b'Professional Responsibility:\nAn Open-Source Casebook\n\nBrian L. Frye & Elizabeth Schiller\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c2\n\nCover:\nHablot Knight Brown or \xe2\x80\x9cPhiz\xe2\x80\x9d\nAttorney and Client, Fortitute and Impatience (1853)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c3\nIt would be idle to assert that there is nothing of selfishness in the pursuit of a profession. But its\nideal is not one of individual success in competitive acquisitive activity. And because ideals\noperate powerfully to shape action, professional activity, even at its worst, is restrained and\nguided by something better than the desire for money rewards.1\nThe function of the lawyer is to preserve a sceptical relativism in a society hell-bent for\nabsolutes. The worse the society, the more law there will be. In Hell there will be nothing but law\nand due process will be meticulously observed.2\nAbout half the practice of a decent lawyer consists of telling would-be clients that they are\ndamned fools and should stop.3\nWe will not at present inquire whether the doctrine which is held on this subject by English\nlawyers be or be not agreeable to reason and morality; whether it be right that a man should,\nwith a wig on his head, and a band round his neck, do for a guinea what, without those\nappendages, he would think it wicked and infamous to do for an empire; whether it be right that,\nnot merely believing but knowing a statement to be true, he should do all that can be done by\nsophistry, by rhetoric, by solemn asseveration, by indignant exclamation, by gesture, by play of\nfeatures, by terrifying one honest witness, by perplexing another, to cause a jury to think that\nstatement false.4\nJustice says ye? I tell ye Hogan\xe2\x80\x99s r-right whin he says: \xe2\x80\x98Justice is blind.\xe2\x80\x99 Blind she is, an\xe2\x80\x99 deef\nan\xe2\x80\x99 dumb an\xe2\x80\x99 has a wooden leg! Niver again will they dhraw me to a coort. I\xe2\x80\x99ll take th\xe2\x80\x99 rude\njustice iv a piece iv lead pipe without costs or th\xe2\x80\x99 r-right iv appeal.5\nLawyer \xe2\x80\x94 One who protects us against robbers by taking away the temptation.6\nLAWYER, n. One skilled in circumvention of the law.7\nThe sad thing about lawyers is not that so many of them are stupid, but that so many of them\nare intelligent. The craft is a great devourer of good men; it sucks in and wastes almost as many\nas the monastic life consumed in the Middle Ages. There is something about it that is\nextraordinarily attractive to bright youngsters, especially in the United States. It not only offers\nthe chance of very substantial rewards in money; it also holds out the temptation of a sort of\npublic dignity, with political preferment thrown in for good measure.8\n1\n\nRoscoe Pound, What is a Profession - the Rise of the Legal Profession in Antiquity, 19 Notre Dame L.\nRev. 203 (1944).\n2\nGrant Gilmore, The Ages of American Law 110 (1977).\n3\nPhilip C. Jessup, 1 Elihu Root 133 (1964).\n4\nThomas Babington Macaulay, Essay on Francis Bacon (1874).\n5\nFinley Peter Dunne, Mr. Dooley\xe2\x80\x99s Opinions 118 (1901).\n6\nH.L. Mencken, A Mencken Chrestomathy (1949).\n7\nAmbrose Bierce, The Cynic\'s Dictionary (1906).\n8\nH.L. Mencken, Stewards of Nonsense, American Mercury 35 (Jan. 1928).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c4\nPreface\nThank you for your interest in Professional Responsibility: An Open-Source Casebook. We hope\nthat you find it useful and informative.\nThis is a free casebook. We believe that law students and others interested in the law should\nnot have to pay the high prices that commercial publishers charge for casebooks. Many others\nagree, and have created free or low-cost casebooks covering many different areas of the law.\nHere are some examples:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nBarton Beebe, Trademark Law: An Open-Source Casebook\nJames Boyle & Jennifer Jenkins, Open Intellectual Property Casebook\nStephen Clowney, James Grimmelmann, Michael Grynberg, Jeremy Sheff & Rebecca\nTushnet, Open Source Property: A Free Casebook\nJames Grimmelmann, Internet Law: Cases and Problems\nJames Grimmelmann, Patterns of Information Law: Intellectual Property Done Right\nSteve Semeraro, An Introduction to Property Law in the U.S.\nJeffrey Litwak, Interstate Compact Law: Cases & Materials\nLydia Pallas Loren & Joseph Scott Miller, Intellectual Property Law: Cases & Materials\nJohn T. Parry, Cases and Problems in Civil Rights Litigation: State, Federal and\nInternational Perspectives\nEric Goldman & Rebecca Tushnet, Advertising & Marketing Law: Cases & Materials\n\nIn addition, the Center for Computer-Assisted Legal Instruction (CALI) offers free casebooks in\nmany different subjects, including:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nBankruptcy Law and Practice\nBasic Income Tax\nContract Doctrine, Theory & Practice\nCorporate Income Tax\nThe Ethics of Tax Lawyering\nFirst Amendment: Cases, Controversies, and Contexts\nLand Use\nThe Law of Trusts\nLaw of Wills\nProperty\nSales and Leases: A Problem-based Approach\nSelected Materials on the Law of Evidence\nSources of American Law: An Introduction to Legal Research\nThe Story of Contract Law\nTorts: Cases and Contexts\nU.S. Federal Income Taxation of Individuals\nWetlands Law: A Course Source\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c5\nWe noticed that there was no free and open-source casebook available for a professional\nresponsibility class, so we decided to create one.\nWe wanted this casebook to be as easy to use and understand as possible. Accordingly, we\nincluded not only cases, but also the text of the rules and restatements, as well as concise\nexplanations of the relevant law. Each chapter of the book addresses a different issue, in the\nfollowing format. First, it clearly and concisely explains the relevant law governing that issue.\nThen provides the relevant text of any statutes, Model Rules, sections of the Restatement of the\nLaw Governing Lawyers, or other sources, with a link to an open-source versions of the full text,\nwhen available. It provides one or more heavily edited cases intended to illustrate the\napplication of the law at issue, with a link to an open-source version of the full text of the case.\nEach case is preceded by a brief summary of its facts, reasoning, and holding, and followed by\nquestions intended to indicate subjects for further investigation or discussion. And finally, it\nincludes citations to law review articles and other materials relevant to the law at issue, with\nlinks to open-source versions of those materials, when available.\nThis casebook covers a wide range of different subjects related to the professional responsibility\nof attorneys. While it is possible to cover all of this material in a three credit-hour course, you\nmay wish to omit some subjects. You may also wish to supplement the materials in this\ncasebook with additional materials. We encourage you to use this casebook in any way that you\nlike.\nThis casebook is licensed \xe2\x80\x9cCreative Commons 0 / No Rights Reserved.\xe2\x80\x9d That means that we\nexplicitly disclaim any copyright claim in all of the original elements that we created in writing\nthis casebook and have intentionally placed the casebook in the public domain. Because this\ncasebook is in the public domain, you can use the materials in it in any way that you like, with or\nwithout attribution. Of course, the casebook contains many copyrighted elements that belong to\nother people and that we used pursuant to fair use. Those elements are still protected by\ncopyright.\nWe hope that this free casebook helps show that it is possible to create teaching materials for\nlegal education in an open-source format. And we hope it makes access to the law governing\nlegal practice more accessible to law students, attorneys, and anyone interested in the\nregulation of the legal profession.\nIn closing, we would like to thank our research assistants Nicole Pottinger, Justin Cloyd, Mark\nBlankenship, Barrett Block, and Renee Wilson. We would also like to thank Cornelius Kearns,\nBrandon Magner, and Guy Hamilton-Smith for helpful comments.\n\xe2\x97\x8f\n\nBrian L. Frye & Elizabeth Schiller\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c6\nTable of Contents\nSection 1: Introduction\n1.1: Introduction to Professional Responsibility\n1.2: The History of the Legal Profession\nSection 2: The Attorney-Client Relationship\n2.1: Creating an Attorney-Client Relationship\n2.2: Ending an Attorney-Client Relationship\n2.3: The Attorney as Agent\n2.4: The Client as Principal\n2.5: Ex Parte Communications\n2.6: Attorney\xe2\x80\x99s Fees\n2.7: Financial Relationships with Clients\n2.8: Organizations as Clients\n2.9: Agents as Clients\nSection 3: The Legal Duties of an Attorney\n3.1: Fiduciary Duties\n3.2: Legal Malpractice\n3.3: Ineffective Assistance of Counsel\nSection 4: Conflicts of Interest\n4.1: Identifying Conflicts of Interest\n4.2: Resolving Conflicts of Interest\n4.3: Breach of the Duty of Loyalty\n4.4: Current Client Conflicts of Interest\n4.5: Former Client Conflicts on Interest\n4.6: Associational Conflicts of Interest\n4.7: Specific Conflicts of Interest\n4.8: Personal Conflicts of Interest\nSection 5: Confidentiality\n5.1: The Duty of Confidentiality\n5.2: Exceptions to the Duty of Confidentiality\n5.3: The Attorney-Client Privilege\n5.4: Applying the Attorney-Client Privilege\n5.5: Corporate Privilege\n5.6: The Work Product Doctrine\n5.7: Exceptions to Privilege & Work Product\nSection 6: Advocacy & Conduct\n6.1: Frivolous Pleading\n6.2: Improper Advocacy\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c7\n6.3: Attorney Misconduct\n6.4: Client Perjury\n6.5: Alternative Dispute Resolution\nSection 7: The Regulation of the Legal Profession\n7.1: Bar Admission\n7.2: Advertising\n7.3: Solicitation\n7.4: Prosecutorial Misconduct\n7.5: Judicial Recusal & Misconduct\nSection 8: Justifying the Rules of Professional Responsibility\n8.1: Theories of Legal Ethics\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c8\nSection 1: Introduction\n1.1: Introduction to Professional Responsibility\nOur band could be your life. Real names\xe2\x80\x99d be proof.9\nWelcome to professional responsibility. Contrary to conventional wisdom among law students,\nthis is one of the most important classes you will take in law school. It is not only the only class\nexplicitly required by the American Bar Association (\xe2\x80\x9cABA\xe2\x80\x9d), but also the subject of the\nMultistate Professional Responsibility Examination (\xe2\x80\x9cMPRE\xe2\x80\x9d), a test that the overwhelming\nmajority of law school graduates must pass in order to become a member of their state bar\nassociation.10\nBut that is the least of it. This class on professional responsibility will enable you to practice law\nconsistent with the law governing lawyers and other professional obligations. And it will help you\nensure that you are never the subject of a disciplinary action or sanction from the bar or the\ncourts. In other words, this class could be your life, or at least your livelihood. Take it seriously,\nbecause the rules, principles, and obligations you learn about in this class will govern everything\nyou do as an attorney.\nWhat is \xe2\x80\x9cProfessional Responsibility\xe2\x80\x9d?\nProfessional responsibility is the only class that the ABA explicitly requires law schools to\nprovide in order to qualify for accreditation. Under the ABA\xe2\x80\x99s 2018-2019 Standards and Rules of\nProcedure for Approval of Law Schools, \xe2\x80\x9cA law school shall maintain a rigorous program of legal\neducation that prepares its students, upon graduation, for admission to the bar and for effective,\nethical, and responsible participation as members of the legal profession.\xe2\x80\x9d Standard 301(a).\nAccordingly, \xe2\x80\x9cA law school shall establish learning outcomes that shall, at a minimum, include\ncompetency in the exercise of proper professional and ethical responsibilities to clients and the\nlegal system, and other professional skills needed for competent and ethical participation as a\nmember of the legal profession.\xe2\x80\x9d Standard 302(c)&(d). And in order to satisfy that requirement,\n\xe2\x80\x9cA law school shall offer a curriculum that requires each student to satisfactorily complete at\nleast one course of at least two credit hours in professional responsibility that includes\nsubstantial instruction in rules of professional conduct, and the values and responsibilities of the\nlegal profession and its members.\xe2\x80\x9d Standard 303(a)(1).\nHowever, law schools and law professors retain considerable discretion in how they teach\nprofessional responsibility. While the ABA accreditation standards provide that law schools must\nrequire a professional responsibility class, they do not specify what subjects the class must\ncover or how it should be taught. Unsurprisingly, law schools typically delegate those decisions\n9\n\nMinutemen, History Lesson \xe2\x80\x93 Part II, Double Nickels on the Dime (1984).\nWisconsin and Puerto Rico currently do not require the MPRE for bar membership. Connecticut and\nNew Jersey currently accept successful completion of a law school course on professional responsibility\nin lieu of the MPRE.\n10\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c9\nto law professors, who have adopted a wide range of different approaches. Some classes focus\non the ABA\xe2\x80\x99s Model Rules of Professional Conduct and how courts use them to regulate\nattorneys. Other classes focus on the concept of legal ethics and the justification of the legal\nprofession. And still other classes focus on how attorneys actually comply with rules of\nprofessional conduct in practice.\nThis casebook is designed for a class focused on the Model Rules of Professional Conduct and\ntheir practical application. Each chapter of the book addresses a different issue, in the following\nformat. First, it clearly and concisely explains the relevant law governing that issue. Then\nprovides the relevant text of any statutes, Model Rules, sections of the Restatement of the Law\nGoverning Lawyers, or other sources, with a link to an open-source versions of the full text,\nwhen available. It provides one or more heavily edited cases intended to illustrate the\napplication of the law at issue, with a link to an open-source version of the full text of the case.\nEach case is preceded by a brief summary of its facts, reasoning, and holding, and followed by\nquestions intended to indicate subjects for further investigation or discussion. And finally, it\nincludes citations to law review articles and other materials relevant to the law at issue, with\nlinks to open-source versions of those materials, when available.\nLegal Ethics v. The Regulation of Legal Practice\nDifferent lawyers think about professional responsibility in different ways, different law\nprofessors teach professional responsibility in different ways, and different legal scholars\nconceptualize professional responsibility in different ways. Some attorneys, professors, and\nscholars see professional responsibility as the practice of legal ethics. In other words, they\nbelieve that the rules of professional responsibility are expressions of ethical principles, and the\nlegitimacy of those rules depends on the legitimacy of the ethical principles they express. But\nother attorneys, professors, and scholars see professional responsibility as merely the\nregulation of legal practice. In other words, they believe that the rules of professional\nresponsibility are just the positive law governing attorneys.\nLegal Ethics\nLegal ethics can be either descriptive or normative. While both descriptive and normative legal\nethics investigate the ethical values motivating the law of professional responsibility, they do so\nin very different ways, with fundamentally different goals. Descriptive legal ethics asks what the\nethical values of law of professional responsibility are; normative legal ethics asks what they\nshould be.\nDescriptive legal ethics assumes that the statutes and rules governing the practice of law, as\nwell as the cases interpreting and applying those statutes and rules, effectively express the\nethical values of the legal profession. Accordingly, by studying the law of professional\nresponsibility in action, one can identify the ethical values inherent in the law that motivate its\narticulation, interpretation, and application.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c10\nNormative legal ethics asks whether the law of professional responsibility expresses a true\nmoral theory. In other words, it starts with a moral theory, and asks whether the law of\nprofessional responsibility produces results consistent with that theory. Of course, different\nnormative theories of legal ethics may adopt different moral theories. But they all assume that\nthe purpose of the law of professional responsibility is to produce moral outcomes. Accordingly,\nthe law of professional responsibility is justified if it expresses a true moral theory, and\nunjustified if it does not.\nThe Regulation of Legal Practice\nThis casebook focuses on the regulation of legal practice, not legal ethics. The primary purpose\nof this casebook is to help you better understand how the bar and the courts actually apply the\nstatutes and rules governing the practice of law. While this casebook is not a study guide for the\nMPRE, it should help you better understand the questions on the MPRE and how to answer\nthem correctly.\nThe various bar associations, often in conjunction with the courts, adopt disciplinary rules\nregulating legal practice. Some of those rules are mandatory, and define what attorneys must\nand must not do. Other rules are discretionary, and describe what attorneys may and may not\ndo. And still other rules are aspirational, and explain what attorneys should and should not do.\nWhen the courts consider a complaint against an attorney, they typically apply the disciplinary\nrules adopted by the bar association, in light of generally applicable legal principles. In other\nwords, they ask not only whether the attorney violated the letter or spirit of the disciplinary rules,\nbut also whether the rules at issue are valid and enforceable. However, a court may find that an\nattorney who has not violated the disciplinary rules has still violated some other legal duty.\nAccordingly, this casebook focuses on describing the law of professional responsibility,\nexplaining how it has been applied, and asking whether it was applied correctly. However, the\nlaw of professional responsibility differs from jurisdiction to jurisdiction. Sometimes those\ndifferences are minor, but other times they are fundamental. This casebook focuses of\ndescribing, explaining, and reflecting on the application of the most paradigmatic rules, as\nexemplified by the Model Rules of Professional Conduct and the Restatement of the Law\nGoverning Lawyers.\nOf course, studying an area of law inevitably provokes reflections on its purpose and\njustification. Even a casebook devoted to the study of the regulation of legal practice cannot\navoid implicating questions of legal ethics. What values does the law of professional\nresponsibility express? Are those values justified? What makes a rule of professional conduct\njustified or unjustified? What is the purpose of the law of professional responsibility? All of these\nethical issues are implicit in the subject matter of this class. But they are not the subject matter\nof this casebook. Or at the very least, while this casebook may directly or indirectly raise those\nquestions, it does not purport to answer them or take a position on how they should be\nanswered.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c11\n\nModel Rules of Professional Conduct: Preamble & Scope\nPreamble: A Lawyer\xe2\x80\x99s Responsibilities\n1. A lawyer, as a member of the legal profession, is a representative of clients, an officer of\nthe legal system and a public citizen having special responsibility for the quality of\njustice.\n2. As a representative of clients, a lawyer performs various functions. As advisor, a lawyer\nprovides a client with an informed understanding of the client\xe2\x80\x99s legal rights and\nobligations and explains their practical implications. As advocate, a lawyer zealously\nasserts the client\xe2\x80\x99s position under the rules of the adversary system. As negotiator, a\nlawyer seeks a result advantageous to the client but consistent with requirements of\nhonest dealings with others. As an evaluator, a lawyer acts by examining a client\xe2\x80\x99s legal\naffairs and reporting about them to the client or to others.\n3. In addition to these representational functions, a lawyer may serve as a third-party\nneutral, a nonrepresentational role helping the parties to resolve a dispute or other\nmatter. Some of these Rules apply directly to lawyers who are or have served as thirdparty neutrals. In addition, there are Rules that apply to lawyers who are not active in the\npractice of law or to practicing lawyers even when they are acting in a nonprofessional\ncapacity. For example, a lawyer who commits fraud in the conduct of a business is\nsubject to discipline for engaging in conduct involving dishonesty, fraud, deceit or\nmisrepresentation.\n4. In all professional functions a lawyer should be competent, prompt and diligent. A lawyer\nshould maintain communication with a client concerning the representation. A lawyer\nshould keep in confidence information relating to representation of a client except so far\nas disclosure is required or permitted by the Rules of Professional Conduct or other law.\n5. A lawyer\xe2\x80\x99s conduct should conform to the requirements of the law, both in professional\nservice to clients and in the lawyer\'s business and personal affairs. A lawyer should use\nthe law\xe2\x80\x99s procedures only for legitimate purposes and not to harass or intimidate others.\nA lawyer should demonstrate respect for the legal system and for those who serve it,\nincluding judges, other lawyers and public officials. While it is a lawyer\xe2\x80\x99s duty, when\nnecessary, to challenge the rectitude of official action, it is also a lawyer\'s duty to uphold\nlegal process.\n6. As a public citizen, a lawyer should seek improvement of the law, access to the legal\nsystem, the administration of justice and the quality of service rendered by the legal\nprofession. As a member of a learned profession, a lawyer should cultivate knowledge of\nthe law beyond its use for clients, employ that knowledge in reform of the law and work\nto strengthen legal education. In addition, a lawyer should further the public\xe2\x80\x99s\nunderstanding of and confidence in the rule of law and the justice system because legal\ninstitutions in a constitutional democracy depend on popular participation and support to\nmaintain their authority. A lawyer should be mindful of deficiencies in the administration\nof justice and of the fact that the poor, and sometimes persons who are not poor, cannot\nafford adequate legal assistance. Therefore, all lawyers should devote professional time\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c12\nand resources and use civic influence to ensure equal access to our system of justice for\nall those who because of economic or social barriers cannot afford or secure adequate\nlegal counsel. A lawyer should aid the legal profession in pursuing these objectives and\nshould help the bar regulate itself in the public interest.\n7. Many of a lawyer\xe2\x80\x99s professional responsibilities are prescribed in the Rules of\nProfessional Conduct, as well as substantive and procedural law. However, a lawyer is\nalso guided by personal conscience and the approbation of professional peers. A lawyer\nshould strive to attain the highest level of skill, to improve the law and the legal\nprofession and to exemplify the legal profession\xe2\x80\x99s ideals of public service.\n8. A lawyer\xe2\x80\x99s responsibilities as a representative of clients, an officer of the legal system\nand a public citizen are usually harmonious. Thus, when an opposing party is well\nrepresented, a lawyer can be a zealous advocate on behalf of a client and at the same\ntime assume that justice is being done. So also, a lawyer can be sure that preserving\nclient confidences ordinarily serves the public interest because people are more likely to\nseek legal advice, and thereby heed their legal obligations, when they know their\ncommunications will be private.\n9. In the nature of law practice, however, conflicting responsibilities are encountered.\nVirtually all difficult ethical problems arise from conflict between a lawyer\xe2\x80\x99s\nresponsibilities to clients, to the legal system and to the lawyer\xe2\x80\x99s own interest in\nremaining an ethical person while earning a satisfactory living. The Rules of Professional\nConduct often prescribe terms for resolving such conflicts. Within the framework of these\nRules, however, many difficult issues of professional discretion can arise. Such issues\nmust be resolved through the exercise of sensitive professional and moral judgment\nguided by the basic principles underlying the Rules. These principles include the\nlawyer\xe2\x80\x99s obligation zealously to protect and pursue a client\'s legitimate interests, within\nthe bounds of the law, while maintaining a professional, courteous and civil attitude\ntoward all persons involved in the legal system.\n10. The legal profession is largely self-governing. Although other professions also have\nbeen granted powers of self-government, the legal profession is unique in this respect\nbecause of the close relationship between the profession and the processes of\ngovernment and law enforcement. This connection is manifested in the fact that ultimate\nauthority over the legal profession is vested largely in the courts.\n11. To the extent that lawyers meet the obligations of their professional calling, the occasion\nfor government regulation is obviated. Self-regulation also helps maintain the legal\nprofession\'s independence from government domination. An independent legal\nprofession is an important force in preserving government under law, for abuse of legal\nauthority is more readily challenged by a profession whose members are not dependent\non government for the right to practice.\n12. The legal profession\'s relative autonomy carries with it special responsibilities of selfgovernment. The profession has a responsibility to assure that its regulations are\nconceived in the public interest and not in furtherance of parochial or self-interested\nconcerns of the bar. Every lawyer is responsible for observance of the Rules of\nProfessional Conduct. A lawyer should also aid in securing their observance by other\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c13\nlawyers. Neglect of these responsibilities compromises the independence of the\nprofession and the public interest which it serves.\n13. Lawyers play a vital role in the preservation of society. The fulfillment of this role requires\nan understanding by lawyers of their relationship to our legal system. The Rules of\nProfessional Conduct, when properly applied, serve to define that relationship.\nScope\n14. The Rules of Professional Conduct are rules of reason. They should be interpreted with\nreference to the purposes of legal representation and of the law itself. Some of the Rules\nare imperatives, cast in the terms \xe2\x80\x9cshall\xe2\x80\x9d or \xe2\x80\x9cshall not.\xe2\x80\x9d These define proper conduct for\npurposes of professional discipline. Others, generally cast in the term \xe2\x80\x9cmay,\xe2\x80\x9d are\npermissive and define areas under the Rules in which the lawyer has discretion to\nexercise professional judgment. No disciplinary action should be taken when the lawyer\nchooses not to act or acts within the bounds of such discretion. Other Rules define the\nnature of relationships between the lawyer and others. The Rules are thus partly\nobligatory and disciplinary and partly constitutive and descriptive in that they define a\nlawyer\'s professional role. Many of the Comments use the term \xe2\x80\x9cshould.\xe2\x80\x9d Comments do\nnot add obligations to the Rules but provide guidance for practicing in compliance with\nthe Rules.\n15. The Rules presuppose a larger legal context shaping the lawyer\xe2\x80\x99s role. That context\nincludes court rules and statutes relating to matters of licensure, laws defining specific\nobligations of lawyers and substantive and procedural law in general. The Comments\nare sometimes used to alert lawyers to their responsibilities under such other law.\n16. Compliance with the Rules, as with all law in an open society, depends primarily upon\nunderstanding and voluntary compliance, secondarily upon reinforcement by peer and\npublic opinion and finally, when necessary, upon enforcement through disciplinary\nproceedings. The Rules do not, however, exhaust the moral and ethical considerations\nthat should inform a lawyer, for no worthwhile human activity can be completely defined\nby legal rules. The Rules simply provide a framework for the ethical practice of law.\n17. Furthermore, for purposes of determining the lawyer\xe2\x80\x99s authority and responsibility,\nprinciples of substantive law external to these Rules determine whether a client-lawyer\nrelationship exists. Most of the duties flowing from the client-lawyer relationship attach\nonly after the client has requested the lawyer to render legal services and the lawyer has\nagreed to do so. But there are some duties, such as that of confidentiality, that attach\nwhen the lawyer agrees to consider whether a client-lawyer relationship shall be\nestablished. Whether a client-lawyer relationship exists for any specific purpose can\ndepend on the circumstances and may be a question of fact.\n18. Under various legal provisions, including constitutional, statutory and common law, the\nresponsibilities of government lawyers may include authority concerning legal matters\nthat ordinarily reposes in the client in private client-lawyer relationships. For example, a\nlawyer for a government agency may have authority on behalf of the government to\ndecide upon settlement or whether to appeal from an adverse judgment. Such authority\nin various respects is generally vested in the attorney general and the state\'s attorney in\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c14\nstate government, and their federal counterparts, and the same may be true of other\ngovernment law officers. Also, lawyers under the supervision of these officers may be\nauthorized to represent several government agencies in intragovernmental legal\ncontroversies in circumstances where a private lawyer could not represent multiple\nprivate clients. These Rules do not abrogate any such authority.\n19. Failure to comply with an obligation or prohibition imposed by a Rule is a basis for\ninvoking the disciplinary process. The Rules presuppose that disciplinary assessment of\na lawyer\xe2\x80\x99s conduct will be made on the basis of the facts and circumstances as they\nexisted at the time of the conduct in question and in recognition of the fact that a lawyer\noften has to act upon uncertain or incomplete evidence of the situation. Moreover, the\nRules presuppose that whether or not discipline should be imposed for a violation, and\nthe severity of a sanction, depend on all the circumstances, such as the willfulness and\nseriousness of the violation, extenuating factors and whether there have been previous\nviolations.\n20. Violation of a Rule should not itself give rise to a cause of action against a lawyer nor\nshould it create any presumption in such a case that a legal duty has been breached. In\naddition, violation of a Rule does not necessarily warrant any other nondisciplinary\nremedy, such as disqualification of a lawyer in pending litigation. The Rules are\ndesigned to provide guidance to lawyers and to provide a structure for regulating\nconduct through disciplinary agencies. They are not designed to be a basis for civil\nliability. Furthermore, the purpose of the Rules can be subverted when they are invoked\nby opposing parties as procedural weapons. The fact that a Rule is a just basis for a\nlawyer\xe2\x80\x99s self-assessment, or for sanctioning a lawyer under the administration of a\ndisciplinary authority, does not imply that an antagonist in a collateral proceeding or\ntransaction has standing to seek enforcement of the Rule. Nevertheless, since the Rules\ndo establish standards of conduct by lawyers, a lawyer\xe2\x80\x99s violation of a Rule may be\nevidence of breach of the applicable standard of conduct.\n21. The Comment accompanying each Rule explains and illustrates the meaning and\npurpose of the Rule. The Preamble and this note on Scope provide general orientation.\nThe Comments are intended as guides to interpretation, but the text of each Rule is\nauthoritative.\nQuestions:\n1. What are these two sections of the Model Rules intended to accomplish?\n2. Does the Preamble seem to describe disciplinary rules, ethical rules, or both? What\nabout the section on the scope of the Model Rules?\n3. Does the Preamble suggest that the Model Rules provide ethical guidance for attorneys?\nWhat about the section on scope?\nThe Duty of Zealous Representation\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c15\nThe client never wants to be told he can\xe2\x80\x99t do what he wants to do; he wants to be told how to do\nit, and it is the lawyer\xe2\x80\x99s business to tell him how.11\nIf I had a million dollars, would you work for me? Well, I don\'t know my friend, I guess we\'ll have\nto wait and see. Would you do anything that I asked you to do? Yes, I would, if the money came\nthrough.12\nPerhaps the most fundamental duty of an attorney is the duty of \xe2\x80\x9czealous representation.\xe2\x80\x9d\nAttorneys must represent the interests of their clients to the best of their ability and to the extent\npermitted by the law. And attorneys must always advocate for their client\xe2\x80\x99s interests, to the\nexclusion of anyone else\xe2\x80\x99s interests, including their own. Specifically, attorneys must zealously\nrepresent their client\xe2\x80\x99s interests, even at their own expense.\nBut the duty of zealous representation can conflict with an attorney\xe2\x80\x99s other duties, especially an\nattorney\xe2\x80\x99s duties to the court. As members of the bar, attorneys are also officers of the court.\nAmong other things, they owe the court a duty of candor. But sometimes an attorney\xe2\x80\x99s duty of\nzealous representation can conflict with the duty of candor. For example, the duty of zealous\nrepresentation may require attorneys to avoid or minimize evidence that is detrimental to their\nclients. But the duty of candor may require attorneys to disclose that same evidence to the\ncourt.\nCanon 7 of the ABA Model Code of Professional Responsibility (1980) stated that \xe2\x80\x9ca lawyer\nshould represent a client zealously within the bounds of the law.\xe2\x80\x9d Ethical Consideration 7-1\nprovided, \xe2\x80\x9cThe duty of a lawyer, both to his client and to the legal system, is to represent his\nclient zealously within the bounds of the law, which includes Disciplinary Rules and enforceable\nprofessional regulations.\xe2\x80\x9d Among other things, Disciplinary Rule 7-101(A) provided, \xe2\x80\x9cA lawyer\nshall not intentionally fail to seek the lawful objectives of his client through reasonably available\nmeans permitted by law and the Disciplinary Rules.\xe2\x80\x9d\nWhen the ABA adopted the Model Rules of Professional Conduct in 1983, it did not use the\nterm \xe2\x80\x9czealous representation.\xe2\x80\x9d Instead, Model Rule 1.3 provided, \xe2\x80\x9cA lawyer shall act with\nreasonable diligence and promptness in representing a client.\xe2\x80\x9d However, Comment [1]\nobserved:\nA lawyer should pursue a matter on behalf of a client despite opposition, obstruction or\npersonal inconvenience to the lawyer, and take whatever lawful and ethical measures\nare required to vindicate a client\xe2\x80\x99s cause or endeavor. A lawyer must also act with\ncommitment and dedication to the interests of the client and with zeal in advocacy upon\nthe client\'s behalf. A lawyer is not bound, however, to press for every advantage that\nmight be realized for a client. For example, a lawyer may have authority to exercise\nprofessional discretion in determining the means by which a matter should be pursued.\n11\n\nRobert T. Swaine, The Cravath Firm and Its Predecessors, 1819-1947, at 667 (1946) (quoting Elihu\nRoot).\n12\nCharles Manson, If I Had a Million Dollars, The Family Jams (1970/1997).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c16\nThe lawyer\xe2\x80\x99s duty to act with reasonable diligence does not require the use of offensive\ntactics or preclude the treating of all persons involved in the legal process with courtesy\nand respect.\nToday, courts and scholars continue to refer to an attorney\xe2\x80\x99s \xe2\x80\x9cduty of zealous representation.\xe2\x80\x9d\nWhat is the scope of that duty? What should it be? How should attorneys and courts balance\nthe duty of zealous representation against an attorney\xe2\x80\x99s duties to the court and to society as a\nwhole?\nQuestions:\n1. After the terrorist attacks of September 11, 2001, President Bush asked the Office of\nLegal Counsel for its opinion on the legality of certain interrogation techniques. OLC\nproduced several memoranda arguing that the techniques were legal under domestic\nand international law, which ultimately became known as the \xe2\x80\x9ctorture memos.\xe2\x80\x9d The\ntorture memos were almost universally condemned by policymakers and legal scholars\nas both immoral and incorrect statements of the governing law. Should OLC have\nproduced the memos? Was it a violation of the rules of professional conduct for OLC to\nmake arguments based on inaccurate interpretations of the law. Was it a violation of\nlegal ethics for OLC to make arguments in favor of the interrogation techniques? Would\nit have been a violation of legal ethics if those techniques were in fact legal? Would it\nhave been a violation of the rules of professional conduct for OLC to produce memos\npresenting arguments both for and against the legality of the interrogation techniques?\nTorres v. Donnelly, 554 F. 3d 322 (2d Cir. 2009)\nSummary: Torres was charged with armed robbery. Anna Rodriguez, one of the victims,\nidentified Torres when the police showed her a photo array and again when Torres\xe2\x80\x99s\nattorney Keefe showed her a photo array. In her trial testimony, Rodriguez stated that\nshe did not identify Torres the \xe2\x80\x9csecond time\xe2\x80\x9d the police showed her a photo array. Keefe\nrealized that she was referring to the photo array he showed her, and informed the court\nthat she had identified Torres. Torres was convicted, and filed a habeas petition, alleging\nineffective assistance of counsel for failure to provide zealous representation. The court\ndenied the petition, holding that Keefe\xe2\x80\x99s duty to correct false testimony did not conflict\nwith his duty to provide zealous representation.\nHALL, Circuit Judge:\nPetitioner-Appellant Jesus Torres appeals from a judgment of the United States District Court\nfor the Western District of New York denying his petition for a writ of habeas corpus. Following a\njury trial, Torres was convicted of two counts of robbery in the first degree. On direct appeal,\nTorres raised an ineffective assistance of counsel claim. The Appellate Division dismissed his\nclaim and unanimously affirmed his conviction. Here, Torres argues that he was denied effective\nassistance of counsel.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c17\n\nThe basis of Torres\xe2\x80\x99s habeas claim stems from his defense counsel\xe2\x80\x99s line of questioning during\ncross-examination of an identification witness, Anna Rodriguez, which inadvertently elicited\ntestimony counsel personally knew to be inaccurate. Subsequently, to avoid becoming a\nwitness himself and to comply with his ethical obligations to the court to correct false testimony,\ncounsel agreed to stipulate that, contrary to Anna\xe2\x80\x99s testimony during cross-examination, Anna\nhad identified Torres when counsel had shown her a photographic array prior to trial. Torres\nasserts that defense counsel Thomas Keefe\xe2\x80\x99s actions gave rise to an actual conflict of interest\nthat so adversely affected his performance that it was unnecessary to demonstrate resulting\nprejudice. Torres also asserts that there is a reasonable possibility that, but for the errors of\ndefense counsel, the outcome of his trial would have been different.\nBACKGROUND\nTorres was tried for the November 6, 1997 robberies of two grocery stores in Buffalo, New York.\nTorres does not contest his conviction for the first robbery of a store on Vermont Street. His\nhabeas claim extends only to his conviction on the second robbery, which occurred on\nHampshire Avenue. The robbery on Hampshire Avenue was witnessed by Olga Rodriguez, who\nwas behind the counter, Olga\xe2\x80\x99s sister, Anna, and her niece, Lisalotte Rodriguez. Lisalotte was\nnot called to testify as a trial witness.\nAt trial, Olga identified Torres as the robber and testified that she saw him clearly during the\nrobbery. Olga also testified that her sister Anna had been unable to identify the defendant when\nshown a photo array by detectives. Defense counsel asked Olga, \xe2\x80\x9cIn your presence, while you\nwere in the store, did a detective with the Buffalo Police Department show a photo to your sister\nat any time?\xe2\x80\x9d Olga responded, \xe2\x80\x9cShe did not identify. She was not paying too much attention that\nnight of the robbery.\xe2\x80\x9d\nOn cross-examination of Anna, defense counsel sought to build on Olga\xe2\x80\x99s testimony and elicit\nfrom Anna that she had been unable to identify the defendant in at least one photo array shown\nto her by police. In response to questioning from defense counsel and the trial court, Anna\ntestified that she had identified the robber in the first photo array she was shown, but that she\n\xe2\x80\x9ccouldn\'t identify the robber the second time around.\xe2\x80\x9d Defense counsel then sought to determine\nthe dates that the police had shown Anna the two photo arrays. Although Anna initially stated\nthat the second photo array had been shown to her in January 1998, upon further questioning\nshe indicated that it had occurred in June 1998, a fact which was clarified and confirmed by the\ntrial court. According to Anna, she did not identify the robber when presented with this second\narray because she was \xe2\x80\x9cso nervous.\xe2\x80\x9d When the date of the second photo array was confirmed\nby the court\'s questioning, however, Attorney Keefe realized that the photo array to which Anna\nwas referring was the one that he had shown her in June or July 1998 as part of his preparation\nfor trial and not one shown to her by police. He interjected and clarified to the court that he in\nfact had been in the store in June or July 1998 and presented a photo array to Anna. On\nredirect examination, Anna repeated that she did not identify Torres when Attorney Keefe\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c18\nshowed her an array because she was nervous. Contrary to Anna\xe2\x80\x99s testimony, however,\nAttorney Keefe knew that Anna had identified Torres when he had shown her the photo array.\nLater, in a colloquy outside the presence of the jury, the prosecutor argued that it was important\nto clarify to the jurors what Anna had told Attorney Keefe about the photo array. He asserted\nthat by showing her the photo array, Keefe had essentially made himself a witness in the case.\nUpon questioning by the trial court, and because of Attorney Keefe\'s ethical obligation not to\n\xe2\x80\x9cknowingly use false evidence,\xe2\x80\x9d Keefe ultimately informed the court that Anna had identified\nTorres when Keefe showed her the photo array in June or July 1998. Keefe explained that he\nhad pursued his line of questioning under the mistaken belief that the police had shown Anna\ntwo sets of photo arrays on separate occasions.\nTo avoid the complications of defense counsel being called to the stand and possibly obtaining\ndifferent counsel for Torres, the trial court suggested, and Attorney Keefe agreed to, the\nfollowing stipulation, which the court then read to the jury:\nBoth parties are concerned that there may be confusion over Anna Rodriguez\xe2\x80\x99s\ntestimony with regard to photo arrays. To clarify this issue over what photo array was\nshown to her, we, the attorneys, stipulate that on or about June or July of 1998, attorney\nThomas Keefe showed her a photocopy of one of the arrays, and asked her if she could\nidentify the robber. The witness did identify the robber as number 3.\nAfter deliberations, the jury convicted Torres on both counts of robbery.\nOn direct appeal from the conviction, the Appellate Division affirmed Torres\'s conviction. As to\ncounsel\xe2\x80\x99s cross-examination of Anna and resulting stipulation, it found that:\nDefense counsel\xe2\x80\x99s stipulation advising the jury that a witness identified defendant in a\nphoto array shown to her by defense counsel was not an egregious error that denied\ndefendant effective assistance of counsel. Defense counsel reasonably believed that the\nwitness had been shown two photo arrays by police; during cross examination the\nwitness testified that she identified defendant in the first photo array but not in the\nsecond photo array. During the course of the witness\'s testimony, defense counsel\nrealized the \xe2\x80\x9csecond\xe2\x80\x9d photo array to which the witness referred was the photo array that\nhe had shown the witness, and therefore the testimony of the witness that she did not\nidentify defendant in that photo array was not true. Defense counsel could not\n\xe2\x80\x9cknowingly use false evidence\xe2\x80\x9d and thus was required to report the incorrect testimony to\nthe court. Defense counsel\xe2\x80\x99s alternative to the stipulation was to testify as a witness,\nwhich would have required new counsel for defendant.\nDISCUSSION\nTo establish that counsel\xe2\x80\x99s performance was constitutionally defective, a defendant must show\nthat \xe2\x80\x9cthe lawyer\'s performance \xe2\x80\x98fell below an objective standard of reasonableness\xe2\x80\x99 and that\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c19\n\xe2\x80\x98there is a reasonable probability that, but for counsel\xe2\x80\x99s unprofessional errors, the result of the\nproceedings would have been different.\xe2\x80\x99\xe2\x80\x9d Even if counsel\xe2\x80\x99s performance is found professionally\nunreasonable, \xe2\x80\x9cany deficiencies in counsel\'s performance must be prejudicial to the defense in\norder to constitute ineffective assistance under the Constitution.\xe2\x80\x9d Therefore, the question\nbecomes \xe2\x80\x9cwhether there is a reasonable probability that, absent the errors, the factfinder would\nhave had a reasonable doubt respecting guilt.\xe2\x80\x9d In certain circumstances, however, prejudice\nmay be presumed, and an individual inquiry regarding this factor is unnecessary. Similarly, the\nSupreme Court has recognized that when a criminal defendant claims that defense counsel was\n\xe2\x80\x9cburdened by an actual conflict of interest,\xe2\x80\x9d this warrants a \xe2\x80\x9climited presumption of prejudice.\xe2\x80\x9d In\nthese instances, the presumption of prejudice attaches \xe2\x80\x9conly if the defendant demonstrates that\ncounsel \xe2\x80\x98actively represented conflicting interests\xe2\x80\x99 and that \xe2\x80\x98an actual conflict of interest\nadversely affected his lawyer\xe2\x80\x99s performance.\xe2\x80\x99\xe2\x80\x9d\nTorres argues that the limited presumption is applicable to his case such that he is not required\nto demonstrate he was prejudiced by his counsel\xe2\x80\x99s performance. We disagree. Although Keefe\nhad parallel duties to zealously represent his client and not to use false evidence, this did not\ncreate an actual conflict of interest. Though the presumption has been \xe2\x80\x9cunblinkingly\xe2\x80\x9d applied to\n\xe2\x80\x9call kinds of alleged attorney ethical conflicts,\xe2\x80\x9d it does not support this expansive application.\nThe presumption was created to account for the \xe2\x80\x9chigh probability of prejudice arising from\nmultiple concurrent representation, and the difficulty of proving that prejudice.\xe2\x80\x9d However, \xe2\x80\x9cnot all\nattorney conflicts present comparable difficulties. Here, defense counsel\xe2\x80\x99s ethical obligation to\ncorrect the testimony he knew to be inaccurate does not present the difficulties and high\nprobability of prejudice engendered by joint representation. At most, in this case defense\ncounsel\xe2\x80\x99s earnest representation of his client was constrained by ethical guidelines applicable to\nevery attorney appearing as trial counsel, to wit, that \xe2\x80\x9cin the representation of a client, a lawyer\nshall not knowingly use perjured or false evidence.\xe2\x80\x9d\nAccordingly, we hold that the tension between Keefe\xe2\x80\x99s parallel duties of (1) zealous\nrepresentation and (2) candor to the court, which gives rise to his obligation to correct the\nrecord, did not create a conflict of interest of the sort identified in Sullivan. This holding \xe2\x80\x9cis\nconsistent with the governance of trial conduct in what we have long called \xe2\x80\x98a search for truth.\xe2\x80\x99\xe2\x80\x9d\nIndeed, \xe2\x80\x9can attorney\xe2\x80\x99s ethical duty to advance the interests of his client is limited by an equally\nsolemn duty to comply with the law and standards of professional conduct; it specifically\nensures that the client may not use false evidence.\xe2\x80\x9d\nWe further find no actual conflict of interest inherent in counsel\xe2\x80\x99s decision to enter into the\nstipulation to correct the record. It is clear that several methods, such as calling as a witness the\ninterpreter who was present when Attorney Keefe showed Anna the photo array, were available\nto accomplish this necessary task. Each of them, in order to correct the misstatement, would\nhave yielded the same result.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c20\n1. Could Keefe have relied on Rodriguez\xe2\x80\x99s testimony without violating his duty of candor to\nthe court? What if the prosecutor did not notice the mistake? Would Keefe have a duty to\ndisclose? Would it be a violation of the Model Rules if he did not disclose?\n2. What are Keefe\xe2\x80\x99s ethical obligations under the circumstances? How should he balance\nhis duty to Torres against his duty to the court?\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nDavid Luban & W. Bradley Wendel, Philosophical Legal Ethics: An Affectionate History,\n30 Geo. J.L. Ethics (2017).\nRobert W. Gordon, The Independence of Lawyers, 68 B.U. L. Rev. 1 (1988).\nRichard Wasserstrom, Lawyers as Professionals: Some Moral Issues, 5 Human Rights 1\n(1975).\nWilliam H. Simon, The Ideology of Advocacy: Procedural Justice and Professional\nEthics, 1978 Wis. L. Rev. 29 (1978).\nGerald J. Postema, Moral Responsibility in Professional Ethics, 55 N.Y.U. L. Rev. 63\n(1980).\nDeborah L. Rhode, Ethical Perspectives on Legal Practice, 37 Stan. L. Rev. 589 (1985).\nThomas L. Shaffer, On Being a Christian and a Lawyer: Law for the Innocent (1981).\nCharles Fried, The Lawyer as Friend: The Moral Foundations of the Lawyer-Client\nRelation, 85 Yale L.J. 1060 (1976).\nMonroe H. Freedman, Professional Responsibility of the Criminal Defense Lawyer: The\nThree Hardest Questions, 64 Mich. L. Rev. 1469 (1966).\nJudith Andre, Role Morality as a Complex Instance of Ordinary Morality, 28 Am. Phil. Q.\n73 (1991).\nMonroe H. Freedman, A Critique of Philosophizing About Lawyers\xe2\x80\x99 Ethics, 25 Geo. J.\nLegal Ethics 91 (2012).\nAlice Woolley, The Lawyer as Advisor and the Practice of the Rule of Law, 47 UBC L.\nRev. 743 (2014).\nRebecca Roiphe, The Decline of Professionalism, 29 Geo. J. Legal Ethics 649 (2016).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c21\n1.2: A Brief History of the American Legal Profession\nThe Profession before the 1908 Ethics Rules\nThe American legal profession was significantly unregulated for most of the eighteenth and\nnineteenth centuries. In fact, applying contemporary definitions in which a profession is selfregulating, it is not clear lawyers\xe2\x80\x99 work during this time was part of a unified legal profession at\nall. That\xe2\x80\x99s not to say lawyers did not play an important role in American society. Lawyers fulfilled\nnot just one, but two equally important roles: as advocates for their clients and agents of the\ncourt. Before the organized American legal profession with formal rules, this dual-role model of\nlawyering shaped how lawyers thought about their professional responsibilities and standards\nfor their conduct.\nMany lawyers\xe2\x80\x99 everyday work primarily concerned advocating for the private interests of clients.\nEighteenth and nineteenth century clients sought out lawyers for many of the same reasons\npeople obtain lawyers today, including settling disputes over personal property, navigating\ncommercial matters, and resolving all sorts of other conflicts between people. Although some of\nthe events leading people to seek lawyer\xe2\x80\x99s assistance may seem familiar, the social, economic,\nand political conditions of the nineteenth century meant even this familiar role was anything but\nroutine.\nThe time period between the American Revolution and the twentieth century was full of dramatic\nchanges in the law, the work of lawyering, and the legal profession. The law itself became more\nvoluminous and complex, beginning with post-Revolution efforts to create orderly state and\nfederal governments. Industrialization sped up and increased the scope of economic of\nLawrence Friedman\xe2\x80\x99s A History of American Law summarizes:\nWhat happened to American law in the nineteenth century, basically, was that it changed\ndramatically, fundamentally, to conform to the needs, wants, and pressures coming from\nthe vast increase in the numbers of consumers of law. It is dangerous to sum up long\nperiods and great movements in a sentence. But if colonial law had been, in the first\nplace, colonial, and in the second place, paternal, emphasizing community, order, and\nthe struggle against sin, then, gradually, a new set of attitudes developed, in which the\nprimary function of law was not suppression and uniformity, but economic growth and\nservices to its users.\nInstrumentalist theories about law combined with a rapidly changing industrial society\ncontributed to the idea that practicing judges, lawyers, and scholars could actively shape the\nworld they worked in. Often this was in response to their work for the private interests of clients,\nalthough records of conversations among lawyers show continued concern for and attention to\ntheir public responsibilities as well.\nQuestion:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c22\n\xe2\x97\x8f\n\nIs the dual-role model of lawyers\xe2\x80\x99 responsibilities useful for navigating professional\nethical dilemmas? Based on what you know about lawyers\xe2\x80\x99 work, try to think of at least\none scenario in which it would be helpful and one in which it might not be.\n\nAmerican Bar Association\xe2\x80\x99s Ethics Rules\nThe American Bar Association, founded in 1878, advanced its first attempt at a uniform\nstandard of conduct for lawyers in 1908. The Canons of Professional Ethics were intended to be\na general guide for lawyers, based on existing professional norms expressed in legal ethics\nscholarship and some state bar association literature. The ABA acknowledged the idealistic\nnature of the Canons, and did not intend for them to be enforceable. For an overview of the\nCanons, see the Preamble and the list of Canons, below, from the Final Committee Report on\n1908 ABA Ethics Rules.\nCanons of Ethics\nPreamble\nIn America, where the stability of Courts and of all departments of government rests upon the\napproval of the people, it is peculiarly essential that the system for establishing and dispensing\njustice be developed to a high point of efficiency and so maintained that the public shall have\nabsolute confidence in the integrity and impartiality of its administration. The future of the\nrepublic, to a great extent, depends upon our maintenance of justice pure and unsullied. It\ncannot be so maintained unless the conduct and the motives of the members of our profession\nare such as to merit the approval of all just men.\nThe Canons of Ethics\nNo code or set of rules can be framed, which will particularize all the duties of the lawyer in the\nvarying phases of litigation or in all the relations of professional life. The following canons of\nethics are adopted by the American Bar Association as a general guide, yet the enumeration of\nparticular duties should not be construed as a denial of the existence of others equally\nimperative, though not specifically mentioned:\n1. The Duty of the Lawyer to the Courts.\n2. The Selection of Judges\n3. Attempts to Exert Personal Influence on the Courts\n4. When Counsel for an Indigent Prisoner.\n5. The Defense or Prosecution of Those Accused of Crime.\n6. Adverse Influences and Conflicting Interests.\n7. Professional Colleagues and Conflicts of Opinion.\n8. Advising Upon the Merits of a Client\xe2\x80\x99s Cause.\n9. Negotiations with Opposite Party.\n10. Acquiring Interest in Litigation.\n11. Dealing with Trust Property.\n12. Fixing the Amount of the Fee.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c23\n13. Contingent Fees.\n14. Suing a Client for a Fee.\n15. How Far a Lawyer May Go in Supporting a Client\xe2\x80\x99s Cause.\n16. Restraining Clients from Improprieties.\n17. Ill Feeling and Personalities Between Advocates.\n18. Treatment of Witnesses and Litigants.\n19. Appearance of Lawyer as Witness for His Client.\n20. Newspaper Discussion of Pending Litigation.\n21. Punctuality and Expedition.\n22. Candor and Fairness.\n23. Attitude Toward Jury.\n24. Right of Lawyers to Control the Incidents of the Trial.\n25. Taking Technical Advantage of Opposite Counsel; Agreements with Him.\n26. Professional Advocacy Other Than Before Courts.\n27. Advertising, Direct or Indirect.\n28. Stirring Up Litigation, Directly or Through Agents.\n29. Upholding the Honor of the Profession.\n30. Justifiable and Unjustifiable Litigations.\n31. Responsibility for Litigation.\n32. The Lawyer\xe2\x80\x99s Duty in Its Last Analysis.\nQuestions:\n\xe2\x97\x8f Do you see evidence of dual-role model of lawyers\xe2\x80\x99 responsibilities in the Canons?\nWhere?\n\xe2\x97\x8f What does the adoption of the Canons tell us about the state of the profession in 1908?\n\xe2\x97\x8f\nAlthough the Canons were general statements of profession norms, they included some\nexplanatory content. For example, see Canons 4, 17, and 29.\nCanon 4 - When Counsel for an Indigent Prisoner. A lawyer assigned as counsel for an indigent\nprisoner ought not to ask to be excused for any trivial reason, and should always exert his best\nefforts in his behalf.\nCanon 17- Ill Feeling and Personalities Between Advocates. Clients, not lawyers, are the\nlitigants. Whatever may be the ill feeling existing between clients, it should not be allowed to\ninfluence counsel in their conduct and demeanor toward each other or toward suitors in the\ncase. All personalities between counsel should be scrupulously avoided. In the trial of a cause it\nis indecent to allude to the personal history or the personal peculiarities and idiosyncrasies of\ncounsel on the other side. Personal colloquies between counsel which cause delay and promote\nunseemly wrangling should also be carefully avoided.\nCanon 29 - Upholding the Honor of the Profession. Lawyers should expose without fear or favor\nbefore the proper tribunals corrupt or dishonest conduct in the profession, and should accept\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c24\nwithout hesitation employment against a member of the Bar who has wronged his client. The\ncounsel upon the trial of a cause in which perjury has been committed owe it to the profession\nand citing authorities. The lawyer should aid in guarding the Bar against admission to the\nprofession of candidates unfit or unqualified because deficient in either moral character or\neducation. He should strive at all times to uphold the honor and to maintain the dignity of the\nprofession and to improve not only the law but the administration of justice.\nQuestions:\n\xe2\x97\x8f Are the Canons useful for navigating professional ethical dilemmas?\n\xe2\x97\x8f How helpful is the explanatory content? Does it answer all your questions about how to\napply the Canons? Can you think of a situation in which lawyers might reasonably\ndisagree about what conforming professional conduct might look like?\nThe ABA Canons of Professional Ethics were an important step towards professionalizing\nlawyers\xe2\x80\x99 work. While no longer in force, the Canons guided lawyers\xe2\x80\x99 professional standards for a\nsixty year period in which the modern profession emerged. Judicial opinions and state bars\noften referred to the text of and principles in the Canons. Attempts to apply the Canons revealed\nsome challenges with moving from generalized principles to enforceable boundaries, prompting\nthe ABA to work towards the Model Code of Professional Responsibility.\nModel Code of Professional Responsibility\nThe ABA House of Delegates approved the Model Code of Professional Responsibility, a\ncomprehensively revised set of rules, on August 12, 1969. The Model Code marked a significant\nshift from the Canons in its organization and scope. Where the Canons were idealistic and\nrelied on external judgments to clarify conflicting priorities and refine broad goals, the Model\nCode contained three distinct but interrelated parts: canons, ethical considerations, and\ndisciplinary rules. The canons stated the general rules which led to the ethical considerations\nand disciplinary rules. The ethical considerations were the aspirational principles. The\ndisciplinary rules were mandatory statements about the minimum standards of conduct lawyers\nmust adhere to in order to not face disciplinary action. Each canon might contain a dozen (or\nmore!) ethical considerations and disciplinary rules.\nFor Example, explanatory content for Canon 6 includes six ethical considerations and\ntwo disciplinary rules.\nCANON 6: A Lawyer Should Represent a Client Competently\nETHICAL CONSIDERATIONS\nEC 6-1\nBecause of his vital role in the legal process, a lawyer should act with competence and proper\ncare in representing clients. He should strive to become and remain proficient in his practice\nand should accept employment only in matters which he\nis or intends to become competent to handle.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c25\n\nEC 6-2\nA lawyer is aided in attaining and maintaining his competence by keeping abreast of\ncurrent legal literature and developments, participating in continuing legal education programs,\nconcentrating in particular areas of the law, and by utilizing other available means. He has the\nadditional ethical obligation to assist in improving the legal profession, and he may do so by\nparticipating in bar activities intended to advance the quality and standards of members of the\nprofession. Of particular importance is the careful training of his younger associates and the\ngiving of sound guidance to all lawyers who consult him. In short, a lawyer should strive at all\nlevels to aid the legal profession in advancing the highest possible standards of integrity and\ncompetence and to meet those standards himself.\nEC 6-3\nWhile the licensing of a lawyer is evidence that he has met the standards then prevailing\nfor admission to the bar, a lawyer generally should not accept employment in any area of the\nlaw in which he is not qualified. However, he may accept such employment if in good faith he\nexpects to become qualified through study and investigation, as long as such preparation would\nnot result in unreasonable delay or expense to his client. Proper preparation and representation\nmay require the association by the lawyer of professionals in other disciplines. A lawyer offered\nemployment in a matter in which he is not and does not expect to become so qualified\nshould either decline the employment or, with the consent of his client, accept the employment\nand associate a lawyer who is competent in the matter.\nEC 6-4\nHaving undertaken representation, a lawyer should use proper care to safeguard the\nInterests of his client. If a lawyer has accepted employment in a matter beyond his competence\nbut in which he expected to become competent, he should diligently undertake the work and\nstudy necessary to qualify himself. In addition to being qualified to handle a particular matter, his\nobligation to his client requires him to prepare adequately for and give appropriate attention\nto his legal work.\nEC 6-5\nA lawyer should have pride in his professional endeavors. His obligation to act competently calls\nfor higher motivation than that arising from fear of civil liability or disciplinary penalty.\nEC 6-6\nA lawyer should not seek, by contract or other means, to limit his individual liability to\nhis client for his malpractice. A lawyer who handles the affairs of his client properly has no need\nto attempt to limit his liability for his professional activities and one who does not handle the\naffairs of his client properly should not be permitted to do so. A lawyer who is a stockholder in or\nis associated with a professional legal corporation may, however, limit his liability for malpractice\nof his associates in the corporation, but only to the extent permitted by law.\nDISCIPLINARY RULES\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c26\n\nDR 6-101-Failing to Act Competently.\nA. A lawyer shall not:\n1. Handle a legal matter which he knows or should know that he is not competent\nto handle, without associating with him a lawyer who is competent to handle it.\n2. Handle a legal matter without preparation adequate in the circumstances.\n3. Neglect a legal matter entrusted to him.\nDR 6-102-Limiting Liability to Client.\nA. A lawyer shall not attempt to exonerate himself from or limit his liability to his client for\nhis personal malpractice.\nQuestions:\n\xe2\x97\x8f How useful is the Model Code for making decisions about professional conduct? Is the\nclarification between canons, ethical considerations, and disciplinary rules an\nimprovement on the 1908 Canons?\n\xe2\x97\x8f Is it necessary to have canons, ethical considerations, and disciplinary rules? Consider\neach statement\xe2\x80\x99s or rule\xe2\x80\x99s usefulness in lawyers\xe2\x80\x99 various roles and practice settings.\nThe Model Code, in various forms and versions, was the ABA\xe2\x80\x99s central document on\nprofessional responsibility from 1970 through 1981. While no longer in use, it\xe2\x80\x99s important to\nknow about the Model Code. Many important cases decided during this time and some states\xe2\x80\x99\nrules still contain references to and evidence of the influence of the Model Code.\nModel Rules of Professional Conduct\nThe shift from idealistic Canons to boundary rules in the Model Code created the need for\nspecificity the Model Code did not always address. To deal with this challenge, the ABA tasked\na lawyer named Robert Kutak with chairing a commission to study the problem. The Kutak\nCommission focused on developing the minimum standards of conduct for lawyers into a series\nof black-letter rules. The resulting Model Rules, adopted in 1983, are the basis of the current\nModel Rules of Professional Conduct. The Model Rules have a regulatory structure, with a\nstatement of minimum conduct and explanatory comments. The official comments are similar to\nother regulatory comments, in that they might content information about the reasoning behind a\nrule or examples to guide application. Like other model rules, the Model Rules of Professional\nConduct are not themselves binding. They are designed to be examples a state may choose to\nadopt into law. For an example from the Model Rules, see the Rule 1:1 on Competence, below.\nRule 1.1: Competence\nA lawyer shall provide competent representation to a client. Competent representation\nrequires the legal knowledge, skill, thoroughness and preparation reasonably necessary\nfor the representation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c27\nComment:\nLegal Knowledge and Skill\n[1] In determining whether a lawyer employs the requisite knowledge and skill in a\nparticular matter, relevant factors include the relative complexity and specialized nature\nof the matter, the lawyer\'s general experience, the lawyer\'s training and experience in\nthe field in question, the preparation and study the lawyer is able to give the matter and\nwhether it is feasible to refer the matter to, or associate or consult with, a lawyer of\nestablished competence in the field in question. In many instances, the required\nproficiency is that of a general practitioner. Expertise in a particular field of law may be\nrequired in some circumstances.\n[2] A lawyer need not necessarily have special training or prior experience to handle\nlegal problems of a type with which the lawyer is unfamiliar. A newly admitted lawyer can\nbe as competent as a practitioner with long experience. Some important legal skills,\nsuch as the analysis of precedent, the evaluation of evidence and legal drafting, are\nrequired in all legal problems. Perhaps the most fundamental legal skill consists of\ndetermining what kind of legal problems a situation may involve, a skill that necessarily\ntranscends any particular specialized knowledge. A lawyer can provide adequate\nrepresentation in a wholly novel field through necessary study. Competent\nrepresentation can also be provided through the association of a lawyer of established\ncompetence in the field in question.\n[3] In an emergency a lawyer may give advice or assistance in a matter in which the\nlawyer does not have the skill ordinarily required where referral to or consultation or\nassociation with another lawyer would be impractical. Even in an emergency, however,\nassistance should be limited to that reasonably necessary in the circumstances, for illconsidered action under emergency conditions can jeopardize the client\'s interest.\n[4] A lawyer may accept representation where the requisite level of competence can be\nachieved by reasonable preparation. This applies as well to a lawyer who is appointed\nas counsel for an unrepresented person. See also Rule 6.2.\nThoroughness and Preparation\n[5] Competent handling of a particular matter includes inquiry into and analysis of the\nfactual and legal elements of the problem, and use of methods and procedures meeting\nthe standards of competent practitioners. It also includes adequate preparation. The\nrequired attention and preparation are determined in part by what is at stake; major\nlitigation and complex transactions ordinarily require more extensive treatment than\nmatters of lesser complexity and consequence. An agreement between the lawyer and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c28\nthe client regarding the scope of the representation may limit the matters for which the\nlawyer is responsible. See Rule 1.2(c).\nRetaining or Contracting With Other Lawyers\n[6] Before a lawyer retains or contracts with other lawyers outside the lawyer\xe2\x80\x99s own firm\nto provide or assist in the provision of legal services to a client, the lawyer should\nordinarily obtain informed consent from the client and must reasonably believe that the\nother lawyers\xe2\x80\x99 services will contribute to the competent and ethical representation of the\nclient. See also Rules 1.2 (allocation of authority), 1.4 (communication with client),\n1.5(e) (fee sharing), 1.6 (confidentiality), and 5.5(a) (unauthorized practice of law). The\nreasonableness of the decision to retain or contract with other lawyers outside the\nlawyer\xe2\x80\x99s own firm will depend upon the circumstances, including the education,\nexperience and reputation of the nonfirm lawyers; the nature of the services assigned to\nthe nonfirm lawyers; and the legal protections, professional conduct rules, and ethical\nenvironments of the jurisdictions in which the services will be performed, particularly\nrelating to confidential information.\n[7] When lawyers from more than one law firm are providing legal services to the client\non a particular matter, the lawyers ordinarily should consult with each other and the\nclient about the scope of their respective representations and the allocation of\nresponsibility among them. See Rule 1.2. When making allocations of responsibility in a\nmatter pending before a tribunal, lawyers and parties may have additional obligations\nthat are a matter of law beyond the scope of these Rules.\nMaintaining Competence\n[8] To maintain the requisite knowledge and skill, a lawyer should keep abreast of\nchanges in the law and its practice, including the benefits and risks associated with\nrelevant technology, engage in continuing study and education and comply with all\ncontinuing legal education requirements to which the lawyer is subject.\nAdoption of the Model Rules\nStates adopted the structure of the model rules fairly quickly. Today, almost all states\xe2\x80\x99\ndisciplinary rules follow the numbering system of the Model Rules. The content of state rules\nvaries, so it\xe2\x80\x99s important to follow the law of your jurisdiction. Since the Model Rules of\nProfessional Conduct have been so influential, lawyers can look to these Model Rules just like\nthey might look to other uniform laws or model acts.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c29\n\xe2\x97\x8f\n\n\xe2\x97\x8f\n\nIn Rule 1.1 above, do the comments change your understanding of the rule? How? Do\nyou have remaining questions about what the rule means or how it might work in\napplication?\nCompare the usefulness of the Model Rules to the Model Code and the Canons.\nConsider the regulatory structure of the Model Rules, the distinction between ideals and\nboundaries, and the content in the examples above.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c30\nSection 2: The Attorney-Client Relationship\n2.1: Creating an Attorney-Client Relationship\nThe rest of life pales in significance, I\'m looking for somebody with whom to dance. With whom\nto dance? With whom to dance? I\'m looking for somebody with whom to dance.13\nClients & \xe2\x80\x9cQuasi-Clients\xe2\x80\x9d\nIdeally, the formation of an attorney-client relationship involves formalities like an engagement\nletter, a retainer agreement, and the payment of attorney\xe2\x80\x99s fees. But none of those formalities\nare necessary. An attorney-client relationship may be formed whenever a person asks an\nattorney for legal advice and the attorney provides it, so long as a reasonable person could\nbelieve that an attorney-client relationship existed.\nI will refer to people an attorney intends to represent as \xe2\x80\x9cclients,\xe2\x80\x9d and people an attorney does\nnot intend to represent as \xe2\x80\x9cquasi-clients.\xe2\x80\x9d An attorney has an \xe2\x80\x9cexpress attorney-client\nrelationship\xe2\x80\x9d with clients and an \xe2\x80\x9cimplied attorney-client relationship\xe2\x80\x9d with quasi-clients. But\nexpress and implied attorney-client relationships impose many of the same duties on an\nattorney.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 14 (2000)\nA relationship of client and lawyer arises when:\n1. a person manifests to a lawyer the person\'s intent that the lawyer provide legal\nservices for the person; and either\na. the lawyer manifests to the person consent to do so; or\nb. the lawyer fails to manifest lack of consent to do so, and the lawyer\nknows or reasonably should know that the person reasonably relies on\nthe lawyer to provide the services; or\n2. a tribunal with power to do so appoints the lawyer to provide the services.\nThe Duties of an Attorney\nAttorneys owe certain legal duties to their clients and quasi-clients, whether they have an\nexpress attorney-client relationship or an implied attorney-client relationship. Those duties are\nreflected in the Model Rules of Professional Conduct.\n\xe2\x97\x8f\n\n13\n\nDuty of Care: Attorneys have a duty to act with due diligence in pursuit of their client\xe2\x80\x99s\ninterests. Model Rule 1.1.\n\nStephin Merritt, The Magnetic Fields, With Whom to Dance?, Get Lost (1995).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c31\n\xe2\x97\x8f\n\xe2\x97\x8f\n\n\xe2\x97\x8f\n\nDuty of Loyalty: Attorneys may not represent any party with an interest adverse to any\nof their clients, and must refrain from self-dealing. Model Rules 1.7 & 1.8.\nDuty of Impartiality: Attorneys must provide their clients with all of the information their\nclients need in order to make informed decisions. Model Rule 1.4. Attorneys must also\n\xe2\x80\x9cexercise independent professional judgment and render candid advice.\xe2\x80\x9d Model Rule\n2.1.\nDuty of Confidentiality: Attorneys must maintain in confidence all information obtained\nwhile representing their clients, and may not use any confidential client information in a\nway that could harm that client. Model Rule 1.6.\n\nTogstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980)\nSummary: John Togstad was paralyzed after surgery. His wife Joan Togstad met with\nattorney Jere Miller and asked him whether they had a viable medical malpractice\naction. Miller stated that he did not think his firm was interested, but he would consult\nwith his partners. He did not charge Togstad or agree to represent her. He also did not\ninform her that he lacked experience in the area, encourage her to consult with another\nattorney, or warn her about the statute of limitations on medical malpractice actions.\nAfter the statute of limitations expired, the Togstads filed a legal malpractice action. The\njury found that an attorney-client relationship existed and that Miller was negligent, and\nawarded damages to the Togstads. The Minnesota Supreme Court affirmed, holding that\nan attorney-client relationship existed because Miller provided legal advice and his\nadvice was negligent.\nThis is an appeal by the defendants from a judgment of the Hennepin County District Court\ninvolving an action for legal malpractice. The jury found that the defendant attorney Jerre Miller\nwas negligent and that, as a direct result of such negligence, plaintiff John Togstad sustained\ndamages in the amount of $610,500 and his wife, plaintiff Joan Togstad, in the amount of\n$39,000. Defendants (Miller and his law firm) appeal to this court from the denial of their motion\nfor judgment notwithstanding the verdict or, alternatively, for a new trial. We affirm.\nIn August 1971, John Togstad began to experience severe headaches and on August 16, 1971,\nwas admitted to Methodist Hospital where tests disclosed that the headaches were caused by a\nlarge aneurysm on the left internal carotid artery. The attending physician, Dr. Paul Blake, a\nneurological surgeon, treated the problem by applying a Selverstone clamp to the left common\ncarotid artery. The clamp was surgically implanted on August 27, 1971, in Togstad\'s neck to\nallow the gradual closure of the artery over a period of days.\nThe treatment was designed to eventually cut off the blood supply through the artery and thus\nrelieve the pressure on the aneurism, allowing the aneurism to heal. It was anticipated that other\narteries, as well as the brain\'s collateral or cross-arterial system would supply the required blood\nto the portion of the brain which would ordinarily have been provided by the left carotid artery.\nThe greatest risk associated with this procedure is that the patient may become paralyzed if the\nbrain does not receive an adequate flow of blood. In the event the supply of blood becomes so\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c32\nlow as to endanger the health of the patient, the adjustable clamp can be opened to establish\nthe proper blood circulation.\nIn the early morning hours of August 29, 1971, a nurse observed that Togstad was unable to\nspeak or move. At the time, the clamp was one-half (50%) closed. Upon discovering Togstad\'s\ncondition, the nurse called a resident physician, who did not adjust the clamp. Dr. Blake was\nalso immediately informed of Togstad\'s condition and arrived about an hour later, at which time\nhe opened the clamp. Togstad is now severely paralyzed in his right arm and leg, and is unable\nto speak.\nPlaintiffs\' expert, Dr. Ward Woods, testified that Togstad\'s paralysis and loss of speech was due\nto a lack of blood supply to his brain. Dr. Woods stated that the inadequate blood flow resulted\nfrom the clamp being 50% closed and that the negligence of Dr. Blake and the hospital\nprecluded the clamp\'s being opened in time to avoid permanent brain damage. Specifically, Dr.\nWoods claimed that Dr. Blake and the hospital were negligent for (1) failing to place the patient\nin the intensive care unit or to have a special nurse conduct certain neurological tests every\nhalf-hour; (2) failing to write adequate orders; (3) failing to open the clamp immediately upon\ndiscovering that the patient was unable to speak; and (4) the absence of personnel capable of\nopening the clamp.\nDr. Blake and defendants\' expert witness, Dr. Shelly Chou, testified that Togstad\'s condition\nwas caused by blood clots going up the carotid artery to the brain. They both alleged that the\nblood clots were not a result of the Selverstone clamp procedure. In addition, they stated that\nthe clamp must be about 90% closed before there will be a slowing of the blood supply through\nthe carotid artery to the brain. Thus, according to Drs. Blake and Chou, when the clamp is 50%\nclosed there is no effect on the blood flow to the brain.\nAbout 14 months after her husband\'s hospitalization began, plaintiff Joan Togstad met with\nattorney Jerre Miller regarding her husband\'s condition. Neither she nor her husband was\npersonally acquainted with Miller or his law firm prior to that time. John Togstad\'s former work\nsupervisor, Ted Bucholz, made the appointment and accompanied Mrs. Togstad to Miller\'s\noffice. Bucholz was present when Mrs. Togstad and Miller discussed the case.\nMrs. Togstad had become suspicious of the circumstances surrounding her husband\'s tragic\ncondition due to the conduct and statements of the hospital nurses shortly after the paralysis\noccurred. One nurse told Mrs. Togstad that she had checked Mr. Togstad at 2 a. m. and he was\nfine; that when she returned at 3 a. m., by mistake, to give him someone else\'s medication, he\nwas unable to move or speak; and that if she hadn\'t accidentally entered the room no one would\nhave discovered his condition until morning. Mrs. Togstad also noticed that the other nurses\nwere upset and crying, and that Mr. Togstad\'s condition was a topic of conversation.\nMrs. Togstad testified that she told Miller "everything that happened at the hospital," including\nthe nurses\' statements and conduct which had raised a question in her mind. She stated that\nshe "believed" she had told Miller "about the procedure and what was undertaken, what was\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c33\ndone, and what happened." She brought no records with her. Miller took notes and asked\nquestions during the meeting, which lasted 45 minutes to an hour. At its conclusion, according\nto Mrs. Togstad, Miller said that "he did not think we had a legal case, however, he was going to\ndiscuss this with his partner." She understood that if Miller changed his mind after talking to his\npartner, he would call her. Mrs. Togstad "gave it" a few days and, since she did not hear from\nMiller, decided "that they had come to the conclusion that there wasn\'t a case." No fee\narrangements were discussed, no medical authorizations were requested, nor was Mrs.\nTogstad billed for the interview.\nMrs. Togstad denied that Miller had told her his firm did not have expertise in the medical\nmalpractice field, urged her to see another attorney, or related to her that the statute of\nlimitations for medical malpractice actions was two years. She did not consult another attorney\nuntil one year after she talked to Miller. Mrs. Togstad indicated that she did not confer with\nanother attorney earlier because of her reliance on Miller\'s "legal advice" that they "did not have\na case."\nOn cross-examination, Mrs. Togstad was asked whether she went to Miller\'s office "to see if he\nwould take the case of her husband." She replied, "Well, I guess it was to go for legal advice,\nwhat to do, where shall we go from here? That is what we went for." Again in response to\ndefense counsel\'s questions, Mrs. Togstad testified as follows:\nQ And it was clear to you, was it not, that what was taking place was a preliminary\ndiscussion between a prospective client and lawyer as to whether or not they wanted to\nenter into an attorney-client relationship?\nA I am not sure how to answer that. It was for legal advice as to what to do.\nQ And Mr. Miller was discussing with you your problem and indicating whether he, as a\nlawyer, wished to take the case, isn\'t that true?\nA Yes.\nOn re-direct examination, Mrs. Togstad acknowledged that when she left Miller\'s office she\nunderstood that she had been given a "qualified, quality legal opinion that she and her husband\ndid not have a malpractice case."\nMiller\'s testimony was different in some respects from that of Mrs. Togstad. Like Mrs. Togstad,\nMiller testified that Mr. Bucholz arranged and was present at the meeting, which lasted about 45\nminutes. According to Miller, Mrs. Togstad described the hospital incident, including the conduct\nof the nurses. He asked her questions, to which she responded. Miller testified that "the only\nthing I told her after we had pretty much finished the conversation was that there was nothing\nrelated in her factual circumstances that told me that she had a case that our firm would be\ninterested in undertaking."\nMiller also claimed he related to Mrs. Togstad "that because of the grievous nature of the\ninjuries sustained by her husband, that this was only my opinion and she was encouraged to\nask another attorney if she wished for another opinion" and "she ought to do so promptly." He\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c34\ntestified that he informed Mrs. Togstad that his firm "was not engaged as experts" in the area of\nmedical malpractice, and that they associated with the Charles Hvass firm in cases of that\nnature. Miller stated that at the end of the conference he told Mrs. Togstad that he would consult\nwith Charles Hvass and if Hvass\'s opinion differed from his, Miller would so inform her. Miller\nrecollected that he called Hvass a "couple days" later and discussed the case with him. It was\nMiller\'s impression that Hvass thought there was no liability for malpractice in the case.\nConsequently, Miller did not communicate with Mrs. Togstad further.\nOn cross-examination, Miller testified as follows:\nQ Now, so there is no misunderstanding, and I am reading from your deposition, you\nunderstood that she was consulting with you as a lawyer, isn\'t that correct?\nA That\'s correct.\nQ That she was seeking legal advice from a professional attorney licensed to practice in\nthis state and in this community?\nA I think you and I did have another interpretation or use of the term "Advice." She was\nthere to see whether or not she had a case and whether the firm would accept it.\nQ We have two aspects; number one, your legal opinion concerning liability of a case for\nmalpractice; number two, whether there was or wasn\'t liability, whether you would accept\nit, your firm, two separate elements, right?\nA I would say so.\nQ Were you asked on page 6 in the deposition, folio 14, "And you understood that she\nwas seeking legal advice at the time that she was in your office, that is correct also, isn\'t\nit?" And did you give this answer, "I don\'t want to engage in semantics with you, but my\nimpression was that she and Mr. Bucholz were asking my opinion after having related\nthe incident that I referred to." The next question, "Your legal opinion?" Your answer,\n"Yes." Were those questions asked and were they given?\nMR. COLLINS: Objection to this, Your Honor. It is not impeachment.\nTHE COURT: Overruled.\nTHE WITNESS: Yes, I gave those answers. Certainly, she was seeking my opinion as\nan attorney in the sense of whether or not there was a case that the firm would be\ninterested in undertaking.\nKenneth Green, a Minneapolis attorney, was called as an expert by plaintiffs. He stated that in\nrendering legal advice regarding a claim of medical malpractice, the "minimum" an attorney\nshould do would be to request medical authorizations from the client, review the hospital\nrecords, and consult with an expert in the field. John McNulty, a Minneapolis attorney, and\nCharles Hvass testified as experts on behalf of the defendants. McNulty stated that when an\nattorney is consulted as to whether he will take a case, the lawyer\'s only responsibility in\nrefusing it is to so inform the party. He testified, however, that when a lawyer is asked his legal\nopinion on the merits of a medical malpractice claim, community standards require that the\nattorney check hospital records and consult with an expert before rendering his opinion.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c35\nHvass stated that he had no recollection of Miller\'s calling him in October 1972 relative to the\nTogstad matter. He testified that:\nA When a person comes in to me about a medical malpractice action, based upon what\nthe individual has told me, I have to make a decision as to whether or not there probably\nis or probably is not, based upon that information, medical malpractice. And if, in my\njudgment, based upon what the client has told me, there is not medical malpractice, I will\nso inform the client.\nHvass stated, however, that he would never render a "categorical" opinion. In addition, Hvass\nacknowledged that if he were consulted for a "legal opinion" regarding medical malpractice and\n14 months had expired since the incident in question, "ordinary care and diligence" would\nrequire him to inform the party of the two-year statute of limitations applicable to that type of\naction.\nThis case was submitted to the jury by way of a special verdict form. The jury found that Dr.\nBlake and the hospital were negligent and that Dr. Blake\'s negligence (but not the hospital\'s)\nwas a direct cause of the injuries sustained by John Togstad; that there was an attorney-client\ncontractual relationship between Mrs. Togstad and Miller; that Miller was negligent in rendering\nadvice regarding the possible claims of Mr. and Mrs. Togstad; that, but for Miller\'s negligence,\nplaintiffs would have been successful in the prosecution of a legal action against Dr. Blake; and\nthat neither Mr. nor Mrs. Togstad was negligent in pursuing their claims against Dr. Blake. The\njury awarded damages to Mr. Togstad of $610,500 and to Mrs. Togstad of $39,000.\nIn a legal malpractice action of the type involved here, four elements must be shown: (1) that an\nattorney-client relationship existed; (2) that defendant acted negligently or in breach of contract;\n(3) that such acts were the proximate cause of the plaintiffs\' damages; (4) that but for\ndefendant\'s conduct the plaintiffs would have been successful in the prosecution of their\nmedical malpractice claim.\nWe believe it is unnecessary to decide whether a tort or contract theory is preferable for\nresolving the attorney-client relationship question raised by this appeal. The tort and contract\nanalyses are very similar in a case such as the instant one, and we conclude that under either\ntheory the evidence shows that a lawyer-client relationship is present here. The thrust of Mrs.\nTogstad\'s testimony is that she went to Miller for legal advice, was told there wasn\'t a case, and\nrelied upon this advice in failing to pursue the claim for medical malpractice. In addition,\naccording to Mrs. Togstad, Miller did not qualify his legal opinion by urging her to seek advice\nfrom another attorney, nor did Miller inform her that he lacked expertise in the medical\nmalpractice area. Assuming this testimony is true, we believe a jury could properly find that Mrs.\nTogstad sought and received legal advice from Miller under circumstances which made it\nreasonably foreseeable to Miller that Mrs. Togstad would be injured if the advice were\nnegligently given. Thus, under either a tort or contract analysis, there is sufficient evidence in\nthe record to support the existence of an attorney-client relationship.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c36\nDefendants argue that even if an attorney-client relationship was established the evidence fails\nto show that Miller acted negligently in assessing the merits of the Togstads\' case. They appear\nto contend that, at most, Miller was guilty of an error in judgment which does not give rise to\nlegal malpractice. However, this case does not involve a mere error of judgment. The gist of\nplaintiffs\' claim is that Miller failed to perform the minimal research that an ordinarily prudent\nattorney would do before rendering legal advice in a case of this nature.\nThere is also sufficient evidence in the record establishing that, but for Miller\'s negligence,\nplaintiffs would have been successful in prosecuting their medical malpractice claim. Dr. Woods,\nin no uncertain terms, concluded that Mr. Togstad\'s injuries were caused by the medical\nmalpractice of Dr. Blake. Defendants\' expert testimony to the contrary was obviously not\nbelieved by the jury. Thus, the jury reasonably found that had plaintiff\'s medical malpractice\naction been properly brought, plaintiffs would have recovered.\nBased on the foregoing, we hold that the jury\'s findings are adequately supported by the record.\nAccordingly we uphold the trial court\'s denial of defendants\' motion for judgment\nnotwithstanding the jury verdict.\nQuestions:\n1. What was the basis for the Togstads\xe2\x80\x99 claim that Miller\xe2\x80\x99s actions formed an attorney-client\nrelationship? How did Miller respond?\n2. Why did the court hold that an attorney-client relationship existed between Miller and the\nTogstads? Do you think it was right?\n3. How should Miller have responded in order to avoid creating an attorney-client\nrelationship?\n4. Why did the court hold that Miller was liable for negligence? Do you think it was right?\n5. How should Miller have responded in order to avoid liability for negligence?\nRepresentation of an Organization\nWhen an attorney represents an entity, the attorney\xe2\x80\x99s client is the entity, not the entity\xe2\x80\x99s agents.\nIn other words, when an attorney represents a corporation, limited liability company,\npartnership, or unincorporated association, the attorney\xe2\x80\x99s client is the organization, not the\nemployees of the organization. Or to put it another way, the attorney has an attorney-client\nrelationship with the organization, but does not necessarily have an attorney-client relationship\nwith the employees of the organization. Specifically, the attorney has a duty to represent the\norganization, even when its interests diverge from the interests of its employees.\nHowever, an attorney representing an organization must ensure that the employees of the\norganization understand that the attorney only represents the organization, and not its\nemployees. In other words, the employees must understand that the organization\xe2\x80\x99s attorney is\nnot their attorney, and that the organization\xe2\x80\x99s attorney has professional duties only to the\norganization. This can be difficult to explain, especially when employees identify their interests\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c37\nwith those of the organization. But attorneys for organizations must clarify their legal relationship\nto the employees of those organizations, in order to avoid creating an attorney-client\nrelationship.\nModel Rule 1.13: Organization as Client\na. A lawyer employed or retained by an organization represents the organization acting\nthrough its duly authorized constituents.\nb. If a lawyer for an organization knows that an officer, employee or other person\nassociated with the organization is engaged in action, intends to act or refuses to act in a\nmatter related to the representation that is a violation of a legal obligation to the\norganization, or a violation of law that reasonably might be imputed to the organization,\nand that is likely to result in substantial injury to the organization, then the lawyer shall\nproceed as is reasonably necessary in the best interest of the organization. Unless the\nlawyer reasonably believes that it is not necessary in the best interest of the organization\nto do so, the lawyer shall refer the matter to higher authority in the organization,\nincluding, if warranted by the circumstances to the highest authority that can act on\nbehalf of the organization as determined by applicable law.\nc. Except as provided in paragraph (d), if\n1. despite the lawyer\'s efforts in accordance with paragraph (b) the highest authority\nthat can act on behalf of the organization insists upon or fails to address in a\ntimely and appropriate manner an action, or a refusal to act, that is clearly a\nviolation of law, and\n2. the lawyer reasonably believes that the violation is reasonably certain to result in\nsubstantial injury to the organization, then the lawyer may reveal information\nrelating to the representation whether or not Rule 1.6 permits such disclosure,\nbut only if and to the extent the lawyer reasonably believes necessary to prevent\nsubstantial injury to the organization.\nd. Paragraph (c) shall not apply with respect to information relating to a lawyer\'s\nrepresentation of an organization to investigate an alleged violation of law, or to defend\nthe organization or an officer, employee or other constituent associated with the\norganization against a claim arising out of an alleged violation of law.\ne. A lawyer who reasonably believes that he or she has been discharged because of the\nlawyer\'s actions taken pursuant to paragraphs (b) or (c), or who withdraws under\ncircumstances that require or permit the lawyer to take action under either of those\nparagraphs, shall proceed as the lawyer reasonably believes necessary to assure that\nthe organization\'s highest authority is informed of the lawyer\'s discharge or withdrawal.\nf. In dealing with an organization\'s directors, officers, employees, members, shareholders\nor other constituents, a lawyer shall explain the identity of the client when the lawyer\nknows or reasonably should know that the organization\'s interests are adverse to those\nof the constituents with whom the lawyer is dealing.\ng. A lawyer representing an organization may also represent any of its directors, officers,\nemployees, members, shareholders or other constituents, subject to the provisions of\nRule 1.7. If the organization\'s consent to the dual representation is required by Rule 1.7,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c38\nthe consent shall be given by an appropriate official of the organization other than the\nindividual who is to be represented, or by the shareholders.\nFerranti Intern. PLC v. Clark, 767 F. Supp. 670 (E.D. Pa. 1991)\nSummary: William Clark was general counsel of Ferranti and hired Hogan & Hartson to\nrepresent the company in relation to a federal investigation. Hogan & Hartson informed\nFerranti\xe2\x80\x99s employees that they should consider retaining an attorney. During the\ninvestigation, Clark provided confidential information to Hogan & Hartson. Eventually,\nFerranti filed an action against Clark for breach of fiduciary duty and legal malpractice.\nClark objected to Hogan & Hartson\xe2\x80\x99s representation of Ferranti. The court dismissed\nClark\xe2\x80\x99s objections, on the ground that he knew Hogan & Hartson never represented him\npersonally.\nLUDWIG, District Judge.\nPlaintiff sues for breach of fiduciary duty and professional malpractice and to rescind a $2.75\nmillion employee "settlement and release" agreement, which the complaint alleges was\nobtained by extortion. Defendant William A. Clark\'s motion to disqualify the firm of Hogan &\nHartson from representing plaintiff Ferranti International PLC in this action will be denied for the\nfollowing reasons:\nAn attorney-client relationship, express or implied, did not exist between Hogan & Hartson and\nWilliam A. Clark when he was Ferranti International, Inc.\'s vice president and general counsel.\nIn July, 1986 defendant Clark, himself an attorney, retained Hogan & Hartson to represent\nplaintiff Ferranti International plc and its subsidiaries in regard to a government investigation of\nalleged wrongdoing on the part of their employees. He did so in his capacity as Ferranti\nInternational, Inc.\'s vice president and general counsel. The need for representation was\ntriggered by a federal grand jury subpoena served on plaintiff\'s subsidiary, the Marquardt\nCompany. Thereafter, the investigation was widened with target letters and follow-up\nsubpoenas to corporate employees of plaintiff and plaintiff\'s other subsidiaries.\nHogan & Hartson did not represent the corporations\' employees. Hogan & Hartson attorneys\nrepeatedly stated to the corporations\' employees in defendant\'s presence that they should\nobtain separate counsel because of the potential conflict of interest between employer and\nemployee. Defendant helped arrange for employees to be separately represented.\nAny perception by defendant that he became a client or was a prospective client of Hogan &\nHartson as to his personal legal matters was unreasonable and without foundation. Defendant\'s\nposition as general counsel and corporate officer excluded this law firm from acting as his\npersonal attorney because of the self-evident interest conflict. Given the circumstances, the\npersonal matters discussed did not involve an attorney-client relationship.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c39\nThe information given Hogan & Hartson by defendant regarding plaintiff, its subsidiaries and\nemployees was communicated by him in his capacity as Ferranti International, Inc.\'s vice\npresident and general counsel. Proof of defendant\'s knowledge of such information does not\nappear to require that a Hogan & Hartson attorney testify as a witness.\nUntil shortly before the present disqualification motion was filed, February 28, 1991, defendant\'s\nsole objection to Hogan & Hartson\'s representation of plaintiff in this action involved the possible\ncalling of Hogan & Hartson attorneys as plaintiff\'s witnesses. That was first noted by defendant\'s\ncounsel as a potential problem in September, 1990. If either party intends to call a Hogan &\nHartson attorney as a witness, the court should be notified at least 60 days in advance of trial,\nand any issue thereby raised can be considered at that time.\nDefendant\'s status as an attorney has contradictory facets. He selected Hogan & Hartson to be\nplaintiff\'s counsel and subsequently worked with several of its attorneys in a confidential and\napparently close relationship on behalf of plaintiff, the parent of his then employer. Having done\nso and formed such associations, he may understandably resent and find objectionable the turn\nof events in which he is now being sued not only by the same law firm but also on behalf of the\nclient that he brought to that firm. However, these personal and business considerations do not\nnecessitate disqualification on legal-ethical grounds.\nThis is not a case in which a layperson might have perceived or reasonably misperceived that\nhis corporate employer\'s attorney was also representing him. As a general counsel, defendant\nmust have keenly appreciated the distinction between the corporation and its employees as well\nas the employees\' need for separate counsel. Defendant\'s assertion that the personal\ncomments and observations exchanged between him and Hogan & Hartson attorneys were in\ncontemplation of, or resulted in, a personal attorney-client relationship is factitious and\nunconvincing.\nAlthough it became a Hogan & Hartson client through defendant, plaintiff has a cognizable\ninterest in being permitted to continue to be represented by this firm. Moreover,\ndisqualification\xe2\x80\x94which is an increasingly frequent issue in the courts\xe2\x80\x94 may be the subject of\ntactical abuse. A party\'s choice of counsel should be set aside only where the circumstances\nlegally require doing so.\nUnder the Rules of Professional Conduct and the cases, there is no legal basis on which to\ndisqualify Hogan & Hartson. An evidentiary hearing is unnecessary.\nQuestions:\n1. Why did Clark object to Hogan & Hartson representing Ferranti in its action action\nagainst him? Why did the court dismiss Clark\xe2\x80\x99s objections?\n2. Clark was an attorney and general counsel for Ferranti. Would the court have reached\nthe same conclusion if Clark were not an attorney?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c40\n3. Should Ferranti be able to use confidential information provided to Hogan & Hartson by\nClark?\n4. What should Clark have done differently?\nProspective Clients\nPeople and organizations do not always choose to form an attorney-client relationship\nimmediately. Sometimes, they consider forming an attorney-client relationship with multiple\nattorneys or firms before choosing one.\nA \xe2\x80\x9cprospective client\xe2\x80\x9d is a person or organization that discusses the possibility of forming an\nattorney-client relationship with an attorney or firm. If an attorney or firm learns confidential\ninformation from a prospective client, the attorney or firm may be precluded from representing\nother parties in the same matter, if their interests are adverse to those of the prospective client.\nAccordingly, attorneys should try to prevent prospective clients from disclosing confidential\ninformation, in order to avoid disqualification from representing adverse parties. And attorneys\nmust determine whether potential clients have disclosed any confidential information, because it\ncreates a duty of confidentiality.\nModel Rule 1.18: Client-Lawyer Relationship\na. A person who consults with a lawyer about the possibility of forming a client-lawyer\nrelationship with respect to a matter is a prospective client.\nb. Even when no client-lawyer relationship ensues, a lawyer who has learned information\nfrom a prospective client shall not use or reveal that information, except as Rule 1.9\nwould permit with respect to information of a former client.\nc. A lawyer subject to paragraph (b) shall not represent a client with interests materially\nadverse to those of a prospective client in the same or a substantially related matter if\nthe lawyer received information from the prospective client that could be significantly\nharmful to that person in the matter, except as provided in paragraph (d). If a lawyer is\ndisqualified from representation under this paragraph, no lawyer in a firm with which that\nlawyer is associated may knowingly undertake or continue representation in such a\nmatter, except as provided in paragraph (d).\nd. When the lawyer has received disqualifying information as defined in paragraph (c),\nrepresentation is permissible if:\n1. both the affected client and the prospective client have given informed consent,\nconfirmed in writing, or:\n2. the lawyer who received the information took reasonable measures to avoid\nexposure to more disqualifying information than was reasonably necessary to\ndetermine whether to represent the prospective client; and\ni.\nthe disqualified lawyer is timely screened from any participation in the\nmatter and is apportioned no part of the fee therefrom; and\nii.\nwritten notice is promptly given to the prospective client.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c41\n\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 15 (2000)\n1. When a person discusses with a lawyer the possibility of their forming a clientlawyer relationship for a matter and no such relationship ensues, the lawyer\nmust:\na. not subsequently use or disclose confidential information learned in the\nconsultation, except to the extent permitted with respect to confidential\ninformation of a client or former client as stated in \xc2\xa7\xc2\xa7 61- 67;\nb. protect the person\'s property in the lawyer\'s custody as stated in \xc2\xa7\xc2\xa7 4446; and\nc. use reasonable care to the extent the lawyer provides the person legal\nservices.\n2. A lawyer subject to Subsection (1) may not represent a client whose interests are\nmaterially adverse to those of a former prospective client in the same or a\nsubstantially related matter when the lawyer or another lawyer whose\ndisqualification is imputed to the lawyer under \xc2\xa7\xc2\xa7 123 and 124 has received from\nthe prospective client confidential information that could be significantly harmful\nto the prospective client in the matter, except that such a representation is\npermissible if:\na. (i) any personally prohibited lawyer takes reasonable steps to avoid\nexposure to confidential information other than information appropriate to\ndetermine whether to represent the prospective client, and (ii) such\nlawyer is screened as stated in \xc2\xa7 124(2)(b) and (c); or\nb. both the affected client and the prospective client give informed consent\nto the representation under the limitations and conditions provided in \xc2\xa7\n122.\nClark Capital Management Group, Inc. v. Annuity Investors Life Ins. Co., 149 F.Supp.2d\n193 (E.D. Pa. 2001)\nSummary: Clark filed a trademark infringement action against Annuity. Clark was\nrepresented by Woodcock Washburn Kurtz Mackiewicz & Norris LLP and Annuity was\nrepresented by Donald E. Frechette of Edwards & Angell LLP. Frechette contacted\nThomas S. Biemer of Dilworth Paxson LLP as potential co-counsel. Frechette provided\ninformation about the action, and Biemer told Frechette that he would have to run a\nconflicts check. Frechette never formally retained Biemer. Eventually, Clark retained\nStephen L. Friedman of Dilworth, and Annuity objected, on the ground that it was a\nformer client of Dilworth in the same matter. The court held that Dilworth was not\ndisqualified from representing Clark, but required it to screen Biemer from the action.\nANITA B. BRODY, District Judge.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c42\nDefendant Annuity Investors Life Insurance Co. moves for the disqualification of Stephen L.\nFriedman and the firm Dilworth Paxson LLP as co-counsel for plaintiff Clark Capital\nManagement Group. Friedman has submitted an opposition to this motion. I will deny the motion\nfor disqualification.\nI. Factual Background\nOn April 14, 2000, Clark Capital filed a complaint against Annuity alleging trademark\ninfringement. Attorneys with the firm of Woodcock Washburn Kurtz Mackiewicz & Norris LLP\nhave represented Clark Capital from day one of this case. In the fall of 2000, Annuity retained\nDonald E. Frechette with the firm of Edwards & Angell LLP.\nActing on Annuity\'s behalf, in the Fall of 2000, Frechette contacted by telephone Thomas S.\nBiemer, a partner at Dilworth, to inquire into Biemer\'s interest and availability to be retained as\nco-counsel for Annuity in the present action. Frechette submitted two sworn affidavits describing\nthis communication. Frechette asserts in his first sworn affidavit that he spoke with Biemer by\ntelephone on three occasions. He states that they first spoke on October 26, 2000 for\napproximately ten minutes. Frechette asserts that, during this conversation, he discussed with\nBiemer "the background facts of this case, the capabilities of opposing counsel, Mr. Biemer\'s\nfirm\'s experience and familiarity with opposing counsel and the trial judge, the nature of\nAnnuity\'s defenses, the relative merits of each party\'s case, and potential weaknesses in\nplaintiff\'s case." Frechette further states that he described how the case had been handled to\ndate.\nAccording to Frechette, he again spoke with Biemer by telephone on November 6, 2000, for\napproximately ten to fifteen minutes. He states that, in this conversation, Frechette provided\nBiemer with additional information relating to specific aspects of the case and Annuity\'s view of\nthe strengths and weaknesses of these aspects. Frechette also recalls that they discussed one\nlegal theory that might be employed in Annuity\'s defense. Frechette asserts that he spoke with\nBiemer for a third time on November 6, 2000, for three to four minutes about a matter of\nprocedure and timing. Finally, Frechette asserts that he believed that any confidential\ninformation about the case, disclosed to Biemer during these several conversations, would be\nkept confidential.\nBiemer submitted a sworn affidavit in response to Frechette\'s affidavit. Biemer states that he\nrecalls the first two conversations described in Frechette\'s affidavit, but not the third\nconversation. Biemer agrees that the two attorneys discussed the nature of the case, plaintiff\'s\ncounsel, and the court. He asserts, however, that he has no recollection that any confidential\ninformation was disclosed by Frechette. Biemer recalls only that Frechette informed him that\nAnnuity was claiming the "usual affirmative defenses," which had already been pled and of\npublic record. Biemer states in his affidavit that he has no recollection of any discussion of\nAnnuity\'s perception of strengths and weaknesses in the case or of possible defense strategy.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c43\nOn June 12, 2001, when contacted by the court during a conference in this case in which\nAnnuity first raised an objection to Friedman\'s participation in the case, Biemer stated over the\ntelephone:\nI don\'t recall, specifically, discussing the merits of the case, other than that it involved\nsomething that was named Navigator, it was a trademark case. I don\'t remember\nspecifically discussing any affirmative defenses, but it\'s possible we did, I just don\'t\nrecall, it was a while ago.\nIn addition, Biemer\'s affidavit states that he told Frechette during the first conversation that,\nbefore Dilworth could agree to represent Annuity, he would have to run a conflict check. Biemer\navers that it was not until the second conversation that Frechette asked Biemer to run a conflict\ncheck, "if Dilworth was interested in serving as local counsel." Biemer also states that Frechette\nasked him to send Frechette any relevant information materials about Dilworth. Following the\nNovember 6, 2000 telephone conversation, Biemer had no further communications with\nFrechette about this case, and an offer of retention was never made.\nFrechette\'s second affidavit was submitted in response to Biemer\'s affidavit. In this affidavit,\nFrechette asserts that the issue of a conflict search was not discussed during the telephone\nconversations. He states that Biemer mentioned a conflict check for the first time in a letter\ndated November 7, 2000. Frechette further states:\nI certainly assumed that Attorney Biemer would not undertake a matter without\nperforming a conflict check and, accordingly, felt no need to specifically inquire as to the\nmatter further.\nAnnuity never retained Dilworth. On June 11, 2001, Friedman, a Dilworth attorney, entered an\nappearance on behalf of Clark Capital.\nII. Discussion\nAnnuity asserts that these several telephone conversations between Frechette and Biemer rose\nto the level of an attorney-client relationship between Annuity and Biemer, such that Friedman is\nin violation of the Rules of Professional Conduct. This District has adopted the Pennsylvania\nRules of Professional Conduct. These Rules provide that:\nA lawyer who has formerly represented a client in a matter shall not thereafter:\n(a) Represent another person in the same or substantially related matter in which that\nperson\'s interests are materially adverse to the interests of the former client unless the\nformer client consents after a full disclosure of the circumstances and consultation.\nRule of Professional Conduct 1.9.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c44\nThis prohibition disqualifies the lawyer\'s entire firm.\nWhile lawyers are associated in a firm, none of them shall knowingly represent a client when\nany one of them practicing alone would be prohibited from doing so. Annuity argues that,\nbecause Frechette\'s telephone conversations with Biemer rose to the level of an attorney-client\nrelationship, Annuity is a "former client" of Dilworth and, therefore, Friedman may not now\nrepresent the opposing party in this same matter.\nTo determine whether Friedman is in violation of these ethical rules, I must decide whether\nAnnuity is a "former client" of Dilworth. In other words, did there previously exist an attorneyclient relationship between Annuity and Dilworth. "An attorney-client relationship is one of\nagency and arises only when the parties have given their consent, either express or implied, to\nits formation." Both parties agree that no formal attorney-client relationship existed between\nAnnuity and Dilworth. "Where no express relationship exists, the intent to create an attorneyclient relationship can be implied from the conduct of the parties." The issue is whether an\nimplied attorney-client relationship arose during the course of the several telephone\nconversations between Frechette and Biemer. Annuity asserts that an implied attorney-client\nrelationship between Annuity and Biemer arose because, acting on Annuity\'s behalf, Frechette:\n(1) disclosed confidential information to Biemer, (2) with a reasonable belief that Biemer was\nacting in the capacity of attorney for Annuity throughout the course of the communication.\nBased on the facts presented, I find that the several brief telephone conversations between\nFrechette and Biemer did not give rise to an implied attorney-client relationship between Annuity\nand Dilworth. Frechette asserts in his first sworn affidavit that he disclosed to Biemer\nconfidential information related to Annuity\'s defenses and legal theories of the case. Biemer\nadmits that it is possible such disclosures were made. However, Biemer contends that he has\nno recollection of disclosure of any confidential information.\nSetting aside for the moment the question of whether confidential information was in fact\ndisclosed, it is clear from the facts presented that Frechette could not have held a reasonable\nbelief that Biemer was acting as an attorney for Annuity during the course of the communication.\nFrechette initiated the communication with Biemer to inquire into Biemer\'s interest and\navailability to be retained as co-counsel for Annuity in the present action. At no time during the\ncommunication did Frechette offer to retain Biemer as co-counsel and at no time during the\ncommunication did Biemer consent to representation of Annuity. To the contrary, it was evident\nfrom Frechette\'s request that Biemer send informational materials about the firm, that Frechette\nhad not yet decided whether to retain Biemer as co-counsel. Frechette was reserving the right\nto make a decision after learning more about the firm.\nFurthermore, it is evident that Frechette never conceived that Biemer was acting as Annuity\'s\nattorney during the communication, because Biemer had not yet run a conflict check. Frechette\ncontests Biemer\'s assertion that Biemer raised the need to run a conflict check before\nconsenting to representation during the telephone conversations. However, even if Biemer did\nnot raise the need to run a conflict check, Frechette, equally knowledgeable of the ethical rules,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c45\nwas well aware that Biemer would not consent to representation of Annuity before running a\nconflict check. Frechette explicitly stated in his second sworn affidavit:\nI certainly assumed that Attorney Biemer would not undertake a matter without\nperforming a conflict check and, accordingly, felt no need to specifically inquire as to the\nmatter further.\nWhen Frechette first contacted Biemer on October 26, 2000, the telephone conversation during\nwhich Frechette asserts that he first disclosed confidential information to Biemer, Frechette\ncould not have reasonably assumed that Biemer had already run a conflict check. By\nFrechette\'s own admission, therefore, it was unreasonable for Frechette to assume during that\nconversation that Biemer had consented to representation of Annuity. The duty to maintain\nconfidences does not arise absent an attorney-client relationship. It follows that Frechette\nunreasonably assumed that Biemer would maintain the confidentiality of any information\nFrechette disclosed, despite Frechette\'s awareness that no attorney-client relationship had been\nestablished. Annuity is not a former client of Biemer and neither Friedman nor Dilworth are in\nviolation of Pennsylvania Rule of Professional Conduct 1.9.\nI must still address the concern that confidential information about the case may have been\ndisclosed by Frechette, which potentially could be used to the detriment of Annuity if Friedman\nis permitted to serve as counsel to Clark Capital. "One of the inherent powers of the federal\ncourt is the admission and discipline of attorneys practicing before it." Therefore, when there is a\nrisk that the underlying litigation may be tainted by participation of counsel, the court has the\npower to fashion an appropriate remedy.\nIn the event that confidential information was disclosed, I find that disqualification of Dilworth is\nan inappropriate remedy under the facts of this case, but rather that screening Biemer from the\ncase will appropriately balance the interests of all parties. Biemer asserts that he has no\nrecollection that any confidential information was disclosed to him about this case. Therefore,\neven if he did receive confidential information about the case, Biemer is not capable of relaying\nanything of substance to other Dilworth attorneys. Biemer also asserts in his affidavit that he\nhas been screened from the matter from the moment Clark Capital contacted the firm. He\nstates:\nOn approximately June 7, 2001, I learned that Dilworth was contacted by Clark Capital\nand asked to enter its appearance as counsel for Clark Capital. When I learned this, I\nrelayed to one of the heads of Dilworth\'s litigation department, James Rogers, Esquire,\nthe substance of my conversations with Mr. Frechette as outlined in this Affidavit. While\nwe agreed that there was no conflict given the limited nature of these conversations, in\nan abundance of caution, it was decided that I would not be involved in any respect with\nthis case and would not have any contact regarding the substance of the case with\nanyone working on the case for Dilworth. With the exception of my participation in the\nConference Call before the Court on June 11, 2001 and the preparation of this Affidavit, I\nhave not had any involvement in this case. Friedman substantiated Biemer\'s assertion\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c46\non the record at the June 12, 2001 conference in this matter, stating that Biemer will\nhave nothing to do with this case and that Friedman has had no conversations with\nBiemer about the case other than to inform Friedman of the brief communication\nbetween Biemer and Frechette.\nI am not persuaded by Annuity\'s argument that disqualification of Dilworth is necessary to\nprotect against the "mere appearance of an impropriety" and to maintain the integrity of the legal\nprofession. While the ethical rules are designed, in part, to encourage attorney-client candor,\nattorneys that have already been retained in a matter and who are well versed in the perimeters\nof the attorney-client relationship, should be encouraged to take care with their client\'s\nconfidences in the course of preliminary inquiries with potential co-counsel in another firm. Such\ninquiries should not form the basis for disqualification of an entire firm in situations, such as this,\nwhere it was clear to both parties that an attorney-client relationship was never established.\nAllowing Friedman to be retained by Clark Capital in this matter requires effective screening of\nonly a single attorney out of approximately 100 attorneys at Dilworth. In light of this, the fact that\nAnnuity is not a former client of Dilworth, and the minimal likelihood that Dilworth\'s involvement\nin this case would taint the pending litigation, I will deny Annuity\'s motion to disqualify Friedman\nand Dilworth. I will require that Dilworth continue to screen Biemer from any involvement in this\ncase.\nQuestions:\n1. What was the basis for Annuity\xe2\x80\x99s objection to Dilworth\xe2\x80\x99s representation of Clark?\n2. If Frechette provided confidential information to Biemer, is screening him from the action\na sufficient remedy?\n3. Why shouldn\xe2\x80\x99t the court disqualify Dilworth from representing Clark in this action?\nFurther Reading:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c47\n2.2: Ending an Attorney-Client Relationship\nThis is the end, beautiful friend. This is the end, my only friend, the end.14\nTake Me Baby, or Leave Me: Ending the Attorney-Client Relationship\nHappy families are all alike; every unhappy family is unhappy in its own way.15\nIt is surprisingly easy to create an attorney-client relationship, and it can be surprisingly hard for\nan attorney to end one. In general, a client can end an attorney-client relationship at any time,\nfor any reason, or for no reason at all. But attorneys cannot end an attorney-client relationship\nwithout good reason. Sometimes, attorneys must end an attorney-client relationship, and other\ntimes the rules of professional conduct prevent attorneys from ending an attorney-client\nrelationship. In any case, attorneys may have duties to their clients that survive the attorneyclient relationship, especially the duty of confidentiality.\nSometimes, an attorney must end an attorney-client relationship. For example, an attorney\ncannot represent a client if the client fires the attorney, the attorney cannot effectively represent\nthe client, the attorney has a conflict of interest, or representation would violate the rules of\nprofessional conduct.\nUnder certain circumstances, attorneys may choose to end an attorney-client relationship. But\nthe ability of an attorney to end an attorney-client relationship is limited by the rules of\nprofessional conduct. Attorneys can end an attorney-client relationship only if they are permitted\nor required to end the relationship by the rules of professional conduct. They may be subject to\ndiscipline for ending an attorney-client relationship, even if it is permitted or required by the rules\nof professional conduct. And they may have duties to former clients that survive the attorneyclient relationship.\nBefore ending an attorney-client relationship, an attorney should determine whether good cause\nexists to end the relationship. If an attorney ends an attorney-client relationship without good\ncause, the attorney may be subject to discipline and liable to the client for malpractice or breach\nof fiduciary duty.\nModel Rule 1.16: Declining or Terminating Representation\na. Except as stated in paragraph (c), a lawyer shall not represent a client or, where\nrepresentation has commenced, shall withdraw from the representation of a client if:\n1. the representation will result in violation of the rules of professional conduct or\nother law;\n\n14\n15\n\nThe Doors, The End (1967).\nLeo Tolstoy, Anna Karenina (1878).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c48\n2. the lawyer\'s physical or mental condition materially impairs the lawyer\'s ability to\nrepresent the client; or\n3. the lawyer is discharged.\nb. Except as stated in paragraph (c), a lawyer may withdraw from representing a client if:\n1. withdrawal can be accomplished without material adverse effect on the interests\nof the client;\n2. the client persists in a course of action involving the lawyer\'s services that the\nlawyer reasonably believes is criminal or fraudulent;\n3. the client has used the lawyer\'s services to perpetrate a crime or fraud;\n4. the client insists upon taking action that the lawyer considers repugnant or with\nwhich the lawyer has a fundamental disagreement;\n5. the client fails substantially to fulfill an obligation to the lawyer regarding the\nlawyer\'s services and has been given reasonable warning that the lawyer will\nwithdraw unless the obligation is fulfilled;\n6. the representation will result in an unreasonable financial burden on the lawyer or\nhas been rendered unreasonably difficult by the client; or\n7. other good cause for withdrawal exists.\nc. A lawyer must comply with applicable law requiring notice to or permission of a tribunal\nwhen terminating a representation. When ordered to do so by a tribunal, a lawyer shall\ncontinue representation notwithstanding good cause for terminating the representation.\nd. Upon termination of representation, a lawyer shall take steps to the extent reasonably\npracticable to protect a client\'s interests, such as giving reasonable notice to the client,\nallowing time for employment of other counsel, surrendering papers and property to\nwhich the client is entitled and refunding any advance payment of fee or expense that\nhas not been earned or incurred. The lawyer may retain papers relating to the client to\nthe extent permitted by other law.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 31 (2000): Termination of a Lawyer\'s\nAuthority\n1. A lawyer must comply with applicable law requiring notice to or permission of a tribunal\nwhen terminating a representation and with an order of a tribunal requiring the\nrepresentation to continue.\n2. Subject to Subsection (1) and \xc2\xa7 33, a lawyer\'s actual authority to represent a client ends\nwhen:\na. the client discharges the lawyer;\nb. the client dies or, in the case of a corporation or similar organization, loses its\ncapacity to function as such;\nc. the lawyer withdraws;\nd. the lawyer dies or becomes physically or mentally incapable of providing\nrepresentation, is disbarred or suspended from practicing law, or is ordered by a\ntribunal to cease representing a client; or\ne. the representation ends as provided by contract or because the lawyer has\ncompleted the contemplated services.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c49\n3. A lawyer\'s apparent authority to act for a client with respect to another person ends\nwhen the other person knows or should know of facts from which it can be reasonably\ninferred that the lawyer lacks actual authority, including knowledge of any event\ndescribed in Subsection (2).\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 32 (2000): Discharge by a Client and\nWithdrawal by a Lawyer\n1. Subject to Subsection (5), a client may discharge a lawyer at any time.\n2. Subject to Subsection (5), a lawyer may not represent a client or, where representation\nhas commenced, must withdraw from the representation of a client if:\na. the representation will result in the lawyer\'s violating rules of professional conduct\nor other law;\nb. the lawyer\'s physical or mental condition materially impairs the lawyer\'s ability to\nrepresent the client; or\nc. the client discharges the lawyer.\n3. Subject to Subsections (4) and (5), a lawyer may withdraw from representing a client if:\na. withdrawal can be accomplished without material adverse effect on the interests\nof the client;\nb. the lawyer reasonably believes withdrawal is required in circumstances stated in\nSubsection (2);\nc. the client gives informed consent;\nd. the client persists in a course of action involving the lawyer\'s services that the\nlawyer reasonably believes is criminal, fraudulent, or in breach of the client\'s\nfiduciary duty;\ne. the lawyer reasonably believes the client has used or threatens to use the\nlawyer\'s services to perpetrate a crime or fraud;\nf. the client insists on taking action that the lawyer considers repugnant or\nimprudent;\ng. the client fails to fulfill a substantial financial or other obligation to the lawyer\nregarding the lawyer\'s services and the lawyer has given the client reasonable\nwarning that the lawyer will withdraw unless the client fulfills the obligation;\nh. the representation has been rendered unreasonably difficult by the client or by\nthe irreparable breakdown of the client-lawyer relationship; or\ni. other good cause for withdrawal exists.\n4. In the case of permissive withdrawal under Subsections (3)(f)-(i), a lawyer may not\nwithdraw if the harm that withdrawal would cause significantly exceeds the harm to the\nlawyer or others in not withdrawing.\n5. Notwithstanding Subsections (1)-(4), a lawyer must comply with applicable law requiring\nnotice to or permission of a tribunal when terminating a representation and with a valid\norder of a tribunal requiring the representation to continue.\nYou\xe2\x80\x99re Fired!: Discharge\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c50\nIt\'s a sad situation, I must say, when someone wants to leave as bad as you want them to\nstay.16\nI don\'t feel bad about letting you go, I just feel sad about letting you know.17\nTypically, clients can end the attorney-client relationship simply by firing their attorney. Under\nModel Rule 1.16(a)(3), \xe2\x80\x9ca lawyer shall not represent a client or . . . shall withdraw from the\nrepresentation of a client if . . . the lawyer is discharged.\xe2\x80\x9d And as Section 32(1) of the\nRestatement observes, \xe2\x80\x9ca client may discharge a lawyer at any time.\xe2\x80\x9d\nHowever, a client\xe2\x80\x99s ability to fire an attorney and end the attorney-client relationship is not\nabsolute. Under some circumstances, a court may prohibit a client from firing an attorney, and\norder the attorney to continue representing the client. For example, a client typically cannot fire\nan attorney immediately before trial, because it could enable clients to improperly delay the\nproceedings.\nCriminal defendants have a limited right to fire appointed counsel and receive alternative\ncounsel. Criminal defendants also have a limited right to fire appointed counsel and represent\nthemselves. Among other things, criminal defendant must express an \xe2\x80\x9cunequivocal\xe2\x80\x9d desire to\nrepresent themselves. In theory, this means that criminal defendants cannot fire appointed\ncounsel only because they believe appointed counsel is bad.\nWhen a client fires an attorney and hires a new attorney, the former attorney may have a claim\nagainst the former client. In a civil claim, the former attorney may recover the value of the\nservices rendered.\nDemov, Morris, Levine & Shein v. Glantz, 53 N.Y.2d 553 (N.Y. 1981)\nSummary: Respondent HGV Associates retained attorneys to retain possession of the\npremises of an amusement park to secure an advantageous condemnation award. HGV\nAssociates signed a retainer agreement which provided that appellants (individual\nattorneys and a law firm) would prepare an application for a stay of eviction permitting\nthe amusement park to reopen and would represent HVG in the condemnation\nproceeding. Appellants made clear they would not work unless they could also represent\nHGV in the condemnation proceeding. A representative of HGV fired appellant lawyers\nand law firm against the retainer agreement. Appellants argue fraud and breach of\nretainer agreement. The Appellate Division held the cause of action to be insufficient as\na matter of law. The court noted that a cause of action will not be cognizable in the\ncourts of this State when it is violative of strong public policy. The public policy of New\nYork permits a client to terminate the attorney-client relationship freely at any time. The\ncourt held that when an attorney-client relationship deteriorates to the point where the\n\n16\n17\n\nDolly Parton, When Someone Wants to Leave, Jolene (1974).\nBilly Bragg, A New England (1983).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c51\nclient loses faith in the attorney, the client should have the unbridled prerogative of\ntermination.\nWACHTLER, J.\nThe question on this appeal is whether an attorney may recover upon a cause of action against\na former client for fraudulently inducing the attorney to enter into a retainer agreement. The\nAppellate Division held the cause of action is insufficient as a matter of law and we agree.\nIn 1972, the City of New York condemned a parcel of land in Queens owned by respondent\nHGV Associates upon which an amusement park was operated by respondent MHG\nEnterprises, Inc. Between 1972 and 1976, respondents retained several attorneys to undertake\nefforts to retain possession of the premises and secure the most advantageous condemnation\naward. Respondents remained in possession until May 28, 1976, when a Federal court ordered\nthem to vacate the premises.\nIn June, 1976, respondent Glantz, the vice-president of MHG Enterprises, Inc., and a partner in\nHGV Associates, signed a retainer agreement which provided that appellants, individual\nattorneys, and a law firm, would prepare an application for a temporary stay of eviction\npermitting the amusement park to reopen and would represent respondents in the\ncondemnation proceeding. Appellants were to be paid a fixed sum if the application to reopen\nwas successful and their fee in the condemnation proceeding was dependent upon the amount\neventually awarded to respondents. Appellants testified that they made it clear to Glantz that\nthey would not work on the application to reopen unless they could also represent respondents\nin the condemnation proceeding. Glantz agreed to arrange to have appellants substituted as\nattorneys of record in the condemnation proceeding.\nAppellants submitted the application to restore respondents to possession of the amusement\npark, which was denied. Thereafter, appellants were informed by respondents\' attorney of\nrecord in the condemnation proceeding that Glantz had issued instructions not to forward the\nstipulation of substitution to appellants. Glantz then formally discharged appellants in writing and\nrequested a bill for services rendered.\nIn October, 1976 appellants commenced an action against respondents for fraud, breach of the\nretainer agreement, and the reasonable value of legal services rendered. The cause of action\nfor fraud was grounded upon the allegation that appellants were induced to enter the retainer\nagreement by respondents\' promise to permit them to litigate the condemnation proceeding.\nAppellants also alleged that from the outset, respondents never intended to substitute\nappellants as attorneys of record in the condemnation proceedings unless and until the\napplication to reopen was granted.\nThe trial court dismissed the claim for breach of contract, but upheld the cause of action for\nfraud. After trial a jury awarded appellants $34,000 as the reasonable value of their services and\n$310,000 as damages for fraud. The Appellate Division modified the judgment, on the law, by\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c52\ndismissing the cause of action sounding in fraud and otherwise affirmed the judgment insofar as\nis pertinent here.\nThe unique relationship between an attorney and client, founded in principle upon the elements\nof trust and confidence on the part of the client and of undivided loyalty and devotion on the part\nof the attorney, remains one of the most sensitive and confidential relationships in our society. A\nrelationship built upon a high degree of trust and confidence is obviously more susceptible to\ndestructive forces than are other less sensitive ones. It follows, then, that an attorney cannot\nrepresent a client effectively and to the full extent of his or her professional capability unless the\nclient maintains the utmost trust and confidence in the attorney.\nThis philosophy engendered the development of the rule, now well rooted in our jurisprudence,\nthat a client may at anytime, with or without cause, discharge an attorney in spite of a\nparticularized retainer agreement between the parties. Moreover, we have held that since the\nclient has the absolute right on public policy grounds to terminate the attorney-client relationship\nat any time without cause, it follows as a corollary that the client cannot be compelled to pay\ndamages for exercising a right which is an implied condition of the contract, and the attorney\ndischarged without cause is limited to recovering in quantum meruit the reasonable value of\nservices rendered. In Martin v. Camp, we stated that the rule "is well calculated to promote\npublic confidence in the members of an honorable profession whose relation to their clients is\npersonal and confidential".\nTo be sure, a deliberate misrepresentation of present intent made for the purpose of inducing\nanother to enter a contract will normally constitute actionable fraud if there is a reliance by the\nparty to whom the misrepresentation was made. It is equally well established, however, that a\ncause of action will not be cognizable in the courts of this State when it is violative of strong\npublic policy.\nThe public policy of New York which permits a client to terminate the attorney-client relationship\nfreely at any time, notwithstanding the existence of a particularized retainer agreement between\nthe parties, would be easily undermined if an attorney could hold a client liable for fraud on the\ntheory that the client misrepresented his or her true intent when the retainer was executed.\nWhen an attorney-client relationship deteriorates to the point where the client loses faith in the\nattorney, the client should have the unbridled prerogative of termination. Any result which\ninhibits the exercise of this essential right is patently unsupportable.\nAdditionally, as a matter of law, the element of reliance essential to a cause of action for\nfraudulent misrepresentation of present intent cannot be established in this case. Given the rule\nthat a client may discharge an attorney without cause at any time, it is evident that appellants\ncould not rely upon Glantz\'s promise to substitute them as attorneys of record in the\ncondemnation proceeding any more than they could rely upon continued representation in the\nevent they had actually been substituted. Thus, an essential element of a claim of fraudulent\nmisrepresentation is conspicuously absent.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c53\nAppellants argue that the result reached today enables unscrupulous clients to defraud their\nattorneys with impunity. We do not agree. We have said that "the law does not permit the client\nto cheat his attorney." Permitting an attorney improperly discharged to recover the reasonable\nvalue of services rendered in quantum meruit, a principle inherently designed to prevent unjust\nenrichment, strikes the delicate balance between the need to deter clients from taking undue\nadvantage of attorneys, on the one hand, and the public policy favoring the right of a client to\nterminate the attorney-client relationship without inhibition on the other.\nQuestions:\n1. If a client fires an attorney for actual or perceived incompetence, should the attorney be\nable to recover in quantum meruit?\n2. Many courts have held that a fired attorney may also recover a percentage of a\ncontingent fee. \xe2\x80\x9cThe outgoing attorney may elect to take compensation on the basis of a\npresently fixed dollar amount based upon quantum meruit for the reasonable value of\nservices or, in lieu thereof, the outgoing attorney has the right to elect a contingent\npercentage fee based on the proportionate share of the work performed on the whole\ncase.\xe2\x80\x9d Lai Ling Cheng v. Modansky, 73 N.Y.2d 454 (1989). Do you agree with this\nconclusion?\nWoke Up New: Permissive Withdrawal\nI wish there was something you would do or say, to try and make me change my mind and stay.\nBut we never did too much talking anyway. But don\'t think twice, it\'s all right.18\nYou can\'t open your mouth without telling a lie, but baby, you know how to say goodbye.19\nOn the morning when I woke up without you for the first time, I felt free and I felt lonely and I felt\nscared.20\nWhile it is easy for clients to end an attorney-client relationship, it can be harder for attorneys.\nModel Rule 1.16(b) identifies several circumstances under which an attorney may end an\nattorney-client relationship.\nOf course, attorneys can end attorney-client relationships at will, when it will not harm their\nclients. Model Rule 1.16(b)(1). But this exception is largely irrelevant, because clients typically\nabhor reluctant attorneys, and clients who suffer no harm rarely file malpractice actions. Clients\nwho can afford another attorney say good riddance, and clients who cannot are harmed.\nAttorneys can also end an attorney-client relationship if their client misbehaves. For example,\nattorneys can end an attorney-client relationship if their client uses their legal advice to break\n18\n\nBob Dylan, Don\xe2\x80\x99t Think Twice, It\xe2\x80\x99s Alright (1963).\nStephin Merritt, How to Say Goodbye, 69 Love Songs (1999).\n20\nThe Mountain Goats, Woke Up New, Get Lonely (2006).\n19\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c54\nthe law. Attorneys can also end an attorney-client relationship based on irreconcilable\ndifferences of opinion. And attorneys can end an attorney-client relationship if their client cannot\nor will not pay for representation, or for any other \xe2\x80\x9cgood reason.\xe2\x80\x9d Model Rule 1.16(b)(2-7).\nHowever, attorneys cannot simply end an attorney-client relationship and walk away. They must\nseek permission from the court, and cannot end an attorney-client relationship without the\ncourt\xe2\x80\x99s approval. If the court orders an attorney to continue representing a client, the attorney\nmust comply, even if the attorney has good cause to withdraw. Model Rule 1.16(c). Typically,\ncourts permit attorneys to withdraw only if they show that their client has retained other counsel\nor refuses representation. If the court permits withdrawal, the attorney must make a reasonable\neffort to protect the client\xe2\x80\x99s interests. Among other things, the attorney must provide reasonable\nnotice of withdrawal to the client, transfer documents and property to the client, and refund any\nunearned payments or fees. However, the attorney may retain documents relating to the client,\nto the extent permitted by law.\nIt\xe2\x80\x99s Not You, It\xe2\x80\x99s Me: Mandatory Withdrawal\nAre you out of love with me? Are you longing to be free? Do I drive you up a tree? Yeah! Oh,\nyeah! Do I drive you up the wall? Do you dread every phone call? Can you not stand me at all?\nYeah! Oh, yeah!21\nUnder certain circumstances, attorneys must end an attorney-client relationship. Model Rule\n1.16(a) provides that attorneys must withdraw if continued representation would cause a\nviolation of the rules of professional conduct or some other law, their physical or mental\ncondition materially impairs their ability to represent the client, or the client terminates\nrepresentation.\nObviously, attorneys cannot represent clients seeking legal advice in furtherance of a criminal\nenterprise. For example, attorneys cannot provide legal advice that enables a client to commit\nor perpetuate fraud. However, attorneys are not required to withdraw from representation simply\nbecause their client suggests an improper or illegal action. Model Rule 1.16, Comment 2. On\nthe contrary, they should counsel their client against such action, and withdraw only if their client\ninsists on proceeding.\nAttorneys also cannot represent a client if it would create a conflict of interest. If an attorney has\npreviously represented a client with interests adverse to those of a potential or current client, the\nattorney must decline or withdraw from representation, unless the client can and does provide\ninformed consent to representation. In some cases, a conflict of interest may preclude informed\nconsent.\nAttorneys must also withdraw from representation if their physical or mental state will materially\nimpair their ability to represent their client. Obviously, attorneys who incur serious physical or\n21\n\nStephin Merritt, The Magnetic Fields, Yeah! Oh Yeah!, 69 Love Songs (1999).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c55\nmental injuries may not be able to continue representing their clients. However, in some cases,\nthey may be subject to discipline.\nWhiting v. Lacara, 187 F. 3d 317 (2d Cir. 1999)\nSummary: Lacara appeals from two orders denying Lacara\xe2\x80\x99s motion to withdraw as\ncounsel for Whiting. Lacara asserted that appellee had failed to follow legal advice, was\nnot focused on his legal rights, and demanded publicity against legal advice. Whiting\nsaid he would not be opposed to a court order relieving counsel. Lacara asserts\npermissive withdrawal. The court noted there are some instances in which an attorney\nrepresenting a plaintiff in a civil case might have to withdraw even at the cost of\nsignificant interference with the trial court\'s management of its calendar. In reversing the\ndecision of the lower court, this court noted that Whiting intends to dictate how his action\nis to be pursued. Whiting did not believe Lacara was the correct attorney for him. Based\non the oral argument, the court determined Lacara\xe2\x80\x99s motion should be granted.\nGarrett R. Lacara appeals from two orders of Judge Spatt denying Lacara\'s motions to withdraw\nas counsel for plaintiff-appellee Joseph M. Whiting. Although the record before Judge Spatt\njustified denial of the motions, amplification of Whiting\'s position at oral argument persuades us\nto reverse.\nIn July 1996, appellee, a former police officer, filed a civil rights action against Nassau County,\nthe Incorporated Village of Old Brooksville, the Old Brooksville Police Department, other\nvillages, and various individual defendants. The action was based on the termination of his\nemployment as an officer. He sought $9,999,000 in damages.\nAppellee\'s initial counsel was Jeffrey T. Schwartz. In October 1996, Robert P. Biancavilla\nreplaced Schwartz. A jury was selected in October 1997 but was discharged when Biancavilla\nwithdrew from the case with appellee\'s consent.\nWhiting retained Lacara in December 1997. In June 1998, the district court partially granted\ndefendants\' summary judgment motion and dismissed plaintiff\'s due process claims. The court\nscheduled the remaining claims, one free speech claim and two equal protection claims, for a\njury trial on August 18, 1998. On July 20, 1998, the district court denied appellee\'s motion to\namend his complaint to add a breach of contract claim and another due process claim.\nOn August 6, 1998, Lacara moved to be relieved as counsel. In support, he offered an affidavit\nasserting that appellee "had failed to follow legal advice," that appellee "was not focused on his\nlegal rights," and that appellee "demanded publicity against legal advice." Lacara also asserted\nthat appellee had failed to keep adequate contact with his office, was "not sufficiently thinking\nclearly to be of assistance at the time of trial," and would "be of little or no help during trial."\nFurthermore, Lacara stated that appellee had "demanded that Lacara argue collateral issues\nwhich would not be allowed in evidence," demanded that Lacara continue to argue a due\nprocess claim already dismissed by the court, and drafted a Rule 68 Offer without Lacara\'s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c56\nconsent and demanded that he serve it on defendants. Finally, Lacara asserted that on July 30,\n1998, Whiting had entered his office and, without permission, had \xe2\x80\x9ccommenced to riffle Lacara\'s\n\xe2\x80\x98in box.\xe2\x80\x99\xe2\x80\x9d Lacara stated that he had to call 911 when Whiting had refused to leave the office.\nLacara offered to provide further information to the court in camera. Whiting\'s responsive\naffidavit essentially denied Lacara\'s allegations. Whiting stated that he would not be opposed to\nan order relieving counsel upon the condition that Lacara\'s firm refund the legal fees paid by\nWhiting.\nOn August 13, Judge Spatt denied Lacara\'s motion to withdraw as counsel. Judge Spatt\nsubsequently issued a written order giving the reasons for denying appellant\'s motion.\nOn August 13, 1998, Lacara filed a notice of appeal and moved for an emergency stay of the\ndistrict court\'s order and to be relieved as appellee\'s attorney. We granted Lacara\'s motion for\nan emergency stay pending appeal but denied his request for relief on the merits at that time. At\na status conference on September 23, 1998, the district court entertained another motion from\nLacara to withdraw as counsel, which Judge Spatt again denied. Lacara filed a timely appeal,\nwhich was consolidated with the earlier appeal.\nJudge Spatt denied Lacara\'s motion pursuant to Rule 1.4 of the Civil Rules of the United States\nDistrict Court for the Southern and Eastern Districts of New York, which provides that:\nan attorney who has appeared as attorney of record for a party may be relieved or\ndisplaced only by order of the court and may not withdraw from a case without leave of\nthe court granted by order. Such an order may be granted only upon a showing by\naffidavit or otherwise of satisfactory reasons for withdrawal or displacement and the\nposture of the case, including its position, if any, on the calendar.\nIn addressing motions to withdraw as counsel, district courts have typically considered whether\n\xe2\x80\x9cthe prosecution of the suit is likely to be disrupted by the withdrawal of counsel.\xe2\x80\x9d\nConsiderations of judicial economy weigh heavily in favor of our giving district judges wide\nlatitude in these situations, but there are some instances in which an attorney representing a\nplaintiff in a civil case might have to withdraw even at the cost of significant interference with the\ntrial court\'s management of its calendar. For example, the Code of Professional Responsibility\nmight mandate withdrawal where "the client is bringing the legal action merely for the purpose of\nharassing or maliciously injuring" the defendant. In such a situation, by denying a counsel\'s\nmotion to withdraw, even on the eve of trial, a court would be forcing an attorney to violate\nethical duties and possibly to be subject to sanctions.\nLacara does not claim that he faces mandatory withdrawal. Rather, he asserts three bases for\n"permissive withdrawal" under the Model Code: (i) Whiting "insists upon presenting a claim or\ndefense that is not warranted under existing law and cannot be supported by good faith\nargument for an extension, modification, or reversal of existing law"; (ii) Whiting\'s "conduct has\nrendered it unreasonably difficult for Lacara to carry out employment effectively"; and (iii)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c57\nWhiting has "deliberately disregarded an agreement or obligation to Lacara as to expenses or\nfees." Although the Model Code "was drafted solely for its use in disciplinary proceedings and\ncannot by itself serve as a basis for granting a motion to withdraw as counsel," we continue to\nbelieve that "the Model Code provides guidance for the court as to what constitutes \xe2\x80\x98good\ncause\' to grant leave to withdraw as counsel." However, a district court has wide latitude to deny\na counsel\'s motion to withdraw, as here, on the eve of trial, where the Model Code merely\npermits withdrawal.\nIn the instant matter, we would be prepared to affirm if the papers alone were our only guide.\nAlthough Lacara has alleged a nonpayment of certain disputed fees, he has not done so with\nsufficient particularity to satisfy us that withdrawal was justified on the eve of trial. Moreover,\nthere is nothing in the district court record to suggest error in that court\'s finding that "Whiting\nhas been very cooperative and desirous of assisting his attorney in this litigation." To be sure,\nwe are concerned by Lacara\'s allegation that appellee trespassed in his office and that\nappellant had to call 911 to get Whiting to leave. However, Whiting disputes Lacara\'s\ndescription of these events. Moreover, we strongly agree with the district court that, as the third\nattorney in this case, Lacara had ample notice that appellee was a difficult client.\nNevertheless, we reverse the denial of appellant\'s motion for withdrawal. Among Lacara\'s\nallegations are that Whiting insisted upon pressing claims already dismissed by the district court\nand calling witnesses Lacara deemed detrimental to his case. At oral argument, Whiting\nconfirmed Lacara\'s contention that Whiting intends to dictate how his action is to be pursued.\nWhiting was asked by a member of the panel:\nAre you under the impression that if we affirm Judge Spatt\'s ruling, you will be able to tell\nMr. Lacara to make the arguments you want made in this case? That, if Mr. Lacara says,\n"That witness doesn\'t support your case," and you don\'t agree with that, are you under\nthe impression that if we affirm Judge Spatt\'s ruling you\'ll be able to force him to call that\nwitness?\nTo which Whiting replied, "Yes I am."\nMoreover, in his statements at oral argument, Whiting made it clear that he was as interested in\nusing the litigation to make public his allegations of corruption within the Brookville police\ndepartment as in advancing his specific legal claims. For example, Whiting thought it relevant to\ninform us at oral argument that police officers in the department were guilty of "illegal drug use,\nacceptance of gratuities, and ongoing extramarital affairs while they were on duty." Appellee\nstated that he wanted to call an officer to testify that the officer could not "bring up anything\ncriminal about the lieutenant, the two lieutenants, or the chief, which could get them in trouble or\nmake the department look bad." Finally, Whiting made clear that he disagreed with Lacara\nabout the handling of his case partly because Whiting suspects that Lacara wants to cover up\ncorruption. Appellee stated: "For some strange reason, Mr. Lacara states that he doesn\'t want\nto put certain witnesses on the stand. The bottom line is he does not want to make waves and\nexpose all of the corruption that\'s going on within this community."\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c58\n\nAlso, at oral argument, appellee continued to bring up the already-dismissed due process\nclaims. He asserted: "They found me guilty of something which was investigated by their\ndepartment on two separate occasions and closed as unfounded on two separate occasions."\nWe thus have good reason to conclude that Whiting will insist that Lacara pursue the already\ndismissed claims at trial.\nFinally, appellee indicated that he might sue Lacara if not satisfied that Lacara provided\nrepresentation as Whiting dictated. After admitting that he did not consider Lacara to be the\n"right attorney" for him in this case, Whiting asserted that he deemed Lacara "ineffective." The\nfollowing exchange also occurred:\nQuestion from Panel: If you think that Mr. Lacara is ineffective in representing you as\nyou stand here now, doesn\'t Mr. Lacara face the prospect of a malpractice suit, by you,\nagainst him, if he continues in the case?\nAppellee\'s Reply: Yes, I believe he absolutely does.\nQuestion from Panel: Then, isn\'t that all the more reason to relieve him? So that what\nyou say is ineffective and is in effect a distortion of the attorney-client relationship,\ndoesn\'t continue?\nAppellee\'s Reply: I believe I do have grounds to sue Mr. Lacara for misrepresentation ....\nWe believe that appellee\'s desire both to dictate legal strategies to his counsel and to sue\ncounsel if those strategies are not followed places Lacara in so impossible a situation that he\nmust be permitted to withdraw.\nAttorneys have a duty to the court not to make "legal contentions unwarranted by existing law or\nby a nonfrivolous argument for the extension, modification, or reversal of existing law." We have\ndetermined that "an attorney who continues to represent a client despite the inherent conflict of\ninterest in his so doing due to possible Rule 11 sanctions risks an ethical violation." In this case,\nappellee\'s belief that he can dictate to Lacara how to handle his case and sue him if Lacara\ndeclines to follow those dictates leaves Lacara in a position amounting to a functional conflict of\ninterest. If required to continue to represent Whiting, Lacara will have to choose between\nexposure to a malpractice action or to potential Rule 11 or other sanctions. To be sure, such a\nmalpractice action would have no merit. However, we have no doubt it would be actively\npursued, and even frivolous malpractice claims can have substantial collateral consequences.\nAs previously noted, the interest of the district court in preventing counsel from withdrawing on\nthe eve of trial is substantial. Moreover, we would normally be loath to allow an attorney to\nwithdraw on the eve of trial when the attorney had as much notice as did Lacara that he was\ntaking on a difficult client. However, the functional conflict of interest developed at oral argument\ncauses us to conclude that the motion to withdraw should be granted.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c59\nWe therefore reverse and order the district court to grant appellant\'s motion to withdraw as\ncounsel. We note that Lacara agreed in this court to waive all outstanding fees and to turn over\nall pertinent files to Whiting.\nQuestions:\n1. Why did Lacara claim permissive withdrawal, rather than mandatory withdrawal?\n2. Why did the district court deny Lacara\xe2\x80\x99s motion to withdraw? Why did the circuit court\nreverse?\n3. How serious is the risk of Rule 11 sanctions? Is there a real conflict of interest?\n4. Will Whiting be able to retain new counsel? If not, will he have to proceed pro se?\nBoth Sides Now: Effective Withdrawal\nSometimes an attorney-client relationship doesn\xe2\x80\x99t really end, but just fades away. Often, an\nattorney represents a client in a matter and the client has no need for further representation. For\nexample, an attorney may represent a client in relation to a particular transaction or dispute, like\nthe purchase of a home or an automobile accident. Ideally, the attorney and client will have\nformed an agreement, specifying the scope of representation, in which case the attorney-client\nrelationship typically ends when the matter is concluded. But occasionally they may not, by\naccident or design. In that case, the attorney-client relationship still typically ends when the\nmatter is concluded, although it may be less certain. Restatement (Third) of the Law Governing\nLawyers \xc2\xa7 31(2)(e) (2000).\nIn other cases, an attorney may have a long-term relationship with a client that gradually peters\nout over time. In that case, it may be hard to know whether and when the attorney-client\nrelationship has ended. Worse, the attorney and client may disagree. An attorney may believe\nthe relationship continues, only to be surprised when the client returns bills unpaid. And a client\nmay believe the relationship continues, only to be surprised when the attorney ignores the\nclient\xe2\x80\x99s affairs.\nGenerally, an attorney-client relationship continues to exist so long as a reasonable client would\nbelieve that it continues to exist. If an attorney wants to end an attorney-client relationship, the\nattorney should explicitly inform the client in writing that it has ended, and return any documents\nor property that belongs to the client. But attorneys are often reluctant to end long-term attorneyclient relationships, in the hope that the client will eventually return and provide more business.\nIn that case, courts will ask whether a reasonable client would believe that an attorney-client\nrelationship continued to exist under the circumstances.\nForever & a Day: Duties After Withdrawal\nUnder Model Rule 1.16(d), an attorney who withdraws from representing a client has a duty to\nminimize any potential harm to the client. Among other things, the attorney must provide\nreasonable notice of withdrawal, return any documents or other property that belongs to the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c60\nclient, and refund any unearned fees or payments. However, some attorney work product may\nbelong to the attorney, and some states permit attorneys to retain the client\xe2\x80\x99s property until the\nclient pays any outstanding fees.\nHowever, the attorney also has a permanent duty of confidentiality to former clients.\nFurther Reading:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c61\n2.3: The Attorney as Agent\nThe attorney-client relationship is a principal-agent relationship. The client is the principal and\nthe attorney is the client\xe2\x80\x99s agent. But it is a unique form of principal-agent relationship, because\nthe client\xe2\x80\x99s ability to control the attorney\xe2\x80\x99s exercise of agency is limited, and because the\nattorney has duties not only to the client, but also to the court and the public.\nProfessional Relationships\nIn this respect, the attorney-client relationship resembles other professional relations. In the\ndoctor-patient relationship, patients decide whether to seek treatment, but doctors decide how\nto provide treatment. In the professor-student relationship, students decide whether to attend\nschool, but professors decide what to teach. And in the priest-penitent relationship, priests have\nduties not only to the penitent, but also to God.\nIn an attorney-client relationship, the client decides the objectives, but the attorney decides the\nmeans. The client decides how much authority to delegate to the attorney, and retains the right\nto make all major decisions, but cannot dictate all of the attorney\xe2\x80\x99s actions. The attorney is\nentitled and required to exercise independent judgment about how to achieve the client\xe2\x80\x99s goals.\nFor example, in a contract negotiation, the client is entitled to decide the key terms, but the\nattorney must decide how to achieve them. In civil litigation, the client is entitled to decide\nwhether to settle, but the attorney must decide whether to assert a particular claim or defense.\nAnd in criminal litigation, the client is entitled to decide whether to plead guilty, but the attorney\nmust decide which witnesses to call and how to conduct cross-examination.\nMoreover, in an attorney-client relationship, the attorney not only has a duty to protect the\ninterests of the client, but also has a duty to protect the interests of the court and the public. An\nattorney is an agent of both the client and the court. In theory, while attorneys must pursue the\ninterests of their clients, they also must not mislead the court, or allow their clients to lie to the\ncourt. Of course, in practice, this is often easier said than done.\nAttorneys as Agents\nAs agents of their clients, attorneys often have the authority to act on behalf of their clients, but\nit may take the form of express, implied, or apparent authority.\n\xe2\x97\x8f\n\n\xe2\x97\x8f\n\nExpress Authority: When an attorney acts pursuant to authority explicitly granted by\nthe client. For example, clients can grant express authority to an attorney in an\nengagement letter or later instructions.\nImplied Authority: When an attorney acts pursuant to authority necessarily granted by\nthe attorney-client relationship. For example, attorneys have implied authority to exercise\ndiscretion in implementing the instructions of their clients.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c62\n\xe2\x97\x8f\n\nApparent Authority: When an attorney acts pursuant to authority delegated by the\nclient and an opposing party relies on the delegation, especially when the authority is\nnormally reserved to the client. For example, if a client delegates the authority to\napprove a final settlement, and an opposing party relies on the delegation, the attorney\nmay have apparent authority, even though the decision to approve a final settlement is\nnormally reserved to the client.\n\nWhen attorneys act pursuant to express, implied, or apparent authority, their actions bind their\nclients. But when attorneys act without authority, their actions are ultra vires, and may not be\nbinding. Of course, when attorneys act without authority, they may also be liable for malpractice.\nAttorneys as Fiduciaries\nA friendship founded on business is better than a business founded on friendship.22\nThe attorney-client relationship is unusual because attorneys are fiduciaries of their clients. A\nfiduciary is a person who holds a legal duty of trust with another party, or \xe2\x80\x9cprincipal.\xe2\x80\x9d A fiduciary\nduty is the highest standard of care. As Cardozo famously explained, a fiduciary \xe2\x80\x9cis held to\nsomething stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an\nhonor the most sensitive, is then the standard of behavior.\xe2\x80\x9d Meinhard v. Salmon, 249 N.Y. 458\n(1928). Accordingly, fiduciaries must act only for the sole benefit and interest of the principal,\nand must put the interests of the principal above their own interests.\nAs fiduciaries, attorneys have a legal duty to act only in the interests of their clients, and to put\nthe interests of their clients above their own interests. Accordingly, attorneys may never form a\nrelationship that would create a conflict of interest with a current or former client, without the\nclient\xe2\x80\x99s informed consent.\nModel Rule 1.2: Scope of Representation & Allocation of Authority Between Client &\nLawyer\na. Subject to paragraphs (c) and (d), a lawyer shall abide by a client\'s decisions concerning\nthe objectives of representation and, as required by Rule 1.4, shall consult with the client\nas to the means by which they are to be pursued. A lawyer may take such action on\nbehalf of the client as is impliedly authorized to carry out the representation. A lawyer\nshall abide by a client\'s decision whether to settle a matter. In a criminal case, the lawyer\nshall abide by the client\'s decision, after consultation with the lawyer, as to a plea to be\nentered, whether to waive jury trial and whether the client will testify.\nb. A lawyer\'s representation of a client, including representation by appointment, does not\nconstitute an endorsement of the client\'s political, economic, social or moral views or\nactivities.\n\n22\n\nJohn D. Rockefeller.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c63\nc. A lawyer may limit the scope of the representation if the limitation is reasonable under\nthe circumstances and the client gives informed consent.\nd. A lawyer shall not counsel a client to engage, or assist a client, in conduct that the\nlawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences\nof any proposed course of conduct with a client and may counsel or assist a client to\nmake a good faith effort to determine the validity, scope, meaning or application of the\nlaw.\nRestatement (Third) of the Law Governing Lawyers, Introductory Note (2000)\nTraditionally, some lawyers considered that a client put affairs in the lawyer\'s hands, who then\nmanaged them as the lawyer thought would best advance the client\'s interests. So conducting\nthe relationship can subordinate the client to the lawyer. The lawyer might not fully understand\nthe client\'s best interests or might consciously or unconsciously pursue the lawyer\'s own\ninterests. An opposite view of the client-lawyer relationship treats the lawyer as a servant of the\nclient, who must do whatever the client wants limited only by the requirements of law. That view\nignores the interest of the lawyer and of society that a lawyer practice responsibly and\nindependently.\nA middle view is that the client defines the goals of the representation and the lawyer\nimplements them, but that each consults with the other. Except for certain matters reserved for\nclient or lawyer to decide, the scope of the lawyer\'s authority is itself one of the subjects for\nconsultation, with room for the client\'s wishes and the parties\' contracts to modify the\ntraditionally broad delegation of authority to the lawyer. This approach, accepted in this\nRestatement, permits a variety of allocations of authority.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 20 (2000)\n1. A lawyer must keep a client reasonably informed about the matter and must consult with\na client to a reasonable extent concerning decisions to be made by the lawyer under \xc2\xa7\xc2\xa7\n21- 23.\n2. A lawyer must promptly comply with a client\'s reasonable requests for information.\n3. A lawyer must notify a client of decisions to be made by the client under \xc2\xa7\xc2\xa7 21- 23 and\nmust explain a matter to the extent reasonably necessary to permit the client to make\ninformed decisions regarding the representation.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 21 (2000)\nAs between client and lawyer:\n1. A client and lawyer may agree which of them will make specified decisions, subject to\nthe requirements stated in \xc2\xa7\xc2\xa7 18, 19, 22, 23, and other provisions of this Restatement.\nThe agreement may be superseded by another valid agreement.\n2. A client may instruct a lawyer during the representation, subject to the requirements\nstated in \xc2\xa7\xc2\xa7 22, 23, and other provisions of this Restatement.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c64\n3. Subject to Subsections (1) and (2) a lawyer may take any lawful measure within the\nscope of representation that is reasonably calculated to advance a client\'s objectives as\ndefined by the client, consulting with the client as required by \xc2\xa7 20.\n4. A client may ratify an act of a lawyer that was not previously authorized.\nL.F.S. Corp. v. Kennedy, 337 S.E.2d 209 (S.C. 1985)\nSummary: Kennedy represented L.F.S. in an action against the Town of Kershaw.\nKennedy settled the action and L.F.S. accepted the settlement, but later objected to\nKennedy settling without its consent. The court held that L.F.S. ratified Kennedy\xe2\x80\x99s\nactions by accepting the settlement.\nGREGORY, Justice:\nIn this legal malpractice action, appellant L.F.S. Corporation appeals from the grant of\nrespondents\xe2\x80\x99 motion for non-suit. We affirm.\nAppellant raises numerous issues by twenty-four exceptions; however, we need only reach one\nissue which moots those remaining.\nL.F.S. began planning a subdivision called Havenwood in 1964. In the early 1970\'s, a dispute\narose with the Town of Kershaw concerning the town\'s obligation to supply water to the\nsubdivision under an alleged oral contract. Respondents were retained to represent the\nCorporation.\nThe gravamen of appellant\xe2\x80\x99s complaint is that respondents failed to follow instructions\nconcerning settlement negotiations, and permitted summary judgment to be entered based on\nan unauthorized agreement. Notwithstanding respondents\' alleged failure to follow instructions,\nthe record clearly demonstrates L.F.S. subsequently ratified respondents\xe2\x80\x99 actions.\nAfter entry of the disputed 1976 order, the town remitted $900.00 in tap fees to the Corporation\npursuant to the order. The check was accepted by the Corporation, and endorsed over to\nrespondents to be applied against legal fees owned by the Corporation. Thereafter, one of the\nCorporation\'s directors wrote a letter to respondents seeking advice concerning enforcement of\nthe order.\nThe events subsequent to the 1976 order clearly demonstrate L.F.S. ratified respondents\xe2\x80\x99\nactions concerning entry of the order. The Corporation accepted financial benefit under the\norder, and sought to take advantage of the order. Acceptance of both benefits are clear,\nunequivocal acts of ratification.\nQuestions:\n1. Did Kennedy have authority to agree to the settlement?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c65\n2. If not, why did the court affirm the settlement?\nMorris v. Ohio Cas. Ins. Co., 35 Ohio St. 3d 45 (Ohio 1988)\nSummary: James Whitney represented an estate insured by Ohio Casualty Insurance,\nwhich issued settlement checks to Whitney, payable to the estate. Someone\ntypographically endorsed the checks and deposited them in Whitney\xe2\x80\x99s office account.\nThe court held that the endorsements were invalid, because Whitney lacked any\nauthority to endorse the checks.\nDOUGLAS, J.\nThe sole question posed for our consideration is whether an insurance carrier may be liable for\nconversion when the carrier authorizes its bank to pay a draft over a forged endorsement. We\nanswer the question in the affirmative and, accordingly, uphold the decision of the court of\nappeals.\nInitially, appellant asks this court to find that its payment to James Whitney, the attorney for the\nestate and guardianship, constituted payment to the estate and guardianship. Accordingly,\nappellant would have us hold that appellant\'s obligation to the estate and guardianship was\ndischarged when appellant both delivered the drafts in question to the agent of the estate and\nthe guardianship, and then authorized payment of such drafts to the same party. We decline to\nmake such a finding in this case.\nIn essence, appellant asks this court to determine whether an attorney has the inherent power\nto endorse a settlement check on behalf of his client. If so, appellant would be discharged from\nits obligation to the estate and guardianship; if not, appellant\'s obligation remains unpaid and\nowing. We find both that an attorney has no inherent authority to endorse a settlement check in\nthe name of his client, and that, on the basis of the record before us, attorney Whitney made no\nsuch endorsement in this case.\nIn Ohio, as elsewhere, "an attorney who is without special authorization has no implied or\napparent authority, solely by virtue of his general retainer, to compromise and settle his client\'s\nclaim or cause of action." Similarly, an attorney has no inherent authority to enter into a contract\nfor the sale of real estate for his client. While this court has not previously addressed whether an\nattorney may endorse his client\'s name on a check or draft tendered to effect a settlement,\nnumerous other courts have done so. The clear majority of these courts find that no such\nauthority exists. Therefore, while we recognize that the decisions on this question are in conflict,\nwe believe that the better rule is that an attorney possesses no inherent authority, arising solely\nfrom the attorney-client relationship, to endorse his client\'s name on a settlement check or draft.\nThe authority to receive a negotiable instrument on behalf of a client does not imply the power\nto endorse it.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c66\nAccordingly, we hold that an attorney, absent any express authority from his client, has no\nauthority to endorse the client\'s name on a check or draft tendered to effect a settlement.\nFurther, contrary to appellant\xe2\x80\x99s contention that attorney Whitney properly endorsed and\ndeposited the drafts into his escrow account, the only admissible evidence in the record,\nWhitney\xe2\x80\x99s affidavit, reflects that Whitney endorsed neither draft and that the drafts were\ndeposited into one of Whitney\'s general office accounts. Further, even assuming that Whitney\nendorsed the drafts, an \xe2\x80\x9cunauthorized signature\xe2\x80\x9d includes both a forgery and a signature made\nby an agent exceeding his actual or apparent authority. Thus, given our finding that attorneys\nhave no inherent authority to endorse their client\xe2\x80\x99s name to a settlement draft, and the\nundisputed fact that there was no apparent or actual authority vested in Whitney to endorse the\ndrafts herein, Whitney\xe2\x80\x99s endorsements, had he made any, would be unauthorized and\nappellant\'s obligation to the estate and guardianship would remain in effect.\nThe endorsements at issue herein were typewritten and restrictive in character. While such\nendorsements may, at times, be valid, we find that the endorsements at issue herein were\nunauthorized and thus not valid to operate as the signature of either the administrator or the\nguardian, the payees thereon.\nAn \xe2\x80\x9c\xe2\x80\x98unauthorized\xe2\x80\x99 signature or indorsement is one made without actual, implied, or apparent\nauthority and includes a forgery.\xe2\x80\x9d Further, an "unauthorized signature is wholly inoperative as\nthat of the person whose name is signed unless he ratifies it or is precluded from denying it; but\nit operates as the signature of the unauthorized signer in favor of any person who in good faith\npays the instrument or takes it for value.\xe2\x80\x9d Thus, an unauthorized signature does not operate as\nthe signature of the named payee and, accordingly, may not act to pass title to an instrument or\nrelieve the drawer of his obligation to pay the payee.\nIn the instant case, appellees presented the sworn affidavits of attorney Whitney, Orin Morris\nand Tom Swope. These affidavits established that Whitney did not endorse the drafts at issue,\nand that Morris and Swope neither signed nor authorized anyone else to sign these drafts.\nFurther, Morris and Swope are the only parties who possessed the authority to authorize an\nagent to sign on their behalf. Moreover, appellant has failed, through the use of any admissible\nevidence, to refute the statements contained in the affidavits. Accordingly, the endorsements\nappearing on the second and third drafts, No. X559281 and No. X559280, were unauthorized\nand the payment of the drafts, as endorsed, constituted a conversion.\nAppellant authorized the payment of the drafts. Even though the appellant was the original\ndrawer, appellant was also the drawee for purposes of liability.\nWe, therefore, affirm the judgment of the court of appeals and remand the cause to the trial\ncourt for determination of the currently pending claims.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c67\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nWhy did the insurance company pay the checks?\nWhy did the court hold that payment was improper?\nWhat should the insurance company have done?\n\nMakins v. District of Columbia, 861 A. 2d 590 (D.C. 2004)\nSummary: John Harrison represented Brenda Makins in a discrimination action against\nthe District of Columbia. Harrison attended a settlement conference, reached an\nagreement, left the room to call Makins, and finalized the agreement when he returned.\nBut Makins later refused to sign the agreement, claiming that she had refused to settle\nwithout reinstatement. The District of Columbia tried to enforce the settlement\nagreement, but the court refused, holding that Harrison lacked apparent authority to\naccept the settlement offer.\nNEBEKER, Senior Judge:\nThe United States Court of Appeals for the District of Columbia Circuit has certified the following\nquestion to this court:\nUnder District of Columbia law, is a client bound by a settlement agreement negotiated\nby her attorney when the client has not given the attorney actual authority to settle the\ncase on those terms but has authorized the attorney to attend a settlement conference\nbefore a magistrate judge and to negotiate on her behalf and when the attorney leads\nthe opposing party to believe that the client has agreed to those terms.\nFor reasons set forth below, we answer the question in the negative. In so doing, we confine our\nanalysis to the undisputed facts and those recited in the certified question.\nIn November 1998, Brenda Makins, represented by John Harrison, Esquire, brought an action\nagainst the District of Columbia in the United States District Court for the District of Columbia\nclaiming sex discrimination and retaliatory firing. Makins had been employed in the District\'s\nDepartment of Corrections from 1995 until her discharge in 1997. Her complaint sought\nreinstatement, compensatory damages, and attorney\'s fees.\nIn the summer of 2000, at a pre-trial conference, the district judge referred Makins\' case to a\nmagistrate judge \xe2\x80\x9cfor settlement purposes only\xe2\x80\x9d and ordered the District to \xe2\x80\x9chave present at all\nsettlement meetings an individual with full settlement authority.\xe2\x80\x9d A similar admonition was\nabsent as to Ms. Makins. A few days later, the magistrate ordered the \xe2\x80\x9clead attorney(s) for the\nparties\xe2\x80\x9d to appear before him for a settlement conference; the order required that the \xe2\x80\x9cparties\nshall either attend the settlement conference or be available by telephone for the duration of the\nsettlement conference.\xe2\x80\x9d\nWhen the conference took place, Makins was not present. After two and a half hours of\nnegotiations, Harrison and the attorneys for the District reached an agreement. Makins would\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c68\nreceive $99,000 and have her personnel records amended from \xe2\x80\x9cdischarged\xe2\x80\x9d to \xe2\x80\x9cresigned\xe2\x80\x9d (to\npreserve her retirement benefits if she were able to obtain other creditable employment). In\nreturn, Makins would dismiss her claims against the District. Mr. Harrison left the hearing room\nwith cell phone in hand, apparently to call Ms. Makins. When he returned, the attorneys \xe2\x80\x9cshook\nhands\xe2\x80\x9d on the deal and later reduced it to writing. A few days later, when Harrison presented\nMakins with a copy for her signature, she refused to sign it. The District then filed a Motion to\nEnforce Settlement. Makins retained another attorney, and the court held an evidentiary hearing\nin which Harrison, Makins, and the lead attorney for the District testified.\nThe testimony of Makins and Harrison was at odds respecting whether Harrison had been given\nauthority to settle absent a provision for her reinstatement to her job. The District Court,\nobserving this \xe2\x80\x9csharp conflict\xe2\x80\x9d in testimony, declined to resolve it. Instead, the court assumed\narguendo that Harrison did not have actual authority to settle the case short of reinstatement.\nThe court granted the District\'s motion to enforce the settlement on the alternative ground that\nHarrison had apparent authority to bind Makins to the agreement. The court saw \xe2\x80\x9cno justification\nfor the District of Columbia not to reasonably believe that Mr. Harrison had the full confidence\nand authority of his client.\xe2\x80\x9d\nThere is arguably some inconsistency as to the extent of authority required of an attorney in\nsettlement negotiations. Indeed, a review of relevant case law and principles enunciated by the\nAmerican Bar Association and the American Law Institute demonstrate some differences not\nonly over the extent of authority, but also the appropriate definitions of authority. To the extent\nthat there tends to be this inconsistency among the cases, it reflects, in part, a difference in the\napplication or integration of agency law with legal ethics principles, the attorney-client\nrelationship and policy considerations.\nThis dissonance may in part be seen as a result of the intersection of ethical guidelines and\nrules governing the client-lawyer relationship and the relationship of a principal to her agent in\nthe context of settlement agreements. On the one hand, the District of Columbia Code of\nProfessional Responsibility Ethical Consideration 7-7 provides that it is the exclusive authority of\n\xe2\x80\x9cthe client to decide whether [s]he will accept a settlement offer." Similarly, District of Columbia\nRule of Professional Conduct 1.2(a) provides that a \xe2\x80\x9clawyer shall abide by a client\'s decision\nwhether to accept an offer of settlement of a matter.\xe2\x80\x9d On the other hand, \xe2\x80\x9cit is well established\nthat settlement agreements are entitled to enforcement under general principles of contract\nlaw.\xe2\x80\x9d Agency principles are applied to determine whether the attorney or agent had authority to\nbind his principal to the settlement contract. Of course, an attorney can settle his client\'s case if\nhe or she has actual authority to do so. Agency principles also recognize the authority of the\nagent to bind the client based on the doctrine of apparent authority.\nThe Restatement (Second) of Agency \xc2\xa7 8 defines apparent authority as \xe2\x80\x9cthe power to affect the\nlegal relations of another person by transactions with third persons, professedly as an agent for\nthe other, arising from and in accordance with the other\'s manifestations to such third persons.\xe2\x80\x9d\nThus, unlike actual authority, apparent authority does not depend upon any manifestation from\nthe principal to her agent, but rather from the principal to the third party. This court has stated\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c69\nthat apparent authority arises when a principal places an agent \xe2\x80\x9cin a position which causes a\nthird person to reasonably believe the principal had consented to the exercise of authority the\nagent purports to hold. This falls short of an overt, affirmative representation by a principal.\xe2\x80\x9d In\nsuch circumstances, an agent\'s representations need not expressly be authorized by his\nprincipal. The apparent authority of an agent arises when the principal places the agent in such\na position as to mislead third persons into believing that the agent is clothed with the authority\nwhich in fact he does not possess. Apparent authority depends upon \xe2\x80\x9cthe third-party\'s\nperception of the agent\'s authority.\xe2\x80\x9d The third party\'s perception may be based upon \xe2\x80\x9cwritten or\nspoken words or any other conduct of the principal which, reasonably interpreted, causes the\nthird person to believe that the principal consents to have the act done on her behalf by the\nperson purporting to act for her."\nWe reiterate that apparent authority is an established doctrine in this court\'s jurisprudence, and\nthat settlement agreements are enforceable under general contract principles. But because\napparent authority depends upon the principal\'s manifestations to the third party, the issue\nbefore us is what conduct by a client in the settlement context is sufficient reasonably to cause a\nthird person to believe that the attorney representing the client has full, final settlement\nauthority, rather than something short of that. Whether an agent had apparent authority is a\nquestion of fact and the party asserting the existence of apparent authority must prove it. In\ndetermining whether the agent had apparent authority to bind the principal, "consideration\nshould be given, inter alia, to the actual authority of the agent, the usual or normal conduct of\nthe agent in the performance of his or her duties, previous dealings between the agent and the\nparty asserting apparent authority, any declarations or representations allegedly made by the\nagent, and lastly, the customary practice of other agents similarly situated." We take as a given\nthat a third party in the shoes of the District of Columbia would reasonably assume that Makins\nhad authorized attorney Harrison (1) to attend the settlement conference, and (2) to negotiate\non her behalf; neither Makins nor amicus contends otherwise. We hold, however, that absent\nfurther manifestations by Makins \xe2\x80\x94 not Harrison \xe2\x80\x94 which are not contained in the certified\nquestion, there was insufficient conduct by the client to support a reasonable belief by the\nDistrict that Harrison had full and final authority to agree to the settlement terms.\nAs pointed out, in the District of Columbia the decision to settle belongs to the client, a fact\nconfirmed by our decisions.\nThe RESTATEMENT (THIRD) further confirms the generally accepted distinction between the\npower to conduct negotiations and the power to end the dispute. Conducting settlement\nnegotiations is properly in the attorney\'s domain: "in the absence of a contrary agreement or\ninstruction, a lawyer normally has authority to initiate or engage in settlement discussions,\nalthough not to conclude them." Concluding those settlement negotiations, however, is strictly\nthe client\'s prerogative: "the decision to settle is reserved to the client because a settlement\ndefinitively disposes of client rights."\nThese ethical principles are key to the issue before us, because they not only govern the\nattorney-client relationship, they inform the reasonable beliefs of any opposing party involved in\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c70\nlitigation in the District of Columbia, as well as the reasonable beliefs of the opposing party\'s\ncounsel, whose practice is itself subject to those ethical constraints. It is the knowledge of these\nethical precepts that makes it unreasonable for the opposing party and its counsel to believe\nthat, absent some further client manifestation, the client has delegated final settlement authority\nas a necessary condition of giving the attorney authority to conduct negotiations. And it is for\nthis reason that opposing parties \xe2\x80\x94 especially when represented by counsel, as here \xe2\x80\x94 must\nbear the risk of unreasonable expectations about an attorney\'s ability to settle a case on the\nclient\'s behalf. \xe2\x80\x9cWhen a lawyer purports to enter a settlement binding on the client but lacks\nauthority to do so, the burden of inconvenience resulting if the client repudiates the\nunauthorized settlement is properly left with the opposing party, who should know that\nsettlements are normally subject to approval by the client and who has received no manifested\ncontrary indication from the client.\xe2\x80\x9d\nApplying these principles, we conclude that the two client manifestations contained in the\ncertified question \xe2\x80\x94 sending the attorney to the court-ordered settlement conference and\npermitting the attorney to negotiate on the client\'s behalf \xe2\x80\x94 were insufficient to permit a\nreasonable belief by the District that Harrison had been delegated authority to conclude the\nsettlement. Some additional manifestation by Makins was necessary to establish that she had\ngiven her attorney final settlement authority, a power that goes beyond the authority an attorney\nis generally understood to have. The District, in its briefs, points only to actions and\nrepresentation of record by Harrison, not Makins, as support for the reasonableness of its belief.\nThus, it asserts that \xe2\x80\x9cMr. Harrison represented that Ms. Makins was available by telephone and\nthat he would consult with her when appropriate\xe2\x80\x9d; that \xe2\x80\x9cMr. Harrison spoke on his cell phone\nwith plaintiff at least three times during the conference\xe2\x80\x9d; and that \xe2\x80\x9cat one point, Mr. Harrison left\nthe room to phone plaintiff about the defendant\'s latest settlement proposal, and returned,\nphone in hand, to accept the proposal with one new condition regarding amendment of\npersonnel forms.\xe2\x80\x9d All of this information (including information purportedly about the client,\nMakins) was known to the District of Columbia only through representations made by Harrison,\nthe attorney. As the Circuit Court stated in certifying the question to us: \xe2\x80\x9cNeither the District nor\nthe magistrate ever heard from Makins, in person or by telephone. What the District derives\nfrom the telephone calls between Makins and Harrison amounts to nothing more than Harrison\'s\nrepresentations of \xe2\x80\x94 and the District\'s educated guesses about \xe2\x80\x94 what was said in private\nbetween them, a disputed factual question the district court did not resolve.\xe2\x80\x9d Harrison\'s conduct\nand representations about his own authority, in short, are not dispositive to whether Makins\nherself furnished the basis for a reasonable belief that he was authorized to conclude the\nsettlement.\nAt the en banc argument, counsel for the District characterized the record as showing that\nMakins \xe2\x80\x9csent\xe2\x80\x9d Harrison to the settlement conference, thus manifesting to the court and the\nDistrict his apparent authority to settle her claim. But Makins had little choice, short of\ndischarging Harrison, except to allow him to continue to represent her in the negotiations at the\nordered conference. To execute a settlement agreement then and there is quite another matter.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c71\nSince Ms. Makins, as principal, did not make any manifestation of authority to the District\'s\nattorneys, other than retaining Harrison, under the facts as certified in the question, a finding of\napparent authority is precluded under the law of this jurisdiction. The District also presents\nseveral policy arguments supporting enforcement of settlement agreements on apparent\nauthority grounds, none of which we find compelling. To be sure, settlement of disputes, both in\ntrial courts and on appeal, is to be encouraged as sound public policy. However, we are not\npersuaded that the settlement process will be impeded simply by requiring some manifestation\nof the client\'s authorization to support a claim of apparent authority in these cases where the\nclient challenges the authority of his attorney to settle the claim. In addition, \xe2\x80\x9capparent authority\nis an equitable doctrine that places the loss on one whose manifestations to another have\nmisled the latter." Our holding is consistent with this principle. Since Makins manifested nothing\nby words or conduct on which reliance could be placed (she merely continued to retain\nHarrison), our answer to the certified question is not erosive to that policy.\nWe answer the certified question in the negative.\nQuestion:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nWhat kind of authority did the District of Columbia claim the attorney had? Why was it\ninsufficient?\nWhat if Makins actually agreed to the settlement, but then had second thoughts\nWhat is the purpose of \xe2\x80\x9capparent authority\xe2\x80\x9d? Under the standard adopted by the court, is\nit possible for an attorney to exercise apparent authority?\n\nFurther Reading:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c72\n2.4: Client as Principal\nI planned each charted course, each careful step along the byway. And more, much more than\nthis, I did it my way.23\nDecisions Reserved to Clients\nAs the principal, the client has the sole authority to make certain important decisions about their\nlegal representation. Model Rule 1.2(a) provides that an attorney must respect a client\xe2\x80\x99s\ndecisions about the goals of representation and consult with the client about the means of\nachieving those goals. It also identifies particular decisions that are reserved to the client,\nspecifically the decision whether to settle in a civil case, and the decisions how to plead,\nwhether to waive jury trial, and whether to testify in a criminal case.\nHowever, attorneys retain considerable discretion to make decisions about how to pursue\nrepresentation, so long as those decisions are consistent with the client\xe2\x80\x99s decisions, and\nimplicitly authorized by the client as necessary to representation. In other words, the client is\nentitled to specify the goals of representation, but not to control the attorney\xe2\x80\x99s every decision in\npursuit of those goals.\nRule 1.2: Scope of Representation & Allocation of Authority Between Client & Lawyer\na. A lawyer shall abide by a client\xe2\x80\x99s decisions concerning the objectives of representation\nand shall consult with the client as to the means by which they are to be pursued. A\nlawyer may take such action on behalf of the client as is impliedly authorized to carry out\nthe representation. A lawyer shall abide by a client\'s decision whether to settle a matter.\nIn a criminal case, the lawyer shall abide by the client\'s decision, after consultation with\nthe lawyer, as to a plea to be entered, whether to waive jury trial and whether the client\nwill testify.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 22 (2000)\n1. As between client and lawyer, subject to Subsection (2) and \xc2\xa7 23, the following and\ncomparable decisions are reserved to the client except when the client has validly\nauthorized the lawyer to make the particular decision: whether and on what terms to\nsettle a claim; how a criminal defendant should plead; whether a criminal defendant\nshould waive jury trial; whether a criminal defendant should testify; and whether to\nappeal in a civil proceeding or criminal prosecution.\n2. A client may not validly authorize a lawyer to make the decisions described in\nSubsection (1) when other law (such as criminal-procedure rules governing pleas, jurytrial waiver, and defendant testimony) requires the client\'s personal participation or\napproval.\n23\n\nPaul Anka, My Way (1967).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c73\n3. Regardless of any contrary contract with a lawyer, a client may revoke a lawyer\'s\nauthority to make the decisions described in Subsection (1).\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 23 (2000)\nAs between client and lawyer, a lawyer retains authority that may not be overridden by a\ncontract with or an instruction from the client:\n1. to refuse to perform, counsel, or assist future or ongoing acts in the representation that\nthe lawyer reasonably believes to be unlawful;\n2. to make decisions or take actions in the representation that the lawyer reasonably\nbelieves to be required by law or an order of a tribunal.\nBronson v. Borst, 404 A. 2d 960 (D.C. App. 1979)\nSummary: Bronson hired Borst to be his attorney to help him recover money from a car\naccident. Borst negotiated a $6,000 settlement, but Bronson clearly told him not to\naccept it. After multiple failed attempts at communication, including a letter suggesting\nthat Bronson find a new attorney if he does not accept the settlement, Borst accepted\nthe settlement a day before the statute of limitations ran without Bronson\xe2\x80\x99s permission.\nThe Superior Court enforced the settlement through a declaratory judgment, agreeing\nwith Borst\xe2\x80\x99s reasoning that if he did not accept the settlement Bronson would have lost\nall chance of recovery, and accepting the settlement was a reasonable and justified step\nin representing his client well. The Appellate Court reversed, stating that regardless of\nthe good faith of the attorney, absent specific authority, an attorney cannot accept a\nsettlement offer on behalf of a client, and a client is not bound by settlements accepted\nwithout his express consent.\nKELLY, Associate Judge:\nEugene C. Bronson here appeals from an adverse decision in a declaratory judgment action\nfiled against him to enforce a settlement agreement and for the payment of attorney\'s fees and\ncosts, arguing that the trial court erred in holding that an attorney does not need specific\nauthority to accept a settlement on behalf of his client. We reverse.\nI\nThe material facts are largely undisputed. On May 1, 1972, appellant\xe2\x80\x99s automobile was struck\nby an automobile owned by Mattos, Inc. In order to pursue a claim for personal injuries caused\nby the accident, appellant retained appellee Borst under a general retainer agreement which\nprovided only for the usual contingency basis of payment, i.e., Borst was to receive one-third of\nany judgment recovered.\nBorst was able to negotiate a $6,000 settlement of appellant\'s claim with Mattos\xe2\x80\x99 insurer, but\nwhen he informed appellant of the proposed agreement, appellant made it clear to Borst that he\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c74\nwould not accept the offer of settlement. From then on relations between Borst and his client\nbecame strained. Bronson, who at the time resided outside the District, failed to respond to\nBorst\xe2\x80\x99s communications, which included a letter in which Borst suggested that if Bronson was\nunable to accept the settlement, he might wish to retain new counsel. On April 30, 1975, the day\nbefore the statute of limitations ran, Borst, on behalf of his client Bronson, accepted the\nsettlement offer.\nBorst thereafter filed suit in Superior Court for a declaratory judgment to enforce the settlement\nhe had accepted and for payment therefrom of attorney\xe2\x80\x99s fees and costs. Under oath, at trial,\nBorst testified to the above facts and to his reasons for accepting the compromise. He said he\nfelt that if he did not accept the settlement, Bronson would have lost all chance for recovery.\nSince he had received no direction from Bronson after the letter explaining why settlement was\nnecessary and suggesting new counsel should Bronson wish to pursue the claim, Borst\nmaintained that he had no alternative to the reasonable and justified step of accepting the\nsettlement. Borst testified he felt that the claim was without merit since Bronson claimed a 100%\ndisability resulting from a previous accident and therefore he could not hope to receive a jury\naward larger than the settlement offer. Borst also stated that Bronson was unwilling or unable to\nassume the responsibility of paying for expert witnesses and other court costs. The parties\nagreed that there existed no specific and explicit authority in Borst to accept a settlement offer\nto compromise appellant\'s claim.\nBronson conducted a vigorous, but inartful, cross-examination. Frequently the trial judge\nadmonished Bronson that his questioning was argumentative and advised that he would have\nan opportunity later to take the stand and present his case. After Borst left the stand, however,\nthe trial judge asked Bronson to present support in the law for his case. When Bronson\ncompleted his statement, the judge ruled for Borst without giving Bronson the opportunity to\ntake the stand and testify under oath.\nII\nAppellant\xe2\x80\x99s first argument is that the trial court erred, as a matter of law, in holding that the\nsettlement agreement at issue was binding on him. His analysis is that an attorney without\nexpress authority cannot accept for his client any settlement regardless of the merits of the\nclient\'s case or the attractiveness of the settlement offer. That conclusion was stated succinctly\nin Ashley v. Atlas Mfg. Co. In Ashley, the court confronted a courtroom settlement to which\ncounsel for both parties assented in open court. Although the court judged from the tenor of the\nagreement and the manner in which the attorney for defendant announced the agreement in the\npresence of the defendant that the attorney had specific authority to settle the case, the court\nnoted that\nas a matter of law it is true, strictly speaking, an attorney has no right, without special\nauthority, to make a compromise for his client.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c75\nAppellee argues that given the circumstances, his action in accepting the settlement in the face\nof his client\'s objections was reasonable and justified. He maintains that had he not so accepted\nthe compromise offer, his client\xe2\x80\x99s claim would have been barred by the statute of limitations and\nhis chances for recompense could have been lost forever. To file the suit as his client\ndemanded, appellee contends, would have been a wholly futile and costly endeavor. Finally,\nappellee argues that his client was either ignorant of the high cost of litigation or was unwilling to\nbear the responsibility of making the expenditures; presumably the client expected his attorney\nto bear the expense of litigation.\nIn his brief to this court, appellee offers no support in the law for the above proposition. At trial,\nhe relied on Mullen v. People\'s Drug Stores, for the proposition that \xe2\x80\x9cone who is represented by\ncounsel is bound by his actions.\xe2\x80\x9d Both Turner and Mullen, however, are inapposite to the issue\nhere. In Turner, the court saddled the client with his attorney\xe2\x80\x99s negligence in not appearing to\nanswer a complaint. In upholding a default judgment, the court noted that \xe2\x80\x9cone who comes into\ncourt through counsel of his own choice is bound by the actions of his counsel.\xe2\x80\x9d In Mullen, the\nissue was whether a client is bound by the trial tactics of his attorney; specifically, the decision\nnot to call a witness whose testimony would have gone to stipulated facts.\nWhether to penalize a party for his counsel\xe2\x80\x99s failure to appear in court and whether to bind a\nclient to his attorney\xe2\x80\x99s trial tactics present issues distinct from the issues here. In the two former\nsituations, the inquiry concerns the execution by the attorney of the services that, by contract,\nhe must perform for his client. In the instant case, we must analyze actions which counsel was\nneither duty bound nor authorized to perform.\nWe agree with appellant that regardless of the good faith of the attorney, absent specific\nauthority, an attorney cannot accept a settlement offer on behalf of a client. Mr. Borst felt that he\nhad no option but to accept the settlement offer for fear that the cause of action would be\nbarred. Such a fear was unfounded. Mr. Bronson had made his stand clear; he wanted to\npursue his claim. If Mr. Borst had ethical or financial reservations about continued\nrepresentation of Mr. Bronson, he could have terminated the relationship well before the statute\nran or he could have filed the suit and requested leave of the court to withdraw early in the\nlitigation. Regardless of the options available to him, appellee chose one route that was, or\nshould have been, foreclosed to him. Accordingly, we reverse the judgment of the trial court\nwhich purports to enforce the settlement agreement.\nFinding that the trial court erred in its application of the law, we reverse the decision of the trial\ncourt and remand the cause for proceedings not inconsistent with this opinion.\nQuestions:\nImpaired Clients\nAttorneys often represent clients who have an impaired ability to make or express decisions. For\nexample, attorneys often represent minors, who cannot make legally binding decisions.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c76\nAttorneys may also represent people with physical impairments that affect their ability to\nexpress their decisions, or mental impairments that affect their ability to make decisions that are\nin their own best interests.\nWhen an attorney represents a legally, physically, or mentally impaired client, the client remains\nthe principal and is entitled to dignity and respect. Accordingly, the attorney must provide\nrelevant information to the client, consult with the client, and pursue the client\xe2\x80\x99s wishes,\nwhenever it is possible and in the client\xe2\x80\x99s best interests.\nSometimes, impaired clients have legal representatives empowered to make decisions on their\nbehalf. In that case, the attorney must ordinarily obey the decisions of the legal representative.\nBut the attorney must also inform the client about those decisions, and consult with the client\nwhenever possible.\nRegardless, the attorney must always put the client\xe2\x80\x99s interests first. If the attorney represents\nthe impaired client directly, then the attorney has a fiduciary duty to the client, and must ensure\nthat the legal representative\xe2\x80\x99s actions are in the client\xe2\x80\x99s best interests. If the attorney represents\nthe legal representative, then the attorney has a fiduciary duty to the legal representative, but\nstill must ensure that the legal representative respects its own fiduciary duty to the client. For\nexample, if an attorney represents a client who is a minor, the attorney must obey the decisions\nof the client\xe2\x80\x99s guardian, but must also consult with the client, in order to determine the client\xe2\x80\x99s\nwishes, and ensure that the client\xe2\x80\x99s guardian does not violate its fiduciary duties. Likewise, if an\nattorney represents a comatose client, the attorney must obey the decisions of the client\xe2\x80\x99s\nguardian, but must also ensure that the guardian does not violate its fiduciary duties.\nSometimes, it is unclear whether a client is impaired. The client may be unable to communicate\nwith the attorney, unable to make consistent decisions, unable to make good decisions, or\nunwilling to conform to social expectations. These are hard cases. If a direct attorney-client\nrelationship is untenable, the attorney should seek the appointment of a legal representative.\nBut if the attorney can represent the client directly, then the attorney must act in the client\xe2\x80\x99s best\ninterests. This can create a conflict, if the attorney believes that the client\xe2\x80\x99s instructions are\ninconsistent with the client\xe2\x80\x99s best interests. Should the attorney obey the client?\nRule 1.14: Client with Diminished Capacity\na. When a client\'s capacity to make adequately considered decisions in connection with a\nrepresentation is diminished, whether because of minority, mental impairment or for\nsome other reason, the lawyer shall, as far as reasonably possible, maintain a normal\nclient-lawyer relationship with the client.\nb. When the lawyer reasonably believes that the client has diminished capacity, is at risk of\nsubstantial physical, financial or other harm unless action is taken and cannot\nadequately act in the client\'s own interest, the lawyer may take reasonably necessary\nprotective action, including consulting with individuals or entities that have the ability to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c77\ntake action to protect the client and, in appropriate cases, seeking the appointment of a\nguardian ad litem, conservator or guardian.\nc. Information relating to the representation of a client with diminished capacity is protected\nby Rule 1.6. When taking protective action pursuant to paragraph (b), the lawyer is\nimpliedly authorized under Rule 1.6(a) to reveal information about the client, but only to\nthe extent reasonably necessary to protect the client\'s interests.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 24 (2000): A Client with Diminished\nCapacity\n1. When a client\'s capacity to make adequately considered decisions in connection with the\nrepresentation is diminished, whether because of minority, physical illness, mental\ndisability, or other cause, the lawyer must, as far as reasonably possible, maintain a\nnormal client-lawyer relationship with the client and act in the best interests of the client\nas stated in Subsection (2).\n2. A lawyer representing a client with diminished capacity as described in Subsection (1)\nand for whom no guardian or other representative is available to act, must, with respect\nto a matter within the scope of the representation, pursue the lawyer\'s reasonable view\nof the client\'s objectives or interests as the client would define them if able to make\nadequately considered decisions on the matter, even if the client expresses no wishes or\ngives contrary instructions.\n3. If a client with diminished capacity as described in Subsection (1) has a guardian or\nother person legally entitled to act for the client, the client\'s lawyer must treat that person\nas entitled to act with respect to the client\'s interests in the matter, unless:\na. the lawyer represents the client in a matter against the interests of that person; or\nb. that person instructs the lawyer to act in a manner that the lawyer knows will\nviolate the person\'s legal duties toward the client.\n4. A lawyer representing a client with diminished capacity as described in Subsection (1)\nmay seek the appointment of a guardian or take other protective action within the scope\nof the representation when doing so is practical and will advance the client\'s objectives\nor interests, determined as stated in Subsection (2).\nPeople v. Bolden, 99 Cal. App. 3d 375 (Cal. Ct. App. 1979)\nSummary: Bolden was denied effective assistance of counsel when his counsel offered\nevidence of Bolden\xe2\x80\x99s incompetence although Bolden desired to be found competent.\nTwo psychiatrists testified for the People saying Bolden wasn\xe2\x80\x99t competent because he\nwas suffering delusions (thought the people he assaulted\xe2\x80\x94his father and brother\xe2\x80\x94were\naliens from outer space). Bolden argues a section of the Penal Code that lets a judge\nwho doubts the mental competence of the defendant ask the attorney\xe2\x80\x99s opinion of the\ndefendant\xe2\x80\x99s competence violates the attorney-client privilege. The court found that an\nattorney\xe2\x80\x99s opinion about his client\xe2\x80\x99s competence does not reveal confidential information.\nThe court held that Bolden\xe2\x80\x99s attorney provided effective assistance to his client.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c78\nSamuel Othello Bolden, Jr., appeals the order finding him mentally incompetent to stand trial\nbased upon a jury verdict of incompetence. Bolden contends he was denied due process by\nPenal Code section 1368 which requires his attorney to give an opinion of his client\'s\ncompetence, and was denied effective assistance of counsel when his counsel offered evidence\nof his incompetence although Bolden desired to be found competent.\nBolden was charged with robbery, two counts of assault with intent to murder, and two counts of\nassault with a deadly weapon. Criminal proceedings were suspended to determine if Bolden\nwas competent to stand trial. The first jury trial on the issue of competence was declared a\nmistrial after the jury was unable to reach a verdict. New counsel was appointed for the retrial.\nTwo psychiatrists testifying for the People said Bolden was not competent to stand trial, as he\nwas suffering delusions. He believed the people he was charged with assaulting, his father and\nbrother, were actually aliens from outer space who were inhabiting the bodies of his father and\nbrother.\nOut of the jury\'s presence Bolden\xe2\x80\x99s counsel explained to the court his client wanted to testify in\nhis own behalf and wanted to be found competent to stand trial. While counsel felt he had a duty\nto pursue his client\xe2\x80\x99s desires, he also felt he had a duty to represent his client\xe2\x80\x99s best interests.\nHe had been told by professional people a not-guilty-by-reason-of-insanity defense was\navailable for his client. He felt he needed his client\xe2\x80\x99s cooperation to pursue this defense.\nBolden\xe2\x80\x99s current mental state interfered with such cooperation. Counsel\xe2\x80\x99s solution to this\ndilemma was to place Bolden on the witness stand to testify to his competence, and then to\noffer his own psychiatric witness who testified Bolden was not competent to stand trial.\nAfter 10 minutes of deliberation, the jury returned a verdict of not competent to stand trial.\nBolden was committed to Patton State Hospital for treatment.\nPenal Code section 1368 requires a judge who doubts the mental competence of the defendant\nto \xe2\x80\x9cinquire of the attorney for the defendant whether, in the opinion of the attorney, the\ndefendant is mentally competent.\xe2\x80\x9d Bolden contends this section violates the attorney-client\nprivilege by requiring the attorney to reveal knowledge gained in the course of his relationship\nwith his client.\nThis statute does not, however, require the disclosure of a confidential communication. \xe2\x80\x9cWhat\nthe attorney observes of or hears from his client is not always privileged. It is apparent that\nsome ingredient of disclosure or revelation is essential to the element of communication.\xe2\x80\x9d\nAlthough an attorney\'s opinion of his client\'s competence may be principally drawn from\nconfidential communications he has had with that client, merely giving the opinion does not\nreveal any protected information.\nA \xe2\x80\x9cconfidential communication\xe2\x80\x9d is defined as \xe2\x80\x9cinformation transmitted between a client and his\nlawyer in the course of that relationship and includes a legal opinion formed and the advice\ngiven by the lawyer.\xe2\x80\x9d Bolden latches onto the words \xe2\x80\x9clegal opinion\xe2\x80\x9d and argues the opinion of\ncompetence is a legal opinion which is protected. The statute, however, uses \xe2\x80\x9clegal opinion" to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c79\nspecify one type of information protected. Substituting "legal opinion\xe2\x80\x9d for \xe2\x80\x9cinformation\xe2\x80\x9d in the\nstatutory language, we see the type of legal opinion protected by the privilege is one\n\xe2\x80\x9ctransmitted between a client and his lawyer,\xe2\x80\x9d not one, as here, initially transmitted between the\nlawyer and the court.\nBolden contends even if the attorney\xe2\x80\x99s opinion of mental competence does not always reveal a\nconfidential communication, in this case the psychiatrists who examined him based their\nopinions in part upon specific communications occurring between Bolden and his first counsel.\nBolden cites us to only one place in the record where such communication is mentioned. There\nthe psychiatrist testified Bolden\'s former attorney said Bolden believed the aliens inhabiting his\nfather\'s body were from outer space. However, even assuming Bolden\'s former attorney\nimproperly revealed privileged information to the psychiatrists, there was no prejudice to Bolden\nfrom the revelation as Bolden himself also told the psychiatrists, and testified in court, alien\nimposters had taken over the bodies of his family and others.\nBolden contends he was denied effective assistance of counsel, since he did not receive \xe2\x80\x9cthe\nkind of legal assistance to be expected of a reasonably competent attorney acting as a\nconscientious, diligent advocate.\xe2\x80\x9d No complaint is made about the skill of his attorney or the\nattorney\xe2\x80\x99s dedication to his client. Bolden\xe2\x80\x99s contention is the attorney was acting in what he felt\nwas the best interest of his client rather than as an advocate of his client\'s position. By his\nattorney \xe2\x80\x9csiding\xe2\x80\x9d with the People in offering evidence of incompetence, Bolden contends, his\ndesire to be found competent went unrepresented.\nDiligent advocacy does not require an attorney to blindly follow every desire of his client. An\nattorney can ordinarily make binding waivers of many of his client\'s rights as to matters of trial\ntactics. When the attorney doubts the present sanity of his client, he may assume his client\ncannot act in his own best interests and may act even contrary to the express desires of his\nclient. To do otherwise may cause prejudicial error.\nBolden\xe2\x80\x99s attorney provided effective assistance to his client.\nQuestions:\nFurther Reading:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c80\n2.5: Ex Parte Communications\nI got something to say that might cause you pain. If I catch you talking to that boy again, I\'m\ngonna let you down, and leave you flat, because I told you before, oh, you can\'t do that.24\nModel Rule 4.2 prohibits attorneys from engaging in \xe2\x80\x9cex parte\xe2\x80\x9d communications, or\ncommunications with a represented person without the consent of that person\xe2\x80\x99s attorney or the\npermission of the court.\nIn theory, the purpose of the prohibition on ex parte communications with represented persons\nis to help protect clients and ensure they receive the advice of counsel. As Model Rule 4.2,\nComment [1] explains:\nThis Rule contributes to the proper functioning of the legal system by protecting a person\nwho has chosen to be represented by a lawyer in a matter against possible overreaching\nby other lawyers who are participating in the matter, interference by those lawyers with\nthe client-lawyer relationship and the uncounselled disclosure of information relating to\nthe representation.\nThe prohibition on ex parte communications applies to all represented persons involved in a\nmatter. Accordingly, it prohibits ex parte communications with not only represented persons who\nare adverse parties, but also represented persons who are co-parties or non-parties. And it\napplies to directed communications. In other words, an attorney cannot avoid the prohibition by\ninstructing or advising a non-attorney to contact a represented person. Furthermore, the\nprohibition on ex parte communications is not waivable by the client, and it applies even if the\nclient initiates the communication, requiring the attorney to immediately end the communication.\nModel Rule 4.2, Comment [2] & [3].\nThe prohibition on ex parte communications with represented persons may also apply to the\nemployees of represented organizations. Most courts have held that attorneys cannot engage in\nex parte communications with employees of a represented organization who control the\norganization, acted on behalf of the organization in the matter, or make legal decisions for the\norganization. In other words, upper management and people directly involved in the matter are\noff-limits, but other employees are not. In particular, former employees are generally fair game.\nNotably, Model Rule 4.2 does incorporate a mens rea requirement. Attorneys cannot be\ndisciplined for engaging in an ex parte communication with a represented person unless they\nknew or should have known that the person was represented in relation to the matter. Model\nRule 4.2, Comment [8].\nAnd Model Rule 4.2 does not prohibit all ex parte communications. Nothing prevents an attorney\nfrom engaging in ex parte communications with a represented person about subjects unrelated\n24\n\nThe Beatles, You Can\xe2\x80\x99t Do That, A Hard Day\xe2\x80\x99s Night (1964).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c81\nto the matter in which they are represented. And nothing prevents an attorney who is not\nrepresenting anyone in relation to matter from engaging in ex parte communications with a\nrepresented party. In other words, attorneys may continue to pursue unrelated business, and\nclients may consult with outside counsel. Model Rule 4.2, Comment [4].\nIn addition, Model Rule 4.2 only applies to attorneys. Nothing prevents represented persons\nfrom engaging in ex parte communications with each other. And if represented persons choose\nto communicate with each other, their attorneys may provide them with advice. \xe2\x80\x9cParties to a\nmatter may communicate directly with each other, and a lawyer is not prohibited from advising a\nclient concerning a communication that the client is legally entitled to make.\xe2\x80\x9d Model Rule 4.2,\nComment [4]. Indeed, attorneys can probably even advise their clients to engage in ex parte\ncommunications with represented parties.\nRule 4.2: Communication with Person Represented by Counsel\nIn representing a client, a lawyer shall not communicate about the subject of the\nrepresentation with a person the lawyer knows to be represented by another lawyer in\nthe matter, unless the lawyer has the consent of the other lawyer or is authorized to do\nso by law or a court order.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 99: A Represented Nonclient\xe2\x80\x94The\nGeneral Anti-Contact Rule\n1. A lawyer representing a client in a matter may not communicate about the subject of the\nrepresentation with a nonclient whom the lawyer knows to be represented in the matter\nby another lawyer or with a representative of an organizational nonclient so represented\nas defined in \xc2\xa7 100, unless:\na. the communication is with a public officer or agency to the extent stated in \xc2\xa7 101;\nb. the lawyer is a party and represents no other client in the matter;\nc. the communication is authorized by law;\nd. the communication reasonably responds to an emergency; or\ne. the other lawyer consents.\n2. Subsection (1) does not prohibit the lawyer from assisting the client in otherwise proper\ncommunication by the lawyer\xe2\x80\x99s client with a represented nonclient.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 100: Definition of a Represented\nNonclient\nWithin the meaning of \xc2\xa7 99, a represented nonclient includes:\n1. a natural person represented by a lawyer; and:\n2. a current employee or other agent of an organization represented by a lawyer:\na. if the employee or other agent supervises, directs, or regularly consults with the\nlawyer concerning the matter or if the agent has power to compromise or settle\nthe matter;\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c82\nb. if the acts or omissions of the employee or other agent may be imputed to the\norganization for purposes of civil or criminal liability in the matter; or\nc. if a statement of the employee or other agent, under applicable rules of evidence,\nwould have the effect of binding the organization with respect to proof of the\nmatter.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 101: A Represented Governmental\nAgency or Officer\n1. Unless otherwise provided by law (see \xc2\xa7 99(1)(c)) and except as provided in Subsection\n(2), the prohibition stated in \xc2\xa7 99 against contact with a represented nonclient does not\napply to communications with employees of a represented governmental agency or with\na governmental officer being represented in the officer\'s official capacity.\n2. In negotiation or litigation by a lawyer of a specific claim of a client against a\ngovernmental agency or against a governmental officer in the officer\'s official capacity,\nthe prohibition stated in \xc2\xa7 99 applies, except that the lawyer may contact any officer of\nthe government if permitted by the agency or with respect to an issue of general policy.\nIn re Disciplinary Proceeding Against Haley, 126 P. 3d 1262 (Wash. 2006)\nSummary: Haley is appealing the recommendation of a Disciplinary Board proceeding\nthat Haley be subject to a 6 month suspension for violating Rule 4.2(a). Haley filed a\nlawsuit against a CEO of his former employer, Highland, acting pro se. Highland was\nrepresented by various attorneys. Haley sent a letter to Highland proposing a settlement.\nHighland\xe2\x80\x99s lawyer said the letter was a violation of Rule 4.2 and told Haley to not talk to\nHighland directly. Haley called Highland, appearing to tell him the legal status of his case\nand once again proposing settlement. This was an issue of first impression for the court\nand a split of among authorities. Haley argued that pro se lawyers should not be\nincluded in the scope of the rule because the lawyer has no client. The court held that a\nlawyer acting pro se is prohibited from contacting a party represented by counsel in the\nmatter and applied the rule prospectively.\nOWENS, J.\nAttorney Jeffrey T. Haley appeals the recommendation of the Disciplinary Board of the\nWashington State Bar Association that Haley was subject to a six-month suspension for\nknowingly violating RPC 4.2(a), which provides that, \xe2\x80\x9cin representing a client, a lawyer shall not\ncommunicate with a party represented by another lawyer.\xe2\x80\x9d\nAlthough we hold that, under RPC 4.2(a), a lawyer acting pro se is prohibited from contacting a\nparty represented by counsel in the matter, we apply our interpretation of RPC 4.2(a)\nprospectively only and dismiss the violation.\nFACTS\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c83\n\nIn 1994, Haley filed a lawsuit against Carl Highland, the former chief executive officer of a\ndefunct closely held corporation, Coresoft, of which Haley was formerly a shareholder and\nboard member. Initially, Haley acted pro se in the matter but hired counsel when the case went\nto trial in November 1995. After the trial ended, Haley\xe2\x80\x99s counsel filed notice of withdrawal and\nHaley reverted to pro se status as to appeal and collection issues. Highland was represented by\nvarious attorneys at all times during this matter, and Haley knew that Highland was consistently\nrepresented by counsel.\nThe hearing officer and Board concluded that Haley\'s improper contact with a represented party\narose out of two incidents. First, while Haley was acting pro se after the trial, he sent a letter to\nHighland and his wife proposing settlement. The letter was dated September 9, 1996, and\nstated in full as follows:\nI am about to spend approximately $25,000 on costs and attorneys fees for the appeal. If\nthe appeal is successful, the personal earnings of both Ronda Hull and Carl Highland\nwill be subject to garnishment to satisfy my judgment and the judgment now held by Carl\nHighland will be overruled. Also, the amount I am about the [sic] spend on costs and\nattorneys fees will be added to the judgment.\nThis is the last opportunity to settle the case before I spend the money on the appeal.\nThis settlement offer will not be open after this week and may be withdrawn at any time if\nit is not promptly accepted. I am offering that all claims and judgments between the\nparties be releases [sic] with no payments. Please respond directly to me.\nHighland forwarded the letter to his attorney who, in turn, suggested to Haley that the letter\nconstituted a violation of RPC 4.2(a) and warned him not to have any further contact with\nHighland. Second, on January 31, 1997, Haley again contacted Highland, this time by\ntelephone. Haley left the following voice message on Highland\xe2\x80\x99s phone:\nCarl, this is Jeff Haley. I hope your attorneys have told you Jim Bates decided that your\njudgment against me is collectable only from my separate assets and I have none;\nthey\'re all community assets. And, therefore, your judgment is uncollectable [sic]. And\nthe chance for appeal of that determination by Jim Bates has run so you can\'t appeal it\nso that if the appeal proceeds my position can only improve and yours can only get\nworse and if you have nothing collectable there\xe2\x80\x99s no chance of ever getting anything\ncollectable. It seems to me that we ought to settle this case and if we do so Monday\nthere\xe2\x80\x99ll be an opportunity on Monday to do so if you\xe2\x80\x99re interested. Give me a call."\nIn his "Amended Findings of Fact and Conclusions of Law," the hearing officer stated that\nHaley\xe2\x80\x99s letter and phone message were \xe2\x80\x9cclearly prohibited\xe2\x80\x9d by RPC 4.2(a), but he\nacknowledged that there was some authority supporting Haley\'s position that attorneys acting\npro se are not subject to the prohibition. Ultimately, in his \xe2\x80\x9cAdditional Findings of Fact,\nApplication of Standards, and Recommendation,\xe2\x80\x9d the hearing officer determined that, \xe2\x80\x9cbecause\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c84\nof the specific language of RPC 4.2 (i.e., \xe2\x80\x98In representing a client\xe2\x80\x99) and because of the apparent\nabsence of authority within the state of Washington on this specific issue, Mr. Haley could have\nharbored a sincere belief that contacts with a represented opposing party were not prohibited.\xe2\x80\x9d\nConsequently, the hearing officer concluded that the violation was \xe2\x80\x9cnegligent\xe2\x80\x9d and that the\npresumptive sanction was thus a reprimand.\nDeleting the hearing officer\xe2\x80\x99s conclusion that Haley\'s violation was negligent, the Board\nsubstituted its contrary determination that \xe2\x80\x9cHaley\'s mental state was knowledge\xe2\x80\x9d and that the\npresumptive sanction was therefore a suspension. In doing so, the Board took note that Haley\nknew Highland was represented by counsel at all times and stated that a \xe2\x80\x9creasonable reading of\nRPC 4.2 prohibits a lawyer, while representing himself or herself, from contacting a represented\nparty.\xe2\x80\x9d The Board also faulted Haley for not \xe2\x80\x9ctaking time to determine whether his conduct was\nan ethical violation.\xe2\x80\x9d\nThe hearing officer recommended that Haley be reprimanded for the violation. The Board\nrecommended a six-month suspension.\nDoes RPC 4.2(a) prohibit a lawyer who is acting pro se from contacting a party who is\nrepresented by counsel? If so, should the rule be applied in the present case?\nANALYSIS\nApplicability of RPC 4.2(a) to Lawyer Acting Pro Se. RPC 4.2(a) reads in full as follows:\nIn representing a client, a lawyer shall not communicate about the subject of the\nrepresentation with a party the lawyer knows to be represented by another lawyer in the\nmatter, unless the lawyer has the consent of the other lawyer or is authorized by law to\ndo so.\nThe rule is virtually identical to model rule 4.2. While we have not formally adopted the\ncommentary to the ABA Annotated Model Rules, we have noted that it \xe2\x80\x9cmay be \xe2\x80\x98instructive in\nexploring the underlying policy of the rules.\xe2\x80\x99\xe2\x80\x9d As the comment to model rule 4.2 explains, the\nrule aims to protect those represented by counsel \xe2\x80\x9cagainst possible overreaching by other\nlawyers who are participating in the matter, interference by those lawyers with the client-lawyer\nrelationship and the uncounselled disclosure of information relating to the representation.\xe2\x80\x9d In\nCarmick, we acknowledged that \xe2\x80\x9cthe rule\'s purpose is to prevent situations in which a\nrepresented party is taken advantage of by adverse counsel.\xe2\x80\x9d\nAt issue in the present case is whether RPC 4.2(a) applies to lawyers acting pro se \xe2\x80\x94 or, more\nprecisely, whether a lawyer who is representing himself or herself is, in the words of RPC 4.2(a),\n\xe2\x80\x9crepresenting a client.\xe2\x80\x9d This court has not previously addressed this issue; nor has the WSBA\nissued an ethics opinion, formal or informal, on the question. Other jurisdictions that have\nconsidered the rule\'s applicability to lawyers acting pro se have generally concluded that the\npolicies underlying the rule are better served by extending the restriction to lawyers acting pro\nse.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c85\n\nHaley asks this court to take the contrary view and hold that the plain meaning of the word\n\xe2\x80\x9cclient\xe2\x80\x9d in RPC 4.2(a) precludes application of the rule to a lawyer acting pro se. The word\n\xe2\x80\x9cclient\xe2\x80\x9d is variously defined as \xe2\x80\x9ca person or entity that employs a professional for advice or help\nin that professional\xe2\x80\x99s line of work,\xe2\x80\x9d and \xe2\x80\x9ca person who engages the professional advice or\nservices of another.\xe2\x80\x9d Thus, for the rule to apply to lawyers acting pro se, such lawyers would, in\neffect, be employing or engaging themselves for advice, help, or services. This, as Haley\ncontends, suggests that lawyers who are acting pro se are excluded from the scope of the rule\nbecause such lawyers have no client.\nIn the alternative, Haley maintains that, even if RPC 4.2(a) were construed to restrict pro se\nlawyers from contacting represented parties, we should conclude that the rule as applied to him,\na lawyer proceeding pro se, was unconstitutionally vague, violating his constitutional due\nprocess rights. Such a resolution finds support in Schaefer. There, the Nevada State Supreme\nCourt relied on the principle that \xe2\x80\x9ca statute or rule is impermissibly vague if it \xe2\x80\x98either forbids or\nrequires the doing of an act in terms so vague that men of common intelligence must\nnecessarily guess at its meaning and differ as to its application.\xe2\x80\x99\xe2\x80\x9d The Schaefer court based its\ndetermination that Nevada\xe2\x80\x99s Supreme Court Rule 182, a rule identical to RPC 4.2(a), was\nunconstitutionally vague on \xe2\x80\x9cthe absence of clear guidance\xe2\x80\x9d from the Nevada State Supreme\nCourt and on \xe2\x80\x9cthe existence of conflicting authority from other jurisdictions.\xe2\x80\x9d\nBoth factors relied on in Schaefer are present here. First, as noted above, no prior opinion of\nthis court has addressed the application of RPC 4.2(a) to lawyers proceeding pro se. Second, in\nlate 1996 and early 1997 when Haley contacted Highland, authority permitting such contacts\ncounterbalanced the prohibitions then existing from four jurisdictions. The comment to rule 2100 of the California RPCs, a rule identical to RPC 4.2(a) in all material respects, explicitly\npermits a lawyer proceeding pro se to contact a represented party:\nThe rule does not prohibit a lawyer who is also a party to a legal matter from directly or\nindirectly communicating on his or her own behalf with a represented party. Such a\nmember has independent rights as a party which should not be abrogated because of\nhis or her professional status. To prevent any possible abuse in such situations, the\ncounsel for the opposing party may advise that party (1) about the risks and benefits of\ncommunications with a lawyer-party, and (2) not to accept or engage in communications\nwith the lawyer-party.\nLikewise, a comment to the restatement specifically provides that \xe2\x80\x9ca lawyer representing his or\nher own interests pro se may communicate with an opposing represented nonclient on the same\nbasis as other principals.\xe2\x80\x9d\nAlongside these explicit statements permitting the questioned contact, other authorities\nsupported a reasonable inference that our RPC 4.2(a) did not foreclose a pro se lawyer\xe2\x80\x99s\ncommunication with a represented opposing party. For example, the comparable rule in Oregon,\nDR 7-104(A)(1), put lawyers acting pro se squarely within the rule\'s ambit:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c86\n\n(A) During the course of the lawyer\'s representation of a client, a lawyer shall not:\n(1) Communicate or cause another to communicate with a person the lawyer knows to\nbe represented by a lawyer. This prohibition includes a lawyer representing the lawyer\'s\nown interests.\nThe absence of an explicit prohibition in RPC 4.2(a) could have suggested that Washington\xe2\x80\x99s\nrule was narrower in scope than Oregon\xe2\x80\x99s and did not apply to lawyers acting pro se.\nAdditionally, the commentary to model rule 4.2 includes the statement that \xe2\x80\x9cparties to a matter\nmay communicate directly with each other.\xe2\x80\x9d Unlike the commentary to the restatement and to\nCalifornia\'s RPC 2-100, this comment does not pointedly refer to a lawyer-party acting pro se;\nconsequently, the breadth of the statement permits an inference that all parties may\ncommunicate unreservedly with each other. Finally, the holding in Pinsky v. Statewide\nGrievance Committee, appears to call into question the policy concerns supporting the\napplication of RPC 4.2(a) to lawyers acting pro se. In Pinsky, the Connecticut State Supreme\nCourt concluded that a represented lawyer-party had not violated an identical version of RPC\n4.2(a) when he directly contacted his landlord, who was also represented by counsel, during an\neviction matter. The Pinsky court took note that \xe2\x80\x9ccontact between litigants is specifically\nauthorized by the comments under rule 4.2\xe2\x80\x9d and concluded that Pinsky was not \xe2\x80\x9crepresenting a\nclient\xe2\x80\x9d as stated in the rule. The Pinsky court thus determined that communication between a\nrepresented lawyer-party and a represented nonlawyer party did not conflict with a key purpose\nof RPC 4.2(a) \xe2\x80\x94 the protection of a represented nonlawyer party from \xe2\x80\x9cpossible overreaching\nby other lawyers who are participating in the matter.\xe2\x80\x9d Because the Pinsky decision did not\naddress why contacts from a lawyer acting pro se would pose a greater threat of overreaching\nthan would contacts from a represented lawyer-party, Pinsky provides further equivocal\nauthority on the application of RPC 4.2(a) to lawyers acting pro se.\nIn sum, consistent with the resolution of the same issue in Schaefer, we hold that a lawyer\nacting pro se is \xe2\x80\x9crepresenting a client\xe2\x80\x9d for purposes of RPC 4.2(a), but given the absence of a\nprior decision from this court, along with the presence of conflicting or equivocal authority from\nother jurisdictions and legal commentaries, we find the rule impermissibly vague as to its\napplicability to pro se attorneys and thus apply our interpretation of the rule prospectively only.\nWe therefore dismiss the violation alleged in count 2. We need not reach Haley\xe2\x80\x99s alternative\ncontention that the application of RPC 4.2(a) to his communications with Highland violated his\nfree speech rights.\nCONCLUSION\nWe hold that RPC 4.2(a) prohibits a lawyer who is representing his own interests in a matter\nfrom contacting another party whom he knows to be represented by counsel. However, because\nwe conclude that RPC 4.2(a) was impermissibly vague as applied to Haley, we apply our\ninterpretation of RPC 4.2(a) prospectively only and thus dismiss.\nC.JOHNSON, BRIDGE, CHAMBERS, and J.M. JOHNSON, JJ, concur.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c87\n\nMADSEN, J. (concurring).\nI agree with part one of Justice Sanders\xe2\x80\x99 concurrence. This court currently has a new set of\nRPCs pending before it. Because I agree with the majority that the better policy is to include\nself-represented lawyers within the prohibition of RPC 4.2(a), I would revise that rule in\nconjunction with the review of the RPCs and avoid the issue of prospectivity.\nSANDERS, J. (concurring).\nThe majority holds that self-represented lawyers are \xe2\x80\x9crepresenting a client\xe2\x80\x9d under RPC 4.2(a)\nand therefore may not contact a represented party. But it refrains from sanctioning Haley,\nimplicitly holding that the scope of RPC 4.2(a) is ambiguous. I concur only in the result, because\nthe majority incorrectly construes RPC 4.2(a). The plain language of RPC 4.2(a) exempts selfrepresented lawyers. And the rule of lenity requires strict and narrow construction of an\nambiguous penal statute. We must apply RPC 4.2(a) prospectively just as we apply it today.\nI. THE PLAIN LANGUAGE OF RPC 4.2(A) PERMITS SELF-REPRESENTED LAWYERS TO\nCONTACT REPRESENTED PARTIES\nCourt rules like the Code of Professional Responsibility \xe2\x80\x9care subject to the same principles of\nconstruction as are statutes.\xe2\x80\x9d Thus, when interpreting a rule we give \xe2\x80\x9cthe words their ordinary\nmeaning, reading the language as a whole and seeking to give effect to all of it.\xe2\x80\x9d If the plain\nlanguage of the rule is unambiguous, additional interpretation is unnecessary.\nThe plain language of RPC 4.2(a) unambiguously exempts self-represented lawyers. \xe2\x80\x9cIn\nrepresenting a client, a lawyer shall not communicate about the subject of the representation\nwith a party the lawyer knows to be represented by another lawyer in the matter, unless the\nlawyer has the consent of the other lawyer or is authorized by law to do so.\xe2\x80\x9d A \xe2\x80\x9cclient\xe2\x80\x9d is \xe2\x80\x9ca\nperson who consults or engages the services of a legal advisor,\xe2\x80\x9d or a \xe2\x80\x9cperson or entity that\nemploys a professional for advice or help in that professional\'s line of work.\xe2\x80\x9d In other words, a\n\xe2\x80\x9cclient\xe2\x80\x9d is a third party who engages a lawyer. Because self-represented lawyers have no client,\nunder RPC 4.2(a) they may contact a represented party.\nThe majority concedes that RPC 4.2(a) applies only when a lawyer is \xe2\x80\x9crepresenting a client\xe2\x80\x9d but\nnonetheless construes it to cover self-represented lawyers. Apparently, the majority concludes\nthat self-represented lawyers are \xe2\x80\x9cemploying or engaging themselves for advice, help, or\nservices.\xe2\x80\x9d\nThis ingenious bit of legal fiction illustrates the wisdom of avoiding interpretations \xe2\x80\x9cconceivable\nin the metaphysical sense\xe2\x80\x9d when the plain language of a statute \xe2\x80\x9cis both necessary and\nsufficient.\xe2\x80\x9d Assuming that a self-represented lawyer represents a \xe2\x80\x9cclient\xe2\x80\x9d certainly produces the\nmajority\xe2\x80\x99s preferred outcome. Unfortunately, it does so only at the expense of coherence.\nLawyers cannot retain themselves any more than pro se litigants can claim legal malpractice or\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c88\nineffective assistance of counsel. Undoubtedly, wise lawyers follow their own counsel. But it is a\nneat trick indeed to advise oneself.\nThe majority\xe2\x80\x99s claim to follow an emerging majority rule is unavailing. Indeed, it cites decisions\nfrom six states concluding that self-represented lawyers are their own clients. But none offers\nany more convincing a rationale for this curious conclusion than the majority. Conclusory\nstatements cannot substitute for legal reasoning, and another court\xe2\x80\x99s error cannot justify our\nown.\nLikewise, the majority\xe2\x80\x99s reliance on the \xe2\x80\x9cpurpose\xe2\x80\x9d of RPC 4.2(a) is misplaced. As the author of\nthe court rules, we are \xe2\x80\x9cin a position to reveal the actual meaning which was sought to be\nconveyed.\xe2\x80\x9d But in the interest of certainty and consistency, we approach them \xe2\x80\x9cas though they\nhad been drafted by the Legislature.\xe2\x80\x9d Whatever the purpose of RPC 4.2(a), it cannot extend to\npersons and actions its plain language excludes. We may not expand the scope of a rule by fiat.\nIf we conclude that self-represented lawyers should not contact represented parties, we should\nsimply rewrite the rule to clearly prohibit that conduct. Other states have already done so.\nLawyers should not have to read slip opinions to divine their professional obligations.\nII. THE RULE OF LENITY REQUIRES A CONSTRUCTION OF RPC 4.2(A) EXEMPTING\nSELF-REPRESENTED LAWYERS\nEven assuming that the plain language of RPC 4.2(a) is somehow ambiguous, the rule of lenity\nrequires a strict and narrow construction exempting self-represented lawyers. The rule of lenity\nis a venerable canon of statutory interpretation, requiring courts \xe2\x80\x9cto interpret ambiguous criminal\nstatutes in the defendant\'s favor.\xe2\x80\x9d While the Rules of Professional Conduct are only \xe2\x80\x9cquasicriminal,\xe2\x80\x9d the rule of lenity applies to both criminal and quasi-criminal statutes. The deciding\nfactor is the nature of the sanction imposed.\nAs a general rule, courts apply the rule of lenity to any statute imposing penal sanctions. "We\nare mindful of the maxim that penal statutes should be strictly construed." A statute is penal if it\n\xe2\x80\x9ccan be punished by imprisonment and/or a fine\xe2\x80\x9d and remedial if it \xe2\x80\x9cprovides for the remission of\npenalties and affords a remedy for the enforcement of rights and the redress of injuries.\xe2\x80\x9d\nThe Rules of Professional Conduct are penal because they concern punishing an offender, not\ncompensating a victim. Professional discipline \xe2\x80\x9cis punitive, unavoidably so, despite the fact that\nit is not designed for that purpose.\xe2\x80\x9d While the \xe2\x80\x9cpurpose of disciplining an attorney is not primarily\nto punish the wrongdoer,\xe2\x80\x9d punishment is an important purpose \xe2\x80\x94 and a necessary\nconsequence \xe2\x80\x94 of professional discipline.\nCourts have long recognized that disbarment is \xe2\x80\x9cpenal in its nature\xe2\x80\x9d and subject to the rule of\nlenity. The same holds for all other sanctions. \xe2\x80\x9cBecause attorney suspension is a quasi-criminal\npunishment in character, any disciplinary rules used to impose this sanction on attorneys must\nbe strictly construed resolving ambiguities in favor of the person charged.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c89\nIn his dissent, Chief Justice Alexander suggests that the Rules of Professional Conduct can\ntolerate a degree of vagueness. But RPC 4.2(a) is not vague. It is ambiguous. And the Rules of\nProfessional Conduct certainly cannot tolerate ambiguity.\nA statute is ambiguous if it \xe2\x80\x9crefers to P, P can alternatively encompass either a or b, and it is\nbeyond dispute that the defendant did a\xe2\x80\x9d and vague if it \xe2\x80\x9crefers to X, but we cannot tell whether\nthe disputed event is an X.\xe2\x80\x9d No one disputes what Haley did: While representing himself, he\ncontacted a represented party. The only question is whether the term \xe2\x80\x9crepresenting a client\xe2\x80\x9d\nencompasses self-represented lawyers, as well as lawyers representing third parties. And if the\nterm \xe2\x80\x9crepresenting a client\xe2\x80\x9d is \xe2\x80\x9csusceptible to more than one reasonable meaning,\xe2\x80\x9d it is\nambiguous.\nCourts routinely apply the rule of lenity to ambiguous statutes. And the rule of lenity is peculiarly\nappropriate to the Rules of Professional Conduct. We have recognized that \xe2\x80\x9cin a disciplinary\nproceeding, all doubts should be resolved in favor of the attorney.\xe2\x80\x9d Because lawyers \xe2\x80\x9care\nsubject to professional discipline only for acts that are described as prohibited in an applicable\nlawyer code, statute, or rule of court,\xe2\x80\x9d courts \xe2\x80\x9cshould be circumspect in avoiding overbroad\nreadings or resorting to standards other than those fairly encompassed within an applicable\nlawyer code.\xe2\x80\x9d Application of the rule of lenity reflects that caution. It demands that we adopt the\nstricter, narrower construction, excluding self-represented lawyers.\nIII. CONCLUSION\nThe majority objects to the plain language of RPC 4.2(a) only because it believes that permitting\nself-represented lawyers to contact represented parties would violate the \xe2\x80\x9cpurpose\xe2\x80\x9d of the rule.\nBut the putative \xe2\x80\x9cspirit and intent\xe2\x80\x9d of a rule can trump only a \xe2\x80\x9cstrained and unlikely\xe2\x80\x9d\ninterpretation. And the plain language of RPC 4.2(a) is neither strained nor unlikely. It prohibits a\nlawyer representing a client \xe2\x80\x94 but not a self-represented lawyer \xe2\x80\x94 from contacting a\nrepresented party. As the majority concedes, several commentators and courts have found the\nplain language of essentially identical rules entirely unambiguous. We must not manufacture\nambiguity and rely on legal fictions to arrive at a preferred result. Especially when we may\nsimply write that result into law.\nI therefore concur in result.\nALEXANDER, C.J. (dissenting).\nI agree with the majority that RPC 4.2(a) prohibits lawyers who are representing themselves\nfrom communicating directly with opposing, represented parties unless they first obtain the\nconsent of the parties\' counsel. I disagree, however, with the majority\xe2\x80\x99s decision to limit\napplication of this important rule to future violators. I know of no authority that supports\nimposition of a rule of professional conduct prospectively only. I believe, therefore, that this\ncourt should suspend Jeffrey Haley from the practice of law for his violation of RPC 4.2(a). The\nviolation is especially egregious in light of Haley\xe2\x80\x99s claim that he \xe2\x80\x9cstudied the rule\xe2\x80\x9d before directly\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c90\ncontacting his opposing party, and in view of the fact that he contacted the party a second time\nafter the party\'s lawyer warned him that doing so would violate RPC 4.2(a). Because the\nmajority concludes that Haley should not be subjected to discipline for a violation of RPC 4.2(a),\nI dissent.\nThe majority correctly observes that among states considering the question with which we are\nhere presented, the prevailing trend has been to apply RPC 4.2(a) to attorneys acting pro se, as\nwas Haley, and not just to attorneys representing someone other than themselves. The majority\nacknowledges, additionally, that in late 1996 and early 1997, when Haley twice attempted to\nnegotiate a settlement without going through the opposing party\'s lawyer, at least four\njurisdictions already had concluded that RPC 4.2(a) prohibited such contacts. Yet none of the\nfour jurisdictions mentioned by the majority applied the rule to pro se attorneys on a prospective\nbasis only, as the majority does here. Rather, all four jurisdictions applied the rule to the facts\nbefore them, as this court should do. These four opinions, all cited by the majority, are sound\nand make it clear that at the time Haley engaged in the prohibited conduct, the weight of\nauthority supported the disciplining of violators and did not even hint at the prospective-only\napplication embraced by the majority in this case. In shielding Haley from application of RPC\n4.2(a), the majority borrows from the reasoning of the Nevada Supreme Court in In re Discipline\nof Schaefer. There, the Nevada court declined to punish an attorney\'s violation of the Nevada\nequivalent of RPC 4.2(a) because of: (a) the \xe2\x80\x9cabsence of clear guidance\xe2\x80\x9d from the court, and (b)\n\xe2\x80\x9cconflicting authority from other jurisdictions\xe2\x80\x9d as to whether the rule applied to pro se attorneys.\nIn effect, the majority establishes a new test: if there is any doubt about how a rule will be\nconstrued, a violator will not be punished. That is a dangerous message to send.\nFurthermore, whereas the Schaefer court relied on due process principles articulated by the\nUnited States Supreme Court in Connally in applying the Nevada rule prospectively, it is worth\nnoting that this court has never drawn from Connally the proposition that discipline is\ninappropriate just because a rule is being interpreted for the first time. In fact, in Haley v.\nMedical Disciplinary Board, the only discipline case in which this court cited Connally, we\naffirmed sanctions against a physician for violating a statute prohibiting \xe2\x80\x9cmoral turpitude\xe2\x80\x9d\nalthough we recognized \xe2\x80\x9cuncertainties associated with\xe2\x80\x9d the statutory language in question.\nThus, this court has previously declined to interpret Connally in the way the Nevada court did in\nSchaefer and the majority does here \xe2\x80\x94 as if professional license holders have a due process\nright to avoid discipline simply because a court is newly construing the rule in question. Such an\ninterpretation will have far-reaching impact, as many discipline cases that come before this court\nraise an issue of construction. In declining to sanction Haley for violating RPC 4.2(a), despite\nthe fact that Haley had \xe2\x80\x9cstudied\xe2\x80\x9d the rule and should have known that the prevailing construction\nprohibited his conduct, the majority suggests that questionable conduct will be tolerated as long\nas there is no prior Washington court decision exactly on point.\nWe must remember that our purpose in disciplining attorneys is to \xe2\x80\x9cprotect the public and to\npreserve confidence in the legal system.\xe2\x80\x9d In Curran, an attorney argued that he should not be\npunished for violating RLD 1.1(a) because, in forbidding actions that reflect \xe2\x80\x9cdisregard for the\nrule of law,\xe2\x80\x9d the rule was unconstitutionally vague. This court said, \xe2\x80\x9cWe choose to give these\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c91\nwords a narrowing construction. This law is not so vague as to be unconstitutional, given this\nlimiting construction.\xe2\x80\x9d We noted that \xe2\x80\x9ca statute will not be considered unconstitutionally vague\njust because it is difficult to determine whether certain marginal offenses are within the meaning\nof the language under attack.\xe2\x80\x9d This court suspended the attorney, Curran, saying, \xe2\x80\x9cStandards\nmay be used in lawyer disciplinary cases which would be impermissibly vague in other\ncontexts.\xe2\x80\x9d Just as we disciplined Curran there, despite uncertainty about the rule in question, so\nshould Haley be disciplined for violating RPC 4.2(a) in order to \xe2\x80\x9cprotect the public and to\npreserve confidence in the legal system.\xe2\x80\x9d\nCurran also weighs against the position taken by Justice Sanders in his concurring opinion that\nattorney discipline is a punishment scheme and therefore is subject to the rule of lenity \xe2\x80\x94 a\ncriminal law doctrine. We said in that case, \xe2\x80\x9cThe purposes of bar discipline do not precisely\nduplicate the purposes of the criminal law.\xe2\x80\x9d More notably, we have said numerous times that\n\xe2\x80\x9cpunishment is not a proper basis for discipline.\xe2\x80\x9d In In re Disbarment of Beakley, we said:\nNeither disbarment nor suspension is ordered for the purpose of punishment, but wholly\nfor the protection of the public. When a matter such as this comes before the court, the\nquestion presented is not: What punishment should be inflicted on this man? The\nquestion presented to each of its judges is simply this: Can I, in view of what has been\nclearly shown as to this man\'s conduct, conscientiously participate in continuing to hold\nhim out to the public as worthy of that confidence which a client is compelled to repose\nin his attorney?\nThus, this court has long rejected the notion that attorney discipline is penal, and the\nconcurrence cannot point to any discipline case in which we have applied the rule of lenity to\nresolve ambiguity in the attorney\'s favor.\nIn sum, because the purpose of attorney discipline is to protect the public, it is our duty to\nenforce RPC 4.2(a) in this case. The majority provides no authority for applying RPC 4.2(a) to\npro se attorneys prospectively only. I would apply the rule to Haley and suspend him for six\nmonths.\nQuestions:\n1. What is the purpose of Model Rule 4.2 and its prohibition on attorneys engaging in ex\nparte communications with represented persons? Is it intended to protect clients or their\nattorneys?\n2. Why don\xe2\x80\x99t the model rules prohibit clients from engaging in ex parte communications?\nShould ex parte communications between represented persons be encouraged,\ndiscouraged, or neither?\n3. Haley retained counsel when the action at issue went to trial. If he had engaged in ex\nparte communications with Highland while represented by an attorney, would it have\nviolated Model Rule 4.2? Should attorneys who are parties to an action and represented\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c92\nby counsel be permitted to engage in ex parte communications with represented\npersons? What if both parties are attorneys represented by counsel?\nNiesig v. Team, 76 N.Y.2d 363 (N.Y. 1990)\nSummary: Plaintiff was injured when he fell from a scaffolding at a building construction\nsite, and is now suing his employer DeTrae. Plaintiff moved for his lawyer to be able to\nconduct ex parte interviews with employees of DeTrae that were present at the time of\nthe accident. Plaintiff argued the employees were not managing or controlling\nemployees and could therefore be interviewed. DeTrae argued the rule applies to all\nemployees, citing Upjohn. The court reversed the lower court and held that an employee\nof a corporation is a \xe2\x80\x9cparty\xe2\x80\x9d for the purpose of ex parte communications only if the\nemployee\xe2\x80\x99s actions bind the corporation in the matter or the employee implements the\nadvice of counsel.\nKAYE, J.\nPlaintiff in this personal injury litigation, wishing to have his counsel privately interview a\ncorporate defendant\xe2\x80\x99s employees who witnessed the accident, puts before us a question that\nhas generated wide interest: are the employees of a corporate party also considered \xe2\x80\x9cparties\xe2\x80\x9d\nunder Disciplinary Rule 7-104(A)(1) of the Code of Professional Responsibility, which prohibits a\nlawyer from communicating directly with a \xe2\x80\x9cparty\xe2\x80\x9d known to have counsel in the matter? The trial\ncourt and the Appellate Division both answered that an employee of a counseled corporate\nparty in litigation is by definition also a \xe2\x80\x9cparty\xe2\x80\x9d within the rule, and prohibited the interviews. For\nreasons of policy, we disagree.\nAs alleged in the complaint, plaintiff was injured when he fell from scaffolding at a building\nconstruction site. At the time of the accident he was employed by DeTrae Enterprises, Inc.;\ndefendant J.M. Frederick was the general contractor, and defendant Team I the property owner.\nPlaintiff thereafter commenced a damages action against defendants, asserting two causes of\naction, and defendants brought a third-party action against DeTrae.\nPlaintiff moved for permission to have his counsel conduct ex parte interviews of all DeTrae\nemployees who were on the site at the time of the accident, arguing that these witnesses to the\nevent were neither managerial nor controlling employees and could not therefore be considered\n\xe2\x80\x9cpersonal synonyms for DeTrae.\xe2\x80\x9d DeTrae opposed the application, asserting that the disciplinary\nrule barred unapproved contact by plaintiff\xe2\x80\x99s lawyer with any of its employees. Supreme Court\ndenied plaintiff\'s request, and the Appellate Division modified by limiting the ban to DeTrae\xe2\x80\x99s\ncurrent employees.\nThe Appellate Division concluded, for theoretical as well as practical reasons, that current\nemployees of a corporate defendant in litigation \xe2\x80\x9care presumptively within the scope of the\nrepresentation afforded by the attorneys who appeared in the litigation on behalf of that\ncorporation.\xe2\x80\x9d The court held that DeTrae\xe2\x80\x99s attorneys have an attorney-client relationship with\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c93\nevery DeTrae employee connected with the subject of the litigation, and that the prohibition is\nnecessitated by the practical difficulties of distinguishing between a corporation\xe2\x80\x99s control group\nand its other employees. The court further noted that the information sought from employee\nwitnesses could instead be obtained through their depositions.\nIn the main we disagree with the Appellate Division\xe2\x80\x99s conclusions. However, because we agree\nwith the holding that DR 7-104(A)(1) applies only to current employees, not to former\nemployees, we modify rather than reverse its order, and grant plaintiff\'s motion to allow the\ninterviews.\nWe begin our analysis by noting that what is at issue is a disciplinary rule, not a statute. In\ninterpreting statutes, which are the enactments of a coequal branch of government and an\nexpression of the public policy of this State, we are of course bound to implement the will of the\nLegislature; statutes are to be applied as they are written or interpreted to effectuate the\nlegislative intention. The disciplinary rules have a different provenance and purpose. Approved\nby the New York State Bar Association and then enacted by the Appellate Divisions, the Code\nof Professional Responsibility is essentially the legal profession\xe2\x80\x99s document of self-governance,\nembodying principles of ethical conduct for attorneys as well as rules for professional discipline.\nWhile unquestionably important, and respected by the courts, the code does not have the force\nof law.\nThat distinction is particularly significant when a disciplinary rule is invoked in litigation, which in\naddition to matters of professional conduct by attorneys, implicates the interests of nonlawyers.\nIn such instances, we are not constrained to read the rules literally or effectuate the intent of the\ndrafters, but look to the rules as guidelines to be applied with due regard for the broad range of\ninterests at stake. \xe2\x80\x9cWhen we agree that the Code applies in an equitable manner to a matter\nbefore us, we should not hesitate to enforce it with vigor. When we find an area of uncertainty,\nhowever, we must use our judicial process to make our own decision in the interests of justice to\nall concerned.\xe2\x80\x9d\nDR 7-104(A)(1), which can be traced to the American Bar Association Canons of 1908,\nfundamentally embodies principles of fairness. \xe2\x80\x9cThe general thrust of the rule is to prevent\nsituations in which a represented party may be taken advantage of by adverse counsel; the\npresence of the party\xe2\x80\x99s attorney theoretically neutralizes the contact.\xe2\x80\x9d By preventing lawyers\nfrom deliberately dodging adversary counsel to reach \xe2\x80\x94 and exploit \xe2\x80\x94 the client alone, DR 7104(A)(1) safeguards against clients making improvident settlements, ill-advised disclosures\nand unwarranted concessions.\nThere is little problem applying DR 7-104(A)(1) to individuals in civil cases. In that context, the\nmeaning of \xe2\x80\x9cparty\xe2\x80\x9d is ordinarily plain enough: it refers to the individuals, not to their agents and\nemployees. The question, however, becomes more difficult when the parties are corporations \xe2\x80\x94\nas evidenced by a wealth of commentary, and controversy, on the issue.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c94\nThe difficulty is not in whether DR 7-104(A)(1) applies to corporations. It unquestionably covers\ncorporate parties, who are as much served by the rule\xe2\x80\x99s fundamental principles of fairness as\nindividual parties. But the rule does not define \xe2\x80\x9cparty,\xe2\x80\x9d and its reach in this context is unclear. In\nlitigation only the entity, not its employee, is the actual named party; on the other hand,\ncorporations act solely through natural persons, and unless some employees are also\nconsidered parties, corporations are effectively read out of the rule. The issue therefore distills\nto which corporate employees should be deemed parties for purposes of DR 7-104(A)(1), and\nthat choice is one of policy. The broader the definition of \xe2\x80\x9cparty\xe2\x80\x9d in the interests of fairness to the\ncorporation, the greater the cost in terms of foreclosing vital informal access to facts.\nThe many courts, bar associations and commentators that have balanced the competing\nconsiderations have evolved various tests, each claiming some adherents, each with some\nimperfection. At one extreme is the blanket rule adopted by the Appellate Division and urged by\ndefendants, and at the other is the \xe2\x80\x9ccontrol group\xe2\x80\x9d test \xe2\x80\x94 both of which we reject. The first is too\nbroad and the second too narrow.\nDefendants\xe2\x80\x99 principal argument for the blanket rule \xe2\x80\x94 correlating the corporate \xe2\x80\x9cparty\xe2\x80\x9d and all of\nits employees \xe2\x80\x94 rests on Upjohn v United States. As the Supreme Court recognized, a\ncorporation\xe2\x80\x99s attorney-client privilege includes communications with low- and mid-level\nemployees; defendants argue that the existence of an attorney-client privilege also signifies an\nattorney-client relationship for purposes of DR 7-104(A)(1).\nUpjohn, however, addresses an entirely different subject, with policy objectives that have little\nrelation to the question whether a corporate employee should be considered a \xe2\x80\x9cparty\xe2\x80\x9d for\npurposes of the disciplinary rule. First, the privilege applies only to confidential communications\nwith counsel, it does not immunize the underlying factual information \xe2\x80\x94 which is in issue here\n\xe2\x80\x94 from disclosure to an adversary. Second, the attorney-client privilege serves the societal\nobjective of encouraging open communication between client and counsel, a benefit not present\nin denying informal access to factual information. Thus, a corporate employee who may be a\n\xe2\x80\x9cclient\xe2\x80\x9d for purposes of the attorney-client privilege is not necessarily a \xe2\x80\x9cparty\xe2\x80\x9d for purposes of\nDR 7-104(A)(1).\nThe single indisputable advantage of a blanket preclusion \xe2\x80\x94 as with every absolute rule \xe2\x80\x94 is\nthat it is clear. No lawyer need ever risk disqualification or discipline because of uncertainty as\nto which employees are covered by the rule and which not. The problem, however, is that a ban\nof this nature exacts a high price in terms of other values, and is unnecessary to achieve the\nobjectives of DR 7-104(A)(1).\nMost significantly, the Appellate Division\xe2\x80\x99s blanket rule closes off avenues of informal discovery\nof information that may serve both the litigants and the entire justice system by uncovering\nrelevant facts, thus promoting the expeditious resolution of disputes. Foreclosing all direct,\ninformal interviews of employees of the corporate party unnecessarily sacrifices the longrecognized potential value of such sessions. \xe2\x80\x9cA lawyer talks to a witness to ascertain what, if\nany, information the witness may have relevant to his theory of the case, and to explore the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c95\nwitness\xe2\x80\x99 knowledge, memory and opinion \xe2\x80\x94 frequently in light of information counsel may have\ndeveloped from other sources. This is part of an attorney\'s so-called work product.\xe2\x80\x9d Costly\nformal depositions that may deter litigants with limited resources, or even somewhat less formal\nand costly interviews attended by adversary counsel, are no substitute for such off-the-record\nprivate efforts to learn and assemble, rather than perpetuate, information.\nNor, in our view, is it necessary to shield all employees from informal interviews in order to\nsafeguard the corporation\xe2\x80\x99s interest. Informal encounters between a lawyer and an employeewitness are not \xe2\x80\x94 as a blanket ban assumes \xe2\x80\x94 invariably calculated to elicit unwitting\nadmissions; they serve long-recognized values in the litigation process. Moreover, the corporate\nparty has significant protection at hand. It has possession of its own information and unique\naccess to its documents and employees; the corporation\'s lawyer thus has the earliest and best\nopportunity to gather the facts, to elicit information from employees, and to counsel and prepare\nthem so that they will not make the feared improvident disclosures that engendered the rule.\nWe fully recognize that, as the Appellate Division observed, every rule short of the absolute\nposes practical difficulties as to where to draw the line, and leaves some uncertainty as to which\nemployees fall on either side of it. Nonetheless, we conclude that the values served by\npermitting access to relevant information require that an effort be made to strike a balance, and\nthat uncertainty can be minimized if not eliminated by a clear test that will become even clearer\nin practice.\nWe are not persuaded, however, that the \xe2\x80\x9ccontrol group\xe2\x80\x9d test \xe2\x80\x94 defining \xe2\x80\x9cparty\xe2\x80\x9d to include only\nthe most senior management exercising substantial control over the corporation \xe2\x80\x94 achieves\nthat goal. Unquestionably, that narrow (though still uncertain) definition of corporate \xe2\x80\x9cparty\xe2\x80\x9d\nbetter serves the policy of promoting open access to relevant information. But that test gives\ninsufficient regard to the principles motivating DR 7-104(A)(1), and wholly overlooks the fact that\ncorporate employees other than senior management also can bind the corporation. The \xe2\x80\x9ccontrol\ngroup\xe2\x80\x9d test all but \xe2\x80\x9cnullifies the benefits of the disciplinary rule to corporations.\xe2\x80\x9d Given the\npractical and theoretical problems posed by the \xe2\x80\x9ccontrol group\xe2\x80\x9d test, it is hardly surprising that\nfew courts or bar associations have ever embraced it.\nBy the same token, we find unsatisfactory several of the proposed intermediate tests, because\nthey give too little guidance, or otherwise seem unworkable. In this category are the case-bycase balancing test, and a test that defines \xe2\x80\x9cparty\xe2\x80\x9d to mean corporate employees only when\nthey are interviewed about matters within the scope of their employment.\nThe test that best balances the competing interests, and incorporates the most desirable\nelements of the other approaches, is one that defines \xe2\x80\x9cparty\xe2\x80\x9d to include corporate employees\nwhose acts or omissions in the matter under inquiry are binding on the corporation (in effect, the\ncorporation\xe2\x80\x99s \xe2\x80\x9calter egos\xe2\x80\x9d) or imputed to the corporation for purposes of its liability, or employees\nimplementing the advice of counsel. All other employees may be interviewed informally.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c96\nUnlike a blanket ban or a \xe2\x80\x9ccontrol group\xe2\x80\x9d test, this solution is specifically targeted at the problem\naddressed by DR 7-104(A)(1). The potential unfair advantage of extracting concessions and\nadmissions from those who will bind the corporation is negated when employees with \xe2\x80\x9cspeaking\nauthority\xe2\x80\x9d for the corporation, and employees who are so closely identified with the interests of\nthe corporate party as to be indistinguishable from it, are deemed \xe2\x80\x9cparties\xe2\x80\x9d for purposes of DR\n7-104(A)(1). Concern for the protection of the attorney-client privilege prompts us also to include\nin the definition of \xe2\x80\x9cparty\xe2\x80\x9d the corporate employees responsible for actually effectuating the\nadvice of counsel in the matter.\nIn practical application, the test we adopt thus would prohibit direct communication by adversary\ncounsel \xe2\x80\x9cwith those officials, but only those, who have the legal power to bind the corporation in\nthe matter or who are responsible for implementing the advice of the corporation\'s lawyer, or\nany member of the organization whose own interests are directly at stake in a representation.\xe2\x80\x9d\nThis test would permit direct access to all other employees, and specifically \xe2\x80\x94 as in the present\ncase \xe2\x80\x94 it would clearly permit direct access to employees who were merely witnesses to an\nevent for which the corporate employer is sued.\nApart from striking the correct balance, this test should also become relatively clear in\napplication. It is rooted in developed concepts of the law of evidence and the law of agency,\nthereby minimizing the uncertainty facing lawyers about to embark on employee interviews. A\nsimilar test, moreover, is the one overwhelmingly adopted by courts and bar associations\nthroughout the country, whose long practical experience persuades us that \xe2\x80\x94 in day-to-day\noperation \xe2\x80\x94 it is workable.\nFinally, we note the particular contribution made by the various amici curiae in this case; by\nhighlighting the diverse contexts in which the question may arise, their submissions have\nenlarged our comprehension of the broad potential impact of the issue presented. In so doing,\nhowever, they have also alerted us to the wisdom of flagging what is in any event implicit in our\ndecisions \xe2\x80\x94 that they are limited by the facts before us and the questions put to us. Today\xe2\x80\x99s\ndecision resolves the present controversy by allowing ex parte interviews with nonmanagerial\nwitnesses employed by a corporate defendant; even in that limited context, we recognize that\nthere are undoubtedly questions not raised by the parties that will yet have to be answered.\nDefendants\xe2\x80\x99 assertions that ex parte interviews should not be permitted because of the dangers\nof overreaching, moreover, impel us to add the cautionary note that, while we have not been\ncalled upon to consider questions relating to the actual conduct of such interviews, it is of\ncourse assumed that attorneys would make their identity and interest known to interviewees and\ncomport themselves ethically.\nQuestions:\n\nFurther Reading:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c97\n\xe2\x97\x8f\n\nJohn Leubsdorf, Communicating with Another Lawyer\xe2\x80\x99s Client: The Lawyer\xe2\x80\x99s Veto and\nthe Client\xe2\x80\x99s Interests, 127 U. Pa. L. Rev. 683 (1979)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c98\n2.6: Attorney\xe2\x80\x99s Fees\nAttorney\xe2\x80\x99s Fees\nIf you\xe2\x80\x99ve got the money, I\xe2\x80\x99ve got the time. We\xe2\x80\x99ll go honky tonkin\xe2\x80\x99 and we\'ll have a time \xe2\x80\xa6 But if\nyou run short of money, I\xe2\x80\x99ll run short of time. \xe2\x80\x98Cause you with no more money, honey, I\xe2\x80\x99ve no\nmore time.25\nAttorneys can only charge a reasonable fee for their services. But the reasonableness of an\nattorney\xe2\x80\x99s fee depends on the circumstances. Main Street lawyers and Wall Street lawyers can\nand do charge very different fees for their services. And contingent fees necessarily reflect the\nrisk of failure.\nIn theory, state bar associations are supposed to ensure that attorneys charge reasonable fees.\nBut in practice, they are reluctant to question attorney\xe2\x80\x99s fee agreements. In fact, contract law\nmay protect clients from excessive fees more effectively than the rules of professional\nresponsibility.\nModel Rule 1.5: Fees\na. A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an\nunreasonable amount for expenses. The factors to be considered in determining the\nreasonableness of a fee include the following:\n1. the time and labor required, the novelty and difficulty of the questions involved,\nand the skill requisite to perform the legal service properly;\n2. the likelihood, if apparent to the client, that the acceptance of the particular\nemployment will preclude other employment by the lawyer;\n3. the fee customarily charged in the locality for similar legal services;\n4. the amount involved and the results obtained;\n5. the time limitations imposed by the client or by the circumstances;\n6. the nature and length of the professional relationship with the client;\n7. the experience, reputation, and ability of the lawyer or lawyers performing the\nservices; and\n8. whether the fee is fixed or contingent.\nb. The scope of the representation and the basis or rate of the fee and expenses for which\nthe client will be responsible shall be communicated to the client, preferably in writing,\nbefore or within a reasonable time after commencing the representation, except when\nthe lawyer will charge a regularly represented client on the same basis or rate. Any\nchanges in the basis or rate of the fee or expenses shall also be communicated to the\nclient.\nc. A fee may be contingent on the outcome of the matter for which the service is rendered,\nexcept in a matter in which a contingent fee is prohibited by paragraph (d) or other law.\n25\n\nLefty Frizzell, If You\'ve Got The Money I\'ve Got The Time (1950).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c99\nA contingent fee agreement shall be in a writing signed by the client and shall state the\nmethod by which the fee is to be determined, including the percentage or percentages\nthat shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and\nother expenses to be deducted from the recovery; and whether such expenses are to be\ndeducted before or after the contingent fee is calculated. The agreement must clearly\nnotify the client of any expenses for which the client will be liable whether or not the\nclient is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall\nprovide the client with a written statement stating the outcome of the matter and, if there\nis a recovery, showing the remittance to the client and the method of its determination.\nd. A lawyer shall not enter into an arrangement for, charge, or collect:\n1. any fee in a domestic relations matter, the payment or amount of which is\ncontingent upon the securing of a divorce or upon the amount of alimony or\nsupport, or property settlement in lieu thereof; or\n2. a contingent fee for representing a defendant in a criminal case.\ne. A division of a fee between lawyers who are not in the same firm may be made only if:\n1. the division is in proportion to the services performed by each lawyer or each\nlawyer assumes joint responsibility for the representation;\n2. the client agrees to the arrangement, including the share each lawyer will\nreceive, and the agreement is confirmed in writing; and\n3. the total fee is reasonable.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 34: Reasonable and Lawful Fees\nA lawyer may not charge a fee larger than is reasonable in the circumstances or that is\nprohibited by law.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 35: Contingent-Fee Arrangements\n1. A lawyer may contract with a client for a fee the size or payment of which is contingent\non the outcome of a matter, unless the contract violates \xc2\xa7 34 or another provision of this\nRestatement or the size or payment of the fee is:\na. contingent on success in prosecuting or defending a criminal proceeding; or\nb. contingent on a specified result in a divorce proceeding or a proceeding\nconcerning custody of a child.\n2. Unless the contract construed in the circumstances indicates otherwise, when a lawyer\nhas contracted for a contingent fee, the lawyer is entitled to receive the specified fee\nonly when and to the extent the client receives payment.\nMatter of Cooperman, 633 N.E.2d 1069 (N.Y. 1994)\nSummary: The Grievance Committee initiated a disciplinary proceeding against\nCooperman for 15 violations of professional misconduct. Cooperman uses three\nseparate agreements: the first is a written fee agreement to represent an individual in a\ncriminal matter (a $15,000 minimum fee). The second is a written agreement in\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c100\nconnection with a probate proceeding (a $5,000 minimum fee to act as counsel). The\nfinal agreement also involved a criminal matter (a $10,000 minimum fee). The court\nfound that an attorney using special non-refundable retainer fee agreements in advance\nof service and irrespective of whether any professional services are actually rendered\nviolated the Code of Professional Responsibility because the agreements were a per se\nviolation of New York public policy.\nBELLACOSA, J.\nThe issue in this appeal is whether the appellant attorney violated the Code of Professional\nResponsibility by repeatedly using special nonrefundable retainer fee agreements with his\nclients. Essentially, such arrangements are marked by the payment of a nonrefundable fee for\nspecific services, in advance and irrespective of whether any professional services are actually\nrendered. The local Grievance Committee twice warned the lawyer that he should not use these\nagreements. After a third complaint and completion of prescribed grievance proceedings, the\nAppellate Division suspended the lawyer from practice for two years. It held that the particular\nagreements were per se violative of public policy. We affirm the order of the Appellate Division.\nI.\nIn 1990, the petitioner, Grievance Committee for the Tenth Judicial District, initiated a\ndisciplinary proceeding charging attorney Cooperman with 15 specifications of professional\nmisconduct. They relate to his use of three special nonrefundable retainer fee agreements.\nThe first five charges derive from a written fee agreement to represent an individual in a criminal\nmatter. It states: \xe2\x80\x9cMy minimum fee for appearing for you in this matter is Fifteen Thousand\n($15,000.00) Dollars. This fee is not refundable for any reason whatsoever once I file a notice of\nappearance on your behalf.\xe2\x80\x9d One month after the agreement, the lawyer was discharged by the\nclient and refused to refund any portion of the fee. The client filed a formal complaint which the\nGrievance Committee forwarded to Cooperman for a response. Cooperman had already\nreceived a Letter of Caution not to use nonrefundable retainer agreements, and while this new\ncomplaint was pending, Cooperman was issued a second Letter of Caution admonishing him\nnot to accept the kind of fee arrangement at issue here. He rejected the admonition, claiming\nthe fee was nonrefundable.\nCharges 6 through 10 refer to a written retainer agreement in connection with a probate\nproceeding. It states in pertinent part: \xe2\x80\x9cFor the MINIMAL FEE and NON-REFUNDABLE amount\nof Five Thousand ($5,000.00) Dollars, I will act as your counsel.\xe2\x80\x9d The agreement further\nprovided: \xe2\x80\x9cThis is the minimum fee no matter how much or how little work I do in this\ninvestigatory stage and will remain the minimum fee and not refundable even if you decide prior\nto my completion of the investigation that you wish to discontinue the use of my services for any\nreason whatsoever.\xe2\x80\x9d The client discharged Cooperman, who refused to provide the client with\nan itemized bill of services rendered or refund any portion of the fee, citing the unconditional\nnonrefundable fee agreement.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c101\n\nThe last five charges relate to a fee agreement involving another criminal matter. It provides:\n\xe2\x80\x9cThe MINIMUM FEE for Mr. Cooperman\'s representation to any extent whatsoever is Ten\nThousand ($10,000.00) Dollars. The above amount is the MINIMUM FEE and will remain the\nminimum fee no matter how few court appearances are made. The minimum fee will remain the\nsame even if Mr. Cooperman is discharged.\xe2\x80\x9d Two days after execution of the fee agreement, the\nclient discharged Cooperman and demanded a refund. As with the other clients, he demurred.\nCooperman\xe2\x80\x99s persistent refusals to refund any portion of the fees sparked at least three\nseparate client complaints to the Grievance Committee. In each case, Cooperman answered\nthe complaint but refused the Grievance Committee\xe2\x80\x99s suggestion for fee arbitration. Thereafter,\nthe Grievance Committee sought authorization from the Appellate Division, Second Department,\nto initiate formal disciplinary proceedings against Cooperman. It tendered an array of arguments\nthat these retainer agreements are unethical because, first, they violate the lawyer\xe2\x80\x99s obligation\nto \xe2\x80\x9crefund promptly any part of a fee paid in advance that has not been earned.\xe2\x80\x9d Further, the\nagreements create \xe2\x80\x9can impermissible chilling effect upon the client\xe2\x80\x99s inherent right upon public\npolicy grounds to discharge the attorney at any time with or without cause.\xe2\x80\x9d The petition also\nalleged that the fees charged by Cooperman were excessive, and that he wrongfully refused to\nrefund unearned fees. Finally, it notes that denominating the fee payment as nonrefundable\nconstitutes misrepresentation.\nAfter an extensive hearing, the Referee made findings supporting violations on all 15 charges.\nOn appropriate motion, the Appellate Division confirmed the Referee\xe2\x80\x99s report with respect to\ncharges 2 through 5, 7 through 10, and 12 through 15. The Court disaffirmed the report as to\ncharges 1, 6 and 11, which alleged that the retainer agreements constituted deceit and\nmisrepresentation. In sustaining the remaining charges, the Court held that these retainer\nagreements were unethical and unconscionable and \xe2\x80\x9cviolative of an attorney\xe2\x80\x99s obligations under\nthe Code of Professional Responsibility to refund unearned fees upon his or her discharge.\xe2\x80\x9d The\nCourt also concluded that Cooperman\xe2\x80\x99s fees were excessive. The Court suspended him from\nthe practice of law for a period of two years but did not order restitution.\nII.\nWhether special nonrefundable retainer fee agreements are against public policy is a question\nwe left open in Jacobson v. Sassower, a fee dispute case. We agree with the Appellate Division\nin this disciplinary matter that special nonrefundable retainer fee agreements clash with public\npolicy and transgress provisions of the Code of Professional Responsibility, essentially because\nthese fee agreements compromise the client\xe2\x80\x99s absolute right to terminate the unique fiduciary\nattorney-client relationship.\nThe particular analysis begins with a reflection on the nature of the attorney-client relationship.\nSir Francis Bacon observed, \xe2\x80\x9cthe greatest trust between people is the trust of giving counsel.\xe2\x80\x9d\nThis unique fiduciary reliance, stemming from people hiring attorneys to exercise professional\njudgment on a client\xe2\x80\x99s behalf \xe2\x80\x94 \xe2\x80\x9cgiving counsel\xe2\x80\x9d \xe2\x80\x94 is imbued with ultimate trust and confidence.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c102\nThe attorney\xe2\x80\x99s obligations, therefore, transcend those prevailing in the commercial marketplace.\nThe duty to deal fairly, honestly and with undivided loyalty superimposes onto the attorney-client\nrelationship a set of special and unique duties, including maintaining confidentiality, avoiding\nconflicts of interest, operating competently, safeguarding client property and honoring the\nclient\xe2\x80\x99s interests over the lawyer\xe2\x80\x99s. To the public and clients, few features could be more\nparamount than the fee \xe2\x80\x94 the costs of legal services. The Code of Professional Responsibility\nreflects this central ingredient by specifically mandating, without exception, that an attorney\n\xe2\x80\x9cshall not enter into an agreement for, charge, or collect an illegal or excessive fee,\xe2\x80\x9d and upon\nwithdrawal from employment \xe2\x80\x9cshall refund promptly any part of a fee paid in advance that has\nnot been earned.\xe2\x80\x9d Accordingly, attorney-client fee agreements are a matter of special concern to\nthe courts and are enforceable and affected by lofty principles different from those applicable to\ncommonplace commercial contracts.\nBecause the attorney-client relationship is recognized as so special and so sensitive in our\nsociety, its effectiveness, actually and perceptually, may be irreparably impaired by conduct\nwhich undermines the confidence of the particular client or the public in general. In recognition\nof this indispensable desideratum and as a precaution against the corrosive potentiality from\nfailing to foster trust, public policy recognizes a client\'s right to terminate the attorney-client\nrelationship at any time with or without cause. This principle was effectively enunciated in Martin\nv. Camp: \xe2\x80\x9cThe contract under which an attorney is employed by a client has peculiar and\ndistinctive features thus notwithstanding the fact that the employment of an attorney by a client\nis governed by the contract which the parties make the client with or without cause may\nterminate the contract at any time.\xe2\x80\x9d\nThe unqualified right to terminate the attorney-client relationship at any time has been\nassiduously protected by the courts. An attorney, however, is not left without recourse for unfair\nterminations lacking cause. If a client exercises the right to discharge an attorney after some\nservices are performed but prior to the completion of the services for which the fee was agreed\nupon, the discharged attorney is entitled to recover compensation from the client measured by\nthe fair and reasonable value of the completed services. We have recognized that permitting a\ndischarged attorney \xe2\x80\x9cto recover the reasonable value of services rendered in quantum meruit, a\nprinciple inherently designed to prevent unjust enrichment, strikes the delicate balance between\nthe need to deter clients from taking undue advantage of attorneys, on the one hand, and the\npublic policy favoring the right of a client to terminate the attorney-client relationship without\ninhibition on the other.\xe2\x80\x9d\nCorrespondingly and by cogent logic and extension of the governing precepts, we hold that the\nuse of a special nonrefundable retainer fee agreement clashes with public policy because it\ninappropriately compromises the right to sever the fiduciary services relationship with the\nlawyer. Special nonrefundable retainer fee agreements diminish the core of the fiduciary\nrelationship by substantially altering and economically chilling the client\'s unbridled prerogative\nto walk away from the lawyer. To answer that the client can technically still terminate misses the\nreality of the economic coercion that pervades such matters. If special nonrefundable retainers\nare allowed to flourish, clients would be relegated to hostage status in an unwanted fiduciary\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c103\nrelationship \xe2\x80\x94 an utter anomaly. Such circumstance would impose a penalty on a client for\ndaring to invoke a hollow right to discharge. The established prerogative which, by operation of\nlaw and policy, is deemed not a breach of contract is thus weakened. Instead of becoming\nresponsible for fair value of actual services rendered, the firing client would lose the entire\n\xe2\x80\x9cnonrefundable\xe2\x80\x9d fee, no matter what legal services, if any, were rendered. This would be a\nshameful, not honorable, professional denouement. Cooperman even acknowledges that the\nessential purpose of the nonrefundable retainer was to prevent clients from firing the lawyer, a\npurpose which, as demonstrated, directly contravenes the Code and this State\xe2\x80\x99s settled public\npolicy in this regard.\nNevertheless, Cooperman contends that special nonrefundable retainer fee agreements should\nnot be treated as per se violations unless they are pegged to a \xe2\x80\x9cclearly excessive\xe2\x80\x9d fee. The\nargument is unavailing because the reasonableness of a particular nonrefundable fee cannot\nrescue an agreement that impedes the client\xe2\x80\x99s absolute right to walk away from the attorney.\nThe termination right and the right not to be charged excessive fees are not interdependent in\nthis analysis and context. Cooperman\xe2\x80\x99s claim, in any event, reflects a misconception of the\nnature of the legal profession by turning on its head the axiom that the legal profession \xe2\x80\x9cis a\nlearned profession, not a mere money-getting trade.\xe2\x80\x9d\nDR 2-110 (A) and (B) of the Code of Professional Responsibility add further instruction to our\nanalysis and disposition:\nWithdrawal from Employment\n(A) In general.\n(3) A lawyer who withdraws from employment shall refund promptly any part of a fee\npaid in advance that has not been earned.\n(B) Mandatory withdrawal. A lawyer representing a client before a tribunal, with its\npermission if required by its rules, shall withdraw from employment, and a lawyer\nrepresenting a client in other matters shall withdraw from employment, if:\n(4) The lawyer is discharged by the client.\nWe believe that if an attorney is prohibited from keeping any part of a prepaid fee that has not\nbeen earned because of discharge by the client, it is reasonable to conclude also that an\nattorney may not negotiate and keep fees such as those at issue here. In each of Cooperman\xe2\x80\x99s\nretainer agreements, the Appellate Division found that the lawyer transgressed professional\nethical norms. The fee arrangements expressed an absoluteness which deprived his clients of\nentitlement to any refund and, thus, conflicted with DR 2-110(A)(3).\nSince we decide the precise issue in this case in a disciplinary context only, we imply no views\nwith respect to the wider array of factors by which attorneys and clients may have fee dispute\ncontroversies resolved. Traditional criteria, including the factor of the actual amount of services\nrendered, will continue to govern those situations. Thus, while the special nonrefundable\nretainer agreement will be unenforceable and may subject an attorney to professional discipline,\nquantum meruit payment for services actually rendered will still be available and appropriate.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c104\n\nNotably, too, the record in this case contradicts Cooperman\'s claim that he acted in \xe2\x80\x9cgood faith.\xe2\x80\x9d\nHe urges us to conclude that he \xe2\x80\x9ccomplied with the limited legal precedents at the time.\xe2\x80\x9d The\nconduct of attorneys is not measured by how close to the edge of thin ice they skate. The\nmeasure of an attorney\xe2\x80\x99s conduct is not how much clarity can be squeezed out of the strict letter\nof the law, but how much honor can be poured into the generous spirit of lawyer-client\nrelationships. The \xe2\x80\x9cpunctilio of an honor the most sensitive\xe2\x80\x9d must be the prevailing standard.\nTherefore, the review is not the reasonableness of the individual attorney\xe2\x80\x99s belief, but, rather,\nwhether a \xe2\x80\x9creasonable attorney, familiar with the Code and its ethical strictures, would have\nnotice of what conduct is proscribed.\xe2\x80\x9d Cooperman\xe2\x80\x99s level of knowledge, the admonitions to him\nand the course of conduct he audaciously chose do not measure up to this necessarily high\nprofessional template. He even acknowledged at his disciplinary hearing that he knew that\n\xe2\x80\x9cthere were problems with the nonrefundability of retainers.\xe2\x80\x9d Cooperman\xe2\x80\x99s case, therefore,\nconstitutes a daring test of ethical principles, not good faith. He failed the test, and those\ncharged with enforcing transcendent professional values, especially the Appellate Divisions,\nought to be sustained in their efforts.\nOur holding today makes the conduct of trading in special nonrefundable retainer fee\nagreements subject to appropriate professional discipline. Moreover, we intend no effect or\ndisturbance with respect to other types of appropriate and ethical fee agreements. Minimum fee\narrangements and general retainers that provide for fees, not laden with the nonrefundability\nimpediment irrespective of any services, will continue to be valid and not subject in and of\nthemselves to professional discipline.\nThe Court is also mindful of the arguments of some of the amici curiae concerned about\nsweeping sequelae from this case in the form of disciplinary complaints or investigations that\nmay seek to unearth or examine into past conduct and to declare all sorts of unobjectionable,\nsettled fee arrangements unethical. We are confident that the Appellate Divisions, in the highest\ntradition of their regulatory and adjudicatory roles, will exercise their unique disciplinary\nresponsibility with prudence, so as not to overbroadly brand past individualized attorney fee\narrangements as unethical, and will, instead, fairly assess the varieties of these practices, if\npresented, on an individualized basis. Therefore, we decline to render our ruling prospectively,\nas requested.\nQuestions:\n1. Was the problem with Cooperman\xe2\x80\x99s fees that they were non-refundable, too high, or\nboth? What if Cooperman had charged a non-refundable fee of $1000 or $100? What if\nCooperman required a $10,000 refundable retainer and a $5000 engagement fee, paid\nat the end of representation?\n2. What are \xe2\x80\x9cminimum fee arrangements and general retainers that provide for fees\xe2\x80\x9d? How\nare they different from Cooperman\xe2\x80\x99s non-refundable retainer fees?\n3. Should attorneys be able to charge a flat fee for a service? What if the flat fee is the\naverage fee for that service? What if it is less than the average fee?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c105\n\nIn the Matter of Fordham, 423 Mass. 481 (Mass. 1996)\nSummary: Bar counsel alleges that Fordham charged a clearly excessive fee for\ndefending Clark against a OUI and other charges. Hearing committee concluded that\nFordham\xe2\x80\x99s fee was not substantially in excess of a reasonable fee and recommended\nagainst bar discipline. The Massachusetts Supreme Court reversed, holding that\nFordham\xe2\x80\x99s fee was clearly excessive, given the nature of the representation, and issued\na public reprimand.\nO\xe2\x80\x99CONNOR, J.\nThis is an appeal from the Board of Bar Overseers\xe2\x80\x99 dismissal of a petition for discipline filed by\nbar counsel against attorney Laurence S. Fordham. On March 11, 1992, bar counsel served\nFordham with a petition for discipline alleging that Fordham had charged a clearly excessive fee\nfor defending Timothy Clark in the District Court against a charge that he operated a motor\nvehicle while under the influence of intoxicating liquor (OUI) and against other related charges.\nFordham moved that the board dismiss the petition and the board chair recommended that that\nbe done. Bar counsel appealed from the chair\'s decision to the full board, and the board\nreferred the matter to a hearing committee.\nAfter five days of hearings, and with \xe2\x80\x9cserious reservations,\xe2\x80\x9d the hearing committee concluded\nthat Fordham\'s fee was not substantially in excess of a reasonable fee and that, therefore, the\ncommittee recommended against bar discipline. Bar counsel appealed from that determination\nto the board. By a vote of six to five, with one abstention, the board accepted the\nrecommendation of the hearing committee and dismissed the petition for discipline. Bar counsel\nthen filed in the Supreme Judicial Court for Suffolk County a claim of appeal from the board\'s\naction.\nFordham moved in the county court for a dismissal of bar counsel\xe2\x80\x99s appeal. A single justice\ndenied Fordham\'s motion and reported the case to the full court. We conclude that the single\njustice correctly denied Fordham\xe2\x80\x99s motion to dismiss bar counsel\xe2\x80\x99s appeal. We conclude, also,\nthat the board erred in dismissing bar counsel\'s petition for discipline. We direct a judgment\nordering public censure be entered in the county court.\nWe summarize the hearing committee\xe2\x80\x99s findings. On March 4, 1989, the Acton police\ndepartment arrested Timothy, then twenty-one years old, and charged him with OUI, operating a\nmotor vehicle after suspension, speeding, and operating an unregistered motor vehicle. At the\ntime of the arrest, the police discovered a partially full quart of vodka in the vehicle. After failing\na field sobriety test, Timothy was taken to the Acton police station where he submitted to two\nbreathalyzer tests which registered .10 and .12 respectively.\nSubsequent to Timothy\xe2\x80\x99s arraignment, he and his father, Laurence Clark consulted with three\nlawyers, who offered to represent Timothy for fees between $3,000 and $10,000. Shortly after\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c106\nthe arrest, Clark went to Fordham\xe2\x80\x99s home to service an alarm system which he had installed\nseveral years before. While there, Clark discussed Timothy\xe2\x80\x99s arrest with Fordham\xe2\x80\x99s wife who\ninvited Clark to discuss the case with Fordham. Fordham then met with Clark and Timothy.\nAt this meeting, Timothy described the incidents leading to his arrest and the charges against\nhim. Fordham, whom the hearing committee described as a \xe2\x80\x9cvery experienced senior trial\nattorney with impressive credentials,\xe2\x80\x9d told Clark and Timothy that he had never represented a\nclient in a driving while under the influence case or in any criminal matter, and he had never\ntried a case in the District Court. The hearing committee found that \xe2\x80\x9cFordham explained that\nalthough he lacked experience in this area, he was a knowledgeable and hard-working attorney\nand that he believed he could competently represent Timothy. Fordham described himself as\n\xe2\x80\x98efficient and economic in the use of his time.\xe2\x80\x99\xe2\x80\x9d\n\xe2\x80\x9cTowards the end of the meeting, Fordham told the Clarks that he worked on a time charge\nbasis and that he billed monthly. In other words, Fordham would calculate the amount of hours\nhe and others in the firm worked on a matter each month and multiply it by the respective hourly\nrates. He also told the Clarks that he would engage others in his firm to prepare the case. Clark\nhad indicated that he would pay Timothy\xe2\x80\x99s legal fees.\xe2\x80\x9d After the meeting, Clark hired Fordham to\nrepresent Timothy.\nAccording to the hearing committee\xe2\x80\x99s findings, Fordham filed four pretrial motions on Timothy\'s\nbehalf, two of which were allowed. One motion, entitled \xe2\x80\x9cMotion in Limine to Suppress Results\nof Breathalyzer Tests,\xe2\x80\x9d was based on the theory that, although two breathalyzer tests were\nexactly .02 apart, they were not \xe2\x80\x9cwithin\xe2\x80\x9d .02 of one another as the regulations require. The\nhearing committee characterized the motion and its rationale as \xe2\x80\x9ca creative, if not novel,\napproach to suppression of breathalyzer results.\xe2\x80\x9d Although the original trial date was June 20,\n1989, the trial, which was before a judge without jury, was held on October 10 and October 19,\n1989. The judge found Timothy not guilty of driving while under the influence.\nFordham sent the following bills to Clark:\n1.\n2.\n3.\n4.\n5.\n\nApril 19, 1989, $3,250 for services rendered in March, 1989.\nMay 15, 1989, $9,850 for services rendered in April, 1989.\nJune 19, 1989, $3,950 for services rendered in May, 1989.\nJuly 13, 1989, $13,300 for services rendered in June, 1989.\nOctober 13, 1989, $35,022.25 revised bill for services rendered from March 19 to June\n30, 1989.\n6. November 7, 1989, $15,000 for services rendered from July 1, 1989 to October 19,\n1989."\n\nThe bills totaled $50,022.25, reflecting 227 hours of billed time, 153 hours of which were\nexpended by Fordham and seventy-four of which were his associates\xe2\x80\x99 time. Clark did not pay\nthe first two bills when they became due and expressed to Fordham his concern about their\namount. Clark paid Fordham $10,000 on June 20, 1989. At that time, Fordham assured Clark\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c107\nthat most of the work had been completed \xe2\x80\x9cother than taking the case to trial.\xe2\x80\x9d Clark did not\nmake any subsequent payments. Fordham requested Clark to sign a promissory note\nevidencing his debt to Fordham and, on October 7, 1989, Clark did so. In the October 13, 1989,\nbill, Fordham added a charge of $5,000 as a \xe2\x80\x9cretroactive increase\xe2\x80\x9d in fees. On November 7,\n1989, after the case was completed, Fordham sent Clark a bill for $15,000.\nBar counsel and Fordham have stipulated that all the work billed by Fordham was actually done\nand that Fordham and his associates spent the time they claim to have spent. They also have\nstipulated that Fordham acted conscientiously, diligently, and in good faith in representing\nTimothy and in his billing in this case.\nThe board dismissed bar counsel\xe2\x80\x99s petition for discipline against Fordham because it\ndetermined, relying in large part on the findings and recommendations of the hearing\ncommittee, that Fordham\xe2\x80\x99s fee was not clearly excessive. Pursuant to S.J.C. Rule 3:07, DR 2106(B), \xe2\x80\x9ca fee is clearly excessive when, after a review of the facts, a lawyer of ordinary\nprudence, experienced in the area of the law involved, would be left with a definite and firm\nconviction that the fee is substantially in excess of a reasonable fee.\xe2\x80\x9d The rule proceeds to list\neight factors to be considered in ascertaining the reasonableness of the fee:\n1. The time and labor required, the novelty and difficulty of the questions involved,\nand the skill requisite to perform the legal service properly.\n2. The likelihood, if apparent to the client, that the acceptance of the particular\nemployment will preclude other employment by the lawyer.\n3. The fee customarily charged in the locality for similar legal services.\n4. The amount involved and the results obtained.\n5. The time limitations imposed by the client or by the circumstances.\n6. The nature and length of the professional relationship with the client.\n7. The experience, reputation, and ability of the lawyer or lawyers performing the\nservices.\n8. Whether the fee is fixed or contingent.\nIn concluding that Fordham did not charge a clearly excessive fee, the board adopted, with\nlimited exception, the hearing committee\xe2\x80\x99s report. The board\xe2\x80\x99s and the hearing committee\xe2\x80\x99s\nreasons for dismissing the petition are as follows: Bar counsel and Fordham stipulated that\nFordham acted conscientiously, diligently, and in good faith in his representation of the client\nand his billing on the case. Although Fordham lacked experience in criminal law, he is a\n\xe2\x80\x9cseasoned and well-respected civil lawyer.\xe2\x80\x9d The more than 200 hours spent preparing the OUI\ncase were necessary, \xe2\x80\x9cin part to educate Fordham in the relevant substantive law and court\nprocedures,\xe2\x80\x9d because he had never tried an OUI case or appeared in the District Court. The\nboard noted that \xe2\x80\x9calthough none of the experts who testified at the disciplinary hearing had ever\nheard of a fee in excess of $15,000 for a first-offense OUI case, the hearing committee found\nthat Clark had entered into the transaction with open eyes after interviewing other lawyers with\nmore experience in such matters.\xe2\x80\x9d The board also thought significant that Clark \xe2\x80\x9clater\nacquiesced, despite mild expressions of concern, in Fordham\xe2\x80\x99s billing practices.\xe2\x80\x9d Moreover, the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c108\nClarks specifically instructed Fordham that they would not consider a guilty plea by Timothy.\nRather they were interested only in pursuing the case to trial. Finally, Timothy obtained the\nresult he sought: an acquittal.\nBar counsel contends that the board\'s decision to dismiss the petition for discipline is erroneous\non three grounds: First, \xe2\x80\x9cthe hearing committee and the Board committed error by analyzing\nonly three of the factors set out in DR 2-106 (B) (1)-(8), and their findings with regard to these\ncriteria do not support their conclusion that the fee in this case was not clearly excessive\xe2\x80\x9d;\nsecond, the board \xe2\x80\x9cmisinterpreted DR 2-106\xe2\x80\x99s prohibition against charging a clearly excessive\nfee by reading into the rule a \xe2\x80\x98safe harbor\xe2\x80\x99 provision\xe2\x80\x9d; and third, \xe2\x80\x9cby allowing client acquiescence\nas a complete defense.\xe2\x80\x9d\nIn reviewing the hearing committee\xe2\x80\x99s and the board\xe2\x80\x99s analysis of the various factors, as\nappearing in DR 2-106 (B), which are to be considered for a determination as to whether a fee\nis clearly excessive, we are mindful that, although not binding on this court, the findings and\nrecommendations of the board are entitled to great weight. We are empowered, however, to\nreview the board\xe2\x80\x99s findings and reach our own conclusion. In the instant case we are persuaded\nthat the hearing committee\xe2\x80\x99s and the board\'s determinations that a clearly excessive fee was\nnot charged are not warranted.\nThe first factor listed in DR 2-106(B) requires examining \xe2\x80\x9cthe time and labor required, the\nnovelty and difficulty of the questions involved, and the skill requisite to perform the legal service\nproperly.\xe2\x80\x9d Although the hearing committee determined that Fordham \xe2\x80\x9cspent a large number of\nhours on the matter, in essence learning from scratch what others already know,\xe2\x80\x9d it \xe2\x80\x9cdid not\ncredit Bar Counsel\xe2\x80\x99s argument that Fordham violated DR 2-106 by spending too many hours.\xe2\x80\x9d\nThe hearing committee reasoned that even if the number of hours Fordham \xe2\x80\x9cspent were wholly\nout of proportion\xe2\x80\x9d to the number of hours that a lawyer with experience in the trying of OUI\ncases would require, the committee was not required to conclude that the fee based on time\nspent was \xe2\x80\x9cclearly excessive.\xe2\x80\x9d It was enough, the hearing committee concluded, that Clark\ninstructed Fordham to pursue the case to trial, Fordham did so zealously and, as stipulated,\nFordham spent the hours he billed in good faith and diligence. We disagree.\nFour witnesses testified before the hearing committee as experts on OUI cases. One of the\nexperts, testifying on behalf of bar counsel, opined that \xe2\x80\x9cthe amount of time spent in this case is\nclearly excessive.\xe2\x80\x9d He testified that there were no unusual circumstances in the OUI charge\nagainst Timothy and that it was a \xe2\x80\x9cstandard operating under the influence case.\xe2\x80\x9d The witness\ndid agree that Fordham\xe2\x80\x99s argument for suppression of the breathalyzer test results, which was\nsuccessful, was novel and would have justified additional time and labor. He also acknowledged\nthat the acquittal was a good result; even with the suppression of the breathalyzer tests, he\ntestified, the chances of an acquittal would have been \xe2\x80\x9cnot likely at a bench trial.\xe2\x80\x9d The witness\nestimated that it would have been necessary, for thorough preparation of the case including the\nnovel breathalyzer suppression argument, to have billed twenty to thirty hours for preparation,\nnot including trial time.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c109\nA second expert, testifying on behalf of bar counsel, expressed his belief that the issues\npresented in this case were not particularly difficult, nor novel, and that \xe2\x80\x9cthe degree of skill\nrequired to defend a case such as this was not that high.\xe2\x80\x9d He did recognize, however, that the\ntheory that Fordham utilized to suppress the breathalyzer tests was impressive and one of\nwhich he had previously never heard. Nonetheless, the witness concluded that \xe2\x80\x9cclearly there is\nno way that he could justify these kind of hours to do this kind of work.\xe2\x80\x9d He estimated that an\nOUI case involving these types of issues would require sixteen hours of trial preparation and\napproximately fifteen hours of trial time. He testified that he had once spent ninety hours in\nconnection with an OUI charge against a client that had resulted in a plea. The witness\nexplained, however, that that case had involved a second offense OUI and that it was a case of\nfirst impression, in 1987, concerning new breathalyzer equipment and comparative breathalyzer\ntests.\nAn expert called by Fordham testified that the facts of Timothy\xe2\x80\x99s case presented a challenge\nand that without the suppression of the breathalyzer test results it would have been \xe2\x80\x9can almost\nimpossible situation in terms of prevailing on the trier of fact.\xe2\x80\x9d He further stated that, based on\nthe particulars in Timothy\'s case, he believed that Fordham\xe2\x80\x99s hours were not excessive and, in\nfact, he, the witness, would have spent a comparable amount of time. The witness later\nadmitted, however, that within the past five years, the OUI cases which he had brought to trial\nrequired no more than a total of forty billed hours, which encompassed all preparation and court\nappearances. He explained that, although he had not charged more than forty hours to prepare\nan OUI case, in comparison to Fordham\'s more than 200 expended hours, Fordham\nnonetheless had spent a reasonable number of hours on the case in light of the continuance\nand the subsequent need to reprepare, as well as the \xe2\x80\x9cvery ingenious\xe2\x80\x9d breathalyzer suppression\nargument, and the Clarks\xe2\x80\x99 insistence on trial. In addition, the witness testified that, although the\nfield sobriety test, breathalyzer tests, and the presence of a half-empty liquor bottle in the car\nplaced Fordham at a serious disadvantage in being able to prevail on the OUI charge, those\ncircumstances were not unusual and in fact agreed that they were \xe2\x80\x9cnormal circumstances.\xe2\x80\x9d\nThe fourth expert witness, called by Fordham, testified that she believed the case was\n\xe2\x80\x9cextremely tough\xe2\x80\x9d and that the breathalyzer suppression theory was novel. She testified that,\nalthough the time and labor consumed on the case was more than usual in defending an OUI\ncharge, the hours were not excessive. They were not excessive, she explained, because the\ncase was particularly difficult due to the \xe2\x80\x9cstakes and the evidence.\xe2\x80\x9d She conceded, however,\nthat legal issues in defending OUI charges are \xe2\x80\x9cpretty standard\xe2\x80\x9d and that the issues presented\nin this case were not unusual. Furthermore, the witness testified that challenging the\nbreathalyzer test due to the .02 discrepancy was not unusual, but the theory on which Fordham\nproceeded was novel. Finally, she stated that she thought she may have known of one person\nwho might have spent close to one hundred hours on a difficult OUI case; she was not sure; but\nshe had never heard of a fee in excess of $10,000 for a bench trial.\nIn considering whether a fee is \xe2\x80\x9cclearly excessive,\xe2\x80\x9d the first factor to be considered pursuant to\nthat rule is \xe2\x80\x9cthe novelty and difficulty of the questions involved, and the skill requisite to perform\nthe legal service properly.\xe2\x80\x9d That standard is similar to the familiar standard of reasonableness\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c110\ntraditionally applied in civil fee disputes. Based on the testimony of the four experts, the number\nof hours devoted to Timothy\xe2\x80\x99s OUI case by Fordham and his associates was substantially in\nexcess of the hours that a prudent experienced lawyer would have spent. According to the\nevidence, the number of hours spent was several times the amount of time any of the witnesses\nhad ever spent on a similar case. We are not unmindful of the novel and successful motion to\nsuppress the breathalyzer test results, but that effort cannot justify a $50,000 fee in a type of\ncase in which the usual fee is less than one-third of that amount.\nThe board determined that \xe2\x80\x9cbecause Fordham had never tried an OUI case or appeared in the\ndistrict court, Fordham spent over 200 hours preparing the case, in part to educate himself in\nthe relevant substantive law and court procedures.\xe2\x80\x9d Fordham\'s inexperience in criminal defense\nwork and OUI cases in particular cannot justify the extraordinarily high fee. It cannot be that an\ninexperienced lawyer is entitled to charge three or four times as much as an experienced lawyer\nfor the same service. A client \xe2\x80\x9cshould not be expected to pay for the education of a lawyer when\nhe spends excessive amounts of time on tasks which, with reasonable experience, become\nmatters of routine.\xe2\x80\x9d \xe2\x80\x9cWhile the licensing of a lawyer is evidence that he has met the standards\nthen prevailing for admission to the bar, a lawyer generally should not accept employment in\nany area of the law in which he is not qualified. However, he may accept such employment if in\ngood faith he expects to become qualified through study and investigation, as long as such\npreparation would not result in unreasonable delay or expense to his client.\xe2\x80\x9d Although the\nethical considerations set forth in the ABA Code of Professional Responsibility and Canons of\nJudicial Ethics are not binding, they nonetheless serve as a guiding principle.\nThe third factor to be considered in ascertaining the reasonableness of a fee is its comparability\nto \xe2\x80\x9cthe fee customarily charged in the locality for similar legal services.\xe2\x80\x9d The hearing committee\nmade no finding as to the comparability of Fordham\xe2\x80\x99s fee with the fees customarily charged in\nthe locality for similar services. However, one of bar counsel\xe2\x80\x99s expert witnesses testified that he\nhad never heard of a fee in excess of $15,000 to defend a first OUI charge, and the customary\nflat fee in an OUI case, including trial, \xe2\x80\x9cruns from $1,000 to $7,500.\xe2\x80\x9d Bar counsel\xe2\x80\x99s other expert\ntestified that he had never heard of a fee in excess of $10,000 for a bench trial. In his view, the\ncustomary charge for a case similar to Timothy\xe2\x80\x99s would vary between $1,500 and $5,000. One\nof Fordham\xe2\x80\x99s experts testified that she considered a $40,000 or $50,000 fee for defending an\nOUI charge \xe2\x80\x9cunusual and certainly higher by far than any I\'ve ever seen before.\xe2\x80\x9d The witness\nhad never charged a fee of more than $3,500 for representing a client at a bench trial to defend\na first offense OUI charge. She further testified that she believed an \xe2\x80\x9caverage OUI in the bench\nsession is two thousand dollars and sometimes less.\xe2\x80\x9d Finally, that witness testified that she had\n\xe2\x80\x9cheard a rumor\xe2\x80\x9d that one attorney charged $10,000 for a bench trial involving an OUI charge;\nthis fee represented the highest fee of which she was aware. The other expert witness called by\nFordham testified that he had heard of a $35,000 fee for defending OUI charges, but he had\nnever charged more than $12,000 (less than twenty-five per cent of Fordham\xe2\x80\x99s fee).\nAlthough finding that Fordham\xe2\x80\x99s fee was \xe2\x80\x9cmuch higher than the fee charged by many attorneys\nwith more experience litigating driving under the influence cases,\xe2\x80\x9d the hearing committee\nnevertheless determined that the fee charged by Fordham was not clearly excessive because\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c111\nClark \xe2\x80\x9cwent into the relationship with Fordham with open eyes,\xe2\x80\x9d Fordham\xe2\x80\x99s fee fell within a \xe2\x80\x9csafe\nharbor,\xe2\x80\x9d and Clark acquiesced in Fordham\'s fee by not strenuously objecting to his bills. The\nboard accepted the hearing committee\'s analysis apart from the committee\xe2\x80\x99s reliance on the\n\xe2\x80\x9csafe harbor\xe2\x80\x9d rule.\nThe finding that Clark had entered into the fee agreement \xe2\x80\x9cwith open eyes\xe2\x80\x9d was based on the\nfinding that Clark hired Fordham after being fully apprised that he lacked any type of experience\nin defending an OUI charge and after interviewing other lawyers who were experts in defending\nOUI charges. Furthermore, the hearing committee and the board relied on testimony which\nrevealed that the fee arrangement had been fully disclosed to Clark including the fact that\nFordham \xe2\x80\x9cwould have to become familiar with the law in that area.\xe2\x80\x9d It is also significant,\nhowever, that the hearing committee found that \xe2\x80\x9cdespite Fordham\xe2\x80\x99s disclaimers concerning his\nexperience, Clark did not appear to have understood in any real sense the implications of\nchoosing Fordham to represent Timothy. Fordham did not give Clark any estimate of the total\nexpected fee or the number of $200 hours that would be required.\xe2\x80\x9d The express finding of the\nhearing committee that Clark \xe2\x80\x9cdid not appear to have understood in any real sense the\nimplications of choosing Fordham to represent Timothy\xe2\x80\x9d directly militates against the finding that\nClark entered into the agreement \xe2\x80\x9cwith open eyes.\xe2\x80\x9d\nThat brings us to the hearing committee\'s finding that Fordham\xe2\x80\x99s fee fell within a \xe2\x80\x9csafe harbor.\xe2\x80\x9d\nThe hearing committee reasoned that as long as an agreement existed between a client and an\nattorney to bill a reasonable rate multiplied by the number of hours actually worked, the\nattorney\xe2\x80\x99s fee was within a \xe2\x80\x9csafe harbor\xe2\x80\x9d and thus protected from a challenge that the fee was\nclearly excessive. The board, however, in reviewing the hearing committee\xe2\x80\x99s decision, correctly\nrejected the notion \xe2\x80\x9cthat a lawyer may always escape discipline with billings based on accurate\ntime charges for work honestly performed.\xe2\x80\x9d\nThe \xe2\x80\x9csafe harbor\xe2\x80\x9d formula would not be an appropriate rationale in this case because the\namount of time Fordham spent to educate himself and represent Timothy was clearly excessive\ndespite his good faith and diligence. Disciplinary Rule 2-106(B)\xe2\x80\x99s mandate that \xe2\x80\x9ca fee is clearly\nexcessive when, after a review of the facts, a lawyer of ordinary prudence, experienced in the\narea of the law involved, would be left with a definite and firm conviction that the fee is\nsubstantially in excess of a reasonable fee,\xe2\x80\x9d creates explicitly an objective standard by which\nattorneys\xe2\x80\x99 fees are to be judged. We are not persuaded by Fordham\xe2\x80\x99s argument that \xe2\x80\x9cunless it\ncan be shown that the \xe2\x80\x98excessive\xe2\x80\x99 work for which the attorney has charged goes beyond mere\nmatters of professional judgment and can be proven, either directly or by reasonable inference,\nto have involved dishonesty, bad faith or overreaching of the client, no case for discipline has\nbeen established.\xe2\x80\x9d Disciplinary Rule 2-106 plainly does not require an inquiry into whether the\nclearly excessive fee was charged to the client under fraudulent circumstances, and we shall\nnot write such a meaning into the disciplinary rule.\nFinally, bar counsel challenges the hearing committee\xe2\x80\x99s finding that \xe2\x80\x9cif Clark objected to the\nnumbers of hours being spent by Fordham, he could have spoken up with some force when he\nbegan receiving bills.\xe2\x80\x9d Bar counsel notes, and we agree, that \xe2\x80\x9cthe test as stated in the DR 2-\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c112\n106(A) is whether the fee \xe2\x80\x98charged\xe2\x80\x99 is clearly excessive, not whether the fee is accepted as valid\nor acquiesced in by the client.\xe2\x80\x9d Therefore, we conclude that the hearing committee and the\nboard erred in not concluding that Fordham\xe2\x80\x99s fee was clearly excessive.\nFordham argues that our imposition of discipline would offend his right to due process. A\ndisciplinary sanction constitutes \xe2\x80\x9ca punishment or penalty\xe2\x80\x9d levied against the respondent, and\ntherefore the respondent is entitled to procedural due process. Fordham contends that the bar\nand, therefore, he, have not been given fair notice through prior decisions of this court or the\nexpress language of DR 2-106 that discipline may be imposed for billing excessive hours that\nwere nonetheless spent diligently and in good faith. It is true, as Fordham asserts, that there is a\ndearth of case law in the Commonwealth meting out discipline for an attorney\xe2\x80\x99s billing of a\nclearly excessive fee. There is, however, as we have noted above, case law which specifically\naddresses what constitutes an unreasonable attorney\xe2\x80\x99s fee employing virtually the identical\nfactors contained within DR 2-106. More importantly, the general prohibition that \xe2\x80\x9ca lawyer shall\nnot enter into an agreement for, charge, or collect an illegal or clearly excessive fee,\xe2\x80\x9d is followed\nby eight specific, and clearly expressed, factors, to be evaluated by the standard of \xe2\x80\x9ca lawyer of\nordinary prudence,\xe2\x80\x9d in determining the propriety of the fee. In addition, nothing contained within\nthe disciplinary rule nor within any pertinent case law indicates in any manner that a clearly\nexcessive fee does not warrant discipline whenever the time spent during the representation\nwas spent in good faith. The fact that this court has not previously had occasion to discipline an\nattorney in the circumstances of this case does not suggest that the imposition of discipline in\nthis case offends due process. We reject Fordham\'s due process argument.\nIn charging a clearly excessive fee, Fordham departed substantially from the obligation of\nprofessional responsibility that he owed to his client. The ABA Model Standards for Imposing\nLawyer Sanctions \xc2\xa7 7.3 endorses a public reprimand as the appropriate sanction for charging a\nclearly excessive fee. We deem such a sanction appropriate in this case. Accordingly, a\njudgment is to be entered in the county court imposing a public censure. The record in this case\nis to be unimpounded.\nQuestions:\n1. Was the problem with Fordham\xe2\x80\x99s fee the rate he charged, the number of hours he billed,\nor both?\n2. Why do other attorneys litigating similar cases bill so much less? Is it because cases of\nthis kind should take less work or because their clients cannot spend any additional\nmoney?\n3. What if Fordham\xe2\x80\x99s acquittal rate were substantially higher than other attorneys in the\nsame practice area? Should he be able to charge a higher rate? How much higher?\n4. What if Fordham estimated a fee of $50,000 in advance, and billed only for work actually\ncompleted?\nContingent Fees\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c113\nYou never give me your money, you only give me your funny paper, and in the middle of\nnegotiations, you break down.26\nTypically, attorneys charge an hourly fee for their services, often billed in some fraction of an\nhour. But some attorneys charge a fixed fee for their services. Historically, the most prestigious\nlaw firms charged a fixed fee for their services, often refusing to provide an itemized list of the\nservices they had provided. Today, detailed billing is the norm, with the exception of attorneys\nproviding retail representation in routine matters, and appointed counsel for indigent defendants.\nHowever, in some circumstances, attorneys and their clients will form a contingent fee\nagreement, under which both parties agree that the attorney is entitled to a certain percentage\nof any recovery, often 33%. Contingent fee agreements are typically associated with personal\ninjury actions, where the plaintiff often has a strong claim, but lacks the financial resources to\npursue litigation. Under a contingent fee agreement, the attorney can fund the litigation, in\nexchange for a chance of a much larger recovery.\nBut contingent fee agreements can also make sense when a client wants to control an\nattorney\xe2\x80\x99s incentives. Under an hourly billing agreement, the attorney has an incentive to bill as\nmany hours as possible, even as the additional work produces diminishing returns to the client.\nAnd under a fixed fee billing agreement, the attorney has an incentive to do as little work as\npossible. But under a contingent fee agreement, the attorney simply has an incentive to win.\nUnder Model Rule 1.5(c), contingency fee agreements cannot be unreasonable and must be in\nwriting. In addition, contingent fees are prohibited in criminal law and family law actions.\nAttorneys cannot form a contingent fee agreement to be paid only if a criminal defendant is\nacquitted or receives some other favorable outcome. And attorneys typically cannot form a\ncontingent fee agreement to receive compensation from the resolution of a domestic dispute.\nCulpepper & Carroll, PLLC v. Cole, 929 So. 2d 1224 (La. 2006)\nSummary: Cole retained attorney Culpepper for a will contest. Cole requested one-third\ncontingent fee and Culpepper agreed. Culpepper received a settlement offer and Cole\nrefused to settle it. Cole terminated representation when Culpepper refused to file suit as\na forced heir. Cole recovered nothing challenging the will by himself. Culpepper wanted\n$6,950 plus legal interest as attorney\xe2\x80\x99s fees. Cole argued Culpepper did this on\ncontingency basis, and that Culpepper quit the case. Court found that a contingent fee\ncontract exists, but found that Culpepper is not entitled to recover attorneys fees\nbecause Cole did not obtain any recovery.\nPER CURIAM.\n\n26\n\nThe Beatles, You Never Give Me Your Money, Abbey Road (1969).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c114\nConnie Daniel Cole seeks review of a judgment of the court of appeal affirming an award of\nattorney\xe2\x80\x99s fees to his former counsel. For the reasons that follow, we reverse the judgment of\nthe court of appeal.\nFACTS AND PROCEDURAL HISTORY\nConnie Daniel Cole retained attorney Bobby Culpepper of the law firm of Culpepper & Carroll,\nPLLC to represent him in a contest of his mother\xe2\x80\x99s will. Mr. Cole requested that the firm handle\nthe matter on a one-third contingent fee basis, and Mr. Culpepper agreed to do so. On\nSeptember 20, 2000, Mr. Culpepper sent Mr. Cole a letter in which he confirmed that he would\naccept the representation on a contingent fee basis of one-third \xe2\x80\x9cof whatever additional property\nor money we can get for you.\xe2\x80\x9d\nAfter negotiation between Mr. Culpepper and counsel for the estate of Mr. Cole\'s mother, Mr.\nCole was offered property worth $21,600.03 over and above what he would have received\nunder the terms of the decedent\xe2\x80\x99s will. Mr. Culpepper thought the compromise was reasonable\nand recommended to Mr. Cole that he accept the offer. However, Mr. Cole refused to settle his\nclaim for that amount, believing he was entitled to a larger share of his mother\xe2\x80\x99s succession as a\nforced heir. When Mr. Culpepper refused to file suit in the matter, Mr. Cole terminated his\nrepresentation. Mr. Cole then proceeded in proper person to challenge his mother\xe2\x80\x99s will, but he\nwas unsuccessful and recovered nothing.\nOn April 12, 2004, Mr. Culpepper filed a \xe2\x80\x9cPetition on Open Account\xe2\x80\x9d on behalf of the Culpepper\nlaw firm. The suit was filed in Ruston City Court against Mr. Cole, seeking the sum of $6,950.01,\nplus legal interest, together with 25% on the principal and interest as additional attorney\'s fees.\nAttached to the petition were Mr. Culpepper\xe2\x80\x99s invoice for attorney\'s fees and a demand letter to\nMr. Cole seeking the payment of \xe2\x80\x9cthe entire balance of $6,950.01 that you owe Culpepper &\nCarroll, PLLC.\xe2\x80\x9d\nMr. Cole, appearing in proper person, answered the law firm\xe2\x80\x99s petition and denied that he owed\nany money. Mr. Cole explained in his answer that \xe2\x80\x9cMr. Culpepper did this on a contingency fee\nbasis,\xe2\x80\x9d that Mr. Culpepper \xe2\x80\x9cquit the case,\xe2\x80\x9d and that Mr. Cole paid court costs but Mr. Culpepper\n\xe2\x80\x9cwould not go to court.\xe2\x80\x9d\nFollowing a trial on the merits, at which both parties testified, the city court rendered judgment in\nfavor of the law firm, awarding the sum of $6,950.01, plus legal interest from the date of judicial\ndemand until paid, together with 25% on the principal and interest as additional attorney\'s fees,\nand costs. In oral reasons for judgment, the city court judge stated that a \xe2\x80\x9ccontingency fee was\npresent\xe2\x80\x9d based on the record, including the testimony in open court and the written admission in\nMr. Cole\xe2\x80\x99s answer that there was a contingent fee arrangement. The court noted that \xe2\x80\x9cwork was\naccomplished\xe2\x80\x9d by Mr. Culpepper and further noted that, according to the testimony, the\nsettlement would have produced a better result than if the case had gone to trial on the issue of\nforced heirship. Thus, the court was satisfied that the law firm met its burden of proof.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c115\nMr. Cole appealed the city court\'s judgment, and in a 2-1 ruling, the court of appeal amended\nthe judgment and affirmed. The majority agreed that a valid contingent fee contract existed\nbetween Mr. Cole and Mr. Culpepper, and found that by refusing to sign the \xe2\x80\x9cfavorable\nsettlement\xe2\x80\x9d negotiated by Mr. Culpepper before he was discharged, Mr. Cole was in effect\ndepriving Mr. Culpepper of the contingent fee he had already earned. Accordingly, the court of\nappeal affirmed the award to Mr. Culpepper of $6,950.01 in attorney\'s fees, plus legal interest.\nHowever, the court of appeal found that the money owing in this case does not derive from an\nopen account, but rather from a contractual obligation in the form of a contingent fee agreement.\nBased on this reasoning, the court of appeal amended the trial court\'s judgment to delete the\naward to the law firm of 25% additional attorney\'s fees plus costs under the open account\nstatute.\nJudge Caraway dissented. He recognized that a contingent fee contract existed in this case, but\nfound that because there was ultimately no recovery in the case, no fee was due to Mr.\nCulpepper. Judge Caraway further observed that to allow an attorney to collect a fee when the\nclient rejects a settlement offer and later recovers nothing \xe2\x80\x9cignores multiple and serious\nconcerns embodied in the rules of professional conduct.\xe2\x80\x9d\nUpon Mr. Cole\'s application, we granted certiorari to review the correctness of the court of\nappeal\'s ruling.\nDISCUSSION\nAs a threshold matter, we note the trial court made a finding of fact that a contingent fee\ncontract existed between Mr. Cole and Mr. Culpepper. Based on our review of the record, we\nfind no manifest error in this determination.\nHaving found a contingent fee contract exists, we now turn to the question of whether Mr.\nCulpepper is entitled to recover any attorney\'s fees under this contract. Pursuant to the parties\xe2\x80\x99\nagreement, Mr. Culpepper is entitled to one-third \xe2\x80\x9cof whatever additional property or money\xe2\x80\x9d he\nobtained on behalf of Mr. Cole. It is undisputed that Mr. Cole recovered no additional property or\nmoney as a result of the litigation against his mother\'s estate. Because Mr. Cole obtained no\nrecovery, it follows that Mr. Culpepper is not entitled to any contingent fee.\nNonetheless, Mr. Culpepper urges us to find that his contingency should attach to the\nsettlement offer he obtained on behalf of his client, even though his client refused to accept that\noffer. According to Mr. Culpepper, he did the work for which Mr. Cole retained him, and he is\ntherefore entitled to one-third of the amount offered in settlement, notwithstanding Mr. Cole\'s\nrejection of the settlement offer.\nWith the benefit of hindsight, it would have been in Mr. Cole\'s best interest to accept the\nsettlement offer obtained by Mr. Culpepper. However, it is clear that the decision to accept a\nsettlement belongs to the client alone. Therefore, regardless of the wisdom of Mr. Cole\'s\ndecision, his refusal to accept the settlement was binding on Mr. Culpepper.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c116\n\nTo allow Mr. Culpepper to recover a contingent fee under these circumstances would penalize\nMr. Cole for exercising his right to reject the settlement. We find no statutory or jurisprudential\nsupport for such a proposition. Indeed, this court has rejected any interpretation of the Rules of\nProfessional Conduct which would place restrictions on the client\xe2\x80\x99s fundamental right to control\nthe case.\nIn summary, we find that Mr. Culpepper did not obtain any recovery on behalf of Mr. Cole. In the\nabsence of a recovery, it follows that Mr. Culpepper cannot collect a contingent fee for his\nservices. Accordingly, we must reverse the judgment of the court of appeal awarding a\ncontingent fee to Mr. Culpepper.\nQuestions:\n1. Why wasn\xe2\x80\x99t Culpepper entitled to compensation for the work he actually did for Cole?\n2. Could the contingent fee agreement between Cole and Culpepper have included a\nclause requiring Cole to obtain Culpepper\xe2\x80\x99s consent before accepting or rejecting a\nsettlement offer?\nIt\xe2\x80\x99s a bad business to be in. You don\xe2\x80\x99t get thanked and you don\xe2\x80\x99t get paid. It\xe2\x80\x99s a hard world to be\nin with, and to end with, and to think about leaving behind.27\n\n27\n\nLiz Phair, Elvis, Be True, Girly-Sound (1991).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c117\n2.7: Financial Relationships with Clients\nClient Trust Accounts\nBusiness? It\xe2\x80\x99s quite simple; it\xe2\x80\x99s other people\xe2\x80\x99s money.28\nOh, can somebody explain why things go on this way? I thought they were my friends. I can\'t\nbelieve it\'s me, I can\'t believe that I\'m so green. Eyes down, round and round, let\xe2\x80\x99s all sit and\nwatch the moneygoround. Everyone take a little bit here and a little bit there.29\nWhen attorneys hold money or property in trust for their clients they must never commingle it\nwith their own funds or property, on pain of sanction, typically suspension or disbarment. In\nother words, if a client deposits funds with an attorney, the attorney must place those funds in a\ntrust account, and if a client deposits physical property, the attorney must also hold that property\nseparately, typically in a safety deposit box. Commingling funds or property is a per se violation,\nwith few exceptions, primarily in order to enable an attorney to pay any banking fees on a\nclient\xe2\x80\x99s trust account.\nState bar associations carefully monitor attorney trust accounts and punish any commingling of\nfunds. Some state bar associations even randomly audit attorney trust accounts, looking for\nviolations. State rules of professional conduct typically require attorneys to deposit client funds\nin an interest-bearing trust account. Many states require attorneys to deposit some or all of the\ninterest generated by client trust accounts into a common fund. This Interest on Lawyers\xe2\x80\x99 Trust\nAccounts (\xe2\x80\x9cIOLTA\xe2\x80\x9d) fund is used to provide legal services to indigent clients.\nAttorneys may withdraw funds from a client\xe2\x80\x99s trust account in order to pay the client\xe2\x80\x99s attorney\nfees, as they are earned. The rule against commingling prohibits attorneys from using funds\nfrom a client trust account to pay business or personal expenses, and the attorney must return\nany funds remaining in a client\xe2\x80\x99s trust account to the client when the representation ends. When\na client receives a settlement or award, the attorney must deposit the funds in the client\xe2\x80\x99s trust\naccount, and then withdraw funds to pay the client\xe2\x80\x99s attorney fees and disburse to the client.\nSpecifically, if the attorney and the client have a contingent fee agreement, the attorney must\npay the client\xe2\x80\x99s contingent fee from the client trust account.\nRule 1.15: Safekeeping Property\na. A lawyer shall hold property of clients or third persons that is in a lawyer\xe2\x80\x99s possession in\nconnection with a representation separate from the lawyer\xe2\x80\x99s own property. Funds shall\nbe kept in a separate account maintained in the state where the lawyer\xe2\x80\x99s office is\nsituated, or elsewhere with the consent of the client or third person. Other property shall\nbe identified as such and appropriately safeguarded. Complete records of such account\n\n28\n29\n\nAlexandre Dumas.\nThe Kinks, Moneygoround, Lola Versus Powerman and the Moneygoround (1970).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c118\n\nb.\n\nc.\n\nd.\n\ne.\n\nfunds and other property shall be kept by the lawyer and shall be preserved for a period\nof [five years] after termination of the representation.\nA lawyer may deposit the lawyer\xe2\x80\x99s own funds in a client trust account for the sole\npurpose of paying bank service charges on that account, but only in an amount\nnecessary for that purpose.\nA lawyer shall deposit into a client trust account legal fees and expenses that have been\npaid in advance, to be withdrawn by the lawyer only as fees are earned or expenses\nincurred.\nUpon receiving funds or other property in which a client or third person has an interest, a\nlawyer shall promptly notify the client or third person. Except as stated in this rule or\notherwise permitted by law or by agreement with the client, a lawyer shall promptly\ndeliver to the client or third person any funds or other property that the client or third\nperson is entitled to receive and, upon request by the client or third person, shall\npromptly render a full accounting regarding such property.\nWhen in the course of representation a lawyer is in possession of property in which two\nor more persons (one of whom may be the lawyer) claim interests, the property shall be\nkept separate by the lawyer until the dispute is resolved. The lawyer shall promptly\ndistribute all portions of the property as to which the interests are not in dispute.\n\nNeb. State Bar Ass\xe2\x80\x99n v. Statmore, 352 N.W.2d 875 (Neb. 1984).\nSummary: Statmore (Attorney) represented Kuzara for a 2nd offense DUI. Kuzara gave\nStatmore $500 for representation. Statmore deposited the check, but it was returned twice by\nthe bank due to insufficiency of funds. Without Statmore\xe2\x80\x99s knowledge, the bank deposited $495.\nStatmore requested criminal prosecution to get paid. Kuzara hired a different attorney. Statmore\ngot an addition $540. Kuzara contacted Statmore about potential double payment and\nrequested a reply, but Statmore did not reply. Statmore realized the double payment in\nFebruary. Statmore acknowledged double payment but didn\xe2\x80\x99t have funds to reimburse.\nStatmore brought a $245 check to pay Kuzara. Mistake did not relieve Statement of his\nprofessional duty regarding his client\xe2\x80\x99s funds.\nPER CURIAM.\nThis is an original disciplinary proceeding by the Nebraska State Bar Association against Clay\nB. Statmore, an attorney admitted to practice in Nebraska. After a hearing before the Committee\non Inquiry of the First Disciplinary District and a review by the Disciplinary Review Board, formal\ncharges against Statmore have been filed in this court.\nStatmore does not deny the charges. The charges allege violations of the following:\nCANON 1. A Lawyer Should Assist in Maintaining the Integrity and Competence of the Legal\nProfession.\nDR 1-102. Misconduct.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c119\nA. A lawyer shall not:\n1. Violate a Disciplinary Rule.\n6. Engage in any other conduct that adversely reflects on his fitness to practice law.\nCANON 9. A Lawyer Should Avoid Even the Appearance of Professional Impropriety.\nDR 9-102. Preserving Identity of Funds and Property of a Client.\nB. A lawyer shall:\n1. Promptly notify a client of the receipt of his funds, securities, or other properties.\n4. Promptly pay or deliver to the client as requested by a client the funds, securities, or\nother properties in the possession of the lawyer which the client is entitled to receive.\nWe review the evidence de novo to determine if discipline should be imposed and, if\ndiscipline is warranted, the nature of the discipline which is appropriate under the\ncircumstances.\nOn April 15, 1982, Statmore undertook representation of Deborah A. Kuzara regarding a charge\nof driving while intoxicated, second offense. Kuzara, on June 2, gave Statmore her check for\n$500\xe2\x80\x94the agreed fee for the representation. Statmore deposited Kuzara\xe2\x80\x99s June 2 check, which\nwas returned twice by the bank due to insufficiency of Kuzara\xe2\x80\x99s account. Statmore contacted\nKuzara and her father in New Jersey about the insufficient fund check.\nOn June 22 Kuzara issued another check (check A) for $500, which Statmore deposited but\nwhich was returned to Statmore\xe2\x80\x99s Lincoln bank on account of Kuzara\xe2\x80\x99s insufficient funds. On\nJune 30 Kuzara sent Statmore still another check (check B) in the amount of $540\xe2\x80\x94$500 for\nStatmore\xe2\x80\x99s fee, plus $40 for the check service charges regarding the other Kuzara checks.\nCheck B was returned on account of insufficient funds. Unbeknown to Statmore, his bank had\nheld check A and collected that check on July 9, 1982, with credit to Statmore\'s business\naccount in the sum of $495 ($500 less a $5 service charge). Statmore again contacted Kuzara\nabout the insufficient fund checks. At this time Statmore was still unaware that the bank had\ncredited his account $495 for check A on July 9.\nStatmore took check B to the Lancaster County attorney and requested criminal prosecution.\nNotified by the county attorney regarding prosecution on check B, Kuzara hired attorney George\nThompson of Bellevue, Nebraska. Kuzara later delivered $540 to the county attorney for check\nB. On November 12 the county attorney sent $540 to Statmore regarding check B.\nKuzara contacted Statmore about the possibility of a double payment, that is, check A credited\nto Statmore on July 9 and the funds from the county attorney on November 12 regarding check\nB. Statmore asked for verification from Kuzara that there was in fact a double payment, and felt\nhe was getting a \xe2\x80\x9crunaround\xe2\x80\x9d about the checks.\nAttorney Thompson wrote Statmore on January 5, 1983, pointed out the double payment, and\nrequested a reply. Statmore did not respond to Thompson\'s letter. Early in February, Statmore\nchecked his deposit slips and saw that there indeed had been the \xe2\x80\x9c$495 deposit\xe2\x80\x9d (check A) to\nhis account on July 9. This was apparently Statmore\xe2\x80\x99s first verification of payment on check A.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c120\nThompson again wrote to Statmore on March 2 and demanded Kuzara\'s $495 by return mail.\nStatmore never responded to that letter. By March 14 Statmore conclusively realized that he\nhad received double payment from Kuzara. On March 16 Thompson telephoned Statmore, who\nthen acknowledged the double payment and told Thompson he did not have the funds to\nreimburse Kuzara.\nOn May 23 Kuzara filed a complaint with the Counsel for Discipline of the Nebraska State Bar\nAssociation. Counsel for Discipline wrote Statmore as soon as Kuzara filed her complaint.\nStatmore paid Kuzara $250 on June 28 and the same day wrote the Counsel for Discipline that\nhe had \xe2\x80\x9crecently\xe2\x80\x9d paid Kuzara $250. In his June 28 letter to the Counsel for Discipline, Statmore\nalso mentioned that the \xe2\x80\x9cremaining $245 should be repaid within the next fourteen days.\xe2\x80\x9d\nStatmore paid nothing further until the day of the hearing before the Committee on Inquiry.\nOn the day of the hearing before the Committee on Inquiry, September 20, Statmore brought\nthe Counsel for Discipline a check for $245 to pay Kuzara, and stated he \xe2\x80\x9cdidn\'t know who to\nsend it to.\xe2\x80\x9d\nStatmore says he never reconciles his monthly bank statement and, therefore, had no\nknowledge that check A had cleared and been credited to his account on July 9. Such\nignorance regarding check A existed at the time Statmore received the money from the\nLancaster County attorney regarding check B.\nThroughout all the time in question, Statmore was having financial problems: failed to pay\nutilities (some of which were disconnected) and did not pay office rent (moved his office after\ndelinquency in rent). Statmore implies that the somewhat chaotic office situation explains, if not\nexcuses, the sorry state of affairs during his representation of Kuzara.\nImplicit in the license to practice law is the requirement that the recipient of the license shall\ndemean himself in a proper manner and shall refrain from practices which bring discredit upon\nthe lawyer, the profession, and the courts.\nAny violation of the ethical standards relating to the practice of law, or any conduct of an\nattorney which tends to bring reproach upon the courts or the legal profession, constitutes\ngrounds for suspension or disbarment.\nWhen the double payment occurred, Statmore held Kuzara\xe2\x80\x99s money, which he was not\nauthorized to retain. Kuzara\xe2\x80\x99s conduct or mistake concerning payment of her checks did not\nrelieve Statmore of his professional duty regarding his client\'s funds. Accurate accountability of\na client\xe2\x80\x99s funds is the responsibility of the lawyer, not the client. Statmore\xe2\x80\x99s slipshod office\nmanagement and careless bookkeeping prevented any semblance of the accurate accounting\nlawyers must maintain with respect to a client\xe2\x80\x99s funds. As a result of Statmore\xe2\x80\x99s poor\nmanagement and failure to keep track of payment from Kuzara, there was a commingling of a\nclient\xe2\x80\x99s money\xe2\x80\x94an area of gravest concern of this court in reviewing claimed lawyer\nmisconduct. The prohibition against commingling of funds is a salutary rule adopted\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c121\n\nto provide against the probability in some cases, the possibility in many cases, and the\ndanger in all cases that such commingling will result in the loss of clients\xe2\x80\x99 money. Moral\nturpitude is not necessarily involved in the commingling of a client\xe2\x80\x99s money with an\nattorney\xe2\x80\x99s own money if the client\xe2\x80\x99s money is not endangered by such procedure and is\nalways available to him. However, inherently there is danger in such practice for\nfrequently unforeseen circumstances arise jeopardizing the safety of the client\xe2\x80\x99s funds,\nand as far as the client is concerned the result is the same whether his money is\ndeliberately misappropriated by an attorney or is unintentionally lost by circumstances\nbeyond the control of the attorney.\nA lawyer\xe2\x80\x99s poor accounting procedures and sloppy office management are not excuses or\nmitigating circumstances in reference to commingled funds.\nWe realize that Statmore has repaid Kuzara the overpayment. However, a lawyer\xe2\x80\x99s restitution of\na client\xe2\x80\x99s funds after being faced with legal accountability does not exonerate professional\nmisconduct.\nAmong the major considerations in determining whether a lawyer should be disciplined is\nmaintenance of the highest trust and confidence essential to the attorney-client relationship. As\na profession, the bar continuously strives to build and safeguard such trust and confidence, but\nconduct such as before us in the present case weakens the efforts of the overwhelming majority\nof lawyers in Nebraska whose conduct meets, if not exceeds, the Code of Professional\nResponsibility.\nTo determine whether and to what extent discipline should be imposed, it is necessary that we\nconsider the nature of the offense, the need for deterring others, the maintenance of the\nreputation of the bar as a whole, the protection of the public, the attitude of the offender\ngenerally, and his present or future fitness to continue in the practice of law.\nTherefore, under the circumstances we find that a suspension is appropriate discipline for\nStatmore and that Statmore should be suspended from the practice of law for a period of 6\nmonths. During such suspension, we sincerely suggest that Statmore reappraise the candor,\nfairness, and responsibility a lawyer owes to his client. We recommend that Statmore revise his\naccounting procedures and office management to prevent recurrence of any misconduct.\nSuspension of Statmore shall be effective September 1, 1984, and shall last for 6 months.\nStatmore shall make suitable arrangements that his clients\xe2\x80\x99 matters pending at and during his\nsuspension shall be suitably protected.\nQuestions:\n1. Was Statmore\xe2\x80\x99s commingling of Kuzara\xe2\x80\x99s funds with his own intentional? Was it\nreckless? Was Kuzara harmed, and if so, how?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c122\n2. Was a 6 month suspension an appropriate sanction under the circumstances? How does\nit compare to the sanctions for other violations of the duty of care?\nFurther Reading:\n\xe2\x97\x8f\n\nABA Model Rules for Client Trust Account Records (2010).\n\nEquity as Compensation\nI\xe2\x80\x99ve got the brains you\xe2\x80\x99ve got the looks. Let\xe2\x80\x99s make lots of money. You\xe2\x80\x99ve got the brawn I\xe2\x80\x99ve got\nthe brains. Let\xe2\x80\x99s make lots of money.30\nSometimes, attorneys agree to accept an equity interest in their client\xe2\x80\x99s property, in lieu of\nattorney fees. For example, an attorney representing a corporation may accept shares of the\ncompany rather than cash. This kind of agreement can benefit both the client and the attorney,\nespecially if the client is cash-poor, but is a promising investment. The client receives legal\nadvice with no upfront expense, and the attorney receives an investment potentially worth much\nmore than the hourly fees. Moreover, the attorney has an incentive to provide the best possible\nadvice, because it will increase the value of their investment.\nBut equity compensation is not limited to securities. An attorney may agree to represent a client\nin exchange for an equity interest in the client\xe2\x80\x99s real estate. Or a patent attorney may agree to\nprosecute a patent in exchange for an interest in the patent.\nIn any case, the Model Rules of Professional Conduct permits equity compensation, but only if\nthe attorney complies with the requirements of Model Rule 1.8(a). Essentially, the attorney must\ndisclose the terms of the agreement to the client, the attorney must advise the client to seek\nindependent legal counsel, and the client must provide informed consent to the agreement, all\nof which must be in writing. In addition, the terms of the agreement must be substantively \xe2\x80\x9cfair\nand reasonable\xe2\x80\x9d to the client.\nThe concern is that the attorney\xe2\x80\x99s financial interest in the client\xe2\x80\x99s property could create a conflict\nof interest. In theory, both the client and the attorney want the property to increase in value. But\nin some cases, the attorney\xe2\x80\x99s interest in the property could compromise the impartiality of the\nattorney\xe2\x80\x99s advice, if a potential transaction would benefit the client, but harm the attorney\xe2\x80\x99s\nproperty interest.\nModel Rule 1.8: Current Clients: Specific Rules\na. A lawyer shall not enter into a business transaction with a client or knowingly acquire an\nownership, possessory, security or other pecuniary interest adverse to a client unless:\n\n30\n\nPet Shop Boys, Opportunities (Let\xe2\x80\x99s Make Lots of Money), Please (1986).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c123\n1. the transaction and terms on which the lawyer acquires the interest are fair and\nreasonable to the client and are fully disclosed and transmitted in writing in a\nmanner that can be reasonably understood by the client;\n2. the client is advised in writing of the desirability of seeking and is given a\nreasonable opportunity to seek the advice of independent legal counsel on the\ntransaction; and\n3. the client gives informed consent, in a writing signed by the client, to the\nessential terms of the transaction and the lawyer\'s role in the transaction,\nincluding whether the lawyer is representing the client in the transaction.\nCommittee on Prof. Ethics v. Mershon, 316 N.W.2d 895 (Iowa 1982)\nSummary: Mershon did tax and property work for Miller. Mershon, Miller, and Schenk formed a\ncorporation to turn land into a development property. Mershon gave the corporation a $6,250 promissory\nnote and received 200 shares of stock in exchange for his legal services. The project never happened due\nto lack of funding, and Miller died. Mershon expended $900 in out of pocket expenses for the corporation\n(more than promissory note) but didn\xe2\x80\x99t intend to seek payment. Schenk wanted \xc2\xbd of the outstanding\nstock. Mershon violated the rules of professional responsibility because he and Miller had differing\ninterests in the transaction. Mershon was reprimanded.\nMcCORMICK, Justice.\nThis case involves review of a Grievance Commission report recommending that respondent be\nreprimanded for alleged ethical violations arising from a business transaction with a client. We\nadopt the recommendation.\nFrom our de novo review of the record, we find the facts as follows. Respondent is a Cedar\nFalls attorney. He began to do tax and property work for Leonard O. Miller, a farmer, in 1951.\nMiller owned 100 acres of farmland adjacent to a country club near the city. In 1969, when he\nwas 68, Miller became interested in developing the land for residential purposes. He employed\na landscape architect and R. O. Schenk, of Schenk Engineering Company, to prepare a\npreliminary plat and market study.\nWhen the preliminary work was completed, Miller brought Schenk to meet with respondent to\ndiscuss the project. Miller wished to proceed with the development but did not have sufficient\nfunds to pay engineering costs. Schenk suggested that the three men form a corporation to\nwhich Miller would contribute the land, Schenk would contribute engineering services, and\nrespondent would contribute legal services. They agreed the land was worth approximately\n$400 an acre. Schenk estimated engineering costs at $400 an acre, and he said legal costs\nwere usually one half that amount.\nAfter several conferences in early 1970, the three men formed a corporation, Union Township\nDevelopment, Inc. Subsequently Miller conveyed the farmland to the corporation at a capitalized\nvalue of $12,500 and received 400 shares of stock. Schenk gave the corporation a $12,500\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c124\npromissory note and also received 400 shares of stock. Respondent gave the corporation a\n$6,250 promissory note and received 200 shares of stock. The promissory notes were interest\nfree and due at the discretion of the corporation. They were to represent the services to be\nrendered by Schenk and respondent.\nDevelopment plans were premised on the corporation\xe2\x80\x99s ability to obtain financing on the security\nof the farmland. As it turned out, the corporation was unable to borrow money unless the three\nindividuals would guarantee the obligation personally. They refused to do so, and financing was\nnever obtained.\nThe trio met at least annually to discuss the development, but when Miller died on December\n31, 1978, at the age of 77, the project was still at a stalemate. Respondent believed the parties\nhad an oral agreement that if development did not occur he and Schenk would relinquish their\ninterests in the corporation to Miller. Three days after Miller\xe2\x80\x99s death, he transferred his stock to\nthe corporation. He asked Schenk to do the same thing, but Schenk refused, denying any\nobligation to do so.\nRespondent was nominated in Miller\xe2\x80\x99s will as executor of his estate. He served in that capacity\nuntil Miller\xe2\x80\x99s two daughters expressed dissatisfaction with his role in Miller\xe2\x80\x99s conveyance of the\nfarmland to the corporation. He then resigned as executor. Consistent with his view, he showed\nMiller as owner of all corporate stock in the preliminary probate inventory. The farmland was\nappraised at $4,000 an acre.\nAlthough respondent had expended $900 in out-of-pocket expenses for the corporation and\nperformed legal services worth more than $6,000, he did not intend to seek payment. Schenk,\nhowever, maintained at the time of the grievance hearing that he still owned one half of the\noutstanding stock of the corporation.\nThe determinative question in our review is whether this evidence establishes a violation of the\nprinciple in DR5-104(A), which provides:\nA lawyer shall not enter into a business transaction with a client if they have differing\ninterests therein and if the client expects the lawyer to exercise his professional\njudgment therein for the protection of the client, unless the client has consented after full\ndisclosure.\nIn order to establish a violation of DR5-104(A) it is necessary to show that the lawyer and client\nhad differing interests in the transaction, that the client expected the lawyer to exercise his\nprofessional judgment for the protection of the client, and that the client consented to the\ntransaction without full disclosure.\nThe definitions section of the code of professional responsibility defines "differing interests":\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c125\n\xe2\x80\x9cDiffering interests\xe2\x80\x9d include every interest that will adversely affect either the judgment or\nloyalty of a lawyer to a client, whether it be a conflicting, inconsistent, diverse, or other\ninterest.\nMiller and Mershon plainly had differing interests in at least two aspects of the transaction. One\nwas the issue of giving respondent a present interest in the corporation in anticipation of future\nlegal services. The fee agreement was made during the existence of the attorney-client\nrelationship and thus was subject to the general principles governing attorney-client\ntransactions. Because respondent\xe2\x80\x99s fee was tied to the amount of his stock in the corporation,\nhe and Miller had differing interests concerning the extent of respondent\'s stock ownership.\nAnother differing interest involved making respondent a debtor of the corporation to assure that\nthe services would be performed. Because Miller\xe2\x80\x99s interest was aligned wholly with the\ncorporation, he and respondent had differing interests with respect to respondent\'s promissory\nnote.\nNo dispute exists that Miller relied on respondent to exercise his professional judgment to\nprotect him. One respect in which respondent did so was in preparing a written agreement to\nassure that Miller was reimbursed from the first profits of the corporation for the preincorporation\nexpenses of preliminary studies. This, however, was the only agreement of the parties that was\nreduced to writing.\nThe fighting issue before the Commission was whether respondent made full disclosure to Miller\nwithin the meaning of the Canon before Miller entered the transaction. If full disclosure means\nonly that respondent made Miller fully aware of the nature and terms of the transaction, this\nrequirement was satisfied. Nothing was hidden from Miller, and he was an active participant in\nthe transaction. Full disclosure, however, means more than this.\nBecause of the fiduciary relationship which exists, the attorney\nhas the burden of showing that the transaction was in all respects fairly and equitably\nconducted; that he fully and faithfully discharged all his duties to his client, not only by\nrefraining from any misrepresentation or concealment of any material fact, but by active\ndiligence to see that his client was fully informed of the nature and effect of the\ntransaction proposed and of his own rights and interests in the subject matter involved,\nand by seeing to it that his client either has independent advice in the matter or else\nreceives from the attorney such advice as the latter would have been expected to give\nhad the transaction been one between his client and a stranger.\nRespondent acknowledges he did not suggest to Miller that he obtain independent advice. The\nrecord does not show he otherwise gave Miller the kind of advice Miller should have had if the\ntransaction were with a stranger. Respondent let Schenk estimate the value of his legal services\nand thus the extent of respondent\xe2\x80\x99s stock ownership without any investigation to determine\nwhether the estimate was accurate. Nor did he suggest to Miller that he make such\ninvestigation. If Schenk\xe2\x80\x99s estimate was generous, the effect may have been to chill respondent\xe2\x80\x99s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c126\nscrutiny of the benchmark for the valuation, which was Schenk\xe2\x80\x99s valuation of his own services.\nFurthermore there was no discussion or investigation concerning the reasonableness or wisdom\nof tying respondent\xe2\x80\x99s fee for future services to a present twenty percent interest in the\ncorporation. Respondent acknowledges that the arrangement was at least a technical violation.\nNothing was done to assure that Miller would get his farm back if either Schenk or respondent\ndid not perform or if the development should not be undertaken. Nothing was done to protect\nMiller or his estate in the event of the death of any of the parties. The promissory notes could\nhardly have been on more favorable terms to the debtors. The record does not show whether\nMiller was informed of the difficulty the corporation might have in enforcing respondent\'s\nobligation. So far as the record shows, Miller was not told of any possible effect of respondent\'s\ndiffering interests on the exercise of his professional judgment.\nThe Commission found respondent is forthright and honest and gained no profit from the\ntransaction. The record confirms this finding. As the Commission also found, however, a\nviolation of DR5-104(A) was nevertheless established. Respondent had three alternatives when\nthe Schenk proposal was first made. The safest and perhaps best course would have been to\nrefuse to participate personally in the transaction. Alternatively, he could have recommended\nthat Miller obtain independent advice. Finally, if Miller refused to seek independent advice or\nrespondent did not recommend he do so, he could have made the least desirable choice. He\ncould have attempted to meet the high standard of disclosure outlined in this opinion.\nHaving chosen to enter the transaction without recommending that Miller obtain independent\nadvice, respondent was obliged to make full disclosure. Because the record does not show full\ndisclosure was made before Miller consented to the transaction, a violation of DR5-104(A) has\nbeen established. This is true even though respondent did not act dishonestly or make a profit\non the transaction.\nIn accordance with the Commission recommendation, we reprimand him for the violation.\nQuestions:\n1. Did Mershon benefit at Miller\xe2\x80\x99s expense?\n2. Why was Miller reprimanded? What should he have done to avoid a reprimand? Would it\nhave changed the outcome?\n3. Was Mershon\xe2\x80\x99s punishment sufficient under the circumstances?\nLitigation Finance\nHistorically, \xe2\x80\x9cmaintenance,\xe2\x80\x9d \xe2\x80\x9cchamperty,\xe2\x80\x9d and \xe2\x80\x9cbarratry\xe2\x80\x9d were illegal and tortious.31 Maintenance\nis litigation funding by a disinterested third party, champerty is litigation funding in exchange for\n31\n\nPercy H. Winfield, History of Maintenance and Champerty, 35 L. Q. Rev. 50 (1919). In medieval\nEngland, maintenance and champerty were both prohibited by statute, and may also have been\nprohibited by the common law.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c127\na percentage of any recovery, and barratry is frivolous litigation.32 The prohibition was intended\nto prevent frivolous and abusive litigation. The concern was that nobles would abuse the courts\nto harass their enemies and extort settlements.33\nUntil recently, United States courts maintained the prohibition on maintenance and champerty.\nBut people began to question the legitimacy of rules that prevented people from pursuing valid\nclaims simply because they could not pay attorney\xe2\x80\x99s fees. First, courts began permitting\ncontingent fee agreements, which are champerty, but limited to lawyers. And then they began\npermitting litigation finance agreements, which are champerty for everyone.\nContingent fee agreements are literally champerty, because an attorney agrees to fund litigation\nin exchange for a percentage of the recovery. And litigation finance agreements are champerty\nsquared, because a third party agrees to fund litigation in exchange for a percentage of the\nrecovery. But courts have held that both contingent fees and litigation finance are fine, because\nthey enable people to pursue valid claims.\nModel Rule 1.8: Current Clients: Specific Rules\ne. A lawyer shall not provide financial assistance to a client in connection with pending or\ncontemplated litigation, except that:\n1. a lawyer may advance court costs and expenses of litigation, the repayment of\nwhich may be contingent on the outcome of the matter; and\n2. a lawyer representing an indigent client may pay court costs and expenses of\nlitigation on behalf of the client.\nf. A lawyer shall not accept compensation for representing a client from one other than the\nclient unless:\n1. the client gives informed consent;\n2. there is no interference with the lawyer\'s independence of professional judgment\nor with the client-lawyer relationship; and\n3. information relating to representation of a client is protected.\nModel Rule 1.8: Current Clients: Specific Rules\ni.\n\nA lawyer shall not acquire a proprietary interest in the cause of action or subject matter\nof litigation the lawyer is conducting for a client, except that the lawyer may:\n1. acquire a lien authorized by law to secure the lawyer\'s fee or expenses; and\n2. contract with a client for a reasonable contingent fee in a civil case.\n\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 36: Forbidden Client\xe2\x80\x93Lawyer\nFinancial Arrangements\n32\n\nThe word \xe2\x80\x9cchamperty\xe2\x80\x9d derived from the Old French word \xe2\x80\x9cchampart,\xe2\x80\x9d which referred to a feudal lord\xe2\x80\x99s\nclaim to a share of the produce of the land worked by a vassal. The word \xe2\x80\x9cbarratry\xe2\x80\x9d derived from the Old\nFrench word \xe2\x80\x9cbarater,\xe2\x80\x9d which meant \xe2\x80\x9cto deceive.\xe2\x80\x9d\n33\nIn practice, the law prohibited champerty, and may have permitted maintenance without champerty.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c128\n\n1. A lawyer may not acquire a proprietary interest in the cause of action or subject matter of\nlitigation that the lawyer is conducting for a client, except that the lawyer may:\na. acquire a lien to secure the lawyer\xe2\x80\x99s fee or expenses; and\nb. contract with a client for a contingent fee in a civil case except when prohibited.\n2. A lawyer may not make or guarantee a loan to a client in connection with pending or\ncontemplated litigation that the lawyer is conducting for the client, except that the lawyer\nmay make or guarantee a loan covering court costs and expenses of litigation, the\nrepayment of which to the lawyer may be contingent on the outcome of the matter.\n3. A lawyer may not, before the lawyer ceases to represent a client, make an agreement\ngiving the lawyer literary or media rights to a portrayal or account based in substantial\npart on information relating to the representation.\nSaladini v. Righellis, 426 Mass. 231 (1997)\nMARSHALL, J.\nThe plaintiff, Lisa Saladini, appeals from the decision of a judge in the Superior Court dismissing\nher complaint, sua sponte, on the ground that a written agreement she had with the defendant,\nGeorge P. Righellis, was champertous and unenforceable. Saladini had sought a declaratory\njudgment establishing her rights under the agreement. We granted Saladini\xe2\x80\x99s application for\ndirect appellate review to consider whether we should continue to enforce the doctrine. We rule\nthat the common law doctrines of champerty, barratry, and maintenance no longer shall be\nrecognized in Massachusetts. We reverse the judgment entered in the Superior Court and\nremand this case for further proceedings.\nI\nOn September 23, 1992, Saladini and Righellis entered into a written agreement pursuant to\nwhich Saladini agreed to advance funds to Righellis to allow him to pursue potential legal claims\nhe had arising out of his interest in real estate in Cambridge, known as Putnam Manor. In\nreturn, Righellis agreed that, if pursuit of his claims yielded any recovery, the first amount\nrecovered would be used to reimburse Saladini, and that Saladini would, in addition, receive\n50% of any net recovery remaining after payment of attorney\xe2\x80\x99s fees. Saladini, herself, had no\ninterest in Putnam Manor.\nSaladini thereafter advanced funds to Righellis that he used to retain an attorney under a\ncontingent fee agreement to bring a lawsuit and to pursue his legal claims. At some point\nRighellis became dissatisfied with that attorney\xe2\x80\x99s representation and, with the concurrence of\nSaladini, hired a new lawyer, Robert Potters, to replace him. Righellis signed a new contingent\nfee agreement with Potters.\nThe original agreement between Saladini and Righellis did not anticipate retaining a second\nattorney to represent Righellis in the Putnam Manor lawsuit. Saladini maintains that to deal with\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c129\nthis circumstance, she and Righellis agreed that each would pay one-half of the retainer\nrequired by Potters, each would pay one-half of the litigation disbursements, and that in all other\nrespects the terms of their original agreement would remain in effect. No new or amended\nagreement was executed, but Saladini did pay one-half of the retainer to Potters and one-half of\nthe litigation disbursements. All told, Saladini advanced a total of $19,229 to Righellis.\nAt some point Righellis settled the Putnam Manor lawsuit, with the defendants in that case\nagreeing to pay him $130,000. The first payment of $10,000 was paid on or about November 2,\n1994, with the balance due on January 11, 1995. Neither Potters nor Righellis informed Saladini\nthat a settlement had been reached, or that the first settlement funds had been received.\nWhen Saladini became aware of the settlement, she filed suit, seeking to establish her rights\nunder the agreement. She also sought, and a judge in the Superior Court granted, injunctive\nrelief, enjoining Righellis and Potters from disbursing any of the settlement funds until her claims\nhad been adjudicated.\nIn November, 1995, Righellis filed a motion for summary judgment that Saladini opposed. After\nreviewing the submissions of the parties, a judge in the Superior Court, sua sponte, invited both\nparties to submit memoranda on the issue whether the agreement between Saladini and\nRighellis was champertous. A hearing followed and, in September, 1996, another judge ruled\nthat the agreement was champertous and unenforceable as against public policy. She ordered\nthat Saladini\'s complaint be dismissed in its entirety. A judgment to that effect was entered on\nSeptember 24, 1996. Saladini appealed. A judge granted Saladini\xe2\x80\x99s motion to continue the\npreliminary injunction pending her appeal.\nII\nChamperty has been described as the unlawful maintenance of a suit, where a person without\nan interest in it agrees to finance the suit, in whole or in part, in consideration for receiving a\nportion of the proceeds of the litigation. We described the doctrine as a \xe2\x80\x9cnarrow and somewhat\ntechnical concept,\xe2\x80\x9d a type of maintenance that occurs when a person engages in \xe2\x80\x9cofficious\nintermeddling in a suit that no way belongs to one, by maintaining or assisting either party with\nmoney or otherwise, to prosecute or defend it.\xe2\x80\x9d\nThe doctrine has a long and, in this country, checkered history. The ancient prohibition against\nchamperty arose in feudal England. More recently the doctrine has been viewed as a check on\nfrivolous or unnecessary litigation, or a mechanism to encourage the settlement of disputes\nwithout recourse to litigation. The extent to which courts, here, accepted the doctrine has varied.\nIn some States, champerty was never adopted, or has been abandoned. In others, the doctrine\nwas given narrow application. Massachusetts followed the common law prohibition against\nchamperty, although we have never enforced the doctrine to the same extent as English\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c130\ncourts.34 Nevertheless, under our own development of the doctrine we have little doubt that the\nagreement between Saladini and Righellis would be champertous were we to continue to\nrecognize the offense. We no longer are inclined to do so.\nWe have long abandoned the view that litigation is suspect, and have recognized that\nagreements to purchase an interest in an action may actually foster resolution of a dispute. In\nmore recent cases we have questioned whether the doctrine continues to serve any useful\npurpose. In McInerney, we noted that \xe2\x80\x9cthe decline of champerty, maintenance, and barratry as\noffences is symptomatic of a fundamental change in society\xe2\x80\x99s view of litigation \xe2\x80\x94 from \xe2\x80\x98a social\nill, which, like other disputes and quarrels, should be minimized\xe2\x80\x99 to \xe2\x80\x98a socially useful way to\nresolve disputes.\xe2\x80\x99\xe2\x80\x9d In Christian v. Mooney, we declined to consider whether an agreement\nbetween a \xe2\x80\x9cbounty hunter in troubled titles\xe2\x80\x9d and other plaintiffs in a suit was champertous\nbecause that issue was not contested by the parties to the agreement \xe2\x80\x94 even though that\nplaintiff\'s repeated instigation of litigation regarding troubled real estate titles was the very\nconduct traditionally condemned as violative of the prohibition against champerty. Most recently,\nin Berman v. Linnane, we declined to strike down a contingent fee agreement that did not satisfy\nthe requirements of S.J.C. Rule 3:05 as champertous, relying rather on \xe2\x80\x9cthe public policy\nagainst the recovery of excessive fees\xe2\x80\x9d to limit the financial recovery by an attorney. We\nobserved in that case that \xe2\x80\x9cat least as to lawyers, other principles fulfil whatever purpose\nchamperty once had.\xe2\x80\x9d These decisions all reflect the change in our attitude toward the financing\nof litigation.\nWe also no longer are persuaded that the champerty doctrine is needed to protect against the\nevils once feared: speculation in lawsuits, the bringing of frivolous lawsuits, or financial\noverreaching by a party of superior bargaining position. There are now other devices that more\neffectively accomplish these ends. Our rule governing contingent fees between attorneys and\nclients is based on the principle that an attorney\xe2\x80\x99s fee must be reasonable. We also recognize a\npublic policy against the recovery of excessive fees. Additional devices include Mass. R. Civ. P.\n11, providing sanctions for misconduct, and G. L. c. 231, \xc2\xa7 6F, regulating the bringing of\nfrivolous lawsuits. General Laws c. 93A, and the doctrines of unconscionability, duress, and\ngood faith, establish standards of fair dealing between opposing parties. To the extent that we\ncontinue to have the concerns that the doctrine of champerty was thought to address, we\nconclude that it is better to do so directly, rather than attempting to mold an ancient doctrine to\nmodern circumstances.35 As Justice Holmes, then a member of this court, said a century ago: \xe2\x80\x9cIt\n\n34\n\nFor example, we consistently have held that it is not unlawful \xe2\x80\x9cto engage in the business of buying\nchoses in action and enforcing them by suit if necessary,\xe2\x80\x9d although under English common law\nassignments of choses in action are within the scope of champerty. We have not prohibited agreements\notherwise champertous where the party has an independent interest in the suit. We also have recognized\nthe validity of contingent fee arrangements with attorneys, which otherwise would be champertous.\n35\nThe doctrine of champerty may also be unworkable or have harsh results. Rather than punishing the\nowner of the legal claim who has entered into a champertous agreement, the doctrine bestows on him a\nwindfall. In this case, for example, Righellis would be permitted to retain the full benefit of the positive\nresult achieved in the Putnam Manor lawsuit, while he would not have to honor his obligations to Saladini,\nthe person whose support made pursuit of the lawsuit possible. A defendant sued in a champerty-\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c131\nis revolting to have no better reason for a rule of law than that so it was laid down in the time of\nHenry IV. It is still more revolting if the grounds upon which it was laid down have vanished long\nsince, and the rule simply persists from blind imitation of the past.\xe2\x80\x9d\nOther States that no longer recognize the doctrine of champerty have continued to scrutinize an\nagreement to finance a lawsuit with care. We shall do likewise. This means that if an agreement\nto finance a lawsuit is challenged, we will consider whether the fees charged are excessive or\nwhether any recovery by a prevailing party is vitiated because of some impermissible\noverreaching by the financier. Judges also retain their inherent power to disapprove an\nattorney\'s fee that is unreasonable. We shall be guided in our analysis by a rule of what is fair\nand reasonable, looking to all of the circumstances at the time the arrangement is made to\ndetermine whether the agreement should be set aside or modified. In this case, for example,\nhad the agreement been challenged, relevant factors might have included the respective\nbargaining position of the parties at the time the agreement was made, whether both parties\nwere aware of the terms and consequences of the agreement, whether Righellis may have been\nunable to pursue the lawsuit at all without Saladini\xe2\x80\x99s funds, and whether the claim by Righellis\nthat he will receive but $35,000 of the total $130,000 settlement award if Saladini prevails is\nunreasonable in the circumstances. We observe that before the judge raised the issue, Righellis\nhad never challenged the validity of his agreement with Saladini. The record before us does not\npermit any conclusion regarding the reasonableness of the agreement between Righellis and\nSaladini on the one hand, or Righellis and Potters on the other. We see no reason why Righellis\nshould be the beneficiary of any windfall, or why any adjustment to the financing arrangement\n\xe2\x80\x94 if appropriate at all \xe2\x80\x94 should be made solely at Saladini\'s expense. If pursued, those matters\ncan be decided by the trial judge.\nQuestions:\n1. On October 4, 2012, the website Gawker published a 2 minute excerpt from a 30 minute\nvideo of Terry Gene Bollea, better known as \xe2\x80\x9cHulk Hogan,\xe2\x80\x9d having sex with Heather\nClem, the wife of Bollea\xe2\x80\x99s friend Bubba the Love Sponge Clem. Bollea claimed the video\nwas made without his knowledge or consent, and filed an action against Gawker in\nFlorida state court, alleging an assortment of tort claims. The jury ruled in favor of Bollea,\nawarding him $115 million in compensatory damages and $25 million in punitive\ndamages. Gawker could not pay the judgment and filed for bankruptcy. After the trial,\nPeter Thiel disclosed that he had paid millions of dollars to finance Bollea\xe2\x80\x99s action, which\nhe described as \xe2\x80\x9cone of my greater philanthropic things that I\'ve done.\xe2\x80\x9d Many people\nobjected to Thiel\xe2\x80\x99s role in Bollea\xe2\x80\x99s action. Was it maintenance, champerty, or barratry?\nShould it have been prohibited?\n2. In 2003, residents of Lago Agrio, Ecuador filed a class action against Chevron in an\nEcuadorian court, alleging that its Lago Agrio oil field had polluted the environment. The\nplaintiffs were represented by the Ecuadorian lawyer Pablo Fajardo Mendoza and the\nAmerican lawyer Steven Donziger, who obtained more than $32 million in third-party\nsupported litigation may not assert the champerty as a defense, but a court may refuse to enforce a\nchampertous agreement even where the defense of champerty has not been asserted.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c132\nlitigation funding. The American documentary filmmaker Joe Berlinger documented the\nlitigation and released the film Crude in 2009. In 2011, the Ecuadorian court ruled for the\nplaintiffs and ordered Chevron to pay $18 billion in damages. Chevron\xe2\x80\x99s lawyers at\nGibson, Dunn & Crutcher LLP noticed that an early version of Crude had featured an\nostensibly impartial environmental expert meeting with Donziger before the trial, and\nsubpoenaed Berlinger\xe2\x80\x99s outtakes, which provided additional evidence of fraud and\ncorruption. In 2014, the United States District Court for the Southern District of New York\nfound that Donziger had used \xe2\x80\x9ccorrupt means\xe2\x80\x9d in the Ecuadorian court and refused to\nenforce the verdict, and the Second Circuit affirmed. Both New York and the District of\nColumbia suspended Donziger from the practice of law. Was it improper for Donziger to\nobtain third-party litigation funding? Did the availability of funding create improper\nincentives? Are third-party litigation funders in a position to evaluate the legitimacy of the\nlitigation they fund? Should they be?\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nMax Radin, Maintenance by Champerty, 24 Calif. L. Rev. 48 (1935)\nJeremy Kidd, Modelling the Likely Effects of Litigation Financing, 47 Loy. Chi. L.J. 1239\n(2016)\nAnthony J. Sebok, The Inauthentic Claim, 64 Vand. L. Rev. 61 (2011)\nJonathan T. Molot, A Market in Litigation Risk, 76 U. Chi. L. Rev. 367 (2009)\nMaya Steinitz, Whose Claim is This, Anyway? Third-Party Litigation Funding, 95 Minn. L.\nRev. 1268 (2011)\nVictoria Shannon Sahani, Reshaping Third Party Funding, 91 Tulane L. Rev. 405 (2017)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c133\n2.8: Organizations as Clients\nWe live as we dream, alone. To crack the shell we mix with the others.36\nYou pull down the future with the one you love (I see no evil).37\nWhen an attorney represents an organization, the attorney\xe2\x80\x99s client is typically the organization,\nand only the organization. An attorney may represent any kind of organization, irrespective of its\nform. Obviously, an attorney may represent an organization that is a legal entity, like a\ncorporation or a limited liability company. But an attorney may also represent an organization\nthat is not a legal entity, like a partnership or an unincorporated association. In all of these\ncases, the attorney may represent the organization without representing the constituents of the\norganization.\nBut an organization is a legal fiction that can act only through its agents. Accordingly, the\nattorney advises the organization by advising its agents, who make decisions on behalf of the\norganization, depending on their role in the organization. In other words, attorneys advise\norganizational clients by advising non-client agents, who make decisions that bind the\norganizational client.\nOf course, the agents of an organizational client may consult with each other before making\ndecisions for the organization. They may individually ask the attorney for advice about how to\nact on behalf of the organizational client. They may ask the attorney to advise them collectively\nabout the organizational client\xe2\x80\x99s options. And they may ask the attorney for advice about the\nstatements, decisions, and actions of other agents.\nThe attorney must provide legal advice to the agents of an organizational client, in their capacity\nas agents of that client. But the attorney must always remember that the client is the\norganization, not the organization\xe2\x80\x99s agent. When the attorney advises an agent, the attorney\nmust provide advice for the benefit of the organization, not the agent. And the attorney must\nensure that the agents observe their duties to the organization.\nSpecifically, an attorney representing an organizational client must ensure that its agents act\nconsistently with the interests of the organization, rather than their own interests. If an agent of\nan organizational client acts or refuses to act in a way that violates a legal obligation to the\norganization, then the attorney must act to protect the interests of the organization. The attorney\nshould generally report the concern to the management of the organization. In some cases, the\nattorney may even report confidential information or withdraw from representation, if it is\nnecessary to protect the interests of the organization.\nModel Rule 1.13: Organization as Client\na. A lawyer employed or retained by an organization represents the organization acting\nthrough its duly authorized constituents.\nb. If a lawyer for an organization knows that an officer, employee or other person\nassociated with the organization is engaged in action, intends to act or refuses to act in a\n36\n37\n\nGang of Four, We Live as We Dream, Alone, Songs of the Free (1984).\nTelevision, See No Evil, Marquee Moon (1977).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c134\n\nc.\n\nd.\n\ne.\n\nf.\n\ng.\n\nmatter related to the representation that is a violation of a legal obligation to the\norganization, or a violation of law that reasonably might be imputed to the organization,\nand that is likely to result in substantial injury to the organization, then the lawyer shall\nproceed as is reasonably necessary in the best interest of the organization. Unless the\nlawyer reasonably believes that it is not necessary in the best interest of the organization\nto do so, the lawyer shall refer the matter to higher authority in the organization,\nincluding, if warranted by the circumstances to the highest authority that can act on\nbehalf of the organization as determined by applicable law.\nExcept as provided in paragraph (d), if\n1. despite the lawyer\'s efforts in accordance with paragraph (b) the highest authority\nthat can act on behalf of the organization insists upon or fails to address in a\ntimely and appropriate manner an action, or a refusal to act, that is clearly a\nviolation of law, and\n2. the lawyer reasonably believes that the violation is reasonably certain to result in\nsubstantial injury to the organization, then the lawyer may reveal information\nrelating to the representation whether or not Rule 1.6 permits such disclosure,\nbut only if and to the extent the lawyer reasonably believes necessary to prevent\nsubstantial injury to the organization.\nParagraph (c) shall not apply with respect to information relating to a lawyer\'s\nrepresentation of an organization to investigate an alleged violation of law, or to defend\nthe organization or an officer, employee or other constituent associated with the\norganization against a claim arising out of an alleged violation of law.\nA lawyer who reasonably believes that he or she has been discharged because of the\nlawyer\'s actions taken pursuant to paragraphs (b) or (c), or who withdraws under\ncircumstances that require or permit the lawyer to take action under either of those\nparagraphs, shall proceed as the lawyer reasonably believes necessary to assure that\nthe organization\'s highest authority is informed of the lawyer\'s discharge or withdrawal.\nIn dealing with an organization\'s directors, officers, employees, members, shareholders\nor other constituents, a lawyer shall explain the identity of the client when the lawyer\nknows or reasonably should know that the organization\'s interests are adverse to those\nof the constituents with whom the lawyer is dealing.\nA lawyer representing an organization may also represent any of its directors, officers,\nemployees, members, shareholders or other constituents, subject to the provisions of\nRule 1.7. If the organization\'s consent to the dual representation is required by Rule 1.7,\nthe consent shall be given by an appropriate official of the organization other than the\nindividual who is to be represented, or by the shareholders.\n\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 96: Representing an Organization\nas Client\n1. When a lawyer is employed or retained to represent an organization:\na. the lawyer represents the interests of the organization as defined by its\nresponsible agents acting pursuant to the organization\'s decision-making\nprocedures; and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c135\nb. subject to Subsection (2), the lawyer must follow instructions in the\nrepresentation.\n2. If a lawyer representing an organization knows of circumstances indicating that a\nconstituent of the organization has engaged in action or intends to act in a way that\nviolates a legal obligation to the organization that will likely cause substantial injury to it,\nor that reasonably can be foreseen to be imputable to the organization and likely to\nresult in substantial injury to it, the lawyer must proceed in what the lawyer reasonably\nbelieves to be the best interests of the organization.\n3. In the circumstances described in Subsection (2), the lawyer may, in circumstances\nwarranting such steps, ask the constituent to reconsider the matter, recommend that a\nsecond legal opinion be sought, and seek review by appropriate supervisory authority\nwithin the organization, including referring the matter to the highest authority that can act\nin behalf of the organization.\nIn the Matter of Silva, 636 A.2d 316 (R.I. 1994)\nSummary: Attorney Daniel Silva represented both Medcon Mortgage Corporation and\nSuncoast Savings and Loan. Medcon was owned by Silva\xe2\x80\x99s friend Edward Medeiros.\nSilva learned that Medeiros was illegally diverting funds and advised him to stop, but did\nnot advise Suncoast, because Medeiros claimed attorney-client privilege. The\nDisciplinary Board found that Silva violated the rules of professional conduct, and the\nSupreme Court agreed, holding that Silva should have reported Medeiros\xe2\x80\x99s fraud and\nwithdrawn from representing Medcon and Suncoast.\nPER CURIAM.\nThe respondent, Daniel J. Silva, appeared before this court on December 2, 1993, pursuant to\nan order to show cause why discipline should not be imposed. The Disciplinary Board\nconducted an evidentiary hearing and received legal memoranda from the respondent and\ndisciplinary counsel. The board has filed with us its decision and a concurring opinion signed by\nthree members of the board.\nThe board found that Silva violated several provisions of the Rules of Professional Conduct\nwhen he failed to report a diversion of mortgage funds by his long-time friend Edward Medeiros.\nSilva served as counsel to Medeiros\xe2\x80\x99s mortgage company, Medcon Mortgage Corporation, and\nSuncoast Savings and Loan of Hollywood, Florida. In his capacity as closing attorney for\nSuncoast, Silva received wire transfers of mortgage proceeds in his client account. Upon receipt\nof the wire transfers from Suncoast, Silva simply turned the proceeds over to Medeiros and/or\nMEDCON for disbursement. In the fall of 1990 Silva learned that Medeiros had diverted funds\nfrom a closing funded by Suncoast in which Silva acted as closing attorney. The diverted funds\nwere designated to pay off a preexisting mortgage on the property. Silva advised Medeiros that\nhis conduct was criminal. Silva did not notify Suncoast of the diversion of funds, nor did he\ninform the title insurance company, which had issued a title policy that did not except the prior\nmortgage from coverage, that the prior mortgage had not been discharged. Silva testified that\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c136\nMedeiros forbade him to do so on the basis of Medeiros\'s assertion of the attorney/client\nprivilege on behalf of both MEDCON and himself personally.\nIn December 1990 Silva received a wire transfer from Suncoast for another closing with\nMEDCON. Notwithstanding his knowledge of the previous diversion of funds by Medeiros, Silva\ndid not disburse the funds in accordance with the terms listed on the closing sheet; instead, he\nturned the proceeds over to MEDCON. Silva kept $100 of the proceeds as his fee for serving as\na conduit of the funds. Medeiros converted those funds to his own use, and was subsequently\nconvicted and imprisoned. The respondent was never charged with committing a criminal act.\nThe respondent\xe2\x80\x99s position before the board and this court is that he was prohibited from\ndisclosing Medeiros\xe2\x80\x99s defalcation by the provisions of Rule 1.6 of the Rules of Professional\nConduct. Respondent also took the position that he had no obligation to protect Suncoast\xe2\x80\x99s\ninterests. We do not agree with either of his contentions.\nOn the basis of the record before us, we believe that Silva had an obligation to both MEDCON\nand Suncoast to ensure that the transactions in which he acted as attorney and/or agent were\ncarried out with fair dealing and good faith. We further believe that Silva had an obligation to\nreport Medeiros\xe2\x80\x99s overt act of diverting the funds as soon as he learned of it. In addition Silva\nshould have withdrawn from representing both MEDCON and Suncoast as soon as he\ndiscovered Medeiros\xe2\x80\x99s fraud.\nAlthough we consider Silva\xe2\x80\x99s failure to act appropriately and to make the requisite disclosures\nserious breaches of his ethical obligation, we find no evidence that Silva\xe2\x80\x99s actions were\nmotivated by personal gain. Rather, he appears to have had a genuine belief that Medeiros\xe2\x80\x99s\nassertion of the attorney/client privilege and the requirements of Rule 1.6 prohibited the\ndisclosure we now say was required.\nSilva did not appear to appreciate and understand to whom he owed the duty of confidentiality.\nIt is apparent from this record, however, that he was counsel to the corporate entity MEDCON,\nand therefore, it was to MEDCON he owed the duty of confidentiality. Silva\xe2\x80\x99s dealings with\nMedeiros did not establish the attorney/client relationship that would trigger the application of\nthe prohibitions against disclosure encompassed in Rule 1.6. Therefore, Silva\xe2\x80\x99s obligations to\nboth Suncoast and MEDCON required him to disclose Medeiros\xe2\x80\x99s overt criminal act of\nconversion of the funds.\nThis court concurs with the findings of the disciplinary board that Silva exercised very poor\njudgment and that he engaged in serious misconduct. We are constrained however to depart\nfrom the board\'s recommendation for sanction. We believe that Rule 1.6 has created a great\ndeal of confusion among the members of the Rhode Island Bar. We therefore censure Silva for\nhis failure to fulfill his ethical obligations to the parties to these transactions. The court\xe2\x80\x99s\nissuance of this sanction rather than the three-month suspension of Silva\xe2\x80\x99s license is due in part\nto the absence of any motive for personal gain and Silva\xe2\x80\x99s ten years at the bar without a\ndisciplinary complaint. The court\xe2\x80\x99s position on the appropriate level of sanction, however, would\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c137\nbe more severe were it not for the apparent confusion in the mind of this attorney concerning\nwhom he represented and the silence of Rule 1.6 on that question.\nQuestions:\n1. Medeiros owned Medcon. How could Silva have reported to Medcon?\n2. Could Silva have reasonably believed that he represented Medeiros?\n3. Did the court impose an appropriate punishment?\nRepresenting a Corporation\nBrennan v. Ruffner, 640 So. 2d 143 (Fla. 1994)\nSummary: In 1976, Dr. Brennan and Dr. Martell formed a professional association.\nAttorney Charles Ruffner prepared the shareholders agreement. When Dr. Mirmelli\njoined the association in 1982, Ruffner revised the agreement, which provided for the\ninvoluntary termination of any shareholder by majority vote. All of the shareholders\nagreed. In 1989, Martell and Mirmelli voted to terminate Brennan. Among other things,\nBrennan filed a malpractice action against Ruffner. The trial court granted summary\njudgment to Ruffner, and the appellate court affirmed, holding that Ruffner represented\nthe corporation, not Brennan.\nPARIENTE, Judge.\nWe affirm a final summary judgment entered in favor of a lawyer and against a disgruntled\nminority shareholder of a closely held corporation. We find that an attorney/client relationship\ndid not exist between the individual shareholder and the attorney representing the corporation.\nConsequently, there is no basis for a legal malpractice action. We further reject the other\ntheories of liability asserted by appellant.\nIn 1976, appellant, Robert J. Brennan, M.D., along with a Dr. Martell, employed appellee,\nCharles L. Ruffner, Esq., to incorporate their medical practice as a professional association. In\nconnection with the incorporation, the lawyer prepared a shareholder\xe2\x80\x99s agreement. In 1982, a\nthird doctor, Dr. Mirmelli, joined the corporation, and each doctor became a one-third\nshareholder in the new firm. The lawyer, who was corporate counsel since 1976, was requested\nto draft a new shareholder\'s agreement. After approximately 8 months of negotiation, the\nshareholders executed a new shareholder\'s agreement. The new agreement included a\nprovision for the involuntary termination of any shareholder by a majority vote of the two other\nshareholders. It is undisputed that Dr. Brennan was aware of this provision at the time he signed\nthe documents and that he signed the agreement upon reassurances from Dr. Mirmelli that he\nwould not join with Dr. Martell in using the provision against Dr. Brennan.\nHowever, despite the assurances, in 1989 Dr. Martell and Dr. Mirmelli involuntarily terminated\nDr. Brennan as a shareholder and employee of the corporation. Dr. Brennan instituted a lawsuit\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c138\nagainst Dr. Martell and Dr. Mirmelli claiming breach of contract and fraud in the inducement.\nThe verified complaint in that lawsuit specifically alleged that Dr. Brennan was not represented\nby counsel in the negotiation of the shareholder\'s agreement. That lawsuit was settled. Dr.\nBrennan then filed this suit for legal malpractice, breach of contract, breach of fiduciary duty and\nbreach of contract as a third party beneficiary. In contradiction to the sworn allegations of the\nfirst lawsuit, Dr. Brennan alleged in this complaint that the lawyer represented him individually,\nas well as the corporation, in the preparation and drafting of the agreement. The lawyer denied\nundertaking the representation of Dr. Brennan individually.\nIn a legal malpractice action, a plaintiff must prove three elements: the attorney\'s employment,\nthe attorney\'s neglect of a reasonable duty and that such negligence resulted in and was the\nproximate cause of loss to the plaintiff. Florida courts have uniformly limited attorney\'s liability\nfor negligence in the performance of their professional duties to clients with whom they share\nprivity of contract.\nThe material undisputed facts in this case support a legal conclusion that there was no privity of\ncontract between Dr. Brennan and the corporation\xe2\x80\x99s lawyer. It is undisputed that the lawyer was\nrepresenting the corporation. The issue raised by Dr. Brennan\'s complaint was whether the\nlawyer was also representing him individually. While Dr. Brennan made the initial contact with\nthe lawyer, there is no evidence in the record to create a credible issue of fact that the lawyer\never represented Dr. Brennan individually. Dr. Brennan\'s sworn complaint against the other\ndoctors, which preceded the legal malpractice action against the lawyer, states he was\nunrepresented by counsel in the negotiation of the shareholder\'s agreement.\nDr. Brennan argues that a separate duty to him as a shareholder arose by virtue of the lawyer\'s\nrepresentation of the closely held corporation. Although never squarely decided in this state, we\nhold that where an attorney represents a closely held corporation, the attorney is not in privity\nwith and therefore owes no separate duty of diligence and care to an individual shareholder\nabsent special circumstances or an agreement to also represent the shareholder individually.\nWhile there is no specific ethical prohibition in Florida against dual representation of the\ncorporation and the shareholder if the attorney is convinced that a conflict does not exist, an\nattorney representing a corporation does not become the attorney for the individual stockholders\nmerely because the attorney\'s actions on behalf of the corporation may also benefit the\nstockholders. The duty of an attorney for the corporation is first and foremost to the corporation,\neven though legal advice rendered to the corporation may affect the shareholders. Cases in\nother jurisdictions have similarly held.\nWe reject the notion that the lawyer in this case could be held liable to one of the minority\nshareholders for a breach of fiduciary duty. In any closely held corporation, there will be an\ninherent conflict between the potential rights of the minority shareholder and the rights of the\ncorporation in a shareholder\xe2\x80\x99s agreement concerning termination. At the time this agreement\nwas drafted, any one of the three shareholders could have ended up becoming the minority\nshareholder. While Dr. Brennan claimed in the complaint that the lawyer had a duty to advise\nhim of a conflict of interest and never advised him of a potential conflict, the facts in the record\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c139\ndo not support that contention. Dr. Brennan testified in deposition that he simply did not recall\nany conversations. However, the accountant for the corporation specifically remembered a\nconversation where the lawyer told the doctors collectively that he represented only the\ncorporation in the drafting of the shareholder agreement. Absent some evidence that the\ncorporation\'s lawyer conspired or acted with the two shareholders to insert provisions that would\nwork to the detriment of the third shareholder; that the corporation\xe2\x80\x99s lawyer concealed his\nrepresentation of another individual shareholder; or that the attorney agreed to the dual\nrepresentation, there is no breach of fiduciary duty established in this case.\nFinally, even assuming arguendo that a duty existed based on an attorney/client relationship, a\nthird party beneficiary theory or a breach of fiduciary relationship, we simply do not find any\nfactual dispute concerning the issue of proximate cause. It is undisputed that Dr. Brennan was\naware of the provisions in the agreement and chose to take his chances upon being reassured\nby Dr. Mirmelli that he would never use the provisions against Dr. Brennan.\nQuestions:\n1. Why did the court hold that Ruffner represented the corporation, rather than Brennan?\nWhat if Brennan were a majority shareholder of the corporation?\n2. Did Ruffner provide Brennan with legal advice? If so, did Ruffner provide negligent legal\nadvice?\n3. Did Ruffner represent any of the doctors?\n4. Did Ruffner represent anyone?\nRepresenting a Partnership\nMursau Corp. v. Florida Penn Oil & Gas, Inc., 638 F. Supp. 259 (W.D. Pa. 1986)\nSummary: Thomas Murray owned Mursau Corporation, which purchased a limited\npartnership in Florida-Penn Oil and Gas, Inc., in a deal managed by Goldberg &\nSnodgrass. Mursau filed a breach of fiduciary duty action against G&S, but the district\ncourt granted summary judgment to G&S, because it found no attorney-client\nrelationship or evidence of fraud.\nCOHILL, Chief Judge.\nPresently before us are Motions for Summary Judgment filed on behalf of each Defendant.\nHaving held oral argument and having reviewed the affidavits, depositions, briefs and other\nexhibits filed, we find no genuine issue as to any material fact. Consequently, we will grant\nthese motions.\nFacts\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c140\nPlaintiff, Mursau Corporation, through its President and majority stockholder, Thomas H.\nMurray, Esquire, purchased a limited partnership interest in Defendant Florida-Penn Oil & Gas,\nInc.\xe2\x80\x99s 1981-102 Drilling Program. Defendant Christian E. Carlsen is the President of Fla-Penn\nand Defendant David Graham is a stockholder of Fla-Penn. Defendant Goldberg & Snodgrass,\na law firm in which individual Defendants Lee H. Goldberg and Stewart R. Snodgrass are\npartners, was retained by Fla-Penn to structure the 102 program and prepare a tax opinion\nletter with regard to that program.\nMursau\xe2\x80\x99s acquisition of the limited partnership interest in the 102 program came about as a\nresult of Murray contacting Goldberg in early October, 1981. Murray was interested in the 102\nprogram as a tax shelter for Mursau. Since Mursau\xe2\x80\x99s fiscal year ended on October 31, Murray\nwanted to close the deal on or before October 30, in order to secure tax advantages for Mursau\nin 1981.\nAt his initial meeting with G&S, Murray was given a copy of a Private Placement Memorandum\nfor an earlier Fla-Penn oil and gas partnership, the 101 program. He was told that the PPM for\nthe 102 program would be materially similar but that the costs would be reduced proportionally\naccording to the lesser number of wells to be drilled under the 102 program. The 101 program\ndrilled 10 wells; the 102 program would drill only 4. Murray reviewed the PPM for the 101\nprogram with independent counsel, then signed a commitment letter for the 102 program.\nOn October 29, 1981, Murray received a copy of the PPM for the 102 program which was in fact\nmaterially similar to the PPM for the 101 program. At the closing on October 30, 1981, Murray\nrefused to tender a check on behalf of Mursau unless he was granted check-signing authority\nfor the partnership, a demand clearly in conflict with the limited partnership agreement already\nsigned by Murray. Murray wanted that authority so that, after closing, he could dispute the\npayment of certain costs provided for in the PPM, including a finder\'s commission to the group\nsecuring the limited partners participation. As indicated by his notes comparing the costs under\nthe 101 and 102 program, Murray was fully aware of the $49,600 finder\'s commission prior to\nthe time set for closing.\nAlthough Murray initially walked out of the closing because of the refusal of Fla-Penn to\nacquiesce in his demands, he returned after a conversation with Snodgrass outside on the\nsidewalk. Fla-Penn never acceded to Murray\xe2\x80\x99s demands. After the closing, Fla-Penn paid G&S\n$20,000 for legal fees and $49,600 as a finder\xe2\x80\x99s commission. Murray became aware of these\npayments sometime in December of 1981.\nIn the complaint, Murray essentially alleges breach of fiduciary duty arising out of an attorneyclient relationship between Mursau and G&S and Goldberg and Snodgrass individually.\nThe Defendants maintain that the 102 PPM as well as the 101 PPM, on which the 102 was\nmodeled, disclose all material information. Both PPMs disclose the payment of legal fees to\nG&S and the finder\'s commission; both disclose the potential conflict of interest of G&S as\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c141\ncounsel for the partnership and the general partner. Both advise prospective limited partners to\nconsult independent counsel.\nIn order to recover for a breach of fiduciary duty by an attorney, the plaintiff has a threshold\nburden of showing existence of an attorney-client relationship. The intent to create an attorneyclient relation can be implied from the conduct of the parties where no express relationship\nexists.\nAlthough the relationship of attorney and client may be implied from the conduct of the parties,\nsuch conduct must evidence an offer or request by the client for legal services and an\nacceptance of the offer by the attorney. It is clear that an attorney client relationship exists only\nwith the consent of both parties.\nAs noted above, G&S\xe2\x80\x99s representation of the partnership and general partner was disclosed to\nPlaintiff, and Plaintiff was advised to obtain independent counsel. Murray admits that he did\nretain legal counsel who, on behalf of Mursau, met with G&S about the 102 plan. Murray\nreceived a bill and remitted payment to his independent counsel for legal services.\nIn contrast, Plaintiff paid no fees to G&S. As stated in the 102 PPM, the partnership paid G&S\nfor adapting the 101 PPM for use in the 102 plan and for preparing the tax opinion letter to\naccompany the 102 PPM. The legal fees paid to G&S by the partnership did not include any\namount for services rendered to the Plaintiff. Plaintiff concedes that the only legal advice he\nreceived from G&S concerned the tax aspects of the 102 plan. We conclude that the legal\nadvice on the tax consequences of the 102 plan was a service provided to and paid for by the\npartnership as part of its efforts to secure a limited partner for its venture.\nSince we see no evidence from which we can imply an offer or request for services by Plaintiff,\nnor an acceptance of any such request by G&S, we must conclude that no attorney-client\nrelationship was formed between Mursau, the limited partnership, and G&S. G&S did have an\nattorney-client relationship with the partnership and probably the general partner who organized\nthe venture. Although Mursau indirectly benefited by receiving the services G&S performed on\nbehalf of the partnership to enable the partnership to attract a limited partner, it never\nrequested, nor did it receive, other legal advice or services from G&S.\nEven were we to find evidence from which an attorney-client relationship between G&S and\nMursau could be inferred, as discussed above, we see no facts indicating any fraud or other\nbreach tending to violate such a relationship.\nViewing the facts presented in a light most favorable to Mursau, the nonmoving party, we\nbelieve Defendants have met their burden of showing the absence of any genuine issue of\nmaterial fact and are entitled to summary judgment.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c142\n1. Did Mursau have any attorney-client relationship with G&S?\n2. Did Mursau pay G&S for legal services?\n3. Why did the court conclude that Mursau had no attorney-client relationship with G&S in\nrelation to this matter?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c143\n2.9: Agents as Clients\nThere\'s nothing wrong with having aspirations, nothing wrong with walking tall. But if misfortune\ndeals the consequences, sooner or later, friend, you\xe2\x80\x99ve got to fall.38\nIn theory, an attorney who represents an organization represents only the organization, and\ndoes not represent the organization\xe2\x80\x99s agents. However, organizations can act only through their\nagents, and when attorneys represent organizations, they do so by providing legal advice to the\norganization\xe2\x80\x99s agents, who made decisions on behalf of the organization. Attorneys must\nconvince the organization\xe2\x80\x99s agents to hire them. Attorneys must convince the organization\xe2\x80\x99s\nagents to follow their advice. And attorneys must obey the decisions of the organization\xe2\x80\x99s\nagents. It is easy for attorneys representing an organization to see its agents as their clients,\nrather than the organization itself.\nBut that is a terrible mistake. When attorneys represent organizations, they must never treat its\nagents as their clients. They must always represent the interests of the organization, and only\nthe organization. Attorneys representing an organization must always act in the best interest of\nthe organization, and they must ensure that its agents also act in the best interests of the\norganization. And if the interests of the organization conflict with the interests of its agents, the\nattorney must always pursue the interests of the organization.\nUsually, the interests of an organization and its agents coincide, and the agents pursue the\ninterests of the organization to the best of their ability. But that is not always the case.\nSometimes, the interests of an organization and its agents diverge, and the agents pursue their\nown interests, at the expense of the organization.\nAttorneys representing organizations must always be vigilant to ensure that the organization\xe2\x80\x99s\ninterests are aligned with the interests of its agents, and that its agents are acting in the\norganization\xe2\x80\x99s interests, rather than their own. For example, if an agent wants to make a\ntransaction on behalf of the organization that will benefit the agent at the organization\xe2\x80\x99s\nexpense, the attorney must object. Likewise, if the agent wants to disclose confidential\ninformation about the organization that will benefit the agent, but harm the organization, the\nattorney must object.\nAgents as Quasi-Clients\nAttorneys representing an organization must always be careful to ensure that its agents do not\nbecome quasi-clients. If an attorney is retained by an organization, then the attorney has an\nexpress attorney-client relationship with the organization. But in order to represent an\norganization, an attorney must provide legal advice to its agents, who will act on the\norganization\xe2\x80\x99s behalf. Accordingly, the attorney must only provide legal advice relating to the\ninterests of the organization, and must not provide legal advice relating to the interests of its\n38\n\nH\xc3\xbcsker D\xc3\xbc, Friend, You\'ve Got to Fall, Warehouse: Songs and Stories (1987).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c144\nagents. In fact, attorneys representing an organization should explicitly inform its agents that\nthey represent the organization, and not its agents. And they should advise the organization\xe2\x80\x99s\nagents to seek outside counsel, if their interests may diverge from the interests of the\norganization.\nIn theory, an attorney representing an organization who wants to interview an agent of the\norganization can prevent the agent from becoming a client by explicitly warning the agent that\nthe attorney represents the organization, and does not represent the agent. This warning is\noften called an \xe2\x80\x9cUpjohn warning\xe2\x80\x9d or \xe2\x80\x9ccorporate Miranda warning,\xe2\x80\x9d because its purpose is to\ninform agents of their right to remain silent. After all, an organization cannot force its agents to\ntestify against themselves. But it can fire them, if they refuse to participate in an investigation.\nIf an attorney representing an organization provides legal advice to an agent of that\norganization, then the agent may become a quasi-client of the attorney. That is awkward,\nbecause it can create a conflict of interest.\nAmerican Bar Association White Collar Crime Committee Working Group\nModel \xe2\x80\x9cUpjohn Warning\xe2\x80\x9d or \xe2\x80\x9cCorporate Miranda\xe2\x80\x9d Warning\nI am a lawyer for Corporation A. I represent only Corporation A, and I do not represent\nyou personally.\nI am conducting this interview to gather facts in order to provide legal advice for\nCorporation A. This interview is part of an investigation to determine the facts and\ncircumstances of X in order to advise Corporation A how best to proceed.\nYour communications with me are protected by the attorney-client privilege. But the\nattorney-client privilege belongs solely to Corporation A, not you. That means\nCorporation A alone may elect to waive the attorney-client privilege and reveal our\ndiscussion to third parties. Corporation A alone may decide to waive the privilege and\ndisclose this discussion to such third parties as federal or state agencies, at its sole\ndiscretion, and without notifying you.\nIn order for this discussion to be subject to the privilege, it must be kept in confidence. In\nother words, with the exception of your own attorney, you may not disclose the\nsubstance of this interview to any third party, including other employees or anyone\noutside of the company. You may discuss the facts of what happened but you may not\ndiscuss this discussion.\nDo you have any questions?\nAre you willing to proceed?\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c145\n\n1. Does this model warning adequately explain that the attorney represents the\norganization and not its agents?\n2. If you were an attorney representing an organization, would you have any concerns\nabout this warning?\n3. If you received this warning, would you answer any questions? Would you give candid\nanswers? Would you obtain outside counsel? What if you were unaware of the subject\nmatter of the inquiry?\nIn re Grand Jury Subpoena: Under Seal, 415 F. 3d 334 (4th Cir. 2005)\nSummary: AOL started an internal investigation re: its relationship with PurchasePro.\nAOL retained Wilmer, Cutler & Pickering to assist in the investigation. AOL general\ncounsel told its employees that were interviewed that the GC represented the company,\nbut could represent them if there was no conflict of interest. GC also told the employees\nthat they could retain personal counsel at company expense. The SEC began to\ninvestigate AOL\xe2\x80\x99s relationship with PurchasePro. One employee, Wakeford, was\ndeposed by SEC and believed the attorneys represented both them and the company.\nOthers, John Doe #1, #2, that were deposed sought independent counsel. The court\ndenied Wakeford\xe2\x80\x99s motion to quash because it found that attorney-client privilege in the\nsubpoenaed documents belonged only to AOL.\nWILSON, District Judge.\nThis is an appeal by three former employees of AOL Time Warner from the decision of the\ndistrict court denying their motions to quash a grand jury subpoena for documents related to an\ninternal investigation by AOL. Appellants in the district court that the subpoenaed documents\nwere protected by the attorney-client privilege. Because the district court concluded that the\nprivilege was AOL\xe2\x80\x99s alone and because AOL had expressly waived its privilege, the court\ndenied the appellants\' motion. We affirm.\nI.\nIn March of 2001, AOL began an internal investigation into its relationship with PurchasePro,\nInc. AOL retained the law firm of Wilmer, Cutler & Pickering to assist in the investigation. Over\nthe next several months, AOL\xe2\x80\x99s general counsel and counsel from Wilmer Cutler interviewed\nappellants, AOL employees Kent Wakeford, John Doe 1, and John Doe 2.\nThe investigating attorneys interviewed Wakeford, a manager in the company\xe2\x80\x99s Business Affairs\ndivision, on six occasions. At their third interview, and the first one in which Wilmer Cutler\nattorneys were present, Randall Boe, AOL\xe2\x80\x99s General Counsel, informed Wakeford, \xe2\x80\x9cWe\nrepresent the company. These conversations are privileged, but the privilege belongs to the\ncompany and the company decides whether to waive it. If there is a conflict, the attorney-client\nprivilege belongs to the company.\xe2\x80\x9d Memoranda from that meeting also indicate that the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c146\nattorneys explained to Wakeford that they represented AOL but that they \xe2\x80\x9ccould\xe2\x80\x9d represent him\nas well, \xe2\x80\x9cas long as no conflict appeared.\xe2\x80\x9d The attorneys interviewed Wakeford again three days\nlater and, at the beginning of the interview, reiterated that they represented AOL, that the\nprivilege belonged to AOL, and that Wakeford could retain personal counsel at company\nexpense.\nThe investigating attorneys interviewed John Doe 1 three times. Before the first interview, Boe\ntold him, \xe2\x80\x9cWe represent the company. These conversations are privileged, but the privilege\nbelongs to the company and the company decides whether to waive it. You are free to consult\nwith your own lawyer at any time.\xe2\x80\x9d Memoranda from that interview indicate that the attorneys\nalso told him, \xe2\x80\x9cWe can represent you until such time as there appears to be a conflict of interest,\nbut the attorney-client privilege belongs to AOL and AOL can decide whether to keep it or waive\nit.\xe2\x80\x9d At the end of the interview, John Doe 1 asked if he needed personal counsel. A Wilmer\nCutler attorney responded that he did not recommend it, but that he would tell the company not\nto be concerned if Doe retained counsel.\nAOL\xe2\x80\x99s attorneys interviewed John Doe 2 twice and followed essentially the same protocol they\nhad followed with the other appellants. They noted, \xe2\x80\x9cWe represent AOL, and can represent you\ntoo if there is not a conflict.\xe2\x80\x9d In addition, the attorneys told him that, \xe2\x80\x9cthe attorney-client privilege\nis AOL\xe2\x80\x99s and AOL can choose to waive it.\xe2\x80\x9d\nIn November, 2001, the Securities and Exchange Commission began to investigate AOL\xe2\x80\x99s\nrelationship with PurchasePro. In December 2001, AOL and Wakeford, through counsel,\nentered into an oral \xe2\x80\x9ccommon interest agreement,\xe2\x80\x9d which they memorialized in writing in\nJanuary 2002. The attorneys acknowledged that, \xe2\x80\x9crepresentation of their respective clients\nraised issues of common interest to their respective clients and that the sharing of certain\ndocuments, information, and communications with clients\xe2\x80\x9d would be mutually beneficial. As a\nresult, the attorneys agreed to share access to information relating to their representation of\nWakeford and AOL, noting that \xe2\x80\x9cthe oral or written disclosure of Common Interest Materials\nwould not diminish in any way the confidentiality of such Materials and would not constitute a\nwaiver of any applicable privilege.\xe2\x80\x9d\nWakeford testified before the SEC on February 14, 2002, represented by his personal counsel.\nLaura Jehl, AOL\xe2\x80\x99s general counsel, and F. Whitten Peters of Williams & Connolly, whom AOL\nhad retained in November 2001 in connection with the PurchasePro investigation, were also\npresent, and both stated that they represented Wakeford \xe2\x80\x9cfor purposes of the deposition.\xe2\x80\x9d\nDuring the deposition, the SEC investigators questioned Wakeford about his discussions with\nAOL\xe2\x80\x99s attorneys. When Wakeford\xe2\x80\x99s attorney asserted the attorney-client privilege, the SEC\ninvestigators followed up with several questions to determine whether the privilege was\napplicable to the investigating attorneys\xe2\x80\x99 March-June 2001 interviews with Wakeford. Wakeford\ntold them he believed, at the time of the interviews, that the investigating attorneys represented\nhim and the company.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c147\nJohn Doe 1 testified before the SEC on February 27, 2002, represented by personal counsel.\nNo representatives of AOL were present. When SEC investigators questioned Doe about the\nMarch-June 2001 internal investigation, his counsel asserted that the information was protected\nand directed Doe not to answer any questions about the internal investigation \xe2\x80\x9cin respect to the\ncompany\xe2\x80\x99s privilege.\xe2\x80\x9d He stated that Doe\xe2\x80\x99s response could be considered a waiver of the\nprivilege and that, \xe2\x80\x9cif the AOL lawyers were present, they could make a judgment, with respect\nto the company\'s privilege, about whether or not the answer would constitute a waiver.\xe2\x80\x9d\nOn February 26, 2004, a grand jury in the Eastern District of Virginia issued a subpoena\ncommanding AOL to provide \xe2\x80\x9cwritten memoranda and other written records reflecting interviews\nconducted by attorneys for AOL\xe2\x80\x9d of the appellants between March 15 and June 30, 2001. While\nAOL agreed to waive the attorney-client privilege and produce the subpoenaed documents,\ncounsel for the appellants moved to quash the subpoena on the grounds that each appellant\nhad an individual attorney-client relationship with the investigating attorneys, that his interviews\nwere individually privileged, and that he had not waived the privilege. Wakeford also claimed\nthat the information he disclosed to the investigating attorneys was privileged under the\ncommon interest doctrine.\nThe district court denied John Doe 1\xe2\x80\x99s and John Doe 2\xe2\x80\x99s motions because it found they failed to\nprove they were clients of the investigating attorneys who interviewed them. The court based its\nconclusion on its findings that: (1) the investigating attorneys told them that they represented the\ncompany; (2) the investigating attorneys told them, \xe2\x80\x9cwe can represent you,\xe2\x80\x9d which is distinct\nfrom \xe2\x80\x9cwe do represent you\xe2\x80\x9d; (3) they could not show that the investigating attorneys agreed to\nrepresent them; and (4) the investigating attorneys told them that the attorney-client privilege\nbelonged to the company and the company could choose to waive it.\nThe court initially granted Wakeford\xe2\x80\x99s motion to quash because it found that his communications\nwith the investigating attorneys were privileged under the common interest agreement between\ncounsel for Wakeford and counsel for AOL. Following a motion for reconsideration, the court\nreversed its earlier ruling and held that the subpoenaed documents relating to Wakeford\xe2\x80\x99s\ninterviews were not privileged because it found that Wakeford\xe2\x80\x99s common interest agreement\nwith AOL postdated the March-June 2001 interviews. In addition, the court held that Wakeford\nfailed to prove that he was a client of the investigating attorneys at the time the interviews took\nplace. The court based its conclusion on its findings that: (1) none of the investigating attorneys\nunderstood that Wakeford was seeking personal legal advice; (2) the investigating attorneys did\nnot provide any personal legal advice to him; and (3) the investigating attorneys believed they\nrepresented AOL and not Wakeford. This appeal followed.\nII.\nAppellants argue that because they believed that the investigating attorneys who conducted the\ninterviews were representing them personally, their communications are privileged. However,\nwe agree with the district court that essential touchstones for the formation of an attorney-client\nrelationship between the investigating attorneys and the appellants were missing at the time of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c148\nthe interviews. There is no evidence of an objectively reasonable, mutual understanding that the\nappellants were seeking legal advice from the investigating attorneys or that the investigating\nattorneys were rendering personal legal advice. Nor, in light of the investigating attorneys\xe2\x80\x99\ndisclosure that they represented AOL and that the privilege and the right to waive it were AOL\xe2\x80\x99s\nalone, do we find investigating counsel\xe2\x80\x99s hypothetical pronouncement that they could represent\nappellants sufficient to establish the reasonable understanding that they were representing\nappellants. Accordingly, we find no fault with the district court\'s opinion that no individual\nattorney-client privilege attached to the appellants\xe2\x80\x99 communications with AOL\'s attorneys.\n\xe2\x80\x9cThe attorney-client privilege is the oldest of the privileges for confidential communications\nknown to the common law.\xe2\x80\x9d \xe2\x80\x9cWhen the privilege applies, it affords confidential communications\nbetween lawyer and client complete protection from disclosure.\xe2\x80\x9d Because its application\ninterferes with \xe2\x80\x9cthe truth seeking mission of the legal process,\xe2\x80\x9d however, we must narrowly\nconstrue the privilege, and recognize it \xe2\x80\x9conly to the very limited extent that excluding relevant\nevidence has a public good transcending the normally predominant principle of utilizing all\nrational means for ascertaining the truth.\xe2\x80\x9d Accordingly, the privilege applies only to \xe2\x80\x9cconfidential\ndisclosures by a client to an attorney made in order to obtain legal assistance.\xe2\x80\x9d The burden is on\nthe proponent of the attorney-client privilege to demonstrate its applicability.\xe2\x80\x9d\nThe person seeking to invoke the attorney-client privilege must prove that he is a client or that\nhe affirmatively sought to become a client. \xe2\x80\x9cThe professional relationship hinges upon the\nclient\'s belief that he is consulting a lawyer in that capacity and his manifested intention to seek\nprofessional legal advice.\xe2\x80\x9d An individual\xe2\x80\x99s subjective belief that he is represented is not alone\nsufficient to create an attorney-client relationship. Rather, the putative client must show that his\nsubjective belief that an attorney-client relationship existed was reasonable under the\ncircumstances.\nWith these precepts in mind, we conclude that appellants could not have reasonably believed\nthat the investigating attorneys represented them personally during the time frame covered by\nthe subpoena. First, there is no evidence that the investigating attorneys told the appellants that\nthey represented them, nor is there evidence that the appellants asked the investigating\nattorneys to represent them. To the contrary, there is evidence that the investigating attorneys\nrelayed to Wakeford the company\'s offer to retain personal counsel for him at the company\'s\nexpense, and that they told John Doe 1 that he was free to retain personal counsel. Second,\nthere is no evidence that the appellants ever sought personal legal advice from the investigating\nattorneys, nor is there any evidence that the investigating attorneys rendered personal legal\nadvice. Third, when the appellants spoke with the investigating attorneys, they were fully\napprised that the information they were giving could be disclosed at the company\xe2\x80\x99s discretion.\nUnder these circumstances, appellants could not have reasonably believed that the\ninvestigating attorneys represented them personally. Therefore, the district court\xe2\x80\x99s finding that\nappellants had no attorney-client relationship with the investigating attorneys is not clearly\nerroneous.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c149\nThe appellants argue that the phrase \xe2\x80\x9cwe can represent you as long as no conflict appears,\xe2\x80\x9d\nmanifested an agreement by the investigating attorneys to represent them. They claim that, \xe2\x80\x9cit is\nhard to imagine a more straightforward assurance of an attorney-client relationship than \xe2\x80\x98we can\nrepresent you.\xe2\x80\x99\xe2\x80\x9d We disagree. As the district court noted, \xe2\x80\x9cwe can represent you\xe2\x80\x9d is distinct from\n\xe2\x80\x9cwe do represent you.\xe2\x80\x9d If there was any evidence that the investigating attorneys had said, \xe2\x80\x9cwe\ndo represent you,\xe2\x80\x9d then the outcome of this appeal might be different. Furthermore, the\nstatement actually made, \xe2\x80\x9cwe can represent you,\xe2\x80\x9d must be interpreted within the context of the\nentire warning. The investigating attorneys\xe2\x80\x99 statements to the appellants, read in their entirety,\ndemonstrate that the attorneys\xe2\x80\x99 loyalty was to the company. That loyalty was never implicitly or\nexplicitly divided. In addition to noting at the outset that they had been retained to represent\nAOL, the investigating attorneys warned the appellants that the content of their communications\nduring the interview \xe2\x80\x9cbelonged\xe2\x80\x9d to AOL. This protocol put the appellants on notice that, while\ntheir communications with the attorneys were considered confidential, the company could\nchoose to reveal the content of those communications at any time, without the appellants\xe2\x80\x99\nconsent.\nWe note, however, that our opinion should not be read as an implicit acceptance of the watereddown \xe2\x80\x9cUpjohn warnings\xe2\x80\x9d the investigating attorneys gave the appellants. It is a potential legal\nand ethical mine field. Had the investigating attorneys, in fact, entered into an attorney-client\nrelationship with appellants, as their statements to the appellants professed they could, they\nwould not have been free to waive the appellants\xe2\x80\x99 privilege when a conflict arose. It should have\nseemed obvious that they could not have jettisoned one client in favor of another. Rather, they\nwould have had to withdraw from all representation and to maintain all confidences. Indeed, the\ncourt would be hard pressed to identify how investigating counsel could robustly investigate and\nreport to management or the board of directors of a publicly-traded corporation with the\nnecessary candor if counsel were constrained by ethical obligations to individual employees.\nHowever, because we agree with the district court that the appellants never entered into an\nattorney-client relationship with the investigating attorneys, they averted these troubling issues.\nQuestions:\n1. Why did the court hold that no attorney-client relationship existed? Do you agree with its\nconclusion?\n2. What information should an attorney representing an organization be required to provide\nto the agents of that organization in order to ensure that the agents understand that the\nattorney represents the organization, and does not represent them?\n3. Does it make sense for attorneys representing an organization to say they can represent\nan agent of the organization unless there is a conflict?\nUnited States v. Stein, 463 F. Supp. 2d 459 (S.D.N.Y. 2006)\nSummary: Warley was a partner at KPMG. She was questioned in course of IRS\ninvestigation by attorneys hired by KPMG. The firm waived its attorney-client privilege\nand gave the government documents that described attorney\xe2\x80\x99s communication with\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c150\nWarley. Warley says the attorneys were representing her and KPMG and her attorneyclient privilege was compromised by the actions of KPMG and the evidence should be\nsuppressed. Evidence suggests there was no Upjohn warning. Warley\xe2\x80\x99s showing of her\nsubjective belief that the attorneys represented her is insufficient to meet her burden of\nproving privilege. Thus, the court denied Warley\xe2\x80\x99s motion for relief from the\ngovernment\xe2\x80\x99s alleged violation of her attorney-client privilege.\nKAPLAN, District Judge.\nDefendant Carol Warley was a partner in KPMG LLP, one of the world\xe2\x80\x99s largest accounting\nfirms. She was questioned in the course of an IRS investigation by attorneys hired by KPMG.\nWhen that investigation gave way to a threatened indictment of KPMG, the firm, in an effort to\ncurry favor with prosecutors and avoid prosecution, waived its attorney-client privilege and gave\nthe government documents embodying the substance of the attorneys\xe2\x80\x99 communications with\nMs. Warley. Warley contends that the attorneys were representing her as well as KPMG, that\nher attorney-client privilege was compromised by the actions of the government and KPMG, and\nthat the evidence should be suppressed. She thus raises a troublesome question that arises\nwhenever an employee of a business organization consults with counsel retained by the entity\nabout matters involving both the employee and the entity \xe2\x80\x94 when does the lawyer represent the\nemployee as well as the entity?\nThis problem could be avoided if counsel in these situations routinely made clear to employees\nthat they represent the employer alone and that the employee has no attorney-client privilege\nwith respect to his or her communications with employer-retained counsel. Indeed, the Second\nCircuit advised that they do so years before the communications here in question. But there is\nno evidence that the attorneys who spoke to Ms. Warley followed that course.\nFacts\nMs. Warley was a partner of KPMG at all relevant times. In 2003, the IRS was investigating\nKPMG\xe2\x80\x99s tax shelter activities, including some in which clients of Warley had participated. In the\ncourse of the investigation, Warley communicated with KPMG\xe2\x80\x99s in-house counsel and with two\nlaw firms retained by KPMG, Kronish Lieb Weiner & Hellman LLP and King & Spalding LLP.\nWarley does not recall having been told that the attorneys represented only KPMG or that any\nprivilege belonged solely to the firm and could be waived by the firm without her consent.\nIn September 2004, in circumstances that have been discussed elsewhere, KPMG waived its\nattorney-client privilege for communications relating to the IRS summons. It gave the\ngovernment documents relating to these communications, and the government apparently\nintends to use them in prosecuting Warley and others. The government argues that KPMG\'s\nwaiver was sufficient to allow it to obtain the documents and disputes Warley\'s claim of\nprivilege.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c151\nWarley identifies two sets of allegedly privileged communications relating to which the\ngovernment has documents. First, Warley was interviewed by attorneys from Kronish and King\n& Spalding on two occasions in August 2003. The government is in possession of a\nmemorandum of these interviews prepared by a Kronish attorney as well as his handwritten\nnotes. In addition, it has listed as a trial witness one of the Kronish attorneys present at these\ninterviews.\nThe second allegedly privileged communication is an email exchange in January and February\nof 2003 between Warley and Steven Gremminger, an in-house attorney for KPMG, relating to\nthe tax strategies under investigation. The government has a copy of this email string.\nBoth parties point to the substance of the communications to support their respective claims that\nprivilege did or did not attach. Warley further relies upon KPMG\xe2\x80\x99s 2003 partnership agreement,\nwhich provided that \xe2\x80\x9cthe General Counsel shall act on behalf of all Members, except where a\ndispute arises between an individual Member and the Firm.\xe2\x80\x9d Finally, Warley alleges that counsel\nretained by KPMG jointly represented KPMG and her personally in two lawsuits prior to the\nevents at issue here.\nDiscussion\nA. Scope of Privilege\nThe question whether employee communications with counsel retained by the employer about\nmatters relating to the employment are privileged vis-a-vis the employee \xe2\x80\x94 in other words,\nwhether the employee has a personal attorney-client privilege that only the employee may\nwaive \xe2\x80\x94 is troublesome because competing interests are at play.\nOn the one hand, an employee, like any other agent, owes the employer a duty to disclose to\nthe employer any information pertinent to the employment. This includes an obligation \xe2\x80\x9cto assist\nthe employer\'s counsel in the investigation and defense of matters pertaining to the employer\xe2\x80\x99s\nbusiness.\xe2\x80\x9d Moreover, an employer has a substantial interest in retaining freedom of action to\nrespond to investigations and other legal threats, an interest borne of the desire to remain in\nbusiness and of duties to other constituents of the entity. Allowing individual employees to\nassert personal attorney-client privilege over communications with the employer\'s counsel could\nfrustrate an employer\'s ability to act in its own self interest, perhaps to the detriment of other\nemployees, stockholders, or partners.\nNevertheless, there are weighty considerations on the other side of the scale. Once a\ngovernment investigation begins, the interests of employees and of the entity may diverge.\nIndeed, that may be true in other circumstances in which employees communicate with\nemployer counsel. Employees often are unaware of the potential personal consequences of\ncooperating with lawyers hired by their employers. Even more troublesome, they may cooperate\nwith employer-retained counsel in the belief that their communications are protected by a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c152\npersonal privilege, sometimes as a result of a misapprehension of the law and occasionally\nperhaps as a result of deception, inadvertent or otherwise.\nCourts have wrestled with this problem for some time now. In the absence of evidence that the\nemployee was deceived by the employer as to the existence of a personal attorney-client\nrelationship or as to a personal right to control the disclosure of privileged materials, circuits\nhave employed different standards to determine when personal privilege attaches. Some have\nlooked at whether the individual reasonably believed that there was a personal attorney-client\nrelationship, although the Second Circuit has rejected this approach. Others have focused on\nwhether the individual expressly requested personal advice or representation. In In re Bevill,\nBresler & Schulman Asset Management Corp., the Third Circuit enunciated a five-part test that\nhas been adopted by at least two other circuits\nFirst, the individual claiming personal privilege must show they approached counsel for\nthe purpose of seeking legal advice. Second, they must demonstrate that when they\napproached counsel they made it clear that they were seeking legal advice in their\nindividual rather than in their representative capacities. Third, they must demonstrate\nthat the counsel saw fit to communicate with them in their individual capacities, knowing\nthat a possible conflict could arise. Fourth, they must prove that their conversations with\ncounsel were confidential. And, fifth, they must show that the substance of their\nconversations with counsel did not concern matters within the company or the general\naffairs of the company.\nOur circuit addressed the issue in United States v. International Brotherhood of Teamsters. The\nTeamsters court first noted that courts typically have said that the attorney-client privilege for an\nemployee\xe2\x80\x99s communication with corporate counsel about corporate matters belongs to the\ncorporation, not the individual employee. Nevertheless, it said, courts have found a personal\nprivilege where the individual met \xe2\x80\x9ccertain requirements.\xe2\x80\x9d It quoted the Third Circuit\'s Bevill test\nas one such example and noted that other courts have required the employee \xe2\x80\x9cmake it clear to\ncorporate counsel that he seeks legal advice on personal matters.\xe2\x80\x9d Drawing upon all of these\nsources, the Circuit concluded that the individual before it lacked any personal privilege with\nrespect to the communications at issue because he \xe2\x80\x9cneither sought nor received legal advice\nfrom his employer\'s counsel on personal matters.\xe2\x80\x9d\nTeamsters\xe2\x80\x99 holding thus rests on the scope of \xe2\x80\x9cpersonal matters.\xe2\x80\x9d But the meaning of that\nphrase has not been developed. Do \xe2\x80\x9cpersonal matters\xe2\x80\x9d involve solely the individual, with no\nimpact on the entity\'s interests whatsoever? Or may they encompass matters that implicate both\nthe individual and the entity? Although the facts of Teamsters suggest that the Circuit might\nhave contemplated the former view, it did not expressly address the question.\nSome guidance may be gained from circuits that have addressed this issue in the context of the\nfifth Bevill factor, which requires that the communication \xe2\x80\x9cnot concern matters within the\ncompany or the general affairs of the company.\xe2\x80\x9d The Tenth Circuit concluded that this factor\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c153\nonly precludes an officer from asserting an individual attorney client privilege when the\ncommunication concerns the corporation\xe2\x80\x99s rights and responsibilities. However, if the\ncommunication between a corporate officer and corporate counsel specifically focuses\nupon the individual officer\xe2\x80\x99s personal rights and liabilities, then the fifth prong of Bevill\ncan be satisfied even though the general subject matter of the conversation pertains to\nmatters within the general affairs of the company. For example, a corporate officer\xe2\x80\x99s\ndiscussion with his corporation\xe2\x80\x99s counsel may still be protected by a personal, individual\nattorney-client privilege when the conversation specifically concerns the officer\xe2\x80\x99s\npersonal liability for jail time based on conduct interrelated with corporate affairs.\nThe First Circuit adopted the Tenth Circuit\xe2\x80\x99s interpretation and discussed its application where\ncommunications involving the individual\xe2\x80\x99s liabilities \xe2\x80\x9cdo not appear to be distinguishable\xe2\x80\x9d from\nthose concerning the entity\xe2\x80\x99s interests. Acknowledging that both the employee and the entity\ncould have an attorney-client relationship with the attorney with respect to such a\ncommunication, but noting also the fiduciary duty owed by a corporate officer to the corporation,\nthe First Circuit concluded that \xe2\x80\x9ca corporation may unilaterally waive the attorney-client privilege\nwith respect to any communications made by a corporate officer in his corporate capacity,\nnotwithstanding the existence of an individual attorney-client relationship between him and the\ncorporation\xe2\x80\x99s counsel.\xe2\x80\x9d Thus, under the First Circuit formulation, individual privilege may be\nasserted successfully only when \xe2\x80\x9ccommunications regarding individual acts and liabilities are\nsegregable from discussions about the corporation.\xe2\x80\x9d To hold otherwise, the court reasoned,\n\xe2\x80\x9cwould open the door to a claim of jointly held privilege in virtually every corporate\ncommunication with counsel.\xe2\x80\x9d\nThe Tenth and First Circuits thus have argued persuasively that communications implicating\npersonal liability for acts within the scope of an individual\xe2\x80\x99s employment may be protected by\nindividual attorney-client privilege, at least in some circumstances. It is an open question\nwhether such communications involve \xe2\x80\x9cpersonal matters\xe2\x80\x9d within the meaning of Teamsters. But\nit is unnecessary to resolve that issue here. As discussed below, and particularly in light of the\nfact that the burden of proof lies with the party asserting privilege, Warley fails to meet any\nstandard.\nB. Warley\xe2\x80\x99s Claims\nTo begin with, there is no evidence that Warley was deceived by KPMG or its attorneys about\nthe nature of her relationship with counsel. Although she claims to have \xe2\x80\x9cunderstood that\ncounsel were representing her personally as a partner in the firm,\xe2\x80\x9d her subjective belief alone\ndoes not support a conclusion that KPMG\xe2\x80\x99s acts were responsible for that belief. Accordingly,\nthe analysis of her claims rests on whether the communications involved \xe2\x80\x9cpersonal matters.\xe2\x80\x9d\nWarley\xe2\x80\x99s communications with counsel were about events and conduct within the scope of her\nwork as a partner at KPMG, thus clearly implicating KPMG\xe2\x80\x99s interest in responding to the IRS\ninvestigation. The events and conduct, however, also implicated Warley\xe2\x80\x99s personal interests and\nliabilities, as is amply evidenced by her status as a defendant in this case. Warley\xe2\x80\x99s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c154\ncommunications thus present the difficult circumstance where both the individual\xe2\x80\x99s and the\nentity\xe2\x80\x99s interests are involved.\nAs discussed above, the scope of \xe2\x80\x9cpersonal matters\xe2\x80\x9d under Teamsters is unclear. Under a\nnarrow reading, the fact that the communications implicated KPMG\xe2\x80\x99s interests alone would\nrequire that Warley\xe2\x80\x99s claim of privilege be rejected. Even under the approach adopted by the\nFirst and Tenth Circuits, however, Warley could not prevail on a privilege claim absent a\nshowing that communications implicated her interests alone and were segregable from those\ninvolving KPMG\xe2\x80\x99s interests. Nothing in the allegedly privileged documents or the affidavits\nsubmitted with this motion indicates that the communications focused on her personal interests\nalone. The Court therefore need not determine the parameters of \xe2\x80\x9cpersonal matters,\xe2\x80\x9d as\nWarley\xe2\x80\x99s disclosures would not come within even a broad view of the term.\nWarley nevertheless argues that her communications were privileged vis-a-vis herself because\n(1) the KPMG partnership agreement provides that \xe2\x80\x9cthe General Counsel shall act on behalf of\nall Members, except where a dispute arises between an individual Member and the Firm,\xe2\x80\x9d and\n(2) counsel retained by KPMG represented both Warley and the firm in litigation on two\noccasions prior to the communications here at issue. But these contentions are not persuasive.\nTo begin with, the occasions on which Warley and KPMG were jointly represented occurred in\ncircumstances in which Warley was a witness, not a party, to the litigation. The Court is not\npersuaded that representation of an employee by employer-retained counsel where the\nemployee\xe2\x80\x99s role is that of a witness in a lawsuit against the employer could give rise to a\nreasonable expectation on the part of the employee that all communications she might have\nwith employer-retained counsel, even a long time thereafter, were made in the context of an\nindividual attorney-client relationship.\nNor has Warley offered any evidence that she in fact subjectively relied either upon the\nlanguage in the partnership agreement or the previous litigation experience in concluding that\nKronish, King & Spalding, or Gremminger was representing her individually.\nConclusion\nIn the end, Warley\xe2\x80\x99s showings amount merely to a claim of her subjective belief which, without\nmore, is insufficient to meet her burden of proving privilege. For the foregoing reasons, Warley\xe2\x80\x99s\nmotion for relief from the government\xe2\x80\x99s alleged violation of her attorney-client privilege is denied.\nQuestions:\n1. Did Warley believe KPMG\xe2\x80\x99s attorneys represented her personally? If so, why was she\nwrong. Did anyone tell her that KPMG\xe2\x80\x99s attorneys were not representing her personally?\n2. Why does Warley want to claim that the documents at issue are protected by the\nattorney-client privilege? Why can\xe2\x80\x99t she make a privilege claims? Could KPMG have\nmade a privilege claim over the same information?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c155\n3. Should Warley have a malpractice claim against KPMG\xe2\x80\x99s attorneys?\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nGrace M. Giesel, Upjohn Warnings, the Attorney-Client Privilege, and Principles of\nLawyer Ethics: Achieving Harmony, 65 U. Miami L. Rev. 109 (2010)\nAshish S. Joshi, Corporate Miranda: Clarifying Lawyers\' Loyalty During an Internal\nInvestigation, American Bar Association (2009)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c156\nSection 3: The Legal Duties of an Attorney\n3.1: Fiduciary Duties\nAttorneys are fiduciaries of their clients. As fiduciaries, they have certain legal duties to their\nclients, which include:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nThe Duty of Care: Ordinary care under the circumstances.\nThe Duty of Loyalty: Absolute loyalty.\nThe Duty of Impartiality: Absolute candor.\nThe Duty of Confidentiality: Absolute confidentiality.\n\nThe duties of care, loyalty, impartiality, and confidentiality attach whenever an attorney-client\nrelationship begins and may continue after an attorney-client relationship ends. Accordingly,\nattorneys may owe duties to both current and former clients, which may affect an attorney\xe2\x80\x99s\nability to continue representing those clients or to represent new clients.\nThe Duty of Care\nAttorneys must exercise reasonable care when representing their clients. Typically, courts\nexpect attorneys to use the degree of care expected of an ordinary attorney in similar\ncircumstances. In other words, the duty of care imposed on an attorney is a duty of professional\ncare, reflecting the expectations of both the client and other attorneys. An attorney who fails to\nexercise reasonable care is negligent, and may be liable in tort for malpractice. Attorneys may\nhave a duty of care to both current and former clients, and any negligent act in relation to\nrepresentation of a client may create a malpractice claim.\nIn order to prove a malpractice claim for a breach of the duty of care, the plaintiff must show that\na duty of care existed, the attorney breached the duty of care, and the breach caused a harm to\nthe plaintiff. Of course, a duty of care exists only if an attorney-client relationship exists. So the\nfirst element of a malpractice claim for negligence is proving the existence of an attorney-client\nrelationship.\nThe Duty of Loyalty\nAttorneys are fiduciaries of their clients because clients justifiably vest confidence, good faith,\nreliance, and trust in their attorneys. Accordingly, attorneys have a fiduciary duty to maintain an\nundivided loyalty to their clients at all times. Attorneys must ensure that their duties to their\nclients never conflict with their own financial interests, the interests of another client, or any\nother interest that would affect their ability to provide competent and diligent representation.\nUnder the duty of loyalty, attorneys cannot represent anyone with an interest adverse to one of\ntheir clients, because it would create a conflict of interest. If that interest becomes an issue, the\nattorney\xe2\x80\x99s loyalty would be divided between the two clients. Obviously, an attorney cannot\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c157\nrepresent two parties with interests directly adverse to each other, like opposing parties in\nlitigation, because the conflict of interest is fundamental and unavoidable. MR 1.7, cmt. [8]. But\nthe restriction imposed by the duty of loyalty applies more broadly. Any adverse or potentially\nadverse interest may create a conflict of interest, even if that interest is not yet at issue.\nThe Duty of Impartiality\nAs fiduciaries of their clients, attorneys have a duty to provide candid and impartial advice. In\norder to satisfy the duty of impartiality, attorneys must be able to exercise their independent\nprofessional judgment, without any conflicts of interest. If a client\xe2\x80\x99s interests are adverse or\npotentially adverse to the attorney\xe2\x80\x99s interests or the interests of another client, a conflict of\ninterest exists that will compromise the attorney\xe2\x80\x99s impartiality. Under those circumstances,\nattorneys will have an incentive to provide advice that benefits themselves or their other clients,\nand withhold advice that does not. Even if the client is not harmed by the advice itself, the client\nis harmed by not receiving candid and impartial advice reflecting the full range of available\noptions.\nFor example, if an attorney represents a client in a contract negotiation, and the outcome of the\nnegotiation could affect the interests of another client, a conflict of interest exists, because the\nattorney has an incentive to provide advice that will benefit the other client and withhold advice\nthat will harm the other client. Even if the advice benefits both clients, the client receiving the\nadvice is harmed by not receiving candid and impartial advice. Likewise, if an attorney both\nrepresents and has a financial interest in a corporation, a conflict of interests exists, because\nthe attorney has an incentive to provide advice that will benefit the attorney\xe2\x80\x99s investment and\nwithhold advice that will not, depriving the client of the full range of options.\nModel Rule 2.1: Advisor\nIn representing a client, a lawyer shall exercise independent professional judgment and\nrender candid advice. In rendering advice, a lawyer may refer not only to law but to other\nconsiderations such as moral, economic, social and political factors, that may be\nrelevant to the client\'s situation.\nThe Duty of Confidentiality\nAs fiduciaries of their clients, attorneys also have a duty to maintain the confidentiality of private\ninformation disclosed to them by their clients. Under the duty of confidentiality, attorneys must\nnever disclose confidential client information to a third party not bound by the duty of\nconfidentiality or use confidential client information to benefit themselves or another client.\nClients are entitled to confide in their attorney, secure in the knowledge that the confidential\ninformation they disclose cannot be used against them.\nIf a client\xe2\x80\x99s interests are adverse or potentially adverse to the attorney\xe2\x80\x99s interests or the interests\nof another client, a conflict of interests exists that will compromise the attorney\xe2\x80\x99s ability to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c158\nmaintain confidentiality. Under those circumstances, attorneys have an incentive to use the\nconfidential information for their own benefit or the benefit of their other client. Even if the client\nis not harmed by the use of the confidential information, the client is harmed by the betrayal of\ntrust.\nModel Rule 1.6: Confidentiality of Information\na. A lawyer shall not reveal information relating to the representation of a client unless the\nclient gives informed consent, the disclosure is impliedly authorized in order to carry out\nthe representation or the disclosure is permitted.\nLimitations on the Duties of an Attorney\nWhile the absolute duties of loyalty, impartiality, and confidentiality are the quintessence of\nprofessional responsibility, they are necessarily observed in the breach. Taken literally, they\nwould inevitably preclude attorneys from ever representing more than one client. It is always\npossible that the interests of a potential client will conflict with those of a current client. It is\nalways possible that advice given to one client will affect the interests of another client. And it is\nalways possible that confidential information disclosed by one client will be relevant to another.\nIn practice, the duties of an attorney must yield to the practical realities of representation.\nAccordingly, the duties of attorneys are shaped by the rights of clients, attorneys, and the bar.\nClients are entitled to hire the attorney of their choice, and may consent to representation,\ndespite a formal conflict. Attorneys are entitled to represent more than one client, so long as\nthey disclose any conflicts and the client consents. And the bar is entitled to prevent parties\nfrom using conflicts strategically to disqualify opposing counsel.\nIn other words, clients may provide informed consent to certain conflicts of interest. Attorneys\nmay represent clients with conflicts of interests under certain circumstances, so long as the\nclients provide informed consent. And under certain circumstances, the bar may even permit\nattorneys to represent parties with conflicting interests without consent.\nHowever, attorneys must always observe the duty of care. An attorney who fails to exercise\nreasonable care under the circumstances is negligent and potentially liable for malpractice,\neven if the client consents.\nIshmael v. Millington, 241 Cal. App. 2d 520 (Cal. Ct. App. 1966)\nSummary: Earl F. Anders and Roberta Ishmael were married and owned a trucking\ncompany. Eventually, they decided to divorce. Under California law, Ishmael was entitled\nto 50% of the marital assets. Attorney Robert Millington had previously represented\nAnders and his company. Anders asked Millington to represent Ishmael. He agreed, and\nprepared a settlement agreement that Ishmael signed. Ishmael was entitled to $41,250,\nbut under the agreement she received $8,807. Ishmael filed a malpractice action, and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c159\nthe trial court granted Millington\xe2\x80\x99s motion for summary judgment. The appellate court\nreversed, holding that a jury could have found that Millington breached his duty of care.\nFRIEDMAN, J.\nThis is a legal malpractice action in which the plaintiff-client appeals from a summary judgment\ngranted the defendant-attorney. The factual narrative will possess heightened significance\nagainst a backdrop of general doctrine:\nActionable legal malpractice is compounded of the same basic elements as other kinds\nof actionable negligence: duty, breach of duty, proximate cause, damage. Touching the\nfirst element, duty, the general rule is that \xe2\x80\x9cthe attorney, by accepting employment to\ngive legal advice or to render other legal services, impliedly agrees to use such skill,\nprudence, and diligence as lawyers of ordinary skill and capacity commonly possess and\nexercise in the performance of the tasks which they undertake.\xe2\x80\x9d\nIn this case the defense is that the client sought no advice from the attorney and was given\nnone; by the client\'s express admission, she did not rely on the attorney, thus, that her alleged\ndamage was not proximately caused by the attorney\'s cause of action.\nThe facts are presented by summary judgment affidavits, which include extracts from\ndepositions. There is no significant conflict in the evidence. Roberta Ishmael, the plaintiff, was\nformerly married to Earl F. Anders. The couple had three children. They lived in Gridley, where\nMr. Anders was a partner in a family trucking business. Domestic difficulties resulted in a\nseparation, and Mrs. Anders moved to Sacramento where she secured employment. She and\nher husband agreed upon a divorce and property settlement. She knew that she was entitled to\none-half the marital property.\nMr. Anders called upon defendant Robert Millington, a Gridley attorney who had for some time\nrepresented him and his trucking firm. Mr. Millington advised Anders that if he could establish\nadulterous conduct by Mrs. Anders, he might be awarded more than one-half the community\nproperty. For one reason or another there was a decision that the wife rather than the husband\nwould apply for divorce. At Anders\xe2\x80\x99 request Mr. Millington agreed to act as the wife\'s attorney, to\nprepare the necessary papers and to file a divorce action for her. He drew up a complaint and a\nproperty settlement agreement and handed these documents to Mr. Anders, who took them to\nSacramento and had his wife sign them. She knew that Mr. Millington had represented her\nhusband in the past. Faulty recall prevents ascertainment whether Mrs. Anders ever met\npersonally with the attorney before the papers were drawn. She did not discuss the property\nsettlement agreement with the attorney before she signed it. Mr. Millington believed the divorce\nand property settlement arrangements were \xe2\x80\x9ccut and dried\xe2\x80\x9d between the husband and wife; he\n\xe2\x80\x9cassumed that she knew what she was doing;\xe2\x80\x9d he believed that she was actually getting half the\nproperty but made no effort to confirm that belief.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c160\nIn her deposition the former Mrs. Anders testified that in signing the complaint and property\nsettlement agreement she relied solely on her husband and did not rely on the attorney. Later,\nwhen so instructed, she traveled to the courthouse at Oroville, where she and her corroborating\nwitness met Mr. Millington. He escorted her through a routine ex parte hearing which resulted in\nan interlocutory divorce decree and judicial approval of the property settlement.\nAccording to her complaint, the former Mrs. Anders discovered that in return for a settlement of\n$8,807 she had surrendered her right to community assets totaling $82,500. Ascribing her loss\nto the attorney\'s negligent failure to make inquiries as to the true worth of the community\nproperty, she seeks damages equivalent to the difference between what she received and onehalf the asserted value of the community.\nBy the very act of undertaking to represent Mrs. Anders in an uncontested divorce suit, Mr.\nMillington assumed a duty of care toward her, whatever its degree. Described in terms\ntraditionally applicable to the attorney-client relationship, the degree of care exacted by that duty\nwas that of a figurative lawyer of ordinary skill and capacity in the performance of like tasks.\nThe degree of care is related to the specific situation in which the defendant found himself. The\nstandard is that of ordinary care under the circumstances of the particular case. A lawyer owes\nundivided loyalty to his client. Minimum standards of professional ethics usually permit him to\nrepresent dual interests where full consent and full disclosure occur. The loyalty he owes one\nclient cannot consume that owed to the other. Most descriptions of professional conduct prohibit\nhis undertaking to represent conflicting interests at all; or demand that he terminate the threeway relationship when adversity of interest appears. Occasional statements sanction informed\nrepresentation of divergent interests in \xe2\x80\x9cexceptional\xe2\x80\x9d situations. Even those statements demand\ncomplete disclosure of all facts and circumstances which, in the attorney\'s honest judgment,\nmay influence his client\'s choice, holding the attorney civilly liable for loss caused by lack of\ndisclosure.\nDivorces are frequently uncontested; the parties may make their financial arrangements\npeaceably and honestly; vestigial chivalry may impel them to display the wife as the injured\nplaintiff; the husband may then seek out and pay an attorney to escort the wife through the\nformalities of adjudication. We describe these facts of life without necessarily approving them.\nEven in that situation the attorney\xe2\x80\x99s professional obligations do not permit his descent to the\nlevel of a scrivener. The edge of danger gleams if the attorney has previously represented the\nhusband. A husband and wife at the brink of division of their marital assets have an obvious\ndivergence of interests. Representing the wife in an arm\'s length divorce, an attorney of ordinary\nprofessional skill would demand some verification of the husband\'s financial statement; or, at\nthe minimum, inform the wife that the husband\'s statement was unconfirmed, that wives may be\ncheated, that prudence called for investigation and verification. Deprived of such disclosure, the\nwife cannot make a free and intelligent choice. Representing both spouses in an uncontested\ndivorce situation (whatever the ethical implications), the attorney\'s professional obligations\ndemand no less. He may not set a shallow limit on the depth to which he will represent the wife.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c161\nThe general standard of professional care is appropriate to the garden variety situation, where\nthe attorney represents only one of several parties or interests. It falls short of adequate\ndescription where the attorney\'s professional relationship extends to two clients with divergent\nor conflicting interests in the same subject matter. A more specific statement of the same rule is\nneeded to guide the fact trier to the law\'s demands when the attorney attempts dual\nrepresentation. In short, an attorney representing two parties with divergent interests must\ndisclose all facts and circumstances which, in the judgment of a lawyer of ordinary skill and\ncapacity, are necessary to enable his client to make free and intelligent decisions regarding the\nsubject matter of the representation.\nIn view of the degree of care imposed by law on an attorney in defendant\'s position, a fact trier\nmight reasonably find him negligent in failing to disclose to plaintiff the limited representation\nshe was receiving and in failing to point to the possibility of independent legal advice. The\nquestion of breach was thus a triable issue which could not be resolved on a summary judgment\nmotion.\nLegal malpractice may consist of a negligent failure to act. The attorney\'s negligence, whether\nconsisting of active conduct or a failure to act, need not be the sole cause of the client\'s loss.\nHere the attorney is charged not with erroneous advice, but with failure to advise, failure to\ninvestigate, failure to disclose. The wife\'s reliance on her husband\'s alleged misrepresentations\nis not at all inconsistent with the claim that her loss was the result of the attorney\'s negligent\nfailure. A jury might find that the husband\'s misrepresentations were a realizable likelihood\nwhich made the attorney\'s inaction negligent, thus forming a concurrent (and not superseding)\ncause of harm. Causation was a jury question which could not be resolved as a matter of law.\nContributory negligence on plaintiff\'s part was specially pleaded and, if established, would bar\nmalpractice recovery. Plaintiff, as she testified, relied on her husband\'s list of assets; apparently\ndid not trouble to investigate or even to inquire whether she was getting her share of property;\nwas seemingly content to let her husband take charge; accepted his attorney for the limited\npurpose of piloting her through the divorce formalities. A court, however, cannot say that\nreasonable jurors would inevitably characterize her conduct as contributory negligence. That\nissue was a triable issue of fact.\nThus, notwithstanding the lack of conflict in the evidence, the summary judgment rests on the\ndetermination of issues reserved for decision by a fact trier and which could not be resolved as\na matter of law. Since triable issues of fact existed, the motion should have been denied.\nQuestions:\n1. Did Anders assert a violation of the duty of care, the duty of loyalty, or both?\n2. Did Anders show a violation of the duty of care, the duty of loyalty, or both?\n3. Could Anders have prevailed on a violation of either the duty of care or the duty of\nloyalty?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c162\nThe Appearance of Impropriety\nLet this, my young Readers, be your constant Maxim, That no Man can be good enough to\nenable him to neglect the Rules of Prudence; nor will Virtue herself look beautiful, unless she be\nbedecked with the outward Ornaments of Decency and Decorum.39\nThe ABA has long held that judges should avoid \xe2\x80\x9cthe appearance of impropriety.\xe2\x80\x9d When the\nABA adopted the Canons of Judicial Ethics in 1924, Canon 4 held that judges should avoid \xe2\x80\x9cthe\nappearance of impropriety.\xe2\x80\x9d When it adopted the Code of Judicial Conduct in 1972, Canon 2\nheld that a judge should avoid \xe2\x80\x9cthe appearance of impropriety in all his actions.\xe2\x80\x9d When it\nadopted the Model Code of Judicial Conduct in 1990, Canon 2A maintained the appearance of\nimpropriety standard, holding that \xe2\x80\x9cthe test for the appearance of impropriety is whether the\nconduct would create in reasonable minds a perception that the judge\'s ability to carry out\njudicial responsibilities with integrity, impartiality and competence is impaired.\xe2\x80\x9d And Rule 1.2 of\nthe revised Model Rules of Judicial Conduct retains the same standard.\nBut lawyers have resisted applying the appearance of impropriety standard to themselves.\nWhen the ABA adopted the Model Code of Professional Responsibility in 1969, it included the\nappearance of impropriety standard only as an \xe2\x80\x9cethical consideration,\xe2\x80\x9d rather than a \xe2\x80\x9cdisciplinary\nrule,\xe2\x80\x9d making it aspirational, rather than mandatory. And when the ABA adopted the Model\nRules of Professional Conduct in 1983, it eliminated the appearance of impropriety standard\nentirely.\nModel Code of Professional Responsibility\nCanon 9: A Lawyer Should Avoid Even the Appearance of Professional Impropriety\nEthical Consideration 9-2\nPublic confidence in law and lawyers may be eroded by irresponsible or improper\nconduct of a lawyer. On occasion, ethical conduct of a lawyer may appear to laymen to\nbe unethical. In order to avoid misunderstandings and hence to maintain confidence, a\nlawyer should fully and promptly inform his client of material developments in the matters\nbeing handled for the client. While a lawyer should guard against otherwise proper\nconduct that has a tendency to diminish public confidence in the legal system or in the\nlegal profession, his duty to clients or to the public should never be subordinate merely\nbecause the full discharge of his obligation may be misunderstood or may tend to\nsubject him or the legal profession to criticism. When explicit ethical guidance does not\nexist, a lawyer should determine his conduct by acting in a manner that promotes public\nconfidence in the integrity and efficiency of the legal system and the legal profession.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 121(c)(iv): The perspective for\ndetermining conflict of interest\n\n39\n\nHenry Fielding, The History of Tom Jones, A Foundling (1749).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c163\nThis Section employs an objective standard by which to assess the adverseness,\nmateriality, and substantiality of the risk of the effect on representation. The standard of\nthis Section is not the \xe2\x80\x9cappearance of impropriety\xe2\x80\x9d standard formerly used by some\ncourts to define the scope of impermissible conflicts. That standard could prohibit not\nonly conflicts as defined in this Section, but also situations that might appear improper to\nan uninformed observer or even an interested party.\nThe propriety of the lawyer\'s action should be determined based only on facts and\ncircumstances that the lawyer knew or should have known at the time of undertaking or\ncontinuing a representation. It should not be evaluated in light of information that\nbecame known only later and that could not reasonably have been anticipated.\nThe standard of this Section allows consideration in a given situation of the social value\nof the lawyer\'s behavior alleged to constitute the conflict. For example, a lawyer\'s\nstatement about a matter of public importance might conflict with a client\'s objectives,\nbut the public importance of free expression is a factor to be considered in limiting the\npossible reach of the relevant conflicts rule.\nWhether there is adverseness, materiality, and substantiality in a given circumstance is\noften dependent on specific circumstances that are ambiguous and the subject of\nconflicting evidence. Accordingly, there are necessarily circumstances in which the\nlawyer\'s avoidance of a representation is permissible but not obligatory. A lawyer also\nwould be justified in withdrawing from some representations in circumstances in which it\nwould be improper to disqualify the lawyer or the lawyer\'s firm.\nModel Code of Judicial Conduct: Canon 1\nRule 1.2: Promoting Confidence in the Judiciary\nA judge shall act at all times in a manner that promotes public confidence in the\nindependence, integrity, and impartiality of the judiciary, and shall avoid impropriety and\nthe appearance of impropriety.\nRule 1.2, Comment 5\nThe test for appearance of impropriety is whether the conduct would create in\nreasonable minds a perception that the judge violated this Code or engaged in other\nconduct that reflects adversely on the judge\xe2\x80\x99s honesty, impartiality, temperament, or\nfitness to serve as a judge.\nBd. Of. Ed. Of. NY City v. Nyquist, 590 F. 2d 1241 (2d Cir. 1979)\nSummary: The Board of Education of the City of New York used separate seniority lists\nwhen deciding layoffs of male and female Health and Physical Education teachers\n(HPETs). The Commissioner of Education held that using separate lists was illegal, but\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c164\nthe Department of Health, Education, and Welfare (HEW) disagreed, arguing that\nmerging the lists would violate Title IX by disproportionately affecting women. The BoE\nfiled a declaratory judgment action against three male and three female HPETs. The\nmale HPETs were represented by James R. Sandner of New York State United\nTeachers (NYSUT). The female HPETs filed a motion to disqualify Sandner, on the\nground that their union dues helped pay for his services. The district court granted the\nmotion, but the Second Circuit reversed, holding that no conflict of interest existed, and\nthat any appearance of impropriety was insufficient to require disqualification.\nBefore FEINBERG, MANSFIELD and SMITH, Circuit Judges.\nFEINBERG, Circuit Judge:\nThis unusual case presents difficult questions regarding the appropriate role of federal courts\nwhen called upon by disqualification motions to evaluate the conduct of attorneys who appear\nbefore them. Three male Health and Physical Education teachers (HPETs) in the New York City\nschool system appeal from an order of the United States District Court for the Southern District\nof New York, Morris E. Lasker, J., disqualifying their counsel upon the motion of three female\nHPETs. Appellant male teachers claim that the order was an abuse of discretion because it\ndisregarded their constitutional rights, and was without any sound basis. For reasons set forth\nbelow, we hold that the motion to disqualify should have been denied, and we therefore reverse\nthe order of the district court.\nThe contending parties on appeal - the male and female HPETs - are all defendants in this\ndeclaratory judgment action brought by the Board of Education of the City of New York and the\nChancellor of the City School District. In February 1977, these plaintiffs found themselves in the\nmiddle of apparently contradictory positions held by the Commissioner of Education of the State\nof New York and the office of Civil Rights of the Department of Health, Education and Welfare\n(HEW). In a case involving one of these appellants, the State Commissioner had ruled that the\nuse of separate seniority lists for male and female HPETs for the purpose of layoffs was illegal.\nShortly thereafter, HEW initially indicated to the Board that HEW took exactly the contrary view,\nthat merger of the lists would violate Title IX. Caught in this apparent dilemma, plaintiffs\nprovisionally merged the seniority lists of male and female HPETs and commenced this action\nfor a declaratory judgment in which all concerned parties would be present. The complaint\nnamed as defendants HEW and its Secretary, the New York State Commissioner of Education,\nthe State Division of Human Rights, three named male HPETs, individually and as\nrepresentatives of all male HPETs, and three named female HPETs, individually and as\nrepresentatives of all female HPETs. The male and female defendants have asserted\ncounterclaims and cross-claims. The relief sought by plaintiffs is a judgment declaring that the\nprovisional policy of merging the seniority lists, effective February 1, 1977 but not retroactively,\nis lawful.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c165\nThe two classes of defendants are the actual contending parties in this litigation. The male\nHPETs allege that maintaining separate seniority lists for male and female HPETs is illegal and\nthat:\nall defendant male Health and Physical Education teachers who were laid off on or after\nSeptember 1, 1975, are entitled to reinstatement with back pay and all other retroactive\nbenefits incident to their positions to the date of their layoff if less senior female teachers\nwere retained at that time or at any time thereafter.\nThe female HPETs allege that their seniority status perpetuates past discriminatory practices of\nplaintiffs and that if the provisional merged seniority list is used for layoff purposes \xe2\x80\x9cit will result\nin the layoff of at least six times as many female HPETs as male HPETs.\xe2\x80\x9d The stakes in the\nlawsuit are obviously high.\nThe male HPETs are represented in this action by James R. Sandner, Esq., who is also\nGeneral Counsel of New York State United Teachers (NYSUT). That organization is an\nunincorporated membership association of approximately 180,000 teachers, librarians,\nguidance counsellors and other school related employees of the almost 800 school districts in\nNew York State. We are told that in each of the school districts there is a separate local union,\nwhich is the exclusive bargaining representative for employees in that unit. The majority of these\nindividual unions have chosen to affiliate themselves with NYSUT, but the latter does not\ncollectively bargain for any public employees. It does, however, provide a number of services to\nits members, including a legal service program under the direction and control of Mr. Sandner.\nBoth the male and female HPETs are represented in collective bargaining by the American\nFederation of Teachers (AFT), to whom they pay dues. A portion of the dues paid to the AFT is\nremitted to NYSUT, which, at least in part, apparently finances the legal service program.\nUnder the program, NYSUT\xe2\x80\x99s members may apply to obtain legal representation free of charge.\nMr. Sandner and his staff may take an applicant\'s case when, in their judgment, the claim is\nboth job-related and meritorious. It is through this procedure that the male defendants retained\nMr. Sandner as their attorney. NYSUT itself, however, has taken no position on the merits or on\nany other issue in this litigation.\nThe female HPETs moved to disqualify Mr. Sandner as counsel for the male HPETs or, in the\nalternative, to require NYSUT to furnish counsel for the female teachers. Judge Lasker\nconcluded that \xe2\x80\x9cthe female teachers are paying, in part, for their opponents\xe2\x80\x99 legal expenses.\xe2\x80\x9d\nThis violated \xe2\x80\x9cat least the spirit, if not the letter, of Canon 9 of the Code of Professional\nResponsibility that \xe2\x80\x98A lawyer should avoid even the appearance of impropriety.\xe2\x80\x99\xe2\x80\x9d Accordingly,\nthe judge granted the motion and this appeal by the male HPETs followed.\nWe begin the discussion by noting that, curiously, the power of the federal courts to disqualify\nattorneys in litigation pending before them has long been assumed without discussion, and\nattention has focused on identifying the circumstances in which exercise of the power is\nappropriate. Our reading of the cases in this circuit suggests that we have utilized the power of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c166\ntrial judges to disqualify counsel where necessary to preserve the integrity of the adversary\nprocess in actions before them. In other words, with rare exceptions disqualification has been\nordered only in essentially two kinds of cases: (1) where an attorney\'s conflict of interests in\nviolation of Canons 5 and 9 of the Code of Professional Responsibility undermines the court\xe2\x80\x99s\nconfidence in the vigor of the attorney\'s representation of his client, or more commonly (2)\nwhere the attorney is at least potentially in a position to use privileged information concerning\nthe other side through prior representation, for example, in violation of Canons 4 and 9, thus\ngiving his present client an unfair advantage. In such cases, we note Chief Judge Kaufman\'s\noft-quoted admonition that,\nWhen dealing with ethical principles, we cannot paint with broad strokes. The lines are\nfine and must be so marked. Guideposts can be established when virgin ground is being\nexplored, and the conclusion in a particular case can be reached only after a painstaking\nanalysis of the facts and precise application of precedent.\nBut in other kinds of cases, we have shown considerable reluctance to disqualify attorneys\ndespite misgivings about the attorney\'s conduct. This reluctance probably derives from the fact\nthat disqualification has an immediate adverse effect on the client by separating him from\ncounsel of his choice, and that disqualification motions are often interposed for tactical reasons.\nAnd even when made in the best of faith, such motions inevitably cause delay. For example,\nthis lawsuit has been at a standstill now for close to a year.\nWeighing the needs of efficient judicial administration against the potential advantage of\nimmediate preventive measures, we believe that unless an attorney\'s conduct tends to \xe2\x80\x9ctaint the\nunderlying trial\xe2\x80\x9d by disturbing the balance of the presentations in one of the two ways indicated\nabove, courts should be quite hesitant to disqualify an attorney. Given the availability of both\nfederal and state comprehensive disciplinary machinery, there is usually no need to deal with all\nother kinds of ethical violations in the very litigation in which they surface.\nWith these thoughts in mind, we turn to the ethical problems presented by the instant appeal.\nThe district court disqualified Mr. Sandner because a \xe2\x80\x9clayman\'s faith would be severely\ntroubled\xe2\x80\x9d by the fact that \xe2\x80\x9cthe female teachers are paying, in part, for their opponents\' legal\nexpenses.\xe2\x80\x9d There is no claim, however, that Mr. Sandner feels any sense of loyalty to the\nwomen that would undermine his representation of the men. Nor is there evidence that his\nrepresentation of the men is anything less than vigorous. There is also no claim that the men\nhave gained an unfair advantage through any access to privileged information about the\nwomen. Were there any such problem, the women would not be asking, and the district judge\nwould not have ordered, as an alternative to disqualification of Mr. Sandner, that NYSUT pay\ntheir attorney\'s fees. Thus, in no real sense can Mr. Sandner\'s representation of the men be\nsaid to taint the trial.\nWe agree that there is at least some possibility that Mr. Sandner\'s representation of the men\nhas the appearance of impropriety, because of the large number of union members involved\nand the public importance of the civil rights issue at the heart of the dispute. But in any event,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c167\nwe think that disqualification was inappropriate. We believe that when there is no claim that the\ntrial will be tainted, appearance of impropriety is simply too slender a reed on which to rest a\ndisqualification order except in the rarest cases. This is particularly true where, as in this case,\nthe appearance of impropriety is not very clear. We note that while on one hand there is an\nelement of unfairness to the women, on the other it seems probable that if NYSUT were to take\na position on the merits of this litigation, Mr. Sandner\'s representation of the men would\napparently be within the protection of the "fair representation" cases. This means that the\nquestion whether Mr. Sandner\'s conduct is unethical could be a very close one. Since\ndisqualification entails immediate disruption of the litigation, it is better to relegate any questions\nabout Mr. Sandner\'s conduct to other appropriate proceedings. In addition to the possibility of\ngrievance proceedings and an internal union attack on the legal plan, it may be that judicial\nconstruction of the plan, in an appropriate lawsuit, could provide some relief for the women.\nWe therefore reverse the order of the district court disqualifying counsel, and remand for\ncontinuation of the action.\nQuestions:\n1. Who does Sandner represent? Does he represent the female members of the teachers\nunion? Does he have any duties to the plaintiffs in this action?\n2. Why might someone be concerned about an appearance of impropriety under these\ncircumstances? Why did the court find that any appearance of impropriety did not\nprevent Sandner from representing the male teachers?\n3. Do you agree with the court\xe2\x80\x99s conclusion? Would you feel differently if the male teachers\nwere paying for their own representation? Would you feel differently if the union provided\nrepresentation for the female teachers?\nIn re Disciplinary Proc. Against Sanders, 145 P. 3d 1208 (Wa. 2006)\nSummary: Justice Sanders of the Washington Supreme Court visited the Special\nCommitment Center on McNeil Island, which houses people civilly committed as\nsexually violent predators. During the visit, Sanders accepted documents from inmates\nand asked them about volitional control, among other things. The Attorney General of\nWashington filed a complaint against Sanders with the Washington Commission on\nJudicial Conduct. After an investigation and a hearing, the Commission found that\nSanders violated Canon 1 by failing to enforce high standards of judicial conduct and\nalso violated Canon 2(A) by failing to promote public confidence in the integrity and\nimpartiality of the judiciary. Sanders appealed and the court affirmed.\nGROSSE, J.\nA visit by a judicial officer to a special facility for sexually violent predators is not in itself\ninappropriate conduct under the Code of Judicial Conduct. However, conversations with the\nresidents of the facility concerning the reasons for their confinement, particularly when one or\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c168\nmore of these residents has a matter or matters pending before the court on which the judge\nsits, can violate the Code of Judicial Conduct. By asking questions of inmates who were litigants\nor should have been recognized as potential litigants on issues currently pending before the\ncourt, Justice Richard B. Sanders violated the Code of Judicial Conduct. His conduct created an\nappearance of partiality as a result of ex parte contact.\nThe Washington Commission on Judicial Conduct received a complaint on March 18, 2003,\nregarding Justice Sanders\' conduct while visiting the Special Commitment Center (SCC) on\nMcNeil Island. The Commission conducted an independent investigation of the allegations,\ndetermined that sufficient evidence existed to support the complaint, and sent a Statement of\nAllegations to Justice Sanders on October 8, 2003. In April 2004, the Commission determined\nthat probable cause existed to believe that Justice Sanders violated Canons 1, 2(A) and 3(A)(4)\nof the Code of Judicial Conduct. After a fact-finding hearing, the Commission issued its decision\nholding that Justice Sanders violated Canons 1 and 2(A), but did not violate Canon 3(A)(4). The\nCommission found that Justice Sanders\' conduct violated Canon 1 by failing to enforce high\nstandards of judicial conduct and also violated Canon 2(A) by failing to promote public\nconfidence in the integrity and impartiality of the judiciary. The Commission imposed the\nsanction of admonishment. Under Discipline Rules for Judges 3, Justice Sanders filed a notice\nof contest.\nJustice Sanders embarked on a tour of the SCC despite warnings from his colleagues on the\nSupreme Court about potential ex parte contact with litigants. During the tour of this facility,\nJustice Sanders accepted documents on two separate occasions from the inmates. Moreover,\nin meetings with the residents, some of whom had cases pending before the court, he directly\nasked them about the issue of volitional control.\nAt the time of the visit, the Supreme Court was in the process of deciding In re Detention of\nThorell. Drafts of both a majority opinion and a dissent by Justice Sanders were circulating\namong the justices at the Supreme Court. Thorell was a seminal case in which separate actions\nby six petitioners were combined, including at least one of the SCC residents with whom Justice\nSanders met. A pivotal issue before the Supreme Court in Thorell was volitional control. The\ncourt was weighing whether the \xe2\x80\x9cfact finder must determine that the person facing commitment\nas a sexually violent predator (SVP) has serious difficulty controlling behavior and, if so,\nwhether this determination must be a separate finding based upon a jury instruction.\xe2\x80\x9d Thus, the\nfactual record was before the court in each of the consolidated six cases.\nThe Commission held, and we agree, that the record established through clear, cogent, and\nconvincing evidence that Justice Sanders violated Canons 1 and 2(A). In support of that\nholding, the findings reference two of the three letters from resident Andre Brigham Young\ninviting the justices to visit McNeil Island. Those letters indicate that the residents were looking\nfor something more than just a tour of the facility. In fact, Young suggested that others\n(opposing counsel and defense attorneys) should be asked to attend to avoid \xe2\x80\x9cthe appearance\nof partiality.\xe2\x80\x9d The letters in and of themselves should have given sufficient notice to Justice\nSanders that this visit had the potential of being more than an institutional tour. Additional\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c169\nwarning flags were also raised by three justices who expressed concerns about the visit and\npotential problems. Moreover, a simple computer check would have revealed that Rickey\nCalhoun and Andre Brigham Young, two people mentioned in the prior communication with\nJustice Sanders, had cases pending before the Supreme Court. When Justice Sanders met with\nthe residents in small groups, he warned the residents that he could not hear their particular\ncase issues. However, these warnings were followed by specific questions asking the residents\nabout their confinement and what they thought of volitional control.\nThe Commission justifiably found that Justice Sanders, with full awareness of the potential for\nsituations that could conflict with the Code of Judicial Conduct, embarked on the tour and met\nwith litigants who had pending cases before the court. Further, by raising such critical issues as\nvolitional control with these litigants, Justice Sanders created a situation that clearly violated\nboth the letter and the spirit of the canons and created serious concern for both counsel and\nfellow jurists about the appearance of partiality.\nJustice Sanders claims that a violation of Canons 1 and 2(A) cannot be found without a\nconcomitant violation of a proscribed act or canon and thus the Commission\'s failure to find a\ndirect violation of Canon 3(A)(4) precludes it from finding a violation of the other canons. We\ndisagree.\nIn our view, Turco is dispositive. There, the court found that the judge\'s act of striking his wife in\npublic had a sufficient nexus to the judicial role, particularly when the judge heard domestic\nviolence cases. If extrajudicial tortious conduct can provide a nexus to the judicial role, then a\nfortiori, judicial conduct can provide a basis for a violation of Canons 1 and 2(A). In the instant\ncase, Justice Sanders\xe2\x80\x99 actions were not simply undertaken as a private citizen, but rather within\nthe context of his judicial duties. Our conclusion is underscored by the decision in In re\nDisciplinary Proceeding Against Ritchie. In that case, Judge John G. Ritchie argued that\nCanons 1 and 2(A) of the Code of Judicial Conduct, together with the statute regulating the\nbehavior, were too vague to give him adequate notice of the prohibited behavior. In denying the\nclaim, the court stated:\nIt is true the conduct pursuant to which he was disciplined is not clearly proscribed by\nRCW 3.58.040, insofar as the statute does not expressly prohibit judges from combining\nbusiness and pleasure trips, and does not define \xe2\x80\x9creasonable traveling expenses\xe2\x80\x9d or\n\xe2\x80\x9cbusiness of the court\xe2\x80\x9d.\nJudge Ritchie\'s vagueness challenge is ultimately immaterial, however, because he was\nnot disciplined for violating the statute. Rather, he was censured for violating Canons 1\nand 2(A) of the Code of Judicial Conduct which hold judges to a higher standard of\nintegrity and require avoiding even the appearance of impropriety.\nAs noted in the Commission\'s decision, there are a number of facts in this case that, when\ntaken together, clearly demonstrate that a predictable appearance of partiality could be\nforeseen.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c170\n\nWhere a judge\xe2\x80\x99s decisions are tainted by even a mere suspicion of partiality, the effect on the\npublic\'s confidence can be debilitating. The canons of judicial conduct should be viewed in\nbroad fashion, and judges should err on the side of caution. Under Canon 3(D)(1), \xe2\x80\x9cjudges\nshould disqualify themselves in a proceeding in which their impartiality might reasonably be\nquestioned.\xe2\x80\x9d In Sherman, the court found that where a trial judge \xe2\x80\x9cmay have inadvertently\nobtained information critical to a central issue on remand, a reasonable person might question\nhis impartiality.\xe2\x80\x9d The court set the test for determining impartiality:\nIn deciding recusal matters, actual prejudice is not the standard. The Commission\nrecognizes that where a trial judge\'s decisions are tainted by even a mere suspicion of\npartiality, the effect on the public\'s confidence in our judicial system can be debilitating.\nThe test for determining whether the judge\'s impartiality might reasonably be questioned\nis an objective test that assumes that \xe2\x80\x9ca reasonable person knows and understands all\nthe facts.\xe2\x80\x9d\nThis court in In re Disciplinary Proceeding Against Sanders noted that the interest of the State in\nmaintaining and enforcing high standards of judicial conduct under the auspices of Canon 1 is a\ncompelling one. In Sanders, this court balanced that interest against Justice Sanders\' First\nAmendment rights and found that an independent basis for finding a violation of Canon 1 under\nthose circumstances was not possible. Justice Sanders argues that the language in Canon 1 is\nhortatory and therefore cannot stand as an independent basis for a violation of the Code of\nJudicial Conduct. In the instant case, Canon 1 sets the conceptual framework under which\nCanon 2(A) operates. Canon 2(A) provides the more specific restraint, to wit: \xe2\x80\x9cJudges should\nact at all times in a manner that promotes public confidence in the integrity and impartiality of\nthe judiciary.\xe2\x80\x9d Under the circumstances of this case, Canon 1 taken in conjunction with Canon\n2(A) provides a sufficiently specific basis to find a violation of the Code of Judicial Conduct.\nHere, it was clear that there was a substantial basis and expectation that Justice Sanders would\nbe in contact with possible litigants who had pending litigation before the court and that this\ncontact would be viewed as improper. We concur with the Commission\'s finding that it was\nclearly reasonable to question the impartiality of the justice under the circumstances of this\ncase.\nQuestions:\n1. Why did the court hold that visiting the Special Commitment Facility did not create an\nappearance of impropriety, but speaking to a resident of the facility did?\n2. Would it create an appearance of impropriety for a judge to visit a prison? What if the\njudge spoke to an inmate?\n3. Would it create an appearance of impropriety for a judge to speak with a person who\nhad a pending civil action?\nFurther Reading:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c171\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nPeter W. Morgan, The Appearance of Propriety: Ethics Reform and the Blifil Paradoxes,\n44 Stan. L. Rev. 593 (1992)\nW. Bradley Wendel, Impartiality in Judicial Ethics: A Jurisprudential Analysis, 22 Notre\nDame J.L. Ethics & Pub. Pol\'y 305 (2008)\nRonald D. Rotunda, Judicial Ethics, the Appearance of Impropriety, and the Proposed\nNew ABA Judicial Code, 34 Hofstra Law Review 1337 (2006)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c172\n3.2: Malpractice\nAttorneys may be liable for malpractice if they violate any of their fiduciary duties of care, loyalty,\nimpartiality, or confidentiality. However, the standard for liability may differ depending on the\nduty at issue. Attorneys may be liable for a violation of the duty of care only if they are negligent.\nBut they may be liable for any violation of the duties of loyalty, impartiality, and confidentiality.\nUnder the duty of care, attorneys must always exercise reasonable care under the\ncircumstances. Attorneys are professionals, so the professional standard of care applies. In\nother words, an attorney must exercise the standard of care that an ordinary attorney would\nexercise under similar circumstances. If an attorney breaches the duty of care, then the attorney\nis negligent, and may be liable in tort for malpractice.\nBy contrast, under the duties of loyalty, impartiality, and confidentiality, attorneys must always\navoid conflicts of interest, provide candid advice, and protect confidential information. Any\nviolation of these duties is a tort, irrespective of negligence. In effect, they are analogous to\nstrict liability torts.\nThe Elements of the Tort of Legal Malpractice\nLegal malpractice is a tort, with the same basic elements as any other tort claim: duty, breach,\ncausation, and damages. An attorney has a duty only if an attorney-client relationship exists.\nAccordingly, the plaintiff in an action claiming legal malpractice must prove:\n1.\n2.\n3.\n4.\n5.\n\nExistence of an attorney-client relationship\nBreach of a legal duty\nFactual causation of harm\nProximate causation of harm\nActual damages\n\nLegal Duty\nAttorneys owe legal duties to their clients, but do not owe legal duties to non-clients.\nAccordingly, the threshold question in a malpractice action is whether the plaintiff is a client to\nwhom the attorney owes legal duties.\nMarker v. Greenberg, 313 N.W.2d 4 (Minn. 1981)\nSummary: Theodore Marker hired attorney Robert Greenberg for estate planning\nservices. Among other things, Greenberg prepared deeds conveying real estate to\nMarker and his son as joint tenants. When Marker died, the real estate was subject to\nestate tax. Marker\xe2\x80\x99s son sued Greenberg for malpractice, alleging that if the real estate\nhad been conveyed as tenants in common, it would not have been subject to estate tax.\nThe trial court granted Greenberg\xe2\x80\x99s motion for summary judgment and the appeals court\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c173\naffirmed, holding that Marker\xe2\x80\x99s son lacked an attorney-client relationship with Greenberg,\nand could not bring a malpractice action as a beneficiary of the estate because he\nreceived the property.\nSCOTT, Justice.\nThis is an appeal from an order of the Hennepin County District Court in a legal malpractice\naction brought by the surviving joint tenant against the attorney who drafted the deed. By that\norder the trial court granted respondent Robert Greenberg\'s motion for summary judgment on\nthe grounds that plaintiff could not bring the action absent an attorney-client relationship and\nthat the six-year statute of limitations barred the action since the statutory period began to run in\n1973 when the alleged negligence occurred. We affirm.\nFor purposes of this appeal, the facts are uncontested. Appellant\'s father, Theodore Marker,\nretained respondent, an attorney, for estate planning services. In December 1972 respondent\nprepared a will for appellant\'s father. In August 1973, on behalf of appellant\'s father, respondent\ndrafted deeds which conveyed certain real estate to appellant\'s father and appellant as joint\ntenants.\nAppellant\xe2\x80\x99s father died on December 24, 1977. Because the real estate in question was held by\nappellant and his father as joint tenants, its entire value, $120,000, was included in the\ndecedent\xe2\x80\x99s gross estate for tax purposes.\nAppellant asserts that, if he and his father had held the real estate as tenants in common,\n$20,858.18 in federal and state taxes would have been saved. Appellant commenced this action\nto recover the amount of the additional estate taxes, claiming the loss resulted from\nrespondent\xe2\x80\x99s negligence in not having the real estate conveyed into tenancy in common.\nAppellant was never a client of respondent. Appellant does not allege that he was a beneficiary\nof his father\xe2\x80\x99s estate with respect to this property, but that he was a surviving joint tenant.\nThe trial court granted summary judgment in favor of the respondent and dismissed the\ncomplaint. Therefore, the issue arises as to whether a surviving joint tenant has a cause of\naction for malpractice against the attorney who drafted the joint tenancy deeds when the\nsurviving joint tenant was never a client of the attorney.\nThe general rule in legal malpractice is that an attorney is liable for professional negligence only\nto a person with whom the attorney has an attorney-client relationship and not, in the absence\nof special circumstances such as fraud or improper motive, to anyone else. Courts have\nrecognized exceptions, however, where strict privity is not required. Exceptions are frequently\nfound in cases involving drafting or executing a will.\nMany courts have followed the lead of the California Supreme Court, which declared in Lucas v.\nHamm, that an intended beneficiary may bring an action for legal malpractice against the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c174\ndecedent\'s attorney where the attorney\'s negligent act caused the named beneficiary to lose the\nintended bequest.\nThe relaxation of the strict privity requirement is very limited, however. Especially in probate\nproceedings, this stringent restriction is a necessity to prevent a myriad of causes of action. The\nwill cases listed above which follow Lucas v. Hamm are all situations in which the attorney by\nhis actions produced an instrument that failed to carry out the testamentary intent of the testator,\neither by faulty drafting or by improper attestation. The cases extending the attorney\'s duty to\nnon-clients are limited to a narrow range of factual situations in which the client\'s sole purpose\nin retaining an attorney is to benefit directly some third party. As stated by the Iowa Supreme\nCourt in Brody v. Ruby, \xe2\x80\x9cIt is clear, however, that the third party, in order to proceed successfully\nin a legal malpractice action, must be a direct and intended beneficiary of the lawyer\'s services.\xe2\x80\x9d\nIn determining the extent of an attorney\'s duty to a non-client, courts frequently consider the\nfactors expressed by the Lucas court:\nThe determination whether in a specific case the defendant will be held liable to a third\nperson not in privity is a matter of policy and involves the balancing of various factors,\namong which are the extent to which the transaction was intended to affect the plaintiff,\nthe foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury,\nthe closeness of the connection between the defendant\'s conduct and the injury, and the\npolicy of preventing future harm.\nApplying these factors to the deed drafted by respondent for appellant\'s father reveals that the\nrespondent owed no duty to appellant. This is not a case where the property did not pass to the\nintended recipient upon the death of the testator. The deed was effective at the time it was\nrecorded in 1973. There was no invalidity in the deed. Appellant does not allege that the\ndisposition of the property was contrary to the intent of his father. The benefit which Theodore\nMarker wished to give to his son was the joint ownership of the property, and this was\naccomplished by the documents.\nThe facts of Bucquet v. Livingston, to which appellant compares his situation, are\ndistinguishable. In Bucquet, the beneficiaries of an inter vivos trust alleged professional\nnegligence by the defendant attorney in drafting the trust agreement. The complaint alleged that\nthe attorney was employed to plan the settlor\'s estate and to carry out his intent that the nonmarital half of the trust principal would ultimately pass to the beneficiaries free of estate taxes\nafter his wife\'s death. Because the attorney negligently included a general power of appointment\nin the instrument, additional taxes were imposed which reduced the corpus of the trust passing\nto the beneficiaries. In that case the express purpose of the trust was minimization of taxes. No\nsuch purpose is alleged in the instant case. In Bucquet the desired savings in taxes failed\nbecause of the faulty drafting by the attorney. In the present case, there is no allegation that the\ndeed as drafted failed to accomplish the objective of the client as expressed to the respondent.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c175\nThe facts of the instant case are more similar to those of Hiemstra v. Huston. In that case the\ncourt recognized the exception established in earlier California cases holding an attorney liable\nto an intended beneficiary for defects in drafting of a will. The court nevertheless held that the\ncomplaint failed to state a cause of action in the allegations that under a will drafted by the\ndefendant attorneys the plaintiff son received a smaller bequest than he would have received\nunder an earlier will of testator. The court noted that plaintiff did not assert any legal deficiency\nin the will, nor did plaintiff assert either as a conclusion or by allegation of ultimate facts that the\nwill failed to reflect the intent of the testator. The court concluded that if plaintiff was deprived of\na substantial part of his father\'s estate, it was the result not of any negligence on the part of the\ndefendant attorneys but of the testator\'s intention as expressed in the valid document.\nIn the case before us, the objective of the deed was to transfer ownership of the real estate to\njoint tenancy between the father and the son. The complaint alleges no invalidity in the\ndocuments and no conflict of the result with decedent\'s intentions. The estate taxes that were\ndue at Theodore Marker\'s death were the natural result of the form of ownership chosen by the\ndecedent and not the result of any negligence by respondent. In this case summary judgment\nwas proper. We therefore need not discuss the disputed application of the statute of limitations.\nQuestions:\n1. Why didn\xe2\x80\x99t Marker have an attorney-client relationship with Greenberg?\n2. Was Greenberg negligent? Would Marker\xe2\x80\x99s father have had a malpractice action against\nGreenberg?\n3. Who is the real party in interest: Marker or his father\xe2\x80\x99s estate? Why did Marker\xe2\x80\x99s father\nchoose joint tenancy rather than tenancy in common? What outcome was Marker\xe2\x80\x99s\nfather trying to accomplish? Did Greenberg help him achieve that outcome? All else\nbeing equal, do you think Marker\xe2\x80\x99s father would have wanted to minimize the tax?\nBreach of Duty\nIf an attorney-client relationship exists, then the attorney owes certain legal duties to the client.\nIn order to prevail in a malpractice action, the plaintiff must prove that the attorney breached one\nof those legal duties. However, different duties have different liability standards. For example,\nthe duty of care requires attorneys to exercise reasonable care under the circumstances. But\nthe duty of loyalty requires absolute loyalty.\nEquitania Ins. v. Slone & Garrett, 191 S.W.3d 552 (Ky. 2006)\nSummary: Attorney Laurel Garrett represented Vimont in an effort to prevent\nPavenstedt from gaining control of Equitania Insurance. Vimont filed a malpractice claim\nagainst Garrett, alleging that she provided unsound advice. The trial court instructed the\njury that attorneys are not liable for errors of judgment, and the jury found for Garrett.\nThe Supreme Court reversed, holding that attorneys must exercise ordinary care under\nthe circumstances.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c176\n\nWINTERSHEIMER, Justice.\nThis appeal is from an opinion of the Court of Appeals which affirmed a judgment of the circuit\ncourt based on a summary judgment/jury verdict that rejected the claim of the Equitania\nInsurance Company and its Vimont shareholder group for legal malpractice against Garrett and\nher law firm.\nThe major issues are whether the proper standard for proving liability in a legal malpractice case\nwas followed and whether the instructions given by the trial judge to the jury regarding specific\nfactual issues violated the rule in favor of barebones jury instructions.\nTwo groups of shareholders, the Vimont group, composed of four of the shareholders, and the\nPavenstedt group, composed of a group of shareholders led by Johann Pavenstedt began to vie\nfor control of Equitania, an insurance company which provided insurance for horse owners.\nAfter the Vimont group bought out the Pavenstedt group, the company continued to decline in\nits efforts to return a profit. Vimont eventually entered an agreement to sell the book of business\nto Markel Insurance Company. That deal was closed in January 1995. In March of that year, the\nVimont group filed a civil action in circuit court, seeking to rescind the agreement between them\nand the Pavenstedt group. That case was assigned to Fayette Circuit Judge Gary Payne. A\njudgment was rendered against the Vimont group and it was upheld by the Court of Appeals in\nan unpublished opinion.\nLaurel Garrett and the law firm of Slone & Garrett represented the Vimont group in its attempt to\ngain control of the company prior to Vimont buying the shares of Pavenstedt. As a result of that\nrepresentation, Vimont filed a civil action against Garrett in circuit court in February of 1997,\nalleging legal malpractice by Garrett in connection with her representation. That case was\nassigned to Fayette Circuit Judge John R. Adams and it is the principal subject of this appeal.\nJudge Adams ruled against Vimont and the Court of Appeals upheld that decision. This appeal\nfollowed.\nThis case is a complex legal malpractice claim brought by Vimont against Garrett alleging that\nshe negligently advised them during the midst of the shareholder dispute. They claim that\nGarrett negligently failed to properly advise them as to how to retain control of the corporation;\nthat the methods she advised violated the insurance code; violated a fiduciary duty to\nshareholders; was unethical, and was substantially more expensive. The circuit judge granted\nGarrett a partial summary judgment based on his interpretation of the contract which was\ndifferent from the interpretation made by the circuit judge in the earlier civil case. The other\nportion of the claim was resolved in favor of Garrett by a jury verdict. The Court of Appeals\nupheld the decision of the circuit court, and this Court granted discretionary review.\nI. Jury Instructions\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c177\nCorrect instructions are absolutely essential to an accurate jury verdict. The fundamental\nfunction of instructions is to tell the jury what it must believe from the evidence in order to\nresolve each dispositive factual issue in favor of the party who has the burden of proof on that\nissue.\nWe should note it is well recognized that the function of instructions is only to state what the jury\nmust believe from the evidence. There should not be an abundance of detail but the jury\ninstructions should provide only the \xe2\x80\x9cbare bones\xe2\x80\x9d of the question for the jury. The bare bones\nmay then be fleshed out by counsel during closing argument.\nThe jury instructions given by the trial court over the objection by Vimont were not an accurate\nstatement of the law regarding legal malpractice in Kentucky. Vimont objected to the instructions\nand tendered instructions of their own which were not used. The instructions given follow:\nInstruction No. 2: It was the duty of Defendant, Laurel Garrett, in undertaking the legal\nrepresentation of the plaintiffs, to possess to an ordinary extent the technical knowledge\ncommonly possessed in her profession, to exercise that degree of care and skill which\nan ordinary, reasonably competent lawyer would exercise under the same or similar\ncircumstances. Provided, however, a lawyer cannot be held responsible for errors in\njudgment or for advising a course of action even if that course of action ultimately proves\nto be unsuccessful.\nThe given instructions were incorrect for several reasons. It was properly preserved because\nthere was an objection to Instruction No. 2 in the submitted instructions.\nKentucky law does not provide for an exception for attorney liability for errors in judgment. A\ncase relied on by the Court of Appeals, Daugherty v. Runner, stated that misjudgment of the law\nwill generally not render a lawyer liable. However, Daugherty did not state that a lawyer can\nnever be held liable for an error in judgment. The tendered instructions did not advise the jury\nthat it had to be an error of law which precluded liability, nor did it inform the jury that there are\ncircumstances in which misjudgment of the law could be a basis for liability. There can be many\ncircumstances in which lawyers can commit errors of judgment which deviate from the standard\nof care. Whether an error of judgment is legal malpractice is a question of fact for the jury.\nVimont offered an expert, Manning Warren, to evaluate the methods undertaken by Garrett to\nassist the company in its shareholders dispute. Specifically, Warren testified that Garrett should\nhave pursued an administrative process with the Department of Insurance to join the Vimont\ngroup to the Pavenstedt agreement which, if successful, would have resulted in the\nshareholders maintaining control of Equitania and would have resolved the issue. This would\nhave avoided a prolonged battle with Pavenstedt and would have avoided spending over two\nmillion dollars by buying the stock. They also would have avoided the issues with the\nDepartment of Insurance regarding change of control as a result of their purchase. It was their\nconclusion that Garrett committed ongoing malpractice by failing to advise them of change of\ncontrol issues. Warren further testified that it was a deviation to fail to pursue this option.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c178\nHowever, it is apparently undisputed that the Department of Insurance would not have approved\na Pavenstedt sale even if it had been properly submitted.\nKentucky should not allow lawyers to avoid liability for committing errors in judgment which the\naverage reasonably prudent lawyer would not commit. Any avoidance of liability should only be\nallowed for errors of judgment made in absolute good faith.\nHere, Garrett failed to plead or present evidence regarding her alleged errors in judgment so as\nto justify her decision. The error in judgment instruction indirectly required the jury to define and\nunderstand abstract legal principles. The jury could not have reasonably understood the\ndistinction between errors in judgment and legal malpractice. It is of interest to note that the\ninstruction provided by Vimont in this case is similar to the instructions provided in Daugherty.\nThe proper jury instruction must follow a form similar to that in Palmore:\nIt was the duty of Defendant in undertaking the legal representation of Plaintiff to\nexercise the degree of care and skill expected of a reasonably competent lawyer acting\nunder similar circumstances. If you are satisfied from the evidence that Defendant failed\nto comply with this duty and that such failure was a substantial factor causing the loss,\nyou will find for Plaintiff; otherwise you will find for Defendant.\nThis instruction form contains the elements prescribed in Daugherty without requiring the jury to\nunderstand abstract legal principles. The jury is able to determine from the evidence whether\nthere was a breach of duty and whether that breach caused the loss.\nConsequently, under the circumstances regarding the instructions, this matter is reversed and\nremanded. The decisions of the Court of Appeals and the trial court are reversed and this matter\nis remanded to the trial court for a jury determination as to all factual issues.\nQuestions:\n1. Why was Garrett\xe2\x80\x99s advice unsound? What was her defense?\n2. How should juries evaluate malpractice claims alleging violations of the duty of care?\nWhat is the correct standard of liability?\nCausation of Harm\nClients can recover for malpractice only if their attorney\xe2\x80\x99s negligence was both the \xe2\x80\x9cfactual\xe2\x80\x9d or\n\xe2\x80\x9cbut for\xe2\x80\x9d cause and proximate cause of a legally cognizable harm. An attorney who is negligent\nbut causes no harm is not liable for malpractice.\nCourts typically apply the \xe2\x80\x9csuit within a suit\xe2\x80\x9d or \xe2\x80\x9ctrial within a trial\xe2\x80\x9d doctrine to legal malpractice\nactions. Under this doctrine, the factfinder must determine not only how the attorney\xe2\x80\x99s breach of\nduty affected the action, but also how the action would have ended without the breach of duty.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c179\nIn other words, the client must prove that the attorney\xe2\x80\x99s breach of duty caused a foreseeably\nworse outcome.\nAccordingly, an attorney is not liable for malpractice if the client\xe2\x80\x99s injury was inevitable. For\nexample, an attorney who negligently fails to file an action with no chance of success is not\nliable for negligence. But what if the action had a small chance of success? And what if the\naction had no chance of success, but still had settlement value?\nIn an action for transactional malpractice, the client must prove that the attorney\xe2\x80\x99s breach of\nduty caused a worse outcome than non-breach would have caused. For example, the client\ncould show that alternative actions would have produced a better result.\nThe client must also prove that the attorney\xe2\x80\x99s negligence was the proximate cause of the injury.\nIn other words, the plaintiff must provide that a reasonable attorney under the circumstances\nwould have foreseen the injury.\nIn theory, causation is a straightforward concept. Attorneys are liable for malpractice only if their\nactions caused a harm that they could have foreseen. But in practice, causation of harm and\nforeseeability can be difficult to determine in the face of diverse probabilities and uncertain\ncounterfactuals.\nFor example, consider the following scenarios:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nThe attorney advises the client not to accept a $10,000 settlement for a $100,000\ndamages claim, and the jury rules for the defendant.\nThe attorney advises the client not to accept a $10,000 settlement for a $100,000\ndamages claim, and the judge grants the defendant\xe2\x80\x99s motion for summary judgment.\nThe attorney advises the client not to accept a $10,000 settlement for a $100,000\ndamages claim, and the judge grants the defendant\xe2\x80\x99s motion to dismiss.\nBefore discovery, the attorney advises the client not to accept a $10,000 settlement for a\n$100,000 damages claim before discovery. After discovery, the client accepts a $5,000\nsettlement.\nThe attorney advises the client to accept a $10,000 settlement for a $100,000 damages\nclaim, and the client later obtains a $50,000 settlement.\nThe attorney advises the client to accept a $10,000 settlement for a $100,000 damages\nclaim. The client accepts the settlement, but could have obtained a $20,000 settlement.\n\nIn each of these circumstances, has the attorney caused a foreseeable harm?\nDaugherty v. Runner, 581 S.W.2d 12 (Ky. Ct. App. 1978)\nSummary: Lula Daugherty Roach died in the hospital after a car accident. Runner\nrepresented Roach\xe2\x80\x99s estate, and filed an action against the other driver, but not against\nthe hospital. The estate eventually hired another attorney to file a medical malpractice\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c180\naction, but it was barred by the statute of limitations. The estate filed a malpractice\naction against Runner for failing to file a medical malpractice action. The jury found for\nRunner, but also held that the estate would have recovered $146k in a medical\nmalpractice action. The court of appeals affirmed, holding that Runner did not\nnecessarily violate the duty of care.\nHAYES, Judge.\nThis appeal is from a judgment entered pursuant to a jury verdict which exonerated the\nappellee, an attorney, from the charges of legal malpractice. The charges of the legal\nmalpractice claim arose from a medical malpractice cause of action on behalf of the deceased,\nLula Daugherty Roach. This type of action is commonly referred to as a \xe2\x80\x9csuit within a suit.\xe2\x80\x9d The\nbasis for the legal malpractice claim is that appellee Runner, while representing the deceased\nRoach for injuries sustained in an automobile accident, failed to pursue a medical malpractice\nclaim by the estate of Roach against the hospital where Roach was treated for her injuries after\nher accident and against the doctors who treated her, until her claim was barred by the statute\nof limitations.\nThe jury found for Runner on the legal malpractice claim and additionally found that the\nappellant would have recovered on the medical malpractice case, if suit had been timely filed, in\nthe amount of $146,123.75. Both parties appealed.\nThe appellant contends that the trial court erred in submitting the issue of Runner\xe2\x80\x99s negligence\nto the jury and in failing to instruct the jury properly.\nAppellee\'s cross-appeal is of a protective nature wherein it is contended that if we reverse the\ntrial court based on appellant\xe2\x80\x99s assignments of error, then appellee believes the jury verdict\nawarding appellant $146,123.75 on his medical malpractice claim is erroneous because of\nimproperly admitted evidence.\nWe will not reach the claim of appellee on cross-appeal since we affirm the judgment of the\nlower court.\nOn February 22, 1972, Mrs. Roach and her husband Russell were involved in an automobile\naccident near Richmond, Kentucky. After receiving emergency medical treatment in Richmond,\nMrs. Roach was transferred to St. Joseph Hospital in Lexington, Kentucky. She was admitted on\nFebruary 22, 1972, under the care of an orthopedic doctor, George Gumbert, Jr. Mrs. Roach\ndied in the hospital on March 17, 1972. The official cause of death listed on the certificate of\ndeath was bronchial pneumonia due to, or as a consequence of, generalized peritonitis and\nbacterial endocarditis. On the date of Mrs. Roach\'s death, her husband Russell, individually and\nas executor of the estate of Mrs. Roach, entered into a contract with attorney Runner to the\neffect that Runner was to \xe2\x80\x9cinstitute a claim for damages against any and all responsible parties\nas a result of injuries received upon the 22nd day of February, 1972.\xe2\x80\x9d The contract was a\nstandard contract approved by the Louisville Bar Association.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c181\n\nA later contract, dated July 28, 1973, was entered into between James Russell Roach and\nanother attorney, whereby this \xe2\x80\x9csecond attorney\xe2\x80\x9d was to represent Roach, individually and as\nadministrator of the estate of Lula Roach, in the medical malpractice claim. James Russell\nRoach was a nonresident, so the present appellant, Byrd E. Daugherty, was appointed ancillary\nadministrator.\nSuit was filed on August 1, 1973, in Fayette Circuit Court on behalf of Daugherty by his present\nattorney, against St. Joseph Hospital and others based on the medical malpractice claim. The\ntrial court in that case granted a summary judgment against Daugherty and the estate of Lula\nRoach because the suit was not filed within the period of limitations.\nRunner testified he was not hired to represent the estate of Lula Roach on a medical\nmalpractice claim; made an investigation of the facts surrounding the auto accident; filed suit on\nsame in Federal Court for the Eastern District of Kentucky at Lexington against the driver of the\nother auto in the accident, and never suspected the possibility of a medical malpractice claim.\nAppellant contends it is what Runner did not do that makes him liable for malpractice. It is\nasserted he did not examine the hospital records until after the statute of limitations had run on\nany medical malpractice claim, and that he never advised his client that he did not handle\nmedical malpractice cases. There was also testimony on behalf of appellant that Russell Roach,\nwho had died prior to the trial, had telephoned Runner in January, 1973, inquiring of Runner the\nstatus of any medical malpractice investigation Runner was conducting. Runner denied ever\nhaving such a conversation. It is uncontradicted, however, that appellant hired the \xe2\x80\x9csecond\nattorney\xe2\x80\x9d on March 15, 1973, to represent him in the medical malpractice claim against St.\nJoseph Hospital and others.\nThe Fayette Circuit Court had determined that the statute of limitations began to run on the\nmedical malpractice claim \xe2\x80\x9con March 17, 1972, and certainly no later than July 20, 1972, when\nthe record of the decedent\'s treatment was fully complete.\xe2\x80\x9d From the evidence in the record and\nthe legal briefs filed on behalf of the parties, it is unclear why the second attorney, who accepted\na retainer fee, did not file the medical malpractice claim within the period of time permitted by\nthe statute and case law of this Commonwealth.\nThe appellant contends that the trial court erred in (1) submitting the question of the attorney\'s\nnegligence to the jury; (2) allowing an expert opinion to be presented to the jury based upon\nimproper evidence; and, (3) in failing to instruct the jury that the fact that other hired counsel\nmight have been able to toll the statute of limitations was no defense to appellee Runner.\nThe standard of care is generally composed of two elements \xe2\x80\x94 care and skill. The first has to\ndo with care and diligence which the attorney must exercise. The second is concerned with the\nminimum degree of skill and knowledge which the attorney must display.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c182\nIn determining whether that degree of care and skill exercised by the attorney in a given case\nmeets the requirements of the standard of care aforementioned, the attorney\xe2\x80\x99s act, or failure to\nact, is judged by the degree of its departure from the quality of professional conduct customarily\nprovided by members of the legal profession.\nAs it would be in negligence cases generally, the question of whether the conduct of the\nattorney meets the standard of care test is one for the trier of the facts to determine.\nHaving determined that the standard of care an attorney owes his client is not that of a\n\xe2\x80\x9creasonable man\xe2\x80\x9d under the circumstances, but is that care and skill as men of the legal\nprofession commonly, or ordinarily, possess and exercise under the circumstances, and having\ndetermined that this is generally a question for the trier of the facts, we look now at the facts of\nthe instant case.\nThe appellant Daugherty contends the trial court erred in submitting the negligence of appellee\nRunner to the jury. He in effect is saying he, Daugherty, was entitled to a directed verdict on this\npoint because Runner was negligent as a matter of law.\nAppellant was required to prove in the legal malpractice suit (1) that Runner was employed by\nappellant; (2) that he neglected his duty to exercise the ordinary care of a reasonably competent\nattorney acting in the same or similar circumstances; and (3) that such negligence resulted in\nand was the substantially contributing factor in the loss to the client.\nThe appellant has presented two theories in support of his argument that he was entitled to a\ndirected verdict on the question of Runner\xe2\x80\x99s negligence. The first is that Runner was retained to\nbring all possible legal actions resulting from the injuries and death of Mrs. Roach, including a\nmedical malpractice action, if appropriate, and that he failed to carry out this duty. This\nargument is clearly without merit. The written contract between the parties recited that Runner\nwas retained \xe2\x80\x9cto institute a claim for damages against any and all responsible parties, as a\nresult of injuries received upon the 22 day of February, 1972.\xe2\x80\x9d While there was some testimony\nabout a conversation with Runner regarding a medical malpractice action, the evidence was\ndisputed on that matter, and the question of whether Runner had any duty to handle any\nmedical malpractice case was certainly one for the jury.\nAppellant\'s second theory in support of his directed verdict argument seems to be that even if\nRunner was not employed specifically to pursue a medical malpractice action, that he\nnevertheless had a duty to obtain and examine the medical records of the patient, to investigate\nthe treatment procedures administered to her, and to inform his client that there may have been\nsome question about the medical care and treatment she received, but that he did not handle\nmedical malpractice. Appellee\xe2\x80\x99s contention on this issue is simply that Mr. Runner was not\nretained under the contract to handle a medical malpractice case, and he therefore had no\nduties in that regard.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c183\nWe are not ready to hold that Mr. Runner had absolutely no duties to his client with regard to a\nmedical malpractice action simply because the written contract did not specifically mention a\nmalpractice suit. To do so would require the client, presumably a layman who is unskilled in the\nlaw, to recognize for himself all potential legal remedies. An attorney cannot completely\ndisregard matters coming to his attention which should reasonably put him on notice that his\nclient may have legal problems or remedies that are not precisely or totally within the scope of\nthe task being performed by the attorney.\nOn the other hand, we certainly cannot say that Mr. Runner was neglectful as a matter of law.\nThere was considerable testimony concerning Runner\xe2\x80\x99s negligence, or lack of it. There was\nexpert testimony from two attorneys, one for each side.\nRunner\xe2\x80\x99s testimony, in summary, was that he was hired to represent the Roaches only for the\ninjuries Mrs. Roach sustained as a result of the automobile collision of February 22nd. He\ntestified that he did not handle medical malpractice claims because he was not competent to do\nso. He had never processed one. He testified that the fact Mrs. Roach entered the hospital with,\naccording to the hospital admission report, multiple contusions and abrasions, a fractured nose,\nfractured right shoulder and a compressed fracture of the spine, and that she died in the\nhospital some thirty (30) days later, did not arouse his suspicion of a medical malpractice claim.\nHe did not review the hospital records until he filed the wrongful death action on behalf of Mrs.\nRoach in Federal Court in Lexington, Kentucky, on June 9, 1972. Runner\xe2\x80\x99s law associate, who\nactually reviewed the medical records on June 9, 1972, testified the records were incomplete as\nthere was no autopsy report in the medical records on June 9th.\nRunner further testified that no one representing the deceased Mrs. Roach ever called to his\nattention the possibility of a medical malpractice claim until the \xe2\x80\x9csecond attorney\xe2\x80\x9d previously\nmentioned contacted him some few days before the statute of limitations ran on the medical\nmalpractice claim. Runner\'s testimony was that he told this other attorney to \xe2\x80\x9cgo ahead\xe2\x80\x9d with the\nmedical malpractice claim.\nAppellant offered proof that Runner was contacted by members of Mrs. Roach\'s family\nconcerning the medical malpractice case long before the statute ran. They were concerned with\nwhat Runner was doing about the medical malpractice case. The appellant produced expert\ntestimony from a local lawyer to the effect that Runner\'s failure to inquire into the cause of death\nof Mrs. Roach and his failure to review the medical records was not consistent with good legal\npractice and, in fact, was a substantial departure therefrom.\nThe other important testimony was that the Roach family, including Daugherty, a brother of Mrs.\nRoach, had discussed, among themselves, the medical malpractice case as early as December,\n1972. They had in fact contacted two attorneys in Lexington, who declined the case. They were\naware of the statute of limitations.\nThe family then proceeded to northern Kentucky, where on March 15, 1973, they employed the\n\xe2\x80\x9csecond attorney\xe2\x80\x9d to represent the estate in the medical malpractice case. He filed no complaint.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c184\nSome time after July 28, 1973, he turned the case over to the appellant\'s current attorney, who\non August 1, 1973, filed a medical malpractice claim in Fayette Circuit Court which was\nsubsequently dismissed as barred by the statute of limitations.\nUnder these circumstances the question of whether Runner had exercised the degree of care\nand skill expected of a reasonably competent attorney was a question for the jury to decide.\nThis is true especially in light of the fact that there was disputed testimony concerning whether\nthe possibility of a medical malpractice action had been discussed with Runner.\nThe issue of Runner\'s negligence was submitted to the jury under the following instructions:\n4. It was the duty of the defendant, E. Michael Runner, Attorney at Law, in undertaking\nthe legal representation of the Estate of Lula Daugherty Roach, to exercise that degree\nof care and skill expected of a reasonably competent lawyer acting in the same or similar\ncircumstances about which you have heard evidence, and this general duty, included the\nfollowing specific duties:\n(A) Not to undertake representation in a legal matter in which he knew or should\nhave known he was not competent without associating with himself a lawyer that\nwas competent to handle it;\n(B) Not to undertake representation in a legal matter without preparation\nadequate in the circumstances.\n5. The Jury will answer the following interrogatory: Do you believe from the evidence that\nthe defendant, E. Michael Runner, failed in one or more of the duties imposed upon him\nby instruction number 4, and such failure was the substantial factor in the Estate of Lula\nDaugherty Roach not recovering the award set out in instruction number 3 and\nincorporated in Verdict A?\nNine of the jurors answered the question in the negative. While we may have found differently\nhad we sat as jurors in this case, we believe there is sufficient evidence to support this jury\'s\nverdict, and we therefore will not disturb it. Based upon the conflicting evidence, we fail to see\nhow Runner was negligent as a matter of law.\nWe note that the trial court\'s instruction mistakenly required the jury to find that Runner\xe2\x80\x99s breach\nof duty, if any, was \xe2\x80\x9cthe\xe2\x80\x9d substantial factor in the plaintiff\xe2\x80\x99s failure to recover. The instruction\nshould have read, \xe2\x80\x9ca\xe2\x80\x9d substantial factor. However, the trial court was not made aware of the\nerror by objection, and it has not been raised on appeal, nor could it be. For this reason we are\nnot able to review the question. In any event, it does not appear to be so substantial as to have\ncaused the plaintiff any prejudice.\nIn conclusion, we would add that we do agree somewhat with a statement appellant makes in\nhis well-written brief. Appellant states thusly:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c185\nPerhaps the issue that is involved in this case is far beyond the instant action, and must\nbe laid at the doors of the Bar as a whole and more specifically, appellee. Maybe we, as\na profession, have not discharged our responsibility to inform the public as a whole, and\nmore specifically, Mr. Roach, that we specialize and limit our practice. However, in the\nend result, the effect on the client is the same; the public expects, and has the right to\ndemand, that their legal affairs will be approached with expertise and initiative and\nanything short of that is a violation of the trust and confidence reposed in a member of\nour profession.\nTo that, we would simply repeat that all the evidence in this case was submitted to a jury of\ntwelve citizens of this community, nine of whom found for the attorney. Even though we may\nhave found differently had we sat as jurors in this case, we cannot disturb their verdict, as it was\nsufficiently supported by the evidence.\nQuestions:\n1. What was the harm to Roach\xe2\x80\x99s estate? Could Runner have prevented that harm? Could\nanyone else have prevented the harm?\n2. What was the error in the jury instructions? Do you agree with the court\xe2\x80\x99s conclusion that\nthe error was not prejudicial?\nTIG Ins. v. Giffin Winning Cohen & Bodewes, 444 F. 3d 587 (7th Cir. 2006)\nSummary: Giffin Winning represented Illinois State University in a gender discrimination\naction, and failed to produce three gender equity studies to Joel Bellows, attorney for the\nplaintiffs. Soon afterward, TIG and Latham & Watkins took over ISU\xe2\x80\x99s defense. Soon\nafterward, Gorrell gave Bellows the studies and claimed they were based on a\nnonexistent database. Bellows moved to sanction Giffin Winning and ISU for not\nproducing the database, and TIG paid Latham & Watkins $1.2 million to defend ISU. The\naction ultimately settled, and TIG filed a malpractice action against Giffin Winning for\nfailing to produce the studies. The district court dismissed the action, and the circuit\ncourt affirmed, holding that TIG failed to allege proximate cause because the injury was\nnot foreseeable.\nEVANS, Circuit Judge.\nTIG Insurance Company appeals the dismissal of its malpractice case against the Giffin\nWinning law firm and one of its attorneys, Carol Hansen Posegate.\nTo explain the malpractice claim we must reach back to the underlying lawsuit, in which Giffin\nWinning, at least for a time, represented Illinois State University (ISU) in a class-action, genderdiscrimination lawsuit brought by several female professors. In the suit, the plaintiffs contended\nthat they were being paid less than male professors and that ISU retaliated against female\nprofessors who complained about the discrimination. Their attorney was Joel Bellows. TIG was\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c186\nISU\xe2\x80\x99s liability insurer at the time and it paid the attorney fees which are at the heart of the\npresent malpractice action; TIG, in turn, was reimbursed by its reinsurers.\nThe malpractice alleged in the present case arose out of discovery problems in the case. The\nmajor problem involved Giffin Winning\xe2\x80\x99s failure to produce three documents called gender equity\nstudies (two of which are at issue here) in their response to a discovery request. The response\nwas signed in October 1996. A month later the case was stayed. Soon thereafter, the law firm of\nLatham & Watkins filed an appearance on behalf of ISU and essentially took control of ISU\xe2\x80\x99s\ndefense, though Giffin Winning remained of record. Latham had an attorney-client relationship\nwith ISU\xe2\x80\x99s insurer TIG. Giffin Winning did not.\nThe facts show that Giffin Winning received two gender equity studies from ISU in 1994 \xe2\x80\x94 while\nthe Varner case was still pending before the Equal Employment Opportunity Commission. Two\nyears later, when the law firm received the second request for documents, the subject of the\nOctober 1996 response at issue here, they routed the request to William Gorrell, the former\nexecutive director for Information Systems and the head of the Planning Policy department at\nISU. He did not at that time forward the studies to Giffin Winning for production and the law firm\ndid not produce them on its own. On this point, Judge Mihm later said that Gorrell was the one\nwho "dropped the ball entirely."\nDuring the stay in the case, Bellows talked with Gorrell, who by then was no longer employed by\nISU and had his own lawsuit pending against the school for wrongful termination. He\nindependently provided Bellows with the gender equity studies. He also executed an affidavit\ndetailing particulars of a \xe2\x80\x9cplanning policy database\xe2\x80\x9d on which he said the studies were based.\nOnce the stay was lifted, Bellows confronted Latham with the studies. (The Latham firm was\nnow representing ISU). Bellows demanded that ISU turn over the database on which he alleged\nthe studies were based. Apparently thinking the best defense is a good offense, Latham\xe2\x80\x99s first\nresponse apparently was to point fingers, saying Bellows had also not adequately complied with\ndiscovery requests. Also at this time, Latham began preparing a motion to disqualify Bellows for\nimproperly soliciting privileged information from Gorrell.\nFor his part, Bellows filed a motion for sanctions against both ISU and Giffin Winning, in part\nbased on the failure to produce the gender equity studies. As relevant here, Bellows\xe2\x80\x99 contention\nin his motion for sanctions was not simply that the studies were not produced. After all, he now\nhad the studies. Rather, he claimed that the gender equity studies were not produced because\nof a conspiracy to hide the \xe2\x80\x9cPlanning Policy database.\xe2\x80\x9d To have produced the studies, he\nargued, \xe2\x80\x9cwould have alerted the Varner plaintiffs to the existence of the databases.\xe2\x80\x9d\nWe now arrive at the essence of the case \xe2\x80\x94 the pivotal facts about the database. At a 4-day\nhearing on the pending motions, Gorrell testified that the database contained variables relevant\nto the issue of gender equity and was maintained in a format which enabled a user to prepare\ncomparative studies. He testified that the gender equity studies were prepared from this\ndatabase. He said he had done one of the studies himself, though he also said he had never\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c187\npersonally accessed the database. The actual data processing, he said, was done by his\nresearch assistant, Anna Wells, and her preparation of the data for his 1994 study would have\ntaken her no more than a day or two using the database:\nQ How long did it take Anna Wells to compile the information for the 1994 study?\nA It could be done in a day or two.\nThat apparently was news to Wells. She testified that she did not use any database in compiling\nthe data.\nQ Ms. Wells, when you collected the information reflected in these tables, was there a\nsingle source that you could go to to collect all the information reflected in the tables?\nA No.\nQ Was there a single database maintained by the Planning Policy department that\ncontained all of the information reflected in these tables?\nA No.\nShe used hard copy (probably the same 279 banker boxes of material which had, in fact, been\nproduced to Bellows), and it took her \xe2\x80\x9ca few weeks, several weeks\xe2\x80\x9d to locate the information and\nformat it for use. Why? Because, as Judge Mihm found, there was no database and never had\nbeen:\nI don\'t believe that the plaintiffs have ever established the existence of the kind of\ndatabase that I thought was being alleged here, that there was some button at ISU that\ncould be punched that would involve a print-out of all this information. That clearly is not\ntrue. The nonexistence of the database \xe2\x80\x94 which Bellows said there was an alleged\nconspiracy to hide \xe2\x80\x94 is not seriously contested.\nNevertheless, Judge Mihm sanctioned Giffin Winning $10,000 for discovery lapses, a sanction\nwhich was later vacated. Judge Mihm, however, wisely denied Bellows\xe2\x80\x99 request for a default\njudgment based on the failure to produce the gender equity studies. He remarked that \xe2\x80\x9cI don\'t\nbelieve it was appropriate \xe2\x80\x94 but even if I had ordered that, I think that would have been\nreversed on appeal.\xe2\x80\x9d In addition, although he denied Latham\'s motion to disqualify Bellows\nbecause of his contact with Gorrell, Judge Mihm sanctioned Bellows $10,000 as well.\nUltimately, the case was settled; mercifully, we think.\nWe now get to the present malpractice action that TIG filed against Giffin Winning in which the\ndamages TIG alleges are the attorney fees it paid Latham to defend against the sanction motion\n\xe2\x80\x94 a whopping $1.2 million, give or take, for the work of 27 attorneys and various paralegals. It\nseems that when Latham said it took the motion seriously, it meant it. As we said, TIG paid the\nbill and was subsequently reimbursed by its reinsurers.\nThe elements of a legal malpractice action in Illinois are well-settled. They are: \xe2\x80\x9c(1) the\nexistence of an attorney-client relationship that establishes a duty on the part of the attorney; (2)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c188\na negligent act or omission constituting a breach of that duty; (3) proximate cause; and (4)\ndamages.\xe2\x80\x9d A legal malpractice case is similar to any other negligence claim, and traditional\nprinciples apply. Proximate cause describes two distinct requirements \xe2\x80\x94 cause in fact and legal\ncause. Cause in fact exists only if the defendant\'s conduct was a \xe2\x80\x9cmaterial element and a\nsubstantial factor in bringing about the injury.\xe2\x80\x9d Legal cause, on the other hand, is largely a\nquestion of foreseeability. The relevant inquiry is whether \xe2\x80\x9cthe injury is of a type that a\nreasonable person would see as a likely result of his or her conduct.\xe2\x80\x9d The occurrence must have\nbeen \xe2\x80\x9creasonably\xe2\x80\x9d foreseeable: \xe2\x80\x9cNot what actually happened, but what the reasonably prudent\nperson would then have foreseen as likely to happen, is the key to the question of\nreasonableness.\xe2\x80\x9d\nThis is not the same as (but, in this case, necessarily a bit difficult to distinguish from) a\ndetermination as to whether the fees themselves are reasonable. For purposes of proximate\ncause, if the fees do not reflect work reasonably, foreseeably related to the negligence alleged\nin the case, it does not matter that in some other sense they might be \xe2\x80\x9creasonable.\xe2\x80\x9d We draw\nthis distinction in response to TIG\'s argument, that because the fees were paid, they are prima\nfacie reasonable. In this situation, we find the argument breathtaking, say nothing of irrelevant.\nProximate cause is the issue on which this case falters. Having said that, we recognize that the\nIllinois courts indicate that proximate cause should ordinarily be decided not as a matter or law,\nbut by a trier of fact. However, in a situation in which it is clear as a matter of law that the injury\ncould not have been foreseeable, Illinois courts have upheld summary judgment on the issue.\nThe situation before us is such a case.\nThe fundamental negligence allegedly committed by Giffin Winning was a failure to produce\ndocuments \xe2\x80\x94 especially gender equity studies \xe2\x80\x94 pursuant to a discovery request. The\nattorneys had routed the request to Gorrell, who was at that point still employed by ISU. He did\nnot forward the studies to the attorneys. However, the attorneys had copies of the studies,\nwhich they also failed to produce. This is a clear breakdown of the discovery process, which we\ninfer was not going at all smoothly on either side of this case.\nIn this all-too-common situation, the question for us is whether it would be reasonably\nforeseeable that a failure to produce these documents would result in the injury alleged here.\nCould the attorneys foresee that Gorrell, who failed to produce the documents when they turned\nthe request over to him, would then, after he became disgruntled with ISU, independently\nprovide the documents to Bellows? Beyond that, would reasonable people foresee that Gorrell\nwould mislead Bellows about a database which did not exist? Would reasonable people then\nthink that, upon hearing Gorrell\'s story, Bellows\xe2\x80\x99 first impulse would be to move for sanctions\nincluding default judgment in the case? Would reasonable people foresee that, next, a large law\nfirm, apparently thinking of Judge Mihm as a bit trigger-happy, would jump into high gear out of\nfear of default judgment and launch an army of 27 attorneys, plus paralegals, to defend against\nthe possibility that Judge Mihm might grant default judgment on the basis of an alleged\nconspiracy to hide something which does not exist? In other words, was the Latham response to\na failure to produce documents and the resulting injury foreseeable?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c189\n\nWe think it was not as a matter of law. Our point can be illustrated by a very different sort of\nnegligence action. In Abrams, the city failed to send an ambulance for a woman, Abrams (of\ncourse), who was in labor. A friend, who then drove her to the hospital, ran a red light and\ncollided with a car driven by a drug-and-alcohol-impaired driver with a suspended license.\nAbrams was seriously injured and spent 2 weeks in a coma; sadly, her baby died. The court\nfound, however, that as a matter of law there was no proximate cause. The city could not have\nforeseen the situation that unfolded. Perhaps a bit callously, the court remarked that \xe2\x80\x9cmillions of\nwomen in labor make it safely to the hospital each year by private transportation.\xe2\x80\x9d\nIt is also true \xe2\x80\x94 though less tragically so \xe2\x80\x94 that countless failures to produce documents occur\nin the federal courts every year. That is not a good thing. But we are not at a point at which it is\nforeseeable that such a failure will spawn a million-dollar bill for attorney fees. If it were, litigation\nwould become more of a blood sport than it already is. Lawyers would be even more obsessive\nabout irrelevant and tedious details. No good could come of it.\nThere is, in fact, nothing which distinguishes the failure to produce in this case with countless\nothers. Judge Mihm himself made this point in response to Bellows\xe2\x80\x99 argument that this was the\nworst discovery abuse he had ever seen. Judge Mihm said:\nBut you said in your 34 years of practice this was the most shocking thing you had ever\nseen in terms of this discovery issue. I wonder what kind of practice you\'ve had if that\'s\nthe case because, boy, in the scheme of things, I\'ve seen things 50 times worse than\nthis.\nWhat is foreseeable as a result of a failure to produce documents is the reasonable procedure\nset out in Civil Rule of Civil Procedure 37, which provides for sanctions only after other\nreasonable efforts to work out disagreements fail. It may be that, as Judge Mihm also said, that\ndid not happen enough in this case. But ISU and Giffin Winning could hardly be expected to\nforesee all this trouble over a phantom database. Why would they? It was ISU\'s alleged\ndatabase and Giffin Winning was representing ISU at the time. They knew of no database; they\nwere hiding no database; there was no database. For Giffin Winning\'s carelessness in failing to\nproduce documents (which Bellows had in his possession), the sanction of $10,000 might well\nhave been sustained on appeal. But as a matter of law, the injury alleged here was not\nreasonably foreseeable.\nQuestions:\n1. What was TIG\xe2\x80\x99s injury? Did Giffin Winning\xe2\x80\x99s negligence cause that injury?\n2. Why did the court hold that TIG\xe2\x80\x99s injury was not reasonably foreseeable? Was TIG\xe2\x80\x99s\ninjury a reasonably foreseeable risk?\nDamages\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c190\nThe plaintiff in a legal malpractice action can only recover actual damages, and can only\nrecover damages that were reasonably foreseeable by the defendant. As a consequence, the\nplaintiff must prove the amount of damages, and cannot recover speculative damages.\nKituskie v. Corbman, 714 A. 2d 1027 (Pa. 1998)\nSummary: Kituskie was injured by Trapp in a car accident while on vacation in California.\nHe returned home to Pennsylvania and hired attorney Corbman to represent him in a tort\naction. Corbman negligently failed to file an action within California\xe2\x80\x99s two-year statute of\nlimitations, and advised Kituskie to file a legal malpractice action. Trapp\xe2\x80\x99s insurance\npolicy had a $25,000 maximum, but the jury awarded Kituskie $2.3 million in damages\nagainst Corbman. The appellate court vacated the judgment and remanded, holding that\nthe jury must consider the collectability of damages, and that the defendant bears the\nburden of proof that damages are not collectable. The Supreme Court affirmed.\nCASTILLE, Justice.\nThis Court granted allocatur in this matter in order to address two issues. The first issue is\nwhether the collectibility of damages in an underlying action is relevant to and, therefore,\nadmissible in a legal malpractice action. The second issue is, if collectibility of damages should\nbe considered, which party bears the burden of proving collectibility. Because we find that\ncollectibility of damages in the underlying action should be considered in a legal malpractice\naction and that the defendant/attorney bears the burden of proof, we affirm the order of the\nSuperior Court and remand for further proceedings consistent with this opinion.\nThe facts relevant to this appeal are not in dispute. Leo J. Kituskie is a Pennsylvania resident\nwho is a practicing periodontist. On September 3, 1989, Kituskie was injured in a two-car\nautomobile accident during his vacation in San Jose, California. The traffic collision report for\nthe accident stated that a vehicle being driven by Evan Mark Trapp crossed a highway on-ramp\ninto the path of Kituskie\xe2\x80\x99s automobile after it struck a curb and a cyclone fence. The traffic\ncollision report also indicated that Trapp was driving while intoxicated and that his vehicle was\nbeing operated at the time of the accident at a high rate of speed. After the accident, Kituskie\nreturned to the Philadelphia area in order to begin treatment for his injuries. As a result of this\nautomobile accident, Kituskie avers that he suffers from a degenerative and arthritic back\ncondition which makes it difficult for him to work full-time as a periodontist.\nOn September 9, 1989, Kituskie retained Scott K. Corbman, Esquire, to pursue his claim\nagainst Trapp for the personal injuries he sustained in the accident. Corbman is an attorney\nlicensed to practice law in the Commonwealth of Pennsylvania and is a principal/shareholder in\nthe law firm of Garfinkle, Corbman, Greenberg and Jurikson, P.C.\nCorbman proceeded to obtain Kituskie\xe2\x80\x99s medical reports. After reviewing the medical reports,\nCorbman made a claim on Kituskie\'s behalf against Trapp\'s insurance carrier, California State\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c191\nAutomobile Association ("CSAA"). During settlement negotiations with CSAA, Corbman learned\nthat Trapp\xe2\x80\x99s insurance policy had a limit of $25,000.\nOn September 17, 1990, more than one year after the accident, Corbman discovered that the\nCalifornia statute of limitations for injuries such as those suffered by Kituskie was only one year\nas opposed to the two-year statute of limitations in Pennsylvania. CSAA ultimately informed\nCorbman that it would not make a settlement offer to Kituskie because the one-year statute of\nlimitations had passed without Corbman instituting a formal legal action. As soon as Corbman\nlearned this information, Corbman met with Kituskie and informed him that his claim had been\nterminated because no suit was filed or settlement reached within the one-year statute of\nlimitations period. During this meeting, Corbman advised Kituskie to seek the services of\nanother attorney in order to assert a legal malpractice claim against Corbman and the Garfinkle\nfirm.\nOn August 28, 1991, Kituskie, represented by new counsel, filed a legal malpractice claim\nagainst Corbman and the Garfinkle law firm in the Montgomery County Court of Common Pleas.\nImmediately prior to jury selection, counsel for each side filed motions in limine requesting that\neach side be precluded from presenting expert testimony on the issue of CSAA possibly settling\nthe matter within the policy limits of Trapp\xe2\x80\x99s policy. Neither of these motions dealt directly with\nthe issue of whether the jury in this legal malpractice action could consider Kituskie\xe2\x80\x99s ability to\ncollect on an underlying judgment against Trapp. However, the trial court, realizing that its\nresolution of whether collectibility of damages in an underlying case could be an issue at trial,\nwithheld its disposition of the two motions in limine. On January 6, 1995, prior to commencing\nthe trial in this matter, the trial court decided that collectibility of damages in an underlying case\nwas not relevant to a legal malpractice claim in Pennsylvania. Thus, the trial court granted both\nmotions in limine.\nFollowing a trial on the matter, on January 11, 1995, a jury found that Corbman and the\nGarfinkle firm were liable to Kituskie for legal malpractice in the amount of $2,300,000. Corbman\nand the Garfinkle firm appealed to the Superior Court. The Superior Court, in a published\nopinion, vacated the judgment and remanded for further proceedings because it held that the\ncollectibility of damages in an underlying case should be considered in a legal malpractice\naction. The Superior Court also held that the attorney being sued for legal malpractice bore the\nburden of proving as a defense in the form of mitigation of damages that the potential underlying\ncase which formed the basis of the legal malpractice award would have been uncollectible. This\nCourt granted allocatur in order to decide whether collectibility should be part of a legal\nmalpractice action and, if so, which party bears the burden of proof as to that issue.\nIn order to establish a claim of legal malpractice, a plaintiff/aggrieved client must demonstrate\nthree basic elements:\n1) employment of the attorney or other basis for a duty;\n2) the failure of the attorney to exercise ordinary skill and knowledge; and\n3) that such negligence was the proximate cause of damage to the plaintiff.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c192\n\nAn essential element to this cause of action is proof of actual loss rather than a breach of a\nprofessional duty causing only nominal damages, speculative harm or the threat of future harm.\nDamages are considered remote or speculative only if there is uncertainty concerning the\nidentification of the existence of damages rather than the ability to precisely calculate the\namount or value of damages. In essence, a legal malpractice action in Pennsylvania requires\nthe plaintiff to prove that he had a viable cause of action against the party he wished to sue in\nthe underlying case and that the attorney he hired was negligent in prosecuting or defending\nthat underlying case (often referred to as proving a \xe2\x80\x9ccase within a case\xe2\x80\x9d).\nA review of case law in the Commonwealth shows that the issue of whether collectibility of\ndamages in an underlying case should also be a part of a legal malpractice action is one of first\nimpression. Other jurisdictions, however, have addressed this issue and have held that\ncollectibility of damages should also be considered in a legal malpractice action.\nLike these other jurisdictions, this Court believes that collectibility of damages in the underlying\naction should also be part of the analysis in a legal malpractice action. We do so because we\nrecognize that a legal malpractice action is distinctly different from any other type of lawsuit\nbrought in the Commonwealth. A legal malpractice action is different because, as described\nabove, a plaintiff must prove a case within a case since he must initially establish by a\npreponderance of the evidence that he would have recovered a judgment in the underlying\naction (here, the underlying action would have involved Kituskie\xe2\x80\x99s lawsuit against Trapp). It is\nonly after the plaintiff proves he would have recovered a judgment in the underlying action that\nthe plaintiff can then proceed with proof that the attorney he engaged to prosecute or defend the\nunderlying action was negligent in the handling of the underlying action and that negligence was\nthe proximate cause of the plaintiff\'s loss since it prevented the plaintiff from being properly\ncompensated for his loss. However, this Court has held that the plaintiff in a legal action should\nonly be compensated for his actual losses. Actual losses in a legal malpractice action are\nmeasured by the judgment the plaintiff lost in the underlying action and the attorney who\nnegligently handled the underlying action is the party held responsible for the lost judgment.\nHowever, as noted by the Superior Court, \xe2\x80\x9cit would be inequitable for the plaintiff to be able to\nobtain a judgment against the attorney which is greater than the judgment that the plaintiff could\nhave collected from the third party; the plaintiff would be receiving a windfall at the attorney\'s\nexpense.\xe2\x80\x9d Thus, we now hold that collectibility of damages in the underlying case is a matter\nwhich should be considered in legal malpractice actions.\nBecause this Court has concluded that collectibility of damages is an issue which should be\nconsidered in legal malpractice actions, we now must decide who bears the burden of proof.\nWhile other jurisdictions considering the issue of collectibility of damages have unanimously\nconcluded that collectibility is a part of a legal malpractice action, they have been split on which\nparty in the legal malpractice action bears the burden of proof. A majority of courts in other\njurisdictions have placed the burden of proving collectibility on the plaintiff because it is viewed\nas being closely related to the issue of proximate cause, a burden which clearly the plaintiff\nbears as part of his prima facie case. In doing so, these courts place the burden on the plaintiff\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c193\nbecause a plaintiff can prove that the attorney\xe2\x80\x99s malfeasance was the proximate cause of his\nloss only if he demonstrates that he would have succeeded on the underlying action and that he\nwould have succeeded in collecting on the resulting judgment.\nA minority of courts in other jurisdictions, however, have rejected the majority\'s line of reasoning\nand placed the burden of proving non-collectibility on the defendant/attorney. These courts have\nrecognized that the plaintiff must prove a case within a case. These minority of courts, however,\ndo not believe that it logically follows from the case within a case burden of proof that the\nplaintiff must also prove that the damages in the underlying case would have been collectible.\nInstead, these courts believe that the burden of proof in a legal malpractice action only requires\nthe plaintiff to prove a loss of judgment on a valid claim. To require the plaintiff to also prove\ncollectibility of damages would result in placing an unfair burden on the plaintiff where the\nplaintiff\xe2\x80\x99s legal malpractice action is often brought years after the initial accident causing his\ninjuries solely because the defendant/lawyer failed to act in a timely and competent manner.\nThus, the minority of courts believe that it is more logical and fair to treat collectibility as an\naffirmative defense which the defendant/attorney must plead and prove in order to avoid or\nmitigate the consequences of that attorney\'s negligent acts. Moreover, this minority has\ncriticized the majority position because it ignores the possibility of settlement between the\nplaintiff and the underlying tortfeasor and also overlooks that the passage of time itself can be a\nmilitating factor either for or against collectibility of the underlying case.\nAfter considering both positions, this Court finds the reasoning of the minority position to be\nmore persuasive. Thus, we adopt the minority position and hold that a defendant/lawyer in a\nlegal malpractice action should plead and prove the affirmative defense that the underlying case\nwas not collectible by a preponderance of the evidence.\nAccordingly, for the reasons expressed above, we find that the Superior Court correctly held\nthat collectibility of damages in an underlying case is a matter which must be considered in a\nlegal malpractice action and that the defendant/lawyer bears the burden of proving that the\nunderlying case which formed the basis of the damages award in a legal malpractice action\nwould not have been fully collectible. Therefore, the order of the Superior Court is affirmed and\nthe matter remanded for further proceedings.\nQuestions:\n1. Why did the court hold that Kituskie could only recover collectable damages? Why\ncouldn\xe2\x80\x99t he recover all of his damages?\n2. Why did the court hold that Corbman bore the burden of proving that damages were not\ncollectable? Will it be hard for Corbman to prove the damages were not collectable,\nunder the circumstances?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c194\n3.3: Ineffective Assistance of Counsel\nIneffective Assistance of Counsel\nThe Sixth Amendment and the Due Process clause guarantee criminal defendants the right to\nthe effective assistance of counsel. In Gideon v. Wainwright, 372 U.S. 335 (1963), the Supreme\nCourt held that indigent criminal defendants are entitled to appointed counsel in all felony cases.\nAnd in Strickland v. Washington, 466 U.S. 668 (1984), it held that appointed counsel must\nprovide a competent defense. If a criminal defendant receives ineffective assistance of counsel,\nthen any conviction is unconstitutional and void. However, courts evaluating ineffective\nassistance of counsel claims are \xe2\x80\x9chighly deferential\xe2\x80\x9d to the decisions of appointed counsel, and\nwill provide relief only if counsel\xe2\x80\x99s decisions are both unreasonable and prejudicial. Accordingly,\nineffective assistance of counsel claims are difficult to prove, unless counsel provided no\ndefense at all or had a conflict of interest.\nU.S. Const. Amend. 6\nIn all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial,\nby an impartial jury of the state and district wherein the crime shall have been\ncommitted, which district shall have been previously ascertained by law, and to be\ninformed of the nature and cause of the accusation; to be confronted with the witnesses\nagainst him; to have compulsory process for obtaining witnesses in his favor, and to\nhave the assistance of counsel for his defense.\nStrickland v. Washington, 466 U.S. 668 (1984)\nThe Supreme Court established the rules governing ineffective assistance of counsel claims in\ncriminal cases in the landmark case Strickland v. Washington. In Strickland, the Court held that\ndue process and the Counsel Clause of the Sixth Amendment guarantees all criminal\ndefendants the right to the effective assistance of counsel. \xe2\x80\x9cThe benchmark for judging any\nclaim of ineffectiveness must be whether counsel\xe2\x80\x99s conduct so undermined the proper\nfunctioning of the adversarial process that the trial cannot be relied on as having produced a just\nresult.\xe2\x80\x9d\nIn order to prove a claim for ineffective assistance of counsel, a criminal defendant must show\nthat counsel violated the duty of care or loyalty, and that the violation prejudiced the defendant.\n\xe2\x80\x9cFirst, the defendant must show that counsel\xe2\x80\x99s performance was deficient. This requires\nshowing that counsel made errors so serious that counsel was not functioning as the \xe2\x80\x98counsel\xe2\x80\x99\nguaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the\ndeficient performance prejudiced the defense. This requires showing that counsel\xe2\x80\x99s errors were\nso serious as to deprive the defendant of a fair trial, a trial whose result is reliable.\xe2\x80\x9d\nThe evaluation of counsel\xe2\x80\x99s performance must be \xe2\x80\x9chighly deferential\xe2\x80\x9d and \xe2\x80\x9cjudge the\nreasonableness of counsel\xe2\x80\x99s challenged conduct on the facts of the particular case, viewed as\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c195\nof the time of counsel\xe2\x80\x99s conduct.\xe2\x80\x9d Accordingly, the defendant \xe2\x80\x9cmust identify the acts or\nomissions of counsel that are alleged not to have been the result of reasonable professional\njudgment\xe2\x80\x9d and \xe2\x80\x9cthe court must then determine whether, in light of all the circumstances, the\nidentified acts or omissions were outside the wide range of professionally competent\nassistance.\xe2\x80\x9d\nIn addition, the defendant must show that counsel\xe2\x80\x99s unreasonable conduct was prejudicial. \xe2\x80\x9cAny\ndeficiencies in counsel\xe2\x80\x99s performance must be prejudicial to the defense in order to constitute\nineffective assistance under the Constitution.\xe2\x80\x9d There is a legal presumption of prejudice if the\ndefendant was actually or constructively denied the assistance of counsel, the government\ninterfered with representation, or counsel had a conflict of interest that adversely affected\nperformance. But if counsel violated the duty of care, the defendant must show that counsel\xe2\x80\x99s\nunreasonable conduct was actually prejudicial. \xe2\x80\x9cThe defendant must show that there is a\nreasonable probability that, but for counsel\xe2\x80\x99s unprofessional errors, the result of the proceeding\nwould have been different.\xe2\x80\x9d\nKnowles v. Mirzayance, 556 U.S. 111 (2009)\nSummary: Mirzayance confessed to killing his cousin, and pleaded both not guilty and\nnot guilty by reason of insanity. During the guilt phase of the trial, the jury rejected\nevidence of insanity and convicted Mirzayance of first-degree murder. On the advice of\ncounsel, Mirzayance withdrew his insanity plea, because his parents effectively refused\nto testify, and there was no other new evidence. On state and federal habeas,\nMirzayance argued that counsel\xe2\x80\x99s advice to withdraw his insanity plea was ineffective\nassistance of counsel, because he had no other defense. The district court granted\nhabeas, because Mirzayance had \xe2\x80\x9cnothing to lose\xe2\x80\x9d by an insanity defense, and the\ncircuit court affirmed. The Supreme Court reversed, holding that the insanity defense\nhad no \xe2\x80\x9creasonable probability\xe2\x80\x9d of success.\nJustice THOMAS delivered the opinion of the Court.\nIn this case, respondent Alexandre Mirzayance claimed ineffective assistance of counsel\nbecause his attorney recommended withdrawing his insanity defense. The California courts\nrejected this claim on state postconviction review. We must decide whether this decision was\ncontrary to or an unreasonable application of clearly established federal law. We hold that it was\nnot. Mirzayance failed to establish that his counsel\'s performance was ineffective.\nI\nMirzayance confessed that he stabbed his 19-year-old cousin nine times with a hunting knife\nand then shot her four times. At trial, he entered pleas of not guilty and not guilty by reason of\ninsanity (NGI). Under California law, when both of these pleas are entered, the court must hold\na bifurcated trial, with guilt determined during the first phase and the viability of the defendant\'s\nNGI plea during the second. During the guilt phase of Mirzayance\'s trial, he sought to avoid a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c196\nconviction for first-degree murder by obtaining a verdict on the lesser included offense of\nsecond-degree murder. To that end, he presented medical testimony that he was insane at the\ntime of the crime and was, therefore, incapable of the premeditation or deliberation necessary\nfor a first-degree murder conviction. The jury nevertheless convicted Mirzayance of first-degree\nmurder.\nThe trial judge set the NGI phase to begin the day after the conviction was entered but, on the\nadvice of counsel, Mirzayance abandoned his NGI plea before it commenced. He would have\nborne the burden of proving his insanity during the NGI phase to the same jury that had just\nconvicted him of first-degree murder. Counsel had planned to meet that burden by presenting\nmedical testimony similar to that presented in the guilt phase, including evidence that\nMirzayance was insane and incapable of premeditating or deliberating. Because the jury\nrejected similar evidence at the guilt phase (where the State bore the burden of proof), counsel\nbelieved a defense verdict at the NGI phase (where the burden was on the defendant) was\nunlikely. He planned, though, to have Mirzayance\xe2\x80\x99s parents testify and thus provide an\nemotional account of Mirzayance\xe2\x80\x99s struggles with mental illness to supplement the medical\nevidence of insanity. But on the morning that the NGI phase was set to begin, Mirzayance\xe2\x80\x99s\nparents refused to testify. After consulting with co-counsel, counsel advised Mirzayance that he\nshould withdraw the NGI plea. Mirzayance accepted the advice.\nAfter he was sentenced, Mirzayance challenged his conviction in state postconviction\nproceedings. Among other allegations, he claimed that counsel\xe2\x80\x99s recommendation to withdraw\nthe NGI plea constituted ineffective assistance of counsel under Strickland. The California trial\ncourt denied the petition, and the California Court of Appeal affirmed without offering any reason\nfor its rejection of this particular ineffective-assistance claim. Mirzayance then filed an\napplication for federal habeas relief, which the District Court denied without an evidentiary\nhearing. The Court of Appeals reversed the District Court and ordered an evidentiary hearing on\ncounsel\xe2\x80\x99s recommendation to withdraw the NGI plea. During that evidentiary hearing, a\nMagistrate Judge made factual findings that the District Court later adopted.\nAccording to the Magistrate Judge, counsel\xe2\x80\x99s strategy for the two-part trial was to seek a\nsecond-degree murder verdict in the first stage and to seek an NGI verdict in the second stage.\nThis strategy faltered when the jury instead convicted Mirzayance of first-degree murder. In the\ncircumstances of this case, the medical evidence that Mirzayance planned to adduce at the NGI\nphase essentially would have duplicated evidence that the jury had necessarily rejected in the\nguilt phase. First-degree murder in California includes any killing that is \xe2\x80\x9cwillful, deliberate, and\npremeditated.\xe2\x80\x9d To prove NGI, a defendant must show that he was incapable of knowing or\nunderstanding the nature of his act or of distinguishing right from wrong at the time of the\noffense. Highlighting this potential contradiction, the trial judge instructed the jury during the guilt\nphase that \xe2\x80\x9cthe word \xe2\x80\x98deliberate,\xe2\x80\x99\xe2\x80\x9d as required for a first-degree murder conviction, \xe2\x80\x9cmeans\nformed or arrived at or determined upon as a result of careful thought and weighing of\nconsiderations for and against the proposed course of action.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c197\nWhen the jury found Mirzayance guilty of first-degree murder, counsel doubted the likelihood of\nprevailing on the NGI claim. According to the Magistrate Judge:\nThe defense suspected that a jury\xe2\x80\x99s finding, beyond a reasonable doubt, that\nMirzayance had \xe2\x80\x9cdeliberated\xe2\x80\x9d and \xe2\x80\x9cpremeditated\xe2\x80\x9d his killing of the victim as a practical\nmatter would cripple Mirzayance\xe2\x80\x99s chances of convincing the jury later, during the sanity\nphase, that Mirzayance nevertheless \xe2\x80\x9cwas incapable of knowing or understanding the\nnature and quality of his act and of distinguishing right from wrong at the time of the\ncommission of the offense.\xe2\x80\x9d\nAny remaining chance of securing an NGI verdict now depended (in counsel\xe2\x80\x99s view) on\npresenting some \xe2\x80\x9cemotional impact\xe2\x80\x9d testimony by Mirzayance\xe2\x80\x99s parents, which counsel\nhad viewed as key even if the defense had secured a second-degree murder verdict at\nthe guilt phase.\nBut, as the Magistrate Judge found, on the morning that the NGI phase was set to begin,\nMirzayance\xe2\x80\x99s parents effectively refused to testify:\nThe parents at least expressed clear reluctance to testify, which, in context, conveyed\nthe same sense as a refusal.\nAlthough the parties disputed this point, the parents\xe2\x80\x99 later actions supported the Magistrate\nJudge\xe2\x80\x99s finding that the parents\' reluctance to testify amounted to refusal:\nCorroborating the Court\'s finding that Mirzayance\xe2\x80\x99s parents indicated a strong\ndisinclination to testify at the NGI phase are the facts that (1) they did not testify later at\nhis sentencing hearing, and (2) the reason for their choosing not to do so is that it would\nhave been \xe2\x80\x9ctoo emotional\xe2\x80\x9d for them. If weeks after the guilty verdict and the withdrawal\nof their son\'s NGI plea, Mirzayance\xe2\x80\x99s parents\xe2\x80\x99 emotions still prevented them from\ntestifying at the sentencing hearing, then surely those emotional obstacles to their\ntestifying in the NGI phase would have been at least as potent, and probably more so.\nThe Magistrate Judge found that counsel made a carefully reasoned decision not to go forward\nwith the NGI plea:\nCounsel carefully weighed his options before making his decision final; he did not make\nit rashly. Counsel\xe2\x80\x99s strategy at the NGI phase depended entirely on the heartfelt\nparticipation of Mirzayance\xe2\x80\x99s parents as witnesses. Moreover, counsel knew that,\nalthough he had experts lined up to testify, their testimony had significant weaknesses.\nCounsel\xe2\x80\x99s NGI-phase strategy became impossible to attempt once Mirzayance\xe2\x80\x99s parents\nexpressed their reluctance to testify. All counsel was left with were four experts, all of\nwhom reached a conclusion \xe2\x80\x94 that Mirzayance did not premeditate and deliberate his\ncrime \xe2\x80\x94 that the same jury about to hear the NGI evidence already had rejected under a\nbeyond-a-reasonable-doubt standard of proof. The experts were subject to other\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c198\nimpeachment as well. Counsel discussed the situation with his experienced co-counsel\nwho concurred in counsel\xe2\x80\x99s proposal that he recommend to Mirzayance the withdrawal\nof the NGI plea.\nBased on these factual findings, the Magistrate Judge stated that, in his view, counsel\xe2\x80\x99s\nperformance was not deficient.\nDespite this determination, the Magistrate Judge concluded that the court was bound by the\nCourt of Appeals\xe2\x80\x99 remand order to determine only whether \xe2\x80\x9cthere were tactical reasons for\nabandoning the insanity defense.\xe2\x80\x9d Even though the Magistrate Judge thought that counsel was\nreasonable in recommending that a very weak claim be dropped, the Magistrate Judge\nunderstood the remand order to mean that counsel\xe2\x80\x99s performance was deficient if withdrawing\nthe NGI plea would achieve no tactical advantage. The Magistrate Judge found that\n\xe2\x80\x9cMirzayance had nothing to lose\xe2\x80\x9d by going forward with the NGI phase of the trial, and thus held,\nunder the remand order, that counsel\xe2\x80\x99s performance was deficient. As to prejudice, the\nMagistrate Judge concluded the court was similarly bound by the remand order because the\nCourt of Appeals described the NGI defense as remaining \xe2\x80\x9cviable and strong.\xe2\x80\x9d Accordingly, the\nMagistrate Judge found prejudice and recommended granting the writ of habeas corpus. The\nDistrict Court accepted this recommendation and granted the writ.\nThe Court of Appeals affirmed. It first stated that the lower court had misunderstood its remand\norder, which it described as requiring an examination of \xe2\x80\x9ccounsel\'s reason for abandoning the\ninsanity defense,\xe2\x80\x9d rather than as mandating that the District Court must find deficient\nperformance if it found counsel had \xe2\x80\x9cnothing to lose\xe2\x80\x9d by pursuing the insanity defense.\nNonetheless, the Court of Appeals affirmed the finding of deficient performance. According to\nthe court, Mirzayance\xe2\x80\x99s \xe2\x80\x9cparents did not refuse, but merely expressed reluctance to testify.\xe2\x80\x9d And\nbecause they may have been willing, \xe2\x80\x9ccompetent counsel would have attempted to persuade\nthem to testify, which counsel here admits he did not.\xe2\x80\x9d The Court of Appeals also \xe2\x80\x9cdisagreed\nthat counsel\'s decision was carefully weighed and not made rashly.\xe2\x80\x9d\nFurthermore, even though it had suggested that the District Court unnecessarily evaluated\ncounsel\xe2\x80\x99s strategy under a \xe2\x80\x9cnothing to lose\xe2\x80\x9d standard, the Court of Appeals affirmed the District\nCourt in large part because Mirzayance\xe2\x80\x99s \xe2\x80\x9ccounsel did not make a true tactical choice\xe2\x80\x9d based on\nits view that counsel had nothing to gain by dropping the NGI defense. The court held that\n\xe2\x80\x9creasonably effective assistance would put on the only defense available, especially in a case\nsuch as this where there was significant potential for success.\xe2\x80\x9d The Court of Appeals also found\nprejudice because, in its view, \xe2\x80\x9cif counsel had pursued the insanity phase of the trial, there is a\nreasonable probability that the jury would have found Mirzayance insane.\xe2\x80\x9d\nWe granted the petition for writ of certiorari.\nEven if Mirzayance\xe2\x80\x99s ineffective-assistance-of-counsel claim were eligible for de novo review, it\nwould still fail. Strickland requires a defendant to establish deficient performance and prejudice.\nMirzayance can establish neither.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c199\n\nMirzayance has not shown \xe2\x80\x9cthat counsel\xe2\x80\x99s representation fell below an objective standard of\nreasonableness.\xe2\x80\x9d\nThe proper measure of attorney performance remains simply reasonableness under\nprevailing professional norms. Judicial scrutiny of counsel\'s performance must be highly\ndeferential, and a court must indulge a strong presumption that counsel\xe2\x80\x99s conduct falls\nwithin the wide range of reasonable professional assistance. Strategic choices made\nafter thorough investigation of law and facts relevant to plausible options are virtually\nunchallengeable.\nHere, Mirzayance has not shown that his counsel violated these standards. Rather, his counsel\nmerely recommended the withdrawal of what he reasonably believed was a claim doomed to\nfail. The jury had already rejected medical testimony about Mirzayance\xe2\x80\x99s mental state in the guilt\nphase, during which the State carried its burden of proving guilt beyond a reasonable doubt.\nThe Magistrate Judge explained this point:\nAll counsel was left with were four experts, all of whom reached a conclusion \xe2\x80\x94 that\nMirzayance did not premeditate and deliberate his crime \xe2\x80\x94 that the same jury about to\nhear the NGI evidence already had rejected under a beyond-a-reasonable-doubt\nstandard of proof. The experts were subject to other impeachment as well.\nIn fact, the Magistrate Judge found that counsel \xe2\x80\x9cconvincingly detailed ways in which the\nexperts could have been impeached, for overlooking or minimizing facts which showcased\nMirzayance\xe2\x80\x99s clearly goal-directed behavior.\xe2\x80\x9d\nIn the NGI phase, the burden would have switched to Mirzayance to prove insanity by a\npreponderance of the evidence. Mirzayance\xe2\x80\x99s counsel reasonably believed that there was\nalmost no chance that the same jury would have reached a different result when considering\nsimilar evidence, especially with Mirzayance bearing the burden of proof. Furthermore, counsel\nknew he would have had to present this defense without the benefit of the parents\xe2\x80\x99 testimony,\nwhich he believed to be his strongest evidence. Counsel reasonably concluded that this defense\nwas almost certain to lose.\nThe Court of Appeals took the position that the situation was not quite so dire because the\nparents \xe2\x80\x9cmerely expressed reluctance to testify.\xe2\x80\x9d It explained that \xe2\x80\x9ccompetent counsel would\nhave attempted to persuade them to testify.\xe2\x80\x9d But that holding is in tension with the Magistrate\nJudge\xe2\x80\x99s findings and applies a more demanding standard than Strickland prescribes. The\nMagistrate Judge noted that the parents \xe2\x80\x9cconveyed the same sense as a refusal.\xe2\x80\x9d Indeed, the\nMagistrate Judge found that the parents \xe2\x80\x9cdid not testify later at Mirzayance\xe2\x80\x99s sentencing\nhearing\xe2\x80\x9d because it \xe2\x80\x9cwould have been \xe2\x80\x98too emotional\xe2\x80\x99 for them.\xe2\x80\x9d Competence does not require\nan attorney to browbeat a reluctant witness into testifying, especially when the facts suggest\nthat no amount of persuasion would have succeeded. Counsel\xe2\x80\x99s acceptance of the parents\xe2\x80\x99\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c200\n\xe2\x80\x9cconveyance of a refusal\xe2\x80\x9d does not rise to the high bar for deficient performance set by\nStrickland.\nMirzayance\xe2\x80\x99s failure to show ineffective assistance of counsel is confirmed by the Magistrate\nJudge\xe2\x80\x99s finding that \xe2\x80\x9ccounsel carefully weighed his options before making his decision final; he\ndid not make it rashly.\xe2\x80\x9d The Magistrate Judge explained all of the factors that counsel\nconsidered \xe2\x80\x94 many of which are discussed above \xe2\x80\x94 and noted that counsel \xe2\x80\x9cdiscussed the\nsituation with his experienced co-counsel\xe2\x80\x9d before making it. In making this finding, the\nMagistrate Judge identified counsel\'s decision as essentially an informed decision \xe2\x80\x9cmade after\nthorough investigation of law and facts relevant to plausible options.\xe2\x80\x9d As we stated in Strickland,\nsuch a decision is \xe2\x80\x9cvirtually unchallengeable.\xe2\x80\x9d\nWithout even referring to the Magistrate Judge\xe2\x80\x99s finding, the Court of Appeals \xe2\x80\x9cdisagreed that\ncounsel\xe2\x80\x99s decision was carefully weighed and not made rashly.\xe2\x80\x9d In its view, \xe2\x80\x9ccounsel acted on\nhis subjective feelings of hopelessness without even considering the potential benefit to be\ngained in persisting with the plea.\xe2\x80\x9d But courts of appeals may not set aside a district court\xe2\x80\x99s\nfactual findings unless those findings are clearly erroneous. Here, the Court of Appeals failed\neven to mention the clearly-erroneous standard, let alone apply it, before effectively overturning\nthe lower court\'s factual findings related to counsel\xe2\x80\x99s behavior.\nIn light of the Magistrate Judge\xe2\x80\x99s factual findings, the state court\'s rejection of Mirzayance\xe2\x80\x99s\nineffective-assistance-of-counsel claim was consistent with Strickland. The Court of Appeals\ninsisted, however, that \xe2\x80\x9c\xe2\x80\x98reasonably effective assistance\xe2\x80\x99 required here that counsel assert the\nonly defense available.\xe2\x80\x9d But we are aware of no \xe2\x80\x9cprevailing professional norms\xe2\x80\x9d that prevent\ncounsel from recommending that a plea be withdrawn when it is almost certain to lose. And in\nthis case, counsel did not give up \xe2\x80\x9cthe only defense available.\xe2\x80\x9d Counsel put on a defense to firstdegree murder during the guilt phase. Counsel also defended his client at the sentencing phase.\nThe law does not require counsel to raise every available nonfrivolous defense. Counsel also is\nnot required to have a tactical reason \xe2\x80\x94 above and beyond a reasonable appraisal of a claim\xe2\x80\x99s\ndismal prospects for success \xe2\x80\x94 for recommending that a weak claim be dropped altogether.\nMirzayance has thus failed to demonstrate that his counsel\xe2\x80\x99s performance was deficient.\nIn addition, Mirzayance has not demonstrated that he suffered prejudice from his counsel\'s\nperformance. To establish prejudice, \xe2\x80\x9cthe defendant must show that there is a reasonable\nprobability that, but for counsel\xe2\x80\x99s unprofessional errors, the result of the proceeding would have\nbeen different. A reasonable probability is a probability sufficient to undermine confidence in the\noutcome.\xe2\x80\x9d To prevail on his ineffective-assistance claim, Mirzayance must show, therefore, that\nthere is a \xe2\x80\x9creasonable probability\xe2\x80\x9d that he would have prevailed on his insanity defense had he\npursued it. This Mirzayance cannot do. It was highly improbable that a jury, which had just\nrejected testimony about Mirzayance\'s mental condition when the State bore the burden of\nproof, would have reached a different result when Mirzayance presented similar evidence at the\nNGI phase.\nIV\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c201\n\nMirzayance has not shown that the state court\'s conclusion that there was no ineffective\nassistance of counsel "was contrary to, or involved an unreasonable application of, clearly\nestablished Federal law.\xe2\x80\x9d In fact, he has not shown ineffective assistance at all. The judgment of\nthe Court of Appeals is reversed, and the case is remanded with instructions to deny the\npetition.\nQuestions:\n1. Did Mirzayance\xe2\x80\x99s insanity plea have any chance of success? Was there any reason to\nwithdraw it?\n2. Could Mirzayance\xe2\x80\x99s attorney have had a tactical reason for advising him to withdraw his\ninsanity plea?\nLee v. United States, 137 S. Ct. 1958 (2017)\nSummary: Jae Lee was a lawful permanent resident of the United States, who was\nindicted for an \xe2\x80\x9caggravated felony.\xe2\x80\x9d Lee pleaded guilty on the advice of his attorney, who\nassured him that he would not be deported. In fact, Lee was subject to mandatory\ndeportation. Lee filed a motion to vacate his conviction and sentence based on\nineffective assistance of counsel, arguing that he would not have pleaded guilty if he had\nknown it would mean mandatory deportation. The district court denied relief, because\nLee would \xe2\x80\x9calmost certainly\xe2\x80\x9d have been found guilty and deported anyway, and the\ncircuit court affirmed. The Supreme Court reversed, holding that the attorney\xe2\x80\x99s\nincompetence deprived Lee of a chance of avoiding deportation.\nChief Justice ROBERTS delivered the opinion of the Court.\nPetitioner Jae Lee was indicted on one count of possessing ecstasy with intent to distribute.\nAlthough he has lived in this country for most of his life, Lee is not a United States citizen, and\nhe feared that a criminal conviction might affect his status as a lawful permanent resident. His\nattorney assured him there was nothing to worry about \xe2\x80\x94 the Government would not deport him\nif he pleaded guilty. So Lee, who had no real defense to the charge, opted to accept a plea that\ncarried a lesser prison sentence than he would have faced at trial.\nLee\xe2\x80\x99s attorney was wrong: The conviction meant that Lee was subject to mandatory deportation\nfrom this country. Lee seeks to vacate his conviction on the ground that, in accepting the plea,\nhe received ineffective assistance of counsel in violation of the Sixth Amendment. Everyone\nagrees that Lee received objectively unreasonable representation. The question presented is\nwhether he can show he was prejudiced as a result.\nI\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c202\nJae Lee moved to the United States from South Korea in 1982. He was 13 at the time. His\nparents settled the family in New York City, where they opened a small coffee shop. After\ngraduating from a business high school in Manhattan, Lee set out on his own to Memphis,\nTennessee, where he started working at a restaurant. After three years, Lee decided to try his\nhand at running a business. With some assistance from his family, Lee opened the Mandarin\nPalace Chinese Restaurant in a Memphis suburb. The Mandarin was a success, and Lee\neventually opened a second restaurant nearby. In the 35 years he has spent in the country, Lee\nhas never returned to South Korea. He did not become a United States citizen, living instead as\na lawful permanent resident.\nAt the same time he was running his lawful businesses, Lee also engaged in some illegitimate\nactivity. In 2008, a confidential informant told federal officials that Lee had sold the informant\napproximately 200 ecstasy pills and two ounces of hydroponic marijuana over the course of\neight years. The officials obtained a search warrant for Lee\'s house, where they found 88\necstasy pills, three Valium tablets, $32,432 in cash, and a loaded rifle. Lee admitted that the\ndrugs were his and that he had given ecstasy to his friends.\nA grand jury indicted Lee on one count of possessing ecstasy with intent to distribute. Lee\nretained an attorney and entered into plea discussions with the Government. The attorney\nadvised Lee that going to trial was \xe2\x80\x9cvery risky\xe2\x80\x9d and that, if he pleaded guilty, he would receive a\nlighter sentence than he would if convicted at trial. Lee informed his attorney of his noncitizen\nstatus and repeatedly asked him whether he would face deportation as a result of the criminal\nproceedings. The attorney told Lee that he would not be deported as a result of pleading guilty.\nBased on that assurance, Lee accepted the plea and the District Court sentenced him to a year\nand a day in prison, though it deferred commencement of Lee\xe2\x80\x99s sentence for two months so that\nLee could manage his restaurants over the holiday season.\nLee quickly learned, however, that a prison term was not the only consequence of his plea. Lee\nhad pleaded guilty to what qualifies as an \xe2\x80\x9caggravated felony\xe2\x80\x9d under the Immigration and\nNationality Act, and a noncitizen convicted of such an offense is subject to mandatory\ndeportation. Upon learning that he would be deported after serving his sentence, Lee filed a\nmotion to vacate his conviction and sentence, arguing that his attorney had provided\nconstitutionally ineffective assistance.\nAt an evidentiary hearing on Lee\xe2\x80\x99s motion, both Lee and his plea-stage counsel testified that\n\xe2\x80\x9cdeportation was the determinative issue in Lee\xe2\x80\x99s decision whether to accept the plea.\xe2\x80\x9d In fact,\nLee explained, his attorney became \xe2\x80\x9cpretty upset because every time something comes up I\nalways ask about immigration status,\xe2\x80\x9d and the lawyer \xe2\x80\x9calways said why are you worrying about\nsomething that you don\xe2\x80\x99t need to worry about.\xe2\x80\x9d According to Lee, the lawyer assured him that if\ndeportation was not in the plea agreement, \xe2\x80\x9cthe government cannot deport you.\xe2\x80\x9d Lee\xe2\x80\x99s attorney\ntestified that he thought Lee\xe2\x80\x99s case was a \xe2\x80\x9cbad case to try\xe2\x80\x9d because Lee\'s defense to the charge\nwas weak. The attorney nonetheless acknowledged that if he had known Lee would be\ndeported upon pleading guilty, he would have advised him to go to trial. Based on the hearing\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c203\ntestimony, a Magistrate Judge recommended that Lee\xe2\x80\x99s plea be set aside and his conviction\nvacated because he had received ineffective assistance of counsel.\nThe District Court, however, denied relief. Applying our two-part test for ineffective assistance\nclaims from Strickland v. Washington, the District Court concluded that Lee\xe2\x80\x99s counsel had\nperformed deficiently by giving improper advice about the deportation consequences of the\nplea. But, \xe2\x80\x9cin light of the overwhelming evidence of Lee\xe2\x80\x99s guilt,\xe2\x80\x9d Lee \xe2\x80\x9cwould have almost\ncertainly\xe2\x80\x9d been found guilty and received \xe2\x80\x9ca significantly longer prison sentence, and\nsubsequent deportation,\xe2\x80\x9d had he gone to trial. Lee therefore could not show he was prejudiced\nby his attorney\'s erroneous advice. Viewing its resolution of the issue as debatable among\njurists of reason, the District Court granted a certificate of appealability.\nThe Court of Appeals for the Sixth Circuit affirmed the denial of relief. On appeal, the\nGovernment conceded that the performance of Lee\xe2\x80\x99s attorney had been deficient. To establish\nthat he was prejudiced by that deficient performance, the court explained, Lee was required to\nshow \xe2\x80\x9ca reasonable probability that, but for counsel\xe2\x80\x99s errors, he would not have pleaded guilty\nand would have insisted on going to trial.\xe2\x80\x9d Lee had \xe2\x80\x9cno bona fide defense, not even a weak\none,\xe2\x80\x9d so he \xe2\x80\x9cstood to gain nothing from going to trial but more prison time.\xe2\x80\x9d Relying on Circuit\nprecedent holding that \xe2\x80\x9cno rational defendant charged with a deportable offense and facing\noverwhelming evidence of guilt would proceed to trial rather than take a plea deal with a shorter\nprison sentence,\xe2\x80\x9d the Court of Appeals concluded that Lee could not show prejudice. We\ngranted certiorari.\nII\nThe Sixth Amendment guarantees a defendant the effective assistance of counsel at \xe2\x80\x9ccritical\nstages of a criminal proceeding,\xe2\x80\x9d including when he enters a guilty plea. To demonstrate that\ncounsel was constitutionally ineffective, a defendant must show that counsel\'s representation\n\xe2\x80\x9cfell below an objective standard of reasonableness\xe2\x80\x9d and that he was prejudiced as a result. The\nfirst requirement is not at issue in today\xe2\x80\x99s case: The Government concedes that Lee\xe2\x80\x99s pleastage counsel provided inadequate representation when he assured Lee that he would not be\ndeported if he pleaded guilty. The question is whether Lee can show he was prejudiced by that\nerroneous advice.\nA\nA claim of ineffective assistance of counsel will often involve a claim of attorney error \xe2\x80\x9cduring the\ncourse of a legal proceeding\xe2\x80\x9d \xe2\x80\x94 for example, that counsel failed to raise an objection at trial or\nto present an argument on appeal. A defendant raising such a claim can demonstrate prejudice\nby showing \xe2\x80\x9ca reasonable probability that, but for counsel\'s unprofessional errors, the result of\nthe proceeding would have been different.\xe2\x80\x9d\nBut in this case counsel\xe2\x80\x99s \xe2\x80\x9cdeficient performance arguably led not to a judicial proceeding of\ndisputed reliability, but rather to the forfeiture of a proceeding itself.\xe2\x80\x9d When a defendant alleges\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c204\nhis counsel\xe2\x80\x99s deficient performance led him to accept a guilty plea rather than go to trial, we do\nnot ask whether, had he gone to trial, the result of that trial \xe2\x80\x9cwould have been different\xe2\x80\x9d than the\nresult of the plea bargain. That is because, while we ordinarily \xe2\x80\x9capply a strong presumption of\nreliability to judicial proceedings,\xe2\x80\x9d \xe2\x80\x9cwe cannot accord\xe2\x80\x9d any such presumption \xe2\x80\x9cto judicial\nproceedings that never took place.\xe2\x80\x9d\nWe instead consider whether the defendant was prejudiced by the \xe2\x80\x9cdenial of the entire judicial\nproceeding to which he had a right.\xe2\x80\x9d When a defendant claims that his counsel\xe2\x80\x99s deficient\nperformance deprived him of a trial by causing him to accept a plea, the defendant can show\nprejudice by demonstrating a \xe2\x80\x9creasonable probability that, but for counsel\xe2\x80\x99s errors, he would not\nhave pleaded guilty and would have insisted on going to trial.\xe2\x80\x9d\nThe dissent contends that a defendant must also show that he would have been better off going\nto trial. That is true when the defendant\xe2\x80\x99s decision about going to trial turns on his prospects of\nsuccess and those are affected by the attorney\xe2\x80\x99s error \xe2\x80\x94 for instance, where a defendant\nalleges that his lawyer should have but did not seek to suppress an improperly obtained\nconfession.\nNot all errors, however, are of that sort. Here Lee knew, correctly, that his prospects of acquittal\nat trial were grim, and his attorney\xe2\x80\x99s error had nothing to do with that. The error was instead one\nthat affected Lee\xe2\x80\x99s understanding of the consequences of pleading guilty. The Court confronted\nprecisely this kind of error in Hill. Rather than asking how a hypothetical trial would have played\nout absent the error, the Court considered whether there was an adequate showing that the\ndefendant, properly advised, would have opted to go to trial. The Court rejected the defendant\'s\nclaim because he had \xe2\x80\x9calleged no special circumstances that might support the conclusion that\nhe placed particular emphasis on his parole eligibility in deciding whether or not to plead guilty.\xe2\x80\x9d\nLee, on the other hand, argues he can establish prejudice under Hill because he never would\nhave accepted a guilty plea had he known that he would be deported as a result. Lee insists he\nwould have gambled on trial, risking more jail time for whatever small chance there might be of\nan acquittal that would let him remain in the United States. The Government responds that,\nsince Lee had no viable defense at trial, he would almost certainly have lost and found himself\nstill subject to deportation, with a lengthier prison sentence to boot. Lee, the Government\ncontends, cannot show prejudice from accepting a plea where his only hope at trial was that\nsomething unexpected and unpredictable might occur that would lead to an acquittal.\nB\nThe Government asks that we, like the Court of Appeals below, adopt a per se rule that a\ndefendant with no viable defense cannot show prejudice from the denial of his right to trial. As a\ngeneral matter, it makes sense that a defendant who has no realistic defense to a charge\nsupported by sufficient evidence will be unable to carry his burden of showing prejudice from\naccepting a guilty plea. But in elevating this general proposition to a per se rule, the\nGovernment makes two errors. First, it forgets that categorical rules are ill suited to an inquiry\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c205\nthat we have emphasized demands a \xe2\x80\x9ccase-by-case examination\xe2\x80\x9d of the \xe2\x80\x9ctotality of the\nevidence.\xe2\x80\x9d And, more fundamentally, the Government overlooks that the inquiry we prescribed\nin Hill v. Lockhart focuses on a defendant\'s decisionmaking, which may not turn solely on the\nlikelihood of conviction after trial.\nA defendant without any viable defense will be highly likely to lose at trial. And a defendant\nfacing such long odds will rarely be able to show prejudice from accepting a guilty plea that\noffers him a better resolution than would be likely after trial. But that is not because the\nprejudice inquiry in this context looks to the probability of a conviction for its own sake. It is\ninstead because defendants obviously weigh their prospects at trial in deciding whether to\naccept a plea. Where a defendant has no plausible chance of an acquittal at trial, it is highly\nlikely that he will accept a plea if the Government offers one.\nBut common sense (not to mention our precedent) recognizes that there is more to consider\nthan simply the likelihood of success at trial. The decision whether to plead guilty also involves\nassessing the respective consequences of a conviction after trial and by plea. When those\nconsequences are, from the defendant\xe2\x80\x99s perspective, similarly dire, even the smallest chance of\nsuccess at trial may look attractive. For example, a defendant with no realistic defense to a\ncharge carrying a 20-year sentence may nevertheless choose trial, if the prosecution\xe2\x80\x99s plea\noffer is 18 years. Here Lee alleges that avoiding deportation was the determinative factor for\nhim; deportation after some time in prison was not meaningfully different from deportation after\nsomewhat less time. He says he accordingly would have rejected any plea leading to\ndeportation \xe2\x80\x94 even if it shaved off prison time \xe2\x80\x94 in favor of throwing a \xe2\x80\x9cHail Mary\xe2\x80\x9d at trial.\nThe Government urges that, in such circumstances, the possibility of an acquittal after trial is\n\xe2\x80\x9cirrelevant to the prejudice inquiry,\xe2\x80\x9d pointing to our statement in Strickland that \xe2\x80\x9ca defendant has\nno entitlement to the luck of a lawless decisionmaker.\xe2\x80\x9d That statement, however, was made in\nthe context of discussing the presumption of reliability we apply to judicial proceedings. As we\nhave explained, that presumption has no place where, as here, a defendant was deprived of a\nproceeding altogether. In a presumptively reliable proceeding, \xe2\x80\x9cthe possibility of arbitrariness,\nwhimsy, caprice, \xe2\x80\x98nullification,\xe2\x80\x99 and the like\xe2\x80\x9d must by definition be ignored. But where we are\ninstead asking what an individual defendant would have done, the possibility of even a highly\nimprobable result may be pertinent to the extent it would have affected his decisionmaking.\nC\n\xe2\x80\x9cSurmounting Strickland\xe2\x80\x99s high bar is never an easy task,\xe2\x80\x9d and the strong societal interest in\nfinality has \xe2\x80\x9cspecial force with respect to convictions based on guilty pleas.\xe2\x80\x9d Courts should not\nupset a plea solely because of post hoc assertions from a defendant about how he would have\npleaded but for his attorney\xe2\x80\x99s deficiencies. Judges should instead look to contemporaneous\nevidence to substantiate a defendant\'s expressed preferences.\nIn the unusual circumstances of this case, we conclude that Lee has adequately demonstrated\na reasonable probability that he would have rejected the plea had he known that it would lead to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c206\nmandatory deportation. There is no question that \xe2\x80\x9cdeportation was the determinative issue in\nLee\xe2\x80\x99s decision whether to accept the plea deal.\xe2\x80\x9d Lee asked his attorney repeatedly whether\nthere was any risk of deportation from the proceedings, and both Lee and his attorney testified\nat the evidentiary hearing below that Lee would have gone to trial if he had known about the\ndeportation consequences.\nLee demonstrated as much at his plea colloquy: When the judge warned him that a conviction\n\xe2\x80\x9ccould result in your being deported,\xe2\x80\x9d and asked \xe2\x80\x9cdoes that at all affect your decision about\nwhether you want to plead guilty or not,\xe2\x80\x9d Lee answered \xe2\x80\x9cYes, Your Honor.\xe2\x80\x9d When the judge\ninquired \xe2\x80\x9chow does it affect your decision,\xe2\x80\x9d Lee responded \xe2\x80\x9cI don\'t understand,\xe2\x80\x9d and turned to\nhis attorney for advice. Only when Lee\xe2\x80\x99s counsel assured him that the judge\xe2\x80\x99s statement was a\n\xe2\x80\x9cstandard warning\xe2\x80\x9d was Lee willing to proceed to plead guilty.\nThere is no reason to doubt the paramount importance Lee placed on avoiding deportation.\nDeportation is always \xe2\x80\x9ca particularly severe penalty,\xe2\x80\x9d and we have \xe2\x80\x9crecognized that \xe2\x80\x98preserving\nthe client\xe2\x80\x99s right to remain in the United States may be more important to the client than any\npotential jail sentence.\xe2\x80\x99\xe2\x80\x9d At the time of his plea, Lee had lived in the United States for nearly\nthree decades, had established two businesses in Tennessee, and was the only family member\nin the United States who could care for his elderly parents \xe2\x80\x94 both naturalized American\ncitizens. In contrast to these strong connections to the United States, there is no indication that\nhe had any ties to South Korea; he had never returned there since leaving as a child.\nThe Government argues, however, that a defendant \xe2\x80\x9cmust convince the court that a decision to\nreject the plea bargain would have been rational under the circumstances.\xe2\x80\x9d The Government\ncontends that Lee cannot make that showing because he was going to be deported either way;\ngoing to trial would only result in a longer sentence before that inevitable consequence.\nWe cannot agree that it would be irrational for a defendant in Lee\xe2\x80\x99s position to reject the plea\noffer in favor of trial. But for his attorney\xe2\x80\x99s incompetence, Lee would have known that accepting\nthe plea agreement would certainly lead to deportation. Going to trial? Almost certainly. If\ndeportation were the \xe2\x80\x9cdeterminative issue\xe2\x80\x9d for an individual in plea discussions, as it was for\nLee; if that individual had strong connections to this country and no other, as did Lee; and if the\nconsequences of taking a chance at trial were not markedly harsher than pleading, as in this\ncase, that \xe2\x80\x9calmost\xe2\x80\x9d could make all the difference. Balanced against holding on to some chance\nof avoiding deportation was a year or two more of prison time. Not everyone in Lee\xe2\x80\x99s position\nwould make the choice to reject the plea. But we cannot say it would be irrational to do so.\nLee\xe2\x80\x99s claim that he would not have accepted a plea had he known it would lead to deportation is\nbacked by substantial and uncontroverted evidence. Accordingly we conclude Lee has\ndemonstrated a \xe2\x80\x9creasonable probability that, but for his counsel\xe2\x80\x99s errors, he would not have\npleaded guilty and would have insisted on going to trial.\xe2\x80\x9d\nJustice THOMAS, with whom Justice ALITO joins except for Part I, dissenting.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c207\nThe Court today holds that a defendant can undo a guilty plea, well after sentencing and in the\nface of overwhelming evidence of guilt, because he would have chosen to pursue a defense at\ntrial with no reasonable chance of success if his attorney had properly advised him of the\nimmigration consequences of his plea. Neither the Sixth Amendment nor this Court\'s\nprecedents support that conclusion. I respectfully dissent.\nThe Court and both of the parties agree that the prejudice inquiry in this context is governed by\nStrickland v. Washington. The Court in Strickland held that a defendant may establish a claim of\nineffective assistance of counsel by showing that his \xe2\x80\x9ccounsel\'s representation fell below an\nobjective standard of reasonableness\xe2\x80\x9d and, as relevant here, that the representation prejudiced\nthe defendant by \xe2\x80\x9cactually having an adverse effect on the defense.\xe2\x80\x9d\nTo establish prejudice under Strickland, a defendant must show a \xe2\x80\x9creasonable probability that,\nbut for counsel\'s unprofessional errors, the result of the proceeding would have been different.\xe2\x80\x9d\nStrickland made clear that the \xe2\x80\x9cresult of the proceeding\xe2\x80\x9d refers to the outcome of the\ndefendant\xe2\x80\x99s criminal prosecution as a whole. It defined \xe2\x80\x9creasonable probability\xe2\x80\x9d as \xe2\x80\x9ca probability\nsufficient to undermine confidence in the outcome.\xe2\x80\x9d And it explained that \xe2\x80\x9can error by counsel\ndoes not warrant setting aside the judgment of a criminal proceeding if the error had no effect\non the judgment.\xe2\x80\x9d\nThe parties agree that this inquiry assumes an \xe2\x80\x9cobjective\xe2\x80\x9d decisionmaker. That conclusion also\nfollows directly from Strickland. According to Strickland, the \xe2\x80\x9cassessment of the likelihood of a\nresult more favorable to the defendant must exclude the possibility of arbitrariness, whimsy,\ncaprice, \xe2\x80\x98nullification,\xe2\x80\x99 and the like.\xe2\x80\x9d It does not depend on subjective factors such as \xe2\x80\x9cthe\nidiosyncrasies of the particular decisionmaker,\xe2\x80\x9d including the decisionmaker\xe2\x80\x99s \xe2\x80\x9cunusual\npropensities toward harshness or leniency.\xe2\x80\x9d These factors are flatly \xe2\x80\x9cirrelevant to the prejudice\ninquiry.\xe2\x80\x9d In other words, \xe2\x80\x9ca defendant has no entitlement to the luck of a lawless decisionmaker.\xe2\x80\x9d\nIbid. Instead, \xe2\x80\x9cthe assessment of prejudice should proceed on the assumption that the\ndecisionmaker is reasonably, conscientiously, and impartially applying the standards that\ngovern the decision.\xe2\x80\x9d\nWhen the Court extended the right to effective counsel to the plea stage, it held that \xe2\x80\x9cthe same\ntwo-part standard\xe2\x80\x9d from Strickland applies. To be sure, the Court said \xe2\x80\x94 and the majority today\nemphasizes \xe2\x80\x94 that a defendant asserting an ineffectiveness claim at the plea stage \xe2\x80\x9cmust show\nthat there is a reasonable probability that, but for counsel\xe2\x80\x99s errors, he would not have pleaded\nguilty and would have insisted on going to trial.\xe2\x80\x9d But that requirement merely reflects the reality\nthat a defendant cannot show that the outcome of his case would have been different if he\nwould have accepted his current plea anyway. In other words, the defendant\xe2\x80\x99s ability to show\nthat he would have gone to trial is necessary, but not sufficient, to establish prejudice.\nThe Hill Court went on to explain that Strickland\'s two-part test applies the same way in the plea\ncontext as in other contexts. In particular, the \xe2\x80\x9cassessment\xe2\x80\x9d will primarily turn on \xe2\x80\x9ca prediction\nwhether,\xe2\x80\x9d in the absence of counsel\xe2\x80\x99s error, \xe2\x80\x9cthe evidence\xe2\x80\x9d of the defendant\'s innocence or guilt\n\xe2\x80\x9clikely would have changed the outcome\xe2\x80\x9d of the proceeding. Thus, a defendant cannot show\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c208\nprejudice where it is \xe2\x80\x9cinconceivable\xe2\x80\x9d not only that he would have gone to trial, but also \xe2\x80\x9cthat if he\nhad done so he either would have been acquitted or, if convicted, would nevertheless have\nbeen given a shorter sentence than he actually received.\xe2\x80\x9d In sum, the proper inquiry requires a\ndefendant to show both that he would have rejected his plea and gone to trial and that he would\nlikely have obtained a more favorable result in the end.\nTo the extent Hill was ambiguous about the standard, our precedents applying it confirm this\ninterpretation. In Premo v. Moore, the Court emphasized that \xe2\x80\x9cstrict adherence to the Strickland\nstandard\xe2\x80\x9d is \xe2\x80\x9cessential\xe2\x80\x9d when reviewing claims about attorney error \xe2\x80\x9cat the plea bargain stage.\xe2\x80\x9d\nIn that case, the defendant argued that his counsel was constitutionally ineffective because he\nhad failed to seek suppression of his confession before he pleaded no contest. In analyzing the\nprejudice issue, the Court did not focus solely on whether the suppression hearing would have\nturned out differently, or whether the defendant would have chosen to go to trial. It focused as\nwell on the weight of the evidence against the defendant and the fact that he likely would not\nhave obtained a more favorable result at trial, regardless of whether he succeeded at the\nsuppression hearing.\nThe Court in Missouri v. Frye, took a similar approach. In that case, the Court extended Hill to\nhold that counsel could be constitutionally ineffective for failing to communicate a plea deal to a\ndefendant. The Court emphasized that, in addition to showing a reasonable probability that the\ndefendant \xe2\x80\x9cwould have accepted the earlier plea offer,\xe2\x80\x9d it is also \xe2\x80\x9cnecessary\xe2\x80\x9d to show a\n\xe2\x80\x9creasonable probability that the end result of the criminal process would have been more\nfavorable by reason of a plea to a lesser charge or a sentence of less prison time.\xe2\x80\x9d In short, the\nCourt did not focus solely on whether the defendant would have accepted the plea. It instead\nrequired the defendant to show that the ultimate outcome would have been different.\nFinally, the Court\'s decision in Lafler v. Cooper is to the same effect. In that case, the Court\nconcluded that counsel may be constitutionally ineffective by causing a defendant to reject a\nplea deal he should have accepted. The Court again emphasized that the prejudice inquiry\nrequires a showing that the criminal prosecution would ultimately have ended differently for the\ndefendant \xe2\x80\x94 not merely that the defendant would have accepted the deal. The Court stated that\nthe defendant in those circumstances \xe2\x80\x9cmust show\xe2\x80\x9d a reasonable probability that \xe2\x80\x9cthe conviction\nor sentence, or both, under the offer\xe2\x80\x99s terms would have been less severe than under the\njudgment and sentence that in fact were imposed.\xe2\x80\x9d\nThese precedents are consistent with our cases governing the right to effective assistance of\ncounsel in other contexts. This Court has held that the right to effective counsel applies to all\n\xe2\x80\x9ccritical stages of the criminal proceedings.\xe2\x80\x9d Those stages include not only \xe2\x80\x9cthe entry of a guilty\nplea,\xe2\x80\x9d but also \xe2\x80\x9carraignments, postindictment interrogation, and postindictment lineups.\xe2\x80\x9d In those\ncircumstances, the Court has not held that the prejudice inquiry focuses on whether that stage\nof the proceeding would have ended differently. It instead has made clear that the prejudice\ninquiry is the same as in Strickland, which requires a defendant to establish that he would have\nbeen better off in the end had his counsel not erred.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c209\nB\nThe majority misapplies this Court\'s precedents when it concludes that a defendant may\nestablish prejudice by showing only that \xe2\x80\x9che would not have pleaded guilty and would have\ninsisted on going to trial,\xe2\x80\x9d without showing that \xe2\x80\x9cthe result of that trial would have been different\nthan the result of the plea bargain.\xe2\x80\x9d In reaching this conclusion, the Court relies almost\nexclusively on the single line from Hill that \xe2\x80\x9cthe defendant must show that there is a reasonable\nprobability that, but for counsel\'s errors, he would not have pleaded guilty and would have\ninsisted on going to trial.\xe2\x80\x9d For the reasons explained above, that sentence prescribes the\nthreshold showing a defendant must make to establish Strickland prejudice where a defendant\nhas accepted a guilty plea. In Hill, the Court concluded that the defendant had not made that\nshowing, so it rejected his claim. The Court did not, however, further hold that a defendant can\nestablish prejudice by making that showing alone.\nThe majority also relies on a case that arises in a completely different context, Roe v. FloresOrtega. There, the Court considered a defendant\'s claim that his attorney failed to file a notice\nof appeal. The Court observed that the lawyer\xe2\x80\x99s failure to file the notice of appeal \xe2\x80\x9carguably led\nnot to a judicial proceeding of disputed reliability,\xe2\x80\x9d but instead to \xe2\x80\x9cthe forfeiture of a proceeding\nitself.\xe2\x80\x9d The Court today observes that petitioner\'s guilty plea meant that he did not go to trial.\nBecause that trial \xe2\x80\x9cnever took place,\xe2\x80\x9d the Court reasons, we cannot \xe2\x80\x9capply a strong presumption\nof reliability\xe2\x80\x9d to it. And because the presumption of reliability does not apply, we may not depend\non Strickland\'s statement \xe2\x80\x9cthat a defendant has no entitlement to the luck of a lawless\ndecisionmaker.\xe2\x80\x9d This point is key to the majority\'s conclusion that petitioner would have chosen\nto gamble on a trial even though he had no viable defense.\nThe majority\xe2\x80\x99s analysis, however, is directly contrary to Hill, which instructed a court undertaking\na prejudice analysis to apply a presumption of reliability to the hypothetical trial that would have\noccurred had the defendant not pleaded guilty. After explaining that a court should engage in a\npredictive inquiry about the likelihood of a defendant securing a better result at trial, the Court\nsaid: \xe2\x80\x9cAs we explained in Strickland v. Washington, these predictions of the outcome at a\npossible trial, where necessary, should be made objectively, without regard for the\n\xe2\x80\x98idiosyncrasies of the particular decisionmaker.\xe2\x80\x99\xe2\x80\x9d That quote comes from the same paragraph in\nStrickland as the discussion about the presumption of reliability that attaches to the trial. In other\nwords, Hill instructs that the prejudice inquiry must presume that the foregone trial would have\nbeen reliable.\nThe majority responds that Hill made statements about presuming a reliable trial only in\n\xe2\x80\x9cdiscussing how courts should analyze predictions of the outcome at a possible trial,\xe2\x80\x9d which \xe2\x80\x9cwill\nnot always be necessary.\xe2\x80\x9d I agree that such an inquiry is not always necessary \xe2\x80\x94 it is not\nnecessary where, as in Hill, the defendant cannot show at the threshold that he would have\nrejected his plea and chosen to go to trial. But that caveat says nothing about the application of\nthe presumption of reliability when a defendant can make that threshold showing.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c210\nIn any event, the Court in Hill recognized that guilty pleas are themselves generally reliable.\nGuilty pleas \xe2\x80\x9crarely\xe2\x80\x9d give rise to the \xe2\x80\x9cconcern that unfair procedures may have resulted in the\nconviction of an innocent defendant.\xe2\x80\x9d That is because \xe2\x80\x9ca counseled plea of guilty is an\nadmission of factual guilt so reliable that, where voluntary and intelligent, it quite validly removes\nthe issue of factual guilt from the case.\xe2\x80\x9d Guilty pleas, like completed trials, are therefore entitled\nto the protections against collateral attack that the Strickland prejudice standard affords.\nFinally, the majority does not dispute that the prejudice inquiry in Frye and Lafler focused on\nwhether the defendant established a reasonable probability of a different outcome. The majority\ninstead distinguishes those cases on the ground that they involved a defendant who did not\naccept a guilty plea. According to the majority, those cases \xe2\x80\x9carticulated a different way to show\nprejudice, suited to the context of pleas not accepted.\xe2\x80\x9d But the Court in Frye and Lafler (and Hill,\nfor that matter) did not purport to establish a \xe2\x80\x9cdifferent\xe2\x80\x9d test for prejudice. To the contrary, the\nCourt repeatedly stated that it was applying the \xe2\x80\x9csame two-part standard\xe2\x80\x9d from Strickland.\nThe majority today abandons any pretense of applying Strickland to claims of ineffective\nassistance of counsel that arise at the plea stage. It instead concludes that one standard applies\nwhen a defendant goes to trial (Strickland); another standard applies when a defendant accepts\na plea (Hill); and yet another standard applies when counsel does not apprise the defendant of\nan available plea or when the defendant rejects a plea (Frye and Lafler). That approach leaves\nlittle doubt that the Court has \xe2\x80\x9copened a whole new field of constitutionalized criminal\nprocedure\xe2\x80\x9d \xe2\x80\x94 \xe2\x80\x9cplea-bargaining law\xe2\x80\x9d \xe2\x80\x94 despite its repeated assurances that it has been applying\nthe same Strickland standard all along. In my view, we should take the Court\xe2\x80\x99s precedents at\ntheir word and conclude that \xe2\x80\x9can error by counsel does not warrant setting aside the judgment of\na criminal proceeding if the error had no effect on the judgment.\xe2\x80\x9d\nIII\nApplying the ordinary Strickland standard in this case, I do not think a defendant in petitioner\'s\ncircumstances could show a reasonable probability that the result of his criminal proceeding\nwould have been different had he not pleaded guilty. Petitioner does not dispute that he\npossessed large quantities of illegal drugs or that the Government had secured a witness who\nhad purchased the drugs directly from him. In light of this \xe2\x80\x9coverwhelming evidence of guilt,\xe2\x80\x9d the\nCourt of Appeals concluded that petitioner had \xe2\x80\x9cno bona fide defense, not even a weak one.\xe2\x80\x9d\nHis only chance of succeeding would have been to \xe2\x80\x9cthrow a \xe2\x80\x98Hail Mary\xe2\x80\x99 at trial.\xe2\x80\x9d As I have\nexplained, however, the Court in Strickland expressly foreclosed relying on the possibility of a\n\xe2\x80\x9cHail Mary\xe2\x80\x9d to establish prejudice. Strickland made clear that the prejudice assessment should\n\xe2\x80\x9cproceed on the assumption that the decisionmaker is reasonably, conscientiously, and\nimpartially applying the standards that govern the decision.\xe2\x80\x9d\nIn the face of overwhelming evidence of guilt and in the absence of a bona fide defense, a\nreasonable court or jury applying the law to the facts of this case would find the defendant guilty.\nThere is no reasonable probability of any other verdict. A defendant in petitioner\xe2\x80\x99s shoes,\ntherefore, would have suffered the same deportation consequences regardless of whether he\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c211\naccepted a plea or went to trial. He is thus plainly better off for having accepted his plea: had he\ngone to trial, he not only would have faced the same deportation consequences, he also likely\nwould have received a higher prison sentence. Finding that petitioner has established prejudice\nin these circumstances turns Strickland on its head.\nIV\nThe Court\'s decision today will have pernicious consequences for the criminal justice system.\nThis Court has shown special solicitude for the plea process, which brings \xe2\x80\x9cstability\xe2\x80\x9d and\n\xe2\x80\x9ccertainty\xe2\x80\x9d to \xe2\x80\x9cthe criminal justice system.\xe2\x80\x9d The Court has warned that \xe2\x80\x9cthe prospect of collateral\nchallenges\xe2\x80\x9d threatens to undermine these important values. And we have explained that\n\xe2\x80\x9cprosecutors must have assurance that a plea will not be undone years later,\xe2\x80\x9d lest they \xe2\x80\x9cforgo\nplea bargains that would benefit defendants,\xe2\x80\x9d which would be \xe2\x80\x9ca result favorable to no one.\xe2\x80\x9d\nThe Court today provides no assurance that plea deals negotiated in good faith with guilty\ndefendants will remain final. For one thing, the Court\xe2\x80\x99s artificially cabined standard for prejudice\nin the plea context is likely to generate a high volume of challenges to existing and future plea\nagreements. Under the majority\'s standard, defendants bringing these challenges will bear a\nrelatively low burden to show prejudice. Whereas a defendant asserting an ordinary claim of\nineffective assistance of counsel must prove that the ultimate outcome of his case would have\nbeen different, the Court today holds that a defendant who pleaded guilty need show only that\nhe would have rejected his plea and gone to trial. This standard does not appear to be\nparticularly demanding, as even a defendant who has only the \xe2\x80\x9csmallest chance of success at\ntrial\xe2\x80\x9d \xe2\x80\x94 relying on nothing more than a \xe2\x80\x9cHail Mary\xe2\x80\x9d \xe2\x80\x94 may be able to satisfy it. For another, the\nCourt does not limit its holding to immigration consequences. Under its rule, so long as a\ndefendant alleges that his counsel omitted or misadvised him on a piece of information during\nthe plea process that he considered of \xe2\x80\x9cparamount importance,\xe2\x80\x9d he could allege a plausible\nclaim of ineffective assistance of counsel.\nIn addition to undermining finality, the Court\xe2\x80\x99s rule will impose significant costs on courts and\nprosecutors. Under the Court\'s standard, a challenge to a guilty plea will be a highly factintensive, defendant-specific undertaking. Petitioner suggests that each claim will \xe2\x80\x9cat least\xe2\x80\x9d\nrequire a \xe2\x80\x9chearing to get the facts on the table.\xe2\x80\x9d Given that more than 90 percent of criminal\nconvictions are the result of guilty pleas, the burden of holding evidentiary hearings on these\nclaims could be significant. In circumstances where a defendant has admitted his guilt, the\nevidence against him is overwhelming, and he has no bona fide defense strategy, I see no\njustification for imposing these costs.\nQuestions:\n1. Does an ineffective assistance of counsel claim more closely resemble a breach of the\nduty of care or a breach of the duty of loyalty?\n2. Is there a difference between a lawyer making a bad decision and a lawyer providing\ninaccurate advice? Should there be?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c212\n3. Should courts apply the \xe2\x80\x9ccase within a case\xe2\x80\x9d doctrine to ineffective assistance of counsel\nclaims?\n4. The dissent argues that guilty pleas are reliable. But scholarship suggests that they are\nnot. Should this affect the analysis of ineffective assistance of counsel claims in relation\nto plea bargains?\nMalpractice in Criminal Cases\nCriminal defense attorneys who provide negligent representation may also be liable to their\nclients in tort for malpractice. However, most courts have adopted a different standard for\nevaluating malpractice claims in civil and criminal representation, holding that criminal\ndefendants can recover for malpractice only if they prove \xe2\x80\x9cactual innocence.\xe2\x80\x9d In other words,\nwhere civil clients only have to prove that they would have won in order to recover in a legal\nmalpractice action, criminal clients have to prove that they were entitled to win on the merits.\nAng v. Martin, 114 P. 3d 637 (Wash. 2005)\nSummary: Jessy and Editha Ang provided medical services to the State of Washington,\nand were indicted for social security fraud, among other things. The Angs hired attorneys\nRichard Hansen and Michael G. Martin, who advised them to accept a plea bargain.\nAfter accepting the plea bargain, the Angs hired attorney Monte Hester, who advised\nthem to withdraw it. Eventually, the Angs were acquitted. The Angs filed a legal\nmalpractice action against Hansen and Martin. The trial court instructed the jury that the\nAngs could recover only if they proved \xe2\x80\x9cactual innocence,\xe2\x80\x9d and the jury found they did\nnot. The Angs appealed, arguing that acquittal is actual innocence, but the Court of\nAppeals and Supreme Court affirmed.\nOWENS, J.\nWe are asked to determine whether plaintiffs in a malpractice action against their former\ncriminal defense attorneys were properly required to prove by a preponderance of the evidence\nthat they were actually innocent of the underlying criminal charges. The Court of Appeals\nconcluded that, as an element of their negligence claim, plaintiffs were required \xe2\x80\x9cto prove\ninnocence in fact and not merely to present evidence of the government\'s inability to prove\nguilt.\xe2\x80\x9d We affirm the Court of Appeals.\nFACTS\nPsychiatrist Jessy Ang and his wife Editha jointly owned Evergreen Medical Panel, Inc., a\ncompany that provided the Washington State Department of Labor and Industries with\nindependent medical examinations of injured workers. As a result of Dr. Ang\xe2\x80\x99s contact with a\ntarget of a governmental task force investigating social security fraud, Dr. Ang himself became a\nperson of interest. In February 1994, the task force executed a search warrant on Dr. Ang\xe2\x80\x99s\noffice and seized copies of two sets of signed tax returns that reported conflicting amounts of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c213\nincome. The Angs were arrested in April 1996, following the execution of a search warrant at\ntheir residence. A year later, the Angs were indicted on 18 criminal counts, including conspiracy\nto defraud the United States, bank and tax fraud, and filing false statements.\nThe Angs retained defendants Richard Hansen and Michael G. Martin for flat fees of $225,000\nand $100,000, respectively. Attorneys Hansen and Martin engaged in a round of plea\nnegotiations prior to trial, but the Angs rejected the plea bargain. The case proceeded to a jury\ntrial before Judge Tanner in federal district court in December 1997. On the fifth day of trial, just\nprior to the conclusion of the government\'s case, Hansen and Martin recommended that the\nAngs accept another proffered plea, one that the Angs viewed as the least attractive of any\nagreement previously presented. After Dr. Ang was allegedly told that Mrs. Ang could face\nsexual assault in prison, the Angs agreed to plead guilty to two of the 18 counts.\nThe Angs then engaged attorney Monte Hester to review the plea discussions and provide a\nsecond opinion. Hester concluded that the government had not met its burden of proof and that\nthe plea agreement provided the Angs with no material benefit. Retaining Hester and Keith A.\nMacFie to represent them, the Angs successfully moved to withdraw the pleas, which Judge\nTanner had never formally accepted. In September 1999, the matter again proceeded to trial\nbefore Judge Tanner, with the Angs waiving their right to a jury. Although the government\noffered another plea bargain prior to trial, one requiring no plea on Dr. Ang\'s part, a\nmisdemeanor or felony for Mrs. Ang, and a $500,000 fine, the Angs rejected the plea and were\nacquitted on all 18 counts.\nThe Angs, along with Evergreen Medical, filed the present legal malpractice action against\nHansen and Martin in May 2000 in Pierce County Superior Court. The complaint stated claims\nfor legal malpractice and for violations of the Washington Consumer Protection Act. The trial\ncourt denied the defendants\' motion for summary judgment, and a jury trial began in November\n2001. The trial court instructed the jury that the Angs had to prove by a preponderance of the\nevidence that they were innocent of the underlying criminal charges. On January 11, 2002,\nresponding to the initial two questions on a special verdict form, the jury found that the Angs had\nnot \xe2\x80\x9cproven by a preponderance of the evidence they were innocent of all the criminal charges\nagainst them.\xe2\x80\x9d As to the verdict form\xe2\x80\x99s third question, asking whether \xe2\x80\x9cany of the defendants had\nbeen negligent,\xe2\x80\x9d the jury made a finding of negligence against Martin only.\nThe plaintiffs appealed, but the Court of Appeals affirmed. This court granted the plaintiffs\xe2\x80\x99\npetition for review.\nISSUES\nWhere a legal malpractice suit stems from the representation of clients in a criminal prosecution,\nmust plaintiffs who were acquitted of the criminal charges prove their actual innocence of the\ncrimes, or does their acquittal satisfy the innocence element of their malpractice action?\nANALYSIS\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c214\n\nEssential Elements of Legal Malpractice Claims against Criminal Defense Counsel. A plaintiff\nclaiming negligent representation by an attorney in a civil matter bears the burden of proving\nfour elements by a preponderance of the evidence:\n(1) The existence of an attorney-client relationship which gives rise to a duty of care on\nthe part of the attorney to the client; (2) an act or omission by the attorney in breach of\nthe duty of care; (3) damage to the client; and (4) proximate causation between the\nattorney\xe2\x80\x99s breach of the duty and the damage incurred.\nThe fourth element, proximate causation, includes \xe2\x80\x9ccause in fact and legal causation.\xe2\x80\x9d Cause in\nfact, or \xe2\x80\x9cbut for\xe2\x80\x9d causation, refers to \xe2\x80\x9cthe physical connection between an act and an injury.\xe2\x80\x9d In a\nlegal malpractice trial, the \xe2\x80\x9ctrier of fact will be asked to decide what a reasonable jury or fact\nfinder in the underlying trial or \xe2\x80\x98trial within the trial\xe2\x80\x99 would have done but for the attorney\xe2\x80\x99s\nnegligence.\xe2\x80\x9d Legal causation, however, presents a question of law: \xe2\x80\x9cIt involves a determination\nof whether liability should attach as a matter of law given the existence of cause in fact.\xe2\x80\x9d To\ndetermine whether the cause in fact of a plaintiff\xe2\x80\x99s harm should also be deemed the legal cause\nof that harm, a court may consider, among other things, the public policy implications of holding\nthe defendant liable. In \xe2\x80\x9ccriminal malpractice\xe2\x80\x9d suits, two elements related to proximate causation\nhave been added. In Falkner v. Foshaug, the Court of Appeals \xe2\x80\x9cconcluded that postconviction\nrelief is a prerequisite to maintaining a criminal malpractice suit and proof of innocence is an\nadditional element a criminal defendant/malpractice plaintiff must prove to prevail at trial in his\nlegal malpractice action.\xe2\x80\x9d\nThe trial court in the present case thus instructed the jury as follows on the elements of the\nAngs criminal malpractice claims:\nTo prove their legal malpractice claims, the plaintiffs bear the burden of proving by a\npreponderance of the evidence each of the following:\nFirst, that there is an attorney-client relationship giving rise to a duty owed by a\ndefendant to a plaintiff;\nSecond, that plaintiffs have obtained a successful challenge to their convictions based\non their attorneys failure to adequately defend them;\nThird, that plaintiff was innocent of the crimes charged;\nFourth, that there is an act of omission by a defendant that breached the duty of care of\nan attorney;\nFifth, that a plaintiff was damaged; and\nSixth, that a breach of duty by a defendant is a proximate cause of a plaintiff\xe2\x80\x99s damages.\nThe Angs assigned error to this instruction, contending that their undisputed acquittal of the\ncriminal charges met not only the additional element of postconviction relief but also the\ninnocence requirement.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c215\nBy successfully withdrawing their guilty pleas and receiving an acquittal on all charges, the Angs\nunquestionably received the equivalent of postconviction relief, but contrary to their contention,\nthey did not thereby satisfy the innocence requirement. The Angs mistakenly claim that they\nwere simply required to prove legal innocence, not actual innocence.\xe2\x80\x9d Legal guilt or innocence is\nthat determination made by the trier of fact in a criminal trial,\xe2\x80\x9d whereas \xe2\x80\x9cactual guilt is intended\nto refer to a determination in a civil trial, by a preponderance of the evidence, that the defendant\nengaged in the conduct he was accused of in the prior criminal proceeding.\xe2\x80\x9d But the Falkner\ncourt referred explicitly to the \xe2\x80\x9cactual innocence requirement\xe2\x80\x9d and at no point equated the\ninnocence requirement with legal innocence. Plainly, a requirement of legal innocence would\nhave been redundant alongside the additional, unchallenged requirement of postconviction relief\nand would have necessitated a confusing overlay of standards of proof, requiring the\nmalpractice jury to consider whether the Angs had proved by a preponderance of the evidence\nthat they would not have been found guilty beyond a reasonable doubt in the underlying criminal\ntrial.\nMoreover, proving actual innocence, not simply legal innocence, is essential to proving\nproximate causation, both cause in fact and legal causation. Unless criminal malpractice\nplaintiffs can prove by a preponderance of the evidence their actual innocence of the charges,\ntheir own bad acts, not the alleged negligence of defense counsel, should be regarded as the\ncause in fact of their harm. Likewise, if criminal malpractice plaintiffs cannot prove their actual\ninnocence under the civil standard, they will be unable to establish, in light of significant public\npolicy considerations, that the alleged negligence of their defense counsel was the legal cause\nof their harm. Summarizing the policy concerns, the Falkner court observed that, \xe2\x80\x9crequiring a\ndefendant to prove by a preponderance of the evidence that he is innocent of the charges\nagainst him will prohibit criminals from benefiting from their own bad acts, maintain respect for\nour criminal justice systems procedural protections, remove the harmful chilling effect on the\ndefense bar, prevent suits from criminals who may be guilty, but could have gotten a better deal,\nand prevent a flood of nuisance litigation.\xe2\x80\x9d\nIn the alternative, the Angs argue that, if a plaintiff\xe2\x80\x99s actual guilt or innocence has any place in a\ncriminal malpractice suit, the issue should be raised as an affirmative defense, not as an\nelement of the plaintiffs cause of action. The Angs find support in Shaw II, the only decision\nadopting the actual innocence requirement and shifting to the criminal malpractice defendant\n\xe2\x80\x9cthe burden of proof by a preponderance of the evidence as to the actual guilt of the plaintiff.\xe2\x80\x9d As\nrespondent Martin explained, however, \xe2\x80\x9cthe criminal defendant/malpractice plaintiff is in a far\nbetter position to bear the burden of establishing innocence,\xe2\x80\x9d since, unlike his defense attorney,\nhe \xe2\x80\x9cknows if he is actually innocent,\xe2\x80\x9d \xe2\x80\x9cwas, presumably, present or involved in the underlying\nevents which led to the criminal charges,\xe2\x80\x9d \xe2\x80\x9chas unlimited access to the information about his\nown acts necessary to prove innocence,\xe2\x80\x9d \xe2\x80\x9cwould know what, if any, inculpatory facts he withheld\nfrom his lawyer,\xe2\x80\x9d and would have the \xe2\x80\x9copportunity to accept a plea, potentially an Alford plea\nwhich could preserve his malpractice claim, before all facts and witness testimony have been\ndeveloped or are known to his or her attorney.\xe2\x80\x9d We find this practical analysis persuasive and\nthus decline to adopt the minority position of Shaw II.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c216\nIn sum, we conclude that the Angs were properly required to prove by a preponderance of the\nevidence that they were actually innocent of the underlying criminal charges. We therefore\naffirm the Court of Appeals.\nCONCLUSION\nWe conclude that, as plaintiffs in a criminal malpractice action, the Angs were properly required\nto prove by a preponderance of the evidence that they were actually innocent of the underlying\ncriminal charges. We find no persuasive reasons for this court to follow the minority position and\nshift the burden to the defendant attorneys to prove that their former clients were actually guilty\nof the charged crimes.\nC. JOHNSON, MADSEN, BRIDGE and FAIRHURST, JJ., concur.\nSANDERS, J. (dissenting).\nI dissent because the malpractice standard for criminal cases should be the same as civil. There\nis no reason to invite malpractice in criminal cases by heightening the plaintiff\xe2\x80\x99s burden to prove\npostconviction relief and actual innocence. In every situation a client should rightfully expect\ncompetent legal representation.\nWe have clearly stated the standard for legal malpractice:\nTo establish a claim for legal malpractice, a plaintiff must prove the following elements:\n(1) The existence of an attorney-client relationship which gives rise to a duty of care on\nthe part of the attorney to the client; (2) an act or omission by the attorney in breach of\nthe duty of care; (3) damage to the client; and (4) proximate causation between the\nattorney\'s breach of the duty and the damage incurred.\nThis rule does not suggest the additional requirements the majority adds to cases of criminal\nmalpractice, namely, postconviction relief and proof of actual innocence. I see no reason to add\nthem.\nThe majority cites a Court of Appeals case, Falkner v. Foshaug, to support additional elements.\nThe Court of Appeals opinion Falkner is not binding authority, nor is case law from other\njurisdictions upon which Falkner is based. Nor am I persuaded by its logic. Attorneys who\nnegligently represent their clients should be responsible for any harm that results from the\nmisconduct. It does not matter if the subject matter of the case is civil or criminal. Forcing\ncriminal defendants to prove actual innocence does not serve any purpose except to frustrate\nthe client\xe2\x80\x99s right to competent representation.\nCiting a \xe2\x80\x9cpublic policy\xe2\x80\x9d present in the minds of the individuals in the majority, the majority argues\nthe defendant\'s acts should be viewed as the cause of any harm unless he demonstrates his\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c217\ninnocence. However, our constitution sets the \xe2\x80\x9cpublic policy\xe2\x80\x9d which entitles criminal defendants\nto adequate representation. I prefer that policy as my guide.\nThe issue is causation. Under our precedent, cause in fact is determined by the jury as a\nquestion of fact. Cause in fact is a minimum threshold that asks but for the lawyer\xe2\x80\x99s negligence\nwould the client have been harmed. In other words, would the result be different if the lawyer\nhad used reasonable care?\nLegal causation is a subsequent inquiry, asking as a matter of law whether liability should\nattach. The majority argues a criminal defendant should not profit from his crimes, and hence\nthe defense attorney should not be liable for his negligence unless the defendant first proves his\nown innocence. I disagree. The criminal defendant is equally entitled to competent\nrepresentation, and the negligent attorney should take responsibility for his malpractice. The\nmajority\xe2\x80\x99s rule simply invites malpractice since the defense attorney knows he is held to a lower\nstandard. Proving innocence is impossible since a negative cannot be proved.\nHere the Angs\xe2\x80\x99s defense attorneys, Michael Martin and Richard Hansen, recommended a\nparticular plea agreement. The Angs initially agreed but later withdrew the plea on\nrecommendation from new counsel and were acquitted on all charges at a subsequent trial.\nThey sued their former defense attorneys and a jury found that Martin alone was negligent even\nthough it found the Angs had not proved their innocence by a preponderance of the evidence.\nSince the latter consideration should be irrelevant, Martin should bear the responsibility for his\nnegligence. I would reverse as to Martin, and remand for a trial on damages.\nALEXANDER, C.J. (concurring in dissent).\nI agree with Justice Sanders that the trial court erred in instructing the jury that Jessy and Editha\nAng had to prove that they were actually innocent of the crime charged in order to prevail in\ntheir legal malpractice claim against attorneys Richard Hansen and Michael Martin. For that\nreason, we should reverse the Court of Appeals and remand to the trial court for a new trial on\nthe Angs\xe2\x80\x99 claim against Martin.\nI write separately because, in my view, we should not stop with a determination that the trial\ncourt erred but should go further to indicate that the defendant attorney may raise the issue of\nthe plaintiff\xe2\x80\x99s actual guilt in the criminal case as an affirmative defense. That was the position\ntaken by the Supreme Court of Alaska in a similar case, Shaw v. Department of Administration.\nThere, the court said that because plaintiffs in such actions must already bear the burden of\nproving that they have obtained postconviction relief from their criminal convictions, they should\nnot have to prove their \xe2\x80\x9cactual innocence.\xe2\x80\x9d The court went on to indicate, however, that the\ndefendant may raise the issue of the plaintiff\xe2\x80\x99s \xe2\x80\x9cactual guilt\xe2\x80\x9d as an affirmative defense and seek\nto establish it by a preponderance of the evidence. Although the Alaska court did not engage in\nan extensive discussion of its reasons for placing the burden on the defendant to establish this\naffirmative defense, it did indicate that putting the burden there is consistent with the\nrequirement that defendants establish traditional affirmative defenses that look to plaintiffs\xe2\x80\x99\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c218\nactions such as contributory/comparative negligence and assumption of the risk. The Alaska\nrule makes perfect sense to me for that reason and for the additional reason that it is consonant\nwith the traditional notion that one is presumed innocent until proven guilty beyond a reasonable\ndoubt. Furthermore, shifting the burden to the defendant relieves the plaintiff of the almost\nimpossible burden of proving innocence while at the same time addressing the policy concern\nnoted by the majority, that criminals should not benefit from \xe2\x80\x9ctheir own bad acts.\xe2\x80\x9d\nIRELAND, J. Pro Tem., concurs.\nCHAMBERS, J. (concurring in dissent).\nI concur in Justice Sanders\xe2\x80\x99 dissent but write separately to express my indignation that this\ncourt, based upon the policy of protecting lawyers, would carve out a special protection for\ncriminal defense attorneys whose acts of professional negligence are harmful to their clients.\nUnder this logic, it is not enough for the injured client to prove actual harm from the attorney\xe2\x80\x99s\nfailure to meet professional standards; the injured client must also prove that her hands were\nalways clean. Under this logic, why not give immunity to accountants for professional\nnegligence unless the accountant\xe2\x80\x99s client can prove he or she never understated income or\nrequested an unavailable deduction, even when the accountants\xe2\x80\x99 bad acts caused actual harm\nto their clients or society? Surely tax dodgers should not profit from their misdeeds. Under this\nlogic, why not give immunity to health care providers who harm their patients unless the patient\ncan prove perfect good health but for the negligence of the provider? Surely the unhealthy\nshould not profit from their illness.\nBut this logic ignores the fact that professionals owe a duty to the sick as well as the healthy; to\nthe scrupulously honest business woman as well as the one looking for the angle; to the guilty\nas well as the innocent. Those of us caught in the grip of the law are always entitled to\ncompetent legal representation whether or not we are totally innocent. The heart of the criminal\ndefense lawyer\xe2\x80\x99s job is often not to prove absolute innocence; the irreducible core of the job is\nto make the state prove its case and make the best case for the defendant possible. Often the\nsole issue is the level of culpability and the sanction to be imposed upon the client. The\ngovernment may seek multiple counts where a single count is appropriate, seek charges of a\nhigher degree than the evidence supports, or seek a sentence disproportionate to the offense.\nThe negligence of her lawyer may cost her client her fortune, her liberty, or her life. The \xe2\x80\x9cactual\ninnocence\xe2\x80\x9d requirement is impractical and harmful in the area of criminal malpractice law; it\ncreates an almost impossible burden and provides almost absolute immunity to criminal defense\nlawyers.\nThe most troubling aspect of the actual innocence requirement announced by the majority lies\nwith its origin. It is based upon a policy to protect lawyers from lawsuits. Tort actions are\nmaintained for a variety of reasons, including the deterrence of wrongful conduct. As a matter of\nbasic policy, accountability, compensation, and deterrence of wrongful conduct should trump\nprotecting lawyers from lawsuits.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c219\nSecond, while it may be true that a majority of courts that have reached the issue require the\nplaintiff to establish actual innocence, the numbers do not appear to be great. Only Missouri,\nNew York, Massachusetts, Alaska, Pennsylvania, California, New Hampshire, Nebraska, Illinois,\nFlorida, and Wisconsin require either proof of actual innocence or that the conviction was set\naside on postconviction relief. This is hardly a national consensus.\nThis court should protect the public from lawyers\xe2\x80\x99 misdeeds, not the other way around. A plaintiff\nwho is not categorically innocent seeking compensation under ordinary principles of tort law\nfaces no light burden. Such a guilty plaintiff must prove a duty, a breach of that duty, injuries\nproximately caused by the breach, and the amount of his damages. I see no reason to provide\nadditional protections for lawyers.\nQuestions:\n1. Is the \xe2\x80\x9cactual innocence\xe2\x80\x9d requirement imposed by the court similar to the \xe2\x80\x9ccase within a\ncase\xe2\x80\x9d doctrine? Does it requirement a criminal defendant to prove more?\n2. Should a criminal defendant be required to prove actual innocence in order to show\nmalpractice? Can a criminal defense lawyer provide negligent representation to a guilty\nclient?\n3. The majority is concerned about the possibility of criminals \xe2\x80\x9cbenefiting from their own\nbad acts.\xe2\x80\x9d What is the benefit in question?\n4. Criminal defense attorneys are often appointed counsel. Should that affect the standard\nof care? Should it affect the standard for evaluating whether they have provided\nnegligent representation? Should the standard for malpractice differ depending on\nwhether the client is paying for representation?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c220\nSection 4: Conflicts of Interest\n4.1: Identifying Conflicts of Interest\nI can\'t believe you had a life before me. I can\'t believe they let you run around free, just putting\nyour body wherever it seemed like a good idea.40\nWhat is a Conflict of Interest?\nAttorneys must always watch for and avoid \xe2\x80\x9cconflicts of interest.\xe2\x80\x9d A conflict of interest exists\nwhenever an attorney may have to choose between the interests of a client and some other\ninterest. Under the fiduciary duty of loyalty, attorneys must always put the interests of their\nclients before any other interests, including their own. Accordingly, a conflict of interest exists\nwhenever the interests of a client differ from the interests of another client, the attorney, or a\nthird party with a relationship to the attorney.\nBroadly speaking, there are four categories of conflicts of interest, e.g. conflicts between the\ninterests of a client and:\n1.\n2.\n3.\n4.\n\nthe lawyer\xe2\x80\x99s own interests\nthe lawyer\xe2\x80\x99s duties to another client\nthe lawyer\xe2\x80\x99s duties to a former client\nthe lawyer\'s duties to a third person.\n\nThe conflict of interest rules are intended to ensure that attorneys observe the duty of loyalty, by\npreventing them from representing clients with competing interests.\nHowever, the term \xe2\x80\x9cconflict of interest\xe2\x80\x9d is hard to define with any precision, because the concept\nof a conflict of interest is both procedural and substantive, reflecting the intersection of formal\nrules and normative values. Not every formal conflict of interest presents a real conflict of\ninterest. Some conflicts are trivial, and do not create a substantial concern. Others are merely\nspeculative, and do not require analysis.\nFormally, a conflict of interests exists whenever an attorney\xe2\x80\x99s legal duties to a client actually or\npotentially conflict with the interests of the attorney, another actual or potential client, or a third\nparty to whom the attorney has a legal duty. But substantively, perhaps not every formal conflict\nof interest should necessarily qualify as an actual conflict of interest. Many are trivial, and many\nmore will never materialize. If a formal conflict does not present a substantive conflict, is it really\na conflict at all?\nUltimately, the definition of a conflict of interest depends on the purpose of the conflicts rules. If\nthe purpose of the rules is to protect clients from their attorneys, then perhaps the rules should\n40\n\nLiz Phair, Jealousy, Whip-Smart (1994).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c221\nbe interpreted and applied literally, in order to ensure that unscrupulous attorneys cannot avoid\nregulation. But if the purpose of the rules is to govern a business relationship between clients\nand their attorneys, then perhaps the rules should be interpreted and applied more flexibly, in\norder to help parties reach a mutually agreeable outcome.\nABA Canons of Professional Ethics: Canon 6 (1908)\nIt is the duty of the lawyer at the time of retainer to disclose to the client all the\ncircumstances of his relations to the parties, and any interest in or connection with the\ncontroversy, which might influence the client in the selection of counsel.\nIt is unprofessional to represent conflicting interests, except by express consent of all\nconcerned given after a full disclosure of the facts. Within the meaning of this canon, a\nlawyer represents conflicting interests when, on behalf of one client, it is his duty to\ncontend for that which duty to another client requires him to oppose.\nThe obligation to represent the client with undivided fidelity forbids also the subsequent\nacceptance of retainers or employment from others in matters adversely affecting any\ninterest of the client with respect to which confidence has been reposed.\nABA Model Code of Professional Responsibility (1980)\nCanon 5: A Lawyer Should Exercise Independent Professional Judgment on Behalf of a\nClient\nThe professional judgment of a lawyer should be exercised, within the bounds of the law,\nsolely for the benefit of his client and free of compromising influences and loyalties.\nNeither his personal interests, the interests of other clients, nor the desires of third\npersons should be permitted to dilute his loyalty to his client.\nModel Rule 1.7: Conflict of Interest: Current Clients\na. Except as provided in paragraph (b), a lawyer shall not represent a client if the\nrepresentation involves a concurrent conflict of interest. A concurrent conflict of interest\nexists if:\n1. the representation of one client will be directly adverse to another client; or\n2. there is a significant risk that the representation of one or more clients will be\nmaterially limited by the lawyer\'s responsibilities to another client, a former client\nor a third person or by a personal interest of the lawyer.\nb. Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a\nlawyer may represent a client if:\n1. the lawyer reasonably believes that the lawyer will be able to provide competent\nand diligent representation to each affected client;\n2. the representation is not prohibited by law;\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c222\n3. the representation does not involve the assertion of a claim by one client against\nanother client represented by the lawyer in the same litigation or other\nproceeding before a tribunal; and\n4. each affected client gives informed consent, confirmed in writing.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 121: The Basic Prohibition of\nConflicts of Interest\nA conflict of interest is involved if there is a substantial risk that the lawyer\'s\nrepresentation of the client would be materially and adversely affected by the lawyer\'s\nown interests or by the lawyer\'s duties to another current client, a former client, or a third\nperson.\nGlueck v. Jonathan Logan, Inc., 653 F. 2d 746 (2d Cir. 1981)\nSummary: Jonathan Logan, Inc. fired Charles Glueck, who hired Phillips Nizer to\nrepresent him in a wrongful termination action. Logan filed a motion to disqualify Phillips\nNizer because the firm represented the Apparel Manufacturers Association, Inc., a\nmembership organization that includes one of Logan\xe2\x80\x99s divisions. The district court\ngranted the motion, because the relationship between Phillips Nizer and Logan\nresembled an attorney-client relationship, and the subject matter of Glueck\xe2\x80\x99s action was\n\xe2\x80\x9csubstantially related\xe2\x80\x9d to Phillips Nizer\xe2\x80\x99s representation of the Association. The circuit\ncourt affirmed, because representing both Glueck and the Association would create a\n\xe2\x80\x9crealistic risk\xe2\x80\x9d of Phillips Nizer breaching its duty of loyalty.\nNEWMAN, Circuit Judge:\nThe issue on this appeal is whether in the circumstances of this case a law firm that represents\nan incorporated trade association may represent an individual client in a suit against a\ncorporation one division of which is a member of the association. The District Court for the\nSouthern District of New York ruled that the firm must be disqualified. We conclude that Judge\nConner applied the correct standards of law and reached a result well within his discretion, and\nwe therefore affirm.\nThe appellant, Charles Glueck, formerly employed as an executive of appellee Jonathan Logan,\nInc., brought this suit against Logan, alleging that he was discharged in breach of his\nemployment contract. Logan promptly moved to disqualify Glueck\xe2\x80\x99s law firm, Phillips, Nizer,\nBenjamin, Krim & Ballon. The motion was based on the following undisputed facts. Phillips Nizer\nrepresents the Apparel Manufacturers Association, Inc., a not-for-profit incorporated trade\nassociation of dress manufacturers with more than 100 members. The sole function of the\nAssociation is to negotiate multi-employer collective bargaining agreements on behalf of its\nmembers with employees represented by the International Ladies Garment Workers\xe2\x80\x99 Union.\nOne of the Association\xe2\x80\x99s members is R & K Originals, a division of Logan. The division\xe2\x80\x99s\npresident, Manny Eagle, is executive vice-president of the Association and a member of the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c223\nAssociation\xe2\x80\x99s negotiating committee. Eagle has had occasion to meet with lawyers from Phillips\nNizer and discuss labor matters with them. On these facts, Judge Conner granted appellee\xe2\x80\x99s\nmotion to disqualify Phillips Nizer from representing Glueck in his suit against Logan. From that\nruling, Glueck appeals.\nRecognizing the serious impact of attorney disqualification on the client\xe2\x80\x99s right to select counsel\nof his choice, we have indicated that such relief should ordinarily be granted only when a\nviolation of the Canons of the Code of Professional Responsibility poses a significant risk of trial\ntaint. That risk is encountered when an attorney represents one client in a suit against another\nclient, in violation of Canon 5, or might benefit a client in a lawsuit by using confidential\ninformation about an adverse party obtained through prior representation of that party, in\nviolation of Canon 4. Mindful of our standards, the parties have joined issue on whether Logan\nis a client of Phillips Nizer by virtue of the firm\xe2\x80\x99s representation of the Association. Glueck\ncontends that members of an incorporated trade association are not clients of the association\xe2\x80\x99s\nlawyer and emphasizes that the retainer agreement between Phillips Nizer and the Association\nexplicitly negates the firm\xe2\x80\x99s representation of the Association\xe2\x80\x99s members. Logan responds that\nthe members of an incorporated association are the clients of the association\xe2\x80\x99s lawyer and\nargues that Phillips Nizer\xe2\x80\x99s retainer agreement only assures it the right to charge separate fees\nfor legal work done specifically for an Association member.\nWe share Judge Conner\xe2\x80\x99s view that the issue is not whether Phillips Nizer\xe2\x80\x99s relationship to\nLogan is in all respects that of attorney and client, but whether there exist sufficient aspects of\nan attorney-client relationship \xe2\x80\x9cfor purposes of triggering inquiry into the potential conflict\ninvolved in Phillips Nizer\xe2\x80\x99s role as plaintiff\'s counsel in this action.\xe2\x80\x9d41 Having concluded that such\ninquiry should be made, Judge Conner then applied the strict standards that ordinarily prohibit\nrepresentation of adverse interests, and determined that, in view of the relationship between the\nsubject of Glueck\xe2\x80\x99s lawsuit and the nature of the services rendered by Phillips Nizer to the\nAssociation and its members, Phillips Nizer had not demonstrated \xe2\x80\x9cthat there will be no actual or\napparent conflict in loyalties or diminution in the vigor of its representation.\xe2\x80\x9d\nWe reach the same conclusion, but analyze the issue in a slightly different way. We do not\nbelieve the strict standards are inevitably invoked whenever a law firm brings suit against a\nmember of an association that the firm represents. If they were, many lawyers would be\nneedlessly disqualified because the standards of Canon 5 impose upon counsel who seeks to\navoid disqualification a burden so heavy that it will rarely be met. That burden is properly\nimposed when a lawyer undertakes to represent two adverse parties, both of which are his\nclients in the traditional sense. But when an adverse party is only a vicarious client by virtue of\nmembership in an association, the risks against which Canon 5 guards will not inevitably arise.\nA law firm that represents the American Bar Association need not decline to represent a client\ninjured by an automobile driven by a member of the ABA. Moreover, if Canon 5 were applicable\nto all suits against association members, there would be a temptation to water down the strict\nstandards of Canon 5 and find them met more easily than in cases where the adverse parties\n41\n\nWe have previously held the standards of Canon 5 to be applicable even though the interests adverse\nto those of a law firm\'s client are not those of another client in the traditional sense.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c224\nare really clients of the same lawyer. In this case, Judge Conner, after finding Canon 5\napplicable, applied what amounted to a \xe2\x80\x9csubstantial relationship\xe2\x80\x9d test, and concluded that the\nsubject of Glueck\xe2\x80\x99s lawsuit was substantially related to Phillips Nizer\xe2\x80\x99s representation of the\nAssociation. However, "the \xe2\x80\x98substantial relationship\xe2\x80\x99 test does not set a sufficiently high\nstandard by which the necessity for disqualification under Canon 5 should be determined.\xe2\x80\x9d We\nthink the standards of Canon 5 should be strict. We also believe those standards should apply\nto suits against association members only when the risks against which Canon 5 protects are\nlikely to arise.\nThis approach leads us to use the \xe2\x80\x9csubstantial relationship\xe2\x80\x9d test in determining when Canon 5\nshould be applied to suits brought by an association\xe2\x80\x99s law firm against an association member.\nDisqualification will ordinarily be required whenever the subject matter of a suit is sufficiently\nrelated to the scope of the matters on which a firm represents an association as to create a\nrealistic risk either that the plaintiff will not be represented with vigor or that unfair advantage will\nbe taken of the defendant. Moreover, although our concern is with the risk of tainting a trial,\nonce that risk appears, it is appropriate to assess the risk that prosecution of a plaintiff\xe2\x80\x99s lawsuit\nby an association\xe2\x80\x99s law firm will inhibit the free flow of information from the defendant to the firm\nthat is necessary for the firm\xe2\x80\x99s proper representation of the association.\nThough structured in a slightly different framework,42 Judge Conner\xe2\x80\x99s findings fully justify\ndisqualification under the approach we have outlined. Judge Conner relied upon the risk that the\nissue of whether Logan had cause to terminate Glueck might well arise in the course of\ncollective bargaining discussions conducted by Phillips Nizer for the Association. He also noted\nthe risk that in preparing for collective bargaining sessions, the law firm might learn of Logan\xe2\x80\x99s\npolicies or past practices bearing on the subject of Glueck\xe2\x80\x99s termination. These risks\ndemonstrate the requisite relationship between Glueck\xe2\x80\x99s lawsuit and the subject matter of\nPhillips Nizer\xe2\x80\x99s representation of the Association. Because of that relationship, the strict\nstandards apply,43 and we agree with Judge Conner that appellant has not sustained the heavy\nburden of demonstrating that, under those standards, disqualification can be avoided. The entry\nof an order of disqualification was well within the proper exercise of discretion by the District\nCourt.44 The order is affirmed.\n42\n\nJudge Conner, in effect, used the \xe2\x80\x9csubstantial relationship\xe2\x80\x9d test to determine whether Phillips Nizer had\nmet its burden under Canon 5; we use the test to determine whether Canon 5 is applicable.\n43\nWe reject the appellant\'s contention that the result reached by Judge Conner is foreclosed by Board of\nEducation v. Nyquist. That decision concerned a lawyer who represented male teachers in litigation\nadverse to the interests of female teachers, under circumstances where the lawyer was supplied to the\nmale teachers pursuant to a legal service program supported in part by the union dues of both the male\nand female teachers. A disqualification order was reversed for lack of any risk that the lawyer\xe2\x80\x99s loyalty to\nhis male clients would be diminished or that he might gain unfair advantage through access to any\nprivileged information from the female teachers.\n44\nWe reject, as did Judge Conner, the appellant\'s contention that disqualification should not occur\nbecause Logan\'s division, R & K Originals, is a member of the Association, rather than Logan itself. The\nrisks identified by Judge Conner are sufficient to warrant disqualification even though only Logan\'s\ndivision is a member of the Association. Nor do we accept the contention that it will be unduly\nburdensome for law firms that represent trade associations to inform themselves of the corporate identity\nof those members of an association that are constituent parts of a non-member corporation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c225\n\nQuestions:\n1. Why did Phillips Nizer have a conflict of interest?\n2. Why did the district court disqualify Phillips Nizer? Why did the circuit court disqualify\nPhillips Nizer? How did their reasoning differ, if at all?\n3. The court distinguishes this case from Board of Education v. Nyquist. Do you find that\ndistinction convincing?\n4. If the Association kicked out Logan, would Phillips Nizer still have a conflict of interest or\nbe disqualified?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c226\n\nGutting v. Falstaff Brewing Corp., 710 F. 2d 1309 (8th Cir. 1983)\nSummary: Ferdinand Gutting was the president of Falstaff Brewing, which gave him a\nlife insurance policy, payable unless he was discharged for proper cause. Paul\nKalmanovitz bought Falstaff and fired Gutting, and when Gutting died, Falstaff refused to\npay his life insurance benefits. Virginia Gutting filed a breach of contract claim, and hired\nattorney James S. McClellan to represent her. Falstaff filed a motion to disqualify\nMcClellan, on the ground that he had previously represented Falstaff. McClellan\nwithdrew, and Gutting hired Harry B. Wilson. But Wilson also withdrew after identifying a\nconflict of interest, and Gutting hired David G. Dempsey. In the meantime. Falstaff filed a\nmotion for summary judgment, arguing that Gutting had admitted all of the facts alleged\nin its complaint by failing to timely answer its request for admissions. The district court\ngranted the motion, but the circuit court reversed, holding that the district court should\nhave considered the disqualification of Gutting\xe2\x80\x99s counsel.\nLAY, Chief Judge.\nVirginia M. Gutting appeals from an order of the district court entering summary judgment in\nfavor of Falstaff Brewing Corporation and denying her motion for summary judgment. Gutting\xe2\x80\x99s\nprimary argument on this appeal is based on the claim that the district court erred in denying her\nmotion for leave to file answers out of time to Falstaff\xe2\x80\x99s request for admissions and in ordering\nthe matters set forth in the request deemed admitted. Because we conclude that the district\ncourt erred by not allowing Gutting to file late answers to the request for admissions, we reverse\nand remand.\nVirginia Gutting is the widow of Ferdinand (Ferd) J. Gutting, former member of the Board of\nDirectors and President of Falstaff. In 1972 Falstaff established an insurance plan for certain\nkey employees. Pursuant to this plan, in January 1973, Ferdinand Gutting entered into a written\nagreement with Falstaff entitled Employee\xe2\x80\x99s Death Benefit Agreement. The purpose of the\nagreement was to provide for Falstaff\xe2\x80\x99s payment of a death benefit to Virginia Gutting, Ferd\nGutting\xe2\x80\x99s designated payee. Falstaff purchased three life insurance policies on Ferd Gutting\xe2\x80\x99s\nlife to secure this obligation. The agreement provided that all benefits would be forfeited if (1)\nthe life insurance policies were contested successfully by the insurance company; (2) the\nemployee left Falstaff\xe2\x80\x99s employment voluntarily, subject to certain vesting provisions; or (3) the\nemployee was discharged \xe2\x80\x9cfor proper cause.\xe2\x80\x9d\nIn early 1975, Paul Kalmanovitz purchased voting control of Falstaff and became Chairman of\nthe Board. Subsequently, for reasons in dispute in this lawsuit, Ferd Gutting\xe2\x80\x99s employment with\nFalstaff was terminated and the Board of Directors voted to deny Ferd Gutting all benefits\nbecause his termination was for cause. Ferd Gutting died in December 1980. Falstaff has\nrefused to pay the amounts due to Virginia Gutting pursuant to the terms of the Employee\xe2\x80\x99s\nDeath Benefit Agreement and she brought suit to recover the proceeds. Throughout this\nlitigation Falstaff has asserted as an affirmative defense that Ferd Gutting was terminated for\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c227\ncause and thus forfeited all benefits due his beneficiary under the agreement. Virginia Gutting\nclaims the termination was not for \xe2\x80\x9cproper cause\xe2\x80\x9d as that term is defined in the agreement.\nProcedural History.\nVirginia Gutting filed a complaint on July 8, 1981, through her attorney James S. McClellan. On\nSeptember 30, 1981, Falstaff filed a motion to disqualify McClellan because he formerly had\nbeen a member of Falstaff\xe2\x80\x99s Board of Directors and outside general counsel to Falstaff. Falstaff\nasserted that McClellan had material, firsthand knowledge of events relevant to Falstaff\xe2\x80\x99s\ndefense and that McClellan would likely be called as a witness. While the motion to disqualify\nwas pending, on October 13, 1981, Falstaff filed its request for admissions, first interrogatories,\nand request for production of documents.45 Thereafter, the district court held a conference at\nwhich McClellan indicated he would withdraw voluntarily. On December 4, 1981, McClellan\nformally withdrew.\nOn December 11, 1981, Harry B. Wilson entered his appearance on behalf of Gutting. On\nJanuary 4, 7, and 8, 1982, Falstaff served notices of 15 depositions to begin on February 8 in\nProvidence, Rhode Island, and to continue throughout February and early March around the\ncountry. On January 7 counsel for Falstaff, Steven P. Sanders, sent a letter to Harry Wilson\nconcerning the failure to respond to the request for admissions and asking for the answers.\nWilson and Sanders discussed the request over the telephone several days later and Sanders\nagreed to wait an indefinite period of time.\nAccording to an affidavit filed by Wilson he began to prepare for the upcoming depositions and\nto draft responses to discovery requests on January 29, 1982. Wilson further swore that on\nJanuary 30 he concluded his firm had a serious conflict of interest because some of the\nscheduled deponents were current clients of the firm. These clients had on-going litigation\nmatters with Falstaff. Wilson researched the nature of the conflict, discussed it with lead counsel\nin the case, and called Sanders on February 6, 1982, to inform him of the conflict of interest. On\nFebruary 8 Wilson appeared before the district court and requested leave to withdraw. The\nmotion evidently was pending throughout February and the scheduled depositions for February\nwere postponed.\n\n45\n\nFalstaff\'s request for admissions strategically concerned the major contested factual issue in the case\nof whether Ferd Gutting had been discharged for cause. The request stated in full:\n1. Admit that the life insurance program set forth and discussed in your complaint allowed Falstaff\nto terminate all life insurance benefits with respect to any employee whose employment was\nterminated "for cause."\n2. Admit that if "cause" existed for the termination by Falstaff of Ferd Gutting\'s employment,\nFalstaff had the right to terminate all life insurance benefits otherwise available to Ferd Gutting\nand his heirs and beneficiaries.\n3. Admit that Ferd Gutting was told by Falstaff at the time of the termination of his employment by\nFalstaff that he was being discharged from his employment "for cause."\n4. Admit that Ferd Gutting was discharged from his employment with Falstaff "for cause."\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c228\nFalstaff alleges that on February 27, 1982, Wilson again telephoned Sanders to advise him that\nthe depositions scheduled for the following week would have to be canceled. Sanders refused,\nin part due to a March 15 trial setting, and both parties appeared in court on March 1. Wilson\nsought a protective order asking the court to postpone the March 2 and 3 depositions because\nof his conflict of interest. The court indicated the depositions would not be delayed unless new\ncounsel for Gutting entered an appearance. Later the same day, Gutting\xe2\x80\x99s third attorney, David\nG. Dempsey, entered his appearance and the depositions were postponed one day. The court\ngranted Wilson leave to withdraw and continued the trial setting until June 7, 1982.\nOn April 9, 1982, Dempsey filed several motions on behalf of Gutting, including a motion for\nleave to file answers to the request for admissions out of time. On the same date, Falstaff filed a\nmotion for summary judgment on the theory that all fact issues in the case had been admitted\nby Gutting\xe2\x80\x99s failure to make a timely response to the request. On April 21, the court denied\nGutting\xe2\x80\x99s motion for leave to file the answers and delayed ruling on Falstaff\xe2\x80\x99s summary\njudgment motion. The case was still scheduled to proceed to trial on June 7, 1982, and Falstaff\nchose to proceed with 11 scheduled discovery depositions. On May 28, 1982, the district court\ngranted Falstaff\xe2\x80\x99s summary judgment motion. The court ruled there was no genuine issue of\nmaterial fact that the death benefits had been properly withheld under the terms of the\nagreement because the matter of Ferd Gutting\xe2\x80\x99s termination for cause had been deemed\nadmitted.\nDiscussion\n2. Conflicts of Interest of Gutting\xe2\x80\x99s Counsel.\nGutting contends that the late responses should have been allowed because Falstaff\xe2\x80\x99s motion to\ndisqualify McClellan and Wilson\xe2\x80\x99s withdrawal due to his conflict of interest rendered her without\neffective representation. The conflicts of interest experienced by McClellan and Wilson\ndisrupted their professional duties to take actions best suited to furthering Gutting\xe2\x80\x99s interests.\nOnce the conflicts became apparent, each attorney became unable to exercise his independent\nprofessional judgment. Gutting seems to be arguing that she should not be penalized because\nof her attorney\xe2\x80\x99s \xe2\x80\x9cinability\xe2\x80\x9d to take actions on her behalf. We agree that her counsels\xe2\x80\x99 conflicts of\ninterest should have been considered by the district court.\nThe rules of professional responsibility that prohibit an attorney from representing differing\ninterests are designed to protect the client from the attorney\xe2\x80\x99s potential abuses. It would appear\nto us that the purpose of such rules would be best furthered if an attorney discovering a conflict\nof interest took no action that may be inimical to the client\xe2\x80\x99s interests. The existence of a\nconflict, if not actually tolling the time period for answering discovery requests, should at least\nbe a factor when evaluating the reasons for an untimely response.\nIn the instant case, Falstaff first filed the motion to disqualify McClellan and then filed the\nrequest for admissions barely two weeks later. Falstaff could not expect Gutting to answer the\nrequest during the pendency of the motion to disqualify her attorney. Indeed, once McClellan\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c229\nagreed to withdraw, Falstaff agreed to wait for a response until a new attorney had entered an\nappearance and had an opportunity to review the file. Wilson entered an appearance on\nDecember 11, 1981; his appearance was formally accepted on December 17. Sanders, counsel\nfor Falstaff, concedes that he advised Wilson the extension of time for a response was good for\na reasonable period of time. In early January 1982 Sanders and Wilson again informally agreed\nthat the time for answering the requests could be extended a little while longer. Falstaff admits\nthat it would have accepted the answers through the end of January and perhaps during the first\nfew days of February. In the affidavit of Wilson, he swears that he discovered a possible conflict\nof interest on January 30, 1982, as he was preparing responses to the discovery requests. He\nnotified Sanders of the conflict of interest on February 6 and requested leave to withdraw on\nFebruary 8. At the time Wilson discovered the existence of the conflict, Falstaff concedes that\nanswers to the request still would have been accepted. It was sometime after January 30 that\nFalstaff began to consider the matters in the request admitted.\nFalstaff contends that regardless of Wilson\xe2\x80\x99s conflict of interest he could have responded to the\nrequest for admissions. Wilson\xe2\x80\x99s conflict related only to certain upcoming depositions and did\nnot affect his ability to answer the request. We disagree. As we read the conflict-of-interest\n1`rules, any actions taken by Wilson may have appeared to be inimical to Gutting\'s interests.\nWilson could not have responded to the request as long as he was hindered by a conflict of\ninterest in any aspect of his representation.46\nWe do not mean to imply disapproval of the district court\'s use of discovery sanctions in\nappropriate cases. An attorney\xe2\x80\x99s conflict of interest and his or her resulting inability to act must\nbe distinguished from the situation in which the attorney\xe2\x80\x99s failure to act was inexcusable. In Mrs.\nGutting\xe2\x80\x99s case it would be inequitable to deem the requests admitted and penalize her because\nof her attorney\xe2\x80\x99s compliance with the rules of professional responsibility.\nWe reverse the judgment of the district court and remand for further proceedings with directions\nthat the district court set a reasonable time period in which to allow Gutting to file answers to the\nrequest for admissions.\nQuestions:\n1. What is the purpose of the conflict of interest rules? Who are they intended to protect?\nWho do they actually protect?\n2. Should Gutting\xe2\x80\x99s attorneys have been disqualified? What if she consented to the\nconflict?\nFurther Listening:\n46\n\nWe do not know why it took Wilson one week to inform Sanders of the conflict and another three weeks\nto withdraw formally from the case and have Mr. Dempsey enter his appearance. Falstaff complains of\nthis time lag because it was required to cancel several depositions. Given the pending deposition\nschedule and trial setting, an expeditious substitution of counsel would have been appropriate.\nNevertheless, our analysis of the conflict-of-interest problem remains the same.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c230\n\n\xe2\x97\x8f\n\nJill I. Gross, Professional Responsibility: Client Conflicts of Interest, Law to Fact: The\nLaw School Podcast (March 19, 2019).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c231\n4.2: Resolving Conflicts of Interest\nI saw the future in a dream last night. Somebody\xe2\x80\x99s gonna get hurt, somebody\xe2\x80\x99s gonna get hurt. I\nhope it\xe2\x80\x99s not me, but I suspect it\xe2\x80\x99s going to have to be.47\nWhile conflicts of interest implicate the duty of loyalty, they do not necessarily preclude\nrepresentation or require withdrawal from representation. Some conflicts of interest cannot be\nresolved. For example, an attorney cannot represent both the plaintiff and the defendant in an\naction, and typically cannot represent any parties with actual or potential claims against each\nother. But many conflicts of interest can be resolved, if the attorney can represent the client\nwithout breaching the duty of loyalty, and the client provides informed consent to representation\ndespite the conflict.\nWaiver of Conflicts of Interest\nIn order to resolve a conflict of interest problem, attorneys should apply the four-step process\noutlined in Model Rule 1.7, comment [2]:\n1. clearly identify the client or clients;\n2. determine whether a conflict of interest exists;\n3. decide whether the representation may be undertaken despite the existence of a conflict,\ni.e., whether the conflict is consentable; and\n4. if so, consult with the clients affected and obtain their informed consent, confirmed in\nwriting.\nThis process provides a framework for identifying, evaluating, and resolving conflicts of interest.\nEssentially, it requires an attorney to ask: 1) whether an attorney-client relationship exists; 2)\nwhether the attorney\xe2\x80\x99s legal duties to a client conflict with the interests of the attorney, another\ncurrent or former client, or a third-party to whom the lawyer owes a legal duty; 3) whether\nrepresentation is legally permissible and practically possible under the circumstances; and 4)\nwhether the client is adequately informed of the nature and potential consequences of the\nconflict, and has consented to representation in writing, despite the conflict. However, each of\nthose steps requires an exercise of judgment on the part of the attorney.\nIdentifying Clients\nA \xe2\x80\x9cclient\xe2\x80\x9d is any party with whom an attorney has an attorney-client relationship of any kind. The\nconflict of interest rules apply to both clients and quasi-clients. As a consequence, a party may\nbe a client for the purpose of the conflict of interest rules even if the attorney did not intend to\nform an attorney-client relationship. For example, a party that disclosed confidential information\nto an attorney in the course of seeking representation may be a client for the purpose of the\nconflict of interest rules, even if the party never hired the attorney. The agents or employees of a\n47\n\nThe Mountain Goats, Black Pear Tree (2008).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c232\nclient organization may be clients, if they reasonably believe the attorney has agreed to\nrepresent them personally or have provided confidential information pertaining to their own\ncircumstances. And a subsidiary of a client organization may also be a client, if the attorney\neffectively represents the subsidiary as well as the parent.\nIdentifying Conflicts of Interest\nA \xe2\x80\x9cconflict of interest\xe2\x80\x9d exists if an attorney\xe2\x80\x99s fiduciary duties to a client conflict with the interests\nof the attorney, another current or former client, or a third-party to whom the attorney owes a\nlegal duty. In other words, if the interests of the attorney, another current or former client, or\nthird-party could provide an incentive for the attorney not to observe those legal duties to the\nclient, then a conflict of interest exists. If the attorney could benefit from putting another interest\nahead of the client\xe2\x80\x99s interests, providing less than candid and impartial advice, or using\nconfidential information provided by the client, then a conflict of interest exists, whether or not\nthe attorney ever has or would violate the fiduciary duties of loyalty, impartiality, and\nconfidentiality.\nNotably, a conflict of interest does not require actual harm to the client, only potential harm.\nThere is no such thing as a \xe2\x80\x9cpotential conflict of interest.\xe2\x80\x9d A conflict of interest exists as soon as\nthe potential for harm is created, whether or not the harm ever materializes. The risk of harm to\nthe client\xe2\x80\x99s interests creates the conflict of interest, so the question is not whether a conflict\nexists, but how serious a conflict it presents. In some cases, the risk of harm may be too small\nto create a meaningful conflict, or an attorney\xe2\x80\x99s legal duties may themselves prevent the conflict\nfrom arising. But the conflict still exists, it simply is not a material conflict that requires an\nattorney to decline or withdraw from representation.\nThe paradigmatic conflict of interest exists when an attorney represents directly adverse parties,\nor one client litigating a claim against another. Notably, a conflict of interest exists whenever\nclients are directly adverse in any action, even if the attorney represents neither client in that\naction. Of course, co-defendants and co-plaintiffs may be directly adverse, because crossclaims and third-party claims create direct adversity. And potential claims may also create direct\nadversity, even if they are never filed. Accordingly, attorneys should be wary whenever they\nrepresent clients on the opposite sides of any transaction. Any potential adversity may create a\nconflict of interest.\nOf course, a conflict of interest may exist without direct adversity. If an attorney represents two\nclients with opposing interests, it may \xe2\x80\x9cmaterially limit\xe2\x80\x9d the attorney\xe2\x80\x99s ability to represent both\nclients, because it may create an incentive for the attorney to compromise those interests. If\ndual representation could affect the attorney\xe2\x80\x99s decisions, then a conflict of interest exists.\nConflicts of interest can arise unexpectedly, as a client\xe2\x80\x99s interests may change over time.\nAccordingly, a conflicts analysis can never be a \xe2\x80\x9cone and done\xe2\x80\x9d practice. Attorneys must always\nbe vigilant to identify and resolve conflicts of interest whenever they arise.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c233\nHowever, a conflict of interest may or may not be material. A conflict of interest is material if it\ncreates a substantial risk of providing an incentive for an attorney to violate a fiduciary duty to a\nclient. But by extension, a conflict of interest is no material if it does not create such a risk.\nAttorneys must obtain the informed consent of their client in order to resolve a material conflict\nof interest. But attorneys need not obtain informed consent in order to resolve an immaterial\nconflict of interest, because no actual conflict exists. Of course, it can be difficult to determine\nwhether a conflict is material, and immaterial conflicts have an unfortunate tendency to become\nmaterial.\nWaivable Conflicts of Interest\nIf a material conflict of interest exists, then the attorney must determine whether it is waivable.\nSome conflicts are waivable, but others are not. Specifically, a conflict is waivable only if it does\nnot make representation prohibited or impossible under the circumstances. For example, some\nattorneys, typically former government employees, are prohibited by law from representing\ncertain clients, so that is a conflict of interest that cannot be waived. Likewise, courts have\nuniformly held that attorneys cannot represent parties to an action with claims against each\nother, so that is also a conflict of interest that cannot be waived. However, many courts have\nheld that attorneys can represent directly adverse clients, so long as the attorney does not\nrepresent both clients in the same matter, and both clients provide informed consent, so that is\na conflict of interest that may be waived.\nInformed Consent\nIf a waivable conflict of interest exists, then the attorney must obtain informed consent to the\nconflict from the client or clients. For example, if an attorney\xe2\x80\x99s interests conflict with a client\xe2\x80\x99s\ninterests, then the attorney must obtain informed consent from the client. If a client\xe2\x80\x99s interests\nconflict with another client\xe2\x80\x99s interests, then the attorney must obtain informed consent from both\nclients. And if a client\xe2\x80\x99s interests conflict with a third party\xe2\x80\x99s interests, then the attorney must\nobtain informed consent from the client.\nSometimes, obtaining informed consent is easy. For example, a formal conflict of interest may\nnot create a real conflict of interest, and the client may readily consent. Indeed, some clients\nmay even see some formal conflicts of interest as advantages, rather than liabilities. One\nperson\xe2\x80\x99s \xe2\x80\x9cconflict of interest\xe2\x80\x9d may be another person\xe2\x80\x99s \xe2\x80\x9cinvestment in the outcome.\xe2\x80\x9d\nBut other times, obtaining informed consent may be difficult or impossible. A former client may\nwell resent their former attorney representing an adversary and withhold consent. And a quasiclient may be even more likely to harbor misgivings. In those circumstances, even a relatively\ntrivial conflict of interest may become an insuperable barrier to representation.\nRule 1.7: Conflict of Interest: Current Clients\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c234\na. Except as provided in paragraph (b), a lawyer shall not represent a client if the\nrepresentation involves a concurrent conflict of interest. A concurrent conflict of interest\nexists if:\n1. the representation of one client will be directly adverse to another client; or\n2. there is a significant risk that the representation of one or more clients will be\nmaterially limited by the lawyer\'s responsibilities to another client, a former client\nor a third person or by a personal interest of the lawyer.\nb. Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a\nlawyer may represent a client if:\n1. the lawyer reasonably believes that the lawyer will be able to provide competent\nand diligent representation to each affected client;\n2. the representation is not prohibited by law;\n3. the representation does not involve the assertion of a claim by one client against\nanother client represented by the lawyer in the same litigation or other\nproceeding before a tribunal; and\n4. each affected client gives informed consent, confirmed in writing.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 122: Client Consent to a Conflict of\nInterest\n1. A lawyer may represent a client notwithstanding a conflict of interest prohibited by \xc2\xa7 121\nif each affected client or former client gives informed consent to the lawyer\'s\nrepresentation. Informed consent requires that the client or former client have\nreasonably adequate information about the material risks of such representation to that\nclient or former client.\n2. Notwithstanding the informed consent of each affected client or former client, a lawyer\nmay not represent a client if:\na. the representation is prohibited by law;\nb. one client will assert a claim against the other in the same litigation; or\nc. in the circumstances, it is not reasonably likely that the lawyer will be able to\nprovide adequate representation to one or more of the clients.\nObtaining Informed Consent to a Conflict of Interest\nAn attorney may represent a client despite a conflict of interest only if the attorney obtains\ninformed consent to the conflict from the client, ideally in writing. In order to obtain informed\nconsent, the attorney must provide the client with adequate disclosure of the conflict.\nSpecifically, the attorney must disclose any and all competing interests that could create a\nconflict. And the attorney must explain the nature of every conflict and how they could affect the\nattorney\xe2\x80\x99s representation of the client, including the attorney\xe2\x80\x99s fiduciary duties of loyalty,\nimpartiality, and confidentiality. In addition, attorneys should, and often must, obtain informed\nconsent to any conflicts before commencing representation, and typically cannot obtain valid\ninformed consent when terminating representation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c235\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 122(c)(i): The Requirement of\nInformed Consent\xe2\x80\x94Adequate Information\nInformed consent requires that each affected client be aware of the material respects in\nwhich the representation could have adverse effects on the interests of that client. The\ninformation required depends on the nature of the conflict and the nature of the risks of\nthe conflicted representation. The client must be aware of information reasonably\nadequate to make an informed decision.\nInformation relevant to particular kinds of conflicts is considered in several of the\nSections hereafter. In a multiple-client situation, the information normally should address\nthe interests of the lawyer and other client giving rise to the conflict; contingent, optional,\nand tactical considerations and alternative courses of action that would be foreclosed or\nmade less readily available by the conflict; the effect of the representation or the process\nof obtaining other clients\' informed consent upon confidential information of the client;\nany material reservations that a disinterested lawyer might reasonably harbor about the\narrangement if such a lawyer were representing only the client being advised; and the\nconsequences and effects of a future withdrawal of consent by any client, including, if\nrelevant, the fact that the lawyer would withdraw from representing all clients. Where the\nconflict arises solely because a proposed representation will be adverse to an existing\nclient in an unrelated matter, knowledge of the general nature and scope of the work\nbeing performed for each client normally suffices to enable the clients to decide whether\nor not to consent.\nWhen the consent relates to a former-client conflict, it is necessary that the former client\nbe aware that the consent will allow the former lawyer to proceed adversely to the former\nclient. Beyond that, the former client must have adequate information about the\nimplications (if not readily apparent) of the adverse representation, the fact that the\nlawyer possesses the former client\'s confidential information, the measures that the\nformer lawyer might undertake to protect against unwarranted disclosures, and the right\nof the former client to refuse consent. The former client will often be independently\nrepresented by counsel. If so, communication with the former client ordinarily must be\nthrough successor counsel.\nThe lawyer is responsible for assuring that each client has the necessary information. A\nlawyer who does not personally inform the client assumes the risk that the client is\ninadequately informed and that the consent is invalid. A lawyer\'s failure to inform the\nclients might also bear on the motives and good faith of the lawyer. On the other hand,\nclients differ as to their sophistication and experience, and situations differ in terms of\ntheir complexity and the subtlety of the conflicts presented. The requirements of this\nSection are satisfied if the client already knows the necessary information or learns it\nfrom other sources. A client independently represented\xe2\x80\x94for example by inside legal\ncounsel or by other outside counsel\xe2\x80\x94will need less information about the consequences\nof a conflict but nevertheless may have need of information adequate to reveal its scope\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c236\nand severity. When several lawyers represent the same client, responsibility to make\ndisclosure and obtain informed consent may be delegated to one or more of the lawyers\nwho appears reasonably capable of providing adequate information.\nDisclosing information about one client or prospective client to another is precluded if\ninformation necessary to be conveyed is confidential. The affected clients may consent\nto disclosure, but it also might be possible for the lawyer to explain the nature of\nundisclosed information in a manner that nonetheless provides an adequate basis for\ninformed consent. If means of adequate disclosure are unavailable, consent to the\nconflict may not be obtained.\nThe requirement of consent generally requires an affirmative response by each client.\nAmbiguities in a client\'s purported expression of consent should be construed against\nthe lawyer seeking the protection of the consent. In general, a lawyer may not assume\nconsent from a client\'s silent acquiescence. However, consent may be inferred from\nactive participation in a representation by a client who has reasonably adequate\ninformation about the material risks of the representation after a lawyer\'s request for\nconsent. Even in the absence of consent, a tribunal applying remedies such as\ndisqualification will apply concepts of estoppel and waiver when an objecting party has\neither induced reasonable reliance on the absence of objection or delayed an\nunreasonable period of time in making objection.\nEffective client consent to one conflict is not necessarily effective with respect to other\nconflicts or other matters. A client\'s informed consent to simultaneous representation of\nanother client in the same matter despite a conflict of interest does not constitute\nconsent to the lawyer\'s later representation of the other client in a manner that would\nviolate the former-client conflict rule.\nNuStar Farms, LLC v. Zylstra, 880 N.W.2d 478 (Iowa 2016)\nSummary: Between 2002 and 2014, attorney Larry Stoller represented Robert and\nMarcia Zylstra in several different matters. In 2007, Stoller and the Zylstras discussed a\nmanure easement agreement with NuStar Farms. In 2014, Stoller began representing\nNuStar, which had a dispute with the Zylstras over a deed. Soon afterward, Stoller\nended his representation of the Zylstras and filed an action against them for NuStar. The\nZylstras retained attorney John Sandy, who filed a motion to disqualify Stoller. The trial\ncourt denied the motion, but the Iowa Supreme Court reversed, holding that Stoller had\na conflict of interest and the Zylstras did not consent.\nZAGER, Justice.\nIn this interlocutory appeal, we are asked to decide whether an attorney should be disqualified\nfrom representing one party in a lawsuit, either because his representation of the two parties\nwas concurrent or because he had previously represented the opposing party in a similar\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c237\nmatter. The district court concluded that the attorney need not be disqualified. For the reasons\nstated below, we conclude that the district court did not abuse its discretion in concluding that\nthe prior attorney-client relationship failed the "substantial relationship" test. However, we\nconclude that the attorney did have a concurrent conflict of interest. Therefore, we find the\ndistrict court abused its discretion in not disqualifying the attorney.\nBackground Facts and Proceedings.\nAttorney Larry Stoller began representing Robert and Marcia Zylstra in 2002. Stoller\nrepresented them in a number of legal matters between 2002 and 2014, including financial\nissues, business acquisitions, and real estate transactions. Although the Zylstras were\nrepresented by Stoller on a number of occasions, they also used the services of other attorneys\nthroughout this time period. At issue for the purposes of this case are a meeting in January\n2007 and a small claims case ending in 2014.\nOn January 24, 2007, Robert met with Stoller to discuss estate planning and manure easement\nagreements. At the time of the meeting, the Zylstras were shareholders in Sibley Dairy, LLP.\nDuring this meeting, Robert showed Stoller a multipage document containing multiple manure\neasement agreements that the Zylstras intended to enter into with NuStar Farms, LLC. The\nparties disagree as to the extent of Stoller\'s involvement during this meeting regarding the\nmanure easement agreements. Stoller asserts that he only briefly glanced at the easement\nagreements and then advised Robert that he should seek the advice of another attorney.\nAlthough Stoller acknowledges he made notations on the first page of the document, he argues\nthat the notations do not indicate he read the entirety of the multipage manure easement\nagreements. Robert asserts that he asked Stoller to review the manure easement agreements\nand provide advice. Robert further alleges that Stoller examined the agreements during the\nmeeting and advised him to go ahead and complete and sign them.\nThe record reflects that Stoller made notations on the documents. However, Stoller claims the\nnotations were made at Robert\'s request to help Robert remember what to discuss with one of\nthe attorneys that Stoller suggested Robert contact. Both parties agree that Stoller suggested\nRobert find an attorney with more experience in the area of manure easements. Stoller sent a\nfollow-up email to Robert with two attorney references who he thought could assist the Zylstras\nwith the easements. The email also confirmed that Robert asked Stoller to look at the\neasements and that Stoller "briefly looked at them." Further, Stoller wrote, "The changes you\nwere talking about should be run by the other attorney and I suggest that if approved they be\nincluded in the easements. I would also think that some permit would be necessary." The record\nalso reflects that during this conference they discussed estate planning matters. This is\nconfirmed in the follow-up email and Stoller\'s office notes of the conference. Stoller billed the\nZylstras for 1.20 hours and described the meeting as, "Conference with Robert on manure\neasement; review easements and agreement." There is nothing in the record to indicate that\nStoller represented the Zylstras when they executed the manure easement agreements with\nNuStar or that he had any further involvement in the sale of Sibley Dairy.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c238\nStoller continued to represent the Zylstras in a number of other legal matters between 2007 and\n2014. In December 2013, Stoller began representing the Zylstras in a small claims matter. The\ncase was submitted to the small claims court on February 10, 2014, but the court did not issue\nits ruling until May 30. Stoller began representing NuStar in early May in an action regarding\nloan covenants. Also in early May, Stoller began contacting the Zylstras on behalf of NuStar. At\nleast part of these contacts involved the Zylstras\' failure to provide NuStar with a deed to\nproperty involving ingress. Stoller acknowledges that he contacted Robert about the Zylstras\xe2\x80\x99\nneed to sign the deed. On May 13, Stoller sent the Zylstras an email that stated it was the third\ntime he had contacted them about the deed to ingress property sold by the Zylstras to NuStar.\nStoller wrote in the email,\nI must now put you on formal notice that if the signed deed is not received by my office\nby the close of business on Wednesday, May 14, 2014, that I will need to pursue the\nappropriate remedies for specific performance and damages on behalf of Nustar.\nStoller also wrote in his email, "I have tried to remain neutral in those matters and advised both\nparties that I could represent neither."\nIn this same email, Stoller informed the Zylstras that he would no longer be representing them in\nany future matters. Robert acknowledges that he understood the May 13 email as a severance\nof the attorney-client relationship. Stoller emailed the Zylstras again on May 14, expressing\ndisappointment that the Zylstras were not going to sign the deed. Stoller also reminded Robert\nof his prior financial situation and how Stoller had helped him in the past.\nBy May 15, the Zylstras had retained John Sandy to represent them in their dealings with\nNuStar. In Sandy\'s correspondence to Stoller that same day, he alerted Stoller that the Zylstras\nfound his representation of NuStar to be a conflict of interest based on his prior legal\nrepresentation and counsel provided to the Zylstras. Sandy specifically requested that Stoller\ncease further representation of NuStar when those interests conflicted with the Zylstras.\nOn June 5, Stoller sent the Zylstras a letter notifying them of the judge\'s ruling in the small\nclaims case and informing them that he believed the decision was appealable. Stoller further\nnotified the Zylstras of their rights to appeal and the deadlines associated with such an appeal.\nStoller wrote he would be willing to file an appeal on their behalf and included information about\nhis retainer and billing rate. Stoller also advised the Zylstras that if they chose to have another\nattorney represent them on the appeal he would release their file to that attorney.\nOn July 9, Stoller filed a multicount petition on behalf of NuStar against the Zylstras. The petition\nalleged the Zylstras agreed to sell NuStar a parcel in farmland in 2008, but they failed to tender\nthe requisite deed. One count of the petition also alleged the Zylstras did not abide by certain\nterms contained in the manure easement agreements. In response, the Zylstras filed a\npreanswer motion to dismiss based on statute of limitations grounds. They also filed a motion\nseeking to disqualify Stoller as the attorney for NuStar based on a conflict of interest.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c239\nOn August 8, the district court held a hearing, and the parties argued both the motion to dismiss\nand the motion to disqualify Stoller. On October 14, the district court denied both motions. On\nNovember 10, the Zylstras filed an application for interlocutory appeal seeking review of the\ndistrict court\'s denial of their motion to disqualify Stoller. We granted the application for\ninterlocutory appeal on December 5.\nAnalysis\nThe right of a party to choose his or her own attorney is important, but it must be balanced\nagainst the need to maintain "the highest ethical standards" that will preserve the public\'s trust\nin the bar and in the integrity of the court system. A court must necessarily balance these two\ncompeting interests when determining whether to disqualify an attorney. In doing so, the court\n\xe2\x80\x9cmust also be vigilant to thwart any misuse of a motion to disqualify for strategic reasons.\xe2\x80\x9d When\nwe evaluate motions to disqualify an attorney, we use our Iowa Rules of Professional Conduct\nas the starting point.\nRule 32:1.7 covers concurrent conflicts of interest and states in pertinent part,\n(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the\nrepresentation involves a concurrent conflict of interest. A concurrent conflict of interest\nexists if:\n(1) the representation of one client will be directly adverse to another client; or\n(2) there is significant risk that the representation of one or more clients will be materially\nlimited by the lawyer\'s responsibilities to another client, a former client, or a third person\nby a personal interest of the lawyer.\nThe rule goes on to state that a lawyer may continue with the representation of a client if certain\nstipulations are met, one of which is that each client gives informed, written consent.\nThe Zylstras allege that Stoller\'s representation of NuStar was a concurrent conflict of interest\nwith his representation of them. They argue that he began the action on behalf of NuStar in\nearly May, while knowing that the representation would be adverse to the Zylstras because it\ninvolved a deed between the two parties. Further, Stoller began contacting the Zylstras on\nbehalf of NuStar before the May 13 email officially terminating his attorney-client relationship\nwith the Zylstras on the small claims case. Stoller responds that there was no concurrent conflict\nof interest because he did not file the action on behalf of NuStar against the Zylstras until after\nthe May 13 email terminating the attorney-client relationship. In the alternative, the Zylstras\nargue that Stoller\'s June 5 email indicates that he was continuing to represent them in the small\nclaims matter until the court issued its ruling. Even thereafter, Stoller advised the Zylstras there\nwas a basis to appeal the judgment, the time for perfecting such an appeal, and his willingness\nto continue representing them in the appeal. Stoller contends that it was his duty to inform the\nZylstras, as his former clients, of the outcome of the small claims hearing and the time limits for\nappeal. He further contends that, although he said he would be willing to represent the Zylstras\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c240\non the appeal, he was also recommending they find alternate representation and thus was only\ninforming them of their options if they chose to go forward with an appeal.\nBefore we turn to an analysis of whether a concurrent conflict of interest exists, we must\naddress two questions: when the attorney-client relationship between the Zylstras and Stoller\nended, and when the attorney-client relationship between NuStar and Stoller began. The first\nquestion we may dispose of easily. Generally, a lawyer\'s representation of a client extends until\nthe time period for motions or appeals expires in a civil action. However, both the attorney and\nthe client may terminate the relationship prior to this natural ending. Both Stoller and the\nZylstras agree that the attorney-client relationship was terminated with the May 13 email.\nFurther, while Stoller did offer to represent the Zylstras on the appeal, the Zylstras did not\nactually appeal the small claims case and did not solicit Stoller\'s services on any other legal\nmatters. We find that the attorney-client relationship between Stoller and the Zylstras ended with\nthe May 13 email.\nThe next question we must address is when the attorney-client relationship between Stoller and\nNuStar began. The attorney-client relationship is governed by general contract principles. It may\nbe either express, such as when representation is based on a written agreement, or implied by\nthe conduct of the parties. There are three elements that must be met to find that an attorneyclient relationship has been established:\n(1) a person sought advice or assistance from an attorney, (2) the advice or assistance\nsought pertained to matters within the attorney\'s professional competence, and (3) the\nattorney expressly or impliedly agreed to give or actually gave the desired advice or\nassistance.\nThe relationship between Stoller and NuStar clearly meets this test. NuStar sought advice from\nStoller at least beginning in early May about the action that required a deed from the Zylstras.\nThe advice they sought from Stoller pertained to matters within his professional ability. Stoller\nhas practiced law for a number of years and across a number of areas. Last, Stoller both agreed\nto give and actually gave NuStar advice and assistance. On NuStar\'s behalf, Stoller began\ncontacting the Zylstras regarding the deed that NuStar was demanding. We find that the\nattorney-client relationship between NuStar and Stoller began, at the latest, in early May. This is\nalso confirmed by Stoller\'s correspondence with the Zylstras on May 13 in which he asserts that\nit was the third time he had contacted them in regard to the deed. We now turn to a discussion\nof whether this attorney-client relationship involved a concurrent conflict of interest that violates\nrule 32:1.7.\nThere are two ways for a concurrent conflict of interest to exist under rule 32:1.7. The first is if\n\xe2\x80\x9cthe representation of one client will be directly adverse to another client.\xe2\x80\x9d The second is if\n\xe2\x80\x9cthere is a significant risk that the representation will be materially limited by the lawyer\xe2\x80\x99s\nresponsibilities to another client, a former client, or a third person.\xe2\x80\x9d We may find a concurrent\nconflict of interest under either situation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c241\nWe have acknowledged that rule 32:1.7(a) \xe2\x80\x9capplies where directly adverse representation will\ntake place, as when one current client is about to file suit against another current client.\xe2\x80\x9d The\ncomments to the rule expand on what a \xe2\x80\x9cdirectly adverse\xe2\x80\x9d action may be:\nLoyalty to a current client prohibits undertaking representation directly adverse to that\nclient without that client\'s informed consent. Thus, absent consent, a lawyer may not act\nas an advocate in one matter against a person the lawyer represents in some other\nmatter, even when the matters are wholly unrelated.\nStoller acknowledged in a letter to the Iowa Supreme Court Attorney Disciplinary Board that he\nbegan the representation of NuStar in early May and that the Zylstras were aware of his\nrepresentation of NuStar. It is unclear from the record at what point Stoller realized the action\nwould include the deed that NuStar wanted the Zylstras to sign. However, by the time Stoller\nsent the May 13 email, he was already contemplating taking action against the Zylstras on\nbehalf of NuStar. The email stated,\nI must now put you on formal notice that if the signed deed is not received by my office\nby the close of business on Wednesday, May 14, 2014, that I will need to pursue the\nappropriate remedies for specific performance and damages on behalf of Nustar.\nIn this email, Stoller clearly demonstrates the intent to pursue a future, adverse action against\nthe Zylstras on behalf of NuStar. Although Stoller terminated the attorney-client relationship with\nthe Zylstras in the same email, the intent to pursue legal action unless the Zylstras complied\nwith NuStar\'s request to sign the deed arose before the email was sent \xe2\x80\x94 which is precisely\nwhy the demand or \xe2\x80\x9cformal notice\xe2\x80\x9d language is included. We find that Stoller\'s representation of\nNuStar was a directly adverse concurrent conflict of interest. Because Stoller did not properly\nobtain consent from the Zylstras to represent NuStar, his actions fall squarely within the\nguidance of the comments that \xe2\x80\x9cabsent consent, a lawyer may not act as an advocate in one\nmatter against a person the lawyer represents in some other matter, even when the matters are\nwholly unrelated.\xe2\x80\x9d Thus, we find Stoller should be disqualified from representing NuStar in the\naction against the Zylstras. Because the district court applied the law in error, we find that it\nabused its discretion in concluding that Stoller should not be disqualified.\nRule 32:1.9(a) \xe2\x80\x94 Duties to Former Clients\nStoller argues that, even though there was a concurrent conflict of interest in the past, the\nconflict no longer exists because he severed the attorney-client relationship, and therefore he\ncan continue to represent NuStar in the current action against the Zylstras. Rule 32:1.9(a)\nconcerns a lawyer\'s duties to former clients. In pertinent part, it provides,\nA lawyer who has formerly represented a client in a matter shall not thereafter represent\nanother person in the same or a substantially related matter in which that person\'s\ninterests are materially adverse to the interests of the former client unless the former\nclient gives informed consent, confirmed in writing.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c242\n\nThe comments expand on what makes a matter \xe2\x80\x9csubstantially related\xe2\x80\x9d for purposes of the rule.\nA matter is substantially related if it involves the same transaction or legal dispute. If there is \xe2\x80\x9ca\nsubstantial risk that confidential factual information as would normally have been obtained in the\nprior representation would materially advance the client\'s position in the subsequent matter,\xe2\x80\x9d\nthen the matter is substantially related.\nWe consider three factors when we determine whether a substantial relationship exists:\n(1) the nature and scope of the prior representation; (2) the nature of the present lawsuit;\nand (3) whether the client might have disclosed a confidence to his or her attorney in the\nprior representation which could be relevant to the present action.\nUnder the first factor, we must consider the scope \xe2\x80\x94 if any \xe2\x80\x94 of Stoller\'s representation of the\nZylstras in regard to the manure easement agreements. There is no question that Stoller and\nRobert met to discuss the agreements and that Stoller was aware the Zylstras intended to enter\ninto the agreements with NuStar. During the meeting, Robert showed Stoller the easement\nagreements. Stoller acknowledges that he looked at the first page and made some notations,\nthough he contends the notations were made at Robert\'s request so Robert would know what\nhe needed to discuss with another attorney. Stoller further claims that he did not read the\nentirety of the agreements. During the meeting, Stoller advised Robert to find another attorney\nto help him with the agreements because it was not an area of the law Stoller was familiar with.\nHe gave Robert the names of two attorneys to contact.\nStoller sent an email to Robert following the meeting that summarized their discussion about the\neasement agreements. The email stated that Robert asked Stoller to look at the easements and\nthat he \xe2\x80\x9cbriefly looked at them.\xe2\x80\x9d Stoller also wrote, \xe2\x80\x9cThe changes you were talking about should\nbe run by the other attorney and I suggest that if approved they be included in the easements. I\nwould also think that some permit would be necessary.\xe2\x80\x9d This reflects at least some level of\nadvice given to Robert by Stoller. However, this is in stark contrast to our previous cases where\nwe have found an attorney was extensively involved in prior representation.\nIn Doe, we found an attorney was highly involved in a client\'s prior representation when he had\nmet with the clients, had telephone conversations with the clients, appeared as their attorney,\nand signed pleadings on their behalf. In Marks, we found that the attorney violated rule 32:1.9(a)\nwhen he represented a client in a foreclosure action and later represented his own wife in the\nsale of property to that same former client. We found that the attorney\'s representation of the\nclient and his wife were substantially related because he had obtained information about the\nclient\'s property during the foreclosure action. In comparison to our prior cases, we cannot say\nthat the scope of Stoller\'s representation of the Zylstras regarding the manure easement\nagreements was in any way significant.\nThe second factor we consider is the nature of the present lawsuit between the Zylstras and\nNuStar. In the original petition that Stoller filed on behalf of NuStar, he included six counts. All of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c243\nthe counts except one deal with a real estate contract between NuStar and the Zylstras. Stoller\ndid not participate in the real estate contract on behalf of the Zylstras. Count IV alleges a breach\nof the manure easement agreements between NuStar and the Zylstras. Although the majority of\nthe counts do not relate to the manure easement agreements that Stoller had knowledge of, at\nleast one part of the current lawsuit does relate to the prior scope of Stoller\'s representation.\nThe final factor we consider is \xe2\x80\x9cwhether the client might have disclosed a confidence to his or\nher attorney in the prior representation which could be relevant to the present action.\xe2\x80\x9d The\nmeeting between Robert and Stoller to discuss the manure easement agreements was brief.\nThe parties only superficially discussed the substance of the agreements and Stoller specifically\nsuggested that Robert seek other competent agricultural law counsel to review the agreements\nbefore signing them. The email from Stoller does note that the two discussed whether permits\nwere required or whether Robert should change anything in the agreements. However, nothing\nfrom this meeting indicates that Robert disclosed anything in confidence about the agreements\nto Stoller that would affect the current lawsuit between the Zylstras and NuStar.\nWe do not find that a substantial relationship exists sufficient to disqualify Stoller under rule\n32:1.9(a). We therefore find that the district court did not abuse its discretion in holding that\nStoller could not be disqualified under the substantial relationship test.\nConclusion\nWe find that the district court did not abuse its discretion in concluding that any prior relationship\nbetween Stoller and Zylstra in regard to the manure easement agreements failed the substantial\nrelationship test. However, we find that Stoller did have a concurrent conflict of interest.\nTherefore, we conclude that the district court abused its discretion in not disqualifying Stoller\nfrom representing NuStar in the action. On remand, the district court should enter an order\ndisqualifying Stoller from further representation of NuStar in this lawsuit.\nQuestions:\n1. Why did the court hold that a conflict of interest prevented Stoller from representing\nNuStar in this action? Do you think that a substantial conflict of interest existed?\n2. Why didn\xe2\x80\x99t the Zylstras want Stoller to represent NuStar in the action against them?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c244\n4.3: Breach of the Duty of Loyalty\nDon\'t look so surprised. You\'ve been telling me lies. True confessions.48\nYour depths made a pressure that punctured my works and all your fluids couldn\'t tolerate the\nforce of my thirst. I love the place where we shared our tiny grace, but just because it\xe2\x80\x99s real\ndon\'t mean it\xe2\x80\x99s gonna work.49\nAttorneys have a fiduciary duty of loyalty to their clients. And attorneys who breach that duty of\nloyalty may be liable for malpractice. Typically, attorneys breach their duty of loyalty by ignoring\nor concealing a conflict of interest. A conflict of interest reflects an incentive to breach the duty\nof loyalty. And attorneys who act on that incentive have probably committed malpractice.\nThe Scope of the Duty of Loyalty\nWhile attorneys owe their clients both a duty of care and a duty of loyalty, the duties are not the\nsame. The duty of care requires reasonable care under the circumstances, but the duty of\nloyalty is an absolute duty. In other words, attorneys must always be vigilant for conflicts of\ninterest. And if a conflict arises, attorneys must either resolve the conflict or withdraw from\nrepresentation.\nMoguls of Aspen, Inc. v. Faegre & Benson, 956 P. 2d 618 (Colo. App. 1997)\nSummary: While representing Moguls of Aspen in a dispute with its landlord, Faegre &\nBenson provided inaccurate legal advice, which caused Moguls of Aspen to lose its\nlease and go out of business. Moguls of Aspen sued Faegre & Benson for malpractice,\nbut the trial court refused to instruct the jury on its claim for breach of the duty of loyalty,\nfinding that the facts did not support the claim. The court of appeals affirmed, finding that\nMoguls of Aspen presented evidence of negligence, but did not present evidence of a\nconflict of interest.\nOpinion by Judge CRISWELL.\nPlaintiffs, Moguls of Aspen, Inc. (MOA) and Mogul Shop, Inc. (MSI), appeal from the judgment\nentered upon a jury verdict in favor of defendants, Faegre & Benson, a law firm, and Christian\nOnsager, one of its members. We affirm.\nPlaintiffs are two corporations wholly owned by Nancy Snell. MOA leased commercial space\nand subleased it to MSI, which operated a retail ski apparel shop on the premises.\n\n48\n49\n\nThe Undertones, True Confessions (1979).\nThe Blow, True Affection, Paper Television (2006).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c245\nPlaintiffs first contacted the defendant law firm as a result of a dispute between them and the\nlessor of the commercial space concerning the amount of rent owed. After receiving notice from\nthe lessor that they were in default on their lease, plaintiffs\xe2\x80\x99 real estate attorney contacted the\nlaw firm to discuss the possibility of filing a Chapter 11 bankruptcy petition.\nA meeting was held with two attorneys of the law firm on June 25, 1991. Plaintiffs brought both\nthe written lease and the lessor\'s notice of default to the meeting. At trial, their evidence sought\nto establish that an attorney-client relationship was established at this meeting. According to\nplaintiffs, while the plain language of the lease stated that the lessor could terminate the lease\nten days after serving the notice of default, defendants did not advise them of this fact, nor did\nthey disclose the legal effect of taking no immediate action to preserve the lease.\nPlaintiffs asserted that, after this initial meeting, defendants performed no further work on\nplaintiffs\xe2\x80\x99 behalf until August 7, 1991. At trial, plaintiff\xe2\x80\x99s experts testified that these acts and\nomissions by defendants constituted professional negligence, as well as breaches of their\nfiduciary duties to act with \xe2\x80\x9cdue diligence\xe2\x80\x9d and \xe2\x80\x9cin the client\'s best interest.\xe2\x80\x9d\nOn August 7, 1991, after the lessor had served a demand for payment or possession on them,\nplaintiffs again contacted one of the attorneys who had been present at the June 25, 1991,\nmeeting. This attorney told plaintiffs that he was too busy to handle the matter, and he referred it\nto defendant Onsager. Onsager informed plaintiffs that the lessor could not obtain possession of\nthe premises unless an additional three-day notice was served upon them. This advice was\nadmittedly inaccurate.\nOn August 22, 1991, the lessor terminated plaintiffs\xe2\x80\x99 lease. As a result, plaintiffs ceased doing\nbusiness.\nThe original complaint in this case was filed a few days before the statute of limitations expired.\nAt that time, because MSI, the owner of the business, was subject to a Chapter 7 bankruptcy\nproceeding and its trustee had elected not to pursue a legal malpractice claim against\ndefendants, MSI was not made a party to the action. Nancy Snell was an original plaintiff.\nHowever, before trial, the trial court dismissed all of Snell\'s individual claims, concluding that\nthere was no evidence to support a reasonable inference that Snell, the individual, as\ndistinguished from the two wholly-owned corporations, had an attorney-client relationship with\ndefendants.\nNevertheless, the court allowed the complaint to be amended to add MSI as a plaintiff. It also\nconcluded that, because the claims that Snell had attempted to state were substantially the\nsame as the claims now asserted by MSI, the latter claims would relate back to the date that\nSnell filed the initial complaint. Hence, it held that MSI\'s claim was not time-barred.\nDuring the course of the later trial, the court submitted the claim of professional malpractice to\nthe jury. It refused, however, to instruct upon any separate claim based upon an alleged\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c246\nviolation of fiduciary duty. The jury rejected the claim submitted to it, and the court entered\njudgment upon that verdict.\nMOA and MSI appeal from that judgment, asserting that the court erred in refusing to instruct\nthe jurors with respect to their claim that defendants had violated certain fiduciary duties that\ndefendants owed to them. We disagree.\nThe court here instructed the jurors upon the alleged professional malpractice of defendants\nconsistent with the standard instruction. In accordance with this instruction, the jurors were\nrequired to determine whether defendants acted in a reasonably prudent manner, as measured\nagainst the acts or omissions of a reasonably careful attorney under the same or similar\ncircumstances.\nPlaintiffs tendered an instruction which set forth the elements of a claim based upon the\nviolation of a fiduciary duty. In addition, they tendered an instruction describing the fiduciary\nduties that plaintiffs asserted defendants had violated. This instruction would have told the jurors\nthat defendants owed the following duties to plaintiffs (none of the terms of which were further\ndefined or described):\nA duty to their client to employ that degree of knowledge, skill and judgment ordinarily\npossessed by members of the legal profession in carrying out the services for their\nclient.\nA duty to their client to act with due diligence in the affairs of their client.\nA duty to their client to provide accurate information to their client regarding the status of\nlegal matters intrusted to them.\nA duty to their client of undivided loyalty and should exercise independent judgment on\nbehalf of their client.\nA duty to their client to the highest degree of fairness and good faith.\nA duty to their client of full disclosure.\nThe trial court, however, determined that the evidence would support no claim beyond one\nbased upon defendants\xe2\x80\x99 alleged negligence and lack of due diligence, the claim for which was\nadequately covered in the other elemental instruction. Hence, it refused to instruct the jurors as\nplaintiffs requested. We conclude that such refusal was proper.\nPlaintiffs assert that each of the duties described in their tendered instructions was violated\nbecause: (1) plaintiffs were not advised at the initial meeting as to the procedure pursuant to\nwhich the lease could be terminated or the effect of such termination upon the effectiveness of\nany later bankruptcy proceedings; (2) defendants failed adequately to investigate plaintiffs\xe2\x80\x99\ncircumstances and failed to formulate a plan of action on their behalves from the initial meeting\nuntil plaintiffs contacted defendants again in August; and (3) on this latter date, the attorney who\ninitially consulted with plaintiffs asserted that he was too busy with other matters to provide any\nfurther services and referred them to defendant Onsager.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c247\nAll of these allegations, while serious, do not implicate defendants actions except in a\nnegligence or malpractice context. There is no allegation or evidence that defendants\xe2\x80\x99 acts or\nomissions, if any, resulted from an improper motive, a conflict of interest, or any other\nconsideration beyond carelessness and lack of attention.\nUnder such circumstances, other courts have concluded that a claim for breach of a fiduciary\nduty is duplicative of a claim for professional malpractice and that only the latter claim should be\nthe subject of adjudication. As stated in Calhoun v. Rane:\nA fiduciary relationship exists as a matter of law between an attorney and his client.\nThus, in effect any alleged malpractice by an attorney also evidences a simultaneous\nbreach of trust; however, that does not mean every cause of action for professional\nnegligence also sets forth a separate and independent cause of action for breach of\nfiduciary duty. In the present case, we find that the client has not pleaded a cause of\naction for breach of fiduciary duty distinct from the alleged malpractice case still pending\nin the trial court. A duplicative count may be properly dismissed.\nNo Colorado appellate court has yet addressed this issue with respect to the alleged breach of a\nfiduciary duty resulting from a lawyer\'s malpractice. There have been several instances in which\na trial court has allowed both types of claims to be passed upon by a jury. But, the question\nwhether, under the particular factual circumstances, the claims were duplicative was not\naddressed. In Bailey v. Allstate Insurance Co., the issue presented was whether the damages\nawarded under each of the two claims were duplicative, not whether the claims themselves\nwere separate.\nNevertheless, previous Colorado decisions with respect to claims asserted against members of\nthe medical profession are consistent with the analysis adopted by other courts as to claims\nasserted against lawyers.\nFurther, each of the duties referred to in plaintiffs\xe2\x80\x99 tendered instructions, insofar as the evidence\nwould implicate any of them, is stated in absolute terms, i.e., duty \xe2\x80\x9cto provide accurate\ninformation.\xe2\x80\x9d Yet, where, as here, it is the attorney\xe2\x80\x99s lack of due diligence and negligence that is\nthe basis for the claim, the duty is not an absolute one. Rather, as the court properly instructed\nthe jurors, the duty is to act with that care and diligence with which a reasonably careful attorney\nwould act under the same or similar circumstances.\nWe agree with plaintiffs that some duties owed by attorneys may be absolute. The duty of\n\xe2\x80\x9cundivided loyalty\xe2\x80\x9d may be one. However, contrary to plaintiffs\xe2\x80\x99 assertions, here, the evidence\ndoes not implicate such a duty; the violations of duty alleged here were grounded upon the\nlawyers\xe2\x80\x99 alleged negligence and lack of due diligence.\nWe recognize that circumstances may exist in which a lawyer may be guilty both of malpractice\nand of other violations of his or her fiduciary obligations. If a claimed fiduciary violation is\nseparate and independent from any alleged negligence, separate claims may well be properly\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c248\nasserted. This, however, is not such a case. And, the trial court properly recognized that it was\nnot.\nQuestions:\n1. Why did Moguls of Aspen fail to state a claim for breach of the duty of loyalty? What\nadditional allegations would have stated a claim for breach of the duty of loyalty?\n2. How does the duty of care differ from the duty of loyalty? Is it possible to negligently\nbreach the duty of loyalty?\nBreach of the Duty of Loyalty\nDavid Welch Co. v. Erskine & Tulley, 203 Cal. App. 3d 884 (Cal. App. 1988)\nSummary: David Welch Company was a collection agency. In 1972, Erksine & Tulley\nand Michael Carroll began providing legal representation to Welch. Among other things,\nthey assisted Welch in collecting debts for employee-benefit trust funds from delinquent\nemployers. In 1980, E&T and Welch ended their attorney-client relationship. Soon\nafterward, E&T began submitting proposals to collect debts for Welch\xe2\x80\x99s clients, without\nWelch\xe2\x80\x99s consent. Welch filed an action for breach of fiduciary duty and the trial court\nfound for Welch. The appeals court affirmed, holding that E&T\xe2\x80\x99s duty of loyalty to Welch\nrequired it to obtain informed consent before submitting proposals to Welch\xe2\x80\x99s clients.\nCHANNELL, J.\nFollowing a court trial, defendants Erskine & Tulley (E&T) and Michael Carroll appeal from a\njudgment entered against them and in favor of David Welch Co. (Welch). The trial court held\nthat E&T, a law corporation, and Attorney Carroll had breached their fiduciary duty towards\nWelch, their former client, and had received a benefit of $350,000, which defendants were\ndeemed to hold in constructive trust for Welch. Defendants were ordered to disgorge that\nbenefit to Welch. Welch cross-appeals from that portion of the judgment providing that its\nrecovery shall be only from those defendants, and only in the amount of $350,000.\nThis controversy arises from the fact that after E&T and Welch terminated their attorney-client\nrelationship in December 1980, E&T gradually acquired the collection business activities\nformerly performed by Welch in behalf of several employee benefit trust funds. The basic issue\nin the trial court was whether, in doing so, the law firm or any of its attorneys breached a\nfiduciary duty towards their former client.\nI. FACTS\nWelch is a licensed collection agency which, over several years, developed a highly profitable\nspecialty in collecting delinquent employer contributions owed to 35 or more employee-benefit\ntrust funds. From 1972 to 1980, E&T acted as counsel for Welch, with Attorney Carroll doing\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c249\nmost of the work for them in the later years. Before undertaking the representation of Welch,\nneither E&T nor Carroll had experience in collection agency work for trust funds.\nThe evidence was in conflict as to how defendants acquired their knowledge for conducting this\ntype of collection activity. Defendants presented evidence indicating that, from a legal\nstandpoint, it was like any other collection work, and that no specialized knowledge or expertise\nwas required. Welch presented evidence that the E&T attorneys were specially trained by the\nowner, David Welch, on these matters; they were entrusted with complete access to information\nabout Welch\'s confidential and profitable business techniques; and they were introduced by\nWelch as its attorneys to the trustees of the various trust funds. All of the information so\nprovided was intended by Welch to be confidential.\nWhen collecting a debt, Welch had the trust fund assign legal title to it, with the trust fund\nretaining equitable title. If its own collection efforts proved unsuccessful, Welch had E&T file suit\nin Welch\'s name as assignee of the trust fund. Before turning a case over to its counsel, Welch\nwould carry out its own collection efforts, investigate the financial status of the delinquent\nemployer, and prepare a case file which included all of the background documents, suggestions\nfor handling the matter, and a draft complaint ready for filing in court.\nBecause collecting for trust funds was so profitable, David Welch organized his business in a\nmanner designed to preserve the confidentiality of its procedures. He separated the trust fund\nactivity from his other collection activities, used only his most trusted employees, physically\nlocated the activity on a separate floor of his office, and took other steps to minimize\ndissemination of information and to protect against someone within his firm from breaking away\nand starting a competitive business.\nIn late 1979, the collection agency was sold, and Welch was taken over by Philip W. Coyle. In\n1980, Welch stopped referring collection matters to E&T. The parties thereafter agreed to\nterminate their relationship, effective after December 31, 1980. At approximately the same time,\nnotices were sent by Coyle to Welch\'s trust fund clients indicating that Welch soon would be\nincreasing its fees for those clients for the first time since 1968.\nIn mid-1981, the Sheet Metal Workers Trust severed its relationship with Welch, and transferred\nits collection business to E&T. At the time, Welch viewed this as an isolated incident. During\n1982 and early 1983, several more trust funds did likewise. The evidence indicates that E&T did\nnot solicit these particular clients, but instead responded to inquiries from each trust fund\nrequesting a proposal. On the other hand, there was no evidence that E&T disclosed to Welch,\nits former client, that it was submitting these proposals, nor that E&T sought to secure Welch\'s\nconsent to take over these accounts. In each instance, Welch learned it had lost its account\nfrom someone other than E&T, usually in the form of a letter from the trust fund announcing as a\nfait accompli that their business was being transferred to E&T.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c250\nBy the time Welch filed its complaint against E&T in February 1983, the law firm had obtained\nthe collection accounts of at least 10 of Welch\'s former trust fund clients, with annual billings\napproximating $156,715.\nII. DISCUSSION\nA. Breach of Fiduciary Duty\nDefendants\' first set of contentions relates to whether substantial evidence supports the trial\ncourt\'s findings that they breached their fiduciary duty towards Welch. With respect to a cause\nof action alleging breach of a fiduciary duty, the existence of the duty is a question of law. \xe2\x80\x9cThe\nrelation between attorney and client is a fiduciary relation of the very highest character, and\nbinds the attorney to most conscientious fidelity \xe2\x80\x94 uberrima fides.\xe2\x80\x9d\nThere is no dispute that a fiduciary duty did exist in this case. The issue is whether defendants\nbreached that duty towards Welch, which is a question of fact. As in other claims of lack of\nevidence, the question is \xe2\x80\x9cwhether there is any substantial evidence contradicted or\nuncontradicted which will support the finding of fact.\xe2\x80\x9d\nDefendants\xe2\x80\x99 initial contention concerning this issue is that the trial court erred in finding a breach\nof fiduciary duty based on alleged violations of rules 4-101 and 5-101 of the Rules of\nProfessional Conduct. Before trial, defendants had successfully moved for summary judgment\nas to the first cause of action, which had alleged that a violation of the rules, as a matter of law,\nprovided a basis for civil liability. Nevertheless, these rules, together with statutes and general\nprinciples relating to other fiduciary relationships, all help define the duty component of the\nfiduciary duty which the attorney owes to his or her client.\nIn their argument, defendants cite rules 4-101 and 5-101 and then proceed to argue why their\nconduct neither fits within one of those rules nor otherwise constitutes a breach of a fiduciary\nduty. Defendants repeatedly suggest that the trial court concluded that their \xe2\x80\x9cmere acceptance\nof legal work from plaintiff\'s former clients\xe2\x80\x9d constituted such a breach. But more than that is\nrequired to establish a breach, and more than that was proven.\nFor example, the trial court found that defendants \xe2\x80\x9cbreached their fiduciary duty owed to plaintiff\nby accepting employment adverse to plaintiff without plaintiff\'s informed and written consent\nrelating to a matter in reference to which defendants had obtained confidential information by\nreason of or in the course of their employment by plaintiff.\xe2\x80\x9d\nThis finding was patterned after rule 4-101, a rule which on its face applies to former as well as\npresent clients. The primary purpose of that rule is to protect the confidential relationship which\nexists between attorney and client. It has been said that an attorney may not \xe2\x80\x9cat any time use\nagainst his former client knowledge or information acquired by virtue of the previous\nrelationship.\xe2\x80\x9d The actual use or misuse of confidential information is not determinative; it is the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c251\npossibility of the breach of confidence which controls. This duty to protect confidential\ninformation continues even after the formal relationship ends.\nAlthough neither party is able to cite a case involving a fact pattern analogous to this one, rule\n4-101 seems to apply literally to this case. The typical case falling within the rule arises in the\ncontext of legal representation of a client whose interests are adverse to another client or former\nclient of the attorney. But "adverse" also connotes being \xe2\x80\x9copposed to one\'s interest\xe2\x80\x9d or\n\xe2\x80\x9cunfavorable.\xe2\x80\x9d The acquisition by an attorney of business clientele of a former client operates to\nthe economic advantage of the attorney and unfavorably upon the former client. Concerning\naccess to confidential information, David Welch testified as to his company\'s efforts to maintain\nthe confidentiality of this portion of Welch\'s business, including its fees schedules, its methods\nof operation, and other information. Nevertheless, all of this information was shared with\ndefendants. Finally, defendants accepted the new employment without first notifying or in any\nway seeking the informed consent of Welch before submitting its proposals to the various trust\nfunds.\nThe trial court further found that \xe2\x80\x9cdefendants breached their fiduciary duty owed to plaintiff by\nknowingly acquiring a pecuniary interest adverse to plaintiff without first obtaining plaintiff\'s\ninformed written consent.\xe2\x80\x9d This finding highlights what we consider to be a critical factor in\nfinding a breach of duty in this case, namely, the fact that defendants, who previously had been\nprivy to Welch\xe2\x80\x99s confidential information, in no way informed Welch that they were preparing\nproposals designed to undercut Welch\'s business relationships.\nWe agree with defendants that the various trust funds were free to send their business to any\nentity they chose, as absent a contract to that effect, they were under no continuing duty to\ncontinue business with Welch. Similarly, any law firm, other than E&T, was free to make\nproposals at the request of those trust funds in an effort to obtain their business, as E&T did in\nthis case. But, due to the preexisting attorney-client relationship during which defendants were\nin a position to and did obtain confidential information about Welch\'s business, these\ndefendants had a higher duty, which was to refrain from acquiring any pecuniary interest\ninvolving collection work for these trust funds unless they first notified and obtained the informed\nconsent of Welch to submit their business proposals. As they did not do so, the trial court\nproperly found that they had breached their fiduciary duty towards Welch.\nQuestions:\n1. Why was it a breach of the duty of loyalty for E&T to submit proposals to Welch\xe2\x80\x99s clients\nwithout Welch\xe2\x80\x99s consent? What if Welch unreasonably refused consent?\n2. Why did it matter that Welch allegedly shared confidential information with E&T? If\nWelch had not shared confidential information with E&T, would it still have been a\nbreach of the duty of loyalty for E&T to submit proposals to Welch\xe2\x80\x99s clients without\nWelch\xe2\x80\x99s consent?\n3. When E&T provided collection services to Welch\xe2\x80\x99s former clients, did it create an\nattorney-client relationship? Does it matter for the purpose of the duty of loyalty?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c252\n4. After the attorney-client relationship between E&T and Welch ended, could E&T\ncompete with Welch for business without Welch\xe2\x80\x99s consent? Are there circumstances\nwhere it could and circumstances where it couldn\xe2\x80\x99t?\nRemedies for the Breach of the Duty of Loyalty\nMaxwell v. Gallagher, 709 A. 2d 100 (DC App. 1998)\nSummary: Gallagher & Co., Real Estate, Inc. was a closely-held corporation. In 1987,\nMaxwell & Bear provided legal advice to Gallagher and its owners in connection with the\ndivision of ownership shares in the corporation. In the transaction, 11 of the 100 shares\nin the corporation were transferred to Maxwell & Bear, which filed a declaratory\njudgment action to claim its shares. The corporation and its owners counterclaimed,\nseeking recission of the transfer for breach of fiduciary duty. The trial court found that the\ntransaction created a conflict of interest that Maxwell & Bear did not resolve, causing a\nbreach of the duty of loyalty, and ordered recission. The trial court found no actual\ndamages, but awarded $75,000 in punitive damages to the plaintiffs. The appellate court\naffirmed the recission, but reversed the punitive damages award, because the trial court\nfound no actual damages.\nFARRELL, Associate Judge:\nThis appeal from a judgment and award of damages for breach of fiduciary duty requires us,\ninter alia, to consider once again the relationship between compensatory (or actual) and punitive\ndamages. Because the trial judge as factfinder expressly found that the appellees (counterclaimants) had not proven a basis for an award of actual damages, we hold that the judge\'s\naward of punitive damages was impermissible. We reverse that award but otherwise affirm the\njudgment.\nI.\nPlaintiff James S. Maxwell sought a declaratory judgment in Superior Court confirming the right\nof the law firm Maxwell & Bear to retain its ownership of eleven shares of stock in Gallagher &\nCo., Real Estate, Inc., of which Maxwell and Robert H. Bear had been directors and Maxwell an\nofficer. The remaining owners of the corporation, Eugene J. Gallagher and Daniel J. O\xe2\x80\x99Lone, as\nwell as the corporation, answered and filed a counterclaim adding Bear as a counter-defendant.\nThey sought rescission of the stock transfer to Maxwell & Bear primarily on grounds of breach of\nfiduciary duty by the firm in providing legal representation to the corporation and the other\nowners. Following a bench trial, Judge Mitchell\xe2\x80\x94Rankin issued an exhaustive written order and\nopinion concluding that Maxwell and Bear each had furnished legal representation to the\ncorporation and Messrs. Gallagher and O\'Lone during the relevant times and had breached\ntheir resultant fiduciary duty by placing their personal interest in controlling the corporation\nahead of the interests of the clients. The judge ordered rescission of the stock held by Maxwell\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c253\n& Bear, awarded $1 in nominal damages to the appellees after finding no support for an award\nof actual damages, and ordered Maxwell and Bear to pay $75,000 in punitive damages.\nII.\nThe trial judge found that Maxwell & Bear undertook to represent the corporation and its\nprincipals at meetings in December 1987 and January 1988 during which the division of\nownership shares in the closely-held corporation was negotiated and agreed upon, resulting in\nthe allocation of eleven of the one hundred shares to the law firm of Maxwell & Bear. The judge\nfurther found that Maxwell undertook the representation \xe2\x80\x9cunder circumstances where the\ninterest between the members including Maxwell & Bear and the corporate client were not\ncompatible, and under circumstances where the law firm fostered and exploited the divergence.\xe2\x80\x9d\nIn particular, the stock division, including \xe2\x80\x9cthe equity interest solicited and obtained by the law\nfirm was not consummated to facilitate the best interest of the corporation, but only to satisfy the\ndemands of individual members and the law firm.\xe2\x80\x9d Moreover, from the beginning of the attorneyclient relationship, Maxwell had never disclosed to, or discussed with, the other principals the\npossible conflicts of interest that relationship entailed. By engaging in this course of \xe2\x80\x9cdouble\ndealing\xe2\x80\x9d designed to insure themselves effective control of the corporation, the judge found that\nMaxwell and Bear breached fundamental attorney-client obligations as reflected in multiple\nprovisions of the District of Columbia Code of Professional Responsibility.\nOn appeal, Maxwell and Bear primarily dispute the trial judge\'s finding that they undertook legal\nrepresentation of the other principals in connection with the division of the stock. They concede\nthat they represented Gallagher, O\xe2\x80\x99Lone, and Pollard on other matters (indeed, they so\nstipulated at trial), but argue that when it came to the pivotal meetings at which the stock\ndivision was negotiated, all present knew that Maxwell and Bear \xe2\x80\x9cwere there for their own\nbusiness reasons.\xe2\x80\x9d\nSignificant first is that Maxwell and Bear do not deny that they purported to represent the\ncorporation with regard to the stock division. They contend that \xe2\x80\x9cthere is no evidence to support\nany finding that the attorneys ever undertook any professional responsibility in connection with\nthe issuance of the stock other than to the corporation.\xe2\x80\x9d Yet in that admitted capacity, they\nconcede that they owed a fiduciary duty, and the trial judge expressly found that they had\nplaced their private interest in securing control of the corporation above the interests of the\ncorporate client.\nMoreover, there is ample record support for the judge\'s finding that the law firm purported to\nrepresent the other principals at the stock division meetings. Those meetings took place against\nthe background of a course of dealing starting in 1984 during which Maxwell and Bear played\nthe \xe2\x80\x9cdual/multiple roles\xe2\x80\x9d of business associates and legal counsel to Gallagher, including when\njointly forming a predecessor company in 1986. As a later illustration, the judge found that\nGallagher \xe2\x80\x9csought and received legal advice from Mr. Maxwell as to the most appropriate time\nto resolve Mr. Pollard\xe2\x80\x99s interest in the company,\xe2\x80\x9d an important issue because Pollard faced\ncollateral legal (and potential criminal) liability at the time he joined the corporation. Indeed, the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c254\nDecember 18, 1997 meeting at which the stock division became the paramount subject was\noriginally called by Maxwell, at Gallagher\'s request, to discuss a real estate commission dispute\nthe company had had with another real estate firm, \xe2\x80\x9ca matter in which Maxwell & Bear served as\nlegal counsel for Messrs. Gallagher, Pollard, and O\xe2\x80\x99Lone.\xe2\x80\x9d According to testimony by O\'Lone,\nMaxwell expressly justified the law firm\'s demanded percentage ownership as payment for the\nongoing representation it was providing to and on behalf of the company and its principals. In\nshort, we find no reason to disturb the finding of a legal relationship between Maxwell & Bear\nand the others extending through the stock division and beyond.\nNor will we disturb the finding that appellants breached the duties imposed by that relationship\nby failing to disclose the business advantages they sought which \xe2\x80\x9cmight affect the firm\'s legal\njudgment vis-a-vis Mr. Gallagher\xe2\x80\x9d and by acting repeatedly to effectuate their own interests at\nthe expense of the other principals.\nThe relation of attorney and client is one of the highest trust and confidence, and demands the\nutmost good faith on the part of the attorney. This relation is not only highly confidential, but\npresents so many opportunities for the reaping of special benefits at the expense of the client by\nan attorney so disposed, that courts will closely scrutinize any transaction in which the attorney\nhas assumed a position antagonistic to his client. In thus \xe2\x80\x9cscrutinizing\xe2\x80\x9d the relationship at hand,\nthe trial judge found ample reason, as do we, to conclude that\nthe law firm acted in complete disregard of the interests of the corporate client and Mr.\nGallagher. The law firm made no disclosures to any client, obtained no informed\nconsents from any client, and sought by its disregard of its ethical and fiduciary duties to\nits corporate client to benefit itself.\nWe therefore sustain the judge\'s rescission of the stock transfer "as the tangible product of the\nbreaches of fiduciary duty."\nIII.\nAlthough the trial judge ordered cancellation of the stock transfer, she also found \xe2\x80\x9cno record\nevidence of any meaningful evaluation of the stock\xe2\x80\x9d at the time it was divided. Nor did the\nappellees present at trial any evidence of the dollar value of the stock. This exemplified what the\ntrial judge found to be a complete failure of the appellees to present proof of loss from the\nbreach of duty for which compensatory damages could be awarded. Maxwell and Bear argue\nthat, in the absence of such proof, it was error for the trial judge to award punitive damages. We\nare constrained to agree. Despite some uncertainty in our decisions over the years, the principle\nwe derive from them is that, before punitive damages may be awarded, there must be a basis in\nthe record for an award of actual damages, even if nominal. Since the trial judge expressly\nfound no such basis in the record of this case, punitive damages will not lie.\nA.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c255\nIn her original opinion, the judge denied the counterclaim \xe2\x80\x9cwith respect to compensatory\ndamages, in the absence of proof of the same,\xe2\x80\x9d but awarded $75,000 in punitive damages for\nthe breach of fiduciary duty. The appellees then moved to amend the judgment \xe2\x80\x9csolely for the\ncourt to make an express finding that they are entitled to compensatory damages in at least a\nnominal amount.\xe2\x80\x9d The judge modified her order by awarding appellees \xe2\x80\x9cnominal damages in the\namount of $1.00,\xe2\x80\x9d but she made explicit that this was not an award for actual damages because\nthe appellees had shown no basis for such compensation. The judge distinguished between\nproof of \xe2\x80\x9cinjury\xe2\x80\x9d and \xe2\x80\x9cevidence of any loss occasioned by\xe2\x80\x9d the injury. Referring to her original\nfinding that \xe2\x80\x9cthe harm caused to the corporation as a client and to Mr. Gallagher as a client by\nthe law firm\xe2\x80\x99s cavalier and self-interested approach to its ethical and fiduciary duties is amply\ndemonstrated by the facts in this case,\xe2\x80\x9d she continued:\nAlthough this Court does agree there is ample justification for a finding of injury as\nprovided in the original order, it does not concur with appellees that they are entitled to\ncompensatory damages. The reason is simple: they have failed to produce evidence of\nany loss occasioned by Maxwell\xe2\x80\x99s and Bear\xe2\x80\x99s conduct for which they should be\ncompensated. Having proven only breach of fiduciary duty, and hence injury, appellees\nare entitled only to a nominal damage award but are not equally entitled to a\ncorresponding compensatory damage award.\nThe judge thus awarded nominal damages of $1.00 as what she believed to be the required\xe2\x80\x94\nand sufficient\xe2\x80\x94predicate for punitive damages to a \xe2\x80\x9cplaintiff whose legal right has been\ntechnically violated but has proved no real damage.\xe2\x80\x9d In a word, the breach of fiduciary duty\nwithout more supplied the basis for the punitive damage award.\nB.\nFirst of all, we reject the appellees\xe2\x80\x99 assertion that the trial judge found actual damages but was\nmerely unable to quantify them\xe2\x80\x94the $1.00 in nominal damages being a proxy for that\nindeterminate but actual loss. The appellees alleged only economic damages, something not\ninherently impossible to quantify if they had been proven. More importantly, the judge took pains\nto state repeatedly that the appellees had \xe2\x80\x9cfailed to produce evidence of any loss\xe2\x80\x9d\xe2\x80\x94 hence any\ncompensable damage\xe2\x80\x94resulting from the breach of fiduciary duty. We therefore must decide\nwhether the award of punitive damages was permissible without proof that actual damages\nwere warranted.\nWe think the essence of our case law is this: A plaintiff must prove a basis for actual damages\nto justify the imposition of punitive damages. The amount of such damages may be nominal,\nstemming from the difficulty of quantifying them or from some other cause. But without proof of\nat least nominal actual damages, punitive damages may not be awarded.\nOur most recent statement of this rule was in Ayala v. Washington. There we said:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c256\nUnder the law of the District of Columbia, although there must be a basis for\ncompensatory damages before punitive damages will be considered, a plaintiff need not\nprove anything more than nominal actual damages to justify the imposition of punitive\ndamages.\nIn awarding punitive damages despite the absence of a basis for actual damages, the trial judge\nrelied partly on the following passage from Brown v. Coates:\nOnce it has been shown that one trained and experienced holds himself out to the public\nas worthy to be trusted for hire to perform services for others, and those so invited do\nplace their trust and confidence, and that trust is intentionally and consciously\ndisregarded, and exploited for unwarranted gain, community protection, as well as that\nof the victim, warrants the imposition of punitive damages.\nThe cogency of this reasoning is indisputable but Brown does not bear upon the issue\npresented here of the necessity vel non of proof of actual damages before punitive damages\nmay be awarded. We hold that, because the trial judge expressly found that appellees had\nproven no actual damages, punitive damages could not be awarded.\nQuestions:\n1. Why did the court find that Maxwell & Bear violated its duty of loyalty? How could\nMaxwell & Bear have avoided violating its duty of loyalty?\n2. Did Maxwell & Bear owe a duty of loyalty to the corporation or to the owners of\nthe corporation? Could Maxwell & Bear represent all of the owners of the\ncorporation?\n3. Why did the court find no actual damages? Was it right?\nFurther Reading:\n\xe2\x97\x8f\n\nLisa G. Lerman, Lying to Clients, 138 U. Pa. L. Rev. 659 (1990)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c257\n4.4: Current Client Conflicts of Interest\nI\xe2\x80\x99ll never leave him down though I might mess around. It\'s only \xe2\x80\x98cause I need some affection. So\nI creep, yeah, just creepin\xe2\x80\x99 on. On the down low, \xe2\x80\x98cept nobody is supposed to know. So I creep\nyeah, \xe2\x80\x98cause he doesn\'t know what I do, and no attention goes to show.50\nAttorneys have fiduciary duties of care, loyalty, impartiality, and confidentiality to both the clients\nthey intend to represent and the quasi-clients they do not. Sometimes, it is unclear whether a\nconflict of interest implicates the duty of care or the duty of loyalty.\nTypically, attorneys have more than one client at a time. Whenever they contemplate forming a\nnew attorney-client relationship, they must determine whether it would create a conflict of\ninterest with one of their existing clients. And they must always be attentive to the possibility that\nconflicts of interest will arise between different clients.\nIn case a conflict of interest exists with respect to a new client, or arises with respect to an\nexisting client, attorneys must obtain informed consent from all of their clients affected by the\nconflict, or withdraw from representation.\nWeil, Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267 (NY\nApp. Div. 2004)\nSummary: Weil, Gotshal & Manges represented Fashion Boutique in an action against\nFendi, but also represented Prada, which acquired Fendi. When Weil filed an action\nagainst Fashion Boutique for unpaid legal fees, Fashion Boutique counterclaimed\nagainst Weil for malpractice and breach of fiduciary duty, because it failed to investigate\nor introduce relevant testimony. The trial court dismissed the malpractice claims, but not\nthe fiduciary duty claims. The appellate court reversed, reinstating the malpractice claim\nand dismissing the fiduciary duty claim as redundant.\nThis action for $2.7 million in unpaid legal fees arose out of the representation, commencing in\n1993, of counterclaim plaintiff Fashion Boutique of Short Hills, Inc. and its principals by\ncounterclaim defendant law firm and two of its partners. Fashion Boutique alleges that, while\nrepresenting it against Fendi in an action in federal court, Prada, which had acquired a\ncontrolling interest in Fendi in October 1999, retained the law firm. The federal action was based\non alleged disparaging remarks by Fendi, a competing Fifth Avenue boutique, and its parent\nFendi, which led to the destruction of Fashion Boutique\xe2\x80\x99s retail business, thereby violating the\nLanham Act and New York State law prohibiting product disparagement. The law firm\nrepresented Fashion Boutique through extensive pretrial discovery, a summary judgment\nmotion resulting in the dismissal of the Lanham Act claim and a July 2000 jury trial, which\nresulted in the award of $35,000 in compensatory damages and $75,000 in punitive damages in\nfavor of Fashion Boutique. Earlier, in March 2000, the Fendi defendants had made a settlement\n50\n\nTLC, Creep, CrazySexyCool (1994).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c258\noffer of $1.4 million, which, although recommended by the law firm, was rejected by Fashion\nBoutique. The law firm was granted leave to withdraw in September 2000. In December 2002,\nthe United States Court of Appeals for the Second Circuit affirmed the dismissal of the Lanham\nAct claim.\nThe law firm thereafter commenced this action for unpaid legal fees; Fashion Boutique\nanswered and asserted counterclaims for legal malpractice and breach of fiduciary duty,\nseeking $15,555,537 in damages, based on two principal allegations. It alleged that the two law\nfirm partners \xe2\x80\x9cdisregarded their fiduciary obligation and breached their duty of undivided loyalty\nto Fashion Boutique\xe2\x80\x9d by agreeing in late 1999 to represent Prada and thereby creating an\n\xe2\x80\x9cirresolvable conflict of interest.\xe2\x80\x9d It also alleges that, as a result of this conflict, the law firm did\nnot use adequately the testimony of a witness, Caroline Clarke, a former Fendi officer, who, it is\nclaimed, could supply \xe2\x80\x9ccritical elements\xe2\x80\x9d of proof relevant to the dismissed Lanham Act claim.\nAccording to Fashion Boutique, Ms. Clarke, in an October 6, 1999 e-mail, told one of the\ndefendant law firm partners that she could testify about hundreds of incidents in which Fendi\nemployees made disparaging remarks about Fashion Boutique and that she knew of a\n\xe2\x80\x9ccontinued policy of disparagement\xe2\x80\x9d against Fashion Boutique. In a prior February 1994\ndeposition, Ms. Clarke denied personal knowledge of any Fendi policy to disparage the quality\nof Fashion Boutique merchandise. Notwithstanding, Fashion Boutique claimed that the law firm\nfailed to appreciate the significance of the \xe2\x80\x9cnew evidence\xe2\x80\x9d contained in the e-mail and to use\nMs. Clarke\xe2\x80\x99s testimony more effectively to reinstate the Lanham Act claim and prove the\nremaining claims at trial. Fashion Boutique also alleged that the law firm failed to alert the trial\njudge to claimed threats against Ms. Clarke at the time of trial and that, because of its divided\nloyalty, in the face of these threats, the law firm, in effect, abandoned her as a witness; that after\nthe dismissal of the Lanham Act claim, it improvidently advised Fashion Boutique to agree to a\nstipulated judgment and take an immediate appeal; and that it failed to conduct adequate crossexamination of Fendi witnesses and to submit certain financial records to the jury on the punitive\ndamages issue.\nThe law firm moved to dismiss the counterclaims, arguing that no conflict of interest exists since\nthe product disparagement action is completely unrelated to the trademark enforcement issues\nin certain \xe2\x80\x9cgray goods\xe2\x80\x9d litigation in which the law firm was advising Prada. The law firm also\nargued that, even if a conflict of interest case had been properly pleaded, Fashion Boutique\ncannot establish the element of loss causation. The motion court granted the motion in part and\ndenied it in part, dismissing the second counterclaim for legal malpractice but sustaining the first\ncounterclaim for breach of fiduciary duty. In so ruling, the motion court rejected the probative\nvalue of Clarke\xe2\x80\x99s October 1999 e-mail, the focal point of Fashion Boutique\xe2\x80\x99s counterclaims,\nfinding, \xe2\x80\x9cNothing in the E-mail would have altered the federal courts\xe2\x80\x99 conclusion, upon which\ndismissal of the Lanham Act claim was based, that Fendi\'s actions did not constitute \xe2\x80\x98advertising\nor promotion\xe2\x80\x99 within the meaning of the Lanham Act.\xe2\x80\x9d Similarly, as to Fashion Boutique\'s\ncommon-law product disparagement claims, the motion court found that the documentary\nevidence \xe2\x80\x9crefutes Fashion Boutique\xe2\x80\x99s contention that, but for the counterclaim-defendants\xe2\x80\x99\nfailure to properly utilize Clarke as a witness, Fashion Boutique would have obtained a\nsubstantially greater award of damages on its claims under New York State law.\xe2\x80\x9d The court also\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c259\nrejected the claim that \xe2\x80\x9cClarke was unable to testify fully and freely at trial, because Fendi was\nsubjecting her to an alleged campaign of threats and intimidation.\xe2\x80\x9d The court noted that the\nfederal trial court examined Clarke at a hearing outside the jury\xe2\x80\x99s presence to consider the effect\nof the purported threats on her testimony, at the conclusion of which the court concluded: \xe2\x80\x9cI\nhave listened to a very distraught woman who has addressed subjects which are irrelevant to\nthis lawsuit.\xe2\x80\x9d The motion court rejected each of the criticisms of the way in which the law firm\nconducted the trial, finding that they constitute \xe2\x80\x9csimply dissatisfaction with strategic choices.\xe2\x80\x9d\nDespite this finding, the court sustained the breach of fiduciary duty counterclaim, holding that\neven if the law firm may not have had an actual conflict of interest it might not have been\n\xe2\x80\x9csensitive to forces that might operate upon it subtly in a manner likely to diminish the quality of\nits work.\xe2\x80\x9d The same documentary evidence that refuted legal malpractice, the court held, \xe2\x80\x9cdoes\nnot utterly refute\xe2\x80\x9d the allegations that the law firm\xe2\x80\x99s \xe2\x80\x9cfailure to make better use of Clarke\xe2\x80\x99s\ntestimony, and delay in advising the federal trial court of the purported campaign of intimidation\nagainst Clarke until after she had already given her trial testimony, substantially contributed to\nthe failure to achieve a better result in the Fendi action.\xe2\x80\x9d We reverse.\nFashion Boutique\xe2\x80\x99s theory of liability, common to both the legal malpractice and breach of\nfiduciary duty counterclaims, is that during the latter part of the law firm\xe2\x80\x99s representation of\nFashion it labored under a conflict of interest that was at such an extent that it compromised the\nlaw firm\xe2\x80\x99s level of advocacy and contributed to a trial outcome less favorable than would\notherwise have been achieved. In dismissing the legal malpractice counterclaim, the motion\ncourt reviewed a record consisting of 17 different exhibits, ranging from pleadings to transcripts\nof arguments to testimony, both at trial and in depositions, as well as an e-mail, on the basis of\nwhich it made factual findings in support of its decision. The testimonial portion of that\nsubmission, alone, ran to more than 700 pages. Such a review, culminating in factual findings,\nwould be most unusual even if this motion had been converted, which it was not, to one for\nsummary judgment. The law firm argued that the 500 pages of exhibits constituted documentary\nevidence. In opposing the motion, Fashion Boutique relied on the detailed factual allegations of\nits counterclaims and whether reasonable inferences could be drawn therefrom. A court is\nobliged to accept the complaint\xe2\x80\x99s factual allegations as true, according to plaintiff the benefit of\nevery possible favorable inference, and determining \xe2\x80\x9conly whether the facts as alleged fit within\nany cognizable legal theory. Dismissal is warranted only if the documentary evidence submitted\nconclusively establishes a defense to the asserted claims as a matter of law.\xe2\x80\x9d The motion court\nclearly departed from this standard. Disregarding the allegations of the counterclaims and the\npossible inferences to be drawn therefrom, it reviewed evidence, including deposition and trial\ntestimony and a three-page e-mail narrative, described by its author, Ms. Clarke, as an\n\xe2\x80\x9coverview\xe2\x80\x9d of the areas of interest as to which she could offer testimony, and made factual\nfindings. In considering such evidence, the court went far beyond what the Legislature intended.\nThe submissions here are of a type that \xe2\x80\x9cdo not meet the requirement of conclusively\nestablishing the defense as a matter of law.\xe2\x80\x9d For instance, the motion court disregarded the fact\nthat Ms. Clarke\xe2\x80\x99s e-mail was only an overview of her testimony and viewed it as the whole of her\ntestimony. Nor did the court take into account the many ways Ms. Clarke indicated she could\ntestify with personal knowledge about Fendi\xe2\x80\x99s campaign of disparagement. On this record, we\nfind that the legal malpractice counterclaim\xe2\x80\x99s allegation that but for the law firm\xe2\x80\x99s failure, due to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c260\nits debilitating conflict of interest, to make proper use of Ms. Clarke\xe2\x80\x99s testimony, the Fashion\nBoutique case against Fendi would have had a more favorable result, was not conclusively\ncontroverted. Thus, the legal malpractice counterclaim should be reinstated.\nAs to the claim for breach of fiduciary duty, we have consistently held that such a claim,\npremised on the same facts and seeking the identical relief sought in the legal malpractice\ncause of action, is redundant and should be dismissed.\nWe take this occasion to note that the court erred in holding that the \xe2\x80\x9cbut for\xe2\x80\x9d standard of\ncausation, applicable to a legal malpractice claim, does not apply to the claim for breach of\nfiduciary duty. Instead, it applied the less rigorous \xe2\x80\x9csubstantial factor\xe2\x80\x9d causative standard. We\nhave never differentiated between the standard of causation requested for a claim of legal\nmalpractice and one for breach of fiduciary duty in the context of attorney liability. The claims\nare coextensive. Under New York law, to establish the elements of proximate cause and actual\ndamages, where the injury is the value of the claim lost, the client must meet the \xe2\x80\x9ccase within a\ncase\xe2\x80\x9d requirement, demonstrating that \xe2\x80\x9cbut for\xe2\x80\x9d the attorney\xe2\x80\x99s conduct the client would have\nprevailed in the underlying matter or would not have sustained any ascertainable damages. The\ncases relied upon by Fashion Boutique did not involve a former client\xe2\x80\x99s breach of fiduciary claim\nagainst his attorneys, but rather a typical commercial dispute as to the fiduciary obligation owed\nby a lawyer to his former partners when departing to join another firm.\nQuestions:\n1. Why did Fashion Boutique think Weil committed malpractice? Why did Fashion Boutique\nthink Weil breached its fiduciary duty?\n2. How did the trial court analyze those claims? Why did the appellate court reverse?\n3. What is the difference between a malpractice claim and a breach of fiduciary duty claim?\nAre they redundant? Which kind of claim did Fashion Boutique have, if either?\nProspective Informed Consent\nObtaining a client\xe2\x80\x99s informed consent to a conflict of interest after it arises can be difficult. After\nall, it may not be in the client\xe2\x80\x99s interest to consent to the conflict. Accordingly, many lawyers ask\nnew clients to provide informed consent to conflicts that may arise in the course of\nrepresentation.\nShould clients be able to provide informed consent to potential future conflicts? When should\nprospective consent be permitted? Are there circumstances in which it should not be permitted?\nHow should courts determine whether prospective consent was sufficiently informed to be\neffective?\nModel Rule 1.7, Comment [22]\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c261\nWhether a lawyer may properly request a client to waive conflicts that might arise in the\nfuture is subject to the test of paragraph (b). The effectiveness of such waivers is\ngenerally determined by the extent to which the client reasonably understands the\nmaterial risks that the waiver entails. The more comprehensive the explanation of the\ntypes of future representations that might arise and the actual and reasonably\nforeseeable adverse consequences of those representations, the greater the likelihood\nthat the client will have the requisite understanding. Thus, if the client agrees to consent\nto a particular type of conflict with which the client is already familiar, then the consent\nordinarily will be effective with regard to that type of conflict. If the consent is general and\nopen-ended, then the consent ordinarily will be ineffective, because it is not reasonably\nlikely that the client will have understood the material risks involved. On the other hand,\nif the client is an experienced user of the legal services involved and is reasonably\ninformed regarding the risk that a conflict may arise, such consent is more likely to be\neffective, particularly if, e.g., the client is independently represented by other counsel in\ngiving consent and the consent is limited to future conflicts unrelated to the subject of the\nrepresentation. In any case, advance consent cannot be effective if the circumstances\nthat materialize in the future are such as would make the conflict nonconsentable under\nparagraph (b).\nVisa USA, Inc. v. First Data Corp., 241 F. Supp. 2d 1100 (N.D. Ca. 2003)\nSummary: Heller Ehrman White & McAuliffe represented Visa. First Data asked Heller\nto represent it in a patent infringement action, and Heller agreed, if First Data consented\nto Heller\xe2\x80\x99s representation of Visa in any future disputes. Soon afterward, Visa sued First\nData, represented by Heller. First Data filed a motion to disqualify Heller. The court\ndenied the motion because First Data knowingly consented to the conflict and Heller\nprotected First Data\xe2\x80\x99s confidentiality.\nHAMILTON, District Judge.\nPlaintiff Visa sued defendant First Data in April 2002 for trademark infringement, dilution, and\nvarious breach of contract claims. First Data has contracted with Visa to process financial\ntransactions on Visa\xe2\x80\x99s behalf. First Data has recently launched a new business initiative, which\nwill allow First Data to bypass Visa\xe2\x80\x99s regulations on the processing of certain Visa-related\ntransactions. Visa claims these private arrangements violate its contractual and trademark\nrights.\nVisa is represented in this matter by the law firm of Heller Ehrman White & McAuliffe\xe2\x80\x99s San\nFrancisco office. In March 2001, before this lawsuit was filed, First Data was sued in an\nunrelated patent infringement action currently pending in the District of Delaware. First Data\nsought to retain Heller\xe2\x80\x99s Silicon Valley office as counsel in the Delaware action. After running a\nconflicts check, Heller informed First Data that it had a long-standing relationship with Visa.\nWhile Heller did not see any conflicts between the two parties at that time, Heller could not\nrepresent First Data in the patent infringement case unless First Data agreed to permit Heller to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c262\nrepresent Visa in any future disputes, \xe2\x80\x9cincluding litigation,\xe2\x80\x9d that might arise between First Data\nand Visa. First Data consented to those terms, which were memorialized in an engagement\nletter between Heller and First Data. The relevant portion of the letter states:\nOur engagement by you is also understood as entailing your consent to our\nrepresentation of our other present or future clients in \xe2\x80\x9ctransactions,\xe2\x80\x9d including litigation\nin which we have not been engaged to represent you and in which you have other\ncounsel, and in which one of our other clients would be adverse to you in matters\nunrelated to those that we are handling for you. In this regard, we discussed Heller\xe2\x80\x99s\npast and on-going representation of Visa in matters which are not currently adverse to\nFirst Data. Moreover, as we discussed, we are not aware of any current adversity\nbetween Visa and First Data. Given the nature of our relationship with Visa, however, we\ndiscussed the need for the firm to preserve its ability to represent Visa on matters which\nmay arise in the future including matters adverse to First Data, provided that we would\nonly undertake such representation of Visa under circumstances in which we do not\npossess confidential information of yours relating to the transaction, and we would staff\nsuch a project with one or more attorneys who are not engaged in your representation.\nIn such circumstances, the attorneys in the two matters would be subject to an ethical\nwall, screening them from communicating with each other regarding their respective\nengagements. We understand that you do consent to our representation of Visa and our\nother clients under those circumstances.\nAfter First Data agreed to the waiver, Visa also agreed to Heller\'s dual representation.\nA few months later, in July 2001, First Data publicly announced its intention to launch its new\nprivate arrangement plan, and in the beginning of 2002, First Data officially notified Visa. Visa\nthen sued First Data. First Data in response threatened antitrust counterclaims against Visa,\nand then began settlement discussions. Almost four months after the complaint was filed, and\nshortly after settlement talks broke down, First Data informed Visa in August 2002 that it\nintended to move to disqualify Heller as counsel for Visa in this matter.\nFirst Data claims that when it signed the waiver letter, it was not adequately informed of the\npossibility that its patent counsel could sue it for millions of dollars in damages and raise claims\ndisparaging First Data and attacking the very core of its business. First Data contends that\nunder the California Rules of Professional Conduct, Heller at a minimum was required to\nreaffirm First Data\'s prospective consent when the actual conflict between Visa and First Data\narose. First Data has also indicated that it believes that Heller\'s patent lawyers have access to\nconfidential information from First Data that Visa could use against First Data in this action.\nHeller and Visa argue that First Data was fully informed about the situation and agreed to allow\nHeller to represent Visa in future litigation against First Data. Heller and Visa argue that the\nCalifornia Rules of Professional Conduct and other ethical rules expressly permit prospective\nwritten consent to a conflict waiver, and that no rules require Heller to obtain a second consent\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c263\nto continue in their representation of Visa. Heller also indicates that it has put an ethical wall in\nplace that adequately protects First Data\'s confidential information.\nDISCUSSION\nA. Motion to Disqualify Counsel\xe2\x80\x94Legal Standards\nThe Northern District of California has adopted the California Rules of Professional Conduct,\nand attorneys practicing in this court are required to adhere to those standards, as articulated in\nthe rules and any court decisions interpreting them. The right to disqualify counsel is within the\ndiscretion of the trial court as an exercise of its inherent powers.\nMotions to disqualify counsel are strongly disfavored. Thus, such requests \xe2\x80\x9cshould be subjected\nto particularly strict judicial scrutiny.\xe2\x80\x9d\nIn reviewing a motion to disqualify counsel, the district court must make \xe2\x80\x9ca reasoned judgment\nand comply with the legal principles and policies appropriate to the particular matter at issue.\xe2\x80\x9d\nThe district court is permitted to resolve disputed factual issues in deciding a motion for\ndisqualification and must make findings supported by substantial evidence.\nB. Simultaneous Representation of Adverse Clients and Written Waivers\n1. Conflict Waiver Letters\nFirst Data claims that Heller has violated Cal. Rule of Prof. Conduct 3-310(C)(3), which states:\nA member of the California State Bar shall not, without the informed written consent of\neach client:\n(3) represent a client in a matter and at the same time in a separate matter accept as a\nclient a person or entity whose interest in the first matter is adverse to the client in the\nfirst matter.\nFirst Data argues that this rule automatically disqualifies Heller from representing both Visa and\nFirst Data, even though First Data\xe2\x80\x99s patent litigation is unrelated to this action.\nWhen evaluating whether a law firm may concurrently represent two clients, even on unrelated\nmatters, it is presumed that the duty of loyalty has been breached and counsel is automatically\ndisqualified. But, as Visa and Heller note, the presumption may be rebutted and a law firm may\nnonetheless simultaneously represent two adverse clients if full disclosure of the situation is\nmade to both clients and both agree in writing to waive the conflict. Here, it is undisputed that\nHeller and First Data executed a conflict waiver letter. Thus, Heller is not automatically\ndisqualified from representing both Visa and First Data.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c264\n2. Prospective Waivers\nFirst Data next argues that Heller\xe2\x80\x99s use of a prospective waiver, which purported to waive all\nfuture conflicts between Visa and First Data, was improper without, at minimum, a second\ndisclosure and waiver once the situation between Visa and First Data ripened into an actual\nconflict. Visa and Heller argue that the prospective waiver signed by First Data was proper and\nfully informed, and thus no second waiver was required.\nAn advance waiver of potential future conflicts, such as the one executed by First Data and\nHeller, is permitted under California law, even if the waiver does not specifically state the exact\nnature of the future conflict. The only inquiry that need be made is whether the waiver was fully\ninformed. In some circumstances, a second waiver will be warranted, but only if the attorney\nbelieves that the first waiver was insufficiently informed. There is no case law requiring a second\ndisclosure in all circumstances for an advance waiver to be valid.\n3. Fully Informed Waiver\nA second waiver by First Data in a nonrelated litigation would only be required if the waiver\nletter insufficiently disclosed the nature of the conflict that subsequently arose between Visa and\nFirst Data. Thus, to prevail on this motion, First Data must show that it was not fully informed\nabout the consequences of its conflicts waiver when it signed the waiver letter. To show full\ndisclosure, Heller must demonstrate that it \xe2\x80\x9ccommunicated information reasonably sufficient to\npermit the client to appreciate the significance of the matter in question.\xe2\x80\x9d\nAn evaluation of whether full disclosure was made and the client made an informed waiver \xe2\x80\x9cis\nobviously a fact-specific inquiry.\xe2\x80\x9d Factors that may be examined include the breadth of the\nwaiver, the temporal scope of the waiver (whether it waived a current conflict or whether it was\nintended to waive all conflicts in the future), the quality of the conflicts discussion between the\nattorney and the client, the specificity of the waiver, the nature of the actual conflict (whether the\nattorney sought to represent both clients in the same dispute or in unrelated disputes), the\nsophistication of the client, and the interests of justice. In evaluating all these factors, there is\nsubstantial evidence showing that Heller made a full and reasonable disclosure to First Data\nand First Data knowingly waived any conflicts concerning Heller\'s ongoing representation of\nVisa.\na. Heller Fully Disclosed the Conflict to First Data.\nMost significantly, the waiver letter itself demonstrates that Heller fully explained to First Data\nthe nature of the conflict waiver at issue. When First Data first approached Heller to represent it\nin the patent litigation, Heller explained to First Data that, even though there were no present\nconflicts between Visa and First Data, there was a significant risk of future adversity because\nVisa and First Data were major competitors in the processing side of the credit card business.\nHeller thus informed First Data that it would not be able to take the matter unless First Data\nwould waive any conflicts that might arise out of Heller\'s ongoing work for Visa in matters up to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c265\nand including possible future litigation. This understanding was confirmed in the written waiver\nletter.\nOur engagement by you is also understood as entailing your consent to our\nrepresentation of our other present or future clients in \xe2\x80\x9ctransactions,\xe2\x80\x9d including litigation\nin which we have not been engaged to represent you and in which you have other\ncounsel, and in which one of our other clients would be adverse to you in matters\nunrelated to those that we are handling for you. In this regard, we discussed Heller\xe2\x80\x99s\npast and on-going representation of Visa U.S.A. and Visa International in matters which\nare not currently adverse to First Data. Moreover, as we discussed, we are not aware of\nany current adversity between Visa and First Data. Given the nature of our relationship\nwith Visa, however, we discussed the need for the firm to preserve its ability to represent\nVisa on matters which may arise in the future including matters adverse to First Data,\nprovided that we would only undertake such representation of Visa under circumstances\nin which we do not possess confidential information of yours relating to the transaction.\nThe letter identifies the adverse client, Visa, and discloses as fully as possible the nature of any\npotential conflict that could arise between the two parties. The letter also clearly states that the\nwaiver contemplates Heller\xe2\x80\x99s representation of Visa against First Data in matters \xe2\x80\x9cincluding\nlitigation.\xe2\x80\x9d First Data was given ample information concerning the conflict in question that it was\nasked to waive, reviewed this information, and then agreed to the waiver. First Data has failed\nto demonstrate that it was not fully and reasonably informed when it signed the waiver letter.\nThe cases where law firms have been disqualified for insufficient disclosures involve situations\nmuch more egregious than the facts presented here. For instance, in Image, Kodak successfully\ndisqualified Coudert Brothers, Image\xe2\x80\x99s attorneys, from representing Image in that action\nbecause Coudert had also represented Kodak in unrelated corporate matters. Kodak produced\nevidence that Coudert had deliberately misrepresented the scope of their representation of\nImage to Kodak by downplaying their actual conflict. Specifically, Coudert failed to mention to\nKodak\xe2\x80\x99s business people that they would be arguing against Kodak before the U.S. Supreme\nCourt in a landmark antitrust case that had been litigated for six years. They also failed to\ndisclose any of this information to Kodak\xe2\x80\x99s in-house counsel, and failed to obtain a written\nconsent. After weighing these factors, the court determined that this could not constitute full\ndisclosure and ordered Coudert disqualified.\nHere, in contrast, Heller notified First Data\xe2\x80\x99s director of intellectual property and division general\ncounsel of the potential for a future conflict, fully discussed the nature of that conflict, and\ninformed First Data that Heller would be unable to represent First Data unless the conflict was\nwaived. The facts and law do not support a finding that First Data was not given sufficient\ninformation to understand the scope of its waiver.\nb. Knowing Consent\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c266\nThere is also substantial evidence in the record that First Data was aware of this potential\nconflict with Visa and Heller when it signed the waiver letter, and thus First Data knowingly\nwaived that conflict in order to have Heller to represent it in the patent litigation. First Data in its\nAnswer stated that it had been contemplating its new private arrangement initiative and had\ngiven preliminary notice to Visa about it \xe2\x80\x9cas early as 1999.\xe2\x80\x9d In 2000, First Data had also\nindicated that Visa\xe2\x80\x99s business plans concerning private arrangements raised antitrust concerns\nfor the payment-card industry in amicus papers and motions to intervene in the Department of\nJustice antitrust litigation against Visa.\nFirst Data does not deny that it first began contemplating this arrangement in 1999 or that it\nforesaw antitrust concerns in 2000 over Visa\xe2\x80\x99s position on private arrangements. Instead, First\nData argues that it did not realize that Heller would represent Visa in those matters and had\nassumed that Heller would, at most, represent Visa against First Data on incidental matters\nsuch as implementation and enforcement of payment processor rules. First Data admits that it is\n\xe2\x80\x9cunlikely\xe2\x80\x9d that such matters would result in litigation with Visa.\nThis is not credible. Heller informed First Data that it represented Visa in large-scale commercial\nlitigation, and that due to the nature of the potential conflicts between the two parties, Heller\nwould not be able to represent First Data at all without a broad prospective waiver. First Data\nhad also submitted briefs in high-profile antitrust litigation in which Heller was representing Visa,\nand where First Data had threatened Visa with further antitrust claims. First Data knew that\nHeller was Visa\'s counsel on major matters that could potentially involve First Data. Given this\ninformation, First Data could not have believed that Heller would be uninvolved in any major\nlitigation that could potentially arise between Visa and First Data, or that Visa would have\nrestricted itself to hiring Heller solely for relatively minor regulatory disputes between the two\nparties.\nFirst Data contended on reply and at the hearing that even if it did know in 2001 when it signed\nthe waiver letter that Visa and First Data could potentially be involved in high-stakes litigation\nover First Data\xe2\x80\x99s private arrangement initiative, First Data had no duty to recognize that conflict\non its own. First Data argues that it was instead Visa and Heller\xe2\x80\x99s duty to inform First Data of\nthese risks, citing State Farm. In State Farm, though, the law firm in question had made no\ndisclosure to the junior client, and then argued that because the two clients were aware of the\nconflict when the junior client hired the law firm, they had implicitly consented to a conflict\nwaiver. The court found that the attorneys were still required to disclose the conflict and obtain\nexplicit consent from the clients in that circumstance. State Farm requires only that the\nattorneys disclose conflicts to clients. Here, those requirements were met when Heller disclosed\nthe existence of the potential Visa conflict before forming an attorney-client relationship with\nFirst Data and obtained a written conflict waiver agreement. No case law allows First Data to\nignore its own additional knowledge concerning the nature of the potential conflict when\ndeciding whether to waive.\nc. First Data is a Sophisticated User of Legal Services\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c267\nIn determining whether First Data gave informed consent in the waiver letter, the court may also\nproperly consider First Data\xe2\x80\x99s level of experience with legal services.\nFirst Data is a Fortune 500 company with over $6 billion in annual revenues. It is a\nknowledgeable and sophisticated user of legal services. It has a legal department of about fifty\nattorneys and routinely hires top-tier national law firms such as Bingham McCutchen, Heller,\nand Sidley Austin to handle its complex corporate transactions and litigation matters. First Data\ncan and should be expected to understand the full extent of what it waived when it signed\nHeller\xe2\x80\x99s explicit waiver letter.\nC. Ethical Walls\nIt is undisputed that Heller immediately put an intra-firm ethical wall in place when Visa sued\nFirst Data, which barred contact between the Heller attorneys representing First Data and the\nHeller attorneys representing Visa. First Data argues that the institution of an ethical wall is\ninsufficient to repair Heller\xe2\x80\x99s breach of its duty of loyalty, and that Heller has breached its duty of\nconfidentiality to First Data by its dual representation of Visa and First Data.\nHeller conceded at oral argument that if it had breached its duty of loyalty to First Data through\nits dual representation of Visa and First Data, an ethical wall would not be sufficient to cure the\nbreach. But Heller did not breach its duty of loyalty to First Data by agreeing to represent Visa in\nthis matter after receiving a valid prospective conflict waiver from First Data. Heller thus is not\nclaiming that the ethical wall is necessary to protect Heller\xe2\x80\x99s duty of loyalty to First Data.\nRather, Heller instituted the ethical wall to protect Heller\xe2\x80\x99s duty of confidentiality to its client First\nData. First Data states that it has shared information concerning its finances and its general\nbusiness plan to its patent lawyers, and argues that such information is presumed imputed to all\nHeller attorneys. Heller can rebut that presumption by \xe2\x80\x9cshowing that effective screening\nprocedures were implemented to prevent the passing of information between the tainted\nlawyers and other members of the firm.\xe2\x80\x9d Because First Data makes no showing in its papers\nbeyond the presumption of shared confidentiality in support of its allegations, and because\nHeller has demonstrated that it immediately put an ethical wall in place as soon as Heller was\nretained as Visa\xe2\x80\x99s counsel in this action, there has been no breach of the duty of confidentiality\nhere.\nQuestions:\n1. Why did First Data think that Heller had a conflict of interest? Why did the court\ndisagree?\n2. Should a client be able to consent to being sued by their attorney?\n3. How did Heller avoid creating a conflict of interest? How did the duty of loyalty and the\nduty of confidentiality create different problems?\nConflicts of Law\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c268\n\nWhen courts decide whether a conflict of interest exists and how to evaluate it, they must also\ndecide what law to apply. For state courts, the choice of law question is relatively easy. They\nmust apply the state law governing lawyers, although they may refer to federal law and general\nprinciples in interpreting the state law.\nBut for federal courts, the choice of law question is more complicated. They are necessarily\nreviewing the actions of attorneys who are members of a state bar and subject to state rules.\nBut they also have their own bar and may consider national rules and principles.\nAccordingly, federal courts must decide whether to apply state or national law in determining\nwhether a conflict of interest exists, and how to evaluate any conflicts of interest they find.\nIn re Dresser Industries, Inc., 972 F. 2d 540 (5th Cir. 1992)\nSummary: Susman Godfrey represented Dresser Industries in several actions, but also\nrepresented the plaintiffs in the Drill Bits class action, and informed Dresser of a\npotential conflict. Dresser declined to seek new counsel, but moved to disqualify\nSusman Godfrey when it became a defendant in Drill Bits. The district court denied the\nmotion, based on Texas law, but the circuit court reversed, based on the Model Rules.\nE. GRADY JOLLY, Circuit Judge:\nIn this petition for a writ of mandamus, we determine whether a law firm may sue its own client,\nwhich it concurrently represents in other matters. In a word, no; and most certainly not here,\nwhere the motivation appears only to be the law firm\xe2\x80\x99s self-interest.51 We therefore grant the\nwrit, directing the district judge to disqualify counsel.\nI\nThe material facts are undisputed. This petition arises from a consolidated class action antitrust\nsuit brought against manufacturers of oil well drill bits.\nDresser Industries, Inc., is now a defendant in Drill Bits, charged \xe2\x80\x94 by its own lawyers \xe2\x80\x94 with\nconspiring to fix the prices of drill bits and with fraudulently concealing its conduct. Stephen D.\nSusman, with his firm, Susman Godfrey, is lead counsel for the plaintiff\xe2\x80\x99s committee. As lead\ncounsel, Susman signed the amended complaint that levied these charges against Dresser, his\nfirm\xe2\x80\x99s own client.\nSusman Godfrey concurrently represents Dresser in two pending lawsuits. CPS International,\nInc. v. Dresser Industries, Inc., is the third suit brought by CPS International, a company that\n51\n\n\xe2\x80\x9cBits was going to be a case that was going to be active, big, protracted, the first price fixing case that\'s\ncome along in Houston in a long time. I had made somewhat of a reputation in that area, and I guess it\'s\nkind of painful not to be able to play in the game anymore.\xe2\x80\x9d Deposition of Stephen D. Susman.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c269\nclaims Dresser forced it out of the compressor market in Saudi Arabia. CPS International initially\nsued Dresser for antitrust violations and tortious interference with a contract. The antitrust claim\nhas been dismissed, but the tort claim is scheduled for trial. Susman Godfrey has represented\nDresser throughout these actions, which commenced in 1985. During its defense of Dresser,\nSusman Godfrey lawyers have had relatively unfettered access to data concerning Dresser\xe2\x80\x99s\nmanagement, organization, finances, and accounting practices. Susman Godfrey\xe2\x80\x99s lawyers\nhave engaged in privileged communications with Dresser\xe2\x80\x99s in-house counsel and officers in\nchoosing antitrust defenses and other litigation strategies. Susman Godfrey has also, since\n1990, represented Dresser in Cullen Center, Inc. v. W.R. Gray Co., a case involving asbestos in\na Dresser building, which is now set for trial in Texas state court.\nOn October 24 and November 24, 1991, Susman Godfrey lawyers wrote Dresser informing it\nthat Stephen Susman chaired the plaintiffs\xe2\x80\x99 committee in Drill Bits, that Dresser might be made\na Drill Bits defendant, and that, if Dresser replaced Susman Godfrey, the firm would assist in the\ntransition to new counsel. Dresser chose not to dismiss Susman Godfrey in CPS and Cullen\nCenter.\nDresser was joined as a defendant in Drill Bits on December 2, 1991. Dresser moved to\ndisqualify Susman as plaintiffs\xe2\x80\x99 counsel on December 13. Both Dresser and Susman Godfrey\nsubmitted affidavits and depositions to the district court, which, after a hearing, issued a detailed\nopinion denying the motion.\nThe district court noted that Southern District local rule 4B provides that the code of professional\nresponsibility for lawyers practicing in that district is the Code of Responsibility of the State Bar\nof Texas. Although the court further noted that other district courts look to other codes in\ndeciding motions to disqualify, nevertheless, it concluded that \xe2\x80\x9cDresser\'s motion to disqualify\nSusman Godfrey is governed wholly by the Texas Disciplinary Rules of Professional Conduct.\xe2\x80\x9d\nThe court then focused on Texas Disciplinary Rule 1.06, which provides:\n(b) Except to the extent permitted in paragraph (c), a lawyer shall not represent a person\nif the representation of that person:\n(1) involves a substantially related matter in which that person\'s interests are\nmaterially and directly adverse to the interests of another client of the lawyer or\nthe lawyer\xe2\x80\x99s firm; or\n(2) reasonably appears to be or become adversely limited by the lawyer\'s or law\nfirm\xe2\x80\x99s responsibilities to another client or to a third person or by the lawyer\'s or\nlaw firm\'s own interests.\n(c) A lawyer may represent a client in the circumstances described in (b) if:\n(1) the lawyer reasonably believes the representation of each client will not be\nmaterially affected; and\n(2) each affected or potentially affected client consents to such representation\nafter full disclosure.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c270\nThe district court described the Drill Bits complaint as a civil antitrust case, thus somewhat\nsoftening Dresser\xe2\x80\x99s description of it as an action for fraud or criminal conduct. The court held,\n\xe2\x80\x9cas a matter of law, that there exists no relationship, legal or factual, between the Cullen Center\ncase and the Drill Bits litigation,\xe2\x80\x9d and that no similarity between Drill Bits and the CPS suits was\nmaterial. The court concluded that \xe2\x80\x9cGodfrey\'s representation of the plaintiffs in the Drill Bits\nlitigation does not reasonably appear to be or become adversely limited by Susman Godfrey\xe2\x80\x99s\nresponsibilities to Dresser in the CPS and Cullen Center cases,\xe2\x80\x9d and accordingly denied the\nmotion to disqualify. Finally, the court denied permissive interlocutory appeal.\nII\nIn evaluating a motion to disqualify, we interpret the controlling ethical norms governing\nprofessional conduct as we would any other source of law. When the facts are undisputed,\ndistrict courts enjoy no particular advantage over appellate courts in formulating ethical rules to\ngovern motions to disqualify. Thus, in the event an appropriate standard for disqualification is\nbased on a state\'s disciplinary rules, a court of appeals should consider the district court\'s\ninterpretation of the state disciplinary rules as an interpretation of law, subject essentially to de\nnovo consideration.\nIII\nThe district court clearly erred in holding that its local rules, and thus the Texas rules, which it\nadopted, are the \xe2\x80\x9csole\xe2\x80\x9d authority governing a motion to disqualify. Motions to disqualify are\nsubstantive motions affecting the rights of the parties and are determined by applying standards\ndeveloped under federal law.\nThe district court\'s authority to promulgate local rules is derived from 28 U.S.C. \xc2\xa7 2071, which\nallows the courts only to adopt \xe2\x80\x9crules for the conduct of their business.\xe2\x80\x9d Thus, although the\ndistrict court should determine rules for the conduct of attorneys for the purpose of identifying\nconduct subject to sanctions, its local rules alone cannot regulate the parties\xe2\x80\x99 rights to counsel\nof their choice.\nIV\nWe apply specific tests to motions to disqualify counsel in circumstances governed by statute or\nthe Constitution. When presented with a motion to disqualify counsel in a more generic civil\ncase, however, we consider the motion governed by the ethical rules announced by the national\nprofession in the light of the public interest and the litigants\xe2\x80\x99 rights. Our source for the standards\nof the profession has been the canons of ethics developed by the American Bar Association.\nWe have applied particularly the requirement of canon 5 that a lawyer exercise \xe2\x80\x9cindependent\nprofessional judgment on behalf of the client\xe2\x80\x9d and the admonition of canon 9 that lawyers should\n\xe2\x80\x9cavoid even the appearance of impropriety.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c271\nOur most far-reaching application of the national standards of attorney conduct to an attorney\xe2\x80\x99s\nobligation to avoid conflicts of interest is Woods v. Covington County Bank. We held in Woods\nthat standards such as the ABA canons are useful guides but are not controlling in adjudicating\nsuch motions. The considerations we relied upon in Woods were whether a conflict has (1) the\nappearance of impropriety in general, or (2) a possibility that a specific impropriety will occur,\nand (3) the likelihood of public suspicion from the impropriety outweighs any social interests\nwhich will be served by the lawyer\'s continued participation in the case.\nWe applied the Woods standard to a conflict that arose when an attorney brought a suit against\na former client in Brennan\'s Inc. v. Brennan\'s Restaurant, Inc. In Brennan\xe2\x80\x99s, the plaintiffs moved\nto have the court disqualify the attorney for the defendants because, prior to the litigation, the\nattorney had jointly represented both parties. We affirmed the disqualification of the attorney,\nholding that an attorney could not sue a former client in a matter substantially related to the\nrepresentation of a former client. Similarly, in Wilson P. Abraham Construction Corp. v. Armco\nSteel Corp., we held that the court should bar an attorney from suing the co-defendant of a\nformer client if the co-defendants and their attorneys exchanged information.\nIn Woods, Wilson Abraham, and Brennan\xe2\x80\x99s, we applied national norms of attorney conduct to a\nconflict arising after the attorney\'s prior representation had been concluded. Now, however, we\nare confronted with our first case arising out of concurrent representation, in which the attorney\nsues a client whom he represents on another pending matter. We thus consider the problem of\nconcurrent representation under our framework in Woods as tailored to apply to the facts arising\nfrom concurrent representation.\nWe turn, then, to the current national standards of legal ethics to first consider whether this dual\nrepresentation amounts to impropriety. Neither the ABA Model Rules of Professional Conduct\nnor the Code of Professional Responsibility allows an attorney to bring a suit against a client\nwithout its consent. This position is also taken by the American Law Institute in its drafts of the\nRestatement of the Law Governing Lawyers.\nUnquestionably, the national standards of attorney conduct forbid a lawyer from bringing a suit\nagainst a current client without the consent of both clients. Susman\xe2\x80\x99s conduct violates all of\nthese standards \xe2\x80\x94 unless excused or justified under exceptional circumstances not present\nhere.\nExceptional circumstances may sometimes mean that what is ordinarily a clear impropriety will\nnot, always and inevitably, determine a conflicts case. Within the framework we announced in\nWoods, Susman, for example, might have been able to continue his dual representation if he\ncould have shown some social interest to be served by his representation that would outweigh\nthe public perception of his impropriety.52 Susman, however, can present no such reason. There\n52\n\nWe found above that the Texas rules of discipline do not control a motion to disqualify in federal court.\nWe are mindful, however, that the Texas rules\xe2\x80\x99 allowance of some concurrent representation is based, in\npart, on a concern that concurrent representation may be necessary either to prevent a large company,\nsuch as Dresser, from monopolizing the lawyers of an area or to assure that certain classes of unpopular\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c272\nis no suggestion that other lawyers could not ably perform his offices for the plaintiffs, nor is\nthere any basis for a suggestion of any societal or professional interest to be served. This fact\nsuggests a rule of thumb for use in future motions for disqualification based on concurrent\nrepresentation: However a lawyer\'s motives may be clothed, if the sole reason for suing his own\nclient is the lawyer\'s self-interest, disqualification should be granted.\nV\nWe find, therefore, that Dresser\'s right to the grant of its motion to disqualify counsel is clear\nand indisputable. We further find that the district court clearly and indisputably abused its\ndiscretion in failing to grant the motion. We have thus granted the petition and have issued the\nwrit of mandamus, directing the United States District Court for the Southern District of Texas to\nenter an order disqualifying Stephen D. Susman and Susman Godfrey from continuing as\ncounsel to the plaintiffs.\nQuestions:\n1. Why did the circuit court think a conflict of interest existed? Why did the court think\nDresser did not or could not provide consent?\n2. Should the court have applied the Texas rule or the model rule?\n\nclients receive representation. Although we do not now reach the matter, our consideration of social\nbenefit to offset the appearance of impropriety might allow such a representation if the balance clearly\nand unequivocally favored allowing such representation to further the ends of justice.\nWe believe, moreover, that the Texas rules are drawn to allow concurrent representation as the exception\nand not the rule. Even if the Texas rules had applied, no special circumstances being present here, Texas\nrule 1.06\xe2\x80\x99s prohibition of representation of potentially adverse interests would have barred the\nrepresentation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c273\n4.5: Former Client Conflicts of Interest\nIt\'s harder to be friends than lovers, and you shouldn\'t try to mix the two. \xe2\x80\x98Cause if you do it and\nyou\xe2\x80\x99re still unhappy, then you know that the problem is you.53\nAttorneys have fiduciary duties not only to their current clients, but also to their former clients.\nWhile some of an attorney\xe2\x80\x99s fiduciary duties apply only to current clients, other duties survive\nthe attorney-client relationship. For example, the duty of care typically applies only to current\nclients, although an attorney may also have a duty of care not to negligently harm the interests\nof former clients. The duty of loyalty applies primarily to current clients, but also applies to\nformer clients in certain circumstances. And the duty of confidentiality applies with equal force to\nboth current and former clients.\nRule 1.9: Duties to Former Clients\na. A lawyer who has formerly represented a client in a matter shall not thereafter represent\nanother person in the same or a substantially related matter in which that person\'s\ninterests are materially adverse to the interests of the former client unless the former\nclient gives informed consent, confirmed in writing.\nb. A lawyer shall not knowingly represent a person in the same or a substantially related\nmatter in which a firm with which the lawyer formerly was associated had previously\nrepresented a client\n1. whose interests are materially adverse to that person; and\n2. about whom the lawyer had acquired information protected by Rules 1.6 and\n1.9(c) that is material to the matter; unless the former client gives informed\nconsent, confirmed in writing.\nc. A lawyer who has formerly represented a client in a matter or whose present or former\nfirm has formerly represented a client in a matter shall not thereafter:\n1. use information relating to the representation to the disadvantage of the former\nclient except as these Rules would permit or require with respect to a client, or\nwhen the information has become generally known; or\n2. reveal information relating to the representation except as these Rules would\npermit or require with respect to a client.\nRule 1.9 Duties To Former Clients, Comment [2]\nThe scope of a \xe2\x80\x9cmatter\xe2\x80\x9d for purposes of this Rule depends on the facts of a particular situation\nor transaction. The lawyer\xe2\x80\x99s involvement in a matter can also be a question of degree. When a\nlawyer has been directly involved in a specific transaction, subsequent representation of other\nclients with materially adverse interests in that transaction clearly is prohibited. On the other\nhand, a lawyer who recurrently handled a type of problem for a former client is not precluded\nfrom later representing another client in a factually distinct problem of that type even though the\n53\n\nLiz Phair, Divorce Song, Exile in Guyville (1993).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c274\nsubsequent representation involves a position adverse to the prior client. Similar considerations\ncan apply to the reassignment of military lawyers between defense and prosecution functions\nwithin the same military jurisdictions. The underlying question is whether the lawyer was so\ninvolved in the matter that the subsequent representation can be justly regarded as a changing\nof sides in the matter in question.\nRule 1.9 Duties To Former Clients, Comment [3]\nMatters are \xe2\x80\x9csubstantially related\xe2\x80\x9d for purposes of this Rule if they involve the same transaction\nor legal dispute or if there otherwise is a substantial risk that confidential factual information as\nwould normally have been obtained in the prior representation would materially advance the\nclient\'s position in the subsequent matter. For example, a lawyer who has represented a\nbusinessperson and learned extensive private financial information about that person may not\nthen represent that person\xe2\x80\x99s spouse in seeking a divorce. Similarly, a lawyer who has previously\nrepresented a client in securing environmental permits to build a shopping center would be\nprecluded from representing neighbors seeking to oppose rezoning of the property on the basis\nof environmental considerations; however, the lawyer would not be precluded, on the grounds of\nsubstantial relationship, from defending a tenant of the completed shopping center in resisting\neviction for nonpayment of rent. Information that has been disclosed to the public or to other\nparties adverse to the former client ordinarily will not be disqualifying. Information acquired in a\nprior representation may have been rendered obsolete by the passage of time, a circumstance\nthat may be relevant in determining whether two representations are substantially related. In the\ncase of an organizational client, general knowledge of the client\xe2\x80\x99s policies and practices\nordinarily will not preclude a subsequent representation; on the other hand, knowledge of\nspecific facts gained in a prior representation that are relevant to the matter in question\nordinarily will preclude such a representation. A former client is not required to reveal the\nconfidential information learned by the lawyer in order to establish a substantial risk that the\nlawyer has confidential information to use in the subsequent matter. A conclusion about the\npossession of such information may be based on the nature of the services the lawyer provided\nthe former client and information that would in ordinary practice be learned by a lawyer\nproviding such services.\nWilson P. Abraham Const. v. Armco Steel Corp., 559 F. 2d 250 (5th Cir. 1977)\nSummary: Stephen D. Susman represented Whitlow Steel in a Texas federal antitrust\nconspiracy action. Armco, Ceco, and Laclede were Whitlow\xe2\x80\x99s co-defendants in that\naction, and were also the defendants in a Louisiana federal antitrust conspiracy action.\nUltimately, they pleaded to all of the charges. William E. Wright filed a civil action against\nWhitlow, Armco, Ceco, and Laclede in Texas, on behalf of Wilson P. Abraham\nConstruction. And then Wright filed an action against Armco, Ceco, and Laclede in\nLouisiana, and hired Susman as co-counsel. Defendant\xe2\x80\x99s in the Louisiana action filed a\nmotion to disqualify Susman because he represented Whitlow in the antitrust conspiracy\naction. The district court denied the motion, and the circuit court vacated and remanded\nfor the district court to determine whether Susman received confidential information.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c275\n\nThis is an appeal from an order of the district court denying the defendants\xe2\x80\x99 motion to disqualify\ncounsel for plaintiff. Though the appeal is not from a final judgment in the traditional sense, we\ntake jurisdiction of it as a collateral matter severable from the underlying suit, and too important\nto be denied review at this time.\nThis dispute centers around exactly what relationship cocounsel for the plaintiff, a Mr. Stephen\nD. Susman, had with the various defendants in this suit in a prior legal matter. The factual\nbackground which leads up to this current dispute is somewhat detailed and complicated. It\nbegins in 1972 when Mr. Susman was associated with the firm of Fulbright and Jaworski in\nHouston, Texas. At that time, he undertook to represent Whitlow Steel Company, Inc., an\nindependent rebar fabricator in Houston. This representation was in connection with a Federal\nGrand Jury investigation of the rebar steel industry in Texas. In August 1973, charges of\nantitrust violations were levied against Whitlow, Armco Steel Corp., The Ceco Corp., and\nLaclede Steel Company. Armco, Ceco, and Laclede are the defendants in the present action\nbefore this court. As counsel for Whitlow, Mr. Susman met on more than one occasion with the\nrepresentatives of Armco, Ceco, and Laclede. At these meetings some efforts allegedly were\nmade to develop a cooperative defense. Exactly what information was exchanged, and the\nimportance of that information, is hotly disputed. Mr. Susman contends that the meetings were\ndisorganized and nothing of substance was ever discussed. The defendants contend that\ndocuments were in fact discussed and disseminated, grand jury witness lists were prepared,\nand reports were given as to exactly what testimony was being presented before the grand jury\nby the various witnesses. The gist of the defendants\xe2\x80\x99 argument is that Mr. Susman was privy to\na substantial amount of confidential information. Mr. Susman flatly denies this.\nAt the same time of the grand jury investigation of the Texas steel industry, a separate grand\njury investigation of the Louisiana steel industry was underway. In April 1974, four mills\n(including Armco, Ceco, and Laclede), an independent fabricator, and five individuals were\nindicted for \xe2\x80\x9cbid rigging.\xe2\x80\x9d All defendants except one pled nolo contendere to the Louisiana\nindictment. After Armco, Ceco, and Laclede were sentenced in Louisiana, they filed motions to\ndismiss the Texas indictment. They argued that because of the close relationship of the Texas\ncase to the Louisiana case, the double jeopardy clause prevented further prosecution. The\nTexas district court refused to rule on the defendants\xe2\x80\x99 motion at that time saying that the motion\npresented such a close factual question that it could not be ruled on until the court heard all the\nevidence at trial. This ruling prompted the defendants to enter pleas in order to avoid trial.\nThe final fact which needs to be brought out to fully understand the controversy before this\nCourt is that some time after the Texas grand jury investigation, a civil suit was filed in Texas\nagainst Whitlow and the defendants in this suit. The counsel for the plaintiff in that suit was a\nMr. William E. Wright. That civil suit is still pending, but at the time it was filed Mr. Susman was\nstill counsel for Whitlow. Mr. Susman, however, denies that anything of substance was done in\nconnection with the defense of that case where he represented Whitlow.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c276\nWe are now in a position to set forth exactly what the present controversy involves. The plaintiff\nin the present suit, Wilson P. Abraham Construction Corporation, has filed a civil suit in\nLouisiana based primarily upon some facts which led to the Louisiana indictments. Counsel for\nthe plaintiff in this suit is William E. Wright, the same person who had been counsel for another\nparty in the Texas civil suit in which Mr. Susman represented Whitlow Steel Company. The\ndefendants allege that the complaint in this case is virtually identical to the Texas complaint in\nwhich they were also party defendants. In any event, Mr. Wright has sought to engage Mr.\nSusman as co-counsel in this case. The defendants are challenging this alleging basically that\nMr. Susman has a conflict of interest because of his previous relationship with them when he\nrepresented Whitlow Steel Company.\nThe law in this Circuit is fairly straightforward. This Court has recently reaffirmed with regards to\nattorney disqualification that a former client seeking to disqualify an attorney who appears on\nbehalf of his adversary, need only to show that the matters embraced within the pending suit are\nsubstantially related to the matters or cause of action wherein the attorney previously\nrepresented him. This rule rests upon the presumption that confidences potentially damaging to\nthe client have been disclosed to the attorney during the former period of representation. The\nCourt may not even inquire as to whether such disclosures were in fact made or whether the\nattorney in fact is likely to use the damaging disclosures to the detriment of his former client.\nThe inquiry is limited solely to whether the matters of the present suit are substantially related to\nmatters of the prior representation, and this is because this Court recognizes that in order to aid\nthe frank exchange between attorney and client, it is necessary to preclude even a possibility\nthat information given in confidence by a former client will ever be used without that client\'s\nconsent. The law in this Circuit is, of course, little more than a reinforcement of the Code of\nProfessional Responsibility, Ethical Considerations, and Disciplinary Rules, promulgated by the\nAmerican Bar Association and adopted by the Supreme Court of Louisiana effective July 1,\n1970.\nThe case before us, however, presents somewhat of a twist to the usual attorney-client\ncontroversy. It is not a former client of Mr. Susman who seeks to disqualify him, but rather codefendants of a former client. The defendants here contend that in a case alleging conspiracy,\nsuch as the case at bar, the defendants have a right to consult together about the case, and that\nall information derived by any of the counsel from such consultation is necessarily privileged.\nThe defendants persuasively argue that in a joint defense of a conspiracy charge, the counsel of\neach defendant is, in effect, the counsel of all for the purposes of invoking the attorney-client\nprivilege in order to shield mutually shared confidences. We agree, and hold that when\ninformation is exchanged between various co-defendants and their attorneys that this exchange\nis not made for the purpose of allowing unlimited publication and use, but rather, the exchange\nis made for the limited purpose of assisting in their common cause. In such a situation, an\nattorney who is the recipient of such information breaches his fiduciary duty if he later, in his\nrepresentation of another client, is able to use this information to the detriment of one of the codefendants. Just as an attorney would not be allowed to proceed against his former client in a\ncause of action substantially related to the matters in which he previously represented that\nclient, an attorney should also not be allowed to proceed against a co-defendant of a former\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c277\nclient wherein the subject matter of the present controversy is substantially related to the\nmatters in which the attorney was previously involved, and wherein confidential exchanges of\ninformation took place between the various co-defendants in preparation of a joint defense.\nHaving stated the bare facts of this rather complicated dispute, and having set forth the law, we\nunfortunately are unable to presently resolve the controversy. Exactly what information was\nexchanged between Mr. Susman when he represented Whitlow Steel Company and worked\nwith counsel for the various defendants is greatly contested. Here there is no presumption that\nconfidential information was exchanged as there was no direct attorney-client relationship. Mr.\nSusman should not be disqualified unless the trial court should determine that Mr. Susman was\nactually privy to confidential information. The parties also have a completely different version as\nto the similarity of the Texas grand jury investigation and the Louisiana investigation, and\nwhether or not these investigations are substantially related to the present case.\nUnder these circumstances it is impossible for us to resolve this matter without some specific\nfactual findings by the trial judge as to the content of the information which was exchanged and\nwhether or not the present controversy is substantially related to the prior one. Nowhere in our\nsearch of the record were we able to find any findings made by the trial judge before he denied\nthe defendants\xe2\x80\x99 motion to disqualify Mr. Susman. Consequently, we set aside the district court\norder denying the defendants\xe2\x80\x99 motion for disqualification and remand for the entry of formal\nfindings of fact and conclusions of law dealing with these issues.\nDoe v. A Corporation, 709 F. 2d 1043 (5th Cir. 1983)\nSummary: Attorney John Doe was in-house counsel to A Corporation. Among other\nthings, Doe advised A on its employee benefits. In 1980, Doe quit and filed an ERISA\nclass action against A, alleging multiple claims, and seeking to represent a class of\nplaintiffs with similar claims. A filed a motion to dismiss Doe\xe2\x80\x99s action, and Doe withdrew\nas class counsel. The district court granted summary judgment to A, because Doe had\nreceived confidential information about A. The circuit court held that Doe could not\nrepresent the class or serve as class representative, because it would violate his duty of\nconfidentiality to A. But it held that Doe could pursue his own claim against A.\nALVIN B. RUBIN, Circuit Judge:\nA lawyer employed as house counsel for a corporation rendered legal advice concerning\nemployee benefits to the corporation and to the administrators of its benefit plan. After he\nresigned from employment with the corporation, he sued for benefits allegedly due him under\nthe corporation\'s pension and life insurance plans. He also sought to represent a class of other\nemployees allegedly entitled to those benefits. We affirm the district court\xe2\x80\x99s judgment holding\nthat he is barred by his ethical obligations as a lawyer from prosecuting such litigation as the\nclass representative of other employees. However, we hold that he may prosecute an action in\nhis own behalf and reverse that part of the judgment dismissing his personal claims.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c278\nI.\nThe plaintiff, who is identified as John Doe,54 was employed in the legal department of A\nCorporation from 1975 to 1980. In his professional capacity as a lawyer, he consulted with and\nadvised both A Corporation and the administrators of its Benefit Plan concerning legal questions\nabout employee benefits, including those arising in the course of the administration of the\nBenefit Plan and those involving A Corporation\xe2\x80\x99s group life insurance policy and other benefits.\nHe made daily decisions concerning the rights of individual employees and the acceptability of\ntheir beneficiary designations, gave the plan administrators legal advice, and worked with other\nlawyers in drafting plan provisions. These duties continued until Doe was transferred to A\nCorporation\xe2\x80\x99s litigation section in April 1979. He resigned in March 1980.\nEleven months later Doe filed suit against A Corporation and X Insurance Company, asserting a\nclaim arising under the Employee Retirement Income Security Act of 1974, as well as pendent\nclaims arising under state law. Doe alleged that X Insurance Company had issued a group\npolicy insuring the lives of A Corporation\'s employees. He alleged that premiums were paid on a\ncontributory basis, partly by A Corporation and partly by its employees. As a result of its\nfavorable experience, Doe claimed, X Insurance Company had paid dividends to A Corporation,\nwhich A Corporation retained without disclosing their receipt to its employees or to \xe2\x80\x9cthe\nappropriate federal and state agencies.\xe2\x80\x9d Doe also contended that he was improperly denied\nconversion of his policy to a \xe2\x80\x9ccomparable term life\xe2\x80\x9d policy upon termination of his employment\nand was offered only the right to convert to whole life insurance. Doe conceded that, as part of\nhis legal duties for A Corporation, he had advised the corporation whether it had a duty to\ndisclose its receipt of dividends to plan participants.\nIn a separate suit against A Corporation and its Benefit Plan, Doe contended that his pension\nbenefits should have been vested when he resigned. This claim was based on a provision in the\nplan, required by ERISA, vesting plan benefits in an employee who has been employed for five\nyears. Doe had completed four years and 1600 hours of employment and argued that this was\nlegally sufficient for vesting under the plan and the applicable federal statute.\nDoe signed the pleadings in each suit as co-counsel. In each he sought, in addition to\nprosecuting his own claim, to appear as representative of a class of employees having like\nclaims. In each he sought broad relief for the members of the class, including equitable relief\nand damages, a \xe2\x80\x9cspecial award\xe2\x80\x9d for himself of one-third of any recovery, and an attorney\'s fee\nfor himself and his co-counsel based on a percentage of the class recovery.\n\n54\n\nTo prevent identification of the company and the possible disclosure of confidential information\nconcerning its affairs, the district court granted the defendant corporation\'s motion to seal the record;\nrequire the suit to be prosecuted without revealing the name of either the lawyer or the corporation; and\nenjoin Doe and his co-counsel from pursuing any actions arising out of the facts on which his suits were\nbased, communicating with other persons to induce them to bring a similar action, and disclosing or using\nany information Doe gained during his employment by the corporation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c279\nA Corporation filed a motion to dismiss, to enjoin Doe and his co-counsel from prosecuting the\nsuit, and to seal the record on the ground that Doe was barred from initiating a lawsuit because\nits prosecution would result in his violating the attorney-client privilege and in his disclosing\nconfidential information. Benefit Plan, represented by the same counsel as A Corporation,\njoined in the motion. Doe withdrew as co-counsel for the class but continued to assert his right\nto appear both as an individual plaintiff and as a representative of the plaintiff class.\nThe district court treated the motion as one for summary judgment. It granted the motion,\nholding that Doe was disqualified to sue either A Corporation or Benefit Plan because they were\nhis former clients. Relying on an irrebuttable presumption that the substantial relationship\nbetween Doe\xe2\x80\x99s duties for A Corporation and the issues in the suit would lead Doe to use his\nformer clients\xe2\x80\x99 confidential information to their detriment in prosecuting the action, the court\ndismissed both suits with prejudice to Doe but without prejudice to a suit by any present or\nfuture employee of A Corporation.\nA client is usually entitled to counsel of his choice. But the lawyer may be forbidden by ethical\nstrictures to accept tendered employment. Because Doe has now withdrawn as counsel, we\nmust go beyond the question whether he would be barred from acting as a lawyer for others\nwhose interests conflict with those of his former client and consider how those ethical standards\nconstrain his conduct in representing others as class representative, albeit not lawyer, and in\nasserting his own claims.\nII.\nThe attorney-client privilege is evidentiary. A client may invoke it to prevent his lawyer from\nrevealing communications made in confidence to the lawyer while acting in the capacity of\nprofessional legal adviser for the purpose of obtaining legal advice. However, during the course\nof representing a client, a lawyer may receive information that is not shielded by the privilege\nbut is considered confidential by the client. He may, for example, receive information from some\nsource other than the client or information imparted for a purpose other than obtaining legal\nadvice.\nSome of the information Doe acquired about A Corporation\xe2\x80\x99s affairs was protected by the\nattorney-client privilege. However, he apparently gained other information that was not\nprivileged. For example, he apparently saw letters and other documents that originated with X\nInsurance Company and received and answered questions from other A Corporation employees\nabout their rights.\nThe Code of Professional Responsibility seeks to safeguard both the attorney-client privilege\nand other confidential information by restricting a lawyer\'s ability to accept employment that\nwould threaten disclosure of either. Canon 4 deals directly with the matter: \xe2\x80\x9cA Lawyer Should\nPreserve the Confidences and Secrets of a Client.\xe2\x80\x9d But other principles are also applicable, for\nCanon 9 states, \xe2\x80\x9cA Lawyer Should Avoid Even the Appearance of Professional Impropriety.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c280\nThese provisions protect not only against disclosure of privileged communications but also\nagainst the revelation of confidential information that is not privileged.\nEthical Consideration 4-4 states: \xe2\x80\x9cThe attorney-client privilege is more limited than the ethical\nobligation of a lawyer to guard the confidences and secrets of his client. This ethical precept,\nunlike the evidentiary privilege, exists without regard to the nature or source of information or\nthe fact that others share the knowledge.\xe2\x80\x9d The ethical duty extends to shielding the\nconfidentiality of all information acquired in the course of representing a client, preventing the\nuse of any such knowledge to the client\'s disadvantage. \xe2\x80\x9cThe use of the word \xe2\x80\x98information\xe2\x80\x99 in\nthese Ethical Considerations as opposed to \xe2\x80\x98confidence\xe2\x80\x99 or \xe2\x80\x98secret\xe2\x80\x99 is particularly revealing of\nthe drafters\xe2\x80\x99 intent to protect all knowledge acquired from a client without regard to whether\nsomeone else may be privy to it.\xe2\x80\x9d\nAdherence to Canon 4 requires that a lawyer be disqualified from representing a party to\nlitigation if the adversary party can show that matters in the pending suit are substantially\nrelated to matters in which the attorney previously represented the adversary. A substantial\nrelationship between issues in a lawsuit and a lawyer\'s earlier work for an adversary may also\nserve as the basis for disqualification under Canon 9.\nIf a lawyer seeks to act adversely to his former client in a matter that might involve disclosure of\ninformation acquired during the prior employment, the former client need not prove that the\nlawyer has used or is likely to use such information in order to disqualify the lawyer representing\nthe party suing him. There is a conclusive and irrebuttable presumption that permitting the\nlawyer who has switched loyalties to represent the adversary of a former client in substantially\nrelated litigation will lead to disclosure and misuse of confidential information obtained during\nthe previous representation.\nThe applicability of Canon 9 turns on whether the moving party has shown that there is a\nreasonable possibility of the occurrence of some specifically identifiable improper conduct and\nwhether the likelihood of public suspicion outweighs the social interest in the lawyer\xe2\x80\x99s continued\nparticipation in the case.\nIf Doe were still attempting to represent the class as its lawyer, he would have a patent conflict\nof interest.\nIt must be remembered that the attorney in such situations as this does not have the\nshelter enjoyed by a defendant whose adversary must meet a burden of proof. Where\nconflict of interest or abuse of professional confidence is asserted, the right of an\nattorney freely to practice his profession must, in the public interest, give way in cases of\ndoubt.\nThe standard of ethical conduct not only disqualifies Doe from representing a class as lawyer\nbut also bars him from disclosing information he received from A Corporation to some other\nlawyer. A lawyer is not merely a panderer who is to do for a client anything that the client would\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c281\nlike to do himself had he but the lawyer\xe2\x80\x99s knowledge. As a member of a profession that enjoys\nthe exclusive license to engage in the practice of law, he is required to deny requests that would\nviolate the ethical tenets of his profession even at the sacrifice of self-interest.\nThe responsibilities of a class representative are not identical to those of the lawyer for the\nclass. The class representative need not be a member of the bar and is not subject to the\nprofession\xe2\x80\x99s ethical constraints. But a representative owes duties to the class that require him to\nexert the utmost diligence on behalf of all of its members. To allow Doe to act as class\nrepresentative would create a tension between his obligation as representative to do all he can\nto vindicate the rights of the class members and his personal ethical duty to protect A\nCorporation\xe2\x80\x99s secrets. A lawyer may not, simply by assuming a new identity, escape the\nstrictures that would govern his conduct were he representing the class as counsel. Doe\ncontends that he must be permitted to represent the class because he has yet another identity\nas a fiduciary for Benefit Plan and his fellow employees of A Corporation. Although the attorneyclient privilege may be inapplicable when either the lawyer or the client stands in a fiduciary\nrelationship to the party seeking disclosure, Doe simply was not such a fiduciary. He was a\nlawyer for and representative of A\xe2\x80\x99s corporate interest.\nIf there are meritorious causes of action against A Corporation, someone other than Doe can\nand must file the suit as class representative just as someone other than he must act as class\ncounsel. Obviously, Doe may not divulge information that would enable another to volunteer as\nclass representative. If no other class member ever learns of the claim, it may go forever\nunvindicated. The lawyer\xe2\x80\x99s duty to his client creates the possibility that his silence will permit\nvalid claims to lie unasserted.\nIII.\nThe assertion of ethical barriers to Doe\xe2\x80\x99s attempt to vindicate his personal claims creates a\nconflict with another fundamental policy: the availability of a legal forum for the adjudication of\nrights. The Supreme Court has recognized that, in some circumstances, access to courts is\nprotected by the due process clause. While the principle does not give any broad \xe2\x80\x9cright\xe2\x80\x9d of\naccess to federal court, the courtroom door should not lightly be barred to a person who has a\ntenable legal claim.\nThe conflict between protection of the client\xe2\x80\x99s need for confidentiality and the lawyer\xe2\x80\x99s\nopportunity to assert claims against that client cannot be resolved on the basis that one enjoys\nuniversal primacy over the other. The Code makes confidentiality the general principle but\nrecognizes exceptions to the prohibition against divulging even a client\'s secrets. Thus, a lawyer\nmay reveal confidential information and secrets when it is necessary for him to do so to prevent\nthe client from committing a crime, to collect a fee, or to defend himself against an accusation of\nwrongful conduct. The rationale for the last of these exceptions is: \xe2\x80\x9cIt would be a manifest\ninjustice to allow the client to take advantage of the rule of exclusion as to professional\nconfidence to the prejudice of his attorney, or that it should be carried to the extent of depriving\nthe attorney of the means of obtaining or defending his own rights.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c282\n\nIn none of the cases relied upon by A Corporation has a lawyer been prohibited from asserting a\npersonal cause of action. In Richardson v. Hamilton International Corp., the plaintiff was an\nattorney who held stock in the defendant corporation. He had represented the corporation in his\nprivate practice before filing the lawsuit. He filed a shareholder\xe2\x80\x99s derivative action as a class\naction. The court disqualified him from appearing as a lawyer in the action and prohibited him\nfrom maintaining the suit while recognizing that another shareholder could maintain the action.\nBecause a derivative suit is brought on behalf of the corporation, not the suing individual, the\nlawyer was not seeking to assert a cause of action to vindicate his personal rights.\nMeyerhofer v. Empire Fire & Marine Insurance Co. contains language arguably to the contrary.\nThe court affirmed a district court decision \xe2\x80\x9cto the extent that the orders appealed from prohibit\nthe attorney from acting as a party or as an attorney for a party.\xe2\x80\x9d Yet the court had earlier in its\nopinion stated: \xe2\x80\x9cThe attorney never sought to \xe2\x80\x98prosecute litigation,\xe2\x80\x99 either as a party or as\ncounsel for a plaintiff party.\xe2\x80\x9d\nThe distinction between what is forbidden to the lawyer appearing as an attorney-at-law and\nwhat is permitted an individual who is a lawyer but asserts only his personal rights was drawn in\nHull v. Celanese. The court affirmed the disqualification of a law firm seeking to represent a\npotential intervenor in a sex discrimination suit. The intervenor was herself a lawyer and an\nemployee of the defendant; she had worked on the defense of the sex discrimination suit in\nwhich she sought to intervene. The court made clear that: \xe2\x80\x9cThis decision should not be read to\nimply that the lawyer cannot pursue her claim of employment discrimination based on sex.\xe2\x80\x9d\nIn an attempt to demonstrate that Doe has been guilty of unethical conduct that should be\nadded to the balance against him, A Corporation has brought to our attention material of record\nindicating impropriety. Before filing suit, Doe threatened A Corporation with litigation on behalf of\na purported class if it did not meet demands that included the payment to him of a \xe2\x80\x9ccontingent\nattorney fee\xe2\x80\x9d of 10% of a fund he described as \xe2\x80\x9cmillions of dollars.\xe2\x80\x9d From his actions thereafter,\nsomething other than a disinterested effort to vindicate the rights of a group of wronged\nemployees might be inferred. When he filed suit, he did not seek only redress for his own claims\nand for those members of the classes he wished to represent: in the suit involving the group\ninsurance, he demanded payment to himself, personally, of a \xe2\x80\x9cspecial award\xe2\x80\x9d of one-third of the\n\xe2\x80\x9cclass\xe2\x80\x9d recovery, which he asserted to be in the \xe2\x80\x9cmillions,\xe2\x80\x9d as well as treble damages, and he\nsought \xe2\x80\x9cat least $300,000\xe2\x80\x9d as personal recompense in the suit against the Benefit Plan. In\naddition, he signed the complaints as co-counsel, and sought to be awarded an attorneys\xe2\x80\x99 fee in\nboth actions, the fee in the group insurance suit to be based on a \xe2\x80\x9cpercentage\xe2\x80\x9d of the \xe2\x80\x9cclass\xe2\x80\x9d\nrecovery. If, indeed, it develops after the facts are fully explored that Doe attempted either to\nblackmail or to mulct the corporation, we do not condone that conduct. If he has violated the\nCode of Professional Responsibility, disciplinary charges should be brought against him. The\ndistrict court did not, however, dismiss Doe\xe2\x80\x99s personal claim because of his misconduct. The\ndistrict judge granted summary judgment on the basis that Doe\xe2\x80\x99s prior representation of A\nCorporation was a per se bar. A lawyer, however, does not forfeit his rights simply because to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c283\nprove them he must utilize confidential information. Nor does the client gain the right to cheat\nthe lawyer by imparting confidences to him.\nThe sole interest A Corporation can assert, other than defeating Doe\'s claim, is preservation of\nconfidentiality for the secrets Doe learned while in its employment. The corporation\xe2\x80\x99s interest in\nconfidentiality, however, can be at least partially protected by anonymity. There is no social\ninterest in allowing the corporation to conceal wrongdoing, if in fact any has occurred. Nor is\nthere any social interest in allowing it to deny Doe pension rights or insurance benefits if they\nare legally due him. But that would be the effect of our refusing to allow Doe to prosecute his\nindividual lawsuit.\nIV.\nDoe, in turn, seeks to disqualify counsel for the defendants on the basis that they represent both\nA Corporation and the Benefit Plan, whose interests are allegedly conflicting. He relies on\nDisciplinary Rule 5-105(B), which provides: \xe2\x80\x9cA lawyer shall not continue multiple employment if\nthe exercise of his independent professional judgment in behalf of a client will be or is likely to\nbe adversely affected by his representation of another client, or if it would be likely to involve\nhim in representing differing interests, except to the extent permitted under DR 5-105(C).\xe2\x80\x9d\nCounsel representing both A Corporation and Benefit Plan assert that they have made a full\ndisclosure to their respective clients and that both have consented to the joint representation,\nwaiving any possible claim of conflict of interest which may arise. A potential or even real\nconflict of interest may, of course, be waived, even in criminal cases. At the moment, A\nCorporation and Benefit Plan share an important common interest in seeking to prevent misuse\nof their confidences by their former lawyer and employee. While their interests may at some\ntime diverge, it is for them, once fully informed, to determine whether their lawyer can be faithful\nto both of their interests.\nAccordingly, we AFFIRM as much of the judgment as dismisses the class action claims in both\nsuits without prejudice, places the case records under seal, and enjoins Doe and co-counsel\nfrom communicating with other persons to induce them to file suit and from disclosing any\nconfidential information Doe gained during his employment by A Corporation. We REVERSE\nthe judgment insofar as it dismisses Doe\xe2\x80\x99s personal claim with prejudice and REMAND for\nfurther proceedings consistent with this opinion. Each party shall bear its own costs.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c284\n\nBrennan\xe2\x80\x99s, Inc. v. Brennan\xe2\x80\x99s Restaurants, Inc., 590 F. 2d 168 (5th Cir. 1979)\nSummary: The Brennan family owned Brennan\xe2\x80\x99s, Inc. in New Orleans and Brennan\xe2\x80\x99s\nRestaurants, Inc., which operated other restaurants. Edward F. Wegmann was general\ncounsel for all of the family businesses, and helped them register trademarks. After a\ndispute, the family divided the enterprise, but did not determine rights to the trademarks.\nBrennan\xe2\x80\x99s Restaurants filed a trademark infringement action against Brennan\xe2\x80\x99s, which\nhired Wegmann to represent it. Wegmann hired Arnold Sprung, a trademark specialist,\nas co-counsel. Brennan\xe2\x80\x99s Restaurants filed a motion to disqualify Wegmann and Sprung,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c285\nwhich the district court grant. The circuit court affirmed the disqualification of Wegmann,\nbased on the appearance of impropriety, but vacated and remanded the disqualification\nof Sprung, to determine whether he actually learned any confidential information from\nWegmann.\nTJOFLAT, Circuit Judge:\nThis is an action for trademark infringement and unfair competition. This appeal, however,\nconcerns the disqualification of attorneys. The district court barred the appellants\xe2\x80\x99 attorneys\nfrom further representing them on grounds of conflict of interest. The correctness of this order is\nthe only issue before us.\nI\nThe underlying dispute in this case arises out of the business affairs of the Brennan family of\nNew Orleans, Louisiana, who have been in the restaurant business for many years. All of the\ncorporate parties are owned and closely held by various members of the Brennan family.\nAppellee Brennan\xe2\x80\x99s, Inc., the plaintiff below, owns and operates Brennan\xe2\x80\x99s restaurant at 417\nRoyal Street in New Orleans. The corporate appellants own and operate other restaurants in\nLouisiana, Texas, and Georgia. There has been no trial as yet, but a review of the facts leading\nto the present suit, as disclosed by the pleadings and affidavits, is necessary to a decision of\nthis appeal. For convenience, the parties will be referred to in the capacities in which they\nappear in the court below.\nPrior to 1974, all the members of the Brennan family were stockholders and directors of plaintiff,\nand some of them were stockholders and directors of the corporate defendants. All the\ncorporations were independent legal entities in the sense that none held any of the stock of\nanother, but they were all owned by members of the Brennan family and had interlocking boards\nof directors. In 1971, Edward F. Wegmann became general counsel for the family businesses,\nand his retainer was paid pro rata by all the corporations. He continued this joint representation\nuntil November 1973.\nAs part of his services, Mr. Wegmann, in close cooperation with trademark counsel in\nWashington, D.C., prosecuted applications for the federal registration of three service marks:\n\xe2\x80\x9cBrennan\xe2\x80\x99s,\xe2\x80\x9d \xe2\x80\x9cBreakfast at Brennan\xe2\x80\x99s,\xe2\x80\x9d and a distinctive rooster design. A registration for the\nrooster design was issued in February 1972, but the applications for the other two marks were\ninitially denied on the ground that they were primarily a surname. On the advice of Washington\ntrademark counsel, Mr. Wegmann collected data supporting a demonstration that the marks had\nacquired a secondary meaning, and the applications were amended to include this material.\nRegistrations were subsequently issued in plaintiff\'s name in March 1973. These registered\nservice marks are the subject of this lawsuit.\nLater in 1973 a dispute developed within the Brennan family over the operation and\nmanagement of the family businesses. This dispute was resolved in November 1974 by dividing\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c286\nthe corporations\xe2\x80\x99 stock between the two opposing family groups. Plaintiff became 100% owned\nby one group and the corporate defendants became 100% owned by the second group,\ncomposed of the individual defendants. Mr. Wegmann elected to continue to represent\ndefendants and severed his connections with plaintiff and its shareholders.\nAt no time during the negotiations which culminated in the November 1974 settlement was there\nany discussion of who would have the right to use the registered service marks. Both sides\nclaimed ownership of the marks and continued to use them after the settlement. Attempts to\nnegotiate a license or concurrent registration were unsuccessful. Plaintiff filed this suit for\ntrademark infringement and unfair competition on May 21, 1976. In their answer and\ncounterclaim defendants alleged that the marks were registered in plaintiff\xe2\x80\x99s name for\nconvenience only, and, \xe2\x80\x9cin truth and actuality, the applications were filed and the registrations\nissued for the benefit and ownership of all of the Brennan family restaurants, including the\ncorporate defendants.\xe2\x80\x9d Defendants also alleged that the marks and registrations are invalid.\nUpon the filing of this suit, Mr. Wegmann, on behalf of the defendants, retained the services of\nArnold Sprung, a New York patent and trademark attorney, to assist him in the defense of the\ncase. On October 22, 1976, plaintiff moved for the disqualification of both attorneys: Mr.\nWegmann on the ground that his present representation was at odds with the interests of\nplaintiff, his former client, and Mr. Sprung by imputation of Mr. Wegmann\xe2\x80\x99s conflict. After a\nhearing, the district court granted the motion. It found that the subject matter of the present suit\nis substantially related to matters in which Mr. Wegmann formerly represented plaintiff, and to\nallow him now to represent an interest adverse to his former client creates the appearance of\nimpropriety. It also found that \xe2\x80\x9cthe close working relationship which has been shown to exist\nbetween Mr. Wegmann and Mr. Sprung creates a significant likelihood that Mr. Sprung would\nhave had access to or been informed of confidential disclosures made to Mr. Wegmann by his\nformer client.\xe2\x80\x9d\nII\nWe first consider the disqualification of Mr. Wegmann.\nDefendants argue that the district court failed to consider that in his prior representation of\nplaintiff, Mr. Wegmann also represented defendants. This fact of joint representation is crucial,\nthey assert, since no confidences can arise as between joint clients. Hence, the argument goes,\nMr. Wegmann violates no ethical duty in his present representation.\nWe have not addressed this precise question before. In Wilson P. Abraham Construction Corp.\nv. Armco Steel Corp., we reaffirmed the standard that \xe2\x80\x9ca former client seeking to disqualify an\nattorney who appears on behalf of his adversary, need only to show that the matters embraced\nwithin the pending suit are substantially related to the matters or cause of action wherein the\nattorney previously represented him,\xe2\x80\x9d but we acknowledged that \xe2\x80\x9cthis rule rests upon the\npresumption that confidences potentially damaging to the client have been disclosed to the\nattorney during the former period of representation.\xe2\x80\x9d Defendants contend that this presumption\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c287\ncannot apply in this case. This argument, in our view, interprets too narrowly an attorney\xe2\x80\x99s duty\nto \xe2\x80\x9cpreserve the confidences and secrets of a client.\xe2\x80\x9d The fundamental flaw in defendants\xe2\x80\x99\nposition is a confusion of the attorney-client evidentiary privilege with the ethical duty to\npreserve a client\xe2\x80\x99s confidences. Assuming the prior representation was joint, defendants are\nquite correct that neither of the parties to this suit can assert the attorney-client privilege against\nthe other as to matters comprehended by that joint representation. But the ethical duty is\nbroader than the evidentiary privilege: \xe2\x80\x9cThis ethical precept, unlike the evidentiary privilege,\nexists without regard to the nature or source of information or the fact that others share the\nknowledge.\xe2\x80\x9d \xe2\x80\x9cA lawyer should not use information acquired in the course of the representation of\na client to the disadvantage of the client.\xe2\x80\x9d The use of the word \xe2\x80\x9cinformation\xe2\x80\x9d in these Ethical\nConsiderations as opposed to \xe2\x80\x9cconfidence\xe2\x80\x9d or \xe2\x80\x9csecret\xe2\x80\x9d is particularly revealing of the drafters\xe2\x80\x99\nintent to protect all knowledge acquired from a client, since the latter two are defined terms.\nInformation so acquired is sheltered from use by the attorney against his client by virtue of the\nexistence of the attorney-client relationship. This is true without regard to whether someone else\nmay be privy to it. The obligation of an attorney not to misuse information acquired in the course\nof representation serves to vindicate the trust and reliance that clients place in their attorneys. A\nclient would feel wronged if an opponent prevailed against him with the aid of an attorney who\nformerly represented the client in the same matter. As the court recognized in E.F. Hutton & Co.\nv. Brown, this would undermine public confidence in the legal system as a means for\nadjudicating disputes. We recognize that this concern implicates the principle embodied in\nCanon 9 that attorneys \xe2\x80\x9cshould avoid even the appearance of professional impropriety.\xe2\x80\x9d We\nhave said that under this canon there must be a showing of a reasonable possibility that some\nspecifically identifiable impropriety in fact occurred and that the likelihood of public suspicion\nmust be weighed against the interest in retaining counsel of one\xe2\x80\x99s choice. The conflict of interest\nis readily apparent here, however, and we think that the balance weighs in favor of\ndisqualification. The need to safeguard the attorney-client relationship is not diminished by the\nfact that the prior representation was joint with the attorney\xe2\x80\x99s present client. Since the district\ncourt\'s findings of prior representation and substantial relationship are not disputed, we affirm\nthe disqualification of Mr. Wegmann.\nIII\nWhether Mr. Sprung should be disqualified presents a more difficult case. He has never had an\nattorney-client relationship with plaintiff; the district court disqualified him by imputation of Mr.\nWegmann\'s conflict. Up to this point we have accepted, for the sake of argument, defendants\xe2\x80\x99\nassertion that they were formerly joint clients with plaintiff of Mr. Wegmann. There is no dispute\nthat plaintiff and defendants were previously represented by Mr. Wegmann simultaneously, but\nplaintiff maintains that, at least with respect to the registration of the service marks, Mr.\nWegmann was representing plaintiff alone. The district court made no findings on the issue.\nBecause we think that the disqualification of Mr. Sprung may turn on this fact and others not\nfound by the court below, we vacate that part of the court\'s order relating to Mr. Sprung and\nremand the cause for further proceedings. For the guidance of the court on remand, we set forth\nour view of the applicable ethical standards.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c288\nIf the court finds that Mr. Wegmann previously represented plaintiff and defendants jointly, we\ncan see no reason why Mr. Sprung should be disqualified. As between joint clients there can be\nno \xe2\x80\x9cconfidences\xe2\x80\x9d or \xe2\x80\x9csecrets\xe2\x80\x9d unless one client manifests a contrary intent. Thus, Mr. Sprung\ncould not have learned anything from Mr. Wegmann that defendants did not already know or\nhave a right to know. Plaintiff argues that this permits the defendants indirectly to gain the\nbenefit of Mr. Wegmann\xe2\x80\x99s services when they could not do so directly. If the representation was\njoint, however, defendants possess no information as to which plaintiff could have had any\nexpectation of privacy in relation to the defendants. The only remaining ground for\ndisqualification then would be an appearance of impropriety. In Part II of this opinion, we\ndecided there is such an appearance when an attorney represents an interest adverse to that of\na former client in a matter substantially related to the subject of the prior representation. Mr.\nSprung has never been plaintiff\xe2\x80\x99s counsel, however; he is only the cocounsel of one who was.\nWe are enjoined not to give Canon 9 an overly broad application and to maintain \xe2\x80\x9ca reasonable\nbalance between the need to ensure ethical conduct on the part of lawyers and other social\ninterests, which include the litigant\'s right to freely chosen counsel.\xe2\x80\x9d In the case of Mr. Sprung,\nwe think the balance weighs against disqualification. Assuming that Mr. Wegmann\xe2\x80\x99s prior\nretainer was joint, plaintiff has suffered no actual prejudice from communications between Mr.\nWegmann and Mr. Sprung. There is a possibility that Mr. Sprung has obtained informally\ninformation that he would otherwise have had to seek through discovery. The Second Circuit\nhas indicated that circumvention of the discovery rules is grounds for automatic disqualification.\nThis seems to us an overly rigid approach. In a disqualification case, it is well to remember that\n\xe2\x80\x9cin deciding questions of professional ethics men of good will often differ in their conclusions.\xe2\x80\x9d\nAs the Second Circuit itself has said:\nWhen dealing with ethical principles, we cannot paint with broad strokes. The lines are\nfine and must be so marked. Guideposts can be established when virgin ground is being\nexplored, and the conclusion in a particular case can be reached only after painstaking\nanalysis of the facts and precise application of precedent.\nUnder the peculiar facts of this case, we do not think there would be such an appearance of\nimpropriety in Mr. Sprung\'s continued representation of defendants as to warrant his\ndisqualification.\nIf the district court finds that Mr. Wegmann did not previously represent these parties jointly, it\ndoes not necessarily follow that Mr. Sprung should be disqualified. The courts have abjured a\nper se approach to the disqualification of cocounsel of disqualified counsel. In the absence of an\nattorney-client relationship between Mr. Sprung and plaintiff, a presumption of disclosure of\nconfidences is inappropriate. Mr. Sprung should not be disqualified unless he has learned from\nMr. Wegmann information the plaintiff had intended not be disclosed to the defendants.\nMarcum v. Scorsone, 457 S.W.3d 710 (Ky. 2015)\nSummary: Appellants Marcum, Conway, Foster Northrop, and Cheney sought a writ of\nprohibition in the Court of Appeals to bar enforcement of an order disqualifying their\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c289\nlawyers, the firm Miller, Griffin & Marks, PSC (MGM), in a shareholder-derivative suit\nbrought by Paul R. Plante, Jr., where the order was granted based on a finding of an\n\xe2\x80\x9cappearance of impropriety.\xe2\x80\x9d The court held that MGM\xe2\x80\x99s representation of two\nshareholders and officers of the company while advising the company\xe2\x80\x99s board of\ndirectors did not create an actual conflict of interest. Moreover, the mere appearance of\nany resulting impropriety was not sufficient to merit MGM\xe2\x80\x99s disqualification.\nOPINION OF THE COURT BY Justice, NOBLE.\nAppellants, Frank D. Marcum, James D. Conway, Foster Northrop, and Mark Cheney, sought a\nwrit of prohibition in the Court of Appeals to bar enforcement of an order disqualifying their\nlawyers, the firm Miller, Griffin, & Marks, PSC (MGM), in a shareholder-derivative suit brought\nby the Real Party in Interest, Paul R. Plante, Jr., where the order was granted based on a\nfinding of an \xe2\x80\x9cappearance of impropriety.\xe2\x80\x9d The Court of Appeals denied the writ, concluding that\none of the prerequisites for a writ, specifically a showing of irreparable harm, had not been\nmade. This Court concludes that the Appellants have adequately shown the prerequisites for\nthe availability of a writ and that the trial court applied an incorrect legal standard (\xe2\x80\x9can\nappearance of impropriety\xe2\x80\x9d) in disqualifying the firm. Moreover, disqualification was improper\nunder the correct standard (a showing of actual conflict), at least based on the current record\nand findings of the trial court. Thus, this Court reverses and remands for entry of the requested\nwrit.\nI. Background\nThe shareholder-derivative suit underlying this writ action gives an excellent corporate\nrepresentation of the infamous \xe2\x80\x9cGordian knot.\xe2\x80\x9d The Real Party in Interest (Plante) and the\nAppellants (Marcum, Conway, Northrop and Cheney), along with Bill Seanor, began their\njourney as the shareholders of Arthrodynamic Technologies Animal Health Division, Inc. (ADT),\na Kentucky corporation that sells veterinary products. Originally, Marcum and Conway each\nowned 37.5% of the shares; Cheney owned 10%; and Northrop, Plante, and Seanor each\nowned 5%. All six shareholders were originally on the board of directors. Over time, disputes\namong the shareholders led to changes in the officers and membership of the corporate board.\nIn late 2010, Plante and Seanor seized control of the board, apparently having convinced a\nmajority of the directors that Marcum and Conway had acted improperly, and caused Marcum\nand Conway to be removed from the board. Plante and Seanor were installed as the secretary\nand president respectively. In February 2011, Conway and Marcum, holding a total of 75% of\nthe shares of ADT, returned to the board, though Plante and Seanor remained in their role as\nofficers.\nIn March 2011, a majority of the board caused the corporation to file a lawsuit against Marcum\nand Conway in Fayette Circuit Court alleging breach of fiduciary duties, misappropriation of\ncorporate funds, and other claims. The suit was later transferred to Woodford Circuit Court.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c290\nMiller, Griffin and Marks (MGM) represented Marcum and Conway individually in that action\nthrough the services of Thomas Miller.\nOn August 29, 2011, Bioniche Animal Health USA, Inc., which had been ADT\xe2\x80\x99s manufacturer,\nfiled suit against ADT in federal court over a contract dispute. ADT was defended in the litigation\nby Stites Harbison PLLC, a Kentucky law firm, and Sutherland Asbill & Brennan LLP, a firm\nheadquartered in Atlanta.\nIn October and November 2011, there was some shaking up of the board\xe2\x80\x99s membership related\nto Marcum\xe2\x80\x99s claimed purchase of shares owned by Northrop, Cheney, and Conway. Northrop\ntendered his resignation from the board, which was accepted at an October board meeting. In\nOctober, Cheney also executed a resignation letter, addressed to Seanor as president, but the\nletter was never delivered and was instead held by Marcum\xe2\x80\x99s counsel. Upon acceptance of\nNorthrop\xe2\x80\x99s resignation, Bob Watson was named to the board in his stead. On October 31, 2011,\na board meeting was held at which Seanor was removed as president and replaced by Marcum,\nCheney was made vice-president, Seanor was made secretary, and Watson was made\nTreasurer.\nAt the board meetings in October and November 2011, MGM attorneys were present, recorded\nminutes, and participated in discussions with the board members. Before the November\nmeeting, Marcum, acting as president, sent letters to the litigation firms asking that they take no\nfurther action in the Bioniche litigation. At the November 2011 meeting, MGM advised the\ndirectors to settle with Bioniche. Plante was a director at the time, and he objected to the\nsettlement. Three of the four Appellants (Marcum, Cheney, and Conway) were also on the\nboard at that time, however, and they, along with Watson, voted in favor of settling. Though the\nrecord does not disclose the exact timing, it appears that the lawsuit by ADT against Marcum\nand Conway was also discussed at these meetings, and it was dismissed soon after.\nThat, however, means that the suit by ADT against Marcum and Conway overlapped with the\nBioniche litigation against ADT. Both were ongoing actions as of the October and November\n2011 board meetings. As a result, MGM represented the two individuals, Marcum and Conway,\nin an action brought by ADT, at the board\xe2\x80\x99s behest, at the same time that the firm was advising\nthe board in some capacity about the Bioniche suit.\nOn January 3, 2012, the underlying shareholder derivative action was filed by Plante and\nSeanor (who has since settled his claim) in Fayette Circuit Court. The original complaint named\nonly two of ADT\'s directors, Marcum and Conway, as defendants. On April 18, 2012, Northrop\ncame back on the board, replacing Watson. After some discovery, the complaint was amended\nto also name Cheney and Northrop as defendants. The suit alleges, among other things, that\nthe Appellants had violated various provisions of ADT\xe2\x80\x99s shareholder agreement with respect to\nsales of stock. MGM was retained to represent Appellants as they defended against this claim.\nAnother law firm, Stoll Keenon Ogden, represents ADT, which was included in the suit as a\nnominal party on whose behalf Plante has brought the suit.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c291\nOn June 18, 2012, Plante moved to disqualify MGM as the counsel for the Appellants, alleging\nthat because MGM had represented the board, including Plante, in giving advice on the\nBioniche litigation, and because MGM had represented Marcum and Conway individually in\nADT\xe2\x80\x99s suit against them in Woodford County, MGM\xe2\x80\x99s participation in the underlying shareholder\naction created a conflict of interest or at least an appearance of impropriety sufficient to require\nMGM\xe2\x80\x99s disqualification. In other words, because MGM represented Marcum and Conway\nagainst ADT (of which Plante was a board member) in the Woodford County suit, and then\nrepresented the board in the Bioniche suit (by advising the board), MGM effectively acted as\ncounsel both against the board and for the board. By extension, Plante, as a shareholder,\nargued that MGM had taken a position against him and represented him at the same time.\nIn January 2013, Marcum, Conway, Cheney, and Northrop met, acting as a quorum of the\nboard. They adopted a resolution stating that there was no conflict of interest in MGM\xe2\x80\x99s\nrepresentation of them \xe2\x80\x9cwith respect to ADT,\xe2\x80\x9d and purporting to waive any conflict that might\nexist.\nBriefing and arguments regarding this motion and other matters occurred for some period of\ntime. (The exact scope of these proceedings is not clear because a writ action does not contain\nthe entire record of an underlying lawsuit.) Eventually, however, the motion was submitted for\ndecision, and the trial court ruled in Plante\xe2\x80\x99s favor, granting his motion to disqualify MGM from\nrepresenting the Appellants. The court specifically found that \xe2\x80\x9cduring the course of MGM\'s\nrepresentation of Conway and Marcum in the lawsuit filed against them by ADT, MGM also\nprovided legal advice to the board of directors of ADT in a separate lawsuit with Bioniche.\xe2\x80\x9d\nBut then the trial court specifically found, in the next two sentences, that it was making \xe2\x80\x9cno\nfinding on whether Miller and MGM provided legal advice in their capacity as representative of\nConway and Marcum or with the intent to represent ADT in settlement negotiations with\nBioniche,\xe2\x80\x9d and \xe2\x80\x9cno finding as to any actual impropriety on the part of Miller and MGM.\xe2\x80\x9d\n(Emphasis added.) The court then said that it was difficult to see how Plante, as a part owner of\nthe corporation ADT, could perceive that he got \xe2\x80\x9cutmost advocacy\xe2\x80\x9d when MGM represented\n\xe2\x80\x9cboth the corporation in advising about Bioniche and individuals adverse to the corporation in\nthe suit against Conway and Marcum.\xe2\x80\x9d The court then concluded that disqualification of MGM\nwas required based on \xe2\x80\x9cthe appearance of impropriety\xe2\x80\x9d under Lovell v. Winchester.\nThe Appellants filed a writ action at the Court of Appeals. The court denied the writ because\nthey had not shown irreparable injury, one of the usual prerequisites for issuance of such a writ.\nThe case is appealed to this Court as a matter of right.\nII. Analysis\nIn disqualifying MGM, the trial judge, to his credit, was simply following precedent, namely,\nLovell v. Winchester. He justified the disqualification because he saw an appearance of\nimpropriety. He was bound by this Court\xe2\x80\x99s decision to apply that standard.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c292\n\nBut this Court is not so bound, except by the force of stare decisis. And this Court has\nconcluded that disqualification based on an appearance of impropriety is inappropriate under\nthe existing Rules of Professional Conduct. It is telling that the appearance-of-impropriety\nstandard does not appear in those rules, except in commentary condemning its use and noting\nthat it has been deleted from the rules. Although this Court has previously upheld the use of that\nstandard in deciding lawyer disqualification questions, the standard must now be rejected.\nDisqualification under that standard is \xe2\x80\x9clittle more than a question of subjective judgment by the\nformer client.\xe2\x80\x9d In essence, all the former client has to do is claim discomfort with the subsequent\nrepresentation to create the appearance that something untoward is going on and thus that\nthere is an appearance of impropriety. Moreover, \xe2\x80\x9csince \xe2\x80\x98impropriety\xe2\x80\x99 is undefined, the term\n\xe2\x80\x98appearance of impropriety\xe2\x80\x99 is question-begging.\xe2\x80\x9d Even if impropriety is the same as an actual\nconflict, there should be something more substantive than just a possible conflict before\ndisqualification takes place.\nThe simple fact is that disqualification is easier to achieve under the appearance-of-impropriety\nstandard. While that is appropriate for judicial recusal questions, because there is a heightened\nconcern about public confidence in the judiciary, that concern is less pressing when dealing with\nthe private lawyer-client relationship. If anything, use of such a low standard in that context\ncreates a \xe2\x80\x9cgreater likelihood of public suspicion of both the bar and the judiciary\xe2\x80\x9d and \xe2\x80\x9cwould\nultimately be self-defeating,\xe2\x80\x9d because it creates the impression that courts are ruling based on\nappearances rather than facts. Before a lawyer is disqualified based on a relationship with a\nformer client or existing clients, the complaining party should be required to show an actual\nconflict, not just a vague and possibly deceiving appearance of impropriety. And that conflict\nshould be established with facts, not just vague assertions of discomfort with the representation.\nThere is no doubt that personal choice of representation is based on a litigant\'s belief in the\ncompetency of chosen counsel, and the confidence placed in counsel. Even though all\npracticing lawyers are presumed to be competent, common sense dictates that not all lawyers\nshare the same degree of competence. Otherwise, clients would not care who their lawyers\nwere, and there would be little competition among lawyers for business. A litigant has the\nreasonable expectation that he will have the best representation he can and is willing to afford,\nand taking his chosen counsel away based on an \xe2\x80\x9cappearance\xe2\x80\x9d alone creates the belief that the\ncourt is arbitrary or capricious. That undermines faith in the judicial process, which, in turn,\nclearly affects the orderly administration of justice negatively in general and, in that specific\ncase, irreparably. On the other hand, specific findings of an actual conflict refute arbitrariness,\nand promote faith in the fairness of the proceeding.\nLovell applied a standard that is no longer a part of the Rules of Professional Conduct and is\nsimply inadequate to preserve the interests involved when a conflict of interest is alleged. To the\nextent that Lovell and other cases have approved the appearance-of-impropriety standard, they\nare overruled. Instead, in deciding disqualification questions, trial courts should apply the\nstandard that is currently in the Rules of Professional Conduct, which at this time requires a\nshowing of an actual conflict of interest.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c293\n\nTo resolve that question, the trial court must hold an evidentiary hearing. And before\ndisqualifying counsel, the court must find that an actual conflict exists, and state on the record\nwhat that conflict is. To the extent that the trial judge did not do this, consideration of a specialcases writ is appropriate in this case. Thus, a writ is available as a remedy.\nMoreover, this Court concludes that the writ should issue. In many ways, the trial court in this\ncase complied with what we require today for disqualification of counsel. The trial court ordered\nbriefing on the disqualification issue, and conducted multiple hearings. The court heard\nevidence and did not rely merely on allegations in motions and pleadings. And, as noted above,\nthe trial court applied the standard previously approved by this Court.\nBut, also as noted above, that standard is no longer appropriate under the Rules of Professional\nConduct. A mere appearance of impropriety, as found by the trial court in this case, cannot\nsupport disqualification of counsel. Such an extreme remedy must be based on an actual\nconflict of interest. And the trial court\xe2\x80\x99s order specifically stated it was not finding an actual\nimpropriety, that is, an actual conflict.\nAlthough the Court\'s order stated that MGM had represented ADT at the same time that it\nrepresented individuals adverse to ADT, that does not, by itself, support disqualification in the\nshareholder-derivative suit. First, it is not entirely clear that MGM actually represented the\ncorporation when providing advice on whether to settle the Bioniche litigation. In fact, the trial\ncourt\xe2\x80\x99s order specifically states that it \xe2\x80\x9cmakes no findings on whether Miller and MGM provided\nlegal advice in their capacity as representatives of Conway and Marcum or with the intent to\nrepresent ADT in settlement negotiations with Bioniche.\xe2\x80\x9d And ADT, as a corporate entity, had\nbeen represented by other counsel in that litigation. Although Plante has argued that MGM\nrepresented the corporation, whether that was actually the case is less than clear. Thus, the\nconcern that MGM may have been both for and against ADT at the same time may be\nunfounded. At the very least, there are insufficient findings in the trial court\xe2\x80\x99s order to show an\nactual conflict.\nSecond, even if there was an actual conflict when MGM advised the board about the Bioniche\nlitigation, while also representing Marcum and Conway against ADT, that conflict only extended\nto the Bioniche litigation. Once that case settled, and the Marcum-Conway case was dismissed,\nthere was no longer a conflict stemming from the simultaneous representation\xe2\x80\x94and certainly\nnot one that extends to the derivative suit underlying this action.\nFor that reason, this Court concludes the trial court\xe2\x80\x99s disqualification order was improper under\nthe standard articulated today. A writ of prohibition barring its enforcement is the appropriate\nremedy.\nThis is not to say, however, that Plante cannot show a sufficient conflict to have MGM\ndisqualified once this case returns to the trial court. It is possible that by advising the board, of\nwhich Plante was a member, about the Bioniche litigation, MGM was representing Plante. Since\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c294\nthe allegedly improper resolution of the Bioniche litigation is part of the underlying derivative\nsuit, among other things, it is possible that MGM may have an actual conflict under Rule of\nProfessional Conduct 1.9, which governs duties to former clients. There has also been some\nsuggestion that MGM now represents the entire board, including Plante, in the derivative action,\nalthough only the Appellants appear to have been named as defendants. If MGM is\nrepresenting the entire board, that could give rise to a conflict with an existing client under Rule\n1.7.\nBut the focus in the trial court appears not to have been these possible conflicts, but the conflict\nthat previously existed in the Bioniche litigation itself. Regardless, the trial court\'s order does not\nhave findings sufficient to show such a conflict based on duties to former clients, and this Court\ncannot make such findings, especially based on the limited record in a writ action. If the issue is\nraised again in the trial court, it will be necessary to establish exactly who represents and has\nrepresented whom, and when the representation occurred before the conflict issues can be\nresolved. It will also be necessary to establish the precise relationship of the parties to each\nother and in what capacities they have sued or been sued.\nIII. Conclusion\nThe Court concludes that review of the disqualification order in this case is available through the\nspecial-cases exception for writs. Further, this Court concludes the trial court applied a\ndisqualification standard that is no longer appropriate under the Rules of Professional Conduct,\nand that the trial court\'s factual findings are insufficient to allow disqualification under the proper\nstandard of a showing of actual conflict. For those reasons, a writ of prohibition barring\nenforcement of the trial court\'s order is appropriate at this time, even though the issue of\ndisqualification may be revisited in the trial court. The Court of Appeals\xe2\x80\x99 decision to deny the writ\nis therefore reversed, and this matter is remanded to that court to issue the writ.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c295\n4.6: Associational Conflicts of Interest\nWhen attorneys are associated with each other in a partnership, firm, or similar organization, a\nconflict of interest affecting one of the associated attorneys may be imputed to the other\nattorneys who are members of the association. For example, associated attorneys typically may\nnot represent clients with adverse interests, just like individual attorneys may not represent\nclients with adverse interests. Associated attorneys may not represent new clients whose\ninterests are adverse to the interests of a client of an associated attorney. And if the clients of\nan associated attorney develop adverse interests, the attorneys may be required to withdraw\nfrom representation.\nOf course, conflicts of interest do not necessarily preclude representation. The clients of\nassociated attorneys may provide informed consent to representation despite the conflict, just\nlike the clients of individual attorneys.\nOften, the clients of associated attorneys have conflicts of interest relating to the duty of\nconfidentiality. If the conflict in question can be resolved by informed consent, associated\nattorneys often can avoid violating the duty of confidentiality by adopting screening procedures\nthat prevent attorneys representing one client from accessing confidential information provided\nby the other client.\nRule 1.10: Imputation of Conflicts of Interest: General Rule\na. While lawyers are associated in a firm, none of them shall knowingly represent a client\nwhen any one of them practicing alone would be prohibited from doing so by Rules 1.7\nor 1.9, unless\n1. the prohibition is based on a personal interest of the disqualified lawyer and does\nnot present a significant risk of materially limiting the representation of the client\nby the remaining lawyers in the firm; or\n2. the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified\nlawyer\xe2\x80\x99s association with a prior firm, and\ni.\nthe disqualified lawyer is timely screened from any participation in the\nmatter and is apportioned no part of the fee therefrom;\nii.\nwritten notice is promptly given to any affected former client to enable the\nformer client to ascertain compliance with the provisions of this Rule,\nwhich shall include a description of the screening procedures employed; a\nstatement of the firm\'s and of the screened lawyer\'s compliance with\nthese Rules; a statement that review may be available before a tribunal;\nand an agreement by the firm to respond promptly to any written inquiries\nor objections by the former client about the screening procedures; and\niii.\ncertifications of compliance with these Rules and with the screening\nprocedures are provided to the former client by the screened lawyer and\nby a partner of the firm, at reasonable intervals upon the former client\'s\nwritten request and upon termination of the screening procedures.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c296\nb. When a lawyer has terminated an association with a firm, the firm is not prohibited from\nthereafter representing a person with interests materially adverse to those of a client\nrepresented by the formerly associated lawyer and not currently represented by the firm,\nunless:\n1. the matter is the same or substantially related to that in which the formerly\nassociated lawyer represented the client; and\n2. any lawyer remaining in the firm has information protected by Rules 1.6 and\n1.9(c) that is material to the matter.\nc. A disqualification prescribed by this rule may be waived by the affected client under the\nconditions stated in Rule 1.7.\nd. The disqualification of lawyers associated in a firm with former or current government\nlawyers is governed by Rule 1.11.\nRule 1.10 Imputation of Conflicts of Interest: General Rule, Comment [1]\nFor purposes of the Rules of Professional Conduct, the term \xe2\x80\x9cfirm\xe2\x80\x9d denotes lawyers in a law\npartnership, professional corporation, sole proprietorship or other association authorized to\npractice law; or lawyers employed in a legal services organization or the legal department of a\ncorporation or other organization.\nRule 1.10 Imputation of Conflicts of Interest: General Rule, Comment [2]\nThe rule of imputed disqualification stated in paragraph (a) gives effect to the principle of loyalty\nto the client as it applies to lawyers who practice in a law firm. Such situations can be\nconsidered from the premise that a firm of lawyers is essentially one lawyer for purposes of the\nrules governing loyalty to the client, or from the premise that each lawyer is vicariously bound by\nthe obligation of loyalty owed by each lawyer with whom the lawyer is associated. Paragraph\n(a)(1) operates only among the lawyers currently associated in a firm.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 123 (2000): Imputation of a Conflict\nof Interest to an Affiliated Lawyer\nUnless all affected clients consent to the representation under the limitations and conditions\nprovided in \xc2\xa7 122 or unless imputation hereunder is removed as provided in \xc2\xa7 124, the\nrestrictions upon a lawyer imposed by \xc2\xa7\xc2\xa7 125- 135 also restrict other affiliated lawyers who:\n1. are associated with that lawyer in rendering legal services to others through a law\npartnership, professional corporation, sole proprietorship, or similar association;\n2. are employed with that lawyer by an organization to render legal services either to that\norganization or to others to advance the interests or objectives of the organization; or\n3. share office facilities without reasonably adequate measures to protect confidential client\ninformation so that it will not be available to other lawyers in the shared office.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 124 (2000): Removing Imputation\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c297\n1. Imputation specified in \xc2\xa7 123 does not restrict an affiliated lawyer when the affiliation\nbetween the affiliated lawyer and the personally prohibited lawyer that required the\nimputation has been terminated, and no material confidential information of the client,\nrelevant to the matter, has been communicated by the personally prohibited lawyer to\nthe affiliated lawyer or that lawyer\'s firm.\n2. Imputation specified in \xc2\xa7 123 does not restrict an affiliated lawyer with respect to a\nformer-client conflict under \xc2\xa7 132, when there is no substantial risk that confidential\ninformation of the former client will be used with material adverse effect on the former\nclient because:\na. any confidential client information communicated to the personally prohibited\nlawyer is unlikely to be significant in the subsequent matter;\nb. the personally prohibited lawyer is subject to screening measures adequate to\neliminate participation by that lawyer in the representation; and\nc. timely and adequate notice of the screening has been provided to all affected\nclients.\n3. Imputation specified in \xc2\xa7 123 does not restrict a lawyer affiliated with a former\ngovernment lawyer with respect to a conflict under \xc2\xa7 133 if:\na. the personally prohibited lawyer is subject to screening measures adequate to\neliminate involvement by that lawyer in the representation; and\nb. timely and adequate notice of the screening has been provided to the appropriate\ngovernment agency and to affected clients.\nCinema 5, Ltd. v. Cinerama, Inc., 528 F. 2d 1384 (2d Cir. 1976)\nSummary: Attorney Manly Fleischmann was a partner in Jaeckle, Fleischmann and\nMugel of Buffalo and in Webster, Sheffield, Fleischmann, Hitchcock and Brookfield of\nNew York City. Cinerama distributed movies and operated movie theaters. Cinerama\nhired Fleischmann and Jaeckle to defend it in an antitrust action in upstate New York.\nThen, Cinema 5 hired Webster to represent it in an antitrust action in New York City.\nCinerama filed a motion to disqualify Webster because Fleischmann was a partner.\nFleischmann responded that the actions were not substantially related. The district court\ngranted the motion, and the circuit court affirmed.\nBefore MOORE, FEINBERG and VAN GRAAFEILAND, Circuit Judges.\nVAN GRAAFEILAND, Circuit Judge:\nThis appeal from an order granting defendants\xe2\x80\x99 motion to disqualify plaintiff\'s counsel presents a\nsomewhat unusual set of facts. Counsel has been disqualified from further representation of\nplaintiff because a partner in this New York City law firm is also a partner in a Buffalo firm which\nis presently representing the defendant Cinerama, Inc. in other litigation of a somewhat similar\nnature. Although we agree with the district court that there was no actual wrongdoing and intend\nno criticism of the lawyers involved, we find no abuse of the district court\xe2\x80\x99s discretion, and so\naffirm.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c298\n\nThere is little or no dispute as to the facts, most of them having been stipulated. Attorney Manly\nFleischmann is a partner in Jaeckle, Fleischmann and Mugel of Buffalo and in Webster,\nSheffield, Fleischmann, Hitchcock and Brookfield of New York City. He divides his time between\nthe two offices. Cinerama is a distributor of motion pictures and the operator of several large\ntheater chains. In January 1972 the Jaeckle firm was retained to represent Cinerama and\nseveral other defendants in an action brought in the United States District Court for the Western\nDistrict of New York. Plaintiffs in that suit are local upstate theater operators who allege antitrust\nviolations resulting from discriminatory and monopolistic licensing and distribution of motion\npictures in the Rochester area. A similar action involving allegedly illegal distribution in the\nBuffalo area was commenced in March 1974, and the Jaeckle office represents the interests of\nCinerama in this action also. Both suits are presently pending in the Western District.\nThe instant action, brought in the Southern District of New York in August 1974, alleges a\nconspiracy among the defendants to acquire control of plaintiff corporation through stock\nacquisitions, with the intention of creating a monopoly and restraining competition in New York\nCity\'s first-run motion picture theater market. Judge Brieant found that there was sufficient\nrelationship between the two law firms and the two controversies to inhibit future confidential\ncommunications between Cinerama and its attorneys and that disqualification was required to\navoid even the appearance of professional impropriety.\nAppellant\xe2\x80\x99s counsel strongly dispute these findings. They say that they should not be\ndisqualified unless the relationship between the controversies is substantial, and they contend\nthere is nothing substantial in the relationship between an upstate New York conspiracy to\ndeprive local theater operators of access to films and an attempted corporate take-over in New\nYork City.\nThe \xe2\x80\x9csubstantial relationship\xe2\x80\x9d test is indeed the one that we have customarily applied in\ndetermining whether a lawyer may accept employment against a former client. However, in this\ncase, suit is not against a former client, but an existing one. One firm in which attorney\nFleischmann is a partner is suing an actively represented client of another firm in which attorney\nFleischmann is a partner. The propriety of this conduct must be measured not so much against\nthe similarities in litigation, as against the duty of undivided loyalty which an attorney owes to\neach of his clients.\nA lawyer\xe2\x80\x99s duty to his client is that of a fiduciary or trustee. When Cinerama retained Mr.\nFleischmann as its attorney in the Western District litigation, it was entitled to feel that at least\nuntil that litigation was at an end, it had his undivided loyalty as its advocate and champion, and\ncould rely upon his \xe2\x80\x9cundivided allegiance and faithful, devoted service.\xe2\x80\x9d Because \xe2\x80\x9cno man can\nserve two masters,\xe2\x80\x9d Matthew 6:24, it had the right to expect also that he would \xe2\x80\x9caccept no\nretainer to do anything that might be adverse to his client\'s interests.\xe2\x80\x9d Needless to say, when\nMr. Fleischmann and his New York City partners undertook to represent Cinema 5, Ltd., they\nowed it the same fiduciary duty of undivided loyalty and allegiance.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c299\nEthical Considerations 5-1 and 5-14 of the American Bar Association\'s Code of Professional\nResponsibility provide that the professional judgment of a lawyer must be exercised solely for\nthe benefit of his client, free of compromising influences and loyalties, and this precludes his\nacceptance of employment that will adversely affect his judgment or dilute his loyalty. The Code\nhas been adopted by the New York State Bar Association, and its canons are recognized by\nboth Federal and State Courts as appropriate guidelines for the professional conduct of New\nYork lawyers.\nUnder the Code, the lawyer who would sue his own client, asserting in justification the lack of\n\xe2\x80\x9csubstantial relationship\xe2\x80\x9d between the litigation and the work he has undertaken to perform for\nthat client, is leaning on a slender reed indeed. Putting it as mildly as we can, we think it would\nbe questionable conduct for an attorney to participate in any lawsuit against his own client\nwithout the knowledge and consent of all concerned. This appears to be the opinion of the\nforemost writers in the field, and it is the holding of the New York courts. In Matter of Kelly, New\nYork\'s highest court said that \xe2\x80\x9cwith rare and conditional exceptions, the lawyer may not place\nhimself in a position where a conflicting interest may, even inadvertently, affect, or give the\nappearance of affecting, the obligations of the professional relationship.\xe2\x80\x9d Nor is New York alone\nin this view. In Grievance Committee v. Rottner, Connecticut\xe2\x80\x99s highest court held that the\nmaintenance of public confidence in the bar requires an attorney to decline employment\nadverse to his client, even though the nature of such employment is wholly unrelated to that of\nhis existing representation.\nWhether such adverse representation, without more, requires disqualification in every case, is a\nmatter we need not now decide. We do hold, however, that the \xe2\x80\x9csubstantial relationship\xe2\x80\x9d test\ndoes not set a sufficiently high standard by which the necessity for disqualification should be\ndetermined. That test may properly be applied only where the representation of a former client\nhas been terminated and the parameters of such relationship have been fixed. Where the\nrelationship is a continuing one, adverse representation is prima facie improper, and the\nattorney must be prepared to show, at the very least, that there will be no actual or apparent\nconflict in loyalties or diminution in the vigor of his representation. We think that appellants have\nfailed to meet this heavy burden and that, so long as Mr. Fleischmann and his Buffalo partners\ncontinue to represent Cinerama, he and his New York City partners should not represent\nCinema 5, Ltd. in this litigation.\nBecause he is a partner in the Jaeckle firm, Mr. Fleischmann owes the duty of undivided loyalty\nto that firm\'s client, Cinerama. Because he is a partner in the Webster firm, he owes the same\nduty to Cinema 5, Ltd. It can hardly be disputed that there is at least the appearance of\nimpropriety where half his time is spent with partners who are defending Cinerama in multimillion dollar litigation, while the other half is spent with partners who are suing Cinerama in a\nlawsuit of equal substance.55\n55\n\nMr. Fleischmann\'s personal participation in the Buffalo litigation was minimal, and we are confident that\nhe would make every effort to disassociate himself from both lawsuits and would not divulge any\ninformation that came to him concerning either. However, we cannot impart this same confidence to the\npublic by court order.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c300\n\nBecause \xe2\x80\x9can attorney must avoid not only the fact, but even the appearance, of representing\nconflicting interests,\xe2\x80\x9d this requires his disqualification. Moreover, because of the peculiarly close\nrelationship existing among legal partners, if Mr. Fleischmann is disqualified, his partners at the\nWebster firm are disqualified as well.\nNothing that we have heretofore said is intended as criticism of the character and professional\nintegrity of Mr. Fleischmann and his partners. We are convinced that the dual representation\ncame about inadvertently and unknowingly, and we are in complete accord with Judge Brieant\xe2\x80\x99s\nfinding that there has been no actual wrongdoing. Furthermore, the record shows that after\nlearning of the conflict which had developed, the Jaeckle firm, through Mr. Fleischmann, offered\nto withdraw its representation of Cinerama in the Western District actions. However, that offer\nwas not accepted, and Mr. Fleischmann continued, albeit reluctantly, to have one foot in each\ncamp.\nUnder the circumstances, Judge Brieant\xe2\x80\x99s order of disqualification cannot be construed as an\nabuse of his discretion. We therefore affirm.\nQuestions:\n1. Why did the court grant Cinerama\xe2\x80\x99s motion to disqualify Fleischmann? Did it identify a\nconflict of interest? Was Fleischmann working on the action against Cinerama?\n2. Why did Cinerama file a motion to disqualify Webster? Should Cinema 5\xe2\x80\x99s preferences\nmatter under the circumstances?\nBorden v. Borden, 277 A. 2d 89 (D.C. App. 1971)\nSummary: Helen Borden filed a complaint to divorce her husband, George, on the ground of\nadultery. Helen was represented by an attorney from the Neighborhood Legal Services Program\n(NLSP). Helen\xe2\x80\x99s attorney moved for assignment of counsel to represent George. The trial court\nordered attorney David S. Raycroft, who works for NLSP, to represent George. Both attorneys\nfrom NLSP filed a motion to set aside the trial court\xe2\x80\x99s order since both attorneys were employed\nby NLSP and the order created a conflict of interest under the Code of Professional\nResponsibility. The trial court denied the motion because no economic conflict existed. The\nappellate court reversed, because the NLSP functions as a firm and there is an inherent conflict\nof interest that public policy concerns do not override.\nKERN, Associate Judge:\nThe issue presented by this appeal is whether it was error for the trial judge sitting in the\nDomestic Relations Branch of the District of Columbia Court of General Sessions to refuse to\nvacate his order assigning an attorney employed by the Neighborhood Legal Services Program\n(NLSP) to represent the defendant in this action, when the plaintiff was already represented by\nan NLSP lawyer.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c301\n\nOn September 22, 1969, appellant Helen Borden filled a complaint seeking a divorce from\nappellee George Borden on the ground of adultery. On April 2, 1970, appellant, represented by\nan attorney from NLSP and proceeding in forma pauperis, moved for assignment of counsel to\nrepresent appellee. The trial court ordered David S. Raycroft, an attorney employed by the\nNLSP, to enter an appearance on behalf of and represent appellee. On June 8, 1970,\nappellant\'s attorney, joined by appellee\'s attorney, filed a motion to set aside the trial court\'s\norder of appointment of counsel on the ground that since both attorneys in the case were\nemployed by the NLSP the order created a conflict of interest under the Code of Professional\nResponsibility, and the divorce ultimately obtained could be invalid due to alleged collusion.\nOn June 9, 1970, the trial judge denied the motion to set aside his appointment of counsel,\nrelying specifically on his order in another case, McGee v. McGee, which stated, inter alia:\nSince, therefore, no economic conflict exists, no corporate interests is in any way\ninvolved and no legal partnership as such has been disclosed it would appear that in fact\nand objectively speaking there is no conflict of interest.\nMrs. Borden appeals from this order of denial.\nWhile the trial court\xe2\x80\x99s refusal to set aside his order of appointment is not final in the sense of\ndisposing of the case on its merits, it does have \xe2\x80\x9ca final and irreparable effect upon the rights of\nthe parties\xe2\x80\x9d and is therefore appealable. The effect of the trial court\'s order is to force the parties\nto go to trial represented by attorneys who practice law within the same organization, which\nappears on its face to constitute a conflict of interest, and who have stated upon the record their\ninability to represent the cause of their clients and remain faithful to the Code of Professional\nResponsibility. In addition, the parties have ground for concern that the final decree in the case\non the merits could be subject to the subsequent charge of collusion and its validity thus put in\nquestion. We think that the administration of justice would best be served by recognizing the\ncloud which the order of appointment of counsel has put upon the present proceedings and by\ntreating the order as final for the purpose of review.\nTurning to the merits of the assignment of counsel order, it is axiomatic that members of the\nsame law firm may not represent adverse parties. Corporation Counsel concedes this but takes\nthe position that:\nNLSP cannot be analogized to the typical law firm for purposes of application of the\nconflict-of-interest concept NLSP\xe2\x80\x99s activities more logically fall within the group legal\nservices concept.\nIt argues that under N.A.A.C.P. v. Button, the constitutional right being asserted must be\nbalanced on the scale of public interest against the alleged professional impropriety. When this\nis done, in the instant case, so the argument goes, the right and need of the poor to have legal\nrepresentation in domestic relations matters is paramount to the allegedly remote possibility of a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c302\nconflict of interest growing out of the representation of both parties by NLSP attorneys. It is\npointed out that since NLSP attorneys receive no compensation from their clients there can be\nno economic conflict of interest, as would be the case if they were practicing in the same law\nfirm.\nWe are not persuaded that the possibility of conflict of interest which appellee\xe2\x80\x99s attorney\nproffered as his reason for wishing to withdraw from participation in this case is remote. While\nthe NLSP is not a law firm it is a group of attorneys practicing law together in an organizational\nstructure much like a law firm. It has a Board of Directors and an Executive Director who are\nanalogous to a firm\xe2\x80\x99s managing partners. It has one attorney in each of its branch offices whose\nresponsibility is to supervise the junior attorneys, much like a firm\'s senior partner working with\nhis associates. All NLSP attorneys participate in office meetings and receive intra-office\ncommunications on substantive law, litigation techniques and tactics and office policy. Lawyers\nwho practice their profession side-by-side, literally and figuratively, are subject to subtle\ninfluences that may well affect their professional judgment and loyalty to their clients, even\nthough they are not faced with the more easily recognized economic conflict of interest. In\naddition, the appointment of attorneys who work together presents an impression scarcely\nconsistent with the bar\xe2\x80\x99s efforts to maintain public confidence in the law and lawyers.\nAlso we fail to find in this case the extraordinary circumstances present in N.A.A.C.P. v. Button,\nwhere legal representation to vindicate constitutional rights of a group of citizens was simply\nunavailable except in the form of group legal services which the State contended amounted to\nbarratry, maintenance and champerty. With all deference to the trial court\xe2\x80\x99s efforts to date to\nassure full representation of all who seek access to the Domestic Relations Court we are not\npersuaded that the supply of attorneys available in the District of Columbia has been exhausted\nso that NLSP attorneys must now represent both sides of a divorce action.\nFinally, we are reluctant to approve any action in the matter of professional ethics which\ndistinguishes between attorneys who are in private practice and attorneys who are not. In the\nfirst place, Congress has expressly recognized that \xe2\x80\x9canti-poverty lawyers\xe2\x80\x9d are to be governed by\nthe traditional standards of the profession. The ABA has held that legal aid attorneys have a\n\xe2\x80\x9cprimary obligation of loyalty\xe2\x80\x9d to their clients and are required \xe2\x80\x9cto act in accordance with the\nCode of Professional Responsibility.\xe2\x80\x9d Other jurisdictions have specifically barred anti-poverty\nlawyers from representing adverse parties in domestic relations litigation because such\nrepresentation falls afoul of the Canons. We are reluctant ever to make an exception from the\nprofessional norm for attorneys employed by the government or others who provide legal\nrepresentation without compensation from the client because then we might encourage a\nmisapprehension that the special nature of such representation justifies departure from the\nprofession\'s standards. We should avoid always any action that would give the appearance that\ngovernment attorneys are \xe2\x80\x9clegal Hessians\xe2\x80\x9d hired \xe2\x80\x9cto do a job\xe2\x80\x9d rather than attorneys at law. On\nthe other hand, we should expect always from these attorneys uncompromising adherence to\nthe profession\'s established standards.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c303\nWe conclude that it was error for the trial court to refuse to vacate its assignment of an NLSP\nattorney to represent appellee in the trial of appellant\'s divorce action which was being\npresented by another NLSP attorney and that this case must be remanded for appointment of\nnew counsel for appellee.\nQuestions:\n1. What was the conflict of interest?\n2. Why did NLSP\xe2\x80\x99s corporate counsel argue against the motion?\n3. What public policy concerns did the court say were not sufficient to override the inherent\nconflict of interest?\n4. Did the court\xe2\x80\x99s ruling harm or benefit NLSP\xe2\x80\x99s mission to provide legal services to the\npoor?\nPeople ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal. 4th\n1135 (Cal. 1999)\n\nSummary: Attorney Eliot G. Disner was \xe2\x80\x9cof counsel\xe2\x80\x9d to Shapiro, Rosenfeld & Close.\nAttorney Geordan Goebel represented SpeeDee Oil Change Systems. Goebel\nconsulted with Shapiro about an antitrust action SpeeDee had filed against Mobil Oil,\nand then associated Shapiro with the action as counsel. Cohon and Gardner\nrepresented Mobil in the SpeeDee action. Cohon consulted with Disner about the\nSpeeDee action, and planned to retain him as a consultant. But when Cohon and\nGardner learned that Shapiro was representing SpeeDee, they filed a motion to\ndisqualify the firm, because of its association with Disner. The trial court denied the\nmotion, and the intermediate appellate court affirmed, because Disner did not\nprovide any confidential information to Shapiro. The California Supreme Court\nreversed, because Disner represented adversaries in the same litigation.\nCHIN, J.\nWhen a conflict of interest requires an attorney\xe2\x80\x99s disqualification from a matter, the\ndisqualification normally extends vicariously to the attorney\xe2\x80\x99s entire law firm. This rule\nsafeguards clients\xe2\x80\x99 legitimate expectations that their attorneys will protect client\nconfidences. Here, we decide whether the same rule should apply when a party\nunknowingly consults an attorney \xe2\x80\x9cof counsel\xe2\x80\x9d to the law firm representing the party\'s\nadversary in the subject of the consultation.\nMobil Oil Corporation consulted Attorney Eliot G. Disner, who was of counsel to Shapiro,\nRosenfeld & Close. Mobil was a defendant in a complaint in intervention by respondents\nGary and Annette Burch et al., Southern California franchisees of SpeeDee Oil Change\nSystems, Inc. While Mobil was consulting Disner, respondents associated the Shapiro firm\nas counsel of record in their action against Mobil. Mobil moved to disqualify the Shapiro firm\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c304\nupon learning of its association, arguing that Disner had a conflict of interest that required\nits vicarious disqualification.\nThe trial court denied Mobil\'s motion. The court found no basis for a presumption that\nDisner disclosed confidences to the Shapiro firm, notwithstanding Disner\'s relationship with\nthe firm. The Court of Appeal affirmed, concluding that substantial evidence existed for\nimplied findings that Disner\xe2\x80\x99s relationship with the Shapiro firm was not \xe2\x80\x9cclose, personal,\ncontinuous, and regular\xe2\x80\x9d and that Disner conveyed no confidential information to the firm.\nWe granted Mobil\'s petition for review.\nWe adopt the prevailing rule concerning \xe2\x80\x9cof counsel\xe2\x80\x9d conflicts of interest and reverse the\njudgment of the Court of Appeal. For attorneys in the same firm to represent adverse parties\nin the same litigation is so patently improper that the rule of disqualification is a per se or\n\xe2\x80\x9cautomatic\xe2\x80\x9d one. Conflicting representations that would disqualify all of a law firm\xe2\x80\x99s attorneys\nare not more acceptable when an attorney of counsel to the firm creates the conflict.\nClients, and the public, should expect confidentiality and loyalty from attorneys who\neffectively declare they practice law in a close, personal, and continuing association. These\nlegitimate expectations would be frustrated if a firm could represent one party in litigation\nwhile an attorney of counsel to the firm represented an adversary in the same case.\nFACTUAL AND PROCEDURAL BACKGROUND\n\nAttorney Geordan Goebel, a sole practitioner, had represented respondents since 1994.\nBecause of the action\xe2\x80\x99s scope, he decided to associate a law firm as attorneys of record to\nhelp him prosecute respondents\xe2\x80\x99 claims. Goebel approached the Shapiro firm because of its\nexpertise in franchise law and met with Mitchell Shapiro on June 22, 1996. Around this time,\nthe Shapiro firm\'s letterhead listed 14 attorneys\xe2\x80\x99 names, with 4 more attorneys listed as of\ncounsel to the firm, all at the same office address. Among those identified as of counsel to\nthe firm was Eliot G. Disner, an attorney who had substantial experience with antitrust\nissues.\nOver the next few weeks, Goebel developed a \xe2\x80\x9cgood working relationship\xe2\x80\x9d with the Shapiro\nfirm. On July 10, he signed a notice associating the Shapiro firm as counsel of record for\nrespondents. Mitchell Shapiro signed the notice for the Shapiro firm on July 12. The notice\nof association of counsel was served by mail on July 15, 1996, and filed with the court the\nfollowing day.\nThe law firm of Cohon and Gardner represented Mobil in the SpeeDee Oil action. Early in\nJuly 1996, Jeffrey Cohon, an associate with Cohon and Gardner, spoke to Attorney Steven\nHecht about contacting Disner concerning the case. Hecht knew both Cohon and Disner\npersonally. To facilitate an initial check for conflicts, Cohon told Hecht the name of the case\nand the principal attorneys involved. Hecht spoke with Disner later that week. Hecht asked\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c305\nDisner if he knew of the case involving SpeeDee Oil and Mobil. When Disner said he did\nnot, Hecht asked him to call Jeffrey Cohon.\nDisner and Cohon spoke by telephone on July 11 or 12. When Cohon returned Disner\'s\ncall, the receptionist answered the telephone, \xe2\x80\x9cShapiro, Rosenfeld and Close.\xe2\x80\x9d Cohon\'s call\nwas put through to Disner, who confirmed he had spoken with Hecht and had not heard of\nthe SpeeDee Oil case or the attorneys involved in it. In a conversation Cohon believed was\nconfidential, he and Disner discussed the case\xe2\x80\x99s substantive allegations, its procedural\nstatus, and Mobil\'s theories. They arranged a meeting for July 16.\nOn July 16, 1996, Cohon and Gardner Attorneys Bennett Cohon, Jeffrey Cohon, and\nSteven Gardner met with Disner to discuss his assisting with Mobil\'s representation. They\nspoke for one to two hours over lunch. Gardner received a copy of Disner\'s resume,\nwhich\xe2\x80\x94like Disner\'s business card\xe2\x80\x94prominently featured the Shapiro firm\'s name and\naddress.\nGardner briefed Disner on the case and Mobil\'s position. The matters disclosed to Disner\nincluded "the background of the case, Mobil\'s theories in the case, Mobil\'s discovery\nstrategy and an analysis of the procedural and substantive issues which had arisen to date\nand [were] likely to arise in the future, the state of the case, experts, and consultants, and\nspecific factual issues." The Cohon and Gardner attorneys considered the information\ndisclosed to Disner to be confidential and attorney work product.\nAccording to Gardner\'s and Jeffrey Cohon\'s declarations, when the meeting ended,\nGardner and Disner agreed to prepare a document formally retaining Disner as a\nconsultant. Disner did not directly contradict the Cohon and Gardner attorneys\' statements.\nHis declaration stated that at the end of the meeting, the Cohon and Gardner attorneys\n"expressed interest" in using his services, although they did not know "exactly" how they\nintended to do so.\nGardner further declared that Disner agreed to check some statutes and case law that\napplied to a few of the issues they discussed. He stated that he and Disner spoke again\nlater in the afternoon of July 16, and Disner conveyed the results of his review of those\nissues. No declaration contradicted Gardner\'s account of those discussions.\nThe next day, July 17, Gardner received the notice of the Shapiro firm\'s association as\ncounsel for respondents. Consequently, that same day the Cohon and Gardner firm\ninformed Disner that Mobil would not be using his services. Gardner immediately faxed a\nletter to the Shapiro firm, Disner, and Goebel, stating that Mobil objected to the Shapiro\nfirm\'s participation in the case on behalf of respondents. Gardner\'s letter asserted the\nShapiro firm had an ethical conflict because of Cohon and Gardner\'s conversations with\nand disclosures to Disner concerning the case. The Shapiro firm responded with a letter\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c306\nfaxed the next day, contending there was no basis for the firm\'s disqualification. The\nresponse stated that the Shapiro firm had already associated as counsel for respondents\nwhen Disner met with the Cohon and Gardner attorneys. The response also stated that\nDisner was of counsel to the Shapiro firm and not an associate, partner, or shareholder.\nFour days later, on July 22, 1996, Mobil filed an ex parte application for an order shortening\ntime for a motion to disqualify the Shapiro firm. Mobil\'s motion was set for hearing on July\n24, 1996. The moving and opposing papers included declarations and exhibits setting out\nthe facts related above. In addition, Disner\'s declaration stated he had not "discussed the\nmerits of the SpeeDee Oil action with any attorney or other employee" of the Shapiro firm.\nHe also said he customarily reviewed possible conflicts of interest with the firm before\nassociating with them on cases. Disner and the Shapiro firm did not discuss a potential\nconflict in this instance because neither had asked the other to associate for the SpeeDee\nOil case. Similarly, Mitchell Shapiro declared that he had "not discussed this action" with\nDisner and did not know "what was discussed between" Disner and the Cohon and Gardner\nattorneys.\nThe Shapiro firm\'s declarations submitted in opposition to Mobil\'s motion provided additional\ndetails of the firm\'s relationship with Disner. Disner\'s declaration stated: "Although I am\ndesignated as `Of Counsel\' to SRC [the Shapiro firm], I have a separate law practice from\nSRC. I have my own clients, whom I bill separately from SRC. I pay rent to SRC for office\nspace. I have my own staff whom I pay for their services. I do not share in any profits of\nSRC, nor do I incur any liabilities on behalf of SRC. In those few cases (perhaps 3-4 per\nyear) on which I associate with SRC, which is strictly determined on a case-by-case basis, if\nI use any attorney from SRC to perform services, I pay SRC a percentage of that attorney[s]\nusual hourly rate for the time spent working on my clients\' cases. Similarly, if SRC uses my\nservices on any cases, it pays me a percentage of my usual hourly fee for services\nrendered.\xe2\x80\x9d\nThe trial court denied Mobil\'s motion to disqualify the Shapiro firm. The court decided the\nmatter based on the written submissions, stating: \xe2\x80\x9cThere is no basis on which to presume\nthat Eliot Disner, Esq., who is of counsel to the Shapiro firm, imparted any confidential\ninformation to the firm, as concerns this case. Disner and the Shapiro firm were initially\nunaware of each other\'s involvement in this case and Disner was not retained by MOBIL\nnor is he presently involved in this case."\nCourt of Appeal affirmed the trial court\'s order, applying an abuse of discretion standard of\nreview. The court viewed the matter as one involving conflicting evidence and inferences on\nthe actual nature of the particular "of counsel" relationship in question: "We agree that if the\nShapiro firm simultaneously represented both Mobil and the respondents in this litigation, it\nwould be subject to automatic disqualification. And we assume for purposes of discussion\nthat by performing legal research for Mobil, Mr. Disner represented it. However, the trial\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c307\ncourt impliedly concluded Mr. Disner practiced law separate and apart from [the Shapiro\nfirm] except on those few annual occasions when Mr. Disner or [the Shapiro firm]\nassociated the other on a particular case.... [There] was probative and persuasive evidence\nof a `close, personal, continuous, and regular\' professional affinity which characterizes the\n`of counsel\' relationship.... However, there was conflicting evidence which indicated there\nwas in reality no `close, personal, continuous, and regular\' relationship.... Simply stated, the\nevidence concerning the relationship was in conflict and the trial judge resolved that dispute\nin favor of one side. Furthermore, even if a concern for client confidentiality arose on the\nfacts of this case, substantial evidence established Mr. Disner did not impart any\nconfidential information to [the Shapiro firm]. Therefore, we find no abuse of discretion."\nDISCUSSION\n\nThis case requires us to resolve two distinct questions. First, were Disner\'s contacts and\ndiscussions with the Cohon and Gardner attorneys such that he represented Mobil for\npurposes of a conflict of interest analysis? Second, if so, should any conflict of interest be\nimputed to the law firm to which he was of counsel so as to require its disqualification? To\nanswer these questions, we first review the principles involved when one party seeks to\ndisqualify its opponent\'s counsel, beginning with the appropriate standard of appellate\nreview.\nDISQUALIFICATION PRINCIPLES\n\nA motion to disqualify a party\'s counsel may implicate several important interests.\nConsequently, judges must examine these motions carefully to ensure that literalism does\nnot deny the parties substantial justice. Depending on the circumstances, a disqualification\nmotion may involve such considerations as a client\'s right to chosen counsel, an attorney\'s\ninterest in representing a client, the financial burden on a client to replace disqualified\ncounsel, and the possibility that tactical abuse underlies the disqualification motion.\nNevertheless, determining whether a conflict of interest requires disqualification involves\nmore than just the interests of the parties.\nA trial court\'s authority to disqualify an attorney derives from the power inherent in every\ncourt "[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all\nother persons in any manner connected with a judicial proceeding before it, in every matter\npertaining thereto." Ultimately, disqualification motions involve a conflict between the clients\'\nright to counsel of their choice and the need to maintain ethical standards of professional\nresponsibility. The paramount concern must be to preserve public trust in the scrupulous\nadministration of justice and the integrity of the bar. The important right to counsel of one\'s\nchoice must yield to ethical considerations that affect the fundamental principles of our\njudicial process.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c308\nProtecting the confidentiality of communications between attorney and client is fundamental\nto our legal system. The attorney-client privilege is a hallmark of our jurisprudence that\nfurthers the public policy of ensuring "`the right of every person to freely and fully confer and\nconfide in one having knowledge of the law, and skilled in its practice, in order that the\nformer may have adequate advice and a proper defense.\' [Citation.]" To this end, a basic\nobligation of every attorney is "[t]o maintain inviolate the confidence, and at every peril to\nhimself or herself to preserve the secrets, of his or her client."\nTo protect the confidentiality of the attorney-client relationship, the State Bar Rules of\nProfessional Conduct prohibits attorneys from accepting, without the client\'s informed\nwritten consent, "employment adverse to the client or former client where, by reason of the\nrepresentation of the client or former client, the [attorney] has obtained confidential\ninformation material to the employment." Where an attorney successively represents clients\nwith adverse interests, and where the subjects of the two representations are substantially\nrelated, the need to protect the first client\'s confidential information requires that the\nattorney be disqualified from the second representation. For the same reason, a\npresumption that an attorney has access to privileged and confidential matters relevant to a\nsubsequent representation extends the attorney\'s disqualification vicariously to the\nattorney\'s entire firm.\nA related but distinct fundamental value of our legal system is the attorney\'s obligation of\nloyalty. Attorneys have a duty to maintain undivided loyalty to their clients to avoid\nundermining public confidence in the legal profession and the judicial process.The effective\nfunctioning of the fiduciary relationship between attorney and client depends on the client\'s\ntrust and confidence in counsel. The courts will protect clients\' legitimate expectations of\nloyalty to preserve this essential basis for trust and security in the attorney-client\nrelationship. Therefore, if an attorney\xe2\x80\x94or more likely a law firm\xe2\x80\x94simultaneously represents\nclients who have conflicting interests, a more stringent per se rule of disqualification applies.\nWith few exceptions, disqualification follows automatically, regardless of whether the\nsimultaneous representations have anything in common or present any risk that\nconfidences obtained in one matter would be used in the other.\nThe most egregious conflict of interest is representation of clients whose interests are\ndirectly adverse in the same litigation. Such patently improper dual representation suggests\nto the clients\xe2\x80\x94and to the public at large\xe2\x80\x94that the attorney is completely indifferent to the\nduty of loyalty and the duty to preserve confidences. However, the attorney\'s actual\nintention and motives are immaterial, and the rule of automatic disqualification applies. "The\nrule is designed not alone to prevent the dishonest practitioner from fraudulent conduct," but\nalso to keep honest attorneys from having to choose between conflicting duties, or being\ntempted to reconcile conflicting interests, rather than fully pursuing their clients\' rights. The\nloyalty the attorney owes one client cannot be allowed to compromise the duty owed\nanother.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c309\n\nHere, any concerns about compromised attorney loyalty must take into account the limited\nperiod during which the Shapiro firm represented respondents and Disner was engaged in\ncommunications with Mobil\'s counsel. Mobil effectively ended the risk of divided loyalty by\npromptly terminating Disner\'s services. However, the concern for client confidences, like the\nattorney\'s duty to preserve those confidences, continues after the attorney\'s services end.\nTherefore, we examine the relationship between Disner and Mobil, conducted through\nMobil\'s counsel, to determine whether Disner should be deemed to have represented Mobil\nfor purposes of a conflict of interest analysis.\nCONSULTATION AND REPRESENTATION\n\nIn considering whether an attorney-client relationship has reached a point where the\nattorney can be subject to disqualification for a conflict of interest, we begin with the\nrelationship\'s early stages, as noted in Beery v. State Bar: \xe2\x80\x9cThe fiduciary relationship\nexisting between lawyer and client extends to preliminary consultations by a prospective\nclient with a view to retention of the lawyer, although actual employment does not result.\nWhen a party seeking legal advice consults an attorney at law and secures that advice, the\nrelation of attorney and client is established prima facie. The absence of an agreement with\nrespect to the fee to be charged does not prevent the relationship from arising.\xe2\x80\x9d\nThe primary concern is whether and to what extent the attorney acquired confidential\ninformation. That question is not necessarily answered by the amount of time involved.\n"Even the briefest conversation between a lawyer and a client can result in the disclosure of\nconfidences." Consequently, a formal retainer agreement is not required before attorneys\nacquire fiduciary obligations of loyalty and confidentiality, which begin when attorney-client\ndiscussions proceed beyond initial or peripheral contacts. An attorney represents a client\xe2\x80\x94\nfor purposes of a conflict of interest analysis\xe2\x80\x94when the attorney knowingly obtains material\nconfidential information from the client and renders legal advice or services as a result.\nThe initial discussions between Disner and the Cohon and Gardner attorneys involved\nsubstantial amounts of material confidential information. Moreover, Disner did not receive\nthe information about Mobil\'s case theories, strategy, and analyses from a lay person who\nmight or might not be knowledgeable about which matters were significant. Instead, after\nreceiving the background information on the case, Disner participated in an extended\nbriefing with the attorneys conducting Mobil\'s defense against respondents\' claims.\nObviously, communications of that kind are likely to involve an efficient transfer of material\nconfidential information and attorney work product.\nThe record here shows without contradiction that Disner received material confidential\ninformation concerning respondents\' claims against Mobil. In his first telephone\nconversation with one of Mobil\'s attorneys, Disner discussed the substantive allegations,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c310\nthe procedural status, and Mobil\'s theories of the case. During their luncheon meeting,\nMobil\'s attorneys again briefed Disner on Mobil\'s theories and on its attorneys\' discovery\nstrategy, analyses of the issues, and assessment of the state of the case. Moreover, he\nacted on some of that information and provided Mobil\'s attorneys with the results of his own\nresearch. Although Disner stated that he did not discuss "the merits" of the case with\nattorneys or employees of the Shapiro firm, the firm\'s declarations fail to establish that\nMobil\'s confidences were unavailable to its adversaries\' attorneys, or that effective\nscreening procedures secured those confidences from disclosure.\nTherefore, the undisputed facts established that, for purposes of a conflict of interest\nanalysis, Disner represented Mobil. Consequently, Disner and the firm to which he was of\ncounsel, the Shapiro firm, represented opposing parties in the same litigation. The potential\nfor a breach of the duty of confidentiality, whether inadvertent or otherwise, is apparent. The\nrecord provides no basis for considering whether an ethical screen, or other means of\nprotecting Mobil\'s confidences, could serve the same prophylactic purpose as\ndisqualification. We turn, then, to the reasons for applying the rule of disqualification to\nattorneys of counsel to a firm.\nIMPUTED DISQUALIFICATION AND \xe2\x80\x9cOF COUNSEL\xe2\x80\x9d ATTORNEYS\n\nAs amicus curiae, the State Bar of California, observes, "The `of counsel\' designation has,\nover the years, come to mean a variety of things in jurisdictions across the nation."\nAttorneys who are of counsel to a firm may be permanent full-time practitioners who for\nvarious reasons are not on the traditional career path towards partnership in the firm. Of\ncounsel attorneys also may be part-time affiliates of a firm who have other personal or\nprofessional commitments, or they may be potential partners brought into a firm for a\nprobationary period.\nThe minimum requirements for designating an attorney in California as being of counsel to a\nfirm are found among the standards for communications that presumptively violate the\nprohibition against false or deceptive communications: "A `communication\' which states or\nimplies that a member or law firm is `of counsel\' to another lawyer or a law firm unless the\nformer has a relationship with the latter (other than as a partner or associate, or officer or\nshareholder pursuant to Business and Professions Code sections 6160-6172) which is\nclose, personal, continuous, and regular."\nWe agree with the State Bar\'s view that the essence of the relationship between a firm and\nan attorney of counsel to the firm "is the closeness of the `counsel\' they share on client\nmatters. Members of the public are encouraged to consult with those sharing an `of counsel\'\nrelationship with the expectation that the counselling resources of both are fully available to\nclients." The same view was reflected in the Bar Association of San Francisco\'s Formal\nOpinion No. 1985-1: "[A] firm which lists an attorney as `of counsel\' on its letterhead, shingle\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c311\nor listing is making an affirmative representation to its clients that the services of that\nattorney are available to clients of the firm."\nAs noted earlier, the need to protect client confidences can cause one attorney\'s conflict of\ninterest disqualification to be imputed to other attorneys in the same firm. When attorneys\npresumptively share access to privileged and confidential matters because they practice\ntogether in a firm, the disqualification of one attorney extends vicariously to the entire firm.\nThe vicarious disqualification rule recognizes the everyday reality that attorneys, working\ntogether and practicing law in a professional association, share each other\'s, and their\nclients\', confidential information. The expectation that attorneys associated together will\nshare confidences is reflected in the American Bar Association Model Rules of Professional\nConduct, rule 1.6, comment [8]: "Lawyers in a firm may, in the course of the firm\'s practice,\ndisclose to each other information relating to a client of the firm, unless the client has\ninstructed that particular information be confined to specified lawyers."\nThe close, personal, continuous, and regular relationship between a law firm and the\nattorneys affiliated with it as of counsel contains many of the same elements that justify the\nrule of vicarious disqualification applied to partners, associates, and members. An of\ncounsel attorney, particularly one frequently in the firm\'s offices or in contact with the firm\'s\nattorneys, may be consulted on a variety of matters without being formally identified as cocounsel. This close, fluid, and continuing relationship, with its attendant exchanges of\ninformation, advice, and opinions, properly makes the of counsel attorney subject to the\nconflict imputation rule, regardless of whether that attorney has any financial stake in a\nparticular matter.\nWe find persuasive amicus curiae the State Bar of California\'s conclusion in its 1993 ethics\nopinion on the subject: "[T]o the extent the relationship between a principal member [of the\nState Bar] or law firm and another member or law firm is sufficiently `close, personal,\nregular and continuous,\' such that one is held out to the public as `of counsel\' for the other,\nthe principal and `of counsel\' relationship must be considered a single, de facto firm for\npurposes of rule 3-310. Accordingly, if the `of counsel\' is precluded from a representation by\nreason of rule 3-310 of the California Rules of Professional Conduct, the principal is\npresumptively precluded as well, and vice-versa." The American Bar Association\nCommittee on Ethics and Professional Responsibility reached the same conclusion in its\nFormal Opinion No. 90-357: "There can be no doubt that an of counsel lawyer (or firm) is\n`associated in\' and has an `association with\' the firm (or firms) to which the lawyer is of\ncounsel, for purposes of both the general imputation of disqualification ... and the imputation\nof disqualification resulting from former government service.... Similarly, the of counsel\nlawyer is `affiliated\' with the firm and its individual lawyers for purposes of the general\nattribution of disqualifications under DR 5-105(d) of the Model Code." Notwithstanding the\nvariations to be expected across the nation on any point of law, the prevailing view is that\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c312\nfor purposes of disqualification, the of counsel attorney is considered to be affiliated with a\nfirm so that the disqualification of one from representation must be imputed to the other.\nIn order to designate themselves as of counsel, attorneys must have close, personal,\ncontinuous, and regular relationships with their affiliated firms. Consequently, the attorneys\nbrought together in these relationships frequently will have occasion to share client\nconfidences in the course of exchanging advice and performing legal services for those\nclients. The fundamental nature of the relationship makes a presumption of shared\nconfidences as appropriate for the of counsel attorney as it is for partners, associates, and\nmembers of law firms. From the clients\' and the public\'s perspective, the of counsel attorney\ncan hardly be distinguished from other attorneys who may be more closely tied to a firm\nfinancially. As a result, the need to preserve confidentiality and public confidence in the\nintegrity of the legal profession and judicial process require that of counsel attorneys be\nregarded as the same as partners, associates, and members of law firms for conflict of\ninterest issues.\nIn this case, the of counsel attorney obtained confidential information and provided legal\nservices to Mobil. For conflict of interest purposes, the attorney\'s involvement went beyond\ninitial or peripheral contacts and rose to the level for which fiduciary duties of confidentiality\nand loyalty properly can be imposed. This development meant that Disner and the Shapiro\nfirm represented adversaries in the same litigation, with the concomitant potential for a\nbreach of the duty of confidentiality.\nDisner\'s conflict of interest must be imputed to the Shapiro firm because of the public\ndesignation of their relationship. Consequently, Disner\'s conflict of interest must inevitably\nlead to the Shapiro firm\'s vicarious disqualification from representing respondents to assure\nthe preservation of Mobil\'s confidences and the integrity of the judicial process.\nQuestions:\n1. Why did the Supreme Court hold that the Shapiro firm was disqualified from\nrepresenting SpeeDee?\n2. How could the Shapiro firm have avoided disqualification?\n3. Could adopting \xe2\x80\x9cfirewall\xe2\x80\x9d have enabled the Shapiro firm to represent SpeeDee?\nKala v. Aluminum Smelting & Refining Company, Inc., 81 Ohio St. 3d 1 (1998)\nSummary: Attorney Pearson and the Spangenberg law firm represented Kala in an\naction against his former employer, Aluminum Smelting. During Kala\xe2\x80\x99s appeal, Pearson\nleft Spangenberg and joined the Duvin firm, which represented Aluminum Smelting in\nthe same action. Kala filed a motion to disqualify Duvin, which the Ohio Supreme Court\ngranted despite Duvin\xe2\x80\x99s efforts to firewall Pearson, because of the strong appearance of\nimpropriety.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c313\n\nLUNDBERG STRATTON, J.\nThe issue before the court is whether a law firm should be automatically disqualified from\nrepresenting a party when an attorney leaves his or her former employment with a firm\nrepresenting a party and joins the law firm representing the opposing party, or whether that law\nfirm may overcome any presumption of shared confidences by instituting effective screening\nmechanisms. Although this issue has been dealt with in many other jurisdictions, this is a case\nof first impression for Ohio. To fairly decide this issue, we must consider the Disciplinary Rules\nand Ethical Considerations in the Ohio Code of Professional Responsibility, competing public\npolicy interests, and the guidance provided by federal case law.\nETHICAL PRINCIPLES\nA fundamental principle in the attorney-client relationship is that the attorney shall maintain the\nconfidentiality of any information learned during the attorney-client relationship. A client must\nhave the utmost confidence in his or her attorney if the client is to feel free to divulge all matters\nrelated to the case to his or her attorney.\nThe obligation of an attorney to preserve the confidences and secrets of the client continues\neven after the termination of the attorney\xe2\x80\x99s employment.\nIn addition, an attorney should avoid even the appearance of impropriety. Because of the\nimportance of these ethical principles, it is the court\'s duty to safeguard the preservation of the\nattorney-client relationship. In doing so, a court helps to maintain public confidence in the legal\nprofession and assists in protecting the integrity of the judicial proceeding.\nWhen an attorney leaves his or her former employment and becomes employed by a firm\nrepresenting an opposing party, a presumption arises that the attorney takes with him or her any\nconfidences gained in the former relationship and shares those confidences with the new firm.\nThis is known as the presumption of shared confidences. Some courts have held that such a\nchange of employment results in an irrebuttable presumption of shared confidences that\nnecessitates the disqualification of the attorney (primary disqualification) and the entire new firm\n(imputed disqualification).\nCLIENT\'S RIGHT TO CHOOSE COUNSEL\nBalanced against the former client\xe2\x80\x99s interest in preventing a breach of confidence is the public\npolicy interest in permitting the opposing party\'s continued representation by counsel of his or\nher choice. Disqualification interferes with a client\'s right to choose counsel.\n\xe2\x80\x9cDisqualification, as a prophylactic device for protecting the attorney-client relationship, is a\ndrastic measure which courts should hesitate to impose except when absolutely necessary. A\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c314\ndisqualification of counsel, while protecting the attorney-client relationship, also serves to\ndestroy a relationship by depriving a party of representation of their own choosing.\xe2\x80\x9d\nThis issue has become increasingly important as the practice of law has changed. A review of\nthe historical development of disqualification issues reveals the early conflicts created by the\nclash of the above principles.\nHISTORY OF MOTIONS TO DISQUALIFY\nMany of the early disqualification cases arose out of charges of conflict of interest where\ngovernment attorneys left the public service and went into private practice. Early courts\nstruggled with the need to fashion a rule that would preserve the confidences of the government\nclient yet not discourage able attorneys from entering public service through fear of being locked\nforever into government service, unable to change positions.\n\xe2\x80\x9cIf past employment in government results in the disqualification of future employers from\nrepresenting some of their long-term clients, it seems clearly possible that government attorneys\nwill be regarded as \xe2\x80\x98Typhoid Marys.\xe2\x80\x99 Many talented lawyers, in turn, may be unwilling to spend a\nperiod in government service, if that service makes them unattractive or risky for large law firms\nto hire.\xe2\x80\x9d\nAs more and more private attorneys also began changing firms, motions to disqualify under the\nirrebuttable presumption of shared confidences increased, and inequities and abuses also\nbegan to surface. While some of these motions to disqualify were legitimate and necessary,\nsuch motions were also often misused to harass an opponent, disrupt the opponent\'s case, or to\ngain a tactical advantage, and therefore were viewed with increasing caution.\nAs a result, several federal cases began fashioning a way to deal with the competing interests\ncaused by increased mobility of attorneys and the rise of motions to disqualify. The Court of\nAppeals for the Sixth Circuit in Manning summed up the changing practice of law as follows:\nPerhaps these motions have become more numerous simply because the changing\nnature of the manner in which legal services are delivered may present a greater\nnumber of potential conflicts. Certainly, the advent of law firms employing hundreds of\nlawyers engaging in a plethora of specialties contrasts starkly with the former\npreponderance of single practitioners and small firms engaging in only a few practice\nspecialties. In addition, lawyers seem to be moving more freely from one association to\nanother, and law firm mergers have become commonplace. At the same time that the\npotential for conflicts of interest has increased as the result of these phenomena, the\navailability of competent legal specialists has been concentrated under fewer roofs.\nConsequently, these new realities must be at the core of the balancing of interests\nnecessarily undertaken when courts consider motions for vicarious disqualification of\ncounsel.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c315\n\nAs a result of the changing legal profession, federal courts and the ABA Model Rules of\nProfessional Conduct began allowing the use of various mechanisms to isolate an attorney who\nhad transferred employment. Although originally applied only to government attorneys, these\nmechanisms have now been extended to situations involving transfers of private counsel as\nwell.\nDEVELOPMENT OF STANDARDS FOR DISQUALIFICATION\nSeveral federal courts in addressing both primary and imputed disqualification have devised a\nthree-part test to determine whether disqualification is proper when one attorney leaves a firm\nand joins another firm representing an opposing party. We believe this test adequately covers\nmany different scenarios and will give the courts of Ohio guidance on disqualification issues.\nFirst, a court must determine whether a substantial relationship exists between prior and\npresent representations. If there is no substantial relationship, then no ethical problem exists.\nFor example, when an attorney had represented a client in a trademark infringement case, the\nCourt of Appeals for the Sixth Circuit denied disqualification in a later unrelated civil RICO case.\nSecond, if a substantial relationship is found between the current matter and the prior matter,\nthe court must examine whether the attorney shared in the confidences and representation of\nthe prior matter. There is a presumption that such confidences would also be shared among\nmembers of the prior firm, but that presumption may be rebutted.\nIn Freeman, the Court of Appeals for the Seventh Circuit, in setting the rules on primary\ndisqualification, instructed the trial court that it could \xe2\x80\x9crely on any of a number of factors, among\nthem being the size of the law firm, the area of specialization of the attorney, the attorney\xe2\x80\x99s\nposition in the firm, and the demeanor and credibility of witnesses at the evidentiary hearing.\xe2\x80\x9d\nIf the presumption of shared confidences within the prior firm is rebutted by such evidence, then\nthere is again no need for primary disqualification, as there are no confidences to be shared.\nHowever, if that presumption is not rebutted, and the attorney does or is presumed to possess\nclient confidences, primary disqualification results, and a presumption of shared confidences\narises between the attorney and the members of the attorney\'s new firm. The issue then is\nwhether a presumption of shared confidences will also disqualify the entire new firm (imputed\ndisqualification). Kala implies that this presumption should be irrebuttable and that once an\nattorney, particularly one as involved in the case as Pearson was, moves to opposing counsel\'s\nfirm, no steps can be taken to restore confidence so as to overcome the appearance of\nimpropriety; the entire firm must be disqualified.\nSome courts have taken this approach. New Jersey has refused to adopt the rebuttablepresumption approach, finding that there is no way to overcome the appearance of impropriety\nin a "side-switching attorney" case. Cardona, 942 F.Supp. at 976-977. The New Jersey courts\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c316\ncite the impossibility of proving when a breach has been made, as those lawyers within the new\nfirm are least likely to divulge such information. Judge Orlofsky in Cardona explained:\n"At the heart of every `side-switching attorney\' case is the suspicion that by changing sides, the\nattorney has breached a duty of fidelity and loyalty to a former client, a client who had freely\nshared with the attorney secrets and confidences with the expectation that they would be\ndisclosed to no one else. It is for this reason that the `appearance of impropriety doctrine\' was\nadopted to protect the public, our profession, and those it serves. In short, this much maligned\ndoctrine exists to engender, protect and preserve the trust and confidence of clients."\nOn the other hand, with the realities of modern-day practice, as discussed in the Manning case,\nsuch a hard-and-fast rule works an unfair hardship also. Ultimately, one must have faith in the\nintegrity of members of the legal profession to honor their professional oath to uphold the Code\nof Professional Responsibility, safeguarded by the precautions required to rebut the\npresumption of shared confidences. If used properly, the process of screening attorneys who\npossess client confidences from other members of a firm can preserve those confidences while\navoiding the use of the motion to disqualify as a device to gain a tactical advantage. Therefore,\nwe believe that the fairer rule in balancing the interests of the parties and the public is to allow\nthe presumption of shared confidences with members of the new firm to be rebutted.\nThus, the third part of the test on disqualification is whether the presumption of shared\nconfidences with the new firm has been rebutted by evidence that a "Chinese wall" has been\nerected so as to preserve the confidences of the client.56 The Chinese wall is the specific\ninstitutional screening mechanisms that will prevent the flow of confidential information from the\nquarantined attorney to other members of the law firm.\nFactors to be considered in deciding whether an effective screen has been created are whether\nthe law firm is sufficiently large and whether the structural divisions of the firm are sufficiently\nseparate so as to minimize contact between the quarantined attorney and the others, the\nlikelihood of contact between the quarantined attorney and the specific attorneys responsible for\nthe current representation, the existence of safeguards or procedures which prevent the\nquarantined attorney from access to relevant files or other information relevant to the present\nlitigation, prohibited access to files and other information on the case, locked case files with\nkeys distributed to a select few, secret codes necessary to access pertinent information on\nelectronic hardware, instructions given to all members of a new firm regarding the ban on\nexchange of information, and the prohibition of the sharing of fees derived from such litigation.\n\n56\n\n\xe2\x80\x9cChinese wall" has become the legal term to describe a \xe2\x80\x9cprocedure which permits an attorney involved\nin an earlier adverse role to be screened from other attorneys in the firm so as to prevent disqualification\nof the entire law firm simply because one member of firm previously represented a client who is now an\nadversary of the client currently represented by the firm.\xe2\x80\x9d Black\'s Law Dictionary (6 Ed.Rev.1990) 240.\nThis term refers historically to the Great Wall of China, which served ancient Chinese emperors as a\nbarrier to invasion. Ironically, however, the Great Wall of China was of limited military value. The concept\nis also referred to in cases and commentary as "screening devices," "ethical screens," or "institutional\nmechanisms for screening." [Editor\xe2\x80\x99s note: Screening procedures are now typically called \xe2\x80\x9cfirewalls.\xe2\x80\x9d]\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c317\nA very strict standard of proof must be applied to the rebuttal of this presumption of shared\nconfidences, however, and any doubts as to the existence of an asserted conflict of interest\nmust be resolved in favor of disqualification in order to dispel any appearance of impropriety.\nSome courts have held that unrebutted affidavits attesting to a Chinese wall are sufficient to\nprevent disqualification. However, we reject such a bright-line test, as the court should maintain\ndiscretion to weigh issues of credibility. The court should be free to assess the reputation of an\nattorney and law firm for integrity and honesty. The court should also be free to balance the\nappearance of impropriety against the protections of a Chinese wall. For example, suppose a\nsole practitioner representing a plaintiff switches sides to a five-person defense firm\nrepresenting the opposing party, leaving his former client to seek new counsel. The appearance\nof impropriety in such a fact pattern may be impossible to overcome.\nIf applied properly, screening mechanisms to insulate a quarantined attorney from the rest of the\nfirm can protect client confidences while allowing for attorney mobility and the right of a client to\nchoose counsel.\nADDITIONAL FACTORS TO CONSIDER IN MOTIONS TO DISQUALIFY\nIn addition to the screening devices, there are other important factors to be considered by the\ntrial court. First, the screening devices must be employed as soon as the disqualifying event\noccurs. Very few cases address how early the disqualifying event occurs. In the Manning case,\na conflict arose with the attorney\'s former firm only after the attorney, with the former client\'s\nknowledge, had moved to an uninvolved law firm. In Cromley, the attorney and the new firm\nagreed that \xe2\x80\x9cabsolutely nothing of a substantive nature regarding the instant lawsuit would occur\nuntil decisions were made and the clients were made aware of them.\xe2\x80\x9d Other cases reviewed\nhave been silent as to the issue of when screening procedures were timely employed, although\nall cases agree that the screens must be in place when the attorney joins the firm. Instituting\nscreens after a motion to disqualify is too late. Accordingly, a court must weigh the timeliness of\nthe screening devices.\nA second factor to consider is the hardship that a client would incur in obtaining new counsel if a\nmotion to disqualify is granted. Hardship may be more of an issue if a conflict arose after a\ntransfer. However, hardship may not carry much weight in a \xe2\x80\x9cside-switching\xe2\x80\x9d case. Ironically,\nwhere an attorney switches sides and joins an opposing counsel\xe2\x80\x99s firm, the attorney has de\nfacto deprived his or her first client of the attorney of that client\'s choice, namely himself or\nherself. If the attorney has been lead counsel, other counsel in the firm must spend time and\neffort to take over the lead. If no one remaining in the prior firm is able to handle the matter, or if\nthe attorney was a sole practitioner, the former client must seek out new counsel and incur the\nburden and expense created by the switch. In this scenario, the departing attorney has created\na competing hardship for his or her former client, and the claim by the new firm of hardship\ncreated by its own doing in accepting the new attorney into the firm may no longer be\npersuasive. These are matters that should be left to the trier of fact to weigh.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c318\nIn addition, a law firm contemplating hiring counsel who had been directly involved on the\nopposing side also has a duty to disclose to its own client that such a hiring may place the firm\nin conflict and could result in disqualification. The law firm may have to subordinate its desire to\naugment its staff against its duties to its client and avoid placing the firm\'s interests above the\nclient\'s interests.\nFinally, the court should hold an evidentiary hearing on a motion to disqualify and must issue\nfindings of fact if requested based on the evidence presented. Because a request for\ndisqualification implies a charge of unethical conduct, the challenged firm must be given an\nopportunity to defend not only its relationship with the client, but also its good name, reputation\nand ethical standards. In Analytica, the Court of Appeals for the Seventh Circuit summarized the\nsituation as follows:\nAn attorney\xe2\x80\x99s and/or a law firm\xe2\x80\x99s most valuable asset is their professional reputation for\ncompetence, and above all honesty and integrity, which should not be jeopardized in a\nsummary type of disqualification proceeding of this nature. As court proceedings are\nmatters of public record, a news media report concerning a summary disqualification\norder, based on a scant record of this type, can do irreparable harm to an attorney\'s or\nlaw firm\'s professional reputation. We must recognize that the great majority of lawyers,\nas officers of the court, do conduct themselves well within the bounds of the Code of\nProfessional Responsibility.\nTHE REBUTTABLE-PRESUMPTION TEST FOR MOTIONS TO DISQUALIFY\nIn conclusion, we hold that in ruling on a motion for disqualification of either an individual\n(primary disqualification) or the entire firm (imputed disqualification) when an attorney has left a\nlaw firm and joined a firm representing the opposing party, a court must hold an evidentiary\nhearing and issue findings of fact using a three-part analysis:\n(1) Is there a substantial relationship between the matter at issue and the matter of the\nformer firm\'s prior representation;\n(2) If there is a substantial relationship between these matters, is the presumption of\nshared confidences within the former firm rebutted by evidence that the attorney had no\npersonal contact with or knowledge of the related matter; and\n(3) If the attorney did have personal contact with or knowledge of the related matter, did\nthe new law firm erect adequate and timely screens to rebut a presumption of shared\nconfidences with the new firm so as to avoid imputed disqualification?\nAPPLICATION OF TEST TO THIS CASE\nUnder the facts of this case, Pearson clearly met the substantial-relationship test and\npossessed client confidences, as he was the lead attorney on Kala\'s lawsuit. Thus, the first two\nparts of the test require disqualification of Pearson and raise a presumption in favor of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c319\ndisqualification of Duvin. No one disputes that Pearson, himself, cannot work further on the\ncase.\nTherefore, we must determine whether the entire firm should be disqualified under the third part\nof the analysis, imputed disqualification. The appellate court took evidence in the form of\naffidavits but denied the parties oral argument. The appellate order consisted of the following\nfindings:\n"Motion by appellant to disqualify counsel for defendants/appellees is granted. Appellee\'s new\ncounsel shall file a notice of appearance on or before May 31, 1996."\nTherefore, we must examine the record we have before us, which consists of exhibits and\naffidavits filed while the parties were briefing the disqualification question in the court of appeals.\nKala retained Pearson and the Spangenberg firm in 1993 as his attorneys. From 1993 through\n1995, Kala trusted Pearson, relied upon him as his attorney, and disclosed all matters pertaining\nto his case involving his former employer, Aluminum Smelting. Pearson proceeded to file an\nappeal after the directed verdict and apparently even participated in a settlement conference\nwith the Eighth District Court of Appeals on November 13, 1995. On January 8, 1996, Pearson\nobtained a continuance to file Kala\'s appellate brief. On January 22, 1996, Pearson left the\nSpangenberg firm and joined the Duvin firm, which was representing Aluminum Smelting and\nhad been throughout the prior proceedings with Kala. The only conclusion that can be reached\nfrom the record is that Pearson was negotiating with Duvin while still actively representing Kala\nwithout disclosing to Kala his negotiations.\nThe appearance of impropriety is so strong that nothing that the Duvin firm could have done\nwould have had any effect on Kala\'s perception that his personal attorney had abandoned him\nwith all of his shared confidences and joined the firm representing his adversary while the case\nwas still pending. No steps of any kind could possibly replace the trust and confidence that Kala\nhad in his attorney or in the legal system if such representation is permitted. This is the classic\n"side-switching attorney" case.\nWe find that under this set of egregious facts, the appearance of impropriety was so great that\nthe attempts made by Duvin to erect a Chinese wall were insufficient to overcome the\nappearance of impropriety. Accordingly, we affirm the disqualification ruling of the court of\nappeals.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c320\n4.7: Specific Conflicts of Interest\nI was gambling in havana, I took a little risk. Send lawyers, guns, and money, Dad, get me out\nof this, hiyah!57\nUnder the Model Rules of Professional Conduct, special rules govern the attorney-client\nrelationship in specific circumstances, and define obligations imposed by the attorney\xe2\x80\x99s fiduciary\nduties. As discussed in Class 9, attorneys may engage in financial transactions with their clients\nonly if transaction is fair and reasonable to the client, and the attorney obtains the client\xe2\x80\x99s\ninformed consent to the transaction in writing. But Rule 1.8 also imposes other specific\nobligations on attorneys in relations to other potential agreements and transactions with their\nclients. For example, it requires attorneys to obtain informed consent before using confidential\nclient information to the detriment of the client, and limits the ability of attorneys to receive gifts\nfrom or makes loans to their clients.\nRule 1.8: Current Clients: Specific Rules\na. A lawyer shall not enter into a business transaction with a client or knowingly acquire an\nownership, possessory, security or other pecuniary interest adverse to a client unless:\n1. the transaction and terms on which the lawyer acquires the interest are fair and\nreasonable to the client and are fully disclosed and transmitted in writing in a\nmanner that can be reasonably understood by the client;\n2. the client is advised in writing of the desirability of seeking and is given a\nreasonable opportunity to seek the advice of independent legal counsel on the\ntransaction; and\n3. the client gives informed consent, in a writing signed by the client, to the\nessential terms of the transaction and the lawyer\'s role in the transaction,\nincluding whether the lawyer is representing the client in the transaction.\nb. A lawyer shall not use information relating to representation of a client to the\ndisadvantage of the client unless the client gives informed consent, except as permitted\nor required by these Rules.\nc. A lawyer shall not solicit any substantial gift from a client, including a testamentary gift,\nor prepare on behalf of a client an instrument giving the lawyer or a person related to the\nlawyer any substantial gift unless the lawyer or other recipient of the gift is related to the\nclient. For purposes of this paragraph, related persons include a spouse, child,\ngrandchild, parent, grandparent or other relative or individual with whom the lawyer or\nthe client maintains a close, familial relationship.\nd. Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate\nan agreement giving the lawyer literary or media rights to a portrayal or account based in\nsubstantial part on information relating to the representation.\ne. A lawyer shall not provide financial assistance to a client in connection with pending or\ncontemplated litigation, except that:\n57\n\nWarren Zevon, Lawyers, Guns and Money, Excitable Boy (1978).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c321\n1. a lawyer may advance court costs and expenses of litigation, the repayment of\nwhich may be contingent on the outcome of the matter; and\n2. a lawyer representing an indigent client may pay court costs and expenses of\nlitigation on behalf of the client.\nf. A lawyer shall not accept compensation for representing a client from one other than the\nclient unless:\n1. the client gives informed consent;\n2. there is no interference with the lawyer\'s independence of professional judgment\nor with the client-lawyer relationship; and\n3. information relating to representation of a client is protected as required by Rule\n1.6.\ng. A lawyer who represents two or more clients shall not participate in making an aggregate\nsettlement of the claims of or against the clients, or in a criminal case an aggregated\nagreement as to guilty or nolo contendere pleas, unless each client gives informed\nconsent, in a writing signed by the client. The lawyer\'s disclosure shall include the\nexistence and nature of all the claims or pleas involved and of the participation of each\nperson in the settlement.\nh. A lawyer shall not:\n1. make an agreement prospectively limiting the lawyer\'s liability to a client for\nmalpractice unless the client is independently represented in making the\nagreement; or\n2. settle a claim or potential claim for such liability with an unrepresented client or\nformer client unless that person is advised in writing of the desirability of seeking\nand is given a reasonable opportunity to seek the advice of independent legal\ncounsel in connection therewith.\nLoans to Clients\nIn its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the\nstreets and steal loaves of bread.58\nIn re Morse, 748 S.E.2d 921 (Ga. 2013)\nSummary: Attorney Jack Morse lent a client $1,400 to avoid foreclosure and possible\njail time for his violation probation. Even though his client repaid the loan in full, Morse\nadmitted that this was a violation of Model Rule 1.8(e). Accordingly, the Supreme Court\nof Georgia imposed a voluntary reprimand on Morse.\nPER CURIAM.\nThis disciplinary matter is before the Court on a Petition for Voluntary Discipline filed by\nRespondent Jack O. Morse (State Bar No. 525800) pursuant to Bar Rule 4-227(b)(2) before a\n58\n\nAnatole France, The Red Lily (1894).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c322\nformal complaint was issued. In his petition, Morse admits violating Rule 1.8(e) of the Georgia\nRules of Professional Conduct set forth in Bar Rule 4-102(d). Although such a violation is\npunishable by public reprimand, Morse requests the imposition of a Review Panel reprimand.\nThe State Bar has no objection.\nMorse, who has been a member of the State Bar since 1972, admits that while representing a\nclient in a personal injury claim, he lent the client $1,400 for the client\'s use in avoiding\nforeclosure and possible jail time for his violation of probation. Although the client repaid the\nloan in full, Morse admits that he violated Rule 1.8(e). He asserts that while he has had three\ninstances of prior discipline (having received a 90-day suspension in 1996, and Review Panel\nreprimands in both 1993 and 1998 \xe2\x80\x94 one of which was for similar misconduct), he has had no\ndisciplinary matters for an extended period of time. He further asserts that since 1998, he has\nshown a strong regard for the professional standards of conduct and asks that this Court\nconsider, in mitigation, his cooperative attitude with disciplinary authorities and the fact that the\nviolation occurred as a result of him attempting to assist the client, a longtime acquaintance.\nUnder these specific circumstances, we agree that imposition of a Review Panel reprimand is\nan appropriate sanction. Accordingly, we accept Morse\'s petition for voluntary discipline and\nhereby order that Morse receive a Review Panel reprimand in accordance with Bar Rules 4102(b)(4) and 4-220(b) for his admitted violation of Rule 1.8(e).\nPetition for voluntary discipline accepted. Review Panel reprimand.\nAll the Justices concur.\nBLACKWELL, Justice, concurring.\nI concur fully in the opinion of the Court, but I write separately to remind our readers that a\nlawyer providing financial assistance to a litigation client is not always a violation of Rule 1.8(e).\nWith two exceptions, Rule 1.8(e) provides that \xe2\x80\x9ca lawyer shall not provide financial assistance to\na client in connection with pending or contemplated litigation.\xe2\x80\x9d By its plain terms, the Rule only\nprohibits the provision of financial assistance to a litigation client to the extent of some\n\xe2\x80\x9cconnection\xe2\x80\x9d between the financial assistance on the one hand, and the litigation or\nrepresentation on the other. Absent such a \xe2\x80\x9cconnection,\xe2\x80\x9d a lawyer may provide financial\nassistance to a litigation client without running afoul of Rule 1.8(e).\nThis understanding not only is required by the plain terms of the Rule, but it also is perfectly\nconsistent with the three purposes of Rule 1.8(e). First, Rule 1.8(e) is intended to preserve the\nloyalty and independence that the lawyer owes to the client, loyalty and independence that\nmight be compromised if the lawyer obtained \xe2\x80\x9ctoo great a financial stake in the litigation.\xe2\x80\x9d\nSecond, the Rule is intended to \xe2\x80\x9cprevent clients from selecting a lawyer based on improper\nfactors,\xe2\x80\x9d considering that \xe2\x80\x9cunregulated lending to clients might generate unseemly bidding wars\nfor cases.\xe2\x80\x9d Third, the Rule is intended to restrain the pernicious practices of barratry,\nmaintenance, and champerty. As I see it, financial assistance to an existing client that has no\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c323\nconnection whatsoever with the litigation or representation of the client does not offend any of\nthe policies that the Rule is intended to promote.\nThis case is a little troubling to me because it appears from the record that Morse has been a\nfriend of his client for a long time, such that he might have provided financial assistance to his\nclient independent of the attorney-client relationship or the litigation, and indeed, even in the\nabsence of an attorney-client relationship or litigation. Lawyers can be generous, and it is not\nuncommon for lawyers to help out their kin, their friends, and their neighbors. Nevertheless,\nMorse has unequivocally admitted a violation of Rule 1.8(e), and as such, he has implicitly\nadmitted a connection between the financial assistance he provided and the litigation in which\nhe represented his client. For that reason, I am content to join the Court in accepting his petition\nfor voluntary discipline, and I am satisfied with the discipline that the Court has seen fit to\nimpose. I am authorized to state that Justice Hunstein joins in this concurrence.\nState ex rel. Oklahoma Bar Ass\xe2\x80\x99n v. Smolen, 17 P.3d 456 (Okla. 2000)\nSummary: The Oklahoma Bar Association brought an action against attorney Donald E.\nSmolen who made a loan to his client for living expenses in violation of Model Rule 1.8.\nSmolen challenged this action on the grounds that Model Rule 1.8 violated the equal\nprotection clause of the Fourteenth Amendment because it treats similarly situated\nclasses of litigants differently: those who need advances for living expenses and those\nwho need advances for litigation costs. Accordingly, the Oklahoma Supreme Court\napplied the rational basis test to determine that this disparate treatment was rationally\nrelated to legitimate goal of protecting clients and maintaining integrity of the Bar.\nTherefore, the Court imposed a 60 day suspension on Smolen.\nI. OVERVIEW\nComplainant, the Oklahoma Bar Association, alleged one count of misconduct warranting\ndiscipline against respondent attorney, Donald E. Smolen (Respondent). The complaint alleged\nthat Respondent had violated rule 1.8(e) of the Oklahoma Rules of Professional Conduct\n(ORPC), Okla. Stat. tit. 5, ch. 1, app. 3-A (1991) (prohibition against providing financial\nassistance to a client in connection with pending or contemplated litigation). Respondent\nreceived a public reprimand in 1992 for loaning money to clients. In an unpublished reprimand\nissued in 1987, the respondent received an eight-month suspension from the practice of law.\nThe 1987 suspension was imposed for violations of DR 1-102(A)(3) ("engaging in illegal\nconduct involving moral turpitude"), DR 1-102(A)(4) (engaging "in conduct involving dishonesty,\nfraud, deceit, or misrepresentation"), DR 9-102(B) (failing to preserve the "identity of funds and\nproperty of a client"), and rule 1.3 of the Rules Governing Disciplinary Proceedings (acting in a\nmanner "contrary to prescribed standards of conduct").\nIn the present matter, the parties have stipulated to the facts and recommended discipline. The\nProfessional Responsibility Tribunal (PRT) accepted the stipulations of fact, found that\nRespondent had violated rule 1.8(e), and recommended Respondent be publicly censured.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c324\n\nII. FACTS\nDuring Respondent\'s representation of Mr. Miles in a case before the Workers\' Compensation\nCourt, Respondent loaned Mr. Miles $1,200. The check to Mr. Miles recited that the money was\nfor travel expenses. Respondent admitted that the true purpose of the loan was for living\nexpenses because Mr. Miles\' home had been destroyed by fire. Without the loan, Mr. Miles\nindicated he would have to move to Indiana and would be unable to continue his medical\ntreatment or make court appearances. At the time of the loan, Mr. Miles was receiving\ntemporary total disability benefits of $426.00 a week from which Respondent\'s attorney fee was\nsubtracted. Mr. Miles received $384.00 a week before loan payments.\nRespondent\'s loan to Mr. Miles was interest free and without penalty or cost other than the\namount of the principal. Mr. Miles was to repay the loan at $100.00 a week from his temporary\ntotal disability benefits. Mr. Miles made three $100.00 payments on the loan. One of the\npayments was returned to Mr. Miles resulting in his paying only $200.00 on the loan.\nRespondent agreed to forego further repayment until final settlement of the Workers\'\nCompensation case.\nWhen Mr. Miles became involved in other legal matters, he sought an attorney to handle the\nadditional matters together with the workers\' compensation claim. After learning of Mr. Miles\nsearch for a new attorney, Respondent terminated the attorney-client relationship with Mr. Miles.\nThereafter, Mr. Miles hired Mr. Elias to represent him. During mediation over a fee dispute\nbetween Mr. Miles and Mr. Elias, the Tulsa County Bar Association learned of Respondent\'s\nloan and reported Respondent\'s conduct to the Oklahoma Bar Association.\nRespondent admits the loan to Mr. Miles is not an isolated incident. He testified that he had\nconsulted lawyers whose opinions are well respected in legal ethics, and it was their belief that\nRespondent\'s conduct would not violate rule 1.8(e). Respondent admits that his actions violate\nthe express language of rule 1.8(e). However, Respondent submits that he has not violated the\nintent of rule 1.8(e), and that rule 1.8(e) unconstitutionally treats clients who need humanitarian\nloans differently than clients who receive advances of litigation expenses and court costs.\nIII. ANALYSIS\nRule 1.8(e) of the ORPC under which Respondent was disciplined in 1992 for giving financial\nassistance to clients, provided:\nWhile representing a client in connection with contemplated or pending litigation, a\nlawyer shall not advance or guarantee financial assistance to a client, except that a\nlawyer may advance or guarantee the expenses of litigation, including court costs,\nexpenses of investigation, expenses of medical examination, and costs of obtaining and\npresenting evidence, provided the client remains ultimately liable for such expenses.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c325\nBased on the Model Rules adopted by the American Bar Association, rule 1.8(e) was amended\nin 1993 to provide:\nA lawyer shall not provide financial assistance to a client in connection with pending or\ncontemplated litigation, except that a lawyer may advance court costs and expenses of\nlitigation, the repayment of which may be contingent on the outcome of the matter.\nThe primary change under the Model Rules is that the repayment of litigation expenses and\ncourt costs may be contingent on the outcome of the case. Both the 1992 and 1993 versions of\nrule 1.8(e) unambiguously prohibit a lawyer from advancing living expenses to clients. In this\ncase, Respondent advanced funds for living expenses to be repaid from the client\'s worker\'s\ncompensation benefits, an action admittedly prohibited by rule 1.8(e).\nMost authorities prohibit a lawyer from providing financial assistance to clients for living\nexpenses during representation. In 1991, a draft of a provision of the Restatement of Law would\nhave allowed a lawyer to make or guarantee a loan to a client "if the loan was needed to enable\nthe client to withstand delay in litigation that otherwise might unjustly induce the client to settle\nor dismiss a case because of financial hardship rather than on the merits." However, in 1996 the\nAmerican Law Institute Council decided the rule was ill-advised, and, in 1998, the provision was\nremoved. The final draft of the Restatement would not allow a lawyer to make or guarantee a\nloan to a client except for litigation expenses and court costs. Rule 1.8(e) of the American Bar\nAssociation\'s Model Rules of Professional Conduct adopted in 1983 prohibits a lawyer from\nadvancing funds to a client for living expenses. A proposal to allow lawyers to advance clients\nfunds for living expenses was rejected by the American Bar Association House of Delegates.\nTwenty-nine states have adopted the current version of ABA Model Rule 1.8(e) which allows\nrepayment of litigation costs to be contingent on the outcome of the case but forbids advances\nfor living expenses. Fourteen other states follow the ABA Model Code of Professional\nResponsibility, adopted in 1969, or a version of the Model Rules or Model Code that requires\nthe client remain liable for litigation expenses and court costs and prohibits advances for living\nexpenses. Only eight states explicitly allow lawyers to advance or guarantee loans to clients for\nliving expenses: Alabama, California, Louisiana, Minnesota, Mississippi, Montana, North\nDakota, and Texas.\nOnly one state has refused to discipline a lawyer for advancing funds to clients for living\nexpenses during representation. The Louisiana State Supreme Court stated that advancing\nmoney to an indigent client for necessary living expenses during representation did not violate\nthe Louisiana rules of legal ethics. Even though the court questioned the constitutionality of the\nrule, the court based its conclusion on a finding that the conduct did not violate the rule\'s intent.\nThe lawyer was disciplined for making advances which were not based on the client\'s needs. In\nThe Alaska Supreme Court held the rule did not unconstitutionally deny or interfere with the\nclient\'s access to the courts. Further, no court has invalidated rule 1.8(e) based on a\nconstitutional infirmity.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c326\nWe have has previously disciplined lawyers for providing financial assistance to clients for\npurposes other than litigation expenses and court costs. Several other courts addressing the\nquestion have also imposed discipline on lawyers for like conduct. The Mississippi Supreme\nCourt expressed its concern that allowing a lawyer to advance funds to a client for living\nexpenses would \xe2\x80\x9cgenerate unseemly bidding wars for cases and inevitably lead to further\ndenigration of our civil justice system.\xe2\x80\x9d\nA. INTENT OF THE RULE\nRespondent admits violating rule 1.8(e) but argues that he should not be disciplined because he\ndid not violate the intent of the rule. What Respondent in reality requests is that we adopt an\nexception to the rule that allows attorneys to make loans to clients for necessary living expenses\nafter the attorney-client relationship is established.\nThe rule against attorneys providing financial assistance to clients for living expenses is based\non the common-law prohibitions against practice of champerty and maintenance. The evils\nassociated with champerty and maintenance intended to be prevented by rule 1.8(e)\'s\nprohibition are: (1) clients selecting a lawyer based on improper factors, and (2) conflicts of\ninterest, including compromising a lawyer\'s independent judgment in the case and creating the\npotentially conflicting roles of the lawyer as both lawyer and creditor with divergent interests.\nRespondent argues that he advanced the funds only after the attorney-client relationship was\nestablished with repayment to be made from benefits which had already been awarded, and the\nloan was for humanitarian purposes. Thus, he posits that the evils of champerty and\nmaintenance are absent here and that he should not be disciplined because he did not violate\nthe intent of the rule. We reject this argument as have most other states. First, Mr. Miles\'\nworkers\' compensation claim had not been completely resolved. He was receiving only\ntemporary benefits at the time Respondent made the loan, and, at least, a potential settlement\nregarding permanent disability remained pending. Second, it would be unrealistic to conclude\nthat even if Respondent does not publicize that he makes loans to clients for living expenses,\npotential clients would not learn of Respondent\'s practice from existing and past clients. Thus,\npotential clients may base their decision to retain Respondent on improper inducements. The\nfact that the loan was for humanitarian purposes may be a mitigating factor. Nonetheless,\nRespondent violated rule 1.8(e).\nGiven that the Restatement and the ABA have rejected the same exception tendered by\nRespondent and an overwhelming number of courts have also declined to adopt Respondent\'s\nproposed exception, we also decline to make the ad hoc exception to rule 1.8(e) advocated by\nRespondent. We are not unsympathetic to the plight of litigants. However, because of the\npotential ethical problems which can arise from a lawyer advancing clients money for living\nexpenses, the explicit prohibition against such conduct in the Oklahoma Rules of Professional\nConduct, we believe Respondent should be disciplined.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c327\nB. CONSTITUTIONALITY\nRespondent asserts that rule 1.8(e) is invalid because it does not treat similarly situated classes\nof litigants equally. The Fourteenth Amendment to the United States Constitution provides: "No\nState shall make or enforce any law which shall deny to any person within its jurisdiction the\nequal protection of the laws." This same prohibition is present in article 2, section 7 of the\nOklahoma Constitution. The two classes of clients proposed by Respondent are those who\nneed advances for living expenses and those who need advances for litigation costs.\nThe deferential rational basis test is applied in constitutional challenges based on the equal\nprotection clause when the classification is not based upon an inherently suspect characteristic\nor jeopardizes a fundamental right. The divergent treatment must have only "some relevance to\nthe purpose for which the classification is made." Respondent does not argue that the\nclassification is based on an inherently suspect characteristic or that a fundamental right is\njeopardized. Thus, Respondent\'s challenge is analyzed under the rational basis test.\nAssuming for purposes of argument that the two classes posed by Respondent are similarly\nsituated, rule 1.8(e)\'s disparate treatment of advances for litigation expenses and court costs\nand advances for all other expenses is based on legitimate goals and reflects the differences in\nliving expenses and litigation expenses and court costs. First, litigation expenses and court\ncosts are directly related to the actual litigation. Living and other expenses are not. Second,\nlitigation expenses and court costs are within a lawyer\'s expertise. Other expenses of clients are\nnot considered part of a lawyer\'s expertise. Third, it is a lawyer\'s duty to advise his client on\nwhich litigation expenses and court costs are necessary for the litigation. It is not generally the\nlawyer\'s duty to advise his clients as to what other expenses are necessary. Fourth, a lawyer\ngenerally pays the litigation expenses and costs directly to the provider. In the case of other\nexpenses, the lawyer generally would give the money to the client, and there would be no\nguarantee that the money would be utilized for the loan\'s intended purpose.\nWe agree with the drafters of the Restatement and the ABA Model Rules that a rule allowing\nlawyers to make loans to clients for reasons other that advancing litigation expenses and court\ncosts is ill-advised. Because of the potentially inherent abuses in allowing lawyers to make\nloans to clients for reasons other than litigation expenses and court costs, the divergent\ntreatment is rationally related to a legitimate goal of protecting clients and maintaining the\nintegrity of the Bar. Respondent has failed to show that rule 1.8(e) is unconstitutional.\nIV. APPROPRIATE DISCIPLINE\nRespondent has been previously disciplined by this Court, once in 1987 and again in 1992. In\n1992, Respondent was publicly censured for the same misconduct with which he is presently\ncharged. He admits that the current loan is not an isolated incident. One of the purposes of\ndiscipline is "deterrence of like behavior by both the respondent and other members of the bar."\nThis Court is not bound by the stipulated discipline of the parties. Because Respondent was\npreviously disciplined in 1987 for violations of ethical standards, was publicly censured in 1992\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c328\nfor the same misconduct for which he is being disciplined in this matter, and has admitted that\nthe current violation is not an isolated incident, we deem the appropriate discipline is a sixty-day\nsuspension.\nFixed-Fee Agreements\nAmerican Ins. Ass\xe2\x80\x99n v. Kentucky Bar Ass\xe2\x80\x99n, 917 S.W.2d 568 (Ky. 1996)\nSummary: The American Insurance Association and other insurance associations\nsought review of Court of Advisory Ethics Opinion prohibiting any lawyer from entering\ninto contract with an insurer to do all of the insurer\xe2\x80\x99s defense work for a set fee. The\nSupreme Court held that such set fee arrangements are prohibited, because under rule\n1.8(f)(2), it interferes with the exercise of the attorney\xe2\x80\x99s independent professional\njudgment. Instead, \xe2\x80\x9cthe insurance company must hire members of the private bar to\nundertake representation of their insured.\xe2\x80\x9d\nSTUMBO, Justice.\nIn this consolidated action, Complainants \xe2\x80\x94 American Insurance Association, National\nAssociation of Independent Insurers, and State Farm Mutual Automobile Insurance Company\nand State Farm Fire and Casualty Company \xe2\x80\x94 timely filed a motion seeking review by this\nCourt of Advisory Ethics Opinion E-368 which was issued by the Board of Governors of\nRespondent, Kentucky Bar Association, and which appeared in the Fall 1994 issue of Kentucky\nBench & Bar. In addition, State Farm requests that this Court review that portion of\nUnauthorized Practice of Law Opinion U-36 which proscribes the use, by insurance companies,\nof salaried attorneys to provide defense services under the insurers\' policies of insurance.\nAfter carefully evaluating the opinions at issue, and the briefs filed and arguments advanced by\nboth Complainants and Respondent, we hereby approve and adopt E-368 as written, and\nchoose not to disturb U-36.\nAt issue in this action is the following question presented in E-368:\n(1) May a lawyer enter into a contract with a liability insurer in which the lawyer or his\nfirm agrees to do all of the insurer\'s defense work for a set fee?\nThe Board of Governors answered \xe2\x80\x9cno\xe2\x80\x9d to this question, and stated that the arrangement at\nissue would violate Kentucky Rules of Professional Conduct 1.7(b)[1] and 1.8(f)(2)[2], stating\ntherein \xe2\x80\x9cto some extent the lawyer becomes the insurer; and the lawyer stands to gain by\nlimiting the services rendered to the client.\xe2\x80\x9d The Board, indicating that the lawyer\xe2\x80\x99s duty to the\ninsured client was a function of the attorney-client relationship and not governed by or limited by\nthe terms of the insurance contract, expressed concern that this set fee arrangement would\nresult in the loss of control of the insured client vis-a-vis actions taken by counsel in the course\nof representation. The Board also noted that the insurer would take on a dual role in such a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c329\nsituation, in that \xe2\x80\x9cthe insurer wants to continue to promise the insured a defense in the contract\nof insurance, while limiting the extent of its undertaking in a side contract between the insured\'s\nlawyer and the insurer to which the insured is not a party.\xe2\x80\x9d The Board characterized the\ncircumstance presented in E-368 as but the latest issue to arise from attempts by insurers to cut\ncosts. One such cost-cutting measure, referenced in the \xe2\x80\x9cBackground\xe2\x80\x9d section of E-368 and\nmore fully discussed in U-36, involved the practice of insurers to attempt to provide defense\nservices directly through salaried attorney employees \xe2\x80\x94 a practice, the Board concluded, that\n\xe2\x80\x9cis not permitted in Kentucky, for in addition to the obvious conflicts of interest that would be\npresented by such an arrangement, the practice would violate the law governing unauthorized\npractice.\xe2\x80\x9d\nMore specifically, this issue was addressed in U-36 through the following question:\nMay an insurance company employ in-house counsel (salaried employees) to represent\ntheir insured after a lawsuit has been filed?\nThis question was answered in the negative. The opinion relied upon both Canon 3 of the ABA\nCode of Professional Responsibility, which governs the areas of unauthorized practice of law,\nand SCR 3.020, which defines the practice of law in Kentucky and recognizes that \xe2\x80\x9cnothing\nherein shall prevent any natural person not holding himself out as a practicing attorney from\ndrawing any instrument to which he is a party without consideration unto himself therefor.\xe2\x80\x9d The\nopinion also cited to long-standing Kentucky case law which proscribes a corporation from being\nlicensed to practice a learned profession, such as law. Ethical rules and legal precedent were\nmerged in the opinion to reach the conclusion that in the typical action on an insurance contract,\nthe insured, and not the insurer, was the party-defendant, and that, therefore, \xe2\x80\x9cthe insurance\ncompany must hire members of the private bar to undertake representation of their insured.\xe2\x80\x9d\nComplainants contend that not only did the Board paint with too broad a brush in applying U-36\nto E-368, but, that the former opinion, of itself, represents only a minority view of the\ninterpretation of the ABA Code of Professional Responsibility, and is, in fact, antithetical to the\nprecedent which attempts to follow the intent of the Code. Complainants seek support from the\nethics opinions and case law of other jurisdictions which allow house counsel to provide\ninsurance defense services. Additionally, State Farm asserts that Gardner v. North Carolina\nState Bar, which is referenced in E-368 and which this Complainant terms \xe2\x80\x9cthe sole court\ndecision holding that the use of claim litigation counsel constitutes the unauthorized practice of\nlaw,\xe2\x80\x9d lacks substance. State Farm points out that this decision has been rejected by every court\nto consider it.\nIn its attack upon U-36, State Farm goes so far as to characterize the opinion as \xe2\x80\x9cinconsistent\nwith law and logic.\xe2\x80\x9d The \xe2\x80\x9claw,\xe2\x80\x9d to which State Farm refers, appears to be contained in those\ndecisions of other jurisdictions which allow insurers to provide insurance defense services\nthrough salaried attorney employees. Such precedent, as State Farm explains, is based upon\n"the identity or community of financial interest between the insured and insurer in defending the\nclaim and because of the insurer\'s contractual obligation to defend the insured at the insurer\'s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c330\nexpense." The "logic," to which this Complainant refers, appears to lie within this rubric of\n"community of interest." For example, State Farm indicates that it is contradictory for U-36 to\nrequire the insurer to hire outside counsel to represent the insured once a complaint has been\nfiled, and yet to allow an insurer\'s employees, including attorneys, to take actions necessary to\nprotect the interests of both the insurer and its insured prior to the filing of a complaint, as this\nlatter activity is "inextricably intertwined with any defense of the insured." State Farm also\nasserts that as the prohibition against the unauthorized practice of law is designed to protect the\npublic "from the incompetent, the untrained and the unscrupulous in the practice of law," who\ncould be more competent, trained and scrupulous therein than claims litigation counsel\nemployed by insurance companies who, because their practice is concentrated in automobile\nand premises liability law, are able to specialize and become more proficient in the disposition of\nsuch matters. State Farm implies that the legal system as a whole would benefit from such\nhouse counsel, in that, as the compensation of these attorneys is not tied to billable hours, they\nmay be apt to dispose of these cases more quickly.\nNotwithstanding the trends of other jurisdictions, any alleged nonsensical application of the\nprohibition against the unauthorized practice of law, and the untapped resource of "competent,\ntrained and scrupulous" in-house insurance defense counsel as pipe cleaners for a clogged\nlegal system, we do not feel that U-36 deserves review. The age-old adage of "if it ain\'t broke,\ndon\'t fix it" seems appropriate in disposing of Complainants\' argument herein, especially in light\nof the fact that U-36 first surfaced nearly fifteen years ago and there is now no compelling\nreason to overrule the more than fifty years of legal precedent which recognizes the principles\noutlined in that opinion. "There is scarcely any judicial dissent from the proposition that a\ncorporation cannot lawfully engage in the practice of law." Moreover, "a corporation cannot\nobtain license to practice law, since it is wholly incapable of acquiring the educational\nqualifications necessary to obtain such license, nor can it possess in its corporate name the\nnecessary moral character required therefor." Nothing has changed since the rendering of\nKendall and Hobson, or since the adoption of U-36, to assuage the moral dilemmas and ethical\nconcerns connected to the unauthorized practice of law. In fact, no situation is more illustrative\nof the inherent pitfalls and conflicts therein than that in which house counsel defends the insured\nwhile remaining on the payroll of the insurer. "No man can serve two masters," regardless here\nof either any perceived "community of interest," or Complainants\' Pollyanna postulate that\nhouse counsel will continue to provide undivided loyalty to the insured. Complainants\' pleas for\nlogic are unpersuasive, as we are inclined to view U-36 in the way in which Respondent\ncharacterizes the opinion \xe2\x80\x94 as a prophylactic measure, not unlike the imputed disqualification\nrules. See Rule 1.10. As such, we believe that U-36 logically discerns when house counsel\nwould fall into that precarious position between employee of insurer and advocate of insured,\nand, thus, logically prevents the occurrence of such a happening, and its onerous fallout.\nMoreover, we are unswayed by Complainants\' reliance on the practices of other jurisdictions\nand what amounts to an \xe2\x80\x9ceveryone else is doing it, why can\xe2\x80\x99t we\xe2\x80\x9d argument. In State Farm Mut.\nAuto. Ins. Co. v. Reeder, the task of this Court was to evaluate our state\xe2\x80\x99s Unfair Claims\nSettlement Practices Act to determine if a third-party claimant injured by an insurance\ncompany\xe2\x80\x99s violation of that statute could maintain a private right of action for damages. In our\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c331\ndecision, we were unaffected by the \xe2\x80\x9csubstantial split in authority among other states as to\nwhether individuals can maintain an action under their respective state laws.\xe2\x80\x9d In determining\nthat such a cause of action did exist in the Commonwealth, we concluded that \xe2\x80\x9cwhether other\nstates permit private individuals to maintain claims is based upon their particular statutory\nsystem and is of no consequence here. Our decision must be based on the language of the\nKentucky law.\xe2\x80\x9d Likewise, the Kentucky Rules of Professional Conduct and the means by which\nthis state oversees the conduct of its attorneys are personal to Kentucky. \xe2\x80\x9cThe right to prescribe\nsuch rules as are necessary to qualify, regulate, and control attorneys as officers of the court is\na right of self-preservation.\xe2\x80\x9d That other jurisdictions govern the practice of law differently, or\neven allow for the unauthorized practice of law, is of no concern to us in this matter.\nAs for E-368, Complainants assert that there is no language within our Rules of Professional\nConduct which prevents an attorney and an insurer from entering into an agreement whereby\nthe attorney agrees to perform all of the insurer\xe2\x80\x99s defense work for a set fee. In support,\nComplainants analogize the set fee to other alternative billing methods \xe2\x80\x94 such as retainers and\ncontingency fees \xe2\x80\x94 and argue that there exists no real difference between these latter, more\naccepted arrangements, and the set fee. Moreover, American and National contend that if any\ntype of fee arrangement is to be viewed as suspect, it is the hourly-based fee, which, these\nComplainants argue, is vulnerable to \xe2\x80\x9cpadding,\xe2\x80\x9d and even creates a conflict of interest wherein\nthe client has incentive to control costs by controlling counsel. The necessity to be free to\nexercise independent judgment in order that the attorney may adequately represent the insured\nis not, according to Complainants, jeopardized by the set fee arrangement, as the form of\ncompensation is not as significant a factor in evaluating the propriety of the attorney-client\nrelationship as, for example, whether or not the attorney has a personal interest in the outcome\nof the litigation. American and National assert that the high standards of ethical conduct with\nwhich attorneys must comply do not mandate a per se prohibition on set fee arrangements as\nsuch \xe2\x80\x9ca blanket prohibition is overbroad and does nothing to protect the integrity of the\nprofession.\xe2\x80\x9d Likewise, State Farm maintains that these ethical standards, which include\ncounsel\xe2\x80\x99s implied duty of loyalty, mandate zealous representation of the insured, even if the set\nfee has been exhausted. Complainants remind us that not only does this Court have the power\nto defend the attorney-client relationship, but that, should this relationship break down and the\ninsured incur damage, the insured would most likely have a cause of action against the attorney\nor the insurer or both.\nTaking these latter propositions first, we agree that this Court does indeed have the power to\nprotect the attorney-client relationship, and is, herein, exercising such power by adopting E-368\nas written. Moreover, we do not take comfort, as Complainants do, in knowing that the insured,\naggrieved by inadequate representation occasioned by the set fee arrangement, could proceed\nagainst the attorney and/or the insurer. Such recourse requires that the insured first suffer a\nharm, a circumstance which cannot be reconciled with this Court\xe2\x80\x99s view that the interest of the\ninsured is to be protected. We also do not agree with Complainants\' contention that the form of\ncompensation has little relevance in examining the attorney-client relationship. To the contrary,\na set fee arrangement enables the insurer to constrain counsel for the insured by, in effect,\nlimiting the defense budget \xe2\x80\x94 a practice that Respondent cautioned, in E-331, could create\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c332\nethical problems similar to those herein. We agree with Respondent that the pressures exerted\nby the insurer through the set fee interferes with the exercise of the attorney\'s independent\nprofessional judgment, in contravention of Rule 1.8(f)(2). The set fee arrangement also clashes\nwith Rule 1.7(b) in that it creates a situation whereby the attorney has an interest in the outcome\nof the action which conflicts with the duties owed to the client: quite simply, in easy cases,\ncounsel will take a financial windfall; in difficult cases, counsel will take a financial loss. Finally,\nComplainants\' rationale that other, more commonly used and less restricted billing methods are\nnot as bad as, just as bad as, or worse, than the set fee does not influence us in our review of\nE-368.\nComplainants maintain that set fee arrangements do not create impermissible conflicts of\ninterest between the insurance defense attorney and the insured. In support, Complainants\nagain take solace with our Rules of Professional Conduct and contend that ethical constraints\ndo not allow for the scope of representation to be dependent upon the fee counsel is to be paid.\nAdditionally, Allstate and National retreat to the abstract and assert that potential conflicts of\ninterest are everywhere, and not just confined to set fee arrangements. These Complainants\nargue that there is no rational basis which would support a conclusion that one form of\nemployment is more likely to generate conflicts than another, especially after considering that\nthere is no guarantee that the attorney stands to substantially profit from a set fee arrangement.\nMoreover, State Farm contends that the potential for conflict is very often lacking, because in\ngeneral, the interests of the insurer and the insured are aligned. According to State Farm, only\nwhen the coverage is in dispute is there any real conflict between these parties.\nWe dispose of these arguments by first stressing that the mere appearance of impropriety is just\nas egregious as any actual or real conflict. Therefore, E-368, in the same manner as U-36, acts\nas a prophylactic device to eliminate the potential for a conflict of interest or the compromise of\nan attorney\xe2\x80\x99s ethical and professional duties. Furthermore, we do not wear the blinders that\nComplainants apparently have in place, for we view the situation surrounding the set fee\nagreement as ripe with potential conflicts. Respondent was able to cite to nineteen such\nconflicts, including representation of the insured which becomes more complex than anticipated,\nresulting in financial hardship for the attorney; policy and/or coverage defenses asserted by the\ninsurer against the insured; and disagreement between the insured and the insurer with regard\nto settlement negotiations. Moreover, we do not believe that in most instances the interests of\nthe insured and the insurer are alike, but are more apt to agree with Respondent\xe2\x80\x99s contention\nthat while the insured and the insurer may share some common interests, the two parties are\nsubject to complete divergence at any time. Inherent in all of these potential conflicts is the fear\nthat the entity paying the attorney, the insurer, and not the one to whom the attorney is obligated\nto defend, the insured, is controlling the legal representation.\nFinally, Complainants attack the case law and ethics opinions upon which E-368 is founded. In\nparticular, State Farm contends that E-368 cites to decisions which have either been overruled,\nare inapposite as silent on the ethical issues addressed in E-368, or lack a basis in law and\nprecedent. Complainants also attack E-368 as overbroad and lacking any factual predicate. In\narguing that a reasoned, fact-based analysis is required in order to evaluate potential conflicts of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c333\ninterest, State Farm relies on the commentary to the Kentucky Rules of Professional Conduct,\nwhich states, in part: \xe2\x80\x9cA possible conflict does not itself preclude the representation. The critical\nquestions are the likelihood that a conflict will eventuate and, if it does, whether it will materially\ninterfere with the lawyer\'s independent professional judgment.\xe2\x80\x9d Additionally, Allstate and\nNational contend that the Board adopted the wrong version of E-368, in that a revised draft of\nthe opinion better articulates the ethical standard which should apply to counsel involved in set\nfee arrangements. These Complainants note that the ethics opinions referenced in E-368 \xe2\x80\x94\nsuch as E-331 and E-340 \xe2\x80\x94 bear out the assertion that blanket prohibitions are unnecessary\nwhere sufficient reliance is placed upon counsel\'s ability to comply with the ethical obligations\nowed to the client, including the requirement that counsel act in the best interest of the client.\nFirst, we believe that the ethics opinions and case law cited in E-368 are on point, and defer to\nour previous discussion on the inapplicability of the decisions of other jurisdictions to Kentucky\'s\nown governance of professional responsibility. Moreover, we are convinced by Respondent\'s\nassertion that few of the other jurisdictions to which Complainants cite have conducted any\nmeaningful analysis of the issues presented, nor do these jurisdictions share our state\'s\naversion to the practice of law by corporations. For example, Respondent distinguishes the\nTennessee opinion of Youngblood, from the North Carolina opinion of Gardner, by noting that\nTennessee does not proscribe a corporation from practicing law for the public, whereas North\nCarolina does prohibit this practice, as does Kentucky. Finally, notwithstanding the language of\nother ethics opinions issued by Respondent, or Complainants\' argument regarding the alleged\ninadequacy of the language of the ethics opinion at issue, we find, as discussed above, that the\nlanguage of E-368 is complete and articulate, and hold that the opinion clearly presents its\nstated purpose and rationale.\nFor the foregoing reasons, we approve E-368 as written, and do not disturb U-36.\nIn re State Grand Jury Investigation, 983 A.2d 1097 (N.J. 2009)\nSummary: In a grand jury proceeding investigating an employer for fraud, the state\nmoved to disqualify the counsel of the employees on the grounds that the employer had\nselected the counsel and was paying them. The Supreme Court held that the\nemployees\xe2\x80\x99 counsel was not required to be disqualified under RPC 1.7(a) or 1.8(f)\nbecause the counsel had no present relationship to the employer, were barred from\ndisclosing any information to the employer, and were to be paid unless the court granted\nthe employer leave to discontinue payment.\nJustice RIVERA-SOTO delivered the opinion of the Court.\nConfronted with a grand jury inquiry that commanded the testimony of several of its employees,\nan employer elected to provide and pay for counsel to those employees for purposes of that\ninvestigation. Fearing that having individual employees/grand jury witnesses represented by\ncounsel retained and compensated by the putative target of the grand jury inquiry violated\nseveral of the Rules of Professional Conduct, the State moved to disqualify those counsel. The\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c334\ntrial court denied that application, limited the amount of information to be transmitted by such\ncounsel to the employer, and, further, imposed restrictions both on the ability of the employer to\ndiscontinue paying the fees of counsel for the employees as well as on the ability of those\ncounsel to discontinue representing the subpoenaed employees.\nRegardless of the setting\xe2\x80\x94whether administrative, criminal or civil, either as part of an\ninvestigation, during grand jury proceedings, or before, during and after trial\xe2\x80\x94whether an\nattorney may be compensated for his services by someone other than his client is governed in\nlarge measure by RPC 1.8(f) and, to a lesser extent, RPC 1.7(a) and RPC 5.4(c). The\noverarching Rule, which purposely is written in the negative, forbids a lawyer from \xe2\x80\x9caccepting\ncompensation for representing a client from one other than the client unless three factors\ncoalesce: (1) the client gives informed consent; (2) there is no interference with the lawyer\'s\nindependence of professional judgment or with the lawyer-client relationship; and (3) information\nrelating to representation of a client is protected" as provided in the RPCs. A straightforward\napplication of RPCs 1.7(a), 1.8(f) and 5.4(c) requires that we affirm the order of the trial court.\nI.\nThe operative facts on which this appeal arise are readily stated. The State commenced a grand\njury investigation into whether a corporate contractor had submitted fraudulent invoices for\nservices purportedly rendered to a county government. That inquiry focused primarily on the\ncontractor and three of its employees. In response, the company arranged for counsel for its\nemployees. The company entered into four separate retainer agreements with four separate\nlawyers, three of whom were assigned to represent, respectively, the three specific employees\nnoted, and the fourth was retained to represent \xe2\x80\x9call non-target current and former employees of\nthe company in connection with the current state grand jury investigation.\xe2\x80\x9d\nThe retainer agreements with each of the four lawyers, however, shared common\ncharacteristics and were, in all substantive and material respects, indistinguishable. A typical\nretainer agreement provided (1) that the company \xe2\x80\x9cwill be ultimately responsible to the law firm\nfor all reasonable and necessary legal fees and expenses incurred in this matter\xe2\x80\x9d; (2) that the\n\xe2\x80\x9cundertaking by the company is made with the express understanding that the sole professional\nobligation of the law firm will be to the named employee\xe2\x80\x9d; (3) that the \xe2\x80\x9claw firm is not required to\ndisclose any legal strategy, theory, plan of action, or the like, to the company\xe2\x80\x9d; (4) that \xe2\x80\x9cpayment\nof legal fees by the company to the law firm in no way depends upon any such disclosure\xe2\x80\x9d; (5)\nthat \xe2\x80\x9cno professional relationship will arise between the company and the law firm as a result of\nthe rendering of legal services by the law firm or the payment of legal fees and expenses by the\ncompany\xe2\x80\x9d; (6) that \xe2\x80\x9cthe reimbursement of legal fees and expenses is neither conditioned upon\nnor dependent upon the law firm\'s cooperation with the company or any other party\xe2\x80\x9d; (7) that\nwhile \xe2\x80\x9cdetailed invoices will be provided to the represented employee, to preserve the\nattorney/client privilege, only summary invoices will be submitted to the company\xe2\x80\x9d; and (8) that\nthe company would be responsible to pay those invoices \xe2\x80\x9cupon receipt.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c335\nBased on the company\'s retention of separate counsel for each of three employees identified by\nthe State, the company wrote to each such employee, informing them that:\nAs you know, the New Jersey Attorney General\'s office served the company with a\nGrand Jury subpoena seeking various billing and payroll records related to the\ncompany\xe2\x80\x99s contract with the specified county government. The company has been fully\ncooperative with the State\'s investigation.\nRecently the Attorney General\xe2\x80\x99s office has begun interviewing some of our employees at\nthe identified project. Given your position with the company and involvement in this\nproject, and based upon the advice of our attorneys in New Jersey, we believe it would\nbe prudent to retain separate counsel to represent you personally in connection with the\nState\xe2\x80\x99s investigation. Accordingly, the company has retained a specially retained lawyer\nto represent you in connection with the State\xe2\x80\x99s investigation. You do not have to use that\nspecially retained lawyer as your attorney. You are free to hire your own attorney, at\nyour own costs.\nYou should not interpret this decision to mean that the company believes there to have\nbeen any illegal activity in this matter on the part of any company employee. Rather, it is\nbased upon the recognition that your personal rights may conflict with the interests of the\ncompany. While the company agrees to pay for your legal representation in this matter,\nplease understand that it has no obligation to do so and may stop paying those legal\nfees and costs at any time, should it believe it appropriate to do so.\nYour specially retained lawyer may be reached at [____]. His firm address is: [_____].\nPlease expect your specially retained lawyer to contact you directly to arrange a\nconvenient time to meet and discuss this matter. Please feel free to contact me directly\nor speak with the company\'s local counsel if you have any questions regarding this\nmatter.\nVery truly yours,\n/s/ Senior Vice President and General Counsel\nThe company also announced to all other employees that the company had retained a lawyer\xe2\x80\x94\nfree of charge to the employees\xe2\x80\x94with whom those employees could consult and who was\navailable to represent those employees in respect of the grand jury inquiry.\nIn time, two of the four lawyers retained by the company to represent its employees were\nsubpoenaed to appear before the grand jury; they declined to appear, and the State later\nwithdrew those subpoenas. The State then notified the company that it, along with several\nunnamed employees, had been designated as targets of the grand jury\xe2\x80\x99s investigation, and later\nserved grand jury subpoenas for the company\'s records in respect of the retention of counsel for\nits employees. The company complied with that subpoena by producing responsive but nonprivileged documents.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c336\n\nThe State moved before the Superior Court to disqualify the counsel retained by the company to\nrepresent its employees \xe2\x80\x9cfrom further participation in this matter, pursuant to RPC 1.7, RPC 1.8\nand RPC 1.10.\xe2\x80\x9d In response, each of the employees to whom the company had provided\ncounsel to date\xe2\x80\x94the three identified \xe2\x80\x9ctarget\xe2\x80\x9d employees and two additional \xe2\x80\x9cnontarget\xe2\x80\x9d\nemployees\xe2\x80\x94submitted certifications asserting that none of them could afford to retain separate\ncounsel, and that each was satisfied with and wished to remain with their then counsel.\nThe trial court noted at the outset that it \xe2\x80\x9cviewed the company\xe2\x80\x99s conduct as one that is certainly\nto be appreciated.\xe2\x80\x9d Addressing the caliber of the lawyers retained by the company for its\nemployees, the trial court explained that \xe2\x80\x9cas a major corporation, the company didn\xe2\x80\x99t go out and\nhire some low-level attorney. They went out and hired competent, knowledgeable, respected\nattorneys.\xe2\x80\x9d Focusing on the application of the Rules of Professional Conduct to the State\'s\nmotion for disqualification, the court first observed that RPC 1.5 \xe2\x80\x9ctalks about fees being\nreasonable and that is not an issue before the Court.\xe2\x80\x9d Moving on to the application of RPC 1.6,\nwhich addresses the confidentiality of information between a lawyer and his client, the trial court\nremarked that the retained lawyers had provided certifications and sample redacted bills.\nAgreeing that the procedure employed was proper, the trial court emphasized that \xe2\x80\x9cthe only\nthing that I would require going forward is that all of the bills sent to the company be redacted\nand that no specific information be detailed in the billing.\xe2\x80\x9d\nTurning to RPC 1.7, the general conflict of interest rule, the trial court concluded that, \xe2\x80\x9cat least at\nthis point, there\'s been no demonstration that there is even a conflict and even if there were,\nthese employees have the right to waive that conflict.\xe2\x80\x9d It also declared itself \xe2\x80\x9csatisfied that there\nhas been informed consent given by all of the employees by way of what they have put in the\ncertifications.\xe2\x80\x9d It concluded that\nThe Court finds nothing improper about the attorneys that have been retained by the\ncompany. In fact, the Court would go further and say that the company acted\nresponsibly, quite frankly, and with corporate policy and, quite frankly, having been\nadvised of the reputation of these attorneys. And clearly the understanding between the\ncompany and these attorneys was spelled out in not only the retainer agreements, but in\nprevious letters before all this was signed.\nIt added, however, some restrictions: \xe2\x80\x9cthat the company and the individual attorneys, prior to\nending any relationship for payment, would have to make application to the Court,\xe2\x80\x9d and that\ncounsel were to \xe2\x80\x9credact the billings to cure any notion that the State may have that somehow\nthe billings will reveal significant aspects of the grand jury investigation.\xe2\x80\x9d\nThe trial court entered an order that denied the State\'s motion to disqualify counsel. More\nspecifically, it\nFURTHER ORDERED that before the company may cease paying any of the attorney\xe2\x80\x99s\nlegal fees and costs, the company shall provide notice to the Court and all parties, and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c337\nthe Court shall conduct a hearing on the issue of whether the company may cease\npaying such legal fees and costs; and\nIT IS FURTHER ORDERED that before any of the attorneys may withdraw from this\ncase based upon the refusal of the company to pay the attorney\xe2\x80\x99s legal fees and costs,\nsuch attorney shall provide notice to the Court and all parties, and the Court shall\nconduct a hearing on the issue of the attorney\'s request to withdraw; and\nIT IS FURTHER ORDERED that the attorneys henceforth shall submit to the company\nlegal bills either in summary form or with all detailed information redacted therefrom.\nThe State sought leave to appeal that determination and, in an unpublished order, the Appellate\nDivision denied that application. It then moved before this Court, seeking leave to appeal the\ntrial court\xe2\x80\x99s order and other ancillary relief. Those motions were granted. We also granted leave\nto the Association of Criminal Defense Lawyers of New Jersey to appear as amicus curiae. For\nthe reasons that follow, we affirm the order of the trial court.\nII.\nAccording to the State, a per se conflict of interest arises whenever, as here, two facts\ncontemporaneously appear: a target in a grand jury investigation unilaterally selects and retains\na lawyer to represent potential witnesses against it, and the lawyer relies on the target for\npayment of legal fees. In the State\xe2\x80\x99s view, that arrangement will split the attorney\'s loyalty and\nwill discourage the lawyer from counseling the client to cooperate with the State, even when\ncooperation might be in the client\'s best interest. It asserts that the perceived effect of allowing a\ntarget to select and pay for counsel for the witnesses against it is to irreparably taint the\nproceedings. The State also claims that such a conflict cannot be waived and that, even if it\ncould be waived, a waiver could only be demonstrated through the live testimony of the\nwitnesses, and not, as was done here, via certifications.\nThe lawyers whose disqualification is sought counter that RPC 1.8(f) clearly contemplates an\nemployer designated as a grand jury \xe2\x80\x9ctarget\xe2\x80\x9d providing and paying for separate counsel for its\nemployees during that grand jury inquiry. They reject the State\'s claim that, in the criminal law\nsetting, the better rule is the imposition of a per se conflict. Finally, they assert that, even if a\npotential conflict of interest exists, it has been effectively waived. Amicus ACDL-NJ repeats\nthose arguments.\nThe company echoes the arguments advanced both by the lawyers whose disqualification is\nsought and by amicus, and further asserts that, under the laws of its place of incorporation, it\nhas an obligation to provide counsel to its employees, noting that, absent counsel provided by\nand paid for by the company, most of its employees would be unable to afford a lawyer.\nIII.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c338\nA.\nOur evaluation of an actual or apparent conflict does not take place in a vacuum, but is, instead,\nhighly fact specific. In that respect, the Court\xe2\x80\x99s attention is directed to something more than a\nfanciful possibility. To warrant disqualification in this setting, the asserted conflict must have\nsome reasonable basis.\nThe State asserts that a target of a grand jury inquiry providing and paying for the lawyers who\nwill represent the target\'s employees before the very grand jury considering the target\'s\nculpability creates an insoluble conflict not subject to waiver. Although the State\'s arguments\npossess considerable initial appeal, in light of modern changes in the manner in which attorneyclient relationships are to be viewed, we are constrained to disagree.\nNo doubt, it long has been the law of this State that it is \xe2\x80\x9cimproper for the attorney for an\nemployee to have accepted the organization\xe2\x80\x99s promise to pay his bill, for such an arrangement\nhas the inherent risk of dividing an attorney\xe2\x80\x99s loyalty between his client and his client\xe2\x80\x99s employer\nwho will pay for the services.\xe2\x80\x9d In those instances, we have concluded that \xe2\x80\x9ca conflict of interest\ninheres in every such situation,\xe2\x80\x9d one that cannot be waived \xe2\x80\x9cwhen the subject matter is crime\nand when the public interest in the disclosure of criminal activities might thereby be hindered.\xe2\x80\x9d\nReasoning that \xe2\x80\x9can attorney must realize that the employer who agrees to pay him is motivated\nby the expectation that he will be protected," we have concluded that\nIt is inherently wrong to represent both the employer and the employee if the employee\'s\ninterest may, and the public interest will, be advanced by the employee\'s disclosure of\nhis employer\'s criminal conduct. For the same reasons, it is also inherently wrong for an\nattorney who represents only the employee to accept a promise to pay from one whose\ncriminal liability may turn on the employee\'s testimony.\nSee also Wood v. Georgia, 450 U.S. 261, 268-69 (1981) (emphasizing that \xe2\x80\x9ccourts and\ncommentators have recognized the inherent dangers that arise when a criminal defendant is\nrepresented by a lawyer hired and paid by a third party, particularly when the third party is the\noperator of the alleged criminal enterprise. One risk is that the lawyer will prevent his client from\nobtaining leniency by preventing the client from offering testimony against his former employer\nor from taking other actions contrary to the employer\xe2\x80\x99s interest\xe2\x80\x9d).\nB.\nThat said, effective September 10, 1984, New Jersey replaced its then extant Canons of\nProfessional Ethics and Disciplinary Rules with the more modern Rules of Professional\nConduct. Among these was RPC 1.8(f), which then provided that\nA lawyer shall not accept compensation for representing a client from one other than the\nclient unless: (1) the client consents after consultation; (2) there is no interference with\nthe lawyer\'s independence of professional judgment or with the lawyer-client relationship\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c339\nand (3) information relating to representation of a client is protected as required by RPC\n1.6.\nThereafter, starting in 2001 and continuing for almost two years, New Jersey engaged in a\n\xe2\x80\x9creview of the existing Rules of Professional Conduct in light of the work of the American Bar\nAssociation\'s Commission on Evaluation of the Rules of Professional Conduct.\xe2\x80\x9d This process\nculminated in yet another round of modifications to the Rules of Professional Conduct. In\nrespect of RPC 1.8(f), however, only minor changes were made; it now provides in full as\nfollows:\nA lawyer shall not accept compensation for representing a client from one other than the\nclient unless:\n(1) the client gives informed consent;\n(2) there is no interference with the lawyer\'s independence of professional judgment or\nwith the lawyer-client relationship; and\n(3) information relating to representation of a client is protected as required by RPC 1.6.\nC.\nHowever, RPC 1.8(f) does not exist in a vacuum: two other RPCs directly touch on the question\npresented. First, RPC 1.7(a) forbids a lawyer from representing a client \xe2\x80\x9cif the representation\ninvolves a concurrent conflict of interest.\xe2\x80\x9d That RPC recognizes \xe2\x80\x9ca concurrent conflict of interest\nif: there is a significant risk that the representation of one or more clients will be materially\nlimited by the lawyer\xe2\x80\x99s responsibilities to a third person or by a personal interest of the lawyer.\xe2\x80\x9d\nSecond, RPC 5.4(c) provides that \xe2\x80\x9ca lawyer shall not permit a person who recommends,\nemploys, or pays the lawyer to render legal services for another to direct or regulate the\nlawyer\xe2\x80\x99s professional judgment in rendering such legal services.\xe2\x80\x9d\nOur task, then, is to harmonize RPCs 1.7(a)(2), 1.8(f) and 5.4(c) seemingly overlapping\nmandates so as to give proper guidance on whether, and under what circumstances, a lawyer\nmay represent a client when the fees and costs incurred are being paid by another.\nD.\nThe starting point for analysis must be the RPC that most specifically addresses the question of\nwhen a lawyer can represent a client while being paid by another: RPC 1.8(f). That RPC makes\nclear that three factors must coalesce in order to allow a lawyer paid by a third party to\nrepresent a client: the client must give informed consent; the lawyer\xe2\x80\x99s independent professional\njudgment and the lawyer-client relationship must be maintained sacrosanct; and no improper\ndisclosures relating or referring to the representation can be made. However, the considerations\nthat animate RPC 1.7(a)(2)\xe2\x80\x94that there be no concurrent conflict of interest\xe2\x80\x94and RPC 5.4(c)\xe2\x80\x94\nthat no third party may influence the lawyer\'s professional judgment\xe2\x80\x94 also are relevant and\nmust be addressed.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c340\nA synthesis of RPCs 1.7(a)(2), 1.8(f) and 5.4(c) yields a salutary, yet practical principle: a lawyer\nmay represent a client but accept payment, directly or indirectly, from a third party provided\neach of the six conditions is satisfied. Those conditions are:\n(1) The informed consent of the client is secured. In this regard, \xe2\x80\x9c\xe2\x80\x98informed consent\xe2\x80\x99 is\ndefined as the agreement by a person to a proposed course of conduct after the lawyer\nhas communicated adequate information and explanation about the material risks of and\nreasonably available alternatives to the proposed course of conduct.\xe2\x80\x9d\n(2) The third-party payer is prohibited from, in any way, directing, regulating or interfering\nwith the lawyer\xe2\x80\x99s professional judgment in representing his client.\n(3) There cannot be any current attorney-client relationship between the lawyer and the\nthird-party payer.\n(4) The lawyer is prohibited from communicating with the third-party payer concerning\nthe substance of the representation of his client. The breadth of this prohibition includes,\nbut is not limited to, the careful and conscientious redaction of all detail from any billings\nsubmitted to the third-party payer.\n(5) The third-party payer shall process and pay all such invoices within the regular\ncourse of its business, consistent with manner, speed and frequency it pays its own\ncounsel.\n(6) Once a third-party payer commits to pay for the representation of another, the thirdparty payer shall not be relieved of its continuing obligations to pay without leave of court\nbrought on prior written notice to the lawyer and the client. In such an application, the\nthird-party payer shall bear the burden of proving that its obligation to continue to pay for\nthe representation should cease; the fact that the lawyer and the client have elected to\npursue a course of conduct deemed in the client\'s best interests but disadvantageous to\nthe third-party payer shall not be sufficient reason to discontinue the third-party payer\'s\ncontinuing obligation of payment. If a third-party payer fails to pay an employee\'s legal\nfees and expenses when due, the employee shall have the right, via a summary action,\nfor an order to show cause why the third-party payer should not be ordered to pay those\nfees and expenses.\nE.\nWe now apply this principle, and its conditions, to the case on appeal.\nInformed consent. Each of the letters from the company to the individual employees provided\nthat the employee \xe2\x80\x9cdid not have to use the assigned counsel as your attorney. You are free to\nhire your own attorney, at your own costs.\xe2\x80\x9d As conceded by counsel for the company during oral\nargument, that \xe2\x80\x9ctake-it-or-leave-it\xe2\x80\x9d approach, on its face, does not satisfy the requirement that\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c341\nthe employee\'s acceptance of counsel be based on informed consent. Therefore,\npresumptively, the retention of counsel here does not comply with RPC 1.8(f)(1). However, as\nacknowledged by the trial court, each of the employees certified that he was satisfied with the\nassigned counsel and wished to remain as that counsel\xe2\x80\x99s client. Therefore, we conclude that the\narrangement approved by the trial court below is satisfactory, albeit with the caveat that, in the\nfuture, no such limitations on the choice of counsel should be communicated or imposed on the\nemployee/client save for reasonable limitations on fees and expenses.\nInterference with the lawyer\xe2\x80\x99s professional judgment. As clearly set forth in the separate\nretention letters between the lawyers and the company, each of the lawyers explained that \xe2\x80\x9cthe\nsole professional obligation of the law firm will be to the assigned client.\xe2\x80\x9d For the avoidance of\nfuture doubt, such retention letters should clearly and conspicuously note that nothing in the\nrepresentation shall limit the lawyer\xe2\x80\x99s responsibilities to the client, as provided in RPC 1.8(f)(2),\nand that the third-party payer shall not, in any way, seek to \xe2\x80\x9cdirect or regulate the lawyer\'s\nprofessional judgment in rendering such legal services.\xe2\x80\x9d RPC 5.4(c).\nCurrent representation. The record is clear that none of the lawyers selected to represent the\nindividual employees had any current relationship with the company, and that \xe2\x80\x9cno professional\nrelationship will arise between the company and the law firm as a result of the rendering of legal\nservices by the assigned lawyer or the payment of legal fees and expenses by the company.\xe2\x80\x9d\nThose facts, standing alone, constitute a sufficient showing in favor of permitting this\nrepresentation. Again, as an aid in future matters, the retention letters should clearly spell out\nthat the lawyer does not have a professional relationship with the third-party payer.\nProhibited communications. Each of the retention letters made clear that the lawyer \xe2\x80\x9cis not\nrequired to disclose any legal strategy, theory, plan of action, or the like, to the company and\npayment of legal fees by the company to the law firm in no way depends upon any such\ndisclosure.\xe2\x80\x9d In this respect, the better practice is to affirmatively state that the lawyer will not\ndisclose any part of the substance of the representation of the client to the third-party payer.\nConsistent with that representation, all billings from the lawyer to the third-party payer must\nhave any detail information redacted, simply stating the sum due for services rendered and the\nsum due for expenses incurred. Because these latter conditions were imposed by the trial court,\nthe retention letters, as modified by the trial court, clearly comply with the requirements we have\nimposed.\nPrompt and continued payment. Once an employer commits to paying the legal fees and\nexpenses of its employees, it scrupulously must honor that commitment. Also, if the employer\nwishes to discontinue paying the legal fees and expenses of one or more of its employees, it\nmay only do so by leave of court granted. Because this condition also was imposed by the trial\ncourt and was agreed to by all parties, the arrangements at issue are satisfactory.\nIn sum, through the combined product of the good faith of an employer, the diligence of\ncompetent counsel and the exercise of a trial court\'s supervisory authority, the net result of the\ncompany\'s retention and payment of counsel for its employees complies with the Rules of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c342\nProfessional Conduct. For these reasons, the trial court properly denied the State\'s motion to\ndisqualify counsel.\nIV.\nThe order of the Law Division denying the State\'s motion to disqualify the counsel retained to\nrepresent the company\'s employees before the grand jury is affirmed.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c343\n4.8: Personal Conflicts of Interest\nWay out in Reno, Nevada, where romance blooms and fades, a great Philadelphia lawyer was\nin love with a Hollywood maid. Come, love, and we\xe2\x80\x99ll go ramblin\xe2\x80\x99, down where the lights are so\nbright. I\'ll win you a divorce from your husband, and we can get married tonight.59\nAm I the only one who hears the screams and the strangled cries of lawyers in love?60\nDo I look like I\xe2\x80\x99m asking for it?61\nIt\'s harder to be friends than lovers, and you shouldn\xe2\x80\x99t try to mix the two. Cause if you do it and\nyou\xe2\x80\x99re still unhappy, then you know that the problem is you.62\nModel Rule 1.8: Current Clients: Specific Rules\n(j) A lawyer shall not have sexual relations with a client unless a consensual sexual\nrelationship existed between them when the client-lawyer relationship commenced.\n\nModel Rule 1.8, Comments [17]-[19]: Client-Lawyer Sexual Relationships\n[17] The relationship between lawyer and client is a fiduciary one in which the lawyer\noccupies the highest position of trust and confidence. The relationship is almost always\nunequal; thus, a sexual relationship between lawyer and client can involve unfair\nexploitation of the lawyer\'s fiduciary role, in violation of the lawyer\xe2\x80\x99s basic ethical\nobligation not to use the trust of the client to the client\'s disadvantage. In addition, such a\nrelationship presents a significant danger that, because of the lawyer\'s emotional\ninvolvement, the lawyer will be unable to represent the client without impairment of the\nexercise of independent professional judgment. Moreover, a blurred line between the\nprofessional and personal relationships may make it difficult to predict to what extent\nclient confidences will be protected by the attorney-client evidentiary privilege, since\nclient confidences are protected by privilege only when they are imparted in the context\nof the client-lawyer relationship. Because of the significant danger of harm to client\ninterests and because the client\'s own emotional involvement renders it unlikely that the\nclient could give adequate informed consent, this Rule prohibits the lawyer from having\nsexual relations with a client regardless of whether the relationship is consensual and\nregardless of the absence of prejudice to the client.\n[18] Sexual relationships that predate the client-lawyer relationship are not prohibited.\nIssues relating to the exploitation of the fiduciary relationship and client dependency are\n59\n\nWoody Guthrie, Philadelphia Lawyer (1937).\nJackson Browne, Lawyers in Love (1983)\n61\nChia Pet, Hey Baby (1992).\n62\nLiz Phair, Divorce Song, Exile in Guyville (1993).\n60\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c344\ndiminished when the sexual relationship existed prior to the commencement of the\nclient-lawyer relationship. However, before proceeding with the representation in these\ncircumstances, the lawyer should consider whether the lawyer\'s ability to represent the\nclient will be materially limited by the relationship. See Rule 1.7(a)(2).\n[19] When the client is an organization, paragraph (j) of this Rule prohibits a lawyer for\nthe organization (whether inside counsel or outside counsel) from having a sexual\nrelationship with a constituent of the organization who supervises, directs or regularly\nconsults with that lawyer concerning the organization\xe2\x80\x99s legal matters.\nWalter v. Stuart, 67 P.3d 1042 (Utah 2003)\nSummary: Attorney Alan Stewart represented client Beth Walter in a divorce\nproceeding. Stewart told Walter that he was divorced, and they began a personal\nrelationship, which soon became sexual. Eventually, Walter learned that Stewart was\nactually married and ended the relationship. Walter filed an action against Stewart,\nalleging breach of fiduciary duty. The trial court granted Stewart\xe2\x80\x99s motion for summary\njudgment, but the Supreme Court reversed, finding that issues of fact existed.\nThis case arises out of an attorney-client relationship, which turned sexually intimate, between\none-time client Beth Walter and her former attorney Alan Stewart. Following her discovery that\nStewart was married, Walter filed claims against Stewart for breach of fiduciary duty, fraud,\nintentional infliction of emotional distress, reckless misconduct, breach of contract, and battery.\nUpon Stewart\'s motion, the trial court entered summary judgment against Walter on all of her\nclaims. Walter now appeals. We reverse in part, affirm in part, and remand.\nBACKGROUND\nIn June of 1998, Walter retained Stewart as her attorney in a divorce action. Through that\nrepresentation, Stewart learned that Walter was in a \xe2\x80\x9cfragile emotional state and had personal\nself esteem issues,\xe2\x80\x9d including a \xe2\x80\x9cdoubt in her ability to have a successful relationship.\xe2\x80\x9d Walter\ndecided to relocate to Maryland. In the first part of April of 1999, Walter phoned Stewart several\ntimes, anxious that her divorce be finalized so she could move.\nDuring his representation of Walter, Stewart became \xe2\x80\x9cvery flirtatious, often commenting\nregarding Walter\xe2\x80\x99s personal appearance and grooming.\xe2\x80\x9d In April of 1999, Stewart began to call\nWalter daily and, on April 15, took her on a lunch date. Following the lunch date Stewart asked\nWalter, \xe2\x80\x9cIf you move to Maryland, how are we supposed to have a relationship?\xe2\x80\x9d Walter then\n\xe2\x80\x9cdecided to postpone the move to see where Stewart\xe2\x80\x99s \xe2\x80\x98relationship\xe2\x80\x99 with her would head.\xe2\x80\x9d\nThrough the first part of May, Stewart continued to tell Walter \xe2\x80\x9cthat he was waiting to hear from\nher husband\xe2\x80\x99s lawyer to finalize the divorce.\xe2\x80\x9d On May 12, after personally contacting her exhusband and the trial court, Walter learned that her divorce had actually been finalized on April\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c345\n26.\nThe divorce decree required Walter to pay her ex-husband an amount of money. On May 13,\nWalter asked Stewart about paying the judgment. Stewart told her \xe2\x80\x9cto hold off on payment to\nsee if her ex-husband would pursue collection and further advised her that if her ex-husband\ntried to collect on the amount due, she could make arrangements to pay before a judgment was\nlevied against her.\xe2\x80\x9d Walter took Stewart\xe2\x80\x99s advice and did not make the payment. Also upon\nfinalization of her divorce, Walter desired to resume the use of her maiden name and asked\nStewart \xe2\x80\x9cwhy her name change was not reflected in the divorce decree.\xe2\x80\x9d He told her that she\ncould take the decree to the Department of Social Security to have her name changed, which\nshe did.\nStewart and Walter continued to see each other on a personal basis, and on June 5, 1999,\nStewart kissed Walter, tried to undress her, and said that he wanted to \xe2\x80\x9cmake love.\xe2\x80\x9d Upon\nWalter\xe2\x80\x99s questioning, Stewart told her that he was a divorced father of four children. The two did\nnot engage in sexual relations that day but did become sexually intimate on July 22, 1999. \xe2\x80\x9cOn\nthat night as they discussed sleeping together, Walter told Stewart that she would only do so if\nthey were going to have an exclusive-monogamous relationship, a condition with which Stewart\nreadily concurred and agreed to.\xe2\x80\x9d\nDuring their personal relationship, Stewart took Walter on numerous dates in public as well as\non business trips. He never wore a wedding ring. He displayed on his desk an engraved clock\nthat Walter gave him, and wore clothing she gave him. The two also spoke of getting married.\nIn August of 1999, Walter received an order to show cause for her failure to pay her ex-husband\nwhat she owed him under the divorce decree. Walter contacted Stewart, and he said that he\nwould take care of the matter and declined her offer to pay for his services. He then made\npayment arrangements with the attorney for Walter\xe2\x80\x99s ex-husband, and the show-cause hearing\nwas canceled. \xe2\x80\x9cFor his services rendered and as a token of appreciation, Walter bought Stewart\na $100 fountain pen."\nIn October of 1999, Walter considered breaking off her relationship with Stewart. However,\nwhen she expressed those feelings to him, he \xe2\x80\x9ctold her that he loved her, that he wouldn\xe2\x80\x99t\naccept her breaking up with him and that he would \xe2\x80\x98stalk her and wait for her in the parking\ngarage at work.\xe2\x80\x99\xe2\x80\x9d They continued to see each other, exchanged Christmas gifts, and spent\nmuch of New Years Day 2000 together. Although their dates became less frequent in 2000,\nStewart continued to express a commitment to their relationship.\nIn September of 2000, while pursuing an unrelated international adoption, Walter was told by\nthe Immigration and Naturalization Service that she had illegally resumed use of her maiden\nname since a name change was not included in her divorce decree. Walter contacted Stewart,\nwho told her that she would need to petition the court to amend the divorce decree. Because\nWalter\xe2\x80\x99s ex-husband would not cooperate in the action, she \xe2\x80\x9cretained Stewart\xe2\x80\x99s services once\nmore to petition the court for a name change and paid him the sum of $350.00.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c346\n\nThe hearing on Walter\xe2\x80\x99s name change was held on November 2, 2000. \xe2\x80\x9cFollowing the hearing,\nStewart escorted Walter to her car. When they got to the car he grabbed her around the waist\nand asked her to have sex with him.\xe2\x80\x9d \xe2\x80\x9cBecause of the on again-off again nature of Stewart\xe2\x80\x99s\nrelationship with her during the latter half of 2000, Walter became curious regarding his marital\nstatus.\xe2\x80\x9d In a phone conversation on November 12, Stewart told Walter that he and his wife were\nback together and that he had not been divorced, but only separated. After their phone\nconversation, Stewart went to Walter\xe2\x80\x99s home and told her that \xe2\x80\x9che reconciled with his wife to be\nwith his children, that he was under discipline by his church for a previous affair, and that he had\nbeen living with his mother.\xe2\x80\x9d Stewart nevertheless expressed a desire to keep in contact.\nOver the next four days, Stewart called Walter \xe2\x80\x9capproximately four times a day,\xe2\x80\x9d and, on\nNovember 16, took her out to lunch. On the evening of November 16, Walter called Stewart\xe2\x80\x99s\nwife and learned that Stewart had been married for twenty years, had never separated from his\nwife, had not been disciplined by his church for a previous affair, and that he had not lived with\nhis mother at any time during his affair with Walter. Shortly after Walter\xe2\x80\x99s conversation with\nStewart\xe2\x80\x99s wife, Stewart called Walter and told her that she had ruined his life and then hung up.\nThe two have not spoken since.\nWalter filed a complaint against Stewart. Her complaint includes claims for breach of fiduciary\nduty, fraud, intentional infliction of emotional distress, reckless misconduct, breach of contract,\nand battery. Stewart moved for summary judgment on all of Walter\xe2\x80\x99s claims. The trial court\ngranted Stewart\xe2\x80\x99s motion in its entirety, stating simply that Walter\xe2\x80\x99s battery claims were barred\nby the statute of limitations and that Walter \xe2\x80\x9cfailed to support by Affidavit facts sufficient to\nsupport\xe2\x80\x9d her other claims. She now appeals.\nANALYSIS\nI. Breach of Fiduciary Duty\n"Actions for breach of fiduciary duty are grounded on the fundamental principle that attorneys\nmust be completely loyal to their clients and must never use their position of trust to take\nadvantage of client confidences for themselves or for other parties. In all relationships with\nclients, attorneys are required to exercise impeccable honesty, fair dealing, and fidelity.\xe2\x80\x9d Indeed,\ndue to their \xe2\x80\x9cprofessional responsibility and the confidence and trust\xe2\x80\x9d that their clients\n\xe2\x80\x9clegitimately repose\xe2\x80\x9d in them, attorneys \xe2\x80\x9cmust adhere to a high standard of honesty, integrity,\nand good faith in dealing with\xe2\x80\x9d their clients. Attorneys are \xe2\x80\x9cnot permitted to take advantage of\ntheir position or superior knowledge to impose upon clients; nor to conceal facts or law, nor in\nany way deceive clients without being held responsible therefor.\xe2\x80\x9d\n\xe2\x80\x9cThe essential elements of legal malpractice based on breach of fiduciary duty include the\nfollowing: (1) an attorney-client relationship; (2) breach of the attorney\'s fiduciary duty to the\nclient; (3) causation, both actual and proximate; and (4) damages suffered by the client.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c347\n\nIt is undisputed that an attorney-client relationship existed between Stewart and Walter through\nat least April of 1999. In May, Walter sought advice from Stewart regarding a sum of money she\nowed her ex-husband under the divorce decree. Stewart \xe2\x80\x9cadvised Walter to hold off on payment\nto see if her ex-husband would pursue collection and further advised Walter that if her exhusband tried to collect on the amount due, she could make arrangements to pay before a\njudgment was levied against her.\xe2\x80\x9d This evidence, when viewed in the light most favorable to\nWalter, indicates that both Stewart and Walter anticipated further representation of her in the\ndivorce action. It is undisputed that Stewart later represented Walter on an order to show cause,\nwhich came about because of the advice he gave her regarding payment of the judgment. He\nrepresented her again in a name change hearing. Therefore, viewing the facts in a light most\nfavorable to Walter, an attorney-client relationship existed between the parties at all relevant\ntimes.\nAs to a breach of the duty owed Walter, the facts viewed in a light most favorable to her indicate\nthat Stewart took advantage of information he gained during his representation of her to initiate\nfirst a dating relationship and then a sexually intimate relationship with Walter. He also\nmisrepresented his marital status and the state of her legal affairs for his own interests.\nStewart\xe2\x80\x99s conduct can be reasonably construed as taking advantage of a client\xe2\x80\x99s fiduciary trust\nthrough deception. Walter has thus stated facts sufficient to place the element of breach of duty\ninto dispute.\nWalter states damages that she claims were caused, actually and proximately, by Stewart\'s\nconduct. The reason for the dissolution of the parties\xe2\x80\x99 relationship, as well as the timing of that\ndissolution relative to the damages Walter alleges, raise a reasonable inference supporting both\nactual and proximate causation. \xe2\x80\x9cCausation is an issue of fact, and we refuse to take it from the\njury if there is any evidence upon which a reasonable jury could infer causation.\xe2\x80\x9d We cannot,\ntherefore, rule against Walter as a matter of law on this element.\nStewart contends that \xe2\x80\x9cemotional injury, unaccompanied by a tangible manifestation of that\ninjury,\xe2\x80\x9d is not recoverable in a claim for breach of fiduciary duty. Walter, however, has alleged\nthe following damages arising from Stewart\xe2\x80\x99s breach of duty: emotional pain, a need for mental\nhealth counseling, physical pain, medical bills, loss of employment, and a need for sexual\ntherapy.\nBecause none of the elements of breach of fiduciary duty can be resolved against Walter as a\nmatter of law, we reverse the grant of summary judgment on this claim.\nQuestions:\nCity Bar Ass\xe2\x80\x99n v. Williamson, 117 Ohio St. 3d 399 (Ohio 2008)\nSummary: Attorney Karl Williamson represented a female client in a domestic-violence\naction pending in Fairfield Municipal Court. He began to represent her, and eventually\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c348\nshe and her two children moved in with him. When she and her husband reconciled after\nfive months, she and her two children moved out. Resultantly, Williamson withdrew from\nrepresentation. The Supreme Court held that Williamson\xe2\x80\x99s relationship with his client\nviolated the professional rule and warranted indefinite suspension.\nRespondent, Karl E. Williamson has been admitted to the practice of law in Ohio since 1990.\nThe Board of Commissioners on Grievances and Discipline now recommends that we\nindefinitely suspend respondent\xe2\x80\x99s license to practice based on findings that he became\nintimately involved with a client after agreeing to represent her. On review, we agree that\nrespondent committed professional misconduct as found by the board and that an indefinite\nsuspension is appropriate.\nRelator, Butler County Bar Association, charged respondent with two counts of misconduct, the\nfirst relating to respondent\xe2\x80\x99s affair with his client and the second for his failure to appear in\nresponse to relator\xe2\x80\x99s investigative subpoenas. Attempts to serve the complaint by certified mail\nwere unsuccessful and the mail was unclaimed, and relator served the Clerk of the Supreme\nCourt. A master commissioner appointed by the board heard the case, made findings of fact\nand conclusions of law, and recommended an indefinite suspension. The board adopted the\nmaster commissioner\'s findings of misconduct and recommended sanction.\nMisconduct\nCount One\nIn May 2004, respondent agreed to represent a female client in proceedings to terminate her\nmarriage before the Butler County Common Pleas Court. He also agreed to help her through a\ndomestic-violence action pending in Fairfield Municipal Court. The client paid respondent $500\ntoward a requested $1,000 fee.\nRespondent began dating his client shortly after she hired him. Their relationship became\nintimate in the end of May 2004, after the client paid the $500 and respondent had appeared at\na preliminary hearing in the domestic-violence case against her husband. By mid-June 2004,\nrespondent had allowed the client and her two children to move in with him. The client and her\nchildren continued to reside with respondent until October 2004, when the client and her\nhusband reconciled.\nIn a letter to his client dated May 27, 2004, respondent claimed to be withdrawing as her lawyer\nin the divorce or dissolution proceedings. Afterward, he began denying their attorney-client\nrelationship in correspondence to the lawyer representing her husband, although he continued\nto assist her in secret. As part of his plan to hide their affair, respondent also directed his client\nnot to refer to him in public as her lawyer and promised to have another attorney, one of his\ncolleagues, \xe2\x80\x9csign off\xe2\x80\x9d on any required papers. The colleague later testified in a deposition that\nrespondent never consulted him about the client.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c349\nBy engaging in an affair with his client and continuing to represent her, respondent risked his\nclient\xe2\x80\x99s legal and personal interests for his own advantage. As we said in Disciplinary Counsel v.\nSturgeon, \xe2\x80\x9ca lawyer who attempts to engage in a sexual relationship with a client puts the\nlawyer\xe2\x80\x99s own personal feelings ahead of the objectivity that must be the hallmark of any\nsuccessful attorney-client relationship.\xe2\x80\x9d Respondent thereby violated DR 1-102(A)(5)\n(prohibiting a lawyer from engaging in conduct that is prejudicial to the administration of justice),\n1-102(A)(6) (prohibiting a lawyer from engaging in conduct that adversely reflects on the\nlawyer\'s fitness to practice law), and 2-110(B)(2) (requiring a lawyer to withdraw from\nrepresentation when the lawyer knows or it is obvious that his or her continued employment will\nviolate a Disciplinary Rule). Moreover, by lying to conceal the relationship, respondent violated\nDR 1-102(A)(4) (prohibiting a lawyer from engaging in conduct involving fraud, deceit,\ndishonesty, or misrepresentation).\nCount Two\nThe client and her husband filed grievances against respondent. In investigating their claims,\nrelator subpoenaed respondent to appear twice, once in November 2005 and again in February\n2006. Respondent did not comply with either subpoena. He thereby violated Gov.Bar R. V(4)(G)\n(requiring a lawyer to cooperate in an investigation of misconduct).\nSanction\n\xe2\x80\x9cWe have consistently disapproved of lawyers engaging in sexual conduct with clients where the\nsexual relationship arises from and occurs during the attorney-client relationship. A lawyer\xe2\x80\x99s\nsexual involvement with a client has warranted a range of disciplinary measures depending on\nthe relative impropriety of the situation, including actual suspension from the practice of law.\xe2\x80\x9d\nMoreover, a lawyer\'s failure to cooperate in a disciplinary investigation, in and of itself, may\nwarrant an actual suspension from practice.\nTo determine the appropriate sanction, however, we must also weigh the aggravating and\nmitigating factors of respondent\xe2\x80\x99s case.\nWe accept the board\'s findings regarding aggravating factors. Respondent attempted to mislead\nrelator by reporting during the investigation that his client was actually represented by\nindependent counsel. He also changed the date of the letter purporting to terminate his\nprofessional relationship with his client so that it appeared to coincide with a date after his last\nappearance in court on her behalf. Moreover, respondent\xe2\x80\x99s license to practice has been under\nsuspension since December 5, 2005, for his failure to properly register as an attorney. No\nmitigating evidence dissuades us from imposing the recommended indefinite suspension.\nRespondent is therefore indefinitely suspended from the practice of law in Ohio.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c350\nCleveland Metro. Bar Assn. v. Paris, 148 Ohio St. 3d 55 (Ohio 2016)\nSummary: The Bar association alleged that attorney Tasso Paris made unwelcome\nsexual advance toward a female client and failed to appear at her criminal-sentencing\nhearing for DUI. At several client meetings he referred to her as his beautiful red haired\nIrish girl--which he thought relevant given her DUI coincided with St. Patrick\xe2\x80\x99s day. The\nclient\xe2\x80\x99s fiancee was apparently present for all but one of these meetings. He also asked\nhis client to go out with him several times and invited her to his house to join him in his\nhot tub on more than one occasion. She discussed this with her fiancee, ultimately\nagreeing she would go out with Paris just to ensure he represented her effectively. But\nshe could not bring herself to do so. After this, Paris failed to appear at her sentencing\nhearing. His client then reported him. The Court compared his conduct to other similar\ncases and resultantly would be suspended from the practice of law for six months if he\nfailed to pay restitution to the client\xe2\x80\x99s fiancee.\nRespondent, Tasso Paris of Cleveland, Ohio was admitted to the practice of law in Ohio in\n1987.\nIn a January 2015 complaint, relator, Cleveland Metropolitan Bar Association, alleged that Paris\nviolated multiple Rules of Professional Conduct by making unwelcome sexual advances toward\na female client and failing to appear at her criminal-sentencing hearing.\nThe parties entered into stipulations of fact, misconduct, and aggravating and mitigating factors\nand jointly recommended that Paris be suspended from the practice of law for six months, all\nstayed on the condition that he engage in no further misconduct. A panel of the Board of\nProfessional Conduct conducted a hearing at which it admitted stipulations submitted by the\nparties and heard testimony from Paris and the affected client. The panel largely adopted the\nstipulations but, noting that Paris\'s testimony contradicted some of those stipulations, also found\nthat he failed to understand and acknowledge the wrongful nature of his conduct. The panel\ntherefore rejected the sanction suggested by the parties and recommended that Paris serve a\nsix-month actual suspension from the practice of law in Ohio. The board adopted the panel\'s\nreport in its entirety.\nParis objects to the board\xe2\x80\x99s finding of an additional aggravating factor to which the parties had\nnot stipulated. He also argues that given the parties\' comprehensive stipulations and the limited\nnature of the testimony before the panel, this court should reject the sanction recommended by\nthe panel and adopt the stipulated sanction of the parties. We adopt the board\'s findings of fact\nand misconduct but sustain Paris\xe2\x80\x99s objections and suspend him from the practice of law in Ohio\nfor six months, all stayed on conditions.\nMisconduct\nFollowing an automobile accident that occurred on March 17, 2013, a woman hired Paris to\ndefend her in the Cleveland Municipal Court against charges of driving under the influence and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c351\ndriving under suspension, and her fianc\xc3\xa9 paid him $1,000. Paris stipulated that he referred to\nher as his \xe2\x80\x9cbeautiful Irish girl\xe2\x80\x9d but testified that he had referred to her as \xe2\x80\x9ca red haired Irish girl,\ncoming out of an Irish bar, in Cleveland, Ohio, on March 17th\xe2\x80\x9d only in the context of explaining\nthat no one was going to believe her claim that she had had only one drink before her St.\nPatrick\xe2\x80\x99s Day automobile accident. Paris also stipulated that during the course of his\nrepresentation, he asked his client to go out with him several times and invited her to his house\nto join him in his hot tub on more than one occasion. Although he never denied the truth of that\nstipulation, he also testified that the client\'s fianc\xc3\xa9 was present at all but one of their meetings.\nParis stipulated that his client was afraid to do anything about his conduct out of fear that it\nwould affect his representation. The client testified that his conduct made her uncomfortable but\nthat she never told him that she would not go out with him. Instead, she attempted to avoid the\nissue by saying, \xe2\x80\x9cWe\xe2\x80\x99ll see\xe2\x80\x9d or \xe2\x80\x9cWe will talk about it.\xe2\x80\x9d The client and her fianc\xc3\xa9 discussed her\nconcerns on several occasions and agreed that she would just go out with Paris so that he\nwould do a better job representing her, but she could not bring herself to go through with it. She\ntestified that as the case dragged on, however, she would have done \xe2\x80\x9cwhatever he wanted\xe2\x80\x9d to\nget it resolved.\nOn August 6, 2013, the client pleaded guilty to driving while under suspension and failure to\nmaintain reasonable control of her vehicle and was ordered to appear at a later date for\nsentencing. Paris stipulated that he not only failed to attend the sentencing hearing but that he\nalso failed to notify the client of his absence and to request that another attorney attend the\nhearing on his behalf. At the panel hearing, Paris acknowledged that stipulation and confirmed\nits truth. He testified, however, that he had asked his father to attend the client\'s sentencing\nhearing and that upon returning to the office after the hearing, his father reported that the case\nhad been \xe2\x80\x9csent to another judge.\xe2\x80\x9d Paris\xe2\x80\x99s father was not called as a witness, but he represented\nParis before the panel. During his closing argument, he stated that he attended the sentencing\nhearing at Paris\xe2\x80\x99s request. But the parties had stipulated \xe2\x80\x94 and the client\'s testimony confirmed\n\xe2\x80\x94 that when the judge asked her whether she was represented by counsel, she responded that\nParis had failed to appear and that she did not expect him to because \xe2\x80\x9che\xe2\x80\x99s been doing nothing\nbut trying to get in my pants.\xe2\x80\x9d\nBased on the client\xe2\x80\x99s statement, the judge vacated the client\xe2\x80\x99s plea and recused herself from the\ncase. The case was reassigned, and a public defender was appointed to represent the client.\nThe client ultimately pleaded guilty to operating an unsafe vehicle and was fined $200. She later\nfiled a grievance against Paris.\nThe board adopted the parties\xe2\x80\x99 stipulations and agreed that Paris\xe2\x80\x99s conduct violated\nProf.Cond.R. 1.3 (requiring a lawyer to act with reasonable diligence in representing a client)\nand 1.8(j) (prohibiting a lawyer from soliciting or engaging in sexual activity with a client unless a\nconsensual sexual relationship existed prior to the lawyer-client relationship).\nRecommended Sanction\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c352\nWhen imposing sanctions for attorney misconduct, we consider several relevant factors,\nincluding the ethical duties that the lawyer violated, relevant aggravating and mitigating\ncircumstances, and the sanctions imposed in similar cases.\nThe board adopted the parties\xe2\x80\x99 stipulation that Paris has no prior disciplinary record and\ncooperated with relator\xe2\x80\x99s investigation. It also noted that Paris did not present evidence of any\nother mitigating factors.\nIn addition to adopting the parties\xe2\x80\x99 stipulated aggravating factors \xe2\x80\x94 that Paris acted with a\nselfish motive and engaged in multiple offenses \xe2\x80\x94 the board found that Paris\xe2\x80\x99s conduct harmed\na vulnerable client. The board also found that Paris did not understand or accept the wrongful\nnature of his conduct based on testimony in which he (1) asked why the client referred a female\nfriend to him after terminating his representation if he was \xe2\x80\x9chitting on\xe2\x80\x9d her, (2) stated that the\nclient\'s fianc\xc3\xa9 was present during all but one of their meetings, (3) claimed that he merely\nreferred to the client as a \xe2\x80\x9cred haired Irish girl\xe2\x80\x9d \xe2\x80\x94 and only when explaining that no one was\ngoing to believe her claim that she had had only one drink before her St. Patrick\'s Day\nautomobile accident, and (4) claimed that his father had attended the client\xe2\x80\x99s sentencing\nhearing. While noting that relator offered no evidence that Paris engaged in a pattern of\nmisconduct, the board also commented that \xe2\x80\x9cthere is likewise no evidence to assure the panel\nthat it was an isolated event that is unlikely to reoccur.\xe2\x80\x9d\nThe parties jointly recommend that Paris be suspended for six months but that the suspension\nbe stayed in its entirety on the condition that he engage in no further misconduct. In support of\nthat sanction, the parties cited Disciplinary Counsel v. Hubbell (imposing a conditionally stayed\nsix-month suspension on an attorney who attempted to initiate a romantic relationship with a\nclient whom he represented, pro bono, in a custody dispute), and Disciplinary Counsel v.\nQuatman (imposing a conditionally stayed one-year suspension on an attorney who put his\nhands on a client\'s breasts for several seconds and told her that they were \xe2\x80\x9cvery nice\xe2\x80\x9d).\nNoting the increasing frequency of cases involving repeated and unwelcome solicitation of\nclients for sexual activity, the board, however, urges us to hold that in the absence of significant\nmitigating factors, this court will impose an actual suspension on attorneys who have engaged\nin such conduct \xe2\x80\x94 as we do in cases involving attorneys who have engaged in a material\nmisrepresentation to a court or have engaged in a pattern of dishonesty with a client.\nIn accordance with this suggested presumption and in light of Paris\xe2\x80\x99s repeated and unwelcome\nsolicitation of his client, his failure to appear for her sentencing hearing after she rebuffed his\nadvances, his failure to acknowledge the wrongful nature of his conduct, and the absence of\nadditional mitigating evidence, the board recommends that we suspend Paris from the practice\nof law for six months with no stay.\nParis\xe2\x80\x99s Objections\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c353\nIn his objections to the board\xe2\x80\x99s report and recommendation, Paris urges us to reject the board\xe2\x80\x99s\nfinding of the additional aggravating factor that Paris failed to accept the wrongful nature of his\nconduct. He also challenges the board\'s recommended sanction and urges us to adopt the\nparties\xe2\x80\x99 stipulated sanction of a fully stayed six-month suspension.\nWe agree that Paris did not plainly acknowledge the wrongful nature of his conduct or make a\nparticularly strong showing of remorse at the panel hearing. But we also note that despite the\nintention of the parties to submit the case entirely upon their stipulations, the panel sought to\nhear testimony not only from Paris but also from the grievant. This created some confusion\nregarding the scope of the evidence to be presented at the hearing. It also resulted in the\ninadvertent admission of testimony that touched upon stipulated issues. Although relator and\nthe panel chairperson expressed that it was their intention to rely on the stipulations rather than\nthe testimony in those instances, there is a possibility that some of Paris\xe2\x80\x99s contradictory\ntestimony was offered to rebut portions of the grievant\xe2\x80\x99s testimony on those stipulated issues.\nTherefore, in the interest of fairness, we decline to adopt additional aggravating factors based\non that testimony. Moreover, in light of Paris\'s nearly 30 years of practice with no disciplinary\nrecord prior to this incident, we are inclined to agree that there is some evidence that his\nbehavior in this matter is an isolated incident.\nWe have consistently disapproved of the conduct of lawyers who have solicited or engaged in\nsexual activity with their clients even before the adoption of Prof.Cond.R. 1.8(j), and depending\non the relative impropriety of the situation, we have imposed a wide range of disciplinary\nmeasures for such conduct. We have publicly reprimanded attorneys who have commenced\nconsensual sexual relationships with their clients that have not compromised the clients\'\ninterests. On the other end of the spectrum, we have disbarred an attorney who solicited sex\nfrom clients in exchange for a reduced legal fee, made inappropriate sexual comments to\nclients, touched them in a sexual manner, exposed himself to a client, and lied repeatedly\nduring the disciplinary process.\nIn between those two extremes, we typically impose term suspensions with all or part of the\nsuspension stayed, depending on the severity of the misconduct and the applicable aggravating\nand mitigating factors.\nWe by no means condone Paris\xe2\x80\x99s conduct in this matter, but on the stipulated facts before us,\nwe find that his actions are most comparable to cases in which we have imposed fully stayed\nsuspensions. Therefore, we sustain Paris\xe2\x80\x99s objection to the board\'s recommended sanction and\nfind that a six-month suspension, stayed on conditions, is the appropriate sanction for his\nmisconduct.\nAccordingly, Tasso Paris is suspended from the practice of law for six months, with the entire\nsuspension stayed on the conditions that he make full restitution of $1,000 to the affected client\nand engage in no further misconduct. If Paris fails to comply with the conditions of the stay, the\nstay will be lifted and he will serve the full six-month suspension. Costs are taxed to Paris.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c354\nKENNEDY, J., concurring.\nI agree with the majority that a six-month suspension, stayed on conditions, is the appropriate\nsanction for the misconduct of respondent, Tasso Paris. The majority opinion tacitly rejects the\nboard\'s request that we adopt a new presumption that in the absence of significant mitigating\nfactors, the court will impose an actual suspension for the repeated and unwelcome solicitation\nof vulnerable clients for sexual activity. The dissenting opinion argues in favor of adopting this\npresumption. I write separately to squarely address whether it is this court\'s role to create a new\npresumption in favor of an actual suspension in lieu of our deeply rooted process of determining\nthe appropriate sanction in each individual case.\nGov. Bar R. V(13) imposes a duty on the Board of Professional Conduct to examine the unique\nfacts and circumstances of each disciplinary case, the aggravating and mitigating factors\napplicable to the individual attorney, and his or her life circumstances in order to determine the\nappropriate sanction for that particular attorney. Therefore, the establishment of a presumption\nof an actual suspension would be antithetical to our rules.\nIn 1995, this court established a presumption of an actual suspension in cases with misconduct\ninvolving dishonesty, fraud, deceit, or misrepresentation, absent mitigating factors justifying a\nstay. A majority of the court in Fowerbaugh reasoned that a presumption was warranted for\nconduct by an attorney involving deception, falsehood, or fraud because \xe2\x80\x9csuch conduct strikes\nat the very core of a lawyer\xe2\x80\x99s relationship with the court and with the client. Respect for our\nprofession is diminished with every deceitful act of a lawyer.\xe2\x80\x9d\nIn my view, however, deception and fraud are not the only types of misconduct that strike at the\ncore of a lawyer\xe2\x80\x99s relationship with the court and with the client. Instead, every act of\nmisconduct does so and diminishes the honor and nobility of our great profession. But to echo\nthe views expressed in Justice Resnick\'s separate opinion in Fowerbaugh:\nIt is the responsibility of this court to give guidance as to what conduct constitutes a\nviolation of the Disciplinary Rules. It is not the province of this court to use syllabus law\nto mandate a particular sanction once a violation has been found. The sanction in each\nindividual\'s case should be determined based upon the unique facts and circumstances\nof that case.\nWithout question, inappropriate sexual conduct by an attorney toward his or her client\nundermines the attorney-client relationship and diminishes respect for our profession. However,\nif we were to adopt a presumption of an actual suspension for this category of misconduct\nbased on the reasoning advanced by the majority in Fowerbaugh, why not extend this approach\nand establish a similar presumption for any and all cases involving violations that undermine the\nattorney-client relationship and diminish respect for our profession? Adoption of the proposed\npresumption in this case would move us closer to a reality in which the \xe2\x80\x9cexception swallows the\nrule.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c355\nGov.Bar R. V(2)(A) provides that \xe2\x80\x9cexcept as otherwise expressly provided in rules adopted by\nthe Supreme Court, all grievances involving alleged misconduct by attorneys shall be brought,\nconducted, and disposed of in accordance with the provisions of this rule.\xe2\x80\x9d This provision\napplies to all of Gov. Bar R. V, including Gov. Bar R. V(13). Presuming an actual suspension\nwould fundamentally transform our well-established individualized process of attorney discipline\ninto a formulaic \xe2\x80\x9cone size fits all\xe2\x80\x9d system. This philosophical shift should be carried out, if ever,\nonly pursuant to this court\'s longstanding rulemaking process, not through judicial fiat. It is for\nthe members of the legal community \xe2\x80\x94 guided by the principle that the primary purpose of the\ndisciplinary process is not to punish the offender but to \xe2\x80\x9cprotect the public against members of\nthe bar who are unworthy of the trust and confidence essential to the relationship of attorney\nand client\xe2\x80\x9d \xe2\x80\x94 to debate whether it would be appropriate to establish a presumption of an actual\nsuspension.\nAccordingly, I respectfully concur.\nLANZINGER, J., dissenting.\nThis court has been asked to consider establishing a presumption that in the absence of\nsignificant mitigating factors, we will impose an actual suspension on attorneys who engage in\nthe repeated and unwelcome solicitation of vulnerable clients for sexual activity. We already\npresume that an actual suspension will be the sanction for behavior involving dishonesty, fraud,\ndeceit, or misrepresentation, unless mitigating factors justify a stay. I believe that the same type\nof sanction should be imposed upon respondents like Tasso Paris, especially because it\nappears that cases of this type are increasing.\nIn my view, this court should do more than merely express disapproval of the attorney\xe2\x80\x99s actions\nby imposing a stayed suspension. The extent of the mitigation is that he has no previous\ndiscipline and has cooperated with the investigation. On the other hand, he stipulated that he\nacted with a selfish motive and engaged in multiple offenses. In addition, the board found that\nhe did not understand or accept the wrongful nature of his actions and so failed to show that his\nmisconduct was unlikely to recur. Most importantly, the client was harmed when Paris did not\nappear for her sentencing, conduct that she attributed to her rebuffing his sexual advances.\nI respectfully dissent from the court\'s judgment with respect to the sanction in this case. I would\nadopt the recommendation of both the panel and the board and would suspend Paris from the\npractice of law for a period of six months.\nO\'CONNOR, C.J., and O\'NEILL, J., concur in the foregoing opinion.\nQuestions:\nDisciplinary Counsel v. Engler, 110 Ohio St. 3d 138 (Ohio 2006)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c356\nSummary: Attorney Engler had two sexual encounters with a 28-year-old female divorce\nclient. The client relationship began in June 2004 when Engler credited her bill for a\n$400 painting of hers. In August she and her husband agreed to dissolve their marriage.\nIn September, Engler and his client met at a restaurant to discuss the dissolution\nprocess and afterwards they had consensual sexual relations. Seven to ten days later,\nthey did it again at Engler\xe2\x80\x99s home. Engler informed his client that they could no longer\nhave a personal relationship until her case was over and she was no longer his client.\nEngler did some more work for his client but was dismissed in October. He reimbursed\nhis client for all she had paid and returned her painting. Because of several mitigating\nfactors including he had no prior record, he made restitution, he was cooperative in the\ndisciplinary proceedings, and had a good reputation, the Court imposed nothing more\nthan a public reprimand.\nRespondent, David Lee Engler of Boardman, Ohio was admitted to the practice of law in Ohio in\n1985.\nOn October 10, 2005, relator, Disciplinary Counsel, charged respondent with violating the Code\nof Professional Responsibility by engaging in a sexual relationship with a client. A panel of the\nBoard of Commissioners on Grievances and Discipline heard the cause on the parties\xe2\x80\x99 consentto-discipline agreement, filed pursuant to Section 11 of the Rules and Regulations Governing\nProcedure on Complaints and Hearings Before the Board of Commissioners on Grievances and\nDiscipline. The panel accepted the parties\xe2\x80\x99 agreement and made corresponding findings of\nmisconduct and a recommendation, which the board adopted.\nMisconduct\nThe parties stipulated that respondent had two sexual encounters with a divorce client and had\nthereby violated DR 1-102(A)(6) (prohibiting conduct that adversely reflects on a lawyer\'s fitness\nto practice law) and 5-101(A)(1) (prohibiting a lawyer from accepting employment if the exercise\nof professional judgment on behalf of a client will be or reasonably may be affected by the\nlawyer\'s personal interests). The parties also agreed that respondent\xe2\x80\x99s misconduct warranted a\npublic reprimand.\nRespondent has a law practice under the name of Engler & Associates. On June 29, 2004, a\n28-year-old female client consulted respondent about ending her marriage. During their\ndiscussions, respondent learned that the client was an artist and had sold some of her\npaintings. He indicated an interest in possibly purchasing her work, and sometime later, the\nclient brought paintings to respondent\'s office. Respondent offered to buy some of the paintings\nby crediting the client for $400 toward his $1,000 fee. The client agreed to trade the paintings\nand paid the balance of respondent\'s $600 legal fee.\nThe client expected her husband to agree to dissolve their marriage, and in late August 2004,\nrespondent sent a separation agreement to the husband for review. On September 8, 2004,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c357\nrespondent met his client at a restaurant to discuss the dissolution process. Afterward,\nrespondent and the client went to his house and engaged in consensual sexual relations.\nApproximately seven to ten days later, the client visited respondent at home again, and the\ncouple again had consensual sex. Respondent subsequently told his client that he could not\ncontinue to have a personal relationship with her until her case had ended and she was no\nlonger his client. About the same time, respondent wrote a memo to the client\'s file indicating he\nhad told the client he could not have a personal relationship with her and that the client had\nagreed.\nIn late September 2004, an attorney representing the husband sent respondent proposed\nchanges to the dissolution agreement. Early in October 2004, respondent met with his client in\nthe presence of his assistant to review the changes and then wrote to the other lawyer\nregarding those changes.\nIn a telephone conversation on October 12, 2004, respondent again told his client that he could\nnot continue their personal relationship while he was representing her. The next day, the client\nsent a letter of dismissal to respondent. Respondent promptly replied with a letter indicating that\nhe had completed his work in her case. Respondent enclosed a final invoice and a check\nreimbursing the client for the remaining balance of her paid fees. Later, respondent also\nreturned the paintings that he had accepted from his client in partial payment of his fees.\nRecommended Sanction\nIn recommending a sanction for respondent\xe2\x80\x99s misconduct, the board weighed the mitigating and\naggravating factors of his case.\nThe parties stipulated to the mitigating factors that (1) respondent had no prior disciplinary\nrecord, (2) he had made timely good-faith efforts at restitution, (3) he made a full and free\ndisclosure of information and was cooperative in the disciplinary proceedings, and (4) he had a\ngood reputation in the legal community apart from the underlying misconduct. According to the\nparties, respondent on his own initiative had also received instruction on ethics and practice\nmanagement from a former president of the Mahoning County Bar Association. In addition, the\nboard found that respondent had acknowledged his wrongdoing in this isolated incident of\nmisconduct.\nAdopting the panel\xe2\x80\x99s report, the board recommended that respondent receive a public\nreprimand for his misconduct.\nReview\nWe agree that respondent violated DR 1-102(A)(6) and 5-101(A)(1), as found by the board.\nMoreover, we generally impose a public reprimand when a sexual relationship develops during\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c358\nan attorney-client relationship if the affair is legal and consensual and has not compromised\nclient interests. Therefore, we find the recommended sanction appropriate.\nRespondent is therefore publicly reprimanded for his violations of DR 1-102(A)(6) and 5101(A)(1).\nDisciplinary Counsel v. Hines, 133 Ohio St. 3d 166 (Ohio 2012)\nSummary: Attorney Dean Hines agreed to represent a client in an ongoing domesticrelations dispute with her ex-husband. Hines invited her to dinner and assured her a\npersonal relationship would not pose a conflict of interest; after a second dinner the next\nevening, they had sex. His client testified she was afraid to resist Hines\xe2\x80\x99 advances\nbecause she needed his legal assistance. In the months that followed Hines hired her as\nhis bookkeeper, leased her a car, helped with her mortgage and utility payments, and\ntravelled together to Austria, Arizona, and South Carolina, and let her and her children\nlive with him while she recuperated from surgery. Eventually, the relationship fell apart\nand Hines called 911 for a domestic violence incident. He fired the client the next day-the same time at which she received an adverse ruling she could only object to within 11\ndays. Considering some aggravating factors, including the client\xe2\x80\x99s sensitivity and Hines\ndownplaying of his wrongdoing, the Court imposed a six month suspension.\nRespondent, Dean Edward Hines of Centerville, Ohio was admitted to the practice of law in\nOhio in 1994. On October 11, 2010, relator, disciplinary counsel, filed a complaint alleging that\nHines had engaged in an inappropriate relationship with a client and violated Prof.Cond.R. 1.8(j)\nand 8.4(h).\nThe parties stipulated to Hines\xe2\x80\x99s misconduct. Upon the parties\xe2\x80\x99 stipulations, the Board of\nCommissioners on Grievances and Discipline accepted the parties\xe2\x80\x99 joint recommendation that\nwe publicly reprimand Hines. However, we did not accept the recommendation and remanded\nthe case for further proceedings.\nOn October 14, 2011, the Board of Commissioners on Grievances and Discipline issued a\nsecond report and recommended a 12-month suspension of Hines\xe2\x80\x99s law license, with six\nmonths stayed.\nMisconduct\nIn early 2009, Hines agreed to represent a new client in an ongoing domestic-relations dispute\nwith the client\xe2\x80\x99s ex-husband. On March 16, 2009, after several appointments and a pretrial\nconference, Hines invited the client to dinner, where he discussed his interest in dating her.\nHines assured the client that a personal relationship between the two would not pose a conflict\nof interest with respect to their attorney-client relationship. After another dinner the next\nevening, Hines and the client became sexually intimate. Describing her feelings at this time, the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c359\nclient later testified that she was overwhelmed by Hines\xe2\x80\x99s advances and that she was afraid to\nresist him when she needed his legal assistance.\nIn the months that followed, Hines continued to represent the client in the domestic dispute\nwhile continuing their romantic relationship. Hines hired the client to work as a bookkeeper at\nhis law firm, leased a car for her use, and contributed to her mortgage and utility payments.\nThey traveled together to Austria, Arizona, and South Carolina, and when the client underwent\nsurgery requiring a lengthy recovery period, Hines moved the client and her children into his\nhome.\nThe relationship fell apart in November 2009. On November 9, 2009, Hines called 9-1-1 to\nreport a domestic dispute with the client. He filed charges of aggravated menacing and\ndomestic violence and obtained a temporary protection order barring any contact with Hines.\nThe charges were eventually dropped.\nThe day after their altercation, Hines fired the client. A few days later, he mailed a letter\nsimultaneously notifying her of an adverse ruling in the underlying domestic case and of the end\nof their attorney-client relationship.\nWhen Hines mailed the letter, 11 days remained in which the client could protect her legal rights\nby objecting to the magistrate\xe2\x80\x99s ruling. Hines must have known about the client\'s vulnerability;\nduring their relationship, she had faced financial troubles and a serious physical illness requiring\nsurgery, not to mention the legal issues for which she had sought Hines\xe2\x80\x99s help. Yet Hines did\nnot seek leave for an extension of this deadline, refer the client to another attorney, or otherwise\nassist the client in protecting her rights. Instead, he left a vulnerable client without legal\nrepresentation or assistance at a critical time in her case, and he did so through an accusatory\nletter that blamed the client for the adverse decision.\nAlthough he left the client without counsel to protect her rights, Hines continued to make\novertures to her. He repeatedly e-mailed her and sent her text messages. As a practical matter,\nthese overtures encouraged the client to violate the temporary protection order. She did not\naccept that invitation, even after Hines\xe2\x80\x99s promises that he would not report her to police if she\nresponded.\nThe parties have stipulated that Hines\xe2\x80\x99s conduct violated Prof.Cond.R. 1.8(j), which generally\nprohibits sexual activity between attorneys and their clients, and Prof.Cond.R. 8.4(h), which bars\nbehavior that reflects adversely on the fitness of a lawyer to practice law. We adopt the board\'s\nfindings of fact and misconduct.\nSanction\nThe parties stipulated to the absence of aggravating factors. However, the Board of\nCommissioners on Grievances and Discipline identified several aggravating factors pertaining to\nHines\'s misconduct: (1) he \xe2\x80\x9cknew from the outset that his conduct violated the Ohio Rules of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c360\nProfessional Conduct but he nevertheless acted with a clearly selfish motive,\xe2\x80\x9d (2) he \xe2\x80\x9chas\nattempted to excuse or minimize that conduct rather than acknowledge that it was wrong,\xe2\x80\x9d and\n(3) the client \xe2\x80\x9cwas a vulnerable person and has been harmed as a result of\xe2\x80\x9d Hines\'s misconduct.\nHines objects to these findings. We overrule the objections and adopt the findings of\naggravating factors.\nThe parties stipulated to the following mitigating factors: (1) Hines has no prior disciplinary\nrecord, (2) Hines cooperated with the investigation of his misconduct, and (3) as evidenced by\nseveral letters of support, Hines enjoys a positive reputation in the legal community.\nDisciplinary counsel suggests a six-month suspension, with all six months stayed. Hines\nsuggests a public reprimand or a stayed suspension of no more than six months. The Board of\nCommissioners on Grievances and Discipline recommends that we suspend Hines from the\npractice of law for 12 months, with the final six months stayed.\nIn the past, we have imposed public reprimands on attorneys who engaged in improper\nconsensual relationships with their clients, when the relationships did not compromise the\nclients\xe2\x80\x99 interests. But this is not a simple case of mutual consent; Hines used his position of\npower to initiate and pursue an intimate relationship with a vulnerable client who was afraid to\nresist. Furthermore, Hines\xe2\x80\x99s conduct in leaving the client without legal assistance at a critical\njuncture in her case threatened her interests. A public reprimand is not enough.\nNor do we find Hines\'s misdeeds comparable to those of attorneys whom we have suspended.\nHines\xe2\x80\x99s conduct involved only one client, he has not engaged in any deception to hide the\nmisconduct, and he has cooperated with the disciplinary process.\nThe appropriate penalty in cases like these is often a stayed suspension, which reflects the\nhope that the misconduct is limited to one occurrence and the reality that its recurrence would\nnecessitate serious consequences.\nLike Hines, the attorney in Burkholder pursued an improper relationship with a vulnerable\ndomestic-relations client. Burkholder made numerous advances to the client until she fired him.\nHowever, Burkholder had no prior disciplinary violations, and he cooperated throughout the\ndisciplinary process. We imposed a six-month, stayed suspension of Burkholder\'s license to\npractice law.\nWe imposed the same penalty in Disciplinary Counsel v. Siewert. The attorney in Siewert\nengaged in a consensual but improper relationship with a domestic-relations client. Unlike\nHines, Siewert had a record of prior discipline; however, we noted as mitigating factors\nSiewert\xe2\x80\x99s struggles with depression and his efforts to correct his personal problems.\nWe find Burkholder and Siewert instructive. Like the attorneys in those cases, Hines made a\nserious mistake and abused the position of trust conferred upon attorneys, but the limited nature\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c361\nof his misconduct and his cooperative approach to the investigation give us reason to believe\nthat Hines will conduct himself appropriately in the future.\nAccordingly, we suspend Hines from the practice of law for six months, and we stay the\nsuspension on the condition that Hines engage in no further misconduct. Costs are taxed to\nHines.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c362\nSection 5: Confidentiality\n5.1: The Duty of Confidentiality\nI don\xe2\x80\x99t know where you heard it. Don\'t know who\xe2\x80\x99s spreading it round. All I know is, I\xe2\x80\x99m clean as\na whistle, baby. I didn\'t utter a sound. I never said nothing.63\nAttorneys have a fiduciary duty of confidentiality to their clients. The duty of confidentiality\nprovides that attorneys may not disclose confidential information provided to them by their\nclients, unless their clients consent to disclosure, or an exception to the duty of confidentiality\npermits disclosure. The duty of confidentiality applies to both current and former clients. Clients\ndisclose confidential information to their attorneys in order to obtain legal advice. Generally,\nclients are entitled to assume that their attorney has a duty to maintain the confidentiality of any\ninformation disclosed in private. However, the duty of confidentiality does not apply to\ninformation that is \xe2\x80\x9cgenerally known\xe2\x80\x9d to the public.\nThe duty of confidentiality is broader in scope than the attorney-client privilege and the work\nproduct doctrine. Information that is not privileged or protected from disclosure as attorney work\nproduct may still be protected by the duty of confidentiality. Attorneys may not disclose\nconfidential information about their clients without informed consent, unless one of the\nexceptions to confidentiality applies. Accordingly, the duty of confidentiality provides less\nprotection to confidential client information than the attorney-client privilege or the work product\ndoctrine, which may preclude the disclosure of confidential information when the duty of\nconfidentiality alone would not.\nModel Rule 1.6: Confidentiality of Information\na. A lawyer shall not reveal information relating to the representation of a client unless the\nclient gives informed consent, the disclosure is impliedly authorized in order to carry out\nthe representation or the disclosure is permitted by paragraph (b).\nb. A lawyer may reveal information relating to the representation of a client to the extent the\nlawyer reasonably believes necessary:\n1. to prevent reasonably certain death or substantial bodily harm;\n2. to prevent the client from committing a crime or fraud that is reasonably certain to\nresult in substantial injury to the financial interests or property of another and in\nfurtherance of which the client has used or is using the lawyer\xe2\x80\x99s services;\n3. to prevent, mitigate or rectify substantial injury to the financial interests or\nproperty of another that is reasonably certain to result or has resulted from the\nclient\'s commission of a crime or fraud in furtherance of which the client has used\nthe lawyer\xe2\x80\x99s services;\n4. to secure legal advice about the lawyer\xe2\x80\x99s compliance with these Rules;\n\n63\n\nLiz Phair, Never Said, Exile in Guyville (1993).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c363\n5. to establish a claim or defense on behalf of the lawyer in a controversy between\nthe lawyer and the client, to establish a defense to a criminal charge or civil claim\nagainst the lawyer based upon conduct in which the client was involved, or to\nrespond to allegations in any proceeding concerning the lawyer\'s representation\nof the client;\n6. to comply with other law or a court order; or\n7. to detect and resolve conflicts of interest arising from the lawyer\xe2\x80\x99s change of\nemployment or from changes in the composition or ownership of a firm, but only\nif the revealed information would not compromise the attorney-client privilege or\notherwise prejudice the client.\nc. A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized\ndisclosure of, or unauthorized access to, information relating to the representation of a\nclient.\nModel Rule 1.6: Confidentiality of Information, Comment [2]\nA fundamental principle in the client-lawyer relationship is that, in the absence of the\nclient\'s informed consent, the lawyer must not reveal information relating to the\nrepresentation. This contributes to the trust that is the hallmark of the client-lawyer\nrelationship. The client is thereby encouraged to seek legal assistance and to\ncommunicate fully and frankly with the lawyer even as to embarrassing or legally\ndamaging subject matter. The lawyer needs this information to represent the client\neffectively and, if necessary, to advise the client to refrain from wrongful conduct. Almost\nwithout exception, clients come to lawyers in order to determine their rights and what is,\nin the complex of laws and regulations, deemed to be legal and correct. Based upon\nexperience, lawyers know that almost all clients follow the advice given, and the law is\nupheld.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 59 (2000): Definition of\n\xe2\x80\x9cConfidential Client Information\xe2\x80\x9d\nConfidential client information consists of information relating to representation of a\nclient, other than information that is generally known.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 59 (2000): Comment b, Kinds of\nconfidential client information\nA client\xe2\x80\x99s approach to a lawyer for legal assistance implies that the client trusts the\nlawyer to advance and protect the interests of the client. The resulting duty of loyalty is\nthe predicate of the duty of confidentiality. The information that a lawyer is obliged to\nprotect and safeguard is called confidential client information in this Restatement.\nThis definition covers all information relating to representation of a client, whether in oral,\ndocumentary, electronic, photographic, or other forms. It covers information gathered\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c364\nfrom any source, including sources such as third persons whose communications are\nnot protected by the attorney-client privilege. It includes work product that the lawyer\ndevelops in representing the client, such as the lawyer\xe2\x80\x99s notes to a personal file, whether\nor not the information is immune from discovery as lawyer work product. It includes\ninformation acquired by a lawyer in all client-lawyer relationships, including functioning\nas inside or outside legal counsel, government or private-practice lawyer, counselor or\nlitigator, advocate or intermediary. It applies whether or not the client paid a fee, and\nwhether a lawyer learns the information personally or through an agent, for example\ninformation acquired by a lawyer\'s partners or associate lawyers or by an investigator,\nparalegal, or secretary. Information acquired by an agent is protected even if it was not\nthereafter communicated to the lawyer, such as material acquired by an investigator and\nkept in the investigator\'s files.\nThe definition includes information that becomes known by others, so long as the\ninformation does not become generally known. The fact that information falls outside the\nattorney-client privilege or work-product immunity does not determine its confidentiality\nunder this Section.\nA lawyer may learn information relevant to representation of a client in the course of\nrepresenting another client, from casual reading or in other accidental ways. In the\ncourse of representation, a lawyer may learn confidential information about the client\nthat is not necessary for the representation but which is of a personal or proprietary\nnature or other character such that the client evidently would not wish it disclosed. Such\ninformation is confidential under this Section.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 60 (2000): A Lawyer\'s Duty to\nSafeguard Confidential Client Information\n1. Except as provided in \xc2\xa7\xc2\xa7 61- 67, during and after representation of a client:\na. the lawyer may not use or disclose confidential client information as defined in \xc2\xa7\n59 if there is a reasonable prospect that doing so will adversely affect a material\ninterest of the client or if the client has instructed the lawyer not to use or disclose\nsuch information;\nb. the lawyer must take steps reasonable in the circumstances to protect\nconfidential client information against impermissible use or disclosure by the\nlawyer\'s associates or agents that may adversely affect a material interest of the\nclient or otherwise than as instructed by the client.\n2. Except as stated in \xc2\xa7 62, a lawyer who uses confidential information of a client for the\nlawyer\'s pecuniary gain other than in the practice of law must account to the client for\nany profits made.\nConfidential & Privileged Information\nIn re Advisory Opinion No. 544 of NJ Sup. Court, 511 A. 2d 609 (N.J. 1986)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c365\n\nSummary: The Community Health Law Project represented indigent and disabled\nclients in New Jersey. Organizations providing funding requested client-identifying\ninformation, but the Law Project provided only anonymized information. Some of the\nfunders objected, and the Advisory Committee on Professional Ethics found that\ndisclosure would not violate client confidence. The Law Project appealed, and the court\nheld that the attorney-client privilege and duty of confidentiality precluded the Law\nProject from disclosing identifying information about its clients without informed consent\nor a reasonable regulatory obligation.\nWe are called to consider in this case the application of attorney-client protections to the\nrelationship between a public legal services organization and the individuals whom it assists.\nThe issue posed is whether certain information relating to the clients of a legal services\norganization, which provides legal assistance to mentally impaired or disabled and indigent\npersons, may be disclosed to the private and governmental entities that provide funds to the\norganization, without violating the protections of confidentiality accorded attorney-client\ncommunications and relationships.\nThe legal services organization resisting such disclosure is the Community Health Law Project.\nIt is a non-profit organization providing legal services to indigent, mentally disabled and retarded\npersons in Essex, Mercer, Union, and Camden counties. Its legal services are funded by private\nand public sources. Various contracts with the funding entities obligate the Law Project to make\nperiodic reports relating to the services provided, including in some instances information about\nthe individual clients served.\nUnder the funding plans of several community mental health centers, identifying, descriptive\ninformation, such as a client\'s name, address, and date of birth, have been sought by the\nentities providing funds. The Law Project has chosen not to reveal the identity of individual\nclients by furnishing such information. Rather, it has attempted to accommodate these requests\nby providing data that have been aggregated and by disclosing information on individual clients\nonly to the extent and in a manner that the revelation would not serve to identify the clients\ndirectly or indirectly. However, several funding entities expressed their dissatisfaction with the\ngeneralized nature of the information received from the Law Project and have insisted upon\nobtaining individual client-identifying information.\nIn the face of these more particularized demands, the Law Project has taken the position that\nsuch identifying information is or may be protected from disclosure under the strictures\ngoverning the professional conduct of lawyers. However, confronted by this genuine ethical\ndilemma, the Law Project sought guidance from the Advisory Committee on Professional Ethics\nin January 1984 to ensure that disclosure would not violate any ethical precepts.\nIn Opinion No. 544, the ACPE ruled that the disclosure of the information requested by private\nand public funding entities does not violate the confidences of the Law Project\xe2\x80\x99s clients and that\nthe information requested would not violate client secrets or confidences within the meaning of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c366\nthen-applicable ethics standards. The Law Project then filed a petition with this Court to review\nthe determination of the ACPE, which was originally denied. A motion for reconsideration of the\ndenial was then granted by this Court.\nWe must initially consider the applicability of the attorney-client privilege to the relationships that\nexist between the Law Project and its clientele. The Law Project, as we have noted, is an\norganization that provides legal services to a particular class of persons, consisting of indigent,\nmentally-retarded, or disabled individuals. These persons are in need of legal assistance but\ncannot otherwise afford to retain an attorney and hence turn to the Law Project for legal help.\nThe Law Project engages licensed attorneys of the State, who furnish legal advice and\ncounselling to the individuals eligible for such services.\nAs licensed attorneys, the Law Project\xe2\x80\x99s lawyers are subject in every respect to the rules\ngoverning the professional conduct of lawyers. Accordingly, lawyers employed by governmental\nor public interest organizations are bound by the same ethical mandates of the Supreme Court\'s\nRules of Professional Conduct, as well as other standards governing the professional activities\nof licensed attorneys.\nFurther, the persons who receive the legal services of the Law Project through its individual staff\nattorney are \xe2\x80\x9cclients.\xe2\x80\x9d A client, in the context of the attorney-client privilege, is a person who\n\xe2\x80\x9cconsults a lawyer for the purpose of retaining the lawyer or securing legal service or advice\nfrom him in his professional capacity.\xe2\x80\x9d Consequently, it is not questioned that there exists\nbetween the Law Project and its attorneys who render legal services and the persons who\nreceive those services an attorney-client relationship to which the attorney-client privilege fully\napplies.\nIt is also beyond question that indigent, needy, or otherwise eligible clients, assisted by\nattorneys without fees, are entitled to the same protections as clients who retain private counsel.\nBecause the status of clients in every sense is ascribed to these persons, we must accordingly\nconsider in this case the extent of these client-protections, particularly as to matters falling\nwithin the ambit of the attorney-client privilege.\nThe major focus of the attorney-client privilege has historically and traditionally been upon the\ncommunications that occur or information that is exchanged between an attorney and his or her\nclient relating to the special attorney-client relationship. The attorney-client privilege is\nrecognized as one of \xe2\x80\x9cthe oldest of the privileges for confidential communications.\xe2\x80\x9d While the\nattorney-client privilege has evolved and changed in terms of its emphasis and applications, the\nprimary justification and dominant rationale for the privilege has come to be the encouragement\nof free and full disclosure of information from the client to the attorney. This has led to the\nrecognition that the privilege belongs to the client, rather than the attorney.\nThe extent of the protection accorded communications and other information arising in the\ncourse of any attorney-client relationship is governed by the attorney-client privilege as well as\nseveral ethics standards. The attorney-client privilege itself, while rooted in the common law,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c367\nhas acquired a basis in both statute and rule. This codification provides that communications\nbetween a lawyer and his or her client in the course of that relationship and in professional\nconfidence are privileged; a client has a privilege (a) to refuse to disclose any such\ncommunication, and (b) to prevent his or her lawyer from disclosing it. While in a sense the\nprivilege belongs to the client, the lawyer is obligated to claim the privilege unless otherwise\ninstructed by the client or the client\'s representative.\nThe scope of the attorney-client privilege or protections is also subject to ethics rules governing\nattorney conduct. In this case, the ACPE determined the issue posed by the Law Project under\nthe former Disciplinary Rules. It applied Disciplinary Rule 4-101(A), entitled \xe2\x80\x9cPreservation of\nConfidences and Secrets of a Client.\xe2\x80\x9d Under this rule, confidences are defined as information\nprotected by the attorney-client privilege under applicable law. Ibid. The rule also deals with\n\xe2\x80\x9csecrets,\xe2\x80\x9d which are defined as other information gained in the professional relationship that the\nclient has requested be held inviolate or the disclosure of which would be embarrassing or\ndetrimental to the client.\nThe Disciplinary Rules have been superseded by the Rules of Professional Conduct. The\nrelevant rule now provides that a lawyer shall not reveal information relating to representation of\na client unless the client consents after consultation except for disclosures that are impliedly\nauthorized in order to carry out the representation. In comparison to the provisions of the former\nDisciplinary Rule, this Rule expands the scope of protected information to include all information\nrelating to the representation, regardless of the source or whether the client has requested it be\nkept confidential or whether disclosure of the information would be embarrassing or detrimental\nto the client. Thus, the definition of confidential information under Rules of Professional Conduct\n1.6(a) is broader and more inclusive than that of Disciplinary Rule 4-101(A).\nThe ethics rules generally forbid disclosure of client information, without the client\'s consent,\nunless one of the exceptions to the rule is available. Disclosure of client information is\npermissible if the client consents after consultation. In this case no one urges the possible\napplicability of this provision dealing with consent. In situations such as this where the clients\nreceiving legal services are indigent as well as mentally impaired or disabled, they may not be\nable to appreciate the nature or importance of their own interests or their ability to resist or\ndecline consent or disclosure.\nThe appropriate analysis must therefore focus upon whether the revelation of client information\nto someone other than the lawyer amounts to the impermissible disclosure of a privileged\ncommunication or a secret or information relating to the relationship. That inquiry is here\nparticularized in terms of whether certain information that identifies the disabled and indigent\npersons receiving legal services from a legal services project may be disclosed to funding\nsources without violating the attorney-client privilege as defined by both statute and the Court\'s\nethics strictures governing professional conduct.\nArguably \xe2\x80\x9cinformation gained in the course of an attorney-client relationship,\xe2\x80\x9d as provided under\nthe former Disciplinary Rule 4-101(A), might not include information that consists of only the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c368\nidentity of the client. The thrust of this definitional standard appears to be directed to information\nin the nature of communications. While a client\xe2\x80\x99s identity per se might not be necessarily\nconsidered a privileged communication as such, in some instances disclosure of identity may\nindirectly reveal other information about the client. Hence, depending upon the nature of such\nadditional or collateral information that is revealed by the disclosure of a client\'s identity, the\nneed for confidentiality could appropriately cloak even identity. In this case, for example,\ndisclosure of the identity of clients of the Law Project would be tantamount to the revelation of\nthe mental and financial status of the individuals, as well as the fact that he or she has a legal\nproblem that required the services of an attorney.\nFurthermore, under the former Disciplinary Rules, it would appear that matters such as the\nidentification or address of a client could still be considered to be a \xe2\x80\x9csecret\xe2\x80\x9d entitled to nondisclosure. In Fellerman v. Bradley, an attorney refused to disclose the address of his client,\nthereby thwarting the enforcement of a divorce judgment against the client. The Court\nconcluded that this information could be considered a confidence or in the nature of a protected\nsecret covered by the attorney-client privilege and the Disciplinary Rule, holding nonetheless\nthat, in the circumstances, the fraud exception to the privilege applied to preclude nondisclosure of the client\'s address.\nThe dilemma posed by requests for client-identity information has been addressed by the\nAmerican Bar Association Committee on Professional Ethics and various state advisory\ncommittees. In an opinion issued in 1969, the Committee ruled that a legal services office could\nallow the accounting office to examine its intake and disposition forms provided all identifying\ndata were deleted. Similarly, in 1974, the Committee determined that a legal services\norganization could reveal client information to its Board of Directors if anonymity was preserved,\nthe information was reasonably required by the board for a legitimate purpose, and the client\nexpressed an informed consent.\nThe Board of Professional Responsibility of the Supreme Court of Tennessee reached a similar\nresult. It determined that a client\'s name, address, zip code, sex, race, age, social security\nnumber, phone number, source of referral, and the dates representation began were all secrets\nwithin the meaning of Disciplinary Rule 4-101 and could not be disclosed to funding sources\nunless the client consented.\nWe are persuaded by the soundness of these opinions. Also highly relevant to our analysis is\nthe fact that client information that serves to identify the client would clearly be protected under\nthe current Rules of Professional Conduct, RPC 1.6. As noted, this rule accords confidentiality\nto any information relating to the representation of a client. Manifestly this would include a\nclient\'s identity.\nAccordingly, we hold that under current standards governing attorney conduct, client-identity\nmay not be disclosed to any private or public funding agency in the absence of appropriate\nconsent or other legal justification. In so ruling, we determine that a client\'s identity constitutes\ninformation relating to the representation of a client under the current Rules of Professional\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c369\nConduct and a secret entitled to non-disclosure, if not a protected confidential communication,\nunder the attorney-client privilege and former Disciplinary Rule 4-101(A), which was relied upon\nby the ACPE in this case.\nIt is further suggested that even though this information might otherwise be subject to a privilege\nagainst disclosure, there may be a legal justification that would allow such disclosure.\nDisclosure of such information is permissible because, it is contended, the information sought is\nrequired to be furnished by law. The Division of Mental Health and Hospitals has promulgated\nregulations requiring reporting for all agencies receiving financial assistance through the\nDivision, to aid in monitoring compliance and for program planning and development. Also,\nunder N.J.A.C. 10:37-6.84 information such as client services and fiscal reports are to be\nsubmitted to the Division. Further, the Divisions of Mental Health and Hospitals and\nDevelopmental Disabilities and the various county mental health agencies are required to\nmaintain the confidentiality of any client information it receives from the Law Project. It is\ncontended that the reporting of information is needed to comply with these regulations and that\nthis would not constitute either impermissible disclosure or public disclosure of client information\nviolative of applicable ethics restrictions.\nUnder the Rules of Professional Conduct a lawyer may reveal such information to the extent the\nlawyer reasonably believes necessary to comply with the law. However, the regulations\npromulgated by the Division that provide for reporting as related to the persons assisted by the\nLaw Project do not specifically require client-identifying information. Moreover, there is no legal\nrequirement that client-identifying information be disclosed to private funding agencies. In the\nabsence of such requirements, we may not infer that this client-identifying information is\nnecessary to be disclosed as a matter of law. Hence, it may remain privileged under the Rules\nof Professional Conduct.\nThis result, we point out, would not be different under the former ethics rules. In Fellerman v.\nBradley, the compliance-with-law exception of Disciplinary Rule 4-101(C)(3), was deemed to\nprohibit disclosure of attorney-client information except in a situation in which the client was\nattempting through non-disclosure to evade an order of a court. We expressed the view that the\npolicies underlying the privilege would not be advanced by allowing the client through his\nattorney to perpetrate a fraud on the court or to thwart justice by consenting to and\nsubsequently ignoring a judgment of the court by refusing to disclose the client\'s address.\nWe acknowledge that if by statute or valid rule or regulation information concerning the identity\nof clients of a legal services organization were clearly required to be reported for legitimate\ngovernmental purposes, the analysis and result could well be different. A different conclusion as\nto the propriety of disclosure might also obtain in the event private funding sources sought client\ninformation under enforceable rules or regulations. It can reasonably be assumed that in such a\ncontext, the welfare and interests of clients would remain a paramount concern and that the\ndisclosure occasioned by such necessary reporting would be attended by suitable protections\nreflecting needs for confidentiality and privacy.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c370\nII.\nWe conclude that client-identifying data with respect to persons receiving legal assistance\nthrough the Law Project constitute matters clearly covered by the Rules of Professional Conduct\nas \xe2\x80\x9cinformation relating to representation.\xe2\x80\x9d Such material is also covered under the attorneyclient privilege and the former Disciplinary Rule as information in the nature of client secrets that\ncould be embarrassing or detrimental to the client if revealed. Under these strictures we are\nsatisfied that it would be improper to reveal such information to either public or private funding\nsources in the absence of valid consent or reasonable rules clearly requiring such disclosure for\nlegitimate purposes.\nAccordingly, we reverse Opinion No. 544.\nQuestions:\n1. Why did the court hold that the Law Project could not produce identifying information?\n2. What is the difference between confidential information and privileged information?\nWhen can an attorney disclose confidential information? When can an attorney disclose\nprivileged information?\n3. When should attorneys address the disclosure of confidential information, if their clients\ncannot provide informed consent?\n\xe2\x80\x9cGenerally Known\xe2\x80\x9d Information\nThe duty of confidentiality prevents attorneys from using information about their current or\nformer clients only if the information is \xe2\x80\x9cconfidential.\xe2\x80\x9d Accordingly, the duty of confidentiality does\nnot apply to information that is \xe2\x80\x9cgenerally known.\xe2\x80\x9d Of course, whether information is \xe2\x80\x9cgenerally\nknown\xe2\x80\x9d may be unclear.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 59 (2000): Comment d, Generally\nKnown Information\nThe \xe2\x80\x9cgenerally known\xe2\x80\x9d standard of this Section is the standard of ABA Model Rules of\nProfessional Conduct, Rule 1.9(b), which is not further elaborated upon in its Comment.\nThe ABA Model Code of Professional Responsibility (1969) included in DR 4-101(A) all\ninformation, without regard to its public or private nature, within its definition of\n\xe2\x80\x9cconfidences and secrets.\xe2\x80\x9d ABA Model Rule 1.9(b), on the other hand, excepts from its\nrequirement of confidentiality information that \xe2\x80\x9chas become generally known.\xe2\x80\x9d No similar\nexception is contained, however, in the general-purpose analog to ABA Model Rule\n1.9(b), ABA Model Rule 1.8(b) Commentators have differed over the wisdom of the ABA\nModel Rule approach. Case law is sparse, but extant authority agrees with the position\ntaken in the Section and Comment.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c371\nThe law generally provides that a client communication cannot become public and still\nremain protected by the attorney-client privilege. The general law of agency also permits\na former agent to compete with a former principal so long as the agent employs only\ninformation about the principal that is \xe2\x80\x9ca matter of general knowledge.\xe2\x80\x9d The scant case\nauthority is divided on the question whether the definition of confidential client\ninformation includes publicly available information.\nThe position taken in the Section and Comment\xe2\x80\x94that \xe2\x80\x9cgenerally known\xe2\x80\x9d information is\nnot part of the definition of confidential client information for either present or past\nclients\xe2\x80\x94adheres to ABA Model Rule 1.9(b). The absence of a similarly limiting provision\nin ABA Model Rule 1.8(b), which applies to ongoing representations, is not inconsistent.\nAny such lawyer use would be impermissible on the broad ground that a lawyer may not\nuse even publicly known information to the detriment of a current client, whether to\nfurther a personal interest of the lawyer or to further the interest of another client.\nRevealing client information adversely in a way that is gratuitous or negligent would\nviolate the duty to take all reasonably available steps to advance the client\'s lawful\nobjectives.\nDougherty v. Pepper Hamilton LLP, 133 A. 3d 792 (Pa. Super. Ct. 2016)\nSummary: Pepper Hamilton LLP represented John J. Dougherty in a federal grand jury\ninvestigation, which included a search of his house. The search warrant affidavit was\nfiled under seal, but the FBI later attached it to an unrelated public document by\naccident. When Dougherty ran for public office, the Philadelphia Inquirer published\nseveral articles stating that he had committed crimes. Daugherty filed a defamation\naction against the Inquirer, which hired Pepper Hamilton. When Pepper Hamilton\nthreatened to submit the affidavit and other information, Daugherty filed a motion to\ndisqualify, as well as a malpractice action. The trial court granted the Inquirer\xe2\x80\x99s motion\nfor summary judgment, but the appellate court reversed, holding that the affidavit was\nstill \xe2\x80\x9cconfidential,\xe2\x80\x9d despite being attached to a public document, because it was not\n\xe2\x80\x9cgenerally known.\xe2\x80\x9d\nOPINION BY SHOGAN, J.:\nAppellant, John J. Dougherty, appeals from the order granting summary judgment in favor of\nPepper Hamilton LLP and its attorneys Amy B. Ginensky, Michael E. Baughman, Peter M.\nSmith, and Raphael Cunniff, in this civil action alleging breach of fiduciary duty and breach of\ncontract. For the reasons that follow, we reverse and remand for further proceedings.\nWe summarize the protracted history of this case as follows. On October 30, 2003, Appellant\nretained Pepper Hamilton to represent him in relation to a federal matter involving a grand jury\nsubpoena he received. Although Appellant was not the target of the grand jury investigation, an\nFBI Affidavit was filed to secure a search of Appellant\xe2\x80\x99s residence. Appellant has alleged that he\nprovided Pepper Hamilton unfettered access to documents during the firm\'s representation of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c372\nAppellant. Also, counsel from Pepper Hamilton was present during the execution of the search\nwarrant at Appellant\xe2\x80\x99s home in November of 2006.\nInitially, the FBI Affidavit securing the search warrant was under seal, but, somehow, the FBI\nAffidavit inadvertently became attached to a document presented in an unrelated criminal matter\ninvolving an unrelated person named \xe2\x80\x9cDonald Dougherty, Jr.\xe2\x80\x9d According to Appellant, on\nJanuary 30, 2008, the federal government filed a response to Donald Dougherty Jr.\xe2\x80\x99s motion to\nsuppress evidence, which was entered as Document No. 27 on the federal criminal docket for\nthe prosecution of Donald Dougherty, Jr. This filing was allegedly made under \xe2\x80\x9crestricted\nstatus.\xe2\x80\x9d64 Document No. 27 referenced, as Exhibit \xe2\x80\x9cA,\xe2\x80\x9d a copy of an affidavit by an FBI agent in\nsupport of the issuance of a search warrant for Donald Dougherty, Jr.\'s premises. However, the\naffidavit that was attached to Document No. 27 as Exhibit \xe2\x80\x9cA\xe2\x80\x9d was actually the FBI Affidavit in\nsupport of the search of Appellant\'s premises.\nAt least some of the documents in Donald Dougherty Jr.\xe2\x80\x99s case were filed under seal and, thus,\nnot accessible to the public. Subsequently, however, in April of 2008, certain documents in\nDonald Dougherty Jr.\xe2\x80\x99s case were unsealed by Judge Robreno of the United States District\nCourt for the Eastern District of Pennsylvania. More specifically, Judge Robreno\'s April 11, 2008\norder authorized the eastern district Clerk of Court to lift the seal on Documents 31, 32, 48 and\n38. Appellant alleges that Document No. 27 was also, albeit mistakenly, removed from\n\xe2\x80\x9crestrictive status\xe2\x80\x9d around this time.\nWhen Appellant was running for a vacant seat in the Pennsylvania Senate in April of 2008, the\nPhiladelphia Inquirer published several articles about Appellant. The articles implied that\nAppellant had engaged in criminal conduct in the past and was likely to do so again if elected to\nthe Pennsylvania Senate. In March of 2009, Appellant initiated a defamation suit against the\nInquirer in state court. In 2011, Pepper Hamilton assumed representation of the defense for the\nInquirer in the defamation suit filed by Appellant. In 2012, Pepper Hamilton informed the trial\ncourt that the defense of the defamation action would rely on information relating to the federal\ninvestigation in which Pepper Hamilton had previously represented Appellant. In 2013,\nAppellant moved to have Pepper Hamilton removed as defense counsel in his defamation\naction against the Inquirer. The trial court denied the motion to disqualify Pepper Hamilton. On\nappeal this Court reversed the decision of the trial court and remanded the matter for the entry\nof an order barring Pepper Hamilton and its attorneys from representing the Inquirer.\nOn December 10, 2012, while Pepper Hamilton and its attorneys were still representing the\nInquirer, the firm filed a motion for summary judgment in the defamation suit and included in the\nattached exhibits a copy of the FBI Affidavit. On December 12, 2012, the Inquirer then published\na front-page article, which included detailed references to the FBI Affidavit.\n\n64\n\nDocuments filed on the federal court\'s PACER system are publicly available for a fee to those who\nhave registered for and received a PACER account. However, in his memorandum of law in support of his\nresponse to Pepper Hamilton\'s motion for summary judgment, Appellant asserts that a document on\n\xe2\x80\x9crestricted status\xe2\x80\x9d is unavailable to anyone but the court and the parties.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c373\nOn February 11, 2013, Appellant initiated the instant action by filing a complaint against\nAppellees alleging breach of fiduciary duty and breach of contract. Appellant alleged that, in\nrepresenting the Inquirer in the defamation suit, Pepper Hamilton acted against the interests of\nAppellant, its former client. The trial court has summarized the subsequent procedural history of\nthis case as follows:\nAppellees filed Preliminary Objections on April 3, 2013. These Preliminary Objections\nwere overruled by this Court by Order dated June 18, 2013. An Answer was filed by\nAppellees on July 8, 2013. On May 27, 2014, after some discovery was conducted and a\nRevised Case Management Order entered, Appellees filed a Motion for Summary\nJudgment. An Answer in response to the Motion for Summary Judgment was filed by\nAppellant on June 27, 2014. A Reply in Support of the Motion for Summary Judgment\nwas filed by Appellees on July 2, 2014. A Supplemental Memorandum in Support of the\nMotion for Summary Judgment was filed by Appellees on July 25, 2014, and a\nSupplemental Memorandum in Opposition was filed by Appellant on July 29, 2014. By\nOrder dated July 29, 2014, and entered on the docket on July 30, 2014, Summary\nJudgment was granted.\nThis timely appeal followed.\nAppellant presents the following issues for our review:\nA. Whether the Trial Court erred in granting Appellees\xe2\x80\x99 motion for summary judgment on\nthe mistaken basis that, because Pepper\xe2\x80\x99s breach of fiduciary duty was also a violation\nof the Pennsylvania Rules of Professional Conduct, Appellant cannot assert a claim\nagainst Pepper as a matter of law.\nB. Whether the Trial Court erred in holding that Appellees were entitled to summary\njudgment because, although they used information against Appellant that is substantially\nrelated to their former representation of him, that information is publicly available and\nthus cannot form the basis of a disloyalty claim.\nC. Whether the Trial Court prematurely granted Appellees motion for summary judgment\nwhere the parties had exchanged limited written discovery and taken no depositions.\nEach of Appellant\xe2\x80\x99s issues challenges the propriety of the trial court\xe2\x80\x99s determination granting\nsummary judgment.\nA legal malpractice claim based on breach of contract, \xe2\x80\x9cinvolves (1) the existence of a contract,\n(2) a breach of a duty imposed by the contract, and (3) damages.\xe2\x80\x9d With respect to a legal\nmalpractice claim based on breach of contract, this Court has stated the following:\nThe attorney\xe2\x80\x99s liability must be assessed under the terms of the contract. Thus, if the\nattorney agrees to provide her best efforts and fails to do so, an action in assumpsit will\naccrue. An attorney who agrees for a fee to represent a client is by implication agreeing\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c374\nto provide that client with professional services consistent with those expected of the\nprofession at large.\nWith respect to a breach of fiduciary duty claim, \xe2\x80\x9ca confidential relationship and the resulting\nfiduciary duty may attach wherever one occupies toward another such a position of advisor or\ncounsellor as reasonably to inspire confidence that he will act in good faith for the other\'s\ninterest.\xe2\x80\x9d The leading case in Pennsylvania discussing breach of a fiduciary duty by an attorney\nwith regard to a conflict of interest is Maritrans GP Inc. v. Pepper, Hamilton & Scheetz. In\nMaritrans, our Supreme Court upheld the trial court\xe2\x80\x99s issuance of a preliminary injunction\npreventing Pepper Hamilton from representing its former clients\xe2\x80\x99 competitors. The Court found\nthat a cause of action for breach of a fiduciary duty against a law firm was actionable where the\nfirm acquired confidential information during the course of its representation. In discussing\nactionability for breach of a fiduciary duty, our Supreme Court reiterated the following longstanding principles:\nActivity is actionable if it constitutes breach of a duty imposed by statute or by common\nlaw. Our common law imposes on attorneys the status of fiduciaries vis a vis their\nclients; that is, attorneys are bound, at law, to perform their fiduciary duties properly.\nFailure to so perform gives rise to a cause of action. It is \xe2\x80\x9cactionable.\xe2\x80\x9d\nAt common law, an attorney owes a fiduciary duty to his client; such duty demands\nundivided loyalty and prohibits the attorney from engaging in conflicts of interest, and\nbreach of such duty is actionable.\nThe Maritrans Court highlighted that Pepper Hamilton \xe2\x80\x9cwas furnished with substantial\nconfidential commercial information\xe2\x80\x9d and \xe2\x80\x9ccame to know the complete inner-workings of the\ncompany along with Maritrans\xe2\x80\x99 longterm objectives, and competitive strategies.\xe2\x80\x9d As explained by\nthe Court, adherence to a fiduciary duty \xe2\x80\x9censures that clients will feel secure that everything\nthey discuss with counsel will be kept in confidence\xe2\x80\x9d and that Pepper Hamilton \xe2\x80\x9chad a duty to\nadminister properly their responsibilities to respect the confidences of Maritrans.\xe2\x80\x9d It further\nexplained that the rationale behind this policy is to prevent an attorney from taking \xe2\x80\x9cundue\nadvantage of the confidential communications of such client.\xe2\x80\x9d\nIn reaching its determination, the Court in Maritrans emphasized the confidential information\nthat Pepper Hamilton garnered during the course of its representations.\nPennsylvania Rule of Professional Conduct 1.9 further addresses attorney duties to former\nclients and provides, in relevant part, as follows:\n(a) A lawyer who has formerly represented a client in a matter shall not thereafter\nrepresent another person in the same or a substantially related matter in which that\nperson\xe2\x80\x99s interests are materially adverse to the interests of the former client unless the\nformer client gives informed consent.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c375\n(c) A lawyer who has formerly represented a client in a matter or whose present or\nformer firm has formerly represented a client in a matter shall not thereafter:\n(1) use information relating to the representation to the disadvantage of the former client\nexcept as these Rules would permit or require with respect to a client, or when the\ninformation has become generally known; or\n(2) reveal information relating to the representation except as these Rules would permit\nor require with respect to a client.\nThe explanatory comment to Rule 1.9(c) offers the following pertinent insight:\n[8] Paragraph (c) provides that information acquired by the lawyer in the course of\nrepresenting a client may not subsequently be used or revealed by the lawyer to the\ndisadvantage of the client. However, the fact that a lawyer has once served a client does\nnot preclude the lawyer from using generally known information about that client when\nlater representing another client.\nIn addition, section 59 of the Restatement (Third) of the Law Governing Lawyers defines the\nterm \xe2\x80\x9cConfidential Client Information\xe2\x80\x9d as \xe2\x80\x9cConfidential client information consists of information\nrelating to representation of a client, other than information that is generally known.\xe2\x80\x9d Comment b\nto the above definition explains that \xe2\x80\x9cthe definition includes information that becomes known by\nothers, so long as the information does not become generally known.\xe2\x80\x9d Furthermore, comment d\nstates the following:\nd. Generally known information. Confidential client information does not include\ninformation that is generally known. Such information may be employed by a lawyer who\npossesses it in permissibly representing other clients and in other contexts where there\nis a specific justification for doing so. Information might be generally known at the time it\nis conveyed to the lawyer or might become generally known thereafter. At the same\ntime, the fact that information has become known to some others does not deprive it of\nprotection if it has not become generally known in the relevant sector of the public.\nWhether information is generally known depends on all circumstances relevant in\nobtaining the information. Information contained in books or records in public libraries,\npublic-record depositaries such as government offices, or in publicly accessible\nelectronic-data storage is generally known if the particular information is obtainable\nthrough publicly available indexes and similar methods of access. Information is not\ngenerally known when a person interested in knowing the information could obtain it only\nby means of special knowledge or substantial difficulty or expense. Special knowledge\nincludes information about the whereabouts or identity of a person or other source from\nwhich the information can be acquired, if those facts are not themselves generally\nknown.\nA lawyer may not justify adverse use or disclosure of client information simply because\nthe information has become known to third persons, if it is not otherwise generally\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c376\nknown. Moreover, if a current client specifically requests that information of any kind not\nbe used or disclosed in ways otherwise permissible, the lawyer must either honor that\nrequest or withdraw from the representation.\nWe further observe that there is no Pennsylvania case law directly on point. However, as the\nSupreme Court of Ohio aptly stated in Akron Bar Association v. Holder, \xe2\x80\x9cAn attorney is not free\nto disclose embarrassing or harmful features of a client\xe2\x80\x99s life just because they are documented\nin public records or the attorney learned of them in some other way.\xe2\x80\x9d Likewise, in Lawyer\nDisciplinary Board v. McGraw, the Supreme Court of West Virginia observed that \xe2\x80\x9cthe ethical\nduty of confidentiality is not nullified by the fact that the information is part of a public record or\nby the fact that someone else is privy to it.\xe2\x80\x9d\nHere, the trial court concluded that because the FBI Affidavit was inadvertently appended to a\ndocument in an unrelated criminal matter, the information contained therein was public.\nSpecifically, the trial court stated that \xe2\x80\x9cthe fact that the FBI Affidavit in question was publicly\navailable for many years precludes a determination that the receipt of the improperly filed FBI\nAffidavit through a breach by Appellees of the attorney-client relationship and duty of fidelity is\nactionable.\xe2\x80\x9d\nOur review of the record, in the light most favorable to Appellant as the non-moving party,\nreflects that the trial court erred in granting summary judgment in this case. Indeed, this case\npresents genuine issues of fact. The record reveals that the FBI Affidavit in question became\npart of another criminal matter through inadvertence. Even accepting that the FBI Affidavit was\npublicly available through PACER prior to December 10, 2012, we are left to ponder whether\nthe FBI Affidavit was actually \xe2\x80\x9cgenerally known.\xe2\x80\x9d All that is acknowledged at this point in the\nproceedings is that the FBI Affidavit was inadvertently appended to a document in a case that\ndid not involve Appellant as a party. Therefore, it appears that such document was not \xe2\x80\x9cindexed\xe2\x80\x9d\nunder Appellant\'s name and that a person interested in the FBI Affidavit \xe2\x80\x9ccould obtain it only by\nmeans of special knowledge.\xe2\x80\x9d Furthermore, it is unknown exactly how and when the FBI\nAffidavit came into the possession of the Inquirer and eventually became the subject of an\narticle in the Inquirer during Pepper Hamilton\xe2\x80\x99s representation of the Inquirer. Whether Pepper\nHamilton committed a breach of its duties to Appellant depends on the answers to these\nquestions. Thus, these questions are sufficient to establish genuine issues of material fact\nregarding Pepper Hamilton\'s conduct. Contrary to the trial court\xe2\x80\x99s conclusion, in the event that\nthe FBI Affidavit was not generally known information, it appears that Pepper Hamilton\nbreached its duty to Appellant as a former client and such breach was actionable. Accordingly,\nwe reverse the order granting summary judgment.\nQuestions:\n1. Why did the court hold that the information about Daugherty was protected by the duty of\nconfidentiality, even though it was publicly available?\n2. How well-known does information have to be before it becomes \xe2\x80\x9cgenerally known\xe2\x80\x9d? Why\ndidn\xe2\x80\x99t the Inquirer\xe2\x80\x99s articles make the information at issue \xe2\x80\x9cgenerally known\xe2\x80\x9d?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c377\n\nMatter of Tennant, 392 P. 3d 143 (Mont. 2017)\nSummary: Attorney David G. Tennant was the subject of a disciplinary complaint based\non his representation of Richard and Debbie Harshman. When the Harshmans did not\npay Tennant\xe2\x80\x99s bill, he filed an attorney\xe2\x80\x99s lien on their property and purchased it at the\nSheriff\xe2\x80\x99s sale. The Harshmans filed a complaint against Tennant with the Office of\nDisciplinary Counsel, claiming that Tennant improperly used confidential client\ninformation to their detriment. The Commission on Practice found no violation of the duty\nof confidentiality, but the Montana Supreme Court reversed, because the information\nwas not \xe2\x80\x9cgenerally known.\xe2\x80\x9d\nJustice Beth Baker delivered the Opinion and Order of the Court.\nThese consolidated proceedings include two formal disciplinary complaints filed against\nMontana attorney David G. Tennant. The complaints, which arise from Tennant\xe2\x80\x99s debt collection\npractices against clients and former clients, will be referenced in this Opinion and Order as the\nRay complaint and the Harshman complaint.\nBACKGROUND\nTennant represented Richard and Debbie Harshman in an action for eviction of tenants from,\nand possession of, real property in Hungry Horse, Montana. The Harshmans obtained a default\njudgment against their tenants for damages to the property, including attorney fees of\n$3,063.54. When he was unable to collect the attorney fees through execution on the tenants\nand the Harshmans did not pay their bill to Tennant\xe2\x80\x99s firm, Tennant filed an attorney\xe2\x80\x99s lien on\nthe property. He later filed a complaint against the Harshmans alleging breach of contract,\naccount stated, and foreclosure of the attorney\'s lien, in which action he was granted a default\njudgment of $8,148.68. Tennant assigned the judgment to a collection agency, which obtained a\nwrit of execution on the Harshmans\xe2\x80\x99 property. A sheriff\'s sale was held, at which the collection\nagency was the successful bidder. The Harshmans later redeemed their property.\nBoth Ray and the Harshmans filed complaints against Tennant with the Office of Disciplinary\nCounsel, and ODC filed formal disciplinary complaints in both matters. On August 31, 2016,\nTennant filed conditional admissions and an affidavit of consent to discipline in these\nconsolidated proceedings, pursuant to Rule 26, Montana Rules for Lawyer Disciplinary\nEnforcement. ODC objected to Tennant\xe2\x80\x99s conditional admissions. On October 20, 2016, the\nCommission on Practice held a hearing on the complaints and to consider Tennant\xe2\x80\x99s conditional\nadmissions. Tennant was present with counsel and testified on his own behalf.\nOn January 5, 2017, the Commission submitted to this Court its Findings of Fact, Conclusions\nof Law, and Recommendation for Discipline. The Commission rejected Tennant\xe2\x80\x99s conditional\nadmissions. The Commission concluded that ODC failed to carry its burden of proving by clear\nand convincing evidence any MRPC violations alleged in the Harshman complaint.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c378\n\nThe Commission recommends that, as a result of his violations of the Montana Rules of\nProfessional Conduct, Tennant be disciplined by public censure by this Court. The Commission\nrecommends that, in the future, Tennant be required to provide to clients and former clients\ncopies of any attorney\'s liens he or his firm files against them. In addition, the Commission\nrecommends that, for a period of three years, Tennant be required to provide to ODC copies of\nany attorney\'s liens filed by him or his firm, copies of all complaints filed by him or his firm and\nserved against former clients for unpaid fees, and copies of judgments or assignments of\njudgments obtained by him or his firm against former clients.\nODC has filed written objections to the Commission\'s findings, conclusions, and\nrecommendation, and Tennant has filed a response.\nDISCUSSION\nODC argues that the Commission erred in concluding that it failed to prove violation of Rule 1.9,\nMRPC, in relation to the Harshmans. Rule 1.9(c) provides:\nA lawyer who has formerly represented a client in a matter or whose present or former\nfirm has formerly represented a client in a matter shall not thereafter:\n(1) use information relating to the representation to the disadvantage of the former client\nexcept as these Rules would permit or require with respect to a client, or when the\ninformation has become generally known.\nODC alleged Tennant violated this Rule when he bid on the Harshmans\xe2\x80\x99 Hungry Horse property\nat the sheriff\xe2\x80\x99s sale, because Tennant\'s knowledge of the property derived from his\nrepresentation of the Harshmans. The Commission determined that because Tennant could\nhave found out that the Harshmans owned property in Hungry Horse via public record and then\nforeclosed his fee lien and bid at the sheriff\xe2\x80\x99s sale, no violation of Rule 1.9 occurred.\nAs ODC emphasizes, Rule 1.9\xe2\x80\x99s language requires that, in order for the attorney to be free from\nthe prohibition against using representation-related information to the disadvantage of a former\nclient, the information at issue must be \xe2\x80\x9cgenerally known.\xe2\x80\x9d\nWhether information is generally known depends on all circumstances relevant in\nobtaining the information. Information contained in books or records in public libraries,\npublic-record depositories such as government offices, or in publicly accessible\nelectronic-data storage is generally known if the particular information is obtainable\nthrough publicly available indexes and similar methods of access. Information is not\ngenerally known when a person interested in knowing the information could obtain it only\nby means of special knowledge or substantial difficulty or expense.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c379\nA lawyer may not justify adverse use or disclosure of client information simply because\nthe information has become known to third persons, if it is not otherwise generally\nknown.\nSome courts have applied a strict definition of \xe2\x80\x9cgenerally known\xe2\x80\x9d in the context of a Rule 1.9\nanalysis. That the information at issue is generally available does not suffice; the information\nmust be within the basic understanding and knowledge of the public. \xe2\x80\x9cThe client\'s privilege in\nconfidential information disclosed to his attorney is not nullified by the fact that the\ncircumstances to be disclosed are part of a public record, or that there are other available\nsources for such information, or by the fact that the lawyer received the same information from\nother sources.\xe2\x80\x9d\nIn this case, although it would have been possible for Tennant to discover the existence of the\nHarshmans\xe2\x80\x99 property through searches of public records, he undisputedly learned of the\nproperty as part of his representation of the Harshmans. Tennant used that information to the\nHarshmans\xe2\x80\x99 disadvantage. We will not interpret the \xe2\x80\x9cgenerally known\xe2\x80\x9d provision of Rule 1.9(c) to\nallow Tennant to take advantage of his former clients by retroactively relying on public records\nof their information for self-dealing. The Commission erred in concluding that Tennant did not\nviolate Rule 1.9, MRPC.\nODC further claims that, absent the Harshmans\xe2\x80\x99 redemption of their property, Tennant would\nhave exceeded his fee claim and lien by receiving a windfall from the sheriff\'s sale of upwards of\n$80,000 \xe2\x80\x94 his former clients\xe2\x80\x99 equity in their property. ODC submits that this is a clear violation\nof Rule 1.9(c), MRPC. However, the Harshmans did redeem their property, and ODC\'s\nassumptions do not satisfy its burden of proof.\nSanctions\nFinally, ODC argues that the Commission\'s recommended sanctions are inadequate given\nTennant\xe2\x80\x99s unethical conduct and will not deter the same type of conduct by other Montana\nattorneys. ODC had recommended that Tennant be suspended from the practice of law for at\nleast seven months and that he be required to retake and pass the Multistate Professional\nResponsibility Exam.\nWe have concluded that ODC established one ethical violation in addition to those recognized\nby the Commission. However, that violation ultimately did not harm Tennant\'s clients \xe2\x80\x94 the\nHarshmans redeemed their property. Further, the additional violation does not undermine the\nCommission\xe2\x80\x99s overall conclusions on the evidence presented, and on this record we are not\ninclined to deviate from the discipline recommended by the Commission.\nQuestions:\n1. A Sheriff\xe2\x80\x99s sale is a public event. Why did the court hold that the duty of confidentiality\nprotected this information about the Harshmans?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c380\n2. What would have happened if someone other than Tennant had purchased the\nHarshmans\xe2\x80\x99 property?\nStanley A. Kaplan, The Case of the Unwanted Will, 65 ABA J. 484 (1979)\nJohn Smith and his wife Mary go to a lawyer who has handled some minor legal matters for\nJohn to make their wills prior to going on a trip abroad.\nJohn tells his lawyer what disposition he and his wife desire to make of their estates, and the\nlawyer prepares separate wills for them to sign prior to their departure. After John has signed\nhis will, the lawyer suggests to John that he would like to be alone with Mary before she signs.\nJohn withdraws to another office. The lawyer asks Mary if the will is as she would have made it\nhad her husband not been present at the conference and if the will were to be secret from her\nhusband.\nShe says no, that the will as drawn contains several provisions that are contrary to her wishes,\nand that she would change if her husband were not to know the ultimate disposition of her\nestate. However, she says that she would not be willing to precipitate the domestic discord and\nconfrontation that would occur if her husband were to learn that she had drawn a will contrary to\nhis wishes and in accordance with her own desires.\nMary asks the lawyer if he will write one page of her will to provide that certain persons\nbenefiting by her will as drawn will be replaced by certain other persons. The lawyer states that\nunder the circumstances he does not think that he can in fairness represent her in making these\nchanges but suggests that she go ahead and sign this will and then, as soon as possible, go to\nsome other lawyer and have her will rewritten in accordance with her true wishes.\nThe departure time for the trip comes on Mary before she is able to make arrangements to have\nher will rewritten. John and Mary are involved in an airplane accident and both are killed while\non the trip. Their son, Tom, who is named as executor in each of their wills, comes to the lawyer\nwho drew the wills and asks him to represent him as executor in connection with probating the\nwills and distributing the estate.\nWhat are the ethical problems the lawyer faces in connection with probate and distribution in\naccordance with the wills as drawn? Did the lawyer have any obligation to speak to Mary\nseparately, as he did, about her will? When the lawyer learned from Mary that she had other\nwishes that were being suppressed, what were his obligations? What, if anything, should the\nlawyer have done and, did not do after learning Mary\'s true wishes? Do Mary\'s true but\nunfulfilled wishes concerning the revision of her will have any legal effect? Does the lawyer have\nany right or obligation to disclose what Mary told him about her testamentary desires?\nComments from George W. Overton\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c381\nThe first question to be asked in all problems involving professional responsibility or ethics is\n\xe2\x80\x9cWho is the client?\xe2\x80\x9d Not \xe2\x80\x9cWho brought Mary to my office?\xe2\x80\x9d Not even \xe2\x80\x9cWho is paying my bill?"\nAnd emphatically not \xe2\x80\x9cWhose anger will cost me the most business?\xe2\x80\x9d In facts given, John\nprobably presumes that the lawyer is his and that he is the lawyer\xe2\x80\x99s client, and that\'s all that\nneed be said. The lawyer probably accepted this notion without clarification.\nThe problem is that in the drafting of Mary\xe2\x80\x99s will Mary is the client, no matter who pays the bill\nand no matter what chain of events brought Mary to the lawyer\'s office. The first issue that has\nto be disposed of is: Can the lawyer continue to serve Mary in the preparation of any will other\nthan the one first drafted? Can he do so without John\xe2\x80\x99s knowledge? I suggest that he cannot.\nThe lawyer must explain to Mary her three alternatives:\n1. To execute the will, and she and the lawyer remain silent unless questioned.\nPresumably this won\'t work, because the lawyer, if questioned by John, cannot lie to\nhim, although I do not believe the lawyer has a duty to volunteer any information. It is\nenough that he says, in response to a question, either \xe2\x80\x9cJohn, I cannot answer your\nquestion\xe2\x80\x9d or \xe2\x80\x9cMary did not execute the will I drafted" and the lawyer should refuse to\nanswer further questions.\n2. To execute the will as drafted, hoping to replace it soon. In this case he must explain to\nMary that it is unquestionably her will, until revoked, and that even if all their\nconversation were reproduced in court, it would not affect the validity of the will, since it\ncould easily be proved that she had testamentary capacity, and contemporaneous\ninconsistent statements are admissable only as to capacity.\n3. To have a new will drawn (or a new insertion) but let the lawyer tell John: \xe2\x80\x9cMary changed\nher will.\xe2\x80\x9d The lawyer need not say more to John.\nIf, as we presuppose in 2, the lawyer explains to Mary her alternatives and the conclusiveness\nof the execution of the will, he is out of trouble at the time of execution.\nHowever, he should reflect, for the future, on how to avoid this awkward box. First of all, the\ncustom of separating spouses at execution of wills, although not uncommon, is an anachronism,\nbased on the notion that one spouse, presumably the husband, could coerce the other into an\nunintended result? or someone could so claim. The time to elicit separate responses is at the\nfirst meeting or immediately there after. Probably a letter, following the first meeting, could state\nsomething like the following:\n\xe2\x80\x9cI will proceed as instructed to draft both your wills, on the assumption that each of you has\ngiven me your wishes. If there is anything on this subject that either of you wishes to discuss\nthis subject with me separately, please let me know and I will then decide if I can go further.\xe2\x80\x9d\nAs stated above, in preparing Mary\xe2\x80\x99s will the lawyer can only be Mary\xe2\x80\x99s lawyer, but has he made\nthis clear to John? Has he been guilty of any implied communication to John inducing John to\nexecute a will based on John\xe2\x80\x99s presuppositions of Mary\xe2\x80\x99s will that is misleading or false? In the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c382\ntechnical sense, he has not. If John wanted his will to be conditioned on certain dispositions by\nMary, legal mechanisms existed (conditional bequests, or mutual wills, or a joint will) to\neffectuate those purposes. But the lawyer has undoubtedly not outlined these alternatives.\nOn the other hand, it should not be said that there is an inherent conflict of interest in\nrepresenting both husband and wife in estate planning. Obviously, most couples would be\nappalled at the notion of having to pay two lawyers\xe2\x80\x99 fees for this service. What is necessary is\nthat the lawyer identify the possibility of disagreements at the earliest possible stage.\nAfter Mary\'s death the lawyer\xe2\x80\x99s responsibility is to file the will and assist, as necessary, in its\nprobate. For the reasons stated, Mary\xe2\x80\x99s inconsistent comments made at the time of execution\nare relevant only to the issue of capacity, and I do not see that the lawyer has a duty to anyone\nto raise that issue if he has no doubts on that score.\nThe intricate ramifications of the ethical problem emerge, however, if the question of capacity is\nraised. Let us suppose that her will excluded some heir by intestacy who attacks the will on this\nground. Probably in this event the lawyer should inform Tom of the facts, and Tom can decide\nas the personal representative of Mary whether to attempt to assert privilege as to the testimony\ninvolved. He is not likely to succeed in that endeavor. I cannot see that the lawyer has any duty\nto Mary\xe2\x80\x99s heirs at law to volunteer any information.\nComments from John C. Williams\nThe problems the lawyer faces concerning John and Mary and their wills are essentially\nproblems involving the interests of multiple clients. The special problems are these:\n1. How do the general principles of multiple representation apply to estate planning work\nfor a married couple?\n2. When a lawyer represents two clients on a common project, what are his responsibilities\nin preserving the confidences of one client from the other?\n3. When a lawyer who represents two clients learns that their interests are in fact\nconflicting, what does the lawyer do about it, particularly in a case in which the conflict is\nknown to one of the clients but not the other?\nSurprisingly, neither the Code of Professional Responsibility nor published opinions of the\nAmerican Bar Association Committee on Ethics and Professional Responsibility nor Drinker\noffers much guidance, yet the second two questions presumably arise frequently in the practice\nof, say, a lawyer who represents codefendants in criminal cases or coplaintiffs in personal injury\ncases.\nWho is the client? That\xe2\x80\x99s the first question. There may be lawyers who suppose that the\nhusband and wife have such a community of interest or that the wife is so subservient to her\nhusband that they are, collectively, one client. Mr. Bumble would advise that if the lawyer\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c383\nsupposes that, the lawyer is \xe2\x80\x9ca ass - a idiot\xe2\x80\x9d and probably a bachelor. Clearly, both must be\nconsidered clients.\nAs was suggested in the first \xe2\x80\x9cLegal Ethics Forum,\xe2\x80\x9d there are many good, perhaps compelling,\nreasons to avoid bringing multiple lawyers into an amicable situation. Expense may be a\nprohibitive factor, and one must consider the risk that multiple lawyers will create problems\nwhere none existed. These considerations are important enough when the clients are two\nbusiness partners. They are even more important when the clients are a happily married\nhusband and wife whose interest in the continuity and development of their marital relationship\nmay be more important than the outcome of a particularly legal negotiation.\nMost married couples probably never consider consulting separate lawyers for the preparation\nof their wills. They assume that their mutual interests will be served by working co-operatively\ntoward a co-ordinated estate plan and by confiding in one another in seeking to understand and\nreconcile what differences may exist between them.\nThis assumption is so prevalent, on behalf of both clients and lawyers, that in most cases the\n\xe2\x80\x9cmultiple representation\xe2\x80\x9d problem is never discussed. Ethical Consideration 5-16 requires that\nbefore a lawyer may represent multiple clients, he should explain fully to each client the\nimplications of the common representation and should accept or continue employment only if\nthe clients consent. I believe this is rarely done when the clients are husband and wife who\nretain a lawyer for the preparation of wills. In my judgment it is unnecessary for a lawyer\nformally to seek an express consent to multiple representation when the clients are a married\ncouple who want wills drawn, unless the lawyer knows of special circumstances that lead to the\nbelief that there is a substantial conflict of interests. An informed consent may properly be\ninferred from the circumstances.\nProblems such as those presented by this case might have been avoided, however, if at the\ninitial interview with John and Mary the lawyer had probed for possible conflicts. This is\nespecially important in cases in which the likelihood is great that the interests of the husband\nand wife may be conflicting, such as in a marriage that is in the process of disintegration, in a\nsecond marriage in which there are children by the spouses\xe2\x80\x99 prior marriages, or in other cases\nin which the natural objects of the bounty of the husband and wife are not identical.\nFinally, one should recognize that women are taking an increasingly active voice in the conduct\nof their personal business. A \xe2\x80\x9cliberated woman\xe2\x80\x9d may feel that sharing a lawyer with her husband\nenhances neither her personal dignity nor the marital relationship. She may prefer independent\nrepresentation and be prepared to pay for it.\nConfidentiality with multiple clients. Disciplinary Rule 4-101 directs that a lawyer shall not\nknowingly reveal a confidence or secret of a client during or after the termination of the\nprofessional relationship. In a multiple representation case the difficulty is determining what\nconstitutes a client\xe2\x80\x99s \xe2\x80\x9cconfidence.\xe2\x80\x9d When John, Mary, and the lawyer meet together face to face,\nwhat Mary tells the lawyer is not a confidence, so far as John is concerned. But what if Mary\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c384\nmeets privately with the lawyer, or telephones or writes him? There is an implied understanding,\nwhen two or more clients retain a lawyer for work on a common project, that the lawyer is free to\ndisclose to all of his clients his communications with each of them.\nIt was a mistake for the lawyer to ask to meet privately with Mary before she signed her will. By\ndoing so, he invited Mary to speak \xe2\x80\x9cconfidentially\xe2\x80\x9d with him and opened the door to the dilemma\nthat confronted him when Mary told him that she was dissatisfied with her will.\nIf, after the lawyer met with John and Mary jointly, he had no reason to be concerned as to lack\nof testamentary capacity on Mary\xe2\x80\x99s part or undue influence or duress by John, the private\nmeeting with Mary was a mistake. If he had these concerns, he should have resolved them by\nwithdrawing from employment.\nThe execution of Mary\xe2\x80\x99s will. The lawyer was correct in refusing to cooperate with Mary in\nmaking a secret change in her will. As E.C. 5-14 states, \xe2\x80\x9cmaintaining the independence of\nprofessional judgment required of a lawyer precludes his acceptance or continuation of\nemployment that will adversely affect his judgment on behalf of or dilute his loyalty to a client.\nThis problem arises whenever a lawyer is asked to represent two or more clients who may have\ndiffering interests.\xe2\x80\x9d\nThough a husband and wife do not agree completely on the provisions of their wills, a lawyer\nmay prepare wills for both, but only if there is an informed consent. That prerequisite is missing\nhere. The consent given by implication at the initial meeting was vitiated when Mary sought to\nmake a change of which John was not informed.\nThe root of the conflict is Mary\xe2\x80\x99s problem. She doesn\xe2\x80\x99t like the will that was discussed in her\nhusband\xe2\x80\x99s presence, but she doesn\xe2\x80\x99t want to disclose to him her dissatisfaction with it. This\ndilemma is Mary\xe2\x80\x99s and she should decide what to do about it. The lawyer, by meeting privately\nwith Mary, has permitted her to transfer the problem to him.\nI agree that the lawyer should have presented alternatives to Mary and required her to make the\nchoice. I disagree that it would be proper for the lawyer to draw a revised will for Mary on the\ncondition that he be permitted to tell John simply that \xe2\x80\x9cMary changed her will.\xe2\x80\x9d This is not the full\ndisclosure that the canons require.\nValidity of Mary\xe2\x80\x99s will. Mary\xe2\x80\x99s will is valid as signed. She understood the provisions of the will\nand the significance of signing it. To my knowledge, there is no authority for refusing to probate\nor for reforming a will on the basis of statements made by the testator at the time of signing that\nhe or she was not entirely satisfied with its provisions.\nMost lawyers with extensive experience in writing wills have clients who never sign a will without\nprotesting that it is not final - perhaps they feel that acceptance of the will somehow involves an\nacceptance of death. The courts properly attach no significance to these statements. There is\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c385\nno evidence that Mary did not understand what she was doing or of lack of capacity, undue\ninfluence, or duress. The will should be probated as written.\nThe lawyer\xe2\x80\x99s dilemma. After Mary advised the lawyer that she was dissatisfied with the will and\nintended to change it, did the lawyer have further responsibilities? In the circumstances it is\nclear that Mary considered her statements to the lawyer confidential, and the lawyer led her to\nbelieve that they would be so treated. If the lawyer discloses to John what Mary has told him\nabout her intentions, he is revealing a client\xe2\x80\x99s confidence.\nOn the other hand, if by silence the lawyer permits John to leave the office with the false\nimpression that Mary has signed the will she discussed in John\xe2\x80\x99s presence, the lawyer may be\nseen to have conspired with Mary to defraud John. By doing this, the lawyer has permitted\nMary\xe2\x80\x99s desires to dilute his loyalty to John.\nThere is no easy way out for the lawyer. D.R. 5-105 requires that a lawyer shall not continue\nemployment if it would be likely to involve him in representing differing interests, unless it is\nobvious that he can adequately represent the interest of each and if each consents, after full\ndisclosure. It is strange that the authorities offer little guidance as to what the lawyer must do\nwhen multiple representation is no longer proper. There is some authority for the proposition\nthat the lawyer may continue to represent the client with the most seniority. The better view\nwould seem to be that when the interests of clients diverge and become antagonistic, their\nlawyer must be absolutely impartial, which, unless they both or all desire him to represent them\nboth or all, usually means that he may represent none.\nIn most cases the conflict between clients will have become apparent to everyone. Here John\ndoes not know that the conflict exists. The lawyer may not disclose Mary\xe2\x80\x99s confidences to John,\nbut he must disclose to both John and Mary that they have differing interests and that he may\nno longer represent either of them in connection with their estate planning. This will alert John to\nthe fact that something is amiss, with out directly breaching Mary\xe2\x80\x99s confidence. This, in my\njudgment, is the least bad solution.\nPostdeath disclosure. Mary\xe2\x80\x99s statements to the lawyer about her dissatisfaction with the will\nwere confidences not to be disclosed during her lifetime. It is well established, however, that\nafter the testator\'s death the attorney is at liberty to disclose all that affects the execution and\ntenor of a will. If the lawyer were subpoenaed, he would be obliged to testify concerning these\nmatters, but Mary\xe2\x80\x99s statements about her will would not be material in any suit to challenge\nit. Thus, even though the privilege expires on her death, the lawyer should not be required to\ntestify.\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nThomas Shaffer, The Legal Ethics of Radical Individualism, 65 Tex. L. Rev. 963 (1987)\nTeresa Stanton Collett, The Ethics of Intergenerational Representation, 62 Fordham L.\nRev. 1453 (1994)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c386\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nAlysa Christmas Rollock, Professional Responsibility and Organization of the Family\nBusiness: The Lawyer as Intermediary, 73 Ind. L.J. 567 (1998)\nRussell G. Pearce, Family Values and Legal Ethics: Competing Approaches to Conflicts\nin Representing Spouses , 62 Fordham L. Rev. 1253 (1994)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c387\n5.2: Exceptions to the Duty of Confidentiality\nTell me at least six things you may or may not consider personal. I\xe2\x80\x99m not talking about jet ski\naccidents, rather truly things you\xe2\x80\x99d never thought you\xe2\x80\x99d tell.65\nThis very secret you\xe2\x80\x99re trying to conceal, is the very same one you\xe2\x80\x99re dying to reveal.66\n1. Exceptions to the Professional Duty of Confidentiality\nThere are many state variations in the scope of the duty of confidentiality. As a result, a\npracticing lawyer should be particularly attentive to local law. The lawyer should be\nattentive to the distinction between a permission to disclose and a requirement to\ndisclose. This distinction is indicated by the use of \xe2\x80\x9cmay\xe2\x80\x9d or \xe2\x80\x9cshall\xe2\x80\x9d in the language.\nRemember that the ethical duty of confidentiality covers a broader range of information\nthan the privilege. The ethical duty also covers the use of information to the\ndisadvantage of a client, a prospective client, or a former client.\nThe third-party doctrine (the presence of a nonprivileged third person) does not\nnecessarily destroy an attorney\xe2\x80\x99s duty of confidentiality. Confidential information remains\nconfidential even if it is known to others, unless the information becomes generally\nknown.\nThere are eight exceptions to the Duty of Confidentiality: client\xe2\x80\x99s consent, dispute\nconcerning attorney\xe2\x80\x99s conduct, disclosure to obtain legal ethics advice, disclosure\nrequired by law or court order, disclosure to prevent death or substantial bodily harm,\ndisclosure to prevent or mitigate substantial financial harm, and disclosure to detect and\nresolve conflicts of interest.\na. Client\xe2\x80\x99s Informed Consent\nModel Rule 1.6 implicitly says that an attorney may reveal or use confidential information\nif the client gives informed consent. \xe2\x80\x9cInformed consent\xe2\x80\x9d means that the client agrees to a\nproposed course of action after the lawyer has adequately explained the risks and\nreasonable alternatives.\nModel Rule 1.6(a)\nModel Rule 1.0(e)\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 62 (2000): Using or Disclosing\nInformation with Client Consent\n\n65\n66\n\nThe Blow, Jet Ski Accidents.\nRonald Eldon Sexsmith, Secret Heart, Ron Sexsmith (1995).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c388\n\nA lawyer may use or disclose confidential client information when the client consents\nafter being adequately informed concerning the use or disclosure.\nb. Implied Authority\nAn attorney has implied authority from the client to use or disclose confidential\ninformation when appropriate to carry out the representation, unless the client gives\nspecific instructions to the contrary.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 61 (2000): Using or Disclosing\nInformation to Advance Client Interests\nA lawyer may use or disclose confidential client information when the lawyer reasonably\nbelieves that doing so will advance the interests of the client in the representation.\nc. Dispute Concerning Attorney\xe2\x80\x99s Conduct\nAn attorney may reveal a client\xe2\x80\x99s confidential information to the extent necessary to\nprotect the attorney\xe2\x80\x99s interests in a dispute that involves the conduct of the attorney. An\nattorney wishing to use this exception should reveal only what is necessary, attempt to\nlimit the disclosure to those who need to know it, and obtain protective orders or take\nother steps to minimize the risk of unnecessary harm to the client.\nd. Disclosure to Obtain Legal Ethics Advice\nA lawyer may disclose enough of the client\xe2\x80\x99s confidential information as is necessary to\nobtain legal ethics advice for the lawyer.\ne. Disclosure Required by Law or Court Order\nABA Model Rule 1.6(b)(6) permits a lawyer to reveal her client\xe2\x80\x99s confidential information\nto the extent that she is required to do so by law or court order.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 63 (2000): Using or Disclosing\nInformation When Required by Law\nA lawyer may use or disclose confidential client information when required by law, after\nthe lawyer takes reasonably appropriate steps to assert that the information is privileged\nor otherwise protected against disclosure.\nf. Disclosure to Prevent Death or Substantial Bodily Harm\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c389\nABA Model Rule 1.6(b)(1) permits a lawyer to reveal the client\xe2\x80\x99s confidential information\nto the extent that the lawyer reasonably believes necessary to prevent reasonably\ncertain death or substantial bodily harm. This exception applies to death or bodily harm\nwhatever the cause; it does not need to be caused by the client, and the cause need not\nbe a criminal act. It also does not need to be imminent, just reasonably certain.\nThe exception also gives the lawyer discretion to disclose the confidential information-- it\ndoes not require disclosure. Some states may require disclosure if they have not\naccepted the Model Rules.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 66 (2000): Using or Disclosing\nInformation to Prevent Death or Serious Bodily Harm\n(1) A lawyer may use or disclose confidential client information when the lawyer\nreasonably believes that its use or disclosure is necessary to prevent reasonably certain\ndeath or serious bodily harm to a person.\n(2) Before using or disclosing information under this Section, the lawyer must, if feasible,\nmake a good-faith effort to persuade the client not to act. If the client or another person\nhas already acted, the lawyer must, if feasible, advise the client to warn the victim or to\ntake other action to prevent the harm and advise the client of the lawyer\'s ability to use\nor disclose information as provided in this Section and the consequences thereof.\n(3) A lawyer who takes action or decides not to take action permitted under this Section\nis not, solely by reason of such action or inaction, subject to professional discipline,\nliable for damages to the lawyer\'s client or any third person, or barred from recovery\nagainst a client or third person.\ng. Disclosure to Prevent or Mitigate Substantial Financial Harm\nThe Model Rules permit a lawyer to reveal the client\xe2\x80\x99s confidential information to the\nextent necessary to prevent the client from committing a crime or fraud that is\nreasonably certain to result in substantial financial harm to someone if the client is using\nor has used the lawyer\xe2\x80\x99s services in the matter. The exception also applies if the client\nhas already acted, and the lawyer\xe2\x80\x99s disclosure can prevent or mitigate the consequent\nfinancial harm.\n\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 67 (2000): Using or Disclosing\nInformation to Prevent, Rectify, or Mitigate Substantial Financial Loss\n(1) A lawyer may use or disclose confidential client information when the lawyer reasonably\nbelieves that its use or disclosure is necessary to prevent a crime or fraud, and:\n(a) the crime or fraud threatens substantial financial loss;\n(b) the loss has not yet occurred;\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c390\n(c) the lawyer\'s client intends to commit the crime or fraud either personally or through a third\nperson; and\n(d) the client has employed or is employing the lawyer\'s services in the matter in which the\ncrime or fraud is committed.\n(2) If a crime or fraud described in Subsection (1) has already occurred, a lawyer may use or\ndisclose confidential client information when the lawyer reasonably believes its use or disclosure\nis necessary to prevent, rectify, or mitigate the loss.\n(3) Before using or disclosing information under this Section, the lawyer must, if feasible, make\na good-faith effort to persuade the client not to act. If the client or another person has already\nacted, the lawyer must, if feasible, advise the client to warn the victim or to take other action to\nprevent, rectify, or mitigate the loss. The lawyer must, if feasible, also advise the client of the\nlawyer\'s ability to use or disclose information as provided in this Section and the consequences\nthereof.\n(4) A lawyer who takes action or decides not to take action permitted under this Section is not,\nsolely by reason of such action or inaction, subject to professional discipline, liable for damages\nto the lawyer\'s client or any third person, or barred from recovery against a client or third\nperson.\nh. Disclosure to Detect and Resolve Conflicts of Interest\nLawyers may disclose limited client information, such as client names and a summary of\ngeneral issues, when a lawyer changes firms, when two firms merge, or when a law\npractice is being purchased. This is allowed in order to detect and resolve conflicts of\ninterest. This exception is subject to four conditions:\n1. The disclosure may be made only after substantive discussions regarding the\nnew relationship have occurred\n2. The disclosure must be limited to the minimum necessary to detect any conflicts\nof interest\n3. The disclosed information must not compromise the attorney-client privilege or\notherwise prejudice the clients; and\n4. The disclosed information may be used only to the extent necessary to detect\nand resolve any conflicts of interest\ni. Protecting Confidential Information\nA lawyer must make reasonable efforts to protect a client\xe2\x80\x99s confidential information from\ninadvertent or unauthorized disclosure by the lawyer and those under the lawyer\xe2\x80\x99s\nsupervision, and from unauthorized access by third parties. The reasonableness of the\nlawyer\xe2\x80\x99s efforts is determined by considering such factors as the sensitivity of the client\xe2\x80\x99s\ninformation, the cost of additional safeguards, and the difficulty of implementing the\nsafeguards.\nModel Rule of Professional Conduct 1.6: Confidentiality of Information, Comment [3]\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c391\nThe principle of client-lawyer confidentiality is given effect by related bodies of law: the attorneyclient privilege, the work product doctrine and the rule of confidentiality established in\nprofessional ethics. The attorney-client privilege and work product doctrine apply in judicial and\nother proceedings in which a lawyer may be called as a witness or otherwise required to\nproduce evidence concerning a client. The rule of client-lawyer confidentiality applies in\nsituations other than those where evidence is sought from the lawyer through compulsion of\nlaw. The confidentiality rule, for example, applies not only to matters communicated in\nconfidence by the client but also to all information relating to the representation, whatever its\nsource. A lawyer may not disclose such information except as authorized or required by the\nRules of Professional Conduct or other law.\nUnited States v. Franklin, 598 F. 2d 954 (5th Cir. 1979)\nSummary: Attorney Robert Senor represented Morton Franklin in relation to various\ncriminal charges. Senor offered confidential client information to the government in an\nunsuccessful attempt to obtain more lenient treatment. Franklin filed a motion to dismiss\nhis indictment, on the ground that Senor improperly disclosed confidential information.\nThe district court denied the motion, and the circuit court affirmed, because Senor\ndisclosed the information in order to benefit Franklin, among other things.\nPER CURIAM:\nAppealing his false loan application and obstruction of justice convictions, defendant contends\nthat the indictment should have been dismissed because it was based on information obtained\nby the Government from his attorney. Concluding that the facts of this case do not support the\nrelief requested, we affirm.\nDefendant was charged with assisting in the submission of a materially false statement to a\nfederally insured bank to obtain financing for a gun smuggling operation and with obstructing\njustice by preventing an investigation into these financial arrangements.\nDISMISSAL OF INDICTMENT\nPrior to trial, defendant moved to dismiss the indictment on the ground that the Government had\nimproperly obtained information from his attorney, Robert Senor. Senor had contacted\nGovernment agents for the purpose of arranging leniency for the defendant on a marijuana\ncharge. Without detailing the evidence in relation to these contacts and the information revealed\nto the Government by Senor, it appears from the record that defendant cannot prevail under any\ntheory presented.\nIn Weatherford v. Bursey, the Supreme Court held it fatal to a conviction for the Government to\nobtain defense strategy from an attorney only where there was \xe2\x80\x9ca realistic possibility of injury to\ndefendant or benefit to the State.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c392\nSenor testified he had discussed defense strategy with his friend Edward Ragen, a Supervisory\nCustoms Air Officer. Since Ragen did not communicate this information to his superiors and\nwas not officially assigned to this case, and the Government did not purposely infiltrate the\ndefense camp, there was no realistic possibility of harm to defendant or benefit to the\nGovernment. Senor\'s statement to Zisk that Franklin maintained his innocence cannot be\nregarded as a disclosure of the defense strategy.\nDefendant further contends that the Government had made Senor its undercover agent.\nAlthough the affidavit for warrants to search codefendants\xe2\x80\x99 premises and automobiles had listed\nSenor as a \xe2\x80\x9cconfidential source\xe2\x80\x9d and contained information relayed by Senor, the facts do not\nsupport the contention here made.\nActing on defendant\xe2\x80\x99s behalf in seeking to barter information for leniency on the marijuana\ncharge, defendant\'s attorney initiated the contact. It appeared to the Government that he was\nacting with the approval of his client in his client\xe2\x80\x99s best interests. Throughout these\ncommunications Senor insisted that his client was innocent of any wrongdoing in the gun\nsmuggling operation and only wished to exchange information incriminating others for leniency.\nThis case is thus fundamentally different from Messelt v. Alabama, in which an \xe2\x80\x9cutter perversion\nof the attorney-client relationship\xe2\x80\x9d resulted from the defense attorney\xe2\x80\x99s effort to gain leverage for\nthe payment of his fee by suggesting to the prosecution that his client be charged with more\nserious offenses, and his proposal to his client that they participate together in a drug scheme.\nThe Government\xe2\x80\x99s response to Senor\xe2\x80\x99s efforts was restrained and proper. The Government\nagent, Philip Zisk, told Senor he was not interested in bargaining and already had access to\ninformation about the smuggling operation. Although Zisk did list Senor as a source of\ninformation in the application for the search warrants, he testified that the information on which\nthe affidavit was based came primarily from undercover officers, that Senor was only one of four\nsources, and that the information provided by him was merely cumulative. Defendant had no\ninterest in the property searched, was without standing to challenge the validity of the search,\nand did not attempt to do so. Senor thus was not, as claimed, a confidential agent in the service\nof the Government.\nBasically, Senor communicated three items of information to Zisk: (1) defendant\'s role in\narranging the financing of what he thought was to be a legitimate gun operation; (2) trips to\nCleveland by a codefendant to secure financing; and (3) details concerning Franklin\'s later\ndiscovery of gun smuggling. That Senor communicated information given by his client to the\nGovernment does not taint his conviction for several reasons. First, the information was\navailable to the Government from other sources and not based on Senor\xe2\x80\x99s communications.\nSecond, the information did not incriminate defendant. Third, the information was communicated\nvoluntarily as an inducement to a plea bargain. Fourth, at a later meeting defendant himself\ncommunicated substantially the same information to the Government through Senor, thereby\nwaiving any privilege he may have had and ratifying Senor\xe2\x80\x99s communication, if he had not in\nfact approved it from the outset. Fifth, neither the information communicated by Senor nor the\nfact the communication took place was introduced at trial.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c393\n\nThe only evidence introduced at the trial that implicated defendant and which related to Senor\xe2\x80\x99s\ncommunication was a codefendant\xe2\x80\x99s diary seized during the search. Even assuming that\nevidence was obtained by the Government in an illegal manner, the proper remedy would be\nsuppression, not dismissal of the prosecution. Suppression was not sought. In any event, the\nevidence had minimal impact.\nTherefore, the district court did not err in denying the motion to dismiss the indictment.\nQuestions:\n1. Why did Franklin think he was entitled to relief?\n2. Did Senor violate his duty of confidentiality to Franklin by disclosing the information at\nissue?\n3. Did disclosure of the information materially impact Franklin\xe2\x80\x99s trial? Should it matter?\nIn re Original Grand Jury Investigation, 89 Ohio St. 3d 544 (Ohio 2000)\nSummary: An attorney represented a client in relation to grand jury investigation. The\nattorney received a letter written by the client that disclosed a possible crime. The\nattorney asked the court how to proceed, and ultimately orally disclosed the contents of\nthe letter, without disclosing the letter itself. The Ohio Supreme Court held that the letter\nwas a client \xe2\x80\x9csecret,\xe2\x80\x9d but that disclosure was required in order to prevent a crime.\nFRANCIS E. SWEENEY, SR., J.\nThe issue presented in this case is whether an attorney can be compelled to disclose to the\ngrand jury a letter written by a client and discovered by an investigator that contains evidence of\na possible crime or whether the Ohio Code of Professional Responsibility prohibits such\ndisclosure.\nAt the outset, we understand that appellant was faced with an ethical dilemma and had the\ndifficult decision of determining how to respond to the competing challenges of maintaining\nclient confidentiality and preserving the safety concerns of the public. We appreciate that\nappellant confronted the problem head-on by first asking the Secretary of the Board of\nCommissioners on Grievances and Discipline of the Supreme Court for advice on whether he\nhad an obligation to report a possible crime and then by heeding that advice by reporting the\nmatter to the court and cooperating with the police. Nevertheless, for the reasons that follow, we\nfind that appellant must comply with the grand jury subpoena and relinquish the letter in\nquestion.\nThe concept of client confidentiality, including the attorney\'s ethical obligations concerning\nconfidentiality, is embodied in DR 4-101. DR 4-101(A) defines the terms \xe2\x80\x9cconfidence\xe2\x80\x9d and\n\xe2\x80\x9csecret\xe2\x80\x9d as follows:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c394\n\n\xe2\x80\x9cConfidence\xe2\x80\x9d refers to information protected by the attorney-client privilege under\napplicable law and \xe2\x80\x9csecret\xe2\x80\x9d refers to other information gained in the professional\nrelationship that the client has requested to be held inviolate or the disclosure of which\nwould be embarrassing or would be likely detrimental to the client.\nDR 4-101(B) states, \xe2\x80\x9cExcept when permitted under DR 4-101(C), a lawyer shall not knowingly\nreveal a confidence or secret of a client.\xe2\x80\x9d\nWe must first determine whether the letter sought falls within the definition of a client \xe2\x80\x9csecret.\xe2\x80\x9d\nUnlike \xe2\x80\x9cconfidence,\xe2\x80\x9d which is limited to information an attorney obtains directly from his or her\nclient, the term \xe2\x80\x9csecret\xe2\x80\x9d is defined in broad terms. Therefore, a client secret includes information\nobtained from third-party sources, including \xe2\x80\x9cinformation obtained by a lawyer from witnesses,\nby personal investigation, or by an investigation of an agent of the lawyer, disclosure of which\nwould be embarrassing or harmful to the client.\xe2\x80\x9d\nThe court of appeals found that the letter was not a secret because it was not information\ngained in the professional relationship. Instead, the court said that the letter was simply physical\nevidence, which needed to be disclosed to the authorities. Even though the letter does\nconstitute physical evidence of a possible crime, it also contains information detrimental to\nappellant. Thus, we find that the letter falls within the definition of a client \xe2\x80\x9csecret,\xe2\x80\x9d since it was\nobtained in the professional attorney-client relationship, by appellant\xe2\x80\x99s agent (the investigator),\nand since it contains detrimental information detailing a possible crime committed by appellant\'s\nformer client.\nAlthough the letter is a client secret, this does not necessarily mean that disclosure of the letter\nis absolutely prohibited. An attorney may disclose a client secret if one of the four listed\nexceptions in DR 4-101(C) applies.\nAppellant concedes that DR 4-101(C)(3) permits him to \xe2\x80\x9creveal the intention of his client to\ncommit a crime and the information necessary to prevent the crime.\xe2\x80\x9d67 Nevertheless, appellant\ncontends that this provision is narrow in its scope and permits him to orally disclose the\ninformation contained in the letter, but does not permit him to disclose the physical evidence\n(the letter). Therefore, appellant maintains that DR 4-101(C)(3) did not permit him to reveal\nmore than he did when he orally disclosed the intention of his former client to commit a crime\nand prevented a crime from occurring.\nWe agree with appellant that he was authorized by DR 4-101(C)(3) when he chose to reveal the\nintent of his client to commit a crime, and, actually, went beyond what DR 4-101(C)(3) allows by\nreading the entire letter to the trial court and police. However, the fact that he revealed this\n67\n\nAppellant points out that this provision is written in permissive terms, since it states that a lawyer \xe2\x80\x9cmay\xe2\x80\x9d\nreveal the client\'s intent to commit a crime. We acknowledge that DR 4-101(C)(3) is permissive.\nNevertheless, this has no bearing on the outcome in this case, since appellant concedes that he already\ndisclosed the relevant information to the authorities.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c395\ninformation does not answer the question whether he is obligated to produce the letter itself.\nThus, the question that remains is whether appellant is required to relinquish the letter itself and\npresent it to the grand jury. We find that the exception found in DR 4-102(C)(2) governs\ndisposition of this issue.\nDR 4-101(C)(2) provides that an attorney may reveal \xe2\x80\x9cconfidences or secrets when permitted\nunder Disciplinary Rules or required by law or court order.\xe2\x80\x9d Although the language contained in\nDR 4-101(C)(2), like that of DR 4-101(C)(3), is written in permissive terms, courts have\ninterpreted provisions similar to DR 4-101(C)(2) in such a manner as to require disclosure. The\nexception of DR 4-101(C)(2) for disclosures required by law has been construed so that \xe2\x80\x9cthe\neffect of other rules compels disclosures.\xe2\x80\x9d Consequently, if a lawyer is \xe2\x80\x9crequired by law\xe2\x80\x9d to\ndisclose information to the authorities, \xe2\x80\x9cthese legal obligations create \xe2\x80\x98forced\xe2\x80\x99 exceptions to\nconfidentiality.\xe2\x80\x9d Under these circumstances, a lawyer\xe2\x80\x99s duty \xe2\x80\x9cnot to use or disclose confidential\nclient information is superseded when the law specifically requires such use or disclosure.\xe2\x80\x9d\nThe exception of DR 4-101(C)(2) for disclosures required by law has been applied in the context\nof mandating that attorneys relinquish evidence and instrumentalities of crime to lawenforcement agencies. Thus, the rule has emerged that, despite any confidentiality concerns, a\ncriminal defense attorney must produce real evidence obtained from his or her client or from a\nthird-party source, regardless of whether the evidence is mere evidence of a client\'s crime, or is\na fruit or instrumentality of a crime. In either event, the physical evidence must be turned over to\nthe proper authorities. In essence, the confidentiality rules do not give an attorney the right to\nwithhold evidence.\nAppellant contends, however, that there are strong policy reasons against mandating\ndisclosure. Appellant believes that mandatory disclosure will discourage attorneys from\nreporting possible threats made by their clients and will therefore run contrary to the intent of the\ncode, which is to prevent crimes from occurring. Appellant cites the Massachusetts decision of\nPurcell v. Dist. Atty. for Suffolk Dist., which highlights these concerns.\nIn Purcell, an attorney informed police about his client\xe2\x80\x99s intention to commit arson. The trial\ncourt ordered the attorney to testify about the conversation he had with his client concerning his\nclient\'s intention to commit this crime, and the state defended the order on the basis of the\ncrime-fraud exception to the attorney-client privilege. The Massachusetts Supreme Court\nvacated the trial court\xe2\x80\x99s order and held that the attorney did not have to testify against his client.\nIn so holding, the court noted:\nWe must be cautious in permitting the use of client communications that a lawyer has\nrevealed only because of a threat to others. Lawyers will be reluctant to come forward if\nthey know that the information that they disclose may lead to adverse consequences to\ntheir clients. A practice of the use of such disclosures might prompt a lawyer to warn a\nclient in advance that the disclosure of certain information may not be held in\nconfidence, thereby chilling free discourse between lawyer and client and reducing the\nprospect that the lawyer will learn of a serious threat to the well-being of others.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c396\n\nAlthough these may be valid concerns, we find that the Purcell decision is distinguishable from\nthe instant case, and that the policy reasons cited in Purcell have less validity here. Purcell\ninvolved direct communications between an attorney and client. The issue in that case was\nwhether the attorney was required to testify against his client. In this case, the attorney-client\nprivilege is not at issue. Nor is appellant being asked to testify against his former client. Instead,\nthe instant case revolves around whether a physical piece of evidence must be relinquished to\nthe grand jury. While we recognize the importance of maintaining a client\xe2\x80\x99s confidences and\nsecrets and understand that an attorney may have concerns in turning over incriminating\nevidence against his or her client, we do not believe that these concerns should override the\npublic interest in maintaining public safety and promoting the administration of justice by\nprosecuting individuals for their alleged criminal activity.\nSince the letter sought in this case contains evidence of a possible crime, we find that the letter\nmust be turned over to the grand jury. Accordingly, we hold that where an attorney receives\nphysical evidence from a third party relating to a possible crime committed by his or her client,\nthe attorney is obligated to relinquish that evidence to law-enforcement authorities and must\ncomply with a subpoena issued to that effect.\nOther provisions of the code support our holding that appellant must relinquish the letter to the\ngrand jury. DR 7-109(A) provides, \xe2\x80\x9cA lawyer shall not suppress any evidence that he or his\nclient has a legal obligation to reveal or produce.\xe2\x80\x9d Furthermore, DR 7-102(A)(3) provides, \xe2\x80\x9cIn his\nrepresentation of a client, a lawyer shall not conceal or knowingly fail to disclose that which he is\nrequired by law to reveal.\xe2\x80\x9d Reading these rules together, we believe that under the facts\npresented in this case, appellant has a legal obligation to turn the letter over to the grand jury.\nWe agree with the court of appeals that the sanction imposed against appellant stemming from\nthe contempt proceedings should be vacated, given that appellant challenged the subpoena on\nconfidentiality grounds in good faith. Under these circumstances, we do not believe appellant\nshould be punished and held in contempt. The finding of contempt is vacated on condition that\nappellant comply with the subpoena. Accordingly, we affirm the judgment of the court of appeals\nand order appellant to relinquish the letter in question to the grand jury.\nPFEIFER, J., concurring in part and dissenting in part.\nI agree with the majority that the letter is a client secret and that Helmick was authorized to\nreveal the intent of his client to commit a crime. DR 4-101(C)(3). Revealing \xe2\x80\x9cthe information\nnecessary to prevent the crime\xe2\x80\x9d should have concluded the matter. Unfortunately, the trial court\nand now a majority of this court chose to read DR 4-101(C)(2) liberally. That reading of the\nexception swallows the rule of DR 4-101(B)(1), which states that a lawyer \xe2\x80\x9cshall not knowingly\nreveal a confidence or secret of his client,\xe2\x80\x9d and declares open season on defense attorney files.\nThe majority relies on cases from other jurisdictions in which attorneys were required to turn\nover to the proper authorities the fruits and instrumentalities, including a gun, of crime. Those\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c397\ncases are not similar factually to this case. Purcell is, and we should have taken a similarly\ncautious approach. Otherwise, \xe2\x80\x9clawyers will be reluctant to come forward if they know that the\ninformation that they disclose may lead to adverse consequences to their clients, thereby\nchilling free discourse between lawyer and client and reducing the prospect that the lawyer will\nlearn of a serious threat to the well-being of others.\xe2\x80\x9d\nHelmick acted the way all attorneys with an ethical dilemma should: he sought out competent\ncounsel and followed the advice given. He acted in a manner designed to prevent the\ncommission of a crime, which is what the (C)(3) exception to DR 4-101 is all about.\nToday\xe2\x80\x99s opinion will likely have two unfortunate results. First, overzealous prosecutors will be\nmore likely to engage in fishing expeditions. Second, attorneys and their clients will be less\nlikely to discuss potential crimes, which will decrease the likelihood that the crimes can be\nprevented. I concur in part and dissent in part.\nQuestions:\n1. Why did the appellate court and the Ohio Supreme Court disagree about whether the\nletter was \xe2\x80\x9cconfidential information\xe2\x80\x9d for the purpose of the duty of confidentiality?\n2. Why did the court find that the attorney could disclose the contents of the letter? Do you\nagree?\n3. What is the difference between disclosing the information necessary to prevent a crime\nfrom occurring and disclosing confidential information?\nMcClure v. Thompson, 323 F.3d 1233 (9th Cir. 2003)\nSummary: Robert McClure was arrested for the murder of Carol Jones and the\ndisappearance of her two children. Attorney Christopher Mecca represented McClure. In\nthe course of representation, McClure told Mecca the location of the children. Mecca\ndisclosed that information to the police, who found their bodies. McClure was convicted\nfor three murders. He filed a habeas petition, alleging that Mecca improperly disclosed\nconfidential information. The district court denied the petition, and the Ninth Circuit\naffirmed, holding that McClure had not provided informed consent to disclosure, but\nMecca reasonably believed disclosure could save the children.\nWILLIAM W. FLETCHER, Circuit Judge:\nOregon state prisoner Robert A. McClure appeals the district court\xe2\x80\x99s denial of his habeas corpus\npetition challenging his jury trial conviction for three aggravated murders. McClure\xe2\x80\x99s original\ndefense attorney, Christopher Mecca, placed an anonymous telephone call to law enforcement\nofficials directing them to the locations of what turned out to be the bodies of two children whom\nMcClure was ultimately convicted of killing. The district court rejected McClure\xe2\x80\x99s arguments that\nthe disclosure constituted ineffective assistance of counsel, holding there was no breach of the\nduty of confidentiality and no actual conflict of interest. We affirm.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c398\n\nI. Background\nA. Offense, Arrest and Conviction\nOn Tuesday, April 24, 1984, the body of Carol Jones was found in her home in Grants Pass,\nOregon. She had been struck numerous times on the head, arms and hands with a blunt object.\nA gun cabinet in the home had been forced open and a .44 caliber revolver was missing. Two of\nJones\xe2\x80\x99 children \xe2\x80\x94 Michael, age 14, and Tanya, age 10 \xe2\x80\x94 were also missing. The fingerprints of\nRobert McClure, a friend of Jones, were found in the blood in the home. On Saturday, April 28,\nMcClure was arrested in connection with the death of Carol Jones and the disappearance of the\nchildren.\nThat same day, McClure\xe2\x80\x99s mother contacted attorney Christopher Mecca and asked him to\nrepresent her son. As discussed in more detail below, sometime in the next three days, under\ncircumstances described differently by McClure and Mecca, McClure revealed to Mecca the\nseparate remote locations where the children could be found. On Tuesday, May 1, Mecca,\narmed with a map produced during his conversations with McClure, arranged for his secretary\nto place an anonymous phone call to a sheriff\'s department telephone number belonging to a\nlaw enforcement officer with whom Mecca had met earlier.\nLater that day and the following day, sheriff\xe2\x80\x99s deputies located the children\'s bodies, which were\nin locations more than 60 miles apart. The children had each died from a single gunshot wound\nto the head. Mecca then withdrew from representation. On May 3, McClure was indicted for the\nmurders of Carol Jones and her children. At trial, the prosecution produced extensive evidence\nthat stemmed from the discovery of the children\xe2\x80\x99s bodies and introduced testimony regarding\nthe anonymous phone call. McClure was found guilty of all three murders and was sentenced to\nthree consecutive life sentences with 30-year minimums. On direct appeal, his conviction was\naffirmed without opinion.\nB. Disclosure of the Children\'s Whereabouts\nThe parties agree that Mecca and McClure met at the jail and spoke on the telephone on a\nnumber of occasions between April 28 and May 1. However, the substance of the conversations\nbetween McClure and Mecca are the subject of significant dispute.\nMecca recorded his account in notes that he wrote immediately after the children\'s bodies were\ndiscovered. Mecca also gave deposition testimony for McClure\xe2\x80\x99s state post conviction\nproceeding, submitted an affidavit prior to McClure\'s federal habeas proceeding, and gave\ntestimony at the federal district court evidentiary hearing in the habeas proceeding. In his notes,\nMecca wrote that McClure had initially claimed that he was \xe2\x80\x9cbeing framed\xe2\x80\x9d for the murder, but\nthat he was nervous about his fingerprints being in the house. He had asked Mecca to help him\nremove some other potential evidence, which Mecca declined to do.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c399\nAccording to the notes, on the Sunday night after McClure\xe2\x80\x99s Saturday arrest, Mecca received a\n\xe2\x80\x9cfrantic phone call\xe2\x80\x9d from McClure\'s sister, who was convinced that McClure had murdered\nJones, but had reason to believe that the children were alive and perhaps \xe2\x80\x9ctied up or bound\nsomeplace.\xe2\x80\x9d In response, Mecca set up a meeting with McClure, his sister and his mother at the\njail, at which McClure\xe2\x80\x99s sister \xe2\x80\x9cdirectly confronted McClure and begged him to divulge\ninformation about the whereabouts of the kids.\xe2\x80\x9d McClure and his sister discussed how McClure\nsometimes did \xe2\x80\x9ccrazy things\xe2\x80\x9d when he was using drugs, but McClure strongly maintained his\ninnocence as to Carol Jones\xe2\x80\x99 murder and the children\xe2\x80\x99s disappearance.\nAccording to his notes, when Mecca next spoke with McClure on Monday, McClure was less\nadamant in his denial. Mecca described how, when they met on Monday afternoon, McClure\nbegan to tell him of his \xe2\x80\x9csexual hallucinations and fantasies\xe2\x80\x9d involving young girls and about\n\xe2\x80\x9cother situations that happened in the past involving things he would do while under the\ninfluence of drugs.\xe2\x80\x9d \xe2\x80\x9cIt was at that time,\xe2\x80\x9d Mecca wrote, \xe2\x80\x9cwhen I realized in my own mind that he\nhad committed the crime and the problem regarding the children intensified.\xe2\x80\x9d Mecca wrote that\nhe \xe2\x80\x9cwas extremely agitated over the fact that these children might still be alive.\xe2\x80\x9d\nAfter a Monday night visit to the crime scene, Mecca returned to the jail to speak with McClure\nagain, at which time he \xe2\x80\x9cpeeled off most of the outer layers of McClure and realized that there\nwas no doubt in my mind that he had killed Carol Jones.\xe2\x80\x9d McClure told Mecca he wanted to see\na psychiatrist, then launched into \xe2\x80\x9cbizarre ramblings.\xe2\x80\x9d \xe2\x80\x9cEach time as I would try to leave,\xe2\x80\x9d Mecca\nrecalled in his notes, \xe2\x80\x9cMcClure would spew out other information, bits about the children, and he\nwould do it in the form of a fantasy.\xe2\x80\x9d Mecca wrote that he \xe2\x80\x9cwanted to learn from him what\nhappened to those children.\xe2\x80\x9d He told McClure \xe2\x80\x9cthat we all have hiding places, that we all know\nwhen we go hiking or driving or something, we all remember certain back roads and remote\nplaces,\xe2\x80\x9d and that McClure \xe2\x80\x9crelated to me one place where a body might be\xe2\x80\x9d and then \xe2\x80\x9cdescribed\nwhere the other body would be located.\xe2\x80\x9d Mecca wrote that he \xe2\x80\x9cwasn\'t going to push him for\nanything more,\xe2\x80\x9d but \xe2\x80\x9cwhen I tried to leave, he said, and he said it tentatively, \xe2\x80\x98would you like me\nto draw you a map and just give you an idea?\xe2\x80\x99 and I said \xe2\x80\x98Yes\xe2\x80\x99 and he did.\xe2\x80\x9d Mecca recorded that\n\xe2\x80\x9cat that time, I felt in my own mind the children were dead, but, of course, I wasn\xe2\x80\x99t sure.\xe2\x80\x9d\nVery late on Monday evening, McClure telephoned Mecca at home and said, \xe2\x80\x9cI know who did it.\xe2\x80\x9d\nMecca recorded in his notes that the next morning he went to meet with McClure, and asked\nhim about this statement. McClure told Mecca that \xe2\x80\x9cSatan killed Carol.\xe2\x80\x9d When Mecca asked,\n\xe2\x80\x9cWhat about the kids?\xe2\x80\x9d McClure replied, \xe2\x80\x9cJesus saved the kids.\xe2\x80\x9d Mecca wrote in his notes that\nthis statement \xe2\x80\x9chit me so abruptly, I immediately assumed that if Jesus saved the kids, that the\nkids are alive.\xe2\x80\x9d Mecca wrote that he \xe2\x80\x9ckind of felt that McClure was talking about a sexual thing,\nbut, in any event, I wasn\xe2\x80\x99t sure.\xe2\x80\x9d\nMecca\xe2\x80\x99s notes indicate that on Monday, before McClure made the \xe2\x80\x9cJesus saved the kids\xe2\x80\x9d\ncomment, and again on Tuesday, immediately after the meeting at which he made that\ncomment, Mecca had conversations with fellow lawyers, seeking advice regarding \xe2\x80\x9cthe dilemma\nthat he faced.\xe2\x80\x9d After the second of these conversations, which took place Tuesday morning,\nMecca arranged for a noon meeting with the undersheriff and the prosecutor. At the meeting, he\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c400\n\xe2\x80\x9cmentioned to them that I may have information which would be of interest to the State\xe2\x80\x9d and\nattempted to negotiate a plea. When the prosecutor responded that there would be no deal,\nMecca recorded in his notes, \xe2\x80\x9cI had made up my mind then that I had to do the correct thing.\nThe only option I had, as far as I was concerned, was to disclose the whereabouts of the\nbodies.\xe2\x80\x9d (Recall that by the time Mecca wrote these notes, he had learned that the children were\ndead.) A law enforcement official testified in a federal court deposition that, after both the state\nbar association and the attorney general \xe2\x80\x9crecommended that it would be unwise for Mr. Mecca\nto provide us information,\xe2\x80\x9d Mecca \xe2\x80\x9cindicated that, even though there might be sanctions, that he\nstill was wanting to provide information that he had regarding the children.\xe2\x80\x9d Mecca stated that\nwhen he spoke with McClure\xe2\x80\x99s sister and mother, they were adamant that he do whatever he\ncould to locate the children, and that \xe2\x80\x9cthey were still under the impression that one or both of the\nchildren were alive, or at least there was a chance they were alive.\xe2\x80\x9d\nMecca then returned to the jail Tuesday afternoon and, according to his notes, \xe2\x80\x9cadvised\nMcClure that if there was any possibility that these children were alive, we were obligated to\ndisclose that information in order to prevent, if possible, the occurrence of what could be the\nelevation of an assault to a murder, for instance. I further indicated that if he really requested\npsychiatric help, to help him deal with his problem, that this perhaps was the first step.\xe2\x80\x9d \xe2\x80\x9cIn any\nevent,\xe2\x80\x9d Mecca recorded in his notes, \xe2\x80\x9che consented.\xe2\x80\x9d \xe2\x80\x9cI arranged to have the information\nreleased anonymously to the Sheriff\xe2\x80\x99s Department with directions to the bodies.\xe2\x80\x9d He noted that\nthere was \xe2\x80\x9cno provable way to connect\xe2\x80\x9d McClure to the information, \xe2\x80\x9cbut I think it\xe2\x80\x99s rather\nobvious from those in the know, who the information came from.\xe2\x80\x9d\nIn the deposition conducted in conjunction with McClure\xe2\x80\x99s state habeas proceeding, Mecca\ngave a similar account of the events surrounding disclosure of the locations of the children. He\nemphasized that \xe2\x80\x9cit all happened relatively quickly\xe2\x80\x9d and that there was a public \xe2\x80\x9chysteria about\nthese kids, whether the kids were dead, whether the kids were alive.\xe2\x80\x9d Mecca reiterated that\nmuch of the later conversations with McClure consisted of hypotheticals and fantasies \xe2\x80\x94 \xe2\x80\x9clike\nhe was playing a game with me\xe2\x80\x9d \xe2\x80\x94 but that it was clear that McClure wanted to tell him where\nthe children were. Mecca stated in his deposition that \xe2\x80\x9cthe condition of the children was never\ndiscussed,\xe2\x80\x9d but that the insistence by McClure\'s mother and sister that McClure wouldn\xe2\x80\x99t hurt\nthe children put him \xe2\x80\x9cin this mode of thinking these kids might be alive someplace.\xe2\x80\x9d\nMecca testified in his deposition that he thought that if the children were alive, it might relieve\nMcClure of additional murder charges, but that the children were his main concern. When asked\nif he was \xe2\x80\x9cprimarily concerned with the children\xe2\x80\x99s welfare or with Mr. McClure\xe2\x80\x99s welfare\xe2\x80\x9d at the\ntime he disclosed the location of the bodies, Mecca replied, \xe2\x80\x9cAt that point I was concerned with\nthe children\xe2\x80\x99s welfare.\xe2\x80\x9d When asked if he explained to McClure that \xe2\x80\x9cif they were in fact dead,\nthat revealing the location of the bodies would lead to evidence which could implicate Mr.\nMcClure in their murders,\xe2\x80\x9d Mecca answered: \xe2\x80\x9cNo. I don\'t think I had the presence of mind to sit\ndown and analyze every single detail and go over with him, \xe2\x80\x98Geez, you know, if they are really\ndead, why don\'t you tell me.\xe2\x80\x99\xe2\x80\x9d However, he testified, \xe2\x80\x9cMcClure knew I thought there was a\nchance those kids were alive.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c401\nMecca testified in the deposition that the plan to place the anonymous telephone call was his,\nbut that McClure knew that he planned to do it, and that, in his late-night call, McClure had\nmade clear that he \xe2\x80\x9cabsolutely wanted to disclose where those kids were.\xe2\x80\x9d When asked, \xe2\x80\x9cDid he\ngive you permission to reveal this information?\xe2\x80\x9d Mecca responded, \xe2\x80\x9cOh, yes.\xe2\x80\x9d\nIn a 1999 affidavit submitted in conjunction with McClure\xe2\x80\x99s federal habeas proceeding, Mecca\ngave an additional statement regarding McClure\'s consent: \xe2\x80\x9cMr. McClure did not orally or\nexpressly consent to the disclosure. I inferred consent from the circumstances, specifically, the\nfact that Mr. McClure called me at home on several occasions with the request that I see him at\nthe jail, and the fact that he drew a map of the location of the bodies of the victim in his own\nhandwriting and gave me the map.\xe2\x80\x9d\nIn addition to reviewing Mecca\xe2\x80\x99s notes, his state-court deposition testimony, and his federalcourt affidavit, the federal district court heard testimony from Mecca at an evidentiary hearing. In\nthis testimony, Mecca emphasized that he generally takes a low-keyed approach to questioning\nhis clients. He also emphasized that McClure was \xe2\x80\x9cfully engaged in his defense\xe2\x80\x9d and \xe2\x80\x9cwas\nrunning the show.\xe2\x80\x9d Every time they met or conversed, he said, it was at McClure\xe2\x80\x99s request. He\nsaid that he and McClure \xe2\x80\x9cdiscussed at various times various methods of what I was going to do\nwith this information.\xe2\x80\x9d Mecca testified that McClure never expressly said that he consented to\nthe disclosure, and that Mecca never asked for such consent. He confirmed his earlier\ntestimony that he inferred consent, and added for the first time that this inference was based on\nMcClure\xe2\x80\x99s nodding, saying \xe2\x80\x9cokay,\xe2\x80\x9d and otherwise manifesting assent. He said this was what he\nhad meant when he had written in his notes that McClure consented. Mecca also reiterated that\nhe never told McClure of the legal risks involved in disclosing the children\'s locations.\nMecca testified that after the Monday conversation with McClure, \xe2\x80\x9cthe conclusion I came to was\nthat, without telling me, he told me he had killed three people.\xe2\x80\x9d But he stated that he did not\nconfirm that conclusion by directly asking McClure if it was the case. Instead, he said, he\nemphasized to McClure that if there was a chance the children were alive, they needed to save\nthem, and in response McClure \xe2\x80\x9cnever said they were dead.\xe2\x80\x9d After the \xe2\x80\x9cJesus saved the kids\xe2\x80\x9d\ncomment on Tuesday, Mecca testified, \xe2\x80\x9cI allowed myself to believe that these kids might\nsomehow be alive.\xe2\x80\x9d When asked on cross examination whether, at the time he decided to make\nthe anonymous call, he thought there was \xe2\x80\x9ca strong possibility the kids still may be alive,\xe2\x80\x9d Mecca\nresponded that he \xe2\x80\x9cfelt that it was a possibility. I wouldn\xe2\x80\x99t say a strong possibility.\xe2\x80\x9d One of the\nreasons he felt this possibility existed, he said, was that his \xe2\x80\x9cclient had not indicated anything\ndifferently.\xe2\x80\x9d He testified that the possibility of saving his client from additional murder charges\n\xe2\x80\x9cwas something that was going through his mind\xe2\x80\x9d during his decisionmaking. He noted that the\nweather at that time of year was \xe2\x80\x9cwarm\xe2\x80\x9d and \xe2\x80\x9cpleasant,\xe2\x80\x9d and that if the children had been left in\nthe woods it was possible that the weather would not have contributed to their death.\nMcClure disagreed with Mecca\xe2\x80\x99s account of the events leading up to the anonymous call. In\ntestimony in both the state and federal district court proceedings, he repeatedly insisted that he\ndid not give Mecca permission to disclose any information and that he was reassured that\neverything he told Mecca would remain confidential. He said Mecca pressured him into\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c402\ndisclosing information by setting up the meeting with his sister and mother, and then\ndisseminated that information to his detriment without his knowledge or consent.\nMcClure testified that Mecca never asked him directly if the children were alive or dead, but that\nthe hypothetical conversations that they had were about where Mecca might find dead \xe2\x80\x9cbodies,\xe2\x80\x9d\nnot live \xe2\x80\x9cchildren.\xe2\x80\x9d He said his disclosure of those locations was his way of admitting to having\nkilled them. He testified that Mecca never told him that he intended to make an anonymous\ntelephone call.\nIII. Discussion\nMcClure\xe2\x80\x99s single claim is that habeas relief is appropriate because he received ineffective\nassistance of counsel under the Sixth Amendment. He asserts three independent grounds on\nwhich ineffectiveness could be found. The first two are based on alleged breaches of Mecca\xe2\x80\x99s\nprofessional duty to maintain client confidentiality. McClure argues that this duty was breached\nboth by a failure to obtain informed consent prior to the disclosure of confidential information\nand by a failure to inquire thoroughly before concluding that disclosure was necessary to\nprevent the deaths of the children. The third ground is that the primacy of Mecca\xe2\x80\x99s concern for\nthe victims constituted a conflict of interest that rendered Mecca\'s counsel constitutionally\nineffective.\nThe Duty of Confidentiality\nMcClure contends that Mecca\xe2\x80\x99s disclosure of McClure\xe2\x80\x99s confidential statements about the\nlocation of the children violated McClure\xe2\x80\x99s Sixth Amendment right to effective assistance of\ncounsel. ABA Model Rule of Professional Conduct 1.6 sets forth a widely recognized duty of\nconfidentiality: \xe2\x80\x9cA lawyer shall not reveal information relating to representation of a client.\xe2\x80\x9d Our\nlegal system is premised on the strict adherence to this principle of confidentiality, and \xe2\x80\x9cthe\nSupreme Court has long held attorneys to stringent standards of loyalty and fairness with\nrespect to their clients.\xe2\x80\x9d There are few professional relationships \xe2\x80\x9cinvolving a higher trust and\nconfidence than that of attorney and client,\xe2\x80\x9d and \xe2\x80\x9cfew more anxiously guarded by the law, or\ngoverned by sterner principles of morality and justice.\xe2\x80\x9d\nAs critical as this confidential relationship is to our system of justice, the duty to refrain from\ndisclosing information relating to the representation of a client is not absolute. The ABA Model\nRule provides a list of well-established exceptions to the general principle of confidentiality, two\nof which are pertinent to the present case. First, a lawyer may reveal confidential information if\n\xe2\x80\x9cthe client consents after consultation.\xe2\x80\x9d Second, \xe2\x80\x9ca lawyer may reveal such information to the\nextent the lawyer reasonably believes necessary to prevent the client from committing a criminal\nact that the lawyer believes is likely to result in imminent death or substantial bodily harm.\xe2\x80\x9d The\nrelevant provisions of the Oregon Code of Professional Responsibility echo both the general\nprinciple of confidentiality and these particular exceptions.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c403\nThe duty of an attorney to keep his or her client\xe2\x80\x99s confidences in all but a handful of carefully\ndefined circumstances is so deeply ingrained in our legal system and so uniformly\nacknowledged as a critical component of reasonable representation by counsel that departure\nfrom this rule \xe2\x80\x9cmakes out a deprivation of the Sixth Amendment right to counsel.\xe2\x80\x9d With this\nuncontested premise as our starting point, we examine whether the circumstances surrounding\nMecca\xe2\x80\x99s revelation of a confidential client communication excused his disclosure, such that his\nperformance could have been found by the state court and the district court to be\nconstitutionally adequate. Specifically, we look to see if Mecca\xe2\x80\x99s client \xe2\x80\x9cconsented after\nconsultation\xe2\x80\x9d or if Mecca \xe2\x80\x9creasonably believed the revelation was necessary to prevent the client\nfrom committing a criminal act that Mecca believed was likely to result in imminent death or\nsubstantial bodily harm.\xe2\x80\x9d We conclude that the first of these exceptions does not apply to justify\nMecca\'s behavior, but that the second does.\n1. Consent After Consultation\nMcClure argues that Mecca rendered constitutionally ineffective assistance because he\nbreached his duty of confidentiality by not obtaining McClure\'s informed consent before\ndisclosure. The professional standard that allows disclosure of confidential communications\nwhen \xe2\x80\x9cthe client consents after consultation\xe2\x80\x9d has two distinct parts: consent by the client, and\nconsultation by the counsel. Our required deference to both the state court\xe2\x80\x99s factual findings and\nthe district court\xe2\x80\x99s credibility determination leads us to hold that the first of these elements was\nmet. However, despite this deference, we hold that the second element was not met.\na. Consent\nThe state court made the following finding: \xe2\x80\x9cTrial counsel received petitioner\xe2\x80\x99s permission to\nanonymously disclose the whereabouts of the children to the authorities.\xe2\x80\x9d AEDPA demands that\nthis finding of consent be presumed correct and accepted as true unless McClure rebuts the\npresumption with clear and convincing evidence to the contrary. The district court, whose\ncredibility determinations are given great weight, and whose findings of fact are reviewed only\nfor clear error, explicitly accepted that finding, and stated that it did \xe2\x80\x9cnot find credible petitioner\xe2\x80\x99s\nassertion that he did not consent to the disclosure of the information contained in the map.\xe2\x80\x9d It\nfound that McClure \xe2\x80\x9cvoluntarily drew the map and gave it to Mecca,\xe2\x80\x9d and that, even in the\nabsence of the words \xe2\x80\x9cI consent,\xe2\x80\x9d Mecca could infer consent from the circumstances and from\nMcClure\xe2\x80\x99s conduct. It stated that it found Mecca\xe2\x80\x99s testimony \xe2\x80\x9centirely credible and corroborated\nby his contemporaneous notes which state specifically that petitioner consented to the\ndisclosure.\xe2\x80\x9d\nThere is evidence in the record to cast doubt on these consent findings \xe2\x80\x94 indeed, enough\nevidence that if we were sitting as trier of fact, we might find that McClure did not give consent.\nMcClure repeatedly denied that he consented, and certainly would have had good reason not to\nconsent. The state court determination that McClure had consented was made before Mecca\nclarified that the consent was implied and not express. Moreover, it was based on Mecca\xe2\x80\x99s\nunconditional affirmative response, in his state-court deposition, to the question of whether\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c404\npermission to reveal the information was granted. Only later, in the federal habeas proceeding,\ndid it come to light that Mecca had merely inferred McClure\xe2\x80\x99s consent.\nFurther, Mecca\xe2\x80\x99s account of the circumstances from which he inferred McClure\xe2\x80\x99s consent\nchanged over the years. His initial account stated that he inferred consent from the fact that\nMcClure called him at home, drew the map, and gave it to him. It is a significant leap to infer\nMcClure\xe2\x80\x99s consent to disclose the map to law enforcement authorities from the fact that McClure\ngave the map to Mecca. Virtually all clients provide information to their attorneys, but they do so\nassuming that the attorneys will not breach their duty of confidentiality. Further, Mecca\xe2\x80\x99s\nbehavior at the time of the disclosure suggested that he thought he lacked the kind of informed\nconsent that would give him the legal authority to act.\nHowever, the findings reached by the state and district courts are not so \xe2\x80\x9cimplausible\xe2\x80\x9d \xe2\x80\x94\nparticularly in light of the district court\'s credibility determinations \xe2\x80\x94 that they produce a \xe2\x80\x9cdefinite\nand firm conviction that a mistake has been committed.\xe2\x80\x9d The district court believed Mecca\'s\naccount at the evidentiary hearing, disbelieved McClure\'s, and found the discrepancies in\nMecca\xe2\x80\x99s testimony to be \xe2\x80\x9cminor.\xe2\x80\x9d Because there are \xe2\x80\x9ctwo permissible views of the evidence, the\nfactfinder\xe2\x80\x99s choice between them cannot be clearly erroneous.\xe2\x80\x9d We therefore hold that McClure\ngave his consent to the disclosure.\nb. Consultation\nHowever, the mere fact of consent is not sufficient to excuse what would otherwise be a breach\nof the duty of confidentiality. Consent must also be informed. That is, the client can provide valid\nconsent only if there has been appropriate \xe2\x80\x9cconsultation\xe2\x80\x9d with his or her attorney. Mecca\xe2\x80\x99s\nconsultation with McClure regarding his consent to disclosure was addressed in the state court\nand district court findings. Both courts found that Mecca did not advise McClure about the\npotential harmful consequences of disclosure. The state court found that \xe2\x80\x9cbefore petitioner\nauthorized trial counsel to reveal the childrens\xe2\x80\x99 locations to authorities, trial counsel did not\nadvise petitioner that if authorities located the children, he could be further implicated in the\ncriminal activity and the evidence against him would be stronger.\xe2\x80\x9d The district court found that\n\xe2\x80\x9cMecca admits that he did not advise petitioner of all potential adverse consequences.\xe2\x80\x9d\nEmphasizing that McClure was \xe2\x80\x9cfully engaged\xe2\x80\x9d in his defense and that he was told that the\nobligation to disclose the children\'s location arose only if the children were alive, the district\ncourt held that \xe2\x80\x9cunder the circumstances, Mecca\xe2\x80\x99s failure to advise petitioner of all possible\nadverse consequences was not unreasonable.\xe2\x80\x9d We believe this holding is inconsistent with the\nconsultation requirement because it does not attach sufficient importance to the role that an\nattorney\'s advice plays in the attorney-client relationship. It is not enough, as the district court\nsuggests, that McClure \xe2\x80\x9cdid not dissuade Mecca from his intentions\xe2\x80\x9d to share the map with\nauthorities. The onus is not on the client to perceive the legal risks himself and then to dissuade\nhis attorney from a particular course of action. The district court\xe2\x80\x99s statement that Mecca was\nrelieved of his duty to counsel his client because \xe2\x80\x9ccommon sense dictated that petitioner\nunderstood the consequences of his actions\xe2\x80\x9d fails to acknowledge the seriousness of those\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c405\nconsequences and the importance of good counsel regarding them. Even in cases in which the\nnegative ramifications seem obvious \xe2\x80\x94 for example, when criminal defendants opt for selfrepresentation \xe2\x80\x94 we require that a criminal defendant\'s decision be made on the basis of legal\nguidance and with full cautionary explanation. We disagree with the district court\xe2\x80\x99s conclusion\nthat this case was so exceptional that the attorney\xe2\x80\x99s basic consultation duties did not apply. It is\nprecisely because the stakes were so high that Mecca had an obligation to consult carefully with\nhis client. In the absence of some other exception to the duty of confidentiality, his failure to\nobtain informed consent would demonstrate constitutionally deficient performance under the\nSixth Amendment.\n2. Prevention of Further Criminal Acts\nThe State contends that, even if Mecca did not have informed consent, his revelation of client\nconfidences did not amount to ineffective assistance of counsel because he reasonably\nbelieved that disclosing the location of the children was necessary in order to prevent further\ncriminal acts. That is, Mecca reasonably believed that revealing the children\'s locations could\nhave prevented the escalation of kidnapping to murder. This is not a traditional \xe2\x80\x9cprevention of\nfurther criminal acts\xe2\x80\x9d case, because all of the affirmative criminal acts performed by McClure\nhad been completed at the time Mecca made his disclosure. Mecca was thus acting to prevent\nan earlier criminal act from being transformed by the passage of time into a more serious\ncriminal offense. Nonetheless, we believe that where an attorney\xe2\x80\x99s or a client\xe2\x80\x99s omission to act\ncould result in \xe2\x80\x9cimminent death or substantial bodily harm\xe2\x80\x9d constituting a separate and more\nsevere crime from the one already committed, the exception to the duty of confidentiality may be\ntriggered.\nThis exception, however, requires that an attorney reveal confidences only to the extent that he\n\xe2\x80\x9creasonably believes necessary to prevent\xe2\x80\x9d those criminal acts and imminent harms. In\nassessing the effectiveness of McClure\xe2\x80\x99s counsel in light of this standard, the first step is to\ndetermine what a constitutionally effective counsel should be required to do before making a\ndisclosure. That is, we must determine what basis the attorney had for believing that the\nprecondition to disclosure was present, and how much investigation he or she must have\nundertaken before it was \xe2\x80\x9creasonable\xe2\x80\x9d to \xe2\x80\x9cbelieve it necessary\xe2\x80\x9d to make the disclosure to\nprevent the harm. The second step is to apply that standard to the facts surrounding Mecca\'s\ndecision to disclose.\nThere is remarkably little case law addressing the first analytical step. Citing cases dealing with\na separate confidentiality exception allowing attorneys to reveal intended perjury on the part of\ntheir clients, McClure argues that a lawyer must have a \xe2\x80\x9cfirm factual basis\xe2\x80\x9d before adopting a\nbelief of impending criminal conduct. However, we are not persuaded that the perjury cases\nprovide the proper standard.\nMcClure is correct that our inquiry must acknowledge the importance of the confidential\nattorney-client relationship and the gravity of the harm that results from an unwarranted breach\nof that duty. However, the standard applied in the professional responsibility code asks only if\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c406\nthe attorney \xe2\x80\x9creasonably believes\xe2\x80\x9d disclosure is necessary to prevent the crime. Further, the\nStrickland standard likewise focuses on \xe2\x80\x9cwhether counsel\'s assistance was reasonable\nconsidering all the circumstances.\xe2\x80\x9d Accordingly, we hold that the guiding rule for purposes of the\nexception for preventing criminal acts is objective reasonableness in light of the surrounding\ncircumstances.\nReasonableness of belief may be strongly connected to adequacy of investigation or sufficiency\nof inquiry in the face of uncertainty. Significantly, as indicated above, Strickland explicitly\nimposes a duty on counsel \xe2\x80\x9cto make reasonable investigations or to make a reasonable\ndecision that makes particular investigations unnecessary.\xe2\x80\x9d In any ineffectiveness of counsel\ncase, \xe2\x80\x9ca particular decision not to investigate must be directly assessed for reasonableness in\nall the circumstances, applying a heavy measure of deference to counsel\'s judgments.\xe2\x80\x9d Thus, in\ndetermining whether Mecca\xe2\x80\x99s disclosure of confidential client information constituted ineffective\nassistance of counsel, we must examine whether Mecca \xe2\x80\x9creasonably believed\xe2\x80\x9d that the\nprecondition for disclosure existed and whether, in coming to that belief, Mecca conducted a\nreasonable investigation and inquiry.\nThe parties vigorously debate both the reasonableness of Mecca\xe2\x80\x99s belief that the children were\nalive and the reasonableness of his level of investigation and inquiry on that point. McClure\nargues that any conclusion that Mecca had a reasonable belief is unsupported because Mecca\nhimself indicated that he harbored doubts as to the children\'s state, and yet failed to inquire\nfurther. He points to evidence in the record that Mecca, at least at some stages of his\nrepresentation of McClure, did not believe the children were alive\xe2\x80\x94or that he, at the least,\nsuspected that they were dead. It is indisputable that this evidence exists, and that most of this\nevidence is contained in statements by Mecca himself, whom the district court found \xe2\x80\x9chighly\ncredible.\xe2\x80\x9d Mecca\xe2\x80\x99s notes state that, after McClure drew the map, Mecca \xe2\x80\x9cfelt in my own mind\nthat the children were dead, but, of course, I wasn\xe2\x80\x99t sure.\xe2\x80\x9d He testified in the district court\nevidentiary hearing that the conclusion he came to was that, \xe2\x80\x9cwithout telling me, McClure had\ntold me he had killed three people.\xe2\x80\x9d And he stated in this same testimony that, at the time he\nhad his secretary place the anonymous call, he thought there was a \xe2\x80\x9cpossibility,\xe2\x80\x9d but not a\n\xe2\x80\x9cstrong possibility,\xe2\x80\x9d that the children were alive.\nMcClure argues that the statement Mecca says abruptly changed his mind about the status of\nthe children \xe2\x80\x94 McClure\'s comment that \xe2\x80\x9cJesus saved the kids\xe2\x80\x9d \xe2\x80\x94 was so vague and ambiguous\nthat it was not a sufficient basis for a \xe2\x80\x9creasonable belief\xe2\x80\x9d that disclosure was necessary. Despite\nMecca\xe2\x80\x99s acknowledgment that this comment led him only to \xe2\x80\x9cassume\xe2\x80\x9d that McClure was saying\nthe children were alive, Mecca never directly asked a question that could have confirmed or\nrefuted that assumption. Mecca repeatedly testified that he never squarely asked about the\ncondition of the children or whether McClure had killed them. Accordingly, McClure argues, any\nfinding that Mecca believed the children were alive is not sufficient to establish effective\nassistance of counsel, because Mecca\'s failure to engage in a reasonable level of investigation\nand inquiry rendered that belief unreasonable.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c407\nGiven the implicit factual findings of the state court, and the explicit factual findings of the district\ncourt, which are at least plausible in light of the record viewed in its entirety, we disagree. The\nultimate question of the reasonableness of Mecca\xe2\x80\x99s belief is a question of law, which we review\nde novo. In answering that question, however, we look to the facts and circumstances of the\ncase, and as to these facts, we give great deference to the findings of the state court and the\ndistrict court.\nThe district court made a number of specific findings regarding the factual basis for Mecca\xe2\x80\x99s\nbelief that the children were alive. It found that only McClure knew the true facts and that he\ndeliberately withheld them, leading Mecca to believe the children were alive. It found that\nMcClure controlled the flow of information, and that when Mecca informed McClure that he had\nan obligation to disclose the children\'s whereabouts if there were a chance they were alive,\nMcClure did not tell him they were dead. It specifically rejected McClure\xe2\x80\x99s assertion that Mecca\nin fact believed that the children were dead or that he lacked information that they were alive,\nnoting that at the time there was no evidence, other than their disappearance and the passage\nof time, that they had been injured or killed.\nThe district court also made specific factual findings regarding the nature of Mecca\xe2\x80\x99s\ninvestigation and inquiry. It found that \xe2\x80\x9cMecca attempted to discern whether the children were\nalive\xe2\x80\x9d and \xe2\x80\x9cthat Mecca investigated to the best of his ability under extremely difficult\ncircumstances.\xe2\x80\x9d McClure argues that these findings are clearly erroneous, and that \xe2\x80\x9carguments\nthat Mr. McClure was manipulative and difficult are essentially irrelevant to the lawyer\xe2\x80\x99s\nobligations.\xe2\x80\x9d But Strickland holds otherwise. The Strickland Court emphasized that \xe2\x80\x9cthe\nreasonableness of counsel\xe2\x80\x99s actions may be determined or substantially influenced by the\ndefendant\'s own statements or actions.\xe2\x80\x9d More specifically, it held that \xe2\x80\x9cwhat investigation\ndecisions are reasonable depends critically\xe2\x80\x9d on the \xe2\x80\x9cinformation supplied by the defendant.\xe2\x80\x9d\nThis is a close case, even after we give the required deference to the state and district courts.\nThe choices made by McClure\xe2\x80\x99s counsel give us significant pause, and, were we deciding this\ncase as an original matter, we might decide it differently. But we take as true the district court\xe2\x80\x99s\nspecific factual findings as to what transpired \xe2\x80\x94 including what McClure said and did, and what\nactions Mecca took and why he took them \xe2\x80\x94 and we conclude that Mecca made the disclosure\n\xe2\x80\x9creasonably believing it was necessary to prevent the client from committing a criminal act that\nMecca believed was likely to result in imminent death or substantial bodily harm.\xe2\x80\x9d Mecca\ntherefore did not violate the duty of confidentiality in a manner that rendered his assistance\nconstitutionally ineffective.\nConclusion\nFor the foregoing reasons, we conclude that McClure did not receive constitutionally ineffective\nassistance of counsel. Accordingly, the district court\'s denial of McClure\'s petition for writ of\nhabeas corpus is affirmed.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c408\n\n1. Do you agree with the court\xe2\x80\x99s conclusion that McClure did not provide informed consent\nto disclosure?\n2. Do you agree with the court\xe2\x80\x99s conclusion that Mecca reasonably believed that disclosure\ncould save the children?\n3. Should Mecca have disclosed the information under the circumstances? Should Mecca\nhave consulted with McClure about disclosure?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c409\n5.3: The Attorney-Client Privilege\nNobody knows, nobody sees. Nobody knows, but me.68\nThe \xe2\x80\x9cattorney-client privilege\xe2\x80\x9d is an evidentiary privilege that protects certain confidential\ncommunications between attorneys and their clients. Attorneys have a fiduciary duty of\nconfidentiality that prohibits them from disclosing any confidential client information unless their\nclient consents or they are required to disclose by law. The attorney-client privilege resembles\nthe duty of confidentiality, but provides broader protection for particular kinds of confidential\ncommunications.\nSpecifically, the attorney-client privilege applies to confidential attorney-client communications\nfor the purpose of obtaining legal advice. All confidential client information is protected by the\nduty of confidentiality, but only confidential attorney-client communications for the purpose of\nobtaining legal advice are protected by the attorney-client privilege.\nThe attorney-client privilege provides broader protection than the duty of confidentiality. The\ngovernment can require the disclosure of confidential client information in circumstances where\nit could not require the disclosure of privileged attorney-client communications. In fact, the\ngovernment can rarely require the disclosure of privileged information, and courts interpret the\nexceptions to attorney-client privilege quite narrowly. But they also interpret the scope of the\nattorney-client privilege quite strictly. The attorney-client privilege is quite strong, when it\napplies. But it only applies to certain kinds of communications, and it is easy to lose.\nTo begin with, the attorney-client privilege only protects confidential attorney-client\ncommunications. In other words, if a third-party receives the communication, then it is not\nprivileged, although it may still be confidential. So, if anyone other than the attorney and the\nclient participate in the communication, then it is not privileged.\nMoreover, the attorney-client privilege only covers communications for the purpose of obtaining\nlegal advice. If an attorney-client communication does not concern legal advice, then it is not\nprivileged, even if it is confidential. The attorney-client privilege does not cover business advice,\nor other non-legal advice.\nIn addition, the attorney-client privilege is easily destroyed. Like the duty of confidentiality, the\nattorney-client privilege belongs to the client, not the attorney. Accordingly, only the client can\nwaive the privilege, not the attorney. But the client waives the privilege by disclosing privileged\ninformation to a third-party, whether or not the client intended to waive the privilege. By contrast,\ninformation remains \xe2\x80\x9cconfidential\xe2\x80\x9d until it is \xe2\x80\x9cgenerally known.\xe2\x80\x9d\n\n68\n\nDanny Dill & Marijohn Wilkin, Long Black Veil (1959).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c410\nAttorneys should emphasize to their clients the fragility of the attorney-client privilege. Clients\nshould know that any disclosure to a third-party destroys the privilege, regardless of the context.\nSome courts have even held that inadvertent disclosure destroys the privilege.\nIdentifying Privileged Information\nThe definition of communications protected by the attorney-client privilege may differ slightly\nfrom jurisdiction to jurisdiction. However, as a general rule, information is protected by the\nattorney-client privilege only if:\n1. An attorney-client relationship existed when the communication occurred;\n2. The information was confidential and not shared with any third-parties; and\n3. The information was communicated for the purpose of obtaining legal advice.\nSo, the attorney-client privilege only applies to communications made in the context of an\nattorney-client relationship. Of course, the privilege applies whether the attorney-client\nrelationship is express or implied. But if no attorney-client relationship had formed or the\nattorney-client relationship had ended when the communication occurred, then the information\nis not privileged, although it may still be protected by the duty of confidentiality.\nIn addition, the attorney-client privilege only applies to information that is absolutely confidential.\nIf the information is disclosed to any third-parties, it is not privileged, although it may still be\nprotected by the duty of confidentiality. This limitation applies to third-parties who participate in\nthe initial communication as well as third-parties who receive the communication after the fact. If\na lawyer with whom the client lacks an attorney-client relationship receives the information, then\nit is not privileged. And if a non-lawyer who is not part of the attorney-client relationship receives\nthe information, then it is not privileged. Notably, the \xe2\x80\x9cjoint-defense privilege\xe2\x80\x9d or \xe2\x80\x9ccommon\ndefense rule\xe2\x80\x9d provides that joint defendants can share certain confidential information under\ncertain circumstances, without destroying the privilege.\nFinally, the attorney-client privilege only protects information communicated for the purpose of\nobtaining legal advice. Confidential communication between attorneys and clients for the\npurpose of obtaining non-legal advice are not privileged, although they may be protected by the\nduty of confidentiality. Attorneys often provide non-legal advice to their clients, especially when\nthose lawyers are employees of companies. Such non-legal advice is not protected by the\nattorney client privilege.\nThe attorney-client privilege belongs to the client, not the attorney. Accordingly, only the client\ncan waive the privilege. And clients can waive the privilege either intentionally or unintentionally.\nAttorneys should explicitly inform their clients that sharing privileged information with any thirdparty will destroy the privilege, and discourage their clients from sharing any privileged\ninformation without consultation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c411\nSometimes, attorneys or clients inadvertently disclose privileged information to third-parties.\nDifferent courts treat such disclosures differently. Some courts hold that accidental disclosure\ndoes not destroy the privilege, and that the recipient of the information must return or destroy it,\nand may not use it. Other courts hold that accidental disclosure does destroy the privilege. In\nthose courts, an attorney may accidentally destroy the privilege, even though the attorney lacks\nthe authority to waive the privilege.\nWhile the attorney-client privilege is quite strong, when it applies, there are certain exceptions to\nthe privilege.\nThere are a number of exceptions to the attorney-client privilege. Chief among them is the\n\xe2\x80\x9ccrime-fraud exception,\xe2\x80\x9d which provides that the privilege does not protect attorney-client\ncommunications made for the purpose of committing or furthering a crime, fraud, or tort.\nHowever, the exception applies only if the crime, fraud, or tort actually occurs. For example,\nconfidential communications between clients and attorneys for the purpose of determining\nwhether an action is a crime, fraud, or tort are protected by the privilege, so long as the crime,\nfraud, or tort in questions is not actually committed.\nThe Purpose Attorney-Client Privilege\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c412\n\nPeople v. Belge, 83 Misc. 2d 186 (NY County Court 1975)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c413\n\nSummary: Robert F. Garrow, Jr. was charged with murder and represented by Frank H.\nArmani and Francis R. Belge, who presented an insanity defense. In the course of\nrepresentation, Garrow disclosed three other murders to his attorneys. Based on\ninformation provided by Garrow, Belge discovered the body of one of the victims, but did\nnot disclose it to the police until the trial.\nOrmand N. Gale, J.\nIn the summer of 1973 Robert F. Garrow, Jr., stood charged in Hamilton County with the crime\nof murder. The defendant was assigned two attorneys, Frank H. Armani and Francis R. Belge. A\ndefense of insanity had been interposed by counsel for Mr. Garrow. During the course of the\ndiscussions between Garrow and his two counsel, three other murders were admitted by\nGarrow, one being in Onondaga County. On or about September of 1973 Mr. Belge conducted\nhis own investigation based upon what his client had told him and with the assistance of a friend\nthe location of the body of Alicia Hauck was found in Oakwood Cemetery in Syracuse. Mr.\nBelge personally inspected the body and was satisfied, presumably, that this was the Alicia\nHauck that his client had told him that he murdered.\nThis discovery was not disclosed to the authorities, but became public during the trial of Mr.\nGarrow in June of 1974, when to affirmatively establish the defense of insanity, these three\nother murders were brought before the jury by the defense in the Hamilton County trial. Public\nindignation reached the fever pitch, statements were made by the District Attorney of Onondaga\nCounty relative to the situation and he caused the Grand Jury of Onondaga County, then sitting,\nto conduct a thorough investigation. As a result of this investigation Frank Armani was no-billed\nby the Grand Jury but Indictment No. 75-55 was returned as against Francis R. Belge, Esq.,\naccusing him of having violated subdivision 1 of section 4200 of the Public Health Law, which, in\nessence, requires that a decent burial be accorded the dead, and section 4143 of the Public\nHealth Law, which, in essence, requires anyone knowing of the death of a person without\nmedical attendance, to report the same to the proper authorities. Defense counsel moves for a\ndismissal of the indictment on the grounds that a confidential, privileged communication existed\nbetween him and Mr. Garrow, which should excuse the attorney from making full disclosure to\nthe authorities.\nThe National Association of Criminal Defense Lawyers, as amicus curiae, succintly state the\nissue in the following language: If this indictment stands, \xe2\x80\x9cThe attorney-client privilege will be\neffectively destroyed. No defendant will be able to freely discuss the facts of his case with his\nattorney. No attorney will be able to listen to those facts without being faced with the Hobson\xe2\x80\x99s\nchoice of violating the law or violating his professional code of Ethics.\xe2\x80\x9d\nInitially in England the practice of law was not recognized as a profession, and certainly some\npeople are skeptics today. However, the practice of learned and capable men appearing before\nthe court on behalf of a friend or an acquaintance became more and more demanding.\nConsequently, the King granted a privilege to certain of these men to engage in such practice.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c414\nThere had to be rules governing their duties. These came to be known as \xe2\x80\x9cCanons.\xe2\x80\x9d The King\nhas, in this country, been substituted by a democracy, but the \xe2\x80\x9cCanons\xe2\x80\x9d are with us today,\nhaving been honed and refined over the years to meet the changes of time. Most are constantly\nbeing studied and revamped by the American Bar Association and by the bar associations of\nthe various States. While they are, for the most part, general by definition, they can be brought\nto bear in a particular situation. Among those is the following, cited in United States v. Funk:\n\xe2\x80\x9cConfidential communications between an attorney and his client are privileged from disclosure\nas a rule of necessity in the administration of justice.\xe2\x80\x9d\nIn the most recent issue of the New York State Bar Journal there is an article by Jack B.\nWeinstein, entitled \xe2\x80\x9cEducating Ethical Lawyers.\xe2\x80\x9d In a subcaption to this article is the following\nlanguage which is pertinent: \xe2\x80\x9cThe most difficult ethical dilemmas result from the frequent\nconflicts between the obligation to one\xe2\x80\x99s client and those to the legal system and to society. It is\nin this area that legal education has its greatest responsibility, and can have its greatest effects.\xe2\x80\x9d\nIn the course of his article Mr. Weinstein states that there are three major types of pressure\nfacing a practicing lawyer. He uses the following language to describe these: \xe2\x80\x9cFirst, there are\nthose that originate in the attorney\xe2\x80\x99s search for his own wellbeing. Second, pressures arise from\nthe attorney\xe2\x80\x99s obligation to his client. Third, the lawyer has certain obligations to the courts, the\nlegal system, and society in general.\xe2\x80\x9d\nOur system of criminal justice is an adversary system and the interests of the State are not\nabsolute, or even paramount. \xe2\x80\x9cThe dignity of the individual is respected to the point that even\nwhen the citizen is known by the state to have committed a heinous offense, the individual is\nnevertheless accorded such rights as counsel, trial by jury, due process, and the privilege\nagainst self incrimination.\xe2\x80\x9d\nA trial is in part a search for truth, but it is only partly a search for truth. The mantle of innocence\nis flung over the defendant to such an extent that he is safeguarded by rules of evidence which\nfrequently keep out absolute truth, much to the chagrin of juries. Nevertheless, this has been a\npart of our system since our laws were taken from the laws of England and over these many\nyears has been found to best protect a balance between the rights of the individual and the\nrights of society.\nThe concept of the right to counsel has again been with us for a long time, but since the\ndecision of Gideon v. Wainwright, it has been extended more and more so that at the present\ntime a defendant is entitled to have counsel at a parole hearing or a probation violation hearing.\nThe effectiveness of counsel is only as great as the confidentiality of its client-attorney\nrelationship. If the lawyer cannot get all the facts about the case, he can only give his client half\nof a defense. This, of necessity, involves the client telling his attorney everything remotely\nconnected with the crime.\nApparently, in the instant case, after analyzing all the evidence, and after hearing of the bizarre\nepisodes in the life of their client, they decided that the only possibility of salvation was in a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c415\ndefense of insanity. For the client to disclose not only everything about this particular crime but\nalso everything about other crimes which might have a bearing upon his defense, requires the\nstrictest confidence in, and on the part of, the attorney.\nWhen the facts of the other homicides became public, as a result of the defendant\xe2\x80\x99s testimony\nto substantiate his claim of insanity, \xe2\x80\x9cMembers of the public were shocked at the apparent\ncallousness of these lawyers, whose conduct was seen as typifying the unhealthy lack of\nconcern of most lawyers with the public interest and with simple decency.\xe2\x80\x9d A hue and cry went\nup from the press and other news media suggesting that the attorneys should be found guilty of\nsuch crimes as obstruction of justice or becoming an accomplice after the fact. From a layman\xe2\x80\x99s\nstandpoint, this certainly was a logical conclusion. However, the Constitution of the United\nStates of America attempts to preserve the dignity of the individual and to do that guarantees\nhim the services of an attorney who will bring to the Bar and to the Bench every conceivable\nprotection from the inroads of the State against such rights as are vested in the Constitution for\none accused of crime. Among those substantial constitutional rights is that a defendant does not\nhave to incriminate himself. His attorneys were bound to uphold that concept and maintain what\nhas been called a sacred trust of confidentiality.\nThe following language from the brief of the amicus curiae further points up the statements just\nmade: \xe2\x80\x9cThe client\'s Fifth Amendment rights cannot be violated by his attorney. There is no\nviable distinction between the personal papers and criminal evidence in the hands or mind of\nthe client. Because the discovery of the body of Alicia Hauck would have presented \xe2\x80\x98a\nsignificant link in a chain of evidence tending to establish his guilt,\xe2\x80\x99 Garrow was constitutionally\nexempt from any statutory requirement to disclose the location of the body. And Attorney Belge,\nas Garrow\xe2\x80\x99s attorney, was not only equally exempt, but under a positive stricture precluding\nsuch disclosure. Garrow, although constitutionally privileged against a requirement of\ncompulsory disclosure, was free to make such a revelation if he chose to do so. Attorney Belge\nwas affirmatively required to withhold disclosure. The criminal defendant\xe2\x80\x99s self-incrimination\nrights become completely nugatory if compulsory disclosure can be exacted through his\nattorney.\xe2\x80\x9d\nIn the recent and landmark case of United States v. Nixon the court stated: \xe2\x80\x9cthe constitutional\nneed for production of relevant evidence in a criminal proceeding is specific and neutral to the\nfair adjudication of a particular criminal case in the administration of justice. Without access to\nspecific facts a criminal prosecution may be totally frustrated.\xe2\x80\x9d In the case at bar we must weigh\nthe importance of the general privilege of confidentiality in the performance of the defendant\xe2\x80\x99s\nduties as an attorney, against the inroads of such a privilege on the fair administration of\ncriminal justice as well as the heart tearing that went on in the victim\'s family by reason of their\nuncertainty as to the whereabouts of Alicia Hauck. In this type situation the court must balance\nthe rights of the individual against the rights of society as a whole. There is no question but\nAttorney Belge\xe2\x80\x99s failure to bring to the attention of the authorities the whereabouts of Alicia\nHauck when he first verified it, prevented bringing Garrow to the immediate bar of justice for this\nparticular murder. This was in a sense, obstruction of justice. This duty, I am sure, loomed large\nin the mind of Attorney Belge. However, against this was the Fifth Amendment right of his client,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c416\nGarrow, not to incriminate himself. If the Grand Jury had returned an indictment charging Mr.\nBelge with obstruction of justice under a proper statute, the work of this court would have been\nmuch more difficult than it is.\nThere must always be a conflict between the obstruction of the administration of criminal justice\nand the preservation of the right against self incrimination which permeates the mind of the\nattorney as the alter ego of his client. But that is not the situation before this court. We have the\nFifth Amendment right, derived from the Constitution, on the one hand, as against the trivia of a\npseudo-criminal statute on the other, which has seldom been brought into play. Clearly the latter\nis completely out of focus when placed alongside the client-attorney privilege. An examination of\nthe Grand Jury testimony sheds little light on their reasoning. The testimony of Mr. Armani\nadded nothing new to the facts as already presented to the Grand Jury. He and Mr. Belge were\ncocounsel. Both were answerable to the Canons of professional ethics. The Grand Jury chose\nto indict one and not the other. It appears as if that body were grasping at straws.\nIt is the decision of this court that Francis R. Belge conducted himself as an officer of the court\nwith all the zeal at his command to protect the constitutional rights of his client. Both on the\ngrounds of a privileged communication and in the interests of justice the indictment is\ndismissed.\nQuestions:\n1. You may find this video about the People v. Belge case interesting.\n2. Why did the court hold that the attorney-client privilege superseded the criminal law\nrequiring Belge to disclose the location of the victim\xe2\x80\x99s body? Do you agree?\n3. What if Garrow had not been convicted of any other crime? Would the attorney-client\nprivilege have prevented Belge from disclosing the location of the victim\xe2\x80\x99s body\nindefinitely?\n4. What if Belge had reason to believe the victim was still alive? Would the privilege have\nprevented him from disclosing the victim\xe2\x80\x99s location?\nThe Scope of the Attorney-Client Privilege\nColton v. United States, 306 F. 2d 633 (2d Cir. 1962)\nSummary: Attorney Edward E. Colton represented Herbert and Mercedes Matter in\nrelation to their taxes. The IRS began an investigation of the Matters, and asked Colton\nto provide testimony and relevant documents. Colton refused, citing the attorney-client\nprivilege. The district court ordered Colton to answer certain questions and produce\ncertain documents, and the circuit court affirmed, holding that those questions and\ndocuments were not privileged.\nLUMBARD, Chief Judge.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c417\nThese appeals raise questions concerning the propriety of a virtually complete refusal by tax\ncounsel, primarily on the ground of the attorney-client privilege, to answer questions and\nproduce files at an examination conducted by special agents of the Internal Revenue Service\nconcerning the tax liability of a client. We hold that it was proper to require counsel to answer\nquestions concerning the years during which they performed legal services and the general\nnature of the services. We also affirm the order requiring counsel to produce certain documents\nor files and to answer relevant questions concerning the nature of papers in their possession.\nAt some time prior to July 29, 1960, the Internal Revenue Service began an investigation into\nthe tax liabilities of Herbert Matter and his wife, Mercedes, apparently with a view to possible\ncriminal prosecution. On July 29, 1960, the Service served identical summonses upon Edward\nE. Colton, an attorney, and Lillian Kaltman, an attorney associated with Mr. Colton, directing\nthem to appear in New York City before special agent Anton Kurtzuk on August 9, 1960 to give\ntestimony and to bring with them and produce \xe2\x80\x9cretained copies of income tax returns,\nworkpapers, correspondence files, memoranda and all other data relating to the preparation and\nthe filing of Federal Income Tax Returns for or on the behalf of the Matters covering and\nincluding the years 1951 through 1958.\xe2\x80\x9d The appellants state, and the government does not\ndeny, that special agent Kurtzuk informed Miss Kaltman that \xe2\x80\x9che wished to question the\nattorneys about the reasons which the taxpayers gave their counsel for filing certain tax returns\nlate\xe2\x80\x9d; an affidavit submitted by agent Kurtzuk below states the primary purpose of the\ninvestigation in similar language. The Service later consented to the adjournment of the return\ndate of the summonses to September 21, 1960.\nOn September 20, 1960, the appellants obtained from the district court an order requiring the\ngovernment to show cause why the summonses should not be quashed or modified and staying\ncompliance. The appellants stated that \xe2\x80\x9cthe subject matter of Mr. Kurtzuk\xe2\x80\x99s proposed inquiry\nwould so flagrantly induce a violation of their duty to the taxpayers arising out of the relationship\nof attorney and client that this petition was deemed necessary by the petitioners.\xe2\x80\x9d Pending the\nhearing of the petition, the appellants entered into a stipulation with the government that the\nabove quoted portion of the summonses be amended to add the phrase \xe2\x80\x9cexcept for such\nportions of said testimony and production that are within the attorney-client privilege.\xe2\x80\x9d Pursuant\nto further terms of the stipulation the appellants appeared to testify on November 23, 1960; the\nstipulation provided that if the appearance was not accepted by the Service as adequate\ncompliance with the summonses, then the petition to quash should proceed for hearing in the\ndistrict court.\nAt the November 23 hearing, Mr. Colton and Miss Kaltman testified only that the Matters were\nclients of their firm, refusing to give any substantial information as to the firm\xe2\x80\x99s role, if any, in\npreparing the tax returns in question. They had with them records of the firm pertaining to the\nMatters, but refused to turn them over to the agents for examination without the consent of the\nMatters. Virtually all of the questions asked by the agents were objected to on the basis of the\nattorney-client privilege. Dissatisfied with the results of the hearing, the government caused the\nappellants\xe2\x80\x99 pending motion to quash to come on for hearing in the district court, on February 28,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c418\n1961. Judge Dawson denied the motion and vacated the stay without opinion, and Mr. Colton\nand Miss Kaltman filed their notice of appeal to this court.\nApparently the Internal Revenue Service requested Colton to return for further questioning and\nhe refused. The Service on March 7, 1961 served on Colton alone a new summons in\nsubstance identical to the earlier ones as modified by the stipulation. Colton again appeared on\nMarch 24, 1961, in response to this second summons, but gave the Service no more\nsatisfaction than he had at his first appearance, again declining on the basis of the attorneyclient privilege to answer certain questions concerning tax work his firm might have done for the\nMatters.\nColton now offers to answer by affidavit thirteen of the questions he objected to at the March 24,\n1961 hearing, and the government has accepted the offer, making the appeal moot insofar as\nthese questions are concerned. The remaining questions, all of which were objected to as\ninfringing upon the attorney-client privilege, may be grouped under two general headings: those\ninquiring into the date and nature of the services performed by the Colton firm for the Matters,\nand those relating to the files of the firm which the Service sought to have Mr. Colton turn over\nto it.\nThose questions which pertain to the date and general nature of the legal services performed by\nthe Colton firm for the Matters should be answered as they do not call for any confidential\ncommunication. The question numbered 16 in the Internal Revenue Service\'s transcript of the\nhearing, although ambiguous,69 appears to inquire whether in 1951 the firm performed any\nservices for the Matters other than the preparation of income tax returns. (Colton now agrees to\nanswer the preceding question, which asked whether or not the firm had prepared, or caused to\nbe prepared, a 1951 tax return.) Question 18 asked Colton to state the nature of the services he\nadmitted to having rendered the Matters in the years prior to 1951. In directing Colton to answer\nthis question, Judge Metzner limited the required information to \xe2\x80\x9cgeneral responses, such as\n\xe2\x80\x98litigation,\xe2\x80\x99 \xe2\x80\x98drafting of documents,\xe2\x80\x99 \xe2\x80\x98tax advice\xe2\x80\x99 and the like,\xe2\x80\x9d thus excluding inquiry into specific\ndetails; since the government does not here contest this interpretation, the question remains so\nlimited for our purposes. Questions 52 and 54 inquire whether the firm performed any legal\nservices for the Matters during 1954, 1955, 1956 and 1957. Question 55 asks whether the firm\nreceived \xe2\x80\x9cany remunerations\xe2\x80\x9d for legal services during those four years. Finally, Question 80\nasks, \xe2\x80\x9cDid you or any member of your firm cause to have prepared a 1953 income tax return for\nor on behalf of Herbert and Mercedes Matter in 1954?\xe2\x80\x9d\nThis court has accepted, and few if any lawyers would quarrel with, Dean Wigmore\'s statement\nof the basic principle underlying the attorney-client privilege:\nIn order to promote freedom of consultation of legal advisers by clients, the\napprehension of compelled disclosure by the legal advisers must be removed; hence the\nlaw must prohibit such disclosure except on the client\xe2\x80\x99s consent.\n69\n\n16. Q. Did you or any member of your firm perform any services, other than the preparation of income\ntax returns for the year 1951 for Herbert and/or Mercedes Matter?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c419\n\nIt cannot be seriously argued that this policy justifies any member of the bar from refusing to\ntestify as to all transactions he may have had with any person whom he chooses to designate a\n\xe2\x80\x9cclient.\xe2\x80\x9d Thus, according to Judge Wyzanski\xe2\x80\x99s much quoted formulation, it must be shown that:\n(1) the asserted holder of the privilege is or sought to become a client; (2) the person to\nwhom the communication was made (a) is a member of the bar of a court, or his\nsubordinate and (b) in connection with this communication is acting as a lawyer; (3) the\ncommunication relates to a fact of which the attorney was informed (a) by his client (b)\nwithout the presence of strangers (c) for the purpose of securing primarily either (i) an\nopinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not\n(d) for the purpose of committing a crime or tort; and (4) the privilege has been (a)\nclaimed and (b) not waived by the client.\nThere can, of course, be no question that the giving of tax advice and the preparation of tax\nreturns \xe2\x80\x94 which unquestionably constituted a very substantial part of the legal services\nrendered the Matters by the Colton firm \xe2\x80\x94 are basically matters sufficiently within the\nprofessional competence of an attorney to make them prima facie subject to the attorney-client\nprivilege. But, although the word \xe2\x80\x9ccommunications\xe2\x80\x9d must be broadly interpreted in this context,\nthe authorities are clear that the privilege extends essentially only to the substance of matters\ncommunicated to an attorney in professional confidence. Thus the identity of a client, or the fact\nthat a given individual has become a client are matters which an attorney normally may not\nrefuse to disclose, even though the fact of having retained counsel may be used as evidence\nagainst the client. To be sure, there may be circumstances under which the identification of a\nclient may amount to the prejudicial disclosure of a confidential communication, as where the\nsubstance of a disclosure has already been revealed but not its source.\nWe find, however, no such special circumstances in the case at bar. Nor was the permissible\ninquiry in this regard ended when Colton stated that the Matters were his clients and had been\nfor some time. The principle that permits inquiry into the existence of a professional relationship\nobviously also permits questioning as to the years during which the relationship has continued.\nThus, under the accepted doctrine, there was no basis for Colton\xe2\x80\x99s refusal to answer Questions\n52 and 54.\nFor similar reasons there was no basis for Colton\xe2\x80\x99s refusal to state, in answer to Question 55,\nwhether he had received any remuneration from the Matters for legal services rendered during\nthe years 1954 through 1957. Although no question as to the relevancy of the matters inquired\ninto is before us, we note that the government states that this question is relevant to a\ndetermination whether the attorney-client relationship actually existed, as well as to the propriety\nof deductions for legal fees taken by the taxpayers in their returns for those years. Such matters\nare surely relevant, and \xe2\x80\x94 in the absence of allegations as to special circumstances \xe2\x80\x94 we see\nno reason why an attorney should be any less subject to questioning about fees received from a\ntaxpayer than should any other person who has dealt with the taxpayer. There is no further\nencroachment here upon any confidential relationship than there is in questioning about the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c420\nexistence or date of the relationship. All these matters are quite separate and apart from the\nsubstance of anything that the client may have revealed to the attorney.\nMoreover, a determination whether Colton rendered legal services to the Matters in a given year\nis proper as a basis for obtaining further unprivileged information from him. Not all\ncommunications between an attorney and his client are privileged. Particularly in the case of an\nattorney preparing a tax return (as the questioning agent attempted to establish Colton did for\nthe Matters), a good deal of information transmitted to an attorney by a client is not intended to\nbe confidential, but rather is given for transmittal by the attorney to others \xe2\x80\x94 for example, for\ninclusion in the tax return. Such information is, of course, not privileged.\nIt was also proper for agent Kurtzuk, in Questions 16 and 18, to inquire into the nature of the\n\xe2\x80\x9clegal services\xe2\x80\x9d rendered by Colton. Attorneys frequently give to their clients business or other\nadvice which, at least insofar as it can be separated from their essentially professional legal\nservices, gives rise to no privilege whatever. Indeed, Colton admitted at the Service hearing that\nhe sometimes gave \xe2\x80\x9ca little investment advice\xe2\x80\x9d to his clients. Because Colton\'s work for the\nMatters \xe2\x80\x94 both legal and non-legal \xe2\x80\x94 may thus have involved unprivileged communications\nwith them, it is proper for the Service in its search for unprivileged matters not only to inquire\ninto the years during which he rendered \xe2\x80\x9clegal services\xe2\x80\x9d but also to explore, as it does in\nQuestions 16 and 18, to some extent the nature of the services rendered. These questions are\nappropriate to a determination of what, if any, areas may be inquired into further and what is\nprotected by the attorney-client privilege. Judge Metzner excluded detailed inquiry into the work\ndone. Although it would be inappropriate for us to speculate regarding those questions which\nmight properly be asked in this area, we note that some restriction may be necessary to protect\nthe privilege and that none of the possible responses called for by Question 18 as now limited\nwould reveal anything which could be regarded as a communication within the meaning of the\nprivilege doctrine. Nor do we find anything in Question 80 which calls for the revelation of any\ncommunication by the Matters.\n2. The remaining questions, which pertain to documents and files, can be subdivided into two\ncategories. The colloquy relating to Questions 22, 73, 74 and 75 reflects Colton\xe2\x80\x99s total refusal,\non grounds of the attorney-client privilege, to produce \xe2\x80\x9cretained copies of income tax returns,\nworkpapers, correspondence, memoranda and all other data pertaining to the preparation and\nfiling of the returns in question\xe2\x80\x9d and the fact that before and after the first hearing before the\nService the firm had returned some of these papers to the Matters. The remaining questions\ninquire into the general nature of the papers presently or formerly in the firm\'s possession.\nJudge Metzner ordered Colton to answer this last group of questions concerning the nature of\nthe papers, and held that the privilege did not justify a blanket refusal to produce those\ndocuments and files still in the firm\xe2\x80\x99s possession. He did not require Colton to make any efforts\nto recapture any papers no longer in the firm\'s possession, and the government makes no\ncontention here that he should have. The judge apparently also held, and in any event the\ngovernment now concedes, that the privilege is still available to Colton to the extent of\npermitting him to withhold any particular confidential papers which were \xe2\x80\x9cspecifically prepared\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c421\nby the client for the purpose of consultation with his attorney\xe2\x80\x9d and any of the firm\xe2\x80\x99s memoranda\nand worksheets \xe2\x80\x9cto the extent of any unpublished expression made by an attorney therein of\nconfidences which had passed between him and his clients.\xe2\x80\x9d\nIt is self-evident that individual documents and files may still be withheld insofar as they thus are\nor report confidential communications between Colton and his clients, the Matters. Documentary\nevidence of confidential communications is necessarily privileged as much as testimonial\nevidence. Moreover, if a proper showing is made, Colton will be able to raise the Matters\xe2\x80\x99\nprivilege against self-incrimination as a basis for refusing to produce any independently preexisting records or other documents turned over to the firm by the Matters if the Matters could\nhave refused to produce them under that privilege.\nClearly Colton\xe2\x80\x99s blanket refusal on the grounds of the attorney-client privilege to produce\nanything was unjustified. As we have noted, the attorney-client privilege protects only those\npapers prepared by the client for the purpose of confidential communication to the attorney or\nby the attorney to record confidential communications, and Colton has not made the necessary\nshowing that the papers he refused to produce are of such nature.\nInsofar as the papers include pre-existing documents and financial records not prepared by the\nMatters for the purpose of communicating with their lawyers in confidence, their contents have\nacquired no special protection from the simple fact of being turned over to an attorney. It is only\nif the client could have refused to produce such papers that the attorney may do so when they\nhave passed into his possession. Any other rule would permit a person to prevent disclosure of\nany of his papers by the simple expedient of keeping them in the possession of his attorney.\nAppellant admits in his brief that statements, correspondence, and documents received from\nthird parties are not protected by the attorney-client privilege, and the principle is obvious. He\nargues, however, that in any event such papers are wholly unavailable to the government under\nthe \xe2\x80\x9cwork product\xe2\x80\x9d rule which the Supreme Court in Hickman v. Taylor held justified an\nattorney\xe2\x80\x99s refusal to permit discovery in a civil case of statements obtained by him from\nprospective witnesses. We need not reach the government\xe2\x80\x99s contention that the work-product\nrule is inapplicable to such administrative investigations as that conducted by the Internal\nRevenue Service here, because Colton has made no suggestion that any of the papers involved\nwere collected or prepared in anticipation of litigation, as must be shown to justify invocation of\nthis rule.\nBecause Colton was unjustified in his blanket refusal to produce all of his firm\'s papers\nconcerning the Matters, it was, of course, appropriate for agent Kurtzuk to question him at the\nhearing concerning the nature of the papers in order to determine which of them were and\nwhich were not privileged. All of the remaining questions are relevant to the government\xe2\x80\x99s\nproper attempt to uncover papers not protected under the attorney-client privilege. Questions\n23, 25 and 76 have the identical purpose of trying to find out whether the firm\xe2\x80\x99s files contain\ndocuments received from or correspondence with third parties. We have already noted that\npapers received from third parties are unprivileged and no theory has been presented on which\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c422\ncommunications from an attorney to a third party are privileged. Question 65 inquires whether\nthe firm\xe2\x80\x99s \xe2\x80\x9cpapers contained retained copies of Herbert and Mercedes Matter\xe2\x80\x99s income tax\nreturns\xe2\x80\x9d for the relevant years. Such copies would be unprivileged as not confidential because\nby definition they contain no information that was not intended to be given to the Internal\nRevenue Service. None of these questions call for any information which could possibly reveal\nprotected communications. Thus these questions must be answered and the materials they\nrefer to must be produced.\nQuestions:\n1. Why did the court find information relating to the date and general nature of the legal\nservices provided by Colton to the Matters was not privileged? Do you agree?\n2. Why did the court found that the identity of a client is not privileged? Do you agree?\n3. Why did the court find that pre-existing documents provided to Colton were not\nprivileged? Could the government draw incriminating inferences from the fact the\nMatters provided those documents to Colton? Should that matter for the purpose of the\nattorney-client privilege?\nConfidentiality & Privilege\nX Corp. v. Doe, 805 F. Supp. 1298 (E.D. Va. 1992)\nELLIS, District Judge.\nFew problems are as vexing as determining what evidence justifies a lawyer\'s disclosure of a\nclient\xe2\x80\x99s confidential information and documents, which the lawyer believes reflect an ongoing or\nfuture crime or fraud. This case presents precisely this problem. Plaintiff, X Corp. brings this suit,\nin part, to prevent defendant, John Doe, X Corp.\xe2\x80\x99s former in-house counsel, from disclosing X\nCorp.\xe2\x80\x99s confidential information and documents retained by Doe following his discharge from X\nCorp. X Corp. also seeks return of the documents. In support of the relief sought, X Corp. cites\nthe attorney-client privilege, the parties\xe2\x80\x99 confidentiality agreement, and the lawyer\xe2\x80\x99s general duty\nto preserve a client\xe2\x80\x99s confidences. For his part, Doe claims that the documents in issue disclose\nongoing civil and criminal frauds perpetrated by X Corp. against the federal government. As\nsuch, according to Doe, the documents fall within the public policy crime-fraud exception to the\nattorney-client privilege and to any general or contractual duty of confidentiality.\nThe matter is before the Court on X Corp.\xe2\x80\x99s motion for a preliminary injunction. For the reasons\nstated here, the motion is granted in part and denied in part.\nFacts\nX Corp. hired Doe in March 1989 as a member of its in-house legal staff based in Northern\nCalifornia. Formerly an Associate Deputy Attorney General of the United States and Chief of\nStaff to the Attorney General, Doe was a member of the bar of the state of Pennsylvania. When\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c423\nhe was hired, Doe executed an \xe2\x80\x9cEmployment, Invention and Confidential Information\nAgreement,\xe2\x80\x9d in which he expressly agreed (i) to return to X Corp. all records obtained during, or\nin connection with, his employment and (ii) to preserve X Corp.\xe2\x80\x99s confidential information.\nThereafter, in the course of his employment, Doe regularly received confidential information\nfrom X Corp. management and its employees in order to provide legal opinions and advice.\nDuring approximately two years with X Corp., Doe apparently excelled; his professional\nperformance was regarded as excellent. Eventually he was promoted to Group Counsel with\nprimary responsibility worldwide for X Corp.\xe2\x80\x99s compliance with numerous government\nregulations and antitrust laws.\nIn November 1990, Doe was transferred from X Corp.\xe2\x80\x99s California office to Virginia as X Corp.\'s\nonly United States-based lawyer outside California. The parties sharply dispute the reason for\nthe transfer. In X Corp.\xe2\x80\x99s view, the transfer occurred because Doe failed the California bar\nexamination. Doe, on the other hand, asserts that he initiated the transfer to escape California\xe2\x80\x99s\nhigh cost of living and because he and his wife wanted to live closer to their relatives in Virginia.\nDoe also contends that X Corp. negotiated with him to retain his services because he was \xe2\x80\x9can\nimportant contributor and asset\xe2\x80\x9d and because X Corp. wanted to locate a regulatory and\nantitrust attorney near Washington, D.C.\nX Corp. terminated Doe\xe2\x80\x99s employment effective February 28, 1992, providing him with thirty-one\nweeks severance pay. The reason for Doe\xe2\x80\x99s discharge is as hotly disputed as the reason for the\ntransfer. X Corp. claims Doe was laid-off as part of a company-wide reduction in force involving\nover 700 employees. Doe counters, however, that he was unlawfully fired in retaliation for\nactions X Corp. believed he was taking in furtherance of a possible qui tam suit. On leaving X\nCorp.\xe2\x80\x99s employ, Doe took with him copies of certain documents and files, leaving the originals\nwith X Corp. Doe claims these documents reveal that X Corp. is defrauding the federal\ngovernment, in violation of the False Claims Act.\nX Corp.\xe2\x80\x99s complaint asserts breach of the Confidentiality Agreement. X Corp. claims that filing\nthis action was necessary to prevent disclosure of X Corp.\xe2\x80\x99s confidential information in the event\nDoe filed his draft complaint on the public record. That circumstance never materialized.\nFollowing oral argument, the Court took the matter under advisement. Doe, by counsel, agreed\nto refrain from further disclosures of X Corp.\xe2\x80\x99s claimed confidential information until the Court\'s\nruling.\nAnalysis\nWithout doubt, this litigation presents \xe2\x80\x9cgrave or serious questions,\xe2\x80\x9d questions involving difficult\nand troubling ethical issues arising in the context of attorney-client confidentiality. Few questions\nare graver or more serious in the practice of law than determining what evidence of crime or\nfraud justifies a lawyer\xe2\x80\x99s disclosure of his client\xe2\x80\x99s confidential information. Moreover, allegations\nof attorney misconduct, or even potential misconduct, engender significant and serious\nquestions of professional conduct critical to the client, to the accused attorney, and to the bar as\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c424\na whole. Such allegations, regardless of their veracity, erode the already fragile public\nconfidence in the legal profession and in the administration of justice. And it is undeniable that\nour legal system cannot function effectively unless the public has confidence in the integrity and\ncompetence of the system and its participants. Thus, it is paramount that lawyers understand\nand abide by settled and accepted norms of professional conduct. But even settled and\naccepted norms frequently provide inadequate or ambiguous guidance in the face of specific\nfactual circumstances. So it is here.\nThis litigation focuses on two professional standards of attorney confidentiality \xe2\x80\x94 (i) the\nevidentiary attorney-client privilege and (ii) the broader ethical duty of confidentiality \xe2\x80\x94 and their\napplication to the specific facts presented. Understanding the distinction between these two\nstandards is essential to the matter at bar. For that reason, it is worth describing them here in\nsome detail.\nThe first of these standards, the evidentiary attorney-client privilege, is quite familiar, and the\nprinciples associated with it are well-settled. This evidentiary privilege applies to disclosures of\ncertain types of confidences communicated between client and attorney during the course of the\nattorney\'s representation of the client. To prevent such disclosures, the client, through counsel\nor otherwise, may invoke the privilege. The purpose of the attorney-client privilege is to\nencourage full and frank communication between attorneys and their clients and thereby\npromote broader public interests in the observance of law and administration of justice. The\nprivilege recognizes that sound legal advice or advocacy serves public ends and that such\nadvice or advocacy depends upon the lawyer\'s being fully informed by the client.\nNevertheless, because it \xe2\x80\x9cimpedes the full and free discovery of the truth,\xe2\x80\x9d and is \xe2\x80\x9cin derogation\nof the public\xe2\x80\x99s \xe2\x80\x98right to every man\'s evidence,\xe2\x80\x99\xe2\x80\x9d the attorney-client privilege is not \xe2\x80\x9cfavored\xe2\x80\x9d by\nfederal courts. Accordingly, the privilege is narrowly construed to apply only to those situations\nin which the party invoking the privilege consulted an attorney for the purpose of securing a\nlegal opinion or services and in connection with that consultation communicated information\nintended to be kept confidential.\nThe evidentiary attorney-client privilege, while more familiar, is not the lawyer\xe2\x80\x99s only duty of\nconfidentiality to a client. Too often unrecognized is the broader ethical duty of an attorney to\npreserve a client\xe2\x80\x99s confidences and secrets that may fall outside the attorney-client privilege.\nThe leading case discussing this ethical duty is the Fifth Circuit\'s decision in Brennan\xe2\x80\x99s Inc. v.\nBrennan\xe2\x80\x99s Restaurants, Inc. There, defendants took the position that the attorney-client privilege\nbarred an attorney from further representation of a former joint client. The Fifth Circuit\ndisagreed, noting that \xe2\x80\x9cthe fundamental flaw in defendants\xe2\x80\x99 position is a confusion of the\nattorney-client evidentiary privilege with the ethical duty to preserve a client\'s confidences.\xe2\x80\x9d The\npanel held that although a former joint client could not assert the attorney-client privilege as to\nmatters encompassed by the former joint representation because confidences cannot arise\nbetween joint clients, a broader ethical duty protects joint clients. In this regard, the court stated:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c425\nInformation acquired from a client is sheltered from use by the attorney against his client\nby virtue of the existence of the attorney-client relationship. This is true without regard to\nwhether someone else may be privy to it. The obligation of an attorney not to misuse\ninformation acquired in the course of representation serves to vindicate the trust and\nreliance that client\'s place in their attorneys. A client would feel wronged if an opponent\nprevailed against him with the aid of an attorney who formerly represented the client in\nthe same matter this would undermine public confidence in the legal system as a means\nfor adjudicating disputes.\nAs the Fifth Circuit sensibly recognized in Brennan\xe2\x80\x99s, attorney confidentiality is essential to\nsustaining public confidence in the legal profession and the legal system. Clients therefore have\na right to enforce that confidentiality, absent specific circumstances abrogating that right. Of\ncourse, an attorney\xe2\x80\x99s duty to his client is limited by his duty to comply with the law and the\nstandards of professional conduct.\nConsistent with most jurisdictions, Virginia recognizes a broad duty of confidentiality in Canon 4\nof the Virginia Code of Professional Responsibility, which states: \xe2\x80\x9cA Lawyer Should Preserve\nthe Confidences and Secrets of a Client.\xe2\x80\x9d The corresponding Disciplinary Rules provide in\nrelevant part:\nDR4-101. Preservation of Confidences and Secrets of a Client. \xe2\x80\x94 (A) \xe2\x80\x9cConfidence\xe2\x80\x9d\nrefers to information protected by the attorney-client privilege under applicable law, and\n\xe2\x80\x9csecret\xe2\x80\x9d refers to other information gained in the professional relationship that the client\nhas requested be held inviolate or the disclosure of which would be embarrassing or\nwould be likely to be detrimental to the client.\n(B) Except as provided by DR 4-101(C) and (D), a lawyer shall not knowingly:\n(1) Reveal a confidence or secret of his client.\n(2) Use a confidence or secret of his client to the disadvantage of the client.\n(3) Use a confidence or secret of his client for the advantage of himself or a third person,\nunless the client consents after full disclosure.\nThus, mandatory Disciplinary Rule 4-101 defines two categories of protected information: (i) a\nnarrow category of \xe2\x80\x9cconfidences,\xe2\x80\x9d comprising information protected by the attorney-client\nprivilege, and (ii) a broader category of \xe2\x80\x9csecrets,\xe2\x80\x9d encompassing \xe2\x80\x9cother information gained in the\nprofessional relationship that the client has requested be held inviolate or the disclosure of\nwhich would be embarrassing or would be likely to be detrimental to the client.\xe2\x80\x9d In distinguishing\nbetween these two categories, Virginia has manifest its intention to protect from disclosure a\nrange of communications broader than that protected by the attorney-client privilege.\nConfidentiality of both categories of information must be maintained. Yet the duty of\nconfidentiality imposed by the Virginia Code of Professional Responsibility is not absolute. A\nlawyer may reveal confidences and secrets in specific circumstances.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c426\nYet despite its similar purpose, DR 4-101(C)(3) "clearly establishes\xe2\x80\x9d standard imposes a heavier\nburden on the party seeking disclosure than the prima facie standard of the crime-fraud\nexception to the attorney-client privilege. In other words, matters subject to the attorney-client\nprivilege seem to be less stringently protected from disclosure than matters subject to the\nethical privilege. This, at first blush, seems puzzling, indeed paradoxical, for one would think\nthat the attorney-client privilege deserves the greater protection. On reflection, however, the two\ndifferent standards make sense given that they apply in different contexts. Succinctly put, the\nevidentiary attorney-client privilege arises only where disclosures are sought to be compelled in\nsome litigation context, whereas the broader ethical duty arises in the context of voluntary or\nuncompelled disclosures, typically outside a litigation context. More particularly, the attorneyclient privilege is an evidentiary privilege applicable where someone seeks to compel an\nattorney or his client to reveal communications between lawyer and client made for the purpose\nof securing a legal opinion or legal services and intended to be kept confidential. Thus, the\nprivilege arises in the context of litigation and is therefore subject to discipline of the adversary\nprocess and the safeguard of judicial scrutiny, if the affected client invokes the privilege and the\nopposing party seeks to overcome it. Significantly, however, the evidentiary attorney-client\nprivilege does not control where disclosures occur, or potential disclosures are contemplated, in\ncircumstances involving uncompelled disclosure and no judicial scrutiny. In such circumstances,\nthe ethical duty \xe2\x80\x94 with its appropriately higher standard of protection against unwarranted\ndisclosure of suspected fraudulent activities \xe2\x80\x94 governs.\nGiven this, in proving its claim that Doe is obligated to maintain its confidences pursuant to the\nethical duty, X Corp. bears the initial burden of establishing that the duty exists and that the\ndisputed communications are subject to it. To do so, X Corp. must show, inter alia, that the\ncommunications sought to be protected are \xe2\x80\x9cconfidences\xe2\x80\x9d or \xe2\x80\x9csecrets\xe2\x80\x9d within the meaning of\nVirginia Code of Professional Responsibility DR4-101(A). If X Corp. carries this burden and\nestablishes that Doe is ethically bound not to disclose this material, the burden then shifts to\nDoe.\nConclusion\nIn sum, the Court concludes that plaintiff\xe2\x80\x99s motion for preliminary injunction should be granted in\npart and denied in part. Specifically, an appropriately tailored preliminary injunction will issue\nwith respect to disclosure of X Corp.\xe2\x80\x99s claimed confidential information and documents.\nQuestions:\n1. How is the duty of confidentiality different from the attorney-client privilege?\n2. Why did the court hold that the information at issue is covered by the duty of\nconfidentiality, rather than the attorney-client privilege?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c427\n5.4: Applying the Attorney-Client Privilege\nPay no mind to what they say, it doesn\xe2\x80\x99t matter anyway, our lips are sealed.70\nThe fiduciary duty of confidentiality protects confidential communications between attorneys and\ntheir clients, as described in the Model Rules of Professional Conduct. The attorney-client\nprivilege also protects certain confidential communications between attorneys and their clients,\nbut it is not described by the Model Rules of Professional Conduct. In contrast to the duty of\nconfidentiality, which imposes a fiduciary duty on attorneys, the attorney-client privilege is a\ncommon law doctrine that creates an evidentiary privilege for certain confidential attorney-client\ncommunications, specifically communications for the purpose of obtaining or providing legal\nadvice.\nThe attorney-client privilege was created by the courts, and its scope is defined by the courts.\nAccordingly, the attorney-client privilege differs from jurisdiction to jurisdiction. However, the\nRestatement of the Law Governing Lawyer describes the paradigmatic form of the attorneyclient privilege.\nFederal Rule of Evidence 501: Privilege in General\nThe common law - as interpreted by United States courts in the light of reason and experience governs a claim of privilege unless any of the following provides otherwise:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nthe United States Constitution;\na federal statute; or\nrules prescribed by the Supreme Court.\n\nBut in a civil case, state law governs privilege regarding a claim or defense for which state law\nsupplies the rule of decision.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 68 (2000): Attorney-Client Privilege\nExcept as otherwise provided in this Restatement, the attorney-client privilege may be invoked\nwith respect to:\n1. a communication\n2. made between privileged persons\n3. in confidence\n4. for the purpose of obtaining or providing legal assistance for the client.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 69 (2000): \xe2\x80\x9cCommunication\xe2\x80\x9d\n\n70\n\nThe Go-Gos, Our Lips Are Sealed, Beauty and the Beat (1981).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c428\nA communication within the meaning of \xc2\xa7 68 is any expression through which a privileged\nperson, as defined in \xc2\xa7 70, undertakes to convey information to another privileged person and\nany document or other record revealing such an expression.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 70 (2000): \xe2\x80\x9cPrivileged Persons\xe2\x80\x9d\nPrivileged persons within the meaning of \xc2\xa7 68 are the client (including a prospective client), the\nclient\'s lawyer, agents of either who facilitate communications between them, and agents of the\nlawyer who facilitate the representation.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 71 (2000): \xe2\x80\x9cIn Confidence\xe2\x80\x9d\nA communication is in confidence within the meaning of \xc2\xa7 68 if, at the time and in the\ncircumstances of the communication, the communicating person reasonably believes that no\none will learn the contents of the communication except a privileged person as defined in \xc2\xa7 70\nor another person with whom communications are protected under a similar privilege.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 72 (2000): Legal Assistance as the\nObject of a Privileged Communication\nA communication is made for the purpose of obtaining or providing legal assistance within the\nmeaning of \xc2\xa7 68 if it is made to or to assist a person:\n1. who is a lawyer or who the client or prospective client reasonably believes to be a\nlawyer; and\n2. whom the client or prospective client consults for the purpose of obtaining legal\nassistance.\nWho is a \xe2\x80\x9cPrivileged Person\xe2\x80\x9d?\nState v. Spell, 399 So. 2d 551 (La. 1981)\nSummary: Jenkins, an inmate of the prison, worked at the law library. Defendant argues\nthat Jenkins was acting as an attorney when the inculpatory statements were made.\nJenkins wasn\xe2\x80\x99t an attorney and didn\xe2\x80\x99t hold himself out as a lawyer. Defendant knew\nJenkins was not an attorney and voluntarily gave information to Jenkins. The\ncommunication is not subject to the attorney-client privilege.\nJASPER E. JONES, Justice Ad Hoc.\nThomas Rhuel Spell was charged by grand jury indictment with the crime of second degree\nmurder of Ricky Mire. On December 20, 1979 defendant was convicted before a jury of twelve\nby a vote of eleven to one. The defendant was sentenced to life imprisonment without eligibility\nfor parole, probation, or suspension of sentence for forty years.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c429\nDefendant appealed his conviction. While the case was pending on appeal, defendant filed a\nmotion for new trial based upon a contention that he had discovered new evidence which, if it\nhad been introduced at trial, would probably have changed the verdict of guilty. The defendant\'s\nnew trial motion contended that the new evidence could not have been discovered by him\nbefore or during the trial. This court remanded the case to the trial court for a hearing on\ndefendant\xe2\x80\x99s motion for a new trial.\nFollowing a hearing on the new trial motion the trial court denied the new trial. The case is now\nbefore this court on the merits of the appeal which were not considered before the remand.\nThe evidence at trial reflected the following facts:\nOn November 12, 1975, at about 4:00 p. m., Anthony Broussard was driving his car in the south\npart of Crowley, La. in the Parish of Acadia when he was stopped by defendant. Defendant\nasked Broussard to take him for a ride, and Broussard agreed to the request. Shortly after\nBroussard and defendant commenced their ride they observed Ricky Mire walking down the\nstreet. Defendant had Broussard stop and defendant went and talked to Mire. Mire returned to\nBroussard\xe2\x80\x99s car with defendant and got into the car with Broussard and defendant.\nAt defendant\'s direction Broussard drove to an isolated area in Crowley near a dried-up\ndrainage canal and stopped. Mire and defendant got out of the car, and while Mire was standing\nnear the front of the vehicle, defendant secured the car keys from Broussard, opened the trunk\nof the car and removed from it a tire tool. Mire and defendant then walked out of sight in the\ndirection of the drainage ditch. Defendant carried the tire tool with him as he left the vehicle.\nSoon after defendant and Mire disappeared from view Broussard got out of the car and went in\nsearch of them and found them a short distance away, apparently over the drainage ditch levee.\nBroussard observed defendant push Mire who was in front of him. Broussard then returned to\nhis car. After the elapse of about ten minutes defendant returned to Broussard\xe2\x80\x99s vehicle without\nMire and advised Broussard not to ask any questions and to return him to his car which he had\nleft at the point where he had entered Broussard\'s vehicle.\nBroussard did not see the tire tool in defendant\xe2\x80\x99s hands when he returned to the car, but he\nheard defendant drop it upon the floor. When the pair arrived back at defendant\xe2\x80\x99s car, defendant\ngot out of Broussard\xe2\x80\x99s car and the tire tool was not left in Broussard\xe2\x80\x99s vehicle. Broussard did not\nsee defendant take the tire tool out of his car.\nAt about 5:00 p. m. that afternoon, three horseback riders found Mire in the drainage ditch\napparently unconscious with his head and face covered with blood. There was a lot of blood on\nthe ground near Mire. They notified the sheriff\xe2\x80\x99s office who obtained an ambulance and carried\nMire to a Crowley hospital where his head was bandaged in the emergency room. The parish\ncoroner arrived at 6:30 p. m. and observed that Mire was in a critical condition and ordered his\nimmediate transfer to a Lafayette hospital where Mire died at 9:35 p. m. that night.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c430\nMire\xe2\x80\x99s body was returned to Crowley and examined by the parish coroner who testified he died\nfrom several head injuries that appeared to have been caused by a blunt instrument with a\nsharp end.\nASSIGNMENT OF ERROR\nDefendant contends that the trial judge erred in admitting over his objection the testimony of\nRonald Jenkins that defendant had told him he had killed the victim. Defendant contends that\nthese inculpatory statements were made to Jenkins in confidence and were therefore\ninadmissible. Jenkins, an inmate of the prison, was assigned to the law library to help other\nprisoners with their legal problems by writing letters, preparing pleadings, and otherwise giving\nthem whatever advice he could. Defendant contends that the information was a privileged\ncommunication because Jenkins was acting as an attorney in the law library at the Dixon\nCorrectional Institute when the inculpatory statements were made to him by defendant.\nDefendant cites no authority for his contention.\nJenkins was not an attorney and did not hold himself out as a lawyer. Defendant knew that\nJenkins was a fellow inmate in the prison and was not an attorney. He voluntarily gave the\ninformation to Jenkins. The communication is not subject to the attorney-client privilege. In the\ncase of State v. Lassai, the court rejected the contention that a communication given by the\ndefendant to a counselor at a drug abuse center was privileged where communications to\ncertified social workers are classified as privileged communication. The court there said:\nNor does the record disclose a privilege which would prevent the evidentiary use of an\nadmission by defendant to the director of counseling at the Euterpe Center; it was not\nshown that she was a social worker, and for that reason R.S. 37:2714 is not applicable.\nPrivileges are narrowly construed, and will not be extended to the counselor solely\nbecause she was \xe2\x80\x9cin the same position\xe2\x80\x9d as a physician or social worker.\nDefendant\xe2\x80\x99s inculpatory statements to Jenkins were not subject to any privilege.\nQuestions:\n1. What if Jenkins had been an imprisoned attorney?\n2. Can Jenkins effectively provide legal advice to the prisoners if their communications with\nhim are not privileged?\nJones v. US, 828 A. 2d 169 (DC App. 2003)\nSummary: The police contacted Stacy Jones about the murder of Darcie Silver, and\nasked for a DNA sample. Jones called his girlfriend, Tina Ducharme, an attorney\nemployed by the federal government, and asked her for advice. Later, Jones was\narrested and charged with murder. Ducharme testified at the trial. Jones argued that\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c431\ntheir telephone conversation was protected by the attorney-client privilege. The trial\ncourt disagreed, and the appellate court affirmed.\nTERRY, Associate Judge:\nAfter a jury trial, appellant was convicted of first-degree burglary, first-degree sexual abuse, firstdegree felony murder, and second-degree murder. On appeal he contends that the trial court\nerred when it ruled that the attorney-client privilege did not require the exclusion of testimony\nabout a conversation that appellant had with his girlfriend (at the time), who was an attorney\nemployed by the federal government. We affirm on the merits, and remand for the sole purpose\nof vacating a redundant conviction.\nI\nOn Saturday, March 23, 1996, at about 10:00 a.m., Metropolitan Police officers found Darcie\nSilver dead in her apartment after they received a call from her concerned co-workers reporting\nthat she had failed to show up for work. The medical examiner determined that the cause of\ndeath was asphyxia by strangulation; other injuries indicated that she might also have been\nsmothered. In addition, there were burns around her genital area; pieces of burned newspaper\nwere found in the vicinity of her crotch. A vaginal swab revealed the presence of male\ndeoxyribonucleic acid (DNA). In addition, investigators found semen stains on Ms. Silver\xe2\x80\x99s\nnightgown and on a denim jacket recovered from her apartment. The DNA evidence was later\nmatched to appellant through testing by the FBI.\nA police investigation revealed that on Friday evening, March 22, Ms. Silver had dinner with a\nco-worker from her job at Bread & Circus, a supermarket in the Georgetown area of the city.\nShe returned to her apartment at approximately 10:00 p.m. and spoke to her father on the\ntelephone from 10:47 p.m. on Friday until 12:03 a.m. on Saturday.\nTwo neighbors in Ms. Silver\xe2\x80\x99s apartment building heard a knocking at the front door of the\nbuilding at about 2:30 a.m. on Saturday. One of the neighbors looked out a window and saw a\n\xe2\x80\x9cstocky\xe2\x80\x9d man with a fair to medium complexion at the door. This description was similar to that\nof appellant, who is a weightlifter and bodybuilder. Both neighbors heard the man respond to the\nbuilding intercom using the name \xe2\x80\x9cDarcie.\xe2\x80\x9d They then heard him say that he had locked himself\nout of his apartment and needed to borrow a telephone. The intercom made a buzzing noise,\nwhich unlocked the front door, and the man walked upstairs to the area of Ms. Silver\xe2\x80\x99s\napartment. About fifteen minutes later, one neighbor heard a \xe2\x80\x9ccrash\xe2\x80\x9d coming from Silver\xe2\x80\x99s\napartment, and the other heard a loud \xe2\x80\x9cthump.\xe2\x80\x9d\nII\nAppellant\xe2\x80\x99s primary argument on appeal is that the court erred when it ruled that the attorneyclient privilege did not attach to a conversation that he had with his girlfriend at the time, Tina\nDucharme, who was also a lawyer.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c432\n\nAfter Darcie Silver was murdered, the police interviewed several employees, including\nappellant, at the Bread & Circus store where Ms. Silver worked. The police requested hair and\nblood samples from appellant, but he declined to give them. He told the police that his girlfriend\nwas a lawyer and that he \xe2\x80\x9cwanted to talk to her first and he even invited them to come to his\nhouse to talk to them if they wanted to, but only in her company.\xe2\x80\x9d Later appellant called his girl\nfriend, Tina Ducharme, a lawyer who worked for the federal government. At the time, she was\naway on business in San Diego. Appellant left a message at her hotel there, and she returned\nhis call some time thereafter.\nDuring their telephone conversation, appellant told Ms. Ducharme about the police interview at\nBread & Circus. Defense counsel moved to exclude any testimony from Ms. Ducharme about\nthat conversation. At a pre-trial hearing on the motion, Ms. Ducharme testified that appellant\n\xe2\x80\x9ctold me that the police had been by his work and had questioned him and several other people\nwho used to work with Darcie and had asked for blood samples from several individuals.\xe2\x80\x9d Ms.\nDucharme\xe2\x80\x99s response to appellant\xe2\x80\x99s concern was that \xe2\x80\x9cobviously he didn\xe2\x80\x99t have to provide the\npolice with a sample if they didn\xe2\x80\x99t have a warrant.\xe2\x80\x9d She also asked him, however, \xe2\x80\x9cwhy he\nwouldn\xe2\x80\x99t, since it would clear the air. Obviously he didn\'t have anything to do with it or didn\xe2\x80\x99t\nhave anything to be concerned about. I didn\'t understand why he wouldn\xe2\x80\x99t just go ahead and do\nit.\xe2\x80\x9d Appellant also told her that \xe2\x80\x9che had been in Darcie\xe2\x80\x99s apartment before, and he questioned\nwhether or not some fingerprints of his would be remaining in the apartment,\xe2\x80\x9d particularly on\nsome drinking glasses. Ms. Ducharme replied with the \xe2\x80\x9ccommon sense advice\xe2\x80\x9d that \xe2\x80\x9cprobably\nDarcie had washed her glasses in the intervening amount of time.\xe2\x80\x9d Finally, appellant asked\n\xe2\x80\x9cwhat if he had gone to the bathroom and left some sperm in there?\xe2\x80\x9d Ms. Ducharme laughed\nand commented that \xe2\x80\x9cunless he was masturbating in her bathroom, I really didn\'t think that\nwould be a concern.\xe2\x80\x9d Ms. Ducharme testified that appellant never said anything about her\nrepresenting him in a criminal matter, nor did she intend to advise appellant as a lawyer, adding,\n\xe2\x80\x9cI wasn\'t qualified to advise anyone on criminal matters.\xe2\x80\x9d Appellant, in fact, had never asked her\nto perform any legal work on his behalf. Besides, she said, she was barred by a regulation from\nrepresenting any private individual \xe2\x80\x9ceither criminally or civilly\xe2\x80\x9d because she was a government\nlawyer. Further, she believed the conversation was a typical call between boyfriend and\ngirlfriend: \xe2\x80\x9cwhen either of us had a problem, we would call the other person to ask their advice\nor tell them about it.\xe2\x80\x9d\nAppellant\xe2\x80\x99s account of the conversation was different. He stated that he telephoned Ms.\nDucharme because he \xe2\x80\x9cwanted to know what kind of position I would be putting myself in by\ngiving hair and blood samples.\xe2\x80\x9d Appellant said that he called her \xe2\x80\x9cbecause she\xe2\x80\x99s an attorney\xe2\x80\x9d\nand that he \xe2\x80\x9cwas seeking legal advice.\xe2\x80\x9d He testified, \xe2\x80\x9cI never thought she could be subpoenaed\nor anything because she was an attorney.\xe2\x80\x9d On the basis of his prior experience with other\nattorneys, appellant believed their conversation would remain confidential.\nAt the close of the hearing, the court ruled that the conversation was not protected by the\nattorney-client privilege. Accepting Ms. Ducharme\xe2\x80\x99s version of the conversation as credible, the\ncourt found appellant\xe2\x80\x99s testimony incredible because he \xe2\x80\x9ckept switching around on the witness\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c433\nstand as if he was waiting on which way to go.\xe2\x80\x9d In addition, the court ruled that the only thing\nMs. Ducharme \xe2\x80\x9csaid as a lawyer\xe2\x80\x9d was that appellant did not have to give the police hair and\nblood samples, which he had already elected not to do. Otherwise, said the court, the types of\nquestions appellant asked Ms. Ducharme were \xe2\x80\x9cwhat if\xe2\x80\x9d questions that were more scientific than\nlegal:\nThey were questions about\xe2\x80\x94they\xe2\x80\x99re scientific questions. And she wasn\xe2\x80\x99t a criminal\nlawyer to begin with. What if I used a glass, would the fingerprints still be there? Not a\nlegal question. What if I went to the bathroom, would I have semen there? That\xe2\x80\x99s not a\nlegal question. None of these were legal questions. The only legal question in this thing\nhe already knew the answer to.\nAs a result, the court refused to allow appellant to invoke the attorney-client privilege, and Ms.\nDucharme\xe2\x80\x99s testimony about the telephone conversation was later introduced into evidence at\ntrial.\nIn the case at bar, the court heard testimony about the nature and substance of the\nconversation between appellant and his one-time girl friend, Ms. Ducharme. It made a credibility\ndetermination about the contents of the conversation and a factual finding that Ms. Ducharme\nwas not acting as an attorney, but as a friend. On this record we see no reason to depart from\nour usual standard of review for factual findings by a trial court; i.e., we must uphold that court\'s\ndetermination of the facts unless it is \xe2\x80\x9cplainly wrong or without evidence to support it.\xe2\x80\x9d In\nparticular, a trial court\'s \xe2\x80\x9cfindings of fact relevant to the essential elements of a claim of attorneyclient privilege will not be overturned unless clearly erroneous.\xe2\x80\x9d This standard of review places a\nheavy burden on appellant. Because appellant has not shown that the trial court\xe2\x80\x99s factual\nfindings were clearly erroneous or, in the words of our statute, \xe2\x80\x9cplainly wrong,\xe2\x80\x9d we uphold the\ncourt\xe2\x80\x99s rejection of his claim of privilege.\nThe attorney-client privilege is the oldest of the established privileges for confidential\ncommunications. Its main purpose is to encourage full and frank communication between\nattorneys and their clients. Nevertheless, courts construe the attorney-client privilege narrowly\nto protect only those purposes which it serves. Thus the privilege applies only in the following\ncircumstances:\n(1) where legal advice of any kind is sought (2) from a professional legal advisor in his\ncapacity as such, (3) the communications relating to that purpose, (4) made in\nconfidence (5) by the client, (6) are at his instance permanently protected (7) from\ndisclosure by himself or by the legal adviser, (8) except the protection be waived.\nThe burden of proving that the attorney-client privilege shields a particular communication from\ndisclosure rests with the party asserting the privilege. This means that the party asserting the\nprivilege must clearly show that the communication was made \xe2\x80\x9cin a professional legal capacity.\xe2\x80\x9d\n\xe2\x80\x9cIn general, American decisions agree that the privilege applies if one of the significant purposes\nof a client in communicating with a lawyer is that of obtaining legal assistance.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c434\n\nWhether a purpose is significantly that of obtaining legal assistance or is for a nonlegal purpose\ndepends upon the circumstances, including the extent to which the person performs legal and\nnonlegal work, the nature of the communication in question, and whether or not the person had\npreviously provided legal assistance relating to the same matter.\nIn the case of someone seeking advice from a friend who is also a lawyer, the lawyer-friend\nmust be giving advice as a lawyer and not as a friend in order for the privilege to attach. The\nnature of the relationship is a factual question for the trial court to decide.\nFinally, the relationship between attorney and client hinges on the client\xe2\x80\x99s intention to seek legal\nadvice and his belief that he is consulting an attorney. In this case the government argues that\nthe conversation in question was not privileged because Ms. Ducharme was not a criminal\nlawyer; because, as a government employee, she was barred by a regulation from representing\nappellant\xe2\x80\x94or any other individual\xe2\x80\x94in a private capacity; and because she believed that she\nwas speaking to appellant as his girlfriend and not as a lawyer.71 These arguments fall short,\nhowever, because the intent of the person seeking advice is assessed from that person\'s\nviewpoint, not that of the attorney. The issue ultimately is what appellant believed when he was\nseeking advice and whether his belief about the confidentiality of the conversation was\nreasonable. Thus Ms. Ducharme\xe2\x80\x99s understanding of the conversation and of why appellant had\ncalled her is relevant only to whether appellant reasonably believed he was consulting her as an\nattorney, with the protections that such a relationship provides.\nGuided by these principles, we agree with the trial court that appellant failed to make the clear\nshowing necessary to establish that his conversation with Ms. Ducharme was within the\nprotection of the attorney-client privilege. We note that the trial court found appellant\xe2\x80\x99s testimony\nincredible, in part, because he appeared to have tailored his testimony to fit the legal standard\nfor the privilege, which counsel and the court had discussed in front of him during the hearing.\nThe court said to defense counsel:\nIt\'s the court\'s observation that appellant is very bright. And I was especially fond of his\nanswer to counsel\xe2\x80\x99s last question about whether he heard me. Then counsel and I had\nthis legal discussion, at which time your client then answered the question, he didn\xe2\x80\x99t\nunderstand the concept. It\xe2\x80\x99s as if we helped him answer the question, the two of us.\nIn addition, the court ruled that the questions appellant asked Ms. Ducharme were not \xe2\x80\x9clegal\xe2\x80\x9d\nquestions. The court noted that appellant knew his rights when he refused to provide blood and\nhair samples to the police. According to Ms. Ducharme, whose testimony the court expressly\ncredited, appellant did not inquire about his right not to give samples without a warrant, but\n\n71\n\nDuring the evidentiary hearing, defense counsel attempted to impeach Ms. Ducharme with her grand\njury testimony. Before the grand jury, Ms. Ducharme initially testified that she gave appellant advice \xe2\x80\x9cas a\nlawyer,\xe2\x80\x9d but then stated a few moments later that appellant had called her \xe2\x80\x9cas his girlfriend.\xe2\x80\x9d The trial\ncourt presumably considered this discrepancy but nevertheless found Ms. Ducharme credible.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c435\ninstead asked \xe2\x80\x9cscientific\xe2\x80\x9d questions about whether or not his fingerprints might remain on a\nglass or whether his semen and hair might be discovered in the bathroom.\nWhile such concerns about \xe2\x80\x9cbad facts\xe2\x80\x9d might fall within the privilege if they were expressed in a\ncommunication within a clearly established attorney-client relationship, we conclude, like the\ntrial court, that appellant failed to establish that, as a matter of fact, such a relationship existed\nbetween him and Ms. Ducharme. We see no reason to upset the court\xe2\x80\x99s conclusion, which\nrested largely on its determination that Ms. Ducharme was credible and that appellant was not.\nWe find no error in that determination.72\nQuestions:\n1. Why did the court hold that the communications at issue were not protected by the\nattorney-client privilege?\n2. If Jones had been speaking to hired or appointed counsel, would the communications at\nissue have been protected by the attorney-client privilege?\nWhat is a \xe2\x80\x9cCommunication\xe2\x80\x9d?\nIn re Grand Jury Proceedings, 791 F. 2d 663 (8th Cir. 1986)\nBRIGHT, Senior Circuit Judge.\nJanet Cheetham appeals from the district court\xe2\x80\x99s denial of her motion to quash a subpoena\nrequiring her testimony before a grand jury investigating one of her clients. We affirm.\nI. BACKGROUND.\nA grand jury is investigating John Doe on suspicion of bank and credit card fraud. As part of its\ninvestigation, the grand jury seeks photographs and handwriting exemplars of Doe for\ncomparison with signatures used on the fraudulent documents.\nThe Immigration and Naturalization Service has produced documents purporting to bear the\nsignatures and photograph of Doe. These documents also bear the signature of Cheetham\nattesting that she prepared the documents. Cheetham represented Doe in INS matters\nunrelated to the grand jury proceedings, and does not represent Doe in the grand jury\ninvestigation.\nThe grand jury subpoenaed Cheetham to testify regarding the authenticity of Doe\xe2\x80\x99s signatures\nand photograph on the INS documents. Cheetham brought a motion to quash before the\n72\n\nThe government argues that even if there was error in the admission of the conversation, the error was\nharmless because the case against appellant was strong, noting in particular the DNA evidence and the\ntestimony of the two neighbors. Given our conclusion that the conversation between appellant and Ms.\nDucharme was not protected by the attorney-client privilege, we need not reach this issue.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c436\nmagistrate, which was denied. She appealed to the district court, which also denied her motion\nand ordered her to testify.73 Cheetham brings this appeal, contending that the district court erred\nin concluding that her testimony would not be protected by the attorney-client privilege, and in\nnot requiring the Government to prove the need for her testimony through affidavit.\nII. DISCUSSION.\nThe common law rule of attorney-client privilege74 extends only to confidential communications\nfrom a client to his or her attorney. Confidential communications encompass that information\ncommunicated on the understanding that it would not be revealed to others, and to matters\nconstituting protected attorney work product. The identity of one\xe2\x80\x99s client usually falls outside the\nscope of the attorney-client privilege. Moreover, matters existing in the public eye, such as a\nperson\xe2\x80\x99s appearance and handwriting, are generally not confidential communications because\nthey were not exposed on the assumption that others would not learn of them. Indeed, in this\ncase, Doe voluntarily revealed his signatures and photograph to the INS.\nCheetham contends that the attorney-client privilege should apply here because the information\nsought might tend to incriminate her client. She argues that any information gained by an\nattorney in her relationship with a client is privileged if exposure of the information might\nbecome a link in a chain of evidence connecting her client with a crime. Cheetham asserts that\nshe gained the information sought by the grand jury during her legal relationship with Doe, and\nthat her testimony could provide the necessary link between Doe and the fraudulent scheme.\nWe disagree. It is true that certain information ordinarily outside the privilege may become\nprivileged if, by revealing the information, the attorney would necessarily disclose confidential\ncommunications. Nonprivileged information is not suddenly transformed into confidential\ncommunications, however, whenever it becomes relevant to a criminal investigation or\nprosecution of a client. We conclude that the information sought by the grand jury does not\nconstitute confidential communications protected by the attorney-client privilege.\nWhen is a Communication \xe2\x80\x9cIn Confidence\xe2\x80\x9d?\n73\n\nCheetham was ordered to answer these specific questions:\n1. Do you know John Doe?\n2. When did you first meet him?\n3. How many times have you met with him in person?\n4. Would you recognize him if you saw him again?\n5. Did you (or someone from your office) prepare Exhibits 1-5 [the INS documents] at his request?\n6. Is the photograph on Exhibits 1 and 2 a true likeness of John Doe?\n7. Did you witness John Doe sign his name on Exhibits 1-5?\n8. If not, do you know who, if anyone, witnessed the signature?\n74\nCheetham seeks to invoke the Texas statutory attorney-client privilege as controlling in this action. The\n\xe2\x80\x9cTexas Rule\xe2\x80\x9d provides that \xe2\x80\x9can attorney shall not disclose any other facts which came into knowledge of\nsuch attorney by reason of such relationship.\xe2\x80\x9d However, questions of privilege are governed by the\ncommon law as interpreted by federal courts in the absence of a relevant Supreme Court rule, federal\nstatute, or constitutional provision. We therefore apply the common law rule in this action, and not the\nTexas Rule.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c437\n\nHofmann v. Conder, 712 P. 2d 216 (Utah 1985)\nPER CURIAM.\nThis matter comes before the Court in an extraordinary proceeding to prohibit the district court\nfrom compelling petitioner\xe2\x80\x99s hospital nurse to testify about statements she overheard petitioner\nmake to his attorney. The trial court made no findings of fact, although it prepared a\nmemorandum decision. It appears from that decision that the controlling issue on which the trial\ncourt decided the matter was a legal one, namely, the standard determining when the presence\nof a third party during communications between a lawyer and client results in a waiver of the\nattorney-client privilege. We hold that the trial court erred in deciding that the attorney-client\nprivilege applies only if the presence of a third person, who overhears a confidential\ncommunication, is \xe2\x80\x9cnecessary for urgent or life-saving procedures.\xe2\x80\x9d The proper standard is\nwhether the third person\xe2\x80\x99s presence is reasonably necessary under the circumstances.\nThe record establishes that the presence of petitioner\xe2\x80\x99s hospital nurse was reasonably\nnecessary under the circumstances. The threshold question of whether the communication was\nintended to be confidential was not ruled on by the trial court, or at least the judge\xe2\x80\x99s decision\ngives us no indication of his having made any factual findings on that question. Although there\nare ambiguities in the record, the totality of the circumstances surrounding petitioner\xe2\x80\x99s\ncommunications to his attorney require the inference that the communication was intended to be\nconfidential and within the protection of the statutory privilege. Immediately before the\ncommunication, petitioner had requested the presence of his attorney, he had stated that he\nwould not make a statement to the police that night, and he had acquiesced in the request of his\nattorney that the police and hospital security personnel not only leave the room but also go far\nenough away to be out of earshot. Given his helpless physical condition and the intensive\nnature of the hospital care he had been receiving throughout the evening and during this\nincident, we cannot infer that petitioner intended his communications to his attorney to be public.\nSince the presence of the hospital nurse was reasonably necessary under all the\ncircumstances, the privilege was not waived because of that presence.\nThe order of the trial court is vacated, and this matter is remanded for the entry of a protective\norder preventing the disclosure by the witness of confidential communications overheard by her.\nZIMMERMAN, Justice (dissenting).\nI agree that Judge Conder applied the wrong standard in concluding that the presence of the\nnurse made the attorney-client privilege unavailable. A third person\xe2\x80\x99s presence should not avoid\nan otherwise available privilege if the third person\xe2\x80\x99s presence is reasonably necessary under the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c438\ncircumstances. The evidence indicates that the nurse\xe2\x80\x99s presence was reasonably necessary for\nHofmann\xe2\x80\x99s well-being.75\nI disagree with the result reached by the Court, however, and would uphold the ruling below,\nbecause I conclude that petitioner has not met the threshold requirement for claiming an\nattorney-client privilege \xe2\x80\x94 petitioner has failed to establish that the communication between the\nclient and the attorney was intended by the client to be confidential. \xe2\x80\x9cThe mere fact that the\nrelationship of attorney and client exists between two individuals does not ipso facto make all\ncommunications between them confidential. The circumstances must indicate whether by\nimplication the communication was of a sort intended to be confidential.\xe2\x80\x9d I think the Court slights\nthis inquiry. By failing to carefully consider the question of the client\xe2\x80\x99s intent, courts may shield\nfrom scrutiny communications that the privilege was not created to protect.\nThere is evidence in the record sufficient to establish that the attorney thought the\ncommunication was at least private and perhaps confidential. However, I find the record very\nsparse on the question of the client\xe2\x80\x99s intention. Although the client was available to give an\naffidavit in support of his claim of privilege, the record is strangely devoid of direct evidence as\nto the client\xe2\x80\x99s state of mind at the time of the communication. As for the facts and circumstances\nin the record that constitute indirect evidence of his intent, I find them ambiguous at best. All\npersons must give evidence, unless they establish a recognized justification for refusing to do\nso. Petitioner has the burden of establishing that the communication was privileged. On the\npresent state of the record, I conclude that petitioner has not carried this burden. Therefore, I\nwould uphold the trial court\xe2\x80\x99s refusal to find the communication privileged.\nCommunication for the Purpose of Legal Advice\nIn the Matter of a Grand Jury Investigation, 453 Mass. 453 (Mass. 2009)\nSPINA, J.\nThis case requires us to decide whether the attorney-client privilege applies where a client\nleaves messages on his counsel\xe2\x80\x99s telephone answering machine threatening to harm others\nand the attorney discloses those communications in order to protect those threatened.\nThe salient facts are not in dispute. Attorney John Doe was representing Michael Moe, a father,\nin a care and protection proceeding in the Juvenile Court. On November 8, 2007, two days after\nan adverse ruling by a Juvenile Court judge, Moe left six messages on Attorney Doe\xe2\x80\x99s\nanswering machine between 1:08 A.M. and 1:24 A.M. Moe indicated that he knew where the\njudge lived and that she had two children. In the fourth message, a voice that Attorney Doe\n75\n\nI also conclude that the privilege is not lost if a third person whose presence is not otherwise justified\noverhears a confidential attorney-client communication without the client\xe2\x80\x99s knowledge, so long as\nreasonable precautions were taken to protect against overhearing. However, because the nurse\xe2\x80\x99s\npresence was justified, the reasonableness of the precautions taken to exclude third parties has no\nbearing on the question before us.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c439\nrecognized as Moe\xe2\x80\x99s wife stated that she and Moe were going to \xe2\x80\x9craise some hell.\xe2\x80\x9d In the fifth\nmessage, Moe stated that \xe2\x80\x9csome people need to be exterminated with prejudice.\xe2\x80\x9d Attorney Doe\nsubsequently erased the messages from the answering machine.\nDuring the following week, Attorney Doe observed that Moe had become \xe2\x80\x9cmore and more\nangry,\xe2\x80\x9d and on November 13, 2007, he filed a motion to withdraw as Moe\xe2\x80\x99s counsel, which was\nsubsequently allowed. Concerned for the safety of the judge and her family, he disclosed the\nsubstance of the messages to the judge.\nOn November 21, 2007, Attorney Doe was interviewed by a State trooper regarding the\nsubstance of the messages, but declined to sign a written statement.\nA District Court complaint alleging threats to commit a crime and intimidation of a witness\nsubsequently issued against Moe. The Commonwealth then initiated grand jury proceedings\nand filed a motion to summons Attorney Doe before the grand jury. That motion was allowed.\nOn December 21, 2007, Attorney Doe, citing the attorney-client privilege, moved to quash the\nsummons. A judge in the Superior Court denied Attorney Doe\xe2\x80\x99s motion, reasoning that Attorney\nDoe and Moe had not carried their burden of demonstrating that the attorney-client privilege\napplied \xe2\x80\x9cbecause they failed to show that the messages were left in an attempt to obtain legal\nservices.\xe2\x80\x9d Attorney Doe filed a motion to reconsider, requesting, inter alia, an evidentiary\nhearing. The motion was denied. The Commonwealth and Attorney Doe submitted a joint\nrequest to report the decision to the Appeals Court. The Superior Court judge reported the case,\nand we transferred the case here on our own motion.\nNeither party disputes that Attorney Doe could, consistent with rule 1.6, disclose the substance\nof Moe\xe2\x80\x99s messages. Rule 1.6 provides, in pertinent part:\n(a) A lawyer shall not reveal confidential information relating to representation of a client\nunless the client consents after consultation, except for disclosures that are impliedly\nauthorized in order to carry out the representation, and except as stated in paragraph\n(b).\n(b) A lawyer may reveal, and to the extent required by Rule 3.3, Rule 4.1 (b), or Rule 8.3\nmust reveal, such information: (1) to prevent the commission of a criminal or fraudulent\nact that the lawyer reasonably believes is likely to result in death or substantial bodily\nharm."\nWhile nothing in rule 1.6 (b) required Attorney Doe to disclose Moe\xe2\x80\x99s communications to the\njudge or police, he had discretion to do so. However, the ethical permissibility of Attorney Doe\xe2\x80\x99s\ndisclosure does not resolve the distinct issue presented here: whether Attorney Doe can be\ncompelled to testify before the grand jury.\nEvidentiary privileges \xe2\x80\x9care exceptions to the general duty imposed on all people to testify.\xe2\x80\x9d We\naccept such privileges \xe2\x80\x9conly to the very limited extent that permitting a refusal to testify or\nexcluding relevant evidence has a public good transcending the normally predominant principle\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c440\nof utilizing all rational means for ascertaining truth.\xe2\x80\x9d The attorney-client privilege \xe2\x80\x9cis founded\nupon the necessity, in the interest and administration of justice, of the aid of persons having\nknowledge of the law and skilled in its practice, which assistance can only be safely and readily\navailed of when free from the consequences or the apprehension of disclosure.\xe2\x80\x9d A party\nasserting the privilege must show that (1) the communications were received from the client in\nfurtherance of the rendition of legal services; (2) the communications were made in confidence;\nand (3) the privilege has not been waived.\nThe Commonwealth contends that the attorney-client privilege does not apply because Moe\xe2\x80\x99s\ncommunications were not made \xe2\x80\x9cfor the purpose of facilitating the rendition of legal services.\xe2\x80\x9d In\nmaking this argument, the Commonwealth implicitly asks us to reconsider a portion of our\ndiscussion in the Purcell case.\nIn Purcell, the client was discharged as a maintenance man at the apartment building in which\nhis apartment was located and had received an order to vacate his apartment. During\nconsultation with an attorney, the client stated an intent to burn the apartment building. The\nattorney disclosed these communications to police and criminal charges were brought against\nthe client. When the prosecutor subpoenaed the attorney to testify at trial, the attorney filed a\nmotion to quash, which was denied. The central issue in that case was whether the crime-fraud\nexception to the attorney-client privilege applied. We concluded that the communications would\nnot fall within the crime-fraud exception unless the district attorney could establish facts by a\npreponderance of the evidence showing that the client\'s communication sought assistance in or\nfurtherance of future criminal conduct.\nRecognizing that whether the attorney-client privilege applied at all was open on remand, we\nalso considered whether a communication of an intention to commit a crime, if not within the\ncrime-fraud exception, could be considered a communication for the purposes of facilitating the\nrendition of legal services. We held that a \xe2\x80\x9cstatement of an intention to commit a crime made in\nthe course of seeking legal advice is protected by the privilege, unless the crime-fraud exception\napplies.\xe2\x80\x9d We reasoned that a gap between the crime-fraud exception and the applicability of the\nprivilege \xe2\x80\x9cwould make no sense,\xe2\x80\x9d because the attorney-client privilege was premised on the\nbenefits of unimpeded communication between attorney and client, and noted that \xe2\x80\x9can informed\nlawyer may be able to dissuade the client from improper future conduct and, if not, under the\nethical rules may elect in the public interest to make a limited disclosure of the client\'s\nthreatened conduct.\xe2\x80\x9d\nThe limited disclosure adverted to in the Purcell case occurred here. Concerned for the safety of\nthe judge, her family, and a social worker, Attorney Doe disclosed Moe\xe2\x80\x99s communications to the\njudge and law enforcement authorities to protect them from harm.\nWe discern no reason to depart from the Purcell decision, and hold that Moe\xe2\x80\x99s communications\nwere made in furtherance of the rendition of legal services and thus protected by the attorneyclient privilege. The Commonwealth\xe2\x80\x99s argument to the contrary essentially raises an issue of\ngermaneness. Scholars, commentators, and courts have formulated a number of tests for\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c441\ndetermining the germaneness of a client\'s communication. However, none of these formulations\nappears to give clients breathing room to express frustration and dissatisfaction with the legal\nsystem and its participants. The expression of such sentiments is a not uncommon incident of\nthe attorney-client relationship, particularly in an adversarial context, and may serve as a\nspringboard for further discussion regarding a client\xe2\x80\x99s legal options. If a lawyer suspects that the\nclient intends to act on an expressed intent to commit a crime, the lawyer may attempt to\ndissuade the client from such action, and failing that, may make a limited disclosure to protect\nthe likely targets. Requiring the privilege to yield for purposes of a criminal prosecution not only\nwould hamper attorney-client discourse, but also would discourage lawyers from exercising their\ndiscretion to make such disclosures, as occurred here, and thereby frustrate the beneficial\npublic purpose underpinning the discretionary disclosure provision of rule 1.6. Furthermore, any\ntest to ascertain the germaneness of an ostensibly threatening communication on a case-bycase basis would make the privilege\xe2\x80\x99s applicability uncertain, rendering the privilege \xe2\x80\x9clittle better\nthan no privilege.\xe2\x80\x9d Warning clients that communications deemed irrelevant to the matter for\nwhich they have retained counsel will not be protected not only may discourage clients from\ndisclosing germane information, but also may disincline clients to share their intentions to\nengage in criminal behavior. In the latter circumstance, a lawyer\xe2\x80\x99s ability to aid in the\nadministration of justice by dissuading a client from engaging in such behavior is impaired. The\nlawyer also may never receive the very information necessary for him or her to determine\nwhether to make a limited disclosure to prevent the harm contemplated by the client.\nIn sum, we reaffirm that a client\xe2\x80\x99s communications to his lawyer threatening harm are privileged\nunless the crime-fraud exception applies. Because the Commonwealth does not assert that\nMoe\xe2\x80\x99s communications come within the crime-fraud exception, they were privileged. The order\ndenying Attorney Doe\xe2\x80\x99s motion to quash is hereby vacated and the case is remanded to the\nSuperior Court for further proceedings consistent with this opinion.\nKeating v. McCahill, Civil Action No. 11-518 (E.D. Pa. 2012)\nSummary: Equisoft hired Keating as a management consultant. Soon afterward,\nKeating quit Equisoft and joined Capgemini. Equisoft hired Synnott, a Canadian lawyer,\nto provide legal advice. After consultation with Synnott, Equisoft sent a letter to\nCapgemini making certain demands. After receiving the letter, Capgemini fired Keating,\nwho filed a tort action against Equisoft, asserting several claims. During discovery,\nEquisoft produced certain documents, as well as a privilege log listing relevant\ndocuments not produced. Keating filed a motion to compel those documents. The court\nfound that some of the documents were protected by the attorney-client privilege or the\nwork product doctrine, and others were not.\nGENE E.K. PRATTER, District Judge.\nPlaintiff Daniel Keating has objected to Defendants Equisoft, Inc., Thomas McCahill, and Luis\nRomero\xe2\x80\x99s assertion of attorney-client privilege and work product protection over certain\ndocuments in the Defendants\' privilege log. The parties have submitted twenty-five documents\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c442\n\xe2\x80\x94 twenty-four produced with redactions and one withheld in full \xe2\x80\x94 to the Court for an in camera\nreview to determine whether the communications at issue are shielded from disclosure by the\nattorney-client privilege and/or the work product doctrine.\nFor the reasons that follow, the Court finds that the twenty-four redacted documents may remain\nredacted as presented to the Court, but Equisoft shall produce the one unproduced document in\nredacted form as more fully set forth below.\nI. FACTUAL BACKGROUND\nMr. Keating, a management consultant in the software industry, alleges that in late November\n2009, his consulting business, the Keating Consulting Group, Inc., entered into a three month\nconsulting services contract with Equisoft, Inc. The consulting services contract was terminable\nat-will by either party with 30 days written notice. Mr. Keating also entered into a NonSolicitation Agreement, a Confidentiality Agreement, and an Intellectual Property Agreement\nwith Equisoft, Inc.\nApproximately halfway through the term of the consulting agreement, Mr. Keating was offered\nand accepted a position with Capgemini Financial Services USA, Inc. and entered an\nemployment agreement with Capgemini on January 14, 2010. The next day, Mr. Keating\ntraveled to Equisoft\xe2\x80\x99s Pennsylvania offices to give Mr. McCahill, Equisoft, Inc.\xe2\x80\x99s Life Insurance\nDivision President, the required 30 days notice pursuant to the contract. On January 21, 2010,\nMr. Keating began working for Capgemini.\nIn the immediate wake of Mr. Keating giving his notice, Mr. McCahill and certain members of\nEquisoft\xe2\x80\x99s senior management convened to address the issues posed by Mr. Keating\'s\nresignation. These individuals included the Equisoft CEO Mr. Romero, Equisoft Vice President\nand COO Steeve Michaud, and then-Equisoft General Manager for Philadelphia Operations\nWilliam O\xe2\x80\x99Donnell. Equisoft hired Bernard Synnott, a Canadian attorney to advise senior\nmanagement on issues relating to Mr. Keating\xe2\x80\x99s resignation. Mr. Michaud was responsible for\ncommunicating with Mr. Synnott on behalf of Equisoft, and \xe2\x80\x9crelayed questions, information,\ncomments, and advice from Mr. Synnott to senior management, and conveyed questions,\ninformation and comments from the senior management to Mr. Synnott."\nFrom January 18, 2010 to February 8, 2010, Messrs. Michaud, O\xe2\x80\x99Donnell, and Romero activity\nassisted Mr. Synnott in formulating strategy and drafting a demand letter to effectuate that\nstrategy. On February 8, 2010, Mr. Synnott sent the final version of this demand letter to Mr.\nKeating and Capgemini representatives threatening litigation if Mr. Keating continued to work for\nCapgemini. Three weeks after he began his new job, on February 16, 2010, Mr. Keating was\nterminated by Capgemini.\nIn September 2010, Mr. Synnott received a letter from Mr. Keating\'s attorney, Heather\nSussman, Esq., threatening to commence litigation if Equisoft did not comply with various\ndemands. For the remainder of September 2010, Messrs. Michaud, O\xe2\x80\x99Donnell, and Romero\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c443\nassisted Mr. Synnott in evaluating Ms. Sussman\xe2\x80\x99s demand letter and drafting a response, which\nwas sent on September 24, 2010.\nOn January 25, 2011, Mr. Keating filed this lawsuit, asserting that his termination from\nCapgemini was the result of Equisoft\xe2\x80\x99s unlawful actions. He claims tortious interference with his\ncontractual relationship with Capgemini and his prospective economic advantage, defamation\nvia slander and libel, intentional infliction of emotional distress, and prima facie tort.\nAfter Mr. Keating served his initial document requests, the Defendants provided Mr. Keating\nwith a privilege log. On October 17, 2011, one week after Equisoft provided Mr. Keating with\ntheir privilege log, Mr. Keating filed a motion to compel requesting that Equisoft produce every\ndocument on its privilege log not already produced because (1) Mr. Synnott, a foreign attorney,\nis not \xe2\x80\x9ca member of the bar of a court\xe2\x80\x9d as, Mr. Keating claims, is necessary for the attorneyclient privilege to apply, (2) the attorney-client privilege cannot apply where the challenged\ncommunications do not include a lawyer as a sender or a recipient, and (3) the work product\ndoctrine cannot apply where the documents at issue were not prepared by an attorney or his\nrepresentative.\nSince the filing of that motion \xe2\x80\x94 which was mooted by Order of the Court \xe2\x80\x94 the parties have\nreduced the universe of documents in dispute from 253 to 25. Twenty-four of these disputed\ndocuments have been produced in redacted form, and one document has been withheld in its\nentirety. These 25 documents have been submitted to the Court for an in camera review to\ndetermine whether the attorney-client privilege and/or the work product doctrine shields them\nfrom disclosure. Along with the documents submitted for judicial review, Equisoft submitted\naffidavits from Mr. Synnott, Mr. Romero, Mr. O\xe2\x80\x99Donnell, and Mr. Michaud in support of its\nassertion of privilege and work product protection.\nII. LEGAL STANDARDS\nA. Attorney-Client Privilege\nFederal courts sitting in diversity, as in this case, apply the law of the host state to determine\nprivilege. Thus, Pennsylvania law governs the privilege issues in this case. In order for the\nattorney-client privilege to apply in Pennsylvania, the following conditions must be met: \xe2\x80\x9c(1) the\nasserted holder of the privilege is or sought to become a client; (2) the person to whom the\ncommunication was made is a member of the bar of a court, or his subordinate; (3) the\ncommunication relates to a fact of which the attorney was informed by his client, without the\npresence of strangers, for the purpose of securing either an opinion of law, legal services or\nassistance in a legal matter, and not for the purposes of committing a crime or tort; and (4) the\nprivilege has been claimed and is not waived by the client.\xe2\x80\x9d Here, only the second and third\nelements are in dispute.\nThe Pennsylvania rule that the lawyer must be \xe2\x80\x9ca member of the bar of a court\xe2\x80\x9d does not limit\nthe privilege to members of the Pennsylvania bar. Rather, \xe2\x80\x9cthe privilege applies to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c444\ncommunications to a person whom the client reasonably believes to be a lawyer. Thus, a lawyer\nadmitted to practice in another jurisdiction or a lawyer admitted to practice in a foreign nation is\na lawyer for the purposes of the privilege.\xe2\x80\x9d\nThe attorney-client privilege protects the communications themselves, not the underlying facts.\nThe privilege may cover documents that \xe2\x80\x9cwhile not involving employees assisting counsel, still\nreflect confidential communications between client and counsel or subordinates of counsel for\nthe purposes of either (1) providing legal services or (2) providing information to counsel to\nsecure legal services. The privilege applies to both corporations and natural persons. The\n\xe2\x80\x9cscope of an individual\xe2\x80\x99s employment is highly relevant to the question of maintenance of\nconfidentiality,\xe2\x80\x9d and \xe2\x80\x9cthe privilege is waived if the communications are disclosed to employees\nwho did not need access to them.\xe2\x80\x9d\nHowever, \xe2\x80\x9ca document need not be authored or addressed to an attorney in order to be properly\nwithheld on attorney-client privilege grounds.\xe2\x80\x9d Where a corporate client is involved, \xe2\x80\x9cprivileged\ncommunications may be shared by non-attorney employees in order to relay information\nrequested by attorneys.\xe2\x80\x9d \xe2\x80\x9cDocuments subject to the privilege may be transmitted between nonattorneys so that the corporation may be properly informed of legal advice and act\nappropriately.\xe2\x80\x9d \xe2\x80\x9cDrafts of documents prepared by counsel or circulated to counsel for comments\non legal issues are considered privileged if they were prepared or circulated for the purpose of\ngiving or obtaining legal advice and contain information or comments not included in the final\nversion.\xe2\x80\x9d\nBecause the privilege obstructs the truth-finding process, it should be \xe2\x80\x9capplied only where\nnecessary to achieve its purpose.\xe2\x80\x9d And because the privilege promotes the \xe2\x80\x9cdissemination of\nsound legal advice,\xe2\x80\x9d it applies only where the advice is legal in nature, and not where the lawyer\nprovides non-legal business advice. Thus, \xe2\x80\x9cthe party asserting the privilege bears the burden of\nproving that it applies to the communications at issue\xe2\x80\x9d and \xe2\x80\x9cFederal Rule of Evidence 501\nrequires the federal courts, in determining the nature and scope of an evidentiary privilege, to\nengage in the sort of case-by-case analysis that is central to common-law adjudication.\xe2\x80\x9d\nB. Work Product Doctrine\nFederal Rule of Civil Procedure 26(b)(3) outlines work product protection in diversity cases. In\norder to come within the qualified immunity from discovery created by Rule 26(b)(3) three tests\nmust be satisfied. The material must be: (1) \xe2\x80\x9cdocuments and tangible things;\xe2\x80\x9d (2) \xe2\x80\x9cprepared in\nanticipation of litigation or for trial;\xe2\x80\x9d and (3) \xe2\x80\x9cby or for another party or by or for that other party\xe2\x80\x99s\nrepresentative.\xe2\x80\x9d\n\xe2\x80\x9cWork-product immunity protects only documents and tangible things prepared in anticipation of\nlitigation or for trial, such as memoranda, letters, and e-mails.\xe2\x80\x9d\nDocuments are prepared in anticipation of litigation when \xe2\x80\x9cin light of the nature of the document\nand the factual situation in the particular case, the document can be fairly said to have been\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c445\nprepared or obtained because of the prospect of litigation.\xe2\x80\x9d The preparer\xe2\x80\x99s anticipation of\nlitigation must be objectively reasonable. Generally, a reasonable anticipation of litigation\nrequires existence of an identifiable specific claim or impending litigation at the time the\nmaterials were prepared.\nAs Rule 26(b)(3) makes clear, the materials themselves need not be prepared by a lawyer or a\nlawyer\xe2\x80\x99s representative to qualify for work product protection. Rather, \xe2\x80\x9cthe focus of the rule\nseems to be on whether the work was done in anticipation of litigation by the person preparing\nthe work.\xe2\x80\x9d Indeed, the fact that the documents sought for discovery do not include legal advice\nis, \xe2\x80\x9cas a matter of law, irrelevant provided they were prepared in anticipation of litigation.\xe2\x80\x9d\nA party claiming work product protection bears the initial burden of showing that the materials in\nquestion were prepared in anticipation of litigation. A party seeking disclosure of documents\nclaimed as work product must demonstrate substantial need for the materials in the preparation\nof his case and is unable without undue hardship to obtain the substantial equivalent of the\nmaterials by other means.\nIII. DISCUSSION\nSeven documents contain all of the redacted material at issue, as the redacted material in the\nother eighteen documents is fully duplicated within these seven. Equisoft argues that attorneyclient privilege and the work product doctrine shield each of these documents from disclosure.\nAccordingly, the Court will analyze each of these documents in turn.\nA. Document 96\nDocument 96 is a February 2010 string of e-mails between Mr. Michaud and Mr. O\xe2\x80\x99Donnell\nregarding the February 8, 2010 demand letter.76 Equisoft produced the document to Mr. Keating\nbut redacted two e-mails in the chain: a February 6, 2010 e-mail from Mr. Michaud to Mr.\nO\xe2\x80\x99Donnell, and Mr. O\xe2\x80\x99Donnell\'s February 7, 2010 response.\n\n76\n\nNeither Mr. Michaud nor Mr. O\xe2\x80\x99Donnell are attorneys, and they are the only individuals copied on either\nof the redacted e-mails or any e-mails in the string. Unless otherwise indicated, the same is true for the\nother documents in question. However, each of the individuals in the senior management of the\nCompany, as well as Mr. Synnott, have affirmed that Mr. Michaud \xe2\x80\x9cwas responsible for communicating\nwith Mr. Synnott on behalf of the company,\xe2\x80\x9d and \xe2\x80\x9coften relayed questions, information, comments, and\nadvice\xe2\x80\x9d from Mr. Synnott to the control group. Because a document \xe2\x80\x9cneed not be authored or addressed\nto an attorney in order to be properly withheld on attorney-client privilege grounds,\xe2\x80\x9d provided it \xe2\x80\x9creflects\nconfidential communications between client and counsel for the purposes of (1) providing legal services\nor (2) providing information to counsel to secure legal services,\xe2\x80\x9d the absence of an attorney copied on the\ne-mails in question does not necessarily defeat the assertion of the attorney client privilege. Also, as\nnoted above, the Court is not persuaded that simply because Mr. Synnott is admitted to practice law only\nin foreign jurisdictions that he is not \xe2\x80\x9ca member of the bar of a court" for the purposes of the attorneyclient privilege and the work product doctrine. Therefore, the Court will treat Mr. Synnott as an attorney\n(which he, indeed, is) for the purposes of this analysis.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c446\nMr. Michaud attests that the material redacted from his February 6, 2010 e-mail is \xe2\x80\x9cadvice that\nhe received from Mr. Synnott regarding the demand letters\xe2\x80\x9d to be sent to Mr. Keating and\nCapgemini. After careful in camera review of the redacted e-mail, the Court concludes that Mr.\nMichaud\xe2\x80\x99s e-mail relayed Mr. Synnott\xe2\x80\x99s legal advice and strategy regarding the demand letters\nto Mr. O\'Donnell, and, accordingly, is privileged and may remain withheld except as redacted.\nTo require disclosure of this e-mail would reveal client communications and legal advice from\ncounsel.\nMr. O\xe2\x80\x99Donnell affirms that his February 7, 2010 e-mail \xe2\x80\x9cconsists of his opinion regarding the\nlegal advice from Mr. Synnott that Mr. Michaud relayed to him regarding the demand letters.\xe2\x80\x9d He\nfurther asserts generally, that he \xe2\x80\x9coften conveyed questions, information, and comments, to Mr.\nMichaud with the understanding that he would relay them to Mr. Synnott.\xe2\x80\x9d\nUnlike Mr. Michaud\xe2\x80\x99s e-mail, the Court does not conclude that Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s e-mail is a\nprivileged communication. As an initial matter, without the disclosure of the underlying\ncommunication from Mr. Synnott via Mr. Michaud, Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s e-mail does not contain any\nconfidential information and does not divulge any legal advice from Mr. Synnott. Rather, it\nmerely indicates Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s agreement with the redacted advice of counsel communicated\nto him via Mr. Michaud. Additionally, although Mr. O\xe2\x80\x99Donnell has indicated in a general sense\nthat he had the \xe2\x80\x9cunderstanding\xe2\x80\x9d that Mr. Michaud would relay all of his comments to Mr. Synnott\nrelating to Mr. Keating in the month of September, Equisoft has not offered evidence that this\nparticular communication was made for the purpose of securing either an opinion of law, legal\nservices, or assistance in a legal matter.\nNevertheless, the work product doctrine shields Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s e-mail from disclosure.\nAlthough it does not qualify as \xe2\x80\x9ccore or opinion work product that encompasses the mental\nimpressions, conclusions, opinion, or legal theories of an attorney or other representative of a\nparty concerning the litigation which is generally afforded near absolute protection from\ndiscovery,\xe2\x80\x9d Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s e-mail most certainly qualifies as a document prepared by a party\n\xe2\x80\x9cbecause of\xe2\x80\x9d or in anticipation of litigation. Moreover, Mr. Keating has made no claim of\nsubstantial need or undue hardship that would justify disclosure notwithstanding the work\nproduct claim.\nAccordingly, the Court finds that protection attaches to Mr. Michaud\xe2\x80\x99s February 6, 2010 e-mail,\nand that the work product doctrine shields Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s February 7, 2010 e-mail from\ndisclosure.\nB. Document 202\nDocument 202 is a September 2010 string of e-mails between Mr. Michaud and Mr. O\xe2\x80\x99Donnell\nregarding revisions to a draft of Equisoft\xe2\x80\x99s September 2010 letter. Equisoft produced the\ndocument to Mr. Keating but redacted two e-mails in the chain: a September 15, 2010 e-mail\nfrom Mr. Michaud to Mr. O\xe2\x80\x99Donnell, and Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s September 15, 2010 response.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c447\nMr. Michaud attests that his e-mail \xe2\x80\x9cdiscloses requests that Mr. Romero and he made to Mr.\nSynnott regarding Ms. Sussman\xe2\x80\x99s demand letter and Mr. Synnott\xe2\x80\x99s response thereto.\xe2\x80\x9d Based\nupon the text of the e-mail, the Court discerns no particular \xe2\x80\x9crequests\xe2\x80\x9d Mr. Romero and Mr.\nMichaud made of Mr. Synnott. The redacted portion of Mr. Michaud\xe2\x80\x99s e-mail merely reflects Mr.\nMichaud\xe2\x80\x99s opinion about whether the draft letter incorporates his and Mr. Romero\'s\ncommunications to counsel. The e-mail does not divulge the communications themselves.\nAccordingly, the Court concludes that the redacted portion of Mr. Michaud\xe2\x80\x99s e-mail is not\nshielded by the attorney-client privilege.\nHowever, the work product doctrine does shield Mr. Michaud\'s e-mail from disclosure because it\nis a document prepared by a party in anticipation of litigation, and Mr. Keating has made no\nclaim of substantial need or undue hardship that would justify disclosure.\nRegarding Mr. O\xe2\x80\x99Donnell\'s redacted response, Mr. O\xe2\x80\x99Donnell affirms that the redacted portion of\nhis e-mail \xe2\x80\x9cconsists of his comments regarding a draft that he reviewed of Mr. Synnott\xe2\x80\x99s\nresponse to Ms. Sussman\xe2\x80\x99s demand letter,\xe2\x80\x9d and that his intent was for Mr. Michaud to relay\nsome or all of his comments to Mr. Synnott.\xe2\x80\x9d\nHere, Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s statement that he intended for \xe2\x80\x9csome or all\xe2\x80\x9d of his comments to be\nrelayed to Mr. Synnott is unhelpful in the Court\'s review because it offers no specifics as to\nwhich of his comments he intended for Mr. Michaud to forward to Mr. Synnott. However, the text\nof the redacted e-mail and the other e-mails on the chain make clear that Mr. O\xe2\x80\x99Donnell\nintended his comments to be forwarded to Mr. Synnott. Indeed, in a 12:10 p.m. e-mail on\nSeptember 15, 2010 in the chain, Mr. Michaud indicated to Mr. O\xe2\x80\x99Donnell his intention \xe2\x80\x9cto give\nMr. Synnott their feedback later today.\xe2\x80\x9d Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s e-mail, a mere five hours later, was\nclearly sent with the intention that it be sent along to Mr. Synnott.\nHowever, even if the attorney-client privilege does not apply to Mr. O\xe2\x80\x99Donnell\'s e-mail, the work\nproduct doctrine protects the redacted portion of Mr. Michaud\xe2\x80\x99s e-mail from disclosure because\nit is a document prepared by a party in anticipation of litigation. Once again, Mr. Keating has\nmade no claim of substantial need or undue hardship that would justify disclosure.\nAccordingly, the Court finds that the privilege attaches to the redacted portions of both Mr.\nMichaud\xe2\x80\x99s and Mr. O\'Donnell\xe2\x80\x99s e-mails.\nC. Document 207\nDocument 207 is a September 2010 string of e-mails between Mr. Michaud and Mr. O\xe2\x80\x99Donnell\nwith an attached draft letter from Mr. Synnott to Mr. Keating\xe2\x80\x99s attorney. Equisoft produced the\ndocument to Mr. Keating but redacted a portion of Mr. Michaud\'s 11:39 a.m. e-mail on\nSeptember 17, 2010, and the entirety of the attachment\nMr. Michaud attests that the redacted portion of his September 17, 2010 e-mail is \xe2\x80\x9cadvice he\nreceived from Mr. Synnott regarding the timing of his response to Ms. Sussman\'s demand\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c448\nletter,\xe2\x80\x9d and that, consistent with his responsibilities, he relayed this information from Mr. Synnott\nto the other senior management, in this case, Mr. O\xe2\x80\x99Donnell. After careful in camera review of\nthe redacted portion of the e-mail, the Court concludes that Mr. Michaud\xe2\x80\x99s e-mail relayed Mr.\nSynnott\xe2\x80\x99s legal advice and strategy to Mr. O\xe2\x80\x99Donnell regarding the demand letters. Accordingly,\nthe document is privileged and may remain redacted.\nTurning to the attached draft letter, Mr. O\xe2\x80\x99Donnell affirms that it \xe2\x80\x9cconsists of his proposed\nrevisions to a draft that he reviewed of Mr. Synnott\xe2\x80\x99s response to Ms. Sussman\xe2\x80\x99s demand\nletter,\xe2\x80\x9d and that \xe2\x80\x9chis intent was for Mr. Michaud to relay some or all of his revisions to Mr.\nSynnott.\xe2\x80\x9d\nFirst, the draft letter authored by Mr. Synnott is protected by the attorney-client privilege as\n\xe2\x80\x9cdrafts of documents prepared by counsel are considered privileged if they were prepared or\ncirculated for the purpose of giving or obtaining legal advice and contain information or\ncomments not included in the final version.\xe2\x80\x9d Here, the draft document contains both information\nand comments not contained in the final version.\nSecond, Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s proposed revisions to the attached letter were clearly intended to be\ncommunicated to Mr. Synnott through Mr. Michaud for the purpose of securing either an opinion\nof law, legal services or assistance in the legal matter. Although Mr. O\'Donnell\'s statement that\nhe intended for \xe2\x80\x9csome or all\xe2\x80\x9d of his comments to be relayed to Mr. Synnott is unhelpful in the\nCourt\xe2\x80\x99s review, that is of no moment. Accordingly, the Court concludes that Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s\nproposed revisions to Mr. Synnott\xe2\x80\x99s draft are protected by the attorney-client privilege.\nThird, the attached letter as a whole is shielded from disclosure by the work product doctrine.\nThe attachment was a draft document prepared by counsel in reasonable anticipation of\nlitigation. That the draft was sent to Mr. O\xe2\x80\x99Donnell through Mr. Michaud does not remove it from\nthe protection of the work product doctrine. Regardless, Mr. Keating has not established a\nsubstantial need for the materials to prepare his case or undue hardship in obtaining the\nsubstantial equivalent of the materials by other means.\nAccordingly, the Court finds that the privilege attaches to Mr. Michaud\xe2\x80\x99s e-mail, and both the\nattorney-client privilege and the work product doctrine shields the attachment from disclosure.\nD. Document 215\nDocument 215 is a September 2010 string of e-mails between Mr. Michaud and Mr. O\xe2\x80\x99Donnell\nregarding revisions to a draft of Equisoft\xe2\x80\x99s September 2010 letter responding to Mr. Keating\xe2\x80\x99s\nattorney. The document includes eight e-mails, four of which contain redactions.\nMr. Michaud\xe2\x80\x99s 11:39 a.m. e-mail on September 17, 2010 is a duplicate of the redacted e-mail in\nDocument 207. Accordingly, the Court concludes that this e-mail is privileged and may remain\nredacted for the same reasons as described above.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c449\nMr. O\xe2\x80\x99Donnell affirms that the redacted portion of his 10:04 a.m. e-mail on September 20, 2010\n\xe2\x80\x9cconsists of his comments regarding a draft that he reviewed of Mr. Synnott\xe2\x80\x99s response to Ms.\nSussman\xe2\x80\x99s demand letter,\xe2\x80\x9d and that \xe2\x80\x9chis intent was for Mr. Michaud to relay some or all of this\ninformation to Mr. Synnott.\xe2\x80\x9d\nAfter careful in camera review of the redacted portions of Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s e-mail, the Court\ncannot conclude that Mr. O\xe2\x80\x99Donnell\'s 10:04 a.m. e-mail is shielded from disclosure by the\nattorney-client privilege. As discussed above, Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s statement that he intended for\n\xe2\x80\x9csome or all\xe2\x80\x9d of his comments to be relayed to Mr. Synnott is unhelpful in the Court\xe2\x80\x99s review.\nThe text of the e-mail and the chain as a whole does not indicate that Mr. O\xe2\x80\x99Donnell intended\nMr. Michaud to communicate his comments to Mr. Synnott for the purpose of securing either an\nopinion of law, legal services or assistance in a legal matter. If anything, as indicated by the\nunredacted portion of the e-mail, Mr. O\xe2\x80\x99Donnell is soliciting a response from Mr. Michaud, as he\nnoted, \xe2\x80\x9cLet me know what you think.\xe2\x80\x9d Thus, this communication is not protected by the attorneyclient privilege.\nMr. Michaud attests that the redacted portion of his 10:11 a.m. e-mail on September 20, 2010\n\xe2\x80\x9cconsists of his opinion regarding Mr. O\xe2\x80\x99Donnell\'s comments on and proposed revisions to a\ndraft of Mr. Synnott\xe2\x80\x99s response to Ms. Sussman\xe2\x80\x99s demand letter.\xe2\x80\x9d The redactions also \xe2\x80\x9cconsist\nof his opinion regarding litigation threatened by Ms. Sussman in her demand letter and the\neffect Mr. Synnott\xe2\x80\x99s would have on that threatened litigation.\xe2\x80\x9d\nUpon careful in camera review of Mr. Michaud\'\xe2\x80\x99 e-mail, the Court is not persuaded that the\nredacted portions of Mr. Michaud\xe2\x80\x99s e-mail are shielded from disclosure by the attorney-client\nprivilege. The redactions merely reflect Mr. Michaud\xe2\x80\x99s own opinion about Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s\ncomments, and there is no evidence that Mr. Michaud intended this opinion to be communicated\nto Mr. Synnott. Also, the redacted portion does not divulge any communications between\ncounsel and client. The Court is not persuaded that when one non-lawyer (Mr. Michaud) gives\nhis opinion to a second non-lawyer (Mr. O\xe2\x80\x99Donnell) about the second non-lawyer\xe2\x80\x99s comments\nabout a lawyer\xe2\x80\x99s draft document, that the communication is protected under the attorney-client\nprivilege. Accordingly, the Court concludes that the redacted portion of Mr. Michaud\xe2\x80\x99s e-mail is\nnot protected by the attorney-client privilege.\nFinally, Mr. O\xe2\x80\x99Donnell attests that the redacted portion of his 10:15 a.m. e-mail on September\n20, 2010 \xe2\x80\x9cconsists of his opinion regarding the litigation threatened by Ms. Sussman in her\ndemand letter and the effect Mr. Synnott\xe2\x80\x99s response would have on that threatened litigation,\xe2\x80\x9d\nand that \xe2\x80\x9chis intent was for Mr. Michaud to relay some or all of this information to Mr. Synnott.\xe2\x80\x9d\nOnce again, Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s statement that he intended for \xe2\x80\x9csome or all\xe2\x80\x9d of his comments to be\nrelayed to Mr. Synnott is unhelpful in the Court\xe2\x80\x99s review. Likewise, it does not appear from the\ntext of his e-mail or the other e-mails on the chain that Mr. O\xe2\x80\x99Donnell intended for the redacted\nportion of the communication to be communicated to Mr. Synnott for the purpose of securing\neither an opinion of law, legal services or assistance in a legal matter. Accordingly, the Court\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c450\nconcludes that the redacted portion of Mr. Michaud\'s e-mail is not protected by the attorneyclient privilege.\nEven though the attorney-client privilege does not apply to the redacted portions of these\ncommunications, the work product doctrine shields the redacted portions of this e-mail chain\nfrom disclosure. The redacted statements were committed to documents and were prepared by\na party in anticipation of litigation. Mr. Keating has made no claim of substantial need or undue\nhardship that would justify disclosure.\nE. Document 226\nDocument 226 is a September 2010 string of e-mails between Mr. Michaud and Mr. O\xe2\x80\x99Donnell\nregarding revisions to a draft of Equisoft\xe2\x80\x99s September 2010 letter responding to Mr. Keating\'s\nattorney. The document includes eight e-mails, six of which contain redactions.\nMr. Michaud attests that his two redacted e-mails to Mr. O\xe2\x80\x99Donnell on the e-mail string \xe2\x80\x9cconsist\nof his opinion about Mr. O\xe2\x80\x99Donnell\'s comments on a draft of Mr. Synnott\xe2\x80\x99s response to Mr.\nSussman\xe2\x80\x99s demand letter.\xe2\x80\x9d Mr. O\xe2\x80\x99Donnell affirms that his three redacted e-mails to Mr. Michaud\nand one redacted e-mail to himself on the e-mail string \xe2\x80\x9cconsist of his comments regarding a\ndraft that I reviewed of Mr. Synnott\xe2\x80\x99s response to Mr. Sussman\xe2\x80\x99s demand letter,\xe2\x80\x9d and that his\n\xe2\x80\x9cintent was for Mr. Michaud to relay some or all of his comments to Mr. Synnott.\xe2\x80\x9d\nThe redacted information in Mr. O\xe2\x80\x99Donnell\'s September 21, 2010 e-mails at 10:16 a.m., (2)\n10:21 a.m., and (3) 10:21:49 a.m. contain substantive revisions to Mr. Synnott\xe2\x80\x99s draft letter and\nwere clearly intended to be communicated to Mr. Synnott through Mr. Michaud for the purpose\nof securing either an opinion of law, legal services, or assistance in the legal matter. Indeed, in\nMr. Michaud\xe2\x80\x99s 8:49 p.m. e-mail of the previous day, he included a revised version of the letter\nhe sent to Mr. Synnott, and told Mr. O\xe2\x80\x99Donnell that the lawyer \xe2\x80\x9cwill call me to discuss the\nchanges.\xe2\x80\x9d Also, after providing all of his substantive changes, Mr. O\xe2\x80\x99Donnell asked Mr. Michaud\nto \xe2\x80\x9ccall him after he talks with the lawyer.\xe2\x80\x9d Accordingly, in light of the factual background and the\ncontent of the letters, it seems that Mr. O\xe2\x80\x99Donnell intended the redacted portion of these e-mails\nto be communicated to Mr. Synnott for the purpose of obtaining legal advice. Thus, the Court\nconcludes that these three e-mails are protected by the attorney-client privilege.\nThe Court does not find, however, that the remaining redacted material in the e-mail string is\nprotected by the attorney-client privilege. Regarding the redacted material in Mr. Michaud\'s\nSeptember 21, 2010 e-mails at 10:49 a.m. and 1:31 p.m., as with Mr. Michaud\'s 10:11 a.m. email on September 20, 2010 from Document 215, the Court is not persuaded that Mr. Michaud\nproviding his opinion to Mr. O\xe2\x80\x99Donnell about Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s comments about a lawyer\xe2\x80\x99s draft\ndocument is protected under the attorney-client privilege. This is especially true, where, as here,\nthe Court cannot discern what \xe2\x80\x9copinion\xe2\x80\x9d about Mr. O\xe2\x80\x99Donnell\'s comments, if any, Mr. Michaud is\ncommunicating. Mr. Michaud\xe2\x80\x99s two e-mails in this string do not divulge anything about Mr.\nSynnott\xe2\x80\x99s underlying communications in the draft letter, or anything about Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c451\ncomments about the letter. Accordingly, the Court concludes that the redacted portions of Mr.\nMichaud\xe2\x80\x99s e-mails are not shielded by the attorney-client privilege.\nHowever, the work product doctrine does shield the redacted portions of Mr. Michaud\xe2\x80\x99s e-mails\nfrom disclosure. The redacted statements clearly qualify as a document prepared by a party in\nanticipation of litigation. Mr. Keating has made no claim of substantial need or undue hardship\nthat would justify disclosure.\nFinally, the redacted information in Mr. O\xe2\x80\x99Donnell\xe2\x80\x99s 10:53 a.m. e-mail on September 21, 2010 is\nnot protected from disclosure by the attorney-client privilege because there is no indication that\nhe intended his redacted statements to be communicated to Mr. Synnott and the statement\ndoes not request an opinion of law, legal services, or assistance in a legal matter. However, this\ndocument is entitled in work product protection for the same reasons as Mr. Michaud\xe2\x80\x99s e-mails.\nAccordingly, the Court finds that the attorney-client privilege and/or the work product doctrine\nshields the redacted portions of these documents from disclosure.\nF. Document 240\nDocument 240 is a September 2010 string of e-mails between or among Mr. Michaud, Mr.\nO\xe2\x80\x99Donnell, and Mr. Synnott regarding revisions to Equisoft\xe2\x80\x99s September 2010 draft letter to Mr.\nKeating\xe2\x80\x99s attorney. Equisoft produced the document to Mr. Keating but redacted Mr. Synnott\xe2\x80\x99s\n10:30 a.m. e-mail on September 22, 2010 to Mr. Michaud, and Mr. Michaud\xe2\x80\x99s 12:15 p.m. e-mail\nto Mr. O\'Donnell.\nMr. Michaud has affirmed that Mr. Synnott\xe2\x80\x99s letter to him \xe2\x80\x9cconsists of Mr. Synnott\xe2\x80\x99s comments\nregarding a draft of his response to Ms. Sussman\xe2\x80\x99s demand letter,\xe2\x80\x9d and his e-mail to Mr.\nO\'Donnell \xe2\x80\x9cconsists of his comments regarding that draft of Mr. Synnott\xe2\x80\x99s letter and the timing of\nthe sending of the final version.\xe2\x80\x9d\nMr. Synnott\xe2\x80\x99s e-mail to Mr. Michaud is protected by the attorney-client privilege because it is a\ncommunication from an attorney to a client \xe2\x80\x9crelating to a fact of which the attorney was informed\nby his client for the purpose of securing either an opinion of law, legal services or assistance in\na legal matter.\xe2\x80\x9d\nThe redacted portion of Mr. Michaud\xe2\x80\x99s e-mail to Mr. O\xe2\x80\x99Donnell is not protected by the attorney\nclient privilege, however, because, as noted above, the personal opinion or comments from a\nnon-lawyer to another non-lawyer about communications from a lawyer are not protected under\nthe attorney client privilege. Rather, only the communications to or from the attorney are\nprotected. Accordingly, Mr. Michaud\xe2\x80\x99s e-mail is not shielded from disclosure by the attorneyclient privilege.\nHowever, the work product doctrine does shield the redacted portions of Mr. Michaud\xe2\x80\x99s e-mail\nfrom disclosure. The redacted statements are contained in a document prepared by a party in\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c452\nanticipation of litigation. Mr. Keating has made no claim of substantial need or undue hardship\nthat would justify disclosure.\nAccordingly, the Court finds that the privilege attaches to Mr. Synnott\'s e-mail, and the work\nproduct doctrine shields Mr. Michaud\xe2\x80\x99s e-mail from disclosure.\nG. Document 253\nDocument 253 is a November 17, 2010 Executive Summary presented to the Equisoft Board of\nDirectors, the last paragraph of which reports on Ms. Sussman\xe2\x80\x99s September 2, 2010 demand\nletter and provides Mr. Synnott\xe2\x80\x99s assessment regarding the probability of litigation. Equisoft has\nwithheld the entire document \xe2\x80\x94 the final paragraph on work product and attorney-client\nprivilege grounds and the rest because it is irrelevant to the subject lawsuit.\nAs an initial matter, the Court agrees that all but the last paragraph of this document is\ncompletely irrelevant to the subject lawsuit. Accordingly, it need not be disclosed.\nWith respect to the one relevant paragraph of the document, Mr. Michaud asserts that \xe2\x80\x9calong\nwith Mr. Romero and Equisoft Finance Director Aurora Ciugulan,\xe2\x80\x9d he prepared the document for\nEquisoft\xe2\x80\x99s seven board of directors, Equisoft\xe2\x80\x99s Chief Information Officer Nicolas Ledoux,\nEquisoft Lead Architect Stephane Boutros, and Equisoft VP for Financial Products Jonathan\nGeorges. Mr. Michaud asserts that \xe2\x80\x9cthe final paragraph recounts Mr. Synnott\xe2\x80\x99s assessment of\nthe probability of Mr. Keating commencing litigation against Equisoft.\xe2\x80\x9d\nThe evidence submitted to the Court is insufficient to establish that the attorney-client privilege\nprotects this document from disclosure. First, Mr. Michaud and Mr. Romero have attested that\nbeyond the named individuals, they are \xe2\x80\x9cnot aware of any further distribution of the document.\xe2\x80\x9d\nIndeed, Equisoft has not and cannot argue that Document 253 was seen only by the individuals\ndiscussed above. Regardless, even if the document was limited to these individuals, many of\nthem were outside the group of senior management who Equisoft has indicated was responsible\nfor making strategic decisions related to the legal issues involving Mr. Keating.\nMoreover, contrary to Mr. Michaud\xe2\x80\x99s assertions, only the final sentence of the Executive\nSummary \xe2\x80\x94 rather than the final paragraph \xe2\x80\x94 recounts Mr. Synnott\xe2\x80\x99s assessment of the\nprobability of Mr. Keating commencing litigation against Equisoft. The remainder of the\nparagraph merely recounts underlying facts that are not shielded by the attorney-client privilege.\nNothing in the Executive Summary or in any of the supporting affidavits suggests that Mr.\nSynnott drafted these underlying facts. In fact, Mr. Michaud attested that he, not Mr. Synnott,\nprepared the final paragraph of the document. Only the last sentence offers any assessment by\nMr. Synnott of the probability of litigation. Accordingly, the Court cannot conclude that Document\n253 is fully shielded from disclosure by the attorney-client privilege.\nNor can the Court conclude that the work product doctrine shields this document from\ndisclosure. Mr. Michaud asserts that \xe2\x80\x9che prepared the final paragraph because of potential\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c453\nlitigation with Mr. Keating,\xe2\x80\x9d but a document \xe2\x80\x9cfalls within the scope of the work-product doctrine\nonly if it was prepared primarily in anticipation of future litigation.\xe2\x80\x9d \xe2\x80\x9cDocuments created in the\nordinary course of business, even if useful in subsequent litigation, are not protected by the\nwork-product doctrine.\xe2\x80\x9d Here, the Court cannot conclude that the executive summary was\nprepared primarily in anticipation of litigation. To the contrary, the purpose of the document was\nto update the board of directors on various issues facing the company, including the demand\nletter sent by Mr. Keating.\nAccordingly, the Court finds that the last paragraph of Document 253 must be disclosed, but the\nremainder of the document may remain redacted on the basis of attorney-client privilege.\nIV. CONCLUSION\nIn light of the foregoing, the twenty-four documents that Equisoft has redacted on the basis of\nattorney client privilege and/or the work product doctrine may remain redacted as presented to\nthe Court in Equisoft\'s March 23, 2012 submission, but Equisoft shall produce Document 253 in\nredacted form as discussed above.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c454\n5.5: Corporate Privilege\nWhen an attorney represents an organization, the default position of the law is that the client is\nthe organization, and not its agents. However, an attorney representing an organization can\nform an attorney-client relationship with one or more agents of the organization, in addition to or\ninstead of the organization itself, by explicit agreement. For example, an attorney could\nrepresent a particular agent of the organization, or a component of the organization, like its\nboard of directors.\nWhen an attorney-client relationship exists between an attorney and an organization, the\nattorney-client privilege may protect communications between the attorney and the organization.\nAs a practical matter, the privilege may protect communications between the attorney and\ncertain agents of the organization. Courts must determine whether the privilege applies to\ncommunications with particular agents and about particular subjects.\nWhen an attorney represents an organization, the attorney-client privilege belongs to the\norganization, not its agents. Accordingly, only the organization can waive the privilege. While an\nagent of the organization must effectuate the waiver, agents may waive the privilege only for the\nbenefit of the organization, not for their own personal benefit or the benefit of any third-party. In\naddition, the organization may waive the privilege without the consent of the agent or agents\nwho participated in the communication.\nOf course, the agents of an organization may form an attorney-client relationship with their own\nattorney, in which case their communications with their attorney may also be protected by the\nattorney-client privilege. But the agents of an organization may not personally claim the privilege\nin relation to communications they made as agents of the organization.\nWhile the attorney-client privilege may protect communications between an attorney\nrepresenting an organization and the agents of that organization, it does not necessarily protect\nall such communications, only those for the purpose of providing legal advice. And it does not\nnecessarily protect communications with all agents. A small minority of states apply the \xe2\x80\x9ccontrol\ngroup\xe2\x80\x9d test, which provides that the privilege only protects communications with the\nmanagement of the organization. But most states and the federal courts apply the \xe2\x80\x9cUpjohn\xe2\x80\x9d test\nadopted by the Supreme Court, under which the privilege can protect communications with any\nagent, so long as the communication was for the purpose of providing legal advice, including the\ncollection of information for the purpose of providing legal advice.\nThe \xe2\x80\x9cUpjohn\xe2\x80\x9d Test for Corporate Privilege\nUpjohn Co. v. United States, 449 U.S. 383 (1981)\nSummary: The Supreme Court held that the attorney-client privilege applies to an\norganization\xe2\x80\x99s attorney\xe2\x80\x99s communications with its agents: 1) when a communication is\nmade to the organization\xe2\x80\x99s counsel that is acting in their capacity as counsel (and not as\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c455\nbusiness consultants, for example); 2) at the direction of management for the purpose of\nsecuring legal advice from counsel; 3) concerning a subject within the scope of\nemployment; and 4) when the agent knows that the purpose of the communication is for\nthe organization to procure legal advice.\nJUSTICE REHNQUIST delivered the opinion of the Court.\nWe granted certiorari in this case to address important questions concerning the scope of the\nattorney-client privilege in the corporate context and the applicability of the work-product\ndoctrine in proceedings to enforce tax summonses. With respect to the privilege question the\nparties and various amici have described our task as one of choosing between two \xe2\x80\x9ctests\xe2\x80\x9d which\nhave gained adherents in the courts of appeals. We are acutely aware, however, that we sit to\ndecide concrete cases and not abstract propositions of law. We decline to lay down a broad rule\nor series of rules to govern all conceivable future questions in this area, even were we able to\ndo so. We can and do, however, conclude that the attorney-client privilege protects the\ncommunications involved in this case from compelled disclosure and that the work-product\ndoctrine does apply in tax summons enforcement proceedings.\nI\nPetitioner Upjohn Co. manufactures and sells pharmaceuticals here and abroad. In January\n1976 independent accountants conducting an audit of one of Upjohn\xe2\x80\x99s foreign subsidiaries\ndiscovered that the subsidiary made payments to or for the benefit of foreign government\nofficials in order to secure government business. The accountants so informed petitioner Mr.\nGerard Thomas, Upjohn\xe2\x80\x99s Vice President, Secretary, and General Counsel. Thomas is a\nmember of the Michigan and New York Bars, and has been Upjohn\xe2\x80\x99s General Counsel for 20\nyears. He consulted with outside counsel and R. T. Parfet, Jr., Upjohn\xe2\x80\x99s Chairman of the Board.\nIt was decided that the company would conduct an internal investigation of what were termed\n\xe2\x80\x9cquestionable payments.\xe2\x80\x9d As part of this investigation the attorneys prepared a letter containing\na questionnaire which was sent to \xe2\x80\x9cAll Foreign General and Area Managers\xe2\x80\x9d over the\nChairman\xe2\x80\x99s signature. The letter began by noting recent disclosures that several American\ncompanies made \xe2\x80\x9cpossibly illegal\xe2\x80\x9d payments to foreign government officials and emphasized\nthat the management needed full information concerning any such payments made by Upjohn.\nThe letter indicated that the Chairman had asked Thomas, identified as \xe2\x80\x9cthe company\'s General\nCounsel,\xe2\x80\x9d \xe2\x80\x9cto conduct an investigation for the purpose of determining the nature and magnitude\nof any payments made by the Upjohn Company or any of its subsidiaries to any employee or\nofficial of a foreign government.\xe2\x80\x9d The questionnaire sought detailed information concerning such\npayments. Managers were instructed to treat the investigation as \xe2\x80\x9chighly confidential\xe2\x80\x9d and not to\ndiscuss it with anyone other than Upjohn employees who might be helpful in providing the\nrequested information. Responses were to be sent directly to Thomas. Thomas and outside\ncounsel also interviewed the recipients of the questionnaire and some 33 other Upjohn officers\nor employees as part of the investigation.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c456\nOn March 26, 1976, the company voluntarily submitted a preliminary report to the Securities and\nExchange Commission on Form 8-K disclosing certain questionable payments. A copy of the\nreport was simultaneously submitted to the Internal Revenue Service, which immediately began\nan investigation to determine the tax consequences of the payments. Special agents conducting\nthe investigation were given lists by Upjohn of all those interviewed and all who had responded\nto the questionnaire. On November 23, 1976, the Service issued a summons demanding\nproduction of:\nAll files relative to the investigation conducted under the supervision of Gerard Thomas\nto identify payments to employees of foreign governments and any political contributions\nmade by the Upjohn Company or any of its affiliates since January 1, 1971 and to\ndetermine whether any funds of the Upjohn Company had been improperly accounted\nfor on the corporate books during the same period.\nThe records should include but not be limited to written questionnaires sent to managers\nof the Upjohn Company\xe2\x80\x99s foreign affiliates, and memorandums or notes of the interviews\nconducted in the United States and abroad with officers and employees of the Upjohn\nCompany and its subsidiaries.\nThe company declined to produce the documents specified in the second paragraph on the\ngrounds that they were protected from disclosure by the attorney-client privilege and constituted\nthe work product of attorneys prepared in anticipation of litigation. On August 31, 1977, the\nUnited States filed a petition seeking enforcement of the summons in the United States District\nCourt for the Western District of Michigan. That court adopted the recommendation of a\nMagistrate who concluded that the summons should be enforced. Petitioners appealed to the\nCourt of Appeals for the Sixth Circuit which rejected the Magistrate\'s finding of a waiver of the\nattorney-client privilege, but agreed that the privilege did not apply \xe2\x80\x9cto the extent that the\ncommunications were made by officers and agents not responsible for directing Upjohn\xe2\x80\x99s\nactions in response to legal advice for the simple reason that the communications were not the\n\xe2\x80\x98client\xe2\x80\x99s.\xe2\x80\x99\xe2\x80\x9d The court reasoned that accepting petitioners\xe2\x80\x99 claim for a broader application of the\nprivilege would encourage upper-echelon management to ignore unpleasant facts and create\ntoo broad a \xe2\x80\x9czone of silence.\xe2\x80\x9d Noting that Upjohn\xe2\x80\x99s counsel had interviewed officials such as the\nChairman and President, the Court of Appeals remanded to the District Court so that a\ndetermination of who was within the \xe2\x80\x9ccontrol group\xe2\x80\x9d could be made. In a concluding footnote the\ncourt stated that the work-product doctrine \xe2\x80\x9cis not applicable to administrative summonses.\xe2\x80\x9d\nII\nFederal Rule of Evidence 501 provides that \xe2\x80\x9cthe privilege of a witness shall be governed by the\nprinciples of the common law as they may be interpreted by the courts of the United States in\nlight of reason and experience.\xe2\x80\x9d The attorney-client privilege is the oldest of the privileges for\nconfidential communications known to the common law. Its purpose is to encourage full and\nfrank communication between attorneys and their clients and thereby promote broader public\ninterests in the observance of law and administration of justice. The privilege recognizes that\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c457\nsound legal advice or advocacy serves public ends and that such advice or advocacy depends\nupon the lawyer\xe2\x80\x99s being fully informed by the client. \xe2\x80\x9cThe lawyer-client privilege rests on the\nneed for the advocate and counselor to know all that relates to the client\'s reasons for seeking\nrepresentation if the professional mission is to be carried out.\xe2\x80\x9d The purpose of the privilege is \xe2\x80\x9cto\nencourage clients to make full disclosure to their attorneys.\xe2\x80\x9d This rationale for the privilege has\nlong been recognized by the Court. Admittedly complications in the application of the privilege\narise when the client is a corporation, which in theory is an artificial creature of the law, and not\nan individual; but this Court has assumed that the privilege applies when the client is a\ncorporation, and the Government does not contest the general proposition.\nThe Court of Appeals, however, considered the application of the privilege in the corporate\ncontext to present a \xe2\x80\x9cdifferent problem,\xe2\x80\x9d since the client was an inanimate entity and \xe2\x80\x9conly the\nsenior management, guiding and integrating the several operations, can be said to possess an\nidentity analogous to the corporation as a whole.\xe2\x80\x9d\nSuch a view, we think, overlooks the fact that the privilege exists to protect not only the giving of\nprofessional advice to those who can act on it but also the giving of information to the lawyer to\nenable him to give sound and informed advice. The first step in the resolution of any legal\nproblem is ascertaining the factual background and sifting through the facts with an eye to the\nlegally relevant. See ABA Code of Professional Responsibility, Ethical Consideration 4-1:\nA lawyer should be fully informed of all the facts of the matter he is handling in order for\nhis client to obtain the full advantage of our legal system. It is for the lawyer in the\nexercise of his independent professional judgment to separate the relevant and\nimportant from the irrelevant and unimportant. The observance of the ethical obligation\nof a lawyer to hold inviolate the confidences and secrets of his client not only facilitates\nthe full development of facts essential to proper representation of the client but also\nencourages laymen to seek early legal assistance.\nIn the case of the individual client the provider of information and the person who acts on the\nlawyer\xe2\x80\x99s advice are one and the same. In the corporate context, however, it will frequently be\nemployees beyond the control group as defined by the court below\xe2\x80\x94\xe2\x80\x9dofficers and agents\nresponsible for directing the company\xe2\x80\x99s actions in response to legal advice\xe2\x80\x9d \xe2\x80\x94who will possess\nthe information needed by the corporation\'s lawyers. Middle-level\xe2\x80\x94and indeed lower-level\xe2\x80\x94\nemployees can, by actions within the scope of their employment, embroil the corporation in\nserious legal difficulties, and it is only natural that these employees would have the relevant\ninformation needed by corporate counsel if he is adequately to advise the client with respect to\nsuch actual or potential difficulties.\nIn a corporation, it may be necessary to glean information relevant to a legal problem\nfrom middle management or non-management personnel as well as from top executives.\nThe attorney dealing with a complex legal problem \xe2\x80\x9cis thus faced with a \xe2\x80\x98Hobson\'s\nchoice\xe2\x80\x99. If he interviews employees not having \xe2\x80\x98the very highest authority\xe2\x80\x99, their\ncommunications to him will not be privileged. If, on the other hand, he interviews only\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c458\nthose employees with \xe2\x80\x98the very highest authority\xe2\x80\x99, he may find it extremely difficult, if not\nimpossible, to determine what happened.\xe2\x80\x9d\nThe control group test adopted by the court below thus frustrates the very purpose of the\nprivilege by discouraging the communication of relevant information by employees of the client\nto attorneys seeking to render legal advice to the client corporation. The attorney\xe2\x80\x99s advice will\nalso frequently be more significant to noncontrol group members than to those who officially\nsanction the advice, and the control group test makes it more difficult to convey full and frank\nlegal advice to the employees who will put into effect the client corporation\xe2\x80\x99s policy.\nThe narrow scope given the attorney-client privilege by the court below not only makes it difficult\nfor corporate attorneys to formulate sound advice when their client is faced with a specific legal\nproblem but also threatens to limit the valuable efforts of corporate counsel to ensure their\nclient\'s compliance with the law. In light of the vast and complicated array of regulatory\nlegislation confronting the modern corporation, corporations, unlike most individuals, \xe2\x80\x9cconstantly\ngo to lawyers to find out how to obey the law,\xe2\x80\x9d particularly since compliance with the law in this\narea is hardly an instinctive matter. The test adopted by the court below is difficult to apply in\npractice, though no abstractly formulated and unvarying \xe2\x80\x9ctest\xe2\x80\x9d will necessarily enable courts to\ndecide questions such as this with mathematical precision. But if the purpose of the attorneyclient privilege is to be served, the attorney and client must be able to predict with some degree\nof certainty whether particular discussions will be protected. An uncertain privilege, or one which\npurports to be certain but results in widely varying applications by the courts, is little better than\nno privilege at all. The very terms of the test adopted by the court below suggest the\nunpredictability of its application. The test restricts the availability of the privilege to those\nofficers who play a \xe2\x80\x9csubstantial role\xe2\x80\x9d in deciding and directing a corporation\'s legal response.\nDisparate decisions in cases applying this test illustrate its unpredictability.\nThe communications at issue were made by Upjohn employees to counsel for Upjohn acting as\nsuch, at the direction of corporate superiors in order to secure legal advice from counsel. As the\nMagistrate found, \xe2\x80\x9cMr. Thomas consulted with the Chairman of the Board and outside counsel\nand thereafter conducted a factual investigation to determine the nature and extent of the\nquestionable payments and to be in a position to give legal advice to the company with respect\nto the payments.\xe2\x80\x9d Information, not available from upper-echelon management, was needed to\nsupply a basis for legal advice concerning compliance with securities and tax laws, foreign laws,\ncurrency regulations, duties to shareholders, and potential litigation in each of these areas. The\ncommunications concerned matters within the scope of the employees\xe2\x80\x99 corporate duties, and\nthe employees themselves were sufficiently aware that they were being questioned in order that\nthe corporation could obtain legal advice. The questionnaire identified Thomas as \xe2\x80\x9cthe\ncompany\'s General Counsel\xe2\x80\x9d and referred in its opening sentence to the possible illegality of\npayments such as the ones on which information was sought. A statement of policy\naccompanying the questionnaire clearly indicated the legal implications of the investigation. The\npolicy statement was issued \xe2\x80\x9cin order that there be no uncertainty in the future as to the policy\nwith respect to the practices which are the subject of this investigation.\xe2\x80\x9d It began \xe2\x80\x9cUpjohn will\ncomply with all laws and regulations,\xe2\x80\x9d and stated that commissions or payments \xe2\x80\x9cwill not be\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c459\nused as a subterfuge for bribes or illegal payments\xe2\x80\x9d and that all payments must be \xe2\x80\x9cproper and\nlegal.\xe2\x80\x9d Any future agreements with foreign distributors or agents were to be approved \xe2\x80\x9cby a\ncompany attorney\xe2\x80\x9d and any questions concerning the policy were to be referred \xe2\x80\x9cto the\ncompany\xe2\x80\x99s General Counsel.\xe2\x80\x9d This statement was issued to Upjohn employees worldwide, so\nthat even those interviewees not receiving a questionnaire were aware of the legal implications\nof the interviews. Pursuant to explicit instructions from the Chairman of the Board, the\ncommunications were considered \xe2\x80\x9chighly confidential\xe2\x80\x9d when made, and have been kept\nconfidential by the company. Consistent with the underlying purposes of the attorney-client\nprivilege, these communications must be protected against compelled disclosure.\nThe Court of Appeals declined to extend the attorney-client privilege beyond the limits of the\ncontrol group test for fear that doing so would entail severe burdens on discovery and create a\nbroad \xe2\x80\x9czone of silence\xe2\x80\x9d over corporate affairs. Application of the attorney-client privilege to\ncommunications such as those involved here, however, puts the adversary in no worse position\nthan if the communications had never taken place. The privilege only protects disclosure of\ncommunications; it does not protect disclosure of the underlying facts by those who\ncommunicated with the attorney:\nThe protection of the privilege extends only to communications and not to facts. A fact is\none thing and a communication concerning that fact is an entirely different thing. The\nclient cannot be compelled to answer the question, \xe2\x80\x9cWhat did you say or write to the\nattorney?\xe2\x80\x9d but may not refuse to disclose any relevant fact within his knowledge merely\nbecause he incorporated a statement of such fact into his communications to his\nattorney.\nHere the Government was free to question the employees who communicated with Thomas and\noutside counsel. Upjohn has provided the IRS with a list of such employees, and the IRS has\nalready interviewed some 25 of them. While it would probably be more convenient for the\nGovernment to secure the results of petitioner\'s internal investigation by simply subpoenaing the\nquestionnaires and notes taken by petitioner\'s attorneys, such considerations of convenience do\nnot overcome the policies served by the attorney-client privilege. As Justice Jackson noted in\nhis concurring opinion in Hickman v. Taylor: \xe2\x80\x9cDiscovery was hardly intended to enable a learned\nprofession to perform its functions on wits borrowed from the adversary.\xe2\x80\x9d\nNeedless to say, we decide only the case before us, and do not undertake to draft a set of rules\nwhich should govern challenges to investigatory subpoenas. Any such approach would violate\nthe spirit of Federal Rule of Evidence 501. While such a \xe2\x80\x9ccase-by-case\xe2\x80\x9d basis may to some\nslight extent undermine desirable certainty in the boundaries of the attorney-client privilege, it\nobeys the spirit of the Rules. At the same time we conclude that the narrow \xe2\x80\x9ccontrol group test\xe2\x80\x9d\nsanctioned by the Court of Appeals in this case cannot, consistent with \xe2\x80\x9cthe principles of the\ncommon law as interpreted in the light of reason and experience,\xe2\x80\x9d govern the development of\nthe law in this area.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c460\n\n1. Which agents of an organization can be parties to privileged communications?\n2. When is a communication with an agent of an organization not privileged?\n3. Is the Upjohn test for corporate privilege too narrow, too broad, or just right?\nMatter of Bevill, Bresler & Schulman Asset Manag., 805 F. 2d 120 (3d Cir. 1986)\nSummary:\nSEITZ, Circuit Judge.\nThis appeal arises out of two related proceedings currently before the district court: the Chapter\n11 reorganization of Bevill, Bresler & Schulman Asset Management Corporation (AMC) and the\nliquidation of Bevill, Bresler & Schulman, Inc. (BBS) under the Security Investor Protection Act\n(SIPA). Intervenors John D. Rooney and Robert L. Bevill, two principals of the corporations,\nappeal the order of the district court directing Gilbert Schulman, president of AMC, and Hellring,\nLindeman, Goldstein, Siegal & Greenberg, counsel for BBS, to respond to questions posed in\ndepositions by the trustees for AMC and BBS. The order permits the trustees to discover the\nsubstance of certain meetings that took place between the law firm and the principals of the\ncorporations before the Chapter 11 petition was filed. Because Rooney and Bevill allege that the\ndistrict court\'s order violates their attorney-client privilege, we have jurisdiction.\nI.\nWe turn first to the facts as narrated by the district court. Gilbert Schulman first became aware\nthat AMC was in financial difficulties on March 19, 1985, when Robert Bevill telephoned him in\nGreece. After talking again with Bevill on the following day, Schulman flew back to the United\nStates. According to Schulman, he was unable to obtain any information about AMC until he\nconsulted with Hellring, Lindeman on March 25, 1985.\nBetween March 25, 1985 and April 7, 1985, Schulman met with Hellring, Lindeman almost daily.\nOther principals of BBS and AMC, including Bevill and Rooney, were present at some of these\nmeetings.\nWhen Schulman first met with Hellring, Lindeman, he explained that he was seeking both\npersonal and corporate legal advice. In his deposition, he testified that with regard to the March\n26th meeting:\nI stated to Mr. Hellring and Mr. Goldstein that I had arranged for Mr. Bevill to come down\nand meet them and at that point I had said to them that \xe2\x80\x9cPossibly you will represent me,\npossibly you will represent Mr. Bevill and me, possibly you will represent the firms,\xe2\x80\x9d but I\nwas definitely seeking personal legal advice at that time.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c461\nOn March 31, 1985, Hellring, Lindeman was retained to represent BBS. In addition, it continued\nto consider whether it would represent the principals of BBS. On April 4, 1985, Hellring,\nLindeman informed the principals that they should obtain separate counsel.\nOn April 7, 1985, AMC filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code.\nA trustee was subsequently appointed by the district court. On April 8, the SEC filed a civil\ncomplaint in the district court alleging fraud against AMC, BBS, and the principals of the\ncorporations, including appellants. In addition, the SEC began a criminal investigation, and there\nis currently a grand jury investigation into the affairs of the two corporations. On May 8, the\ndistrict court placed BBS under a SIPA receivership and the SIPA trustee commenced a\nliquidation proceeding.\nOn May 13, 1985, the counsel for the AMC trustee began to depose Schulman. By the consent\nof the parties, this deposition was conducted as a joint proceeding in the AMC Chapter 11\nproceeding, the BBS SIPA liquidation, and the SEC proceeding. The AMC trustee sought to\ndepose Schulman as to the substantive communications between Hellring, Lindeman and the\nprincipals, and indicated that the trustee had waived AMC\'s attorney-client privilege. Schulman\'s\ncounsel instructed Schulman not to answer the questions. Counsel for the other principals also\ninstructed Schulman not to respond, asserting the existence of a joint defense privilege.\nOn May 21, 1985, the deposition of Schulman resumed, and the AMC trustee began\nquestioning Schulman about the circumstances surrounding the meetings with counsel,\nincluding the dates of the meetings, who was present, and whether the discussions involved\npersonal or corporate matters. Once again, counsel for the other principals objected on the\ngrounds of a joint defense privilege.\nThe AMC and BBS trustees and the SEC subsequently filed motions with the district court for an\norder directing the principals and Hellring Lindeman to respond to a series of questions as to the\ncircumstances surrounding the meetings. In opposition to these motions, Rooney filed an\nunsworn affirmation with the district court stating that he met with counsel for personal advice\nand with the expectation that the communications would be confidential. He further stated that\nhe would not have met with counsel without the assurance of confidentiality.\nAfter a hearing, the district court ordered Bevill, Rooney, Schulman, Robert Levine, another\nprincipal, and Hellring, Lindeman to answer written interrogatories about the scope of counsel\'s\nrepresentation. Bevill and Rooney refused to answer the interrogatories on the ground of the\nfifth amendment. Schulman stated that he attended all meetings except the March 31st meeting\nfor the purpose of securing personal legal advice. Levine concurred in this statement, and also\nstated that the participants in the meetings were engaged in a joint defense effort. Schulman,\nhowever, has asserted in a letter to the BBS trustee from his counsel that he was never part of a\njoint defense.\nHellring, Lindeman confirmed in their answers to the interrogatories that the principals had\nsought both personal and corporate legal advice at the meetings that occurred from March 25th\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c462\nthrough April 4th. In a letter to the BBS trustee, it further explained its understanding of its\nrepresentation:\nOur firm was initially consulted on Monday, March 25, 1985. On that date and during the\nweek of March 25, 1985 we were consulted by officials of Bevill, Bresler & Schulman,\nInc. on a confidential and privileged basis for the purpose of personal representation as\nwell as corporate representation of Bevill, Bresler & Schulman, Inc. and other\ncompanies.\nWe were not retained until Sunday, March 31, 1985 on which date we agreed to\nrepresent Bevill, Bresler & Schulman, the broker/dealer and its affiliated broker/dealer\ncompanies and to consider further the matter of representation for the individuals and\nother corporations.\nDuring the next few days we continued to be consulted by officials of Bevill, Bresler &\nSchulman, Inc. on a confidential and privileged basis for purposes of personal\nrepresentation and to consider the need therefor.\nWithin a few days of March 31, 1985 we advised each individual official to retain\nseparate and individual counsel.\nThe trustees, relying on their waiver of the corporations\xe2\x80\x99 attorney-client privileges, moved for an\norder directing Schulman and Hellring, Lindeman to testify about the substance of the meetings\ninsofar as they related to the affairs of the two corporations and Schulman\'s activities as a\ndirector or officer of the corporations. Bevill and Rooney opposed the motions based on their\nattorney-client privileges and a joint defense privilege.\nAfter hearing argument from counsel on the trustees\' motions, the district court, in an oral\nopinion, granted the motions in part. The court held that a corporate officer must satisfy the\nfollowing test to assert a personal claim of attorney-client privilege as to communications with\ncorporate counsel:\nFirst, they must show they approached counsel for the purpose of seeking legal advice.\nSecond, they must demonstrate that when they approached counsel they made it clear\nthat they were seeking legal advice in their individual rather than in their representative\ncapacities. Third, they must demonstrate that the counsel saw fit to communicate with\nthem in their individual capacities, knowing that a possible conflict could arise. Fourth,\nthey must prove that their conversations with counsel were confidential. And, fifth, they\nmust show that the substance of their conversations with counsel did not concern\nmatters within the company or the general affairs of the company.\nThe court rejected Rooney\xe2\x80\x99s claim that he consulted with counsel for the sole or primary\npurpose of securing personal legal advice, finding such a claim unsupported by the evidence. It\nthen turned to the principals\xe2\x80\x99 contention that the corporate communications were\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c463\nindistinguishable from those that related to their personal legal problems, and that, therefore, all\ncommunications are privileged. The court agreed with Bevill and Rooney insofar as the trustees\nsought to obtain information about meetings prior to March 31st when Hellring, Lindeman\nagreed to represent BBS. The court thus held that these communications were privileged. The\ntrustees do not appeal this ruling.\nIt, however, rejected the appellants claim of a blanket privilege for those meetings that occurred\nafter March 31st. It found that once Hellring, Lindeman agreed to represent BBS, it was to BBS\nthat the lawyers owed any duty. Further, based on counsel\xe2\x80\x99s knowledge of BBS and AMC when\nthe bankruptcy petition was filed, the court found that \xe2\x80\x9cit is obvious that immediately after March\n31, 1985, Hellring, Lindeman turned its attention to the affairs of its corporate clients.\xe2\x80\x9d Finally,\nthe court stated that the only personal advice that had been identified was that relating to\nseparate representation.\nThe court also rejected Bevill\xe2\x80\x99s and Rooney\xe2\x80\x99s claim of a joint defense privilege, finding that they\ndid not bear their burden of showing that a joint defense in fact existed.\nThe district court ordered Hellring, Lindeman to testify as to all communications about the\ncorporations and the roles and functions of the officers that took place after the law firm agreed\nto represent BBS. It further held that no questions could be asked concerning separate\nrepresentation or the officers\' potential personal liabilities, unless the communications also\nrelated to the business and assets of the corporations or the roles of the principals in the\ncorporations. Finally, the court stated that Hellring, Lindeman could submit any communications\nit was doubtful about to the court for in camera inspection. This appeal followed.\nII.\nBevill and Rooney claim that the district court\xe2\x80\x99s order directing disclosure of the substantive\ncommunications with counsel between March 31st and April 4th violates their attorney-client\nprivilege. In addition, Bevill claims that such disclosure is barred by the joint defense privilege.\nPrivileges in federal court are \xe2\x80\x9cgoverned by the principles of common law as they may be\ninterpreted in light of reason and experience.\xe2\x80\x9d Whether there is a valid claim of privilege is\ndecided on a case-by-case basis. Although the applicability of a privilege is a factual question,\ndetermining the scope of a privilege is a question of law, subject to plenary review.\nA.\nThe purpose of the attorney-client privilege \xe2\x80\x9cis to encourage full and frank communication\nbetween attorneys and their clients and thereby promote broader public interests in observance\nof the law and administration of justice.\xe2\x80\x9d This privilege applies to corporations as well as\nindividuals. As the Supreme Court has recognized, however, \xe2\x80\x9cthe administration of the privilege\nin the case of corporations presents special problems. As an inanimate entity, a corporation\nmust act through agents.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c464\n\nIn this case, we address the relationship between a corporation\xe2\x80\x99s waiver of its privilege and the\nindividual directors\xe2\x80\x99 assertion of a claim of personal attorney-client privilege with respect to\ncounsel consulted on both a personal and corporate basis after the counsel has been retained\nby the corporation. The parties agree that the trustees had the power to waive the corporations\xe2\x80\x99\nattorney-client privilege regarding prebankruptcy communications with counsel. They also agree\nthat the directors or officers may have an individual attorney-client privilege apart from those of\nthe corporations. The dispute centers on whether the individuals\xe2\x80\x99 assertion of an attorney-client\nprivilege can prevent the disclosure of corporate communications with corporate counsel when\nthe corporation\xe2\x80\x99s privilege has been waived.\nAs we understand appellants\xe2\x80\x99 position, they claim that the district court erred as a matter of law\nin holding that communications related to their role as corporate officers were not privileged.\nThey contend that because their personal legal problems were inextricably intertwined with\nthose of the corporation, disclosure of discussions of corporate matters would eviscerate their\npersonal privileges. They therefore assert that a blanket privilege should be applied to all\ncommunications with counsel between March 31st and April 4th.\nThe appellants\xe2\x80\x99 argument, however, does not pay sufficient attention to the fact that under\nexisting law, any privilege that exists as to a corporate officer\xe2\x80\x99s role and functions within a\ncorporation belongs to the corporation, not the officer. Because a corporation can act only\nthrough its agents, a corporation\xe2\x80\x99s privilege consists of communications by corporate officials\nabout corporate matters and their actions in the corporation. A corporate official thus may not\nprevent a corporation from waiving its privilege arising from discussions with corporate counsel\nabout corporate matters.\nThe two decisions cited by appellants, In re Citibank v. Andros and Diversified Industries, Inc. v.\nMeredith, do not support their position that they may assert their personal privilege over the\ncorporation\'s waiver with regard to corporate matters. Rather, these two cases simply recognize\nthat an individual officer may have an individual claim of attorney-client privilege with regard to\ncommunications with corporate counsel.\nMoreover, we find that appellants\' position is contrary to the public policies identified by the\nSupreme Court. The Weintraub Court found that permitting a bankrupt corporations\xe2\x80\x99\nmanagement to assert the corporation\'s privilege against the bankruptcy trustee would defeat\nthe Bankruptcy Code\xe2\x80\x99s goal of uncovering insider fraud. To provide a blanket privilege regarding\nall discussions of corporate matters on the basis of an assertion of personal privileges by the\nofficers would prevent the trustee from investigating possible misconduct by the officers and\npermit the officers to \xe2\x80\x9cuse the privilege as a shield against the trustee\xe2\x80\x99s efforts.\xe2\x80\x9d\nThe test adopted by the district court does not invade the personal privilege of the officers\nbecause they do not have an attorney-client privilege with regard to communications made in\ntheir role as corporate officials. Moreover, the district court has not precluded the possibility that\nappellants may assert their personal privilege as to matters not related to their role as officers of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c465\nthe corporation. First, the order directs that no questions could be asked regarding the need for\nseparate representation. Second, the court allowed for the possibility that appellants could\ndemonstrate that some of the communications after March 31st were personal and protected\ncommunications relating to the principals\xe2\x80\x99 personal liabilities, except insofar as they were related\nto their role as corporate officers. Finally, the district court held that it would review in camera\nany communication over which there was a question whether it was personal or corporate in\nnature.\nIn light of the foregoing analysis, we find that that the district court\xe2\x80\x99s order properly defined the\nextent to which the principals were entitled to bar discovery of communications with counsel\nbased on their individual attorney-client privileges.\nQuestions:\n1. Under the commonly used Bevill standard, agents of an organization seeking to prove\neither a joint or separate attorney-client relationship with the organization\xe2\x80\x99s attorney must\nestablish that: 1) the employee approached the corporation\xe2\x80\x99s attorney for legal advice; 2)\nthe employee made it clear that the request had to do with matters that arose in his or\nher individual capacity; 3) the attorney understood this request and advised on the\nmatter even though there was a potential for conflict; 4) these communications were\nconfidential; and 5) the subject matter of the communication did not concern a more\ngeneral corporate matter. How frequently do you think agents will be able to satisfy\nthese criteria?\nThe \xe2\x80\x9cNeed to Know\xe2\x80\x9d Standard\nSummary:\nFTC v. GlaxoSmithKline, 294 F. 3d 141 (D.C. Cir. 2002)\nGINSBURG, Chief Judge:\nIn the course of investigating whether a manufacturer of drugs listed its patents properly in the\ncompilation maintained by the Food and Drug Administration, the Federal Trade Commission\nissued a subpoena directing the company to produce documents relating to a particular drug.\nWhen the company resisted, claiming the attorney-client privilege shields the documents, the\nCommission repaired to the district court, which enforced the subpoena. We reverse the\ndecision of the district court because the court both relied upon an argument to which the\ncompany had no opportunity to respond and ruled erroneously that, by failing to keep\nconfidential the contents of the documents, the company had waived the attorney-client\nprivilege.\nI. Background\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c466\nGlaxoSmithKline manufactures paroxteine hydrochloride hemihydrate under the brand name\nPaxil, the annual sales of which in the United States exceed $1 billion. Several companies have\napplied to the Food and Drug Administration for permission to sell generic versions of Paxil\nwhen GSK\xe2\x80\x99s patents expire. The Federal Trade Commission is investigating whether GSK, in an\nattempt to prevent or delay competition from generic versions of Paxil, has abused the process\nfor listing its patents in the FDA\xe2\x80\x99s compilation of \xe2\x80\x9cApproved Drug Products with Therapeutic\nEvaluations.\xe2\x80\x9d\nThe Commission issued a subpoena directing GSK to produce two types of documents. First,\nthe Commission sought all documents concerning Paxil that the United States District Court for\nthe Northern District of Illinois had directed GSK to disclose when GSK had sued two\nmanufacturers of generic pharmaceuticals for infringement of its patents \xe2\x80\x94 the so-called\nChicago documents. Second, the Commission wanted all \xe2\x80\x9cdocuments related to the\nmanufacturing and marketing of Paxil, the listing and use of any patents regarding Paxil, and\nany filings with the FDA regarding Paxil.\xe2\x80\x9d GSK and the Commission resolved their differences\nover the inclusion or exclusion of thousands of documents, but because GSK declined to\nproduce hundreds of others \xe2\x80\x94 primarily on the ground that they were shielded by the attorneyclient privilege \xe2\x80\x94 the Commission petitioned the district court to enforce the subpoena.\nThe parties then agreed upon a procedure for presenting their positions to the district court.\nFirst, each would submit its contentions about the Chicago documents. If the court compelled\nGSK to produce those documents, then the parties would contest the second category of\ndocuments as follows. The Commission would \xe2\x80\x9cidentify for GSK every responsive (and allegedly\nprivileged) document that the Commission sought to have produced and the reason(s) why\neach privilege claim was invalid." GSK would then either produce the document or list it in a\n\xe2\x80\x9cprivilege log identifying any documents as to which it continued to assert privilege.\xe2\x80\x9d\nAccordingly, only after the Commission had informed GSK of its objections to the Company\'s\nclaims of privilege would the parties seek judicial resolution. At that final stage the court would\neither call for oral argument or resolve summarily \xe2\x80\x9cany issues submitted to it in connection with\nthe FTC\xe2\x80\x99s enforcement petition.\xe2\x80\x9d\nThe district court did enforce the subpoena with respect to the Chicago documents. The parties\nthen resolved through negotiation their disputes about the disclosure of hundreds more\ndocuments, leaving unresolved the status of only 91. GSK asserted that all 91 documents were\nprotected by the attorney-client privilege and that 34 of them were protected also by the\nprivilege for attorney work product. The Commission told GSK it considered the assertions of\nprivilege invalid for two reasons: (1) GSK had forfeited its claim to confidentiality by\ndisseminating all 91 documents widely both within GSK and to consultants and other thirdparties; and (2) the decision in Apotex estopped GSK from asserting that the 34 documents\nwere attorney work product, that is, were prepared in anticipation of litigation. In response to\nthese objections, GSK compiled a privilege log describing each of the 91 documents, and the\nparties presented their arguments to the district court.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c467\nIn its opening brief to the district court, the Commission raised the two objections it had\npreviously presented to GSK. The Commission also introduced in that brief a new argument:\nRegardless whether Apotex foreclosed the Company\xe2\x80\x99s claim of attorney work product, GSK\xe2\x80\x99s\nprivilege log \xe2\x80\x9cfailed to provide facts demonstrating that the documents were created in\nanticipation of litigation.\xe2\x80\x9d When GSK objected that the Commission had not made this argument\nduring pre-motion negotiations, the Commission withdrew the argument. It explained in a\nStipulation approved by the district court that it had \xe2\x80\x9cinadvertently failed to provide GSK with the\nagreed advance notice regarding the grounds for challenging the documents.\xe2\x80\x9d\nGSK submitted its responsive brief to the district court and attached thereto the Company\xe2\x80\x99s\nprivilege log and the affidavit of Charles Kinzig, GSK\xe2\x80\x99s Vice President and Director of Corporate\nIntellectual Property. For each document, the log described the contents; listed the author,\nintended recipients, and date of creation; and noted whether the author or intended recipients\nwere attorneys. A supplement to the log indicated the title or titles of each person therein named\nwho was not an attorney. The Kinzig Declaration stated that the documents had been\ndisseminated to various \xe2\x80\x9cteams\xe2\x80\x9d of company employees and contractors, and explained the\nduties of each team. According to Kinzig, all the teams were \xe2\x80\x9cinvolved in seeking or giving legal\nadvice and/or gathering and recording information in anticipation of or preparation for litigation.\xe2\x80\x9d\nThe Kinzig Declaration states also that every employee and contractor named in the privilege\nlog was \xe2\x80\x9cbound not to disclose confidential information to persons outside GSK\xe2\x80\x9d without\nreceiving permission from a high-ranking official of the Company.\nThe Commission then filed a reply brief in which it made yet another argument for the first time:\nThe attorney-client privilege does not shield the documents because they contain no\nconfidential information.\nThe district court ordered GSK to produce the 91 documents. The court rejected GSK\xe2\x80\x99s claims\nof attorney-client privilege on the grounds that (1) \xe2\x80\x9cGSK had not sustained its burden of\ndemonstrating that the relevant documents were distributed on a \xe2\x80\x98need to know\xe2\x80\x99 basis or to\nemployees that were \xe2\x80\x98authorized to speak or act\xe2\x80\x99 for GSK," and (2) the Company had \xe2\x80\x9cfailed to\nprovide sufficient evidence that the information contained therein is confidential.\xe2\x80\x9d The court\nrejected GSK\xe2\x80\x99s claims of attorney work product for the reason withdrawn by the Commission,\nnamely, that \xe2\x80\x9cGSK failed to set forth objective facts that support the corporation\xe2\x80\x99s assertion that\nthe relevant documents were created in anticipation of litigation.\xe2\x80\x9d Having determined that \xe2\x80\x9ceven\nif GSK is not precluded from asserting the privilege for attorney work product, it has failed to\nsatisfy its burden of showing the applicability of the doctrine to the relevant documents,\xe2\x80\x9d the\ndistrict court found it unnecessary to resolve whether the decision in Apotex estopped GSK from\nclaiming otherwise. GSK sought and we granted a stay pending appeal.\nII. Analysis\nGSK contends the district court erred both by rejecting its claims of privilege based upon\narguments the Commission did not raise properly and by misapplying the standard for\ndetermining whether a corporation has kept confidential the contents of a communication. The\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c468\nCommission defends the decision of the district court and argues that GSK is collaterally\nestopped in any event, by reason of the Apotex litigation, from claiming the 34 documents are\nattorney work product.\nThe district court held that GSK failed to establish either of two prerequisites for recognition of\nthe attorney-client privilege \xe2\x80\x94 that the documents contain confidential information and that they\nhave been kept confidential. As the Company points out, during the parties\xe2\x80\x99 negotiations the\nCommission did not dispute that the documents contain confidential information. The\nCommission did not even raise the argument in its opening brief before the district court, waiting\ninstead until its reply brief and thereby depriving GSK of any opportunity to respond.\nThe Commission had agreed, pursuant to the Scheduling Stipulation approved by the district\ncourt, to inform GSK of its reasons for disputing the Company\'s claims of privilege before asking\nthe court for a ruling. The Commission therefore was bound not to put before the district court\nany objection not first raised with its adversary. Accordingly, the district court abused its\ndiscretion when it ruled against GSK based upon an argument that was raised not only in\nviolation of the Scheduling Stipulation but so belatedly that the Company had no chance to\nrespond to it.\nThe question that remains is whether the district court erred in ruling that GSK failed to satisfy\nthe second prerequisite for attorney-client privilege \xe2\x80\x94 that the documents have been kept\nconfidential. GSK contends that this issue, too, was raised in a manner that deprived the\nCompany of an opportunity to respond. We think not. The Commission took the position in its\nnegotiations with GSK that the Company had lost its claim of privilege by disseminating the\ndocuments widely. This argument put the Company on notice that it needed to establish it had\nkept the documents confidential. The Commission renewed the point in its opening brief to the\ndistrict court thus: \xe2\x80\x9cIn view of the breadth of distribution and GSK\xe2\x80\x99s failure to carry its burden of\nestablishing that each and every recipient had a demonstrable \xe2\x80\x98need to know,\xe2\x80\x99 GSK\xe2\x80\x99s assertions\nof attorney-client privilege must fail." And the Company joined this argument on the merits\nbefore the district court. Having defended as sufficient the evidence it submitted to the district\ncourt on this point, GSK may not now claim it was unfairly surprised by the argument.\nAlthough the district court was correct to entertain the Commission\xe2\x80\x99s second argument, it erred\nin resolving the legal issue. The applicable standard is, as the district court recognized, whether\nthe \xe2\x80\x9cthe documents were distributed on a \xe2\x80\x98need to know\xe2\x80\x99 basis or to employees that were\n\xe2\x80\x98authorized to speak or act\xe2\x80\x99 for the company.\xe2\x80\x9d The Company\xe2\x80\x99s privilege log and the affidavit of\nCharles Kinzig establish that GSK circulated the documents in question only to specifically\nnamed employees and contractors, most of whom were attorneys or managers and all of whom\n\xe2\x80\x9cneeded to provide input to the legal department and/or receive the legal advice and strategies\nformulated by counsel.\xe2\x80\x9d The affidavit also states that each intended recipient was bound by\ncorporate policy or, in the case of the contractors, by a separate understanding, to keep\nconfidential the contents of the documents. The Company\xe2\x80\x99s submission thus leads ineluctably to\nthe conclusion that no document was \xe2\x80\x9cdisseminated beyond those persons who, because of the\ncorporate structure, needed to know its contents.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c469\n\nThe district court faulted GSK for not having explained \xe2\x80\x9cwhy any, let alone all, of the employees\nreceived copies of certain documents,\xe2\x80\x9d and the Commission likewise claims on brief that GSK\nshould have shown why each individual in possession of a confidential document \xe2\x80\x9cneeded the\ninformation therein to carry out his/her work.\xe2\x80\x9d These demands are overreaching. The\nCompany\xe2\x80\x99s burden is to show that it limited its dissemination of the documents in keeping with\ntheir asserted confidentiality, not to justify each determination that a particular employee should\nhave access to the information therein. Not only would that task be Herculean \xe2\x80\x94 especially\nwhen the sender and the recipient are no longer with the Company \xe2\x80\x94 but it is wholly\nunnecessary. After all, when a corporation provides a confidential document to certain specified\nemployees or contractors with the admonition not to disseminate further its contents and the\ncontents of the documents are related generally to the employees\xe2\x80\x99 corporate duties, absent\nevidence to the contrary we may reasonably infer that the information was deemed necessary\nfor the employees\xe2\x80\x99 or contractors\xe2\x80\x99 work. We do not presume, therefore, that any business would\ninclude in a restricted circulation list a person with no reason to have access to the confidential\ndocument \xe2\x80\x94 that is, one who has no \xe2\x80\x9cneed to know.\xe2\x80\x9d\nMoreover, we can imagine no useful purpose in having a court review the business judgment of\neach corporate official who deemed it necessary or desirable for a particular employee or\ncontractor to have access to a corporate secret. It suffices instead that the corporation limited\ndissemination to specific individuals whose corporate duties relate generally to the contents of\nthe documents. As we have seen in this case, the privilege log and the Kinzig Declaration\ntogether establish that GSK did just that, and the Company thereby demonstrated its entitlement\nto the attorney-client privilege. The FTC has proffered nothing to the contrary.\nOur conclusion that the documents are protected by the attorney-client privilege extends also to\nthose communications that GSK shared with its public relations and government affairs\nconsultants. The Kinzig affidavit notes that GSK\xe2\x80\x99s corporate counsel \xe2\x80\x9cworked with these\nconsultants in the same manner as they did with full-time employees; indeed, the consultants\nacted as part of a team with full-time employees regarding their particular assignments\xe2\x80\x9d and, as\na result, the consultants \xe2\x80\x9cbecame integral members of the team assigned to deal with issues\nthat were completely intertwined with GSK\xe2\x80\x99s litigation and legal strategies.\xe2\x80\x9d In these\ncircumstances, \xe2\x80\x9cthere is no reason to distinguish between a person on the corporation\xe2\x80\x99s payroll\nand a consultant hired by the corporation if each acts for the corporation and possesses the\ninformation needed by attorneys in rendering legal advice.\xe2\x80\x9d\nQuestions:\n1. Why does it matter for the attorney-client privilege whether an agent of an organization\n\xe2\x80\x9cneeded to know\xe2\x80\x9d about a communication?\n2. How demanding is the \xe2\x80\x9cneed to know\xe2\x80\x9d standard?\n3. When does an agent of an organization fail to satisfy the \xe2\x80\x9cneed to know\xe2\x80\x9d standard?\nIndependent Contractors\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c470\n\nSteinfeld v. IMS Health Inc., No. 10 Civ. 3301 (S.D.N.Y. 2011)\nPAUL E. DAVISON, Magistrate Judge.\nBy letter dated October 31, 2011, Plaintiff seeks an order compelling Defendant to produce\ncertain documents containing communications shared between attorneys for Defendant and a\ncompensation consulting firm and its principal, Steven Root. Defendant\xe2\x80\x99s offer to produce the\ndocuments at issue for in camera inspection was accepted and that material has been\nreviewed.\nIMS retained Root as an independent equity compensation consultant.77 He advises IMS\ndirectors and counsel on matters involving the company\xe2\x80\x99s executive compensation and benefits\nplans and disclosure obligations. On this basis, Defendant contends that the communications\nshared between counsel for IMS and Root are protected by the attorney-client privilege.\nDefendant relies upon the theory announced by the Eighth Circuit in In re Bieter Co., and which\na small number of district courts within this circuit have recognized. Under this authority, the\nprivilege is extended in certain narrow instances to protect \xe2\x80\x9ccommunications between a\ncorporation\xe2\x80\x99s attorney and outside agents or consultants to the corporation who act as the\nfunctional equivalent of a corporate employee.\xe2\x80\x9d Defendant specifically argues that Root was the\nfunctional equivalent of an IMS employee because he \xe2\x80\x9ccontributed to the rendering of legal\nadvice in communications with the client\'s outside counsel,\xe2\x80\x9d was \xe2\x80\x9cnecessary to such\ncommunications,\xe2\x80\x9d and \xe2\x80\x9cpossessed information needed by IMS counsel in order to render legal\nadvice\xe2\x80\x9d to their client.\nGenerally, the presence of third parties waives entitlement to the attorney-client privilege. While,\nas discussed below, certain exceptions apply, courts should be cautious when expanding the\nprivilege\xe2\x80\x99s application. The party asserting entitlement to the privilege bears the burden of proof.\nBecause the cases relied upon by counsel in this matter are extremely fact-specific, I first\ndiscuss Bieter and other cases applying its functional equivalence test.\nIn Bieter, a two-man partnership formed for purposes of developing farm land. A third-party real\nestate consultant was retained who worked out of the company\'s office for several years. The\nconsultant\'s primary duty was to secure tenants for the development project. He also worked\ndirectly with architects, other consultants, and attorneys on matters related to the project and its\nensuing litigation. He appeared on behalf of the company at public hearings and was viewed by\nthe public as a representative of the company. Accordingly, the court determined that \xe2\x80\x9cthere was\nno principled basis to distinguish the consultant\xe2\x80\x99s role from that of an employee, and his\ninvolvement in the subject matter of the litigation makes him precisely the sort of person with\nwhom a lawyer would wish to confer confidentially in order to understand the company\xe2\x80\x99s\nreasons for seeking representation.\xe2\x80\x9d\n77\n\nAlthough Root is an attorney, Defendant acknowledges that IMS retained him as a compensation\nconsultant and not as a legal advisor.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c471\n\nIn In re Copper Market Antitrust Litigation, a Japanese corporation retained a public relations\nfirm as an independent consultant after a corporate executive disclosed information which\nprompted government investigations and litigation. The corporation had no experience with, or\nother employees who could deal with, public relations communications in the English-speaking,\nWestern media. The PR firm issued press statements on behalf of the corporation and\notherwise communicated with the Western press as an agent of the corporation. In the course of\npreparing and making its communications and statements, the firm consulted with the\ncorporation\'s in-house and outside counsel. The firm also had the authority to make\nindependent decisions on the corporation\'s behalf with respect to public relations matters.\nAccordingly, the court determined that the firm was the functional equivalent of a corporate\nemployee.\nIn Twentieth Century Fox Film Corporation v. Marvel Enterprises, a studio contracted with\nindividuals as independent contractors to perform movie production services. The film produced\nbecame the subject of ensuing litigation. The court held that the contractors were the functional\nequivalent of employees because \xe2\x80\x9cthe sporadic nature of employment in the motion picture\nindustry dictates the use of independent contractors over employees.\xe2\x80\x9d\nIn In re Adelphia Communications Corporation, an independent credit counseling firm was\nretained as an independent contractor. An employee of the contractor worked full-time at the\ncorporation for three years. He held substantial responsibility with respect to the corporation\'s\nrelations with another company. He also became the primary contact person between the\ncorporation and the other company, and was given authority to make decisions and to speak on\nbehalf of the corporation. In addition, the employee of the contractor sought legal advice from\nthe corporation\'s counsel as part of his job duties. Accordingly, the court held that this individual\nwas \xe2\x80\x9cthe functional equivalent of a corporate employee.\xe2\x80\x9d\nIn American Manufacturers Mutual Insurance Company v. Payton Lane Nursing Home, an\nindependent construction management contractor was retained by a company for purposes of\noverseeing the daily operations of a construction project. The company itself did not send its\nown employees to the construction site, nor did it employ staff with construction experience. The\ncontractor was given authority to speak for, and to make decisions on behalf of, the company\nrelating to the construction project. This included negotiating with contractors and pursuing\npayments. The contractor also sought legal advice from the company\xe2\x80\x99s attorney regarding the\nconstruction project. Accordingly, the court held that the contractor served as the company\'s\n\xe2\x80\x9ceyes and ears\xe2\x80\x9d and was therefore the functional equivalent of an employee.\nIn contrast, in Export-Import Bank of the United States v. Asia Pulp and Paper Company, a\nSingapore corporation retained an independent financial consultant to help the corporation\nrestructure its debt. The corporation did not have employees of its own with experience in\nrestructuring. The consultant negotiated on behalf of the corporation and communicated the\ncorporation\xe2\x80\x99s positions to creditors. Although the corporation provided the consultant with office\nspace in its building, the office was not used. Additionally, the court determined that the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c472\nconsultant did not spend a sufficient amount of his time working with corporation. Accordingly,\nthe court held that the party asserting entitlement to the attorney-client privilege failed to meet\nits burden to show that the consultant was \xe2\x80\x9cso fully integrated into the corporation\xe2\x80\x99s hierarchy as\nto be a de facto employee.\xe2\x80\x9d\nIn this case, Defendant has failed to meet its burden to show that Root is the functional\nequivalent of an IMS employee. First, there is no indication that IMS uses independent\ncontractors instead of employees because its business is sporadic. Second, there is no\nevidence that Root has ever appeared on behalf of IMS, corresponded with third parties as a\nrepresentative of IMS, or has been viewed by others as an employee of IMS. In camera review\nof the documents at issue reveals that Root frequently signed his emails as the managing\ndirector of his consulting firm and submitted memoranda on his own firm\xe2\x80\x99s letterhead.\nThird, Defendant offers nothing to suggest that Root was so physically present that he\nfunctioned as a de facto employee. For example, there is nothing to indicate that Root has ever\nmaintained an office at IMS or otherwise spent a substantial amount of his time interacting with,\nand working on behalf of, the corporation.\nFourth, Defendant offers nothing to show that IMS lacked the internal resources necessary for\nan employee to perform Root\xe2\x80\x99s services. Indeed, as in camera review tends to confirm. Root\nparticipated as part of a \xe2\x80\x9cteam\xe2\x80\x9d of IMS employees and outside counsel.\nFifth, the evidence presented does not reveal that Root exercises any measure of independent\ndecision-making authority within this team. Instead, it appears that Root\xe2\x80\x99s role was to provide\nsuggestions, comments, and (non-legal) advice.\nFinally, Defendant has failed to show that Root has ever sought out legal advice from IMS\xe2\x80\x99s\nattorneys as part of his work with the corporation. Rather, the communications reviewed indicate\nthat it was Root who offered advice and suggestions to counsel and the team in general.\nRoot\xe2\x80\x99s status vis-a-vis Defendant is simply distinguishable from the situations in those cases\nthat have followed Bieter. Root is not, therefore, the functional equivalent of an IMS employee.78\nAccordingly, Plaintiffs request to compel production Is GRANTED. Defendant is directed to\nproduce to Plaintiff the documents shared with Mr. Root or his firm no later than December 16,\n2011.\nFormer Employees\n\n78\n\nTo the extent Defendant separately argues the privilege applies because Root acted as an agent of\nIMS who had information necessary for counsel to render legal advice to IMS, Defendant has similarly\nfailed to meet its burden of proof. An attorney\'s communications with a third party will be privileged \xe2\x80\x9cif the\nthird party\'s role is limited to helping a lawyer give effective advice by explaining concepts to the lawyer.\xe2\x80\x9d\nHere, Root\xe2\x80\x99s role was simply more expansive than this. He did not explain unfamiliar concepts to counsel,\nbut instead provided the \xe2\x80\x9cteam\xe2\x80\x9d with suggestions and advice on what actions may be undertaken. Such\ncommunications are not privileged.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c473\nUS v. Merck-Medco Managed Care, LLC, 340 F. Supp. 2d 554 (E.D. Pa. 2004)\nSCUDERI, United States Magistrate Judge.\nAfter consideration of a Motion to Compel Testimony From Susan Elliott filed by the United\nStates Government, the Response of Defendants, Merck-Medco Managed Care, LLC, Plaintiffs\nReply, and Medco Defendants\xe2\x80\x99 Sur-Reply, it is hereby ORDERED that the Motion is GRANTED,\nas follows:\nIn the instant motion, Plaintiffs seek to compel additional testimony from Susan Elliott, a former\nemployee of Medco Defendants. Plaintiffs deposed Ms. Elliott on July 28, 2004, at which time\nshe testified that she did not have her own attorney, and that she was not represented by\ncounsel for Medco Defendants. Counsel for Medco Defendants confirmed that they did not\nrepresent Ms. Elliott. Nevertheless, counsel for Medco Defendants asserted the attorney-client\nprivilege and instructed Ms. Elliott not to answer any questions concerning communications\nbetween Medco Defendants and Ms. Elliott in preparation for her deposition, or concerning\ncommunications that occurred during breaks in her deposition. Ms. Elliott complied with all\ninstructions not to answer such questions.\nStatements made under oath by Ms. Elliott at her deposition clearly differed from statements\nshe previously made regarding certain activities which are material to this case. As a result,\nPlaintiffs seek additional testimony from Ms. Elliott regarding four (4) specific categories of\nquestions:\na. Statements made by Medco Defendants\xe2\x80\x99 counsel to Ms. Elliott regarding the nature of\nthe case;\nb. Statements made by Ms. Elliott to Medco Defendants\xe2\x80\x99 counsel regarding her\nconversations with Government investigators;\nc. Descriptions and/or summaries of witness testimony provided to Ms. Elliott by counsel\nfor Medco Defendants; and\nd. Conversations between counsel for Medco Defendants and Ms. Elliott while she was\nunder oath during the deposition.\nPlaintiffs argue that they are entitled to question Ms. Elliott on these topics because her\ncommunications with corporate counsel had the potential to \xe2\x80\x9caffect, influence or change\xe2\x80\x9d Ms.\nElliott\xe2\x80\x99s testimony.\nMedco Defendants oppose the current motion, arguing that all of the communications at issue\nbetween Ms. Elliott and counsel for Medco Defendants are protected by the attorney-client\nprivilege because the privilege should be applied in the same way for former employees as for\ncurrent employees.\nIn Upjohn Co. v. United States, the Supreme Court held that a corporation\xe2\x80\x99s attorneys\xe2\x80\x99\nconversations with current corporate employees could be covered by the attorney-client\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c474\nprivilege. The privilege applies when the conversations: (1) were made to the corporate counsel,\nacting as such; (2) were made at the direction of corporate supervisors for the purpose of\nsecuring legal advice from counsel; (3) concerned matters within the scope of the employees\xe2\x80\x99\ncorporate duties; and (4) the employees were sufficiently aware that they were being questioned\nin order that the corporation could obtain legal advice. In a concurring opinion, Chief Justice\nBerger opined that the attorney-client privilege should be extended to protect communications\nbetween corporate counsel and former employees. Nevertheless, the Supreme Court in Upjohn\nleft open the question of whether communications between corporate counsel and former\nemployees were included within the privilege.\nAs noted by the parties, the Third Circuit has not addressed the question left open by the\nSupreme Court in Upjohn. Moreover, although this Court has acknowledged that the Upjohn\nprivilege may apply to former employees as well as current employees, that case is factually\ndistinguishable and did not specifically address whether corporate counsel\xe2\x80\x99s communications\nwith a former employee are privileged as to the four discrete topics at issue in the instant\nmotion.\nFortunately, other federal courts have addressed the present issue under similar circumstances.\nIn Infosystems, Inc. v. Ceridian Corp., the District Court for the Eastern District of Michigan\nextended the privilege over former employees, but limited it to communications which\nthemselves were privileged and which occurred during the employment relationship. The Court\nexplained that the willingness of former employees to provide information is generally unrelated\nto directions from former corporate superiors and, therefore, \xe2\x80\x9ccounsel\xe2\x80\x99s communications with a\nformer employee of the client corporation generally should be treated no differently from\ncommunications with any other third-party fact witness.\xe2\x80\x9d In City of New York v. Coastal Oil New\nYork, Inc., the District Court for the Southern District of New York confronted the same issue\npresented here, namely, whether plaintiffs\xe2\x80\x99 counsel should be permitted to question a former\nemployee of the defendant corporation about conversations he had with corporate defense\ncounsel in preparation for his deposition, as well as conversations that may have occurred\nduring a recess in the deposition. The Court concluded that, because corporate counsel did not\nrepresent the former employee and there was no evidence that the conversations occurred for\nthe purpose of legal advice, the record did not contain any basis for an assertion of the attorneyclient privilege. In so holding, the District Court in Coastal Oil explicitly followed the reasoning of\nPeralta.\nIn Peralta, the District Court for the District of Connecticut rejected a defendant corporation\'s\nattempt to utilize the attorney-client privilege to block all questions about communications\nbetween corporate counsel and a former employee. Instead, the court limited the privilege to\ncommunications that either: (1) concerned knowledge obtained or conduct that occurred during\nthe course of the former employee\'s employment; or (2) related to communications which were\nthemselves privileged and which occurred during the employment relationship. Importantly, the\ncourt specified that the attorney-client privilege would not apply in certain specific\ncircumstances, such as to information given by corporate counsel to the former employee\nregarding the testimony of other witnesses, or to discussions between the former employee and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c475\ncorporate counsel during breaks in a deposition. These are virtually the same circumstances\npresent here. Moreover, the court in Peralta explained that allowing limited discovery regarding\nsuch communications was particularly necessary \xe2\x80\x9cgiven their potential to influence a witness to\nconform or adjust her testimony to such information, consciously or unconsciously.\xe2\x80\x9d The\nidentical concern is present here.\nThe Court is persuaded by the reasoning set forth in the aforementioned cases, as well as both\nthe reasoning and the practical solutions set forth by the District Courts in Peralta and Coastal\nOil. The Court is aware of potential difficulties in separating facts developed during litigation,\nwhich are not privileged pursuant to the aforementioned case law, and facts known by the\nemployee as a result of her employment, which likely would be privileged. However, as the court\nin Peralta made clear, the line to be drawn is not difficult: if the communication sought to be\nelicited relates to Ms. Elliott\xe2\x80\x99s conduct or knowledge during her employment with Medco\nDefendants, or if it concerns conversations with corporate counsel that occurred during her\nemployment, the communication is privileged; if not, the attorney-client privilege does not apply.\nAs a result of the foregoing - and because it is apparent that the communications between Ms.\nElliott and Medco Defendants\xe2\x80\x99 may have influenced her testimony - Plaintiffs\xe2\x80\x99 motion is granted.\nHowever, Plaintiffs may obtain additional testimony from Ms. Elliott only regarding the four\nspecific avenues of inquiry previously discussed, and in a manner consistent with the limitations\nset forth above.\nQuestions:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c476\n5.6: The Work Product Doctrine\nLet\'s make some plans \xe2\x80\x98cause they can\xe2\x80\x99t go wrong. Getting there may be times three maybe\nnot. To loosen your lips and you\xe2\x80\x99re talking rubbish. To loosen your whole mistaken tenfold.79\nAndy said a lot of things, I stored them all away in my head. Sometimes, when I can\'t decide\nwhat I should do, I think, \xe2\x80\x9cWhat would Andy have said?\xe2\x80\x9d He\xe2\x80\x99d probably say, \xe2\x80\x9cYou think too\nmuch, that\xe2\x80\x99s \xe2\x80\x98cause there\'s work that you don\'t want to do.\xe2\x80\x9d It\xe2\x80\x99s work. The most important thing is\nwork.80\nThe \xe2\x80\x9cWork Product Doctrine\xe2\x80\x9d is an evidentiary privilege providing that attorneys ordinarily cannot\nbe required to produce documents they created in the course of preparing for litigation. It\napplies to the notes, records, and other documents created by attorneys in gathering\ninformation in preparation for litigation and in the course of preparing litigation documents.\nThe work product doctrine differs from the attorney-client privilege in several respects. First, it\napplies to different subject matter. The attorney-client privilege applies to confidential\ncommunications with clients for the purpose of providing legal advice, but the work product\ndoctrine applies to certain documents created by attorneys, whether or not those documents are\ncommunicated to the client. Second, it belongs to a different party. The attorney-client privilege\nbelongs to the client, so the client is the only person who can waive the privilege, but the work\nproduct doctrine belongs to the attorney. Third, it is not as strong. The attorney-client privilege is\nsacrosanct and abrogated only if abused, but the work product doctrine can give way to\nnecessity.\nNotably, the work product doctrine may cover any documents created by or for an attorney in\nanticipation of litigation. This requirement is generally interpreted liberally. A document is\ncreated \xe2\x80\x9cin anticipation of litigation\xe2\x80\x9d if litigation is conceivable, even if no actual litigation has\ncommenced. In addition, the document need not be created by an attorney. A document created\nfor an attorney in anticipation of litigation may be protected by the work product doctrine.\nHowever, while the protection provided by the work product doctrine is broader than the\nprotection provided by the attorney-client privilege, it is also weaker. Unlike the attorney-client\nprivilege, the work product doctrine can be overcome by a showing of necessity. Specifically,\ncourts distinguish between \xe2\x80\x9cfact\xe2\x80\x9d and \xe2\x80\x9copinion\xe2\x80\x9d work product. Fact work product is factual\ndocuments created in anticipation of litigation, and opinion work product is documents that\nreflect the mental impressions, conclusions, opinions or legal theories of an attorney. Fact work\nproduct is discoverable if the opposing party can show a substantial need for the document, and\nit cannot obtain the relevant information by other means, without undue hardship. But opinion\nwork product generally is not discoverable, unless one of the exceptions to the attorney-client\nprivilege applies.\n\n79\n80\n\nClose Lobsters, Let\xe2\x80\x99s Make Some Plans, What Is There To Smile About (1988).\nLou Reed & John Cale, Work, Songs for Drella (1990).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c477\n\nFor example, if an attorney records an interview with a non-client witness and takes notes, the\nrecording and notes will be protected by the work product doctrine, but not the attorney-client\nprivilege. Under the work product doctrine, neither the recording nor the notes would normally\nbe discoverable, as opposing counsel can interview the witness independently. But if the\nwitness is unavailable, then opposing counsel may be entitled to limited discovery, to the extent\nnecessary to obtain material information. Typically, the interview would be discoverable\nbecause it is fact work product, but the attorney\xe2\x80\x99s notes would not be discoverable because they\nare opinion work product. If fact work product and opinion work product are combined in the\nsame document, then the opinion work product would be redacted before the document is\nproduced.\nFederal Rule of Civil Procedure 26: General Provisions Governing Discovery\nb. Discovery Scope and Limits.\n3. Trial Preparation: Materials.\nA. Documents and Tangible Things. Ordinarily, a party may not discover\ndocuments and tangible things that are prepared in anticipation of\nlitigation or for trial by or for another party or its representative (including\nthe other party\'s attorney, consultant, surety, indemnitor, insurer, or\nagent). But, subject to Rule 26(b)(4), those materials may be discovered\nif:\ni.\nthey are otherwise discoverable under Rule 26(b)(1); and\nii.\nthe party shows that it has substantial need for the materials to\nprepare its case and cannot, without undue hardship, obtain their\nsubstantial equivalent by other means.\nB. Protection Against Disclosure. If the court orders discovery of those\nmaterials, it must protect against disclosure of the mental impressions,\nconclusions, opinions, or legal theories of a party\'s attorney or other\nrepresentative concerning the litigation.\nC. Previous Statement. Any party or other person may, on request and\nwithout the required showing, obtain the person\'s own previous statement\nabout the action or its subject matter. If the request is refused, the person\nmay move for a court order, and Rule 37(a)(5) applies to the award of\nexpenses. A previous statement is either:\ni.\na written statement that the person has signed or otherwise\nadopted or approved; or\nii.\na contemporaneous stenographic, mechanical, electrical, or other\nrecording\xe2\x80\x94or a transcription of it\xe2\x80\x94that recites substantially\nverbatim the person\'s oral statement.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c478\n\nThe J.M. Taylor, Philadelphia, Pa. (~1940)\nHickman v. Taylor, 329 U.S. 495 (1947)\nSummary: A tugboat sank and five crewmen died. The owners and insurers were\nrepresented by Fortenbaugh, who interviewed the surviving crewmen and memorialized\nthe interviews. The estates of the dead crewmen filed wrongful death actions against the\nowners, all of which settled but one. Plaintiff\xe2\x80\x99s counsel asked Fortenbaugh to produce\nany information related to the interviews. Fortenbaugh refused, the district court ordered\nhim to produce the information, and the circuit court reversed, under the work product\ndoctrine. The Supreme Court affirmed, holding that work product is discoverable only\nwith a sufficient showing of necessity.\nMR. JUSTICE MURPHY delivered the opinion of the Court.\nThis case presents an important problem under the Federal Rules of Civil Procedure as to the\nextent to which a party may inquire into oral and written statements of witnesses, or other\ninformation, secured by an adverse party\xe2\x80\x99s counsel in the course of preparation for possible\nlitigation after a claim has arisen. Examination into a person\'s files and records, including those\nresulting from the professional activities of an attorney, must be judged with care. It is not\nwithout reason that various safeguards have been established to preclude unwarranted\nexcursions into the privacy of a man\xe2\x80\x99s work. At the same time, public policy supports reasonable\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c479\nand necessary inquiries. Properly to balance these competing interests is a delicate and difficult\ntask.\nOn February 7, 1943, the tug \xe2\x80\x9cJ.M. Taylor\xe2\x80\x9d sank while engaged in helping to tow a car float of\nthe Baltimore & Ohio Railroad across the Delaware River at Philadelphia. The accident was\napparently unusual in nature, the cause of it still being unknown. Five of the nine crew members\nwere drowned. Three days later the tug owners and the underwriters employed a law firm, of\nwhich respondent Fortenbaugh is a member, to defend them against potential suits by\nrepresentatives of the deceased crew members and to sue the railroad for damages to the tug.\nA public hearing was held on March 4, 1943, before the United States Steamboat Inspectors, at\nwhich the four survivors were examined. This testimony was recorded and made available to all\ninterested parties. Shortly thereafter, Fortenbaugh privately interviewed the survivors and took\nstatements from them with an eye toward the anticipated litigation; the survivors signed these\nstatements on March 29. Fortenbaugh also interviewed other persons believed to have some\ninformation relating to the accident and in some cases he made memoranda of what they told\nhim. At the time when Fortenbaugh secured the statements of the survivors, representatives of\ntwo of the deceased crew members had been in communication with him. Ultimately claims\nwere presented by representatives of all five of the deceased; four of the claims, however, were\nsettled without litigation. The fifth claimant, petitioner herein, brought suit in a federal court\nunder the Jones Act on November 26, 1943, naming as defendants the two tug owners,\nindividually and as partners, and the railroad.\nOne year later, petitioner filed 39 interrogatories directed to the tug owners. The 38th\ninterrogatory read: \xe2\x80\x9cState whether any statements of the members of the crews of the Tugs\n\xe2\x80\x98J.M. Taylor\xe2\x80\x99 and \xe2\x80\x98Philadelphia\xe2\x80\x99 or of any other vessel were taken in connection with the towing\nof the car float and the sinking of the Tug \xe2\x80\x98John M. Taylor.\xe2\x80\x99 Attach hereto exact copies of all\nsuch statements if in writing, and if oral, set forth in detail the exact provisions of any such oral\nstatements or reports.\xe2\x80\x9d\nSupplemental interrogatories asked whether any oral or written statements, records, reports or\nother memoranda had been made concerning any matter relative to the towing operation, the\nsinking of the tug, the salvaging and repair of the tug, and the death of the deceased. If the\nanswer was in the affirmative, the tug owners were then requested to set forth the nature of all\nsuch records, reports, statements or other memoranda.\nThe tug owners, through Fortenbaugh, answered all of the interrogatories except No. 38 and the\nsupplemental ones just described. While admitting that statements of the survivors had been\ntaken, they declined to summarize or set forth the contents. They did so on the ground that such\nrequests called \xe2\x80\x9cfor privileged matter obtained in preparation for litigation\xe2\x80\x9d and constituted \xe2\x80\x9can\nattempt to obtain indirectly counsel\xe2\x80\x99s private files.\xe2\x80\x9d It was claimed that answering these requests\n\xe2\x80\x9cwould involve practically turning over not only the complete files, but also the telephone records\nand, almost, the thoughts of counsel.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c480\nIn connection with the hearing on these objections, Fortenbaugh made a written statement and\ngave an informal oral deposition explaining the circumstances under which he had taken the\nstatements. But he was not expressly asked in the deposition to produce the statements. The\nDistrict Court for the Eastern District of Pennsylvania, sitting en banc, held that the requested\nmatters were not privileged. The court then decreed that the tug owners and Fortenbaugh, as\ncounsel and agent for the tug owners, forthwith \xe2\x80\x9canswer Plaintiff\xe2\x80\x99s 38th interrogatory and\nsupplementary interrogatories; produce all written statements of witnesses obtained by Mr.\nFortenbaugh, as counsel and agent for Defendants; state in substance any fact concerning this\ncase which Defendants learned through oral statements made by witnesses to Mr. Fortenbaugh\nwhether or not included in his private memoranda and produce Mr. Fortenbaugh\xe2\x80\x99s memoranda\ncontaining statements of fact by witnesses or to submit these memoranda to the Court for\ndetermination of those portions which should be revealed to Plaintiff.\xe2\x80\x9d Upon their refusal, the\ncourt adjudged them in contempt and ordered them imprisoned until they complied.\nThe Third Circuit Court of Appeals, also sitting en banc, reversed the judgment of the District\nCourt. It held that the information here sought was part of the \xe2\x80\x9cwork product of the lawyer\xe2\x80\x9d and\nhence privileged from discovery under the Federal Rules of Civil Procedure. The importance of\nthe problem, which has engendered a great divergence of views among district courts, led us to\ngrant certiorari.\nThe pre-trial deposition-discovery mechanism established by Rules 26 to 37 is one of the most\nsignificant innovations of the Federal Rules of Civil Procedure. Under the prior federal practice,\nthe pre-trial functions of notice-giving, issue-formulation and fact-revelation were performed\nprimarily and inadequately by the pleadings. Inquiry into the issues and the facts before trial was\nnarrowly confined and was often cumbersome in method. The new rules, however, restrict the\npleadings to the task of general notice-giving and invest the deposition-discovery process with a\nvital role in the preparation for trial. The various instruments of discovery now serve (1) as a\ndevice, along with the pre-trial hearing under Rule 16, to narrow and clarify the basic issues\nbetween the parties, and (2) as a device for ascertaining the facts, or information as to the\nexistence or whereabouts of facts, relative to those issues. Thus civil trials in the federal courts\nno longer need be carried on in the dark. The way is now clear, consistent with recognized\nprivileges, for the parties to obtain the fullest possible knowledge of the issues and facts before\ntrial.\nIn urging that he has a right to inquire into the materials secured and prepared by Fortenbaugh,\npetitioner emphasizes that the deposition-discovery portions of the Federal Rules of Civil\nProcedure are designed to enable the parties to discover the true facts and to compel their\ndisclosure wherever they may be found. It is said that inquiry may be made under these rules,\nepitomized by Rule 26, as to any relevant matter which is not privileged; and since the discovery\nprovisions are to be applied as broadly and liberally as possible, the privilege limitation must be\nrestricted to its narrowest bounds. On the premise that the attorney-client privilege is the one\ninvolved in this case, petitioner argues that it must be strictly confined to confidential\ncommunications made by a client to his attorney. And since the materials here in issue were\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c481\nsecured by Fortenbaugh from third persons rather than from his clients, the tug owners, the\nconclusion is reached that these materials are proper subjects for discovery under Rule 26.\nAs additional support for this result, petitioner claims that to prohibit discovery under these\ncircumstances would give a corporate defendant a tremendous advantage in a suit by an\nindividual plaintiff. Thus in a suit by an injured employee against a railroad or in a suit by an\ninsured person against an insurance company the corporate defendant could pull a dark veil of\nsecrecy over all the pertinent facts it can collect after the claim arises merely on the assertion\nthat such facts were gathered by its large staff of attorneys and claim agents. At the same time,\nthe individual plaintiff, who often has direct knowledge of the matter in issue and has no counsel\nuntil some time after his claim arises could be compelled to disclose all the intimate details of\nhis case. By endowing with immunity from disclosure all that a lawyer discovers in the course of\nhis duties, it is said, the rights of individual litigants in such cases are drained of vitality and the\nlawsuit becomes more of a battle of deception than a search for truth.\nBut framing the problem in terms of assisting individual plaintiffs in their suits against corporate\ndefendants is unsatisfactory. Discovery concededly may work to the disadvantage as well as to\nthe advantage of individual plaintiffs. Discovery, in other words, is not a one-way proposition. It\nis available in all types of cases at the behest of any party, individual or corporate, plaintiff or\ndefendant. The problem thus far transcends the situation confronting this petitioner. And we\nmust view that problem in light of the limitless situations where the particular kind of discovery\nsought by petitioner might be used.\nWe agree, of course, that the deposition-discovery rules are to be accorded a broad and liberal\ntreatment. No longer can the time-honored cry of \xe2\x80\x9cfishing expedition\xe2\x80\x9d serve to preclude a party\nfrom inquiring into the facts underlying his opponent\xe2\x80\x99s case. Mutual knowledge of all the relevant\nfacts gathered by both parties is essential to proper litigation. To that end, either party may\ncompel the other to disgorge whatever facts he has in his possession. The deposition-discovery\nprocedure simply advances the stage at which the disclosure can be compelled from the time of\ntrial to the period preceding it, thus reducing the possibility of surprise. But discovery, like all\nmatters of procedure, has ultimate and necessary boundaries. As indicated by Rules 30(b) and\n(d) and 31(d), limitations inevitably arise when it can be shown that the examination is being\nconducted in bad faith or in such a manner as to annoy, embarrass or oppress the person\nsubject to the inquiry. And as Rule 26(b) provides, further limitations come into existence when\nthe inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege.\nWe also agree that the memoranda, statements and mental impressions in issue in this case fall\noutside the scope of the attorney-client privilege and hence are not protected from discovery on\nthat basis. It is unnecessary here to delineate the content and scope of that privilege as\nrecognized in the federal courts. For present purposes, it suffices to note that the protective\ncloak of this privilege does not extend to information which an attorney secures from a witness\nwhile acting for his client in anticipation of litigation. Nor does this privilege concern the\nmemoranda, briefs, communications and other writings prepared by counsel for his own use in\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c482\nprosecuting his client\'s case; and it is equally unrelated to writings which reflect an attorney\'s\nmental impressions, conclusions, opinions or legal theories.\nBut the impropriety of invoking that privilege does not provide an answer to the problem before\nus. Petitioner has made more than an ordinary request for relevant, non-privileged facts in the\npossession of his adversaries or their counsel. He has sought discovery as of right of oral and\nwritten statements of witnesses whose identity is well known and whose availability to petitioner\nappears unimpaired. He has sought production of these matters after making the most\nsearching inquiries of his opponents as to the circumstances surrounding the fatal accident,\nwhich inquiries were sworn to have been answered to the best of their information and belief.\nInterrogatories were directed toward all the events prior to, during and subsequent to the sinking\nof the tug. Full and honest answers to such broad inquiries would necessarily have included all\npertinent information gleaned by Fortenbaugh through his interviews with the witnesses.\nPetitioner makes no suggestion, and we cannot assume, that the tug owners or Fortenbaugh\nwere incomplete or dishonest in the framing of their answers. In addition, petitioner was free to\nexamine the public testimony of the witnesses taken before the United States Steamboat\nInspectors. We are thus dealing with an attempt to secure the production of written statements\nand mental impressions contained in the files and the mind of the attorney Fortenbaugh without\nany showing of necessity or any indication or claim that denial of such production would unduly\nprejudice the preparation of petitioner\'s case or cause him any hardship or injustice. For aught\nthat appears, the essence of what petitioner seeks either has been revealed to him already\nthrough the interrogatories or is readily available to him direct from the witnesses for the asking.\nThe District Court, after hearing objections to petitioner\'s request, commanded Fortenbaugh to\nproduce all written statements of witnesses and to state in substance any facts learned through\noral statements of witnesses to him. Fortenbaugh was to submit any memoranda he had made\nof the oral statements so that the court might determine what portions should be revealed to\npetitioner. All of this was ordered without any showing by petitioner, or any requirement that he\nmake a proper showing, of the necessity for the production of any of this material or any\ndemonstration that denial of production would cause hardship or injustice. The court simply\nordered production on the theory that the facts sought were material and were not privileged as\nconstituting attorney-client communications.\nIn our opinion, neither Rule 26 nor any other rule dealing with discovery contemplates\nproduction under such circumstances. That is not because the subject matter is privileged or\nirrelevant, as those concepts are used in these rules.81 Here is simply an attempt, without\n\n81\n\nThe English courts have developed the concept of privilege to include all documents prepared by or for\ncounsel with a view to litigation. \xe2\x80\x9cAll documents which are called into existence for the purpose \xe2\x80\x94 but not\nnecessarily the sole purpose \xe2\x80\x94 of assisting the deponent or his legal advisers in any actual or anticipated\nlitigation are privileged from production. Thus all proofs, briefs, draft pleadings, etc., are privileged; but not\ncounsel\xe2\x80\x99s indorsement on the outside of his brief, nor any deposition or notes of evidence given publicly\nparty bona fide for the use of his solicitor for the purposes of the action, whether in fact so used or not.\nReports by a company\xe2\x80\x99s servant, if made in the ordinary course of routine, are not privileged, even though\nit is desirable that the solicitor should have them and they are subsequently sent to him; but if the solicitor\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c483\npurported necessity or justification, to secure written statements, private memoranda and\npersonal recollections prepared or formed by an adverse party\xe2\x80\x99s counsel in the course of his\nlegal duties. As such, it falls outside the arena of discovery and contravenes the public policy\nunderlying the orderly prosecution and defense of legal claims. Not even the most liberal of\ndiscovery theories can justify unwarranted inquiries into the files and the mental impressions of\nan attorney.\nHistorically, a lawyer is an officer of the court and is bound to work for the advancement of\njustice while faithfully protecting the rightful interests of his clients. In performing his various\nduties, however, it is essential that a lawyer work with a certain degree of privacy, free from\nunnecessary intrusion by opposing parties and their counsel. Proper preparation of a client\'s\ncase demands that he assemble information, sift what he considers to be the relevant from the\nirrelevant facts, prepare his legal theories and plan his strategy without undue and needless\ninterference. That is the historical and the necessary way in which lawyers act within the\nframework of our system of jurisprudence to promote justice and to protect their clients\'\ninterests. This work is reflected, of course, in interviews, statements, memoranda,\ncorrespondence, briefs, mental impressions, personal beliefs, and countless other tangible and\nintangible ways \xe2\x80\x94 aptly though roughly termed by the Circuit Court of Appeals in this case as\nthe \xe2\x80\x9cwork product of the lawyer.\xe2\x80\x9d Were such materials open to opposing counsel on mere\ndemand, much of what is now put down in writing would remain unwritten. An attorney\xe2\x80\x99s\nthoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices\nwould inevitably develop in the giving of legal advice and in the preparation of cases for trial.\nThe effect on the legal profession would be demoralizing. And the interests of the clients and\nthe cause of justice would be poorly served.\nWe do not mean to say that all written materials obtained or prepared by an adversary\xe2\x80\x99s counsel\nwith an eye toward litigation are necessarily free from discovery in all cases. Where relevant\nand non-privileged facts remain hidden in an attorney\xe2\x80\x99s file and where production of those facts\nis essential to the preparation of one\xe2\x80\x99s case, discovery may properly be had. Such written\nstatements and documents might, under certain circumstances, be admissible in evidence or\ngive clues as to the existence or location of relevant facts. Or they might be useful for purposes\nof impeachment or corroboration. And production might be justified where the witnesses are no\nlonger available or can be reached only with difficulty. Were production of written statements\nand documents to be precluded under such circumstances, the liberal ideals of the depositiondiscovery portions of the Federal Rules of Civil Procedure would be stripped of much of their\nmeaning. But the general policy against invading the privacy of an attorney\xe2\x80\x99s course of\npreparation is so well recognized and so essential to an orderly working of our system of legal\nprocedure that a burden rests on the one who would invade that privacy to establish adequate\nreasons to justify production through a subpoena or court order. That burden, we believe, is\nnecessarily implicit in the rules as now constituted.\n\nhas requested that such documents shall always be prepared for his use and this was one of the reasons\nwhy they were prepared, they need not be disclosed.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c484\nRule 30(b), as presently written, gives the trial judge the requisite discretion to make a judgment\nas to whether discovery should be allowed as to written statements secured from witnesses. But\nin the instant case there was no room for that discretion to operate in favor of the petitioner. No\nattempt was made to establish any reason why Fortenbaugh should be forced to produce the\nwritten statements. There was only a naked, general demand for these materials as of right and\na finding by the District Court that no recognizable privilege was involved. That was insufficient\nto justify discovery under these circumstances and the court should have sustained the refusal\nof the tug owners and Fortenbaugh to produce.\nBut as to oral statements made by witnesses to Fortenbaugh, whether presently in the form of\nhis mental impressions or memoranda, we do not believe that any showing of necessity can be\nmade under the circumstances of this case so as to justify production. Under ordinary\nconditions, forcing an attorney to repeat or write out all that witnesses have told him and to\ndeliver the account to his adversary gives rise to grave dangers of inaccuracy and\nuntrustworthiness. No legitimate purpose is served by such production. The practice forces the\nattorney to testify as to what he remembers or what he saw fit to write down regarding\nwitnesses\xe2\x80\x99 remarks. Such testimony could not qualify as evidence; and to use it for\nimpeachment or corroborative purposes would make the attorney much less an officer of the\ncourt and much more an ordinary witness. The standards of the profession would thereby suffer.\nDenial of production of this nature does not mean that any material, non-privileged facts can be\nhidden from the petitioner in this case. He need not be unduly hindered in the preparation of his\ncase, in the discovery of facts or in his anticipation of his opponents\xe2\x80\x99 position. Searching\ninterrogatories directed to Fortenbaugh and the tug owners, production of written documents\nand statements upon a proper showing and direct interviews with the witnesses themselves all\nserve to reveal the facts in Fortenbaugh\xe2\x80\x99s possession to the fullest possible extent consistent\nwith public policy. Petitioner\xe2\x80\x99s counsel frankly admits that he wants the oral statements only to\nhelp prepare himself to examine witnesses and to make sure that he has overlooked nothing.\nThat is insufficient under the circumstances to permit him an exception to the policy underlying\nthe privacy of Fortenbaugh\xe2\x80\x99s professional activities. If there should be a rare situation justifying\nproduction of these matters, petitioner\'s case is not of that type.\nWe fully appreciate the wide-spread controversy among the members of the legal profession\nover the problem raised by this case. It is a problem that rests on what has been one of the\nmost hazy frontiers of the discovery process. But until some rule or statute definitely prescribes\notherwise, we are not justified in permitting discovery in a situation of this nature as a matter of\nunqualified right. When Rule 26 and the other discovery rules were adopted, this Court and the\nmembers of the bar in general certainly did not believe or contemplate that all the files and\nmental processes of lawyers were thereby opened to the free scrutiny of their adversaries. And\nwe refuse to interpret the rules at this time so as to reach so harsh and unwarranted a result.\nWe therefore affirm the judgment of the Circuit Court of Appeals.\nMR. JUSTICE JACKSON, concurring.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c485\n\nThe narrow question in this case concerns only one of thirty-nine interrogatories which\ndefendants and their counsel refused to answer. As there was persistence in refusal after the\ncourt ordered them to answer it, counsel and clients were committed to jail by the district court\nuntil they should purge themselves of contempt.\nThe interrogatory asked whether statements were taken from the crews of the tugs involved in\nthe accident, or of any other vessel, and demanded \xe2\x80\x9cAttach hereto exact copies of all such\nstatements if in writing, and if oral, set forth in detail the exact provisions of any such oral\nstatements or reports.\xe2\x80\x9d The question is simply whether such a demand is authorized by the\nrules relating to various aspects of \xe2\x80\x9cdiscovery.\xe2\x80\x9d\nThe primary effect of the practice advocated here would be on the legal profession itself. But it\ntoo often is overlooked that the lawyer and the law office are indispensable parts of our\nadministration of justice. Law-abiding people can go nowhere else to learn the ever changing\nand constantly multiplying rules by which they must behave and to obtain redress for their\nwrongs. The welfare and tone of the legal profession is therefore of prime consequence to\nsociety, which would feel the consequences of such a practice as petitioner urges secondarily\nbut certainly.\n\xe2\x80\x9cDiscovery\xe2\x80\x9d is one of the working tools of the legal profession. It traces back to the equity bill of\ndiscovery in English Chancery practice and seems to have had a forerunner in Continental\npractice. Since 1848 when the draftsmen of New York\xe2\x80\x99s Code of Procedure recognized the\nimportance of a better system of discovery the impetus to extend and expand discovery, as well\nas the opposition to it, has come from within the Bar itself. It happens in this case that it is the\nplaintiff\xe2\x80\x99s attorney who demands such unprecedented latitude of discovery and, strangely\nenough, amicus briefs in his support have been filed by several labor unions representing\nplaintiffs as a class. It is the history of the movement for broader discovery, however, that in\nactual experience the chief opposition to its extension has come from lawyers who specialize in\nrepresenting plaintiffs, because defendants have made liberal use of it to force plaintiffs to\ndisclose their cases in advance. Discovery is a two-edged sword and we cannot decide this\nproblem on any doctrine of extending help to one class of litigants.\nIt seems clear and long has been recognized that discovery should provide a party access to\nanything that is evidence in his case. It seems equally clear that discovery should not nullify the\nprivilege of confidential communication between attorney and client. But those principles give us\nno real assistance here because what is being sought is neither evidence nor is it a privileged\ncommunication between attorney and client.\nTo consider first the most extreme aspect of the requirement in litigation here, we find it calls\nupon counsel, if he has had any conversations with any of the crews of the vessels in question\nor of any other, to \xe2\x80\x9cset forth in detail the exact provision of any such oral statements or reports.\xe2\x80\x9d\nThus the demand is not for the production of a transcript in existence but calls for the creation of\na written statement not in being. But the statement by counsel of what a witness told him is not\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c486\nevidence when written. Plaintiff could not introduce it to prove his case. What, then, is the\npurpose sought to be served by demanding this of adverse counsel?\nCounsel for the petitioner candidly said on argument that he wanted this information to help\nprepare himself to examine witnesses, to make sure he overlooked nothing. He bases his claim\nto it in his brief on the view that the Rules were to do away with the old situation where a law\nsuit developed into \xe2\x80\x9ca battle of wits between counsel.\xe2\x80\x9d But a common law trial is and always\nshould be an adversary proceeding. Discovery was hardly intended to enable a learned\nprofession to perform its functions either without wits or on wits borrowed from the adversary.\nThe real purpose and the probable effect of the practice ordered by the district court would be to\nput trials on a level even lower than a \xe2\x80\x9cbattle of wits.\xe2\x80\x9d I can conceive of no practice more\ndemoralizing to the Bar than to require a lawyer to write out and deliver to his adversary an\naccount of what witnesses have told him. Even if his recollection were perfect, the statement\nwould be his language, permeated with his inferences. Every one who has tried it knows that it\nis almost impossible so fairly to record the expressions and emphasis of a witness that when he\ntestifies in the environment of the court and under the influence of the leading question there will\nnot be departures in some respects. Whenever the testimony of the witness would differ from\nthe \xe2\x80\x9cexact\xe2\x80\x9d statement the lawyer had delivered, the lawyer\'s statement would be whipped out to\nimpeach the witness. Counsel producing his adversary\'s \xe2\x80\x9cinexact\xe2\x80\x9d statement could lose nothing\nby saying, \xe2\x80\x9cHere is a contradiction, gentlemen of the jury. I do not know whether it is my\nadversary or his witness who is not telling the truth, but one is not.\xe2\x80\x9d Of course, if this practice\nwere adopted, that scene would be repeated over and over again. The lawyer who delivers such\nstatements often would find himself branded a deceiver afraid to take the stand to support his\nown version of the witness\xe2\x80\x99s conversation with him, or else he will have to go on the stand to\ndefend his own credibility \xe2\x80\x94 perhaps against that of his chief witness, or possibly even his\nclient.\nEvery lawyer dislikes to take the witness stand and will do so only for grave reasons. This is\npartly because it is not his role; he is almost invariably a poor witness. But he steps out of\nprofessional character to do it. He regrets it; the profession discourages it. But the practice\nadvocated here is one which would force him to be a witness, not as to what he has seen or\ndone but as to other witnesses\xe2\x80\x99 stories, and not because he wants to do so but in self-defense.\nAnd what is the lawyer to do who has interviewed one whom he believes to be a biased, lying or\nhostile witness to get his unfavorable statements and know what to meet? He must record and\ndeliver such statements even though he would not vouch for the credibility of the witness by\ncalling him. Perhaps the other side would not want to call him either, but the attorney is open to\nthe charge of suppressing evidence at the trial if he fails to call such a hostile witness even\nthough he never regarded him as reliable or truthful.\nHaving been supplied the names of the witnesses, petitioner\xe2\x80\x99s lawyer gives no reason why he\ncannot interview them himself. If an employee-witness refuses to tell his story, he, too, may be\nexamined under the Rules. He may be compelled on discovery, as fully as on the trial, to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c487\ndisclose his version of the facts. But that is his own disclosure \xe2\x80\x94 it can be used to impeach him\nif he contradicts it and such a deposition is not useful to promote an unseemly disagreement\nbetween the witness and the counsel in the case.\nIt is true that the literal language of the Rules would admit of an interpretation that would sustain\nthe district court\xe2\x80\x99s order. So the literal language of the Act of Congress which makes \xe2\x80\x9cany writing\nor record made as a memorandum or record of any occurrence, or event\xe2\x80\x9d admissible as\nevidence, would have allowed the railroad company to put its engineer\'s accident statements in\nevidence. But all such procedural measures have a background of custom and practice which\nwas assumed by those who wrote and should be by those who apply them. We reviewed the\nbackground of the Act and the consequences on the trial of negligence cases of allowing\nrailroads and others to put in their statements and thus to shield the crew from crossexamination. We said, \xe2\x80\x9cSuch a major change which opens wide the door to avoidance of crossexamination should not be left to implication.\xe2\x80\x9d We pointed out that there, as here, the \xe2\x80\x9cseveral\nhundred years of history behind the Act indicate the nature of the reforms which it was designed\nto effect.\xe2\x80\x9d We refused to apply it beyond that point. We should follow the same course of\nreasoning here. Certainly nothing in the tradition or practice of discovery up to the time of these\nRules would have suggested that they would authorize such a practice as here proposed.\nThe question remains as to signed statements or those written by witnesses. Such statements\nare not evidence for the defendant. Nor should I think they ordinarily could be evidence for the\nplaintiff. But such a statement might be useful for impeachment of the witness who signed it, if\nhe is called and if he departs from the statement. There might be circumstances, too, where\nimpossibility or difficulty of access to the witness or his refusal to respond to requests for\ninformation or other facts would show that the interests of justice require that such statements\nbe made available. Production of such statements are governed by Rule 34 and on \xe2\x80\x9cshowing\ngood cause therefor\xe2\x80\x9d the court may order their inspection, copying or photographing. No such\napplication has here been made; the demand is made on the basis of right, not on showing of\ncause.\nI agree to the affirmance of the judgment of the Circuit Court of Appeals which reversed the\ndistrict court.\nQuestions:\n1. Why did the Supreme Court find that the work product doctrine is justified?\n2. How does the justification for the work product doctrine differ from the justification for the\nattorney-client privilege?\n3. How does the protection provided by the work product doctrine differ from the protection\nprovided by the attorney-client privilege?\n4. Why didn\xe2\x80\x99t plaintiff\xe2\x80\x99s counsel make a sufficient showing of necessity in this case?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c488\n\nThe J.M. Taylor, Philadelphia, Pa. (~1940)\nUpjohn Co. v. United States, 449 U.S. 383 (1981)\nSummary: The Supreme Court held that notes and memoranda generated by Upjohn\xe2\x80\x99s\nattorneys that were not protected by the attorney-client privilege could still be protected\nby the work product doctrine. Specifically, it found that necessity alone was not enough\nto require production of opinion work product.\nOur decision that the communications by Upjohn employees to counsel are covered by the\nattorney-client privilege disposes of the case so far as the responses to the questionnaires and\nany notes reflecting responses to interview questions are concerned. The summons reaches\nfurther, however, and Thomas has testified that his notes and memoranda of interviews go\nbeyond recording responses to his questions. To the extent that the material subject to the\nsummons is not protected by the attorney-client privilege as disclosing communications\nbetween an employee and counsel, we must reach the ruling by the Court of Appeals that the\nwork-product doctrine does not apply.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c489\nWhile conceding the applicability of the work-product doctrine, the Government asserts that it\nhas made a sufficient showing of necessity to overcome its protections. The Magistrate\napparently so found. The Government relies on the following language in Hickman:\nWe do not mean to say that all written materials obtained or prepared by an adversary\'s\ncounsel with an eye toward litigation are necessarily free from discovery in all cases.\nWhere relevant and nonprivileged facts remain hidden in an attorney\xe2\x80\x99s file and where\nproduction of those facts is essential to the preparation of one\xe2\x80\x99s case, discovery may\nproperly be had. And production might be justified where the witnesses are no longer\navailable or can be reached only with difficulty.\nThe Government stresses that interviewees are scattered across the globe and that Upjohn has\nforbidden its employees to answer questions it considers irrelevant. The above-quoted language\nfrom Hickman, however, did not apply to \xe2\x80\x9coral statements made by witnesses whether presently\nin the form of the attorney\xe2\x80\x99s mental impressions or memoranda.\xe2\x80\x9d As to such material the Court\ndid \xe2\x80\x9cnot believe that any showing of necessity can be made under the circumstances of this\ncase so as to justify production. If there should be a rare situation justifying production of these\nmatters, petitioner\'s case is not of that type.\xe2\x80\x9d Forcing an attorney to disclose notes and\nmemoranda of witnesses\xe2\x80\x99 oral statements is particularly disfavored because it tends to reveal\nthe attorney\xe2\x80\x99s mental processes.\nRule 26 accords special protection to work product revealing the attorney\xe2\x80\x99s mental processes.\nThe Rule permits disclosure of documents and tangible things constituting attorney work\nproduct upon a showing of substantial need and inability to obtain the equivalent without undue\nhardship. This was the standard applied by the Magistrate. Rule 26 goes on, however, to state\nthat \xe2\x80\x9cin ordering discovery of such materials when the required showing has been made, the\ncourt shall protect against disclosure of the mental impressions, conclusions, opinions or legal\ntheories of an attorney or other representative of a party concerning the litigation.\xe2\x80\x9d Although this\nlanguage does not specifically refer to memoranda based on oral statements of witnesses, the\nHickman court stressed the danger that compelled disclosure of such memoranda would reveal\nthe attorney\xe2\x80\x99s mental processes. It is clear that this is the sort of material the draftsmen of the\nRule had in mind as deserving special protection.\nBased on the foregoing, some courts have concluded that no showing of necessity can\novercome protection of work product which is based on oral statements from witnesses. Those\ncourts declining to adopt an absolute rule have nonetheless recognized that such material is\nentitled to special protection.\nWe do not decide the issue at this time. It is clear that the Magistrate applied the wrong\nstandard when he concluded that the Government had made a sufficient showing of necessity\nto overcome the protections of the work-product doctrine. The Magistrate applied the\n\xe2\x80\x9csubstantial need\xe2\x80\x9d and \xe2\x80\x9cwithout undue hardship\xe2\x80\x9d standard articulated in the first part of Rule\n26(b)(3). The notes and memoranda sought by the Government here, however, are work\nproduct based on oral statements. If they reveal communications, they are, in this case,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c490\nprotected by the attorney-client privilege. To the extent they do not reveal communications, they\nreveal the attorneys\xe2\x80\x99 mental processes in evaluating the communications. As Rule 26 and\nHickman make clear, such work product cannot be disclosed simply on a showing of substantial\nneed and inability to obtain the equivalent without undue hardship.\nWhile we are not prepared at this juncture to say that such material is always protected by the\nwork-product rule, we think a far stronger showing of necessity and unavailability by other\nmeans than was made by the Government or applied by the Magistrate in this case would be\nnecessary to compel disclosure. Since the Court of Appeals thought that the work-product\nprotection was never applicable in an enforcement proceeding such as this, and since the\nMagistrate whose recommendations the District Court adopted applied too lenient a standard of\nprotection, we think the best procedure with respect to this aspect of the case would be to\nreverse the judgment of the Court of Appeals for the Sixth Circuit and remand the case to it for\nsuch further proceedings in connection with the work-product claim as are consistent with this\nopinion.\nQuestions:\n1. How does the Court distinguish between fact work product and opinion work product?\n2. Why is the standard for discovery of fact work product lower than the standard for\nopinion work product?\n3. Should opinion work product ever be discoverable? What if it is inextricable from fact\nwork product?\n4. How would discoverability of fact or opinion work product affect the incentives of\nattorneys?\n\nNational Semiconductor DM7432N Quad 2-Input OR Gates\nSporck v. Peil, 759 F. 2d 312 (3d Cir. 1985)\nSummary: Peil filed an action against Sporck and Sprague, alleging that they conspired\nto inflate the value of National Semiconductor stock. Among other things, defendants\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c491\nproduced more than 100,000 documents. Counsel for defendants showed Sporck\ndocuments while preparing him for a deposition. Plaintiff asked Sporck to identify all of\nthe documents he reviewed in preparation for the deposition. Sporck refused, the district\ncourt ordered production, and the circuit court reversed, holding that the attorney\xe2\x80\x99s\nchoice of which documents to show Sporck was opinion work product.\nJAMES HUNTER, III, Circuit Judge.\nThis case arises on a Petition for Writ of Mandamus involving a discovery dispute between the\nparties to a securities fraud class action suit. The underlying action involves an allegation by\nplaintiff-respondent Raymond K. Peil that defendant National Semiconductor Corporation,\ndefendant-petitioner Charles F. Sporck, NSC\xe2\x80\x99s president, and defendant Peter J. Sprague,\nNSC\xe2\x80\x99s chairman, conspired to inflate artificially the value of NSC stock, in order to enable\nSporck and Sprague to sell their own shares at the inflated level. The wrongful conduct alleged\nincludes various misrepresentations and nondisclosures of material facts during an eight-month\nperiod continuing from July 1, 1976, until March 1, 1977.\nDuring pretrial discovery, attorneys for Peil served numerous sets of combined interrogatory and\ndocument requests on defendants. In response, defendants produced hundreds of thousands of\ndocuments, from which Peil\'s attorneys selected more than 100,000 for copying. There is no\nallegation in this case that defendants have improperly concealed or refused to produce\nrequested documents.\nThe issue presently before this court arose on May 16, 1983, at the deposition of defendantpetitioner Sporck. Prior to the deposition, counsel for defendants had prepared Sporck for his\nexpected week-long deposition by showing him an unknown quantity of the numerous\ndocuments produced by defendants in response to plaintiff\xe2\x80\x99s discovery requests. Defense\ncounsel selected and compiled these documents in a folder in Philadelphia, and transported\nthem to California solely for the deposition. According to defense counsel, the selected\ndocuments represented, as a group, counsel\xe2\x80\x99s legal opinion as to the evidence relevant both to\nthe allegations in the case and the possible legal defenses. It is conceded that none of the\nindividual documents, in their redacted form, contained work product of defense counsel.\nAt the inception of the Sporck deposition, Peil\xe2\x80\x99s attorney asked: \xe2\x80\x9cMr. Sporck, in preparation for\nthis deposition, did you have occasion to examine any documents?\xe2\x80\x9d Sporck answered\naffirmatively, and Peil\xe2\x80\x99s attorney first orally, and then by written motion pursuant to Federal Rule\nof Civil Procedure 34, requested identification and production of \xe2\x80\x9call documents examined,\nreviewed or referred to by Charles E. Sporck in preparation for the session of his deposition\ncommencing May 16, 1983.\xe2\x80\x9d Defense counsel refused to identify the documents, arguing first\nthat all the documents had previously been produced, and second, that the select grouping of\nthe documents was attorney work product protected from discovery by Federal Rule of Civil\nProcedure 26(b)(3). Defense counsel agreed, however, to allow Peil\xe2\x80\x99s counsel to ask Sporck\nabout his reliance on individual documents in the context of specific factual questions, and\nSporck\xe2\x80\x99s deposition continued on this basis.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c492\n\nPeil filed a motion to compel identification and production of the selected documents, on the\nground that all documents used in preparing a witness for a deposition are properly\ndiscoverable under Federal Rule of Evidence 612. Judge John B. Hannum granted Peil\xe2\x80\x99s\nmotion, and ordered that defendant produce or identify all documents reviewed by Sporck in\npreparation for his deposition. Upon petitioner\xe2\x80\x99s motion for reconsideration, Judge Hannum\nreaffirmed his order, holding that although the select grouping of documents constituted attorney\nwork product, it was not \xe2\x80\x9copinion\xe2\x80\x9d work product entitled to absolute protection, and that the\nprinciples behind Federal Rule of Evidence 612 supported Peil\xe2\x80\x99s claim to identification of the\ndocuments. Sporck now asks this court to issue a writ of mandamus directing the trial court to\nvacate both orders.\nThe threshold issue in this case is whether the selection process of defense counsel in grouping\ncertain documents together out of the thousands produced in this litigation is work product\nentitled to protection under Federal Rule of Civil Procedure 26(b)(3) and the principles of\nHickman v. Taylor. Petitioner concedes that the individual documents that comprise the\ngrouping are not attorney work product, but argues that the selection process itself represents\ndefense counsel\xe2\x80\x99s mental impressions and legal opinions as to how the evidence in the\ndocuments relates to the issues and defenses in the litigation. Because identification of the\ndocuments as a group will reveal defense counsel\xe2\x80\x99s selection process, and thus his mental\nimpressions, petitioner argues that identification of the documents as a group must be\nprevented to protect defense counsel\'s work product. We agree.\nThe work product doctrine had its modern genesis in the seminal opinion in Hickman v. Taylor.\nIn Hickman, the Court rejected \xe2\x80\x9can attempt, without purported necessity or justification, to\nsecure written statements, private memoranda and personal recollections prepared or formed\nby an adverse party\'s counsel in the course of his legal duties.\xe2\x80\x9d Preserving the privacy of\npreparation that is essential to the attorney\'s adversary role is the central justification for the\nwork product doctrine. Without this zone of privacy:\nMuch of what is now put down in writing would remain unwritten. An attorney\xe2\x80\x99s thoughts,\nheretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices\nwould inevitably develop in the giving of legal advice and in the preparation of cases for\ntrial. The effect on the legal profession would be demoralizing. And the interests of the\nclients and the cause of justice would be poorly served.\nThe work product doctrine as articulated in Hickman has been partially codified in Federal Rule\nof Civil Procedure 26(b)(3). That rule conditions the production of \xe2\x80\x9cdocuments and tangible\nthings\xe2\x80\x9d prepared in anticipation of litigation by or for an opposing party on the moving party\'s\nshowing of substantial need and undue hardship. Even where such a showing is made,\nhowever, the trial court, in ordering the production of such materials, \xe2\x80\x9cshall protect against\ndisclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or\nother representative of a party concerning the litigation.\xe2\x80\x9d Thus, Rule 26(b)(3) recognizes the\ndistinction between \xe2\x80\x9cordinary\xe2\x80\x9d and \xe2\x80\x9copinion\xe2\x80\x9d work product first articulated by the Supreme Court.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c493\n\nOpinion work product includes such items as an attorney\xe2\x80\x99s legal strategy, his intended lines of\nproof, his evaluation of the strengths and weaknesses of his case, and the inferences he draws\nfrom interviews of witnesses. Such material is accorded an almost absolute protection from\ndiscovery because any slight factual content that such items may have is generally outweighed\nby the adversary system\xe2\x80\x99s interest in maintaining the privacy of an attorney\xe2\x80\x99s thought processes\nand in ensuring that each side relies on its own wit in preparing their respective cases.\nWe believe that the selection and compilation of documents by counsel in this case in\npreparation for pretrial discovery falls within the highly-protected category of opinion work\nproduct. As the court succinctly stated in James Julian, Inc. v. Raytheon Co.:\nIn selecting and ordering a few documents out of thousands counsel could not help but\nreveal important aspects of his understanding of the case. Indeed, in a case such as\nthis, involving extensive document discovery, the process of selection and distillation is\noften more critical than pure legal research. There can be no doubt that at least in the\nfirst instance the binders were entitled to protection as work product.\nFurther, in selecting the documents that he thought relevant to Sporck\xe2\x80\x99s deposition, defense\ncounsel engaged in proper and necessary preparation of his client\'s case. As the Supreme\nCourt noted in Hickman:\nProper preparation of a client\'s case demands that he assemble information, sift what he\nconsiders to be the relevant from the irrelevant facts, prepare his legal theories and plan\nhis strategy without undue and needless interference. That is the historical and the\nnecessary way in which lawyers act within the framework of our system of jurisprudence\nto promote justice and to protect their client\'s interest.\nIn the instant case, without the protection that the work product doctrine accords his\npreparation, defense counsel may have foregone a sifting of the documents, or at the very least\nchosen not to show the documents to petitioner. As a result, petitioner may not have been as\nwell-prepared for his deposition, and neither plaintiff nor defendant would have realized the full\nbenefit of a well-prepared deponent\'s testimony. For these reasons, Rule 26(b)(3) placed an\nobligation on the trial court to protect against unjustified disclosure of defense counsel\'s\nselection process.\nThis conclusion, however, does not end the issue. Respondent argues, and the trial court\nagreed, that operation of Federal Rule of Evidence 612 removed any protection that defense\ncounsel\xe2\x80\x99s selection process would ordinarily enjoy. Because we find that Federal Rule of\nEvidence 612 does not apply to the facts of this case, we disagree.\nFederal Rule of Evidence 612 provides in relevant part:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c494\nIf a witness uses a writing to refresh his memory for the purpose of testifying, (2) before\ntestifying, if the court in its discretion determines it is necessary in the interest of justice,\nan adverse party is entitled to have the writing produced at the hearing, to inspect it, to\ncross-examine the witness thereon, and to introduce in evidence those portions which\nrelate to the testimony of the witness.\nThis rule is applicable to depositions and deposition testimony. Although applicable to\ndepositions, Rule 612 is a rule of evidence, and not a rule of discovery. Its sole purpose is\nevidentiary in function - \xe2\x80\x9cto promote the search of credibility and memory.\xe2\x80\x9d\nBy its very language, Rule 612 requires that a party meet three conditions before it may obtain\ndocuments used by a witness prior to testifying: 1) the witness must use the writing to refresh\nhis memory; 2) the witness must use the writing for the purpose of testifying; and 3) the court\nmust determine that production is necessary in the interests of justice. The first requirement is\nconsistent with the purposes of the rule, for if the witness is not using the document to refresh\nhis memory, that document has no relevance to any attempt to test the credibility and memory\nof the witness.\nThe second requirement \xe2\x80\x94 that the witness use the document for the purpose of testifying \xe2\x80\x94\nwas designed \xe2\x80\x9cto safeguard against using the rule as a pretext for wholesale exploration of an\nopposing party\xe2\x80\x99s files and to insure that access is limited only to those writings which may fairly\nbe said in part to have an impact upon the testimony of the witness.\xe2\x80\x9d As with the first\nrequirement, the second requirement recognizes that the document is of little utility for\nimpeachment and cross-examination without a showing that the document actually influenced\nthe witness\xe2\x80\x99 testimony. Finally, the third requirement codifies the Supreme Court\xe2\x80\x99s holding in\nGoldman v. United States, that even though a witness may review notes prior to testifying, a trial\ncourt should exercise discretion to guard against \xe2\x80\x9cfishing expeditions among a multitude of\npapers which a witness may have used in preparing for trial.\xe2\x80\x9d\nIn the case before us, the apparent conflict between the protected status of defense counsel\'s\ndocument selection process under Rule 26(b)(3) and the asserted need, for cross-examination\npurposes, of the identification of the documents actually selected resulted from the failure to\nestablish the first two requirements under Rule 612. In seeking identification of all documents\nreviewed by petitioner prior to asking petitioner any questions concerning the subject matter of\nthe deposition, respondent\xe2\x80\x99s counsel failed to establish either that petitioner relied on any\ndocuments in giving his testimony, or that those documents influenced his testimony. Without\nfirst eliciting the testimony, there existed no basis for asking petitioner the source of that\ntestimony. We conclude, therefore, that deposing counsel failed to lay a proper foundation\nunder Rule 612 for production of the documents selected by counsel.\nIndeed, if respondent\xe2\x80\x99s counsel had first elicited specific testimony from petitioner, and then\nquestioned petitioner as to which, if any, documents informed that testimony, the work product\npetitioner seeks to protect \xe2\x80\x94 counsel\xe2\x80\x99s opinion of the strengths and weaknesses of the case as\nrepresented by the group identification of documents selected by counsel \xe2\x80\x94 would not have\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c495\nbeen implicated. Rather, because identification of such documents would relate to specific\nsubstantive areas raised by respondent\'s counsel, respondent would receive only those\ndocuments which deposing counsel, through his own work product, was incisive enough to\nrecognize and question petitioner on. The fear that counsel for petitioner\'s work product would\nbe revealed would thus become groundless.\nRule 612, therefore, when properly applied, does not conflict with the protection of attorney work\nproduct of the type involved in this case. Because the trial court did not properly condition its\napplication of Rule 612 on a showing that petitioner relied upon the requested documents for his\ntestimony and that those documents impacted on his testimony, the court committed legal error.\nThis error became prejudicial when it implicated work product of petitioner\xe2\x80\x99s counsel. Proper\napplication of Rule 612 should never implicate an attorney\'s selection, in preparation for a\nwitness\xe2\x80\x99 deposition, of a group of documents that he believes critical to a case. Instead,\nidentification of such documents under Rule 612 should only result from opposing counsel\xe2\x80\x99s\nown selection of relevant areas of questioning, and from the witness\xe2\x80\x99 subsequent admission that\nhis answers to those specific areas of questioning were informed by documents he had\nreviewed. In such a case, deposing counsel would discover the documents through his own wit,\nand not through the wit of his adversary.\nWe conclude, therefore, that the trial court committed clear error of law in ordering the\nidentification of the documents selected by counsel. Because we are confident that the district\ncourt will proceed in accordance with our opinion without formal issuance of the writ, we will\nremand to the district court.\nSEITZ, Circuit Judge, dissenting.\nThe majority approves in effect the use of the work product doctrine to prevent an identification\nof documents reviewed by a witness in preparation for his deposition. I dissent because I am\nconvinced that such a ruling is an impermissible expansion of the work product doctrine at the\nexpense of legitimate discovery.\nThe plaintiffs-respondents sought in the district court the discovery of relevant objective facts:\nthe identities of the documents that the deponent reviewed prior to testifying. These facts are\nnot, in themselves, the opinion or thought processes of an attorney. Nor were the contents of\nthe documents, all of which had already been produced by the defendants, created by\ndefendants\xe2\x80\x99 attorney in anticipation of litigation.\nYet, the defendant-petitioner claims that the mere identification of the documents examined\nprior to his deposition would reveal his attorney\xe2\x80\x99s litigation strategy. Presumably, the petitioner\xe2\x80\x99s\nargument must be that if the respondents knew which documents were reviewed, they could,\nupon examination of the documents identified, draw conclusions as to why each document was\nchosen.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c496\nThe problem with the petitioner\'s theory is that it assumes that one can extrapolate backwards\nfrom the results of a selection process to determine the reason a document was selected for\nreview by the deponent. There are many reasons for showing a document or selected portions\nof a document to a witness. The most that can be said from the fact that the witness looked at a\ndocument is that someone thought that the document, or some portion of the document, might\nbe useful for the preparation of the witness for his deposition. This is a far cry from the\ndisclosure of the a lawyer\xe2\x80\x99s opinion work product. Even assuming that the documents were\nselected by the petitioner\xe2\x80\x99s attorney, the subject matter is so undifferentiated that its potential for\ninvasion of work product is miniscule at best.\nEvery act by a litigant or his attorney gives rise to similar vague inferences. For example, a\ntypical interrogatory from a leading treatise would permit questions of the following form:\n\xe2\x80\x9cIdentify each writing which relates or refers directly or indirectly to a transaction in question.\xe2\x80\x9d It\ncannot seriously be contended that an answer is not required because it would reveal the fact\nthat the attorney thought that certain documents were relevant to the transaction.\nMoreover, in order to claim the shield of opinion work product, it must be established that it is\nthe attorney\xe2\x80\x99s thought processes that are revealed. The respondents\xe2\x80\x99 request did not require the\nidentification of the person who selected the documents. The only disclosed connection to the\npetitioner\xe2\x80\x99s attorney in our situation is that the petitioner gratuitously volunteered the fact that his\nattorney selected the documents. To permit this volunteered information to provide a necessary\nlink to attorney\xe2\x80\x99s thought processes, as the majority has done, is to permit the petitioner to cloak\nthe non-work product aspects of the information sought with work product protection. Certainly\nan attorney cannot cloak a document under the mantle of work product by simply reviewing it. It\nis difficult to see how an attorney or his witness may insulate the discoverable fact that the\nwitness reviewed a particular document by volunteering that the attorney selected the document\nfor deposition preparation purposes.\nFinally, the petitioner contends that the information sought was \xe2\x80\x9cfact\xe2\x80\x9d work product, and that the\nrespondents have made an insufficient showing of need to require its production. Assuming\nwithout deciding that the information sought was fact work product, I would not decide this issue\non a petition for a writ of mandamus. To reach this issue would require us to review a decision\ncommitted to the discretion of the district court, and such decisions do not constitute \xe2\x80\x9cclear and\nindisputable\xe2\x80\x9d legal error. Further, revelation of fact work product does not constitute the same\nsort of irreparable harm that would come from the revelation of opinion work product.\nBecause I find no disclosure of the attorney\'s work product that would provide a basis for\ngranting the writ, I would not reach the issue of whether a proper foundation had been\nestablished for the requested information under Federal Rule of Evidence 612 or the provision\ncovering relevant evidence found in Federal Rule of Civil Procedure 26(b)(1). Decisions on such\nmatters are not independently reviewable on a petition seeking the extraordinary remedy of\nmandamus.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c497\nBased on the record presented by the petitioner, I fail to see how any conclusions may be\ndrawn as to what his attorney may or may not have thought about this litigation. The mere\nidentification of documents used to prepare a witness for his deposition does not convey any\nmeaningful information of the type entitled to protection under the work product doctrine. I would\ndeny the petition.\nQuestions:\n1. Why did the majority hold that the attorney\xe2\x80\x99s choice of which documents to show Sporck\nin preparation for the deposition was opinion work product?\n2. Why did the dissent argue that it was not work product at all?\nUnited States v. Deloitte LLP, 610 F. 3d 129 (D.C. Cir. 2010)\nSummary: Dow Chemicals filed an action disputing a tax adjustment. Among other\nthings, the IRS subpoenaed documents from Deloitte & Touche, Dow\xe2\x80\x99s auditor. Deloitte\nrefused to produce three documents, under the work product doctrine. The district court\ndenied the IRS\xe2\x80\x99s motion to compel, finding that the documents were created in\nanticipation of litigation and reflected attorney thoughts, and therefore were protected by\nthe work product doctrine. The circuit court vacated in part and affirmed in part, holding\nthat the district court lacked sufficient information to determine whether some of the\ndocuments were work product, but did not abuse its discretion with respect to other\ndocuments.\nSENTELLE, Chief Judge:\nThe United States appeals from a district court order denying its motion to compel Dow\nChemical Company\xe2\x80\x99s independent auditor, Deloitte & Touche USA, LLP, to produce three\ndocuments in connection with ongoing tax litigation between Dow and the government. The\ndistrict court ruled that all three documents were protected from discovery under the workproduct doctrine. On appeal, the government contends that one of the documents is not work\nproduct because it was prepared by Deloitte during the audit process. In addition, while it\nconcedes that the other two documents are work product, it argues that Dow waived workproduct protection when it disclosed them to Deloitte. We vacate the district court\'s decision that\nthe document prepared by Deloitte is work product and remand for in camera review to\ndetermine whether it is entirely work product. With respect to the other two documents, we\naffirm the district court\xe2\x80\x99s decision that Dow did not waive work-product protection when it\ndisclosed them to Deloitte.\nI. Background\nThis discovery dispute arises from ongoing tax litigation in the U.S. District Court for the Middle\nDistrict of Louisiana. The litigation concerns the tax treatment of two partnerships owned by\nDow Chemical Company and two of its wholly-owned subsidiaries. The first of these\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c498\npartnerships was Chemtech I; it was succeeded by Chemtech II. In 2005, Dow filed a civil suit\nchallenging IRS adjustments to partnership returns filed by Chemtech I and Chemtech II. During\ndiscovery, the government subpoenaed documents from Dow\xe2\x80\x99s independent auditor, Deloitte &\nTouche USA, LLP. Since the subpoena sought production in Washington, D.C., it issued from\nthe U.S. District Court for the District of Columbia. Deloitte produced a number of documents,\nbut refused to produce three documents Dow identified as attorney work product. In response,\nthe government filed a motion to compel production.\nThe three disputed documents are described in Dow\xe2\x80\x99s privilege log and in a declaration by\nWilliam Curry, Dow\xe2\x80\x99s Director of Taxes. The first document is a 1993 draft memorandum\nprepared by Deloitte that summarizes a meeting between Dow employees, Dow\xe2\x80\x99s outside\ncounsel, and Deloitte employees about the possibility of litigation over the Chemtech I\npartnership, and the necessity of accounting for such a possibility in an ongoing audit. This\nmeeting took place after Dow informed Deloitte about the likelihood of litigation over the\nChemtech I transaction. The second is a 1998 memorandum and flow chart prepared by two\nDow employees \xe2\x80\x94 an accountant and an in-house attorney. The third is a 2005 tax opinion\nprepared by Dow\xe2\x80\x99s outside counsel. Curry\xe2\x80\x99s declaration explains that the second and third\ndocuments were disclosed to Deloitte so that it could \xe2\x80\x9creview the adequacy of Dow\xe2\x80\x99s\ncontingency reserves for the Chemtech transactions. According to Curry, Deloitte \xe2\x80\x9ccompelled\nDow\xe2\x80\x99s production of these documents by informing the company that access to these\ndocuments was required in order to provide Dow with an unqualified audit opinion for its public\nfinancial statements.\xe2\x80\x9d The privilege log describes the subject matter of these documents as \xe2\x80\x9ctax\nissues related to the Chemtech partnership\xe2\x80\x9d and states that each one is a \xe2\x80\x9cdocument prepared\nin anticipation of litigation.\xe2\x80\x9d We will refer to the first document, which was prepared by Deloitte,\nas the \xe2\x80\x9cDeloitte Memorandum,\xe2\x80\x9d and the second and third documents, which were created by\nDow, as the \xe2\x80\x9cDow Documents.\xe2\x80\x9d\nThe district court denied the government\xe2\x80\x99s motion to compel without reviewing the disputed\ndocuments in camera. It concluded that the Deloitte Memorandum was work product because it\nwas \xe2\x80\x9cprepared because of the prospect of litigation with the IRS over the tax treatment of\nChemtech.\xe2\x80\x9d The court further concluded that, although the document was created by Deloitte, it\nwas nonetheless Dow\xe2\x80\x99s work product because \xe2\x80\x9cits contents record the thoughts of Dow\xe2\x80\x99s\ncounsel regarding the prospect of litigation.\xe2\x80\x9d In addition, the court rejected the government\xe2\x80\x99s\ncontention that Dow had waived work-product protection for the three documents. The court\nacknowledged that disclosing work product to a third party can waive protection if that\ndisclosure is \xe2\x80\x9cinconsistent with the maintenance of secrecy from the disclosing party\xe2\x80\x99s\nadversary,\xe2\x80\x9d but concluded that Dow\xe2\x80\x99s disclosure to Deloitte was not inconsistent with\nmaintaining secrecy because (1) Deloitte was not a potential adversary and (2) nothing\nsuggested that it was unreasonable for Dow to expect Deloitte to maintain confidentiality. The\ngovernment appeals this ruling, and Dow has intervened to assert work-product protection.\nII. Analysis\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c499\nThe government contends that the Deloitte Memorandum is not attorney work product.\nAlternatively, it argues that even if the Deloitte Memorandum is work product, Dow waived workproduct protection when it orally disclosed the information recorded therein to Deloitte. Turning\nto the Dow Documents, the government concedes they are attorney work product, but argues\nthat Dow waived work-product protection when it gave them to Deloitte.\nA. The Work-Product Doctrine\nThe Supreme Court established the work-product doctrine in Hickman v. Taylor, which held that\nan attorney\'s notes recording his interviews with witnesses to the litigation-prompting incident\nwere protected from discovery. The Court recognized that to prepare for litigation, an attorney\nmust \xe2\x80\x9cassemble information, sift what he considers to be the relevant from the irrelevant facts,\nprepare his legal theories and plan his strategy without undue and needless interference.\xe2\x80\x9d This\npreparation \xe2\x80\x9cis reflected in interviews, statements, memoranda, correspondence, briefs, mental\nimpressions, personal beliefs, and countless other tangible and intangible ways.\xe2\x80\x9d The Court\nreasoned that giving opposing counsel access to such work product would cause significant\nproblems:\nMuch of what is now put down in writing would remain unwritten. An attorney\xe2\x80\x99s thoughts,\nheretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices\nwould inevitably develop in the giving of legal advice and in the preparation of cases for\ntrial. The effect on the legal profession would be demoralizing. And the interests of the\nclients and the cause of justice would be poorly served.\nConsequently, the Court concluded that attorney work product is protected from discovery\nunless \xe2\x80\x9cthe one who would invade that privacy\xe2\x80\x9d carries the burden of \xe2\x80\x9cestablishing adequate\nreasons to justify production through a subpoena or court order.\xe2\x80\x9d\nThe work-product doctrine announced in Hickman was subsequently partially codified in Federal\nRule of Civil Procedure 26(b)(3), which states:\n(A) Documents and Tangible Things. Ordinarily, a party may not discover documents\nand tangible things that are prepared in anticipation of litigation or for trial by or for\nanother party or its representative (including the other party\xe2\x80\x99s attorney, consultant,\nsurety, indemnitor, insurer, or agent).\nRule 26(b)(3) allows a court to order disclosure when the requesting party can show a\n\xe2\x80\x9csubstantial need\xe2\x80\x9d for the material and an inability to procure equivalent information \xe2\x80\x9cwithout\nundue hardship.\xe2\x80\x9d When a court orders disclosure under this exception, however, it must still\n\xe2\x80\x9cprotect against disclosure of the mental impressions, conclusions, opinions, or legal theories of\na party\xe2\x80\x99s attorney or other representative concerning the litigation.\xe2\x80\x9d This type of work product,\nwhich is often described as opinion work product, \xe2\x80\x9cis virtually undiscoverable.\xe2\x80\x9d\nB. The Deloitte Memorandum\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c500\n\nThe government makes two categorical arguments that the Deloitte Memorandum cannot be\nwork product. First, it argues that the Deloitte Memorandum cannot be work product because it\nwas created by Deloitte, not Dow or its representative. Second, it argues that the Deloitte\nMemorandum cannot be work product because it was generated as part of the routine audit\nprocess, not in anticipation of litigation. If either argument is correct, the Deloitte Memorandum\ncannot be work product, regardless of its contents. We reject both arguments, but nevertheless\nconclude that the district court lacked sufficient information to determine that the entire Deloitte\nMemorandum is work product.\n1\nThe government first contends that Dow cannot claim work-product protection for the Deloitte\nMemorandum because it was prepared by Deloitte. Rule 26(b)(3) only protects \xe2\x80\x9cdocuments and\ntangible things that are prepared by or for another party or its representative.\xe2\x80\x9d Given this\nlanguage, the government argues that the Deloitte Memorandum is not work product because\nDeloitte is not Dow\xe2\x80\x99s representative. It relies principally on United States v. Arthur Young & Co.,\nin which the Supreme Court refused to recognize an accountant work-product privilege. In\nArthur Young, the Court contrasted the role of an attorney with that of an accountant, explaining\nthat an attorney is \xe2\x80\x9ca loyal representative whose duty it is to present the client\xe2\x80\x99s case in the most\nfavorable possible light,\xe2\x80\x9d whereas an independent certified public accountant has a \xe2\x80\x9cpublic\nresponsibility\xe2\x80\x9d and \xe2\x80\x9cowes ultimate allegiance to the corporation\xe2\x80\x99s creditors and stockholders, as\nwell as to the investing public.\xe2\x80\x9d In the government\xe2\x80\x99s view, Arthur Young demonstrates that\nDeloitte cannot be Dow\xe2\x80\x99s representative, which in turn means that the Deloitte Memorandum\ncannot be work product under the plain language of Rule 26(b)(3). Dow counters that the\n\xe2\x80\x9crepresentative\xe2\x80\x9d for purposes of Rule 26(b)(3) is its counsel, whose thoughts and opinions are\nrecorded in the document. In addition, it argues that the Deloitte Memorandum is work product\nbecause it contains the same type of opinion work product that is found in the Dow Documents,\nwhich the government concedes are work product.\nEven if the government is correct in asserting that the Deloitte Memorandum falls outside the\ndefinition given by Rule 26(b)(3), this does not conclusively establish that it is not work product.\nThe government mistakenly assumes that Rule 26(b)(3) provides an exhaustive definition of\nwhat constitutes work product. On the contrary, Rule 26(b)(3) only partially codifies the workproduct doctrine announced in Hickman. Rule 26(b)(3) addresses only \xe2\x80\x9cdocuments and tangible\nthings,\xe2\x80\x9d but Hickman\'s definition of work product extends to \xe2\x80\x9cintangible\xe2\x80\x9d things. Moreover, in\nHickman, the Court explained that the attorney\xe2\x80\x99s \xe2\x80\x9cmental impressions\xe2\x80\x9d were protected from\ndiscovery, so that he could not be forced to \xe2\x80\x9crepeat or write out\xe2\x80\x9d that information in discovery.\nThus Hickman provides work-product protection for intangible work product independent of Rule\n26(b)(3).\nThe government focuses on Deloitte\xe2\x80\x99s role in creating the document and on its relationship to\nDow. Under Hickman, however, the question is not who created the document or how they are\nrelated to the party asserting work-product protection, but whether the document contains work\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c501\nproduct \xe2\x80\x94 the thoughts and opinions of counsel developed in anticipation of litigation. The\ndistrict court found that the memorandum records those thoughts, even though Deloitte and not\nDow or its attorney committed them to paper. The work product privilege does not depend on\nwhether the thoughts and opinions were communicated orally or in writing, but on whether they\nwere prepared in anticipation of litigation. Thus Deloitte\xe2\x80\x99s preparation of the document does not\nexclude the possibility that it contains Dow\xe2\x80\x99s work product.\n2\nThe government next contends that the Deloitte Memorandum cannot be work product because\nit was generated during an annual audit, not prepared in anticipation of litigation. The courts are\nnot unanimous on the proper test for determining whether a document was prepared \xe2\x80\x9cin\nanticipation of litigation.\xe2\x80\x9d Under the test adopted by most circuits, the question is whether the\ndocument was created \xe2\x80\x9cbecause of\xe2\x80\x9d the anticipated litigation. The Fifth Circuit, however,\nrequires that anticipation of litigation be the \xe2\x80\x9cprimary motivating purpose\xe2\x80\x9d behind the document\xe2\x80\x99s\ncreation.\nLike most circuits, we apply the \xe2\x80\x9cbecause of\xe2\x80\x9d test, asking \xe2\x80\x9cwhether, in light of the nature of the\ndocument and the factual situation in the particular case, the document can fairly be said to\nhave been prepared or obtained because of the prospect of litigation.\xe2\x80\x9d In addition, while this\nstandard addresses a \xe2\x80\x9cdocument,\xe2\x80\x9d it applies equally to work product in other forms. Thus for the\nDeloitte Memorandum, the question is whether it records information prepared by Dow or its\nrepresentatives because of the prospect of litigation.\nIn the government\xe2\x80\x99s view, the Deloitte Memorandum was prepared not \xe2\x80\x9cbecause of the prospect\nof litigation,\xe2\x80\x9d but as part of the routine audit process. The government asserts that a document\xe2\x80\x99s\nfunction, not its content, determines whether it is work product. For this proposition the\ngovernment relies on Delaney, Migdail & Young, Chartered v. IRS. In Delaney, a law firm\nsought to obtain under the Freedom of Information Act memoranda and supporting documents\nrelating to the government\xe2\x80\x99s legal analysis of an Internal Revenue Service program concerning\nthe use of statistical sampling in auditing large accounts. In that case it was the IRS that\nasserted work-product protection. The court held that the documents were work product\nbecause they \xe2\x80\x9cadvised the agency of the types of legal challenges likely to be mounted against\na proposed program, potential defenses available to the agency, and the likely outcome.\xe2\x80\x9d In its\nreasoning, the court noted that a previous work-product decision had identified \xe2\x80\x9cthe function of\nthe documents as the critical issue.\xe2\x80\x9d The government seizes on this language, arguing that the\nDeloitte Memorandum is not work product because its function was to facilitate Deloitte\xe2\x80\x99s audit,\nnot to prepare Dow for litigation.\nWe think the government misreads Delaney. While Delaney used the term \xe2\x80\x9cfunction,\xe2\x80\x9d it was not\nconsidering any distinction between function and content in determining whether a document\nconstituted work product. On the contrary, the court evaluated the function of the IRS\ndocuments at issue by examining their contents. It contrasted the documents at issue in the\nCoastal States case, which were like \xe2\x80\x9can agency manual, fleshing out the meaning of the statute\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c502\nit was authorized to enforce,\xe2\x80\x9d with the documents at issue in Delaney, which were memoranda\ndescribing potential legal challenges, possible defenses, and likely outcomes. Delaney does not\nsupport the proposition that we should look solely to a document\'s function divorced from its\ncontents in determining its status as work product.\nIn short, a document can contain protected work-product material even though it serves multiple\npurposes, so long as the protected material was prepared because of the prospect of litigation.\n3\nRejecting the government\'s categorical arguments establishes only that the Deloitte\nMemorandum may be protected work product under the law; we must now determine whether it\nis. On examination of the record, we conclude that the district court did not have a sufficient\nevidentiary foundation for its holding that the memorandum was purely work product. According\nto the record, the document was created during Deloitte\xe2\x80\x99s preparation of an audit report which in\nDeloitte\xe2\x80\x99s view required consideration of potential litigation. The meeting generating the\ndocument included both Deloitte and Dow employees, as well as Dow\'s outside counsel. The\ndocument itself was prepared by a third party. While none of this negates the possibility of workproduct privilege, it could make it likely that the document includes other information that is not\nwork product. According to Dow\xe2\x80\x99s privilege log and the Curry declaration, the memorandum\ndoes contain thoughts and analyses by legal counsel, but this does not rule out or even render\nunlikely the possibility that it also includes other facts, other thoughts, other analyses by nonattorneys which may not be so intertwined with the legal analysis as to warrant protection under\nthe work-product doctrine. We will therefore remand this question to the district court for the\npurpose of independently assessing whether the document was entirely work product, or\nwhether a partial or redacted version of the document could have been disclosed. Accordingly,\nwe vacate the district court\'s decision that the Deloitte Memorandum was work product and\nremand so that the district court can examine the document in camera to determine whether it is\nentirely work product.\nC. The Dow Documents\nAlthough the government concedes that the Dow Documents are work product, it contends that\nDow waived work-product protection by disclosing them to Deloitte. To the best of our\nknowledge, no circuit has addressed whether disclosing work product to an independent auditor\nconstitutes waiver. Among the district courts that have addressed this issue, most have found\nno waiver.\nWhile voluntary disclosure waives the attorney-client privilege, it does not necessarily waive\nwork-product protection. The attorney-client privilege and the work-product doctrine serve\ndifferent purposes: the former protects the attorney-client relationship by safeguarding\nconfidential communications, whereas the latter promotes the adversary process by insulating\nan attorney\xe2\x80\x99s litigation preparation from discovery. Voluntary disclosure waives the attorneyclient privilege because it is inconsistent with the confidential attorney-client relationship.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c503\nVoluntary disclosure does not necessarily waive work-product protection, however, because it\ndoes not necessarily undercut the adversary process. Nevertheless, disclosing work product to\na third party can waive protection if \xe2\x80\x9csuch disclosure, under the circumstances, is inconsistent\nwith the maintenance of secrecy from the disclosing party\'s adversary.\xe2\x80\x9d Under this standard, the\nvoluntary disclosure of attorney work product to an adversary or a conduit to an adversary\nwaives work-product protection for that material.\nApplying this standard, the government contends that Dow has waived work-product protection\nfor the Dow Documents because Deloitte is (1) a potential adversary and (2) a conduit to other\nadversaries. We reject both contentions and conclude that Dow has not waived the protection.\n1\nThe government contends that Deloitte is a potential adversary of Dow because disputes\nsometimes arise between independent auditors and their clients and because independent\nauditors have the power to issue opinions that adversely affect their clients. Neither argument\ndemonstrates that Deloitte is a potential adversary for purposes of waiver analysis. First, as an\nindependent auditor, Deloitte cannot be Dow\xe2\x80\x99s adversary. Even the threat of litigation between\nan independent auditor and its client can compromise the auditor\'s independence and\nnecessitate withdrawal. Further, Deloitte\xe2\x80\x99s power to issue an adverse opinion, while significant,\ndoes not make it the sort of litigation adversary contemplated by the waiver standard. Similarly,\n\xe2\x80\x9cany tension between an auditor and a corporation that arises from an auditor\xe2\x80\x99s need to\nscrutinize and investigate a corporation\'s records and book-keeping practices simply is not the\nequivalent of an adversarial relationship contemplated by the work product doctrine.\xe2\x80\x9d Second,\nthe possibility of a future dispute between Deloitte and Dow does not render Deloitte a potential\nadversary for the present purpose. If it did, any voluntary disclosure would constitute waiver. Yet\nthe work-product doctrine allows disclosures as long as they do not undercut the adversary\nprocess.\nHere, the question is not whether Deloitte could be Dow\xe2\x80\x99s adversary in any conceivable future\nlitigation, but whether Deloitte could be Dow\xe2\x80\x99s adversary in the sort of litigation the Dow\nDocuments address. We conclude that the answer must be no. In preparing the Dow\nDocuments, Dow anticipated a dispute with the IRS, not a dispute with Deloitte. The documents,\nwhich concern the tax implications of the Chemtech partnerships, would not likely be relevant in\nany dispute Dow might have with Deloitte. Thus Deloitte cannot be considered a potential\nadversary with respect to the Dow Documents.\n2\nThe government also asserts that Deloitte is a conduit to Dow\xe2\x80\x99s adversaries. It claims the district\ncourt failed to address this question, but this ignores the district court\'s explicit statement that\n\xe2\x80\x9cno evidence suggests that it was unreasonable for Dow to expect Deloitte USA to maintain\nconfidentiality.\xe2\x80\x9d Like the district court, we conclude that Deloitte is not a conduit to Dow\xe2\x80\x99s\nadversaries.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c504\n\nOur prior decisions applying the \xe2\x80\x9cmaintenance of secrecy\xe2\x80\x9d standard, while fact-intensive, have\ngenerally made two discrete inquiries in assessing whether disclosure constitutes waiver. First,\nwe have considered whether the disclosing party has engaged in self-interested selective\ndisclosure by revealing its work product to some adversaries but not to others. Such conduct\nmilitates in favor of waiver, for it is \xe2\x80\x9cinconsistent and unfair to allow parties to select according to\ntheir own self-interest to which adversaries they will allow access to the materials.\xe2\x80\x9d\nSecond, we have examined whether the disclosing party had a reasonable basis for believing\nthat the recipient would keep the disclosed material confidential. A reasonable expectation of\nconfidentiality may derive from common litigation interests between the disclosing party and the\nrecipient. \xe2\x80\x9cThe existence of common interests between transferor and transferee is relevant to\ndeciding whether the disclosure is consistent with the nature of the work product privilege.\xe2\x80\x9d This\nis true because when common litigation interests are present, \xe2\x80\x9cthe transferee is not at all likely\nto disclose the work product material to the adversary.\xe2\x80\x9d Alternately, a reasonable expectation of\nconfidentiality may be rooted in a confidentiality agreement or similar arrangement between the\ndisclosing party and the recipient. Nevertheless, a confidentiality agreement must be relatively\nstrong and sufficiently unqualified to avoid waiver. In Williams, for example, we concluded that\nthe government\xe2\x80\x99s assurance that it would maintain confidentiality \xe2\x80\x9cto the extent possible\xe2\x80\x9d was\nnot sufficiently strong or sufficiently unqualified to prevent the government from disclosing the\ninformation to a criminal defendant under Brady v. Maryland. Likewise, we have determined that\na mere promise to give the disclosing party notice before releasing documents does not support\na reasonable expectation of confidentiality.\nThe selective disclosure inquiry is straightforward. Selective disclosure involves disclosing work\nproduct to at least one adversary. As we have explained, Deloitte is not an adversary, so Dow\xe2\x80\x99s\ndisclosure to Deloitte was not selective disclosure. The \xe2\x80\x9creasonable expectation of\nconfidentiality\xe2\x80\x9d inquiry is more complicated. As to common interests, Dow and Deloitte do not\nhave common litigation interests in the Dow Documents \xe2\x80\x94 Dow has a litigation interest in the\ndocuments because of its interest in the Chemtech partnerships, but Deloitte has no similar\ninterest in the documents. Absent common interests, the question is whether a confidentiality\nagreement or similar assurance gave Dow a reasonable expectation that Deloitte would keep its\nwork product confidential.\nWe conclude that Dow had a reasonable expectation of confidentiality because Deloitte, as an\nindependent auditor, has an obligation to refrain from disclosing confidential client information.\nRule 301 of the American Institute of Certified Public Accountants Code of Professional Conduct\nprovides: \xe2\x80\x9cA member in public practice shall not disclose any confidential client information\nwithout the specific consent of the client.\xe2\x80\x9d William Curry\'s declaration explains that \xe2\x80\x9cDow\nfurnished these documents to Deloitte with the expectation that Deloitte would retain the\nconfidentiality of the two documents.\xe2\x80\x9d Given the obligation imposed by Rule 301, we think this\nexpectation was reasonable.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c505\nThe government responds that this is a \xe2\x80\x9cqualified assurance\xe2\x80\x99 that does not suffice to prevent\nwaiver because Rule 301 also explains that it \xe2\x80\x9cshall not be construed to affect in any way the\nmember\xe2\x80\x99s obligation to comply with a validly issued and enforceable subpoena or summons.\xe2\x80\x9d\nBut an assertion of work-product protection challenges the enforceability of a subpoena with\nrespect to those materials. Thus Deloitte could refuse to produce the documents, thereby\nallowing Dow to intervene and assert work-product protection, without violating its obligation to\ncomply with enforceable subpoenas. Indeed, this is exactly what Deloitte did. Accordingly, this\ncaveat does not significantly diminish the reasonableness of Dow\'s expectation of\nconfidentiality.\nThe government also attempts to bolster its waiver argument by identifying instances in which\nan independent auditor might disclose information obtained from a company whose finances it\naudits. For example, it asserts that Deloitte could make Dow disclose its confidential tax\nanalysis in footnotes to its public financial statements. Likewise, Deloitte could testify about\nconfidential information obtained from Dow in proceedings brought by the SEC or private\nparties. Or Deloitte might report illegal acts it detects during its audit. Finally, the government\nreturns to Arthur Young, arguing that as an independent auditor, Deloitte is a \xe2\x80\x9cpublic watchdog\xe2\x80\x9d\nwhose ultimate allegiance is to Dow\'s creditors, stockholders, and the investing public \xe2\x80\x94 all\npotential adversaries of Dow. In sum, the government contends that Dow could not reasonably\nexpect confidentiality from Deloitte after giving it the Dow Documents, given the myriad ways\nDeloitte could reveal that information.\nOf course Deloitte might disclose some information relevant to Dow\xe2\x80\x99s finances. But the\ngovernment has neither pointed to any regulatory provision nor posited any specific\ncircumstance under which Deloitte would be required to disclose attorney work product like that\ncontained in the Dow Documents. An independent auditor can fulfill its duties and render an\nopinion concerning a company\xe2\x80\x99s public financial statements without revealing every piece of\ninformation it reviews during the audit process. In short, Deloitte\xe2\x80\x99s independent auditor\nobligations do not make it a conduit to Dow\xe2\x80\x99s adversaries.\nLikewise, the government\'s reliance on Arthur Young is misplaced. In Arthur Young, the Court\nconsidered whether accountant work-product should be granted the same protection attorney\nwork product receives. The government quotes the Court\'s statement that \xe2\x80\x9cTo insulate from\ndisclosure a certified public accountant\'s interpretations of the client\'s financial statements\nwould be to ignore the significance of the accountant\'s role as a disinterested analyst charged\nwith public obligations.\xe2\x80\x9d All well and good. In this case, however, the government attempts to\ndiscover not an independent auditor\'s \xe2\x80\x9cinterpretations of the client\'s financial statements,\xe2\x80\x9d which\nArthur Young would permit, but an attorney\'s thoughts and opinions developed in anticipation of\nlitigation, which the work-product doctrine forbids.\nFurthermore, we are mindful that independent auditors have significant leverage over the\ncompanies whose finances they audit. An auditor can essentially compel disclosure by refusing\nto provide an unqualified opinion otherwise. Finding waiver based on such disclosures could\nwell encourage the sort of \xe2\x80\x9cinefficiency, unfairness and sharp practices" that Hickman sought to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c506\navoid. For example, it might discourage companies from seeking legal advice and candidly\ndisclosing that information to independent auditors. Moreover, the government has not proffered\nany good reason for wanting the Dow Documents other than its desire to know what Dow\'s\ncounsel thought about the Chemtech partnerships. Granting discovery under these\ncircumstances would undercut the adversary process and let the government litigate "on wits\nborrowed from the adversary," We conclude that the district court applied the correct legal\nstandard and acted within its discretion in determining that Dow had not waived work-product\nprotection. Consequently, we affirm the district court\'s decision denying the government\'s\nmotion to compel with respect to the Dow Documents.\nQuestions:\n1. Why did the court hold that a document disclosed to a third-party can be protected by\nthe work product doctrine? Do you agree with its conclusion?\n2. When would a document disclosed to a third-party not be protected by the work product\ndoctrine?\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nSean Grammel, Comment, Protecting Search Terms as Opinion Work Product: Applying\nthe Work Product Doctrine to Electronic Discovery, 161 U. Pa. L. Rev. 2063 (2013)\nSherman L. Cohn, The Work-Product Doctrine: Protection, Not Privilege, 71 Geo. L.J.\n917 (1984)\nVivian K. Yamaguchi, Discovery and the Work Product Doctrine, 11 Loy. U. Chi. L. J.\n863 (1980)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c507\n5.7: Exceptions to Privilege & Work Product\nHush hush, keep it down now, voices carry.82\nListen, do you want to know a secret? Do you promise not to tell? Closer. Let me whisper in\nyour ear, say the words you long to hear.83\nWhile the attorney-client privilege and work product doctrine provide strong protection against\ndiscovery of the communications and documents they protect, they are both subject to waiver\nand other exceptions.\nThe attorney-client privilege belongs to the client, and can be waived by the client. Obviously, a\nclient can intentionally waive the attorney-client privilege. But it less clear whether a client can\nunintentionally waive the attorney-client privilege, and if so, when an unintentional waiver will be\neffective. And it is even less clear whether an attorney or third-party can unintentionally waive\nthe attorney-client privilege.\nTypically, a client\xe2\x80\x99s intentional disclosure of a privileged communication to an non-privileged\nthird-party constitutes a waiver of the attorney-client privilege, even if the client didn\xe2\x80\x99t intend to\nwaive the privilege. But what if the client unintentionally disclosed the communication? For\nexample, what if the client misplaced a copy of a privileged communication and a non-privileged\nthird-party found it? Or what if the client disclosed a privileged communication to a nonprivileged third-party, under the mistaken belief that the third-party was privileged?\nIn theory, an attorney cannot waive the attorney-client privilege. But it is unclear whether\ncommunications intentionally or unintentionally disclosed to a third-party by an attorney retain\nthe privilege. For example, what if an attorney inadvertently produces a privileged document?\nOr what if an attorney intentionally discloses a privileged communication to the public? Likewise,\nit is unclear whether communications obtained and disclosed by a third-party retain the\nprivilege.\nIn most jurisdictions, inadvertent disclosure does not necessarily destroy the privilege.\nSpecifically, if an attorney inadvertently produces a privileged document, opposing counsel must\nreturn or destroy the document, and may not read or otherwise use the document. And even an\nintentional disclosure by an attorney will not necessarily destroy the privilege. But in some\njurisdictions, inadvertent disclosure may destroy the privilege. And if a privileged communication\nbecomes generally known, at some point the privilege is probably constructively waived,\nirrespective of how the waiver occurred.\nIn addition, the attorney-client privilege and work product doctrine are subject to the crime-fraud\nexception, which provides that communications and documents in furtherance of a crime or\n\n82\n83\n\n\xe2\x80\x98Til Tuesday, Voices Carry, Voices Carry (1985).\nThe Beatles, Do You Want to Know a Secret, Please Please Me (1963).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c508\nfraud are not protected. The privilege applies to confidential attorney-client communications\nabout a crime or fraud that has already occurred, in order to enable clients to obtain candid legal\nadvice. But the privilege does not apply to communications in furtherance of a future crime or\nfraud.\nThe work product doctrine may be subject to an even broader exception for \xe2\x80\x9cattorney\nmisconduct,\xe2\x80\x9d which provides that documents are not protected if they are the product of\nimproper behavior on the part of the attorney.\nFederal Rule of Civil Procedure Rule 26(b): Duty to Disclose\n5. Claiming Privilege or Protecting Trial-Preparation Materials.\nA. Information Withheld. When a party withholds information otherwise discoverable\nby claiming that the information is privileged or subject to protection as trialpreparation material, the party must:\ni.\nexpressly make the claim; and\nii.\ndescribe the nature of the documents, communications, or tangible things\nnot produced or disclosed\xe2\x80\x94and do so in a manner that, without revealing\ninformation itself privileged or protected, will enable other parties to\nassess the claim.\nB. Information Produced. If information produced in discovery is subject to a claim\nof privilege or of protection as trial-preparation material, the party making the\nclaim may notify any party that received the information of the claim and the\nbasis for it. After being notified, a party must promptly return, sequester, or\ndestroy the specified information and any copies it has; must not use or disclose\nthe information until the claim is resolved; must take reasonable steps to retrieve\nthe information if the party disclosed it before being notified; and may promptly\npresent the information to the court under seal for a determination of the claim.\nThe producing party must preserve the information until the claim is resolved.\nFederal Rule of Evidence 502: Attorney-Client Privilege and Work Product; Limitations on\nWaiver\nThe following provisions apply, in the circumstances set out, to disclosure of a communication\nor information covered by the attorney-client privilege or work-product protection.\na. Disclosure Made in a Federal Proceeding or to a Federal Office or Agency; Scope of a\nWaiver. When the disclosure is made in a federal proceeding or to a federal office or\nagency and waives the attorney-client privilege or work-product protection, the waiver\nextends to an undisclosed communication or information in a federal or state proceeding\nonly if:\n1. the waiver is intentional;\n2. the disclosed and undisclosed communications or information concern the same\nsubject matter; and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c509\n\nb.\n\nc.\n\nd.\n\ne.\n\nf.\n\ng.\n\n3. they ought in fairness to be considered together.\nInadvertent Disclosure. When made in a federal proceeding or to a federal office or\nagency, the disclosure does not operate as a waiver in a federal or state proceeding if:\n1. the disclosure is inadvertent;\n2. the holder of the privilege or protection took reasonable steps to prevent\ndisclosure; and\n3. the holder promptly took reasonable steps to rectify the error, including (if\napplicable) following Federal Rule of Civil Procedure 26(b)(5)(B).\nDisclosure Made in a State Proceeding. When the disclosure is made in a state\nproceeding and is not the subject of a state-court order concerning waiver, the\ndisclosure does not operate as a waiver in a federal proceeding if the disclosure:\n1. would not be a waiver under this rule if it had been made in a federal proceeding;\nor\n2. is not a waiver under the law of the state where the disclosure occurred.\nControlling Effect of a Court Order. A federal court may order that the privilege or\nprotection is not waived by disclosure connected with the litigation pending before the\ncourt - in which event the disclosure is also not a waiver in any other federal or state\nproceeding.\nControlling Effect of a Party Agreement. An agreement on the effect of disclosure in a\nfederal proceeding is binding only on the parties to the agreement, unless it is\nincorporated into a court order.\nControlling Effect of This Rule. Notwithstanding Rules 101 and 1101, this rule applies to\nstate proceedings and to federal court-annexed and federal court-mandated arbitration\nproceedings, in the circumstances set out in the rule. And notwithstanding Rule 501, this\nrule applies even if state law provides the rule of decision.\nDefinitions. In this rule:\n1. \xe2\x80\x9cattorney-client privilege\xe2\x80\x9d means the protection that applicable law provides for\nconfidential attorney-client communications; and\n2. \xe2\x80\x9cwork-product protection\xe2\x80\x9d means the protection that applicable law provides for\ntangible material (or its intangible equivalent) prepared in anticipation of litigation\nor for trial.\n\nInadvertent Waiver\nIn re Sealed Case, 877 F. 2d 976 (D.C. Cir. 1989)\nSummary: The IRS investigated a company for tax evasion and subpoenaed documents\nrelevant to the investigation. The company refused to produce certain documents,\nclaiming attorney-client privilege. The government conceded that the attorney-client\nprivilege applied to the documents, but argued that it had been waived. The district court\nfound that the privilege was waived with respect to all of the documents, because they\nwere disclosed to third-parties. The circuit court found that the privilege had been waived\nfor some of the documents, but possibly not all of them.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c510\nSILBERMAN, Circuit Judge:\nThe appellant, \xe2\x80\x9cCompany,\xe2\x80\x9d appeals from a contempt order of the district court. Company\nrefused to comply with a grand jury subpoena insofar as it was directed to six documents that\nCompany claimed were covered by attorney-client privilege. The district court held the privilege\nwas waived as to all six documents. We agree that there was at least a partial waiver of the\nprivilege, but we remand for the district court to further consider of the scope of the waiver.\nI.\nAppellant is a government contractor performing work for the Defense Department on a costplus basis. Company and its former chief executive officer are under a grand jury investigation\ninto the possibility of Company\xe2\x80\x99s tax evasion as well as a possible conspiracy to defraud the\nUnited States. It is thought CEO may have engineered a scheme whereby he received secret\nrebates (undeclared personal income to him) from subcontractors while the amounts rebated\nwere included on Company\xe2\x80\x99s books as payments to the subcontractors and thus business\nexpenses.\nThe grand jury issued a subpoena in June 1988 to Company seeking production of documents\nrelating to certain adjusting entries made to Company\'s books in the latter part of 1987.\nCompany produced the documents sought, except for six it claimed were protected by the\nattorney-client privilege. Three of these documents contain notes taken by Company\xe2\x80\x99s former\nvice president for finance at meetings with attorneys from a law firm retained by Company. The\nother three are memoranda from that vice president to Company\'s chief accounting officer\ntransmitting the law firm\'s legal advice to amend the corporate books to reflect that certain\namounts previously reported on its books \xe2\x80\x94 and to the IRS \xe2\x80\x94 as business expenses be shown\nas nondeductible income payments to CEO.\nThe government moved to compel production of all six documents, arguing that the privilege\nwas waived since the documents presumably contained only information that had been or would\neventually be reported to the IRS. The district court granted the order, concluding \xe2\x80\x9cwhatever\nattorney-client privilege that may have attached to the documents was waived by the filing (or\nthe intention to file) of required forms to the IRS.\xe2\x80\x9d Company refused to comply, was held in\ncontempt, and thereafter brought an appeal.\nWhile the appeal was pending, the government learned that one of the memoranda in question\nhad already been disclosed, in January 1988, by the CAO to the Defense Contract Audit\nAgency during a routine audit of the contractor\'s travel expenses. The government sought and\ngained a remand to permit the district court to consider this additional ground for the\ngovernment\'s claim of waiver. Appellant claimed on remand that the disclosure of the one\ndocument to the DCAA had been inadvertent (\xe2\x80\x9ca bureaucratic error\xe2\x80\x9d) and offered to prove that\nthrough the testimony of its CAO, but only if his testimony were limited to that issue and his Fifth\nAmendment privilege were not waived. The district court rejected the proffer, reiterated its prior\nfinding that if the privilege existed, it had been waived because the information in the documents\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c511\nwas to be publicly reported, and further found that the disclosure of the one document \xe2\x80\x9cwas a\nvoluntary intentional disclosure\xe2\x80\x9d which \xe2\x80\x9cconstituted a further waiver of the attorney-client\nprivilege not only with respect to the particular document but also as to all related\ncommunications.\xe2\x80\x9d The district court believed that had the disclosure to DCAA been inadvertent\nrather than intentional, it would have constituted a waiver (if that were the sole grounds for\nfinding a waiver) only with respect to that document and not the other five.\nPrior to the remand hearing it was further revealed that the vice president had entered into a\npersonal immunity agreement with the government in October 1987 and, at that time, given all\nsix of the documents to the government without Company\xe2\x80\x99s authorization. From that, we infer\nthe government continues to seek the documents through subpoena because it is uncertain as\nto the use that can be made of the copies voluntarily turned over by the vice president. The\ngovernment asserts that the attorney handling the grand jury proceedings has not been given\naccess to the documents. Nevertheless, Company urged the district court, in the exercise of its\nsupervisory power over grand jury proceedings, to conduct an evidentiary hearing to determine\nwhether the government had engaged in misconduct, which Company apparently thought might\njustify quashing the subpoena. The district court declined to do so and Company appeals that\ndetermination as well.\nII.\nThe government does not dispute that all six documents fall within Company\xe2\x80\x99s attorney-client\nprivilege. It is not argued, for instance, that the memoranda from the vice president to the CAO,\ncommunicating the advice given by counsel and directing the adjusting entries be made in\naccordance with that advice, are outside the privilege. Nor is it claimed that the conversation\nbetween the corporate officers and the law firm were not intended to be confidential so that the\nprivilege never attached. Instead, the government relies on two grounds for concluding\nCompany waived the privilege for all six documents.\nThe government first claims that because the documents provide background \xe2\x80\x9cdetail\xe2\x80\x9d supporting\nthe adjusting bookkeeping entries that have been reported to the IRS, Company has waived its\nprivilege in the documents. The government relies on several cases that have addressed the\nstatus of the attorney-client privilege in cases involving disclosure of financial information to the\nIRS or other third parties. In United States v. Cote, the Eighth Circuit held that the act of filing\namended IRS returns waived any attorney-client privilege in an attorney-supervised\naccountant\'s workpapers, which contained information later transcribed onto the returns. But the\nCourt remanded to the district court to determine whether any of the workpapers contained\n\xe2\x80\x9cunpublished expressions\xe2\x80\x9d not part of the data revealed on the tax returns. The Court also\nrecognized that in tax cases, waiver typically is not an issue, because \xe2\x80\x9cthe privilege is said not\nto attach to information which the taxpayer intends his attorney to report in the contents of a tax\nreturn.\xe2\x80\x9d\nIn that vein, United States v. (Under Seal) held that the privilege did not cover documents,\nincluding communications between two attorneys relating to a proposed tax ruling for a client,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c512\nand material supplied by the client concerning commercial transactions upon which the\nproposed tax ruling would be based. These documents, according to the court, either did not\nreveal client communications or were not meant to be confidential. The court thus applied its\nprevious holding in In re Grand Jury Proceedings that \xe2\x80\x9cif a client communicates information to\nhis attorney with the understanding that the information will be revealed to others, that\ninformation, as well as the details underlying the data which was to be published, will not enjoy\nthe privilege.\xe2\x80\x9d Apparently recognizing the aphorism that \xe2\x80\x9cGod is in the details,\xe2\x80\x9d the court\nexplained in a footnote:\nThe details underlying the published data are the communications relating the data, the\ndocument, if any, to be published containing the data, all preliminary drafts of the\ndocument, and any attorney\xe2\x80\x99s notes containing material necessary to the preparation of\nthe documents. Copies of other documents, the contents of which were necessary to the\npreparation of the published document, will also lose the privilege. But if any of the nonprivileged documents contain client communications not directly related to the published\ndata, those communications, if otherwise privileged, must be removed by the reviewing\ncourt before the document may be produced.\nAlthough these cases seem to conflate two theories \xe2\x80\x94 waiver of an existing privilege and\nabsence of an intent to maintain confidentiality in the first place \xe2\x80\x94 we think under either theory\nthe IRS cases are inapposite; the government much too facilely claims that the six documents\nare merely \xe2\x80\x9cdetails\xe2\x80\x9d underlying past or future returns. To be sure, virtually all the material in the\ndocuments reflects adjusting entries in Company\'s books, which have been or will be reported\nto the IRS.84 But the crucial significance of the documents \xe2\x80\x94 and the apparent reason the\ngovernment wishes to present them to the grand jury \xe2\x80\x94 is that they suggest Company made the\nadjusting entries on the advice of counsel (after the investigation commenced).\nThe raison d\xe2\x80\x99etre of the hallowed attorney-client privilege is the protection of a client\xe2\x80\x99s\ncommunications to counsel so that persons, including organizations, will be induced to consult\ncounsel when needed. The attorney\xe2\x80\x99s communications (his advice) to the client must also be\nprotected, because otherwise it is rather easy to deduce the client\'s communications to counsel.\nThe documents sought in this case reveal directly the attorney\xe2\x80\x99s confidential advice, and their\ndisclosure thereby invades the core of the privilege; it permits an inference to be drawn as to the\nnature of the client\'s communications with its lawyers, and, perhaps, as to their motivation (e.g.,\nguilty knowledge) for consulting counsel as well.\nEven the very existence of an attorney-client relationship, not normally protected, is privileged in\nthe rare case when a \xe2\x80\x9cstrong possibility exists that disclosure of the information would implicate\nthe client in the very matter for which legal advice was sought in the first case.\xe2\x80\x9d We therefore do\nnot think that any portion of the six documents revealing that the adjusting entries were made on\nthe advice of counsel would be disclosable under the government\xe2\x80\x99s primary theory of waiver.\n\n84\n\nIf the information has not yet been disclosed, it is hard to think of Company\xe2\x80\x99s action as a waiver.\nRather, data that Company intends to report is never privileged in the first place.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c513\nAlternatively, however, the government relies on a waiver caused by the disclosure of one\nmemo to a DCAA auditor, and we think the government is, in this respect, on firmer ground. It\nwill be recalled that Company does not dispute the disclosure but denies its voluntariness,\nclaiming it was inadvertent \xe2\x80\x94 \xe2\x80\x9ca bureaucratic error.\xe2\x80\x9d The district court found otherwise, but we\ndo not think it matters whether the waiver is labeled \xe2\x80\x9cvoluntary\xe2\x80\x9d or \xe2\x80\x9cinadvertent\xe2\x80\x9d and thus do not\nfind it necessary to consider appellant\'s claim that the CAO should have been permitted to offer\nlimited testimony on this issue only.\nAlthough the attorney-client privilege is of ancient lineage and continuing importance, the\nconfidentiality of communications covered by the privilege must be jealously guarded by the\nholder of the privilege lest it be waived. The courts will grant no greater protection to those who\nassert the privilege than their own precautions warrant. We therefore agree with those courts\nwhich have held that the privilege is lost \xe2\x80\x9ceven if the disclosure is inadvertent.\xe2\x80\x9d\nEven assuming Company\xe2\x80\x99s disclosure was due to \xe2\x80\x9cbureaucratic error,\xe2\x80\x9d which we take to be a\neuphemism that necessarily implies human error, that unfortunate lapse simply reveals that\nsomeone in the company and thereby Company itself (since it can only act through its\nemployees) was careless with the confidentiality of its privileged communications. Normally the\namount of care taken to ensure confidentiality reflects the importance of that confidentiality to\nthe holder of the privilege. To hold, as we do, that an inadvertent disclosure will waive the\nprivilege imposes a self-governing restraint on the freedom with which organizations such as\ncorporations, unions, and the like label documents related to communications with counsel as\nprivileged. To readily do so creates a greater risk of \xe2\x80\x9cinadvertent\xe2\x80\x9d disclosure by someone and\nthereby the danger that the \xe2\x80\x9cwaiver\xe2\x80\x9d will extend to all related matters, perhaps causing grave\ninjury to the organization. But that is as it should be. Otherwise, there is a temptation to seek\nartificially to expand the content of privileged matter. In other words, if a client wishes to\npreserve the privilege, it must treat the confidentiality of attorney-client communications like\njewels \xe2\x80\x94 if not crown jewels. Short of court-compelled disclosure or other equally extraordinary\ncircumstances,85 we will not distinguish between various degrees of \xe2\x80\x9cvoluntariness\xe2\x80\x9d in waivers of\nthe attorney-client privilege.\nOur conclusion that Company\xe2\x80\x99s disclosure of the one memorandum constitutes a waiver still\nleaves a question as to the scope of the waiver. Appellant would confine the waiver to the one\ndocument, but, as we have previously said, a waiver of the privilege in an attorney-client\ncommunication extends \xe2\x80\x9cto all other communications relating to the same subject matter.\xe2\x80\x9d Since\nsuch determinations properly depend heavily on the factual context in which the privilege is\nasserted, we will not disturb a district court\xe2\x80\x99s decision as to the question unless it can be shown\nthe court abused its discretion. In this case, although the district court extended the waiver to all\nsix documents, it did not fully explain why the communications were related. Of course, all six \xe2\x80\x94\nincluding the notes of the meeting \xe2\x80\x94 stemmed from the same consultation Company had with\nits law firm. But the \xe2\x80\x9csubject matter\xe2\x80\x9d of the waiver could, nevertheless, be defined in a number of\ndifferent ways. Did the district court mean, for instance, to define the \xe2\x80\x9csubject matter\xe2\x80\x9d as all\n85\n\nWe do not face here any claim that the information was acquired by a third party despite all possible\nprecautions, in which case there might be no waiver at all.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c514\ncommunications \xe2\x80\x9crelating\xe2\x80\x9d to the adjustment entries, which \xe2\x80\x94 as suggested at oral argument \xe2\x80\x94\nwould permit the individual lawyers and corporate officers present at the meeting to be called\nbefore the grand jury to describe their discussions, or perhaps even other communications\nbetween Company and its counsel? Or, alternatively, was the waiver limited to those intraCompany communications revealing that Company\xe2\x80\x99s accounting adjustments were made upon\nthe advice of counsel, in which case is it not clear whether the actual notes of the meeting must\nbe disclosed? Given the potential implications of a broad definition of the subject matter of\nCompany\xe2\x80\x99s waiver, we think it appropriate to remand to the district court for further\nconsideration of that issue.\nFurther Reading:\n\xe2\x97\x8f\n\nShawn T. Gaither, The Attorney-Client Privilege: An Analysis of Involuntary Waiver, 48\nClev. St. L. Rev. 311 (2000)\n\nThe Crime-Fraud Exception\nClark v. United States, 289 U.S. 1 (1933)\nMR. JUSTICE CARDOZO delivered the opinion of the Court.\nThere is a privilege protecting communications between attorney and client. The privilege takes\nflight if the relation is abused. A client who consults an attorney for advice that will serve him in\nthe commission of a fraud will have no help from the law. He must let the truth be told. There\nare early cases apparently to the effect that a mere charge of illegality, not supported by any\nevidence, will set the confidences free. But this conception of the privilege is without support in\nlater rulings. \xe2\x80\x9cIt is obvious that it would be absurd to say that the privilege could be got rid of\nmerely by making a charge of fraud.\xe2\x80\x9d To drive the privilege away, there must be \xe2\x80\x9csomething to\ngive colour to the charge;\xe2\x80\x9d there must be \xe2\x80\x9cprima facie evidence that it has some foundation in\nfact.\xe2\x80\x9d When that evidence is supplied, the seal of secrecy is broken. Nor does the loss of the\nprivilege depend upon the showing of a conspiracy, upon proof that client and attorney are\ninvolved in equal guilt. The attorney may be innocent, and still the guilty client must let the truth\ncome out.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c515\n\nMary Sue & L. Ron Hubbard (~1970)\nUnited States v. Zolin, 491 U.S. 554 (1989)\nSummary: In a case against the Church of Scientology (Church), the IRS sought to introduce\ninto evidence tape recordings of meetings between representatives of the Church and its\nattorney. The IRS claimed that the tapes fell within the crime-fraud exception to the attorneyclient privilege and asked the district court to listen to the tapes in camera to determine if the\nprivilege applied. The IRS attempted to provide the court with partial transcripts of the tape\nrecordings that it acquired from a confidential source so that the court could make its\ndetermination. The district court refused to listen to the tapes and the court of appeals affirmed\nby categorically refusing to listen to the tapes or read the transcripts. The IRS appealed.\nJUSTICE BLACKMUN delivered the opinion of the Court.\nThis case arises out of the efforts of the Criminal Investigation Division of the Internal Revenue\nService to investigate the tax returns of L. Ron Hubbard, founder of the Church of Scientology\nfor the calendar years 1979 through 1983. We granted certiorari to consider two issues that\nhave divided the Courts of Appeals. The first is whether, when a district court enforces an IRS\nsummons, the court may condition its enforcement order by placing restrictions on the\ndisclosure of the summoned information. The Court of Appeals in this case upheld the\nrestrictions. We affirm its judgment on that issue by an equally divided Court.\nThe second issue concerns the testimonial privilege for attorney-client communications and,\nmore particularly, the generally recognized exception to that privilege for communications in\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c516\nfurtherance of future illegal conduct \xe2\x80\x94 the so-called \xe2\x80\x9ccrime-fraud\xe2\x80\x9d exception. The specific\nquestion presented is whether the applicability of the crime-fraud exception must be established\nby \xe2\x80\x9cindependent evidence\xe2\x80\x9d (i.e., without reference to the content of the contested\ncommunications themselves), or, alternatively, whether the applicability of that exception can be\nresolved by an in camera inspection of the allegedly privileged material. We reject the\n\xe2\x80\x9cindependent evidence\xe2\x80\x9d approach and hold that the district court, under circumstances we\nexplore below, and at the behest of the party opposing the claim of privilege, may conduct an in\ncamera review of the materials in question. Because the Court of Appeals considered only\n\xe2\x80\x9cindependent evidence,\xe2\x80\x9d we vacate its judgment on this issue and remand the case for further\nproceedings.\nI\nIn the course of its investigation, the IRS sought access to 51 documents that had been filed\nwith the Clerk of the Los Angeles County Superior Court in connection with a case entitled\nChurch of Scientology of California v. Armstrong. The Armstrong litigation involved, among\nother things, a charge by the Church that one of its former members, Gerald Armstrong, had\nobtained by unlawful means documentary materials relating to Church activities, including two\ntapes. Some of the documents sought by the IRS had been filed under seal.\nThe IRS, by its Special Agent Steven Petersell, served a summons upon the Clerk on October\n24, 1984, demanding that he produce the 51 documents. The tapes were among those listed.\nOn November 21, IRS agents were permitted to inspect and copy some of the summoned\nmaterials, including the tapes.\nOn November 27, the Church and Mary Sue Hubbard, who had intervened in Armstrong,\nsecured a temporary restraining order from the United States District Court for the Central\nDistrict of California. The order required the IRS to file with the District Court all materials\nacquired on November 21 and all reproductions and notes related thereto, pending disposition\nof the intervenors\xe2\x80\x99 motion for a preliminary injunction to bar IRS use of these materials. By order\ndated December 10, the District Court returned to the IRS all materials except the tapes and the\nIRS\xe2\x80\x99 notes reflecting their contents.\nOn January 18, 1985, the IRS filed in the District Court a petition to enforce its summons. In\naddition to the tapes, the IRS sought 12 sealed documents the Clerk had refused to produce in\nresponse to the IRS summons. The Church and Mary Sue Hubbard intervened to oppose\nproduction of the tapes and the sealed documents. Respondents claimed that IRS was not\nseeking the documents in good faith, and objected on grounds of lack of relevance and\nattorney-client privilege.\nRespondents asserted the privilege as a bar to disclosure of the tapes. The IRS argued, among\nother things, however, that the tapes fell within the crime-fraud exception to the attorney-client\nprivilege, and urged the District Court to listen to the tapes in the course of making its privilege\ndetermination. In addition, the IRS submitted to the court two declarations by Agent Petersell. In\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c517\nthe first, Petersell stated his grounds for believing that the tapes were relevant to the\ninvestigation. In the second, Petersell offered a description of the tapes\xe2\x80\x99 contents, based on\ninformation he received during several interviews. Appended to this declaration \xe2\x80\x94 over\nrespondents\xe2\x80\x99 objection \xe2\x80\x94 were partial transcripts of the tapes, which the IRS lawfully had\nobtained from a confidential source.86 In subsequent briefing, the IRS reiterated its request that\nthe District Court listen to the tapes in camera before making its privilege ruling.\nAfter oral argument and an evidentiary hearing, the District Court rejected respondents\xe2\x80\x99 claim of\nbad faith. The court ordered production of 5 of the 12 documents and specified: \xe2\x80\x9cThe documents\ndelivered hereunder shall not be delivered to any other government agency by the IRS unless\ncriminal tax prosecution is sought or an Order of Court is obtained.\xe2\x80\x9d\nTurning to the tapes, the District Court ruled that respondents had demonstrated that they\ncontain confidential attorney-client communications, that the privilege had not been waived, and\nthat \xe2\x80\x9cthe \xe2\x80\x98fraud-crime\xe2\x80\x99 exception to the attorney-client privilege does not apply. The quoted\nexcerpts tend to show or admit past fraud but there is no clear indication that future fraud or\ncrime is being planned.\xe2\x80\x9d On this basis, the court held that the Clerk \xe2\x80\x9cneed not produce its copy\nof the tapes pursuant to the summons.\xe2\x80\x9d The District Court denied the IRS\xe2\x80\x99 motion for\nreconsideration, rejecting the IRS\xe2\x80\x99 renewed request that the court listen to the tapes in toto.\n\xe2\x80\x9cWhile this was at one time discussed with counsel, thereafter Mr. Petersell\xe2\x80\x99s declaration was\nsubmitted, and no one suggested that this was an inadequate basis on which to determine the\nattorney-client privilege question.\xe2\x80\x9d\nRespondents appealed to the Court of Appeals for the Ninth Circuit, and the IRS crossappealed on two relevant grounds. First, the IRS claimed that the District Court abused its\ndiscretion by placing conditions on the IRS\xe2\x80\x99 future use of the subpoenaed information. The\nCourt of Appeals disagreed, holding: \xe2\x80\x9cA district court may, when appropriate, condition\nenforcement of a summons on the IRS\xe2\x80\x99 agreeing to abide by disclosure restrictions.\xe2\x80\x9d\nSecond, the IRS contended that the District Court erred in rejecting the application of the crimefraud exception to the tapes. In particular, the IRS argued that the District Court incorrectly held\nthat the IRS had abandoned its request for in camera review of the tapes, and that the court\nshould have listened to the tapes before ruling that the crime-fraud exception was inapplicable.\nRespondents contended, in contrast, that the District Court erred in the opposite direction: they\nargued that it was error for the court to rely on the partial transcripts, because \xe2\x80\x9cin this Circuit, a\nparty cannot rely on the communications themselves \xe2\x80\x94 whether by listening to the tapes or\n\n86\n\nThe IRS denied that the transcripts were made using tapes obtained from the Superior Court or from\nany other illicit source. Agent Petersell declared: \xe2\x80\x9cThe partial transcripts were not prepared by the United\nStates from the tapes in the custody of the Superior Court for Los Angeles County, California, nor from\ncopies of the tape now in the custody of the Clerk of this Court. The transcripts were obtained from a\nconfidential source by another Special Agent prior to the issuance of this summons. The source was not a\nparty to Church of Scientology v. Armstrong, nor an attorney for any party in that proceeding.\xe2\x80\x9d As the\nDistrict Court made no finding of illegality, we assume for present purposes that the transcripts were\nlegally obtained.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c518\nreviewing excerpts or transcripts of them \xe2\x80\x94 to bear its burden to invoke the exception but must\nbear the burden by independent evidence.\xe2\x80\x9d\nThe panel of the Court of Appeals agreed with respondents that, under Shewfelt, \xe2\x80\x9cthe\nGovernment\xe2\x80\x99s evidence of crime or fraud must come from sources independent of the attorneyclient communications recorded on the tapes,\xe2\x80\x9d thereby implicitly holding that even if the IRS had\nproperly preserved its demand for in camera review, the District Court would have been without\npower to grant it. The Court of Appeals then reviewed \xe2\x80\x9cthe Government\'s independent\nevidence.\xe2\x80\x9d That review appears to have excluded the partial transcripts, and thus the Court of\nAppeals implicitly agreed with respondents that it was improper for the District Court to have\nconsidered even the partial transcripts. On the basis of its review of the \xe2\x80\x9cindependent evidence,\xe2\x80\x9d\nthe Court of Appeals affirmed the District Court\'s determination that the IRS had failed to\nestablish the applicability of the crime-fraud exception.\nII\nThis Court is evenly divided with respect to the issue of the power of a district court to place\nrestrictions upon the dissemination by the IRS of information obtained through a \xc2\xa7 7604\nsubpoena-enforcement action. We therefore affirm the judgment of the Court of Appeals insofar\nas it upheld the District Court\xe2\x80\x99s conditional-enforcement order.\nIII\nQuestions of privilege that arise in the course of the adjudication of federal rights are \xe2\x80\x9cgoverned\nby the principles of the common law as they may be interpreted by the courts of the United\nStates in the light of reason and experience.\xe2\x80\x9d We have recognized the attorney-client privilege\nunder federal law, as \xe2\x80\x9cthe oldest of the privileges for confidential communications known to the\ncommon law.\xe2\x80\x9d Although the underlying rationale for the privilege has changed over time, courts\nlong have viewed its central concern as one \xe2\x80\x9cto encourage full and frank communication\nbetween attorneys and their clients and thereby promote broader public interests in the\nobservance of law and administration of justice.\xe2\x80\x9d That purpose, of course, requires that clients\nbe free to \xe2\x80\x9cmake full disclosure to their attorneys\xe2\x80\x9d of past wrongdoings, in order that the client\nmay obtain \xe2\x80\x9cthe aid of persons having knowledge of the law and skilled in its practice.\xe2\x80\x9d\nThe attorney-client privilege is not without its costs. \xe2\x80\x9cSince the privilege has the effect of\nwithholding relevant information from the factfinder, it applies only where necessary to achieve\nits purpose.\xe2\x80\x9d The attorney-client privilege must necessarily protect the confidences of\nwrongdoers, but the reason for that protection \xe2\x80\x94 the centrality of open client and attorney\ncommunication to the proper functioning of our adversary system of justice \xe2\x80\x94 \xe2\x80\x9cceases to\noperate at a certain point, namely, where the desired advice refers not to prior wrongdoing, but\nto future wrongdoing.\xe2\x80\x9d It is the purpose of the crime-fraud exception to the attorney-client\nprivilege to assure that the \xe2\x80\x9cseal of secrecy,\xe2\x80\x9d between lawyer and client does not extend to\ncommunications \xe2\x80\x9cmade for the purpose of getting advice for the commission of a fraud\xe2\x80\x9d or\ncrime.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c519\n\nThe District Court and the Court of Appeals found that the tapes at issue in this case recorded\nattorney-client communications and that the privilege had not been waived when the tapes were\ninadvertently given to Armstrong. These findings are not at issue here. Thus, the remaining\nobstacle to respondents\xe2\x80\x99 successful assertion of the privilege is the Government\xe2\x80\x99s contention\nthat the recorded attorney-client communications were made in furtherance of a future crime or\nfraud.\nA variety of questions may arise when a party raises the crime-fraud exception. The parties to\nthis case have not been in complete agreement as to which of these questions are presented\nhere. In an effort to clarify the matter, we observe, first, that we need not decide the quantum of\nproof necessary ultimately to establish the applicability of the crime-fraud exception. Rather, we\nare concerned here with the type of evidence that may be used to make that ultimate showing.\nWithin that general area of inquiry, the initial question in this case is whether a district court, at\nthe request of the party opposing the privilege, may review the allegedly privileged\ncommunications in camera to determine whether the crime-fraud exception applies. If such in\ncamera review is permitted, the second question we must consider is whether some threshold\nevidentiary showing is needed before the district court may undertake the requested review.\nFinally, if a threshold showing is required, we must consider the type of evidence the opposing\nparty may use to meet it: i.e., in this case, whether the partial transcripts the IRS possessed\nmay be used for that purpose.\nA\nWe consider first the question whether a district court may ever honor the request of the party\nopposing the privilege to conduct an in camera review of allegedly privileged communications to\ndetermine whether those communications fall within the crime-fraud exception. We conclude\nthat no express provision of the Federal Rules of Evidence bars such use of in camera review,\nand that it would be unwise to prohibit it in all instances as a matter of federal common law.\n(1)\nAt first blush, two provisions of the Federal Rules of Evidence would appear to be relevant. Rule\n104(a) provides: \xe2\x80\x9cPreliminary questions concerning the qualification of a person to be a witness,\nthe existence of a privilege, or the admissibility of evidence shall be determined by the court. In\nmaking its determination it is not bound by the rules of evidence except those with respect to\nprivileges.\xe2\x80\x9d Rule 1101(c) provides: \xe2\x80\x9cThe rule with respect to privileges applies at all stages of all\nactions, cases, and proceedings.\xe2\x80\x9d Taken together, these Rules might be read to establish that in\na summons-enforcement proceeding, attorney-client communications cannot be considered by\nthe district court in making its crime-fraud ruling: to do otherwise, under this view, would be to\nmake the crime-fraud determination without due regard to the existence of the privilege.\nEven those scholars who support this reading of Rule 104(a) acknowledge that it leads to an\nabsurd result.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c520\n\nBecause the judge must honor claims of privilege made during his preliminary fact\ndeterminations, many exceptions to the rules of privilege will become \xe2\x80\x9cdead letters,\xe2\x80\x9d\nsince the preliminary facts that give rise to these exceptions can never be proved. For\nexample, an exception to the attorney-client privilege provides that there is no privilege if\nthe communication was made to enable anyone to commit a crime or fraud. There is\nvirtually no way in which the exception can ever be proved, save by compelling\ndisclosure of the contents of the communication; Rule 104(a) provides that this cannot\nbe done.\nWe find this Draconian interpretation of Rule 104(a) inconsistent with the Rule\xe2\x80\x99s plain language.\nThe Rule does not provide by its terms that all materials as to which a \xe2\x80\x9cclaim of privilege\xe2\x80\x9d is\nmade must be excluded from consideration. In that critical respect, the language of Rule 104(a)\nis markedly different from the comparable California evidence rule, which provides that \xe2\x80\x9cthe\npresiding officer may not require disclosure of information claimed to be privileged under this\ndivision in order to rule on the claim of privilege.\xe2\x80\x9d There is no reason to read Rule 104(a) as if its\ntext were identical to that of the California rule.\nNor does it make sense to us to assume, as respondents have throughout this litigation, that\nonce the attorney-client nature of the contested communications is established, those\ncommunications must be treated as presumptively privileged for evidentiary purposes until the\nprivilege is \xe2\x80\x9cdefeated\xe2\x80\x9d or \xe2\x80\x9cstripped away\xe2\x80\x9d by proof that the communications took place in the\ncourse of planning future crime or fraud. Although some language in Clark might be read as\nsupporting this view, respondents acknowledged at oral argument that no prior holding of this\nCourt requires the imposition of a strict progression of proof in crime-fraud cases.\nWe see no basis for holding that the tapes in this case must be deemed privileged under Rule\n104(a) while the question of crime or fraud remains open. Indeed, respondents concede that \xe2\x80\x9cif\nthe proponent of the privilege is able to sustain its burden only by submitting the\ncommunications to the court\xe2\x80\x9d for in camera review, the court is not required to avert its eyes (or\nclose its ears) once it concludes that the communication would be privileged, if the court found\nthe crime-fraud exception inapplicable. Rather, respondents acknowledge that the court may\n\xe2\x80\x9cthen consider the same communications to determine if the opponent of the privilege has\nestablished that the crime-fraud exception applies.\xe2\x80\x9d Were the tapes truly deemed privileged\nunder Rule 104(a) at the moment the trial court concludes they contain potentially privileged\nattorney-client communications, district courts would be required to draw precisely the\ncounterintuitive distinction that respondents wisely reject. We thus shall not adopt a reading of\nRule 104(a) that would treat the contested communications as \xe2\x80\x9cprivileged\xe2\x80\x9d for purposes of the\nRule, and we shall not interpret Rule 104(a) as categorically prohibiting the party opposing the\nprivilege on crime-fraud grounds from relying on the results of an in camera review of the\ncommunications.\n(2)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c521\nHaving determined that Rule 104(a) does not prohibit the in camera review sought by the IRS,\nwe must address the question as a matter of the federal common law of privileges. We conclude\nthat a complete prohibition against opponents\xe2\x80\x99 use of in camera review to establish the\napplicability of the crime-fraud exception is inconsistent with the policies underlying the\nprivilege.\nWe begin our analysis by recognizing that disclosure of allegedly privileged materials to the\ndistrict court for purposes of determining the merits of a claim of privilege does not have the\nlegal effect of terminating the privilege. Indeed, this Court has approved the practice of requiring\nparties who seek to avoid disclosure of documents to make the documents available for in\ncamera inspection, and the practice is well established in the federal courts. Respondents do\nnot dispute this point: they acknowledge that they would have been free to request in camera\nreview to establish the fact that the tapes involved attorney-client communications, had they\nbeen unable to muster independent evidence to serve that purpose.\nOnce it is clear that in camera review does not destroy the privileged nature of the contested\ncommunications, the question of the propriety of that review turns on whether the policies\nunderlying the privilege and its exceptions are better fostered by permitting such review or by\nprohibiting it. In our view, the costs of imposing an absolute bar to consideration of the\ncommunications in camera for purpose of establishing the crime-fraud exception are intolerably\nhigh.\n\xe2\x80\x9cNo matter how light the burden of proof which confronts the party claiming the exception, there\nare many blatant abuses of privilege which cannot be substantiated by extrinsic evidence. This\nis particularly true of situations in which an alleged illegal proposal is made in the context of a\nrelationship which has an apparent legitimate end.\xe2\x80\x9d A per se rule that the communications in\nquestion may never be considered creates, we feel, too great an impediment to the proper\nfunctioning of the adversary process. This view is consistent with current trends in the law.\nB\nWe turn to the question whether in camera review at the behest of the party asserting the crimefraud exception is always permissible, or, in contrast, whether the party seeking in camera\nreview must make some threshold showing that such review is appropriate. In addressing this\nquestion, we attend to the detrimental effect, if any, of in camera review on the policies\nunderlying the privilege and on the orderly administration of justice in our courts. We conclude\nthat some such showing must be made.\nOur endorsement of the practice of testing proponents\xe2\x80\x99 privilege claims through in camera\nreview of the allegedly privileged documents has not been without reservation. This Court noted\nthat \xe2\x80\x9cexamination of the evidence, even by the judge alone, in chambers\xe2\x80\x9d might in some cases\n\xe2\x80\x9cjeopardize the security which the privilege is meant to protect.\xe2\x80\x9d Analogizing to claims of Fifth\nAmendment privilege, it observed more generally: \xe2\x80\x9cToo much judicial inquiry into the claim of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c522\nprivilege would force disclosure of the thing the privilege was meant to protect, while a complete\nabandonment of judicial control would lead to intolerable abuses.\xe2\x80\x9d\nThe Court recognized that some compromise must be reached. In Reynolds, it declined to \xe2\x80\x9cgo\nso far as to say that the court may automatically require a complete disclosure to the judge\nbefore the claim of privilege will be accepted in any case.\xe2\x80\x9d We think that much the same result is\nin order here.\nA blanket rule allowing in camera review as a tool for determining the applicability of the crimefraud exception, as Reynolds suggests, would place the policy of protecting open and legitimate\ndisclosure between attorneys and clients at undue risk. There is also reason to be concerned\nabout the possible due process implications of routine use of in camera proceedings. Finally, we\ncannot ignore the burdens in camera review places upon the district courts, which may well be\nrequired to evaluate large evidentiary records without open adversarial guidance by the parties.\nThere is no reason to permit opponents of the privilege to engage in groundless fishing\nexpeditions, with the district courts as their unwitting (and perhaps unwilling) agents. Courts of\nAppeals have suggested that in camera review is available to evaluate claims of crime or fraud\nonly \xe2\x80\x9cwhen justified\xe2\x80\x9d or \xe2\x80\x9cin appropriate cases.\xe2\x80\x9d Indeed, the Government conceded at oral\nargument (albeit reluctantly) that a district court would be mistaken if it reviewed documents in\ncamera solely because \xe2\x80\x9cthe government begged it\xe2\x80\x9d to do so, \xe2\x80\x9cwith no reason to suspect crime or\nfraud.\xe2\x80\x9d We agree.\nIn fashioning a standard for determining when in camera review is appropriate, we begin with\nthe observation that \xe2\x80\x9cin camera inspection is a smaller intrusion upon the confidentiality of the\nattorney-client relationship than is public disclosure.\xe2\x80\x9d We therefore conclude that a lesser\nevidentiary showing is needed to trigger in camera review than is required ultimately to\novercome the privilege. Ibid. The threshold we set, in other words, need not be a stringent one.\nWe think that the following standard strikes the correct balance. Before engaging in in camera\nreview to determine the applicability of the crime-fraud exception, \xe2\x80\x9cthe judge should require a\nshowing of a factual basis adequate to support a good faith belief by a reasonable person\xe2\x80\x9d that\nin camera review of the materials may reveal evidence to establish the claim that the crimefraud exception applies.\nOnce that showing is made, the decision whether to engage in in camera review rests in the\nsound discretion of the district court. The court should make that decision in light of the facts\nand circumstances of the particular case, including, among other things, the volume of materials\nthe district court has been asked to review, the relative importance to the case of the alleged\nprivileged information, and the likelihood that the evidence produced through in camera review,\ntogether with other available evidence then before the court, will establish that the crime-fraud\nexception does apply. The district court is also free to defer its in camera review if it concludes\nthat additional evidence in support of the crime-fraud exception may be available that is not\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c523\nallegedly privileged, and that production of the additional evidence will not unduly disrupt or\ndelay the proceedings.\nC\nThe question remains as to what kind of evidence a district court may consider in determining\nwhether it has the discretion to undertake an in camera review of an allegedly privileged\ncommunication at the behest of the party opposing the privilege. Here, the issue is whether the\npartial transcripts may be used by the IRS in support of its request for in camera review of the\ntapes.\nThe answer to that question, in the first instance, must be found in Rule 104(a), which\nestablishes that materials that have been determined to be privileged may not be considered in\nmaking the preliminary determination of the existence of a privilege. Neither the District Court\nnor the Court of Appeals made factual findings as to the privileged nature of the partial\ntranscripts, so we cannot determine on this record whether Rule 104(a) would bar their\nconsideration.\nAssuming for the moment, however, that no rule of privilege bars the IRS\xe2\x80\x99s use of the partial\ntranscripts, we fail to see what purpose would be served by excluding the transcripts from the\nDistrict Court\xe2\x80\x99s consideration. There can be little doubt that partial transcripts, or other evidence\ndirectly but incompletely reflecting the content of the contested communications, generally will\nbe strong evidence of the subject matter of the communications themselves. Permitting district\ncourts to consider this type of evidence would aid them substantially in rapidly and reliably\ndetermining whether in camera review is appropriate.\nRespondents suggest only one serious countervailing consideration. In their view, a rule that\nwould allow an opponent of the privilege to rely on such material would encourage litigants to\nelicit confidential information from disaffected employees or others who have access to the\ninformation. We think that deterring the aggressive pursuit of relevant information from thirdparty sources is not sufficiently central to the policies of the attorney-client privilege to require us\nto adopt the exclusionary rule urged by respondents. We conclude that the party opposing the\nprivilege may use any nonprivileged evidence in support of its request for in camera review,\neven if its evidence is not \xe2\x80\x9cindependent\xe2\x80\x9d of the contested communications as the Court of\nAppeals uses that term.87\nD\n\n87\n\nIn addition, we conclude that evidence that is not \xe2\x80\x9cindependent\xe2\x80\x9d of the contents of allegedly privileged\ncommunications \xe2\x80\x94 like the partial transcripts in this case \xe2\x80\x94 may be used not only in the pursuit of in\ncamera review, but also may provide the evidentiary basis for the ultimate showing that the crime-fraud\nexception applies. We see little to distinguish these two uses: in both circumstances, if the evidence has\nnot itself been determined to be privileged, its exclusion does not serve the policies which underlie the\nattorney-client privilege.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c524\nIn sum, we conclude that a rigid independent evidence requirement does not comport with\n\xe2\x80\x9creason and experience,\xe2\x80\x9d and we decline to adopt it as part of the developing federal common\nlaw of evidentiary privileges. We hold that in camera review may be used to determine whether\nallegedly privileged attorney-client communications fall within the crime-fraud exception. We\nfurther hold, however, that before a district court may engage in in camera review at the request\nof the party opposing the privilege, that party must present evidence sufficient to support a\nreasonable belief that in camera review may yield evidence that establishes the exception\xe2\x80\x99s\napplicability. Finally, we hold that the threshold showing to obtain in camera review may be met\nby using any relevant evidence, lawfully obtained, that has not been adjudicated to be\nprivileged.\nBecause the Court of Appeals employed a rigid independent-evidence requirement which\ncategorically excluded the partial transcripts and the tapes themselves from consideration, we\nvacate its judgment on this issue and remand the case for further proceedings consistent with\nthis opinion. On remand, the Court of Appeals should consider whether the District Court\'s\nrefusal to listen to the tapes in toto was justified by the manner in which the IRS presented and\npreserved its request for in camera review. In the event the Court of Appeals holds that the\nIRS\xe2\x80\x99s demand for review was properly preserved, the Court of Appeals should then determine,\nor remand the case to the District Court to determine in the first instance, whether the IRS has\npresented a sufficient evidentiary basis for in camera review, and whether, if so, it is appropriate\nfor the District Court, in its discretion, to grant such review.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c525\n\nL. Ron Hubbard with audiotape recorders\nBlumenthal v. Kimber Mfg., 265 Conn. 1 (2003)\nSummary: The Attorney General of Connecticut opened an antitrust investigation and\nsent Kimber a subpoena. While Kimber produced some documents, it refused to\nproduce one email. Exceptions to the attorney-client privilege should be made only when\nthe reason for disclosure outweighs the potential chilling of essential communications.\nThe burden of proof is on the party seeking to pierce the privilege.\nThe crime fraud exception applies only after a determination by the trial court \xe2\x80\x9cthat there\nis probable cause to believe that a crime or fraud has been attempted or committed and\nthat the communication was in furtherance thereof.\xe2\x80\x9d Probable cause requires that a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c526\nprudent person have a reasonable basis to suspect the perpetration or attempted\nperpetration of a crime or fraud and that the communication was in furtherance thereof.\n\nKatz, J.\nThe petitioner, Richard Blumenthal, the attorney general of the state of Connecticut, appeals\nfrom the decision of the trial court denying his application for an order requiring the respondents,\nKimber Manufacturing, Inc., a firearms manufacturer with its principal place of business in\nYonkers, New York, and Leslie Edelman, Kimber\xe2\x80\x99s president, to comply with the petitioner\xe2\x80\x99s\ndiscovery request for a certain document sent from one Kimber employee to an attorney and\nthree other Kimber employees. The petitioner contends that the trial court improperly\ndetermined that: (1) the communication was protected by the attorney-client privilege; and (2)\nthe communication was not otherwise subject to disclosure under the crime-fraud exception to\nthat privilege. We conclude that the trial court properly determined that the document was\nprotected by the attorney-client privilege and that the petitioner did not meet his burden of\nestablishing that the crime-fraud exception applies to exclude the document from protection\nunder the privilege. Accordingly, we affirm the decision of the trial court.\nThe record discloses the following relevant facts. On March 17, 2000, Smith and Wesson\nCorporation (Smith & Wesson), a firearms manufacturer located in Springfield, Massachusetts,\nentered into an agreement with representatives of various federal, state and local governmental\nagencies (agreement). The agreement was an attempt to settle both pending and threatened\nlitigation by these governmental agencies against various firearms manufacturers. The\nagreement required Smith & Wesson, as well as all other potential signatories to the agreement,\nto engage in certain practices, opposed by most of the firearms industry, regarding the\nmanufacturing, sale and marketing of firearms. At the time of the proceeding before the trial\ncourt, Smith & Wesson was the only firearms manufacturer to have signed the agreement.\nOn May 2, 2000, based on his suspicion of the respondents\' participation in a retaliatory\neconomic boycott against Smith & Wesson, the petitioner issued to the respondents\ninterrogatories and a subpoena duces tecum, pursuant to the petitioner\'s investigatory authority\nunder General Statutes \xc2\xa7 35-42, seeking documents \xe2\x80\x9cas to any matter relevant to any alleged\nviolation of the Connecticut Antitrust Act\xe2\x80\x9d; and specifically any documents related to Smith &\nWesson. On May 31, 2000, the respondents submitted responses, and thereafter submitted\nsupplemental responses on July 20 and December 28, 2000. Unsatisfied with the respondents\'\ndisclosure, on March 20, 2001, the petitioner filed with the trial court an application for\ncompliance. Thereafter, the respondents submitted five additional supplemental responses,\nleading to a total disclosure of approximately 577 pages of documents. After negotiation\nbetween the parties as to outstanding documents sought, the hearing on the petitioner\'s\napplication for compliance was reduced to one issue \xe2\x80\x94 a claim of attorney-client privilege on a\ndocument sent via electronic mail (e-mail) by Dwight Van Brunt, a Kimber employee, to\nEdelman, Denis Schusterman, another Kimber employee, and Jerry S. Goldman, an attorney in\nprivate practice.[3] The e-mail also was copied to Ryan Busse, another Kimber employee. The e-\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c527\nmail expressly referred to the Smith & Wesson agreement, and the firearms industry\'s initial\nreaction to it.\nIn response to a joint motion for entry of consent order, the trial court directed the respondents\nto submit the e-mail to the court for an in camera determination of the privilege issue. The\nparties submitted to the court a joint stipulation of facts, setting forth the factual and procedural\nbackground of the matter. At a hearing on the consent order, following a joint request, the trial\ncourt sealed the record.\nGoldman, one of the parties to whom the e-mail had been sent, appeared as counsel on behalf\nof the respondents. Goldman represented to the court that, because the agreement arose out of\na series of lawsuits that all named John Doe as a defendant in the complaints, potential firearms\nmanufacturer defendants, like Kimber, needed to evaluate the agreement and the firearms\nindustry\'s reaction to the agreement in order to plan an effective legal strategy of their own.\nGoldman also provided the court with the corporate titles of each of the e-mail recipients, which\nidentified them as senior Kimber officers. Goldman contended that, because the reactions of\nothers in the firearms industry to the agreement \xe2\x80\x94 such as whether to sign similar agreements\nor litigate \xe2\x80\x94 would inform Kimber\'s legal decision making, Kimber\'s management needed to\nkeep track of these developments and communicate them to him, as Kimber\'s counsel.\nThe petitioner contended that the e-mail was not subject to the attorney-client privilege because\nit was not marked as confidential and did not request legal advice; rather, according to the\npetitioner, the subject matter of the e-mail concerned ongoing business developments. The\npetitioner also contended that the respondents had presented no evidence that litigation had\nbeen filed or even threatened against Kimber, nor any evidence of the existence of \xe2\x80\x9cJohn Doe\xe2\x80\x9d\ndefendants in such litigation. The petitioner further claimed that, because reference to the e-mail\nitself did not indicate that it satisfied the requirements of the attorney-client privilege, and\nbecause the respondents did not produce any evidence beyond the e-mail and the stipulated\nfacts, the respondents had failed to satisfy their burden of proof to invoke the privilege.\nFurthermore, the petitioner argued that, even if the trial court were to infer that the e-mail had\nbeen a request for legal advice, and therefore privileged, it would be subject to disclosure under\nthe crime-fraud exception to the privilege.\nOn September 10, 2001, the same day as the consent order hearing, the trial court issued an\norder stating that the e-mail was subject to a valid claim of attorney-client privilege. On January\n30, 2002, in response to the petitioner\'s motion for articulation, the trial court issued a\nmemorandum of decision setting forth the reasons for its decision. Specifically, the trial court set\nforth and applied the four part test that we articulated in Shew v. Freedom of Information\nCommission, for determining whether the attorney-client privilege applies to protect\ncommunications between corporate employees and attorneys retained by the corporation. The\ncourt determined that, under the test, the e-mail qualified for protection from disclosure.\nAdditionally, the court concluded that the crime-fraud exception did not apply because the email \xe2\x80\x9cis a patent update of firearms litigation developments and does not advocate any criminal\nor illegal activity.\xe2\x80\x9d This appeal followed.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c528\n\nI\nWe turn to the petitioner\xe2\x80\x99s claim that, even if we were to assume that the privilege generally\napplied, the trial court improperly determined that the e-mail was not subject to disclosure under\nthe crime-fraud exception to the attorney-client privilege. Specifically, the petitioner contends\nthat other documents submitted as exhibits to the trial court provide probable cause to believe\nthat the respondents engaged in an unlawful boycott of Smith & Wesson and that the e-mail\nwas in direct furtherance of the boycott. We conclude that the trial court properly concluded that\nthe e-mail did not fall under the crime-fraud exception.\nAs an initial matter, we note that \xe2\x80\x9cexceptions to the attorney-client privilege should be made only\nwhen the reason for disclosure outweighs the potential chilling of essential communications.\xe2\x80\x9d\nThe crime-fraud exception to the attorney-client privilege, therefore, is a limited one, and the\nburden of proof is on the party seeking to pierce the privilege. We also recognize, however, \xe2\x80\x9cthat\nsince the attorney-client privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose.\xe2\x80\x9d In Olson v. Accessory Controls &\nEquipment Corp., we set forth the proper inquiry for determining when the crime-fraud exception\nextinguishes the attorney-client privilege. The exception applies only after a determination by\nthe trial court \xe2\x80\x9cthat there is probable cause to believe that a crime or fraud has been attempted\nor committed and that the communication was in furtherance thereof.\xe2\x80\x9d\nProbable cause \xe2\x80\x9crequires that a prudent person have a reasonable basis to suspect the\nperpetration or attempted perpetration of a crime or fraud, and that the communication was in\nfurtherance thereof.\xe2\x80\x9d \xe2\x80\x9cThe appropriate inquiry under the probable cause standard targets the\nclient\xe2\x80\x99s intent in obtaining legal advice; only if there is probable cause to believe that the client\nintended to perpetrate a crime or fraud does the exception properly come to bear.\xe2\x80\x9d We have\nexplained that, \xe2\x80\x9cwithout reference to intent, the attorney-client privilege would be pierced\nwhenever probable cause could be made that an illegal act occurred after the client conferred\nwith an attorney \xe2\x80\x94 even if the consultation was part of a good-faith attempt to follow the law.\nGood-faith consultations with attorneys by clients who are uncertain about the legal implications\nof a proposed course of action however are entitled to the protection of the privilege, even if that\naction should later be held improper.\xe2\x80\x9d\nWe note that, in the present case, the trial court did not determine specifically whether the\npetitioner had met this probable cause requirement. Even if we were to assume, however, that\nthere was probable cause to believe that the respondents had committed or intended to commit\na crime by engaging in an economic boycott in violation of antitrust law, we nevertheless\nconclude that the petitioner failed to meet his burden of proof.\nIn addition to probable cause, the crime-fraud exception is limited by a second requirement that\nthe communication sought in discovery was made in furtherance of that unlawful act. \xe2\x80\x9cThe\ncrime-fraud exception does not apply simply because privileged communications would provide\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c529\nan adversary with evidence of a crime or fraud. Mere relevance is insufficient; there must be a\nshowing that the communications at issue were made with an intent to further an unlawful act.\xe2\x80\x9d\nOur analysis as to the \xe2\x80\x9cin furtherance\xe2\x80\x9d requirement is informed largely by our reasoning in part I\nof this opinion. As we previously stated, the trial court reasonably could have found that the email concerned matters involving the agreement by a major firearms manufacturer seeking to\navoid litigation, and how that agreement, along with the litigation that gave rise to it, similarly\nmight affect the respondents. Moreover, the e-mail reveals nothing that suggests an intent to\nbreak the law. Indeed, we agree with the trial court\'s determination that the critical statements at\nissue are \xe2\x80\x9cnot words of advocacy, but, rather, statements of fact or impression.\xe2\x80\x9d Furthermore, to\nthe extent that the e-mail refers to any action, it is the actions of others, and not of the\nrespondents; it neither advocates that Kimber take any action of its own, nor that others take a\nparticular action. The evidence does not support a conclusion that the respondents sent the email with the intent to further a fraud or crime. Rather, as the trial court reasonably concluded, it\nwas intended to keep Goldman informed so that he could provide them with sound legal advice.\nAccordingly, the injury that would inure to the relationship of Kimber and its attorneys by\ndisclosure of the e-mail is greater than the benefit that would be gained by its disclosure to the\npetitioner.\nTherefore, we conclude that the trial court properly concluded that the e-mail is not subject to\ndisclosure under the crime-fraud exception to the attorney-client privilege.\n\nAttorney Misconduct & the Work Product Doctrine\nMoody v. Internal Revenue Service, 654 F. 2d 795 (D.C. Cir. 1981)\nWALD, Circuit Judge:\nThis action is an appeal from a judgment of the district court upholding the Internal Revenue\nService\xe2\x80\x99s refusal to disclose documents pertinent to appellant\xe2\x80\x99s Freedom of Information Act\nrequests. Appellant Shearn Moody, Jr. filed three requests pursuant to the FOIA, asking for the\nrelease of all records in the IRS\xe2\x80\x99s possession regarding Moody, several business and charitable\nentities in which he had interests, and \xe2\x80\x9cProject Southwest.\xe2\x80\x9d The IRS released many documents\npertinent to these requests, but withheld approximately 150 documents or portions of\ndocuments. After an in camera examination of a sample of thirty-five of the challenged\nwithholdings, the district court upheld the IRS\xe2\x80\x99s claims of exemptions with respect to all except\nportions of four documents.\nThe appellant promptly challenged every aspect of the trial court\xe2\x80\x99s decision, seeking before this\ncourt both reversal of the findings of applicability of FOIA exemptions to particular documents\nand a remand on the issues of segregability and the propriety of an award of attorney\xe2\x80\x99s fees.\nThe bulk of appellant\xe2\x80\x99s arguments on appeal were explicitly, and we feel correctly, dealt with in\nthe district court\'s admirably comprehensive nineteen page opinion. However, we find two\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c530\nissues deserve additional consideration, and remand the case to the district court for this\npurpose.\nDOCUMENT 19 AND THE WORK PRODUCT EXEMPTION\nExemption 5 of the FOIA permits non-disclosure of:\nInter-agency or intra-agency memorandums or letters which would not be available by\nlaw to a party other than an agency in litigation with the agency.\nAmong the civil litigation privileges incorporated into the FOIA by this section is the attorney\nwork product privilege.\nThe work product privilege, \xe2\x80\x9cdistinct from and broader than the attorney-client privilege,\xe2\x80\x9d\nexempts from discovery documents prepared by an attorney in contemplation of litigation.\nDocument 19, which the trial court held non-disclosable as attorney work product, seems to fall\nwithin this class. It details a meeting held between an IRS lawyer and the federal district judge\npresiding over the receivership of W. L. Moody & Sons, Banker, regarding the enforcement of a\nsummons served on E. O. Buck, the bank\xe2\x80\x99s receiver. Prepared as a memorandum to the file by\nthe participating IRS attorney, Document 19 predates by two days the filing of a petition to\nenforce the summons.\nAppellant contends, however, that the work product doctrine does not cover Document 19\nbecause it is the fruit of impermissible legal conduct. According to appellant, the purposeful\nexclusion of opposing counsel from the meeting violated the court\xe2\x80\x99s rules and the American Bar\nAssociation\'s ethical standards. Moody argues that it would be a perversion of the work product\ndoctrine, designed \xe2\x80\x9cto encourage effective legal representation within the framework of the\nadversary system,\xe2\x80\x9d to allow it to be used to \xe2\x80\x9ccover up\xe2\x80\x9d activities destructive of that system.\nWe agree that, at least in some circumstances, a lawyer\xe2\x80\x99s unprofessional behavior may vitiate\nthe work product privilege. We therefore remand this case to the district court so that it may\ndetermine in the first instance whether such circumstances exist in this case, and more\nfundamentally, whether the actions of the IRS attorney in fact violated professional standards.\nThe work product privilege creates a zone of privacy within which a lawyer can prepare his case\nfree of adversarial scrutiny. From its inception, however, the courts have stressed that the\nprivilege is \xe2\x80\x9cnot to protect any interest of the attorney, who is no more entitled to privacy or\nprotection than any other person, but to protect the adversary trial process itself.\xe2\x80\x9d Some\nprotection of lawyers\xe2\x80\x99 \xe2\x80\x9cheretofore inviolate\xe2\x80\x9d thoughts was deemed necessary to avoid an\nincentive to develop \xe2\x80\x9cunfair and sharp practices for the giving of legal advice and in the\npreparation of cases for trial,\xe2\x80\x9d as the development of such practices would \xe2\x80\x9cpoorly serve the\ninterests of the clients and the cause of justice.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c531\nIt would indeed be perverse, as appellant contends, to allow a lawyer to claim an evidentiary\nprivilege to prevent disclosure of work product generated by those very activities the privilege\nwas meant to prevent. Non-disclosure would then88 provide an incentive for, rather than against,\nthe disfavored practices. The integrity of the adversary process is not furthered by protecting a\nlawyer who steps outside his role as \xe2\x80\x9can officer of the court working for the advancement of\njustice while faithfully protecting the rightful interests of his clients.\xe2\x80\x9d An attorney should not be\nable to exploit the privilege for ends outside of and antithetical to the adversary system any\nmore than a client who attempts to use the privilege to advance criminal or fraudulent ends.\nHowever, the conclusion that an attorney has no right to object to the disclosure of work product\nmade possible by his misconduct does not necessarily mean that the work product privilege is\ninapplicable to such documents. Unlike the attorney-client privilege, which exists solely for the\nbenefit of the client, and can be asserted and waived exclusively by him, the work product\nprivilege creates a legally protectable interest in non-disclosure in two parties: lawyer and client.\nJust as \xe2\x80\x9can invasion of the attorney\xe2\x80\x99s necessary privacy may not be justified by the misfortune of\nrepresenting a fraudulent client,\xe2\x80\x9d the client\'s interest in preventing disclosures about his case\nmay survive the misfortune of his representation by an unscrupulous attorney. A court must look\nto all the circumstances of the case, including the availability of alternate disciplinary\nprocedures,89 to decide whether the policy favoring disclosure outweighs the client\'s legitimate\ninterest90 in secrecy. No court should order disclosure under the FOIA or in discovery if the\ndisclosure would traumatize the adversary process more than the underlying legal misbehavior.\nWe have attempted to outline in our footnotes to this opinion some of the factors we would take\ninto consideration when balancing the policy favoring disclosure against that favoring continued\nsecrecy. However, each case obviously presents new permutations and combinations of fact\npatterns, all of which must be taken into account when reaching a decision. For this reason, the\ntrial court, which is both familiar with the case and in a position to gather any evidence deemed\nnecessary to a reasoned decision, is best equipped to weigh the balance.\n\n88\n\nWe stress that in this case, appellee has admitted engaging in the conduct which forms the basis of the\ncharge of unprofessional conduct. We are therefore not dealing with a situation where disclosure is\nsought for the purpose of determining whether such misbehavior has in fact occurred. The latter case\ninvolves an entirely different problem \xe2\x80\x94 an exception which threatens to swallow the rule \xe2\x80\x94 than is\npresented in this case.\n89\nLawyers, of course, are always subject to disciplinary proceedings, if not criminal or civil malpractice\nsanctions, for malfeasance in the conduct of their legal affairs. Thus, disclosure is not the sole available\nremedy for a breach of a professional duty, and may in fact bear so little relationship to the underlying\nbreach as to be inappropriate as a remedy. In this case, of course, if a violation of legal standards\noccurred, it lay in the attorney\'s exclusion of the opposing party and his counsel from a meeting;\ndisclosure of what went on at that meeting to that opponent, the appellant in this FOIA action, would\ntherefore seem an appropriate remedy.\n90\nA client\'s interest in non-disclosure would be illegitimate, of course, if he knowingly instigated or\nparticipated in the conduct which constituted the breach of duty. In some cases, the extent to which a\nclient should be allowed to benefit from unprofessionally obtained information may also be questioned;\nsuch benefits, in some cases, may not be deemed a \xe2\x80\x9clegitimate\xe2\x80\x9d secrecy interest.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c532\nWe therefore remand this case for reconsideration of the withholdings from Document 19 in light\nof our Neufeld decision, for an evaluation of the attorney\xe2\x80\x99s conduct and, if it is found in violation\nof professional standards, a determination of whether his breach of professional standards\nvitiated the work product privilege otherwise attributable to Document 19. If the documents\nreleased as a result of the proceedings on remand are sufficient for a court to conclude\nappellant substantially prevailed in his FOIA action, he will then become eligible for an award of\nattorney\xe2\x80\x99s fees.\nHaigh v. Matsushita Elec. Corp. of America, 676 F. Supp. 1332 (E.D. Va. 1987)\nSPENCER, District Judge.\nPlaintiff Richard Haigh, a Virginia citizen, was employed by defendant Matsushita Electric\nCorporation of America from October 17, 1974 through January 27, 1987. He is fifty-seven\nyears old, and is Jewish. Plaintiff Norma Haigh, a Virginia citizen, is Haigh\xe2\x80\x99s wife.\nDefendant Panasonic is a Delaware corporation.\nThe Second Amended Complaint, which is currently before the Court, is sixty-eight pages long,\nand contains a plethora of allegations. In brief, Haigh states that he was a salesman for\nPanasonic who handled the accounts of Best Products and Circuit City. Haigh claims that during\nhis tenure business with these two outfits skyrocketed. In December 1986, Haigh was told that\nthe Best Products and Circuit City accounts were being taken away from him and given to\ndefendant Weber. Haigh also claims he was told his salary would be cut, along with his\nearnable bonuses. Additionally, he was told that he would be reassigned from his Richmond,\nVirginia location to the Panasonic accounts in western Virginia. Haigh claims he argued that the\nreassignment was unlawful, and requested to be told the legitimate business reason for the\naction. In response, defendants Willner and Adamyk allegedly proposed that the Richmond\naccounts of Thalhimers, Miller & Rhoads, Robert\xe2\x80\x99s Leasing, and Dominion Pottery be added to\nHaigh\xe2\x80\x99s new territory. Haigh also asserts that these two defendants sought a complete release\nfor all of Panasonic\xe2\x80\x99s actions to date.\nIn due course, by letter dated January 27, 1987, Haigh stated that his reassignment was\nunacceptable, and claimed that Panasonic had constructively terminated his employment. Since\nthat time, Haigh claims to have vigorously sought employment without success.\nDefendants move for an order compelling discovery of certain tape recordings, and awarding\nexpenses in connection thereto. The facts underlying the motion are as follows. Defendants\nmade the usual request for production of documents in August 1987. Subsequently, during\nHaigh\xe2\x80\x99s deposition on October 21, 1987, he admitted that he had taped conversations with fiftyeight individuals. The tapes were made without the knowledge of these individuals, at Haigh\xe2\x80\x99s\nown initiative, and absent directives from Haigh\xe2\x80\x99s attorneys. Upon learning of their existence,\ndefendants asked for the tapes. Plaintiffs turned over three tapes, which contained\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c533\nconversations with named defendants. Plaintiffs also surrendered a list of the names of the\nindividuals who were on the recordings.\nDefendants now seek the production of all the recordings. Plaintiffs argue that the tapes come\nwithin the work product privilege in that they were prepared in anticipation of litigation.\nSpecifically, plaintiffs state that Haigh consulted legal counsel in December 1986, evidently\nfearing that defendants were trying to push him out of the company. Haigh considered himself\nconstructively terminated in late January 1987. On March 12, 1987, he filed an EEOC\ncomplaint. He states that between February 1987 and October 1987, he made the tape\nrecordings. He delivered the cassette tapes to counsel for the plaintiffs within a day or two\nfollowing each conversation, and the contents of such tapes were reviewed by counsel and\nused by counsel to prepare the Complaint and discovery requests.\nThis matter came before the Court on defendants\xe2\x80\x99 November 2, 1987 motion. The motion was\nbriefed by the parties, and oral argument was held on November 13, 1987, at which time the\nCourt directed counsel to submit additional memoranda addressed to the question whether the\nwork product privilege had been vitiated. The parties have filed their memoranda, and the\nmotion is now ripe for decision. Although several issues are raised by the parties, only two need\nto be addressed by this Court.\nIssue I \xe2\x80\x94 Are the tapes protected by the work product privilege?\nIssue II \xe2\x80\x94 If the answer to the question in Issue I is yes, is the privilege vitiated in this case?\nIssue I\nFederal Rule of Civil Procedure 26(b)(3) addresses the work product privilege. Basically, in\norder for the privilege to be applicable, the material must be (1) documents or tangible things,\n(2) prepared in anticipation of litigation or for trial, and (3) prepared by or for another party or by\nor for that other party\'s representative. Additionally, the question whether the material was\nprepared in anticipation of litigation does not turn on whether a suit had already been filed.\nIn arguing that the work product privilege does not apply here, defendants make the following\nstatement: \xe2\x80\x9cThe tapes were made by a party to this action and apparently do not contain the\nthoughts and impressions of plaintiff\'s counsel, who was not involved in the conversations, and,\ntherefore, cannot be considered attorneys\' work product under the most liberal interpretation of\nthat doctrine.\xe2\x80\x9d\nDefendants are living in the past, and are presenting a pre-1970 argument. \xe2\x80\x9cThe 1970\namendment to Fed. R. Civ. P. 26 extends the work product protection to documents and things\nprepared for litigation or trial by or for the adverse party himself or his agent. Prior to the\namendment some cases have held that documents of this kind were not within the immunity.\xe2\x80\x9d\nMoreover, in an identical situation, the United States District Court for the Southern District of\nNew York held that a party\'s surreptitiously obtained tape recordings are protected under Fed.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c534\nR. Civ. P. 26(b)(3), assuming that the statements were obtained and recorded in anticipation of\nlitigation or in preparation for trial.\nBased upon the facts and arguments as now appearing before the Court, the Court is of the\nopinion that the work product privilege would apply to the tape recordings, and production would\nbe denied unless the Court became convinced that defendants had a substantial need for the\nrecordings and were unable to obtain their equivalent without undue hardship.\nIssue II\nThe Court need not delve into questions of \xe2\x80\x9csubstantial need,\xe2\x80\x9d \xe2\x80\x9cundue hardship,\xe2\x80\x9d or \xe2\x80\x9csubstantial\nequivalent.\xe2\x80\x9d The Court holds that the work product privilege has, in this case, been vitiated.\nIn recent years, courts have come to recognize that \xe2\x80\x9cin some circumstances, a lawyer\xe2\x80\x99s\nunprofessional behavior may vitiate the work product privilege.\xe2\x80\x9d\nThe Moody opinion was discussed by the Eleventh Circuit in Parrott v. Wilson. There, plaintiff\xe2\x80\x99s\nattorney had clandestinely taped telephone conversations with two witnesses. Defendants\nmoved to compel production of the recordings, and plaintiff objected on the ground that the\ntapes were work product under Fed. R. Civ. P. 26(b)(3). It is helpful to quote in length from that\nopinion.\nThe Moody court reasoned that the purpose of the work product privilege is to protect\nthe integrity of the adversary process; therefore, it would be improper to allow an\nattorney to exploit the privilege for ends that are antithetical to that process. In the\ninstant case, the record clearly demonstrates that counsel for the appellant clandestinely\nrecorded conversations with witnesses. While this practice violates no law, the Code of\nProfessional Conduct imposes a higher standard than mere legality. The American Bar\nAssociation\xe2\x80\x99s Committee on Ethics and Professional Responsibility has ruled that the\nrecording of conversations of witnesses without their consent is unethical.\nWe are mindful of the client\'s interest in protecting against the disclosure of work\nproduct. However, we are unable to say that the disclosure in this case \xe2\x80\x9ctraumatized the\nadversary process more than the underlying legal misbehavior.\xe2\x80\x9d The only discernible\neffect of the disclosure was that the depositions of Sharp and Godfrey commenced with\nthe playing of the taped conversations. We thus hold that whatever work product\nprivilege might have existed was vitiated by counsel\'s clandestine recording of\nconversations with witnesses.\nCarrying the question a step further, one court has recognized the potential difficulties of the\nsituation in which an attorney directs his client to engage in behavior that would be improper for\nthe attorney. It is apparent to this Court that such a course of action on the part of an attorney\nwould clearly be improper.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c535\nIn the instant situation, counsel for plaintiffs did not direct Haigh to undertake the clandestine\nrecordings. As represented to this Court, he clearly initiated such conduct on his own, and he, of\ncourse, is not bound by the ethical strictures which bind his counsel.\nThis does not end the question, however. The Court is troubled by language contained in\nplaintiff\'s memorandum in response to the motion to compel.\nHaigh began a concerted effort to interview persons throughout the United States who\nmay have relevant information relating to his legal claims. Between February 1987 and\nOctober 1987, Haigh has telephoned approximately fifty-eight such persons and, in most\ninstances, tape recorded the conversations. The cassette tapes were delivered to\ncounsel for the plaintiffs within a day or two following each such conversation and the\ncontents of such tapes reviewed by counsel. In many instances, the information obtained\nduring such telephone conversations was used by plaintiffs\xe2\x80\x99 counsel to prepare the initial\ncomplaint, the first amended and restated complaint, and the second amended and\nrestated complaint filed in this action. Counsel also used such information to prepare\nother discovery requests.\nWhile counsel did not tell Haigh to initiate or continue taping conversations, the old adage\n\xe2\x80\x9cactions speak louder than words\xe2\x80\x9d comes to mind. Indeed, Haigh and his attorneys fell into a\npattern of conduct whereby Haigh would tape conversations and almost immediately turn the\ntapes over to counsel for their use. This pattern of conduct continued over a period of\napproximately nine months, and included the taping of fifty-eight conversations.\nThe Court would not be so troubled if it were faced with the situation where a party, in his\nexuberance over pending litigation, pursued such a course of conduct and delivered a handful\nof tapes to his counsel. In that situation, the lawyer\xe2\x80\x99s conduct could fairly be described as simple\nacquiescence in the situation created by the client\xe2\x80\x99s exuberance. There is a point, however,\nwhere acquiescence ceases to be passive and noncommittal, and becomes active\nencouragement and affirmative support. There is, and can be, no bright line to determine when\nthis point is reached. Instead, the circumstances of each case must be viewed in their totality in\nan attempt to get a fix on that point. Here, the Court is certain that that point has been crossed.\nAs such, the Court holds that the work product privilege has been vitiated.\nThe ruling today should not be taken as an indictment of counsel\xe2\x80\x99s ethics or professionalism. To\nbe sure, the law on this point is in an infant, perhaps even fetal, state. The Court in no way\nassumes or believes that counsel\'s intent was to run afoul of ethical strictures.\nAdditionally, it should be noted that this ruling may be interpreted by some as punishment for\nHaigh\xe2\x80\x99s retention of counsel. Indeed, if Haigh were proceeding pro se, the privilege would not be\nvitiated. However, an attorney\xe2\x80\x99s clients may not reap the benefits of the attorney\xe2\x80\x99s expertise in a\nvacuum-like state. Rather, the client must realize that the attorney is bound by a Code of\nProfessional Responsibility, and, when he retains the attorney, he also retains the\nresponsibilities imposed on that attorney.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c536\n\nQuestions:\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nG. Michael Halfenger, The Attorney Misconduct Exception to the Work Product Doctrine,\n58 U. Chi. L. Rev. 1079 (1991)\nDavid J. Fried, Too High a Price for Truth: The Exception to the Attorney-Client Privilege\nfor Contemplated Crimes and Frauds, 64 N.C. L. Rev. 443 (1986)\nMichele DeStefano Beardslee, Taking the Business Out of Work Product, 79 Fordham L.\nRev. 1869 (2011)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c537\nSection 6: Advocacy & Conduct\n6.1: Frivolous Pleadings\nMeaningless, who dare to say it wasn\xe2\x80\x99t meaningless? Shout from the rooftops and address the\npress. Ha ha ha it was totally meaningless.91\nWhile courts have always prohibited \xe2\x80\x9cfrivolous\xe2\x80\x9d litigation, they have also struggled to define it. In\ntheory, frivolous litigation consists of a pleading or motion that a competent attorney would know\nhas no legitimate basis in fact or law. But of course, it is often hard to know whether a legal\nclaim is legitimate or has a chance of success. Sometimes, courts change their minds, and\nsometimes, juries are unpredictable. Frivolity is often in the eye of the beholder.\nThe Supreme Court has revised the procedural rules governing frivolous litigation many times,\nand adopted different approaches to identifying and dissuading frivolous litigation at different\npoints in time. The notes of the Advisory Committee on the Federal Rules of Civil Procedure\nseem to reflect both frustration with frivolous litigation and uncertainty how to prevent it. For\nexample, the 1983 notes observe, \xe2\x80\x9cExperience shows that in practice Rule 11 has not been\neffective in deterring abuses.\xe2\x80\x9d They accompanied revisions that encouraged the imposition of\nsanctions. And the 1993 notes observe, \xe2\x80\x9cExperience shows that in practice Rule 11 has not\nbeen effective in deterring abuses.\xe2\x80\x9d They accompanied revisions that discouraged the\nimposition of sanctions.\nUnder the current version of Rule 11, a party may file a motion for sanctions only after serving\nthe draft motion on opposing counsel and giving them time to respond. While courts may\nimpose sanctions under Rule 11 sua sponte, the Rule implicitly discourages sanctions and\nencourages dispute resolution.\nFederal Rule of Civil Procedure 11: Signing Pleadings, Motions, and Other Papers;\nRepresentations to the Court; Sanctions\na. Signature. Every pleading, written motion, and other paper must be signed by at least\none attorney of record in the attorney\xe2\x80\x99s name\xe2\x80\x94or by a party personally if the party is\nunrepresented. The paper must state the signer\'s address, e-mail address, and\ntelephone number. Unless a rule or statute specifically states otherwise, a pleading need\nnot be verified or accompanied by an affidavit. The court must strike an unsigned paper\nunless the omission is promptly corrected after being called to the attorney\'s or party\'s\nattention.\nb. Representations to the Court. By presenting to the court a pleading, written motion, or\nother paper\xe2\x80\x94whether by signing, filing, submitting, or later advocating it\xe2\x80\x94an attorney or\nunrepresented party certifies that to the best of the person\xe2\x80\x99s knowledge, information, and\nbelief, formed after an inquiry reasonable under the circumstances:\n91\n\nThe Magnetic Fields, Meaningless, 69 Love Songs (1999).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c538\n1. it is not being presented for any improper purpose, such as to harass, cause\nunnecessary delay, or needlessly increase the cost of litigation;\n2. the claims, defenses, and other legal contentions are warranted by existing law\nor by a nonfrivolous argument for extending, modifying, or reversing existing law\nor for establishing new law;\n3. the factual contentions have evidentiary support or, if specifically so identified,\nwill likely have evidentiary support after a reasonable opportunity for further\ninvestigation or discovery; and\n4. the denials of factual contentions are warranted on the evidence or, if specifically\nso identified, are reasonably based on belief or a lack of information.\nc. Sanctions.\n1. In General. If, after notice and a reasonable opportunity to respond, the court\ndetermines that Rule 11(b) has been violated, the court may impose an\nappropriate sanction on any attorney, law firm, or party that violated the rule or is\nresponsible for the violation. Absent exceptional circumstances, a law firm must\nbe held jointly responsible for a violation committed by its partner, associate, or\nemployee.\n2. Motion for Sanctions. A motion for sanctions must be made separately from any\nother motion and must describe the specific conduct that allegedly violates Rule\n11(b). The motion must be served under Rule 5, but it must not be filed or be\npresented to the court if the challenged paper, claim, defense, contention, or\ndenial is withdrawn or appropriately corrected within 21 days after service or\nwithin another time the court sets. If warranted, the court may award to the\nprevailing party the reasonable expenses, including attorney\'s fees, incurred for\nthe motion.\n3. On the Court\'s Initiative. On its own, the court may order an attorney, law firm, or\nparty to show cause why conduct specifically described in the order has not\nviolated Rule 11(b).\n4. Nature of a Sanction. A sanction imposed under this rule must be limited to what\nsuffices to deter repetition of the conduct or comparable conduct by others\nsimilarly situated. The sanction may include nonmonetary directives; an order to\npay a penalty into court; or, if imposed on motion and warranted for effective\ndeterrence, an order directing payment to the movant of part or all of the\nreasonable attorney\'s fees and other expenses directly resulting from the\nviolation.\n5. Limitations on Monetary Sanctions. The court must not impose a monetary\nsanction:\nA. against a represented party for violating Rule 11(b)(2); or\nB. on its own, unless it issued the show-cause order under Rule 11(c)(3)\nbefore voluntary dismissal or settlement of the claims made by or against\nthe party that is, or whose attorneys are, to be sanctioned.\n6. Requirements for an Order. An order imposing a sanction must describe the\nsanctioned conduct and explain the basis for the sanction.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c539\nd. Inapplicability to Discovery. This rule does not apply to disclosures and discovery\nrequests, responses, objections, and motions under Rules 26 through 37.\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nGeorgene Vairo, Rule 11 and the Profession, 67 Fordham L. Rev. 589 (1998)\nJulia K. Cowles, Rule 11 of the Federal Rules of Civil Procedure and the Duty to\nWithdraw a Baseless Pleading, 56 Fordham L. Rev. 697 (1988)\nSuja A. Thomas, Frivolous Cases, 59 DePaul L. Rev. 633 (2010)\nCharles Yablon, Hindsight, Regret, and Safe Harbors in Rule 11 Litigation, 37 Loy. L.A.\nL. Rev. 599 (2004)\nRobert G. Bone, Modeling Frivolous Suits, 145 U. Pa. L. Rev. 519 (1997)\n\nSimpson v. Welch, 900 F. 2d 33 (4th Cir. 1990)\nSummary: Simpson filed an employment discrimination action against the Chesapeake\nHealth Department, but failed to respond to subsequent motions or to appear at the\nhearing, so the district court dismissed the complaint and granted the defendant\xe2\x80\x99s motion\nfor fees and costs under Rule 11. The circuit court reversed, because Rule 11 only\ncovers frivolous pleadings, not the failure to respond to motions or pleadings.\nPER CURIAM:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c540\n\nThe questions presented are whether the district court properly dismissed plaintiff\xe2\x80\x99s complaint\nand whether the court properly awarded sanctions pursuant to Rule 11 of the Federal Rules of\nCivil Procedure. We hold that the dismissal was proper, but that Rule 11 does not provide\nauthority for the sanctions imposed in this case.\nI\nAppellant is a black employee at the Chesapeake Health Department in Chesapeake, Virginia.\nAfter receiving \xe2\x80\x9cRight to Sue\xe2\x80\x9d letters from the Equal Employment Opportunity Commission, she\nfiled this employment discrimination suit on February 16, 1989. The individual appellees, the\npresent and former directors of the Department, filed a motion to dismiss on March 13, 1989.\nThe City of Chesapeake filed a motion for summary judgment on March 20, 1989.\nAn initial pretrial conference was held on April 3, 1989, at which all counsel were present. At the\nconference, an April 17, 1989 deadline was established for appellant to file responses to the\nmotions to dismiss and for summary judgment, and a hearing on these motions was scheduled\nfor May 2, 1989. Appellant failed to oppose these motions, and appellees moved for judgment\non the pleadings. After appellant\'s counsel also failed to appear at the May 2, 1989 hearing, the\ndistrict court granted appellees\' motions and dismissed the complaint.\nThe court concluded that the Department and its employees were agents of the state, not the\nCity. Therefore, the court granted the City\xe2\x80\x99s motion for summary judgment and held that the\nEleventh Amendment barred appellant\'s claims for damages and other relief. The Court also\nheld that all of appellant\'s claims should be dismissed under Rule 12(b)(6) for failure to state a\nclaim upon which relief can be granted. Appellant\xe2\x80\x99s \xe2\x80\x9cvague and conclusory\xe2\x80\x9d allegations were\ninsufficient to satisfy the notice pleading requirements of the Federal Rules of Civil Procedure.\nIn the alternative, the court held that \xe2\x80\x9cplaintiff\xe2\x80\x99s continued failure to follow the rules and orders of\nthis Court or even to appear in Court as required justifies dismissal under Rule 41(b).\xe2\x80\x9d\nAppellees moved for an award of attorneys\xe2\x80\x99 fees and costs, and appellant moved under Rule\n60(b) for relief from the order of dismissal. The district court denied the Rule 60(b) motion,\nfinding no excuse for appellant\xe2\x80\x99s counsel\xe2\x80\x99s neglect in failing to respond to appellees\xe2\x80\x99 motions to\ndismiss and for summary judgment. The court extended the deadline for appellant to oppose\nappellees\xe2\x80\x99 motion for attorneys\xe2\x80\x99 fees and costs, but appellant again failed to file any opposition.\nThus, on July 13, 1989, the district court granted appellees\xe2\x80\x99 motion for attorneys\xe2\x80\x99 fees and costs.\nII\nThe allegations in appellant\xe2\x80\x99s complaint are insufficient to state a claim upon which relief can be\ngranted. Appellant alleges that she was \xe2\x80\x9crequired to work in places and under conditions where\nprejudice and bias exist,\xe2\x80\x9d but her complaint nowhere alleges any specific oppressive conditions\nor expressions of \xe2\x80\x9cprejudice and bias.\xe2\x80\x9d She alleges that she was \xe2\x80\x9cdenied opportunities to be\npromoted,\xe2\x80\x9d but never indicates the positions for which she applied. She asserts that she was\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c541\n\xe2\x80\x9ctreated poorly on the job and harassed,\xe2\x80\x9d but described no specific incidents of improper\ntreatment or of harassment. As the district court stated:\nThe Complaint contains no factual allegations whatsoever to support these charges. The\nplaintiff has set forth no specific incidents of discrimination, no details of promotions to\nwhich she was entitled but which she did not receive, no explanation of the forms that\nany alleged harassment took, no specifics regarding her claims of disparate treatment of\nblacks and whites. The Complaint alleges religious discrimination but fails even to state\nwhat plaintiff\xe2\x80\x99s religious affiliation is, let alone how it has been the basis of any\ndiscriminatory acts. In short, the Complaint fails to allege sufficient facts to state a claim\nof racial or religious discrimination.\nAppellant\xe2\x80\x99s conclusory allegations of discrimination and harassment do not state a claim upon\nwhich relief can be granted. The district court properly dismissed appellant\'s complaint in its\nentirety.\nIn the alternative, the district court did not abuse its discretion when it dismissed appellant\xe2\x80\x99s\ncomplaint for failure to comply with court orders. Appellant failed to oppose appellees\xe2\x80\x99 motions\nto dismiss and for summary judgment, even after the district court extended the time to respond,\nand appellant\xe2\x80\x99s counsel failed to appear at the May 2, 1989 hearing. The district court acted\nwithin its discretion when it dismissed the complaint under Rule 41(b).\nIII\nAlthough appellees moved for attorneys\xe2\x80\x99 fees and costs under Rules 11 and 54(d) of the\nFederal Rules of Civil Procedure and under 42 U.S.C. \xc2\xa7 1988, the district court\xe2\x80\x99s order awarding\nfees and costs mentions only Rule 11. Rule 11 states:\nEvery pleading, motion, and other paper of a party represented by an attorney shall be\nsigned by at least one attorney of record in the attorney\'s individual name. The signature\nof an attorney or party constitutes a certificate by the signer that the signer has read the\npleading, motion, or other paper; that to the best of the signer\'s knowledge, information,\nand belief formed after reasonable inquiry, it is well grounded in fact and is warranted by\nexisting law or a good faith argument for the extension, modification, or reversal of\nexisting law, and that it is not interposed for any improper purpose, such as to harass or\nto cause unnecessary delay or needless increase in the cost of litigation. If a pleading,\nmotion, or other paper is signed in violation of this rule, the court, upon motion or upon\nits own initiative, shall impose upon the person who signed it, a represented party, or\nboth, an appropriate sanction, which may include an order to pay to the other party or\nparties the amount of the reasonable expenses incurred because of the filing of the\npleading, motion, or other paper, including a reasonable attorney\'s fee.\nThe rule imposes \xe2\x80\x9ca duty to conduct a pre-filing examination of both the facts and the law before\ninstituting legal process.\xe2\x80\x9d The rule does not purport to be a means for district courts to sanction\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c542\nconduct in the course of a lawsuit, such as failure to comply with court orders, that does not\ninvolve the signing of pleadings, motions, or other papers.\nThe district court faulted appellant for filing a suit in which the \xe2\x80\x9cweight of existing law\xe2\x80\x9d favored\nappellees, but the court admitted that there was a legal basis for appellant\xe2\x80\x99s Title VII claims. The\ncourt justified its sanction under Rule 11 by noting that appellant had failed to oppose the\nmotions to dismiss and for summary judgment and that the complaint set forth only vague and\nconclusory allegations. But this does not establish that there was not a factual and legal basis\nfor appellant\xe2\x80\x99s claim under Title VII. It merely establishes that appellant\xe2\x80\x99s counsel failed to\ncomply with court orders and filed an inartfully pled complaint. Even a vague and conclusory\ncomplaint may be \xe2\x80\x9cwell grounded in fact and warranted by existing law or a good faith argument\nfor the extension, modification, or reversal of existing law.\xe2\x80\x9d Indeed, if Rule 11 permitted\nsanctions merely on the basis of inartful pleading, rather than for a failure to investigate the legal\nand factual basis for that pleading, Rule 12(e) motions for a more definite statement would be\nvirtually unheard of. The fact that appellant\'s complaint was vague and conclusory does not\njustify sanctions under Rule 11.\nThe district court also awarded attorneys\xe2\x80\x99 fees and costs because of appellant\xe2\x80\x99s counsel\xe2\x80\x99s\n\xe2\x80\x9cblatant disregard\xe2\x80\x9d for the local rules of the district court and for \xe2\x80\x9chis lackadaisical attitude in\nfailing to respond to defendants\xe2\x80\x99 Motion for Award of Attorneys\xe2\x80\x99 Fees.\xe2\x80\x9d Because the order\nawarding fees and costs does not indicate any other source of authority, we must presume that\nthe district court awarded fees on this ground pursuant to Rule 11. Again, Rule 11 is\ninapplicable. Rule 16(f) specifically provides for sanctions \xe2\x80\x9cif a party or party\xe2\x80\x99s attorney fails to\nobey a scheduling or pretrial order, or if no appearance is made on behalf of a party at a\nscheduling or pretrial conference.\xe2\x80\x9d In contrast, Rule 11, by its own terms, can never be the basis\nfor sanctions for failure to file certain papers. Thus, although appellant\xe2\x80\x99s counsel\xe2\x80\x99s conduct in\nthe course of this lawsuit fully justified sanctions, Rule 11 is an inappropriate vehicle for the\nimposition of such sanctions. Because appellees\xe2\x80\x99 motion for attorneys\xe2\x80\x99 fees and costs rested on\na number of grounds and because the district court appeared to rely only on Rule 11, the award\nof fees and costs must be vacated and the issue remanded to the district court for consideration\nof alternative bases for such an award.\nIV\nThe district court properly dismissed appellant\'s complaint for failure to state a claim upon which\nrelief could be granted and for failure to comply with court orders. Although the district court had\nample grounds under Rule 16(f) for imposing sanctions on appellant\'s counsel, Rule 11 does\nnot provide authority for sanctions in this case.\nQuestions:\n1. Should the circuit court have read Rule 11 this narrowly?\n2. If sanctions were permitted on a basis other than Rule 11, why didn\xe2\x80\x99t the circuit court\naffirm on alternative grounds?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c543\n3. Should plaintiff\xe2\x80\x99s failure to respond be sanctionable? What about defendant\xe2\x80\x99s failure to\nrespond?\nIn re Sargent, 136 F. 3d 349 (4th Cir. 1998)\nSummary: Cox filed a complaint alleging that Saunders and others violated his\nconstitutional rights by subjecting him to harmful prison conditions. The district court\ndismissed all but one of Cox\xe2\x80\x99s claims, and informed him that the Prison Litigation Reform\nAct precluded prisoners who filed three frivolous complaints from filing any additional\ncomplaints, unless they were in danger of imminent harm. Assistant Attorney General\nSargent filed a motion for summary judgment, arguing that Cox\xe2\x80\x99s complaint was\nfrivolous. The district court dismissed and then reinstated Cox\xe2\x80\x99s complaint, at his\nrequest. The district court also imposed Rule 11 sanctions on Sargent for\nmisrepresenting the PLRA and enjoined application of the PLRA to Cox. The circuit court\nreversed, holding that Sargent\xe2\x80\x99s motion for summary judgment did not violate Rule 11\nand that precluding application of the PLRA to Cox was not an appropriate remedy for\nthe alleged misconduct.\nWILKINS, Circuit Judge:\nPamela A. Sargent, an Assistant Attorney General for the Commonwealth of Virginia, appeals a\nsanction imposed pursuant to Federal Rule of Civil Procedure 11 enjoining application of the\nPrison Litigation Reform Act to inmate Richard Cox in any civil action in the United States\nDistrict Court for the Western District of Virginia. We reverse.\nI.\nCox, a Virginia prisoner, filed an action against Warden Lonnie Saunders and other prison\nofficials, alleging that they had violated his constitutional rights by, inter alia, intentionally\nsubjecting him to harmful prison conditions. The prison officials filed a motion to dismiss Cox\xe2\x80\x99s\naction, which was granted except as to one claim. Soon afterward, the district court issued a\nnotice informing Cox of the passage and practical effects of the PLRA. The court correctly\nexplained that under the PLRA\nA prisoner may not bring a civil action without prepayment of the appropriate filing fee if\nthe prisoner has, on three or more prior occasions, brought an action or appeal in a\nfederal court that was dismissed as frivolous, as malicious, or for failure to state a claim\nupon which relief may be granted, unless the prisoner is under imminent danger of\nserious physical injury.\nShortly thereafter, Sargent filed a motion for summary judgment on behalf of the prison officials.\nIn the penultimate paragraph of the accompanying memorandum, she asserted:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c544\nCox has already had two cases dismissed for being frivolous or for failure to state a\nclaim. Pursuant to the newly enacted Prison Litigation Reform Act, Cox will forfeit the\nright to file future cases if a third case is found to be frivolous, malicious or fails to state a\nclaim upon which relief can be granted. The prison officials submit that this is that third\ncase and that an Order should be entered dismissing the case with prejudice, awarding\nthem costs and attorney\'s fees, and barring Cox from future filings.\nApproximately one week later, Cox requested that his action be dismissed without prejudice,\nand the district court granted the dismissal. Thereafter, however, the district court granted Cox\xe2\x80\x99s\nmotion to reinstate the action. In ruling on that motion, the district court found that Sargent\xe2\x80\x99s\ncontentions were \xe2\x80\x9ca blatant misrepresentation of the content of that provision and its application\nto this case\xe2\x80\x9d because a portion of Cox\xe2\x80\x99s complaint had already survived a motion to dismiss.\nThe district court also noted that Sargent had misstated the law regarding the filing of future\ncases because \xc2\xa7 1915(g) of the PLRA provides that an inmate who has three qualifying\ndismissed cases is not barred from all future filings but only from filing actions in forma pauperis\nwhen he does not face an imminent danger of serious physical injury. The district court directed\nSargent to show cause why the memorandum in support of the motion for summary judgment\ndid not violate Federal Rule of Civil Procedure 11(b). After receiving Sargent\xe2\x80\x99s response, the\ndistrict court determined that sanctions were warranted and enjoined application of \xc2\xa7 1915(g) to\nCox until further order of the court.\nII.\nSargent first argues that the sanction should be reversed because the district court abused its\ndiscretion in finding that the legal contentions contained in the memorandum in support of the\nmotion for summary judgment violated Rule 11. We agree.\nThe provisions of Rule 11 dictate that in presenting a motion to a court, an attorney represents\nthat the \xe2\x80\x9clegal contentions therein are warranted by existing law or by a nonfrivolous argument\nfor the extension, modification, or reversal of existing law or the establishment of new law.\xe2\x80\x9d An\nassertion of law violates Rule 11(b)(2) when, applying a standard of objective reasonableness, it\ncan be said that \xe2\x80\x9ca reasonable attorney in like circumstances could not have believed his\nactions to be legally justified.\xe2\x80\x9d A legal contention is unjustified when \xe2\x80\x9ca reasonable attorney\nwould recognize it as frivolous.\xe2\x80\x9d Put differently, a legal position violates Rule 11 if it \xe2\x80\x9chas\nabsolutely no chance of success under the existing precedent.\xe2\x80\x9d\nHere, the district court first took issue with Sargent\'s contention that the earlier dismissal of\nsome of the claims in Cox\xe2\x80\x99s present lawsuit should be considered his third strike for the purpose\nof \xc2\xa7 1915(g). However, ten of the eleven claims in Cox\'s complaint had been dismissed for\nfailure to state a claim upon which relief could be granted, and it was well within the bounds of\nfair adversarial argument for the Government to suggest that the remaining claim must also be\ndismissed as frivolous, causing the three-strike rule to apply. If the latter occurred, Cox\xe2\x80\x99s\nunderlying suit could indeed constitute the third strike against him. We cannot say that the\nposition had no chance of success under existing law.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c545\n\nThe district court next found fault with Sargent\xe2\x80\x99s representation that pursuant to \xc2\xa7 1915(g) a\nthird dismissal for frivolity, malice, or failure to state a claim would bar Cox from future filings.\nAssuredly, Sargent\xe2\x80\x99s legal contention was not a complete explanation of the consequences of a\nthird strike. But, the consequences of a third strike in all future cases were not put into issue by\nthe motion. And, Sargent explains that the statement was meant to convey only that Cox would\nbe barred from filing cases pursuant to \xc2\xa7 1915 \xe2\x80\x94 the statute at issue \xe2\x80\x94 which addresses only in\nforma pauperis filings. Thus, although Sargent\xe2\x80\x99s statement of the consequences of obtaining a\nthird strike perhaps was not completely thorough, it can plausibly be read as a mere shorthand\nreference to the statute and was not unwarranted under the circumstances. Accordingly, we find\nthe decision of the district court to sanction Sargent under Rule 11 constituted an abuse of\ndiscretion.\nIII.\nSargent also maintains that even if her conduct warranted sanctions, the district court abused its\ndiscretion in choosing the particular sanction imposed. \xe2\x80\x9cA sanction imposed for violation of Rule\n11 shall be limited to what is sufficient to deter repetition\xe2\x80\x9d of the objectionable conduct. This\ncourt has made \xe2\x80\x9cclear that the primary purpose of Rule 11 is to deter future litigation abuse.\xe2\x80\x9d\nOther objectives advanced by the imposition of a sanction are remediation of the harm caused\nby the Rule 11 violation, for example by compensating the victim for attorney\xe2\x80\x99s fees expended in\nresponding to the frivolous claim; punishment of the person or entity responsible for the\nviolation; and enhancement of judicial administration.\nWith these purposes in mind, we conclude that the district court abused its discretion in ruling\nthat the sanction imposed was limited to what was sufficient to deter Sargent\xe2\x80\x99s conduct. The\nfinding by the district court that Sargent violated Rule 11 by advancing an unsupported legal\nassertion essentially amounts to a public reprimand that, in and of itself, should be a significant\ndeterrent to future violations. And, there is no serious suggestion that further sanction was\nnecessary to curb future abuses by Sargent. Further, Cox was in no way prejudiced by\nSargent\xe2\x80\x99s legal assertion. Assuming that Cox moved to dismiss his action based upon Sargent\xe2\x80\x99s\nlegal representations, the district court permitted reinstatement of the action upon Cox\xe2\x80\x99s\nrequest. Thus, the imposition of any sanction was unnecessary for purposes of remediating\nharm caused by the Rule 11 violation. Moreover, assuming that Cox was prejudiced in some\nway by Sargent\xe2\x80\x99s statements, the sanction imposed by the district court failed to provide\nremediation because it had no potential to alleviate any type of harm that Cox could have\nsuffered in the present litigation. Indeed, we can envision no circumstances in which such a\nsanction would be appropriate to remediate harm to a victim of a Rule 11 violation. Finally, there\nis no suggestion that an injunction on application of \xc2\xa7 1915(g) to Cox was necessary to punish\nSargent or to enhance judicial administration. For that matter, it is difficult to say that the\nsanction adversely impacted Sargent in the least. And, we fail to appreciate how the suspension\nof a statute specifically designed to reduce the amount of frivolous prisoner litigation could be\nthought to enhance the administration of justice. Accordingly, we conclude that the district court\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c546\nabused its discretion in choosing a sanction to impose upon Sargent even if her conduct had\nviolated Rule 11.\nQuestions:\n1. When should an argument in a pleading be sanctionable under Rule 11?\n2. Should prosecutors and other government lawyers be held to a different standard than\nprivate attorneys or pro se litigants?\n3. What is the appropriate sanction for a Rule 11 violation?\nThe Duty of Reasonable Investigation\nCleveland Demolition Co., Inc. v. Azcon Scrap Corp., 827 F. 2d 984 (4th Cir. 1987)\nSummary: Paul Haddad represented himself as the President of Cleveland Demolition\nand sold scrap material to Azcon Scrap. But when Azcon tried to collect the scrap,\nCleveland refused to provide it, arguing that Haddad was not its President and that he\nwas not authorized to sell the scrap. Azcon filed a breach of contract action against\nCleveland. At trial, Azcon Vice-President Richard Spine testified that he had requested a\nverbal Dun & Bradstreet report on Cleveland that listed Haddad as President. A later,\nprinted report listed Haddad as President, and the district court granted summary\njudgment to Azcon. Cleveland filed a motion to vacate, arguing that Spine perjured\nhimself, because Dun & Bradstreet had no record of a verbal report. The district court\ndismissed the motion and imposed Rule 11 sanctions on Cleveland, finding that its\nclaims lacked a factual basis, and the circuit court affirmed.\nWILKINSON, Circuit Judge:\nCleveland Demolition seeks to set aside an earlier jury verdict for Azcon Scrap on the basis that\nAzcon\xe2\x80\x99s trial attorney conspired with a witness to present perjured testimony. The only evidence\nof this alleged conspiracy, however, is an evidentiary conflict between the witness\xe2\x80\x99s testimony\nand statements made by a different party in a subsequent lawsuit. This routine evidentiary\nconflict does not justify an action for fraud on the court or the serious allegations of attorney\nmisconduct leveled in this case. We therefore affirm the district court\xe2\x80\x99s decision to grant\nsummary judgment for Azcon and to impose Rule 11 sanctions on Cleveland and its attorneys.\nI.\nIn 1983, Cleveland Demolition demolished a power plant for an electric company in West\nVirginia, leaving Cleveland with several tons of scrap material. In June 1983, Paul Haddad, who\nrepresented himself as the president of Cleveland, contacted Richard Spine, a vice-president of\nAzcon Scrap, to inquire whether Azcon was interested in buying the scrap. After inspecting the\nsite and negotiating over terms, Spine and Haddad signed a contract on July 14th. When an\nAzcon crew arrived at the demolition site, however, it was prevented from removing the scrap by\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c547\nCleveland employees, who informed them that Haddad was not the president of Cleveland and\nhad no authority to sign the contract with Azcon. Azcon sued Cleveland for breach of contract.\nA crucial issue at trial was whether Haddad had apparent authority to sell the scrap for\nCleveland Demolition. Azcon presented a great deal of evidence to justify its belief that Haddad\nwas the president of Cleveland. For example, Cleveland employees at the scrap site had\ntreated Haddad as if he were the president and a representative of the electric company had\ntold Spine that Haddad was the president of Cleveland. Haddad also testified that Phillip\nSchwab, the owner of Cleveland, had asked him to act as president in dealing with the West\nVirginia electric company because a different Schwab company had defaulted on an earlier\ncontract with the same power company.\nDuring the trial, Spine testified that on July 5th, before signing the contract with Haddad, he\nrequested a verbal Dun & Bradstreet report on Cleveland Demolition from Azcon\xe2\x80\x99s Chicago\noffice. According to Spine, Azcon\xe2\x80\x99s Chicago office reported that Haddad was listed as the\npresident of Cleveland Demolition. After learning that Haddad was not the actual president,\nAzcon requested a print-out of the Dun & Bradstreet report. This report, dated August 2nd and\nintroduced at trial, indicated that Haddad was the president of Cleveland. Based on this\nevidence, the jury returned a $500,000 verdict for Azcon. This court affirmed in an unpublished\nopinion, concluding that \xe2\x80\x9csufficient evidence exists to support the jury\xe2\x80\x99s finding that Paul Haddad\nwas acting as an agent of Cleveland Demolition.\xe2\x80\x9d\nCleveland now claims that the earlier verdict should be vacated because Spine deliberately lied\nwhen he testified that he requested a Dun & Bradstreet report on July 5th. To support this\ncharge of perjury, Cleveland claims that Spine\xe2\x80\x99s pretrial deposition, in contrast to his specific\ntrial testimony, was ambiguous and did not clearly reveal that he requested a July report.\nMoreover, Cleveland notes that Dun & Bradstreet has no internal record of a request by Azcon\nfor information on July 5th. Cleveland concludes that Spine lied about the July request to help\nAzcon\'s case.\nCleveland does not stop at alleging perjury by Spine. It claims that Azcon\xe2\x80\x99s trial attorney,\nLawrence Demase, conspired with Spine to present this perjured testimony. In an attempt to\nprove Demase\xe2\x80\x99s involvement, Cleveland notes that he prepared two affidavits for Spine, but\nneither affidavit mentioned a July 5th request for a Dun & Bradstreet report. Nonetheless,\nDemase questioned Spine about the July 5th report at the trial and used this testimony in his\nopening and closing statements. Cleveland cites as further evidence of Demase\xe2\x80\x99s participation\nhis acknowledgement that he and Spine reviewed Spine\xe2\x80\x99s deposition statements and concluded\nthat they did not completely reflect what Spine had intended to say. Finally, Cleveland claims\nthat Demase should have known that Spine did not request a report on July 5th because Dun &\nBradstreet has no record of this request.\nIn sum, Cleveland believes that Spine must have perjured himself because his deposition is\nunclear and his trial testimony conflicts with Dun & Bradstreet\xe2\x80\x99s records. Cleveland concludes\nthat Demase must have actively participated in this perjury because he was Azcon\xe2\x80\x99s trial\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c548\nattorney. Relying on such conclusory allegations, Cleveland brought this independent action to\nset aside the earlier verdict, claiming that it was obtained by a fraud on the court. The district\ncourt granted Azcon\xe2\x80\x99s motion for summary judgment, finding that there was \xe2\x80\x9cno evidence here\nthat either Spine gave false testimony or that Demase participated.\xe2\x80\x9d The district court noted that\nCleveland had produced no \xe2\x80\x9csmoking gun\xe2\x80\x9d, nor even so much as a \xe2\x80\x9csinged paperclip.\xe2\x80\x9d Because\nCleveland\xe2\x80\x99s attorneys did not adequately investigate the factual or legal basis for this lawsuit,\nthe district court also assessed attorney fees and costs under Rule 11.\nII.\nA verdict may be set aside for fraud on the court if an attorney and a witness have conspired to\npresent perjured testimony. The only evidence that Spine committed perjury, however, is the\nconflict between his trial testimony and Dun & Bradstreet\xe2\x80\x99s version of the July 5th report; the\nonly evidence of Demase\xe2\x80\x99s involvement is that he was Azcon\xe2\x80\x99s trial attorney. This meager\nevidence falls woefully short of proving a fraud on the court. More importantly, if a losing party\ncould attack a verdict whenever two witnesses disagreed and an attorney was involved, no\nverdict would be final. The district court properly granted summary judgment for Azcon.\nDistrict courts may entertain an independent action in equity to set aside a judgment for fraud on\nthe court. Fraud on the court is a serious allegation, however, involving \xe2\x80\x9ccorruption of the judicial\nprocess itself.\xe2\x80\x9d A verdict will be vacated only in the \xe2\x80\x9cmost egregious cases in which the integrity\nof the court and its ability to function impartially is directly impinged.\xe2\x80\x9d Although perjury by a\nwitness will not suffice, the \xe2\x80\x9cinvolvement of an attorney, as an officer of the court, in a scheme to\nsuborn perjury should certainly be considered fraud on the court.\xe2\x80\x9d Thus, if Spine deliberately lied\nand Demase participated in the fraud, the earlier verdict for Azcon should be set aside.\nAccording to Cleveland, Spine must have committed perjury because his deposition is vague\nand Dun & Bradstreet has no record of a July 5th request. Cleveland, however, overestimates\nthe ambiguity of the deposition. Although not a model of clarity, Spine\xe2\x80\x99s deposition does state\nthat he requested a verbal Dun & Bradstreet report when the Azcon employees inspected the\ndemolition site, which was in late June or early July. The deposition also shows that Spine\nclaimed that Azcon\xe2\x80\x99s Chicago office reported that Haddad was listed as the president on the\nDun & Bradstreet report. The deposition is not inconsistent with Spine\xe2\x80\x99s subsequent testimony;\nthe trial testimony is simply more specific.\nThe lack of a Dun & Bradstreet record also fails to show that Spine committed perjury.\nCleveland did not learn that there was no record until it sued Dun & Bradstreet for negligently\ninforming Azcon that Haddad was the president. Thus, the statements by Dun & Bradstreet\nemployees that they have no internal record actually amount to nothing more than unverified,\nexculpatory claims by an interested party. This evidence does not show that Spine never\nrequested a report from the Chicago office or that Spine deliberately lied on the stand. It simply\nshows that Spine and Dun & Bradstreet disagree over whether Azcon made a request on July\n5th. Although Cleveland could certainly have used this evidence to impeach Spine during the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c549\ninitial trial, it cannot use this routine evidentiary conflict to support an action for fraud on the\ncourt.\nCleveland has produced even less evidence of Demase\xe2\x80\x99s involvement in this alleged\nconspiracy. Demase acted only as Azcon\xe2\x80\x99s trial attorney, performing such typical activities as\npreparing affidavits and questioning witnesses. Cleveland apparently argues for a virtually\nautomatic rule that, whenever a witness lies on the stand, his attorney must have known about\nand actively participated in the perjury. In addition to being unjustified, this rule would allow\nparties to circumvent the Rule 60(b)(3) one-year time limitation on motions to set aside a\njudgment for fraud or misrepresentation. Losing parties could transform a perjury case into an\naction for fraud on the court simply by alleging that an attorney was present.\nIn essence, Cleveland asks this court to vacate the earlier verdict because Spine\xe2\x80\x99s testimony\nconflicts with the Dun & Bradstreet statements and Demase participated in the trial. Not only\ndoes this argument fail to establish any evidence of a fraud on the court, but it seriously\nundermines the principle of finality. If a routine evidentiary dispute, which occurs in virtually all\ntrials, could justify an action for fraud on the court, then any losing party could bring an\nindependent action to set aside the verdict, forcing extended proceedings in almost every case.\nBecause Rule 60(b) imposes no time limit on these independent actions, they could be brought\nat any time. Thus, under Cleveland\xe2\x80\x99s version of the doctrine, no verdict would ever be final until\na second proceeding was held to determine if there was a fraud on the court.\nRather than unravel the finality of judgments through the abuse of Rule 60(b), we adhere to the\nwell-established rule that evidentiary conflicts must be resolved during the initial trial. Cleveland\nshould have been aware of the conflict between Spine\xe2\x80\x99s testimony and Dun & Bradstreet\xe2\x80\x99s\nrecords; Spine\xe2\x80\x99s deposition was specific enough to put Cleveland on notice. Having failed to\ndepose Dun & Bradstreet in time for the trial, Cleveland cannot avoid the verdict by leveling a\ncharge of fraud on the court. Because Cleveland has produced no evidence of a conspiracy\nbetween Spine and Demase, Azcon was entitled to summary judgment.\nIII.\nAfter granting summary judgment, the district court imposed Rule 11 sanctions on Cleveland\nand its attorneys for filing this action. A decision to impose sanctions will be reversed only for an\nabuse of discretion. Because Cleveland did not conduct a reasonable investigation of the factual\nand legal basis for this claim, we think the district court acted well within its discretion in\nimposing sanctions.\nWhen an attorney signs a complaint, he certifies that \xe2\x80\x9cto the best of his knowledge, information,\nand belief formed after reasonable inquiry, the complaint is well grounded in fact and is\nwarranted by existing law.\xe2\x80\x9d Under this rule, Cleveland\xe2\x80\x99s attorneys were required to investigate\nthe factual and legal basis for the claim before filing this lawsuit. The 1972 amendments\nunderscored this duty by eliminating the subjective \xe2\x80\x9cgood faith\xe2\x80\x9d harbor and requiring an attorney\nto conduct an objectively reasonable investigation. If an attorney signs a complaint without\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c550\nundertaking the necessary investigation, Rule 11 provides that the district court \xe2\x80\x9cshall\xe2\x80\x9d impose\nsanctions.\nThe district court found that Cleveland did not conduct a reasonable factual or legal\ninvestigation. We agree. Although Cleveland discovered a conflict between the Spine and Dun\n& Bradstreet versions, this discovery should have been only the beginning of the inquiry into\nwhether Spine committed perjury. Rather than continuing its investigation, however, Cleveland\nwas apparently satisfied with a few interviews with a Dun & Bradstreet employee.\nA complaint of this nature has a potentially devastating impact upon professional reputations.\nEven if Cleveland had found evidence of perjury, it had an obligation to investigate whether\nattorney Demase was involved. Cleveland\xe2\x80\x99s inquiry never produced any evidence that Demase\nparticipated in Spine\xe2\x80\x99s alleged perjury. As the district court noted, \xe2\x80\x9cthis part of Cleveland\xe2\x80\x99s case\nhas always been nothing more than speculative and conclusory.\xe2\x80\x9d Instead of conducting a\nreasonable factual investigation, Cleveland apparently chose to build its case on the\nunsupported assumption that Spine must have been lying and that Demase must have been\nparticipating. This speculative basis for a Rule 60(b) action alleging attorney misconduct of the\nmost serious nature does not satisfy Rule 11 standards.\nCleveland also failed to conduct a reasonable legal investigation to determine if the complaint\nwas \xe2\x80\x9cwarranted by existing law.\xe2\x80\x9d Cleveland limited its inquiry to a brief reading of Rule 60, a\nportion of American Jurisprudence, a Federal Procedure Guide, and Hazel-Atlas Glass Co. v.\nHartford-Empire Co. (1944). If Cleveland had conducted even a minimal investigation into\nFourth Circuit precedent, it would have discovered Great Coastal Express v. International\nBrotherhood of Teamsters. Although Great Coastal suggests that a conspiracy by a witness and\nan attorney to commit perjury will amount to a fraud on the court, the case specifically notes that\nother sanctions exist to punish perjury and that \xe2\x80\x9cperjury or fabricated evidence are not grounds\nfor relief as a fraud on the court.\xe2\x80\x9d Thus, even if Cleveland had evidence of perjury by Spine, it\nwas still required to show that Demase participated. Because Cleveland had absolutely no\nevidence of involvement by Demase, a quick reading of Great Coastal would have revealed that\nCleveland\xe2\x80\x99s complaint had \xe2\x80\x9cabsolutely no chance of success under the existing precedent.\xe2\x80\x9d\nIn sum, Rule 11 \xe2\x80\x9cexplicitly and unambiguously imposes an affirmative duty on each attorney to\nconduct a reasonable inquiry into the validity of a pleading before it is signed.\xe2\x80\x9d The Rule does\nnot seek to stifle the exuberant spirit of skilled advocacy or to require that a claim be proven\nbefore a complaint can be filed. The Rule attempts to discourage the needless filing of\ngroundless lawsuits. To fulfill his duty, an attorney must investigate the facts, examine the law,\nand then decide whether the complaint is justified. Cleveland failed to discharge this duty; it\nconducted only a minimal factual inquiry and a cursory legal investigation. The district court\nproperly imposed sanctions.\nIn determining the specific amount of the sanctions, the district court reduced Azcon\xe2\x80\x99s legal fees\nby 10%, finding that the case was slightly over-lawyered and did not require a trial. The hourly\nfees of several attorneys were lowered to reflect the prevailing local rate, while the fees of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c551\nattorneys from out of state were reduced by 10% because they failed to provide the district court\nwith sufficient information about their professional backgrounds. These adjustments are\nconsistent with the twelve factors listed in Barber v. Kimbrell\'s, Inc., and we therefore affirm the\namount of the award in this case.\nQuestions:\n1. What was the basis for Cleveland\xe2\x80\x99s claim that Spine perjured himself?\n2. What investigation should Cleveland have done before filing its motion to vacate?\n3. Is it possible that Spine did not request a verbal report from Dun & Bradstreet? Does it\nmatter?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c552\n\nWilliam Kunstler (1989)\n\nEddie Hatcher & Timothy Jacobs\nIn re Kunstler, 914 F. 2d 505 (4th Cir. 1990)\nSummary: Eddie Hatcher and Timothy Jacobs hijacked the offices of the Robeson,\nNorth Carolina newspaper The Robesonian and took its employees hostage. They\neventually surrendered, in exchange for a promise that the governor would investigate\ntheir claims of government corruption. The federal government prosecuted Hatcher and\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c553\nJacobs, but they were acquitted. Then, North Carolina prosecuted Hatcher and Jacobs.\nBarry Nakell, Lewis Pitts, and William Kunstler filed a \xc2\xa7 1983 against the Governor of\nNorth Carolina and other state officials, for improper prosecution. The district court\ndismissed the action and imposed Rule 11 sanctions on Nakell, Pitts, and Kunstler. The\ncircuit court affirmed, but remanded for reconsideration of the sanctions.\nCHAPMAN, Circuit Judge:\nThree attorneys appeal the award of Rule 11 sanctions against them in the amount of\n$122,834.28. Appellants were sanctioned following the dismissal of a 42 U.S.C. \xc2\xa7 1983 action,\nin which they represented certain plaintiffs seeking monetary damages and injunctive relief from\nthe Governor of North Carolina, a number of North Carolina district attorneys, a sheriff, certain\nState Bureau of Investigation officers, the State Attorney General and others for an allegedly\nimproper state criminal prosecution and harassment. We affirm in part, vacate in part, and\nremand with instructions.\nI\nThe appellant attorneys are Barry Nakell, a professor at the University of North Carolina School\nof Law; Lewis Pitts, Director of the Christic Institute South, a public interest law firm in Carrboro,\nNorth Carolina; and William Kunstler, a nationally known civil rights attorney. The \xc2\xa7 1983 action\nwas connected with the appellants\xe2\x80\x99 earlier representation of two American Indians, Eddie\nHatcher and Timothy Jacobs, in a federal criminal case.\nOn February 1, 1988, Hatcher and Jacobs staged an armed takeover of The Robesonian, a\nlocal newspaper in Robeson County, North Carolina. Hatcher and Jacobs held twenty hostages\nand charged the State District Attorney and the Sheriff\xe2\x80\x99s Office with corruption and criminal\nmisconduct. Hatcher and Jacobs surrendered to federal authorities in exchange for a promise\nthat a Governor\xe2\x80\x99s Task Force would investigate their complaints. The Task Force ultimately\nannounced that it had found no evidence to support Hatcher\xe2\x80\x99s and Jacobs\xe2\x80\x99 charges.\nHatcher and Jacobs were acquitted of federal criminal charges on October 14, 1988, but North\nCarolina District Attorney Joe Freeman Britt announced that Hatcher and Jacobs might face\nstate indictments. Soon after that announcement, Hatcher began a petition drive seeking to\nhave Hubert and Kevin Stone removed from the Sheriff\xe2\x80\x99s Office. The Robeson Defense\nCommittee, which had supported Hatcher in his federal trial, supported the petition drive. In\nNovember 1988, newspaper reports indicated that the State Bureau of Investigation was\ninvestigating whether there had been a conspiracy in the takeover of The Robesonian.\nAppellants Barry Nakell and Lewis Pitts contacted the Attorney General\xe2\x80\x99s office to express their\nconcern that SBI agents would intimidate citizens who were working with Hatcher in the petition\ndrive. The Attorney General responded that no action would be taken by his office because he\ndid not believe that the SBI was engaged in any abuse of process. Attorney Nakell alleges that\nthe Deputy Attorney General orally admitted that the decision was political.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c554\n\nAttorney Pitts volunteered legal assistance to anyone on the Robeson Defense Committee\nsubjected to harassment because of their participation in the petition drive. Appellants allege\nthat six members of the Defense Committee contacted Attorneys Pitts and Nakell with claims of\nharassment by SBI agents and the Sheriff\'s Department, primarily involving surveillance and\nquestioning.\nOn December 6, 1988, Hatcher and Jacobs were indicted on state charges. After the\nindictment, Jacobs fought extradition from New York. Hatcher was in federal custody in\nCalifornia.\nBy late December 1988, appellants contend that they believed that Jacobs\xe2\x80\x99 extradition, the\npending state prosecutions, and an alleged pattern of activity by the District Attorney and his\nstaff, members of the Sheriff\'s Department, and the SBI raised constitutional concerns which\ncould only be resolved by a civil suit, because public officials were unresponsive. Appellants\ncontend that they also believed that there was an illegal campaign to split Jacobs from Hatcher,\nand to interfere with Jacobs\' right to counsel by persuading him to hire local counsel.\nAttorneys Pitts and Nakell contend that they initially refrained from filing the complaint in hopes\nof enhancing Jacobs\xe2\x80\x99 plea bargaining opportunities, but Mr. Nakell filed the complaint on\nJanuary 31, 1989, the eve of the one-year anniversary of the armed takeover of The\nRobesonian, and he called a press conference to announce the filing. An amended complaint,\nsigned by all three appellants, was filed on March 16, 1989.\nThe suit named eight plaintiffs, including various members of the Robeson Defense Committee,\nand Jacobs and Hatcher. The thirty-page amended complaint names nineteen defendants,\nincluding two district attorneys and members of their staffs, five SBI agents, the SBI Director,\nthe Sheriff of Robeson County and five Deputy Sheriffs, the Attorney General of North Carolina,\nand the Governor of North Carolina. The complaint alleges First Amendment and Sixth\nAmendment violations concerning an alleged campaign of intimidation of political activity, and\nefforts to induce Jacobs to testify against Hatcher. All defendants were sued in their official and\nindividual capacities, except the Governor, who was named only in his official capacity in a\ncount seeking an injunction against extradition. The complaint also sought injunctions against\nthe pending state criminal prosecutions, and against the defendants\xe2\x80\x99 harassment and\ninterference with the attorney-client relationship established by Jacobs. The complaint sought\ndamages against all individually named defendants and Robeson County.\nAfter the case was filed, appellants sought expedited discovery to depose defendant SBI agent\nBowman, who was the case agent in the state\xe2\x80\x99s pending criminal action against Jacobs and\nHatcher. The defendants moved for a protective order claiming that discovery was improperly\nsought to obtain information concerning the state criminal proceedings, which plaintiffs could not\notherwise obtain. The district court did not rule on this motion prior to the dismissal of the case.\nIn late March 1989, Jacobs, having failed in resisting extradition, was returned to North\nCarolina. In April, Jacobs agreed to a plea bargain. Appellants contend that a variety of events\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c555\nthen caused them to reevaluate the viability of their civil suit, and to conclude that dismissal was\nappropriate.\nOn April 20, Mr. Nakell called Joan Byers, a Special Deputy Attorney General, seeking\ndefendants\xe2\x80\x99 approval to a stipulated dismissal under Rule 41(a)(1)(ii). Byers would not stipulate\nto a dismissal under Rule 41(a)(1), but authorized appellants to state that defendants did not\nobject to a dismissal under Rule 41(a)(2). Appellants proceeded under Rule 41(a)(2), and the\norder dismissing the case was entered on May 2, 1989.\nOn June 13, 1989, the state defendants filed their Rule 11 motion, and the county defendants\nfiled a similar motion for sanctions on July 5. On August 8, appellants responded to the Rule 11\nmotions and requested an evidentiary hearing. On September 5, appellants filed a Rule 11\nmotion seeking sanctions against the appellees. On September 8, the court heard arguments of\ncounsel and shortly thereafter requested submissions by defendants\xe2\x80\x99 counsel of their fees and\nexpenses. On September 29, the district court imposed Rule 11 sanctions upon appellants, and\ndismissed appellants\' Rule 11 motion. Sanctions against appellants included full fees and costs\nof $92,834.28 and $10,000 additional sanctions against each appellant based upon the\nbaseless claims which appellants had taken care to publicize. We affirm the district court\'s\nfindings that appellants violated all three prongs of Rule 11, but vacate and remand for\nreconsideration of the appropriate sanction.\nII\nSANCTIONS AFTER DISMISSAL\nInitially, we must determine whether the defendants\' failure to notify the plaintiffs or the court\nprior to dismissal that defendants intended to file a Rule 11 motion should have precluded\nconsideration of the Rule 11 motion. Appellants cite Barr Labs., Inc. v. Abbott Labs., where the\nSecond Circuit affirmed the denial of a Rule 11 motion filed after a stipulated dismissal under\nRule 41(a)(1)(ii). There, the defendant\xe2\x80\x99s attorney did not indicate an intention to seek Rule 11\nsanctions prior to dismissal and implied in a letter to plaintiff\'s counsel, prior to the dismissal,\nthat sanctions would not be sought if the case were voluntarily dismissed. The Barr court\nenunciated a rule \xe2\x80\x9cprohibiting a motion for Rule 11 sanctions after the execution of a stipulation\nof dismissal without a reservation of the right to move for such relief.\xe2\x80\x9d\nThe present case is different from Barr because it does not involve a stipulated dismissal, which\nrequires opposing counsel to sign the dismissal order. We have a dismissal under Rule\n41(a)(2), which does not require a stipulation by the defendants. No court has adopted a rule\nprohibiting a motion for Rule 11 sanctions after a dismissal with prejudice under Rule 41(a)(2).\nIn addition, unlike Barr, there is no evidence that defendants indicated that they would not\npursue Rule 11 sanctions. We decline to extend Barr to dismissals under Rule 41(a)(2).\nAppellants also argue that since Rule 41(a)(2) specifies that dismissal is subject to such \xe2\x80\x9cterms\nand conditions as the court deems proper,\xe2\x80\x9d the potential for Rule 11 sanctions should be stated\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c556\nby a defendant as a condition to a dismissal. We disagree. Rule 41(a)(2) does not require the\ndefendant or a court to indicate the possibility of Rule 11 sanctions as a \xe2\x80\x9cterm or condition\xe2\x80\x9d of a\nplaintiff\xe2\x80\x99s dismissal. Recently, in Cooter & Gell v. Hartmarx Corp., the Supreme Court\nhypothesized that even a Rule 11 sanction which prohibited refiling a complaint dismissed\nwithout prejudice under Rule 41(a)(1) would not be a \xe2\x80\x9cterm or condition\xe2\x80\x9d placed upon the\ndismissal. Waiver of a Rule 11 motion may not be a condition to dismissal because a decision\nnot to dismiss may not prevent the imposition of sanctions for an improvidently filed complaint.\n\xe2\x80\x9cAs the \xe2\x80\x98violation of Rule 11 is complete when the paper is filed,\xe2\x80\x99 a voluntary dismissal does not\nexpunge the Rule 11 violation.\xe2\x80\x9d\nThere may be circumstances under which Rule 11 sanctions should not be granted after the\nvoluntary dismissal of a case, i.e., a defendant has indicated an intent not to pursue sanctions,\nor the motion is filed an inordinately long time after the dismissal. \xe2\x80\x9cAlthough Rule 11 does not\nestablish a deadline for the imposition of sanctions, the Advisory Committee did not contemplate\nthere would be a lengthy delay prior to their imposition.\xe2\x80\x9d However, these considerations are\nequitable, and must be resolved on a case by case analysis. The party seeking sanctions may\navoid such problems by notifying his opponent and the court of his intention to pursue sanctions\nat the earliest possible date.\nAs the Supreme Court has recently confirmed, there is no jurisdictional bar to the imposition of\nsanctions after a voluntary dismissal.\nIn order to comply with Rule 11\'s requirement that a court \xe2\x80\x9cshall\xe2\x80\x9d impose sanctions \xe2\x80\x9cif a\npleading, motion, or other paper is signed in violation of this rule,\xe2\x80\x9d a court must have the\nauthority to consider whether there has been a violation of the signing requirement\nregardless of the dismissal of the underlying action.\n\xe2\x80\x9cThe only time limitation in filing Rule 11 arises out of equitable considerations.\xe2\x80\x9d The defendants\nfiled their motion six weeks after the Rule 41(a)(2) dismissal, the appellants were not prejudiced\nby appellees\xe2\x80\x99 delay in filing, and the district court\xe2\x80\x99s consideration of the motion was proper.\nIII VIOLATIONS OF RULE 11\nRule 11 states, in relevant part:\nThe signature of an attorney or party constitutes a certificate by the signer that the signer\nhas read the pleading, motion, or other paper; that to the best of the signer\'s knowledge,\ninformation, and belief formed after reasonable inquiry it is well grounded in fact and is\nwarranted by existing law or a good faith argument for the extension, modification, or\nreversal of existing law, and that it is not interposed for any improper purpose, such as to\nharass or to cause unnecessary delay or needless increase in the cost of litigation. If a\npleading, motion, or other paper is signed in violation of this rule, the court, upon motion\nor upon its own initiative, shall impose upon the person who signed it, a represented\nparty, or both, an appropriate sanction, which may include an order to pay to the other\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c557\nparty or parties the amount of the reasonable expenses incurred because of the filing of\nthe pleading, motion, or other paper, including a reasonable attorney\xe2\x80\x99s fee.\nThe district court found that the three appellants violated all three prongs of Rule 11 by failing to\nmake a reasonable inquiry to determine that the complaint stood well grounded in fact and\nwarranted by existing law, and by filing the complaint for an improper purpose. We review all\naspects of the district court\xe2\x80\x99s Rule 11 determinations under an abuse-of-discretion standard.\nA. Mr. Kunstler\xe2\x80\x99s Liability\nBefore reviewing the specific violations of Rule 11 found by the district court, we note that Mr.\nKunstler\xe2\x80\x99s affidavit states that he \xe2\x80\x9cdid not actively participate in the instant litigation, relying on\nProf. Barry Nakell, who was on the scene, to prepare and file it.\xe2\x80\x9d The district court stated that \xe2\x80\x9cin\nlight of the serious allegations in the complaint, Mr. Kunstler\'s total reliance on other counsel is\nitself a violation of Rule 11.\xe2\x80\x9d This finding is supported by a recent pronouncement of the\nSupreme Court. Mr. Kunstler\xe2\x80\x99s reliance on others was indeed an improper delegation of his\nresponsibility under Rule 11 to certify that the pleading filed over his name was well grounded in\nfact and in law.\nThe signing attorney cannot leave it to some trusted subordinate, or to one of his\npartners, to satisfy himself that the filed paper is factually and legally responsible; by\nsigning he represents not merely the fact that it is so, but also the fact that he personally\nhas applied his own judgment.\n\xe2\x80\x9cThe purpose of Rule 11 as a whole is to bring home to the individual signer his personal,\nnondelegable responsibility.\xe2\x80\x9d Having failed in his responsibility, Mr. Kunstler may not now be\nheard to protest that he does not share in any violations of Rule 11 which are evident on the\nface of the complaint.\nB. Well Grounded in Fact\nThe district court based sanctions in part on a violation of the first prong of Rule 11 \xe2\x80\x94 finding\nthat the complaint was not well grounded in fact. An objective test is used \xe2\x80\x9cto determine the\nreasonableness of a lawyer\xe2\x80\x99s prefiling investigation.\xe2\x80\x9d \xe2\x80\x9cBlind reliance on the client is seldom a\nsufficient inquiry.\xe2\x80\x9d Mr. Nakell and Mr. Pitts have argued that they had \xe2\x80\x9can intimate knowledge of\nthe county and its people; factors which made them professionally capable of assimilating and\nweighing the facts gathered prior to filing the civil suit.\xe2\x80\x9d In light of that knowledge, the factual\ninaccuracies in the complaint are even more egregious.\nThe district court noted numerous misstatements of fact, such as the assertion that the district\nattorney \xe2\x80\x9cserves as the criminal prosecution arm of Defendant Robeson County and as such\nmakes policy in police investigation and criminal prosecution matters for Defendant Robeson\nCounty.\xe2\x80\x9d In fact, the District Attorney is an officer of the state, not an agent nor an employee of\nthe county. Contrary to the complaint, defendants Britt, Townsend, and Sampson, and the\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c558\nDistrict Attorney\xe2\x80\x99s staff, are state officers, not agents or employees of Robeson County. The\ncomplaint alleges that District Attorney Britt refused and failed to discipline, train and supervise\nthe Sheriff\xe2\x80\x99s deputies \xe2\x80\x9cunder their control and supervision.\xe2\x80\x9d District Attorneys possess no such\npower or responsibility.\nAppellants acknowledge some errors, but contend they are \xe2\x80\x9cisolated\xe2\x80\x9d and thus do not warrant\nsanctions. We do not agree with this characterization. The errors pervade the complaint and\nconcern information which either was or should have been known to appellants. The errors\nprovide a false foundation for appellants\xe2\x80\x99 allegation of a county-wide \xe2\x80\x9cconspiracy,\xe2\x80\x9d and are\ncentral to the complaint. Appellants also suggest that, under Pembaur v. Cincinnati (1986), state\nofficials can sometimes establish county policy for purposes of \xc2\xa7 1983 liability. Unlike Pembaur,\nthere is no provision of North Carolina law which suggests that the state officials in this case\neither could or did act to establish county policy.\nOther causes of action were founded on allegations which utterly lacked any basis in fact. For\nexample, the complaint alleged that the Governor, the Attorney General and District Attorney\nentered into a \xe2\x80\x9cno state prosecution\xe2\x80\x9d agreement, and this agreement was breached when the\nstate prosecution commenced. The district court found that prior to filing their complaint,\nappellants\nhad access to the transcript of the negotiations leading to the hostage release\nagreement as well as a copy of the written agreement. Nothing in the agreement or in\nany of the negotiations, suggests an agreement that Hatcher and Jacobs would not face\nNorth Carolina charges, and none of the negotiators had the authority to so agree.\nMoreover, North Carolina law does not grant the Governor or the State Attorney General the\npower to bind the state not to prosecute. Neither the Attorney General nor District Attorney Britt\nplayed any role in the hostage negotiations, but appellants now argue that unspecified\nevidence, obtainable through discovery, \xe2\x80\x9ccould show\xe2\x80\x9d that a no prosecution agreement was\nmade. While a lawyer may rely on discovery to reveal additional facts to support claims which\nare well grounded in fact, Rule 11 sanctions are appropriate when a lawyer attempts to use\ndiscovery to support outrageous and frivolous claims for which there is no factual support.\nUnsubstantiated claims such as these constitute an abuse of the judicial process for which Rule\n11 sanctions were designed.\nAppellants appear to have relied entirely upon discovery in the hope of finding some factual\nsupport for many of their claims. In their Memorandum and Opposition to Defendants\xe2\x80\x99 Motion for\na Protective Order, appellants wrote:\nPlaintiffs anticipate that as a result of deposing SBI defendant Bowman they will be in a\nposition to apply to the Court for temporary injunctive relief and make the showing\nrequired by Rule 65(b) of the Federal Rules of Civil Procedure.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c559\nAppellants requested a temporary restraining order in their complaint. Rule 65(b) makes clear\nthat a temporary restraining order may be granted only if\nit clearly appears from specific facts shown by affidavit or by the verified complaint that\nimmediate and irreparable injury, loss, or damage will result to the applicant before the\nadverse party or his attorney can be heard in opposition.\nRule 65(b) does not authorize counsel to request relief and then search through discovery for\nfacts to support the relief already requested. The rule requires that \xe2\x80\x9cspecific facts\xe2\x80\x9d be \xe2\x80\x9cshown\xe2\x80\x9d to\nthe court with the request for relief. We agree with the district court that the appellants\xe2\x80\x99 request\nfor relief and their indication that they were not \xe2\x80\x9cin a position to make the showing required by\nRule 65(b)\xe2\x80\x9d without later discovery indicates an unacceptable level of pre-filing investigation.\nWe affirm the district court\'s findings that many of the allegations against state and local officials\n\xe2\x80\x9chave nothing to do with this case and are factually unsubstantiated.\xe2\x80\x9d Allegations which suggest\nthat the Sheriff is engaged in drug trafficking and that a black inmate died while in the Sheriff\xe2\x80\x99s\ncustody are irrelevant. These allegations involve no injury to the plaintiffs, and the report of drug\ntrafficking by the Sheriff\xe2\x80\x99s Office is wholly unsupported in fact. Appellants protest that these\nallegations were represented in the complaint only as beliefs of their clients, but this does not\nmake them relevant to the complaint or less scandalous in nature. While irrelevant allegations,\nstanding alone, may not be cause for Rule 11 sanctions, the existence of numerous irrelevant,\nunsubstantiated, and sensational allegations is an appropriate factor for a district court to\nconsider in determining whether the pleading as a whole lacks adequate factual foundation.\nIn this case, the complaint was filled with irrelevant allegations not tied to specific injuries to\nplaintiffs, i.e., general allegations of abusive behavior against blacks and Indians, and\nallegations that Robeson County is beleaguered by poverty, illiteracy, and violence. There was\nlittle basis for the allegation that Britt, Townsend, Thornburg and Morgan conspired to appoint\nTownsend as District Attorney and to use SBI agents as political police to discredit the\nRepublican candidate, and that allegation was again irrelevant. Hatcher and Jacobs had been\nindicted prior to Townsend\xe2\x80\x99s appointment, and none of the other candidates for District Attorney\nsuggested that they would not continue the prosecution. Appellants\xe2\x80\x99 arguments as to the\nrelevance of such allegations are tangential at best and often strain credulity.\nAlthough Mr. Nakell and Mr. Pitts filed lengthy affidavits detailing their factual inquiry, such\naffidavits do not provide factual or legal support for the inaccuracies noted by the district court.\nThe number of hours allegedly spent by counsel in prefiling investigation does not dissuade us\nfrom affirming the district court\xe2\x80\x99s findings of Rule 11 violations. Given the adequate time to\nprepare and hours allegedly spent in preparation of the complaint, appellants have presented no\nexcuse for the many clear factual errors in this pleading.\nAppellants have argued that, despite the lack of pre-filing foundation for their claims, it was\nappropriate to include the claims because support for them could only be obtained through\ndiscovery. In Kraemer v. Grant County, the court held that sanctions were not warranted where\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c560\nan attorney relied on client information to support a cause of action based on a theory of\nconspiracy, even though additional facts were needed to prove the claim. \xe2\x80\x9cIf discovery is\nnecessary to establish a claim, then it is not unreasonable to file a complaint so as to obtain the\nright to conduct that discovery.\xe2\x80\x9d Despite this sweeping statement, there were in Kraemer a\nnumber of factors cautioning against sanctions which are not present here. In Kraemer, the\nattorney was a recent law school graduate, and had hired a private investigator to look into his\nclient\xe2\x80\x99s allegations. The investigator\xe2\x80\x99s report did not discredit any part of the client\xe2\x80\x99s story and\nthe prospective defendants refused to cooperate with the investigator. Only a single portion of\nthe complaint \xe2\x80\x94 that dealing with the proof of state action \xe2\x80\x94 was ultimately found to be without\nsupport.\nIn the present case, appellants are experienced attorneys with both the time and the means to\nconduct a responsible factual investigation. The complaint contains myriad inaccuracies rather\nthan a single error. Many of the factual inaccuracies could have been discovered by the most\ncursory investigation. The irrelevances are inexcusable considering the attorneys\xe2\x80\x99 experience.\nIndeed, it is remarkable that so many errors could have been undetected by appellants. The\nnumber of claims without factual foundation warrants sanctions, whether the errors stem from\nincompetency or wilful misconduct.\nThe need for discovery to complete the factual basis for alleged claims is not an excuse to\nallege claims with no factual basis. While we do not disagree with the result obtained in\nKraemer, we find that it is not applicable to the present case. A lawyer is an officer of the court,\nand he should never file a lawsuit without confidence that it has a reasonable basis in fact and is\nwell grounded in law. For the purposes of Rule 11, the factual inquiry necessary to file a\ncomplaint is generally satisfied if all of the information which can be obtained prior to suit\nsupports the allegations made, even though further facts must be obtained through discovery to\nfinally prove the claim. However, a complaint containing allegations unsupported by any\ninformation obtained prior to filing, or allegations based on information which minimal factual\ninquiry would disprove, will subject the author to sanctions.\nC. Well Grounded In Law\nThe district court found that the complaint was not well grounded in law. We agree. Appellants\ncontend that the strength of the legal basis of the complaint is demonstrated by their opponent\xe2\x80\x99s\nlengthy response to them, and the approval of a civil rights attorney, who reviewed and\napproved of, but did not sign, the complaint. The length of an opponent\xe2\x80\x99s response to a\ncomplaint does not validate the otherwise insubstantial claims therein, because a lengthy\nresponse may reveal less the merit of particular claims than the number of valid defenses to\nthem. An opponent may have employed \xe2\x80\x9cscorched earth\xe2\x80\x9d tactics in composing a response far\nbeyond what is required to oppose frivolous claims. Nor is the Rule 11 standard of whether a\n\xe2\x80\x9creasonable attorney in like circumstances would believe his actions to be factually and legally\njustified\xe2\x80\x9d satisfied merely by having another attorney review a complaint. The reviewing attorney\nmay be unfamiliar with the true facts of the case, the factual and legal investigation conducted,\nor the law relevant to the complaint.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c561\n\nThe district court enumerated several substantial claims without legal foundation. The court\nfound no factual or legal basis for the double jeopardy claim to the state prosecution of Hatcher\nand Jacobs following the federal prosecution, because a subsequent prosecution by a different\nsovereign plainly does not constitute double jeopardy. Although a \xe2\x80\x9ctool of the same authorities\xe2\x80\x9d\nexception is possible in some circumstances, that exception may only be established by proof\nthat State officials had little or no independent volition in their proceedings. In this case,\nhowever, the complaint alleged that the state officials instituted and controlled the state\nproceeding, which precludes the establishment of that exception. The district court also\nconsidered a quotation attributed to Mr. Pitts in a newspaper article that the state charges did\nnot constitute double jeopardy. Although we caution the court against relying too heavily on\npress reports, we do not fault the district court for considering the statement.\nThe district court found without legal foundation the plaintiffs\xe2\x80\x99 claim that Hatcher\xe2\x80\x99s Fifth\nAmendment rights were damaged when the state tried to extract testimony from Jacobs. Fifth\nAmendment protection is personal to the individual whose testimony is being compelled and\nappellants as experienced attorneys should have been well aware of this. Appellants make no\nattempt to explain away this glaring blunder.\nAppellants sought to enjoin state criminal proceedings, but the district court found that the\nYounger v. Harris abstention doctrine clearly barred such relief. The court also found that\nHatcher and Jacobs could have presented their federal constitutional claims to the state court.\nWe agree that plaintiffs had no factual basis for claiming that the state prosecution was brought\nin bad faith, or without a reasonable expectation of conviction, because Hatcher and Jacobs had\nnever denied taking hostages. Although appellants cite an Eighth Circuit case which suggests\nthat the Younger abstention doctrine does not apply if \xe2\x80\x9ca prosecution was brought in retaliation\nfor or to discourage the exercise of constitutional rights \xe2\x80\x98regardless of whether valid convictions\nconceivably could be obtained,\xe2\x80\x99\xe2\x80\x9d that proposition has been rejected by this court. In Suggs v.\nBrannon, we upheld the use of the Younger abstention doctrine when plaintiffs claimed that their\nprosecution under obscenity laws chilled their First Amendment rights.\nThe district court also noted \xe2\x80\x9cserious standing problems with many of the plaintiffs\xe2\x80\x99 claims.\xe2\x80\x9d For\nexample, on the claim that the prosecution chilled Hatcher and Jacobs\xe2\x80\x99 First Amendment\nexpression, the complaint presented no facts showing specific harm or threat of harm.\nAppellants respond that they did show concrete and specific harm insofar as plaintiffs\xe2\x80\x99\nparticipation in the petition drive was curtailed. However, Hatcher and Jacob\xe2\x80\x99s participation was\nnot curtailed, and the district court\xe2\x80\x99s observation on their standing problem with respect to that\nclaim is valid.\nWe therefore affirm the court\'s findings that the complaint on the whole was not well grounded\nin law.\nD. Improper Purpose\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c562\nSanctions could have been imposed for the violations already discussed, but the district court\nalso based the award of sanctions on appellants\xe2\x80\x99 improper purpose in filing the complaint. The\ntype and number of Rule 11 violations are considered in determining the appropriate sanction,\nand it was proper for the district court to consider appellants\xe2\x80\x99 purpose. Although the district court\nfirst discussed \xe2\x80\x9cimproper purpose\xe2\x80\x9d under Rule 11, whether or not a pleading has a foundation in\nfact or is well grounded in law will often influence the determination of the signer\xe2\x80\x99s purpose, and\nwe suggest that a district court should consider the first two prongs of Rule 11 before making a\ndetermination of improper purpose.\nAppellants argue that the district court\xe2\x80\x99s conclusions as to their purpose are clearly erroneous,\nbecause there is no evidence in the record to support the court\xe2\x80\x99s findings, or the findings are\nbased on factual conclusions which were contested by affidavit. The district court concluded that\nsanctions would be appropriate based on the improper purpose of the lawsuit \xe2\x80\x9ceven if the\ncomplaint had a proper legal and factual basis.\xe2\x80\x9d Since we have affirmed the court\xe2\x80\x99s findings that\nthe complaint in the instant case was not well grounded in law or in fact, we need not decide\nwhether a complaint which is well grounded in law and in fact can be sanctioned solely on the\nbasis that it was filed for an improper purpose. Rather, we look only to whether the court abused\nits discretion in finding that the complaint was filed for an improper purpose.\nRule 11 defines the term \xe2\x80\x9cimproper purpose\xe2\x80\x9d to include factors \xe2\x80\x9csuch as to harass or to cause\nunnecessary delay or needless increase in the costs of litigation.\xe2\x80\x9d The factors mentioned in the\nrule are not exclusive. If a complaint is not filed to vindicate rights in court, its purpose must be\nimproper. However, if a complaint is filed to vindicate rights in court, and also for some other\npurpose, a court should not sanction counsel for an intention that the court does not approve, so\nlong as the added purpose is not undertaken in bad faith and is not so excessive as to eliminate\na proper purpose. Thus, the purpose to vindicate rights in court must be central and sincere.\nFiling of excessive motions may sometimes constitute \xe2\x80\x9charassment\xe2\x80\x9d under the rule even if the\nmotions are well grounded. Likewise, filing a motion or pleading without a sincere intent to\npursue it will garner sanctions.\nWe have previously stated that in order to determine \xe2\x80\x9cimproper purpose,\xe2\x80\x9d a district court must\njudge the conduct of counsel under an objective standard of reasonableness rather than\nassessing subjective intent. This test was derived from Zaldivar v. City of Los Angeles, where it\nwas stated that \xe2\x80\x9charrassment under Rule 11 focuses upon the improper purpose of the signer,\nobjectively tested, rather than the consequences of the signer\xe2\x80\x99s act, subjectively viewed by the\nsigner\xe2\x80\x99s opponent.\xe2\x80\x9d In other words, it is not enough that the injured party subjectively believes\nthat a lawsuit was brought to harass, or to focus negative publicity on the injured party; instead,\nsuch improper purposes must be derived from the motive of the signer in pursuing the suit. An\nopponent in a lawsuit, particularly a defendant, will nearly always subjectively feel that the\nlawsuit was brought for less than proper purposes; plaintiffs and defendants are not often on\ncongenial terms at the time a suit is brought. However, a court must ignore evidence of the\ninjured party\xe2\x80\x99s subjective beliefs and look for more objective evidence of the signer\xe2\x80\x99s purpose.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c563\nThere is some paradox involved in this analysis, because it is appropriate to consider the\nsigner\xe2\x80\x99s subjective beliefs to determine the signer\xe2\x80\x99s purpose in filing suit, if such beliefs are\nrevealed through an admission that the signer knew that the motion or pleading was baseless\nbut filed it nonetheless. This evidence may be said to be \xe2\x80\x9cobjective\xe2\x80\x9d in the sense that it can be\nviewed by a court without fear of misinterpretation; it does not involve difficult determinations of\ncredibility. Circumstantial facts surrounding the filing may also be considered as evidence of the\nsigner\xe2\x80\x99s purpose. Repeated filings, the outrageous nature of the claims made, or a signer\xe2\x80\x99s\nexperience in a particular area of law, under which baseless claims have been made, are all\nappropriate indicators of an improper purpose.\nThe district court concluded that plaintiffs\xe2\x80\x99 counsel never intended to litigate this \xc2\xa7 1983 action\nand that counsel filed it for publicity, to embarrass state and county officials, to use as leverage\nin criminal proceedings, to obtain discovery for use in criminal proceedings, and to intimidate\nthose involved in the prosecution of Hatcher and Jacobs.\nThe court drew its conclusions without the aid of an evidentiary hearing, but relied upon the\nevidence before it. The court\xe2\x80\x99s first conclusion, that counsel never intended to litigate the action,\nis the one which most clearly supports sanctions based on a finding of improper purpose. The\nfact that so many allegations in the complaint lacked a basis in law or in fact strongly supports\nthe court\xe2\x80\x99s finding of improper purpose. The existence of baseless allegations does not alone\nrequire a finding of improper purpose, because inexperience or incompetence may have caused\ntheir inclusion in a pleading, rather than or in addition to willfulness or deliberate choice.\nHowever, in this case counsel are clearly not inexperienced, and the number and magnitude of\nclaims without foundation suggests that incompetence is not the cause for such allegations in\nthe complaint. This court is left with the conclusion, drawn by the district court, that counsel\nwilfully included the baseless claims. If counsel wilfully files a baseless complaint, a court may\nproperly infer that it was filed either for purposes of harassment, or some purpose other than to\nvindicate rights through the judicial process. We therefore affirm the district court\xe2\x80\x99s finding that\nappellants violated the improper purpose prong of Rule 11.\nIn addition to relying upon the complaint itself, the district court inferred an improper purpose\nfrom the timing of the filing of the complaint, on the eve of the anniversary of the takeover of The\nRobesonian, and some time after the alleged constitutional violations began. The court also\nviewed with suspicion the timing and nature of the dismissal of the complaint, which occurred\nafter Jacobs lost his extradition fight in the criminal case, and before any significant discovery\nmight have given notice to the plaintiffs that their claims were not valid. The district court\ndismissed as incredible appellants\xe2\x80\x99 explanations for dismissal, which contended that many of\nthe claims had become moot through a series of events. The district court found it \xe2\x80\x9cabsurd\xe2\x80\x9d to\nthink that the wide-spread conspiracy involving high-level state and public officials had suddenly\nbecome unimportant by May 2, 1989. The court noted that the basis of the complaint \xe2\x80\x94 the\nbreach of the alleged no-prosecution agreement \xe2\x80\x94 still existed even after Hatcher\xe2\x80\x99s and\nJacobs\xe2\x80\x99 guilty pleas to the state charges. The court stated that the double jeopardy claims,\ndamage claims, and other requests for equitable relief, if ever valid, did not cease being valid. In\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c564\nfinding improper purpose, the district court was also influenced by the outrageous nature of the\nclaims made.\nThe affidavits submitted by counsel strongly disputed the court\xe2\x80\x99s conclusions as to the timing of\nthe filing and of the dismissal of the suit, and claimed that no improper motive influenced the\ntiming of events. As to the decision to dismiss, appellants argued that it was based solely on\nfinancial considerations and the necessity of devoting professional resources elsewhere.\nAppellants argue that many equitable claims had become moot, and that the prospect for\ndamages on the remaining claims did not warrant the expense of continuing the suit. However,\nthe district court\xe2\x80\x99s determination that these explanations are not reasonable or believable, in\nlight of all of the evidence surrounding the filing of the complaint and the frivolous nature of the\nallegations made, is not clearly erroneous.\nThe district court noted other evidence which suggested that appellants\xe2\x80\x99 purpose in filing the\ncomplaint was not to vindicate plaintiffs\xe2\x80\x99 rights, such as appellants sending a copy of the\ncomplaint to the state judge who likely would have tried Hatcher and Jacobs in the criminal\ncase. The court also noted a quotation reported by the media, in which Mr. Pitts allegedly\nsuggested that the suit was dropped after the Attorney General\xe2\x80\x99s office showed strong\nopposition to the suit. The court further considered an affidavit by New York attorney Neal Rose\nconcerning Mr. Pitts\xe2\x80\x99 alleged admission that the suit was commenced as leverage and lacked a\nfactual basis, although that affidavit was contradicted by an affidavit by attorney Alan Rosenthal.\nIn light of other evidence which supports the court\'s finding of improper purpose, we cannot say\nthat it was an abuse of discretion for the court to consider these matters as additional support,\neven though determinations of credibility are best made after an evidentiary hearing.\nIn concluding that appellants had never intended to litigate their suit, the district court also\nconcluded that circumstances surrounding the case, when viewed as a whole, supported the\nconclusion that appellants\xe2\x80\x99 primary motives in filing the complaint were to gain publicity, to\nembarrass state and county officials, to gain leverage in criminal proceedings, to obtain\ndiscovery for use in criminal proceedings, and to intimidate those involved in the prosecution of\nHatcher and Jacobs. At least some of these motives would not warrant sanctions under the\nimproper purpose portion of Rule 11, if appellants\xe2\x80\x99 central purpose in bringing suit had been to\nvindicate rights of the plaintiffs. Holding a press conference to announce a lawsuit, while\nperhaps in poor taste, is not grounds for a Rule 11 sanction, nor is a subjective hope by a\nplaintiff that a lawsuit will embarrass or upset a defendant, so long as there is evidence that a\nplaintiff\xe2\x80\x99s central purpose in filing a complaint was to vindicate rights through the judicial\nprocess. In this case, however, there was no proper purpose for appellants\xe2\x80\x99 filing of the suit, and\nthe district court\xe2\x80\x99s consideration of other possible motives for the suit based on the evidence\navailable was proper.\nWe have affirmed the district court\xe2\x80\x99s conclusion that sanctions were warranted based on the\nimproper purpose prong of Rule 11 because it is not clearly erroneous and is supported by facts\nsuch as the baseless allegations made, appellants\xe2\x80\x99 legal experience, and the cumulative nature\nof the evidence. However, we urge district courts to exercise special caution when evaluating a\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c565\nsigner\xe2\x80\x99s purpose under Rule 11. When there are issues of credibility, disputed questions of fact,\nand rational explanations of purpose given, an evidentiary hearing may well be necessary to\nresolve the issues. This is particularly true when large sanctions are being considered on the\nground of improper purpose as well as failure to comply with the first two prongs of Rule 11. We\ndo not find that the court erred in failing to hold an evidentiary hearing in this case, because the\ncumulative nature of the evidence, as well as our earlier findings on the frivolousness of the\nallegations made in the complaint and the lack of a legal or factual basis, convinces us that the\ncourt\xe2\x80\x99s finding of improper purpose is not clearly erroneous and would not have been altered by\nan evidentiary hearing.\nIV DUE PROCESS\nAppellants argue that the district court should not have found a violation of the \xe2\x80\x9cimproper\npurpose\xe2\x80\x9d prong of Rule 11 without holding an evidentiary hearing. We disagree. Due process\ndoes not require an evidentiary hearing before sanctions are imposed, even when sanctions are\nimposed in part under the improper purpose prong of Rule 11. The Advisory Committee Note on\nRule 11, indicates that satellite litigation over sanctions and separate hearings should be limited\nto the extent possible. \xe2\x80\x9cThe court must to the extent possible limit the scope of the sanction\nproceedings to the record.\xe2\x80\x9d\nIn determining whether and to what extent a hearing is required prior to the imposition of\nsanctions, we are guided by the Advisory Committee Note to Rule 11 and the reasoning of\nDonaldson v. Clark:\nThe Advisory Committee Note indicates some of the matters to be considered: (1) the\ncircumstances in general; (2) the type and severity of the sanction under consideration;\nand (3) the judge\xe2\x80\x99s participation in the proceedings, the judge\xe2\x80\x99s knowledge of the facts,\nand whether there is need for further inquiry. The Advisory Committee Note observes\nthat \xe2\x80\x9cin many situations the judge\xe2\x80\x99s participation in the proceedings provides him with full\nknowledge of the relevant facts and little further inquiry will be necessary.\xe2\x80\x9d\nWhen an attorney has failed to present necessary factual support for claims despite\nseveral opportunities to do so, for example, further hearing on the sanctions issue may\nwell be not only unnecessary but also a waste of judicial resources. On the other hand,\nwhen a court is asked to resolve an issue of credibility or to determine whether a good\nfaith argument can be made for the legal position taken, the risk of an erroneous\nimposition of sanctions under limited procedures and the probable value of additional\nhearing are likely to be greater. Prior opportunities to respond to Rule 11 charges will\nalso influence the extent to which further hearing is necessary.\nAs mentioned by the Advisory Committee, the type and severity of the sanction are\nnecessary elements in the calculus. The more serious the possible sanction both in\nabsolute size and in relation to actual expenditures, the more process that will be due.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c566\nEven if an evidentiary hearing is not required in every \xe2\x80\x9cimproper purpose\xe2\x80\x9d case, appellants\nargue that such hearing was required in this case. Although the number of credibility\ndeterminations which the court made without an evidentiary hearing should have suggested to\nthe court that an evidentiary hearing would have been of value, we affirm the court\'s findings\nthat appellants violated all three prongs of Rule 11 because the findings are not clearly\nerroneous even excluding some evidence of \xe2\x80\x9cimproper motive\xe2\x80\x9d which appellants contested.\nThe district judge\xe2\x80\x99s participation in the proceedings was adequate to give him full knowledge of\nthe relevant facts without the necessity of an evidentiary hearing. The district court had before it\nthe pleadings, the summary judgment motions of the state defendants and the 12(b) motion of\nthe county defendants. We also find that counsel were given an adequate opportunity to contest\nthe court\xe2\x80\x99s determinations that Rule 11 was violated. The district court allowed appellants to\nsubmit affidavits, and voluminous written legal arguments. The district judge also heard oral\nargument. We find that due process requirements were satisfied by the opportunities appellants\nwere given to respond to the charges that their complaint violated Rule 11.\nHowever, although we find that counsel had an adequate opportunity to contest the court\xe2\x80\x99s\nfinding that Rule 11 was violated, we find that appellants were not given an adequate\nopportunity to respond to the type and amount of sanction imposed, particularly in light of the\nlarge monetary sanction. Appellants were given no opportunity to contest the fee statements\nsubmitted, and the amount of the sanction was largely the result of those statements. Under the\nfacts of this case, particularly the amount of the sanction, due process requires that appellants\nhave some opportunity to contest the amount of the sanction imposed. We therefore vacate the\nsanction imposed. As discussed below, we vacate the type and amount of sanction chosen by\nthe district court for certain additional reasons. On remand, under the guidelines set forth below\nthe appellants will be given an appropriate opportunity to respond to the type and the amount of\nthe sanction.\nV AMOUNT OF SANCTION\nA. Attorney Fees Portion\nRule 11 requires that \xe2\x80\x9can appropriate sanction\xe2\x80\x9d be imposed upon those who violate its\nrequirements. Appellants argue that the amount of sanctions was inappropriate, in part because\nthe district court used the Rule to shift fees and compensate the defendants, rather than to deter\nimproper litigation. We agree and vacate the amount of the monetary sanction.\nWe have previously held that the least severe sanction adequate to serve the purposes of Rule\n11 should be imposed. It is clear that Rule 11 should not blindly be used to shift fees. In this\ninstance, it appears that the district court erred in assuming that \xe2\x80\x9cthe first purpose of sanctions\nunder Rule 11 is to compensate the offended parties.\xe2\x80\x9d In establishing the amount of the\nsanction, the district court improperly focused on providing \xe2\x80\x9ccompensatory sanctions.\xe2\x80\x9d The\namount of expense borne by opposing counsel in combatting frivolous claims may well be an\nappropriate factor for a district court to consider in determining whether a monetary sanction\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c567\nshould issue and if so, in what amount. However, it is clear that the primary, or \xe2\x80\x9cfirst\xe2\x80\x9d purpose of\nRule 11 is to deter future litigation abuse. A district court can and should bear in mind that other\npurposes of the rule include compensating the victims of the Rule 11 violation, as well as\npunishing present litigation abuse, streamlining court dockets and facilitating court\nmanagement. But the amount of a monetary sanction should always reflect the primary purpose\nof deterrence.\nWhen a monetary award is issued, a district court should explain the basis for the sanction so a\nreviewing court may have a basis to determine whether the chosen sanction is appropriate. A\ndistrict court should consider the four factors recently enumerated by the Tenth Circuit in White\nv. General Motors Corp.: (1) the reasonableness of the opposing party\xe2\x80\x99s attorney\xe2\x80\x99s fees; (2) the\nminimum to deter; (3) the ability to pay; and (4) factors related to the severity of the Rule 11\nviolation.\n1) Reasonableness (lodestar) calculation. Because the sanction is generally to pay the\nopposing party\xe2\x80\x99s \xe2\x80\x9creasonable expenses including a reasonable attorney\xe2\x80\x99s fee,\xe2\x80\x9d incurred\nbecause of the improper behavior, determination of this amount is the usual first step.\nThe plain language of the rule requires that the court independently analyze the\nreasonableness of the requested fees and expenses. The injured party has a duty to\nmitigate costs by not overstaffing, overresearching or overdiscovering clearly meritless\nclaims. In evaluating the reasonableness of the fee request, the district court should\nconsider that the very frivolousness of the claim is what justifies the sanctions.\nAttorney time which is attributed to responding to the media, or to claims within a pleading which\ndo not merit sanctions, should be excluded from consideration. Only attorney time which is in\nresponse to that which has been sanctioned should be evaluated. In this case, it is appropriate\nfor the court to consider on remand whether the large amount of time devoted to the pursuit of\nsanctions was warranted, and whether the injured parties failed to mitigate their costs by\ndelaying their pursuit of sanctions until after the dismissal. It would also be appropriate for the\ndistrict court to reduce the amount of any fees awarded based on appellees\xe2\x80\x99 failure to give\nearlier notice to appellants that their conduct warranted Rule 11 sanctions. While the analysis of\nthe reasonableness of costs may call for fairly detailed affidavits, this requirement is not\nintended to require evidentiary hearings.\nAlthough amici curiae for appellants argue that sanctions based in whole or in part on attorney\'s\nfees require the same procedures of discovery, briefing, and argument allowed in attorney\xe2\x80\x99s\nfees cases, we have already stated that sanctions, unlike attorney\xe2\x80\x99s fees, are not primarily\nintended to compensate the prevailing party. Because the purposes of sanctions differ from\nthose of attorney\xe2\x80\x99s fees, the amount of process due the offending party differs.\nThe determination of the type or amount of the sanction imposed comes only after the offending\nparty has had an opportunity to defend against the imposition of any sanction. Presumably, a\nparty\xe2\x80\x99s interest in the kind and amount of a sanction is of less import than his or her interest in\nthe decision to impose any sanction. As stated, a district court is required to choose the least\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c568\nsevere sanction adequate to accomplish the purpose of Rule 11. Thus, a monetary sanction\nshould never be based solely on the amount of attorney\xe2\x80\x99s fees claimed by the injured party,\neven where a court determines that the amount of the sanction should equal the fees claimed\nby the injured party. As we have previously stated, \xe2\x80\x9creasonable\xe2\x80\x9d attorney\xe2\x80\x99s fees in the context of\nRule 11 \xe2\x80\x9cdoes not necessarily mean actual expenses and attorney\xe2\x80\x99s fees.\xe2\x80\x9d Because the amount\nof a monetary sanction is not based solely on any claimed amount of attorney\'s fees, but rather\non all of the factors listed herein, the risk of an erroneous calculation based on fee statements is\nless troublesome in the context of a Rule 11 sanction than in attorney\'s fees cases. We also\nbear in mind the interest in avoiding additional hearings for purposes of calculating the amount\nof fees in the context of Rule 11. Given these considerations, we hold that a sanctioned party is\nnot entitled to an evidentiary hearing or to all of the procedural safeguards available in the\ncontext of attorney\'s fees actions. Instead, a district court may permit a sanctioned party to\nrespond to an opposing party\'s fee statements in its discretion. Of course, such discretion must\nbe exercised with proper considerations of due process. Where a court determines that a large\nmonetary sanction should issue, and the amount is heavily influenced by an injured party\'s fee\nstatements, as was the case here, the court should permit the sanctioned party to examine and\ncontest the injured party\'s fee statements as an aid to the court\'s own independent analysis of\nthe reasonableness of the claimed fees.\n2) Minimum to deter. As we have already stated, the primary purpose of sanctions is to\ndeter attorney and litigant misconduct, not to compensate the opposing party for its costs\nin defending a frivolous suit. It is particularly inappropriate to use sanctions as a means\nof driving certain attorneys out of practice. Such decisions are properly made by those\ncharged with handling attorney disbarment and are generally accompanied by specific\ndue process provisions to protect the rights of the attorney in question. The amount of\nsanctions is appropriate only when it is the \xe2\x80\x9cminimum that will serve to adequately deter\nthe undesirable behavior.\xe2\x80\x9d Thus, the limit of any sanction award should be that amount\nreasonably necessary to deter the wrongdoer.\nA district court must constantly bear in mind the limited purposes of Rule 11, particularly in a\ncase such as this, where a court may disagree with aspects of counsel\'s conduct which fall\noutside of the scope of Rule 11. Of course, a court must also constantly bear in mind that the\nrule is not to chill the bringing of facially valid lawsuits, or a lawyer\'s creativity in introducing\nnovel theories of recovery.\n3. Ability to pay. The offender\xe2\x80\x99s ability to pay must also be considered, not because it\naffects the egregiousness of the violation, but because the purpose of monetary\nsanctions is to deter attorney and litigant misconduct. Because of their deterrent\npurpose, Rule 11 sanctions are analogous to punitive damages. It is hornbook law that\nthe financial condition of the offender is an appropriate consideration in the\ndetermination of punitive damages. Inability to pay what the court would otherwise\nregard as an appropriate sanction should be treated as reasonably akin to an affirmative\ndefense, with the burden upon the parties being sanctioned to come forward with\nevidence of their financial status.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c569\n\nAlthough the burden is upon the parties being sanctioned to come forward with evidence of their\nfinancial status, a monetary sanction imposed without any consideration of ability to pay would\nconstitute an abuse of discretion. A court should refrain from imposing a monetary award so\ngreat that it will bankrupt the offending parties or force them from the future practice of law.\nGenerally, the smaller the amount of the monetary sanction imposed, the greater the likelihood\nthat a court\xe2\x80\x99s consideration of the ability to pay will not want for lack of the formal submission of\nevidence on a sanctioned party\xe2\x80\x99s financial status. When the monetary sanction is large,\nhowever, the parties should generally be given the opportunity to submit affidavits on their\nfinancial status, or to submit such other evidence as the court\xe2\x80\x99s discretion permits. In this case,\nthe amount of the monetary sanction originally imposed was substantial, and the parties should\nhave been afforded the opportunity to submit evidence on the issue of whether the amount\nimposed was so great as to unfairly restrict their access to the courts or to otherwise curtail their\nability to practice law or to cause them great financial distress.\n4. Other factors. In addition, the court may consider factors such as the offending party\xe2\x80\x99s\nhistory, experience, and ability, the severity of the violation, the degree to which malice\nor bad faith contributed to the violation, the risk of chilling the type of litigation involved,\nand other factors as deemed appropriate in individual circumstances.\nIn this case, it is appropriate for the court to consider counsel\xe2\x80\x99s vast experience, the outrageous\nand scandalous nature of the claims made, and the improper purpose of the lawsuit. A court\nmight also increase a sanction if one attorney has been previously sanctioned, because such\nconduct might indicate that the previous sanction was not enough to deter the repetition of the\noffense.\nIn addition to the four factors just stated, a district court must sometimes consider whether joint\nand several liability is appropriate, such as where sanctions are to be imposed against both a\nclient and his counsel. In this case, joint and several liability among attorneys, who each signed\na complaint in violation of Rule 11, was not inappropriate. Each attorney has a duty to ensure\nthat the pleading he has signed comports with Rule 11. Issues of individual culpability do not\narise where each sanctioned party has committed the same Rule 11 violations.\nB. Additional Sanctions\nIn addition to imposing sanctions in the amount of attorney\'s fees claimed by the defendants,\nthe district court imposed sanctions in the amount of $10,000 upon each appellant based on his\nconduct in wilfully filing outrageous claims and appellants\xe2\x80\x99 \xe2\x80\x9cpains to publicize the allegations\nthrough the media.\xe2\x80\x9d We believe this sanction was error. Rule 11 does not confine courts to any\nmaximum monetary sanction, nor does it even require courts to restrict themselves to monetary\npenalties. However, Rule 11 must be accorded its plain meaning. The text of the Rule clearly\npertains only to a \xe2\x80\x9cpleading, motion, or other paper.\xe2\x80\x9d Rule 11 does not encompass all conduct\nwithin judicial proceedings, and it clearly does not reach conduct outside of the judicial process.\nIn this case, it appears the court imposed sanctions in part based on appellants\xe2\x80\x99 publication of\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c570\ntheir baseless claims through the media. While such publication may not be actionable as libel\nor slander, and is reprehensible, Rule 11 was clearly not designed to encompass such conduct.\nCONCLUSION\nIn sum, we affirm the findings of the district court which led to the imposition of Rule 11\nsanctions in this case against plaintiffs\xe2\x80\x99 attorneys. However, we vacate the sanction imposed,\nbecause it was based on improper considerations and the size of the sanction required the\ndistrict court to allow sanctioned counsel an opportunity to respond, at least to the fee\nstatements on which the sanction was based. On remand, the district court should consider the\nfactors which we have adopted prior to determining the sanction which should be imposed.\nQuestions:\n1. Do you agree with the district court\xe2\x80\x99s conclusion that Nakell, Pitts, and Kunstler violated\nRule 11? Do you find Kunstler\xe2\x80\x99s defense compelling?\n2. Should courts impose Rule 11 sanctions on attorneys representing clients pro bono?\nShould they be more reluctant to impose sanctions?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c571\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c572\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c573\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c574\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c575\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c576\n\nPro Se Litigants\nTypically, courts exempt pro se litigants from the requirements of Rule 11. While many pro se\ncomplaints are frivolous, some pro se complaints are meritorious, and some have even caused\ndramatic changes in the law. For example, in 1962, Clarence Earl Gideon filed a handwritten\npro se petition for certiorari alleging that Florida had violated his civil rights by denying him legal\nrepresentation. The Supreme Court granted his petition and held in Gideon v. Wainwright, 372\nU.S. 335 (1963) that the Sixth Amendment guarantees criminal defendants the right to\nrepresentation.\nBy contrast, Jonathan Lee Riches filed more than 2600 complaints while he was incarcerated at\nthe Federal Medical Center in Lexington, Kentucky, none of which were successful. His\ncomplaints alleged improbable harms and requested unusual forms of relief. For example,\nRiches filed a complaint alleging, inter alia, tort claims against Michael Vick for stealing his dogs\nand using them for dogfighting, then selling the dogs and using the proceeds to purchase\nmissiles from Iran. Among other things, Riches asked the court to order Vick \xe2\x80\x9cto stop physically\nhurting my feelings and dashing my hopes.\xe2\x80\x9d Eventually, the court prohibited Riches from filing\nany more complaints in forma pauperis, meaning that he would have to pay filing fees.\nQuestions:\n1. How should courts evaluate pro se filings?\n2. Should courts apply Rule 11 to pro se plaintiffs?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c577\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c578\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c579\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c580\n6.2: Improper Advocacy\nHere\xe2\x80\x99s the last toast of the evening, here\xe2\x80\x99s to those who still believe. All the losers will be\nwinners, all the givers shall receive. Here\xe2\x80\x99s to trouble-free tomorrows, may your sorrows all be\nsmall. Here\xe2\x80\x99s to the losers, bless them all.92\nThe head on my shoulders is sorta loose, and I ain\xe2\x80\x99t got the sense God gave a goose. Lord, I\nain\xe2\x80\x99t crazy, but I\'m a nut.93\nFederal Rule of Civil Procedure 11 prohibits frivolous pleadings. But Model Rule of Professional\nConduct 3.1 goes farther, prohibiting frivolous argument and abusive litigation tactics as well. In\nother words, under Rule 3.1, litigants must not only ensure that their pleadings are meritorious,\nbut also that their litigation tactics are reasonable. Unsurprisingly, this rule is enforced almost\nentirely in the breach. Courts are reluctant to sanction attorneys for improper tactics, and when\nthey do, the sanctions are often reversed as improperly imposed.\nNevertheless, good attorneys realize that the court is always watching. And they know that\njudges tend to reward good behavior and punish bad behavior. Sometimes, those rewards and\npunishments are explicit. But more often they are implicit, and come in the form of motions\ngranted or denied.\nModel Rule of Professional Conduct 3.1: Meritorious Claims & Contentions\nA lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless\nthere is a basis in law and fact for doing so that is not frivolous, which includes a good faith\nargument for an extension, modification or reversal of existing law. A lawyer for the defendant in\na criminal proceeding, or the respondent in a proceeding that could result in incarceration, may\nnevertheless so defend the proceeding as to require that every element of the case be\nestablished.\nModel Rule of Professional Conduct 3.1: Meritorious Claims & Contentions, Comments\n[1]-[3]\n1. The advocate has a duty to use legal procedure for the fullest benefit of the client\'s\ncause, but also a duty not to abuse legal procedure. The law, both procedural and\nsubstantive, establishes the limits within which an advocate may proceed. However, the\nlaw is not always clear and never is static. Accordingly, in determining the proper scope\nof advocacy, account must be taken of the law\'s ambiguities and potential for change.\n2. The filing of an action or defense or similar action taken for a client is not frivolous\nmerely because the facts have not first been fully substantiated or because the lawyer\n\n92\n93\n\nRobert Wells & Jack Segal, Here\xe2\x80\x99s to the Losers (1963).\nLeroy Pullins, I\xe2\x80\x99m a Nut (1966).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c581\nexpects to develop vital evidence only by discovery. What is required of lawyers,\nhowever, is that they inform themselves about the facts of their clients\' cases and the\napplicable law and determine that they can make good faith arguments in support of\ntheir clients\' positions. Such action is not frivolous even though the lawyer believes that\nthe client\'s position ultimately will not prevail. The action is frivolous, however, if the\nlawyer is unable either to make a good faith argument on the merits of the action taken\nor to support the action taken by a good faith argument for an extension, modification or\nreversal of existing law.\n3. The lawyer\'s obligations under this Rule are subordinate to federal or state constitutional\nlaw that entitles a defendant in a criminal matter to the assistance of counsel in\npresenting a claim or contention that otherwise would be prohibited by this Rule.\nModel Code of Professional Responsibility, Canon 7: A Lawyer Should Represent\na Client Zealously Within the Bounds of the Law (1969)\nEC 7-1 The duty of a lawyer, both to his client1 and to the legal system, is to represent his client\nzealously within the bounds of the law, which includes Disciplinary Rules and enforceable\nprofessional regulations. The professional responsibility of a lawyer derives from his\nmembership in a profession which has the duty of assisting members of the public to secure\nand protect available legal rights and benefits. In our government of laws and not of men, each\nmember of our society is entitled to have his conduct judged and regulated in accordance with\nthe law; to seek any lawful objective through legally permissible means; and to present for\nadjudication any lawful claim, issue, or defense.\nEC 7-2 The bounds of the law in a given case are often difficult to ascertain. The language of\nlegislative enactments and judicial opinions may be uncertain as applied to varying factual\nsituations. The limits and specific meaning of apparently relevant law may be made doubtful by\nchanging or developing constitutional interpretations, inadequately expressed statutes or judicial\nopinions, and changing public and judicial attitudes. Certainty of law ranges from well-settled\nrules through areas of conflicting authority to areas without precedent.\nEC 7-3 Where the bounds of law are uncertain, the action of a lawyer may depend on whether\nhe is serving as advocate or adviser. A lawyer may serve simultaneously as both advocate and\nadviser, but the two roles are essentially different. In asserting a position on behalf of his client,\nan advocate for the most part deals with past conduct and must take the facts as he finds them.\nBy contrast, a lawyer serving as adviser primarily assists his client in determining the course of\nfuture conduct and relationships. While serving as advocate, a lawyer should resolve in favor of\nhis client doubts as to the bounds of the law. In serving a client as adviser, a lawyer in\nappropriate circumstances should give his professional opinion as to what the ultimate decisions\nof the courts would likely be as to the applicable law.\nDuty of the Lawyer to a Client\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c582\nEC 7-4 The advocate may urge any permissible construction of the law favorable to his client,\nwithout regard to his professional opinion as to the likelihood that the construction will ultimately\nprevail. His conduct is within the bounds of the law, and therefore permissible, if the position\ntaken is supported by the law or is supportable by a good faith argument for an extension,\nmodification, or reversal of the law. However, a lawyer is not justified in asserting a position in\nlitigation that is frivolous.\nEC 7-5 A lawyer as adviser furthers the interest of his client by giving his professional opinion as\nto what he believes would likely be the ultimate decision of the courts on the matter at hand and\nby informing his client of the practical effect of such decision. He may continue in the\nrepresentation of his client even though his client has elected to pursue a course of conduct\ncontrary to the advice of the lawyer so long as he does not thereby knowingly assist the client to\nengage in illegal conduct or to take a frivolous legal position. A lawyer should never encourage\nor aid his client to commit criminal acts or counsel his client on how to violate the law and avoid\npunishment therefor.\nIn re Snyder, 472 U.S. 634 (1985)\nSummary: Snyder objected to the United States District Court for the District of North\nDakota\xe2\x80\x99s treatment of attorneys representing indigent criminal defendants, and refused\nto apologize for the tone of his objection. The Chief Judge of the district court suspended\nSnyder for one year for disrespecting the court and the circuit court affirmed. The\nSupreme Court reversed, holding that Snyder\xe2\x80\x99s conduct was not sanctionable.\nCHIEF JUSTICE BURGER delivered the opinion of the Court.\nWe granted certiorari to review the judgment of the Court of Appeals suspending petitioner from\npractice in all courts of the Eighth Circuit for six months.\nI\nIn March 1983, petitioner Robert Snyder was appointed by the Federal District Court for the\nDistrict of North Dakota to represent a defendant under the Criminal Justice Act. After petitioner\ncompleted the assignment, he submitted a claim for $1,898.55 for services and expenses. The\nclaim was reduced by the District Court of $1,796.05.\nUnder the Criminal Justice Act, the Chief Judge of the Court of Appeals was required to review\nand approve expenditures for compensation in excess of $1,000. Chief Judge Lay found the\nclaim insufficiently documented, and he returned it with a request for additional information.\nBecause of technical problems with his computer software, petitioner could not readily provide\nthe information in the form requested by the Chief Judge. He did, however, file a supplemental\napplication.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c583\nThe secretary of the Chief Judge of the Circuit again returned the application, stating that the\nproffered documentation was unacceptable. Petitioner then discussed the matter with Helen\nMonteith, the District Court Judge\xe2\x80\x99s secretary, who suggested he write a letter expressing his\nview. Petitioner then wrote the letter that led to this case. The letter, addressed to Ms. Monteith,\nread in part:\nIn the first place, I am appalled by the amount of money which the federal court pays for\nindigent criminal defense work. The reason that so few attorneys in Bismarck accept this\nwork is for that exact reason. We have, up to this point, still accepted the indigent\nappointments, because of a duty to our profession, and the fact that nobody else will do\nit.\nNow, however, not only are we paid an amount of money which does not even cover our\noverhead, but we have to go through extreme gymnastics even to receive the puny\namounts which the federal courts authorize for this work. We have sent you everything\nwe have concerning our representation, and I am not sending you anything else. You\ncan take it or leave it.\nFurther, I am extremely disgusted by the treatment of us by the Eighth Circuit in this\ncase, and you are instructed to remove my name from the list of attorneys who will\naccept criminal indigent defense work. I have simply had it.\nThank you for your time and attention.\nThe District Court Judge viewed this letter as one seeking changes in the process for providing\nfees, and discussed these concerns with petitioner. The District Court Judge then forwarded the\nletter to the Chief Judge of the Circuit. The Chief Judge in turn wrote to the District Judge,\nstating that he considered petitioner\xe2\x80\x99s letter:\ntotally disrespectful to the federal courts and to the judicial system. It demonstrates a\ntotal lack of respect for the legal process and the courts.\nThe Chief Judge expressed concern both about petitioner\xe2\x80\x99s failure to \xe2\x80\x9cfollow the guidelines and\nrefusal to cooperate with the court,\xe2\x80\x9d and questioned whether, \xe2\x80\x9cin view of the letter\xe2\x80\x9d petitioner\nwas \xe2\x80\x9cworthy of practicing law in the federal courts on any matter.\xe2\x80\x9d He stated his intention to\nissue an order to show cause why petitioner should not be suspended from practicing in any\nfederal court in the Circuit for a period of one year. Subsequently, the Chief Judge wrote to the\nDistrict Court again, stating that if petitioner apologized the matter would be dropped. At this\ntime, the Chief Judge approved a reduced fee for petitioner\xe2\x80\x99s work of $1,000 plus expenses of\n$23.25.\nAfter talking with petitioner, the District Court Judge responded to the Chief Judge as follows:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c584\nHe sees his letter as an expression of an honest opinion, and an exercise of his right of\nfreedom of speech. I, of course, see it as a youthful and exuberant expression of\nannoyance which has now risen to the level of a cause.\nHe has decided not to apologize, although he assured me he did not intend the letter as\nyou interpreted it.\nThe Chief Judge then issued an order for petitioner to show cause why he should not be\nsuspended for his \xe2\x80\x9crefusal to carry out his obligations as a practicing lawyer and officer of the\ncourt\xe2\x80\x9d because of his refusal to accept assignments under the Criminal Justice Act. Nowhere in\nthe order was there any reference to any disrespect in petitioner\xe2\x80\x99s letter of October 6, 1983.\nPetitioner requested a hearing on the show cause order. In his response to the order, petitioner\nfocused exclusively on whether he was required to represent indigents under the Criminal\nJustice Act. He contended that the Act did not compel lawyers to represent indigents, and he\nnoted that many of the lawyers in his District had declined to serve. He also informed the court\nthat prior to his withdrawal from the Criminal Justice Act panel, he and his two partners had\ntaken 15 percent of all the Criminal Justice Act cases in their district.\nAt the hearing, the Court of Appeals focused on whether petitioner\xe2\x80\x99s letter of October 6, 1983,\nwas disrespectful, an issue not mentioned in the show cause order. At one point, Judge Arnold\nasked: \xe2\x80\x9cI am asking you, sir, if you are prepared to apologize to the court for the tone of your\nletter?\xe2\x80\x9d Petitioner answered: \xe2\x80\x9cThat is not the basis that I am being brought forth before the court\ntoday.\xe2\x80\x9d When the issue again arose, petitioner protested: \xe2\x80\x9cBut, it seems to me we\xe2\x80\x99re getting far\nafield here. The question is, can I be suspended from this court for my request to be removed\nfrom the panel of attorneys.\xe2\x80\x9d\nPetitioner was again offered an opportunity to apologize for his letter, but he declined. At the\nconclusion of the hearing, the Chief Judge stated:\nI want to make it clear to Mr. Snyder what it is the court is allowing you ten days lapse\nhere, a period for you to consider. One is, that, assuming there is a general requirement\nfor all competent lawyers to do pro bono work that you stand willing and ready to\nperform such work and will comply with the guidelines of the statute. And secondly, to\nreconsider your position as Judge Arnold has requested, concerning the tone of your\nletter of October 6.\nFollowing the hearing, petitioner wrote a letter to the court, agreeing to \xe2\x80\x9centhusiastically obey\nthe mandates\xe2\x80\x9d of any new plan for the implementation of the Criminal Justice Act in North\nDakota, and to \xe2\x80\x9cmake every good faith effort possible\xe2\x80\x9d to comply with the court\xe2\x80\x99s guidelines\nregarding compensation under the Act. Petitioner\xe2\x80\x99s letter, however, made no mention of the\nOctober 6, 1983, letter.\nThe Chief Judge then wrote to Snyder, stating among other things:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c585\n\nThe court expressed its opinion at the time of the oral hearing that interrelated with our\nconcern and the issuance of the order to show cause was the disrespect that you\ndisplayed to the court by way of your letter addressed to Helen Montieth, Judge Van\nSickle\xe2\x80\x99s secretary, of October 6, 1983. The court expressly asked if you would be willing\nto apologize for the tone of the letter and the disrespect displayed. You serve as an\nofficer of the court and, as such, the Canons of Ethics require every lawyer to maintain a\nrespect for the court as an institution.\nBefore circulating your letter of February 23, I would appreciate your response to Judge\nArnold\xe2\x80\x99s specific request, and the court\xe2\x80\x99s request, for you to apologize for the letter that\nyou wrote.\nPlease let me hear from you by return mail. I am confident that if such a letter is\nforthcoming that the court will dissolve the order.\nPetitioner responded to the Chief Judge:\nI cannot, and will never, in justice to my conscience, apologize for what I consider to be\ntelling the truth, albeit in harsh terms.\nIt is unfortunate that the respective positions in the proceeding have so hardened.\nHowever, I consider this to be a matter of principle, and if one stands on a principle, one\nmust be willing to accept the consequences.\nAfter receipt of this letter, petitioner was suspended from the practice of law in the federal courts\nin the Eighth Circuit for six months. The opinion stated that petitioner \xe2\x80\x9ccontumaciously refused to\nretract his previous remarks or apologize to the court.\xe2\x80\x9d It continued:\nPetitioner\xe2\x80\x99s refusal to show continuing respect for the court and his refusal to\ndemonstrate a sincere retraction of his admittedly \xe2\x80\x9charsh\xe2\x80\x9d statements are sufficient to\ndemonstrate to this court that he is not presently fit to practice law in the federal courts.\nAll courts depend on the highest level of integrity and respect not only from the judiciary\nbut from the lawyers who serve in the court as well. Without public display of respect for\nthe judicial branch of government as an institution by lawyers, the law cannot survive.\nWithout hesitation we find Snyder\xe2\x80\x99s disrespectful statements as to this court\xe2\x80\x99s\nadministration of CJA contumacious conduct. We deem this unfortunate.\nWe find that Robert Snyder shall be suspended from the practice of law in the federal\ncourts of the Eighth Circuit for a period of six months; thereafter, Snyder should make\napplication to both this court and the federal district court of North Dakota to be\nreadmitted.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c586\nThe opinion specifically stated that petitioner\xe2\x80\x99s offer to serve in Criminal Justice Act cases in the\nfuture if the panel was equitably structured had \xe2\x80\x9cconsiderable merit.\xe2\x80\x9d\nPetitioner moved for rehearing en banc. In support of his motion, he presented an affidavit from\nthe District Judge\xe2\x80\x99s secretary \xe2\x80\x94 the addressee of the October 6 letter \xe2\x80\x94 stating that she had\nencouraged him to send the letter. He also submitted an affidavit from the District Judge, which\nread in part:\nI did not view the letter as one of disrespect for the Court, but rather one of somewhat\nfrustrated lawyer hoping that his comments might be viewed as a basis for some\nchanges in the process.\nMr. Snyder has appeared before me on a number of occasions and has always\ncompetently represented his client, and has shown the highest respect to the court\nsystem and to me.\nThe petition for rehearing en banc was denied. An opinion for the en banc court stated:\nThe gravamen of the situation is that Snyder in his letter of October 6, 1983 became\nharsh and disrespectful to the Court. It is one thing for a lawyer to complain factually to\nthe Court, it is another for counsel to be disrespectful in doing so.\nSnyder states that his letter is not disrespectful. We disagree. In our view, the letter\nspeaks for itself.\nThe en banc court opinion stayed the order of suspension for 10 days, but provided that the stay\nwould be lifted if petitioner failed to apologize. He did not apologize, and the order of suspension\ntook effect.\nWe granted certiorari. We reverse.\nII\nA\nPetitioner challenges his suspension from practice on the grounds (a) that his October 6, 1983,\nletter to the District Judge\'s secretary was protected by the First Amendment, (b) that he was\ndenied due process with respect to the notice of the charge on which he was suspended, and\n(c) that his challenged letter was not disrespectful or contemptuous. We avoid constitutional\nissues when resolution of such issues is not necessary for disposition of a case. Accordingly,\nwe consider first whether petitioner\xe2\x80\x99s conduct and expressions warranted his suspension from\npractice; if they did not, there is no occasion to reach petitioner\xe2\x80\x99s constitutional claims.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c587\nCourts have long recognized an inherent authority to suspend or disbar lawyers. This inherent\npower derives from the lawyer\xe2\x80\x99s role as an officer of the court which granted admission. The\nstandard for disciplining attorneys practicing before the courts of appeals is set forth in Federal\nRule of Appellate Procedure 46:\n(b) Suspension or Disbarment. When it is shown to the court that any member of its bar\nhas been suspended or disbarred from practice in any other court of record, or has been\nguilty of conduct unbecoming a member of the bar of the court, he will be subject to\nsuspension or disbarment by the court. The member shall be afforded an opportunity to\nshow good cause, within such time as the court shall prescribe, why he should not be\nsuspended or disbarred. Upon his response to the rule to show cause, and after hearing,\nif requested, or upon expiration of the time prescribed for a response if no response is\nmade, the court shall enter an appropriate order.\nThe phrase \xe2\x80\x9cconduct unbecoming a member of the bar\xe2\x80\x9d must be read in light of the \xe2\x80\x9ccomplex\ncode of behavior\xe2\x80\x9d to which attorneys are subject. Essentially, this reflects the burdens inherent\nin the attorney\'s dual obligations to clients and to the system of justice. Justice Cardozo once\nobserved:\nMembership in the bar is a privilege burdened with conditions. An attorney is received\ninto that ancient fellowship for something more than private gain. He becomes an officer\nof the court, and, like the court itself, an instrument or agency to advance the ends of\njustice.\nAs an officer of the court, a member of the bar enjoys singular powers that others do not\npossess; by virtue of admission, members of the bar share a kind of monopoly granted only to\nlawyers. Admission creates a license not only to advise and counsel clients but also to appear in\ncourt and try cases; as an officer of the court, a lawyer can cause persons to drop their private\naffairs and be called as witnesses in court, and for depositions and other pretrial processes that,\nwhile subject to the ultimate control of the court, may be conducted outside courtrooms. The\nlicense granted by the court requires members of the bar to conduct themselves in a manner\ncompatible with the role of courts in the administration of justice.\nRead in light of the traditional duties imposed on an attorney, it is clear that \xe2\x80\x9cconduct\nunbecoming a member of the bar\xe2\x80\x9d is conduct contrary to professional standards that shows an\nunfitness to discharge continuing obligations to clients or the courts, or conduct inimical to the\nadministration of justice. More specific guidance is provided by case law, applicable court rules,\nand \xe2\x80\x9cthe lore of the profession,\xe2\x80\x9d as embodied in codes of professional conduct.\nB\nApparently relying on an attorney\xe2\x80\x99s obligation to avoid conduct that is \xe2\x80\x9cprejudicial to the\nadministration of justice,\xe2\x80\x9d the Court of Appeals held that the letter of October 6, 1983, and an\nunspecified \xe2\x80\x9crefusal to show continuing respect for the court\xe2\x80\x9d demonstrated that petitioner was\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c588\n\xe2\x80\x9cnot presently fit to practice law in the federal courts.\xe2\x80\x9d Its holding was predicated on a specific\nfinding that petitioner\xe2\x80\x99s \xe2\x80\x9cdisrespectful statements in his letter of October 6, 1983 as to this\ncourt\'s administration of the CJA constituted contumacious conduct.\xe2\x80\x9d\nWe must examine the record in light of Rule 46 to determine whether the Court of Appeals\xe2\x80\x99\naction is supported by the evidence. In the letter, petitioner declined to submit further\ndocumentation in support of his fee request, refused to accept further assignments under the\nCriminal Justice Act, and criticized the administration of the Act. Petitioner\xe2\x80\x99s refusal to submit\nfurther documentation in support of his fee request could afford a basis for declining to award a\nfee; however, the submission of adequate documentation was only a prerequisite to the\ncollection of his fee, not an affirmative obligation required by his duties to a client or the court.\nNor, as the Court of Appeals ultimately concluded, was petitioner legally obligated under the\nterms of the local plan to accept Criminal Justice Act cases.\nWe do not consider a lawyer\xe2\x80\x99s criticism of the administration of the Act or criticism of inequities\nin assignments under the Act as cause for discipline or suspension. The letter was addressed to\na court employee charged with administrative responsibilities, and concerned a practical matter\nin the administration of the Act. The Court of Appeals acknowledged that petitioner brought to\nlight concerns about the administration of the plan that had \xe2\x80\x9cmerit,\xe2\x80\x9d and the court instituted a\nstudy of the administration of the Criminal Justice Act as a result of petitioner\xe2\x80\x99s complaint.\nOfficers of the court may appropriately express criticism on such matters.\nThe record indicates the Court of Appeals was concerned about the tone of the letter; petitioner\nconcedes that the tone of his letter was \xe2\x80\x9charsh,\xe2\x80\x9d and, indeed it can be read as illmannered. All\npersons involved in the judicial process \xe2\x80\x94 judges, litigants, witnesses, and court officers \xe2\x80\x94 owe\na duty of courtesy to all other participants. The necessity for civility in the inherently contentious\nsetting of the adversary process suggests that members of the bar cast criticisms of the system\nin a professional and civil tone. However, even assuming that the letter exhibited an\nunlawyerlike rudeness, a single incident of rudeness or lack of professional courtesy \xe2\x80\x94 in this\ncontext \xe2\x80\x94 does not support a finding of contemptuous or contumacious conduct, or a finding\nthat a lawyer is \xe2\x80\x9cnot presently fit to practice law in the federal courts.\xe2\x80\x9d Nor does it rise to the level\nof \xe2\x80\x9cconduct unbecoming a member of the bar\xe2\x80\x9d warranting suspension from practice.\nQuestions:\n1. Why did the district court sanction Snyder? Why did the circuit court affirm? And why did\nthe Supreme Court reverse?\n2. When should courts be able to sanction attorneys for disrespectful behavior? When\nshould the discretion of the court be limited?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c589\n\nGadda v. Ashcroft, 377 F. 3d 934 (9th Cir. 2004)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c590\nSummary: The California Bar disbarred Gadda for incompetence, based on his failure to\nprovide competent legal representation to clients in immigration court. The Ninth Circuit\nalso disbarred Gadda, based on the California Bar\xe2\x80\x99s decision. Gadda objected to his\ndisbarment by the 9th Circuit, arguing that the California Bar lacked authority to\ndiscipline him for incompetent representation in immigration court. The 9th Circuit\ndisagreed, holding that both the California Bar and the 9th Circuit had the authority to\ndiscipline him.\nBEEZER, Circuit Judge.\nOn July 30, 2001, the California State Bar Court found that Miguel Gadda, Esq. repeatedly\nfailed to perform legal services competently. It placed Gadda on involuntary inactive status and\nrecommended that Gadda be disbarred.\nThis opinion and order relate to two federal proceedings resulting from the State Bar Court\xe2\x80\x99s\nrecommendation. In the first, Gadda appeals an order of the United States District Court for the\nNorthern District of California, which denies Gadda\'s motion to preliminarily enjoin the Board of\nImmigration Appeals decision to suspend him from practice based on his suspension by the\nState Bar Court. Gadda asserts that the State Bar Court cannot affect his right to practice before\nthe BIA. The other proceeding is a disciplinary action initiated by this court after we received\nnotice of Gadda\xe2\x80\x99s suspension from practice by the State Bar Court.\nGadda argues that any reciprocal discipline imposed by the BIA or by this court based on the\nState Bar Court\xe2\x80\x99s suspension order is invalid because the Supreme Court of California lacked\njurisdiction to discipline him. He claims that federal law preempts the states\xe2\x80\x99 authority to regulate\nattorneys, like him, who practice only in the administration of immigration law and in the federal\ncourts, but not in the state courts. Because both of these proceedings involve the same\nunderlying preemption issue, we consolidate them for opinion purposes only.\nWe conclude that federal law does not preempt the Supreme Court of California\xe2\x80\x99s authority to\nsuspend or disbar attorneys admitted to practice in California state courts. The Supreme Court\nof California\xe2\x80\x99s discipline orders may serve as the basis for reciprocal disbarment actions by both\nthe BIA and this court.\nWe disbar Gadda from the practice of law before the United States Court of Appeals for the\nNinth Circuit.\nI\nGadda was admitted to the California State Bar in 1975. Thereafter, he was admitted to practice\nlaw and became a member of the bar of the United States District Court for the Northern District\nof California, the United States Court of Appeals for the Ninth Circuit, and the Supreme Court of\nthe United States. He was also admitted to practice before the Board of Immigration Appeals\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c591\nand was authorized to appear for clients before the BIA and in all Immigration Courts throughout\nthe United States.\nA. California State Court Disciplinary Proceedings\nOn August 26, 2002, the Review Department of the California State Bar Court affirmed the State\nBar Court\xe2\x80\x99s decision recommending Gadda\'s disbarment and placing him on involuntary inactive\nstatus. On January 22, 2003, the Supreme Court of California ordered that Gadda be disbarred\nfrom the practice of law in California, effective February 21, 2003.\nThe Review Department\xe2\x80\x99s opinion surveyed Gadda\'s history of federal immigration practice,\nconcluding that \xe2\x80\x9cdisbarment is warranted under the circumstances for the protection of the\npublic, the courts, and the legal profession.\xe2\x80\x9d The Review Department cited seventeen acts of\nmisconduct extending over six years and involving eight federal immigration client matters and\none client trust account matter. This misconduct included Gadda\xe2\x80\x99s failure to appear at\nscheduled court conferences and to keep clients apprised of the proceedings and relevant court\ndates. Five of Gadda\'s clients were ordered deported in absentia and at least six courts found\nGadda to have provided ineffective assistance. The Review Department concluded that Gadda\nfailed \xe2\x80\x9cto perform legal services competently, demonstrated indifference toward rectification of\nor atonement for the consequences of his misconduct, and significantly harmed clients.\xe2\x80\x9d The\nReview Department determined that aggravating factors, including prior discipline for similar\nmisconduct in 1990, outweighed any mitigating factors Gadda presented.\nWe incorporate by reference that portion of the Review Board\xe2\x80\x99s opinion which inventories\nGadda\xe2\x80\x99s incompetence between 1994 and 1999. Of the eight federal immigration client matters\nwhich the Review Board describes, that of the Saba family is especially egregious.\nThe four minor Saba children applied for political asylum. After the INS denied their application,\nthe children retained Gadda to represent them. Gadda advised the children to withdraw their\nasylum claim; the Immigration Judge ordered that they voluntarily depart from the United States.\nThereafter, the children\xe2\x80\x99s parents became naturalized citizens. The children were eligible for\npriority consideration of their application for adjustment of status to legal residency or citizenship\nbased on their parents\xe2\x80\x99 naturalization. However, as a result of Gadda\xe2\x80\x99s neglect and\nincompetence, the children were deprived of an adjustment of their immigration status, and\nultimately were placed in deportation proceedings.\nGadda moved for a stay of the children\xe2\x80\x99s deportation. In the course of a hearing on that motion,\nGadda left the Saba family unrepresented before an immigration officer. Gadda also directed\nthe children to sign a statement promising they would voluntarily depart once the stay expired.\nThe immigration court granted the stay but the children did not depart as promised. Gadda\nassured the children that he was appealing the earlier BIA decision.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c592\nBecause Gadda negligently allowed the time for an appeal from the BIA to this court to lapse,\nhe was forced to seek habeas corpus relief before the district court. Gadda directed William\nGardner, an attorney Gadda employed on a contract basis but did not supervise, to file the\nhabeas petition. Before Gardner filed the habeas petition, the IJ ordered the Saba children to be\ndeported on account of their refusal to depart voluntarily at the expiration of the stay. Gadda\nonce again advised the children not to comply with the court\'s order.\nGardner subsequently filed the habeas petition and the district court ordered a hearing. The\ndistrict court made a sua sponte finding of ineffective assistance by Gadda and remanded the\nmatter to the immigration court to reopen the deportation hearing. By the time the case was\nheard, two of the Saba children were no longer minors. Gadda has not refunded the $3,000 the\nSaba children paid him.\nRegarding the Saba matter, the Review Department agreed with the State Bar that Gadda\n\xe2\x80\x9crecklessly and repeatedly failed to perform legal services\xe2\x80\x9d and \xe2\x80\x9cfailed to refund unearned fees\npromptly upon termination.\xe2\x80\x9d Specifically, the Review Department found Gadda\xe2\x80\x99s performance\nincompetent in the following ways:\n(1) by leaving the children alone, unrepresented, in the middle of a hearing before an\nimmigration officer and advising them to sign a voluntary departure form; (2) by failing to\nadvise the Saba children to depart on or before the deadline; (2) by failing to timely\nmove to reopen deportation proceedings; (4) by failing to file a petition for review with\nthe Ninth Circuit; (5) by failing to file for adjustment of status after Mrs. Saba became a\nnaturalized citizen and instead filing for adjustment of status on the children\xe2\x80\x99s last day to\ndepart voluntarily, approximately three months later; and (6) by failing to supervise\nGardner in filing a petition for writ of habeas corpus.\nB. Gadda v. Ashcroft \xe2\x80\x94 appeal from BIA disciplinary proceedings\nBased on the State Bar Court\'s order, on October 2, 2001, the BIA suspended Gadda from\npractice before the BIA, the Immigration Courts, and the Department of Homeland Security.\nGadda unsuccessfully sought a preliminary injunction of the BIA\xe2\x80\x99s action in the district court.\nGadda appealed the denial of the preliminary injunction to this court. We deferred submission\npending the outcome of disciplinary proceedings before the BIA.\nMeanwhile, the Office of General Counsel for the Executive Office for Immigration Review\ninitiated disciplinary proceedings and an adjudicatory official suspended Gadda indefinitely from\npractice on August 22, 2002. On July 8, 2003, the BIA dismissed Gadda\xe2\x80\x99s appeal and ordered\nhim expelled from practice before the BIA, the Immigration Courts, and the DHS.\nC. Ninth Circuit Disciplinary Proceedings\nOn May 29, 2002, we ordered Gadda to resign from the Ninth Circuit\xe2\x80\x99s bar or show cause why\nhe should not be suspended or disbarred based on the California State Bar Court\xe2\x80\x99s order\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c593\nplacing him on involuntary inactive status and recommending that he be disbarred. Gadda\nresponded and we referred the case to the Appellate Commissioner. On September 25, 2002,\nthe Appellate Commissioner stayed the disciplinary proceedings pending a decision by the\nSupreme Court of California on the State Bar Court\xe2\x80\x99s recommendation or a decision by us.\nFollowing the Supreme Court of California\xe2\x80\x99s January 22, 2003 order disbarring Gadda, the\nAppellate Commissioner again ordered Gadda to resign from the bar of the United States Court\nof Appeals for the Ninth Circuit or show cause why he should not be suspended or disbarred.\nGadda requested a stay, claiming that the Supreme Court of California\xe2\x80\x99s disbarment order was\nnot final and that we should first resolve Gadda v. Ashcroft.\nThe Appellate Commissioner conducted a hearing on March 27, 2003 and filed a report and\nrecommendation on May 22, 2003. The Appellate Commissioner recommends that Gadda be\ndisbarred from the practice of law before the United States Court of Appeals for the Ninth\nCircuit.\nII\n\xe2\x80\x9cMembership in the bar is a privilege burdened with conditions. An attorney is received into that\nancient fellowship for something more than private gain. He becomes an officer of the court,\nand, like the court itself, an instrument or agency to advance the ends of justice.\xe2\x80\x9d We have both\nstatutory and inherent power to suspend or disbar an attorney who has been admitted to this\ncourt\xe2\x80\x99s bar.\nFederal Rule of Appellate Procedure 46 regulates attorney conduct, including admission to the\nbar of the Ninth Circuit and the conditions for suspension and disbarment. FRAP 46 provides\nthat a member of this court\'s bar is subject to suspension or disbarment if the member either (1)\n\xe2\x80\x9chas been suspended or disbarred from practice in any other court\xe2\x80\x9d; or (2) \xe2\x80\x9cis guilty of conduct\nunbecoming a member of the court\'s bar.\xe2\x80\x9d\nA. Reciprocal Discipline\nIn this case, Gadda\xe2\x80\x99s suspension and disbarment from the practice of law in California forms the\nbasis for his disbarment from the BIA and this court.\nB. Conduct Unbecoming\nEven if the California courts had not acted to disbar Gadda, we have independent authority to\nsuspend or disbar him from practice. Conduct unbecoming a member of the bar of the Ninth\nCircuit is sufficient cause for disbarment. Unlike some of our sister circuits, the Ninth Circuit has\nnot adopted local rules elaborating on FRAP 46\xe2\x80\x99s \xe2\x80\x9cconduct unbecoming\xe2\x80\x9d standard. The\nSupreme Court has held that \xe2\x80\x9cconduct unbecoming\xe2\x80\x9d is conduct \xe2\x80\x9ccontrary to professional\nstandards that show an unfitness to discharge continuing obligations to clients or courts, or\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c594\nconduct inimical to the administration of justice.\xe2\x80\x9d We have consistently found conduct\nunbecoming where an attorney failed to prosecute an appeal with due diligence.\nBecause we have jurisdiction over appeals from the immigration courts, the quality of the\npractice by attorneys appearing before the immigration courts is crucial to our ability to\nadminister justice and function effectively. The quality of our review is heavily dependent on the\nrecord established in administrative immigration hearings, which in turn is dependent on the\ncompetence of the attorneys creating that record. Gadda\xe2\x80\x99s incompetence impedes our\noperations and endangers the rights of his clients.\nIn the course of one immigration matter, for example, Gadda neglected to introduce crucial\ndocuments relating to changed country conditions. Although his client was in possession of\nsuch documents, Gadda failed to have the documents translated and offered as evidence. In\nthat same matter, the Review Department found that Gadda failed to elicit persuasive testimony\nin support of his client\'s contention of fear of future persecution. Gadda currently represents\npetitioners in approximately 50 matters pending before this court. We hold that conduct such as\nhis before the immigration courts is sufficient to constitute "conduct unbecoming" a member of\nthe bar of this court.\nC. Inherent Power\nWe hold that we also have inherent authority respecting the suspension and disbarment of\nattorneys who perform incompetently in federal immigration proceedings. This power derives\nfrom an attorney\xe2\x80\x99s role as an officer of the court which granted the attorney admission to the\nbar; it is necessary to maintain the respectability and harmony of the bar, as well as to protect\nthe public. We exercise this power with restraint and discretion.\n\xe2\x80\x9cThe behavior for which an attorney is disciplined pursuant to our inherent power must have\nsome nexus with the conduct of the litigation before the court.\xe2\x80\x9d Such a connection exists in the\ncontext of immigration proceedings because, as noted above, we have jurisdiction over appeals\nfrom the immigration courts and rely on the records established in those courts.\nIII\nIt is ORDERED that Miguel Gadda, Esq. should be and hereby is disbarred from the practice of\nlaw before the United States Court of Appeals for the Ninth Circuit and his name shall be\nstricken from the roll of attorneys.\nQuestions:\n1. When should the courts discipline attorneys like Gadda? What kind of discipline should\nthey impose?\n2. Why was Gadda disbarred? Is it possible that he provided some of his clients with\ncompetent representation?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c595\n\nAvista Management vs. Wausau Underwriters Insurance Co. (M.D. Fl. 2006)\nThis matter comes before the Court on Plaintiff\'s Motion to designate location of a Rule 30(b)(6)\ndeposition. Upon consideration of the Motion \xc3\xb1 the latest in a series of Gordian knots that the\nparties have been unable to untangle without enlisting the assistance of the federal courts \xc3\xb1 it is\nORDERED that said Motion is DENIED. Instead, the Court will fashion a new form of alternative\ndispute resolution, to wit: at 4:00 P.M. on Friday, June 30, 2006, counsel shall convene at a\nneutral site agreeable to both parties. If counsel cannot agree on a neutral site, they shall meet\non the front steps of the Sam M. Gibbons U.S. Courthouse, 801 North Florida Ave., Tampa,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c596\nFlorida 33602. Each lawyer shall be entitled to be accompanied by one paralegal who shall act\nas an attendant and witness. At that time and location, counsel shall engage in one (1) game of\n\xe2\x80\x9crock, paper, scissors.\xe2\x80\x9d The winner of this engagement shall be entitled to select the location for\nthe 30(b)(6) deposition to be held somewhere in Hillsborough County during the period July 1112, 2006. If either party disputes the outcome of this engagement, an appeal may be filed and a\nhearing will be held at 8:30 A.M. on Friday, July 7, 2006 before the undersigned in Courtroom 3,\nGeorge C. Young United States Courthouse and Federal Building, 80 North Hughey Avenue,\nOrlando, Florida 32801.\nJan Pudlow, \xe2\x80\x98Rock, paper, scissors\xe2\x80\x99 order garners worldwide attention, Florida Bar News\n(July 1, 2006)\nDutifully following a playful, but pointed, federal court order, Tampa lawyers David Pettinato, of\nthe Merlin Law Group, and D. Lee Craig, of Butler Pappas, will meet June 20 and engage in one\ngame of \xe2\x80\x9crock, paper, scissors\xe2\x80\x9d to solve a dispute in the midst of heated litigation.\n\xe2\x80\x9cWe will do it quickly, humbly, and go on about our business,\xe2\x80\x9d said a contrite Pettinato, who is\namazed about \xe2\x80\x9cgetting bombarded from news media from all over the country.\xe2\x80\x9d\nCNN, ABC, The Wall Street Journal, and The New York Times, to name a few.\nMake that international news, as London\xe2\x80\x99s The Guardian also did its version of the everybody\xe2\x80\x99stalking-about-it June 6 order issued by U.S. Middle District Judge Gregory Presnell, who was a\nmember of The Florida Bar Board of Governors from 1989-93.\nAt issue was the childlike squabbling between the attorneys in Avista Management, Inc., vs.\nWausau Underwriters Insurance Co., in litigation over an insurance settlement stemming from\n2004\xe2\x80\x99s Hurricane Charley.\nEven though the sparring lawyers\xe2\x80\x99 offices are only four floors apart in the same building at 777\nS. Harbor Island Blvd. in Tampa, they could not agree on where to hold a deposition. Craig,\nrepresenting Wausau, wanted to question a witness in his office. Pettinato, representing Avista,\nwas not willing to let Craig have the home-court advantage, and insisted on a neutral setting of\na court reporter\xe2\x80\x99s office down the street.\nWhen they took the matter to the court, Presnell let them have it, fed up with \xe2\x80\x9cthe latest series of\nGordian knots that the parties have been unable to untangle without enlisting the assistance of\nthe federal courts.\xe2\x80\x9d\nIn what the judge called \xe2\x80\x9ca new form of alternative dispute resolution,\xe2\x80\x9d Presnell ordered that\neach attorney will be \xe2\x80\x9caccompanied by one paralegal who shall act as an attendant and\nwitness,\xe2\x80\x9d and \xe2\x80\x9cthe winner of this engagement shall be entitled to select the location for the\n30(b)(6) deposition to be held somewhere in Hillsborough County during the period July 11-12,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c597\n2006. If either party disputes the outcome of this engagement, an appeal may be filed and a\nhearing will be held at 8:30 a.m. on Friday, July 7, before the undersigned in Courtroom 3.\xe2\x80\x9d\nThat creative order compelled St. Petersburg Times columnist Sue Carlton to nominate Presnell\nfor \xe2\x80\x9cJurist of the Year.\xe2\x80\x9d\nNO NEED FOR AN APPEAL\nOn June 8, Pettinato said that he and Craig have resolved the issue. Pettinato said both sides\nagreed to play rock, paper, scissors, at \xe2\x80\x9can undisclosed location.\xe2\x80\x9d Whoever wins will get to hold\nthe deposition in his office.\n\xe2\x80\x9cWe want to do it out of respect for the judge\xe2\x80\x99s order,\xe2\x80\x9d said Pettinato, who added, \xe2\x80\x9cI have to say I\nam a little disappointed that we couldn\xe2\x80\x99t resolve our differences without this court order. But it\nprovided us with an eye-opener to resolve our differences in a more amicable way. Since the\nhurricanes, we have been having huge battles trying to get insurance companies to pay.. . . If\nyou get a little too passionate advocating for your client, it helps to rethink your strategy.\xe2\x80\x9d\nThe matter has been zinging across the state, around the country, and across the ocean, on\nnews Web sites, lawyers\xe2\x80\x99 e-mails, and law blogs.\nOrlando lawyer Lynn James Hinson, who called Presnell an excellent lawyer and judge, posted\nthis comment on The Wall Street Journal\xe2\x80\x99s Law Blog: \xe2\x80\x9cMany lawyers act like they are in\nkindergarten, and this order treats them appropriately.\xe2\x80\x9d\nCraig, who did not return the News \xe2\x80\x99 request for an interview, may be at a disadvantage.\nPettinato has a kindergartner in the house, as the father of a 5-year-old and 9-year-old.\n\xe2\x80\x9cI play it all the time with them. I can\xe2\x80\x99t say I\xe2\x80\x99m an expert, but I know the rules,\xe2\x80\x9d Pettinato said.\n\xe2\x80\x9cNow, my 5-year-old keeps throwing her hand out, saying, \xe2\x80\x98Dad, let\xe2\x80\x99s practice.\xe2\x80\x99\xe2\x80\x9d\nPettinato said his kids have advised him to open with rock, which he thought was apropos\n\xe2\x80\x9cbecause my case is solid as a rock.\xe2\x80\x9d\nBut Matti Leshem, co-commissioner of the USA Rock Paper Scissors League, told The New\nYork Times, \xe2\x80\x9cI guarantee you right now that both lawyers will open with paper. Lawyers open\nwith paper 67 percent of the time, because they deal with so much paper.\xe2\x80\x9d\nLeshem agreed to officiate, saying, \xe2\x80\x9cWhat I don\xe2\x80\x99t want is some rogue element of rock-paperscissors coming down from the bench. When the law takes rock-paper-scissors into its own\nhands, mayhem can occur.\xe2\x80\x9d\nWhile Pettinato said he has greatest respect for the judge and \xe2\x80\x9cgot the message,\xe2\x80\x9d he is willing to\nlaugh at himself, \xe2\x80\x9cor else I\xe2\x80\x99ll grow despondent.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c598\n\nTaking it somewhat seriously is the World Rock Paper Scissors Society.\n\xe2\x80\x9cThis is a landmark case of how RPS should be used to keep the wheels of justice moving\nforward when dealing with lawyer engaging in posturing tactics,\xe2\x80\x9d Doug Walker, managing\ndirector of the World RPS Society, told the News.\n\xe2\x80\x9cAlthough we take issue with RPS being labeled as a \xe2\x80\x98new\xe2\x80\x99 form of dispute resolution, we\nunderstand it is not commonly used in courtrooms and applaud Judge Presnell\xe2\x80\x99s wisdom in the\nmatter.\xe2\x80\x9d\nNoting that Rock, Paper, Scissors dates back to at least the 18th century in Japan, it was used\nto settle an auction-house dispute in April when \xe2\x80\x9can $18 million art portfolio was acquired by\nChristie\xe2\x80\x99s due to a cleverly executed throw of paper,\xe2\x80\x9d over Sotheby\xe2\x80\x99s rock.\nThe World Rock Paper Scissors Society, Walker said, plans to invite Judge Presnell to attend\nthe International Rock Paper Scissors Championships in Toronto on September 30, as \xe2\x80\x9cchief\nconsultant to Head Referee Brad Fox.\xe2\x80\x9d\nNo word yet on whether the judge will accept the invitation.\nQuestions:\n1. Why did the court order Pettinato and Craig to resolve their dispute via a game of\nRoshambo?\n2. Was the judge\xe2\x80\x99s decision justified and appropriate under the circumstances?\nAuto-Owners Ins. Co. v. Summit Park Townhome, 886 F. 3d 863 (10th Cir. 2018)\nSummary: Harris and Pettinato represented Summit Park in an action against AutoOwners. Summit Park was damaged by hail, but the parties disagreed about the amount\nof damage. The district court ordered them both to obtain independent appraisals. Harris\nand Pettinato retained Keys as their appraiser, but did not disclose their previous\nrelationship with him. When the district court learned that Keys was not impartial, it\nsanctioned Harris and Pettinato. They appealed, but the circuit court affirmed.\nBACHARACH, Circuit Judge.\nMr. William Harris and Mr. David Pettinato are two attorneys who represented Summit Park\nTownhome Association. While representing Summit Park against its insurer, the two attorneys\nwere sanctioned for failing to disclose information. In this appeal, the attorneys challenge the\nsanctions based on five arguments:\n1. The district court lacked authority to require the disclosure requirements.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c599\n2. The attorneys did not violate the court\xe2\x80\x99s disclosure requirements.\n3. The district court awarded attorneys\xe2\x80\x99 fees beyond the scope of an earlier sanctions\norder.\n4. The district court\'s award of attorneys\xe2\x80\x99 fees resulted in a deprivation of due process.\n5. The amount of attorneys\xe2\x80\x99 fees awarded was unreasonable.\nWe affirm. Regardless of whether the district court had authority to require the disclosures, the\nattorneys were obligated to comply. They did not, and the district court acted reasonably in\nissuing sanctions, determining the scope of the sanctions, and calculating the amount of the\nsanctions.\nI. Mr. Harris and Mr. Pettinato were sanctioned for failing to comply with the disclosure order.\nThis appeal grew out of an insurance dispute. Summit Park sustained hail damage and filed a\nclaim with its insurer, Auto-Owners Insurance Company. The parties agreed that damage had\noccurred but disagreed on the dollar amount of the damage. Auto-Owners sued for a\ndeclaratory judgment to decide the value.\nSummit Park retained Mr. Harris and Mr. Pettinato, who successfully moved to compel an\nappraisal based on the insurance policy. In the event of an appraisal, the insurance policy\nrequired:\nEach party will select a competent and impartial appraiser. The two appraisers will select\nan umpire. If they cannot agree, either may request that selection be made by a judge of\na court having jurisdiction. The appraisers will state separately the value of the property\nand amount of loss. If they fail to agree, they will submit their differences to the umpire.\nA decision agreed to by any two will be binding.\nBased on continuing disputes between the parties, Auto-Owners asked the district court to\nresolve these disputes by ordering an \xe2\x80\x9cappraisal agreement.\xe2\x80\x9d The court did so and ordered\ndisclosure of facts potentially bearing on the appraisers\' impartiality:\nAn individual who has a known, direct, and material interest in the outcome of the\nappraisal proceeding or a known, existing, and substantial relationship with a party may\nnot serve as an appraiser. Each appraiser must, after making a reasonable inquiry,\ndisclose to all parties and any other appraiser any known facts that a reasonable person\nwould consider likely to affect his or her impartiality, including (a) a financial or personal\ninterest in the outcome of the appraisal; and (b) a current or previous relationship with\nany of the parties (including their counsel or representatives) or with any of the\nparticipants in the appraisal proceeding. Each appraiser shall have a continuing\nobligation to disclose to the parties and to any other appraiser any facts that he or she\nlearns after accepting appointment that a reasonable person would consider likely to\naffect his or her impartiality.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c600\nThe court warned: \xe2\x80\x9cNotice is given that, if the court finds that the parties and/or their counsel\nhave not complied with this order, the court will impose sanctions against the parties and/or their\ncounsel pursuant to the court\'s inherent authority.\xe2\x80\x9d\nBefore the court imposed these requirements, Summit Park selected Mr. George Keys as its\nappraiser. This selection led Auto-Owners to express doubt about Mr. Keys\xe2\x80\x99s impartiality. But\nAuto-Owners did not object to Mr. Keys or move to compel further disclosures.\nMr. Keys and the court-appointed umpire agreed on an appraisal award of over $10 million,\nwhich was 47% higher than Summit Park\xe2\x80\x99s own public adjuster had determined. Auto-Owners\nthen launched an investigation, which culminated in an objection to Mr. Keys. In the objection,\nAuto-Owners argued that Mr. Keys was not impartial and that Summit Park had failed to\ndisclose evidence bearing on his impartiality. The district court credited these arguments,\ndisqualifying Mr. Keys and vacating the appraisal award.\nWith vacatur of the appraisal award, Auto-Owners moved for sanctions against Mr. Harris and\nMr. Pettinato, seeking attorneys\xe2\x80\x99 fees and expenses based on violation of the disclosure order.\nThe district court granted the motion, assessing sanctions against Mr. Harris and Mr. Pettinato\nfor $354,350.65 in attorneys\' fees and expenses.\nII. Mr. Harris and Mr. Pettinato were bound by the court\xe2\x80\x99s disclosure order.\nMr. Harris and Mr. Pettinato challenge the district court\xe2\x80\x99s authority to enter the disclosure order.\nBut even if the court had exceeded its authority, Mr. Harris and Mr. Pettinato would still have\nneeded to comply with the disclosure order. If the two attorneys believed that the order had\nbeen unauthorized, they could have sought reconsideration or a writ; but they could not violate\nthe order.\nThere is \xe2\x80\x9cimpressive authority for the proposition that an order issued by a court with jurisdiction\nover the subject matter and person must be obeyed by the parties until it is reversed by orderly\nand proper proceedings.\xe2\x80\x9d The parties agree that the district court had jurisdiction over the\nsubject matter and parties; thus, the attorneys and parties bore an obligation to comply in the\nabsence of an appellate challenge. In light of the duty to comply, violation of the order could\ntrigger sanctions.\nRegardless of whether the district court had authority to issue the disclosure order, Mr. Harris\nand Mr. Pettinato:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nbore an obligation to comply in the absence of an appellate challenge and\ncould be sanctioned for noncompliance.\n\nIII. Mr. Harris and Mr. Pettinato violated the disclosure order.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c601\nThe district court concluded that the two attorneys had violated the disclosure order.\nChallenging this conclusion, Mr. Harris and Mr. Pettinato make two arguments:\n1. The district court misinterpreted the term \xe2\x80\x9cimpartial.\xe2\x80\x9d\n2. Mr. Harris and Mr. Pettinato disclosed sufficient information about Mr. Keys.\nBoth arguments fail.\nB. Mr. Harris and Mr. Pettinato failed to disclose information specified in the disclosure order.\nThe district court required disclosure of:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nthe appraiser\xe2\x80\x99s \xe2\x80\x9cfinancial or personal interest in the outcome of the appraisal,\xe2\x80\x9d\nAny \xe2\x80\x9ccurrent or previous relationship\xe2\x80\x9d between the appraiser and Summit Park\xe2\x80\x99s counsel,\nand\nany other facts subsequently learned that \xe2\x80\x9ca reasonable person would consider likely to\naffect\xe2\x80\x9d the appraiser\'s impartiality.\n\n1. Mr. Harris and Mr. Pettinato did not disclose the extent of their relationships with Mr. Keys.\nRegardless of whether the district court had correctly defined \xe2\x80\x9cimpartial,\xe2\x80\x9d the disclosure order\nitself was clear in what was required. For example, the order expressly required disclosure of\nthe attorneys\xe2\x80\x99 current or previous relationships with the appraiser. The failure to disclose this\ninformation constituted a sanctionable violation regardless of the court\'s interpretation of the\nword \xe2\x80\x9cimpartial.\xe2\x80\x9d\nThe district court could reasonably find that the two attorneys had failed to disclose the extent of\ntheir relationships with Mr. Keys. For example, the attorneys failed to disclose that\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nother attorneys in their law firm (the Merlin Law Group) had worked with Mr. Keys on\nappraisals for at least 33 clients,\nMerlin attorneys had represented Mr. Keys on various matters for over a decade,\nMerlin\xe2\x80\x99s founder and Mr. Keys had co-founded a Florida lobbying operation, whose\n\xe2\x80\x9cnumber one goal was to protect policyholders and the public adjusting profession,\xe2\x80\x9d and\nMerlin attorneys had served as the incorporator and registered agent for one of Mr.\nKeys\xe2\x80\x99s companies.\n\nMr. Harris and Mr. Pettinato argue that their disclosures were sufficient. They made two\ndisclosures:\n1. \xe2\x80\x9cMr. Keys does not have any significant prior business relationship with Merlin, Summit\nPark, or C3 Group. Mr. Keys has acted as a public adjuster and/or appraiser on behalf of\npolicyholders that Merlin has represented in the past, however, this obviously does not\naffect his ability to act as an appraiser in this matter.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c602\n2. \xe2\x80\x9cMr. Keys has acted as a public adjuster and/or appraiser on behalf of policyholders that\nMerlin has represented in the past. Mr. Keys has no financial interest in the claim, and\nhas no previous relationship with the policyholder in this matter.\xe2\x80\x9d\nIn addition, Mr. Keys disclosed:\nI do not have a material interest in the outcome of the Award and have never acted\neither for or against Summit Park Townhome Association. My fee agreement is based\nupon hourly rates plus expenses. I do not have any substantial business relationship or\nfinancial interest in Merlin. There have been cases where both Merlin and Keys Claims\nConsultants acted for the same insured but under separate contracts.\nMr. Harris and Mr. Pettinato make two defenses of their disclosures:\n1. They disclosed enough information about Mr. Keys\xe2\x80\x99s impartiality.\n2. Mr. Harris and Mr. Pettinato lacked personal knowledge about the undisclosed facts.\nThese arguments fail.\nFirst, the district court acted within its discretion in concluding that Mr. Harris and Mr. Pettinato\nhad failed to disclose the extent of their relationships with Mr. Keys. The two attorneys disclosed\nonly that Mr. Keys had worked as an appraiser on behalf of Merlin\xe2\x80\x99s clients, and Mr. Keys stated\nthat he lacked a substantial business relationship with Merlin. The district court could\nreasonably find that these disclosures had failed to provide meaningful information about the\nextent of the relationships between the two attorneys and Mr. Keys.\nSecond, Mr. Harris and Mr. Pettinato cannot avoid sanctions based on their asserted lack of\nknowledge about Mr. Keys\xe2\x80\x99s contacts with other Merlin attorneys. Mr. Harris and Mr. Pettinato\nknew about some of the contacts, as reflected in Mr. Pettinato\'s description of his firm\xe2\x80\x99s\nconnection with Mr. Keys: \xe2\x80\x9cBoth Mr. Keys and his staff have assisted me as well as my firm in\nresolving an untold number of large multi-million dollar losses to an amicable resolution and\nsettlement to the policyholders\xe2\x80\x99 benefit and satisfaction.\xe2\x80\x9d In addition, however, Mr. Harris and\nMr. Pettinato bore an obligation to make \xe2\x80\x9ca reasonable inquiry.\xe2\x80\x9d In light of this obligation, Mr.\nHarris and Mr. Pettinato could not profess ignorance while failing to inquire about contacts with\nother Merlin attorneys.\nIn these circumstances, the district court acted within its discretion in finding a failure to disclose\nthe extent of the relationships between the two attorneys and Mr. Keys.\n2. Mr. Harris and Mr. Pettinato distort the effect of the district court\xe2\x80\x99s definition of \xe2\x80\x9cimpartial.\xe2\x80\x9d\nThe district court required disclosure not only of the appraiser\xe2\x80\x99s relationship with counsel but\nalso of known facts that a reasonable person would consider likely to affect the appraiser\'s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c603\nimpartiality. This part of the disclosure requirement was tied to the court\'s definition of the term\n\xe2\x80\x9cimpartial.\xe2\x80\x9d\nMr. Harris and Mr. Pettinato focus on the court\xe2\x80\x99s definition of \xe2\x80\x9cimpartial,\xe2\x80\x9d arguing that it was\nwrong and that the court failed to adequately inform Mr. Harris and Mr. Pettinato of the scope of\ntheir obligations. But in the disclosure order itself, the court stated what it meant by \xe2\x80\x9cimpartial\xe2\x80\x9d:\n\xe2\x80\x9cAn individual who has a known, direct, and material interest in the outcome of the appraisal\nproceeding or a known, existing, and substantial relationship with a party may not serve as an\nappraiser.\xe2\x80\x9d Because the court stated precisely what it meant by \xe2\x80\x9cimpartial,\xe2\x80\x9d Mr. Harris and Mr.\nPettinato knew what was required. And as we have discussed, Mr. Harris and Mr. Pettinato\ncould not disobey the order even if the court had based the disclosure requirements on a\nmisguided definition of \xe2\x80\x9cimpartial.\xe2\x80\x9d\n3. The district court reasonably found a violation of the disclosure order tied to this test of\n\xe2\x80\x9cimpartial.\xe2\x80\x9d\nBased on this definition, the district court required disclosure of any facts that a reasonable\nperson would view as likely to affect the appraiser\xe2\x80\x99s impartiality. Mr. Harris and Mr. Pettinato\nargue that evidence of an appraiser\xe2\x80\x99s advocacy was unlikely to affect the appraiser\xe2\x80\x99s\nimpartiality. For the sake of argument, let\xe2\x80\x99s assume that Mr. Harris and Mr. Pettinato are right.\nStill, the district court could reasonably view Mr. Keys\xe2\x80\x99s undisclosed prior statements as likely to\naffect his impartiality based on a known, direct, and material interest in the outcome.\nFor example, in a presentation to a group of public adjusters in Florida, Mr. Keys taught\nparticipants how to \xe2\x80\x9charvest the claim money\xe2\x80\x9d from an insurer during an appraisal. And one of\nMr. Keys\xe2\x80\x99s companies maintains a website stating: \xe2\x80\x9cOur purpose is simple: To shift the balance\nof power from the insurer to the policy holder.\xe2\x80\x9d The district court could reasonably view these\nundisclosed statements as proof of a material interest in an outcome favoring the policyholder\nover the insured.\nEvidence also suggests that Mr. Harris and Mr. Pettinato were aware of Mr. Keys\xe2\x80\x99s bias. For\nexample, in an advertisement on Mr. Keys\xe2\x80\x99s website, Mr. Pettinato endorsed Mr. Keys, saying:\n\xe2\x80\x9cBoth Mr. Keys and his staff have assisted me as well as my firm in resolving an untold number\nof large multi-million dollar losses to an amicable resolution and settlement to the policyholders\xe2\x80\x99\nbenefit and satisfaction.\xe2\x80\x9d And a profile on Merlin\'s website reported that Mr. Keys \xe2\x80\x9chad\ndedicated his professional life to being a voice for policyholders in property insurance claims.\xe2\x80\x9d In\nthis profile, Mr. Keys stated: \xe2\x80\x9cI was taught to always handle a claim as if my momma was the\ninsured.\xe2\x80\x9d\nIn sum, the district court did not abuse its discretion in finding that Mr. Harris and Mr. Pettinato\nhad violated the disclosure order.\nC. Waiver\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c604\nMr. Harris and Mr. Pettinato contend that Auto-Owners waived its objection to the sufficiency of\nthe disclosures by failing to object despite knowledge of Mr. Keys\xe2\x80\x99s relationship with Merlin and\npast expressions of bias toward policyholders. We disagree. Auto-Owners had some knowledge\nabout Mr. Keys\xe2\x80\x99s bias but did not know much of what had been withheld. Without full knowledge\nof the undisclosed information, Auto-Owners did not waive its right to seek sanctions for\nnondisclosure.\nIV. The district court reasonably interpreted the scope of its sanctions order.\nIn sanctioning the two attorneys, the court invoked 28 U.S.C. \xc2\xa7 1927. Under \xc2\xa7 1927, an attorney\n\xe2\x80\x9cwho so multiplies the proceedings in any case unreasonably and vexatiously may be required\nby the court to satisfy personally the excess costs, expenses, and attorneys\xe2\x80\x99 fees reasonably\nincurred because of such conduct.\xe2\x80\x9d Applying this statute in the sanctions order, the court found\nthat Mr. Harris and Mr. Pettinato had unreasonably prolonged the proceedings:\nI note that Section 1927 indicates a purpose to compensate victims of abusive litigation\npractices, not to deter and punish offenders. With this purpose in mind, I reject AutoOwners\xe2\x80\x99 request for fees for proceedings in this Court that relate to conducting the\nappraisal process and conducting the appraisal process itself because Auto-Owners\nwould have incurred these fees regardless of Harris\' and Pettinato\'s misconduct. I grant\nthe request, however, as to Auto-Owners\xe2\x80\x99 investigation into George Keys and its\nobjections to his participation in the appraisal, as this work would not have taken place in\nthe absence of Harris\xe2\x80\x99 and Pettinato\xe2\x80\x99s misconduct. The award shall be assessed against\nHarris and Pettinato jointly and severally.\nMr. Harris and Mr. Pettinato challenge the scope of this order. They concede that the award\ncovered Auto-Owners\xe2\x80\x99 objection to Mr. Keys ($186,705.50) and investigation of Mr. Keys\n($33,805). But the attorneys disagree with the inclusion of attorneys\xe2\x80\x99 fees for\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nAuto-Owners\xe2\x80\x99 preparation of the motion for sanctions ($51,309.50),\nAuto-Owners\xe2\x80\x99 preparation of the application for attorneys\xe2\x80\x99 fees and expenses\n($16,960.50), and\nAuto-Owners\' other related work ($61,662.50).\n\nAccording to Mr. Harris and Mr. Pettinato, these activities fell outside of the initial sanctions\norder. We disagree.\nIn setting attorneys\xe2\x80\x99 fees following the sanctions order, the district court explained:\nThus, viewed properly in its context, my award encompasses any fees incurred as a\nresult of Harris\xe2\x80\x99 and Pettinato\xe2\x80\x99s misconduct. The fees requested by Auto-Owners for\nwork on the third amended petition, the reservation of rights letter, and other matters\ndescribed in the detailed billing records would not have been incurred but for Harris\xe2\x80\x99 and\nPettinato\xe2\x80\x99s misconduct. I therefore conclude they are within the scope of the award.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c605\n\nWe give deference to the district court\xe2\x80\x99s interpretation of its own order.\nWith such deference, we conclude that the district court reasonably interpreted its prior\nsanctions order. The sanctions order had noted that \xc2\xa7 1927 was designed \xe2\x80\x9cto compensate\nvictims of abusive litigation practices.\xe2\x80\x9d In light of this purpose, the court interpreted its sanctions\norder against Mr. Harris and Mr. Pettinato as encompassing all of the attorneys\xe2\x80\x99 fees and\nexpenses resulting from violation of the disclosure order. This interpretation was reasonable.\nThe sanctions order expressly included the investigation of and objection to Mr. Keys. But the\ndistrict court could reasonably interpret the sanctions order to go beyond the investigation and\nobjection. If Mr. Harris and Mr. Pettinato had not violated the disclosure order, Auto-Owners\nwould not have had to move for sanctions, seek attorneys\xe2\x80\x99 fees and expenses, and complete\nother work. As a result, the district court could reasonably consider these litigation expenses as\nthe product of the two attorneys\xe2\x80\x99 misconduct. In these circumstances, it was reasonable for the\ndistrict court to conclude that the earlier sanctions order had encompassed attorneys\xe2\x80\x99 fees and\nexpenses from the motion for sanctions, application for attorneys\xe2\x80\x99 fees and expenses, and\nrelated work involving the motion and application.\nV. The district court did not deprive the two attorneys of due process.\nAlternatively, Mr. Harris and Mr. Pettinato assert a deprivation of due process based on an\ninability to respond to the district court\xe2\x80\x99s inclusion of litigation activities outside of the initial\nsanctions order. We disagree. Auto-Owners filed an application for attorneys\xe2\x80\x99 fees, and Mr.\nHarris and Mr. Pettinato had an opportunity to respond. In the response, they could have\nobjected to any of the attorneys\xe2\x80\x99 fees being sought. This opportunity supplied due process.\nVI. The amount of attorneys\' fees awarded was reasonable.\nMr. Harris and Mr. Pettinato also argue that the court awarded an unreasonable amount of\nattorneys\xe2\x80\x99 fees. We disagree.\nThe district court closely reviewed the information in Auto-Owners\xe2\x80\x99 request for fees, determining\nthat most of the fee requests were reasonable given\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nthe circumstances of the case,\nthe hourly rates prevailing in the community, and\nthe use of billing judgment.\n\nFirst, the district court concluded that it was reasonable for Auto-Owners\xe2\x80\x99 counsel to spend long\nhours because \xe2\x80\x9cAuto-Owners had over $30 million at stake\xe2\x80\x9d and the issues were complex. This\nconclusion was reasonable.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c606\nSecond, the court considered the local market, the qualifications of the attorneys, and the\ncontentiousness of the litigation. These considerations led the district court to find that the billing\nrates had been reasonable. In our view, this finding was permissible under the record.\nThird, the court considered the use of billing judgment by Auto-Owners\xe2\x80\x99 counsel through\nconcessions such as staffing with lower-billing attorneys, declining to charge for all hours\nworked, and discounting hours worked by paralegals and secretaries. The district court acted\nreasonably in considering these concessions.\nFor these three reasons, we conclude that the district court did not abuse its discretion in\ncalculating the amount of the sanction ($354,350.65).\nVII. Conclusion\nThe district court did not err in sanctioning Mr. Harris and Mr. Pettinato. Regardless of the\nvalidity of the disclosure order, compliance was required in the absence of an appellate\nchallenge. Mr. Harris and Mr. Pettinato violated the order by failing to disclose information\nbearing on Mr. Keys\'s impartiality. In light of this violation, the district court had the discretion to\nsanction Mr. Harris and Mr. Pettinato and set a reasonable amount. We therefore affirm the\nassessment of sanctions.\nQuestions:\n1. Why was it improper for Harris and Pettinato not to disclose their previous relationship\nwith Keys?\n2. Could Harris and Pettinato have hired Keys as their expert, if they made the proper\ndisclosures?\nFurther Reading:\n\xe2\x97\x8f\n\nBenjamin Edwards, The Professional Prospectus: A Call for Effective Professional\nDisclosure, W&L L. Rev. (forthcoming)\n\nFurther Listening:\n\xe2\x97\x8f\n\nBenjamin Edwards on Improving the Market for Professional Services, Ipse Dixit, March\n19, 2019\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c607\n6.3: Attorney Misconduct\nWalking the line, you were a marksman. Told me that law, like wine, is ageless. Public defender,\nyou had to admit, you wanted the love of a sex offender.94\nIn addition to their disciplinary authority under Federal Rule of Civil Procedure 11 and Model\nRule of Professional Conduct 3.1, courts have the \xe2\x80\x9cinherent authority\xe2\x80\x9d to regulate the conduct of\nattorneys and punish attorney misconduct. This inherent authority is recognized by both state\nand federal courts, and is not derived from any particular state or rule. Rather, it is a function of\nthe need for courts to \xe2\x80\x9cmanage their own affairs.\xe2\x80\x9d As the Supreme Court observed in Chambers\nv. Nasco, Inc., 501 U.S. 32 (1991):\nIt has long been understood that certain implied powers must necessarily result to our\nCourts of justice from the nature of their institution, powers which cannot be dispensed\nwith in a Court, because they are necessary to the exercise of all others. For this reason,\nCourts of justice are universally acknowledged to be vested, by their very creation, with\npower to impose silence, respect, and decorum, in their presence, and submission to\ntheir lawful mandates. These powers are governed not by rule or statute but by the\ncontrol necessarily vested in courts to manage their own affairs so as to achieve the\norderly and expeditious disposition of cases.\nThe inherent authority of a court is non-exclusive of any statutes or rules that prohibit the same\nor similar conduct, and courts may use their inherent authority to punish conduct that would fall\noutside the scope of otherwise applicable statutes of rules. Among other things, courts can use\ntheir inherent authority to punish attorneys for conduct that is abusive, vexatious or in bad faith.\nFor example, as the Supreme Court observed in Chambers:\nA court may assess attorney\xe2\x80\x99s fees when a party has acted in bad faith, vexatiously,\nwantonly, or for oppressive reasons. In this regard, if a court finds that fraud has been\npracticed upon it, or that the very temple of justice has been defiled, it may assess\nattorney\xe2\x80\x99s fees against the responsible party, as it may when a party shows bad faith by\ndelaying or disrupting the litigation or by hampering enforcement of a court order. The\nimposition of sanctions in this instance transcends a court\xe2\x80\x99s equitable power concerning\nrelations between the parties and reaches a court\xe2\x80\x99s inherent power to police itself, thus\nserving the dual purpose of vindicating judicial authority without resort to the more\ndrastic sanctions available for contempt of court and making the prevailing party whole\nfor expenses caused by his opponent\'s obstinacy.\nThe Inherent Authority of the Court\n\n94\n\nBlondie, X Offender, Blondie (1976).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c608\n\nMarvin Kurzban & Ira J. Kurzban\nLee v. American Eagle Airlines, Inc., 93 F. Supp. 2d 1322 (S.D. Fla. 2000)\nMIDDLEBROOKS, District Judge.\nSummary: Marvin and Ira Kurzban represented Anthony Lee in an employment\ndiscrimination action against American Eagle Airlines, alleging racial discrimination. The\nfound for Lee on his hostile work environment claim and awarded him $300,000 in\ncompensatory damages and $650,000 in punitive damages, but denied Lee\xe2\x80\x99s claim for\ntermination on account of his race. The Kurzbans filed motion seeking $1,611,910.50 in\nattorney\xe2\x80\x99s fees and costs. The district court criticized their conduct during the trial, and\nrelied on its inherent authority to award only $312,324.63 in attorney\xe2\x80\x99s fees and costs. In\naddition, it reported their conduct to the Florida Bar.\nThis Cause came before the Court upon Plaintiff\xe2\x80\x99s Amended Verified Motion for Attorney\xe2\x80\x99s Fees\nand Costs.\nI. Introduction\n\xe2\x80\x9cLet\'s kick some ass,\xe2\x80\x9d Marvin Kurzban said loudly to his client, Anthony Lee, and his co-counsel,\nIra Kurzban. I had taken the bench, and Court was in session. Opposing counsel and their client\nrepresentatives were seated across the aisle. The jury was waiting to be called into the\ncourtroom. Mr. Kurzban\xe2\x80\x99s comment was suited more to a locker room than a courtroom of the\nUnited States, and the conduct of Plaintiff\xe2\x80\x99s counsel that followed disrupted the adversary\nsystem and interfered with the resolution of a civil dispute.\nThe trial of this case lasted approximately fourteen days. The jury found that American Eagle\nAirlines had subjected Mr. Lee to a racially hostile work environment. As compensation, the jury\nawarded Mr. Lee $300,000. In addition, the jury awarded Mr. Lee $650,000 in punitive\ndamages. The jury denied Mr. Lee\xe2\x80\x99s other claim, finding that Mr. Lee had not been terminated\nbecause of his race. This motion seeking attorney\xe2\x80\x99s fees and costs followed.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c609\nAs the prevailing party in a Title VII action, the Plaintiff now seeks $1,611,910.50 in attorney\xe2\x80\x99s\nfees. This request presents the question of whether unprofessional and disruptive conduct of\ncounsel which prolongs the proceedings and creates animosity which interferes with the\nresolution of a cause can be considered in determining an award of attorney\xe2\x80\x99s fees.\nIn their post-trial motions, counsel for the parties filed opposing affidavits concerning additional\nmisconduct that was not directly observed by the Court. Since these affidavits presented vastly\ndifferent versions of events, an evidentiary hearing was held; counsel and other witnesses\ntestified.\nThese issues have been distasteful and time consuming. There is a great temptation to simply\nmove on and ignore the issue. It is unpleasant to hear lawyers accusing each other of lies and\nmisrepresentations. Unprofessionalism on the part of lawyers is a distraction and takes time\naway from other pending cases; it also embroils the Court in charges and counter charges.\nHowever, the functioning of our adversary system depends upon being able to rely upon what a\nlawyer says. So, confronted by affidavits of counsel that were directly contradictory, I decided to\nhear testimony and make credibility findings. These findings are based upon direct observations\nby the Court, the transcript of the trial, and the evidentiary hearing.\nIn addition, we contacted the Florida Bar to determine whether counsel had been the subject of\ncomplaints regarding unprofessional conduct. The Florida Bar forwarded a record of a previous\ncomplaint by a state court judge concerning the conduct of Marvin Kurzban. In response to that\ncomplaint, and immediately before the trial in this cause, the Florida Bar had directed Mr.\nKurzban to attend an ethics class and pay a fine.\nII. Findings of Fact Pertaining to Misconduct by Counsel\nDiscovery in this case was rancorous from the beginning. As is often the case, counsel for both\nsides contributed to the lack of civility. The tone of depositions was harsh, witnesses were\ntreated with discourtesy, and discovery disputes were abundant. The transcripts of the\ndepositions in this case are weighted down with bitter exchanges between the lawyers.\nTestimony at the evidentiary hearing reflected that this uncivil conduct also continued during\nconversations between counsel. The testimony of a young lawyer formerly with the Defendant\'s\ncounsel\xe2\x80\x99s law firm was particularly poignant. This lawyer testified that during telephone\nconversations with Ira Kurzban, she was hung up on, told that she had only been assigned to\nwork on the case because she was African-American, and wrongly accused of\nmisrepresentations. She testified that her experience with opposing counsel in this case was a\nfactor in her decision to leave her litigation practice.\nThis testimony was not only powerful and credible, but it also reflects the corrosive impact this\ntype of unprofessional behavior can have upon the bar itself. A litigation practice is stressful and\noften exhausting. Unprofessional litigation tactics affect everyone exposed to such behavior and\nthe ripple effect of incivility is spread throughout the bar.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c610\n\nThe trial began. Testimony at the evidentiary hearing reveals that Mr. Kurzban\xe2\x80\x99s \xe2\x80\x9cLet\xe2\x80\x99s kick\nsome ass\xe2\x80\x9d comment was not an aberration. A client representative of the Defendant, a lawyer\nfor American Airlines, testified that she and others were subjected to a barrage of comments out\nof the hearing of the Court and jury which she likened to trash talk at a sporting event. Local\ncounsel for the Defendant was called a \xe2\x80\x9cSecond Rate Loser\xe2\x80\x9d by Marvin Kurzban. She testified\nthat each day as court began, Marvin Kurzban would say, \xe2\x80\x9cLet the pounding begin.\xe2\x80\x9d In front of\ndefense counsel\xe2\x80\x99s client, Mr. Kurzban would ask, \xe2\x80\x9cHow are you going to feel when I take all of\nyour client\'s money?\xe2\x80\x9d When walking out of the courtroom, Marvin Kurzban would exclaim,\n\xe2\x80\x9cYuppies out of the way.\xe2\x80\x9d\nOther than Mr. Kurzban\xe2\x80\x99s opening comment, I was unaware of this conduct towards opposing\ncounsel and their client\xe2\x80\x99s representatives, although counsel for the Defendants alluded to it\nduring the trial. However, I observed continuing misconduct during the trial itself.\nEarly in the trial, an episode occurred when defense counsel brought to the Court\xe2\x80\x99s attention\nthat after an instruction to a witness not to discuss his testimony during a break in his testimony\nfor lunch, Ira and Marvin Kurzban had approached the witness and had a discussion \xe2\x80\x94 with an\nopen deposition transcript in hand. Marvin Kurzban responded, \xe2\x80\x9cThat\'s a lie.\xe2\x80\x9d The Kurzbans\nthen explained that they had the transcript open because they were looking at it, but that they\nwere not talking with the witness about it. Their explanation was that they were talking about\nwhere they were going for lunch. I accepted the explanation, but with the observation that it was\nan exercise of poor judgment. (Tr. 324-325).\nShortly afterward, Marvin Kurzban objected to a question, and I overruled his objection. He\ncontinued to argue his point, then he visibly expressed his dismay with the ruling. I asked\ncounsel to approach for a sidebar conference, wherein I advised him that for the third time he\nhad made visible displays of disagreement with rulings by nodding his head or looking upward\nat the ceiling. I told him to stop that conduct and to cease making speaking objections.\nSubsequently, I warned both counsel again; once before the jury, and again at the close of the\nmornings testimony. Ira Kurzban responded that he was way beyond acrimony with opposing\ncounsel.\nAfter this warning, defense counsel followed the Court\xe2\x80\x99s admonition and refused to respond to\nprovocations from opposing counsel. Later than day, Marvin Kurzban interrupted an appropriate\ncross-examination and requested a sidebar to accuse counsel of intentionally delaying the\nexamination so that he could not reach a witness.\nDespite repeated warnings, Plaintiff\xe2\x80\x99s counsel continued to address comments to opposing\ncounsel rather than to the Court and interject inappropriate comments before the jury.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c611\nThe belligerence of Plaintiff\'\xe2\x80\x99s counsel, particularly Marvin Kurzban, spread like a contagion\nthrough the courtroom. On September 22, 1999, I returned to the bench after a luncheon break.\nMarvin Kurzban wanted to raise a matter prior to the jury\xe2\x80\x99s return.\nMr. Kurzban stated:\nI am concerned about the record, Your Honor. I went over to the ... Mr. Reporter there,\nwhen we took the first break, and asked him about the ability to get a page typed. And\ninstead I ended up having names called at me and a confrontation. I only bring it to the\nCourt\xe2\x80\x99s attention because I am concerned about the record being clear. I feel this Court\nReporter for whatever reason ... I don\'t know the gentlemen, never met him before \xe2\x80\x94 is\neither unstable based on his reaction and not competent to be reporting or has some\nbias.\nAt the next recess, I asked the Court Reporter what had happened. He indicated that at the\nbreak, which was a brief break for him inasmuch as we had a calendar call scheduled during\nthat luncheon break, Marvin Kurzban asked him for a portion of transcript. The reporter\nresponded that he could not produce those pages over the break (because he had to report the\ncalendar call). Marvin Kurzban responded, \xe2\x80\x9cWhat are you here for, just to look pretty?\xe2\x80\x9d The\nCourt Reporter responded with an epithet, at which point Marvin Kurzban remarked, \xe2\x80\x9cWe\xe2\x80\x99re not\ntalking about your family.\xe2\x80\x9d Then Mr. Kurzban said, \xe2\x80\x9cI guess money talks,\xe2\x80\x9d suggesting that since\nthe Defendant was ordering daily copy, the reporter was biased in their favor. At that point, the\nCourt Security Officer intervened.\nI required the Court Reporter to apologize for his behavior. Because of the accusation of bias, I\narranged for other Court Reporters to cover the remainder of the trial.\nI learned that accusations of bias followed any disagreement with positions espoused by\nPlaintiff\xe2\x80\x99s counsel: \xe2\x80\x9cThere\'s no question that he\'s entitled to it, so it\'s no \xe2\x80\x94 if I understand what\nYour Honor\xe2\x80\x99s saying, you don\xe2\x80\x99t want it to go in front of the jury for whatever reason.\xe2\x80\x9d \xe2\x80\x9cYour\nHonor, I know you\xe2\x80\x99re angry at me, but I hope you\xe2\x80\x99re not taking it out on my client.\xe2\x80\x9d \xe2\x80\x9cIn fact, I\nthink that the Court has exhibited extreme bias in this case and your rulings on objections.\xe2\x80\x9d\n\xe2\x80\x9cWell, Your Honor, I respectfully disagree with you, that\'s for a court of appeals ultimately to\ndecide, but to put a motive on it I think it exhibits a substantial amount of bias on behalf of Your\nHonor.\xe2\x80\x9d \xe2\x80\x9cAnd I concur with what my brother has said. There\'s been clear animus by this Court to\nthis side.\xe2\x80\x9d \xe2\x80\x9cI\xe2\x80\x99ve practiced 26 years and I\xe2\x80\x99ve tried over 50 cases, and I\xe2\x80\x99ve won multimillion dollar\nverdicts on more than a dozen cases. I don\xe2\x80\x99t need for this Court to allow a witness to have his\nwife introduced. I can\xe2\x80\x99t think of any reason or purpose, other than prejudice, that this Court\nwould allow such an act to occur.\xe2\x80\x9d\nDisturbing behavior by both Marvin Kurzban and Ira Kurzban occurred repeatedly during the\ntrial. When confronted about their conduct, they would deny that which I had just observed and\nthen lash out in a personal attack. For instance, after I overruled an objection made by Ira\nKurzban, Marvin Kurzban laughed. Other examples of their conduct following rulings include\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c612\nMarvin Kurzban tossing a pen; Ira Kurzban exclaiming, \xe2\x80\x9cThis is outrageous\xe2\x80\x9d; the rolling of eyes;\nexasperated looks at the ceiling; and flailing of arms. I warned counsel about this behavior.\nAfter the episode of Marvin Kurzban laughing at my ruling, I asked counsel to approach the\nbench. Marvin Kurzban responded: \xe2\x80\x9cI didn\xe2\x80\x99t laugh. What I started doing was writing a note,\nsaying to my brother ... I didn\'t realize I was saying it out loud \xe2\x80\x94 we\xe2\x80\x99re not trying his case. That\'s\nwhat the objection was, because he\'s telling about his problems.\xe2\x80\x9d Ira Kurzban then interjected:\n\xe2\x80\x9cI\xe2\x80\x99d like to add, Your Honor, there\xe2\x80\x99s a continuing pattern of conduct we believe shows enormous\nbias and has turned this trial into a circus-like atmosphere.\xe2\x80\x9d\nIra Kurzban then listed a litany of complaints about rulings which he stated should result in a\nmistrial. (When offered a mistrial, the Plaintiff declined.) Defense counsel and the Court Security\nofficer also heard a laugh.\nShortly thereafter, during a discussion between the Court, Marvin Kurzban, and defense\ncounsel about the admissibility of an exhibit a witness had allegedly drawn during a videotaped\ndeposition but which was not on the Plaintiff\xe2\x80\x99s exhibit list, Ira Kurzban walked to the video\nmachine and begin playing the videotape of the deposition in front of the jury. I directed that the\nmachine be turned off and we took a fifteen minute break.\nAfter the break, defense counsel raised the issue and requested some sanction. I asked Ira\nKurzban for an explanation. He responded:\nMr. Kurzban: Yes, Your Honor. First, Mr. Connor asked me not to tamper with the tape\nnow, because you were going to come out and rule. I assume he didn\'t have any ex\nparte communication with you. I\xe2\x80\x99m a little perturbed about the fact that somehow he\nknew you were coming out to make a ruling, which I was totally unaware.\nThe Court: I think he knew that I was coming back after a 15 minute break. There has\nbeen absolutely no contact between me and Mr. Connor or any other lawyer in this case\nbetween the time I left the bench 15 minutes ago and when I returned now. Now, is there\nsome reason why you would make that accusation?\nIra Kurzban: Yes, Your Honor.\nThe Court: All right. What was it?\nIra Kurzban: Mr. Connor said the Judge is going to come out here, he\xe2\x80\x99s going to impose\nsome sanction. That\'s what Mr. Connor said, Your Honor, you are not here.\nI\'m simply saying that\'s what Mr. Connor did. I\xe2\x80\x99m not accusing you of anything. We can\nhave the marshal testify that I should not touch the tape because you were going to\nimpose sanctions.\nThe Deputy: No, no.\nThe Court: The marshal is nodding no. Mr. Marshal?\nThe Deputy: No mention of sanctions was ever made.\nMr. Kurzban then stated that he had put the tape into the machine so that it would be ready if\nneeded and that the tape began playing accidentally. I accepted his explanation but stated:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c613\n\nIf I can\xe2\x80\x99t rely on lawyers being able to respect each other and be respected and accept\nwhat other people say in the courtroom, this system can\xe2\x80\x99t work. It\xe2\x80\x99s as important to me\nas whether or not you have a law degree. I\xe2\x80\x99m beginning to really have a problem with\nwhat you are telling me is happening, based on what I\xe2\x80\x99m seeing and what others in the\ncourtroom are seeing. So you all really need to think about that.\nDuring a cross-examination concerning how much time the witness spent on various shifts,\nMarvin Kurzban held a file towards the witness and asked:\nMarvin Kurzban: I have your personnel file (indicating). How many times did you have to\nwork between 1992 and 1994, sir? Do you think it was more than a handful of times?\nAfter an objection, and out of the presence of the jury, I asked Mr. Kurzban for the witness\xe2\x80\x99s\npersonnel file. He responded:\nMarvin Kuzban: Actually, we do have Mr. Blades\xe2\x80\x99s personnel file, when it was produced\namong all the other personnel files in Miami of the people. I don\xe2\x80\x99t know if that box is here\nor I left it in the office. I think the personnel files that we were given by counsel is in the\noffice.\nThe Court: So it wasn\xe2\x80\x99t in the folder that you picked up and carried to the stand?\nMarvin Kurzban: No it wasn\xe2\x80\x99t, Your Honor.\nThe Court: You said, :Mr. Blades, we have your personnel file here!\xe2\x80\x9d You believe it is\npermissible to pick up a file from your desk, carry it to the witness stand and tell the\nwitness \xe2\x80\x9cMr. Blades, we have your personnel file,\xe2\x80\x9d and then begin questioning him? You\nbelieve that\xe2\x80\x99s appropriate court examination?\nMarvin Kurzban: I do, on hostile witnesses; on cross-examination, I believe that I\xe2\x80\x99m\nentitled to have that witness believe I\xe2\x80\x99m going to question him on something whether or\nnot I have that in my hand or not. Yes, I do.\nThe Court: I believe, frankly, that it is inappropriate to make a deliberate\nmisrepresentation to a witness or to ask, implying in your questioning something that is\nnot true.\nMarvin Kurzban: Neither was I implying something that wasn\xe2\x80\x99t true, nor was I making a\nmisrepresentation. The question was about how many times he worked, Your Honor.\nThe question wasn\xe2\x80\x99t: In your personnel file it says something. I didn\'t make any such\nmisrepresentation.\nMr. Kurzban insisted that he had the personnel file back at his office. He was asked to produce\nit and he responded that he would the following day. The file was never produced.\nAt the end of the trial, defense counsel Connor approached Ira Kurzban and offered his hand in\ncongratulations. Mr. Kurzban refused to shake his hand. The trial ended much like it had begun.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c614\nAt the evidentiary hearing, Plaintiff\'s counsel were unrepentent, attacking opposing counsel and\naccepting no responsibility for their own actions. They argued that the perceived misconduct\nwas only a matter of style and the exercise of first amendment rights. In keeping with that\n\xe2\x80\x9cstyle,\xe2\x80\x9d Marvin Kurzban ended the hearing with the proclamation that he had called his opponent\na loser, but not a second-rate loser because, \xe2\x80\x9cI don\'t rate losers.\xe2\x80\x9d Mr. Kurzban\'s testimony\nreflects that he has no clue about what it means to be a lawyer.\nIII. Analysis\nCourts presiding over civil rights actions may, in their discretion, award the prevailing party a\n\xe2\x80\x9creasonable attorney\xe2\x80\x99s fee (including expert fees)\xe2\x80\x9d as part of its costs. Although the presiding\ncourt has discretion, a prevailing plaintiff is to be awarded attorney\xe2\x80\x99s fees \xe2\x80\x9cin all but special\ncircumstances.\xe2\x80\x9d This presumption in favor of awarding attorney\xe2\x80\x99s fees is a reflection of\nCongress\xe2\x80\x99 clear intent to \xe2\x80\x9ccast the Title VII plaintiff in the role of \xe2\x80\x98a private attorney general,\xe2\x80\x99\nvindicating a policy of the highest priority.\xe2\x80\x9d By awarding prevailing plaintiffs their attorney\xe2\x80\x99s fees,\nthe section \xe2\x80\x9cmakes it easier for a plaintiff of limited means to bring a meritorious suit.\xe2\x80\x9d\nCourts determining attorney\xe2\x80\x99s fee awards begin by determining the \xe2\x80\x9clodestar\xe2\x80\x9d: the product of the\nnumber of hours reasonably expended on the litigation and a reasonable hourly rate for the\nattorney\xe2\x80\x99s services. This lodestar may then be adjusted for the results obtained.\n1. The reasonable hourly rate\n\xe2\x80\x9cA reasonable hourly rate is the prevailing market rate in the relevant legal community for similar\nservices by lawyers of reasonably comparable skills, experience, and reputation.\xe2\x80\x9d The party\nseeking attorney\xe2\x80\x99s fees, in this case Mr. Lee, bears the burden of producing \xe2\x80\x9csatisfactory\nevidence that the requested rate is in line with prevailing market rates.\xe2\x80\x9d To be satisfactory,\nevidence must consist of \xe2\x80\x9cmore than the affidavit of the attorney performing the work.\xe2\x80\x9d\nPrior to adoption of the lodestar formula, the so-called \xe2\x80\x9cJohnson factors\xe2\x80\x9d governed fee awards.\nAlthough the lodestar formula has since displaced the \xe2\x80\x9cJohnson factors,\xe2\x80\x9d the Eleventh Circuit\nhas permitted district courts to consider the factors in establishing a reasonable hourly rate.\nAmong those factors is the experience, reputation, and ability of the attorneys and the skill\nrequisite to perform the legal service properly. As explained more fully in the findings of\nmisconduct, the conduct of Ira Kurzban and Marvin Kurzban both during and prior to trial was\nvery troubling. In my estimation, the manner in which a lawyer interacts with opposing counsel\nand conducts himself before the Court is as indicative of the lawyer\xe2\x80\x99s ability and skill as is\nmastery of the rules of evidence. Upon review of the trial transcripts and the evidence presented\nduring the evidentiary hearing on attorney conduct and based on observations at trial, I find that\nthe conduct of Ira Kurzban and Marvin Kurzban in the litigation of this case fell far below\nacceptable standards, especially in light of the $300 hourly rate the attorneys claim.\nAccordingly, I find \xe2\x80\x9cspecial circumstances\xe2\x80\x9d justifying a departure from counsels\xe2\x80\x99 requested rates:\nIra Kurzban shall be awarded $150 per hour for his pretrial work and $0 for his trial work; Marvin\nKurzban\xe2\x80\x99s rate for this action is $0.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c615\n\nFor further support of the above rate reductions, we rely upon our \xe2\x80\x9cinherent power\xe2\x80\x9d to sanction\nattorney misconduct. \xe2\x80\x9cIt is well-established that \xe2\x80\x98certain implied powers must necessarily result\nto our Courts of justice from the nature of their institution,\xe2\x80\x99 powers \xe2\x80\x98which cannot be dispensed\nwith in a Court, because they are necessary to the exercise of all others.\xe2\x80\x99 For this reason,\n\xe2\x80\x98Courts of justice are universally acknowledged to be vested, by their very creation, with power\nto impose silence, respect, and decorum, in their presence, and submission to their lawful\nmandates.\xe2\x80\x99 These powers are \xe2\x80\x98governed not by rule or statute but by the control necessarily\nvested in courts to manage their own affairs so as to achieve the orderly and expeditious\ndisposition of cases.\xe2\x80\x99\xe2\x80\x9d\nAmong these powers is the contempt sanction, \xe2\x80\x9cwhich a judge must have and exercise in\nprotecting the due and orderly administration of justice and in maintaining the authority and\ndignity of the court.\xe2\x80\x9d \xe2\x80\x9cThe inherent power of a court to manage its affairs necessarily includes\nthe authority to impose reasonable and appropriate sanctions upon errant lawyers practicing\nbefore it.\xe2\x80\x9d\nA finding that counsels\xe2\x80\x99 conduct \xe2\x80\x9cconstituted or was tantamount to bad faith\xe2\x80\x9d must precede any\nsanction levied pursuant to a court\xe2\x80\x99s inherent powers. The Court of Appeals for the Second\nCircuit requires that bad faith be shown by (1) \xe2\x80\x9cclear evidence\xe2\x80\x9d or (2) \xe2\x80\x9charassment or delay or\nother improper purposes.\xe2\x80\x9d Where imposed for the purpose of deterring misconduct rather than\nremedying some prejudice, as here, the District of Columbia Circuit has held that sanctions\nmust be supported by \xe2\x80\x9cclear and convincing evidence\xe2\x80\x9d of \xe2\x80\x9cflagrant or egregious misconduct.\xe2\x80\x9d\nBefore imposing a severe sanction based on principles of deterrence, a district court must\nconsider whether a lesser sanction is more proportionate to the misconduct.\nIn this case, we are imposing a lesser sanction. We did not dismiss this case, but rather\npermitted it to go the jury. Moreover, although counsel were warned during the trial that further\ndisruptive conduct would be a basis for criminal contempt, that sanction was not employed. We\nhave also elected not to deny Plaintiff\xe2\x80\x99s fee request altogether, though we are reducing it\nsignificantly. Additionally, our sanction is supported by \xe2\x80\x9cclear and convincing\xe2\x80\x9d evidence of\n\xe2\x80\x9cflagrant or egregious\xe2\x80\x9d misconduct demonstrating counsels\xe2\x80\x99 \xe2\x80\x9cbad faith.\xe2\x80\x9d In assessing attorney\nmisconduct, the Court had the benefit of an exhaustive evidentiary hearing concerning attorney\nmisconduct and trial transcripts replete with examples of unprofessional behavior. Most\nsignificantly, much of the misconduct in this matter occurred before the Court. Plaintiff\xe2\x80\x99s\ncounsels\xe2\x80\x99 continued misbehavior in the face of repeated verbal reprimands and warnings that\nthe Court intended to revisit counsels\' misconduct at a later date demonstrated counsels\xe2\x80\x99 \xe2\x80\x9cbad\nfaith.\xe2\x80\x9d\nThere is precedent for denying a party attorney\xe2\x80\x99s fees to which it was otherwise statutorily\nentitled as a sanction for attorney misconduct. In Litton Sys., Inc. v. American Tel. and Tel. Co.,\nthe Second Circuit Court of Appeals affirmed the district court\xe2\x80\x99s denial of attorney\xe2\x80\x99s fees to a\nprevailing plaintiff in an antitrust suit. The plaintiff was entitled to its costs and fees under,\namong other provisions, the Clayton Act. Though the Litton court based its decision on its power\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c616\nto sanction disobedience of court orders under Federal Rule of Civil Procedure 37(b), it noted\nthat \xe2\x80\x9cgiven the court\xe2\x80\x99s express findings of bad faith, it could also have imposed sanctions on the\nplaintiff as an exercise of its inherent powers.\xe2\x80\x9d\nIn addition, the Court reduces the rates sought by Plaintiff for associate work. Magistrate Judge\nBarry L. Garber recently found, by order dated May 5, 1999, that $125 was a reasonable hourly\nrate for associates. Magistrate Judge Stephen T. Brown, in a recommendation dated August 17,\n1999, noted that the parties agreed to an hourly rate of $125 for associates. Accordingly, the\nCourt finds that $125 is the prevailing hourly rate in the Southern District for associate work.\nThus, the work of Brian Torres, Raquel Libman, Jed Kurzban, and Florence Zolin shall be billed\nat a rate of $125 per hour. Peter Hoffer, who has eight years of civil rights litigation experience,\nshall be billed at $175.\n2. The number of hours reasonably expended\nDefendant argues that not all of the 3,269.54 hours claimed by Plaintiff were "reasonably\nexpended." Specifically, Defendant contends that Plaintiff claims hours from another case,\nwhich are not compensable in this matter, and that Plaintiff did not exercise proper billing\njudgment.\ni. Hours spent on another case\nDefendant points out that although Plaintiff initiated the action before this Court on March 21,\n1997, Plaintiff has submitted time records with dates as early as August 1994. Defendant\nsurmises that many of these entries are for work done on other cases and thus are not\ncompensable. Plaintiff replies that the Kurzban firm had begun representing Mr. Lee in 1994,\nbefore the firm\xe2\x80\x99s formal retention by Mr. Lee and commencement of this action, and that the\nwork underlying these entries was the basis for Plaintiff\xe2\x80\x99s hostile environment claim. Initially, Ira\nKurzban represents that he advised Mr. Lee and other black mechanics at American Eagle who\ncomplained of racism at American Eagle, then Flagship Airlines. Thereafter, Mr. Kurzban\nassisted Plaintiff in his negotiations with American Eagle and in his claims before the Equal\nEmployment Opportunity Commission.\nKurzban, Kurzban et al. may collect fees for legal services it provided Mr. Lee prior to\ncommencement of this action or its formal retention by Mr. Lee. Defendant does not seem to\ncontest this, but rather asks the Court to strike those hours it claims were clearly not spent on\nmatters related to this case.\nWe begin by striking those entries, dated prior to the commencement of this action, that appear\nto relate to motions practice and other matters in a pending lawsuit or which do not seem\nsufficiently related to this action. These entries add up to 137.15 hours. In addition, the Court\nreduces by 50% the remaining hours claimed between August 10, 1994 and January 2, 1997.\nWe find Plaintiff\xe2\x80\x99s documentation to be inadequate for purposes of demonstrating that these\nhours were reasonably expended in the litigation of this matter. While the information gathered\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c617\nat this stage was likely helpful in the eventual litigation of Mr. Lee\xe2\x80\x99s claims, the information was\nbeing gathered for other purposes. Accordingly, the Court is not convinced that all the time\nclaimed, or even most of it, was reasonably expended in the pursuit of Mr. Lee\xe2\x80\x99s claims.\nii Billing judgment\nFee applicants must exercise \xe2\x80\x9cbilling judgment.\xe2\x80\x9d That means that they must exclude from their\nfee applications \xe2\x80\x9cexcessive, redundant, or otherwise unnecessary hours,\xe2\x80\x9d which are hours \xe2\x80\x9cthat\nwould be reasonable to bill to a client and therefore to one\xe2\x80\x99s adversary irrespective of the skill,\nreputation or experience of counsel.\xe2\x80\x9d Defendant maintains that further reductions are warranted\nbased on Plaintiff\'s counsels\xe2\x80\x99 time and record keeping practices. Vague entries, according to\nDefendant, preclude the Court from determining that hours were reasonably expended, and\ncannot be cured by Plaintiff\xe2\x80\x99s counsel\xe2\x80\x99s post hoc, hand-written notes. Defendant also contests\ncounsels\xe2\x80\x99 repetitious charges, claims for hours spent by attorneys \xe2\x80\x9cgetting up to speed,\xe2\x80\x9d and\nexcessive time spent on certain activities.\nWhile wary of counsels\xe2\x80\x99 after-the-fact, clarifying notes, the Court does not ignore the added\ndetail and takes counsel at their word that the additions are supported by reference to red\nbooks, pertinent files, and their own memories. The Court is more concerned about the\nexcessive number of hours billed in this case in light of its nature. This case involved racial\nharassment endured by a single plaintiff at a single site of employment. Although this matter\nwas hotly contested, due in large part to overzealousness on both sides, the $1,611,910.50 in\nfees sought by Plaintiff\'s counsel based on 3,269.54 hours is clearly excessive. This view is\nsupported by a review of recent awards in employment discrimination cases in the Southern\nDistrict, which the Court may consider under Johnson. This case was not so much more lengthy\nor complex than these cases to justify such a grossly disproportionate award. Indeed, Judge\nHurley, following a eight-day trial, awarded $191,524.75 in attorneys\xe2\x80\x99 fees. The award followed\na jury verdict in favor of the plaintiff on her sexually hostile work environment and retaliation\nclaims.\nTo account for the excessive number of hours claimed in this case, we reduce Plaintiff\xe2\x80\x99s\ncounsels\xe2\x80\x99 hours by 40% across-the-board. In addition, the Court reduces by one-third Ira\nKurzban\xe2\x80\x99s non-contemporaneous October 8, 1998 entry, allotting 30 hours to the reading of \xe2\x80\x9call\nnew 11th Circuit cases on employment discrimination related to case\xe2\x80\x9d over the past six months.\n3. The lodestar figure\ni. Reasonable hours\nFor the period August 10, 1994 to January 2, 1997, after deleting hours unrelated to this\nlitigation, the Court recognizes 106.4 hours. We then reduce that figure by 50%, as explained\nabove, for Plaintiff\'s failure to establish that those hours were spent on matters sufficiently\nrelated to this litigation, leaving 53.2 hours. All but one of these hours was billed to Brian Torres\nor Raquel Libman; the other hour was billed to Ira Kurzban. For the period January 2, 1997 to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c618\nSeptember 14, 1999, the date the trial began, we recognize the following hours: 1,879.85 hours\nfor Ira Kurzban; 682.24 hours for Raquel Libman; 669.2 hours for Peter Hoffer; 28.6 hours for\nJed Kurzban; and 12 hours for Florence Zolin. Finally, for the trial period, we credit 81.7 hours to\nJed Kurzban.\nNext the Court cuts counsels\xe2\x80\x99 hours by 40% across-the-board for the period January 2, 1997\nthrough trial, having found, upon review of counsels\xe2\x80\x99 billing records and other employment\ndiscrimination cases in the District, counsels\xe2\x80\x99 claimed hours to be excessive:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nIra Kurzban:\n1,879.85 \xc3\x97 .6 = 1,127.91 hours\nRaquel Libman: 682.24 \xc3\x97 .6 = 409.34 hours\nPeter Hoffer: 669.2 \xc3\x97 .6 = 401.52 hours\nJed Kurzban:\n(28.6 + 81.7) \xc3\x97 .6 = 66.18 hours\nFlorence Zolin: 12 \xc3\x97 .6 = 7.2 hours\n\nii. Multiplied by the reasonable hourly rates\nAssociates:\nPeter Hoffer:\nIra Kurzban:\nFinal lodestar:\n\n534.92[13] \xc3\x97 $125 = $66,865\n401.52 \xc3\x97 $175 = $70,266\n1,128.91[14] \xc3\x97 $150 = $169,336.50\n$306,467.50\n\n4. The results obtained\nAs noted above, the lodestar may then be adjusted for the results obtained. This factor is\nparticularly important where, as here, Plaintiff is deemed \xe2\x80\x9cprevailing\xe2\x80\x9d even though he succeeded\non only one of his claims for relief.\nThe Court finds that as in many civil rights cases, Plaintiff\xe2\x80\x99s claims involve a common core of\nfacts and related legal theories. Accordingly, the Court does not treat Plaintiff\xe2\x80\x99s suit as a series\nof discrete claims, readily separated for purposes of apportioning hours between prevailing and\nnon-prevailing claims. Rather, the Court focuses on the overall results achieved by Plaintiff in\nrelation to the hours reasonably expended by Plaintiff\xe2\x80\x99s counsel on the litigation. Having done\nthis, the Court finds that Plaintiff achieved only limited success, rendering the product of the\nhours reasonably expended on the litigation as a whole and the reasonable hourly rates an\nexcessive fee recovery. While Plaintiff\xe2\x80\x99s recovery on his hostile environment claim was\nsignificant, he was unable to convince the jury that he had been discharged based on his race.\nMoreover, the Court dismissed on summary judgment Plaintiff\xe2\x80\x99s claims for intentional and\nnegligent infliction of emotional distress, as well as his state civil rights claims. At trial, the Court\ngranted Defendant\xe2\x80\x99s Motion for Judgment as a Matter of Law on Plaintiff\xe2\x80\x99s claims of negligent\ntraining, retention, and supervision. Even though Plaintiff\xe2\x80\x99s claims were \xe2\x80\x9cinterrelated,\nnonfrivolous, and raised in good faith,\xe2\x80\x9d we may reduce the lodestar to account for his limited\nsuccess.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c619\nFor guidance in reducing the lodestar, we turn to Bohen v. City of E. Chicago, a case involving\nsimilar facts: plaintiff prevailed on her sexual harassment claim, but failed on her discriminatory\ndischarge claim. Judge Easterbrook, sitting by designation, reduced the plaintiff\xe2\x80\x99s fees to\naccount for her limited success, but did so only by 10% across-the-board. He noted that the\nsame witnesses dealt with both aspects of the case and that since the claimed harassment was\nextensive, it would have been necessary to examine the plaintiff\xe2\x80\x99s whole period of employment\neven without the discharge claim. Noting that at least some time was spent solely on the\ndischarge claim, though he could not say precisely how much, Judge Easterbrook concluded\nthat the plaintiff\xe2\x80\x99s counsel would have spent about 90% of the time it did had there been no\ndischarge claim. The same reasoning applies here. However, the Court awards Plaintiff 80% of\nthe lodestar, estimating that 20% of Plaintiff\'s counsels\xe2\x80\x99 time was devoted exclusively to the\ndischarge claim. Specifically, the Court finds that significant time was spent by Plaintiff\nexamining Defendant\xe2\x80\x99s alleged early release program, which was only tangentially related to the\nhostile environment claim.\nFinal lodestar figure adjusted for results obtained: $306,467.50 \xc3\x97 .8 = $245,174\nIV. Costs\nThe Court recognizes that the traditional limits on what costs may be taxed,do not apply to\nrequests submitted under \xc2\xa7 1988 and that the Eleventh Circuit traditionally takes a liberal\napproach when reimbursing attorney expenses. However, Plaintiff still bears the burden of\nsubmitting a request for expenses that would enable the Court to determine what expenses\nwere incurred and whether Plaintiff is entitled to them. Plaintiff\'s entries for photocopy,\ntelephone, and fax charges are wholly devoid of explanation. The Court has no way of knowing\nwhether the rates paid for the photocopies were reasonable or even whether these expenses\nwere related to this action. Therefore, the Court will not tax these costs or others that lack\ndescription. Moreover, the Court finds that the costs incurred prior to commencement of the\naction are not taxable.\nHaving deleted expenses associated with the above-described entries, we tax $67,150.63 as\ncosts.\nV. Conclusion\nAs I considered this issue, I reflected upon a letter recently received from a trial lawyer following\na discussion on civility and professionalism with the Miami Chapter of the American Board of\nTrial Advocates. This lawyer stated:\nIt seems to me that the courts are basically facing this issue as one of education. Hence\nwe have seminars, guidelines and articles from both that state and federal bench\nexplaining what lawyers should do to be civil and professional to each other. However, I\ndo not think that problem is that lawyers do not know how to act in a civil manner.\nRather, I think some lawyers will simply do that with which they can get away.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c620\nSpecial masters, grievance committees and educational seminars are not as effective as\na sanction for uncivil behavior.\nI know our federal court is quite busy and that the time it takes to consider uncivil\nbehavior may have to be taken from some other pending case. However, I would submit\nthat eliminating uncivil behavior not only helps that case, but every other case in which\nthat lawyer is involved. Moreover, as the word spreads as to the price to be paid for\nunprofessionalism, other lawyers and other cases will be implicated.\nI believe that this reduction in attorney fees is an appropriate response to the conduct by\nPlaintiff\xe2\x80\x99s counsel in this case, but I am not convinced it will deter future misconduct. I frankly\nconsidered denying fees altogether but while I have reviewed many of the depositions, I did not\nobserve everything that happened during the pretrial phase of the case. The reduction in\nattorneys\xe2\x80\x99 fees based upon misconduct of counsel is therefore approximately $358,423.20.\nFor the foregoing reasons, it is hereby ORDERED AND ADJUDGED that Plaintiff\'s Amended\nVerified Motion for Attorney\'s Fees and Costs is GRANTED. Based on the foregoing we award\nPlaintiff $312,324.63 in fees and costs.\nFurthermore, because of the misconduct of counsel which occurred in this case, a copy of this\norder shall be sent to the Florida Bar and the Peer Review Committee for the Southern District\nof Florida for any action deemed appropriate.\nQuestions:\n1. This article from the New York Post provides some additional information about the case\nand the judge. Marvin Kurzban and Ira J. Kurzban were partners in a Florida law firm.\nMarvin Kurzban was disciplined by the Florida Bar for his conduct in this action. In 2019,\nanother disciplinary complaint was filed against him, for violating an evidentiary ruling\nand insulting the judge and opposing counsel. He petitioned for disciplinary revocation\nwithout leave for readmission, and is currently disbarred in Florida. Ira Kurzban is still\npracticing, teaches immigration law at the University of Miami School of Law as an\nadjunct professor, and is the author of Kurzban\xe2\x80\x99s Immigration Law Sourcebook.\n2. Was the court justified in criticizing the conduct of Marvin and Ira Kurzban? Does it\nmatter that they won? Does it matter that the jury imposed substantial punitive damages\non the defendant?\n3. Was the court justified in reducing the attorney\xe2\x80\x99s fees and costs award? If so, did it go\ntoo far or not far enough? Could the court have denied attorney\xe2\x80\x99s fees and costs\naltogether?\nLimitations on Inherent Authority\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c621\n\nOphelia F. Cami\xc3\xb1a\nPositive Software Solutions v. New Century Mortg., 619 F. 3d 458 (5th Cir. 2010)\nSummary: Positive Software filed an infringement action against New Century, which\nwas represented by Cami\xc3\xb1a. The district court sent the action to arbitration, then\nvacated the award, because the arbitrator failed to disclose a previous relationship with\nCami\xc3\xb1a. The circuit court reversed and remanded, at which point New Century declared\nbankruptcy, and the parties settled. As part of the settlement, New Century assigned its\nattorney-client privilege and work product rights to Positive Software, which moved for\nsanctions against Cami\xc3\xb1a, based on her actions in the arbitration. The district court\nexercised its inherent authority and imposed a $10,000 sanction for acting in bad faith,\nbut the circuit court reversed, holding that actions in arbitration are outside the inherent\nauthority of the court.\nJERRY E. SMITH, Circuit Judge:\nOphelia Cami\xc3\xb1a appeals the district court\xe2\x80\x99s imposition of sanctions for her conduct during\narbitration. Because that court lacked inherent authority to impose those sanctions, we reverse\nand remand.\nI.\nIn 2003, Positive Software Solutions, Inc., sued New Century Mortgage Corporation for\nallegedly infringing telemarketing software licensed to New Century. Ophelia Cami\xc3\xb1a, a partner\nat Susman Godfrey LLP, appeared as attorney for New Century. Over Positive Software\xe2\x80\x99s\nobjection, the district court ordered the case to arbitration in accordance with the parties\xe2\x80\x99\ncontract.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c622\nDuring arbitration, Cami\xc3\xb1a advised New Century on various discovery matters. In September\n2004, the district court vacated the award because the arbitrator had failed to disclose his\nprevious professional relationship with Cami\xc3\xb1a. This court reversed the vacatur and remanded.\nAfter remand, New Century declared bankruptcy. In the course of the bankruptcy proceedings,\nPositive Software settled its claims against New Century, and the case was administratively\nclosed. Under the settlement, New Century waived and assigned to Positive Software its\nattorney-client and work-product rights. The district court granted Positive Software\xe2\x80\x99s demand\nthat Susman Godfrey LLP turn over its files for use by Positive Software in pursuing sanctions.\nIn March 2008, Positive Software moved for sanctions against Cami\xc3\xb1a, Barry Barnett, and\nSusman Godfrey LLP under Federal Rule of Civil Procedure 37, 28 U.S.C. \xc2\xa7 1927, and the\ncourt\xe2\x80\x99s inherent authority. In February 2009, using its purported inherent authority, the court\nsanctioned Cami\xc3\xb1a $10,000, representing a portion of Positive Software\'s attorneys\xe2\x80\x99 fees.\nCami\xc3\xb1a appeals the sanction.\nIII.\nCami\xc3\xb1a claims that the district court lacked inherent authority to impose sanctions for her\nconduct during arbitration. In the alternative, she argues that the court employed the wrong\nstandard of proof in finding that she acted in bad faith, and that the sanctions were not\nsupported by the evidence. Because the court lacked inherent authority to sanction Cami\xc3\xb1a for\nher actions during arbitration, we need not address her alternative claims.\nA.\nA district court has the inherent authority to impose sanctions \xe2\x80\x9cin order to control the litigation\nbefore it.\xe2\x80\x9d The court may also use that power to sanction conduct, if it is \xe2\x80\x9cin direct defiance of the\nsanctioning court,\xe2\x80\x9d or constitutes \xe2\x80\x9cdisobedience to the orders of the Judiciary,\xe2\x80\x9d Inherent power,\nhowever, \xe2\x80\x9cmay be exercised only if essential to preserve the authority of the court.\xe2\x80\x9d\nIn Maxxam, we confirmed the limited reach of the court\xe2\x80\x99s inherent authority. There the FDIC\nsued Charles Hurwitz, alleging that he was responsible for the failure of a savings and loan\nassociation. The FDIC also encouraged the Office of Thrift Supervision to pursue similar claims\nin an administrative proceeding. The FDIC moved that the district court stay its case pending\ncompletion of the OTS proceeding. When the district court denied that motion, the FDIC\ncontinued to support the administrative action. Invoking its inherent powers, the court\nsanctioned the FDIC for Hurwitz\xe2\x80\x99s expenses in defending the OTS action. We reversed part of\nthose sanctions on the ground that the inherent power does not extend to collateral proceedings\nthat \xe2\x80\x9cdo not threaten the court\xe2\x80\x99s own judicial authority or proceedings.\xe2\x80\x9d Inherent authority \xe2\x80\x9cis not\na broad reservoir of power, ready at an imperial hand, but a limited source; an implied power\nsqueezed from the need to make the court function.\xe2\x80\x9d\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c623\nHere the district court distinguished Maxxam, positing that arbitration is not a collateral\nproceeding but instead an \xe2\x80\x9cannex\xe2\x80\x9d to litigation. It reasoned that because the court ordered the\nparties to arbitrate, it retained the authority to impose sanctions for conduct committed in\narbitration. That approach is puzzling. To begin with, arbitration is not an annex to litigation, but\nan alternative method for dispute resolution. Treating arbitration as if it were an appendage to\nadjudication is a mistake that would undermine the very purpose of arbitration \xe2\x80\x94 \xe2\x80\x9cthe provision\nof a relatively quick, efficient and informal means of private dispute settlement.\xe2\x80\x9d Parties agree to\narbitration to avoid litigation; they voluntarily surrender judicial remedies in favor of an\nextrajudicial process.\nFurthermore, the notion that the court\xe2\x80\x99s inherent authority turns on whether the arbitration was\n\xe2\x80\x9ccourt-ordered\xe2\x80\x9d is untenable. Positive Software claims that the district court retained significant\nsupervisory authority by virtue of ordering the parties to arbitrate. When asked, in oral argument,\nwhether the court would have had inherent authority to sanction Cami\xc3\xb1a if the parties had\nchosen to enter arbitration at the outset, Positive Software\xe2\x80\x99s counsel candidly stated, \xe2\x80\x9cof course\nnot \xe2\x80\x94 that\xe2\x80\x99s Maxxam.\xe2\x80\x9d Positive Software\xe2\x80\x99s distinction, then, would allow trial courts to oversee\narbitrations in which one party had to be compelled to arbitrate but not those in which both\nparties complied with their arbitration agreement. Such a significant and perverse asymmetry\ncannot be justified, and Positive Software\xe2\x80\x99s efforts to distinguish this case from Maxxam are\nunavailing.\nIn an attempt to rescue the sanctions order, Positive Software additionally claims that the\nsanctions are based on Cami\xc3\xb1a\xe2\x80\x99s direct defiance of the preliminary injunction and protective\norder. That assertion, however, is belied by the court\xe2\x80\x99s own explicit explanation that the\nsanctioned conduct \xe2\x80\x9ctook place in connection with the arbitration, not in connection with\ndiscovery under the Court\'s supervision.\xe2\x80\x9d In other words, the court imposed sanctions not on\naccount of any direct violation of a court order, but only because it found that Cami\xc3\xb1a had\nexhibited four particular instances of bad faith during arbitration.\nPositive Software\xe2\x80\x99s argument, therefore, fails according to the court\xe2\x80\x99s own findings. Because\nCami\xc3\xb1a\xe2\x80\x99s conduct was neither before the district court nor in direct defiance of its orders, the\nconduct is beyond the reach of the court\xe2\x80\x99s inherent authority to sanction.\nB.\nNot only are the sanctions at odds with our caselaw on inherent authority, but they also are in\nserious tension with the Federal Arbitration Act. Under the FAA, the district court has the\nauthority to determine (1) whether arbitration should be compelled, and (2) whether an\narbitration award should be confirmed, vacated, or modified. Beyond those narrowly defined\nprocedural powers, the court has no authority to interfere with an arbitration proceeding.\nBecause both parties agree that their contract gave the arbitrator authority to sanction Cami\xc3\xb1a\nfor bad-faith conduct, the FAA counsels against the district court\xe2\x80\x99s assigning itself that task.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c624\nPositive Software cites LaPrade v. Kidder Peabody & Co., to resolve the apparent tension\nbetween the sanction order and the FAA. In LaPrade, the district court stayed an action brought\nby Linda LaPrade against her former employer because the dispute was covered by a valid\narbitration agreement. While the arbitration was pending, LaPrade\xe2\x80\x99s attorney went into state\ncourt and obtained an ex parte order staying the arbitration without informing that court of the\ndistrict court\xe2\x80\x99s previous order. On the employer\xe2\x80\x99s motion, the district court lifted the state court\xe2\x80\x99s\nstay and imposed sanctions against LaPrade\xe2\x80\x99s attorneys under 28 U.S.C. \xc2\xa7 1927 for their\n\xe2\x80\x9cvexatious and dilatory tactics.\xe2\x80\x9d On appeal, the District of Columbia Circuit upheld the sanctions,\nconcluding that the FAA did not divest the district court of jurisdiction to enter the sanctions\norder.\nLaPrade, however, does not support the district court\'s exercise of inherent power against\nCami\xc3\xb1a. First, LaPrade held only that the FAA does not affect the district court\xe2\x80\x99s jurisdiction over\na case stayed pending arbitration. But jurisdiction alone does not create the inherent power to\nsanction arbitration conduct. That power must be grounded in some threat to the court\xe2\x80\x99s\nauthority or its ability to function and must not be contrary to statute. Unlike the court in\nLaPrade, which involved sanctions under a specific statutory provision, the district court here\nrelied only on its inherent authority, which, as noted, was not up to the task.\nFurthermore, it is misleading to suggest that LaPrade\xe2\x80\x99s attorneys were sanctioned for conduct in\narbitration. Instead, the court imposed sanctions for the direct violation of its order. In staying\nthe federal suit, the court mandated that LaPrade seek redress of her employment-related\ngrievances only through arbitration. By obtaining a stay of arbitration in state court, her\nattorneys disregarded that order, thereby posing a threat to the federal district court\xe2\x80\x99s authority.\nThat conduct might have been analogous to what happened here if Cami\xc3\xb1a\xe2\x80\x99s sanctions had\nrested on her violation of the preliminary injunction or the protective order. But as already\ndiscussed, the district court found no such violation.\nC.\nFinally, and perhaps most importantly, the sanctions order threatens unduly to inflate the\njudiciary\xe2\x80\x99s role in arbitration. The FAA provides for minimal judicial involvement in resolving an\narbitrable dispute; the court is limited to only a few narrowly defined, largely procedural tasks.\nBut by using its power to sanction, a court could seize control over substantive aspects of\narbitration. The court would, in effect, become a roving commission to supervise a private\nmethod of dispute resolution and exert authority that is reserved, by statute, caselaw, and longstanding practice, to the arbitrator. That supervision is inconsistent with the scope of inherent\nauthority and with federal arbitration policy, which aims to prevent courts from delaying the\nresolution of disputes through alternative means.\nIn response, Positive Software claims that expansion of district court authority is necessary\nhere, because Positive Software did not discover some of Cami\xc3\xb1a\xe2\x80\x99s alleged misdeeds until after\nthe case had been settled and administratively closed. Positive Software argues that without the\ndistrict court\xe2\x80\x99s assertion of inherent authority, there would have been no means to redress\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c625\nCami\xc3\xb1a\'s supposed wrongdoing. That argument, however, ignores at least two other\nprocedures that were available to Positive Software.\nFirst, it could have asked the American Arbitration Association to re-open the proceedings so it\ncould request sanctions from the arbitrator. Second, it could have relied on the grievance\nprocess. In fact, it did: Its counsel filed a grievance against Cami\xc3\xb1a, which was dismissed as\nlacking just cause. Contrary to Positive Software\xe2\x80\x99s contentions, then, there was no particular\nneed for the district court to expand its inherent authority to prevent misdeeds from falling\nthrough the cracks.\nIV.\nIn sum, the district court lacked inherent authority to sanction Cami\xc3\xb1a for her conduct during\narbitration. That conduct was neither before the district court nor in direct defiance of its orders.\nIf inherent authority were expanded to cover Cami\xc3\xb1a\xe2\x80\x99s conduct, there would be nothing to\nprevent courts from inserting themselves into the thicket of arbitrable issues \xe2\x80\x94 precisely where\nthey do not belong. Such an expansion would also threaten the integrity of federal arbitration\nlaw in the name of filling a gap that does not exist. We therefore REVERSE the sanctions95 and\nREMAND for any further proceedings that may be needed.\nQuestions:\n1. Why did the circuit court hold that Cami\xc3\xb1a\xe2\x80\x99s conduct was outside the scope of the district\ncourt\xe2\x80\x99s inherent authority? Why didn\xe2\x80\x99t it matter that the district court had sent the action\nto arbitration?\n2. The district court had the authority to review at least some aspects of the arbitration.\nWhy didn\xe2\x80\x99t that place Cami\xc3\xb1a\xe2\x80\x99s conduct during the arbitration within the scope of its\ninherent authority?\n3. Notably, New Century was a subsidiary of New Century Financial Corporation, a real\nestate investment trust, and one of the largest issuers of subprime mortgages. When\nNew Century filed for bankruptcy in 2007, it signaled the beginning of the subprime\nmortgage crisis.\nCandor to the Court\n\n95\n\nWe do not condone Cami\xc3\xb1a\xe2\x80\x99s complained-of actions as they are alleged to have occurred. The clerk is\ndirected to send a copy of this opinion to the Office of the General Counsel of the State Bar of Texas. We\nare mindful that the State Bar declined to act on this matter in response to Positive Software\xe2\x80\x99s request,\nand we express no view on whether the State Bar should consider this matter further or, if it does, on\nwhat action it should take. We opine only that the federal courts are without power to issue sanctions\nunder these particular facts.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c626\n\nThe Orlando Sentinel (Orlando, Florida), Tues., Dec. 3, 1985, at 45\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c627\n\nThe Orlando Sentinel (Orlando, Florida), Fri., Jan. 10, 1986, at 149\nJorgenson v. Volusia County, 846 F. 2d 1350 (11th Cir. 1988)\nSummary: Porky\xe2\x80\x99s was a topless bar outside of DeLand, Florida. When Volusia County\npassed an ordinance prohibiting topless bars, Porky\xe2\x80\x99s challenged the constitutionality of\nthe ordinance, represented by Latinsky and Fendt. The standard of review of the\nordinance depended on whether Florida had delegated its powers under the 21st\nAmendment to counties and municipalities. In City of Daytona Beach v. Del Percio, the\nFlorida Supreme Court held that it had, but Latinsky and Fendt argued that it hadn\xe2\x80\x99t, and\ndid not cite Del Percio. The district court sanctioned them under Rule 11 for intentionally\nfailing to cite controlling adverse precedent and the circuit court affirmed.\nPER CURIAM:\nThe appellants, attorneys Eric Latinsky and Fred Fendt, were sanctioned by the district court\npursuant to Fed. R. Civ. P. 11 for failing to cite adverse, controlling precedent in a memorandum\nfiled in support of an application for a temporary restraining order and a preliminary injunction. In\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c628\nthe appellants\xe2\x80\x99 initial appeal to this court, the case was remanded to the district court because\nthe court had failed to notify the attorneys in advance that it was considering sanctions, and did\nnot give them an opportunity to respond. On remand, the district court reaffirmed the imposition\nof sanctions, and the attorneys appeal. We affirm.\nAppellants filed an application in the district court for a temporary restraining order and a\npreliminary injunction on behalf of their clients, who own and operate a lounge known as\n\xe2\x80\x9cPorky\xe2\x80\x99s.\xe2\x80\x9d In support of the application, appellants filed a memorandum of law which challenged\nthe validity of a Volusia County ordinance prohibiting nude or semi-nude entertainment in\ncommercial establishments at which alcoholic beverages are offered for sale or consumption.\nThe memorandum failed to discuss or cite two clearly relevant cases: City of Daytona Beach v.\nDel Percio and New York State Liquor Authority v. Bellanca. We find that this failure supports\nthe imposition of Rule 11 sanctions in the circumstances of this case.\nThe field of law concerning the regulation of the sale and consumption of alcohol in connection\nwith nude entertainment is a narrow and somewhat specialized field. Prior to the opinion of the\nSupreme Court of Florida in Del Percio, the critical question of whether the state of Florida had\ndelegated its powers under the Twenty-First Amendment to counties and municipalities had\ngone unanswered. In some circles, that decision was long-awaited. If the state had delegated\nthe authority, local ordinances regulating the sale or consumption of alcohol would be entitled to\na presumption in favor of their validity which is conferred by the Twenty-First Amendment. If the\nstate had not delegated the authority, the ordinances would be subject to the stricter review\napplicable to exercises of the general police power.\nThe question regarding Florida\xe2\x80\x99s delegation of its powers under the Twenty-First Amendment\nwas answered by the Supreme court of Florida in Del Percio, a case in which one of the\nappellants, Latinsky, participated. The court held that the powers had been delegated. Less\nthan one year later, on or about January 13, 1986, Latinsky and an associate brought the\ninstant suit seeking a declaration that a similar ordinance was unconstitutional and requesting a\ntemporary restraining order and a preliminary injunction. In their presentation to the court, the\nappellants cited a number of cases describing the limits on the exercise of the general police\npower. However, they did not advise the court in any way that Del Percio had been decided,\ndespite the fact that Del Percio required that the validity of the ordinance be judged in light of\npowers retained under the Twenty-First Amendment rather than the general police power.\nThe appellants purported to describe the law to the district court in the hope that the description\nwould guide and inform the court\xe2\x80\x99s decision. With apparently studied care, however, they\nwithheld the fact that the long-awaited decision by the Supreme Court of Florida had been\nhanded down. This will not do. The appellants are not redeemed by the fact that opposing\ncounsel subsequently cited the controlling precedent. The appellants had a duty to refrain from\naffirmatively misleading the court as to the state of the law. They were not relieved of this duty\nby the possibility that opposing counsel might find and cite the controlling precedent, particularly\nwhere, as here, a temporary restraining order might have been issued ex parte.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c629\nIn this court, appellants argue that the cases were not cited because they are not controlling.\nWe certainly acknowledge that attorneys are legitimately entitled to press their own\ninterpretations of precedent, including interpretations which render particular cases inapplicable.\nIt is clear, however, that appellants\xe2\x80\x99 attempts to show that Del Percio and Bellanca are not\ncontrolling are simply post hoc efforts to evade the imposition of sanctions. Neither the original\ncomplaint nor the memorandum of law filed by appellants in the district court reflect or support\nthe arguments they now raise. Indeed, it is likely that the arguments were not raised previously\nbecause they are completely without merit. In the circumstances of this case, the imposition of\nRule 11 sanctions by the district court was warranted. The judgment of the district court is\naffirmed.\nQuestions:\n1. You can read newspaper articles about Porky\xe2\x80\x99s here and here. After the court\xe2\x80\x99s ruling in\n1986, the bar changed to a \xe2\x80\x9cbottle club,\xe2\x80\x9d where patrons purchased alcohol elsewhere\nand mixed their own drinks, in order to avoid the ordinance, but soon closed. You can\nread a newspaper article about the disciplinary case against Latinsky and Fendt case\nhere. The district court accused them of \xe2\x80\x9creprehensible\xe2\x80\x9d conduct and imposed a $500\nfine. Do you think that is adequate?\n2. Model Rule 3.3(a)(2) provides: \xe2\x80\x9cA lawyer shall not knowingly fail to disclose to the\ntribunal legal authority in the controlling jurisdiction known to the lawyer to be directly\nadverse to the position of the client and not disclosed by opposing counsel.\xe2\x80\x9d Latinsky\nand Fendt argued that the action challenging the ordinance was in federal court, so the\ndecision of the Florida Supreme Court was not controlling. Should that have excused\ntheir failure to cite it? What if the district court had to independently determine whether\nFlorida had delegated its authority?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c630\n\nBoard of Ethics & Conduct v. Lane, 642 N.W.2d 296 (Iowa 2002)\nSummary: Lane represented Sicard in an employment discrimination action. Among\nother things he filed a post-trial brief, the entire contents of which were plagiarized from\na treatise. Lane won the trial, and submitted a bill for attorney\xe2\x80\x99s fees, requesting $16,000\nfor 80 hours drafting the post-trial brief. When the court requested documentation of the\ndrafting of the brief, Lane eventually submitted a list of 200 sources, from which the court\ndiscovered his plagiarism. The court sanctioned Lane\xe2\x80\x99s conduct and suspended his\nlicense for 6 months.\nSTREIT, Justice.\nAn Iowa attorney passed someone else\xe2\x80\x99s writing as his own and claimed he spent almost two\nweeks writing that which he used. The Iowa Supreme Court Board of Professional Ethics and\nConduct filed a complaint with our Grievance Commission against respondent, William J. Lane,\nalleging he violated several ethical rules and recommended we suspend Lane\xe2\x80\x99s license to\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c631\npractice law for three months. We agree with the Commission\'s findings of misconduct but\nsuspend Lane\xe2\x80\x99s license for six months.\nI. Background Facts and Proceedings\nAfter the conclusion of a trial in federal court in which Daniel Sicard claimed a violation of the\nAmericans with Disabilities Act, attorney Lane submitted a post-trial brief to the court. The legal\nportion of the brief was in great part plagiarized from a treatise written by Barbara Lindemann\nand Paul Grossman. Lane later applied to the court for attorney fees. Among other charges,\nLane requested compensation for eighty hours of work spent to prepare the questioned brief.\nCharging $200 per hour, Lane asked for $16,000 to write the brief that was largely copied from\nan uncredited source. In total, Lane requested $104,127 in attorney fees plus $13,363.29 in\ncosts for his representation of Sicard.\nOn May 5, 1998, there was a hearing on Lane\xe2\x80\x99s attorney fee application. The United States\nmagistrate judge stated it did not appear to him that Lane wrote the legal portions of the brief.\nLane responded, \xe2\x80\x9cI borrowed liberally from other sources. Yes, your Honor.\xe2\x80\x9d The court noted,\nBecause of the consistency of style and the sequence of footnotes, the court assumes\nthat the brief is from a particular source. If the source is a published treatise, it can\nsimply be identified by name, author, and publisher.\nTo address this suspicion, the judge ordered Lane to explain or identify the sources cited in his\nbrief within ten days. At the end of the ten days, Lane did nothing to comply with the court\xe2\x80\x99s\norder. On June 4, 1998, a member of the judge\xe2\x80\x99s staff asked Lane if he intended to respond to\nthe order. Only days later, a fire at Lane\xe2\x80\x99s home destroyed many of his files and records in the\nSicard matter. In July 1998, Lane closed his office, but continued to practice out of his home.\nFour months passed and Lane still did not respond to the judge\xe2\x80\x99s order. On September 30,\n1998, the judge entered an order awarding Lane $20,000 in fees in the Sicard case. The judge\nstated \xe2\x80\x9cthere were many serious problems with plaintiff\xe2\x80\x99s fees and cost claim.\xe2\x80\x9d The court was\nparticularly concerned because Lane did not support his contention he was entitled to receive\ncompensation at the rate of $200 per hour for his services. Lane also requested $9000 as\ncompensation for the time he spent preparing his bill. The judge stated Lane requested $16,000\nfor the lifted brief but failed to comply with the court\xe2\x80\x99s order to \xe2\x80\x9cdisclose the sources from which\ncounsel \xe2\x80\x98borrowed liberally.\xe2\x80\x99\xe2\x80\x9d Lane also requested compensation for fifty-nine hours of legal\nresearch preceding the trial. The court concluded\nIt is not reasonable to bill 59 hours of legal research in the two weeks prior to trial. If\ncounsel spent this amount for time performing research, it is further evidence that he\ndoes not possess the skill and experience of those who charge $200 per hour.\nThe court further explained its reduction of the attorney fees awarded by citing to Lane\xe2\x80\x99s\ncharges of $5.00 per telephone call, $1.00 per page of facsimile transmissions, $191 for long\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c632\ndistance transmission, and $.50 per photocopy. Finally, the court stated Lane did not cite\nauthority for the ability to charge for estimated pretrial travel expenses. Lane did not appeal the\n$20,000 award of attorney fees.\nOn October 30, 1998, Lane filed a compliance with the judge\xe2\x80\x99s order to document his sources\nbut the judge was not made aware of the compliance until March 1999. When the judge read\nLane\xe2\x80\x99s compliance he did not notice any reference to the primary source of the legal portion of\nLane\xe2\x80\x99s brief. Lane\xe2\x80\x99s compliance constituted four pages of single-spaced lists of authorities.\nAmong them was the Grossman treatise. However, no particular attention was drawn to this\nsource. Consequently, the judge undertook his own investigation and discovered Lane took the\nlegal portion of his brief verbatim from the Grossman treatise.\nThis complaint also involves Lane\xe2\x80\x99s representation in two separate and unrelated bankruptcy\ncases. The Ethics Board charged Lane with, among other violations, neglect of clients\xe2\x80\x99 legal\nmatters, withdrawal from employment without taking reasonable steps to avoid prejudice to his\nclients and without promptly refunding unearned fees, and failure to seek the lawful objectives of\nhis clients. The Commission found, and we agree, the Ethics Board failed to satisfy its burden to\nprove Lane violated any ethical rules in representing his clients in the bankruptcy matters.\nTherefore, we will only address the charges relevant to the Sicard case.\nIII. Complaint\nThe Ethics Board alleges violations of DR 1-102(A)(1), (3), (4), (5), and (6). This rule provides in\npart, a lawyer shall not:\n\xe2\x97\x8f Violate a disciplinary rule;\n\xe2\x97\x8f Engage in illegal conduct involving moral turpitude;\n\xe2\x97\x8f Engage in conduct involving dishonesty, fraud, deceit or misrepresentation;\n\xe2\x97\x8f Engage in conduct that is prejudicial to the administration of justice; and\n\xe2\x97\x8f Engage in any other conduct that adversely reflects on the fitness to practice law.\nThe Ethics Board also charges Lane with a violation of DR 2-106(A) which states, \xe2\x80\x9ca lawyer\nshall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee.\xe2\x80\x9d The\nCommission found Lane violated DR 1-102(A)(1), (3), (4), (5), and (6) and DR 2-106(A) by his\nhandling of the Sicard case.\nIV. Ethical Violations\nLane plagiarized from a treatise and submitted his plagiarized work to the court as his own. This\nplagiarism constituted, among other things, a misrepresentation to the court. An attorney may\nnot engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. This issue is\nakin to the matter of ghost-writing attorneys who \xe2\x80\x9cauthor pleadings and necessarily guide the\ncourse of the litigation with unseen hand.\xe2\x80\x9d In this situation, an attorney authors court documents\nfor a pro se litigant who, in turn, submits the court document as his or her own writing. This\npractice is widely condemned as unethical and a \xe2\x80\x9cdeliberate evasion of the responsibilities\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c633\nimposed on attorneys.\xe2\x80\x9d Just as ghost writing constitutes a misrepresentation on the court, so\ndoes plagiarism of the type we have before us.\nPlagiarism itself is unethical. \xe2\x80\x9cPlagiarism, the adoption of the work of others as one\xe2\x80\x99s own, does\ninvolve an element of deceit, which reflects on an individual\'s honesty.\xe2\x80\x9d Use of \xe2\x80\x9cappropriated\nmaterial cannot go undisciplined, especially because honesty is so fundamental to the\nfunctioning of the legal profession.\xe2\x80\x9d Undoubtedly, Lane\xe2\x80\x99s plagiarism reflects poorly on both his\nprofessional ethics and judgment.\nIt was not difficult to find similarity between Lane\xe2\x80\x99s post-trial brief and the Grossman treatise.\nThe legal argument of Lane\xe2\x80\x99s post-trial brief consisted of eighteen pages of plagiarized material,\nincluding both text and footnotes, from the treatise. In copying this material, Lane cherry-picked\nthe relevant portions and renumbered the footnotes to reflect the altered text. Examination of\nLane\xe2\x80\x99s brief does not reveal any independent labor or thought in the legal argument.\nOn the first occasion plagiarism became an issue, Lane appeared to be forthcoming with the\ncourt and admitted \xe2\x80\x9che borrowed liberally from other sources.\xe2\x80\x9d It also appears Lane attempted to\nidentify the source of his writing before the court but was unable to recall the exact title of the\ntreatise. Lane later had the chance to identify his source to the court, but when he responded to\nthe court\'s order, he failed to specifically draw the court\'s attention to the Grossman treatise.\nInstead, Lane buried the title within a list of over 200 other sources. Though a technical\ncompliance with the court\xe2\x80\x99s order, Lane\xe2\x80\x99s continued lack of candor indicates he hoped, by\nconcealing the treatise among 200 other titles, the judge would not recognize the extent of\nLane\xe2\x80\x99s plagiarism.\nWe do recognize Lane\xe2\x80\x99s personal circumstances shortly after the time of the court\xe2\x80\x99s order were\nnot ideal. Lane\xe2\x80\x99s home was nearly destroyed by the fire forcing him and his family to live in a\nmotel for two months. However, this does not excuse his failure to comply with the court\'s order\nin a timely fashion. We will not excuse the seriousness of passing off another\xe2\x80\x99s work as one\xe2\x80\x99s\nown. We find the record shows Lane knowingly plagiarized and intended to deceive the court.\nEqually troubling is Lane\xe2\x80\x99s application for attorney fees. Lane copied the entire portion of his\nlegal argument out of a book and then claimed it took him eighty hours to write the brief\ncontaining the copied material. He requested attorney fees for this work at the rate of $200 per\nhour. Other than Lane\xe2\x80\x99s assertions that perhaps he works less efficiently than other lawyers,\nthere is little in the record to indicate Lane actually spent this amount of time writing the brief.\nBecause he plagiarized the entire legal argument, the chances are remote that it took Lane\neighty hours to write the argument. Rather, the facts show Lane stole all eighteen pages of his\nlegal argument from a single source. Then to justify his request for attorney fees for the eighty\nhours it took to \xe2\x80\x9cwrite\xe2\x80\x9d the brief, Lane submitted a list of over 200 legal sources to the court. In\ndoing so, Lane attempted to have the court believe he researched and relied on each of these\nsources in writing the brief. These circumstances only support the conclusion Lane endeavored\nto deceive the court.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c634\nThe Ethics Board argues Lane\'s plagiarism was part of a larger scheme to defraud the court by\nmeans of inflated time and expense billings. When Lane requested compensation for time he\ndid not spend working on the case, he violated the professional rule forbidding a lawyer from\nentering into an agreement for, charging, or collecting an illegal or clearly excessive fee. Even\nafter the plagiarism issue arose, Lane continued to assert he was entitled to receive $200 for\nthe eighty hours it took him to copy the material in his brief. He did not at any time admit that it\ndid not take, nor could it have taken him that long to simply copy his legal argument out of a\ntreatise. Charging such a clearly excessive bill brings Lane\xe2\x80\x99s integrity into question and the\nentire legal profession into disrepute.\nIt is important to note that Lane\xe2\x80\x99s request for attorney fees in this case is not similar to cases\nwhere the attorney is simply not awarded the fee requested. Lane relies on one particular case\nin which the district court reduced the attorney\'s fee application of over $171,000 to $95,000.\nThe dispute in Lynch involved the attorney\xe2\x80\x99s expenditure of time, effort, and money in\nrepresenting her client. There, the trial court properly considered several factors in reducing the\naward of attorney fees. These factors included: the time necessarily spent; the difficulty of\nhandling and importance of the issues; the responsibility assumed and results obtained; the\nstanding and experience of the attorney in the profession; and the customary charges for similar\nservice. In Lynch, there was no suggestion of impropriety or intent to deceive the court on the\npart of the attorney who submitted the fee application. Moreover, the record contained no\nevidence to contradict the evidence supporting the fee application.\nIn many cases a fee application may not necessarily be a precise measure of the time an\nattorney spent on a particular case. Ethics concerns are not unavoidably raised where the court\nreduces the attorney fee award merely reflecting considerations that do not bring into question\nthe attorney\xe2\x80\x99s honesty or integrity in submitting the fee application. On the other hand, although\nethics is not a matter of degree of misstatement\xe2\x80\x94any knowing misstatement to the court being\nunethical\xe2\x80\x94the nature and depth of Lane\xe2\x80\x99s misrepresentation speaks of knowing deception.\nThe record before us amply supports the conclusion Lane\xe2\x80\x99s conduct rises to the level of intent to\ndeceive. Action based in the hopes of deceiving the court are not the same as those arising\nfrom simple negligence or even recklessness. A lawyer who knowingly submits a fee application\nto the court and thereby attempts to misrepresent the amount of time he or she spent working\non a case has committed serious ethical violations. Accordingly, we will not treat all of the cases\nthe same. When the fee application involves culpable conduct, the seriousness of the offense\nwill be considered in fashioning the appropriate sanction. We conclude the record supports the\nCommission\xe2\x80\x99s findings that Lane charged a clearly excessive fee in the Sicard case.\nV. Discipline\nIn determining the proper sanction, we consider the particular facts and circumstances of each\ncase. Among the factors we give weight to are the need for deterrence, protection of the public,\nmaintenance of the reputation of the Bar as a whole, and the violator\'s fitness to continue to\npractice law. We also consider any aggravating or mitigating circumstances.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c635\n\nOne such aggravating circumstance is a lawyer\xe2\x80\x99s prior disciplinary history. Lane has once\nbefore faced attorney disciplinary proceedings. In 1997, the Commission sanctioned Lane for\nfailing to respond to an inquiry. He was publicly reprimanded for conduct prejudicial to the\nadministration of justice and conduct adversely reflecting on his fitness to practice law.\nA mitigating factor to consider is Lane\xe2\x80\x99s recognition of some wrongdoing. Lane filed\n\xe2\x80\x9cRespondent\xe2\x80\x99s Statement\xe2\x80\x9d with this court. Although not evidence, we will treat this statement as\na supplemental brief. Lane stated,\nI can accept that my behavior was the result of bad judgment, ignorance, even stupidity\nor carelessness, or sloppiness, or any number of things, such as laziness, negligence,\narrogance, indolence, pettiness, or just plain old incompetence.\nLane asserted he did not intend to deceive the court and cited his reputation for honesty. In\nsupport of this contention, several character witnesses testified on Lane\xe2\x80\x99s behalf at the hearing\nbefore the Commission. Despite Lane\xe2\x80\x99s statements to the court, he still does not appear to\ncomprehend the wrongfulness of his actions. In requesting excessive and unreasonable\nattorney fees for a brief he did not write, Lane was not negligent, or even reckless. Rather, more\nseriously, he intended to deceive. Lane\xe2\x80\x99s purported acknowledgment of misconduct fails to\nrecognize the full extent of his wrongdoing.\nMitigating factors alone do not overcome our responsibility to the public and to the legal\nprofession. Though Lane offered evidence of difficult personal circumstances, this does not\nexcuse his unethical conduct. Taking all of the above factors into consideration, we conclude in\ncases of this type, fairness and justice require discipline be imposed to deter future misconduct,\nprotect the public, and maintain the reputation of the Bar as a whole. Lane\xe2\x80\x99s excessive billing for\nwriting a largely plagiarized brief cannot go undisciplined. Honesty is fundamental to the\nfunctioning of the legal profession, and Lane\xe2\x80\x99s conduct in this case has compromised that\nhonesty. Moreover, Lane has jeopardized the integrity of the Bar and the public\xe2\x80\x99s trust in the\nlegal profession. We conclude a six-month license suspension is warranted. We therefore\nsuspend Lane\xe2\x80\x99s license to practice law in the State of Iowa, with no possibility of reinstatement\nfor a period of six months from the date of the filing of this opinion. Upon application for\nreinstatement, Lane shall have the burden to prove he has not practiced law during the period of\nsuspension and that he meets the requirements of Iowa Court Rule 35.13. Any hearing on\napplication for reinstatement shall be at least sixty days after the filing of such application.\nQuestions:\n1. Did the court sanction Lane for plagiarizing the contents of the brief, billing for hours he\ndidn\xe2\x80\x99t work, or lack of candor to the court?\n2. The court stated that \xe2\x80\x9cplagiarism itself is unethical.\xe2\x80\x9d Do you agree? Does it depend on\nthe context? The court relied on cases involving law students who plagiarized in\ncoursework. Is that an appropriate comparison?\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c636\n3. Lane\xe2\x80\x99s plagiarized brief was apparently effective, as he won the case. As Lane\xe2\x80\x99s client,\nwould you have been upset to learn that he plagiarized the brief, if he only billed you for\nthe number of hours he actually spent drafting the brief? Should the court have censured\nLane for plagiarism, if he had only billed for the number of hours he actually spent\ndrafting the brief?\n4. Why did Lane plagiarize the treatise rather than quoting it? Would citing the treatise\nhave made Lane\xe2\x80\x99s argument weaker or stronger?\nFurther Reading:\n\xe2\x97\x8f\n\nBrian L. Frye, Plagiarism is Not a Crime, 54 Duq. L. Rev. 133 (2016)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c637\n6.4: Client Perjury\nIf the truth will hurt someone you love, tell a lie.96\nUnder the Model Rule of Professional Conduct 3.3, attorneys may not permit their clients to\ntestify falsely or introduce false evidence. And under Model Rule 4.1, attorneys may be required\nto withdraw from representation, if they knows that their client has or will introduce false\nevidence. As the Restatement of the Law Governing Lawyers \xc2\xa7 120 observes, \xe2\x80\x9cA lawyer may\nnot knowingly counsel or assist a witness to testify falsely or otherwise to offer false evidence.\xe2\x80\x9d\nWhat should attorneys do, if they know that their client or a witness has or will introduce false\nevidence? In many cases, they can simply refuse to introduce the evidence in question. If their\nclient plans to lie, they can refuse to call their client, and they can counsel their client not to lie. If\ntheir client does lie, they can ask the client to retract the false evidence. And if the client refuses,\nthe attorney may withdraw from representation. If the false evidence could materially affect the\noutcome, the attorney must also disclose it to the court.\nCriminal cases are more complicated, because criminal defendants have a constitutional right to\ntestify under the Sixth Amendment. Attorneys should still advise criminal defendants not to lie.\nBut if they know that their client intends to lie, some jurisdiction permit the client to testify in\nnarrative form, so long as the attorney does not rely on the perjured testimony.\nSome legal scholars, most notably the late Monroe Freedman, argue that an attorney\xe2\x80\x99s duty of\nloyalty to the client must trump the attorney\xe2\x80\x99s duty of candor to the court. Accordingly, attorneys\nshould put criminal clients on the stand without notifying the court, even if they know the client\nwill testify falsely. A few scholars argue that attorneys should simply refuse to call their client at\nall, if they know the client plans to lie.\nEach time I was wrong or each time that I lied or somebody made me scared, I would simply\nreport them to Rosemary Woods, and she would make them disappear.97\nModel Rule 3.3: Candor Toward the Tribunal\na. A lawyer shall not knowingly:\n1. make a false statement of fact or law to a tribunal or fail to correct a false\nstatement of material fact or law previously made to the tribunal by the lawyer;\n2. fail to disclose to the tribunal legal authority in the controlling jurisdiction known to\nthe lawyer to be directly adverse to the position of the client and not disclosed by\nopposing counsel; or\n3. offer evidence that the lawyer knows to be false. If a lawyer, the lawyer\xe2\x80\x99s client,\nor a witness called by the lawyer, has offered material evidence and the lawyer\n\n96\n97\n\nThe Chromatics, Tell a Lie (1956).\nBill Horwitz, If I Had a Friend Like Rosemary Woods, Lies, Lies, Lies (1975).\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c638\ncomes to know of its falsity, the lawyer shall take reasonable remedial measures,\nincluding, if necessary, disclosure to the tribunal. A lawyer may refuse to offer\nevidence, other than the testimony of a defendant in a criminal matter, that the\nlawyer reasonably believes is false.\nb. A lawyer who represents a client in an adjudicative proceeding and who knows that a\nperson intends to engage, is engaging or has engaged in criminal or fraudulent conduct\nrelated to the proceeding shall take reasonable remedial measures, including, if\nnecessary, disclosure to the tribunal.\nc. The duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding,\nand apply even if compliance requires disclosure of information otherwise protected by\nRule 1.6.\nd. In an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to\nthe lawyer that will enable the tribunal to make an informed decision, whether or not the\nfacts are adverse.\nModel Rule 3.3: Comments\n5. Paragraph (a)(3) requires that the lawyer refuse to offer evidence that the lawyer knows\nto be false, regardless of the client\xe2\x80\x99s wishes. This duty is premised on the lawyer\xe2\x80\x99s\nobligation as an officer of the court to prevent the trier of fact from being misled by false\nevidence. A lawyer does not violate this Rule if the lawyer offers the evidence for the\npurpose of establishing its falsity.\n6. If a lawyer knows that the client intends to testify falsely or wants the lawyer to introduce\nfalse evidence, the lawyer should seek to persuade the client that the evidence should\nnot be offered. If the persuasion is ineffective and the lawyer continues to represent the\nclient, the lawyer must refuse to offer the false evidence. If only a portion of a witness\'s\ntestimony will be false, the lawyer may call the witness to testify but may not elicit or\notherwise permit the witness to present the testimony that the lawyer knows is false.\n7. The duties stated in paragraphs (a) and (b) apply to all lawyers, including defense\ncounsel in criminal cases. In some jurisdictions, however, courts have required counsel\nto present the accused as a witness or to give a narrative statement if the accused so\ndesires, even if counsel knows that the testimony or statement will be false. The\nobligation of the advocate under the Rules of Professional Conduct is subordinate to\nsuch requirements.\n8. The prohibition against offering false evidence only applies if the lawyer knows that the\nevidence is false. A lawyer\xe2\x80\x99s reasonable belief that evidence is false does not preclude\nits presentation to the trier of fact. A lawyer\xe2\x80\x99s knowledge that evidence is false, however,\ncan be inferred from the circumstances. Thus, although a lawyer should resolve doubts\nabout the veracity of testimony or other evidence in favor of the client, the lawyer cannot\nignore an obvious falsehood.\n9. Although paragraph (a)(3) only prohibits a lawyer from offering evidence the lawyer\nknows to be false, it permits the lawyer to refuse to offer testimony or other proof that the\nlawyer reasonably believes is false. Offering such proof may reflect adversely on the\nlawyer\'s ability to discriminate in the quality of evidence and thus impair the lawyer\'s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c639\neffectiveness as an advocate. Because of the special protections historically provided\ncriminal defendants, however, this Rule does not permit a lawyer to refuse to offer the\ntestimony of such a client where the lawyer reasonably believes but does not know that\nthe testimony will be false. Unless the lawyer knows the testimony will be false, the\nlawyer must honor the client\xe2\x80\x99s decision to testify.\nModel Rule 4.1: Truthfulness in Statements to Others\nIn the course of representing a client a lawyer shall not knowingly:\na. make a false statement of material fact or law to a third person; or\nb. fail to disclose a material fact to a third person when disclosure is necessary to avoid\nassisting a criminal or fraudulent act by a client, unless disclosure is prohibited.\nModel Rule 4.1: Comments\nCrime or Fraud by Client\n1. Under Rule 1.2(d), a lawyer is prohibited from counseling or assisting a client in conduct\nthat the lawyer knows is criminal or fraudulent. Paragraph (b) states a specific\napplication of the principle set forth in Rule 1.2(d) and addresses the situation where a\nclient\xe2\x80\x99s crime or fraud takes the form of a lie or misrepresentation. Ordinarily, a lawyer\ncan avoid assisting a client\xe2\x80\x99s crime or fraud by withdrawing from the representation.\nSometimes it may be necessary for the lawyer to give notice of the fact of withdrawal\nand to disaffirm an opinion, document, affirmation or the like. In extreme cases,\nsubstantive law may require a lawyer to disclose information relating to the\nrepresentation to avoid being deemed to have assisted the client\xe2\x80\x99s crime or fraud. If the\nlawyer can avoid assisting a client\xe2\x80\x99s crime or fraud only by disclosing this information,\nthen under paragraph (b) the lawyer is required to do so, unless the disclosure is\nprohibited by Rule 1.6.\nRestatement (Third) of the Law Governing Lawyers \xc2\xa7 120 (2000): False Testimony or\nEvidence\n1. A lawyer may not:\na. knowingly counsel or assist a witness to testify falsely or otherwise to offer false\nevidence;\nb. knowingly make a false statement of fact to the tribunal;\nc. offer testimony or other evidence as to an issue of fact known by the lawyer to be\nfalse.\n2. If a lawyer has offered testimony or other evidence as to a material issue of fact and\ncomes to know of its falsity, the lawyer must take reasonable remedial measures and\nmay disclose confidential client information when necessary to take such a measure.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c640\n3. A lawyer may refuse to offer testimony or other evidence that the lawyer reasonably\nbelieves is false, even if the lawyer does not know it to be false.\nFurther Reading:\n\xe2\x97\x8f\n\xe2\x97\x8f\n\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\xe2\x97\x8f\n\nHarry I. Subin, The Lawyer as Superego: Disclosure of Client Confidences to Prevent\nHarm, 70 Iowa L. Rev. 1091 (1985)\nH. Lowell Brown, The Dilemma of Corporate Counsel Faced with Client Misconduct:\nDisclosure of Client Confidences or Constructive Discharge, 44 Buffalo L. Rev. 777\n(1996)\nThomas L. Shaffer, On Lying for Clients, 71 Notre Dame L. Rev. 195 (1995-1996)\nRichard H. Underwood, Perjury! The Charges and the Defenses, 36 Duq. L. Rev. 715\n(1998)\nBarry Adler, The Ethics of Perjury, 71 ABA Journal 76 (November 1985)\nMonroe H. Freedman, Professional Responsibility of the Criminal Defense Lawyer: The\nThree Hardest Questions, 64 Mich. L. Rev. 1469 (1966)\nMonroe H. Freedman, Getting Honest About Client Perjury, 21 Geo. J. Legal Ethics 133\n(2008)\nRay McKoski, Prospective Perjury by a Criminal Defendant: It\xe2\x80\x99s All about the Lawyer, 44\nAriz. St. L.J. 1575 (2012)\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c641\n\nNix v. Whiteside Courtroom Drawing\nNix v. Whiteside, 475 U.S. 157 (1986)\nSummary: Emmanuel Charles Whiteside was charged with the murder of Calvin Love,\nand was represented by Gary L. Robinson and Donna Paulsen. Whiteside pleaded selfdefense. Initially, he told Robinson that he believed Love had a gun, but had not actually\nseen one. Later, he told Robinson that he had seen \xe2\x80\x9csomething metallic.\xe2\x80\x9d Robinson\nadvised Whiteside that this testimony would be perjury, and that he would inform the\ncourt and withdraw from representation if Whiteside committed perjury. Whiteside did not\ntestify that he had seen \xe2\x80\x9csomething metallic,\xe2\x80\x9d and was convicted of second-degree\nmurder. The Supreme Court of Iowa affirmed the conviction. Whiteside filed a federal\nhabeas petition alleging ineffective assistance of counsel. The district court denied the\nwrit, but the circuit court reversed. The Supreme Court granted certiorari and reversed,\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c642\nholding that criminal defendant does not have a right to commit perjury, so Whiteside\xe2\x80\x99s\nright to counsel was not infringed.\nWe granted certiorari to decide whether the Sixth Amendment right of a criminal defendant to\nassistance of counsel is violated when an attorney refuses to cooperate with the defendant in\npresenting perjured testimony at his trial.\nWhiteside was convicted of second-degree murder by a jury verdict which was affirmed by the\nIowa courts. The killing took place on February 8, 1977, in Cedar Rapids, Iowa. Whiteside and\ntwo others went to one Calvin Love\xe2\x80\x99s apartment late that night, seeking marihuana. Love was in\nbed when Whiteside and his companions arrived; an argument between Whiteside and Love\nover the marihuana ensued. At one point, Love directed his girlfriend to get his \xe2\x80\x9cpiece,\xe2\x80\x9d and at\nanother point got up, then returned to his bed. According to Whiteside\xe2\x80\x99s testimony, Love then\nstarted to reach under his pillow and moved toward Whiteside. Whiteside stabbed Love in the\nchest, inflicting a fatal wound.\nWhiteside was charged with murder, and when counsel was appointed he objected to the\nlawyer initially appointed, claiming that he felt uncomfortable with a lawyer who had formerly\nbeen a prosecutor. Gary L. Robinson was then appointed and immediately began an\ninvestigation. Whiteside gave him a statement that he had stabbed Love as the latter \xe2\x80\x9cwas\npulling a pistol from underneath the pillow on the bed.\xe2\x80\x9d Upon questioning by Robinson, however,\nWhiteside indicated that he had not actually seen a gun, but that he was convinced that Love\nhad a gun. No pistol was found on the premises; shortly after the police search following the\nstabbing, which had revealed no weapon, the victim\xe2\x80\x99s family had removed all of the victim\xe2\x80\x99s\npossessions from the apartment. Robinson interviewed Whiteside\xe2\x80\x99s companions who were\npresent during the stabbing, and none had seen a gun during the incident. Robinson advised\nWhiteside that the existence of a gun was not necessary to establish the claim of self-defense,\nand that only a reasonable belief that the victim had a gun nearby was necessary even though\nno gun was actually present.\nUntil shortly before trial, Whiteside consistently stated to Robinson that he had not actually seen\na gun, but that he was convinced that Love had a gun in his hand. About a week before trial,\nduring preparation for direct examination, Whiteside for the first time told Robinson and his\nassociate Donna Paulsen that he had seen something \xe2\x80\x9cmetallic\xe2\x80\x9d in Love\'s hand. When asked\nabout this, Whiteside responded:\nIn Howard Cook\xe2\x80\x99s case there was a gun. If I don\xe2\x80\x99t say I saw a gun, I\xe2\x80\x99m dead.\nRobinson told Whiteside that such testimony would be perjury and repeated that it was not\nnecessary to prove that a gun was available but only that Whiteside reasonably believed that he\nwas in danger. On Whiteside\xe2\x80\x99s insisting that he would testify that he saw \xe2\x80\x9csomething metallic\xe2\x80\x9d\nRobinson told him, according to Robinson\'s testimony:\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c643\nWe could not allow him to testify falsely because that would be perjury, and as officers of\nthe court we would be suborning perjury if we allowed him to do it. I advised him that if\nhe did do that it would be my duty to advise the Court of what he was doing and that I\nfelt he was committing perjury; also, that I probably would be allowed to attempt to\nimpeach that particular testimony.\nRobinson also indicated he would seek to withdraw from the representation if Whiteside insisted\non committing perjury.\nWhiteside testified in his own defense at trial and stated that he \xe2\x80\x9cknew\xe2\x80\x9d that Love had a gun and\nthat he believed Love was reaching for a gun and he had acted swiftly in self-defense. On\ncross-examination, he admitted that he had not actually seen a gun in Love\xe2\x80\x99s hand. Robinson\npresented evidence that Love had been seen with a sawed-off shotgun on other occasions, that\nthe police search of the apartment may have been careless, and that the victim\xe2\x80\x99s family had\nremoved everything from the apartment shortly after the crime. Robinson presented this\nevidence to show a basis for Whiteside\xe2\x80\x99s asserted fear that Love had a gun.\nThe jury returned a verdict of second-degree murder, and Whiteside moved for a new trial,\nclaiming that he had been deprived of a fair trial by Robinson\xe2\x80\x99s admonitions not to state that he\nsaw a gun or \xe2\x80\x9csomething metallic.\xe2\x80\x9d The trial court held a hearing, heard testimony by Whiteside\nand Robinson, and denied the motion. The trial court made specific findings that the facts were\nas related by Robinson.\nThe Supreme Court of Iowa affirmed respondent\xe2\x80\x99s conviction. That court held that the right to\nhave counsel present all appropriate defenses does not extend to using perjury, and that an\nattorney\xe2\x80\x99s duty to a client does not extend to assisting a client in committing perjury. Relying on\nthe Iowa Code of Professional Responsibility for Lawyers, which expressly prohibits an attorney\nfrom using perjured testimony, and the Iowa Code, which criminalizes subornation of perjury,\nthe Iowa court concluded that not only were Robinson\xe2\x80\x99s actions permissible, but were required.\nThe court commended \xe2\x80\x9cboth Mr. Robinson and Ms. Paulsen for the high ethical manner in which\nthis matter was handled.\xe2\x80\x9d\nWhiteside then petitioned for a writ of habeas corpus in the United States District Court for the\nSouthern District of Iowa. In that petition Whiteside alleged that he had been denied effective\nassistance of counsel and of his right to present a defense by Robinson\xe2\x80\x99s refusal to allow him to\ntestify as he had proposed. The District Court denied the writ. Accepting the state trial court\xe2\x80\x99s\nfactual finding that Whiteside\xe2\x80\x99s intended testimony would have been perjurious, it concluded that\nthere could be no grounds for habeas relief since there is no constitutional right to present a\nperjured defense.\nThe United States Court of Appeals for the Eighth Circuit reversed and directed that the writ of\nhabeas corpus be granted. The Court of Appeals accepted the findings of the trial judge,\naffirmed by the Iowa Supreme Court, that trial counsel believed with good cause that Whiteside\nwould testify falsely and acknowledged that under Harris v. New York, a criminal defendant\'s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c644\nprivilege to testify in his own behalf does not include a right to commit perjury. Nevertheless, the\ncourt reasoned that an intent to commit perjury, communicated to counsel, does not alter a\ndefendant\xe2\x80\x99s right to effective assistance of counsel and that Robinson\xe2\x80\x99s admonition to Whiteside\nthat he would inform the court of Whiteside\xe2\x80\x99s perjury constituted a threat to violate the attorney\xe2\x80\x99s\nduty to preserve client confidences. According to the Court of Appeals, this threatened violation\nof client confidences breached the standards of effective representation set down in Strickland\nv. Washington. The court also concluded that Strickland\xe2\x80\x99s prejudice requirement was satisfied\nby an implication of prejudice from the conflict between Robinson\xe2\x80\x99s duty of loyalty to his client\nand his ethical duties. A petition for rehearing en banc was denied. We granted certiorari and\nwe reverse.\nA\nThe right of an accused to testify in his defense is of relatively recent origin. Until the latter part\nof the preceding century, criminal defendants in this country, as at common law, were\nconsidered to be disqualified from giving sworn testimony at their own trial by reason of their\ninterest as a party to the case. Iowa was among the states that adhered to this rule of\ndisqualification.\nBy the end of the 19th century, however, the disqualification was finally abolished by statute in\nmost states and in the federal courts. Although this Court has never explicitly held that a\ncriminal defendant has a due process right to testify in his own behalf, cases in several Circuits\nhave so held, and the right has long been assumed. We have also suggested that such a right\nexists as a corollary to the Fifth Amendment privilege against compelled testimony.\nB.\nWe turn next to the question presented: the definition of the range of \xe2\x80\x9creasonable professional\xe2\x80\x9d\nresponses to a criminal defendant client who informs counsel that he will perjure himself on the\nstand. We must determine whether, in this setting, Robinson\xe2\x80\x99s conduct fell within the wide range\nof professional responses to threatened client perjury acceptable under the Sixth Amendment.\nIn Strickland, we recognized counsel\xe2\x80\x99s duty of loyalty and his \xe2\x80\x9coverarching duty to advocate the\ndefendant\xe2\x80\x99s cause.\xe2\x80\x9d Plainly, that duty is limited to legitimate, lawful conduct compatible with the\nvery nature of a trial as a search for truth. Although counsel must take all reasonable lawful\nmeans to attain the objectives of the client, counsel is precluded from taking steps or in any way\nassisting the client in presenting false evidence or otherwise violating the law. This principle has\nconsistently been recognized in most unequivocal terms by expositors of the norms of\nprofessional conduct since the first Canons of Professional Ethics were adopted by the\nAmerican Bar Association in 1908. The 1908 Canon 32 provided:\nNo client, corporate or individual, however powerful, nor any cause, civil or political,\nhowever important, is entitled to receive nor should any lawyer render any service or\nadvice involving disloyalty to the law whose ministers we are, or disrespect of the judicial\noffice, which we are bound to uphold, or corruption of any person or persons exercising\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c645\na public office or private trust, or deception or betrayal of the public. He must observe\nand advise his client to observe the statute law.\nOf course, this Canon did no more than articulate centuries of accepted standards of conduct.\nSimilarly, Canon 37, adopted in 1928, explicitly acknowledges as an exception to the attorney\xe2\x80\x99s\nduty of confidentiality a client\'s announced intention to commit a crime:\nThe announced intention of a client to commit a crime is not included within the\nconfidences which the attorney is bound to respect.\nThese principles have been carried through to contemporary codifications of an attorney\xe2\x80\x99s\nprofessional responsibility. Disciplinary Rule 7-102 of the Model Code of Professional\nResponsibility (1980), entitled \xe2\x80\x9cRepresenting a Client Within the Bounds of the Law,\xe2\x80\x9d provides:\n(A) In his representation of a client, a lawyer shall not:\n(4) Knowingly use perjured testimony or false evidence.\n(7) Counsel or assist his client in conduct that the lawyer knows to be illegal or\nfraudulent.\nThis provision has been adopted by Iowa, and is binding on all lawyers who appear in its courts.\nThe more recent Model Rules of Professional Conduct (1983) similarly admonish attorneys to\nobey all laws in the course of representing a client:\nRULE 1.2 Scope of Representation\n(d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the\nlawyer knows is criminal or fraudulent.\nBoth the Model Code of Professional Responsibility and the Model Rules of Professional\nConduct also adopt the specific exception from the attorney-client privilege for disclosure of\nperjury that his client intends to commit or has committed. Indeed, both the Model Code and the\nModel Rules do not merely authorize disclosure by counsel of client perjury; they require such\ndisclosure.\nThese standards confirm that the legal profession has accepted that an attorney\xe2\x80\x99s ethical duty to\nadvance the interests of his client is limited by an equally solemn duty to comply with the law\nand standards of professional conduct; it specifically ensures that the client may not use false\nevidence. This special duty of an attorney to prevent and disclose frauds upon the court derives\nfrom the recognition that perjury is as much a crime as tampering with witnesses or jurors by\nway of promises and threats, and undermines the administration of justice. The offense of\nperjury was a crime recognized at common law, and has been made a felony in most states by\nstatute, including Iowa. An attorney who aids false testimony by questioning a witness when\nperjurious responses can be anticipated risks prosecution for subornation of perjury.\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c646\nIt is universally agreed that at a minimum the attorney\xe2\x80\x99s first duty when confronted with a\nproposal for perjurious testimony is to attempt to dissuade the client from the unlawful course of\nconduct. Withdrawal of counsel when this situation arises at trial gives rise to many difficult\nquestions including possible mistrial and claims of double jeopardy.\nThe essence of the brief amicus of the American Bar Association reviewing practices long\naccepted by ethical lawyers is that under no circumstance may a lawyer either advocate or\npassively tolerate a client\'s giving false testimony. This, of course, is consistent with the\ngovernance of trial conduct in what we have long called \xe2\x80\x9ca search for truth.\xe2\x80\x9d The suggestion\nsometimes made that \xe2\x80\x9ca lawyer must believe his client, not judge him\xe2\x80\x9d in no sense means a\nlawyer can honorably be a party to or in any way give aid to presenting known perjury.\nConsidering Robinson\xe2\x80\x99s representation of respondent in light of these accepted norms of\nprofessional conduct, we discern no failure to adhere to reasonable professional standards that\nwould in any sense make out a deprivation of the Sixth Amendment right to counsel. Whether\nRobinson\xe2\x80\x99s conduct is seen as a successful attempt to dissuade his client from committing the\ncrime of perjury, or whether seen as a \xe2\x80\x9cthreat\xe2\x80\x9d to withdraw from representation and disclose the\nillegal scheme, Robinson\xe2\x80\x99s representation of Whiteside falls well within accepted standards of\nprofessional conduct and the range of reasonable professional conduct acceptable under\nStrickland.\nThe Court of Appeals assumed for the purpose of the decision that Whiteside would have given\nfalse testimony had counsel not intervened; its opinion denying a rehearing en banc states:\nWe presume that appellant would have testified falsely. Counsel\xe2\x80\x99s actions prevented\nWhiteside from testifying falsely. We hold that counsel\xe2\x80\x99s action deprived appellant of due\nprocess and effective assistance of counsel. Counsel\'s actions also impermissibly\ncompromised appellant\xe2\x80\x99s right to testify in his own defense by conditioning continued\nrepresentation by counsel and confidentiality upon appellant\'s restricted testimony.\nWhile purporting to follow Iowa\xe2\x80\x99s highest court \xe2\x80\x9con all questions of state law,\xe2\x80\x9d the Court of\nAppeals reached its conclusions on the basis of federal constitutional due process and right to\ncounsel.\nThe Court of Appeals\xe2\x80\x99 holding that Robinson\xe2\x80\x99s \xe2\x80\x9caction deprived Whiteside of due process and\neffective assistance of counsel\xe2\x80\x9d is not supported by the record since Robinson\xe2\x80\x99s action, at most,\ndeprived Whiteside of his contemplated perjury. Nothing counsel did in any way undermined\nWhiteside\xe2\x80\x99s claim that he believed the victim was reaching for a gun. Similarly, the record gives\nno support for holding that Robinson\xe2\x80\x99s action \xe2\x80\x9calso impermissibly compromised Whiteside\xe2\x80\x99s right\nto testify in his own defense by conditioning continued representation and confidentiality upon\nWhiteside\xe2\x80\x99s restricted testimony.\xe2\x80\x9d The record in fact shows the contrary: (a) that Whiteside did\ntestify, and (b) he was \xe2\x80\x9crestricted\xe2\x80\x9d or restrained only from testifying falsely and was aided by\nRobinson in developing the basis for the fear that Love was reaching for a gun. Robinson\ndivulged no client communications until he was compelled to do so in response to Whiteside\xe2\x80\x99s\n\nElectronic copy available at: https://ssrn.com/abstract=3367936\n\n\x0c647\npost-trial challenge to the quality of his performance. We see this as a case in which the\nattorney successfully dissuaded the client from committing the crime of perjury.\nParadoxically, even while accepting the conclusion of the Iowa trial court that Whiteside\xe2\x80\x99s\nproposed testimony would have been a criminal act, the Court of Appeals held that Robinson\xe2\x80\x99s\nefforts to persuade Whiteside not to commit that crime were improper, first, as forcing an\nimpermissible choice between the right to counsel and the right to testify; and, second, as\ncompromising client confidences because of Robinson\xe2\x80\x99s threat to disclose the contemplated\nperjury. Whatever the scope of a constitutional right to testify, it is elementary that such a right\ndoes not extend to testifying falsely. In Harris v. New York, we assumed the right of an accused\nto testify \xe2\x80\x9cin his own defense, or to refuse to do so\xe2\x80\x9d and went on to hold:\nThat privilege cannot be construed to include the right to commit perjury. Having\nvoluntarily taken the stand, petitioner was under an obligation to speak truthfully.\nIn Harris we held the defendant could be impeached by prior contrary statements which had\nbeen ruled inadmissible under Miranda v. Arizona. Harris and other cases make it crystal clear\nthat there is no right whatever -- constitutional or otherwise -- for a defendant to use false\nevidence.\nThe paucity of authority on the subject of any such \xe2\x80\x9cright\xe2\x80\x9d may be explained by the fact that such\na notion has never been responsibly advanced; the right to counsel includes no right to have a\nlawyer who will cooperate with planned perjury. A lawyer who would so cooperate would be at\nrisk of prosecution for suborning perjury, and disciplinary proceedings, including suspension or\ndisbarment.\nRobinson\xe2\x80\x99s admonitions to his client can in no sense be said to have forced respondent i
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