California Bar Journal
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California Bar Journal

The State Bar of California


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Front Page - March 2002
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News / News Briefs
Midyear meeting will focus on fairness
E-briefs offer bar updates
Three strikes supporter has a change of heart, now wants the law restricted
ABA seeks nominations for three awards
Rule change proposed to protect government whistleblowers
More pamphlets added, translated
Innovation garners awards for 11 courts
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Trials Digest
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Public Comment
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From the President - New era of bar-conference cooperation
Conference of Delegates: A valuable ally
PG&E's plan: A power play
Letters to the Editor
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You Need to Know
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Ethics Byte - Twilight zone cases can make practice tricky
Former deputy DA, convicted of grand theft, is suspended
Attorney Discipline
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MCLE Self-Study
At tax time, modify debt with caution
Self-Assessment Test
MCLE Calendar of Events
Rule change proposed to protect government whistleblowers
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Staff Writer
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Government lawyers who suspect wrongdoing within their agency can blow the whistle without violating client confidentiality rules under an amendment to ethics rules approved by the State Bar Board of Governors. The proposal goes to the Supreme Court for action.

The amendment to rule 3-600 of the Rules of Professional Conduct offers a mechanism for government lawyers to go outside their agency to report serious misconduct while protecting them from discipline by the bar for violating their ethical duties.

The knotty issue has been under consideration since Department of Insurance lawyer Cindy Ossias leaked documents to the Assembly Insurance Committee that contributed to the downfall of former Insurance Commissioner Chuck Quackenbush.

Ossias provided information about secret settlements Quackenbush had reached with six insurance companies after the 1994 Northridge earthquake. The settlements allowed the companies to donate money to private foundations that Quackenbush created rather than face possible fines for mishandling claims.

Ossias subsequently was investigated and exonerated by the bar, which found that her actions not only were protected by California's Whistleblower Act but, more importantly, "advanced . . . public policy considerations bearing on the responsibilities of the office of insurance commissioner."

The California Attorney General later issued a differing opinion that the state's whistleblower law does not supercede the attorney-client privilege, putting government lawyers in a quandary.

The bar's Committee on Professional Responsibility and Competence wrestled with the issue for more than a year, revising the rule several times with input from municipal attorneys, the bar's Public Law Section, the County Counsels' Association of California and Assemblyman Darrell Steinberg, who authored a bill - AB 363 - to address the problem.

One proposal, which was returned to the drawing board, drew 19 letters of comment which reflected deeply divided opinion.

The final version, while not universally accepted, seemed to draw a good deal of support. At the bar board's January meeting, former attorney general John Van de Kamp, who now represents Los Angeles, said, "Public protection is important, and this offers an escape valve to make sure the public is protected."

Santa Clara County Counsel Ann Ravel, who is sitting on the board temporarily, also offered support for the rule change. "This rule, we think, is the best possible rule," she said. "It has gone further than the Cindy Ossias situation and will be helpful to public lawyers."

The proposed change specifies what a lawyer should do when faced with different types of misconduct. For example, when the wrongdoing appears serious (involves a crime, fraud, misuse of public funds, breach of fiduciary duty or "is likely to result in substantial injury to the organization), or if the suspected individual is the agency's top executive, the lawyer may refer the matter to law enforcement or "any other governmental agency or official" charged with oversight.

Less serious misconduct, such as political policy making disagreements, can be referred to the "next higher" or highest internal authority within the organization.

The amendment does not create a duty for government attorneys to report wrongdoing or authorize public attorneys to go public with their concerns.

It does, however, clarify somewhat the confusion over who is the client of a government lawyer. First, it says the client is the organization, not the individuals who make up the organization. But it allows significant wiggle room in allowing the attorney to determine who exercises ultimate oversight. In government, where the chain of command is elusive, it could range from the top executive to a legislative committee to the governor. The rule therefore allows flexibility in determining the client.

It also offers a safe harbor to a lawyer who reports misconduct in good faith to the wrong person or entity. The possibility of being disciplined under those circumstances otherwise poses a chilling effect on any lawyer considering approaching an oversight group or law enforcement.

Steinberg's bill, ABA 363, which originally would have created an exception to the confidentiality rule for government lawyers wanting to blow the whistle, is on hold, pending his consideration of the Supreme Court's action. Steinberg expressed support for the proposed amendment, but retains the option to pursue his own statutory reforms.