Scruples. Legal Ethics and Undercover Investigations

• Author: Michael Downey
• Pages: 64-64

Published in Litigation, Volume 48, Number 2, Winter 2022. © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not

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Scruples

MICHAEL DOWNEY

The author is a legal ethics lawyer at Downey Law Group LLC, St. Louis.

“Ethox,” Paradox asked, “can I advise our cli-

ent about using a secret shopper to prove a

competitor is using intellectual property?”

“Companies can often use secret shop-

pers or testers to conduct undercover inves-

tigations,” Ethox answered. “But whether

a lawyer can counsel how to conduct an

undercover investigation often depends

on three things: the jurisdiction, the cir-

cumstances, and the manner in which the

investigation is performed.”

“Why does the jurisdiction matter?”

Paradox asked.

“The ABA Model Rules and the ethics

rules in most states contain two provisions

that may limit using testers,” Ethox said.

“First, Model Rule 8.4(c) states that it is pro-

fessional misconduct for a lawyer to engage

in conduct that involves ‘dishonesty, fraud,

deceit, or misrepresentation.’

“Second, Rule 8.4(a) states that it is pro-

fessional misconduct for a lawyer to vio-

late the rules ‘through the acts of another,’”

Ethox said. “When combined, these two

prohibitions may impede a lawyer who

wants to counsel a client on how to conduct

an undercover investigation.

“However,” Ethox continued, “a small

group of states expressly allows lawyers

to advise clients on secret-shopper ac-

tivities. Most of these states—like Alaska,

Florida, Iowa, Ohio, and Oregon—have

modified their version of Rule 8.4 or its

comment to expressly allow a lawyer to

advise clients on covert investigations, at

least in some circumstances.

“Wisconsin, meanwhile, has modified

its Rule 4.1—which mandates truthfulness

to third parties—to expressly allow certain

investigative activities that might otherwise

violate that rule, as well as Wisconsin Rule 8.4.

“In some other jurisdictions, ethics opin-

ions or other guidance may allow lawyers

to advise on covert investigations,” Ethox

said, “but it is important to check the ap-

plicable law.”

“OK,” said Paradox, absorbing this infor-

mation. “Why do the circumstances matter?”

“Often the ethics rules I mentioned or

other laws specify what circumstances

must exist for a lawyer to advise on a co-

vert investigation,” Ethox answered. “At

minimum, most jurisdictions require that

the lawyer reasonably believe unlawful

conduct is occurring and that an under-

cover investigation is necessary to confirm

such conduct.

“New York County Lawyers’ Association

Opinion 737 from 2007,” Ethox explained,

“is an influential guide that offers four re-

quirements that must be met before a non-

governmental lawyer may advise an inves-

tigator to use dissemblance to investigate

potential wrongdoing.

“First,” Ethox said, “the investigation

must relate to a violation of civil or intel-

lectual property rights that the lawyer has a

good-faith belief is taking place or will take

place imminently, or the dissemblance must

be expressly authorized by law.

“Second, the evidence must not be reason-

ably available through other lawful means.

“Third,” Ethox continued, paraphrasing

Opinion 737, “the conduct of the supervising

lawyer and investigator must not otherwise

violate ethics rules or applicable law.

“And, fourth, the dissemblance must not

unlawfully or unethically violate the rights

of third parties,” Ethox finished.

“Wow,” Paradox said, “those conditions

impose a pretty rigorous test.”

“I agree,” Ethox said. “That is

why it is often best to choose a jurisdic-

tion that expressly allows the undercover

investigation.”

“OK,” Paradox agreed. “What about

limitations on how the investigation is

performed?”

“One major limitation is that the lawyer

should not be directly involved in the sub-

terfuge,” Ethox answered. “For example,

Alaska expressly prohibits the lawyer’s di-

rect participation.

“Also,” Ethox cautioned, “the client

should use a reputable investigator, some-

one who knows the law in the jurisdiction

and will stay within the bounds of the law.

“Particularly sensitive areas include re-

cording or accessing communications be-

tween third parties,” Ethox continued, “or

entering another’s property to take photo-

graphs or gather evidence.”

“I sure hope you can advise the client and

me on such matters,” Paradox said. q

LEGAL ETHICS AND

UNDERCOVER

INVESTIGATIONS