This is part of the Ethics Committee’s regular series of Ethics Minutes for federal litigators and others—what to watch out for, what to do, and what not to do. Let us know what you think! Have an idea for a future Ethics Minute? Reach out to us!
The Curtain Rises
Plaintiffs file a federal class action, alleging that Company breached a warranty provision of its form contract with thousands of consumers and engaged in deceptive practices. Company, represented by Lawyers, moves to dismiss, arguing that the named plaintiffs don’t meet the requirements for recovering under the warranty.
In their dismissal motion on behalf of Company, the Lawyers fail to cite a recent decision from the same federal circuit court of appeals in another warranty case that rejected the very same position. Opposing counsel brings the decision to the district court’s attention.
The district court denies the dismissal motion, citing that the appellate decision is directly on point. The court orders the Lawyers to appear personally and explain why they should not have to pay opposing counsel’s fees and be reprimanded. The case immediately settles, and Lawyers’ firm itself agrees to pay part of the settlement.
In opposing further sanctions, the Lawyers apologize but argue that they thought they could distinguish the appellate decision, so they decided not to bring it to the court’s attention. The court disagrees with that approach. The Lawyers escape without further sanctions, however, because the judge deems their professional embarrassment, their firm’s payment, and their apology to be sufficient punishment.
The Moral of the Story
Under Model Rule of Professional Conduct 3.3(a)(2) (“Candor Toward the Tribunal”), a lawyer shall not knowingly “fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel.”
Some lawyers misread this rule to require disclosure only of “controlling authority.” Not so under most state versions of the Model Rule. But see New York Rule of Professional Conduct 3.3(a)(2) (lawyer shall not fail to disclose “controlling legal authority”). Rather, usually the rule applies to “directly adverse” legal authority in the “controlling jurisdiction,” seemingly a more wide-reaching requirement. See, e.g., D.C. Rule of Professional Conduct 3.3(a)(3), California Rule of Professional Conduct 3.3(a)(2), Ohio Rule of Professional Conduct 3.3(a)(2). For example, a directly adverse opinion of the Southern District of Ohio may not be “controlling authority” in the Northern District of Ohio but could still arguably be required to be disclosed under such versions of Rule 3.3(a), as an opinion from a court within the Sixth Circuit.
And if you reason, “Well, any case can be distinguished,” you could be walking on a razor’s edge that might potentially expose you to embarrassing consequences; lawyers have been disciplined for violating the rule. See, e.g., In re Thonert, 733 N.E.2d 932, 933-34 (Ind. 2000) (public reprimand). If you can distinguish a bad case, cite it and do so. That would seem to be the wise course.
“Ethics Minutes” are for your general information and do not constitute legal advice. The rules, ethics opinions, and disciplinary cases in particular jurisdictions vary and might result in an outcome different from the scenarios that are described here.
Karen E. Rubin is a business litigator and member of the Office of General Counsel in Thompson Hine LLP’s Cleveland office. She is the co-editor of the firm’s legal ethics blog, The Law for Lawyers Today. Karen is a member of the FBA Ethics Committee and chair of the Cleveland Metropolitan Bar Association Ethics Committee. She is an adjunct professor at Cleveland-Marshall College of Law, teaching Professional Responsibility.