‘No-Contact’ Rule in NYS — Some Less Contentious Questions | New York Legal Ethics Reporter

‘No-Contact’ Rule in NYS — Some Less Contentious Questions

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By Bruce A. Green

[Originally published in NYPRR August 1998]

Over the past decade, there has been heated discussion about the scope of the “no-contact” rule. This is the rule that, generally speaking, forbids a lawyer from communicating directly with another lawyer’s client concerning matters relating to the subject of the representation. In New York State, this restriction is embodied in Disciplinary Rule (DR) 7-104(A)(1) of the Lawyer’s Code of Professional Responsibility, which provides:

During the course of the representation of a client a lawyer shall not … [c]ommunicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by a lawyer in that matter unless the lawyer has the prior consent of the lawyer representing such other party or is authorized by law to do so.

The rule is intended “to preserve the proper functioning of the attorney-client relationship and to shield the adverse party from improper approaches.” [N.Y. State Bar op. 607 (1990).]

Application to Prosecutors

Much of the discussion about the rule has focused on two questions. The first is how the rule applies to criminal prosecutors — especially to federal prosecutors. This question has been hotly debated, beginning in 1989 with the Attorney General’s issuance of the so-called “Thornburgh Memo,” which took the view that the no-contact rule had limited application to U.S. Department of Justice (DOJ) lawyers. The flames were fanned in 1995, when the DOJ promulgated a federal regulation which purported to establish that federal lawyers engaged in law enforcement were to be governed by a different, more permissive standard. The DOJ regulation was struck down by the Eighth Circuit in United States ex rel. O’Keefe v. McDonnell Douglas Corp. [132 F.3d 1252 (1998)]. Meanwhile, both the American Bar Association and the Conference of Chief Judges have been working for the last three years to develop an alternative to the existing “no-contact” rule that would appropriately address the Government’s concerns.

Corporation as Client

The second hot question has been how the rule applies when the represented party is not an individual, but a corporation or other entity. In New York, this question was addressed by the Court of Appeals in Nieseg v. Team I [76 N.Y.2d 363, 558 N.E.2d 1030, 559 N.Y.S.2d 493 (1990).] The Court held that when a corporation is represented by counsel, a lawyer representing another client in the matter must refrain from communicating directly with “corporate employees whose acts or omissions in the matter under inquiry are binding on the corporation (in effect, the corporation’s ‘alter egos’) or imputed to the corporation for purposes of its liability or employees implementing the advice of counsel.”

Far less attention has been given to various other questions concerning the scope of the “no-contact” rule which, if contentious, are nevertheless of practical significance to lawyers. This article addresses five of these questions. Precisely because they have not been frequently contested in litigation, much of the relevant learning comes from advisory opinions issued by various bar association ethics committees in New York State, rather than from judicial decisions.

Does the rule apply outside litigation? Some readers might be led by the rule’s use of the term “party” to believe that the rule applies only to “parties” in litigation. The title of the rule, “Communicating with One of Adverse Interest,” might suggest a similar limitation. However, the rule has much broader reach than these words might suggest. It applies to prospective as well as pending litigation. It applies in transactions, as well as litigation. And, it applies regardless of whether the interests of the lawyer’s client are “adverse” to those of another represented person. For example, the lawyer for the purchaser of a home may not negotiate directly with a seller who is represented by counsel. Likewise, the lawyer for one defendant may not communicate directly with a represented co-defendant.

When Represented Party Agrees to Speak

Does the rule apply when the represented person agrees or offers to speak with the lawyer? The restriction generally applies even when the represented party consents to speak directly with the other lawyer. Indeed, it applies even when the represented person initiates the conversation. For example, lawyers staffing a corporation’s “help line” telephone as part of the corporation’s “compliance with the law” program may not speak with a represented caller without the prior consent of the caller’s counsel. [See, N.Y. State Ethics Op. 650 (1993).]

Of course, a lawyer is free to exchange pleasantries with a represented person, since the rule forbids only those communications that are “on the subject of the representation.” But the lawyer must take care not to allow the conversation to turn to “the subject of the representation,” which generally includes anything relating to the particular transactions, conduct, or relationships between parties as to which the person has been receiving legal assistance. [See, N.Y. State Ethics Op. 652 (1993).]

The rule recognizes as an exception that a lawyer may discuss the subject of the representation if the other party’s lawyer gives “prior consent.” Even after prior consent is obtained, however, a lawyer must act within limits. For example, when a lawyer speaks directly with the represented party under this provision, the lawyer must respect any agreed-upon limits set by the represented party’s lawyer, including limits concerning the scope of what may be discussed. [Cf. N.Y. State Ethics Op. 535 (1981), “Reneging on an agreement…is simply inconsistent with honesty and fair dealing.”] Further, the lawyer must refrain from making false or misleading statements or otherwise improper communications, just as if the lawyer were communicating with an unrepresented party. [See, DRs 7-104(A)(2) & 1-102(A)(4).]

Recognizing That Person Is Represented

When does a lawyer “know” that another person is represented by counsel? The rule, by its terms, applies only when a lawyer “knows” another party to be represented in the matter. However, ethics opinions would apply the rule to lawyers who have reason to believe that the party may be represented, even if they do not “know” for certain. In such cases, it has been said that “a lawyer must undertake a complete and thorough inquiry to determine the ultimate fact of existing or continuing representation.” [N.Y. State Ethics Op. 663 (1994).] For example, when an opposing party claims to be represented by counsel, but the putative lawyer fails to respond to calls or correspondence, a lawyer may communicate directly with the party only after a complete and thorough inquiry into the question of whether the party is in fact represented. [Id.]

May a lawyer allow or advise a client to communicate directly with the opposite party or advise a client what to say in such client-to-client communications? It is well settled that parties involved in litigation or a transaction may communicate directly with each other. There is general agreement that lawyers are not required to discourage their clients from doing so, although the authority was once to the contrary. The principal disagreement nowadays concerns what assistance lawyers may give to clients who wish to speak with the party on the other side. DR 7-104(A)(1) forbids “caus[ing] another to communicate on the subject of the representation with a party the lawyer knows to be represented Further, DR 1-102(A)(2) forbids “[c]ircumventing a Disciplinary Rule through actions of another.” Some have read these rules to forbid advising a client about whether or how to communicate with a represented party.

Outside New York, many authorities have felt that a lawyer may advise his client concerning the availability of the option of client-to-client communications, as long as the advice is not being used simply to circumvent prohibitions on the lawyer’s own direct contact with the other party. But one ethics opinion in New York, New York City Ethics Op. 1991-2 (1991), takes a more restrictive view. It says that:

Caus[ing] another to communicate with a party in this context includes not just using the client as an agent for or in place of the lawyer for making the communication (i.e., where the lawyer directs, supervises or plans the substance of the communication), but also the act of suggesting or recommending to the client that he or she engage in such communication, even though the lawyer has no further involvement in or knowledge of the substance of the communication that subsequently takes place, or the endorsement or encouragement of such a course of action, even when it is first raised or proposed by the client.

Compromise Proposal

A proposed amendment to the rule, endorsed by the New York State Bar Association, would take a more liberal approach. The proposed DR 7-104(B) would provide that:

Notwithstanding the prohibitions of DR 7-104(A), a lawyer in a civil matter may cause a client to communicate with a represented person to discuss resolution of disputes between them, and counsel the client with respect to those communications; provided the lawyer representing such person is informed in advance that such communications will take place.

The proposal reflects a compromise between the City Bar’s interpretation and the more liberal approach of many other jurisdictions. On the one hand, a lawyer would be able to advise the client fully concerning client-to-client discussions. On the other hand, the opposing lawyer would have to be forewarned that the lawyer’s client intended to initiate such discussions. This gives the opposing lawyer a chance to counsel his own client about whether such discussions are advisable and, if so, how they should be conducted.

When is a lawyer acting “[d]uring the course of the representation of a client”? The rule would not apply to a lawyer who solicits work from another lawyer’s client — although other restrictions, including those governing advertising and solicitation, would be relevant. [See, Nassau County Ethics Op. 94-5 (1994).] Nor does DR 7-104(A)(1) apply when a lawyer is acting in a non-legal capacity. Thus, a lawyer who is employed by a corporation as a personnel officer and does not render legal advice or other legal services may communicate directly with an employee who is suspected of wrongdoing, even though the employee has retained a lawyer in connection with the accusation. [See, N.Y. County Ethics Op. 705 (1995).] The rule has been said to apply, however, to lawyers who are representing themselves. Thus, a lawyer representing himself in a fee dispute may not remit a bill to a former client who is represented by counsel in connection with the disagreement. [See, Nassau County Ethics Op. 94-16 (1994).]

Conclusion

Within the organized bar, most of the debate over the no-contact rule has centered on its implications for two powerful groups — namely, government entities and corporations. The public discussion has obscured quite a few other questions about the scope of the rule, including the five addressed above. Yet, it would not be surprising if, for most lawyers in New York, these rarely discussed questions are more relevant to everyday practice than the ones that have garnered so much time and attention in recent years.

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