Ethics Opinion 84
DR 4-101; DR 5-105; DR 9-101(B)—Potential Disqualification of Lawyer Who Formerly Served in Government in Non-lawyer Position; Conflict of Interest; Confidences and Secrets of Government Client; When Representation of Private Client in Different Proceedings Constitutes Same “Matter”; Imputed Disqualification
In this opinion, we have occasion to decide when two separate legal proceedings constitute the same “matter” for purposes of disqualification under Canon 9. We conclude that DR 9-101(B) precludes a former government employee from representing a client in connection with possible claims against a party that had been involved in government proceedings in which the lawyer formerly participated, where the private engagement would depend upon related factual and legal issues.
A lawyer in private practice has asked us to consider the propriety of his personal participation in advising an existing client of his firm. The client is seeking advice about possible legal action against a competitor; the competitor was the subject of legal proceedings brought by two government agencies for which the inquiring attorney worked as an economist prior to his admission to the bar. A major issue in the government legal proceedings was the status of that competitor under the antitrust laws. The proposed litigation being considered by the client of the inquiring attorney’s firm is an antitrust suit against the competitor. He asks whether his prior government service bars him and his firm from proceeding with the representation.
The inquiring lawyer actually took part personally in the government legal proceedings in his capacity as an economist (1) by participating in interviews conducted by government attorneys of executives of competing companies and (2) by analyzing documents, including documents that were obtained from the company that was the subject of the government proceedings. The lawyer informs us that most of the documents that he reviewed were or became part of the public record and that he has no independent recollection of any other information.
After completing law school and being admitted to the bar, the inquiring attorney resigned from government service and became associated with a law firm. The client that has asked the firm to consider possible antitrust action was represented by the firm during the inquiring attorney’s service as a government economist. During the government proceedings, the firm submitted a legal analysis to one of the government agencies on behalf of the client setting forth a position that was apparently adverse to the competitor. Among the documents of the competitor that were reviewed by the inquiring attorney while he was with the government were documents relating to the relationship between the competitor and the client that now seeks advice about a possible private civil antitrust action. The inquiring attorney also participated in interviews of executives of another company in the industry that competes both with the target competitor and with the client that his present firm represented and continues to represent.
The firm’s representation of that client in giving antitrust advice about the competitor—and the inquiring lawyer’s possible personal participation in the representation—raise a number of questions. The principal issue is the propriety of pursuing claims on behalf of private clients that are similar to those that were pursued against the same defendant while the lawyer was in government service.
Questions could be raised about the lawyer’s use of information obtained about the prospective defendant or its competitors while in government service to feather his private nest after leaving government service. The use of confidential information acquired in government service as an aid to a private client could easily be perceived as an abuse of official position and would raise questions under the Code of Professional Responsibility. If the individual lawyer were disqualified from personal participation in the representation, there would arise the vexing question of possible imputed disqualification of the entire firm.
The potentially apt disciplinary rules that might apply are DR 4-101 (maintaining confidences and secrets), DR 5-105 (representing conflicting interests), and DR 9-101(B) (participating in “matters” handled while government service). In the matter before us, we find that, although DR 4-101 and DR 5-105 would not bar the inquiring attorney from participation in the representation, DR 9-101 does prevent him from doing so.
1. Confidences and Secrets Obtained by Government Lawyers and Non-Attorney) Staff
DR 4-101 requires that a lawyer maintain the confidences and secrets of his clients, even after his engagement ends, and prohibits him from using those secrets or confidences for his own advantage or the advantage of a third person without the client’s consent. These restrictions represent some of the key provisions that prohibit “switching sides” or profiting from confidential government information. But there is no apparent violation here.
We begin by expressing our belief that an economist working with government lawyers in litigation may come into possession of information that is protected by the attorney-client privilege as a confidence. The same may be said for secrets as defined by the Code. We also assume that the government as client is entitled to at least some of the protection of DR 4-101. The inquiry before us, however, does not suggest that the inquiring attorney will be using the confidences and secrets of the government for his own benefit or for the benefit of his cur rent law firm’s client. He informs us that the relevant information on which he worked came from parties other than the government, and DR 4-101 thus appears inapplicable. Of course, to the extent that the lawyer became privy to litigation strategy questions, he could not use that information to benefit his firm’s client without the government’s consent.
2. Avoidance of Conflict With Interests of Former Client
Under Canon 5, a lawyer is to avoid certain entanglements that might impair his independent professional judgment. The disciplinary rule that is arguably applicable, DR 5-105, is expressly directed at the simultaneous representation of two or more clients with potentially conflicting interests. In our Opinion No. 63, we treated this rule as having a somewhat broader application and as entitling even a former client to bar a lawyer from an adverse representation that has a “substantial relationship” to the prior one.
That test, however, is clearly not applicable here. First, the inquiring attorney was not serving as a lawyer in the government. Second, there is no indication that the firm’s representation is in any way adverse to the government’s interests or that the government has any objection.
3. Restrictions on Practice of Former Government Employees
The principal provision of the Code that deals with the professional responsibility of lawyers who have left government service is Canon 9, which directs lawyers to avoid even the appearance of impropriety.
In response to recommendations by this Committee, the Board of Governors of the District of Columbia Bar petitioned the Court of Appeals in February 1979 to make comprehensive changes in Canon 9 to provide clearer guidance to former government lawyers and their firms. That petition has not been decided. The pending inquiry, however, must be answered under the present Code.
DR 9-101(B) provides:
A lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee.Under the facts provided to us, the proposed conduct of the inquiring attorney would conflict with this disciplinary rule. Our conclusion rests upon the fact that the client is seeking to engage the lawyer in the same “matter” in which he had substantial responsibility as a government employee.
(a) Applicability to Former Non-lawyer Government Employees
The fact pattern presented is unusual in one sense: the inquiring attorney was not a lawyer and was not serving as a lawyer when he was employed by the government. Nevertheless, DR 9-101(B) covers situations of this type, if its other tests are met, since it refers to service as a “public employee” rather than a “public lawyer.” We regard the choice of terms as a deliberate and proper one, since a more typical case may involve a lawyer who serves in an administrative capacity in the government and then leaves to resume the practice of law. We have little doubt that the Code bars a lawyer from undertaking a representation in a matter in which he exercised substantial responsibility while a public official, even if that responsibility was not that of a lawyer.
(b) “Substantial Responsibility” Test for Staff Member
On the facts presented, we also conclude that the inquiring lawyer had “substantial responsibility” in the government proceeding. His role was that of a professional staff member actively involved in the teams that investigated and litigated those proceedings. While he may have had little authority to make major decisions about those proceedings, his involvement was direct, extensive, and substantive, not peripheral, clerical, or formal.
(c) Determination of Same “Matter”
Of greater difficulty here is whether the proposed engagement involves the same “matter” as the term is used in the Code of Professional Responsibility. We have found no authoritative or comprehensive definition of this critical term. The American Bar Association Committee on Ethics and Professional Responsibility stated in its Formal Opinion 342 (November 24, 1975):
Although a precise definition of “matter” as used in the Disciplinary Rule is difficult to formulate, the term seems to contemplate a discrete and isolatable transaction or set of transactions between identifiable parties. Perhaps the scope of the term “matter” may be indicated by examples. The same lawsuit or litigation is the same matter. The same issue of fact involving the same parties and the same situation or conduct is the same matter. By contrast, work as a government employee in drafting, enforcing or interpreting government or agency procedures, regulations, or laws, or in briefing abstract principles of law, does not disqualify the lawyer under DR 9-101(B) from subsequent private employment involving the same regulations, procedures, or points of law; the same “matter” is not involved because there is lacking the discrete, identifiable transactions or conduct involving a particular situation and specific parties.The facts before us lie between the two extremes discussed in Formal Opinion 342. We do not confront the “same lawsuit” or the same issues of fact between the “same parties.” Nor, however, are we concerned merely with abstract antitrust principles.
In our prior opinions, while applying the term to specific contracts, proceedings, claims or disputes that are the same, we have concluded that the term “matter” must have some breadth. See Opinion Nos. 16, 26 and 50. The purpose of the ethical prohibition demands that it extend, for example, beyond instances where there is simply an identity of the formal parties. Thus, even though the advice sought would concern possible antitrust litigation on behalf of private client, we deem that undertaking as involving substantially the same matter. As we understand the situation, many of the underlying facts as well as the pertinent legal principles are the same. The competitor that would be the object of the legal advice and potential private claims is the same party that was the target of the government proceedings. In addition, the firm’s client actually became embroiled in the government proceedings as a non-party witness and source of information.1
In the recent decision by the United States Court of Appeals for the Second Circuit in Armstrong v. McAlpin, 606 F.2d 28 (2d Cir. 1979) (petitions for rehearing granted) the court found that DR 9-101(B) applied to a situation in which the court-appointed receiver of a company sought to engage as his counsel in a case the law firm that had recently hired as an associate the former SEC official who had directed the investigation that led to the filing of the case and the appointment of the receiver in it. We do not necessarily agree with the court’s insistence that the entire firm be disqualified in that case despite a screening mechanism, but it is obvious that the same “matter” was involved, even though the representation did not involve switching to an adverse party. The court seemed to assume that the test for determining what constitutes a “matter” is whether the kind of activity involved raises a risk that the exercise of governmental authority may be “influenced by the prospect of future employment. . . .” That risk is present here.
Further analogous support for our conclusion appears in the Eighth Circuit’s decision in Arkansas v. Dean Foods Products Co., 605 F.2d 380 (8th Cir. 1979). In that case the court held that Canon 4 and Canon 9 required the disqualification of a state assistant attorney general and two members of his staff in an antitrust case that he was directing. The state official had been an associate in private practice at a time when his firm was representing a company that later became one of the antitrust defendants. In those proceedings there had been allegations of price fixing but those allegations were not then pursued. In the firm’s representation during the earlier proceeding, “considerations of sales, structure, customer lists, and purchases” were involved and an “integral element” of that proceeding was the allegation of price fixing that was later leveled by the state in the case directed by the firm’s former associate. The court found that the two matters were “substantially related” for purposes of the principle that allows a former client to disqualify a lawyer who may be perceived as having switched sides.
While the facts before us do not involve the same sort of “switching sides,” the very close relationship between basic facts, pertinent principles, and interested parties suggests that we have here the same “matter” within the meaning of DR 9-101(B). The test used for joinder under the Federal Rules of Civil Procedure also offers some guidance and leads to a similar conclusion. Rule 20 permits persons to join together in a single action if they claim a right to relief “in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences. . . .” Although we do not suggest that the test under DR 9-101(B) is quite this sweeping, that inquiry may help determine when formally separate undertakings or proceedings constitute essentially the same “matter.”
This opinion addresses only the concerns of the Code of Professional Responsibility. If the inquiring lawyer’s access to any of the documents or witnesses when he was a government economist was covered by protective orders, those orders would constitute independent restrictions upon his conduct. Of course, we do not purport to pass upon any other restrictions that may have been imposed by the Ethics in Government Act of 1978, particularly 18 U.S.C. § 207 as amended, or by the Trade Secrets Act, 18 U.S.C. § 1905. Of interest, however, are the regulations issued under the Ethics in Government Act that define the term “matter” as it relates to post-government employment and possible conflicts of interest:
The same particular matter may continue in another form or in part. In determining whether two particular matters are the same, the agency should consider the extent to which the matters involve the same basic facts, related issues, the same or related parties, time elapsed, the same confidential information, and the continuing existence of an important federal interest, 5 C.F.R. § 737.5(c)(4) (1979) (emphasis added).Although the inquiring attorney and his firm must look elsewhere for guidance in considering the possible impact of these federal regulations, this pragmatic concept of “matter” supports our interpretation of DR 9-101(B).
Under all the circumstances, we therefore conclude that the Code bars the inquiring attorney from personally participating in advising his firm’s client on the subject described and from participating in any related litigation.
4. Possible Application of Principle of Imputed Disqualification
Finally, the Committee comes to the inquiring lawyer’s question whether his personal disqualification would be imputed to his firm. The extent to which personal disqualification under Canon 9 should lead to the imputed disqualification of the firm, and possible exceptions to any imputed disqualification, are the subject of the proposals for amendments to the Code of Professional Responsibility that are pending before the District of Columbia Court of Appeals. See “Final Revolving Door Proposals Submitted to D.C. Court of Appeals,” District Lawyer, April/May 1979, at 47. The requirements under the present Code are a matter of dispute. Compare ABA Formal Opinion 342, supra, with Armstrong v. McAlpin, supra. Under the circumstances, the Committee declines to issue an opinion in response to this question.
- In Informal Opinion 1374 (Sept. 7, 1976), the ABA Ethics Committee summarily concluded, without discussion, that the same “matter” was involved and that DR 9-101(B) thus barred former SEC staff lawyers from representing any parties in a private civil suit who had been witnesses in the SEC proceedings that the lawyers had handled and that give rise to the civil suits. The test applied was that the civil claims “arise directly out of the matter which [they] prosecuted” as attorneys for the SEC.