Saturday, February 25, 2023

BPR Grants Protective Order

I had previously blogged about a District of Columbia bar prosecution that I called "cutting edge" as it charged misconduct in connection with the operating practices of a law firm.

I was surprised to see a recent Order of the Board on Professional Responsibility that granted in part the firm's request to maintain under seal documents that will placed in evidence in the case.

There is a strong presumption that, once charges are filed, the entire proceeding is public. Protective orders are granted to protect the privacy of victims of lawyer misconduct; somewhat rarer are instances (such as here) where such orders are granted to protect alleged perpetrators.

The contentions of the parties are set out in the order. I repeat the contentions and the Board's resolution at some length as I do not have access to a linkable copy.

The full order can be obtained from the Office of the Executive Attorney of the Board.

While the merits of the Board's order are difficult to discern absent access to the underlying documents, I will observe the following:

To the extent this Order is intended to protect client confidential information, I am on board. To the extent it protects the firm and shields the practices from scrutiny when those very practices are the subject of the charges, I am most definitely not. To the extent that the Order will require closing the hearing, I view that as contrary to the mandate of Rule XI for open bar proceedings.

From the Order

Respondents, Mathew B. Tully and Gregory T. Rinckey, and Tully Rinckey PLLC (“Movants”) seek a protective order preventing the public disclosure of two categories of documents:

Category One - Exhibits to which Movants assert confidentiality pursuant to trade secrets law and/or in-house contractual confidentiality between the firm and its current and former employees.

Category Two - Exhibits to which Movants assert potential confidentiality on account of a reason other than trade secret and/or in-house contractual confidentiality.

Disciplinary Counsel opposes the motion. The parties’ contentions are discussed below.

Movants’ Argument

Movants assert that the Category One exhibits are documents taken from or that otherwise disclose the Standard Operating Procedures (“SOPs”) of Tully Rinckey PLLC (“Firm”). They argue that Category One exhibits constitute trade secrets under federal and District of Columbia law. In support, they submitted declarations asserting that (1) the Category One documents are covered by in-house confidentiality agreements with current and former Firm employees; (2) “the Category One exhibits derive independent economic value, actual or potential, from not being generally known and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information”; (3) the Firm has taken reasonable measures to keep the information in the Category One exhibits secret; and (4) the Firm will be irreparably harmed by the public disclosure of the Category One exhibits. Mot. at 3-4.

The gravamen of Movants’ argument is that the Firm devoted considerable resources to developing its SOPs; the SOPs provide the firm with a competitive advantage over its competitors; a competitor would obtain economic value from the free disclosure of the SOPs in this proceeding; and that the Firm would be harmed if the SOPs were made available to the public. The Firm’s Chief Executive Officer, Michael W. Macomber, Esquire, states that he knows of departing Firm employees who have used “covert means to misappropriate [the Firm’s] Trade Secrets to give them a sizeable advantage when they started their own law firm.” Macomber Decl. ¶ 22; see also ¶¶ 23, 30. Movants acknowledge that neither party has located a disciplinary case applying trade secret law as presented here but they argue that the lack of disciplinary caselaw on this issue supports granting the motion because it preserves the exhibits’ confidentiality until “this matter ultimately lands at the Court of Appeals.” Reply at 4.

As to Category Two Exhibits, Movants assert that they “contain information that may be a confidence or secret within the meaning of” Rule 1.6. Mot. at 4. They argue that some of the Category Two exhibits contain work-product that reveals non- public information that might be embarrassing to a client, some refer to client payment issues, and some would disclose clients as confidential government agents, in violation of 50 U.S.C. § 3121 and related federal secrecy laws. Mot. at 5. Respondents explain that they need to use the Category One and Category Two exhibits in their defense to the charges. Mr. Macomber explains that the Firm has granted Respondents a “license” to use the Category One exhibits in their defense, if the exhibits would “remain[] non-public.” Macomber Decl. ¶ 34. If the Category One exhibits cannot be protected from public disclosure, he will revoke the license that he granted to Respondents. Id. Mr. Macomber also appears to recognize that Disciplinary Counsel obtained Category One exhibits during its investigation, and asserts that Disciplinary Counsel’s public disclosure of Category One exhibits is unauthorized. See Macomber Decl. ¶ 35.

Disciplinary Counsel’s Argument

Disciplinary Counsel argues that Movants have not shown good cause for the entry of a protective order. To begin with, Disciplinary Counsel argues that, by Rule, disciplinary proceedings are public once a Specification of Charges has been filed. Opp. at 3 (citing D.C. Bar R. XI, § 17(a)). Disciplinary Counsel is only partially correct. D.C. Bar R. XI, § 17(a) provides that “[a]ll proceedings before the Hearing Committee and the Board shall be open to the public, and the petition, together with any exhibits introduced into evidence, any pleadings filed by the parties, and any transcript of the proceeding, shall be available for public inspection.” But public access is not limitless. Section 17(d) limits access of disciplinary proceedings to “protect the interests of the complainant or of any other person” and authorizes the Board to enter a protective order “prohibiting the disclosure of confidential or privileged information.” Thus, the openness afforded by § 17(a) is not dispositive.

Recognizing that public access is not limitless, Disciplinary Counsel next argues that Respondents are not entitled to a protective order for either category of exhibits because D.C. Bar R. XI, § 17(d) does not apply to them. Disciplinary Counsel explains that § 17(d) is limited “to protect the interest of the complainant or any other person,” and does not include a respondent. See Opp. at 3 (“The rule does not protect ‘complainants, respondents, or any other person.’” (emphasis in original)). In essence, Disciplinary Counsel argues that the phrase “any other person” should be understood to exclude Respondents. We need not consider that argument because Respondents are not the only movants and Disciplinary Counsel has not argued that the Firm cannot seek a protective order under Section 17(d) as “any other person.”

As to Category One exhibits, Disciplinary Counsel argues that the federal and District of Columbia trade secrets statutes are inapplicable to these proceedings:

18 U.S.C. 1835 concerns procedures to be employed in criminal trials enforcing “this chapter,” i.e., Chapter 90 (“Protection of Trade Secrets”) of Title 18 of the U.S. Code. D.C. [Code §] 36-405 is part of a chapter of the D.C. Code concerned civil actions to protect trade secrets, and it is limited to “actions under this chapter.” Neither of these statutes governs disciplinary proceedings; Rule XI does. Opp. at 4.

On the surface, Disciplinary Counsel is correct that the statutory provisions do not govern disciplinary proceedings, but that does not resolve the issue. The question is whether Rule XI protects information that may be confidential based on other laws. We believe it does. To read Rule XI otherwise would allow a Court Rule to ignore statutory confidentiality law. Disciplinary Counsel argues that even if these statutes apply, Movants’ understanding of the information considered trade secrets is too expansive. It cites to cases in which internal firm policies have been publicly disclosed in disciplinary matters—but none of those cases contested disclosure on these grounds, so they do not address whether trade secrets may be protected under Rule XI or whether the SOPs are trade secrets. Opp. at 4-5.

Disciplinary Counsel next contests the Firm’s assertion that these are valuable trade secrets: “Any lawyer who has ever worked in a mid-sized or large firm who reads these materials would understand they are routine procedures of little value to anyone (except in some instances perhaps, as an object lesson in which practices not to employ).” Opp. at 6. In sum, Disciplinary Counsel argues that the secrets are of little value, and that other firms do not keep such secrets. But Disciplinary Counsel does not address Movants’ assertions that the Category One documents are covered by in-house confidentiality agreements with current and former Firm employees, that the Firm has taken reasonable measures to keep the information in the Category One exhibits secret, or that someone starting a new firm would find value in the SOPs.

Disciplinary Counsel also questions whether Mr. Macomber licensed Respondents to use the Category One exhibits, and whether he will revoke the license absent a protective order. Opp. at 8-9. But Mr. Macomber’s declaration addresses both points:

This affirmation shall also place all the parties on notice that if [the Firm’s] Trade Secrets cannot be protected from public disclosure, I hereby revoke the license that I gave the Respondents to use these confidential and privileged information [sic] as that license was conditioned on the information remaining non-public. Macomber Decl. ¶ 34.

Disciplinary Counsel further argues that the Firm cannot prevent it from using as evidence copies of any Category One exhibits that it obtained during its investigation. Opp. at 9. We need not reach that issue because the Firm does not seek to enjoin all use of Category One exhibits, rather, it seeks a protective order preventing their public disclosure. As for Category Two exhibits, Disciplinary Counsel argues that Movants have failed to show that the documents at issue contain any client confidences or secrets. Disciplinary Counsel argues that at most, Movants have asserted that the documents contain potential confidences or secrets, and that assertion is insufficient to carry Movants’ burden. Opp. at 7-8.

Order in pertinent part

it is not clear that all of the Category One exhibits would qualify as trade secrets in an action brought under either the District or federal statutes. But we need not finally resolve that issue because the protections afforded by D.C. Bar R. XI, § 17(d) are not limited to “trade secrets.” Instead, § 17(d) permits the sealing of confidential information to “protect the interests of the complainant or of any other person.” The factors set out in J.C. v. District of Columbia, which addressed balancing the right to public access to court proceedings with the interest in keeping child abuse and neglect cases confidential, are useful in this analysis:

(1) the need for public access to the documents at issue; (2) the extent to which the public had access to the document prior to the sealing order; (3) the fact that a party has objected to disclosure and the identity of that party; (4) the strength of the property and privacy interests involved; (5) the possibility of prejudice to those opposing disclosure; and (6) the purpose for which the documents were introduced. 199 A.3d 192, 207 (D.C. 2018) (quoting TIG Ins. Co. v. Firemen’s Ins. Co., 718 F. Supp. 2d. 90, 95 (D.D.C. 2010)).

On the side of protection, we note that the Firm is not a party to this disciplinary proceeding, that it created the Category One exhibits through considerable effort and expense, that it has taken affirmative steps to maintain the secrecy of the Category One exhibits, including confidentiality agreements with its employees, and that the information in Category One exhibits may be useful to the Firm’s current and future competitors. In addition, we consider Mr. Macomber’s assertion that the Firm has “licensed” Respondents to use the Category One exhibits in their defense of Disciplinary Counsel’s charges if they are not publicly disclosed, and that he will withdraw their license if a protective order is not granted. Thus, absent entry of a protective order, Respondents will be without evidence that they intend to use to defend the charges against them.

Editor's note: the Firm is Tully Rinckey PLLC; the Respondents are Messrs. Tully and Rinckey, the founding and managing partners. 

On the side of public disclosure, we consider the public’s interest in access to disciplinary proceedings. As Disciplinary Counsel notes, the Court of Appeals has said that the 1995 amendments to Rule XI, which provide that all proceedings before a hearing committee would be open to the public, “reflects a judgment by the court in favor of general openness of disciplinary proceedings.” In re Dunietz, 687 A.2d 206, 211 (D.C. 1996). But, Bar R. XI, § 17(d) also contemplates a limitation on the “general openness” reflected in § 17(a). Thus, while we are mindful of the benefits of public observation of an entire disciplinary hearing, the public is sometimes excluded from portions of a hearing, when required by the application of § 17(d).

Finally, as Movants argue, we consider that the issues presented by the Movants are somewhat novel and may be considered by the Court of Appeals, following proceedings before the Hearing Committee and the Board. If the Court determines that the Category One exhibits should be publicly disclosed, it can order them to be disclosed.

Considering the foregoing, we conclude that the interests of the discipline system, including the interest in public access to disciplinary proceedings, are best served if those portions of the Category One exhibits that have not been previously publicly disclosed are placed under seal. This will allow the hearing to proceed while affording Respondents access to evidence that they believe they need to defend themselves, and will avoid potentially diverting this matter into a subpoena enforcement matter in the Court of Appeals. If the Board or the Court disagrees with this decision in the future, the Category One exhibits can be unsealed at that time.

Before proceeding to Category Two, it is worth underscoring that the scope of the protection is for information that is not already disclosed to the public. There are portions of the SOPs that are available on the Firm’s website, perhaps in a different form, such as the Firm’s mission and practice areas. Movants should carefully review the SOPs and redact where needed to allow for public access to information that has already been publicly disclosed.

Category Two Exhibits

There are forty-five Category Two Exhibits. Movants assert that forty-one of those documents are client-related that contain one or more of the following: client names or identifying information, information obtained from clients to seek legal advice, facts relating to individual client representations (including the legal services provided to clients), work-product that reveals non-public information that might be embarrassing to a client, and information relating to client payment issues. Four of the Category Two exhibits are non-client-related: one is a disciplinary complaint against a third party and three contain medical information (Respondents’ and a third party’s).

The Client-Related Category Two Exhibits.

Most of the client-related exhibits contain client names (sometimes only last names, sometimes the client name appears as part of a case name (e.g., Smith v. Jones)) and client contact information (mailing address, phone number and email address), with little other information about the client, or the client matter. RX 71, 79, 85, 98, 99, 101, 103, 105, 137, 138, 140, 164, 169, 170, 172, 181, 182, 185, 201, 204, 216, 217, 218, 222, 223, 225, 227, 228, 244. Several of the client-related exhibits appear to be documents filed in litigation involving the identified client. RX 84, 139, 213. Other client-related exhibits appear to describe a client’s request for legal services, the legal services provided to clients, or work done for each client (including information contained in, bills and calendar entries). RX 74, 81, 83, 141, 143, 207, 214, 226.

Disciplinary Counsel argues that Movants have failed to show that the information at issue is confidential, only that it might be confidential. For instance, there is no evidence that any client has objected to the disclosure of the information in the client-related exhibits, or that any client would find disclosure of the information embarrassing or detrimental. See Rule 1.6(b). But Movants assert that the clients identified in the client-related exhibits are not complainants. We further note that the charges against Respondents do not appear to arise out of conduct directly related to the representation of the clients identified in the client-related exhibits. It is not clear that any of the clients at issue are aware of this proceeding, or that any know that information regarding them or their matter might be disclosed.

Given the lack of client participation here, and recognizing that even the fact of a representation may be considered a “secret” (see Rule 1.6, cmt [26]; D.C. Bar Ethics Op. 124), and further recognizing that one of the purposes of the discipline system is to protect clients, we conclude that Movants’ showing that the client- related exhibits containing client names or information relating to the representation, is sufficient to enter a protective order. See, e.g., Order, In re Paul, Board Docket No. 19-BD-063 (BPR Dec. 30, 2019) (sealing exhibits “that contain arguable client confidences” (emphasis added)); Order, In re Johnson, Board Docket No. 18-BD- 058 (BPR May 2, 2019) (granting Disciplinary Counsel’s consent motion to seal documents reflecting client confidences or secrets); In re Wemhoff, Board Docket No. 14-BD-056 (BPR Nov. 20, 2015), appended Hearing Committee Report at 6 n.7 (exhibits that revealed the basis of the respondent’s irreconcilable difference with client were sealed).

However, we disagree with Movants that it is necessary to seal entire documents to protect potential client confidences or secrets. Instead, client names or other identifying information can be redacted, or if it is necessary to refer to individual clients, the clients can be identified by their initials or other unique identifier. Thus, John Smith may become “JS” or “Client 1,” or a similar unique identifier that does not reveal the client’s name. Exhibits that contain calendar or diary entries, or bills, should be redacted to prevent the disclosure of the nature of the representation or the services provided.

As noted above, several of the client-related exhibits appear to be documents filed in litigation involving the identified client. See, e.g., RX 84, 139, 213. These documents do not automatically lose the protections afforded by Rule 1.6 simply because they have been publicly filed. See In re Klayman, Board Docket. No. 17-BD-063 at 20-22 (BPR Oct. 2, 2020) (rejecting the respondent’s argument that his disclosure of information contained in a public court filing could not violate Rule 1.6), recommendation approved without discussion, 282 A.3d 584 (D.C. 2022) (per curiam). If practicable, these documents should be redacted to prevent the disclosure of information protected by Rule 1.6. If redaction is not practicable, they should be sealed in their entirety.

As for Respondents’ Exhibit 190, Movants rely on Mr. Rinckey’s assertion that it “contains potential confidences or secrets per Rule 1.6 because it appears to me to contain client confidences or secrets, clients’ names, matter type and strategy, etc.” Rinckey Decl. at 61. However, it is unclear on the face of the exhibit that any of the people identified in the exhibit are clients, or that the substance of the exhibit relates to a client matter. Thus, the motion is denied with respect to RX 190, without prejudice to seeking reconsideration (specifically identifying the client(s) or client matter(s) disclosed in this exhibit, and proposing redactions if practicable).

The Non-Client-Related Category Two Exhibits.

Respondents’ Exhibit 146 contains medical information regarding a non-party. That medical information must be redacted. Respondents’ Exhibits 158 and 188, Movants assert that they contain personal identifying information or disability related information regarding Mr. Rinckey and Mr. Tully, respectively, but Movants do not identify the information to be redacted. The motion is denied with respect to these two documents, without prejudice to seeking reconsideration (supported by copies of the proposed redactions).

Respondents’ Exhibit 202 is a disciplinary complaint filed against a member of the Bar who is not a party to this action. That document will be sealed in its entirety, pursuant to D.C. Bar R. XI, § 17(a).

(Mike Frisch)

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