SYNOPOSIS: This is a paper reformatted from a CLE presentation given in San Diego, California on the duty of confidentiality. It has always been understood that, absent an assurance of secrecy, clients will never be frank or candid with their lawyers. Thus, the attorney-client privilege and the ethical duty of confidentiality are the foundations upon which lawyers provide service to clients. That said, there is much controversy and misunderstanding about when, where, whether, and how, the privilege applies to a specific utterance or communication. This paper was intended to provide a general frame of reference within which to answer those questions.


"The Ethical Duty of Confidentiality"

By: Gary L. Stuart (1997)

 

Preface

It is the prerogative of any author to speculate at the beginning of any paper about what, if anything, might be accomplished in the writing. To that end, I offer my speculation on the moral basis for the Rule of Confidentiality and what we, as lawyers, should do to preserve it. In doing so, I make no pretense of a polished or even complete preface. Rather, this is a simple sketch of what I believe should constitute a professional trial advocate’s use of what is learned in confidence from or about the client.

We should be as vigorous about enforcing the rule of disclosing confidential information as we are about keeping it confidential.

We should ignore the moral quality of the client or the cause in applying the rule of confidentiality. That is to say, we must treat "bad" facts the same as "good" facts. Revealing them or disclosing them should not be tested on the basis of helping or hurting the client. Our test should be whether or not the Rule of Confidentiality requires them to be revealed or disclosed.

We should never forget the "Ethic" part of the word "Ethics." Moral philosophy helps us examine rules and their principles in light of the good or harm they produce. Applying the discipline of moral philosophy may also assist us in re-examining whether a particular rule engenders or erodes respect for the persons who are subject to the rule in question.

I recognize the considerable inconsistency in the cited appellate cases and the inherent ambiguity in the opinions excerpted from advisory committees. There is also much tension in the rules themselves. Despite the length of this paper and the quantity of the citations, I am not laboring under any false impression of solving or resolving all of the Ethical dilemmas presented in assessing the lawyer’s obligations under the Rule of Confidentiality. This paper is hopefully a good place to start your own analysis.

Historical Perspective

One of Arizona’s relatively old ethics opinions used the following language to describe the underlying premise of client confidentiality:

It is the general rule, as stated in Thorton on Attorneys at Law, sec. 92, at pp. 154-156, that "all confidential communications between an attorney and his client, made because of the relationship and concerning the subject-matter of the attorney's employment, are privileged from disclosure, even for the purposes of the administration of justice. . . ." This rule, says Thorton (sec. 94) was applied apparently for the first time in the case of Berd vs. Lovelace, Cary (Eng.) 88, "and for three centuries at least it has been steadily upheld by the courts on the ground that for the administration of the law, the confidence which it encourages the client to repose in the attorney to whom he resorts for legal advice and assistance, should upon all occasions be inviolable, because greater mischief would probably result from requiring or permitting its disclosure than from wholly rejecting evidence thereof. The rule is not one of mere professional conduct."

The Purpose of the Rule

The lawyer’s Rule of Confidentiality has been historically justified on a myriad of grounds but its modern purpose was eloquently stated by the United States Supreme Court in Upjohn Co. v. United States, 449 U.S. 383 (1983):

its purpose is to encourage full and frank communications between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer’s being fully informed by the client. Id. at 389.

While perhaps misplaced, my hope in creating this unduly long paper is to encourage lawyers to revisit the Rule of Confidentiality in light of the inherent tension between the perceived need to "protect" the client and the actual need to "comply" with the law. By revisiting the rule, the cases about it and the opinions on it, I hope to promote the broader public interest in the observance of the law of attorney-client privilege. Like any privilege, it can be abused. In abusing it, we run the risk of losing it. At the risk of gross oversimplification, the attorney-client privilege was not created to "hide" facts, it was created to "learn" facts.

Skilled advocates can only advance the position of their clients if they know all the facts. We do little to advance the cause of our clients by merely hiding the facts we learn.

The Ethical Rule of Confidentiality

Arizona’s version is as follows:

E.R. 1.6 CONFIDENTIALITY OF INFORMATION

Arizona's "version" of ABA Ethical Rule 1.6 is dramatically different from the "national" rule adopted by the House of Delegates of the American Bar Association on August 2, 1983. The Arizona Rules of Professional Conduct were promulgated on September 7, 1984, and became effective February 1, 1985.

Both the ABA rule and the Arizona rule protect client confidences about past crimes. Both rules "permit," but do not require, the revelation of confidential information to defend against a client's charges.

The ABA's rule "permits" disclosure of confidential information which the lawyer reasonably believes is necessary to prevent the client from committing a criminal act likely to result in imminent death or substantial bodily harm. Arizona's rule, on the other hand, "requires" this disclosure. Arizona's rule also "permits" the disclosure of information regarding the client's intention to commit any crime; the ABA's does not.

In addition to the candor required in court under Ethical Rule 3.3, trial lawyers must also be truthful in statements to others. Ethical Rule 4.1 prohibits trial lawyers from knowingly making false statements or failing to disclose material facts when disclosure is necessary to avoid assisting a client's criminal or fraudulent act. However, Ethical Rule 4.1 might conflict with Ethical Rule 1.6 where the false statement or material omission is a product of client confidential information. Once again, should that conflict arise, disclosure is prohibited and withdrawal is mandated. Ethical Rule 1.16(a)(1) mandates withdrawal where the continued representation will result in the violation of the Rules of Professional Conduct or any law.

There are many places in the Ethical Rules of Professional Conduct where various circumstances either permit or require a lawyer to disclose information relating to the representation, e.g., Ethical Rule 1.9(c), 2.2, 2.3, 3.3, and 4.1. While interpretation and personal judgment will always be necessary, the guiding presumption if the Ethical Rules is "to protect the information, not disclose it."

There is no principle more fundamental to trial lawyers than the protection of client confidentiality. The "old" Code of Professional Responsibility drew a distinction between client confidences, which were protected by the traditional evidentiary privilege, and client secrets, which meant other information which the client had requested be held inviolate. The Arizona Supreme Court's Comment to Ethical Rule 1.6 clarifies that the Ethical rule of lawyer-client confidentiality applies in situations "other" than those where the evidence is sought from the lawyer through the compulsion of law.

Obedience To The Unenforceable

Arizona trial lawyers must not only be honest and upright, but must be believed to be so by clients, courts, colleagues, and fellow citizens. "Obedience to the unenforceable" was how Henry S. Drinker described our obligations in his famous text on legal ethics. Justice Harlan Stone said: "[I]t is needful that we look beyond the club of the policeman as a civilizing agency to the sanctions of professional standards which condemn the doing of what the law has not yet forbidden."

In Arizona Ethics Opinion 85-4, a criminal defense lawyer had taken possession of an important item of physical evidence from an essential witness in a murder prosecution without participation by the defendant client. The Arizona Ethics Committee opined that the defense lawyer was Ethically obligated to surrender the evidence to the prosecutor. Further, the lawyer may be compelled to testify as to the original location and source of the evidence, as learned from the essential witness. Thus, confidential information may occasionally take the form of physical evidence as contrasted with the usual oral or written information regarding the client.

Central to the inquiring lawyer's dilemma was the conflict between the duty of loyalty to the client and duty of disclosure owed as an officer of the court. The Committee resolved the inquiry by noting that it hinged upon legal obligation to reveal the secret. It is a crime in Arizona to suppress or conceal any physical evidence that would aid in the state's prosecution. Additionally, removal of physical evidence with the intent to impair its availability constitutes the crime of tampering with evidence. Since the lawyer faced potential criminal liability for hindering prosecution and tampering with evidence, a legal obligation attached. Thus, the attorney was Ethically required to obey the law and disclose the information.

The Arizona Ethics Committee has rendered many opinions regarding client confidentiality. A brief summary of the more important opinions can be found at the end of this paper.

Extent of the duty

It is axiomatic that the duty of client confidentiality attaches at all times during the course of the representation. Trial lawyers, however, commonly face the dilemma of client confidentiality after the representation has been terminated. Ethical Rule 1.9(b) prohibits a lawyer from using information relating to the representation to the disadvantage of a former client except as Ethical Rule 1.6 would permit it or "when the information has become generally known."

It is not clear from either the rule itself or the comment to Ethical Rule 1.9 that there was any intended "opening" of client confidentiality upon termination of the relationship.

It should be obvious that after withdrawal from a case, a trial lawyer must refrain from disclosing information relating to the representation except as specifically provided in Ethical Rule 1.6. The notice of withdrawal, coupled with the disaffirmance of any opinion or document, constitutes an escape valve more likely to benefit the business lawyer than the trial lawyer.

The temporal nature of confidentiality comprises the subject of important opinions by the United States Supreme Court and the Arizona Supreme Court. The former reaffirmed the basis and the importance of the attorney-client privilege in Upjohn Co. v. United States. The latter rendered a blistering opinion on the subject in Parsons v. Continental National American Group.

Upjohn Co. v. United States

In Upjohn, the corporation's general counsel conducted an internal investigation regarding possible illegal payments to foreign governments. The company lawyers talked to numerous officers, managers, and employees from around the company's worldwide operations. The IRS summoned the company to produce the notes taken from the interviews. The Supreme Court held that the notes were protected by the attorney-client privilege:

The communications at issue were made by Upjohn employees to counsel for Upjohn acting as such, at the direction of corporate superiors in order to secure legal advice from counsel. . .  The Court of Appeals declined to extend the attorney-client privilege beyond the limits of the control group test for fear that doing so would entail severe burdens on discovery and create a broad "zone of silence" over corporate affairs. Application of the attorney-client privilege to communications such as those involved here, however, puts the adversary in no worse position than if the communications had never taken place. The privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.

Parsons v. CNA

In Parsons, a trial lawyer was retained to represent the insured in a personal injury action. The defense lawyer secured admissions from the defendant insured, indicating that the insured had acted intentionally, which gave rise to a coverage denial by the carrier. Following the personal injury action, the insurance carrier retained the same lawyer to represent it in garnishment proceedings brought by the winning plaintiffs. The Arizona Supreme Court held that the insurance carrier was estopped from applying the intentional act exclusion. Because the trial lawyer represented the insured in the personal injury suit, he could not at the same time advise the insurer about coverage. The court noted the difficulties attendant in providing undivided loyalty to the insured client. Citing Van Dyke v. White, however, the Parsons court noted that "the standards of the legal profession require undeviating fidelity of the lawyer to his client. No exceptions can be tolerated."

The Second Lawyer Syndrome

Another problem often arises with the "new lawyer" representing the client after the initial lawyer has either withdrawn or been terminated as counsel. In Arizona Ethics Opinion 77-15, the Committee considered whether a lawyer who had withdrawn could Ethically communicate with the former client's new attorney.

Interestingly, the lawyer's withdrawal had come about because of the opposing party's allegation that the lawyer had represented both parties to the underlying transaction. While denying that he had represented the opposing party in the transaction, he withdrew to avoid the appearance of impropriety. The Committee noted that a withdrawing attorney ordinarily has a duty to take "reasonable steps to avoid foreseeable prejudice to the rights of his client prior to withdrawal." That rule suggested a need to protect the prior client's interests, which must be considered with the perceptions of the opposing parties who believed themselves to be clients. The Committee opined that the inquiring attorney might choose to forgo communication with his former client's new attorney but that he was not bound to do so. The Committee reasoned as follows:

The inquiring lawyer may make his own decision whether to assist in the efficient transition of his former client's case to new counsel by advising the new counsel on his thoughts and analysis of the case or whether to abstain from doing so.

Another example of the possible extension of the duty of confidentiality was discussed in Arizona Ethics Opinion 78-5. The inquiring attorney's law firm represented a corporate client in the preparation of a prospectus to be distributed to potential investors. In the course of the representation, an officer of the corporation informed the lawyer that the president of the corporation had misappropriated funds from investors in offerings made before the inquiring lawyer had been retained. The Committee considered whether the lawyer was Ethically obligated to report the misappropriation of funds to the proper prosecutorial authorities. According to the Committee, the initial question was whether confidentiality considerations applied to communications received from an individual who is not himself the client but is rather a principal of the corporate client. The Committee held that "at least those individuals are entitled to the benefit of the Ethical obligations owed by an attorney to a corporate client who have authority to seek, receive and act on legal advice rendered to the corporation." Thus, the lawyer was Ethically bound to preserve against disclosure the confidences and secrets of the president of the corporation unless some exception to that general rule permitted disclosure.

The Committee detailed a lengthy list of exceptions to client confidentiality. It is important for Arizona trial lawyers to recall that this list may not be applicable in light of the significant change in Arizona's version of ER 1.6 adopted in 1984.

The Conflict between Candor and Confidentiality

The essence of trial lawyering is to present the case so as to persuade the trier of fact that the client's position is correct. The pursuit of that goal, however, is subordinate to the trial lawyer's duty of candor to the tribunal.

Most lawyers believe that client perjury is the most serious Ethical dilemma that a lawyer can face. As such, it is treated more specifically in pages 72 through 79 infra. The broader discussion, here, presents the problems faced by the trial lawyer regarding candor in court. There are two important Ethical rules regarding client confidentiality and candor to the court. Client confidentiality is controlled by Ethical Rule 1.6 which prohibits the disclosure of client information pertinent to the representation. Candor to the court is controlled by Ethical Rule 3.3, which prohibits trial lawyers from making false statements, failing to disclose material facts, failing to disclose controlling legal authority, and offering evidence known to be false.

ER 3.3 Trumps ER 1.6

On occasion the trial lawyer will have to deal with a conflict between his duty of candor to the court and his duty of confidentiality to the client. When that occurs, it is critical to recall that E.R. 3.3 trumps E.R. 1.6.

The Comment to Ethical Rule 3.3 states that trial lawyers, while responsible for pleadings and other documents, are usually not required to vouch for the evidence. The court is responsible for assessing the probative value of all trial evidence. The trial lawyer is not required to have personal knowledge of the matters asserted in those pleadings. Litigation documents ordinarily present assertions by clients, not assertions by the trial lawyer. Thus, the submission of a "false statement" in testimony during trial is not necessarily a violation of Ethical Rule 3.3 unless it rises to the level of an assertion by the trial lawyer.

While the problem of "false evidence" is rare, it is nevertheless relatively easy to resolve from an Ethical standpoint. When evidence that a lawyer knows to be false is provided by a person who is not the client, the lawyer must refuse to offer it regardless of the client's wishes. The temporal relationship between offering the false evidence and learning of its falsity is vitally important in assessing the Ethical obligation of the trial lawyer. A practical time limit on the obligation to rectify the presentation of false evidence is established in the Comment 13 to Ethical Rule 3.3. The conclusion of the proceeding is said to be a reasonably definite point for the termination of the obligation to rectify the presentation of false evidence.

False Evidence

A lawyer must refuse to offer proof which he or she "believes" to be false. The Preamble to the Ethical Rules defines "belief" or "believes" as a term that denotes that the person involved actually supposed the fact in question to be true. A person's belief may be inferred from circumstances. In that context, a trial lawyer has the authority to refuse to offer testimony or other proof that the lawyer believes is not trustworthy. The basis for such authority is that offering such proof may reflect adversely on the lawyer's ability to discriminate in the quality of evidence and thus impair the lawyer's effectiveness as an advocate. Of course, in criminal cases, a lawyer may be denied this authority by constitutional requirements governing the right to counsel.

One of the more acute problems for the trial lawyer involves legal argument by opposing counsel which appears to be not only legally unsound but is in fact a "false" representation of the law. Such conduct constitutes dishonesty toward the tribunal and is clearly prohibited by Ethical 3.3. This does not mean that trial lawyers are expected to offer disinterested expositions of the law but that they must recognize and candidly present pertinent controlling legal authority.

A lawyer generally has a duty to disclose material facts to the court if a failure to disclose would further a fraud upon the court. The Arizona Ethics Committee opined that if a plaintiff's lawyer learned that the defendant had offered a witness a bribe to testify in his favor in a civil collection action, the plaintiff's lawyer had an Ethical obligation to report the defendant's conduct to the appropriate law enforcement agency. The Rhode Island Ethics Committee, on the other hands, permits, but does not require disclosure. And the New Hampshire Ethics Committee would prevent an attorney from disclosing suspicions that a third party has offered false evidence to a tribunal if the disclosure is against the client’s wishes.

In one of the few decisions directly considering a counsel's attempts to deceive a court, a lawyer attempted to avoid discipline by arguing that his deceitful practices were common among other Arizona attorneys. The court held that the fact that other members of the bar would use similar deceitful practices provided no excuse and did not alter the fact that they were unlawful and professionally improper. The court volunteered that employment of any such practices by other lawyers subjected the other lawyers to discipline.


Client’s Promise to Lie to the Court

The lawyer's obligation to law enforcement agencies regarding a client's "future proposed action" is complex Ethically and morally. In Arizona Ethics Opinion 79-4, the inquiring attorney undertook representation of a client on a misdemeanor charge. The client told the attorney that a serious felony charge might be filed against him in the near future. The lawyer and the client discussed the general mechanics of criminal cases in Arizona and otherwise addressed the client's worries about the anticipated felony arrest. The attorney mentioned to the client that at some date the authorities might offer him a plea bargain in exchange for information. The attorney asked the client whether there were any circumstances under which he would be willing to cooperate with the authorities, give them information, and enter into a plea bargain agreement. The client responded: "If things get real bad, I will go to the authorities and give them my story." The attorney asked: "Then you would be willing to cooperate with the authorities?" The client responded: "I would cooperate but it would not be the truth." As a result, the attorney told the client that he would not represent him on the anticipated felony charge or on the misdemeanor charge. Several months later, the inquiring attorney discovered that his former client had entered into a plea bargain "apparently" in exchange for testifying against other persons allegedly involved in the crime. After the trial court accepted the plea bargain, the former client testified for the prosecution, which led to the implicated persons being found guilty by the trial jury.

The Committee opined that the inquiring attorney was not under any Ethical obligation to reveal to the court, the prosecutor, or the defense counsel for the implicated defendants the former client's earlier revelation. It reasoned that, under the specific facts presented, the "waiver" which would allow a lawyer to reveal client confidences under DR 4-101 (the predecessor to Ethical Rule 1.6) had not been satisfied. The client's statement to the inquiring attorney did not clearly establish that the client intended to or did perpetrate a fraud. The statement preceded the client's even being charged with the crime. Further, the passage of time and the change in circumstances may have altered his attitude toward cooperating with the authorities. As far as the Committee could ascertain, the client may well have entered into a plea bargain which was totally truthful.

Additionally, the Committee stated that, if the inquiring attorney's client had perpetrated a fraud upon the tribunal, it was not perpetrated in the course of the inquiring attorney's representation of the client. The Committee referred to its prior Opinion 71-3, which required disclosure of client confidence only when "the facts in the attorney's possession indicate beyond reasonable doubt that a crime will be committed." In conclusion, the Committee said:

In light of all the above authorities and our review of the Code of Professional Responsibility, it is the conclusion of this Committee that the inquiring attorney removed himself from the troublesome situation of being required at some future date to perhaps violate the attorney-client privilege, by withdrawing from the case at a time prior to the existence of any obligation upon him to reveal the statement of his client to the court. As such, he has committed no Ethical violation in not revealing the statement of his former client to the court or counsel.

Perhaps the principal lesson of Opinion 79-4 is that the temporal relationship between learning potentially fraudulent information and the obligation to reveal that information is of paramount importance. A lawyer must exercise good judgment to avoid situations in which he or she must balance the obligation to preserve client confidences with the obligation to report client frauds or deceptions.

Clients Using False Names

In a related opinion (Opinion 79-7), a criminal defendant, formerly represented by a public defender in a different action, was rearrested on new charges. Interestingly, the bench warrant was issued under an alias the client had employed. The client requested that his attorney, a public defender from the same office which had represented him earlier, not divulge his true name to the court.

The Committee concluded that whether to reveal the client's true identity presented a question of law which they could not answer. If the inquiring attorney determined that the information indicated an intent to commit a future crime, he would not be required to keep the confidence. On the other hand, if he determined that the information involved only a past or "continuing crime" then he should not breach his client's confidence.

ABA Opinion 282 : Who is the Client?

The initial question must always be: "Who is the client?" One of the first, and still fundamentally persuasive, answers to this question was provided by the ABA Standing Committee on Professional Conduct in its Formal Opinion 282, issued in 1950. Opinion 282 accepts unequivocally that a lawyer may Ethically represent both the insurer and the insured in the defense of a third-party action against the insured. The opinion is predicated upon the initial commonality of interest:

From an analysis of their respective undertakings [in the insurance contract] it is evident at the outset that a community of interest exists between the company and the insured growing out of the contract of insurance with respect to any action brought by a third person against the insured within the policy limitations. The company and the insured are virtually one in their common interest.

Opinion 282 states clearly that "the essential point of ethics involved is that the lawyer so employed shall represent the insured as his client with undivided fidelity." Beyond the initial commonality of interest, all courts and all opinions subsequent to ABA Formal Opinion 282 share one dogma: If "differing interests" of the insurer and the insured arise, then the lawyer's Ethical duty of undivided loyalty to the client is owed only to the insured.

Waiver of the Privilege

The "waiver rules" regarding client confidentiality are explicitly set forth in Ethical Rule 1.6. The most significant is found in Ethical Rule 1.6(a), which allows disclosures that are "impliedly authorized in order to carry out the representation." Subparagraphs (b), (1), and (2) waive client confidentiality regarding criminal acts that the lawyer believes is likely to result in imminent death or substantial bodily harm; and information that the lawyer reasonably believes necessary to establish a claim or defense on behalf of the lawyer in client controversies, civil or criminal charges against the lawyer, or disciplinary proceedings concerning the lawyer's representation.

The waiver of confidentiality issue often arises within the context of defense counsel retained by an insurance company on behalf of its insured. In Arizona Ethics Opinion 79-16, the trial lawyer had been retained by the carrier to provide a defense on behalf of its insured in a case involving property damages for loss of a building.

The underlying loss resulted from negligent operation of a tractor in the building where the fire occurred. The defendant told his lawyer that certain information given by him to his insurance company was incorrect but was given in order to invoke insurance coverage. Presumably, if the insurance company knew the true facts, coverage would be withdrawn. The client's deposition was taken and he never explicitly testified to the "true facts." The logical inference from the deposition testimony was consistent with the original information given by the insured to his insurance company for the purpose of invoking coverage.

The Committee opined that the lawyer could not demand that his client inform the insurance company of the "true facts" relating to coverage. They also said that he must withdraw as counsel in the case, by reason of the ruling of the Arizona Supreme Court in Parsons v. Continental National American Group. The Committee advised that the lawyer could not give detailed information to the carrier as to why he was withdrawing his counsel. While the Committee could not render advice with regard to the reasons to be given for the withdrawal, the Committee did state: "It is submitted that a simple statement that an irreconcilable conflict has arisen without further elaboration should be sufficient."

With respect to the issue of reporting on the client's deposition, the Committee noted that the most appropriate means for handling this problem would normally be simply to provide the insurance company a copy of the transcript. On this point the Committee cautioned:

It would, however, be inappropriate for [the retained defense counsel] to comment on the "inferences" which might defeat coverage. The transcript of the deposition may or may not be a public record, depending on local rules of practice relative to "sealing" of deposition transcripts. At any rate, no confidence would be disclosed by this procedure.

Federal Attorney- Client Privileges

When the Federal Rules of Evidence were approved by Congress, none of the thirteen rules dealing with evidentiary privileges was enacted. Proposed Federal Rule of Evidence 511 states as follows:

A person upon whom these rules confer a privilege against disclosure of the confidential matter or communication waives the privilege if he or his predecessor while holder of the privilege voluntarily discloses or consents to disclosure of any significant part of the matter or communication. This rule does not apply if the disclosure is itself a privileged communication.

The reasons for non-enactment of proposed Federal Rule of Evidence 511 did not reflect on the merits of the proposed rule, which is considered a fair summary of the law in most states.

The Corporate Attorney-Client Privilege

Any discussion of the nature, extent and duration of a privilege between a corporation and its in-house counsel must begin with Arizona’s famous Samaritan Foundation v. Superior Court. In Samaritan, a child suffered a cardiac arrest in surgery and was left neurologically impaired. Shortly after surgery, at the direction of the hospital's legal department, a nurse paralegal interviewed four operating room witnesses, all employees of the hospital. When the hospital was sued for negligence, the paralegal's interview summaries became the subject of a discovery dispute. The hospital objected to their disclosure, claiming that the statements were absolutely protected by the attorney-client privilege and as work product.

The Samaritan court rejected each of the hospital's contentions. With respect to the work product argument, the summaries were prepared in anticipation of litigation. Save for the mental impressions contained in the summaries, which could be properly reacted by the court during in camera inspection, the factual statements in the summaries were discoverable upon plaintiffs' showing of substantial need.

The court's holding regarding the attorney-client privilege came as a surprise and further confounds an already confusing area of the law. The court rejected the United States Supreme Court's definition in Upjohn of the attorney-client privilege as being too expansive. The Upjohn court held that the lawyer-client privilege extended beyond the "control group" employees of a corporation; it should also apply to those "middle-level" and "indeed lower-level" employees whose actions within the scope of their employment could "embroil the corporation in serious legal difficulties."

Departing from Upjohn, Justice Martone wrote for the Samaritan court that the traditional "control group" test is too narrow. The control group test omits from the privilege communications by noncontrol group employees that should be protected. On the other hand, the control group test is too broad because it includes in the privilege employees who are "mere witnesses."

The Samaritan court held:

[W]here an investigation is initiated by the corporation, factual communications from corporate employees to corporate counsel are within the corporation's privilege only if they concern the employee's own conduct within the scope of his or her employment and are made to assist counsel in assessing or responding to the legal consequences of that conduct for the corporate client.

Samaritan is important because it represents a compromise between the "Upjohn" and "control group" cases in attempting to define the precise extent of the corporate attorney-privilege in a litigation context. The decision makes clear that employees who seek advice from corporate counsel can rely on the traditional privilege of confidentiality. However, if a corporate representative seeks out that employee and initiates the conversation, the traditional privilege will apply only if it concerns the employee's own conduct and the conversation is made to assist counsel in assessing or responding to the consequences of the employee's conduct. The teaching point in the case is the clear doctrine that conversations with employees by corporate lawyers about the conduct of some other person are not privileged. Those conversations might be protected under a work product claim but not as confidential communications under Ethical Rule 1.6 or the traditional evidentiary attorney-client privilege. The court recognized the importance of the issue, stating "Unless the privilege is known to exist at the time the communication is made, it will not promote candor."

Note that in defining the scope of the attorney-client privilege, the Samaritan court tacitly defines the scope of the attorney-client relationship. Consequently, the court limited the scope of the absolute protection accorded between attorney and client to those individuals in the control group. This aspect of the Samaritan holding is fundamentally at odds with the Lang decision and Ethical Rule 4.2. Under the Lang rationale, the definition of a party includes not only those individuals in an organization's control group but also those individuals that may bind the organization or whose acts or omissions spurred the subject litigation. This is the same rationale supporting the Supreme Court's decision in Upjohn that is rejected in Samaritan.

In a rare but focused exercise of its power, the Arizona Legislature directly countermanded Samaritan by passing a bill that overrules the portions of the opinion dealing with the corporate-attorney-client privilege (but not affecting the work-product privilege).

The legislative version (A.R.S. &12-2234) of the corporate-attorney-client privilege is broad but unclear and, perhaps, unconstitutional. The statutory privilege is very broad and applies to any communication:

The new statutory privilege applies only to civil actions. The attorney client privilege for criminal matters is recognized in other Arizona statutes. A constitutional scholar has observed that Arizona’s new statutory privilege has no application to criminal cases and, arguably, Samaritan provides the appropriate test such cases.

The Crime-Fraud Exception

Understanding the so-called "crime-fraud" exception requires a refresher on E.R. 1.6 which forbids disclosure of confidential information regarding past crimes or fraud. For example, the statement by the lawyer who brought his client to the police station and said that his client had shot his wife and that the gun was at their apartment was inadmissible at the trial of the client. The client had not waived the attorney-client privilege and the lawyer had not been "used" in perpetrating the crime. Although a lawyer cannot knowingly permit his advice to be used to further a crime or a fraudulent scheme, he may not disclose past crimes or frauds unknown to him at the time his services were used.

One of the pivotal issues regarding the crime-fraud exception is whether lawyers ought to be required to "rectify the consequences of a client’s criminal or fraudulent act in the commission of which the lawyer’s services have been used." The ABA has addressed the idea of rectification. The ABA’s position is:

With respect to future frauds and crimes, withdrawal is mandatory. A lawyer must withdraw if his services will be used by the client in materially furthering a course of criminal or fraudulent conduct.

Because a lawyer may not reveal confidences about past misconduct outside the context of a tribunal, but is required by E.R. 4.1(b) to disclose confidential information about contemporaneous or prospective conduct to avoid assisting a client’s criminal or fraudulent act, the determination of when client conduct is "past" or "completed" is crucial.

In short, the attorney-client privilege does not apply and does not exist to protect the client when the lawyer is consulted to further a continuing or contemplated criminal or fraudulent scheme. This is the "crime-fraud" exception.

In an important 1996 case, the crime-fraud exception was utilized to defeat an assertion of the corporate-attorney-client privilege. In this case two former lawyers employed as in-house counsel were compelled to testify about internal communications concerning an employees immigration status and internal communications regarding the employee’s compensation. The corporate-employer attempted to quash the subpoena citing attorney-client privilege. The prosecutor opposed the motion, arguing that the testimony of the lawyers fell within the crime-fraud exception.

In upholding the subpoena, the Ninth Circuit emphasized that the lawyer’s knowledge, state of mind or actions are irrelevant. The correct focus is that of the client. The lawyer need not be aware of the illegality involved. It is enough if the lawyer’s communication furthered, or was intended to further, the illegality.

While there is a societal interest in enabling clients to obtain complete and accurate legal advice there is no such interest when the client consults the lawyer to further the commission of a crime or to perpetrate a fraud.

Lawyer Participation in Client Perjury

In In re Hoover, the Arizona Supreme Court dealt with the clearest form of falsifying evidence—the lawyer directly participating in the falsehood. The court suspended a lawyer who offered evidence that his client was a resident of Arizona for purposes of initiating a divorce proceeding. The lawyer had information in his possession that proved that the client was not an Arizona resident. The court reasoned that a lawyer's anxiety and zeal in representing a client could not excuse false representations to a court.

Lawyer Participation in Client’s Fraudulent Misconduct

In a more subtle treatment of this issue, the court in In re American Continental Corp./Lincoln Savings & Loan Securities Litigation, denied summary judgment for a law firm that allegedly participated in securities fraud, RICO violations, and common-law fraud. Summary judgment was inappropriate because there was evidence that the lawyers knew that the savings and loan client was involved in deceitful and fraudulent conduct. Moreover, there was evidence that the law firm provided hands-on assistance in hiding loan file deficiencies from federal regulators, offered detailed advice about setting up bond sales programs, and provided other services perpetuating the client's fraudulent activity. The court reasoned that the firm had a duty to withdraw as counsel under Ethical Rule 1.16 because the client's activity forced the firm to violate the Rules of Professional Conduct and laws prohibiting objectionable activity.

The well-advised trial lawyer must seek truthful and accurate information at the onset of the attorney-client relationship. The lawyer who ignores false or fraudulent information not only faces the danger of ethical censure but may also be pulled into the web of the client's criminal conduct. Zeal and anxiety of representation cannot excuse perpetuating a fraud on the court or fraud toward others.

The most recent ABA Formal Opinion on this issue arises from the regulatory efforts by the federal government over savings and loan associations and their lawyers. In this opinion the ABA concluded that

. . . [I]n representing a client in a bank examination, a lawyer may not under any circumstances lie to or mislead agency officials, either by affirmative misstatement or by omitting a material fact necessary to assure that statements made are not false and misleading.

The ABA noted in the above opinion that counsel was under no duty to disclose weaknesses in the client's case or otherwise to reveal confidential information that would be protected under Ethical Rule 1.6. At the same time, the lawyer may not be a party to a fraud on the part of the client. The opinion discusses the interrelationship of the rules dealing with client confidentiality, candor to the court, and truthfulness by trial counsel.

Revealing Client’s Purported Perjury

In Nix v. Whiteside, the Supreme Court held that threats to withdraw or to reveal perjury do not prejudice a client's constitutional rights to testify and have effective counsel. Although the holding was based upon the finding that the client's rights were not prejudiced, the decision provides persuasive authority that a lawyer should seek to withdraw or rectify false testimony if the client insists on committing perjury.

There is little agreement over whether withdrawal is mandatory and whether a trial lawyer may disclose the reasons for withdrawal. Several courts require withdrawal if the client is intent on offering perjured testimony, an approach which has its pitfalls. The mere mention of withdrawal may signal the court that the client intends to engage in improper conduct. Arguably, this might breach the lawyer's duty to preserve confidences of a client. Withdrawal also creates serious problems for the client, including undue prejudice, the possibility of double jeopardy, and the danger of a similar dilemma facing the client's new lawyer.

If a request for withdrawal is denied, there are four different approaches that a lawyer may take. First, the trial lawyer may disclose the proposed perjury to the judge. In accordance with the Whiteside majority's interpretation of the Ethical Code and Ethical Rules, a lawyer not permitted to withdraw and faced with a client who cannot be dissuaded from committing perjury must disclose the proposed conduct to the court. Although a defendant has a right to testify and a right to effective assistance of counsel, a defendant does not have the right to expect counsel to assist in presenting perjured testimony. Two appellate court decisions accord with this position. Both courts commended counsel for acting in a professional manner by first attempting to withdraw from representation and then disclosing the defendant's intention to commit perjury.

Some jurisdictions take a contrary position and do not allow the lawyer to disclose the prospective perjury when denied withdrawal, finding Whiteside unpersuasive. It is certainly a valid position that the Ethical Rules and Ethical Code do not allow revelation of a defendant's proposed perjury. There is also concern that disclosure would destroy judicial impartiality and require the lawyer to reveal a client confidence.

Although unresolved by Arizona courts, mandatory withdrawal seems to be the correct course of action in that state. Arizona maintains a unique version of Ethical Rule 1.6, which allows revelation of intended future criminal conduct. Unlike the ABA's Ethical Rules of Professional Conduct, there is no Arizona qualification that the lawyer only reveal prospective crimes threatening life or limb.

The only directly pertinent Arizona case addresses witness perjury rather than defendant perjury. In State v. Lee, the court held that a defendant did not have a constitutional right to a witness's perjured testimony. The trial lawyer, not the client, must decide which witnesses will testify at trial. If counsel refuses to call a witness because he or she fears the witness will testify falsely, defendant's constitutional right of effective counsel is not violated.

The Connecticut Ethics Committee opined that when an attorney reasonably believes a criminal defense client intends to commit perjury, the attorney is permitted--but not required--to refuse to offer evidence believed to be false. Disclosure of the prospective perjury is not, however, an Ethical alternative. The attorney should discuss the matter with the client, attempt to dissuade the client form committing perjury, and explain an attorney’s duties regarding false testimony. If the client persists, the attorney must attempt to withdraw from representation. The Committee further held , however, that if the attorney is not permitted to withdraw, the client may be allowed to testify in narrative form, and the attorney should advise the court that counsel will be unable to conduct an examination.

The Connecticut approach represents another method of dealing with prospective client perjury. Prior to Whiteside, the narrative approach was the preferred method of coping with client perjury. When faced with the threat of perjury, the lawyer would ask the defendant to testify in narrative fashion without the aid of direct examination. The approach affords the defendant the right to testify and allows the lawyer to refrain from active participation in the perjury. Before 1986, several jurisdictions endorsed the narrative approach.

ABA Opinion 87-353: Lawyer Must Seek Withdrawal and Then Disclose the Perjurious Testimony of Client

The problem with the narrative approach is that it may undermine the lawyer's duty to offer effective assistance of counsel. This is the conclusion reached by ABA Formal Opinion 87-353. There, the ABA reasoned that under Ethical Rule 3.3(a)(2), when read in conjunction with Whiteside, the narrative approach no longer insulates a lawyer from a charge of assisting perjury. As noted, the Whiteside court held that, under the Ethical Rules and the Ethical Code, the lawyer must seek withdrawal and then disclose the perjurious testimony if necessary.

The third approach to combating client perjury when withdrawal is denied calls for the lawyer to "fully" represent the defendant. The lawyer makes no explicit or implicit reference to the perjury. This view emphasizes confidentiality over candor toward the tribunal.

Although endorsed by various courts and commentators, this approach is not without its detractors. Some argue that the allowance of perjurious testimony makes the lawyer guilty of subornation of perjury. The approach also distinguishes between past and prospective perjury, and generally prohibits revelation of a client's confidence without the client's knowing and voluntary consent. Although controversial, the approach may be the most widely utilized by criminal defense attorneys.

The American Bar Association endorses the final approach to dealing with prospective defendant perjury. Under that approach, the lawyer can refuse to place the defendant on the stand and, if forced to do so by the court, can reveal the perjury. This view is the same as the "prospective perjury instances" arising in civil cases.

The Disclosure Rules in Civil Cases

The 1991 amendments to Arizona's rules of discovery have created considerable controversy over what types of information are ripe for discovery. The application of the new mandatory disclosure rules to witness statements is no exception. One of the more significant problems is the inability of many trial lawyers to distinguish between information obtained from lay witnesses and information obtained from their clients. All trial lawyers understand that information from witnesses is not "protected by the privilege." Unfortunately, some of those same lawyers believe that if the information comes from the client, it need not be disclosed. The fundamental problem is the inability to distinguish between the "fact" acquired in confidence and what you do with the "fact" after it is acquired.

In accordance with Rule 26.1 of the Arizona Rules of Civil Procedure (The Disclosure Statement), counsel is required to disclose the names of all witnesses to a contested matter and disclose the subject matter of each witness's expected testimony. In addition, the trial lawyer must disclose all witness statements taken and the custodian of the particular statements. Hence, in accordance with these requirements, save for the pure legal impressions possibly contained in a witness statement, opposing counsel is entitled to witness statements.

The lawyer can still argue that witness statements prepared in anticipation of litigation are work product and that discovery is only justified if opposing counsel could present some substantial need. Although, the argument remains intact, the factual nature of most witness statements and the requirements of disclosure render the argument moot. The reality of the new rules is that opposing counsel is entitled to much, if not all, of the information contained in a witness statement.

Aside from discovery by opposing counsel, the trial lawyer should realize that a witness has an absolute right to discover his or her own witness statement.

Arizona’s Unique Rule: The Duty to Preserve the Integrity of the System Prevails Over the Duty of Confidentiality

Due to unique aspects of Arizona's rendition of Ethical Rule of Professional Conduct 1.6, the trial lawyer may have an option in such situation not available in other jurisdictions. In accordance with Arizona's ER 1.6, the lawyer may reveal a client's proposed criminal conduct even if it does not involve a threat of serious bodily harm or injury to others. In addition, revelation of prospective crimes threatening life or limb must be revealed. This is a large deviation from the ABA's Ethical Rules and the Code of Professional Responsibility, which only permit revealing life or serious injury threatening crimes. In Arizona, therefore, the lawyer's duty to preserve the integrity of the judicial system prevails over the duty of confidentiality.

Note, however, that the lawyer may only reveal the threat of future crimes, not past crimes. In the above scenario, the revelation of the perjury comes just after a trial verdict. There is presumably some work yet to be done, e.g., the judgment must be submitted, collection proceedings may follow, or an appeal may follow. Even at this late point in the process, the lawyer must withdraw from representation to avoid knowingly participating in perpetrating a fraud on the court. Ethical Rule 1.16 requires the lawyer to withdraw if representation results in a violation of the Rules of Professional Conduct or some other law.

When the client hires a new lawyer and tries to perfect and collect on the judgment, the permissive revelation of future crimes language of Ethical Rule 1.6 becomes applicable. The lawyer may then choose to reveal the past perjury because the client intends to use the "falsely obtained" judgment in committing a future crime.

If the lawyer learns of client perjury after the representation is terminated or if the client's future actions with respect to the matter do not amount to criminal conduct, the lawyer cannot reveal the past perjury. Although there is contrary authority in other jurisdictions and in early Arizona Ethics Opinions, the lawyer's duty of confidentiality trumps any duty to reveal the client's commission of past crimes.

Arizona Ethics Committee Opinions Regarding Confidentiality

The Arizona Ethics committee has issued scores of opinions regarding client confidentiality in the last thirty years. The following is a list of the opinions in chronological order. The list is not intended to be a full brief of the committee’s holding or its reasoning. It is intended merely as a resource for identifying opinions which may be helpful to the reader.

Opinion 65 (November 10, 1960): Lawyers are not obligated to reveal the whereabouts of clients to a law enforcement agency merely because a felony charge have been filed and where the client is not under arrest.

Opinion 259 (October 24, 1968): A lawyer may not reveal his clients name to a law enforcement agency even where he has funds in his trust account to be disbursed on client's order to the bearer of client's note who was later found to be an escaped felon. The identity of the client is still a privileged communication.

Opinion 71-5: Lawyer’s general obligations regarding disclosure of address of client to authorities.

Opinion 71-11: Lawyer’s obligations regarding giving deposition testimony as to clients’ business.

Opinion 72-19: Lawyer who receives mail from his client who is a prisoner may honor request to forward mail to other persons. Lawyer cannot reveal request to authorities.

Opinion 73-2: Lawyer’s obligations regarding response to FBI request regarding client’s location.

Opinion 74-9: A criminal defense lawyer received a confession from a client that the client had committed larceny but had accused another person of the larceny. The attorney inquired about the propriety of his testimony in defense of the other person to the effect that the attorney had received confidential communication from a client (whose identity would not be revealed) confessing the guilt of the larceny for which the other person was being tried. The Committee held that it was Ethically improper for the criminal defense lawyer to testify due to the probability that the client's identity would thereby be revealed and result in disadvantage to him.

Opinion 74-29: Criminal defense lawyer’s obligations where he receives confession from client.

Opinion 74-30: Criminal defense lawyer’s obligation to reveal client’s confession of "another" murder to prosecutor [see also 112 Ariz. 569].

Opinion 78-5: Lawyers duty to disclose facts concerning misconduct of officer of corporate client.

Opinion 78-11: Lawyer’s disclosure of client’s location following client’s disappearance just prior to sentencing on guilty verdict in criminal case.

Opinion 78-15: Lawyer’s obligation to court and client regarding client’s perjury in trial testimony.

Opinion 78-16: Insurance defense lawyer’s obligations to reveal possible fraud and collusion between plaintiff and defendant.

Opinion 78-38: No Ethical impropriety in an attorney withholding the identity of his client in the course of successful plea bargaining negotiations with the prosecutor on behalf of his unidentified client in a hit and run fatality case where the prosecutor had no evidence with which to charge anyone for the commission of the acts involved.

Opinion 79-4: Lawyer’s disclosure of former client’s comment indicating "lack of truth" in plea bargain offered by authorities.

Opinion 79-6: Lawyer’s obligations regarding withdrawal and disclosure regarding clients perjury.

Opinion 79-7: A criminal defendant, formerly represented by the Public Defender's Office, was rearrested on new charges under a different name. A bench warrant was issued for him under his previous alias. The client contacted his public defender lawyer and requested that the lawyer not divulge his true name to the court. The Committee opined that whether the public defender had an Ethical duty to advise the court of the presence of the person in the jurisdiction using a new alias and charged with new offenses depended upon whether the lawyer concluded that this information indicated the client's intent to commit a future crime (in which case disclosure would be permissible) or involved only a past or continuing crime (in which case he may not breach his client's confidence).

Opinion 79-24: Insurance defense lawyer’s obligation to withdraw where necessary disclosure would be detrimental to insured’s coverage.

Opinion 79-16: Insurance defense lawyer’s obligations regarding acquisition of information revealing lack of insurance coverage.

Opinion 80-4: Former Asst. Attorney General’s obligations of confidentiality in representation of client that grew out of litigation instituted by Attorney General’s Office.

Opinion 80-16: Lawyer who practices as a CPA and as an attorney must obtain the client’s consent after consultation to waive the attorney-client privilege.

Opinion 80-17: Attorney, learning through investigation made in his partner's representation of client B of contents of police report inculpating B in commission of murder of which attorney's client A has been accused, after firm's withdrawal from representation of both A and B, must disclose the existence of the police report to A's new attorney, it not being a "confidence" or "secret" of former client B.

Opinion 80-19: Employment of deputy county attorney by the Public Defenders Office despite fact that former deputy county attorney authored appellate brief in opposition to brief filed by Defender’s office.

Opinion 80-23: Lawyer’s duty to rectify client’s surreptitious copying of files of opposing counsel. [See also Opinion 80-27]

Opinion 80-25: Lawyer’s obligations to a client subjected to an assault while in county jail where lawyer’s partner represents the person charged with the assault in an unrelated matter. She may continue the representation because her partners representation was in an unrelated matter.

Opinion 81-09: Lawyer’s obligations regarding client confidences where the lawyer shares an office with other professionals in the real estate and accounting fields.

Opinion 81-22: Lawyer’s obligations when given a sealed envelope for safekeeping by client with instructions not to reveal the envelope’s content.

Opinion 82-05: Lawyers obligations regarding retention of confidential file information after termination of representation. Committee held it was sufficient for lawyers to send letters to clients saying files would be maintained for two years, moved to a storage facility for four years and destroyed at the end of six years.

Opinion 82-13: Lawyer in dissolution action on behalf of wife not required to reveal to IRS or other law enforcement agency husband’s secret concealment of assets.

Opinion 83-7: Lawyer’s obligations where initial information furnished by client differs from deposition testimony.

Opinion 83-14: Lawyer’s obligations where he comes into possession of file of opposing party.

Opinion 85-4: Lawyer obtaining possession of an important piece of physical evidence in criminal case must turn the evidence over to the prosecution.

Opinion 86-13: Lawyer who serves as Guardian Ad Litem and as counsel for minor child cannot waive child’s attorney-client privilege.

Opinion 87-3: Lawyer may fill out and file IRS form required for reporting receipt of more than $10,000 in cash (for fees).

Opinion 87-10: Lawyer’s obligation to withdraw if subpoenaed to testify about a prior conviction.

Opinion 87-19: Lawyer’s obligations regarding defense of juveniles where conversations between attorneys and clients are routinely monitored by detention personnel.

Opinion 87-22: Lawyer may not Ethically divulge the name and address of a former client to adverse parties if former client does not wish to have the information revealed even if the information appears in a public record.

Opinion 88-08: Lawyer’s obligation to withdraw where client obtains confidential information from opponent by use of surreptitious tape recording.

Opinion 89-04: Public Defender’s inability to represent a client where he obtained confidential information in his former position as a county attorney relating to the government’s position in the case. Consent required in a substantially related case.

Opinion 89-10: Guidelines regarding confidentiality of clients financial information when accepting credit cards for payment of legal fees and retainers.

Opinion 90-06: Lawyer’s obligations regarding entering into settlement agreements which purport to prohibit lawyer from representing certain client in future actions. Related issue of dismissal of Bar Complaints against other lawyers involved in the underlying case.

Opinion 90-12: Lawyer’s obligations where lawyer questions client’s capacity to act adequately in her own interest. Lawyer may seen medical advice and may disclose confidential information to diagnostician.

Opinion 91-01: Lawyer’s obligations regarding release, preservation or destruction of clients records and files where client cannot be located.

Opinion 91-02: Worker’s compensation attorney’s obligations to reveal fact that checks from insurance carrier are in an amount larger than the client is entitled to receive. Specific duty of confidentiality where client instructs lawyer not to reveal the apparent mistake to the compensation carrier.

Opinion 91-18: Lawyer’s obligations to disclose his client’s confidential communication threatening suicide at conclusion of law suit.

Opinion 92-02: Criminal defense lawyer’s obligations to reveal fact that client is using two different names in two different criminal proceedings.

Opinion 92-14: Law firm may not furnish a bank a list of its accounts receivable identifying the names of the clients and the amount each client owes unless the clients consent after seeking independent consultation.

Opinion 93-03: Lawyer may disclose confidential information to the extent necessary to refute former client’s public assertions that the lawyer engaged in misconduct.

Opinion 93-10: Lawyer’s obligation to advise court of potential client perjury.

Opinion 93-11: Lawyer may not institute criminal proceedings against former client who paid the fee with an "NSF" check.

Opinion 93-14: Lawyers obligations regarding receipt from client of a surreptitious tape recording made by client of opposing party and her attorney. Tape was acquired legally. Lawyer may review the contents of the tape; must safe guard the tape; and, must advise the client of the limitations on his conduct.

Opinion: 95-03: Lawyers general obligations regarding surreptitious tape recordings of conversations with opposing counsel. This conduct involves an element of deceit and misrepresentation and does not comport with Arizona ethics standards.

Opinion 95-04: Provisions in house-counsel’s severance agreement from employer may include restrictions on lawyers future practice of law if they do nothing more than reaffirm the restrictions contained in the lawyer’s duty of confidentiality to the client.

Opinion 95-11: Lawyers should use caution when talking to clients over cellular phones about confidential matters.