The Snitch Who Stole Biz'ness: the New Ethics Reporting Rule

• Citation: Vol. 49 No. 1
• Publication year: 2024
• Author: Robert Payne

THE SNITCH WHO STOLE BIZ'NESS: The New Ethics Reporting Rule

Robert Payne
Payne IP Law

(See end of this article for information on receiving 1.0 hour MCLE in ___ self-study credit.)

Maybe it escaped your notice: On August 1, 2023, a new ethics rule was adopted by the California Supreme Court, Rule of Professional Conduct 8.3. California lawyers have lovingly labeled it "The Snitch Rule."

Rejected twice before, the Girardi scandal¹ apparently turned the tide. The State became the last in the nation to enact a colleague-reporting rule or statute.² Tom Girardi—widely known as counsel for Erin Brockovich in her 1996 environmental lawsuit against PG&E and for his marriage to a "Real Housewives of Beverly Hills" star—was disbarred³ for allegedly skimming millions of dollars of client settlement money for decades. Knowledgeable attorneys repeatedly had failed to report him.⁴

Before exploring the lamentations of a reluctant Snitch below, here is a summary of the rule: Rule 8.3 obligates attorneys to inform the Bar or relevant tribunal when they know of credible evidence, raising a "substantial question" that another lawyer has engaged in any of the following: a criminal act, an act involving "dishonesty," fraud, deceit or reckless misrepresentation, or an act of misappropriation of funds or property.⁵ Reporting must be done without "undue delay," meaning as soon as reporting "will not cause material prejudice or damage to the interests of a client."⁶

But there is a bewildering array of exceptions.

"(d) This rule does not require or authorize disclosure of information gained by a lawyer while participating in a substance use or mental health program, or require disclosure

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of information protected by Business and Professions Code section 6068, subdivision (e) and rules 1.6 and 1.8.2; mediation confidentiality; the lawyer-client privilege; other applicable privileges; or by other rules or laws, including information that is confidential under Business and Professions Code section 6234."

Note the further intricacies involved in interpreting each rule and section referenced. Section 6234, for example, bars disclosure of information learned in an attorney diversion and assistance program. Except as provided in section 6234(e). That subsection in turn allows disclosure in the event of noncooperation or unsuccessful completion (whatever that is), except (ironically) "with respect to the provisions of subdivision (d) of Section 6232." (Voluntary self-referral.)

This new rule evokes an administrative rule already governing patent practitioners. The good news: Rule 8.3 may not seem "new" to you; you have already been practicing under a snitch rule.⁷ The bad news: now you have two, similar rules to keep in your head.

"(a) A practitioner who knows that another practitioner has committed a violation of the USPTO Rules of Professional Conduct that raises a substantial question as to that practitioner's honesty, trustworthiness or fitness as a practitioner in other respects, shall inform the

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