Marathons, Ethics, & Cover-Ups

Saturday mornings aren’t conducive to CLE-type posts on the hottest topic in legal ethics.  Especially unusually warm Saturday mornings that beg for a long run. So, before I hit the road, I thought I’d use  two of my favorite topics, running & ethics, to share a message that’s relevant to both attorney discipline and the attorney admissions process.

Like the law, running has its own code of ethics.  The rules & violations run the gamut from innocuous to the “disbarable.”  For example, it’s not cool to start up front if you know you’re going to finish near the back. The first quarter mile of any race is crowded. Faster runners get irritated, and risk injury, having to dodge someone ambling along, not to mention 3 friends ambling along side-by-side as they chat. But this merits only an admonition.

A more serious (and frequent) violation is the all-too-common instance in which a runner wears headphones during a race. Most races ban headphones for safety and insurance reasons.  Runners know this, but justify it by “I can’t run without music.”  True.  Nor can you hear someone asking to pass you or warn you that a car is coming.  Public reprimand.

Finally, like any other profession or activity in which people are involved, running includes cheaters.  How does a runner cheat?  Taking a shortcut. Or, giving a bib to someone who is faster and then using the result as their own.  Cheating often occurs in an attempt to secure a marathon time that qualifies for the Boston Marathon.  Cheating warrants suspension & disbarment.

Here’s what runner-cheats have in common with lawyers who violate the Rules of Professional Conduct or who lie on their applications for admission to the bar: the cover-up is worse than the crime.

There’s a website dedicated to ferreting out runners who cheat. It’s here. Earlier this week, I was struck by a post on a woman who cut the course at the Fort Lauderdale Half Marathon.

The woman apparently needed to finish in better than 1:24:00 in order to qualify for an elite group within her local running club.  So, she took a shortcut that reduced the distance from 13.1 miles to 11.65.  Then, she lost her mind.

Turns out, after taking the shortcut, she finished 2nd. Instead of simply going home, she stuck around and accepted the award for 2nd place.  Around the same time, race officials became suspicious after noticing that she ran the latter part of the race significantly faster than the early stages.  When confronted, the runner denied having cheated.  Then she really lost her mind.

In an attempt to prove that she’d run the full distance, the woman hopped on her bike and rode the course.  As she did, she turned on her GPS so that she’d have a record of having traversed the full race route.  Then, she posted her “award” and GPS data to social media sites, as well as to Strava, a site that runners use to post their workouts and race results.

Even when initially contacted by Marathon Investigation, the woman didn’t immediately fess up.  Not surprisingly though, the gig soon was up.

Her decision to cut the course was wrong.  But her actions following that decision were worse.

That’s how it goes in attorney discipline and attorney admissions.  A Lawyer who violates the rules, but accepts responsibility, is likely to receive a lesser sanction than the lawyer who commits the same violation but then denies it, blames someone else, or tries to make it look like it never happened.  Similarly, applicants for admission who are candid about their past are far more likely to be approved by the Character & Fitness Committee than the applicant who fails to disclose conduct that,  inevitably, will be discovered in the review process.

In each instance, it’s true no matter how minor the violation or the misdeed left off the bar application.  The violation or misdeed is not the issue: it’s the decision to justify it or try to hide it that is.

So, that’s my tips for lawyers and bar applicants.  If you do something wrong, own it. Life will go on.  Not only that, life will go on in a way that turns out better for you than if you try to cover up conduct that will eventually be discovered.

running-shoe

SEO, Keywords, & Honesty

I’m not sure what to make of this one.

Last month, the Professional Ethics Committee for the State Bar of Texas issued Opinion 661.

The Committee concluded that

  • “A lawyer does not violate the Texas Disciplinary Rules of Professional Conduct by simply using the name of a competing lawyer or law firm as a keyword in the implementation of an advertising service offered by a major search-engine company.”

What’s that mean?

  • I interrupt this  blog to remind you that I first posted on tech competence HERE . Now, back to your regularly scheduled programming.

In an oversimplified nutshell, it means this.

Let’s say I have a family law practice in South Burlington.  Let’s also say that the most well-known and sought after family law attorney in Chittenden County is Rochester Flyte.  How do I drive traffic to my website? I know: competitive keyword advertising. Using search engine optimization, I’ll buy keywords from Big Search Engine.  I buy the keywords you’d expect:

  • “divorce”
  • “attorney”
  • “lawyer”
  • “family law”
  • “Burlington”
  • “Chittenden County”
  • “Vermont”
  • and all combinations of the above

Then, I buy one more phrase: “Rochester Flyte.”

So, when someone uses Big Search Engine to search “Rochester Flyte divorce attorney Burlington,” my website appears very high on the list of results, if not first.

Per the Texas opinion, I did nothing wrong.  Eric Goldman is a Professor of Law at Santa Clara University Law School.  He agrees.

The Texas Committee stated that in its opinion:

  • “the use of a competitor’s name as a keyword in the factual circumstances here considered would not in normal circumstances violate [the rules]. The advertisement that results from the use of [Rochester Flyte’s] name does not state that [Mike Kennedy & Rochester Flyte] are partners, shareholders, or associates of each other. Moreover, since a person familiar enough with the internet to use a search engine to seek a lawyer should be aware that there are advertisements presented on web pages showing search results, it appears highly unlikely that a reasonable person using an internet search engine would be misled into thinking that every search result indicates that a lawyer shown in the list of search results has some type of relationship with the lawyer whose name was used in the search.” Opinion 661, pp. 2-3.

In concluding that such conduct isn’t dishonest, deceptive, deceitful or fraudulent, the Texas Committee appears to have been swayed by the theory that “every other business allows it, so we should too,” noting that:

  • “[i]n the opinion of the Committee, given the general use by all sorts of businesses of names of competing businesses as keywords in search-engine advertising, such use by Texas lawyers in their advertising is neither dishonest nor fraudulent nor deceitful and does not involve misrepresentation.” Opinion 661, p. 3.

Texas reached the opposite conclusion as North Carolina.

  • Another interruption.  Many of you know I like basketball. Well, I’m no fan of Carolina basketball.  So any blog that compares opinions of the Texas and North Carolina state bars will include a reminder that Texas, led by one of my favorite coaches, Shaka Smart, took down UNC last December – the buzzer-beater portending another in Carolina’s future.

In 2010, the North Carolina State Bar issued Formal Ethics Opinion 14.   In the Tar Heel state, where my father lives and to which I’m more and more attracted each day, it would be unethical for me purchase the “Rochester Flyte” keywords.  Why?  Well, as the NC State Bar concluded:

  • “[i]t is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. Rule 8.4(c). Dishonest conduct includes conduct that shows a lack of fairness or straightforwardness. See In the Matter of Shorter, 570 A.2d 760, 767-68 (DC App. 1990). The intentional purchase of the recognition associated with one lawyer’s name to direct consumers to a competing lawyer’s website is neither fair nor straightforward. Therefore, it is a violation of Rule 8.4(c) for a lawyer to select another lawyer’s name to be used in his own keyword advertising.”

So, there you have it.  I’m not sure what makes me hesitant about allowing Lawyer A to buy Lawyer B’s name as a keywords in an SEO marketing campaign.  Indeed, people like Professor Goldman are far smarter & more informed than I on this issue (and probably many others).

Still, it just doesn’t feel right.  The Texas opinion stresses that it’s okay as long as my website isn’t misleading or otherwise dishonest once visited by the person who searched “Rochester Flyte divorce burlington.”.  But I tricked him into getting there….or did I?

Taking the interet out of it, imagine that I rented an office around the corner from Rochester Flyte’s.  And that I put up a sign in front of his that said “law office around the corner.”  Imagine that people searching for Flyte’s office followed the sign and ended up at my office.  Would that be okay merely because I truthfully & honestly identified myself once they arrived?

Maybe.  Maybe not. Or maybe it’s a terrible analogy. I don’t know.

Which is where I am on this issue: I just don’t know. To be clear, I haven’t exactly informed myself.  Besides the Texas and North Carolina opinions, the only thing I’ve read on point is one entry Professor Goldman’s blog. I suppose that, in the end, Professor Goldman will sway me.  After all, as a former point guard, I’m susceptible to being swayed by anyone associated with the school Steve Nash attended.  But, for now, I don’t know what to think.

Which is what many of you have been saying for years.

Puffery: Ethics of Negotiations

Let’s be honest, the only reason I’m blogging about this is so I can use the word “puffery.”  It makes me laugh.

So, this is a topic that came up often when we had the “professionalism” rule. I remember two or three CLEs where we discussed the line between puffery & lying.  The question we addressed: does a lawyer violate the ethics rules by intentionally misstating a client’s bottom line?

We talked about it in several contexts: the plaintiff’s attorney who knows her client will accept $100,000 but who states that her client “won’t go below $200,000.”  The criminal defense attorney who knows his client will take a plea that includes jail time, but who tells a deputy state’s attorney “if your offer is anything more than probation, we’re going to trial.”  You get the picture.

Rule 4.1 states that “[i]n the course of representing a client a lawyer shall not knowingly make a false statement of material fact to a third person.”  I’d argue that opposing counsel is a “third person.”  However, if it could talk, Comment [2] might disagree with me.  Comment [2]:

  • “This rule refers to statements of fact.  Whether a particular statement should be construed as one of fact can depend on the circumstances.  Under generally accepted conventions in negotiations, certain types of statements ordinarily are not taken as statements of material fact. Estimates of price or value placed on the subject of a transaction and a party’s intentions as to an acceptable settlement of a claim are ordinarily in this category, and so is the existence of an undisclosed principal except where nondisclosure of the principal would constitute fraud. Lawyers should be mindful of their obligations under applicable law to avoid criminal and tortious misrepresentation.”

I’ve often kidded, but only half-jokingly, that the Comment really means that it’s okay to lie to other lawyers.  As long as you stop short of fraud and breaking the law.

There’s also Rule 8.4(c), which prohibits lawyers from engaging in conduct involving dishonest, deceit, misrepresentation, and fraud.  And don’t forget about the duty of candor to a tribunal imposed by Rule 3.3.

Here’s an interesting advisory ethics opinion from the State Bar of California.  Some outlets are touting the opinion as giving the green light to puffery in negotiations.  I suppose that’s a fair reading of an aspect of the opinion. However, if that’s your only takeaway, it’s a reading that ignores the first two sentences of the opinion’s digest:

  • “Statements made by counsel during negotiations are subject to those rules prohibiting an attorney from engaging in dishonesty, deceit or collusion. Thus, it is improper for an attorney to make false statements of fact or implicit misrepresentations of material fact during negotiations.”

I think the opinion provides a sound analysis of when puffery becomes a violation of the rules.

So, that’s the end of this blog.  But, if you don’t have time to read the entire California opinion, I will now paste in each fact scenario that it raises, followed immediately by the Cal State Bar’s answer.  To be clear, this  IS NOT the sequential order in which the opinion is structured and omits significant portions of the opinion. However, I know how y’all like to cut to the chase.  Still – it’s long.  So let’s be clear: THIS IS NOT REQUIRED READING.  If you choose to read it, please don’t email me that it was too long.  That’d be like skiing Nosedive and then complaining to management that it too steep.

Thank you.

Here we go:  what’s the scenario?

“Plaintiff is injured in an automobile accident and retains Attorney to sue the other driver (Defendant). As a result of the accident, Plaintiff incurs $50,000 in medical expenses and Plaintiff tells Attorney she is no longer able to work. Prior to the accident Plaintiff was earning $50,000 per year. Attorney files a lawsuit on Plaintiff’s behalf. Prior to any discovery, the parties agree to participate in a court-sponsored settlement conference that will be presided over by a local attorney volunteer. Leading up to and during the settlement conference, the following occurs:

Scenario 1.  In the settlement conference brief submitted on Plaintiff’s behalf, Attorney asserts that he will have no difficulty proving that Defendant was texting while driving immediately prior to the accident. In that brief, Attorney references the existence of an eyewitness to the accident, asserts that the eyewitness’s account is undisputed, asserts that the eyewitness specifically saw Defendant texting while driving immediately prior the accident, and asserts that the eyewitness’s credibility is excellent. In fact, Attorney has been unable to locate any eyewitness to the accident.

Answer:  Attorney’s misrepresentations about the existence of a favorable eyewitness and the substance of his expected testimony. Attorney’s misrepresentations about the existence of a favorable eyewitness and the substance of the testimony the attorney purportedly expects the witness to give are improper false statements of fact, intended to mislead Defendant and his lawyer. Attorney is making representations regarding the existence of favorable evidence for the purpose of having Defendant rely on them. Attorney has no factual basis for the statements made. Further, Attorney’s misrepresentation is not an expression of opinion, but a material representation that “a reasonable [person] would attach importance to . . . in determining his choice of action in the transaction in question . . .” (Charpentier v. Los Angeles Rams Football Co., Inc. (1999) 75 Cal.App.4th 301, 313 [89 Cal.Rptr.2d 115] quoting Rest.2d Torts, § 538). Thus, Attorney’s misrepresentations regarding the existence of a favorable eyewitness constitute improper false statements and are not ethically permissible. This is consistent with Business and Professions Code section 6128(a), supra, and Business and Professions Code section 6106, supra, which make any act involving deceit, moral turpitude, dishonesty or corruption a cause for disbarment or suspension.

Scenario 2.  While the settlement officer is talking privately with Attorney and Plaintiff, he asks Attorney and Plaintiff about Plaintiff’s wage loss claim. Attorney tells the settlement officer that Plaintiff was 1/ Unless otherwise indicated, all future references to rules in this opinion will be to the Rules of Professional Conduct of the State Bar of California. earning $75,000 per year, which is $25,000 more than Client was actually earning; Attorney is aware that the settlement officer will convey this figure to Defendant, which he does.

Answer: Attorney’s inaccurate representations to the settlement officer which Attorney intended be conveyed to Defendant and Defendant’s lawyer regarding Plaintiff’s wage loss claim. Attorney’s statement that Plaintiff was earning $75,000 per year, when Plaintiff was actually earning $50,000, is an intentional misstatement of a fact. Attorney is not expressing his opinion, but rather is stating a fact that is likely to be material to the negotiations, and upon which he knows the other side may rely, particularly in the context of these settlement discussions, which are taking place prior to discovery. As with Example Number 1, above, Attorney’s statement constitutes an improper false statement and is not permissible.

Scenario 3.  While talking privately outside the presence of the settlement officer, Attorney and Plaintiff discuss Plaintiff’s “bottom line” settlement number. Plaintiff advises Attorney that Plaintiff’s “bottom line” settlement number is $175,000. When the settlement officer asks Attorney for Plaintiff’s demand, Attorney says, “Plaintiff needs $375,000 if you want to settle this case.”

Answer:  Attorney’s inaccurate representation regarding Client’s “bottom line” settlement number. Statements regarding a party’s negotiating goals or willingness to compromise, as well as statements that constitute mere posturing or “puffery,” are among those that are not considered verifiable statements of fact. A party negotiating at arm’s length should realistically expect that an adversary will not reveal its true negotiating goals or willingness to compromise. Here, Attorney’s statement of what Plaintiff will need to settle the matter is allowable “puffery” rather than a misrepresentation of fact. Attorney has not committed an ethical violation by overstating Plaintiff’s “bottom line” settlement number.

Scenario 4. In response to Plaintiff’s settlement demand, Defendant’s lawyer informs the settlement officer that Defendant’s insurance policy limit is $50,000. In fact, Defendant has a $500,000 insurance policy.

Answer:  Defendant’s lawyer’s representation that Defendant’s insurance policy is for $50,000 although it is really $500,000. Defendant’s lawyer’s inaccurate representations regarding Defendant’s policy limits is an intentional misrepresentation of fact intended to mislead Plaintiff and her lawyer. (See Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107Cal.App.4th 54, 76 [131 Cal.Rptr.2d 777] [plaintiffs “reasonably relied on the coverage representations made by counsel for an insurance company”].) As with Example Number 1, above, Defendant’s lawyer’s intentional misrepresentation about the available policy limits is improper.

Scenario 5. Defendant’s lawyer also states that Defendant intends to file for bankruptcy if Defendant does not get a defense verdict. In fact, two weeks prior to the mediation, Defendant consulted with a bankruptcy lawyer and was advised that Defendant does not qualify for bankruptcy protection and could not receive a discharge of any judgment entered against him. Defendant has informed his lawyer of the results of his consultation with bankruptcy counsel and that Defendant does not intend to file for bankruptcy.

Answer:  Defendant’s lawyer’s representation that Defendant will file for bankruptcy if there is not a defense verdict. Whether Defendant’s lawyer’s representations regarding Defendant’s plans to file for bankruptcy in the event that Defendant does not win a defense verdict constitute a permissible negotiating tactic will hinge on the specific representations made and the facts known. Here, Defendant’s lawyer knows that Defendant does not intend to file for bankruptcy and that Defendant consulted with bankruptcy counsel before the mediation and was informed that Defendant is not legally eligible to file for bankruptcy. A statement by Defendant’s lawyer that expresses or implies that Defendant’s financial condition is such that he is in fact eligible to file for bankruptcy is therefore a false representation of fact. The conclusion may be different; however, if Defendant’s lawyer does not know whether or not his client intends to file for bankruptcy or whether his client is legally eligible to obtain a discharge.

Scenario 6.  The matter does not resolve at the settlement conference, but the parties agree to participate in a follow-up settlement conference one month later, pending the exchange of additional information regarding Plaintiff’s medical expenses and future earnings claim. In particular, Attorney agrees to provide additional information showing Plaintiff’s efforts to obtain other employment in mitigation of her damages and the results of those efforts. During that month, Attorney learns that Plaintiff has accepted an offer of employment and that Plaintiff’s starting salary will be $75,000. Recognizing that accepting this position may negatively impact her future earnings claim, Plaintiff instructs Attorney not to mention Plaintiff’s new employment at the upcoming settlement conference and not to include any information concerning her efforts to obtain employment with this employer in the exchange of additional documents with Defendant. At the settlement conference, Attorney makes a settlement demand that lists lost future earnings as a component of Plaintiff’s damages and attributes a specific dollar amount to that component.

ANSWER:  Plaintiff’s instruction to Attorney to conceal material facts from Defendant and Defendant’s lawyer prior to the follow-up settlement conference. This example raises two issues: the failure to disclose the new employment, and Plaintiff’s instruction to Attorney to not disclose the information.

First, as to the underlying fact of employment itself, it is assumed that Plaintiff would not be entitled to lost future earnings if Plaintiff found a new job. As such, including in the list of Plaintiff’s damages a separate component for lost future earnings is an implicit misrepresentation that Plaintiff has not yet found a job. This is particularly true because Plaintiff agreed to show documentation of her job search efforts to establish her mitigation efforts, but did not include any documentation showing that she had, in fact, been hired. Listing such damages, then, constitutes an impermissible misrepresentation. (See, e.g., Scofield v. State Bar, supra, 62 Cal.2d at 629 [attorney who combined special damages resulting from two different auto accidents in separate claims against each defendant disciplined for making affirmative misrepresentations with the intent to deceive]; Pickering v. State Bar (1944) 24 Cal.2d 141, 144 [148 P.2d 1] [attorney who alleged claim for loss of consortium knowing that plaintiff was not married and that her significant other was out of town during the relevant time period violated Business and Professions Code section 6068(d)].)

Second, Attorney was specifically instructed by Plaintiff not to make the disclosure. That instruction, conveyed by a client to his attorney, is a confidential communication that Attorney is obligated to protect under Rule 3-100 and Business and Professions Code section 6068(e). While an attorney is generally required to follow his client’s instructions, Rule 3-700(B)(2) requires withdrawal if an attorney’s representation would result in a violation of the ethical rules, of which a false representation of fact or implicit misrepresentation of a material fact would be. When faced with Plaintiff’s instruction, Attorney should first counsel his client against the misrepresentation and/or suppression. If Plaintiff refuses, Attorney must withdraw under Rule 3-700(B)(2), as Attorney may neither make the disclosure absent client consent, nor may Attorney take part in the misrepresentation and/or suppression. (California State Bar Form. Opn. No. 2013-189; 7 8/ see also Los Angeles County Bar Association Opn. 520). 8/ California State Bar Form. Opn. No. 2013-189 contains a full discussion regarding an attorney’s ethical obligations when a client instructs his or her attorney to conceal material facts from the opposing party and/or opposing counsel. As addressed more fully in that opinion, an attorney should first counsel his or her client regarding the client’s request and, if the client refuses to reconsider, the attorney may be obligated to withdraw his or her representation, pursuant to Rule 3-700(B)(2).”