Ethics and the Environmental Lawyer: A Hazardous Combination?

1. Ethics and the Environmental Lawyer:A Hazardous Combination? Los Angeles County Bar Association Environmental Section Lunch Program, December 13, 2007

2. As a courtesy . . . • Please silence all cell phones, pagers, Blackberries and other electronic devices. • Please be considerate of others if you must respond to an urgent call, page or email. Thank you ! Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

3. Participants • James M. Fischer, Professor of Law, Southwestern Law School • Sean B. Hecht, Executive Director, Environmental Law Center, UCLA School of Law • Vincent M. Gonzales, Esq., Moderator, Senior Environmental Counsel, Sempra Energy Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

4. Program Outline • Rules & General Principles • Hypotheticals • Roundtable discussion format • Participation is strongly advised! Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

5. Roundtable Rules • Introduce yourself prior to speaking. • Briefly summarize your point or issue. • Speak and contribute to the discussion. • Listen as others speak and contribute. • Be open and candid, as well as courteous. • “What happens in this room, stays in this room.” Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

6. Rules &General Principles “It isn't pollution that's harming the environment. It's the impurities in our air and water that are doing it.” Dan Quayle

7. Rules • California Business & Professions Code §§ 6000-6228 (the State Bar Act). • Rules of Professional Conduct of the State Bar of California (“Rules”), • State and County Bar Association ethics opinions (advisory only, essentially interpretations of the Rules of Professional Conduct). Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

8. Rules • California and Federal Court rules of court (governing attorney admission, legal education requirements, court appearances, decorum, etc.). • Judicial decisions interpreting the rules. • American Bar Association model Rules of Professional Conduct (“Model Rules”) (again advisory only because the California Rules differ in many respects). Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

9. General Principles • CRPC 2-100 Communication with a Represented Party • CRPC 3-310 Avoiding Representation of Adverse Interests • CRPC 3-210 Advising the Violation of Law • CRPC 3-600 Organization as Client • CRPC 5-100 Threatening Criminal, Administrative or Disciplinary Charges Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

10. Sarbanes-Oxley Rule 205 • Escalation: A lawyer has an obligation to report “up the ladder” any credible evidence of a material violation of State or U.S. securities laws, a material breach of a fiduciary duty or a similar material violation of any U.S. federal or state law. 17 C.F.R. § 205. • Reports should be made to CLO, but if CLO does not act appropriately and in timely fashion, counsel has an obligation to make facts known to audit committee or full board. • Issues abound: “credible evidence”, materiality, adequacy of CLO’s response. Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

11. Whistleblowers • Ca. Labor Code protects whistleblowers. See §§ 1102.5, 1106 and 98.6 • The Occupational Safety and Health Act, § 11(c), prohibits an employer from discharging or discriminating against an employee for exercising his/her rights. Similar provisions exist in every major federal environmental law. • Sarbanes-Oxley § 806 protects employees at publicly-traded companies who are reporting or providing evidence of any violations of securities laws. Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

12. HYPOTHETHICAL 1

13. Facts • Tox Co. makes plastic compounds. • Tox Co. discharges wastes into a local river pursuant to CWA permits. • Current standards prohibit discharges of wastes >0.65 grams/liter of liquid effluent. • RWQCB rarely reviews discharge records. • Increasing discharge to 1.25 grams/liter will have no adverse environmental impact. Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

14. Questions • May you advise Tox Co that the regulatory agency will in all likelihood not review or monitor Tox Co’s environmental reports? • May you advise Tox Co to raise its liquid effluent discharge to 1.25 grams per liter? Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

15. Authorities • Cal. Rules of Professional Conduct, Rule 3-210 • ABA Model Rules of Professional Conduct, Rule 1-2(d) • Restatement Law Governing Lawyers §94 (2000) Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

16. HYPOTHETICAL 2

17. Same as Hypo 1, plus: • Tox Co. uses Chemical X in its processes. • Newly published studies show that Chemical X raises by 7.5% the risk of severe to moderate birth defects in those exposed to the chemical. • Unverified rumors of Chemical X being released into the ground. • Substitute costly; unreliable supplier. Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

18. Questions: • Should you relate your concerns to other constituents of Tox Co? If so, to whom and when? • Assume Tox Co holds fast to its decision not to discontinue use of he chemical solvent. • May you write an op-ed piece in the local newspaper discussing the recently published studies? • May you include in the op-ed piece thinly veiled hints regarding leaks of the chemical from Tox Co’s facility? Does it matter that you are no longer working at the firm and Tox Co is no longer your client? Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

19. Authorities • Cal. Rules of Professional Conduct, Rule 3-600 • ABA Model Rules of Professional Conduct, Rule 1.13 • Restatement Law Governing Lawyers §96 (2000) • Ethics Alert: The New SEC Attorney Conduct Rules v. California Duty of Confidentiality (http://calbar.gov/calbar/pdfs/SEC-ethics-alerts.pdf ) • Conflicting Currents: The Obligation to Maintain Inviolate Client Confidences and the New SEC Attorney Conduct Rules, 33 Pepp. L. Rev. 89 (2004) Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

20. HYPOTHETICAL 3

21. Same Facts as Hypo 2, Plus: • Government sues Tox Co. and 4 other companies. • Would it be a good idea to enter into a joint defense agreement w/ other PRPs? • Would answer to above change if there was a parallel mass tort • Would answer to above change if the US attorney has convened a Grand Jury. Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

22. Authorities • Cal. Rules of Professional Conduct, Rules 3-100, 3-310 • ABA Model Rules of Professional Conduct, Rules 1.6, 1.7 • U.S. v. Stepney, 246 F. Supp. 2d 1069 (N.D. Cal. 2003) Ethics and the Environmental Lawyer: A Hazardous Combination? LACBA, December 13, 2007

23. RoundtableDiscussion “It is the trade of lawyers to question everything, yield nothing, and talk by the hour.” Thomas Jefferson

24. Conclusions