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Legal Profession (California & ABA)PrefaceHistorical overview of the lawyer, a consideration of what is the “practice of law,” a review of the ethical standards that form the norms for the practice of law, a consideration of the public responsibilities of the lawyer as the embodiment of the legal structure of society, attention to the economic aspects, and the place of the judiciary with respect to the bar.Legal ethics apply to all attorneys in every field of practice. The California Rules of Professional Conduct (CRPC) prohibit participation in settlement agreements that attempt to hide unethical, incompetent, negligent, or willful misconduct.In California, there is no squeal rule, i.e., an affirmative ethical duty to report professional misconduct.By contrast, the ABA rules mandate reporting other lawyers who have violated the rules of professional conduct.Regulation of the Legal ProfessionThe Law Governing Lawyers (Restatement)Lawyers are regulated by moral, professional, and legal constraints in discharging their several responsibilities as representatives of clients, officers of the legal system, and public citizens having special responsibilities for justice.Federal PreemptionRegulation of attorneys is generally a matter of state law. Federal laws preempt state laws regulating the conduct of attorneys in two situations: (1) when constitutional rights are involved; or (2) matters of exclusive federal jurisdiction.State Preemption (Baron Case – LA Lobbying Ordinance)Laymen who “practice law” within the meaning of the State Bar Act are guilty of a misdemeanor. Occurs where “legal questions are involved which, to safeguard the pubic, reasonably demand the application of a trained legal mind.”Separation of Powers (Negative Inherent Powers)The power of the judiciary to govern admission to the practice of law is based on the California Constitution article VI, section 1. Where the power to regulate attorneys is not expressly granted in the state constitution, it is assumed by courts under the negative inherent powers doctrine, which is part of the constitutional separation of powers.Constitutional tribunals have authority to protect the sanctity of the judicial process (i.e., integrity).Supervisory or administrative powers enable them to carry out their duties (i.e., necessary for business).Equitable power is derived from the historic power of equity courts (e.g., neutrality, fairness, just results).Potter Case – Prozac SettlementA lawyer’s obligation to exercise candor with the trial court supersedes his obligation to a client. The trial court, upon a reasonable basis, has inherent authority to conduct an investigation and a hearing to determine whether its judgments accurately reflect the truth (i.e., actual fraud not required.) Inherent authority to protect legitimacy and accuracy.California State BarThe state bar was created by the legislature to assist the CA Supreme Court. Mandatory, integrated, or unified bar is constitutional as a pre-condition to practicing law. Dues may not be used to support political ideology that does not relate to the legal profession, but bar may still take positions. Regardless, about 85% of the budget is used for discipline.The State Bar does not have the power to make ethics rules that are binding on California lawyers. Instead, it generates proposed rules which only the Supreme Court can adopt and make binding. B&P Codes 6076-77.State Bar CourtThe State Bar Court is divided into the Hearing Department and the Review Department. A State Bar Court decision recommending that an attorney be suspended or disbarred is transmitted to the Supreme Court for independent review.The American Bar Association (ABA) Model Rules of Professional Conduct persuasive, not authoritative, in CA.California Rules of Professional Conduct (CRPC) – violations result in suspension or disbarmentCRPC help define the duty component of the fiduciary duty which an attorney owes to his client, but are not intended to create new civil causes of action. Nothing in the rules shall be deemed to create, augment, diminish, or eliminate any substantive legal duty of lawyers or the non-disciplinary consequences of violating such a duty. CRPC Rule 1-100(A).Malpractice (duty, breach, cause-in-fact, scope of liability, & damages) – violations result in substitutionary reliefMost malpractice cases tend to involve a claim that because the lawyer did or did not do something, the client lost. In order to prove causation, you need a trial within a trial to show but for the lawyer’s conduct, the client would have won.Admission StandardsDiscipline is properly imposed for acts involving moral turpitude whether or not they relate to conduct by an attorney in his professional capacity; therefore, the fact an act was committed prior to bar admission is irrelevant. Stratmore.If the conduct is egregious enough, a license may be cancelled for fraud, as though he had never been admitted.Qualification over MachinationThe Ninth Circuit ruled that the Trust Territory of the Pacific Islands is not a territory or insular possession of the United States and disbarred Rothstein. A court is not a slave to literal interpretation of its local rules where injustice is the result (i.e., where a literal interpretation would thwart the purpose of the rule or lead to an absurd result.) If an attorney gains membership based on membership in another bar, and was not in fact properly admitted to that bar, then the attorney must be removed even if the attorney remains a member of the bar which erroneously admitted him. In re Francis Cano.Federal QualificationFederal courts have the exclusive right to determine admission to federal courts. Their admission rules preempt state law on unauthorized practice, which only applies to practice before state courts. Most district courts require the attorney to be a member of the bar of the state in which the district court is located. However, if a lawyer is disbarred by a state, that disbarment does not necessarily terminate the lawyer’s admission to federal courts in that state.Formal RequirementsConsumer protection/avoiding incompetence model / Informed consent modelEducation: 2 years undergraduate; sufficient legal knowledge; baby bar when not accredited; foreign REQs discretionary.Diploma privilege: Most states require passage of the bar exam as a condition to practice law. A few states, however, consider graduation to be sufficient. (Rationale: unfairness, racial discrimination, no Sherman Act liability, etc.)Citizenship and Residency Requirements(1) Admission to the bar may not be based on citizenship; (2) A nonresident who has passed the bar exam cannot be denied admission for refusal to live in the state; (3) A licensed lawyer who seeks admission by reciprocity cannot be required to change his residence (but may be required to practice full time in that jurisdiction); (4) A state may not require limited residency (i.e., residency for a short period of time) before being allowed to take the bar exam; (5) A federal court may not impose a residency requirement as a condition for admission to its bar, but it may require that an attorney be a member of the bar of the state in which the federal court sits (because it relates to fitness to practice.)Moral CharacterSchware standard: A state can require high qualification standards, such as good moral character or proficiency in its law, but any qualification must have a rational connection with the applicant’s fitness or capacity to practice law.Interests: (1) Mental health; (2) honesty, integrity; (3) personal, social, business conduct; (4) political beliefs.Reasons: (1) Shielding clients from abuse; (2) safeguarding the legal system from subversion; (3) public image.Acts of moral turpitude: Violent crimes, fraudulent crimes, antisocial conduct, drunkenness, or drug abuse.Mental HealthCase law under the Americans with Disabilities Act limits the questions that may be asked about an applicant’s mental health by setting temporal and/or substantive bans (e.g., disciplinary proceedings limited to ability & fitness to practice.)Ronwin [AZ Refused Admission]: Disbarred elsewhere due to frivolous lawsuits caused by paranoid personality.Rowe [Dream House]: Not criminally culpable for slaying of wife and children yet warrants disciplinary action for“conduct that tends to reflect adversely on the legal profession as a whole and undermine public confidence.”Honesty, Integrity, and Criminal ConductIn California, failure to disclose relevant information is an act of moral turpitude, worthy of post-admission sanctions.The State Bar may consider any criminal act committed by the applicant, regardless of charges, dismissals, or acquittals.Crimes like homicide, domestic violence, sexual assault, and robbery are sufficient for disbarment/denial of admission.Noncommercial sex acts between consenting adults are not relevant to prove fitness to practice law; however,applicants may be denied admission for actionable sexual conduct, such as rape, child molestation, etc. not adultery.Civil Disobedience in California(1) Advocacy is protected under the 1st Amendment unless it is intended to incite or produce imminent lawless conduct(2) An attorney who engages in violations of the law may be disciplined; and(3) An attorney may not advise a client to disobey the law unless the attorney reasonably and in good faith believes the law is invalid and there is a good faith argument for its reversal or modification (see, e.g., Hallinan v. State Bar).Political BeliefsThe State Bar may inquire into all knowing memberships in “subversive” organizations, including (1) right-wing militia movements; (2) terrorist organizations; and (3) hate groups. Whether it is appropriate to assess an applicant’s character and fitness on speculative predictions of future actionable misconduct. See, e.g., Hale: KKK member denied admission.Squeal Rule recognized by ABA, but not California—subject to privileges.B&P contains oath for California lawyers. For readmission, rehabilitation requires a manifestation of remorse.The Authorized Practice of LawUntil the 1960s, when antitrust laws were strengthened, treaties defined the areas within nonlawyers could give advice.“The Practice of Law” – Undefined by the ABA, MR, CRPC, and B&P yet not void for vagueness.Chesterfield Smith: The practice of law is anything my client will pay me to do.Palmer Case: Each case must be decided upon its own particular facts.Merchants Case: (1) representation of another before court/tribunal; (2) prep of docs substantially affecting legal rights.Early version of ABA Code of Responsibility: Rendering of services that call for the professional judgment of a lawyer.The California attorney general enforces the rules and the unauthorized practice of law is a misdemeanor.Unauthorized Corporate Legal ServicesA corporation, other than a certified professional legal corporation, is forbidden to practice law (but may hire counsel).Merchants’ Protective Corporation: Duty of loyalty compromised by corporate contract for members’ legal services.The company contract in Merchants was arranged to prevent the violation of three common law crimes:Barratry consists of the practice of groundless judicial proceedings (i.e., three times with intent to vex or annoy).Maintenance is interference in a suit (e.g., support to continue/multiply) in which the intervenor has no interest.Champerty is a deal to split the proceeds of a litigated claim btwn interested party and a third party supporter.Trust LitigationZiegler: Sellers successfully moved to dismiss b/c trustee was not an attorney and thus cannot represent beneficiaries.Finkbeiner: Trustee may appear in court without counsel to fulfill duties to report, modify, and terminate the trust.Plaintiffs seek $200 million payable in gold and silver coinsAdams v. ABA: The courts have the authority to determine qualifications for admission to the practice of law. The requirement that only licensed lawyers may represent others in court is a reasonable rule that does not offend any constitutional guarantee. (Note: plaintiffs may assist one another behind the scenes in preparing for trial.)JW v. Superior Court: Mother cannot represent her minor son even though she cannot afford counsel.US v. Whitesel: Defendant’s accountant in a tax case cannot act as legal representative, but may sit at table.Classes of Membership in the California State BarAll members are deemed active provided they pay their dues and attend mandatory continuing legal education. B&P.Voluntary inactive status may be requested. While inactive, they may not practice. Minimal annual dues fee required.Involuntary inactive status may become necessary if an attorney needs treatment, confinement, or conservatorship.Attorneys admitted Pro Hac ViceCalifornia permits an out-of-state attorney to appear in court for a particular case. The Ninth Circuit held that there is no Immunities Clause violation for discriminating against its own residents. SCOTUS held no due process violation. Flynt.Concerns of the dissent: Broad discretion invites capricious exclusion in civil rights cases.Reasons for refusal: Notoriety, personal comments, ethical standing, obstruction of justice, lack qualifications.Revocation requirements: The attorney is entitled to notice, an opportunity to respond, and written reasoning.Note: by accepting pro hac vice status, the attorney has consented to be bound by both states’ duties and laws.Registered Foreign Legal ConsultantsA registered foreign legal consultant is a person who is admitted to practice in good standing as an attorney in a foreign country and has a certificate of registration from the California State Bar. Limited jx and needs malpractice insurance.Group Legal Services ProgramsCollective activity undertaken to obtain meaningful access to the courts is a fundamental right. Ethics < Constitution.Button: The NAACP lawyers may litigate on the behalf of victims of racial discrimination. Protected by 1st Amendment.Brotherhood: Maintaining a list of lawyers for member recommendation is protected.United Mine Workers: Labor union has a right to have its own salaried attorney represent worker’s compensation. Professional Law CorporationsAll directors, officers, and stockholders must be lawyers. Only licensed attorneys may direct the actions/decisions and render legal services to clients. Failing to register may result in criminal liability. May be profit or nonprofit.Cappiello v. Boyle: If a PLC has failed to register, its clients may be solicited.Olsen v. Cohen: Clients may not recover legal fees they paid to an unregistered firm.Frye v. Tenderloin: Nonprofit corporations need to register but not all of the directors need to be lawyers.Suspended LawyersFarnham: Practicing during suspension constitutes the unauthorized practice of law. (Note: excludes clerical activities.)Crawford: Inactive members must send notice to the State Bar and all clients when they engage in certain activities.Rowe: A suspended lawyer is allowed to publish a law review article listing his J.D. degree.Certified Law StudentsPeople v. Perez: Student in-court programs make competent lawyers. A law student, that exercises no independent judgment while appearing under the direct supervision of a member of the bar, is not engaging in the practice of law.Dissent: The majority ignores that the State Bar is not authorized to admit a person to the practice of law. CA Sup Ct.Paralegals8 Prohibitions: no legal advice, no court representation (agency OK), no explaining legal documents, no acting as a runner/capper, no violating rules, no performing service contracts, no making business deals, no establishing fees.The right to proceed Pro SePolicy: Respect for the dignity and autonomy of the individual. / Discretion to assign advisory & standby, not co-counsel.Faretta: A competent criminal defendant has a constitutional right to waive counsel and proceed pro se, despite the fact the ground on appeal is probably going to be that the defendant did not intelligently and voluntarily make that decision.Hernandez: 9th Circuit held three elements required: (1) nature of charges; (2) possible penalties; (3) dangers of pro se.However, the trial judge does not have to inform the pro se defendant of the privilege against self-incrimination.The Unauthorized Practice of LawBirbrower: An out-of-state law firm, not licensed to practice law in CA, violated B&P 6125 when it performed legal services in CA for a CA client. May recover quantum meruit for legal services performed in New York for the client. But note: systematic and continuous presence in a jx where a lawyer is not licensed can occur even if not physically present.Dissent: Merchants’ definition overbroad. Baron definition better—representation or trained legal knowledge.Legislature amended B&P 6125: Out-of-state attorneys (and laypersons) may appear in arbitration proceedings.Supreme Court “Rules of Court” – 4 Categories of Limited Practice for Out-of-State LawyersLegal services attorneys: Supervised at nonprofit entities whose primary purpose is free legal services for indigents.In-house counsel: No personal representation or court appearance; in-house counsel only for the entity-client.Litigation attorneys: Brief work supervised by California lawyer; appearance governed by pro hac vice requirements.Non-litigation attorneys: Transactional or non-litigation matters on foreign/federal/out-of-state issues where licensed.Do-it-Yourself KitsEstate of Marks: The Blanfords’ activities in selecting a will kit, discussing the distribution of assets and whether it was fair, obtaining the inventory of investments, typing the will, and arranging for the signing and witnessing of the will constituted the unauthorized practice of law. The court invalidated the bequests to the Blanfords and their organization.Torres: No private cause of action for unauthorized practice. / Biakanja: Plaintiffs permitted to bring negligence action.Clerical ServicesSipper: A broker is limited to clerical service and may not determine the kind of legal document a client should execute.LPS: Merely clerical means the service did not engage in the practice of law if it made forms available for the client’s use, filled the forms in at the specific direction of the client, and filed and served those forms as directed by the client.Interactive Software and WebsitesPalmer: Publication of general advice on legal matters on a website does not purport to customize the advice for reader.QFL: Software must clearly and conspicuously state that its products are not a substitute for the advice of an attorney.Defrocked LawyersBenninghoff: The law differentiates between laypeople and defrocked lawyers. The latter cannot represent clients in state administrative hearings. However, state law cannot restrict the right of federal agencies to control who practices.Defrocked lawyers include disbarred, suspended, involuntarily inactive, and lawyers who resign with charges pending.Lawyers Aiding and Abetting NonlawyersAn ethical violation does not occur (1) legal delegation of work; (2) jobs requiring legal knowledge; (3) pro se defendants.Carlos (Sears debt): Lawyers cannot use a nonattorney to negotiate reaffirmation agreements. Rule against fee-sharing.Dual PracticeDual practitioners are bound by legal ethics when the client reasonably believes they are receiving law-related services.Business deals must be (1) fair & reasonable in plain English; (2) time to seek independent counsel; (3) written consent.Lawyers Sharing Fees with NonlawyersThere is no ethical violation for lawyers sharing fees with other lawyers, but lawyers sharing fees with nonlawyers interferes with their duty of loyalty. Note: Profit-sharing plans and flat fees do not invoke the rule against fee-sharing.Rosenberg: Despite paying the broker an illegal contingent fee, the attorneys were entitled to recover quantum meruit.Foreign PartnershipsThere is nothing that prohibits a lawyer licensed in California from opening a partnership with a foreign lawyer; however, if the foreign lawyer intends to practice they need to take the bar exam or register as a foreign legal consultant. Furthermore, the foreign lawyer needs to disclose jurisdictional limitations on any legal correspondence.Ancillary Businesses(1) Ancillary services must be distinct from legal services; (2) client must be informed there is no legal privilege/duty; (3) the business may not interfere with lawyer’s judgment, (4) no soliciting clients; (5) must comply with dual practice rule.Restrictive Covenants GenerallyRestrictions on lawyers leaving law firms violate public policy that clients be free to select counsel of their choice. If the agreement creates a financial disincentive, or direct temporal/geographic/practice type limitations, it is unenforceable.Exception: Retirement benefits—determined by examining existence of minimum age and service requirements.California Approach to Restrictive CovenantsRestrictive covenants are void because they restrain trade, against public policy, with two exceptions: (i) entitled to protect goodwill, confidential/proprietary information, and trade secrets; (ii) outside practice during firm employment.Both Direct and Financial Restrictive Covenants for Departing Partners are Permissible in CaliforniaHoward: Liquidated damages provisions, as long as they do not act as a forfeiture or penalty, are enforceable.Settlements that Limit Future ClientsABA & CRPC prohibit non-representation clauses to prevent a conflict of interest and to insure defective products are removed quickly, provide timely compensation, & decrease future costs. Dissent: Freedom of choice (logical fallacy).Note: Engaging in this type of settlement and making an agreement not to report it is another ethics violation.Attracting ClientsThe Traditional Rules of EtiquettePublicity: Lawyers prohibited from permitting or contributing to favorable news stories about themselves in the media.Advertising: Lawyers were permitted to have business cards or yellow pages, but couldn’t make general advertisements.Solicitation: Ambulance chasing tarnished the reputation of the bar with intrusion upon private grief and exploitation.The Evolution of Constitutional RegulationValentine v. Christensen (1942): Initially, the Supreme Court denied constitutional status to commercial speech.Stern Firm: First organization permitted to advertise for public interest clients (parents wishing to adopt) free of charge.Bigelow v. Virginia: Limited First Amendment protection to an advertisement for legal abortion services in New York.Virginia Pharmacy: Free flow of commercial information is indispensable to the public for informed decisionmaking.Jacoby: Middle income persons need affordable legal assistance and attorneys may publicize their skills & services.Bates upheld Jacoby. Shapero constitutionalized direct targeted mailing. Dissent: These cases demean the profession.The Central Hudson Test (Intermediate Scrutiny Analysis)Under Central Hudson, the threshold inquiry is whether commercial speech concerns lawful activity and not misleading.3 prong test: (1) substantial state interest in regulation that (2) directly/materially advances interest & (3) is tailored.False AdvertisingFriedman: Blanket ban on professional trade names is constitutionally permissible to protect public from being misled.ABA permits trade names that do not imply connection with gov agency or public/charitable legal services organization.Note: CRPC rules invite express disclaimers to rebut presumption of false advertising. B&P says all facts OK.Regulating Timing and Targeted MailingMurgatroyd: Lawyers engaging in direct targeted mailing must follow the ethics rules regarding solicitation in that state.Lockerbie: Commercial speech does not protect Anis brothers’ intrusive/exploitive conduct towards prospective clients.Florida Dissent: Waiting impedes immediate investigation, identification of witnesses, and preservation of evidence.Ficker: First/Sixth Amendment interest of “criminal and traffic defendants in receiving info about legal representation.”Note: California has not addressed the timing of lawyer advertising.Direct SolicitationSolicitation of employment by a lawyer who makes direct contact with victims at sites of accidents, in hospital rooms, or at their homes without prior invitation has always been unethical. Such conduct in California also violates criminal law.Courts do not distinguish disasters or injury severity. It is improper because lawyers are trained in the art of persuasion.Norris: Lawyer violated purpose/spirit of anti-solicitation rule by attaching a letter w/ contact info to $25 funeral wreath.Exceptions: Family, prior professional relationship, and non-profit representation (e.g., political/social causes).Indirect Solicitation (Runners and Cappers)Laypersons may not be used as intermediaries to distribute business cards or make recommendations for employment.FLF Law Firm: Client persuaded by unethical solicitation to leave former counsel after BLF promised her more money.Rubin: The litigation privilege prohibits tort actions, except malicious prosecution, based on solicitation. Other remedies.Lending Money & Advancing CostsABA permits contingent fees for litigation costs, but no advancing living expenses. CRPC permits both after employment.Departing LawyersCurrent clients must be provided with (1) a notice of departure (by both the existing firm and the departing lawyer if practical), (2) a statement of the right to choose representation, and (3) a statement that interests will be protected.Adler: Clients may not be used as security to obtain a bank loan. Letters should not contain a discharge form.Meehan: Departing partners may not use speed and preemptive tactics to violate fair competition rules.Reeves: Lawyers may not deliberately disrupt the existing firm’s business or maliciously interfere with its clients.Fees and Client PropertyUnreasonable FeeABA prohibits clearly excessive fees, i.e., an amount ordinarily prudent lawyers would regard as unreasonable.Hindsight test: The determination is to be made “after a review of the facts.”Unconscionable FeeIn California, unconscionability has two components: Procedural unconscionability is an inequality of bargaining power that deprives the client of a meaningful choice. Substantive unconscionability is an unfair allocation of the risks or costs.Foresight test: Determination made on basis of facts and circumstances existing at agreement formation.Factors to be considered in Fee SettingCRPC rejects ABA’s inclusion of “customary fees” for fee setting, and adds 3 additional considerations—(1) Fee in proportion to services (arguably a hindsight test); (2) Relative sophistication; and (3) Client’s informed consent.CRPC also prohibits illegal fees, i.e., a fee that violates a law, rule of ethics, or public policy. Quantum meruit available.Bushman: 5k retainer for “paper war” without regard to time spent. Disciplined for “shocking the conscience.”Telex: Negotiated $1 million contingent fee with highly sophisticated business. Resulted in windfall. Permissible.Fees for non-legal workBacheller: Missouri/Colorado held lawyers may not bill at legal rates for nonlegal chores, i.e., clerical services.Wright: Maryland held the ethics code requires effective disclosure to the client as part of the terms of the engagement.Exorbitant profits are not unconscionableShaffer [Pandora’s Box]: Salaries and overhead costs are not relevant to determining reasonable attorney’s fees.PlagiarismLane: Lawyer charged 16k for a brief plagiarized from a treatise. He asserts he works inefficiently and “borrowed liberally from other sources.” The court conducted an investigation and he was found guilty of violating ethics rules.Ghost Writing AttorneysA ghost writing attorney authors court documents for a pro se litigant who submits them as his own work. This practice is widely condemned by federal courts as an unethical, deliberate evasion of the responsibilities imposed on attorneys.ABA: Courts do not have to be informed of ghost writers unless the court has a rule requiring such disclosure.CRPC: California takes no position on undisclosed ghostwriting. Generally not necessary unless fees are sought.RetainersA nonrefundable retainer is a fee paid by a client in advance of services.A special retainer is an advance to the attorney against work to be done in the future.Some courts ban nonrefundable special retainers as per se invalid because they chill client’s choice of representation.A security retainer is a security deposit which remains the property of the client.A general retainer is an agreement in which the client agrees to pay a fixed sum to the attorney in exchange for the attorney’s promise to be available to perform, at an agreed price, any legal services that arise during a specific period.Raymark: Asbestos industry offered $1 million on “take it or leave it” basis. Butera accepted. Nonrefundable despite the completion of only 10 weeks of legal services. Quantum meruit inapplicable to general retainers.Fee FormalitiesB&P requires any fee agreement reasonably foreseeably exceeding 1k to be in writing and signed by both parties. A copy should be given to the client with: (1) basis for fees, rates, charges; (2) nature of services; (3) respective responsibilities.If these conditions are not met, the contract is voidable at the option of the client. Quantum meruit available.Oral/no writing OK: (1) Emergency; (2) Same terms as previous arrangement; (3) Waiver; (4) Corporation client.Minimum Fee SchedulesGoldfarb: Minimum fee schedules once imposed on lawyers by state bars are no longer lawful because their anti-competitive nature violates the Sherman Act. Purely advisable fee schedules are permissible without sanctions.Contingency FeesUsually invalid where a recovery is very likely and disproportionately large compared to the services and risk assumed.B&P: Must be in a copied writing, signed by both the client and the lawyer. Must include: (1) fee rate; (2) disbursement and affect on recovery; (3) any other compensation; (4) negotiability; (5) must state if maximum limits apply to rates.CRPC do not directly address the topic of contingent fees. Tort reform: B&P limits contingent fees in malpractice cases.Fineberg: CA Supreme Court described tort reform legislation as an unwaivable “maximum (attorney) fee schedule.”Improper Contingency FeesDomestic Relations Cases: Contingent fees here would encourage the obtaining of divorces and is against public policy.Prosecutors: Contingent fee creates a conflict of interest, gives the appearance of impropriety, and taints the conviction.Defense Counsel: Unethical, but actual prejudice to the client must be shown before a conviction should be reversed.Expert Witnesses: Prohibited to avoid their being tempted to falsify or exaggerate their testimony. Possible fee sharing.CRPC prohibits paying witnesses contingent upon the content of their testimony or the outcome of the case.The Reverse Contingency FeeA reverse contingency fee is not based on what the client has recovered, but rather is based on what the client has saved (the difference between the amount originally demanded and the amount the client is ultimately required to pay.)ABA requirements: (1) Reasonably calculated; (2) Client’s informed consent; (3) Reasonableness of the fee.Termination of the RelationshipRecovery after termination in a contingency fee case depend on exactly who wanted out of the relationship and why—Fracasse: CA upheld right of client to discharge attorney for any or no reason at all. The cause of action to recover QM compensation for services under a contingent fee contract does not accrue until occurrence of the stated contingency.Cases involving discharge for cause generally arise in two ways: (1) The attorney sues for fees and the client defends on the grounds that the discharge was with cause; (2) The attorney is successfully sued by the client for malpractice and the issue is whether the attorney may deduct from the client’s judgment the fee that the attorney would have received.The one clear bright line rule established by case law to date is that if the attorney withdraws because of a good faith belief that the case is meritless, he or she has no claim on any eventual recovery. (Bet hedging—time, effort, & risk.)The Estate of Falco test: whether the cause for withdrawal is sufficiently justifiable so as to permit recovery.If the withdrawal is permissive, not mandatory, counsel’s justification is subject to “heightened scrutiny.”Negotiating the Client’s SettlementDuring settlement negotiations, the attorney must inform the client of any significant or written settlement offer.Falco/ABA: A lawyer shall abide by a client’s decision whether to accept an offer of settlement of a manner.Hagans: A client does not breach a contingent fee agreement merely by refusing to settle, even if refusal is foolish. But a client may be subject to liability if it can be shown the decision was made with intent to take advantage of the attorney.Contingency Fees and Litigation Support ServicesOjeda: In cases where the lawyer represents a minor or incompetent person and recovers funds by way of a judgment or settlement, the court must approve the payment of reasonable costs and fees. E.g., minor’s medical malpractice action.Ramirez: Unlike Ojeda, Ramirez did not involve the B&P statutory limits because the case was not against a health care provider and, thus, did not require that the contingency fee be calculated after the costs.Structured SettlementsThe attorney may receive fees on the same pro rata basis that the client receives compensation. “Cash out” contract OK.Fee splitting—Lawyers in the firm may divide its income with its members by contractual agreement. Lawyers not in the firm require the client’s written, informed consent and divisions must be divided in proportion to the services rendered.Fee-Splitting AgreementMink: A fee-splitting agreement does not require the client’s written consent prior to the time the lawyers enter into the arrangement, or at any other time than prior to the actual division of fees. Also, CRPC does not require the agreement between the lawyers to be in writing. Even if unenforceable, the lawyer may nevertheless recover in quantum meruit.Chambers: CRPC 2-200 applies to all divisions of fees, not just pure referral situations.Security InterestABA prohibits the acquisition of any proprietary interest in the cause of action or subject matter of litigation, except for a lien to secure the fee or expenses, and a reasonable contingent fee. While there is no express prohibition in California against acquiring an interest in the subject matter of the litigation, case law suggests that it is unethical to do so.Hawk held that an attorney who negotiates a security interest in the client’s property has acquired an interest adverse to the client and there must comply with CRPC 3-300: (1) terms written in plain English; (2) fair and reasonable; (3) advised to seek independent counsel; (4) consented in writing after opportunity to seek counsel.Charging Liens and Retaining LiensA charging lien, also known as a specific or a nonpossessory lien, is an equitable security interest for the lawyer in the proceeds of the prospective recovery (settlement or judgment) by the client. Must be express. Has priority over liens.A retaining lien, also called a general or a possessory lien, applies to papers and property coming into the hands of the attorney as an attorney for the client. CRPC 3-700(D) precludes a retaining lien in California because all of the client’s papers and property must be returned by the attorney at client’s request “whether the client has paid for them or not.”Duty to Safeguard PropertyPrompt refund of any fees not earned. Preserve records for at least five years. No comingling attorney and client funds.The Attorney-Client RelationshipClient: A person or entity who consults a lawyer for the purpose of legal advice or services in his professional capacity.Formation: (1) Court appointment; (2) Mutual agreement; (3) Implied assent/promissory estoppel (induced reliance).Implied assent test: (1) Confidential info was provided to the lawyer; and (2) The prospective client did so with the reasonable belief that the lawyer was acting as his or her attorney. Lawyer always bound to protect these confidences.Togstad: Prospective client sued attorney refused representation for NOT disclosing the statute of limitations.Meighan: A simple refusal to undertake representation, without any other facts, is not malpractice. Here, the legal privity and adverse interest to the husband raised a duty to disclose info to both for informed decisions.The Beauty ContestBecause of the dangers of the Beauty Content, where a prospective client interviews a number of law firms and provides each with confidential information, lawyers are advised to take the following precautions: (1) limit the nature of the initial interview in order to avoid hearing confidential info; (2) ask the client to sign a conflicts waiver stating that any disclosed info will not bind the attorney from representing adverse interests and is not entitled to confidential status.Bridge: The lawyer bears the burden of clarifying whether information imparted will be held in confidence.Conflicts WaiverThe letter should state the applicable statute of limitations, and that the case is being declined and advice was given to consult another attorney, no opinion has been given on the merits, and no confidential information has been received.Nonadjudicative Proceedings: The Lawyer as AdvocateBaron: Attorney must obey ethics rules even though they do not apply to nonlawyers who appear in a similar capacity.An attorney may not (1) make false statements of fact or law; (2) fail to correct previous false statements; (3) fail to disclose relevant adverse authority; or (4) offer false evidence. Additional mandates include avoiding impropriety.Preventive Law: Advisor to the clientProfessor Brown suggests focusing on nonadversarial aspects of law to assist the client in avoiding legal problems.ABA suggests the lawyer volunteer candid/cautionary advice, e.g., moral, economic, social, and political factors.Child Abduction HypoWhile it would clearly be unethical to advise the child’s mother to break the law, no rule in the CRPC expressly prohibits the delivery of (extradition) information. However, the lawyer who knows the client will use the information for illegal or fraudulent purposes may not give the client the information, unless for the purpose of dissuading improper conduct.Note: A lawyer cannot escape responsibility by avoiding inquiry; actual knowledge inferred from circumstances.Benjamin: There has been massive consumer fraud by companies each decade. Duty to inquire and “see facts.”The Client’s Intended Crime or FraudProfessor Freedman: Lawyers should be forbidden to give legal advice when to do so would significantly increase the likelihood of criminal conduct apt to result in death or serious injury to the person (misquoted later as “used to harm.”)Note: Criminal law requires more than the delivery of info for culpability for assisting in commission of crime.Deceptive Tactics: The Lawyer as NegotiatorGay rights organization contracted with Manger Hotel to use its facilities. National management demanded cancellation resulting in breach of contract. Freedman, aware that the Park Sheraton Hotel had agreed to be the location, responded that there was “nothing definite yet” in order to increase the organization’s compensation during negotiations.Prof says “nothing definite yet” shifts the obligation to opposing counsel to clarify ambiguous statement.Deceptive tactics that are not usually considered to be lies are not ethically improper—Puffing: Does not expect you to believe the literal meaning of the statement (e.g., “this is a priceless heirloom.”)Bluffing: Bargaining strategies (e.g., “this is nonnegotiable”) that negotiators know are not intended to be relied on.Exaggeration: A negotiator inflates the value of what she is trading and depreciates the value of what she is receiving.Omission by Nondisclosure: The negotiator fails to reveal certain relevant facts. A line is drawn at material facts.Omission by Silence: The attorney passively takes advantage of opposing counsel’s error.Clients with Diminished CapacityIn the advocacy role, the attorney seeks to secure full legal rights for the client, even if not in the client’s best interests.In the paternalism role, the attorney decides what’s best for the client and acts accordingly, despite the client’s wishes.ABA encourages lawyers to maintain as normal a relationship as possible, including preserving confidences.Cali PC 1368 counsel’s consent required to enter guilty plea to capital offense if judge doubts client competence.Tort Liability to Non-ClientsAttorneys owe a duty to (1) prospective clients; (2) intended beneficiaries; and (3) persons foreseeably receiving info.Lucas v. Hamm Six Factor Test—(1) Intent; (2) Forseeability; (3) Injury; (4) Connection to conduct; (5) Policy; (6) Burden.Standard: An attorney must use only such skill, prudence, and diligence as lawyers of ordinary skill and capacity exercise.“Wife #2”: The predominant inquiry is whether the principal purpose was to provide legal services for plaintiff’s benefit.No duty owed to a beneficiary to expedite changes or ascertain the decedent’s testamentary capacity or intent.No duty owed to doubtful or non-intended beneficiaries, parties who deal at arm’s length, or adverse parties.Reliance on Information Supplied by CounselGoodman: An attorney owes a duty of care to a third party in providing the advice to the client if reliance by the third party upon the advice is the end and aim of the transaction. Mere foreseeability is not sufficient to impose a duty.Note: Duty recognized where the lawyer’s work or advice is not confidential to client, but intended to be shared.Negligent MisrepresentationA subset of tort deceit, negligent misrepresentation occurs when a person makes false statements having no reasonable basis even though he may honestly believe them. The auditor’s duty runs only to those whom the misrepresentations were made, not to anyone else who might see and rely upon the opinion. Cardozo: A thoughtless slip or blunder may expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class.Liability to Third Parties for Intentional TortsAn attorney may be liable for fraud b/c a duty is always owed to others to refrain from intentionally tortious conduct.The elements of fraud are a false representation, made with knowledge of the falsity and an intent to deceive, that induces reliance and causes damage. Active concealment is the equivalent of a false representation and is also fraud.Toxic stock case: Attorney cannot conceal material facts in a sanitized document, even in business deal at arm’s length.Takeaway: Vega may sue opposing counsel because he is suing for active concealment instead of negligence.If he were suing for negligence, his own attorney would be culpable for not asking proper follow-up questions.Malicious ProsecutionCA Supreme Court defines malicious prosecution as “commencing, bringing, or initiating an action without probable cause.” In Zamos, this definition was extended to attorneys that “commence a lawsuit properly, but then continue to prosecute it after learning” the action is totally and completely without merit (under a reasonable attorney standard).Identifying the ClientThe law recognizes two types of fiduciary relationships—(1) Imposed by law; (2) Private voluntary agreement.No Duty owed to AdversariesAn attorney has no legal duty of disclosure to a third party who is the adverse party in an adversary proceeding.Lamare: Father lost custody in divorce action. Lawyer knew husband would abscond with kids. No duty to mother.Tushinsky: Here, primary duty to wife. She owes a duty to the child; the lawyer does not owe a duty to the child.Dicta: Lawyer has mandatory duty to report and immunity from civil suit for the act of reporting suspected abuse.Note: 22 states require reporting. PC 11166 does not identify lawyers under the mandated reporting law.Trustee and BeneficiaryMorales: When an attorney undertakes a relationship as adviser to a trustee, the attorney may be held liable to the beneficiary of the trust when he intentionally interferes/actively participates in a breach of trust. / Pierce: An attorney may be liable to a trust beneficiary if the attorney acted in furtherance of his own financial gain or committed fraud by making misrepresentations to the beneficiary. / Mere knowledge wrongdoing by a trustee, or the simple rendering of legal advice to them, does not make the attorney liable to the beneficiary. / Negligence is based on conflict of interest.There are three views regarding the obligation of a lawyer representing the fiduciary as client:(1) No duty to beneficiaries; (2) Duty to beneficiaries that may override duty to fiduciary; (3) Trust or estate as an entity.ABA and California follow the first approach. But ABA imposes duty for guardians acting adversely to ward.Goldberg: CA court held attorney for the estate administrator represents the administrator, not the estate.Duty of LoyaltyAttorneys owe clients a duty of loyalty which requires the avoidance of conflicts of interest. In general, this duty prohibits an attorney from suing one current client on behalf of another client. However, an attorney may sue a former client on behalf of a current client provided the attorney will not be using confidences obtained from the former client.Entity TheoryUnder the entity theory, a lawyer does not represent the individual shareholders or officers of a corporation by virtue of representing the corporation itself. (However a relationship may still arise based on the parties’ conduct or agreement.)Meehan: As attorneys for the corporation, counsel’s first duty is to it. Likewise, as an officer of the corporation, it was Hopp’s duty to disclose to it all information necessary for its purpose. No immunity for these nonprivileged disclosures.Note: Dual representation not always precluded; constituent representation may arise by conduct/agreement.If adverse, ABA & CRPC require entity lawyer to explain that constituents are not being personally represented.Proxy FightGoldstein: Directors of a corporation owe a fiduciary duty to the corporation/stockholders and must act for the common benefit. A corporation’s former counsel possessing confidential information cannot use that information solely for the benefit of one director by representing him in a proxy fight, i.e., lawyer cannot monopolize confidences that the other directors are entitled to. Furthermore, attorney may not recover for services rendered in contradiction of these rules.Note: Directors are entitled to corporate confidences whereas one holding a simple shareholder status is not.Closely Held CorporationsWoods: Dispute between owners of a family corporation. A corporation’s legal adviser must refrain from taking part in controversies among shareholders as to its control, and when opinion is sought he must give it without bias/prejudice.Furthermore, ABA & CRPC say lawyer should not be placed in situation where he may be forced to testify against client.Forrest: CA forbids dual representation of a corporation and its directors in a shareholder derivative suit such as fraud, but lawyer who formerly represented both may continue to represent directors. Corporation should find new counsel.Close InteractionWhile clear that not every interaction with a shareholder in a close corporation leads to a lawyer-client relationship, where the corporation exists to serve personal interests of the shareholders, relationship exists with “close interaction.”Close interaction factors: (1) type/size; (2) nature/scope of engagement; (3) kind/extent of contacts; (4) info.Nonclient ShareholdersPelham: Courts should be reluctant to infer persons to be third-party beneficiaries of an attorney-client contract when they have adverse interests to the person or entity to whom the attorney already has a fiduciary obligation. The fact that a lawyer could have foreseen adverse consequences of his advice is not sufficient to fix liability on him from a nonclient.Skarbrevik: Directors’ stock dilution plan involved amending corporate articles of incorporation to eliminate ex-director’s preemptive rights provision. Since Skarbrevik resigned, the lawyer owed no duty to him as arm’s length/adverse party. (Plaintiff did not have any close interaction with the directors’ attorney during the time period services were rendered.)Note: The directors did have a fiduciary duty to him so they ended up purchasing his stock in a settlement.Partnership PartnersResponsible Citizens: Representation of a partnership does not automatically create an attorney-client relationship with individual partners. In determining existence of relationship, totality of the circumstances must imply an agreement.Representing the GovernmentPublic defenders represent the accused while prosecutors represent the agency that employed them (which is public interest). The Attorney General has a dual role as representative of a state agency and guardian of the public interest.The Attorney-Client PrivilegeThe privilege is not constitutionally based; it is a statutory provision subject to the will and control of the legislature. Nevertheless, the privilege is intertwined with Fourth, Fifth, and Sixth Amendment constitutional guarantees. The privilege protects confidential communications made for the purpose of securing counsel, legal services, or legal advice.Policy: (1) Open communication; (2) Fully informed legal advice; (3) Protection from oppressive government.California Lawyer-Client PrivilegeEvidence presumption that communication made in confidence in the course of a lawyer-client relationship is protected by privilege. Burden of proof on person claiming privilege does not exist to prove communication was not confidential.Note: CA Supreme Court has permitted the legislature to exercise exclusive authority concerning privileges.Elements of the PrivilegeA lawyer includes any person reasonably believed by the client to be authorized to practice law. The client includes entities and authorized representatives. Communications between the client’s lawyers are also privileged. A confidential communication may not be disclosed to third parties unless present to further client’s interest or reasonably necessary.There is no accountant-taxpayer privilege unless the client’s lawyer hires an accountant as his assistant/representative.Public Relations FirmsThere is no privilege involving a public relations firm. However, if the client’s lawyer hires a public relations firm, then under certain circumstances communications between the client and the public relations firm are privileged. The caveat is the public relations firm must have been hired by the lawyer to provide legal advice or legal services for his client.Haugh: New York says a media campaign is not a litigation strategy—but the trend is to recognize privilege.Prospective Client QuestionnairesVodak: Questionnaires filled out by arrested protestors presently seeking legal advice or representation are protected.Schiller: The belief that one is seeking legal advice or representation must be reasonable at the time they fill out forms.Online QuestionnairesBarton: The purpose of a Paxil questionnaire was to gather information about potential class members. A disclaimer established that the communications were not confidential and did not constitute a request for legal advice. However, the questionnaire was designed to solicit obtaining legal service (i.e., class action) making communications privileged.Note: CA statute includes clients who consult for (1) retaining the lawyer; (2) securing legal service; or (3) advice.Conditional Privilege for Factual InvestigationsUpjohn: The “control group” test limits the privilege to people who control the entity. Upjohn privilege extends the privilege to any entity employee’s communications to an entity attorney at the direction of an entity officer for advice.Cornell: Communications must be made in confidence for the purpose of obtaining legal advice from the lawyer.Chadbourne: The employer’s dominant purpose for requesting the documents/communications is controlling.Rowe: Doctor analogy—communications between lawyers in a firm conducting an investigation are privileged.Identifying the holder of an entity’s attorney-client privilegeCorporations enjoy attorney-client privilege in California. The privilege is controlled by its holder (i.e., the client or his agent.) The attorney is not the holder, but must claim privilege on holder’s behalf. Only holders can waive the privilege.Owner-Shareholder disputesHoiles: The closely-held corporation/directors, not the minority shareholders, hold the corporation’s privilege.Smith: The condominium association/directors, not the individual unit owners, hold the association’s privilege.NFL: A director may obtain confidential communications but as a fiduciary cannot use against common benefit.Owner-Successor disputesCFTC: A successor trustee becomes the holder of the privilege of the corporate debtor and waives unilaterally.Miller: An individual debtor’s attorney-client privilege does not succeed to an adversarial (bankruptcy) trustee.Anticipatory Communications for InsuranceReports filed with, or communications to, an insurer before any litigation has commenced that relate to a possible claim against the insured are protected under the attorney-client privilege if the insurance policy requires that the insured be defended, and if dominant purpose for transmittal was for evaluation by insurance counsel to defend insured.Travelers: For insured-insurer communications, (1) There is no privilege as to any communication prior to the alleged negligent act of the attorney; (2) There is an absolute privilege as to any communication after the services of the attorney terminate; (3) A fact issue of privilege exists regarding communications during the time after the negligent act causes the client harm and before attorney’s representation ends. Here, privilege exists under dominant purpose test.Ex Parte Contact with Represented Adverse Parties/WitnessesAnti-contact rule: If you know a person is represented by counsel in a particular matter, you cannot contact him without his attorney’s consent, e.g., improper to obtain signature. Policy: Effective representation. Sanctions: $, exclusion of info.Dale: Lawyer interviewed arsonist (after conviction, before appeal) to discover building’s owner’s negligence for tenants’ separate action. Arsonist’s attorney objected to ex parte contact due to potential admissions. Arsonist not a PARTY to action. No violation of no contact rule. But lawyer’s legal advice was a violation of fiduciary duty.Former Entity EmployeesThe anti-contact rule applies to entities. CA maintains control group concept for purpose of contacting entity employees. The 2 distinctions based on employment (former or current) and status (control group or not) yield 4 factual situations.Former non-control group employee: Contact OK—not sufficiently identified with corporation or its counsel.Former member of control group: Contact OK—entities can seek a protective order against former employees.Current control group: Contact NOTOK—ex parte contact with anyone who remains on board is prohibited.Current non-control group: Contact OK—employee cannot be officer, director, or manager (e.g., supervisors ok.)Actual Knowledge of RepresentationThe attorney may have an ex parte exchange with a represented person if the attorney does not know that the person is being represented in the relevant matter. Constructive/presumptive knowledge (e.g., knowledge that an entity employs in-house counsel) is insufficient to bring the ex parte contact prohibition into play. The other party should send a letter.Note: CRPC states the anti-contact rule is generally inapplicable in all contacts with government personnel.Contact with Unrepresented PersonsThe lawyer must avoid stating/implying he is disinterested, or that he will protect interests of the unrepresented person. If unrepresented interests are adverse, the lawyer must refrain from providing legal advice other than to obtain ernment Investigations Exception to Deceiving Third PartiesIn general, an attorney may not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. The category of conduct proscribed by the rule does not include misrepresentations made in the course of official conduct as an employee of an agency of the United States if the attorney reasonably believes that the conduct is authorized by law.Police Agents Exception to Deceiving Third PartiesAthan: Letterhead contained names of the detectives, but they listed themselves as attorneys. Held to ethical standards. DNA extracted from Athan’s saliva on the envelope. Saliva is not a confidential communication. Policy allows violation of criminal law and deceitful conduct by police officers to detect or eliminate criminal activity. Police may act as attorneys.Friedman: Good motive can never constitute a defense to deception in court; no encouraging lying under oath.Testers Exception to Deceiving Third PartiesThe only way to make a case of discrimination is through the use of testers, e.g., racial minorities acting as home buyers. A lawyer does not violate ethics rules by advising and facilitating the deceptions of the testers, clients, or investigators.Note: The lawyer must believe in good faith there is a reasonable possibility that unlawful activity is taking place.Prosecutors and Ex Parte ContactsA prosecutor is “authorized by law” to employ investigative techniques in criminal cases, including the use of informants. CRPC: The duty to avoid ex parte contacts does not apply to pre-indictment, noncustodial conversations with a suspect, including the use of fake court papers (subpoenas) with a represented party/suspect to induce incriminating statements.Lyons: 6th Amendment limitations; prosecutor may not lie to negotiate a plea deal without his attorney present.Tarlow’s Policy against Representing Clients in Plea BargainsThe ABA permits an attorney to withdraw from representation if the client “insists upon pursuing an objective that the lawyer considers repugnant or imprudent.” No comparable provision appears in CRPC; defendant has control over pleas.Privilege Limitations for Government LawyersGovernmental attorney-client privilege exists when private litigants in civil suits seek discovery of communications between government lawyers and their government-entity clients, but does not extend to criminal investigations. Thus, an official who wishes to speak in confidence about a criminal matter must consult a private, not government, attorney.State-state criminal cases: As long as federal interests not involved, each state may decide scope of privilege.Federal-federal criminal cases: A federal government entity cannot maintain the attorney-client privilege to withhold information relating to a federal criminal offense. The lawyer has a duty to report to Attorney General.Federal-state criminal cases: Prevailing rule—Unlike private attorneys whose sole obligation is to the client, government lawyers have a competing duty to act in the public interest. Therefore, when another government lawyer requires information for a criminal investigation, the client’s lawyer is obligated to ensure compliance with the law. Minority rule—2nd circuit applies governmental privilege to criminal matters as it does to civil.Non-confidential CommunicationsIf a third party does not establish an attorney-client relationship, there are no confidential communications to protect. Likewise, once the attorney refuses to represent a prospective client, and explained other counsel should be sought, there is no basis to form a reasonable belief that an attorney-client relationship exists, and thus there is no privilege.Attorneys as Conduits or MessengersA lawyer conveying information from government to the client (e.g., hearing date) is not a confidential communication.The Eavesdropper RuleIf the client chooses to communicate in the presence of a third person who is not an authorized representative of the lawyer or the client, the communication is not confidential. Public places include areas of the courthouse, and clients are obligated to keep their communications discreet by whispering in the presence of court reporters, bailiffs, viewers, etc.Note: CA Evid Code protects electronically transmitted messages as privileged. Improper interception is criminal.Underlying Facts are not CommunicationsUnprotected facts: (1) client consulted attorney, (2) client identity; (3) date and number of visits; (4) fee arrangements.Protected facts: (1) motive for representation; (2) litigation strategy; (3) specific nature of services; (4) last link doctrine.The last link doctrine is an exception for client identity that permits nondisclosure where revealing their identity would be the last link to (a) implicate the client in unlawful activities; or (b) reveal confidential communications.Hooser: Even if neither rationale permits nondisclosure, identity may be protected by CA const. right of privacy.Coaching ClientsMen tend to speak in definitives. Women tend to speak with qualifiers. The latter is less powerful and requires coaching. Coaching is a proper subject of impeachment in cross-examination and does not violate the attorney-client privilege. Lawyers should not be permitted to coach their clients about how to take psychological tests; yet still available online.Privilege against Self-IncriminationIn order to receive 5th Amendment protection of the privilege against self-incrimination, the information sought must be (1) incriminating; (2) personal to defendant; (3) obtained by compulsion; and (4) testimonial/communicative nature.Policy: Protects suspects from cruel trilemma of self-accusation, perjury, or contempt. Fair treatment; no abuse.Personal vs. Business RecordsFisher: Contents of subpoenaed business records are not privileged because they are prepared by nonlegal third parties.Fisher did not decide whether 5th Amendment protects an individual’s tax records in his own possession. Doe says yes.Note: Government could have obtained the production of individual records by offering immunity or seizure by warrant.The Collective Entity DoctrineThe collective entity doctrine states that a representative of an entity may not claim a personal 5th Amendment privilege as a justification for refusing to produce entity records, even if the documents are incriminating. Furthermore, a person who is a sole officer/shareholder may not decline to produce corporate records. However, if a custodian produces the records in a representative capacity, the individual’s act of production cannot be used against him.Jx split: Courts have differed on whether private papers should be entitled to 5th Amendment protection.Physical EvidenceGovernment search warrants of lawyer offices are thereby permissible where the search warrant is valid, the search is reasonable, and the attorney-client privilege does not cover the requested property.Meredith (CA): Attorney Schenk requested Investigator Frick retrieve the victim’s wallet from trash can behind Scott’s house. Whenever defense counsel removes or alters evidence, the statutory privilege does not bar revelation of the original location or condition of the evidence. However, if defense counsel leaves the evidence where he discovers it, his observations derived from privileged communications are insulated from revelation. It is therefore a tactical choice.ABA states that applicable state or federal law may permit retention of physical evidence for the limited purpose of conducting an examination that will not alter or damage it before turning it over to the police or prosecutor.Fairbank: Defense counsel’s legal obligations should be self-executing; no prosecution motions or court orders.Goldsmith: Defendant cannot be compelled by subpoena to produce weapon in violation of 5th Amendment privilege.Wemark: Nondisclosure IS NOT the same as concealment or an interference with a police investigation, a misdemeanor.Buried Bodies: The NY court held the duty under the attorney-client privilege trumped the Public Health Law violations.Exceptions to the PrivilegeThe previous chapter addressed situations falling outside the attorney-client privilege (e.g., records, physical evidence).This chapter focuses on limited exceptions to reveal information that falls within the privilege (e.g., breach, fraud, harm).Self-Defense ExceptionABA permits a lawyer to reveal confidential information (1) to establish a claim or defense in a controversy with the client; (2) to establish a defense to either a criminal charge or a civil claim “based upon conduct in which the client was involved”; or (3) to respond to allegations in any proceeding concerning the lawyer’s representation of the client.Breach of Duty by ClientWhile the exception cannot be used as extortion, clients may be told that if the matter goes to court, some confidences might be waived. Unnecessarily broad disclosures subject attorneys to professional discipline or litigation sanctions.Breach of Duty by LawyerThis California exception applies only when either the client or the attorney charges the other with a breach of duty. Disclosure must be necessary to protect the attorney’s own rights, such as when the attorney’s integrity, good faith, or performance of duties is questioned by the client who has filed disciplinary charges, or claimed malpractice, or claimed ineffective assistance of counsel. ABA exception to the duty applies to cases brought against an attorney by 3rd parties.Solin: Clients’ attorney-client privilege trumps attorney’s right to sue his legal counsel for malpractice. But -->Spratley: Insurers’ generic summaries/statistics may be disclosed from photocopies (return original) client files.The Crime-Fraud ExceptionCA Evid Code exception: No privilege under this article if the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit a crime or a fraud. Absent a continuing cover-up, limited to before completion.The exception focuses on client’s intent, not the lawyer’s intent or knowledge. Narrow, e.g., bad faith not fraud.Procedures to Evaluate Application of the Crime-Fraud ExceptionZolin case (SCOTUS procedures): (1) Party alleging exception must show factual basis adequate to support a good faith belief by a reasonable person that an in camera review will establish exception; (2) The court exercises its discretion.Cases of Outright Disclosure: Both parties have a right to present evidence (by a preponderance) to the court.Death or Substantial Bodily Harm ExceptionClark: The crime-fraud exception did not apply to a client’s threat to his lawyer to inflict physical harm on a third party.Legislative amendment: No evidentiary privilege if lawyer reasonably believes that disclosure is necessary to prevent a criminal act that the lawyer reasonably believes is likely to result in death of, or substantial bodily harm to, an individual.Dang: California attorney may report threat (kill witness) to authorities and testify against former client in a trial.The Shared Information ExceptionAC privilege applies despite disclosure to third parties (1) when single attorney has joint clients; and (2) when several attorneys conduct a joint defense of clients who share a common interest. Extends to criminal/civil & potential litigants.Adversarial joint clients results in a mutual waiver of privilege; not limited to info said in each other’s presence.Joint Clients in Insurance CasesGlacier: When an insurer employs counsel to defend its insured, any communication with the lawyer concerning the handling of the claim against the (primary) insured is a matter of common interest to both the insured and the insurer.Aetna: Consultations made prior to the insurance company helping to defend the insured are still protected.Joint Defense, Common Interest, or Pooled InformationCommon Interest Doctrine: If clients with a common interest (e.g., legal, factual, strategic) are represented by separate lawyers and they agree to exchange information concerning the same matter, communications by clients are privileged.No Statutory Authority: CA applies the common interest doctrine using a waiver analysis, i.e., necessary parties.The Testamentary ExceptionsThis exception is intended to allow the deceased client’s lawyer to effectuate his true intent, especially in heir disputes. Thus, it does not apply when parties argue they’re entitled to share in estate because the decedent breached a contract.Fletcher: Refers to communications between decedent and his attorney only--not the claimant and his attorney.The Fiduciary Exception (Common Law)Mett: ERISA plan trustee guilty of embezzling from pension plan. An employer acting in the capacity of ERISA fiduciary is disabled from asserting privilege against plan beneficiaries on matters of plan administration. Trustee is not “real client.”Wells Fargo: Unlike federal decisions, CA cannot restrict statutory privilege. The attorney represents only the trustee.Dissent: The prevailing rule is the trustee’s duty to report complete and accurate information trumps privilege.The Derivative Suit Exception (Common Law)Garner: Federal court decided that where fiduciary obligations exist, beneficiaries may have access to confidential info.Dickerson: In California, a lawyer is always required to declare privilege, even if the holder (ADZ Inc.) no longer exists.CA rejects a shareholder exception to the privilege, even in a derivative action, and closely held corporations.Waiver of the PrivilegeExpress waiver: Privilege is waived if the holder consents (by words, writing, or conduct) to disclosure made by anyone.Implied waiver: (1) Attorney authority for settlement, plea bargain, or advantage; (2) Silence/failure to claim privilege;(3) Claim assertion, e.g., ineffective/negligent counsel; (4) Advice of counsel defense. Closely tailored to scope of issue.Selective waiver: No waiver when disclosure to selected 3rd party is reasonably necessary for furthering representation.Note: Waiver may still occur when an attorney shows documents to a fact or expert witness to assist testimony.Partial waiver: Portion disclosed but may assert the privilege as to the remaining portions of the same communications.Note: Under the fairness doctrine, disclosure of one portion entitles an adversary to discovery of its remainder.However, there is no legal prejudice that warrants waiver when a disclosure is extrajudicial (e.g., Bulow’s book).Termination of the PrivilegeSwidler: Foster’s attorney-client privilege survived his death. No balancing test; applies in both civil/crim federal cases.Five approaches: (1) the privilege passes to the client’s heirs; (2) in CALIFORNIA the privilege ceases to exist when the client’s estate is finally distributed and his personal representative is discharged; (3) the privilege ceases upon the death of the original holder; (4) the privilege is absolute; (5) the absolute privilege is balanced against the interests of justice.Wrongful ConvictionsABA Remedy: Prosecutors must promptly disclose new credible, material evidence that convicted defendant is innocent.The Work Product DoctrineThe attorney-client privilege applies to confidential communications within the scope of the attorney-client relationship. The work product doctrine shields materials prepared in anticipation of litigation by a lawyer, a party, or representative. The holder of the privilege is the attorney, but under certain circumstances, clients may have access to that information.E.g., The CA ethics rules demand disclosure when releasing all “client papers and property,” trumping civil code.Federal Work Product DoctrineHickman: Not all written materials obtained or prepared by an adversary’s counsel with an eye toward litigation are free from discovery. Where relevant and non-privileged facts remain hidden in an attorney’s file, discovery may properly be had. And production may be justified where the witnesses are no longer available or can only be reached with difficulty.Policy: Discovery not intended to enable a professional to perform his functions without wits/from adversary.FRCP 26 Exception: Substantial need for materials and cannot obtain their equivalent without undue hardship.However, “pure” work product is given near absolute protection from discovery w/o extraordinary justification.California Work Product DoctrineSome states hold that documents in an insurer’s file do not have to have been prepared by an attorney. In California, a document must have been generated at the request of an attorney in preparation for civil or criminal litigation. There is no privilege where a document is generated with knowledge that it will later be revealed (e.g., to federal authorities.) The doctrine extends beyond the termination of litigation for which the documents were prepared (e.g., settlements.)CCCP 2018 Exceptions: Work product not discoverable “under any circumstances” unless (1) court determines that denial of discovery will unfairly prejudice the party seeking discovery OR result in an injustice; (2) when a lawyer is suspected of knowingly perpetuating a crime/fraud; (3) disciplinary proceedings; (4) breach of duty.What is Attorney Work Product?The work product privilege protects an attorney’s research, legal theories, interoffice memos, communications between a client’s attorneys, and communications between an attorney and a witness. Must be acting in representative capacity.Note: In-house exhibits and surveillance films are also protected unless they are to be introduced into evidence.Taking Opposing Counsel DepositionDepositions of opposing counsel are presumptively improper. An attorney must show “extremely good cause.” California uses the 3 prong Spectra-Physics test: (1) are there other means? (2) is it crucial? (3) is the information privileged/WPD? The party seeking to take the deposition has the burden of proof to establish the predicate circumstances for the first two prongs, and the party opposing the deposition (who is asserting the privilege) has the burden to establish the third.Access to Lay WitnessesDiscovery is permitted of the names of all percipient witnesses (i.e., those with knowledge of relevant facts) but NOT permitted for a list of which percipient witnesses will be called at trial or of witnesses interviewed by opposing counsel.Access to Testifying Expert WitnessesDiscovery is permitted of the names of all expert witnesses who are expected to testify at the trial. All exhibits to be used by the expert must also be disclosed. However, preliminary drafts and attorney work product are still protected.Note: Red Rover expert witness inquiry restricted, unless original party places the prior engagement in issue.Non-Testifying Experts (Consultants)Party cannot discover facts/opinions held by a non-testifying expert absent exceptional circumstances (no other means).Petterson: Deposition of consultant is permitted when the tested/examined object is unavailable or irreversibly altered.Williamson: Big Four agreed to silence its expert regarding Firestone’s defective tire in exchange for its indemnification. Since Big Four’s withdrawal directly flows from the illegal agreement to repress evidence, the expert’s report disclosed.Dissent: The underlying evidence was still accessible, not illegally repressed; no prejudice or injustice to plaintiff.Designation does not waive PrivilegeShooker: The designation of a party as an expert trial witness is not in itself an implied waiver of the party’s attorney-client privilege. If the designation is withdrawn before it is known with reasonable certainty that the party will actually testify, or before the party discloses a significant part of the privileged communication (opinion), the privilege is secure.Red Rover ConsultantsHernandez: A party may, for tactical reasons, withdraw a previously designated expert witness, not yet deposed. If that expert continues his relationship with the party as a consultant, the opposing party is barred from communicating with the expert and from retaining him as the opposing party’s expert. Anyone tainted from ex parte contact is disqualified.Non-Retained Experts or Consultants (Protecting Confidences after Beauty Contests)Wang: Many cases raise a factual question as to whether the earlier retention and passage of confidential information occurred. In these cases, a two-step inquiry is necessary: (1) is it objectively reasonable for first party who claims to have retained the consultant to conclude that a confidential relationship existed?; (2) was any confidential info disclosed?Note: Lawyers should have potential experts sign confidentially agreements before interviewing them.Imputed DisqualificationCA uses a three-step analysis in dealing with the issue of disqualification: (1) did counsel communicate confidential info to the expert?; (2) did the expert share this confidential info with opposing counsel?; (3) should it be imputed to firm?Shadow Traffic: Second prong is a rebuttable presumption—i.e., opposing counsel must prove no info shared.Note: When an expert goes to other side, and is no longer available to original side, the burden of proof shifts.Adequate ScreenScreens are procedures and policies that insulate adverse attorneys from other law firm members. Screens may take the form of (1) ban instructions; (2) prohibited access to case; (3) locked files; (4) secret codes; (5) prohibited sharing of fees. Proper implementation avoids imputed disqualification only respecting new attorneys who otherwise disqualify a firm.Smegal: Imputed disqualification should not apply to lawyers when they act as experts (no fiduciary obligation).Exceptions to the Work Product DoctrineUnder federal law, there is a crime-fraud exception to the work product doctrine. In California, there is NOT. However, the doctrine already contains an exception that permits discovery of materials where the failure to disclose them would create an injustice. As a result, a crime-fraud exception may get redefined in terms of preventing prejudice and injustice.Waiving the Work Product DoctrineMaterial protected by the work product doctrine is discoverable: (1) where a party intends to call its lawyer as an expert witness; (2) when a party raises an “advice of counsel” defense; (3) where the lawyer’s conduct is at issue; (4) when a lawyer’s activities are instrumental to proving a significant matter in dispute; (5) when the work product is need to prove the claim, such as an insurer’s bad faith refusal to settle, or in an action for malicious prosecution to prove the malice.Note: Waiver may also occur by disclosure to third parties, but not in-house discrimination investigations.Acquisition of Adversary’s Confidential InformationABA 1.6(c): A lawyer must make reasonable efforts to prevent inadvertent disclosure of information relating to client.ABA 4.4(b): A lawyer must notify opposing counsel but may read/use inadvertently transmitted privileged information.ABA 4.4(a): Lawyers must respect rights of third persons by not using methods of obtaining evidence that violate them.The court may (1) exclude info; (2) disqualify lawyer; (3) discipline for improper revealing/acquiring; (4) ethical sanctions.Any other obligation, such as refraining from reading the material and/or returning it are a matter of state evidence law.Mitsubishi: Johnson unethically examined the document while Yukevich was in the bathroom. In California, when an attorney receives materials that obviously appear to be subject to a privilege, and where it is reasonably apparent that materials were provided through inadvertence, the lawyer receiving them must (1) refrain from examining them any more closely than is necessary to ascertain if the materials are privileged; (2) immediately notify the sender of receipt.The Ethical Obligation of ConfidentialityThe duty of confidentiality is much broader than the evidentiary rules governing attorney-client privilege, which only applies in court proceedings. The duty applies at all times and relates to all info an attorney knows about the client.Sources of AuthorityABA: Lawyer shall not reveal info relating to representation unless permitted, impliedly authorized, or informed consent.B&P: An attorney must maintain confidence, and at every peril to himself preserve his client’s secrets. CA State Bar says “secrets” include info gained through professional relationship and from non-client sources that are known to others.Note: This rule does not prohibit uses that do not disadvantage the client; personal profit is likely disadvantage.ABA Authorized DisclosureABA: Disclosure permitted (not required) where the lawyer reasonably believes it necessary to prevent reasonably certain death or substantial bodily harm. The threat does not have to be imminent, caused by the client, or a crime.Purcell: Lawyer may disclose client’s intention to commit a crime; does not necessarily waive attorney-client privilege. The crime-fraud exception applies to the AC privilege only if communication seeks assistance/furtherance of the crime.Grand Jury Investigation: A lawyer who receives physical evidence (letter) from 3rd party must comply with a subpoena.California Authorized DisclosureThe primary responsibility of the attorneys is to their client, not to third parties. If they conclude that there is a risk to themselves or third parties if their advice is not followed, the lawyers should withdraw after taking reasonable steps to avoid foreseeable prejudice to the rights of the client. The CA Supreme Court says any exception must be by legislature.In response, the legislature created B&P 6068(e)(2): Disclosure permitted (not required) where the lawyer reasonably believes it necessary to prevent A CRIMINAL ACT that is reasonably likely to result in death or substantially bodily harm. In response, the CA Supreme Court approved CRPC Rule 3-100, the CA State Bar’s death or bodily harm exception, with the following factors to consider: (1) persuade not to engage; (2) persuade to prevent; (3) discuss potential revelation.Note: If the attorney decides to disclose, the scope is limited to information necessary to prevent criminal act.Minor Settlement ProceedingsSpaulding: There is a duty to make full disclosure to the Court when applying for approval in minor settlement proceedings. The court may vacate such a settlement for mistake where one of the parties had additional knowledge and was aware that neither the court nor the adversary party possessed such knowledge when it was approved.Reasonable Belief of PreventionMcClure: Lawyer placed an anonymous phone call to the sheriff’s department then withdrew from representation. The death or substantial bodily harm exception applied because there was sufficient evidence that the lawyer reasonably believed kids were alive. Dissent: Breach of his client’s confidence is deficient performance under the Sixth Amendment.Live Client Confessions & Continuing ActsPurvis: Defendant has no duty to incriminate himself, only (1) not to lie under oath, (2) actively facilitate the conviction.Young: An attorney’s duty of confidentiality does not extend to affirmative acts which further client’s unlawful conduct.Cases holding the client’s phone number, address, or location are privileged generally have involved either:(1) a client who was not under a court order which was being violated; or (2) info at heart of the legal advice.Client FraudSarbanes-Oxley Act: Securities & Exchange Commission (SEC) requires attorneys to inform entity to prevent or remedy fraud/illegal conduct. If response is inadequate, the attorney must report up the ladder. May also reveal to the SEC (unless the attorney was hired to investigate or defend the entity against any claim of violation). State law is preempted.Note: The Ethics Alert suggests California attorneys not accept the SEC’s invitation to disclose client confidences.Individual ClientsABA substantial bodily harm exception permits disclosure to prevent the commission of a crime or fraud. Financial harm exception permits disclosure to avoid, minimize, or correct the consequences of a completed or continuing crime or fraud. Both exceptions require the attorney’s services be used by the client in the future or completed unlawful conduct.Noisy withdrawal: ABA permits notice of withdrawal and to disaffirm any opinion, doc, etc. required for fraud!!Entity ClientsABA: An entity’s attorney may reveal confidential info out the door if the highest authority in the organization ignores it, but only if and to the extent the lawyer reasonably believes necessary to prevent substantial injury to the organization. The lawyer may reveal confidential info even though his services were not used in furtherance of the unlawful conduct.CRPC: Attorney’s recourse is to withdraw from representation. Send letter demanding work product no longer be used.Termination for Unjust CauseThe attorney-client contract is an employment at will arrangement permitting the client to discharge the attorney at any time without being in breach of contract, i.e., unjust cause is ok. Thus, the tort of retaliatory discharge does not apply.Exception: CA in-house counsel may sue for wrongful termination because similar to non-attorney colleagues.Client PerjuryStrickland two-prong test for 6th Amendment violation: Breach of confidentiality is not only an ethical violation, but may also deprive the client of the right to the effective assistance of counsel: (1) The defendant must show that counsel’s performance was deficient; and (2) The defendant must show that the deficient performance prejudiced the defense.First prong: Must fall below an objective standard of reasonableness; strong presumption of sound trial strategy.Second prong: Defendant must show “reasonable probability” the result would have been different; however, actual or constructive denial of the assistance of counsel altogether is legally presumed to result in prejudice.Future PerjuryWhiteside: Counsel’s ethical duty of candor to the court collided with ethical duty to his client to preserve confidences. The 6th Amendment right of a criminal defendant to assistance of counsel is not violated when an attorney refuses to cooperate with the defendant in presenting perjured testimony at his trial. Ethical dicta has no constitutional dimension.ABA First duty: Attempt to dissuade the client from an unlawful course of conduct (b/c in client’s best interests.)Dissuasion may include threats of adverse tactical/legal consequences; & explain ethical duty to disclose perjury.ABA Second duty: Withdrawal (ostrich-like approach). The ABA rejects participation or a passive role by counsel.If not feasible, lawyer must 1st limit direct, or 2nd refuse to permit testimony, or 3rd disclose intent to the court.5th Amendment ConcernsWhiteside was prejudiced because it is “essential to proper representation” that Whiteside be able to confide in his lawyer. Upjohn. Having done so to protect his 6th amendment right to proper representation, he then found himself threatened by his own lawyer with violation of his 5th Amendment privilege against self-incrimination. Fisher.Thus, the 5th Amendment is still a possible basis for overturning a conviction in a future variation on Whiteside.The Narrative ApproachJohnson: Under the narrative approach, the attorney calls the defendant to the witness stand but does not engage in the usual question and answer exchange. Instead, the attorney permits the defendant to testify in a free narrative manner. In closing arguments, the attorney does not rely on any of the defendant’s false testimony. Protects defendant & court.CA has not mandated the narrative approach, it has simply approved it. This is a minority, non-ABA approach.Cross-Examination LimitationsHorne: Defense counsel’s lack of active participation during cross-examination fell below the required standard of care.Note: There was still not ineffective assistance, because the defendant was not prejudiced. Very high standard.Past PerjuryABA: With regard to past perjury, but prior to the conclusion of the proceedings, a lawyer who learns of the client’s perjury should urge the client to rectify it. If the client declines, the attorney must have actual knowledge to disclose.CRPC: A lawyer may only employ means consistent with truth and may not mislead a judge or jury with false statements.B&P: A lawyer commits a misdemeanor if he is guilty of deceit or collusion with intent to deceive the court or any party.Knowledge RequirementRiel: CA attorneys may present evidence that they suspect, but do not personally know, is false. They may also present (or withhold if reasonable belief in client’s best interests) all statements to the court and let it decide which to believe.Wos: Before issuing an anti-perjury admonition, the lawyer should know beyond a reasonable doubt the client will lie.The good faith determination/firm factual basis standards deprive the client of a fundamental right to testify.An attorney cannot threaten to withdraw during a trial to coerce the defendant to relinquish his right to testify.Selective Ignorance/The LectureUnder this approach, the lawyer learns enough to handle the case, but not precisely enough from the client to require revealing information to the court. E.g., “the lecture” tells the client the law before hearing the facts. Lawyers who engage in such practice may be violating their obligation to provide competent representation, but it protects perjury.Hazard: Requiring a criminal defense lawyer to “blow the whistle” on client perjury is futile/counterproductive.Frankel: We should not be called upon to “know” when someone’s story is false. Credibility is for the judge/jury.Truthful Witness DilemmaA lawyer may fully test a truthful witness’s credibility on cross-exam and then argue any resulting falsehoods to the jury.Lawyer Self-DefenseABA applies: (1) claim/defense in controversy btwn attorney & client; (2) claim against the lawyer based upon conduct in which the client was involved; and (3) to an allegation in “any proceeding” concerning the representation of the client. However, a lawyer does not have to wait for legal actions to be brought to respond to allegations made of wrongdoing.Note: ABA permits disclosure when a third party alleges that the lawyer and the client have conspired together against the third party, but disclosure is not permitted when the third party alleges breach of duty to the client.California LawThe ethical obligation of confidentiality contains no self-defense exception.The attorney-client privilege exception applies to a dispute concerning the client, not to a dispute with third parties.CRPC: Nothing prevents obtaining written, informed consent, disclosing consequences of permitting the disclosure.Court OrderABA: The lawyer should assert the privilege and all other argument to resist disclosure, unless frivolous or client consent. If unsuccessful, the lawyer must communicate, discuss immediate appeal, and request disclosure be in camera or sealed.Disclosure for Employment ChangeABA: A lawyer may reveal confidential info to detect and resolve conflicts arising from a change in employment or ownership, but only if it would not compromise the attorney-client privilege/prejudice the client. Disclosure is limited to the identity of the person/entity, a brief summary of the issues involved, and whether the matter has terminated.Difference between Confidences and Secrets“Confidence” refers to information protected by the attorney-client privilege, and “secret” refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client. A protected secret may be information that did not come from a communication with the client. Secrets are only protected under the duty of confidentiality, not the privilege. ................
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