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Are lawyers ever permitted to use deceptive or covert investigative techniques to gather evidence?

It’s a difficult, even troubling, question. Recently, one court acknowledged that the question “has been festering for some time.” While ethics authorities struggle to reconcile the use of deceptive or covert techniques by lawyers with existing professional conduct rules, courts and disciplinary agencies have been reluctant to impose harsh sanctions for such tactics.

The ABA Model Rules of Professional Conduct, which serve as the basis for most state ethics codes for lawyers, generally address deceptive activities within the ambit of misrepresentation.

Model Rule 4.1 (Truthfulness in Statements to Others), for instance, states that a lawyer shall not, in the course of representing a client, “make a false statement of material fact or law to a third person.”

Rule 4.1 is rarely invoked in the context of deceptive investigations, however, because there is some dispute among authorities whether a lawyer conducting or directing investigations is acting in a representational capacity, and whether false statements made in the course of an investigation are “material” for purposes of the rule.

Running into the Rules

Most problematic are the “anti-deceit” provisions in Model Rule 8.4 (Misconduct). Subsection (c) of the rule defines any behavior “involving dishonesty, fraud, deceit or misrepresentation” as professional misconduct.

Moreover, Rules 8.4 and 5.3 (Responsibilities Regarding Nonlawyer Assistants) may be invoked to impose vicarious liability on a lawyer for the deceptive conduct of investigators and other nonlawyers acting under his or her supervision. (In the context of investigations, courts and ethics authorities use the terms “covert” and “undercover” interchangeably.)

On its face, Rule 8.4(c) appears to prohibit deceptive activities of any sort. Indeed, that was the much-maligned holding by the Oregon Supreme Court in In re Gatti, 8 P.3d 966 (2000).

Gatti involved a lawyer who posed as a doctor and tape-recorded telephone calls to a medical review company to gather evidence of suspected fraud. The Oregon Supreme Court disciplined the lawyer, declining to stray from a literal interpretation of Oregon’s version of Rule 8.4, and refusing to recognize an exception for either private or government lawyers engaged in undercover law enforcement operations.

The resulting uproar by law enforcement officials prompted a change in Oregon’s ethics code to allow lawyers to use deceptive investigative techniques where there is evidence of violations of “civil or criminal law or constitutional rights.” Nevertheless, the drastic outcome in Gatti generated considerable debate about the proper role of deception in investigations conducted or directed by lawyers.

Gatti does not appear to reflect the trend of thinking on this issue. Courts routinely approve the use of covert investigations by government lawyers for law enforcement purposes, citing public policy and the underlying purpose of Rule 8.4, which is intended to curtail only that conduct “which reflects adversely on the lawyer’s fitness to practice law.”

Ethics authorities have begun to catch up with the case law by uniformly adopting exceptions to Rule 8.4(c) for government lawyers using undercover tactics for law enforcement and intelligence-gathering purposes. See D.C. Opinion 323 (2004), Virginia Opinion 1765 (2003), and Utah Opinion 02-05 (2002).

In 2001, the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 01-422, overturning a nearly 30-year blanket ban on secret tape recording (that acknowledged a “possible” exception for law enforcement). The committee posited that the sheer number of exceptions to the ban among the states was “highly troubling.”

The 2001 opinion prohibits a lawyer from making a secret recording without the consent of all parties in any jurisdiction where making such recordings would be illegal or “where it is accompanied by other circumstances that make it unethical.” But the committee expressly left “for another day” the question of whether other lawful investigative techniques involving “misrepresentations of identity and purpose” are ethically permissible.

Giving Testers a Pass

An important question is whether the same analysis employed to permit nonconsensual recording by lawyers can be applied to other investigative activities that employ deception. An affirmative answer would open the door to recognizing exceptions for certain types of targets, such as clients, potential witnesses and opposing counsel; certain classes of investigators, such as prosecutors, defense counsel and government lawyers; and certain types of circumstances, such as those involving criminal utterances.

A number of courts have addressed the issue of covert investigations in a civil context.

The use of “testers” in discrimination cases is the most widely sanctioned use of undercover investigators in civil matters. Typically, a “tester” or undercover investigator poses as an applicant for housing, employment or some other type of service in order to detect and collect evidence of illegal discrimination.

Courts have supported such practices for public policy reasons, and a handful of ethics authorities, including those in Alabama, Arizona and Virginia, also have given a nod to the practice. The Virginia opinion concluded that, while such tactics might be deceitful, they do not violate Rule 8.4 because they are “legal, long-established and widely used for socially desirable ends.”

In limited circumstances, courts have permitted the use of deceptive tactics to investigate other types of unlawful behavior, as well.

In two well-publicized trademark infringement cases–Apple Corps Ltd., MPL v. International Collectors Society, 15 F. Supp. 2d 456 (D. N.J. 1998); and Gidatex v. Campaniello Imports Ltd., 82 F. Supp.2d 119 (S.D.N.Y. 1999)–the courts approved the use of undercover investigators to determine compliance with a civil consent decree and court order.

In each case, the defendant challenged the conduct of plaintiff’s counsel in directing investigators to pose as customers and contact the defendant’s salespeople to acquire evidence of misuse of the plaintiff company’s trademark or copyright.

The investigators did not try to trick or dupe employees, but merely misrepresented their identity and purpose.

Both courts rejected a literal interpretation of Rule 8.4(c), concluding that the use of undercover investigators is a widely accepted and necessary practice in both civil and criminal law enforcement, particularly where evidence is difficult to obtain using other methods.

In another frequently cited case, Midwest Motor Sports Inc. v. Arctic Cat Sales Inc., 347 F.3d 693 (8th Cir. 2003), a snowmobile dealer sued a manufacturer for wrongful termination of its franchise in violation of South Dakota law. The defendant’s counsel hired an investigator to pose as a customer and surreptitiously record conversations to obtain admissions from employees at the former franchise and another that replaced it.

The decisive factor in the 8th Circuit’s ruling affirming sanctions appeared to be the defense counsel’s violations of Rule 4.2 (Communication with Person Represented by Counsel) rather than 8.4(c). The court concluded that the violations of Rule 4.2 alone were sufficient to impose sanctions. Defense counsel flouted the rule by directing the paid investigator to contact high-level managerial employees and attempt to elicit damaging admissions from the dealers’ employees “to secure an advantage at trial.”

In a Mist

So far, few ethics regulators have waded into the thicket of deceptive activities undertaken as part of investigations outside the context of criminal and civil rights enforcement.

Oregon, however, did address the issue in Formal Opinion 173 (2003), where a lawyer representing a client in a workers’ compensation case directed a third party to pose as an employee of the defendant to coax a reluctant witness to come forward.

The committee determined that, under the Oregon misconduct rule revised after Gatti, covert activity designed to search for evidence of legal injury is not protected by exceptions for violations of “civil or criminal law or constitutional rights.”

Even with the courts forging ahead of ethics regulators, the rules governing how far lawyers may go in using deceptive practices, especially in civil cases, still are a work in progress. The issue is currently being examined by the ABA ethics committee, which is considering issuing an opinion on the topic.

In the meantime, lawyers without clear guidance in their jurisdictions might consider leaving their covert tactics for another day when the fog has cleared.

Kathryn A. Thompson is research counsel for the ABA Center for Professional Responsibility.

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