Category Archives: Inadvertent disclosure of Confidential Documents

Florida Supreme Court opinion makes significant revisions to Florida Bar Rules on trust, confidentiality, and reinstatement procedures

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of the Supreme Court of Florida implementing, inter alia, significant revisions to the trust account, confidentiality, diversion, and reinstatement rules.  The opinion is In Re: Amendments to the Rules Regulating The Florida Bar (Biennial Petition), No. SC14-2088 (June 11, 2015) and is online here:  http://www.floridasupremecourt.org/decisions/2015/sc14-2088.pdf. The amendments will become effective on October 1, 2015, at 12:01 a.m.

The opinion revises Bar Rule 3-5.3(c) to state as follows:  “a respondent who has been the subject of a prior diversion is not eligible for diversion for the same type of rule violation for a period of 5 years after the earlier diversion. However, a respondent who has been the subject of a prior diversion and then is alleged to have violated a completely different type of rule at least 1 year after the initial diversion, will be eligible for a practice and professionalism enhancement program.”  This rule change will reduce the period of ineligibility for a diversion from 7 to 5 years and permit a lawyer to receive more than one diversion in a 5 year period if the Bar rule allegations are not the same.

The opinion also revises Bar Rule 3-7.10(b)(1) to permit a suspended lawyer to file a petition for reinstatement after completion of at least 80% of the term of the period of suspension.  The opinion also revised Bar rule 4-1.6(c)(6) to permit a lawyer to obtain or provide confidential information “to detect and resolve conflicts of interest between lawyers in different firms arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client.”  This creates a new exception to the application of the confidentiality rule.

The opinion adds Bar Rule 4-1.6(e) which states that “(a) lawyer must make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”  This puts the burden on the sending lawyer to make reasonable efforts to prevent inadvertent/unauthorized disclosure of confidential information.

The opinion revises Bar Rule 5-1.1(a)(1)(B) to permit a lawyer to deposit “the lawyer’s own funds into trust to replenish a shortage in the lawyer’s trust account. Any deposits by the lawyer to cover trust account shortages must be no more than the amount of the trust account shortage, but may be less than the amount of the shortage. The lawyer must notify the bar’s lawyer regulation department immediately of the shortage in the lawyer’s trust account, the cause of the shortage, and the amount of the replenishment of the trust account by the lawyer.”  This revision specifically permits a lawyer to replenish funds into the trust account when there is a shortage without violating the prohibition against commingling.

Bottom line:  Many of these Bar rule revisions are a result of recommendations made by the 2011-2012 Florida Bar Commission on Review of the Grievance System in its 2012 Report.  The Commission was appointed by then Bar President Scott Hawkins and the undersigned was a member.

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.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Filed under Attorney Ethics, commingling, Confidentiality, Diversion, Florida Bar, Inadvertent disclosure of Confidential Documents, joe corsmeier, Joseph Corsmeier, lawyer confidentiality, Lawyer diversion, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer reinstatement, Lawyer trust accounts, Reinstatement

Florida 3rd District Court of Appeal affirms that lawyer’s receipt and “skimming” of confidential mediation statement does not require disqualification

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of the Third District Court of Appeal in which it held that a lawyer’s receipt and “skimming” of confidential mediation statement of the opposing party does not require the disqualification of the party’s lawyer.  The opinion is Maribor v. Dreiling, Fla. Dist. Ct. App. 3d Dist., No. 3D12-300 (8/22/12) and is attached.

During extensive litigation between siblings over their mother’s estate, the plaintiff’s lawyer asked an assistant to serve a summary judgment motion by e-mailing a copy to defendants’ lawyers at the Heller Waldman law firm and mailing a hard copy.  After e-mailing the motion, the assistant realized that the e-mail did not mention that a copy would also be mailed and she sent a follow-up e-mail noting that she had sent a hard copy.  The assistant inadvertently attached a confidential mediation statement to the e-mail instead of the summary judgment motion.  The e-mails were sent to two Heller Waldman partners, Glen Waldman and Eleanor Barnett, and their assistant.  Waldman and the assistant never reviewed the statement.

According to the opinion, Barnett was out of the office when she received the e-mails on her mobile telephone and did not open them.  When she returned to the office, she instructed her assistant to print out the summary judgment motion and “whatever came in while I was out related to this cause.”  The assistant printed out a copy of the motion and the mediation statement, and forwarded the e-mails and their attachments to the clients.

The lawyer read the summary judgment motion and began to “skim” the mediation statement after checking to confirm that it did not contain a prominent confidentiality notice and assumed it was sent intentionally.  Later the same day, the lawyer sent opposing counsel an e-mail about a scheduling issue mentioned in the mediation statement.  After receiving the e-mail, the opposing lawyer realized the inadvertent disclosure and requested that all copies of the mediation statement be destroyed and the lawyer immediately complied.

The opposing party then moved to disqualify, claiming that the receiving lawyers violated Rule 4-4.4(b), Rules Regulating The Florida Bar, which states that “(a) lawyer who receives a document relating to the representation of the lawyer’s client and knows or reasonably should know that the document was inadvertently sent shall promptly notify the sender.”  The trial court appointed a special master, who found that the confidential mediation statement was essentially a position paper stating obvious and well-established positions of each side in the litigation.

According to the special master’s report, the mediation statement outlined uncontested facts, “(made) passing comments on the obvious motivations of the parties”, and tracked the legal issues without revealing any weakness in the plaintiff’s case or providing any information that would give the defendants a tactical, strategic, or legal advantage.  The trial court issued an order adopting the special master’s recommendation and denied the motion to disqualify.  The opposing party appealed and the opinion affirmed the trial court’s order refusing to disqualify the lawyer or firm.

In affirming, the opinion pointed to the lawyer’s assertion that she did not realize the statement was confidential before skimming it and the fact that she had all copies destroyed immediately after she learned that it had been sent in error.  In addition, affidavits in the record documented the minimal review of the statement and eliminated any possibility that the lawyer or the firm obtained an unfair informational advantage in the case.  According to the opinion, “the events that transpired in this case are not attributable to unethical conduct…(but) illustrate some of the adverse consequences resulting from the injection of technology into today’s modern and busy law practice.”  (emphasis added).

The opinion also cited Florida case law and provided the following elements for review in determining whether a lawyer should be disqualified based on inadvertent disclosure of confidential information:

The receipt of an inadvertent disclosure warrants disqualification when the movant establishes that: (1) the inadvertently disclosed information is protected, either by privilege or confidentiality; and (2) there is a “possibility” that the receiving party has obtained an “unfair” “informational advantage” as a result of the inadvertent disclosure.

The opinion stated that the above two elements must be considered together since only an inadvertent disclosure of privileged or confidential information can yield an “unfair” informational advantage and the fact that inadvertently disclosed information is privileged or confidential, standing alone, does not automatically require disqualification.  The second element is also broader than the first and, in determining whether to disqualify a lawyer, courts should look not only to the content of the inadvertent disclosure, but also to the actions the receiving lawyers took upon receiving the inadvertent disclosure.

The opinion listed two reasons why courts should focus on the actions of the receiving lawyer/law firm:

First, it would be impossible to evaluate the possibility of an unfair advantage without knowing how and to what extent the lawyers reviewed, copied, or disseminated the inadvertently disclosed information.  The opinion noted that, in Atlas Air v. Greenberg Traurig P.A., 997 So. 2d 1117 (Fla. 3rd DCA 2008), the lawyer asserted attorney-client privilege and work product protection when asked during deposition whether privileged materials were provided to other attorneys in the firm and the lawyer’s refusal to answer made it impossible to determine the extent of the tactical advantage that the lawyer/law firm may have gained.

Second, the actions of the receiving lawyers may assist in determining whether any informational advantage was received “unfairly,” as in Abamar Housing & Dev. Inc. v. Lisa Daly Lady Decor Inc., 724 So. 2d 572 (Fla. 3rd DCA 1998).  The Abamar opinion focused on the receiving lawyer’s failure to take steps to mitigate the inadvertent disclosure and found that a lawyer who complies with the Rules of Professional Conduct upon receiving an inadvertent disclosure will not be subject to disqualification.

After conducting the above analysis, the opinion agreed with the special master that nothing within the mediation statement created a possibility that the defendants gained an informational advantage and that the brief and cursory nature of the receiving lawyers’ exposure to the statement and the minimal way in which they handled, reviewed, and disseminated it, showed there was no possibility that the firm gained an unfair informational advantage.  The opinion also found that the trial court correctly rejected the plaintiff’s argument that the lawyers violated Florida Bar Rule 4-4.4(b) since the record supported the findings that the receiving lawyer did not know that the mediation statement was confidential and that this lack of knowledge was reasonable under the circumstances.

With regard to the mediation statement, the opinion stated that nothing in a mediation statement automatically alerts a person that it is confidential since  it is not uncommon for a party to send a mediation statement to opposing counsel and trial judges sometimes require it to be sent.  The opinion also stated that the mediation statement did not prominently indicate that it was confidential.  Although the first paragraph contained statement about the confidentiality of the statement, the receiving lawyer stated that she did not read that portion and, “(b)ecause the admonition was not placed in bold, underlined, italicized, capitalized, or otherwise designed to stand out to a reader who was merely skimming the document, it was reasonable for the trial court to conclude that (the lawyer) overlooked the admonition.”  Finally, the opinion noted that the lawyers mitigated the inadvertent disclosure since the receiving lawyer immediately had all copies of the mediation statement destroyed when she was notified that it was confidential.

Bottom line:  As the opinion said, “the events that transpired in this case are not attributable to unethical conduct… (but) illustrate some of the adverse consequences resulting from the injection of technology into today’s modern and busy law practice.”  Lawyers (and their assistants) must be extremely careful when sending documents as attachments to e-mails, particularly to opposing counsel!  Of course, the receiving lawyer should be very wary as well since there are certainly cases wherein a lawyer who inadvertently received and reviewed a confidential and/or privileged document or information was disqualified…or worse.

Be careful out there!

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.

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

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Filed under Attorney discipline, Attorney Ethics, Attorney/client privilege and confidentiality, Disqualification, Florida Lawyer Ethics and Professionalism, Inadvertent disclosure of Confidential Documents, joe corsmeier, Lawyer discipline, Lawyer disqualification, Lawyer ethics, Lawyer Ethics and Professionalism

U.S. Fifth Circuit opinion affirms sanctions against Florida law firm for inadvertent dissemination of confidential discovery documents

Hello and welcome to this Ethics Alert blog which will discuss the recent U.S. Fifth Circuit Court of Appeal opinion affirming monetary sanctions against a Florida law firm which inadvertently disseminated confidential discovery documents of Cooper Tire & Rubber Company to lawyers who were attending a conference on discovery related to Cooper.  The opinion is Smith & Fuller, P.A.; Hugh N. Smith v. Cooper Tire & Rubber Company, U.S. Fifth Circuit Case No. 11-20557 (June 21, 2012) and the link is here:  http://www.ca5.uscourts.gov/opinions/pub/11/11-20557-CV0.wpd.pdf.

According to the opinion, Hugh N. Smith and Smith & Fuller, P.A. represented the Trenado family in a federal products liability lawsuit against Cooper in the U.S. Southern District of Texas.  Prior to trial, the district court judge issued an Amended Protective Order of Confidentiality protecting Cooper’s trade secrets and confidential information which was to be produced during discovery. The protective order limited access of protected information to “authorized persons, solely in the performance of their duties in connection with the trial preparation of this case.”

Smith and the law firm inadvertently disseminated Cooper’s trade secrets and confidential information to a number of lawyers during a conference about obtaining discovery from Cooper after an individual from Smith’s firm apparently mistakenly copied the information onto compact discs which were distributed to the lawyers attending the conference. Cooper discovered the violation when its counsel in Trenado received the documents from a plaintiff’s attorney in an unrelated lawsuit against Cooper.  Many of the documents were Bates stamped and Smith and the law firm also did not dispute that they violated the protective order.

The Fifth Circuit opinion affirmed the judge’s sanction of $29,667.71 against the lawyer and the law firm for fees and costs incurred by Cooper Tire & Rubber Co. in pursuing the matter.  The district court judge had also ordered Smith and the firm to take immediate action to enforce the protective order and to correct the violation.  The judge ultimately held that the firm did not willfully violate the protective order but that sanctions should still be imposed pursuant to Federal Rule of Civil Procedure 37(b), which gives the court authority to impose attorney sanctions for failure to obey discovery orders. The judge also noted that Smith had previously violated a similar protective order in another case.

The law firm argued that the amount of fees imposed was unreasonable since it, inter alia, included fees of Cooper’s lead counsel and national discovery counsel; however, the opinion stated that “our review of the record shows no abuse of discretion by the district court…(t)his is particularly true since Cooper did not learn of the violation until the eve of trial in the underlying action when its lead counsel was engaged in trial preparation, thereby causing a need for additional involvement by Cooper’s national discovery counsel.”  The opinion also held that, in addition to a broad range of sanctions, including contempt, Rule 37(b) authorizes the court to impose a concurrent sanction of reasonable expenses, including attorney’s fees, which were caused by the failure to obey a protective order.

Bottom line:  Although the disclosure of the protected confidential documents to numerous lawyers was inadvertent, the lawyer and law firm were sanctioned by the federal court for violating the discovery order.  By that time; however, the cat was out of the bag…

Be careful out there!

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.

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Filed under Attorney discipline, Attorney Ethics, Florida Lawyer Ethics and Professionalism, Inadvertent disclosure of Confidential Documents, joe corsmeier, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer sanctions