August 9, 2017 / 8:51 PM / 14 days ago

Must DOJ lawyers follow state ethics rules? New Mexico asks SCOTUS to decide

(Reuters) - In 2013, the U.S. Department of Justice sued the Supreme Court of New Mexico over state ethics rules for lawyers. Like 30 other states, New Mexico had adopted a model American Bar Association rule that subjects prosecutors to disciplinary action if they subpoena lawyers to present evidence about their clients, except in the narrowest of circumstances. The Justice Department claimed the New Mexico rule was interfering with federal grand jury investigations because federal prosecutors were wary of demanding testimony from other lawyers.

Last June, a divided three-judge panel at the 10th U.S. Circuit Court of Appeals sided with the Justice Department, holding that the New Mexico ethics law is pre-empted because it impedes grand juries’ broad investigative power under the grand jury clause of the Fifth Amendment.

New Mexico’s Supreme Court is now asking the U.S. Supreme Court to step in to require DOJ prosecutors to comply with the same ethics rules that govern every other lawyer in the state, as Congress mandated in the 1998 McDade Amendment. This week, the state Supreme Court’s lawyers from Wilmer Cutler Pickering Hale & Dorr submitted their reply to the Justice Department’s brief opposing Supreme Court review. Presumably, the U.S. justices will conference on the case in September, when they return from their summer break.

DOJ and the New Mexico Supreme Court don’t exactly agree on the consequences of the case. New Mexico’s brief argues that the 10th Circuit decision implicates the fundamental constitutional doctrines of states’ rights and separation of powers. The ruling, it said “seriously threatens the states' traditional and critical role in regulating the practice of law” and “undermines Congress's effort to require federal prosecutors - agents of the Executive Branch - to respect ethics safeguards, including those meant to protect the constitutional rights of criminal defendants.”

The Justice Department, on the other hand, said the ethics dispute has little practical significance. No state has apparently attempted to bring a disciplinary proceeding against a federal prosecutor who has subpoenaed a lawyer to testify before a grand jury, DOJ said, and it’s not clear that other states would enforce the rule, even if they’ve adopted it. (According to the Justice Department, 26 of the 30 states that have the same ethics rule as New Mexico also apply choice-of-law rules so federal prosecutors issuing grand jury subpoenas are subject to federal-court standards of professional conduct, not state ethics rules.) New Mexico was a unique problem, DOJ suggested. The 10th Circuit solved it, so there’s no need for the U.S. Supreme Court to get involved.

The context of the case is more than 25 years of tension between the Justice Department and state tribunals seeking to require federal prosecutors to follow their ethics rules. In 1998, after U.S. attorneys general from both the Bush and Clinton administrations insisted that DOJ litigators are not covered by state ethics rules, Congress enacted the McDade Amendment to the U.S. Code, which said federal government lawyers are indeed subject to the same “state laws and rules, and local federal court rules” as every other lawyer in the state.

The ABA, meanwhile, adopted a model rule in 1990 to limit the circumstances in which lawyers can be called to testify against clients. Under the ABA model rule of professional conduct, prosecutors may not subpoena lawyers in a grand jury investigation or another criminal proceeding unless the prosecutor reasonably believes the lawyer can provide essential, non-privileged and otherwise unattainable information. New Mexico imposed the ABA’s model rule in 2008.

The ABA standard is more stringent than the Justice Department’s internal rules for subpoenaing lawyers to testify against clients. DOJ rules demand that the information be “reasonably needed,” rather than “essential.” Justice does not require that the subpoenaed information be otherwise unattainable, just that prosecutors have been made “reasonable attempts” to obtain it from other sources. Its balancing test is whether the information it is seeking from the subpoenaed lawyer “outweighs the potential adverse effects upon the attorney-client relationship.”

The essence of New Mexico’s argument at the 10th Circuit – and now at the U.S. Supreme Court – is that Congress enacted the McDade Amendment precisely for circumstances like this, when the Justice Department wants its lawyers to be held to a different standard than everyone else. It contends there’s no federal pre-emption because the Constitution’s grand jury clause addresses grand juries themselves, not the conduct of federal prosecutors who have convened them.

If the U.S. Supreme Court does agree to review the case, there’s a chance the Justice Department could end up extending its control over the conduct of its prosecutors beyond what the 10th Circuit has already allowed. The 10th Circuit held that DOJ lawyers are subject to New Mexico ethics rules in criminal proceedings other than grand jury investigations. The Justice Department, in a cross-petition, argued that if the U.S. justices grant review of the 10th Circuit holding on pre-emption of state ethics rules in grand jury investigations, they should also reconsider whether federal prosecutors are subject to state rules in other criminal proceedings.

Even the New Mexico brief acknowledged that there’s no clear split among the federal circuits on tension between the grand jury clause and the McDade Amendment, though the brief emphasized appellate confusion on how rigorously federal prosecutors must adhere to state ethics rules. The ABA, the National Association of Criminal Defense Lawyers and the Association of Corporate Counsel submitted amicus briefs urging the U.S. Supreme Court to take the case.

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