Lawyers' Duty of Truth Telling—Is Deceit Ever Permissible?

Lawyers' Duty of Truth Telling—Is Deceit Ever Permissible?
The New York Law Journal by Anthony E. Davis - January 3, 2012

In his Professional Responsibility column, Anthony E. Davis of Hinshaw & Culbertson writes: This article addresses a profoundly troubling area of legal ethics, the meaning and scope of lawyers' duty of honesty. Why troubling? Because while the governing Rules of Professional Conduct are crystal clear - honesty is not only the best, but the only permissible policy - there are in fact circumstances where the law permits lawyers to engage in certain kinds of conduct that can only be described as dishonest.  This article addresses a profoundly troubling area of legal ethics, the meaning and scope of lawyers' duty of honesty. Why troubling? Because while the governing Rules of Professional Conduct are crystal clear—honesty is not only the best, but the only permissible policy—there are in fact circumstances where the law, beyond the ethics rules, permits lawyers to engage in certain kinds of conduct, either directly or through the use of agents acting on their behalf, that can only be described as dishonest. Generally, when this subject is discussed in any depth, lawyers seem to fall into one of four groups.

Some lawyers take the position that the ethics rules' absolute prohibition of dishonesty on the part of lawyers should govern in all circumstances, without exception. Next to the purists are the lawyers who argue that the only permissible exception should be for government lawyers, particularly prosecutors, who, while prohibited themselves from engaging in deceit, should be permitted—as the law generally provides—to use and direct agents to engage in dishonesty to the extent necessary to apprehend and prosecute miscreants.  Staking out the middle ground, and arguing for a "level playing field" for all members of the bar, and not just government lawyers, some assert that while the rule for lawyers themselves should be absolute, all lawyers—not just prosecutors—should be permitted to use and direct agents (and clients) to engage in limited forms of deceitful conduct to advance clients' legal rights. Finally, at the opposite end of the spectrum from the purists, some lawyers argue that the distinction between using agents and enabling lawyers themselves to engage in dishonest conduct is meaningless and pointless, and that if the objectives of the deceit are appropriate, lawyers themselves, as well as acting through agents, should be permitted to engage in such conduct.1  Let us begin our discussion with a review of the applicable Rules of Professional Conduct (RPC) in New York. RPC 4.1 provides: "Truthfulness In Statements To Others—In the course of representing a client, a lawyer shall not knowingly make a false statement of fact or law to a third person." And, more generally (i.e., in all circumstances, and not just in the course of representing clients), RPC 8.4 provides: "Misconduct—A lawyer or law firm shall not: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; (b) engage in illegal conduct that adversely reflects on the lawyer's honesty, trustworthiness or fitness as a lawyer; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation…"  Thus, as it stands now, the New York rules unambiguously prohibit lawyers from engaging in the prohibited conduct themselves as well as from assisting or inducing others, or acting through others to do so.

Case Law and Ethics Opinions

The issue for New York lawyers has been further complicated over the years in two respects. First, there is case law holding that notwithstanding the ethics rules, evidence gained by the use of deceit, at least when engaged in by lawyers' agents, will be admitted. The leading case for this proposition is Gidatex, S.r.L., v. Campaniello Imports, Ltd.2 There, plaintiff's counsel hired two private investigators to pose as interior designers, visiting defendants' showrooms and warehouse, and to secretly tape-record conversations with defendants' salespeople. The defendants unsuccessfully sought to suppress their evidence based upon the fact that it was obtained in violation of New York's ethics rules.  While the court in the Southern District of New York did not determine whether such conduct should be treated as unethical, and there are no reported instances of professional discipline being imposed in similar circumstances, the possibility nonetheless exists that lawyers may be disciplined in New York for such conduct—as RPC 8.4 in its current form plainly provides. Further complicating the situation is an ethics opinion from the New York County Lawyers' Association which purports to interpret the ethics rules as somehow permitting deceitful conduct, but only in civil rights or trademark infringement cases (see The Committee on Professional Ethics of the New York County Lawyers' Association Formal Opinion 737 ("NYCLA Opinion 737")). But the problem remains because ethics opinions do not trump the plain language of the RPCs, and what is therefore left for lawyers is a dilemma, not a solution.

Into this mix, the New York City Bar has recently issued a Report—"Proposed Amendment to Rule of Professional Conduct 8.4 Regulating Lawyers' Supervision of Undercover Investigations"—which the Professional Responsibility Committee prepared and which the other two committees in the "ethics cluster"—the Professional Ethics Committee and the Professional Discipline Committee—also adopted (the "City Bar 8.4 Report"). The City Bar 8.4 Report proposes that the RPCs be revised so as to bring them into line with the case law and, in effect, with the findings of NYCLA Opinion 737. (Before discussion of the report, it is appropriate to disclose that the author of this article was a member of the Professional Responsibility Committee and was one of the drafters of the report).  The scope of the City Bar 8.4 Report is well summarized in its introduction: "This Report, and proposed amendment to the Rules of Professional Conduct, addresses a serious professional responsibility dilemma repeatedly faced by lawyers confronted with situations requiring the use of "undercover investigations": whether deceptive tactics may be employed by the lawyers themselves, by investigators, by so-called "testers," or by others acting under the lawyers' direction, and if so, under what circumstances?"  The City Bar 8.4 Report begins by an extensive review of the current position in New York, summarized above. The Report also notes that "[n]otwithstanding the [existing] Rules…some New York lawyers…routinely employ officers, agents, inspectors, investigators and testers who engage in what can fairly be called "deceptive" conduct in order to: (i) protect or assert their clients' rights; (ii) pursue good faith claims that a violation of law has taken place; or (iii) establish a defense to claims that a violation of law has taken place. On the other hand, it appears that many lawyers shy away from the use of such methods for the fear that they may run afoul of the [existing RPCs]."  The City Bar 8.4 Report then reviews the different ways other jurisdictions have addressed the same issue. Notably, all four of the different approaches to the issue discussed at the beginning of the article have been adopted by some states. Colorado, for example, has adopted the "purist" view, by imposing an outright prohibition on the use of deceptive tactics by lawyers. In People v. Pautler,3 the Colorado Supreme Court upheld disciplinary sanctions against a state prosecutor who posed as a public defender in order to induce the surrender of a suspect who had confessed to killing three women and raping another. The City Bar 8.4 Report notes that "[a]lthough the Pautler case concerned a lawyer who personally engaged in deceptive conduct (and also grossly interfered with the attorney-client relationship)…it construed the attorney-ethics rules in Colorado, to impose a blanket prohibition on both the direct and supervisory role of attorneys in the commission of deception under any circumstance."  The City Bar 8.4 Report goes on to note that several other jurisdictions have addressed the issue by rewriting their legal ethics rules to permit lawyers to engage in conduct involving the use of undercover investigations in certain limited circumstances. For example, Rule 8.4(a)(3) of the Oregon Rules of Professional Conduct—the functional equivalent of New York Rule 8.4(c)—bans only deception "that reflects adversely on the lawyer's fitness to practice law."4  Oregon Rule 8.4(b) further clarifies that "it shall not be professional misconduct for a lawyer to advise clients or others about or to supervise lawful covert activity in the investigation of violations of civil or criminal law or constitutional rights, provided the lawyer's conduct is otherwise in compliance with these Rules…" The Oregon Rule also defines "covert activity" as "an effort to obtain information on unlawful activity through the use of misrepresentations or other subterfuge," and makes clear that such covert activity may only be commenced or supervised by the lawyer when he or she "in good faith believes there is a reasonable possibility that unlawful activity has taken place, is taking place or will take place in the foreseeable future."5

Continuing, the City Bar 8.4 Report notes that "[t]hus, Oregon permits the use of indirect deception in undercover investigations by all lawyers, regardless of the status of the lawyer or the substantive nature of the claim (i.e., by its terms, the Rule is not limited to criminal, civil rights or intellectual property cases).…Virginia and Florida likewise have adopted rules permitting some deceptive conduct. Although not a formal Rule change, Iowa has adopted the substance of Oregon Rule 8.4(b) in a comment to Rule 32:8.4(c) of the Iowa Rules of Professional Conduct, permitting both criminal and civil lawyers to supervise or participate in lawful covert activity in certain circumstances, regardless of the nature of the claim."  The review of other states' approaches to the problem concludes by noting that "the positions taken in the District of Columbia, Utah, New Jersey, and Illinois are sub-optimal simply because, while they recognize the need for and the propriety of lawyer-supervised undercover investigations, they ignore the fact that the Rules in such jurisdictions do not expressly condone such attorney conduct. Thus, these jurisdictions in effect ignore the problem. Based on this survey, the City Bar 8.4 Report concludes that New York is currently aligned with the jurisdictions that have tacitly approved of lawyer-supervised undercover investigations but have not changed their ethics rules in accordance with that carve out. "Simply put, …there is no Rule in New York that expressly authorizes a lawyer's supervision of agents who engage in deceptive conduct, regardless of motive."

Proposed Rule Amendment

The City Bar 8.4 Report accordingly recommends that New York should adopt the Oregon approach, with a rule change that directly addresses the question of what conduct will, and will not, be permitted by way of exception to Rule 8.4(a)'s mandate that a lawyer shall not violate the Rules of Professional Conduct directly or "through the acts of another." The Report proposes to amend New York Rule 8.4(a) as set forth in italics below:

RULE 8.4: MISCONDUCT

A lawyer or law firm shall not:  (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another, provided, however, that this Rule does not prohibit a lawyer from advising or supervising another in conducting an otherwise lawful undercover investigation that does not violate Rule 4.2;

The Report adds the following important commentary to the Proposed Amendment:

Unlike Opinion 737, the language of the above Proposed Amendment does not refer to any one particular area of substantive law, such as civil rights or intellectual property law. Rather, its mandate is universally applicable to lawyer conduct in all substantive disciplines.  As for a lawyer's personally engaging in the commission of deceptive conduct (as distinguished from the lawyer's supervision of, or giving advice regarding, the deceptive conduct of clients or agents), we are resigned to leave for another day the task of crafting a rule that identifies what conduct may and may not be permissible. Thus, the Proposed Amendment does not address in any fashion a lawyer's personally engaging in deceptive conduct.  Finally, it should also be noted that the Proposed Amendment does not provide a safe harbor for conduct that would otherwise violate Rule 4.2: Communication with Person Represented by Counsel. Thus, the uses of undercover investigations that would be authorized by the Proposed Amendment would not extend to conduct that would otherwise violate Rule 4.2. Nor is the Proposed Amendment intended to restrict in any way undercover communications with represented parties otherwise permissible under Rule 4.2 as part of a law enforcement investigation.  These considerations are set forth in a proposed Comment [6A], which would accompany the Proposed Amendment:

Comment - [6A] Notwithstanding the general restriction against engaging in deceit, a lawyer may advise or supervise another who engages in an otherwise lawful and ethical undercover investigation, in which the investigator does not disclose his or her true identity and motivation, regardless of the nature of the matter or substantive area of law involved. This Rule does not effect any change in the scope of a lawyer's obligations under Rule 4.2, and thus a lawyer must take reasonable measures so that the investigator does not communicate with a represented party in violation of Rule 4.2, does not seek to elicit privileged information, and otherwise acts in compliance with these Rules, court orders, and civil and criminal law.

As noted at the beginning of this article, the City Bar 8.4 Report adopts the position of those who believe that lawyers should not themselves be permitted to engage in deceit, but should be able to advise and assist others, acting as their agents, to engage in dishonesty to the extent encompassed by otherwise lawful acts of undercover investigations. Inevitably, this will not appeal to those who adhere strongly to one of the other three positions commonly held within the profession. In its favor, however, the city bar's proposed rule change would reconcile New York's RPCs with what is permissible under relevant case law and ethics opinions, would "level the playing field" as between lawyers in private practice and government lawyers, and would free lawyers to use otherwise lawful (but hitherto ethically impermissible) means to explore illegal conduct.  Before concluding, the City Bar 8.4 Report notes the existence of an "argument that the Proposed Amendment would run counter to Section 487 of New York's Judiciary Law, which defines a misdemeanor and creates a private cause of action, with treble damages, against any attorney who, inter alia, '[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.' It may be that some conduct covered by the Proposed Amendment—much like the conduct already condoned in Gidatex and other case law—would violate Section 487 under certain circumstances. If so, a change to Judiciary Law Section 487 may be required."  The conclusion of the City Bar 8.4 Report states, "…that the addition of Proposed Amendment is necessary in light of the lack of synchronicity between the plain language of the aforementioned NY Rules on the one hand, and well-established practices among prosecutors and civil lawyers in certain contexts, as well as judicial and other precedent, on the other. We further believe that the attorney conduct that would be authorized by the Proposed Amendment furthers the State's interest in identifying and curbing unlawful activity, whether criminal or civil, and regardless of the nature of the claim." It is to be hoped that the proposed change will be adopted, in order both to remove the disconnect that presently exists between what the RPCs actually state and the practices that are accepted and permitted by the courts and in NYCLA Opinion 737, and to level the playing field for undercover investigations as between lawyers in private practice and government lawyers.  Anthony E. Davis is a partner at Hinshaw & Culbertson and a past president of the Association of Professional Responsibility Lawyers.

Endnotes:
1. For a powerful intellectual justification for permitting lawyers to lie, see William H. Simon, "Virtuous Lying: A Critique of Quasi-Categorical Moralism," Georgetown Journal of Legal Ethics, Vol. 12:433 1999.
2. 82 F.Supp.2d 119 (S.D.N.Y. 1999).
3. 35 P.3d 571 (Colo.O.P.D.J. 2001), aff'd 47 P.3d 1175 (Colo. 2002).
4. Oregon Rule 8.4(a)(3).
5. Oregon Rule 8.4(b).