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Ethics update

By Jonathan Bishop

Highlights of recent developments in attorney professional responsibility, including new cases, advisory ethics opinions, pending legislation and proposed rule amendments.

State Bar Formal Opinion No. 2004-164

Under the facts presented, the Committee on Professional Responsibility and Conduct opined that an attorney-client relationship is not formed with an attorney who answers specific legal questions on a radio call-in show or other similar format posed by persons with whom the attorney has not previously established an attorney-client relationship. The committee reasoned this format is unlikely to support a reasonable belief by the caller that the attorney fielding the questions is agreeing implicitly to act as the caller’s attorney or to assume any of the duties that flow from an attorney-client relationship.

State Bar Formal Opinion No. 2004-165

In this opinion, the Committee on Professional Responsibility and Conduct considered the ethical obligations of a principal attorney who uses outside contract lawyers to make appearances on behalf of the principal attorney’s client, as well as the responsibilities of the outside contract lawyer who makes those appearances.

The committee opined that the principal attorney must disclose the arrangement to his client when the use of that outside contract lawyer constitutes a significant development in the matter, which depends upon the circumstances of each situation.

If, at the outset of the representation, the principal attorney anticipates using outside contract lawyers, the issue should be addressed in the written fee agreement with the client, along with any fees and costs charged to the client for the outside lawyer’s services. The principal attorney must competently supervise the outside lawyer. Both the principal attorney and outside contract lawyer must comply with the ethical rules concerning confidentiality, advertising and conflicts of interest that apply to his or her role in any such arrangement.

Los Angeles County Bar Opinion No. 512 (Feb. 23, 2004)

A settlement agreement containing a confidentiality clause that prohibits a lawyer from disclosing the fact and amount of a settlement to the lawyer’s other current or future clients does not violate Rule of Professional Conduct 1-500. Although rule 1-500(A) prohibits improper restrictions on the right of a member to practice law, the Los Angeles County Bar Association opined that a confidentiality clause merely prohibiting disclosure of the fact or amount of settlement does not constitute such a restriction.

In addition, the opinion found the confidentiality clause did not violate the lawyer’s duty to represent his or her client competently under rule 3-110.

Zamos v. Stroud (April 19, 2004) 32 Cal.4th 958, 87 P.3d 802, 12 Cal.Rptr.3d 54

The Supreme Court held that an attorney may be held liable for malicious prosecution by continuing to prosecute a lawsuit that is discovered to lack probable cause. Here, defendants continued prosecution of a fraud action against an attorney after learning the claim had no merit based on transcripts and evidence provided shortly after the lawsuit was filed.

The court reasoned holding attorneys liable for the damages a party incurs as a result of the attorneys prosecuting civil claims after they learn the claims have no merit would encourage voluntary dismissals of meritless claims at the earliest stage possible. The court considered prior cases which refused to permit malicious prosecution claims based on the continuation of a properly initiated proceeding later found to lack probable cause, but specifically disaffirmed the portions of those cases contrary to this decision.

Gadda v. Ashcroft (9th Cir., July 20, 2004) 2004 WL 1615082

The attorney was suspended and disbarred from the practice of law in California for misconduct in an immigration matter. Subsequently, his State Bar disbarment led to reciprocal disbarment from the Board of Immigration Appeals (BIA) and the Federal Ninth Circuit Bar.

The attorney challenged the Supreme Court of California’s jurisdiction to discipline him and also argued that reciprocal discipline was inappropriate because he practiced only federal immigration law, where Congress has granted exclusive authority to the U.S. Attorney General to discipline attorneys who appear before those agencies or courts.

The Ninth Circuit rejected these arguments, finding that the immigration regulations expressly allow for supplementary state regulation and that the federal courts have long recognized that the states have an important interest in regulating the conduct of the attorneys whom they license. Thus, the reciprocal disbarments imposed on the attorney by the BIA and Ninth Circuit were valid.

Janik v. Rudy, Exelrod & Zieff (June 22, 2004) 119 Cal.App.4th 930, 14 Cal.Rptr.3d 751

In a legal malpractice action against attorneys who represented a plaintiff class, the Court of Appeal found that the duty of care owed to the plaintiff class included an obligation to determine and raise related claims or theories of recovery even if those claims or theories were outside of the class certification order.

Even when retention is expressly limited, an attorney may still have a duty to alert the client to legal problems which are reasonably apparent but fall outside the scope of the retention. Here, the class certification provided for a specific action under the Labor Code and the attorneys did not add a related cause of action under the Unfair Competition Law (UCL) in the Business & Professions Code.

The court reasoned that the related UCL claim would have involved facts and legal analysis similar to the Labor Code cause of action. It was breach of the standard of care owed to both the class representatives and the absent class members for the attorneys to fail to determine and raise the related UCL claim.

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