Legal Ethics

I. PROBLEMS WITH THE COMMENTS II
A. Comments – the Unknown. This blog completes the discussion that was initiated last month, regarding comments to the Rules of Professional Conduct and a petition to amend the Rules and “acknowledge” certain comments. My October blog explained how Minnesota lawyers and judges literally do not know what the law of ethics is, regarding the comments to the Rules. The blog also explained the sources of this confusion – chiefly the Minnesota Supreme Court’s rejections of petitions to adopt the comments as guidelines, coupled with the Court’s unpredictable and after-the-fact adoptions and citations of isolated comments. Confusion also arises because the Court’s agencies, the Office of Lawyers Professional Responsibility (OLPR) and the Lawyers Board (LPRB), do not follow the Court’s lead, but instead rely on all the comments for both interpretation and enforcement.

B. A Petition That Will Not Solve the Problems. The October blog also explained why the pending MSBA/LPRB petition to amend the Rules of Professional Conduct and “acknowledge” [sic] new comments (and only the new comments) will not solve the problems of the comments. The petition would create a third class of comments: (1) those that the Court, but not OLPR, regards as not having any status, even as guidelines; (2) those that the Court regards as “establishing” or amending the law; and (3) those few that are new and “acknowledged,” but not adopted. The present problem of determining, in advance of conduct, whether a particular comment belongs in category (1) or (2), is not addressed by the petition.

II. RECOMMENDATION I – ADOPT THE PROPOSED RULES AMENDMENTS
A. Four Recommendations. To address the problems with the comments, four recommendations are made to the Minnesota Supreme Court.

B. Codification. The first recommendation is that the Court should adopt the Rules amendments in the MSBA/LPRB petition. These amendments are not controversial, they follow ABA Model Rule amendments, and they are of minor importance. As explained in the October blog, even the amendments which OLPR has identified as most important merely codify positions which OLPR and lawyers generally have taken for decades, e.g. that lawyers have a duty to handle confidential information carefully.

III. RECOMMENDATION II – REJECT “ACKNOWLEDGMENT”
A. Confusion About Acknowledgment. The second recommendation is that the Court should reject the MSBA/LPRB proposal for the Court to “acknowledge” proposed new comments. Such acknowledgment would increase confusion about the status of comments. For example, in some future year, if “acknowledgement” were to be significant, courts and lawyers would have to try to identify the few comments that the Court “acknowledged” in 2014-15, and the many comments which were not acknowledged. Having made the identification, they would then be uncertain whether such acknowledgment conferred any status on a comment that had never been adopted. 

B. How Many Categories? Who can keep straight which comments currently have some status and what level of status? Adding still another category for a few comments will cause more confusion than clarification. If the petition is granted, there would be comments of the following types:
1. Comments “specifically adopted” by the Court, if any (1988 order).

2. Comments “historically relied upon” by the Court (State v. 3M, 845 N.W.2d 808 (Minn. 2014)), but without clarity as to whether all comments to a rule or only some must be used in the future.

3. Comments drafted by the Court and never repealed (1985 version of Rule 1.6 comments).

4. Comments which “establish” the law. State v. Miller, 600 N.W.2d 457, 467 (Minn. 1999).

5. Comments cited by the Court, without characterization.

6. Comments which the Court has found to modify the Rules, without the Court ascribing any particular status to the comments. In re Albrecht, In re Moe (citations below). 

7. Comments which are “guidelines” for OLPR, LPRB, most lawyers and the great majority of other jurisdictions. 

8. Comments which have been “acknowledged” by the Court.

IV. RECOMMENDATION III – ADOPT THE COMMENTS
A. Adopt the Comments as Guidelines. A third recommendation is that the Court should follow the example of forty other states, by adopting, as guidelines, the Comments to the Rules. Several reasons support this recommendation.

 B. OLPR, LPRB and Lawyers Have Followed the Comments. OLPR has used the comments both for interpretation and enforcement for many years. Timothy M. Burke, Comparing Services can be Dicey, MINN. LAW., July 2006, at 5. LPRB has also cited comments, in Board opinions. Because lawyers are much more likely to encounter OLPR than to encounter the Court in ethics matters, the comments have become part of the common law of Minnesota ethics.

C. Some Comments Are Essential. Rule 4.2 prohibits certain communications with a person represented by counsel. When an organization is represented, who within the organization is protected by Rule 4.2? This question has spawned much litigation, but little or no litigation is needed if the guidelines of comment 7 to Rule 4.2 are followed. All courts, including the Minnesota Supreme Court, appear to follow comment 7 to Rule 4.2. This comment is the best example of the need for comments.

D. Other Comments Are Very Important. When is a representation “directly adverse” to a client and when is a representation “materially limited?” Thirty-five comments to Rule 1.7 address these and other current client conflict of interest issues. A law firm cannot operate its conflicts review program without guidance on such matters, but the Court has never adopted these comments as guidelines. Should a state district judge take any account of these comments in a disqualification motion? As noted in the October blog, failure to take account of comments to the former client conflict rule (Rule 1.9) was found to be reversible error in a major case, State v. 3M.

E. More Examples. The meaning of “informed consent” is important for conflict waivers and many other issues in the Rules. Rule 1.0(f), “Terminology,” gives a helpful definition. The definition is greatly specified in comments 6 and 7 to Rule 1.0. OLPR cites these comments in its dispositions. These specifications are, however, currently as nothing to the Court.

F. Not Mere Committee Comments. In 2004, the MSBA/LPRB presented a petition to amend the rules, and to adopt the comments as guidelines, to the Court. Explaining the Court’s reluctance to adopt the comments, a justice cited the Court’s traditional declination to adopt mere committee comments. But the comments to the rules are not those of a local committee. They are part and parcel of the ABA Model Rules. The Court adopted the comments to the Code of Judicial Conduct without rejecting them as mere committee work. These inconsistent actions are inexplicable.

V. RECOMMENDATION IV – BEFORE ADOPTION OF THE COMMENTS BECOMES EFFECTIVE, THE COURT SHOULD DIRECT MSBA AND LPRB TO REVIEW AND PROPOSE CHANGES TO THE COMMENTS 

A. Discussions in MINNESOTA LEGAL ETHICS. A fourth recommendation is that the Court should stay its order adopting the comments as guidelines, pending review and recommendations by MSBA and LPRB for amendments to the comments. My treatise, MINNESOTA LEGAL ETHICS, addresses in some detail problems with various comments. Most of the following examples are summaries of these discussions.

B. Pro Se Lawyers, Rules 3.1 and 3.3, No One Knows. 
1. Do Rules 3.1 and 3.3 apply to pro se lawyers? They both begin with language indicating that these Rules apply to all lawyers - “A lawyer shall not. . .” These Rules do not have the restriction, found in many rules, “in representing a client.” 

2. However, in two recent cases the Court found that Rule 3.3 cmt. 1 (“This Rule governs the conduct of a lawyer who is representing a client. . ..”) effectively amends Rule 3.3. In re Albrecht, 845 N.W.2d 184, 191 (Minn. 2014); In re Moe, File No. A13-1611 (Minn. 8/13/04), fn. 8. These cases held that Rule 3.3 does not apply to pro se lawyers. 

3. The language of Rule 3.1 cmt. 1 is similar to that of Rule 3.3 cmt. 1. However, the Court and OLPR have often found Rule 3.1 violations by pro se lawyers. Have Rule 3.1 precedents been superseded by a new interpretation of a parallel Rule 3.3 comment? No one knows.

4. More generally, which Rules apply to pro se lawyers? OLPR does not know. Martin A. Cole, Ethics and Pro se Lawyers, BENCH & B. OF MINN., Sept. 2014. No one knows. The remedy is to amend the above comments, but the Court has rejected all previous petitions to amend comments, either individually or en bloc.

C. Another Comment Purports to Subtract from a Rule. Rule 1.6 cmt. 14. 
1. This comment states, “If the lawyer’s services will be used by the client in materially furthering a course of criminal or fraudulent conduct, the lawyer must withdraw, as stated in Rule 1.16(a)(1).” Rule 1.6 cmt. 14 (emphasis added). 
2. However, Rule 1.16(a)(1) does not include any materiality provision. Rule 1.2(d), which addresses a similar subject, likewise lacks a materiality provision. 

D. Several Comments Purport to Add Obligations to a Rule.
1. Rule 1.2(d) / Rule 1.2 cmt. 13.

a. Rule 1.2(d). Rule 1.2, regarding client crime or fraud, applies only when “the lawyer knows” of the wrongful conduct. Rule 1.2(d). “Knows” means actual knowledge or turning a blind eye. Rule 1.0(g).

b. Rule 1.2 cmt. 13. However, a comment, which interprets Rule 1.2(d), states, “If a lawyer comes to know or reasonably should know that a client expects assistance not permitted by the Rules of Professional Conduct or other law. . ., the lawyer must consult with the client regarding the limitations on the lawyer’s conduct. See Rule 1.4(a)(5).” Rule 1.2 cmt. 13 (emphases added). “Reasonably should know” entails a duty to ascertain, which is not required by rule. Rule 1.0(k). Both Rule 1.2(d) and Rule 1.4(a)(5) apply only when the lawyer “knows,” not when the lawyer “reasonably should know.”

2. Rule 1.0 cmt. 5. The term “fraud” is used frequently in the Rules. It is defined to have the meaning given it by Minnesota substantive law. Rule 1.0(e). However, a comment purports to modify the definition, by stating that for there to be fraud, “it is not necessary that anyone has suffered damages or relied on the misrepresentation or failure to inform.” Rule 1.0 cmt. 5. Reliance and damages are, however, elements of the Minnesota law of fraud. 

3. Rule 1.0 cmt. 2. This comment refers to “the rule that information acquired by one lawyer is attributed to another [lawyer in the firm].” However, there is no such rule. Case law in some jurisdictions imputes information in some cases, where imputation is reasonable, but not in all cases. If there were a categorical rule, many injustices would be produced, because a law firm cannot systematically file and match all information. 

4. Rule 1.7 cmt. 21. The Rules themselves do not address revocation of “informed consent,” as in conflict waivers. However, a comment deals with revoking “the consent to the client’s own representation.” The comment states, “A client who has given consent to a conflict may revoke the consent to the client’s own representation and, like any other client, may terminate the lawyer’s representation at any time. Whether revoking consent to the client’s own representation precludes the lawyer from continuing to represent other clients depends on the circumstances, including the nature of the conflict, whether the client revoked consent because of a material change in circumstances, the reasonable expectations of the other client and whether material detriment to the other clients or the lawyer would result.” Rule 1.7 cmt. 21. This comment does not appear to interpret any rule, but rather to make an independent statement on matters of law and equity. 

5. Rule 1.13 cmt. 9. 

a. This comment states that, where there is a “conflict or potential conflict, . . .the lawyer cannot represent” both an organization and an organizational employee or other constituent. Id. 

b. However, many conflicts, and especially potential conflicts, do not preclude joint representation, so long as there are informed consents. Rule 1.7(b). Such joint representations are very common.

6. Escrow Agent as Fiduciary? A comment contemplates that a lawyer might act in a matter solely as an escrow agent. In that event, the lawyer “is governed by the applicable law relating to fiduciaries even though the lawyer does not render legal services in the transaction and is not governed by this rule.” Rule 1.15 cmt. 5. Whether an escrow agent has fiduciary or only contractual duties to a third party is, however, a matter that may involve an agreement between the parties, as well as the nature of the duties.

E. Some Comments Are At Odds With the Rule They Purport to Interpret.
1. Rule 1.6 cmt. 13 states, “Some rules require disclosure only if such disclosure would be permitted by paragraph (b). See Rules 8.1 and 8.3.” However, this comment inaccurately describes Rule 8.3, because Rule 8.3(c) expressly provides that Rule 8.3 does not require disclosure of that which Rule 1.6 “allows a lawyer to keep confidential.” The comment cannot trump the Rule.

2. Rule 1.14 cmt. 8. “[U]nless authorized to do so, the lawyer may not disclose such [client] information.” Rule 1.14 cmt. 8. This comment was borrowed from the Model Rules, but is not accurate in Minnesota. In Minnesota, Rule 1.6(b)(2) allows some disclosures that are not “authorized,” but are allowed, because they are harmless.

F. Some Comments Are Inconsistent With Each Other.
1. Rule 1.5 cmt. 4. 

a. On one hand, a comment states that nonmonetary fee payments “may be,” and “often” are, subject to the business transaction with client provisions of Rule 1.8(a): “[A] fee paid in property instead of money may be subject to the requirements of Rule 1.8(a) because such fees often have the essential qualities of a business transaction with the client.” Rule 1.5 cmt. 4 (emphasis added). 

b. On the other hand, a comment states - apparently categorically - that Rule 1.8(a)’s “requirements must be met when the lawyer accepts an interest in the client’s business or other nonmonetary property as payment of all or part of a fee.” Rule 1.8 cmt. 1. As I have argued elsewhere, this comment produces unreasonable applications, e.g. where the value of the nonmonetary property is small and readily determinable, it is unreasonable to require a lawyer to advise a client to seek the opinion of independent counsel.

2. Rule 1.8 cmt. 10. Rule 1.8(e) is said to be justified because lending living expenses to clients “would encourage clients to pursue lawsuits that might not otherwise be brought. . ..” Rule 1.8 cmt. 10. This explanation hearkens to ancient British prohibitions on maintenance and barratry. However, the same comment justifies contingent fees because they “help ensure access to the courts.” Id. This second explanation hearkens to the contrary views of modern America.

3. Rule 1.14 cmts. 2, 4. 

a. One Rule 1.14 comment states, “Even if the person has a legal representative, the lawyer should as far as possible accord the represented person the status of client, particularly in maintaining communication.” Rule 1.14 cmt. 2. 

b. However, another Rule 1.14 comment states, “If a legal representative has already been appointed for the client, the lawyer should ordinarily look to the representative for decisions on behalf of the client.” Rule 1.14 cmt. 4 (emphasis added).

G. ABA Comments in Need of Local Modification
1. “Applicable Law” Comments.

a. ABA Model Rule comments defer to state law by using the reference, “applicable law,” but Minnesota comments should not retain that reference where local law is determinable.

2. Rule 1.8 cmt. 6. Although ABA Model Rule 1.8(c) prohibits solicitation by lawyers of substantial gifts from clients, except where the lawyer is related to the client, Minnesota Rule 1.8(c) has no such provision. However, Minnesota Rule 1.8, Comment 6, without any support in the Minnesota rule, repeats ABA Model Rule 1.8, Comment 6, “[A] lawyer may not suggest that a substantial gift be made to the lawyer or for the lawyer’s benefit . . . .” This comment should be stricken, unless Model Rule 1.8(c) is adopted.

3. Rule 3.8 cmt. 5.

a. Comment 5 to Minnesota Rule 3.8 appears to have been carried forward from ABA Model Rule 3.8 without recognition that the two rules differ in an important respect. The Minnesota comment states, “Paragraph (f) supplements Rule 3.6, which prohibits extrajudicial statements that have a substantial likelihood of prejudicing an adjudicatory proceeding. In the context of a criminal prosecution, a prosecutor’s extrajudicial statement can create the additional problem of increasing public condemnation of the accused. Although the announcement of an indictment, for example, will necessarily have severe consequences for the accused, a prosecutor can, and should, avoid comments which have no legitimate law enforcement purpose and have a substantial likelihood of increasing public opprobrium of the accused. Nothing in this comment is intended to restrict the statements which a prosecutor may make which comply with Rule 3.6(b) or 3.6(c).” This comment interprets Model Rule 3.8(f)’s restriction on statements “heightening public condemnation of the accused.” However, because Minnesota did not adopt this restriction, the comment serves no interpretative purpose in Minnesota. 

4. Rule 7.2 cmt. 2.

a. OLPR has stated that client consent is needed for website identification of clients. Cassie B. Hanson, Making Sure Your Firm’s Website Complies With the Rules, MINN. LAW., Sept. 3, 2007, at 11. This position would find support in Rule 7.2 cmt. 2, which states, “This rule permits public dissemination of information concerning, . . . with their consent, names of clients regularly represented . . . . ” However, this comment is borrowed from the ABA Model Rules, which do not have Minnesota’s permission, in Minnesota Rule 1.6(b)(2), to disclose harmless information. Moreover, a comment cannot add obligations to those created by Rule. If client identification is not likely to be embarrassing or detrimental, and the client has not forbidden it, then the lawyer may identify the client under Rule 1.6(b)(2), without express consent.

I. PROBLEMS WITH THE COMMENTS II A.