Ethics Opinion 904

By Committee on Professional Ethics

GAVEL8

Committee on Professional Ethics

Opinion 904 (1/30/12)
Topic:     Communication with subject of investigation known to be represented by counsel.
Digest:   Under New York Rule 4.2(a), a lawyer representing the victim of an alleged crime for purposes of seeking restitution may not communicate with the subject of a criminal investigation into the same facts if the victim’s lawyer knows that the subject is represented by counsel with respect to the criminal investigation unless the victim’s attorney has the prior consent of that counsel, is authorized by law to communicate with the subject directly, or the criminal defense attorney, upon inquiry, disavows representation with respect to the restitution claim.
Rules:    1.0(k) & (l), 4.2(a) 

QUESTION

1.       When an attorney is seeking restitution for a client who is the victim of an alleged financial crime, may the attorney communicate with the subject of a criminal investigation into the same conduct, if the attorney knows that the subject is represented by counsel with respect to that criminal investigation, without the prior consent of that counsel?

OPINION

2.         The inquiring attorney is representing an investor (the “Investor”) who lost money in a particular investment.  The Investor believes that the investment manager (the “Subject”) caused the loss by engaging in criminal conduct.  The Investor complained to authorities, who commenced a criminal investigation of the Subject.  The Subject has not yet been indicted or arrested, but public news reports indicate that the Subject is represented by legal counsel in the criminal investigation.  The inquirer does not question these reports, so we assume the inquirer “knows” the Subject is represented by counsel – at least in the criminal investigation – within the meaning of Rule 1.0(k) (defining “knows” to denote actual knowledge, but adding that knowledge “may be inferred from circumstances”)
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3.        The Investor has asked the inquiring attorney to contact the Subject directly – not through the Subject’s counsel in the criminal matter – in an attempt, outside the criminal process, to secure restitution of the Investor’s losses.  May the Investor’s lawyer communicate with the Subject outside the presence of and without the prior consent of the Subject’s counsel?

A.        Rule 4.2(a) (the “no-contact” rule)4.        The relevant provision in the New York Rules of Professional Conduct (the “Rules”) is Rule 4.2 (“Communication with Person Represented by Counsel”), commonly called the “no-contact” rule.  Rule 4.2(a) provides as follows:

In representing a client, a lawyer shall not communicate or cause another to communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the prior consent of the other lawyer or is authorized to do so by law.

5.        Thus, under Rule 4.2(a), if a lawyer “knows” that a person is a represented “party” in the same “matter” on which the lawyer represents a client, then communicating with that person about that matter (i.e., communicating about the “subject of the representation”) is prohibited unless the lawyer either (i) has the prior consent of the represented party’s counsel or (ii) the communication is authorized by law.  Neither exception applies here.

B.        Is the Subject known to be represented “in the matter”?6.        In applying Rule 4.2(a), the first question is whether the inquirer’s direct communication with the Subject of the criminal investigation to discuss possible restitution would be about the same “matter” in which the Subject is represented by counsel.  At a minimum, the Investor knows that the Subject is represented in the criminal investigation.  If the question of civil restitution were deemed the same matter as the criminal investigation, then discussing that matter with the Subject would be prohibited by Rule 4.2(a).7.        The term “matter” is defined in Rule 1.0(l) as follows:

”Matter” includes any litigation, judicial or administrative proceeding, case, claim, application, request for a ruling or other determination, contract, controversy, investigation, charge, accusation, arrest, negotiation, arbitration, mediation or any other representation involving a specific party or parties. [Emphasis added.]8.        Thus, the term “matter” expressly includes an “investigation” and a “claim.”  Here, the prosecutor’s criminal investigation and the inquiring attorney’s civil claim for restitution are inextricably intertwined.[1]  Yet they also differ in some ways because the criminal investigation involves parties, processes and issues peculiar to determinations of criminal responsibility.  For example, the prosecutor is a party to the criminal but not the civil matter while the Investor is a party to the civil but not the criminal matter.  Because the two matters are not the same, and for the reasons discussed in paragraph 12 below, the criminal investigation and the civil restitution claim should be considered two related matters rather than a single unitary matter.9.        Given that the civil and criminal matters are distinct, the next question is whether the Subject’s attorney in the criminal investigation also represents him in the civil restitution matter.  (The public news reports mentioned above apparently do not address that question, and even the discussions that gave rise to the attorney-client relationship between the Subject and his attorney may not have addressed it.)  The inquiring attorney has strong reason to believe that – if the question were presented to the Subject and his attorney – the scope of the representation would include both the criminal matter and the civil restitution matter.  As noted above, the civil and criminal aspects are closely related.  Perhaps most important, the Subject’s chosen approach to the civil restitution matter could, in various ways, substantially affect his prospects in the criminal matter.  For example, if the Subject makes substantial restitution, he may be less likely to be prosecuted on criminal charges.  On the other hand, if he is prosecuted despite making restitution, his conduct or words in the course of making restitution might be used against him in the criminal matter.10.      Given the close relationship between the matters and the strong possibility that the scope of representation by the criminal attorney also includes the civil restitution matter, the inquiring attorney may not ignore the no-contact rule or assume it to be inapplicable.  Our prior opinions make clear that “when a lawyer has a reasonable basis to believe that a party may be represented by counsel, then the lawyer has a duty of inquiry to ascertain whether that party is in fact represented by counsel in connection with a particular matter.  The necessary extent of such an inquiry will depend on the circumstances of a particular matter.”  N.Y. State 768 (2003) (citing N.Y. State 735 (2001), N.Y. State 728 (2000), and N.Y. State 663 (1994)).  One of the precedents – N.Y. State 728 – is particularly apposite, given the similarity between its facts and those presented by the current inquiry.11.      When the lawyer not only has a reasonable basis to believe that the party is represented by counsel, but also has a way of ascertaining the name of that counsel, then ordinarily the inquiry must be to the other party’s putative counsel rather than to the party directly.[2]  That is the case here.  The inquiring attorney should initially contact the Subject’s criminal defense attorney, not the Subject.  If the criminal defense attorney says he does not represent the Subject on the civil matter, then Rule 4.2 does not apply and the inquiring attorney may contact the Subject directly regarding the restitution matter.  But if the criminal defense attorney says he does represent the Subject as to the question of civil restitution, then Rule 4.2 would apply.  Our conclusion is supported by the policy underlying the no-contact rule, because the Subject could suffer significant harm in the criminal investigation if he were to make unguarded statements or admissions to the Investor’s lawyer about the underlying facts.12.      The fact that the scope of criminal defense counsel’s representation may or may not include the civil matter is one reason for our conclusion that the civil and criminal matters, while closely related, should be deemed two distinct matters for purposes of Rule 4.2.  If they were considered the same matter, and yet the criminal attorney did not represent the subject as to civil restitution, then it might be impossible for the Investor’s attorney to engage in any discussion with the Subject about civil restitution – even if desired by the Subject – because to comply with Rule 4.2(a) the inquiring attorney would have to seek “prior consent” from an attorney who lacked authority to provide it.  Of course the Subject may not wish to have such discussions with the inquiring attorney, but the rules of legal ethics should leave that choice in the hands of the Subject and his counsel (if any) in the restitution matter.

C.          Is the Subject a “party” within the meaning of Rule 4.2?13.      The remaining question in applying Rule 4.2(a) is whether the Subject of the criminal investigation is a “party,” within the meaning of Rule 4.2, to the civil restitution matter about which the Investor’s attorney seeks to communicate.  In the narrowest sense, the term “party” means a plaintiff or defendant (or the equivalent) in pending litigation.  But this Committee has never read the term “party” so narrowly.  Rather, in civil matters, the definition of “party” as used in Rule 4.2 – and in the definition of “matter” in Rule 1.0(l) – is not limited to formal parties to litigation.  In N.Y. State 735 (2001), which addressed “noncriminal matters,” we stated that the no-contact rule “applies to one who retains counsel in connection with a dispute even prior to the filing of a lawsuit; and during a civil lawsuit it applies to represented witnesses, potential witnesses and others with an interest or right at stake, although they are not nominal parties to the lawsuit.”14.      In N.Y. State 607 (1990), we made clear that formal commencement of an adversarial proceeding in a civil matter is not necessary to trigger an attorney’s ethical duties under Rule 4.2. There, the inquirer represented a party injured in a car accident.  The inquirer wished to write a letter about the accident to the driver that collided with his client, but did not know if the driver was represented by counsel at that pre-litigation stage.  We opined that the term “party” encompassed a potential litigant and that “the absence of a formal commencement of adversarial proceedings did not vitiate” the no-contact rule.  The Third Department echoed this view and cited N.Y. State 607 in McHugh ex rel. Kurtz v. Fitzgerald, 719 N.Y.S.2d 785 (3d Dep’t 2001), which stated that “commencement of the litigation is not the criteria for determining whether communication with an adverse party is in derogation of” the no-contact rule. Rather, the McHugh court expressly stated that a lawyer can violate the no-contact rule even where litigation has not commenced. In light of these authorities, we conclude that the Subject is a “party” to the restitution matter for purposes of Rule 4.2(a) whether or not formal litigation seeking restitution has commenced.15.      Our opinion does not address the conduct of prosecutors and criminal defense counsel and in particular does not decide who qualifies as a “party” in criminal matters.  Our opinion addresses only lawyers representing clients in civil matters.CONCLUSION16.      An attorney representing the victim of an alleged crime for purposes of seeking restitution may not contact the subject of a criminal investigation into the same facts if the attorney for the victim knows that the subject is represented by counsel with respect to the criminal investigation unless (a) the attorney for the victim has the prior consent of that counsel; (b) the attorney is authorized by law to communicate with the subject directly; or (c) the criminal defense attorney, upon inquiry, disavows representation with respect to the restitution claim.

(73-09)

 


[1] The criminal investigation and the civil restitution claim are closely related in several ways.  First, they arise out of the same facts and have one party in common (the Subject).  Second, the Investor is both a claimant seeking civil restitution and the complaining witness whose report led to the criminal investigation.  Third, the question of restitution to the Investor may arise in the potential criminal case as well as in any private discussions between the inquiring attorney and the Subject. [2] See N.Y. County Lawyers 708 (1995) (whereinquiring attorney knew that plaintiff had previously been represented by counsel in the matter, inquirer had an “independent duty” under the no-contact rule “to verify that plaintiff was no longer represented.  It would not have been sufficient to rely on the word of plaintiff alone”); Matter of Searer, 950 F. Supp. 811 (W.D. Mich. 1996) (lawyer was disciplined for meeting with criminal defendant based on defendant’s statement that his lawyer consented to the meeting when in fact his lawyer had not consented); N.Y. City 2009-1 (“while consent may be inferred from the conduct or acquiescence of the represented person’s lawyer, a lawyer communicating with a represented person without securing the other lawyer’s express consent runs the risk of violating the no-contact rule”).
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