Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.


Ethical Issues Raised By “Attorney’s Eyes Only” Discovery

At the outset of a recently-filed case, opposing counsel (who practices in a different city) volunteered to send me a form of stipulated protective order which, he assured me, was “state of the art” and “had been used in many other cases” by his firm. His proposed protective order was remarkable both for its length (over 20 pages) and complexity (incorporating  three different sets of procedures or “tiers” for producing confidential documents,  the most restrictive “tier” governing documents to be produced for “attorney’s eyes only” review).

Our case, however, involved a coverage dispute between a bank and its insurer under a commercial policy of insurance.  I could discern no potentially discoverable trade secrets, state secrets or any other unusual circumstances that might call for extraordinary discovery limitations or restrictions such as “attorney’s eyes only” production.  It wasn’t easy, but opposing counsel finally agreed to use a much simpler stipulated protective order, providing only that documents stamped “CONFIDENTIAL” would be disclosed to listed participants in the litigation and used by them solely for purposes of the case.

“Attorney’s eyes only” discovery stipulations are employed most usually in intellectual property litigation to protect trade secrets or other competitively-sensitive information from disclosure to competitors.  But such restrictive discovery is stranger than may at first appear. Under basic norms and rules of professional conduct, an attorney is the sharer and keeper of the client’s confidences. An attorney also generally is regarded as the client’s agent for all matters related to the representation, including imputation of knowledge. Discovery provided under an “attorney’s eyes only” limitation, however, turns the attorney into a keeper of secrets from the client: a fundamental (and ethically uncomfortable) role reversal.

Indeed, Rule of Professional Conduct 3-500 imposes a broad duty on the attorney to keep the client informed:

A member shall keep a client reasonably informed about significant developments relating to the employment or representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.

It is hard to imagine documents more likely to be “significant” in intellectual property litigation than those for which an adversary demands “attorney’s eyes only” protection. While the comments to Rule 3-500 state that “[t]his rule is not intended to apply to any document or correspondence that is subject to a protective order or non-disclosure agreement”, this begs the question whether and when such an order or agreement precluding client access may be appropriate. Entry of such a protective order or agreement itself plainly would constitute a “significant development” requiring discussion between the attorney and client under Rule 5-300, presumably before any “attorney’s eyes only” discovery protocol is accepted.

Minneapolis attorney Thom Gilligan has argued persuasively that an attorney must obtain the informed consent of the client before agreeing to any “attorney’s eyes only” discovery.  (Ethical Implications of “Attorney’s Eyes Only”, DRI Professionalism Perspectives, Vol. 11, Issue 2 (Sept. 12, 2008)). Such a discovery restriction, Gilligan observes, “raises fundamental concerns regarding the impairment of the attorney’s ability to effectively communicate with the client and the client’s ability to meaningfully and adequately participate in the representation.”

In sum, “attorney’s eyes only” discovery, while an increasingly familiar practice, is an ethically problematic one. Even in the limited class of intellectual property cases where such a discovery restriction arguably may be appropriate, the scope of such restricted discovery should be drawn as narrowly as possible, encompassing only such evidence as demonstrably would be expected to cause competitive harm if disclosed to an adverse party. Given the serious issues of professional ethics raised by “attorney’s eyes only” discovery, courts can be expected to look with disfavor on perceived abuses of the “attorney’s eyes only” designation.  See, e.g., Fears v. Wilhelmina, No. 02 Civ. 4911, 2003 WL 21737808 at *1 (S.D.N.Y.  July 25, 2003) (stating that the court “will not hesitate to impose sanctions” for designating documents as “attorney’s eyes only” without an adequate or reasonable factual basis).

-- James Delphey, Seltzer Caplan McMahon Vitek

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author and not of SDCBA or its Legal Ethics Committee.**