Judge Refers Irell to State Bar, Says Ethics Rules ‘Not Aspirational’

A federal judge is asking the California State Bar to review whether Irell & Manella should be subject to discipline for revealing information to prosecutors gleaned from an interview with Broadcom Corp.’s chief financial officer.

U.S. District Judge Cormac Carney asked the state bar to review the law firm in an opinion this week lambasting Irell for its actions and suggesting its conduct compromised the integrity of the legal profession, the Daily Journal reports (sub. req.).

Carney said Irell had conflicts of interest when it represented both Broadcom and CFO William Ruehle. The judge also said the law firm should have obtained Ruehle’s written consent before turning over information from the interview with him.

Ruehle, who is no longer working for Broadcom, is scheduled to be tried later this year on charges of backdating stock options. Carney barred prosecutors from using information from the interview.

"In effect, Irell was interrogating one client to benefit another," Carney wrote in an opinion released this week. The Daily Journal summarized his opinion.

"The Rules of Professional Conduct are not aspirational," Carney said. "The court is at a loss to understand why Irell did not comply with them here. Because Irell's ethical misconduct has compromised the rights of Mr. Ruehle, the integrity of the legal profession and the fair administration of justice, the court must refer Irell to the state bar for discipline."

Irell gave the Daily Journal a statement that said the law firm expects to be exonerated by the state bar. The firm cites testimony by Ruehle that he had directed the lawyers to hand over all factual information to outside auditors. Irell lawyers also testified that they had warned Ruehle that his conversations were not protected by the attorney-client privilege, the statement says.

"Respectfully, we believe that the court's ruling is in error," the statement said. "The disclosures ... were proper and were made pursuant to the instructions of the company and its management."