In case you missed the news over the winter holidays, in late December 2017, Evan Greebel, who was outside counsel to Martin Shkreli’s former pharmaceutical company, Retrophin, was found guilty by a jury in Brooklyn of charges that he conspired to commit wire fraud and securities fraud. In August 2017, a different jury found Shkreli guilty of defrauding hedge fund investors but cleared Shkreli of conspiring with Greebel to steal from Retrophin. This conviction offers a stark reminder that lawyers cannot use their legal expertise to facilitate the commission of a crime or fraud.
The news story can be found here.
The Supreme Court heard arguments today in McCoy v. Louisiana, which presents the question of whether it is unconstitutional for defense counsel to tell the jury that a client is guilty when the client insists he is innocent. It also raises interesting questions about the ethical obligations under ABA Model Rule 1.2 that “a lawyer shall abide by a client’s decisions concerning the objectives of representation” and ABA Model Rule 3.3, Candor Toward the Tribunal.
As Justice Sotomayor observed in questioning McCoy’s attorney, “this sounds like my ethics class in law school, and this very hypothetical of what do you do with a lying client?” Full oral argument transcript is here.
Adam Liptak noted in the NY Times that the justices seemed likely to side with McCoy: “Several justices said a decision as fundamental as admitting guilt in a capital case belonged to the client rather than the lawyer.” Full article here.
Cross-posted at the Legal Ethics Forum
The Chronicle of Higher Education (August 11, 2017), as well as social media, has been covering the unfolding story relating to the UF General Counsel Jamie Keith. The saga began with a Title IX investigation which involved UF wide receiver Antonio Colloway, represented by attorneys Huntley Johnson and Amy Osteryoung. The article below focuses on the report of the internal audit conducted by UF, now that Ms. Keith has resigned her post. But this entire case provides an opportunity to explore the role of the in-house counsel, and the multiple ethical duties and challenges faced when working for a large and complex institution. Note also that Ms.Keith threatened to report the attorney who initially complained about her actions to the Florida Bar for discipline. We will need to keep a watch on this case to see if any bar investigation or discipline results for any of the attorneys involved.
For those of you following the Dewey & LeBoeuf criminal trial, you know that the jury deadlocked in October 2015 after nearly six months of deliberations on dozens of charges against Steven H. Davis, the former chairman of Dewey, and two other former executives of the law firm, Stephen DiCarmine and Joel Sanders. The three men were accused of being the architects of an accounting fraud that enabled Dewey to defraud its lenders and creditors during much of the financial crisis.
In January and February 2016, Manhattan Prosecutors reached deferred prosecution agreements with Steven H. Davis and Zachary Warren, one of the original defendants.
The Manhattan prosecutors retried the case against DiCarmine and Sanders, the remaining defendants, in the New York State Supreme Court in Manhattan. In May 2017, the jury delivered a split verdict. Joel Sanders, the law firm’s former chief financial officer, was convicted on three criminal counts. He could be sentenced up to four years in prison. Stephen DiCarmine, the former executive director, was acquitted of the same charges.
Update on the case can be found here.
For those of you following the Dewey & LeBoeuf criminal trial, you know that the jury deadlocked last October after nearly six months of deliberations on dozens of charges against Steven H. Davis, the former chairman of Dewey, and two other former executives of the law firm, Stephen DiCarmine and Joel Sanders. The three men were accused of being the architects of an accounting fraud that enabled their law firm, Dewey & Leboeuf, to defraud its lenders and creditors during much of the financial crisis.
In January and February of this year, Manhattan prosecutors reached deferred prosecution agreements with Steven H. Davis and Zachary Warren, one of the original defendants.
The Manhattan prosecutors are now planning to retry the case against DiCarmine and Sanders, the remaining defendants. The trial is expected to begin early next year in the New York State Supreme Court in Manhattan – just in time for your spring semester 2017 P.R. classes. Apparently, DiCarmine has communicated that he wants to replace his longtime lawyer, Austin Campriello.
Update on the case can be found here.
Those of you teaching Chapter 6—The Lawyer’s Duties to the Legal System, the Profession, and Nonclients—might be interested in an article of mine just published by the Fordham Law Review for its Lawyering in the Regulatory State Symposium. In the paper, using the GM ignition switch scandal as a point of departure, I critique the common assertion that our legal system is best served if the corporate in-house lawyer conducts his/her relationships with senior corporate managers according to the “lawyer as friend” model. I argue that there are numerous problems with the model, not the least of which is the invariably (and perhaps intentionally) vague way in which the model is invoked. Those who invoke the “lawyer as friend” model repeatedly assert that the senior corporate manager needs to be able to repose “trust and confidence” in the inhouse lawyer. Unfortunately, they never explain: trust and confidence in what?
As a matter of professional responsibility and fiduciary obligation, the lawyer cannot reassure the manager that his communication will remain confidential or that the manager will be shielded from adverse consequences. If the corporate senior manager is engaged in material wrongdoing that may harm the corporate entity, that manager will usually not be entitled to those assurances. As William Simon has explained, the authority to invoke or waive the organization’s confidentiality rights usually belongs to the organizational agents different from those who made the confidential communications. Because the lawyer may be required to testify against the manager in a court of law, it would be entirely inappropriate for the lawyer to reassure her colleague of her continuing loyalty or confidentiality. The lawyer’s duty of confidentiality will not block disclosure within the organization, and it will not prevent the organization from divulging information outside of the corporation, no matter how harmful internal or external disclosure is to the manager. Indeed, the only thing that the lawyer can properly promise the manager is that she will listen carefully and not rush to judgment, which is the behavior that anyone would reasonably expect of a competent professional (irrespective of any preexisting friendship). To suggest that lawyers should invite the manager’s trust and confidence and then—if the lawyer encounters evidence of material misconduct—turn around and report that manager to higher-ups basically advocates a bait and switch model. This “bait and switch” does not sound like friendship, which is precisely why the “lawyer as friend” analogy should be abandoned.
To be sure, in the best possible world, the senior corporate manager backs down from his illicit plan. This good result may be reached through some form of moral dialogue that legal scholars are right to recommend. What many folks ignore, however, is the sobering reality that persuasion does not always work. Not all lawyers will be skillful in the art of moral suasion, and—frankly—most law schools do not train students in moral suasion. Also, sophisticated senior managers, who find themselves in desperate enough situations to be considering wrongdoing in the first place, may not be receptive to the lawyer’s (perhaps feeble) attempts at moral suasion.
Perhaps those invoking the “lawyer as friend” model are merely saying lawyers should be “friendly”? Unfortunately, that commits the fallacy of confusing “friend” with “friendliness.”
If you’d like to read the whole article, it can be downloaded from SSRN here:
The entire issue of the Fordham Law Review Lawyering in the Regulatory State Symposium can be found here.
The ABA Journal reports today that the Missouri Supreme Court suspended a lawyer for using the information obtained by the lawyer’s divorce client, who obtained the information by accessing the wife’s email without permission (husband guessed his wife’s email password). The information obtained included:
- current payroll documents of wife; and
- a list of direct examination questions prepared by wife’s lawyer.
The court found that the lawyer violated the following Missouri Rules of Professional Conduct:
- Rule 4-4.4(a), which prohibits a lawyer from using “methods of obtaining evidence that violate the legal rights” of a third party;
- Rule 4-8.4(c) which prohibits a lawyer from engaging “in conduct involving dishonesty, fraud, deceit, or misrepresentation;”
- Rule 4-3.4(a) which provides, in part, that a lawyer shall not “unlawfully obstruct another party’s access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value;” and
- Rule 4-8.4(d), which prohibits a lawyer from engaging “in conduct that is prejudicial to the administration of justice.”
The court noted that the lawyer had been disciplined five times previously.
You can find the opinion here.