Disclosure of Conflicts Information When Lawyers Move Between Law Firms

A new ABA opinion concludes that limited information related to a representation and necessary for lateral-hire conflict-checking may be communicated to the hiring firm without the candidate violating Rule 1.6. The opinion considers various exceptions to confidentiality under Rule 1.6(b), but concludes that they do not apply. Op. 09-455 (October 8, 2009) concludes that Rule 1.6(b)(6) -- disclosure of client information "necessary. . .to comply with other law" -- does not apply because "other" seems to mean "other than the Rules."
Op. 09-455 concludes, nonetheless, that certain limited information that is covered by Rule 1.6 may (unless there are other problems, such as actual harm to the client) be disclosed as necessary for lateral hire conflict-checking. The conclusion is based on the Rules being "rules of reason," on analogies to other ABA opinions and rule amendment, and (above all) because "disclosure of conflicts information otherwise protected by Rule 1.6 should be considered permissible as necessary to comply with the Rules." Put differently, public policy permits that which Rule 1.6(b)(6) addresses generally, but does not permit.
I think the ABA Model Rules should permit the disclosures permitted by Op. 09-455. However, the straightforward way to do that is to delete "other" from Model Rule 1.6(b)(6) (or otherwise make clear that "law" includes the Rules), rather than have a series of ABA opinions that have the same effect as such a rule amendment would.

Federal Judge Holds Red Flags Rule Over-Reaches When Applied to Lawyers

A federal judge has called the Federal Trade Commission’s Red Flags Rule over-reaching in its application to lawyers, and granted partial summary judgment on October 29, 2009 to the American Bar Association (“ABA”). Counsel for the ABA says it has won all the relief it sought in its challenge to the regulation, including injunctive relief.

The Red Flags Rule is an identity-theft prevention matter. It requires creditors who defer payments for goods and services to develop and implement written programs to identify, detect, and respond to warning signs of identity theft. In spring 2009, the FTC concluded that lawyers are considered creditors under the rule.

On August 27, 2009, the American Bar Association filed suit in the U.S. District Court for the District of Columbia against the Federal Trade Commission, seeking an injunction to block the application of the "Red Flags Rule" to practicing lawyers.

After the October 29, 2009 hearing, ABA President Carolyn B. Lamm issued a statement:

“This ruling is an important victory for American lawyers and the clients we serve. The court recognized that the Federal Trade Commission’s interpretation of the Fair and Accurate Credit Transactions Act over-reaches and its application to lawyers is unreasonable. By voiding the FTC’s interpretation of a statue that was clearly not intended to apply to the legal profession, the court has ensured that lawyers stay focused on the mission of their work: providing aid and counsel to the individuals and organizations that need us.”

An account of the hearing quotes Walton as saying, “I have a real problem with concluding that Congress intended to regulate lawyers when these statutes were enacted.” http://legaltimes.typepad.com/blt/2009/10/judge-ftc-cannot-make-lawyers-comply-with-identity-theft-laws.html

On October 30, 2009, Judge Walton entered an Order granting summary judgment as to Count I of the ABA’s Complaint alleging that the Commission's application of the Red Flags Rule to attorneys violates 5 U.S.C. § 706(2)(C) as it is "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." A memorandum opinion with points and authorities will issue within 30 days.

Legal Malpractice

The New Jersey Supreme Court is about to take another look at the "settle and sue" syndrome: When a client settles a case and then sues his or her lawyer over it. The case is Guido v. Duane Morris.

ABA Commission to Study Globalization of Legal Services and Impact of Techonology on Law Practice

ABA President Carolyn B. Lamm created the Commission on Ethics 20/20. The Commission will perform a thorough review of the ABA Model Rules of Professional Conduct and the U.S. system of lawyer regulation, and will ultimately propose policy recommendations that will allow lawyers and law firms to better serve their clients, the courts, and the public now and well into the future. The Commission members represent a broad spectrum of expertise in U.S. and global ethics rules, lawyer regulation, globalization, and technology. They come from the judiciary (state and federal), law firms (large and small), corporate counsel, government, and academia. You can learn more about them and the Commission’s work at www.abanet.org/ethics2020

Due to globalization and technology's impact on how lawyer's practice--enabling lawyers and law firms to have a virtual presence in other countries--questions have arisen regarding how the practice of law may be regulated in the future, including choice of law issues. Overseas, in the U.K and Austrailia, for example, there are significant changes being made in how legal services are delivered that are currently prohibited by bar regulators in the U.S.

The Commission will engage ABA and affiliated entities, the judiciary, the bar (including international, state, local, and specialty bar associations), and the public in framing and discussing the issues, and enlist their support in fashioning policy recommendations. The Commission will hold public hearings, roundtables, and present educational programs live and via the web. It will conduct e-surveys and provide broad opportunities for written submissions and comments. At the conclusion of its three-year term, the Commission will issue a report with its recommendations.

Trial Conduct: Lawyer denied right to wear baseball cap in court

A federal district court in New York has ruled that a lawyer has no free speech right to wear a baseball cap while appearing in court as a pro se litigant. (Bank v. Katz, E.D.N.Y., No. 08-cv-1033, 9/24/09). The lawyer's desire to make a “fashion statement” is not a fundamental right that trumps the state court's legitimate interest in “maintaining proper decorum, etiquette, and respect for the judicial process,” the court wrote. Judge Nicholas G. Garufis stated: “[I]t is appropriate for a court to expect litigants to appear in attire that is suitable to the dignity of a courtroom, rather than to show up in clothes they might have worn to a baseball game.”

Prosecutor's Duty to Disclose Exculpatory Information

The ABA's Standing Committee on Legal Ethics and Professional Responsiblity has just issued a new opinion, Formal Op. 09-454 (2009) which holds that a prosecutor's ethical duty under Model Rule 3.8 is broader in scope than the constitutional requirements under Brady v. Maryland. The key difference, according to the Committee, is that Rule 3.8 (d) "requires the disclosure of evidence or information favorable to the defense without regard to the anticipated impact of the evidence or information on the trial's outcome." (emphasis added). In contrast, the constitutional standard is that the prosecutor need only turn over material evidence which means that the trial's outcome would likely had been different had the disclosure been made.

Ex Parte Contacts with Employees of Represented Corporation

A new decision in this developing area of law holds that plaintiffs' counsel may contact non-supervisory employees of the defendant company that is represented by counsel in a Title VII action in federal court. The case is Smith v. United Salt Corp, USDC W.D. Va. (Sept. 9. 2009). The defendant argued that Lewis v. CSX Transp. Inc., 202 F.R.D. 464 (W. D. Va. 2001) is controlling and that such employee's are "off limits" for ex parte contacts by plaintiff's counsel. Plaintiffs counsel relied in part on Cmt. [4] to Va. R. Prof. Conduct 4.2 which indicates that employees that cannot bind the employer or who are outside the "control group" are not regarded as "represented" by counsel for the employer. Judge Sargent ruled that statements by non-supervisory employees in a Title VII case do not bind the employer and cannot be used as admissions or impute liability to the employer. The employer is subject to vicarious liability only for acts of supervisory personnel. Applying both Rule 4.2 and Fed. R. Evid 801 (d)(2)(D), Judge Sargent held that the ex parte contacts are not prohibited.