Rule 1.6: when a lawyer’s between rock and hard case

A lawyer’s duty to maintain client confidences is a bedrock principle of the legal profession. But what happens when a lawyer feels she must reveal those confidences in order to stay out of jail?

The answer is not crystal clear.

Rule 1.6(a) of the Model Rules of Professional Conduct prohibits both in-house and outside counsel from revealing confidential information relating to representation of a client.

Consistent with the policy of encouraging full and frank communication between attorneys and their clients, exceptions to the rule are limited.

One such exception, Rule 1.6(b)(5), permits a lawyer to reveal her client’s confidential information when the lawyer reasonably believes the information is necessary to establish a defense to a criminal charge against the lawyer based upon conduct in which the client was involved.

The exception puts a heavy burden on lawyers to exercise proper judgment and discretion in determining when necessity justifies a violation of their sacred duty.

The comments to Rule 1.6 state that disclosure should be no greater than the lawyer reasonably believes is necessary to establish her innocence. Moreover, disclosure should be made in a manner which limits access to the information to the tribunal or other persons having a need to know it. A lawyer should seek appropriate protective orders or other arrangements to the fullest extent practicable. The rule and the exception are also discussed in sections 64 and 83 of the Restatement (Third) of Law Governing Lawyers.

In Meyerhofer v. Empire fire & Marine Ins. Co., 497 F.2d 1190 (2d Cir.1974), the 2nd Circuit sided with the attorney who had revealed in extensive detail his client’s confidential information in an attempt to establish his innocence.

The attorney and his former law firm were sued for failing to make various disclosures in the Registration Statement for a public stock offering, in violation of the Securities Act of 1933.

To prove his non-involvement, the attorney contacted the plaintiffs’ law firm and presented it with a 30-page affidavit, accompanied by 16 exhibits he had previously submitted to the SEC. The document went into extensive detail concerning his efforts to cause the firm to rectify the nondisclosure and how the firm responded to those efforts.

Following the attorney’s disclosures plaintiffs dismissed their claims against him.

Armed with the new information, they also added more specific facts to their complaint against the remaining defendants.

The 2nd Circuit held that, given the urgency of the situation and seriousness of the accusations, the attorney had the right to defend his conduct with suitable evidence and therefore did not violate his ethical obligations.

In U.S. v. Omni Intern. Corp., 634 F. Supp. 1414 (D. Md. 1986), the court approved the manner in which a lawyer, accused of conspiracy to commit income tax evasion, disclosed attorney-client confidences to the government.

There, the attorney’s lawyers filed an application with the court for an order permitting an off-the-record disclosure of information.

After hearing arguments from the client, the attorney and the government, the judge imposed the following safeguards on the disclosure process: the government had to submit to the Court for in camera inspection a list of questions and general areas of inquiry it wished to pursue with the attorney, while the attorney had to do the same with his responses to the questions.

The court issued a ruling on the appropriate areas of inquiry. The record containing the information was to be sealed.

Boundaries again tested

The boundaries of Rule 1.6’s “reasonable” and “necessary” requirements may again be tested by Lauren Stevens, the recently indicted former associate general counsel of GlaxoSmithKline.

Stevens has been charged in federal district court in Maryland with six counts of obstruction of justice and making false statements to federal investigators probing Glaxo’s anti-depressant, Wellbutrin.

The allegations focus on Stevens’ refusal to produce documents that she had promised to obtain and provide to the FDA. The indictment also alleges that Stevens made numerous false statements to the FDA regarding the company’s participation in promoting off-label usages of Wellbutrin.

The prosecution targets Stevens alone. Neither Glaxo nor any of Stevens’ former colleagues have been indicted and Glaxo is reportedly cooperating with the government.

Stevens recently announced her intention to rely on an “advice of counsel” defense at trial. Stevens reportedly intends to argue that lawyers from the nationally prominent law firm of King & Spalding provided her with advice regarding the FDA’s production request, and may have even drafted the statements Stevens made to the FDA.

According to a statement released by her attorneys shortly after the indictment, King & Spalding was retained by Glaxo specifically because of its experience in dealing with the FDA. If permitted to assert the defense, Stevens will have to show that she sought the advice of the law firm in good faith, made a full and honest disclosure of all the material facts within her knowledge or belief and honestly complied with the advice.

The government filed a motion seeking to preclude Stevens from asserting the advice of counsel defense. The court has scheduled a hearing on the motion for March 25, 2011. Some of the issues likely to be litigated in connection with that motion and in the case as it proceeds forward include:

Does Stevens intend to argue that King & Spaulding gave her personal legal advice, as opposed to advice in her capacity as a Glaxo employee, such that she is a “client” who holds (and has the power to waive) the privilege in connection with her advice of counsel defense?

Assuming Stevens was a joint client of King & Spaulding along with Glaxo, do her ethical obligations as an in-house attorney preclude her from relying on the advice of counsel defense absent a waiver from Glaxo or strict compliance with Rule 1.6(b)(5)?

Stevens has filed a discovery motion demanding that the Government produce all documents or information obtained from King & Spalding regarding their advice to Stevens and the basis for their advice. Assuming the government possesses the requested information, has there already been a waiver of the privilege? Compare United States v. Massachusetts Institute of Technology, 129 F. 3d 681 (1st Cir. 1997) (in general production of documents to the government waives the privilege) with Federal Evidence Rule 502(d) (a federal court order may prevent a waiver).

What position will Glaxo take regarding the use of its confidential information? Because the prosecution has not charged Glaxo or any other attorneys with the same crimes, Stevens will not be able to take advantage of disclosures that would ordinarily have been made by a company had it been indicted for the same or similar crimes.

How much of the company’s confidential information will Stevens be required to disclose in order to satisfy the “honest disclosure of all the material facts within her knowledge” element of the advice of counsel defense? Is there any tension between that element and the “reasonable and necessary” constraints imposed by Rule 1.6(b)(5)?

Given the publicity attendant upon this case, is there any way Stevens can make the necessary disclosures to mount the advice of counsel defense without revealing Glaxo’s confidential information to the entire world? If not, does that restrict her ability to rely on the defense?

At the moment, there are many more questions than there are answers in this highly unusual and closely-watched case. One thing is for certain: By bringing this indictment, the government has definitely upped the ethical ante for in-house counsel.

Mariana Korsunsky and Richard Zielinski are members of the litigation and professional liability groups at Goulston & Storrs in Boston. They can be contacted at [email protected] and [email protected].