by Robert M. Dato
Litigators—and those who advise clients in litigation—there is always the possibility of a “high-profile” case. It can happen when one of the litigants is well known to the public, or when the issues to be tried are of interest to others besides the litigants. Whatever the scenario, you may find yourself in a situation where you want (or are asked) to make statements outside of court concerning the case. While lawyers generally have the same free speech rights as anyone else, there are ethical limits, as well as potential liability, for what are known as “extrajudicial statements.”
Ethical Rules and Potential Disqualification
Although other ethical rules might potentially apply in a given case, the focus here is on Rule 5-120 of the California Rules of Professional Conduct (CRPC), which deals with Trial Publicity. (Rule 3.6 of the ABA’s Model Rules is essentially identical.) CRPC 5-120 starts off with what a member “shall not” do:
A member who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the member knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.
Cal. Rules of Prof’l Conduct r. 5-120(A).
The primary purpose behind this portion of the Rule is well known: Don’t say anything that might taint the jury pool. Comment 1 to ABA Rule 3.6 states in part:
Preserving the right to a fair trial necessarily entails some curtailment of the information that may be disseminated about a party prior to trial, particularly where trial by jury is involved. If there were no such limits, the result would be the practical nullification of the protective effect of the rules of forensic decorum and the exclusionary rules of evidence.
Model Rules of Prof’l Conduct r. 3.6, cmt. 1 (Am. Bar Ass’n 1983). See also Standing Comm. on Discipline of the U.S. Dist. Ct. v. Yagman, 55 F.3d 1430, 1442 (9th Cir. 1995) (“speech otherwise entitled to full constitutional protection may nonetheless be sanctioned if it obstructs or prejudices the administration of justice”).
CRPC 5-120(B) then goes on to give examples of what a lawyer can say without fear of violating the Rule. These include such things as “the claim, offense or defense involved,” “information contained in a public record,” “a request for assistance in obtaining evidence,” and “a warning of danger concerning the behavior of a person involved, when there is reason to believe that there exists the likelihood of substantial harm to an individual or the public interest.”
The Model Rules also contain commentary recognizing the importance of free speech:
[T]here are vital social interests served by the free dissemination of information about events having legal consequences and about legal proceedings themselves. The public has a right to know about threats to its safety and measures aimed at assuring its security [and] in the conduct of judicial proceedings, particularly in matters of general public concern.
Model Rules of Prof’l Conduct r. 3.1, cmt. 1 (Am. Bar Ass’n 1983).
CRPC 5-120 can form the basis of a motion to disqualify counsel. But as demonstrated in Ramirez v. Trans Union, LLC, No. 3:12–CV–00632 JSC, 2013 U.S. Dist. LEXIS 39120 (N.D. Cal. Mar. 20, 2013), it is not always an easy sell. In that case, Ramirez sued Trans Union because he was denied an auto loan after Trans Union provided a car dealer with a credit report which indicated that Ramirez’s name matched a name on the federal government’s Office of Foreign Assets Control (OFAC) list. This list “includes terrorists, money launderers and narcotic traffickers.” Id. at *2. When Ramirez called Trans Union, he was first told he was not on the list and that he would be sent a copy of his credit report. But that report, as well as a separate letter from Trans Union, said that Ramirez “potentially matched to the OFAC list.” Id. at *3. Ramirez’s lawyer (Anderson) spoke with Trans Union “a lot of times” and then sent a letter, at which point Ramirez’s name was removed from the list. Id.
While the case was pending, Anderson posted a summary of the case on the firm website that included the following: “When Ramirez disputed the report, Trans Union told him there was nothing Ramirez or the credit bureau could do to fix the problem!” Id. at *4.
Trans Union moved to disqualify Anderson, arguing he violated Rule 5-120 because he knew his posting was false and would materially prejudice the administration of justice in the case. Id. at *8-9. The district court disagreed. The court first found that Anderson’s posting was not “patently false and misleading,” citing to Ramirez’s deposition testimony that Trans Union only removed his name from the list after many telephone calls and a letter requesting that his name be removed from the OFAC list. Id. at *10. “Moreover, the statements fall well below the prohibition on extrajudicial statements that an attorney ‘knows or reasonably should know will have a substantial likelihood of materially prejudicing an adjudicative proceeding.’ [Citation.] Indeed, Defendant does not cite a single case in which an attorney was found to have violated Rule 5-120 based on a website posting, and certainly no case in which a court disqualified counsel based on a website posting about a case.” Id. at *10-11.
Anderson’s posting in Ramirez did not contain any obviously inadmissible evidence that could hinder the administration of justice. A statement about the pending case—even if it is exaggerated or contains some inaccuracies—is unlikely to prejudice the adjudication of the case.
Exposure to Claim for Defamation
Ethical considerations aside, if your client’s adversary doesn’t like your extrajudicial statements, you might be facing a lawsuit rather than a motion for disqualification. If so, the extrajudicial statements may be protected by the “fair report privilege” (Cal. Civ. Code § 47(d)) or the litigation privilege (Cal. Civ. Code § 47(b)).
In J-M Mfg. Co., Inc. v. Phillips & Cohen LLP, 247 Cal. App. 4th 87 (2016), the law firm of Phillips & Cohen (Phillips) represented a number of governmental entities in a False Claims Act case against J-M Manufacturing. Phillips’ clients alleged J-M “had violated applicable false claims acts by knowingly misrepresenting that two types of [PVC] pipes . . . purchased by the plaintiffs had been manufactured in compliance with industry standards . . . for long-term strength and durability.” Id. at 91. After litigating for seven years, a jury found in the first phase of trial that J-M knowingly misrepresented its pipes complied with industry standards in each of 26 identified projects. Id. at 93. The second phase of the trial would determine damages.
The next day, Phillips issued a lengthy press release that stated “a federal jury unanimously found that J-M manufactured and sold pipe that is ‘faulty,’ ‘substandard,’ ‘weak,’ and ‘shoddy’. . . . The trial exposed [J-M’s] deliberate efforts to cut costs by using shoddy manufacturing practices to make weaker but more [PVC] pipe.” Id. at 93-94. The press release went on to say:
States and water districts that are covered by this lawsuit spent $2.2 billion to buy [J-M] during the 10-year period [J-M] was lying about the long-term strength of the pipe . . . . Those entities now are entitled to recover a substantial portion of that cost plus the cost to replace the shoddy pipe much sooner than expected. This likely will mean damages could total billions of dollars because it’s expensive and disruptive to replace water pipe. [¶] [J-M] defrauded its customers for 10 years . . . The jury decided that [J-M] management cared only about the amount of pipe [J-M] produced, not the quality of that pipe. [J-M] deceived outside inspection agencies and ignored over a decade of failing test results. The jury’s conclusion that JM Eagle committed fraud was based on a lot of evidence.
Id.
J-M sued Phillips for defamation and trade libel. J-M contended that the press release was not a fair or accurate report of the proceedings and grossly misrepresented the jury’s findings. According to J-M, “[w]hether its pipe was substandard or defective was not at issue in phase one of the federal litigation, and the federal plaintiffs had never proved the pipe sold was substandard or defective.” Id. at 94.
The primary issue was whether the press release was privileged under Civil Code section 47(d), which protects a publication or broadcast if made “[b]y a fair and true report in, or a communication to, a public journal, of [ ] a judicial . . . proceeding, or [ ] anything said in the course thereof . . . .” Id. at 97. The trial court denied Phillips’ anti-SLAPP motion (Cal. Code Civ. Proc. § 425.16) on the grounds there was a factual dispute as to whether the press release was a “fair and true report.”
The court of appeal reversed, finding as a matter of law that Phillips’ press release was a fair and true report:
[T]he average reader of the entire three-plus-page press release would reasonably understand the release described the substantial evidence presented at trial . . . . J-M’s attempt to read the press release as inaccurately implying the jury had found specific items of pipe it had provided for underground water systems were defective and had actually failed is predicated on a strained construction of the language used [and] relies on ‘snippets taken out of context’ . . . .
Id. at 101.
Although there was a dissent in the J-M Manufacturing case, other courts have agreed with the majority’s analysis. Argentieri v. Zuckerberg, 8 Cal. App. 5th 768, 788-90 (2017); Healthsmart Pac., Inc. v. Kabateck, 7 Cal. App. 5th 416, 431-32 (2016).1
The J-M court did not address whether the press release was protected by the litigation privilege established in Civil Code section 47(b). There is a split of authority as to whether section 47(b) can apply to statements made to the press. See, e.g., Abraham v. Lancaster Cmty. Hosp., 217 Cal. App. 3d 796, 823-24 (1990) (providing copy of complaint to the press is protected by section 47(b)); Shahvar v. Superior Court, 25 Cal. App. 4th 653, 660-61 (1994) (declining to follow Abraham); see also Argentieri, 8 Cal. App. 5th at 784-85 (questioning continued viability of Abraham).
Conclusion
In communications with the press and other third parties concerning a case, stick closely to the allegations of the complaint and the admissible evidence supporting or refuting them. Doing so will reduce the risk of being disciplined, disqualified, or sued.
ENDNOTE
Robert M. Dato is Of Counsel to Buchalter, A Professional Corporation. He is certified by the State Bar Board of Legal Specialization in Appellate Law and his practice focuses on business litigation, post-trial, and appellate matters. He is a member of the OCBA Professionalism & Ethics Committee. The views expressed here are his own. He can be reached at rdato@buchalter.com.