69 The Alabama Lawyer 182 (2008). Fishing with Dynamite: How Lawyers Can Avoid Needless Problems From "Pretextual Calling".

• Author: BY WILL HILL TANKERSLEY and CONRAD ANDERSON IV

The Alabama Lawyer

2008.

69 The Alabama Lawyer 182 (2008).

Fishing with Dynamite: How Lawyers Can Avoid Needless Problems From "Pretextual Calling"

Fishing with Dynamite: How Lawyers Can Avoid Needless Problems From "Pretextual Calling"BY WILL HILL TANKERSLEY and CONRAD ANDERSON IVThe HP Scandal

In January of 2006, Hewlett-Packard's chairman of the board, Patricia ("Pattie") Dunn, was blind-sided by yet another boardroom leak. The online news source, CNET, had just published an article discussing confidential HP long-term business strategy. Plainly, an insider - a director - who opposed the plan had provided the scoop to CNET in hopes of stymieing the new plan. Dunn decided it was high time to look for the leak. David A. Kaplan, Phone-Records Scandal at HP, Newsweek Business-MSNBC.com, http://msnbc.msn.com/id/14687677/site/newsweek/print/1/displaymode/1098/.

Dunn and her fellow leak-hunters did not waste time and energy reading corporate e-mails, tapping phones or conducting video surveillance. Rather, they simply hired an investigator to procure the directors' phone records and review them for contacts with CNET journalists. The investigator obtained the records by calling each director's telephone service provider, pretending to be the director, and requesting that his telephone record be sent to him by e-mail. The service provider then sent the call log to an e-mail account set up by the investigator and, from that point, the hunters had their quarry in plain sight. Id.

The investigation ultimately was successful, or so it seemed at the time. At a board meeting in April 2006, Dunn identified George A. Keyworth as the source of the leaks and he acknowledged such. Although the hunt for the leak was over, Dunn's problems were just beginning. Tom Perkins, a wealthy venture capitalist and fellow HP director was enraged about the secret investigation. In his view, Dunn's leak-hunting methods were illegal or at least unethical and he believed that, like everything else concerning HP in the previous months, the investigation should be revealed to the public. Id.

Dunn was confident about her decisions. She had consulted both the general counsel and chief ethics director of HP prior to taking any action and, according to Dunn, took their advice to mean that the investigative practice was permissible. Even Larry Sonsini, the Silicon Valley legal powerhouse and HP's outside counsel, told the board after the conclusion of the investigation that pretexting "was not generally unlawful." Damon Darlin, Deeper Spying Is Seen in Hewlett Review, New York Times, September 18, 2006, http://www.nytimes.com/2006/09/18/technology/18hp.html.

Dunn and her advisors, however, failed to anticipate the catastrophic fallout from the secret investigation. There were hearings on Capitol Hill, criminal charges were brought and a civil lawsuit was filed. As a result, Hewlett-Packard paid $14.5 million to the State of California, Dunn was removed from her position as board chairman and two of the top counsel for a Fortune 500 company lost their jobs. Other members of the HP Board maintained that they were unaware of the investigation except in the most vague and imprecise terms.

Ultimately, prosecutors offered to dismiss four felony charges against Dunn in exchange for a guilty plea to one misdemeanor. She refused the deal, but shortly after an announcement that she was suffering from a resurgence of cancer, the judge dismissed all criminal charges against her. Matt Richtel, Charges Dismissed in Hewlett-Packard Spying Case, The New York Times, March 15, 2007, http://www.nytimes.com/2007/03/15/technology/15dunn.html. Though Dunn appears to be out of the woods, HP itself is still dealing with the fallout. In August 2007, reporters for CNET whose phone records were accessed during the pretextual investigation filed suit against the company in California State Court. Reuters, 3 Reporters Sue H.P. in Spying Case, The New York Times, August 26, 2007, http://nytimes.com/2007/08/16/business/16hewlett.html. Perkins resigned as an HP director and, otherwise, seems to be resting comfortably on the Maltese Falcon, his 289-foot $150 million yacht.

Consequently, "pretextual calling" has become an investigative tool that is more feared than understood. Some pretexting is plainly illegal. However, other "pretexting" is not only legal and sometimes necessary, but also expressly permissible according to case law and the opinions of authorities on professional ethics - including Alabama's own Center for Professional Responsibility. This article offers guidelines to determine when and how pretexting can be legal and appropriate.

What is "Pretexting"?

Pretexting is a simple investigative tool: The investigator approaches the target and, under the "pretext" of being someone else, obtains information that the target would ordinarily provide to such a person. It is this combination of a disguised identity and freely given information that makes pretexting a valuable, but potentially risky, technique.

The information acquired through such practices, if admissible in court, could have a dramatic effect on the outcome. Pretexting has a powerful confessional element with unguarded (and presumably truthful) responses by an investigative target. Information generated through pretexting may be more readily obtained in comparison to traditional discovery methods. Indeed, use of such a technique could reveal that the target is behaving lawfully, thereby avoiding a conflict. Such "deceptive" investigative methods do, however, raise legal and ethical questions. Even if the laws permit them and the ethics rules technically do not prescribe them, are these seemly tactics for lawyers to use or should they be left to others? How will a jury react to such investigative techniques?

Existing Laws

The criminal consequences of the actions by Dunn and her HP advisors were never conclusively determined. They were charged under California laws with fraudulent wire communications, wrongful use of computer data, identity theft and conspiracy to commit each of those crimes. Before a trial commenced, however, charges against Dunn were dropped, one of the HP advisors entered a guilty plea and the charges against the others were dismissed after they agreed to perform community service. Though it is not entirely clear whether the dismissal of Dunn's charges was due to innocence or illness, the unsettled legal landscape in this emerging area of law likely played a role. Matt Richtel, Charges Dismissed in Hewlett-Packard Spying Case, The New York Times, March 15, 2007, http://www.nytimes.com/2007/03/15/technology/15dunn.html.

As a result of the HP imbroglio, Congress resolved some of the uncertainty about the legality of Dunn and her advisors' activities by passing the Telephone Records and Privacy Protection Act of 2006 ("TRPPA"). Pub. L. No. 109-476 (2007). The TRPPA prohibits obtaining confidential phone records through the use of false or fraudulent statements, representations or documents. It also prohibits purchasing or receiving the records from another, preventing attempts at outsourcing or willful ignorance. Penalties include fines of up to $250,000 and up to ten years in prison. Id.

Prior to the passage of the TRPPA, the Federal Trade Commission used its powers to halt the operations of several online data brokers pedaling consumer phone records. The FTC Act prohibits "unfair practices," defined as those that are likely to cause consumers substantial injury not reasonably avoidable and not outweighed by benefits to consumers or competition, and gives the Commission...