1

Legal Profession
Professor Hughes, Spring 2002
BACKGROUND: SOURCES OF REGULATION o Courts: Have inherent power over regulation of lawyers. Usually adopt ethical rules recommended by state bar. Can promulgate new rules. Sanctions: Can sanction an attorney for ethical violations in pending case. The ethics board can take into consideration some mitigating circumstances in issuing lighter sanctions then would be imposed otherwise (ex. disclosure of confidential information (Rule 1.6) to save someones life) Disqualification: Can disqualify a lawyer and not allow them to represent a party in a pending case. o State Bar Associations: Recommends code of ethics for lawyers that the courts then decide whether to adopt. Issues opinions on ethical issues. (Safe harbor created if you requested and received an ethics opinion for your particular situation; informal opinions do not create safe harbor but serve as indicia of good faith.) Has a grievance committee that can hear complaints against attorneys, and then censure them, suspend them or disbar them. o Malpractice Liability: Client can sue attorney for malpractice. Must show proximate cause and damages. (In contrast, sanctions can be issued even if no one was harmed by the attorneys misconduct.) o ABA Ethical Rules: States are influenced by model regulations adopted by the ABA. Canons of Professional Ethics (1908) Model Code of Professional Responsibility (1970) Model Rules of Professional Conduct (1983) *All of these rules are subordinate to statutory law (authorized by law exception) Ex. Prosecutors may use informants to communicate with and obtain inculpatory statements from D, even if D already has retained counsel on that subject matter (see Rule 4.2 and Hammad case) o Rules for federal attorneys: 28 U.S.C. 530(b): All federal attorneys are bound by the rules of the jurisdiction where they practice. If there is a conflict because the attorney is admitted in more than one jurisdiction, then the ethical rules of the jurisdiction where the case is tried probably apply. The applicable privilege rules, because they are evidentiary in nature, are the ones for the jurisdiction where the case is tried. CREATING THE LAWYER-CLIENT RELATIONSHIP o Before duties to a client can arise, there must first be a client. o Two ways to form a lawyer-client relationship: Express: A person manifests an intent to form a lawyer-client relationship and the attorney agrees. Usually occurs in a face-to-face meeting. Express contract drawn up with fee arrangement created. Implied: Arises when a person has reasonable basis for believing that relation was formed and the attorney does nothing to correct the persons misconception. Look for disclosure of confidential info: If person has disclosed confidential info about himself based on assumption that he is divulging this info to his attorney, relation is formed (ethical duties, fiduciary/agent law, and privileges are then initiated) o Ambiguities as to whether the relation has been formed: Any ambiguity is resolved in favor of the client. If contractual terms are unclear, resolved against the attorney. If unclear whether lawyer-client relation impliedly formed, then relation will be found if lawyer fails to make clear to person that he declines to represent him. o No fee required: The lawyer-client relationship can still be created even if the lawyer does not charge the client a fee, if someone else is paying the legal fees, or even if no fee arrangement discussed. Rule 1.8(f)when the payer is not the client, the lawyer can only represent that client if: (1) The lawyer is getting consent from the non-paying client, (2) The lawyer must be certain that, although another person is paying the bills, he will represent the client with the clients best interests in mind (not the payers best interest) (3) The lawyer is still required to maintain client confidences pursuant to Rule 1.6 o Duties attach: Once a lawyer-client relation formed, lawyer acquires ethical duties to the client. Moreover, he is a fiduciary and agent of the client, so fiduciary and agency law apply as well. ATTORNEY-CLIENT RELATION AS TO ENTITY CLIENTS (Rule 1.13) o (No Model Code counterpart.) o Rule 1.13 Organization as Client Hughes: the entity, not its constituents, that possess the attorney-client privilege and who possess the associated rights and duties 1

2 The lawyers primary loyalty is to the entityso, to the extent that the lawyers can represent the entity and the constituents in separate capacities without any conflict of interests, the dual, simultaneous representation is allowed The lawyer shall proceed in the best interests of the organization/entity You must be careful to elude any conflict of interest situation (Rule 1.7)it is a risky gamble to represent the entity and its constituents} if you do get in a conflict of interest situation, then you will have to terminate representation and may be subject to sanctions and a malpractice suit Duty is to the Entity, NOT its Constituents: This is true even in the close corp situation. The lawyers loyalties are to the entity, not its constituents, and so cannot represent a constituent on a matter adverse to the corp. (Rule 1.7 Conflicts of Interest) Jesse v. Danforth (Wis. 1992)(minority jurisdiction)Some doctors want to form a corporation (MRI Corp.) for the operation of an MRI machine. The doctors retain a lawyer from P&D law firm to help form MRI Corp. A patient wants to sue for malpractice from these doctors in their capacity as EEs of MRI Corp. and the patient retains another lawyer from P&D law firm. The doctors sue to preclude representation of the patient. Lawyer represents the entity, not the constituents (ie. not EEs, organizers of the entity, managers, executives)} Wisconsin says that P&D was retained by the doctors to form a corporation. Once that corporation is formed, then that attorney-client relationship extends to MRI Corp., and so the doctors become constituents of the corporation and the attorney-client relationship now exists between P&D and MRI Corp. So, all the privileged information and rights/duties that existed between the entity organizers (constituents) and the lawyers now exits between the entity and the lawyers} the entity (not the constituents/entity organizers) is the only one who can authorize disclosure of the privileged information and are owed rights/duties However, if P&D represented the doctors for purposes other than the formation of MRI Corp. then P&D would be precluded from representing the patients Murphy & Demory v. Admiral Murphy (Vir. 1994)Admiral Murphy was a shareholder/EE of Murphy & Demory and he wanted to acquire it. Pillsbury law firm represented M&D and then Admiral Murphy retained Pillsbury to assist him in the takeover. M&D sues Pillsbury for malpractice. Rule 1.13Pillsburys obligation was to the entity of M&Dthey had no obligation or duty to shareholders, such as Admiral Murphy (ie. constituents) By accepting representation of Admiral Murphy in his efforts either to take control of M&D or to form, prior to his resignation from M&D, a new corporation to compete with M&D, and the exercise of their professional judgment on behalf of the corporation would likely be adversely affected, Pillsbury committed malpractice Pillsbury did not get M&Ds consent (conflict of interests may be waived) before representing Admiral Murphy Who does the lawyer represent when individuals come to him to form a corp or other business entity? Entity formed: When individuals form a corporation, they must first retain legal counsel. Prior to incorporation, the attorney represents the individuals in their individual capacity; however, as soon as the corporation is formed, the attorneys utmost interest Wisconsin Rule (minority rule)the representation of the entity relates back to the preincorporation between the lawyers (if you successfully incorporate the entity, then the lawyer is deemed to never have had a lawyer-client relationship; rather the lawyer-client relationship is deemed to always have existed between the lawyer and the corporate entityeven before that entity became a corporation) (see Jesse) o Ramifications: Once entity is formed, the corp is retroactively deemed the lawyers only client. Hence, he can represent the corp against any of those individuals who formed the corp without being disqualified. Those individuals may also not have access to the confidential info of the entity. Make sure to inform the individuals of this when commencing representation. o Exception: In order for the retroactive rule to apply, the lawyer must not have also represented the individuals in a personal capacity at the same time the formation was occurring. If the confidential info given to the lawyer by one of the individuals has nothing to do with the entitys formation and is personal in nature, the lawyer may be held to represent both the individual and the entity. However, if individual discloses his financial information, even though it seems personal, may bear some relation to the entitys formation, and if it does, then retroactive rule still applies. 2

3 Majority Ruleother alternative is that attorneys represent these individuals as individuals until the entity is incorporated. At that point the lawyer will then have a lawyer-client relationship with the corporate entity; however the lawyer will still have successive conflict with the past client individuals Entity never formed: If the entity is never formed, the lawyer has a lawyer-client relationship with each person who had aimed to form the entity. Conflict among the individuals: If the lawyer has represented the individuals in a joint enterprise, if the individuals interest diverge and conflict arises before entity is formed, then lawyer must withdraw and not represent any of the parties under Rule 2.2. Duty of lawyer to disclose whom he represents: Under Rule 1.13 and Rule 4.3, the attorney has a duty when speaking with individuals both during the formation of an entity and after it is formed to let them know that he represents the entity and the ramifications that flow from this. Also whenever the lawyer is dealing with constituent of the entity, he should make it clear he represents the entity, not the constituent if this is not clear. If necessary, he should inform the constituent to get his own attorney. Rule 1.13(d)to the extent that a constituent of an entity believes that the lawyer represent him/her, it is the lawyers responsibility to inform that constituent that his relationship is with the entity (this relates to Rule 4.3) Rule 4.3if you are dealing with a party known to be unrepresented, it is the lawyers job to avoid the impression that he is representing that person or that the lawyer is not representing his/her best interests Disclosure of Constituent Conduct Adverse to the Entity: Under Rule 1.13, lawyer has a duty to go up the food chain and let entity know when one of its constituents is acting in a manner adverse to the entitys interests. Other solutions would be to ask the constituents involved to reconsider a matter or to allow for a separate legal opinion to be sought concerning the matter. Representing Both an Entity and its Constituents: A lawyer can choose to represent both an entity and some of its constituents provided that a conflict does NOT arise under the normal conflict of interest rules (Rule 1.7 requires consent by client and reasonable belief that the representation will not adversely affect the representation of another client). Merger Situations: Hughes: When an existing company has a attorney-client privilege and that company is acquired, then that relationship flows to the target/selling entity of the newly formed entity Tekni-Plex court says that when attorneys represent a target company on business matters and then on a merger/acquisition deal, the information disclosed between the attorneys and the target pertaining to the merger are privileged and can NOT be disclosed the surviving entity; HOWEVER, since the acquiring entity buys the target company, it acquirers all of the attorneyclient privileges, rights, and duties that the target had with the attorneys, so the attorneys may no longer discuss business matters with the members of the old target and confidential information pertaining to targets old business activities must be handed over/disclosed to the new/surviving entity Tekni-Plex (NY 1996): Old Tek was purchased by Acquisition and was merged into an entity called New Tek. Old Tek had one shareholder, Tang. M&L represented Old Tek as to environmental compliance. It also represented Tang and Old Tek in the merger negotiations with Acquisition. As part of the agreement reached, Tang promised to indemnify New Tek (to be owned by Acquisition) for any environmental noncompliance issues that occurred during Old Teks (formerly owned by Tang) operation. After merger occurred, New Tek (ie. Acquisition) brought suit against Tang after some environmental noncompliance problems were discovered. M&L wanted to represent Tang in the litigation, and it also wanted to withhold confidential environmental info and merger info from New Tek (ie. Acquisition) M&L is conflicted out of representing Tang because as to environmental compliance issues, New Tek (Acquisition) is M&Ls former client. New Tek stood in the shoes of Old Tek. Hence by representing Tang on the environmental issues, M&L was acting adverse to its former client on a matter substantially related to representation of that former client. The Court also addresses confidentiality issues. As to confidential info M&L acquired for the merger negotiations, Old Tek (Tang) and New Tek (Acquisition) were NOT the same entity and stood in the relation of buyer to seller, with M&L only representing the former. Hence, confidential info concerning the merger agreement did NOT have to be handed over the New Tek (Acquisition). At the time of the merger, there was a distinction between Buyer and Purchaser, Old and New Tek. But as to the environmental issues, there was no such distinction: New Tek (Acquisition) just continued the operation of Old Tek (Tang). Thus, confidential info as to environmental compliance issues did have to be handed over to New Tek, who on this issue stood in the shoes of Old Tek. Further, confidential info as to environmental issues cannot be divulged to Tang. 3

4 Acquisition Co. argues that when it bought Tekni-Plex (ie. its assets) it also bought the right to have M&Ls representationAcquisition Co. wanted the termination of M&Ls representation of Tekni-Plex and Tang and cease all communication between M&L and Tekni-Plex and Tang Court says that anything M&L said to the old Tekni-Plex and Tang in relation to the merger cannot be revealed to Acquisition Co. Court says that since Acquisition Co. bought the company, it acquired all the rights and duties that M&L owedM&L can no longer discuss business matters with Tang and the old Tekni-Plex, and the attorney-client privileges, rights and duties are now afforded to the new entity (Acquisition Co.) HughesWhen an existing company has a attorney-client privilege and that company is acquired, then that relationship flows to the acquisition entity of the newly formed entity

TERMINATING THE ATTORNEY-CLIENT RELATIONSHIP (Rule 1.16, DR 2-110) o Rule 1.16 Declining or Terminating Representation (a) Except as stated in paragraph (c), a lawyer shall not represent a client or, where a representation has commenced, shall withdraw from the representation if: (1) the representation will result in violation of rules of professional conduct (2) the lawyers physical or mental condition materially impairs the lawyers ability to represent the client; OR (3) the lawyer is discharged The client always has the right to terminate the relationship It does not matter if you are retained on a contingent basis and you are in the middle of trial; however, the client cannot do it with impunitycompensation can be sought o When attorney withdraws, must assist client in getting new lawyer and in making the transition as smooth as possible. o Mandatory Withdrawal [Rule 1.16(a)]: (1) Violation of ethics rule or law: Must withdraw if continued representation if lawyer knows it will lead to violation of ethics rule or other law. (2) Client terminates: The client can always fire the attorney at any time for any reason and attorney must withdraw. (But even though withdrawal is required, lawyer who is in house counsel at a business may have a retaliatory discharge claim.) (3) Lawyers health: Lawyer must withdraw if his psychical or mental health prevents him from competently representing the client. o Permissive Withdrawal [Rule 1.16(b)]: (1) Lawyer reasonably believes client is using lawyers services to perpetrate a crime or fraud. (compare to knows under a(i)) (2) Client has used the lawyers services to perpetuate crime or fraud. (3) Clients action or decision is considered by the attorney to be repugnant or imprudent. (4) Clients failure to meet obligations Such as failure to pay fee; however, the attorney must warn client first before withdrawing (5) Undue financial hardship. Must be more than simply deciding to dump one client to make more money off of another one (6) Any other reason for good cause shown. (Conflict of interest.) o When litigation is pending: Court can prevent withdrawal on efficiency grounds. o Cause of action for Retaliatory Discharge or Whistleblowing: Applies only when the attorney is in house counsel at a business, where the attorney is basically like any other employee of the company. Implied Contract Theory: Must show conduct of employer implied that lawyer would not be fired without good cause. General Dynamics court held that the in-house attorney could sue its former ER based on an implied contract claim because he had worked for the corp for 14 years and corp had implied that he was to be a long-term employee as long as he did his job. Retaliatory Discharge Tort Theory: Lawyer can NOT be fired if the basis for the firing violated some public policy rationale. Test for in house attorneys: o (1) The attorney can pursue the claim only if it would be a basis for retaliatory discharge by any other employee, AND o (2) (a) If in pursuing a claim where the attorney was fired for wanting to take some action that is permissive under the rules, the attorney can offer proof to establish his claim without violating ethical rules for attorney-client confidences, OR 4



5 Hughes: If the attorney adheres to a non-mandatory/permissive ethical rule and is discharged, then it will be assessed on a case-by-case basisthe claim requires a balancing test It must be claim that demonstrates that if the any other EE of the company (janitor, VP, manager) could bring a Retaliatory Discharge Claim under the same facts If the lawyer cannot prove his case without not violating Rule 1.6 Confidences, then he cannot bring the Retaliatory Discharge Claim Hughes says there is a possible argument that a Rule 1.6(b)(2) exception of the right of the lawyer to use the information to defend himself o (b) The attorney pursues a claim where he was fired for not violating a mandatory standard or ethical rule. (In which case he automatically has a claim, ie. per se retaliatory discharge claimsee General Dynamics) A client (corporate or individual) can fire an attorney for any reason (including if predicated on attorneys sex, race, or performance); however, the client might be subject to suit (ie. tort claim) General Dynamics (Cal. 1994): Attorney was fired when he refused to back down from an investigation into employees drug use and into the bugging of the corps security office. The corp was a national defense company, so by not performing the investigation, the attorney might have violated criminal law. Held: Because it is mandatory that an attorney not break the law in representing a client, he had a per se retaliatory discharge claim. Court also found that he had an implied contract claim because he had worked for the corp for 14 years and corp had implied that he was to be a long-term employee as long as he did his job Rule 1.8 Rights of Associatesstipulates that if the attorney works in a law firm, an associate has the right to divulge improper behavior occurring within the firm However, the information must be corroborated by another person

DUTY OF CONFIDENTIALITY (Rule 1.6 & DR 4-101) o Privileged Information v. Ethically Protected Information Privileged Informationinformation protected under the rules of Evidence Ethically Protected Informationinformation protected by the rules of ethics Ethically Protected Information is broader than Privileged Information and actually encompasses Privileged Information Perez court held that even if the communications were not privileged (FRE) because confidentiality waived by presence of third party, they were still ethically protected o Relationship between duty of confidentiality and the evidentiary attorney-client privilege: Ethically Protected Information (Confidences): Prohibits an attorney from voluntarily divulging info about a client. It is more broad than the evidentiary privilege. Ethically Protected Information covers: o Confidential communications directly between lawyer and client or their agents, AND FRE only covers this prong o Any and all information the lawyer obtains in the course of representation, regardless how or from whom the lawyer obtained the info AND o Work product Rules of Evidence (Privilege): Deals with situations where an attorney can be compelled to hand over confidential info by the court. Covers only confidential communications directly between lawyer and client or their agents. Does not cover underlying facts. Future crimes exception for privilege is much broader than the exception under the ethical duty Perez v. Kirk & Carrigan (Texas Ct. App. 1991)Perez drove a Coca-Cola truck into a school bus. K&C lawyers were hired by Coca-Cola and they interviewed him. Two Coke attorneys visited Perez in the hospital. Perez claimed that the attorneys told him they were his attorneys. Third party was present when communications to Perez occurred (thus, they are not privileged as it pertains to the rules of evidence). The attorneys revealed incriminating info given by Perez to local DA who prosecuted. K&C lawyers decided to not continue representing Coca-Cola. Soon after, the lawyers gave that information to the District Attorneys office in relation to the indictment against Perez for involuntary manslaughter. Perez sues K&C for violation of attorney-client confidentiality. Held: Court distinguishes between waiver of the privilege when the communications are not confidential, and the ethical duty of confidentiality, which applies to ALL info learned about 5

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6 the client. Hence, even if the communications were not privileged (FRE) because confidentiality waived by presence of third party, they were still ethically protected Here, the lawyers were not compelled by the court to divulge the confidential information, rather they gave up the information on their own volition K&C lawyers have a serious conflict of interest problemthe lawyers could not simultaneously represent Coca-Cola and Perez (who, although was a Coca-Cola EE, was also a separate D) Hughesjust because you violate a rule does not mean that you will automatically be given disciplinary action o There are mitigating circumstances Rule 1.6 Confidentiality of Informationa lawyer shall NOT reveal information relating to representation of a client UNLESS the client CONSENTS (explicitly or implicitly) after consultation, EXCEPT when the lawyer reasonably believes revelation is necessary to (i) prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm, or (ii) establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyers representation of the client NO Posthumous Exceptiononce the duty arises, it never ends, even upon the clients death. Disclosing & Use: Duty of confidentiality requires the attorney to neither disclose the info obtained without consent (Rule 1.6) or to use the info to the clients disadvantage without consent (Rule 1.8(b)). Permissive Exceptions to the Duty of Confidentiality (Ethical Rules): Client Consent: Client after consultation can consent to the disclosure (Rule 1.6 and Rule 1.8(b)) Prevention of Prospective Crimes: Rule 1.6(b): Attorney reasonably believes that disclosure of the info is necessary to prevent the client from committing a crime that likely will result in imminent death or imminent substantial bodily harm may disclose to whomever necessary to prevent the crime. o The only way to get around this strict rule is if the clients sole reason for consulting the attorney was to further some future crime or fraud, in which case no attorney-client relationship existed in the first place. This would get around the imminent death & imminent substantial bodily harm restriction. DR 4-101: Attorney may disclose intention of his client to commit ANY CRIME and the info necessary to prevent the crime o The code differentiates from the model rules in that it allows a lawyer to reveal the intention to commit ANY crime (it does NOT have to likely result in imminent death or substantial bodily harm as is required by Rule 1.6) Fee Dispute: Can disclose info when there is fee dispute with client and lawyer believes it is reasonably necessary for him to disclose the info. Info disclosure must be limited to the set of persons who need to know the info for dealing with the fee dispute. Self-Defense: Attorney can disclose info in order to defend himself on any claim arising out of the lawyers representation of the client to the extent the lawyer believes is reasonably necessary (ex: malpractice suit, bar disciplinary proceedings). Can only reveal info that concerns the matter in contention: cannot indiscriminately disclose all info one has on a client. Can disclose when criminal or civil action is brought against the attorney based on conduct in which the client was involved to the extent the lawyer believes is reasonably necessary (ex: lawyer charged as coconspirator with drug client). Can only disclose the info to the limited set of persons who need to know the info for the lawyers self defense Pg. 38 HypotheticalMy Client is HIV Positive} if the client (a prisoner with HIV) says he will have sex with his wife, can the lawyer reveal to others that the client is HIV positive? Is the transmission of HIV imminentas it is defined in the exception of Rule 1.6? Does the girl already have HIV? Is the transmission of HIV a crime? o Code 4.101 lawyer can reveal the intention to commit any crime (it does not have to likely result in imminent death or substantial bodily harm as is required by Rule 1.6) You can NOT use any subterfuge (artifices or surreptitious maneuvers) to secretly reveal the clients confidences If the wife is paying the attorney bills for the client 6

7 Rule 1.8(f)when the payer is not the client, the lawyer can only represent that client if (1) The lawyer is getting consent from the non-paying client, (2) The lawyer must be certain that, although another person is paying the bills, he will represent the client with the clients best interests in mind (not the payers best interest) (3) The lawyer is still required to maintain client confidences pursuant to Rule 1.6 o Rule 1.16Declination or Termination of Representation Pg. 38-39 HypotheticalI Know Theres a Gun} the client was arrested for possession for small amount of drugs; however, while arrested, the client took a gun out of his boot and hid it under the seat in front of him in the police car. A future arrested criminal could eventually find the gun and use it against the officers. The client does not want reveal to the cops the existence of the gun because forensics would reveal his fingerprints and tie the client to a prior armed robbery Hughesthe criminal activity has to be the prospect of a crime (as opposed to the prior commission of the crime) So the prior robbery is an invalid reason Exceptions to the Evidentiary Privilege (FRE): Self Defense Collection of Fees Client Waiver: Express: Client affirmatively waives the privilege. Negligence or Inadvertance: Client can waive the privilege by negligence or inadvertance. Must take reasonable precautions to ensure that communication is confidential. If some third party becomes aware of the privileged info, they can use it (ex: client brings third party with them when consulting lawyer). Multiple Clients: When several persons are jointly represented, they waive their right to assert the privilege against the other joint parties in subsequent litigation that might arise between those parties. Crime / Fraud Exception: Communication is not privileged if the communication entailed the client consulting the lawyer in order to commit some future crime or fraud. (Note how future crimes exception for privilege is much broader than the exception under the ethical duty.) Government Entity: Some courts have held that the government does not have an attorney-client privilege to assert. These means that communications between government lawyers and government employees may NOT be privileged. When exception to the privilege is found to exist by a court, a lawyer can be compelled to disclose the communication even though he could not voluntarily hand over the info based on his ethical duty. Entity Clients: Deals with situation where lawyer represents an entity such as a corporation or partnership. What is the proper relation between the attorney and the entitys agents, including officers, employees, and shareholders? Control Group Test: The attorney-client privilege only extends to those employees who have control over entity decisions concerning legal issues. Hence it only covers upper level employees. Upjohn Test (Federal Rule): Upjohn Test (Federal Rule): Any communication between counsel and a constituent of the entity is privileged if it is: (a) with respect to matters within the scope of that constituents employment; AND (b) when the constituent is aware that the communication is for the purpose of the entity obtaining legal advice o If the lawyer tells the constituent that the information is need for legal reasons (Can be in the form of a written questionnaire sent to the employees.) Hughesbecause this SCt ruling pertains to privilege (ie. evidentiary rule), the holding ONLY affects federal rules on privilege; states may have divergent rules on the issue of privilege o Control Group Testirrespective of the information communicated, the control group test asks whether the lawyers communication was with a person in the control group (such as directors and managers) of the entitythe SCt rejects the Control Group Test in favor of the Subject Matter Test SCt rulescommunications between corporate counsel and all corporate agents are privileged if the communications are about matters within the scope of the employment OR duties of these commitments and if the communications are made for the purpose of providing legal advise or attending the legal needs of the entity Samaritan Test (Arizona)): o 7

8 Constituent Initiates: If the constituent initiates the conversation with the attorneyand the conversation concerns obtaining legal advice for the entity, not the constituent personallyit is privileged. Counsel Initiates: If the entitys counsel initiates the conversation, for the privilege to apply: o The conversation must concern the constituents own conduct when acting within the scope of his employment (constituent cannot be a mere witness) o The conversation must be for the purpose of assisting counsel in providing legal advice to the entity (ex: if employee and counsel were having a friendly, informal conversation and suddenly employee admits some wrongdoing that would bind the corp, the admission is not privileged) Samaritan Foundation v. Goodfarb (Arizona 1993) (Samaritan Test (Arizona)): the doctor committed malpractice during surgery. The nurses and scrub technicians who were in the surgery room were immediately interviewed by a paralegal, which was an employee of the Ds counsel. Years later, the nurses and scrub were interviewed by Ps counsel, but their recollection was minimal. The Ps counsel seeks a subpoena of the interview transcript done by Ds paralegal. This court rules in adherence with Upjohn SCt that the Control Group Test is underinclusive, but that the test employed by the SCt is overinclusive This court rules that: where someone other than the EE initiates the communication, a factual communication by a corporate EE to corporate counsel is with the corporations privilege if it concerns the EEs own conduct within the scope of his or her employment and is made to assist the lawyer in assessing or responding to the legal consequences of that conduct for the corporate client o This excludes from the privilege communications from those who, but for their status as officers, agents, or EEs are witnesses o If the communication is initiated by the EE and it deals with the corporations legal matters then it is considered privileged information Who gets access to the confidential info? (see supra Privilege as to Entity Clients)

PROTECTION OF ATTORNEY-CLIENT RELATION FROM OUTSIDE INTERFERENCE (Rule 4.2, DR 7-104) o Rule 4.2 No Contact Rule: A lawyer who is representing a client can NOT contact or communicate with a person who the lawyer KNOWS to be represented by an another attorney as to the subject matter of the lawyers representation. That lawyer must know (not reasonable should have known; not reasonable belief) that the person is represented. (When dealing with employees of a corporation, can argue that it is unclear general counsel represented them as to the particular matter at issuegeneral counsel may not even know of the issue yet. But a lawyers claim that he did not know the person was represented must be made in good faith) If you do not know that the person is being represented, then you can communicate with that person with impunity HOWEVER, knowledge can be inferred from surrounding circumstancesso if there is indicia of representation then knowledge will be inferred Lawyer can communicate to the other person about any subject except for the matter on which the person is being represented If the persons attorney permits his client to talk to the attorney, then it is permissible Lawyer not acting in a representative capacity for someone in the matter involved can contact a represented person authorized by law exceptionbecause all the rules are subservient to all statutory law, then that law supercedes the rules See Hammad case, where the state law permits investigatory techniques of using informants to speak to represented persons Hughes: There is a very different standard between Model Code and Model Rules Hughes: a client does NOT have the ability to waive this rule; so even if the person says, I want to talk to the other lawyer, irrespective of what my attorney thinks, the No Contact Rule still applies and the attorney can not communicate with that person o Divergence with DR 7-104: DR 7-104 limits the no contact rule to parties as opposed to persons and so is a much higher standard that has to be reached before contact is precluded. Rule 4.2 thus is much broader. o No Contact Rule as to Entity Clients: Niesig court ruled that, when determining whether constituents of an entity client are off limits as it pertains the No Contact Rule, the Blanket Rule and the Control-Group Test are not proper; rather the court imposed a Vicarious Admissions Rule that affords no-contract protection to: 8

9 (1) corporate EEs whose acts or omissions in the matter under inquiry are binding on the corporation (ie. the corporations alter egos) or imputed to the corporation for purposes of its liability, OR (2) EEs implementing the advice of counsel EEs with speaking authority for the corporation and EEs who are so closely identified with the interests of the corporate party as to be indistinguishable from it are deemed to be parties under this Rule Niesig v. Team I (NY 1990): P wants to have his attorney interview the corporate Ds EEs who witnessed the accident. Are EEs of a corporate party also considered a party as it pertains to Rule 7-104 proscription against attorneys communicating with parties represented by an other attorney in the same subject matter The court refutes the blanket rule (too broad) and the control-group test (too narrow) The court favors a (vicarious admission) rule that defines party to include: o (1) corporate EEs whose acts or omissions in the matter under inquiry are binding on the corporation (ie. the corporations alter egos) or imputed to the corporation for purposes of its liability, OR o (2) EEs implementing the advice of counsel o EEs with speaking authority for the corporation and EEs who are so closely identified with the interests of the corporate party as to be indistinguishable from it are deemed to be parties under this Rule o Constituents whose communications would serve as admissions against the entity or that would bind the entity can not be contacted and are protected against outside contact To see if a constituents communications would be an admission against the entity or would bind it, must look to see if the communications concern matters within the scope of constituents employment o Court rules that Rule 7-104 proscription applies to all current EEs, but not to former employees o All other EEs are not shielded under Rule 7-104 and may be informally interviewed Hughes: this test can still be underinclusive/overinclusive even if somebody is acting within the scope of their employment, they can still be a witness Hughes: this Niesig rule is a very close approximation of Rule 4.2 (ie. the comment is congruent) Hughes: it is important to separate determination when an attorney-client privilege is formed Hughes: there is nothing that precludes to talk to anyone, rather the rules pertain to precluding interview persons without their counsel o Persons represented by an attorney can still be interviewed in a formal deposition (with their attorney present) with the issuance of a subpoena Hypoif a client comes to an attorney with a complaint that she is being denied a promotion because her company discriminates against race and gender. She wants to sue her ER. Can the attorney talk to her coworkers? Can the attorney talk to the VP? Rule 4.2 is only invoked if the lawyer knows (not reasonably should have know) that the person is already represented What you should do is ask the client if she thinks the company is represented on the subject matteryou can not just ignore indications that the person/corporate EE has representation o You do NOT have to do a thorough investigation to ascertain whether or not they have an attorney on that subject matter (so in house counsel can not be automatically assumed to be retained for representation on that subject matter) If the corporation has retained counsel on the subject matter, the attorney can speak to the EEs so long as they are NOT in a position to bind the corporation o It is much more likely that a VP could bind the corporation (and so is off limits); however, with big corporations, some VPs do not have the ability to bind the corporation Restatement (adopted in NJ)permits contact with an adverse entitys agents even if their statements will be admissible against the entity so long as they are NOT entity agents who direct counsel, agents who have the power to compromise or settle the matter, agents whose conduct may be imputed to the organization for purposes of civil or criminal, or agents whose statements would bind the organization (??????Is this correct?) This rule facilitates candid and informal access to information This is broader than the Vicarious Admission Rule

10 An alternative rule which is also used (especially with government entities) is to permit contact with persons whose statements would otherwise be vicariously admissible against the entity but then forbids admission of their statements Three standards court use to determine if evidence that was voluntarily released without inducement is admissible: If you give out information without inducement Case-by-case determination, where it must be determined how damaging the evidence is, how was the evidence released It is never a waiver if you did not mean to waive because there is no intent Rule 3.4(f)permits the entitys lawyer to request the entitys EEs and agents to refrain from voluntarily giving relevant information to another party so long as the lawyer reasonably believes that that persons interests will not be adversely affected Rule 4.3In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested or not involved in the case. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyers role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding No contact rule less stringently applied against government employees: The no contact rule is applied more loosely when contact is sought with government employees. The idea is that members of the public should have access to the government to know what is going on. No contact rule in the criminal context: Sixth Amendment precludes prosecutor/state from questioning, outside the presence of his counsel, a D against whom judicial proceedings have been initiated The judicial proceedings must have already begun However, the fact that a person has an attorney on retainer is insufficient to activate the no contact rule: must be clear that the person is represented as to this particular issue. However, the Sixth Amendment does NOT prevent questioning a charged person about a factually related but distinct and uncharged crime However, for indigent Ds, a prosecutors custodial pre-arraignment interview of an indigent suspect invites the application of the no-contact rule and suppression even though, technically, the suspect does not yet have a lawyeressentially, because it is known that the indigent D will retain a public defender Authorized by Law Exception (Rule 4.2)an exception to the No Contact Rule that allows for contact with a represented party if authorized by law. This is a gaping exception which is used by prosecutors to justify contact with suspects. authorized by law exceptionbecause all the rules are subservient to all statutory law, then that law supercedes the rules See Hammad case, where the state law permits investigatory techniques of using informants to speak to represented persons; however, the court rules that the use of a sham subpoena overstepped the limits that the law allows (because it transformed the informant to an alter ego of the prosecutor), thus violates Rule 4.2 CB: other circuits have repudiated the holding in Hammad on the basis that it unduly constrains investigations and have circumscribed those who fall under party to be protected under Rule 4.2 See Miller case, where the court ruled that the detectives exceed the extended parameters afforded to them in the law when they refused to cease questioning a person even though his attorney asked them to stop US v. Hammad (2d Cir 1990)Hammad brothers defrauded Medicaid by sending out false invoice produced by Goldstein. The government convinced Goldstein to cooperate in inculpating the Hammads. It was known that Hammad already had a lawyer representing them on this subject matter. During investigation, prosecutor had Goldstein (an accomplice of D) approach Hammad (D) with false subpoena to get Hammad to make incriminating statements on tape that could be used as admissions. This court agrees with the lower court that the prosecutor breached ethical rules o The prosecutor has much room to employ legitimate investigative techniques in conducting criminal investigations (such as the use of informants); however, there are instances when the government prosecutor may overstep his bounds (and thus violate ethical precepts)because the informant was given a false subpoena, his status was that of alter ego of the prosecutor, thus the informant was engaging in communication proscribed by Rule 4.2 However, this court reverses for the prosecutor and rules the recordings and videotapes are admissible 10

11 Although the prosecutor contravened ethical rules, the exclusionary remedy sought (ie. suppression of recordings and videotape) is inappropriate in this case o Exclusion of evidence is not required in every casein case sub judice, the court refused to suppress the evidence because the rule was unclear prior to this case. This case has been limited to its facts and courts are pretty willing to allow prosecutors to make contact with represented persons during the investigatory stage. Rule 8.4a it is a violation of this rule if a lawyer violates any rule or if it gets anybody else to violate this rule State v. Miller (Minn. 1999)a law enforcement had a search warrant for BSL company. While there, BSLs general manager arrived and they began to ask him questions. BSLs attorney (who claimed to represent the company and the general manager personally) called and asked that they not interview him without his presence. The detectives refused to terminate the interview and refused to allow the attorney to enter the premises The court ruled to suppress statements the general manager made after the attorney requested that the interview be terminated based on the Hammad ruling o The court recognized the authorized by law exception; however, here (as in Hammad) the detectives exceeded their bounds Permission From Counsel Exception: A lawyer may communicate with a person about the subject matter of the representation if that persons counsel has given consent. Divergence with DR 7-104 in the entity context: Because Rule 4.2 refers to persons, if a constituent from an entity has retained his own counsel, permission from that persons counsel is sufficient even if the entitys own counsel does not give permission. In contrast, this would NOT be true under DR 7-104 because it refers to parties. Interference through use of agents (Rule 8.4): The rule proscribes a lawyer from getting some third party to commit an unethical act for him. Thus, a lawyer can be liable for outside interference if he gets an investigator, the client, or some other third party to directly contact the other represented person. HOWEVER, a client on his own without direction from his attorney is always free to talk to other persons involved in the case Improper acquisition of confidential info: A lawyer is precluded from inappropriately acquiring and using confidential info of some third party. Although the Model Rules do NOT explicitly prohibit contact with an opposing partys expert, a courts rules might (based on witness tampering), thus would violate Rule 3.4(c) If a lawyer learns confidential information from an expert previously interviewed by the opposing side, the lawyer and his or her firm may be disqualified Some courts place a presumption that the lawyer elicited the informationand it is up to that lawyer/firm to rebut that presumption o One way to avoid this is to screen out the experts to make sure they are not aware of the adversarys legal strategy Misdirected documents, letters, fax, etccontaining confidential information ABAa lawyer who mistakenly receives an opponents confidential information should NOT examine it but should instead request the opponents instructions Courts can take 3 approaches: o never waived approachholds that a disclosure that was merely negligent can never effect a waiver because the holder of the privilege never had intent (followed by Maine) o strict accountabilityeffects a waiver privilege regardless of the privilege holders intent or inadvertence o middle testwhere courts must consider a number of circumstances relating to the inadvertent production (followed by Mass.) o Ex. P found a confidential memorandum of the opposing partys law firm that was accidentally left on the hearing room table during argument. Ps attorney thought that any claim of privilege as to the documents had been lost as a result of the adversarys careless handling of them (strict accountability approach). Court repudiated this and reproached Ps attorney and dismissed the case (based on never waived approach) Possible Remedies Court suppresses use of the confidential info. But even if the info is suppressed, unless there is a clear-cut link, courts will not suppress information acquired later on that might have been discovered based on ideas generated from looking at the confidential info. Court sanctions attorney for obtaining and using the info. Courts have also dismissed claims where the litigant is a participant in the invasion of the opponents confidential relationship 11 o

12 Ex. P found a confidential memorandum of the opposing partys law firm that was accidentally left on the hearing room table during argument. Ps attorney thought that any claim of privilege as to the documents had been lost as a result of the adversarys careless handling of them (strict accountability approach). Court repudiated this and reproached Ps attorney and dismissed the case (based on never waived approach) Remember: Only a client can waive confidences, and there is no implied waiver of confidences. Implied waiver arises only in context of communications between a lawyer and client. Hence lawyer can NOT use confidential info that was (i) accidentally sent to him, (ii) accidentally left within his view, or (iii) that some other third party wanted to disclose to him (see below for hypo concerning paralegal) What recourse might a D have if D can show that the prosecution has improperly obtained confidential information from the defense Some circuit courts require that D make a prima facie demonstration: o (i) that procurement of the confidential defense strategy results in prejudice (that then shifts the burden to the prosecution to demonstrate that no prejudice occurred) or o (ii) that procurement means by the prosecution were corrupt (prosecutorial misconduct) HypotheticalYou are representing a class in a case. A former paralegal for the adversary contacts you and says that her side is not producing all the necessary documents that were in the subpoena in discovery If a person is a former EE, he can be contacted with impunity; HOWEVER, the confidential information can not be ascertained from her The proper reaction would be to go to the court and assert that the adversary has inadequately produced documents o Hughes: going to the court is good because it is very difficult for a disciplinary board to punish you by following a judges direction However, what if the paralegal is leaving town that night and the judge is unavailable o Hughes: first and foremost, you need to secure the documents o ABA: permits an attorney to receive the documents yourself if you can show that the documents were NOT unlawfully obtained (such as if the paralegal broke in and stole the documents) or that the paralegal is not giving you these documents by way of breach of fiduciary duty an attorney is permitted to look at the documents for the purpose of assessing the quality and nature of these documents are} then you can preserve the documents and contact the judge later o

LAWYER AS AGENT o Lawyers are agents of their clients and hence have authority to act for their clients on matters within the scope of the representation. o Agency LawLawyers are their clients agents (and fiduciaries), so the laws of agency apply to the client-lawyer relationship Lawyer has authority to act for the client on the subject matter of the retainer It is important to clearly define so far as is reasonably possible what the lawyer is retained to do; HOWEVER, an ambiguous retainer might be construed to include services the lawyer never intended to perform so as to possibly protect the lawyer from claims that he (i) exceeded his retainer, or (ii) committed neglect or malpractice Agents are also fiduciariesthe lawyer is held to high standard of conduct The lawyer has the authority to act on behalf of the client and bind the client insofar as the client authorizes (determined by Actual Authority or Apparent Authority) o Ability to Bind: Because a lawyer is his clients agent, his actions can bind the client and his words can serve as vicarious admissions against the client. Ineffective Counsel in Criminal Context Exception: If an attorneys mistake is so egregious as to constitute ineffective assistance of counsel under the Sixth Amendment, client is NOT bound. (but see Taylor) Taylor v. Illinois (US 1988)Lawyer willfully decides not to reveal the identity of the witness to the prosecution until too late in the trial. So the court reprimands the lawyer and punishes him by not allowing his witness to testify. This is a criminal suit Client says that his constitutional rights (6th Amendment; Compulsory Process Clause) were violated because the client is being punished for acts his lawyer did SCt says that the client has to live with the consequences of the decisions his lawyer makes o The behavior of the lawyer are imputed to the client (agency) 12

o o

13 Hughes: the only recourse the client has is to sue his attorney for malpractice (Rule 1.1 Competence; Rule 1.3 Negligence) Cotto v. US (1st Cir. 1993)the lawyer failed to file on timely manner, so the judge dismisses the case with prejudice. The court rules that the client is bound by his lawyers (ie. agents) actions Hypo: If the lawyer botches up the representation of his client, then the lawyer must inform the client of his error (even if it would subject the lawyer to malpractice suit) The lawyer always needs to keep the client informed as to matters that the client should know Actual Authority v. Apparent Authority: When the lawyer has Actual Authority he can unequivocally bind the client, as is usually delineate in the retainer (subject to Ineffective Counsel in Criminal Context Exception) When the lawyer has Apparent Authority, then if the client has said or does something to make the appearance that the lawyer has the authority then if the lawyer exceeds his retainer, then the client is bound (subject to Ineffective Counsel in Criminal Context Exception) A lawyer has the ability in some circumstances to go beyond the scope of representation and bind the client if the client has done something towards the third party that makes that party believe the lawyer had authority to represent the client as to the matter Ex: Client tells lawyer not to agree to settlement without his express consent. However, during settlement negotiations, the client for tactical reasons indicates to the opposing side that his lawyer can agree to a settlement for him. If settlement offer then accepted by clients attorney, client may be bound based on his representation to the opposite side). Vicarious Admissions: Statements of an attorney at trial or during negotiations can be vicarious admissions of a client. Fiduciary Duties: Because the lawyer-client relationship is one of agent and principal, it is a fiduciary relationship. The lawyer is the fiduciary of his client. This fiduciary duty obliges the attorney to treat the client differently and comport himself differently, such as: The attorney can NOT compete with the client; Strict rules about entering into business deals with client (Rule 1.8); Attorney must disclose info to and communicate with client and give advise.

COMPETENCE (Rule 1.1, DR 6-101) AND DILIGENCE (Rule 1.3, DR 7-101) o Competence: Rule 1.1, DR 6-101: Attorney has duty to possess and exercise on his clients behalf the legal skill, knowledge, thoroughness and preparation reasonably necessary for the representation. o Diligence: Rule 1.3, DR 7-101: Attorney must persistently pursue clients matter and not act with delay or neglect. COMMUNICATION AND SHARED DECISION MAKING o Duty to Inform & Advise: Clients place huge reliance on their attorneys. Hence attorneys have a duty to disclose and explain info to their clients. o Rule 1.4 CommunicationRequires the attorney to provide the client with the information he needs to make informed decisions pertaining to the objectives of the representation Must keep the client generally informed about the tactics and means the lawyer plans to use. It is the lawyers duty to clear up any ambiguity, so any ambiguities in what was communicated are resolved by the court in favor of the client. If it is unclear whether lawyer is giving legal advice or friendly advice, business or personal advice, any ambiguity is interpreted in favor of what the client likely believed. Hence, lawyer may be found to have been giving legal advice, thus requiring him to have fully informed the client of all legal issues and concerns that surrounded the matter for which advice was being given. Malpractice Claim: If lawyer makes some mistake that rises to the level of a malpractice claim, he must inform the client of this error and advise the client to speak with another attorney. Err on the Side of Disclosure: In all situations it is best to communicate to the client and let them know what is going on. Whenever there is a risk of conflict of interest, make sure you speak to the client about it even if you dont think that technically a conflict would be found. In joint representation, always make clear to the parties the risks of joint representation. Get in Writing: When you inform a client about something and they decide what to do, the best thing is to get the decision in a writing so it is clear client was given all relevant info in making the decision. This is particularly true if the client decides to go against your advice and do something like not pursue a certain claim. Draw up a document that describes the advice given and the possible ramifications if the advice is not followed and then get client to sign thisthis will help protect against malpractice liability.

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14 Nichols v. Keller (Cal. 1993)Nichols brought suit for workers compensation claim and is represented by Keller. After the suit, Nichols finds out that his facts could have merited other ancillary claims against 3rd parties, which Keller failed to mention and the SOL has expired Court rules for P for failure to advise the client of the possible civil tort claim, even though not in the firms area of expertise, was sufficient for stating a negligence claim against the firm. (Would have been different had client specifically stated that he only wanted to pursue workmans comp claim.) o Liability can exist because the attorney failed to provide advice o Lawyer must furnish advice when requested, but also to volunteer advice when necessary to further the clients objectives The lawyer need not advise and caution of every possible alternative, but only of those that may result in adverse consequences if not considered Shared Decision Making: Rule 1.2 Client Determines Objectives; Lawyer Determines Means & Tactics: Client has the right to make decisions concerning the objectives of the representation. Attorney has the right to make decisions concerning the means towards reaching those objectivesattorney has final say as to tactical decisions. Withdrawal (Rule 1.16, DR 2-110): If the attorney has a fundamental disagreement with the client over tactical decision, best thing to do is to withdraw. If lawyer believes client is making an imprudent or repugnant decision, can withdraw under Rule 1.16. Situations Where Client has Authority: Civil: (i) Decision whether to have jury trial; (ii) Decision whether to settle (unless apparent authority issue arises) Criminal: (i) Decision whether to have jury trial; (ii) Decision to enter a plea; (iii) decision whether client should testify Situations Where Attorney has Authority: Procedural matters and tactical matters. (Ex: Lawyer makes decision regarding (i) manner and scope of cross-examination, (ii) which witnesses to call, and (iii) what theory under which to argue the case.) Clients with Diminished Capacity (Rule 1.14): When a lawyer reasonably believes that his client can NOT act in his own best interest due to mental disability or because client is minor, he can ask the court to appoint a guardian or for some other protective measure, such as asking court to order a psychiatric evaluation. But as far as possible, the attorney must make effort to maintain a normal client-lawyer relationshipthe attorney can NOT simply refuse to act according to clients wishes if the client is still capable of making some decisions. Jones v. Barnes (SCt 1983)Barnes had been convicted of robbery and assault. He appeals and is assigned an attorney. Barnes asks his lawyer to include different elements to the pleading, but the lawyer does not do it. Criminal attorney did not raise all of the issues his client wanted him to on appeal. Client argued ineffective assistance of counsel. Barnes argues that he has the right to plead every non-frivolous assertionSCt denies Barnes claim o As a constitutional matter, the lawyer does not have to pursue every non-frivolous claima brief that raises every colorable issue runs the risk of burying good arguments o The lawyer has wide discretion in what arguments are profferedattorneys job is to weed out certain issues, streamline the argument, and present the most effective case to the appeals court. o The decision over which issues to raise on appeal was a tactical issue properly left to the attorney. *Court does note that even though this does not rise to the level of a constitutional violation (and Ds conviction appeal is denied), it may still serve as a basis for malpractice liability Hughes: the attorney rules are subordinate to the law, so the rules are in place except to the extent that they come in conflict with the law Hypo: Ms. Nicepersonif you are nice attorney and are friends with your adversary. If your adversary is about to miss a deadline (due to personal matters) for filing an amended complaint. He could get an extension, but he needs your approval for this extension and a court order. He asks for your extension, but forgets that he needs the court order. Missing the deadline would result in dismissal of the case with prejudice. Should you remind him? Should you consult your client before you decide what to do (does this invoke Rule 1.4)?

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15 If you do mention it to your client and he directs you to not inform your adversary, then you are precluded from doing it (you are bound to do as your client instructsso long as you maintain representation) Olfe v. Gordon (Wis. 1980)Olfe hired attorney Gordon for some real estate deal. Olfe directed Gordon not to offer a certain security interest for the mortgage. Gorden set up the contract against this direction; however, Olfe signed the contract. She now sues Gordon for malpractice The client gave the lawyer specific directions, which he contravenedirrespective of the knowledge that Olfe had of the industry and of every intricate detail of the contract, the lawyer is liable Client had malpractice claim because he did not follow the clients instructions. Client has right to decide on what the objective is and lawyer must respect this. Also lawyer lied to client by not telling her that he set up a second mortgage but told her he had set up a first mortgage, which is in itself an ethical violation (Rule 1.4 Communication) Hypo: Id Rather Diethe lawyers client is on death row. The client and the lawyer maintain his innocence; however, after years of appeal and living in a small cell, the client wants to die. What do you do? Rule 1.14 Client with Diminished Capacityif the client is disabled, you must still maintain an attorney-client relationship Rule 1.2 Client-Objectives; Attorney-Meansthe client determines the objective and the attorney has the right to determine the means for the achievement of that objective Hughes: All you can do is try to convince the client otherwise (and eventually obey his wishes) or withdraw from the case (Rule 1.14) Hypo: Accept the Offerthe client is in divorce court and she does not want to negotiate; rather, she wants to settle for less money than what the lawyer thinks she can get The lawyer often receives complaints from former clients that they wish they had gotten more money Hughes: the best thing to do is to make a written document/memo stating that you recommended seeking more, but that the client rejected the advicethis way you elude any subsequent claim by your client that you ill-advised her Your potential adversary can be your current clientyouve got to protect yourself

CONCURRENT CONFLICT OF INTERESTS: CLIENT-LAWYER CONFLICTS o Rule 1.8 Entering into business transactions with clients (DR 5-104): Lawyers and clients can enter into business dealings with one another, but these dealings are analyzed with extreme scrutiny. There is NO blanket prohibition against a lawyer taking a business with a client; however, by definition, the lawyer is entering into a conflict of interest by engaging in a business transaction with a client This issue often arose during the dot com boom of the 1990s where lawyers were paid by these burgeoning tech companies by way of equity interests in the company o Rule 1.8(a) General Proscription Against Lawyer-Client Business (w/ Exceptions): A lawyer can NOT enter into a business transaction with a client or knowingly require a property or pecuniary interest adverse to the client UNLESS: (i) Fair and Reasonable Terms (No Take Advantage)the transaction itself plus its terms must be fair and reasonable to the client (very nebulous)the attorney can NOT take advantage of the client Even if the attorney informs the client that he is about to take advantage of the client or that the client could get a better deal with an other attorney, the lawyer is still proscribed from engaging in this transaction if it is not fair and reasonable (ii) Lucid Disclosure in Writingthe lawyer must fully disclose in writing the potential conflicts that exist or that might arise plus the terms of the deal in a manner reasonably understandable to the client Neville court ruled that, in addition to disclosing that the attorney would not be representing the client on the deal, the attorney must ALSO disclose that the attorney would receive benefits from transaction to the detriment of the client Hughes: attorney should also disclose that the attorney is not representing the client and that the client should find another attorney to represent him (iii) Consent in Writingthe client must consent in writing to the deal. (iv) Consultation with Other AttorneyLawyer must also give the client a reasonable opportunity to consult with another attorney before accepting the deal (prudent thing to do is to get this in writing, although this is not required). 15

16 DR 5-104 Guidelines: (Not as stringent as Rule 1.8(a)): Requires client consent to a business dealing but does not require the writings required by Rule 1.8(a). Lawyer must get consent, BUT it does not have to be in writing and the deal does not have to be fair; however, the attorney can not enter into the transaction if the client expects the attorney to exercise his professional judgment on the clients behalf in this transaction (ie. the conflict of interest is not waivable) Consent is necessary when: The client and the lawyer have divergent interests in the deal The client has the expectation, based on the lawyer-client relation that has existed, that the lawyer will protect his interest and act in a manner that will redound to the clients benefit. Rule 1.8(b) Use of Confidential Information: Even if a business transaction is otherwise valid, the attorney can NOT use confidential info he has about the client to his advantage in the deal. Matter of Neville (Ariz.): Attorney represented client in real estate dealings. Attorney and client entered into a real estate deal with each other after the attorney told the client he was not going to represent him as to this transaction. Client is sophisticated real estate broker and drafts all the terms of the transaction. Attorney accepts the deal and does not bargain over the terms. The court rules that the attorney violated DR 5-104. Standard is extremely strict. o Attorney must give full disclosure to the client (rule requires lucid disclosure in writing), describing all the benefits and costs of the deal. The lawyer must basically treat the client as if he was incompetent The lawyer must explain everything in the deal that could harm the client. o Even if full disclosure was made, the deal would still have to be objectively fair and reasonablecourt seems to be saying that it basically the client must be made no worse off in the deal than he would have been had the attorney been representing him on an equivalent deal with a third party. Fair and reasonable issue very risky because attorney never knows until after the fact in court whether a deal was fair and reasonable. Hughesthe court says that this attorney did not make appropriate disclosures o Even though the attorney disclosed that he was not representing the clients interests, the attorney did NOT disclose that the attorney would receive benefits from the transaction to the detriment of the client Even when you tell the client that you are not representing his interest, there is still a glow of an on-going lawyer-client relationship (with the client expecting the lawyer to look out for his best interests) o If the attorney fully emphasized that he was not representing the client and that the client should find another attorney to advise him, then that might be adequate Rule 1.8(d) Media Rights: This rule deals with the situation where an attorney wants to acquire the intellectual property rights to his clients story. An attorney is NEVER permitted to obtain media rights out of matters arising out of current representation Ex. if would violative of the rules if OJs lawyers acquired the movie rights, book rights that OJ had over the case A lawyer can NOT negotiate or enter into agreement to acquire literary or media rights of the client UNTIL the litigation is complete. No waiver by client is allowed. Exception: Waiver may be allowed sometimes in the criminal context based on the Sixth Amendment right to counsel. In some situations a client may be unable to afford an attorney unless they promise them media or literary rights. In this case, upon full disclosure of the potential conflict, courts might allow the client to waive the conflict. However, the lawyer who entered into such a deal might still be sanctioned by the Bar. Rule 1.8(e) Advancing Funds to Clients: When there is pending or contemplated litigation, a lawyer cannot advance funds to a client except to cover court costs and litigation expenses. A lawyer is prohibited from advancing funds for humanitarian aid to the client, such as for food or shelter. (Hughes strongly disagrees with this rule.) No waiver by client is allowed Lawyers Legal Exposure Fulton Case: co-conspirator blames attorney and says he was involved; effect: lawyer has to defend himself AND lawyer has to drop his client Some courts see it as not true allegation if it is obvious that it is not true Rule 1.8(i) Representing Client Where Opposing Side is Represented by a Close Relative: This is allowed as long as the attorneys get consent from their clients after consultation. There is no imputation in this context. 16

17 There is no rule that prohibits a lawyer in one firm to represent a client when his has a relative or spouse in the opposing sides law firm Rule 1.8(i) does state that there is a potential problem if the spouse or relative was actually working on the opposite side of the same sideso the lawyers (spouses or relatives) should consult with their respective clients about the matter, and seek the clients consent Gellman v. Hilal (NY 1994)husband is representing plaintiff in a medical malpractice suit. His wife previously represented the Ds in a prior suit. The Ds move to disqualify the husband in the current action. Ds argue that the wife will disclose (either inadvertently or on purpose) past confidential facts of the prior case that will prejudice the defense Court rules that there is no per se rule of disqualification based on marital status o Here, the husband and wife do not have their offices at home, their files are not available to each other, and they have always worked on opposite sides of the medical malpractice litigation Rule 1.7(b) Other Personal Interests of the Lawyer: Under Rule 1.7(b), a conflict of interest can arise other than in the situations listed above if the lawyers personal interest materially limits his ability to represent his client. Ex: Lawyers own moral beliefs could cause a material limitation of his ability to represent a client. (Can always withdraw if clients views are repugnant to the attorneyRule 1.16 Withdrawal) HYPO: Karen Horowitz Dilemmashe is an associate who worked on a case for many months. She was told by the head of the firms litigation department that she could not go to trial because she was Jewish woman and the trial was in a city that does not like Jewsthat a Jewish woman lawyer on the defense team will prejudice the jury against [the] client. The client concurred in that opinion. Karen recognizes that the firm has an obligation to the client, but the firm has a responsibility to her toothat if clients dont like her, then the firm should not represent them Although Karen is upset that she invested up to two years handling this case and now cant litigate, most big cases with big clients never make it to trial, so the firm reasonably did not anticipate that she would have to go in front a jury The firm and client feel that the trial team must appeal to the jury and their biases. And that with certain juries it would be better to have a woman, Jew, minority, etc o Client decides the goals of representation; however, the final decision as to how to attain those goals (such as whether or not to use Karen Horowitz) belongs to the attorney Rule 1.4 Communication: the lawyer shall keep the client reasonably informed about the status of the matter Rule 1.2 Client-Objectives; Attorney-Means: Client has the right to make decisions concerning the objectives of the representation, BUT the attorney has the right to make decisions concerning the means towards reaching those objectivesattorney has final say as to tactical decisions. Karen did not have a right to try the case; no ethical claim against the firm o The lawyer always has the right to not represent the client (Rule 1.16 Withdrawal) Rule 1.1 Competence o If the firm lets Horowitz litigate, then the issue of whether the lawyer acted competently may arise (Hughesthis is a tenuous claim) HYPO: Either She Goes or I Goclient of firm; client now represented by female; wife of client says either she goes or I go; client calls firm and says I need to have a new attorney assigned to my case -What should firm do? maybe female atty can work in back burner stuff; not with client directly; maybe she will step off once told of problem -Consider: having client invite his wife to lunch with full team to introduce wife to atty.; should these type of step be required before firm folds to clients demands

CONCURRENT CONFLICTS: THIRD PARTY INTERFERENCE o Rule 1.8(f) Payment of Lawyers Fees by Third Party: A lawyer can NOT accept payment of a clients fees by some third party UNLESS: (1) Consentthe client consents after consultation (2) Confidentiality is NOT Compromisedconfidential info under Rule 1.6 is not compromised (3) Clients Interest is NOT Compromisedthe lawyers independent judgment to the client is NOT compromised due to allegiance to the paying party o Rule 1.13 Counsel to an Entity: Under Rule 1.13, a lawyer who represents an entity must be sure to represent its interests and NOT place the personal interests of constituents above the entitys interest. Conflict arises if in consulting with constituents such as officers and directors, their personal interests come into conflict with that of the corporation and the lawyer comes to favor their interests over that of the entity. 17

18 Attorney must make it very clear to constituents that he represents the entity, not them. If attorney fails to do this and constituent has reasonable belief that attorney is also representing him personally, he could possibly sue attorney for malpractice. Ex: Lawyer represents Firm A. Director B comes to lawyer to ask him about his employment contract. Lawyer fails to warn B that he only represents A and tells B that the contract is a good one and he shouldnt worry about it. If B later discovers contract has some outrageous provision, he could sue lawyer and argue that he had reasonable expectation lawyer was his personal lawyer as well and that as such the lawyer should have represented him better as to the employment contract. Attorney can choose to represent both the entity and certain constituents as long as their interests are complimentary. However, if while representing both the entity and the constituent, their interests become adverse (not conflicting) the attorney must withdraw from representing either the entity or the constituent due to the concurrent conflict UNLESS (a) consent is given and (b) the lawyer reasonably believes that he can represent the client without a conflict of interest adversely affecting the other client (Rule 1.7(a)). o But for consent to be valid, the lawyer must make sure that he gets consent from the corporation itself: cant just informally ask a few of the directors or officers for consent, but must go through proper procedure to get corp itself to consent. It also does not necessarily mean that a conflict exists just because the lawyer advises an employee not to disclose certain information as of yet to the corporation (allowed under Rule 3.4). This does not necessarily mean the attorney is putting the interests of the employee above the entity. Lawyer may want to get everyone together in one meeting to resolve the issue instead of having a few find out about it beforehand and going ballistic by jumping to conclusions, to the detriment of the entity.

CONCURRENT CONFLICTS: CLIENT-CLIENT CONFLICTS (Rule 1.7, DR 5-105) o Rule 1.7: 1.7(a): A lawyer cannot represent a client if the representation of that client will be directly adverse to the representation of another client, UNLESS: (1) the lawyer must reasonably believe that he can represent the client without a conflict of interest adversely affecting the other client (2) each client consents after consultation Directly adverse means that the two parties, both of whom you represent, are directly involved in the same case and have conflicting interests. This prong is easy to apply because you just look to see if more than one of your clients is involved in the present case. 1.7(b): A lawyer cannot represent a client if the representation of that client may be materially limited based on the lawyers own interests or based on his responsibilities to another client or a third party, UNLESS: (1) the lawyer must reasonably believe that he can represent the client without a conflict of interest adversely affecting the other client (2) each client consents after consultation Materially limited is more broad than directly adverse. It refers to situation where lawyers interest in protecting interests of one client reduces the lawyers ability to represent another client. Potential Conflict: When an actual conflict has not arisen, if it is reasonably foreseeable that one is going to arise, the lawyer should not accept the representation to begin with or should withdraw. o Hugheswith civil matters, lawyers have to determine, independent of what the client might consent to, if the lawyer can adequately represent the client free from a taint of conflict of interests o Appearance of Impropriety: This standard influences how judges rule on whether a disqualification is in order. It is sometimes called the smell test. o Two Clients on Opposite Sides of the Same Suit: If in pending litigation the opposing sides are both clients of an attorney or his firm, he can NOT represent either party in the litigation. o Co-parties in Litigation and Issue of Confidentiality: Two criminal Ds can hire the same lawyer (frugality & unified strategy)if there is no conflict of interest or if the Ds do consent to any conflict of interest that may exist, then its permissible Two civil litigants (Ps or Ds) may seek a single lawyer Communications between one common/single lawyer and the two clients are still privileged (and follows the same rules and exceptions that relate to privileged communication between a lawyer and a single client) 18

19 Waiver of Privilege with Multiple Clients: Some courts require, where representation concerns pending or impending litigation, unanimity of all the clients for waiver of the privileged communications However, when no litigation is pending or contemplated, some courts hold that any client can waive the protection of the privilege Common Interest Ruleif two or more clients with a common interest in a litigated or a non-litigated matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that relates to the matter is privileged as against 3rd parties Because transaction matters are often less focused and more open-ended than litigations, some courts requires that parties to a non-litigation matter have identical legal interests that are not merely broad commercial interests (however, some courts are more lenient) o Ex. With transactional matters, information shared among members of a consortium of companies (e.g. to develop a corporate structure to minimize tax liability for each companyidentical legal interests) is privileged Waiver of privilege with multiple clients and multiple lawyers with common interest: o Some courts require, where representation concerns pending or impending litigation, unanimity of all the clients for waiver of the privileged communications o Restatement says that in a common interest arrangement, clients have the right to waive privilege only for his own communications to counsel If the privileged communications are in a document that contains privileged communications from other clients, then redaction must be made and, if redaction is not possible, then waiver from all pertinent clients is required Co-parties in Litigation Who have Conflict Over an Issue: A lawyer cannot represent two parties on the same side of either a criminal or civil case if their interests are or become divergent at some point. Would be ok to represent them both at first if their interests did not diverge, but then if something occurs such as a finding during discover that one party was the negligent one, then potential conflict would become actual and lawyer would have to withdraw. Class Action Suitsas a condition of class certification, the class members must fairly and adequately protect the interests of the class Potential conflicts of interest exist in the interests of class course in settlement and the attendant court-awarded fees and the interest in the class in maximum recovery on the other HypoNunez (Hispanic) and Hughes (black) are discriminated against by not getting the job. They both want you to represent them If they both seek specific performance (ie. getting the same employment position), then there is a conflict of interest because they both want the position that would exclude the otherrepresentation is not ok If they only want monetary damages, then there is no conflict of interest and representation is ok Hughesthroughout the case the lawyer must assess the claims. If, later in the case, the attorney finds that Nunez does not have a viable claim, but Hughes does, then the lawyer must inform Nunez and drop that claim Rule 3.1 Meritorious Claims and Contentionsa lawyer shall not bring or defend a proceeding unless it is not frivolous Hypoa firm is handling a case in Chicago jurisdiction on the behalf of landowners, meanwhile that firms office in California jurisdiction is arguing a similar issue but for the other side There does not seem to be any conflict of interest If the case is argued in the same circuit (where precedential value in one case could adversely affect the other case) then there could be a conflict Lawyer only need the clients consent if the lawyer thinks that you have a conflict in fact or a potential conflict and if, notwithstanding that conflict, the lawyer independently believes that his representation will not adversely affect the representation of other clients Opposing Present Client in Simultaneously Pending Cases: A lawyer can NOT represent a client in one case and oppose the same client in a simultaneously pending case, even when the subject matter of the two cases is unrelated. (Rule may not apply if in one case the firm is representing a parent and in the other a subsidiary depending on how much control over the litigation the parent has over the subsidiary.) (Compare to more lenient successive conflict situation, where substantial relationship test applies.) Representing Two Clients with Inconsistent Legal Positions: Whether the lawyer can represent both depends on the circumstances. Same JurisdictionIf the cases for both clients are in the same jurisdiction and the exact same law applies, then conflict probably exists because winning one case would create precedent for the other. But could argue conflict would not arise at the trial court level because has no precedential value, even though it would once the case was appealed. 19

20 Different JurisdictionIf two cases are in different jurisdictions and thus decision of one court not binding on the other, there would be no conflict unless one of the cases made it to Supreme Court. Also different states may have different laws involved so the statutory language at issue may be different in important ways, thus reducing the risk of conflict. Representing two clients who are competitors or who have adverse political or economic interests: This generally does not create a conflict. But it may be found to materially limit the lawyer if the competitor or adverse economic interest gives that lawyer or his firm a large percentage of their business. Client consent: A concurrent conflict can be waived by the client if the client consents after consultation and full disclosure of the risks to the client*However, even if consent granted, a conflict will still be found unless this objective standard is met: Rule 1.7: The lawyer reasonably1 believes that the interest of the client will not be adversely affected by the representation of the two clients. (Less stringent standard.) Hughes: Would an independent/disinterested lawyer recommend the lawyer for that client (despite the potential conflict) In order to waive a conflict of interest (1) the client must consent to the conflict after consultation o Disclosure must be sufficient to inform the client of possible adverse effects the conflicting interests of the lawyer or of others might have on the representation o Restatement and some courts recognize that the clients level of sophistication is a significant consideration in determining whether consent to the conflict is adequate o Clients may consent to conflicts in advance of their occurrence o California requires that clients consent to conflict must be in writing (2) the lawyer must make an independent judgment that the conflict will not adversely affect the client DR 5-105: It is obvious to the attorney that he can adequately represent the interests of the two clients How can there be a conflict that materially limits a client and the lawyer still believe the interests of the clients wont be adversely affected? Probably means that even if the scope of the representation is limited in some way, as long as the attorney can still represent the client zealously and to the best of his ability, consent is valid. NOTE: Whenever there is even an appearance of a potential conflict, the prudent thing for an attorney to do is to go to the client and explain the situation and reassure them that the attorney will not be compromised. Fiandaca v. Cunningham (11th Cir. 1987): NHLA (New Hampshire Legal Assistance) represented female prisoners in a suit against the state demanding that female prisoners obtain equal facilities to those of male prisoners. State tried to settle by offering to establish a temporary female facility at Laconia School, but NHLA refused the settlement. NHLA also represented mental patients at Laconia (Garrity class in another litigation) and did not want the settlement as to the female prisoner matter to interfere with the interests of those patients. 1.7(b): A lawyer cannot represent a client if the representation of that client may be materially limited based on the lawyers own interests or based on his responsibilities to another client or a third party The court reverses and rules that the trial judge abused his discretion when it denied the states pre-trial motion to disqualify NHLA from serving as Ps class counselNHLAs representation of the female prisoners was materially limited by its concurrent representation of the Laconia mental patients. NHLA owed Ps a duty of undivided loyaltyit was obliged to present the offer to establish the prison facility at Laconia School, to explain its costs and benefits, and to ensure that the offer received full and fair consideration by the members of the class o NHLA had an ethical duty to not allow its loyalties to other clients from coloring its representation of Psthe problem was that NHLA could not objectively represent the pros and cons of the settlement offer to the female prisoners because of its concern over NHLAs other clients (the mental patients) This court rules that the district courts remedial order (which included a specific prohibition on the uses of Laconia School) must be vacated and the case remanded for a new trial on the issue of the proper remedy (ie. where to construct the new prison for female prisoners) Hughes: both the female prisoners did not want to be on the and the Garrity class (mental patients) did not want the settlement (facility on Laconia State School) The court said that the NHLA could not describe the pros of the deal with equal vigor that the NHLA would describe the cons because they have an extra interest to deny the deal (ie. to protect interest of Garrity class)

The Code has an obvious standard, as opposed to reasonableness standard 20

21 Standing to seek disqualification: When there is a client-client conflict, one of the clients can always seek disqualification of the attorney from the present litigation; courts differ and generally one of three forms: (1) Some courts allow a nonclient to seek disqualification if as a result of the conflict, the non-client will be adversely affected in a material way. (Ex: In Fiandaca, the defendant state officials raised the conflict of interests issue. The interests of state were adversely affected by opposing sides conflict because opposing attorneys could not objectively weigh the value of a settlement offer because of the conflict. Hence settlement that might benefit the state could not be objectively considered, leading to more expensive litigations costs and trial risks for the state.) Courts will disqualify counsel even if all clients agree to allow that counsel to continue with the representation Some courts only allow nonclients to have standing to bring a motion for disqualification if the nonclient can demonstrate that the opposing counsels conflict somehow prejudiced [that nonclients] rights (2) Some courts only allow clients to bring a motion for disqualification. (3) Some courts allow any non-client to raise the disqualification issue for any reasonthis is based on the theory that conflicts jeopardize the administration of justice and judicial system integrity. Disqualification motions can be tactical in nature, designed to harass opposing counsel, or proffered for any other motive Rule 1.10(a) and DR 5-105(D)Imputation: When a lawyer has a conflict of interest, that conflict is imputed to all members of that lawyers firm. (Rationale: risk of disclosure of confidential info; loyalty issues; appearance of impropriety). firm includes lawyers in a private firm, and lawyers employed in the legal department of a corporation or other organization, or in a legal services organization Fire Walls: Fire Walls are not permissible in the concurrent conflicts situation. If law firms affiliate for a single matter, creating a joint defense or common interest arrangement for a case (such as with multiple clientswhere they want to work together)courts will not conclusively presume that confidential information that required the disqualification of one member firm was passed to other firms in the common interest arrangement} the other firms will have an opportunity to prove they received no such information Some courts have refused to impute conflicts within a public defenders office on the assumption that the relationship of public defenders to their office is not the same as the relationship between a private lawyer to his or her firm A lawyer may not act adversely to a client on an unrelated matter IBM v. Levin (3d Cir. 1978)law firm of CBM represented Levin in an antitrust action against IBM. Simultaneously, other partners at CBM were representing IBM on various unrelated matters. IBM moved to disqualify CBM from representing Levin in the antitrust matter Because CBM did not obtain any information that would aid it in the prosecution of the antitrust suit, it argued that disqualification was too harsh of a remedycourt rejected this Court rules that a court may disqualify an attorney for failing to avoid even the appearance of impropriety o An attorney who fails to observe his obligation of undivided loyalty to his client damages his profession and the publics opinion of the legal profession Some argue that a blanket prohibition against concurrent unrelated conflicts is too harsh, especially given the large, dynamic law firms of today Consent Waiverbecause many conflict rules can be avoided by consent, advance consent may be procured Firms may ask client X (before accepting the retainer on the matter) to consent to prospective adverse representation on unrelated matters Withdrawal: If a conflict arises, the lawyer must withdraw. It two clients are in direct conflict as to a matter, the attorney cannot just drop one of the clients and then represent the other one. The lawyer must withdraw from representing both clients in order not to violate the duty of loyalty. Remedies for conflict: Civil Liability: MalpracticeIf the client was damaged by the conflict, then malpractice claim for the conflict can impose civil liability on lawyer o Can also bring a negligence claim and use the conflict to further buttress its claim that the lawyers judgment was negligent. o Negligence claims requires of proving that a reasonably prudent lawyer would not have done it (which is usually, but not always, satisfied by showing a violation of rules) and that injury occurred from the behavior 21

22 Valid waiver does not immunize lawyer from negligence suit Breach of Fiduciary DutyCan claim breach of the duty of loyalty. Sanctions or Bar Reprimand: Even the lawyer obtains excellent results for the client, sanctions or reprimand can still be imposed for a conflict. Sanctions require violation of rules o Valid waiver of consent immunizes lawyer from sanctions Disqualification: A judge can disqualify the lawyer if a conflict exists. This standard to disqualify a lawyer is higher to meet than that for sanctions or a Bar reprimand because the judge must also consider: judicial economy issues in removing a lawyer once litigation is proceeding, the risk of intentional creations of conflicts as a tactical move by the opposing party, and the value of clients being respected in their choice of a lawyer. o The lawyer may not be disqualified but then get sanctioned An order granting or denying a motion to disqualify civil counsel is not subject to immediate appeal as of right in federal court Simpson v. James (5th Cir. 1990): Oliver represented both buyer and seller of a corporation. Oliver structured the deal so that seller would give buyer a loan, and then the buyers would provide stock of Tide Creek company as collateral and would give personal guarantees of the buyers. After deal completed, a fire occurred and destroyed Tide Creek. Olivers firm then represented buyer and seller when the loan was restructured. Firm tells seller they will represent her if things go sour. Buyers corporation goes bankrupt and the buyers go personally bankrupt, and then firm drops seller and tells her to get new attorney. Firm continues representing buyers. Ps aver that the attorneys were negligent (standard of reasonably prudent lawyer) in their representation with the conflict of interestattorneys did not formulate the transaction to the optimal benefit to the Ps (sellers of the corporation) The Ps would have been better off if the sale provided a lien on Tide Creek assets (rather than its stock) and if the Ps were beneficiaries of Tide Creek insurance policies When the loan was restructured, $200,000 of insurance money was not assigned to Ps benefit The attorneys first represented Ps on the sale transaction, then that representation ended; however, the lawyers continued to represent Ps on completely different matters (estate and tax matters)the attorneyclient relationship has ended D (laywers) argue that the client-attorney relationship ended Hugheshow to make certain that the relationship has ended? Put in a document and wait some reasonable period until the client is certain that the relationship is over Court rules for P because the attorneys representing a buyer and seller in a real estate deal created a conflict of interest that amounted to negligence (malpractice) because a reasonably prudent lawyer would not have acted in such a manner Hughesthere is a theoretical possibility that the conflict could have been waived by client consent Attorney was in error in not seeking consent with full disclosure of the risks involved from the clientshowever, even if consent had been obtained, it probably would not have met the other prongs under DR 5-105 or Rule 1.7 because in this type of deal the two interests were too completely divergent (ie. the lawyer would not be able to avoid adversely affecting representation of other clients) Hughesthis is a pure malpractice suit (not seeking sanctions) due to the negligence practiced by the lawyers Lawyer can be immune from sanctions if valid consent is procured; however, negligence claim can still be brought even if valid consent waiver is procured or even if none of the ethics rules are violated (negligence claims are based on standard of reasonable prudent lawyer) Rules v Code: Consent Waiver to Conflict of Interest Ruleslawyer has to reasonably believe that despite the conflict, the lawyer can believe that he can reasonably believe that he can represent without material adverse effects to other clients (reasonableness standard) Rule is easier to satisfy Codeit has to be obvious to the lawyer that he can represent each client (obvious standard) Hypothetical: Burger Queen franchisee retains lawyer X whose firm has numerous tenuous ties with the Burger Queen Corp.s retained law firm, as well as tenuous connections with Taco Rico (the Burger Queen franchisees main competitor); lawyer Xs firm does get 25% of its business from referrals from Burger Queen Corp.s retained law firm Hugheslawyer X should disclose his tenuous ties, to inform her and cover Xs bases

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23 Hughescan lawyer X adequately represent the interests of his client with all the tenuous ties and the 25% referral issue? Hughesit is often the case that small firms get business referred to them by their old big law firmsthis is not out of the ordinary, so it is not as big of an issue as it may seem Rule 1.7requires that lawyer should not represent client if it may have material adverse effects on the representation of other clients Coderequires that it be obvious There is no prohibition against representing clients with competing interests Hughes*Firms can simultaneously represent Coca-Cola and Pepsi (ie. Burger Queen and Taco Mac) because there is no inherent adverse interests Hughes*There is no rule that prohibits a lawyer in one firm to represent a client when his has a relative or spouse in the opposing sides law firm Rule 1.8There is a potential problem if the spouse or relative was actually working on the opposite side of the same side o Insurance triangle: This refers to the situation where an attorney represents the insured but is paid by the insurance company and has an ongoing relationship with that company, and the interests of the insurer and the insured diverge. Insurance company is not the lawyers client: When a lawyer represents the insured, the insurer falls under Rule 1.8(f)a third party who pays for the representation. The lawyer cannot disclose the insureds confidences to the insurer, and he must make sure that he is only concerned for the insureds interests. But he cannot lie to the insurer and thus commit fraud: should just explain to the insurance company that they need to speak to the insured themselves and that the attorney is not at liberty to discuss what they have learned from the insured. (Most insurance policies have a clause requiring the insured to cooperate and speak with the insurance company.) Requirement for insurance company to pay for outside counsel for insured: If the insurer and the insured have divergent interests over what a jury should find, then insurer must pay for independent counsel for the insured. Ex: Insurer favors jury finding that he acted unintentionally, so that insurance company will pay the claim, while as insurance company favors finding of intentional misconduct, in which case indemnity does not apply. Public Service Mutual Insurance Co. v. Goldfarb (NY 1981): Dentist was accused of sexually abusing his client. His insurance company did not want to indemnify the dentist or pay for his representation. The court rules that: the insurance company must pay for the dentists representation even though at trial it may become clear that it does not have to indemnify the dentist because his actions were intentional. o Until trial, it is unclear whether the dentist intended to inflict harm, which is must be shown before indemnity if void as to public policy. Hence, must go ahead and represent the insured since at this point the outcome is unclear o And must get dentist an independent counsel because interests of dentist and insurer conflict the dentist will want finding of unintentional behavior, so he can be indemnified; while as insurer favors finding of intentional infliction of harm. Hypo (pg. 332)Brett was hired by POM insurance company to defend a case against its insured, a law firm called RIO. RIO is being sued by X firm for negligence in Xs IPO. One of RIOs partners is Tipton, who worked on the case. Brett learned that Tipton error was not an accident, and that she intentionally sabotaged the IPO, for sake of benefiting another client. If X ascertains the willful mistake, then compensatory damages rise and punitive damages will be added. If the IPO error was done intentionally, then the insurance company will not cover the damages awarded, rather the firm will have to pay out of its own pocket. Should Brett divulge to the insurance company that the negligence was intentional Exception to Rule 1.6 is when there is Joint Defenseanything that one client tells you, you must tell the other client o However, Rule 1.4 requires the lawyer to disclose that there is no confidentiality of information as it pertains between the two defendants Insurance company is not the lawyers client: When a lawyer represents the insured, the insurer falls under Rule 1.8(f)a third party who pays for the representation. The lawyer cannot disclose the insureds confidences to the insurer, and he must make sure that he is only concerned for the insureds interests. CONCURRENT CONFLICTS: ADVOCATE WITNESS RULE (Rule 3.7, DR 5-101, 5-102) o The advocate witness rule deals with the situation where a lawyer for a party needs to be a witness at the proceedings. The rule is that an attorney cannot be both an advocate for his client and a witness. o Model Code: Creates a bifurcated test: DR 5-101: Before representation of a client has been undertaken: If a lawyer knows or it is obvious to him that he ought to be called as a witness, he cannot undertake the representation. Exception: Lawyer can still take the representation if: (1) it would otherwise create a substantial hardship for the client and; (2) 23

24 the lawyer must show that the lawyer provides some distinctive value (something unique and special about the lawyer). DR 5-102: Once litigation has commenced: Witness on behalf of his own client: If during the litigation the lawyer knows or it is obvious to him that he ought to be called as a witness on behalf of his client, he must withdraw (if it is likely the lawyer will be a necessary witness for either side) Lawyer called as witness by someone else: Lawyer can proceed until it is clear that he will have to give testimony that is prejudicial to his client. (He can testify for other side if it would benefit his client.) o Model Rule 3.7: (more lenient): Institutes one single test: Lawyer must withdraw if it is likely that it is necessary for him to testify. (Difference between obvious and likely: obvious is a much higher threshold that has to be obtained before withdrawal necessary.) Substantial Hardship Exception: If the attorney can show that it would work a substantial hardship (factual determination) were he not to represent the client even though he has to appear as a witness, then he can continue representing the client. (Being close to trial and having spent lots of money in preparation may not be enough to meet this exception.) o No imputation: When a lawyer is to be called as a witness for or against his client, another attorney at the firm can represent the client at trial. This prevents the jury from seeing the original lawyer as both an advocate and a witness, which might confuse them. Instead they believe that only the second attorney is the clients lawyer so no problem arises. SUCCESSIVE CONFLICTS OF INTEREST (Rule 1.9) o Model Rule 1.9: A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that persons interests are materially adverse to the interests of the former client unless the former client consents after consultation; Two elements must be present for a successive conflict of interest to exist: (1) Substantial relationship: The representation of the present client must be as to a matter substantially related to the representation of the former client. TEST: During the prior representation, could the attorney have acquired confidential factual information that would be relevant as part of the present clients representation? Substantially similar legal issues versus factual issues: It is perfectly acceptable to represent two clients at different times but to take a contradictory position as to the same legal issue raised in both circumstances. (This is the only way for an attorney to become an expert in a particular legal area.) The successive conflict rules are concerned about overlapping factual information between representation of the present and former client that could lead to a disclosure of the former clients confidences to the present client for strategic advantages. o Are there common facts in the previous representation and the current relationship (2) Material adversity: Acting on behalf of the present client must be materially adverse to the former clients interests. Discordant financial interest between the clients is not enough. That is, the fact that the parties are economic competitors is not enough to create material adversity. o Analytica Inc. v. NPD Research, Inc. (7th Cir. 1988): Malec worked for NPD. NPD wanted to give Malec two more stock shares in the company. S&F were hired to handle the stock deal. Malec later left NPD and formed Analytica. Analytica had some antitrust issues with NPD and wanted to hire S&F to represent it against NPD. The court held thatS&F was disqualified do to successive conflict. By providing stock and financial info to S&F, NPD had expectation that S&F was its lawyer and would not disclose the info. S&F could use this financial info in its representation of Analytica to the disadvantage of NPD. Hence there was both a substantial relationship and material adversity. Hugheseven if the issues underlying each representation were not substantially related o Duty of Loyalty: Even if the confidentiality issue does not arise in representing a client whose interests are adverse to a former client, the successive conflict concern can still arise if representing the present client would constitute a breach of loyalty to the former client. The lawyer cannot produce a product for a client and then turn around and seek to destroy its legal usefulness. A lawyer cannot turn around and benefit from his own prior malpractice. This arises when a lawyer wants to represent a client and in doing so would be forced to attack his own legal handy-work as part of the representation. Ex: Lawyer in the past created leases for landlord. Could not now represent tenant who wants to attack lease as void or argue for an interpretation of the lease directly opposed to how he counseled the landlord that it would be interpreted by the courts. Ex: Lawyer represents client A in divorce settlement against her husband B. Could not later represent a party in litigation if by winning, that party would obtain all of Bs assets, preventing B from making alimony payments to A as required by the divorce settlement. 24

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25 Model Code Canon 9: There was no direct equivalent of Rule 1.9 in the Model Code. Instead, courts fashioned the substantial relationship test out of the general language found in Canon 9. Client consent: Successive Conflicts of Interest are always waivable Unlike in concurrent conflicts, a client can always waive a successive conflict of interest after consultation. Who is a former client? Look to see whether the party disclosed confidential info to the attorney. If they did, they probably perceived the attorney as their attorney. Otherwise, it is unlikely they would have been willing to disclose the info. But note that an attorney may learn of private info about an opposing party during discovery or litigation but that does not make the opposing party his client because obviously there would be no expectation of a lawyer-client relationship. Dropping a client like a hot potato: This situation arises when an attorney, to obtain the more lenient standards for successive as opposed to concurrent conflicts, withdraws from representing one client in order to represent another client only. A lawyer cannot drop one current client like a hot potato in order to represent another current client and acquire the more lenient standard of successive conflicts. Jelco. Lawyer must withdraw from representing both clients. Under Rule 1.16 and DR 2-110, dropping a client in order to keep a client who makes more money for the firm is not a permissible reason for withdrawal. What about Rule 1.16(b): This provision states that an attorney can terminate representation if an unreasonable financial burden would be accrued by the attorney. However, this provision has not been interpreted as allowing an attorney to drop one client in order to retain the more financially robust client. Instead it applies in situations where an attorney unforeseeably will have to put tons of money into the litigation and cannot afford to do so. However, if a concurrent conflict is just unforeseeably thrown upon an attorney, then court might be more lenient in allowing the attorney to drop one client and not be disqualified from representing the other, but the attorney might still face Bar sanctions or malpractice suit. Ex: Lawyer represents Insurer A against Insurer B. Lawyer also represents Insurer C on unrelated matters. However, Insurer C then fails and by operation of law Insurer B takes over Insurer Cs interest. Court might allow lawyer to withdraw from representing either A or B in the currently litigation since B became lawyers client unforeseeably and was beyond his control. Appearance of impropriety: Sometimes it just looks bad for a lawyer to take a case against a former client. Although the appearance, or smell test is not a formal binding rule, it may influence how a court perceives the situation and affect whether it will disqualify an attorney for a successive conflict. Although you cannot be disciplined if something merely appears to improper, when in fact it is proper Class Actions If a settlement is proposed, the lawyer will be acting against the majority of his class if the majority of the class does not approve of the settlementso the rules governing successive conflicts of interest will not be stringently applied Hypo on pg. 361Clarissa represented Roth in divorce proceedings, which involved partitioning of assets such as Roths company. Roths company that is having a difficult time making payments. The bank is now asserting credit claims against Roths company. The banks lawyer is partner in the same firm as Clarissa. Clarissa probably learned some of the financial intricacies of the company when deciding how to partition that asset in the divorce proceeding 2nd Circuit requires that a substantial relationship (for purposes of disqualification of representation in the 2nd Circuit) will only be satisfied if the matters are identical (not a mere overlap of factual information, even though that would be sufficient to violate the ethical rules) Hughescan you represent a client who wants to sue a former client of yours? Yes. If the relationship with the former client is not on-going and has been terminated (ie. former) then you can sue Hughesmedical malpractice case: Striker is the patient and is represented by Remington. Cavullo is the doctor represented by Wigly. Striker losses the malpractice case and Striker believes that there is legal malpractice claim against Remington. Striker wants to hire Wigly to sue Remington. Can Wigly represent Striker without being disqualified and incurring sanctions? If have terminated the relationship with Dr. Cavullo then you do not need his consent In order win for Striker, Wigly would have to demonstrate that Striker would have won the prior case but for Remingtons negligence (ie. that Dr. Cavullo did commit malpractice)this would require Wigly to use information that he gained from representing Dr. Cavullo and so could be confidential There would be Successive Conflict of Interestthe matters are substantially related and Wigly would be taking a position that is materially adverse to his former client (even if it is a different case and Dr. Cavullo would not sustain any financial liability from representing Striker, it is still adverse to Dr. Cavullo) Dr. Cavullo can waive this successive conflict and allow Wigly to represent Striker 25

26 Model Rule 1.10 and DR 5-105(d): Imputation of Successive Conflicts: General rule is that if one lawyer in a firm is disqualified, all are disqualified (it is imputed to all the lawyers in the firmthis is irrebuttable). Migratory Lawyers: There are special imputation rules for migratory lawyers. However, the rule is not as per se when a lawyer changes jobs and decides to move to a firm retained by an adversary. The lawyer who changes firms may have a former client from his former employment whose interests are adverse to some client of the new firm. In this situation the migrating lawyer himself is disqualified from representing the former clients adversary at the new firm. But should the new firm be saddled with the migrating lawyers conflicts and hence itself be disqualified based on the migrating lawyers former clients? Presumptions in the migratory lawyer context: o If a lawyer moves from one firm, to another firm then there is a rebuttable presumption that the lawyer disclosed the information and infected the new firm o Presumption that migratory lawyer had access to confidential information at his former firm concerning the client. Courts have held that this presumption is rebuttable. o Presumption that attorneys at the migratory lawyers new firm were made privy to the confidential info known by the incoming lawyer. The Model Rules as well as a majority of courts make this presumption irrebuttable. A minority of courts like the Seventh Circuit make it rebuttable upon a showing that a fire wall has been instituted. If Hughes works at King & Spalding, then moves to Alston Bird, can the lawyers at King & Spalding represent a client adverse to Hughes client if the representation is based on a substantially related matter? If the firm does not have confidential information concerning the matter, then it can represent the new adverse client Fire Walls Screening Mechanisms: For the minority of courts that accept fire wall mechanisms to overcome the second presumption, what screening devices may be required to overcome the presumption? The screening mechanism had to be in place at the time the new attorney entered the firm. Instructions must be given to other firm members that the new attorney cannot participate in the case and that they are not to speak with him about that case. New attorney cannot share in any fees obtained from the litigation. Locking case files or using security passwords to prevent access to files about the case. General test for disqualification in the migratory lawyer context: Must first meet general substantial relationship and materially adversity test for former and current client of the migratory attorney. If successive conflict exists for the migratory attorney, then must determine whether his new firm is also disqualified: o Rebuttable presumption that migratory attorney was privity to confidential info of client at old firm. o Presumption (irrebuttable in most courts) that lawyers at new firm had access to confidential info known to the migratory attorney. Cromley v. Board of Education (7th Cir. 1994): High school teacher who is fired brings an action against the school board. Firm A represents the teacher. Weiner works at firm A. During the course of litigation, Weiner moves to Firm B, which represents the school board. At issue was whether Firm B now had to be disqualified from the case because of Weiners imputed successive conflict. Court rules that firm B can continue representing the board because proper screening devices were instituted to prevent Weiner from conveying confidential info about the teacher to other firm members**This is a minority view because it allows a firm to rebut the second presumption detailed above in the imputation section. o Court requires 3 part test: (1) Substantial exist as to the subject matterexists here because it is exactly the same case (2) Whether the presumption of shared confidences has been rebutted as it relates to Firm Aif this presumption that Weiner had access to the confidences had been rebutted, then the case is closed (because if he knew nothing about the case at Firm A, then he could not have brought any confidential information to Firm B)Weiner fails to rebut this (3) If (2) presumption is not rebutted, then there is a rebuttable presumption that Weiner disclosed information to Firm BWeiner rebuts this presumption because Firm B provided adequate screening mechanisms Screening procedures that preclude divulgence of the information to the new firm (Firm B) will be sufficient as to rebut this presumption 26

27 Film Part I: Kate has an investment idea. She recruits two others (Browamn and all three go to Kates lawyers office. He advises them and they decide to retain him for the formation of the corporation and consummation of the investment The lawyer should have disclosed to all of them that he is representing What if the Kates interest diverge from the corporation Rule 1.7: (a) lawyer cannot represent a client if the representation of that client will be directly adverse to the representation of another client, and (b) A lawyer cannot represent a client if the representation of that client may be materially limited based on the lawyers own interests or based on his responsibilities to another client or a third party o Any concurrent conflict is waivable if: (1) the client must consent (should be in writing), to the conflict after consultation (2) the lawyer must make an independent judgment that the conflict will not adversely affect the client Rule 1.13: says that a lawyer who represents an entity cannot represent a client who interest will conflict with the entity; it is permissible for lawyers to represent constituents of the entity o If you decide to represent an entity, you cannot subordinate the interests of that entity to any of the constituents of that entity Also, the lawyer should state his rate/cost of his retainer before he begins to work for them o The clients offered to pay the attorney with stockHughes said this is valid o Rule 1.5a lawyers fee must be reasonable} if the lawyer was to accept the stock, then the stock value increases 10 fold. This would still be reasonable, because the lawyer simply took the risk of stock value volatility The lawyer should disclose that if they dont have a super-majority voting provision, then Kate (who will have 51% of shares) will effectively run the company Browman will have the smallest share, but he is to be the manager and most of his income will come from the employment contract with the companyso, right off the bat, Browmans interest is to make the company run for a long time before selling it. The others, who are just financial investors, will want to turn the company around and sell it for a profit as soon as possible} divergent interests The lawyer should at least advise them to consider retaining their individual counsel The lawyer, under Rule 1.4 (requirement that the lawyer keep client reasonably informed) should have explained the difference between a corporation and a partnership, and other corporate and liability issues Rule 2.2 A lawyer may act as intermediary between clients if: o (1) A lawyer consults with each client and obtains each clients consent to the common representation o (2) the lawyer reasonably believes the matter can be resolved on terms compatible with the clients best interests, that each client will be able to make adequately informed decisions, and there is little risk of material prejudice to the interests of any of the clients if the contemplated resolution is unsuccessful o (3) the lawyer reasonably believes that the common representation can be undertaken impartially and without improper effect on other responsibilities the lawyer has to other clients Film Part II: the manager discusses with the lawyer about possible expansion of the hotel and additions to the hotel investment (including buying scuba gear and renting it out to guests). The lawyer made some recommendations that the company could work with some of his other clients (Ocean Diving Scuba Gear) The lawyer should probably write a memo to the other investors informing them of the managers proposals disclosed to him o Rule 1.13(b)requires that a lawyer must proceed as is reasonably necessary in the best interest of the organization when the lawyer knows that an officer, EE, or any person associated with the entity/organization is engaged in action violative of the law or companys charter Do you expose yourself to liability to making a bad recommendation? Hughesif you put clients together and their interests diverge, then you might have a potential conflict of interest Film Part III: A guest at the hotel drowned using the scuba gear (which the manager got without consulting the other shareholders and not mentioning it the lawyer again). The insurance wont cover it because the company did not get a rider. The lawyer says that the prior conversation was not legal advice and so he did not know that the manager would actually go through with it. 27

28 Should the lawyer recommend that the manager retain his own lawyer? Rule 1.6 Confidentiality of InformationEven though Ocean Diving is another one of the lawyers clients, the lawyer cannot disclose to them of the incident and the potential lawsuit against the hotel, and the possible lawsuit against Ocean Diving for faulty gear If you represent the entity and constituents of that entity and a conflict of interests arises between constituent clients and the entity client, then you may have to terminate your representation of both of themin terminating your representation, you cannot violate Rule 1.6 in explaining why you have to terminate Film: Part IV: They all meet to discuss the drowning incident and potential liability suits The lawyer has yet to divulge his representation of Ocean Diving to these clients. Ocean Diving could be a co-defendant, so the concurrent representation presents a conflict of interest; however, Hughes says that not enough facts have been disclosed and developed to warrant the lawyer to mention Ocean Diving and to automatically claim liability to Ocean Diving o If Ocean Diving ascertained that their lawyer was discussing the imputation of liability to them with his other Are the managers actions (setting up scuba diving facilities) ultra vires (not authorized in bylaws; not in scope of his authority), and thus create divergent interests from the two main shareholders? o HughesThe lawyer should tell the two main shareholders that the manager could be personally liable and that they could potentially go after him if a suit is filed [Rule 1.13 lawyer represents the entity (ie. corporation and its shareholders) above the constituents (such as the manager)] What about the fee arrangement (the lawyer says that if a suit is filed, then litigation would cause the fee to arise) o Rule 1.5When you set the initial scope of employment in the retainer, you must set a reasonable fee o Hughesone of the largest complaints are exorbitant fees The lady shareholder tells the lawyer to find potential co-defendants that are well insured. Hughesthe lawyer should try to find others to impute liability so long as it is not frivolous o Rule 3.1you cannot bring frivolous claims Film: Part V: A suit is filed and the lawyer defers the discovery and litigation matters to an associate in the firm. She, the associate, tells the lawyer that the Ps has served the corporation with Interrogatories, which should be given to the main shareholders; however, the lawyer tells her not to tell the main shareholders and just give it to the manager. She feels that this may be inappropriate, but she follows his orders Rule 5.1there are certain instances where the associate will be insulated from ethics claims if she follows the partners orders Hugheshowever, the associate can still be liable for sanctions if the associate knows that what she is doing is wrong Hughesif a client files a malpractice suit against individual lawyers, then the lawyer may be liable (lawyer could be immune from sanctions but liable for negligence) Film: Part VI: the associate and lawyer discuss tactics, including extricating the response to the interrogatory by the manager that Ocean Diving was recommended by the lawyer. Also, they find out that a former paralegal of theirs is now working for the firm filing the suitthey want to hold on to this until they can use it to their advantage Hughesthe lawyer can redact the interrogatories. If so, the lawyer should send it back to the client and ask the client if the altered response still accurately reflects the clients response (and the redacted material was simply superfluous). If the lawyer is taking it out to defend the lawyers own interest, then it may involve a Rule 1.7 issue o Rule 1.7: 1.7(a): A lawyer cannot represent a client if the representation of that client will be directly adverse to the representation of another client; 1.7(b): A lawyer cannot represent a client if the representation of that client may be materially limited based on the lawyers own interests or based on his responsibilities to another client or a third party Is there anything wrong in the lawyers interrogatories inquiring about the victims mistress seemingly a tactic to demonstrate to the Ps that the lawyer will expose these improprieties/affairs if the case proceeds o Rule 4.4prohibits actions by a lawyer that are engaged in for the sole purpose of harassing a third party o Rule 7.10(6) 28

29 Hughesif there is some corresponding benefit to the case, then these rules are not applicable Paralegals are not lawyers so there is nothing that the disciplinary board could do; however, the court may disqualify the firm o Rule 5.3makes lawyers responsible for others (paralegals, secretaries, other lawyers) under them. So if your paralegal discloses confidential information Film: Part VII: the other side now discusses their legal options. The lawyer is talking with the paralegal (who use to work with the other law firm). They discuss piercing the corporate veil (add all 3 shareholders personally) and they want to delay responding to the interrogatories sent to them Can they legitimately delay the response to the interrogatories (extension of time)? o Rule 3.1Meritorious Claims and Contentions lawyer cant make frivolous motion; but if the o Code 7-102Representing a Client Within the Bounds of the law o Rule 11 Lawyer cannot take measures for improper basis; however, even if you have a legitimate reason, if it is an improper reason as well, then it is prohibited (this distinguishes Rule 11 from Rule 3.1) o Rule 3.2Expediting Litigation Lawyers must expedite the case consistent with the interests of the client Hughesso if it is in the interest of my client to delay, then I can delay Film: Part VIII: Sea Side and the lawyer now discuss the personal liability claims to the individual shareholders. The lawyer informs them that there is the other side will attempt to disqualify him due to the conflict of interests in his attempt to represent all of them. The lawyer tells them that they can waive the conflict via consent, which the individuals do. And the lawyer tells them that he was going to attempt to disqualify the Ps law firm because of the former paralegal working for them The clients can give consent to representation in the face of a conflict of interest, however, it has to be informed consent and it should be in writing o The lawyer never fully informed them of the conflict o The lawyer only has gotten the consent of the shareholders in their personal capacities, but he never has talked about the entity and getting the consent of the corporation to the concurrent representation These individuals might have a conflict with the interests of the corporation, Film: Part IX: Ds lawyer and Ps lawyer meet with the judge and discuss the conflict of interests If you were in Ds lawyers position, how would you repudiate against the conflict of interest allegation o If it is jurisdiction that requires the client to raise the conflict of interest, then she would not have standing; however, it could be a jurisdiction where a client or interested nonclient can raise the conflict of interests issue o She has to have some non-frivolous basis for bringing the individual into the lawsuit If the lawyer is called as witness, then he cannot represent the client o In order to see if a witness is necessary you must satisfy the Substantial Hardship Test (Model Code looks at Substantial Hardship Test plus the Unique Value Test) Remedies for successive conflicts: Malpractice: If damages and proximate cause can be shown, client can bring a malpractice claim. Could bring a claim for breach of fiduciary duty of loyalty or could incorporate the successive conflict issue into a negligence suit to buttress the negligence claim Sanctions or Bar reprimand: Even if the lawyer reaches a favorable result, he can still be sanctioned or reprimanded for violating the successive conflict rules. Disqualification: The judge can disqualify the attorney from the present case. This standard is higher to meet than that for sanctions or a Bar reprimand because the judge must also consider judicial economy issues in removing a lawyer once litigation is proceeding and the value of clients being respected in their choice of a lawyer. Must also consider the fact that with the greater mobility of attorneys between firms, there must be some limits to when successive conflicts will be found. Hence many courts employ a very high threshold before they will find a successive conflict. The overlapping factual issues must be virtually identical before they will disqualify. Standing to assert successive conflicts: Some courts find that the adversary in litigation can raise the successive conflict issue because of the need for fair administration of justice. Other courts limit standing to the clients involved or to parties who will be adversely affected by the conflict. 29 o

30 SUCCESSIVE PRIVATE EMPLOYMENT AFTER GOVERNMENT SERVICE (1.11; 9-101(B)) o Rule 1.11(a): Private work following government work on the same matter: A lawyer who leaves government service and enters private practice must not represent a private client in a matter in which the lawyer participated personally and substantially while in government service, unless the government agency consents after consultation. (Same rules apply even if you are not a government employee but are hired by the government to be one of its agents as to some matter.) In these situations lawyer is disqualified if consent not granted. (Same standard if person is moving from private employment to government employment.) Meaning of matter: Does not mean a broad subject area of the law or a general topic. Must be more narrow and specific than this. Hence working on drafting of a statute or regulation does not count. Meaning of personal and substantial: Mere supervisory authority over an issue is not enough. Must have had a more substantial involvement and have been involved at a more personal, rather than generalized, level. Ex: DA probably oversees tons of cases in a general oversight capacity, but would not be disqualified save for in cases where DA was actively involved in that particular case. Imputation: If the lawyer cannot get government consent, he is disqualified. However, unlike under Rule 1.9, here the firm itself is not disqualified if the conflicted lawyer is properly screened from the case and notice is given to the government that the firm is taking the case and that screening has been instituted. Also, the lawyer can not be apportioned any part of the fees generated by the case. Armstrong (2d Cir), P.333: SEC prosecuted Ds for misappropriating money and property. Following default judgment against Ds, judge appointed receiver who retained a firm to assist him in his position. The firm had recently employed a former SEC lawyer who had done some investigatory work on this case and had supervised the litigation in part. Former SEC attorney was disqualified unless agency consent given. Firm could stay in the case because attorney was properly screened [under Modern Rules would have also had to give agency notice]. o Rule 1.11(b): Use of confidential government information: A former government lawyer cannot represent a private client who are adverse to parties about whom the lawyer has confidential government information gained during government practice that could be used to the material disadvantage of the adverse party on the matter at bar Meaning of confidential government info: Must be information that the government is uniquely privy to due to its investigatory and police powers and that is not otherwise available to the public. It cannot be info that could otherwise be learned of via discovery or some other means. Third party, not government, must consent: The lawyer is disqualified unless he gets the adverse partys consent. Imputation: The lawyers firm can continue to handle the matter as long as the lawyer is screened from the case and is not apportioned any part of the fees generated by the case. Must be adverse to third party: The use of confidential government info question arises when the info that is obtained will be adverse to some third party. If the info obtained was about your own client and not about some third party, this provision of the rule does not apply. But 1.11(a) would still apply and would need to get government consent. o The prior government employment does not have to be legal. So long as the lawyer previously worked with the government (polical o Lawyer attacks his own work product: Even though 1.11 does not define rule or statute drafting as a matter, a lawyer could still violate his duty of loyalty to the government if he attacks that rule or statute as invalid or unconstitutional, thus directly undermining his prior work product. o Rules 1.6, 1.7, and 1.9 still apply to government lawyers. DUTY NOT TO BRING FRIVOLOUS CLAIMS o Model Rule 3.1 and DR 7-101: A lawyer can bring a claim or raise an issue as long as it is not frivolous. Unlike Rule 11, it does not matter if part of the reason for bringing the claim is to embarrass or harass the opposing party, so long as the claim is not completely frivolous. Contravention of Model Rule could engender disciplinary action o Rule 11: The standard is higher in federal court because Rule 11 applies as well, which requires attorney to make a reasonable inquiry into the matter, which goes somewhat beyond simply having a good faith belief that a claim is not frivolous. Must have no improper purposethis means that technically none of the basis for why lawyer brought suit could be to embarrass or harass opposing party. Contravention of Rule 11 could subject violator to civil liability HARDBALL TACTICS o How far can a lawyer go in depositions to show the other side that it will be a messy case (such as asking intimate and embarrassing details even if they are irrelevant)? Rule 5.1 & Rule 5.2the lawyer performing under the director of a partner or superior will be absolved of any ethical liability when employing hardball tactics Hughesthese types of Rambo tactics probably do not violate any ethical rules 30

31 Hugheshowever, is this tasteless, couthless tactic proper for lawyers to engage in? o Hughesif you believe that these unpalatable tactics are the best option for your client, but you have a personal conflict with this behavior, then you probably have a duty to withdraw representation pursuant to Rule 1.7 Other personal interests of the lawyer: Under Rule 1.7(b), a conflict can arise other than in the situations listed above if the lawyers personally interest materially limits his ability to represent his client. Ex: Lawyers own moral beliefs could cause a material limitation of his ability to represent a client. (Can always withdraw if clients views are repugnant to the attorney.) Hughesbecause no one is going to know about your personal sentiments about the possible tactics, you will probably never be caught if you have a personal conflict TRUTH TELLING INSIDE THE COURT CONTEXT (Rule 3.3, Code 7-101, Code 7-106) o Rule 3.3 Candor Toward the TribunalPerjury by a Client: A lawyer cannot assist a client in perjuring himself. Rule 3.3 prohibits a lawyer from making any misstatements of material or relatively insignificant facts Related rules are Rule 8.4 and Rule 4.1 Rule 8.4 a lawyer is precluded from getting some third party to commit some unethical act for him. Rule 4.1: A lawyer cannot make false statement about a material fact or law to a third person o Rule 4.1 is subordinate to confidentiality requisite under Rule 1.6 Rule 3.3. overrides confidentiality requisites under Rule 1.6 Must know the client is lying: The standard is that the lawyer must know the client is lying (very high standard). This goes beyond just having a reasonable belief that the client has lied. The lawyer must be convinced that what the client is saying is not truecould be that the client had forgotten about something and now remembers it, and so must consider this before concluding the client lied. However, lawyer can not remain willfully ignorant of the truthif time permits, would need to do a reasonable investigation if lawyer was made privy to information that indicates client is lying. People often contradict themselves when they are confused, mistaken, remember more at a later date, etc. Hence, merely changing ones story is not enough for a lawyer to know that some is lying, either a client or a third party. Just because client tells attorney they did it, it does not necessarily mean the lawyer knows that they did it. Client could be mistaken about the applicable law. Further, the client could just be covering for someone else. Bronston: Bronston was asked by the prosecution if he had any Swiss bank accounts, even though he previously had Swiss bank accounts. The prosecution then asked if he ever had any, to which Bronston replied that the company did previously hold a Swiss bank account. o The SCt ruled that it was not perjury. Although Bronston evaded the question by responding that the company previously held the bank account, it is the prosecutors job to identify the non-response/stonewall and make sure the witness properly answers the question asked. The SCt ruled that Bronston did not lie by not saying some other fact (even though it might have implied that Bronston had not personally held a Swiss bank account. o It is not perjury for a client on cross examination to be evasive and to say things that are literally true but misleading, so lawyer does not have to disclose these types of answers to the court as being misleading. o It is the lawyers job to ask the right questions and seek the proper responses o Steps to take if lawyer knows the client intends to commit perjury: Attempt to dissuade: First the lawyer must counsel the client, explain the ramifications of what happens if client lies, and try to dissuade them from doing so. Attempt to withdraw: If unsuccessful, the lawyer should request from the court that he be allowed to withdraw. Reasonable remedial measures: If client does take the stand and lies, then lawyer should first attempt to persuade the client to disclose his lie to the court. If this does not work, then lawyer must disclose the perjury to the court. Lawyer only learns that clients testimony was perjurious after the client has already testified: If the lawyer later learns that the clients testimony was false, and if the proceedings have not concluded, the lawyer must first try to persuade the client to disclose his perjury, and if this does not work, lawyer must reveal the perjury to the court. If the proceedings have concluded, the lawyer has no duty to disclose the perjury. No Sixth Amendment right to get on stand and lie: In criminal context, a client does not have a Sixth Amendment right to get on the stand and lie. Hence, a defendant does not have a Sixth Amendment 31

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32 ineffective assistance claim just because a lawyer told the defendant he would withdraw or disclose the perjury if the defendant was to get on the stand and perjures himself. Nix v. Whitehead Nix v. Whitehead (SCt 1986)the D first stated that he never saw a gun before. He then tells his lawyer that, in fact, he had seen a gun before and that he intended on lying on the stand at trial (perjure himself). The attorney threatens to cease representation if he does lie on the stand, so the D tells the truth and is eventually convicted of the crime o The defendant does not have a Constitutional right to testify and lie at trial o Although the Sixth Amendment affords criminal defendants the right to the effective representation of counsel, this right is not contravened when an attorney refuses to represent the defendant in presenting perjured testimony at his trail o Hughescan the lawyer threaten the defendant that he will withdraw representation if the defendant proceeds to lie on the stand Rule 1.2 Scope of Representationlawyer cannot assist his client in breaking the law Rule 1.16 Declining or Terminating Representationa lawyer is permitted to withdraw, if the lawyer can do so without prejudice to the client o Hugheswhat can the lawyer do to rectify his clients perjury? Rule 3.3 Candor Toward the Tribunala lawyer is not permitted to disclose to the court confidences of the client; however if the client has lied to the court or if the client perjures himself before the court, the attorney is required to do whatever it takes to disabuse the court of the perjury, which includes revealing client confidences However, here, the client did not testify yet. Hughes would first tell the client that he should not perjure himself. If the client does commit perjury, then the lawyer must follow Rule 3.3 and take remedial measures, such as revealing client confidences and expunge the effects of the perjury Does the word assist mean that if client lies on cross-examination, there is no duty to reveal? No. Even if since client lied sua sponte without lawyer participating directly by asking the questions, the lawyer would still probably be considered to have assisted in the fraud by violating Rule 3.3 and not saying anything about it to the court. Rule 3.3 Candor Toward the TribunalPerjury by a third party: If the lawyer knows that a witnesss testimony is false, then he must reveal this to the court. Rule 3.3 Candor Toward the TribunalDuty not to make false statements or perpetuate a fraud on the court: Creating false inferences: A lawyer can argue based on the evidence for inferences that he knows are false. (Different rule for prosecutors.) This is different from directly making a false statement to the court, even though it is a fine line. In other words, the defense attorney cannot say, My client J did not steal the shirthe mistakenly walked right outside the door with it in his hand if J had told the lawyer that he had in fact stolen the shirt. But lawyer could say: The prosecution has tried to show that J stole the shirt. You have seen evidence that he immediately returned it when it was called to his attention, that he began crying when he realized what happened and that he never tried to hide the shirt. This evidence creates reasonable doubtmaybe he stole the shirt, maybe he didnt. But from the facts youve seen, you can infer that he never meant to take the shirt. Further, on cross examination the attorney can attack the witness by suggesting things to the jury the attorney knows is not truewhat you say on cross-examination is not itself testimony or evidence in the case. Hence, even if you know that witness X is telling the truth, you could ask: Isnt it true that you are lying to the jury b/c of the plea bargain you stand to receive as a result of cooperating with the government? You can present facts and alternative presentation to those facts. The lawyer can say that there is more than one way of looking at those factswhich is usually enough to prevent the prosecution from satisfying the onerous burden of Beyond a Reasonable Doubt. Capitalizing on mistakes of adversary: If the other side is basing its case on some wrong fact, opposing lawyer does not have to disclose the mistake to the other side. Further, attorney can capitalize on the mistake by putting on evidence that is literally true but that, because of other sides mistake, will create misleading inference in jurys mind. Ex: Client tells lawyer that victims was unconscious and confused about time he robbed him and said it was 8:30 even though the robbery really occurred at 8. But at 8:30 client was at friends house at that time. You could put friends on stand to say this because literally true even though jury will think this gives the client an alibi because victim mixed up about the time. 32

33 But if mistake was caused because the client tampered with evidence in some way, here the lawyer must disclose the mistake to avoid perpetrating a fraud on the court. o Ex: Client tampers with car and removes evidence. Prosecution expert does tests on car and comes up with nothing. Counsel here would have a duty to tell the court of the tampering. Impeaching and Discredit a Witness: You can always proffer evidence of prior convictions relating to mendacity/veracity in order to impeach a witness Hughesfeels that prosecutors should be held to a different standard because of their societal role No duty to volunteer harmful facts: A lawyer does not have to volunteer a fact that is harmful to his clients case. If other side during discovery and their own investigation fail to uncover something that would be damaging to the client, the lawyer does not have to reveal this to the opposing side. Mere silence when another party fails to uncover something that would be harmful to your client is different from affirmatively misrepresenting the facts. The lawyer himself cannot create the misimpression. o Ex: Lawyer presents damage phase of tort litigation without disclosing that client was injured again three weeks prior to trial, which would have affected what injuries were caused by what. He hid this information from his experts and they testified that the accident involved in the case was the cause of Ps injuries. The crt found that this was affirmative misrepresentation. Southern Trenching (D Fl.), P432. o Ex: Lawyer tells judge X. Lawyer later learns that X is incorrect or things change such that X is no longer correct. Judge bases decision on X. Here the lawyer, since he affirmatively said something to the crt, must correct the mistake. But if judge just makes a mistake, and lawyer said nothing to create the mistake, here there would be no duty to correct the mistake. Cannot misstate material facts to the court: In stating facts during a hearing, pleadings, briefs, etc., a lawyer cannot misstate material facts under 3.3. The word material seems to indicate that falsehoods about trivial facts dont count. But Rule 8.4 is a catchall provision that states that a lawyer cannot be involved in behavior that constitutes deceit or fraud, and this rule contains no materiality requirement, so still could be sanctioned under this rule. o Candor about applicable law (3.3): False statements of law: A lawyer cannot knowingly misstate the law to a court. Failing to disclose controlling authority: If there is controlling, directly adverse authority as to an issue in a lawyers case, the lawyer must disclose the adverse law to the court if the lawyer is aware of it. Hence, if the law is not adverse, is not controlling in your jurisdiction, or if you dont know about the law, there are no sanctions for not disclosing. But cant just creatively distinguish a case in your mind and not present it to the court. Instead must disclose the case to the court and then in your argument present the creative distinction o Coaching Witness: Lawyers can coach witnesses You cannot pay somebody not to answer, nor tell them to lie, nor take them out of It does not matter if the witness is your client or not, you can still coach them (does not violate Rule 3.4 Fairness to Opposing Party and Counsel) DILATORY TACTICS o Model Rule 3.2: A lawyer must make reasonable efforts to expedite litigation consistent with the interests of his client. Delay tactics cannot be used simply to frustrate an opposing partys attempt to gain redress. However, it can be extremely difficult to find a violation under this rule due to the consistent with the interests of the client language, which allows a lawyer to argue that delay tactics were warranted because they advanced the interests of the client. The lawyer just has to come up with any basis for how the delay aids the client in some way. o Rule 11: Under Rule 11 your purpose for doing something cannot be just to delay things. LAWYER LIABILITY o Model Rule 5.1: All partners in a firm are jointly and severally liable for the legal negligence of other partners. (a) a partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the rules of professional conduct (b) a lawyer having direct supervisory authority over another lawyer should make reasonable efforts that the lawyer conforms to the rules of professional conduct (c) a lawyer shall be responsible for another lawyers violation of the rules of professional conduct if: (1) the lawyer orders or, with knowledge of the specific conduct ratifies the conduct involved, or

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34 (2) the lawyer is a partner in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated buy fails to take reasonable remedial action o Model Rule 5.2: An associate will not be liable or sanctioned if he acts in accordance with a partners reasonable resolution of an arguable question of professional duty. Hence if the rules are not completely clear and the partner acts reasonably, the associate has a safe harbor does not have to worry about being sanctioned. But if it is absolutely clear to the associate that what the partner has decided should be the course of action constitutes misconduct, and the rules are clear on the issue, the associate can be sanctioned. o Model Rule 5.3: A lawyer can be found liable for misconduct by a nonlawyer at his firm because they are responsible for ensuring that nonlawyers act in accord with the rules of professional conduct. Ex: Lawyer can be sanctioned if paralegal misappropriates confidential info from an opponent. Ex: Paralegal who moves to a firm representing his former firms adversary in a proceeding can create a successive conflict for his new firm. REMEDIES FOR PROFESSIONAL FAILURE o Malpractice Liability Togstad v. Vesely, Otto, Milller & Keefe (Minn. 1980)Togstad was admitted to a hospital for treatment of an aneurysm on the left internal carotid artery, so the hospital decided to implant a clamp on the left carotid artery. This clamp was left on for too long and Togstad suffered brain damage due to the lack of adequate blood flow. Togstad visited attorney Miller for legal advice. Miller was dubious as to the viability of Togstad claims; nonetheless, Miller told them he would look into it and get back to them. Togstad did not hear back from Miller, so Togstad assumed that Miller determined that he did not have a claim. A year later, Togstad seeks legal advice from another attorney, who tells Togstad that he does have a viable claim, but that the Statute of Limitations has expired. Togstad files a legal malpractice claim against Miller Miller alleges that he and his firm do not perform medical malpractice claims Legal Malpractice Action Requires 4 Elements: o (1) An attorney-client relationship existed Was there a attorney-client relationship formed between Miller and Togstad? YESeven though Miller never billed Togstad, nor called Togstad back Hughesthe attorney should have said that he was not an expert and that he did not want to take up the case or that he did not think the claim was viable and that Togstad should seek another attorneys The attorney is liable because he gave Togstad legal advice, so if the attorney never gave advice, then no attorney-client relationship was created and no liability could be incurred o (2) The attorney acted negligently or in breach of a contract The attorney must act as an ordinary prudent attorney The minimum an attorney should do is to request medical authorizations from the client, review the hospital records, and consult an expert in the field Although this standard is not flexible, it is a varying standard ordinary is relative to the normal practice of lawyers in the jurisdiction This parameters of this standard is further refined if the attorney is an expertex. securities lawyers may have different ordinary o (3) Such acts were the proximate cause of the Ps/clients damages, and In order to establish liability for a malpractice claim, the client ahs to establish that the client would have prevailed in the underlying claim, but for the attorneys negligent acts or breach of contract} that it is only o (4) That but for the attorneys conduct the Ps would have bee successful in the prosecution of their medical malpractice claim o This court does not determine whether that jurisdiction will adopt the Tort Theory or Contract Theory of Malpractice, because the attorneys negligence is so egregious and patent Tort Theory of Malpractice v. Contract Theory of Malpractice Tort Theory of Malpractice Liabilityif the lawyer gives someone advice (irrespective if the advice is solicited by the client/recipient) and it is reasonably foreseeable by the ordinary prudent lawyer (objective) that if the advice is given negligence, then the person receiving might be injured, then the basis of malpractice liability is satisfied 34

35 Contract Theory of Malpractice Liabilitythe lawyer has to give advice pursuant to the clients request, and the client has to rely on the advice to the clients detriment and the advice has to be deficient (defined by the advice that an ordinary prudent attorney would give) o Liability for Breach of Fiduciary Duty Tante v. Herring (GA 1994)The attorney is privy to medical information of his client that delineates the clients psychological profile. The attorney uses this information to cajole the client to sleeping with him As a fiduciary with regard to information shared with the attorney by his client, the attorney owed his client the utmost good faith and loyalty o The attorney used client confidences to the clients detriment and to the attorneys benefit, thus the attorney breached his fiduciary dutyaccordingly the court rules that the clients may pursue their claim for damages resulting from that breach Hughessome jurisdictions proscribe attorneys from engaging in sexual relations with their clients while representation is ongoing o Liability to Non-Clients/Third Parties Some cases have upheld professional liability to third-partieseven when that third party never actually retained or sought toreain the lawyer The court rules that nevertheless, the P was entitled to the benefit of the service and same duty of care that the lawyer had agreed to provide to the actual client This parallels Third Party Beneficiary of Contract Law o Vicarious Liability Law partners, like other partners, are responsible for each others professional failures within the scope of the legal partnership LAWYERS DUTIES TO PERSONS OTHER THAN CLIENTS o Model Rule 4.1: A lawyer cannot make false statement about a material fact or law to a third person o Model Rule 4.2: See no contact rule delineated above. o Model Rule 4.3: When speaking on behalf of a client with a non-client not represented by counsel, a lawyer cannot state or imply that he is disinterested. The lawyer must correct such a misunderstanding if he knows or should know that the non-client misunderstands that the lawyer is an interested person. o Model Rule 4.4: A lawyer cannot use means that have no substantial purpose other than to embarrass, delay or burden a third person. ETHICS IN THE CRIMINAL SETTING o Sixth Amendment right to effective assistance of counsel in general: A successful showing of a Sixth Amendment ineffective assistance of counsel claim, outside conflicts setting, requires a showing of two things: Violation of ethical rule. Absent the violation, the outcome of the litigation would have been different. (Very high causation standard) Strickland v. Washington o Sixth Amendment (Right to Effective Counsel) challenge in conflicts setting: Cuyler v. Sullivan (SCt 1980)defense attorneys (Sullivan and Carchidi), who represented 3 Ds, decided not to proffer a defense for the Ds, which would have put the Ds on the stand. Sullivan, one of the Ds, argued that he was deprived of effective counsel (6th Amendment) because the attorneys did not proffer a defense for Sullivan, because if Sullivan would have taken the stand, it would have detrimental to the other Ds. Thus, Sullivan is arguing that the attorneys had a conflict of interest in their representation of the Ds. The lawyers argue that Sullivan The court said that the Ds need to be informed of any potential or real conflicts, and then be allowed to decide whether or not to waive the conflict When no objection made at trial concerning the conflict: On appeal, D must show: o (1) That an actual, as opposed to merely a potential, conflict existed (very high standard) o (2) Once D shows an actual conflict, prejudice is presumed (different from the normal Strickland requirement, which) Once you find that there is a conflict of interest, then you must determine whether or not there was ineffective counsel (that the conflict adversely the counsels performance or that the reliability of the ruling is dubious) Dissent argues (and Hughes agrees) that Ds are not going to be aware of their rights, thus theyll never raise an issue during trial HughesRule 1.7 provides that it is the lawyers job is to determine whether or not to determine if there is a conflict and inform the client of this conflict. Thus, the lawyers could still be disciplined (although the clients cant sue on constitutional grounds) 35

36 When objection made by D but judge refuses to address the issue or to grant hearing: The court will presume that a conflict has arisen and automatically D is entitled to a new trial. If the client can demonstrate there was an actual conflict and that the client objected during trial, then the court will automatically determine that the actual conflict did adversely affect counsel and preclude a reliable outcome Wheat v. US (SCt 1988)there was a drug ring. Two of the Ds were represented by one attorney. A day before the trial, Wheat decided that he wanted to be represented by the same attorney that would be representing another D that could testify adversely to Wheat. Although Bravo had already been convicted, he had yet to be sentenced. The Government sees this conflict and wants to disqualify the attorney, which the judge does. Wheat and the other Ds that are to be represented by the same attorney do not care about the conflict and they all agree to waive the conflict. However, the court does not care and they disqualify the attorney If issue is raised at trial, hearing held, and judge finds conflict: Reviewing court will substantially defer to the judges assessment of whether there was a conflict. No constitutional right to waive conflict: In criminal setting, there is no Sixth Amendment right by the D to waive a conflict and allow his attorney to proceed. The court can disqualify the attorney even against the clients wishes. The rationale behind this is that otherwise, Ds could whipsaw the court by waiving conflict during trial, and then raising ineffective assistance claim on appeal. Hughesthe SCt is giving way to judicial economy in that they dont want to allow these attorneys to represent Ds while having substantial conflict of interests, then having the clients question the ruling based on ineffective counsel (6th Amendment). So the SCt adopts this standard of deference to the lower courts (which the SCt will not second guess) to decide whether the Ds can waive their counsels conflict of interest. So even if the Ds waive the conflict of interest, the waiver must be given on complete disclosure of information. o The lawyer does not have an unfettered right to represent clients in the midst of a conflict of interesteven if the clients waive, counsel must remove himself if that conflict will preclude him from providing effective counsel Hypothetical: X is criminal defense lawyer and X is hired to represent 3 Ds stemming from the same incident. The Government seeks plea bargains from all three; however, only 2 of the Ds will accept the deal (the other D did not pull the trigger, so he wants to try to get out of the indictment) The prosecutor does not care if you represent all three Ds or just onethe prosecutor will only allow plea bargains if all 3 Ds agree Rule 1.7 Concurrent Conflicts: (a) A lawyer cannot represent a client if the representation of that client will be directly adverse to the representation of another client. (Directly adverse means that the two parties, both of whom you represent, are directly involved in the same case and have conflicting interests); (b) A lawyer cannot represent a client if the representation of that client may be materially limited based on the lawyers own interests or based on his responsibilities to another client or a third party. o HughesX should never have taken representation of more than one of the Ds (as provided by Rule 1.7 Concurrent Conflicts of Interest) Rule 1.6 Successive Conflictsif X removes himself from representing the D, then X cant cross examine D o Hugheseven if X decides to release one of the clients, X cant get out of this situation because of the Successive Conflict of Interests Judicial address of conflict issue sua sponte: State cases: There is no constitutional requirement that state crt judges sua sponte address conflict issuesit is up to the D or the prosecutor to raise the issue, even though the judge, at his discretion, can raise the conflict issue. Federal cases: Federal Rule of Criminal Procedure 44 requires the judge to raise conflict issue sua sponte whenever there is joint representation Even if Constitution not violated, attorney may be subject to sanction: The Sixth Amendment standard is a very high bar to show ineffective asssistance b/c no objection made, must show actual conflict. In contrast, under the Model Rules whenever there is a risk of potential conflict, the lawyer has a duty to disclose this to the client and to consult with him concerning this. If lawyer doesnt do this, can be subject to sanction. Rule 3.8Duty of Prosecutors: Duty to disclose exculpatory evidence: Prosecutors have a duty to timely turn over exculpatory evidence to the defense in a timely manner under 3.8. The ethical rule is coterminous with the due process requirement that exculpatory evidence be handed over, enunciated in Brady. 36

37 Cannot argue false inferences: Unlike the D, the prosecutor cannot argue inferences to the jury that they know are false. This is because the prosecutors duty is not to win, but to seek out justice and the truth. Kojayan (9th Cir) Can pursue claims only if supported by probable cause: A prosecutor can pursue a claim as long as it is supported by probable cause. Ex: Could pursue death penalty against two suspects for the same crime if there is probable cause for each suspect that the suspect committed the crime. Cannot do things to heighten public prejudice against the accused: Prosecutor prohibited from doing things or saying things that highten the publics bias towards the accused; cant do anything with substantial likelihood to prejudice a proceeding. Cannot get around rules by having third parties do bidding: When it comes to police officers, the prosecutor cannot get someone else to do their bidding to avoid ethical rules. Prosecutor cannot encourage the third party to do such things or tell them to do it in advance. But prosecutor doesnt have affirmative duty to go out and monitor police officers and make sure that they stay within the rules. But if prosecutor pretty much knows officer plans to do something that would violate rules, probably would need to explain to officer that they cannot to this. Hypothetical: If you are prosecuting a case. The victim only has one bullet, but you have 2 possible defendants, both of whom shot at the victim simultaneously, but only 1 shot connected. The defendants were not acting in concert. If there is no Felony Murder in the jurisdiction, can you as prosecutor charge them both with murder, even though you know that one of them could have committed the murder DESTRUCTION OR CONCEALMENT OF PHYSICAL EVIDENCE (Rule 3.4; 7-102, 7-109) o Rule 3.4: A lawyer cannot unlawfully alter, destroy, or conceal a document or physical evidence (ie. no obstruction of evidence). The use of the word unlawfully limits when the provision appliesthere must be some other collateral state or federal law that forbids the conduct at the time at issue. o Federal Standard: Under federal rules, if a lawyer obtains something that could be evidence, the lawyer can advise the client to destroy the evidence unless there is a pending investigation, an active grand jury or a subpoeana for the materials. o State Standards: Many states have a more broad standard that prevents the lawyer from advising the client to destroy evidence if the lawyer knows or reasonably should know that the item will be subject to discovery in some future litigation. o Fruits or instrumentalities of crime: If the object is a fruit or instrumentality of a crime, then lawyer can never advise having it destroyed. If in lawyers possession, lawyer must turn it over to the police. o Lawyer observations: When a client tells a lawyer where some item is located, if the lawyer or his agent goes and acquires the item, then attorney client privilege will not protect the lawyer or agents observations concerning where the item was found. Idea is that by removing the item, in a sense the attorney or his agent has altered the evidence by altering its location, and if observations could not be reached, other side could not know where the item came from. (see Meredith) People v. Meredith (Cal 1981)Defendants appeal from a conviction of a murder. One of the defendants tells his attorney that there is evidence behind his house inculpating him in the crime. The defendant tells the lawyer that the evidence (wallet) is behind his house. The lawyer sends an investigator to find the wallet, which he does and he gives it to the attorney. The attorney examines it, does not physically alter, rather he simply turns it over to police, but he refrains from revealing the location of where the wallet was found Hughesthere is an attorney-client privilege which prohibits disclosure of attorney-client communications o The lawyer is not entitled to reveal any observations made out of privileged communications When the attorney removes evidence, he deprives the prosecution of an opportunity to discover the evidence There is a rule proscribing the destruction of evidence o Evidence has two probative components: (1) material in the evidence; and (2) the location of the evidence o When you take wallet (evidence) and turn it to the police, you are still depriving the police of valuable evidentiary information concerning the location of the wallet Hughesthis ruling essentially stands for the proposition that lawyers are not permitted to alter evidence or prevent prosecution from discovering evidence. And sometimes the mere removal of evidence is tantamount to the alteration of evidence Avoidance of this problem: To get around this problem, attorney can go get the item, examine it, and return it to where it was found.

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38 However, if during the interim the police have already investigated the area where it was located, here you cant just return it because there is no chance that police will find it. Here you would have to turn it over to the police or otherwise would be seen as concealment. Location of item important: Note that in Meredith, the location of where the item was found was of extreme import. The item itself was not incriminatorythe inculpatory element was that it was found behind Ds house. Hence, if situation is one where the location where item was found does not matter, you could argue the observation rule should not apply. Situation where client brings something to lawyers office that would be incriminating: First issue: If in federal jurisdiction, must determine if there is pending investigation, grand jury or subpoena. If not, advise client to destroy. Second issue: Is the item a fruit or instrumentality of a crime? If Yes, then cannot advise to destroy no matter what, and advise the client that if you keep the item, you will have to turn it in to cops. Third issue: If there is a pending investigation or grand jury, then if you keep the item, even if it is not fruit or instrumentality, the crt might consider this concealment, so might still have to hand the item over if you keep it in your possession. Handing over documents to the other side: If other side subpoenas documents, you do not have to sort through the documents and organize them in any way. It might be violation of 3.4 if lawyer knew that other side was looking for one particular document, so lawyer got a bunch of papers together, buried the document, and then handed the huge disordered stack over to the other side. Lawyer in possession of item and client wants it back: If lawyer has possession of some item that belongs to the client, he must return the item to the client upon request even if he thinks the client is going to destroy it. But should counsel client not to destroy it and the risk of criminal obstruction if client does this. In Re Ryder (Virginia 1967)Cook had a safe deposit box at a bank. Cook allegedly robbed a different bank. Ryder is Cooks lawyer. Ryder fears that the deposit box might actually contain money from the robbery. Ryder gets Cooks permission to move the box, and, unbeknownst to Cook, Ryder looks in the box and finds inculpating items in the box (shotgun and stolen cash). Ryder transfers the items into his own safe deposit box, thus leaving Cooks deposit box empty. Ryder asserts that the items he found were covered by Rule 1.6 in that they are protected under attorneyclient privilege Hughesthere is no right to avoid submitting to a subpoena an item, unless the item is privileged Hughesthe attorney-client privilege is only germane to oral/written communications and not to objects (communications include tapes and transcripts of the communications) Hughesa lawyer is never permitted to take possession of contraband (as was here with the shotgun and money obtained from the robbery), nor obstruct justice Hugheswhen Ryder inspected the box, he should have either turned it over to the police or to the bank Ryder argued that he never intended to keep the items, but that he would turn it in} the court still sanctions him, but finds this as mitigating circumstances thus reducing the disciplinary action Hypo: Enron lawyers destroy inculpatory documents before any indictments or subpoenas are issued Rule 3.4a lawyer is not permitted, unlawfully, to deny access to another party or to obstruct the polices acquisition of that item unlawfullyIt is only when there is some other body of law that would make the destruction of documents illegalie. there must be some law that would be violated by the destruction of documents in order for the lawyer be in contravention of Rule 3.4 Jurisdictional Disparity of Destruction of Evidence Rules *Under Model Rules, a lawyer could advise his client to destroy possible evidence, so long as no indictment or subpoena has been made Hughesother jurisdictions modify their adoption of the Model Rule 3.4 and make it tighter on lawyers o Ex. D.C. circuit makes it illegal to destroy documents if the lawyer knows a case is imminent Terrell Video I: Harvey and Wanda are involved in criminal activities. Harvey had previously retained the attorney Jane in a prior criminal case. Wanda visits the attorney and reveals new criminal improprieties that both her and Harvey are involved in. The first issue is who is the attorney Janes clientshe represented Harvey and the attorneys firm has continuously represented the Blue Lagoon. So, the Blue Lagoon is a client of the attorney Jane Here, Wanda comes to the attorney purportedly on the behalf of Harvey Can Jane represent all three of the clients (Harvey, Wanda and the Blue Lagoon)? Jane must first represent the entity (Blue Lagoon), then (if there are not significant conflicts) Jane could represent the constituents 38

39 There is also another employee of the Blue Lagoon, Tommy, who the firm also represented in the pastso, although Tommy this could provide a successive conflict of interest (Rule 1.9Jane and her firm cannot reveal anything learned in their past representation of Tommy; also, Rule 1.10 provides that if anyone in the firm represented a client, then all the attorneys in the firm officially represented that client and must comply with confidentiality and conflict rules) There is also the issue that Wanda threw down a load of cash to Jane as a retainer Rule 1.2what exactly is the attorney being retained for The money could be evidencein that the money could have come from illegal drug sales, so if the attorney knows that the money is contraband, then she cannot accept it Even Another issue lies in Rule 1.5 provides that attorneys fees may not be excessive Wanda through down an amount of cash that would exceed normal retainer feesJane could take the money, take out an amount commensurate with appropriate charges, then return the residual amount to the client When you receive cash in excess of $10,000 you must report it to the IRS Another issue is the Wanda asked Jane to keep everything off the books Keeping it off the books is illegal so Jane cannot do this Additional issue is that Wanda gave Jane a packet of documents that could be incriminatingwhat should Jane do with these documents? Because there is no subpoena or any indictment, then these documents (if Wanda wants to) could be destroyed without committing obstruction of justice; however, in certain jurisdictions, such as D.C., if pending legal action is imminent, then the documents must be preservedbut here there does not seem to be an imminent case, so even in D.C. Jane could advise the destruction of the packet of documents Obstruction of justice statutes require mens rea intent of interfering with the administration of justice Terrell Video II: the prosecutor (Sturges) and the police detective (Blenk) are talking about how to get Harvey and Wanda and others at Blue Lagoon The police detective intends on catching Wanda by surprise and question her without her lawyer Lawyers cannot have others do things for them that they could not do themselves Rule 4.2 (7.104) Communication with Person Represented by Counselin representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter o The prosecutor and police detective are not aware that Wanda has counsel, so speaking with her directly is permissible A lawyer is not precluded from talking with any Rule 3.6 Trial Publicityprohibits lawyers from making certain extrajudicial statements Rule 3.8 Special Responsibilities of a Prosecutorprohibits prosecutors from having someone else on their team make statements that the lawyer would not be able to do himself Grand jury proceedings may not be leaked to the public Terrell Video III: Jane talks on the phone with the prosecutor Sturges. Then Jane meets with the prosecutor and his boss, the district attorney The prosecutor claims that the defense is hiding files from themdoes the defense have an obligation to make files available to the prosecution? Jane told the firms senior partner about the potential conflicts of interest in representing Wanda, Harvey, and the Blue Lagoon. The partner tells Jane to get a written, signed waiver of any conflicts of interest of the concurrent representation The D.A. finds out that a new lawyer (Jim Geller) works in the D.A.s office, who had previously worked in Janes firm Rule 1.11 Successive Government and Private Employment o (c) Except as law may otherwise expressly permit, a lawyer serving as a public offers or EE shall not: (1) participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment Jim Geller did represent Tommy Martin, but we need to determine if this representation is substantially related to the current issue relating Wanda, Harvey, and the Blue Lagoon (ie. did Jim participate personally and substantially in the current matter?) Sturges has material that could assist the defense and he is reluctant to offer it 39

40 Duty to disclose exculpatory evidence: Prosecutors have a duty to timely turn over exculpatory evidence to the defense in a timely manner under Rule 3.8. The ethical rule is coterminous with the due process requirement that exculpatory evidence be handed over, enunciated in the Supreme Court ruling in Brady. o Rule 3.8 does not require the defense to request for the exculpatory material, rather the prosecutor has a duty to disclose the Brady material in a timely fashion o Terrell Video IV: Harvey and Wanda visit the lawyer Jane. Harvey demands that the lawyer Jane return the package that Wanda gave to the lawyer months ago. The lawyer informs Harvey that the package is Harveys companys material and that Harvey is only allowed to return the package to the company office. Harvey screams and surreptitiously lies to the lawyer that he would bring them to the office. The lawyer Jane is dubious and reluctant to return the package so Harvey is enraged and demands that he speaks to Chen, the titular head of the firm Rule 1.15the lawyer must return the package because it is the clients property The lawyer Jane cannot destroy the material if an action is pending and probably cannot destroy the material if an action is imminentso the lawyer should simply return the package with an exhortation to not destroy the material in order to elude obstruction of justice charges Hugheswould recommend that the lawyer Jane draft a lawyer that the client not destroy the package material; therefore, under Rule 1.6, the attorney could use a facsimile of the letter in order to subsequently defend herself if an action arose (although the lawyer would not be able to use the letter in a criminal action against Harvey because it is protected under attorney-client privilege) Rule 1.13the attorney must act in the best interests of the corporation. If one of the corporations constituents imperils the interests of the company, then the lawyer must place the corporations interests first The books that reside in the offices are probably not accuratethe real and accurate books are in the package that Wanda gave to the lawyer So if the prosecutor subpoenas the companys books and records, and the client plans to give the erroneous books and records held at the officesthe lawyer Jane must offer the materials in her possession Rule 1.2(d)the attorney may not assist the client in perpetrating a fraud Chen can only represent Harvey, while Jane represents Wanda, if Jane could concurrently represent both Harvey and Wanda Rule 1.16if the client terminates a lawyers representation, then the attorney cannot insist that she continue to represent that client o Terrell Video V: Jane and Sturges meet prior to the court hearing. Sturges offers that Jane agree to stipulations to facts, as a gesture of amity that might provide flexibility by the prosecutor in the future Rule 1.2(a)(c)Scope of Representation: means & objectives Jane is not entering into a settlement for Wanda. The facts subject to the stipulation are not really in dispute, so Jane does not have to consult with Wanda Sturges proposes a plea bargain with Wanda if she testifies against the other Ds, who are also represented by lawyer Jane Rule 1.7 Conflict of Interest The lawyer Jane must withdraw representation to elude further conflict of interest. She has already incurred some past conflicts, but now it has come to a head. So the lawyer Jane must mitigate her liability for conflicts by terminating representation The judge asks if both parties have revealed any information or documents that they are obliged to reveal to which both Sturges and Jane reply no Sturges replies that he has no Brady material; even though Sturges has statements by others exculpating Wanda o Rule 3.8 and Brady require disclosure of exculpatory material by the prosecutor in a timely manner. Sturges is now proposing plea bargains with Wanda, so this information is important and exculpatory, so now is the time (ie. timely) to reveal it to the lawyer Jane ETHICS DURING NEGOTIATION (Rule 4.1, 7-102) o Rule 4.1 Truthfulness in Statements to OthersIn the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6 o Rule 4.1: A lawyer cannot make a false statement to a third party or assist in a fraud or criminal act perpetuated by the client upon that third party by failing to disclose a material fact. 40

41 Rule 4.1 is subordinate to confidentiality requisite in Rule 1.6 Rule 4.1 parallels the duty under Rule 3.3; however, Rule 3.3 supercedes Rule 1.6, while Rule 4.1 is subordinated to Rule 1.6 Noisy withdrawal: However, if lawyer realizes that client is perpetuating a fraud on a third party and his continued representation of that client would lead to him assisting the client in perpetuating that fraud, the lawyer must withdraw under 1.16 and he can also disavow any legal opinions or documents that he prepared that third party may be relying on. Meaning of assist: ABA has taken a rather broad interpretation of assist. In Opinion 92-366, ABA found that if lawyer has written opinion letter given to third party, and then later learns that some of the info contained therein was false due to fraud committed by client, he is assisting the fraud if he does not disavow the letter when the third party continues to rely on it. Hughes says read this narrowly: Ex: If lawyer writes opinion letter received by third party and the opinion is written in a very conditional way (This letter is based on the following documents given to the attorney.), then could argue that the letter itself would not be assisting a clients fraud if third party continued to rely on it because it never asserted X and Y were true, only that X was true if Y was true. However, may want to still withdraw because will probably get sued yourself when third party finds out about any misconduct by your client, so better to disassociate yourself from that client. ABA says that the lawyer must make a Noisy Withdrawal by stating that the recipient of the opinion letter should not rely on information and assertions contained within that opinion letter Hughes says the lawyer is effectively violating Rule 1.6 by making a noisy withdrawal In one case you have an attorney that writes an opinion letter based on facts that were never true, but that lawyer has been deluded by his client. In another case, you have an attorney write an opinion letter based on facts that are true at the time the letter is written, but subsequently the facts change which would make the letter false Failure to disclose a basic, underlying fact to a third party: If some fact is not protected by Rule 1.6 and its an essential, baseline fact that the other party is relying on during negotiations, if some circumstance changes that fact, the attorney may want to disclose it to the party. Virzi v. Grand Trunk Warehouse (Mich. 1983)there is a civil suit. The parties agree to settle, but prior to the date for settlement negotiations the plaintiff dies. The attorney still enters the negotiations with a mediator and fails to disclose that the client has died The lawyer failed to disclose to opponent in reaching settlement agreement that his client had died The estate has succeeded the rights of the decedent plaintiff, so the attorney would still have to negotiate the settlement. No criminal activity or fraudulent act is being perpetrated Hugheshere, we are not just dealing with the rules. We are additionally dealing with the courtthe judge has discretion to sanction a party irrespective of Model Rules. The judge could hold the lawyer in contempt of court if the judge thinks that the lawyer is being surreptitious and evasive The court said that the lawyer should have told the court and he should have told the opposing counsel Hughesdoes not think that Rule 4.1 demands that the attorney has an affirmative duty to disclose the Ps death to opposing counsel Hughesnotes that although these situations probably do not technically violate Rule 4.1 because there was no affirmative misstatement by lawyer and because client himself did not initially perpetuate a fraud on the third party that lawyer is covering up, courts do not like this type of cuteness and will probably sanction the lawyer Rubin v. Schottenstein, Zox & Dunn (6th Cir. 1998)Rubin and other investors and their lawyers speak with Barnhart, an attorney representing MDI concerning a possible investment in MDIs debt and stock. They are trying to get information as to the solvency of MDI, MDIs other debt obligations and other liabilities. MDI is on the brink of default on a loan given by Star Bank, which would be effected if MDI sold debt. Attorney Barnhart tells the investors that everything is o.k. and that there was no need to speak with Star Bank. Under this misguiding information, Rubin purchases MDI debt, which is almost immediately lost due to the effectuation of default and subsequent bankruptcy. The attorney argues that Rule 4.1 and SEC Rule 10b-5 duties to disclose conflict with his duty to maintain confidentiality under Rule 1.6 The attorney does not have a duty to disclose the information under Rule 10b-5; however, since the attorney gave misleading information pertaining to the investment, then it is unlawful for any person to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleadingbut the attorney argues that the additional information necessary to rectify the past misleading information would have required him to be in violation of Rule 1.6 41

42 Rule 4.1 Failure to Disclose is superceded by Rule 1.6 duty to maintain confidentialityso the attorney is only accused of violating SEC Rule 10b-5 The attorney is obliged under Model rules not to disclose this information; however, concurrently, the attorney is required under Rule 10b-5 to disclose all relative information Hughesthe attorney should have told his MDI clients that if the client wanted to be in compliance with the securities laws, then the client must give the attorney the right to disclose the confidential information (ie. confidentiality waiver). If the client refuses to permit the lawyer to reveal the information, then the client must withdraw his representation MISCELLANEOUS OTHER DUTIES o Model Rule 1.5: A lawyer can only charge a reasonable fee to her client. o Model Rule 1.8: Just because a lawyer represents a client, it does not mean that the lawyer shares that clients same values or views. o Model Rule 3.6: Lawyer cannot make statements out of court that have a substantial likelihood of prejudicing the proceedings if a reasonable lawyer would expect that the statement would by disseminated by public communication.

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