Of libel suits and legal bills

No, this isn’t what I got for Christmas, let alone a smooth transition from Christmas cheer to real life. Still, at least two items of legal interest have been in the Argus recently that I believe deserve some comment or explication.

The most recent is that a judge refused to dismiss Dan Scott’s libel action against the Argus. South Dakota Moderate, like perhaps others, wonders why the judge couldn’t look at the allegedly defamatory column and why Scott’s attorney didn’t attach a copy of it to the complaint. The latter may well have been a calculated and relatively wise legal tactic.

The type of motion the Argus filed really challenges only the legal sufficiency of the allegations in the complaint filed by Scott. As a result, the complaint is generally all the judge can look at in ruling on the motion. By not attaching a copy of the column itself, all the judge could not — and did not — look at is what the column in its entirety, only what the complaint said about it. That in and of itself created an uphill battle for the Argus on this motion.

This doesn’t mean she will not look at the full column in future rulings. The denial of the motion merely means the Argus has to file an answer and that both sides will engage in discovery, the process of allowing each to obtain information from the other party. Once some or most of that has occurred, it is likely the Argus will again seek to have the lawsuit thrown out. This effort, though, would allow the judge to look not only at the column but at the evidence gathered by the parties during the discovery phase of the proceeding.

The other legal topic attracting the attention of the Argus is public access to the legal bills of private attorneys hired by the state. (Disclosure statement: I and other members of my law firm currently represent the state and/or its officials or employees in various currently pending litigation for which we were hired by the public entity pool for liability.) Although there has been reference to attorney-client privilege, there’s a somewhat related matter that’s not been mentioned.

In April 1999, the Ethics Committee of the State Bar issued a written opinion that the rules of ethics forbid a lawyer from submitting detailed legal bills to outside auditing companies without the client’s consent. Why? Because it could violate attorney-client privilege. Before you think this is an aberration, the opinion is in line with the conclusions reached by bar organizations and courts in a significant number of other jurisdictions. While South Dakota’s opinion involves a different situation, it reveals that concerns that allowing third parties access to legal bills might disclose information protected by attorney-client privilege long predates the current hubbub. If the Argus doubts that concern is a legitimate one, perhaps it has no problem turning over its legal bills from the Dan Scott libel action to Scott’s lawyers.

As the opinion notes, the client can consent to disclosure. And, as some have suggested, there are other ways around the privilege issues, such as redacting the bills. To date, though, the articles seem to create the impression that attorney-client privilege has been cooked up by the State or the lawyers as an after the fact rationalization to keep all the State’s legal bills secret. The bottom line, though, is this issue does not arise solely with the State’s legal bills and there are legitimate ethical rules at play. Whether the State, as a legal client, believes it should allow disclosure and in what circumstances or form is another issue beyond the ethical rules governing lawyers.

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The committee is of the opinion that the [Rules of Professional Conduct] make it clear that the client must consent before you can disclose [detailed billing entries to a third party] and that disclosure without client consent would violate the rules.

State Bar of South Dakota Ethics Opinion 99-2