"Anything you say may be used against you": A proposed seminar on the lawyer's duty to warn of confidentiality's limits in today's post-enron world

Fordham Law Review

Volumn 76, Issue 3, 2007, Pages 1745-1767

  Rothstein, Paul F ^a  

^a GEORGETOWN UNIVERSITY   (United States)

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EID: 39349103781     PISSN: 0015704X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (170)

1. Upjohn Co. v. United States, 449 U.S. 383, 389-92 (1981) (citations omitted). That corporate counsel do, at least sometimes, caution against illegality as Upjohn supposes, is illustrated by a recently reported incident involving Chiquita International Brands Co. See Carol D. Leonnig, Advice from Justice Dept. Central to Chiquita Case, Wash. Post, Aug. 2, 2007, at Al ("[I]nternal Chiquita records state that the company's outside legal counsel warned them in February 2003 that they 'must stop [the] [illegal] payments [to a group the State Department had declared a terrorist group].'... 'Bottom line: CANNOT MAKE THE PAYMENT,' the Kirkland & Ellis law firm advised Chiquita, according to court records and sources.").
2. Model Rules of Prof'l Conduct R. 1.6 cmt. 2 (2007). The Model Rules of Professional Conduct are recommended by the American Bar Association (ABA) for state adoption, to regulate lawyers licensed by the particular state, but a number of states have not adopted them, or have modified them, or have adopted some but not others. The ABA Model Rules were promulgated in 1983 and extensively revised in 2002. The Rules were further revised concerning a few provisions in 2003. Some adopting states have also adopted the amendments, some have not, and some have adopted variants. Where the ABA Model Rules are not adopted, usually some form of earlier ABA ethics code provisions, previously adopted by the state, remain in place, such as the 1969 ABA Model Code of Professional Responsibility (ABA Model Code) - which is different, despite its somewhat similar name, than the ABA Model Rules - or, less likely, the 1908 ABA Canons of Ethics. Confusingly, both the 1908 and 1969 codes use the word "Canon" for their general prescriptions. I will generally cite herein only the ABA Model Rules on a particular matter, leaving to the students to cite the state provisions (as this essay is a proposal for a student research seminar, and should not give away the whole "ball game").
3. See Paul F. Rothstein, The Story of Upjohn Co. v. United States: One Man's Journey to Extend Lawyer-Client Confidentiality, and the Social Forces that Affected It, in Evidence Stories 151, 153, 173 (Richard Lempert ed., 2006).
4. See John C. Coffee, Jr., The Attorney as Gatekeeper: An Agenda for the SEC, 103 Colum. L. Rev. 1293 (2003);
5. Susan P. Koniak, Corporate Fraud: See, Lawyers, 26 Harv. J.L. & Pub. Pol'y 195 (2003);
6. Susan P. Koniak, When the Hurlyburly's Done: The Bar's Struggle with the SEC, 103 Colum. L. Rev. 1236 (2003).
7. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (codified in scattered sections of 11, 15, 18, 28, and 29 U.S.C).
8. See 15 U.S.C. § 7245 (Supp. IV 2004) (codifying a pertinent provision of Sarbanes-Oxley (SOX) for our purposes). In that provision, Congress told the Securities and Exchange Commission (SEC) to establish "minimum standards of professional conduct for attorneys appearing and practicing before [the SEC]," and to require attorneys to report up the corporate ladder, to the company's chief legal counsel or chief executive officer, evidence of material securities law violations or breaches of fiduciary duty, and if there is no "appropriate[]" response, to go further up the corporate ladder to the board of directors' audit committee, which shall be composed solely of outside directors, or to the board of directors itself. Id.
9. The regulations appear at 17 C.F.R. § 205 (2006). See also Implementation of Standards of Professional Conduct for Attorneys, 68 Fed. Reg. 6297, 6320 (Feb. 6, 2003) (codified at 17 C.F.R. § 205). They became effective August 5, 2003, and in some respects arguably go beyond what Congress contemplated.
10. See infra notes 8, 37.
11. Thus the regulations provide for two kinds of reporting of lawyer confidences: "up-the-ladder" (inside the client) and "outside-the-ladder" (outside the client). See infra note 37.
12. The local provisions are detailed in comparative chart format in Att'ys' Liability Assurance Soc'y, Ethics Rules on Client Confidences, in Thomas D. Morgan & Ronald D. Rotunda, 2003 Selected Standards on Professional Responsibility, 161, 161-72 (2003).
13. See generally Model Rules of Prof'l Conduct (2007).
14. Restatement (Third) of the Law Governing Lawyers (2000).
15. I am not saying that all the exceptions to confidentiality that are discussed herein are recent or are the result of Enron, or even have been augmented recently. They are germane to my central thesis regardless. Rather, the exceptions have become more prominent because of recent developments. The saga of how the ABA's recommended ethics rules lagged behind many state provisions favoring disclosure of fraud, until the ABA's hand was forced by Enron (and ensuing SEC developments) is told in Roger C. Cramton et al., Legal and Ethical Duties of Lawyers After Sarbanes-Oxley, 49 Vill. L. Rev. 725, 727-34, 781 (2004).
16. See generally Paul F. Rothstein & Susan W. Crump, Federal Testimonial Privileges § 2:31 (2d ed. 2008);
17. Rothstein, supra note 3, at 158-59, 175-76.
18. See Rothstein, supra note 3, at 175-77.
19. A good statement of the crime-fraud exception to attorney-client privilege is contained in Uniform Rule of Evidence 502(d)(1), which was recommended by the National Conference of Commissioners on Uniform State Laws (who drafted it) and the ABA for state adoption and generally reflected the law in most states and federal courts. There are decisions expanding this traditional exception in at least three ways: (1) extending the exception beyond crime and fraud to include other wrongs and torts, (2) eroding threshold burdens of proof triggering in camera inspection and triggering the exception itself, and (3) blurring the distinction between, on the one hand, past wrongdoing (which is privileged) and, on the other hand, continuing, planned, or future wrongdoing (which is unprivileged), by articulating a theory of continuing duty to disclose past wrongdoing-making past wrongdoing that is not disclosed into present and continuing wrongdoing. See Rothstein, supra note 3, at 177-79;
20. see also Rothstein & Crump, supra note 13, § 2:36. Ethics codes typically have confidentiality exceptions-somewhat analogous to the crime-fraud exception-that are also expanding.
21. See, e.g., Model Rules of Prof'l Conduct R. 1.6(b)(1)-(3) (2007).
22. See, e.g., Unif. R. Evid. 502(d)(3) (unprivileging communications relevant to a breach of duty by either a client or lawyer to the other, such as in a malpractice action, fees lawsuit, claim of ineffective assistance of counsel in a criminal case, disciplinary proceeding, and other situations); Unif. R. Evid. 502(d)(4) (unprivileging communications needed to defend lawyer against charges he assisted the client in crime or fraud). Ethics codes typically have somewhat similar confidentiality exceptions.
23. See, e.g., Model Rules of Prof'l Conduct R. 1.6(b)(4)-(5). There is some difference among jurisdictions, both as to privilege and as to ethics provisions, regarding the extent to which the client must be involved in a matter or proceeding in which the lawyer is defending herself. The importance of this exception for our purposes is magnified by the fact that there seems to be an increasing tendency to prosecute lawyers in connection with their client's crimes, as noted in many statements and publications of members of the criminal and white-collar bar.
24. See, e.g., Sheri Quakers, As Liability Grows, GCs Get Nervous; An SEC Fine of $40K Against a GC Illustrates Growing Scrutiny, Nat'l L.J., Sept. 26, 2006, at 8 (quoting Robert Ullman, a white-collar defense lawyer of the Boston firm Nutter McClennen & Fish, as saying that "[t]he government often overreaches when it brings criminal charges against lawyers and accountants who are trying to fix problems in their companies").
25. See Rothstein & Crump, supra note 13, § 2:8 (citing many cases and describing how under privilege, the purpose of the consultation must be for professional legal services). Ethics codes frequently have somewhat similar provisions.
26. For one mechanical example, I have not said much about how the reports and related tasks I describe are to be allocated among the students. Whether and to what extent students would be assigned more than one will depend on, among other things, how many students are enrolled in the seminar.
27. One or several students should be assigned to each of the topics, depending on the number of students in the seminar and how the teacher chooses to divide the work. The teacher could decide whether research on all four of the topics should start simultaneously or whether each should wait until the previous one is completed and presented to the group. There is enough information in this essay to get research on all the topics started simultaneously without waiting for the others. In any event, presentation to the seminar of the four topics should be seriatim. The third and fourth topics could be delivered to the seminar out of order, and even before the other topics are in. These variations in order are all possible because I am assuming the teacher will have given a relatively thorough introduction on the opening days of the seminar and that, at the weekly meetings of the full seminar, the teacher will go around the table and get oral reports of the progress and preliminary findings of each of the student researchers.
28. Even if I were relatively "omniscient" about the subject, I would not try to provide exhaustively in the present essay everything the students will be expected to uncover in their research, since they will undoubtedly discover this essay and that would defeat the research skills we are striving to inculcate. My guideline in this essay has been to provide only enough substantive legal and ethical information to indicate the general sorts of things that can be done and found and the direction the research should take-that is, enough to get the ball rolling.
29. See, e.g., Unif. R. Evid. 502; Restatement (Third) of the Law Governing Lawyers §§ 68-86 (2000).
30. See, e.g., Richard A. Zitrin et al., Legal Ethics in the Practice of Law 125 (3d ed. 2007) (setting forth a sample tort complaint).
31. See, for example, the Model Rules of Professional Conduct Rules 1.6(a), 1.8(b), 1.9(c), 1.18(b) (2007) and the corresponding provisions of the 1983 Model Rules, the Model Code of Professional Responsibility DR 4-101(A) (1983), and the Restatement (Third) of the Law Governing Lawyers § 60 (2000).
32. See also Restatement (Third) of the Law Governing Lawyers § 15.
33. See, e.g., Lawyer Disciplinary Bd. v. McGraw, 461 S.E.2d 850 (W. Va. 1995);
34. In re Mandelman, 514 N.W.2d 11 (Wis. 1994); ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 93-370 (1993); State Bar of Ariz. Comm. on Rules of Prof'l Conduct, Op. 2000-11 (2000);
35. see also Kan. Bar Ass'n Comm. on Ethics/Advisory Servs., Op. 01-01 (2001); N.D. State Bar Ass'n Ethics Comm., Op. 95-11 (1995).
36. See, e.g., People v. Beige, 372 N.Y.S.2d 798 (1975), aff'd, 376 N.Y.S.2d 771 (1975).
37. See, e.g., Swidler & Berlin v. United States, 524 U.S. 399 (1998) (noting that confidentiality is so important that it persists after the death of a client); Ag Gro Serv. Co. v. Sophia Land Co., 8 F. Supp. 2d 495, 498 (D. Md. 1997) (noting that confidentiality is not just a "fine point" of ethics, but central to the relationship of lawyer and client). Prescriptions commanding confidentiality to lawyers' employees would be relevant here, as well.
38. See Ctr. for Prof'l Responsibility, Am. Bar Ass'n, Annotated Model Rules of Prof'l Conduct 94 (5th ed. 2003) [hereinafter Annotated Model Rules].
39. See Ex parte Taylor Coal Co., 401 So. 2d 1, 7-8 (Ala. 1981). Taylor Coal noted that a finding that client information is not within the privilege does not mean that a lawyer is permitted to reveal it. Id. Unlike privilege, the ethical duty of confidentiality applies notwithstanding the facts that there has already been disclosure, that the source of information about the representation is not the client, that the information was not communicated in confidence, that the information is not sought or given in a formal proceeding, that the information about the representation was not derived from a client confidence, that the communication related to the client's will, or that information is of the generalized kind mentioned later in this essay, which would not be privileged. See In re Goebel, 703 N.E.2d 1045 (Ind. 1998); Model Rules of Prof'l Conduct R. 1.6 cmts. 3, 4 (2007); ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 411 (1998); ABA Comm. on Ethics and Prof'l Responsibility, Informal Op. 1287 (1974) (DR 4-101(A));
40. see also Taylor Coal, 401 So. 2d 1;
41. In re Anonymous, 654 N.E.2d 1128 (Ind. 1995);
42. Lawyer Disciplinary Bd. v. McGraw, 461 S.E.2d 850 (W. Va. 1995); In re Harman, 628 N.W.2d 351 (Wis. 2001);
43. State Bar of Ariz. Comm. on Rules of Prof'l Conduct, Op. 2000-11 (2000);
44. Miss. State Bar Ass'n Ethics Comm., Op. 101 (1985);
45. N.D. State Bar Ass'n Ethics Comm., Op. 95-11 (1995);
46. Bd. of Prof'l Responsibility of the Sup. Ct. of Tenn., Op. 82-5F-25 (1982). But see Profit Mgmt. Dev. v. Jacobson, Brandvik, and Anderson, Ltd., 721 N.E.2d 826 (Ill. App. Ct. 1999);
47. In re Sellers, 669 So. 2d 1204 (La. 1996);
48. In re Detention of Williams, 22 P.3d 283 (Wash. Ct. App. 2001). Violation of an ethical rule of confidentiality does not itself necessarily mean malpractice has been committed.
49. See Model Rules of Prof'l Conduct pmbl., para. 20.
50. For example, ethical rules covered would include rules like ABA Model Rules 1.6(b) and 1.13 (2003) and perhaps Rules 1.2(d), 3.3, 4.1(b), 8.1, and 8.3, as well as others. Also covered should be the more limited exceptions to confidentiality in the analogous provisions of the ABA's 2000 Model Rules, 1983 Model Rules, 1969 Model Code, and 1908 Canons of Ethics. Some states still have something similar to these older versions. The students should cover representative state rules and rulings as well.
51. I am including a list because I think both the teacher and the students may need some guidance. It still leaves room for the student's paper to develop more fully and support the items on this list and add to the list. To facilitate this, I have limited my citations to only those needed to suggest my direction.
52. See Rothstein, supra note 3, at 173-77. As an adjunct to this, the student should include some discussion concerning the ethics of representing both the corporation and the employee, and the danger that the interviewee may make assumptions in this regard. See Model Rules of Prof'l Conduct R. 1.13(g);
53. Annotated Model Rules, supra note 25, at 219-23, 228-30;
54. Rothstein & Crump, supra note 13, § 2:20.
55. See supra notes 13-15 and accompanying text. In addition to provisions for credit for such cooperation in the Federal Sentencing Guidelines, several government agencies, including the SEC and the Department of Justice have cooperation policies in place.
56. See Thomas G. Bost, Corporate Lawyers After the Big Quake: The Conceptual Fault Line in the Professional Duty of Confidentiality, 19 Geo. J. Legal Ethics 1089 (2006);
57. C. Evan Stewart, This Is a Fine Mess You've Gotten Me Into: The Revolution in the Legal Profession, N.Y. Bus. L.J., Summer 2006, at 15. The Department of Justice purports to have recently softened its stance on pushing for waiver of attorney-client and work-product protections, in what is known as the "McNulty Memorandum."
58. See Press Release, U.S. Dep't of Justice, U.S. Deputy Attorney General Paul J. McNulty Revises Charging Guidelines for Prosecuting Corporate Fraud (Dec. 12, 2006), http://www.usdoj.gov/opa/pr/2006/December/06_odag_828. html. Many believe the change is only cosmetic.
59. See, e.g., Lawrence D. Finder & Ryan D. McConnell, Commentary: McNulty Memo Will Have Marginal Effect on Deferred and Nonprosecution Agreements, Corp. Couns., Mar. 27, 2007, http://www.law.com/jsp/ihc/ PubArticleIHC.jsp?id=1174912597365.
60. See Rothstein, supra note 3, at 176 n.16.
61. See id. at 176 n. 15.
62. See id.
63. A trustee in bankruptcy of a corporation, like other successors, has the power to waive privilege for the corporation, and frequently does. See generally Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343 (1985); Paul F. Rothstein, Federal Rules of Evidence 251 (3d ed. 2007). Certain other persons in the nature of receivers have that power as well. See Rothstein & Crump, supra note 13, § 2:22. The trustee of a bankrupt individual may not have similar power.
64. See Rothstein, supra note 34, at 246-48. The student should examine whether this applies in the ethical context as well.
65. See Rothstein & Crump, supra note 13, § 2:38. The student should examine whether similar principles apply in the ethical context as well.
66. 17 C.F.R. § 205 (2007);
67. see supra notes 6-8 and accompanying text. The regulations provide for two kinds of reporting of lawyer confidences: (1) Mandatory "Up-the-Ladder" (Inside the Client) Reporting. Covered lawyers who become aware of credible evidence of certain "material" wrongdoing by their client company (or agent thereof) must report it to the chief legal officer of the client and (discretionarily) to the client's chief executive officer. The chief legal officer must, upon being so notified, institute an inquiry into whether or not the violation has, is, or will take place. He or she must then advise the lawyer who reported, of what has been found and any action taken. If the lawyer/reporter reasonably believes that the report has not been promptly and appropriately responded to, the lawyer is required to report the matter to the audit committee of the board of directors or another committee composed solely of outside directors who are not "interested persons," or the board itself if there is no committee. If the client has a "legal compliance committee" to which the lawyer reported, the lawyer need not go any further and gauge the response. 17 C.F.R. § 205.3(b).
68. Permissive Outside-the-Ladder (Outside the Client) Reporting to the SEC. A covered lawyer may disclose confidential client information to the SEC, if the lawyer reasonably believes it necessary to:
69. (a) prevent "a material violation that is likely to cause substantial injury to the financial interest or property of the issuer or investors," id. § 205.3(d)(2)(i);
70. (b) prevent the client from committing perjury or subornation or an act likely to defraud the SEC, id. § 205.3(d)(2)(a); or
71. (c) "rectify the consequences of a material violation by the issuer that caused, or may cause, substantial injury to the financial interest or property of the issuer or investors in the furtherance of which the attorney's services were used," id. § 205.3(d)(2)(iii).
72. Ordinarily, a lawyer probably could only believe the outside-the-ladder reporting is "necessary" if the up-the-ladder reporting had not obtained satisfactory results. The permission to report outside the client arguably goes beyond what Congress contemplated. See supra note 6. It would also seem to violate traditional notions of lawyer confidentiality and privilege as still found in the legal and ethical prescriptions of a number of states, at least as to past wrongdoing. These states have not adopted provisions like the 2002/2003 amendments to the ABA Model Rules of Professional Conduct 1.6 and 1.13 (which are consistent with the SEC regulations). Do Congress and the SEC have constitutional power to override state prescriptions when it is the states that license lawyers? For example, California's privilege and ethics rules, like those in many other states, seem to forbid outside-the-ladder reporting except in certain narrow instances (e.g., to prevent death or serious bodily injury). See Cal. Bus. & Prof. Code § 6068(e) (2007);
73. Cal. Rules of Prof'l Conduct R. 3-100, 3-600 (2004); Cal. R. Ct. 3.1362(c) (West 2007);
74. Cal. Rules of Prof'l Conduct R. 3-210 (Discussion Draft 2006). The SEC regulations expressly purport to override state provisions to the contrary. See 17 C.F.R. §§ 205.1, 205.6(aMc), 205.7. But there is an open question as to their constitutionality in this regard. For a variety of views on this question,
75. see generally N.C. State Bar Ass'n Ethics Comm., Op. 9 (2006); Corps. Comm. of the Bus. Law Section of the Calif. State Bar, Conflicting Currents: The Obligation to Maintain Inviolate Client Confidences and the New SEC Attorney Conduct Rules, 32 Pepp. L. Rev. 89 (2004);
76. and Cramton et al., supra note 12. See also Corps. Comm. of the Bus. Law Section & Comm. on Prof'l Responsibility and Conduct, Ethics Alert: The New SEC Attorney Conduct Rules v. California's Duty of Confidentiality (2004), available at http://www.calbar.ca.gov/calbar/ pdfs/SEC-ethics-alert.pdf.
77. The SEC has under consideration some even more extensive inroads on confidentiality. See Shawn Harpen, Eric Landau & Kathryn Lohmeyer, The SEC's Proposed Noisy Withdrawal Rule: Intended and Unintended Consequences, Orange County Law., June 2007, at 42 (2007). These authors suggest that if these go into effect, some sort of corporate "Miranda warning" may become necessary. "Corporate attorneys may need to advise officers and other agents of the corporation that the attorney may decide to disclose information and documentation provided to the attorney, in addition to the legal advice conveyed by the attorney."
78. Harpen, Landau & Lohmeyer, supra, at 48-49.
79. See, e.g., Model Rules of Prof'l Conduct R. 1.6(b)(2)-(3), 1.13 (2007); Restatement (Third) of the Law Governing Lawyers § 67 (2000).
80. Forty-one states permit (and four of them require) a lawyer to disclose confidential information to prevent a client's criminal fraud.... Eighteen states permit a lawyer to disclose confidential information to rectify or mitigate a past client fraud in which the lawyer's services were used.... Forty-four states permit (and three require) a lawyer to disclose confidential information relating to a client's ongoing criminal or fraudulent act. Cramton et al., supra note 12, at 784 (citations omitted).
81. See, e.g., Model Rules of Prof'l Conduct R. 1.6(b)(1); Restatement (Third) of the Law Governing Lawyers § 66. Students may also examine analogous state provisions and ethical opinions such as R.I. Sup. Ct. Ethics Advisory Panel, Op. 98-12 (1998).
82. See also Cal. Evid. Code § 956.5 (West 2007) ("There is no privilege ... if the lawyer reasonably believes that disclosure ... is necessary to prevent [the client from committing] a criminal act that the lawyer reasonably believes is likely to result in death of, or substantial bodily harm to an individual.");
83. People v. Dang, 113 Cal. Rptr. 2d 763 (Ct. App. 2001); Fox Searchlight Pictures, Inc. v. Paladino, 106 Cal. Rptr. 2d 906 (Ct. App. 2001); Purcell v. Dist. Att'y, 676 N.E.2d 436 (Mass. 1997); State v. Hansen, 862 P.2d 117 (Wash. 1993). Contra State v. Macumber, 544 P.2d 1084 (Ariz. 1976).
84. Tarasoff v. Regents of the Univ. of Cal., 551 P.2d 334, 343 (Cal. 1976). The SOX regulations expressly do not provide any private right of action for their violation, 17 C.F.R. § 205.7, but there are SEC penalties and remedies, id. § 205.7(b).
85. The traditional cases where attorneys have been charged usually also involved some tampering or meddling with physical evidence brought to the attention of the attorney by the client. See In re Ryder, 263 F. Supp. 360 (E.D. Va. 1967), aff'd per curiam, 381 F.2d 713 (4th Cir. 1967); People v. Meredith, 631 P.2d 46 (Cal. 1981); cf. People v. Beige, 372 N.Y.S.2d 798 (Onondaga County Ct. 1975), aff'd, 376 N.Y.S.2d 771 (App. Div. 1975). But students should be able to find other cases as well.
86. Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228 (D. Md. 2005) (setting forth the various positions on inadvertent waiver of attorney-client privilege); see also Rothstein & Crump, supra note 13, § 2:30; Paul F. Rothstein, Myrna S. Raeder & David Crump, Evidence in a Nutshell 207-08 (5th ed. 2007) [hereinafter Evidence in a Nutshell]; Paul F. Rothstein, Myrna S. Raeder & David Crump, Evidence: Cases, Materials and Problems 894-95 (3d ed. 2006 & Supp. 2007) [hereinafter Evidence: Cases, Materials & Problems]. The cited pages in these books also refer to some relevant new and proposed evidence and procedure rules on the matter, including newly amended Federal Rule of Civil Procedure 26(b)(5) and proposed Federal Rule of Evidence 502.
87. See citations in supra note 42 that also deal with "quick-peek" agreements.
88. See, e.g., Diversified Indus., Inc. v. Meredith, 572 F.2d 596 (8th Cir. 1977); Rothstein & Crump, supra note 13, § 2:8 (explaining that, under privilege, the purpose of the consultation must be for professional legal services). Ethics codes frequently have somewhat similar provisions. The problem is exacerbated where an attorney wears "two hats," i.e., has a business position with the client corporation as well as being its lawyer.
89. See SEC v. Gulf & Western Indus., Inc., 518 F. Supp. 675 (D.D.C 1981). English lawyers have had a particular problem with the "nonlawyer" purpose doctrine.
90. See Three Rivers Dist. Council v. Bank of Eng., [2004] UKHL 48 (Eng.).
91. For a good statement of the varying positions under privilege, see United States v. Sindel, 53 F.3d 874 (8th Cir. 1995), which deals with the Internal Revenue Service requirement to report the receipt and source of payments over $10,000 as applied to a lawyer's fee from a client, but treats the general question posed here.
92. See Rothstein, supra note 34, at 244-46;
93. Rothstein & Crump, supra note 13, § 2:11;
94. see also Alan Mandel, Comment, The Attorney-Client Privilege as a Protection of Client Identity: Can Defense Attorneys Be the Prosecution's Best Witnesses?, 21 Am. Crim. L. Rev. 81 (1983). Regarding the relative absence of the general principle under ethics rules and rulings,
95. see In re Goebel, 703 N.E.2d 1045 (Ind. 1998); Conn. Bar Ass'n Comm. on Prof'l Ethics, Op. 99-35 (1999);
96. Ill. State Bar Ass'n Advisory Op. on Prof'l Conduct, Op. 97-1 (1997);
97. Iowa Sup. Ct. Bd. of Prof'l Ethics & Conduct, Op. 97-4 (1997);
98. cf. United States v. Legal Servs., 249 F.3d 1077 (D.C. Cir. 2001). On client's whereabouts,
99. see John R. Przypyszny, Public Assault on the Attorney-Client Privilege: Ramifications of Baltes v. Doe, 3 Geo. J. Legal Ethics 351 (1989);
100. Shelly K. Hillyer, Comment, The Attorney-Client Privilege, Ethical Rules of Confidentiality, and Other Arguments Bearing on Disclosure of a Fugitive Client's Whereabouts, 68 Temp. L. Rev. 307 (1995).
101. See David Hricik, Confidentiality and Privilege in High-Tech Communications, 60 Tex. B.J. 104 (1997);
102. David Hricik, Lawyers Worry Too Much About Transmitting Client Confidences by Internet E-mail, 11 Geo. J. Legal Ethics 459 (1998);
103. Karen Mika, Of Cell Phones and Electronic Mail: Disclosure of Confidential Information Under Disciplinary Rule 4-101 and Model Rule 1.6, 13 Notre Dame J.L. Ethics & Pub. Pol'y 121 (1999);
104. Jonathan Rose, Note, E-mail Security Risks: Taking Hacks at the Attorney-Client Privilege, 23 Rutgers Computer & Tech. L.J. 179 (1997).
105. See also the following cases on e-mails: In re County of Erie, 473 F.3d 413 (2d Cir. 2007); Curto v. Med. World Commc'n, No. 03CV6327, 2006 WL 1318387 (E.D.N.Y. May 15, 2006) (affirming the magistrate judge's order that plaintiff-employee did not waive attorney-client privilege with respect to e-mail communications to her lawyer using the company's e-mail system);
106. Hopson, 232 F.R.D. at 228;
107. In re Asousa P'ship, No. 01-12295DWS, 2005 WL 3299823 (Bankr. E.D. Pa. Nov. 17, 2005);
108. In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005) (noting that in determining whether an employee's use of the company e-mail system to communicate with his personal attorney destroyed the attorney-client or work-product privilege, the court considered four factors: "(1) does the corporation maintain a policy banning personal or other objectionable use, (2) does the company monitor the use of the employee's computer or e-mail, (3) do third parties have a right of access to the computer or e-mails, and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies?"). Relevant to the analysis was the fact that although the company published a policy notifying employees they should have no expectation of privacy in e-mails as the company would monitor them, this policy was rarely enforced. On cell phones, see the following ethics opinions: State Bar of Ariz. Comm. on Rules of Prof'l Conduct, Op. 95-11 (1995); Del. State Bar Ass'n Comm. on Prof'l Ethics, Op. 2001-2 (2001); Iowa Sup. Ct. Bd. of Prof'l Ethics & Conduct, Op. 90-44 (1991); Mass. Bar Ass'n Comm. on Prof'l Ethics, Op. 94-5 (1994); Ass'n of the Bar of the City of New York Comm. on Prof'l and Judicial Ethics, Op. 1994-11 (1994); N.C. State Bar Ass'n Ethics Comm., Op. 215 (1995); N.H. Bar Ass'n Ethics Comm., Op. 1991-92/6 (1992); Wash. State Bar Ass'n Rules of Prof'l Conduct Comm., Informal Op. 91-1 (n.d.).
109. See Rothstein, supra note 34, at 244; Rothstein & Crump, supra note 13, § 2:13.
110. Rothstein, supra note 34, at 252.
111. See, e.g., Unif. R. Evid. 502(d)(1); Model Rules of Prof'l Conduct R. 4.1(b), 3.3 (2007).
112. For cases extending the crime-fraud exception beyond crimes and frauds, see Madanes v. Madanes, 199 F.R.D. 135 (S.D.N.Y. 2001) (holding that the crime-fraud exception includes any intentional tort that may undermine the adversary system); Irving Trust Co. v. Gomez, 100 F.R.D. 273 (S.D.N.Y. 1983) (holding that the crime-fraud exception embraces any unlawful conduct regardless of whether it constitutes fraud or any intentional tort-including reckless tortious behavior); Diamond v. Stratton, 95 F.R.D. 503 (S.D.N.Y. 1982) (holding that intentional infliction of emotional distress falls within the crime-fraud exception).
113. See, e.g., In re John Doe Corp., 675 F.2d 482 (2d Cir. 1982); Sound Video Unlimited, Inc. v. Video Shack, Inc., 661 F. Supp. 1482 (N.D. Ill. 1987).
114. See, e.g., United States v. Collis, 128 F.3d 313 (6th Cir. 1997) (requiring a prima facie showing upon which a reasonable person would have a reasonable basis to suspect the perpetration of a crime or fraud). There are many other formulations.
115. See cases cited on burden of proof in Rothstein & Crump, supra note 13, § 2:36.
116. See, e.g., United States v. Zolin, 491 U.S. 554 (1989);
117. In re Grand Jury Investigation, 974 F.2d 1068 (9th Cir. 1992) (explaining that the Zolin standard requires the court to speculate);
118. see also cases cited on in camera inspection in Rothstein & Crump, supra note 13, § 2:36.
119. A particularly graphic example of this is Clark v. State, 261 S.W.2d 339 (Tex. Crim. App. 1953). Cf. Collis, 128 F.3d313.
120. The situations that may be embraced include allegations by the client of malpractice in tort cases, allegations by the client of ineffective assistance of counsel in criminal cases, charges by the client of ethical violations before disciplinary tribunals, efforts both formal and informal to collect or resist the lawyer's fees, and others. See Model Rules of Prof'l Conduct R. 1.6(b)(3) cmts. 10, 11 (2007). The kinds of proceedings involving lawyers in which this might arise are suggested in Restatement (Third) of the Law Governing Lawyers §§ 5 (professional discipline), 6 (judicial remedies), 7 (judicial remedies available to a client or nonclient for lawyer wrongs), and 8 (lawyer criminal offenses) (2000). For further instances, see Restatement (Third) of the Law Governing Lawyers §§ 48 (professional negligence - elements and defenses generally), 49 (breach of fiduciary duty generally), 50 (duty of care to a client), 52 (the standard of care), 53 (causation and damages), 54 (defenses; prospective liability waiver; settlement with a client), 55 (civil remedies of a client other than for malpractice), 56 (liability to a client or nonclient under general law), and 65 (using or disclosing information in a compensation dispute). Ethics opinions relating to disclosure of client confidences in fee disputes are collected in the Annotated Model Rules, supra note 25, at 96-97. On the corresponding exception to privilege, see Uniform Rule of Evidence 502(d)(3). On use by an attorney of confidences of his ex-client to sue the exclient for wrongfully discharging the attorney,
121. see Rothstein, supra note 34, at 253.
122. See generally Unif. R. Evid. 502(d)(4); Restatement (Third) of the Law Governing Lawyers §§ 30 (a lawyer's liability to a third person for conduct on behalf of a client), 51 (duty of care to certain nonclients), 56 (liability to a client or nonclient under general law), 57 (nonclient claims - certain defenses and exceptions to liability), 58 (vicarious liability). There is some dispute (regarding both ethics and privilege) as to (1) whether disclosure is permitted when a third person (not the client) is making the allegations against the lawyer (or is otherwise in dispute with the lawyer) and, if so, (2) whether the matter nevertheless must somehow involve the lawyer's representation of the client whose confidential information is being disclosed. Annotated Model Rules, supra note 25, at 96-98;
123. Rothstein & Crump, supra note 13, § 2:37. The text of the Restatement rule seems to have neither restriction on disclosure but requires that the allegation or dispute arises out of the lawyer's representation of some client.
124. See Restatement (Third) of the Law Governing Lawyers § 64 (using or disclosing information in a lawyer's self-defense). "A lawyer may use or disclose confidential client information ... to the extent that the lawyer reasonably believes necessary to defend the lawyer or the lawyer's associate or agent against a charge or threatened charge by any person that [the lawyer, associate, or agent] acted wrongfully in the course of representing a client."
125. Id. Notice it says "a client," not "the client."
126. See, e.g., Quakers, supra note 16;
127. see also Rothstein & Crump, supra note 13, § 2:37.
128. See, e.g., Model Rules of Prof'l Conduct R. 1.6(b)(4) & cmt. 9.
129. See Evidence: Cases, Materials & Problems, supra note 42, at 876-80;
130. see also Swidler & Berlin v. United States, 524 U.S. 399 (1998).
131. As to privilege, see Uniform Rule Evidence 502(d)(2); Swidler & Berlin, 524 U.S. at 404-07;
132. Rothstein & Crump, supra note 13, § 2:18. There may, however, not be such an exception under ethics rules unless the court orders disclosure.
133. See, e.g., N.D. State Bar Ass'n Ethics Comm., Op. 95-11 (1995). Note that the Uniform Rule states that the exception applies in disputes over testate succession as well.
134. See Rothstein & Crump, supra note 13, § 2:21.
135. The client may direct the lawyer to third parties. Ethical duties would prevent disclosure if information obtained from the third party related to the representation of the client, but privilege usually would not, so if a court ordered disclosure, the ethical duty would be removed. See Model Rules of Prof'l Conduct R. 1.6(b)(6) (2007);
136. see also Rothstein & Crump, supra note 13, § 2:11. On the proposition that it may be covered by the ethical duty of confidentiality,
137. see, for example, Annotated Model Rules, supra note 25, at 90-91.
138. Rothstein & Crump, supra note 13, §§ 2:17, 2:34;
139. cf. Model Rules of Prof'l Conduct R. 1.7 cmt. 30.
140. See, e.g., Model Rules of Prof'l Conduct R. 1.6(a) cmt. 5, 1.2(a); Restatement (Third) of the Law Governing Lawyers §§ 23(2), 26, 27, 61, 62 (2000); ABA Comm. on Ethics and Prof'l Responsibility, Formal Ops. 01-421 (2001), 98-411 (1998); ABA Comm. on Ethics and Prof'l Responsibility, Informal Ops. 89-1530 (1989), 86-1518 (1986); Ark. Bar Ass'n Prof'l Ethics & Grievances Comm., Advisory Op. 96-01 (1996); Haw. Sup. Ct. Disciplinary Bd., Formal Ethics Op. 38 (1999); Kan. Bar Ass'n Comm. on Ethics/Advisory Servs., Op. 01-01 (2001). Included under this heading would be waiver of privilege by the attorney preparing or refreshing the memory of a lay or expert witness for deposition or trial, by use of privileged material on or off the stand.
141. See Rothstein, supra note 34, at 253.
142. See, e.g., Model Rules of Prof'l Conduct R. 1.6(b)(6) & cmt. 12; Restatement (Third) of the Law Governing Lawyers § 63.
143. See Model Rules of Prof'l Conduct R. 1.16.
144. See Model Rules of Prof'l Conduct R. 1.6 cmt. 5 (explaining that "a lawyer is impliedly authorized to make disclosures about a client when appropriate in carrying out the representation. . . . Lawyers in a firm may, in the course of the firm's practice, disclose to each other information relating to a client of the firm, unless the client has instructed that particular information be confined to specified lawyers").
145. See, e.g., Annotated Model Rules, supra note 25, at 89-90.
146. See, e.g., Banner v. City of Flint, 136 F. Supp. 2d 678 (E.D. Mich. 2000); ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 01-421 (2001) (noting that before consenting to disclosure, client must be informed of all the effects of disclosure).
147. The exposure to criminal and regulatory liability and extensive private lawsuits could be quite a bit more significant than might be realized.
148. Rothstein & Crump, supra note 13, § 2:36.
149. Rothstein & Crump, supra note 13, § 2:31.
150. Rothstein & Crump, supra note 13, §§ 2:29, 2:35.
151. Some of these are suggested in Rothstein, supra note 3, at 173-79.
152. See also supra notes 13, 14 and accompanying text.
153. See supra Part IV.C.
154. All the week allocations can be varied.
155. See supra note 29.
156. See supra note 3.
157. This problem could raise, inter alia, the question of whether the warning for a sophisticated client could be less than for a nonsophisticated one. See Model Rules of Prof 1 Conduct R. 1.0 cmt. 6 (2007).
158. See, e.g., Envtl. Defense v. Duke Energy, 127 S. Ct. 1423 (2007).
159. See, e.g., Model Rules of Prof'l Conduct R. 1.0(e) & cmt. 6, 1.4(a), 1.4(b) cmts. 5, 7, 1.7 cmt 30, 1.8(b). California, like a number of states, requires lawyers, to the extent reasonable under the circumstances, to "inform the client, at an appropriate time, of the [lawyer's] ability or decision to reveal information" to prevent a criminal act likely to result in death or substantial bodily harm. Cal. Rules of Prof'l Conduct R. 3-100(C)(2) (2004). If this kind of warning is required before disclosure to prevent death or bodily harm, a fortiori such a warning should be required before exposing a confidence to prevent fraud or property or financial injury.
160. See Model Rules of Prof'l Conduct R. 1.2(d) cmt. 13;
161. Utah State Bar Ethics Advisory Opinion Comm., Op. 97-06 (1997) (finding that a lawyer receiving payment of a fee by credit card from a client desiring to keep his identity confidential should warn the client that the credit card company will have that information). There is some law suggesting that clients should be warned by their lawyer that cell phone conversations may be intercepted. See supra note 46. This has heightened resonance today, at least in certain kinds of cases, because of increased government electronic surveillance in connection with terrorism.
162. See Learning to Live with Big Brother, Economist, Sept. 29, 2007, at 62 ("These days, data about people's whereabouts, purchases, behaviour and personal lives are gathered, stored and shared on a scale that no dictator of the old school ever thought possible.").
163. The student should also try to find any tort decisions there may be in the legal malpractice area holding a lawyer liable for failure to warn of potential abrogation by the lawyer of client confidentiality. See supra note 21 and accompanying text. For purposes of reasoning by analogy, the student should bring forward medical, psychiatric, and legal malpractice decisions involving failure to warn a patient or client of risks of treatment or risks incident to following certain legal advice. Cases of failure to disclose to the patient or client conflicts of interest would also be relevant.
164. See, e.g., Karp v. Cooley, 493 F.2d 408 (5th Cir. 1974);
165. Canterbury v. Spence, 464 F.2d 772 (D.C. Cir. 1972);
166. Moore v. Regents of the Univ. of Cal, 793 P.2d 479 (Cal. 1990);
167. Model Rules of Prof'l Conduct R. 1.7(b) & cmts. 18, 19.
168. In the discussion at this point, the teacher may wish to recall the admonition repeated by the Supreme Court in Upjohn v. United States, 449 U.S. 383 (1981);
169. Swidler & Berlin v. United States, 524 U.S. 399 (1998);
170. and Jaffee v. Redmond, 518 U.S. 1 (1996) to the effect that, if the point is to encourage communications, a qualified privilege is no better than no privilege. In addition, the question could be raised with the students here, as to whether there was always an inherent flaw in the reasoning of Upjohn. Would employees be encouraged by the privilege to communicate forthrightly with corporate counsel about self-damaging topics, when they know that the privilege is the corporation's, not theirs, to raise or waive as the corporation sees fit? Was Upjohn suggesting this be hidden from the employees?