TRUMP’S LAWYER AND ATTORNEY-CLIENT PRIVILEGE

The recent search of President Trump’s Lawyer, Michael Cohen’s, office, home, safety deposit box, and hotel room is a very big deal when it comes to issues of attorney-client privilege and client confidentiality.  It has been reported that the search is part of an investigation into Cohen for possible bank fraud and wire fraud. President Trump has tweeted that attorney-client privilege was “dead” and “now a thing of the past.”  As the case before Judge Kimba Wood in the Southern District of New York is demonstrating, President Trump is wrong and he just doesn’t understand attorney-client privilege.

Judge Wood has yet to decide who will have the first look at materials the government seized with the search warrant, though she has signaled that it won’t be President Trump, most likely won’t be Cohen, and may not be a government “taint” team walled off from the prosecutors doing involved in the investigation.  Rather, it is more likely that Judge Wood will appoint a special master to review the material and decide what is and is not covered by attorney-client privilege and possibly work-product.  Both attorney-client privilege and work product are allied with client confidentiality, and all three rules or doctrines are based on the assumption that effective legal representation requires free and open communication between client and counsel.  All three are aimed at encouraging such open communication by keeping certain information from one’s adversary and the public.

Faculty teaching attorney-client privilege, client confidentiality, and work-product should think about using the issues Judge Wood and possibly a special master have to consider.   For example, the materials seized will likely contain the following information:

  • Client names;
  • Communications between Cohen and clients; and
  • Possible materials prepared in anticipation of litigation if Cohen worked on any matters in which litigation was a possibility.

Ask your students to be the special master, and ask them to identify which category or categories apply to the above materials or information.  When it comes to the communications between Cohen and clients, the students will need more information to see if the communications fit the definition of attorney-client privilege:  (1) a communication; (2) made between privileged persons (typically the lawyer and client); (3) in confidence; and (4) for the purposed of obtaining or providing legal advice or other assistance to the client.  Communications that do not involve legal advice would not be covered.  Also, communications in furtherance of a crime or fraud would fit the crime fraud exception.

When it comes to client names, they are not covered by attorney-client privilege.  On the other hand, the names may be covered by client confidentiality as “information relating to the representation of a client” under Rule 1.6(a), as New York State Bar Association Ethics Opinion 1088 (2016) explains.  There are some state advisory ethics opinions take a different position, such as California Formal Op. 2011-182 (2011), which stated:  “In most situations, a client’s identity is not considered confidential . . . .”  This is just another reminder that it is important for a lawyer to research and understand how one’s jurisdiction is likely to approach ethics issues.

District Court Creates Guide for Attorney-Client Privilege in the Corporate Context

Law students and lawyers alike often go down the rabbit hole when considering what is and is not attorney-client privilege communications in the corporate context. On February 23, 2018, Judge Michael M. Baylson of the U.S. District Court for the Eastern District of Pennsylvania released an order in SodexoMagic LLC v. Drexel University that sets out a set of hypotheticals for the parties to determine when privilege exists.  He comprised this set of hypotheticals after reviewing 50 documents in camera submitted by the parties as samples of disputed claims of privilege.

This court order is an extremely valuable resource for explaining privileged communications that can be withheld from production, and those that are not.  The challenged communications involved internal emails within the two corporations.  Some of the emails were between corporate counsel and employees of the corporation, and some were between others working with the corporate attorneys acting on their behalf.  When the corporate attorneys or their subordinates, such as paralegals, were providing legal advice, the privilege applied.  When the lawyers or their subordinates were “acting in a purely ‘scrivner-like’ role, their emails and documents (including draft agreements) are themselves not privileged communications.”  Judge Baylson then proceeds to analyze 13 of the emails and documents and explains which are and are not covered by attorney-client privilege.

This is a great order to review attorney-client privilege, and one that will make it into the next edition of Professional Responsibility: A Contemporary Approach!

Trump’s Lawyer May Face Ethics Complaint Over Payment to Porn Star

Trump’s lawyer claims that he personally sent $130,000 to porn star, Stephanie Clifford, who states that she had an affair with President Trump prior to his election.  The lawyer, Michael Cohen, claims the payment was legal, but was it ethical?

A recent New York Times article discusses some of the potential ethics violations.  For example, Rule 1.8(e) of the New York Rules of Professional Conduct states:  “While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to the client . . . .”  So, if Ms. Clifford contemplating some type of litigation against Mr. Trump, then his payment for Mr. Trump’s benefit would trigger a violation of this ethics rule.

But what if Ms. Clifford was not threatening litigation but simply that she was going to make the affair public?  If the payment was to buy Ms. Clifford’s silence prior to the election, it could trigger a violation of Rule 1.8(a) if it was a loan and if Mr. Cohen did not have a written loan agreement with Mr. Trump.  If Mr. Cohen has a written loan agreement and followed other aspects of Rule 1.8(a), which include that the loan terms are fair and reasonable and that Mr. Trump was advised in writing about seeking out independent legal counsel on the matter, then Mr. Cohen would be in the clear on this front.

Assuming Mr. Cohen did not violate any provision of Rule 1.8, he could still be in hot water if he lied about the payment.  Mr. Cohen has said that “I used my own personal funds to facilitate a payment of $130,000 to Ms. Stephanie Clifford.  Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either directly or indirectly.”  Another New York Ethics Rule, Rule 8.4, prohibits a lawyer from “engag[ing] in conduct involving dishonesty, fraud, deceit or misrepresentation.” If any part of this explanation is a lie, for example someone else has repaid him on behalf of Mr. Trump, then that would be Mr. Cohen engaging in dishonesty, deceit or misrepresentation.

Finally, let’s say Mr. Cohen hasn’t lied, simply used his own money, has not been reimbursed, litigation was not be threatened, it wasn’t a loan, and it was simply a gift.  Mr. Cohen would seem to be in the clear ethically, but there may still be one nagging legal issue – did he file a Form 709 with the IRS?  The IRS requires that anyone making gifts totaling more than $14,000 to anyone other than your spouse usually must filed a Form 709.  The other types of gifts not subject to reporting to the IRS are donations to political organizations, transfers to some tax exempt organizations, and payments that qualify under educational or medical exclusions.

It will be interesting to see if and how we learn if Mr. Cohen is completely in the clear.

Former Prosecutor Disciplined for Contacting Alibi Witnesses through Fictitious Facebook Account

The Ohio Supreme Court in Disciplinary Counsel v. Brockler recently imposed a stayed suspension on an ex-prosecutor who used a fictitious Facebook account to contact alibi witnesses in a criminal case that he was prosecuting. The discipline came after the prosecutor had been fired for “his unethical conduct in creating false evidence, lying to witnesses and another prosecutor, and damaging the prosecution’s chances in a murder case . . . .”

The Court found that the prosecutor doubted the alibi witnesses’ stories and created a fictitious Facebook account to contact the witnesses.  In setting up the account, the male prosecutor used a pseudonym, posed as a woman, and added pictures, group affiliations, and “friends” that he based on the defendant’s jailhouse telephone calls and Facebook page.  He contacted the witnesses claiming that he was romantically involved with the defendant, and he discussed the alibi as if it were false.  He had separate Facebook chats with two witnesses, and he tried to get them to admit that they were lying for the defendant, or would lie for him, and he tried to convince them to talk with the prosecutor.  After chatting with them for several hours, he thought that they were becoming suspicious so he printed out copies of the chats, put them in the case file, and deleted the Facebook account.

Subsequent to being fired and before his disciplinary hearing before the Board of Professional Conduct, the prosecutor gave press interviews in which he claimed that such ruses where common among prosecutors to get at the truth and that he did this to keep a murderer behind bars.  A year after he was fired, the defendant was convicted of aggravated murder and other related charges.

Prior to the hearing, the prosecutor entered into a stipulation that he had violated Rule 8.4(c), which prohibits a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.  He urged the disciplinary board to carve out an exception for “prosecutorial investigation deception.”The board refused to do so, noting that it had  previously disciplined three non-prosecutors for engaging in dishonest conduct involving contact with witnesses in their clients’ cases.  The board also found the former prosecutor guilty of Rule 8.4(d), engaging in conduct prejudicial to the administration of justice.

The Ohio Supreme Court upheld the board’s findings, but split 4-3 on the sanction of a stayed one year suspension from the practice of law.  Two of the dissenting justices favored the one year suspension without a stay, and one justice favored an indefinite suspension.  In the prior cases involving non-prosecutors, two lawyers received stayed six-month suspensions for making misrepresentations to a client’s former landlord to see if the landlord would slander the client, and one lawyer received a one-year suspension, six months stayed, for intimidating a deposition witness by creating the false impression that the lawyer had compromising person information that could be used against the witness.

This case, and other cases, should serve as warnings about the limits of advocacy.  While seeking truth is noble, using deceit and misrepresentations in an effort to help one’s case is going beyond what the ethics rules allow.

New ABA Opinion on Ethical Duty when Client Documents are Subpoenaed

In Formal Opinion 473 (Feb. 17, 2016), the ABA provides new guidance to lawyers receiving subpoenas for client documents or information.  The opinion states that whenever a lawyer receives a subpoena or any other compulsory process for documents or information relating to the representation of a client, several obligations are implicated.  First, the lawyer must consult with the the client, if the client is available.  Next, unless the client instructs otherwise, the lawyer must assert all reasonable claims against disclosure and seek to limit the scope of any disclosure.  Next, if ordered to produce any information, the lawyer should consult with the client on whether to appeal the ruling.  Finally, if the client and the lawyer disagree on how to proceed, the lawyer should consider whether to withdraw from the representation pursuant to Rule 1.16.

The new opinion goes into some detail to explain what the lawyer should do if the client is unavailable, and to the duty to take steps to protect client confidentiality.  The opinion should be a very helpful resource to any lawyer facing attempts to pierce client confidentiality.

The new opinion is also a useful addition to Formal Opinion 10-456 (July 14, 2010), which addressed the disclosure of client information to a prosecutor when a lawyer’s former client brings an ineffective assistance of counsel claim.  Formal Opinion 10-456 makes clear that a lawyer may only disclose confidential information that the lawyer believes is reasonably necessary for the lawyer’s self-defense.

 

Prosecutorial Accountability – An Optimistic Future

Bruce Green and Ellen Yaroshefsky recently posted a new article on SSRN, Prosecutorial Accountability 2.0.  They identify several rhetorical and regulatory shifts that they claim are leading to an era of new prosecutorial accountability.  In their carefully crafted article, they argue that information technology is the main driver behind this shift to hold prosecutors accountable for their actions. They claim that the pendulum long fixed on courts and the media presuming that prosecutors could do no wrong has swung to a more skeptical position.  Let’s hope they are right. Anyone interested in the criminal justice system should read this article.

Indiana Ethics Opinion on Confidentiality and Mandatory Child Abuse Puzzling

A new ethics opinion on confidentiality by the Indiana State Bar Association Legal Ethics Committee reaches some puzzling conclusions.  The committee considered whether Indiana’s mandatory reporting statute for suspected child abuse or neglect required a lawyer who learns of such abuse or neglect while representing a client must report it.  While acknowledging that the Indiana Supreme Court is the final authority on both the law and ethics in Indiana, the committee concluded that a lawyer was not required to report the suspected abuse unless the lawyer believed it necessary to prevent reasonably certain death or substantial bodily harm.  While that seems reasonable on its face, the committee made several leaps in reasoning to get there and may have provided some ill advice to lawyers in Indiana.

Unlike some other states, Indiana’s reporting statute does not exempt lawyers from the reporting duty.  That means, unless the Indiana Supreme Court would step in and decide that the state’s Rule 1.6 trumps the state law, a lawyer who follows the opinion could be prosecuted for failing to report.  In addition, the committee fails to acknowledge that Indiana’s Rule 1.6, like the ABA Model Rule, contains that confidentiality exception “to comply with other law or court order.”

Next, the committee inexplicably reasoned that because of the mandatory reporting law a lawyer must report suspected abuse or neglect “to prevent reasonably certain death or substantial bodily harm” even though the exceptions to confidentiality in Indiana’s Rule 1.6, like in the ABA Model Rule, state that a lawyer may reveal information relating to a client’s representation in order to prevent reasonably certain death or substantial bodily harm.

The ethics opinion may state a good policy position, but the committee goes out on limb by creatively trying to reconcile a lawyer’s ethical and legal obligations in such a situation.  As it stands now, there is a direct conflict between the mandatory reporting law and the ethics rules, and the ethics opinion does not resolve this quandary for lawyers in Indiana.

Lawyer Suspended for Breaching Confidentiality, Among Other Missteps

A Colorado lawyer was suspended from the practice of law for 18 months after disclosing confidential information about his clients in responding to their Internet complaints about his fees or services.  According to the disciplinary order, the lawyer responded to the complaints “with Internet postings that publicly shamed the couple by disclosing highly sensitive and confidential information gleaned from attorney-client discussions.”  This type of disclosure of confidential information is not covered by any  exceptions to confidentiality in Rule 1.6(b).  In addition, the lawyer sued the clients for defamation and communicated directly with them, even though their lawyer had repeatedly asked him to stop contacting them.  The order states that this violated the anti-contact rule, Rule 4.2.  A story in the ABA Journal about the discipline case is located here.

E-Discovery Hazards Raise Competency and Client Confidentiality Issues

A recent ethics opinion from the California State Bar Committee on Professional Responsibility, Formal Op. 2015-193, outlines how even an experienced lawyer can breach duties of competence and client confidentiality by engaging in e-discovery without the assistance of someone with e-discovery expertise.  In this opinion, a hypothetical Lawyer entered into a joint agreement with Opposing Counsel permitting Opposing Counsel’s vendor to search the Client’s computer system for discoverable electronically stored information (“ESI”) using agreed upon search terms.  The joint agreement contained a clawback provision to permit Client to clawback any inadvertently produced ESI protected by attorney client privilege or work product.

After all the ESI is produced, Lawyer receives a letter from Opposing Counsel accusing Counsel’s Client of destroying evidence and/or spoliation, and threatens motions for monetary and evidentiary sanctions. Lawyer hires an e-discovery Expert who reviews the produced ESI, and tells Lawyer that potentially responsive ESI has been routinely deleted from Client’s computers as part of Client’s normal document retention policy, revealing gaps in the document production. Expert also states that due to the breadth of the agreed upon search terms, both privileged information and proprietary information about the Client’s important new product were revealed to the opposing party, Client’s chief competitor. Expert advises Lawyer that an IT professional with litigation experience would have identified the over-breadth of the search terms and would have advised Lawyer not to agree to such a far-reaching joint agreement.

The committee analyzes the facts, and concludes that the hypothetical Lawyer has violated the duty of competency and may have violated client confidentiality. The committee states that competency requires a lawyer who lacks expertise in e-discovery in a case to do one of the following: either acquire sufficient knowledge and skill before e-discovery begins, or consult a technical expert or associate with competent counsel, or decline the representation. The committee also cautions that even when a lawyer engages an expert or associates with another to assist with e-discovery, the lawyer still has a duty to supervise the work and is ultimately responsible for the work of others.

In concluding that Lawyer may have breached client confidentiality, the committee stresses that the Lawyer agreed to release the ESI to Opposing Counsel without first reviewing the ESI to determine if any material was subject to the clawback provision as being subject to attorney client privilege or work product. A prior review would have also revealed the highly confidential proprietary information and Lawyer could have taken measures to protect Client’s interests.

This opinion is instructive of the need for all lawyers, even very experienced lawyers, to understand new technology or seek the assistance of qualified persons to assist them before using new technology. The opinion also demonstrates how failure to be sufficiently competent in new developments, such as e-discovery, may also violate the duty of client confidentiality.

Crime Fraud Exception for GM’s Outside Counsel in Deadly Ignition-Switch Litigation?

The National Law Journal recently published a story about the possible application of the crime fraud exception to attorney client privilege in the deadly GM ignition-switch cases under the headline “What Did Counsel to GM Know? Plaintiffs allege that GM’s outside counsel, King & Spalding, encouraged GM to enter into confidential settlements to avoid revealing the ignition-switch defects. The plaintiffs allege that King & Spalding had a responsibility to tell federal regulators about the defect if GM did not. The underlying fact scenario of the case is a classic example of the interplay between attorney-client privilege and the exceptions to client confidentiality, and can serve as an example of the obligations of a lawyer or law firm employed by an organization under ABA Model Rule 1.13. One of the lawyer’s for the plaintiff’s claims that there is no evidence so far that King & Spalding advised GM to report the defect to the proper federal authorities, and that “[t]he only focus was settling cases and moving on.”

In January, the New York Times wrote a related story “Victims of GM Deadly Defect Fall Through the Legal Cracks” The article explains how damage caps in many states, combined with GM’s legal strategy to make suing it costly, prevented many injured and families of those injured and killed from obtaining lawyers willing to sue GM over the ignition-switches. Many injured persons and families of those who died found that when non-compensatory damages were capped at $300,000 to $400,000, GM was able to make suing it too costly for plaintiffs’ lawyers to take the cases. This was especially true when victims were young or elderly and had negligible economic damages. When GM did settle, often confidentiality agreements kept the dangerous ignition-switches secret. The story claims that at least 42 persons died in crashes linked to the faulty switches, and GM was able to keep the problem largely hidden for more than a decade. The New York Times story is useful to show how damage caps combined with certain defense strategies can have public safety consequences.

Client Confidentiality Even Applies to Public Information

The California State Bar Standing Committee on Professional Responsibility & Conduct recently proposed an ethics opinion, Proposed Formal Op. 13-0005, available here http://www.calbar.ca.gov/Portals/0/documents/publicComment/2015/2015_13-0005DisclosurePublicyAvailableInformation.pdf, that should clear up something that many lawyers often fail to understand – a lawyer may never reveal embarrassing or detrimental secrets they learn about a client through representation even if the information doesn’t come from the client or is publicly available.

Some lawyers conflate attorney client privilege and client confidentiality, or believe that embarrassing or detrimental client information they learn through the representation of client, even if not from the client, is not covered under their duty of confidentiality if the information is available to the public. The proposed ethics opinion sends a clear message that both of these beliefs are wrong. The proposed ethics opinion also makes clear that the duty of confidentiality continues even after the client-lawyer relationship ends.

The California Bar is asking for comments on the proposed opinion through August 27, 2015, and follow this link to learn how to submit comments http://www.calbar.ca.gov/AboutUs/PublicComment/201511.aspx.