who purports to have a reasonable belief that his employer's counsel gave him personal advice. Such an exception is contrary to the narrow construction that courts are required to give the attorney-client privilege.
Moreover, this extraordinarily broad privilege would permit an employee to frustrate an internal investigation by his employer's counsel simply by claiming that his communications with counsel were based on a reasonable belief that counsel represented him. If that were so, the investigating attorneys would be precluded from disclosing the employee's communications to the employer, thus thwarting the investigation. Erecting such a wall between an employer and his counsel contravenes the attorney-client privilege's grounding principle--to facilitate compliance with the law by encouraging open and candid communication between attorneys and their clients. For these reasons, the reasonable belief standard appears to this Court to be overly broad, unworkable and contrary to well-established principles underlying the attorney-client privilege.
The Government contends that "even assuming arguendo that Mr. Nash somehow possessed a personal attorney-client privilege based on his conversations with [CW&S], the disclosure of the content of such conversations to Mr. Carey eliminated any such privilege." (Govt. Letter at 4.) No other party, either by submission or by oral argument, has addressed the impact of Nash's knowing disclosure of his communications to Carey on Nash's claim of privilege.
Waiver of an attorney-client privilege is a question of fact. See 3 Joseph M. McLaughlin, et al., Weinstein's Federal Evidence § 503.09 (2d ed. 1997). The attorney-client privilege is waived if the "holder of the privilege voluntarily discloses or consents to disclosure of any significant part of the matter or communication" over which the privilege is claimed. In re Kidder Peabody Sec. Litig., 168 F.R.D. 459, 468 (S.D.N.Y. 1996); see also Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1424 (3d Cir. 1991); United States v. Rockwell Int'l, 897 F.2d 1255, 1265 (3d Cir. 1990) ("the attorney-client privilege does not apply to communications that are intended to be disclosed to third parties or that are in fact so disclosed"); 3 Weinstein's Federal Evidence § 503.09 ("Any disclosure of a lawyer-client communication to a third party for purposes inconsistent with maintaining confidentiality waives the attorney-client privilege as to that disclosure"). Moreover, disclosure of a privileged communication waives the privilege as to all other communications on the same subject. See Rockwell Int'l, 897 F.2d at 1265; 3 Weinstein's Federal Evidence § 503.09.
In the instant case, even if Nash once possessed a personal privilege with respect to his communications with CW&S regarding the campaign contribution investigation, this Court finds that he knowingly waived that privilege. The uncontroverted evidence clearly establishes that Davis informed Nash of CW&S's intention to "make a full report to Ron Carey" concerning Nash's communications with CW&S, and that Nash neither objected nor sought to prevent that disclosure. (Davis Decl. I P 5(f).) This Court finds that Nash's failure to object serves to waive any privilege he may have had over all of his communications with CW&S concerning the campaign contribution investigation.
II. DECLARATORY JUDGMENT
Having found that Nash cannot assert an attorney-client privilege over his communications with CW&S, this Court must briefly consider whether to grant the Election Officer's application for a declaratory judgment, see 28 U.S.C. § 2201 ("Section 2201"), regarding Nash's claim of privilege. Section 2201 authorizes courts in "case[s] of actual controversy within its jurisdiction [with certain exceptions not relevant here] to declare the rights and other legal relations of any interested party seeking such declaration." Id. The issuance of a declaratory judgment rests within this Court's discretion. See Agency Rent A Car Sys. v. Grand Rent A Car Corp., 98 F.3d 25, 32 (2d Cir. 1996); Wilton v. Seven Falls Co., 515 U.S. 277, , 115 S. Ct. 2137, 2143, 132 L. Ed. 2d 214 (1995).
In the case at bar, this Court found above that this Court possesses jurisdiction over this matter pursuant to its oversight of the Consent Decree. In addition, this Court finds that Nash's assertion of privilege impacts the Election Officer's investigative ability, and that the issuance of a declaratory judgment precluding Nash from doing so will greatly assist the Election Officer in the fulfillment of her duties under the Consent Decree. This, in turn, will promote the objectives of the Consent Decree itself, as it will help determine the existence of illegal conduct within the recent Teamsters election. This Court therefore finds that the Election Officer's application for a declaratory judgment should be granted.
III. CODE OF PROFESSIONAL RESPONSIBILITY
At the hearing, Nash questioned CW&S's compliance with the New York Code of Professional Responsibility (the "Code"). (Tr. 77-80.) Specifically, Nash asserted that Disciplinary Rule 5-109 ("DR 5-109") sets forth the ethical rule applicable to the case at bar, and required the CW&S attorneys to inform Nash that they represented the Carey Campaign, not Nash. Id. at 78. CW&S did not address its compliance with DR 5-109 in its submissions or at the hearing. However, the firm does assert, and no one disputes, that it complied with Ethical Consideration 5-18 and Disciplinary Rule 4-101(B) of the Code. See (Memorandum of Law Submitted on Behalf of Cohen, Weiss & Simon In Response to the Election Officer's Application No. IX, United States v. International Bhd. of Teamsters, 88 Civ. 4486 at 5-7 (Apr. 16, 1997).) The only disputed ethical violation, therefore, is CW&S's compliance with DR 5-109. This Court takes seriously its duty to ensure the unwavering ethical conduct of the attorneys who appear before it, and therefore will consider whether, as Nash asserts, the CW&S attorneys breached DR 5-109, and, if so, the disciplinary action which should be taken against them.
Effective September 1, 1990, the Appellate Division of the New York Supreme Court adopted the Disciplinary Rules of the Code of Professional Responsibility under Title 22 of the New York Code, Rules and Regulations (the "Disciplinary Rules"). 22 N.Y.C.R.R. pt. 1200 (West 1997). These Disciplinary Rules are "applicable to all attorneys admitted to practice in New York State," 29 N.Y. Jud. Law app. (McKinney 1997 Supp.), are "mandatory in character," and set forth "the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action." 29 N.Y. Jud. Law app. Preliminary Statement (McKinney 1992). DR 5-109, "Conflict of Interest--Organization as Client," provides:
(a) When a lawyer employed or retained by an organization is dealing with the organization's directors, officers, employees, members, shareholders or other constituents, and it appears that the organization's interests may differ from those of the constituents with whom the lawyer is dealing, the lawyer shall explain that the lawyer is the lawyer for the organization and not for any of the constituents.
22 N.Y.C.R.R. § 1200.28 (1997) (adopting DR 5-109) (footnote omitted) (emphasis added). Davis is admitted to practice law in New York, (Tr. 14), and for purposes of the instant Opinion and Order this Court assumes that the other CW&S attorneys implicated in this matter are members of the New York bar. As a result, each of them is subject to the mandatory ethical conduct requirements of DR 5-109.
On its face, DR 5-109 simply requires an attorney who has an organization as a client to be cognizant of potential conflicts between the interests of the organization, and the organization's individual employees. See 22 N.Y.C.R.R. § 1200.28. When the attorney recognizes such a conflict, he must explain to the employee with whom he is dealing that the attorney represents the organization, not the employee. See id. The text of the rule, however, leaves unaddressed at least one consideration which is important to the case at bar. DR 5-109 does not inform attorneys specifically when they must explain to an employee that the attorney represents the employer, not the employee. The rule simply states "when" a lawyer becomes aware of such a conflict, he must make the required explanation to the employee. This Court observes, however, that "when" could mean "immediately and without hesitation," it could mean "after thinking it over for a few days," or it could mean "anytime at all, just as long so it is done."
The timing issue aside, this Court finds that, in the instant case, CW&S did, in fact, comply with the minimal facial requirements of DR 5-109. On March 18, 1997, Davis informed Nash that he should obtain his own counsel and that CW&S represented the Carey Campaign rather than Nash personally. (Davis Decl. II P 11.) This Court makes this finding reluctantly, however, and does so only because DR 5-109 does not clearly state when CW&S had to inform Nash that it did not represent him personally.
The following sequence of events demonstrates the reason for this Court's reluctance. Nash's communications with CW&S which he seeks to protect took place on March 10 and 12, 1997. (Davis Decl. I PP 5(c)-(d). On March 13, 1997, CW&S consulted its own outside counsel "concerning the status of [the firm's] conversations with Mr. Nash and other legal issues that the firm had encountered in connection with [the campaign contribution investigation]." Id. P 5(e). On March 14, 1997, Davis informed Nash that CW&S would disclose the firm's communications with Nash to Carey, and Carey did not object. Id. P 5(f). Not until March 18, 1997, did CW&S inform Nash that he should engage personal counsel. Id. P 5(g). It was only after Nash expressed his surprise that CW&S was not his counsel, that CW&S explained to Nash that the firm represented only the Carey Campaign, not Nash. (Davis Decl. II P 11.) CW&S thus recognized its own interest in hiring outside counsel on March 13, 1997, but inexplicably delayed five days before it informed Nash that it did not represent him--and even then, did so only in response to Nash's question. Even more troubling, however, is that CW&S informed Nash that he should hire his own lawyer one day after Davis elicited Nash's waiver of privilege. Were it not for this Court's findings above that there are two independent reasons that Nash cannot assert an attorney-client privilege, this Court would refer the CW&S attorneys to the Committee on Grievances for this district. See (Local Rules of the United States District Courts for the Southern and Eastern Districts of New York, Local Civil Rule 1.5(a), (b) (1997).) Because this Court's finding that Nash cannot assert the privilege does not hinge solely upon his waiver, CW&S's conduct is not the sole proximate cause of Nash's inability to assert the privilege. Nevertheless, CW&S's conduct amply justifies this Court's reluctance in finding that CW&S complied with DR 5-109.
While CW&S's conduct may have complied with the letter of the Code of Professional Responsibility, it clearly trampled its spirit. The Code's Preamble reads in relevant part:
Lawyers, as guardians of the law, play a vital role in the preservation of society. . . . A consequent obligation of lawyers is to maintain the highest standards of ethical conduct.
Each lawyer must find within his own conscience the touchstone against which to test the extent to which his actions should rise above minimum standards. But in the last analysis it is the desire for the respect and confidence of the members of this profession and of the society which he serves that should provide to a lawyer the incentive for the highest possible degree of ethical conduct. The possible loss of that respect and confidence is the ultimate sanction.