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NLADA Update, Volume 2, No. 5
March 31, 2000

LSC Threatens Fund Suspensions in Impasse Over Client Confidentiality;
NLADA Calls Actions Not Justified

With two grantee programs threatened with subpoenas and suspension of their LSC funds for protecting client confidentiality, NLADA President and CEO Clint Lyons has called on the Legal Services Corporation and its Office of Inspector General (OIG) to back off and work out a resolution to the impasse.

Lyons said the IG’s subpoena to the Legal Aid Bureau of Maryland (LAB) and Legal Services of New York City (LSNY) and LSC’s proposed suspension of funds to the two programs on May 1 were “not justified.” In line with their states’ rules on confidentiality and the attorney-client privilege, both programs had devised unique means of identifying clients and cases in an attempt to satisfy the OIG’s congressionally-mandated need to assess the accuracy of 1999 case data.

In a letter to LSC President John McKay, IG Edouard Quatrevaux and LSC Board Chair Douglas Eakeley, Lyons said the programs’ actions to provide information while protecting client confidentiality were reasonable under the circumstances. His letter of March 30 is reprinted in its entirety. (See the letter below)

Dear John, Ed and Doug:

Last week, the Inspector General (IG) issued a subpoena to the Legal Aid Bureau of Maryland (Bureau) and Legal Services of New York City (LSNY) to produce client names that were previously requested in the OIG data call memo of March 6, 2000. On Tuesday of this week, LSC issued a Proposed Determination of Suspension notice to the two programs for failing to provide client names as requested by the OIG on March 6.

I am writing to urge LSC and the OIG not to pursue these actions, but rather to work with the two recipients to develop an approach, consistent with the law governing LSC, that accommodates both the requirements of state ethical rules and attorney-client evidentiary privilege applicable to these two grantees as well as LSC’s need for case information necessary to carry out the review of CSR data by the OIG, mandated by Congress. I am taking this step because I believe these actions by the IG and LSC are not justified under the particular circumstances.

Under Sections 1006(b)(3) and 1009(d) of the LSC Act, LSC was not permitted access to any information protected by either state ethical rules on confidentiality or the attorney-client privilege. LSC apparently relies on Section 509(h) of the appropriations act to justify its request for client names. While we acknowledge that Section 509(h) did circumscribe the LSC Act’s protection of information covered by state ethical codes in five narrow categories,1 Section 509(h) specifically precludes LSC from accessing information protected by the attorney-client privilege, and nothing in section 509(h) gives LSC the right to have access to client problem codes. The OIG has stated that it disagrees with the view that linkage of client names with problem codes raises an issue under the attorney-client privilege, but LSC, through its Office of Legal Affairs, has recognized that client problem codes, when associated with client names, may be protected by the attorney-client privilege and state ethical rules on client confidentiality.

NLADA and its member programs are deeply concerned about the OIG/LSC’s efforts to obtain client information that may be protected by client confidentiality provisions of state ethical rules and state law on the attorney-client privilege and which is not specifically authorized for disclosure by Congress. We are particularly concerned that the law governing LSC does not authorize LSC to obtain client problem codes when they could be linked to client names and that alternative means of verifying the accuracy of the data submitted to LSC are available that would enable the OIG to carry out its Congressionally mandated responsibilities. Attached is a Resolution on Access recently adopted by the NLADA Board of Directors at its March 19 meeting which expresses the concerns of the Association.

NLADA and its member programs are fully aware of the need for LSC recipients to cooperate as fully as possible with LSC and the OIG in assuring the Congress that the 1999 CSR data is accurate and complete, and appreciate the efforts that the OIG made in setting up the so-called “Chinese wall” to address confidentiality concerns that we raised. In fact, in three previous communications to LSC recipients and NLADA members about the 1999 CSR data assessment, NLADA, through its counsel CLASP, recommended that recipients provide the information requested in Data Call One and Data Call Two. As we said in the most recent memo: “[w]e believe that the OIG has developed a data collection methodology that avoids confronting the confidentiality and privilege issues for purposes of the CSR Assessment.” However, this recommendation was necessarily based on a general analysis of ethical and attorney-client privilege issues. We also alerted our members to the fact that there are significant variations in both ethical rules and the attorney-client evidentiary privilege from state to state and that “recipients need to review their own state’s rules and privilege law” when confronted with requests for access to confidential client information.

In reviewing New York rules of ethics and opinions issued by the New York State Bar Association, LSNY was concerned that a July, 1999 ethics opinion would prevent it from disclosing client names to the OIG when such names possibly could be tied to the problem codes previously submitted under Data Call 1. LSNY sought and obtained advice from a leading scholar on ethics2 who concluded that under New York ethics rules, which address both secrets and confidentiality, LSNY could not disclose both client names and problem code information in the manner requested by the OIG, despite the OIG’s efforts to assure that the data would not be linked. Similarly, the Bureau determined that under Maryland ethics rules it was not clear whether they could reveal client names, that could possibly be associated with problem codes. The Bureau therefore sought an ethics opinion from the Maryland State Bar Association Ethics Committee, and they are awaiting a response to their inquiry.

Both programs did take steps to provide information to the IG that would allow him to carry out the mandated CSR Assessment. LSNY provided a list of the client’s first names and a unique identifier composed of numbers and letters from the client’s last name. The Bureau provided the client’s full name in cases where the client’s identity and type of problems had previously been revealed to a third party or in court. In cases where it was impossible to determine without examination of the actual case materials whether the client and the legal problem had been revealed, the Bureau also provided LSC a list that included the client’s first name and a unique identifier in lieu of the last name.

We believe that the actions of LSNY and the Legal Aid Bureau were reasonable under the circumstances. The unique identifiers permit identification of identical client names to test for duplicate cases; they establish that each case file is associated with an actual uniquely identified client; they demonstrate that there is a client name included in each file. The unique identifiers provide the OIG with an alternative way of fully carrying out its responsibilities, while ensuring that the two programs do not improperly reveal confidential client information.

We are concerned that the LSC letters, communications and press releases about LSC’s right to access to client names obscure two critical issues: First, Congress did not require that the IG obtain the specific information requested in Data Calls 1 and 2, but merely that the OIG assess the accuracy of the 1999 CSR data. Second, LSC does not have a statutory right to obtain information about problem codes when such codes are linked to a client name and when, by their very nature, the codes reveal information protected by state rules on client confidentiality or reveal communications protected by the attorney client privilege. For example, LSC problem codes include such specific categories as “parental rights termination,” “spouse abuse,” “mental health,” and “delinquent.” These specific codes reveal very specific and highly confidential information about the nature of the client’s legal problem. This information is clearly protected by both state ethical rules and by the attorney-client privilege (whether based on state or federal law) if the problem code is linked to a client name and the nature of the legal problem had not been revealed publicly or to a third party.

NLADA and its counsel CLASP stand ready to assist in any way we can in order to resolve the impasse that currently exists between LSC/OIG and the two recipients. We believe that the issues can be resolved in a way that will allow LSC/OIG to meet the requirements of Congress, enable LSC/OIG to verify the 1999 CSR data while still preserving the core values of client confidentiality and the attorney-client privilege.
Sincerely,
Clint Lyons

cc LSC Board of Directors

Section 509(h) authorizes disclosure of client names, eligibility records, retainer agreements, timekeeping records and client trust fund records.
He is currently the Chair of the New York State Bar Association Committee on Professional Ethics, though he was not acting on behalf of the committee in his recommendation to LSNY.

NLADA BOARD RESOLUTION

At its March 17-19 meeting in Washington, DC, the NLADA Board of Directors adopted a resolution urging all funding sources, including LSC and the OIG, to develop “practical approaches” to client information access that accommodate both client confidentiality obligations and the funders’ need for access to information to carry out oversight responsibilities. The board urged funders to “fully explore all options to obtain access to information” before deciding on funding for a particular grantee.

The resolution also proclaimed NLADA’s readiness and willingness to support programs confronted with requests for information protected by state ethical rules or laws.

The full text of the NLADA Board of Directors resolution follows.

Whereas, legal aid lawyers, like all other lawyers, are subject to and must comply with state ethical rules on client confidentiality and state law on the attorney-client evidentiary privilege which prescribe when protected confidential information may be released to a third party; and

Whereas, funders of legal aid sometimes will seek confidential client information protected by state ethical rules or the state attorney-client privilege in order to carry out the funders’ oversight responsibilities imposed by Congress or under state law; and,

Whereas, legal aid programs may be required as a condition of funding to provide confidential client information that may not be released to a third party under state ethical rules or the state attorney-client privilege;

Be it hereby resolved that NLADA:

Will urge funding sources, including the Legal Services Corporation and the Office of Inspector General, to:

develop and utilize practical approaches regarding access to confidential client information which are consistent with the law and which reasonably accommodate both the requirements of state ethical rules and attorney-client evidentiary privilege applicable to a particular grantee as well as the funders’ need to have access to the information necessary to carry out their oversight responsibilities;
fully explore all options to obtain access to information prior to making funding decisions affecting a particular grantee; and,

Will communicate, and advocate for, the grantee’s need to protect client confidential or privileged information from access by outside third parties when funders assert their authority to, and legislative or other bodies authorize, access by those funders to reports and records of legal aid programs in order to carry out their oversight functions; and,
Reiterates its willingness and readiness to assist and support legal programs confronted with requests from funders for access to confidential client information protected by state ethical rules or state law governing the attorney-client privilege.

NLADA Update, Volume 2, No 7
May 26, 2000

Work It Out, Judge Tells IG, Grantees

A federal judge considering enforcement of the LSC Office of Inspector General’s subpoena of client names from the Legal Aid Bureau of Maryland and Legal Services for New York City strongly urged the parties to sit down and resolve their differences.

Judge James Robertson of the U.S. District Court for the District of Columbia did not rule on whether he would enforce the OIG’s subpoena, which sought the names of the two grantees’ clients as part of his assessment of 1999 CSR data for a report to Congress due July 30.

However, Judge Robertson signaled that the IG should be willing to reach a reasonable accommodation with the grantees that would balance their client confidentiality concerns with the IG’s need for information to respond to the congressional deadline.

Both programs had offered to supply the requested data in the form of computer-generated unique identifiers. Their purpose was to avoid the potential linkage of client names and problem codes that would reveal the nature of clients’ legal problems and violate the attorney-client privilege and state ethics rules. The OIG maintained it had devised sufficient protections, and rejected the use of the unique identifiers as a surrogate for client names.

“It escapes me why the use of the computer names won’t do it for you,” Judge Robertson said of the OIG’s position.

Taking the subpoena enforcement issue under advisement, he said he may ultimately find that the IG is entitled to the client names. However, the judge said, “Whether the IG exercised good judgment in demanding the names is another question entirely.” In a related development, three New York City LSC-funded programs sued LSC in early May in the New York federal district court, alleging that it had violated the LSC Act and the New York Code of Professional Responsibility by demanding confidential client information.

NLADA Update, Volume 2, No. 8
June 8, 2000

LSNY, LSC and OIG Sued
On Access to Client Names

Bronx Legal Services, Legal Services for the Elderly, and Queens Legal Services filed suit in the U.S. District Court for the Eastern District of New York on May 4, 2000 against the Legal Services Corporation (LSC), Legal Services for New York (LSNY) and Edouard Quatrevaux, the LSC Inspector General (IG).

The three LSNY subgrantees sued in the wake of a subpoena issued to LSNY by the IG, demanding that LSNY provide the names of its clients as part of the IG’s assessment of the 1999 Case Service Review (CSR) data that recipients submitted to LSC.

The plaintiffs had refused to provide LSNY with actual client names, on the grounds that disclosure of client names, when combined with other information previously revealed to the IG by LSNY, would violate attorney-client privilege and the plaintiffs’ professional and ethical obligations under the New York Code of Ethics to protect client confidences and secrets.

In lieu of actual client names, the plaintiffs had provided LSNY with computer-generated unique client identifiers. LSNY had provided those identifiers to the IG in response to its data request. The IG rejected the unique identifiers, demanding that LSNY provide actual client names. In addition to the subpoena, the OIG had requested that LSC suspend funding to LSNY until it provided the data in the form requested. LSC has put off the suspension proceedings indefinitely.

The subgrantees’ lawsuit asks the court to declare that the defendants have no right to demand plaintiffs to provide actual client names, and that the plaintiffs have no obligation to provide the information demanded by the IG. In addition, the suit asks the court to enjoin LSC from suspending or terminating funding for LSNY or the plaintiffs, or from debarring them from future funding on the basis of their refusal to provide the data in the form requested. The defendants’ answer is due on June 28.

The U.S. Attorney for the Eastern District of New York, which is representing the IG in the lawsuit, has asked the District Court to transfer the lawsuit to the U.S. District Court for the District of Columbia, which is hearing the petition to enforce the IG’s subpoena. The U.S. Department of Justice is supporting the transfer motion. U.S. District Court Judge James Robertson held a hearing on May 26 on the petition to enforce the subpoena and has taken the matter under advisement.

NLADA Update, Volume 2, No. 9
June 19, 2000

JUDGE ENFORCES OIG SUBPOENAS

On Thursday, June 15, Judge James Robertson of the U.S. District Court for the District of Columbia issued an opinion and order enforcing the petition of the United States and the LSC Inspector General (LSC OIG) which sought to require that the Legal Aid Bureau of Maryland and Legal Services for New York City provide the OIG with client names of cases reported closed during 1999. Client names were required by data call 2 of the OIG’s process for reviewing the 1999 CSR data for a report to Congress due July 30.

As we have reported in past Updates, both programs had offered to supply the requested data in the form of computer-generated unique identifiers in order to avoid the potential linkage of client names and problem codes that would reveal the nature of clients’ legal problems. Both programs had submitted the problem codes as part of data call 1, but refused to supply all of the client names as part of data call 2. At the hearing, the Judge urged the parties to sit down and resolve their differences. The OIG insisted upon requiring client names.

The judge’s decision first addressed whether the attorney-client privilege protected the disclosure of the combination of a client’s name and a problem code. The Court held that the blanket assertion of the privilege could not be made by the two recipients to prevent the enforcement of the subpoena. The Court analyzed the attorney-client privilege finding, consistent with the general law, that the privilege “does not ordinarily protect the identity of a client, the amount of a fee, or the general purpose of legal work performed.” The Court then examined the so-called Baird exception to the general rule and held that it “does not apply where disclosure of a client’s name would only reveal general information about the nature of the services performed.” The Baird exception -- Baird v. Koerner, 279 F.2d 623 (9th Cir. 1960) -- prohibits disclosure “when disclosure, in conjunction with information already provided, would be tantamount to revealing an ‘indubitably confidential communication.’” However, the Court did make clear that the “ruling is not intended to foreclose specific claims of privilege as to individual clients” when “disclosure of the combination of a client’s name and a problem code would reveal a client’s ‘motive’ for seeking representation.”

Second, the Court addressed the question of whether federal law required the programs to turn over client names even if they were forbidden to do so under state ethics rules. The Court analyzed both sections 1006(b)(3) of the LSC Act and 509(h) of the appropriation provisions and found that the language in section 509(h) was not ambiguous and that recipients had to turn over client names to any duly authorized auditor or monitor of LSC.

Finally, the Court considered whether the OIG’s insistence upon disclosure of full client names was unreasonable because the program’s offer to provide independently verifiable identifiers would suffice to meet LSC OIG’s needs without invading the attorney-client relationship. Recognizing that the program had a point and conceding that the “use of unique client identifiers would appear to be less problematic, and even more cost-effective, than the OIG’s ‘Chinese Wall’,” the Court nevertheless held that the OIG’s request meets the standards for enforcement of the subpoena -- that the information sought was within the authority of the agency, the request was not too indefinite and that the information sought was reasonably relevant. To quote the Court:

“It is not the province of this court to decide the best way for LSC OIG to carry out its responsibilities. As Americans now have ample reason to know, there is no legal requirement that the power to investigate be tempered by wisdom or restraint. LSC’s refusal to accept unique client identifiers in lieu of full client names may be clumsy and unnecessary, but I cannot say that it is unreasonable.”

NLADA Update, Volume 3, No. 11
June 1, 2001

U.S. Court of Appeals for the District of Columbia Affirms LSNY Decision

On Friday, May 25, a three-judge panel of the U.S. Court of Appeals for the District of Columbia affirmed the District Court’s decision to enforce an administrative subpoena by the LSC Inspector General (IG) against Legal Services for New York City (LSNY). LSNY was one of 60 programs that were required to submit data on their 1999 CSR cases as part of the IG’s assessment of the accuracy of the LSC 1999 CSR reports. LSNY submitted the data required in Data Call 1 (case numbers and problem codes), but refused to submit the client names that were required by Data Call 2, even though the IG had established a “Chinese wall” procedure to keep the responses to the two data calls separate. LSNY argued that the attorney-client privilege and attorneys’ professional obligations prevented it from disclosing client names that could potentially be associated with the problem codes that had previously been produced. They also claimed that the IG’s request was unduly burdensome. The IG issued a subpoena for the data and, after LSNY (and the Legal Aid Bureau of Maryland) refused to comply, in conjunction with the U.S. Department of Justice, petitioned the U.S. District Court for the District of Columbia to enforce the subpoena.

The District Court granted the petition. The Legal Aid Bureau of Maryland complied with the subpoena, but LSNY decided to appeal. NLADA joined the Brennan Center, the State Bar of New York and others in submitting an amicus brief in support of LSNY.

After a preliminary discussion of its jurisdiction, the appeals court panel addressed the issues raised by LSNY, agreeing with the District Court’s conclusions. The court rejected LSNY’s blanket assertion of attorney-client privilege for the data on all cases, indicating that those asserting the privilege had the burden to show that “…the privilege applies to each communication for which it is asserted.”

The appeals court then rejected the IG’s contention that it was not governed by Section 1006(b)(3) of the LSC Act which requires LSC to ensure that legal services - from the simple conjunctive phrasing in s 509(h).” The Court then concluded “…that grantees’ ethical obligations do not prevent the Inspector General from compelling production of client names associated with problem codes..[and] we need not reach the sufficiency of the Chinese wall instituted to prevent that association.

Finally, the court rejected LSNY’s claim that the subpoena was unduly burdensome because disclosure of client secrets would undermine LSNY’s ability to assure the secrecy of client communications. The court concluded that LSNY’s proposed alternative, the creation and production of unique client identifiers in lieu of names, was a greater burden, and that the IG was not “obviously wrong” in asserting that the most reliable way to detect errors was to obtain actual client names.

The Court of Appeals affirmed the district court’s order granting the summary enforcement petition and remanded the case to the district court for possible further proceedings.


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