Commission on Evaluation of Rules of Professional Conduct

Meeting Minutes
Friday, February 5 and Saturday, February 6, 1999
Los Angeles, California

Liaison:

Seth Rosner, Board of Governors

Guests:

Mary M. Devlin, ABA Regulation Counsel
Donald W. Hilliker, ABA Standing Committee on Ethics and Professional Responsibility
Marshall Jarrett, United States Department of Justice
T. Richard Kennedy, Chair, ABA Standing Committee on Professional Discipline
George A. Kuhlman, ABA Ethics Counsel
Burnele V. Powell, Chair, Center for Professional Responsibility Coordinating Council

Reporters:

Nancy J. Moore
Thomas D. Morgan
Carl A. Pierce

Staff:

Jeanne P. Gray
Susan M. Campbell
Charlotte K. Stretch

Observers:

See attached

The Commission meeting was held on Friday, February 5 and Saturday, February 6, 1999 from 8:30 a.m. to 4:00 p.m. in Los Angeles, California.

I. Minutes of Previous Meetings

The minutes of the Commission meeting of December 11 - 12, 1998 and the Rule 4.2 Subcommittee conference call of January 21, 1999 were approved as submitted.

II. Chair's Report

Chief Justice Veasey advised the Commission that the Standing Committee on Ethics and Professional Responsibility and the Ad Hoc Committee on Judicial Campaign Finance Practices are seeking comments regarding their reports on lawyers' political contributions and judicial campaign finance practices. They currently plan to present their proposals at the August 1999 Annual Meeting. Several members suggested that the ABA defer consideration of any proposals regarding lawyers' political contributions until there has been greater opportunity for discussion. The Commission agreed that it would not be possible to consider all of the relevant issues prior to August, especially in view of the fact that alternate rules have been proposed. The Commission requested that the Chair and staff convey its view to the Ethics Committee.

The Commission discussed the upcoming public dissemination of several draft rules for comment and agreed that the Commission should do whatever possible to encourage bar associations, ABA sections, interested organizations, etc., to send comments. An observer suggested that the Commission emphasize that comments from bar associations and other groups outside the ABA are wanted.

T. Richard Kennedy, chair of the ABA Standing Committee on Professional Discipline, visited the meeting to discuss that Committee's proposal to add law firm discipline to the Model Rules for Lawyer Disciplinary Enforcement. He informed the Commission that two states, New York and New Jersey, have extended discipline to law firms. He advised the Commission that at its meeting on February 6 the Discipline Committee will discuss deferring the proposal until the Annual Meeting. The Commission agreed that deferral to study the issues was a good idea and informed Mr. Kennedy that the issue will be on the Commission's agenda in May.

The Commission agreed to hold a meeting on December 10 - 11, 1999.

III. Rule 1.6

1.6(b)(2) & (3)

An observer suggested that the Commission clarify what a lawyer is permitted to do under subparagraphs (b)(2) and (b)(3). There was some concern that the lawyer was encouraged to do more than simply notify the victims of the client's fraud. The Reporter pointed out that the rule only permits a lawyer to take action to the extent necessary to accomplish the purpose indicated. A member argued in favor of deleting the words "prevent," "mitigate," and "rectify." The Commission was not in favor of that change. The Commission agreed to clarify in the comment that the lawyer should remonstrate with the client, when feasible, prior to making any permitted disclosures.

1.6(c)

The Commission agreed that references to specific rules should be deleted and the paragraph should be revised to read, "law, court order, or these Rules."

Comments

In response to a question, the Reporter advised that the comment on corporate structure was moved to Rule 1.13.

The Commission reviewed several editorial suggestions from members and agreed to make the following changes to the comments:

[2] delete the comment.

[3] replace the word "maze" with the word "complex" and move the word "is" next to "deemed."

[6] delete the comment.

[8] move the "except" clause to the beginning of the comment and add the word "sometimes" in the examples.

[9] combine [8] and [9].

[10] add a new sentence on remonstrating with the client; retain the reference to sexual abuse in the comment; use the term "harm" instead of "injuries" after the second sentence.

[11] fix the syntax in the fourth sentence.

[12] change the last sentence to read, "necessary to enable the affected persons to attempt to recoup their losses."

[14] The members were unsure how this comment affected hotlines, in which no attorney-client relationship is formed but some disclosure of confidential information might occur. Several members felt that the comment applied only to situations where a lawyer is consulting another lawyer about the lawyer's own behavior. The Commission asked the Reporters to delete the last sentence and insert the word "confidential" prior to the word "legal" in the first sentence.

[17] substitute the words "disclose as" for "take preventive action" in the last sentence.

The Commission agreed that Rule 1.6 was ready to be disseminated for public comment with the changes discussed above.

IV. Rule 1.7

Comments

[6] The Commission agreed to delete the fourth sentence (referring to a "disinterested lawyer") because it does not track the language of the rule and is thus potentially confusing.

A member pointed out that the reference to Rule 1.10 at the end of the comment would be more appropriately characterized as a comparison ("cf.")

The Reporter agreed with a suggestion that the term "multiple-client" be inserted before the word "conflict" at the end of the comment.

[10] A member argued for the inclusion of a sentence stating that a prospective waiver can be valid even if it consents to future representations that may be adverse to the client. The Commission felt that there were too many relevant factors in such a situation to refer to it in the comment.

An observer suggested that the term "conflict of interest" in paragraph (a) was confusing. He also pointed out that this draft, as well as the current rule, implies that it covers all types of conflicts of interest when only concurrent conflicts are covered. The Reporter felt the term "conflict of interest" was helpful for lawyers who are not extremely familiar with the Model Rules. The Reporter agreed to change the title to "Concurrent Conflicts of Interest" to clarify the operation of the rule. A member noted that the existing Model Rule does not use the term "conflict of interest" in the body of the rule, so the Commission should be prepared to carefully explain the reason for the change. The Commission agreed to change the title and reconsider the issue after comments are received.

[20] A member asked the Reporter to consider eliminating the caption "Non-litigation Conflicts" and to put those paragraphs under the caption "Special Considerations in Joint Representation."

[23] The Commission asked the Reporter to consider inserting a sentence indicating that one of the risks of joint representation is that the lawyer will ordinarily be required to withdraw from representing all of the clients if the joint representation fails.

The Commission agreed that Rule 1.7 was ready to be distributed for public comment with changes as discussed above.

V. Administrative Matters

The Commission agreed that a time period of approximately six months should be given for receiving comments on the drafts to be circulated to the public. Chief Justice Veasey will write a letter directing interested persons and entities to the "explanation" memorandum for each rule and encouraging persons and entities to review the drafts and comment on them. The letter will also point out that the drafts reflect the best thinking of the Commission to date but that they are still a work in progress. The Reporters requested that the memoranda note that the Commission has not had the opportunity to digest all of the comments received to date and that those comments will be considered along with those received during the comment period.

VI. Rule 1.4

Comments

[4] The Commission agreed with a suggestion to add "or the interests of a third party" at the end of the third sentence.

[6] A member felt that the word "active" in the last sentence was unnecessary.

[5] An observer suggested adding "including seeking the advice of other counsel" after "a discussion of the client's options and alternatives." The Reporter felt that it would not be necessary to discuss seeking advice of other counsel in every case. The observer agreed and suggested that the words "when appropriate" might be added.

Another observer pointed out that the language in Comment [5] needs to be coordinated with the language in Comment [8] to Rule 1.7.

The Commission agreed to circulate the rule for public comment, with changes as noted above.

VII. Rule 1.8

An observer suggested that the Commission clarify whether or not a writing is required in each subpart of Rule 1.8 where informed consent is required.

The Reporter noted that the definition of what constitutes a "writing" should be broadened to include things like video or audio tapes. The Reporters will consider where to put the definition.

1.8(b)

The Reporter noted that 1.8(b) is more of a confidentiality rule and that written consent would not be required.

1.8(e)

A member observed that the term "indistinguishable" in [7] may be too strong and recommended the word "similar."

1.8(f)

A member felt that the comment should address what effect the language in an insurance policy has on "written informed consent." The Reporter felt that the issue was too complex for a comment.

The Commission agreed that Rule 1.8(f) should require written informed consent in all cases.

1.8(g)

The Commission agreed that written consent should be required and the term "consultation" should be changed to "informed consent."

A member raised a question about the word "agreement" as it relates to guilty or nolo contendere pleas in criminal cases. He observed that such an agreement is not binding because a defendant can change his or her mind. The Commission asked the Reporter to consider the problem and to possibly flag the issue in the explanation memorandum.

A member suggested a change in the wording of the rule from "including disclosure of" to "after being informed of."

1.8(h)

A member suggested that the Reporter verify that the comment to Rule 1.2 refers back to this rule.

1.8(i)

The Commission discussed options to including a lawyer's family relationships in Rule 1.8. Professor Morgan had suggested covering family relationships in Rule 1.10 because the Restatement of the Law Governing Lawyers had treated the problem as an imputation issue. The Commission had previously considered treating the topic in a comment to Rule 1.7. Several members felt that it was not necessary to refer to other types of relationships here (such as co-habitation) because those other relationships would be covered in Rule 1.7. The Commission decided to leave 1.8(i) as drafted and review the issue after comments are received.

The Commission agreed to circulate the draft for comment, with changes as noted above.

VIII. Rule 1.9

The Reporter commented on several possible ways to handle the relationship between this rule and Rule 1.11. The Model Rules could treat former federal government lawyers differently from former state and local government lawyers or could have no separate provision for former government lawyers.

A member noted that the three variables in Rules 1.9 and 1.11 are degree of involvement, definition of matter, and existence of adversity. Adversity is required in Rule 1.9 but not in Rule 1.11. The operative term in Rule 1.9 is "the same or a substantially related matter," while the operative term in Rule 1.11 is "matter." Rule 1.9 applies where a lawyer "formerly represented a client," while Rule 1.11 requires that the lawyer "participated personally and substantially." The member felt that the Commission must clarify whether and to what extent Rule 1.9 applies to former government lawyers.

The Commission decided to retain the distinction between Rules 1.9 and 1.11 and clarify that the two rules are exclusive of one another. The Commission left for a future discussion what the rules concerning government lawyers should be.

An observer commented that Rule 1.9 should include a definition of "substantially related." The Commission then discussed how inferences of access to confidential information should be drawn. The Reporter stated that, under the Restatement approach, the nature of the work performed is examined to determine if the lawyer gained any confidential information. A member added that the essential idea is that, with respect to a particular matter, is it probable that in the ordinary course of representation confidential information would have been imparted. If so, then the matter is substantially related. The Commission agreed with this approach. The Commission also agreed to replace the example of "substantially related" in the second sentence with another example proposed by a member.

The Commission member asked the Reporter to change the language in Comment [3] from "reduce the value" to "diminish the interests."

The Commission discussed the relationship between this rule and disqualification. Several members felt that it was not the Commission's role to indicate in the comment what effect this rule has on disqualification or to discuss other remedies in the comment.

The Reporter noted that the Commission had previously agreed to move subparagraph (c)(2) of Rule 1.9 to Rule 1.6 and to retain subparagraph (c)(1).

The Commission agreed to circulate the draft for comment, with changes as noted above.

IX. Rule 1.10

In response to a question regarding the placement of examples of effective screens, the Reporter pointed out that the examples were placed in the comment to Rule 1.11. Comments [7] and [11] to Rule 1.10 then refer back to those examples. The Reporter felt that Rule 1.11, which allows for voluntary screens, was the most logical place to provide examples.

A member pointed out that if the bracketed language in 1.10(a) is intended to exempt personal interest conflicts, it is too broad. The Reporter agreed that the language should track Rule 1.7 and that the brackets should be deleted.

The Reporter agreed with a suggestion that Comment [7] should cross-reference Rule 5.3 and clarify that nonlawyers prohibited from working on a matter should be screened to prevent the transmission of confidential information. The Reporter also noted that Rule 5.3 may need to be revised in light of this suggestion.

A member suggested changing the language in the comment from "should not be understood to prohibit" to "does not prohibit."

The Commission suggested that the Reporter compress the example on political views as well as the example about the senior partner in Comment [6]. A member also suggested deleting the term "associate."

The Reporter clarified that paragraph (c) in this draft will not appear in subsequent drafts because the Commission has decided to leave family relationships in Rule 1.8(i).

The Commission agreed to circulate this draft for comment, with changes as noted above.

X. Rule 1.11

The Reporter summarized the three paragraphs of the rule. He noted that paragraph (a), which covers matters on which a former government lawyer worked while with the government, tracks ABA Formal Ethics Opinion 342, now 20 years old, and the language of a federal statute that predated the Model Rules. Rule 1.11(a) prohibits a lawyer from representing a client in a matter on which the lawyer worked while in government, whether or not the representation is adverse to the government, but does allow firms to screen the disqualified lawyer.

Several members felt that Rule 1.11 should track Rule 1.9 except in areas unique to former government lawyers: the possession of confidential government information, the prohibition against representations in the same matter although the representation is not adverse to the government, and screening. A member felt that such an approach might make it easier to address open issues such as part-time government lawyers.

A member stated her opinion that Opinion 409 was incorrect. She did not believe that Rule 1.11 was an attempt to usurp or erase other rules that might apply. She suggested that Rule 1.11 cover only special government concerns.

The Commission discussed what degree of participation is required to disqualify a lawyer under Rule 1.11(a). For example, a department head may not have participated personally and substantially in a particular matter but had access to information about all matters in the department.

The Commission agreed that "knows or reasonably should know" should be inserted in Rule 1.11(b).

A member suggested that Comment [5] on screening add timeliness as an important element. The member also noted that the reference in Comment [11] of Rule 1.10 to Rule 1.11 should be specifically to Comment [5].

The Commission asked the Reporter to prepare two drafts for the next meeting. One draft would track 1.9 and add the issues that are unique to government lawyers. The other draft would track the current Model Rule 1.11. A member commented that in reviewing this rule, the Commission should be mindful that this rule has a significant impact on state and local governments, not just the federal government.

XI. Rule 1.12

The Reporter proposed no change to Rule 1.12 other than the terminology for informed consent. The Commission agreed that this rule will need to be reconsidered after further discussion about alternative dispute resolution.

XII. Duties to Prospective Clients

The Reporter pointed out that the proposed Rule is a direct paraphrase of the Restatement. A central issue is how much information a lawyer can acquire before the firm is prohibited from participating in the matter.

A member suggested that lawyers can protect themselves in this area by checking for conflicts prior to hearing confidential information. Other members pointed out that there are a number of situations in which a lawyer would be unable to do such checking. In addition, it is helpful for lawyers to be reminded that the Model Rules apply even before a client has "officially" hired the lawyer. A member commented that the rule seems to protect lawyers who make mistakes.

A Reporter suggested that if a lawyer acts unreasonably in obtaining confidential information, the lawyer and the firm are prohibited from representing either side. An observer stated his opinion that this area is a big problem for firms and that the Commission should address the issue. He added that he is in favor of screening in these cases.

A member asked if the issues could be covered in comments to Rules 1.6 and 1.7 instead of in a separate rule. Another member felt that the issues here relate more to disqualification than discipline.

A member felt that the rule should only include paragraph (a) and references to 1.6 and 1.9. The member added that (a)(2) should say that screening is allowed only if both clients consent and that screening is not required unless the lawyer has received information that could be significantly harmful to the prospective client. The Commission asked the Reporter to include both screening and "significantly harmful" in the next draft. Another member suggested using just the term "harmful" instead of "significantly harmful" because the latter term adds ambiguity. She added that if screening is allowed, using the term "harmful" would not be a hardship for lawyers. An observer noted that an option would be to have no personal disqualification and no screening.

An observer argued in favor of retaining paragraphs (b) and (c) because they are important client protection measures.

One member questioned the practicality of this rule and whether screening is the correct term for what the rule is suggesting.

XIII. Rule 4.2

Before turning the meeting over to Prof. Hazard to chair the deliberations on Rule 4.2, Chief Justice Veasey provided some background on the discussions regarding amending the rule. He stated that the Conference of Chief Justices took umbrage at the Thornburgh memorandum but wanted to see if some accommodations could be made. The Conference was working on a draft rule when Ethics 2000 and the ABA Standing Committee on Ethics and Professional Responsibility both began working on the issue. As the two ABA entities continue to work on reaching a unified position, the Conference indicated that it would wait to see what action the ABA takes before determining its position. The Conference has continued to talk with Attorney General Janet Reno on this and other issues.

He advised the Commission that Sen. Orrin Hatch, chair of the Senate Judiciary Committee, has introduced a bill that would preempt state supreme courts and authorize the Attorney General to adopt regulations in this area. Senator Hatch spoke to the Conference in January. He indicated that the Justice Department wants the rules governing its lawyers to be uniform across all jurisdictions, but he was open to suggestions as to how to accomplish this. The Conference is not in favor of the Hatch bill.

The Commission is currently communicating with the Ethics Committee on revisions to Rule 4.2. The Commission received a letter from the Committee just prior to the meeting, outlining the issues the Committee would like addressed in the current draft. Those issues will be discussed during the meeting.

Chief Justice Veasey reminded the Commission and those present that he was recusing himself from chairing the discussion on Rule 4.2. He noted that the Conference wants to remain free to recommend whatever position they think is correct so he will not vote on the merits at the Ethics 2000 meetings. He urged others speaking on this or any rule to inform the Commission if they have a "conflict" or have been retained to advocate a view.

Professor Hazard directed the Commission's attention to Subcommittee Draft #5 dated February 1, 1999. He noted that the draft includes "or court order" in paragraph (a) as agreed at the last meeting and that several changes have been made to the comment.

One member argued against the inclusion of "authorized by law" in the draft. He suggested that, instead of including that term in the rule, the comment could specifically state that the rule does not prohibit government lawyers from supervising undercover investigations prior to an indictment or complaint. Other members argued that dropping "authorized by law" and citing undercover investigations in the comment implies there are no other possibilities where contact could be "authorized by law." A member added that carving out specific exceptions in a rule can be treacherous. A motion was made and seconded to exclude the term "authorized by law." The motion was defeated 8 to 1. Chief Justice Veasey abstained.

A motion was made and seconded to include "authorized by law" and to explain its meaning in the comment with a few illustrative, non-exclusive examples. The motion passed unanimously. The Commission agreed that the examples should not just be about government lawyers. Chief Justice Veasey abstained.

A motion to include "court order" was made, seconded, and passed 6 to 1. Chief Justice Veasey abstained.

Comments

The Commission approved Comments [1], [2], [4], and [7] as drafted.

[3] A member suggested that the term "constitutionally permissible" should be deleted because it unduly restricts the law that might be used to authorize a contact. Another member commented that the last two sentences of the comment are confusing. An observer added that the comment sounds like it is imposing some restrictions that go beyond "authorized by law." A member suggested that the comment be replaced with language to this effect, "Just because conduct isn't constitutionally prohibited doesn't mean it is ethically permissible."

A motion to delete the last sentence and substitute a new sentence passed 6 to 2. Chief Justice Veasey abstained. The Commission will review a proposed new sentence at a conference call to be scheduled within two weeks.

A motion to delete "constitutionally permissible" passed 6 to 2. Chief Justice Veasey abstained.

[3a] The Commission agreed that the comment should focus only on "court order" and that all references to "authorized by law" should be deleted. A member suggested rewording the comment as follows, "A lawyer who is uncertain whether a communication with a represented person is permissible may seek a court order in exceptional circumstances, as when ... ." The Commission agreed.

[5] The Commission agreed with a suggestion to change "person" to "employee" and to delete the second sentence.

A member wondered if the comment should state that a lawyer may not seek privileged information during an interrogation, even though the contact with the person being interrogated is permissible. The Commission suggested that the comment cross-reference Rule 4.4 and that Rule 4.4 be clarified if necessary.

[6] A member questioned the need for the comment to highlight that proof of knowledge is an objective standard. He also pointed out that knowledge is defined in the Terminology section, although many lawyers are not aware of it. The Commission agreed that this comment was redundant but that the issue is a sensitive one and problems may arise if it is deleted. The Commission also agreed that it should address the placement of the Terminology section at a later date. A motion to delete Comment [6] was unanimously defeated. Chief Justice Veasey abstained.

The Commission discussed the letter of February 5, 1999 from the Ethics Committee regarding Rule 4.2. The Commission asked Chief Justice Veasey to inform the Ethics Committee that the Commission considered its comments and has amended the draft. The Commission will ask the Ethics Committee if it would like to join in distributing the draft for public comment. Chief Justice Veasey noted that it would not be possible to comply with the Ethics Committee's request that the Commission draft an explanatory memorandum that indicates how each of the DOJ concerns would be managed under this new draft.

XIV. Rule 3.3

The Commission discussed the application of Rule 3.3 in criminal cases. Some members supported the position of Prof. Monroe Freedman of Hofstra University that a lawyer should be allowed to offer the testimony of a criminal defendant even if the lawyer knows the defendant is lying. A Reporter noted that offering evidence must be distinguished from simply calling the defendant and allowing the defendant to testify narratively. Several members felt that the lawyer should be permitted to present the defendant's testimony on a par with other evidence. These members disagreed with the ethics opinion that concludes that the lawyer's knowledge trumps the client's choice.

One member felt that the rule should be reorganized and that (a)(4) should be a separate paragraph. Another member thought that the definition of tribunal should be clarified.

The Commission requested that the Reporters do additional research on the rule and that the discussion be continued at the next meeting. A member felt that this rule may be an appropriate place for the Commission to offer alternatives for consideration by the House.

XV. Rule 3.4

A member asked if proposed paragraph (g) was already covered in proposed paragraph (c). A member pointed out that (g) covers cases that are not in front of a tribunal. Another member suggested moving (g) to Chapter 4.

The Commission discussed what use can be made of misdirected communications. A Reporter pointed out that the rule specifically does not indicate what use can be made of the information. Another Reporter added that the rules tell lawyers what they cannot do, not what they should do.

An observer urged the Commission to deal directly with the issue of misdirected communications. He stated that he will put comments in writing before the next meeting. The Commission agreed that it should look at the relevant ethics opinions of the D.C. Bar and the ABA Ethics Committee at the next meeting.

Respectfully submitted,

Charlotte K. Stretch

Susan Campbell

MEETING OBSERVERS

Jonathan Arons, Bar Association of San Francisco
David Bell, State Bar of California
David Caylor, International Municipal Lawyers Association
Robert Creamer, Attorneys' Liability Assurance Society
Nathan Crystal, University of South Carolina
Robert Cummins, ABA Section of Litigation
Richard Flamm, Alameda County Bar Association
Jack Gardner, National Association of Bond Lawyers
Mark I. Harrison, Association of Professional Responsibility Lawyers
Noel Hensley, Southwestern Legal Foundation
Diane Karpman, Association of Professional Responsibility Lawyers
Robert Keatinge
Chuck Kettlewell, Association of Professional Responsibility Lawyers
Carol Langford, University of San Francisco School of Law
Joseph R. Lundy, Attorneys' Liability Assurance Society
Robert E. O'Malley, Attorneys' Liability Assurance Society
George Overton, Chicago Bar Association
Sean SeLegue, State Bar of California Standing Committee on Professional Responsibility and Conduct
Harry B. Sondheim, State Bar of California Standing Committee on Professional Responsibility and Conduct
Mark L. Tuft, Bar Association of San Francisco
Jonathan A. Weiss, Legal Services for the Elderly
Richard L. Zitrin, University of California at Hastings