Opinion
No. X08 CV 02 0190051
January 30, 2004
MEMORANDUM OF DECISION
I. PRIOR PROCEEDINGS
Paul O'Brien, an attorney, has sued his former employer Stolt-Nielsen Transportation Group, Ltd (SNTG) and its chief executive, Samuel Cooperman, alleging that he was wrongfully constructively discharged from his position as general counsel of SNTG, that SNTG breached a covenant of good faith and fair dealing, and that Cooperman wrongfully interfered with his business expectations. The gravamen of O'Brien's claim is that SNTG failed to cease its allegedly ongoing criminal conduct, failed to rectify that conduct, and that O'Brien was ethically and legally barred from continuing to render legal services and remaining in the employ of the company. In a prior decision, reported at 48 Conn. Sup. 200, 35 Conn. L. Rptr. 65 (2003), this court denied defendants' motion to strike the above three claims while granting their motion to strike two claims for declaratory relief.
In its earlier decision this court considered the issue whether an attorney's professional obligation of keeping client confidences and the existence of the attorney client privilege might preclude O'Brien from prosecuting a claim for wrongful discharge and determined that it was inappropriate to decide that issue in the context of a motion to strike because it involved certain facts not alleged in the pleadings and the finding of certain other facts. Among other things was the issue of which state's professional rules of conduct applied to O'Brien. 48 Conn. Sup. 200, 213-14.
The defendants have now moved for summary judgment on two grounds. First, they renew their argument that O'Brien cannot establish his case without breaching his confidentiality obligations and violating the attorney client privilege. Second, they contend that O'Brien resigned his position and employment as general counsel improperly, in violation of his professional obligations to his client, SNTG, and therefore could not have been constructively discharged.
This second aspect of the defendants' summary judgment argument contends that O'Brien, rather than resigning, was required to take his concerns to the highest authority within SNTG to seek reconsideration of the company's activities. Apparently in response to this part of the defendants' motion, O'Brien has served an affidavit detailing his efforts to discuss his concerns with upper management. Portions of this affidavit and plaintiff's memorandum are subject to a motion to seal made by the defendants, pursuant to Practice Book § 11-20A, on the grounds that they reveal confidential information, O'Brien opposed the motion to seal on the grounds that he was entitled to disclose certain confidential information to defend himself against the allegation that he had acted improperly when he resigned his employment.
When apprised that such an affidavit might be forthcoming the court requested the parties and counsel to follow the following procedure: O'Neill would serve the affidavit and memorandum several days in advance of filing it to enable the defendants to review it and determine whether they believed parts should be subject to a motion to seal. As noted, the defendants have made such a motion.
At the hearing on the motion to seal the court expressed concern that the critical question of what state's rules governed O'Brien's conduct and established his obligations in connection with this lawsuit had been pushed aside by the breadth of both defendants' motion and the plaintiff's response. Furthermore, in responding to a motion to seal the court must determine whether there is an interest which overrides the presumption that all documents filed in court are available to the public. Practice Book § 11-20A. The court concluded that it was premature to decide the motion to seal until a determination of what rules govern O'Neill's conduct is made because such a determination would materially assist in deciding the existence or not of an overriding interest. Therefore, the court announced it would first focus its attention on one of the issues raised by defendants' motion for summary judgment, specifically what professional rules of conduct govern O'Brien's conduct.
II. FACTS
The undisputed facts show that O'Brien was admitted as a lawyer to the bar of the State of Louisiana in 1983 where he first began practicing law. In 1986 he became employed as a lawyer in New York City with the firm of Haight Gardner Poor Havens. In 1988 he was admitted to the New York State bar and remains a member in good standing of that bar presently. In 1988 his membership in the Louisiana bar became inactive and remained in that status through April 2003. O'Brien once again became a member in good standing in Louisiana sometime later in 2003. He has never been admitted to the bar of the State of Connecticut. O'Brien Affidavit, October 28, 2003; Winsor Affidavit, July 30, 2003; Heller Affidavit, December 4, 2003.
O'Brien was hired by SNTG in 1991. His office and primary place of work while at SNTG was in Greenwich Connecticut. Winsor Affidavits, July 30, 2003, November 11, 2003; O'Brien Affidavit, October 28, 2003.
III. DISCUSSION
As discussed previously, see 48 Conn. Sup. 200, 213-14, the various states have differing rules governing a lawyer's obligations to maintain client confidences. Connecticut has adopted a version of the Model Rules of Professional Conduct drafted by the American Bar Association. Rule 1.6 of the Connecticut Rules of Professional Conduct states:
(a) A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation . . . except as stated in subsections (a), (b), (c), and (d).
(d) A lawyer may reveal such information to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, . . . or to respond to allegations in any proceeding concerning the lawyer's representation of the client.
There is no Connecticut authority construing this provision; however, a relatively recent American Bar Association opinion has interpreted the word "claim" to include "a retaliatory discharge or similar claim by an in-house lawyer against [an] employer." American Bar Association, Committee on Ethics and Professional Responsibility, Formal Opinion 424, September 22, 2001. Several state courts have come to the same conclusion. See Burkhart v. Semitool, 300 Mont. 480 (2000); Spratley v. State Farm Mutual Automobile Ins. Co., ___ Utah ___, 78 P.3d 603 (2003).
On the other hand, New York State's professional conduct rules are based on the Model Code of Professional Responsibility and the attendant Disciplinary Rules approved by the American Bar Association in the early 1970s. New York's Disciplinary Rule (DR) 4-101(B) states:
. . . 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 a client.
DR 4-101(C) states:
A lawyer may reveal:
4. confidences or secrets necessary to establish or collect the lawyer's fee or to defend the lawyer . . . against an accusation of wrongful conduct.
22 NYCRR 1200.19(b)(c). The New York Disciplinary Rule is considerably more restrictive than Connecticut's Model Rule 1.6. See Wise v. Consolidated Edison Co., 282 App.Div.2d 335, 723 N.Y.S.2d 462 (2000), leave to appeal denied 96 N.Y.2d 717, 730 N.Y.S. 22 790, 756 N.E.2d 78 (2001) (in-house attorney's wrongful discharge complaint dismissed because it would require disclosure of client's secrets in violation of DR 4-101). This difference between the Model Rules and the Code of Professional Responsibility's Disciplinary Rules was clearly recognized by the Supreme Court of Tennessee in Crews v. Buckman Laboratories Int'l., Inc., ___ Tenn. ___, 78 S.W.3d 852 (2002), which upheld an in-house attorney's cause of action for retaliatory discharge, and recognizing the constraints DR 4-101, as in effect in Tennessee, put on such an action, expressly adopted a new provision in that rule, paralleling Model Rule 1.6, to allow an attorney to reveal confidences and secrets of the client if it is reasonably believed to be necessary to prosecute a claim by the lawyer against the client. Id. 863-64.
The SNTG and Cooperman summary judgment motion contends that O'Brien's conduct is governed by the New York State Code of Professional Responsibility because at the time the critical events alleged in the complaint occurred and when he filed this law suit O'Brien was a member of the New York State bar only. On the other hand, O'Brien argues that he is governed by Rule 1.6 of the Connecticut Rules. In this regard he contends that the issue before the court is evidentiary in nature and that Connecticut's law of evidentiary privilege should apply under conflict of laws principles.
Turning to O'Brien's contentions first, the court disagrees that the issue before it is only an evidentiary one. While the question ultimately is what evidence O'Brien may present to prove his allegations, the answer is not determined solely on what is admissible under evidentiary rules but also on what evidence O'Brien may or may not, as matter of his professional obligation and ethics as a lawyer, be prevented from disclosing to the trier of fact, or anyone else.
The court is fortified in this conclusion by the manner in which other courts have viewed the issue. The Massachusetts Supreme Court recognized a wrongful discharge action for in-house lawyers but restricted the scope of that action to that which could be proved without any violation by the lawyer of his professional obligation to respect client confidences and secrets. See GTE Products Corp. v. Stewart, 421 Mass. 22, 32 (1995). Similarly in Wise v. Consolidated Edison, supra, the New York court found that Disciplinary Rules limited the cause of action without any reference to evidentiary privilege. As previously mentioned, the Tennessee Supreme Court in Crews also recognized that what governed the discharged attorney's ability to prove her case was not the evidentiary rules, but the ethical rules. In none of these cases did the court make any reference to the law of evidence or the concept of admissibility. Instead, the proscriptions on the in-house lawyer's case set forth in those cases emanate entirely from the applicable rules of professional conduct.
In General Dynamics Corp. v. Rose, 7 Cal.4th 1164, 876 P.2d 487 (1994) the California Supreme Court permitted an in-house lawyer to sue for retaliatory discharge. The court said, however, that
except in rare instances when disclosure is explicitly permitted or mandated by an ethics code provision or statute, it is never the business of the lawyer to disclose publicly the secrets of the client.
Id. 7 Cal.4th 1190.
Both O'Brien and the SNTG defendants have submitted affidavits of experts on legal ethics opining, among other things, on the subject of which state's rules of professional conduct govern O'Brien's conduct. O'Brien's expert is the well respected Charles Wolfram, Charles Frank Reavis, Sr. Professor Emeritus of the Cornell Law School and Chief Reporter of the American Law Institute's Restatement of the Law (Third) Governing Lawyers. Professor Wolfram's affidavit evidences a clear and strong preference for the substantive provisions of Connecticut's Rule 1.6 over New York's DR 4-101. On the specific issue of which state's professional conduct rules should apply he is measurably more restrained. He advances the factual position that New York would have little interest "in the outcome of the question of a Connecticut-based lawyer's possible use in Connecticut litigation of confidential information gained during a client-lawyer relationship that was centered almost entirely in Connecticut and not at all in New York." Wolfram Affidavit ¶ 11. He states "I very much doubt that New York disciplinary authorities would be interested in applying New York's Code to the present set of facts, despite the presence in the New York Code of some textual support for SNTG's position that the New York Code (and not the Connecticut Rules) should be applied to Mr. O'Brien." Id. ¶ 14. As to New York's DR-105(B)(1) which is a choice of law provision Professor Wolfram makes the enigmatic remark
. . . the New York Code's text is at best ambiguous on what law should apply, should these facts be presented in a New York disciplinary proceeding. Among other considerations, New York DR-105(B)(1) provides that "[f]or conduct in connection with a proceeding in a court" the lawyer code rules to be applied are those of the forum. That language would seem to suggest a general preference for the application of forum law, which here is that of Connecticut. To be sure, the words following ("before which a lawyer has been admitted to practice (either generally or for purposes of that proceeding)") could be read to limit that choice-of-law rule to activities in a lawyer's capacity as litigator, rather than as party, which is true of Mr. O'Brien here. Such a narrowing reading, however, would have no apparent reason of policy to support it.
Id. Recognizing that DR1-105 is not helpful to O'Brien, Professor Wolfram predicts that it will soon be amended. Id. ¶ 16.
The defendants have submitted the affidavit of Attorney Ralph Elliot, an experienced Connecticut attorney with an extensive background in the field of legal ethics and professional responsibility, and the author of State of Connecticut: Legal Ethics (2002), described as an on-line compendium of the law of lawyering and legal ethics in this state. In his affidavit Attorney Elliot posits the question of what is the source of the duties that O'Brien, as an attorney, owes to his clients and former clients, and points out that while working for SNTG and before he was only admitted in good standing in New York. Elliot Affidavit, ¶¶ 7-8. The affidavit discusses general principles of choice of law factors set out in Restatement (Second) of Conflicts of Law, § 6 and emphasizes the principle of the protection of justified expectations set forth in Section 6(2)(d) and comment g which states "[g]enerally speaking it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to the requirements of another state." Id. ¶¶ 24-25.
The court begins its analysis by reviewing the choice of law provision of the Connecticut Rules and the New York Code. See Restatement (Second) of Conflicts of Law § 6(1). Rule 8.5 of the Connecticut Rules of Professional Conduct states:
A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction although engaged in practice elsewhere.
The Commentary adds: "[w]here the lawyer is licensed to practice in two jurisdictions which impose conflicting obligations, applicable rules of choice of law may govern . . ." The New York Disciplinary Rules, DR1-105 state:
A. A lawyer admitted to practice in this state is subject to the disciplinary authority of this state, regardless of where the lawyer's conduct occurs. A lawyer may be subject to the disciplinary authority of both this state and another jurisdiction where the lawyer is admitted for the same conduct.
B. In any exercise of the disciplinary authority of this state, the rules of professional conduct to be applied shall be as follows:
1. For conduct in connection with a proceeding in a court before which a lawyer has been admitted to practice (either generally or for purposes of that proceeding), the rules to be applied shall be the rules of the jurisdiction in which the court sits, unless the rules of the court provide otherwise; and
2. For any other conduct:
a. If the lawyer is licensed to practice only in this state, the rules to be applied shall be the rules of this state, and CT Page 1090
b. If the lawyer is licensed to practice in this state and another jurisdiction, the rules to be applied shall be the rules of the admitting jurisdiction in which the lawyer principally practices; provided, however, that if particular conduct clearly has its predominant effect in another jurisdiction in which the lawyer is licensed to practice, the rules of that jurisdiction shall be applied to that conduct.
22 NYCRR § 1200.5-a. Under these rules it is clear that the New York Code, and only the New York Code, apply to O'Brien. The Connecticut rule by its terms simply does not apply to one who is not admitted to the Connecticut bar and the New York rule applies to a New York-admitted lawyer in all events unless it is in connection with another jurisdiction's court proceeding and the lawyer is admitted to practice in that jurisdiction. The court notes that this result is consistent with the Restatement presumption that a lawyer in nonlitigation work, as O'Brien was, is subject to the professional code of the single state in which he is admitted to practice. Restatement ( Third) of Law Governing Lawyers, § 5, comment h (2000).
The logic of the matter also seems to compel the conclusion that O'Brien is governed by the New York Code of Professional Responsibility. During the entire period he was employed by SNTG in the capacity of a lawyer, the only basis for O'Brien's ability to act, and to hold himself out as such, was his admission to, and good standing in, the bar of New York State. Thus the sole source of his authority to act as a lawyer, and concomitantly, the sole source of his theory that he was constructively discharged from SNTG because his status as a lawyer prevented him from continuing his employment there, was his good standing as a lawyer in New York. Based on the foregoing the court concludes that O'Brien's actions in this case are governed by the New York Code of Professional Responsibility, the only rules of professional conduct that are applicable to him.
The court does not consider the Louisiana Rules of Professional Conduct applicable. Those Rules are similar to the Rules of Professional Conduct in Connecticut. See Article XVI, Articles of Incorporation of the Louisiana State Bar Association, Rule 1.6. However, O'Brien was not a member in good standing of the Louisiana bar while he was employed by SNTG, when he resigned his position or when he commenced this lawsuit. Neither Professor Wolfram nor Attorney Elliot disagree with this analysis and neither expert opined that Louisiana rules should apply. Wolfram Affidavit, n. 1; Elliot Affidavit, ¶ 22.
Having reached the above conclusion the court must determine how it applies, to the prosecution and defense of this case. O'Brien contends essentially that this court has no business taking on the role of enforcing New York's disciplinary rules or rules of professional conduct, particularly when those rules respecting the protection of client confidences are so markedly different from those in effect in the forum State of Connecticut. As an initial matter this court is not enforcing disciplinary rules. Although the distinction may be subtle, the court sees its task as, first, ascertaining what constraints are placed on a lawyer by the professional rules of conduct and then determining how those constraints apply to the prosecution and defense of this case.
The court concludes there is really only one choice and that is to prohibit O'Brien from divulging client confidences and secrets in violation of the New York Code of Professional Responsibility. The restrictions imposed by New York's DR4-101(B) are quite clear, and they prohibit O'Brien from using client confidential information to prosecute any claim against the client except to collect a fee or to defend himself against an accusation of wrongful conduct. The alternative, to allow O'Brien to use such confidential information in this case, in violation of the rules which govern his professional conduct is unacceptable. It would put this court in the position of standing aloof and uninvolved while observing, and possibly appearing to condone, a breach of professional duty. While this court is not aware of any cases directly dealing with an out-of-state attorney bound by another state's rules of professional conduct, it can see no principled rationale for applying an approach different from that applied in GTE Products and Wise to attorneys bound by the forum state's rules.
Having reached this point, it is important to stress what this decision has not decided. First, the court has not decided the defendants' summary judgment motion except for that aspect discussed above to the effect that O'Brien is bound by the New York Code of Professional Responsibility. Second, the court has not determined what information or facts are client confidences and secrets or protected by the attorney-client privilege. Third, there has been no decision as to what information or facts, if any, may be client confidences yet available for use by O'Brien under the DR 4-101(C)(4) to defend against an accusation of wrongful conduct.
The next step in this case will be to hear and consider the defendants' motion to seal. The court orders that motion to be heard on Monday, February 23, 2004 at 10:00 a.m. in Courtroom 7B.
TAGGART D. ADAMS SUPERIOR COURT JUDGE. CT Page 1092