Nevada Supreme Court says lawyer should not be disqualified for using confidential information from anonymous source

Hello everyone and welcome to this JACPA Ethics Alert.  This Ethics Alert will discuss the recent Nevada Supreme Court case which held that a lawyer who received and used confidential/privileged information from an anonymous source in litigation should not be disqualified because he promptly notified opposing counsel of the anonymous disclosure and did not review any privileged information contained in it. The case is: Merits Incentives, LLC v. The Eight Judicial District Court of the State of Nevada, ___ P.3d___, 2011 WL 4634159 (October 6, 2011)

In a lawsuit between a manufacturer and a distributor, the manufacturer’s lawyer received (from an anonymous mailer who turned out to be the distributor’s former employee), confidential/privileged information regarding the distributor.  The lawyer notified the distributor that he had received the information and the distributor did not immediately object, but later filed a motion to disqualify the lawyer based on the lawyer’s use of the information.  The trial court denied the motion, but did exclude the lawyer from using one document which appeared to contain privileged/confidential information.  The distributor then sought a writ of mandamus to compel the judge to disqualify the lawyer.

The Nevada Supreme Court denied the writ and clarified the proper analysis for disqualification. The opinion first noted that the lawyer did not violate any ethical rules and Nevada Bar Rule 4.4(b), which governs inadvertent disclosures in Nevada (and is similar to Florida Bar Rule 4-4.4(b)), did not apply because the disclosure was from an anonymous third party, not the opposing party/counsel, and was intentional rather than inadvertent.  Also, Nevada Bar Rule 4.4(a) (prohibiting methods of obtaining evidence that violate the rights of a third person), and Nevada Bar Rule 8.4(d) (prohibiting conduct prejudicial to the administration of justice), did not apply because those rules require some affirmative action by the lawyer but this lawyer had passively received the information.

Absent any controlling authority, the opinion analogized to Nevada Bar Rule 4.4(b) and imposed a requirement that lawyers who receive anonymous information regarding a case must promptly notify opposing counsel and the failure to do so could result in an ethical violation and/or disqualification of the lawyer.  The opinion also found that the trial court did not abuse its discretion by refusing to disqualify the lawyer because the lawyer had promptly notified opposing counsel of the anonymous disclosure and had declined to review the privileged document.

The opinion adopted the multiple factor analysis used by the Texas Supreme Court for the trial court’s determination of the disqualification question. The list of factors includes, but is not limited to:  1) whether the lawyer knew or should have known that the material was privileged; 2) the promptness with which the lawyer notified the opposing side of the receipt of the privileged information; 3) the extent to which the lawyer reviewed and digested the privileged information; 4) the significance of the privileged information; i.e., the extent to which the disclosure may prejudice the moving party’s claim or defense, and the extent to which the return of the documents will mitigate any prejudice; 5) the extent to which moving party may be at fault for the unauthorized disclosure; and 6) if and to what extent the non-moving party will suffer prejudice from the disqualification.

Bottom line:  As I have discussed in Ethics Alerts and at seminars in the past, the Rule 4-4.4(b), Rules Regulating The Florida Bar requires only that the lawyer notify opposing counsel (opposing party) of the receipt of inadvertently disclosed privileged and/or confidential information.  The approach taken by the Nevada (and Texas) Supreme Courts regarding anonymous information seems to be a reasonable approach to the anonymous disclosure this issue.  With regard to potential disqualification, if the lawyer immediately notifies the opposing counsel/party and does not review and/or digest the information, it may be less likely that the lawyer will be later disqualified.  A lawyer should always consider notifying opposing counsel of receipt of any confidential/privileged information/documents.

…be careful out there! cuments, no matter what their source.

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.

                THE LAW OFFICE OF JOSEPH A. CORSMEIER, P.A.

PROVIDES ETHICS ADVICE AND EXPERT OPINIONS TO LAWYERS AND LAW FIRMS

DEFENDS LAWYERS IN BAR ADMISSION AND DISCIPLINE CASES

(AND MUCH MORE!)

My law firm focuses on review, analysis, and interpretation of the Rules Regulating The Florida Bar, advice and representation of lawyers in Bar disciplinary matters, defense of applicants for admission to The Florida Bar before the Board of Bar Examiners, defense of all Florida licensed professionals in discipline and admission matters before all state agencies and boards, expert ethics opinions, and practice management for lawyers and law firms.  If there is a lawyer or other Florida professional license involved, I can defend the complaint or help you get your license. 

If you have any questions or comments, please call me at (727) 799-1688 or e-mail me at jcorsmeier@jac-law.com.  You can find my law firm on the web at www.jac-law.com. In addition to handling individual cases, matters, problems and issues for my clients, I also am on retainer to provide ethics advice to numerous lawyers and law firms throughout the state of Florida.  I also provide legal assistance and advice to numerous individuals and non-legal entities to help insure compliance with the law and rules related to UP

Disclaimer:  this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.L and other issues.

 

 

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