The "new" provisions of Federal Rule of Evidence 502 provide that, if a privileged document is inadvertently produced, there is no waiver of privilege if (1) the disclosure had been inadvertent; (2) the party had taken reasonable steps to prevent disclsoure; and (3) the partypromptly took steps to rectify the error.

Suppose you inadvertently produce a privilege document in an ITC investigation.  Does the rule apply?  On its face, it applies to inadvertent production "in a federal proceeding…."  Sounds like it applies, right?

Not so fast.

In In the Matter of Certain Dynamic Random Access Memory and NAND Flash Memory Devices and Products Containing Same (USITC Inv. No. 337-TA-803 Order No. 63 May 14, 2012), 2012 WL 3058613, the ALJ was faced with the demand by a non-party for return of a privileged document it had produced in response to a subpoena in that proceeding.  The non-party argued that the Fed. R. Evid. 502 bound the ITC, but the ALJ rejected that position, but also held that even if the rule applied, waiver of privilege had occurred.

His rationale to me is less than clear.  He cited three cases to support his position, none of which interpreted the phrase "in a federal proceeding" from this rule, but instead analyzed other rules of evidence or, in one case, subpart 502(d), which by its terms only permits a "federal court" to make orders concerning litigation pending before it.

So, I'm left with giving you this warning:  a proceeding before the ITC is not a "federal proceeding" under Fed. R. Evid. 502(b).  

On a related note, and I do tend to agree with his observation, the ALJ stated that he found provisions that allowed for clawback of privilege documents to reduce the incentive for extremely careful privilege review.  The problem, of course, with that belief is that the drafters of Rule 502 have indicated that the balance should be in favor of less review and easier clawback.  (And, I realize that there might be interesting seperation of power issues if Fed. R. Evid. 502(b) is read to apply to the ITC, but my point is that on its face, it does.)

Apparently, Samsung has an auto-delete feature that deletes employee e-mail on its proprietary system after a set time. While Samsung apparently took some steps to warn employees to preserve relevant emails after suit had been filed, it left on the auto-delete feeature.  The judge has entered an adverse inference order in the suit.  The order is here.  It's too fact-based to summarize effectively, but Apple in part used the fact that there were many more relevant emails on the non-proprietary system than on the proprietary one to establish the fact of some likely harm.

I like Jack Daniels, though frankly I'm an IPA guy.  Jack Daniels sent a cease and desist letter that is going around, not because it's nasty, but because it's nice.  An article about the letter and its impact is here.

On a broader level, I also teach civ pro (plus ethics and patent law), and I enjoyed seeing this because usually the stuff that gets the publicity are the nasty letters, the orders from judges who have to order lawyers to play rock/paper/scissors to determine where a depo will be, and the like.

Being a lawyer is hard, and kudos to those who are still doing it with some class.

But, sorry Jack, I still prefer my IPA.

I deal alot with malpractice claims, conflicts of interest, and so on.  I'm not part of the firm, and so privilege attaches to communications between me and the firms who contact me.

What about intra-firm communications?  

A recente Georgia appellate court surveyed existing law and rejecting the dominant approaches to that issue.  The case is Hunter, Maclean, Exley & Dunn v. St. Simon's Island Waterfront LLC, and  is available here.

Boiled down, the firm was concerned it had committed malpractice, thought the client had accused it of that, but could not withdraw because there were multiple on-going representations.  The firm consulted with its own lawyers, as well as outside counsel, on the issues. When this case, the malpractice suit, was filed, the firm asserted privilege as to the communications.

The court rejected the notion that a firm cannot assert a privilege against its own client because all conflicts are imputed, and also rejected the notion that it can assert the privilege unless the fiduciary exception applies.  Instead, in broad terms it adopted the approach of Professor Elizabeth Chambliss from The Scope of In-Firm Privilege, 80 NOTRE DAME L. REV. 1721, 1745 (2005).  In part the court explained:

Nevertheless, when firm counsel “individually has no conflict of interest under Rule 1.7 or Rule 1.9, and the in-firm communication meets the ordinary requirements for privilege,” we conclude that “courts should not automatically impute a conflict under Rule 1.10.”43 Instead, imputation should depend on “the structure of the in- house position.”44 Thus, when “firm counsel holds a full-time position and does not represent outside clients, courts should not impute a conflict under Rule 1.10." In this regard, compensation is perhaps the clearest way to demarcate firm counsel’s role, particularly through the use of billing procedures “to establish the firm as the client and to distinguish the lawyer who acts as firm counsel from other lawyers in the firm.” The role can be further demarcated by ensuring that its function is known and understood throughout the firm, that its compensation is not significantly determined by firm profit, and other similar measures. 

Dennis has written up a nice post about Wi-Lan, Inc. v. LG Elec., Inc. (Fed. CIr. 2012), available here.  Boiled down, in an effort to negotiate a settlement, Wi-Lan forwarded a letter to the accused infringer that had originally been sent to the patentee by its lawyers, laying out why there was infringement.  Once litigaition ensued, the accused infringer argued that privilege had been waived. 

My question is:  why on earth did the letter get forwarded?  Why didn't they just copy the text into a "here's why you infringe" letter, and avoid the whole thing?

Thoughts?

Dashiell Milliman-Jarvis, The State of Ethical Duties After Therasense, 25 Geo. J. Legal Ethics 695 (2012).
You can download it here or on Westlaw.

It's settled that a lawyer can be disqualified for being adverse to a former client in a substantially related matter.  If I represent Exxon in defending a breach of contract action by a gas station owner, I likely can't later represent that same gas station owner in a suit against Exxon over that same contract or a dispute "substantially related" to it. (I'm sure I'll be posting on what is "adverse" and what is "substantially related" at some point!)

Can the USPTO OED discipline a practitoner for doing so?

To start off, there is no provision in the PTO Code for disciplining a practitioner who is adverse to a former client in a substantially related matter.  Instead, as shown below, there is a provision about misuse of confidential information that, in the context of disqualification, has been held to permit tribunals to disqualify lawyers who are adverse to their clients in a matter substantially related to their prior representation of the client.

            Given that there is no rule against adverse representations in substantially related matters, there is a very strong argument discipline would be improper. 

            The PTO Code is based upon the ABA Model Code.  The Model Code lacked any specific prohibition, though courts felt possessed of the power to disqualify lawyers for being adverse to former clients in substantially related matters.  As one court (In re Gadbois, 786 A.2d 393, 397 (Vt. 2001)) explained:

Numerous commentators have discussed the omission of a former client conflict rule from the Code of Professional Responsibility.  Indeed, the repair of that omission is one of the reasons why the American Bar Association adopted the Model Rules of Professional Conduct as a replacement for the Code.

The Gadbois decision recognized that without a specific rule, it would be improper to discipline a lawyer for being adverse to a former client.  The case draws out the distinction between discipline and disqualification.

The lawyer in that case had been disqualified for being adverse to a former client in a substantially related matter.  The bar then brought disciplinary proceedings based on state rules based on the Model Code, and so lacking a prohibition against adverse representations in substantially related matters.  The bar had disciplined him based upon various other more general provisions in the state rules.  The court summarized the proceedings below: 

We agree with the Board that respondent's conduct would violate [Model] Rule 1.9(a) if it governed this case.  We also agree with the family court's disqualification decision.  The difficulty with this case is that the prophylactic rule now stated in Rule of Professional Conduct 1.9(a) was not contained in its predecessor, the Code of Professional Responsibility, which was in effect when respondent entered his appearance in the divorce case against his former client.  The Board hearing panel acknowledged this difficulty.  Nevertheless, it found a violation of two specific disciplinary rules, DR's 4-101(B)(3) [prohibiting misuse of confidential information] and 5-105(A) [relating to current client conflicts of interest], and a general disciplinary rule, DR 1-102(A)(7) [general prohibition against ‘misconduct’], apparently on the view that the combination of these disciplinary rules created a prohibition on respondent's conduct.

In a lengthy analysis, the court reasoned that discipline under these other rules was improper.  With respect to discipline based upon misuse of confidences, the court stated:

The first is DR 4-101(B)(3), which required that a lawyer not knowingly “[u]se a confidence or secret of his client for the advantage of himself or of a third person.”  “‘Confidence’ refers to information protected by the attorney-client privilege under applicable law, and ‘secret’ refers to other in-formation gained in the professional relationship … the disclosure of which would be embarrassing or would be likely to be detrimental to the client.”  DR 4-101(A).

 As the minority of the Board held, there is no evidence that respondent knowingly used confidential information acquired from his former client for the advantage of his new client.

With respect to discipline based upon the current client rule in the Model Code, the court stated:

 The Board also found that respondent violated DR 5-105(A).  DR 5-105(A) forbids an attorney from accepting employment “if the exercise of his independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve him in representing differing interests.”  DR 5-105(A).  “Differing interests” are defined as those “that will adversely affect either the judgment or the loyalty of a lawyer to a client, whether it be a conflicting, inconsistent, diverse, or other interest.”  Code of Prof'l Responsibility, Definitions (1).

This disciplinary rule states the classic formulation of the prohibition of accepting a client who has a conflict of interest with a present client.  By its terms, it requires the presence of two clients or potential clients.  It does not apply where the conflict is with a former client who is no longer a client of the lawyer.

With respect to whether being adverse to a former client in a substantially related matter could constitute misconduct,” after describing prior case law holding what did, and did not, constitute “misconduct,” the court wrote:

 Although broad standards are not unconstitutional in the context of lawyer disciplinary proceedings, we must be careful to adequately define a threshold to give lawyers some warning of what kind of conduct can give rise to sanctions…..  For example, the New York Court of Appeals has held that the standard “must be whether a reasonable attorney, familiar with the Code and its ethical strictures, would have notice of what conduct is proscribed.”  The Massachusetts and New Jersey courts have held that violation of a general rule is shown only by “conduct flagrantly violative of accepted professional norms.”  We believe that the Massachusetts and New Jersey standard captures the essence of the line we attempted to draw in McCarty and explains our application of DR 1-102(A)(7) in the cases in which we have employed it.

We cannot, consistent with that standard, conclude that respondent violated DR 1-102(A)(7) here.  The Code of Professional Responsibility purported to fully regulate lawyer conflicts of interest and did not prohibit side-switching as reflected in this case.  As the comment to the Restatement states: “a specific lawyer-code provision that states the elements of an offense should not, in effect, be extended beyond its stated terms through supplemental application of a general provision to conduct that is similar to but falls outside of the explicitly stated ground for a violation.”  Restatement (Third) of the Law Governing Lawyers § 5, cmt. c.  We would be doing exactly what the Restatement comment advises against if we disciplined respondent for side-switching under DR 1-102(A)(7).

As a result, the Vermont supreme court reversed the disciplinary action, holding no Vermont provision of its version of the Model Code allowed for discipline solely because a practitioner had been adverse to a former client in a substantially related matter.  I think the court was right. I think the same thing is true as to the PTO Code and discipline.

I have to tell you though that that's just my view.  I have to tell you that I've read articles by people saying that these "catch-all" provisions apply to all sorts of conduct, even conduct not relating to practice before the Office.  But I think those folks are mistaken, both because of this reason and because of other issues relating to the scope of authority of the USPTO to regulate conduct.  That is, however, something I'll get to another time.