ETH 2019-198
Formal Opinion No. 2019-198
California Ethics Opinion
The State Bar of California Standing Committee On Professional Responsibility and Conduct
2019
ISSUE:
May an attorney who is required to withdraw from representing
a client under rule 1.16(a), because the client’s claim
lacks merit, ethically settle the action before withdrawing
from the representation?
DIGEST:
An attorney who has concluded that a client’s
claim lacks merit and cannot be pursued without violating the
Rules of Professional Conduct or the State Bar Act is
required to withdraw from the representation. Before
withdrawing, the attorney must take reasonable steps to avoid
reasonably foreseeable prejudice to the rights of the client.
Such reasonable steps may include settling the claim if the
attorney can do so consistent with the attorney’s duty
of truthfulness.
AUTHORITIES
INTERPRETED: Rules 1.16, 3.1, 3.4, and 4.1 of the
Rules of Professional Conduct of the State Bar of
California.1
Business
and Professions Code sections 6068(c), 6068(d), 6106, and
6128(a).
STATEMENT
OF FACTS
Attorney
commences a legal action for Client based on alleged false
statements made to Client by the Client’s former
business partner. During the course of protracted discovery
in the case, Attorney learns that the uncontroverted evidence
refutes the Client’s claims. Attorney has therefore
concluded that Client’s case lacks merit and Attorney
must withdraw under rule 1.16(a).2 Attorney advises Client of
his conclusion and that he is ethically obligated to withdraw
from representing her. Attorney requests from Client consent
to dismiss the case or, alternatively, offers to delay his
withdrawal to allow Client time to attempt to retain other
counsel. Client does not consent to outright dismissal of the
case, but instead asks Attorney to attempt to settle the case
before withdrawing because Client is concerned that finding
replacement counsel will be difficult and that dismissing the
case outright may expose her to liability to the defendant.
Notwithstanding Attorney’s ethical prohibition against
proceeding to trial, may Attorney nonetheless attempt to
settle the case with the defendant before
withdrawing?3
DISCUSSION
1.
When is an Attorney Ethically Prohibited from Proceeding
to Trial on a Claim?
An
attorney is ethically prohibited by rule 1.16(a) from
proceeding to trial in certain limited circumstances.
Withdrawal
is mandatory if (1) the lawyer knows or reasonably should
know that the action is being taken without probable cause
and for the purpose of harassing or maliciously injuring any
person; (2) the lawyer knows or reasonably should know that
continued employment will result in a violation of the Rules
of Professional Conduct or the State Bar Act; (3) the
lawyer’s mental or physical state renders it
unreasonably difficult to effectively carry out the
representation; or (4) the lawyer is discharged by the
client. Rule 1.16(a)(1)-(4).
Similar
to the language in rule 1.16(a)(1), rule 3.1 (Meritorious
Claims and Contentions) prohibits a lawyer from bringing or
continuing an action “without probable cause
and for the purpose of harassing or maliciously
injuring any person.” Rule 3.1(a)(1) (emphasis added).
Here, Attorney has concluded that the evidence refutes
Client’s claims, but there is no indication that Client
has pursued the case for the purpose of harassing or
maliciously injuring a person. In fact, Client may still
believe the facts Client presented to Attorney even though
Attorney has concluded that those facts are not true. Under
these circumstances, rule 3.1(a)(1) is not implicated and
withdrawal is not mandated under rule
1.16(a)(1).4
Rule
3.1(a)(2) prohibits an attorney from presenting a claim in
litigation “that is not warranted under existing law,
unless it can be supported by a good faith argument for an
extension, modification, or reversal of the existing
law.” The phrase “warranted under existing
law” is not defined in the rule or the cases applying
the predecessor to rule 3.1, former rule 3-200. Statutes
using the same language apply only to “claims,
defenses, and other legal contentions,” not to
“factual contentions,” which are treated
separately. (See Cal. Civ. Proc. Code § 128.7(b)(2) and
(3); Fed. R. Civ. P. 11(b)(2)-(4).)
Under
the State Bar Act, an attorney has a duty to “counsel
or maintain those actions, proceedings, or defenses only as
appear to him or her legal or just.” (Bus. & Prof.
Code § 6068(c).) Thus, an attorney’s continued
employment in a case that the attorney knows is not
“legal or just” will violate the State Bar Act.
The terms “legal or just” are not defined in the
statute, but subsection (c) has been interpreted as ensuring
that attorneys only bring complaints and maintain arguments
that “are supported by law or facts.”...
