IV. Receipt of Confidential Information Belonging to Others from One Not Authorized to Have It

• Library: Professional Responsibility in Litigation (ABA) (2016 Ed.)

IV. Receipt of Confidential Information Belonging to Others from One Not Authorized to Have It

Many of the same ethics issues discussed in connection with inadvertent disclosures confront lawyers when they receive adversaries' privileged or confidential information that is clearly intended for them, but is furnished by someone who may not have been authorized to have it in the first place.¹⁵⁷ Consider, for example, a case in which a lawyer represents a plaintiff in employment litigation and laments that the case would be much stronger if only they had some e-mail messages that they are certain that the plaintiff's supervisor must have sent to others in the company. Days later, either hard copies of the supervisor's e-mails appear in the lawyer's mail in a plain manila envelope bearing no return address, or the lawyer takes anonymous delivery of a USB drive containing the contents of all of the supervisor's e-mail folders. The plaintiff denies obtaining the e-mails or arranging for an accomplice to do so. What is the lawyer to do? Should the lawyer deliver the e-mails to the other side unread or should she keep them and attempt to use them to her client's advantage? If the client insists that the lawyer retain the e-mails for use in the litigation, is the lawyer bound to follow the client's instruction? Indeed, lawyers' options when presented with evidence or files that may have been improperly obtained have always been a source of great debate and consternation. This scenario is now aggravated by technological advances that allow litigants and their allies to download staggering amounts of data onto electronic storage devices that seem to get smaller and smaller in size with every passing week.

Castellano v. Winthrop¹⁵⁸ exemplifies both the increasing ease of access to large swaths of information belonging to others and the likeliest of consequences for lawyers and law firms that find themselves holding such information where a court concludes that the documents were illegally obtained by the source. Castellano began as a paternity action which transformed into lengthy litigation involving custody and disputes over the child's care and well-being. After the mother, Castellano, illegally obtained a USB flash drive that belonged to the father and reviewed its contents, she hired a law firm, which then spent more than 100 hours reviewing the contents of the USB drive. The law firm then filed a petition on Castellano's behalf to vacate a prior final order that relied upon information obtained from the USB drive and which, in its title, accused the father of "repeated intentional fraud upon the court."¹⁵⁹ Once the father's lawyers realized that Castellano had obtained the USB drive, they demanded its immediate return. Rather than returning the USB drive, Castellano's law firm filed the contents in the public court record and helped deliver the actual USB drive to law enforcement. The father then filed an emergency motion demanding return of the USB drive, seeking to disqualify Castellano's law firm, and requesting sanctions against Castellano.¹⁶⁰

After an evidentiary hearing, the trial court entered extensive findings of fact, including finding that the USB drive housed "thousands of pages of documents," including privileged communications between the father and his counsel, opinion work product in the form of musings on litigation strategy and even outlines for questioning witnesses, as well as confidential medical, financial, and business information of the father.¹⁶¹ The court also found that the documents did not demonstrate, as Castellano claimed, that the father was perpetrating any crime or fraud. The most damning aspect of the court's findings, however, related to the law firm's conduct in spending over 100 hours reviewing the contents of the USB drive "although it was apparent within moments of inspection that it belonged to the [f]ather and contained attorney/client communications with the [f]ather's current counsel . . . as well as a complete history and chronology of strategy, work product, and confidential communications spanning the near decade-long period of this litigation."¹⁶²

Because an "informational advantage was obtained,"¹⁶³ the trial court concluded that Castellano's law firm had to be disqualified. The trial court also ordered a number of other remedies, including striking the petition, sealing the portions of the court file containing the information, requiring Castellano to return the USB drive and all copies, requiring Castellano and her law firm to delete the information from their computers and to make those computers available to a third party to confirm the deletion, having Castellano and the law firm provide affidavits identifying anyone who had reviewed or been given any of the information on the USB drive, requiring Castellano and the firm to indemnify the father for any damages he might suffer from the improper use of the information, and enjoining Castellano from any use of the USB drive's contents.¹⁶⁴ The trial court left for another day the determination of whether the father should be awarded his attorney's fees as a sanction.

Castellano appealed only the trial court's disqualification of her law firm, arguing that, given all of the other remedial measures, disqualification was unnecessary and prejudicial—an argument that was summarily rejected by the Florida appellate court. The appellate court also embraced a 2007 opinion of the Florida Bar Commission on Professional Ethics and commended it as guidance to indicate that any attorneys faced with a similar situation as the mother's law firm are required to "advise the client that the materials cannot be retained, reviewed, or used without first informing the opposing party that the attorney and/or client have the documents at issue" and that if the client will not consent, then the attorney must cease the representation.¹⁶⁵

Another decision similarly concluding that disqualification of the tainted attorney is required as a remedy where the method of procurement of the documents was not illegal but was unauthorized is In re Marketing Investors Corp.¹⁶⁶ Marketing Investors involved a high-level corporate employee, MacDonald, who, after his termination from the company, removed items from his office, including documents. The company learned in discovery that MacDonald had those documents and asked him to return them and agree not to use them. MacDonald returned the original documents, but kept copies and refused to agree to refrain from using them.¹⁶⁷ Although MacDonald agreed that the documents were privileged, he argued that because "he had access to the documents when he worked for the Corporation, he [was] entitled to possess and use the documents as he [saw] fit."¹⁶⁸ After concluding, based primarily upon the terms of MacDonald's employment agreement, that MacDonald was not entitled to retain the documents, the court identified the factors (previously established by the Texas Supreme Court) that were relevant to determining whether MacDonald's counsel should be disqualified:

1. whether the attorney knew or should have known that the material was privileged;
2. the promptness with which the attorney notifies the opposing side that he or she has received its privileged information;
3. the extent to which the attorney reviews and digests the privileged information;
4. the significance of the privileged information—the extent to which its disclosure may prejudice the movant's claim or defense and the extent to which return of the documents will mitigate that prejudice;
5. the extent to which movant may be at fault for the unauthorized disclosure; and
6. the extent to which the non-movant will suffer prejudice from disqualifying his or her attorney.¹⁶⁹

Based on the application of those factors, the court found that MacDonald's attorney had to be disqualified because his review of the documents was extensive, the documents were incorporated in pleadings, and the attorney had indicated his intention to use the documents going forward. Further, the question of disqualification had arisen early in the litigation when the case was not yet ready for trial and did not involve novel issues that only a few attorneys were qualified to handle.¹⁷⁰

The variations on ways that lawyers can find themselves in a position where they possess documents that could create difficult ethical dilemmas are seemingly unlimited. Assume that you are representing a plaintiff in connection with a workplace injury, and one day he shows up at your office and hands you a letter he says was in his mailbox at work. The letter is written by a defendant in the case and is addressed to her lawyer asking for legal help and outlining thoughts about why your client had sued her, and providing facts about various witnesses that could affect their credibility. Or, imagine instead that you've been engaged by several executives who are interested in suing their former employer. Prior to suing on their behalf, one of your clients tells you that an envelope full of documents showed up mysteriously yesterday at his office, that the envelope does not reflect who sent them, but that he has read them and they appear to be very helpful in that they seem to prove a number of the wrongful things that his former employer was doing. These documents would likely form the basis of his and your other clients' claims against their former employer. The client excitedly tells you that he is on his way to your office to deliver the documents to you for your review.

What would you do in either scenario? The Model Rules are not a source of definitive guidance if the ABA's Standing Committee on Ethics and Professional Responsibility is to be believed. The trail to this conclusion starts back in 1994, when the committee issued a formal opinion that initially answered this kind of thorny question, but it was not based on any sound reasoning tethered to the Model Rules.¹⁷¹ In Formal Op. 94-382...