A Privilege to Serve
A dispute between the Legal Services Corp., the federal clearinghouse for funding legal aid to indigents, and a legal aid office in California is testing the limits and definition of attorney client privilege.
California Rural Legal Assistance, based in San Francisco, is resisting a subpoena issued last fall by the LSC’s inspector general to turn over names of clients and information about their cases.
It’s the latest salvo in a six year dispute between the LSC and the California organization, which employs 53 lawyers in 22 offices around the state. Like all LSC grantees, clients of California Rural Legal Assistance must meet income threshold requirements. Many work in the local farming and ranching economy.
The LSC inspector general, Kirt West, says his office resorted to a subpoena only after repeatedly failing in its attempts to get CRLA to voluntarily provide the information as part of an audit. Citing the investigation, he declined to say why his office is seeking the information or what investigators expect to find.
The LSC says the information is not privileged, and it is needed to show how the California group uses the money it receives from the LSC. Grantees must allow such audits in order to receive funding from the congressionally chartered and funded LSC.
But CRLA Executive Director Jose Padilla says sensitive client interests would be compromised by compliance with the subpoena, which seeks records on nearly 40,000 clients from the last three years.
For example, he says, revealing names and case types would allow employers to find out who has been seeking legal help on labor rights. Many employers would likely retaliate by firing workers who cannot afford to lose their jobs, says Padilla.
Other clients are victims of domestic violence who may not have left abusive situations and whose abusers could find out that they have sought legal help, he adds.
“We are a professional law firm, and we have to protect our clients’ privacy rights,” Padilla says. “That’s an ethical duty of lawyers, and it’s a statutory requirement in California as well.” California’s strict privacy laws prohibit agencies from revealing personal information without an individual’s consent. Padilla says his counsel has determined that the information sought by the LSC is protected by California law.
For his part, the LSC’s West says federal law governs, allowing the LSC to audit grantees. West says his office needs the information to ensure that the California group is using its grant money for the purposes designated by Congress. West contends that the information he seeks–primarily client names and case types–is not privileged.
Left in a Bind
The question of whether federal statutes that apply to LSC grantees take precedence over state privacy laws and attorney client privilege puts CRLA lawyers in a bind. If they comply voluntarily with the inspector general’s request for information, they could risk disciplinary action by California bar authorities or even civil action for violating privacy laws.
Last spring, then ABA President Michael S. Greco of Boston directed the Task Force on Attorney Client Privilege to review the question of whether the information is protected.
R. William Ide III of Atlanta, a former ABA president who chairs the task force, says he was disturbed by what he sees as government intrusion into the relationship between attorneys and clients.
“Based on the facts we saw, we were deeply concerned that this appears to be a troubling intrusion by a government grant agency,” says Ide. “Should the states regulate lawyer ethics? Yes. Should a federal grant agency be able to say, ‘We gave you money so we get to audit’? That’s a much different question.”
Deborah Hankinson, chair of the ABA Standing Committee on Legal Aid and Indigent Defendants, says the LSC’s audit authority doesn’t change the nature of attorney client privilege for grantee organizations such as CRLA. She says clients should be allowed to seek legal counsel in confidence without worrying that even the fact of their meeting will be revealed.
“In my view, there is no difference between this and a private attorney being asked for information that compromises a client’s interests,” says Hankinson, who heads her own law firm in Dallas.
“The ABA has always stood for lawyers maintaining the highest ethical standards and not seeing them eroded as would happen here,” Hankinson says.
Though West says he has no intention of sharing the information outside of the LSC, he would not promise that his office would withhold the information if it were requested by Congress.
That troubles Padilla, who contends that the investigation is a witch hunt prompted by local ranch owners who vehemently oppose CRLA’s work to protect labor rights.
West declines to identify who brought allegations of “irregularities” to the attention of his office. In an interim report to the Subcommittee on Commercial and Administrative Law of the U.S. House Judiciary Committee, West said that his office found evidence that CRLA has violated federal laws governing the work LSC grantees are allowed to undertake.
Specifically, West said in the report, CRLA had solicited clients, worked on a fee generating case, requested attorney fees in a successful lawsuit and “associated with political activities.” All are prohibited under federal law for grantees using LSC funds. In 1996, Congress enacted reforms to statutes governing LSC funding, specifically outlawing use of LSC money for most class actions. The changes target activities not directly related to the representation of individual, identifiable clients with specific legal causes of action against a particular opposing party. The amendments also prohibit political activities, amicus briefs and monitoring private or governmental agencies for compliance with federal statutes.
In his report, West says he is still looking into allegations of whether CRLA used LSC funds to engage in lobbying, employer monitoring, filing amicus briefs and filing cases on behalf of the “general public” under California unfair competition laws. While state law allows private civil actions on behalf of the general public in some circumstances, federal law prohibits use of LSC funds for such litigation.
In addition, West says he needs more information to determine whether CRLA “disproportionately focuses its resources on farm worker and Latino work, and, if so, whether such practice is inappropriate for an LSC grantee.”
“That’s Just the Way it Works”
Padilla asserts that the last allegation is at the core of the investigation. He says many ranchers in the area employ both legal and illegal Hispanic laborers, and the LSC may be trying to show that CRLA has represented illegal workers. He also points out that CRLA is aware that federal law prohibits using LSC funds for such representation, and that care is taken to ensure named parties in labor lawsuits are legal.
“But when we win, and a rancher has to change his ways, it benefits all of his workers, including the immigrants without papers. That’s just the way it works,” says Padilla.
Padilla says the allegation smacks of interfering in his organization’s priority setting process. He worries that the information West’s office has requested will be scrutinized in part based on the actual or perceived ethnicity of the client a move he says has civil rights implications.
Padilla also believes the inspector general is overreaching his authority with some of the allegations. Federal laws are specific about forbidden activities, he says, but some allegations in West’s report seem to expand the definitions of what is prohibited.
“We understand that we have to practice within certain restrictions, but there are enough restrictions without the IG expanding the restrictions beyond his authority,” Padilla says.
West declines to be specific about the allegations in his report.
“We will finish our investigation and make our recommendations for action, if any, to the LSC board of directors. At that time, the information becomes public,” he says.
The ABA’s Ide says CRLA has long established ABA policy on its side in the dispute over information protected by the attorney client privilege.
“The basic issue is that everyone is entitled to effective assistance of counsel,” says Ide, “and that can only happen where the nature of the representation is controlled by the attorney and the client, not a federal agency. This audit request has a potentially devastating chilling effect.”
