Opinions

Ethics Opinion 339

Threat of Criminal Referral In Civil Debt Collection Matter


Lawyers violate D.C. Rule 8.4(g) when they threaten criminal charges for the sole purpose of securing an advantage in a civil matter. In the context of a debt collection action, the mere citation of or reference to a criminal statute during the course of the action does not constitute a per se violation of this Rule. A further reference to the potential for a criminal referral if the debt is knowingly paid with a check drawn on insufficient funds does not violate our Rules unless phrased in a manner that is likely to mislead or confuse the recipient. 

Applicable Rules

  • Rule 4.1 (Truthfulness in Statements to Others)
  • Rule 4.3 (Dealing with Unrepresented Person)
  • Rule 8.4 (Misconduct)

Inquiry
The Committee has received an inquiry on a matter relating to the obligation of an attorney under D.C. Rule 8.4(g). Inquirer is a practitioner who engages in commercial collection work on behalf of clients. We are advised that situations often arise where the alleged debtor responds to a demand for payment by writing a check on an account with insufficient funds. 

Under District of Columbia law, if the drafter of a check drawn on insufficient funds (a “bounced check”) fails to cure the default within 5 days of having been notified of the insufficiency, that failure constitutes prima facie evidence of a criminal intent to defraud and of knowledge that the account on which the check was drawn had insufficient funds. See D.C. Code § 22-1510. In effect, once debtors receive notice that a check has bounced, if they do not fund the check promptly they are at substantial risk of criminal charges and, because of the effect of the District’s rules relating to proof, of conviction.

We are asked whether a standard form commercial collection demand letter may explicitly refer to the D.C. Code provisions that criminalize the writing of a check drawn on insufficient funds and the related provisions regarding notice, cure, and the presumption of intent. If it may, we are further asked whether the demand letter may advise the recipient that, in the event a bounced check is not funded, the inquirer may refer the matter to prosecution authorities for their review.

Discussion
A. Basic Principles

Rule 8.4(g) of the D.C. Rules of Professional Conduct makes it professional misconduct for a lawyer to "seek or threaten to seek criminal charges . . . solely to obtain an advantage in a civil matter."

Notably, this prohibition does not form a part of the Model Rules adopted by the American Bar Association. It was long a part of the Model Code of Professional Responsibility (see DR 7-105(A)), but it was omitted from the newer Model Rules. The differing explanations for that omission from the Model Rules (and conversely, for inclusion of the provision in the District’s Rules) point to the two major themes that recur in interpretation of the provision.

Some say that the prohibition in Rule 8.4(g) was omitted from the Model Rules because it was overbroad and prohibited legitimate negotiating tactics. See Committee on Legal Ethics v. Printz, 416 S.E.2d 720, 722-23 (1992) (relying on 1 G. Hazard & W. Hodes, Law of Lawyering § 4:4:102 (2d ed. 1990)). On this reading, there are situations in which the reference to related criminal charges is considered an appropriate tactic. E.g. Alaska Ethics Op. 97-2 (1997) (allowing explicit threat of criminal referral); Mich. Ethics Op. RI-78 (1991) (because Rule 8.4(g) had been omitted, no specific ethical rule prohibits a lawyer from calling to the attention of an opposing party the possible applicability of a penal statute or making reference to specific criminal sanctions or from warning of the possibility of criminal prosecution).

Others, however, argue that the omission of Rule 8.4(g) from the Model Rules was simply because other provisions of the rules already prohibited the making of extortionate, fraudulent, or otherwise abusive threats. See ABA Formal Op. 92-363 (1992); Fla. Ethics Op. 89-3 (1989). On this reading, Rule 8.4(g)’s prohibition addresses conduct that is, in nearly all circumstances, improper under other applicable Rules or laws.[1]

The principal guidance we have as to the purpose behind the decision of our own Court of Appeals to adopt the Rule is the explanatory language of the District of Columbia Bar Jordan Committee when it first forwarded proposed Rule 8.4 to the Court of Appeals. There the Committee explained that “the conduct prohibited by paragraph (g) ... is tantamount to common law blackmail [and is] serious enough, and its occurrence frequent enough, that a rule clearly forbidding that conduct [is] needed.” See D.C. Bar Legal Ethics Op. No. 220 n.1 (quoting Jordan Committee).[2]

One of our prior opinions provides some additional indication of the scope of the rule. In Opinion 220, we considered the circumstances under which a threat to file a disciplinary action against an opposing attorney (conduct also prohibited by Rule 8.4(g)) would violate the Rule.[3] There we identified two salient factors that guided the Committee’s analysis.

First, we noted that in situations where an explicit reference to the charges was made “[t]he only question under Rule 8.4(g) is whether the charges were threatened or filed ‘solely to obtain an advantage in a civil matter.’” Id. (emphasis in Op. 220) (footnote omitted). Thus, we stressed that the text of the Rule makes the operative question whether civil advantage is the only purpose motivating the threat. This, of course, would tend towards a narrowing construction of the prohibition.

In other jurisdictions, such as Connecticut, where the same prohibition exists, substantial weight also has been given to the use of the phrase “solely.” Thus, the Connecticut equivalent of Rule 8.4(g) (Rule 3.4(7) in its numbering system) has not been read as a blanket prohibition on all mention of criminal law. Rather, as Connecticut courts have held, see Somers v. Statewide Grievance Comm., 245 Conn. 277, 292 (1998), the key to interpreting the Rule lies in the use of the word “solely” in the phrase, “solely to obtain an advantage in a civil action.” Somers makes it clear that there is no per se prohibition against simultaneously pursuing a criminal complaint and a civil action against the same party unless the attorney’s sole reason for filing a criminal complaint is to seek an advantage in the civil action.

Somers also pointed out that the court will investigate the attorney’s motive and intention in filing the criminal complaint as part of its examination as to whether gaining an advantage in the civil action was the attorney’s “sole” reason. See also Conn. Ethics Op. 99-50 (1999) (attorney may civilly seek restitution on an alleged debt while a criminal matter is pending so long as the complainant does not condition an agreement to drop the prosecution on the settlement of the alleged debt). While this inquiry may protect a lawyer’s appropriate acts, it should be emphasized that courts interpreting Rule 8.4(g) seldom mention this single motive limitation, and reliance on a multiple motive defense is risky. See, e.g., People ex rel. Gallagher v. Hertz, 608 P.2d 335 (Colo. 1979) (implicitly rejecting a multiple motive defense).

This leads directly to the second aspect of our Opinion 220. Pointing out that the focus on motive precluded a categorical rule, we noted that the “determination of for what purpose or purposes the ... charges at issue were threatened is a factual question” and thus one that is typically beyond the scope of the Committee’s capacity to adjudicate. Id.

We agree that each inquiry is fact specific. Thus, it appears as a general rule that if the attorney has at least one other bona fide reason to counsel or threaten a criminal prosecution while a civil action is pending or intended, he or she may enjoy the advantage in a civil action without violating the rule. Typically, however, the existence of this “other motive” will be a fact-driven inquiry; notwithstanding the analysis that follows, a cautious practitioner will not place too great a reliance on his or her ability to convince an observer ex post of the existence of an ex ante justification.[4]

B. Analysis
Relying on the forgoing, we might be inclined to offer no firm opinion on the pending inquiry - reasoning that the motive of the inquirer is a fact-specific question as to which we lack adequate information. That course, however, would fail to give Rule 8.4(g) any great effect since the specter of a Bar Counsel inquiry, while daunting, is sufficiently rare as to not be a likely vehicle for the development of a common law of acceptable Rule 8.4(g) practice. Moreover, we consider it significantly more valuable for practitioners in this jurisdiction to have the benefit of our guidance than to be left with the uncertainty of a case-by-case development of the prohibition. 

To be sure, some questions cannot be answered in an advisory opinion such as this, because motivations may well be obscured. But, we have concluded that the inquirer’s question is sufficiently clear and well-defined that we can offer some guidance while also advancing certain general principles that may apply to other matters.[5]

To provide the context for our discussion, and because we have said that context is critical, we address in this opinion an idealized collection letter of the following form:

Clause 1: Creditor, my client, alleges that you, Debtor, owe him a debt in the amount of $X.

Clause 2: On his behalf I demand payment.

Clause 3: You may settle this demand by writing a check in the amount of $X.

Clause 4: In the District of Columbia, it is a crime to intentionally pay with a "bad check" - that is, one you know will bounce. If, after paying with the check, you are told that you don’t have enough money in the bank to cover it, you will have 5 days to deposit sufficient funds. If you fail to do so, that can be used as evidence that you intended to pay with a bad check.

Clause 5: If you attempt to settle this debt with a check drawn on insufficient funds, I may refer this matter to the police for investigation and prosecution.

Clearly, the first three clauses of this idealized letter are nothing more than a typical, permissible demand letter. Our opinion focuses on whether the fourth and fifth clauses may also be included. And as to each clause we ask two distinct questions: Is it a threat? And, if so, is it a threat made solely for the purpose of gaining advantage in a civil matter.

 1. Citation to or Quotation of Applicable Law: We begin with the fourth clause, in which the writer cites to, or quotes the D.C. Code provisions that relate to bounced checks. We believe that citation and/or quotation of the law, without any characterization of it, is permissible because it is not reasonably construed as a per se threat.

To be sure, we recognize that the citation of the criminal provisions of law is intended to have the collateral effect of achieving payment of the alleged outstanding debt through a check drawn on sufficient funds. We recognize as well that the inquirer’s desire to call attention to the criminal law is, as we have been told, the result of past experience and an attempt to avoid similar problems in the future.

But having a collateral effect is not, in our view, equivalent to making a “threat” in order to achieve that effect. There are any number of situations in which a lawyer might reasonably cite to applicable law, and we would be reluctant to apply a per se rule prohibiting the citation of law. It would be odd, indeed, if a lawyer could not cite a potential sanction or reference a criminal provision in any agreement or discussion with a third party. Citation of underlying fraud law in this context is, in our view, no more a threat than is the routine situation in a discovery deposition where an adversary lawyer advises a deponent of the potential penalties for perjury. We, therefore, are unwilling to assume that the mere citation or quotation of a criminal law, without more, constitutes a threat of prosecution.[6]

Our conclusion that the mere citation of law is not threat is, of course, subject to other limitations contained in our Rules. Under Rule 4.1, a lawyer may not make a misleading statement of fact or law to a third party. And, under Rule 4.3, a lawyer may not provide advice to an unrepresented party. As a general matter, we think that the simple citation of an applicable criminal rule will violate neither prohibition inasmuch as it will, if accurate, not be misleading; furthermore, without any recommendation as to appropriate action, the citation cannot be construed as the provision of “advice.” There may, however, be situations in which a lawyer’s conduct violates these Rules – as, for example, if a selective quotation omits a relevant portion of the law. Thus, while the context of any citation to the law will always need to be examined, in our view the simple reference to a potentially applicable criminal law does not per se fall afoul of D.C. Rule 8.4(g).

2. Potential Referral to Prosecutor: We next turn to the question presented by the fifth clause of our notional letter: whether inquirer may go further than citing the applicable law and inform the recipient of the letter that, in addition to, or in lieu of, a suit to collect the alleged debt, the inquirer may bring the matter of any bounced check that is not promptly funded to the attention of the prosecuting authorities who may then independently choose to prosecute any violation.

To begin with, we think it beyond dispute that such a statement is a “threat” under any meaningful construction of that term. To be sure, the statement of one’s legal options is also a statement of fact. But by contrast with a simple citation of law, the statement that one may refer a matter to the prosecuting authorities constitutes an explicit suggestion that the inquirer may (or perhaps will) take a particular action – moving the demand letter beyond a citation of law to a threat to take steps to see the law implemented.  

We are left then with the question of whether this threat is solely to gain advantage in a civil matter. And here, the rather confused nature of the “threat” involved creates uncertainties in the analysis.

For this is not a threat directly relating to the underlying claim of a debt. The inquirer does not wish to draft a collection letter that says “if you do not pay the debt I may refer the matter to the police.” As well he should not, for we would have little trouble in concluding that such a threat tied directly to the alleged debt would contravene our Rules. Here, however, the threat is directed at a future act to be done by the creditor – and one that is not certain to occur. Thus, the threat is a contingent one based upon a yet-to-occur set of facts: “if you pay the debt and if you pay it with a bad check, and then do not fund it after I provide notice that the check is unfunded, then I may refer the matter to the police.”

Thus, under one construction, the “threat” (of referral if payment is made by way of an unfunded check) is not connected to the civil action, which has as its objective the collection of the debt and is, at least upon initiation, agnostic as to the means by which the debt is paid – check, money order, cash or, conceivably, in-kind services. And a relatively innocuous reference of the form that might be used (e.g. “failure to pay with a check drawn on sufficient funds may result in referral of this matter for prosecution”) is quite distant from the threats of “blackmail” or extortion that motivated the Jordan Committee to include Rule 8.4(g) in our Rules.[7]

This construction is buttressed by the requirements of the District Code that make notice and an opportunity to cure effectively a prerequisite for a successful criminal prosecution for paying a debt with a bad check. Thus, the situation here might be analogized to that in other jurisdictions where ethics committees have opined that letters referring to the criminal sanctions imposed for stopping payment on a check were not sent solely for the purpose of gaining an advantage in a civil matter. See, e.g., Decato’s Case, 379 A.2d 825 (N.H. 1977); Florida Ethics Op. 85-3; Georgia Ethics Op. 26 (1980); Utah Ethics Op. 71 (1979). Each of these opinions rested on the fact that state law imposes a requirement of such notification before bringing a civil action – in other words, the premise is that the Rules of Professional Conduct cannot prohibit that which underlying local law requires for the zealous representation of a client.   

But another more troubling construction is also possible. Unlike the situations just referred to, D.C. law does not mandate the drafting of a demand letter as a pre-requisite to a claim; rather it provides that the failure to respond to such a letter has evidentiary consequences. Moreover, in each of the instances referenced above, the attorney was responding to an act by the debtor that had already occurred – the stopping of payment on a check already drawn. By contrast, here the inquirer is writing in respect of an event that has yet to occur – the payment of the alleged debt by means of an unfunded check.

Given these factors, the proposed fifth clause of the demand letter does raise concerns. In light of the contingent nature of the threat, and especially when one considers that the recipient of a demand letter of the form suggested is likely to be unschooled in the law, the context in which the letter is sent and the identity of the recipient might give rise to questions concerning the senders’ true motive. A lawyer who knowingly blurs this distinction in a demand letter may be in violation of Rules 4.1, 8.4(c) and 8.4(g) as well as District statutes relating to wrongful debt collection tactics or blackmail.[8]

And we cannot, of course, assume that all claims of debt are incontestable – to the contrary, the debtor may well have valid defenses to the alleged debt. The possibility exists that, confusing the threat of referral for a bad payment with the threat of referral for a non-payment, the debtor may be misleadingly induced to forgo these legitimate grounds for contesting the debt.

The extent to which confusion is likely is, of course, an empirical question as to which the Committee has no data and regarding which the members of the Committee have divergent views. Some consider such confusion highly likely; others much less so.

In the end, however, it is clear to a majority of the Committee that Rule 8.4(g) is not the appropriate vehicle for addressing these empirical concerns. The Rule speaks to a prohibition on threats made “solely” for advantage. Here, the inquirer has articulated a clear and plausible alternate motivation – his experience that many creditors pay with unfunded checks and his desire to avoid the costs and inconvenience associated with that occurrence. We credit such experience. And even if we were disinclined to do so, for purposes of an advisory opinion such as this, we are bound to accept such an articulated representation at face value. See Rule E-5, Rules of the D.C. Bar Legal Ethics Committee (“The Committee assumes the facts, as stated in the inquiry, are accurate, and ordinarily it will not look beyond those stated.”). Given this eminently plausible alternate motivation we are convinced that Rule 8.4(g) is not violated by this type of threat of referral if the lawyer writing the demand letter is acting with a similar motivation.

Of course it goes without saying that a lawyer may not use this alternate motivation as a pretext for including threatening language in a demand letter merely to intimidate unsophisticated recipients. That would violate the Rule. Whether any individual lawyer has the requisite motivation in any particular case is, of course, a “factual question which this Committee is not equipped to decide.” D.C. Ethics Op. 220.

Moreover, caution must be exercised when drafting a form collection letter that contains an analog to the fifth clause. As we have already noted, Rule 4.1 prohibits the making of misleading statements – and we can certainly imagine a letter being drafted that, either by omission of relevant qualifying information or by inclusion of material that goes beyond a simple statement of intent would become, in context, misleading. Thus, the careful practitioner should not read this opinion as an authorization for collection techniques that amount to “high-pressure tactics” or confusing conduct.

Indeed, though it is not required by our rules, the potential for confusion may be ameliorated to a degree by a disclaimer, explicitly advising the recipient of the letter of his right to contest the underlying debt and noting that the criminal laws refer to the means of payment, not whether a payment is, in fact, due. In essence, the inclusion of the fifth clause is assuredly made less misleading if another clause clarifies that “you may contest the debt. The potential for criminal referral arises only if you choose not to contest the debt and then pay the debt with a bad check.”

In the end, however, even without such a disclaimer, we are of the view that an appropriately couched reference to the potential for a criminal referral of the matter that is based upon an attorney’s prior experience or other non-pretextual motivation and that is contained in a form letter is not, per se a threat made “solely” for advantage in a civil action. We cannot say that such references are, in all instances, prohibited by Rule 8.4(g).

Conclusion
In sum, the mere citation of a criminal statute or a reference to a criminal sanction that does not mischaracterize the sanction is, in our view, permissible under the Rules. A statement that the attorney may refer the matter for prosecution if payment is made through an unfunded check is not prohibited, though a cautious practitioner will consider accompanying any such reference with a suitable disclaimer.

Inquiry No: 06-01-01
Adopted: April 2007

  1. [Return to text] As ABA Formal Op. 94-383 makes clear, the use of a threat of a criminal prosecution may also violate Rule 8.4(b) to the extent that the conduct is extortionate under the criminal laws of a jurisdiction. Most notably in the District “A person commits the offense of blackmail if, with intent to obtain property of another or to cause another to do or refrain from doing any act, that person threatens * * * [t]o accuses any person of a crime.” D.C. Code § 22-3252. While the collection letter we consider here is well short of this standard, attorneys should be mindful of the strictures of Rule 8.4(b) and District law. They should also refrain from any effort to exert improper influence over the criminal process or any suggestion of the capacity to exert such influence.
  2. [Return to text] Other jurisdictions couch the analysis in similar fashion: In jurisdictions where Rule 8.4(g) or its equivalent was completely omitted, it has been held that criminal charges may be threatened when the lawyer has a good faith belief that they are warranted by the facts. See Utah Ethics Op. 03-04 (2003). Conversely, in jurisdictions where Rule 8.4(g) or its equivalent exists, the limitations on attorney conduct have been read more stringently. E.g. Conn. Ethics Op. 00-24 (2000) (forbidding prosecutor from conditioning dismissal of criminal charges on dismissal of civil counter-complaint).
  3. [Return to text] We also addressed Rule 8.4(g) tangentially in Opinion 263. There we concluded that seeking to initiate a criminal contempt proceeding for violation of a Civil Protective Order was not, under District law, seeking to initiate a criminal charge. As a consequence, the attorney’s threat to seek criminal contempt fell outside the ambit of Rule 8.4(g)’s prohibition.
  4. [Return to text] We note, as well, that provisions of the D.C. Code place limits on the manner and means by which a debt may be collected. See e.g. D.C. Code § 28-3814 (c)(5) (prohibiting “threat that nonpayment of an alleged claim will result in the arrest of any person”). It goes without saying that the practice of an attorney collecting a debt within the District must conform to District law. The question here is whether the Rules of Professional Conduct impose obligations beyond those imposed by generally applicable statutes.
  5. [Return to text] The inquirer also asked about limitations on his ability to instruct his client to proceed independently in a certain course of action whenever a situation to which his instructions might apply arises. Because a lawyer may not advise another to act in a manner that contravenes these Rules any more than he may act himself, our answer to the question of what a lawyer may do independently also controls what he may advise a client to do.
  6. [Return to text] Even were the citation of law construed as a “threat” we also think that the mere citation of a potentially applicable law in a communication cannot per se be deemed “solely” for the purpose of achieving an advantage in the pending civil matter. The existence of alternate purposes for the citation of law seems sufficiently likely to make a per se rule unreasonable.
  7. [Return to text] Indeed, this threat is not quintessential “blackmail” – a situation in which one is threatened concerning an act that has already occurred. Ordinarily, one is not subject to blackmail (which, the Jordan Committee reminds us is at the core of the concerns underlying Rule 8.4(g)) for acts that have not yet been completed. This is why Rule 8.4(g) would not apply to any threat made by a lawyer to a witness during a deposition (e.g., that if you don’t testify honestly, you can be prosecuted) and also counsels against a blanket per se extension of Rule 8.4(g) to the circumstances under consideration in this opinion.
  8. [Return to text] To demonstrate the point, consider the absurd hypothetical in which the fifth clause of our notional letter instead reads: “By the way, jaywalking is a misdemeanor and if I observe you jaywalking I will refer you to the prosecutor.” Such a threat, so clearly distinct from the underlying effort to collect a debt, would not be for the purpose of gaining an advantage in the civil action. The issue that arises with the proposed action we consider here is that, though distinct from the underlying debt collection, the action for payment with a bounced check is sufficiently closely related that we cannot disregard the real possibility of confusion.

April 2007