Federal Court Finds Ex Parte Contact with Manager Not Prohibited By Ethics Rules

A Virgin Islands District Court recently found that the ethical rule prohibiting ex parte contact with a represented party did not preclude plaintiffs’ counsel from speaking with a managerial-level employee of the defendant who had information supporting plaintiffs’ spoliation claims. Mendez v. Hovensa, LLC, Civ. No. 02-0169, 2008 Lexis U.S. Dist. LEXIS 28122 (D.V.I. March 31, 2008). The court refused to disqualify plaintiffs’ counsel for speaking to the manager, finding that even though the manager’s testimony was prejudicial to the defendant, the rule was not intended to block the flow of prejudicial information.

Plaintiffs’ underlying claim is that Hovensa, the defendant, provided them with contaminated water. This dispute arises from Plaintiffs’ suspicion that Hovensa hid and failed to produce relevant evidence. As part of its investigation, Plaintiffs’ counsel contacted the Hovensa shift supervisor, Cecil Hodge, believing that Hodge had information regarding the types of documents the company maintained, as well as information demonstrating that the company hid documents. Hodge provided Plaintiffs’ counsel with an affidavit indicating that documents he had created were missing from the company’s incident log. Hovensa moved to disqualify plaintiffs’ counsel, claiming that its contact with Hodge violated the rule against ex parte contact.

Model Rule 4.2 (“Rule 4.2”), which the Virgin Islands adopted, prohibits ex parte communications between an attorney and a represented party regarding the subject matter of a representation. Where a party is an organization, the rule prohibits contact with:

(1) a constituent of the organization who supervises, directs or regularly consults with the organization’s lawyer concerning the matter or (2) has authority to obligate the organization with respect to the matter or (3) whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability.

Hovensa argued that Hodge met the second prong. Hodge’s statements, Hovensa claimed, could be offered as a party admission under Federal Rule of Evidence (“FRE”) 802(d)(2)(D), and he therefore had “authority to obligate the organization with respect to the matter.”

The court rejected Hovensa’s argument, finding that Rule 4.2 was not coextensive with FRE 802 and did not prohibit contact with every corporate constituent whose statements could be used against the company. As the court pointed out, while the prior version of Rule 4.2 had included the language “whose statement may constitute an admission on behalf of the organization,” the ABA amended the rule to narrow it, recognizing that the prior version was too broad and opened ended. In the court’s opinion, viewing the two rules as coextensive also would unnecessarily stifle the flow of information, since an admission under the evidentiary rules may be rebutted.

Interpreting the ethical and evidentiary rules together might also violate Model Rule 1.13(a), according to the court, because doing so would “force representation on employees who have not consented to such representation . . . an organization cannot unilaterally impose representation on its employees (except those who are in effect its alter-egos).” **20-21. Rule 1.13(a) provides, “A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.”

The court also rejected Hovensa’s alternative argument that Hodge met the third prong of Rule 4.2 because, Hovensa claimed, Hodge’s actions could be imputed to the corporation for purposes of liability. The fact that the information Hodge provided Plaintiffs’ counsel was prejudicial to Hovensa, the court held, was not sufficient to trigger Rule 4.2 because “it was not Hodge’s conduct for which plaintiffs seek to hold Hovensa liable.” *9.

This decision follows at least two other recent decisions recognizing a plaintiff’s right to communicate ex parte with a defendant’s current and former employees and may signal a trend in courts to interpret Rule 4.2 narrowly. See EEOC v. HORA, Inc., No. 05-5393, 2007 U.S. App. LEXIS 15705 (3d Cir. June 29, 2007) (unpublished decision) (overturning district court’s disqualification of plaintiff’s counsel who had engaged in ex parte contact with defendant’s employee); Bryant v. Yorktowne Cabinetry, Inc., No. 4:07cv036, 2008 U.S. Dist. LEXIS 14823 (W.D. Va. Feb 28, 2008) (refusing to disqualify plaintiff’s counsel and permitting ex parte contact with defendant’s employees).

Ethics Corner is a regular contribution by the Section’s Ethics and Professional Responsibility Committee.

Justin M. Swartz is a partner at Outten & Golden LLP , www.outtengolden.com, and Co-Chair of its Class Action Practice Group. He has represented employees in class action discrimination and wage/hour cases, as well as individual discrimination cases and other employment matters, since 1998. He is the Plaintiff Co-Chair of the ABA LEL Ethics and Professional Responsibility Committee, and an active member of the Equal Employment Opportunity Committee. He serves on the Committee on Civil Rights of the New York City Bar Association and the Executive Board of the National Employment Lawyers Association New York Chapter, and is Co-Chair of the NELA Fair Labor Standards Act Committee.

Cara E. Greene is an associate at Outten & Golden LLP, www.outtengolden.com, where she represents employees in litigation and negotiation in all areas of employment law, including disability, pregnancy, and family responsibilities discrimination; class actions; and executive and professional contracts and compensation. She is a member of the ABA LEL Ethics and Professional Responsibility Committee and is Plaintiff’s Co-Chair of the Ethics sub-committee of the Employee Rights and Responsibilities Committee.