Chair Williams, recently appointed Chair of the Committee by the President of the Bar Association, called the meeting to order at 10:00 a.m. He thanked Alice Senechal for her leadership and direction as Chair during the Committee's study of several important issues over the past few years. He next welcomed Jean Hannig as a new member of the Committee appointed by the Board of Governors. Committee members next reviewed Attachment B (February 19, 2004) - minutes of the November 14, 2003, meeting.
It was moved by Sandi Tabor, seconded by Judge Braaten, and carried unanimously that the minutes be approved.
Lawyer Assistance/Diversion Proposal - Hearing
Chair Williams drew attention to Attachment C (February 19, 2004) - the Supreme Court's notice of hearing concerning the Committee's lawyer assistance and diversion proposal. He suggested Committee members should discuss how the hearing would be handled and requested discussion particularly regarding Attachment D (February 19, 2004) - the letter from Jim Hill and the attached ABA Model Lawyer Assistance Program Rule.
With respect to the hearing, Judge Braaten said she would be unable to attend due to a previously scheduled trial. After discussion, it was agreed that Alice Senechal would provide a general overview of the Committee's study of lawyer assistance and diversion and the underlying principles in support of the proposal. Staff will then review the proposed new rules and rule amendments.
Jean Hannig observed that in a recent conversation with disciplinary counsel it was noted that a complainant had raised an issue that might be of concern, and that is that an assistance or diversion program could be perceived as a way of covering up lawyer discipline issues or affording a lawyer a way of avoiding discipline. She said the issue of public perception might require some attention. Judge Braaten explained that the ABA Model LAP Rule contains a provision directed at educating the public about the purposes of lawyer assistance and diversion and a similar effort could be a way of addressing the perception issue.
At the request of Chair Williams, Judge Braaten then reviewed the ABA Model LAP Rule in light of the Committee's proposal. She explained that the model rule was first adopted in 1995 and then recently revised. As a general matter, she said the model rule is designed as a guide to assist states in developing an assistance program and, therefore, it does not set out what could be described as "mandatory" components. To that end, she said, the model rule commentary recognizes that structures and services provided in programs will vary. She said the revised model rule is more explicit in scope with respect to the kinds of issues addressed in an LAP program, i.e., substance abuse, mental health, gambling, and other compulsive disorders. She noted that the Committee's proposal broadly refers to "problems that may adversely influence a lawyer's performance." She said the model rule does not address issues concerning law office management, which the Committee had concluded would be among the kinds of problems that an assistance and diversion program could address.
With respect to other particular differences, Judge Braaten said the model rule includes among the purposes of an assistance program the development of programs to educate the bench, bar, and law school community about issues that negatively affect the legal profession. Additionally, she reiterated that the model rule also addresses education efforts with respect to the general public's understanding of a variety of issues and problems that affect the legal profession. She said the model rule is more specific than the Committee's proposal with respect to the hiring of a director and staff, while the emphasis on the use of volunteers in the model rule is similar to the Committee's proposal. She said the Committee's proposal with respect to immunity is preferable in being more specific than that contained in the model rule. She noted that the model rule suggests periodic review of the operation of the assistance program, while the Committee's proposal does not, but perhaps should, address the issue. In summary, she said the Committee's proposal does not greatly conflict with the model rule's suggested guidelines and, in some respects, the proposal has some preferable features.
In response to a question from Mike Williams, Judge Braaten said the model rule contains only a few and relatively general references to diversion.
After further discussion, Committee members agreed there was no need to recommend any changes based on the model rule to the Committee's proposal.
Sandi Tabor said she would contact Christine Hogan with respect to the education components contained in the model rule which are not addressed in the Committee's proposal. Committee members agreed that if education programs were undertaken in the manner described in the model rule, the State Bar Association would lead the effort.
Multijurisdictional Practice - Review of Revised Amendments to Rule 3, Admission to Practice Rules
At the request of Chair Williams, staff reviewed revisions to Rule 3 resulting from the Committee's November 14, 2003, meeting - Attachment E (February 19, 2004).
Chair Williams recalled the issue reserved from the last meeting regarding application of the proposed pro hac vice admission requirements to attorneys involved in prelitigation alternative dispute resolution. He recounted his subsequent conversations with Dan Crothers regarding the issue and the initial conclusion was that the MJP Task Force had intended that the pro hac vice requirements would apply. He said Penny Miller had apparently expressed concern that the district court not be the entity responsible for handling the motions to "appear" in an ADR proceeding. He said Dan Crothers' assessment was that it would be the responsibility of the mediator, for example, to receive the motion. He said he and Dan Crothers further discussed the particular rule amendments pertaining to pro hac vice admission and, despite the early Task Force conclusion that they should apply, it appears the proposed procedure is deficient with respect to its application to prelitigation ADR processes.
Alice Senechal wondered whether it is possible to follow the registration approach set out in proposed Section B (in-house counsel), which, among other things, would require the attorney involved in ADR to submit certain information to the Board of Law Examiners. Sandi Tabor agreed that registration might be a workable alternative. Randy Lee observed that the registration process requires the attorney to submit an affidavit from the "CEO" of the attorney's employer. He asked who would be the counterpart for purposes of an attorney registering with respect to ADR. Sandi Tabor suggested an alternative might be to require a letter of good standing from the applicable disciplinary authority or some other entity, such as the bar association. Randy Lee wondered whether the required registration fee would be considered unreasonable if the registering attorney were only involved, for example, in a two-day arbitration proceeding.
With respect to the registration approach, Randy Lee asked what would be expected of the attorney registering and whether the Board of Law Examiners would be expected to, for example, "approve" the registration. Alice Senechal said the proposed amendments to Rule 3, as received from the MJP Task Force, do not explicitly address an approval process for registering attorneys. However, she noted that Section B1(a) does require filing an affidavit "requesting permission to render legal services", which seems to imply approval of some sort would occur. Sandi Tabor agreed approval of the registration in some fashion is a reasonable approach.
Chair Williams said it is clear that if Rule 3 is intended to address attorney involvement in ADR proceedings, then additional changes will be necessary. He requested suggestions for how to resolve the issue. Randy Lee noted that until the Rule 3 issues are resolved, the other MJP proposals- amendments to Rule 5.5 and 8.5 - are being held in abeyance.
Sandi Tabor said one alternative is to resolve the issue in some fashion at this meeting, submit the proposals, and await the comments, if any, from the Board of Law Examiners. On the central issue, she said if ADR is to be addressed in the rule the underlying assumption for doing so is that there should be some form of supervision of an out-of-state attorney involved in an ADR proceeding in North Dakota. In that circumstance, she said, it would seem to be the proper function of the Board to monitor the registration process.
After further discussion, it was moved by David Hogue, seconded by Sandi Tabor, and carried unanimously that revised Rule 3 be further modified to require registration of nonresident attorneys representing clients in prelitigation ADR proceedings, including mediation and arbitration, and that the registering attorney be required to provide a letter of good standing from the relevant disciplinary authority.
Alice Senechal suggested the following additional changes to proposed Rule 3: in Section B1 change "Secretary of the State Board of Law Examiners" to simply "Board of Law Examiners"; delete "the fact" from Section B1(b), second line; modify the first line of Section B2 to read, in relevant part, "A nonresident attorney may provide legal services... until the lawyer is eligible for admission ... ."; delete "to be eligible" from the last line of Section B2; and delete "proceeding" from the second, one-line paragraph in the explanatory note.
It was moved by Alice Senechal, seconded by Sandi Tabor, and carried unanimously that proposed Rule 3 be further modified as described.
Chair Williams said a revised Rule 3 will be prepared for review at the next meeting.
Rule 1.13 - Organization as Client - and Related Rule 1.6 - Confidentiality of Information
At the request of Chair Williams, Randy Lee reviewed Attachment F(February 19, 2004) - his review and comparison of Model Rule and North Dakota Rule 1.13 and related comments concerning Rule 1.6.
With respect to the Background Paper, Mike Williams drew attention to the question posed regarding Rule 1.6 (2nd page, 4th paragraph), i.e., whether North Dakota's rule should follow the ABA rule language in substituting "required" for "permitted" revelation with respect to the prevention of imminent death. Randy Lee explained that North Dakota's rule differed from the early model rule as a reflection of the conclusion that there were circumstances, identified in the rule, under which lawyers would be required to reveal certain information relating to representation. The Model Rule, he said, permits revelation under those circumstances. In other respects, he said, the E2K Model Rule has been modified to arrive at a point very similar to North Dakota's rule. The question, he said, is whether to now follow the Model Rule since it permits revelation in circumstances previously addressed in our rule. The advantage, he said, of adopting the Model Rule is the availability of interpretations and applications of the rule as adopted in other states. The remaining narrow difference, he said, is those situations in which our rule requires revelation: when believed reasonable necessary to prevent acts likely to result in imminent death or imminent substantial bodily harm. He recommended retaining those required revelations, but otherwise adopting the Model Rule. Additionally, he recalled the residual issue raised by Mark Hanson concerning whether paragraph (h), which the Committee had previously deleted, should be retained in the rule.
In response to a question from Jean Hannig, Randy Lee said the Model Rule's references to "reasonably certain death or substantial bodily harm" would replace current references to "imminent" death or "imminent" substantial bodily harm.
It was moved by Randy Lee, seconded by Alice Senechal, and carried unanimously that Model Rule 1.6 with the recommended modifications, be adopted.
Randy Lee said the remaining additional question with respect to Rule 1.6 is whether paragraph (h) concerning permitted revelation when information has become generally known should be added back into the rule. He noted that the provision was imported into Rule 1.6 in 1985 from then Model Rule 1.9, which was reflection of the conclusion that Rule 1.6 should address the use of information relating to representation, as well as the revelationof such information. Doing so, he said, addressed use and revelation in one location, as opposed to the Model Rule approach, which addressed the issues in Rules 1.6, 1.8, and 1.9. He recalled Mark Hanson's request that, if the Committee holds to its decision to delete paragraph (h) from Rule 1.6, a like provision should be added to Rule 1.9. He noted that the Committee's action with respect to adopting Model Rule 1.6 has the effect of deleting the "use of information" provision from the present rule.
Jean Hannig observed that Rule 1.9 focuses on prior representation, while Rule 1.6 addresses the revelation of information at anytime, including during representation. She suggested the need to address, in both situations, the use of information that has become generally known.
David Hogue said the dispute often becomes whether, in fact, the information has become "generally known". He gave the example of a settlement reached regarding the derailment in Minot which was disclosed by an attorney to the dismay of the parties receiving the settlement. He said the attorney's justification for disclosure was that information concerning the settlement was "generally known" because of a reference in the Northwest Reporter and a report in a Minneapolis newspaper.
Mike Williams said the point raised by Mark Hanson was that the Ethics Committee has found the "generally known" provision very useful in reviewing issues concerning potential conflicts in related cases. Committee members agreed that particular issue is better addressed in Rule 1.9.
Staff noted the Committee, at its last meeting, adopted Bob Udland's recommendation regarding Rule 1.9, which entailed including a client consent in writing requirement in paragraph (b) and no changes to paragraphs (a) and (c).
Sandi Tabor observed that to address the issue a change would be required to the inclusion in Rule 1.9(c) of an exception related to Rule 1.6, which would no longer be applicable given the changes to Rule 1.6.
It was moved by Randy Lee, seconded by Jean Hannig, and carried unanimously that Rule 1.9(c) be modified to replace the Rule 1.6 exception language with "except as these Rules would permit or require with respect to a client, or when the information has become generally known" [from Model Rule 1.9(c)(1)].
Randy Lee noted that a lawyer's use of information is also addressed, as a prohibition, in current Rule 1.8(b).
Randy Lee then turned to a review of Model Rule and North Dakota Rule 1.13. He explained that the "up the ladder" reporting process was not included in Rule 1.13 when North Dakota adopted the rule in 1985. The question now, he said, is whether the process should be included in the rule. He said all of the substantive changes made by the ABA are in the part of Rule 1.13 that was rejected in 1985. As a substitute to including the up the ladder reporting process in the rule, the 1985 approach was to include language in the comment. He said the Model Rule enhances the reporting process in response to the Sarbanes-Oxley Act, which includes a requirement that an attorney report a client's securities violation or breach of fiduciary duty up the corporate ladder.
Randy Lee explained that the previous approach was that a lawyer for a corporation was permitted to report an employee's misconduct that might affect the corporation up the ladder to corporate superiors. He said the new Model Rule 1.13, in certain circumstances, transforms that permission into a mandate to report up the ladder. It also permits, he said, a lawyer to reveal information relating to representation of the organization if the highest authority in the organization does not address a violation of law or obligation to the organization.
Sandi Tabor wondered why permission to report was necessary since an attorney for a corporation represents the entity rather than a particular person within the entity. As such, she said, the attorney's obligation would be to report to the highest level in the corporation if necessary. Consequently, she said it is unclear why an explicit reporting requirement would be needed.
After further discussion, it was moved by Randy Lee, seconded by Alice Senechal, and carried unanimously that current Rule 1.13(a), which is the same as the model rule provision, be retained; that Model Rule 1.13(b), (c), (d), and (e) be added to North Dakota's rule; and that current Rule 1.13(b)and (c), counterparts to Model Rule 1.13(f) and (g), be retained.
Rule 1.16 - Declining or Terminating Representation
Judge Braaten then reviewed Attachment H (February 19, 2004) - her review and comparison of Model Rule and North Dakota Rule 1.16. She said there is a slight variation from her report in that with respect to paragraph (a) there are two differences, rather than only one, between the Model Rule and North Dakota's rule. She said the current rule requires, while the Model Rule does not, an attorney to seek to withdraw from representation if false testimony has been provided by the client and the client refuses to allow disclosure of the falsity to the court. The Model Rule, she explained, requires the lawyer to take "remedial measures", one of which could be disclosure. She recommended no change to the current rule. The second difference, she said, is that the current rule allows withdrawal if the lawyer "reasonably believes" the representation will result in a violation of the rules. The Model Rule, she said, does not include the reasonable belief provision. She said the current rule is the preferable approach
It was moved by Judge Braaten, seconded by Randy Lee, and carried unanimously that no changes be recommended for paragraph (a) of Rule 1.16.
Randy Lee suggested the comment should be clear with respect to what happens if a lawyer seeks to withdraw under Rule 1.16(a)(3) [client's false testimony] and the court will not permit withdrawal.
With respect to Rule 1.16(b), which governs optional withdrawal, Judge Braaten said the current rule and the model rule are quite similar. She said the model rule is somewhat clearer regarding the first circumstance for withdrawal [paragraph (b)(1)], the subject matter of which is set out in the first paragraph of North Dakota's rule. She recommended the model rule structure with respect to paragraph (b)(1). Additionally, she said paragraph (b)(1) of the North Dakota rule allows withdrawal if the lawyer "believes" the client is persisting in conduct involving the lawyer's services that is criminal or fraudulent. The model rule, she said, incorporates a reasonableness standard, i.e., "reasonably" believes. She noted the oddity that the comment to the North Dakota rule uses the "reasonably believes" terminology and recommended that paragraph (b)(1) be modified to track the model rule language. With respect to paragraph (b)(3) of the North Dakota rule, she noted that the model rule counterpart [paragraph (b)(4)] refers to client actions the lawyer considers repugnant or "with which the lawyer has a fundamental disagreement". North Dakota's provision, she said, refers to actions consider repugnant or "imprudent". She recommended the model rule language.
It was moved by Judge Braaten, seconded by Alice Senechal, and carried unanimously that paragraph (b) of the North Dakota rule be modified in the manner recommended.
It was moved by Judge Braaten, seconded by Randy Lee, and carried unanimously that no changes be made to paragraph (c).
With respect to paragraph (d), Judge Braaten said the there is no counterpart in the model rule and she recommended retaining paragraph (d). She said paragraph (e) of the model rule and North Dakota's rule are essentially the same except the model rule addresses refunding advance payment of expenses not incurred. She recommended that current paragraph (e) be modified to include the model rule language.
It was moved by Judge Braaten, seconded by Alice Senechal, and carried unanimously that current paragraph (d) be retained without change and that current paragraph (e) be modified as recommended.
For future reference, Randy Lee noted that if any changes are recommended for Rule 3.3(c), the Committee should review Rule 1.16(d) as the two provisions are linked.
Rule 1.17 - Sale of a Law Practice
At the request of Chair Williams, David Hogue reviewed Attachment I (February 19, 2004) - his review and comparison of Model Rule and North Dakota Rule 1.17. He said the North Dakota rule differs in two respects from the Model Rule: it appears to authorize a change in the fee arrangement between the buyer and client, and it is more demanding with respect to the notice given to the client.
He said there does not appear to be any pressing need to change current Rule 1.17.
Sandi Tabor observed that Rule 1.17 is relatively new and while there are some differences from the Model Rule, those differences were consciously adopted. She agreed there is no need to recommend changes to the rule.
It was moved by David Hogue, seconded by Sandi Tabor, and carried unanimously that no changes be made to Rule 1.17.
Rule 1.18 - Governmental Entity as the Client
At the request of Chair Williams, Sandi Tabor distributed and reviewed her report concerning North Dakota Rule 1.18, which has no direct counterpart in the model rules. A copy of the report is attached as an Appendix.
Sandi Tabor explained that Rule 1.18 mirrors current Rule 1.13 except that it pertains to governmental entities, rather than "organizations", as clients. She said the rule was reviewed and discussed by staff in the Attorney General's office with the objective of determining how best to address conflict-related issues when a governmental entity is the client. She said the report suggests deletion of significant portions of the rule in light of statutory changes with respect to sovereign immunity. She noted that current paragraph (a) contemplates that the attorney represents the governmental entity rather than officials and employees. In fact, she said, statutes now generally require the Attorney General's office to represent both. She said the change to paragraph (a) reflects this changed situation. She said new paragraphs (b) and (c) are suggested as possible methods of addressing what are perceived as the real conflicts. With respect to current paragraph (c), she said it is very unclear how Rule 1.7 would apply to a variety of scenarios that might occur within the Attorney General's office. For example, she said, it is not possible to conflict out the Attorney General because of the statutory and constitutional authority vested in the office.
Alice Senechal observed that the suggested changes seem directed towards litigation issues and wondered how it might apply to non-litigation issues. Sandi Tabor there is some uncertainty about how the issues would arise in a non-litigation setting.
With respect to new paragraph (c), which provides for timely screening, Sandi Tabor said Attorney General staff were concerned that if there is nothing to address such screening, the application of Rule 1.7 and 1.10 would be very uncertain.
Randy Lee said there those who are highly suspicious of screens and the change may be viewed as one more acceptance of screens. He said there may be a question regarding why government attorneys can employ screens but private attorneys cannot. He acknowledged there is a difference because the Attorney General is the attorney regardless of any rule of professional conduct.
Mike Williams said paragraph (a) raises a concern in that a government attorney representing the entity and the officials or employees may be in a difficult position if there are dissenting or minority positions among those represented. Sandi Tabor responded that the statute governing representation of officials and employees is based on the premise that there is a joint representation. Mike Williams observed that statutory considerations and complexities with respect to the rule's possible application may suggest the rule is not needed. Sandi Tabor agreed it may be preferable to not have a rule.
Judge Braaten said paragraph (a) seems too much in response to situations involving the Attorney General's office and there may be other circumstances that require attention, such as special assistant Attorney General appointments. Sandi Tabor noted that the scope of the special assistant's duties are dictated by the appointment. She said there are specific state laws that mean that paragraph (a) is, in fact, true.
David Hogue said he is concerned as well with the breadth of the changes to paragraph (a). He said the combination of representing the entity and officials or employees seems to place the attorney in the position of representing those who may have competing interests.
Mike Williams said if the ABA did not see a need for something like Rule 1.18, there may be a question whether it is needed at all.
Alice Senechal said there may be some value in addressing the conflict issues covered in the new paragraphs (b) and (c) but wondered whether that could be done, for example, within the comment to Rule 1.7.
Sandi Tabor said it was thought paragraph (a), with the modifications, might be retained because relevant statutes are clear with respect to the scope of representation in litigation matters. But, she said, perhaps paragraph (a) is not need becausethere is a governing statute.
It was moved by Randy Lee and seconded by Sandi Tabor that current Rule 1.18 be deleted from the Rules of Professional Conduct.
Randy Lee observed that suggested paragraphs (b) and (c) may provide some comfort with respect to conflicts and screening, but how the Supreme Court might view the screening is uncertain.
The motion carried unanimously.
Rule 2.1 - Adviser, Rule 2.2 - Intermediary, and Model Rule 2.4 - Third-Party Neutrals
Mike Williams reviewed Attachment K (February 19, 2004) - his reports concerning Model and North Dakota Rules 2.1, 2.2, and Model Rule 2.4. He said Model Rule 2.1 is identical to the North Dakota Rule and, therefore, he would recommend no changes to the current rule. He said Model Rule 2.2 was deleted with a recommendation that discussion of the issue of common representation be addressed in the comment to Rule 1.7. He said there does not appear to be any compelling reason to retain Rule 2.2 and he recommended following the approach taken with respect to Model Rule 2.2 He said there is no equivalent in North Dakota's Rules to Model Rule 2.4, which addresses attorneys serving as neutrals and recognizes that ADR has become a substantial part of the civil justice system. He said North Dakota would be well-served by adopting Rule 2.4.
It was moved by Jean Hannig, seconded by Sandi Tabor, and carried unanimously that current Rule 2.1 be retained without change.
It was moved by Alice Senechal, seconded by Randy Lee, and carried unanimously that current Rule 2.2 be deleted and that a corresponding comment be added to the comment for Rule 1.7.
It was moved by Alice Senechal, seconded by Sandi Tabor, and carried unanimously that Rule 2.4 be adopted.
Rule 6.5 - Nonprofit and Court-Annexed Limited Legal Services Programs
Staff noted that the Committee had previously approved Model Rule 6.5 pending consideration of any possible changes relating to Rule 1.10. He said Tim Priebe's report regarding Rule 1.10 does not suggest any changes concerning Rule 6.5. He said the issue is whether the Committee is prepared to recommend the proposed rule to the Board of Governors for review and comment.
It was moved by Alice Senechal, seconded by Sandi Tabor, and carried unanimously that proposed Rule 6.5 be submitted to the Board of Governors.
Chair Williams said consideration of Rule 2.3 and the remaining items on the agenda would be held over until the next meeting.
Other Matters - Committee Process
Sandi Tabor observed that the Committee's present approach to reviewing rules seems somewhat disjointed in reviewing only blackletter rule provisions and delaying review of the associated comments. She suggested that copies of the rules as they are revised be available so that Committee members are more fully aware of past actions when changes to additional rules are considered.
Alice Senechal suggested the possibility of extending the length of meetings or having a two-day meeting so the Committee can focus at greater length on rule changes. She said it may also be helpful to have a subcommittee review the comments for a small group of revised rules.
Committee members agreed the Committee should quickly develop a more coordinated and expeditious method of reviewing the rules.
The following rule review assignments were made: Model Rule 1.18 - Alice Senechal; Rules 3.1 and 3.2 - Mike Williams; Rule 3.3 - Randy Lee; Rules 3.4 and 3.5 - Jean Hannig.
There being no further business, the meeting was adjourned at 2:05 p.m