You are outside litigation counsel for a corporate client defending a personal injury case. The plaintiff issues a formal demand for security footage of her fall on your client’s premises. You have the footage in your possession – and it clearly shows the fall. Your client’s general counsel directs you to “bury” the evidence because the footage is fatal to the defense. However, you conclude that withholding the evidence would violate your ethical obligations. Must you “report up” the incident to the general counsel’s employer?
California Rule of Professional Responsibility (Rule) 1.13 addresses a lawyer’s duty to organizational clients. The lawyer represents the organization through its duly authorized “directors, officers, employees, members, shareholders, or other constituents” for a particular engagement. Rule 1.13(a). Thus, the corporation itself—not its general counsel—is your client.
While old rule 3-600 permitted but did not require a lawyer to “report up” client constituent malfeasance, the new rule now mandates reporting up under certain circumstances. Under Rule 1.13(b), the lawyer’s duty to report is triggered by a two-part test with different knowledge requirements: (1) a subjective standard that requires actual knowledge that a constituent is acting, intends to act, or refuses to act; and (2) an objective standard of whether a reasonable lawyer would conclude that the constituent’s course of action is a violation of law or a legal duty and likely to result in substantial injury to the organization. The mandatory “reporting up” requirement is triggered only when both requirements are satisfied and when the lawyer reasonably believes that reporting up is “in the best lawful interest of the organization.”
In our hypothetical, the first prong is satisfied because the lawyer has actual knowledge of general counsel’s improper instruction to “bury” the evidence. The second prong is satisfied because a reasonable lawyer would know that withholding non-privileged, discoverable evidence is a violation of law that is likely to result in substantial injury to the organization. Thus, if the general counsel insists on this action, generally the lawyer “shall refer the matter to higher authority in the organization” pursuant to Rule 1.13(b).
In some circumstances, “the lawyer may reasonably conclude that the best interest of the organization does not require that the matter be referred to higher authority” if the constituent does not persist. Rule 1.13, Comment . Here, the lawyer should first explain to the general counsel the client’s discovery obligations to encourage a different instruction before reporting up.
What if the general counsel threatens to fire you if you don’t follow the instruction? Under Rule 1.13(e), a lawyer is required to notify the highest authority in the organization if the lawyer reasonably believes that he or she has been discharged or forced to withdraw as a result of the “reporting up” requirements. If the highest authority also insists on improperly “burying” the evidence, under Rule 1.13(d) the lawyer’s response may include the lawyer’s right and, where appropriate, duty to resign or withdraw in accordance with rule 1.16.
About the Author:
Joanna L. Storey is an attorney with Hinshaw & Culbertson where she focuses her practice on professional liability, risk management for lawyers and defending catastrophic personal injury litigation. Joanna is a member of BASF’s Legal Ethics Committee and actively follows privacy, security and ethics developments.