Recent Publications
Ethical Problems in Employment Litigation
Debra S. Katz and Alan R. KabatDecember 1-3, 2005
Introduction
This chapter surveys several hot topics in the intersection between employment law and the ethical requirements and obligations of attorneys: (1) ethical conduct during settlement negotiations; (2) inadvertently disclosed or purloined documents; (3) spoliation of evidence; (4) tape recording issues; (5) coaching of witnesses during depositions; (6) ghost writing of pleadings for pro se parties; (7) ex parte communications by plaintiffs' counsel with defendants' current and former employees; (8) dual representation of corporate and individual defendants; (9) representation of multiple plaintiffs against a single employer; and (10) reporting requirements under the Sarbanes-Oxley Act (2002).
The rules of professional conduct and their interpretation are traditionally a matter of state statutory and common law. However, Congress, through the Sarbanes-Oxley Act (2002) recently federalized several aspects of attorney conduct, including the obligation to report violations of securities law and breaches of fiduciary duty in the corporate context, and the spoliation of evidence; these topics are discussed herein.
This article reviews a representative sampling of cases and professional responsibility opinions from various jurisdictions that reflect the spectrum of permissible and impermissible conduct. The ABA Model Rules of Professional Conduct (1983, as amended through 2002) have been used as the baseline, although a minority of jurisdictions, including New York, still use the older ABA Model Code of Professional Responsibility (1969), and California has its own combination of statutes and judicial rules governing attorney conduct. It must be emphasized that even if two jurisdictions have adopted the same version of a provision of the Model Rules (or the Model Code), the interpretation of that provision by the courts and committees on professional conduct may significantly differ between the two jurisdictions.
Useful links to bar associations, rules of conduct, ethics opinions and related resources, at the state level, include:
ABA Center for Professional Responsibility http://www.abanet.org/cpr/
FindLaw: Ethics and Prof. Resp. http://www.findlaw.com/01topics/14ethics/sites.html
Georgetown Law Library http://www.ll.georgetown.edu/topics/legal_ethics.cfm
Internet Legal Services http://www.legalethics.com/
Legal Information Institute http://www.law.cornell.edu/ethics/
Settlement Negotiations
Two ethical issues that can arise during settlement negotiations are (1) puffery or overstating the client's position; and (2) settlement agreements that preclude an attorney from using information acquired in one case in future litigation involving other clients. Given that cases are more likely to be settled than go to trial, it is imperative that employment litigators be aware of these and other pitfalls that may occur in settlement. See generally American Bar Ass'n, Section of Litigation, Ethical Guidelines for Settlement Negotiations (2002).
Rule 4.1, ABA Model Rules, governs statements made during settlement negotiations:
RULE 4.1: TRUTHFULNESS IN STATEMENTS TO OTHERS
In the course of representing a client a lawyer shall not knowingly:
(a) make a false statement of material fact or law to a third person; or
(b) fail to disclose a material fact when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.
A 2002 case from Maryland illustrates the problems that can arise when counsel engaged in puffery during settlement negotiations. Ausherman v. Bank of Am. Corp., 212 F. Supp. 2d 435 (D. Md. 2002). In Ausherman, a putative multi-plaintiff action involving alleged violations arising from unauthorized disclosure of the plaintiffs' credit reports, the defendant asked the plaintiff's counsel for information about the identity of the person who had allegedly disclosed these unauthorized actions to one of the plaintiffs. Id. at 438. Despite numerous requests and court orders, plaintiff's counsel refused to provide this information until he finally complied with an order that he be subjected to a deposition to be presided over by the Magistrate Judge. Id. at 438-39. During this deposition, the plaintiff's counsel, in response to a question about his written statement that he had made "confidential arrangements" to obtain the identity of this inside person, candidly responded as follows:
Q. Well, in your [settlement] letter, in the second paragraph, you indicate, please be advised that I do not at present know the identity of this individual. I have made confidential arrangements, however, to have that information provided to me once any possibility of my own deposition or answers to interrogatories has passed. What confidential arrangements are you talking about?
A. There were none. That was language put in there for the purposes of settlement bluster.
Q. So this is a lie?
A. That is correct. It is not true.
Q. So you never made any arrangements to find out the identity of John Doe Number 3?
A. No. I was attempting to find out the identity of John Doe Number 3, but while we were in settlement discussions, I wanted to make the representation, for the purposes of maximizing my clients' settlement position, that I could obtain an individual to provide to your in-house counsel.
Q. And can you?
A. No.
Q. So at the time you made this statement, you were lying?
A. That's correct.
Id. at 440. Magistrate Judge Grimm aptly remarked that:
As it presently is conducted, the judicial resolution of civil disputes certainly must include settlement negotiations involving pending litigation, as they are an integral part of this process. . . .
It does not require a rule of professional responsibility for a lawyer to know that, during the process of settlement negotiations, he or she may not lie to opposing counsel about a fact that is material to the resolution of the case. It is just as damaging to the integrity of our adversary system for an attorney knowingly to make a false statement of material fact to an opposing counsel during settlement negotiations, as it is to lie to a lawyer or the judge in court.
Id. at 443-44. Thus, the court applied ABA Rule 4.1(a) (as adopted essentially verbatim by the Maryland Court of Appeals), which requires "truthfulness in statements to others," including opposing counsel. Id. at 445-46. The court recognized that some level of puffery might be acceptable, but not that at issue in this case:
The treatises also make reference to an issue that extensively is discussed in legal publications: recognizing just where the line is to be drawn between ethical and unethical behavior during the negotiation process can be difficult to discern. Patently, certain aspects of the process unavoidably involve statements that are less than completely accurate, such as posturing or puffery, intentional vagueness regarding a negotiating party's "bottom line," estimates of price or value, and the party's ultimate intentions regarding what an acceptable settlement would be -- all of which are thought to encompass representations that are not "material."
Id. at 446 (citations omitted). Here, however, counsel's conduct crossed that line:
While there still may be legitimate debate regarding which aspects of the negotiation process demand strict adherence to the requirements of candor, as the legal journals demonstrate, this much at least is not subject to principled argument: Rule 4.1(a)(1) prohibits an attorney from knowingly deceiving a third person, including an opposing counsel, during negotiations. The misrepresentation may be either express or by a failure to disclose. It also must involve a fact or the law that is material to the negotiation, which necessarily must be evaluated on a case-by-case basis.
Id. at 448-49. Thus, the court referred this matter to the court's disciplinary committee:
While the duty imposed by Rule 4.1(a)(1) may be a narrow one -- not to misrepresent knowingly facts or law material to the negotiation -- it is also an absolute one. In each instance the questions for the negotiating attorney, as well as a reviewing disciplinary committee or court if called upon to do so, is to determine: (1) what is the statement or omission in dispute? (2) is it untrue or deceptively incomplete in any significant respect? (3) reasonably viewed, is it important to the subject that is being negotiated? and (4) at the time it was made, did the attorney know or should have known under the circumstances that the statement was untrue? In the pending case, answering these questions easily shows why there is abundant evidence requiring the referral of Mr. Sweetland's statements in his settlement letter to the Defendants' attorney to the Court's disciplinary committee.
Id. at 451. The court further noted that Rule 408, Fed. R. Evid., which shields certain statements made during settlement negotiations, could not be used to exculpate an attorney from his unethical conduct during settlement negotiations:
For those who see within Evid. Rule 408 the reflection of their own ingenuity at having discovered a means to lie, threaten, or coerce with impunity to negotiate a settlement advantageous to their clients, the sanctuary they perceive is illusory. The rule itself, on its face and interpreted as it must be -- under Evid. Rule 102 to obtain a fair and just result -- allows no such use. Nor will the courts allow a rule intended to promote the fair resolution of disputes to be perverted by a use that would undermine the very reason for its existence. Accordingly, the disciplinary committee of this Court is asked to investigate Mr. Sweetland's conduct in connection with the settlement letter and take any appropriate action based on the outcome of that investigation.
Id. at 455.
Similarly, a 1999 case from New Mexico illustrates comparable problems with sanctionable conduct based on plaintiff's counsel's behavior during settlement negotiations of an employment discrimination claim brought by an employee at a state prison. Pendleton v. Central New Mexico Correctional Facility, 184 F.R.D. 637 (D.N.M. 1999). Here, the parties had negotiated a settlement which would require the plaintiff to resign his position and release all claims he had against the employer. Id. at 638-39. However, the plaintiff filed a new charge of retaliation immediately before signing the agreement and release, and refused to resign, both of which were contrary to his counsel's representations during the negotiations. Id. The plaintiff belatedly resigned several months later and then filed a second action in court, based on the retaliation charge, id. at 639; the employer moved for Rule 11 sanctions, based in part upon plaintiff's counsel's material misrepresentations during settlement negotiations. Id. at 640.
The court denied the Rule 11 sanctions, solely because the employer failed to serve it upon the plaintiff in advance of filing it. Id. However, the court expressed its strong displeasure of plaintiff's counsel's conduct during the settlement negotiations:
As we go through this life we learn, and sometimes the hard way, who we can trust to be candid and who we cannot. It is unfortunate that some attorneys apparently feel no obligation to their fellow attorneys, but then again, as the saying goes, "it's a short road that doesn't have a bend in it." The Rules of Professional Conduct and the case law suggest that, even in the context of finalizing a settlement agreement and release, a knowing failure to disclose a non-confidential, material and objective fact upon inquiry by opposing counsel is improper. . . . The court agrees with Defendant that the failure to disclose a fact may be a misrepresentation in certain circumstances. What is particularly troubling in this case is that the second retaliation lawsuit arose directly and immediately out of efforts to settle the prior action. Holding back information that if divulged might have led to a quick low-cost resolution of this action without resort to additional litigation is exactly the type of conduct that the public finds abhorrent and that contributes to the low esteem that the bar currently is trying to reverse.
Practicing law transcends gamesmanship and making a buck. We should be trying to make a difference. The profession is more than a business, and should remain so. As professionals we should, while trying to solve our clients' problems, make every effort to avoid needless litigation. The conduct employed in this case certainly was not calculated to achieve that end.
Id. at 641.
It should be noted that the 2002 revision to Rule 4.1, ABA Model Rules, includes revised phrasing in the Comments to this Rule that should help address these issues (new language is underlined and the phrase to be deleted by strike-out):
Misrepresentation
[1] A lawyer is required to be truthful when dealing with others on a client's behalf, but generally has no affirmative duty to inform an opposing party of relevant facts. A misrepresentation can occur if the lawyer incorporates or affirms a statement of another person that the lawyer knows is false. Misrepresentations can also occur by failure to act partially true but misleading statements or omissions that are the equivalent of affirmative false statements. For dishonest conduct that does not amount to a false statement or for misrepresentations by a lawyer other than in the course of representing a client, see Rule 8.4.
Statements of Fact
[2] This Rule refers to statements of fact. Whether a particular statement should be regarded as one of fact can depend on the circumstances. Under generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party's intentions as to an acceptable settlement of a claim are ordinarily in this category, and so is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. Lawyers should be mindful of their obligations under applicable law to avoid criminal and tortious misrepresentation.
Comments to ABA Model Rule 4.1 (2002). The Reporter's Explanation of Changes states that the addition of "ordinarily" in Comment 2 is intended "to clarify that, under some circumstances, an estimate of price or value may constitute a false statement of fact under this Rule."
A second issue that may arise during settlement negotiations is whether an attorney can use information learned in the to-be-settled case in future litigation. For example, a plaintiff's counsel may have several pending or prospective cases against the same employer. The plaintiff's counsel may want to use information learned or obtained during discovery in the first case to help litigate other cases. Even if the plaintiff's counsel is willing to keep such information confidential, i.e., by not releasing it to the public and by filing court documents containing that information under seal, defendant's counsel may object to any future use of that information by the plaintiff's counsel.
In 2000, the ABA issued a formal ethical opinion, holding that while a settlement agreement could restrict an attorney from releasing information, a settlement agreement could not prohibit an attorney from making any use of that information, as that would be an improper restraint on an attorney's right to practice. See ABA Formal Opinion 00-417, "Settlement Terms Limiting a Lawyer's Use of Information" (April 7, 2000). The ABA concluded that:
Although a lawyer may participate in a settlement agreement that prohibits him from revealing information relating to the representation of his client, the lawyer may not participate or comply with a settlement agreement that would prevent him from using information gained during the representation in later representations against the opposing party, or a related party, except in limited circumstances. An agreement not to use information learned during the representation effectively would restrict the lawyer's right to practice and hence would violate Rule 5.6(b).
Id.; see also "ABA Opinion Says Lawyers May Restrict Release, But Not Use, of Secret Information," 68 U.S.L.W. 2757 (June 20, 2000).
The New York State Bar Association similarly held that, under Disciplinary Rule 2-108(B), a New York attorney could not be prohibited, through a settlement agreement, from representing other clients in future cases against that client's employer. See N.Y. State Bar Ass'n, Committee on Professional Ethics, Opinion 730, "Settlement Agreements; Restrictive Covenants" (July 27, 2000), available online at:
More generally, some states have statutes that prohibit sealing of settlement agreements. See L. Bernabei, "Confidential Settlement Agreements and the Right to Testify," 1 J. Empl. Discr. L. 81, 82-83 (2000) (collecting statutes from Florida, Oregon, North Carolina, and Texas).
The D.C. Court of Appeals upheld the one-year suspension of an attorney who entered into a secret settlement agreement with the defendant in a products liability class action. In re Hager, 812 A.2d 904 (D.C. 2002). Here, the settlement agreement would, inter alia, prohibit the attorney representing current or future clients with claims against the defendant, and preclude the current clients from obtaining the attorney's work product or the names of potential class members, which effectively foreclosed the clients from continuing with their claims. Id. at 917-18. The court found that the attorney's conduct violated D.C. Rules 1.2(a) (a lawyer must abide by the client's decision whether to accept a settlement offer) and 5.6(b) (prohibiting a lawyer from entering into a settlement agreement that restricted the lawyer's right to practice).
The Virginia Bar, in 2004, concluded that a settlement agreement's restriction on a plaintiff's lawyer's ability to file future lawsuits against the employer was an impermissible restriction on the attorney's ability to practice law, since the settlement agreement provisions were so broad that even departing attorneys could not sue the employer in their new law firm. See Va. Bar. Legal Ethics Op. 1788 (Feb. 17, 2004) (http://www.vacle.org/opinions/1788.htm). This issue arose in the settlement of asbestos litigation against what was then "the largest private industrial employer in [Virginia]."
Some employers have tried to circumvent these ethical proscriptions by including, in the settlement agreement, a provision that the plaintiff's counsel will be retained to provide legal services for the employer, such as in a monitoring or consulting role with respect to the implementation of the settlement, or providing harassment training. It remains to be seen whether or not this arrangement will be recognized as ethical, even if the courts can enforce those provisions. See also G.V. Mersol, "Ethical Issues in Class Action Employment Litigation," 20 Labor Lawyer 55, 75-76 (2004).
A recent race discrimination case filed against BellSouth illustrates the serious consequences of such agreements by plaintiffs' counsel to provide "consulting" services to the employer, where those "consulting" fees have the effect of reducing the plaintiffs' settlements. See Jackson v. BellSouth Telecomm., 372 F.3d 1250, 1255-60 (11th Cir. 2004); Adams v. BellSouth Telecomm., No. 96-2473, 2001 WL 34032759 (S.D. Fla. Jan. 29, 2001); Adams v. BellSouth Telecomm., No. 96-2473, 2000 WL 33941852 (S.D. Fla. Nov. 20, 2000). In the BellSouth litigation, several attorneys, led by Norman Ganz, filed a race discrimination case on behalf of 56 plaintiffs, and threatened to file another lawsuit against BellSouth on behalf of 22 additional plaintiffs. Before the litigation progressed very far, the attorneys reached a global settlement with a total value of $1.6 million for all 72 plaintiffs. However, of that amount, the plaintiffs received only about $300,000, with their counsel receiving the remainder, including $120,000 in a four-year consulting fee, $230,000 in an "engagement" fee, and $51,500 in other expenses. After one plaintiff complained to the court that she was forced to sign a settlement agreement that prohibited her from finding out the total value of the settlement or the amounts that the attorneys would receive, the district court appointed a magistrate judge to conduct an investigation. The court adopted most of the magistrate's recommendations, including sanctioning Mr. Ganz by requiring him to disgorge $300,000 to the plaintiffs and suspending him from practicing before the federal court for three years. However, the court declined to impose monetary sanctions on BellSouth's counsel, even though they had suggested the "consulting fees," and only imposed a requirement that the defense counsel complete ethics training. Adams, 2001 WL 33941852, at *2-*10. Subsequently, Ganz was disbarred by the Florida Supreme Court, for this and related misconduct, and his co-counsel agreed to disgorge $250,000 to the plaintiffs. Jackson, 372 F.3d at 1258 n.9.
Inadvertently Disclosed Documents
Employment lawyers who litigate for long enough will inevitably find themselves on one or both sides of the inadvertent disclosure equation during discovery: as the party who disclosed privileged documents, or as the party who unwittingly received such documents. The courts and ethical opinions are split over whether the receiving party can make any use of such documents. An August 2002 decision from the Maryland Court of Special Appeals (the intermediate appellate court) collects much of the case law and ethical opinions in this area. Elkton Care Ctr. Assocs. LP v. Quality Care Mgmt, Inc., 145 Md. App. 532, 805 A.2d 1177 (2002); see generally W.R. Leibowitz, "Did That E-Mail Waive Privilege?," Law Practice Management (ABA), Mar. 2003.
The facts are representative of those in most other scenarios: during discovery, defendant's trial counsel agreed to produce a box of documents, which plaintiff's counsel would examine in order to identify those that they wanted copied, and defendant's counsel would then make and deliver a copy of all the tabbed documents. Elkton Care, 805 A.2d at 1179. Among these documents was a memorandum from a lawyer to defendant's President, which was designated as "Attorney/Client Privilege, Attorney Work Product, Prepared in Anticipation of Litigation" and discussed various defenses that might be available in a wrongful termination action brought by the plaintiff - an action which plaintiff had, in fact, brought. Id. at 1179-80. Plaintiff's counsel tabbed this document, and it was copied and produced by defendant's counsel. Id. at 1180.
During trial, plaintiff's counsel attempted to cross-examine the defendant's president, using this document. Id. at 1180-82. Over objections, the trial judge allowed the plaintiff's counsel to use this document for this purpose. Not surprisingly, the jury found for plaintiff, concluding that the defendant had breached the contract. Id. at 1182. Upon appeal, defendant argued that the inadvertent disclosure did not waive the attorney-client privilege and/or the attorney work-product doctrine. Id. at 1182-83.
The Maryland Court of Special Appeals identified three possible approaches to determining whether either privilege had been waived through inadvertent disclosure:
(1) The "strict test" or "waiver test," under which any inadvertent disclosure is a waiver of the privilege. Id. at 1183 (citing cases from the D.C. and Federal circuits);
(2) The "lenient" or "no waiver" test, under which there is no waiver because only the client can waive the privilege, and the attorney's negligence cannot constitute a waiver. Id. (citing cases from district courts in Florida and Illinois); and
(3) The "intermediate" or "middle" view which does a fact specific case-by-case balancing analysis. Id. at 1184 (citing cases from the Fifth Circuit and from federal district courts in Massachusetts, New Jersey, Pennsylvania, and Tennessee). The Maryland court adopted this intermediate test. The rationale for adopting the intermediate test, and the analytical framework, is as follows:
A third intermediate view sensibly holds that the question whether disclosure during discovery results in loss of privilege protection depends very much on the circumstances, and the issue should be resolved by looking mostly to three factors: First is the degree of care apparently exercised by the claimant. Second is the presence of extenuating circumstances, the most obvious being the press of massive discovery going forward under the pressure of deadlines, where even caution in producing documents is likely to generate occasional mistakes. Third is the behavior of the privilege claimant in taking remedial steps after disclosing material.
We agree with Professors Mueller and Kirkpatrick, and with those courts that have adopted an "intermediate" (or "middle") test, under which the court makes a fact specific case-by-case analysis to determine whether the privilege has been waived. The courts that use this approach examine the following factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production; (2) the number of inadvertent disclosures; (3) the extent of the disclosure; (4) any delay and measures taken to rectify the disclosure; and (5) whether the overriding interests of justice would or would not be served by relieving a party of its error.
Id. at 1184 (internal citations omitted). In this case, the court found that factors (1), (2), (3), and (4) all strongly favored waiver. Id. at 1185. Here, there were several opportunities for defendant's counsel to review the materials before production, only one box of documents was involved, and defendant made no attempt to bring this matter to the attention of the trial judge before the trial. Factor (5) also favored waiver, since defendant's counsel, during the direct examination of the defendant's President, opened the door by attempting to show that the President's actions in terminating the contract were legitimately based. Id. (affirming judgment for plaintiff).
In 2002, the New York County Lawyers' Association issued Ethics Opinion 730, which held that a lawyer who receives material that appeared to be inadvertently disclosed should promptly notify the sending lawyer and comply with his instructions either to return the documents or dispose of them. See N.Y. County Lawyers' Association, Ethics Opinion 730 (July 19, 2002), available online at:
Also in 2002, the D.C. Bar's Legal Ethics Committee issued Legal Ethics Opinion No. 318, "Disclosure of Privileged Material by Third Party" (Dec. 2002), which addressed the receipt of "a privileged document that may have been stolen or taken without authorization from an opposing party." Here, a temporary employee of a corporation had acquired an attorney-client privileged document (which was not marked as confidential), and somehow disclosed it to the opposing party, who then used it in a filing with an administrative agency in a contested agency proceeding. The underlying agency proceeding was settled, but the corporation requested the D.C. Bar's opinion regarding the ethical implications of the adversary's conduct.
The D.C. Bar noted that this was an important issue, since "efforts are more commonly being used to ‘surreptitiously gain access to confidential communications.'" Id. (quoting Wichita Land & Cattle v. American Federal Bank, 148 F.R.D. 456, 458-59 (D.D.C. 1992)). Even though the D.C. Rules of Professional Conduct did not specifically address the use of purloined documents received from third parties, the D.C. Bar's prior opinion regarding the inadvertent disclosure of privileged documents (Opinion No. 256), allowed attorneys to review and use privileged documents that were disclosed during discovery, if they did so before the inadvertence of the disclosure is brought to their attention. The D.C. Bar stated that:
First, a lawyer cannot, consistent with the Rules of Professional Conduct, solicit or encourage a client or other person to obtain privileged or documentary evidence in an unlawful or unauthorized manner. If a lawyer receives materials that are privileged on their face, having a reasonable basis to conclude that the privilege has not been waived and that they have been obtained without authorization, he may violate Rules 1.15(b) and 8.4(c) by reviewing the material or by using it in an adversary hearing.
D.C. Bar Opinion No. 318. The D.C. Bar noted that the bars of Maryland (Opinion 89-53 (1989)), Virginia (Opinion 1076 (1988)), and Michigan (Opinion CI-970 (1983)) reached contrary results, under which "lawyers who receive privileged materials unsolicited have no obligation to make disclosure to a tribunal or an adverse party and may review and use such materials." Id.
The D.C. Bar noted that the "more difficult question" arose when the lawyer did not know the source of the purloined document. Here, "if a lawyer receives what appears to be a privileged document under highly suspicious circumstances, such as from a client or other person who says with a wink, ‘don't ask me how I got this,' the prudent receiving lawyer would make further inquiry prior to reviewing or using the document." Id. The D.C. Bar concluded that:
If, prior to his review, receiving counsel determines that a privileged document was obtained surreptitiously and without the knowledge or approval of the opposing party and its counsel, and has a reasonable basis to conclude that the privilege was not waived as to this document, receiving counsel should either return the document to opposing counsel, or make inquiry about its source and status prior to determining what course of action to take.
Id. On the other hand, if the purloined document is not marked as "confidential" or "privileged," and its status does not become readily apparent until after review of the document, then there would be no ethical violation:
A receiving lawyer would not violate Rules 1.15(b) and 8.4(c) by reviewing and using the document whose source is unknown if: 1) its privileged status is not readily apparent on its face; and 2) receiving counsel did not know that the document came from someone who was not authorized to disclose it. If the privileged status of the document does not become apparent to receiving counsel until after the document has been reviewed, as reflected in D.C. Opinion 256, it is too late for receiving counsel to take corrective action because the information cannot be purged from his mind and his obligation of zealous representation under Rule 1.3 at that point trumps confidentiality concerns.
Id. The D.C. Bar cautioned attorneys to ensure that privileged documents are adequately marked and protected from inadvertent disclosure or theft:
It also bears repeating that internal (or outside) counsel having the responsibility for protecting privileged documents that subsequently are "leaked" may violate Rules 1.1(a) and (b) and 1.6(a) and (e) if they fail to exercise reasonable care to prevent the unauthorized disclosure of their client's confidences and secrets.
In summary, given the importance of preserving the confidentiality of privileged documents, lawyers have an ethical responsibility to take reasonable measures to ensure that confidential documents are protected so that they do not fall into the hands of third parties. The failure of counsel to take reasonable measures to protect a client's confidences and secrets can both waive the privilege and result in ethics violations.
Id.
Purloined Documents and Information
An acrimonious employment discrimination lawsuit in New York, involving the former Manager of Health Services for the American Red Cross, resulted not only in the dismissal of the lawsuit but also the suspension for two years of the plaintiff's attorney, due to the conduct of the plaintiff and her attorney in deliberately using purloined documents. This case had a tortured procedural history, which is somewhat simplified herein.
The plaintiff (Lipin) filed her first law suit in state court. The following details are taken from the New York Court of Appeals decision which affirmed the dismissal, with prejudice, of her complaint. Lipin v. Bender, 84 N.Y.2d 562, 644 N.E.2d 1300 (1994). During a discovery conference at the courthouse, the plaintiff, now employed as a paralegal by her attorney (Wisehart), took her "usual seat" at the conference table, where she found a stack of documents, of which the top document was a memorandum by defense counsel (Weil, Gotshal & Manges) that summarized defense counsel's interview with a Red Cross employee. The plaintiff took the entire pile of documents, read through them while the attorneys were arguing the discovery motions, and took them back to the office, where she made three copies, and took one copy home. The plaintiff told Wisehart what she had done, and he said that he would not review the documents until he received a "second opinion." Wisehart later told the plaintiff that she should tell defense counsel, if asked, "that she had picked them up by mistake." The plaintiff refused, saying that she had deliberately picked up the documents, and would not return them unless asked to do so by defense counsel.
Wisehart then took a new tack, approaching defense counsel the next day, and demanding settlement in light of a "recent development," i.e., the documents that plaintiff had obtained, which allegedly bolstered her case. Wisehart refused to tell defense counsel how plaintiff had obtained the documents, other than to claim that it was legitimate, and that he had no control over plaintiff's use of her own copy of these documents, suggesting that she might disseminate them to the press. Defendants then moved for a protective order, and Wisehart consented to their request for interim relief, i.e., that plaintiff turn over all copies to him. Instead, the plaintiff then made a hand-copy of some of the documents, which she kept. The trial judge dismissed the complaint, in light of the plaintiff's deliberate and egregious violations of the court's order:
The actions of the plaintiff and her attorney were so egregious in taking this material that was clearly the attorney's work product, clearly interviews with the defendant's employees, clearly not for perusal by any other attorney or litigant in this litigation, so heinous that the only remedy, as much as I dislike to do this, is to dismiss the lawsuit. Otherwise, there is no meaning to privilege, there is no meaning to conduct among attorneys, and there is no rule of law.
Whatever was in these papers was confidential. That confidentiality was broken. It was repeatedly broken by both the litigant and the attorney, and cannot be countenanced by the Court. Therefore, I am dismissing the lawsuit in its entirety.
Id. (quoting trial court's unpublished decision). The Appellate Division and the Court of Appeals upheld this dismissal in light of plaintiff's repeated and flagrantly improper conduct:
The trial court, and the Appellate Division, could hardly have been clearer in their conclusions, characterizing plaintiff's conduct -- as well as that of her attorney -- as "heinous" and "egregious," a threat to the attorney-client privilege, to the concept of civilized, orderly conduct among attorneys, and even to the rule of law.
Moreover, there is ample support for the affirmed factual findings of wrongdoing by plaintiff, wholly apart from the conduct of her attorney that indisputably compounded it. Having deliberately taken the initial misstep of secretly reading what she recognized as attorneys' confidential documents, plaintiff was presented with several opportunities to purge herself and minimize prejudice to defendants. At each juncture, however, she chose the course of action that exacerbated the harm. Having read the documents, she concealed and then took them. Having taken them, she photocopied them, kept them accessible at the office, and insisted on retaining a set for herself at home. Upon being ordered by the court to return "everything in her possession," she made notes of the documents and, even after surrendering the final copy, held onto the notes. And although plaintiff was present when the trial court instructed Wisehart to secure the documents in his "vault," she placed them in a cabinet to which she had free access.
Id. Undeterred, the plaintiff then filed not one but two lawsuits in federal court, based on the same discrimination claims, which were dismissed on the grounds of claim preclusion. Lipin v. American Nat'l Red Cross, 113 F.3d 1229, 1997 WL 279912 (2d Cir. May 22, 1997).
Thereupon, the New York Supreme Court, Appellate Division, suspended Wisehart for two years, based on his misuse of these stolen documents. In re Wisehart, 721 N.Y.S.2d 356, 281 A.D.2d 23 (1st Dept. 2001) (per curiam); see also "New York Lawyer is Suspended for Two Years for Using Papers Client Took from Opponent," ABA/BNA Lawyers' Manual on Professional Conduct, Mar. 28, 2001, at 197. The court concluded that Wisehart, a member of the bar since 1955, violated Disciplinary Rules 1-102(A)(4) ("dishonesty, fraud, deceit or misrepresentation"); DR 1-102(A)(5) ("conduct that is prejudicial to the administration of justice"); DR 1-102(A)(7) ("any other conduct that adversely reflects on the lawyer's fitness as a lawyer"); DR 7-106(A) (disregarding or advising client to disregard tribunal's order); and DR 7-106(C)(6) ("engag[ing] in undignified or discourteous conduct which is degrading to a tribunal"), and ordered his suspension for two years, commencing on April 9, 2001. As of June 17, 2003, Mr. Wisehart has not reinstated his membership in the New York bar.
The New York State Bar Association issued an interesting opinion that reflects the potential use of modern technology to conduct surreptitious reviews of electronic documents. See N.Y. State Bar Ass'n, Committee on Professional Ethics, Opinion 749, "Use of Computer Software to Surreptitiously Examine and Trace E-Mail and Other Electronic Documents" (Dec. 14, 2001), available online at:
It is possible to insert "bugs" into e-mails that allow the sender to determine whether the recipient has forwarded that e-mail to third parties, and to receive "blind copies" of that forwarded e-mail - which would include the recipient's comments on the original e-mail. For example, an attorney may send a settlement proposal to opposing counsel, who then forwards it, with comments, to co-counsel or the client. If the sending attorney were able to surreptitiously read the recipient's comments, then the sending attorney would have a unique window into the opposing party's attorney work product and attorney-client communications. Id.
Similarly, if opposing counsel exchange electronic documents, such as discovery requests and responses, then it is possible for the recipient to "track the changes" to the document, or to read any "hidden" comments, unless the sender had the foresight to change his word processing software from the default settings (which allow anyone to read changes and hidden comments) to the setting whereby all such changes and hidden comments are deleted upon saving the file. Id.
Regardless of whether "bugs" are added to e-mails, or the recipient of electronic documents attempts to recreate the changes and hidden comments, the attorney is clearly accessing attorney-client communications and attorney work product through the surreptitious use of electronic technology. Id. The N.Y. State Bar Association readily concluded that such conduct would violate Disciplinary Rule 1-102(A)(4) (prohibiting attorneys from engaging in conduct "involving dishonesty, fraud, deceit or misrepresentation") and Disciplinary Rule 1-102(A)(5) (prohibiting attorneys from engaging in "conduct that is prejudicial to the administration of justice"). Id. Thus, the N.Y. State Bar Association concluded that:
The circumstances of the present inquiry present an even more compelling case against surreptitious acquisition and use of confidential or privileged information than that presented by the "inadvertent" or "unauthorized" disclosure decisions. First, to the extent that the other lawyer has "disclosed," it is an unknowing and unwilling, rather than inadvertent or careless, disclosure. In the "inadvertent" and "unauthorized" disclosure decisions, the public policy interest in encouraging more careful conduct had to be balanced against the public policy in favor of confidentiality. No such balance need be struck here because it is a deliberate act by the receiving lawyer, not carelessness on the part of the sending lawyer, that would lead to the disclosure of client confidences and secrets.
Id. Hence, a "lawyer may not make use of computer software applications to surreptitiously ‘get behind' visible documents or to trace e-mail." Id.
Spoliation of Evidence
Spoliation of evidence "is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation." West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). The Second Circuit explained the nature of the obligation to preserve evidence:
This obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation - most commonly when suit has already been filed, providing the party responsible for the destruction with express notice, but also on occasion in other circumstances, as for example when a party should have known that the evidence may be relevant to future litigation.
Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998); see also Mathias v. Jacobs, 197 F.R.D. 29, 37 (S.D.N.Y. 2000) ("Obviously service of a discovery demand places a party on notice to preserve the materials explicitly requested, but the duty to preserve arises whenever a party has been served with a complaint or anticipates litigation.").
The failure to preserve relevant evidence "can support an inference that the evidence would have been unfavorable to the party responsible for its destruction." Kronisch, 150 F.3d at 126; accord West, 167 F.3d at 779 ("It has long been the rule that spoliators should not benefit from their wrongdoing, as illustrated by that favourite maxim of the law, omnia presumuntur contra spoliatorem [all things are presumed against a despoiler]."). Even if a party "does not own or control the evidence, he still has an obligation to give the opposing party notice of access to the evidence or of the possible destruction of the evidence if the party anticipates litigation involving that evidence." Silvestri v. General Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001).
Spoliation can arise from either the regular operation of "document retention" policies or the intentional destruction of "smoking gun" documents, at a time when litigation is underway or reasonably foreseeable.
In light of the recent criminal indictment and prosecution of Arthur Andersen for advising Enron to destroy its documents, it is increasingly important that litigators and in-house counsel be fully aware of the ethical, civil, and criminal consequences of the spoliation of evidence.
Spoliation is governed by the ethical rules, record retention statutes and regulations, and the obstruction of justice statutes. Sanctions for spoliation can be imposed pursuant to the Federal Rules of Civil Procedure, or the court's inherent authority, and can include default judgment against the defendant, dismissal of the plaintiff's claims, monetary sanctions payable to the court and/or the opposing party, precluding the offending party from introducing evidence relating to the events described by the affected documents, or the drawing of adverse inferences against the offending party.
A. Ethical Rules Governing Spoliation.
Rule 3.4(a), ABA Model Rules, prohibits a lawyer from engaging in spoliation:
RULE 3.4: FAIRNESS TO OPPOSING PARTY AND COUNSEL
A lawyer shall not:
(a) unlawfully obstruct another party's access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act; . . .
The Commentary to Rule 4.2 explains, in relevant part, that:
[1] The procedure of the adversary system contemplates that the evidence in a case is to be marshalled competitively by the contending parties. Fair competition in the adversary system is secured by prohibitions against destruction or concealment of evidence, improperly influencing witnesses, obstructive tactics in discovery procedure, and the like.
[2] Documents and other items of evidence are often essential to establish a claim or defense. Subject to evidentiary privileges, the right of an opposing party, including the government, to obtain evidence through discovery or subpoena is an important procedural right. The exercise of that right can be frustrated if relevant material is altered, concealed or destroyed. Applicable law in many jurisdictions makes it an offense to destroy material for purpose of impairing its availability in a pending proceeding or one whose commencement can be foreseen. Falsifying evidence is also generally a criminal offense. Paragraph (a) applies to evidentiary material generally, including computerized information. . . .
Disciplinary Rule 7-109(A), as adopted in New York, similarly provides that:
A lawyer shall not suppress any evidence that the lawyer or the client has a legal obligation to reveal or produce.
California Rule of Professional Conduct, Rule 5.220, provides that:
A member shall not suppress any evidence that the member or the member's client has a legal obligation to reveal or produce.
Taken together, these ethical provisions, and their variations among the other states, express a common principle that all attorneys are under a fundamental ethical obligation to ensure that they, and their clients, do not destroy, alter, or conceal, relevant documents.
B. EEOC Regulations Governing Spoliation.
The EEOC has promulgated regulations that require employers covered by Title VII and the Americans with Disabilities Act to preserve all records relating to employment decisions:
Any personnel or employment record made or kept by an employer (including but not necessarily limited to requests for reasonable accommodation, application forms submitted by applicants and other records having to do with hiring, promotion, demotion, transfer, lay-off or termination, rates of pay or other terms of compensation, and selection for training or apprenticeship) shall be preserved by the employer for a period of one year from the date of the making of the record or the personnel action involved, whichever occurs later. In the case of involuntary termination of an employee, the personnel records of the individual terminated shall be kept for a period of one year from the date of termination. Where a charge of discrimination has been filed, or an action brought by the Commission or the Attorney General, against an employer under Title VII or the ADA, the respondent employer shall preserve all personnel records relevant to the charge or action until final disposition of the charge or the action. The term "personnel records relevant to the charge," for example, would include personnel or employment records relating to the aggrieved person and to all other employees holding positions similar to that held or sought by the aggrieved person and application forms or test papers completed by an unsuccessful applicant and by all other candidates for the same position as that for which the aggrieved person applied and was rejected. The date of "final disposition of the charge or the action" means the date of expiration of the statutory period within which the aggrieved person may bring an action in a U.S. District Court or, where an action is brought against an employer either by the aggrieved person, the Commission, or by the Attorney General, the date on which such litigation is terminated.
29 C.F.R. § 1602.14 (emphasis added) (similar regulations govern public schools, §§ 1602.39, 1602.40, and all institutions of higher education, § 1602.48).
Notwithstanding these regulations, plaintiff's counsel would be well advised to send a document-preservation letter to the employer's counsel at the outset of litigation, or at the time of filing an EEOC charge of discrimination. This letter should remind the employer's counsel of its obligation to preserve all records relating to the employee's claims, and demand that the employer cease destruction of such documents and cease recycling of electronic back-up tapes and similar electronic records. Similarly, defense counsel should ensure that their clients have and implement proper policies and procedures for retaining documents, including electronic files and e-mails, that are or may be related to employment decisions.
C. Statutes Governing Spoliation of Evidence.
Spoliation of evidence may be a criminal violation of federal and state obstruction of justice statutes, and may constitute an independent tort under state statutory or common law. See generally J.S. Kinsler & A.R. Keys MacIver, "Demystifying Spoilation of Evidence," ABA Tort & Ins. L.J. 761, 777-78 (1999) (discussing state spoliation tort law).
The federal obstruction of justice statutes were amended by the Sarbanes-Oxley Act, Pub. L. No. 107-204 (July 30, 2002) to provide for increased criminal penalties for the spoliation of evidence, and to make clear that willful document destruction is sanctionable. The general obstruction statute, Section 1503, proscribes the intentional interference with the administration of justice:
(a) Whoever . . . corruptly, or by threats or force or by threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice, shall be punished as provided in subsection (b).
18 U.S.C. § 1503(a). Most, if not all, states have comparable obstruction of justice statutes applicable to proceedings in state courts or before state agencies. See, e.g., D.C. Code § 22-723 (tampering with documents is a felony); N.Y. Penal Law, §§ 215.35, 215.40 (same).
The federal witness tampering statute has two provisions, Section 1512(b) and (c), the latter of which was enacted in 2002:
(b) Whoever knowingly uses intimidation, threatens, or corruptly persuades another person, or attempts to do so, or engages in misleading conduct towards another person, with intent to --
(2) cause or induce any person to
(A) withhold testimony, or withhold a record, document, or other object, from an official proceeding;
(B) alter, destroy, mutilate, or conceal an object with intent to impair the object's integrity or availability for use in an official proceeding; . . .
shall be fined under this title or imprisoned not more than ten years, or both.
(c) Whoever corruptly--
(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object's integrity or availability for use in an official proceeding; . . .
shall be fined under this title or imprisoned not more than 20 years, or both.
18 U.S.C. § 1512(b), (c) (emphasis added). Finally, the Sarbanes-Oxley Act added a new provision, Section 1519, which criminalizes document destruction while a federal investigation is underway:
Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States . . . or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.
18 U.S.C. § 1519 (emphasis added). This provision would cover actions taken while an EEOC charge or investigation is pending. It remains to be seen how the courts will apply the new provisions in Sections 1512(c) and 1519.4 Section 1515(c) has a safe harbor provision:
(c) This chapter does not prohibit or punish the providing of lawful, bona fide, legal representation services in connection with or anticipation of an official proceeding.
18 U.S.C. § 1515(c).
One district court held that the destruction of documents in employment litigation can be the basis for a criminal prosecution under Section 1503. United States v. Lundwall, 1 F. Supp. 2d 249 (S.D.N.Y. 1998). In Lundwall, the two defendants, former corporate officials of Texaco, were charged with having destroyed documents after receiving discovery requests from plaintiffs in a race discrimination class action. Id. at 250. Judge Parker recognized that while Section 1503 is ordinarily applied to conduct during a criminal proceeding, as opposed to a civil action, several courts have applied Section 1503 to civil cases. Id. at 253. The result of defendants' conduct in the underlying civil action unquestionably implicated Section 1503:
Here . . . there is no uncertainty that the alleged destruction of documents impaired a pending judicial proceeding. Indeed, withholding and destroying relevant documents in a lawsuit means that the documents will never be considered by opposing litigants, their counsel, or the Court. This conduct necessarily and fundamentally compromises federal court proceedings and . . . has the natural and probable effect of interfering with the due administration of justice.
Id. at 254. The court concluded that the traditional remedies for sanctions available through civil litigation would be insufficient, since the two defendants "appear to have been acting independently of their employer and its attorneys." Id. at 255.
If an attorney is convicted of obstruction of justice - a felony - then that conviction can result in mandatory disbarment of the attorney, since the attorney committed a crime of moral turpitude. See, e.g., In re Borders, 797 A.2d 716 (D.C. 2002).
D. Sanctions for the Spoliation of Evidence.
When spoliation has occurred in discovery, the district courts can impose sanctions under Rule 37, Fed. R. Civ. P., which governs discovery, or pursuant to the court's inherent authority. The courts can exercise their inherent power to control litigation, Chambers v. NASCO, Inc., 501 U.S. 32, 43-45 (1991), through the use of sanctions in order "to preserve the integrity of the judicial process in order to retain confidence that the process works to uncover the truth." Silvestri v. General Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001); see generally Gregory R. Joseph, Sanctions: The Federal Law of Litigation Abuse (3d ed. 2000 & Supp. 2004).
Rule 37, Fed. R. Civ. P., provides in relevant part that:
(b) Failure to Comply With Order. . . .
(2) Sanctions by Court in Which Action is Pending. If a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subdivision (a) of this rule or Rule 35, or if a party fails to obey an order entered under Rule 26(f), the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence;
(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party; . . .
In lieu of any of the foregoing orders or in addition thereto, the court shall require the party failing to obey the order or the attorney advising that party or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
(c) Failure to Disclose; False or Misleading Disclosure; Refusal to Admit. (1) A party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed. In addition to or in lieu of this sanction, the court, on motion and after affording an opportunity to be heard, may impose other appropriate sanctions. In addition to requiring payment of reasonable expenses, including attorney's fees, caused by the failure, these sanctions may include any of the actions authorized under Rule 37(b)(2)(A), (B), and (C) and may include informing the jury of the failure to make the disclosure.
Rule 37(b)(2), (c)(1), Fed. R. Civ. P. (emphasis added). Rule 37(b)(2), unlike Rule 37(c)(1), only applies to violations of discovery-related court orders.
Another source for spoliation sanctions in civil litigation is Rule 11, Fed. R. Civ. P., which provides in relevant part that:
(b) Representations to Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,--
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.
Rule 11(b), Fed. R. Civ. P. (emphasis added). Rule 11 does not apply to discovery-related conduct, which is governed by Rule 37. See Rule 11(d) ("Inapplicability to Discovery").
Although Rule 11 sanctions seldom occur in the context of spoliation of evidence, if a party uses altered or forged documents to support a pleading, then that party can be subject to Rule 11 sanctions. See Jimenez v. Madison Area Tech. College, 321 F.3d 652 (7th Cir. 2003). In Jimenez, a gender and race discrimination case, the plaintiff initially filed a worker's compensation claim, which was supported by various "inflammatory letters and e-mails allegedly written by various colleagues and supervisors." Id. at 653. The employer reviewed the documents and determined that they were forged or altered, and the worker's compensation claim was denied. Id. at 654. Nonetheless, the employee then filed a civil complaint, which quoted from these same forged letters and altered e-mails. Id. The defendants promptly filed a Rule 11 motion; the district court held an evidentiary hearing and found that plaintiff and her attorney "had used and filed ‘obviously fraudulent documents' in support of the fictitious allegations of racial discrimination" in her complaint. Id. at 655-56. The district court dismissed the suit with prejudice, and required the plaintiff's attorney to pay $16,473 to the defendants. Id. at 656. The Seventh Circuit upheld these sanctions on appeal, and further held that the appeal itself was frivolous and sanctionable under Rule 38, Fed. R. App. P. (allowing "just damages and single or double costs" for filing a frivolous appeal). Id. at 656-58.
Sanctions can be imposed on the attorney, the party, or both. A district court in Chicago imposed a $10,000 fine on the defendant's CEO, for breach of the duty to preserve relevant evidence in a securities class action. Danis v. USN Communications, Inc., No. 98 C 7482, 2000 WL 1694325, at *6, 2000 U.S. Dist. LEXIS 16900 (N.D. Ill. Oct. 23, 2000). The court explained that "this fine is appropriate as a sanction to impress upon Mr. Elliott the seriousness of the duty of preservation, and to deter others from failing to properly discharge that duty." Id.; see also L.M. Arent, et al., "Ediscovery: Preserving, Requesting, & Producing Electronic Information," 19 Santa Clara Computer & High Tech. L.J. 131, 142 (2002).
In addition, the court can report the offending attorney(s) to the relevant disciplinary authority, which may initiate an investigation leading to a reprimand, suspension, or even disbarment of the attorney. The Sixth Circuit suggested that the courts could even use the Internet to reprimand attorneys:
With the advent of the Internet, a public reprimand directly by the court is also a viable option. All federal courts have embraced the Internet, though some with more success than others. Disciplinary postings can be placed on a page associated with the court's website. The appropriate public posting might list the attorney's name, details of the misconduct, and the court's disapproval.
In re Smothers, 322 F.3d 438, 443 (6th Cir. 2003). It remains to be seen whether the district courts in the Sixth Circuit, or in other circuits, will adopt this interesting suggestion.
E. Examples of Sanctions for the Spoliation of Evidence.
One of the earliest, and most widely-cited, district court decisions involving spoliation of evidence was an antitrust case in which the defendant actively destroyed relevant documents and computer files after being served with discovery. Wm. T. Thompson Co. v. General Nutrition Corp., 593 F. Supp. 1443, 1446 (C.D. Cal. 1984). Even after a Special Master was appointed to oversee discovery, and had entered several document preservation orders, the defendant continued to search for and destroy relevant documents. Id. at 1447-50. The court held that defendant's pervasive, deliberate, and inexcusable conduct clearly reflected bad faith. Id. at 1454. In a widely-quoted phrase, the court described the propriety of imposing sanctions:
Sanctions may be imposed against a litigant who is on notice that documents and information in its possession are relevant to litigation, or potential litigation, or are reasonably calculated to lead to the discovery of admissible evidence, and destroys such documents and information. While a litigant is under no duty to keep or retain every document in its possession once a complaint is filed, it is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery, and/or is the subject of a pending discovery request.
Id. at 1455. Given the defendant's conduct, the court concluded that "default and dismissal are proper sanctions in view of GNC's willful destruction of documents and records that deprived Thompson of the opportunity to present critical evidence on its key claims to the jury." Id. at 1456. The court rejected imposing lesser sanctions - such as precluding defendant from introducing certain evidence - because "entry of a preclusion order would virtually compel a directed verdict" for the plaintiff, id., and harsher sanctions were merited:
Imposition of severe sanctions is required in this case by the severity of the abuses that took place. The record shows that GNC deliberately and purposefully undertook a program to impede and obstruct the litigation process, presumably because it believed that the case would be lost if all the evidence ever came to light. Imposition of a lesser sanction would only reward GNC for its misconduct in this litigation.
Id. The court also upheld the award of attorneys' fees to the plaintiff, since "imposition of monetary sanctions in addition to default and dismissal are necessary to fully compensate Thompson for the costs entailed by GNC's misconduct." Id.
Over the past two decades, the district courts have not hesitated to impose sanctions on a party for spoliation of evidence in employment discrimination cases. See Broccoli v. Echostar Communications Corp., 229 F.R.D. 506, 510, 513 (D. Md. 2005) (finding that defendant was guilty of spoliation for destroying emails within 21 days of their creation, and awarding attorneys' fees of $16,097 as sanctions in sexual harassment and retaliation case); Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 437-38 (S.D.N.Y. 2004) (awarding adverse inference instruction as sanction for defendant's willful destruction of relevant emails and sanctioning counsel for tardy production of relevant documents in gender discrimination case); cf. Liggett v. Rumsfeld, No. Civ.A. 04-1363 (GBL), 2005 WL 2099782, at *7 (E.D. Va. Aug. 29, 2005) (denying plaintiff's request for an adverse inference and holding that government's failure to preserve the plaintiff's hard drive alone does not "in and of itself suggest fraud or fabrication of evidence" in a racial discrimination and retaliation case).
An early, and widely-cited, Title VII gender discrimination case enumerated four categories of sanctions that the courts have adopted for spoliation of evidence:
1. A number of courts have incorporated a party's destruction of documents into trial proceedings. Courts have permitted the fact-finder to draw inferences adverse to the document destroying party. Similar to this sanction is an adjustment of the level of proof required of the aggrieved party.
2. Another common remedy utilized by courts to punish and deter discovery abuse is imposition of monetary sanctions. . . .
3. A party which has destroyed documents may also be held accountable for the fees and costs of depositions, interrogatories, and supplemental discovery costs associated with willful concealment.
4. A court may also impose monetary sanctions [payable to the court] to rectify unnecessary consumption of its time and resources.
Capellupo v. FMC Corp., 126 F.R.D. 545, 552-53 (D. Minn. 1989) (emphasis added) (collecting cases). Here, the two plaintiffs had put their employer's EEO manager on notice that they were contemplating bringing a gender discrimination class action lawsuit, id. at 546, upon which the company's managers commenced a systematic destruction of the employer's "documents relating to [defendant's] employment practices and the employee relations department's personally-held records relating to equal employment opportunity and employee complaints of discrimination." Id. at 548. Indeed, one manager obtained, from ten department heads, "office files concerning sex discrimination matters and affirmative action plans. After dutifully removing paper clips and staples, every document was shredded." Id. at 549. The result is that:
The hearing testimony indicated, and the Court finds, that at a minimum, FMC destroyed (a) historically important affirmative action plans, (b) personally-maintained files concerning employee discrimination claims, (c) files concerning personal investigations of complaints of discrimination, (d) personal records of cases individually and informally conciliated, and (e) records of terminations and employee interviews (including resumes). The evidence indicated that many "document boxes" of items were destroyed.
Id. at 549. Notwithstanding this widespread document destruction, the court declined to impose default judgment, since the plaintiffs had other evidence concerning the employer's liability, and could still attempt to prove their case, so the court awarded plaintiffs their attorneys' fees and costs resulting from defendant's document destruction. Id. at 553. Further, those fees were to be multiplied by a factor of two, which "is unquestionably justified given defendant's continued attempted deception of opposing counsel and this court." Id.
Two courts held that where a party had surreptitiously made tape recordings of conversations that were relevant to the plaintiff's employment discrimination claim, but that party then lost or destroyed those tape recordings, that sanctions were warranted. Gratton v. Great Am. Communications, 178 F.3d 1373, 1374-75 (11th Cir. 1999) (per curiam) (upholding dismissal of Title VII lawsuit where plaintiff lost or destroyed tape recordings and also refused to release his medical records); Barsoum v. NYC Housing Auth., 202 F.R.D. 396, 401 (S.D.N.Y. 2001) (precluding plaintiff from offering evidence relating to meeting as sanction for negligently losing tape recording of that meeting).
In Barsoum, Judge Sweet explained that the plaintiff "had a duty to preserve the tape recording of her meeting with Meyer because, given that she was already receiving assistance from counsel at that time, she knew or should have known that it was reasonably foreseeable that the tape would be relevant to future litigation. Barsoum, 202 F.R.D. at 400. Even though the plaintiff had negligently lost the tape recording, she still had written notes taken from the tape, which her counsel attempted to use during a deposition of the supervisor:
Hunte did not disclose the existence of either the [lost] tape or Barsoum's notes of that tape in response to the Defendants' discovery requests. However, Hunte used Barsoum's notes at Meyer's deposition, essentially reading verbatim from Barsoum's notes of the tape recording to pose questions to Meyer. At some point during the deposition, Hunte's strategy became apparent to counsel for the Defendants. Hunte confirmed that there was an undisclosed tape recording and offered to provide the Defendants with a copy of Barsoum's notes. The Defendants declined to accept the notes, and refused to continue with Meyer's deposition.
Id. at 399. The court refused to accept the plaintiff's attorney's explanation for her conduct:
Hunte maintains that she did not disclose this information because she believed the notes to be inadmissible, and was hoping the tape would be recovered, at which time she intended to make full disclosure to the Defendants. This is not an acceptable excuse for her conduct, which was in violation of Barsoum's discovery obligations, and, indeed, amounted to bad faith.
Id. at 400. Nonetheless, Judge Sweet did recognize that the preclusion of evidence sanction would be modified if the defendants decided to use the tape recorded meeting in their case: If, however, the Defendants themselves wish to introduce evidence of the meeting into this litigation then a different sanction will apply. In that event, Barsoum will be entitled to present evidence regarding the meeting but the jury will be informed of the absence of the tape, and will be instructed that they may draw an adverse inference against Barsoum regarding the January 1998 meeting with Meyer. Barsoum's "notes," however, may not be used in any way, such as to prepare witnesses, including Barsoum herself, or to refresh their recollection.
Id. at 401.
However, even when the district court imposes sanctions for spoliation, the offending party may obtain a reversal, or reduction in the level of sanctions, on appeal. See generally L. Bernabei & A.R. Kabat, "How Revisions to the Federal Discovery Rules Will Increase Rather Than Curb Discovery Abuse," 1 J. Empl. Discr. L. 101, 105-06 (2000) (concluding that "not only must the trial judge jump through numerous hoops in order to impose sanctions under Rule 37, but also the appellate court will be all too willing to exercise the alleged benefits of its 20/20 hindsight to strike down sanctions, including default judgments, that somehow seem too harsh for the guilty party"); S.R. Bough, "Spitting in a Judge's Face: The 8th Circuit's Treatment of Rule 37 Dismissal and Default Discovery Sanctions," 43 S.D. L. Rev. 36, 49 (1998).
For example, the U.S. Court of Appeals for the D.C. Circuit twice reversed district court orders that granted default judgment for spoliation of evidence in employment discrimination cases. See Webb v. District of Columbia, 146 F.3d 964 (D.C. Cir. 1998) (employer discarded portions of plaintiff's personnel file and other files relevant to the positions to which plaintiff applied); Shepherd v. American Broadcasting Corp., 62 F.3d 1469 (D.C. Cir. 1995) (employer removed plaintiff's name from a key memorandum, and failed to preserve all copies of another key memorandum). Even so, the district court, on remand, reinstated default judgment in Webb, on the grounds that the defendant's conduct satisfied the appellate court's framework for awarding such severe sanctions, and that the defendant had a well-documented history of engaging in obstructionist conduct during discovery in this and other cases. Webb v. District of Columbia, 189 F.R.D. 180 (D.D.C. 1999).
Spoliation of evidence is eminently sanctionable conduct, yet it is conduct that can and should be prevented through proper directives to clients of their obligations to preserve all evidence that is or may be relevant to pending or future litigation.
Perjury by Clients or Witnesses
An ethical issue that more often arises in criminal cases, but can arise in employment litigation, involves perjury by clients or witnesses, while they are testifying under oath during a deposition or at trial. The Fourth Circuit recently upheld a conviction of Shirley Smith, a former federal employee who testified, during an administrative hearing at the EEOC, about alleged sexual harassment by her supervisor. After the ALJ found that "the evidence tended to show that Harris [supervisor] did not sexually harass Smith [employee], but rather, that sexual relations between Smith and Harris were consensual," the U.S. Attorney's Office filed a nine count indictment against the plaintiff-employee. United States v. Smith, 105 Fed. Appx. 506, 507 (4th Cir. 2004) (per curiam). The indictment had four counts of false statements, in violation of 18 U.S.C. § 1001(a)(2), three perjury counts, in violation of 18 U.S.C. § 1623, and two false claim counts, in violation of 18 U.S.C. § 287. Ultimately, the jury convicted her of all the counts, except for two of the three perjury counts, which the district court had dismissed.
The Fourth Circuit affirmed the conviction, but remanded for resentencing, holding that the 27 month sentence was improperly calculated. Smith, 105 Fed. Appx. at 508-10. The district court then imposed an amended sentence of 21 months, to be followed by two years' supervised release. United States v. Smith, No. CR-02-313, Amended Judgment (D.S.C. Sept. 17, 2004) (Docket No. 93). Ms. Smith appealed anew to the Fourth Circuit. United States v. Smith, No. 04-4813 (4th Cir. 2004). According to the Bureau of Prisons website, she is currently incarcerated, with a projected release date in 2005. It remains to be seen whether the federal perjury and false statement statutes will be similarly used in other employment cases.
Tape Recording Issues
Another ethical issue involves the surreptitious tape recording of conversations by a client or an attorney, in an attempt to preserve evidence without the knowledge of the opposing party. In most jurisdictions, it is legal for one party to a conversation to record that conversation (the "one-party consent" rule). However, at least ten states - California, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, New Hampshire, Pennsylvania, and Washington - require the consent of both parties before a conversation can be recorded. See ABA Formal Opinion 01-422, at n.30 (2001); G. Stevens & C. Doyle, Privacy: Wiretapping and Electronic Eavesdropping, at 69-70 (2002). Hence, in those states, a client or an attorney cannot legally record or monitor workplace or other communications without the consent of all parties to those communications.
Some ethical commissions have addressed the issue of whether tape recording of communications by attorneys is sanctionable conduct under the Rules of Professional Conduct, regardless of whether it is legal under state law, on the grounds that such conduct impugns the professional reputation of lawyers, or otherwise implicates specific ethical rules.
An attorney can still be liable under the Rules of Professional Conduct (or the older Code of Professional Responsibility) for initiating or recommending surreptitious monitoring, or using the fruits of the monitoring for evidentiary purposes, even if the tape recording is legal. For example, if employment discrimination litigation is initiated or threatened, an employer's counsel may recommend that the workplace communications of the plaintiff or the alleged discriminator be monitored or reviewed.
If the attorney is practicing in a state that requires consent of all parties to a communication before that communication can be monitored, and that consent is not obtained, then the attorney likely violated Rule 8.4 (proscribing misconduct, including violations of the law and dishonesty; cf. Disciplinary Rule 1-102) and Rule 4.4 (proscribing use of illegally acquired evidence; cf. Disciplinary Rule 7-102(A)(8)), absent a showing that the statutory "rights or property" exception is applicable. See American Bar Association, Formal Opinion 01-422, "Electronic Recording by Lawyers without the Knowledge of All Participants," § 3 (June 24, 2001). An attorney who falsely denies that a conversation is being recorded is likely to have violated Rule 4.1 (proscribing making a false statement of material fact to a third person; cf. Disciplinary Rule 7-102(A)(5)). Id. at § 4.
Although the ABA had previously concluded that a lawyer could not electronically record any conversation without the consent of all parties to the conversation, see ABA Formal Opinion 337 (Aug. 10, 1974), the ABA rescinded that opinion in June 2001, on the grounds that this blanket rule was contrary to the law in the majority of the states, which allow for one-party consent to recording of conversations, and had proven unworkable in the criminal investigatory context. See ABA Formal Opinion 01-422, at § 2. The ABA also noted that some state courts and bars, including Michigan and Virginia, had initially adopted the blanket rule, but subsequently recognized various exceptions. Id.
The ABA did conclude that an attorney's surreptitious recording of conversations with his own client was ill advised, except in circumstances where the client forfeited the right of loyalty or confidentiality, such as by expressing an intent to commit a criminal act that would cause imminent death or bodily harm. Id.; see generally "ABA Panel Jettisons Watergate-Era Opinion Against Secretly Recording Conversations," 70 U.S.L.W. 2072 (Aug. 7, 2001).
In 1992, the D.C. Bar held that the D.C. Rules of Professional Conduct do not prohibit an attorney from tape recording a conversation to which he or she is a party. See D.C. Bar Legal Ethics Comm., Op. 229 (1992).
The Virginia Bar took a narrower approach, allowing tape recording where the lawyer was "engaged in a criminal investigation or a housing discrimination investigation" or "to record a conversation involving threatened or actual criminal activity where the lawyer is a victim of such threat," but declining to determine whether tape recording was proper in other circumstances. See Va. Bar Legal Ethics Op. 1738 (Aug. 13, 2000) (http://www.vacle.org/opinions/1738.htm). Subsequently, the Virginia Bar concluded that attorneys working for a federal intelligence agency could similarly engage in surreptitious tape recording as part of an undercover investigation. See Va. Bar Legal Ethics Op. 1765 (June 13, 2003) (http://www.vacle.org/opinions/1765.htm).
Similarly, the Tennessee Supreme Court amended the Tennessee Rules of Professional Conduct, by deleting a comment to Rule 8.4(c) (which governs dishonesty, deceit, fraud or misrepresentation) that originally included "the secret or surreptitious recording of a conversation or the actions of another." Instead, this comment now reads "The lawful secret or surreptitious recording of a conversation or the actions of another for the purpose of obtaining or preserving evidence does not, by itself, constitute conduct involving deceit or dishonesty." Tenn. R. Prof. Cond., Rule 8.4, cmt. 5 (2003); see generally "Tennessee Supreme Court Orders Changes To Its Recently Adopted Disciplinary Rules," 71 U.S.L.W. 2724 (May 20, 2003).
The Association of the Bar of the City of New York issued a Formal Opinion in 2003 regarding surreptitious tape recording. This opinion concluded that attorneys may not routinely tape record conversations without disclosing the act of recording, but may do so if the attorney reasonably believes that disclosure of the tape recording would impair pursuit of a societal good, such thwarting ongoing criminal conduct or other significant misconduct such as individuals who have made threats against the attorney, the attorney's client, or regarding a witness whom the attorney has reason to believe may commit perjury. However, "merely wishing to obtain an accurate record of what was said does not justify undisclosed taping." See Formal Op. 2003-02, Undisclosed Taping of Conversations by Lawyers, Association of the Bar of the City of New York (2003) (online at: http://www.abcny.org/eth2003_2.html).
Some courts have readily sanctioned attorneys for engaging in such conduct. See, e.g., Midwest Motor Sports, Inc. v. Arctic Cat Sales, Inc., 347 F.3d 693 (8th Cir. 2003) (upholding evidentiary sanction of excluding evidence from tape recordings, but agreeing with district court that monetary sanctions were not proper given that this was a novel area of the law); Nissan Motor Co. v. Nissan Computer Corp., 180 F. Supp. 2d 1089, 1096-97 (C.D. Cal. 2002) ("It is wrong to use the coercive and privacy-violating technique of tape recording (or threatening to tape record) what the Court finds to be confidential communications."); People v. Selby, 198 Colo. 386, 390, 606 P.2d 45, 47 (1979) ("Inherent in the undisclosed use of a recording device is an element of deception, artifice, and trickery which does not comport with the high standards of candor and fairness by which all attorneys are bound."). Although two of these cases concerned surreptitious monitoring of communications with opposing counsel (Nissan Motor) or the judge in his chambers (Selby, leading to disbarment of the attorney), their principles are applicable to the context of workplace communications. Therefore, attorneys in those jurisdictions should exercise caution before advising their clients to engage in monitoring of workplace communications, particularly in response to litigation.
Other courts have allowed surreptitious tape recording by clients or by the attorney's investigators, where the recordings did not solicit privileged information or attempt to trick the other party into engaging in conduct that they would not otherwise do. See, e.g., Mena v. Key Food Stores Co-op., Inc., 758 N.Y.S.2d 246, 247 (N.Y. Sup. Ct. 2003) (racial harassment claims; plaintiffs' attorney directed them to tape record manager who made racist remarks; plaintiffs' attorney then disseminated the tapes to the local media); Hill v. Shell Oil Co., 209 F. Supp. 2d 876, 880 (N.D. Ill. 2002) (putative race discrimination class action by customers; plaintiffs videotaped station employees); Gidatex, S.r.L. v. Campaniello Imports, Ltd., 82 F. Supp. 2d 119, 122-26 (S.D.N.Y. 1999) (trademark infringement; plaintiff's attorney hired private investigators to record conversations with defendants' salespersons); see generally S. Seidenberg, "Lawyer May Instruct On Secret Taping," Nat'l L.J., Apr. 28, 2003, at A-9.
Assuming that one party intends to make use of surreptitious tape recordings in litigation, the question then arises as to when those tapes must be produced during discovery - before or after the deposition(s) of the person(s) whose conversations were recorded. The courts are split on this issue, with some requiring immediate production on the grounds that the taper should not have an advantage over the deponent, and others allowing delayed production on the grounds that the recording was prepared for litigation and the witness should not have the opportunity to fabricate their recollections during the deposition. See Perkins v. Memorial Sloan-Kettering Cancer Ctr., 2003 WL 1831246, 91 Fair Empl. Prac. Cases (BNA) 801 (S.D.N.Y. 2003) (collecting cases). In Perkins, the court adopted neither alternative, instead ordering both parties to deposit all recorded conversations and transcripts into a safe deposit box, with neither party to have access to those materials until after the completion of discovery. Id.
Coaching of Witnesses During Depositions
The courts have expressed their displeasure with attorneys who have "coached" their clients, or their client's witnesses, during depositions taken by the adverse party. Rule 30(d)(1), Fed. R. Civ. P., expressly provides that an attorney's objections during a deposition must not be in a "suggestive" manner that would constitute witness coaching:
Any objection during a deposition must be stated concisely and in a non-argumentative and non-suggestive manner. . . .
Rule 30(d)(1), Fed. R. Civ. P. This sentence was added in 1993. Sanctions, including costs and attorney's fees, pursuant to Rule 30(d)(3)-(4), Fed. R. Civ. P., can be imposed for improper conduct of a deposition. One of the first decisions to apply this provision of Rule 30(d)(1) - indeed, decided while this provision was still pending - took a hard line against coaching. Hall v. Clifton Precision, 150 F.R.D. 525 (E.D. Pa. 1993). The court in Hall aptly recognized that the deponent is not to be the ventriloquist's dummy:
The underlying purpose of a deposition is to find out what a witness saw, heard, or did - what the witness thinks. A deposition is meant to be a question-and-answer conversation between the deposing lawyer and the witness. There is no proper need for the witness's own lawyer to act as an intermediary, interpreting questions, deciding which questions the witness should answer, and helping the witness to formulate answers. The witness comes to the deposition to testify, not to indulge in a parody of Charlie McCarthy, with lawyers coaching or bending the witness's words to mold a legally convenient record. It is the witness - not the lawyer - who is the witness.
Hall, 150 F.R.D. at 528. The court also rejected the approach taken by certain lawyers to claim ignorance of the question being asked, since that also constituted witness coaching:
I also note that a favorite objection or interjection of lawyers is, "I don't understand the question; therefore the witness doesn't understand the question." This is not a proper objection. If the witness needs clarification, the witness may ask the deposing lawyer for clarification. A lawyer's purported lack of understanding is not a proper reason to interrupt a deposition. In addition, counsel are not permitted to state on the record their interpretations of questions, since those interpretations are irrelevant and often suggestive of a particularly desired answer.
Id. at 530 n.10. The court then set forth an elaborate order for the conduct of depositions, of which four provisions are relevant to coaching of witnesses:
4. Counsel shall not make objections or statements which might suggest an answer to a witness. Counsels' statements when making objections should be succinct and verbally economical, stating the basis of the objection and nothing more.
5. Counsel and their witness-clients shall not engage in private, off-the- record conferences during depositions or during breaks or recesses, except for the purpose of deciding whether to assert a privilege.
6. Any conferences which occur pursuant to, or in violation of, guideline (5) are a proper subject for inquiry by deposing counsel to ascertain whether there has been any witness-coaching and, if so, what.
7. Any conferences which occur pursuant to, or in violation of, guideline (5) shall be noted on the record by the counsel who participated in the conference. The purpose and outcome of the conference shall also be noted on the record.
Id. at 531-32. Although some courts have criticized Hall for taking too rigid an approach to the issue of deposition coaching, it remains one of the most widely-cited decisions in this area.
Other courts have similarly dealt with this contentious subject. See, e.g., McDonough v. Keniston, 188 F.R.D. 22, 24 (D.N.H. 1998) ("Speaking objections and coaching objections are simply not permitted in depositions in federal cases."); In re Stratosphere Corp. Sec. Litig., 182 F.R.D. 614, 621 (D. Nev.1998) ("When there is a question pending neither the deponent nor his or her counsel may initiate the interruption of the proceeding to confer about the question, the answer, or about any document that is being examined, except to assert a claim of privilege . . . . If the deponent does not understand the question, or the meaning of a word or phrase, or even if the deponent has a question about a document, he or she should ask the questioning attorney."); Oleson v. K-Mart, 175 F.R.D. 560, 567-68 (D. Kan. 1997); Armstrong v. Hussmann Corp., 163 F.R.D. 299, 303 (E.D. Mo. 1995) ("Attorneys are also prohibited from acting as an intermediary during their client's deposition - from interpreting opposing counsel's questions; having private conferences with their client during the deposition; and conferring with their client about a document presented by the deposing attorney.").
Ghost Writing of Pleadings for Pro Se Parties
The courts and ethical opinions have increasingly taken a hard line against pro se (unrepresented) parties who have their complaints or pleadings "ghost written" by attorneys. The rationale is that these pro se parties are able to take advantage of their status, since the courts typically give greater leeway to pleadings filed by unrepresented parties, and the ghost-writing attorneys are able to take advantage of their surreptitious research which they can use to evade any sanctions that might be imposed if their involvement were disclosed to the court. For these reasons, a court that is faced with a pro se party who is not himself a lawyer, yet who submits sophisticated legal briefs may be skeptical of that party's status, and may seek to inquire as to the source of this legal advice. However, the absence of proscriptions on ghost writing in the local and disciplinary rules of most courts has meant that these courts have generally been limited in their ability to sanction such parties and their ghost-writing attorneys, other than to admonish the persons involved.
For example, the Tenth Circuit held that "any ghostwriting of an otherwise pro se brief must be acknowledged by the signature of the attorney involved." Duran v. Carris, 238 F.3d 1268, 1273 (10th Cir. 2001) (per curiam). The Tenth Circuit's opinion provides an extensive discussion of the relatively limited case law in this area. Several district court cases have similarly held that it was improper to have ghost written complaints or pleadings. See, e.g., Coleman v. Potomac Elec. Power Co., 310 F. Supp. 2d 154, 156 n.1 (D.D.C. 2004) ("While plaintiff is officially proceeding pro se, his pleadings have the definite sign of a lawyer's hand. Counsel will be ordered to identify themselves in any future pleadings."); Ricotta v. California, 4 F. Supp. 2d 961, 987 (S.D. Cal. 1998) ("Attorneys cross the line, however, when they gather and anonymously present legal arguments, with the actual or constructive knowledge that the work will be presented in some similar form in a motion before the Court."), aff'd 1999 WL 170882 (9th Cir. 1999); Laremont-Lopez v. Southeastern Tidewater Opportunity Ctr., 968 F. Supp. 1075 (E.D. Va. 1997) (holding that attorneys in four employment discrimination cases acted improperly in ghost writing the complaints, but absence of any proscription in the rules meant that the attorneys could not be sanctioned, where they did not engage in intentional wrongdoing); see generally J.C. Rothermich, "Ethical and Procedural Implications of ‘Ghostwriting' for Pro Se Litigants: Toward Increased Access to Civil Justice," 67 Fordham L. Rev. 2687 (1999); D.A. Hyman & C. Silver, "And Such Small Portions: Limited Performance Agreements and the Cost/Quality/Access Trade-Off," 11 Geo. J. Legal Ethics 959, 968-69 (1998).
State and local bar associations have similarly cast doubt on ghost writing. See, e.g., ABA, Informal Ethics Op. 1414, "Conduct of Lawyer Who Assists Litigant Appearing Pro Se (1978); Connecticut Bar Ass'n, Informal Op. 98-5, "Duties To The Court Owed By A Lawyer Assisting A Pro Se Litigant" (1998); Los Angeles County Bar Ass'n, Formal Op. 502, "Lawyer's Duties when Preparing Pleadings or Negotiating Settlement for in Pro Per Litigant" (Nov. 4, 1999) (http://www.lacba/org/); Massachusetts Bar Ass'n, Opinion 98-1 (1998) (http://www.massbar.org/publications/ethics_opinions/); New Hampshire Bar Ass'n Ethics Committee, "Unbundled Services - Assisting the Pro Se Litigant" (May 20, 1999) (http://www.nhbar.org/pdfs/PEA5-99.pdf); Virginia Bar Legal Ethics Op. 1127 (1988). While several of these ethics opinions have recognized that the "unbundling" of legal services is permissible, i.e., providing limited legal representation to a client with other tasks left for the client to implement, this unbundling should not extend to ghost writing of complaints and other legal pleadings.
A related issue involves the ghost writing of expert reports. While an expert report inevitably reflects a dialog between the expert and the retaining attorney, the report itself should be the expert's own work product, as required by Rule 26, Fed. R. Civ. P. and the Supreme Court's Daubert decision. A district court in Virginia reviewed the case law in this area, differentiating between an attorney's preparation of the expert witness' disclosure statement and an attorney's editorial assistance with the expert report (permissible) and an attorney's preparation of the expert witness' report (impermissible). Trigon Ins. Co. v. United States, 204 F.R.D. 277, 291-95 (E.D. Va. 2001). Here, the court found that the plaintiff had not set forth sufficient evidence to show impermissible ghost writing of the expert reports, but that it could seek to do so at trial, upon which the court would consider the plaintiff's request that an adverse inference be drawn against those expert(s). Id. at 295-96.
The Colorado state courts, in 1999, amended the court rules governing the signing of pleadings (similar to Rule 11, Fed. R. Civ. P.), to provide that ghostwriting had to be disclosed:
(b) Limited Representation. An attorney may undertake to provide limited representation in accordance with Colo. [R. Prof. Cond.] 1.2 to a pro se party involved in a court proceeding. Pleadings or papers filed by the pro se party that were prepared with the drafting assistance of the attorney shall include the attorney's name, address, telephone number and registration number. The attorney shall advise the pro se party that such pleading or other paper must contain this statement. . . .
Rule 11, Col. R. Civ. P. It remains to be seen whether other state and federal courts will adopt similar provisions in their rules.
Plagiarism by an attorney is, in effect, another form of ghost writing, since the attorney is surreptitiously passing off someone else's work product as his own. The Iowa Supreme Court held that an attorney in a disability discrimination case was to be suspended from the practice of law for six months because he had plagiarized nearly 18 pages of a post-trial brief from the Lindemann & Grossman employment law treatise. Iowa Supreme Ct. Bd. of Prof. Ethics & Conduct v. Lane, 642 N.W.2d 296 (Iowa 2002). Here, the attorney (Lane) had submitted a post-trial brief that "was in great part plagiarized from . . . Lindemann & Grossman, Employment Discrimination Law (3d ed. 1996)," and then submitted a petition for attorneys' fees which included 80 hours of work on that brief at $200 per hour, or "$16,000 to write the brief that was largely copied from an uncredited source." Id. at 298. At a hearing on the fee petition, the judge recognized that the brief did not appear to be Lane's own writing, upon which Lane admitted that "I borrowed liberally from other sources." Id. The judge ordered Lane to identify his sources, whereupon he belatedly submitted a list of some 200 sources, including the treatise, so that the judge "undertook his own investigation and discovered Lane took the legal portion of his brief verbatim" from Lindemann & Grossman. Id. at 298-99. The Court found that this plagiarism was a misrepresentation to the court, just as is ghostwriting. Id. at 299-300. Although Lane initially admitted his "borrowing" from other sources, he then attempted to conceal that borrowing by burying the treatise "within a list of over 200 other sources." Id. at 300. Further, his deceit was shown by seeking payment for 80 hours of work on that brief; taken together, "these circumstances only support the conclusion Lane endeavored to deceive the court," id., warranting his suspension for six months.
Ex parte Communications
Model Rule 4.2 governs ex parte communications by plaintiff's counsel with current or former employees of the defendant employer. The 1995 version, followed by many states, is:
In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.
Prior to 1995, Model Rule 4.2 covered only parties, not persons. In 1995 the ABA Committee on Ethics and Professional Responsibility extended Model Rule 4.2 to cover any "person, whether or not a party to a formal adjudicative proceeding . . . who is represented by counsel concerning the matter to which the communication relates." See Model Rules of Professional Conduct Rule 4.2 cmt. 3 (1995). The Committee interpreted Rule 4.2, to "not prohibit contacts with former officers and employees of a represented corporation, even if they were in one of the categories with which communication was prohibited while they were employed." See ABA Comm. on Ethics & Prof. Resp., Formal Op. 95-396, at 7 n.47 (July 28, 1995).
In 2002, the ABA amended Model Rule 4.2 yet again, primarily by changing the commentary. Probably the most important change is in new Comment [7], which provides that: "Consent of the organization's lawyer is not required for communication with a former constituent," with the caveat that the lawyer cannot attempt to obtain privileged information from a former employee of the opposing party. Further, the language in former Comment [4] (now Comment [7]), regarding "whose statement may constitute an admission on the part of the organization" is now deleted. Model Rule 4.2 now reads (new material underlined; deleted material indicated by strike-out):
In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law to do so or a court order. [2002 version].
The commentary to Model Rule 4.2 is as follows (new material underlined; deleted material indicated by strike-out):
Comment
[1] This Rule contributes to the proper functioning of the legal system by protecting a person who has chosen to be represented by a lawyer in a matter against possible overreaching by other lawyers who are participating in the matter, interference by those lawyers with the client-lawyer relationship and the uncounselled disclosure of information relating to the representation.
[2] This Rule also applies to communications with any person, who is represented by counsel concerning the matter to which the communication relates.
[3] The Rule applies even though the represented person initiates or consents to the communication. A lawyer must immediately terminate communication with a person if, after commencing communication, the lawyer learns that the person is one with whom communication is not permitted by this Rule.
[4] This Rule does not prohibit communication with a represented person, or an employee or agent of such a person, concerning matters outside the representation. For example, the existence of a controversy between a government agency and a private party, or between two organizations, does not prohibit a lawyer for either from communicating with nonlawyer representatives of the other regarding a separate matter.
[5] Communications authorized by law may include communications by a lawyer on behalf of a client who is exercising a constitutional or other legal right to communicate with the government.
[6] A lawyer who is uncertain whether a communication with a represented person is permissible may seek a court order. A lawyer may also seek a court order in exceptional circumstances to authorize a communication that would otherwise be prohibited by this Rule, for example, where communication with a person represented by counsel is necessary to avoid reasonably certain injury.
[7] In the case of a represented organization, this Rule prohibits communications with the organization, who supervises, directs or regularly consults with the organization's lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability. Consent of the organization's lawyer is not required for communication with a former constituent. If a constituent of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for purposes of this Rule. Compare Rule 3.4(f). In communicating with a current or former constituent of an organization, a lawyer must not use methods of obtaining evidence that violate the legal rights of the organization. See Rule 4.4.
[8] The prohibition on communications with a represented person only applies in circumstances where the lawyer knows that the person is in fact represented in the matter to be discussed. This means that the lawyer has actual knowledge of the fact of the representation; but such actual knowledge may be inferred from the circumstances. See Rule 1.0(f). Thus, the lawyer cannot evade the requirement of obtaining the consent of counsel by closing eyes to the obvious.
[9] In the event the person with whom the lawyer communicates is not known to be represented by counsel in the matter, the lawyer's communications are subject to Rule 4.3.
ABA Model Rule 4.2, Comments (2002), at: http://www.abanet.org/cpr/e2k-rule42.html. It remains to be seen whether the states will adopt these revisions as is, or with changes.
In New York, which still follows the old Model Code, the applicable Disciplinary Rule is substantively similar to Model Rule 4.2:
A. During the course of the representation of a client a lawyer shall not:
1. Communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by a lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so.
N.Y. Disciplinary Rule 7-104(A)(1).
The following survey is a representative sampling of how various courts and ethics committees have decided cases under either the 1995 rule or the older versions.
A thorough review of the law in this area, and related discovery problems, can be found in Susan J. Becker, Discovery from Current and Former Employees (ABA Litigation Section, 2005). For additional references and commentary, consult the following sources: E.J. Messing & J.S. Weliky, "Contacting Employees of an Adverse Corporate Party: A Plaintiff Attorney's View," 19 The Labor Lawyer 353 (2004); ABA/BNA Lawyers' Manual on Professional Conduct, § 71:301, "Communications with Person Represented by Counsel (1997); G.C. Hazard, Jr. & W.W. Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct, § 4.2, "Communication with Person Represented by Counsel" (2d ed. 1998); J.S. Solovy & R. L. Byman, "Discovery: Ex parte, Brutus?" Nat'l L. J., Mar. 27, 2000, at A20.
District of Columbia Circuit.
In Opinion No. 287 (Jan. 19, 1999), the D.C. Bar's Legal Ethics Committee addressed the issue of whether a lawyer could contact an unrepresented former employee without the party-opponent's consent. The committee held that a lawyer may contact an unrepresented former employee without opposing counsel's consent, regardless of the position that the former employee held.
The District of Columbia Rule of Professional Conduct 4.2(a) prohibits communication between a lawyer and a represented party without the consent of the represented party's counsel, unless the lawyer is authorized by law to contact the party. Rule 4.2 provides that lawyers may not make ex parte contact with "parties," which includes employees who have the authority "to bind a party organization as to the representation to which the communication relates." Comment 3 explains that a lawyer may communicate with employees "who have the authority to bind the organization with respect to the matters underlying the representation;" the rule only forbids a lawyer from contacting such persons if they also "hold or exercise the power or authority to decide . . . the organization's position(s) in the matter." The Committee noted that the need to protect the party-opponent must be balanced with the "broad policy that litigants should have access to all relevant, non-privileged information regarding a matter."
The Committee held that, because former employees could not bind their ex-employers with their words, Rule 4.2 did not prohibit ex parte contacts with former employees, irrespective of their position with their former employers. In accord with Rule 4.2, the lawyer must disclose his or her identity and tell the interviewee that he or she represents a party adverse to the individual's ex-employer. Further, the lawyer may not solicit privileged information of the party opponent during communications with the former employee. Beyond these restrictions, lawyers may contact any former employee of a party opponent; see also Athridge v. Aetna Cas. & Sur. Co., 184 F.R.D. 181, 192 (D.D.C. 1998).
First Circuit.
In a high profile employment case involving Harvard University, which attracted numerous amici briefs, the Supreme Judicial Court of Massachusetts held that the ex parte limitation to contacts by plaintiff's counsel of defendant's current employees only extended to those "who exercise managerial responsibility in the matter, who are alleged to have committed the wrongful acts at issue in the litigation, or who have authority on behalf of the corporation to make decisions about the course of the litigation." Messing, Rudavsky & Weilky, P.C. v. President & Fellows of Harvard College, 436 Mass. 347, 357, 764 N.E.2d 825, 833 (2002). Here, the Massachusetts Commission Against Discrimination held that the employee's counsel (the law firm of Messing, Rudavsky & Weilky, P.C.) violated the Massachusetts Rules of Professional Conduct by conducting ex parte interviews of five Harvard employees. Id. at 350, 764 N.E.2d at 828. On removal, the Massachusetts Superior imposed monetary sanctions of $94,418.14. Id. The Supreme Judicial Court reversed and held that the plaintiff's counsel in the underlying employment discrimination case could legitimately interview five Harvard employees. Id. at 362, 764 N.E.2d at 836; see generally M. Coyle, "Mass. High Court Adds Wrinkle to Worker Contact," Nat'l L.J., Mar. 25, 2002, at A-8; see also Clark v. Beverly Health & Rehab. Servs, Inc., 440 Mass. 270, 274-75, 797 N.E.2d 905, 908-09 (2003) (holding that Rule 4.2 does not bar ex parte contact with former employees of organization).
In Hurley v. Modern Continental Constr. Co., C.A. No. 94-11373-RBC, 1999 WL 95723, 1999 U.S. Dist. LEXIS 2003, 9 Am. Disabilities Cas. 94 (D. Mass. 1999), the plaintiff sued under the Americans with Disabilities Act. At issue was "whether there were any other jobs which the defendant could offer to the plaintiff which the plaintiff could perform with or without some accommodation." The plaintiff's counsel contacted a current employee of defendant to ask about "his observations as to plaintiff's duties and responsibilities during plaintiff's assignment to the Deer Island Project." Defendants objected to any use of the information gained during this contact on the grounds that it would constitute an admission of a party-opponent, obtained in violation of Massachusetts Rule 4.2. The court ordered that plaintiff's counsel was "to have no further contact with any current employee of the defendant without the consent of counsel for the defendant or advance permission of the court." Further, the court held that any statements already obtained that "are offered at trial as admissions of the defendant" may be objected to by defendant if such statements were "made in contravention of Rule 4.2." Arguably, Hurley may no longer be good law in light of Messing, supra.
In Pratt v. National R.R. Passenger Corp., 54 F. Supp. 2d 78 (D. Mass. 1999), a personal injury case brought by an Amtrak employee, plaintiff's counsel learned that an Amtrak foreman had inspected the site of the injury (a baggage car) and had "prepared a report describing the condition of its doors." Plaintiff's counsel sought to depose the foreman, but Amtrak refused to produce him. Plaintiff's counsel then "took matters into his own hands and conducted an ex parte deposition" of the foreman. Amtrak moved to exclude the deposition at trial, but the court allowed it, because it "revealed highly probative evidence." The court recognized that this conduct violated Massachusetts Rule 4.2; however, plaintiff's counsel successfully argued that the Federal Employer's Liability Act (FELA), 45 U.S.C. § 60, constituted the legal authorization under Rule 4.2 to allow him to contact Amtrak's foreman. The court noted the split in authority regarding this issue as to whether FELA authorized these ex parte contacts, and held that in light of FELA's legislative history and purpose (to protect injured employees), it was "enacted to equalize the influence of railroads and employees in the conduct of litigation," while Rule 4.2 "in Massachusetts is interpreted to be broadly protective of corporations," creating "inequities that Congress specifically chose to rectify by enacting [FELA]." Therefore, under the circumstances of this case, plaintiff's ex parte contact with Amtrak's foreman did not violate Rule 4.2
Second Circuit.
The New York State Bar Association Committee on Professional Ethics, concluded that an attorney in a civil matter could contact the independent contractors of an adverse corporate party without violating N.Y. Disciplinary Rule 7-104(A)(1). See N.Y. State Bar Ass'n, Committee on Professional Ethics, Opinion 735, "Communications in Noncriminal Matters with Independent Contractors of Adverse Parties" (Jan. 12, 2001), at:
In Miano v. AC&R Advertising, Inc., 148 F.R.D. 68 (S.D.N.Y. 1993), three plaintiffs sued claiming that their termination violated the Age Discrimination in Employment Act. The plaintiffs intended to offer as evidence tape recordings they had secretly made of their conversations with current and former high-ranking employees of AC&R. Defendants moved to bar the admission of this evidence on the grounds that its use violated N.Y. State Bar Association DR 7-104(A)(1) (which is similar in purpose to Model Rule 4.2). Here, it was not plaintiffs' attorney, but the plaintiffs themselves who made these tape recordings; defendants nonetheless argued that plaintiffs' attorney had instigated this tape recording. The court did not have to reach this issue, since it turned out that AC&R and its managers were not represented by counsel with regard to plaintiffs' claims at the time of the tape recordings. Therefore, the tapes could be used as evidence at trial.
Third Circuit.
In Andrews v. Goodyear Tire & Rubber Co., 191 F.R.D. 59 (D.N.J. 2000), the plaintiffs' counsel, in a racial discrimination case, had contacted several mid-management employees of Goodyear. The court held that such contacts were not in violation of New Jersey Rule 4.2, as recently amended, since the managerial employees were not part of the "litigation control group" under Rule 1.13, i.e., those "responsible for, or significantly involved in, the determination of the organization's legal position in the matter whether or not in the litigation, provided, however, that ‘significant involvement' requires involvement greater, and other than, the supplying of factual information or data respecting the matter." Id. at 77. Therefore, due to this narrowing of the scope of New Jersey Rule 4.2, plaintiffs' counsel were only required to inquire of his contacts whether they were specifically represented by counsel or otherwise part of the "litigation control group" before continuing with his interviews. In light of the revision to Rule 4.2, the older case law from New Jersey courts may no longer be applicable to ex parte contacts.
In Amatuzio v. Gandalf Syst. Corp., 932 F. Supp. 113 (D.N.J. 1996), plaintiffs sued claiming that their terminations violated the WARN Act and that their severance benefits were reduced in violation of ERISA or applicable state law. One plaintiff, who was the former Director of Human Resources for the defendant, revealed to plaintiffs' counsel the substance of conversations between executives of the defendant and defendant's in-house counsel. The court denied the defendant's motion to disqualify plaintiffs' counsel, finding that, subject to certain limitations, Rule 4.2 did not protect communications with a corporation's attorney made by, to, or in the presence of a non-attorney employee who later becomes adverse to the corporation. Plaintiffs' counsel did not act unethically in debriefing his client as to conversations and communications to which he was privy.
In Carter-Herman v. City of Phila., 897 F. Supp. 899, 68 FEP Cases 1690 (E.D. Pa. 1995), plaintiffs, who were police officers, sued the City of Philadelphia alleging sexual harassment and retaliation. Plaintiffs' counsel indicated at a status conference that he wanted to interview non-party police officers outside of the presence of opposing counsel. The defendants filed a motion for a protective order contending that Pennsylvania's Rule 4.2 precluded any ex parte communication with any current employee of the police department. The court rejected the argument that every city employee is automatically a represented party simply by virtue of being employed by the defendant City of Philadelphia. Employees with managerial responsibilities did fall under the rule, but plaintiffs' counsel was permitted to contact employees who did not have managerial responsibilities, which the court found included all officers with the rank of Sergeant or lower.
In Coleman v. National R.R. Passenger Corp., C.A. No. 94-4526, 1995 WL 395924, 1995 U.S. Dist. LEXIS 9370 (E.D. Pa. Jun. 28, 1995), the plaintiffs sued under the Federal Employers' Liability Act, 45 U.S.C. §§ 51-60, to recover damages for personal injuries. The defendant filed a motion to compel the plaintiffs to produce statements they had obtained from various Amtrak employees, to preclude evidence obtained from the employees from being used at trial, and to preclude plaintiffs' counsel from further communication with the employees. The court, adopting language contained in the comment to Rule 4.2, held that plaintiffs' counsel could communicate with employees who did not have managerial responsibilities, whose acts or omissions could not be imputed to the organization, and whose statements could not constitute admissions on the part of the organization.
In Michaels v. Woodland, 988 F. Supp. 468 (D.N.J. 1997), the plaintiff filed a medical malpractice action and moved for leave to contact nurses and nurses assistants who participated in her post-operative care. The defendants argued that such contacts were inappropriate because one of the defendants, the hospital, had offered representation to the nurses and nurses assistants. The court found that the offer of representation was not dispositive, and that the nurses and nurses assistants could be interviewed because they were not within the "litigation control group," and instead were "merely fact witnesses." Michaels, 988 F. Supp. at 472.
In Belote v. Maritrans Operating Partners, L.P., No. Civ. A. 97-3993, 1998 WL 136523, 1998 U.S. Dist. LEXIS 3571 (E.D. Pa. 1998), the plaintiff sued under the Jones Act, 46 U.S.C. § 688, to recover for injuries he sustained on board the defendant's barge. After the plaintiff's lawyer sent an investigator to interview the captain of the barge outside of the presence of defense counsel, the defendant filed a motion to disqualify plaintiff's counsel and assess fees and costs against him, arguing that the contact violated Rule 4.2. The court found that the captain was a represented party under the rule, because he was a managerial employee, he was a person whose act or omission in connection with plaintiff's injury could be imputed to the defendant, and he was a person whose statements might constitute party admissions. The court nevertheless declined to disqualify plaintiff's counsel, and instead ordered plaintiff's counsel to destroy the captain's statement.
Fourth Circuit.
Prior to 2001, the district courts in Maryland were significantly split on the issue of ex parte contacts, with seemingly a different opinion by each judge. See Sharpe v. Leonard Stulman Enter. Ltd. Partnership, 12 F. Supp. 2d 502 (D. Md. 1998) (collecting cases). However, in late 2001, the Maryland Court of Appeals adopted a revision to Maryland Rule 4.2(a), which now provides that:
Rule 4.2, Communication with person represented by counsel.
(a) Except as provided in paragraph (b), in representing a client