Fate of California Rule Overhaul Now in Court’s Hands

By Joan C. Rogers

California’s multiyear initiative to update its standards governing lawyer conduct shifted to the state supreme court at the end of March when the California state bar sent the court a complete package of proposed professional conduct rules.

The bar’s board of trustees approved some of the proposals in November and accepted the rest of them on March 9, in time to beat the court-imposed March 31 deadline for submitting revised rules.

At the board’s March 9 meeting, the trustees deadlocked 6-6 on a controversial update of California’s anti-discrimination rule, but board president James P. Fox broke the tie in favor of forwarding the rule to the supreme court.

The proposals came from the second Commission for the Revision of the Rules of Professional Conduct, which the state bar launched in 2015 after the California Supreme Court abruptly told the bar to go back to the drawing board in its years-long effort to update the state’s lawyer conduct rules.

The commission worked at breakneck speed to generate a full set of rule updates in less than two years.

“This project was one of the more challenging and rewarding processes I have engaged in during my professional career,” commission chair Justice Lee Edmon told Bloomberg BNA.

“I believe every member of the Commission, including the advisors and staff, is proud of the final work product created,” Edmon said. She’s a justice on the California Court of Appeal Second District in Los Angeles.

None of the proposed rules can take effect unless and until the California Supreme Court gives its stamp of approval. There’s no definite timetable for the court to review and act on the rules.

California is the only state that hasn’t yet remodeled its lawyer conduct rules along the lines of the ABA templates.

Blend of ABA Rules, California Law

Commission member Mark L. Tuft, who’s been involved for many years in initiatives to revise California’s rules, expressed enthusiasm about the proposed updates in an interview with Bloomberg BNA.

“Substantively I feel we did a very good job blending the ABA Model Rules with the law and the statutes that exist in California, and we made great progress in updating the regulations governing lawyers in California,” Tuft said.

Tuft is a partner in the San Francisco office of Cooper, White & Cooper LLP, and he was a vice-chair of the original rules revision commission.

Board of trustees member Michael G. Colantuono praised the package in an interview with Bloomberg BNA, although he expressed reservations about three particular rules.

“The commission did an awful lot of impressive work in a really tight space, and I’m convinced we’re going to end up with a more useful and modern set of rules as a result,” Colantuono said. He’s managing partner and ethics partner at Colantuono, Highsmith & Whatley PC in Grass Valley, Cal.

Sean M. SeLegue, another member of the board of trustees, also applauded the commission’s work in an email to Bloomberg BNA, although he too expressed concern about three particular provisions.

“The Commission deserves kudos for bringing in a gargantuan project on time and with the highest level of care, consideration and deliberation,” SeLegue said. He’s a partner in the San Francisco office of San Francisco office of Arnold & Porter Kaye Scholer, and a former chair of the state bar’s Committee on Professional Responsibility and Conduct.

Alignment With Other States

In an interview with Bloomberg BNA, commission member George S. Cardona, Los Angeles, highlighted several areas in which the proposed revisions would align California’s rules with the rules of other jurisdictions, including several conflicts rules, rules on supervision within law firms, the choice-of-law rule, and advertising rules.

Cardona also noted that the proposed rules contain new duties for situations where lawyers are dealing with people who aren’t their clients. He’s an assistant U.S. Attorney in the Central District of California, but noted that he spoke with Bloomberg BNA in a personal capacity and not on behalf of the government.

Commission member Toby Rothschild praised the commission’s efforts and product in an interview with Bloomberg BNA. He’s a longtime California legal aid lawyer who’s now volunteer of counsel to OneJustice in San Francisco and Los Angeles.

“The commission did a incredible amount of work in a remarkably short time,” Rothschild said. “When we were told we had basically two years, I think everybody assumed there would be a request for extension at some point, but the commission produced a really excellent set of rules within the its two-year time frame,” he said.

The idea of using the ABA format and numbers is a major benefit not only to lawyers from out of state that have used the ABA rules, but also to would-be California lawyers who have to study them to pass the bar exam, Rothschild said.

The Big Picture

The proposed rules mostly adopt the ABA rule numbering system, so they’ll be easier to find and compare with the rules of other jurisdictions.

However, the drafters assigned unique numbers to components of some rules. For example, the proposed rules have unique numbers for the prohibition in Model Rule 1.2(d) against counseling or assisting a client in criminal or fraudulent conduct, the fee-sharing rule in Model Rule 1.5(e), the specific conflicts standards in Model Rule 1.8, and the discrimination rule in Model Rule 8.4(g).

“Rather than having subsections that in effect cover distinct subject matter, for clarity we decided to break those out as sub-rules,” Tuft said.

As for the substance of the proposed revisions, media reports have played up the proposal to stiffen restrictions on lawyer-client sexual relations. However, the 70-rule package contains many other notable features, such as a hybrid current-client conflicts rule, a narrow screening standard for former-client conflicts, and a unique rule on representing clients with diminished capacity.

The draft standards include more than a few rules that will be new for California lawyers, such as a specific rule on duties to prospective clients and rules that set out explicit duties of supervision within law firms.

At the other end of the spectrum, the proposed overhaul carries forward some existing California standards, such as the state’s unusual competence standard and its strict approach to the duty of confidentiality.

‘A More National Standard.’

“We didn’t adopt the Model Rules per se,” Tuft said. “We didn’t pick up everything, and there are differences, so lawyers are going to have to pay attention, and read the nuances that are in our rules.”

“But if they’re adopted by the Supreme Court, California will be in line with a more national standard of lawyer regulation, which is good for us because we have an ever-increasing number of out-of-state lawyers practicing here,” Tuft said.

Tuft noted that California practitioners look at the state’s own rules for disciplinary purposes but consider the Model Rules in nondisciplinary contexts. Lawyers are encouraged to do so, and the courts cite to the Model Rules, he noted. “We’re constantly having to flip the pages between both books,” he said.

“It’s going to really improve understanding, workability and compliance, in my opinion,” Tuft said.

Greater Uniformity.

Cardona noted that uniformity among state rules is especially important with the increasing extent of multijurisdictional practice, such as government lawyers who may be conducting investigations in different jurisdictions.

A number of the proposed rules boost uniformity, including several conflicts rules, Cardona said.

“Rules 1.7, 1.9, 1.0, and 1.11 are much more uniform, which is important,” Cardona said, referring to the rules on current-client conflicts, duties to former clients, imputation of conflicts, and conflicts of government officials and employees.

Also, “the choice-of-law rule, Rule 8.5, now meshes with the approach most other jurisdictions take, avoiding the potential that different jurisdictions are going to apply different rules to a single attorney,” Cardona said.

Cardona also said the proposed supervision rules—Rules 5.1, 5.2, and 5.3—carry into California an approach that’s consistent with other jurisdictions.

Moreover, “the advertising rules, which for a number of people are very important, now are moving much more closely to line up with the ABA rules,” he said.

Cardona also mentioned Rules 4.1 (truthfulness in statements to others) and 4.3 (dealing with unrepresented persons) as notable additions to the professional conduct rules.

“These rules recognize that that just because someone is unrepresented doesn’t mean you can do whatever you want,” Cardona said. “This is an important new concept that wasn’t in the prior California rules,” he said.

Impact of State Bar Act

Tuft noted that lawyers in California are governed not just by rule but by the State Bar Act, which is in the Business and Professions Code.

The commission tried to reconcile potential updates with the act, but some of the recommended rules depart from it in some respects, he said.

Confidentiality is the classic example of a subject covered in the State Bar Act, Tuft said. “So we were restrained in what we could do with confidentiality, but I think we did a good job with Rule 1.6,” he said.

“With multijurisdictional practice we had the same limitation, in that the California Supreme Court by rule of court provides for multijurisdictional practice in various ways,” Tuft said.

The commission was constrained to come up with a version of Rule 5.5 that wouldn’t impede those rules, he said.

Progress on Other Major Duties.

However, “in the terms of the other major duties—conflicts of interest in particular—I thought we made great progress,” Tuft said.

“We’ve adopted the ABA format and structure on conflicts on interest,” he said. Regarding the current-client conflicts rule, the commission kept pieces from California’s existing rule but used the structure and format of Model Rule 1.7, Tuft said.

Tuft noted that the proposed Rule 1.7 has quite a few comments to explain the nuances of the provisions carried into the new rule. However, the commission was directed not to have extensive comments, so the comments to most of the proposed rules are relatively sparse, he said.

The commission also recommended the ABA format and structure for the revised advertising rules, Tuft noted.

Also, California will have rules on duties of supervision for the first time ever if the supreme court agrees with the commission, he said.

Revised Anti-Bias Rule

California’s proposed discrimination rule (Rule 8.4.1) is like Model Rule 8.4(g) but has much more specificity, Tuft said. It covers not only discrimination in employment but also discrimination in the practice of law. The discrimination has to be unlawful, but there are many anti-discrimination statutes in California, he said.

Tuft noted that California was one of the earliest jurisdictions to have a professional conduct rule that prohibited discrimination in employment. However, the rule had a predicate that precluded the state bar from imposing discipline unless a tribunal of competent jurisdiction had made a finding of unlawful discrimination.

As a result, the rule didn’t get enforced, Tuft said. “We learned along the way that there are a lot of aggrieved people who don’t want to sue lawyers They just want to have some redress,” he said. As revised, the rule no longer has that predicate, Tuft said.

“My personal opinion is that the discrimination rule, coupled with the duties of supervision, will go a long ways in enhancing compliance with the law by law firms and small firm lawyers as well,” Tuft said.

Effect on Disciplinary System

The revised discrimination rule didn’t get a resounding endorsement from the board of trustees.

“As a Board member charged with overseeing the State Bar’s operations, including its budget as regards disciplinary functions, I was especially concerned about the impact that Proposed Rule 8.4.1 could have on the disciplinary system by allowing complaints of discrimination by lawyers to be brought in the first instance in the State Bar Court,” SeLegue said.

“That presents important resource-allocation and institutional competence issues as well as a concern that enactment of the rule would create disappointment and disillusionment with complainants when the State Bar decides it is not the appropriate forum for a particular complaint of discrimination,” SeLegue said.

“The Board split evenly on whether to permit this potentially significant expansion of the workload of the State Bar Court and the State Bar’s prosecutorial office, with the tie being broken by the President,” SeLegue said. “This important question is now squarely before the Supreme Court.”

Colantuono also voted against sending the commission’s recommendation to the supreme court. That rule is one of three ways in which the commission exceeded its mission, he said.

“Nobody is speaking in favor of discrimination and nobody is questioning the need to provide adequate remedies for those who are victims of discrimination in our society,” Colantuono said.

But some members of the board of trustees are very skeptical that the bar is well suited to this task as compared to the agencies that are established by the legislature specifically for that purpose, he said.

“So there’s really a debate going on about institutional competence, resource allocation and what’s the best way to do justice,” Colantuono said. “That’s an important debate, and I think the court is going to look closely at the dialogue before making a decision.”

Flat Ban on Sex With Current Clients

Tuft noted that California was one of the earliest states to have a rule on sex with clients, but the rule only covers conduct involving coercion or duress or some improper action on the part of the lawyerThe proposed rule shifts to the stricter standard in the ABA template. New Rule 1.8.10 forbids sexual relations with a current client who isn’t the lawyer’s spouse or registered domestic partner, unless a consensual sexual relationship existed between them when the lawyer-client relationship began. The rule defines “sexual relations” and places conditions on disciplinary charges when someone other than the client complains.

Colantuono said that in his opinion, the new rule goes beyond what the commission was instructed to do.

“In general, the purpose of this update was not to make substantive changes in the law of lawyering,” Colantuono said. The purpose was to update the rules, adopt the ABA numbering system, maintain a set of rules that are capable of being enforced—not aspirational rules, but regulatory rules to run a discipline system—and to eliminate unnecessary differences between California law and national law, he said.

“The commission didn’t quite resist the urge to innovate, and some of the innovations proved controversial,” Colantuono said.

Private Contact With ‘Tribunal.’

According to Colantuono, who specializes in municipal law, the commission also went out of bounds in defining “tribunal” to include local governments when they’re acting in a quasi-judicial capacity for purposes of triggering lawyers’ duties not to engage in ex parte contacts with the tribunal under Rule 3.5 and lawyers’ duties of candor to the tribunal under Rule 3.3.

“I don’t think the commission fully understood the implications of the change that they made,” Colantuono said. There are thousands of local governments in California, and they adjudicate in contexts such as civil service and land use, he noted.

It’s troubling and raises a First Amendment issue to say that that lawyers can’t run into their city council members in the supermarket and talk about land use policy when every other resident of the community can do that, Colantuono said.

“Lawyers who aren’t land use lawyers and aren’t civil service experts will have no idea that they violated the rules of professional conduct when talking to their city council member about a development on their block,” Colantuono said. “That’s going to be the consequence of the rule,” he said.

“I think the commission, through naievete about the complexity of local government practice, has changed the law of the forum in an unhelpful way,” Colantuono said.

SeLegue said he shares that concern. “As an ethics expert, I agreed with Michael Colantuono’s concern regarding the expansion of Rule 3.5, the ex parte contact rule,” he said.

Meaning of ‘Substantial Relationship.’

“I also am concerned about the unique definition of ‘substantial relationship’ the Commission proposes in a comment to proposed Rule 1.9, which regulates former-client conflicts,” SeLegue said.

“The proposed definition in my view incorrectly combines the distinct duties of loyalty and confidentiality that lawyers owe to former clients as well as current clients and may create confusion in a frequently litigated area in which a national standard is especially helpful,” he said.

SeLegue wrote a separate analysis of this issue to be submitted with the Commission’s recommendations.

Unconscionable Fees, Advance Fees

Tuft pointed out that Rule 1.5 on fees retains the standard of “unconscionable” fees instead of moving to the ABA standard of “unreasonable” fees.

He noted that California already has a procedure—the state’s mandatory fee arbitration act—for resolving ordinary lawyer-client disputes about the reasonableness of fees. “That protocol led to a decision to maintain the unconscionability standard for purposes of discipline,” he said.

Tuft also noted that if the supreme court accepts the commission’s proposals, lawyers will have to place advance fees in a client trust account.

“That’s a major change for us,” Tuft said. “I’m surprised there wasn’t more pushback by some lawyers.”

The rule does have a carve-out allowing flat fees to be deposited in a lawyer’s operating account if certain steps are taken, he noted.

Competence, Moral Turpitude

The proposed competence rule (Rule 1.1) retains the standard that the conduct has to be intentional, reckless, repeated, or grossly negligent so as not to expose lawyers to discipline for simple negligence, Tuft said.

“But we did after quite a bit of debate break out the duty of diligence,” Tuft said. That duty is set out in a separate rule (Rule 1.3), but with the same predicate of conduct that’s intentional, reckless, repeated or grossly negligent.

The proposed rules include a modified version of Rule 8.4. However, unlike the version recommended by the original rules revision commission, there’s no reference to moral turpitude in California’s proposed Rule 8.4, Tuft noted.

Moral turpitude is still grounds for discipline under the State Bar Act, Tuft noted. (See Cal. Bus. & Prof. Code §6106.)

Pending Rule on Prosecutor’s Duties

A proposal for amending California’s current rule on prosecutors’ special responsibilities is already pending before the California Supreme Court. The proposal was put on a fast track due to growing concern over wrongful convictions.

The proposed rule covers the same ground as Model Rule 3.8, with some wording differences.

A nearly identical rule is included in the package of proposals that the court received at the end of March.

In particular, the proposed rule would require prosecutors to make timely disclosure when they know of exculpatory information, and would obligate prosecutors to take action when they learn of evidence indicating that a person convicted of a crime didn’t commit it.

Other Differences

Under Model Rule 3.3, a lawyer’s duties of candor to the tribunal in a proceeding continue to the conclusion of the proceeding. But under California’s proposed version, these duties continue “to the conclusion of the proceeding or the representation, whichever comes first.”

Also, California’s proposed rules contain a comment not found in the ABA model on the subject of advising or assisting criminal or fraudulent conduct by a client.

The final comment to Rule 1.2.1 says the rule “permits a lawyer to advise a client regarding the validity, scope, and meaning of California laws that might conflict with federal or tribal law, and, despite such a conflict, to assist a client in conduct that the lawyer reasonably believes is permitted by California statutes, regulations, orders, and other state or local provisions implementing those laws.”

Legal Aid Perspective

Rothschild said the proposed rules contain several provisions that will benefit lawyers in the public interest area and lawyers who work with poor people.

In particular, Rothschild singled out Comment [5] to proposed Rule 1.0, which contains an aspirational statement about pro bono service. It’s valuable to have that comment because the commission didn’t recommend adopting the ABA rule on pro bono service, he said.

Rothschild also highlighted a particular aspect of Rule 1.8.5, which prohibits lawyers from paying a client’s personal or business expenses. Paragraph (b)(4) provides an exception allowing lawyers to pay the costs of “protecting or promoting the interests of an indigent person in a matter in which the lawyer represents the client.”

This exception would allow a lawyer to give an indigent client money for bus fare and breakfast before a hearing if the client couldn’t otherwise get there and would have to come hungry, Rothschild said.

What’s Not There.

A memorandum accompanying the proposals explains why the drafting commission decided against recommending seven ABA standards.

The omitted standards are Model Rule 2.3 (evaluation for use by third parties); Model Rule 5.7 (responsibilities regarding law-related services); Model Rule 6.1 (voluntary pro bono service); Model Rule 6.2 (accepting appointments); Model Rule 6.4 (law reform activities); Model Rule 7.6 (political contributions to get government engagements or appointments by judges); and Model Rule 8.3 (reporting misconduct).

In addition, the proposed rules omit some features of particular ABA rules, such as Model Rule 1.8(d) on literary or media rights.

Lots to Chew On

“I think the product is good, but we’ll see what the supreme court says,” Tuft said. “No one knows how long the court will take. If history is any indication, it will be some time” he said. “It’s quite a bit to chew on.”

Tuft noted that the commission included judges and lawyers from different disciplines, not just ethics experts. Also, the commission had a liaison from the supreme court, “so we knew we were on the right page and we weren’t spinning our wheels,” Tuft said.

“We had an excellent chair, Justice Lee Edmon, who was superb in her leadership,” he also said.

Although the second rules revision commission is now defunct, the board of trustees set up a smaller extended commission to answer questions from the supreme court. The members include Professor Kevin E. Mohr of Western State College of Law in Irvine, Cal., who has worked on the initiative to update the rules for many years as consultant to both the original and second rules revision commissions.


The proposals forwarded to the court are identical to the draft revisions presented to the board, except that the finalized proposals have an additional comment to Rule 1.2.1 on advising or assisting a client’s violation of law.

Materials relating to commission meetings and board of trustees meetings are available through the board’s meetings archive website at http://src.bna.com/nDG.

To locate the proposed rules approved by the board and other and other materials, look for “Thursday, March 9, 2017 to Friday, March 10, 2017" and locate the agendas for that meeting.

Click on Board of Trustees Meeting (3/9/2017 to 3/10/2017), and scroll down to the “700 Miscellaneous” agenda items. Click on item 701 to produce a pop-up with the agenda materials.

The materials include a comprehensive memorandum from the commission to the board about the proposed rules, reports and recommendations for Rules 1.0 - Rules 1.18 and reports and recommendations for Rules 2.1 - 8.5, along with a supplemental report on Rule 1.7.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bna.com

For More Information

The proposed new and amended California Rules of Professional Conduct can be viewed at http://board.calbar.ca.gov/docs/agendaItem/Public/agendaitem1000017137.pdf.

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