By Hal R. Lieberman and Harvey Prager
Last month we began our exploration of NYRPC 8.4(h), which prohibits a lawyer from “engag[ing] in any other conduct that adversely reflects on the lawyer’s fitness as a lawyer.” We discussed the origins of this vague provision, which we call the “Catch-all Rule,” in the old Canons of Professional Ethics and the Code of Professional Responsibility, and how the ABA dropped the Catch-all Rule from the Model Rules while New York has retained it. We also discussed the contrasting approaches taken by the U.S. Supreme Court in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991) (“Gentile”) and the New York Court of Appeals in In re Holtzman, 78 N.Y.2d 184 (1991) (“Holtzman”) to the Due Process issues raised by vague disciplinary rules such as the Catch-all Rule. In this issue, we examine an important later New York decision applying the Catch-all Rule, and discuss whether it is time for New York to abandon this vague, outdated provision.
I. The Holley Case
The First Department’s decision in In re Holley, 285 A.D.2d 216 (1st Dept. 2001), (lv. denied 97 N.Y.2d 606 (2001)), has echoes of Holtzman and includes an in-depth discussion of the standard applicable to New York’s Catch-all Rule.
a. Background Facts and Initial Disciplinary Proceedings
In response to a journalist’s request, Steven L. Holley, a lawyer at Sullivan & Cromwell LLP, provided the legal affairs editor of BusinessWeek magazine with a copy of the amended complaint in a client’s case without realizing that the pleading had been filed under seal. Holley, 285 A.D.2d at 219 (also noting that a Sullivan & Cromwell associate actually supplied the amended complaint at issue). The First Department’s Departmental Disciplinary Committee (“DDC”) charged Holley with engaging in professional misconduct by improperly disclosing a sealed court document, in violation of several Disciplinary Rules. Holley, 285 A.D.2d at 217. The DDC also alleged that Holley, at an evidentiary hearing before a federal judge, and later at a deposition before the DDC, falsely denied that the journalist had alerted him to the fact that the documents he sent her the previous day had been sealed. Id.
The referee, after conducting a hearing, recommended dismissal of all of the charges. A Hearing Panel heard oral arguments and, by a vote of 4–1, confirmed the referee’s report. The dissenting panel member recommended that charge one, alleging a violation of the Catch-all Rule, be sustained and that Holley, at a minimum, receive a letter of reprimand, a censure, or a brief suspension from the practice of law. Id. The Appellate Division, in turn, disaffirmed the dismissal of charge one and reinstated and sustained that charge. Id. The Court’s order also appointed a different individual to act as referee, conduct a hearing, and file a report concerning the imposition of an appropriate sanction with respect to the Catch-all Rule violation. Following a sanction hearing, the new referee issued a report recommending “a reprimand with a referral to the Court with a recommendation as to censure.” Id. at 218.
Specifically, the referee found that Holley’s character evidence established that he was professionally competent and had a reputation for veracity and credibility. Nonetheless, the referee found that Holley’s failure to at least ask the associate who supplied the copy of the document whether delivering it to the media would create problems was not only negligent, it was reckless. Id.
Subsequently, a Hearing Panel also recommended a sanction of public censure, although it rejected the referee’s characterization of Holley’s conduct as reckless. The Panel noted, by way of mitigation, that Holley had an unblemished career, enjoyed a good reputation for his legal skill and honesty, and had suffered as a result of his conduct in having been the subject of adverse publicity and having been financially sanctioned by his law firm. Additionally, although the Panel determined that Holley acted negligently in failing to ascertain that the amended complaint had been filed under seal, the Panel also expressly found that there were no “warning signs” alerting Holley. Id. at 219, (emphasis added). The Panel further noted that “it was unlikely that [Holley] would engage in misconduct in the future, that he had already suffered significant adverse consequences and that if it were not necessary to alert the Bar to a previously unannounced standard of misconduct, any sanction would be excessively harsh and of no conceivable value.” Id., (emphasis added).
b. The First Department’s Decision in Holley
The First Department, in affirming the sanction, found that whether Holley “acted recklessly or negligently does not matter since, either way, [his] failure to take adequate precautions to safeguard confidential materials of a client, even if considered unintentional, was careless conduct that reflects adversely on his fitness to practice law.” Id. at 220. Finding that “statutory construction does not remove negligent disclosure of a secret from the purview of the Code” id., the First Department also found meritless, in an echo of Holtzman, Holley’s assertion that, based upon the principle of expressio unius est exclusio alterius, the Catch-all Rule cannot be construed to prohibit negligent disclosure on the grounds that DR 4-101(B)(1) specifically prohibited the intentional disclosure of client secrets. Id.; see also DR 4-101(B)(1), (providing in pertinent part, that “a lawyer shall not knowingly … [r]eveal a confidence or secret of a client.”).
With regard to notice, Holley argued that he could not, consistent with the requirements of due process, be sanctioned for violating a standard of conduct that had never before been announced. The First Department disagreed, citing Holtzman for the proposition that “[b]road standards governing professional conduct are permissible and indeed often necessary” and that “the guiding principle must be whether a reasonable attorney, familiar with the Code and its ethical strictures, would have notice of what conduct is proscribed.” Id. Thus, the Court held that
[c]ontrary to [Holley’s] assertion, this Court did not set a new standard of care. Rather, [Holley’s] conduct violated the everyday, ordinary standard of care. Indeed, a reasonable attorney would have been on notice that revealing sensitive information about client matters to reporters could be held to reflect adversely on his or her fitness as a lawyer. The fact that this case is one of first impression does not mean that no discipline should be imposed.
Id., (emphasis added).
Holley raises concerns similar to those in Holtzman. In both cases, there were findings that the respondent lawyers had acted negligently (rather than recklessly or knowingly), that there were no “warning signs” alerting them, and that existing case law provided no precedent for discipline in the situation. Yet in both cases, discipline was imposed anyway.
c. The Trouble with Holley: the Applied Standard or the Underlying Rule?
In Holley, the First Department disagreed that it was setting a new standard, but the Court plainly articulated a low standard. More perplexing, the Court substantially obfuscated the difference between the standard applicable to a finding of misconduct (which misconduct is the subject matter of the ethical rules) and the “everyday, ordinary standard of care” (which standard is generally considered to set the baseline for civil liability—i.e., malpractice). The difference is critical: just as an ethical violation, by itself, does not provide a basis for a malpractice action, a breach by a lawyer of the “everyday, ordinary standard of care,” without more, does not—or, at least, should not, in the absence of a violation of a specific Rule about which the attorney had notice—provide grounds for discipline. Significantly, Professor Simon characterizes the Catch-all Rule as “broad and vague,” and indicates that “fitness as a lawyer” is “about the same as fitness as a parent, sibling, citizen, spouse, or human being generally”—in other words, it creates a meaningless standard. Roy Simon, Simon’s New York Rules of Professional Conduct Annotated (2014 ed.) at 1894.
In short the essential question Holley poses is not whether the First Department applied a new standard or a too low standard. Rather, it is whether the Catch-all Rule can or should be applied to fill an ethical vacuum. The Catch-all Rule, a vestige of the original Canons, sets forth in broad strokes an aspirational ideal of the legal profession, but it may well be out of place as a basis for disciplinary enforcement. Indeed, how much difference is there between the Catch-all Rule’s entreaty to avoid “any other conduct that adversely reflects on the lawyer’s fitness as a lawyer” and former Canon 32’s exhortation (from the original 1908 ABA Canons, which were not designed for prosecution) to “strive at all times to uphold the honor and to maintain the dignity of the profession?”
Finally, it is notable that the “appearance of impropriety” principle, stated generally as a Canon in the 1969 ABA Model Code but purposely omitted as a standard for discipline from the 1983 ABA Model Rules and the current New York Rules, is evidently not greatly missed (although, not without controversy, the principle survives in Rule 100.2 of the New York Rules of Judicial Conduct). Is it time for New York to similarly abandon the Catch-all Rule?
II. Should New York Eliminate the Catch-all Rule?
Deciding whether New York should abandon the Catch-all Rule requires weighing the possible benefits against the obvious risks. It is generally agreed that broad standards are not unconstitutional in the context of lawyer disciplinary proceedings, provided that care is taken to adequately define a threshold to give lawyers some warning of what kind of conduct might give rise to sanctions. As articulated in the Restatement, the breadth of provisions like the Catch-all Rule “creates the risk that a charge using only such language would fail to give fair warning of the nature of the charges to a lawyer respondent … and that subjective and idiosyncratic considerations could influence a hearing panel or reviewing court in resolving a charge based only on it.” Restatement §5, cmt.[c]; see also C. Wolfram, Modern Legal Ethics §3.3.1 (“Unnecessary breadth is to be regretted in professional rules that can be used to deprive a person of his or her means of livelihood through sanctions that are universally regarded as stigmatizing.”)
Decisions that uphold the Catch-all Rule, such as Holtzman and Holley, take comfort from the 1856 statement of Chief Justice Taney in Ex parte Secombe, 60 U.S. (19 How.) 9, 14 (1856), that “it is difficult, if not impossible, to enumerate and define, with legal precision, every offense for which an attorney or counsellor ought to be removed.” Catch-all provisions are thus seen as a means of assuring that the Rules of Professional Conduct are broad enough to cover lawyer misconduct that may have been unanticipated when the more precise portions of the Rules were drafted. Under this view, broad standards governing professional conduct are not only permissible, but often necessary. Yet experiential observations belie the argument that the Catch-all Rule is “necessary” because, when all is said and done, the overwhelming majority of states have not retained the Catch-all Rule, and there are few (if any) indications that those states either “need” the Rule or want it back.
The Massachusetts and New Jersey courts have held that a violation of a general rule is shown only by “conduct flagrantly violative of accepted professional norms.” See, e.g., In re Discipline of Two Attorneys, 421 Mass. 619, 660 N.E.2d 1093, 1099 (1996); In re Hinds, 90 N.J. 604, 449 A.2d 483, 498 (1982). Yet, there may be a misconception that New York courts similarly reserve application of the Catch-all Rule for flagrantly egregious cases. See, e.g., Simon, supra, at 1894 (observing that “[w]hen the courts do find a violation [of the Catch-all Rule], the conduct tends to be egregious, often involving some form of sexual misconduct,” citing In re Baker, 98 A.D.3d 38 (4th Dept. 2012) and In re Greenberg, 94 A.D.3d 152 (1st Dept. 2012). In fact, in our experience, that is not the case. Instead, disciplinary and grievance committees mostly employ the Catch-all Rule in two ways.
First, committees routinely use the Rule as a way to “pile on” in a wide variety of cases. This is easily rationalized, since virtually any violation of a disciplinary rule may reflect adversely on the lawyer’s fitness, but it hardly seems “necessary” to keep the Catch-all Rule solely for the purpose of “piling on.” Rather, it would seem fundamental, as a matter of fairness and economy, that such cumulative charging should be discontinued.
Second, disciplinary agencies resort to the Catch-all Rule in situations like those in Holtzman and Holley—i.e., close cases in which the lawyer’s alleged misconduct does not fit in the exact rubric of a Rule and, in fact, may not otherwise warrant public discipline. In that regard, it should be remembered that the sanction in Holtzman was a private reprimand, which became public (and notorious) only because Holtzman challenged it. Notably, since the First Department decided Holley in 2001, we are not aware of a reported decision where the Court has found only a violation of the Catch-all Rule. Furthermore, the application of the Catch-all Rule in cases imposing private discipline is disturbing. Not merely is it generally unclear that the respondent attorney had sufficient notice with respect to conduct found to violate only the Catch-all Rule, but the imposition of a private sanction provides no notice of a potential violation to other attorneys who may engage in similar conduct in the future.
We began by noting that New York is one of only five states that have retained the Catch-all Rule. In that light, it is reasonable to ask why. If the only purported justifications for maintaining the Rule are that, despite the risks engendered by the Rule’s breadth and vagueness, it is occasionally used to prosecute cases similar to Holtzman and Holley where specific Rules do not apply, or to add a gratuitous charge, or to issue private reprimands in close cases that do nothing to advance disciplinary jurisprudence—or, simply, because it is a too cherished souvenir of a bygone era of lawyer discipline—then it is probably time to finally abandon the Catch-all Rule.
Hal R. Lieberman, formerly Chief Counsel to the Departmental Disciplinary Committee (First Department), is a partner at Emery Celli Brinckerhoff & Abady LLP. He is the co-author of New York Attorney Discipline: Practice and Procedure 2015 (New York Law Journal Books/ALM Media). He also publishes a blog at http://NYLegalEthics.Attorney.
Harvey Prager is an associate* at Emery Celli Brinckerhoff & Abady LLP and a co-author of New York Attorney Discipline: Practice and Procedure 2015 (New York Law Journal Books/ALM Media). [*Mr. Prager is admitted to practice in Massachusetts and the United States District Court, District of Massachusetts only.]
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