Duty of Confidentiality Trumps Federal Whistleblower Provisions

In a recent decision weighing an attorney’s ethical duty of confidentiality against the government’s interest in encouraging “whistleblowers” to disclose unlawful conduct, the U.S. Court of Appeals for the Second Circuit ruled in favor of confidentiality. The issue arose in the context of a qui tam suit brought under the federal False Claims Act, which allows a private individual, or “whistleblower,” with knowledge of past or present fraud committed against the federal government, to assume the role of a “relator” and bring suit on the government’s behalf.

The Second Circuit held that the plaintiff-relator in this case, who was former in-house counsel to one of the defendants, violated Rule 1.9(c) of the New York Rules of Professional Conduct when he unnecessarily used confidential client information against his former company. The court reasoned that this Rule allowed the attorney to disclose such information only to the extent necessary to prevent the ongoing commission of a crime, as permitted by New York Rule of Professional Conduct 1.6(b)(2), and found that the attorney had exceeded these bounds. The court emphasized that, because there is no federal preemption of state attorney ethical rules, an attorney may not violate these rules in the process of bringing a qui tam suit.

Click here to read commentary on the opinion and click here to read the full opinion.

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