Ethics Opinion 219

Conflict of Ethical Obligations

* [NOTE: See how Opinion 219 has been substantively affected by the amendments to the D.C. Rules of Professional Conduct that became effective on February 1, 2007]

A lawyer is not precluded from revealing a fraud committed in the course of the representation by the client on a federal tribunal or another person if regulations of the tribunal having the force and effect of law require that the fraud be revealed and the client is first afforded a reasonable opportunity to investigate and pursue any good faith challenge to the regulations.

Applicable Rules

• Rule 1.6(d)(2)(A) (Confidentiality of Information)
• Rule 3.3(d) (Candor Toward the Tribunal)
• Rule 4.1(b) (Truthfulness in Statements to Others)

Inquiry
A regulation of the U.S. Patent and Trademark Office, 37 C.F.R. § 10.85(b) (1), provides:

A practitioner who receives information clearly establishing that . . . [a] client has, in the course of the representation, perpetrated a fraud upon a person or tribunal shall promptly call upon the client to rectify the same, and if the client refuses or is unable to do so, the practitioner shall reveal the fraud to the affected person or tribunal.¹

The present inquiry seeks guidance on how to reconcile the requirements of this regulation with the ethical obligations of members of the District of Columbia Bar.

Discussion
The comments to Rule 8.5 of the Rules of Professional Conduct now in effect refer to problems arising from conflicts between inconsistent ethical requirements of different jurisdictions, including conflicts between the rules of the Bar and those of federal tribunals. However, there can be no such problem in the absence of a true conflict. That is the circumstance here.

Rule 3.3(d) of the Rules of Professional Conduct states:

A lawyer who receives information clearly establishing that a fraud has been perpetrated upon the tribunal shall promptly reveal the fraud to the tribunal unless compliance with this duty would require disclosure of information otherwise protected by Rule 1.6, in which case the lawyer shall promptly call upon the client to rectify the fraud.²

See also Rule 4.1(b) (prohibiting knowing failure to disclose material facts to third persons when necessary to avoid assisting a criminal or fraudulent act by the client except when disclosure is prohibited by Rule 1.6). Rule 1.6, in turn, generally requires the lawyer to maintain the confidentiality of the confidences and secrets of the lawyer's client, which Rule 1.6(b) defines to include "information gained in the professional relationship… the disclosure of which would be embarrassing, or would be likely to be detrimental, to the client." Since this definition encompasses the existence of a fraud committed by the client during the representation, a member of the D.C. Bar normally would be precluded from disclosing such a fraud even if the client has refused to rectify it.³

There is an important exception, however. Rule 1.6(d)(2)(A) permits a lawyer to reveal client confidences and secrets when "required by law or court order." In the Committee's view, "law" for this purpose includes federal regulations having the force and effect of law. That is the normal understanding of the term. See, e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 295-96 (1979). Moreover, the comments to the rules make clear that "law" within the meaning of a related provision, Rule 1.6(d)(2)(B), includes such regulations.⁴

Accordingly, we conclude that if a client refused to rectify a fraud in accordance with regulations of a federal tribunal requiring disclosure with the force and effect of law, the lawyer could make the disclosure without contravening Rule 1.6 or Rules 3.3(d) or 4.1(b).

The question remains whether 37 C.F.R. § 10.85(b)(1) constitutes such a regulation. Although this is a question of law beyond the purview of the Committee, we believe that the lawyer would be required before making any disclosure pursuant to the regulation to notify the client and provide the client a reasonable opportunity to investigate and pursue any good faith challenge to the regulation. See Opinion 214 (lawyer may comply with a final judicial order enforcing an IRS summons without seeking appellate review of the order so long as the client is advised and given a reasonable opportunity to seek review independently).

Inquiry No. 89-3-12
Adopted July 17, 1991

1. According to the inquiry, the Patent and Trademark Office interprets fraud for this purpose to include non-compliance with 37 C.F.R. § 1.56(a), which imposes a duty on the inventor and his or her attorney "to disclose to the Office information that they are aware of which is material to the examination of the application."
2. We assume for purposes of this opinion that the Patent and Trademark Office constitutes a "tribunal" within the meaning of this rule. According to paragraph [12] of the Terminology section of the Rules, "tribunal" "denotes a court, regulatory agency, commission, and any other body or individual authorized by law to render decisions of a judicial or quasi-judicial nature, based on information presented before it, regardless of the degree of formality or informality of the proceedings."
3. The lawyer would be required in that case to withdraw from the representation if the fraud is ongoing and thus otherwise would involve assistance by the lawyer. See Rules 1.2(e), 1.16(a)(1), 3.3(a)(2); Opinion 153. See also Rule 1.16(b)(1) and (2) regarding permissive withdrawal when the lawyer reasonably believes (but does not know) that fraud has been committed or the fraud is not ongoing, but has previously involved the lawyer's services.
4. Rule 1.6(d)(2)(B) permits disclosure of client confidences and secrets by a government lawyer "when permitted or authorized by law." Comment [34] to Rule 1.6 states that disclosures by government lawyers pursuant to this subparagraph "may be authorized or required by statute, executive order or regulation, depending on the constitutional or statutory powers of the authorizing entity."