Negotiator’s Duties to Others – Model Rule 4.2

In context of negotiations, Model Rule 4.2 is fairly easy to apply as compared with the other Rules under discussion. The theory underlying the Rule is clearly stated in Comment 1 to the Rule:

This Rule contributes to the proper functioning of the legal system by protecting a person who has chosen to be represented by a lawyer in a matter against possible overreaching by other lawyers who are participating in the matter.

That is, a party to a matter usually retains counsel in order to best represent his interests in the matter. If opposing counsel could bypass this party’s attorney, there is a greater chance of manipulation (within the permissible scope of the other Rules) and it becomes more likely that an unfair agreement will result.

EXAMPLE: Grandpa Lou is getting on in years. While once an active, sophisticated businessman, his recent physical and mental decline have made it difficult for him to fully handle his own affairs. Last month, Jack filed suit against Grandpa Lou to contest Lou’s interpretation of a contract the two had entered into years before. Jack hires a slick attorney, Eric, to handle his case. Grandpa Lou has an attorney on retainer, Joe, who handles all such matters for him. Eric and Joe enter into negotiations for a possible settlement on behalf of their clients, but negotiations do not go smoothly. Frustrated with the lack of progress being made, one day Eric calls Lou and pitches a settlement which Lou had previously discussed with Joe and found unacceptable. Coming from Eric’s mouth, however, and so close to Lou’s nap time, Grandpa Lou agrees. Jack messengers over the papers which Lou signs, and Eric and Jack celebrate over surf ‘n turf.

Has Eric violated Rule 4.2? Without doubt. This is true even though Grandpa Lou here has not been found incompetent. While not as sharp as he once was, he still has the capacity to enter into a binding contract. Still, Eric has violated Rule 4.2. Lou being a vulnerable party is not the sole reason Rule 4.2 is violated. The result would be the same regardless of the particulars of the represented party contacted directly by opposing counsel.

EXAMPLE: Frankie is a sophisticated paralegal who was, unfortunately, injured in a car accident last year. She hires a local lawyer to represent her in the personal injury case. Johnnie, counsel for the defendant calls her and asks if she can talk to him, and if she would be willing to waive the “no-contact” right expressed in Rule 4.2. Having interviewed plenty of injured parties herself and feeling quite confident that Johnnie will be unable to manipulate her or trip her up, she quickly agrees to the waiver (which Johnnie faxed over, and which she signs and faxes back) and the telephone interview begins.

Frankie might be sophisticated, but that has no effect on the fact that Johnnie’s communication with her is impermissible under Rule 4.2. In addition, the waiver is of no use to Johnnie in avoiding a Rule 4.2 violation. According to Comment 3, “[t]he Rule applies even though the represented person initiates or consents to the communication.” Therefore, Frankie's consent, even with written proof of such, does not get Johnnie off the hook here.

The ambit of MRPC 4.2 (the Minnesota Rule which mirrors Model Rule 4.2) is not to be confused with an individual's constitutional right to counsel…. MRPC 4.2 protects the right of counsel to be present during any communication between the counsel's client and opposing counsel. The focus of MRPC 4.2 is on the obligation of attorneys to respect the relationship of the adverse party and the party's attorney. The right belongs to the party's attorney, not the party, and the party cannot waive the application of the no-contact rule - only the party's attorney can approve the direct contact and only the party's attorney can waive the attorney's right to be present during a communication between the attorney's client and opposing counsel. See State v. Miller, 600 N.W.2d 457, 464 (Minn. Supreme Ct. 1999) (citations omitted, parenthetical added).

No discussion of Rule 4.2 would be complete without coverage of the Rule’s applicability to corporate clients. Many negotiation settings involve “parties” which are companies rather than individuals. Counsel, and counsel’s paralegals, to a party in such a negotiation must understand the limitations imposed by Rule 4.2.

EXAMPLE: Widget Waterers International (“WWI”) is now a major corporation with manufacturing plants is several states and distribution channels across the world. WWI is also currently involved in some complex litigation, wherein shareholders, corporate officers, and WWI itself are all parties with opposing interest and their own counsel. Counsel for one of the shareholders receives permission from each of the officers’ attorneys to contact and interview the officers. Counsel for WWI sees her chance and files to have the shareholder’s counsel disqualified for a Rule 4.2 violation. However, because the officers’ attorneys agreed to the communications by opposing counsel, there was, in fact, no Rule 4.2 violation here. See La Jolla Cove Motel & Hotel Apartments, Inc. v. Superior Court of San Diego County, 121 Cal. App. 4th 773 (2004) (applying a California rule consistent with Model Rule 4.2 and citing Comment 7 to Model Rule 4.2, which states that the organization’s counsel need not consent to the communication if the party contacted is represented by his own counsel who gives consent.)