Opinion ID: 1230281
Heading Depth: 3
Heading Rank: 2

Heading: Constitutional Separation of Powers Arguments

Text: The conclusion that the MMBA gives the Association the statutory right to sue does not end our inquiry. The County argues, and the Court of Appeal implicitly held, that even if the MMBA does grant the Association the right to sue, that right is nonetheless superseded by the attorney's duty of loyalty, as delineated in several Rules of Professional Conduct, and in general common law principles. The County asserts that to the extent a statute authorizes a violation of the Rules of Professional Conduct, or other professional obligation, it violates the constitutional separation of powers inherent in article VI of the California Constitution, which implicitly vests the power to govern the legal profession in the judiciary. The Association, on the other hand, claims that the Court of Appeal erred in holding the suit barred by the Attorney's duty of loyalty. In order to assess the merit of the parties' constitutional arguments, a brief review of the separation of powers doctrine under article VI of the California Constitution is needed. (6a) In California, the power to regulate the practice of law ... has long been recognized to be among the inherent powers of the article VI courts. ( Hustedt v. Workers' Comp. Appeals Bd. (1981) 30 Cal.3d 329, 336 [178 Cal. Rptr. 801, 636 P.2d 1139].) Such power of regulation has meant that the courts are vested with the exclusive power to control the admission, discipline and disbarment of persons entitled to practice before them.... ( Brotsky v. State Bar (1962) 57 Cal.2d 287, 300 [19 Cal. Rptr. 153, 368 P.2d 697, 94 A.L.R.2d 1310].) Thus, in Hustedt, we held that former Labor Code section 4407, which invested in (non-article VI) workers' compensation judges the right to suspend attorneys from practicing before them, was unconstitutional because it trespassed on the powers of the judiciary inherent in article VI to regulate attorney discipline. Other cases in which we used California Constitution, article VI separation of powers doctrine to declare a statute or a portion of it unconstitutional are few and far between. In Merco Constr. Engineers, Inc. v. Municipal Court (1978) 21 Cal.3d 724 [147 Cal. Rptr. 631, 581 P.2d 636], we held that former Code of Civil Procedure section 90, giving non-attorney representatives of corporations the right to appear in municipal court, unconstitutionally infringed on the judiciary's exclusive right to grant admission to the practice of law. In In re Lavine (1935) 2 Cal.2d 324, 329 [41 P.2d 161], this court held unconstitutional a statute that automatically reinstated to the bar attorneys who were convicted felons, once they received a full gubernatorial pardon. The statute encroached upon the inherent power of this court to admit attorneys to the practice of the law and [was] tantamount to the vacating of a judicial order by legislative mandate. ( Ibid. ) These cases, as with Hustedt v. Workers' Comp. Appeals Bd., supra, 30 Cal.3d 329, entail statutes that impinge on the court's traditional power to control admission, discipline and disbarment of attorneys. On the other hand, this court has respected the exercise by the Legislature under the police power, of `a reasonable degree of regulation and control over the profession and practice of law...' in this state. ( Hustedt v. Workers' Comp. Appeals Bd., supra, 30 Cal.3d at p. 337.) (7) The standard for assessing whether the Legislature has overstepped its authority and thereby violated the separation of powers principle has been summarized as follows. `The legislature may put reasonable restrictions upon constitutional functions of the courts provided they do not defeat or materially impair the exercise of those functions.' ( Id. at p. 338, citing Brydonjack v. State Bar (1929) 208 Cal. 439, 444 [281 P. 1018, 66 A.L.R. 1507].) (6b) In the field of attorney-client conduct, we recognize that the judiciary and the Legislature are in some sense partners in regulation. Side by side with the Rules of Professional Conduct approved by this court are numerous statutes which regulate the profession and protect consumers of legal services. The State Bar Act (Bus. & Prof. Code, § 6000 et seq.) regulates various aspects of the attorney-client relationship, including contingency fee contracts ( id., § 6146), unlawful solicitation ( id., § 6150 et seq.), willful delay of client's suit with a view to the attorney's own gain ( id., § 6128), and purchase of a legal claim ( id., § 6129). We also note that the Legislature, in enacting the MMBA, was acting well within its police powers to regulate employer-employee relations. (See generally, Pacific Legal Foundation v. Brown (1981) 29 Cal.3d 168, 186 et seq. [172 Cal. Rptr. 487, 624 P.2d 1215].) The Legislature has established statutory regimes for vast numbers of employees not covered by federal labor legislation, including agricultural workers, public education employees, and state workers, as well as local government employees. We have never held a statute of general application, which does not affect the traditional areas of attorney admission, disbarment and discipline, unconstitutional. Nonetheless, we recognize that in the field of attorney-client conduct, as in these other areas, this court has the inherent power to provide a higher standard of attorney-client conduct than the minimum standards prescribed by the Legislature. (See Emslie v. State Bar (1974) 11 Cal.3d 210, 225 [113 Cal. Rptr. 175, 520 P.2d 991]; In re Lavine, supra, 2 Cal.2d at p. 328.) We also recognize that any statute which would permit an attorney to act in such a way as to seriously violate the integrity of the attorney-client relationship, so as to materially impair the functioning of the courts ( Hustedt v. Workers' Comp. Appeals Bd., supra, 30 Cal.3d at p. 339), would be constitutionally suspect. But a ruling that a statute affecting attorney-client relations is unconstitutional on separation of powers grounds will not be lightly made. Those raising such a claim must at least show that a direct and fundamental conflict exists between the operation of the statute in question, as it applies to attorneys, and attorneys' settled ethical obligations, as embodied in this state's Rules of Professional Conduct or some well-established common law rule. As will appear below, the County fails to make that showing in the present case.
(8a), (9a) In determining whether a statute regulating attorney conduct violates the separation of powers, we begin with whether the statute in question would permit or require an attorney to contravene one of the Rules of Professional Conduct. The County claims that a petition for a writ of mandate brought by the Association would cause the Attorneys to run afoul of rules 3-300 and 3-310 of the Rules of Professional Conduct (hereafter, all references to rules are to the Rules of Professional Conduct of the State Bar). We do not agree. As the Court of Appeal in this case conceded, neither rule is directly applicable. (8b) Rule 3-300 does not allow an attorney to knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, without undergoing an extensive protocol for gaining the client's consent. The County contends that a lawsuit against the client would be tantamount to acquiring a pecuniary interest adverse to the client. The language of the rule and the intent behind it do not support that interpretation. Rule 3-300 was intended to regulate two types of activity: business transactions between attorneys and clients and the acquisition by attorneys of pecuniary interests adverse to clients. (See State Bar, Request that the Supreme Court of Cal. Approve Amendments to the Rules of Professional Conduct of the State Bar of Cal., & Memorandum Supporting Documents in Explanation (1987) at p. 33.) Clearly, the present lawsuit is not a business transaction. Nor can we stretch the meaning of the term acquire ... a pecuniary interest to encompass the filing of a petition for writ of mandate. Although some petitions filed to enforce the MMBA could be labeled, in a certain sense, pecuniary, in that their object is monetary gain, others have as their aim the attainment of injunctive or declaratory relief related to conditions of employment without any immediate economic payoff. (See, e.g., Independent Union of Pub. Service Employees v. County of Sacramento (1983) 147 Cal. App.3d 482, 487 [195 Cal. Rptr. 206].) Indeed, the very use of the word acquire, which cannot sensibly be applied to the filing of a lawsuit or a petition for writ of mandate, demonstrates that such actions are not intended to be included within the scope of rule 3-300. As the few cases concerned with applying rule 3-300's pecuniary interest (as opposed to business transaction) provision illustrate, the term acquire a ... pecuniary interest is intended to signify the pursuit of some business or financial interest as conventionally understood, rather than an attempt to redress some legal wrong through the courts. (See, e.g., Brockway v. State Bar (1991) 53 Cal.3d 51, 63-65 [278 Cal. Rptr. 836, 806 P.2d 308] [attorney violated predecessor rule by taking ownership interest in client's property in excess of attorney fees].) Thus, the filing of the present petition is not addressed by rule 3-300. (9b) Nor is rule 3-310 directly implicated. Rule 3-310 proscribes attorney conflicts of interest in various contexts. The rule is concerned not merely with conflict in representation of current or former clients, but also, in rule 3-310(B), with conflicts between an attorney's own financial and personal interests and those of his or her client. The County contends that rule 3-310(B)(4), in particular, is applicable to the present case. That rule precludes attorneys from representing a client, without disclosure. [3] when the member has or had a legal, business, financial, or professional interest in the subject matter of the representation. The County argues that the attorneys have a professional interest adverse to the County by being a part of the Association's lawsuit. We do not agree that this lawsuit falls within the scope of rule 3-310(B)(4). The language of rule 3-310(B)(4), adopted by this court in the 1991 amendments to the Rules of Professional Conduct, applies only to conflicts that arise over the subject matter of the representation that the attorney undertakes for the client, and not to conflicts the attorney and client may have outside this subject matter. The primary purpose of this prophylactic rule is to prevent situations in which an attorney might compromise his or her representation of the client in order to advance the attorney's own financial or personal interests. In this case, the lawsuit by the Association does not, in general, present a conflict with the client on matters in which the Attorneys represent the County. Stated concretely, when deputy County Counsel attorneys represent the County in a nuisance abatement action, or advise the County in a land-use matter, they will face no temptation to compromise their representation of the County in order to further their own interests. The outcome of most of the matters for which the Attorneys have undertaken representation will not affect, nor be affected by, the outcome of the Association's lawsuit. The lawsuit will not disable the Attorneys from objectively considering, recommending, or carrying out an appropriate course of action in their representation of the County. An attorney/employee may experience ill will towards the client/employer, and vice versa, as is sometimes the case when employer/employee relations deteriorate. Rule 3-310(B)(4), however, addresses not the existence of general antagonism between lawyer and client, but tangible conflicts between the lawyer's and client's interests in the subject matter of the representation. [4] The record below supports the trial court's implicit conclusion that no such conflict of interest is present within the meaning of rule 3-310(B)(4). [5] (8c), (9c) Implied in the position of the County that rules 3-300 and 3-310 are violated by the Attorneys is an a fortiori argument. The County appears to contend that, if the duty of loyalty that an attorney owes a client requires the attorney to refrain from engaging in a business transaction with a client without informed consent, or in representing clients with conflicting interests without disclosure, then it must surely prohibit an attorney from suing a current client. This argument ignores the distinct policy considerations inherent in the different types of conflict. It is one thing to require an attorney, for the sake of client loyalty, to forgo a business opportunity or a potential client. It is another thing to require an attorney, for loyalty's sake, to forgo his or her statutory rights against a client to redress a legal injury. While such a sacrifice may indeed be required in some circumstances, that requirement is not to be found in the specific proscriptions set forth in rules 3-300 or 3-310. [6] Rather, it is to be located in a general, common law duty of loyalty beyond the scope of these two rules. It is this general duty that we next consider.
(10a) Although the question of an attorney's suit against a present client is not explicitly covered in the Rules of Professional Conduct, or by any statute, arguably it may be prohibited by the general duty of loyalty recognized at common law. It is clear that the duties to which an attorney in this state are subject are not exhaustively delineated by the Rules of Professional Conduct, and that these rules are not intended to supersede common law obligations. (See rule 1-100, and accompanying discussion.) (11) This court's statement of the attorney's duty of loyalty to the client over 60 years ago is still generally valid: It is... an attorney's duty to protect his client in every possible way, and it is a violation of that duty for him to assume a position adverse or antagonistic to his client without the latter's free and intelligent consent.... By virtue of this rule an attorney is precluded from assuming any relation which would prevent him from devoting his entire energies to his client's interests. ( Anderson v. Eaton (1930) 211 Cal. 113, 116 [293 P. 788].) We have also decided that the duty of loyalty for an attorney in the public sector does not differ appreciably from that of the attorney's counterpart in private practice. (See People ex rel. Deukmejian v. Brown (1981) 29 Cal.3d 150, 157 [172 Cal. Rptr. 478, 624 P.2d 1206] [Attorney General's role as `guardian of the public interest' does not exempt him from conflict of interest rules applicable to other attorneys].) (10b) No reported appellate cases in this state have considered the extent to which an attorney's duty of loyalty to a client prohibits the attorney from suing the client. It may well be that the lack of case law is due to the obviousness of the prohibition. As one court has stated: The almost complete absence of authority governing the situation where, as in the present case, the lawyer is still representing the client whom he sues clearly indicates to us that the common understanding and the common conscience of the bar is in accord with our holding that such a suit constitutes a reprehensible breach of loyalty and a violation of the preamble to the Canons of Professional Ethics. ( Grievance Com. of Bar of Hartford County v. Rottner (1964) 152 Conn. 59 [203 A.2d 82, 85].) The attorney's duty of loyalty to the client has led the Los Angeles County Bar Association to conclude that an attorney in a fee dispute with a client must withdraw from representing a client prior to filing suit against a client. (Los Angeles County Bar Ethics Opns., opn. No. 212 (1953).) Indeed, courts in some jurisdictions have concluded that attorneys may not sue their ex-clients in some circumstances, such as for retaliatory discharge, where the lawsuit would disrupt the confidentiality of the attorney-client relationship. (See Balla v. Gambro, Inc. (1991) 145 Ill.2d 492 [164 Ill.Dec. 892, 584 N.E.2d 104, 16 A.L.R.5th 1000] [former in-house counsel may not sue for retaliatory discharge]; but see Parker v. M & T Chemicals, Inc. (1989) 236 N.J. Super. 451 [566 A.2d 215] [retaliatory discharge suit permitted].) But we do not decide here generally the extent to which the duty of loyalty precludes an attorney's lawsuit against a current client. Rather, we seek to determine whether an attorney's lawsuit to enforce rights granted pursuant to a statutory scheme of public employer-employee bargaining is fundamentally incompatible with the essentials of the duty of loyalty. In order to answer this question, we must decide another, more fundamental, issue: to what extent is the collective bargaining relationship between an attorney/employee and a client/employer itself compatible with the attorney's duty of loyalty?
(12) At the heart of the conflict between attorney rights and responsibilities posed by this case is the conflict between the attorney-client relationship on the one hand, and the collective bargaining relationship between employer and (organized) employees on the other. Until relatively recently, the legal profession looked askance at attorneys joining unions or other employee associations. In 1966, the American Bar Association Committee on Ethics and Professional Responsibility (hereinafter the ABA Committee) opined that a United States government attorney could not, consistent with ethical responsibilities, join a union. (2 ABA Informal Ethics Opns., opn. No. 917 (Jan. 25, 1966) p. 65.) As the committee explained, the attorney owes undivided loyalty to the government agency for which he or she works, and by becoming a member of a labor union the attorney assumes obligations which may at times be incompatible with his obligation to his client. ( Id. at p. 66.) [7] One year later, however, the ABA Committee essentially reversed its position. In informal opinion No. 986, the ABA Committee acknowledged that Generally speaking, the idea of lawyers belonging to or joining together in labor unions is basically contrary to the spirit of the Canons of Ethics because of the conflict with the duty owed the client. (2 ABA Informal Ethics Opns., opn. No. 986 (July 3, 1967) p. 144.) However, the ABA Committee recognized that the general principle was no longer universally applicable. [I]t is realized that the number of lawyers who represent single employer clients, for example governmental agencies and corporations, has increased substantially in recent years and will undoubtedly continue to increase in the future. The relationship of a lawyer who is employed by a corporation or by a governmental agency to his client in terms of compensation is different from that of the lawyer who represents in his daily practice ... a number of different clients.... Such lawyers have one client only, do not charge fees for their individual work and their compensation generally is not related to particular individual assignments they perform, but is rather related to the overall services which they perform. This differentiates them from those lawyers employed in a general practice of law where they perform services for a number of different clients. It is our opinion, therefore, that lawyers who are paid a salary and who are employed by a single client employer may join an organization limited solely to other lawyer employees of the same employer for the purpose of negotiating wages, hours, and working conditions with the employer client so long as the lawyer continues to perform for his employer client professional services as directed by his employer in accordance with the provisions of the Canons of Ethics. Such a lawyer would not have the right to strike, to withhold services for any reasons, to divulge confidences or engage in any other activities as a member of such a union which would violate any Canon (2 ABA Informal Ethics Opns., opn. No. 986, supra, p. 45; accord, Cal. Compendium on Prof. Responsibility, L.A. County Bar Assn. Formal Opn. No. 337 (June 14, 1973) p. 35.) In 1975, the ABA Committee again revisited the ethical questions related to an attorney's union activities. In informal opinion No. 1325, the ABA Committee considered the propriety of strikes by attorneys who are employed by a single employer in public or private practice. The ABA Committee began by recalling its neutral position on the question of attorney membership in employee associations consisting only of attorneys. That position had since been codified in the American Bar Association's Model Code of Professional Responsibility, EC 5-13, which now states in part that Although it is not necessarily improper for a lawyer employed by a corporation or similar entity to be a member of an organization of employees, he should be vigilant to safeguard his fidelity as a lawyer to his employer, free from outside influences. As informal opinion No. 1325 explains, while joining an employee organization violates no specific American Bar Association disciplinary rule, there is the potential of violating several rules, such as DR 6-101 (A)(3), proscribing neglect of a legal matter entrusted to a lawyer, DR 7-101 (A)(2), forbidding a lawyer to intentionally fail to carry out a contract for employment with a client, and DR 7-101 (A)(3), prohibiting a lawyer to intentionally prejudice or damage his client during the course of the professional relationship. (ABA Recent Ethics Opns., informal opn. No. 1325 (Mar. 31, 1975) p. 2.) The ABA Committee thereupon adopted what may be called a pragmatic approach to the question of strikes and other collective bargaining matters. If the attorney's strike leads to the neglect or intentional sabotage of the employer/client's affairs, then the attorney would have violated his or her professional obligations as embodied in the disciplinary rules cited above, and would be subject to discipline. However, in some situations participation in a strike might be no more disruptive of the performance of legal work than taking a two week's vacation might be. ( Ibid. ) Although we do not necessarily endorse the ABA Committee's position on the permissibility of strikes for government attorneys, we find its approach to the question of employee organization among these attorneys to be essentially correct. First, we do not find that government attorneys who organize themselves into associations pursuant to statute and who proceed to bargain collectively with their employer/clients are per se in violation of any duty of loyalty or any other ethical obligation. The growing phenomenon of the lawyer/employee requires a realistic accommodation between an attorney's professional obligations and the rights he or she may have as an employee. Moreover, we follow the ABA Committee's approach to determining when an attorney, in pursuit of an employee association's goals, oversteps ethical boundaries. That occurs when the attorney violates actual disciplinary rules, most particularly rules pertaining to the attorney's duty to represent the client faithfully, competently, and confidentially. In California, those duties are found principally in Rule 3-110, which prohibits a member from intentionally, recklessly or repeatedly fail[ing] to perform legal services with competence. An attorney, in pursuing rights of self-representation, may not use delaying tactics in handling existing litigation or other matters of representation for the purpose of gaining advantage in a dispute over salary and fringe benefits. (See Cal. Compendium on Prof. Responsibility, pt. II, State Bar Formal Opn. No. 1979-51.) Indeed, an attorney who [w]illfully delays [a] client's suit with a view to his [or her] own gain is guilty of a misdemeanor. (Bus. & Prof. Code, § 6128, subd. (b); see Silver v. State Bar (1974) 13 Cal.3d 134, 141 [117 Cal. Rptr. 821, 528 P.2d 1157].) In other words, in determining whether an action taken by an attorney or employee association violates the attorney's ethical obligations, we look not to whether the action creates antagonism between the attorney/employee and the client/employer, since such antagonism in the labor relations context is unfortunately commonplace; rather, we seek to ascertain whether an attorney has permitted that antagonism to overstep the boundaries of the employer/employee bargaining relationship and has actually compromised client representation. (10c) The County concedes that the Association and its members do have rights under the MMBA, but claims that these do not include authority to sue when their rights are violated. To fend off the argument that these collective bargaining guaranties would be meaningless without a judicial remedy, the County argues the Association has alternative effective means for enforcing the rights of its members, most notably by virtue of the fact that the attorneys have unparalleled access to county officials, which they can use to [exert] pressure on the County to reach an agreement regarding wages. Whether or not sound, that argument is beside the point. The ability of the Attorneys to influence the Board by informal means is one that predates, and exists independently of, the formal rights granted them under the MMBA. If the Attorneys are deprived of any formal means to enforce their rights, then these rights are no more meaningful than they were prior to the passage of the MMBA. Indeed, if the County's logic were followed, the Attorneys could be discharged for simply joining an employee association under the MMBA, and would have no ability to sue, despite the County's clear violation of statute, and no recourse other than the informal lobbying of the Board. Therefore, the denial of the Attorneys' right to sue for MMBA violations would represent not a compromise between collective bargaining rights and professional obligations, as the County contends, but a de facto judicial nullification of those rights. The only realistic accommodation between the enforcement of statutory guaranties under the MMBA and the enforcement of the Attorneys' professional obligations in this situation is to permit a petition for writ of mandate, as would be permitted to other public employees, while at the same time holding the Attorneys to a professional standard that ensures that their actual representation of their client/employer is not compromised. We therefore hold that attorneys employed in the public sector, who exercise their statutory right to sue to enforce rights given them by the MMBA, do not in such capacity violate their ethical obligations to their employer/client. [8] In so holding, we emphasize that attorneys in such circumstances are held to the highest ethical obligations to continue to represent the client in the matters they have undertaken, and that a violation of their duty to represent the client competently or faithfully, or of any other rule of conduct, will subject those attorneys to the appropriate discipline, both by the employer and by the State Bar. [9] In announcing this rule, we are not unmindful of the fact that attorneys suing their clients, in any circumstance, put a strain on the attorney/client relationship, and may tend to diminish the client's confidence in their attorneys' loyalty. But we must also acknowledge, as is obvious in the record of the present case, that the hostility between an attorney/employee and the client/employer predated and to some extent gave rise to the lawsuit. The MMBA is intended not to exacerbate conflict between employers and employees, but to provide the peaceful and ordered means for resolving those conflicts by promoting full communication between public employers and their employees. (Gov. Code, § 3500.) The Legislature may have decided that the benefits to public employee/employer relations of including attorneys within the MMBA's protections outweighed potential burdens on the attorney/client relationship. In any event, we cannot say that the Legislature, in extending these means of conflict resolution to public employee attorneys in arguably managerial roles, put such a strain on the attorney/client relationship as to compel the conclusion that the authorization of such lawsuits violates the constitutional separation of powers between the Legislature and the Judiciary. [10]