YourABA: December 2013
YourABA December 2013 Masthead

Stalled negotiations: Communication tactics

By Susan J. Michmerhuizen
ETHICSearch Counsel

and

Peter Geraghty
Director, ETHICSearch

You represent a client in a contract dispute. The matter has been in settlement talks for several weeks. Your client is willing to settle but is concerned that he is being gamed. The two parties to the lawsuit are a high-brow restaurant owner and a seafood supplier who are stalled over additional damages the restaurant owner claims when he had to cancel a special promotion featuring fresh Maine lobster.

The negotiations have had a strange rhythm in your opinion, with days passing after your client makes a proposal and slow comebacks from the other side. You think the other lawyer, whom you know to be very busy, is not passing on your offers and counteroffers to the client. This delay is putting pressure on your client, who needs cash flow and runs a high overhead business. He is starting to get restless and hears gossip from other restaurateurs who report that the seafood distributor has not received any response from your side.

You know you can’t contact the other side directly, but you are considering sending a follow-up inquiry repeating your earlier offer to opposing counsel in case it got lost in his desk, and you wonder about simply copying the opposing party on that same communication. In the alternative, you are considering advising your client to communicate with the opposing party directly.

Can you cc the opposing party?

Can you counsel your client to communicate directly with the opposing party?

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ABA Model Rule 1.4 (Communications) governs communication between a lawyer and client. Specifically, it states in subparagraph (b): A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. See also the second sentence of Comment (2) to Rule 1.4 that states as follows:

… For example, a lawyer who receives from opposing counsel an offer of settlement in a civil controversy or a proffered plea bargain in a criminal case must promptly inform the client of its substance unless the client has previously indicated that the proposal will be acceptable or unacceptable or has authorized the lawyer to accept or to reject the offer.

See also ABA Model Rule 4.2 (Communication with Person Represented by Counsel) that states as follows:

In 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, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.

The two exceptions, referred to as the “authorized by law” exception and the “court order exception” are not applicable here.

Opposing party may not waive the protections of Rule 4.2

Comment [3], added to Model Rule 4.2 in 2002, notes that the rule “applies even though the represented person initiates or consents to the communication.” This new comment “makes clear that the protections accorded by Rule 4.2 may not be waived by the client.”


ABA Formal Opinion 92-362
In 1992, the ABA Standing Committee on Ethics and Professional Responsibility considered a similar fact pattern in Formal Ethics Opinion No. 92-362 Contact With Opposing Party Regarding Settlement Offer (1992) and concluded that a lawyer may not copy the opposing party on correspondence sent to opposing counsel. Summarizing earlier ABA ethics opinions on this topic, the committee stated:

… In 1975, the Committee again visited the issue in Informal Opinion 1348. That opinion interpreted DR 7-104(A)(1) of the Model Code, which as has been pointed out was in material respects identical to Rule 4.2. The question posed in Informal Opinion 1348 was whether, under circumstances similar to those assumed in this Opinion, the offering party's lawyer could send to the opposing party a carbon copy of letters sent to the offeree's lawyer submitting settlement offers, as a way of ensuring that the opposing party learned of those offers.

The Committee opined that sending such a copy would be ethically impermissible under the Rules, “even though [offeror’s lawyer] believes that [offeree’s lawyer] is not relaying settlement offers submitted in connection with the litigation in question.” The Committee suggested two alternative courses to the offeror’s lawyer under these circumstances: (1) the course suggested by the Committee majority in Informal Opinion 985 (filing an offer of judgment, and serving a copy directly on the adverse party, if legally permitted in the jurisdiction, provided a copy is concurrently served on the adverse party's lawyer and the service on the adverse party is done without improper motive or purpose); and (2) sending to the court a communication similar to the one containing the settlement offer sent to counsel for the offeree. – ABA Formal Opinion 92-362

For a further discussion of Formal Opinion 92-362, See the August 2007 Eye on Ethics column titled “Party Lines”.

State Bar Ethics Opinions

State bar ethics opinions are also unanimous that such contact, even though by mail and duplicative of what was sent to the other lawyer is forbidden. See Illinois State Bar Association Opinion 92-3 (1992) (lawyer whose client has been sued by the city may not send copies of the lawyer’s correspondence with the city attorney about the suit to city officials who are represented by counsel in the matter); State Bar of Michigan Opinion RI-322 (2001) (lawyer may not send a written communication to an opposing counsel’s client without the opposing counsel’s consent, even if the lawyer simultaneously sends a copy of the communication to opposing counsel); Pennsylvania State Bar Opinion 91-105 (undated) (lawyer in a dispute against a corporation may not send a letter directly to the chief executive officer, even if the lawyer is convinced the corporation’s counsel is not forwarding communications to the appropriate corporate officials).

Email: Reply All

Use of email over U.S. mail does not change the analysis. However, where a lawyer has initiated an email communication and copied her own client, this may amount to an implied consent to the opposing lawyer including the client in a reply, by using the reply all function. See, Association of the Bar of the City of New York Opinion 2009-1 (undated) (lawyer may not simultaneously copy to lawyer and client on an email without risking violation of the anti-contact rule. Consent to use the “reply to all” function, limited to the subject matter of the original e-mail, may be inferred depending on the circumstances of the initial email; a collaborative context is less ripe for over-reaching than one that is adversarial).

No Response at All

If the breakdown in negotiations in a litigated matter becomes pronounced, State Bar of Arizona Opinion 2002-02 states that the lawyer must seek guidance from the court or agency hearing the dispute (2002) (Lawyer representing clients in an administrative proceeding should not send copies of documents directly to an opposing party who is represented by counsel without that counsel’s consent, unless required by specific administrative rule or statute, after making reasonable efforts to communicate with opposing counsel, lawyer should seek instruction from the court or administrative law judge before initiating direct contact with the party.)

Advising Client to Talk to Opposing Party Directly

Formal Opinion 92-362 addressed this issue; the headnote of the opinion states as follows:

A party’s lawyer who makes an offer of settlement to the lawyer for the opposing party may not under Model Rule 4.2 inquire of the offeree-party whether the offer has been communicated to the offeree, even if the offeror’s lawyer entertains serious doubts that it has been so communicated.

The Model Rules do not, however, forbid the offeror’s lawyer, in fulfilling the lawyer’s duty to counsel the client, to advise the offeror-client about the latter’s ability to communicate on the matter directly with the offeree-party or about the lawyer’s views as to the most efficacious method of doing so.

Although Opinion 92-362 did state that a lawyer could advise a client that he could communicate directly with the opposing party, it expressly left open the question of what the lawyer can say to the client about the subject matter of the conversation.

… The prohibition of this Rule against a lawyer's violating the Rules through the acts of another raises a number of questions about, inter alia, what a lawyer may or may not say to the lawyer's client, sufficiently broad and complex to require separate attention. Leaving for another day any opinion on that broader subject, the Committee concludes that in the factual setting of this Opinion, where the purpose of the communication is to ascertain whether a settlement offer has been communicated to the other party, Rule 8.4(a) should not be read to preclude the lawyer's fulfilling the lawyer's duty, reasonably expected by the client, fully and fairly to advise the client of the lawyer's best professional judgment as to the exercise of the client's rights in furtherance of the representation.

ABA Formal Opinion 11-461

ABA Formal Opinion 11-461 (Advising Clients Regarding Direct Contacts with Represented Persons)(2011) addressed the question that 92-362 left for another day.

… Even though parties to a matter are represented by counsel, they have the right to communicate directly with each other. 3 In addition, a client may require the lawyer’s assistance and a lawyer may be reasonably expected to advise or assist the client regarding communications the client desires to have with a represented person. A client may ask the lawyer for advice on whether the client may lawfully communicate directly with a represented person without their lawyer’s consent or their lawyer being present. The comments to Rules 4.2 and 8.4(a) state that such advice is proper. 4 Even if the client has not asked for the advice, the lawyer may take the initiative and advise the client that it may be desirable at a particular time for the client to communicate directly with the other party. – ABA Formal Opinion 11-461 (2011).

As the opinion acknowledges, however, some jurisdictions disapprove of lawyers advising their clients of their right to communicate with the opposing party. (See footnote 9 of the Opinion.) Earlier state bar ethics opinions took a skeptical view of the idea. Illinois State Bar Association Opinion 92-3 (1992) stated that a client may send copies of correspondence to city officials who are plaintiffs in a suit against him, but the lawyer must avoid assisting the client, and Pennsylvania State Bar Opinion 91-105 (undated) said that a lawyer is prohibited from recommending that his client initiate contact with the other side.

See also the annotations to Rule 4.2 as they appear in the seventh edition of the “ABA Annotated Model Rules of Professional Conduct” that states as follows:

… Rule 4.2 does not restrict participants in a matter from communicating with each other directly, whether or not they have their own lawyers.

In addition, Comment [4] specifies that “a lawyer is not prohibited from advising a client concerning a communication that the client is legally entitled to make.” See ABA Formal Ethics Op. 92-362 (1992) (lawyer who has serious doubts whether settlement offer he made to opponent’s lawyer has been communicated to offeree may not ask offeree, but may tell client that client is free to ask).

A lawyer may not, however, “mastermind” a client’s communication with a represented person. See Holdren v. Gen. Motors Corp., 13 F. Supp. 2d 1192 (D. Kan. 1998) (counsel for plaintiff in employment suit advised client about obtaining affidavits from other employees and, at client’s request, showed client how to draft affidavit; saying counsel had “stepped over [the] line,” court issued protective order) …

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As tempting as it may be, lawyers should not copy the opposing party on communications sent to the opposing counsel even if the lawyer is convinced that opposing counsel has not been communicating with his client. Whether a lawyer may advise his client that he can communicate directly with the opposing counsel may vary state by state, and in those jurisdictions that permit a lawyer to do so, just what the lawyer can say to his client regarding the substance of the conversation may also vary. As always, check your local rules of professional conduct, ethics opinions and case law.

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