Commission on Evaluation of Rules of Professional Conduct

Meeting Minutes
Friday, February 11, through Sunday, February 13, 2000
Dallas, Texas

Commission Members Present:
E. Norman Veasey, Chair
Lawrence J. Fox
Albert C. Harvey
Geoffrey C. Hazard, Jr.
Patrick E. Higginbotham
Margaret C. Love
Susan R. Martyn
David T. McLaughlin
Richard E. Mulroy
Henry Ramsey, Jr.
Laurie D. Zelon

Liaison:
Seth Rosner, Board of Governors

Reporters:
Nancy J. Moore
Carl A. Pierce

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

Observers:

See list following minutes.

The Commission meeting was held on Friday, February 11, from 9:00 a.m. to 4:00 p.m., on Saturday, February 12, from 9:00 a.m. to 4:00 p.m. and on Sunday, February 13, from 8:30 to 11:00 a.m. in Dallas, Texas.

I. Minutes of Previous Meetings

The minutes of the Commission meeting of December 10 - 12 were approved as submitted.

II. Chair's Report

Chief Justice Veasey reported that the Rules Committee of the Judicial Conference of the United States is studying whether to adopt uniform rules of attorney conduct for federal courts. A member of the Commission who serves on the Committee stated it is likely that the Committee will recommend a rule of dynamic conformity. Chief Justice Veasey, who is also a member of the Committee, added that the Conference of Chief Justices is concerned about a proposal that there be preemption of state law in some circumstances.

A member reported that he is a member of a new taskforce on money laundering. One subject being studied is lawyers who facilitate money laundering. The member stated his belief that no new ethics rules are required to deal with this problem since the rules already prevent counseling or assisting in illegal activity.

Chief Justice Veasey reported that the Ethics Committee has no objection to Ethics 2000 circulating its draft of Rule 4.2. The DOJ also understands that the draft will be circulated for comment.

III. Administrative

The Commission decided to hold a meeting September 15-17, 2000 to finalize the preliminary report.

IV. Spirit of Excellence Award

The Commission congratulated member Henry Ramsey Jr. on his receipt of the year 2000 Spirit of Excellence Award the ABA Commission on Opportunities for Minorities in the Profession. The Commission agreed that the award, which is presented annually to minority lawyers and others who personify excellence in the legal profession and society, was a well-deserved honor.

V. Preamble

The Reporter reviewed the proposed changes: additional language in [2] to recognize the growing significance of the role of lawyers as neutrals in ADR; and additional language in [8] to address concerns about professionalism.

A member noted that one of the speakers on Thursday morning discussed the controversy over whether lawyers acting as neutrals were practicing law. He stated that the new language seems to take the position that lawyers as neutrals are practicing law. Another member suggested that the Comment clarify that the ethics rules apply when lawyers act as neutrals whether or not that activity is the practice of law. The Commission asked the Reporters to review the Comment for the next meeting.

A member suggested that [3] say a lawyer should maintain reasonable communication. The Reporter responded that the Comment in the Preamble is only intended to be introductory with the fuller explanation in Rule 1.4.

The Commission commended the use of the word zealously in [8]. In addition, a member suggested changing upright to ethical, and deleting the words and firmly. The Commission agreed to include the bracketed language.

The Commission agreed to review the Preamble at the next meeting.

VI. Scope

[1] A member questioned whether the proposed language addressing the use of the word should was necessary. Several members felt that if Rule 6.1 is the only rule that uses the word should in rule text, then the language need not address the subject. After some discussion about Rule 6.1 [see next section of the minutes] the Commission decided that the Comment language was not necessary.

[6] The Commission liked the change in this Comment to acknowledge that the rules are used as standards of conduct by courts. A number of people who testified or commented felt that this change should be made. The Commission suggested several drafting amendments: delete the words after lawyer in the first sentence; delete the words admissible as in the last sentence; and delete the last sentence after the word conduct.

[8] The Commission agreed with the deletion of this Comment and suggested that it might be appropriate to add a new Comment that points out that the lawyer's exercise of professional judgment and discretion are not subject to reexamination.

At the next meeting the Commission will review the Scope section and will consider the proposal from the Standing Committee on Public Education that the rules refer to a lawyer's professional responsibility to further the public's understanding of and confidence in the rule of law and the American system of justice.

VII. Rule 6.1

A motion was made and seconded to reconsider the decision to distribute Rule 6.1 with bracketed options for should and shall. Several members noted that the pro bono community would not like to reopen the debate on mandatory pro bono because a rejection by the House of Delegates would be extremely harmful. A number of members felt that there is a need to raise the level of dialogue about pro bono service. Many also felt it was important to communicate the Commission's discussion about pro bono responsibility. The motion for reconsideration failed.

VIII. Terminology

The Reporter noted that the Terminology Section will be moved to a new Rule 1.0 at the beginning of the rules. The Reporters will add cross-references to the Terminology rule throughout the Rules as necessary.

The Reporter stated that she will include definitions of informed consent and tribunal for the next draft. She does not plan to include definitions of assists or material.

A member cautioned that if some definitions refer to the law of the jurisdiction, there may be an implication that the law of the jurisdiction is not relevant to other definitions. She felt it might be better to make a more general statement in the Comments about the relevance of substantive law.

IX. Rule 5.5

The Reporter observed that the speakers on Thursday morning were positive about the direction of the draft.

A member suggested that paragraph (b) be restructured so that (b)(1) and (b)(2) are complimentary - what is not covered in (1) would be covered in (2). Thus, the member suggested that (b)(1) should be changed to something like: a tribunal that exercises authority to recognize admission pro hoc vice.

A member voiced concern that the rule appeared to suggest that a lawyer is not subject to the rules if the lawyer does something that is not practicing law.

An observer suggested that the rule clarify that a lawyer in a multi-office firm cannot practice in a state where the lawyer is not licensed. He felt that the words with respect to particular matters were not sufficiently clear.

A member felt that commonly-owned affiliate should probably include affiliates owned 50% or more by the parent but should not include a smaller ownership interest. There was some disagreement about whether to define the term affiliate. A member suggested that it would be better to refer to outside law.

The Commission agreed to review this rule at the next meeting and to hold Rule 8.5 until the discussion draft of Rule 5.5 is finalized.

X. Rule 2.3

The Commission approved Rule 2.3 as drafted. The Reporter noted that comment [5a] was drafted in response to comments from the Business Law Section.

XI. Rule 3.8

A member suggested returning to the current MR paragraph (c). She stated that the Commission had proposed the change based on the assumption that preliminary hearings were the most important pre-trial rights but that assumption may not be correct. The Reporter added that the Commission had felt that the term "pre-trial rights" was too vague. A member moved to return to the current MR (c). The motion was seconded and passed unanimously.

A member suggested adding "known to the prosecutor" to paragraph (e) to make it more parallel to paragraph (d). Another member pointed out that the NDAA sent comments objecting to proposed paragraph (e). An observer stated that grand juries are not always investigatory bodies but are sometimes charging bodies. He felt that the addition of (e) would require a change in the grand jury procedures. He added that the DOJ policy is to provide exculpatory evidence to the grand jury. He stated that if "knowingly" is added, motions to dismiss will become routine. A disciplinary prosecutor observed that (e) is unenforceable if grand juries are not public. A member felt that (e) was not necessary. The Commission unanimously agreed to delete (e) and to amend the Comment to note that paragraph (a) would include the situation where a prosecutor had material facts tending substantially to negate the existence of probable cause. The Commission asked the Reporter to explain the deletion of (e) in the Reporter's Explanation memo for the public comment draft.

An observer remarked that the proposed addition to 3.8(d), "including evidence that tends to impeach a government witness," is too elastic and that the conduct is already covered in Rule 8.4 and Giglio. The Commission agreed unanimously to add the word "material" in the first line of (d) and to move the proposed additional language to the Comment so it can be more fully explained.

XII. Rule 6.5

The Chair noted that the draft of this rule is consistent with what the Commission heard at Thursday's hearing. A member observed that while some representatives of traditional legal service programs do not like this proposal, this is a good way of handling a very real problem. The Commission felt that the Reporter's Explanation should make that point.

A member questioned whether "short term limited legal services" might be better than "limited legal services."

The Commission agreed that this rule should not include a writing requirement.

The Commission voted to delete the second full sentence in Comment [2].

The Commission decided that the rule does not need to address ghost-writing. A member suggested that ghost-writing may be a good topic for an ethics opinion.

The Commission approved the rule to be distributed for public comment.

XIII. Rule 1.11

The Reporter stated that the Rule 1.11 Subcommittee has been working with the Reporters on this Rule and its relationship with Rule 1.9. The current draft proposes that Rule 1.9 would cover government lawyers with regard to representations adverse to former clients. Proposed Rule 1.11(x) refers back to Rule 1.9 and adds that lawyers associated in practice with a government lawyer are governed by Rule 1.10 with regard to imputed disqualification. The Reporter indicated that she intends to amend Rule 1.10 to reflect that representation adverse to a former government client would be permitted with screening under the conditions stated in Rule 1.11(a) and conflicts of a current government official or employee would not be imputed to other lawyers in the agency.

A member suggested that the two concepts in proposed (x) be separated so that screening can be more uniformly treated in 1.11. A motion was made and seconded to adopt the first sentence of (x) B the concept that Rule 1.9 applies to former government lawyers. The motion passed.

A motion was made and seconded to adopt the first sentence of (a) B the concept that former government lawyers are subject to the personal and substantial participation test for all representations not covered in 1.9. The motion passed.

A motion was made and seconded to adopt a new paragraph on screening that would apply to both (x) and (a). The Commission agreed that the second sentence of (x) would be deleted.

With respect to current government lawyers, the Commission agreed that paragraph (c) would cover obligations to former clients not otherwise covered by Rule 1.9. Like former government lawyers, current government lawyers would be governed by Rule 1.9 for representation adverse to former clients.

The Commission agreed that there would be no imputation for current government lawyers and there would be imputation and screening for former government lawyers. The Commission suggested that the Comment state that screening would ordinarily be appropriate for current government lawyers even though it is not required.

XIV. Rule 3.3

The Reporter pointed out that the definition of tribunal on p. 11 of the Reporter's Observations will be placed in the Terminology Rule. The definition includes arbitrators but not mediators; candor in mediation is covered in Rule 4.1.

A member suggested that since the notion of tribunal could change over time, the definition should include a phrase such as, or other body that makes a decision after presentation of... . Another member added that the concept of binding legal judgment should be included. The Commission agreed.

The Commission agreed that when Rule 3.3 is circulated for public comment a notation should be made that tribunal will be defined and explained in the Terminology Rule.

The Reporter noted that the Commission had decided to add the word material in the second half of paragraph (a)(1) and to delete it from the beginning of (a)(1). An observer indicated that disciplinary counsel were opposed to the deletion of material in the first half of the paragraph. The Reporter pointed out that the introductory line in paragraph (a) includes the word knowingly.

A member asked if offer was the correct verb to use in paragraph (a)(3). The Reporter explained that Comment [1a] clarified the intent of the paragraph.

A member suggested that the deleted language in Comment [4a] should be reinstated in light of the Reporters' recommendation to include the duty of candor in depositions in Rule 3.3. Other members felt that the Comment was trying to cover too many situations. Some felt that only depositions should be discussed. A motion was made and seconded to delete Comment [4a]. The motion passed.

The Reporter pointed out that paragraph (b) is a substitute for paragraph (a)(2) which was too narrow. The Commission agreed that (b) captures what was in the Code and goes to the integrity of the proceeding. The Commission agreed that Comment [11b] should add the words including the client in the last sentence.

A member noted that while the House of Delegates was reluctant to extent Rule 1.6 when the Kutak proposals were debated, the House was willing to increase the obligations in Rule 3.3.

The Commission agreed to review the rule on the listserv for approval to release for public comment.

XV. Rule 3.5

The Commission agreed with the suggestion in the Reporter's Observations to substitute proposed paragraph (x), which is similar to Model Code DR 7-108, for paragraph (b). The Reporter indicated that he will conform Comment [1a] accordingly.

The Reporter explained that the proposed change in paragraph (c) from intended to reasonably likely is designed to establish a more objective standard . He added that the additional language at the end of paragraph (c) was intended to clarify tribunal. The Commission felt that the current standard in the rule is adequate and decided that the current Model Rule paragraph (c) should remain unchanged.

The Commission asked the Reporter to delete the reference to mediation in Comment [3] and to add a reference to the Terminology Rule.

XVI. Rule 3.7

The Reporter explained that the proposed changes to the Comments are intended to clarify the relationship between Rule 3.7 and the conflict of interest rules.

The Commission agreed with the Reporter that the proposed additional language at the end of Comment [1] was not necessary. The Commission approved the addition of the tribunal in the first line.

A member stated that Comment [3a] seemed to imply that client consent was necessary even though there was no conflict. The Commission agreed to delete the Comment.

A member suggested deleting Comment [3b] because it repeats the text. The Commission felt that the Comment was helpful because the rule is difficult to understand.

XVII. Rule 3.9

The Commission like the deletion of the word tribunal from the text of the rule.

The Commission agreed to delete the last sentence of Comment [1].

The Commission approved the rule for public comment.

XVIII. Rule 1.6

The Commission looked first at the suggestions that have been made to the current Model Rule formulation of information relating to the representation to something less broad, such as confidences and secrets. Several commentators urged the Commission to follow the Restatement by excluding from confidential client information, information that is generally known. A member stated that the current formulation has not been a problem and has not been improperly applied by disciplinary agencies. There was no motion to amend the Commission's current draft.

The Commission then discussed a proposal to substitute reasonably certain for likely in paragraph (b)(2) to make it parallel to paragraph (b)(1). Several members thought that reasonably certain was too high a standard and that lawyers should have more discretion to extricate themselves when the client has used the lawyer's services. Others felt that since confidentiality is so basic to the lawyer-client relationship, any encroachment should be as narrow as possible. Those who favored the change also argued that the purpose of this rule is to prevent harm, not to protect a lawyer's liability. A member pointed out that Rule 4.1 compels disclosure in certain circumstances unless disclosure is prohibited by Rule 1.6. He felt that if disclosure might be compelled, the standard should be very high. A motion was made and seconded to change likely to reasonably certain in paragraph (b)(2). The motion passed 5 to 4.

A motion was made and seconded to add prevent to paragraph (b)(3). A member felt that prevent was included in mitigate. Another member responded that prevent has a peremptory implication not included in mitigate. He felt that if the Commission intended to include prevent within mitigate, then prevent should be added. The motion passed 6 to 3.

A motion to change shall to may in paragraph (c) passed unanimously. This change was suggested by a number of commentators who felt that, given the large number of rules and regulations governing disclosure to a wide variety of governmental bodies, paragraph (c) could lead to a wholesale erosion of confidentiality. The Reporter pointed out that shall should be retained to the extent that a lawyer must reveal information relating to the representation when necessary to comply with these Rules. The Commission agreed and asked the Reporter to add a new paragraph (b)(6) that states: to the extent required by law or court order. Some commentators had also suggested amending Comment [15] to refer to a final order of a court or tribunal. The Commission felt that the concerns of the commentators would be taken care of with the change to paragraph (c).

An observer suggested that a sentence be added to the end of Comment [5] to state that disclosures should only be made for a proper professional purpose. The Commission felt that the change was not necessary.

The Commission agreed unanimously to delete the third sentence of Comment [6].

XIX. Rule 1.9

The Commission agreed that current Model Rule paragraph 1.9(c)(2) should be restored to Rule 1.9 and that references to former clients in Rule 1.6 should be deleted.

The Commission discussed whether a writing should be required in Rule 1.9. Several members felt that a writing is important to protect former clients. An observer noted that a communication from the lawyer may satisfy the writing requirement, depending on how the Commission defines writing. The Commission agreed to reconsider this issue after discussion of the writing requirement in Rule 1.7.

The Commission decided to delete Comment [3].

The Commission agreed with a suggestion to change the same work to the same matter in Comment [4] and to rewrite the sentence to conform to that change.

The Commission agreed to reconsider Rule 1.9 after discussion of Rule 1.11.

XX. Rule 1.7

The Reporter stated that some commentators have expressed confusion over the question of whether directly adverse conflicts exist outside litigation and, if so, under what circumstances. She noted that several alternatives have been suggested:

(1) Limit direct adversity conflicts to litigation, treating transactional representation solely under material limitation.

(2) Limit direct adversity conflicts to litigation and to those transactions where the adversity between the clients is or is likely to become so severe that it would constitute a betrayal of trust sufficient to impact the lawyer's ability to continue representing both clients without the informed consent of each.

(3) Eliminate direct adversity conflicts altogether and rely solely on the material limitation standard. This is essentially the approach that was taken in the Restatement.

The Commission agreed with the Reporter's recommendation to adopt alternative (2) and to redraft comment [4] to add a sentence describing the limited situations in which direct adversity conflicts can arise in non-litigation matters.

The Reporter advised the Commission that several commentators objected to the requirement of a writing in Rule 1.7. Some urged that if the requirement is kept, the Commission should follow the approach taken in Washington, in which the writing is not required to be signed by the client. An observer who is a disciplinary counsel stated that without the requirement of a signed writing lack of consent is hard to prove. A member moved that the Commission adopt the Washington rule. The motion was seconded. Several members felt that the Washington rule was an improvement over the current Model Rule. A member suggested separating current clients and former clients for purposes of discussion. The Chair asked for a straw vote on whether to follow the Washington approach with respect to current clients. There were six for and two against the proposal. The straw vote on former clients was eight for and 1 opposed.

The Commission decided to add a reference to proceedings before a tribunal in paragraph (b)(3).

A member suggested an addition to Comment [10] that would indicate that if the client has independent representation, the client's consent is presumptively valid. He provided proposed language to the Reporter. Several members were concerned that the language might imply that a nonconsentable conflict would become consentable because of the independent representation. A member added that the word presumption should not be used because it would imply that consents without independent counsel are not good. The Commission decided that it would be preferable to discuss independent counsel in the definition of informed consent and to refer in Comment [10] to the Terminology Rule.

An observer indicated that she will send proposed language regarding imputation and in-house counsel.

The Commission agreed with a suggestion that Comment [2] point out that ignorance caused by failure to detect a conflict is no defense.

The Reporter noted that some commentators objected to the statement in Comment [13] that general waivers are ordinarily be ineffective. The Commission felt that the decisional law in this area is right and that the proposed Comment should not be changed.

A member made a motion to amend Comment [19] to track the Restatement. The motion was not seconded. Another member commented that he felt the language was consistent with the Restatement.

The Reporter indicated that she will add a new caption prior to Comments [19] and [20] titled, Unforseen Developments. An observer suggested that the Commission delete the sentence in [20] that suggested that the lawyer withdraw from the client least harmed. She argued that this would just lead to litigation. The Commission agreed.

The Reporter advised that the Family Law Section continues to be troubled by the abolition of the existing distinction between making arguments in trial and appellate courts. An observer who is a judge indicated that the Comment is correct. The Commission agreed that no change was necessary to Comment [23].

XXI. Rule 1.8

The Commission considered the suggestion that the text of the rule require disclosure of whether the lawyer is representing the client in the matter. The Commission agreed that paragraph (c) should be expanded to include this suggestion.

A motion was made and seconded to add at the beginning of paragraph (a), unless the client is independently represented. Several members felt that such a wholesale exclusion would be too broad. The motion was defeated with only one vote. The Commission suggested that the Reporters mention in the Comment that independent representation can be evidence that the requirements of paragraphs (a)(1) and (a)(2) were met.

The Commission agreed that paragraph 1.8(b) should refer to Rule 4.1 in addition to Rules 1.6 and 3.3.

The Commission agreed to move the definition of related from the last sentence of Comment [5] back into the text of paragraph (c).

The Commission next considered whether written informed consent is needed in all cases under paragraph (f) or is only needed when there is a conflict of interest under Rule 1.7. The Commission agreed that the phrase, under the conditions stated in Rule 1.7, was not helpful in determining when the client must give informed consent. A member noted that Rule 1.7 already requires written consent for the conflict. He stated that Rule 1.8(f) adds that the client must give informed consent regarding the involvement of the third party. The Commission agreed that a cross-reference to Rule 1.7 in the Comment would be appropriate.

A motion to delete in writing failed with only one vote in favor.

The Commission discussed the suggestion that prospective limitations on liability should be allowed where the client is independently represented. The Commission agreed that the phrase, unless the client in independently represented in making the agreement, should be restored to the text of the paragraph (h), but not the phrase, unless permitted by law.

The Commission was unanimous that the reference to cohabiting relationships should be deleted from paragraph (i). The Reporter indicated that she will draft comment language that raises the issue in connection with the discussion of Rule 1.7. The Commission also decided to delete the phrase, under the conditions stated in Rule 1.7, from paragraph (i).

The Reporter noted that a suggestion had been made to change authorized back to granted in paragraph (j)(1). The Commission decided to retain authorized.

The Reporter pointed out that proposed paragraph (k) has received mixed reactions. The Commission agreed with the Reporter that although many of the cases could be adequately treated under other rules, adoption of a specific rule will help deter improper conduct.

An observer suggested the addition of a new paragraph providing that when lawyers are associated in a firm all prohibitions in paragraphs (a) - (h) and (j) are imputed to others in the firm. The Commission agreed. The Reporter noted that paragraphs (i) and (k) concern personal interest conflicts which the Commission previously decided will not be imputed.

XXII. Rule 1.10

The Reporter indicated that the Commission's recommendation that personal interest conflicts not be imputed has been well-received. The Commission agreed to retain the recommendation with no change.

The Commission agreed to retain the change to reasonably should know because it is in fact the test that is applied by the courts.

The Commission next considered various suggestions regarding screening. Some proposals would take the approach of the Restatement and basically make screening available only where information held by the disqualified lawyer is insignificant. Others would impose significant requirements of notice to the affected client, opportunity to verify the screen, limitations on allocation of fees to the lawyer, affidavits of compliance, and the like. Some members thought it might be helpful to differentiate between litigation and transactions. A member noted that concepts such as insignificant information arise in the disqualification context but not in discipline. Several members felt that no change should be made but that additional guidance might be provided regarding effective screens. There was a consensus that no change should be made to the rule.

The Commission agreed that the third sentence of Comment [6], the reference to neither spouse participating in a matter when the spouses' firms represent adverse parties, should be deleted.

A member suggested that the word timely be added in line 2 of Comment [9].

The Commission agreed to add something to the Comment about the possibility of advance consent in appropriate situations and to include reference to Rules 1.7 and 1.9.

Respectfully Submitted,

Susan Campbell
Charlotte Stretch

MEETING OBSERVERS

William T. Barker, American Insurance Association
John Berry, National Organization of Bar Counsel
Samuel Bufford, Los Angeles County Bar Association
David Caylor, International Municipal Lawyers Association
Dane S. Ciolino, Lousiana State Bar Association
Roger Cramton, Cornell Law School
Robert Creamer, ALAS
Steve Csontos, Department of Justice
Mary Daly, Commission on Multidisciplinary Practice
Robert F. Drinan, Standing Committee on Professionalism
A. Root Edmonson, North Carolina State Bar
Jose Feliciano
Claudia Flynn, Department of Justice
John M. Gardner, National Association of Bond Lawyers
Bruce Green, Fordham Law School
Harry S. Hardin III, Louisiana Bar Association
Noel Hensley, Southwestern Legal Foundation
Alan W. Houseman, Center for Law and Social Policy
Diane Karpman, Association of Professional Responsibility Lawyers
Nathan Koppel, Texas Lawyer Magazine
Eileen Libby, Standing Committee on Ethics and Professional Responsibility
Joseph R. Lundy, ALAS
Thomas D. Morgan, Section of Administrative Law
Carol A. Needham, St. Louis University
Robert E. O'Malley, ALAS
George Overton, Chicago Bar Association
Paul Rashkind
George Riemer, Oregon State Bar
Arnold Rosenfeld
Robert J. Saltzman, New York State Grievance
Don Saunders, National Legal Aid and Defender Association
Sylvan Siegler, Section of Taxation
William P. Smith III, National Organization of Bar Counsel
J.C. Thomas
Jan Williams, ABA Watch