Part II THE DUTIES OF LAWYERS
Chapter 3. The Duty to Protect Client
Confidences
pp. 159-228
A. The basic principle of
confidentiality RPC 1.6(a)
A lawyer shall not reveal information relating to
the representation of a client unless the client
gives informed consent, the disclosure is
impliedly authorized in order to carry out the
representation or the disclosure is permitted by
paragraph (b).
Why duty? Cmt. 2
Scope: “all information relating to
representation, whatever its source.” Cmt. 3
Client identity
• Suppose (s/) movie star consults L about
possible divorce? Confidential?
• What must firm managers, partners do?
Recall RPC 5.1.
Probs. 3-1, 3-2 Your dinner with Anna
pp. 163-67
Scene 1: What can you tell Anna about first
day’s work?
Scene 2: Did you say too much? Violate 1.6?
• Promise to keep secret?
• Relevance that in public place?
• Personal need to blow off steam?
• Did Anna say too much about Estella, CF?
Rstmt. §60(1)(a): more realistic
standard? Pp. 167-68
Prohibits revelation only if “reasonable prospect
that doing so will adversely affect a material
interest of the C or if C has instructed L not to
use or disclose such information”
Cmt. c. (i) defines adverse effects: frustrate C
objectives; material misfortune, disadvantage or
prejudice; $ or physical harm; personal
embarrassment.
Future risk to Joey’s interests?
Permissible discussion with
• Life partner?
• Spouse?
• Therapist? (psychiatrist, psychologist, social
worker?)
• Others in firm?
E-mail
pp. 169-70
ABA F. Ops.
99-413 generally needn’t use special
encryption
11-459 but if represent employee,
caution not to use employer’s
server; no expectation of privacy
New 1.6(c) (8/12)
(c) A lawyer shall make reasonable efforts to
prevent the inadvertent or unauthorized
disclosure of, or unauthorized access to,
information relating to the representation of a
client.
- lax security
- hacking
- electronic equivalent of dumpster diving
(industrial espionage)
Revised Cmt. 18: Factors for determining
Reasonableness of L’s Efforts
-
Sensitivity of information
Likelihood of disclosure without safeguards
Difficulty & cost to implement safeguards
Extent to which safeguards adversely affect Ls’
ability to represent clients
Mere disclosure, by itself, does not trigger
discipline.
B. Exceptions to duty to protect confidences
1. Revelation of past criminal conduct pp. 170-225
• Nutshell history: MOST CONTROVERSY >
NOW LONG LIST OF EXCEPTIONS
“Dead bodies” (70s); Spaulding (‘62)
• Both occurred before ‘83 MRPC; probably
Canons (duty: preserve confidence unless C
announced intent to commit crime)
• Continued relevance
– Evolution of confidentiality duty & exceptions
• Balkanization: jurisdictional differences
– Moral struggle with line-drawing
1. Revelation of past criminal conduct
pp. 173-79
Prob. 3-3 The missing persons, Scene 1
Garrow tells you (Belge) crime details, location
of bodies. Clicker: What to do?
1. Tell someone where to find bodies. (who,
how? Allowed?)
2. Go to site, confirm.
3. Do nothing but defend client.
**Clicker Q: Prob. 3-4 The missing
persons, Scene 2
pp. 179-80
Susan Petz’s father comes from Chicago to
Syracuse, asks Armani: “Can you tell me
anything?”
1. “I’m so sorry, she is dead.”
2. “No.” Try case.
3. Attempt plea bargain.
4. Other options?
Did Armani & Belge do anything wrong? (law,
or poor judgment)
1. Yes, took photos of remains, hid in safe spot.
2. Yes, attempted plea bargain.
3. Yes, allowed Garrow to testify.
4. Yes, made public statement after trial that
knew; bad judgment.
5. No, Garrow testified honestly, confessed.
6. No, did nothing wrong.
Belge Indicted pp. 181-84
Tr. Ct. dismissed, App. Div. aff’d.
Public health laws: duty to report death;
decent burial.
Tr. Ct.: dismissed; don’t force Hobson’s choice on
L’s.
Ethical duty of confidentiality (NY CPR then treated
same as ACP) Cat chasing own tail
5th Am. of Δ, as relates to L (derivative duty)
App. Div.: troubled with absolute ACP, only
issue sufficiency of indictment.
2. The risk of future injury or death
Prob. 3-5 The missing persons, Scene 3 pp. 184-85
• Settled medmal suit v. state; transfered to medium
security prison.
• Escaped. Hit list in cell.
• He told you hiding place.
– 1.6( b) “MAY”
• Discretion vs. Duty?
• Will you?
Edmond man threatens Newtownstyle attack (Jan. 24, 2013)
“Judge & both attorneys do not realize
what . . . capable of doing, they need to
be careful . . . Capable of doing things
along the line of Newton”
Discretion to warn? ABA & OK RPC
1.6(b)(1), cmt. 6 TX: DUTY p. 187, n. 36.
RPC 1.6(b)(1)
(b) A lawyer may reveal . . . to the extent the lawyer
reasonably believes necessary:
(1) to prevent reasonably certain death or substantial
bodily harm;
***Cmt. 6 . . . overriding value of life and physical
integrity . . . if it will be suffered imminently or if
there is a present and substantial threat that a
person will suffer … harm at a later date if the
lawyer fails to take action necessary to eliminate
the threat. (**Read with care, possible applications?)
2. The risk of future injury or death
pp. 185-200
Spaulding v. Zimmerman (MN 1962)
BIG picture? (few sentences)
TIME line?
Procedural posture? appeal from trial court vacating
settlement agreement on behalf of minor, previously
approved.
Issue? whether abuse of discretion?
Holding?
Duty of candor? Compare MRPC & OK 3.3; OK improved
upon! N.B. 1.0 on fraud; flagged to improve but
couldn’t. (cat & tail)
What explains lawyers’ behavior?
Current Relevance?
• WHY d/n defense counsel tell π counsel?
• WHO did Δ counsel represent? Ins. Co.?
Zimmermans?
– Did they consult with their clients about whether to
disclose?
•
•
•
•
WHY d/n π counsel get Dr. Hannah’s report?
Duty of CANDOR to tribunal (approve settlement)
WHO should adult David sue?
Immoral to withhold information from David &
family? Community reaction when word out?
Enron: game changer
3. Client frauds & crimes causing
$$$$$ pp. 201-220
RPC 1.2(d) prohibits from knowingly advising or
assisting clients’ crimes & frauds
1.0(d) Fraud: “conduct that is fraudulent under the
substantive or procedural law of the applicable
jurisdiction and has a purpose to deceive.”
Many types: torts, criminal (state & fed’l), contracts . . .
No clear or uniform definition; open-ended.
1.0(f) Knowledge: “actual knowledge of fact in
question” inferable from circumstances.
Changing rules allow
PREVENTION OR MITIGATE $,
property harm . . . .
REMIND OF Subtext: Politics of
Prof’L Reg’n & Role of ALI pp. 207-16
About every 10 years another
major $$$ scandal >>>> federal
reforms, expand 1.6 confid’y
exceptions
Sarbanes-Oxley §307 RULES OF PROFESSIONAL
RESPONSIBILITY FOR ATTORNEYS (2009)
SEC shall issue rules, in the public interest and for the
protection of investors, setting forth minimum standards of
professional conduct for attorneys appearing and practicing
before the Commission in any way in the representation of
issuers, including a rule—
(1) requiring an attorney to report evidence of a material
violation of securities law or breach of fiduciary duty or
similar violation by the company or any agent thereof, to the
chief legal counsel or CEO; and
(2) if no appropriate response from CLO or CEO L must report
the evidence to the audit committee of the board of directors of
the issuer or to another [independent] committee of the board
or to the board of directors.
The SEC Standards
Is the lawyer covered?
Does the lawyer “appear and practice”
according to 205.3?
Is reporting required?
The lawyer has a duty to report when she “becomes
aware of evidence of a material violation
by the issuer or by any officer, director,
employee, or agent of the issuer.”
17 C.F.R. § 205.3(b)
Which method of reporting
will be used?
The Direct, Bypass,
or Alternative Method
Is the lawyer satisfied?
If yes, then that is likely the end of the matter.
I If not, the SEC Standards require the lawyer to then
“report the evidence of a material violation” to the;
“audit committee of the issuer’s board of directors;”
another committee of the board composed of independent directors;
or the full board of directors.
SEC, Harvey Pitt
Proposed SEC rule:
-covered lawyers practicing b/4 SEC
-must report securities fraud to highest officials
-If no timely & proper response
-MUST make “noisy withdrawl” (w/d & notify
SEC).
ABA pushback > ABA Task Force on Corp.
Responsibility . . . HOD approved amendments,
current 1.6(b)(2), (3) and 1.13. p. 209 n. 78
Wolas & U.S. v. Benjamin: career ender!
Current status
SEC: Wait & see approach
– disqualify (DQ) L from appearing before Only one ($50K fine;
recent grad, generalist, work mile wide & inch deep.
Statutory whistleblower protection WestlawNext:
over 350 results, 50 Circuit Cases!
> 2 10th Cir. See, Lockheed Martin Corp. v. Admin. Rev. Bd.,
Dept. of Labor (‘13) (Amicus: Nat’l CC & Nat’ Employment Ls)
> 2 7th Cir. See, Wiest v. Lynch, Tyco, et al. (‘13); DeGuelle v.
Camilli (‘11)
U.S. v. Rybicki (2d Cir. 2003) (L’s conviction mail & wire fraud,
kickbacks to insurance, SOX allows up to 20 years in prison) n.4
Larry Fox
Drinker Biddle (Phila. ABA
HOD, now Yale Ethics)
Gives NEW meaning to
Wacko! When drafted
amicus brief on Thompson
v. NOLA, SO BAD that JM
replied to long list of
recipients urging he tone
it down, helped.
ABA 1.6(b)(2), (3) discretion
-if reasonable certainty C conduct will or has
caused another’s substantial $ or property
injury
-C is using/has used L’s services in doing so,
-may reveal to
(2) prevent C’s crime/fraud or
(3) not yet discovered, Victim (Vic)
unaware, to prevent, mitigate or rectify harm
Prob. 3-9 Reese’s Leases
pp. 218-20
Important Facts
-ELS (OPM): 60% firm’s revenue
Firm papered lease transactions; opinion letters to
lenders (recent Colo. Decision)
-In reliance, lenders extended further credit
– charged customers less for leases; lease income
less than (<) loan repayments. Go figure…
-C confesses forgery, promises to stop. (Dark &
stormy night)
Prob. 3-9 Reese’s Leases pp. 218-20
Clicker: Best option for firm?
1. Accept C’s promise to stop, continue
representing?
2. Withdraw (fire the C)? (RPC 1.16(b)(1))
3. Tell lenders, perhaps prosecutors?
Look into Crystal Ball …
Takeaways from OPM?
• Don’t let firm depend on single client for
revenue – INTERFERES WITH INDEPENDENT
PROFESSIONAL JUDGMENT
• Carry adequate malpractice insurance (but
was this covered or under personal COI
exclusion?)
• Recall from LM discussion: Risks of
representing friends & family
“Parted amicably”
S/ law school friend calls, “any reason why
shouldn’t accept new C?” Role play
E2k improvements: write letter that both
Rockwell International & your Grandma
understand.
Letter to lender (other crime/fraud
victims)
• Notice of w/d
• Disaffirm work product, opinions
• Substantive disclosure of C’s misuse of
services, fraud
• Notice to protect own interests
RULE 4.1: TRUTHFULNESS IN STATEMENTS
TO OTHERS: noisy w/d sometimes DUTY to
reveal
In the course of representing a C a L sh/n knowingly:
(b) fail to disclose a material fact when disclosure is
necessary to avoid assisting a criminal or fraudulent act by a
C, unless disclosure is prohibited by Rule 1.6.
Cmt. 3 . . . Ordinarily [withdrawal avoids 1.2(d) violation] . . .
Sometimes . . . give notice of the fact of withdrawal and to
disaffirm an opinion, document, affirmation or the like. In
extreme cases, substantive law may require L to disclose
information relating to the representation to avoid being
deemed to have assisted the client’s crime or fraud. ****If
the lawyer can avoid assisting a client’s crime or fraud only
by disclosing this information, then under paragraph (b) the
lawyer is required to do so, unless the disclosure is
prohibited by Rule 1.6.
Compare OK RPC 1.6(b)
(2) to prevent C from committing:
(ii) SAME as ABA (2)
(3) [SAME as ABA, but proviso] . . . the L has first
made reasonable efforts to contact the client so
that the client can rectify such criminal or
fraudulent act but … unable to do so, or L has
contacted the C & called upon to rectify such
criminal or fraudulent act and the C …refused or
unable to do so.
4. 1.6 Exceptions for “Lawyer Selfinterest” pp. 220-25
(b) to the extent reasonably necessary, may
reveal
(4) to obtain legal advice about ethical obligations
(5) to establish claim or defense in controversy w/ C,
defense to criminal or civil charge, or respond to
allegations in any proceeding [re repre’n]
(6) to comply w/ other law or ct order
(7) NEW, Ethics 20/20: Conflicts screening lateral
lawyers
C. Use or disclosure of confidential information
for personal benefit or to benefit another C.
Pp. 225-27
Prob. 3-10 An Investment Project
S/Represent Boeing searching for new
manufacturing site. You learn developers
acquiring adjacent property.
May YOU buy for yourself? Sure of C’s decision not
to buy?
1.8(b) sh/n use info. to disadvantage of C (unless
informed consent (IC), or otherwise (o/w) permitted).
Cmt. 5.
S/ Don’t consult. Client relations problems?
Fred Zacharias
• Ls don’t discuss confidentiality with C’s; not
frank w/ C’s about limits to it.
• Cs learn about duty from TV, popular culture
(egads!!)
• Geeks: require Miranda warnings to C’s
– Problems w/ when & how to tell; may discourage
C from disclosing when L’s advice could prevent.
– Educate repeat Cs what not to tell next L