Tcl - Investigative Tactics: They May Be Legal, but Are They Ethical? - January 2006 - Professional Conduct and Legal Ethics

• Publication year: 2006
• Pages: 43
• Citation: Vol. 35 No. 1 Pg. 43

35 Colo.Law. 43 Colorado Lawyer 2006.

2006, January, Pg. 43. TCL - Investigative Tactics: They May Be Legal, But Are They Ethical? - January 2006 - Professional Conduct and Legal Ethics

The Colorado Lawyer
January 2006
Vol. 35, No. 1 [Page 43]

Articles
Professional Conduct and Legal Ethics

Investigative Tactics: They May Be Legal, But Are They Ethical?

by Rebecca Graves Payne

This column is sponsored by the CBA Ethics Committee Articles published in this column do not necessarily reflect the views of the Committee and may be those only of the individual authors.

Column Editor:

Susan Bernhardt, Denver, of Netzorg, McKeever, Koclanes &amp Bernhardt LLP - (303) 864-1000, sbernhardt@ nmkb.com

About The Author:

This month's article was written by Rebecca Graves Payne,(fn1) Denver, a contract attorney working primarily for Jacobs, Chase, Frick, Kleinkopf & Kelley LLC, where she specializes in commercial litigation - (303) 389-4664 rpayne@JCFKK.com.

This article provides an overview of ethical issues faced by attorneys engaging in investigations on behalf of clients or advising clients conducting their own investigations.

Investigations are extremely useful and often necessary for today's attorneys and clients. For example, investigations to evaluate potential claims for trademark infringement, housing discrimination, sexual harassment, or other suspected misconduct in the workplace can be invaluable. However, attorneys should be aware of ethical rules that have a significant bearing on which investigative tactics and techniques may be deemed proper and which may be overly deceptive. Unfortunately, there are no precise guidelines for Colorado attorneys in the area of undercover investigations(fn2) other than broadly written ethical rules and inconsistent decisions from other jurisdictions. With this in mind, the goal of this article is to provide an overview of issues attorneys should consider and evaluate prior to embarking on any investigation.

Investigator as Agent of the Attorney

Investigators in Colorado are not bound by any ethical rules or guidelines. In fact, Colorado is one of only a few states that does not require investigators to be licensed.(fn3) As a result, absent illegal conduct, there is virtually no limit on what an investigator conducting an investigation on behalf of a private citizen can do.

However, the landscape of appropriate conduct by an investigator drastically changes when hired by an attorney. Pursuant to Colorado Rule of Professional Conduct ("Colo.RPC") 5.3, "Responsibilities Regarding Nonlawyer Assistants," lawyers can be held responsible for unethical actions of their nonlawyer assistants. Paragraph (c) of this rule states: "a lawyer shall be responsible for conduct of [a nonlawyer employed or retained by or associated with a lawyer] that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if: (1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved."(fn4) Similarly, Colo.RPC 8.4(a) states: "[i]t is professional misconduct for a lawyer to . . . knowingly assist or induce another to [violate the rules of professional conduct], or do so through the act of another."

The official comment to Colo.RPC 5.3 includes investigators as a subset of nonlawyer assistants, and stresses: "whether employees or independent contractors, [these assistants] act for the lawyer in rendition of the lawyer's professional services," and thus, "[a] lawyer should give such assistants appropriate instruction and supervision concerning the ethical aspects of their employment." In other words, when hiring an investigator, an attorney has an affirmative duty to "make reasonable efforts" to ensure the investigator's actions "are compatible with the professional responsibilities of the lawyer."(fn5)

Vicarious Responsibility

If a lawyer suspects an investigator has engaged in unethical behavior, the lawyer should take care not to condone or otherwise ratify such behavior. However, even the attorney who disclaims responsibility for an investigator's actions is subject to scrutiny.

A situation involving an attorney's vicarious responsibility for the conduct of his investigator arose in the Eighth Circuit Court of Appeals case, Midwest Motor Sports v. Arctic Cat Sales, Inc.(fn6) There, a snowmobile dealership franchisee represented by counsel brought suit against its franchisor for wrongful termination. During discovery, counsel for the franchisor hired an investigator to pose as a customer at the franchisee's store and secretly tape conversations with employees to determine the validity of the franchisee's claim that it had suffered financial loss. During one of his visits, the investigator recorded a conversation with an individual whom the investigator knew to be the president and owner of the franchisee.

The court held that this conduct violated RPC 4.2, "Communication with Person Represented by Counsel," which forbids a lawyer from communicating with represented parties.(fn7) The attorneys argued they should not be held liable under this rule because they told the investigator only to talk with low-level employees. The court admonished the attorneys for trying to "pass the buck" to their investigator, stating that under RPC 5.3, "lawyers cannot escape responsibility for the wrongdoing they supervise by asserting that it was their agents, not themselves, who committed the wrong."(fn8) It concluded the evidence supported a finding that the attorneys not only ratified(fn9) but also directed their investigator's conduct.(fn10)

The court also concluded that the franchisor's counsel violated RPC 8.4(c), which prohibits an attorney from "engag[ing] in conduct involving dishonesty, fraud, deceit or misrepresentation," because the investigator's conversations "took place under false and misleading pretenses, which [the investigator] made no effort to correct."(fn11) The investigator's taping of his conversations with the franchisee employees, without their consent or knowledge, further reflected this misconduct.(fn12) Although it denied a request for monetary sanctions,(fn13) the court sanctioned the attorneys' unethical conduct by excluding at trial evidence of the recordings and all evidence obtained as a result of the recordings.(fn14)

A recent high-profile case out of Boston involved three attorneys who similarly attempted to "pass the buck" when their investigator went too far during an investigation.(fn15) In this case, the attorneys had represented a client in a complicated stock transfer case that the client lost.(fn16) The attorneys suspected the judge in the case had been biased against their client. To prove their suspicions, they embarked on an investigation targeting the judge's former law clerk.

In an effort to elicit evidence from the clerk that would support the allegations of bias against the judge, the lawyers devised a complex ruse in which they duped the clerk into thinking a large international corporation was interested in hiring him. The attorneys' investigator "interviewed" the clerk on behalf of the phony company(fn17) at various locations, going so far as to fly him to Halifax, Nova Scotia and New York.(fn18) The attorneys finally disclosed their ruse to the clerk, but refused to disclose the tapes to him unless he agreed to "help" them with their case against the judge, intimating his career could be in jeopardy if he refused.(fn19)

In her 229-page report, the Special Hearing Officer rejected arguments by the attorneys that they were, at least initially, "unaware" of the deceptive acts of their investigator. She concluded the attorneys had engaged in unethical conduct, in violation of the Massachusetts equivalent of Rule 8.4(c), and recommended that each one be disbarred. The attorneys have appealed the findings of the Special Hearing Officer and recently filed briefs in support of their appeal.

As the above cases demonstrate, attorneys may not shield themselves from ethical violations by passing the responsibility for deceptive investigative practices to their investigators. Attorneys must make certain that their investigators are aware of the ethical responsibilities imposed on attorneys and also must properly supervise them to ensure they conduct their investigations accordingly.

Client Conduct and Surreptitious Recordings

Secretly recording incriminating conversations can be a useful investigative technique but also can be rife with risks for attorneys. As indicated in the above discussion concerning Arctic Cat, an attorney in South Dakota who secretly records conversations of someone represented by counsel, or who directs an investigator to do so, has engaged in deceptive conduct that is unethical under RPC 4.2 and 8.4(c). Under the longstanding rule in Colorado, attorneys and their agents are prohibited from secretly recording conversations - except under the very limited circumstances described below.(fn20)

On the other hand, a client who is a private citizen, and thus not bound by attorney ethics rules, may secretly record a conversation as long as one party to that conversation consents to the recording.(fn21) This does not, however, completely end the discussion, particularly where the client and attorney communicate with each other concerning the client's illicit recordings.

CBA Ethics Committee Opinion 112

The Colorado Bar Association Ethics Committee ("CBA Ethics Committee")(fn22) recently addressed "Surreptitious Recording of Conversations or Statements" in Formal Opinion 112 ("Opinion 112").(fn23) Opinion 112 generally recognizes:

Because surreptitious recording of conversations or statements...