The Supreme Court of Virginia has tightened the ethical boundaries for lawyers investigating possible litigation claims. The change puts Virginia more in line with other states and federal courts for what’s referred to as the “no-contact rule.”
The justices balked at a revised legal ethics opinion expressly allowing lawyers to talk with employees of a corporate adversary as long as the employees were not part of the corporate “control group.” The court approved language prohibiting communications with a “constituent” of an organization whose actions might be legally imputed to the organization.
The new guidance from the court breaks with a 2019 recommendation from the Virginia State Bar. The VSB Council voted 41-22 that year in favor of allowing more latitude to attorneys gathering information from employees of a potential defendant.
Two Virginia civil litigation defense attorneys had argued it should be unethical to talk with uncounseled staffers of an organization facing litigation exposure. One of those lawyers said the court’s apparent agreement this month will advance “professionalism” in the bar. A plaintiffs’ attorney said the change may bring welcome clarity to the no-contact rule.
Former language permissive
The VSB leadership in 2019 gave approval to an LEO that contained the following provision, referred to as “Section 8” of the opinion:
“Ex parte communications are permitted with employees of a represented organization unless the employee is in the ‘control group’ or is the ‘alter ego’ of the represented organization.” The language was based on a comment to Rule 4.2 of the Virginia Rules of Professional Conduct.
The VSB submitted that LEO to the court for consideration Nov. 18, 2019.
The Supreme Court was not on board with that guidance. The court adopted the suggested LEO last January but vacated the adoption three months later. In an April 3 letter, Chief Justice Donald W. Lemons told the VSB, “The Court is willing to approve this proposed LEO except for Section 8.”
“I am referring this proposed LEO 1890 back to the Bar. If the Bar wishes LEO 1890 to be approved with paragraph 8, please let me know. I look forward to hearing from you on this important issue,” Lemons wrote.
The VSB’s Standing Committee on Legal Ethics discussed the court’s position at an Aug. 27 meeting and the bar then asked the court to approve the LEO without section 8, according to a Sept. 3 letter to the court.
More study contemplated
But the ethics committee had voted to undertake a full study of the no-contact guidance, said VSB Executive Director Karen Gould in the letter to Lemons.
“The first step in that process will be to solicit input from a variety of sources throughout the bar about their views on the current rule and the ABA Model Rule, including the Virginia Trial Lawyers Association and the Virginia Association of Defense Attorneys,” Gould wrote Sept. 3.
Now, further study appears unlikely.
“The Virginia State Bar, along with its standing committees, is an agency of the Virginia Supreme Court. The court speaks through its orders. Here, the court has spoken,” said ethics committee chair Dennis J. Quinn.
The justices spoke Jan. 6 by adopting a new and more restrictive “Comment 7” to Rule 4.2, effective immediately.
Replacing the prior comment which limited the no-contact rule to “control group” or “alter ego” employees who have the authority to bind the corporation, the new Comment 7 bars communications with those “whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability,” among other categories.
The new Comment 7 is almost identical to that in the ABA’s Model Rules of Professional Conduct.
The full text of new Comment 7 to Rule 4.2 is:
“In the case of a represented organization, this Rule prohibits communications with a constituent of the organization who supervises, directs, or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability. Consent of the organization’s lawyer is not required for communication with a former constituent. If a constituent of the organization is represented in the matter by his or her own counsel, the consent by that counsel to a communication will be sufficient for purposes of this Rule. Compare Rule 3.4(h). In communicating with a current or former constituent of an organization, a lawyer must not use methods of obtaining evidence that violate the legal rights of the organization. See Rule 4.4.”
Abingdon’s William Moffet, who pressed for a more restrictive version of the no-contact rule, welcomed the court’s action.
“The process by which we arrived at this point has been long. However, I firmly believe the Supreme Court’s action in approving revised LEO 1890 and amending Comment 7 to Rule 4.2 to adopt the position set forth in ABA Model Rule 4.2, Comment 7, and the position adopted by more than 40 other states, is a significant advancement for the cause of professionalism among Virginia lawyers,” Moffet said.
McLean attorney Thomas E. Spahn – a frequent writer and lecturer on Virginia legal ethics – had just polished an update to a treatise on Rule 4.2 when the court changed some of the ground rules.
The previous language – drawing the line at “control group” and “alter ego” employees – produced confusion, Spahn said. The “control group” analysis stemmed from case law on privilege, while the “alter ego” terminology harkened to disputes over piercing the corporate veil, he said. Meanwhile, federal courts tended to ignore the language of the Virginia rule altogether.
Spahn said he once advised co-counsel they were safe to contact limited partners in a limited partnership. By definition, they were not in the “control group,” he reasoned. To his chagrin, a judge disagreed.
“I think there’s so much confusion about it,” he said. “I think people will be reluctant to call employees of a corporate adversary just because of the uncertainty.”
Adding to the reluctance is the threat that a lawyer could be compelled to be a witness if the lawyer personally contacts employees of an adversary, Spahn said.
Plaintiffs’ attorney M. Bryan Slaughter of Charlottesville said while the rule change brings more clarity, he did not expect a huge change in current practice. He said he would be “nervous” about contacting employees of a litigation target – “especially with a company I knew to be represented.”
Nancy Reynolds of Roanoke – who represents many long-term care facilities – said her adversaries are generally cooperative in investigations.
“I have not run into this simply because plaintiffs’ counsel appreciate having me track down former employees. When I do so, I represent them when their statements can expose the business client to liability,” Reynolds said.
“Whatever the law actually was, most lawyers probably proceeded with caution,” said Mitchell K. Morris of Richmond. He said lawyers likely were either uncertain about the rule or wary about inadvertently contacting a control group employee.
The change brings Virginia in line with most other states and the 4th U.S Circuit Court of Appeals, added colleague J.P. Brown. Morris and Brown are with the litigation department of Butler Snow’s Richmond office.