First, it is important to understand the history of the prohibition on threatening criminal charges in a civil matter The ABA Model Code of Professional Responsibility, the predecessor to the Model Rules of Professional Conduct, dictated that “[a] lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter.” Model Code of Prof’l Responsibility DR 7-105 (Am. Bar Ass’n 1980) (emphasis added). The Model Rules of Professional Conduct did not incorporate this provision, and its omission was purposeful. The drafters concluded that “extortionate, fraudulent, or otherwise abusive threats were covered by other, more general prohibitions in the Model Rules.” ABA Comm’n on Ethics & Prof’l Responsibility, Formal Op. 92-363 (1992). In particular, the ABA indicated that five provisions of the new Model Rules adequately prohibited threatening criminal charges solely to gain an advantage in a civil matter:
1. Model Rule 8.4(b) declares that it is professional misconduct to “commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects” The ABA considers “extortionate conduct” as a violation of this provision.
2. Model Rule 8.4(d) and Model Rule 8.4(e) define professional misconduct as “conduct that is prejudicial to the administration of justice” or implying that one has “an ability to influence improperly a government agency or official.”
3. Model Rule 4.4 forbids conduct that has “no substantial purpose other than to embarrass, delay, or burden a third person.”
4. Model Rule 4.1 requires a lawyer to be truthful when dealing with others on a client’s behalf.
5. Model Rule 3.1 prevents a litigant from asserting frivolous claims.
Numerous states that did not adopt the new Model Rules incorporated provisions akin to DR 7-105. See, e.g., Ill. Rules of Prof’l Conduct R. 8.4(g) (“It is professional misconduct for a lawyer to present, participate in presenting, or threaten to present criminal or professional disciplinary charges to obtain an advantage in a civil matter.”). Therefore, it is safe to say that, at the very least, every jurisdiction, either expressly or implicitly, bars threatening criminal charges solely to obtain an advantage in a civil matter. With that being the case, may an attorney ever broach the possibility of criminal charges in conjunction with a civil dispute?
Three Conditions Necessary to Raise the Prospect of Criminal Charges Without Violating the Model Rules
The ABA has outlined three preconditions that an attorney must satisfy before raising the prospect of criminal charges in conjunction with a civil dispute, without violating the Model Rules of Professional Conduct. The analysis in this section outlines the American Bar Association’s position on this ethical issue. Each jurisdiction interprets the propriety of raising criminal charges in the context of a civil claim differently, so it is imperative that an attorney consult the ethical rules of his or her jurisdiction.
First, the proposed criminal charges must be related to the civil matter. This requirement, referred to as the relatedness requirement, protects an attorney from accusations of “compounding.” The laws of a number of states prohibit “compounding” a crime, often defined as the acceptance of pecuniary benefit in exchange for agreeing not to prosecute a crime or agreeing to hamper the prosecution. See, e.g., Colo. Rev. Stat. § 18-8-108; Nev. Rev. Stat. § 199.290; Black’s Law Dictionary 329 (10th ed. 2014). The relatedness requirement aids an attorney in avoiding a compounding charge because it enables the use of an affirmative defense. For instance, under the Modern Penal Code, an affirmative defense to compounding is available if the pecuniary benefit received for not reporting the conduct to the authorities does “not exceed an amount which the actor believed to be due as restitution or indemnification for harm caused by the offense.” Model Penal Code § 242.5 (Am. Law. Inst.). In contrast, the ABA has stated that introducing “an unrelated criminal issue solely to gain leverage in settling a civil claim furthers no legitimate interest of the justice system, and tends to prejudice its administration,” thus violating Model Rule 8.4(c). While it is often permissible to value potential criminal liability as part of a civil claim, it is impermissible to do this if the criminal liability springs from conduct completely unrelated to the civil claim.
Second, the attorney must believe that the civil claim and associated criminal charges are meritorious based on the law and the facts of the case. Ignoring this requirement exposes an attorney to potential claims for violating Model Rule 4.4’s prohibition against conduct that has “no substantial purpose other than to embarrass, delay, or burden a third person” and Model Rule 3.1’s proscription of asserting frivolous claims.
Third, the lawyer must not attempt to exert or suggest improper influence over the criminal process. For example, many cease-and-desist letters state that an individual can avoid criminal charges by acquiescing to the client’s demands. An unrepresented party could conclude that the attorney who drafted this letter has disproportionate or improper authority over the criminal or judicial process. Disregarding this requirement could lead to a complaint for violating Model Rule 8.4(d) and Model Rule 8.4(e).
How Attorneys May Violate the ABA or State Rules of Professional Conduct
While these three preconditions seem straightforward, it is easy to envision a lawyer violating them in the pursuit of satisfying a client. An attorney may violate the Model Rules in drafting a cease-and-desist letter that threatens criminal charges where there is no possibility of criminal charges based on the facts and law. For example, in a trademark misappropriation case, the Third Circuit sternly warned the drafters of a cease-and-desist letter who threatened criminal charges in a civil dispute. Green v. Fornario, 486 F.3d 100, 102 n.1 (3d Cir. 2007) (referencing the cease-and-desist letter in the Facts and Procedural History section of the opinion). In Green, the attorneys advised the potential infringer that their client would “refer [Fornario’s] conduct to the appropriate criminal authorities.” The court deemed this improper because the Lanham Act is a purely civil statute and the parallel criminal counterfeiting statute was inapplicable to the case. The court noted that the drafters’ conduct likely violated a Philadelphia Bar Association ethics opinion, and the court commented further that “threatening criminal prosecution . . . where no criminal reference is objectively possible or subjectively contemplated is a most unwise tactic.” Id. In this instance, the drafters of the cease-and-desist letter failed to determine whether the criminal charges were meritorious and therefore arguably violated the Model Rules.
When drafting cease-and-desist letters, attorneys also expose themselves to potential ethical violations if they are unaware of the prohibition against threatening criminal charges solely to obtain an advantage in a civil dispute. For instance, the Tennessee Supreme Court reprimanded an attorney who drafted a cease-and-desist letter threatening criminal charges. Tenn. Bd. of Prof’l Responsibility, In re Brent J. McIntosh, No. 2013-2236-3-WM (Feb. 11, 2014). In that case, the attorney’s client, a nurse practitioner, received a letter from a former patient alleging medical malpractice. The former patient then promised to report the nurse practitioner’s conduct to various governmental agencies if her settlement demand was not met. The attorney, believing this conduct constituted extortion, drafted a response letter requesting that the former patient “[c]ease and desist any actions related to this matter or face civil and possible criminal liability.” At the attorney’s disciplinary hearing, an expert on Tennessee criminal law agreed with the attorney’s assessment that the former patient’s letter satisfied all the elements of extortion under Tennessee law. Nevertheless, the Tennessee Supreme Court reprimanded the attorney for using a threat of criminal charges to obtain an advantage in a civil matter. The court held that the use of the phrase “any actions” seemed to threaten criminal charges even if the former patient pursued recovery through the proper channels.
The few examples discussed above should serve as cautionary tales for attorneys drafting cease-and-desist letters. Attorneys must ensure that (1) the potential criminal charges are related to the civil matter, (2) the civil claim and associated criminal charges are meritorious based on the law and the facts of the case, and (3) their cease-and-desist letter does not suggest the attorney or client has improper influence over the criminal process. These examples should also lead the prudent attorney to consult local ethics rules, ethics commission opinions, and ABA resources before threatening, or even mentioning, the prospect of criminal charges in conjunction with a civil claim. Forgoing any of these steps could expose an attorney to an ethics complaint or disciplinary action for violating the Rules of Professional Conduct.
Joshua A. Kurtzman is an associate at Riley Safer Holmes & Cancila LLP in Chicago, Illinois.