Attorney Ethics Compliance for Advertising and Solicitation in Multi-District Litigation (MDL)

Background

The Nissenbaum Law Group not only has an ethics defense team that advises attorneys who are licensed in New York, New Jersey, Pennsylvania, the firm also handles the complex attorney ethics issues that arise in multi-district litigation (MDL), such as class actions.

The ethics matters that typically arise in multi-district litigation emerge from the unique aspects of representing hundreds or thousands (or more) of plaintiffs in different state or federal jurisdictions in coordination with state attorneys general who may have different approaches to settlement or trial.

Against that backdrop, attorneys who handle MDL matters must also contend with the complex ethical guidelines for lawyer advertising and solicitation. The ethical dilemmas that can emerge from that aspect of MDL practice are multi-level—from the duty of candor to the tribunal to the necessity to avoid conflicts of interest, from the required disclosures that often must be incorporated in MDL retainer agreements to the use of intermediaries for purposes of law firm marketing. But of all the unique ethical and legal issues that can be raised by representing clients in multi-district litigation, arguably the most common are the ethical aspects of attorney advertising and solicitation.

The Ethical Requirements That Apply to Law Firm Advertising to Potential Clients in Multi-district Litigation.

In addition to the restrictions that the court itself may impose for permissible advertising by attorneys seeking clients who have been injured by the wrongful conduct alleged in the complaint, the requirements set forth in the American Bar Association’s Model Rules of Professional Conduct 7.1, 7.2, and 7.3 will typically also apply. Those rules are very specific in regard to what is and is not permitted.

 ABA Model Rule 7.1 states that

“A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”

ABA Model Rule 7.3 states in part,

(a) “Solicitation” or “solicit” denotes a communication initiated by or on behalf of a lawyer or law firm that is directed to a specific person the lawyer knows or reasonably should know needs legal services in a particular matter and that offers to provide, or reasonably can be understood as offering to provide, legal services for that matter.

(b) A lawyer shall not solicit professional employment by live person-to-person contact when a significant motive for the lawyer’s doing so is the lawyer’s or law firm’s pecuniary gain, unless the contact is with a:

 (1) lawyer;

(2) person who has a family, close personal, or prior business or professional relationship with the lawyer or law firm; or

(3) person who routinely uses for business purposes the type of legal services offered by the lawyer.

(c) A lawyer shall not solicit professional employment even when not otherwise prohibited by paragraph (b), if:

(1) the target of the solicitation has made known to the lawyer a desire not to be solicited by the lawyer; or

(2) the solicitation involves coercion, duress or harassment.

(d) This Rule does not prohibit communications authorized by law or ordered by a court or other tribunal.

The key point is that any such advertisement should be reviewed carefully to ensure that it comports with the version of these and other related rules of professional conduct applicable in the relevant jurisdictions. To the extent that the law firm can obtain court approval of the advertisement in question, that can be very helpful as well.

The Mechanism for Law Firms to Contact Members of a Potential Class Set Forth in The Federal Rules of Civil Procedure (FRCP)

Federal Rule of Civil Procedure (FRCP) 23 generally focuses on notice and advertising after the class is—or is proposed to be—certified as part of a settlement. It separates the scenarios into two different categories.

The first involves a situation in which the class action is maintained under circumstances in which

(1) prosecuting separate actions by or against individual class members would create a risk of:

(A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or

(B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;

(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; 

The second would involve a situation in which

3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:

(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Under the first scenario, “the court may direct appropriate notice to the class.” While under the second

the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice may be by one or more of the following: United States mail, electronic means, or other appropriate means. The notice must clearly and concisely state in plain, easily understood language:

(i) the nature of the action;

(ii) the definition of the class certified;

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through an attorney if the member so desires;

(v) that the court will exclude from the class any member who requests exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members under Rule 23(c)(3).

Additionally, it should be kept in mind that the foregoing requirements also apply “upon ordering notice under Rule 23(e)(1) to a class proposed to be certified for purposes of settlement under Rule 23(b)(3)…”

Attorneys Involved in the MDL Process are Ethically Required to Communicate with Their Potential or Actual Clients in a Manner “Reasonably Calculated” to Allow the Latter to Understand the Nature and Extent of the Legal and Factual Issues Underlying Their Potential or Actual Involvement in the Class and Possible Settlement of it.

Under ABA Model Rule of Professional Conduct 1.4 an attorney is required to maintain reasonable communication with their client concerning matters relating to the representation. That RPC states

Rule 1.4: Communications – Client-Lawyer Relationship

(a) A lawyer shall:

(1) promptly inform the client of any decision or circumstance with respect to which the client’s informed consent, as defined in Rule 1.0(e), is required by these Rules;

(2) reasonably consult with the client about the means by which the client’s objectives are to be accomplished;

(3) keep the client reasonably informed about the status of the matter;

(4) promptly comply with reasonable requests for information; and

(5) consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.

(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

The key point is that an attorney handling MDL litigation is required to (a) sufficiently communicate with a client pool that may number in the hundreds, thousands or more and may be located across the country, yet (b) nevertheless be required to meet this standard as it may exist in the applicable jurisdictions.

An example of a particularly effective tool to assist in meeting that requirement is to have “townhall meetings” with potential or actual clients over a publicly available video conferencing application. This can be coupled with a stream of digital notices and instructional videos sent to an email list of potential or actual plaintiffs that can streamline this process.

As Part of a Class Action Settlement, an Attorney May Typically Apply to the Court to Implement Procedures to Mitigate Some of the Ethical Risks in Carrying Out its Terms and Conditions. 

MDL attorneys should always consider whether to request that the court appoint a “Settlement Administrator” to carry out the terms of the settlement agreement. Likewise, they should consider whether to request the appointment of a Special Master to resolve disputes or other complaints concerning how the settlement is being carried out and how the damage awards are being allocated.

It is also usually advisable to have (a) a common database for materials that the class action plaintiffs can access to help them through the process of obtaining their awards and (b) a communications platform by which they can share information and guidance with one another.

The Firm’s Approach to the Complex Ethical Issues Involved in Multi-District Litigation (MDL)

The Nissenbaum Law Group stands ready to represent attorneys facing ethical issues concerning their representation of clients in MDL litigation matters. Click here to learn more about the firm’s Multi-District Litigation Practice.