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  • January
    15
    2020

    Ethical Dilemmas: Former Clients and 'Generally Known' Information

    Is the duty owed to former clients in connection with information disclosed to third parties? What actually constitutes "generally known" information about former clients?

    Timothy J. Pierce

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    Jan. 15, 2020 – Can information in the court files of former clients be used against them in a new matter? What does “generally known” mean in terms of information about a former client?

    Question

    A couple of years ago I represented a client accused of civil fraud. As part of those proceedings, certain information was submitted to the court and made part of the court file before the matter settled. This information shows that my former client engaged in dishonest conduct.

    Now, in one of my partner’s cases, my former client has been listed as an adverse witness. I know that we have an ongoing duty of confidentiality to former clients, but I looked at the rules, and it appears that when information has become “generally known,” we are free to use that information in a manner that is adverse to the interests of the former client.

    Because the relevant information was made part of the court file, does that mean that they are “generally known” – and that my partner can use that information to attack the credibility of my former client if the former client testifies as an adverse witness?

    Answer

    SCR 20:1.9(c) governs a lawyer’s duty of confidentiality to a former client, and states:

    (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:

    (1) use information relating to the representation to the disadvantage of the former client except as these rules would permit or require with respect to a client, or when the information has become generally known; or

    (2) reveal information relating to the representation except as these rules would permit or require with respect to a client.

    Tim Pierceorg tpierce wisbar Tim Pierce is ethics counsel with the State Bar of Wisconsin. Reach him by org tpierce wisbar email or through the Ethics Hotline at (608) 229-2017 or (800) 254-9154.

    Neither the rule nor the accompanying comments define what constitutes “generally known” information. The ABA’s Standing Committee on Ethics and Professional Responsibility, however, addressed the “generally known” exception in Formal Opinion 479.

    While neither the rule nor the comment provide explicit guidance, several courts have addressed this exception. Opinion 479 begins by discussing these cases1 as well as rules, opinions, and treatises from various jurisdictions.

    The opinion then offers the following definition of “generally known” information:

    Consistent with the foregoing, the Committee’s view is that information is generally known within the meaning of Model Rule 1.9(c)(1) if (a) it is widely recognized by members of the public in the relevant geographic area; or (b) it is widely recognized in the former client’s industry, profession, or trade. Information may become widely recognized and thus generally known as a result of publicity through traditional media sources, such as newspapers, magazines, radio, or television; through publication on internet web sites; or through social media. With respect to category (b), information should be treated as generally known if it is announced, discussed, or identified in what reasonable members of the industry, profession, or trade would consider a leading print or online publication or other resource in the particular field. Information may be widely recognized within a former client’s industry, profession, or trade without being widely recognized by the public. For example, if a former client is in the insurance industry, information about the former client that is widely recognized by others in the insurance industry should be considered generally known within the meaning of Model Rule 1.9(c)(1) even if the public at large is unaware of the information.

    Unless information has become widely recognized by the public (for example by having achieved public notoriety), or within the former client’s industry, profession, or trade, the fact that the information may have been discussed in open court, or may be available in court records, in public libraries, or in other public repositories does not, standing alone, mean that the information is generally known for Model Rule 1.9(c)(1) purposes. Information that is publicly available is not necessarily generally known. Certainly, if information is publicly available but requires specialized knowledge or expertise to locate, it is not generally known within the meaning of Model Rule 1.9(c)(1).

    (footnotes omitted)

    This definition follows the large majority of the persuasive authorities in holding that information that has been previously revealed or available from public sources is not, by those facts alone, “generally known.”

    Rather, the information must be widely recognized by the public or within the former client’s industry trade or profession. Thus, “generally known” is not equivalent to “publicly available.”

    A second important point is that the “generally known” exception applies only to the use of information, not disclosure. The opinion discusses this point:

    In contrast, Model Rule 1.9(c)(1) addresses the use of former client confidential information. Model Rule 1.9(c)(1) provides that a lawyer shall not use information relating to a former client’s representation “to the disadvantage of the former client except as [the Model] Rules would permit or require with respect to a [current] client, or when the information has become generally known.” The terms “reveal” or “disclose” on the one hand and “use” on the other describe different activities or types of conduct even though they may—but need not—occur at the same time. The generally known exception applies only to the “use” of former client confidential information.

    (footnotes omitted)

    Thus, on the facts as presented, the mere fact that the records were disclosed in a prior proceeding does not mean they are “generally known’” and they may not be used against the former client, such as in fashioning deposition questions.2

    With respect to the prohibition on revealing information found in SCR 20:1.9(c)(2), “except as these rules would permit or require” references the general duty of confidentiality found in SCR 20:1.6, and is discussed in Wisconsin Formal Ethics opinion EF-17-02 as follows:

    The ethical duty of confidentiality under SCR 20:1.6 is thus extremely broad: it protects all information relating to the representation of the client, whatever its source. It protects information irrespective of whether that information is privileged, or if the lawyer believes that disclosure would be “harmless.” It protects information that is known to others or may be available from public sources. This duty of confidentiality extends to information relating to the representation of former clients as well by virtue of SCR 20:1.9(c)(2), which prohibits lawyers from revealing information relating to the representation of former clients except as permitted or required by the Rules. Thus, information relating to the representation of former clients is protected to the same extent as that relating to current clients.

    On the facts as presented, none of the exceptions to the duty of confidentiality found in SCR 20:1.6(b) and (c) apply, so the lawyers would not be able to reveal the information relating to the representation of the former client without the informed consent of the former client.

    Because the information in question would be useful in cross-examining the former client and cannot be used or disclosed, the lawyer has a conflict under SCR 20:1.7(a)(2) which is imputed to every lawyer in the firm under SCR 20:1.10(a). This sort of conflict can arise whenever a former client is an adverse witness in a new matter.

    The larger point, however, is that the “generally known exception” only applies when the information in question is widely known and applies only to use, not disclosure.

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    Endnotes

    1 See, e.g., Pallon v. Roggio, Civ. A. Nos. 04-3625(JAP), 06-1068(FLW), 2006 WL 2466854, at *7 (D. N.J. Aug. 24, 2006); In re: Gordon Props., LLC, 505 B.R. 703, 707 n.6 (Bankr. E.D. Va. 2013); In re: Anonymous, 932 N.E.2d 671, 674 (Ind. 2010); In re: Tennant, 392 P.3d 143, 148 (Mont. 2017).

    2 For an example of a Wisconsin lawyer who was disciplined on somewhat similar facts, see Disciplinary Proceedings against Harman, 244 Wis. 2d 438, 628 N.W.2d 351 (2001).




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