Legal Ethics and

Fair Debt Collection

Litigation

Daniel S. BlinnConsumer Law Group LLC-Rocky Hill, CT

Some of these slides are based on a prior presentation by

Daniel Blinn and Brian Bromberg.

Topics:

1. Taping telephone calls.

2. Representing multiple clients.

3. Questionable agreements with defendant.

4. Attorney Fee Issues

5. Advertising

Topic 1:Can we tape?

Maybe.

State Wiretap Laws

State laws often prohibit only the

“interception” of a communication,

but in12 states, consent of both

parties is required:California - Connecticut - Florida - Illinois -Massachusetts – Maryland - Michigan - Montana -Nevada - New Hampshire - Pennsylvania -Washington

But if it’s legal, it’s ethical, right?GENERALLY NOT.

ABA Opinion 337 (1974) held that recording without consent was conduct involving fraud, dishonesty or misrepresentation, which is prohibited by Rule 8. 4(a).

The idea is that surreptitious taping by a lawyer is seen as deceptive by the public.

WELL, OK, BUT...

In 2002, the ABA reversed itself

and held that “the mere act of

secretly but lawfully recording a

conversation inherently is not

deceitful.” Opinion 01-422

NOT SO FAST—MAYBE NOT.

Some states may still follow the

older opinion:

“Attorneys should not electronically

record a conversation with another

party, without first informing that

party that the conversation was

being recorded.”

Texas Ethics Op. 514 (1996)

So can I just get my client to tape?

AGAIN, GENERALLY NO.

An attorney may not solicit the aid of his or her clients to undertake an action that the attorney is ethically prohibited from undertaking. Model Rule Prof.

Conduct 8.4(a); Tex. Ethics Op. 514.

BUT: There are some exceptions when

the taping is necessary to obtain

evidence of illegal activity or to

promote a social good.

NY Formal Op. 2003-02

Mena v. Key Food Stores Co-op., Inc., 758 N.Y.S.2d 246,

247 (N.Y. Sup. Ct. 2003) (racial harassment claims;

plaintiffs' attorney directed them to tape record manager

who made racist remarks).

Waiver?

“This call may be monitored or

Recorded for Koala-T assurance . . .”

Bottom line: research your own

State’s laws carefully.

A good place to start your research is:“Can We Tape?” Article atThe Reporters Committee for Freedom of the Press website:www.rcfp.org/taping/index.html

Topic 2:Representing

Multiple Clients

REPRESENTING MULTIPLE CLIENTS

� Rule 1.7 Conflict Of Interest: Current Clients

� (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.

Concurrent Conflict of Interest

� Multiple Clients with unrelated claims against the same defendant.

� Related clients with claims arising out of the same course of conduct.

� Conflict with attorney’s own interests.

Rule 1.7

A concurrent conflict of interest exists if:

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

What to Do??

Rule 1.7: A lawyer may represent a client if:

� the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; AND

� each affected client gives informed consent, confirmed in writing.

I understand that you represent

other consumers and that some of

them may also have disputes with

the same people or companies with

whom I have a dispute.

I understand that there is a potential

that a conflict of interest could arise,

and I consent to you representing

me and other consumers at the

same time.

Be Careful When Negotiating Aggregate Settlements

Rule 1.8(g)

A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims involved and of the participation of each person in the settlement.

Topic 3:Controversial Agreements

with Defendants.

� What if defense counsel conditions settlement on your agreeing not to sue the defendant again on behalf of another plaintiff.

� If you don’t currently have another plaintiff with an unfiled claim, are you even permitted to agree to this to get the deal done?

� NO!

� Rule 5.6 Restrictions On Right To Practice

� A lawyer shall not participate in offering or making:

� (b) an agreement in which a restriction on the lawyer's right to practice is part of the settlement of a client controversy

� So you refuse. But the lawyer still wants other agreements from you. Four examples are:

� 1. Agree not to use information learned during the case in any future representation against the opposing party.

NO – SAME REASON –Rule 5.6(b)

� 2. Keep the terms of the settlement confidential:

�A. Individual clients – ok if they consent.

�B. Class plaintiffs – never.

Rule 1.2(a)

“A lawyer shall abide by a client's decision whether to settle a matter.”

Comment 1: client has ultimate authority on the objectives of representation.

Can a lawyer limit the client’s

ability to agree to confidentiality in

a fee agreement?

Can a lawyer limit the client’s

ability to agree to confidentiality in

a fee agreement?

NO! or at least probably not

But – Rule 1.2 provides that the

parties can agree to limit the

scope of the representation.

But – Rule 1.2 provides that the

parties can agree to limit the

scope of the representation.

Yes, but the comments say that

the limitation must not violate the

Rules.

The Rules as adopted by many states are even more explicit, providing that a lawyer may not enter into an agreement with the client that would limit the client’s ability to settle a case that the lawyer might want to continue. E.g. CT, FL, GA, MA, MO, OK and TX.

What About Confidentiality Regarding the Dispute?

MRPC 3.4(f): an attorney may not request a

person other than a client to refrain from

voluntarily giving relevant information to another

party unless:

(1) the person is a relative or an employee or other

agent of a client; and

(2) the lawyer reasonably believes that the

person's interests will not be adversely affected

by refraining from giving such information.

So, that’s defense counsel’s problem, right? Not so fast:

Rule 8.4 prohibits an attorney from knowingly assisting another attorney in committing an ethical violation.

Best course is to insist on getting an ethics ruling before communicating such an offer to the client.

Confidentiality of Materials Obtained in Discovery

� A. Trade secrets and the like

� B. Other information - Public policy may

counsel your refusal to agree, but you can’t

jeopardize a settlement your client wants

unless your client consents.

State Bars clarify.

Attorney may not enter into settlement

agreement that restricts attorney’s right to

practice law by prohibiting future representation

of clients in cases where attorney might use

information not protected as a confidence or

secret under Code but nevertheless covered by

terms of settlement agreement.

NYS Bar Op. 730

Accord, DC Bar Op. 335 & LA County Bar Op. 512

ABA’s Position

� “Although a lawyer may participate in a settlement

agreement that prohibits him from revealing information

relating to the representation of his client, the lawyer

may not participate or comply with a settlement

agreement that would prevent him from using

information gained during the representation in later

representations against the opposing party, or a related

party, except in limited circumstances. An agreement not

to use information learned during the representation

effectively would restrict the lawyer's right to practice and

hence would violate Rule 5.6(b).”� Formal Opinion 00-417, Settlement Terms Limiting a Lawyer’s Use of Information

Topic 4:Fee Agreements

ATTORNEY FEE ISSUES

� Rule 1.5: Communicate the fee agreement to the client, preferably in writing, before or within a reasonable time after commencing the representation.

� Contingent fee agreements must be signed by the client.

� Contingent fee agreements must explain how the fee will be calculated.

� HYBRID AGREEMENTS: contingent fee agreements between counsel and client are valid in cases where statutory fees are available. Venegas v. Mitchell, 495 U.S. 82, 86-89 (1990).

� Fee must still be reasonable.

� Is it ok to provide that the attorney shall receive the greater of her hourly rate or the contingent fee amount? Or that it’s at the attorney’s option?

� Does the possibility that an attorney fee award is taxable affect reasonableness?� It’s not a listed factor in the ABA Rule

� Suggestion: include a provision that explains the purpose of “fee shifting” statutes and that the attorney fees may exceed the recovery available to the client.

� Explain in the fee agreement that you are not providing any tax advice to the client.

� Simultaneous negotiation of damages and attorney fees.

� Permissible. Evans v. Jeff D., 475 U.S. 717

(1986).

� Is it desirable?

� In class cases?

� In individual cases?

Liability forCosts and Expenses

� Query: Can plaintiff’s counsel advance all the costs and expenses of litigation and agree to recover those costs and expenses only if the suit is successful?

� Related Query: What about in a class action?

Must Clients Be Responsible for Costs? It Depends

� The “contemporary” view, as reflected in Rule 1.8(e) of the ABA’s Model Rules of Professional Conduct, is that counsel can not only advance costs, but may do so with the expectation that counsel will cover the costs even if the suit is unsuccessful.

� Some states still follow older rule, which required that clients be ultimately responsible for the costs.

Two Questions for Consideration

� First, is it a good idea to agree to cover the costs of an unsuccessful lawsuit?

� On the one hand, does an agreement to eat

the costs strip the client of the sense of

involvement in the case?

� On the other hand, does a clause requiring

the client to eat the costs create undue fear in

the client?

Advertising

Clients Wanted

Advertisements

Nonmisleading attorney advertisements are

entitled to First Amendment protection. Bates v.

Arizona State Bar, 433 U.S. 412 (1978)

Rule 7.2 contains substantial requirements and

limitations.

In-person solicitations are subject to state

regulations because they are “inherently

conducive to . . . misconduct.” Ohralik v. Ohio

State Bar Ass’n, 436 U.S. 447 (1978). But see

In re Primus, 436 U.S. 412 (1978), below.

Permitted Solicitations – Rule 7.2

A lawyer shall not initiate personal or live telephone contact, including telemarketing contact, with a prospective client for the purpose of obtaining professional employment . . .

Primary exceptions are for close friends, relatives, and former clients

Another Exception

� Solicitation of prospective litigants by nonprofit

organizations that engage in litigation as a form of

political expression and political association constitutes

expressive and associational conduct entitled to First

Amendment protection as to which government may

regulate only with narrow specificity. In re Primus, 436

U.S. 412 (1978) (ACLU).

� In other words, some not-for-profit organizations (like the

ACLU) can do things that private for-profit attorneys are

not allowed to do. But if you work for a not-for-profit, do

not blindly rely on In re Primus.

Written Communications to Prospective Clients

Written Communications to Prospective Clients

Rule 7.3(b): Prohibits written solicitations that are misleading or coercive or that are directed to prospective clients who are particularly vulnerable, are represented, or who do not wish to receive solicitations

Requirements for Written Communications

� Clearly and prominently labeled

“Advertising Material” in red ink on the first page of the

communication and the lower left corner of the envelope.

� The first sentence of any written communication shall be:

“If you have already retained a lawyer for this matter,

please disregard this letter.”

“Advertising Material”

Recent Developments

� Prohibitions on the use of trade names may be

unconstitutional. See Alexander v. Cahill, 598 F.3d 79

(2d Cir. 2010), cert denied, __ U.S. __, 131 S.Ct. 820

(2010).

� Prohibitions on the use of colorful descriptive monikers,

such as “Heavy Hitters,” or prohibitions on selling pop-up

ads on attorney websites may also be unconstitutional.

Id.

Recent Developments II

� Prohibitions on the use of testimonials or endorsements from a client with respect to a matter that is still pending may be unconstitutional. Id.

� Rules establishing 30-day moratoriums on attorney advertising soliciting accident victims or their families are constitutional. Id.

Recent Developments III

� Prohibitions on the use of the term “certified specialist” may be unconstitutional. See Hayes v. New York Attorney Greivance Committee of the Eighth Judicial District, 672 F.3d 158 (2d Cir. 2011).

Final Tips:

� Check Your State’s Rules for Variations

� For example, check for prohibitions on the use of trade names or certain symbols (e.g., scales of justice, courthouse, etc.)

� Check for record-keeping requirements (e.g., New York requires attorneys to file templates of solicitation letters with the bar, together with mailing lists of those to whom the letter was sent).

More Final Tips:

� Check for prohibitions on making certain representations: for example, many states restrict the use of the word “specialize” –in those states, use the words “focus” or “concentrate” instead.

� If in doubt, call an ethics hotline or request a formal opinion from a bar association.

Even More Final Tips

� Consider bringing a constitutional challenge in federal court.

� Consider bringing a mandamus proceeding if the state authorities refuse to follow federal court precedent.

� In sum, don’t violate the ethics rules and then wait until you’re facing disciplinary proceedings to argue your position. Take affirmative steps beforehand.