Hard Lessons about Hard Copies: Waiving the Privilege at the Front Desk

Thomas Wilkinson and Deborah Winokur co-authored an article for the American Bar Association Litigation Section discussing how seemingly innocuous or careless acts can result in at least a partial waiver of the attorney-client privilege. They look at examples involving waiver of the privilege by the client, and also examine the relevant rules regarding a lawyer’s duty of confidentiality. Thomas and Deborah provide suggestions on how lawyers can avoid inadvertent, mistaken, or simply careless waiver of the privilege. To read the full article, click here.

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Printing While Traveling? Be Careful!

Did you hear about the case where the client’s CEO waived privilege by forwarding an email from his company’s counsel to a hotel’s front desk for printing? Whoops!

In Fourth Dimension Software v. Der Touristik Deutschland GMBh, linked below, the CEO of the plaintiff software company (“FDS”) received an email from the company’s former in-house counsel. Because the CEO was traveling in Germany and wanted to review the email before a key business meeting, he forwarded it to the hotel front desk’s email to print. The defendant successfully argued in the district court that forwarding the email to the hotel front desk waived attorney-client privilege.

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The Ups and Downs (or Good and Bad?) of LinkedIn

We need LinkedIn, right? Sure? Yes! LinkedIn has become a very useful and key marketing tool for working professionals, including attorneys. The three most popular uses for LinkedIn are staying connected with colleagues, staying up to date on clients’ news, and as a passive marketing tool.

LinkedIn is a great way to stay connected to colleagues, former classmates, and current and future clients. Many consider it “your professional Facebook.” And while you might be hesitant to brag on Facebook that you were just promoted to partner at your law firm, that sort of announcement is right at home on LinkedIn. It is also a great place to post links to articles or blogs you or your colleagues wrote, or information about your next speaking engagement. Not only will this let your former law school classmates see just how well you are doing, but it will allow others who may need your help on a specific topic or who are also attending that conference where you are speaking, to reach out and get to know you better. Much the same way you use phone calls, educational and training opportunities, newsletters, and social events to stay top of mind with current clients and potential referral sources, you can use LinkedIn to do the same.

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ABA Formal Opinion 502 on Pro Se Lawyers: Molding Verbiage to Fit Policy

Daniel Q. Harrington wrote the article, “ABA Formal Opinion 502 on Pro Se Lawyers: Molding Verbiage to Fit Policy” for the American Bar Association Litigation Section’s website. The article discusses ABA Formal Opinion 502. This Opinion clarifies that the prohibition against lawyers contacting an opposing party represented by counsel applies even to lawyers in the role of a pro se party. 

To read the full article, click here.

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What Do You Do When You Inadvertently Produce Privileged Documents? Lessons Learned from the Sandy Hook Elementary School/Alex Jones Defamation Trial

The recent litigation surrounding Alex Jones and Infowars Podcast, relating to defamatory statements Jones made about the Sandy Hook Elementary shooting victims and their families, focused on an issue that was not supposed to be the center of this defamation trial.  During the trial, Plaintiff’s counsel confronted Jones on cross-examination with the fact that Jones’ legal team had inadvertently turned over two years’ worth of Jones’ text messages relating to his baseless claims that the Sandy Hook shooting never took place.  The inadvertent production was bad for Jones, however, how it was revealed was even worse. Plaintiff’s lawyer, Mark Bankston, had the following exchange with Jones:

Mr. Jones, did you know that 12 days ago, your attorneys messed up and sent me an entire digital copy of your entire cellphone with every text message you’ve sent for the past two years? And when informed, did not take any steps to identify it as privileged or protect it any way, and as of two days ago, it fell free and clear into my possession and that is how I know you lied to me when you said you didn’t have text messages about Sandy Hook.  Did you know that?

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What is Going on With SCOTUS and Arbitration? – They Love FAA, They Love It Not

Lawyers who assume that the arbitration provisions within their carefully drafted agreements will be enforced may have to re-examine these assumptions. Within the space of less than one month, the Justices waded into three civil matters that dealt with the constant re-arrangement of the deck chairs and fine tuning of the parties’ rights and obligations relating to the application of the Federal Arbitration Act leaving those who practice with less than crystal clear guidance about how to proceed.

On May 23, 2022, in Morgan v. Sundance, Inc., SCOTUS, in a unanimous decision, ruled, contrary to the current positions of 9 of the 11 Circuits, that the requirement by the 8th Circuit that a showing that the other side has been prejudiced by a delay is not required for a party that has proceeded with litigation to be deemed to have waived its contractual right to arbitrate.  Although the Opinion was only nine (9) pages, the beginning, middle and end focused on one seeming objective of lesser ultimate important; that Courts may not establish law relating to the enforcement of arbitration agreements solely in order to protect the sanctity of arbitration agreements under the FAA.  To quote:  “… federal courts may not create arbitration-specific variants of federal procedural rules, like those concerning waiver, based on the FAA’s ‘policy favoring arbitration.’ If an ordinary procedural rule – whether of waiver or forfeiture or what-have you – would counsel against enforcement of an arbitration contract, then so be it.  The federal policy is about treating arbitration contracts like others, not about fostering arbitration.”

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Heightened Focus on Judicial Security and Fair Administration of Justice

The recent arrest of an armed man who planned to kill Supreme Court Justice Brett Kavanaugh has brought renewed attention to the issues surrounding the personal security of federal judges and their families.  The suspect told investigators that he found Justice Kavanaugh’s home address online.

On June 3, a retired Wisconsin circuit court judge, John Roemer, was shot and killed at his New Lisbon home in what the state attorney general described as a “targeted act” against the judicial system.

There were over 4,500 threats against judges in 2021, according to the U.S. Marshals Service.[1] Credible security incidents and threats against federal judges and court officials quadrupled from 2015 to 2019.

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Be Solicitous of New ABA Ethics Guidance on Solicitation

In mid-April, the ABA’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 501 clarifying the meaning of “solicitation” within the Rules of Professional Conduct. More specifically, the new opinion addressed the interplay of the general prohibition against in-person solicitation with the rules relating to misconduct and supervision of non-lawyers. While the new Formal Opinion does not represent a sea change in guidance, it provides crucial reminders about careful management of marketing practices for lawyers seeking paying clients, i.e., most of us.

Model Rule 7.3 on Solicitation prohibits live in-person solicitation of clients for the lawyer’s pecuniary gain, unless the client is another lawyer, a person the lawyer already knows or a person who routinely uses the type of legal services that the lawyer offers. There is significant jurisdictional variation from the Model Rule, with almost every state adopting a somewhat modified version. (See, ABA Jurisdictional Rules Comparison Charts) According to Comment [2], the rule is designed to prevent overreaching by lawyers particularly when potential clients are most vulnerable. The Committee found that there is continuing ambiguity about in-person solicitation by non-lawyers and whether the lawyers benefitting from the solicitation should be ethically responsible for their actions. The Committee examined these issues by way of the following four hypotheticals.

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The Delaney Decision – The NJ Advisory Committee’s Redux

The Supreme Court of New Jersey recently issued its ruling and opinion in the closely watched case of Delaney v. Trent S. Dickey and Sills Cummins & Gross, P.C. (Dec. 21, 2020)(“Sills”), relating to enforcement of a mandatory arbitration agreement in the Sills engagement letter. The Court refused to compel arbitration in that case because Sills had not adequately communicated with its client about the risks and benefits of agreeing to mandatory arbitration in order to make an informed decision. The Court did not go so far as to declare all mandatory arbitration provisions in engagement letters unenforceable, as some feared it might, but it requested additional guidance from the New Jersey Advisory Committee on Professional Ethics on the scope of an attorney’s disclosure requirements in this context.

On January 18, 2022, the Advisory Committee did that and more. The Committee expanded the scope of its mandate by asking the Court to reconsider its decision in Delaney and pronounce that New Jersey lawyers are prohibited from including mandatory arbitration provisions in their engagement agreements, even with appropriate disclosures and counseling. The Committee further proposed uniform guidelines for a separate rider addressing arbitration provisions and stressed the need for oral discussion with a client and recommendation to seek review by independent counsel.

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Court Rules Discovery Sanctions Must be Paid by Clients, Not Their Attorneys

A federal district court in Pittsburgh recently ruled that counsel were not permitted to advance the cost of discovery sanctions imposed by the court against their clients. In a case challenging Pittsburgh-based grocery chain Giant Eagle’s mandatory mask policy, Senior Judge Nora Barry Fischer was faced with the question whether two plaintiffs, Vidovich and Zytnick, should pay Giant Eagle’s attorney’s fees and costs related to pursuing the plaintiffs’ Facebook posts about their interactions with the grocery chain. A court-appointed special master had recommended that plaintiffs be sanctioned, but their counsel at Thomson Rhodes and Anderson, contended that members of the firm were ultimately responsible for the delays and sought permission to pay the sanctions on their clients’ behalf.  Giant Eagle urged that the sanctions be paid by the plaintiffs personally.

Judge Fischer examined whether the plaintiffs’ fee agreement made any provision for advancing attorney’s fees and costs ordered as discovery sanctions and, not surprisingly, found no specific language providing that counsel were free to advance such fees and costs and secure reimbursement from the clients later. The court also reviewed Rule of Professional Conduct 1.8(e) and the supporting comment concerning the provision of financial assistance to clients in connection with litigation, and found that the rule did not directly address whether court ordered sanctions could be funded by counsel consistent with the rule.

The court found no Pennsylvania cases or ethics opinions directly addressing whether the firm’s proposal was inappropriate, but was “unpersuaded that the appropriate approach to this unsettled ethical issue is for plaintiffs’ counsel to note the lack of controlling authority and to forge ahead to advance such sanctions on behalf of his clients without first utilizing the available resources to obtain an opinion from ethics counsel, the Bar Association or the Disciplinary Board.”  The court noted that bar association ethics opinions in Florida and Oklahoma had both said that firms could not ethically advance their clients’ attorney’s fees imposed as a sanction, while an Alaska ethics opinion had concluded that such fees could be considered part of the “expenses” a firm was permitted to advance. The court’s research did not reveal a consensus on the question, and none of the opinions directly “addressed the facts and circumstances at issue here involving court ordered sanctions imposed against certain of the plaintiffs for proven discovery violations.”

The court declined to accept the law firm’s contention that advancing court costs and expenses for a client may be part of a firm’s efforts to maximize access to the courts for those who might not otherwise be able to afford it, as plaintiffs’ had not provided any evidence that Vidovich or Zytnick could not afford to fund the fees.

In a somewhat different context, a U.S. District Judge in Oregon recently imposed a $40,000 sanction on counsel of record and their law firm for failing to mention “long-standing, settled caselaw” that prevented the judge from issuing an injunction that was sought by the law firm in an attempt to prevent a strike by medical technicians and therapists at a health system. The court’s opinion rejected as “meritless” an argument that the attorneys’ actions were not sanctionable because they were merely arguing for an “extension” of existing case law and were unable to identify any case directly on point with the underlying facts. The December 16, 2021 Court Order is here: https://s3.documentcloud.org/documents/21164070/mcshanesanctionslawyerfirmliable.pdf

Takeaways: 

  • In the event of uncertainty as to whether the law firm or the client is financially responsible for payment of monetary sanctions, further analysis of the background facts and circumstances is likely required. The dearth of court decisions and ethics opinions addressing whether clients or counsel must fund monetary discovery sanctions is in part a function of the fact that Courts seldom focus on the identity of the payor of such sanctions orders. Answering who is the “right” responsible party may require a detailed inquiry into the attorney-client communications concerning the scope and timing of discovery, as well as the diligence exercised in preparing the client’s responses for production.
  • Once sanctions are imposed, whether the fees and costs will be funded by the clients or the law firm or both will often be the subject of frank discussion as between the law firm and its client(s).  Where the client has caused the delay in a document production, then the payment should come from the client.  If the delays were due to oversights or misjudgments by both client and counsel, then the costs may be shared by agreement with the client.  If the client and counsel cannot agree on a fair allocation, the question may be raised with the court, addressed via mediation or paid by counsel as an advance against any recovery at the conclusion of the case consistent with Rule 1.8(e). When a dispute develops as between client and counsel concerning the proper party to pay the costs, the client should be encouraged to consult independent counsel for guidance. As in the Giant Eagle case, the party seeking the sanction will typically urge as a tactical matter that the sanction be borne by its opponent, rather than by opposing counsel.
  • Lawyers and law firms may want to seek ethics guidance concerning the proper allocation of responsibility for a monetary sanction. Judge Fisher properly explained that there are available avenues to secure ethical guidance through bar association ethics committees or private ethics counsel. The Disciplinary Board in Pennsylvania does not typically provide ethics guidance upon request.
  • Law firm’s may want to consider addressing the payment of costs in the form of monetary sanctions in their fee letters at the outset of the representation, particularly in the case for clients with limited financial resources. The court’s ruling suggests that law firms may address in advance in their fee agreements a voluntary commitment to fund or advance monetary sanctions that may be imposed in the course of discovery, subject to reimbursement from any later recovery in the case. Law firms should also consider including language expressing an expectation that the client will reasonably cooperate in the discovery process and assist counsel in responding to discovery requests in a timely manner.

The case is Kimberly Pletcher, et al. v. Giant Eagle Inc., et al., C.A. 2:20-cv-00754 (W.D. PA), and the link to the opinion follows: http://lawyersrepresentinglawyers.com/wp-content/uploads/sites/36/2021/12/Kimberly-Fletcher-v.-Giant-Eagle-Inc.-Order-of-Court-12_15_2021.pdf

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