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STURMAN asked if subsection 2 were the basis for the CIAFFONE case. KENNEDY affirmed it was, however that didn’t affect his analysis.   The model rule provides for an “involuntary screening,” which was specifically discussed at the ABA E2K discussions and did not pass.  The question is thus do we want to keep subsection 2 as it stands, or adopt the model rule and add the screening provision. 

             SCR 161 provides government lawyers can screen, but under the current rules private lawyers cannot.  The Model Rule combines both circumstances. Another option is to keep involuntary screening (even when client objects).

             KENNEDY stated his vote was for involuntary screening for private lawyers just like government lawyers.   This applies primarily for job changing, which under current authority applies even to non-lawyers.

             STURMAN stated that—not to divine the Supreme Court’s future posture on this subject—this is a long-standing Nevada ideal.  Twenty years ago the case law said “no China wall.”  Sturman stated that while she agreed with allowing private lawyers to screen, the question seems whether our Court will be convinced. KENNEDY opined that as evidenced by the recent MJP rule changes, if most of the general Bar agrees, the Court usually will deem that significant.

             BARE stated that in the BROWN case  (with which KENNEDY’s firm was involved) the Court applied CIAFFONE and at least four (4) justices found the rules can’t be applied inflexibly.  Co-counsel was conflicted under CIAFFONE  although no actual evidence of disclosure was present.  In BROWN, the Court found (4-3 split) if no evidence of actual disclosure co-counsel is not disqualified.

              WILLICK stated he doesn’t think the Committee should base decisions on the composition of the Court.  There is a difference between direct vs. imputed disqualification.  CIAFFONE is client based-no difference between actual information.  BROWN goes on to state if one is disqualified, should everyone associated with that one be out?  BROWN drew the line at the firm.           

             STURMAN noted it is a service to Bar members to acknowledge fluidity of the market.  WILLICK thought the Committee should look for the ABA floor arguments.  PECK stated the ability for lawyers and non-lawyers to move while protecting the integrity of the profession is key.  If the Bar undercuts that too much it may affect public opinion.  KENNEDY stated SCR 160 is a rule appropriate for the Committee to set out pros and cons and get comment at public hearings, then decide.   

             BARE proferred if you take a good look at CIAFFONE the Court didn’t say just because a conflicted non-lawyer moves the new firm has to be automatically conflicted. The trial court didn’t identify specific disclosure, just that the non-lawyer had access to the information.   It seems that “simple employment” is the standard being misapplied to this case.   WILLICK again noted the difference between direct and imputed

disqualification.  KENNEDY opined the Courts should apply lawyer ethics.   The trial judges have to apply the standards case by case.  STURMAN noted that was asking a lot of trial judges. 

             WILLICK noted there must be a discussion from the ABA House of Delegates floor on this.  KENNEDY responded there was and the House rejected it. Former government lawyers are the only class which allows involuntary screening.

             WOLFSON asked for comment on whether the Committee wanted to vote on each rule the day it is presented at Committee.  The matter was discussed and it was unanimously decided to follow a plan where there is general discussion, the rule assignee frames the discussion in writing, and the goal is to vote on it at the next meeting.    (KENNEDY agreed to prepare the analysis on SCR 160 for the next meeting.)

             KENNEDY stated SCR 158/Model Rule 1.8(c) and SCR 168/Model Rule 2.2 where combined and restated. Model Rule 1.8(c) and 2.2 were deleted. WILLICK asked whether the Committee should aim to standardized the Nevada rules so there is more of a uniformity with the model rules- there are many places where a word or two is slightly different, or the rule is layed out in a different manner. Addressing this now would avoid the need for future discussions on why there is a difference. In this instance, subsection (d) is new.

             KENNEDY stated there is a softening of the hard edge of the rule. It’s saying a personal lawyer conflict doesn’t automatically disqualify the whole firm, which he supports.   BARE opined that his understanding was if a secretary were properly screened,  a  CIAFFONE disqualification could be avoided.  The question is who has the burden of proof of actual disclosure?   KENNEDY stated the burden can be shifted. In BROWN,  all the relevant parties came in with everyone’s affidavits saying “I don’t know her [the non-lawyer in question],” which shifted the burden on the moving party.  The burden of proof may be presumptive, but it is rebuttable.

             PECK asked if there were ever a successful suit in a jurisdiction which allows screening.  It may be ok for disciplinary purposes but not civil.   PECK asked if the Committee could agree any language is for discipline applications, not civil.  WOLFSON ruled to discuss this at the next meeting. 

ADOPTION OF PREAMBLE (Led by WOLFSON)

             WOLFSON noted the preamble is aspirational and asked BARE’S opinion, who replied that he was against adopting the ABA comments but was for adopting the terminology.   STURMAN stated her opinion is that the preamble comprises things that couldn’t be passed in the rules.   Adopting the preamble would cause more problems than it solves, and is lofty and aspirational at best.

             KENNEDY summarized the question to be one of principle vs. obligation.  Once the preamble is adopted it becomes obligation.  This and the reality that parts of the preamble are general and others impose duties make him uncomfortable with adopting it. PECK noted she’d never read a case where a lawyer cited the preamble. KENNEDY noted he had, and it poses a real danger. Nobody can realistically fulfill the preamble in its entirety.  PECK noted that with all due respect, the preamble could be used negatively against lawyers at the legislature.

             WILLICK stated some Nevada lawyers already have mandatory aspirational goals (eg. EDCR 5.04/Family Court) and he’s used them both offensively and defensively.    STURMAN stated her perspective is this is a job the Bar has to do. 

SCR 182/Model Rule 4.2 (Led by STEMPEL) 

Communication with represented person

             SCR 182 is the “no contact” rule and is based on the 1983 version of Model Rule 4.2, which has changed since then.

·        Represented “person” is now “party.” 

·        New language added by E2K:  considers whether consent can by given by opposing lawyer, by law, or court.

             The PALMER v. PIONEER case, certified to the Nev. Supreme Court by the Federal Court in 1998 and decided in 2002[2], raised two problem areas:

1.      How to apply to government investigations (is suspect a represented party) and

2.      How does anti-contact apply to organization.

PALMER considers the speaking-agent tests applied in different jurisdictions, which can be categorized as follows:

             The Nevada test adopts none of the above, but rather a modified “management- speaking agent” test which specifically does not adopt Model Rule 4.2’s former or current comment but rather the test set forth in Wright v. Group Health Insurance, [4] which covers as protected actions and/or statements which can be imputed to the organization and those of employees implementing the advice of counsel.

                        Considering the PALMER case, the questions for this Committee are whether to:

1.      Codify the Palmer decision;

2.      Attempt to legislatively overrule Palmer;

3.      Specifically address the application of the Rule in the context of criminal investigations; and

4.      Modify the Rule to include intervening changes in the language of Model Rule 4.2.

             WOLFSON asked that STEMPEL prepare a memorandum for the next meeting making a recommendation regarding the Preamble (adopt in whole, in part, or not at all) and Rule 182 which may be voted on at the next meeting. 

SCRS 151,153,167,171, 173,186, 192 (Led by WOLFSON)

             These rules are substantially the same as the Model Rules, which in turn were not changed by the ABA E2K.     WOLFSON voted that rules 151(Competence), 153(Diligence), 173 (Fairness to opposing party and counsel), SCR 186 (Responsiblities of subordinate lawyer), and SCR 192 (Accepting appointments) not be changed, leaving SCR 167 (Advisor) and SCR 171 (Expediting litigation) open for discussion regarding Nevada-specific concerns.

             BARE noted 192 is not a Rule that ever comes up in discipline matters. WILLICK stated it is about to because he is on the Board of CCLA (Clark County Legal Services) and they sent a letter asking for the repeal of the prohibition against lawyer appointments.

             WOLFSON noted he thought 192 should be unchanged.  STURMAN and BARE noted an ADKT (administrative request for rule change) can be done by any judge  under NRAD 3(c).

             WOLFSON voted SCR 167 remain unchanged. [5]  As to SCR 171 (expediting litigation), subsection 2 of our rule is not in the ABA model rule.  KENNEDY noted subsection 2 deals with what a lawyer has authorization to do in a case.

             WOLFSON to prepare a recommendation that includes SCR 171(2) for vote at next meeting.

SCR 156/Model Rule 1.6 (Led by WILLICK)

Confidentiality

             SCR 156(3)(a) is not in the Model Rule.  The ABA specifically rejected this provision for the model rule four times in ten years.  He found three cases that dealt with it, but didn’t find any statements of policy contained therein.  Most cases he found dealt with insurance companies.  The Formal Opinions he found seemed consistent.

                The ABA E2K Commission Report notes the ABA intended to make the Model Rule more like SCR 156—expand permissive disclosure. Nevada has had it a mandatory disclosure since 1986.  There is a jurisdictional split on this issue and there is no trend in any one direction.

             WILLICK again noted the slight inconsistencies between the model and Nev. Supreme Court rules which put Nevada “out of step with the mainstream.”

             E2K deleted the criminality; “intent” is now “reasonably certain.”  WILLICK noted he likes this: (1) doesn’t believe non-criminally trained lawyers should have to judge criminality and (2) the “soon” vs. “now” test is better. However, every time you expand permissive/mandatory disclosure you restrict/chill client comfort.

             STURMAN suggest WOLFSON comment.  WOLFSON opined he would like to err on the side of public safety, and, not require that the lawyer have to determine criminality. STURMAN asked if this opened up any liability.  KENNEDY said maybe it would.  Lawyers that don’t do criminal work may not know their business client, for example, has been dumping toxic waste in Lake Mead.  Perhaps is even still doing it.

             WILLICK noted the ABA Commission and House of Delegates used the toxic waste example.    The idea was “Let’s not prevent a lawyer from preventing a public harm.”  Mandatory nature of a rule may protect you from discipline but duty of agency gives you civil liability.

             PECK asked whether discipline  rules don’t almost offer a safe harbor since the law license requires compliance.  KENNEDY illustrated with an example where the lawyer has provided an opinion on a transaction, the loan is out, and then finds out the client lied and the opinion no longer current.  What does the lawyer do- rectify harm?

             WILLICK stated this was used at the ABA, illustrated by the OPM case.  The situation requires a noisy withdrawal: (1) the lawyer withdraws the opinion (work product) and (2) the lawyer disavows the opinion.

             KENNEDY noted that still puts the clients in an unfavorable position.  Real problem is having rules that say “may” or “must.”  The language isn’t consistent with reality in practice.   STURMAN asked if this makes it more difficult to get insurance in Nevada, which KENNEDY opined not.

             STEMPEL noted eight states have mandatory disclosure.  The ABA rejected our rule 3(a). The question doesn’t have a good answer because the instrumentality presents a Hobson’s Choice- yourself or your client. Either way you go with the rule, the wrong result happens.

             BARE noted this rule hardly ever comes up in the discipline context.  KENNEDY noted none of them is worried about Bar  prosecution, but rather a third party, especially with regard to SCR 156 because people think if you’ve complied with the Rule you are ok, when in reality the lawyer is not civilly protected.   Agency duties come up at trial all the time.

             WILLICK noted the ABA delegates codified portions of the comment in the model rule.  Can a bar discipline you for obeying a court order?  Two of the comments are invisible to Nevada lawyers.

             KENNEDY noted this discussion presents an interesting separation of powers issue.

             WOLFSON asked that WILLICK provide his analysis in a succinct form, outlining the issues so the Committee can decide how to treat the relevant law.         

SCR 199/Model Rule 7.5  (Led by BARE)

Trade names

             BARE provided a copy of proposed text where the name of the lawyer would still have to be in the trade name.  This is related to recent language added in the new MJP (multi-jurisdiction practice) rules (SCR 189.1, 199.1) .

             The Supreme Court had promulgated a blanket ban on the use of trade names. Once the rule became effective, a Nevada lawyer sued and Judge Pro found restriction of trade names as the rule stands unconstitutional.  The Board of Governors of the State Bar of Nevada decided not to appeal that decision.  Therefore, the law of the land is that trade names cannot be banned. 

             The question then is if we want to strike the [second sentence of SCR 199(1) ].  It would avoid future litigation.

             KENNEDY noted he no longer represents the lawyer who sued on this issue, and that it is his opinion that the rule needs to be changed.   

             BARE proferred that we strike everything but the first sentence of 199(1) and add language which incorporates Model Rule 7.5(a).  This rule will be voted on next week.

             BARE offered to prepare a draft report which will take a first pass at suggesting changes for all the rules (except the ones assigned to Committee members).  It was not suggested the Committee will vote on all the rules at the next meeting, or even the next two, but the report will be a tangible work product upon which discussions can be based. This will hopefully lessen the work for the Committee as well.

             The next meeting was tentatively set for June 26, 2003, in the afternoon.  

Meeting adjourned at 6:20 p.m

ACTION ITEMS:

·        Revisit and finalize decision whether to renumber rules under E2K  

·        BEESLEY:   Model Rules 1.17, 5.7, 7.6

·        PECK:         SCR 158/Model Rule 1.8 (conflict of interest; prohibited transactions)

·        Finalize the question PECK raised re: disciplinary rules vs. civil liability (id.,  page 3, fifth full paragraph)

·        BARE will prepare a draft of the rules and suggested changes, to be e-mailed to the Committee at least one week prior to the meeting

·        STEMPEL to prepare recommendations on Preamble for vote

·        KENNEDY, STEMPEL, WILLICK, and WOLFSON to prepare and present recommendations to the Committee (as outlined in the minutes above) on the rules each presented today

·        Staff to coordinate E2K section of the Bar website

·        BARE to draft and submit a Bar Journal article/notice re:E2K to bar members,  which will reference the website 

·        Staff to schedule and notice the next meeting and prepare minutes

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