Hot Ethics Issues for Product Liability Defense Attorneys

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1 Hot Ethics Issues for Product Liability Defense Attorneys Dane S. Ciolino Loyola University New Orleans College of Law 6363 Saint Charles Ave New Orleans, LA (504) Return to course materials table of contents

2 Dane S. Ciolino serves as the Alvin R. Christovich Distinguished Professor of Law at Loyola University New Orleans College of Law. Professor Ciolino s current scholarly and teaching interests include professional responsibility, criminal law and copyright. He served as reporter to the Louisiana State Bar Association Ethics 2000 Committee and chairperson of a Louisiana Attorney Disciplinary Board Hearing Committee. He was a member of the Louisiana State Bar Association (LSBA) Professionalism Committee, the LSBA Lawyer & Judicial Codes of Conduct Committee and the LSBA Ethics Advisory Service.

3 Hot Ethics Issues for Product Liability Defense Attorneys Table of Contents Presentation Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 61

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5 Presentation HOT ETHICS ISSUES 2011 DANE S. CIOLINO 1 1. Social Networking a. Lawyer Investigation. An advisory ethics opinion from New York (see New York City Bar Ass'n Comm. on Professional and Judicial Ethics, Formal Op , Sept. 10, 2010), advised that lawyers must not use deceptive means to secure access to social networking sites and information. Rather than using trickery, lawyers must use formal discovery. Using trickery is similar to using deceptive techniques to gain access to a witness s house, when if truth were told, the witness almost certainly would slam the door shut and perhaps even call the police. Id. Notably, ABA Model Rule 4.1 prohibits lawyers from making false statements of material fact to third persons. b. Lawyer Groupon Advertisements. Groupon sends blast advertisements to subscribers. Recipients interested in an advertiser s product or service download a discount coupon. Groupon s fee is based on a percentage of each unit sold. More particularly, a percentage of the revenue received by each daily deal advertiser is shared with Groupon. A North Carolina preliminary ethics opinion recently advised that [w]hen the charge for the advertising varies based on the amount of the legal fee recovered, the charge generally amounts to an improper fee sharing arrangement. See N.C. Ethics Inquiry Jan. 20, c. Judges. Can a judge friend lawyers who appear before the judge? Yes, according to on Ohio advisory opinion (see Ohio Sup. Ct., Bd. of Commissioners on Grievances and Discipline, Op , Dec. 3, 2010), which recommended the following: i. a judge must maintain dignity in every comment, photograph, and other information shared on the social networking site; 1. Alvin R. Christovich Distinguished Professor of Law, Loyola Law School, New Orleans ( address: Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 63

6 HOT ETHICS ISSUES ii. iii. iv. a judge must not foster social networking interactions with individuals or organizations if such communications erode confidence in the independence of judicial decision making; a judge should not make comments on a social networking site about any matters pending before the judge; a judge should not view a party s or witness s pages on a social networking sites and should not use social networking sites to obtain information regarding the matter before the judge; v. a judge should avoid making any comments on a social networking site about a pending or impending matter in any court; vi. vii. a judge should disqualify himself or herself from a proceeding when the judge s social networking relationship with a lawyer creates bias or prejudice concerning the lawyer for a party; a judge may not give legal advice to others on a social networking site. 2. Cloud Computing a. Relevant Ethical Obligations i. Confidentiality: Assuring confidentiality of client information. Under ABA Model Rule of Professional Conduct 1.6(a): A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). (1) Handing new threats to confidentiality. (2) Handling old threats to confidentiality. ii. Safeguarding Property 64 v Product Liability Conference v April 2011

7 HOT ETHICS ISSUES (1) ABA Model Rule of Professional Conduct 1.15(a) requires that a client s property be appropriately safeguarded by the lawyer. (2) A lawyer should also assure that the client can obtain the lawyer s information should the lawyer die suddenly or become disabled. ABA Model Rule 1.3, comment 5 provides that to prevent neglect of client matters in the event of a sole practitioner's death or disability, the duty of diligence may require that each sole practitioner prepare a plan, in conformity with applicable rules, that designates another competent lawyer to review client files, notify each client of the lawyer's death or disability, and determine whether there is a need for immediate protective action. iii. Complying With Ethical Obligations. A September 2010 New York State Bar Association advisory opinion suggests that a lawyer using a cloud-computing service provider should: (1) ensure that the online data storage provider has an enforceable obligation to preserve confidentiality and security, and that the provider will notify the lawyer if served with process requiring the production of client information; (2) investigate the online data storage provider s security measures, policies, recoverability methods, and other procedures to determine if they are adequate under the circumstances; (3) employ available technology to guard against reasonably foreseeable attempts to infiltrate the data that is stored; and/or (4) investigating the storage provider s ability to purge and wipe any copies of the data, and to move the data to a different host, if the lawyer becomes dissatisfied with the storage provider or for other reasons changes storage providers. See NEW YORK STATE BAR ASSOCIATION Op. No. 842 (Sep. 10, 2010). Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 65

8 HOT ETHICS ISSUES iv. ABA Ethics 20/20 Commission Considerations. In September 2010, the ABA Ethics 20/30 Commission requested comment on client confidentiality and lawyers use of technology, and raised the following issues: (1) protecting data loss or disclosure from lost or stolen computers; (2) using secure passwords; (3) purging data upon device disposal; (4) using anti-virus, anti-malware, and anti-spyware software; (5) using firewalls; (6) backing up data; (7) updating security software; (8) encrypting electronic information; and, (9) purging metadata. 3. Multi-Jurisdictional Practice a. Cross-Border Litigation Practice. The ABA has noted that [i]n connection with litigation, it is not uncommon for parties to retain lawyers in whom they have particular confidence, or with whom they have a prior relationship, to represent them in lawsuits in jurisdictions in which the lawyers are not licensed, and for these lawyers to be admitted pro hac vice to appear on behalf of the client. In addition, lawyers also perform work outside their home states for which they cannot obtain pro hac vice admission, which is not available prior to the filing of a lawsuit or to authorize work that is not related to a judicial proceeding in the particular state. For example, litigators commonly go to states other than those in which they are authorized to practice law in order to review documents, interview witnesses, enter into negotiations, and conduct other activities that are either 66 v Product Liability Conference v April 2011

9 HOT ETHICS ISSUES ancillary to a lawsuit pending in a state in which they are authorized to practice or that are performed before a lawsuit is filed. 2 b. Cross-Border Transactional Practice. Furthermore, the ABA has observed that [l]awyers who provide legal advice or assistance in transactions also commonly provide services in states in which they are not licensed. Like litigators, transactional lawyers who are representing clients in the state in which they are licensed travel outside the state in order to conduct negotiations, gather information, provide advice, or perform other tasks relating to the representation. Lawyers also travel outside their home states in order to provide assistance to clients who are in special need of their expertise. For example, lawyers who concentrate their practice in federal law such as securities, antitrust, labor, or intellectual property law are often retained by clients outside their home states because of the clients regard for their particular expertise. The same is true of foreign lawyers whose expertise in foreign law is sought, as well as of other lawyers, such as bond lawyers or mergers-and-acquisition lawyers, who practice in specialized areas. For some lawyers, multijurisdictional practice grows out of an ongoing relationship with a client. Sometimes, the work is for a client who resides in the lawyer s home state but who has business dealings outside the state. Other times, the work is for a client who has moved out of state. A lawyer who drafts a will for a client in one state may be asked by that client to draft a codicil to the will after the client has moved to another state. For in-house lawyers in particular, ongoing work for a corporate employer commonly involves travel to the different states where the corporation has offices or business interests. 3 c. ABA MJP Initiatives. As a result of these concerns, the ABA in 2000 formed a Commission on Multijurisdictional Practice. i. Purpose. The ABA charged its new MJP Commission to do the following: (1) To [r]esearch, study and report on the application of current ethics and bar admission rules to the multijurisdictional practice of law; 2. Id. 3. Id. Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 67

10 HOT ETHICS ISSUES (2) To analyze the impact of those rules on the practice of in-house counsel, transactional lawyers, litigators and arbitrators and on lawyers and law firms maintaining offices and practicing in multiple state and federal jurisdictions; (3) To make policy recommendations to govern the multijurisdictional practice of law that serve the public interest and take any other actions as may be necessary to carry out its jurisdictional mandate; and (4) To review international issues related to multijurisdictional practice in the United States. 4 ii. Report by Commission and Action by House of Delegates. In June 2002, the Commission filed its Final Report with the ABA House of Delegates. On August 12, 2002, the House of Delegates adopted, with a few friendly amendments, all 5 recommendations contained in the Final Report. Among other proposals, the House of Delegates adopted the following amendments to the Model Rules of Professional Conduct: (1) Model Rule 5.5 (a) Title. The ABA amended the title of Rule 5.5 of the ABA Model Rules of Professional Conduct to: Unauthorized Practice of Law; Multijurisdictional Practice of Law. (b) (c) Rule 5.5(a). The ABA amended Rule 5.5(a) of the Model Rules to provide that a lawyer may not practice law in a jurisdiction, or assist another in doing so, in violation of the regulations of the legal profession in that jurisdiction. Rule 5.5(b). The ABA amended Rule 5.5(b) to prohibit a lawyer from establishing an office or other systematic and continuous presence in 4. See id. at See id. at v Product Liability Conference v April 2011

11 HOT ETHICS ISSUES a jurisdiction, unless permitted to do so by law, or another provision of Rule 5.5; or holding out to the public or otherwise representing that the lawyer is admitted to practice law in a jurisdiction in which the lawyer is not admitted. (d) Rule 5.5(c). The ABA amended Rule 5.5(c) to identify circumstances in which a lawyer who is admitted in a United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may practice law on a temporary basis in another jurisdiction, including the following: (i) (ii) (iii) Association with Local Counsel. Work on a temporary basis in association with a lawyer admitted to practice law in the jurisdiction, who actively participates in the representation; Ancillary Services. Services ancillary to pending or prospective litigation or administrative agency proceedings in a state where the lawyer is admitted or expects to be admitted pro hac vice or is otherwise authorized to appear; ADR Representation. Representation of clients in, or ancillary to, an alternative dispute resolution ( ADR ) setting, such as arbitration or mediation; and (iv) Related Nonlitigation Practice. Nonlitigation work that arises out of or is reasonably related to the lawyer s practice in a jurisdiction in which the lawyer is admitted to practice. (e) Rule 5.5(d). The ABA adopted Rule 5.5(d) to identify multijurisdictional practice standards relating to: Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 69

12 HOT ETHICS ISSUES (i) (ii) In-House Lawyers. Legal services by a lawyer who is an employee of a client, and Services Otherwise Authorized. Legal services that the lawyer is authorized by federal or other law to render in a jurisdiction in which the lawyer is not licensed to practice law. (2) Rule 8.5: The ABA amended Rule 8.5 of the Model Rules to clarify the authority of a jurisdiction to discipline lawyers licensed in another jurisdiction who practice law within their jurisdiction pursuant to the provisions of Rule 5.5 or other law. 6 d. Signing Pleadings for Local Counsel: The Virginia Supreme Court has ruled that out-of-state lawyers cannot sign pleadings on behalf Virginia lawyers serving as local counsel even with express authorization. See Shipe v. Hunter, 699 S.E.2d 519 (Va. 2010) ( a pleading, signed only by a person acting in a representative capacity who is not licensed to practice law in Virginia, is a nullity ); see also Aguilera v. Christian, 600 S.E.2d 517 (2010) ( Aguilera s signature on the complaint was invalid and a nullity because it was not signed by... an attorney licensed to practice law in this Commonwealth. Therefore, the trial court did not err in dismissing the complaint ). e. Choice of Law in Multi-Jurisdictional Practice i. Model Rule 8.5(b): The current ABA Model Rule governing choice of law provides as follows: (b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows: (1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless 6. Id. at v Product Liability Conference v April 2011

13 HOT ETHICS ISSUES the rules of the tribunal provide otherwise; and (2) for any other conduct, the rules of the jurisdiction in which the lawyer's conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer's conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer's conduct will occur. ii. Work of ABA 20/20 Commission (1) In early 2011, the ABA Ethics 20/20 Commission, which is undertaking a review of multijurisdictional practice, raised the following problematic hypos (among others) to consider in evaluating whether reform is appropriate: (a) (b) (c) Lateral hires in multistate law firms. A multistate firm wants to laterally hire a lawyer who will create an imputed conflict for a lawyer who works in an office in another state. The state in which the lateral is admitted permits nonconsensual screening while the state where the other lawyer is licensed does not. Conflicts in international multi-office firms. A lawyer in a firm's overseas office seeks to represent a client adverse to a client represented by the firm's Louisiana office in an entirely unrelated matter. No conflict exists under the foreign jurisdiction governing conflicts, but Louisiana s rules or conduct impute the conflict to other firm members. Partnering and sharing fees with nonlawyers. A law firm with offices in several states, Washington, D.C., and London has two Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 71

14 4. Aggregate Settlements HOT ETHICS ISSUES nonlawyer partners who are economists and work with the firm's antitrust lawyers. Nonlawyers are permitted to be equity owners of law firms in the District of Columbia and England, but not in the other states. (2) The Problem. According to the Commission, Lawyers need clearer guidance when they engage in cross-border practice and encounter rules of professional conduct that impose conflicting obligation. For this reason, the Commission seeks input into whether amendments to Model Rule 8.5 or other action would be advisable and specifically requests feedback on whether any of the above approaches (or any other alternatives not described here) would be more effective than the current version of Model Rule 8.5. The Commission also seeks feedback on whether it should consider any amendments to Model Rule 1.10 in order to clarify how conflicts of interest should be resolved when the conflict implicates more than one jurisdiction. a. Signed Writing Requirement: Any aggregate settlement agreement must be signed by the clients. Under Model Rule 1.8(g), a lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients... unless each client gives informed consent, in a writing signed by the client. b. Disclosure Requirement: Prior to asking the client to sign the aggregate settlement agreement, the lawyer must disclose to the client the existence and nature of all the claims... involved and of the participation of each person in the settlement. See id. R. 1.8(g). By requiring disclosure the participation of each person in the settlement, the rules require that the lawyer disclose to each client what the other clients will receive or pay if the settlement... offer is accepted. See id. R.1.8, cmt. 13. c. Consequences of Failing to Comply: Any aggregate settlement that fails to comply with this requirements set forth in this rule may be nullified. See Burrow v. Arce, 997 S.W.2d 229, 246 (Tex. 1999). 72 v Product Liability Conference v April 2011

15 5. Payments to Fact Witnesses HOT ETHICS ISSUES a. Model Rule 3.4(b): A lawyers shall not... falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law.... b. Discussion: Although many lawyers believe that there is a per se prohibition against paying fact witnesses, the Rules of Professional Conduct contain no such provision. It is likely permissible to pay a fact witness for trial preparation time and expenses if: i. the payment is not motivated by an improper purpose, such as to obtain inside information, to obtain false testimony or to influence the content of the witness s testimony; ii. iii. the amount paid merely compensates the witness for the reasonable value of the time and expenses actually incurred by the witness; and, the amount of the payment is not contingent on the witness s testimony. * * * END * * * Hot Ethics Issues for Product Liability Defense Attorneys v Ciolino v 73

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