MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2016-07
As part of settling a lawsuit, does it violate the Maryland Rules of Professional Conduct for a defendant to propose to or for a plaintiff’s attorney to agree to never discuss or disclose the underlying facts of the lawsuit which are already a matter of public record?
You asked the Committee to consider the following question under the Maryland Rules of Professional Conduct (“MRPC”):
As part of settling a lawsuit, does it violate the Maryland Rules of Professional Conduct for a defendant to propose to or for a plaintiff’s attorney to agree to never discuss or disclose the underlying facts of the lawsuit which are already a matter of public record?
We believe that such a request or an agreement would violate MRPC, Rule 5.6(b). Under Rule 5.6, “[a] lawyer shall not participate in offering or making: … (b) an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of a client controversy.”
Prior Committee Opinions
In 1982, this Committee concluded that an attorney may not ask or agree, as a condition of settlement, that counsel “be prohibited from rendering future services to potential clients in pending litigation, parallel litigation, or future litigation.” Md. Bar Ass’n Ethics Op. 82-53 (1982). Such conduct was considered to be in violation of DR 2-108(B) of the Maryland Code of Professional Responsibility, which provided that “[i]n connection with the settlement of the controversy or suit, a lawyer shall not enter into an agreement that restricts his right to practice law.” Id. Other jurisdictions have reached the same conclusion. See, e.g., Cal. State Bar Ass’n Formal Op. No. 1988-104 (applying California Code of Professional Conduct DR 2-109(A)).
In 1998, this Committee concluded that MRPC Rule 5.6(b) did not prohibit an attorney from agreeing not to use or disclose a specific confidential memorandum that the attorney had obtained in litigation. Md. Bar Ass’n Ethics Op. 1998-10 (1998). Our review in that case was tentative, given that the settlement agreement terms were open to legal interpretation. Id. In a similar vein, however, other jurisdictions have repeatedly found that an attorney may agree to keep the non-public terms of a settlement agreement confidential. See, e.g., N. Dakota State Bar Ass’n Ethics Op. 1997-05 (1997) (citing numerous similar opinions).
It is worth noting that neither our 1998 opinion nor the request here require analysis of the full extent to which an attorney may agree not to use or disclose confidential information pertaining to a matter. There may be a significant difference between a request not to use or disclose particular confidential documents or disclose the confidential terms of a settlement versus a broad agreement that defines “confidential information” such that an attorney is effectively precluded from representing clients in future, similar cases. See, e.g., ABA Formal Op. 2000-417 (2000) (finding that Rule 5.6 prohibits an attorney from broadly agreeing not to use any information gained during a representation in future representations against the opposing party or a related party). In this opinion, we only have been asked to consider whether an attorney may be required to keep confidential agreements and information that is available to the public.
Rule 5.6(b) and Public Information
In other jurisdictions, Rule 5.6 or its equivalent, has been repeatedly applied to conduct that, while not expressly prohibiting a lawyer from representing certain clients, would have the same practical effect. Rules equivalent to Rule 5.6 have been interpreted to prohibit a broad agreement not to use or disclose any information learned about a case in future representations, ABA Formal Op. 2000-417; to prohibit an agreement to turn an attorney’s work product over to the opposing party, N.M. Bar Ethics Adv. Op. 1985-5 (1985); and to prohibit an agreement broadly restricting counsel from using case information to assist other litigants or claimants, Tenn. Bd of Prof. Resp., Formal Op. 98-F-141 (1998). As stated by the Ethics Committee of the District of Columbia Bar, “[a]n underlying rationale for all these opinions is that the prohibited provisions restrict the lawyer’s right to practice by effectively preventing him or his firm from representing clients in certain kinds of cases against the settling party.” D.C. Bar Ethics Op. 335 (2006).
For the same reasons, we conclude that Maryland Rule 5.6 prohibits a lawyer from agreeing (or asking another lawyer to agree) never to use or disclose public information regarding a matter. Complying with such a provision would necessarily limit an attorney’s ability to develop or to discuss legal strategy and prior litigation with future clients, and therefore would require the attorney to either refuse to undertake particular representations, or to undertake such cases with only a limited ability to communicate with the client, in potential violation of MRPC Rule 1.4.
The issue of use or disclosure of public information also arises in the context of advertising to prospective clients, as well as one-on-one attorney-client interactions. Several other Ethics Committees have found that Rule 5.6 also protects the interests of potential clients in receiving representation from the best available counsel, and that the Rule therefore prohibits an attorney from accepting limits on future advertising. As stated by the D.C. Bar Ethics Committee, a prohibition on sharing public information interferes with “the basic principle . . . that clients should have the opportunity to retain the best lawyers they can employ to represent them.” D.C. Bar Ethics Op. 335 (2006); see also Bar Ass’n of San Francisco, Ethics Op. 2012-1 (finding, under the California Rules of Professional Conduct, that an attorney may not seek a settlement agreement prohibiting other counsel from “mentioning in their curricula vitae, website and other advertising materials, that they have worked on an LGBT case against the Defendant, or (2) that LGBT harassment cases are an area of expertise”); Chicago Bar Ass’n Inf. Ethics Op. 2012-10 (2012) (concluding that “a settlement agreement may not prohibit a party's lawyer from disclosing publicly available facts about the case (such as the parties' names and the allegations of the complaint) on the lawyer's website or through a press release”); S.C. Ethics Op. 10-04 (2010) (“Rule 5.6(b) protects a lawyer's access to the legal market, and that protection is implicated by advertisements and solicitations equally.”); Texas Ethics Op. 505 (1994) (“To the extent that [solicitation] is permitted under the State Bar Rules, and other applicable state and federal statutes, solicitation is part of the practice of law and therefore cannot be more severely restricted in a settlement agreement [than] it is restricted in the Rules and applicable law.”).
Not all Committees have agreed. The Ethics Committee of the Indiana State Bar Association drew a distinction between attorney advertising, and one-on-one discussions between an attorney and a prospective client. See Ind. State Bar Ass’n Ethics Op. 2014-01 (2014). In that Committee’s view, Rule 5.6 prohibited restrictions on the use of public information in discussions with clients, but did not prohibit an attorney from agreeing not to reference a case or defendant in the attorney’s advertising. Id.
We agree with the majority of the opinions cited above. To the extent that attorney engages in advertising permitted under Rules 7.1 and 7.2, and is not disclosing information that the attorney is required to maintain as confidential under Rule 1.6, we believe that such advertising is one facet of the practice of law, and that it is in the interest of potential clients to receive such information. This conclusion, however, focuses solely on what an attorney may agree to or request in a settlement agreement. To the extent that Rule 1.6 otherwise may permit a client to require that an attorney maintain certain information in confidence, Rule 5.6 does not limit a client’s ability to do so or an attorney’s obligation to abide by such a request.
References:
Ethics Docket 1982-53
Ethics Docket 1998-10
Maryland Rule of Professional Conduct 5.6