“Illegal” Conduct Under Rule 1.2: When Does Advice to a Client Violate an Attorney’s Ethical Obligations?
By Lewis Tesser and Timothy Nolen
Many attorneys have experienced situations in which a client has sought advice about proposed actions which “push the legal limit” or are even clearly illegal. How far—if at all—may attorneys go in assisting a client to engage in questionable activity?
At first glance, the New York Rules of Professional Conduct (NYRPC) appear to provide some clear guidance. Rule 1.2(d) prohibits an attorney from counseling a client to engage in conduct that the attorney knows is “illegal.” NYRPC Rule 1.2(d). In practice, however, application of Rule 1.2(d) is not always straightforward; defining what constitutes “illegal” conduct can be challenging. It is unclear, for example, whether “illegal” conduct is comprised only of activities which are prohibited by the penal law, or if it also includes activities which would subject a party to some type of civil sanction (e.g., common law negligence). Is breaching a contract “illegal” conduct under the Rule? What about an intentional tort? Committing a murder is surely “illegal” conduct under the Rule; but what about advising a client in advance about the trivial consequences of committing a violation or a regulatory infraction?
A close look at the application of Rule 1.2(d) demonstrates the difficulty of defining “illegal” conduct under the Rule and why some guidance would be beneficial.
TEXTUAL AMBIGUITY
Language of the New York Rules of Professional Conduct
Rule 1.2(d) prohibits attorneys from “counsel[ing] a client to engage, or assist[ing] a client, in conduct that the lawyer knows is illegal or fraudulent, except that the lawyer may discuss the legal consequences of any proposed course of conduct with a client.” NYRPC Rule 1.2(d) (emphasis added). While the Rules define “fraudulent,” Rule 1.0(h), they do not contain any definition of “illegal.”
It appears from the drafters’ inclusion of both of the terms “illegal” and “fraudulent,” and the use of the conjunction “or” rather than “and,” that the inclusion of the word “illegal” was intended to encompass more activity than fraud. The case law also supports this interpretation: while the typical case applying Rule 1.2(d) (and its predecessor DR 7-102(A)(7)) involves fraud, there are cases in which the “illegal” conduct was different from fraud. See, e.g., In re Wehringer, 525 NYS2d 604, 605 (App. Div. 1st Dept. 1988), in divorce case where husband assaulted wife’s father and then refused to allow the wife to see their son unless she worked out a favorable settlement with the husband’s attorney, attorney was disbarred in part because he “knowingly aided his client in an illegal scheme”; NYC Bar Comm. Prof. Jud. Eth., Op. 1999-02 (1999), lawyer may not assist fugitive in selling assets unless lawyer has reasonable basis to believe that the fugitive has a legal basis for his actions.
It is possible that the drafters intended “illegal” to refer to criminal acts, and that “fraudulent,” which would include civil fraud, was added as the one category of civil “wrongs” to fall within the Rule. Some legal scholars have made this argument. However, if this was indeed the case, it would seem counterintuitive that New York would not have substituted the more precise term “criminal” for the more ambiguous term “illegal,” especially since the ABA Model Rule (the template for the New York Rule is modeled) already used the more precise term. (See infra discussion below).
Other New York Rules discuss “illegal conduct,” but also do not provide any definition. For example, Rule 8.4(b) prohibits a lawyer from engaging “in illegal conduct that adversely reflects on the lawyer’s honesty, trustworthiness or fitness as a lawyer.” NYRPC Rule 8.4(b). Even assuming that “illegal” has the same meaning in Rule 8.4 as in Rule 1.2, “illegal” is also not defined by Rule 8.4. Id.
American Bar Association Guidance
An important source for interpreting the meaning of NYRPC 1.2(d) is the history of the Rule, which would also involve an examination of the ABA Model Rule. The ABA Model Rule 1.2(d) is nearly identical to New York’s Rule 1.2(d) with a very important distinction: the ABA uses “criminal” in place of “illegal.” ABA Model Rule 1.2(d) states in part that “[a] lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client …” Model Rules of Prof. Conduct Rule 1.2(d) (emphasis added). The ABA Rule thus appears to apply only to criminal conduct, not civil wrongs. This is of limited value in interpreting the New York Rule. The ABA Model Rule was adopted in 1983, long before the New York Rule went into effect in 2009, and has remained unchanged since. The fact that New York chose not to replace “illegal” (the term used in New York’s former Disciplinary Rules) with “criminal” does suggest that New York intended to include conduct beyond just criminal acts. How far they intended to go remains unclear. Moreover, the Rule does not explain which civil wrongs would constitute “illegal” conduct under the Rule. Id.
The legislative history of the ABA Model Rules also contains an interesting amendment which could suggest why New York would have used the term “illegal” rather than “criminal.” The history indicates that the ABA rejected a proposal to include intentional torts within Rule 1.2. Specifically, the International Association of Insurance Counsel (IAIC) had proposed an amendment to the draft of Rule 1.2 which would have prohibited an attorney from assisting a client in conduct that the attorney knew was “criminal, fraudulent, or otherwise intentionally tortious …” (emphasis added). See, ABA Center for Professional Responsibility of the American Bar Association 45–46 (2006). The IAIC argued that “‘criminal or fraudulent’ conduct is too narrow … [N]o lawyer should be permitted to counsel or assist in any intentional tort.” Id. The amendment, however, was voted down. Nonetheless, it highlights the type of conduct that the drafters were concerned about which might fall outside of the criminal law. It is certainly possible that New York continues to use the broader term “illegal” instead of “criminal” precisely because it wanted to include conduct such as intentional torts within the Rule’s prohibition.
The ‘Ordinary’ Meaning of ‘Illegal’
While the language and case law suggests that “illegal” is broader than “fraudulent,” it is unclear from the language whether “illegal” is simply meant to include activities which violate the penal law or if it also includes activities which violate common-law principles.
Some courts interpreting the meaning of “illegal” have looked to the dictionary definition for guidance. Black’s Law Dictionary defines “illegal” as “[n]ot authorized by law; illicit; unlawful; contrary to the law.” Black’s Law Dictionary at 881 (4th Ed. 1941). The courts that have referenced this definition have acknowledged that they “find this to be of little help.” In re Coe, 731 P.2d 1028, 1037 (1986). After very briefly analyzing the definition of “illegal,” the Oregon Court then found that the Code provision did not apply, and thus concluded that “it is unnecessary for us to determine in this proceeding what is the meaning of ‘illegal’ as used in that subsection.” Id. at 1038.
However, there is some indication from the definition that “illegal” is meant to include at least some civil wrongs: “[b]ut the law implied in illegal is not necessarily an express statute. Things are called ‘illegal’ for a violation of common-law principles. And the term does not imply that the act spoken of is immoral or wicked; it implies only a breach of the law.” Black’s Law Dictionary. Thus, it appears that the ordinary meaning of “illegal” according to Black’s Law Dictionary includes at least some civil wrongs, although the language is far from conclusive. Id.
APPLICATION
Civil Wrongs: Breach of Contract
Some types of civil “wrongs” would certainly appear to fall outside of the rubric of “illegal” conduct under the Rule. A good example is breach of contract. Most attorneys and legal scholars appear to acknowledge that breach of a contract, although a civil “wrong,” is not considered “illegal” under Rule 1.2(d). See, e.g., Geoffrey Hazard, How Far May a Lawyer Go in Assisting a Client in Legally Wrongful Conduct?, 35 U. Miami L. Rev. 669, 674–75 (1980), “The term ‘illegality’ in ordinary legal parlance does not embrace breach of contract …”. The case law and advisory opinions addressing this issue appear to support this position. In a 1988 opinion, the Alaska Bar Association addressed whether it would be a violation of DR 7-102(A)(7) (the predecessor to Rule 1.2 which mentioned “illegal” conduct), or ABA Model Rule 1.2(d) (mentioning “criminal” conduct), if an attorney consummated a transaction for a client knowing that that transaction would breach a prior contractual agreement that the client had. Alaska Bar Association, Ethics Op. 88-2 (1988). The Opinion concluded that the transaction would amount to a breach of contract (and the attorney’s actions would be concealment of a breach of contract), which would not violate Rule 1.2(d). Id.
Civil Wrongs: The Tort Problem
One legal scholar has observed that “[t]he general category embraced by the term ‘illegality’ also includes, beyond the criminal law, various torts.” See, Hazard, How Far May a Lawyer Go in Assisting a Client in Legally Wrongful Conduct? at 674.
Many intentional torts have a criminal counterpart (e.g., battery). Where intentional torts have a criminal counterpart, they should almost certainly be included within the meaning of “illegal” conduct under the Rule. But defining “illegal” as criminal acts and intentional torts is probably insufficient. Initially, there are intentional torts which do not have criminal counterparts, such as interference with contract, see, e.g., Ryan v. Brooklyn Eye & Ear Hosp., 360 NYS2d 912, 916–17 (App. Div., 2d Dept. 1974), describing interference with contractual relationships as an intentional tort, and intentional torts which, depending on the facts, often might not amount to criminal wrongs (e.g., intentional infliction of emotional distress, defamation or privacy torts). If an attorney may assist a client in breaching a contract (see discussion above), it is difficult to see why an attorney is barred from assisting the client with the intentional tort of interference with contract. Conversely, it is also hard to imagine why an attorney should ethically be permitted to assist a client in inflicting emotional distress or defaming another party. Furthermore, the Rule’s history suggests that the ABA grappled with the problem of intentional torts but chose not to include them explicitly in the Rule. Had New York later believed that “illegal” conduct should be criminal acts and intentional torts, it is unclear why it would not have said so explicitly.
Could Rule 1.2(d) be invoked when an attorney has assisted a client to engage in conduct amounting to simple negligence? Professor Geoffrey Hazard presents an example. A client asks its attorney “whether compliance with old safety regulations is sufficient, and the lawyer indicates that such compliance would be sufficient because a tenuous argument can be made that new and stricter safety regulations are constitutionally invalid.” See, Hazard, How Far May a Lawyer Go in Assisting a Client in Legally Wrongful Conduct? at 674. If someone is then injured as a result of the client’s failure to comply with the new safety regulations, has the attorney violated Rule 1.2(d)? The attorney did assist the client with violating a standard of reasonable care, which “is in this sense a violation of law.” Id. 674 n.4. Therefore, an argument could be made that the conduct which the attorney assisted was “illegal.” However, the result seems inequitable. Acknowledging the difficulty of this dilemma, Professor Hazard simply concludes that “[w]e may feel confident about including crimes … but as we move away from this core meaning, the boundaries become increasingly doubtful.” Id.
Assessing whether advising a client to engage in future negligence violates Rule 1.2(d) is further complicated when the negligence amounts to gross negligence, which could warrant punitive damages. For example, does “illegal” in Rule 1.2(d) encompass the placement of a gas tank in the rear of a car, when the location would save tremendous amounts of money, but the client knows that placing it in the back will ultimately result in the loss of lives? It is not clear.
Civil Wrongs: A Statutory Divide?
One way of approaching the definition of “illegal” is by reference to regulation or statute—perhaps “illegal” simply means “prohibited by statute.” This could potentially explain why criminal violations fall within the definition, as do some intentional torts, but many civil “wrongs” do not.
Interpreting the Code term “illegal,” one court has observed that “[i]llegal conduct … is not limited to criminal conduct, but includes conduct that is forbidden by statute.” In re Complaint of Altstatt, 897 P.2d 1164, 1168 (Or. 1994). Although, to the contrary, some courts have disciplined attorneys for counseling clients about engaging in illegal conduct even though the client’s actions did not violate any explicit statute. See, In re Masters, 438 N.E.2d 187, 192-93 (1982) (disciplinary attorney who counseled his client to comply with an extortion threat).
Initially, a review of New York State ethics opinions appears to support this position. In a 2007 opinion, the New York State Bar Association recognized that conduct amounting to a violation of the Real Property Law would be considered “illegal.” See, NYSBA Comm. Prof. Eth., Op. 817, at n.2 (2007). See also, NYSBA Comm. Prof. Eth. Op. 455 (1976), interpreting DR 7-102(A)(7), and stating that “where the lawyer becomes a motivating force by encouraging his client to commit illegal acts or undertakes to bring about a violation of law, he oversteps the bounds of propriety” (emphasis added); NYSBA Comm. Prof. Eth., Op. 974 (2013), citing to Ins. Law §6409(d), which imposes a monetary penalty for certain insurance fee arrangements and “other relevant statutes” for determining Rule 1.2(d) boundaries; NYSBA Comm. Prof. Eth., Op. 633 (1992), citing Code provisions for the proposition that “conduct that is illegal is unethical,” and explaining that “[t]hus, it would be unethical for a law firm to assist a corporation or voluntary association in the practice of law in violation of any statute or court rule regulating the practice …”); NYSBA Comm. Prof. Eth., Op. 584 (1987), attorney may not draft surrogacy contract if attorney determines that it is “illegal” under the Social Services Law, but may draft contract if attorney believes there is a risk it could be voidable.
However, other ethics opinions blur this line. In a 1980 opinion, the New York State Bar considered whether refusal to take a breathalyzer was considered “illegal.” NYSBA Comm. Prof. Eth., Op. 522 (1980). The inquiring attorney asked whether he could inform his client to refuse to take a breathalyzer, even though taking a breathalyzer was required by statute and a violation of the statute risked a civil penalty. Id. Instead of focusing on whether the act was prohibited by statute or regulation, the opinion focused on whether the conduct was criminal. Specifically, it stated that “New York law has established that a refusal to submit to a breathalyzer is not itself criminal conduct. A refusal invokes no criminal sanctions, and a revocation of the license constitutes only a civil sanction.” Id. Since it was not criminal to refuse a breathalyzer, the attorney could advise his client to refuse to take one. See also, NYSBA Comm. Prof. Eth., Op. 1024 (2014), where Federal government indicated that it would limit its enforcement of Federal marijuana laws, New York attorney may assist client in complying with New York State marijuana laws even though client’s actions would violate Federal law.
Commentary has also acknowledged that advising clients on regulatory or statutory violations is routine. Professor Stephen Pepper, for example, states that it has been commonplace for attorneys to advise clients about how unlikely it is for the EPA to enforce certain regulations or about “strike busting” techniques which violate the National Labor Relations Act. Although such activities would be contrary to the law and could therefore be considered “illegal,” “such conduct [regarding the NLRA violations] by labor lawyers has been open, obvious, and unsanctioned.” Thus, it is unclear whether “illegal” simply entails a statutory or regulatory violation.
CONCLUSION
Given the language and application of NYRPC 1.2(d) and its predecessor, it is ambiguous what constitutes “illegal” conduct under the Rule. While there appear to be some activities which are clearly within the definition (e.g., criminal acts) and some which do not fall within the definition (e.g., breach of contract), there is an array of activities which are difficult to assess. It appears that ordinary negligence is not considered “illegal,” although it is unclear whether gross negligence is. Also, while some intentional torts have criminal counterparts and are “illegal,” it is unclear whether those without a criminal counterpart fall within the definition. Finally, it is ambiguous whether “illegal” is synonymous with “prohibited by statute or regulation,” or if this only applies to criminal prohibitions.
Ultimately, the authors do not take a position on how extensive Rule 1.2(d)’s prohibition should be. But if the Rule is going to continue to use the term “illegal” instead of “criminal,” instruction on the meaning of “illegal” would be beneficial. Given that the New York version of Rule 1.2(d) is intended to be more expansive than the ABA version, and that the meaning of “illegal” in this context remains undefined, perhaps the New York State Bar Association Committee on Standards of Attorney Conduct or a Bar Association ethics committee can assist practitioners by providing more guidance as to the parameters of the Rule. In the interim, however, practitioners should view the Rule as a trap for the unwary, but be very leery of assisting clients in any activity that smacks of criminal or civil “illegality.”
Lewis Tesser is a Partner at Tesser, Ryan & Rochman, LLP, the President of the New York County Lawyers’ Association, and the Editor-in-Chief of The New York Rules of Professional Conduct (Oxford University Press 2011). Mr. Tesser’s practice includes representation of business and professionals in business disputes, disciplinary proceedings and licensing matters.
Timothy Nolen is an Associate at Tesser, Ryan & Rochman, LLP and the co-author of multiple articles on Article 78 procedure and commercial disputes. Mr. Nolen’s practice includes administrative appeals and representation of professionals.
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