Welcome to Ethics Curbstone’s Second Annual Top Ten Professional Responsibility Stories. Due to the screenwriter’s strike, this column will have to substitute for our normal red carpet gala. As in the past, this highly subjective selection will include stories of statewide interest, some of national interest, and this year, one international story. This year, I’ve cheated and added an eleventh, and also threw in a twelfth to take up where Anna Nicole Smith’s lawyer left off last year. Here they are with no priority ranking intended, except for the last entry.
1. It’s 2008, Do You Know Where Your Surrogate Is? The Supreme Court amended Admission and Discipline Rule 23, section 27, effective January 1, 2008, requiring lawyers to designate an attorney surrogate—someone who will be responsible for the orderly transition of client files in the event of the death, disability or disappearance of a lawyer. Even though the rule was effective January 1, the first formal opportunity to make the designation will be on the annual registration statements that are sent out by the Clerk on August 1.
2. Focus on Discovery. On September 10, 2007, effective January 1, 2008, the Indiana Supreme Court amended Trial Rule 34 to cover discovery of electronically stored information. These provisions parallel the electronic discovery provisions in F.R.Civ.P. 34. It’s a brave new world out there. Many of our colleagues have been dealing with the complexities of e-discovery for years. Others of us are playing catch up. Why is this a legal ethics story? Because Rule of Professional Conduct 3.4(d) prohibits making frivolous discovery requests or failing to make reasonably diligent efforts to comply with discovery. If that’s not enough, look at my entry on the Qualcomm case, below. There’s nothing like multi-million dollar sanctions to focus the mind.
3. Who’s In Charge Here Anyway? I hope all lawyers read disciplinary opinions. Better to learn from the mistakes of others than one’s own. Pay closest attention to those “anonymous” opinions. They often focus on conduct that any of us could trip up on—most of us don’t need to be told not to steal our client’s money. One such case was Matter of Anonymous, 876 N.E.2d 333 (Ind. 2007), wherein a lawyer was disciplined for not keeping an eye on his office assistant’s management of the trust account. Under the lawyer’s less-than-watchful eye, client funds went missing. Should there be exceptions to these oversight duties? I don’t think so. Our anonymous lawyer’s assistant was his wife!
4. Breaking Up Is Hard To Do. Right up there with divorces and boundary line disputes, law firm break-ups rank high on the scale of adversarialness. In Kopka, Landau & Pinkus v. Hansen, 874 N.E.2d 1065 (Ind. Ct. App. 2007), the Court of Appeals looked at the question of what imminently departing lawyers may do in the way of advance planning without violating their fiduciary duty of loyalty to their current firm. Adopting the approach of the Restatement (Third) of Agency, the court held that Hansen was preparing to leave and compete with his former firm, but did not cross the line of prematurely, actively and directly competing with his still-current employer.
5. Financial Transactions With Clients. In Liggett v. Young, 877 N.E.2d 178 (Ind. 2007), the Supreme Court considered the nature of the cause of action when a client sues his lawyer for damages arising from a business transaction between the two. The Court held that Rule of Professional Conduct 1.8(a), if violated by the lawyer, does not create a private cause of action for damages. The Court went on to hold that the client did have a common law cause of action for breach of fiduciary duty or constructive fraud, the elements of which are strikingly similar to the elements of a Rule 1.8(a) violation. One interesting issue, ultimately reserved for trial, was whether a contract for construction of a custom home was exempt from the normal restrictions on transactions between a fiduciary agent and his principal because it was a “standard commercial transaction.” In a concurring opinion, Justice Boehm thought it was clear that a contract to build a custom home was not a standard commercial transaction.
6. Gaming the Discipline System. What are the limits on a lawyer’s threat to report misconduct to the Disciplinary Commission in order to obtain concessions in litigation? Matter of Lehman, 861 N.E.2d 708 (Ind. 2007) gave a partial answer. Lehman’s client thought (incorrectly, as it turned out) that opposing counsel had committed an ethics violation and planned to report the misconduct to the Disciplinary Commission. Lehman, in need of a trial continuance, told opposing counsel that he could keep the client from making the complaint if opposing counsel consented to a continuance. The Court said that it was prejudicial to the administration of justice for a lawyer to communicate a willingness to attempt to dissuade his clients from filing a complaint against opposing counsel as a quid pro quo for opposing counsel’s agreement to a continuance of the trial. Id. at 709. Although not separately charged, Lehman tried the same thing with the judge, whom the client also incorrectly believed had committed an ethics violation. This is not a recommended tactic for obtaining a continuance.
Duke Lacrosse Prosecutor Disbarred. Durham, North Carolina prosecuting attorney, Michael Nifong, was disbarred and later held in contempt of for his actions during the rape prosecution of three members of the Duke lacrosse team. Nifong’s misconduct included improper pre-trial publicity and hiding exculpatory evidence from the defense. The North Carolina Bar moved with extraordinary swiftness, not waiting until the criminal case concluded. A special prosecutor later dismissed the criminal charges against the defendants with the stunning announcement that they were factually innocent. The media, the Duke faculty and other observers didn’t exactly cover themselves in glory as many rushed to judgment against the defendants, who were privileged white students from an elite university accused of raping an African-American woman.
National Focus on Discovery. Okay, I’m cheating a bit, since the order was handed down on January 7, 2008, but the discovery fight in Qualcomm v. Broadcom was fully developed in 2007. It was just a matter of hearing from the judge. U.S. Magistrate Judge Barbara L. Major of the Southern District of California, issued a 48-page order assessing multi-millions of dollars in damages against Qualcomm as a discovery sanction and calling out several lawyers by name for their role in the fiasco. Qualcomm v. Broadcom, 2008 WL 66932 (Jan. 7, 2008). Judge Major also referred the lawyers to the State Bar of California for its consideration of professional disciplinary action. This order shines a bright light on the discovery obligations of counsel in complex cases, especially those involving electronic discovery.
9. The Metadata Muddle. We’ve heard a lot about metadata lately. That’s the hidden, embedded data in electronic documents that flow so freely among lawyers, usually as e-mail attachments. Mostly, metadata is innocuous, but occasionally it includes highly sensitive information that could be damaging to a client’s cause if it falls into the wrong hands. The easy part is that lawyers have a duty to safeguard client confidences by preventing them from getting into an opponent’s hands via metadata. The harder question is whether it is wrong for a receiving lawyer to mine an electronic document for metadata to see if any digital goodies slipped through. There’s no authority on point in Indiana, but the ethics opinions from elsewhere continue to pile up, with no clear consensus. Most recently, in ethics advisory opinions, Arizona said it is unethical to mine an opponent’s documents for metadata; and Pennsylvania said the question is too nuanced to allow for a one-size-fits-all answer. By my count, opinions in four jurisdictions have come down against the propriety of metadata mining, three have opined that it is generally not improper, and as noted above, Pennsylvania is ambivalent.
10. Judicial Ethics on Parade. In February of 2007, the ABA House of Delegates approved a new Model Code of Judicial Conduct, its first substantial revision in seventeen years. On the home front, in December the Ethics and Professionalism Committee of the Judicial Conference of Indiana reported the results of its study of the ABA Model Code to the Indiana Supreme Court. Those recommendations have been posted on-line and comments are being accepted until May 5, 2008.
11. Pakistani Lawyers Demonstrate In Support of the Rule of Law. Pakistan President Pervez Musharraf, in a power play that would shake the foundations of the American system of separation of powers, abolished Pakistan’s Supreme Court, which he saw as an impediment to his exercise of presidential power that many disputed as illegitimate. Pakistani lawyers took to the streets, raising their voices against this affront to judicial independence. Many of the demonstrating lawyers were jailed. Meanwhile, many organized lawyer groups in the United States conducted their own symbolic marches in solidarity with the lawyers of Pakistan.
You Can’t Make This Stuff Up
12. It Depends On What “With” Means. The Wisconsin Supreme Court held that a lawyer did not have sexual relations with his client, within the meaning of the Wisconsin professional conduct rule that prohibits sexual relations “with” clients, when the lawyer had sex with a third party who was simultaneously having sex with the lawyer’s client. Matter of Inglimo, 740 N.W.2d 125, 139 (Wis. 2007).