not closed until the client personally accepts the offer. 2 If the client accepted the settlement before disappearing, there might be a question whether the lawyer may deduct his fees and expenses and hold only the balance in escrow. The lawyer may withdraw such amounts if there is a written agreement as to the fee and no dispute regarding it is anticipated. 3 §17.11.2

To Others

A lawyer will be responsible for paying a third party according to a client's directions.' Similarly, a lawyer may be guilty of conversion for disbursing funds to the client with knowledge of a lien on the fimds- or §17.11 'Model Rule 1.15; DR 9-102(B)(3). §17.11.1 'Chicago Op. 84-10 (1985). 2N.H.Op. 1 (1981). 3Chicago Op. 84-10 (1985); W.Va. Op. 78-6 (undated). §17.11.2 'Warner v. State Bar, 34 Cal. 3d 36, 664 P.2d 148, 192 Cal. Rptr. (1983). 2For a discussion of the conflicts created by statutory liens and subrogation, Steele, Ethical Considerations for Catastrophe Lawyers, 55 J. Air L. & Com. 123, 157 (1989). For a particularly interesting opinion, see Great Am. Ins. Co. v. Spoden,

584

244 see 149316

Negotiation

and Settlement

§17.11.2

after receiving an instrument assigning the client's right to the funds to a third party. 3 Medical providers may believe that lawyers are obligated to pay their bills out of settlement proceeds.' However, unless the doctor reasonably relied on the attorney's referral, bills for medical care are the patient's responsibility, and the fact that the bills are sent to the attorney at the attorney's request does not make the attorney responsible. It is strongly advised, though, that when the attorney first obtains written authorizations from the client for the release of medical information, he also obtain authorization to pay bills for medical care out of the settlement proceeds.' An attorney who requests services from a provider is liable for the cost of the services unless the provider agrees otherwise. 6 Attorneys who do not wish to be liable to a provider should obtain an advance agreement that the provider will look only to the client for payment. It is not uncommon for counsel to encounter the following scenario. The client has already agreed (either orally or in writing) to pay the health care provider from the proceeds of litigation. (The client may have instructed counsel to give similar assurances to the health care provider.) However, when the settlement check arrives, the client instructs the lawyer not to pay the health care provider. Although Model Rule 1.15, Comment [3], alludes to the possibility that a client's "interference" in such circumstances may be "wrongful," and that a lawyer may be justified in refusing to surrender the property to the client, the rule and comment do not tell the lawyer what to do in this situation. Interpleader of the disputed sums may be the only alternative.? N.W2d 740 (Minn. 1982). For an example of a statutory "toe-stubber," see Ky. Rev. Stat. Ann. §411.188(2) (1988), requiring a plaintiff's lawyer to notify, by certified mail, parties believed to hold subrogation rights to any award received by the plaintiff as a result of a lawsuit. The statute does not set forth a penalty, but the possibilities of discomfort being visited on the lawyer by the plaintiff or third party at some point after the fact reinforce the value of "authorizations" to disburse in the attorney-client contract. 3Bonanza Motors, Inc. v. Webb, 104 Idaho 234, 657 P.2d 1102 (1983). +Ala. Op. 388 (1980); S.C. Op. 81-14 (1981). 5Ala. Op. 388 (1980); Ariz. Op. 81-3 (1981). 6Burt v. Gahan, 351 Mass. 340, 220 N.E.2d 817 (1966) (attorney liability for court reporting services absent express disclaimer); Ingram v. Lupo, 726 S.W2d 791 (Mo. App. 1987); C£ Urban Court Reporting, Inc. v. Davis, 158 A.D.2d 401,551 N.YS.2d 235 (1990). 'Cal. Op. 1988-101 (1988).

585

§17.1I.3

§17.11.3

Negotiation and Sectlerraent

Fee Disputes

The lawyer should divide the settlement proceeds according to the pre-existing fee agreement. If the client disputes the lawyer's fee, the lawyer must hold the disputed amount in trust until the matter is resolved and promptly remit to the client that portion of the settlement that belongs to the client. I The lawyer should suggest means for prompt resolution of the fee dispute, such as mediation or arbitration. 2 Preventive Ethics Checklist Settlement Authority D Communicate all settlement offers to the client; remember that it is for the client to decide whether and on what terms to settle. D Make sure that you understand exactly the limits of your settlement authority; prepare a written memorandum of authority if there is any chance of a misunderstanding with the client. Candor in Negotiations D Do not make factual misstatements to your opponent. D Try to avoid misstatements on matters of process. D Consult with your client if the opponent has made a mistake that you can take advantage of; try to make the client see that it may not be in the client's long-range interests to exploit the opponent's error. Conflicts D Try to avoid fee arrangements with your client that give your opponent the opportunity to create a conflict between you and your client. D When representing multiple clients, remember that an aggregate settlement must be disclosed to all clients and be fair to all clients.

§17.11.3 'DR 9-102(A)(2); Model Rule 1.15(b). 2Model Rule 1.15, Comment [2].

586


§17.11.3

Disbursements Pay the client promptly what belongs to the client. Obtain the client's agreement at an early time for payment of health care providers and the like from the settlement. o Hold any disputed amounts in trust and seek prompt resolution of the controversy.

o o

587

18 Withdrawal

§lS.l §lS.2 §lS.3

§lS.4 §lS.5

§lS.6 §lS.7 §lS.S

§18.1

Introduction Comparison of the Code of Professional Responsibility and the Model Rules Grounds for Withdrawal §lS.3.1 Mandatory Withdrawal §lS.3.2 Permissive Withdrawal Timeliness and Cooperation Maintaining the Confidences and Secrets of the Client §lS.5.1 Enumerating Grounds for Withdrawal §lS.5.2 Self-defense §lS.5.3 The Fugitive Client Client Papers Duty to Appeal Withdrawal and Malpractice

Introduction

There are many legitimate reasons why counsel may wish to withdraw from a case or may be compelled to withdraw from a case. Indeed,

589

§18.1

Withdrawal

withdrawal has been alluded to in several of the preceding chapters as one of the principal means of resolving conflicts of interest. I Sections 18.2 and 18.3 compare the Code and Model Rules provisions regulating withdrawal and enumerate the grounds for mandatory and permissive withdrawal. Sections 18.4 and 18.5 deal with some of the mechanics of withdrawal from litigation pending before a tribunal. The remaining sections of this chapter deal with measures the lawyer must take to avoid the infliction of unnecessary injury to the client upon withdrawal. The thrust of this chapter emphasizes the lawyer's obligation to protect the client's interests upon withdrawal. The need to recognize the client's interests will be illustrated by a "rogues' gallery" of cases, which could be titled "How Not to Get Out of a Case." Generally, these cases fall into one of two categories. First, there are those cases in which counsel did not provide notice adequate to allow the client time to find another lawyer, preserve her claims or defenses, and avoid disruption of the court's docket. The loss of a client's claim or defense will probably result in discipline or malpractice liability, and needless disruption of the docket may result in sanctions being levied against trial counsel. Second, there are a surprising number of reported cases involving abuse of the attorney's lien to secure some advantage over the client. Extortionate use of a retaining lien may injure a client irreparably or embroil an attorney in a bitter dispute with his client or successor counsel. Such a dispute may ultimately ripen into a disciplinary complaint or a malpractice claim.

§18.2

Coxnparison of the Code of Professional Responsibility and the Model Rules

The Code of Professional Responsibility addresses the grounds for, and the mechanics of, withdrawal in DR 2-ll0(A), (B),and (C). In general, these Code provisions are premised on the notion that the lawyer who takes on a case implicitly agrees to see the matter through to its §18.1 'See Chapter 2 (commencing litigation), Chapter 3 (conflicts), Chapter 4 (lawyer-witnesses), Chapter 14 (criminal defense), and Chapter 15 (insurance defense).

590

Withdrawal

§18.2

conclusion 1 and withdraw only for good cause." Moreover, even if cause for withdrawal exists, the lawyer must comply with the rules or orders of court or other tribunal before which the matter is pending and endeavor to minimize any adverse effects of withdrawal on the client. The Code describes the efforts that should be taken to minimize harm to the client in DR 2-11 O(A). It then lists conditions under which withdrawal is mandatory in DR 2-110(B), before separately listing grounds for permissive withdrawal in DR 2-11O(C). While Model Rule 1.16 carries forward much of the substance of the DR 2-110 series, the rule is organized differently and reflects a subtle change in emphasis. Specifically, Model Rule 1.16(a) lists grounds for mandatory withdrawal that are virtually identical to those contained in DR 2-110(B). Subsection (b) of the rule then suggests that permissive withdrawal is always an option" if withdrawal can be accomplished without "material adverse effect on the client's interest." Model Rule 1.6(b) then enumerates instances in which the lawyer may withdraw, even though the client will be adversely affected, as long as such steps as are "reasonably practicable" to protect a client's interests are taken. 4 Whether or not the new rule was intended to make withdrawal easier for counsel is debatable. However, the rule does seem to grapple with economic incentives for withdrawal in a more lawyer-favorable fashion than the Code. Specifically, DR 2-11 O(C)(l )(fj provides that a lawyer may seek to withdraw from a matter pending before a tribunal if the client" deliberately disregards an agreement or obligation to the lawyer as to expenses or fees." (Emphasis supplied.) In contrast, Model Rule 1.16(b) permits withdrawal, even when there are material adverse effects on client interests, if the client ''jails substantially" to fulfill such an obligation, as long as reasonable warning has been given.5 The rule also approves of withdrawal if the representation will result in an "unreasonable financial burden on the lawyer."6 This latter provision suggests that withdrawal may be appropriate under the Model Rules if the lawyer concludes that she has made an improvident fee agreement. This suggestion has been §18.2 IEC 2EC 2-32. 3Model Rule 4Model Rule "Model Rule 6ModelRule

2-3l. 1.16, Comment [7]. 1.16(d). 1.16(b)(4) (emphasis supplied). l.16(b)(5).

591

§18.2

Withdrawal

rejected in cases decided under the Code and its predecessors." Given the fact that courts are properly critical of lawyers who abandon their clients for economic reasons," these provisions will probably be narrowly construed. Despite these differences in organization and content, the general tenor of the Code and the Rules remains the same. Both contain similar guidelines for withdrawal, and both serve as useful checklists of reminders when an attorney-client relationship goes sour.

§18.3

Grounds for Withdrawal

The Code and the Model Rules both distinguish grounds for mandatory withdrawal from grounds for permissive withdrawal. Moreover, the description of grounds in the Model Rules is more or less congruent with the description of grounds contained in the Code. §18.3.1

Mandatory Withdrawal

The Code lists four grounds for mandatory withdrawal in DR 2llO(B): (1) [The lawyer] knows or it is obvious that his client is bringing the legal action, conducting the defense, or asserting a position in the litigation, or is otherwise having steps taken for him, merely for the purpose of harassing or maliciously injuring any person. (2) [The lawyer] knows or it is obvious that his continued employment will result in violation of a Disciplinary Rule. (3) [The lawyer's] mental or physical condition renders it difficult for him to carry out the employment effectively. (4) [The lawyer] is discharged by the client.

7See, e.g., Reynolds v. Sorosis Fruit Co., 133 Cal. 25, 66 P. 21 (1901). 8See, e.g., Haines v. Liggett Group Inc., 814 E Supp. 414 (D.N]. 1993); Kriegsman v. Kriegsman, 150 N]. Super. 474, 375 A.2d 1253, 1256 (1977) (client's inability to pay unanticipated fees and expenses did not justify withdrawal of firm that had agreed upon a fixed fee); Vann v. Shilleh, 54 Cal. App. 3d 192, 126 Cal. Rptr. 401,406 (1975) (inability to pay does not justify last-minute withdrawal); Imhoff v. Hammer, 305 A.2d 325 (Del. 1973) (attorney may not withdraw on eve of trial simply because client rejects settlement).

592

Withdrawal

§18.3.1

Since the first ground of withdrawal is required by DRs 2-109(A) and 7-102(A)(1), it is simply a variation of the second ground. Indeed, Model Rule 1.16(a) contains only three grounds for mandatory withdrawal, which are virtually identical to those set forth in DR 2-llO(B)(2)-(4): (l) the representation will result in violation of the rules of professional conduct or other law; (2) the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client; or (3) the lawyer is discharged.

Discharge of the lawyer is surely the most frequently overlooked ground for mandatory withdrawal, in the sense that lawyers all too frequendy forget that the cause of action belongs to the client. While a lawyer may discuss the matter with the client;' the client's power to discharge the lawyer is absolute, although the client may be subject to liability for some or all of the lawyer's anticipated fee." The client's right to discharge the lawyer is well settled. Nevertheless, in a number of reported cases, lawyers have been disciplined for refusing to honor the client's wishes] or directives and persisting in representing the client" or hindering the client's efforts to obtain successor counsel. 4 Moreover, even if the lawyer has been unfairly discharged by the client, the lawyer must take all reasonable steps to mitigate the consequences to the client. 5 Accordingly, retaliation in any form constitutes serious misconduct" and may amount to a tort.? §18.3.1 'In the case of an incompetent client, a lawyer may be justified in initiating proceedings for a conservatorship or like protection, although it seems that this would only be appropriate in extreme cases. See Model Rule 1.16, Comment [6], crossreferencing Model Rule 1.14. 2Model Rule 1.16, Comment [4]. See also In re Waller, 524 A.2d 748 (D.C. App. 1987) (lawyer suspended for not honoring discharge, attempting to collect full contingent fee, etc.). 3Lake County Bar Assn. v. Needham, 66 Ohio St. 2d 116,419 N.E.2d 1104 (1981); In re Greenlee, 98 Wash. 2d 786, 658 P.2d I (1983). See also ABA Informal Op. 1397 (1977). {Dixon v. State Bar, 32 Cal. 3d 728, 653 P.2d 321,187 Cal. Rptr. 30 (1982). sModel Rule 1.16, Comment [9]. 6Dixon, 32 Cal. 3d 728, 653 P.2d 321, 187 Cal. Rptr. 30 (disclosing client's confidences and secrets to harass client). iDelesdernier v. Porterie, 666 F.2d 116 (5th Cir. 1982) (accusing client of stealing files from lawyer's office-damages for mental distress upheld).

593

§18.3.1

Withdrawal

A question that often comes to the attention of state bar ethics committees is whether a lawyer who has been retained pursuant to a contingent fee contract and discharged without cause may charge the client his percentage of any ultimate recovery by the client. Or is counsellimited to a recovery based on quantum meruit for the reasonable value of services rendered up to the date of the discharge? This problem arises when a shrewd litigant attempts to circumvent the fee agreement by discharging counsel after the case has been readied for settlement; in such a situation, the client might attempt to negotiate directly with the defendant or the defendant's insurer," Although a handful of old cases allow the full percentage fee to be recovered by the discharged lawyer upon successful completion of the case by successor counsel," by far the greater number of cases limits counsel to a quantum meruit recovery that in no event can exceed the contract fee. The rationale for limiting the lawyer's fee to the reasonable value of services up to the time of discharge is to shore up the client's right to discharge counsel. That right could hardly be exercised if discharge resulted in duplicative fees to bring the client's claims to fruition.'? Some recent cases have applied this rationale to hold that it is unethical for an attorney to charge a nonrefundable special retainerthe client has an implied right to discharge the attorney and recover any

BIn Cross v. American Country Ins. Co., 875 F.2d 625 (7th Cir. 1989), the court upheld an award of compensatory and punitive damages against an insurer that bypassed plaintiff's counsel to effect a settlement without the lawyer's participation, causing a loss of the lawyer's fee. See also Jackson v. Travelers Ins. Co., 403 F. Supp. 986 (M.D. Tenn. 1975), modified, 563 F.2d 105 (6th Cir, 1977); State Farm Ins. Co. v. St. Joseph's Hosp., 107 Ariz. 498, 489 P.2d 837 (Ariz. 1971). But see Dow Chern. Co. v. Benton, 163 Tex. 477, 357 S.W.2d 565 (1962) (lawyer may not pursue the client's case for the lawyer's benefit after the client has gone out of the case). 9Annotation, Limitation to Quantum Meruit Recovery, Where Attorney Employed under Contingent Fee Contract Is Discharged with Cause, 92 A.L.R.3d 690 (1979). IOFox& Assocs. Co. v. Purdon, 44 Ohio St. 3d 69,541 N.E.2d 448 (1989); Plaza Shoe Store v. Hermel, 636 S.W.2d 53 (Mo. 1982); Estate of Forrester v. Dawalt, 562 N.E.2d 1315 (Ind. App. 1990); Fracasse v. Brent, 6 Cal. 3d 784, 494 P.2d 9, 100 Cal. Rptr. 385 (1972). These "rules" and the policies underlying them were set forth at least as early as G. Warvelle, Essays in Legal Ethics 179-180 (1902): [A] client may discharge his attorney at any time, with or without cause, even where the cause has been taken on a contingent fee. If the discharge is without cause the attorney may recover for services already performed on a quantum meruit, and if no service has been rendered no action will lie. If the discharge is for cause, then, in most cases, the attorney forfeits his fee.

594

Withdrawal

§18.3.2

part of the retainer that has not been earned. lIOn the other hand, if the contract has been substantially performed by the lawyer before his discharge-for example, when the client is attempting a last-minute discharge to avoid paying a fee-a court may allow recovery on the contract. 12

§18.3.2

Perrniesioe Withdrawal

The Code lists the following as grounds for permissive withdrawals in DR 2-11 O(C): (1) [When the lawyer's] client: (a) Insists upon presenting a claim or defense that is not warranted under existing law and cannot be supported by good faith argument for an extension, modification, or reversal of existing law. (b) Personally seeks to pursue an illegal course of conduct. (c)Insists that the lawyer pursue a course of conduct that is illegal or that is prohibited under the Disciplinary Rules. (d) By other conduct renders it unreasonably difficult for the lawyer to carry out his employment effectively. (e) Insists, in a matter not pending before a tribunal, that the lawyer engage in conduct that is contrary to the judgment and advice of the lawyer but not prohibited under the Disciplinary Rules. (f) Deliberately disregards an agreement or obligation to the lawyer as to expenses or fees. (2) His continued employment is likely to result in a violation of a Disciplinary Rule. (3) His inability to work with co-counsel indicates that the best interests of the client likely will be served by withdrawal. (4) His mental or physical condition renders it difficult for him to carry out the employment effectively. Illn re Cooperman, 83 N.Y2d 465,633 N.E.2d 1069,611 N.YS.2d 465 (1994); Jacobson v. Sassower, 66 N.Y2d 991,489 N.E.2d 1283,499 N.YS.2d 381 (1985) (general retainers-where the client pays for availability-are ethical and enforceable). 12Afterdischarge, a lawyer may intervene in the former client's lawsuit to protect his interests under a contingent fee. Alexander v. Chevron, U.S.A., 806 F.2d 526 (5th Cir. 1986). See also Novinger v. E.I. DuPont de Nemours and Co., 809 F.2d 212 (3d Cir. 1987) (trial court has ancillary jurisdiction over fee dispute between client and former counsel). Common sense suggests that the discharged lawyer's recovery, if any, must await the successful conclusion of the client's case. Cf. Plaza Shoe Store, Inc. v. Hermel, Inc., 636 S.W.2d 53 (Mo. 1982).

595

§18.3.2

Withdrawal

(5) His client knowingly and freely assents to termination of his employment. (6) He believes in good faith, in a proceeding pending before a tribunal, that the tribunal will find the existence of other good cause for withdrawal.

If none of the grounds for mandatory withdrawal or permissive withdrawal is available, the lawyer "may not withdraw," although DR 2llO(C)(l)(d) and (C)(6) obviously provide counsel with considerable latitude. In contrast, Model Rule 1.16(b) suggests that permissive withdrawal is always an "option" if withdrawal can be accomplished without "material adverse effect on the client's interests."! While a lawyer will not be disciplined (in a Model Rules jurisdiction) for an unjustified withdrawal," it cannot be assumed that the rule negates the attorney's contractual obligations to the client. To begin with, if an attorney unjustifiably withdraws (or is discharged with cause), the attorney may forfeit any contractual right to compensation.> Similarly, some cases have denied attorneys compensation when the client did not consent to the withdrawal. 4 In addition, there appears to be general agreement that the client's refusal to accept a settlement does not justify withdrawal, and a withdrawal on that ground can result in a forfeiture of compensation." Similarly, a client's refusal to follow her attorney's advice will not necessarily justify withdrawal." Nor does a difference of opinion in and of itself establish an irreconcilable conflict." In such circumstances, the trial court has discretion to deny a withdrawal motion."

§18.3.2 'See discussion at §18.2. 2C. Wolfram, Modern Legal Ethics 551 (1986) (also unlikely that lawyers would be disciplined under the Code). 3Habeeb, Annotation, Circumstances under Which Attorney Retains Right to Compensation Notwithstanding Voluntary Withdrawal from Case, 88 A.L.R.3d 246 (1978). 4Id. at 250. -'Id. at 267. 6Compare Spero v. Abbot Lab., 396 F. Supp. 321, 323 (N.D. Ill. 1975) with Singleton v. Foreman, 435 F.2d 962 (5th Cir. 1970) and Mekdeci v. Merrell Nat!. Lab., 711 F.2d 1510,1521 n.15 (1IthCir. 1983). 7Mekdeci, 711 F.2d at 1521. BId.

596

Withdrawal

§18.4

§18,4

Tim.eliness and Cooperation

Both the Code and the Model Rules emphasize that the client must be given reasonable notice I of the lawyer's intent to withdraw and time to employ successor counsel. 2 In addition, both the Code" and the Model Rules?require that permission of the tribunal be obtained if the matter is before a court. Serving the client with notice of the motion protects the client" and minimizes disruption of the court's docket." While the "reasonableness" of the notice depends on the facts of a given case, a conclusion that notice was untimely or otherwise ineffective may result in the continuation of the relationship for purposes of malpractice liability.7 It has also been suggested that counsel has an obligation to secure successor counsel." However, statements to that effect are not well considered. Generally, such cases involve instances of last-minute withdrawal, true abandonment (without notice to the client), or deliberate interference with the client's ability to secure successor counsel. 9 Absent such circumstances, there is no duty to obtain successor counsel. An untimely withdrawal prejudicing the client'? or disrupting the court's docket!' will almost certainly result in discipline, as well as a fine or other sanction. 12 Malpractice liability can also ensue. 13 §18.4 IDR 2-11O(A)(2). 2Model Rule 1.16(d). 3DR 2-110(A)(I). 4Cf Model Rule 1.16(c) and Comment [3J. SCardot v. Luff, 164 W Va. 307, 262 S.E.2d 889 (1980) (notice of hearing on formal withdrawal motion required); Sherman v. Heiser, 85 Wis. 2d 246, 270 N.W2d 397 (1978) (client should receive notice of the motion). 6Cf Smith v. Bryant, 264 N.C. 208, 141 S.E.2d 303 (1965) (duty to effect withdrawal in time to avoid necessity of continuance). iSee Public Taxi Service v. Barrett, 44 Ill. App. 3d 452,357 N.E.2d 1232 (1976) and other cases collected at Lehmann, Annotation, Legal Malpractice in Connection with Attorney's Withdrawal as Counsel, 6 A.L.R.4th 342 (1981). 8The Reporter's legal research accompanying the original draft of the Model Rules (styled Legal Background to the Model Rules), which appears to have formed the basis for the textual materials in volume I of the ABA/BNA Lawyer's Manual of Professional Conduct, cites disciplinary cases involving what may be described as abandonment of clients. See, e.g., People v. Archuleta, 638 P.2d 255 (Colo. 1981). 9See, e.g., Dixon v. State Bar, 32 Cal. 3d 728, 653 P.2d 321, 187 Cal. Rptr. 30 (1982). IOMyersv. Mississippi St. Bar, 480 So. 2d 1080 (Miss. 1985). IIIn re Cordova Gonzalez, 726 F.2d 16 (1st Cir. 1984). In a civil case, a lawyer's withdrawal does not afford the party an absolute right to a continuance. Medkeci v. Merrell Natl. Lab., 711 F.2d 1510, 1520 n.12 (II th Cir. 1983). 12Id.

13See§18.8.

597

§18.4

Withdrawal

A court should not condition leave to withdraw on the attorney's waiver of the fee owed by the client. In A Sealed Case,I4 the plaintiff's attorney in a sexual harassment suit filed a motion to withdraw; when pressed for the reason, the attorney said that the reason involved confidential communications. At this point, the presiding judge referred the matter to another judge, who in turn referred it to a magistrate, who asked the lawyer to disclose the confidential communications. The communications in question were statements by the client revealing an intent to commit perjury. When the matter came before the judge on the magistrate's report, the judge told the plaintiff's firm that he would release it if the firm agreed to waive its fee. 15 The firm was granted appellate review. The Court of Appeals for the Seventh Circuit reversed, holding that it was improper for the magistrate and the judge to coerce the firm into waiving its right to a fee by threatening to withhold approval of the motion to withdraw. 16

§18.5

Maintaining the Confidences and Secrets of the Client

It should be evident that after withdrawal from a case a lawyer must refrain from disclosing client confidences and secrets, except as may be otherwise provided in DR 4-lOl(C) and Model Rule 1.6.1 Disclosures that embarrass or otherwise harm an ex-client are actionable as well as unethical. 2 §18.5.1

Enurnerating Groundsfor Withdrawal

When a matter is pending before a tribunal, a motion to withdraw must ordinarily be filed with notice to opposing counsel and the client. 890 F.2d 15 (7th Cir. 1989). 15Id. at 16. 16Id. at 17. §18.5 'See especially Model Rule 1.6, Comment [15]. The giving of notice of withdrawal, coupled with the withdrawal or disaffirmance of any opinion, document, or the like, is discussed in § 18.5.2. 2For an example of improper disclosures, see Dixon v. State Bar, 32 Cal. 3d 728, 734,653 P.2d 321, 325,187 Cal. Rptr. 30, 34 (1982) (irrelevant disclosures designed to embarrass and harass client). 14

598

Withdrawal

§18.5.1

This requirement is set forth in DR 2-11 O(A)(2)and is implicit in Model Rule 1.16(c), which makes it clear that court permission is required for withdrawal. Model Rule 1.16(c) provides that a court may require an attorney to continue the representation notwithstanding the existence of good cause for withdrawal. For example, a court might deny a motion to withdraw in a criminal case if the ground for withdrawal is the nonpayment of the agreed-on fee. 1 On the other hand, a court is more likely to grant a motion to withdraw, albeit reluctantly, when counsel raises a question of conflict of interest." A criminal defense attorney should not be placed in the position of attempting to defend a client who is or is likely to be contending that the attorney's representation is ineffective. 3 All of this is well and good until one reflects on the number of instances in which counsel will be prevented from disclosing or enumerating grounds for withdrawal because such a disclosure might reveal confidences or secrets in violation of DR 4-101 or Model Rule l.6.4 While the tension between nondisclosure and the court's need for information has been mentioned in the cases," no easy solution to the problem has yet surfaced. The Code is silent. The Model Rules offer the following bromide in Comment [3] to Model Rule 1.16: Difficulty may be encountered if withdrawal is based on the client's demand that the lawyer engage in unprofessional conduct. The court may wish bound to tion. The mination

an explanation for the withdrawal, while the lawyer may be keep confidential the facts that would constitute an explanalawyer's statement that professional considerations require terof the representation should be accepted as sufficient.

As Professors Hazard and Hodes acknowledge," this solution leaves much to be desired. To begin with, one may well doubt that all judges will accept a bald reference to "professional considerations," since this §18.5.1 'People v. Woods, 117 Mise. 2d 1,457 N.YS.2d 173 (1982). 2State v. West, 2 Kan. App. 2d 297, 578 P.2d 287 (1978). 3See discussion of this problem in Chapter 14. +This dilemma may also arise in civil cases. See Chapter 15. 5Holloway v. Arkansas, 435 U.S. 475, 486 I1n. 9-11, 98 S. Ct. 1173, 1179-1180 nn. 9-11, 55 L. Ed. 2d 426, nn. 9-11 (1978). See also People v. Schultheis, 638 P.2d 8, 13-14 (Colo. 1981). 6G. Hazard,Jr., and W. Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct § 1.16:400 (2d ed. 1990). See also the discussion of this topic in the context of client perjury in Chapter 14.

599

§18.5.1

Withdrawal

stratagem effectively deprives the tribunal of any opportunity to independently balance the need for withdrawal against competing considerations. Moreover, the more seasoned, if not more cynical, trial judge will suspect that these "magic words" are being mongered as a substitute for good cause. Nevertheless, the best course of action is for counsel to enumerate grounds when doing so will not impinge on any important interest of the client and to take refuge in Comment [3J in close cases.

§18.5.2

Self-defense

The rule of confidentiality is subject to a "self-defense" exception, which allows attorneys to reveal client confidences when necessary to protect their legitimate interests. This attorney-favorable rule has been grafted onto DR 4-101 (C) and is explicitly recognized in its broadest form in Model Rule 1.6(b)(2).! Disciplinary Rule 4-10 1(C)(4) permits a lawyer to reveal the confidences and secrets of a client "in order to defend himself or his employees or associates against an accusation of wrongful conduct."? This rule obviously is fair when the attorney has been charged with wrongdoing by the client. However, it took some time for the courts to recognize that it should extend to situations in which an attorney is charged with wrongdoing by some third person.f The leading case dealing with the self-defense exception in the context of third party claims or charges is undoubtedly Meyerhofer v. Empire Fire and Marine Insurance CO.4 This case §18.5.2 'See Pappas v. Holloway, 114 Wash. 2d 198, 787 P.2d 30 (1990) (malpractice defendant lawyer could implead client's other lawyers and obtain discovery from them over assertion by the plaintiff (former client) of attorney-client privilege). See also Hearn v. Rhay, 68 ER.D. 574 (E.D. Wash. 1975) (implied waiver overcomes use of privilege as sword rather than shield). 2This exception is frequently invoked by criminal defense counsel whose effectiveness is challenged in postconviction proceedings. See, e.g., Tasby v. United States, 504 E2d 332 (8th Cir. 1974); Laughner v. United States, 373 E2d 326 (5th Cir. 1967); Or. Op. 497 (1984). 3Restatement of the Law Governing Lawyers § 116 (Tentative Draft No.2, 1989), which allows for responses to charges and proceedings as well as to threats of same by persons in an apparent position to carry them out (prosecutors and potential litigants). Comment f allows defense against informal client charges, such as those made to a disciplinary agency. 4497 E2d 1190 (2d Cir. 1974).

600

Withdrawal

§18.5.3

involved the trials of a young associate of a large firm who resigned rather than participate in wrongdoing in the context of a public offering, only to be named a defendant in a subsequent shareholder derivative action. In a successful effort to extract himself from the civil suit, he invoked a self-defense exception, over a rather disingenuous charge by his former firm that he was acting unprofessionally. The Second Circuit agreed with the young attorney that the self-defense exception of DR 4IOI(C)(4) should reach situations in which the complaint against the lawyer is initiated by one other than the client. This view has been carried forward in Model Rule 1.6(b)(2),providing for permissive disclosure to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegationsin any proceedingconcerning the lawyer'srepresentationof the client. Another aspect of the self-defense exception is the lawyer's right to disavow documents that the lawyer reasonably believes will be used by the ex-client to perpetrate a fraud." The ABA opinion on point states, however, that a lawyer may not openly disavow documents that have been used by the client in the past to perpetrate a fraud." The key to permissive disavowal is the lawyer'S reasonable belief that the document will be used in thefuture to perpetrate a fraud.

§18.5.3

The Fugitive Client

A question that has arisen with some frequency is whether a lawyer must withdraw from the representation of a fugitive client. May the lawyer continue to represent and advise a client who refuses to surrender? This question is usually accompanied by a second: Must the lawyer disclose the client's whereabouts? The better view is that the lawyer may continue the representation and give advice to the client so long as the lawyer is not actively aiding the client to evade trial or violate the law.1 Along the same lines, the lawyer arguably may (indeed, must) decline to inform the authorities of 5ABA Formal Op. 92-366 (1992) (called the "noisy withdrawal" opinion). 6Id. §18.5.3 'N.Y Op. 529 (1981).

601

§18.5.3

Withdrawal

the client's whereabouts.? On the other hand, support can be found for the suggestion that disclosure is permitted if the client's flight is viewed as a "continuing crime.:" The Code provides that a lawyer may disclose otherwise protected information pursuant to a law or court order," and it is safe to assume that Model Rules jurisdictions recognize this exception." When a lawyer is uncertain about the applicability of the privilege in this or any other context (e.g.,client identity), the lawyer should insist on a court order before making disclosure.fThere is no reason for anyone (particularly a prosecutor or a judge) to expect a lawyer to unilaterally resolve a question of privilege against the client, and the courts should express no dismay when counsel insists on a court order. Furthermore, there is much merit to the position that counsel assumes the obligation to exhaust all good faith efforts to test the validity of any law or court order purporting to override the privilege;' although the ethical codes do not require the lawyer to suffer contempt." Given the unsettled nature of the law in the majority of jurisdictions, a court should at a minimum withhold the execution of any sentence of contempt pending appellate review.9 2Ala. Op. 84-107 (1984); Va. Op. 929 (1987). According to Ohio Opinion 86-8 (1986), the lawyer should "assert the attorney-client privilege." See ABA Annotated Canons 45 (1926) ("a lawyer may not properly disclose to police officials his knowledge of the present whereabouts of his client, a confidential communication from the latter, though the client has fled from the jurisdiction while under a criminal charge") (undated opinion of the New York County Bar). See also Mercado v. Parent, 421 So. 2d 740 (Fla. App. 1982) (context of execution of judgment in civil case); Matter of Nackson, 221 NJ. Super. 187,534 A.2d 65 (1987) (lawyer could not be compelled to disclose, given other means available for obtaining information). Cases rejecting a privilege and holding that disclosure may be compelled include In re Walsh, 623 f2d 489 (7th Cir. 1980); Burden v. Church of Scientology, 526 f Supp. 44 (M.D. Fla. 1981); and Commonwealth v. Maguigan, 511 Pa. 489, 511 A.2d 1327 (1986). 3See, e.g., New York City Op. 81-13 (1981). 4DR 4-10 I (C)(2); Restatement of the Law Governing Lawyers §115, Comment b (Tentative Draft No.2, 1989). 5See, e.g., Ky. Rule 1.6(b)(3) (allowing disclosure pursuant to law or court order). 6Ky. Op. 315 (1987); Restatement of the Law Governing Lawyers §115, Comment c (Tentative Draft No.2, 1989). 7 Amer. Law. Code of Con. (1982), Rule 1.3. 8C[ Velsicol Chern. Corp. v. Parsons, 561 f2d 671 (7th Cir. 1977). But cf. People v. Kar, 129 Cal. App. 2d 436, 277 P.2d 94 (1954). The Restatement of the Law Governing Lawyers §115, Comment c, likewise would not require the lawyer to suffer contempt. 9Dike v. Dike, 75 Wash. 2d 1,448 P.2d 490 (1968). C[ Maness v. Meyers, 419 U.S. 449,95 S. Ct. 584, 42 L. Ed. 2d 574 (I 975)(good faith defense available to lawyer in contempt proceeding triggered by his advice to client to invoke the fifth amendment in response to a subpoena in a civil case).

602

Withdrawal

§18.6

The client's whereabouts will not be privileged if the client is committing a crime by being in fugitive status. In a recent federal trial court decision, the judge opined that a lawyer had an obligation to notify the court that the client had jumped bail in order to "stop the client from committing a crime." 10 The court grounded this obligation on Florida's version of Rule l.6 (duty to report intent to commit crime) and Rule 3.3(a)(2)(duty of candor toward tribunal). Strictly speaking, this opinion imposes not a duty to report the client's whereabouts (which might still be privileged), but rather a more limited duty to inform the court that the client has skipped bail. II

§18.6

Client Papers

In most states, an attorney has several types of security for the payment of her fee. Perhaps the form of security most frequently resorted to is the retaining lien. Generally, the retaining lien functions as a possessory lien on client papers, documents, or other property relating to the work for which a fee is owed. I Its effectiveness increases in proportion to the degree of harm that may befall a client who is deprived of his papers and property. When used indiscriminately, it amounts to legalized extortion-the client is threatened with harm to coerce the client to pay the lawyer's fee." Unfortunately, the Code and the Model Rules have sidestepped the problems posed by such leverage. For example, in its description of the mechanics of withdrawal, the Code refers only to the return of papers and property "to which the client is entitled."3 Similarly, Model Rule 1.16(d) states that papers may be retained "to the extent permitted IOUnited States v. Del Carpio-Cotrina, 733 F. Supp. 95 (S.D. Fla. 1990). C£ Korff v. State, 567 N.E.2d 1146 (Ind. 1991) (a communication from a lawyer to a client relating to the date, place, and time of the client's court appearance not privileged). IlSee also Fla. Op. 90-1 (1990) (only when it reaches the point at which counsel knows with reasonable certainty that client has jumped bail and will not appear would counsel be ethically required to "step forward and advise the Court of the situation"). §18.6 'See generally Note, Attorney's Retaining Lien over Former Client's Papers, 65 Colum. L. Rev. 296 (1965). See also In re Southwest Restaurant Sys., Inc., 607 F.2d 1243 (9th Cir. 1979) (relinquishment of the papers results in loss of the lien). See also D.C. Op. 100 (1976) (no lien on papers or property associated with unrelated matters). 2Brauer v. Hotel Assocs., Inc., 40 NJ. 415, 192 A.2d 831 (1963). 3DR 2-110(A)(2).

603

§18.6

Withdrawal

by law.'" In turn, state bar ethics committees have either avoided questions relating to extortionate use of the lien by characterizing them as "questions of Iaw'" or justified the lien as a legitimate security device.6 In the past, courts have required lawyers to turn over client papers only after adequate security has been provided by the client. 7 However, this approach has been modified in criminal cases because of the accused's right to due process and the effective assistance of counsel. 8 At least one court has held that successor counsel must be given access to the files as necessary to prepare for trial. 9 More recently, a few state bar ethics committees have cautioned lawyers that there may be ethical limits on the exercise of the lien, notwithstanding its legality.10 One bar opinion provides a useful checklist of instances in which resort to the lien may be improper: 11 1. when the release of documents is conditioned on a demand for release from malpractice liability,12 2. when the papers are necessary to defend a criminal charge that places the client's personal liberty at risk, 3. when the fees are flagrant overcharges, 4. when the lawyer has deliberately failed to perform services, 5. when the lawyer has been involved in misconduct or withdrawn without cause or reasonable notice, 6. when adequate security has been offered, 7. when a third party needs the documents and has invoked appropriate discovery machinery, 'See also Model Rule l.l6, Comment [9]. 5Ariz. Op. 81-32 (1981); Kan. Op. 83-18 (1983). See also ABA Informal Op. 861520 (1986). 6Ky. Op. E.-235 (1980) (disingenuously resorting to the "work product doctrine" as a basis for withholding materials in the file). 7Cf Tri-Ex Enters., Inc. v. Morgan Guar. Trust Co., 583 F. Supp. 1116 (S.D.N.Y 1984). See also D.C. Op. 90 (1980). sPomcrantz v. Schandler, 704 F.2d 681 (2d Cir. 1983); cf Resolution Trust Corp. v. Elman, 949 F.2d 624 (2d Cir. 1991) (attorneys for bankrupt client cannot establish priority in bankruptcy of client by retaining client's files). 9People v. Altvater, 78 Misc. 2d 24, 355 N.YS.2d 736 (1974). ION.M. Op. 1984-4 (referring to urgent need, prejudice if access is denied, and the client's inability to pay); Tex. Op. 411 (undated) (attorney may not jeopardize rights merely to collect a fee). IIColumbus Bar Op. 4 (undated); see also Miller v. Paul, 615 P.2d 615 (Alaska 1980) (factors that should be considered). 12See § l.l3.

604

Withdrawal

§18.6

8. when the lien is created by the fee agreement and is greater than state law allows, and 9. when the client's retainer exceeds the cost of services rendered to date. The exceptions listed above find support in the cases, and some examples are in order. An example of the first exception is provided by Nolan v. Foreman. 13 There it was alleged that a retaining lien was asserted in order to exonerate the lawyer from malpractice liability Noting that counsel had at no time claimed that he had not been fully compensated for his work, the court held that such leverage, if proven, would violate DRs 6-102 and 2-110(A)(2)and justify a civil tort remedy for breach of fiduciary duty The leading illustration of the second exception is provided by the court opinion in People v. Altvater. 14 There the court held that successor counsel was entitled to make copies of documents necessary for trial preparation in a murder case. The case of Dixon v. State Bar" serves as a good illustration of misuse of the lien after counsel engaged in a variety of acts of misconduct. In that case, counsel appears to have asserted the lien with a view to hindering the employment of successor counsel. 16 Of similar import is the case of In re Kazifman.17 There a lawyer voluntarily withdrew from a case, but retained the file in an effort to coerce successor counsel into agreeing to a fee-splitting arrangement. 18 Tn-Ex Enterprises v. Morgan Guaranty Trust Co. 19 is a useful example of the exception permitting the client's adversary to seek documents subject to an attorney's lien. As that case points out, allowing the opponent access to client papers may enhance the value of the lien (the client's adversary would have access to papers the client would not have access

13665F.2d 738 (5th Gir. 1982). 1478Mise. 2d 24, 355 N.YS.2d 736 (1974). 1532Gal. 3d 728, 653 P.2d 321,187 Gal. Rptr. 30 (1982). 16653P.2d at 325, 187 Gal. Rptr. at 34. 1793Nev. 452, 567 P.2d 957 (1977). 18Gf S.G. Op. 85-05 (1985) (attempt to condition continued representation on rehiring of referring counsel). See also In re Kaufman, 93 Nev. 452, 567 P.2d 957 (miscon-

duct will result in forfeiture). 19583F. Supp. 1116 (S.D.NY 1984).

605

§18.6

Withdrawal

to, thereby increasing the client's "inconvenience"). Moreover, it would be absurd to deny an opponent access to relevant, discoverable, and perhaps essential proof merely because the party resisting discovery has refused to pay his attorney. Denying the opponent access would permit the client "to insulate himself from proof intending to establish his liability to another by placing that proof in the hands of an attorney and then refusing to pay the attorney's charges."2oIn effect, the client could suppress evidence of his misdeeds against the opponent by committing another misdeed against his lawyer. The retaining lien has been abolished in a few states by either court decision" or statute.P At least one influential commentator has opined that the lawyer "would be wise almost invariably to ignore [it] ."23 While that opinion may be an overstatement, lawyers should certainly consider the risks associated with abuse of the lien and the ingenuity of the malpractice bar in crafting claims arising from perceived abuses of the lien. In a case of a client's willful refusal to pay an agreed-on and reasonable fee, counsel might consider joining with the motion to withdraw a request that the court hold a hearing to ascertain the extent of prejudice to the client associated with the assertion of the lien-" and determine adequate security to be provided in return for relinquishment of papers or property to the client. 25 Such a procedure would have the virtue of bringing the dispute under the supervision of the court.

2°Id. at 1118. 21Academy of Cal. Optometrists, Inc. v. Superior Ct., 51 Cal. App. 3d 999, 124 Cal. Rptr. 668 (1975). 22Minn. Op. 11 (1981); Hoover, Lawyers' Professional Responsibility Board Report, 36 Bench and Bar of Minn. 43 (1979). 23''''0Ifram, supra §18.3.2 note 2, at 544. 24Cf.Alexander v. Chevron, U.S.A., 806 F.2d 526 (5th Cir. 1986) (after discharge, attorney may intervene in former client's lawsuit to protect attorney's rights under contingent fee contract); National Sales and Servo Co. v. Supreme Ct., 136 Ariz. 544, 667 P.2d 738 (1983). 25Cf.Upgrade Corp. v. Michigan Carton Co., 87 Ill. App. 3d 856,410 N.E.2d 259 (1980).

606

Withdrawal

§18.7

§18.7

Duty to Appeal

It is generally assumed that a lawyer who accepts a case promises to see the matter through to its completion.' Nevertheless, a question that frequently arises is whether a lawyer may refuse to undertake an appeal for a civil litigant who is dissatisfied with a result and demands an appeal, but is unwilling or unable to pay past or future fees. This problem is exacerbated when the lawyer has undertaken the representation pursuant to a contingent fee. As we have noted elsewhere, an attorney may not file a meritless appeal in a civil suit.? The present discussion centers on cases in which there are sufficient technical grounds for appeal, but little economic incentive for appeal from the attorney's standpoint. One view suggests that the lawyer who undertakes a case pursuant to a contingent fee contract must prosecute an appeal absent contractuallanguage to the contrary." This view is presumably based on the notion that any ambiguity in the agreement should be resolved against the lawyer-the drafter of the agreement and the person with legal expertise. Some bar committees have expressed a contrary view, at least when the civil matter was not undertaken on a contingent fee basis. This line of authority is based on the notion that a lawyer retained for civil litigation has an obligation to represent the client only through the trial of a case, absent an explicit agreement to appeal. 4 On the other hand, such opinions add that no hard and fast rules can be set down in this area, and that it may be necessary at a minimum for counsel to file notice of appeal if withdrawal cannot be effected in such fashion as to give the client an opportunity to obtain substitute counsel. 5 Given the unsettled state of the law, attorneys should take care to clarify the extent of their undertaking in the original fee agreement. 6

§18.7 lEC-23. Cf. Model Rule 1.16, Comment [I]. 2See Chapter 19. 3New York City Op. 1986-6; Wolfram, supra § 18.3.2 note 2, at 531. 4Vt. Op. 77-5 (undated). 5Id. 6C£ Florida Bar v. Dingle, 220 So. 2d 9 (Fla. 1969) (agreement that litigation would be conducted only at trial level); N.Y Op. 604 (1989) (limiting the scope of representation in a criminal case); N.Y Op, 613 (1990). See also Model Rule 1.2(c).

607

§18.8

§18.8

Withdrawal

Withdrawal and Malpractice

Improper withdrawal may not only result in the loss of a fee 1 or the filing of a disciplinary complaint.? but also lead to a malpractice suit based on neglect or abandonment. Chapter 1 noted the value of a termination or non-engagement letter as a device to cut off the claims of "potential clients" or "nonclients" who claim to have been left dangling-mistakenly assuming that an interviewer-lawyer was going to take action that the lawyer had no intention of taking. Ideally, withdrawal should be documented in similar fashion to ensure that a reviewing court will be satisfied that counsel took all reasonable steps to protect the client's interest. 3 Unfortunately, the reported cases suggest that such minimal precautions are often overlooked. Many counsel have been sued for lost claims and defenses because they failed to communicate and document their intention to drop a matter" or failed to document the client's decision to drop a matter." Moreover, some courts have applied the requirement of notice strictly; these courts suggest that notice must be "unequivocal" and specify the date and hour that counsel intends to apply for a withdrawal order. 6 Similarly,some courts have suggested that the period of limitations for a legal malpractice claim may be extended as a result of an ineffective withdrawal or insufficient notice of withdrawal. 7 An untimely withdrawal may be actionable as neglect or abandonment if successor counsel cannot be found in time to preserve the client's rights," or if the client's preparation or presentation suffers as a result of the withdrawal. 9

§18.8 'See §18.3.2. 2See §18.4. 3In re Price, 244 Ga. 532, 261 S.E.2d 349 (1979) (statute of limitations allowed to run). 4In re Geurts, 290 Or. 241, 620 P2d 1373, 1376 n.6 (1980). SIn re Rosenthal, 90 N J. 12, 446 A.2d 1198, 1200 (1982). 6Cardotv. Luff, 164 W Va. 307, 262 S.E. 889 (1980). 7Cf United Fidelity Life Ins. Co. v. Best, Sharp, Thomas and Glas, 624 F2d 145 (10th Cir. 1980); Van Horn Lodge, Inc. v. White, 627 P2d 641, 645 (Alaska 1981) (dissenting opinion). 8Lehmann, supra §18.4 note 7. "Cf Delesdernier v. Porterie, 666 F2d 116 (5th Cir. 1982) (damages awarded for

608

Withdrawal

§18.8

Preventive Ethics Checklist VV7zenYou Must Withdraw D You foresee that representation of the client will result in your violation of the law or ethical rules; this includes a foreseeable conflict with another client or former client. D You are unable physically or mentally to afford effective representation. D The client discharges you. VV7zenYou May Withdraw D Withdrawal will not harm the client. D The client has used your services to commit a wrong. D You foresee that the client will use your services to commit a wrong. D The client has not paid the agreed-on fee. D You consider the client's objective to be imprudent or immoral. The Mechanics qf Withdrawal D File a timely motion with notice to the client and opposing counsel. D Do not exercise a retaining lien on the client's papers for unpaid fees unless certain that such a lien is legal in your jurisdiction; consider asking the court to order that the client post security for your fee as a condition of return of the papers. D Cooperate with successor counsel. Confidences and Secrets D Reveal only what is necessary for the court to rule on the motion to withdraw. D Do not threaten to reveal the client's confidential information to coerce the client into paying the fee. D Warn those persons whom you foresee may be adversely affected by the client's future fraudulent use of documents you prepared; do not warn any other persons about the documents. mental anguish, although successor counsel obtained an extension of time for trial preparation).

609

§18.8

Withdrawal

Duty to Appeal

o

o

610

Make it clear in the attorney-client agreement whether or not you are agreeing to appeal an adverse decision. Protect the client by filing a notice of appeal if the client is unable to obtain successor counsel.

19 Appeal

§l9.l §l9.2 §l9.3 §l9.4

§19.1

Introduction Frivolous Appeals Criminal Appeals Appellate Malpractice

Introduction

Much that has been said regarding trial ethics applies directly to ethics at the appellate level.I Indeed, many of the authorities cited in connection with deceptive and inadequate briefing are appellate cases. One survey suggests that appellate counsel have not taken seriously the responsibility to cite adverse authority not cited by opposing counsel. 2 Well-respected commentators have urged that

§19.1 'For an excellent summary of the ethics of appellate practice, see Medina, Ethical Concerns in Civil Appellate Advocacy, 43 Sw. LJ. 677 (1989). 2T. Marvell, Appellate Courts and Lawyers 136 (1978).

611

§19.1

Appeal

[0] ne partial solution to the problem lies in tighter discipline for the appellate bar. One simple step that is rarely taken, but which would have some effect, is to return inadequate briefs to counsel for re-submission."

The same authorities have pointed out that delay in briefing is "endemic," that courts "freely grant extensions of time on little or no showing of cause," and that courts tend to "ignore noncompliance when opposing counsel does not object."? This problem has been recognized by some courts, and sanctions for delay are occasionally imposed." Finally, there is some evidence that ex parte communications continue to plague the appellate courts despite the prohibitions contained in the judicial" and lawyer" ethical codes. Law clerks are apparently a frequent target of such communications.f There have been reported instances in which lawyers have sent letters after oral argument alluding to additional authorities or responding to points that came up in the arguments. The practice of sending such letters is clearly inappropriate if the opposing lawyer is not favored with a copy of the letter. 9 There is little reason to dwell on such matters. It should be selfevident that misrepresentation and delay will almost always jeopardize the client and harm the lawyer's reputation.

§19.2

Frivolous Appeals

In order to compensate winners of judgments in the district courts for the expense and delay associated with meritless appellate arguments I 3p Carrington, D. Meador, and M. Rosenberg,Justice

on Appeal 81 (1976).

4Id. at 87.

julien v. Zeringue, 864 F2d 1572 (Fed. Cir. 1989) (disregard of the attorney's duties to the court; sanctions imposed on plaintiff's attorney personally under 28 U.S.C. § 1927 for, inter alia, requesting at least ten extensions of time to file briefs); In re Gubbins, 890 F.2d 30 (7th Cir. 1989) (attorney suspended sua sponte for three months for continually moving for extensions to file appellate briefs and for late filings; opinion includes a detailed account of prior reprimands in published opinions). 6ABA Code of Judicial Conduct Canon 3(B)(7). 7Model Rule 3.5; DR 7-11O(B). 8See Marvell, supra note 2, at 83. 9Id. at 84. §19.2 IN.E. Alpine Ski Shops v. U.S. Divers ce., 898 F.2d 287 (1st Cir. 1990) ("From aught that our analysis has revealed to us, Alpine compelled Divers to attend our

612

Appeal

§19.2

and to deter frivolous appeals," Federal Rule of Appellate Procedure 38 provides: If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee."

Pursuant to this rule, damages may be sought by motion or pursuant to notice+ and may be imposed on counsel personally, 5 on the client, or on both the attorney and the client." Damages may include attorney fees? and costs reasonably incurred by the winning party" Only expenses, attorney fees, and costs associated with the improper conduct on appeal are to be awarded as damages." The offending party does not become automatically liable for all the expenses incurred on appeal by the opponent.

venue, hoping for nothing less than a miracle. VVeappreciate only too well how bereft of promise Alpine's hopes were for obtaining the requested relief at this level." Defendant was awarded attorney fees with double costs "in attending this nonevent.") 2Rodriguez Alvarez v. Bahama Cruise Line, 898 F2d 312 (2d Cir. 1990) ("One might gather from the tone of this opinion our genuine dismay that [defendant] has persisted in litigating this case. Although a party which loses in the district court has the right to pursue any and all bona fide arguments upon appeal, the right to an appeal does not grant a party a license to clog the appellate docket by advancing meritless arguments for the sole purpose of harassing the prevailing party and subjecting it to undue time and expense." Plaintiff was awarded attorney fees and reasonable costs of appeal.). See also Ruderer v. Fines, 614 F2d 1128 (7th Cir. 1980); Clarion Corp. v. American Home Prods. Corp., 494 F2d 860 (7th Cir. 1974). 3Fed. R. App. P. 38 (1994). 4Federal Rule 38 was amended in 1994 to require notice and an opportunity to respond, which the Advisory Committee believed were elements of due process. :Julian v. Zeringue, 864 F.2d 1572 (Fed. Cir. 1989); Westinghouse Elec. Corp. v. NLRB, 809 F.2d 419, 425 (7th Cir. 1987); Hamblen v. County of Los Angeles, 803 F.2d 462 (9th Cir. 1986); Good Hope Refineries, Inc. v. Brashear, 588 F.2d 846 (1st Cir. 1978). 6American Sec. Vanlines, Inc. v. Gallagher, 782 F.2d 1056 (D.C. Cir. 1986); United States v. Nesglo, Inc., 744 F2d 887 (I st Cir. 1984) (Rule 38 and 28 U.S.C. § 1927). 7Church of Scientology of Cal. v. McLean, 615 F.2d 691 (5th Cir. 1980); United States v. Rayco, Inc., 616 F2d 462 (10th Cir. 1980). 8Ginsberg v. Stern, 295 F.2d 698 (3d Cir. 1961) (fees and printing costs, etc.). 9Coane v. Ferrera Pan Candy Co., 898 F.2d 1030 (5th Cir. 1990).

613

§19.2

Appeal

The standard for the imposition of sanctions under Federal Rule 38 is objective; 10 as under Federal Rule 11,II sanctions may be imposed even though the attorney was acting in good faith. 12 As one court observed: We find merely that [counsel] made (we assume in perfect good faith) objectively groundless legal arguments for which a monetary sanction is proper in order to protect this court's ability to serve litigants with meritorious cases and in order to make lawyers give thoughtful consideration to whether there are grounds for an appeal before filing an appeal. This is not a new principle. The filing of an appeal should never be a conditioned reflex. 'About half the practice of a decent lawyer consists in telling would-be clients that they are damned fools and should stop."!"

As in Federal Rule 11 cases, sanctions should not be imposed on attorneys who assert colorable, but unsuccessful, claims on matters of first impression. 14 State decisions are similar to federal cases decided under Federal Rule 38. Many state cases involve money sanctions for frivolous appeals. 15 Furthermore, disciplinary counsel are now treating the frivolous appeal as a serious offense. 16 In addition, some states have adopted new procedural rules designed to deter frivolous appeals. 17 IOContrast 28 U.S.C. §1927, which authorizes courts to require attorneys who "unreasonably and vexatiously multiply the proceedings" to pay "excess costs, expenses, and attorneys' fees reasonably incurred as a result of such conduct." Most courts hold that the statute requires bad faith. See discussion of 28 U.S.C. §1927 in Chapter 2. "See discussion in Chapter 2. 12See Hill v. Norfolk and W. Ry , 814 F.2d 1192 (7th Cir. 1987) (citing Bacon v. American Feeln. of St., County, and Mun. Employees Council # 13, 795 F.2d 33, 35 (7th Cir. 1986)). 13Id. at 1192 (quoting LJessup, Elihu Root 133 (1938). Accord Simon and Flynn, Inc. v. Time, Inc., 513 F.2d 832 (2d Cir. 1975) (condemning "knee-jerk" appeals); Tupling v. Britton, 411 A.2d 349 (D.C. 1980) (proper representation includes appraisal of merit of appeal and risks of frivolity). 14Inre Rufener Constr., Inc., 53 F.3d 1064 (9th Cir. 1995); Bhattacharya v. Copple, 898 F.2d 766 (lOth Cir. 1990). "Nelson v. Nelson, 137 Ariz. 213,669 P.2d 990 (Ct. App. 1983); Maple Properties v. Harris, 158 Cal. App. 3d 997,205 Cal. Rptr. 532 (1984) ($20,000 sanction for frivolous grounds viewed as "severable" from nonfrivolous grounds); Fowler v. Psychiatric Sec. ReviewBd., 65 Or. App. 347,671 P.2d 755 (1983). 16People v. Kane, 655 P.2d 390 (Colo. 1982); In re Paauwe, 294 Or. 171, 654 P.2d 1117 (1982). Compare In re Campos, 737 F.2d 824 (9th Cir. 1984) (temporary suspension from practice before federal appellate court, in addition to money sanction). 17See,e.g., Ky App. Rule 73.02(4) (1985) (based in part on the federal rule).

614

Appeal

§19.2

An appeal is frivolous and warrants the imposition of a sanction "if the result is obvious, or the arguments of error are wholly without merit." 18 Misleading references to the record, 19 gross exaggeration.i" or the citation of inapposite authority'" is almost certainly going to arouse suspicions regarding the overall merit of the client's position. An appeal may be sanctionable under Federal Rule 38 though the legal argument was not sanctionable at the trial level.22 Though sanctions on direct appeal may be unwarranted, a frivolous petition for rehearing can become the basis for sanctions. 23 As in the case of Federal Rule 11, courts require a party prevailing on a sanction motion to mitigate damages. Excessive effort should not be spent defending a frivolous appeal. In Brooks v. Allison Division oj General Motors Corp., 24Judge Posner denied reimbursement to defendant for its "full fledged printed brief on the merits" when the basis for summary judgment at the trial level was the statute of limitations. "[T]oday we take the next step and deny an otherwise meritorious motion for sanctions because the movant failed to take reasonable steps to mitigate the burdens imposed on it by the frivolous pleading for which sanctions are sought."25 Furthermore, "this court, which had to read its needlessly prolix finding, was a victim, tOO."26 What is the relationship of Federal Rule 11 to appellate practice? In Mays v. Chicago Sun Times." the court fined the attorney pursuant to Federal Appellate Rule 46(c) for filing an appellate brief not well grounded in fact or law. Although Rule 11 was not expressly incorporated into the rules of the Seventh Circuit, the court stated that Rule 11 IBDeWitt v. Western Pac. R.R., 719 F.2d 1448 (9th Cir. 1983). 19United States v. Lachman, 803 F.2d 1080 (9th Cir. 1986) (misrepresentation of record); In re Curl, 803 F.2d 1004 (9th Cir. 1986); Herzfeld and Stern V. Blair, 769 F.2d 645 (10th Cir. 1985). 2°ln re Chakeres, 101 N.M. 684, 687 P2d 741 (1984). 210perating Engs. Pension Trust V. Cecil Backhoe Serv., Inc., 795 F.2d 1501 (9th Cir. 1986). 22Coghlan v. Starkey, 852 F.2d 806 (5th Cir. 1988) (the trial court opinion explained the position's lack of support, making any appeal frivolous). 231nre Becraft, 885 F.2d 547 (9th Cir. 1989) (Federal Rule 38 sanction against defense counsel in a criminal case where, inter alia, counsel filed a frivolous petition for rehearing). 24874 F.2d 489 (7th Cir. 1989). 2sld. at 490. 261d.at 490-491. 27865 F.2d 134 (7th Cir. 1989).

615

§19.2

Appeal

helps define the requirements for conduct of an attorney who practices before the court of appeals for purposes of Rule 46(c).28 The Supreme Court resolved the applicability of Federal Rule 11 to groundless appeals of sanction awards in Cooter and Gell v. Hartmarx Corp.29 The Court held that the court of appeals cannot direct the district court to add to the amount of the Rule 11 judgment the costs incurred in getting the sanctions affirmed on appeal. Neither the language of Rule 11 nor the drafters' intent allows the award of costs incurred in the appellate court. Federal Rule 38 governs the litigants' conduct on appeal. "If the appeal of a Rule 11 sanction is itself frivolous, Rule 38 gives appellate courts ample authority to award expenses."30 Federal appeals courts are empowered to suspend lawyers from practice before them pursuant to Federal Appellate Rule 46(c).31Appellate courts have the right to expect lawyers to be forthright in stating what transpired below, and conscious misrepresentation of the record should therefore be severely punished.F While a lawyer should know the record, she should never guess if uncertain what transpired below. In DCD Programs, Ltd. v. Leighton,33 with apparent good faith;" the attorney assured the appellate court that the trial judge had made specific findings in denying a motion to amend a complaint. In fact, the finding was made in connection with the entry of a final judgment order. As a result of his careless reading of the record, the lawyer was suspended from practicing before the appellate court for two months.P A lawyer may also be sanctioned for failing to disclose that the case might be moot." In such a case, the appellate court might wish to dismiss, rather 28Id. at 139. 29496 U.S. 384, 110 S. Ct. 2447, 110 L. Ed. 2d 359 (1990). SOld.at 407,110 S. Ct. at 2462; Alliance to End Repression v. City of Chicago, 899 F.2d 582, 584 (7th Cir. 1990) (successful party on appeal ordered to pay losing party's attorney fees attributable to defending a "foolish" request for sanctions filed by winning party). 31Fed. R. App. P 46(c); In re Solerwitz, 848 F.2d 1573 (Fed. Cir. 1988). 32In re Boucher, 837 F.2d 869 (9th Cir. 1988) (six-month suspension for conscious misrepresentation of the record). 33846 F.2d 526 (9th Cir. 1988). 3+Id.at 528 (at the show cause hearing, he acknowledged his error and attributed it to careless reading of the record). 35Id. 36S & D Cal. Fruit Exch., Inc. v. Gurino, 783 F.2d 345 (2d Cir. 1986); Douglas v. Donavan, 704 F.2d 1276 (D.C. Cir. 1983); Medina, supra §19.1 note 1, at 695-697 (collecting cases).

616

Appeal

§19.3

than to expend judicial resources deciding a matter that no longer impacts the litigants.

§19.3

CriIninal Appeals

Sanctions against frivolous appeals can pose a dilemma for the appointed criminal defense attorney. On the one hand, the lawyer is obligated to present his client's claims to the court; on the other hand, the lawyer is under a duty not to burden the court with frivolous claims. This dilemma was presented to the United States Supreme Court in the much-cited, and much-criticized, case of Anders v. California:' In that case, the Court suggested that one solution to the dilemma would be for counsel to advise the appellate court of the frivolity of the client's appeal and withdraw, at the same time filing an accompanying brief referring to anything in the record that might support an appeal. As a number of commentators have pointed out, this "schizophrenic" solution puts counsel in the position of choosing between (1) filing a motion and then a brief opposing the motion or (2) staying in the case and briefing and arguing a frivolous appeal. 2 Similarly, Professors Carrington, Meador, and Rosenberg have observed that lawyers may be too ready to forgo a brief on the merits in favor of an Anders brief Since it is very unlikely that an appellate court will see merit in arguments the defense lawyer says are frivolous, the availability of the Anders remedy probably means that substantial issues are occasionally overlooked." Finally, the Anders brief has been criticized as "unduly burdensome in that it tends to force the court to assume the role of counsel for the appellant.?"

§19.3 1386 U.S. 738,87 S. Ct. 1396,18 L. Ed. 2d 1493 (1967). 2Doherty, Wolf! Wolf!- The Ramifications of Frivolous Appeals, 59 J. Crim. Law, Criminology and Police Science 1,2 (1968). In Smith v. Pennsylvania Board of Probation and Parole, 524 Pa. 500, 574 A.2d 558 (1990), the court held that a court-appointed attorney may be sanctioned with costs and fees for the filing of a frivolous appeal. Though appellate counsel is constitutionally required to represent his client, this does not justify frivolous arguments or claims when appellate counsel has chosen not to file an Anders brief 3Carrington, Meador, and Rosenberg, supra § 19.1 note 3, at 77-78. 4Huguley v. State, 253 Ga. 709,324 S.E.2d 729 (1985) ("the Anders motion will no longer be entertained in this court").

617

§19.3

Appeal

In Jones v. Barnes.' a divided Supreme Court held that assigned counsel does not have a duty to raise every nonfrivolous issue requested by the defendant-appellant." Jones gives counsel the freedom to make reasonable tactical choices when it appears counterproductive to assert every nonfrivolous issue. In addition to Jones, the following Supreme Court cases bear on the responsibility of appellate counsel in criminal cases: Pennsylvania o. Finley.' ruling that a state need not afford the Anders procedures to those attacking their convictions in collateral proceedings; A1cCC!)!v. Court qf Appeals of Wisconsin,8 upholding a state requirement that an Anders brief list the reasons why the attorney believes the appeal lacks merit; and Penson v. Ohio, 9 reaffirming the requirements that the brief discuss the potential issues, and that the appellate court review the record and the brief before discharging appellate counsel from further responsibilities. It is obvious that one of the requirements of Anders is that the attorney communicate with the client. Only then can the attorney tell the appellate court what the defendant thinks went wrong. 10 When a lawyer does not communicate with the client, a harmless error approach is inappropriate. II The court should direct defense counsel to confer with the defendant and then file a supplemental brief setting out the defendant's contentions.

§19.4

Appellate Malpractice

In both civil and criminal cases, between one-third and one-half of the

time the appellate brief writer will not have been involved in the trial of the case. I No doubt this is frequently due either to client dissatisfaction with the trial counsel's performance or to trial counsel's withdrawal

5463 US. 745, 103 S. Ct. 3308, 77 L. Ed. 2d 987 (1983). 6Id. at 753, 103 S. Ct. at 3313. 7481 US. 551, 107 S. Ct. 1990, 95 L. Ed. 2d 539 (1987). 3486 US. 429,108 S. Ct. 1895, 100 L. Ed. 2d 440 (1988). 9488 US. 75, 109 S. Ct. 346,102 L. Ed. 2d 300 (1988). IOFreelsv. Hills, 843 F.2d 958, 962 (6th Cir. 1988). llId. at 963. §19.4 'Marvell, supra §19.1 note 2, at 53.

618

Appeal

§19.4

following a determination that the case does not merit an appeal. 2 In addition, there is substantial evidence that appellate work, like trial work, is becoming more of a specialty.3 When new counsel enters the case on appeal, the possibility of error is compounded because delay in securing successor counsel may result in the missing of procedural deadlines, such as the time for filing a notice of appeal.' On the other hand, a new lawyer will be much more likely to scrutinize the record below for error in presentation, conflicts of interest, or other mistakes by trial counsel. 5 Appellate counsel must read and follow the applicable rules of appellate procedure. Counsel might find that appellate courts do not forgive procedural mistakes, and that a seemingly slight error is fatal to the appeal. 6 Consequently, it is important for counsel to closely read the procedural rules, calendar the steps in the process, and follow the rules exactly. No lawyer wants to explain to a client that the court returned the brief (with the appeal delayed) because the brief did not comply with the requirements of the rule. 7 Appellate counsel must find and present relevant authorities, including cases reported in the advance sheets." Courts are less willing to impose on counsel a duty to locate decisions that have not been officially reported, and many courts have rules forbidding the citation of unreported cases." Nonetheless, the prudent appellate lawyer will read 2The traditional rule has been that the trial lawyer's representation ends with the entry of judgment. But see discussion in Chapter 18. 3See Marvell, supra §19.1 note 2, at 52-56; Medina, supra §19.1 note 1, at 680 (suggestion that it might be negligence not to refer a case to "appellate counsel"). 4Carrington, Meador, and Rosenberg, supra §19.1 note 3, at 83. SId. at 84. In ABA Informal Opinion 1465 (1981), the ABA Committee opined that neither the Code nor the Model Rules prohibit or require appellate counsel to advise on trial counsel's malpractice. But cf Medina, supra §19.1 note 1, at 681 ("It is uncertain whether the Committee's reasoning would exonerate a civil appellate counsel from notifying the client of possible trial malpractice."). Medina discusses the possibility of sidestepping such a duty by a "limitation of objectives" pursuant to Model Rule 1.2(c). 6C£ Workers' Compensation Bd. v. Siler, 840 S.W2d 812 (Ky. (992) (dismissal of appeal when notice was mailed within time period, but not received by the clerk until after the period had expired). lCf. Fed. R. App. P. 28. BBoss-Harrison Hotel Co., Inc. v. Barnard, 148 Ind. App. 406, 266 N.E.2d 810 (1971). 9Regarding opinions that are not officially reported, compare Procanik v. Cillo, 206 NJ. Super. 270, 502 A.2d 94 (1985), reo'd on other grounds, 226 NJ. Super. 132,543 A.2d 985 (App. Div. 1988).

619

§19.4

Appeal

nonfinal and unreported cases, for often those cases hold clues to the court's thinking on pertinent issues. An attorney may be charged with negligence for failing to raise an issue on appeal. Nevertheless, there is some room for discretion in selecting arguments to be raised on appeal. Sound strategy may advise selectivity as opposed to a shotgun approach. 10 In addition, this judgmental immunity has occasionally been extended to making admissions in a brief I I or oral argument. 12 The highest hurdle faced by the would-be malpractice plaintiff is the need to prove that but for the attorney's negligence, the appeal would have been successful.13 Furthermore, it will ordinarily be incumbent on the plaintiff to prove that a favorable result would have been obtained after a successful appeal. 14 In addition to these problems of proof, disgruntled clients frequently fail to satisfy their own obligations regarding the prosecution of the appeal-specifically, payment of the fees and expenses associated with same. 15 In such instances, the client has breached the contract, and the attorney may be excused from proceeding with the appeal. 16 Preventive Ethics Checklist In General Do not make an argument that is not supported by precedent or principle. Research the law of the jurisdiction thoroughly. Read and follow the applicable rules of appellate procedure. Know the record. Do not make hurtful factual concessions in oral argument.

o o o o o

10SeeMarvell, supra §19.1 note 2, at 126. See also Jones v. Barnes, 463 U.S. 745, 103 S. Ct. 3308, 77 L. Ed. 2d 987 (1983). "Woodruff v. Tomlin, 616 F2d 924 (6th Cir. 1980). See also Trustees v. Schroeder, 2 Ill. App. 3d 1009,278 N.E.2d 431 (1971) (omitted issue would not have changed result). 12C[ Barker v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 33 L. Ed. 2d 101 (1972), the leading case interpreting the speedy trial clause of the sixth amendment. During oral argument, the defense counsel conceded that his client did not want a trial. Justice Powell quoted the lawyer's concession in rejecting the speedy trial claim. 13Croce v. Sanchez, 256 Cal. App. 2d 680, 64 Cal. Rptr. 448 (1967). 14Better Homes, Inc. v. Rodgers, 195 F Supp. 93 (N.D.W. Va. 1961). 15Model Rule 1.16(b)(4). 16Id.But see discussion in Chapter 18.

620

Appeal

§19.4

Criminal Appeals Communicate with the client; raise all issues the client insists on raising in either a brief on the merits or an Anders brief Do not file an Anders brief if there is a'?Y merit to the client's claim of error.

o

o

621

20 Discipline, the Courts, and Ethics Committees

§20.l §20.2

§20.3

§20.4

§20.1

Introduction The Disciplinary Process §20.2.l Workload §20.2.2 Attorney Reporting of Misconduct §20.2.3 Abuse of the Disciplinary Process The Role of the Courts §20.3.l Sources of Judicial Authority §20.3.2 The Judicial Response §20.3.3 Advantages of Judicial Resolution The Role of Ethics Committees §20.4.l Jurisdiction and Procedure §20.4.2 Workload §20.4.3 Immunities

Introduction

Disciplinary agencies serve a prosecutorial function triggered by complaints of attorney misconduct. The courts are charged with the supenn623

§20.1

Discipline, Courts, Ethics Conunittees

sory function of policing the conduct of attorneys practicing before them. National, state, and local ethics committees serve interpretioe and advisory functions with respect to attorneys' anticipated conduct. Disciplinary agencies, courts, and ethics committees all have critical roles in the application of professional standards.

§20.2

The Disciplinary Process

§20.2.1

Workload

Complaints to disciplinary agencies come from four sources: clients, judges, opposing counsel and clients of opposing counsel, and other lawyers. The first source appears to account for the majority of complaints. 1 The types of misconduct that are most commonly reported are those that are easily discovered and understood by clients such as fee gouging, conversion, fraud, felony conduct, and solicitation. Neglect is probably underreported. Other types of misconduct, such as inadequate preparation, failure to make court appearances, presentation of false testimony or false or distorted evidence, improper influence of a witness, suppression of evidence, the filing of sham papers and pleadings, discovery abuse, and conflicts of interest, are more likely to be raised by the court or opposing counsel. In those cases, the misconduct is usually dealt with by court-imposed sanctions, rather than by complaint to a disciplinary authority. For these reasons, disciplinary authorities see only a small portion of the instances in which misconduct has occurred. §20.2.2

Attorney Reporting of Misconduct

Students of the disciplinary system agree that reports by lawyers of other lawyers' ethical misconduct account for a relatively small percent-

§20.2.1 'Levy, TheJudge's Role in the Enforcement of Ethics-Fear ing in the Profession, 22 Santa Clara L. Rev. 95, 103 (1982).

624

and Learn-


§20.2.2

age of the workload of disciplinary agencies. 1 There are a variety of reasons why lawyers are reluctant to play the role of whistle-blower. To begin with, some violations of the ethics rules are trivial. Disciplinary Rule 1-103 imposes a duty on lawyers to report all violations of the Code, regardless of the seriousness of an offense or its relationship to honesty or corrupt motive." However, this broad duty to report is too unrealistic to be enforced. In contrast, Model Rule 8.3 compels reporting only of violations that raise a "substantial question as to [the] lawyer's honesty, trustworthiness or fitness as a lawyer in other respects." In addition, neither the Disciplinary Rule nor the Model Rule requires reporting in certain situations. Reporting the conduct of an opposing party, an opposing party's lawyer, or a third person might be detrimental to the client. When this is true, reporting is inappropriate. 3 This analysis also applies to the lawyer's duty to report unauthorized

§20.2.2 'Levy; supra §20.2.1 note I, at 103 (citing Steele and Nimmer, Lawyers, Clients and Professional Regulation, 1976 Am. B. Found. Res.]. 917, 974; Marks and Cathcart, Discipline within the Legal Profession: Is It Self-regulation?, 1974 Ill. L. Found. 193 (1974)). 2But see Canon 29 of the ABA Canons of Ethics, which only required a lawyer to "expose ... corrupt or dishonest conduct in the profession." 3Ethics opinions under the Code include Louisiana Opinion 422 (1983) (conduct of third person where disclosure detrimental to client or opposed by client), Michigan Opinion CI-578 (1983) (criminal conduct of opposing counsel in obtaining evidence), New York Opinion 1990-3, and Ohio Opinion 90-1 (1990) (no duty to disclose if information gained in the professional relationship and the client requests that the information not be disclosed). Under the Model Rules, see R.I. Op. 9271 (1993) (In re Himmel, infra, rejected); Wis. Op. E-89-12 (1989) (same result under Model Rule 8.3). These opinions necessarily follow from the sweeping definition of protected client information in Model Rule 1.6 as well as from the ABA view that privileged information includes client secrets for purposes of the Code. See ABA Formal Op. 341 (1975). But cf Neb. Op. 89-4 (1989) (construing meaning of "unprivileged" narrowly, but requiring "knowledge" of misconduct as opposed to mere "suspicion"); Philadelphia Op. 88-23 (1988) (Model Rule 1.6 given a surprisingly narrow construction); in New York, DR 1-103(A) was amended to make it clear that the lawyer's duty to report another lawyer does not override the protection of client secrets. Contra In re Himmel, 125 Ill. 2d 531, 533 N.E.2d 790 (1988) (suspending lawyer for failing to report the conduct of his client's former counsel, despite the client's instructions not to disclose the information so that a settlement could be effected). For critical discussions of In re Himmel, see Burke, Where Does My Loyalty Lie?: In re Himmel, 3 Geo.]' Legal Ethics 643 (1990); Rotunda, The Lawyer's Duty to Report Another Lawyer'S Unethical Violations in the Wake of Himmel,

625

§20.2.2


practice (lawyer impostors)." Court rules may exempt bar counsel or ethics committee members from a reporting obligation> with a view to encouraging consultation on ethical matters. In the same spirit, Model Rule 8.3(c) allows members of Lawyers Helping Lawyers or Impaired Lawyers' Committees to maintain confidentiality." §20.2.3

Abuse of the Disciplinary Process

Because the "purpose of disciplinary proceedings ... [is] to maintain appropriate standards of professional conduct in order to protect the public and the administration of justice," I public policy favors some sort of tort immunity for persons filing complaints with disciplinary authorities. Most states provide an absolute immunity from retaliatory suits for libel or malicious prosecution." Yet it is obvious that the threat of a disciplinary action might be made in order to secure an advantage in a dispute with an attorney or an attorney's client. To curb that threat, DR 7-105(A)prohibits a lawyer from threatening, presenting, or participating in the presentation of criminal charges solely to obtain an advantage in a civil matter. Model Rule 3.4 does not carry forward this prohibition. Under the Model Rules, therefore, there is no ethical violation unless the threat constitutes a crime such as attempted theft by extortion. 3 1988 U. Ill. L. Rev. 977. For a collection of cases and commentary on the duty to report, see Medina, Ethical Concerns in Civil Appellate Advocacy, 43 Sw. LJ. 677, 687-689 (1989). 4Ky. Op. E-169 (1977). 5Underwood, Confessions of an Ethics Chairman, 16]. Legal Prof 125 (1991). But see In re Request for Instructions from Disciplinary Counsel, 610 A.2d 115 (R.I. 1993). 6The exemption in Model Rule 8.3(c) for lawyers' assistance programs exempts information that would be privileged if there were an attorney-client relationship. Comment [5] makes it clear that reporting is required if the lawyer is engaged in criminal conduct such as conversion of client monies. §20.2.3 lABA Standards for Lawyer Discipline and Disability Proceedings, Standard 1.1 (1979). 2See In re Hearing on Immunity for Ethics Complainants, 96 NJ. 669,477 A.2d 339 (1984). Report of the ABA Special Commission on Evaluation of Disciplinary Enforcement, Recommendation 8 (Complainant Immunity) (1989). Cf State v. Rome, 235 Kan. 642, 685 P.2d 290 (1984) (attorney reprimanded for initiating retaliatory criminal complaints alleging perjury of witnesses in a judicial removal proceeding). "Threatening disciplinary action would be theft by extortion if as a result of the threat the lawyer obtained money for her client that the client was not entitled to. ABA Formal Op. 92-363 (1992), discussed at §17.8; Model Penal Code §223.4.

626

Discipline,

Courts, Ethics Conunittees

§20.3.1

Some states include the prohibitions in DR 7-105(A) in their versions of the Model Rules, and at least one state extends that prohibition to a threat to bring disciplinary charges." Other states have reached the same result through ethics committee opinions. 5 The authors believe that it is improper for an attorney to use the threat of disciplinary charges as a litigation tool. The Model Rules should be amended to prohibit threats to bring civil, criminal, or disciplinary charges solely to obtain a collateral advantage in litigation.

§20.3

The Role of the Courts

§20.3.1

Sources ofJudicial Authority

Canon 3(D)(2)of the ABA Code of Judicial Conduct provides: 1. A judge "who receives information indicating a substantial likelihood that an attorney has [violated the Rules of Professional Conduct] should take appropriate action." 2. [A] judge who knows that a lawyer has [violated the Rules of Professional Conduct by an act] that raises a substantial question as to the lawyer's honesty, trustworthiness, or fitness as a lawyer ... shall inform the appropriate authority" I The judge must report serious ethical violations. Less serious matters are to be dealt with in an "appropriate" manner. Appropriate measures include the imposition of money fines or other sanctions, disqualification,2 4Ky. R. Prof Con. 3.4(f). 5Mass. Op. 83-2 (1983). Nassau County Opinion 90-3 (1990) suggests that a lawyer should report her opponent's misconduct prior to discussing settlement in order to avoid any implication that the settlement was obtained by leverage. Unfortunately, such reporting may kill settlement and escalate the level of hostility. §20.3.1 1 ABA Code of Judicial Conduct Canon 3(D)(2) (1990). Not all states have adopted the 1990 Code. Canon 3(B)(3) of the 1972 Code (in effect in some states) provides that "[a] judge should [either] take or initiate appropriate disciplinary measures against ... lawyer for unprofessional conduct of which the judge may become aware." 20n the court's authority to disqualify counsel sua sponte, see MacArthur v. Bank of N.Y, 524 F. Supp. 1205 (S.D.N.Y 1981); State ex reI. Bryant v. Ellis, 301 Or. 633,724 P.2d 811 (1986); §3.9.2 of this text.

627

§20.3.1


fee forfeiture," and suspension.' Although there is some confusion as to the extent of the inherent power of courts to take disciplinary action," there is a growing consensus that such a professional policing responsibility is necessary and appropriate.f Some rules of procedure contain express grants of authority to the judiciary.7 §20.3.2

The Judicial Response

Critics of the lawyer disciplinary system point out that many of the same socioeconomic and emotional pressures militating against lawyer reporting of other lawyers' misconduct also work against judicial involvement. 1 In addition, other factors have contributed to judicial reluctance to resolve disputes over ethical matters. First, many judges view complaints of ethical violations as tactical ploys.? diverting the court from its primary business of disposing of cases." The judicial response to attorney misconduct varies depending on the individual judge's perception of the relative importance of the policing of lawyer misconduct." Second, many judges are simply unfamiliar with the lawyer codes, not to mention the gloss contained in treatises and ethics opinions. As a result, many judges prefer to refer such issues, as they arise, to a local ethics committee. A referral can cause delay and deprive the litigants of a timely opportunity to be heard. Finally, trial judges who would take an active role in policing lawyers have received little guidance from their appellate brethren. Typically, 3Giannini, Chin and Valenti v. Lee, 231 Cal. App. 2d 894, 42 Cal. Rptr. 394 (1995); Rice v. Perl, 320 N.W.2d 407 (Minn. 1982). See also Perl v. St. Paul Fire and Marine Ins. Co., 345 N.W.2d 209 (Minn. 1984) (malpractice insurance coverage issues). 4In re Gubbins, 890 F.2d 30 (7th Cir. 1989) (suspension from practice before the court for three months). 50n the inherent power of the court, see Nasco, Inc. v. Calcasieu Television & Radio, Inc., 894 F.2d 696 (5th Cir. 1990), aff'd sub nom. Chambers v. Nasco, Inc., 50 I U.S. 32,111 S. Ct. 2123, 115 L. Ed. 2d 27 (1991), discussed in §2.1. See also Ky. Op. E-32 (1967) (suggesting that a court must seek an ethics opinion from a bar committee or utilize the contempt power). 6Levy, supra §20.2.1 note 1; ABA Standing Committee on Professional Discipline, The Judicial Response to Lawyer Misconduct ii-iii (1984). 7E.g., Fed. R. App. P 46(c). §20.3.2 'Levy, supra §20.2.1 note I, at 106. 2Cf. Allegaert v. Perot, 565 F.2d 246, 251 (2d Cir. 1977). 3Cf. W. T. Grant Co. v. Haines, 531 F.2d 671, 677 (2d Cir. 1976). "Levy, supra §20.2.1 note 1, at 114.

628


§20.3.3

published opinions dealing with lawyer misconduct contain neither facts nor reasoning;" §20.3.3

Advantages of Judicial Resolution

Judicial resolution of disputes over ethics has certain advantages. The most important is that all parties may be heard on the matter. Resolution of actively litigated issues on the basis of a one-sided presentation to an outside committee is undesirable-and is avoided in most jurisdictions.' Many disputes require a hearing to resolve factual disputes. Moreover, a court is in a position to balance the relative hardships to the parties and impose an appropriate remedy. Disqualification, preclusion, a money sanction, or a reprimand may be appropriate in a given case. Finally, active judicial enforcement can serve important deterrent and educational functions that may not otherwise be served, given the gaps in the disciplinary net.? If counsel brings misconduct by opposing counsel to the court's attention, is counsel further required by DR l-103(A) or Model Rule 8.3 to report the misconduct to a state disciplinary authority? In many instances, bar counsel will not act if a matter is "in litigation,"? and in many instances, the only meaningful remedy (disqualification of counsel or exclusion of evidence) must be supplied by the court. Furthermore, a prompt judicial response will often solve the problem without need for further action. For these reasons, the court should be viewed as a "tribunal" or "professional" authority for reporting purposes, within the meaning of DR 1-1o 3(A) and Model Rule 8.3. Under that view, further reporting is unnecessary. Presumably, the judge will report the matter to the disciplinary authority if the judge believes it reflects on the offender's fitness as a lawyer," 'See ABA Standing Committee on Professional Discipline, supra §20.3.1 note 6, at VIII.3. See also Gaetke, Why Kentucky Should Adopt the ABA's Model Rules of Professional Conduct, 74 Ky. LJ. 581,595 (1985-1986); Levy, supra §20.2.1 note 1, at 112. §20.3.3 'See §20.4.1. 2See §20.2.1. But for criticism of judicial involvement, see Goldberg, The Former Client Disqualification Gambit: A Bad Move in Pursuit of an Ethical Anomaly, 72 Minn. L. Rev. 226 (1987). 3See ABA Standards for Lawyer Discipline and Disability Proceedings, Standard 8.10 (1979). 4ABA Code of Judicial Conduct Canon 3(D) (1990).

629

§20.4

§20.4


The Role of Ethics Conunittees

Several commentators have given ethics committees less than flattering reviews. Critics opine that the published opinions of such committees are lacking in "analysis," 1 and that "neither the inquiries nor the responses are likely to deal with major areas of concern" due to the 'Jurisdictional" limitation imposed on them.? In addition, these critics suggest that committee opinions have generally been ignored by the courts, a proposition that does not hold true in all jurisdictions. 3 Much of this criticism is based on a misunderstanding of the role of ethics committees. §20A.l

Jurisdiction and Procedure

Traditionally, ethics committees have provided formal and informal opinions regarding the propriety of an inquiring lawyer's anticipated course of conduct. Such opinions have been treated as advisory only, in the sense that a lawyer or a court can take issue with them and refuse to follow them. However, most court rules authorizing advisory ethics opinions provide that the opinions serve to protect the requesting lawyer from discipline if that lawyer follows the advice in the opinion. 1 In most states, ethics committees issue only formal or informal committee opinions. These are the product of time-consuming research and circulation, not to mention compromise. Accordingly, many committees cannot respond effectively to the desires of lawyers and judges §20.4 'C. Wolfram, Modern Legal Ethics 66 (1986) (citing Finman and Schneger, The Role of Bar Association Ethics Opinions in Regulating Lawyer Conduct, 29 UCLA L. Rev. 67 (1981)). For a discussion of the role of, criticisms of, and abuse of ethics committees, see Carro, The Ethics Opinions of the Bar: A Valuable Contribution or an Exercise in Futility?, 26 Ind. L. Rev. I (1992); Underwood, supra §20.2.2 note 5. 2Underwood, supra §20.2.2 note 5. 3See discussion at §20.4.2, dealing with "referrals" from trial judges. Several states provide for appellate review of published formal ethics opinions, which may result in judicial approval of the opinions, or at least comment on code provisions. See, e.g., Ky. Sup. Ct. Rule 3.530(5). See also Chanin, The Scope and Use of State Ethics Opinions, 14J. Legal Prof 161 (1989). §20.4.1 'See, e.g., Ky. Sup. Ct. Rule 3.530. Of course, an ethics opinion cannot override a lawful court order, and some courts accord advisory opinions little or no weight, even in the disciplinary context. See In re Himmel, 125 Ill. 2d 531, 533 N.E.2d 790 (1988) (ignored Ill. Op. 365 (1971)).

630


§20.4.1

who are involved in litigation and need an expedited answer. Delays are legendary.2 Increasingly, however, states provide "hot-line" numbers for attorneys who need quick answers to their ethical problems. 3 Ethics committees render advisory opinions to guide lawyers in their own future conduct. Given their jurisdictional limits, committees should not therefore opine on (1)matters of past conduct, (2) the propriety of another lawyer's conduct, (3) questions of law, (4) questions from the media, or (5)the powers of lawyers who are constitutional officers of government.4 Committees might also shun "disputes between lawyers" involving division of fees and firm breakups+ These 'jurisdictional" rules are much misunderstood and are a common subject of complaints from practicing lawyers. Yet adherence to these limitations preserves the committees' integrity. There is no way, of course, that a committee can provide guidance that will protect a lawyer from discipline if that lawyer has already acted. Such an opinion would not be "advisory." A committee may give an opinion relating to past conduct only if it is tied to anticipated future conduct (as in "Where do I go from here?"). Other limitations are designed to avoid misuse of the committees' services. Ethics committees do not hold hearings or take evidence. Instead, they respond to an attorney's ex parte presentation of "the facts." At the same time, attorneys must be assured that their requests will be treated confidentially.6 Committee members should not answer questions regarding the conduct of nonrequestor lawyers or lawyers representing only one side of a fight that has already been presented to a court. Ethics opinions are issued on the basis of an ex parte presentation of the facts. This reality invites abuse (ambushl) by litigants who would secure and then present 2For biting commentary, see Commonwealth v. Stenhach, 356 Pa. Super. 5, 514 A.2d 114 (1986) (committee criticized for one-year delay in answering question); S. Wishman, Confessions of a Criminal Lawyer 191 (1981) ("if you have a serious ethical question, they never give you an answer in time"). 3Davis, Ethics Plight? Just Dial for Expert Help, Natl. Lj., Aug. I, 1995, at AI9 (reporting on New Jersey's 1-900 hot-line number). See, e.g., Ky. Sup. Ct. Rule 3.530. "See, e.g., Ky. Op. E-297 (1984); ABA Standing Comm. on Ethics and Professional Responsibility, Rule of Procedure 4, in I ABA Informal Ethics Opinions 6 (1975). "See Ky. Op. E-297 (1984). Lately, bar associations are getting into this business by providing mediation or arbitration of disputes that might otherwise make lawyers look bad. See Ky. Sup. Ct. Rule 3.815 (effective 1993). 6See ABA Standing Comm. on Ethics and Professional Responsibility, Rule of Procedure 13 (The committee shall treat as confidential its files relating to requests for opinions).

631

§20.4.1

Discipline,

Courts, Ethics Conunittees

the "definitive views" of "the bar association" in a litigated matter. When the matter involves a dispute between lawyers, the judge can refer the matter to an ethics committee for an advisory opinion so long as notice is given to the attorneys and the attorneys are given an opportunity to comment on the opinion." Most committee members are also smart enough to reject requests for opinions from media representatives. The media generally want some quotable condemnation of a lawyer, the scoop on a request while a matter is under study, or fodder to inject into a political controversy. 8 Finally, many lawyers will ask elaborate questions involving the law or the practical or tactical aspects of handling a particular matter. Committees should not answer such questions. Committees are created to help lawyers with their ethical problems, not to serve as law clerks for attorneys unwilling or unable to do their own work. §20.4.2

Workload

Because of the jurisdictional limitations imposed on the typical committee (most notably that the committee cannot answer questions about past conduct or the conduct of opposing lawyers),many instances of misconduct do not come to the committee's attention. In addition, much of the work of more service oriented committees involvesthe delivery of telephone or letter responses that are not published or available for review by the academic critics. These considerations go a long way toward explaining why "outsiders" view published committee work product as involving "niggling and peripheral questions of a kind that might safely be raised about one's conduct on a lawyer's own letterhead."! It is impossible to generalize about the workload of state and local bar committees. However, in the authors' experience, the questions confronted run the gamut from trivial "business-getting" matters to the really tough questions arising in hard-fought civil and criminal litigation. Increasingly, inquiries come from federal or state trial judges, seeking guidance pursuant to Canon 3(B)(7) of the Code of Judicial Conduct, which provides for "the advice of a disinterested expert on the

7 ABA Code of Judicial Conduct Canon 3(B)(7) (1990). "Underwood, supra §20.2.2 note 5. §20.4.2 lWolfram, supra §20.4 note 1, at 66-67.

632


§20.4.3

law applicable to a proceeding before him if he gives notice to the parties of the person consulted and the substance of the advice, and affords the parties reasonable opportunity to respond."2 Use of this provision should promote judicial enthusiasm for the enforcement of the lawyer codes.

§20.4.3

Im:munities

Following the settlement of a 1976-1978 antitrust suit against the ABA, that body announced that its opinions were not binding on lawyers. I It might seem unlikely that a lawyer would sue a local or state bar, alleging an injury resulting from an advisory opinion solicited by that lawyer or another member of the bar, but several such suits have been brought." In Lawline v. American Bar Association, 3 the court held that "nonbinding" advisory opinions do not violate the antitrust laws. Even though the chance of a successful suit against a committee or committee members is remote, committee members should be immune from suit. Immunity might be accomplished by court appointment of committee members, or court approval of opinions, or both." Preventive Ethics Checklist

Disciplinary Process

o

o

Do not file an ethics complaint to gain a tactical advantage over an opponent. Respond fully and honestly to an ethics complaint filed against you.

Ethics Committees

o

o

Use the ethics committee for guidance on ethical questions you are facing. State the facts fully and honestly to the ethics committee.

2ABA Code of Judicial Conduct (1990). The applicable provision in the 1974 Code is Canon 3(A)(4). §20.4.3 lABA Informal Op. 1420 (1978). 2See Little and Rush, Resolving the Conflict between Professional Ethics Opinions and Antitrust Law, 15 Ga. L. Rev. 341 (1981). 3956 F. 2d 1378 (7th Cir. 1992). 4Ky. Sup. Ct. Rule 3.530; Little and Rush, supra note 2, at 364-373.

633

§20.4.3

o o

634


Remember that following the ethics opinion will protect you against discipline, but the opinion is not binding on the courts. Do not attempt to use the ethics committee for an opinion on the ethics of another lawyer.

Table of Cases

References are to section numbers. Abel, United States v., 12.4.5 Academy of Cal. Optometrists, Inc. v. Superior Ct., 18.6 Acceturo, Matter of GrandJury re, 2.4 Adler, Barish, Daniels, Levin and Creskoff Y. Epstein, 3.8.3 Admiral Theatre Corp. Y. Douglas Theater Co., 6.1!'2 Advance Sys., Inc. v. APV Baker PMC, 6.7.7 Ad-Vantage Tel. Directory Consultants, Ine. v. GTE Directories, 12.4.3 Aero Corp. v. Cross-Aero ServoCorp., 17.3 Aerojet-General Corp. V. Transport Indem. Ins., 5.3 Aetna Casualty and Sur. Co. v. Finney, 1!.6 Aetna Casualty and Sur. Co. v. United States, 15.5.1 Aetna Life Ins. CO. V. Nla Medical Serv., Inc., 2.2.4,8.4 Agent Orange Prod. Liab. Litig., In re, 10.3.5, 16.8.1 Akitoye, United States v., 12.4.5 Alamo, People v., 12.4.3 Alaska V. Employers Reinsurance Corp., 15.6.2 Albernaz V. United States, I!.II Albright v. Upjohn Co., 2.2.1 Alexanderv. Chevron, U.S.A., 18.3.1, 18.6 Alexander V. Knight, 5.5 Aleyska Pipeline Servo CO. V. Wilderness Socy., 2.1.1 Allegaert V. Perot, 8.7.1,20.3.2 Allen, United States v., 17.8.3

Allen V. State, 10.3.3 Allen and Co. v. Occidental Petroleum Corp., 6.7.6 Alliance to End Repression V. City of Chicago, 19.2 Allstate Ins. Co., In re, 15.3.3 Allstate Ins. CO. V. Keller, 15.7.1,15.8 Altschul v. Paine Webber, Inc., 3.9.2,8.2 Altvater, People v., 18.6 Alvord V. Wainwright, 14.2.3 Ambrose V. Detroit Edison Co., 17.7 Ambrose V. State Bar, 1.11 American Airlines, Inc., In re, 3.6.1,3.9.5 American Cable Publications, In re, 4.13 American Employers' Ins. Co. v. Medical Protective Co., 15.1!.1 American Mut. Liab. Ins. Co. v. Superior Ct., 15.3.1 American Protection Ins. CO. Y. MGM Grand Hotel-Las Vegas, 5.6,5.12.4 American Sec. Vanlines, Inc. Y. Gallagher, 19.2 Ames V. Putz, 1.11 Analytical, Inc. Y. NPD Research, Inc., 3.6.1 Anchor Packing Y. Pro-Seal, 3.6.2 Anders Y. California, 19.3 Anderson, People Y., 4.7, 4.8 Anderson, United States Y., 14.3.3 Anderson Y. Butler, 14.2.4 Anderson Y. Cryovac, 7.2.4 Anderson Y. Pistner, 5.12.3 Anderson Y. St. Mary's Hosp., 6.1!.1 Anker V. Brodniz, 5.5 Antar, United States Y., 9.6 Archuleta, People Y., 18.4

635

Table of Cases

Arizona v. Washington, 10.3.4 Arkansas v. Dean Foods Prods., 3.8.2, 3.8.3 Armbruster, State v., 13.5.2 Armedo-Sarmiento, United States v., 14.3.2 Armstrongv. McAlpin, 3.2,3.8.4,8.7.1 Arneja v. Gildar, l.9 Arnoldt v. Ashland Oil, Inc., 13.3.6 Arrington, United States v., 4.5,4.7,4.8, 14.3.4 A Sealed Case, 18.4.4 Associated Convalescent Enters., Inc., United States v., 2.1.2, 4.10, 4.14 Assurance Co. of Am. v. Haven, 15.1l.1 Atasi Corp. v. Seagate Technology, 3.8.4 Atlanta IntI. Ins. Co. v. Bell, 15.11.1 Aulicino, United States v., 9.3 Ausmus, United States v., 14.2.1 Automobile Underwriters Ins. Co. v. Long, 15.4 Avacus Partners L. P. v. Brian, 3.9.2 Ayala, In re, 5.12.2 Ayildiz v. Kidd, l.9 Ayres v. Canales, 4.13

Bachman v. Perschuck, 16.8.1 Bacon v. American Fedn. of St., County, and Mun. Employees Council #13, 19.2 Badalamenti, United States v., 14.7.3 Badger, United States v., 13.1 Baird v. Koerner, 14.5 Baker v. Bridgestone/Firestone Inc., 3.8.5 Balistrieri, United States v., 9.6 Ball v. United States, 13.5.4 Ballard v.Jones, 13.5.3 Banks, In re, 3.4.1 Bareto v. Citibank N.A., 6.11.1 Barham v. Nowell, 5.9 Barkerv. Wingo, 19.4 Barnes, United States v., 9.3 Barnhill v. United States, 5.12.2 Barough Eaton Allen Corp. v. International Business Machs. Corp., 6.5.1 Bar Plan v. Campbell, 2.3.5 Barrett v. Peterson, 9.4 Barry, In re, l. 7.2 Batchelder, United States v., 11.11

636

Batson v. Kentucky, 8.9,9.4 Battaglia v. United States, 5.8 Baugess v. Paine, 2.1.1 Baxt v. Liloia, l.9 Baxter v. Thomas, 14.2.1 Baxter v. Vick, 6.5.3 Baylson v. Pennsylvania Sup. Ct. Disciplinary Bd., 14.5 Bays v. Theran, l.4, 3.6.3 Beatrice Foods v. New England Printing, 2.3.4 Beattie v. Firnschild, 3.5.2 Becker v.Julian, Blitz and Schlesinger, 17.8.1 Becraft, In re, 19.2 Becton v. Barnett, 14.2.1 Beef Neb., Inc. v. United States, 10.3.2 Beiny v. Wynyard, 5. 10 Belfonte v. Miller, 11.3 BeIge, People v., 14.4 Beliveau v.John B. Varick Co., 13.3.4 Bell Aerospace Corp. v. Anderson, 11.6 Belli v. Shaw, l. 6 Benecke v. Lockheed Corp., 9.6 Bennefield, State v., 13.6.4, 13.8 Berger v. United States, 13.3.3 Bergstrom v. Sears, Roebuck and Co., 17.3 Bernard v. Gulf Oil Co., 16.4.3 Berry v. State, 13.10 Bertagnolli, People v., 13.3.1 Better Homes, Inc. v. Rodgers, 19.4 Bevevino v. Saydjari, 15.9 B. F. Goodrich v. Formosa Plastics Corp., 3.6.3 Bhattacharya v. Copple, 19.2 Biderman Indus. Licensing, Inc. v. Avrnar N.V, 3.9.1 Biegenwald, State v., 7.2.2 Bird v. Rothman, l.9 Black, United States v., 5.12.1 Blackburn v. Foltz, 14.2.1 Blackburn v. Goettel-Blanton, 8.4 Blackie v. Barrack, 16.10 Blackwell v. Department of Offender Rehabilitation, 16.8.4,16.10 Blackwell v. Reliance Ins. Co., 5.7 Blake, United States v., 4.5, 12.4.3 Blakemore, United States v., 13.5.3,13.9 Blatt, In re, 5.12.1 Blau v. United States, 14.4.1

Table of Cases Bloom v. Illinois, 2.4 Blue v. United States Dept. of the Army, 2.3.3,2.3.4 Blum v. Stenson, 2.3.1 Blumenfeld v. Borenstein, 3.8.6 Boddie v. ABC, 5.8 Boettcher v. Hartford Ins. Group, 2.3.4 Bohle, United States v., 4.5 Boland Marine and Mfg. Co. v. Rihner, 2.1.1 Bonanza Motors, Inc. v. ''''ebb, 17.11.2 Bondu v. Gurvich, 5.13 Bonner v. State, 13.3.4 Boone, In re, 3.6.2 Boone v. Lowry, 15.8 Booth v. Mary Carter Paint Co., 8.8,17.1 Borden, State v., 11.8 Borman v. Borman, 8.7.1 Boss-Harrison Hotel Co., Inc. v. Barnard, 19.4 Boucher,lnre, 8.5.1,19.2 Bowles, State v., 9.3 Braley v. Campbell, 2.1.2 Branch v. Emery Transp. Co., 6.11.2 Brandberg v. Lucas, 9.4 Brauer v. Hotel Assocs., Inc., 18.6 Brennan's Inc. v. Brennan's Restaurant, Inc., 3.6.1 Bridge Prods., Inc. v. Quantum Chern. Corp., 3.6.3 British Airways v. Port Auth. of N.Y and Nj., 3.5.2 Brohawn v. Transamerica Ins. Co., 15.6.1 Bronstein, United States v., 3.10 Brooks v. Allison Div. of General Motors, 2.3.1,2.3.4,19.2 Brooks v. Kemp, 13.6.3 Brown, United States v., 12.4.3 Brown v. Board of Educ. of Topeka, 2.2.3 Brown v. County of Genesee, 17.5 Brown v. Federation of St. Medical Bds. of United States, 2.3.4,2.3.5 Brown v. Miller, 3.9.2 Brown v. National Bd. of Medical Examiners, 2.1.3 Brown v. Royalty, 11.6, 11.10 Brown and Williamson Tobacco Corp. v. Jacobsen, 5.13 Browning Debenture Holders Comm. v. DASA Corp., 2.3.4

Brownstein, In re, 3.5.4 Brubaker v. Richmond, 1.7.1 Bruske v. Arnold, 5.4 Bruton v. United States, 10.3.3 Bryant v. Ellis, State ex rcl., 3.9.1,20.3.1 Bryant v. Scott, 14.2.1 Buchanan v. Buchanan, 15.8 Bud Antle, Inc. v. Grow-Tech, Inc., 5.3 Builders Square, Inc. v. Saraco, 17.3, 17.4 Burden v. Church of Scientology, 18.5.3 Burgerv. Kemp, 14.2.1 Burkland v. Hackett, 5.4.1 Burnette-Carter Co., United States v., 8.5.1 Burns v. Georgia, 16.3 Burt v. Gahan, 17.11. 2 Burull v. First Natl. Bank of Minneapolis, 2.2.3 Business Guides Inc. v. Chromatic Communications Enters. Inc., 2.2.1, 2.3.3,2.3.4 Butler v. Howard, 9.6 Butler v. United States, 14.6.2

Calloway v. Marvel Entertainment Group, 2.3.3, 2.3.4 Cameron v. IRS, 2.2.3 Campbell v. M/V Gemini, 5.6 Campos, In re, 19.2 Cancilla, United States v., 14.3.4 Cannon v. United States Acoustics Corp., 3.5.4 Caplin and Drysdale, Chartered v. United States, 14.7.3 Capps v. Sullivan, 14.2.4 Carbo Ceramics, Inc. v. Norton-Alcoa Proppants, 3.8.4 Cardarella, United States v., 12.4.3, 12.4.4 Cardenas v. Ramsey County, 17.9 Cardot v. Luff, 18.4, 18.8 Carlin, State v., 14.4.2 Carlson v. Langdon, 3.6.1 Carlucci v. Piper Aircraft Corp., 2.3.5, 6.11.1 Carmen v. Fox Film Corp., 8.5.1 Carmona v. Keller, 5.9 Carnes v. Commonwealth, 13.3.4 Carrigan, United States v., 5.12.1

637

Table of Cases

Carroll, United States v., 13.4 Castaline v. Los Angeles, 6.11.2 Cave v. Singletary, 14.2.1,14.2.4 Cecil v. Gibson, 13.6.4 Cement and Concrete Antitrust Litig., In re, 8.7.2 Ceramco, Ine. v. Lee Pharmaceuticals, 5.11 Chakeres, In re, 19.2 Chambers v. American Trans Air Inc., 2.2.3 Chambers v. Mississippi, 4.10 Chambers v. Nasco, Inc., 2.3.4,6.11.1, 20.3.1 Chapman v. Pacific Tel. and Tel. Co., 6.11.1 Chellis Realty Co. v. Boston and Me. R.R., 13.3.4 Cheshire, United States v., 3.8.2, 14.3.2 Chevron, U.S.A., Inc. v. Hand, 2.2.4 Chicago Council of Lawyers v. Bauer, 7.2, 7.2.2 Childress, United States v., 9.3 CHI of Alaska v. Employers Reinsurance Corp., 15.6.2 Chow, In re, 17.9 Christensen v. United States Dist. Ct., 3.6.2,3.9.4 Chu by Chu v. Griffith, 2.3.4 Chugach Elec. Assn. v. United States Dist. Ct., 3.5.4, 3.6.2, 3.8.3 Church of Scientology of Cal. v. McLean, 19.2 Ciaccio v. Housman, 11.6 CIBA-GEIGY Corp., State v., 5.4.3 Cinema 5, Ltd. v. Cinerama, Ine., 3.5.1, 3.8.2 Cintolo, United States v., 5.12.3, 14.3.3 Cippollone v. Liggett Group, Inc., 7.2.4 City of . See name of defendant Clarion Corp. v. American Home Prods. Corp., 19.2 Clay v. McCarthy, 11.6 Cleveland Elec. Illuminating Co., City of Cleveland v., 3.8.3 Coane v. Ferrera Pan Candy Co., 19.2 Cobb Publishing Inc. v. Hearst Corp., 3.8.4 Codispotti v. Pennsylvania, 2.4 Cody v. Mustang Oil Tool Co., 11.6

638

Coghlan v. Starkey, 19.2 Cohen v. Lipsig, 1.6 Cohen v. Surrey, Karasik and Morse, 1.11 Coleman v. Smith, 6.11.1 Colin v. Thompson, 6.7.6 Collins, United States v., 8.4 Colvin, State v., 10.3.4 Comden v. Superior Ct., 4.2 Committee v. Halleck, 11.3 Commonwealth v. . See name of defendant Commonwealth Life Ins. Co. v. Hall, 11.10,13.6.4,13.10 Community Broadcasting of Boston, Inc. v. FCC, 3.9.5 Contant v. Kawasaki Motors Corp. USA, 3.6.2 Continental Ins. Co. v. Baylers and Roberts, Inc., 15.1,15.9 Cook, United States v., 13.6.4 Cooke, United States v., 11.11 Coonan, United States v., 9.3 Cooperman, In re, 18.3.1 Cooter and Gell v. Hartmarx Corp., 2.3.1,2.3.4,19.2 Co rack v. Travelers Ins. Co., 5.9 Cordova Gonzalez, In re, 18.4 Corrugated Container Antitrust Litig., In re, 3.6.5 Cortelesso, United States v., 4.4 Corwin v. Dickey, 13.6.4 Cosentino, United States v., 11.8 Countryman, United States v., 11.8 County of Suffolk v. Long Island Lighting Co., 16.6 Courier Journal v. Marshall, 7.2.4 Courtney v. Edelschick, 4.3 Cox v. American Cast Iron Pipe Co., 3.6.5, 3.9.1 Crane, In re, 1.7.1 Crawford, State v., 12.4.3 Cresswell v. Sullivan and Cromwell, 4.14 Crisci v. Security Ins. Co., 15.10 Crist v. Goody, 5.9 Crist v. Moffatt, 5.5 Croce v. Sanchez, 19.4 Cromley v. Lockport Bd. of Educ., 3.8.4 Cronin v. Nevada Dist. Ct., 5.11 Cross v. American Country Ins. Co., 17.6,18.3.1

Table of Cases Crouch, United States v., 5.12.1 Cruz, People v., 10.3.3 CTC Imports and Exports v Nigerian Petroleum Corp., 2.2.1 Cunningham, United States v., 14.3.2 Curl, In re, 19.2 Curley v. Cumberland Farms Inc., 5.4.3, 5.4.4 Curtis, United States v., 14.6.1 Custis v. United States, 11.11 Custody of a Minor, In re, 3.S.2 Cutler, United States v., 7.2.1,7.2.2 Cuyler v. Sullivan, 14.3.1 Cwick v. City of Rochester, 5.5

D'Agostino v. Schaffer, 6.11.2 Danzico v. Kelly, 4.10,12.4.3 Daubert v. Merrell Dow Pharmaceuticals, Inc., 10.3.4, 13.3.4 Daugherty v. Runner, 1.10 Davenport v. Ephraim McDowell Memorial Hosp., Inc., 5.5 Davis v. 'Minnesota, 9.4 DCD Programs, Ltd. v. Leighton, S.5.1, 19.2 Dean v. Dean, 14.4.2 Deardorff, In re, 1.6, 1.7.1 Del Carpio-Cotrina, United States v., IS.5.3 Delesdernierv. Porterie, IS.3.1,IS.S Dellums v. Powell, 16.10 Delo v. Newlon, 13.6.4 Del-Val Fin. Corp. Sec. Litig., In re, 3.S.4 Dempsey, United States v., 14.3.1 Derrickson v. Derrickson, 3.6.3 De Seversky v. Republic Aviation Corp., 6.7.6 DeSisto College, Inc. v. Line, S.5.1 Detective Comics v. Fawcett Publications, 6.7.4 Devaux v. American Home Assurance Co., 1.4 Dewey v. R.J. Reynolds Tobacco Co., 3.9.4 DeWitt v. Western Pac. R.R., 19.2 Diamond, In re, 1.6 DiGregorio v. First Rediscount Corp., 6.5.4 Dike v. Dike, IS.5.3

DiLoreto, United States v., 13.4 Disciplinary Action Curl, In re, S.5.1 Diversified Prod. Corp. v. Sports Center Co., 6.5.1 Dixon v. State Bar, IS.3.1, IS.4, IS.5, IS.6 Doctors' Co. v. Superior Ct., 15.11.2 Dodson v. Persell, 5.9 Doe, United States v., 14.4.1 Doe v. Eli Lilly and Co., 5.5 Doering v. Union County Bd. of Chosen Freeholders, 2.3.4,2.3.5 Dolan, United States v., 14.3.1 Dollar v. Long Mfg., N.C., Inc., 6.5.2 Donaldson v. Clark, 2.3.4,2.3.5 Dorso Trailer Sales Inc. v. American Body and Trailer, Inc., S.5.1 Dosdourian v. Carsten, S.S Dougherty, United States v., 13.6.1 Douglas v. Donavan, 19.2 Dove v. Schultz, 2.2.3 Dow Chern. Co. v. Benton, IS.3.1 Downy v. Clauder, 2.4 Draganescu v. First Natl. Bank of Hollywood, 4.2, 4.7 Drake v. Caterpillar Tractor Co., 13.3.6 Draper v. Airco, Inc., 13.6.4 Dreiling v. Peugeot Motors of Am., Inc., 2.1.2 Dubisky v. Owens, 2.3.1 DuBois v. Gradco Sys., 5.4.4 Duffey Law Office SC v. Tank Transport Inc., 1.3 Dunaway v. State, 13.6.4 Duncan v. Merrill Lynch, Pierce, Fenner, and Smith Inc., 3.6.1,3.10 Dupree v. Malpractice Research, Inc., 11.3 Dupree v. State, 13.4 Dupuy, United States v., 4.5, 4.9 Duquette v. Arizona Super. Ct., 5.5

Eash v. Riggins Trucking Inc., 2.1.1, 2.3.4 East v. Commonwealth, 13.6.4 Eastway Constr. Corp. v. City of New York, 2.1.3,2.2.3,2.3.1,2.3.4,2.3.5 Echlin v. Lecureux, 9.4 Edger v. Slaugh tel; 6.11.1

639

Table of Cases

Edgington v. R. G. Dickinson and Co., 16.5 Edmond, United States v., 9.3 Edmonson v. Leesville Concrete Co., 9.4 Edwards v. Born, Inc., 17.3 Edwards v. Sears, Roebuck and Co., 13.3.3 Edwards v. Scroggy, 13.6.2 E. F. Hutton and Co. v. Brown, 15.7.1 Eggleston v. Chicago Journeymen Plumbers, 6.7.3,16.9 Eisenlord, State v., 10.3.6 Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 3.8.3 Elder v. United States, 11.9 Ellenberg v. Pinkerton's, Inc., 5.9 Elliott v. State, 12.4.5 Employers Casualty Co. v. Tilley, 15.3.1, 15.4, 15.6.2 Employers Mut. Casualty Co. v. Nelson, 15.8 Engstrom, United States v., 2.4 Equal Employment Opportunity Commn. v. Tandem Computers Ine., 2.1.3 Erdmann, In re, 7.3 Eskridge v. Educator and Executive Insurers, Inc., 15.11.1 Estates Theaters, Ine. v. Columbia Pictures Indus., Inc., 3.4.3 Evans, In re, 3.6.1 Evans v.Jeff D., 16.8.4, 17.8.2 Evans v. Local 2127, 6.5.3 Everet v. Williams, 1.9 Evitts v. Lucey, 14.2.2 Ewing, United States v., 4.10 EZ Paintr Corp. v. Padco, Inc., 3.9.3

Fair Automatic Repair, Inc. v. Car-X Servo Sys., Inc., 5.4.3 Faretta v. California, 4.13 FDIC V. United States Fire Ins. Co., 4.2 F. D. Rich CO. V. Industrial Lumber Co., 2.1.1 Federal Trade Commn. V. Alaska Land Leasing, Inc., 2.1.2 Ferguson V. Birmingham Fire Ins. Co., 15.6.2 Ferreria v. Fair, 13.4

640

Fiandaca V. Cunningham, 3.4.3,3.9.1 Fidelity and Casualty Co. v. Stewart Dry Goods Co., 15.6.1 Fidelity and Casualty Co. of N.Y V. McConnaughty, 15.7.1 Fields, People v., 13.10 Fifth Ave. Peach Parade Comm. v. Gray, 6.4 Figuera-Ruiz v. Alegria, 2.3.4 Fike V. Grant, 11.10 Fire Ins. Exch. V. Bell, 17.5 Fireman's Fund CO. V. McDonald, Hecht and Solberg, 15.11.1 Firestone Tire and Rubber V. Risjord, 3.9.5 First Am. Carriers, Ine. V. Kroger Co., 3.6.3, 3.6.5 First Wis. Mortgage Trust V. First Wis. Corp., 3.9.3 Fischer V. VVolfinbarger, 16.10 Fisher V. United States, 14.4.1 Fisher Bros. V. Cambridge-Lee Indus., 2.3.1 Fishow V. Simpson, 1.3 Flanagan, United States v., 3.9.5,4.8, 14.3.1 Flatt V. Superior Ct. (Daniel), 1.8.1,3.6.3 Flener V. Commonwealth, 1.7.3 Flores-Chapa, United States v., 13.3.3 Florida Bar V. Dingle, 18.7 Florida Bar V. Gentry, 17.9 Florida Bar v. Leopold, 1.7.1, I.11 Florida Bar V. Machin, 11.3 Florida Bar v. Neale, 1.7. 1 Florida Bar V. Nemec, 1.11 Florida Bar V. Rubin, 14.6 Florida Bar v. Taylor, 3.4.4 Florida Bar V. Went for It, Inc., 16.4.1 Florida Ins. Guarantee Assocs., Inc. V. Carey Canada, Inc., 3.7.1 Fogel, United States v., 4.10 Forberg V. Stumbos and Mason, 1.9 Ford, United States v., 7.2 Forest Preserve Dist. of Cook County V. Alton R.R., 11.10 Forrester, Estate of, V. Dawalt, 18.3.1 Forster V. Manchester, 5.9 Fowler V. Psychiatric Sec. Review Bd., 19.2 Fox V. Acadia St. Bank, 2.3.5

Table of Cases Fox v. Boucher, 2.2.3 Fox and Assocs. Co. v. Purdon, 18.3.1 Fracasse v. Brent, 18.3.1 Francis v. Commonwealth, 13.5.3 Franko v. Mitchell, 1.1 Frantz v. United States Powerlifting Fedn., 2.3.1 Frazier, State v., 10.3.3 Frazier v. United States, 14.2.5 Freels v. Hills, 19.3 Freeman, State v., 10.3.6 Freeman v. Chicago Musical Instrument Co., 3.2,3.6.2,3.8.2,3.10,8.7.1 Fremont Energy Corp. v. Seattle Post Intelligencer; 6.11.1 Friedgood v. Axelrod, 2.2.1,2.3.4 Friedman, In re, 5.7 Friedman, United States v., 13.6.4 Friedman v. Dozorc, 1.9 Frost v. Williams, 6.5.1 Fullmer v. Harper, 4.8 Fulton, United States v., 14.3.4 Fulton v. Lane, 5.4.3 Fund of Funds, Ltd. v. Arthur Anderson and Co., 3.8.4, 3.8.5, 3.9.3

Gadson, People v., 14.6 Gaiardo v. Ethyl Corp., 1.7.1,2.2.3 Gajewski v. United States, 4.6, 4.9 Galarowicz v. Ward, 8.7.1 Gambino, United States v., 9.3 Garcia, United States v., 4.8 Gardner v. North Carolina St. Bar, 15.3.3 Garonsik v. Shearson Hayden Stone, Inc., 16.8.1 Garrv. U.S. Healthcare, 2.2.1,16.4.1 Gas-A-Tron v. Union Oil Co., 3.8.3 Gellman v. Hilal, 3.8.6 General Accident Ins. Co. v. 575 Fifth Ave. Assocs., 3.8.4 General Mill Supply Co. v. SCA Servs., Inc., 4.7, 4.8, 4.11 General Motors Acceptance Corp. v. Bates, 2.3.1 General Motors Corp. v. Simmons, 8.8 Genius v. Pepe, 14.2.1 Gentile v. State Bar of Nev., 7.2, 7.3, 7.4 Georgia v. McCollum, 9.4

Geurts, In re, 18.8 Gholston, United States v., 4.5,4.lO Giannini, Chin and Valinoti v. Lee, 3.9.4, 20.3.1 Giarmita v. Flow Master Mach., 17.4 Ginsberg v. Stern, 19.2 Giraldi, United States v., 9.6 Gladden v. Frazier, lO.3.3 Glasser v. A. H. Robins, 7.2.4 Glebe Co. v. Trustees, 8.5.1 Glenna v. Sullivan, 17.4 Godwin v. Schramm, 17.9 Goldberg, In re, 1.11 Goldberger and Dublin P.C., United States v., 14.7.2 Golden Eagle Distrib. Co. v. Burroughs, 2.2.3,8.5.1 Goldsmith v. Pyramid Communications, Inc., 17.7 Goldstaub, In re, 1.7.1 Gomez, United States v., 4.4,4.7,4.9 Good, People v., 1.11 Good Hope Refineries, Inc. v. Brashear, 19.2 Gossett v. Commonwealth, 13.5.3 Gould Inc. v. Mitsui Mining and Smelting Co., 3.8.3,4.5 Government of the Virgin Islands v. Zepp, 14.3.4 Graham v. Wyeth Lab., 3.6.2 Grahams ServoInc. V. Teamsters Local 975, 5.11 GrandJury Proceedings (Genson), In re, 14.4.2 GrandJury Proceeding (Cherney), In re, 14.3.3 GrandJury Proceedings (GJ90-2), In re, 14.3.3 GrandJury Proceedings (Harvey), In re, 14.5 GrandJury Proceedings (Pavlick), In re, 14.3.3 GrandJury Proceedings (Schofield), In re, 14.5 GrandJury Proceedings (Weinder), In re, 14.5 GrandJury Proceedings (Wilson), In re, 14.5 Grand jurySubpoena (DeGuerin), In re, 14.3.3

641

Table of Cases

Grandjury Subpoenas (Hirsch), In re, 14.3.3, 14.5 Grandjury Subpoena (Roe), In re, 14.3.3, 14.5 Grant v. Thirteenth Ct. of App., 3.8.4 Gray v. Commercial Union Ins. Co., 3.9.3 Gray v. Memorial Medical Cent., 3.8.2 Great Am. Ins. Co. v. Spoden, 17.11.2 Greenebaum-Mountain Mortgage Co. v. Pioneer Natl. Title Ins. Co., 4.7 Greenlee, In re, 18.3.1 Greer, United States v., 2.4.3, 12.4.3 Gregori v. Bank of Am., 3.8.6, 5.2 Gregory v. United States, 5.12.1 Greitzer and Locks v.johns-Manville Corp., 3.8.4 Grendel's Den v. Larkin, 2.3.1 Greyhound Corp. v. Superior Ct., 6.5.3 Grievance Comm. v. Rottner, 3.5.2 Grievance Comm. for the S. Dist. of NY v. Simels, 5.4,5.4.2 Grievance Comm. of the United States Dist. Ct., Dist. of Conn., In re, 14.6.1 Griffin v. California, 13.5.3 Groper v. Taff, 4.4,4.6 Grundy v. Manchester Ins. and Indem. Co., 15.10 Gubbins, In re, 19.1,20.3.1 Guidroz v. Lynaugh, 13.6.2,13.6.4 Gulf Oil Co. v. Bernard, 16.4.2, 16.4.3 Gutierrez, State v., 11.10 Gwaltney, United States v., 13.8

Hagans, Brown and Gibbs v. First Natl. Bank of Anchorage, 17.7 Hague v. Williams, 5.5 Haines v. Liggett Group Inc., 18.2 Hall, United States v., 12.4.3 Hall v. Clifton Precision, 6.7.5, 11.12 Hall v. Small Business Admin., 8.7.2 Halverson v. Convenient Food Mart, Inc., 16.11 Hamblen v. County of Los Angeles, 19.2 Hammad, United States v., 5.4.2,5.10 Hammond, United States v., 5.12.2 Hammonds v. Aetna Casualty and Sur. Co., 5.5

642

Hansberry v. Lee, 16.5 Hansen, State v., 8.4 Hardingv. Davis, 14.2.5 Harlan v. Lewis, 5.5,5.12.1 Harness v. Commonwealth, 13.3.5 Harrington, State v., 5.2 Harris, People v., 11.8 Harris, United States v., 2.4 Harris v. Dugger, 14.2.1 Harris v. Reed, 14.2.4 Harris v. United States, 13.5.4, 13.6.5 Harry R. v. Esther R., 5.8 Hart v. Marion Correctional Inst., 14.2.2 Harte Biltmore Ltd. v. First Pa. Bank, 3.8.3 Hasting, United States v., 13.5.3 Havens Realty Corp. v. Coleman, 5.7 Hawk v. Superior Ct., 11.10, 12.4.1 Hayes v. Eagle-Picher Indus., Inc., 17.8.3 Hayes v. Lockhart, 13.6.2 Haynes, State v., 11.10, 12.4.3 Haynes v. Anderson, 6.8 Haynes by Haynes v. Green, 13.3.4 Haynie v. Ross Gear Div. of TRW, Inc., 2.1.2 Healy v. Chelsea Resources Ltd., 2.3.4 Hearing on Immunity for Ethics Complainants, In re, 20.2.3 Hearn v. Rhay, 18.5.2 Hedman, United States v., 11.8 Hegarty v. Campbell Soup Co., 8.8 Henderson v. Sargent, 14.2.1 Henkel, United States v., 14.6.1 Henricksen v. Great Am. Sav. and Loan, 3.8.4 Henryv.johnson, 15.6.2 Hensley v. Eckerhart, 2.3.1 Herbert v. Wal-Mart Stores, Inc., 13.5.3 Hernandez, United States v., 13.6.4 Herzfeld and Stern v. Blair, 19.2 Hewitt v. City of Stanton, 2.2.3 Hicks on Behalf of Feiock v. Feiock, 2.4 Hill v. Norfolk and WRy., 19.2 Hilton v. Barnett Banks, Inc., 3.4.1 Himmel, In re, 20.2.2,20.4.1 Hinds, In re, 7.3 Hirschkop v. Snead, 7.2, 7.2.2 Hitch v. Pima County Super. Ct., 14.4.1, 14.4.2 Hladek v.john A. Dalsin and Son, 17.3

Table of Cases Hoey v. Hawkins, 5.9 Hoffman v. Leeke, 14.3.1 Hoffman v. United States, 13.8 Hollis v. United States, 2.1.2,2.3.4 Holloway v. Arkansas, 4.7, 18.5.1 Holmes, People V., 14.3.2 Holtzman, In re, 7.3 Home Indem. Co. v. Stillwell, 8.5.1 Homico Constr. and Dev. Co. v. Ti-Bert Sys., 2.3.3 Hopper v. Drysdale, 6.11.4 Horne v. Peckham, 1.3, 1.6 Horner v. Rowan Cos., 5.10, 6.7.2 Hosford, United States v., 4.8 Hoss, Commonwealth v., 12.4.3 Hubbard v. Kiefel, 12.2.1, 12.4.3 Hudson v. Moore Business Forms, Inc., 2.1.3,2.3.1 Hueck v. State, 14.3.3 Hughes v. Meade, 4.4 Hughes v. Paine, Webber,Jackson and Curtis, Inc., 3.6.3, 3.11 Huguley v. State, 19.3 Hull v. Celanese Corp., 3.8.3 Hunt v. American Bank and Trust Co. of Baton Rouge, 8.7.2 Hunter v. International Sys. and Controls Corp., 6.5.2 Hurd v. Ralph's Grocery Co., 2.2.3 Hustler Magazine v. Falwell, 7.3 Hyde Constr. Co. v. Koehring Co., 1.9

IBM v. Levin, 3.5.2,3.5.4, 3.9.3 Igo v. Coachman Indus., Inc., 13.6.4 Imhoff v. Hammer, 18.2 Impervous Paint Indus. v. Ashland Oil, 16.10 Impounded Case (Law Firm) [I], In re, 14.4.2 Impounded Case (Law Firm) [II], In re, 14.4.2 INA Aviation Corp. v. United States, 5.13 India, Government of, v. Cook Indus., 3.6.2,3.10 Industrial Indem. Co. v. Great Am. Ins. Co., 15.7.1 Industrial Parts Distrib., Inc. v. Fram Corp., 3.6.2

Infotechnology, Inc., In re Appeal of, 3.9.2 Ingram v. Lupo, 17.11.2 In re . See name of party Instituform of N. Am., Inc. v. Midwest Pipeliners, Inc., 5.4.3 Insurance Corp. of Ireland, Ltd. v. Companie des Bauxites de Guinee, 6.11.2 International Assn. of Bridge, Structural and Ornamental Iron Workers, Local 387 v. Moore, 12.4.1 International Business Machs. Corp., In re, 8.7.2 International Corp. v. Style Cos., 2.3.1 International Elee. Corp. v. Flanzer, 8.7.1 International Union of Elec., Radio, and Mach. Workers AFL-CIO v. Westinghouse Elec. Corp., 6.7.4 International Union, UMWA v. Bagwell, 2.4 Investigations before April, 1975 Grand Jury, In re, 5.12.3 INVST Fin. Group v. Chern-Nuclear Sys., 2.3.1,2.3.4 Itel Containers Inti. Corp. v. Puerto Rico Marine, 6.11.1 ITT Small Business Fin. Co. v. Niles, 1.3

Jaap v. District Ct., 5.5 Jackson, People v., 3.8.6, 13.4 Jackson v. Denno, 10.3.3 Jackson v. Herring, 14.2.1 Jackson v. Law Firm of O'Hara, Ruberg, Osborne and Taylor, 2.3.4 Jackson v. Pollick, 1.10 Jackson v. Travelers Ins. Co., 18.3.1 Jackson v. United States, 4.5, 4.10, 12.4.4, 14.6 Jacobson v. Sassower, 18.3.1 JamesJulian v. Raytheon, 4.5 Japanese Elec. Prods. Antitrust Litig., In re, 6.6.1, 10.3.5 Jarecki v. G. D. Searle and Co., 10.3.2 Javor v. United States, 4.2.5 J. C. Penney Co. v. Blush, 5.8 J.E.B. v. Alabama, 8.9,9.4 Jenkins v. Rainner, 5.9 Jessee v. Danforth, 3.6.4

643

Table of Cases

J. M. Cleminshaw Co. v. City of Norwich, 6.11.1 John v. Barron, 2.3.4,2.3.5 Johnsv. Smyth, 13.5.1,13.5.2 Johnson, United States v., 4.8 Johnson v. Moberg, 8.8 Johnson v. Trueblood, 9.4, 9.5 Johnston, United States v., 4.12 Jones, United States v., 14.3.4 Jones v. Barnes, 19.3, 19.4 Jones v. City of Chicago, 4.2,4.4 Jones v.Jones, 3.8.6 Jones v. Superior Ct., 9.3 Jorgenson v. County of Volusia, 2.2.3, 8.5.1 Joseph v. Markovitz, 15.5.1 Journal Publishing Co. v. Mechem, 9.6 Julien v. Zeringue, 2.l.2, 19.1, 19.2

Kadelbach v. Amard, 5.8 Kaiser Steel v. Fran Colucci Constr. Co., 13.10 Kale v. Combined Ins. Co. of N. Am., 2.2.4 Kalso Systemat, Inc. v.Jacobs, l.9 Kamerman v. Steinberg, 2.2.1 Kanarek v. Hatch, 2.1.2 Kane, People v., 19.2 Kanne v. Connecticut Gen. Life Ins. Co., 15.1l.2 Kansas-Nebraska Natural Gas v. Marathon Oil Co., 5.3 Kantor v. Ash, 11.6 Kapco Mfg. Co. v. C & 0 Enters., 3.8.4 Katris v. Immigration and Naturalization Serv., 8.5.1 Kaufman, In re, 18.6 Kearns v. Ford Motor Co., 2.3.5,5.2 Kearsarge Computer, Inc. v. Acme Staple Co., 6.1l.2 Kelley, In re, l. 7 .3 Kelley v. Metropolitan County Bd. of Educ., 2.3.1 Kelly v. United States, 9.3, 14.3.2 Kenney, United States v., 4.12 Kentucky Bar Assn., In re Advisory Opinion of the, 3.6.5 Kentucky Bar Assn. v. Heleringer, 7.3 Kentucky Bar Assn. v.Jernigan, 7.3

644

Kentucky Bar Assn. v. Yates, l. 7.1 Kern, In re, 14.3.4 Kerry Coal Co. v. UMW, 15.5.1 Kersey, In re, l. 7 .3 Kessenich v. Commodity Futures Trading Commn., 3.9.2,8.2 Kevlik v. Goldstein, 3.9.2, 8.2, 8.7.1 Kiamie, United States v., 1l.9 Kiefel v. Las Vegas Hacienda, Inc., 5.12.2,12.2.1,12.4.3 Kimmelman v. Morrison, 14.2.1 Kindle, United States v., 3.8.2 King v. St. Vincent's Hosp., 10.3.1 Kinnamon v. Staitman and Snyder, 17.10 Kitchen v. Aistech, 5.4.4 Kittay v. Allstate Ins. Co., 15.3.3 Klein, In the Matter of, 14.5 Kleiner v. First Nat!. Bank of Atlanta, 2.3.5, 16.4.3, 16.4.4 Klieger v. Alby, 5.5 Klubock, United States v., 14.5 Klusman v. Bucks County Ct. of C.P., 16.6 Koon, United States v., 13.6.4 Kor, People v, 3.3, 18.5.3 Korff v. State, 18.5.3 Kouyoumejian, United States v., 5.8 Kozec, Commonwealth v., 13.5.2,13.8 Kozlowski v. Sears Roebuck and Co., 6.6.1 Kraemer v. Grant County, 1.9,2.2.1 Kramer v. Scientific Control Corp., 16.8.1 Kriegsman v. Kriegsman, 18.2 Kroungold v. Triester, 4.9 Kunstler, In re, 2.2.1

Lachman, United States v., 19.2 Laird v. Tatum, 8.7.2 Laitram Corp. v. Cambridge Wire Cloth Co., 2.l.1 Lake County Bar Assn. v. Gariulo, 3.5.2 Lake County Bar Assn. v. Needham, 18.3.1 Lakoff v. Lionel Corp., 3.10 Lamborn v. Dittmer, 4.3 Langston Corp. v. Standard Register Co., 6.7.4 Lanigan v. Scharton, 1.11

Table of Cases Larson v. State, 3.4.4 LaSalle Nat!. Bank v. County of Lake, 3.6.2,3.8.3,3.8.4 Laskey v. International Union (UAv\~, 16.5 Latimer, United States v., 13.5.1 Lauderdale, In re Guardianship of, 17.8.3 Laughner v. United States, 18.5.2 Lawline v. American Bar Assn., 20.4.3 Lawn v. United States, 13.8 Law Offices of Bernard D. Morely v. Macfarlane, 14.4.2 Lawrence v. Texas, 11.7 Lechman, United States v., 8.5.1 Lefrak v. Arabian Am. Oil Co., 16.11 Lehder-Rivas, United States v., 9.3 Leisure, United States v., 12.4.3 Lemond v.Jamail, 1.6 Leventhal, United States v., 14.7.2 Levine v. United States Dist. Ct. for the Cent. Dist. of Cal., 7.2.1,7.2.3 Levin, Middlebrooks, Mabia, Thomas and Mitchell PA v. U.S. Fire Ins. Co., 1.9 Lewis, United States v., 12.4.3 Lewis v. S. S. Baune, 17.8.1 Liberty Mut, Ins. Co. v. Engels, 15.7.1 Lieberman v. Employers Ins. of Wausau, 15.3.1,15.10 Life Fitness Inc. v. Sears, 3.9.1 Liljeberg v. Health Servs. Acquisition Corp., 8.7.2-. Link v. Wabash R.R., 2.1.1,2.3.4 Lipin v. Bender, 5.3,5.7 Litchfield, United States v., 14.6.1 Lloyd v. United States, 11.9 Locascio, United States v., 4.4, 14.3.4 Loew, In re, 1.7.2 Long, United States v., 14.6.1, 14.6.2 Lopez, United States v., 5.4.2 L'Orange v. Medical Protective Co., 5.12.2 Louden v. Mhyre, 5.5 Love v. Wolf, 13.6.4 Lowenschuss v. Bluhdorn, 3.9.6 Lowe's of Roanoke, Inc. v.Jefferson Standard Life Ins. Co., 6.4 Lowrimore, United States v., 12.4.1 Loyd v. Whitley, 14.2.1 Lum v. Stinnett, 8.8

Lundy v. Campbell, 13.4 Lysick v. Walcom, 15.3.1,15.3.2,15.10, 15.11.1

MacArthur v. Bank of NY, 3.9.2,4.2, 4.4,4.7,4.8,20.3.1 McCarty v. Gappelberg, 11.6 McConwell v. FMG of Kansas City Inc., 17.4 McCormick, State v., 11.4 McCourt Co. v. FPC Properties, Inc., 3.5.2, 3.6.3 McCoy v. Court of App. of Wis., 19.3 McCracken, People v., 13.6.4 McCuin v. Texas Power and Light, 8.7.2 McGrath, In re, 17.5 McHenry Coal Co. v. Sneddon, 11.10, 11.12 McKeevel; United States v., 4.5 McKeon, United States v., 6.11.3 McLain v. Boise Cascade Corp., 5.9 McLaughlin v. Bradlee, 2.3.4 McMurry v. Eckert, 6.7.7 McNamara v. United States, 14.2.2 McNaughton v. United States, 13.5.3 McQueen v. Commonwealth, 14.2.1 McRae, United States v., 13.6.4 Magnus Elecs. v. Masco Corp., 2.1.1 Maguigan, Commonwealth v., 18.5.3 Mail Order Assn. of Am. v. U.S. Postal Serv., 10.3.2 Maine v. Moulton, 5.4.2 Mak v. Blodgett, 14.2. 1 Maldonado-Rivera, United States v., 9.3 Mallon v. Arnstein, 3.10 Maness v. Meyers, 18.5.3 Mann v. G & G Mfg., Inc., 2.1.3 Manning v. Waring, Cox,James, Sklar and Allen, 3.8.4 Maple Properties v. Harris, 19.2 Marcelin, People v., 13.10 Marco v. Dulles, 3.9.1 Marcus, United States v., 5.4.2 Markowitz and Co. v. Toledo Metro. Hous. Auth., 8.5.1 Marschak v. Kirkland and Ellis, 3.10 Marsh v. State, 12.4.3 Marson v.Jones and Laughlin Steel Corp., 8.5.1

645

Table of eases

Martin v. County of Monroe, 5.4 Martin v. Long Island RR., 5.9 Mary Ann Pensiero, Inc. v. Lingle, 2.3.1 Maryland Attorney Grievance Comm. v. Alison, 7.3 Maryland Attorney Grievance Commn. v. Kandel, 3.4.4 Maryland Casualty Co. v. Peppers, 15.6.1 Mascitti, Commonwealth v., 14.6 Mascolo, In re, 8.5.1 Masino, United States v., 11.8 Matter of . See name of subject Mattioni, Mattioni and Mattioni v. Ecological Shipping Corp., 17.3, 17.8.1 Maxworthy v. Horn Elec. Serv., Inc., 10.3.3 Mayberry v. Pennsylvania, 2.4 Mayo, State v., 13.6.1 Mays v. Chicago Sun Times, 19.2 Mazzaferro, United States v., 14.3.1 Mazzilli, United States v., 12.4.5 Meany, State v., 13.5.2 Meat Price Investigators Assn. v. Spencer Foods, 5.11 Mechem, In re, 3.9.5,4.8 Medical Protective Co. v. Davis, 15.11.1 Medivox Prods., Inc. v. HoffmannLaRoache, Inc., 6.11.2 Meighan v. Shore, 1.5 Mekdeci v. Merrell Natl. Lab., 18.3.2, 18.4 Melamed v. ITT Continental Banking Co., 3.9.5,8.7.1 Melrose v. Shearsonl American Express, Inc., 2.3.1 Melton, United States v., 11.8 Mendenhall v. Barber-Greene Co., 5.3 Mentor Lagoons, Inc. v. Rubin, 4.2 Mercado v. Parent, 18.5.3 Meredith, People v., 14.4.1 Metro Traffic Control Ine. v. Shadow TrafficNetwork, 5.12.4 Metzger, In re, 12.4.2 Meye v. McDonnell, 5.12.2 Meyerhofer v. Empire Fire and Marine Ins. Co., 18.5.2 Michelson v. United States, 12.4.3 Mid-Atlantic Toyota Antitrust Litig., In re, 16.6, 16.11

646

Mid-South Towing Co. v. Har-Win, Inc., 17.7 Miles v. Farrell, 5.5 Millan-Colen, United States v., 9.3 Miller v. Metzinger, 1.5 Miller v. Montgomery County, 5.13 Miller v. Paul, 18.6 Miranda v. Southern Pac. Transp. Co., 2.3.4 Miskovsky v. State ex rel. Jones, 12.4.2 Mitchell v. Goldsmith, 13.8 Mitchell v. Transamerica Ins. Co., 1.7.1 Mitchum v. Hudgens, 15.10 Modica, United States v., 13.1 Moffitt, Zwerling and Kemler P.C., In re, 14.7.3 Mone v. C.I.R., 2.3.4 Monnat, United States v., 14.7.2 Monsanto, United States v., 14.7.3 Montanez v. Irizarry-Rodriguez, 15.8 Moody v. Schwartz, 6.11.2 Moore v. Margiotta, 3.5.2 Moore v. Roberts by and through Roberts, 15.7.1 Moore v. United States, 13.4 Moradi-Shalal v. Fireman's Fund Ins. Co., 15.11.2 Moran v. Harris, 1.6 Moreland v. State, 13.3.3 Morgan v. Foretich, 2.4 Moritz v. Medical Protective Co., 15.1, 15.2,15.3.1,15.7.1 Morrell v. State, 14.4.1,14.4.2 Morris, United States v., 4.8 Moscony, United States v., 5.12.3, 14.3.2 Moss v. Mittel, 13.3.2 Motor Corp. Antitrust Litig., In re, 16.11 Mourad v. Automobile Club Ins. Assn., 15.3.3, 15.9 Mowry v. Badger State Mut. Casualty Co., 15.11.1 Moylan, United States v., 13.6.1 Muccini, In re Estate of, 17.9 Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 17.4 Murrah, United States v., 10.3.3, 13.3.3 Musicus v. '-Yestinghouse Elec. Corp., 3.9.1 Mustang Enters. v. Plug-In Storage Sys., 3.8.2

Table of Cases Myers v. Mississippi St. Bar, 18.4

Nackson, Matter of, 18.5.3 Nasco Inc. v. Calcasieu Television and Radio, Inc., 2.1.1,2.3.4,20.3.1 Nash, People v., 14.4.1,14.4.2 Nassau-Suffolk Ice Cream v. Integrated Resources, Inc., 2.2.1 Nasser, In re Contempt of, 2.4 National Assn. of Govt. Employees v. National Fedn. of Fed. Employees, 2.2.4 National Assn. of Letter Carriers v. Austin, 7.3 National Broadcasting Co. v. Cooperman, 7.2 National Grange Mut. Ins. Co. v. Lococo, 15.8 National Hockey League v. Metropolitan Hockey Club, Inc., 6.11.1, 6.11.2 National Sales and ServoCo. v. Supreme Ct., 18.6 NCK Org. v. Bregman, 3.6.1 N.E. Alpine Ski Shops v. U.S. Divers Co., 19.2 Nealy v. Cabana, 14.2.1 Nelson v. Nelson, 19.2 Nemeroff v. Abelson, 2.2.1,2.2.2 Nesglo, Inc., United States v., 19.2 Newlon v. Armontrout, 13.6.4 Newton, United States v., 13.4 Newton v. A.C.S., Inc., 2.3.4 New York Times v. Sullivan, 7.3 Niagara-Genesee Carpenters v. United Bhd. of Carpenters, 3.4.1 Nienstedt v. Wetzel, 6.11.4 Niesig v. Team I, 5.4.3 Nissan Motor Corp. Antitrust Litig., In re, 16.11 Nix v. Whiteside, 14.6, 14.6.1, 14.6.2 Nobel, United States v., 8.7.2 Nobel v. Sears, Roebuck and Co., 5.9, 5.11 Nobles, United States v., 14.5 Nolan v. Foreman, 1.11,18.6 North, United States v., 13.6.4 North Am. Foreign Trading Corp. v. Zale Corp., 8.7.! Norton v. Caremark, Inc., 6.3

Novinger v. E. 1. DuPont de Nemours and Co., 18.3.1 Novo Terapeutisk Laboratorium v. Baxter Travenol Lab., Inc., 3.6.2, 3.8.3 Nyman, United States v., 4.4,4.5

Obser v. Adelson, 5.4 Occidental Chern. Corp., United States v., 5.12.3 Odomes v. Nucare, Inc., 17.3 O'Farrell, People v., 13.6.4 Office of Disciplinary Counsel v. Levin, 6.7.1 Of she, United States v., 5.7 Ohralick v. Ohio St. Bar, 16.4.1 Oklahoma Bar Assn. v. Paveto, 1.7.1 Olenin v. Curtis and Johnson, Inc., 13.4 Oliver v. Kentucky Bar Assn., 3.8.2 Oliveri v. Thompson, 2.1.2,2.2.1,2.2.2, 2.3.4 Olwell, State v., 14.4.1, 14.4.2 Operating Engs. Pension Trust v. A-C Co., 2.2.3 Operating Engs. Pension Trust v. Cecil Backhoe Serv., Inc., 19.2 Optyl Eyewear Fashion Int!. Corp. v. Style Cos., 4.6, 4.14 Oracle Sec. Litig., In re, 16.6,16.7 Ortiz v. Barrett, 6.11.1 Osborn v. Shillinger, 14.2.5 O'Toole v. Franklin, 1.9 Outboard Marine Corp. v. Liberty Mut. Ins. Co., 15.9 Oxfurth v. Siemens, A.G., 2.3.5 Oxirnetrix, Inc., In re, 8.5.1

Paauwe, In re, 19.2 Paccione, United States v., 9.3 Panduit Corp. v. All States Plastic Mfg. Co., 3.8.3 Pantry Pride, Inc. v Finley, Kumble, Wagner, Heine, Underberg and Casey, 3.8.3 Paoli R.R. Yard PCB Litig., In re, 10.3.5 Papanicolau v. Chase Manhattan Bank, 5.!! Pappas v. Holloway, 18.5.2

647

Table of Cases

Pappas v. Middle Earth Condominium Assn., 13.6.4 Paramount Communications v. Donaghy, 4.6 Paramount Communications v. QVC Network, 6.7.1 Paretti v. Cavalier Label Co., 4.7 Parker v. George Thompson Ford, Inc., 16.11 Parker v. State, 13.3.4 Parrott v. Wilson, 5.8 Parsley v. Commonwealth, 13.10 Parsons v. Continental Natl. Am. Group, 15.6.2,15.7.1 Partington v. Gedan, 2.3.4, 14.2.2 Patterson, United States v., 13.4 Patton v. Aerojet Ordinance Co., 6.11.2 Paul, In re, 12.2.2 Pavelic and LeFlore v. Marvel Entertainment Group, 2.1.4,2.3.3 Payne v. Coates-Miller, Inc., 6.11.1 Pearlmutter v. Alexander, 17.6 Peco, United States v., 13.8 Peel v. Attorney Registration and Disciplinary Commn., 1.3 Peerman v. Sielicane, 1.9 Pemberton v. Tieman, 6.11.1 Pendleton v. Evetts, 9.5 Pennix v. Winton, 15.8 Pennsylvania v. Finley, 19.3 Pennsylvania, Commonwealth of, v. Local Union 542, 16.10 Pennwalt v. Plough, Ine., 3.4.1 Penson v. Ohio, 19.3 People v. . See name of defendant People ex reI. . See name of party Pepsico, Inc. v. McMillen, 8.7.2 Perez v. Kirk and Carrigan, 3.4.1 Perl v. St. Paul Fire and Marine Ins. Co., 3.9.4,20.3.1 Perry v. Leake, 6.7.5 Person v. Association of Bar of St. of NY, 11.3 Peterson v. Farmers Casualty Co., 15.2, 15.3.2 Peterson v. Western Casualty and Sur. Co., 15.8 Petrillo v. Syntex Lab., Inc., 5.5

648

Pettiford v. Eskwitt, 17.9 Pettway v. American Cast Iron Pipe Co., 16.8.2 Petty v. General Accident Fire and Life Assurance Corp., 1.9 Phillips, United States v., 4.8 Phoenix Founders, Inc. v. Marshall, 3.8.4 Picker Intl., Inc. v. Varian Assocs., Inc., 3.8.3 Pierce, State v., 10.3.6 Pierce v. Delamater, 8.7.2 Pilot Life Ins. Co. v. Dedaux, 15.11.2 Pina, United States v., 2.4 Ping v. United States, 11.9, 11.10 Pinkerton Natl. Detective Agency, Inc. v. Stevens, 5.9 Pinto, United States v., 5.12.1 Pitts, United States v., 13.5.3 Pizarro v. Luther, 8.5.1 Plaza Shoe Store v. Hermel, 18.3.1 Plessy v. Ferguson, 2.2.3 Poindexter, United States v., 13.5.3 Polycast Technology Corp. v. Uniroyal, 5.4.4 Poly Software Inti. Inc. v. Yu Su, 3.2, 3.6.3 Pomerantz v. Schandler, 18.6 Pony Express Courier Corp. v. Pony Express Delivery Serv., 2.3.5 Pope v. Federal Express Corp., 2.3.5 Poppers, United States v., 11.4 Potamakin Cadillac Corp., United States v., 2.1.2 Potashnick v. Port City Constr. Co., 8.7.2 Potter, Commonwealth v., 12.4.1 Powe, United States v., 5.4.2 Powell v. Industrial Comm., 5.9 Powers v. Ohio, 8.9 Prantil, United States v., 4.6,4.8,4.9, 4.12 Presnell v. Zent, 13.6.2 Preston v. State, 11.10 Price, In re, 18.8 Price v. Superior Ct., 17.5 Primus, In re, 16.4.1,16.4.2 Principe v. Assay Partners, 7.4 Pritchard v. Pritchard, 5.8 Procanik v. Cillo, 1.5, 19.4 Professional Air Traffic Controllers Org., United States v., 8.7.2

Table of Cases Public ServoElec. and Gas V. Associated Elec. and Gas Ins. Servs., 5.4.4 Public Taxi Servov. Barrett, 18.4 Puco, United States v., 12.4.4 Pugliese, United States v., 12.4.3 Pump, In re, 1.7.I Pungitore, United States v., 13.8 Pupkes V. Sailors, 15.8

Quality Molding CO. V. American Natl. Fire Ins. Co., 8.5.1 Quality Prefabrication, Inc. v. Daniel]. Keating Co., 6.11.2 Quill V. Trans World Airlines, 13.10 Quintero v.Jim Walter Homes, Inc., 17.8.3 Quintero V. United States, 14.3.3 Quiros V. Colon, 2.3.4

Raggio, In re, 7.3 Raine V. Drasin, 1.9 Ralls V. United States, 14.3.3 Ramp V. St. Paul Fire and Marine Ins. Co., 17.3 Ramsay v. Boeing VVelfarePlans Comm., 4.4 Rand v. Monsanto, 16.6 Ratterree V. Bartlett, 8.8 Rayco, Inc., United States v., 19.2 Ray Scharer and Co. v. Plabell Rubber Prods., Inc., 2.3.4 Realco Servs., Inc. V. Holt, 3.6.5, 3.8.5 Real Property Known as 77 East 3rd St., United States v., 9.3 Redd V. Shell Oil Co., 3.9.1 Redner V. \l\lorkmen's Compensation Bd., 5.9 Reed V. United States, 9.3 Reeves, People v., 10.3.3 Rentclub, Inc. V. Transamerica Rental Fin. Corp., 5.3,5.6 Request for Instructions from Disciplinary Counsel, In re, 20.2.2 Resolution Trust Corp. V. Elman, 18.6 Resolution Trust Corp. V. First Am. Bank, 5.3 Respondent A, In re, 9.6 Reuben, In re, 2.1.2,2.3.4

Revlon V. Dallas Ry. and Terminal Co., 13.3.4 Reynolds V. Sorosis, 18.2 Rice V. Marshall, 14.2.2 Rice V. Perl, 3.9.4, 17.8.1, 20.3.1 Richardson V. Employers Liab. Assurance Corp., 11.11 Richardson-Merrell Inc. V. Koller, 3.9.5, 4.8 Richmond V. Georgia Farm Mut. Ins. Co., 15.6.2,15.11.1 Rickenbaker V. Rickenbaker, 5.8 Riley v. Willis, 13. 10 Ring, United States v., 14.3.2 Rinzel, In re, 1.7.1 Risen V. Pierce, 11.1 0 Ritchie, United States v., 14.7.2 Rivera, United States v., 13.4 Riverhead Sav. Bank v. National Mortgage Equity Corp., 2.3.4 Riverside Memorial Mausoleum, Inc. V. Sonneblick-Coldman Corp., 6.11.2 River West, Inc. V. Nickel, 3.9.1 Roadway Express, Inc. V. Piper, 2.1.1, 2.l.2,2.3.4 Roberts, State v., 10.3.3 Roberts v. Hutchins, 3.8.4 Robertson V. Sanyo Maru, 4.5 Robinson, United States v., 13.4,13.10 Robinson V. Commonwealth, 13.3.3 Robinson V. National Cash Register Co., 2.3.3,2.3.4 Rochon, In re GrandJury Subpoena of, 3.9.5 Rock V. Arkansas, 4.8 Rockwell Intl. V. Superior Ct., 15.7.1 Rodgers v. Lincoln Towing Serv., Inc., 2.3.4 Rodriguez Alvarez V. Bahama Cruise Line, 19.2 Rogers, United States v., 5.12.1 Rogers V. Robson, Masters, Ryan, Brummond and Belom, 15.3.1 Rogers V. Tri-State Materials Corp., 6.5.3 Rome, State v., 20.2.3 Rooney, Commonwealth v., 12.1 Roosth and Genecor Prods. CO. V. White, 11.6 Rosen, In re, I I .3

649

Table of Cases

Rosen v. NLRB, 14.6.2 Rosenthal, In re, 18.8 Rosman v. Shapiro, 3.S.4 Ross, United States v., 2.1.2,9.3 Royal Globe Ins. Co. v. Superior Ct., IS.I1.2 Rubenstein and Rubenstein v. Papadakos, 17.4 Rubin v. State, 12.4.7,14.6.2 Ruchti, Estate of, 6.7.7 Rude v. Algiers, 8.7. 1 Ruderer v. Fines, 19.2 Rufener Constr., Inc., In re, 19.2 Ruffin v. Kemp, 14.3.1 Ruggeri v.Johns-Manville Prods. Corp., 7.2.4 Ruggiero, United States v., 9.6 Rules Governing Conduct of Attorneys in Fla., In re, IS.3.3 Russo v. Griffin, l.6 Ryan, United States v., S.4.2 Ryan v. Monson, 11.10, 13.3.6 Ryder, In re, 14.4.2

Sabater, United States v., 8.S.2, 12.4.2 St. Louis Dressed Beef and Provision Co. v. Maryland Casualty Co., IS.6.2 St. Paul Fire and Marine Ins. Co. v. Perl, 3.9.4 Salameh, United States v., 7.2.1 Saltany v. Reagan, 2.2.3 Samuels v. Wilder, 2.2.2 Sanborn v. Commonwealth, 13.3.3, 13.6.4 Sanchez, People v., 14.4.2 Sandahl, In re, 3.9.S Sanden v. Mayo Clinic, 6.8 Sander Indus. Inc. v. Carborundum Co., 6.7.6 Sanders, United States v., 4.12 San Diego Navy Fed. Credit Union v. CumisIns. Socy., IS.6.1,IS.I1.1 Sandoval, People v., 12.4.3 S & S Hotel Ventures Ltd. Partnership v. 777 S. H. Corp., 4.4,4.7 Santiago-Lugo, United States v., S.4 Sawyer, In re, 7.2, 7.3 Scarfo, United States v., 9.3, 13.8

650

Scarpa v. DuBois, 14.2.2, 14.2.4 Schaffner, Commonwealth v., 14.4.2 Schaum ann, In re, 3.6.1 Schiessle v. Stephens, 3.8.3, 3.9.1 Scholoetter v. Railoc of Ind., Inc., 3.8.3 Schultheis, People v., 14.6.1,18.S.1 Schwartz, United States v., 14.3.1 Scivola, United States v., 14.6.2 Scolinos v. Kolts, 1.6 Scott, State v., 12.4.S Scott, United States v., 14.6.1 S & D Cal. Fruit Exch., Inc. v. Gurino, 19.2 Sealed Case, In re, S.3, 6.3 Seattle Times v. Rhinehart, 7.2.4 Secord v. Chrysler Corp., 3.9.3 Securities Indus. Assn. v. Clarke, 2.3.3 Seehan v. State of Iowa, 10.3.4 Seidman v. American Express, 8.S.1 Sequa Corp. v. Lititech, Inc., S.3 Serra, In re, 6. 11. 1 Serra v. Michigan Dept. of Corrections, 14.3.1 Sexton v. Commonwealth, 13.S.2 SFM Corp. v. Sunstrand Corp., 2.1.3 Shadow Traffic Network v. Superior Ct., S.6 Shaferv.UticaMut.Ins.Co.,IS.7.1 Shaffer Equip. Co., United States v., 2.1.1,9.6 Shamy, In re, 11.3 Shapero v. Kentucky Bar Assn., 16.4.2 Shapiro v. United States, 12.4.2 Shargel, In re, 14.3.3 Sheldon Appel Co. v. Albert and Oliker, 1.9 Sheldon Elec. Co. v. Blackhawk Heating and Plumbing Co., United States ex reI., 4.2,4.7,4.8 Shell Oil Re£ Co., In re, S.ll Shelton v. American Motors Corp., 6.7.7 Shelton v. Shelton, 3.8.2 Shepard v. American Broadcasting Co., S.7 Shepard v. United States, 10.3.3 Sheppard v. Maxwell, 7.2.,7.2.1,7.2.2 Sherman v. Heiser, 18.4 Shockley v. State, 14.6 Siegl v. Kranis, 1.3

Table of Cases Silbergleit v. First Interstate Bank, 12.4.6 Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 3.S.3 Simac, People v., S.5.2, 12.4.2 Simon, United States v., 7.2.1 Simon and Flynn, Inc. v. Time, Inc., 19.2 Simpson v.James, 3.5.2 Sindell, United States v., 14.7.2 Singleton v. Foreman, IS.3.2 Skarbinski v. Henry H. Krause Co., 1.9 SLC Ltd. v. Bradford Group West, 3.S.3 Sloan, United States v., 10.3.3 Slotkin v. Citizens Casualty Co. of N.V, 17.5 Smiley v. Manchester Ins. and Indem. Co., 15.3.1,15.7.1,15.10,15.11 Smith, In re, 3.S.2 Smith v. Bryant, IS.4 Smith v. D. Rothschild and Co., 12.4.1 Smith v. Dugger, 14.2.1 Smith v. Hulett, 5.5, 5.11 Smith v. Lewis, 1.3 Smith v. McMillan, 13.6.4 Smith v. Pennsylvania Bd. of Probation and Parole, 19.3 Smith v. Superior Ct., 5.13 Smith v. Wright, 13.3.2 Snead v. American Export-Isbrandsten Lines, Inc., 5.9 Societe Internationalc v. Rogers, 6.11.1 Socolofsky, State v., 9.6 Solerwitz, In re, 19.2 Solina v. United States, 14.3.4 Sommer v. Carr, 1.9 Southern Pac. Transp. v. PUC of St. of Cal., S.5.1 Southwest Restaurant Sys., Inc., In re, IS.6 Spaulding v. Zimmerman, 17.5 Spears v. Fourth Ct. of App., 3.S.4 Spector Freight Sys., Inc. v. Home Indem. Co., 6.5.1 Spectra-Physics v. Superior Ct., 6.7.7 Spero v. Abbot Lab., IS.3.2 Sporck v. Peil, 4.5 Sprigg v. Garcin, 1.3, 17.S.I Square Deal Cartage Co. v. Smith's Admr., 13.6.4

Standing Comm. on Discipline v. Yagman, 7.3 Stanley v. Ellegood, 13.6.2 Stanwood Corp. v. Barnum, 4.6 Star Ins. Corp. v. Steel Bar, Inc., 15.6.1 Stark v. Allis-Chalmers and Nw. Roads, Inc., 6.11.2 State v. . See name of defendant State Farm Ins. Co. v. St. Joseph's Hosp., IS.3.1 State Farm Mut. Auto. Ins. Co. v. K.A.W, 3.9.2 State Farm Mut. Auto. Ins. Co. v. Reeder, 15.11.2 State Farm Mut. Ins. Co. v. Walker, 15.7.1,15.S Stavrides v. Mellon Natl. Bank and Trust Co., 16.11 Steinkoetter, United States v., 10.3.3, 13.6.4 Stempler v. Speidell, 5.5, 5.10 Stenhach, Commonwealth v., 14.4, 14.4.1,14.4.2,20.4.1 Stephens v. White, 1.1 Stevens v. Motorist Mut. Ins. Co., 15.11.2 Stewart, People v., 3.4.2 Stinson, State v., 10.3.6 Strategem Dev. Corp. v. Heron Intl. N.V, 3.4.1 Straub v. Reading Co., 11.7, 11.12 Strickland v. Washington, 4.7,14.2.1, 14.2.4 Sturdivant v. Yale-New Haven Hosp., 6.11.2 Subpoena (Alexiou), In re, 14.4.1 Sullivan v. Chase Inv. Servs. of Boston, 3.5.2 Superior Court, State v., 14.4.1 Supreme Beef Processors v. American Consumer Indus., 4.7 Suslick v. Rothschild Sec. Corp., 2.1.2 Susman v. Lincoln Am. Corp., 16.S.1 Sussman v. Bank of Isr., 2.2.4 Swann v. Waldman, 17.S.I Swanson, United States v., 14.2.5 Szabo Food Servs. Inc. v. Canteen Corp., 2.2.3,2.2.4 Szymkowski v. Szymkowski, 17.3

651

Table of Cases

Tarantino, United States v., 12.4.5 Tasby v. United States, 18.5.2 Taub v. Glickman, 16.11 Taulbee v. Commonwealth, 13.6.4 Taylor, United States v., 11.8 Taylor v. Commonwealth, 5.12.2 Taylor v. Gordon Flesch Co., 17.3, 17.4 TCI Ltd., In re, 2.1.2,2.2.3 T. C. Theatre Corp. v. Warner Bros. Pictures, 3.6.1, 3.6.4, 14.3.2 Teamsters Local Union No. 430 v. Cement Express, 1.7.1 Telectronics Proprietary Ltd. v. Medtronic, Inc., 3.6.1 Tennessee Bar Assn. v. Freeman, 5.2 Terrell v. Western Casualty and Sur. Co., 15.10 Teslim, United States v., 13.6.2 Texaco v. Chandler, 8.7.2 Textor v. Board of Regents of N. Ill. Univ., 2.3.4 Thai, United States v., 9.3 Theiss v. Shener, 1.9 Thirty Jars of 'Ahead Hair Restorer for New Hair Growth," United States v., 6.5.3 Thomalen v. Marriott Corp., 3.8.4 Thomas, United States v., 5.12.2 Thomas v. Capital Sec. Servs., 2.2.1, 2.3.5 Thomas v. Foltz, 17.8.3 Thomas v. Municipal Ct. of the Antelope Valley Judicial Dist. of Cal., 3.6.4 Thomas v. Wainwright, 14.2.1 Thomas & Mitchell p.A. v. U.S. Fire Ins. Co., 1.9 Thompson v. Duke, 2.2.3 Thoreen, United States v., 8.5.2, 12.4.2 Thornton, In re, 3.5.3 Thornton v. Rhoden, 6.11.4 Thornton v. Wahl, 2.3.4 Tilton v. Beecher, 13.3.5 Tipton v. Canadian Imperial Bank of Commerce, 3.8.3 Titsworth v. Mondo, 17.8.1 TJD Dissolution Corp. v. Savoie Supply Co., 3.4.1 Togstad v. Vesely, Otto, Miller and Keefe, 1.3, 1.5, 1.8.1 Tolly v.J. S. Fry and Sons, Ltd., 1.3

652

Tome v. United States, 11.8 Tom Growney Equip., Inc. v. Shelley Irrigation Dev., Inc., 2.3.4 Tonarelli v. Gibbons, 13.5.3 Tool Research and Engg. Corp. v. Henigson, 1.9 Torres v. Nelson, 15.3.1 Towne Dev. of Chandler Inc. v. Arizona Super. Ct., 3.8.4 Town of Newton v. Rumery, 17.10 Toyota of Florence, Inc. v. Lynch, 13.6.4 Tran, United States v., 9.3 Transamerica Ins. Co. v. Beem, 15.6.2 Transamerica Interway, Inc. v. Commercial Union Assurance Co. of S. Afr. Ltd., 6.11.2 Trans-Cold Express, Inc. v. Arrow Motor Transit, Inc., 5.4 Transit Casualty Co. v. Spink Corp., 15.10 Travelers Ins. Co. v. St.Jude Hosp. of Kenner La, Inc., 2.1.2 Tri-Ex Enters., Inc. v. Morgan Guar. Trust Co., 18.6 Trinity Ambulance Servo V. G. & L. Ambulance Servs., 3.6.1 Triplett V. Napier, 13.3.5 Trucking Employers, Inc., United States v., 16.10 Trujillo, United States v., 13.6.1 Trustees V. Schroeder, 19.4 Tucker v. Day, 14.2.5 Tupling V. Britton, 19.2 Turoffv.MayCo., 16.8.1 Tussel V. Witco Chern. Corp., 11.6 Tutton v. Garland Indep. Sch. Dist., 2.2.3 Twyford V. Twyford, 6.11.4 Twyford V. Weber, 11.6

Unanue-Casal V. Unanue-Casal, 2.3.5 Unified Sewerage Agency v.Jeko, Ine., 3.5.4, 3.6.2, 3.8.3 Uniguard See. Ins. CO. V. Lakewood Engg. and Mfg. Corp., 5.13 Unioil V. E. F. Hutton and Co., 2.1.3, 2.2.1,2.3.5 Union Carbide Corp. V. United States Cutting Serv., Inc., 8.7.2 United Fidelity Life Ins. Co. v. Best, Sharp, Thomas and Glas, 18.8

Table of Cases United Food and Commercial Workers Union Local No. 115 v. Armour and Co., 2.3.5 United States, In re, 8.7.2 United States v. . See name of defendant United States ex reI. . See name of party US. Fin. Sec. Litig., In re, 6.5.1 Unruh v. Truck Ins. Exch., 5.9 Upgrade Corp. v. Michigan Carton Co., 18.6 Upjohn Co. v. United States, 5.4.3 Urban Court Reporting, Inc. v. Davis, 17.11.2

Van Berkel v. Fox Farm and Road Mach., 1.7.1,2.2.1 Van Horn Lodge, Inc. v. White, 18.8 Vann v. Shilleh, 18.2 Varela v.Jones, 8.7.2 Vargas-Martinez, United States v., 14.3.2 Vario, United States v., 9.3 Velsicol Chern. Corp. v. Parsons, 18.5.3 Vereen, United States v., 4.7,4.8,4.10 Vick v. Texas Employment Commn., 5.13 Vignelli v. United States, 14.3.3 Vignelli v. US. Drug Enforcement Agency, 8.5.2 Virgin Islands Hous. Auth. v. David, 8.5.1 Virzi v. Grand Trunk Warehouse and Cold Storage Co., 17.5 yon Bulow, In re, 3.4.4

Wade, United States v., 4.4, 12.3 Wade v. Calderon, 14.2.4 Wade v. Murphy, 1.11 Wagner v. Larson, 11.6 Walker v. Davis, 4.12 Wallace, United States v., 13.4 Waller, In re, 18.3.1 Walsh, In re, 18.5.3 Waltzer v. Transidyne Gen. Corp., 4.2, 4.7 Ward v. United States, 14.2.4 Warner v. State Bar, I 7. I 1.2

Warrick v. Brode, 6.8 Washington v. Strickland, 14.2.1 Washington St. Physicians Ins. Exch. and Assn. v. Fisons Corp., 6.5.3,6.5.4 Waters v. Zant, 14.2.4 Wayman, United States v., 13.4 Wayne v. Bureau of Private Investigators, 5.7 Weaver v. Mann, 5.5 W. E. Bassett Co. v. H. C. Cook Co., 3.9.2 Weiss v. Chrysler Motors Corp., 6.5.3 Wells Fargo Sec. Litig., In re, 16.3,16.7 Welsh v. United States, 5.13 Wenninger v. Muesing, 5.5 West, State v., 18.5.1 West, United States v., 4.6,4.7,4.12 Westbrook v. General Tire and Rubber Co., 13.6.4 Westfall, In re, 7.3 Westinghouse Elec. Corp. v. Gulf Oil Corp., 3.6.2 Westinghouse Elec. Corp. v. Kerr-McGee Corp., 1.5, 3.4.1, 3.6.3, 3.8.4, 3.8.5, 3.10 Westinghouse Elec. Corp. v. National Labor Relations Bd., 19.2 Westtnoreland v. CBS, Inc., 2.1.3 West Peninsular Title Co. v. Palm Beach, 6.7.7 West Virginia Bar v. Blair, 5.12.2 Wheat v. United States, 4.7,4.8, 14.3.1 Whitaker v. Commonwealth, 13.6.4, 13.10 White, United States v., 5.4.2 White v. General Motors Corp., Inc., 2.3.5 ~ite v. Superior Ct., 3.9.1 Whitehouse v.Jordan, 1.5 Whitehouse v. US. Dist. Ct. for the Dist. of R.I., 14.5 Whiting Corp. v. White Mach. Corp., 3.4.1,3.9.2 Wichita Land and Cattle Co. v. American Fed. Bank, 5.3 Wicks v. Ward, 4.2 Widger v. Owens-Corning Fiberglass Corp., 3.8.4 Wilcox v.Johnson, United States ex rel., 14.6.1, 14.6.2 Wiley, United States v., 13.6.1

653

Table of Cases

Williams v. Giant Eagle Mkts., 1.7.1 Williams v. Read, 3.5.1 Williams v. State, 13.3.5 Willy v. Coastal Corp., 2.3.4,2.3.5 Wilson v. Attaway, 4.10 Winkler, People v., 14.7.1 Winkler v. Keane, 14.7.1 Winstead v. Berry, 3.5.2 Witherspoon v. United States, 14.6.2 Wold v. Minerals Engg. Co., 2.1.3,3.9.1, 8.7.1 Wolf, United States v, 14.2.4 Wolfrich Corp. v. United Servs. Auto. Assn., 15.11.2 Wong, United States v, 9.3 Wood, In re, 3.4.4 Wood v. Commonwealth, 13.9 Woodruff v. Tomlin, 1.3, 19.4 Woods, People v., 18.5.1 Woods v. Burlington N. Indus., 13.10 Workers' Compensation Bd. v. Siler, 19.4 Workman v. Tate, 14.2.1 World Youth Day, Inc. v. Famous Artists Merchandising, 4.4,4.11 Wright v. Firestone Tire and Rubber Co., 6.7.4 Wright v. Williams, 1.3 Wright by Wright v. Group Health Hosp., 5.4.3

654

W. T. Grant v. Haines, 3.5.4, 20.3.2 Wuliger, United States v, 5.8 Wunsch, United States v, 7.4 Wurlitzer Co. v. USEEOC, 6.5.3

Yagman, In re, 2.3.4,2.3.5, 7.3, 8.7.2 Yengo, In re, 2.4 YMCA v. Commercial Standards Ins. Co., 15.3.1 York, State v , 5.12.1 Yost v. Torok, 1.9 Young, United States v, 13.8, 13.10 Youngblood, In re Petition of, 15.3.3

Zaldivar v. City of Los Angeles, 2.1.3, 2.2.3,2.2.4, 2.3.4 Zepp, Government of the Virgin Islands v, 14.3.4 Ziegenhagen, United States v , 14.3.1 Zimmerman v. Zimmerman, 3.6.3 Zolin, United States v, 11.4 Zuck v. Alabama, 3.5.2 Zych v.Jones, 1.5 Zylstra v. Safeway Stores, Inc., 16.8.1

ABA Model Rules of Professional Conduct-Reference Guide

Model Rule 1.1 1.2(a) 1.2(c) 1.3 1.4 1.5(a) 1.5(d) 1.5(e) 1.6 1.7

1.8(d) 1.8(e) 1.8(f) 1.8(g) 1.8(h) 1.8(i) 1.9 1.10 1.11 1.12 1.13 1.15 1.16 2.2 3.1 3.2

Section Number 1.2, 1.3, 1.6,2.2.3, 14.2, 16.3 2.3.1,17.3 1.10 1.2, 1.3, 1.7.1 1.2, 1.3, 14.2.3 16.7 14.7.1 1.6 3.6.3,14.4,15.7,18.5 ch. 3,4.3,4.7,4.10, 14.3, 15.2, 15.3, 15.10, 16.5, 16.8, 17.8 3.4.4 3.4.4, 16.6 14.3.3,15.2,15.6.2,15.8 17.2, 17.8 1.11 3.8.6 3.6,3.8.2, 14.3.2 3.8 3.8.4 3.8.4 3.4.1, 3.5.4 17.11 3.7.3,4.7,14.6.2,15.7, ch.18 3.5.2 1.9,2.2.3, 12.4 8.2,8.3,16.10

Model Rule 3.3(a) 3.4(a) 3.4(b) 3.4(c) 3.4(d) 3.4(e)

3.5 3.6 3.7 3.8(f) 3.8(g) 4.1 4.2 4.3 4.4 5.3 5.7 7.3 7.4 8.2 8.3 8.4(b) 8.4(c) 8.4(d) 8.4(f)

Section Number 8.5,14.6,19.2,19.3 2.2.3,5.12,5.13 11.3, 14.6 10.8, 11.2, 11.7, 11.10, 12.6,12.7 ch. 6,16.10 4.8, ch. 10, 11.2, 11.9, 11.10, 11.12, 12.512.10,13.5,13.9,13.13, 13.18 8.6, ch. 9, 11.2 ch. 7 ch. 4, 6.7.7 14.5 7.2.2 17.5 5.4, 16.4, 17.6 5.7 5.9,9.3, 11.2, 12.11 5.7,5.8 3.4.4 16.4 1.3 7.3 1.7.3 11.4 5.7,8.8 12.3 8.6

655

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Chapter 1 Articles Comment, Attorney Malpractice: Use of Contract Analysis to Determine the Existence of an Attorney-Client Relationship, 63 Minn. L. Rev. 751 (1978-1979) Drogin, Alcoholism in the Legal Profession: Psychological and Legal Perspectives and Interventions, 15 Law and Psychol. Rev. 117 (1991) Farmer, Legal Practice and Ethics in North Carolina 1820-60, 30 N.C. Hist. Rev. 329 (1953) Fortune and O'Roark, Risk Management for Lawyers, 45 S.C. L. Rev. 617 (1994) Garwin, Beware of Beauty Contests: Proof of an Implied Attorney-Client Relationship Can Disqualify, 78 A.B.A.]. 84 (Jan. 1992) Gould, "Burnout": Law and Disorder, Natl. Lj., Apr. 30, 1984, at 13 Granelli, Referral Fees: Legal Kickbacks?, Natl. Lj., Apr. 27,1981, at 1 Hecht, Nobody Ever Said Clients Were Perfect, Natl. Lj., Mar. 9,1987, at 11 Holmes, Third Party Insurance Excess Liability and Its Avoidance, 34 Ark. L. Rev. 525 (1981) Johnston, Attorney Accountability in Kentucky-Liability to Clients and Third Parties, 70 Ky. Lj. 747 (1981-1982) Lerman, Lying to Clients, 138 U. Pa. L. Rev. 659 (1990) Liebson, Legal Malpractice Cases: Special Problems in Identifying Issues of Law and Fact and in the Use of Expert Testimony, 75 Ky. Lj. I (1986-1987) McManus, Malpractice Dangers in Tort Case Referrals, 24 Trial 62 (Aug. 1988) Mallen, Legal Malpractice, 20 Trial No.9, at 24 (1984) Medina, Ethical Concerns in Civil Appellate Advocacy, 43 Sw. Lj. 693 (1989) Note, Absolute Immunity in Defamation: Judicial Proceedings, 9 Colum. L. Rev. 463 (1909) Rensberger, Legal Specialists: What Standard of Care, Trial, May 1990, at 25 Rosner, Professionalism and Money, 78 A.B.A.]. 69 (May 1992) Sander, At Issue, 76 A.B.A.]. 50 (Nov. 1990) Thompson, Highway Robbery, 11 Cal. Law. 28 (May 1991) Underwood, Curbing Litigation Abuses: Judicial Control of Adversary Ethics-The Model Rules of Professional Conduct and Proposed Amendments to the Rules of Civil Procedure, 56 St.John's L. Rev. 630 (1981-1982) Underwood, Taking and Pursuing a Case: Some Observations Regarding "Legal Ethics" and Attorney Accountability, 74 Ky. Lj. 173 (1985-1986) Wade, The Attorney's Liability for Negligence, 12 Vand. L. Rev. 755 (1958) Williams, The Criminal Lawyer in Antebellum South Carolina, 56 S.C. Hist. Mag. 138 (1955)

657

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Books Bellow and Moulton, The Lawyering Process (1978) Binder and Bergman, Fact Investigation (1984) Binder and Price, Legal Interviewing and Counseling (1977) Blumberg and Baughman, Preventing Legal Malpractice: California Case Studies (1989) Cook, Roehl, and Shepperd, NeighborhoodJustice Centers' Field Test: Final Examination (1980) Costigan, Cases on Legal Ethics (1917) DuCann, The Art of the Advocate (1964) Hazard and Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct (2d ed. 1990) Hazard, Koniak, and Cramton, The Law and Ethics of Lawyering (1994) Hoffman, Fifty Resolutions in Regard to Professional Deportment (1836) Mallen and Smith, Legal Malpractice (3d ed. 1989) Morgan and Rotunda, Professional Responsibility (6th ed. 1995) Morrill, Trial Diplomacy (2d ed. 1979) Pannick, Advocates (1992) Patterson, Legal Ethics: The Law of Professional Responsibility (3d ed. 1989) Quintilian, Institutio Oratoria Book XlI, VII 2-5 Shaffer and Redmount, Legal Interviewing and Counseling (1980) Sharswood, An Essay on Professional Ethics (5th ed. 1896) Simmons, Winning before Trial (1976) Smith, Preventing Legal Malpractice (1981) Spills, American Bar Assn., An Overview of Lawyer Assistance Programs in the United States (1991) Wellman, Day in Court 79 Wolfram, Modern Legal Ethics (1986)

Chapter 2 Articles Beres, Civil Contempt and the Rational Contemnor, 69 Ind. LJ. 723 (1994) Cavanaugh, Developing Standards under Amended Rule II of the Federal Rules of Civil Procedure, 14 Hofstra L. Rev. 499 (1987) Comment, Frivolous Litigation, Discretionary Sanctioning and a Safe Harbor: The 1993 Revision of Rule 11,43 Kan. L. Rev. 207 (1994) Comment, A Practitioner's Guide to the 1993 Amendment to Federal Rule of Civil Procedure 11,67 Temp. L.Q 265 (1994) Cole, Rule 11 Now, 17 Litigation 10 (Spring 1991) Keeling, Toward a Balanced Approach to "Frivolous" Litigation: A Critical Review of Federal Rule II and State Sanctions Provisions, 21 Pepp. L. Rev. 1067 (1994) Levinson, Frivolous Cases: Do Lawyers Know Anything at All?, 24 Osgood Hall LJ. 353 (1987) Mallor, Punitive Attorneys' Fees for Abuse of the Judicial System, 61 N.C. L. Rev. 613 (1983) Nelken, Sanctions under Amended Federal Rule II-Some "Chilling" Problems in the Struggle between Compensation and Punishment, 74 Geo. LJ. 1313 (1986) Note: Applying Rule II to Rid Courts of Frivolous Litigation without Chilling the Bar's Creativity, 76 Ky. LJ. 891 (1987-1988)

658

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