Part 1 of 3
By Justin O’Dell & Leslie O’Neal
The widespread use of e-mail by lawyers and clients has opened a “Pandora’s box” of ethical issues and traps for the unwary. Whereas litigators opine that the “E” in e-mail stands for Evidence, bar associations are finding that it also stands for “Ethical Violations.” A lawyer in California recently learned the distinction in Terraphase Engineering, Inc., et al. v. Arcadis, U.S., Inc., (N.D. Cal. 2010).
At Arcadis, a group of employees were preparing to leave the company to form their own competing company. Prior to litigation, the employees’ attorney attempted to send an e-mail to his clients, but due to “autocomplete” accidentally sent the e-mail to Arcadis. The e-mail found its way to in-house counsel who then forwarded the same to outside counsel. Neither notified the employees’ counsel, but instead used the e-mail as a basis for the Counterclaim ultimately filed in the lawsuit. The employees’ counsel realized that the information could not have been known but for the e-mail and questioned counsel for Arcadis who admitted receiving and reading the privileged information.
The employees’ counsel filed a Motion which sought only to prohibit Arcadis from use of the privileged information. Arcadis fashioned many arguments, including a particularly inventive claim that the rules of professional conduct did not apply because there was no active litigation between the parties at the time the e-mail was sent. The Court ultimately went beyond the Plaintiff’s request and disqualified Arcadis’ outside counsel. In addition the in-house counsel, who reviewed the e-mails, ordered Arcadis to dismiss its counterclaim without prejudice, to re-file the pleading with new counsel and awarded $40,000.00 in fees to the employees.
Not surprisingly, the use of e-mail was the subject of two of the 2011 ABA advisory opinions. Issued on August 4, 2011, Opinion 11-459 addressed the duty to protect confidentiality of e-mail communications with a client and 11-460 addressed the duty when a lawyer receives copies of e-mail communications with counsel. In Parts 2 and 3 of “Pandora’s Inbox”, we will take a closer look at the impact of these 2 ABA advisory opinions and the issues confronting the use of email communications between attorney and client.