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Professional Responsibility & Ethics
for FDIC Lawyers
Kathleen Clark
Washington University in St. Louis
June 2015
1
2 Handouts:
Outline & Problems
Supplementary Materials
Goals
Topics
• Government Lawyering• Conflicts of Interest• Supervisory / Subordinate Lawyers• Standards for Whistleblowing Lawyers• Authority of Lawyers & Clients• Revolving Door• No-Contact Rule
Theme
howprofessional rules
apply togovernment lawyers
and . . .
meetCLE
requirements
Whois
yourclient
?
Identifying Joan’s client
assigned to assist DRR re FDIC’s appointment
as receiver for Bank 1
& Bank 2
Identify Joan’s
client(s)
PossibilitiesIndiv. receiverships for Banks 1 & 2
DRR
Deposit Insurance Fund
FDIC
Federal government
People of the United States
The public interest
PossibilitiesIndiv. receiverships for Banks 1 & 2
DRR
Deposit Insurance Fund
FDIC
federal government
people of the United States
the public interest
PossibilitiesIndiv. receiverships for Banks 1 & 2
DRR
Deposit Insurance Fund
FDIC
federal government
people of the United States
the public interest
PossibilitiesIndiv. receiverships for Banks 1 & 2
DRR
Deposit Insurance Fund
FDIC
federal government
people of the United States
the public interest
DC Rule 1.6(k)
govt lawyer’s client is
agency that employs lawyer unless
expressly provided by
law, regulation, or order
Moststate rules
don’t identifygovt lawyer’s
client
significanceof
client identity
control
confidentiality
individual v. organization
conflicts of interest
control
confidentiality
individual v. organization
conflicts of interest
Examinestructure of authority
in specific
governmentalcontext
Examinestructure of authority
re DRR &
receiverships forBank 1 & Bank 2
Whocan make decisions
about the objectives of
Joan’srepresentation?
explicitly different standards
forpublic & private sector
lawyers
explicitly different standards
forpublic & private sector
lawyers
Rule 3.8
Special Responsibilities
of a Prosecutor
explicitly different standardsbased onnature of
client
APossibleConflict
Bank 1 sold a 25%
participation interest in loan
to Bank 2
Borrower still owes $4mFDIC = Receiver for Bank 1Receiver for Bank 1 wants
to sell loan for $3m
FDIC = Receiver for Bank 2
Receiver for Bank 2 objects to sale for $3m
Joan assigned to represent
Receiver for Bank 1&
Receiver for Bank 2 objects to sale for $3m
May Joan represent
bothReceiver for Bank 1
&Receiver for Bank 2
?
Conflict of Interest Rules1.71.81.9
1.101.11
DC Rule 1.7(a)
DC Rule 1.7(a)
DC Rule 1.7(a)A lawyer
shall not advance two or more
adverse positions in the same matter.
DC Rule 1.7(a)no no
exceptionsno
informed consent
How wouldDC Rule 1.7(a)
apply to
Joan?
DC Rule 1.7(a)A lawyer
shall not advance two or more
adverse positions in the same matter.
Are theReceiver for Bank 1
& Receiver for Bank 2
separate clients?
DC Rule 1.7(a)A lawyer
shall not advance two or more
adverse positions in the same matter.
TX Rule 1.06(a)A lawyer shall not represent
opposing partiesin the same litigation.
TX Rule 1.06(a)no no
exceptionsno
informed consent
TX Rule 1.06(a)A lawyer shall not represent
opposing partiesin the same litigation.
How doesTX Rule 1.06(a)
apply to
Joan?
TX Rule 1.06(b)(b)
what = COI(c)
when COI permitted
TX Rule 1.06(b)(1) mmmmmmmmmmm
materially & directly adversesubstantially related
(2) mmmmmmmmmmmadversely limited by
responsibilities to other C
TX Rule 1.06(c)(1) mmmmmmmmmmmrepresentation will not be materially affected
(2) mmmmmmmmmmminformed consent
How wouldTX Rule 1.06(b) & (c)
apply to
Joan?
Supervisory&
SubordinateLawyers
Supervisorinstructs Joan to
representReceivers for Bank 1 & 2
despiteconflict of interest
Does supervisor’s instruction
insulate Joan from
professional discipline?
DC Rule 5.2(a)
DC Rule 5.2(a)Lawyer is
bound by Rules even if acting
at someone else’s direction.
DC Rule 5.2(b)subordinate lawyer
acting in accordance w/supervisory lawyer’s
reasonable resolutionof arguable question
DC Rule 5.2(b)subordinate lawyer
acting in accordance w/supervisory lawyer’s
reasonable resolutionof arguable question
How would
DC Rule 5.2apply
to Joan
?
Would analysis differ if
FDIC had formal policy that
“no managing attorney is engaged in practice of law”
?
Joan thinks hersupervisor is wrong.
What can Joan do?
Designated Agency Ethics OfficerGeneral CounselInspector Generalstate bar ethics hotlineanother lawyer
Maryland Rule 1.13
. . . then L shallrefer matter to higher internal authority. . .
• ask for reconsideration• suggest separate legal opinion• refer matter to higher authority within or
Maryland Rule 1.13. . . & L maydisclose externally if:–highest authority insists on/fails to address–clear violation of law–reasonably certain to result in–substantial injury to organization
DC Rule 1.6“confidence”
protected by A-C privilege
“secret” gained in professional relationship &:– C requested be held inviolate or– disclosure would be embarrassing or
detrimental to C
DC Rule 1.6(e)(6) mmmmmmmmmmmmmmmmmm
to secure legal advice about L’s compliance w/ law
(e)(2)(b) mmmmmmmmmmmmmmmmmIf govt L:
when permitted or authorized by law
(e)(1) mmmmmmmmmmmmmmmmmmwith C’s informed consent
Differencesbetween
government&
private sectorlawyers
TX Rule 1.05
Differencesbetween
government&
private sectorclients
conflicts of interestfor
lawyerspracticing
in a‘firm’
May Joan’s co-worker, Bob,
representReceiver for Bank 2
?
DC Rule 1.10(a)
If 1.7 or 1.9 prohibits 1 L in firm from rep’g C,
then all Ls in firm are prohibited from rep’g C . . .
DC Rule 1.10(a)
If 1.7 or 1.9 prohibits 1 L in firm from rep’g C,
then all Ls in firm are prohibited from rep’g C . . .
Shouldimputed disqualification
apply togovernment
lawyers?
DC Rule 1.0(c)
“firm”does notinclude
a government agency
DC Rule 1.0(c)
“firm”does notinclude
a government agency
Division of authoritybetweenlawyer
&client
DC Rule 1.2(a)
DC Rule 1.2(a)
C decides:objectives
whether to acceptsettlement / plea
DC Rule 1.2(d)
govt L’s authority & controlmay be expanded
beyond 1.2(a) limits
Is Bob required to pursue
the objectionstated by
Receiver for Bank 2?
Revolving Door
Seeking future employment18 USC § 208
“person or organization with whom he is
negotiating or has any arrangement concerning
prospective employment”
Seeking future employment18 USC § 208
“person or organization with whom he is
negotiating or has any arrangement concerning
prospective employment”
Seeking future employmentSTOCK Act
Notification & RecusalRequirements
negotiating or has any arrangement concerning
prospective employment”
3 Handouts:
Course Outline & Problems
Supplementary Materials
Appendix – Missouri Rule 4-1.6
Post-Employment Restrictions
Model Rule 1.11 (Texas 1.10)
18 USC § 207
Post-Employment Restrictions
18 USC § 207
Model Rule 1.11 (Texas 1.10)
18 U.S.C. § 207Trigger: – “participated personally and substantially”– under official responsibility during last year
in govt.Prohibition:
Don’t communicate or appear before federal government in connection with that matter
No imputation of conflict
Texas Rule 1.10Trigger:
“participated personally and substantially as a public officer or employee”
Prohibition:Don’t represent a private client in connection with that matter
• Imputation of conflict to firm unless L is screened & agency notified
Keepa list
of “particular matters
involving specific parties”
DC Rule 4.2(a)
No-Contact Rule
DC Rule 4.2(a)
don’t communicatew/ person
known to be rep’d
DC Rule 4.2(a)unless
other L’s consentor
authorized by law
DC Rule 4.2(b)
may communicate w/ nonparty employee
DC Rule 4.2(b)
must disclose L’s identity
&adversity
Samantha receives phone call from
Bank 3’s counsel & SVP
One week laterSamantha receives
phone call from Bank 3’s SVP
MaySamantha speak
directly withBank 3’s SVP
?
Six months laterSamantha receives
phone call from Bank 3’s SVP re:
Bank Secrecy Act
MaySamantha speak
directly withBank 3’s SVP
?
Isit
the samematter
?
Questions?