A telecommunications company hires a law firm to help it calibrate its bid for an FCC license. To provide full legal advice, the firm learns confidential information about the company’s structure, business model, and strategy. Eventually, the representation ends. Soon, the company is repeatedly outbid for subsequent licenses by a rival telecom company — missing opportunities for financial gain at every turn. The company is outraged to learn that its rival has been getting legal advice from the same law firm. The company fears that the law firm is exploiting the confidential information it learned from previously representing the company. The company suspects that this breach of confidentiality has directly caused it to lose bids and other market opportunities.1×1. Cf. Kilpatrick v. Wiley, Rein & Fielding, 909 P.2d 1283, 1286–89 (Utah Ct. App. 1996).
The law firm has undoubtedly violated Model Rule of Professional Conduct 1.9. Rule 1.9(a) prohibits an attorney “who has formerly represented a client in a matter” from subsequently “represent[ing] another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client.”2×2. Model Rules of Prof’l Conduct r. 1.9(a) (Am. Bar Ass’n 2013). One goal of Rule 1.9, which every state has adopted,3×3. See CPR Policy Implementation Comm., Am. Bar Ass’n, Variations of the ABA Model Rules of Professional Conduct Rule 1.9: Duties to Former Clients (2017), https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/mrpc_1_9.authcheckdam.pdf [https://perma.cc/VBV3-RNG9]. is to protect the former client’s confidential information.
Emboldened by the violation of Rule 1.9, the telecommunications company brings a legal malpractice suit against its former firm, alleging that the firm committed a breach of confidentiality. In effect, the company seeks to use the violation of Rule 1.9 to help prove that the law firm misused its confidences. In the breach-of-confidentiality suit, the company’s alleged damages are the profits it lost from missing out on the subsequent FCC licenses. The elements of the breach-of-confidentiality claim are: (1) the firm had a duty not to misuse the confidential information of its former client, the company; (2) the firm breached that duty by misusing confidences; and (3) the breach caused the company (4) to suffer an injury.4×4. See, e.g., Restatement (Third) of the Law Governing Lawyers § 48 (Am. Law Inst. 2000).
How should the company have to prove the element of breach within the broader claim of breach of confidentiality? On the one hand, breach is an essential element of the company’s claim, so the company should have to present proof that the law firm actually misused the company’s confidential information. On the other hand, proving the breach element might force the company to disclose the very information it wishes its former law firm had kept confidential. It would be a hollow victory if the company could protect its confidences only by divulging them in open court. In addition, proving that the firm actually misused its confidential information is extremely hard — not least because of the attorney-client privilege that now protects the communications between the firm and its new client. Given these competing considerations, how should a court in this malpractice suit allow the former-client company to meet its burden as to the breach element?
This is a multimillion-dollar question. Conflicts of interest are a significant source of legal-malpractice litigation.5×5. Charles W. Wolfram, A Cautionary Tale: Fiduciary Breach as Legal Malpractice, 34 Hofstra L. Rev. 689, 733 (2006). In the past three decades, at least fifteen settlements or verdicts based on a law firm’s conflict of interest exceeded $20 million, and another thirteen were between $3 million and $20 million.6×6. See Douglas R. Richmond, The Law Firm Liability Terrain: Publicly-Reported Settlements and Verdicts (2014), https://www.americanbar.org/content/dam/aba/administrative/tips/webinars/LawFirmLiabilityTerrainRichmond.authcheckdam.pdf [https://perma.cc/TQ64-FN7V]. These figures include only publicly reported settlements,7×7. Id. and they leave out the law firm’s (often astronomical) defense costs, bruised reputation, and lost time and energy spent reaching a settlement. At a time when “[l]aw firms die with extreme ease and astonishing speed,”8×8. John Morley, Why Law Firms Collapse, The Practice, Mar. 2017, at 1, 1. few firms can afford to take this kind of hit.
Liability for conflict-of-interest malpractice hits the profession from top to bottom. In the past decade, titans such as Cravath, Simpson Thacher, and Covington & Burling have faced suits from former clients over conflicts of interest.9×9. Airgas, Inc. v. Cravath, Swaine & Moore LLP, No. 10-612, 2010 WL 3046586 (E.D. Pa. Aug. 3, 2010); PrediWave Corp. v. Simpson Thacher & Bartlett LLP, 102 Cal. Rptr. 3d 245, 253 (Ct. App. 2009); Scott Flaherty, Covington Pays to End 3M Conflicts Row, Am. Law. (Mar. 3, 2017), http://www.americanlawyer.com/id=1202780533080/Covington-Pays-to-End-3M-Conflicts-Row [https://perma.cc/63Q5-DW4Y]. More often, the lawyers facing conflict-of-interest suits are solo practitioners whose clients can barely afford legal services.10×10. E.g., Bevan v. Fix, 42 P.3d 1013 (Wyo. 2002); see also David B. Wilkins, Who Should Regulate Lawyers?, 105 Harv. L. Rev. 799, 832 n.134 (1992). As a result, uncertainty about conflict-of-interest liability isn’t just a problem for the health of the legal services industry; it’s an access-to-justice problem, too.11×11. See generally Deborah L. Rhode, Access to Justice, 69 Fordham L. Rev. 1785 (2001).
But when it comes to how a former client must prove breach of confidentiality, the case law is as unsettled as it is sparse.12×12. Wolfram, supra note 5, at 733. What few decisions do exist fall into three camps. First, if the former client can show that the matter for which it hired the firm is “substantially related” to the subsequent matter in which the firm allegedly misused confidential information, then some courts conclusively presume that the firm breached its duty.13×13. See, e.g., Damron v. Herzog, 67 F.3d 211, 215 (9th Cir. 1995). Second, other courts use the same “substantial relationship” standard, but allow it to give rise to only a permissive inference of a breach.14×14. See, e.g., Chrysler Corp. v. Carey, 5 F. Supp. 2d 1023, 1033–34 (E.D. Mo. 1998). This means that once a former client shows that two matters are substantially related, neither party will prevail at summary judgment. A jury may infer (or not) from circumstantial evidence that confidences were misused. Third, some courts have held the former client’s feet to the fire, requiring direct proof that the firm had access to, and misused, former client confidences.15×15. See, e.g., Brown v. Green, 302 S.W.3d 1, 9 (Tex. App. 2009).
This Note defends the third approach: former clients suing for damages arising out of a breach of confidentiality must present direct proof of actual misuse of confidential information. Part I explains Rule 1.9’s “substantial relationship” standard and summarizes the three contexts (disciplinary proceedings, disqualification motions, and civil suits) in which Rule 1.9 is used. Part II reviews the three ways courts require former-client plaintiffs to prove breach of confidentiality in civil suits. Part III argues that the third way — direct proof of actual misuse of confidential information — is best. Rule 1.9’s overinclusive, prophylactic “substantial relationship” standard makes it a poor fit for civil suits. Part IV refutes the two reasons courts have given for relaxing a former-client plaintiff’s burden as to the breach element.
I. How the Law Regulates Lawyers’ Duties to Former Clients
Rule 1.9 governs a lawyer’s duties to former clients. Without the former client’s consent, “a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client.”16×16. Model Rules of Prof’l Conduct r. 1.9(a) (Am. Bar Ass’n 2013); see also T.C. Theatre Corp. v. Warner Bros. Pictures, 113 F. Supp. 265, 268 (S.D.N.Y. 1953).
What constitutes a “substantial relationship” between two matters? Two matters are substantially related when there is a “substantial risk” that the former client’s confidential information would advance the new client’s position.17×17. Model Rules of Prof’l Conduct r. 1.9 cmt. 3; accord Restatement (Third) of the Law Governing Lawyers § 132 (Am. Law Inst. 2000). And how is a court to decide that it faces a “substantial risk” that the attorney could abuse its former client’s confidential information? As a leading treatise puts it, a court must examine “the similarity of the facts, the circumstances and the legal issues of the previous representation.”18×18. Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 18:13, at 1022 (2013).
In practice, the “substantial relationship” standard casts a wide net. For instance, if an attorney first represents a businessman in private financial matters, she may not subsequently represent the businessman’s wife in a divorce.19×19. Model Rules of Prof’l Conduct r. 1.9 cmt. 3. Moreover, a substantial relationship may be based not only on the substance of the client’s original case, but also on the procedures a client employs in litigation. An attorney who defends a carmaker in a products liability suit based on faulty brakes may not subsequently sue the carmaker for products liability based on a defect in the same brake system. The danger is that the attorney could misuse confidential information about the substance of the claim about the brakes. But the same attorney is also barred from suing the carmaker in any other products liability case, even if the defect is entirely different. The reason is that the attorney now knows the carmaker’s defense strategy “regarding such things as damages, expert witnesses, class certification, [and] motion practice.”20×20. Chrysler Corp. v. Carey, 5 F. Supp. 2d 1023, 1033 (E.D. Mo. 1998). In short, the attorney could misuse confidential information about the procedure the carmaker uses to defend itself.
Rule 1.9 accounts for the interests not only of former clients, but also of the judicial system.
1. Protecting Former Clients. — Rule 1.9 protects former clients’ confidences. In this way, it furthers the broader duty of confidentiality enshrined in Model Rule 1.6: “A lawyer shall not reveal information relating to the representation of a client . . . .”21×21. Model Rules of Prof’l Conduct r. 1.6(a); see also Restatement (Third) of the Law Governing Lawyers § 33 cmt. c. This duty is the “bedrock principle of the Anglo-American legal system.”22×22. Elkind v. Bennett, 958 So. 2d 1088, 1091 (Fla. Dist. Ct. App. 2007) (quoting Bevan v. Fix, 42 P.3d 1013, 1028 (Wyo. 2002)).
In the realm of evidence, the duty of confidentiality defines the attorney-client privilege.23×23. See, e.g., Fed. R. Evid. 502(g)(1). The privilege “promote[s] freedom of consultation” between client and attorney.24×24. 8 John Henry Wigmore, Evidence in Trials at Common Law § 2291, at 545 (John T. McNaughton ed., rev. ed. 1961). Clients need the expert assistance of lawyers to navigate our complex legal system; lawyers need “the fullest possible knowledge of the facts” to render aid; and clients will not provide all the facts unless they can be sure that no one can compel their lawyers to disclose those facts in court.25×25. McCormick on Evidence § 87, at 528 (Kenneth S. Broun ed., 7th ed. 2013); see also Charles W. Wolfram, Former-Client Conflicts, 10 Geo. J. Legal Ethics 677, 691 (1997).
Of course, justifications for the duty of confidentiality run deeper than matters of admissibility in subsequent litigation. Former clients must be sure that lawyers will never use their confidences against them — whether in or out of court.26×26. See Damron v. Herzog, 67 F.3d 211, 215 (9th Cir. 1995); T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265, 269 (S.D.N.Y. 1953); Developments in the Law — Conflicts of Interest in the Legal Profession, 94 Harv. L. Rev. 1244, 1316 (1981). As one court put it, “[c]lients must feel free to share confidences with their lawyers. This will not occur if we permit lawyers to be today’s confidants and tomorrow’s adversaries.”27×27. Penn Mut. Life Ins. v. Cleveland Mall Assocs., 841 F. Supp. 815, 818 (E.D. Tenn. 1993).
To ensure a free flow of information from client to attorney, Rule 1.9 is broad. It can be violated so long as there is a “substantial relationship” between the two matters — even if the lawyer never actually exploits his former client’s confidential information. Thus, Rule 1.9 protects former clients not only from the damage of a misused confidence but also from the worry that confidences might be misused.28×28. Developments in the Law, supra note 26, at 1316. The alternative is to ask the former client to depend on the lawyer’s judgment “to decide what is confidential and what is not.”29×29. T.C. Theatre Corp., 113 F. Supp. at 269; see also Am. Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton, 117 Cal. Rptr. 2d 685, 701 (Ct. App. 2002). No former client should ever be in that position. In a dispute between American Airlines and its former law firm, the court put the airline’s predicament in vivid language: the law firm “placed the noose around American’s neck, without its consent, promising all the while not to kick over the chair on which it stood, blithely ignoring the sweat forming on the corporate brow.”30×30. Am. Airlines, 117 Cal. Rptr. 2d at 704; see also id. at 702.
2. Protecting Public Faith in the Legal System. — Rule 1.9 protects the legal system by prohibiting even the appearance of impropriety.31×31. E.g., id. at 702; Cont’l Res., Inc. v. Schmalenberger, 2003 ND 26, ¶ 22, 656 N.W.2d 730, 738. By casting such a large net, Rule 1.9 preserves “public confidence in the legal profession”32×32. Schmalenberger, 2003 ND 26, ¶ 22, 656 N.W.2d at 738 (quoting Heringer v. Haskell, 536 N.W.2d 362, 367 (N.D. 1995)); Mallen & Smith, supra note 18, § 18:2, at 947; Wolfram, supra note 25, at 691. and prevents public trust in the “integrity of the adversarial process” from eroding.33×33. MMR/Wallace Power & Indus., Inc. v. Thames Assocs., 764 F. Supp. 712, 718 (D. Conn. 1991). Thus, Rule 1.9 is deliberately broad; it prohibits some representations that are harmless to the client in order to bar all harmful ones. After all, “the appearance of ‘evil’ can be as harmful to the public’s perception of the profession as wrongdoing itself.”34×34. Mallen & Smith, supra note 18, § 18:7, at 973.
When an attorney represents a new client whose interests conflict with those of a former client in a substantially related matter, Rule 1.9 provides the basis for three kinds of action adverse to the conflicted attorney: professional discipline, disqualification, and civil damages.35×35. See Restatement (Third) of the Law Governing Lawyers § 132 cmt. a (Am. Law Inst. 2000). See generally Developments in the Law, supra note 26, at 1470–503. This section explains how each sanction relates to Rule 1.9 enforcement.
1. Disciplinary Proceedings. — Each state’s high court runs a system of attorney discipline to punish and deter misbehavior among members of the state bar.36×36. Wilkins, supra note 10, at 805–06. A debate rages as to whether disciplinary proceedings are an effective way to enforce the legal profession’s ethical obligations.37×37. See In re Am. Airlines, Inc., 972 F.2d 605, 611 (5th Cir. 1992); Wilkins, supra note 10, at 812; Developments in the Law, supra note 26, at 1499. Still, attorneys who violate Rule 1.9 continue to face disciplinary sanctions. Importantly, the disciplinary body asks only whether the rule has been violated — that is, whether the attorney represented two different clients on matters that are substantially related — not whether the attorney actually misused a former client’s confidences.38×38. See, e.g., Boggs v. Ky. Bar Ass’n, 349 S.W.3d 302, 305 (Ky. 2011); In re Hostetter, 238 P.3d 13, 15 (Or. 2010) (per curiam).
2. Disqualification. — When an attorney has violated Rule 1.9, the court may disqualify the attorney from the subsequent matter. Disqualification puts the court in charge of enforcing the ethics rules.39×39. Wilkins, supra note 10, at 807–08; see also Am. Airlines, 972 F.2d at 611; NCNB Tex. Nat’l Bank v. Coker, 765 S.W.2d 398, 400 (Tex. 1989). In theory, the possibility of disqualification based on a broad, prophylactic ethics rule deters bad behavior and preserves the integrity of the judicial process.40×40. Developments in the Law, supra note 26, at 1473–74. See generally Keith Swisher, The Practice and Theory of Lawyer Disqualification, 27 Geo. J. Legal Ethics 71 (2014).
As in disciplinary proceedings, once the “substantial relationship” standard is met, the consequences for the conflicted attorney are stark. A court will presume that the attorney learned confidential information from the former client that the attorney could exploit to the former client’s detriment, and it will disqualify the attorney.41×41. E.g., T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265, 268–69 (S.D.N.Y. 1953); Cont’l Res., Inc. v. Schmalenberger, 2003 ND 26, ¶¶ 15–16, 656 N.W.2d 730, 736; Carlson v. Langdon, 751 P.2d 344, 349 (Wyo. 1988). In most jurisdictions, the presumption is conclusive.42×42. See, e.g., Smith v. Whatcott, 757 F.2d 1098, 1100 (10th Cir. 1985). But see State ex rel. Swanson v. 3M Co., 845 N.W.2d 808, 816 n.4 (Minn. 2014) (rebuttable presumption). In this way, the broad, prophylactic rule complements (and deliberately overprotects) the attorney-client privilege.43×43. Wolfram, supra note 25, at 690.
3. Private Civil Suits by Former Clients. — Aside from professional discipline and disqualification, former clients may sue for damages.44×44. See, e.g., Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277, 1286 (Pa. 1992). Unlike disciplinary proceedings or disqualification, the goal is to compensate the injured client.45×45. Wilkins, supra note 10, at 806–07. Courts characterize a suit arising out of an attorney’s conflict of interest many different ways: a breach of the duties of loyalty or confidentiality, a breach of fiduciary duty, or a breach of the standard of care. In general, if a conflict of interest encompasses both a breach of the standard of care and a breach of fiduciary duty, then the sole claim is for breach of due care.46×46. E.g., Klemme v. Best, 941 S.W.2d 493, 496 (Mo. 1997). The legal standard is “essentially the same” either way.47×47. Bevan v. Fix, 42 P.3d 1013, 1030 (Wyo. 2002); Deborah A. DeMott, Causation in the Fiduciary Realm, 91 B.U. L. Rev. 851, 863 (2011). A breach of confidentiality is a violation of an attorney’s duty of care48×48. Bevan, 42 P.3d at 1030; Geoffrey C. Hazard, Jr., W. William Hodes & Peter R. Jarvis, The Law of Lawyering § 5.03.2, at 5-17 (4th ed. 2017); see also DeMott, supra note 47, at 852; Wolfram, supra note 5, at 692, 699, 715–17. and requires proof as to every element: duty, breach, causation, and injury.49×49. Restatement (Third) of the Law Governing Lawyers § 48, § 53 cmt. a (Am. Law Inst. 2000); Mallen & Smith, supra note 18, § 8:1, at 918; see also Coco v. AN Clark (Eng’rs) Ltd.,  F.S.R. 415 (Ch) at 419 (Eng.) (same requirements in England).
Many civil suits based on Rule 1.9 grow out of disqualification cases. For instance, Covington & Burling recently represented the Minnesota Attorney General in an environmental suit against a paper company that was also a former client of the firm.50×50. State ex rel. Swanson v. 3M Co., 845 N.W.2d 808 (Minn. 2014). The company’s motion to disqualify Covington was time-barred, but the trial court did not mince its words as to whether Covington had violated Rule 1.9: “Covington obtained much more than litigation strategy or corporate policies. Through its prior representation of [the company], Covington received specific facts that are not only relevant to the [current] case but which go to the core legal issues in the case.”51×51. State ex rel. Swanson v. 3M, No. 27-CV-10-28862, at 30–31 (Minn. Dist. Ct. Feb. 5, 2016) (order and memorandum regarding 3M’s disqualification motion), http://www.abajournal.com/files/State_v._3M_-_Order_Denying_Motion_for_DQ.PDF [https://perma.cc/86TL-T5K4].
Pointing to this violation of Rule 1.9, the paper company sued Covington for breach of confidentiality.52×52. Sue Reisinger, 3M Doubles Down in Fight with Covington & Burling, Corp. Couns. (Oct. 17, 2016), http://www.corpcounsel.com/id=1202770124027/3M-Doubles-Down-in-Fight-With-Covington-amp-Burling [https://perma.cc/9BZW-894A]. The case settled in March of this year.53×53. Flaherty, supra note 9. But what if it had reached summary judgment — or even gone to trial? How would the company have met its burden of proof as to the breach element of Covington’s alleged breach of confidentiality? As the next Part explains, the Minnesota court would have had to choose from one of three standards.
II. The Three-Way Split on Proving Breach of Confidentiality
This Part explains the three ways courts have allowed former-client plaintiffs to carry their burden as to the breach element of a breach-of-confidentiality suit. Some courts have held that a “substantial relationship” between the prior and subsequent matters gives rise to a conclusive presumption of breach. Other courts have held that a substantial relationship between the two matters permits the jury to infer breach. A third group of courts have held that a former client must present direct proof that the attorney actually misused the former client’s confidential information in the subsequent matter. This Part explains these different rules and why courts have endorsed each of them.
If the attorney’s matter with the former client is substantially related to the subsequent matter adverse to the former client, then some courts presume that the attorney has breached his duty of confidentiality.54×54. See Damron v. Herzog, 67 F.3d 211, 214 (9th Cir. 1995); see also Chrysler Corp. v. Carey, 5 F. Supp. 2d 1023, 1033 (E.D. Mo. 1998) (former client arguing that “breach of duty should be presumed if the Court finds that the [two matters] are ‘substantially related’ within the meaning of Rule 1.9”); Brown v. Green, 302 S.W.3d 1, 9 (Tex. App. 2009) (former client arguing for the same standard). As one court put it, “some courts choose to apply the same presumptions and substantial relationship tests to analyze negligence claims under Rule 1.9 that they apply to disciplinary and disqualification cases.”55×55. Bevan v. Fix, 42 P.3d 1013, 1030 (Wyo. 2002).
What justifies the conclusive presumption? Because “[t]here are few of the business relations of life involving a higher trust and confidence than that of attorney and client,”56×56. Stockton v. Ford, 52 U.S. (11 How.) 232, 247 (1851). special rules should apply. “The actual use or misuse of confidential information is not determinative; it is the possibility of the breach of confidence which controls.”57×57. David Welch Co. v. Erskine & Tulley, 250 Cal. Rptr. 339, 342 (Ct. App. 1988). In other words, the serious risk of breach, coupled with the importance of the attorney’s duty of confidentiality, justifies the presumption.
Courts applying the presumption assume that an attorney cannot mentally compartmentalize his former client’s confidential information.58×58. Carey, 5 F. Supp. 2d at 1033 (noting former client’s argument that the attorneys “could not possibly have ‘compartmentalized’” confidential information from the prior representation and “must have brought to bear the knowledge of the company” that they had previously gained). At best, an attorney will be “tempted” to “improperly monopolize the confidences and secrets of his former client.”59×59. Goldstein v. Lees, 120 Cal. Rptr. 253, 256 (Ct. App. 1975). More likely, the attorney’s advice to her new client will “necessarily involve decisions based on confidential information” from the former client.60×60. Damron v. Herzog, 67 F.3d 211, 215 (9th Cir. 1995); cf. Estate of Re v. Kornstein Veisz & Wexler, 958 F. Supp. 907, 929 (S.D.N.Y. 1997) (Sotomayor, J.) (relaxing a former-client plaintiff’s burden as to causation because attorneys may “inadvertently relent” to the “subtle financial pressures” of a potential conflict of interest).
Courts taking the self-described “middle road” employ not a conclusive presumption of breach, but a permissive inference that confidences were misused.61×61. Bevan v. Fix, 42 P.3d 1013, 1031 (Wyo. 2002). In other words, the former client need not present direct evidence of breach.62×62. Carey, 5 F. Supp. 2d at 1033; see also Milbank, Tweed, Hadley & McCloy v. Boon, 13 F.3d 537, 544 (2d Cir. 1994); Bevan, 42 P.3d at 1031–32. Once a former client has presented circumstantial evidence of a breach, summary judgment is off the table; a jury gets to infer (or not) that the attorney misused the former client’s confidential information.
What kind of circumstantial evidence gives rise to a permissive inference? As one court put it, the jury should consider “the evidence of a relationship” between the two matters.63×63. Carey, 5 F. Supp. 2d at 1033. Another explained that “a showing of a ‘substantial relationship’” may, “if supported by the evidence, allow a reasonable juror to draw the inference that the client’s confidences have been used against her in contravention of the attorney’s continuing duties of confidentiality and loyalty.”64×64. Bevan, 42 P.3d at 1031–32. Based on the nature of the two representations, a jury could infer that an attorney “could become privy” in the first representation “to facts sufficiently common to those involved” in the second representation.65×65. Id. at 1032. In other words, the same “substantial relationship” standard that gave rise to the conclusive presumption of breach in the disqualification context gives rise to a permissive inference of breach in these civil cases.
To see how this approach works, consider Chrysler Corp. v. Carey,66×66. 5 F. Supp. 2d 1023 (1998). a 1998 case in Missouri federal court. Chrysler retained a law firm to defend it against near-constant products liability class actions. Two associates at the firm eventually left to start a small plaintiffs’ firm. Soon enough, the new firm represented a class of injured drivers against Chrysler. The suit alleged products liability but was based on a different defect than any that the now-former associates had worked on at their old firm.67×67. Id. at 1025.
Chrysler sued the plaintiffs’ firm based on Missouri’s version of Rule 1.9. Chrysler alleged that the former associates breached their duty of confidentiality, causing the carmaker to incur extra legal costs and leading to an especially unfavorable settlement. The former associates denied using any of Chrysler’s confidential information, and Chrysler could not point to any instance in which they did.68×68. Id. at 1033 (“Chrysler can point to no particular item of confidential information used . . . .”). Even so, the court denied summary judgment for the former attorneys as to the breach element. “Instead,” the court held, “the evidence of a relationship, or lack thereof, between the cases are facts that the jury may consider in determining whether it should draw an inference that confidential information was used.”69×69. Id. at 1033–34. In other words, the substantial relationship between the matters gave rise to a permissive inference of a breach.
A third group of courts have rejected both the “conclusive presumption” and “permissive inference” approaches. For these courts, a mere threat of disclosure is not enough to raise a presumption of breach.70×70. E.g., Brown v. Green, 302 S.W.3d 1, 9 (Tex. App. 2009); Reppert v. Hooks, No. 07-97-0302-CV, 1998 WL 548784, at *10 (Tex. App. Aug. 28, 1998); see also Garrett v. Bryan Cave LLP, 211 F.3d 1278 (10th Cir. 2000). Instead, a former-client plaintiff must provide direct proof that the attorney actually misused his confidential information in the subsequent matter.71×71. E.g., Elkind v. Bennett, 958 So. 2d 1088, 1092 (Fla. Dist. Ct. App. 2007); Wilbourn v. Stennett, Wilkinson & Ward, 687 So. 2d 1205, 1217 (Miss. 1996); Brown, 302 S.W.3d at 9. Nor is the “permissive inference” approach acceptable; one court explained that a “substantial relationship” between two matters “is neither sufficient nor necessary to raise a fact issue as to breach.”72×72. Brown, 302 S.W.3d at 9; see also City of Garland v. Booth, 895 S.W.2d 766, 773 (Tex. App. 1995). A leading treatise has endorsed this approach, instructing that “the past client must show more than the potential for misconduct”73×73. Mallen & Smith, supra note 18, § 18:28, at 1136. because “[a]n actual disclosure or misuse must occur.”74×74. Id. § 15:6, at 663.
Former-client plaintiffs usually lose under this standard. In an example from Texas, a client relied on his longtime attorney for a variety of personal and business matters.75×75. Brown, 302 S.W.3d at 3. Over time, the attorney learned confidential information about the client’s limited partnership, family trust, and personal charity. But when the client and his wife split up, the attorney represented the wife in the divorce and related litigation around the family trust and charity. The litigation ended in a settlement, the terms of which the client believed would have been better had his former attorney not known certain confidential information about his financial setup.
The client sued his former attorney for breach of confidentiality, arguing that “[i]n order to show a breach . . . there must be evidence of a ‘substantial relationship’ between the prior representation and the current case.”76×76. Id. at 9 (alterations in original); cf. Wilbourn v. Stennett, Wilkinson & Ward, 687 So. 2d 1205, 1217 (Miss. 1996) (rejecting former client’s request that the court presume the attorney misused confidential information in a subsequent, substantially related matter). What is more, the client listed the specific confidential information he believed the attorney misused — for instance, that many of his assets were actually in his wife’s name.77×77. Brown, 302 S.W.3d at 11. Under the “permissive inference” approach, that would have been enough to raise an issue of fact for the jury. But the client could produce no smoking gun, so the attorney prevailed at summary judgment.78×78. Id.; see also Wilbourn, 687 So. 2d at 1214 (holding that “[s]imply pursuing” a subsequent matter adverse to a former client did not mean that the attorney “held confidential information, breached or misused that information, or caused [the former client’s] alleged damages”).
III. Rule 1.9 Cannot Be the Basis for Lifting a Former Client’s Burden
Rule 1.9 is a poor fit for civil liability for breach of confidentiality because it encompasses much more than tortious conduct amounting to such a breach. And negligence per se does not provide former-client plaintiffs with a shortcut to proving misuse of confidences.
Courts should not let Rule 1.9 guide civil liability because the rule is overinclusive as applied to civil defendants. The “substantial relationship” standard is met every time an attorney has misused a former client’s confidential information. But it is also met in situations where no misuse has occurred. In those situations, applying the “substantial relationship” standard means that attorneys will face liability for a breach of confidentiality that never happened. One way to ensure that these innocent lawyers are not held liable is by requiring direct proof that an attorney misused confidences.
Unsurprisingly, the “substantial relationship” standard on which Rule 1.9 is based was invented in a disqualification case, not a civil suit.79×79. T.C. Theatre Corp. v. Warner Bros. Pictures, 113 F. Supp. 265 (S.D.N.Y. 1953). In disqualification proceedings, one of Rule 1.9’s purposes — avoiding the “appearance of impropriety” — acts as a “rule of construction to resolve doubts against the attorney.”80×80. Mallen & Smith, supra note 18, § 18:7, at 978; see also Developments in the Law, supra note 26, at 1319. It does so even though the attorney could be completely innocent of any breach of confidentiality.81×81. See Developments in the Law, supra note 26, at 1474 (“Courts frequently point out that the decision to disqualify an attorney does not require a finding of improper, or even morally blameworthy, conduct.”). A former client seeking disqualification need not show that confidentiality has been breached; instead, the client must simply show a “tempting situation.”82×82. Id. at 1318 (emphasis omitted). The fact that a situation “looks bad” may be enough in disqualification or disciplinary proceedings, but it is a poor fit for tort liability.83×83. See, e.g., Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C., 813 S.W.2d 400, 410 (Tenn. 1991). Rule 1.9 was created to preclude a number of bad outcomes, and only some of those bad outcomes involve harms to individual plaintiffs that constitute tortious breaches of duty. The rule precludes attorney behavior that might harm public confidence in the legal system, even if that behavior has not been proven harmful to the client. No wonder, then, that the preamble to the Model Rules flatly declares that the “[v]iolation of a Rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached.”84×84. Model Rules of Prof’l Conduct pmbl., para. 20 (Am. Bar Ass’n 2013); see also Ann Peters, Note, The Model Rules as a Guide for Legal Malpractice, 6 Geo. J. Legal Ethics 609, 609 (1993) (noting “the reticence of the legal profession to adopt the Model Rules as the basis for civil liability”).
Indeed, not all courts are satisfied with a mere “looks bad” standard, even in disqualification proceedings. At least one state high court has rejected the conclusive presumption based on a “substantial relationship.”85×85. See Ark. Valley State Bank v. Phillips, 2007 OK 78, 171 P.3d 899. The court held that, to disqualify an attorney, “the trial court must hold an evidentiary hearing and must include in its disqualification order a specific factual finding that the attorney had knowledge of material and confidential information.”86×86. Id. ¶ 23, 171 P.3d at 911. Other jurisdictions will not disqualify an attorney, even in the face of a Rule 1.9 violation, if his conduct does not threaten to “taint the trial.”87×87. E.g., Bd. of Educ. v. Nyquist, 590 F.2d 1241, 1247 (2d Cir. 1979); see John Wiley & Sons, Inc. v. Book Dog Books, LLC, 126 F. Supp. 3d 413, 419 (S.D.N.Y. 2015). These holdings controvert the idea that an attorney cannot “compartmentalize” the former-client confidences he once learned and must therefore be presumed to have breached confidentiality.88×88. Chrysler Corp. v. Carey, 5 F. Supp. 2d 1023, 1033 (E.D. Mo. 1998). If there is no risk of taint, and therefore no disqualification, then there is little chance that confidences could be misused anyway — regardless of an attorney’s ability to compartmentalize.
The problems with using the “substantial relationship” standard in tort do not end there. The standard is a cousin of “th’ol’ totality-of-the-circumstances test.”89×89. ABC, Inc. v. Aereo, Inc., 134 S. Ct. 2498, 2517 (2014) (Scalia, J., dissenting). The court’s job is to “analyze the extent to which the factual and legal issues in the two representations overlap and examine any other relevant circumstances.”90×90. State ex rel. Swanson v. 3M Co., 845 N.W.2d 808, 816 (Minn. 2014); see also, e.g., State ex rel. McClanahan v. Hamilton, 430 S.E.2d 569, 572–73 (W. Va. 1993). No wonder that commentators have called the standard “a notoriously slippery concept,”91×91. Hazard, Hodes & Jarvis, supra note 48, § 14.07, at 14-16. See generally Wolfram, supra note 25 (entire article trying to clarify the standard). concluding that it is “much easier to recite than to describe accurately or to apply confidently.”92×92. Wolfram, supra note 25, at 680. These critiques are analogous to criticisms of the relaxed “substantial factor” causation standard in other areas of legal malpractice.93×93. See George S. Mahaffey, Jr., Cause-in-Fact and the Plaintiff’s Burden of Proof with Regard to Causation and Damages in Transactional Legal Malpractice Matters: The Necessity of Demonstrating the Better Deal, 37 Suffolk U. L. Rev. 393, 430 (2004) (“[R]ather than helping to clarify the element of causation in legal malpractice cases, the use of the ‘substantial factor’ test will serve only to engender more speculation in malpractice matters.”). Of course, tort law asks juries to apply slippery standards all the time. Negligence law’s reasonable person94×94. Vaughan v. Menlove (1837) 132 Eng. Rep. 490; 3 Bing. (N.C.) 468 (generally considered the first articulation of the reasonable person standard). and nuisance law’s “substantial and unreasonable interference” test95×95. Morgan Cty. Concrete Co. v. Tanner, 374 So. 2d 1344, 1347 (Ala. 1979). are prime examples. Arguments that those standards are too vague96×96. See, e.g., Benjamin C. Zipursky, Reasonableness in and out of Negligence Law, 163 U. Pa. L. Rev. 2131, 2132 (2015) (recounting the legal realist critique that “reasonableness” is “simply a shell through which actors exercise the widest sort of discretion to select their favored outcomes or policies”). apply with equal force to Rule 1.9’s “substantial relationship” standard.
Furthermore, the permissive-inference approach creates too light a burden as to the breach element for a plaintiff opposing a motion for summary judgment. Once a former client can show that the two matters are substantially related, the attorney’s Rule 1.9 duty becomes a basis for liability. And by the same showing, the former client is entitled to a permissive inference of breach — which must be decided by a jury. This process needlessly wastes judicial resources.
Similarly, using the “substantial relationship” standard to prove breach allows the former client to jump through multiple hoops at once. First, a substantial relationship between two matters means that the case falls within the scope of Rule 1.9. Second, the same substantial relationship also satisfies (or at least relaxes to a permissive inference) the former client’s burden as to the breach element. Courts should not offer former-client plaintiffs this kind of two-for-one deal.
Of course, a legal rule can be used to impose civil liability even if it is best suited to a different purpose. For instance, under the doctrine of negligence per se, a victim can use the fact that a defendant violated a statute as evidence that the defendant breached his duty of care.97×97. Martin v. Herzog, 126 N.E. 814, 815 (N.Y. 1920). To benefit from this rule, the victim must meet two requirements: (1) the victim must be among those whom the statute was designed to protect; and (2) the victim must have suffered a harm of the sort the statute was designed to prevent.98×98. Restatement (Third) of Torts § 14 (Am. Law Inst. 2010). The rationale for the rule is that we are all entitled to rely on others to follow the law — even legal rules, like Rule 1.9, that were not written for tort liability.
At first glance, a former-client plaintiff’s suit against her former attorney to recover for misused confidences seems to be a good candidate for applying negligence per se to Rule 1.9. Presume that Rule 1.9, though enacted by a state high court rather than a legislature, operates like a statute. At that point, both requirements of negligence per se seem to be met: (1) as a former client, the plaintiff is within the class of victims that Rule 1.9 is meant to protect; and (2) Rule 1.9 guards against the type of harm — misuse of confidential information — the former client claims to have suffered.
On closer inspection, however, the applicability of negligence per se to this kind of malpractice suit breaks down. The second requirement of negligence per se is that the statute (in this case, Rule 1.9) guards against the type of harm that the plaintiff suffered (in this case, misuse of confidences). Rule 1.9 plainly does guard against this harm, but the question in these suits — the subject of the three-way split described above — is whether confidences were misused. In other words, the question is whether the harm even occurred.
This differentiates a breach-of-confidentiality suit based on a violation of Rule 1.9 from the typical case of negligence per se. Consider the typical case: A statute sets the speed limit on a road at 55 miles per hour. A driver is driving 90 miles per hour and can’t slow down fast enough to avoid rear-ending the victim’s car. In the victim’s suit against the driver, the elements of duty, causation, and injury are readily apparent. The driver had a duty to others on the road to take reasonable care; the driver’s high rate of speed was both a but-for and a proximate cause of the rear-ending; and the victim’s car was damaged when it was rear-ended. When it comes to proving the breach element, the victim can rely on negligence per se: the speed limit is designed to protect other drivers on the road from the type of harm (rear-ending) that the victim actually suffered. Thus, the driver’s conduct — driving over 55 miles per hour — violates a statute that also delineates the standard of care.
Contrast this scenario with the telecom hypothetical from the beginning of this Note. The law firm violated Rule 1.9 by representing a rival company bidding for the same FCC license. Rule 1.9 protects former clients like the telecom company. But it remains to be seen whether the law firm actually misused the telecom company’s confidential information — the harm the company must have suffered if it is to access negligence per se. In the speeding case, we know that the driver rear-ended the victim; in the telecom case, we still do not know whether the law firm misused confidential information. Negligence per se is a legal conclusion: conduct which we know the defendant performed (driving 90 miles per hour) fell below a duty of care. Negligence per se, as deployed in suits based on Rule 1.9, would lead to a factual conclusion: the defendant acted a certain way (he misused confidential information).99×99. Note that harm (needed to access negligence per se and establish the breach element of a claim) is different from injury (the fourth element of a negligence claim). In the speeding case, the harm that unlocks the door to negligence per se is the fact of rear-ending, because rear-ending is what the statute is supposed to guard against. But the injury that makes up the fourth element of the tort is the money and physical damages the other driver suffers. Likewise, in the tort of breach of confidentiality, the harm that accesses negligence per se is the fact of misusing confidences. Proving this harm is the crux of the split described in this Note. But the injury that makes up the fourth element of the tort is the lost profits flowing from that misuse.
Put differently, in traditional negligence per se cases, the harm that a statute guards against clearly happened. The other driver was rear-ended by the speeding car. But in suits predicated on a Rule 1.9 violation, the harm (the misuse of confidences) is no more established with negligence per se than without it. To use negligence per se in this context is to assume the conclusion that confidences were misused — a conclusion required to access negligence per se in the first place.
Instead, former-client plaintiffs should look to Rule 1.6, which provides that a lawyer “shall not reveal information relating to the representation of a client.”100×100. Model Rules of Prof’l Conduct r. 1.6(a) (Am. Bar Ass’n 2013). A former-client plaintiff who could show that her attorney revealed information in violation of Rule 1.6 would unlock the door to negligence per se; the attorney’s violation of the rule would amount to a breach of his duty of care, entitling the former client to damages for any injury caused by the violation.
IV. Refuting Courts’ Two Reasons for Lifting the Former Client’s Burden
Section A explains the two reasons courts give for lifting a former client’s burden as to breach: (1) the law should not require former clients to reveal their own secrets; and (2) actual misuse of confidential information is too hard to prove. Section B refutes the first reason, and section C refutes the second.
1. The Law Should Not Require Former Clients to Reveal Their Own Secrets. — If former clients had to provide direct proof that attorneys misused their confidential information, then they would have to disclose the very confidences that Rule 1.9 is meant to protect. In the disqualification context, courts have pointed to this dilemma to justify the presumption that the attorney already has former-client confidences that could be exploited.101×101. See, e.g., NCNB Tex. Nat’l Bank v. Coker, 765 S.W.2d 398, 400 (Tex. 1989); Carlson v. Langdon, 751 P.2d 344, 349 (Wyo. 1988). One described the alternative — direct proof — as asking the former client to “tear aside the protective cloak drawn about the lawyer-client relationship.”102×102. T.C. Theatre Corp. v. Warner Bros. Pictures, 113 F. Supp. 265, 269 (S.D.N.Y. 1953); see also Developments in the Law, supra note 26, at 1329.
The courts that have allowed a “substantial relationship” to give rise to a permissive inference of breach in civil tort cases have also adopted this view. As in disqualification, these courts lighten the former client’s burden to get around the dilemma. For instance, the Wyoming Supreme Court has held that asking a former client “to waive his privilege and self-disclose all the confidences he made to the attorney” would “make any resolution of the case in his favor a pyrrhic victory.”103×103. Bevan v. Fix, 42 P.3d 1013, 1030–31 (Wyo. 2002).
2. Actual Misuse of Confidential Information Is Too Hard to Prove. — In disqualification proceedings, courts presume that an attorney could misuse his former client’s confidences because of the “enormous pragmatic obstacles to any inquiry into the attorney’s actual knowledge and conduct.”104×104. Developments in the Law, supra note 26, at 1318. They recognize “how difficult it is for the former client to prove that confidential information was given to the attorney and would be useful in the attorney’s current suit.”105×105. Id. at 1329.
Again, permissive-inference courts have picked up this mantle in the context of civil tort suits by former clients. The privilege between the attorney and his new client “may make it exceedingly difficult for the former client to discover precisely whether and/or how the attorney has used her confidential information to the benefit of the new client and detriment of the former client.”106×106. Bevan, 42 P.3d at 1031. Therefore, the former-client plaintiff’s burden as to the breach element is lifted and a jury may infer breach based on circumstantial evidence.107×107. E.g., Reppert v. Hooks, No. 07-97-0302-CV, 1998 WL 548784, at *10 (Tex. App. Aug. 28, 1998).
Giving a former client the benefit of a conclusive presumption may make sense in a disqualification action. After all, the former client’s goal is to keep her new adversary from exploiting confidential information. Disclosing that confidential information in court would let the cat out of the bag;108×108. United States v. Dougherty, No. 07-CR-0361, 2014 WL 3676002, at *1 (E.D. Pa. July 23, 2014) (“Bells have rung, dogs barked, horses bolted from barns, and cats scurried out of bags and up trees. Toothpaste has been irreversibly evicted from its tubular abode and the egg scrambled.”). even if the court disqualified the attorney, the new client (the former client’s adversary) would now be able to exploit the confidential information without the disqualified attorney. (Even if an attorney manages to impart former-client confidential information to a new client before facing a disqualification motion, the former client may still want to avoid disclosing potentially embarrassing or sensitive confidences in open court.) But, as this section demonstrates, the same logic does not hold in subsequent litigation over breach of confidentiality, after the former client has already suffered an alleged harm from the breach.
1. Confidential Information Is Likely to Come to the Surface Anyway. — Assume that the former client does not identify specific confidential information disclosed by the attorney to the new client. For instance, assume that the court allowed a permissive inference of a breach based on the substantial relationship between the two matters. The permissive inference satisfies only one element (the breach element) of the cause of action. The former client must still prove that the breach caused her damage. And how is the former client to prove causation without specifying the exact confidential information that the attorney allegedly exploited? Short of adjusting the law yet again to allow for another permissive inference (this time, a permissive inference that the as-yet-unnamed confidential information caused damage), a court will require the former client to disclose her confidential information in order to show causation.
Indeed, this is exactly what happened in a permissive-inference case in Wyoming.109×109. Bevan, 42 P.3d 1013. The court held that a jury could infer breach, and it therefore denied summary judgment for the attorney as to this element.110×110. Id. at 1029–30. But as to the elements of causation and injury, the court granted summary judgment for the attorney anyway. The former client had not “alleged any facts indicating that the outcome of his divorce proceeding would have been more favorable had another attorney represented his wife . . . . Without legal injury or damages, for what is he to be compensated?”111×111. Id. at 1032.
Earlier, the court had stated that requiring the former client to disclose his confidential information on his way to proving breach would be a “Pyrrhic victory.”112×112. Id. at 1031. But the “victory” the court granted the plaintiffs was no less Pyrrhic, given that the very lack of proof that the court overlooked for one element shut the door to recovery on the others. Because the former client’s confidential information must surface one way or another, neither the “conclusive presumption” approach nor the “permissive inference” approach can be justified as better protecting the former client’s confidences.
2. Once a Former Client Sues Her Former Lawyer, the “Confidential” Information Is No Longer Confidential. — When a former client sues her lawyer, the law carves out an exception to the attorney-client privilege. In effect, the client waives the privilege “as to all communications relevant to [the lawsuit].”113×113. 8 Wigmore, supra note 24, § 2327(5), at 638; see also McCormick on Evidence, supra note 25, § 93, at 573. The lawyer may defend himself by entering evidence of confidential communications between him and his former client — even over the former client’s objection.114×114. E.g., Model Rules of Prof’l Conduct r. 1.6(b)(5) (Am. Bar Ass’n 2013); Restatement (Third) of the Law Governing Lawyers § 64 (Am. Law Inst. 2000). After all, allowing the former client to assert the privilege would severely hamstring the lawyer’s defense.115×115. See, e.g., Popovitch v. Kasperlik, 70 F. Supp. 376, 381 (W.D. Pa. 1947); see also Restatement (Third) of the Law Governing Lawyers § 64 cmt. b. Indeed, the lawyer may even use once-privileged information to defend against an accusation by a nonclient.116×116. E.g., Meyerhofer v. Empire Fire & Marine Ins., 497 F.2d 1190, 1195 (2d Cir. 1974); see also, e.g., Apex Mun. Fund v. N-Group Sec., 841 F. Supp. 1423, 1430 (S.D. Tex. 1993).
In short, if a former client sues her attorney, “the seal is removed from the attorney’s lips.”117×117. McCormick on Evidence, supra note 25, § 91.1, at 564. Therefore, a former client suing her lawyer should not resort to the attorney-client privilege — which has disappeared — to justify any evidentiary standard short of direct proof of actual misuse of confidential information.
3. This Conclusion Is Bolstered by Two Analogous Fields of Evidence Law. — First, just as evidence privileges communications between attorney and client, it also privileges communications between physician and patient. The justification is the same: to do her job, a physician needs to know all the facts — even facts a patient wants no one else to know — of a patient’s case. Indeed, in medicine, the justification is even stronger because “life itself may be in jeopardy.”118×118. 8 Wigmore, supra note 24, § 2380a, at 829 (quoting 3 The Revised Statutes of the State of New York app. at 737 (Albany, Packard & Van Benthuysen 1836)).
Yet here, too, the law lifts the physician-patient privilege in certain circumstances. When an element of the patient’s suit requires her to disclose her privileged injury “to the world at large,” the privilege is waived.119×119. Id. § 2389, at 855. As in the attorney-client context, allowing a personal-injury plaintiff to assert a privilege over evidence about her injuries would hamstring the defense. After all, evidence about the injury is central both to the plaintiff’s case in chief and to the defense. Likewise, in breach-of-confidentiality suits, a former-client plaintiff has put her confidentiality at issue. Misuse of confidential information is an essential element of the claim, so the former client cannot argue that she wishes to keep her confidential information secret.
The second analogous field is rape shield law. Under the Federal Rules, for instance, evidence of a rape victim’s sexual habits is inadmissible.120×120. Fed. R. Evid. 412(a). In civil cases, the bar to this evidence is lifted only when “the victim has placed it in controversy.”121×121. Fed. R. Evid. 412(b)(2). The goal is to protect the victim from embarrassment and invasion of privacy.122×122. Fed. R. Evid. 412 advisory committee’s note to 1994 amendment.
What can rape shield law teach us about the need to protect a former client from disclosing her confidential information in open court? Both rape shield regimes and the conclusive-presumption or permissive-inference approaches seek to protect the plaintiff’s privacy. But in legal malpractice, the rule protects evidence far closer to the core of the case — the confidences allegedly misused — than the sexual behavior evidence barred by the rape shield. Lifting the plaintiff’s burden of production as to more relevant evidence (indeed, as to an essential element of the plaintiff’s claim) comes at a higher cost. And once a rape case puts the victim’s reputation in play (that is, once reputation becomes relevant to the case), the rape shield rule yields. Likewise, a former-client plaintiff should not be shielded from proving an essential element of her claim.
To be sure, requiring former clients to enter their confidences into evidence may deter some former clients from bringing breach-of-confidentiality claims. And the deterrence effect may be greater than in rape cases, in which rape victims can rest assured that evidence of their sexual behavior won’t come into evidence unless the victims themselves open the door. But avoiding this kind of deterrence is not the law’s only goal. Otherwise, we would also want to keep the patient-physician privilege in place, even when the patient’s claim directly involves evidence about an injury covered by the privilege. Presumably, some potential personal-injury plaintiffs are deterred from suing for fear of publicizing information about their injuries. But the law requires a personal-injury plaintiff to waive the patient-physician privilege as to facts relevant to her claim — notwithstanding the potential chilling effect on lawsuits. The same should hold in breach-of-confidentiality suits by former clients.
The breach element of a breach-of-confidentiality claim may be hard to prove, but this kind of suit is a bad candidate for a permissive inference — let alone a conclusive presumption.
1. This Kind of Case Does Not Rise to the Level of Res Ipsa Loquitur. — The defenders of the permissive-inference approach point out that it may be very hard for the plaintiff to prove breach directly. This argument evokes a traditional shortcut in tort law: res ipsa loquitur.123×123. See Restatement (Second) of Torts § 328D (Am. Law Inst. 1965). Res ipsa allows a plaintiff to prove breach by showing an injury “of a sort that normally would not have occurred in the absence of the defendant’s negligence.”124×124. McCormick on Evidence, supra note 25, § 342, at 678. Once a plaintiff meets its burden, the jury may infer that the defendant breached a duty.125×125. Id. at 677; Restatement (Second) of Torts § 328D.
What kind of accident can speak for itself in this way? The plaintiff must show three elements: (1) the event that injured the plaintiff doesn’t normally happen unless someone is at fault; (2) the defendant had exclusive control over whatever caused the injury; and (3) neither the plaintiff nor a third party was at fault.126×126. See Restatement (Second) of Torts § 328D; see also, e.g., Ebanks v. N.Y.C. Transit Auth., 512 N.E.2d 297, 298 (N.Y. 1987). For instance, the English court that coined the term res ipsa loquitur reasoned that barrels of flour do not fall out of a shop’s second-story window unless someone at the shop is careless, so the jury could infer that the shop’s owner had breached a duty of care.127×127. Byrne v. Boadle (1863) 159 Eng. Rep. 299; 2 H. & C. 722.
Medical malpractice plaintiffs have used res ipsa (the classic case being that of a medical instrument left inside the body of a surgical patient),128×128. E.g., Kambat v. St. Francis Hosp., 678 N.E.2d 456 (N.Y. 1997). and some commentators have argued that the doctrine should apply in legal malpractice as well.129×129. See, e.g., Lawrence W. Kessler, Alternative Liability in Litigation Malpractice Actions: Eradicating the Last Resort of Scoundrels, 37 San Diego L. Rev. 401 (2000). Allowing the jury to infer breach of confidentiality based on a substantial relationship between two matters is an example of this impulse. But the facts of a typical breach-of-confidentiality case do not meet the first requirement of res ipsa. When a former client suffers an injury (like losing a case against an adversary represented by her former lawyer), the injury could come about for all sorts of reasons other than the former lawyer’s breach of confidentiality. In short, a former-client plaintiff in a breach-of-confidentiality suit based on Rule 1.9 generally could not meet res ipsa’s high threshold.
To be sure, sometimes the former client’s injury could have come about only because her former attorney misused confidential information. In those instances, the first requirement of res ipsa is satisfied. Such cases would be the legal-services equivalent of a medical sponge left inside a surgery patient. But to allow res ipsa in this subset of breach-of-confidentiality cases is not to endorse the “permissive inference” approach, which calls for an inference far more often. In effect, the “permissive inference” approach insists that every case that meets the “substantial relationship” standard is the legal-services equivalent of the surgical sponge in the patient. Such a rule is far too broad.
2. A Recent Revision to the Federal Rules of Civil Procedure Counsels Against Applying an Inference in These Cases. — Federal Rule of Civil Procedure 37 describes the consequences of a party’s failure to preserve electronic information.130×130. See Fed. R. Civ. P. 37(e). Until recently, courts were faced with a question: when was it appropriate to let the jury infer that the missing electronic information would have harmed the litigation position of the party that lost it? The circuit courts split on the mental state required for a court to allow this “adverse inference” — ranging from mere negligence to specific intent.131×131. See Shira A. Scheindlin & Natalie M. Orr, The Adverse Inference Instruction After Revised Rule 37(e): An Evidence-Based Proposal, 83 Fordham L. Rev. 1299, 1300–01 (2014); see also, e.g., Morris v. Union Pac. R.R., 373 F.3d 896, 901 (8th Cir. 2004); Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002). The 2015 amendments to the Federal Rules resolved the split.132×132. Scheindlin & Orr, supra note 131, at 1301. Like the high bar to res ipsa, the new Rule 37 imposes a high bar to an adverse inference: the court must find that the party who lost the information “acted with the intent to deprive another party of the information’s use in the litigation.”133×133. Fed. R. Civ. P. 37(e)(2) (emphasis added).
What does this have to do with the permissive inference that an attorney adverse to a former client on a substantially related matter misused the client’s confidential information? Adverse inferences are weighty. Only very bad behavior — intentionally destroying evidence — gives rise to the adverse inference.134×134. See Fed. R. Civ. P. 37 advisory committee’s note to 2015 amendment. But in a former-client breach-of-confidentiality case, the bad behavior itself (the misuse of confidences, whether intentional or merely careless) is the conclusion drawn from the permissive inference. It cannot give rise to the inference. In addition, this high bar is imposed even when an underlying element of a claim is impossible to prove — either because electronic information is lost (in the Rule 37 case), or because of the privilege between the attorney and his new client (in the Rule 1.9 case).
Where does this leave former clients? To be sure, requiring direct proof that the lawyer actually misused confidential information is a tough obstacle for former clients to surmount. Given this rigorous standard, some lawyers who violate Rule 1.9 will nevertheless escape breach-of-confidentiality liability. But former clients will still have other avenues to recovery. Under a theory of breach of fiduciary duty of loyalty, a former client may recover disgorgement of the legal fees paid to her former firm.135×135. E.g., DeMott, supra note 47, at 852; Wolfram, supra note 5, at 700–02, 740. Crucially, a client need show only a firm’s breach of its duty of loyalty — and violating Rule 1.9 is such a breach — rather than causation and injury.136×136. See, e.g., Bolton v. Crowley, Hoge & Fein, 110 A.3d 575, 582 (D.C. 2015); DeMott, supra note 47, at 863–64; Wolfram, supra note 5, at 701–02.
This Note has analyzed three ways to prove breach of former-client confidentiality. Settling on any of the approaches would lead to more certainty for lawyers and clients. The legal-services business, like any industry, needs predictability to thrive. And the upshot of this Note’s preferred approach (direct proof of actual misuse) is that firms and attorneys will be more willing to take on cases, leading to more competition between attorneys and greater access to legal services. That is an outcome that everyone who cares about the integrity of the legal system can applaud.