RI-377
April 6, 2018
SYLLABUS
MRPC 1.9(c)(1) prohibits a lawyer from using information relating to the representation to the disadvantage of a former client except when disclosure is allowed under MRPC 1.6 or MRPC 3.3 or when the information has become "generally known." Information is generally known within the meaning of MRPC 1.9(c)(1) if it is widely recognized by members of the public in the relevant geographic area, or if it is widely recognized in the former client's industry, profession, or trade. Furthermore, information that is publicly available is not necessarily generally known.
References: MRPC 1.6 (a)-(b); MRPC 1.9(c)(1)
TEXT
The "generally known" exception under Rule 1.9 of the Michigan Rules of Professional Conduct (MRPC) is a frequent topic of ethics helpline inquiries and thus deserves clarification. For example, State Bar of Michigan members have inquired whether they may use a judgment entered against a former client relating to a prior representation when representing a new or prospective client in an unrelated matter. The inquirers frequently point to court records and suggest that such use should be permitted, since the judgment is a matter of public record. Another example is inquiries about the use of local news reports of a former client's involvement in a matter relating to a prior representation which may be useful when representing a new or prospective client in an unrelated matter. These kinds of inquiries relate to an assessment of the lawyer's duty to a former client to maintain confidences and secrets and to not use information relating to a prior representation to the disadvantage of a former client subject to specific exceptions, one of which is the generally-known exception under MRPC 1.9(c)(1).
The ethical duty to not reveal a former client's confidences and secrets derives from MRPC 1.6, which states in relevant part:
Rule: 1.6 Confidentiality of Information
(a) "Confidence" refers to information protected by the client-lawyer privilege under applicable law, and "secret" refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client.
(b) Except when permitted under paragraph (c), a lawyer shall not knowingly:
(1) reveal a confidence or secret of a client;
(2) use a confidence or secret of a client to the disadvantage of the client; or
(3) use a confidence or secret of a client for the advantage of the lawyer or of a third person, unless the client consents after full disclosure.
The comments to MRPC 1.6 make clear on the topic of "Former Client" that "[t]he duty of confidentiality continues after the client-lawyer relationship has terminated. See Rule 1.9."
The comments to MRPC 1.6 further show the interplay between duties to a current and former client pertaining to confidentiality concerns. The comments state:
MRPC 1.6(b) prohibits the disclosure of a client's confidences or secrets, even after the termination of the lawyer-client relationship. . . . An exception to this prohibition exists regarding information "generally or publicly known" about a former client, regardless of a lack of client consent. See MRPC 1.9(c)(1). In contrast, the "public information" exception does not apply regarding a present client. See MRPC 1.8(b). Therefore, if non-public protected information regarding a former client is likely to be revealed, or used adversely in the prospective representation, then then MRPC 1.9(c) is triggered.
The comments to MRPC 1.6 emphasize the high value placed upon client confidentiality: "A fundamental principle in the client-lawyer relationship is that the lawyer maintains confidentiality of information relating to the representation. The client is thereby encouraged to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter."
However, not all information learned in the course of a representation is a confidence or secret of a client as defined in MRPC 1.6. As to matters learned that are not a client confidence or secret, MRPC describes the circumstances under which those matters may be used to the disadvantage of a former client. MRPC 1.9(c) states, in relevant part:
(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:
(1) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client, or when the information has become generally known; or
(2) reveal information relating to the representation except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client.
MRPC 1.9(c) (emphases added).
MRPC 1.9(c)(1) provides two exceptions to the general rule that prohibits use of information relating to the representation to the disadvantage of a former client. The first exception allows such use when permitted by MRPC 1.6 or required by MRPC 3.3. The second exception allows such use when the information has become "generally known." The focus of this opinion is the second exception, pertaining to "generally known." 1
"Information acquired by the lawyer in the course of representing a client may not subsequently be used or revealed by the lawyer to the disadvantage of the client. However, the fact that a lawyer has once served a client does not preclude the lawyer from using generally known information about that client when later representing another client." Comment to MRPC 1.9 (emphasis added).
While the lawyer-client privilege "applies in judicial and other proceedings in which a lawyer may be called as a witness or otherwise required to produce evidence concerning a client," the generally known exception under Rule 1.9(c)(1) is governed by client-lawyer confidentiality, which "applies in situations other than those where evidence is sought from the lawyer through compulsion of law. The confidentiality rule applies to confidences and secrets as defined in the rule." Comment to MRPC 1.6.
Neither the rules of professional conduct nor the comments on them define "generally-known." However, there is consensus among legal authority that information is not generally known merely because it is publicly available or might qualify as a matter of public record. Emle Industries, Inc. v. Patentex, Inc., 478 F2d 562, 572–73 (2d Cir 1973); Lawyer Disciplinary Bd. v. McGraw, 461 SE2d 850 (W Va 1995); Akron Bar Ass'n v. Holder, 810 NE2d 426, 435 (Ohio 2004); Committee on Legal Ethics v. Walker, 358 SE2d 234 (W Va 1987); Florida Bar v. McCain, 330 So2d 712 (Fla 1976); EF Hutton & Co., Inc. v. Brown, 305 F Supp 371 (SD Tex 1969).
Instead, to be generally known, sources agree, "[t]he information must be within the basic understanding and knowledge of the public." Pallon v. Roggio, 2006 WL 2466854, at *7 (D NJ Aug 24, 2006). Thus, generally known "does not mean information that someone can find" in "public sources." In re Anonymous, 932 NE2d 671, 674 (Ind 2010) (stating "the Rules contain no exception allowing revelation of information relating to a representation even if a diligent researcher could unearth it through public sources").
Similarly, a United States Bankruptcy Court said: "Generally known does not mean information that someone can find. It means information that is already generally known. For example, a lawyer may have drafted a property settlement agreement in a divorce case and it may be in a case file in the courthouse where anyone could go, find it and read it. It is not generally known." In re Gordon Props, LLC, 505 BR 703, 707 n 6 (ED Va 2013). On the other hand,
in some divorce cases, the property settlement agreement may become generally known, for example, in a case involving a celebrity, because the terms appear on the front page of the tabloids. Generally known does not require publication on the front page of a tabloid, but it is more than merely sitting in a file in the courthouse.
Id.
We find persuasive the New York State Bar Association's Committee on Professional Ethics' interpretation that "information is generally known only if it is known to a sizeable percentage of people in the local community or in the trade, field or profession to which the information relates." NY State Bar Ass'n, Comm. on Prof'l Ethics, Op 991, at ¶ 20 (2013) (internal quotation marks omitted). By contrast, "information is not ‘generally known' simply because it is in the public domain or available in a public file." Id.
Therefore, "generally known" depends upon the context in which the disclosure is made. For example, information may be generally known in a town in the Upper Peninsula of Michigan, but entirely unknown in the rest of the state. So long as the lawyer's communication of the information takes place in the context in which the information is generally known, the lawyer has not violated MRPC 1.9.
The American Bar Association Standing Committee on Ethics and Professional Responsibility addressed this topic in its Formal Opinion 479 (December 15, 2017), opining that:
Unless information has become widely recognized by the public (for example by having achieved public notoriety), or within the former client's industry, profession, or trade, the fact that the information may have been discussed in open court, or may be available in court records, in public libraries, or in other public repositories does not, standing alone, mean that the information is generally known . . . .
We agree with this assessment as well.
In summary, MRPC 1.9(c)(1) prohibits a lawyer from using information relating to the representation to the disadvantage of a former client except when disclosure is allowed under MRPC 1.6 or MRPC 3.3 or when the information has become "generally known." Information is generally known within the meaning of MRPC 1.9(c)(1) if it is widely recognized by members of the public in the relevant geographic area, or it is widely recognized in the former client's industry, profession, or trade. Furthermore, information that is publicly available is not necessarily generally known.
1 The Committee notes that Rule 1.9(c)(1) permits a lawyer to use information relating to a prior representation of a former client if its use does not "disadvantage" the former client and the information is not confidential or secret as defined by MRPC 1.6(a).