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Ethics Question of the Month - January 2019

A lawyer represents Client A.  During the representation, the lawyer has access to Client A’s files, including documents regarding lawsuits in which the lawyer did not represent Client A.  Some of these documents are filings from lawsuits in which Client A was sued for fraud.  The lawyer’s representation of Client A terminates.  

The lawyer subsequently is asked to represent a new client, Client B, who is adverse to Client A.  This new representation would be factually unrelated to any of the matters in which the lawyer represented Client A. However, Client B has fraud claims against Client A that are similar to prior fraud claims that the lawyer learned of in reviewing Client A’s files during the prior representation.

The lawyer believes that the information that he learned about these prior fraud allegations against Client A could be relevant to Client B’s claims against Client A.  The lawyer wonders whether he could share information about Client A’s other lawsuits, find those filed pleadings at the courthouse, and potentially use that information to show that Client A has a pattern of committing fraud in the same way that Client B now claims.

The lawyer is aware that Rule 1.05(b)(3) of the Texas Disciplinary Rules of Professional Conduct states that a lawyer shall not knowingly “[u]se confidential information of a former client to the disadvantage of the former client after the representation is concluded unless . . . the confidential information has become generally known.”  

The lawyer thinks he can tell potential Client B about these other lawsuits because (1) the lawyer did not represent his Client A in those matters, and (2) the information that he knows is available to anyone who looks for it in the court’s files.  Which is most accurate?  

A.    The lawyer can share the information because he did not represent Client A in those matters, and Client A’s other suits are “generally known” because they were public filings.
B.    The lawyer can disclose to Client B what he remembers about Client A’s documents because he did not represent Client A in those matters. However, the prior fraud lawsuits are not “generally known” under the Rule 105(b)(3) exception.
C.    The lawyer cannot disclose to Client B what he remembers about Client A’s documents, even though he didn’t represent Client A in those matters. But he can direct Client B to the courthouse and suggest looking for other lawsuits against Client A.  
D.    The lawyer cannot reveal what he remembers from Client A’s files, nor can he direct Client B to the courthouse to search for other lawsuits.
E.    The lawyer should not represent Client B at all.  

ANSWER:  E  

While the lawyer raises concerns about Rule 1.05, he is overlooking Rule 1.09(a)(2). It forbids representation of a new client against a former client “if the representation in reasonable probability will involve a violation of Rule 1.05.”

The information of public record about Client A, which the lawyer acquired while representing the client, is “unprivileged client information” as defined in Rule 1.05(a). If no exception applies, use of the information to Client A’s disadvantage is prohibited by Rule 1.05(b)(3), unless “the confidential information has become generally known.” 

Information is not necessarily “generally known” just because it is a matter of public record.  Information may be of public record simply by being included in a government record, such as a document filed with a court clerk, even though there is no general public awareness of the matter. Information that “has become generally known” is information that is actually known to members of the general public and is not merely available to those who look for it. Whether information is “generally known” within the meaning of Rule 1.05(b)(3) is a question of fact.

So, if the prior fraud suits are known only by those involved, they would not be “generally known.”   D might be technically correct. But in light of Rule 1.09(a)(2), E would be the better answer for the prudent lawyer. It is unlikely that the attorney could completely exclude the information from his representation. At the very least, his prior representation would create the appearance of impropriety, and he very likely could be accused of using confidential information against Client A, whether or not he actually did. If accused, proving he did not would be difficult. 
 

Posted: 12/29/2018 8:00:00 AM by TCLE Editor | with 0 comments

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About Ethics Question of the Month

Ethics Question of the Month is a regular feature of the Texas Bar Journal created and sponsored by the Texas Center for Legal Ethics.

DISCLAIMER: The information contained in Ethics Question of the Month is intended to illustrate an ethics issue of general interest in the Texas legal community; it is not intended to provide ethics advice that applies regardless of particular facts.  For specific legal ethics advice, readers are urged to consult the Texas Disciplinary Rules of Professional Conduct (including their official comments) and other authorities and/or a qualified legal ethics advisor.

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