Legal Ethics

Quandaries and Quagmires: New ABA Op. 479: Using former clients’ information

By William Wernz posted 02-20-2018 10:10

  

When may a lawyer use information from a prior representation against the former client? Rule 1.9(c)(1), R. Prof. Conduct, provides that a lawyer may not, “use information relating to the representation to the disadvantage of the former client except as these rules would permit or require with respect to a client, or when the information has become generally known.”

New ABA Formal Opinion 479 addresses the “generally known” exception. Op. 479 is of limited use because it does not address three important topics: (1) the “stock-in-trade” exception; (2) the Restatement permission for readily available public records; and (3) the “except as these rules permit” provision of Rule 1.9(c). This article discusses these subjects.

Rule 1.9 generally deals with former client conflicts and confidentiality duties. Subject to some exceptions, Rule 1.9 finds a conflict of interest when a lawyer who formerly represented client A now represents client B in a matter where there “is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance” B’s position. Rule 1.9 cmt. 3. Rule 1.9(c) addresses when a lawyer may use a former client’s information against the former client and when a lawyer may disclose such information. Op. 479 addresses disclosure only in passing.1

Information that becomes a lawyer’s stock-in-trade: Is all “information relating to the representation” confidential? Rules 1.6 and 1.9 start with this broad definition, but the rules themselves provide many specific exceptions. Rule 1.6(b)(1) - (11) list such exceptions. In addition, there is a generally recognized exception for information that is often called a lawyer’s “stock-in-trade.”

OLPR recognizes the Restatement of the Law Governing Lawyers as “authoritative.”2 The Restatement states, “Confidential client information does not include what a lawyer learns about the law, legal institutions such as courts and administrative agencies, and similar public matters in the course of representing clients. Such information is part of the general fund of information available to the lawyer. *

 *A lawyer may use such information — about the state of the law, the best way to approach an administrative agency, the preferable way to frame an argument before a particular judge — in a future, otherwise unrelated representation that is adverse to the former client.” § 59 cmt. e.

The stock-in-trade exception is recognized to some degree in the “general knowledge” provision of Rule 1.9, comment 3, discussed below. The stock-in-trade exception is widely recognized among good lawyers, the Rules are “rules of reason,” and “reasonable” is defined as what good lawyers do.3 Op. 479 does not address the stock-in-trade exception.

The “generally known” exception: Are courthouse records “generally known?” For example, may a lawyer use or disclose knowledge of a client’s criminal past, gained in a representation, in a later controversy with the client? Op. 479 says “no.” Op. 479 explains, “Information is not ‘generally known’ simply because it has been discussed in open court, or is available in court records, in libraries, or in other public repositories of information.”

What about public records information that is readily obtainable? In the internet age, the amount of readily available information is increasing by large exponents. Op. 479 does not differentiate readily available public records from hard-to-find records. Two authorities take approaches different from that of Op. 479.

The first authority is a Minnesota Supreme Court referee’s determination. The Office of Lawyers Professional Responsibility (OLPR) charged attorney Fuller with confidentiality violations because he disclosed the criminal records of his former client, Hanson. After a discipline trial, the referee rejected the charge, reasoning that, “A similar check by any member of the public would show that Hanson had been convicted of the bad check charge.”4 OLPR did not appeal. After this case, OLPR has not taken a position on whether a future, similar disclosure or use would violate the confidentiality rule. Because OLPR often follows ABA opinions, OLPR may well rely on Op. 479 to resume taking the position rejected by the referee in In re Fuller.

The second authority in part agrees with Op. 479, but in important part disagrees. The Restatement of the Law Governing Lawyers takes the position that public records information is “generally known” if the “information is obtainable through publicly available indexes and similar methods of access.” § 59 cmt. d. The term “readily available” might be the tagline for the Restatement position. This exception has been expanding in its applications, as more public records become readily available through online court filings and various types of remote access.

In contrast, Op. 479 opines that to be “generally known,” information must actually be “widely recognized,” either in the relevant locale or in the relevant occupation. Oddly, Op. 479 does not even acknowledge, let alone explain, its disagreement with the Restatement. Op. 479 cites the Restatement as if there were full agreement.

As noted above, OLPR regards the Restatement as “authoritative.” OLPR accords ABA opinions a lesser status: “Although ABA Opinions are not binding on the Minnesota disciplinary system, they are considered authorities to which some weight is afforded and usually are safe to follow.”5 What are called “ABA opinions” are not adopted by the ABA, as the Model Rules are. Rather, they are opinions of the ABA Standing Committee on Ethics and Professional Responsibility.

When do “these rules” permit use or disclosure of confidential information against a former client? There are three important exceptions in the rules themselves to the prohibition on use of former client information.

First, a lawyer may use and disclose confidential information, to the extent reasonably necessary, in a legal proceeding with a client. Rule 1.6(b)(8). Fee collection and malpractice defense suits are the best-recognized examples of such proceedings. After amendment of Rule 1.6(b)(8), in 2005, the Court recognized that a lawyer could use and disclose confidential information, as necessary, to establish a claim. Examples of such claims against former clients would include a defamation per se action and a claim of wrongful termination by the lawyer’s employer.6Further examples of permission to disclose may be found in Rule 1.6(b)(1)-(11), which identify circumstances in which disclosure of otherwise confidential information is permitted.

The second and third examples of the “except as these rules permit” exception are found in comment 3 to Rule 1.9. “The comments generally will reflect the OLPR’s interpretation and enforcement position. Lawyers can follow the comments’ guidance with confidence.”7

Comment 3 states, “In the case of an organizational client, general knowledge of the client’s policies and practices ordinarily will not preclude a subsequent representation; on the other hand, knowledge of specific facts gained in a prior representation that are relevant to the matter in question ordinarily will preclude such a representation.” The comment codifies, for organizations generally, a position taken in ABA Formal Op. 99-415, “Representation Adverse to Organization by Former In-House Lawyer.” As noted in discussion of the stock-in-trade exception above, “general knowledge” includes not only “policies and practices,” but knowledge of the law, personalities, etc.

Comment 3 to Rule 1.9 also states, “Information that has been disclosed to the public or to other parties adverse to the former client ordinarily will not be disqualifying.” On the basis of this comment (adopted in 2005), a lawyer (L) could represent H and W, as joint clients, in their estate planning and, after that representation terminated, represent H against W in a marriage dissolution. The information of W in the first representation was also the information of H, because they were jointly represented. W’s information thus has been disclosed to a (now) adverse party, H. In addition to this textual support for permitting L to represent H, there is a practical consideration. If H had to retain a new attorney, that attorney could obtain from L the joint estate planning file, and H could ask the former attorney for any information not in the file. Put differently, there is normally no confidential information disadvantage for W when W’s former lawyer appears against her. Many lawyers might nonetheless decline to represent H, for professionalism reasons, but Rule 1.9 does not preclude the representation.8

Conclusion: Op. 479 provides some useful guidance on the “generally known” exception to the rule against using confidential information against with former clients. For a more complete understanding of the confidentiality issues, however, lawyers should also consider the stock-in-trade exception, the Restatement doctrines, and the exceptions in Rule 1.9 comment 3.

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Footnotes

  1. 479 states that confidentiality duties to current and former clients are the same. For clarification, however, it should be noted that exceptions to confidentiality arise much more often as to former clients. For guidance, lawyers should note a discipline affirmed for a Rule 1.9(c) disclosure violation in In re Panel File No. 41310, 899 N.W.2d 821 (Minn. 2017) (“the rules protecting client confidences oblige a lawyer to maintain all client confidences, significant or insignificant”).
  2. Restatement (Third) of the Law Governing Lawyers § 59 cmt. e (2000). The Restatement is called “authoritative” in Martin Cole, Comparing Discipline: Apples to Oranges?Bench & B. of Minn., Oct. 2006.
  3. SCOPE [14]; Rule 1.0(i).
  4. Findings of Fact, Conclusions of Law, and Memorandum of Honorable John C. Lindstrom at 19, In re Fuller, 621 N.W.2d 460 (May 23, 2000).
  5. Martin A. Cole, Scripting Contacts with Represented Persons, Bench & B. of Minn., Nov. 2011.
  6. Kidwell v. Sybartic, 784 N.W.2d 220 (2010). Although there was no majority holding in Kidwell the justices appeared to agree that Rule 1.6, as amended in 2005, permits disclosures to establish a claim.
  7. Timothy M. Burke, Comparing Services Can Be Dicey, Minn. Law., July 2006.
  8. This subject is discussed at length in my treatise, Minnesota Legal Ethics, available on the MSBA website.

 

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