15.07. Using or Revealing Former Client Confidences [Rule 1.9(c)]

It should come as no surprise that a lawyer has an obligation to maintain the confidentiality of information obtained from former clients.  A lawyer may not use or reveal information obtained in the course of representation to the disadvantage of a former client unless the Rules allow the lawyer to do so (for example, the exceptions to the duty of confidentiality set out in Rule 1.6(b)).[1] 

The only exception to maintaining the confidentiality of former client informationis if the information has become “generally known.”[2]  The obvious question is:  when does information become “generally known”?  The Rules do not provide guidance of when information is “generally known” but the ABA has issued an opinion setting out two situations where information will be generally known:  (1)  where the information “is widely recognized by members of the public in the relevant geographic area”; and (2) where it is “widely recognized in the former client’s industry, profession, or trade.”  If information has been publicized through media sources (newspapers, radio, internet, social media, etc.) it is generally known.  If the information is not known to the public generally – but is well known within an industry, profession, or trade – it is generally known under the rule.[3] However, just because the information is available to the public does not mean it is generally known:  “the fact that the information may have been discussed in open court, or may be available in court records, in public libraries, or in other public repositories does not, standing alone, mean that the information is generally known….”[4]

Larry Lawyer represented Harry Husband in his divorce.  As part of the representation, Lawyer prepared the property settlement document, which was filed at the courthouse and is a public record.  Lawyer sent Husband a letter terminating the representation after the divorce was granted.  Lawyer wants to use information that is contained in the property settlement document to invest in property that would cause Husband’s property to be worth significantly less.  If the lawyer acted on the information, would he be subject to discipline? [In re Gordon Properties, LLC, 505 B.R. 703, 707, n.6 (Bank. E.D. Va. 2013)]

Yes.  The lawyer will argue the fact that the information is in a public record (filed at the courthouse) means that it is generally known.  That, however, is not the test.  Here is how the Gordon Properties court puts it: 

‘Generally known’ does not mean information that someone can find.  It means information that is already generally known.  For example, a lawyer may have drafted a property settlement agreement in a divorce case and it may be in a case file in the courthouse where anyone could go, find it and read it.  It is not ‘generally known.’  In some divorce cases, the property settlement agreement may become generally known, for example, in a case involving a celebrity, because the terms appear on the front page of the tabloids.  ‘Generally known’ does not require publication on the front page of the a tabloid, but it is more than merely sitting in a file in the courthouse.

[1] ABA Rule 1.9(c)(1) & (2).

[2] ABA Rule 1.9(c)(1).

[3] ABA Formal Op. 479 (Dec. 15, 2017).

[4] ABA Formal Op. 479 (Dec. 15, 2017).