Florida Coastal Law Journal

Spring/Summer 1999

TO SQUEAL OR NOT TO SQUEAL:

A THINKING LAWYER=S GUIDE TO REPORTING LAWYER MISCONDUCT

Bruce A. Campbell*

Copyright 1999 by Florida Coastal School of Law; Bruce A. Campbell

Lawyers have an obligation to report certain serious misconduct of other lawyers to the disciplinary authorities. Few rules of professional conduct stir more emotion and potential controversy than the Asquealer@ or Asnitch@ rule. Perhaps, the Aschoolyard@ refrain of tattletale still rings subliminally in our minds. The problems posed by Asquealing@ on another lawyer can be substantial.¹

In 1988, in In re Himmel, the Illinois Supreme Court rocked the legal community with a decision that highlights many of the difficult issues that can arise from the duty to report.² In Himmel, James Himmel, an attorney with 11 years of experience was retained to help a client recover money that her prior lawyer had misappropriated. Himmel investigated the matter by: 1) talking to his client while in the presence of the client=s mother and the client=s fiancé; 2) talking to the insurance carrier that had paid the money to the client=s former lawyer; and 3) talking to the client=s former lawyer. Despite the information his investigation yielded, Himmel did not report that lawyer=s misconduct.⁴

The Illinois Supreme Court suspended Himmel for one year because he possessed unprivileged knowledge of illegal conduct involving moral turpitude, and failed to report the misconduct to the appropriate authorities.⁵ In so holding, the Court rejected Himmel=s defense that the client had filed a grievance against the offending attorney. The Court stressed: A[c]ommon sense would dictate that if a lawyer has a duty under the Code, the actions of a client would not relieve that attorney of his own duty.@⁶ Similarly, the court rejected Himmel=s argument that he should have been excused from reporting the violation because his client had directed him not to report it.⁷ The Court stressed that a lawyer, as an officer of the court, is duty-bound to uphold the ethical rules, and thus concluded, a lawyer may not circumvent the ethical rules merely because his client asks him to do so.⁸ The Court also rejected Himmel=s assertion that the information he had was privileged because he had received it from his client, and therefore, he was under no obligation to disclose the matter.⁹ In rejecting this assertion, the Court pointed out that the information Himmel obtained from his client, was voluntarily disclosed by the client in the presence of third parties who were not agents of the client, and accordingly, was

not privileged.¹⁰ The Court further stressed that Himmel had not only spoken with representatives of the insurance company that had paid money to the prior lawyer but also with the culpable lawyer himself and therefore, such information was not privileged.¹¹

Texas, like virtually every other jurisdiction, requires lawyers to report certain misconduct of fellow lawyers to the appropriate disciplinary bodies.¹² The self-regulation of the legal profession requires its members, i.e., the attorneys themselves, to take effective measures to protect the public when they have knowledge of the misconduct of other lawyers and such knowledge is not protected as a confidence.¹³ Although lay persons prejudiced by unscrupulous lawyers can report lawyer misconduct, lawyers themselves are often in the best position to discover, identify and report unethical conduct and protect the public before serious harm occurs.¹⁴ If anyone doubts that such an obligation exists, the warnings from several Texas appellate courts should provide a loud wake-up call:

We have demonstrated patience with this attorney over the nineteen months that this case has been pending on our docket. We believe that we have an obligation under the Texas Disciplinary Rules of Professional Conduct to report such conduct to the appropriate disciplinary authority. See TEX. DISCIPLINARY R. PROF. CONDUCT 8.03(a)(1989), reprinted in TEX. GOV=T CODE ANN., tit. 2, subtit. G appl. (Vernon Supp. 1995) (STATE BAR RULES art. X, '9). Note 1. Therefore, we direct our clerk to certify a record of this cause in our court consisting of the followingY. See also State Bar of Texas, Complaints Against Abraham Kazen, III, No. F1129300868 (Grievance Committee for District No. 09A, November 16,1994), summarized at Disciplinary Report, TEXAS LAWYER, Dec. 5, 1994, at 15. Gray v. State of Texas, 896 S.W.2d 572 (Tex. App. B Waco, 1995).¹⁵

The obligation to disclose another lawyer=s misconduct has existed since 1908. Cannon 29 of the ABA=s Cannons of Professional Ethics stated that Alawyers should expose without fear or favor before the proper tribunals corrupt or dishonest conduct in the profession@.¹⁶ In Texas, the present version of the reporting rule is set out in Rule 8.03 of the Texas Disciplinary Rules of Professional Conduct.¹⁷ Rule 8.03 provides:

(a) [Except as permitted in paragraphs (c) or (d),] a lawyer having knowledge that another lawyer has committed a violation of applicable rules of professional conduct that raises a substantial question as to that lawyer=s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate disciplinary authority.¹⁸

To date, there are very few instances in which lawyers have been disciplined solely for a violation of Rule 8.03. For the most part, Rule 8.03 violations appear to have been Atacked on@ behind other rule violations. Nevertheless, in what is an often-overlooked decision, in 1980, the Texas Bar Journal reported that a San Angelo lawyer had been reprimanded because he had Aunprivileged@ knowledge of the circumstances of the misconduct surrounding another lawyer=s conduct.¹⁹ The lawyer who failed to report the misconduct received a private reprimand. The lawyer whose conduct gave rise to these disciplinary proceedings received a public reprimand for offering money to either a minor child or to her mother to ensure that a complaint pending in county court would be dismissed. The Grievance Committee found this action was prejudicial to the administration of justice. Although it is unclear what relationship this unnamed San Angelo lawyer had to the case, the logical inference is that either he was opposing counsel or a member of the same law firm as the lawyer who received the public reprimand. Either prospect has potentially chilling consequences. What makes this decision even more unusual is that at the time, the Texas Bar Journal=s policy was not to publish private reprimands.

Prior to 1997, the Texas State Bar Ethics Committee had not addressed Rule 8.03. Nevertheless, in 1997, the professional ethics committee of the State Bar published two opinions dealing with Rule 8.03.²⁰ Was it purely coincidental that these two opinions were published in the same year and in the same issue of the Texas Bar Journal, or was there a message that was being conveyed? It is with these considerations in mind that we should examine the structure of Rule 8.03.

I. IS THIS THE TYPE OF VIOLATION THAT MUST BE REPORTED?

The structure of Rule 8.03 consists of four primary components. First, there must be at least some indication of an incident in which another lawyer=s conduct is sufficiently culpable. Second, the potential reporting lawyer must have non-confidential information. Third, the potential reporting lawyer must have a sufficient quantum of information about the incident. Finally, assuming there is no exemption, and all of the prior components are satisfied, then the potential reporting lawyer must report the conduct.²¹

Not all potential violations of the Texas Disciplinary Rules of Professional conduct must be reported. Rule 8.03 limits the culpable conduct to Aconduct that raises a substantial question as to that lawyer=s honesty, trustworthiness or fitness as a lawyer in other respects@. (Emphasis added).²² The comments to Rule 8.03 explain that A[i]f a lawyer were obliged to report every violation of these rules, the failure to report any violation would itself be a professional offense. Such a requirement existed in many jurisdictions but proved to be unenforceableY.@²³ The comments also explain that there is a Ameasure of judgment@ that must be exercised in order to comply with the rule.²⁴

Conduct that calls into question the honesty or trustworthiness of a lawyer is relatively easy to identify. However, Afitness as a lawyer in other respects@ is not specifically enumerated in the Rule or any other rule of professional conduct, the comments, or in opinions of the State Bar Ethics committee.²⁵ We are thus left to consider disciplinary decisions from the various jurisdictions, ethics opinions and the writings of various commentators.

Generally speaking, the level of culpable conduct includes misappropriation of client funds;²⁶ forgery of a signature;²⁷ kickback schemes;²⁸ convictions for felony offenses;²⁹ bribery;³⁰ violating a state rule prohibiting contacting members of a jury venire;³¹ and failure to self report an out of state conviction on manslaughter and firearms charges.³² In contrast, ordinary professional negligence does not rise to the level of conduct that must be reported.³³ A mistake or isolated incident of negligent legal services does not satisfy the standard for Rule 8.03.³⁴ It is also reasonably safe to say that in Texas, conduct that reflects moral turpitude or that has given rise to disbarment or suspension calls into question a lawyer=s fitness to practice law.

II. WHAT IS THE SOURCE OF THE INFORMATION?

The second step in the analysis hinges on the source of the lawyer=s information concerning another lawyer=s misconduct.

Rule 8.03(d) provides:

This rule does not require disclosure of knowledge or information otherwise protected as confidential information:

(1) by Rule 1.05 or

(2) by any statutory or regulatory provisions applicable to the counseling activities of the approved peer assistance program. (emphasis added).

Rule 1.05(a) provides that:

>Confidential information= includes both >privileged information= and >unprivileged client information.= >Privileged information= refers to the information of a client protected by the lawyer-client privilege of Rule 5.03 of the Texas Rules of Criminal Evidence or by the principle of attorney-client privilege governed by Rule 5.01 of the federal Rules of Evidence for United States Courts and Magistrates. >Unprivileged client information: means all information relating to a client or furnished by the client, other than privileged information, acquired by the lawyer during the course of or by reason of the representation of the client.= (emphasis added).

The comments to Rule 8.03 state that if a report would involve a violation of Rule 1.05, a lawyer should consider encouraging his client to consent to disclosure in those instances in which prosecution of the violation would not substantially prejudice the client=s interests.³⁵ Query: if Himmel, were decided in Texas would the result be same? Perhaps not. It could be argued that the three steps Himmel took in his investigation: (1. talking to his client while in the presence of the client=s mother and the client=s fiancé; 2. talking to the insurance carrier that had paid the money to the client=s former lawyer; and 3. talking to the client=s former lawyer;) all fall within Aunprivileged client information.@³⁶

In contrast, the Illinois Supreme Court took a very narrow view of privilege in Himmel. The Court did not attempt to classify Himmel=s knowledge as a confidence or a secret. Subpart (d) of Rule 8.03, a much broader guideline than that used by the Himmel court, provides that confidential information is protected and not required to be disclosed.³⁷

III. IS THERE SUFFICIENT KNOWLEDGE?

The third step in the Rule 8.03 analysis is to determine whether there is sufficient knowledge held by the potential reporting lawyer. In May, 1997, Texas Ethics Opinion 520 responded to a question of whether a lawyer must have Asolid proof@ in order to trigger the obligation to report the misconduct of another lawyer. The opinion concluded that the Rule 8.03 reporting obligation is limited to those disciplinary violations that must be revealed and that the reporting lawyer must have knowledge that another lawyer has in fact committed a violation of the rules. The opinion stressed: AA report of misconduct must therefore be based upon objective facts that are likely to have evidentiary support.@³⁸ Accordingly, mere suspicions would appear to be insufficient.³⁹ The problem with Opinion 520 is that while seemingly providing a new standard, it failed to articulate what the standard entails. What are Aobjective facts@? Are they different from ordinary Afacts@? Do @objective facts@ have to be supported by a document or testimony? Would unsworn statements be sufficient? What if the facts were corroborated or had some other form of trustworthiness attached to them. Do Afacts@ become Aobjective facts@ if a lawyer spends more efforts to make them likely to be admissible. Must objective facts be admissible for the truth of the matter asserted? About all we know from Opinion 520 is that there must be something more than a scintilla of non-confidential information, but something less than personal knowledge sufficient to qualify one as a witness under the rules of evidence. Attorney U v. The Mississippi Bar ⁴⁰ illustrates the problem of such an ill-defined standard.

In Attorney U, the Mississippi Supreme Court issued a decision with a majority opinion, three dissenting opinions and two dissenting and concurring opinions.⁴¹ In this case, a client advised attorney U that he had entered into a fee splitting arrangement with attorney S. Various letters were exchanged between U and S and S=s counsel. Significantly, U on several occasions wrote to S and his counsel advising that he had advised his client of the availability of proceedings before the Mississippi State Bar Association, and unless the matter was resolved, he would advise his client to seek relief through whatever legal avenues were available.⁴² Through his attorney, S responded, without admitting or conceding any arrangement ever existed, and S disclaimed any arrangement to share fees. U=s client eventually filed a grievance against S. S filed a grievance against U. U never filed a grievance against S. In reversing the determination that U had violated Rule 8.03 by failing to report the fee splitting arrangement of S, the Mississippi Supreme Court held that U did not have sufficient knowledge of S=s misconduct to require him to report it. In so holding, the Court stated:

That standard must be an objective one, however, not tied to the subjective beliefs of the lawyer in question. The supporting evidence must be such that a reasonable lawyer under the circumstances would have formed a firm opinion that the conduct in question had more likely than not occurred and that the conduct, if it did occur, raises a substantial question as to the purported offender=s honesty, trustworthiness or fitness to practice law in other respects. (emphasis added).⁴³

In applying this standard, the Majority Opinion opined that although the lawyer=s client had told him about the fee splitting, there was no corroboration of the client=s story or the client=s trustworthiness. The other party to the alleged arrangement denied its existence. This information was not enough to dictate a firm opinion on the part of a reasonable lawyer that the conduct in fact occurred. The Majority stressed it was not for the lawyer to believe or disbelieve his client. It was up to a fact-finder. The Majority in concluding that attorney U had not violated his duty to report stressed, a lawyer must be free to assert his client=s claims; at least until there is evidence apparent that the client is lying.

The dissents in Attorney U focus on several issues. They ridicule the majority opinion as Aan apologia for Attorney U=s conduct.@ Further, they criticize the majority opinion because the new standard espoused added nothing to aid a lawyer in recognizing when a report of misconduct must be made and ignored the application of the facts to the new standard. The dissent pointed out that attorney U had actual knowledge of the violation because the response he received from attorney S=s lawyer stated that he was responding without admitting the allegation of fee splitting. The dissenters stressed that any human being accused of unethical conduct would readily deny the allegations if they were untrue, rather than have their attorney issue a response that responded without admitting or conceding the assertion. According to the dissent, attorney U attempted to blackmail S, and it did not work. The dissent concludes that no attorney would make such an attempt if he did not believe in the truth of the allegation that fee splitting had occurred. The dissenters wrote:

How can the majority assert that a lawyer can place sufficient belief in information furnished to him by his client to blackmail another attorney, yet somehow he did not have sufficient knowledge to relay that information to the Bar? People are found guilty of crime beyond a reasonable doubt and sentenced to decades in prison with less proof than this. One wonders what it would take to prove to the majority that Attorney U knew of the fee-splitting arrangement.⁴⁴

To say that the Mississippi Supreme Court was sharply divided on the issue of whether attorney U had sufficient knowledge to form the basis of a Rule 8.03 violation is an understatement.⁴⁵ The real problem that the attorney U case illustrates is that reasonable lawyers and judges can have vastly differing interpretations of the standards and their application to a particular set of facts.

The troublesome question which has yet to be addressed is that of timing. Assuming that a lawyer has sufficient information to raise to the level of knowledge for Rule 8.03, how long does she have to report the incident to the disciplinary authorities? Does she have a day, a week, a month, or a year? Suppose the facts giving rise to the duty to report are included in the findings of a court decision. Can the attorney wait until the judge or someone else makes a referral to the grievance committee and then report the misconduct? Does the lawyer have an obligation to report the misconduct to the grievance committee before he sees the findings of the court published in an official reporter? These and many other questions have yet to be addressed and resolved.

IV. CONCLUSION

Today=s thinking lawyer must be concerned about how and when the obligation to report the misconduct of another lawyer can arise. Hopefully, the thinking lawyer will be aided by an analysis of the answers to the following three questions: (1) is this the type of violation that must be reported? (2) what is the source of the information? and (3) is there sufficient knowledge? Each of these questions may require the thinking lawyer to expend substantial efforts to thoroughly analyze the situation. That analysis will necessarily be made more difficult by the numerous unexplored areas of Rule 8.03 which will to pose additional challenges.