If Unnamed Source Provides Opponent’s Info, Opposing Counsel Must Be Promptly Notified

By Joan C. Rogers  

A law firm's examination and use of an opponent's confidential information that it received from an anonymous source does not warrant the firm's disqualification, the Nevada Supreme Court ruled Oct. 6.

Although no Nevada ethics rule directly addresses this situation, Justice James W. Hardesty said for the court, the law firm acted properly by alerting opposing counsel that the firm had received the information, and by not examining the one clearly privileged document among the hundreds on the computer disk it received.

The court used its opinion to specify what lawyers should do when they receive documents from an anonymous source or a third party unrelated to the litigation: notify opposing counsel promptly.

The opinion also sets out factors for trial courts to consider when evaluating a motion to disqualify a lawyer who, without any misdoing of his own, receives unsolicited, confidential information of an opposing party.

Mail From Lebanon.

Bumble and Bumble Products LLC, a maker of high-end salon products, sued several of its distributors after learning that some of its products were being sold at unauthorized retailers.

After filing its complaint, Bumble received an anonymous package from Lebanon at its New York headquarters. The package contained a computer disk and a note stating that the package should be forwarded to Bumble's counsel, John Mowbray.

Within a month, Mowbray disclosed in a supplemental discovery response that a disk had been received from an anonymous source, and he provided a copy of the disk and a copy of the envelope Bumble had received, which bore Lebanese stamps.

The defendants eventually filed a motion objecting to Bumble's possession and use of the documents, and seeking disqualification of Mowbray and his firm, Fennemore Craig. The motion alleged that the disk had come from a former employee of one of the defendant companies, Mohamed Issam Abi Haidar, who had been enjoined in separate litigation from disclosing the company's business secrets.

The district court decided that Mowbray had fulfilled his ethical obligations and should not be disqualified.

Professional Duties.

On the question of what attorneys should do when they receive a document anonymously or from a third party not participating in the litigation, the court found guidance by way of analogy in Nevada Rule of Professional Conduct 4.4(b), which requires a lawyer who receives a document relating to a client's matter to notify the sender if the lawyer realizes or should realize that the material was inadvertently sent.

Although Rule 4.4(b) does not directly apply when a lawyer receives a document not inadvertently but rather by the intentional act of a third party or an anonymous source, Hardesty said, the same notification requirement should apply. The court stated:
An attorney who receives documents regarding a case from an anonymous source must promptly notify opposing counsel, or risk being in violation of his or her ethical duties and/or being disqualified as counsel. Notification must adequately put opposing counsel on notice that the documents were not received in the normal course of discovery and describe, with particularity, the facts and circumstances that explain how the documents or evidence came into counsel's or his or her client's possession.

The notice that Mowbray gave in Bumble's supplemental discovery disclosure fulfilled his professional obligations, the court decided.

Hardesty distinguished several decisions that Bumble's opponents cited, such as Maldonado v. New Jersey, 225 F.R.D. 120, 21 Law. Man. Prof. Conduct 7 (D.N.J. 2004), on the ground that in those cases the attorney's client appeared to have provided the confidential documents and the attorney failed to notify opposing counsel immediately of the client's misconduct.

The court also concluded that Rule 4.4(a) (methods of obtaining evidence that violate third person's legal rights) and Rule 8.4(d) (conduct prejudicial to administration of justice) did not apply here. In cases from other jurisdictions applying those rules to an attorney's receipt of an opponent's documents, the attorneys either played some part in obtaining the documents or were complicit in actions used to wrongfully obtain them, the court said.

The court refused to adopt a “cease, notify and return” rule. In a footnote, it suggested that if Bumble's opponents believed that Mowbray was acting unethically or possessed their privileged information, they should have immediately informed him of their concerns and sought return of the disk and documents from him; if he refused, they could have sought relief from the trial court.

Even if the defendants were in the process of changing counsel when the matter of the disk came up, their counsel nonetheless may have had an obligation under Rule 1.3 (diligence) to promptly object to the use of documents provided by an anonymous source, it added.

Factors in Disqualification Decision.

The question of disqualification remains to be addressed even if the receiving lawyer fulfilled his ethical duties, the court said.

It adopted the six factors described in In re Meador, 968 S.W.2d 346 (Tex. 1998), as a nonexclusive list of circumstances for trial courts to consider when presented with a motion to disqualify a lawyer who has received an opposing party's confidential information, yet played no part in obtaining it:

  • whether the lawyer should have known the material was privileged;
  • how promptly the lawyer notified the other side about the receipt of privileged information;
  • the extent to which the lawyer reviewed and digested the information;
  • the significance of the privileged information
  • the extent to which the party seeking disqualification may be at fault for the unauthorized disclosure; and
  • the extent to which disqualification will hurt the lawyer's client.

These factors weigh against disqualifying Mowbray and his firm, the court found. It pointed out that the disk apparently contained only one privileged document among the 500+ files on it; Mowbray said he did not review that document, and the trial court prohibited its use.

The court also observed that Mowbray speedily notified opposing counsel about receipt of the disk, and it said that Bumble would be harmed it if had to retain new counsel at this point because of the complexity of the litigation.

The parties seeking disqualification were represented by Todd L. Bice of Pisanelli Bice, Las Vegas, and Lance Coburn of Glaser, Weil, Fink, Jacobs, Howard & Shapiro, Las Vegas.

Paul R. Hejmanowski and Samuel S. Lionel of Lionel Sawyer & Collins, Las Vegas, represented Mowbray and Fennemore Craig. Mowbray and Fennemore Craig represented Bumble & Bumble.

 Full text at http://op.bna.com/mopc.nsf/r?Open=kswn-8meu5j.

The ABA/BNA Lawyers’ Manual on Professional Conduct is a joint publication of the American Bar Association Center for Professional Responsibility and BNA.

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