Risk Update

Information Rules & Risk — Opioid Judge’s Concerns on Confidential Client Information Flow, ABA Opinion on Public vs Private Client Confidentiality Rules

Opioid Judge Has Concerns About Motley Rice: ‘I Can’t Understand Why You Don’t See That’” —

  • “A federal judge is weighing whether to disqualify Motley Rice from dozens of opioid lawsuits because the firm obtained confidential information when representing the state of Hawaii, the District of Columbia and the City of Chicago in separate actions.”
  • “At a Feb. 12 hearing, U.S. District Judge Dan Polster, who is overseeing the opioid multidistrict litigation in the Northern District of Ohio, raised several questions to Motley Rice’s Linda Singer about her responsibilities as outside counsel in government lawsuits against the same defendants her firm has sued in the opioid cases—specifically, pharmacy benefit manager OptumRx Inc., owned by United HealthCare.”
  • “Brian Boone, of Alston & Bird in Charlotte, North Carolina, has alleged in a disqualification motion that Motley Rice, in the government cases, used its subpoena powers to obtain confidential documents from his client, OptumRx, and some of them pertain to opioids.”
  • “At the hearing, Singer insisted Motley Rice never shared the confidential documents with other clients and, in any event, Hawaii’s lawsuit, filed last year, did not even reference opioids. ‘I want to be clear,’ she said. ‘It’s our legal position that, again, none of that matters.'”
  • “‘Well, I disagree with that,’ Polster said. ‘I can’t understand why you don’t see that there is a difference between your work for these—your firm’s work for these three entities and your work for all of your other clients, and particularly the four—you know, the four bellwether clients that you’re representing.'”
  • “Though the bellwether clients, as cities and counties, also are public entities, Polster drew a distinction because Motley Rice had subpoena powers in the state cases.”
  • “The debate addresses a thorny but longstanding issue when private plaintiffs’ firms serve as outside counsel to government entities, particularly state attorneys general. At the hearing, liaison counsel Peter Weinberger, of Cleveland’s Spangenberg, Shibley & Liber, referenced ‘a move afoot’ to ‘curtail the rights of state and cities and counties to retain outside counsel who are prepared to represent them on a contingent fee.'”
  • “But OptumRx’s motion says Motley Rice has violated both the American Bar Association’s Rules of Professional Conduct and the Ohio Rule of Professional Conduct 1.11(c), which prohibits a lawyer with confidential government information about a person from representing a private client ‘whose interests are adverse to that person.'”
  • “In opposition, the plaintiffs’ executive committee, which includes Motley Rice’s Joe Rice, insisted the firm had no conflict because the government investigations involved allegations of overbilling for insulin and other prescription drugs, not causing the opioid epidemic. As such, the information wasn’t even material, they wrote.”

ABA Clarifies Rule on Information Obtained During Public Service” —

  • “Attorneys with government jobs can’t represent private clients in cases where confidential information learned about an individual through the attorney’s public work could disadvantage the individual, the American Bar Association said on Wednesday.”
  • “The opinion clarified the scope of ABA Model Rule of Professional Conduct 1.11(c). The prohibition extends to both current and former government workers, including attorneys who hold part-time public jobs, the ABA said.”
  • “This is the case even though 1.11(c) was once aimed at regulating the ‘revolving door’ of lawyers moving from government to private practice, the ABA explained.”
  • “‘We do not perceive any countervailing considerations that would justify exempting current public officers and employees from a disqualification provision designed to prevent that lawyer from misusing confidential government information for a private client,’ the ABA said.”
  • “The rule ‘applies irrespective of whether lawyers served in a representational capacity when they acquired’ the information, the ABA said. It’s scope therefore includes legislators and public executives. The ABA cited a 2019 New York State Bar Association ethics committee ruling that applied the rule to a part-time town supervisor who also worked as a private attorney.”
  • “The ABA also said it interpreted ‘private client’ to include even public ‘entities and officials whom the lawyer represents in private practices, if those clients are not legally entitled to employ the confidential information.'”

See complete text: “Formal Opinion 509 (February 28, 2024).”