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The author is a U.S. district judge in the Northern District of Illinois, Chicago, and an associate editor of Litigation.
Your case is in Illinois. The applicable law is that of Texas. Your associates find law that supports your position. They also find a Texas appellate decision that goes the other way. You have not been impressed with your opponent. You suspect he may not find the decision. So, what do you do? Wait and see if he cites the case? Or disclose it and explain why the case is wrongly decided or distinguishable?
If you are like most litigators, your decision may be a calculated one. How likely is the decision to come to light? How important is it? What will be my client’s reaction if I do disclose it and we lose based on the case? Why would I even think about doing my opponent’s work for him?
In fact, long-standing ethical rules require that you disclose the existence of the case if your opponent does not. Rule 3.3(a)(2) of the American Bar Association (ABA) Model Rules of Professional Conduct states that a lawyer shall not knowingly “fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel.” A second rule, Rule 3.3(a)(1), states that a lawyer shall not knowingly “make a false statement of fact or law to a tribunal or fail to correct a false statement of . . . law previously made to the tribunal by the lawyer.”
The Model Rules have been adopted by almost every jurisdiction. They are not radical or new. Model Rule 3.3(a)(2) was carried over without change in 1983 from the earlier Model Code of Professional Responsibility. A 1949 ABA formal opinion, discussing a predecessor rule adopted by the ABA in 1908, required lawyers to disclose adverse legal authority on any legal proposition on which the lawyer expressly relied. The test is as follows:
Is the decision which opposing counsel has overlooked one which the court should clearly consider in deciding the case? Would a reasonable judge properly feel that a lawyer who advanced, as the law, a proposition adverse to the undisclosed decision, was lacking in candor and fairness to him? Might the judge consider himself misled by an implied representation that the lawyer knew of no adverse authority?
ABA Comm. on Prof’l Ethics & Grievances, Formal Op. 280 (1949).
The official comments to Rule 3.3 emphasize that the rules require lawyers “as officers of the court to avoid conduct that undermines the integrity of the adjudicative process.” The rules are in the section of the Model Rules entitled “Candor Toward the Tribunal.” The duty is to the court, which is why opposing counsel’s failure to find the case is irrelevant. The point is that a lawyer, while an advocate, has a duty not to allow the court “to be misled by false statements of law.”
Rule 3.3(a)(2) has a number of limitations. It does not require a lawyer to disclose a decision of the Supreme Court of Alaska in the case in Illinois in which Texas law is controlling. For that matter, it does not require the lawyer to disclose a case involving Illinois law if it is clear that it is Texas law that decides the issue. Rule 3.3(a)(2) also does not require a lawyer to inform the court about a decision that is not “directly adverse” to his or her client’s position. That limitation may be argued to swallow the rule in almost any case. If you can argue that the Texas appellate decision is distinguishable, can it be directly adverse?
The easy case is a decision that expressly overrules, or even reverses, the case you are relying on. If a lawyer relies on a case (that is, cites it in support of his or her position) that has been reversed by a higher court or overruled or vacated, he or she has violated ABA Rule 3.3. Whether or not a court, discovering the misconduct, refers to the rule, the lawyer is subject to sanctions. See, for example, Kawitt v. United States, 842 F.2d 951, 954 (7th Cir. 1988), in which a lawyer plaintiff was sanctioned for citing a court of appeals decision that had been vacated by an en banc court, although the government had brought the ruling to the lawyer’s attention, and Rodgers v. Lincoln Towing Service, Inc., 771 F.2d 194, 205 (7th Cir. 1985), in which the court sanctioned a lawyer for citing Seventh Circuit authority that had been overruled by the Supreme Court.
Almost as glaringly subject to the rule to cite adverse authority are cases in which a court has ruled against a lawyer’s client on the same issue. If a federal court, for example, has remanded a case to state court on the ground that the addition of a defendant destroyed diversity and that there was no evidence of fraudulent joinder, counsel may not fail to bring the authority (from either the same district judge or others in his or her district) to the attention of the deciding court in a second case. Matthews v. Kindred Healthcare, Inc., 2005 WL 3542561 (W.D. Tenn. 2005). Only slightly less obvious are cases in which counsel fails to note authority that, unless overruled, would control the disposition of a case. An example is Jewelpak Corp. v. United States, 297 F.3d 1326, 1333 & n.6 (Fed. Cir. 2002), in which counsel failed to discuss a prior opinion by the same court of appeals that had held that publication in the Federal Register was not required to extinguish a prior established and uniform practice. The court noted “dismay” over counsel’s failure to cite the earlier case, stating that “officers of our court have an unfailing duty to bring to our attention the most relevant precedent that bears on the case at hand—both good and bad—of which they are aware.” Failure to cite controlling precedent was noted by the same court two years earlier in Amoco Oil Co. v. United States, 234 F.3d 1374, 1378 (Fed. Cir. 2000).
While you would think that lawyers would understand that their ethical duties to the court include the duty to cite directly contrary authority where the other side is acting pro se, federal judges have learned that is not always the case. Thus, in Riley v. Dorton, 93 F.3d 113, 116 n.4 (4th Cir. 1996), the court of appeals, reversing a district court, noted that the state had failed to cite to the district court controlling authority holding that the use of force in a custodial interrogation does not require injury to violate the Constitution. The court referred to the Model Rules in commenting on the ethical violation.
Federal judges frequently face legal questions in which laws of various jurisdictions may inform their decisions. An example is the law governing a successor corporation’s liability for punitive damages. Ordinarily, the successor corporation in a merger is liable for the liabilities and torts of the predecessor corporation. In a case in the Northern District of Illinois, Krull v. Celotex Corp., 611 F. Supp. 1985 (N.D. Ill. 1985), a defendant argued: “Other jurisdictions, which have litigated the issue of a successor corporation’s liability for punitive damages, have consistently held successor corporations not to be liable. . . .” Judge Shadur found this statement to be false. The lawyers had not cited cases in which courts had found to the contrary. At least one of the cases not cited was from the jurisdiction whose law was controlling. The failure violated counsel’s duty of candor.
The use of words such as “consistently held” to convince a judge that there is universal agreement where there is at least some respectable dissent has become, unfortunately, more common. Recently, I was presented with unpublished orders in various cases, all involving trademark theft, of awards of astronomical amounts. But when I asked if every judge to be presented with a proposed order for hundreds of millions of dollars (defendants had not appeared in any of these cases) had entered the requested judgment, I learned that a number had indeed questioned the propriety of the requested damage amount and had reduced it significantly. At least counsel was honest when questioned. Still, language in briefs and motions that implies universality when it is not so is deceptive.
None of these examples involves authority that can seriously be argued not to be “directly adverse.” Lawyers have had mixed results when courts have discovered omitted authority and the lawyers have argued innocence on this basis. In an Alaska case, sanctions were imposed against a lawyer who failed to tell the appellate court in a criminal case about an Alaska Supreme Court case that, contrary to the lawyer’s argument on the merits, had held in an administrative license revocation case that a conviction for driving under the influence counted toward a decision to revoke a driver’s license. The lawyer argued that a lower court judge had agreed that the civil license revocation decision should not control in a criminal proceeding. But the Alaska appellate court noted the difference between “controlling authority” and “controlling jurisdiction.” There was no question but that the Alaska Supreme Court decision was directly contrary and in the controlling jurisdiction. Thus, the lawyer could not avoid his duty to bring the case to the court’s attention. Tyler v. State, 47 P.3d 1095 (Alaska Ct. App. 2001). The court referred back to the 1949 ABA Formal Opinion 280, agreeing with its language that “directly adverse” means a decision on “any proposition of law on which the lawyer expressly relies, which would reasonably be considered important by the judge sitting on the case.” 47 P.3d at 1104.
The relationship between Rule 3.3 of the Model Rules and Federal Rule of Civil Procedure 11 has been discussed in several holdings. The Seventh Circuit in Mannheim Video, Inc. v. County of Cook, 884 F.2d 1043 (7th Cir. 1989), upheld a trial judge’s denial of sanctions under Rule 11 against attorneys who had failed to cite directly relevant contrary authority, deciding that the decision to impose sanctions was up to the district judge, acknowledging that the time required to make the findings required under Rule 11 sometimes makes it impractical to do so. The court noted, however, that it disagreed with counsel’s argument that he could “pretend that potentially dispositive authority against a litigant’s contention does not exist.” Id. at 1047.
The Ninth Circuit refused to use Rule 11 to impose sanctions in a case in which the trial judge found that a law firm had failed to cite obviously relevant authority. When Judge Schwarzer required the firm to explain why sanctions were not appropriate under Federal Rule of Civil Procedure 11, the firm explained that it believed that a valid argument for a change in existing law supported its underlying argument. It also represented the law of Minnesota, where the case originated, as being definitely established, contrary to the conclusion of Judge Schwarzer. The trial judge held that while the arguments could be resolved in favor of counsel’s client on the merits, this did not excuse the violation of Rule 3.3 of the Model Rules, which he found to be incorporated in recently revised Rule 11. The Ninth Circuit disagreed, although it did not address the argument that the offending attorneys undoubtedly knew about the law they failed to cite. Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531 (9th Cir. 1986). On rehearing, five judges dissented in a strongly worded opinion. 809 F.2d 584 (9th Cir. 1987). Their dissent concluded with the reminder that under Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980), the district court had authority under its inherent power to impose sanctions for bad faith that was separate from the requirements of Rule 11. In later decisions, that circuit has stated that judges have power to impose sanctions under 28 U.S.C. § 1927 for even reckless misstatements of law if coupled with a bad purpose. Fink v. Gomez, 239 F.3d 989 (9th Cir. 2001).
When confronted by failure to cite relevant authority and threatened by sanctions, counsel invariably say they thought the authority was distinguishable. Courts have not been consistent in ruling on this argument. Thus, the Seventh Circuit in Mannheim Video, Inc. v. County of Cook, 884 F.2d 1043 (7th Cir. 1989), called counsel’s argument for failing to cite authority on this ground “an exercise in gall” given the authority and arguments actually made. Yet, in Thompson v. Duke, 940 F.2d 192 (7th Cir. 1991), that court, over one dissent, excused a failure to cite a Supreme Court case involving pretrial detainees rather than post-trial detainees because a good-faith argument could be made for an exception to the earlier holding. The court did say, however, that the failure to cite controlling authority, or potentially controlling authority, was sanctionable. The conduct in question appeared to be principally whether counsel was justified in even filing his complaint, because the authority in question was brought to the court’s attention immediately by the filing of a motion for summary judgment. The court in Jorgenson v. County of Volusia, 846 F.2d 1350 (11th Cir. 1988), was less forgiving when a lawyer failed to cite two relevant cases on a motion for a temporary restraining order. The court acknowledged that counsel are entitled to argue their own interpretations of cases, but the court found the attempts to distinguish the two cases “simply post hoc efforts to evade the imposition of sanctions.” Id. at 1352.
A recent case illustrates the problems for trial judges and for lawyers when lawyers fail to cite authority that is certainly important and may be dispositive. The plaintiffs filed a class action in federal court in Illinois alleging that a bank breached a promise to modify mortgage loans under the federal Home Affordable Modification Program and engaged in deceptive conduct under Illinois law. The bank moved to dismiss, arguing that the named plaintiffs had not met the requirements for modification according to the lender. In its brief in support of dismissal, the bank failed even to cite a recent Seventh Circuit decision in another mortgage case that rejected the same positions now being argued. Opposing counsel brought the case to the court’s attention. The court denied the motion to dismiss, noting all the ways that the Seventh Circuit decision was plainly applicable on both the federal and state claims. The court also required the attorneys who wrote the brief arguing that the case was subject to dismissal to appear personally and to explain in writing why they should not have to pay counsel’s fees, have their pro hac vice status (in the case of certain attorneys) revoked, and be reprimanded. Thul v. Indymac Mortg. Servs., No. 12 C 6380 (N.D. Ill. Jan. 2, 2013). In response, the attorneys immediately settled the case and agreed to pay part of the settlement themselves. They argued, nevertheless, that they had thought they could distinguish the Seventh Circuit decision from their case, and so decided not to bring the case to the court’s attention. Judge Kennelly did not agree, although he decided that the settlement, payment by the firm of part of that settlement, and professional censure pursuant to his opinion were sufficient sanction, following their apology and promise never to engage in similar conduct in the future.
Lawyers’ ethical obligations under the Model Rules of Professional Conduct to bring to the court’s attention cases that are potentially adverse to the lawyer’s position are clear in almost all cases. Going back to the old 1949 ethics opinion, cited in some decisions, is the failure to cite the authority likely to make the judge believe he or she has been misled? Would a lawyer, or an appellate court, reasonably expect that the trial judge would discuss the authority in deciding the issue or case before it? If so and if the failure to inform the judge was deliberate (also almost always easily ascertainable), the conduct should be sanctioned.
Appellate courts are never happy with trial courts that have missed a crucial issue or a case or statute relevant to the issue. They should make it clear that lawyers must live up to their ethical obligations to reasonably inform trial judges of relevant authority and that lawyers are not, even under a claim that a clearly relevant case could be distinguished, excused from misleading a trial judge as to the law applicable to a case. Lawyers are advocates for their clients. They are not good advocates if their chances of winning a case are dependent on opposing counsel or a judge not finding authority that should at least be discussed. And it must be embarrassing to have to go back to your client and say that you either missed this case that the judge has decided is important to the decision or decided not to bring it to the judge’s attention. But lawyers also have a duty to the court, and to their profession. That duty is not served by trying to hide existing law. Nor are their reputations.